American Century Strategic Allocation Funds Q2 2024 Commentary

seekingalpha09-20

Strategic Allocation portfolios had mixed performance; Moderate and Aggressive posted gains, while Conservative declined slightly, all underperforming their benchmarks.U.S. large-cap growth stocks led...

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Moderate and Aggressive posted gains, while Conservative declined slightly, all underperforming their benchmarks.U.S. large-cap growth stocks led...</p>\n\n<a href=\"https://seekingalpha.com/article/4722281-american-century-strategic-allocation-funds-q2-2024-commentary\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"AVUV","symbol_name":"Avantis U.S. Small Cap Value ETF","start_time":0,"source_url":"https://seekingalpha.com/article/4722281-american-century-strategic-allocation-funds-q2-2024-commentary","article_id":"2468643594","we_media_id":null,"thumbnails":["https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1453953453/image_1453953453.jpg"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2468643594","pubTimestamp":1726827000,"columns":[],"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"Strategic Allocation portfolios had mixed performance; 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Moderate and Aggressive posted gains, while Conservative declined slightly, all underperforming their benchmarks.U.S. large-cap growth stocks led market gains, driven by Big Tech, while value, non-U.S. developed markets, and smaller-cap stocks lagged.Manager selection helped some equity funds outperform, but overall U.S. equity holdings and smaller-cap stocks detracted from performance.Current positioning favors U.S. stocks over international and large caps over small caps due to stronger economic growth and higher Treasury yields.   tadamichiAverage Annual Total Returns for Period Ended 6/30/2024    Qtr% 1 Yr% 3 Yr% 5 Yr% 10 Yr% Since Inception% Inception Date Gross Expense Ratio % Net Expense Ratio %   Strategic Allocation: Conservative -0.14 8.29 0.71 5.22 4.71 5.75 2/15/96 1.12 0.83   Strategic Allocation: Moderate 0.20 10.97 1.62 7.12 6.21 7.02 2/15/96 1.26 0.84   Strategic Allocation: Aggressive 0.38 13.06 2.65 8.81 7.51 7.80 2/15/96 1.34 0.80  \nClick to enlarge  Data presented reflects past performance. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance shown. To obtain performance data current to the most recent month end, please visit www.americancentury.com/performance. Investment return and share value will fluctuate, and redemption value may be more or less than original cost. Data assumes reinvestment of dividends and capital gains. Returns for periods less than one year are not annualized. For information about other share classes available, please consult the prospectus. There is no guarantee that the investment objectives will be met. Dividends and yields represent past performance and there is no guarantee that they will continue to be paid. Returns or yields for the fund would have been lower if a portion of the management fee had not been waived. The advisor expects this waiver to continue until November 30, 2024, and cannot terminate it prior to such date without the approval of the Board of Directors. Review the annual or semiannual report for the most current information. The gross expense ratio is the fund's total annual operating costs, expressed as a percentage of the fund's average net assets for a given time period. It is gross of any fee waivers or expense reimbursement. The net expense ratio is the expense ratio after the application of any waivers or reimbursement. This is the actual ratio that investors paid during the most recent fiscal year. Please see the prospectus for more information. You should consider the fund’s investment objectives, risks, and charges and expenses carefully before you invest. The fund’s prospectus or summary prospectus, which can be obtained at American Century Investments® Home, contains this and other information about the fund, and should be read carefully before investing. The opinions expressed are those of the portfolio investment team and are no guarantee of the future performance of any American Century Investments portfolio. Statements regarding specific holdings represent personal views and compensation has not been received in connection with such views. This information is for an educational purpose only and is not intended to serve as investment advice. The information is not intended as a personalized recommendation or fiduciary advice and should not be relied upon for investment, accounting, legal or tax advice. The fund’s actual asset mixes will vary from the neutral mix based on investment performance. Fund managers regularly review the portfolio and will rebalance the asset mix to stay within the fund’s preset operating range. The risk designations are relative only to the three Strategic Allocation Funds and do not represent comparisons with any other investment. 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. Interest rate changes are among the most significant factors affecting bond return. In a declining interest rate environment, bond prices rise and the fund may generate less income. In a rising interest rate environment, bond prices fall. Diversification does not assure a profit, nor does it protect against loss of principal. IN-FLY-92073 American Century Investments Services, Inc., Distributor©2024 American Century Proprietary Holdings, Inc. All rights reserved. Non-FDIC Insured May Lose Value No Bank Guarantee \nClick to enlarge  Strategic Allocation: Moderate and Strategic Allocation: Aggressive posted positive absolute returns during the quarter that ended June 30, 2024, while Strategic Allocation: Conservative declined fractionally. All portfolios underperformed their benchmarks. Market Environment Stock market gains remained concentrated. U.S. large-cap growth stocks gained more than 8% in the second quarter, reaching record highs. Continuing the trend of concentrated stock market performance, the Fab Five Big Tech stocks (Nvidia, Microsoft, Amazon, Alphabet and Meta Platforms) dominated results for the year. In this environment, large-cap value, non-U.S. developed markets and mid- and small-cap stocks declined. Economic conditions continued to be favorable. On the economic front, inflation cooled in the U.S. in May after a hot start to the year. Employment remained steady, allowing the Federal Reserve (Fed) more time to assess the inflation environment before pivoting to lower rates. With the Fed now lagging much of the world in starting rate cuts, the Federal Open Market Committee kept the policy rate steady in June and lowered its outlook to one cut by year-end. Fixed-income markets did not move meaningfully. Core U.S. bonds were flat for the quarter as government yields ticked up slightly. The average return across a broad sample of global asset classes was essentially zero for the quarter. Key Contributors A number of equity funds beat benchmarks. Manager selection offset declines in U.S. Small Cap Growth and Global Real Estate. Avantis International Small Cap Value ETF (AVDV) and Focused Dynamic Growth ETF (FDG) outperformed benchmarks and provided gains across portfolios, as did Avantis Emerging Markets Equity ETF (AVEM) in the Moderate and Aggressive portfolios. Key Detractors Most equity holdings detracted in absolute terms. During the quarter, most underlying equity holdings generated negative returns as value-oriented and smaller-cap stocks lagged their large-growth peers. Avantis U.S. Small Cap Value ETF (AVUV) and U.S. Mid Cap Value (AVMV) were the weakest performers. Overall manager selection in U.S. equity holdings weighed on results. Non-U.S. Intrinsic Value, Focused International Growth and Avantis U.S. Equity ETF (AVUS) underperformed their benchmarks by the widest margins across the portfolios. Positioning for the Future Marginally underweight stocks compared with bonds relative to the benchmark. Investments are valued based on future cash flows, which are subject to the effects of inflation and reflect the opportunity cost of not being able to invest and compound returns today. As a result, the net present value of future cash flows is determined by discounting at today’s interest rates. With Treasury bill yields above 5%, U.S. stocks aren’t offering a compelling risk/reward trade-off vis-à-vis cash, in our view. Within equities, biased toward the U.S. Stronger economic and corporate earnings growth combined with foreign currency effects call for a U.S. stock overweight. As a result of weaker economic growth in developed markets outside the U.S., earnings expectations for European and Japanese companies are significantly below those of U.S. corporations. Favoring large caps over small caps. Decades ago, researchers identified a size premium wherein small company stocks outperform large over time. The problem is that over time can sometimes take a long time to manifest. And small is arguably cheap for a reason— rates are high and large companies are enjoying better profit growth. As a result, we favor large over small for now.  Original Post Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"analysis","news_rank":0,"symbols":[],"gpt_button":0},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.3","shortVersion":"4.29.3","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2468643594"}