AI Summary
5 min readThe Real AI Winners Are Emerging, and They're Not Who You'd Expect
Jonathan Thomas, CEO of American Century Investments since 2007, sat down with Josh Brown and analyst Sean Rousseau to explain how the asset management industry has been turned upside down—and why the next phase of the AI story will look completely different from what most people think.
Thomas runs a $350 billion asset manager headquartered in Kansas City, with an unusual ownership structure: over 40% of its dividends go to the Stowers Institute for Medical Research, funding foundational science on cancer and gene-based diseases. But the conversation quickly moved to the tectonic shifts reshaping money management and markets.
How the Asset Management Game Has Changed
Thomas has watched the industry transform across three distinct eras. In the 1980s and 1990s, asset managers owned the client relationship directly—investors knew their fund companies, got individual statements, and felt like they knew the portfolio managers. The tech bubble burst changed everything. Individual investors realized they needed professional help, and the industry pivoted to serving advisors rather than end clients directly.
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What you'll learn
- 1 (08:04) **Introduction and Guest Background** - Josh Brown introduces Jonathan Thomas, CEO of American Century Investments, and Sean Rousseau filling in as co-host.
- 2 (10:19) **Defining American Century Investments** - Jonathan explains the firm’s three key differentiators: privately held (no quarterly pressure), pure-play (no bank/insurance conflicts), and purpose-driven (funding medical research).
- 3 (12:14) **CEO Path: From Operations to Leadership** - Jonathan describes his unconventional route from CFO/COO roles to CEO, emphasizing trade-offs in talent, tech, and capital allocation.
- 4 (15:54) **Three Eras of Asset Management** - Jonathan outlines the industry’s evolution: asset managers owned client relationships (80s-90s), then advisors took over (2000s), and now platforms (retirement, AI-assisted) are emerging.
- 5 (19:54) **The Platform Shift and ETF Innovation** - Discussion on converting active strategies to ETFs, custom indexing, and tax-loss harvesting.
- 6 (23:44) **The Avantis Playbook: Launching a Hot Brand** - How American Century built Avantis from scratch, reaching $150B in AUM in 6.5 years.
- 7 (30:23) **Active ETF Tailwinds and Market Share** - Active ETFs now capture 40% of year-to-date flows; the category has grown from $50B (2018) to nearly $2T.
+ Full timestamped outline available in the app
Guests on this episode
Show Notes
On episode 251 of The Compound and Friends, Michael Batnick and Downtown Josh Brown are joined by Jonathan Thomas, CEO of American Century Investments, to discuss: the remarkable rise of Avantis Investors, why active ETFs are gaining ground, what it takes to build investment products that can outperform without taking excessive risk, whether AI is creating an earnings bubble, why the market is broadening beyond the Magnificent Seven, and where the biggest long-term opportunities in AI may emerge.
Plus, Jonathan shares the story behind American Century’s ownership structure, which has directed billions of dollars toward cancer and genetic-disease research at the Stowers Institute for Medical Research—and takes us inside one of the most exclusive celebrity weddings imaginable.
This episode is sponsored by Public and Vanguard.
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Investing involves the risk of loss. This podcast is for informational purposes only and should not be or regarded as personalized investment advice or relied upon for investment decisions. Michael Batnick and Josh Brown are employees of Ritholtz Wealth Management and may maintain positions in the securities discussed in this video. All opinions expressed by them are solely their own opinion and do not reflect the opinion of Ritholtz Wealth Management.
The Compound Media, Incorporated, an affiliate of Ritholtz Wealth Management, receives payment from various entities for advertisements
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