ck0001710607-20220831
January
1, 2023
American
Century Investments
Prospectus
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American
Century®
Emerging Markets Bond ETF |
AEMB |
NYSE
Arca, Inc. |
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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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©2023
American Century Proprietary Holdings, Inc. All rights reserved.
The fund seeks to provide
current income and capital appreciation.
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 examples
below.
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Annual
Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your
investment) |
Management
Fee |
0.39% |
Other
Expenses |
0.00% |
Total
Annual Fund Operating Expenses |
0.39% |
Example
The example below is
intended to help you compare the costs of investing in the fund with the costs
of investing in other 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 |
$40 |
$126 |
$219 |
$493 |
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 64%
of the average value of its portfolio.
Under normal market conditions, the
portfolio managers will invest at least 80% of the fund’s net assets, plus any
borrowings for investment purposes, in debt securities related to emerging
market countries. Debt securities in which the fund invests
include sovereign and quasi-sovereign debt, emerging markets corporate debt
securities, and emerging markets debt investments. Emerging markets debt
investments include emerging markets derivatives whose reference securities are
corporate and sovereign debt securities. Investments are predominantly made in
instruments denominated in U.S. dollars but the fund may also invest in
securities denominated in local emerging markets currency. The portfolio
managers select investments for the fund using proprietary fundamental research,
quantitative model inputs and qualitative assessments that consider multiple
inputs such as macroeconomic factors, country and fundamental issuer analysis,
and market and relative value.
The
fund considers an emerging market country to be any country other than a
developed country. However, the fund typically invests in the subset of emerging
markets countries that comprise the JP Morgan EMBI Global Diversified Index. In
determining where a company is located, the portfolio managers will consider
various factors, including where the company is headquartered, where the
company’s principal operations are located, where a majority of the company’s
revenues are derived, where the principal trading market is located and the
country in which the company was legally organized. The weight given to each of
these factors will vary depending on the circumstances in a given
case.
The
fund invests in both investment-grade and high-yield debt securities. Investment
grade securities are those that have been rated in one of the top four credit
quality categories by an independent rating agency or determined by the advisor
to be of comparable credit quality. High-yield securities, which are also known
as “junk bonds,” are those that have been rated by an independent rating agency
below the highest four categories or determined by the advisor to be of similar
quality. The fund has no average maturity or duration limitations.
The
fund also may invest in derivative instruments such as interest rate futures
contracts. The fund may use derivative instruments to earn income, enhance
returns, increase liquidity, manage target duration, gain exposure to certain
instruments or markets, and/or hedge its exposure to particular
investments.
The
portfolio managers may engage in hedging of portfolio positions, which usually
involves entering into a derivative transaction that has the opposite
characteristic of the position being hedged. The net effect of these two
positions is intended to reduce or eliminate the exposure created by the first
position.
The fund is an actively managed
exchange-traded fund (ETF) that does not seek to replicate the performance of a
specified index. To determine whether to buy or sell a security, the portfolio
managers consider the fund requirements and standards described above, along
with economic conditions, alternative investments, interest rates and various
credit metrics.
•Foreign
Securities Risk — Foreign
securities have certain unique risks, such as currency risk, social, political
and economic risk, and foreign market and trading risk. Securities of foreign
issuers may be less liquid, more volatile and harder to value than U.S.
securities.
•Emerging
Market Risk — Investing
in securities of issuers located in emerging market countries generally is
riskier than investing in securities of issuers located in foreign developed
countries due to lower liquidity, market manipulation concerns, limited reliable
access to capital, and differing company organizational structures. Emerging
market countries may have unstable governments and/or economies that are subject
to sudden change. These changes may be magnified by the countries’ emergent
financial markets, resulting in significant volatility to investments in these
countries. These countries also may lack the legal, business, and social
framework to support securities markets. Additionally, certain jurisdictions do
not provide the PCAOB with sufficient access to inspect audit work papers and
practices, or otherwise do not cooperate with U.S. regulators, potentially
exposing investors in U.S. capital markets to significant risks.
•Currency
Risk — Because
the fund may invest in securities denominated in foreign currencies, the fund
may be subject to currency risk, meaning that the fund could experience gains or
losses based solely on changes in the exchange rate between foreign currencies
and the U.S. dollar.
•Sovereign
Debt Risk — Sovereign
debt instruments, which are instruments issued by foreign governmental entities,
are subject to the risk that the governmental entity may be unable or unwilling
to repay the principal or interest on its sovereign debt due to, among other
reasons, cash flow problems, insufficient foreign currency reserves, political
considerations, the relative size of the governmental entity’s debt or its
failure to implement economic reforms. There is no bankruptcy process for
collecting sovereign debt and legal remedies may be limited and onerous to
pursue.
•Interest
Rate Risk — Investments
in debt securities are also sensitive to interest rate changes. Generally, the
value of debt securities and the funds that hold them decline as interest rates
rise. The fund is more susceptible to interest rate changes than funds that have
shorter-weighted average maturities, such as money market and short-term bond
funds. A period of rising interest rates may negatively affect the fund’s
performance.
•Credit
Risk — The
inability or perceived inability of a security’s issuer to make interest and
principal payments may cause the value of the security to decrease. As a result,
the fund’s share price could also decrease. Changes in the credit rating of a
debt security held by the fund could have a similar effect.
•High-Yield
Risk — Issuers
of high-yield securities are more vulnerable to real or perceived economic
changes (such as an economic down turn or a prolonged period of rising interest
rates), political changes or adverse developments specific to an issuer. These
factors may be more likely to cause an issuer of low quality bonds to default on
its obligations. Investment in high-yield securities is inherently
speculative.
•Derivatives
Risk — The
use of derivative instruments involves risks different from, or possibly greater
than, the risks associated with investing directly in securities and other
traditional instruments. Derivatives are subject to a number of risks, including
liquidity, interest rate, market, credit and correlation risk. In addition,
derivatives can create economic leverage in the fund’s portfolio, which may
result in significant volatility and cause the fund to participate in losses (as
well as gains) in an amount that exceeds the fund’s initial investment. Certain
derivatives have the potential for unlimited loss, regardless of the size of the
initial investment. Futures contracts may experience dramatic price changes and
imperfect correlations between the price of the contract and the underlying
security, index or currency.
•Cash
Transactions Risk — The
fund may effect its creations and redemptions for cash, rather than for in-kind
securities. Therefore, it may be required to sell portfolio securities and
subsequently recognize gains on such sales that the fund might not have
recognized if it were to distribute portfolio securities in-kind. As such,
investments in fund shares may be less tax-efficient than an investment in an
ETF that distributes portfolio securities entirely in-kind. Cash transactions
may have to be carried out over several days if the securities market is
relatively illiquid and may involve considerable brokerage fees and taxes.
Brokerage fees and taxes will be higher than if the fund sold and redeemed
shares in-kind.
•Liquidity
Risk — During
periods of market turbulence or unusually low trading activity, it may be
necessary for the fund to sell securities at prices that could have an adverse
effect on the fund. The market for lower-quality debt securities is generally
less liquid than the market for higher-quality securities. Changing regulatory
and market conditions, including increases in interest rates and credit spreads
may adversely affect the liquidity of the fund’s investments.
•Market
Trading Risk — The
fund faces numerous market trading risks, including the potential lack of an
active market for fund shares, losses from trading in secondary markets, periods
of high volatility and disruption in the creation and/or redemption process of
the fund. Any of these factors, among others, may lead to the fund’s shares
trading at a premium or discount to NAV. Thus, you may pay more (or less) than
NAV when you buy shares of the fund in the secondary market, and you may receive
less
(or
more) than NAV when you sell those shares in the secondary market. The portfolio
managers cannot predict whether shares will trade above (premium), below
(discount) or at NAV.
•Market
Risk — The
value of the fund’s shares will go up and down, sometimes rapidly or
unpredictably, based on the performance of the issuers whose securities it owns
and other factors generally affecting the securities market. Market risks,
including political, regulatory, economic and social developments, can affect
the value of the fund’s investments. Natural disasters, public health
emergencies, war,
terrorism and other unforeseeable events may lead to increased market volatility
and may have adverse long-term effects on world economies and markets
generally.
•Public
Health Emergency Risk — A
pandemic, caused by the infectious respiratory illness COVID-19, has
caused
market disruption and other economic impacts. Markets have experienced
volatility, reduced liquidity, and increased trading costs. The
pandemic
may continue to impact the fund and its underlying investments and could cause
increased premiums or discounts to the fund’s NAV.
•Authorized
Participant Concentration Risk — Only
an authorized participant may engage in creation or redemption transactions
directly with the fund. The fund may have a limited number of institutions that
act as authorized participants. To the extent that these institutions exit the
business or are unable to proceed with creation and/or redemption orders with
respect to the fund and no other authorized participant is able to step forward
to process creation and/or redemption orders, fund shares may trade at a
discount to net asset value (NAV) and possibly face trading halts and/or
delisting. This risk may be more pronounced in volatile markets, potentially
where there are significant redemptions in ETFs generally.
•Large
Shareholder Risk — Certain
shareholders, including other funds advised by the advisor, may from time to
time own a substantial amount of the shares of the fund. In addition, a third
party investor, the advisor or an affiliate of the advisor, an authorized
participant, a market maker, or another entity may invest in the fund and hold
its investment for a limited period of time solely to facilitate commencement of
the fund or to facilitate the fund’s achieving a specified size or scale. There
can be no assurance that any large shareholder would not redeem its investment,
that the size of the fund would be maintained at such levels or that the fund
would continue to meet applicable listing requirements. Redemptions by large
shareholders could have a significant negative impact on the fund. In addition,
transactions by large shareholders may account for a large percentage of the
trading volume on the NYSE Arca, Inc. and may, therefore, have a material upward
or downward effect on the market price of the shares.
•Principal
Loss Risk — 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 fund’s performance history is not
available as of the date of this prospectus. When the fund has investment
results for a full calendar year, this section will feature charts that show
annual total returns, highest and lowest quarterly returns and average annual
total returns for the fund. This information indicates the
volatility of the fund’s historical returns from year to year. For current
performance information, please visit americancenturyetfs.com.
Performance
information is designed to help you see how fund returns can
vary. Keep in mind that past
performance (before and after taxes) does not predict how the fund will perform
in the future.
Investment
Advisor
American
Century Investment Management, Inc.
Portfolio
Managers
John
A. Lovito,
Senior Vice President and Senior Portfolio Manager, has served on teams managing
fixed-income investments for American Century Investments since joining the
advisor in 2009.
Thomas
Youn,
Vice
President,
Portfolio Manager and Senior Corporate Analyst, has served on teams managing
fixed-income investments for American Century Investments since joining the
advisor in 2014.
Rajat
Ahuja,
Portfolio Manager and Senior Sovereign Analyst, has served on teams managing
fixed-income investments for American Century Investments since joining the
advisor in 2021.
The
fund is an ETF. Fund shares may only be bought and sold in a secondary market
through a broker-dealer at a market price. Because ETF shares trade at market
prices rather than NAV, shares may trade at a price greater than NAV (a premium)
or less than NAV (a discount). An investor may incur costs attributable to the
difference between the highest price a buyer is willing to pay to purchase
shares of the fund (bid) and the lowest price a seller is willing to accept for
shares of the fund (ask) when buying or selling shares in the secondary market
(bid-ask spread). Investors can find information on the fund’s NAV, market
price, premiums and discounts, and bid-ask spread at
americancenturyetfs.com.
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), the advisor 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.
What
are the fund’s investment objectives?
The
fund seeks to provide current income and capital appreciation.
The
fund’s investment objective is a nonfundamental investment policy and may be
changed by the Board of Trustees without approval by shareholders upon 30 days’
notice.
What
are the fund’s principal investment strategies?
Under
normal market conditions, the portfolio managers will invest at least 80% of the
fund’s net assets, plus any borrowings for investment purposes, in debt
securities related to emerging market countries. Debt securities in which the
fund invests include sovereign and quasi-sovereign debt, emerging markets
corporate debt securities, and emerging markets debt investments. Emerging
markets debt investments include emerging markets derivatives whose reference
securities are corporate or sovereign debt securities. Investments are
predominantly made in instruments denominated in U.S. dollars but the fund may
also invest in securities denominated in local emerging markets currency. The
portfolio managers select investments for the fund using proprietary fundamental
research, quantitative model inputs, and qualitative assessments that consider
multiple inputs such as macroeconomic factors, country and fundamental issuer
analysis, and market and relative value.
The
fund considers an emerging market country to be any country other than a
developed country. However, the fund typically invests in the subset of emerging
markets countries that comprise the JP Morgan EMBI Global Diversified Index. The
countries comprising the index will change from time to time, but as of
September
30, 2022,
include: Angola, Argentina, Armenia, Azerbaijan, Bahrain, Barbados,
Bolivia, Brazil, Chile, China, Colombia, Costa Rica, Cote D’Ivoire, Croatia,
Dominican Republic, Ecuador, Egypt, El Salvador, Ethiopia, Gabon, Georgia,
Ghana, Guatemala, Honduras, Hungary, India, Indonesia, Iraq, Jamaica, Jordan,
Kazakhstan, Kenya, Kuwait, Lebanon, Malaysia, Maldives,
Mexico, Mongolia, Morocco, Mozambique, Namibia, Nigeria, Oman, Pakistan, Panama,
Papua New Guinea, Paraguay, Peru, Philippines, Poland, Qatar, Romania,
Rwanda,
Saudi Arabia, Senegal, Serbia, South Africa, Sri Lanka, Suriname, Tajikistan,
Trinidad and Tobago, Tunisia, Turkey, Ukraine, United Arab Emirates, Uruguay,
Uzbekistan,
Vietnam, and Zambia.
In
determining where a company is located, the portfolio managers will consider
various factors, including where the company is headquartered, where the
company’s principal operations are located, where a majority of the company’s
revenues are derived, where the principal trading market is located and the
country in which the company was legally organized. The weight given to each of
these factors will vary depending on the circumstances in a given
case.
The
fund invests in both investment-grade and high-yield debt securities. Investment
grade securities are those that have been rated in one of the top four credit
quality categories by an independent rating agency or determined by the advisor
to be of comparable credit quality. High-yield securities, which are also known
as “junk bonds,” are those that have been rated by an independent rating agency
below the highest four categories or determined by the advisor to be of similar
quality. The fund has no average maturity or duration limitations.
The
fund also may invest in derivative instruments such as interest rate futures
contracts. The fund may use derivative instruments to earn income, enhance
returns, increase liquidity, manage target duration, gain exposure to certain
instruments or markets, and/or hedge its exposure to particular
investments.
The
portfolio managers may engage in hedging of portfolio positions, which usually
involves entering into a derivative transaction that has the opposite
characteristic of the position being hedged. The net effect of these two
positions is intended to reduce or eliminate the exposure created by the first
position.
Although
the fund expects to invest principally in the emerging markets countries listed
above, the fund considers all countries outside of the following developed
countries list to be emerging markets countries: Australia, Austria, Belgium,
Bermuda, Canada, Denmark, Finland, France, Germany, Hong Kong, Ireland, Israel,
Italy, Japan, Luxembourg, the Netherlands, New Zealand, Norway, Portugal,
Singapore, Spain, Sweden, Switzerland, the United Kingdom and the United States.
In
the event of exceptional market or economic conditions, the fund may take
temporary defensive positions that are inconsistent with the fund’s principal
investment strategies. To the extent the fund assumes a defensive position, it
may not achieve its investment objective.
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. Portfolio holdings can be viewed online at
americancenturyetfs.com.
What
are the principal risks of investing in the fund?
•Foreign
Securities Risk — The
fund may invest in the securities of foreign issuers, which are generally
riskier than U.S. securities. In addition, investing in securities of issuers
located in emerging market countries generally is riskier than investing in
securities of issuers located in foreign developed countries. As a result, the
fund may be subject to foreign and emerging market risk, meaning that political
events (such as civil unrest, national elections and imposition of exchange
controls), social and economic events (such as labor strikes and rising
inflation), and natural disasters occurring in a country where the fund invests
could cause the fund’s investments in that country to experience losses. In
addition, foreign and emerging market securities can
have
reduced availability of public information, and the lack of uniform financial
reporting and regulatory practices similar to those that apply to U.S. issuers.
For these and other reasons, securities of foreign and emerging market issuers
are often more volatile, less liquid and harder to value than those of U.S.
issuers.
•Emerging
Markets Risk — Investing
in securities of issuers located in emerging market countries generally is
riskier than investing in securities of issuers located in foreign developed
countries due to lower liquidity, market manipulation concerns, limited reliable
access to capital, and differing company organizational structures. Emerging
market countries may have unstable governments and/or economies that are subject
to sudden change. These changes may be magnified by the countries’ emergent
financial markets, resulting in significant volatility to investments in these
countries. These countries also may lack the legal, business, and social
framework to support securities markets. Additionally, the Sarbanes-Oxley Act of
2002 requires that PCAOB registered accounting firms, which prepare or issue
audit opinions for U.S.-listed issuers, submit to PCAOB inspections and produce
audit work papers. This requirement applies to audit opinions for all
U.S.-listed issuers, regardless of the domicile of the issuer. Certain
jurisdictions do not provide the PCAOB with sufficient access to inspect audit
work papers and practices, or otherwise do not cooperate with U.S. regulators.
This lack of access and cooperation potentially exposes investors in U.S.
capital markets to significant risks of capital loss and limits the rights and
remedies available to funds and shareholders.
•Currency
Risk — In
addition, investments in foreign countries are subject to currency risk, meaning
that because a portion of the fund’s investments may be denominated in foreign
currencies, the fund could experience gains or losses based solely on changes in
the exchange rate between foreign currencies and the U.S. dollar.
•Sovereign
Debt Risk — Sovereign
debt instruments, which are instruments issued by foreign governmental entities,
are subject to the risk that the governmental entity may be unable or unwilling
to repay the principal or interest on its sovereign debt due to, among other
reasons, cash flow problems, insufficient foreign currency reserves, political
considerations, the relative size of the governmental entity’s debt or its
failure to implement economic reforms. There is no bankruptcy process for
collecting sovereign debt and legal remedies may be limited and onerous to
pursue.
•Interest
Rate Risk — Investments
in debt securities are also sensitive to interest rate changes. Generally, the
value of debt securities and the funds that hold them decline as interest rates
rise. The degree to which interest rate changes affect the fund’s performance
varies and is related to the weighted average maturity of the fund. For example,
when interest rates rise, you can expect the share value of a long-term bond
fund to fall more than that of a short-term bond fund. When rates fall, the
opposite is true. The fund is more susceptible to interest rate changes than
funds that have shorter-weighted average maturities, such as money market and
short-term bond funds. A period of rising interest rates may negatively
affect the fund’s performance.
•Credit
Risk — Credit
risk is the risk that the inability or perceived inability of a security’s
issuer to make interest and principal payments may cause the value of the
security to decrease. As a result the fund’s share price could also decrease.
Changes in the credit rating of a debt security held by the fund could have a
similar effect. A high credit rating indicates a high degree of confidence by
the rating organization that the issuer will be able to withstand adverse
business, financial or economic conditions and make interest and principal
payments on time. A lower credit rating indicates a greater risk of non-payment.
Issuers of high-yield securities are more vulnerable to real or perceived
economic changes (such as an economic downturn or a prolonged period of rising
interest rates), political changes or adverse developments specific to the
issuer. In addition, lower-rated securities may be unsecured or subordinated to
other obligations of the issuer. These factors may be more likely to cause an
issuer of low-quality bonds to default on its obligation to pay the interest and
principal due under its securities. The fund’s credit quality restrictions apply
at the time of purchase; the fund will not necessarily sell securities if they
are downgraded by a rating agency.
•High-Yield
Risk — Issuers
of high-yield securities are more vulnerable to real or perceived economic
changes (such as an economic down turn or a prolonged period of rising interest
rates), political changes or adverse developments specific to an issuer. These
factors may be more likely to cause an issuer of low quality bonds to default on
its obligations. Investment in high-yield securities is inherently
speculative.
•Derivatives
Risk — The
use of derivative instruments involves risks different from, or possibly greater
than, the risks associated with investing directly in securities and other
traditional instruments. Derivatives are subject to a number of risks, including
liquidity, interest rate, market, and credit risk. They also involve the risk of
mispricing or improper valuation, the risk that changes in the value of the
derivative may not correlate perfectly with the underlying asset, rate or index,
and the risk of default or bankruptcy of the other party to the instrument.
Gains or losses involving some futures, options, and other derivatives may be
substantial - in part because a relatively small price movement in these
securities may result in an immediate and substantial gain or loss for the fund.
In addition, derivatives can create economic leverage in the fund’s portfolio,
which may result in significant volatility and cause the fund to participate in
losses (as well as gains) in an amount that exceeds the fund’s initial
investment. Certain derivatives have the potential for unlimited loss,
regardless of the size of the initial investment. Futures contracts may
experience potentially dramatic price changes (losses) and imperfect
correlations between the price of the contract and the underlying security,
index or currency which will increase the volatility of the fund and may involve
a small investment of cash relative to the magnitude of the risk
assumed.
•Cash
Transactions Risk — ETFs
generally are able to make in-kind redemptions and avoid being taxed on gain on
the distributed portfolio securities at the fund level. However, because the
fund may effect redemptions in cash, rather than in-kind, it
may
be required to sell portfolio securities in order to obtain the cash needed to
distribute redemption proceeds. If the fund recognizes gain on these sales, this
generally will cause the fund to recognize gain it might not otherwise have
recognized, or to recognize such gain sooner than would otherwise be required if
it were to distribute portfolio securities in-kind. The fund generally intends
to distribute these gains to shareholders to avoid being taxed on this gain at
the fund level and otherwise comply with the special tax rules that apply to it.
This strategy may cause shareholders to be subject to tax on gains they would
not otherwise be subject to, or at an earlier date than, if they had made an
investment in a different ETF. Moreover, cash transactions may have to be
carried out over several days if the securities market is relatively illiquid
and may involve considerable brokerage fees and taxes. These brokerage fees and
taxes, which may be higher than if the fund sold and redeemed its shares
in-kind, will be passed on to purchasers and redeemers of Creation Units in the
form of creation and redemption transaction fees. To the extent that these costs
are not offset by a transaction fee, the fund may bear the expense.
•Liquidity
Risk — The
chance that a fund will have difficulty selling its debt securities is called
liquidity risk. During periods of market turbulence or unusually low trading
activity, it may be necessary for the fund to sell securities at prices that
could have an adverse effect on the fund. The market for lower-quality debt
securities is generally less liquid than the market for higher-quality
securities. Adverse publicity and investor perceptions, as well as new and
proposed laws, also may have a greater negative impact on the market for
lower-quality securities. Changing regulatory and market conditions, including
increases in interest rates and credit spreads, may adversely affect the
liquidity of the fund’s investments. In addition, when the market for certain
investments is illiquid, the fund may be unable to achieve its desired level of
exposure to a certain sector. Illiquid securities may be difficult to
value.
•Market
Trading Risk — Although
shares of the fund are listed for trading on one or more stock exchanges, there
can be no assurance that an active trading market for such shares will develop
or be maintained. There are no obligations of market makers to make a market in
the fund’s shares or of an authorized participant to submit purchase or
redemption orders for Creation Units. Decisions by market makers or authorized
participants to reduce their role or step away from these activities in times of
market stress could inhibit the effectiveness of the arbitrage process in
maintaining the relationship between the underlying value of the fund’s
portfolio securities and the fund’s market price. This reduced effectiveness
could result in fund shares trading at a premium or discount to its NAV and also
greater than normal intraday bid/ask spreads.
Shares
of the fund may trade in the secondary market at times when the fund does not
accept orders to purchase or redeem shares. At such times, shares may trade in
the secondary market with more significant premiums or discounts than might be
experienced at times when the fund accepts purchase and redemption orders.
Secondary market trading in fund shares may be halted by a stock exchange
because of market conditions or other reasons, and may be subject to trading
halts caused by extraordinary market volatility pursuant to “circuit breaker”
rules on the stock exchange or market. There can be no assurance that the
requirements necessary to maintain the listing or trading of fund shares will
continue to be met or will remain unchanged. In addition, during a “flash
crash,” the market prices of the fund’s shares may decline suddenly and
significantly. Such a decline may not reflect the performance of the
portfolio securities held by the fund. Flash crashes may cause authorized
participants and other market makers to limit or cease trading in the fund’s
shares for temporary or longer periods. Shareholders could suffer
significant losses to the extent that they sell fund shares at these temporarily
low market prices.
Shares
of the fund may trade at prices other than NAV. Thus, you may pay more (or less)
than NAV when you buy shares of the fund in the secondary market, and you may
receive less (or more) than NAV when you sell those shares in the secondary
market. While the creation/redemption feature is designed to make it likely that
the fund’s shares normally will trade on stock exchanges at prices close to the
fund’s next calculated NAV, market prices are not expected to correlate exactly
with the fund’s NAV due to timing reasons as well as market supply and demand
factors. In addition, disruptions to creations and redemptions or extreme market
volatility may result in trading prices for shares of the fund that differ
significantly from its NAV. The portfolio managers cannot predict whether shares
will trade above (premium), below (discount) or at NAV.
When
buying or selling shares of the fund through a broker, you will likely incur a
brokerage commission or other charges determined by your broker. In addition,
you may incur the cost of the “spread,” that is, any difference between the bid
price and the ask price. The spread varies over time for shares of the fund
based on the fund’s trading volume and market liquidity, and is generally lower
if the fund has a lot of trading volume and market liquidity, and higher if the
fund has little trading volume and market liquidity. During times of market
stress, spreads may widen causing investors to pay more.
•Market
Risk — The
value of the fund’s shares depends on the value of the bonds and other
securities it owns. The value of the individual securities the fund owns will go
up and down, sometimes rapidly or unpredictably, depending on the performance of
the issuers that issued them, general market and economic conditions and
investor confidence. Market risks, including political, regulatory, economic and
social developments, can affect the value of the fund’s investments. Natural
disasters, public health emergencies, war,
terrorism and other unforeseeable events may lead to increased market volatility
and may have adverse long-term effects on world economies and markets
generally.
•Public
Health Emergency Risk — A
pandemic, caused by the infectious respiratory illness COVID-19, has
caused
travel restrictions, disruption of healthcare systems, prolonged quarantines,
cancellations, supply chain interruptions, lower consumer demand, layoffs,
credit downgrades, and defaults among other economic impacts. Certain markets
experienced temporary
closures,
extreme volatility, losses, reduced liquidity and increased trading costs.
The
pandemic
may continue to impact the fund and its underlying investments and could cause
increased premiums or discounts to the fund’s NAV.
•Authorized
Participant Concentration Risk — Only
an authorized participant may engage in creation or redemption transactions
directly with the fund. The fund may have a limited number of institutions that
act as authorized participants, none of which are obligated to engage in
creation or redemption transactions. To the extent that these institutions exit
the business or are unable to proceed with creation and/or redemption orders
with respect to the fund and no other authorized participant is able to step
forward to process creation and/or redemption orders, fund shares may trade at a
discount to NAV and possibly face trading halts and/or delisting. This risk may
be more pronounced in volatile markets, potentially where there are significant
redemptions in ETFs generally. Authorized participant concentration risks may be
heightened in scenarios where authorized participants have limited or diminished
access to the capital required to post collateral.
•Large
Shareholder Risk — Certain
shareholders, including other funds advised by the advisor, may from time to
time own a substantial amount of the shares of the fund. In addition, a third
party investor, the advisor or an affiliate of the advisor, an authorized
participant, a market maker, or another entity may invest in the fund and hold
its investment for a limited period of time solely to facilitate commencement of
the fund or to facilitate the fund’s achieving a specified size or scale. There
can be no assurance that any large shareholder would not redeem its investment,
that the size of the fund would be maintained at such levels or that the fund
would continue to meet applicable listing requirements. Redemptions by large
shareholders could have a significant negative impact on the fund. In addition,
transactions by large shareholders may account for a large percentage of the
trading volume on the NYSE Arca, Inc. and may, therefore, have a material upward
or downward effect on the market price of the shares.
•Principal
Loss Risk — 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. The
majority 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 (Investment
Company Act).
The
Investment Advisor
The
fund’s investment advisor is American Century Investment Management, Inc. (the
advisor). The advisor has been managing investment companies since 1958 and is
headquartered at 4500 Main Street, Kansas City, Missouri 64111.
The
advisor is responsible for managing the investment portfolio 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 the fund. The amount of the
fee is calculated daily and paid monthly in arrears. The advisor pays all
expenses of managing and operating the fund, other than the management fee
payable to the advisor, brokerage and other transaction fees and expenses
relating to the acquisition and disposition of portfolio securities, acquired
fund fees and expenses, interest, taxes, litigation expenses, extraordinary
expenses, and expenses incurred in connection with the provision of shareholder
and distribution services under a plan adopted pursuant to Rule 12b-1 under the
Investment Company Act (if any). The advisor may pay unaffiliated third parties
who provide recordkeeping and administrative services that would otherwise be
performed by an affiliate of the advisor.
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Management
Fees Paid by the Fund to the Advisor As a Percentage of Average
Net Assets for the Fiscal Year Ended August 31, 2022 |
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American
Century Emerging Markets Bond ETF |
0.39% |
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 for the fiscal year ended August 31, 2022.
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.
John
A. Lovito (Global Fixed Income Investment Committee Representative)
Mr.
Lovito, Senior Vice President and Senior Portfolio Manager, has served on teams
managing fixed-income investments since joining the advisor in 2009. He has a
bachelor’s degree in economics and an MBA in finance from Fordham
University.
Thomas
Youn
Mr.
Youn, Vice
President,
Portfolio Manager and Senior Corporate Analyst, has served on teams managing
fixed-income investments for American Century Investments since joining the
advisor in 2014. He has a bachelor’s degree in biology from Brown University and
an MBA from The University of Chicago Booth School of Business.
Rajat
Ahuja
Mr.
Ahuja, Portfolio Manager and Senior Sovereign Analyst, has served on teams
managing fixed-income investments since joining the advisor in 2021. Prior to
joining American Century, he was a portfolio manager at Aberdeen Standard
Investments from 2013 to 2021. He has a bachelor’s degree in accounting from
Purdue University.
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. The Board of Trustees and/or the advisor
may change any other policies, including the fund’s investment objective, or
investment strategies described in this prospectus or otherwise used in the
operation of the fund at any time, subject to applicable notice
provisions.
Buying
and Selling Shares
Shares
of the fund may be acquired or redeemed directly from the fund only in Creation
Units or multiples thereof, as discussed below. Only an authorized participant
may engage in creation and redemption transactions directly with the fund. Once
created, shares of the fund generally trade in the secondary market in amounts
less than a Creation Unit.
Shares
of the fund are listed on a national securities exchange for trading during the
trading day. Shares can be bought and sold throughout the trading day like
shares of other publicly traded companies. American Century ETF Trust (the
trust) does not impose any minimum investment for shares of the fund purchased
on an exchange. Shares of the fund trade under the following ticker symbol:
AEMB.
Buying
or selling fund shares on an exchange involves two types of costs that may apply
to all securities transactions. When buying or selling shares of the fund
through a broker, you will likely incur a brokerage commission or other charges
determined by your broker. The commission is frequently a fixed amount and may
be a significant proportional cost for investors seeking to buy or sell small
amounts of shares. In addition, you may incur the cost of the “spread,” that is,
any difference between the bid price and the ask price. The spread varies over
time for shares of the fund based on the fund’s trading volume and market
liquidity, and is generally lower if the fund has a lot of trading volume and
market liquidity, and higher if the fund has little trading volume and market
liquidity.
The
fund’s primary listing exchange is NYSE Arca, Inc., which is open for trading
Monday through Friday and is closed on weekends and the following holidays: New
Year’s Day, Martin Luther King, Jr. Day, Presidents’ Day, Good Friday, Memorial
Day, Juneteenth National Independence Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day.
Book
Entry
Shares
of the fund are held in book-entry form, which means that no share certificates
are issued. The Depository Trust Company (DTC) or its nominee is the record
owner of all outstanding shares of the fund and is recognized as the owner of
all shares for all purposes.
Investors
owning shares of the fund are beneficial owners as shown on the records of DTC
or its participants. DTC serves as the securities depository for shares of the
fund. DTC participants include securities brokers and dealers, banks, trust
companies, clearing corporations and other institutions that directly or
indirectly maintain a custodial relationship with DTC. As a beneficial owner of
shares, you are not entitled to receive physical delivery of stock certificates
or to have shares registered in your name, and you are not considered a
registered owner of shares. Therefore, to exercise any right as an owner of
shares, you must rely upon the procedures of DTC and its participants. These
procedures are the same as those that apply to any other securities that you
hold in book-entry or “street name” form.
Frequent
Trading Practices
The
Board of Trustees has not adopted a policy of monitoring for frequent purchases
and redemptions of fund shares (frequent trading). The Board of Trustees
believes that a frequent trading policy is unnecessary because fund shares are
listed for trading on a national securities exchange. Therefore, it is unlikely
that a shareholder could take advantage of a potential arbitrage opportunity
presented by a lag between a change in the value of the fund’s portfolio
securities after the close of the primary markets for the fund’s portfolio
securities and the reflection of that change in the fund’s NAV (market timing),
because the fund generally sells and redeems its shares directly through
transactions that are in-kind and/or for cash, subject to the conditions
described below under Creations and Redemptions.
Investments
by Other Investment Companies
Section
12(d)(1) of the Investment Company Act restricts investments by investment
companies in the securities of other investment companies. Registered investment
companies are permitted to invest in the fund beyond the limits set forth in
Section 12(d)(1), subject to certain terms and conditions set forth in SEC
rules. In order for an unaffiliated registered investment company to invest in
shares of the fund beyond the limitations of Section 12(d)(1) pursuant to Rule
12d1-4, the registered investment company must enter into an agreement with the
trust.
Creations
and Redemptions
Prior
to trading in the secondary market, shares of the fund are “created” at NAV by
market makers, large investors and institutions only in block-size units, called
“Creation Units.” All orders to purchase Creation Units must be placed by or
through an authorized participant that has entered into an authorized
participant agreement (AP Agreement) with Foreside Fund Services, LLC (the
distributor). Only an authorized participant may create or redeem Creation Units
directly with the fund.
A
creation transaction, which is subject to acceptance by the trust, generally
takes place when an authorized participant deposits into the fund a designated
portfolio of securities and/or cash (which may include cash in lieu of certain
securities) in exchange for a specified number of Creation Units. With respect
to the fund, these deposits are generally in cash. Similarly, shares can be
redeemed only in Creation Units, generally for a designated portfolio of
securities and/or cash (which may include cash in lieu of certain
securities).
With respect to the fund, redemptions are generally on an in-kind basis, but the
fund reserves the right to meet redemptions in cash. Except when aggregated in
Creation Units, shares are not redeemable by the fund.
The
prices at which creations and redemptions occur are based on the next
calculation of NAV after a creation or redemption order is received in a proper
form under the AP Agreement. The portfolio of securities required for purchase
of a Creation Unit is generally the same as the portfolio of securities the fund
will deliver upon redemption of fund shares, except under certain circumstances.
As a result of any system failure or other interruption, creation or redemption
orders either may not be executed according to the fund’s instructions or may
not be executed at all, or the fund may not be able to place or change such
orders.
Creations
and redemptions must be made through a firm that is either a broker-dealer or
other participant in the Continuous Net Settlement System of the National
Securities Clearing Corporation or a DTC participant and, in either case, has
executed an AP Agreement with the distributor. Information about the procedures
regarding creations and redemptions of Creation Units (including the cut-off
times for receipt of creation and redemption orders) is included in the fund’s
statement of additional information (SAI).
Because
new shares may be created and issued on an ongoing basis, at any point during
the life of the fund a “distribution,” as such term is used in the Securities
Act of 1933 (Securities Act), may be occurring. Broker-dealers and other persons
are cautioned that some activities on their part may, depending on the
circumstances, result in their being deemed participants in a distribution in a
manner that could render them statutory underwriters and subject to the
prospectus delivery and liability provisions of the Securities Act. Any
determination of whether one is an underwriter must take into account all the
relevant facts and circumstances of each particular case.
Broker-dealers
should also note that dealers who are not “underwriters” but are participating
in a distribution (as contrasted to ordinary secondary transactions), and thus
dealing with shares that are part of an “unsold allotment” within the meaning of
Section 4(a)(3)(C) of the Securities Act, would be unable to take advantage of
the prospectus delivery exemption provided by Section 4(a)(3) of the Securities
Act. For delivery of prospectuses to exchange members, the prospectus delivery
mechanism of Rule 153 under the Securities Act is available only with respect to
transactions on a national securities exchange.
In
addition, certain affiliates of the fund and the advisor may purchase and resell
fund shares pursuant to this prospectus.
Share
Price
The
price of fund shares is based on market price. The trading prices of the fund’s
shares in the secondary market generally differ from the fund’s daily NAV and
are affected by market forces such as supply and demand, economic conditions and
other factors.
Calculation
of NAV
American
Century Investments will price the fund shares purchased or redeemed by
authorized participants based on the net
asset value
(NAV) next determined after an order is received in good order by the fund’s
transfer agent. We determine the NAV of the 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 the fund is the current value of the fund’s assets, minus any
liabilities, divided by the number of shares of the fund
outstanding. |
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The
value of the securities and other assets and liabilities held by the fund are
determined by the advisor, as the valuation designee, pursuant to its valuation
policies and procedures. The fund’s Board of Trustees oversees the valuation
designee and at least annually reviews its valuation policies and procedures.
Valuations are determined in accordance with applicable federal securities laws
and accounting principles generally accepted in the United States.
Portfolio
securities for which market quotations are readily available are valued at their
market price. If the valuation designee determines that the market price for a
portfolio security is not readily available or is believed by the valuation
designee to be unreliable, such security is valued at fair value as determined
in good faith by the valuation designee, in accordance with its policies and
procedures.
Fixed
income securities are generally valued using prices obtained from approved
independent pricing services approved by the valuation designee or market
quotations provided by dealers. Pricing services will generally provide
evaluated prices based on accepted industry conventions, which may require the
service to use its own discretion.
Evaluated prices are commonly derived through utilization of market models
that
take into consideration various market factors,
assumptions
and security characteristics including,
but not limited to,
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. The
use of different models or inputs may result in pricing services determining a
different price for the same security. The methods used by the pricing services
and the valuations so established are reviewed by the valuation designee under
the oversight of the Board of Trustees.
Debt
obligations with 60 days or less remaining until maturity may be valued at
amortized cost.
If
the valuation designee determines that the valuation methods mentioned above do
not reflect the security's fair value, the valuation designee will use other
valuation methodologies to value a 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
the
valuation designee’s valuation policies and
procedures.
The
effect of using fair value determinations is that the fund’s NAV will be based,
to some degree, on security valuations that the valuation
designee reasonably
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 other
mutual funds,
the fund’s NAV will be calculated based upon the NAVs of such mutual
funds.
These
mutual funds are required
to explain the circumstances under which they will use fair value pricing and
the effects of using fair value pricing in their prospectuses.
Trading
of securities in foreign markets may not take place every day the NYSE is open.
Also, trading in some foreign markets and on some electronic trading networks
may take place on weekends or holidays when the fund’s NAV is not calculated.
So, the value of the fund’s portfolio may be affected on days when you will not
be able to purchase or sell fund shares.
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 the fund should not be subject to state or federal
income tax on amounts distributed. The distributions generally consist of
dividends and interest received by the fund, as well as capital
gains
realized by the fund on the sale of its investment securities.
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Capital
gains
are
increases in the values of capital assets, such as stocks or bonds, from
the time the assets are purchased. |
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The
fund generally expects to pay distributions from net income, if any, monthly.
The fund generally pays distributions from realized capital gains, if any, once
a year. It may make more frequent distributions if necessary to comply with
Internal Revenue Code provisions.
Although
dividends generally will be treated as distributed when paid, any dividend
declared by a fund in October, November or December and payable to shareholders
of record in such a month that is paid during the following January will be
treated for U.S. federal income tax purposes as received by shareholders on
December 31 of the calendar year in which it was declared.
Dividend
payments are made through DTC participants and indirect participants to
beneficial owners then of record with proceeds received from the fund.
Distributions may be automatically reinvested in whole fund shares only if you
purchased the shares through a broker that makes such option
available.
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.
Tax-Deferred
Accounts
If
you purchase fund shares through a tax-deferred account, such as an IRA or
employer-sponsored retirement 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
the fund from its investments, or capital gains generated by the fund from the
sale of 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.
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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.
You
will receive information regarding 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
sales of fund shares 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 will result in a long-term or short-term capital
loss. However, you should note that loss realized upon the sale 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 sale of fund shares, the reinvestment in
additional fund shares within 30 days before or after the sale 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 that your Social Security number or tax identification
number is correct and that you are not subject to withholding, you may be
subject to backup withholding at the applicable federal withholding tax rate on
taxable dividends, capital gains distributions and proceeds from the sale of
fund shares.
Taxes
on Creations and Redemptions of Creation Units
An
Authorized Participant who exchanges securities for Creation Units generally
will recognize a gain or a loss equal to the difference between the market value
of the Creation Units at the time and the sum of the exchanger’s aggregate basis
in the securities surrendered plus the amount of cash paid for such Creation
Units. A person who redeems Creation Units will generally recognize a gain or
loss equal to the difference between the exchanger’s basis in the Creation Units
and the sum of the aggregate market value of any securities received plus the
amount of any cash received for such Creation Units. The IRS, however, may
assert that a loss realized upon an exchange of securities for Creation Units
cannot be deducted currently under the rules governing “wash sales,” or on the
basis that there has been no significant change in economic
position.
Any
capital gain or loss realized upon the creation of Creation Units will generally
be treated as long-term capital gain or loss if the securities exchanged for
such Creation Units have been held for more than one year. Any capital gain or
loss realized upon the redemption of Creation Units will generally be treated as
long-term capital gain or loss if the shares comprising the Creation Units have
been held for more than one year. Otherwise, such capital gains or losses will
generally be treated as short-term capital gain or loss. Any loss upon a
redemption of Creation Units held for six months or less will be treated as a
long-term capital loss to the extent of any amounts treated as distributions to
the applicable Authorized Participant of long-term capital gain with respect to
the Creation Units (including any amounts credited to the Authorized Participant
as undistributed capital gains).
If
a fund redeems Creation Units in cash, it may recognize more capital gains than
it will if it redeems Creation Units in-kind.
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 a 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.
Service,
Distribution and Administrative Fees
Investment
Company Act Rule 12b-1 permits investment companies that adopt a written plan to
pay certain expenses associated with the distribution of their shares out of
fund assets. The Board of Trustees has adopted a 12b-1 plan that allows the fund
to pay annual fees not to exceed 0.25% to the distributor for distribution and
individual shareholder services. However, the Board of Trustees has determined
not to authorize payment of a 12b-1 plan fee at this time.
Because
these fees may be used to pay for services that are not related to prospective
sales of the fund, to the extent that a fee is authorized, the fund 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, to the
extent that a fee is authorized, over time these fees will increase the cost of
your investment and may cost you more than paying other types of sales
charges.
The
advisor or its affiliates 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 advisor
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 advisor and its affiliates may also pay fees related to obtaining
data regarding intermediary or financial advisor activities to assist American
Century 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 in this paragraph is determined by the advisor or its affiliates, 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
(or a shorter period if the fund is not five years old).
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
•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 have been audited by Deloitte & Touche LLP, independent
registered public accounting firm. The Report of Independent Registered Public
Accounting Firm and the financial statements are included in the fund’s annual
report, which is available upon request.
American
Century Emerging Markets Bond ETF
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For
a Share Outstanding Throughout the Years Ended August 31 (except as
noted) |
Per-Share
Data |
Ratios
and Supplemental Data |
|
|
Income
From Investment Operations: |
| Ratio
to Average Net Assets of: |
| |
|
Net Asset
Value, Beginning of Period |
Net
Investment
Income
(Loss)(1) |
Net Realized
and Unrealized Gain (Loss) |
Total
From Investment Operations |
Distributions
From Net Investment Income |
Other
Capital(1) |
Net
Asset Value, End of Period |
Total
Return(2) |
Operating Expenses |
Net Investment Income (Loss) |
Portfolio
Turnover
Rate(3) |
Net
Assets, End of Period (in thousands) |
2022 |
$50.30 |
2.13 |
(12.25) |
(10.12) |
(2.05) |
0.00(4) |
$38.13 |
(20.60)% |
0.39% |
4.87% |
64% |
$26,693 |
|
2021(5) |
$50.00 |
0.36 |
0.11 |
0.47 |
(0.17) |
0.00(4) |
$50.30 |
0.95% |
0.39%(6) |
4.14%(6) |
7% |
$22,636 |
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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.
(3)Excludes
securities received or delivered in kind.
(4)Per-share
amount was less than $0.005.
(5)June
29, 2021 (fund inception) through August 31, 2021.
(6)Annualized.
Notes
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 August 31, 2022.
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
americancenturyetfs.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
americancenturyetfs.com |
Financial
Professionals P.O. Box 419385 Kansas City, Missouri
64141-6385 833-ACI-ETFS |
Investment
Company Act File No. 811-23305
CL-PRS-97143
2301