American Century Investments is a leading asset management firm that offers a variety of mutual funds and ETFs to investors. Despite recent market volatility sparked by COVID-19, American Century has maintained its commitment to provide stable dividend income to investors. With expertise across major asset classes and a disciplined investment approach, American Century funds can provide much-needed income and risk management in uncertain times. Investing in dividend stocks and funds allows investors to gain equity exposure while getting paid. American Century’s dividend-focused products merit consideration for investors looking to balance total return and income generation.
American Century funds continue dividend payouts amidst market stress
The COVID-19 crisis has put significant strain on corporate cash flows, leading many S&P 500 companies to cut or suspend dividends. However, American Century funds have largely maintained dividend payouts across their equity and fixed income product line. For example, the American Century Dividend Growth Fund (ticker: TWEIX) recently made its latest quarterly dividend distribution in June 2020. The fund invests in stocks with improving fundamentals and the ability to grow dividends over time. Year-to-date, TWEIX has paid out $0.19 per share in dividends, providing investors with steady income during heightened market volatility. The American Century Mid Cap Value Fund (ticker: ACMVX) also consistently distributes dividends quarterly based on the dividends received from its portfolio holdings. From technology stocks like Texas Instruments to consumer staples leaders like Johnson & Johnson, American Century’s equity income funds provide exposure to dividend payers across sectors.
Focus on dividend growth supports income sustainability
A key facet of American Century’s dividend investing approach is the emphasis on dividend growth over high yield. By focusing on companies with stable earnings growth and the ability to grow dividends over time, American Century’s funds avoid reliance on high-yielding stocks that may not have sustainable payouts. The American Century Dividend Growth Fund has almost 60% allocation to stocks with 10+ years of dividend growth, demonstrating a commitment to consistent income providers. American Century screens for companies with durable competitive advantages, strong management teams, and disciplined capital allocation policies – attributes that support growing dividends. The firm’s long tenured team and deep bench of analysts enables thorough understanding of portfolio company fundamentals and dividend potential.
Broad diversification manages risk amid uncertainty
While dividend stocks tend to be less volatile than the overall equity market, focused income strategies still carry risk. American Century’s dividend funds maintain broadly diversified portfolios to manage risk in the current climate of heightened uncertainty. The American Century Dividend Growth Fund holds over 100 stocks spread across sectors, while the American Century Mid Cap Value Fund provides a basket of over 200 mid cap names. Diversification minimizes the impact of individual company risks and dividend cuts on the overall portfolio. Fixed income funds like the American Century Short Duration Strategic Income Fund (ticker: APSHX) invest across government, corporate, and securitized bonds to generate income and provide further diversification. Blending equity and fixed income income generators allows investors to build resilient portfolios to weather overlapping risks.
Long-term orientation aligns with dividend investing goals
Generating safe income for retirement requires a patient, long-term focus. American Century’s managers leverage the firm’s independent ownership structure to maintain perspective and ignore short-term market noise. During periods of extreme volatility like the COVID crisis, the managers avoid rash moves and remain committed to their long-term dividend growth approach. American Century also engages in shareholder advocacy and proxy voting to promote governance policies that support sustainable dividends over time. Ultimately, the firm’s long investment horizon and rigorous fundamental analysis seeks to identify dividend payers that can continue growing income through all market environments.
With a steady income stream and lower volatility, dividend funds can anchor investor portfolios in uncertain markets. American Century offers durable income solutions backed by fundamental research and diversification.