Active ETF for High Yield Bonds Launches
Global investment managers American Century Investments and Nomura Asset Management announced the launch of a new exchange traded fund (ETF): American Century® Select High Yield (AHYB). The new transparent active ETF will be listed on the New York Stock Exchange (NYSE Arca, Inc.).
The new ETF will be subadvised by Nomura Corporate Research and Asset Management (NCRAM) and will have the same investment philosophy as the seven-year old American Century® High Income mutual fund, while focusing on BB and B rated high yield bonds. AHYB seeks to provide high current income and offers an opportunity to access a high yield strategy with strong potential risk-adjusted returns. The fund has an expense ratio of 0.45 percent and will disclose its holdings daily.
"In the current environment where investors are looking for robust yield, we are excited to now offer our high yield product as an ETF with our strategic partners at Nomura, said Ed Rosenberg, head of ETFs for the firm. "We feel this is a way we can continue striving to meet client demand for high income in this low yield environment."
The ETF will be managed by an experienced investment team led by NCRAM Chief Executive Officer and Chief Investment Officer David Crall. Crall joined NCRAM in 1992. "We are thrilled to provide another fixed income solution to help meet client demand," said Crall. "This product will give us an opportunity to invest in relatively higher credit quality high yield bond where the team believes there tend to be fewer defaults, lower volatility, and improved liquidity."
The fund will be managed by NCRAM Portfolio Managers Amy Yu Chang, Stephen Kotsen, Derek Leung and American Century Investments' Portfolio Manager Rene Casis. Chang joined NCRAM in 1999 and has been a portfolio manager since 2007. Kotsen joined NCRAM in 1998 and has been a portfolio manager since 2000. Leung joined the firm in 1998 and been a portfolio manager since 2019. Casis joined American Century Investments in 2018 and began in the investment industry in 1999.
American Century Investments has been one of the fastest-growing new entrants into the ETF space, according to Rosenberg. "In fact, in the last three years American Century Investments (American Century Investments and Avantis Investors ) have launched 28 ETFs. Our initial offerings were American Century® STOXX® U.S. Quality Value (VALQ), American Century® Diversified Corporate Bond (KORP), and American Century® Quality Diversified International ETF (QINT)," he said. (STOXX® is a registered trademark of STOXX, Ltd.)
Nomura Asset Management is a leading global investment manager. Headquartered in Tokyo, Nomura Asset Management has additional investment offices throughout the world including London, Singapore, Malaysia, Hong Kong, Shanghai, Taipei, Frankfurt and New York. With a global workforce of over 1,400 employees, Nomura Asset Management provides its clients with a wide range of innovative investment strategies including global, regional and single country equities, high yield bonds, alternative investments and global fixed income strategies.
Nomura Corporate Research and Asset Management Inc. (NCRAM) has been Nomura's below-investment-grade credit boutique since its founding in 1991. NCRAM specializes in managing US and global high yield bond strategies and has applied its time-tested investment philosophy to high yield investing for more than 30 years.
About American Century Investments
Who We Are
American Century Investments is a leading global asset manager focused on delivering investment results and building long-term client relationships while supporting breakthrough medical research.
Quick Facts
Founded in 1958, American Century Investments' 1,400 employees serve financial professionals, institutions, corporations and individual investors from offices in Kansas City, Missouri; New York; Los Angeles; Santa Clara, California; Portland, Oregon; London; Frankfurt, Germany; Hong Kong; and Sydney.
Management
Jonathan S. Thomas is president and chief executive officer, and Victor Zhang serves as chief investment officer.
Giving Back
Delivering investment results to clients enables American Century Investments to distribute over 40% of its dividends to the Stowers Institute for Medical Research, a 500-person, nonprofit basic biomedical research organization. The Institute owns more than 40% of American Century Investments and has received dividend payments of more than $2 billion since 2000.
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Credit quality ratings on underlying securities of a fund are obtained from three Nationally Recognized Statistical Rating Organizations ("NRSROs"), Standard & Poor's, Moody's and Fitch. Ratings are converted to the equivalent Standard & Poor's rating category for purposes of presentation. For municipal funds, each security is assigned the highest rating provided by the NRSROs. A "non-rated" designation is assigned when a public rating is not available for a security. This designation does not necessarily indicate low credit quality. The letter ratings are provided to indicate the credit worthiness of the underlying bonds in the portfolio. Long-term ratings generally range from AAA (highest) to D (lowest). Includes payable amounts related to securities purchased but not settled at period end. Due to rounding, these values may exceed 100%.
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