Reflecting on Q4 2025: Navigating Markets with American Century Equity Income Fund

As 2025 drew to a close, Q4 really felt like a sprint, didn't it? We saw some interesting dynamics play out in the markets, a period that definitely kept us on our toes. Here at the American Century Equity Income Fund, we've always prided ourselves on a steady, disciplined approach, focusing on delivering that crucial income alongside capital appreciation. And, you know, it's during these bustling, sometimes unpredictable, market environments that our philosophy truly shines through.

So, how did we fare? Well, the fourth quarter saw us maintain our commitment to financially sound companies, those stalwarts that offer sustainable dividends and, importantly, demonstrate resilience. It's a strategy rooted in patience and a deep dive into fundamentals, and frankly, we believe it consistently serves our investors well. We're not chasing fads or fleeting trends; instead, we're building a portfolio designed for the long haul, seeking quality businesses that can weather various economic conditions and continue to generate income.

Looking at the specific drivers of our performance in Q4, it seems our careful selection across certain sectors really paid off. We continued to favor areas we believe offer compelling value and consistent dividend growth potential. Of course, not every stock in every sector moves in lockstep, and there were certainly some individual challenges along the way, as is always the case in investing. But overall, our focus on high-quality companies, particularly those with strong balance sheets and robust free cash flow generation, proved to be a significant tailwind.

When it comes to portfolio adjustments, you won't typically see us making drastic, knee-jerk reactions. Our process is much more deliberate. We continually evaluate our holdings, always asking if a company still meets our stringent criteria for income and value. There might be some subtle rebalancing, perhaps trimming a position that has run up significantly to lock in gains, or adding to a high-conviction name that we feel has become attractively valued. It's all about maintaining that optimal blend of stability and growth potential within the income-focused mandate.

Now, turning our gaze toward 2026, the economic landscape remains, as ever, a topic of much discussion. We're keeping a very close eye on inflation trends, interest rate policies, and broader geopolitical developments. These factors, naturally, can have a profound impact on corporate earnings and investor sentiment. Our game plan, however, remains consistent: to identify those businesses that possess the fundamental strength to navigate potential headwinds and, crucially, to continue rewarding shareholders through their dividends. We believe a diversified portfolio of these high-quality, income-generating companies offers a compelling proposition in any market cycle.

Ultimately, our commitment to our investors and our core investment philosophy remains unwavering. We understand the trust you place in us, and we are dedicated to managing the American Century Equity Income Fund with diligence and a clear long-term perspective. It's about more than just numbers for us; it's about building enduring value and providing a reliable income stream, come what may.