Investment Outlook

Third 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 in one place, 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.: Europe and emerging markets are gaining as the U.S. recovery matures
  • Global Fixed Income: Global growth is modest as fundamentals improve
  • Multi-Asset Strategies: Macro uncertainty, micro opportunity
  • U.S. Value Equity: We are continuing to find value
  • Alternatives: Opportunities exist for active managers

Macroeconomic Outlook

Global Growth Increasingly Synchronized as Central Bank Stimulus Remains a Factor

globe

Global Economy

Central bank stimulus and improving confidence promote modest, synchronized growth.

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globe and dollar symbol

U.S. Economy

Growth expectations may be peaking as economic growth data improve.

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line graph with arrow

Inflation

Inflation remains weak globally, while setbacks for President Trump's agenda are driving down U.S. inflation expectations.

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dollar symbol, gavel, and sound block

Monetary Policy

Federal Reserve (FED) set to tackle balance sheet reduction.

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Interest Rates

Backdrop points to range-bound rates, flat yield curve.

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

Global and Non-U.S. Equity

Europe, Emerging Markets Gaining as the U.S. Recovery Matures

United States icon

United States

Investors shrug off questions about policy and drive markets higher.

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Eurozone icon

Europe

Recovery strengthens as some uncertainties are removed.

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Japan icon

Japan

Stimulus supports growth, but challenges remain.

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Emerging Markets icon

Emerging Markets

Time to move beyond reflation in favor of sustained growth.

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The Global and Non-U.S. Equity Team’s view as of 6/8/2017.

U.S. Growth Equity

Solid Earnings Continue to Drive Growth Stocks

Technology icon

Technology

Higher-growth companies continue to benefit from enduring tech trends.

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Health Care icon

Health Care

Positives generally outweigh political rhetoric.

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Consumer Discretionary icon

Consumer Discretionary

Restrained spending leads to mixed results for businesses catering to consumers.

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U.S. Growth Equity Team’s view as of 6/5/2017.

U.S. Value Equity

Continuing to Find Value

Health Care icon

Health Care1

Trends should bolster health care regardless of government policies.

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Consumer Staples & Consumer Discretionary1

Innovation can help offset competitive headwinds and shifting consumer preferences.

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Energy1

Valuations are attractive and returns on capital are poised for improvement.

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Real Estate2

European property market presents compelling fundamentals.

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1The U.S. Value Equity Team’s view as of 6/8/2017.
2The Global Real Estate Team's View as of 6/8/2017.

Disciplined Equity

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

U.S. Equities

U.S. Equities

Sharp recent outperformance by growth suggests value may be better positioned going forward.

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Global and Non-U.S. Equities icon

Global & Non-U.S. Equities

Valuation looks appealing outside the U.S., particularly in emerging markets.

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The U.S. Disciplined Equity Team’s view as of 6/15/2017.

Global Fixed Income

Global Growth Is Modest as Fundamentals Improve

Developed Markets icon

Developed Markets

Stubbornly muted inflation means accommodative policies will continue.

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Emerging Markets icon

Emerging Markets

Fundamentals improve, but growth may remain level in second half.

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Currencies icon

Currencies

Delays in U.S. policy implementation driving currency fluctuations.

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The Fixed Income Team’s view as of 6/8/2017.

U.S. Fixed Income

Investor Demand for Yield Drives Spread Sector Gains

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Corporate Credit

Investment Grade & High-Yield Credit

Spreads grind tighter as demand for yield prevails.

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Securitized icon

Securitized

MBSCMBSABS & CMOs

Federal Reserve (FED) eyes balance sheet cuts.

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Government icon

Government

Treasuries, Agencies & TIPS

Falling breakeven rates boost relative value of TIPS.

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Municipals (Munis) icon

Municipals (Munis)

Investment-Grade & High-Yield

Demand remains robust as tax-related concerns fade.

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

Alternatives

Opportunities for Active Managers

Alternative Income

Demand for income-producing investments remains strong.

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Long/Short Equity & Equity Market Neutral

The low-volatility environment remains challenging though dispersion, correlation, and rate trends are positive.

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The AC Alternatives Team’s view as of 6/9/2017.

Multi-Asset Strategies

Macro Uncertainty; Micro Opportunity

Asset Class

We’re waiting for a clearer economic picture to emerge.

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Region

Global and non-U.S. conditions make a great case for active management, as excellent individual opportunities must be weighed against uncertain macro factors.

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Style & Capitalization

Our models prefer growth to value and large to small stocks.

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Bonds

Outlook for higher rates and inflation argues for credit-sensitive and inflation-protected bonds.

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Real Assets

Adding inflation protection; neutral on REITs rates.

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The Multi-Asset Strategies Team’s view as of 6/12/2017.

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

Investment Outlook Brochure

Third Quarter 2017

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Investment Outlook Presentation

Third Quarter 2017

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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.