Even These Mutual Funds Don’t Want Lance Armstrong’s Name
Since 2006, American Century — a Kansas City-based investment firm — has been associated with Lance Armstrong’s Livestrong Foundation and contributed more than $8 million towards cancer research, but following the Tour de France-cycler’s legal troubles, the company decided to drop the name Livestrong from its successful target-date funds effective May 31.
When he admitted last January to using performance-enhancing drugs during his years as a champion bicyclist, Armstrong severely tarnished the Livestrong name, offsetting the reputation he earned as a cancer survivor and athlete. Since the U.S. Anti-Doping Agency made claims that he used steroids, blood boosters and other illegal performance-enhancing drugs and measures to win, Armstrong has seen his endorsement deals vanish, and it follows that American Century would want to rename its funds. However, the company has said the moves was a means of consolidating and simplifying its retirement offerings under the brand name One Choice, which it was already using for its target-risk funds.
In reality, the name change is not much of an issue for consumers, unless they they bought the funds because of the name Livestrong. While branding is important — even for mutual funds — as the name represents the management firm, the name has no relation to the assets in the fund in this case and so the name change hardly matters. If a fund states that it invests in a particular type of asset class, like technology or financial-services companies, than it must keep 80 percent of its assets in the kind of securities for which it was named. However if the name has no specific connotation, like Livestrong, than it can invest in any assets that the prospectus allows.
A name is immaterial to the performance of a fund, and Livestrong funds have been strong performers, among the best in their respective categories since they were begun, according to Morningstar. Lance Armstrong and Livestrong did not make the funds successful, rather sound structure and savvy management were responsible for the solid performance.
American Century has already undergone one name change. In the 1990s, the firm was known as Twentieth Century, but it re-branded itself in order to reflect the changing times. That change had zero impact on its funds, and likely little will happen when the Livestrong funds change names. While the name may have attracted investors who were interested in the cancer-support identity of the funds, cancer research is a fundamental tenet of American Century at a corporate level and the nature of the fund will remain the same. In fact, the company is owned in part by the Stowers Institute for Medical Research, which focuses on fighting cancer and other gene-based diseases.
Company founder James E. Stowers Jr. and his wife Virginia — who are cancer survivors — started the institute with money generated by American Century, and the firm gives more than 40 percent of its profits to the institute, which amount to approximately $1 billion. American Century spokesman Chris Doyle told MarketWatch that the firm “will continue to look for opportunities to support Livestrong,” but added that the fund’s name implied a focus that “did not tell the full story of [American Century’s] more expansive approach to the cause.”
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