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November 14, 2017 - Kansas City, Mo.
Global asset management firm American Century Investments® today announced it has entered into an agreement with Precidian Investments LLC to license the firm's ActiveShares℠ methodology in support of the potential launch of actively-managed, semi-transparent exchange-traded funds (ETFs).
Subject to regulatory approvals, Precidian's patented ActiveShares℠ structure would allow American Century Investments to deliver its time-tested actively-managed investment strategies in an ETF vehicle without the daily holdings disclosure requirement of fully transparent ETFs. Precidian is seeking exemptive relief from the Securities and Exchange Commission (SEC) to allow for the use of ActiveShares℠ by asset managers.
"As we build out American Century's ETF product suite, our long-term plan is to leverage our established active-management capabilities to bring clients our investment strategies in an ETF format, which aligns with certain investors' preferences," said Edward Rosenberg, senior vice president and head of ETFs for American Century Investments. "While waiting for SEC approval of the ActiveShares℠ methodology, we are proceeding with plans to launch other transparent ETFs that are informed by decades of experience and apply our unique insights to solve common investment problems and help investors achieve their goals."
Since appointing Rosenberg to the firm's top ETF post back in June, American Century Investments has been laying the foundation for its entry into the ETF marketplace. In October, the firm filed registration statements for two transparent ETFs: an index-based value ETF and an actively-managed diversified corporate bond ETF. The firm anticipates a mid-January effective date for both funds, subject to SEC approval.
American Century Investments joins JP Morgan Asset Management, BlackRock, Capital Research, Legg Mason, ClearBridge, Royce and Nationwide in licensing Precidian's intellectual property. Precidian's ActiveShares℠ structure seeks to combine the most beneficial aspects and protections of the traditional mutual fund with the efficiencies and flexibilities of an ETF. The patented ETF structure seeks to provide asset managers with the ability to generate alpha without daily disclosure of their proprietary strategies while simultaneously creating significant improvements in tax efficiency, manager flexibility and lower operating costs.
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; Mountain View, Calif.; and Kansas City, Mo. Jonathan S. 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 nearly $1.3 billion since 2000. For more information about American Century Investments, visit www.americancentury.com.
This press release is for information purposes only and is not intended to constitute, and should not be construed as, an offer to sell securities. American Century may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective.
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