Investment Outlook

Fourth Quarter 2017

Economic news is everywhere—can you make sense of it? Now it's easier with the Investment Outlook. The outlook highlights key components that affect the economy all and provides insights that may be important for your investments. Visit quarterly for the most recent update.

  • Overview
  • Macroeconomic Outlook
  • Global and Non-U.S. Equity
  • U.S. Growth Equity
  • U.S. Value Equity
  • Disciplined Equity
  • Global Fixed Income
  • U.S. Fixed Income
  • Alternatives
  • Multi-Asset Strategies

This Quarter's Highlights

  • Global and Non-U.S. Equity: Global recovery broadens
  • Global Fixed Income: Moderate global growth continues, despite geopolitical concerns
  • Multi-Asset Strategies: Caution increasingly warranted in equities
  • U.S. Value Equity: Look past headlines to find opportunities
  • Alternatives: Volatility recedes after brief spike

Macroeconomic Outlook

Modest Growth, Muted Inflation, Low Interest Rates Shape Global Backdrop

globe

Global Economy

Central bank support continues to promote gains in global growth.

Details

globe and dollar symbol

U.S. Economy

Growth expectations sagging as pro-growth policies remain stalled.

Details

line graph with arrow

Inflation

U.S. Consumer Price Index (CPI) remains low but stable, while longer-term inflation expectations remain below average.

Details

dollar symbol, gavel, and sound block

Monetary Policy

Fed holds rates steady as it launches balance sheet normalization.

Details

line graph

Interest Rates

Rates stuck in a narrow range.

Details

The Global Macro Strategy Team’s view as of 9/6/2017.

Global and Non-U.S. Equity

Global Recovery Broadens

United States icon

United States

Macroeconomic factors support stocks, though concerns exist.

Details

Eurozone icon

Europe

Recovery solidifies as conditions continue to improve.

Details

Japan icon

Japan

Outlook for growth is improving, but challenges remain.

Details

Emerging Markets icon

Emerging Markets (EM)

Fundamentals sustain rally with room to run.

Details

The Global and Non-U.S. Equity Team’s view as of 9/20/2017.

U.S. Growth Equity

Outlook Still Optimistic

Technology icon

Technology

Industry performance is driven by strong growth and profits.

Details

Health Care icon

Health Care

Policy uncertainty offers mixed set of opportunities.

Details

Consumer Discretionary icon

Consumer Discretionary

Changing consumer preferences are making their mark on the economy.

Details

U.S. Growth Equity Team’s view as of 9/5/2017.

U.S. Value Equity

Look Past Headlines to Find Opportunities

Energy icon

Energy1

Supply trends and valuations remain positive.

Details

Health Care icon

Health Care1

Fundamental analysis is key in a sector vulnerable to tweets and shifting sentiment.

Details

icon placeholder

Consumer Staples & Consumer Discretionary1

Frequent headlines create new risks for potential Amazon targets.

Details

Real Estate icon

Real Estate2

Real estate opportunities can be found in select niches.

Details

1The U.S. Value Equity Team’s view as of 9/14/2017.
2The Global Real Estate Team's View as of 9/1/2017.

Disciplined Equity

Favoring a Disciplined, Multi-Factor Approach Because Fundamentals Drive Long-Term Equity Returns

U.S. Equities

U.S. Equities

Equity investors should beware of overpaying for cash flow or earnings growth.

Details

Global and Non-U.S. Equities icon

Global & Non-U.S. Equities

Valuation opportunities and fundamentals align in developed and emerging markets.

Details

The U.S. Disciplined Equity Team’s view as of 9/15/2017.

Global Fixed Income

Moderate Global Growth Continues, Despite Geopolitical Concerns

Developed Markets icon

Developed Markets

Accommodation supports moderate growth, despite policy headwinds.

Details

Emerging Markets icon

Emerging Markets (EM)

EM growth should outpace developed markets, though risks are growing.

Details

Currencies icon

Currencies

Ongoing political issues suggest considering currencies of improving economies.

Details

The Fixed Income Team’s view as of 9/19/2017.

U.S. Fixed Income

Low Volatility, Tight Credit Spreads Heighten Search for Value

Corporate Credit icon

Corporate Credit

Investment Grade & High-Yield Credit

Corporates extend performance run, and value grows more elusive.

Details

Securitized icon

Securitized

MBS, CMBSABS & CMOs

Housing market gains aid select sectors.

Details

Government icon

Government

Treasuries, Agencies & TIPS

Economic, global factors are keeping rates range-bound, Treasuries in favor.

Details

Municipals (Munis) icon

Municipals (Munis)

Investment-Grade & High-Yield

Favorable market backdrop supports investor demand, muni gains.

Details

The Fixed Income Team’s view as of 9/6/2017.

Alternatives

Volatility Recedes After Brief Spike

Alternative Income

Opportunities are available, but security selection remains key.

Details

Details

The AC Alternatives Team’s view as of 9/15/2017.

Multi-Asset Strategies

Caution Increasingly Warranted in Equities

Asset Class

We are less sanguine on stocks longer term, remaining neutral for now in our tactical portfolios.

Details

Region

We are neutral by region, preferring to identify opportunities at the individual stock level.

Details

Style & Capitalization

We have a continued bias to growth over value stocks.

Details

Bonds

Credit, asset-backed, and inflation-linked securities are all preferable to nominal Treasuries.

Details

Real Assets

TIPS attractive; neutral on REITs.

Details

The Multi-Asset Strategies Team’s view as of 9/15/2017.

The readings in the dials above show the output of our quantitative models relative to the asset allocation portfolios’ neutral weightings.

Investment Outlook Brochure

Fourth Quarter 2017

Download PDF

Investment Outlook Presentation

Fourth Quarter 2017

Download PDF

The opinions expressed are those of American Century Investments (or the portfolio manager) and are no guarantee of the future performance of any American Century Investments' portfolio. This material has been prepared for educational purposes only. It is not intended to provide, and should not be relied upon for, investment, accounting, legal or tax advice.

Investment return and principal value of security investments will fluctuate. The value at the time of redemption may be more or less than the original cost. Past performance is no guarantee of future results.

Generally, as interest rates rise, bond prices fall. The opposite is true when interest rates decline.

International investing involves special risks, such as political instability and currency fluctuations.

Historically, small- and/or mid-cap stocks have been more volatile than the stock of larger, more-established companies. Smaller companies may have limited resources, product lines and markets, and their securities may trade less frequently and in more limited volumes than the securities of larger companies.

References to specific securities are for illustrative purposes only, and are not intended as recommendations to purchase or sell securities. Opinions and estimates offered constitute our judgment and, along with other portfolio data, are subject to change without notice.

American Century Investments uses a multifactor stock-ranking model incorporating a variety of stock attributes, which fall into four categories or factor families: valuation, growth, quality, and sentiment.

Diversification does not assure a profit nor does it protect against loss of principal.

Alternative mutual funds that hold a variety of non-traditional investments also often employ more complex trading strategies than traditional mutual funds. Each of these different alternative asset classes and investment strategies have unique risks making them more suitable for investors with an above average tolerance for risk.