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Our analysis shows a compelling case for a strategic allocation to emerging markets equities in both equity-only and balanced portfolios, with potential benefits for both short- and long-term investors.
Retirement account balances on average in the U.S. ended 2017 at record highs—reflecting a long, remarkable bull market in both stocks and bonds. A stock market reversal could mean years of lost retirement income with little time to recover for investors already in or near retirement. This makes it a good time to reassess portfolio risk.
As value investors, we believe the factors that drove down the share prices of many well-managed, energy-related companies are overstated. Energy companies may have the potential to return to historic profitability levels via improved efficiencies and cost cutting, providing compelling opportunities.
Economies cycle. Policies shift. Markets ebb and flow. Can we improve our target-date portfolios by being more responsive to market conditions? Our objective has always been to increase the likelihood of retirement success for the broadest number of participants, and we systematically evaluate our asset allocation, sub-asset classes, and manager selection. Consistent with this method, we are incorporating a dynamic approach to risk management that follows the market environment.
In this paper, we explain the benefits of alpha diversification, with practical insights on how to choose an optimal mix of underlying fund managers for multi-asset or multi-manager portfolio. We also investigate the portfolio "hit ratio," which measures the percentage of periods a portfolio has outperformed its investment benchmark.
We explore how earnings acceleration, in concert with analyzing and monitoring long-term secular trends, can be applied to investing in emerging markets.
Active or passive investment management? It's no longer either/or. Rather than argue for one side or the other, we offer a more balanced assessment of these competing approaches. Active and passive strategies are in fact complementary tools investors can deploy to achieve their desired investment outcomes.
We examine behavioral biases and the enduring market inefficiencies that result from them. We then show how correctly forecasting inflection points and the extent of sustainable improvement can help to generate superior investment returns.
Inflation is a central concern for many investors. We apply a four-factor framework to current inflation conditions to provide our clients with a clear view of the inflation picture.
The demise of active management appears to be greatly exaggerated, especially when identifying managers with a unique process, attractive risk profile and consistent alpha generation potential.
Five years after the financial crisis, investors are taking another look at quantitative strategies. In this paper, we discuss how the systematic application of time-tested principles has resulted in attractive risk-adjusted returns.
Emerging markets equities have shown strength and resilience since early 2016. In light of this extended rally, many investors are concerned they may have missed this run. However, we see reasons to be optimistic, as history, macroeconomic, and secular trends appear to support continued strength.
High-quality dividends are often associated with large, older, blue chip companies. Many income investors won't consider companies that are under a certain size or aren't covered in Wall Street research reports. That can spell opportunity for market participants searching for yield, as small companies with strong balance sheets and high returns on capital can be a surprising source of sustainable dividends.
The health care sector is diverse. It spans a wide range of businesses—from the traditional plays of hospitals, health care providers, and pharmaceuticals to high-tech medical equipment and biotechs. This wide scope necessitates an in-depth understanding of many different industries and the companies within them. In this paper, we dissect the health care sector into five distinct segments and demonstrate how we use our in-depth, fundamental analysis to extract the most interesting opportunities within each space.
Questions around the timing of the President Trump's agenda and its ultimate effects on global trade in general, and emerging markets in particular, will not be clearly answered for some time. However, we believe the long-term secular growth story in emerging markets remains intact, and emerging markets equities should continue to provide attractive opportunities, despite the occasional macroeconomic headwinds.
Investors generally seek income from familiar sources, such as bonds and dividend-paying stocks. But accommodative monetary policies and low interest rates over the past decade have created challenges for those types of assets. We believe investing for income in today’s low interest rate environment requires a broadly diversified strategy with a goal of providing sustainable income.
When investing in emerging markets, as in most asset classes, investors can choose between actively managed and passive portfolios. Investors who subscribe to the efficient markets theory—the belief that all available information has been accurately priced into securities in a given market—might not see the potential advantages of using actively managed investments in the emerging markets portion of their portfolio. Vice President and Client Portfolio Manager, Nathan Chaudoin, discusses several reasons why.
The massive shift from rural areas to urban centers will have profound implications for many aspects of emerging markets economies. However, we expect key themes, including infrastructure build-out, consumption increases, and quality of life improvement, to play out across specific sectors and industries in the near term.
Despite progress in recent years in understanding and evaluating target-date strategies, we find ourselves at a new plateau in target-date communication—one that is rife with labels and shorthand in the form of digestible and overly-simplistic dichotomies. We believe that much of the jargon currently used to evaluate and analyze target-date funds (TDFs) is limiting and, in some cases, downright misleading.
The growing interest in impact investing in its various forms is generating discussions and deliberations among many investors and investment consultants. In a study by Greenwich Associates, commissioned by American Century Investments®, these professionals share their perspectives and expectations around the role of impact 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.
Generally, as interest rates rise, the value of the securities held in the fund will decline. The opposite is true when interest rates decline.
International investing involves special risks, such as political instability and currency fluctuations.
Diversification does not assure a profit nor does it protect against loss of principal.
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.
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.
The opinions expressed are those of American Century Investments (or the portfolio manager) and are no guarantee of the future performance of any American Century Investments' portfolio. 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.