American Century Investments Focused Dynamic Growth Fund released its second-quarter 2026 investor letter, detailing performance across market segments and highlighting specific holdings. The broader U.S. stock market advanced substantially during the quarter with double-digit gains, driven by strong earnings reports, resilient economic data, and momentum in artificial intelligence-related equities. Growth and AI stocks outperformed value stocks during this period, while large-cap companies generally exceeded small- and mid-cap performance. The fund’s investor class shares returned 16.38%, trailing slightly behind the Russell 1000 Growth Index’s 16.74% return.
Netflix emerged as a notable drag on fund performance during the quarter. The streaming entertainment platform’s share price closed at $76.03 per share on September 09, 2026, representing a market capitalization of $316.58 billion. The company experienced a one-month return of -2.82% and declined 36.83% over the preceding 52-week period. The fund attributed Netflix’s weakness to management’s second-quarter guidance falling short of investor expectations, investor apprehension surrounding elevated content spending, moderated growth projections, and uncertainty stemming from the departure of a significant executive.
Hedge fund interest in Netflix showed signs of moderating. The number of hedge fund portfolios holding Netflix declined to 121 at the end of the second quarter from 144 in the previous quarter, according to investment tracking data. Netflix ranked 13th on a list of 40 most popular stocks among hedge funds heading into 2026. Despite acknowledging Netflix’s investment merit, the fund commentary suggested that certain artificial intelligence stocks presented greater upside potential with comparatively reduced downside risk for investors seeking alternative opportunities in the sector.
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