Strategy Inception
2023
Strategy AUM (USD)
$2 M
As of 11/30/2024
We believe investing in high-quality businesses selling at a discount to fair value will generate strong risk-adjusted returns over time. Downside management, low volatility and sustainability are critical to producing long-term outperformance.
Key Investment Tenets
Increase exposure to high-quality companies and deselect low-quality companies to reduce value traps.
Create robust risk/return profiles to improve the probability of long-term outperformance.
Rebalance security weights to control risk and generate alpha.
Invest in companies expected to drive positive financial outcomes through a commitment to sustainability improvement.
High Quality Defined
We evaluate three important factors in analyzing companies to determine their level of quality:
Strong balance sheets and asset productivity.
Level of financial leverage.
Stability of franchises and competitive advantages.
Characteristics
Productive Assets
High, stable and sustainable returns on capital
Attractive free cash flow generation
Low Financial Leverage
Low balance sheet risk
Low levels of absolute and relative leverage
Franchise Sustainability
Sustainable competitive advantage
Sustainability Factors
High barriers to entry
Robust, bottom-up, fundamental research determines the downside and fair value for each security. Securities are further refined using a proprietary sustainability framework.
✓ Transitioning Companies
Our proprietary Improvement Pathway Framework enables us to identify companies committed to undergoing sustainability improvement and encourage progress.
✓ Quality Focus
Target companies with competitive advantages exhibited by high financial returns, balance sheet strength and franchise stability.
✓ Classic Value Investing
Invest in companies attractively priced relative to normalized fair value and a downside scenario.
Unique Capability
Offers multiple use cases within an equity allocation, including exposures to sustainability, quality and value.
Low Volatility & Downside Protection
Strives to offer lower volatility than the market and downside protection in market corrections.
Investment Process Overview
Through a continuous, multistep process, we monitor investment universe opportunities and risks and put equal emphasis on buy and sell decisions. Our process screens down a universe of approximately 5,000 securities to the most compelling 45-75 portfolio holdings.
Identification of Quality Companies
Identify companies that meet our definition of quality and have high, stable and sustainable returns on capital and lower degrees of leverage.
Deselect broken or impaired companies.
Improvement Pathway
Utilize key performance indicators to identify companies that meet our Improvement Pathway: sustainability committers, operational improvers, unrecognized leaders and sustainability enablers.
Fundamental Research and Valuation
Company analysis, risk/return profile and proprietary high-quality investment universe are monitored on an ongoing basis.
Portfolio Construction
Selection is driven by the best relative risk/return opportunities within our universe.
Position sizing is dynamic.
Risk controls and portfolio guidelines are monitored.
Transition Escalation Framework
Robust engagement plan. Companies are subject to our time-based transitioning engagement framework.
Improvement Pathway
Rationale for Security Inclusion
Sustainability Committers
Companies committed to actively enhancing the sustainability profile of their own or their customers' businesses through capital or operating investment.
Operational Improvers
Companies diligently addressing issues that are temporarily damaging their sustainability profiles.
Unrecognized Leaders
Companies that are sustainability leaders but do not receive proper credit for their leadership positions, often due to industry-specific overhang.
Sustainability Enablers
Companies whose products or services are indispensable to a sustainable economy, even if they are masked by the nature of their underlying business.
Learn more about our proprietary sustainability research platform.
Portfolio Managers
Firm Start
1998
Industry Start
1991
Firm Start
2014
Industry Start
2008
Firm Start
1999
Industry Start
1993
| Assets Under Management | $2 M USD As of 11/30/2024 |
| Location | Kansas City, MO - New York, NY |
Cross-Discipline Support
Client Portfolio Managers
Investment Analysts
Global Equity Trading
Sustainable Research Team
Global Analytics
Takeaways
Seeking high-quality companies with competitive advantages, strong balance sheets and a commitment to sustainability improvement.
Robust fundamental research determines company downside and value while incorporating qualitative and quantitative sustainability analysis.
Active management seeks to deliver strong risk-adjusted returns and downside protection.
Effective August 15, 2024, Global Sustainable Value was renamed Global Value Transition.
High-quality companies are typically those that exhibit high, stable and sustainable returns on capital, attractive free cash flow generation, low financial leverage, and franchise sustainability.
Many of American Century's investment strategies incorporate sustainability factors, using environmental, social, and/or governance (ESG) data, into their investment processes in addition to traditional financial analysis. However, when doing so, the portfolio managers may not consider sustainability-related factors with respect to every investment decision and, even when such factors are considered, they may conclude that other attributes of an investment outweigh sustainability factors when making decisions for the portfolio. The incorporation of sustainability factors may limit the investment opportunities available to a portfolio, and the portfolio may or may not outperform those investment strategies that do not incorporate sustainability factors. ESG data used by the portfolio managers often lacks standardization, consistency, and transparency, and for certain companies such data may not be available, complete, or accurate.
This is marketing material. This information is intended to be general in nature and is not personal financial product advice. Any advice contained here is general advice only and has been prepared without considering the investment objectives, financial situation or particular needs of any particular person. Before acting on any information, you should consider the appropriateness of the information provided and the nature of the relevant financial product having regard to your investment objectives, financial situation and needs. It is not intended to take the place of professional advice and you should not take action on specific issues in reliance on this information. American Century nor any of their related parties, their employees or directors, provide any warranty of accuracy or reliability in relation to such information or accept any liability to any person who relies on it.
Sources: MSCI Inc., FactSet
Source: MSCI. Morgan Stanley Capital International (MSCI) makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used to create indices or financial products. This report is not approved or produced by MSCI.