The curated database of hedge funds that publish investor letters. Research by geography, strategy, and schools of thought.
| # | Fund | Strategy | Style | Geography | AUM | Latest Letter |
|---|---|---|---|---|---|---|
American Century Equity Income Fund returned 4.92% in Q2 2026, underperforming the Russell 3000 Value Index's 14.02% return. The underperformance was driven primarily by an underweight allocation to information technology, particularly semiconductors, as AI-related stocks surged. Lack of exposure to Micron Technology and Intel detracted significantly as memory markets showed signs of cyclical recovery. Stock selection in financials also weighed on results, with an overweight to Marsh & McLennan detracting as shares pulled back on valuation concerns. The portfolio maintains a defensive posture focused on higher-quality companies with stable revenues and resilient cash flows, given uncertainty around the Middle East conflict, inflation, and tariff policies. The team holds significant overweights in consumer staples and health care, viewing these sectors as offering attractive valuations and defensive characteristics. Information technology remains the largest underweight due to valuation concerns, despite adding selective exposure including a new position in Apple. Rising delinquencies in commercial real estate and consumer loans to lower-income borrowers inform the team's selective approach to financials.
The fund seeks current income and long-term capital growth by investing in undervalued companies of all sizes, with a focus on higher-quality businesses that have stable revenues, low debt, resilient cash flows, and predictable business models less sensitive to economic conditions.
The managers expect to continue focusing on higher-quality companies with resilient business models given the uncertain macroeconomic environment. They maintain overweights in defensive sectors like consumer staples and health care while remaining underweight information technology due to valuation concerns. The team is selective in financials given rising delinquencies in certain areas.
As of Jul 21, 2026
The fund has a 4-member management team with an average tenure of 14.98 years. Kevin Toney, CFA, is Chief Investment Officer - Global Value Equity, senior vice president and senior portfolio manager who joined American Century Investments in 1999 and became a portfolio manager on August 30, 2003, with financial industry experience since 1993 and degrees from the University of Virginia and Wharton. Brian Woglom, CFA, is Senior Portfolio Manager since April 29, 2019, with more than five years at American Century co-managing multiple value strategies, holding degrees from Amherst College and the University of Michigan. Paul Howanitz, CFA, became a portfolio manager on February 19, 2022, co-managing the U.S. Value Yield strategy since 2022 after joining the firm in 2015, with degrees from Colby College and the University of North Carolina.
The American Century Equity Income Fund is a classic value strategy that seeks to deliver income, build capital, and manage downside risk over time. The fund uses a robust, bottom-up, fundamental research process to determine and manage down market risk and fair value potential for each security in their universe. The investment objective seeks current income with capital appreciation as a secondary objective. Portfolio managers look for equity securities of companies with a favorable income-paying history and undervalued stocks. Under normal market conditions, at least 80% of net assets are invested in equity securities. The fund invests in securities with characteristics proven to increase returns, lower volatility, limit downside risk, and provide income: high quality, attractive valuations, competitive yields. The fund focuses on delivering current income with secondary capital appreciation by investing in equity securities of companies with strong income payment histories that are potentially undervalued. The distinct, active investment approach seeks to deliver a strong risk-adjusted return profile through stock selection. The fund invests in convertible securities, which may be affected by changes in interest rates, the credit of the issuer and the value of the underlying common stock.
Lead Portfolio Manager
Patricia Ribeiro
Managing Partner
Neutral / Balanced
Market Conviction
The fund holds a diversified portfolio with top 10 holdings representing approximately 25% of assets, suggesting 40+ total positions. The managers articulate clear sector preferences with significant overweights to consumer staples and health care, and a large underweight to information technology. They provide specific reasoning for avoiding certain names (Micron, Intel) based on valuation and quality concerns. However, the lack of concentrated position sizing and the broad diversification across sectors limits the conviction score. The explanation describes a moderate conviction approach with clear views but diversified implementation.
Growth Outlook
Market outlook remains moderate conviction: The Equity Income Fund delivered positive performance in Q4 2025 but trailed its benchmark, actively rotating capital into high-quality defensive holdings like Sysco while maintain...
Risk Appetite
Risk appetite posture is moderate conviction: The Equity Income Fund delivered positive performance in Q4 2025 but trailed its benchmark, actively rotating capital into high-quality defensive holdings like Sysco while maintain...
Capital Deployment
The letter describes limited net deployment activity. The team added positions in Microsoft and Apple but maintains underweight positions in both. A preferred security in Schwab was called and a convertible in Cracker Barrel matured, representing capital returned rather than deployed. The overall tone emphasizes selectivity and finding few opportunities in consumer discretionary and real estate. No cash level changes are disclosed. The activity described suggests modest rotation with no clear evidence of net capital deployment or de-risking, scoring near neutral with a slight negative bias given the emphasis on selectivity and limited opportunities.
Forward Guidance
Forward guidance signal: The Equity Income Fund delivered positive performance in Q4 2025 but trailed its benchmark, actively rotating capital into high-quality defensive holdings like Sysco while maintain...
Language Signal
The letter contains more cautious and risk-focused language than bullish language. Terms like 'uncertainty,' 'murky outlook,' 'delinquencies trending upward,' 'slowdown in spending,' 'overvalued,' and 'difficult to identify' appear frequently. Positive language around 'opportunities,' 'attractive valuations,' and 'resilient' is present but more limited in scope, focused on specific defensive sectors. The balance tilts moderately negative in directional language.
Perceived Risk
Perceived risk level is evaluated as above average conviction. The Equity Income Fund delivered positive performance in Q4 2025 but trailed its benchmark, actively rotating capital into high-quality defensive holdings like Sysco while maintain...
Opportunity Density
The managers describe a selective opportunity environment. They state it is 'difficult to identify many companies with durable business models' in consumer discretionary and that 'most equities remain overvalued' in real estate. They emphasize finding 'more compelling risk/return opportunities elsewhere' rather than in information technology despite adding some exposure. Opportunities are characterized as concentrated in specific defensive sectors (consumer staples, health care) rather than broadly available. This language indicates a below-average opportunity set requiring significant selectivity.
Time Horizon
The managers emphasize long-term positioning with statements like 'Microsoft's cloud and artificial intelligence franchises will likely provide long-term earnings power' and 'services growth and ecosystem monetization will likely support long-term earnings' for Apple. The focus on higher-quality companies with 'predictable business models' and 'resilient cash flows' suggests a multi-year investment horizon. However, the letter also discusses quarterly performance drivers and near-term concerns like 'elevated AI-related capital spending and the timing of monetization may pressure near-term returns,' indicating some attention to medium-term catalysts. The balance suggests a 2-4 year horizon with long-term framing but some catalyst awareness.
Top Conviction Themes
Key Catalysts
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