Episode summary
You’re About to See the Real AI Winners Stand Up
Ask The Compound
· · 1 hr 27 min · Hosts: Sean Russo, Josh Brown · Guests: Jonathan Thomas
Summary
Jonathan Thomas framed American Century Investments as a privately held, purpose-driven asset manager with just under $350 billion in assets, where more than 40% of dividends are directed to the Stowers Institute for Medical Research. He also explained how the company’s celebrity golf tournament in Lake Tahoe became a major branding engine, drawing huge crowds, TV coverage, and industry attention.
Most of the conversation focused on how asset management has changed. Thomas said the industry moved from direct-to-manager relationships in the 1980s and 1990s to advisor-led distribution, and is now shifting again toward platforms, ETFs, and direct indexing. He argued that technology determines long-term winners in the business, and that active ETFs are growing because they combine low cost, liquidity, transparency, and a better client story than traditional mutual funds.
The discussion then turned to Avantis, which Thomas said has become a $150 billion business in 6 and a half years by using a consistent, research-driven philosophy across asset classes. He said the funds have outperformed their benchmarks while charging only modestly more than passive alternatives, and that the firm’s focus on scalable, transparent ETFs gives advisors a simpler toolkit.
On markets, Thomas said the bull market is being supported by resilient economic growth and by a broadening of returns beyond the Magnificent Seven. He rejected the idea of a simple stock bubble, but said there is a reasonable concern that AI-related earnings could prove too high if capex slows or the benefits fail to show up for adopters.
Key takeaways
- Jonathan Thomas said American Century directs over 40% of dividends to the Stowers Institute, tying the firm’s ownership structure to cancer and genetic-disease research.
- Thomas argued that the asset-management business has shifted from direct relationships to advisors and now toward platforms, ETFs, and direct indexing.
- Avantis has reached $150 billion in 6 and a half years, and Thomas said its first five five-year-track-record products beat benchmarks by 280 bps on average.
- Thomas said active ETFs are gaining traction because investors want low fees, transparency, liquidity, and a way to explain value beyond a plain benchmark product.
- On AI, Thomas said the market is broadening beyond the Magnificent Seven and that adopters, not just creators, may ultimately capture the biggest gains.
Notable quotes
“We're privately held. Um, we are purposedriven and we're a pure play organization”
“we have a very unique capital structure which ends up directing over 40% of our dividends each and every year to the Sters Institute for Medical Research”
“the asset manager owned the relationship, then the advisor owned the relationship and we had to pivot to support the adviser. And now increasingly you see platforms owning those relationships”
“of the products that we have that have five-year records. Uh there were five of them. They're all ETFs, by the way”
“for the products that we launched, those first five, on average, we've outperformed the bench by 280 bips”
How the episode opens
This can't be good breathing this in, right? — Oh, it's got to be awful. — So, it's like carcinogens in the air. — Yeah. I mean, it's Canadian wildfires, right? — What's up, Sean? — What's up, John? — Is this going to be a regular thing now? Do you think
A little bit a couple years ago? — I was going to say we've had it for a few years now. I think — I read something that the air quality today is same air quality happens 60 times a year in the 80s.
Really? — In New York. — Does that sound right? I don't remember. I don't remember this other than recently. I don't remember. This is — What do I know? — They could keep their — From people smoking. — Well, I think it was from the
So much. — I think it was from all the factories and whatnot. — Yeah, you guys are young. You didn't get on airplanes where people had lit cigarettes in the cabin. — I kind of wish I was a part of that.
No, you don't. — And then you're in the non-smoking section. It was one foot away with no circulation. — Yeah. No smoking at this seat. Yeah, at this scene you can. — We were very We were very scientific. Um, I have science questions for you today. Are you ready? Are you ready for those?
Depending how deep they are, sure. — Well, yeah. I mean, I'm not going to ask you to run an experiment, but I I was reading I was reading up on uh Star Wars and — Star Wars. Yep. — I I mean, I'm fascinated by this. So,
It's it's really a unique story.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- ai investing winners
- active etfs
- avantis growth
- ai earnings bubble
- magnificent seven breadth
Companies and tickers mentioned
- NVDA
- American Century Investments
- Avantis Investors
- Nvidia
- Stowers Institute for Medical Research
Watch the episode
Watch “You’re About to See the Real AI Winners Stand Up” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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