Submitted by American Century Investments
Emblematic of the growing popularity of investment solutions that consider environmental, social and governance (ESG) factors, the new Nomura ACI Advanced Medical Impact Fund has attracted more than US$1 billion1 from Japanese investors since the fund’s October 23 launch. A collaboration between American Century Investments and Nomura Asset Management and exclusively available to Japanese investors, the new fund primarily focuses on stocks of U.S. health care companies exhibiting sustainable and accelerating earnings growth and profitability. Furthermore, the portfolio is constructed to align with the United Nations’ Sustainable Development Goal 3 (SDG-3) to “ensure healthy lives and promote well-being for all at all ages."
“We are entering a golden age of innovation by U.S. health care companies, resulting in new treatments for cancer and other gene-based diseases,” said Michael Li, Ph.D. vice president and portfolio manager for American Century, subadvisor for the new fund. “Powerful new diagnostics and data analytics allow for more efficient research, diagnosis and potentially better outcomes, while advancements in medical devices are creating more effective treatment options for patients. The Nomura ACI Advanced Medical Impact Fund invests in important health care innovations that we believe will have a positive impact on society.”
Li and co-portfolio manager Henry He use a proprietary multi-factor model to rank health care stocks based on fundamental acceleration, earnings quality, relative strength and valuation. Next, the team conducts deep fundamental research to identify and confirm the drivers of acceleration, the sustainability of growth and profitability and integration of ESG opportunities and risks. The team constructs a concentrated portfolio with between 30 and 50 securities. Each stock in the portfolio must be tied to one of the following impact themes that correspond to the United Nations’ SDG-3 goal:
New or innovative treatments for diseases, as well as mental and neurological disorders
Access to medicine and health care services in developed and emerging markets
New solutions that lead to lowering the cost of health care
More productive and efficient equipment, services and software used for research, diagnostic testing, environmental monitoring and development of new therapies
The new fund leverages both Li and He’s deep health care experience. Before joining American Century in 2002, Li was a scientist/project manager at the Pharmaceutical Research Institute of Bristol-Myers Squibb Co., managing cross-functional teams in filing investigative new drug applications to the Food and Drug Administration and supporting researchers from drug discovery to development. While pursuing his doctorate, Li published research articles about life-sciences tool development for the purpose of sequencing and detecting mutant proteins and genes.
Li has a bachelor’s degree in materials science and engineering from the University of Science and Technology of China, a master’s degree in business administration from The Wharton School of the University of Pennsylvania, and a Ph.D. in chemistry from the University of Michigan.
Co-manager Henry He joined American Century in 2011 after serving as a senior equity research analyst and portfolio manager at BNP Paribas Investment Partners, where he covered the health care sector and managed the firm’s global health care and biotech funds. Previously, he was a research analyst at Bank of New York, where he also covered the health care sector. He earned a bachelor’s degree in economics from Harvard University and is a CFA® charterholder and a member of the CFA Institute.
American Century’s 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 Date2 Portfolios. The popular target date portfolios, which are often used in defined contribution plans, have total assets of approximately $23 billion3.
In 2014, American Century’s global and non-U.S. equity portfolio management teams began formally integrating MSCI ESG ratings4 and analysis into their investment strategies. In 2016, the company modified an existing portfolio to incorporate ESG considerations into the investment process and relaunched it as the U.S. Sustainable Large Cap Core strategy (Sustainable Equity Fund - AFDIX). American Century also has extensive experience managing separate accounts in accordance with client preferences ranging from negative screening to best-in-class tilting to thematic investing in relation to all of the firm’s investment disciplines.
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’s analysts and portfolio managers assess ESG risks and opportunities through their active investment process, including that of the Nomura ACI Advanced Medical Impact Fund. And in 2018, the firm became 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.
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 financial professionals, institutions, corporations and individual investors from offices in New York; London; Hong Kong; Sydney; Mountain View, Calif.; and Kansas City, Mo. Jonathan S. Thomas is president and chief executive officer, and Victor Zhang serves as chief investment officer.
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.
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You should consider the fund’s investment objectives, risks, charges and expenses carefully before you invest. The 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. Past performance is no guarantee of future results.
1As of December 3, 2018 the Nomura ACI Advanced Medical Impact Fund AUM is US$1.03 billion.
2One 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’s 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.
3As of December 3, 2018, One Choice® Target Date Portfolio AUM is $22.3 billion.
4MSCI ESG ratings are designed to help investors to understand environment, social and governance (ESG) risks and opportunities associated with ownership of certain securities and integrate these factors into their portfolio construction and management process. MSCI research analysts assesses thousands of data points across 37 ESG key issues, focusing on the intersection between a company’s core business and the industry issues that can create significant risks and opportunities for the company. Companies are rated on a AAA-CCC scale relative to the standards and performance of their industry peers. For more details about MSCI’s ESG ratings methodology visit www.msci.com.
Nomura ACI Advanced Medical Impact Fund is only available to investors in Japan. The fund is not available to investors in the United States.
American Century Investment Services, Inc., Distributor
©2018 American Century Proprietary Holdings, Inc.
American Century Investments® is a global asset manager focused on delivering investment results and building long-term client relationships while supporting research that can improve health and save lives. It’s how we and our clients together Prosper With Purpose.™
Every day people are increasingly focused on investing to make the world a better place for themselves, their families, their organizations and the world at large. It is possible to live a more meaningful and impactful life and give back something that’s more valuable than money. When you invest with us, you can also invest in the future of others and have the potential to impact the lives of millions. That’s possible because of the distinct relationship with the Stowers Institute for Medical Research, which owns more than 40% of American Century Investments. Our dividend payments provide ongoing financial support for the Institute’s work of uncovering the causes, treatments and prevention of life-threatening diseases, like cancer. With responsible investing firmly rooted in our DNA, American Century’s focus on ESG (Environment, Social, and Governance) factors is integral to our corporate citizenship and business model.
Together we can become a powerful force for good... it’s like nothing you’ve seen before from an investment management firm.
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