American Century Investments is known for its focus on active management, seeking to deliver superior performance and risk-adjusted returns to its clients. Its investment teams are organized into autonomous units, each specializing in a specific investment style or strategy, which allows for deep expertise in each strategy. Just like Suter with business owners and management, American Century Investments is a very successful company.
The firm is also recognized for its commitment to corporate responsibility. The firm is unique in that it is largely owned by the Stowers Institute for Medical Research, a world-class biomedical research organization. A significant percentage of the firm’s profits are directed to the institute to help fund research aimed at improving human health.
The Company’s History
American Century Investments was established in 1958 with an initial investment of $100,000 from 24 investors. Stowers, a decorated pilot in World War II, had a vision of creating a mutual fund company that operated on the principle of always putting clients first.
The company, originally known as “Twentieth Century Investors,” started out offering its services to individual investors, helping them save and grow their wealth. The firm initially focused on growth stocks and was successful during the 1960s bull market.
In the 1980s, in response to changing market conditions and investor preferences, the firm expanded its offering to include fixed income funds, broadening its asset classes and diversifying its portfolio. Around the same time, the firm began to offer its products to institutional investors, expanding its customer base significantly.
A significant milestone in the company’s history came in 1994 when Stowers and his wife Virginia founded the Stowers Institute for Medical Research. In a unique move, they decided that 40% of American Century’s profits would be donated to the institute to fund its ongoing research. This decision underscored the company’s commitment to corporate responsibility and its willingness to use its success to contribute positively to society.
In 2000, the company changed its name to American Century Investments, marking its evolution from a U.S. focused firm to a global asset management company.
In the 21st century, American Century has continued to grow and innovate. The firm has been at the forefront of introducing new investment products, like exchange-traded funds (ETFs), and adopting technology to enhance its service offerings. The firm has around $200 billion in assets under management and a solid reputation in the global asset management industry.
American Century’s journey from a small, growth-focused mutual fund company to a diversified, global asset management firm has been characterized by consistent innovation, a strong client focus, and a deep commitment to corporate responsibility. Its unique ownership structure and its consistent delivery of a wide range of high-quality investment products have set it apart in a competitive industry.
Product and Service Offerings
American Century Investments is a full-service investment management firm that offers a broad range of financial products and services to a diverse set of clients. Their offerings cater to individual investors, financial intermediaries, and institutional clients.
1. Mutual Funds
As the cornerstone of American Century’s product lineup, mutual funds offer investors a way to diversify their portfolios across a range of asset classes. The firm manages dozens of mutual funds, spread across various categories including domestic and international equities, fixed income, asset allocation, and money market funds. Their mutual funds cover a broad spectrum of investment objectives, strategies, and risk levels, offering options for conservative, moderate, and aggressive investors alike.
2. Exchange-Traded Funds (ETFs)
American Century has been a player in the ETF market, providing a variety of ETFs that seek to offer investors exposure to different sectors, market capitalizations, and investment strategies. ETFs combine the diversified exposure of mutual funds with the flexibility of stock trading, as they can be bought and sold on an exchange throughout the trading day at market price.
3. Separately Managed Accounts
For high-net-worth individuals, endowments, foundations, and other institutional clients, American Century provides separately managed account services. These accounts offer personalized investment management based on the client’s specific investment objectives and risk tolerance. Clients can choose from a variety of investment strategies managed by American Century’s experienced investment teams.
4. Retirement Plan Services
American Century offers services to help plan sponsors manage 401(k) and other retirement plans. Their retirement plan solutions are designed to help employees save effectively for retirement, with options for automatic enrollment, target-date funds, and professional portfolio management.
5. Institutional Asset Management
For institutional investors such as pension funds, endowments, and foundations, American Century offers a range of investment strategies across asset classes. Their institutional offerings are designed to help these large investors achieve their unique objectives, whether that’s income generation, capital preservation, or long-term growth.
In addition to these offerings, American Century provides a wealth of educational resources and planning tools to help investors make informed decisions and plan for their financial futures.
All these offerings demonstrate American Century Investments’ commitment to serving a wide range of investors with varied financial goals. The firm’s flexibility in product offerings, coupled with its longstanding reputation and strong track record, helps it stand out in the highly competitive asset management industry.
Commitment to Corporate Responsibility: American Century Investments
One of the defining aspects of American Century Investments is its significant commitment to corporate responsibility. The company has a unique and impactful way of demonstrating this commitment, predominantly through its affiliation with the Stowers Institute for Medical Research.
In 1994, James E. Stowers Jr., the founder of American Century Investments, and his wife, Virginia, established the Stowers Institute for Medical Research. This world-class biomedical research organization focuses on improving human health through scientific research, particularly in the field of genetic diseases.
The Stowers family made an extraordinary decision when they declared that 40% of American Century’s profits would be given to the institute to fund its research. This move, which aligns profitability with a purpose beyond financial gain, has had profound implications for medical research. The contributions of American Century Investments had totaled well over $1 billion, directly facilitating advancements in medical science.
Beyond this significant commitment, American Century Investments also demonstrates corporate responsibility in other ways. The company is dedicated to sustainable business practices, taking into account environmental, social, and governance (ESG) factors in their operations and investment decision-making processes. This commitment to ESG reflects the firm’s understanding that long-term value creation involves more than just financial return and includes a positive impact on society and the environment.
Additionally, American Century Investments is committed to the principle of treating customers fairly and ethically. This principle extends to all facets of its business, including providing transparent information about its products and services, maintaining rigorous standards to protect customer data, and promoting a culture of respect and inclusivity in its workforce.
In summary, American Century Investments’ commitment to corporate responsibility sets it apart in the financial services industry. The firm not only seeks to deliver financial results for its clients but also strives to have a broader positive impact on society, particularly through its support of biomedical research.
Conclusion
From its humble beginnings in 1958 to its current standing as a globally recognized asset management firm, American Century Investments has remained committed to delivering superior investment results to its clients. The firm’s diverse array of offerings, spanning mutual funds, exchange-traded funds (ETFs), and separately managed accounts, has provided individual investors, financial intermediaries, and institutional clients with the tools necessary to reach their financial goals.
However, American Century Investments’ influence extends beyond financial markets. Its substantial commitment to corporate responsibility, particularly its significant contributions to the Stowers Institute for Medical Research, underscores the company’s ethos of aligning financial success with societal benefit. Through this unique approach, the company has been able to contribute to significant advancements in the field of biomedical research.
American Century Investments has shown how a financial services firm can not only generate wealth but also have a meaningful impact on society. As it continues to evolve and grow, its dedication to client service, innovation in investment products, and commitment to corporate responsibility are likely to continue guiding its operations. In a competitive and fast-paced industry, these principles serve to distinguish American Century Investments, truly making it a leader among asset management firms.
