Summary

• American Century Inflation-Adjusted Bond Fund’s overweight exposure relative to the benchmark to inflation protection contributed to relative results.
• Management extended the American Century Inflation-Adjusted Bond Fund’s inflation duration before the war, aiding results in March as soaring oil prices sent inflation expectations higher.
• Allocations to securitized credit securities, held in conjunction with short-maturity inflation swaps, were notable contributors to American Century Inflation-Adjusted Bond Fund results.
• Management increased the American Century Inflation-Adjusted Bond Fund’s allocation to swaps when valuations appeared attractive versus TIPS, leading to modest negative effects from carry.
• Management expects the economy to improve from late 2025, but higher energy prices may offset some positive effects from fiscal stimulus.

Market Review

Bonds were down fractionally. U. S. investment-grade bonds declined slightly in the first quarter, breaking their four-quarter string of gains. The volatile period included renewed tariff concerns, a Federal Reserve (Fed) policy pause, mixed economic data, war in Iran and soaring oil

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