American Century Investments LIVESTRONG® Portfolios Receive an ‘A’ Grade in Study of Target Date Funds

Share Article

American Century Investments’ LIVESTRONG® Portfolios received an overall grade of “A” in a new report analyzing target date mutual funds and the asset management firms offering the popular investment options.

American Century Investments logo

We designed the funds with the goal of reducing volatility and improving risk-adjusted performance, which we believe are important considerations for plan sponsors and advisors when selecting a target date series. - Rich Weiss, senior portfolio manager

American Century Investments’ LIVESTRONG® Portfolios received an overall grade of “A” in a new report analyzing target date mutual funds and the asset management firms offering the popular investment options. Called “Popping the Hood V, 2012” and released by BrightScope and Target Date Analytics, this is the third study by the joint researchers in which LIVESTRONG was among the top grade earners. In both the 2007 and 2011 “Popping the Hood” analyses, American Century garnered the top overall score of all fund families.

BrightScope (http://www.brightscope.com) is a leading independent financial information and investment research firm, and Target Date Analytics (http://www.ontargetindex.com) is an independent provider of analysis, theory and benchmarking of target date funds. Their “Popping the Hood” series of reports are designed to help defined contribution plan sponsors with due diligence responsibilities when selecting and monitoring target date funds.

“We’re pleased that the researchers at BrightScope and Target Date Analytics have once again given our LIVESTRONG Portfolios an A grade,” said American Century Investments’ Rich Weiss, senior vice president and senior portfolio manager on the LIVESTRONG Portfolios team. “We designed the funds with the goal of reducing volatility and improving risk-adjusted performance, which we believe are important considerations for plan sponsors and advisors when selecting a target date series.”

The 2012 study assigns letter grades from A to F to target date mutual fund families based on five categories: company/organization, strategy, performance, risk and fees. Each fund series receives an overall grade, as well as grades on individual categories. Researchers analyzed 49 fund series offered by 41 different fund companies. Overall letter grades were assigned to 42 fund series old enough to have at least three years of operating performance data. The study used 2011 performance data for the lowest price share class offered by each fund family, typically the institutional share class.

LIVESTRONG Portfolios received an A overall grade and an A for “company/organization,” the researchers assessment of the quality of the organization behind the funds.

In its commentary about the LIVESTRONG Porfolios, BrightScope/Target Date Analytics wrote: “The American Century LIVESTRONG Portfolios continue to turn in top Overall results, earning another Overall ‘A’ this year. First introduced in 2004, this fund family now has seven years1 of return history.” The researchers also concluded: “The American Century LIVESTRONG Portfolios also scored at the top in our last two comprehensive studies, Popping the Hood III and IV, with data through December 31, 2007 and December 31, 2010 respectively. They have a very solid offering, and with so much going for them, it is easy to see how they have grown their assets under management to over $5 billion2. We think more plan sponsors and consultants should be giving American Century a look.”

A LIVESTRONG Portfolio’s target date is the approximate year when investors plan to start withdrawing their money. The principal value of the investment is not guaranteed at any time, including at the target date.

Each target-date LIVESTRONG portfolio seeks the highest total return consistent with its asset mix. Each year, the asset mix and weightings are adjusted to be more conservative. In general, as the target year approaches, the portfolio’s allocation becomes more conservative by decreasing the allocation to stocks and increasing the allocation to bonds and money market instruments. By the time each fund reaches its target year, its target asset mix will become fixed and will match that of LIVESTRONG Income Portfolio.

American Century Investments is a leading privately held investment management firm, committed to delivering superior investment performance and building long-term client relationships since 1958. Serving investment professionals, institutions, corporations and individual investors, American Century Investments offers a variety of actively managed investment disciplines through an array of products including mutual funds, institutional separate accounts, commingled trusts and sub-advisory accounts. The company's 1,300 employees serve clients from offices in New York; London; Hong Kong; Mountain View, Calif. and Kansas City, Mo. James E. Stowers Jr. is founder of the company, Jonathan S. Thomas is president and chief executive officer and Enrique Chang is chief investment officer. Through its ownership structure, more than 40 percent of American Century Investments' profits support research to help find cures for genetically-based diseases including cancer, diabetes and dementia.

1Not all LIVESTRONG Portfolios have seven years of performance history. 2 LIVESTRONG Portfolios assets under management were $5.7 billion as of June 30, 2012.

Study distributed with permission for American Century Investments by Target Date Analytics, LLC and BrightScope, Inc. Reprinted format may be different from original publication. To inquire about receiving a copy of the complete study, email poppingthehood@brightscope.com or call 858 677-0241.

You should consider the fund’s investment objectives, risks, and charges and expenses carefully before you invest. The fund’s prospectus or summary prospectus, which can be obtained at americancentury.com, contains this and other information about the fund, and should be read carefully before investing.

Past performance is no guarantee of future results. Investment return and fund share value will fluctuate and it is possible to lose money by investing in these funds.

The BrightScope and Target Date Analytics “Popping the Hood V, 2012” study grades target date mutual fund families on five criteria, including performance, fees, risk, organizational structure and strategy. The Overall Score for each fund family is simply the product of the scores of the five major components, weighted as follows: Company/Organization: 10%; Strategy: 15%; Performance: 30%; Risk: 25%; Fees: 20%. Each fund series receives an overall score and ranking. Researchers analyzed 49 fund companies, but ranked only 42; those were the fund series old enough to have three years of operating performance data. The study uses 2011 performance data. The study is based on the lowest price share class offered by each fund family, typically the institutional share class. The investor class, A, C, and R share classes are subject to higher expenses. Please consult the prospectus for the eligibility for each specific share class.

The performance of the portfolios is dependent on the performance of their underlying American Century Investments funds and will assume the risks associated with these funds. The risks will vary according to each portfolio’s asset allocation, and a fund with a later target date is expected to be more volatile than one with an earlier target date.

Support LIVESTRONG - The management company of American Century will financially support LIVESTRONG, and investors in LIVESTRONG Portfolios can influence that support. Every dollar invested in LIVESTRONG Portfolios will help determine the amount the management company of American Century will pay LIVESTRONG above a guaranteed amount.

American Century Investment Services, Inc., Distributor, has entered into an agreement with the Lance Armstrong Foundation for rights to use the LIVESTRONG name. Under this agreement, every dollar invested in LIVESTRONG Portfolios through 2016 will help determine the amount the management company of American Century Investments will pay the Lance Armstrong Foundation above a guaranteed amount. Under limited circumstances, the agreement can be terminated by either party, and there will be no future payments.

American Century Investment Services, Inc., Distributor
©2012 American Century Proprietary Holdings, Inc.

Share article on social media or email:

View article via:

Pdf Print

Contact Author

Laura Kouri

American Century Investments Media Line

816-340-7033
Visit website