Highlights:
- New UCITS focused on innovative health care companies creating positive social impact - Doing well while doing good
- Experienced investment team with extensive industry credentials (former pharmaceutical research scientist)
- Additional positive social impact through the firm’s unique ownership structure, American Century has directed 40 percent of profits in the form of dividends to support medical research
- The team’s health care strategy has currently attracted more than $1.6 billion assets under management since its inception in 2018
American Century Investments and Nomura Asset Management continue to offer investment solutions that integrate environmental, social and governance (ESG) factors. The American Century Advanced Medical Impact UCITS, a sub-fund of Nomura Funds Ireland Plc, is now available to investors in Europe.1
Created in collaboration with Nomura Asset Management, the new Dublin-based UCITS will actively invest in 30-50 innovative global health care companies positioned for sustained above-average growth. Further, as the companies attain their fundamental objectives, they also have opportunities to create meaningful social impact through addressing large unmet medical needs.
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."
The strategy will be managed by an experienced investment team led by American Century Investments’ Portfolio Manager Michael Li, and Co-Portfolio Manager Henry He.
Michael Li, Ph.D. Vice President and Portfolio Manager for American Century, said: “The global pandemic has underscored the need for quality health care. There are approximately 600 million people worldwide age 65 years and over, so there’s a rising demand for health care services, as well as increasing wealth levels in developing countries such as China and India in particular, to access quality care. This will place significant stress on health care systems, so we need to invest in infrastructure and capacity. However, innovations leading to new treatments and improvement in access, cost, and productivity will be a primary means to address the issue. The new UCITS invests in important health care innovations that we believe will have a positive impact on society.”
Peter Ball, Managing Director and Head of EMEA Distribution at Nomura Asset Management, commented: “The Advanced Medical Impact Fund will be our latest UCITs collaboration with our strategic partner American Century. Although the uncertain outlook and spiking volatility has challenged financial markets, the current environment strengthens the case for active management through the managers’ ability to identify potential winners in the coronavirus crisis and mitigate downside risk.”
Li and co-portfolio manager He use a proprietary multi-factor model and other sources such as medical conferences to identify investment candidates from a global health care universe. Next, the team conducts deep fundamental research to identify and confirm the drivers of improving growth, its sustainability, and future profitability trends while evaluating ESG risks. Proprietary financial models of companies are developed to determine the intrinsic value and provide unique insights. The team then constructs the concentrated portfolio with between 30 and 50 securities. Each stock in the portfolio must be tied to at least one of the following impact themes which 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, and development of new therapies
American Century’s commitment to 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 more than $1.7 billion.
