ck0000757928-20230930
February 1,
2024
American
Century Investments
Prospectus
Zero Coupon 2025
Fund
Investor
Class (BTTRX)
Advisor
Class (ACTVX)
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The
Securities and Exchange Commission has
not approved or disapproved
these securities or
passed upon the adequacy of this prospectus.
Any
representation to the contrary is a criminal offense. |
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©2024
American Century Proprietary Holdings, Inc. All rights reserved.
The
fund seeks the highest return consistent with investment in U.S. Treasury
securities.
The
following table describes the fees and expenses you may pay if you buy, hold,
and sell shares of the fund. You may pay other fees, such as brokerage
commissions and other fees to financial intermediaries, which are not reflected
in the tables and example below.
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Shareholder
Fees
(fees paid directly from your investment) |
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Investor |
Advisor |
Maximum
Annual Account Maintenance Fee
(waived if eligible investments total at
least $10,000) |
$25 |
None |
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Annual
Fund Operating Expenses (expenses
that you pay each year as a percentage of the value of your
investment) |
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| Investor |
Advisor |
| Management
Fee |
0.54% |
0.54% |
| Distribution
and Service (12b-1) Fees |
None |
0.25% |
| Other
Expenses |
0.01% |
0.01% |
| Total
Annual Fund Operating Expenses |
0.55% |
0.80% |
Example
The example below is intended to help you compare the costs of
investing in the fund with the costs of investing in other mutual
funds. The example assumes that you invest
$10,000 in the fund for the time periods indicated and then redeem all of your
shares at the end of those periods, that you earn a 5% return each year, and
that the fund’s operating expenses remain the same. Although your actual costs
may be higher or lower, based on these assumptions your costs would
be:
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| 1
year |
3
years |
5
years |
10
years |
| Investor
Class |
$56 |
$177 |
$308 |
$690 |
| Advisor
Class |
$82 |
$256 |
$445 |
$990 |
Portfolio
Turnover
The
fund pays transaction costs, such as commissions, when it buys and sells
securities (or “turns over” its portfolio). A higher portfolio turnover rate may
indicate higher transaction costs and may result in higher taxes when fund
shares are held in a taxable account. These costs, which are not reflected in
annual fund operating expenses or in the example, affect the fund’s performance.
During the most recent fiscal year, the fund’s portfolio turnover rate was
7% of the average
value of its portfolio.
Under normal
circumstances, the fund will invest at least 80% of the value of its net assets
in zero-coupon securities. Typically, other than during the
fund’s target maturity year, the fund intends to exceed this 80% requirement and
be fully invested in zero-coupon securities.
The
fund invests primarily in zero-coupon U.S. Treasury securities and their
equivalents (including certain zero-coupon U.S. government agency securities),
and may invest up to 20% of its assets in other zero-coupon U.S. government
agency securities that are AAA-rated. Zero-coupon securities make no periodic
interest or principal payments. Instead, they trade at a deep discount to their
face value and all of the interest and principal is paid when the securities
mature.
The
fund is managed to mature in the year 2025 and will be liquidated near the end
of its target maturity year. If shares of the fund are held until the fund is
liquidated and all distributions are reinvested, the fund’s performance should
be similar to an investment in a zero-coupon U.S. Treasury security with the
same term to maturity as the fund. The advisor expects that shareholders who
hold their shares until the fund is liquidated and reinvest all distributions
will realize an investment return and maturity value that do not differ
significantly from the anticipated
growth rate
(AGR) and anticipated
value at maturity
(AVM) calculated on the day the shares were purchased.
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The
fund’s
anticipated
growth rate
is
an estimate of the annualized rate of growth of the fund that an investor
may expect from the purchase date to the fund’s weighted average maturity
date. |
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The
anticipated
value at maturity
is
an estimate of the fund’s net asset value as of the fund’s weighted
average maturity date. It is based on the maturity values of the
zero-coupon securities held by the fund. |
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As
of the fund’s most recent fiscal year end, September 30, 2023, the fund’s
Investor Class AGR was 4.64% and its AVM was $116.09. The AGR and AVM for the
Advisor Class will differ from that of the Investor Class, depending on the
expenses of that class.
When
determining whether to buy or sell a security, the portfolio managers consider,
among other things, the fund’s average maturity, current and anticipated changes
in interest rates, current valuation relative to alternatives in the market,
general market conditions and any other factors deemed relevant by the portfolio
managers.
Securities
issued or guaranteed by the U.S. Treasury and certain U.S. government agencies
or instrumentalities are supported by the full faith and credit of the U.S.
government. Zero-coupon U.S. government agency securities that are ultimately
backed by securities or payment obligations of the U.S. Treasury and are
considered by the market to be of comparable credit quality, such as Resolution
Funding Corporation (REFCORP) bonds, are considered to be zero-coupon U.S.
Treasury equivalents by the fund’s managers. Securities issued or guaranteed by
other U.S. government agencies or instrumentalities, such as the Federal
National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage
Corporation (Freddie Mac), and the Federal Home Loan Bank, are not guaranteed by
the U.S. Treasury or supported by the full faith and credit of the U.S.
government. However, these agencies or instrumentalities are authorized to
borrow from the U.S. Treasury to meet their
obligations.
•Interest
Rate Risk – Investments in debt securities are sensitive to interest rate
changes and zero coupon securities are more sensitive to interest rate changes
than traditional coupon-bearing securities. Generally, when interest rates rise,
the fund’s share value will decline. The opposite is true when interest rates
decline. Funds with longer weighted average maturities are more sensitive to
interest rate changes. A period of rising interest rates may negatively affect
the fund’s performance. Additionally, in extreme low interest rate environments,
the fund’s expenses may exceed the yields on the securities in which the fund
invests, resulting in a negative anticipated growth rate (AGR). You may lose
money as a result of holding fund shares with a negative AGR.
•Unanticipated
Capital Gains or Losses – When
shareholders redeem their shares before the target maturity date, the fund may
need to liquidate holdings to meet these redemptions and unanticipated capital
gains or losses may result. The fund will distribute these capital gains or
losses to all shareholders.
•Zero-Coupon
U.S. Treasury Correlation – Although
the fund’s investment policies are designed to provide an investment that is
similar to investing in a zero-coupon U.S. Treasury security that matures in the
year 2025, a precise forecast of the fund’s final maturity value and yield to
maturity is not possible.
•Market
Risk – The
value of the securities owned by the fund may go up and down, sometimes rapidly
or unpredictably. Market risks, including political, regulatory, economic and
social developments, can affect the value of the fund’s investments. Natural
disasters, public health emergencies, terrorism and other unforeseeable events
may lead to increased market volatility and may have adverse long-term effects
on world economics and markets generally.
•Principal
Loss – At
any given time your shares may be worth less than the price you paid for them.
In other words, it is possible to lose money by investing in the
fund.
An
investment in the fund is not a bank deposit, and it is not insured or
guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other
government agency.
The following
bar chart and table provide some indication of the risks of investing in the
fund. The bar chart shows changes in the fund’s performance from year to year
for Investor Class shares. The table shows how the fund’s average annual returns
for the periods shown compared with those of a broad measure of market
performance. The table also shows results for a
U.S. Treasury zero-coupon security (STRIPS Issue) with a maturity date similar
to the fund. The fund’s past performance
(before and after taxes) is not necessarily an indication of how the fund will
perform in the future. For current performance information,
including yields, please visit americancentury.com.
Sales
charges and account fees, if applicable, are not reflected in the bar chart. If
those charges were included, returns would be less than those
shown.
Calendar Year Total
Returns
Highest Performance
Quarter (1Q
2020): 6.49%
Lowest Performance Quarter
(4Q 2016):
-6.90%
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Average
Annual Total Returns
For
the calendar year ended December 31, 2023 |
1
year |
5
years |
10
years |
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Investor
Class Return
Before Taxes |
3.46% |
1.64% |
3.07% |
| Return After
Taxes on Distributions |
1.76% |
0.17% |
1.57% |
| Return After
Taxes on Distributions and Sale of Fund Shares |
2.00% |
0.67% |
1.75% |
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Advisor
Class Return
Before Taxes |
3.19% |
1.38% |
2.81% |
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11/15/2025 STRIPS Issue
(reflects no deduction for
fees, expenses or taxes)
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4.02% |
2.04% |
3.47% |
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Bloomberg
U.S. 1-5 Year Treasury
(reflects no deduction for
fees, expenses or taxes) |
4.37% |
1.18% |
1.12% |
The
after-tax returns are shown only for Investor Class shares. After-tax returns
for other share classes will vary. After-tax
returns are calculated using the historical highest individual federal marginal
income tax rates and do not reflect the impact of state and local
taxes. Actual after-tax returns
depend on an investor’s tax situation and may differ from those shown. After-tax
returns are not relevant to investors who hold their fund shares through
tax-deferred arrangements, such as 401(k) plans or
IRAs.
Investment
Advisor
American
Century Investment Management, Inc.
Portfolio
Managers
Robert
V. Gahagan,
Senior Vice President and Senior Portfolio Manager, has served on teams managing
fixed-income investments for American Century Investments since joining the
advisor in 1983.
James
E. Platz,
CFA, Vice President and Portfolio Manager, has served on teams managing
fixed-income investments for American Century Investments since joining the
advisor in 2003.
Miguel
Castillo,
Vice President and Portfolio Manager, has served on teams managing fixed-income
investments for American Century Investments since joining the advisor in
2008.
You
may purchase or redeem shares of the fund on any business day through our
website at americancentury.com, in person (at one of our Investor Centers), by
mail (American Century Investments, P.O. Box 419200, Kansas City, MO
64141-6200), by telephone at 1-800-345-2021 (Investor Services Representative)
or 1-800-345-3533 (Business, Not-For-Profit and Employer-Sponsored Retirement
Plans), or through a financial intermediary. Shares may be purchased and
redemption proceeds received by electronic bank transfer, by check or by
wire.
Unless
otherwise specified below, the minimum initial investment amount to open an
account is $2,500 ($1,000 for Coverdell Education Savings Accounts and IRAs).
However, American Century Investments will waive the fund minimum if you make an
initial investment of at least $500 and continue to make automatic investments
of at least $100 a month until reaching the fund minimum. Investors opening
accounts through financial intermediaries may open an account with $250 for all
classes, but the financial intermediaries may require their clients to meet
different investment minimums. The minimum may be waived for broker-dealer
sponsored wrap program accounts, fee-based accounts, and accounts through
bank/trust and wealth management advisory organizations.
For
all share classes, there is no minimum initial investment amount for certain
employer-sponsored retirement plans, however, financial intermediaries or plan
recordkeepers may require plans to meet different minimums.
There
is a $50 minimum for subsequent purchases, except that there is no subsequent
purchase minimum for financial intermediaries or employer-sponsored retirement
plans.
Fund
distributions are generally taxable as ordinary income or capital gains, unless
you are investing through a tax-deferred account such as a 401(k) or individual
retirement account (in which case you may be taxed upon withdrawal of your
investment from such account).
If
you purchase the fund through a broker-dealer or other financial intermediary
(such as a bank, insurance company, plan sponsor or financial professional), the
fund and its related companies may pay the intermediary for the sale of fund
shares and related services. These payments may create a conflict of interest by
influencing the broker-dealer or other intermediary and your salesperson to
recommend the fund over another investment. Ask your salesperson or visit your
financial intermediary’s website for more information.
Zero
Coupon 2025 Fund
What
are the fund’s investment objectives?
The
fund seeks the highest return consistent with investment in U.S. Treasury
securities.
What
are the fund’s principal investment strategies?
Under
normal circumstances, the fund will invest at least 80% of the value of its net
assets in zero-coupon securities. Typically, other than during the fund’s target
maturity year, the fund intends to exceed this 80% requirement and be fully
invested in zero-coupon securities. The fund may change this 80% policy only
upon 60 days prior written notice to shareholders.
The
fund invests primarily in zero-coupon U.S. Treasury securities and their
equivalents, and may invest up to 20% of its assets in AAA-rated zero-coupon
U.S. government agency securities. The fund is designed to provide an investment
experience that is similar to a direct investment in a zero-coupon U.S. Treasury
security.
A
description of the policies and procedures with respect to the disclosure of the
fund’s portfolio securities is available in the statement of additional
information.
In
the event of adverse market, economic, political, or other conditions, the fund
may take temporary defensive positions that are inconsistent with its principal
investment strategy. To the extent the fund assumes a defensive position, it may
not achieve its investment objective.
What
are zero-coupon securities?
Zero-coupon
securities make no periodic interest or principal payments. Instead, they trade
at a deep discount to their face value and all of the interest and principal is
paid when the securities mature. Some zero-coupon securities are created by
separating the interest and principal payment obligations of a traditional
coupon-bearing bond. Each payment obligation becomes a separate zero-coupon
security. Zero-coupon U.S. Treasury and U.S. government agency securities are
created by financial institutions (such as broker-dealers), the U.S. Treasury
and other agencies of the federal government. The U.S. Treasury and other
agencies of the federal government may also issue zero-coupon securities
directly.
Zero-coupon
U.S. Treasury securities (Treasury zeros) are created by separating a Treasury
bond’s interest and principal payment obligations. The important characteristic
of Treasury zeros is that payment of the final maturity value is an obligation
of the U.S. Treasury and is backed by the full faith and credit of the U.S.
government.
Zero-coupon
U.S. government agency securities (agency zeros) operate in all respects like
Treasury zeros, except that they are created by separating the interest and
principal payment obligations of bonds issued by the agency. Unlike Treasury
zeros, payment of the final maturity value is the obligation of the issuing
agency. If the agency zeros are ultimately backed by securities or payment
obligations of the U.S. Treasury and are generally considered by the market to
be of comparable credit quality, the manager considers them Treasury zero
equivalents. Resolution Funding Corporation (REFCORP) bonds are an example of
such securities. Otherwise, the manager will limit purchases of agency zeros to
those that receive the highest rating (AAA) by an independent rating
organization and will further limit such investments to 20% of a fund’s assets.
Examples include securities issued by the Federal National Mortgage Association
(Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac) and the
Financing Corporation (FICO). The funds’ credit quality restrictions apply at
the time of purchase; a fund will not necessarily sell securities if they are
downgraded by a rating agency.
Zero-coupon
securities are beneficial for investors who wish to invest for a fixed period of
time at a selected rate. When an investor purchases a traditional coupon-bearing
bond, it is paid periodic interest at a predetermined rate. This interest
payment must be reinvested elsewhere. However, the investor may not be able to
reinvest this interest payment in an investment that has a return similar to a
traditional coupon-bearing bond. This is called reinvestment risk. Because
zero-coupon securities do not pay interest periodically, investors in
zero-coupon securities are not exposed to reinvestment risk.
How
is an investment in the fund like an investment in zero-coupon U.S. Treasury
securities?
The
investment performance of the fund is designed to be similar to an investment in
zero-coupon U.S. Treasury securities. If you invest in the fund, reinvest all
distributions and hold your shares until the fund is liquidated, your investment
experience should be similar to that of an investment in a zero-coupon U.S.
Treasury security with the same term to maturity as the fund. The fund is
managed to provide an investment return that will not differ substantially from
the anticipated
growth rate
(AGR) calculated on the day the shares were purchased. The fund also is managed
to provide maturity value that will not differ substantially from the
anticipated
value at maturity
(AVM) calculated on the day the shares were purchased.
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A
fund’s
anticipated
growth rate
is
an estimate of the annualized rate of growth of the fund that an investor
may expect from the purchase date to the fund’s weighted average maturity
date. |
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The
anticipated
value at maturity
is
an estimate of a fund’s net asset value as of the fund’s weighted average
maturity date. It is based on the maturity values of the zero-coupon
securities held by the fund. |
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The
advisor calculates the fund’s AGR and AVM every business day. AGR and AVM
calculations assume, among other factors, that the fund’s operating expenses (as
a percentage of the fund’s assets) and composition of securities held by the
fund remain constant for the life of the fund. While many factors can influence
each fund’s daily AGR and AVM, they tend to fluctuate within narrow ranges. The
following table shows how the fund’s AVM for the Investor Class has fluctuated
in the last five years. The AVM for the Advisor Class of the fund will differ
from that of the Investor Class, depending on the expenses of that
class.
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| Anticipated
Values at Maturity |
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| 9/30/2019 |
9/30/2020 |
9/30/2021 |
9/30/2022 |
9/30/2023 |
| Zero
Coupon 2025 |
$116.22 |
$116.15 |
$116.11 |
$116.14 |
$116.09 |
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This
table is designed to show the narrow ranges in which the fund’s AVM varies
over time. There is no guarantee that a fund’s AVM will fluctuate as
little in the future. |
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What
happens when the fund reaches its maturity year?
•The
portfolio managers may begin buying traditional coupon-bearing securities
consistent with the fund’s investment objective and strategy.
•As
the fund’s zero-coupon securities mature, the proceeds from the retirement of
these securities may be invested in zeros, traditional coupon-bearing debt
securities and cash equivalent securities.
•The
fund will be liquidated near the end of its maturity year.
What
are the principal risks of investing in the fund?
Investments
in debt securities are sensitive to interest rate changes.Funds with longer
weighted average maturities are generally more sensitive to interest rate
changes. When interest rates rise, the fund’s share value will decline, but the
share values of funds with longer weighted average maturities generally will
decline further. A period of rising interest rates may negatively affect the
fund’s performance.
Zero-coupon
securities are more sensitive to interest rate changes than traditional
coupon-bearing securities. Additionally, in extreme low interest rate
environments, the fund’s expenses may exceed the yields on the securities in
which the fund invests, resulting in a negative anticipated growth rate (AGR).
You may lose money as a result of holding fund shares with a negative
AGR.
While
we recommend that shareholders hold their investment in the fund until the fund
is liquidated, we do not restrict your (or any other shareholders) ability to
redeem shares. When the fund’s shareholders redeem their shares before the
target maturity year, the fund may need to liquidate holdings to meet these
redemptions and unanticipated capital gains or losses may result. The fund will
distribute these capital gains and losses to all shareholders.
The
portfolio managers adhere to investment policies that are designed to provide an
investment that is similar to investing in a zero-coupon U.S. Treasury security
that matures in the year identified in the fund’s name. However, an investment
in the fund involves different risks. A precise forecast of the fund’s final
maturity value and yield to maturity is not possible.
The
fund may need to sell securities at times it would not otherwise do so in order
to meet shareholder redemption requests. The fund could experience a loss when
selling securities, particularly if the redemption requests are unusually large
or frequent, occur in times of overall market turmoil or declining pricing for
the securities sold or when the securities the fund wishes to sell are illiquid.
Selling securities to meet such redemption requests also may increase
transaction costs or have tax consequences. To the extent that a large
shareholder (including a fund of funds or 529 college savings plan) invests in
the fund, the fund may experience relatively large redemptions as such
shareholder reallocates its assets. Although the advisor seeks to minimize the
impact of such transactions where possible, the fund’s performance may be
adversely affected.
The
value of the securities owned by the fund may go up and down, sometimes rapidly
or unpredictably, due to factors affecting securities markets generally,
particular industries, real or perceived adverse economic conditions or investor
sentiment generally.
Market
risks, including political, regulatory, economic and social developments, can
affect the value of the fund’s investments. Natural disasters, public health
emergencies, terrorism and other unforeseeable events may lead to increased
market volatility and may have adverse long-term effects on world economies and
markets generally.
At
any given time your shares may be worth less than the price you paid for them.
In other words, it is possible to lose money by investing in the
fund.
Who
manages the fund?
The
Board of Trustees, investment advisor and fund management team play key roles in
the management of the fund.
The
Board of Trustees
The
Board of Trustees is responsible for overseeing the advisor’s management and
operations of the fund pursuant to the management agreement. In performing their
duties, Board members receive detailed information about the fund and its
advisor regularly throughout the year, and meet at least quarterly with
management of the advisor to review reports about fund operations. The trustees’
role is to provide oversight and not to provide day-to-day management. More than
three-fourths of the trustees are independent of the fund’s advisor. They are
not employees, directors or officers of, and have no financial interest in the
advisor or any of its affiliated companies (other than as shareholders of
American Century Investments funds), and they do not have any other
affiliations, positions or relationships that would cause them to be considered
“interested persons” under the Investment Company Act of 1940.
The
Investment Advisor
The
fund’s investment advisor is American Century Investment Management, Inc. (the
advisor). The advisor has been managing mutual funds since 1958 and is
headquartered at 4500 Main Street, Kansas City, Missouri 64111.
The
advisor is responsible for managing the investment portfolios of the fund and
directing the purchase and sale of its investment securities. The advisor also
arranges for transfer agency, custody and all other services necessary for the
fund to operate.
For
the services it provides to the fund, the advisor receives a unified management
fee based on a percentage of the daily net assets of each class of shares of the
fund. The management fee is calculated daily and paid monthly in arrears. Out of
the fund’s fee, the advisor pays all expenses of managing and operating the fund
except brokerage expenses, taxes, interest, fees and expenses of the independent
trustees (including legal counsel fees), extraordinary expenses, and expenses
incurred in connection with the provision of shareholder services and
distribution services under a plan adopted pursuant to Rule 12b-1 under the
Investment Company Act of 1940. The advisor may pay unaffiliated third parties
who provide recordkeeping and administrative services that would otherwise be
performed by an affiliate of the advisor.
The
percentage rate used to calculate the management fee for each class of shares of
the fund is determined daily using a two-component formula that takes into
account (i) the daily net assets of certain accounts managed by the advisor that
are in the same broad investment category as the fund (the Category Fee) and
(ii) the assets of all funds in the American Century Investments family of funds
that have the same investment advisor and distributor as the fund (the Complex
Fee). For purposes of determining the Category Fee and Complex Fee, the assets
of funds managed by the advisor that invest exclusively in the shares of other
funds (fund of funds) are not included. The statement of additional information
contains detailed information about the calculation of the management
fee.
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Management
Fees Paid by the Funds to the Advisor as a Percentage
of Average Net
Assets for the Most Recent Fiscal Year Ended September 30, 2023 |
Investor
Class |
Advisor
Class |
| Zero
Coupon 2025 |
0.54% |
0.54% |
A
discussion regarding the basis for the Board of Trustees’ approval of the fund’s
investment advisory agreement with the advisor is available in the fund’s annual
report to shareholders dated September 30, 2023.
The
Fund Management Team
The
advisor uses teams of portfolio managers and analysts, organized by broad
investment categories such as money markets, corporate bonds, government bonds
and municipal bonds, in its management of fixed-income funds. Designated
portfolio managers serve on the firm’s Global Fixed Income Investment Committee,
which is responsible for periodically adjusting the fund’s dynamic investment
parameters based on economic and market conditions. All portfolio managers
listed below are responsible for security selection and portfolio construction
for the fund within these parameters, as well as compliance with stated
investment objectives and cash flow monitoring. Other members of the investment
team provide research and analytical support but generally do not make
day-to-day investment decisions for the fund.
The
individuals listed below are jointly and primarily responsible for the
day-to-day management of the fund described in this prospectus.
Robert
V. Gahagan (Global Fixed Income Investment Committee
Representative)
Mr.
Gahagan, Senior Vice President and Senior Portfolio Manager, has served on teams
managing fixed-income investments since joining the advisor in 1983. He has a
bachelor’s degree in economics and an MBA from the University of Missouri –
Kansas City.
James
E. Platz
Mr.
Platz, Vice President and Portfolio Manager, has served on teams managing
fixed-income investments since joining the advisor in 2003. He received a
bachelor’s degree in history and political economies of industrial societies
from the University of California – Berkeley, and an MBA from the University of
Southern California. He is a CFA charterholder.
Miguel
Castillo
Mr.
Castillo, Vice President and Portfolio Manager, has served on teams managing
fixed-income investments since joining the advisor in 2008 as a senior fixed
income trader. He was promoted to portfolio manager in 2014. He has a bachelor’s
degree in banking and finance from Escuela Bancaria Y Comercial, Mexico City,
and an MBA from the University of Minnesota.
The
statement of additional information provides additional information about the
accounts managed by the portfolio managers, the structure of their compensation,
and their ownership of fund securities.
Fundamental
Investment Policies
Shareholders
must approve any change to the fundamental investment policies contained in the
statement of additional information, as well as any change to the investment
objectives of the fund. The Board of Trustees and/or the advisor may change any
other policies or investment strategies described in this prospectus or
otherwise used in the operation of the fund at any time, subject to applicable
notice provisions.
Services
Automatically Available to You
Most
accounts automatically have access to the services listed under Ways
to Manage Your Account
when the account is opened. If you have questions about the services that apply
to your account type, please call us.
Generally,
once your account is established, any registered owner (including those on
jointly owned accounts) or any trustee (including those on trust accounts with
multiple trustees), or any authorized signer on business accounts with multiple
authorized signers, may transact business by any of the methods described below.
American Century reserves the right to require all owners or trustees or
authorized signers to act together, at our discretion.
Account
Maintenance Fee
If
you hold Investor Class shares of any American Century Investments mutual fund,
or I Class shares of the American Century Diversified Bond Fund, in an American
Century Investments account (i.e., not through a financial intermediary or
employer-sponsored retirement plan account), we may charge you a $25 annual
account maintenance fee if the value of those shares is less than $10,000. We
will determine the amount of your total eligible investments once per year,
generally the last Friday in October. If the value of those investments is less
than $10,000 at that time, we will automatically redeem shares in one of your
accounts to pay the $25 fee as soon as administratively possible. Please note
that you may incur tax liability as a result of the redemption. In determining
your total eligible investment amount, we will include your investments in all
personal
accounts
(including American Century Investments Brokerage accounts) registered under
your Social Security number.
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Personal
accounts
include
individual accounts, joint accounts, UGMA/UTMA accounts, personal trusts,
Coverdell Education Savings Accounts, IRAs (including traditional, Roth,
Rollover, SEP-, SARSEP- and SIMPLE-IRAs), and certain other retirement
accounts. If you have only business, business retirement,
employer-sponsored or American Century Investments Brokerage accounts, you
are currently not subject to this fee, but you may be subject to other
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Wire
Purchases
Current
Investors:
If you would like to make a wire purchase into an existing account, your bank
will need the following information. (To invest in a new fund, please call us
first to set up the new account.)
•American
Century Investments bank information: Commerce Bank N.A., Routing No. 101000019,
Account No. 2804918
•Your
American Century Investments account number and fund name
•Your
name
•The
contribution year (for IRAs only)
•Dollar
amount
New
Investors:
To make a wire purchase into a new account, please complete an application or
call us prior to wiring money.
Ways
to Manage Your Account
ONLINE
americancentury.com
Open
an account:
If you are a current or new investor, you can open an account by completing and
submitting our online application. Current investors also can open an account by
exchanging shares from another American Century Investments account with an
identical registration.
Exchange
shares:
Exchange shares from another American Century Investments account with an
identical registration.
Make
additional investments:
Make an additional investment into an established American Century Investments
account. If we do not have your bank information, you can add it.
Sell
shares*:
Redeem shares and choose whether the proceeds are electronically transferred to
your authorized bank account or sent by check to your address of
record.
*
Online redemptions up to $25,000 per day per account.
IN
PERSON
If
you prefer to handle your transactions in person, visit one of our Investor
Centers and a representative can help you open an account, make additional
investments, and sell or exchange shares.
•4400
Main Street, Kansas City, MO — 8 a.m. to 5 p.m., Monday –
Friday
•4917
Town Center Drive, Leawood, KS — 8 a.m. to 5 p.m., Monday –
Friday
BY
TELEPHONE
Investor
Services Representative:
1-800-345-2021
Business,
Not-For-Profit and Employer-Sponsored Retirement Plans:
1-800-345-3533
Automated
Information Line:
1-800-345-8765
Open
an account:
If you are a current investor, you can open an account by exchanging shares from
another American Century Investments account with an identical
registration.
Exchange
shares:
Call or use our Automated Information Line (available only to Investor Class
shareholders).
Make
additional investments:
Call or use our Automated Information Line if you have authorized us to invest
from your bank account. The Automated Information Line is available only to
Investor Class shareholders.
Sell
shares:
Call or use our Automated Information Line. The Automated Information Line
redemptions are up to $25,000 per day per account and are available for Investor
Class shareholders only.
BY
MAIL OR FAX
Mail
Address:
P.O. Box 419200, Kansas City, MO 64141-6200 — Fax:
1-888-327-1998
Open
an account:
Send a signed, completed application and check or money order payable to
American Century Investments.
Exchange
shares:
Send written instructions to exchange your shares from one American Century
Investments account to another with an identical registration.
Make
additional investments:
Send your check or money order for at least $50 with an investment slip. If you
don’t have an investment slip, include your name, address and account number on
your check or money order.
Sell
shares:
Send written instructions or a redemption form to sell shares. Call a Service
Representative to request a form.
AUTOMATICALLY
Open
an account:
Not available.
Exchange
shares:
Send written instructions to set up an automatic exchange of your shares from
one American Century Investments account to another with an identical
registration.
Make
additional investments:
With the automatic investment service, you can purchase shares on a regular
basis. You must invest at least $50 per month per account.
Sell
shares:
You may sell shares automatically by establishing a systematic redemption
plan.
See
Additional
Policies Affecting Your Investment
for more information about investing with us.
The
fund may be purchased by participants in employer-sponsored retirement plans or
through financial
intermediaries
that provide various administrative and distribution services.
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Financial
intermediaries
include
banks, broker-dealers, insurance companies, plan sponsors and financial
professionals. |
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Although
each class of the fund’s shares represents an interest in the same fund, each
has a different cost structure, as described below. Which class is right for you
depends on many factors, including how long you plan to hold the shares, how
much you plan to invest, the fee structure of each class, and how you wish to
compensate your financial professional for the services provided to you. Your
financial professional can help you choose the option that is most
appropriate.
Investor
Class
Investor
Class shares are available for purchase without sales charges or commissions but
may be subject to account or transaction fees if purchased through financial
intermediaries. These shares are available to investors in retail brokerage
accounts, broker-dealer-sponsored fee-based advisory accounts, other advisory
accounts where fees are charged, and employer-sponsored retirement
plans.
Advisor
Class
Advisor
Class shares are available for purchase through broker-dealers and other
financial intermediaries without sales charges or commissions but carry an
ongoing distribution and service (12b-1) fee.
Employer-Sponsored
Retirement Plans
Certain
group employer-sponsored retirement plans that hold a single account for all
plan participants with the fund, or that are part of a retirement plan or
platform offered by banks, broker-dealers, financial advisors or insurance
companies, or serviced by retirement recordkeepers are eligible to purchase
Investor and Advisor Class shares. For more information regarding
employer-sponsored retirement plan types, please refer to Buying
and Selling Fund Shares
in the statement of additional information. Advisor Class shares purchased in
employer-sponsored retirement plans are subject to applicable distribution and
service (12b-1) fees, which the financial intermediary begins receiving
immediately at the time of purchase. American Century does not impose minimum
initial investment amount, plan size or participant number requirement by class
for employer-sponsored retirement plans, however, financial intermediaries or
plan recordkeepers may require plans to meet different
requirements.
Moving
Between Share Classes and Accounts
You
may move your investment between share classes (within the same fund or between
different funds) in certain circumstances deemed appropriate by American Century
Investments. You also may move investments held in certain accounts to a
different type of account if you meet certain criteria. Please contact your
financial professional for more information about moving between share classes
or account types.
Buying
and Selling Shares Through a Financial Intermediary
Your
ability to purchase, exchange, redeem and transfer shares will be affected by
the policies of the financial intermediary through which you do business. Some
policy differences may include
•minimum
investment requirements
•exchange
policies
•fund
choices
•cutoff
time for investments
•trading
restrictions
In
addition, your financial intermediary may charge a transaction fee for the
purchase or sale of fund shares. Those charges are retained by the financial
intermediary and are not shared with American Century Investments or the fund.
Please contact your financial intermediary or plan sponsor for a complete
description of its policies. Copies of the fund’s annual report, semiannual
report and statement of additional information are available from your financial
intermediary or plan sponsor.
The
fund has authorized certain financial intermediaries to accept orders on the
fund’s behalf. American Century Investments has selling agreements with these
financial intermediaries requiring them to track the time investment orders are
received and to comply with procedures relating to the transmission of orders.
Orders must be received by the financial intermediary on the fund’s behalf
before the time the net asset value is determined in order to receive that day’s
share price. If those orders are transmitted to American Century Investments and
paid for in accordance with the selling agreement, they will be priced at the
net asset value next determined after your request is received in the form
required by the financial intermediary.
If
you submit a transaction request through a financial intermediary that does not
have a selling agreement with us, or if the financial intermediary’s selling
agreement does not cover the type of account or share class requested, we may
reject or cancel the transaction without prior notice to you or the
intermediary.
Investor
Class shares may also be available on brokerage platforms of financial
intermediaries that have agreements with American Century Investments to offer
such shares solely when acting as an agent for the shareholder. A shareholder
transacting in Investor Class shares in these programs may be required to pay a
commission and/or other forms of compensation to the broker. Shares of the fund
may be available in other share classes that have different fees and
expenses.
See
Additional
Policies Affecting Your Investment
for more information about investing with us.
Eligibility
for Investor Class Shares
The
fund’s Investor Class shares are available for purchase directly from American
Century Investments and through the following types of products, programs or
accounts offered by financial intermediaries:
•self-directed
accounts on transaction-based platforms that may or may not charge a transaction
fee
•employer-sponsored
retirement plans
•broker-dealer
sponsored fee-based wrap programs or other fee-based advisory
accounts
•insurance
products and bank/trust products where fees are being charged
The
fund reserves the right, when in the judgment of American Century Investments it
is not adverse to the fund’s interest, to permit all or only certain types of
investors to open new accounts in the fund, to impose further restrictions, or
to close the fund to any additional investments, all without
notice.
Minimum
Initial Investment Amounts
Unless
otherwise specified below, the minimum initial investment amount to open an
account is $2,500. However, American Century Investments will waive the fund
minimum if you make an initial investment of at least $500 and continue to make
automatic investments of at least $100 a month until reaching the fund minimum.
Investors opening accounts through financial intermediaries may open an account
with $250, but the financial intermediaries may require their clients to meet
different investment minimums. See Investing
Through a Financial Intermediary
for more information.
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| Broker-dealer
sponsored wrap program accounts and/or fee-based advisory
accounts |
No
minimum |
| Coverdell
Education Savings Account and IRAs |
$1,0001,2 |
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Employer-sponsored
retirement plans |
No
minimum |
1 American
Century Investments will waive the minimum if you make an initial investment of
at least $500 and continue to make automatic investments of at least $100 a
month until reaching the minimum.
2 The
minimum initial investment for shareholders investing through financial
intermediaries is $250. Financial intermediaries may have different minimums for
their clients.
Subsequent
Purchases
There
is a $50 minimum for subsequent purchases. See Ways
to Manage Your Account
for more information about making additional investments directly with American
Century Investments. However, there is no subsequent purchase minimum for
financial intermediaries or employer-sponsored retirement plans, but financial
intermediaries may require their clients to meet different subsequent purchase
requirements.
Redemptions
Your
redemption proceeds will be calculated using the net asset value (NAV) next
determined after we receive your transaction request in good order.
Generally,
we expect to remit your redemption proceeds to you one business day after we
process your transaction. However, we reserve the right to delay delivery of
redemption proceeds up to seven days. For example, each time you make an
investment with American Century Investments, there is a seven-day holding
period before we will release redemption proceeds from those shares, unless you
provide us with satisfactory proof that your purchase funds have cleared.
Investments by wire generally require only a one-day holding period. If you
change your address, we may require that any redemption request made within
seven days be submitted in writing and be signed by all authorized signers with
their signatures guaranteed. We may also require a signature guarantee for
redemptions in other situations, as described below. If you change your bank
information, we may impose a seven-day holding period before we will transfer or
wire redemption proceeds to your bank. Please remember, if you request
redemptions by wire, $10 will be deducted from the amount redeemed. Your bank
also may charge a fee.
Additionally,
if you are age 65 or older, or if we have reason to believe you have a mental or
physical impairment that renders you unable to protect your own interest, we may
temporarily delay the disbursement of redemption proceeds from your account if
we believe that you have been the victim of actual or attempted financial
exploitation. This temporary delay will be for an initial period of no more than
15 business days while we conduct an internal review of the facts and
circumstances of the suspected financial exploitation. If our internal review
supports our belief that actual or attempted financial exploitation has occurred
or is occurring, we may extend the hold for up to 10 additional business days.
At the expiration of the additional hold time, if we have not confirmed that
exploitation has occurred, the proceeds will be released to you.
Under
normal market conditions, the fund generally meets redemption requests through
its holdings of cash or cash equivalents or by selling portfolio securities.
However, we reserve the right to honor certain redemptions with securities,
rather than cash, as described
in
the next section. Additionally, the fund may consider interfund lending to meet
redemption requests. The fund is more likely to use these other methods to meet
large redemption requests or during times of market stress.
Special
Requirements for Large Redemptions
If,
during any 90-day period, you redeem fund shares worth more than $250,000 (or 1%
of the value of a fund’s assets if that amount is less than $250,000), we
reserve the right to pay part or all of the redemption proceeds in excess of
this amount in readily marketable securities instead of in cash. To the extent
practicable, these securities will represent your pro rata share of the fund’s
securities.
We
will value these securities in the same manner as we do in computing the fund’s
net asset value. We may provide these securities in lieu of cash without prior
notice. Also, if payment is made in securities, you may have to pay brokerage or
other transaction costs to convert the securities to cash. These securities
remain subject to market risk until sold, and you may incur capital gains and/or
losses when you sell the securities.
If
your redemption would exceed this limit and you would like to avoid being paid
in securities, please provide us with an unconditional instruction to redeem at
least 15 days prior to the date on which the redemption transaction is to occur.
The instruction must specify the dollar amount or number of shares to be
redeemed and the date of the transaction. This minimizes the effect of the
redemption on a fund and its remaining investors.
Redemption
of Shares in Accounts Below Minimum
If
your account balance falls below the minimum initial investment amount for any
reason, or if you cancel your automatic monthly investment plan prior to
reaching the fund minimum, American Century Investments reserves the right to
redeem the shares in the account and send the proceeds to your address of
record. Prior to doing so, we will notify you and give you 60 days to meet the
minimum or reinstate your automatic monthly investment plan. Please note that
you may incur tax liability as a result of the redemption.
Small
Distributions and Uncashed Distribution Checks
Generally,
dividends and distributions cannot be paid by check for an amount less than $50.
Any such amount will be automatically reinvested in additional shares. The fund
reserves the right to reinvest any dividend or distribution amount you elect to
receive by check if your check is returned as undeliverable or if you do not
cash your check within six months. Interest will not accrue on the amount of
your uncashed check. We will reinvest your check into your account at the NAV on
the day of reinvestment. When reinvested, those amounts are subject to the risk
of loss like any other fund investment. We also reserve the right to change your
election to receive dividends and distributions in cash after a check is
returned undeliverable or uncashed for the six month period, and we may
automatically reinvest all future dividends and distributions at the NAV on the
date of the payment.
Signature
Guarantees
A
signature guarantee — which is different from a notarized signature — is a
warranty that the signature presented is genuine. We may require a signature
guarantee for the following transactions.
•Your
redemption or distribution check or automatic redemption is made payable to
someone other than the account owners;
•Your
redemption proceeds or distribution amount is sent by EFT (ACH or wire) to a
destination other than your personal bank account;
•You
are transferring ownership of an account over $100,000;
•You
change your address and request a redemption over $100,000 within seven
days;
•You
request proceeds from redemptions, dividends, or distributions be sent to an
address or financial institution differing from those on record; or
•You
make a redemption or other transaction request via telephone, and we are unable
to verify your identity.
We
reserve the right to require a signature guarantee for other transactions, or we
may employ other security measures, such as signature comparison or notarized
signature, at our discretion.
Canceling
a Transaction
American
Century Investments will use its best efforts to honor your request to revoke a
transaction instruction if your revocation request is received prior to the
close of trading on the New York Stock Exchange (NYSE) (generally 4 p.m. Eastern
time) on the trade date of the transaction. Once processing has begun, or the
NYSE has closed on the trade date, the transaction can no longer be canceled.
The fund reserves the right to suspend the offering of shares for a period of
time and to reject any specific investment (including a purchase by exchange).
Additionally, we may refuse a purchase if, in our judgment, it is of a size that
would disrupt the management of a fund.
Frequent
Trading Practices
Frequent
trading and other abusive trading practices may disrupt portfolio management
strategies and harm fund performance. If the cumulative amount of frequent
trading activity is significant relative to a fund’s net assets, the fund may
incur trading costs that are higher than necessary as securities are first
purchased then quickly sold to meet the redemption request. In such case, the
fund’s
performance
could be negatively impacted by the increased trading costs created by frequent
trading if the additional trading costs are significant.
Because
of the potentially harmful effects of abusive trading practices, the fund’s
Board of Trustees has approved American Century Investments’ abusive trading
policies and procedures, which are designed to reduce the frequency and effect
of these activities in our funds. These policies and procedures include
monitoring trading activity, imposing trading restrictions on certain accounts,
and using fair value pricing when current market prices are not readily
available. Although these efforts are designed to discourage abusive trading
practices, they cannot eliminate the possibility that such activity will occur.
American Century Investments seeks to exercise its judgment in implementing
these tools to the best of its ability in a manner that it believes is
consistent with shareholder interests.
American
Century Investments uses a variety of techniques to monitor for and detect
frequent trading practices. These techniques may vary depending on the type of
fund, the class of shares or whether the shares are held directly or indirectly
with American Century Investments. They may change from time to time as
determined by American Century Investments in its sole discretion. To minimize
harm to the funds and their shareholders, we reserve the right to reject any
purchase order (including exchanges) from any shareholder we believe has a
history of frequent trading or whose trading, in our judgment, has been or may
be disruptive to the funds. In making this judgment, we may consider trading
done in multiple accounts under common ownership or control.
Currently,
for shares held directly with American Century Investments, we may deem the sale
of all or a substantial portion of a shareholder’s purchase of fund shares to be
frequent trading if the sale is made:
•within
seven days of the purchase; or
•within
30 days of the purchase, if it happens more than once per year.
To
the extent practicable, we try to use the same approach for defining frequent
trading for shares held through financial intermediaries. American Century
Investments reserves the right, in its sole discretion, to identify other
trading practices as abusive and to modify its monitoring and other practices as
necessary to deal with novel or unique abusive trading practices.
The
frequent trading limitations do not apply to the following types of
transactions:
•purchases
of shares through reinvested distributions (dividends and capital
gains);
•redemption
of shares to pay fund or account fees;
•CheckWriting
redemptions;
•redemptions
requested following the death of a registered shareholder;
•transactions
through automatic purchase or redemption plans;
•transfers
and re-registrations of shares within the same fund;
•shares
exchanged from one share class to another within the same fund;
•transactions
by 529 college savings plans and funds of funds (however shareholders of
American Century’s funds of funds are subject to the limitations);
and
•reallocation
or rebalancing transactions in broker-dealer sponsored fee-based wrap and
advisory programs.
For
shares held in employer-sponsored retirement plans, generally only
participant-directed exchange transactions are subject to the frequent trading
restrictions. For this purpose, employer-sponsored retirement plans do not
include SEP IRAs, SIMPLE IRAs, or SARSEPs.
In
addition, American Century Investments reserves the right to accept purchases
and exchanges in excess of the trading restrictions discussed above if it
believes that such transactions would not be inconsistent with the best
interests of fund shareholders or this policy.
American
Century Investments’ policies do not permit us to enter into arrangements with
fund shareholders that permit such shareholders to engage in frequent purchases
and redemptions of fund shares. Due to the complexity and subjectivity involved
in identifying abusive trading activity and the volume of shareholder
transactions American Century Investments handles, there can be no assurance
that American Century Investments’ efforts will identify all trades or trading
practices that may be considered abusive. American Century Investments monitors
aggregate trades placed in omnibus accounts and works with financial
intermediaries to identify shareholders engaging in abusive trading practices
and impose restrictions to discourage such practices. Because American Century
Investments relies on financial intermediaries to provide information and impose
restrictions, our ability to monitor and discourage abusive trading practices in
omnibus accounts may be dependent upon the intermediaries’ timely performance of
such duties and restrictions may not be applied uniformly in all
cases.
Your
Responsibility for Unauthorized Transactions
American
Century Investments and its affiliated companies use procedures reasonably
designed to confirm that telephone, electronic and other instructions are
genuine. These procedures include recording telephone calls, requesting
additional identifying information, requiring personalized security codes or
other information online, and sending confirmation of transactions. If we follow
these procedures, we are not responsible for any losses that may occur due to
unauthorized instructions. For transactions conducted over the
Internet,
we recommend the use of a secure Internet browser. In addition, you should
verify the accuracy of your confirmation statements immediately after you
receive them.
A
Note About Mailings to Shareholders
To
reduce the amount of mail you receive from us, we generally deliver a single
copy of fund documents (like shareholder reports, proxies and prospectuses) to
investors who share an address, even if their accounts are registered under
different names. Investors who share an address, may also receive
account-specific documents (like statements) in a single envelope. If you prefer
to receive your documents addressed individually, please call us or your
financial professional. For American Century Investments Brokerage accounts,
please call 1-888-345-2071.
Right
to Change Policies
We
reserve the right to change any stated investment requirement, including those
that relate to purchases, exchanges and redemptions. In accordance with
applicable law, we also may alter, add or discontinue any service or privilege.
Changes may affect all investors or only those in certain classes or groups. In
addition, from time to time we may waive a policy on a case-by-case basis, as
the advisor deems appropriate.
Share
Price
American
Century Investments will price the fund shares you purchase, exchange or redeem
based on the net
asset value
(NAV) next determined after your order is received in good order by the fund’s
transfer agent, or other financial intermediary with the authority to accept
orders on the fund’s behalf. We determine the NAV of each fund as of the close
of regular trading (usually 4 p.m. Eastern time) on the New York Stock Exchange
(NYSE) on each day the NYSE is open. On days when the NYSE is closed (including
certain U.S. national holidays), we do not calculate the NAV.
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The
net
asset value,
or
NAV, of each class of the fund is the current value of the class’s assets,
minus any liabilities, divided by the number of shares of the class
outstanding. |
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Readily
available market quotations for fixed income securities shall generally be
received from independent pricing services that have been approved by the Board.
It is anticipated that such pricing services will generally provide evaluated
prices based on accepted industry conventions. Evaluated prices are commonly
derived through utilization of market models. Such models take into
consideration various market factors and security characteristics. These may
include, but are not limited to, the following: trade data, quotations from
broker-dealers and active market makers, relevant yield curve and spread data,
related sector levels, creditworthiness, trade data or market information on
comparable securities and other relevant security specific information. Debt
obligations with 60 days or less remaining until maturity may be valued at
amortized cost.
If
the fund determines that the market price for a portfolio security is not
readily available or that the valuation methods mentioned above do not reflect
the security’s fair value, such security is valued as determined in good faith
by the fund’s board or its designee, in accordance with procedures adopted by
the fund’s board. Circumstances that may cause the fund to use alternate
procedures to value a security include, but are not limited to, a debt security
has been declared in default or trading in a security has been halted during the
trading day.
If
such circumstances occur, the fund will fair value the security if the fair
valuation would materially impact the fund’s NAV. While fair value
determinations involve judgments that are inherently subjective, these
determinations are made in good faith in accordance with procedures adopted by
the fund’s board.
The
effect of using fair value determinations is that the fund’s NAV will be based,
to some degree, on security valuations that the board or its designee believes
are fair rather than being solely determined by the market.
With
respect to any portion of the fund’s assets that are invested in one or more
open-end management investment companies that are registered with the SEC (known
as registered investment companies), the fund’s NAV will be calculated based
upon the NAVs of such registered investment companies. These registered
investment companies are required by law to explain the circumstances under
which they will use fair value pricing and the effects of using fair value
pricing in their prospectuses.
Distributions
Federal
tax laws require the fund to make distributions to its shareholders in order to
qualify as a regulated investment company. Qualification as a regulated
investment company means that a fund should not be subject to state or federal
income tax on amounts distributed. The distributions generally consist of
dividends and interest received by a fund, as well as capital
gains
realized by a fund on the sale of its investment securities. The fund generally
pays distributions from net income and capital gains, if any, once a year in
December. The fund may make more frequent distributions, if necessary, to comply
with Internal Revenue Code provisions.
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Capital
gains
are
increases in the values of capital assets, such as stocks or bonds, from
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You
will participate in fund distributions when they are declared, starting the next
business day after your purchase is effective. For example, if you purchase
shares on a day that a distribution is declared, you will not receive that
distribution. If you redeem shares, you will receive any distribution declared
on the day you redeem. If you redeem all shares, we will include any
distributions received with your redemption proceeds.
Generally,
participants in tax-deferred retirement plans reinvest all distributions. For
investors investing through taxable accounts, we will reinvest distributions
unless you elect to have dividends and/or capital gains sent to another American
Century Investments account, to your bank electronically, or to your home
address or to another person or address by check.
Reverse
Share Splits
When
the fund pays its distributions, the board also declares a reverse share split
for the fund that exactly offsets the per-share amount of the distribution. If
you reinvest your dividends, this reverse share split means that you will hold
exactly the same number of shares after a dividend as you did before. This
reverse share split makes changes in the fund’s share prices behave like changes
in the values of zero-coupon securities.
Fund
Liquidation
During
the fund’s target maturity year, the Board of Trustees will adopt a plan of
liquidation that specifies the last day investors can open a new account, the
last day the fund will accept new investments from existing investors, and the
liquidation date of the fund. During the fund’s target maturity year, you will
be asked how you want to receive the proceeds from the liquidation of your
shares. You can choose one of the following:
•cash;
or
•shares
of another American Century Investments mutual fund.
Some
of the tax consequences of owning shares of the fund will vary depending on
whether you own them through a taxable or tax-deferred account. Distributions by
the fund of dividend and interest income, capital gains and other income it has
generated through its investment activities will generally be taxable to
shareholders who hold shares in a taxable account. Tax consequences also may
result when investors sell fund shares after the net asset value has increased
or decreased.
Tax-Deferred
Accounts
If
you purchase fund shares through a tax-deferred account, such as an IRA or
employer-sponsored retirement or savings plan, income and capital gains
distributions usually will not be subject to current taxation but will
accumulate in your account under the plan on a tax-deferred basis. Likewise,
moving from one fund to another fund within a plan or tax-deferred account
generally will not cause you to be taxed. For information about the tax
consequences of making purchases or withdrawals through a tax-deferred account,
please consult your plan administrator, your summary plan description or a tax
advisor.
Taxable
Accounts
If
you own fund shares through a taxable account, you may be taxed on your
investments if the fund makes distributions or if you sell your fund
shares.
Taxability
of Distributions
Fund
distributions may consist of income, such as dividends and interest earned by a
fund from its investments, or capital gains generated by a fund from the sale of
its investment securities. Distributions of income are taxed as ordinary income,
unless they are designated as qualified
dividend income
and you meet a minimum required holding period with respect to your shares of
the fund, in which case distributions of income are taxed at the same rates as
long-term capital gains. The fund does not expect a significant portion of its
distributions to be derived from qualified dividend income.
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Qualified
dividend income
is
a dividend received by a fund from the stock of a domestic or qualifying
foreign corporation, provided that the fund has held the stock for a
required holding period and the stock was not on loan at the time of the
dividend. |
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The
tax character of any distributions from capital gains is determined by how long
the fund held the underlying security that was sold, not by how long you have
been invested in the fund or whether you reinvest your distributions or take
them in cash. Short-term (one year or less) capital gains are taxable as
ordinary income. Gains on securities held for more than one year are taxed at
the lower rates applicable to long-term capital gains.
If
a fund’s distributions exceed current and accumulated earnings and profits, such
excess will generally be considered a return of capital. A return of capital
distribution is generally not subject to tax, but will reduce your cost basis in
the fund and result in higher realized capital gains (or lower realized capital
losses) upon the sale of fund shares.
For
taxable accounts, American Century Investments or your financial intermediary
will inform you of the tax character of fund distributions for each calendar
year in an annual tax mailing.
If
you meet specified income levels, you will also be subject to a 3.8% Medicare
contribution tax which is imposed on net investment income, including interest,
dividends and capital gains. Distributions also may be subject to state and
local taxes. Because everyone’s tax situation is unique, you may want to consult
your tax professional about federal, state and local tax
consequences.
Taxes
on Transactions
Your
redemptions—including exchanges to other American Century Investments mutual
funds—are subject to capital gains tax. Short-term capital gains are gains on
fund shares you held for 12 months or less. Long-term capital gains are gains on
fund shares you held for more than 12 months. If your shares decrease in value,
their sale or exchange will result in a long-term or short-term capital loss.
However, you should note that loss realized upon the sale or exchange of shares
held for six months or less will be treated as a long-term capital loss to the
extent of any distribution of long-term capital gain to you with respect to
those shares. If a loss is realized on the redemption of fund shares, the
reinvestment in additional fund shares within 30 days before or after the
redemption may be subject to the wash sale rules of the Internal Revenue Code.
This may result in a postponement of the recognition of such loss for federal
income tax purposes.
If
you have not certified to us that your Social Security number or tax
identification number is correct and that you are not subject to withholding, we
are required to withhold and pay to the IRS the applicable federal withholding
tax rate on taxable dividends, capital gains distributions and redemption
proceeds.
Buying
a Dividend
Purchasing
fund shares in a taxable account shortly before a distribution is sometimes
known as buying a dividend. In taxable accounts, you must pay income taxes on
the distribution whether you reinvest the distribution or take it in cash. In
addition, you will have to pay taxes on the distribution whether the value of
your investment decreased, increased or remained the same after you bought the
fund shares.
The
risk in buying a dividend is that the fund’s portfolio may build up taxable
income and gains throughout the period covered by a distribution, as income is
earned and securities are sold at a profit. The fund distributes the income and
gains to you, after subtracting any losses, even if you did not own the shares
when the income was earned or the gains occurred.
If
you buy a dividend, you incur the full tax liability of the distribution period,
but you may not enjoy the full benefit of the income earned or the gains
realized in the fund’s portfolio.
The
fund offers multiple classes of shares. The classes have different fees,
expenses, eligibility requirements and/or minimum investment requirements.
Different fees and expenses will affect performance.
Except
as described below, all classes of shares of the fund have identical voting,
dividend, liquidation and other rights, preferences, terms and conditions. The
only differences between the classes are (a) each class may be subject to
different expenses specific to that class; (b) each class has a different
identifying designation or name; (c) each class has exclusive voting rights with
respect to matters solely affecting such class; and (d) each class may have
different exchange privileges.
Service,
Distribution and Administrative Fees
Investment
Company Act Rule 12b-1 permits mutual funds that adopt a written plan to pay
certain expenses associated with the distribution of their shares out of fund
assets. The Advisor Class offered by this prospectus has a 12b-1 plan. Under the
Advisor Class Plan, the fund’s Advisor Class pays the distributor an annual fee
of 0.25% of Advisor Class average net assets for distribution and individual
shareholder services, including past distribution services. The distributor pays
all or a portion of such fees to the financial intermediaries that make Advisor
Class shares available. Because these fees may be used to pay for services that
are not related to prospective sales of the fund, the Advisor Class will
continue to make payments under its plan even if it is closed to new investors.
Because these fees are paid out of the fund’s assets on an ongoing basis, over
time these fees will increase the cost of your investment and may cost you more
than paying other types of sales charges. For additional information about the
plan and its terms, see Multiple
Class Structure
in the statement of additional information.
Certain
financial intermediaries perform recordkeeping and administrative services for
their clients that would otherwise be performed by American Century Investments’
transfer agent. In some circumstances, the advisor will pay such service
providers a fee for performing those services. Also, the advisor and the fund’s
distributor may make payments to intermediaries for various additional services,
other expenses and/or the intermediaries’ distribution of the fund out of their
profits or other available sources. Such payments may be made for one or more of
the following: (1) distribution, which may include expenses incurred by
intermediaries for their sales activities with respect to the fund, such as
preparing, printing and distributing sales literature and advertising materials
and compensating registered representatives or other employees of such financial
intermediaries for their sales activities, as well as the opportunity for the
fund to be made available by such intermediaries; (2) shareholder services, such
as providing individual and custom investment advisory services to clients of
the financial intermediaries; and (3) marketing and promotional services,
including business planning assistance, educating personnel about the fund, and
sponsorship of sales meetings, which may include covering costs of providing
speakers, meals and other entertainment. The distributor may pay partnership
and/or sponsorship fees to support seminars, conferences, and other programs
designed to educate intermediaries about the fund and may cover the expenses
associated with attendance at such meetings, including travel costs. The
distributor also may pay fees related to obtaining data regarding intermediary
or financial advisor activities to assist American Century Investments with
sales reporting, business intelligence, and training and education
opportunities. These payments and activities are intended to provide an
incentive to intermediaries to sell the fund by educating them about the fund
and helping defray the costs associated with offering the fund. These payments
may create a conflict of interest by influencing the intermediary to recommend
the fund over another investment. Ask your salesperson or visit your financial
intermediary’s website for more information. The amount of any payments
described by this paragraph is determined by the advisor or the distributor, and
all such amounts are paid out of their available assets, and not paid by you or
the fund. As a result, the total expense ratio of the fund will not be affected
by any such payments.
Understanding
the Financial Highlights
The
table on the next page itemizes what contributed to the changes in share price
during the most recently ended fiscal year. It also shows the changes in share
price for this period in comparison to changes over the last five fiscal
years.
On
a per-share basis, the table includes as appropriate
•share
price at the beginning of the period
•investment
income and capital gains or losses
•distributions
of income and capital gains paid to investors
•reverse
share split
•share
price at the end of the period
The
table also includes some key statistics for the period as
appropriate
•Total
Return –
the overall percentage of return of the fund, assuming the reinvestment of all
distributions
•Expense
Ratio –
the operating expenses of the fund as a percentage of average net
assets
•Net
Income Ratio –
the net investment income of the fund as a percentage of average net
assets
•Portfolio
Turnover –
the percentage of the fund’s investment portfolio that is replaced during the
period
The
Financial Highlights that follow for the fiscal year ended September 30, 2023
have been audited by Deloitte & Touche LLP. The Report of Independent
Registered Public Accounting Firm and the financial statements and financial
highlights are included in the fund’s annual report, which is available upon
request.
Zero
Coupon 2025 Fund
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| For
a Share Outstanding Throughout the Years Ended September 30 (except as
noted) |
| Per-Share
Data |
Ratios
and Supplemental Data |
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| Income
From Investment Operations*: |
Distributions
From: |
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to Average Net Assets of: |
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| Net
Asset
Value,
Beginning
of Period |
Net
Investment
Income
(Loss)(1) |
Net
Realized
and
Unrealized
Gain (Loss) |
Total
From
Investment
Operations |
Net
Investment
Income |
Net
Realized
Gains |
Total
Distributions |
Reverse
Share
Split |
Net
Asset
Value,
End
of Period |
Total
Return(2) |
Operating
Expenses |
Net
Investment
Income
(Loss) |
Portfolio
Turnover
Rate |
Net
Assets,
End of
Period
(in
thousands) |
| Investor
Class |
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| 2023 |
$103.40 |
4.20 |
(2.32) |
1.88 |
(3.61) |
— |
(3.61) |
3.61 |
$105.28 |
1.83% |
0.55% |
3.99% |
7% |
$171,527 |
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| 2022 |
$113.92 |
3.81 |
(14.33) |
(10.52) |
(3.34) |
(0.36) |
(3.70) |
3.70 |
$103.40 |
(9.24)% |
0.54% |
3.50% |
10% |
$138,654 |
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| 2021 |
$116.13 |
3.40 |
(5.61) |
(2.21) |
(3.03) |
(1.42) |
(4.45) |
4.45 |
$113.92 |
(1.91)% |
0.54% |
2.96% |
13% |
$150,321 |
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| 2020 |
$107.31 |
3.78 |
5.04 |
8.82 |
(3.71) |
(0.45) |
(4.16) |
4.16 |
$116.13 |
8.23% |
0.55% |
3.38% |
19% |
$148,086 |
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| 2019 |
$96.41 |
3.65 |
7.25 |
10.90 |
(3.50) |
(1.71) |
(5.21) |
5.21 |
$107.31 |
11.31% |
0.55% |
3.60% |
21% |
$133,717 |
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| Advisor
Class |
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| 2023 |
$97.35 |
3.70 |
(2.17) |
1.53 |
(3.35) |
— |
(3.35) |
3.35 |
$98.88 |
1.56% |
0.80% |
3.74% |
7% |
$2,140 |
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| 2022 |
$107.53 |
3.33 |
(13.51) |
(10.18) |
(3.06) |
(0.36) |
(3.42) |
3.42 |
$97.35 |
(9.47)% |
0.79% |
3.25% |
10% |
$1,919 |
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| 2021 |
$109.89 |
2.94 |
(5.30) |
(2.36) |
(2.74) |
(1.42) |
(4.16) |
4.16 |
$107.53 |
(2.15)% |
0.79% |
2.71% |
13% |
$2,549 |
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| 2020 |
$101.79 |
3.30 |
4.80 |
8.10 |
(3.44) |
(0.45) |
(3.89) |
3.89 |
$109.89 |
7.96% |
0.80% |
3.13% |
19% |
$2,524 |
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| 2019 |
$91.68 |
3.23 |
6.88 |
10.11 |
(3.26) |
(1.71) |
(4.97) |
4.97 |
$101.79 |
11.03% |
0.80% |
3.35% |
21% |
$1,496 |
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| Notes
to Financial Highlights |
(1)Computed
using average shares outstanding throughout the period.
(2)Total
returns are calculated based on the net asset value of the last business day.
Total returns for periods less than one year are not annualized.
*The
amount shown for a share outstanding throughout the period may not correlate
with the Statement(s) of Operations or precisely reflect the class expense
differentials due to the timing of transactions in shares of a fund in relation
to income earned and/or fluctuations in the fair value of a fund's
investments.
Notes
Where
to Find More Information
Annual
and Semiannual Reports
Additional
information about the fund’s investments is available in the fund’s annual and
semiannual reports to shareholders. In the fund’s annual report, you will find a
discussion of the market conditions and investment strategies that significantly
affected the fund’s performance during its last fiscal year. This prospectus
incorporates by reference the Report of Independent Registered Public Accounting
Firm and the financial statements included in the fund’s annual
report
to shareholders, dated September 30, 2023.
Statement
of Additional Information (SAI)
The
SAI contains a more detailed legal description of the fund’s operations,
investment restrictions, policies and practices. The SAI
is incorporated by reference into this prospectus. This means that it is legally
part of this prospectus, even if you don’t request a copy.
You
may obtain a free copy of the SAI, annual reports and semiannual reports, and
you may ask questions about the fund or your accounts, online at
americancentury.com, by contacting American Century Investments at the addresses
or telephone numbers listed below or by contacting your financial
intermediary.
The
Securities and Exchange Commission (SEC)
Reports
and other information about the fund are available on the EDGAR database on the
SEC’s website at sec.gov, and copies of this information may be obtained, after
paying a duplicating fee, by electronic request at the following email address:
[email protected].
This
prospectus shall not constitute an offer to sell securities of the fund in any
state, territory, or other jurisdiction where the fund’s shares have not been
registered or qualified for sale, unless such registration or qualification is
not required, or under any circumstances in which such offer or solicitation
would be unlawful.
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American
Century Investments
americancentury.com
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Retail
Investors
P.O. Box 419200
Kansas City, Missouri
64141-6200
1-800-345-2021 or 816-531-5575 |
Financial
Professionals
P.O. Box 419385
Kansas City, Missouri
64141-6385
1-800-345-6488 |
Investment
Company Act File No. 811-04165
CL-PRS-90856 2402
