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| Quarter | Letter Date | Fund Name | QTD | YTD | Tickers | Themes | Quick Take |
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Buyside Digest is not affiliated with, and does not endorse, American Century Equity Income Fund. This analysis is provided for institutional research purposes only and is not investment advice.
"American Century Equity Income underperformed in Q2 2026 as AI-driven semiconductor stocks surged while the fund maintained its defensive, quality-focused positioning. Lack of exposure to Micron and Intel drove underperformance as memory markets recovered."
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.
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