In the third quarter of 2025, the American Century Value Fund experienced notable movements within its portfolio, reflecting strategic decisions based on market dynamics and company-specific performance. This period saw a significant uplift from certain holdings, while others were adjusted to optimize the fund’s overall value proposition and manage risk. The commentary offers a concise overview of the quarter's key events, shedding light on the contributors to its positive trajectory and the rationale behind its divestments, all aimed at fostering long-term growth and stability for its investors.
A primary driver of the fund's strong performance during this quarter was Teradyne. The company's shares witnessed a substantial increase, a direct response to its robust earnings report and an optimistic forecast for its artificial intelligence computing test division. This positive development underscores the growing importance of AI technology across various sectors and its impact on the semiconductor testing industry. Teradyne's strong results validated the fund's investment thesis, highlighting its strategic positioning within an expanding technological landscape.
During this same period, the fund strategically acquired a new stake in a prominent customer relationship management (CRM) software provider. This decision was underpinned by the company's commanding market share and its formidable competitive moat, which provides a significant barrier to entry for potential rivals. The investment reflects confidence in the company's ability to sustain its leadership position and generate consistent returns, leveraging the increasing demand for sophisticated CRM solutions in a digital-first economy.
Conversely, the fund decided to liquidate its holdings in nVent. This move was prompted by a substantial rally in nVent's stock, fueled by investor anticipation of increased demand from data centers. While the company's prospects appeared bright, its valuation ascended beyond what the fund managers deemed to be its intrinsic fair value. This divestment exemplifies a disciplined approach to portfolio management, prioritizing long-term value over short-term market exuberance and ensuring that holdings remain aligned with rigorous valuation criteria.
The third quarter of 2025 was characterized by selective adjustments and strategic investments that capitalized on market opportunities while adhering to a strict valuation discipline. The fund's ability to identify and respond to both positive developments, such as Teradyne's AI-driven growth, and overvalued situations, as seen with nVent, demonstrates its commitment to maximizing shareholder returns through active and informed portfolio management. The initiation of a position in a leading CRM software company further diversified the fund's holdings with a strong, competitively advantaged enterprise.
