“Collective investment trusts are critical to the defined contribution (DC) business because they give plan sponsors and their consultants more flexibility in building investment lineups for their employees,” said Rick Luchinsky, senior vice president.
KANSAS CITY, Mo. (PRWEB) February 20, 2014
To better serve defined contribution clients, American Century Investments recently launched a collective investment trust (CIT) that incorporates its popular One Choice Target Date Portfolios. The firm also announced that Kansas City-based Lockton Companies will be the first client to use the CITs as the qualified default investment alternative (QDIA) for its defined contribution plan, a $257 million mandate.
American Century, which began offering CITs in 2009, launched the new target-date CIT in order to meet client demand, according to Rick Luchinsky, senior vice president and head of the firm’s defined contribution investment-only (DCIO) business.
“Collective investment trusts are critical to the defined contribution (DC) business because they give plan sponsors and their consultants more flexibility in building investment lineups for their employees,” said Luchinsky. “One Choice Portfolios are the single most popular investment strategy that American Century offers to DC plans. In fact, our target-date portfolios consistently have been ranked among the top target-date fund providers recognized in the BrightScope and Target Date Analytics Popping the Hood study, which we believe underscores the effectiveness of our approach across a variety of market environments over multiple years. Clients asked us to create a CIT using our target-date strategy; this is the result.”
Lockton is pleased to be the first client to use the new CIT, according to Thomas Clark, president of Lockton Investment Advisors, LLC, and leader of Lockton’s retirement services practice. “After a lengthy due diligence process, we concluded that the investment philosophy and process of American Century’s One Choice Portfolios, combined with the pricing advantages of the CIT, were an excellent fit for our retirement plan.”
“As part of the search, we looked very closely at our Associate demographics, added Glenn Spencer, chief operating officer at Lockton. “We believed a reenrollment would be a good strategy to help ensure our Associates were taking full advantage of our retirement plan.” Lockton is a global risk management and employee benefits consulting firm with more than 5,000 Associates worldwide.
A One Choice Target Date Portfolio's target date is the approximate year when investors plan to retire. The principal value of the investment is not guaranteed at any time, including at the target date.
Each One Choice Target Date Portfolio seeks the highest total return consistent with its asset mix. Over time, 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.
Also known as commingled or collective funds, collective investment trusts are tax-exempt, pooled investment vehicles designed exclusively for qualified plans, including 401(k) plans, as well as for certain types of government plans. CITs are subject to banking regulations, rather than the Investment Company Act of 1940, which regulates mutual funds.
American Century‘s DCIO assets under management total $35 billion as of December 31, 2013.
For more information about collective investment trusts, call American Century Investments at 800-345-6488 or visit http://www.americancentury.com/ipro.
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 and Jonathan S. Thomas is president and chief executive 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. For more information, visit http://www.americancentury.com.
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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 VI, 2013” 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 48 fund companies, but ranked only 43; those were the fund series old enough to have three years of operating performance data. The study uses 2012 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 study is conducted on an annual basis and a new study will be available in June 2014.
The performance of the One ChoiceSM Target Date Portfolio 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.
A One ChoiceSM Target Date Portfolio’s target date is the approximate year when investors plan to retire or start withdrawing their money. The principal value of the investment is not guaranteed at any time, including at the target date. By the time each fund reaches its target year, its target asset mix will become fixed and will match that of One ChoiceSM In Retirement Portfolio.
American Century Investment Services, Inc., Distributor
©2014 American Century Proprietary Holdings, Inc.