American Century Investments and Nomura Asset Management launch Emerging Markets Sustainable Impact Equity Fund
American Century Investments (ACI) and Nomura Asset Management (NAM) has launched the American Century Emerging Markets Sustainable Impact Equity Fund, a sub-fund of Nomura Funds Ireland Plc.
The new Dublin-based UCITS fund will actively invest in 70-75 companies that demonstrate accelerating growth, located primarily in emerging markets, while contributing to one or more of the United Nations Sustainable Development Goals (SDG). There are 17 goals, of which 15 are investible goals that sit alongside the firm’s investment process. The Sustainable Development Goals were adopted by all United Nations Member States in 2015 as a universal call to action to end poverty, protect the planet and ensure that all people enjoy peace and prosperity by 2030.
In addition to seeking long-term growth, the fund will seek to make a positive social and environmental impact in emerging markets and provide excess return above the MSCI Emerging Markets Index. Investing in emerging markets involves the risk of loss.
Impact investing using the SDG framework is especially crucial in emerging markets. These countries need greater investment in infrastructure, technological innovation and education than more developed markets. Living standards are among the lowest in the world and socioeconomic inequalities, including gender and income, can be significant. With some of the world’s most fragile ecosystems, emerging market countries are also more vulnerable to environmental damage as well as pandemics and rare regional diseases.
The emerging markets where the firms currently measure this impact include South America, China, Thailand, South Korea, Taiwan, Indonesia, India and South Africa.
The strategy will be managed by an experienced investment team led by American Century Investments’ Senior Portfolio Manager Patricia Ribeiro and Portfolio Manager Sherwin Soo. Ribeiro and Soo have worked together for more than eight years and are supported by a well-resourced team of five analysts. The investment team meets with more than 2,000 companies annually and manages US$4 billion as of 12/31/2019 in emerging markets assets. The new UCITS fund will follow the same investment philosophy and process that the emerging markets equity team utilizes in managing the American Century Emerging Markets strategy with the differentiator that it will have the ESG/SDG overlay.
The American Century Emerging Markets Sustainable Impact UCITS will be added as a sub-fund to the Nomura Funds Ireland plc platform, which currently has US$8.5 billion as of 12/31/2019 in assets under management.
Patricia Ribeiro, Senior Portfolio manager, says: “We believe an asset manager can offer both dedication to investment performance and an opportunity to make real change for good in emerging markets around the world.”
Peter Ball, Managing Director at NAM UK, says: “The Emerging Markets Sustainable Impact Equity Fund will be our second UCITs collaboration with our strategic partner ACI. Investors increasingly want their portfolios to provide financial security but to also address key global issues, both of which can be achieved through positive social and environmental impact without sacrificing investment returns.”
Jamie Downing, Global Head of Institutional Distribution at ACI, says: “Impact investing runs deep in our DNA. It all started when our late founder James Stowers, Jr. and his wife, Virginia, transferred their equity ownership stake in American Century to the endowment supporting the Stowers Institute for Medical Research, which has resulted in more than 40 percent of the global asset management firm’s annual dividends being directed toward medical research. Since 2000, more than $1.6 billion in dividends have been distributed to the Institute. We view our unique ownership model and the legacy of our founders as the ultimate example of investing with impact.”