American Century Investments, a global asset manager that is partially owned by a medical research facility in Kansas City, Mo., is offering a new suite of investment options, the firm announced Tuesday.
The offering includes five equity strategies in exchange-traded funds and mutual funds. The new funds will be based on an academic-based framework that aims to identify securities with higher-than-expected returns, American Century said. The firm expects the new investment vehicles to launch later this year. The funds also will include separate account formats.
The new funds have been named Avantis Investors and will be available to financial advisors and institutional and individual investors.
To facilitate the new funds, American Century has hired Eduardo Repetto and Patrick Keating to develop the suite of diversified, tax-efficient and cost-effective investment solutions that will be based on a time-tested theoretical and empirical framework, the firm said.
Repetto previously served as co-chief executive officer and chief investment officer of Dimensional Fund Advisors. Keating also served in a variety of senior leadership roles at Dimensional Fund Advisors, including chief operating officer.
“Eduardo and Patrick have delivered incredible growth and success by creating, honing and managing strategies informed by academic research and sound financial theories,” Jonathan Thomas, American Century’s chief executive officer, said in a statement. “We plan to leverage their tremendous knowledge and expertise to build unique systematic investment processes at Avantis Investors that we believe will form a solid basis for long-term asset allocation solutions.”
“Pat and I look forward to collaborating with American Century Investments on this expanded array of investment capabilities,” Repetto said. “By establishing Avantis Investors, we will be offering a new set of strategies that utilizes the latest theory of investments and advancements in portfolio management processes.”
Victor Zhang, chief investment officer for American Century Investments, said in an interview with Financial Advisor the new offerings will be designed to give current investors new options, as well as attracting new investors to the platform.
“Clients are seeking active, systematic solutions that are highly diversified and can be offered through ETF and mutual funds,” Zhang added. The new offering “solves a lot of portfolio issues at the same time that it reduces costs.”
“American Century is an amazing structure. It is a private company so it can have a long range time focus—it is structured for perpetuity,” Repetto said in an interview with Financial Advisor.
American Century Investments is 40 percent owned by the Stowers Institute for Medical Research, a 500-person, non-profit biomedical research facility in Kansas City. The institute has received dividend payments of $1.5 billion since 2000 from American Century.