Investment Led. Impact Driven.
Emerging Markets Sustainable Impact
Emerging Markets Sustainable Impact
At its essence, sustainability means ensuring prosperity and environmental protection without compromising the ability of future generations to meet their needs.
BAN KI-MOON
Former Secretary-General of the United Nations
Investment Led
Impact Driven
Developing economies have been a significant driver of global growth in recent years. At the same time, there is a growing desire to align values and interests with investing intended to make a societal impact.
The current combination of long-term growth trends and improving corporate practices provides investment opportunities in emerging markets that can also make an impact.
The Emerging Markets Sustainable Impact strategy seeks to provide attractive risk-adjusted returns by investing in accelerating growth companies that also seek to make a positive impact by contributing to the United Nation’s Sustainable Development Goals (SDGs).
$12T
MARKET OPPORTUNITIES
will open by achieving the Global Goals by 2030 — well over 50% will be in developing countries.
380M
New Jobs
will be created by achieving the Global Goals by 2030 — almost 90% of them in developing countries.
Source: Business & Sustainable Development Commission, Better Business, Better World, January 2017.
Pursuing the Global Goals could raise trillions in new market opportunities in ways that extend prosperity to all.
BUSINESS & SUSTAINABLE DEVELOPMENT COMMISSION
Better Business, Better World
Impact Investing—
It’s in Our DNA
With every investment decision, you make a choice for a better world. At American Century, impact goes beyond our investment strategies.
Our founder established and endowed the Stowers Institute for Medical Research, a world-class biomedical organization dedicated to uncovering the causes, treatments and prevention of genetically based diseases, like cancer. The Institute owns a controlling interest in American Century, and through this unique ownership structure, dividend payments ensure the ongoing support of important work that can improve human health and save lives.
>$1.8B
CORPORATE DIVIDENDS
have been distributed to our owner, the Stowers Institute for Medical Research, since 2000.
The Stowers Institute for Medical Research, Kansas City, Missouri.
Emerging Markets
Sustainable Impact
Investment Objective
Generate returns while achieving positive social and environmental impact by investing in companies that contribute to one or more of the United Nations Sustainable Development Goals (SDGs).
Corporate Impact
Through unique ownership structure, American Century directs 40% of profits in the form of dividends to support basic medical research that could lead to lifesaving cures.
At A Glance
| Inception Date | 1 May 2019 |
| Geography | Emerging Markets |
| Capitalization Size | Large Cap |
| Benchmark | MSCI Emerging Markets |
| Typical Holdings | 50 to 70 |
| Excess Return Market |
2% to 3% |
| Expected Tracking Error | 2% to 6% |
Corporations and investors are looking more for products that accomplish: positive alpha and investment in companies that will help the world tomorrow.
PATRICIA RIBEIRO
Senior Vice President, Senior Portfolio Manager
Repeatable
Investment Process
Since 1997, we have managed emerging market equities using a distinct growth philosophy and process. Now you can benefit from more than two decades of asset-class expertise within an impact framework.
Seeking Financial Returns and Societal Impact
The portfolio seeks to participate in the United Nations Sustainable Development Goals (SDGs) efforts by investing in firms we believe can generate positive impact and returns.
Differentiated Philosophy
Guided by a proprietary process which expands the investable universe, we look for companies with accelerating and sustainable growth characteristics while incorporating ESG integration.
Impact Thesis
Our goal is to ensure investments exhibit both a demonstrable financial business case and a quantifiable impact on society and/or the environment.
Portfolio managers and investment analysts are responsible for:
- Developing ideas and investment goals during the fundamental research stage, which maps potential holdings to SDGs
- Monitoring and engaging with companies to confirm exposure to SDG impact themes
FIRM START | 2006
INDUSTRY START | 1984
The Blueprint to Achieve a Better and More Sustainable Future for All
The U.N. Sustainable Development Goals seek to solve the world’s most pressing issues—many of which directly impact the emerging markets.1
By investing to advance the SDGs, asset owners and asset managers play a critical role in promoting prosperity, meeting social needs and protecting the environment.
SDG Alignment
All companies considered for the portfolio must map to one or more SDG. Investment analysts identify and verify a company’s SDG exposure through a range of resources:
Third-Party Tools and Company Engagement
Analysts use a variety of tools and may engage with companies directly to validate SDG exposure.
ESG and Investment Stewardship Team
Our integrated ESG team provides a proprietary ESG risk review to confirm that SDG exposure is aligned with corporate behavior (i.e., avoiding “SDG impact washing”).
Impact Rationale Thesis
Analysts’ proprietary research culminates in an Impact Thesis that explains current or projected SDG alignment in combination with the stock’s fundamental growth profile.
1 Developed by a global team of industry and government leaders and adopted by all 193 U.N. member states, the SDGs include 17 goals and 169 attendant targets aimed at solving some of the world’s most pressing problems by 2030. The goals include eradicating poverty, protecting environmental resources, and achieving gender and income equality.
Process Fully Integrates
SDG Considerations
1.
IDEA GENERATION
Identify companies exhibiting accelerating growth and improving fundamentals and contribute to the SDG goals
2.
FUNDAMENTAL ANALYSIS
Confirm acceleration is genuine and sustainable
Validate company’s SDG exposure
3.
PORTFOLIO CONSTRUCTION
Focus portfolio on best ideas
Monitor risk controls and guidelines, including SDG alignment and progress
4.
PORTFOLIO
Construct a portfolio of 50-70 securities
Each stock recommended for inclusion in the strategy must align with three criteria:
- Portfolio’s investment philosophy and process
- One or more SDG
- In-house, proprietary ESG risk assessment
The strategy will not invest in companies that are:
- In violation of the United Nations Global Compact principles
- On the exclusion list recommended by the Council on Ethics for the Norwegian Government Pension Fund Global
- Materially involved in the alcohol, gambling, adult entertainment and conventional and controversial weapons and industries
Measuring Impact
We measure and monitor SDG impact in the following ways:
- Annual report on the portfolio’s investment allocation per SDG goal and stock-per-stock assessment of impact achieved (or to be achieved)
- Engagement with management to confirm a company’s SDG alignment and progress toward SDG impact
1 Mexico
Advanced telecom with accessible prices
2 Colombia
Financial services in a sustainable manner
3 Peru
Financial services including banking and insurance
4 Brazil
High-quality education at scale
5 Brazil
Treated water and sewage services
6 South Africa
Retail banking with low costs and flexibility
7 China
Educational services and increased employment rates
8 China
Waste-to-energy operations
9 South Korea
R&D of high-quality consumer goods
10 India
Financial services for economically weak areas
11 Thailand
Credit services and personal loans
12 Taiwan
Leasing and financing for small-mid-sized enterprises
13 Indonesia
Home, persona care and food production
Companies for illustrative purposes only. May or may not be current holdings.
MARKETING MATERIAL / FOR PROFESSIONAL CLIENTS ONLY / NOT FOR PUBLIC USE
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When portfolio managers incorporate Environmental, Social and Governance (ESG) factors into an investment strategy, they consider those issues in conjunction with traditional financial analysis. When selecting investments, portfolio managers incorporate ESG factors into the portfolio's existing asset class, time horizon, and objectives. Therefore, ESG factors may limit the investment opportunities available, and the portfolio may perform differently than those that do not incorporate ESG factors. Portfolio managers have ultimate discretion in how ESG issues may impact a portfolio's holdings, and depending on their analysis, investment decisions may not be affected by ESG factors.
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No offer of any security is made hereby. This material is provided for informational purposes only and does not constitute a recommendation of any investment strategy or product described herein. This material is directed to professional/institutional clients only and should not be relied upon by retail investors or the public. The content of this document has not been reviewed by any regulatory authority.
This document does not constitute an offer or solicitation to invest. American Century Investment Management (UK) Limited may not be licensed in all jurisdictions, and unless otherwise indicated, no regulator or government authority has reviewed this document or the merits of the investment referenced herein. This document is provided on a privileged and confidential basis and, where required by local law, at the request of the recipient. This document (and the information contained herein) is for informational purposes only and is not to be reproduced, distributed or transmitted without the written consent of American Century Investment Management (UK) Limited. If you receive a copy of this document, you may not treat this as constituting a public offering and you should note that there may be restrictions or limitations to whom these materials may be made available. You should conduct appropriate checks to ensure that these materials are made available only to eligible recipients, pursuant to private placement exemptions, or are otherwise used in accordance with applicable law. If you wish to invest, it is your duty to inform yourself of, and to observe, all applicable laws and regulations of any relevant jurisdiction. In particular, you should inform yourself as to the legal requirements of so applying, and any applicable exchange control regulations and taxes in the countries of your respective citizenship, residence or domicile as well as any other requisite governmental or other consents or formalities which you might encounter which might be relevant to your purchase, holding or disposal of the investment. Past performance is no indication as to future performance and the value of any investment may fall as well as rise. Any investment is done at the investor’s own risk.
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American Century Investment Management (UK) Limited is registered in England and Wales. Registered number: 06520426. Registered office: 12 Henrietta Street, 4th Floor, London, WC2E 8LH.
American Century Investment Management (Asia Pacific), Limited currently holds Type 1 and Type 4 registrations from the Securities and Futures Commission (“SFC”). American Century Investment Management, Inc. is not registered with the SFC.