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September 5, 2018 - Kansas City, Mo.
Global asset manager American Century Investments is taking additional steps toward strengthening its position as an asset manager of choice for investors looking for solutions to better manage risk associated with, or capture opportunities generated by, environmental, social and governance (ESG) factors. In addition to bolstering American Century Investments' ESG and investment stewardship team with new analytical talent, the firm also has become a signatory of the United Nations-supported Principles for Responsible Investment (PRI), which is recognized as the world's leading network of asset managers and financial market participants committed to incorporating ESG considerations into the investment analysis process.
"Signing on to the Principles for Responsible Investment further underscores our long-term commitment to meeting our clients' investment management expectations, while having a positive impact on society," said Jonathan Thomas, American Century Investments' president and chief executive officer. "From our unique ownership model, which results in corporate dividends supporting medical research, to the development of a proprietary framework aimed at supporting ESG-focused investment solutions, American Century has made great strides as a sustainable and responsible investment management firm."
As a PRI signatory, American Century agrees to uphold six principles in support of ESG investment practices:
Established in 2006, the PRI is the world's leading proponent of responsible investing. It works to understand the investment implications of ESG factors and to support its international network of investor signatories in incorporating these factors into their investment and ownership decisions.
"It's a great pleasure to welcome American Century Investments to the PRI," said PRI Chief Executive Officer Fiona Reynolds. "The firm's track record of recognizing the importance of sustainable investing sends a great message to other U.S. asset managers that looking at ESG factors is an essential part of a sound investing strategy."
In recent years, investor interest in sustainable or responsible investing has been growing. In 2016, assets in ESG investments topped $8.7 trillion in the United States and $23 trillion1 globally. American Century proprietary research2 found that the next generation of investors are much more socially conscious when making investment decisions. In a 2018 study, 60 percent of Millennials indicated that an "investment's impact on society" was a major consideration when investing, compared to 51 percent for Gen Xers and 52 percent for Baby Boomers.
American Century Investments' embracement of impact investing dates back to 1994, when company founder, James E. Stowers Jr., and his wife, Virginia, dedicated the vast majority of their net worth to create the Stowers Institute for Medical Research, a non-profit biomedical research institution focused on researching gene-based diseases, including cancer. In the ensuing years, Mr. and Mrs. Stowers transferred their equity stake in American Century to an endowment supporting the Stowers Institute, creating an ownership model that results in more than 40 percent of the company's annual dividends funding medical research. Since 2000, dividend distributions to the Institute total $1.4 billion.
In 2006, American Century excluded investments in securities issued by tobacco companies from the underlying mutual funds used exclusively by the firm's One Choice® Target Date3 Portfolios. The popular target date funds, which are often used in defined contribution plans, have total assets of more than $23 billion4.
In 2014, American Century Investments' global and non-U.S. equity portfolio management teams began formally integrating MSCI ESG ratings and analysis into their investment strategies. In 2016, the company modified an existing strategy to incorporate ESG considerations into the investment process and relaunched it as U.S. Sustainable Large Cap Core Equity (Sustainable Equity Fund-AFDIX). American Century also has extensive experience managing separate accounts in accordance with client-mandated investment restrictions, including socially responsible investing screens, global norms (including the United Nations Global Compact framework), faith-based values or pre-selected security exclusions.
In 2017, the firm appointed Guillaume Mascotto to the newly created position of vice president and head of ESG and investment stewardship. He and his team developed an ESG integration framework and proprietary scoring model to help American Century Investments' analysts and portfolio managers assess ESG risks and opportunities through their active investment process. And in early 2018, the firm created a proxy voting team charged with incorporating ESG considerations in American Century Investments' proxy voting process. The firm plans to continue building out its ESG and investment stewardship team.
"We're committed to having a measurable, beneficial effect on society, while also striving to provide investors with competitive risk-adjusted investment returns over the long-term," Mascotto said. "At American Century, in addition to conducting our business with the highest ethical standards, we view our long-held responsible investment ownership model as the ultimate example of investing with impact."
American Century Investments is a leading global asset manager focused on delivering investment results and building long-term client relationships while supporting research that can improve human health and save lives. Founded in 1958, American Century Investments' 1,300 employees serve investment professionals, institutions, corporations and individual investors from offices in New York; London; Hong Kong; Sydney; Mountain View, Calif.; and Kansas City, Mo. Jonathan Thomas is president and chief executive officer, and Victor Zhang and David MacEwen serve as co-chief investment officers. Delivering investment results to clients enables American Century Investments to distribute over 40 percent of its dividends to the Stowers Institute for Medical Research, a 500-person, non-profit basic biomedical research organization. The Institute owns more than 40 percent of American Century Investments and has received dividend payments of $1.4 billion since 2000. For more information about American Century Investments, visit www.americancentury.com.
You should consider the fund's investment objectives, risks, charges and expenses carefully before you invest. Each fund's prospectus or summary prospectus, which can be obtained by visiting americancentury.com, contains this and other information about the fund, and should be read carefully before investing. Investments are subject to market risk.
1 US SIF: The Forum for Sustainable and Responsible Investment 2016 Report
2 American Century Investments Impact Investing Study, July 2018
A One Choice Target Date Portfolio's target date is the approximate year when investors plan to retire or start withdrawing their money. The principal value of the investment is not guaranteed at any time, including at the target date.
Each target-date One Choice Target Date Portfolio seeks the highest total return consistent with American Century Investments' proprietary asset mix. Over time, the asset mix and weightings are adjusted to be more conservative. In general, as the target year approaches, the portfolio's allocation becomes more conservative by decreasing the allocation to stocks and increasing the allocation to bonds and money market instruments.
By the time each fund reaches its target year, its target asset mix will become fixed and will match that of One Choice In Retirement Portfolio.
The underlying funds do not invest in securities issued by companies assigned the Global Industry Classification Standard (GICS) for the tobacco industry.
4 As of June 30, 2018, One Choice® Target Date Portfolio AUM is $23.3 billion
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