Exchange Traded Funds (ETFs)

There are a wide variety of exchange traded funds (ETFs) available, including offerings from American Century Investments®. On the surface, an ETF looks like a conventional mutual fund in that both represent an investment in a collection of securities. The primary difference is how they are bought and sold:

  • A mutual fund's net asset value (NAV), or the price of a single share, is calculated once per day after market close. All trades are based on the day's NAV.
  • ETFs are securities that are traded throughout the day on an exchange, like individual stocks. Generally, an ETF's price is the market value of the underlying securities at the time of trade.

Features of Exchange Traded Funds

No Minimum Investment Required

Similar to individual stocks, ETFs are traded at prices set by market demand, typically close to the net asset value of the underlying securities.

Fees Are Generally Lower

Fees tend to be lower than an equivalent mutual fund, with expense ratios typically ranging from 0.09% to 0.99%. Keep in mind that brokerage commissions are charged for ETF trades and are generally the same rates as equity trades. American Century® ETFs are available for no commission only through American Century® Brokerage.

Liquidity

You can buy or sell ETFs throughout the trading day at the current price, which changes throughout the day.

Ready to Start?

You can buy and sell ETFs with an American Century Brokerage account.

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Leveraged and Inverse ETFs Are not Marginable

An alert about Leveraged and Inverse ETFs  was issued by the Securities Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA). Further, following FINRA Regulatory Notice 09-31 , American Century® Brokerage has set the margin requirements for these securities at 100%, meaning that leveraged and inverse ETFs are not marginable.

As with all investments, there are risks of fluctuating prices, uncertainty of dividends, rates of return and yields. It is possible to lose money by investing in an ETF.

You should consider the fund's investment objectives, risks, and charges and expenses carefully before you invest. The fund's prospectus or summary prospectus, which can be obtained by calling 1.800.345.2021, contains this and other information about the fund, and should be read carefully before investing. Download Prospectus: Mutual Fund or Exchange Traded Fund (ETF). Investments are subject to market risk.

ETF shares may be bought or sold throughout the day at their market price, not their Net Asset Value (NAV), on the exchange on which they are listed. Shares of ETFs are tradable on secondary markets and may trade either at a premium or a discount to their NAV on the secondary market.

ETFs trade like stocks, fluctuate in market value and may trade at prices above or below the ETF's net asset value. Brokerage commissions and ETF expenses will reduce returns.

Brokerage Services are provided by American Century Brokerage, a division of American Century Investment Services, Inc., registered broker/dealer, member FINRA, SIPC.

For detailed descriptions of indices or investing terms referenced above, refer to our glossary.

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Exchange Traded Funds (ETFs): Foreside Fund Services, LLC - Distributor, not affiliated with American Century Investments Services, Inc.