American Century Equity Income InvTWEIX

Morningstar Rating

Fund Research and Analysis

by Gregg Wolper

Don't worry about American Century Equity Income's dismal ranking this year.

For the year to date through August 14, this fund lags about 90% of its peers in the large-value category. It's 7 percentage points behind the S&P 500 Index. However, there's no reason for concern. Read more

Kudos

Sound long-term record earned with below-average volatility.

Experienced management.

Moderate expenses.

Held up far better than most in 2007-09 bear market. Read more

Risks

Income focus and firm value leanings mean fund can lag when growth trends dominate.

Lackluster tax efficiency erodes long-term returns. Read more

Strategy

The managers employ an all-cap approach, focusing on stocks that are cheap based on at least two valuation measures, such as P/E or dividend yield. The fund's income mandate typically leads it to have relatively large stakes in dividend-rich utilities, energy, financials, and industrials. Read more

Management

Lead manager Phil Davidson has been at the helm since the fund's 1994 inception. Before that, he spent 11 years as a manager for Boatmen's Trust Co. Comanager Kevin Toney joined the management team in 2003 after serving as one of the fund's analysts. Read more

Inside Scoop

This is a value player that emphasizes dividend-paying stocks and also owns some convertible bonds. It has experienced, long-tenured management. Read more

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