Stay Ahead of Inflation
It may be time to take action. But how do you know you're making the right choices? Understanding how the stress of inflation affects you—and your investments—helps give you the power to make better decisions.
Assess the Risk
Inflation Means Your Money Will Buy Less in the Future
Counting on that $100,000 savings account? The loss of purchasing power from inflation can mean you need to withdraw more money than planned to cover the higher cost of living.
Here's how inflation guarantees your money will buy less in the future.
Inflation Shrinks Your Nest Egg—and Your Confidence
Even low inflation gradually eats away at your money. As our inflation calculator shows, at just 3%, a $100,000 investment will lose almost a quarter of its purchasing power over 10 years. At 6%, it could be cut in half.
See how inflation could affect your current portfolio.
Catch Up On Inflation Insights
For Advisors
Find tips to get the inflation conversation started.
How Does Inflation Affect the Markets—and Our Emotions?
Financial markets hate uncertainty. And inflation's rapid rise is an unknown dynamic. Specifically, people worry about the Federal Reserve's ability to control inflation without slowing economic growth too much.
It's also hard to decide which investments give you the best opportunity to keep your money growing ahead of inflation.
When uncertainty is high, the markets see large price swings. And these swings—better known as volatility—play into our emotions and decision-making.
Make Better Decisions
How Inflation Affects Investing
Are you your own worst enemy? Our perceptions and biases can lurk under the surface—preventing us from taking the right actions.
But there are steps you can take to make better decisions for your financial situation.
Overcoming Behavioral Biases in Investing
Certain behaviors can pop up during challenging times. Here's what to look for.
Recognizing Common Investor Biases
Do you see yourself in any of these examples? Get tips to overcome these behaviors.
Present Bias
Today's news and needs can pull your focus away from your long-term goals.
Action Bias
When under stress, you want to do something
Overconfidence
Be confident, but beware of blind spots. Consider other perspectives.
Availability Bias
Recent experiences color your outlook for the future—for better or worse.
Loss Aversion
You focus more on what you could lose instead of what you might gain.
Behavioral content Cass Sunstein ©2022 All Rights Reserved
Take Action
Look to Inflation-Hedging Investments
It’s a tricky balance. If you invest too aggressively on a short-time horizon, you risk losing money that you’ll need for the future. But if you invest too conservatively, your money may not grow enough. Finding the right balance is key to staying ahead of inflation.
What’s Your Goal?
Goal: Preserve Purchasing Power
Keeping more of your hard-earned money and avoiding the impacts of inflation, volatility and other risks are your main goals, especially the closer you are to retirement.
Sample allocation.
See It in Action
To support these goals, consider reallocating 25% of your core bond portfolio to inflation-adjusted bonds, such as American Century Inflation-Adjusted Bond Fund.
The sample allocation illustrated in the graphic shows that, over the past five years, a 75/25 blended portfolio:
• Improved performance by 58%.
• Held risk constant.
View Supporting Data
All data as of 6/30/2022.
Data reflects past performance, assumes reinvestment of dividends and capital gains and is no guarantee of future results. Current performance may be higher or lower than data shown. Investment return and principal value fluctuate. Redemption value may be more or less than original cost. Obtain performance data current to the most recent quarter-end.
For additional information, consult the prospectus.
Glossary Terms: Bloomberg U.S. Treasury Inflation Protected Securities (TIPS) Index, Standard Deviation
*The Core Bond investment category is represented by iShares Core US Aggregate Bond ETF (AGG). It is not intended to represent a specific investment. Following are daily closing prices as of the dates specified: 6/30/2012: $111.30; 6/30/2017: $109.51;6/30/2019: 111.35; 6/30/2021: $115.33.
A**: Seeks to provide total return and inflation protection consistent with investment in inflation-indexed securities.
B***: Tracks the investment results of an index composed of the total U.S. investment-grade bond market.
All funds and ETFs: Provide daily liquidity. Principal is not guaranteed.
The Morningstar Ratingâ„¢ for funds, or "star rating", is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product's monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The Morningstar Rating does not include any adjustment for sales loads. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10- year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods.
American Century Inflation-Adjusted Bond Fund | Investor Class
Seeks to provide total return and inflation protection consistent with investment in inflation-indexed securities.
Benefits
Designed to combat inflation, which can help purchasing power
Seeks to deliver returns with lower volatility
Actively managed by a veteran team dedicated to inflation protection
As of 6/30/2022.
Category: Inflation-Protected Bond. For each fund with at least a three-year history, Morningstar calculates a Morningstar Ratingâ„¢ based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a fund's monthly performance, placing more emphasis on downward variations and rewarding consistent performance.
Morningstar Ratings and Investment Style
The Morningstar Ratingâ„¢ for funds, or "star rating", is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product's monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The Morningstar Rating does not include any adjustment for sales loads. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10- year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods.
Additional Solutions for Your Consideration
American Century Short Duration Strategic Income Fund | Investor Class
Seeks to complement core bond holdings with high current income, broad diversification, and the potential to mitigate the impact of rising rates.
Benefits
Diversifies sources of income to seek attractive yield regardless of the interest rate environment
Features less interest rate risk than longer-duration fixed-income options
Emphasizes investment-grade issues in pursuit of lower potential volatility than high yield
As of 6/30/2022.
Category: Short-Term Bond. For each fund with at least a three-year history, Morningstar calculates a Morningstar Ratingâ„¢ based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a fund's monthly performance, placing more emphasis on downward variations and rewarding consistent performance.
Morningstar Ratings and Investment Style
The Morningstar Ratingâ„¢ for funds, or "star rating", is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product's monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The Morningstar Rating does not include any adjustment for sales loads. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10- year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods.
Goal: Income Generation
Income is your top priority. You're ready to accept some risk to outpace inflation while still meeting your need for a steady stream of income.
Sample allocation.
See It in Action
Shorter duration fixed-income investments have less sensitivity to rising interest rates, which are common during periods of heightened inflation. For example, you could consider allocating 25% of your core bond portfolio to short-duration fixed income funds, such as American Century Short-Duration Strategic Income Fund.
The sample allocation illustrated in the graphic shows that, over the past 10 years, a 75/25 blended portfolio:
• Increased income by about 8%.
• Reduced interest-rate sensitivity by 20%.
View Supporting Data
All data as of 6/30/2022.
Data reflects past performance, assumes reinvestment of dividends and capital gains and is no guarantee of future results. Current performance may be higher or lower than data shown. Investment return and principal value fluctuate. Redemption value may be more or less than original cost. Obtain performance data current to the most recent quarter-end.
For additional information, consult the prospectus.
Glossary Terms: Bloomberg U.S. 1-3 Year Government/Credit Bond Index, Average Effective Duration, 12 Month Yield, 30 Day SEC Yield
*The Core Bond investment category is represented by iShares Core US Aggregate Bond ETF (AGG). It is not intended to represent a specific investment. Following are daily closing prices as of the dates specified: 6/30/2012: $111.30; 6/30/2017: $109.51;6/30/2019: 111.35; 6/30/2021: $115.33.
A**: Seeks to provide total return and inflation protection consistent with investment in inflation-indexed securities.
B***: Tracks the investment results of an index composed of the total U.S. investment-grade bond market.
All funds and ETFs: Provide daily liquidity. Principal is not guaranteed.
American Century Short Duration Strategic Income Fund | Investor Class
Seeks to provide high current income, broad diversification, and the potential to mitigate the impact of rising interest rates.
Benefits
Diversifies sources of income to seek attractive yield regardless of the interest rate environment
Features less interest-rate risk than longer duration fixed-income options
Emphasizes investment-grade issues in pursuit of lower potential volatility than high yield
As of 6/30/2022. Category: Short-Term Bond. For each fund with at least a three-year history, Morningstar calculates a Morningstar Ratingâ„¢ based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a fund's monthly performance, placing more emphasis on downward variations and rewarding consistent performance.
Morningstar Ratings and Investment Style
The Morningstar Ratingâ„¢ for funds, or "star rating", is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product's monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The Morningstar Rating does not include any adjustment for sales loads. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10- year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods.
Additional Solutions for Your Consideration
American Century Inflation-Adjusted Bond Fund | Investor Class
Seeks to provide total return and inflation protection consistent with investment in inflation-indexed securities.
Benefits
Designed to combat inflation, which can help purchasing power
Seeks to deliver returns with lower volatility
Actively managed by a veteran team dedicated to inflation protection
As of 6/30/2022. Category: Inflation-Protected Bond. For each fund with at least a three-year history, Morningstar calculates a Morningstar Ratingâ„¢ based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a fund's monthly performance, placing more emphasis on downward variations and rewarding consistent performance.
Morningstar Ratings and Investment Style
The Morningstar Ratingâ„¢ for funds, or "star rating", is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product's monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The Morningstar Rating does not include any adjustment for sales loads. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10- year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods.
Goal: Investment Growth
You don't mind taking risks—so long as they’re the right kind. In addition to beating inflation, you're focusing on long-term growth.
Sample allocation.
See It in Action
You could consider a 20% allocation to a quality-oriented, large-cap stock fund that has the potential for faster-than-average earnings growth.
The sample allocation illustrated in the graphic shows that, over a 10-year period, an 80/20 mix of a global equity blended portfolio and a fund focused on accelerated earnings growth, such as American Century Ultra® Fund:
• Increased return by over 10% with a modest rise in risk.
• Delivered more than 98% outperformance against inflation (measured by Consumer Price Index (CPI)).
Supporting Data
Performance and statistics are as of 6/30/2022.
Data reflects past performance, assumes reinvestment of dividends and capital gains and is no guarantee of future results. Current performance may be higher or lower than data shown. Investment return and principal value fluctuate. Redemption value may be more or less than original cost. Obtain performance data current to the most recent quarter-end.
*Returns are based on 10-year annualized returns and risk (measured by standard deviation).
For additional information, consult the prospectus.
Glossary: Russell 1000 Growth Index, Standard Deviation
**Global Equity Blended Portfolio is comprised of 90% MSCI World Index, 10% Bloomberg US Aggregate Bond Index
Source: MSCI. Morgan Stanley Capital International (MSCI) makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used to create indices or financial products. This report is not approved or produced by MSCI. Source: Bloomberg Index Services Ltd
American Century Ultra® Fund | Investor Class
Seeks high growth by investing in large, industry-leading companies with both sustainable accelerating earnings growth and positive price momentum.
Benefits
Diversifies U.S. investors’ home-bias risk
Looks to deliver benchmark-beating performance by investing in companies with accelerated, sustainable growth
Focuses on company fundamentals first and then a country’s macroeconomic environment
As of 6/30/2022. Category: Large Growth. For each fund with at least a three-year history, Morningstar calculates a Morningstar Ratingâ„¢ based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a fund's monthly performance, placing more emphasis on downward variations and rewarding consistent performance.
Morningstar Ratings and Investment Style
The Morningstar Ratingâ„¢ for funds, or "star rating", is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product's monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The Morningstar Rating does not include any adjustment for sales loads. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10- year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods.
Additional Solutions for Your Consideration
American Century Mid Cap Value Fund | Investor Class
Seeks to deliver higher returns with lower volatility over time through investments in high-quality, mid-sized companies.
Benefits
Focuses on identifying companies with sound business characteristics currently selling at a discount.
Balances risk and return with a goal to deliver competitive returns with lower-than-average volatility than peers.
Enhances portfolio diversity, especially for those investors overweight in more aggressive growth holdings.
As of 6/30/2022. Morningstar Category: Mid-Cap Value. The Morningstar Ratingâ„¢ for funds, or star rating, is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history.
Morningstar Ratings and Investment Style
The Morningstar Ratingâ„¢ for funds, or "star rating", is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product's monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The Morningstar Rating does not include any adjustment for sales loads. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10- year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods.
General Disclosures
There is no guarantee that the investment objectives will be met.
Diversification does not assure a profit nor does it protect against loss of principal.
The information is not intended as a personalized recommendation or fiduciary advice and should not be relied upon for, investment, accounting, legal or tax advice.
Fixed Income Disclosures
The value and/or returns of a portfolio will fluctuate with market and economic conditions.
Investments in fixed income securities are subject to the risks associated with debt securities including credit, price and interest rate risk.
Generally, as interest rates rise, the value of the securities held in the fund will decline. The opposite is true when interest rates decline.
The lower rated securities in which the fund invests are subject to greater credit risk, default risk and liquidity risk.
Credit risk is the risk that an obligation won't be paid and a loss will result. Generally, a lower credit rating indicates a greater risk of non-payment. Liquidity risk is the risk that the fund will have difficulty selling its debt securities.
Inflation-Adjusted Bond Fund
In certain interest rate environments, such as when real interest rates are rising faster than nominal interest rates, inflation-protected securities with similar durations may experience greater losses than other fixed income securities. Interest payments on inflation-protected debt securities will fluctuate as the principal and/or interest is adjusted for inflation and can be unpredictable.
iShares Core US Aggregate Bond ETF (AGG)
ETFs are baskets of securities that trade like stocks on an exchange and can be bought or sold throughout the trading day at fluctuating market prices (not NAV). Shares may trade at a premium or discount to NAV in the secondary market. Brokerage commissions will reduce returns. Like mutual funds, ETFs also have expense ratios. In general, actively managed ETFs cost more than passively managed index ETFs. Unlike mutual funds, it is possible to buy ETFs on margin and sell them short. ETFs held in a taxable account may result in less tax liabilities than similarly invested mutual fund the same account. Different companies offer ETFs. iShares are distributed by BlackRock Investments, LLC (together with its affiliates, BlackRock). All rights reserved. iShares and BLACKROCK are registered trademarks of BlackRock.
Ultra Fund
The fund is subject to potentially greater short-term price volatility than that associated with an average stock fund.
Inflation-Adjusted Bond Fund
Morningstar Rating - Investor Class
Morningstar Category - Inflation Protected | Overall | 3 Year | 5 Year | 10 year |
|---|---|---|---|---|
Ratings |
|
|
|
|
# of Funds | 198 | 198 | 185 | 125 |
Short Duration Strategic Income Fund
Morningstar Rating - Investor Class
Morningstar Category - Short-Term Bond | Overall | 3 Year | 5 Year | 10 Year |
|---|---|---|---|---|
Ratings |
|
|
| - |
# of Funds | 547 | 547 | 488 | - |
Ultra{sup}®{/sup} Fund
Morningstar Rating - Investor Class
Morningstar Category - Large Growth | Overall | 3 Year | 5 Year | 10 Year |
|---|---|---|---|---|
Ratings |
|
|
|
|
# of Funds | 1,138 | 1,138 | 1,052 | 787 |
Mid Cap Value Fund
Morningstar Rating - Investor Class
Morningstar Category - Mid-Cap Value | Overall | 3 Year | 5 Year | 10 Year |
|---|---|---|---|---|
Ratings |
|
|
|
|
# of Funds | 391 | 391 | 361 | 268 |
ALL DATA AS OF 6/30/2022. SOURCE: MORNINGSTAR.
The Morningstar Ratingâ„¢ for funds, or "star rating", is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product's monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The Morningstar Rating does not include any adjustment for sales loads. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10- year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods.