| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 6.3% | 5.8% | 35.3% |
The American Century Emerging Markets Fund delivered strong performance in Q4 2025, with emerging market equities outperforming U.S., global and developed market equities for the first calendar year since 2017. The fund's positioning in information technology drove outperformance, particularly in semiconductor and AI-related stocks. Asia ex-China remained the primary growth engine, with South Korea and Taiwan leading gains as semiconductor names benefited from robust AI spending and demand. Key contributors included SK Hynix, which benefited from surging demand for AI-related memory, and Zhongji Innolight, which advanced on strong 5G infrastructure and cloud computing demand. The manager believes emerging markets are well-positioned for continued growth, supported by accelerating innovation in AI-foundational technologies including semiconductors, data centers and batteries. While U.S. trade policy remains uncertain, many EM companies have adapted well to challenging conditions. Strong foundational support continues with attractive valuations, favorable demographics, rising domestic consumption and supportive policy environments, combined with tailwinds from a weaker U.S. dollar positioning EM companies for continued resilience and opportunity in 2026.
Emerging markets offer attractive investment opportunities driven by accelerating innovation in AI-foundational technologies, strong fundamentals including attractive valuations and favorable demographics, and companies' demonstrated ability to adapt to challenging trade environments.
The manager remains optimistic that EM companies have the potential to manage trade policy challenges well heading into 2026. Strong foundational support continues to underpin the EM equity story, with attractive valuations, favorable demographics, rising domestic consumption and supportive policy environments. Combined with the tailwind of a weaker U.S. dollar, these drivers have positioned EM companies well for continued resilience and opportunity.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 23 2026 | 2025 Q4 | 000660.KS, 005930.KS, 0700.HK, 0939.HK, 1810.HK, BABA, BHARTIARTL.NS, HDFCBANK.NS, NTES, RELIANCE.NS, SUNPHARMA.NS, TSM | AI, Asia, emerging markets, Energy Transition, semiconductors, technology, Trade Policy | - | Strong technology-related performance supported gains as semiconductor names and other technology-related stocks benefited from robust AI spending and demand. Rising AI workloads have boosted demand for rechargeable batteries, and the firm believes several EM firms possess manufacturing leadership in this sector. Taiwan and South Korea remain essential to global chipmaking. SK Hynix was a top contributor as demand for AI-related memory remained high amid the generative-AI boom and surging data center investment, with quarterly results overwhelmingly powered by surging demand for AI components, especially high bandwidth memory. Many EM offer lower-cost, more readily available power that supports rapid data center build-outs. Rising AI workloads have boosted demand for data center infrastructure, with companies like Zhongji Innolight benefiting from strong demand in cloud computing and 5G infrastructure. U.S. tariffs and trade policy have not been as challenging for EM as investors expected, in part because many markets have adapted well. Some have negotiated more manageable tariff structures with the U.S., while others have focused on non-U.S. relationships. The path of global trade and U.S. policy remains uncertain going forward. HD Hyundai Electric benefited from demand for power transformers, switchgear and smart grid solutions, with U.S. infrastructure investment plans around AI data centers and grid upgrades supporting the stock. The company has been well positioned for global trends around electrification and sustainability. |
| Oct 24 2025 | 2025 Q3 | 1810 HK, 2308 TT, 300308 CH, 3311 HK, 388 HK, 688008 CH, BABA, BYD, CICIBC IN | AI, China, emerging markets, interest rates, Trade Policy |
2308 TT 688008 CH 2308 TT 688008 CH |
EM equities outperformed developed markets amid easing trade tensions, AI-driven growth, and expectations of Fed rate cuts. China led gains due to policy support for chipmakers and domestic demand recovery. EM valuations remain attractive with higher earnings growth potential and sensitivity to a weaker USD. |
| Jul 23 2025 | 2025 Q2 | 034020 KS, 064350 KS, 2383 TT, 262760 KS, 3690 HK, KB, MM IN, SUNP IN, TCOM | Domestic Demand, emerging markets, Governance, valuation dispersion, volatility | - | The letter emphasizes selective opportunity in emerging markets as volatility, tariffs, and currency moves create valuation dispersion. Management focuses on fundamentally strong businesses with improving governance and long-term domestic demand drivers rather than macro timing. The outlook highlights disciplined country and stock selection to capture growth while managing downside risk. |
| Mar 31 2025 | 2025 Q1 | 1560 TT, 1810 HK, 3311 HK, 6669 TT, BHARTI IN, BYD, EMBR3 BZ, OTP GR | - | - | |
| Sep 30 2024 | 2024 Q3 | 002353 CH, 2383 TT, 2408 TT, 600312 CH, 6669 TT, BJAUT IN, CIMB MK, ERJ | - | - | |
| Jun 30 2024 | 2024 Q2 | 300750 CH, 910 HK, BKRKY, BMBRF, CX, HXSCL, INDIGO IN, RENT3 BZ, TSM, VALE3 BZ | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
AIAI has been integrated into RGA's research process through tools like NotebookLM, Gems in Gemini, and Claude Code. The firm views AI as a force multiplier for human judgment rather than a replacement, emphasizing the Kasparov Law principle. They believe the market narrative around AI displacement is swinging to unhelpful extremes, creating investment opportunities. |
Machine Learning Automation Software Productivity Innovation |
Data CentersSupply constraints curtailing infrastructure buildout rate, but compute capacity is being used immediately upon coming online. This differs from dot-com bubble when dark fiber was installed ahead of need. Labor, power and land shortages creating bottlenecks. |
Supply Constraints Utilization Bottlenecks Infrastructure | |
Energy TransitionThe portfolio maintains significant exposure to electrification themes through companies like Bloom Energy, which provides clean, reliable power solutions for AI data centers. The energy transition represents a structural opportunity as companies race to build power infrastructure to support growing electricity demands from AI workloads. |
Electrification Clean Energy Power Generation Fuel Cells Grid Infrastructure | |
SemiconductorsRGA initiated a position in Lattice Semiconductor, viewing it as an under-appreciated AI winner with immediate gains and longer-term optionality. Lattice's focus on efficiency and advantages in low-power, small footprint FPGAs position it favorably for AI servers, particularly as the only Post-Quantum Cryptography secure chips on the market. |
FPGAs Security Efficiency AI Infrastructure Programmable | |
Trade PolicyRecent tariff policies continued to negatively impact U.S. consumers and companies throughout the year. However, international companies have been finding new trade arrangements and growth opportunities, benefiting from shifts in global trade patterns as the new U.S. administration alters terms of international cooperation. |
Tariffs International Growth Cooperation Impact | |
| 2025 Q3 |
Emerging marketsGlobal equities, especially those outside the U.S., powered equity returns. In emerging markets, shares of companies linked to commodities were the strongest performers as commodities rallied. Even after a strong year for international and emerging markets shares, we still see some of the best value in the world in these areas. |
International Commodities Non-US Best Value |
| 2025 Q2 |
EmergingMarkets |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Oct 24, 2025 | Fund Letters | Patricia Ribeiro | 2308 TT | Delta Electronics Inc. | Information Technology | Electrical Equipment | Bull | NYSE | AI, Electrification, Energy systems, EVs, growth, Industrials, Power | Login |
| Oct 24, 2025 | Fund Letters | Patricia Ribeiro | 688008 CH | Montage Technology Co. Ltd. | Information Technology | Semiconductors | Bull | Shanghai Stock Exchange | AI, Chips, data centers, growth, Ics, Networking, semiconductors | Login |
| Oct 24, 2025 | Fund Letters | Patricia Ribeiro | 2308 TT | Delta Electronics Inc. | Information Technology | Electrical Equipment | Bull | NYSE | AI, Electrification, Energy systems, EVs, growth, Industrials, Power | Login |
| Oct 24, 2025 | Fund Letters | Patricia Ribeiro | 688008 CH | Montage Technology Co. Ltd. | Information Technology | Semiconductors | Bull | Shanghai Stock Exchange | AI, Chips, data centers, growth, Ics, Networking, semiconductors | Login |
| TICKER | COMMENTARY |
|---|---|
| 000660.KS | SK Hynix has solidified its leadership in high-bandwidth memory (HBM), emerging as the exclusive HBM supplier for Microsoft's in-house AI accelerator and securing roughly two-thirds of NVIDIA's anticipated HBM4 demand for its next-generation platforms at meaningfully higher price points and margins than prior generations. |
| 005930.KS | Top gainers included Samsung (+38% in U.S. dollar terms) |
| 0700.HK | Shinya also visited Shenzhen, where Star Magnolia Capital organized an educational visit for our families to Tencent's headquarters, alongside meetings with several promising early-stage companies. |
| 1810.HK | Shares declined amid inconsistent growth in the smartphone business, with strong competition limiting market share gains, while rising memory chip prices also pressured smartphone margins. In the electric vehicle business, Xiaomi has struggled to scale production to meet order demand. |
| BABA | Alibaba was a detractor during the quarter after the company reported mixed fiscal Q2 results. While cloud revenue growth accelerated and margins remained stable, the core commerce business struggled with slowing growth and significant profit pressure, particularly in the quick commerce segment where heavy investment and intense competition led to a sharp decline in profitability. |
| NTES | During the quarter, we added to an existing holding in Netease |
| RELIANCE.NS | India-based conglomerate: chemicals, refining, #1 mobile telco and #1 retailer in India |
| SUNPHARMA.NS | We exited the position amid concerns around potentially hefty U.S. tariffs on branded drugs and the Trump administration's focus on lowering key Medicare drug prices. We believe the latter could have a negative impact on Sun Pharma's leading specialty drug, Ilumya. |
| TSM | TSMC was a top contributor during the quarter, driven by robust demand for advanced semiconductor manufacturing and improved gross margins as AI continues to grow strong and the non-AI segment showed signs of recovery. Management raised its revenue growth guidance to the mid-30% range, and given continued strength in demand, AI-related growth targets are expected to move above the current mid-40% level. |
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