In the initial quarter of 2026, the American Century Emerging Markets Fund experienced significant volatility, influenced by widespread investor apprehension regarding artificial intelligence risks, private credit issues, and geopolitical events. Despite these challenges, the fund's strategy of investing in fundamentally strong companies with improving financial metrics, whose share prices do not yet fully reflect their intrinsic value, remains consistent. A key factor impacting performance was the shift in market sentiment towards companies exclusively focused on artificial intelligence, which negatively affected holdings like Tencent.

A notable position within the portfolio is Ganfeng Lithium, recognized as China's leading producer of lithium compounds. Its vertically integrated supply chain is strategically positioned to capitalize on the increasing global demand for lithium and the robust expansion of the electric vehicle market. The fund's selective investment approach, focusing on businesses poised for growth and resilience amidst changing market dynamics, underscores its commitment to long-term value creation.

The current investment landscape, characterized by rapid technological advancements and evolving geopolitical tensions, presents both opportunities and complexities. By meticulously selecting companies with sound financials and strong market positioning, the American Century Emerging Markets Fund aims to navigate these uncertainties. The emphasis on long-term potential over short-term fluctuations allows for strategic adjustments that align with global economic trends and emerging industry leaders. This forward-looking perspective is crucial for sustained growth and capital appreciation in dynamic emerging markets.