It’s an interesting time to be an active investor. Global markets are benefiting from improving economic conditions and corporate profit growth. And despite a shaky start to 2017, emerging markets appear to be having a banner year.
In the U.S., volatility remains in check, and the current equity bull market is four months shy of being the longest uninterrupted run on record. The rally produced outsized gains in growth-oriented stocks, especially in the FANG group—Facebook, Amazon, Netflix and Google (Alphabet) —which has contributed to a performance disparity between growth and value stocks, particularly among dividend payers.
In bonds, yields remain relatively low and credit spreads continue to grind tighter, so finding value has become challenging. Overall, unprecedented market conditions have some investors concerned; when will the music stop?
In the fourth quarter podcasts, our portfolio managers and chief investment officers choose evidence over emotion. With significant and enduring biases at work in the market every day, our experts are still finding opportunities for active investment approaches to generate outperformance. From rallies to risk management, learn more about our disciplined investing approach and our outlook for the months ahead by clicking on the titles below.
Market Rallies and Emotions
Facebook, Amazon, Netflix, and Google (FANG) have been responsible for the lion’s share of U.S. market gains over the last several years. But the outsized effect of FANG performance is increasing investors’ concerns about a market correction should any of the stocks experience even a minor reversal.
Real economic growth has essentially been range-bound for several years. In the face of lackluster performance, Chief Investment Officer Rich Weiss is looking toward overseas equities.
Markets can be swept up by emotion, fascinated by fads and wildly inefficient. We believe this creates opportunities for active managers.
In this issue of CIO Insights, American Century Investments’ chief investment officers discuss how this backdrop presents challenges to value-minded investors, but also creates opportunities as we pursue our active, disciplined approach.
Global and Emerging Markets
Corporate profit growth is benefiting from improving economic conditions around the world. VP and Senior Portfolio Manager Brent Puff explains where we are looking for opportunities against that backdrop.
Emerging markets (EM) had a rough start this year, but the turbulence cleared starting in the second quarter. Now EM appear to be having a banner year. What, if anything, worries EM portfolio manager Patricia Ribeiro about the future performance of emerging markets?
Risk and Diversification
Where you are on your own roadmap to retirement dictates the risk landscape around you. Learn how we navigate those risks in our portfolios.
SVP Cleo Chang believes alternative investments can be an important strategic addition to traditional portfolios, especially as some investors become more concerned about the extended U.S. equity bull market.
Growth and Value Investing
Are growth stocks expensive or attractive? CIO Greg Woodhams puts them in context, drawing a distinction between secular and cyclical growth.
Value stocks have dramatically underperformed growth stocks over the last ten years due to some unusual circumstances. CIO Phil Davidson explains why investors need to look beneath the surface to understand the increased gap, especially when it comes to dividends.
It’s been a tough year for value investors, but VP and Sr. Portfolio Manager Mike Liss sees risk-rewards in energy and consumer staples.
Long-term bond investors have enjoyed an extended period of positive performance. The challenge now? Finding value opportunities.
In this quarter’s update, Sr. VP and PM John Lovito dives into the three central banks with the most risk for aggressive monetary policy.
References to specific securities are for illustrative purposes only, and are not intended as recommendations to purchase or sell securities. Opinions and estimates offered constitute our judgment and, along with other portfolio data, are subject to change without notice.
International investing involves special risks, such as political instability and currency fluctuations. Investing in emerging markets may accentuate these risks.
Alternative mutual funds often hold a variety of non-traditional investments and often employ more complex trading strategies than traditional mutual funds. Each of these alternative asset classes and investment strategies have unique risks, typically making them more suitable for investors with an above average tolerance for risk. Investors should fully understand the asset classes, investment strategies and their risks before investing.
Investment return and principal value of security investments will fluctuate. The value at the time of redemption may be more or less than the original cost. Past performance is no guarantee of future results.
Diversification does not assure a profit nor does it protect against loss of principal.
The opinions expressed are those of the portfolio managers and chief investment officers and are no guarantee of the future performance of any American Century Investments fund.
This material has been prepared for educational purposes only. It is not intended to provide, and should not be relied upon for, investment, accounting, legal or tax advice.