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3 High-Quality Stocks to Watch in QGRO
ETF Trends· 2025-09-02 20:32
Core Viewpoint - The article discusses the potential for a market downturn in late year and suggests that high-quality stocks, particularly through the American Century U.S. Quality Growth ETF (QGRO), may be a favorable investment strategy amidst economic uncertainties [1][5]. Fund Overview - The American Century U.S. Quality Growth ETF (QGRO) charges a fee of 29 basis points to track the American Century U.S. Quality Growth Index, focusing on a mix of "high growth" and "stable growth" companies [2]. - QGRO employs a rigorous screening process for quality, growth, income, cash flow, and profitability in its investment selections [2]. Performance Metrics - Over the past year, QGRO has achieved a return of 25.3%, outperforming the ETF Database Category average of 18.8% and the FactSet Segment average of 10.76% [3]. - The fund's largest holding, Booking Holdings (BKNG), has returned 13.1% year-to-date (YTD) and has a forward price-to-earnings (P/E) ratio of 24.86, along with a 17% return on assets [3]. - Applovin (APP) has shown a remarkable YTD return of 47.8% and boasts a return on equity of 259.7% as of September 2 [4]. - TJX Cos. (TJX), another investment in QGRO, has returned 14.1% YTD and has a return on equity of 60% [5]. Future Outlook - High-quality stocks are positioned to perform well if other market areas weaken, making QGRO an appealing option for investors looking to refresh their equity holdings [5].
Citi recommends going long on high-quality stocks into the summer
CNBC Television· 2025-06-16 21:43
Market Overview & Geopolitical Risk - Equity investors are largely comfortable ignoring geopolitical risks unless oil prices significantly increase [2] - The market recovery suggests reassurance that equity investors can overlook geopolitical risks if oil prices remain stable [2] - Geopolitical risks are primarily assessed through the channel of oil prices [3] Investment Strategy & Positioning - The firm recommends a long position in high-quality US equities due to earnings growth, high valuations, and headline risks [4][5] - A rotation from growth stocks into quality stocks is advised due to changes in the interest rate market [6] - Institutional investors had significantly recovered their positioning, though slightly less heavy than in late February [8] - Positioning is considered pretty full, close to levels seen in mid to late February, but not underweight [9] Sector Analysis - Energy sector is generally underowned and not considered a core part of quality stocks, but potential persistence of geopolitical risks may force positioning [10][12] - Large-cap banks are favored due to a seemingly good operating environment, while regional banks are considered tricky due to lack of sponsorship for lower quality trades [18] Macroeconomic Factors - A weaker dollar is a tailwind but could become a concern if it becomes too volatile, potentially signaling the end of US exceptionalism [13] - Foreign investors are hedging more of their dollar risk [15] - Strong Q1 earnings, particularly from Hyperscalers doubling down on capital expenditure, have reinforced the AI trade and attracted investors back to US equities [13][14]