American Century Investments is continuing to build out its liquid alternative capabilities. Last July, the firm launched the Perella Weinberg-subadvised AC Alternatives Income Fund (MUTF:ALNNX); and on May 25, it debuted the AC Alternatives Long Short Fund (MUTF:ALEVX), also subadvised by Perella Weinberg. American Century’s entire suite of alternative mutual funds now totals four, including the AC Alternatives Market Neutral Value (MUTF:ACVVX) and the AC Alternatives Equity Market Neutral (MUTF:ALHIX) funds.
AC Alternatives’ New Fund
The AC Alternatives Long Short Fund uses an open architecture subadvisor approach with additional subadvisors chosen by Perella Weinberg in order to access experienced, specialized managers that employ differentiated approaches to long/short equity investing. As of the fund’s launch, additional subadvisors include:
- Passport Capital
- Sirios Capital Management
- Three Bridges Capital
- CMIA Seligman
Perella Weinberg supplements the other subadvisors’ strategies with its own tactical and opportunistic portfolio adjustments in an attempt to either reduce risk or increase exposure to asset classes expected to benefit from current market conditions.
“The addition of AC Alternatives Long Short to our suite of liquid alternatives solutions reflects our commitment to meeting the evolving needs of our clients,” said Cleo Chang, senior vice president and head of alternative investments for American Century, in a recent statement. “We believe long/short strategies can play an important role in a diversified portfolio by providing the potential for more consistent returns over a full market cycle, while striving to reduce volatility.”
Shares of the new fund are available in six classes: Investor (MUTF:ALEVX), Institutional (MUTF:ALEJX), A (MUTF:ALEQX), C (MUTF:ALEHX), R (MUTF:ALEWX) and R6 (MUTF:ALEDX). The management fee for all share classes, except the R6 share class, is 2.40%. The R6 share class management fee is 2.05%. The share classes have respective total operating expenses of 3.33%, 3.13%, 3.58%, 4.33%, 3.83%, and 2.98%.
The minimum initial investment for most share classes is $2,500. Institutional and R6 shares are exceptional: Institutional shares have a $5 million initial minimum, or $3 million for endowments and foundations; while R6 shares have no minimums for qualifying buyers.
For more information, read the fund’s prospectus.
AC Alternatives’ Other Funds
The investor-class shares of the AC Alternatives Income Fund returned -2.70% from the fund’s inception on July 31, 2015 through May 30, 2016. Although the returns were negative, they did outpace Morningstar’s multialternative category average of -3.79% over the same period.
AC Alternatives’ Market Neutral Value and Equity Market Neutral funds launched on Halloween 2011 and May 30, 2006, respectively. Through May 30, 2016, the funds had respective three-year returns of +3.89% and +1.32%, and respective one-year returns of +4.10% and -0.89%.
The AC Alternatives Equity Market Neutral Fund is the rare liquid alternative with a 10+ year track record. Its annualized 10-year returns through May 30 stood at +0.87%, while its five-year annualized returns were +1.84%.
For more information, visit AmericanCentury.com.
Past performance does not necessarily predict future results.