Strategy Inception
1993
Strategy AUM (USD)
$3.12 B
As of 02/28/2025
Overview
Quality Investment Focus
A portfolio of 70-100 large companies with attractive valuations and the potential to provide both downside protection and long-term outperformance.
Classic Bottom-Up, Active Process
We use a robust, bottom-up, fundamental research process to determine downside and fair-value potential for each security in our universe.
Seeking Risk-Aware Alpha
Our distinct, active investment approach seeks to deliver a strong risk-adjusted return profile with a focus on potential downside risks.
| Inception Date | 10/01/1993 |
| Total Assets | $3.12 B USD As of 02/28/2025 |
| Benchmark | Russell 1000 Value Index |
| Target Excess Return | 1% - 2% Over a standard market cycle |
| Target Tracking Error | 2% - 4% Over a standard market cycle |
| Target Number of Holdings | 70 - 100 |
Available Vehicles
U.S. and certain other countries
Institutional Separate Account, Collective Investment Trust, Variable Portfolio
Only in the U.S.
| Maximum Position Size | 20% - 35% Portfolio in top 10 holdings |
| Regional Exposure | <20% Non-U.S. securities |
| Sector Exposure | ±1000 bps Relative to the benchmark |
We seek superior businesses that exhibit high and sustainable returns on capital and low leverage as compared to the respective industry.
Philosophy
We believe investing in high-quality businesses selling at a discount to fair value will generate strong risk-adjusted returns over time. Downside management and low volatility are critical to producing long-term outperformance.
Key Investment Tenets
Increase exposure to high-quality and deselect low-quality companies to reduce value traps
Create robust risk/return profiles to improve probability of long-term outperformance
Rebalance security weights to control risk and generate alpha
Emphasize sustainable income as key component of total return
High-Quality Defined
We evaluate three important factors in analyzing companies to determine their level of quality:
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
High barriers to entry
Process
Robust, bottom-up, fundamental research determines a downside and fair value potential for each security.
Global Value Investing Approach
A critical analysis of important value investing attributes provides an in-depth view of our investing opportunity set.
✓ Quality Focus
Target companies with competitive advantages exhibited by high financial returns, balance sheet strength and franchise sustainability.
✓ Classic Value Investing
Invest in companies attractively priced relative to normalized fair value and a downside scenario.
Differentiated Risk-Adjusted Return Profile
Unique risk/return profile provides multiple client solutions.
Low Volatility & Downside Protection
Portfolio has offered lower volatility than the market and downside protection in market corrections.
Investment Process Snapshot
Through a continuous, multi-step 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 70-100 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.
Deselection of broken or impaired companies.
Fundamental Research and Valuation Assessment
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.
Monitor risk controls and portfolio guidelines.
This product also incorporates sustainability considerations. Discover our proprietary sustainability research platform.
Team
Portfolio Managers
Firm Start
1999
Industry Start
1993
Firm Start
1997
Industry Start
1992
Firm Start
1998
Industry Start
1991
Firm Start
2005
Industry Start
1998
| Assets Under Management | $3.12 B USD As of 02/28/2025 |
| Locations | Kansas City, MO - New York, NY - London, England |
Cross-Discipline Support
Client Portfolio Managers
Investment Analysts
Global Equity Trading
Sustainable Research Team
Takeaways
A portfolio seeking high-quality companies with the potential to provide long-term outperformance.
Robust fundamental research determines company downside and value.
Active management seeks to deliver strong risk-adjusted returns with a focus on downside risks.
Performance
Composite Performance in USD (%)
*Annualized
Data reflects past performance. Past performance does not guarantee future results. The value of investments may fluctuate. Data assumes reinvestment of dividends and capital gains.
Insights
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.
Sustainable Investing Definitions:
Integrated: An investment strategy that integrates sustainability-related factors aims to make investment decisions through the analysis of sustainability factors alongside other financial variables in an effort to make more informed investment decisions. A portfolio that incorporates sustainability factors may or may not outperform those investment strategies that do not incorporate sustainability factors. Portfolio managers have ultimate discretion in how sustainability factors may impact a portfolio’s holdings, and depending on their analysis, investment decisions may not be affected by sustainability factors.
Sustainability Focused: A sustainability-focused investment strategy seeks to invest, under normal market conditions, in securities that meet certain sustainability-related criteria or standards in an effort to promote sustainable characteristics, in addition to seeking superior, long-term, risk-adjusted returns. Alternatively, or in addition to traditional financial analysis, the investment strategy may filter its investment universe by excluding certain securities, industry, or sectors based on sustainability factors and/or business activities that do not meet specific values or norms. A sustainability focus may limit the investment opportunities available to a portfolio. Therefore, the portfolio may underperform or perform differently than other portfolios that do not have a sustainability investment focus. Sustainability-focused investment strategies include but are not limited to exclusionary, positive screening, best-in-class, improvers, thematic, and impact approaches.
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
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