Emerging Markets Inflection Points

American Century Investments’ Emerging Markets Transition strategy seeks to invest in companies positioned to benefit as the world transitions to more sustainable economic growth.

As we assess these opportunities, we keep five themes in mind that we deem essential to this growth. Key investment aspects of each theme include:

1. Sustainable Living: Minimizing waste (via design, packaging and recycling); sustainable production and agriculture; extending product lives; and the efficient use of natural resources.

2. Climate: Expanding low-/no-emission power; reducing industrial and household emissions; addressing biodiversity loss; water conservation/management; and mitigating physical asset risks.

3. Health Care: Developing innovative treatments; increasing access to medicine and health care services; improving medical equipment; and reducing health care costs.

4. Empowerment: Improving access to basic necessities, including education and mobility; human capital management; worker safety; and financial inclusion.

5. Technology Advancement: Increasing digital access (supports innovation across all themes); building and supporting reliable digital infrastructure; and controlling technology risks such as AI, cybersecurity and blockchain.

We believe companies whose products, services and innovation activities support one or more of these themes are likely to benefit from the transition to sustainable growth across sectors and geographies. This framework informs our sustainability research and helps assess an EM company’s opportunities to create value and enhance resilience by embracing the transition to sustainability.

Importantly, we believe companies can create value along different “improvement pathways” that reflect this transition. Opportunities are often greatest when a company’s sustainability efforts are in the early stages or haven’t yet been recognized.

We view these companies as being at an inflection point. With this in mind, we classify them as Sustainability Committers, Operational Improvers or Sustainability Enablers.

This issue of Emerging Markets Inflection Points features a company we believe fits all three categories.

CATL Case Study: How Sustainability Tech Has Helped Fuel Growth

CATL, the world’s leading supplier of lithium-ion batteries, is a compelling example of a company with a transition strategy that’s accelerating business growth.

The firm, which controls about 46% of China’s electric vehicle battery market, reported a 48.5% increase in net profit for the first quarter of 2026.¹ Numerous automakers use its batteries in their vehicles.

CATL has strengthened its margins and increased its resilience to regulation by investing in closed-loop recycling, lower-carbon cathode chemistries and other initiatives. We believe these efforts have improved the company’s environmental footprint and boosted efficiency.

CATL is also expanding its addressable market by continuing to push the frontiers of sustainable technology. Its innovations include the development of long-duration energy storage, faster-charging and next-generation battery platforms. This technology helps CATL compete for clients in grid storage, commercial vehicles and industrial applications.

As customers place more importance on lifecycle emissions and supply chain transparency, CATL’s capability to provide lower-carbon, recyclable battery solutions strengthens customer loyalty and improves prospects for long-term contracts.

Taken together, we think CATL’s transition strategy reinforces its moat in scale, technology and cost leadership.

Sustainability‑driven innovation not only reduces transition risks and ensures operational continuity but also accelerates penetration into structurally growing end markets. In our view, this might strengthen the investment case for durable earnings growth tied to global decarbonization trends.