American Century opens new branded fund

Kansas City-based American Century Investments has launched its second fund with multiple managers under its AC Alternatives brand.

The new fund, AC Alternatives Long Short Fund, splits its investments between stocks its managers consider undervalued and stocks they consider overvalued. The fund buys the undervalued shares and sells short the overvalued shares.

Investors sell short by borrowing a stock from its owner and selling the shares at prevailing prices, which they consider overly expensive. The short seller buys back the shares later, to returned them to the lender, and profits if the share price has fallen.

This story was originally published May 27, 2016 at 9:25 AM with the headline "American Century opens new branded fund."