Navigating the Currents: American Century Value Fund's Q3 2025 Perspective

Well, here we are again, taking a moment to reflect on the third quarter of 2025, which, let's be honest, presented quite a dynamic backdrop for investors. It's always fascinating to see how the market reacts to ongoing economic shifts, and this quarter was certainly no exception. For us at the American Century Value Fund, it was a period that truly underscored the importance of our disciplined, long-term approach to investing.

Globally, the economic picture remained a bit of a mixed bag. We continued to see lingering discussions around inflation, albeit with some signs of moderation in certain areas, and of course, central bank policies still very much shaping the landscape. Interest rates, while perhaps stabilizing, definitely kept us all on our toes. What was particularly striking was the continued, almost relentless, focus on growth narratives in certain market segments. Yet, amidst all that excitement, we felt it was crucial, as always, to dig deeper, to really peer behind the curtain, so to speak, and uncover genuine value.

Our philosophy, as you know, remains steadfast: we’re on the hunt for high-quality companies that, for whatever reason, are trading below what we believe their intrinsic value truly is. We’re not chasing fads or trying to time the market; that’s just not our game. Instead, we’re focused on businesses with robust balance sheets, strong free cash flow generation, and management teams we trust to navigate challenging environments. It’s about owning a piece of a solid business, plain and simple, and letting time work its magic.

Throughout Q3, this commitment to fundamental analysis proved invaluable. While the broader market might have seen some sectors surge on sentiment, we remained anchored in our conviction. We continued to find compelling opportunities in areas we believe offer resilience and genuine growth potential that perhaps the market isn't fully appreciating right now. We're talking about companies that are essential, that demonstrate pricing power, and that can weather economic fluctuations. These often reside in sectors like industrials, certain financials, and even some consumer staples – the kinds of businesses that form the backbone of an economy.

Naturally, our portfolio isn't static; we’re constantly evaluating and rebalancing. We might trim positions that have become overvalued relative to their fundamentals, freeing up capital to invest in new opportunities that meet our stringent criteria. It’s a continuous, thoughtful process of optimization, ensuring that every holding in the fund earns its place and aligns with our core value mandate. We often say it's about making sure we're getting paid for the risk we're taking, and that means being selective.

Looking ahead to Q4 and into 2026, we’re keeping a close eye on a few key indicators. Economic data will, of course, continue to be a primary focus, particularly how consumer spending holds up and what corporate earnings reveal about the health of different sectors. Geopolitical developments, frankly, always cast a shadow, and we remain vigilant there. But through it all, our strategy won’t waver. We believe that sticking to our knitting, focusing on deeply researched, fundamentally sound companies, is the most reliable path to delivering long-term value for our shareholders.

It’s a marathon, not a sprint, and we appreciate your continued trust in our disciplined approach. We're confident that our commitment to identifying undervalued, quality businesses will continue to serve our investors well, regardless of what the broader market throws our way.