Time to Dump American Century?

I have been investing with American Century Equity Income Fund (TWEIX) for quite some time. First I had it in my taxable account, then added to my wife’s Roth IRA. But now it seems the time will soon come to dump it completely.

Morningstar reported that the fund company is planning to shake up its fund lineup and place many funds into the load fund category. The reason for the move is “to replace a complicated and confusing share class structure with a straightforward one that individuals and advisors can better understand.” Yeah, I can better understand the fee now.

According to Morningstar:

The changes, should they be approved by fund shareholders, will result in an increase in the load fund lineup from 26 funds to 39 total, including some prominent options. For instance, in the large-cap space, American Century Equity Income (TWEIX), American Century Equity Growth (BEQGX), and American Century Ultra (TWCUX), some of the firm’s better-known funds, will all transition from the no-load Investor share classes to the load lineup, and will be primarily targeted toward fee-based advisors and retirement plans.

Several bond funds currently have no-load will also be affected by the change, including American Century Inflation-Protection Bond (APOIX), American Century High-Yield Bond (ABHIX), and American Century Long-Term Tax Free (ACLVX).

I don’t invest in load funds and can’t find any justification of continuing to own TWEIX once it becomes a load fund. I will vote against the change when I receive the proxy vote, but the change will probably happen anyway. So it’s time to cut it and move on.

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5 Responses to “Time to Dump American Century?”

  1. db |  Mar 30, 2007 at 9:01 pm

    WHOA! Thanks for the heads up — I have a small stake in TWEIX inside my 401(k). I guess I’ll dump it when I hit my 90 days.


  2. Tight Fisted Miser |  Mar 31, 2007 at 10:45 am

    Wow! That sucks. I remember when they used to be all no load funds and had no minimums for investing. It looks like now they are just another greedy mutual fund company.

  3. The Sun |  Apr 01, 2007 at 8:54 pm

    While we don’t like the way they do business and can’t change it, at least we can abandon them. We are not short of in investment.

  4. Researcher |  May 17, 2007 at 4:15 pm

    I’ve seen where if you are already invested before it goes load, you will be grandfathered in.

  5. Edwin Ubbens |  Feb 10, 2009 at 7:00 pm

    How will the fund performance change if it becomes a load fund?
    Forget it…you don’t seem to have my interest at heart !!