UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number | 811-00816 | |||||
AMERICAN CENTURY MUTUAL FUNDS, INC. | ||||||
(Exact name of registrant as specified in charter) | ||||||
4500 MAIN STREET, KANSAS CITY, MISSOURI | 64111 | |||||
(Address of principal executive offices) | (Zip Code) | |||||
CHARLES A. ETHERINGTON 4500 MAIN STREET, KANSAS CITY, MISSOURI 64111 | ||||||
(Name and address of agent for service) | ||||||
Registrant’s telephone number, including area code: | 816-531-5575 | |||||
Date of fiscal year end: | 10-31 | |||||
Date of reporting period: | 04-30-2015 |
ITEM 1. REPORTS TO STOCKHOLDERS.
SEMIANNUAL REPORT | APRIL 30, 2015 |
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All Cap Growth Fund
Table of Contents |
Any opinions expressed in this report reflect those of the author as of the date of the report, and do not necessarily represent the opinions of American Century Investments® or any other person in the American Century Investments organization. Any such opinions are subject to change at any time based upon market or other conditions and American Century Investments disclaims any responsibility to update such opinions. These opinions may not be relied upon as investment advice and, because investment decisions made by American Century Investments funds are based on numerous factors, may not be relied upon as an indication of trading intent on behalf of any American Century Investments fund. Security examples are used for representational purposes only and are not intended as recommendations to purchase or sell securities. Performance information for comparative indices and securities is provided to American Century Investments by third party vendors. To the best of American Century Investments’ knowledge, such information is accurate at the time of printing.
President’s Letter |
![]() | Dear Investor: Thank you for reviewing this semiannual report for the six months ended April 30, 2015. It provides a macroeconomic and financial market overview (below), followed by fund performance, a schedule of fund investments, and other financial information. For additional commentary and updated information on fund performance, key factors that affected asset returns, and other insights regarding the investment markets, we encourage you to visit our website, americancentury.com. |
Jonathan Thomas |
Global Divergence in Monetary Policies Influenced Investor Behavior
The six-month reporting period saw big swings in market returns, triggered in part by central bank moves. In October 2014, just before the period started, the U.S. Federal Reserve ended its latest bond-buying program (quantitative easing, QE). As QE wound down, the U.S. economy enjoyed 5% annualized growth (after inflation) in the third quarter of 2014, the highest rate since the third quarter of 2003. But while QE was ending in the U.S., other major central banks were starting or increasing QE as their economies faltered. A “global divergence” of economic growth and monetary policies opened between the U.S. and most of the rest of the developed world.
This divergence helped fuel increased demand for the U.S. dollar and U.S. dollar-denominated assets, and put downward pressure on commodities prices, most notably oil. Though the resulting dollar rally and oil price decline reversed somewhat in April 2015, the dollar remained 9% higher for the reporting period, as measured by the U.S. Dollar Index, while oil remained more than 25% lower, as measured by both Brent and West Texas Intermediate crude oil futures. In this environment, U.S. stocks and bonds posted moderate gains—the S&P 500 Index and the Barclays U.S. Aggregate Bond Index returned 4.40% and 2.06%, respectively.
We expect monetary policy divergence between the U.S. and other major developed economies to continue this year, accompanied by market volatility. This could present both challenges and opportunities for active investment managers. Upward pressures on inflation and interest rates could develop as the massive amount of global monetary stimulus in progress takes hold and economies improve. But we believe lingering constraining forces will likely keep inflation and interest rates relatively low for the next six months. In this environment, we continue to believe in a disciplined, diversified, long-term investment approach, using professionally managed stock and bond portfolios to meet financial goals. We appreciate your continued trust in us.
Sincerely,
![](https://capedge.com/proxy/N-CSRS/0000100334-15-000051/jonathanthomassig.jpg)
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
2
Performance |
Total Returns as of April 30, 2015 | |||||||
Average Annual Returns | |||||||
Ticker Symbol | 6 months(1) | 1 year | 5 years | 10 years | Since Inception | Inception Date | |
Investor Class | TWGTX | 5.80% | 16.47% | 13.45% | 12.30% | 11.61% | 11/25/83 |
Russell 3000 Growth Index | — | 6.59% | 16.50% | 15.44% | 9.68% | 10.07%(2) | — |
Institutional Class | ACAJX | 5.89% | 16.69% | — | — | 18.61% | 9/30/11 |
A Class | ACAQX | 9/30/11 | |||||
No sales charge* | 5.66% | 16.19% | — | — | 18.09% | ||
With sales charge* | -0.41% | 9.51% | — | — | 16.16% | ||
C Class | ACAHX | 9/30/11 | |||||
No sales charge* | 5.28% | 15.33% | — | — | 17.21% | ||
With sales charge* | 4.38% | 15.33% | — | — | 17.21% | ||
R Class | ACAWX | 5.54% | 15.89% | — | — | 17.80% | 9/30/11 |
* | Sales charges include initial sales charges and contingent deferred sales charges (CDSCs), as applicable. A Class shares have a 5.75% maximum initial sales charge and may be subject to a maximum CDSC of 1.00%. C Class shares redeemed within 12 months of purchase are subject to a maximum CDSC of 1.00%. The SEC requires that mutual funds provide performance information net of maximum sales charges in all cases where charges could be applied. |
(1) | Total returns for periods less than one year are not annualized. |
(2) | Since November 30, 1983, the date nearest the Investor Class’s inception for which data are available. |
Total Annual Fund Operating Expenses | ||||
Investor Class | Institutional Class | A Class | C Class | R Class |
1.00% | 0.80% | 1.25% | 2.00% | 1.50% |
The total annual fund operating expenses shown is as stated in the fund’s prospectus current as of the date of this report. The prospectus may vary from the expense ratio shown elsewhere in this report because it is based on a different time period, includes acquired fund fees and expenses, and, if applicable, does not include fee waivers or expense reimbursements.
Data presented reflect past performance. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance shown. Investment return and principal value will fluctuate, and redemption value may be more or less than original cost. Data assumes reinvestment of dividends and capital gains, and none of the charts reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. To obtain performance data current to the most recent month end, please call 1-800-345-2021 or visit americancentury.com. For additional information about the fund, please consult the prospectus.
3
Fund Characteristics |
APRIL 30, 2015 | |
Top Ten Holdings | % of net assets |
Apple, Inc. | 5.8% |
Google, Inc.* | 4.7% |
Electronic Arts, Inc. | 4.2% |
Actavis plc | 3.8% |
Comcast Corp., Class A | 3.1% |
Lowe's Cos., Inc. | 2.5% |
Mondelez International, Inc., Class A | 2.3% |
Facebook, Inc., Class A | 2.3% |
Gilead Sciences, Inc. | 2.2% |
FedEx Corp. | 2.2% |
*Includes all classes of the issuer. | |
Top Five Industries | % of net assets |
Internet Software and Services | 9.3% |
Software | 7.2% |
Media | 6.2% |
Specialty Retail | 6.0% |
Biotechnology | 5.9% |
Types of Investments in Portfolio | % of net assets |
Common Stocks | 99.7% |
Temporary Cash Investments | 0.5% |
Other Assets and Liabilities | (0.2)% |
4
Shareholder Fee Example |
Fund shareholders may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption/exchange fees; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in your fund and to compare these costs with the ongoing cost of investing in other mutual funds.
The example is based on an investment of $1,000 made at the beginning of the period and held for the entire period from November 1, 2014 to April 30, 2015.
Actual Expenses
The table provides information about actual account values and actual expenses for each class. You may use the information, together with the amount you invested, to estimate the expenses that you paid over the period. First, identify the share class you own. Then simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
If you hold Investor Class shares of any American Century Investments fund, or Institutional Class shares of the American Century Diversified Bond Fund, in an American Century Investments account (i.e., not a financial intermediary or retirement plan account), American Century Investments may charge you a $12.50 semiannual account maintenance fee if the value of those shares is less than $10,000. We will redeem shares automatically in one of your accounts to pay the $12.50 fee. 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. Personal accounts include individual accounts, joint accounts, UGMA/UTMA accounts, personal trusts, Coverdell Education Savings Accounts and 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. If you are subject to the Account Maintenance Fee, your account value could be reduced by the fee amount.
Hypothetical Example for Comparison Purposes
The table also provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio of each class of your fund and an assumed rate of return of 5% per year before expenses, which is not the actual return of a fund’s share class. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) or redemption/exchange fees. Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
5
Beginning Account Value 11/1/14 | Ending Account Value 4/30/15 | Expenses Paid During Period(1) 11/1/14 - 4/30/15 | Annualized Expense Ratio(1) | |
Actual | ||||
Investor Class | $1,000 | $1,058.00 | $5.10 | 1.00% |
Institutional Class | $1,000 | $1,058.90 | $4.08 | 0.80% |
A Class | $1,000 | $1,056.60 | $6.37 | 1.25% |
C Class | $1,000 | $1,052.80 | $10.18 | 2.00% |
R Class | $1,000 | $1,055.40 | $7.64 | 1.50% |
Hypothetical | ||||
Investor Class | $1,000 | $1,019.84 | $5.01 | 1.00% |
Institutional Class | $1,000 | $1,020.83 | $4.01 | 0.80% |
A Class | $1,000 | $1,018.60 | $6.26 | 1.25% |
C Class | $1,000 | $1,014.88 | $9.99 | 2.00% |
R Class | $1,000 | $1,017.36 | $7.50 | 1.50% |
(1) | Expenses are equal to the class's annualized expense ratio listed in the table above, multiplied by the average account value over the period, multiplied by 181, the number of days in the most recent fiscal half-year, divided by 365, to reflect the one-half year period. |
6
Schedule of Investments |
APRIL 30, 2015 (UNAUDITED)
Shares | Value | |||
COMMON STOCKS — 99.7% | ||||
Aerospace and Defense — 1.0% | ||||
Esterline Technologies Corp.(1) | 99,301 | $ | 11,051,208 | |
Air Freight and Logistics — 2.2% | ||||
FedEx Corp. | 145,080 | 24,601,216 | ||
Airlines — 0.5% | ||||
Spirit Airlines, Inc.(1) | 80,727 | 5,527,378 | ||
Banks — 0.9% | ||||
SVB Financial Group(1) | 79,649 | 10,574,201 | ||
Beverages — 3.2% | ||||
Boston Beer Co., Inc. (The), Class A(1) | 13,229 | 3,278,146 | ||
Brown-Forman Corp., Class B | 106,205 | 9,582,877 | ||
Constellation Brands, Inc., Class A(1) | 194,873 | 22,593,576 | ||
35,454,599 | ||||
Biotechnology — 5.9% | ||||
Alexion Pharmaceuticals, Inc.(1) | 58,344 | 9,873,555 | ||
Biogen Idec, Inc.(1) | 39,015 | 14,588,879 | ||
Gilead Sciences, Inc.(1) | 245,705 | 24,695,810 | ||
Regeneron Pharmaceuticals, Inc.(1) | 21,175 | 9,686,715 | ||
Vertex Pharmaceuticals, Inc.(1) | 57,827 | 7,128,913 | ||
65,973,872 | ||||
Capital Markets — 2.2% | ||||
Charles Schwab Corp. (The) | 307,154 | 9,368,197 | ||
Morgan Stanley | 402,950 | 15,034,064 | ||
24,402,261 | ||||
Chemicals — 1.9% | ||||
Monsanto Co. | 182,400 | 20,786,304 | ||
Communications Equipment — 2.7% | ||||
Cisco Systems, Inc. | 493,352 | 14,223,338 | ||
Motorola Solutions, Inc. | 191,767 | 11,458,078 | ||
Palo Alto Networks, Inc.(1) | 31,749 | 4,689,963 | ||
30,371,379 | ||||
Consumer Finance — 0.8% | ||||
Discover Financial Services | 144,633 | 8,384,375 | ||
Diversified Financial Services — 0.6% | ||||
McGraw-Hill Cos., Inc. (The) | 59,351 | 6,190,309 | ||
Diversified Telecommunication Services — 0.2% | ||||
Zayo Group Holdings, Inc.(1) | 94,101 | 2,498,382 | ||
Electrical Equipment — 0.6% | ||||
Acuity Brands, Inc. | 40,610 | 6,779,839 | ||
Food and Staples Retailing — 2.6% | ||||
Costco Wholesale Corp. | 130,343 | 18,645,566 |
7
Shares | Value | |||
United Natural Foods, Inc.(1) | 51,161 | $ | 3,451,321 | |
Whole Foods Market, Inc. | 134,098 | 6,404,521 | ||
28,501,408 | ||||
Food Products — 3.6% | ||||
Hain Celestial Group, Inc. (The)(1) | 89,448 | 5,388,347 | ||
Hershey Co. (The) | 94,478 | 8,684,418 | ||
Mondelez International, Inc., Class A | 671,329 | 25,758,894 | ||
39,831,659 | ||||
Health Care Equipment and Supplies — 2.9% | ||||
DexCom, Inc.(1) | 25,443 | 1,719,183 | ||
Intuitive Surgical, Inc.(1) | 14,668 | 7,275,035 | ||
Teleflex, Inc. | 187,066 | 23,001,635 | ||
31,995,853 | ||||
Health Care Providers and Services — 3.7% | ||||
AmerisourceBergen Corp. | 104,401 | 11,933,034 | ||
HCA Holdings, Inc.(1) | 66,075 | 4,890,211 | ||
McKesson Corp. | 66,793 | 14,921,556 | ||
Team Health Holdings, Inc.(1) | 155,737 | 9,277,253 | ||
41,022,054 | ||||
Hotels, Restaurants and Leisure — 2.6% | ||||
Jack in the Box, Inc. | 35,451 | 3,076,083 | ||
La Quinta Holdings, Inc.(1) | 163,390 | 3,934,431 | ||
Noodles & Co.(1) | 61,901 | 1,239,258 | ||
Starbucks Corp. | 427,727 | 21,206,705 | ||
29,456,477 | ||||
Household Durables — 0.4% | ||||
Harman International Industries, Inc. | 31,699 | 4,132,916 | ||
Household Products — 0.6% | ||||
Procter & Gamble Co. (The) | 90,172 | 7,169,576 | ||
Internet and Catalog Retail — 1.5% | ||||
Priceline Group, Inc. (The)(1) | 9,743 | 12,059,983 | ||
TripAdvisor, Inc.(1) | 51,837 | 4,172,360 | ||
16,232,343 | ||||
Internet Software and Services — 9.3% | ||||
Alibaba Group Holding Ltd. ADR(1) | 57,876 | 4,704,740 | ||
CoStar Group, Inc.(1) | 43,372 | 8,866,538 | ||
Facebook, Inc., Class A(1) | 319,238 | 25,146,377 | ||
Google, Inc., Class A(1) | 64,705 | 35,508,163 | ||
Google, Inc., Class C(1) | 30,462 | 16,368,661 | ||
LinkedIn Corp., Class A(1) | 29,106 | 7,338,496 | ||
Twitter, Inc.(1) | 160,216 | 6,242,015 | ||
104,174,990 | ||||
IT Services — 3.3% | ||||
Alliance Data Systems Corp.(1) | 51,382 | 15,276,382 | ||
MasterCard, Inc., Class A | 242,285 | 21,856,530 | ||
37,132,912 |
8
Shares | Value | |||
Leisure Products — 0.5% | ||||
Polaris Industries, Inc. | 43,400 | $ | 5,944,064 | |
Machinery — 3.4% | ||||
Flowserve Corp. | 156,436 | 9,156,199 | ||
Ingersoll-Rand plc | 211,899 | 13,951,430 | ||
Middleby Corp.(1) | 141,000 | 14,288,940 | ||
37,396,569 | ||||
Media — 6.2% | ||||
Comcast Corp., Class A | 603,362 | 34,850,189 | ||
Time Warner, Inc. | 131,123 | 11,068,093 | ||
Twenty-First Century Fox, Inc. | 680,004 | 23,174,536 | ||
69,092,818 | ||||
Multiline Retail — 1.7% | ||||
Dollar Tree, Inc.(1) | 104,392 | 7,976,593 | ||
Target Corp. | 145,610 | 11,478,436 | ||
19,455,029 | ||||
Oil, Gas and Consumable Fuels — 2.9% | ||||
Antero Resources Corp.(1) | 193,993 | 8,595,830 | ||
Concho Resources, Inc.(1) | 74,340 | 9,415,904 | ||
EOG Resources, Inc. | 50,581 | 5,004,990 | ||
Pioneer Natural Resources Co. | 51,458 | 8,890,913 | ||
31,907,637 | ||||
Pharmaceuticals — 5.3% | ||||
Actavis plc(1) | 151,628 | 42,889,496 | ||
Pacira Pharmaceuticals, Inc.(1) | 53,659 | 3,674,569 | ||
Zoetis, Inc. | 293,298 | 13,028,297 | ||
59,592,362 | ||||
Professional Services — 1.4% | ||||
Nielsen NV | 347,216 | 15,603,887 | ||
Real Estate Management and Development — 0.4% | ||||
Jones Lang LaSalle, Inc. | 28,507 | 4,733,872 | ||
Road and Rail — 2.7% | ||||
Canadian Pacific Railway Ltd., New York Shares | 122,691 | 23,382,451 | ||
Kansas City Southern | 61,637 | 6,317,176 | ||
29,699,627 | ||||
Semiconductors and Semiconductor Equipment — 1.2% | ||||
Avago Technologies Ltd. | 60,888 | 7,116,590 | ||
NXP Semiconductors NV(1) | 69,893 | 6,718,115 | ||
13,834,705 | ||||
Software — 7.2% | ||||
Adobe Systems, Inc.(1) | 93,317 | 7,097,691 | ||
Electronic Arts, Inc.(1) | 799,374 | 46,435,636 | ||
Intuit, Inc. | 162,903 | 16,344,058 | ||
Salesforce.com, Inc.(1) | 138,117 | 10,057,680 | ||
79,935,065 |
9
Shares | Value | |||
Specialty Retail — 6.0% | ||||
AutoZone, Inc.(1) | 17,290 | $ | 11,630,291 | |
Home Depot, Inc. (The) | 130,253 | 13,934,466 | ||
Lowe's Cos., Inc. | 405,894 | 27,949,861 | ||
Sally Beauty Holdings, Inc.(1) | 138,495 | 4,322,429 | ||
Signet Jewelers Ltd. | 71,538 | 9,595,392 | ||
67,432,439 | ||||
Technology Hardware, Storage and Peripherals — 5.8% | ||||
Apple, Inc. | 515,665 | 64,535,475 | ||
Textiles, Apparel and Luxury Goods — 0.7% | ||||
Kate Spade & Co.(1) | 100,498 | 3,286,285 | ||
NIKE, Inc., Class B | 48,869 | 4,830,212 | ||
8,116,497 | ||||
Wireless Telecommunication Services — 1.1% | ||||
SBA Communications Corp., Class A(1) | 105,198 | 12,184,032 | ||
TOTAL COMMON STOCKS (Cost $774,321,998) | 1,111,709,589 | |||
TEMPORARY CASH INVESTMENTS — 0.5% | ||||
Repurchase Agreement, Bank of America Merrill Lynch, (collateralized by various U.S. Treasury obligations, 1.375%, 4/30/20, valued at $907,934), in a joint trading account at 0.08%, dated 4/30/15, due 5/1/15 (Delivery value $892,153) | 892,151 | |||
Repurchase Agreement, Credit Suisse First Boston, Inc., (collateralized by various U.S. Treasury obligations, 1.50%, 12/31/18, valued at $2,179,516), in a joint trading account at 0.03%, dated 4/30/15, due 5/1/15 (Delivery value $2,141,165) | 2,141,163 | |||
Repurchase Agreement, Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 3.625%, 2/15/44, valued at $2,554,200), at 0.01%, dated 4/30/15, due 5/1/15 (Delivery value $2,499,001) | 2,499,000 | |||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $5,532,314) | 5,532,314 | |||
TOTAL INVESTMENT SECURITIES — 100.2% (Cost $779,854,312) | 1,117,241,903 | |||
OTHER ASSETS AND LIABILITIES — (0.2)% | (1,771,003) | |||
TOTAL NET ASSETS — 100.0% | $ | 1,115,470,900 |
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS | ||||||||
Currency Purchased | Currency Sold | Counterparty | Settlement Date | Unrealized Appreciation (Depreciation) | ||||
CAD | 632,289 | USD | 525,694 | JPMorgan Chase Bank N.A. | 5/29/15 | $ | (1,826 | ) |
USD | 21,929,713 | CAD | 26,535,610 | JPMorgan Chase Bank N.A. | 5/29/15 | (55,757 | ) | |
$ | (57,583 | ) |
NOTES TO SCHEDULE OF INVESTMENTS | ||
ADR | - | American Depositary Receipt |
CAD | - | Canadian Dollar |
USD | - | United States Dollar |
(1) | Non-income producing. |
See Notes to Financial Statements.
10
Statement of Assets and Liabilities |
APRIL 30, 2015 (UNAUDITED) | |||
Assets | |||
Investment securities, at value (cost of $779,854,312) | $ | 1,117,241,903 | |
Cash | 2,999 | ||
Foreign currency holdings, at value (cost of $69,060) | 61,178 | ||
Receivable for investments sold | 6,195,286 | ||
Receivable for capital shares sold | 360,731 | ||
Dividends and interest receivable | 366,572 | ||
1,124,228,669 | |||
Liabilities | |||
Payable for investments purchased | 7,427,590 | ||
Payable for capital shares redeemed | 326,218 | ||
Unrealized depreciation on forward foreign currency exchange contracts | 57,583 | ||
Accrued management fees | 936,444 | ||
Distribution and service fees payable | 9,934 | ||
8,757,769 | |||
Net Assets | $ | 1,115,470,900 | |
Net Assets Consist of: | |||
Capital (par value and paid-in surplus) | $ | 736,463,353 | |
Accumulated net investment loss | (2,390,223 | ) | |
Undistributed net realized gain | 44,075,644 | ||
Net unrealized appreciation | 337,322,126 | ||
$ | 1,115,470,900 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | ||||
Investor Class, $0.01 Par Value | $1,090,364,153 | 34,662,067 | $31.46 | |||
Institutional Class, $0.01 Par Value | $206,674 | 6,517 | $31.71 | |||
A Class, $0.01 Par Value | $9,200,492 | 295,576 | $31.13* | |||
C Class, $0.01 Par Value | $3,650,438 | 121,084 | $30.15 | |||
R Class, $0.01 Par Value | $12,049,143 | 391,222 | $30.80 |
*Maximum offering price $33.03 (net asset value divided by 0.9425).
See Notes to Financial Statements.
11
Statement of Operations |
FOR THE SIX MONTHS ENDED APRIL 30, 2015 (UNAUDITED) | |||
Investment Income (Loss) | |||
Income: | |||
Dividends (net of foreign taxes withheld of $29,998) | $ | 4,928,989 | |
Interest | 1,052 | ||
4,930,041 | |||
Expenses: | |||
Management fees | 5,541,059 | ||
Distribution and service fees: | |||
A Class | 10,741 | ||
C Class | 18,391 | ||
R Class | 27,127 | ||
Directors' fees and expenses | 19,994 | ||
5,617,312 | |||
Net investment income (loss) | (687,271 | ) | |
Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investment transactions | 42,902,983 | ||
Foreign currency transactions | 1,230,258 | ||
44,133,241 | |||
Change in net unrealized appreciation (depreciation) on: | |||
Investments | 19,055,357 | ||
Translation of assets and liabilities in foreign currencies | (162,171 | ) | |
18,893,186 | |||
Net realized and unrealized gain (loss) | 63,026,427 | ||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 62,339,156 |
See Notes to Financial Statements.
12
Statement of Changes in Net Assets |
SIX MONTHS ENDED APRIL 30, 2015 (UNAUDITED) AND YEAR ENDED OCTOBER 31, 2014 | ||||||
Increase (Decrease) in Net Assets | April 30, 2015 | October 31, 2014 | ||||
Operations | ||||||
Net investment income (loss) | $ | (687,271 | ) | $ | (2,087,065 | ) |
Net realized gain (loss) | 44,133,241 | 162,948,101 | ||||
Change in net unrealized appreciation (depreciation) | 18,893,186 | (42,216,054 | ) | |||
Net increase (decrease) in net assets resulting from operations | 62,339,156 | 118,644,982 | ||||
Distributions to Shareholders | ||||||
From net realized gains: | ||||||
Investor Class | (149,342,881 | ) | (135,254,248 | ) | ||
Institutional Class | (26,645 | ) | (13,915 | ) | ||
A Class | (1,170,337 | ) | (1,123,968 | ) | ||
C Class | (545,627 | ) | (454,606 | ) | ||
R Class | (1,466,459 | ) | (827,562 | ) | ||
Decrease in net assets from distributions | (152,551,949 | ) | (137,674,299 | ) | ||
Capital Share Transactions | ||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | 103,031,169 | 22,307,155 | ||||
Net increase (decrease) in net assets | 12,818,376 | 3,277,838 | ||||
Net Assets | ||||||
Beginning of period | 1,102,652,524 | 1,099,374,686 | ||||
End of period | $ | 1,115,470,900 | $ | 1,102,652,524 | ||
Accumulated net investment loss | $ | (2,390,223 | ) | $ | (1,702,952 | ) |
See Notes to Financial Statements.
13
Notes to Financial Statements |
APRIL 30, 2015 (UNAUDITED)
1. Organization
American Century Mutual Funds, Inc. (the corporation) is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company and is organized as a Maryland corporation. All Cap Growth Fund (the fund) is one fund in a series issued by the corporation. The fund is diversified as defined under the 1940 Act. The fund's investment objective is to seek long-term capital growth.
The fund offers the Investor Class, the Institutional Class, the A Class, the C Class and the R Class. The A Class may incur an initial sales charge. The A Class and C Class may be subject to a contingent deferred sales charge. The share classes differ principally in their respective sales charges and distribution and shareholder servicing expenses and arrangements. The Institutional Class is made available to institutional shareholders or through financial intermediaries whose clients do not require the same level of shareholder and administrative services as shareholders of other classes. As a result, the Institutional Class is charged a lower unified management fee.
2. Significant Accounting Policies
The following is a summary of significant accounting policies consistently followed by the fund in preparation of its financial statements. The fund is an investment company and follows accounting and reporting guidance in accordance with accounting principles generally accepted in the United States of America. This may require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from these estimates. Management evaluated the impact of events or transactions occurring through the date the financial statements were issued that would merit recognition or disclosure.
Investment Valuations — The fund determines the fair value of its investments and computes its net asset value per share at 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. The Board of Directors has adopted valuation policies and procedures to guide the investment advisor in the fund’s investment valuation process and to provide methodologies for the oversight of the fund’s pricing function.
Equity securities that are listed or traded on a domestic securities exchange are valued at the last reported sales price or at the official closing price as provided by the exchange. Equity securities traded on foreign securities exchanges are generally valued at the closing price of such securities on the exchange where primarily traded or at the close of the NYSE, if that is earlier. If no last sales price is reported, or if local convention or regulation so provides, the mean of the latest bid and asked prices may be used. Securities traded over-the-counter are valued at the mean of the latest bid and asked prices, the last sales price, or the official closing price. Equity securities initially expressed in local currencies are translated into U.S. dollars at the mean of the appropriate currency exchange rate at the close of the NYSE as provided by an independent pricing service.
Fixed income securities maturing within 60 days at the time of purchase may be valued at cost, plus or minus any amortized discount or premium or at the evaluated mean as provided by an independent pricing service. Evaluated mean prices are commonly derived through utilization of market models, which may consider, among other factors: trade data, quotations from 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.
Open-end management investment companies are valued at the reported net asset value per share. Repurchase agreements are valued at cost, which approximates fair value. Forward foreign currency exchange contracts are valued at the mean of the appropriate forward exchange rate at the close of the NYSE as provided by an independent pricing service.
If the fund determines that the market price for an investment is not readily available or the valuation methods mentioned above do not reflect an investment’s fair value, such investment is valued as determined in good faith by the Board of Directors or its delegate, in accordance with policies and procedures adopted by the Board of Directors. In its determination of fair value, the fund may review several factors including, but not
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limited to, market information regarding the specific investment or comparable investments and correlation with other investment types, futures indices or general market indicators. Circumstances that may cause the fund to use these procedures to value an investment include, but are not limited to: an investment has been declared in default or is distressed; trading in a security has been suspended during the trading day or a security is not actively trading on its principal exchange; prices received from a regular pricing source are deemed unreliable; or there is a foreign market holiday and no trading occurred.
The fund monitors for significant events occurring after the close of an investment’s primary exchange but before the fund’s net asset value per share is determined. Significant events may include, but are not limited to: corporate announcements and transactions; governmental action and political unrest that could impact a specific investment or an investment sector; or armed conflicts, natural disasters and similar events that could affect investments in a specific country or region. The fund also monitors for significant fluctuations between domestic and foreign markets, as evidenced by the U.S. market or such other indicators that the Board of Directors, or its delegate, deems appropriate. If significant fluctuations in foreign markets are identified, the fund may apply a model-derived factor to the closing price of equity securities traded on foreign securities exchanges. The factor is based on observable market data as provided by an independent pricing service.
Security Transactions — Security transactions are accounted for as of the trade date. Net realized gains and losses are determined on the identified cost basis, which is also used for federal income tax purposes.
Investment Income — Dividend income less foreign taxes withheld, if any, is recorded as of the ex-dividend date. Distributions received on securities that represent a return of capital or long-term capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The fund may estimate the components of distributions received that may be considered nontaxable distributions or long-term capital gain distributions for income tax purposes. Interest income is recorded on the accrual basis and includes accretion of discounts and amortization of premiums.
Foreign Currency Translations — All assets and liabilities initially expressed in foreign currencies are translated into U.S. dollars at prevailing exchange rates at period end. The fund may enter into spot foreign currency exchange contracts to facilitate transactions denominated in a foreign currency. Purchases and sales of investment securities, dividend and interest income, spot foreign currency exchange contracts, and expenses are translated at the rates of exchange prevailing on the respective dates of such transactions. Net realized and unrealized foreign currency exchange gains or losses related to investment securities are a component of net realized gain (loss) on investment transactions and change in net unrealized appreciation (depreciation) on investments, respectively.
Repurchase Agreements — The fund may enter into repurchase agreements with institutions that American Century Investment Management, Inc. (ACIM) (the investment advisor) has determined are creditworthy pursuant to criteria adopted by the Board of Directors. The fund requires that the collateral, represented by securities, received in a repurchase transaction be transferred to the custodian in a manner sufficient to enable the fund to obtain those securities in the event of a default under the repurchase agreement. ACIM monitors, on a daily basis, the securities transferred to ensure the value, including accrued interest, of the securities under each repurchase agreement is equal to or greater than amounts owed to the fund under each repurchase agreement.
Joint Trading Account — Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the fund, along with certain other funds in the American Century Investments family of funds, may transfer uninvested cash balances into a joint trading account. These balances are invested in one or more repurchase agreements that are collateralized by U.S. Treasury or Agency obligations.
Income Tax Status — It is the fund’s policy to distribute substantially all net investment income and net realized gains to shareholders and to otherwise qualify as a regulated investment company under provisions of the Internal Revenue Code. Accordingly, no provision has been made for income taxes. The fund files U.S. federal, state, local and non-U.S. tax returns as applicable. The fund's tax returns are subject to examination by the relevant taxing authority until expiration of the applicable statute of limitations, which is generally three years from the date of filing but can be longer in certain jurisdictions. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination and for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
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Multiple Class — All shares of the fund represent an equal pro rata interest in the net assets of the class to which such shares belong, and have identical voting, dividend, liquidation and other rights and the same terms and conditions, except for class specific expenses and exclusive rights to vote on matters affecting only individual classes. Income, non-class specific expenses, and realized and unrealized capital gains and losses of the fund are allocated to each class of shares based on their relative net assets.
Distributions to Shareholders — Distributions from net investment income and net realized gains, if any, are generally declared and paid annually. The fund may elect to treat a portion of its payment to a redeeming shareholder, which represents the pro rata share of undistributed net investment income and net realized gains, as a distribution for federal income tax purposes (tax equalization).
Indemnifications — Under the corporation’s organizational documents, its officers and directors are indemnified against certain liabilities arising out of the performance of their duties to the fund. In addition, in the normal course of business, the fund enters into contracts that provide general indemnifications. The maximum exposure under these arrangements is unknown as this would involve future claims that may be made against a fund. The risk of material loss from such claims is considered by management to be remote.
3. Fees and Transactions with Related Parties
Certain officers and directors of the corporation are also officers and/or directors of American Century Companies, Inc. (ACC). The corporation’s investment advisor, ACIM, the corporation's distributor, American Century Investment Services, Inc. (ACIS), and the corporation’s transfer agent, American Century Services, LLC, are wholly owned, directly or indirectly, by ACC.
Management Fees — The corporation has entered into a management agreement with ACIM, under which ACIM provides the fund with investment advisory and management services in exchange for a single, unified management fee (the fee) per class. The agreement provides that all expenses of managing and operating the fund, except distribution and service fees, brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), and extraordinary expenses, will be paid by ACIM. The fee is computed and accrued daily based on each class’s daily net assets and paid monthly in arrears. The annual management fee is 1.00% for the Investor Class, A Class, C Class and R Class and 0.80% for the Institutional Class.
Distribution and Service Fees — The Board of Directors has adopted a separate Master Distribution and Individual Shareholder Services Plan for each of the A Class, C Class and R Class (collectively the plans), pursuant to Rule 12b-1 of the 1940 Act. The plans provide that the A Class will pay ACIS an annual distribution and service fee of 0.25%. The plans provide that the C Class will pay ACIS an annual distribution and service fee of 1.00%, of which 0.25% is paid for individual shareholder services and 0.75% is paid for distribution services. The plans provide that the R Class will pay ACIS an annual distribution and service fee of 0.50%. The fees are computed and accrued daily based on each class’s daily net assets and paid monthly in arrears. The fees are used to pay financial intermediaries for distribution and individual shareholder services. Fees incurred under the plans during the six months ended April 30, 2015 are detailed in the Statement of Operations.
Directors' Fees and Expenses — The Board of Directors is responsible for overseeing the investment advisor’s management and operations of the fund. The directors receive detailed information about the fund and its investment advisor regularly throughout the year, and meet at least quarterly with management of the investment advisor to review reports about fund operations. The fund’s officers do not receive compensation from the fund.
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the six months ended April 30, 2015 were $233,473,739 and $273,909,988, respectively.
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5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended April 30, 2015 | Year ended October 31, 2014 | |||||||||
Shares | Amount | Shares | Amount | |||||||
Investor Class/Shares Authorized | 200,000,000 | 200,000,000 | ||||||||
Sold | 959,308 | $ | 30,522,980 | 1,162,515 | $ | 38,387,186 | ||||
Issued in reinvestment of distributions | 5,037,722 | 145,791,678 | 4,246,173 | 132,055,972 | ||||||
Redeemed | (2,448,660 | ) | (77,700,957 | ) | (4,648,558 | ) | (153,313,983 | ) | ||
3,548,370 | 98,613,701 | 760,130 | 17,129,175 | |||||||
Institutional Class/Shares Authorized | 25,000,000 | 25,000,000 | ||||||||
Sold | 332 | 10,629 | 2,427 | 80,496 | ||||||
Issued in reinvestment of distributions | 914 | 26,645 | 446 | 13,915 | ||||||
Redeemed | (189 | ) | (6,061 | ) | (485 | ) | (16,142 | ) | ||
1,057 | 31,213 | 2,388 | 78,269 | |||||||
A Class/Shares Authorized | 25,000,000 | 25,000,000 | ||||||||
Sold | 78,109 | 2,442,742 | 132,615 | 4,368,596 | ||||||
Issued in reinvestment of distributions | 40,835 | 1,170,337 | 36,351 | 1,123,968 | ||||||
Redeemed | (79,981 | ) | (2,533,112 | ) | (152,490 | ) | (4,957,707 | ) | ||
38,963 | 1,079,967 | 16,476 | 534,857 | |||||||
C Class/Shares Authorized | 25,000,000 | 25,000,000 | ||||||||
Sold | 10,884 | 327,494 | 39,397 | 1,268,756 | ||||||
Issued in reinvestment of distributions | 19,578 | 545,053 | 14,564 | 442,613 | ||||||
Redeemed | (26,323 | ) | (789,708 | ) | (31,993 | ) | (1,022,084 | ) | ||
4,139 | 82,839 | 21,968 | 689,285 | |||||||
R Class/Shares Authorized | 25,000,000 | 25,000,000 | ||||||||
Sold | 107,263 | 3,398,348 | 169,022 | 5,520,467 | ||||||
Issued in reinvestment of distributions | 51,654 | 1,466,459 | 26,921 | 827,562 | ||||||
Redeemed | (52,884 | ) | (1,641,358 | ) | (75,880 | ) | (2,472,460 | ) | ||
106,033 | 3,223,449 | 120,063 | 3,875,569 | |||||||
Net increase (decrease) | 3,698,562 | $ | 103,031,169 | 921,025 | $ | 22,307,155 |
6. Fair Value Measurements
The fund’s investments valuation process is based on several considerations and may use multiple inputs to determine the fair value of the investments held by the fund. In conformity with accounting principles generally accepted in the United States of America, the inputs used to determine a valuation are classified into three broad levels.
• | Level 1 valuation inputs consist of unadjusted quoted prices in an active market for identical investments. |
• | Level 2 valuation inputs consist of direct or indirect observable market data (including quoted prices for comparable investments, evaluations of subsequent market events, interest rates, prepayment speeds, credit risk, etc.). These inputs also consist of quoted prices for identical investments initially expressed in local currencies that are adjusted through translation into U.S. dollars. |
• | Level 3 valuation inputs consist of unobservable data (including a fund’s own assumptions). |
The level classification is based on the lowest level input that is significant to the fair valuation measurement. The valuation inputs are not necessarily an indication of the risks associated with investing in these securities or other financial instruments. There were no significant transfers between levels during the period.
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The following is a summary of the level classifications as of period end. The Schedule of Investments provides additional information on the fund’s portfolio holdings.
Level 1 | Level 2 | Level 3 | ||||||
Assets | ||||||||
Investment Securities | ||||||||
Common Stocks | $ | 1,111,709,589 | — | — | ||||
Temporary Cash Investments | — | $ | 5,532,314 | — | ||||
$ | 1,111,709,589 | $ | 5,532,314 | — | ||||
Liabilities | ||||||||
Other Financial Instruments | ||||||||
Forward Foreign Currency Exchange Contracts | — | $ | (57,583 | ) | — |
7. Derivative Instruments
Foreign Currency Risk — The fund is subject to foreign currency exchange rate risk in the normal course of pursuing its investment objectives. The value of foreign investments held by a fund may be significantly affected by changes in foreign currency exchange rates. The dollar value of a foreign security generally decreases when the value of the dollar rises against the foreign currency in which the security is denominated and tends to increase when the value of the dollar declines against such foreign currency. A fund may enter into forward foreign currency exchange contracts to reduce a fund's exposure to foreign currency exchange rate fluctuations. The net U.S. dollar value of foreign currency underlying all contractual commitments held by a fund and the resulting unrealized appreciation or depreciation are determined daily. Realized gain or loss is recorded upon the termination of the contract. Net realized and unrealized gains or losses occurring during the holding period of forward foreign currency exchange contracts are a component of net realized gain (loss) on foreign currency transactions and change in net unrealized appreciation (depreciation) on translation of assets and liabilities in foreign currencies, respectively. A fund bears the risk of an unfavorable change in the foreign currency exchange rate underlying the forward contract. Additionally, losses, up to the fair value, may arise if the counterparties do not perform under the contract terms. The fund's average U.S. dollar exposure to foreign currency risk derivative instruments held during the period was $20,456,771.
The value of foreign currency risk derivative instruments as of April 30, 2015, is disclosed on the Statement of Assets and Liabilities as a liability of $57,583 in unrealized depreciation on forward foreign currency exchange contracts. For the six months ended April 30, 2015, the effect of foreign currency risk derivative instruments on the Statement of Operations was $1,231,091 in net realized gain (loss) on foreign currency transactions and $(156,833) in change in net unrealized appreciation (depreciation) on translation of assets and liabilities in foreign currencies.
8. Federal Tax Information
The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
As of April 30, 2015, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $ | 779,945,353 | |
Gross tax appreciation of investments | $ | 343,662,952 | |
Gross tax depreciation of investments | (6,366,402 | ) | |
Net tax appreciation (depreciation) of investments | $ | 337,296,550 |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales.
As of October 31, 2014, the fund had late-year ordinary loss deferrals of $(1,603,702), which represent certain qualified losses that the fund has elected to treat as having been incurred in the following fiscal year for federal income tax purposes.
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Financial Highlights |
For a Share Outstanding Throughout the Years Ended October 31 (except as noted) | |||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||
Income From Investment Operations: | Distributions From: | 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 | Net Investment Income | Net Realized Gains | Total Distributions | 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 | |||||||||||||||
2015(3) | $34.71 | (0.02) | 1.61 | 1.59 | — | (4.84) | (4.84) | $31.46 | 5.80% | 1.00%(4) | (0.11)%(4) | 21% | $1,090,364 | ||
2014 | $35.63 | (0.06) | 3.64 | 3.58 | — | (4.50) | (4.50) | $34.71 | 11.50% | 1.00% | (0.18)% | 56% | $1,079,950 | ||
2013 | $30.44 | 0.12 | 7.22 | 7.34 | (0.10) | (2.05) | (2.15) | $35.63 | 25.72% | 1.00% | 0.38% | 60% | $1,081,599 | ||
2012 | $28.06 | 0.01 | 3.08 | 3.09 | — | (0.71) | (0.71) | $30.44 | 11.40% | 1.00% | 0.04% | 55% | $961,562 | ||
2011 | $26.07 | (0.02) | 2.01 | 1.99 | — | — | — | $28.06 | 7.63% | 1.00% | (0.08)% | 75% | $935,751 | ||
2010 | $20.86 | (0.05) | 5.26 | 5.21 | — | — | — | $26.07 | 24.98% | 1.01% | (0.22)% | 88% | $959,447 | ||
Institutional Class | |||||||||||||||
2015(3) | $34.92 | 0.01 | 1.62 | 1.63 | — | (4.84) | (4.84) | $31.71 | 5.89% | 0.80%(4) | 0.09%(4) | 21% | $207 | ||
2014 | $35.76 | —(5) | 3.66 | 3.66 | — | (4.50) | (4.50) | $34.92 | 11.71% | 0.80% | 0.02% | 56% | $191 | ||
2013 | $30.50 | 0.16 | 7.26 | 7.42 | (0.11) | (2.05) | (2.16) | $35.76 | 25.98% | 0.80% | 0.58% | 60% | $110 | ||
2012 | $28.06 | 0.09 | 3.06 | 3.15 | — | (0.71) | (0.71) | $30.50 | 11.62% | 0.80% | 0.24% | 55% | $61 | ||
2011(6) | $25.32 | (0.01) | 2.75 | 2.74 | — | — | — | $28.06 | 10.82% | 0.80%(4) | (0.28)%(4) | 75%(7) | $28 | ||
A Class | |||||||||||||||
2015(3) | $34.44 | (0.06) | 1.59 | 1.53 | — | (4.84) | (4.84) | $31.13 | 5.66% | 1.25%(4) | (0.36)%(4) | 21% | $9,200 | ||
2014 | $35.47 | (0.14) | 3.61 | 3.47 | — | (4.50) | (4.50) | $34.44 | 11.22% | 1.25% | (0.43)% | 56% | $8,837 | ||
2013 | $30.36 | 0.04 | 7.19 | 7.23 | (0.07) | (2.05) | (2.12) | $35.47 | 25.42% | 1.25% | 0.13% | 60% | $8,517 | ||
2012 | $28.05 | (0.02) | 3.04 | 3.02 | — | (0.71) | (0.71) | $30.36 | 11.15% | 1.25% | (0.21)% | 55% | $11,334 | ||
2011(6) | $25.32 | (0.02) | 2.75 | 2.73 | — | — | — | $28.05 | 10.78% | 1.25%(4) | (0.73)%(4) | 75%(7) | $28 |
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For a Share Outstanding Throughout the Years Ended October 31 (except as noted) | |||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||
Income From Investment Operations: | Distributions From: | 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 | Net Investment Income | Net Realized Gains | Total Distributions | 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) | |||
C Class | |||||||||||||||
2015(3) | $33.62 | (0.17) | 1.54 | 1.37 | — | (4.84) | (4.84) | $30.15 | 5.28% | 2.00%(4) | (1.11)%(4) | 21% | $3,650 | ||
2014 | $34.96 | (0.38) | 3.54 | 3.16 | — | (4.50) | (4.50) | $33.62 | 10.40% | 2.00% | (1.18)% | 56% | $3,932 | ||
2013 | $30.11 | (0.20) | 7.11 | 6.91 | (0.01) | (2.05) | (2.06) | $34.96 | 24.45% | 2.00% | (0.62)% | 60% | $3,321 | ||
2012 | $28.03 | (0.25) | 3.04 | 2.79 | — | (0.71) | (0.71) | $30.11 | 10.32% | 2.00% | (0.96)% | 55% | $1,993 | ||
2011(6) | $25.32 | (0.03) | 2.74 | 2.71 | — | — | — | $28.03 | 10.70% | 2.00%(4) | (1.48)%(4) | 75%(7) | $28 | ||
R Class | |||||||||||||||
2015(3) | $34.16 | (0.10) | 1.58 | 1.48 | — | (4.84) | (4.84) | $30.80 | 5.54% | 1.50%(4) | (0.61)%(4) | 21% | $12,049 | ||
2014 | $35.30 | (0.22) | 3.58 | 3.36 | — | (4.50) | (4.50) | $34.16 | 10.93% | 1.50% | (0.68)% | 56% | $9,743 | ||
2013 | $30.27 | (0.09) | 7.22 | 7.13 | (0.05) | (2.05) | (2.10) | $35.30 | 25.12% | 1.50% | (0.12)% | 60% | $5,828 | ||
2012 | $28.04 | (0.08) | 3.02 | 2.94 | — | (0.71) | (0.71) | $30.27 | 10.86% | 1.50% | (0.46)% | 55% | $864 | ||
2011(6) | $25.32 | (0.02) | 2.74 | 2.72 | — | — | — | $28.04 | 10.74% | 1.50%(4) | (0.98)%(4) | 75%(7) | $28 |
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 and do not reflect applicable sales charges, if any. Total returns for periods less than one year are not annualized. |
(3) | Six months ended April 30, 2015 (unaudited). |
(4) | Annualized. |
(5) | Per-share amount was less than $0.005. |
(6) | September 30, 2011 (commencement of sale) through October 31, 2011. |
(7) | Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended October 31, 2011. |
See Notes to Financial Statements.
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Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain IRAs are subject to federal income tax withholding, unless you elect not to have withholding apply. Tax will be withheld on the total amount withdrawn even though you may be receiving amounts that are not subject to withholding, such as nondeductible contributions. In such case, excess amounts of withholding could occur. You may adjust your withholding election so that a greater or lesser amount will be withheld.
If you don’t want us to withhold on this amount, you must notify us to not withhold the federal income tax. You may notify us in writing or in certain situations by telephone or through other electronic means. For systematic withdrawals, your withholding election will remain in effect until revoked or changed by filing a new election. You have the right to revoke your election at any time.
Remember, even if you elect not to have income tax withheld, you are liable for paying income tax on the taxable portion of your withdrawal. If you elect not to have income tax withheld or you don’t have enough income tax withheld, you may be responsible for payment of estimated tax. You may incur penalties under the estimated tax rules if your withholding and estimated tax payments are not sufficient. You can reduce or defer the income tax on a distribution by directly or indirectly rolling such distribution over to another IRA or eligible plan. You should consult your tax advisor for additional information.
State tax will be withheld if, at the time of your distribution, your address is within one of the mandatory withholding states and you have federal income tax withheld (or as otherwise required by state law). State taxes will be withheld from your distribution in accordance with the respective state rules.
Distributions you receive from 403(b), 457 and qualified plans are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
A description of the policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund is available without charge, upon request, by calling 1-800-345-2021. It is also available on the "About Us" page of American Century Investments’ website at americancentury.com and on the Securities and Exchange Commission’s website at sec.gov. Information regarding how the investment advisor voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the "About Us" page at americancentury.com. It is also available at sec.gov.
Quarterly Portfolio Disclosure
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-Q. The fund’s Forms N-Q are available on the SEC’s website at sec.gov, and may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The fund also makes its complete schedule of portfolio holdings for the most recent quarter of its fiscal year available on its
website at americancentury.com and, upon request, by calling 1-800-345-2021.
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Notes |
22
Notes |
23
Notes |
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Contact Us | americancentury.com | |
Automated Information Line | 1-800-345-8765 | |
Investor Services Representative | 1-800-345-2021 or 816-531-5575 | |
Investors Using Advisors | 1-800-378-9878 | |
Business, Not-For-Profit, Employer-Sponsored Retirement Plans | 1-800-345-3533 | |
Banks and Trust Companies, Broker-Dealers, Financial Professionals, Insurance Companies | 1-800-345-6488 | |
Telecommunications Relay Service for the Deaf | 711 | |
American Century Mutual Funds, Inc. | ||
Investment Advisor: American Century Investment Management, Inc. Kansas City, Missouri | ||
This report and the statements it contains are submitted for the general information of our shareholders. The report is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus. | ||
©2015 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-85687 1506 |
SEMIANNUAL REPORT | APRIL 30, 2015 |
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Balanced Fund
Table of Contents |
Any opinions expressed in this report reflect those of the author as of the date of the report, and do not necessarily represent the opinions of American Century Investments® or any other person in the American Century Investments organization. Any such opinions are subject to change at any time based upon market or other conditions and American Century Investments disclaims any responsibility to update such opinions. These opinions may not be relied upon as investment advice and, because investment decisions made by American Century Investments funds are based on numerous factors, may not be relied upon as an indication of trading intent on behalf of any American Century Investments fund. Security examples are used for representational purposes only and are not intended as recommendations to purchase or sell securities. Performance information for comparative indices and securities is provided to American Century Investments by third party vendors. To the best of American Century Investments’ knowledge, such information is accurate at the time of printing.
President’s Letter |
![]() | Dear Investor: Thank you for reviewing this semiannual report for the six months ended April 30, 2015. It provides a macroeconomic and financial market overview (below), followed by fund performance, a schedule of fund investments, and other financial information. For additional commentary and updated information on fund performance, key factors that affected asset returns, and other insights regarding the investment markets, we encourage you to visit our website, americancentury.com. |
Jonathan Thomas |
Global Divergence in Monetary Policies Influenced Investor Behavior
The six-month reporting period saw big swings in market returns, triggered in part by central bank moves. In October 2014, just before the period started, the U.S. Federal Reserve ended its latest bond-buying program (quantitative easing, QE). As QE wound down, the U.S. economy enjoyed 5% annualized growth (after inflation) in the third quarter of 2014, the highest rate since the third quarter of 2003. But while QE was ending in the U.S., other major central banks were starting or increasing QE as their economies faltered. A “global divergence” of economic growth and monetary policies opened between the U.S. and most of the rest of the developed world.
This divergence helped fuel increased demand for the U.S. dollar and U.S. dollar-denominated assets, and put downward pressure on commodities prices, most notably oil. Though the resulting dollar rally and oil price decline reversed somewhat in April 2015, the dollar remained 9% higher for the reporting period, as measured by the U.S. Dollar Index, while oil remained more than 25% lower, as measured by both Brent and West Texas Intermediate crude oil futures. In this environment, U.S. stocks and bonds posted moderate gains—the S&P 500 Index and the Barclays U.S. Aggregate Bond Index returned 4.40% and 2.06%, respectively.
We expect monetary policy divergence between the U.S. and other major developed economies to continue this year, accompanied by market volatility. This could present both challenges and opportunities for active investment managers. Upward pressures on inflation and interest rates could develop as the massive amount of global monetary stimulus in progress takes hold and economies improve. But we believe lingering constraining forces will likely keep inflation and interest rates relatively low for the next six months. In this environment, we continue to believe in a disciplined, diversified, long-term investment approach, using professionally managed stock and bond portfolios to meet financial goals. We appreciate your continued trust in us.
Sincerely,
![](https://capedge.com/proxy/N-CSRS/0000100334-15-000051/jonathanthomassig.jpg)
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
2
Performance |
Total Returns as of April 30, 2015 | |||||||
Average Annual Returns | |||||||
Ticker Symbol | 6 months(1) | 1 year | 5 years | 10 years | Since Inception | Inception Date | |
Investor Class | TWBIX | 2.86% | 7.56% | 10.08% | 6.84% | 8.20% | 10/20/88 |
Blended Index(2) | — | 3.55% | 9.62% | 10.39% | 7.17% | 9.12%(3) | — |
S&P 500 Index | — | 4.40% | 12.98% | 14.32% | 8.32% | 10.28%(3) | — |
Barclays U.S. Aggregate Bond Index | — | 2.06% | 4.46% | 4.12% | 4.74% | 6.67%(3) | — |
Institutional Class | ABINX | 2.96% | 7.77% | 10.29% | 7.06% | 5.25% | 5/1/00 |
(1) | Total returns for periods less than one year are not annualized. |
(2) | The blended index combines monthly returns of two widely known indices in proportion to the asset mix of the fund. The S&P 500 Index represents 60% of the index and the remaining 40% is represented by the Barclays U.S. Aggregate Bond Index. |
(3) | Since October 31, 1988, the date nearest the Investor Class’s inception for which data are available. |
Total Annual Fund Operating Expenses | |
Investor Class | Institutional Class |
0.90% | 0.70% |
The total annual fund operating expenses shown is as stated in the fund’s prospectus current as of the date of this report. The prospectus may vary from the expense ratio shown elsewhere in this report because it is based on a different time period, includes acquired fund fees and expenses, and, if applicable, does not include fee waivers or expense reimbursements.
Data presented reflect past performance. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance shown. Investment return and principal value will fluctuate, and redemption value may be more or less than original cost. Data assumes reinvestment of dividends and capital gains, and none of the charts reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. To obtain performance data current to the most recent month end, please call 1-800-345-2021 or visit americancentury.com. For additional information about the fund, please consult the prospectus.
3
Fund Characteristics |
APRIL 30, 2015 | |
Top Ten Common Stocks | % of net assets |
Apple, Inc. | 1.9% |
Microsoft Corp. | 1.8% |
Johnson & Johnson | 1.3% |
Pfizer, Inc. | 1.2% |
Procter & Gamble Co. (The) | 1.1% |
Intel Corp. | 1.0% |
Merck & Co., Inc. | 1.0% |
JPMorgan Chase & Co. | 1.0% |
Cisco Systems, Inc. | 1.0% |
International Business Machines Corp. | 1.0% |
Top Five Common Stocks Industries | % of net assets |
Pharmaceuticals | 4.4% |
Technology Hardware, Storage and Peripherals | 3.4% |
Biotechnology | 3.2% |
Software | 3.1% |
Banks | 2.9% |
Types of Investments in Portfolio | % of net assets |
Common Stocks | 59.5% |
U.S. Treasury Securities | 12.7% |
Corporate Bonds | 11.8% |
U.S. Government Agency Mortgage-Backed Securities | 10.7% |
Collateralized Mortgage Obligations | 2.2% |
Commercial Mortgage-Backed Securities | 2.1% |
Asset-Backed Securities | 1.2% |
Sovereign Governments and Agencies | 0.6% |
Municipal Securities | 0.4% |
Temporary Cash Investments | 1.1% |
Other Assets and Liabilities | (2.3)% |
Key Fixed-Income Portfolio Statistics | |
Weighted Average Life | 7.2 years |
Average Duration (effective) | 5.3 years |
4
Shareholder Fee Example |
Fund shareholders may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption/exchange fees; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in your fund and to compare these costs with the ongoing cost of investing in other mutual funds.
The example is based on an investment of $1,000 made at the beginning of the period and held for the entire period from November 1, 2014 to April 30, 2015.
Actual Expenses
The table provides information about actual account values and actual expenses for each class. You may use the information, together with the amount you invested, to estimate the expenses that you paid over the period. First, identify the share class you own. Then simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
If you hold Investor Class shares of any American Century Investments fund, or Institutional Class shares of the American Century Diversified Bond Fund, in an American Century Investments account (i.e., not a financial intermediary or retirement plan account), American Century Investments may charge you a $12.50 semiannual account maintenance fee if the value of those shares is less than $10,000. We will redeem shares automatically in one of your accounts to pay the $12.50 fee. 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. Personal accounts include individual accounts, joint accounts, UGMA/UTMA accounts, personal trusts, Coverdell Education Savings Accounts and 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. If you are subject to the Account Maintenance Fee, your account value could be reduced by the fee amount.
Hypothetical Example for Comparison Purposes
The table also provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio of each class of your fund and an assumed rate of return of 5% per year before expenses, which is not the actual return of a fund’s share class. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) or redemption/exchange fees. Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
5
Beginning Account Value 11/1/14 | Ending Account Value 4/30/15 | Expenses Paid During Period(1) 11/1/14 - 4/30/15 | Annualized Expense Ratio(1) | |
Actual | ||||
Investor Class | $1,000 | $1,028.60 | $4.53 | 0.90% |
Institutional Class | $1,000 | $1,029.60 | $3.52 | 0.70% |
Hypothetical | ||||
Investor Class | $1,000 | $1,020.33 | $4.51 | 0.90% |
Institutional Class | $1,000 | $1,021.32 | $3.51 | 0.70% |
(1) | Expenses are equal to the class's annualized expense ratio listed in the table above, multiplied by the average account value over the period, multiplied by 181, the number of days in the most recent fiscal half-year, divided by 365, to reflect the one-half year period. |
6
Schedule of Investments |
APRIL 30, 2015 (UNAUDITED)
Shares/ Principal Amount | Value | |||||
COMMON STOCKS — 59.5% | ||||||
Aerospace and Defense — 2.3% | ||||||
Boeing Co. (The) | 31,213 | $ | 4,474,071 | |||
Honeywell International, Inc. | 61,982 | 6,255,224 | ||||
Lockheed Martin Corp. | 20,599 | 3,843,773 | ||||
Teledyne Technologies, Inc.(1) | 3,824 | 401,405 | ||||
United Technologies Corp. | 46,612 | 5,302,115 | ||||
20,276,588 | ||||||
Air Freight and Logistics — 0.3% | ||||||
FedEx Corp. | 13,988 | 2,371,945 | ||||
Airlines — 1.1% | ||||||
Delta Air Lines, Inc. | 42,562 | 1,899,968 | ||||
Southwest Airlines Co. | 135,270 | 5,486,551 | ||||
United Continental Holdings, Inc.(1) | 35,642 | 2,129,253 | ||||
9,515,772 | ||||||
Auto Components — 0.5% | ||||||
Delphi Automotive plc | 7,931 | 658,273 | ||||
Magna International, Inc. | 82,052 | 4,137,882 | ||||
4,796,155 | ||||||
Banks — 2.9% | ||||||
Bank of America Corp. | 335,630 | 5,346,586 | ||||
Citigroup, Inc. | 157,324 | 8,388,516 | ||||
JPMorgan Chase & Co. | 141,782 | 8,969,129 | ||||
Wells Fargo & Co. | 59,091 | 3,255,914 | ||||
25,960,145 | ||||||
Beverages — 1.1% | ||||||
Coca-Cola Co. (The) | 9,727 | 394,527 | ||||
Dr Pepper Snapple Group, Inc. | 59,433 | 4,432,513 | ||||
PepsiCo, Inc. | 56,101 | 5,336,327 | ||||
10,163,367 | ||||||
Biotechnology — 3.2% | ||||||
Amgen, Inc. | 53,273 | 8,412,340 | ||||
Biogen Idec, Inc.(1) | 17,229 | 6,442,440 | ||||
Celgene Corp.(1) | 56,467 | 6,101,824 | ||||
Gilead Sciences, Inc.(1) | 76,730 | 7,712,132 | ||||
28,668,736 | ||||||
Capital Markets — 1.3% | ||||||
Ameriprise Financial, Inc. | 35,195 | 4,409,230 | ||||
Evercore Partners, Inc., Class A | 8,850 | 426,924 | ||||
Franklin Resources, Inc. | 86,469 | 4,458,342 | ||||
Waddell & Reed Financial, Inc., Class A | 46,086 | 2,272,961 | ||||
11,567,457 |
7
Shares/ Principal Amount | Value | |||||
Chemicals — 2.1% | ||||||
Cabot Corp. | 54,813 | $ | 2,342,708 | |||
Dow Chemical Co. (The) | 119,869 | 6,113,319 | ||||
E.I. du Pont de Nemours & Co. | 53,716 | 3,932,011 | ||||
LyondellBasell Industries NV, Class A | 58,364 | 6,041,841 | ||||
18,429,879 | ||||||
Commercial Services and Supplies — 0.1% | ||||||
Pitney Bowes, Inc. | 9,837 | 220,054 | ||||
Waste Management, Inc. | 9,864 | 488,564 | ||||
708,618 | ||||||
Communications Equipment — 1.8% | ||||||
Cisco Systems, Inc. | 308,943 | 8,906,827 | ||||
QUALCOMM, Inc. | 108,727 | 7,393,436 | ||||
16,300,263 | ||||||
Consumer Finance — 0.1% | ||||||
Cash America International, Inc. | 27,613 | 715,729 | ||||
Containers and Packaging — 0.1% | ||||||
Sonoco Products Co. | 29,894 | 1,335,963 | ||||
Diversified Consumer Services — 0.4% | ||||||
H&R Block, Inc. | 132,923 | 4,019,591 | ||||
Diversified Financial Services — 0.3% | ||||||
Berkshire Hathaway, Inc., Class B(1) | 19,198 | 2,710,950 | ||||
Diversified Telecommunication Services — 0.3% | ||||||
AT&T, Inc. | 33,307 | 1,153,754 | ||||
Verizon Communications, Inc. | 39,324 | 1,983,503 | ||||
3,137,257 | ||||||
Electric Utilities — 0.4% | ||||||
Entergy Corp. | 44,549 | 3,438,292 | ||||
Electrical Equipment — 0.6% | ||||||
Emerson Electric Co. | 86,908 | 5,112,798 | ||||
Energy Equipment and Services — 0.9% | ||||||
Schlumberger Ltd. | 82,369 | 7,792,931 | ||||
Food and Staples Retailing — 1.7% | ||||||
CVS Health Corp. | 40,340 | 4,005,359 | ||||
Kroger Co. (The) | 53,432 | 3,681,999 | ||||
Wal-Mart Stores, Inc. | 95,509 | 7,454,477 | ||||
15,141,835 | ||||||
Food Products — 2.2% | ||||||
Archer-Daniels-Midland Co. | 112,732 | 5,510,340 | ||||
Bunge Ltd. | 43,735 | 3,777,392 | ||||
ConAgra Foods, Inc. | 54,521 | 1,970,934 | ||||
Ingredion, Inc. | 44,416 | 3,526,631 | ||||
Pilgrim's Pride Corp. | 132,443 | 3,271,342 | ||||
Sanderson Farms, Inc. | 24,049 | 1,806,561 | ||||
19,863,200 |
8
Shares/ Principal Amount | Value | |||||
Health Care Equipment and Supplies — 1.2% | ||||||
Boston Scientific Corp.(1) | 25,857 | $ | 460,772 | |||
C.R. Bard, Inc. | 5,198 | 865,883 | ||||
St. Jude Medical, Inc. | 68,268 | 4,782,173 | ||||
Stryker Corp. | 50,046 | 4,616,243 | ||||
10,725,071 | ||||||
Health Care Providers and Services — 0.7% | ||||||
Aetna, Inc. | 55,905 | 5,974,567 | ||||
Cardinal Health, Inc. | 5,887 | 496,510 | ||||
UnitedHealth Group, Inc. | 1,758 | 195,841 | ||||
6,666,918 | ||||||
Health Care Technology — 0.5% | ||||||
Cerner Corp.(1) | 63,396 | 4,552,467 | ||||
Hotels, Restaurants and Leisure — 1.5% | ||||||
Brinker International, Inc. | 45,144 | 2,499,623 | ||||
Chipotle Mexican Grill, Inc.(1) | 4,133 | 2,567,998 | ||||
Las Vegas Sands Corp. | 70,904 | 3,749,404 | ||||
Wyndham Worldwide Corp. | 50,611 | 4,322,179 | ||||
13,139,204 | ||||||
Household Products — 1.9% | ||||||
Energizer Holdings, Inc. | 35,553 | 4,857,251 | ||||
Procter & Gamble Co. (The) | 126,528 | 10,060,241 | ||||
Spectrum Brands Holdings, Inc. | 19,253 | 1,760,302 | ||||
16,677,794 | ||||||
Industrial Conglomerates — 1.2% | ||||||
3M Co. | 43,234 | 6,761,365 | ||||
General Electric Co. | 130,671 | 3,538,571 | ||||
10,299,936 | ||||||
Insurance — 1.2% | ||||||
American International Group, Inc. | 6,588 | 370,839 | ||||
Amtrust Financial Services, Inc. | 70,670 | 4,202,745 | ||||
Aspen Insurance Holdings Ltd. | 63,540 | 2,969,224 | ||||
Hanover Insurance Group, Inc. (The) | 47,146 | 3,232,801 | ||||
10,775,609 | ||||||
Internet Software and Services — 1.3% | ||||||
eBay, Inc.(1) | 106,196 | 6,186,979 | ||||
Google, Inc., Class A(1) | 9,101 | 4,994,356 | ||||
11,181,335 | ||||||
IT Services — 1.9% | ||||||
Accenture plc, Class A | 57,096 | 5,289,944 | ||||
Amdocs Ltd. | 53,897 | 2,968,108 | ||||
International Business Machines Corp. | 51,833 | 8,878,475 | ||||
17,136,527 | ||||||
Life Sciences Tools and Services — 0.1% | ||||||
Bio-Rad Laboratories, Inc., Class A(1) | 8,816 | 1,185,311 |
9
Shares/ Principal Amount | Value | |||||
Machinery — 2.1% | ||||||
Caterpillar, Inc. | 64,715 | $ | 5,622,439 | |||
Cummins, Inc. | 33,307 | 4,605,026 | ||||
Parker-Hannifin Corp. | 37,159 | 4,435,298 | ||||
Stanley Black & Decker, Inc. | 44,844 | 4,426,103 | ||||
19,088,866 | ||||||
Media — 0.9% | ||||||
Cablevision Systems Corp., Class A | 49,889 | 996,782 | ||||
Comcast Corp., Class A | 75,686 | 4,371,623 | ||||
DIRECTV(1) | 7,427 | 673,666 | ||||
Omnicom Group, Inc. | 18,348 | 1,390,045 | ||||
Walt Disney Co. (The) | 3,197 | 347,578 | ||||
7,779,694 | ||||||
Metals and Mining — 0.3% | ||||||
Alcoa, Inc. | 219,827 | 2,950,078 | ||||
Multiline Retail — 2.0% | ||||||
Big Lots, Inc. | 22,336 | 1,017,852 | ||||
Dillard's, Inc., Class A | 28,850 | 3,796,371 | ||||
Kohl's Corp. | 57,238 | 4,101,103 | ||||
Macy's, Inc. | 78,245 | 5,056,974 | ||||
Target Corp. | 44,644 | 3,519,287 | ||||
17,491,587 | ||||||
Oil, Gas and Consumable Fuels — 2.6% | ||||||
Chevron Corp. | 15,218 | 1,690,111 | ||||
CVR Energy, Inc. | 8,201 | 328,368 | ||||
EOG Resources, Inc. | 58,818 | 5,820,041 | ||||
Exxon Mobil Corp. | 73,627 | 6,432,791 | ||||
Kosmos Energy Ltd.(1) | 64,308 | 628,932 | ||||
Marathon Petroleum Corp. | 13,322 | 1,313,150 | ||||
Valero Energy Corp. | 100,074 | 5,694,211 | ||||
Western Refining, Inc. | 39,365 | 1,734,028 | ||||
23,641,632 | ||||||
Pharmaceuticals — 4.4% | ||||||
AbbVie, Inc. | 116,304 | 7,520,217 | ||||
Johnson & Johnson | 120,507 | 11,954,294 | ||||
Merck & Co., Inc. | 151,897 | 9,046,985 | ||||
Pfizer, Inc. | 312,015 | 10,586,669 | ||||
39,108,165 | ||||||
Real Estate Investment Trusts (REITs) — 1.5% | ||||||
DuPont Fabros Technology, Inc. | 14,469 | 450,709 | ||||
Hospitality Properties Trust | 77,734 | 2,338,239 | ||||
Host Hotels & Resorts, Inc. | 223,600 | 4,503,304 | ||||
Lamar Advertising Co., Class A | 41,948 | 2,431,306 | ||||
LaSalle Hotel Properties | 76,078 | 2,791,302 | ||||
Ryman Hospitality Properties, Inc. | 7,960 | 458,814 | ||||
12,973,674 |
10
Shares/ Principal Amount | Value | |||||
Real Estate Management and Development — 0.6% | ||||||
CBRE Group, Inc.(1) | 35,847 | $ | 1,374,374 | |||
Jones Lang LaSalle, Inc. | 22,138 | 3,676,236 | ||||
5,050,610 | ||||||
Semiconductors and Semiconductor Equipment — 1.9% | ||||||
Broadcom Corp., Class A | 116,623 | 5,155,320 | ||||
Intel Corp. | 279,693 | 9,104,007 | ||||
Texas Instruments, Inc. | 47,532 | 2,576,710 | ||||
16,836,037 | ||||||
Software — 3.1% | ||||||
Microsoft Corp. | 322,522 | 15,687,470 | ||||
Oracle Corp. | 199,588 | 8,706,029 | ||||
Synopsys, Inc.(1) | 76,609 | 3,591,430 | ||||
27,984,929 | ||||||
Specialty Retail — 1.2% | ||||||
Bed Bath & Beyond, Inc.(1) | 18,917 | 1,332,892 | ||||
Foot Locker, Inc. | 75,747 | 4,503,159 | ||||
Gap, Inc. (The) | 99,397 | 3,940,097 | ||||
Lowe's Cos., Inc. | 13,493 | 929,128 | ||||
10,705,276 | ||||||
Technology Hardware, Storage and Peripherals — 3.4% | ||||||
Apple, Inc. | 136,127 | 17,036,294 | ||||
EMC Corp. | 47,413 | 1,275,884 | ||||
Hewlett-Packard Co. | 173,358 | 5,715,613 | ||||
Seagate Technology plc | 28,154 | 1,653,203 | ||||
Western Digital Corp. | 44,995 | 4,397,811 | ||||
30,078,805 | ||||||
Thrifts and Mortgage Finance — 0.3% | ||||||
EverBank Financial Corp. | 88,459 | 1,642,684 | ||||
Nationstar Mortgage Holdings, Inc.(1) | 31,804 | 798,280 | ||||
2,440,964 | ||||||
TOTAL COMMON STOCKS (Cost $434,835,200) | 530,497,960 | |||||
U.S. TREASURY SECURITIES — 12.7% | ||||||
U.S. Treasury Bonds, 3.50%, 2/15/39 | $ | 3,000,000 | 3,431,016 | |||
U.S. Treasury Bonds, 4.375%, 11/15/39 | 2,000,000 | 2,607,032 | ||||
U.S. Treasury Bonds, 4.375%, 5/15/41 | 1,850,000 | 2,435,786 | ||||
U.S. Treasury Bonds, 3.125%, 11/15/41 | 1,500,000 | 1,615,546 | ||||
U.S. Treasury Bonds, 2.75%, 11/15/42 | 2,180,000 | 2,178,808 | ||||
U.S. Treasury Bonds, 2.875%, 5/15/43 | 300,000 | 307,336 | ||||
U.S. Treasury Bonds, 3.125%, 8/15/44 | 1,830,000 | 1,970,253 | ||||
U.S. Treasury Bonds, 3.00%, 11/15/44 | 1,000,000 | 1,051,953 | ||||
U.S. Treasury Bonds, 2.50%, 2/15/45 | 950,000 | 902,500 | ||||
U.S. Treasury Notes, 0.375%, 11/15/15(6) | 1,200,000 | 1,201,781 | ||||
U.S. Treasury Notes, 1.375%, 11/30/15 | 1,750,000 | 1,762,715 | ||||
U.S. Treasury Notes, 0.375%, 1/15/16 | 700,000 | 700,984 |
11
Shares/ Principal Amount | Value | |||||
U.S. Treasury Notes, 0.50%, 6/15/16 | $ | 3,000,000 | $ | 3,006,327 | ||
U.S. Treasury Notes, 0.625%, 12/15/16 | 5,600,000 | 5,612,690 | ||||
U.S. Treasury Notes, 0.50%, 7/31/17 | 500,000 | 497,890 | ||||
U.S. Treasury Notes, 0.75%, 10/31/17 | 1,500,000 | 1,499,296 | ||||
U.S. Treasury Notes, 1.875%, 10/31/17 | 3,300,000 | 3,391,007 | ||||
U.S. Treasury Notes, 0.875%, 1/31/18 | 3,400,000 | 3,402,921 | ||||
U.S. Treasury Notes, 1.00%, 2/15/18 | 17,600,000 | 17,667,373 | ||||
U.S. Treasury Notes, 1.00%, 3/15/18 | 5,000,000 | 5,016,405 | ||||
U.S. Treasury Notes, 0.75%, 4/15/18 | 1,200,000 | 1,194,750 | ||||
U.S. Treasury Notes, 2.625%, 4/30/18 | 875,000 | 918,955 | ||||
U.S. Treasury Notes, 1.375%, 7/31/18 | 11,130,000 | 11,258,685 | ||||
U.S. Treasury Notes, 1.375%, 9/30/18 | 2,500,000 | 2,525,780 | ||||
U.S. Treasury Notes, 1.25%, 10/31/18 | 2,350,000 | 2,362,300 | ||||
U.S. Treasury Notes, 1.25%, 11/30/18 | 3,100,000 | 3,114,533 | ||||
U.S. Treasury Notes, 1.375%, 11/30/18 | 200,000 | 201,859 | ||||
U.S. Treasury Notes, 1.625%, 7/31/19 | 2,800,000 | 2,837,845 | ||||
U.S. Treasury Notes, 1.625%, 8/31/19 | 8,350,000 | 8,460,245 | ||||
U.S. Treasury Notes, 1.50%, 10/31/19 | 5,650,000 | 5,683,550 | ||||
U.S. Treasury Notes, 1.50%, 11/30/19 | 2,600,000 | 2,615,439 | ||||
U.S. Treasury Notes, 1.625%, 12/31/19 | 950,000 | 960,020 | ||||
U.S. Treasury Notes, 1.25%, 1/31/20 | 1,450,000 | 1,439,692 | ||||
U.S. Treasury Notes, 1.375%, 2/29/20 | 1,500,000 | 1,497,070 | ||||
U.S. Treasury Notes, 1.375%, 3/31/20 | 2,950,000 | 2,941,705 | ||||
U.S. Treasury Notes, 2.00%, 10/31/21 | 4,950,000 | 5,026,185 | ||||
TOTAL U.S. TREASURY SECURITIES (Cost $111,232,853) | 113,298,232 | |||||
CORPORATE BONDS — 11.8% | ||||||
Aerospace and Defense — 0.1% | ||||||
Lockheed Martin Corp., 4.25%, 11/15/19 | 250,000 | 275,875 | ||||
Lockheed Martin Corp., 3.80%, 3/1/45 | 100,000 | 96,564 | ||||
Raytheon Co., 2.50%, 12/15/22 | 210,000 | 209,917 | ||||
United Technologies Corp., 6.05%, 6/1/36 | 250,000 | 323,852 | ||||
United Technologies Corp., 5.70%, 4/15/40 | 120,000 | 150,291 | ||||
United Technologies Corp., 4.50%, 6/1/42 | 30,000 | 32,114 | ||||
1,088,613 | ||||||
Auto Components — 0.1% | ||||||
Schaeffler Finance BV, 4.25%, 5/15/21(2) | 200,000 | 202,000 | ||||
Tenneco, Inc., 6.875%, 12/15/20 | 100,000 | 106,500 | ||||
ZF North America Capital, Inc., 4.00%, 4/29/20(2) | 150,000 | 151,687 | ||||
460,187 | ||||||
Automobiles — 0.3% | ||||||
American Honda Finance Corp., 1.50%, 9/11/17(2) | 70,000 | 70,492 | ||||
American Honda Finance Corp., 2.125%, 10/10/18 | 150,000 | 153,197 | ||||
Daimler Finance North America LLC, 1.30%, 7/31/15(2) | 200,000 | 200,362 | ||||
Daimler Finance North America LLC, 2.625%, 9/15/16(2) | 210,000 | 214,783 | ||||
Ford Motor Co., 4.75%, 1/15/43 | 70,000 | 73,401 | ||||
Ford Motor Credit Co. LLC, 2.15%, 1/9/18 | 200,000 | 202,014 |
12
Shares/ Principal Amount | Value | |||||
Ford Motor Credit Co. LLC, 5.00%, 5/15/18 | $ | 400,000 | $ | 435,847 | ||
Ford Motor Credit Co. LLC, 8.125%, 1/15/20 | 150,000 | 186,686 | ||||
Ford Motor Credit Co. LLC, 5.875%, 8/2/21 | 440,000 | 515,016 | ||||
General Motors Co., 5.00%, 4/1/35 | 170,000 | 177,710 | ||||
General Motors Financial Co., Inc., 3.25%, 5/15/18 | 220,000 | 225,548 | ||||
Jaguar Land Rover Automotive plc, 4.125%, 12/15/18(2) | 150,000 | 154,125 | ||||
2,609,181 | ||||||
Banks — 1.8% | ||||||
Bank of America Corp., 3.75%, 7/12/16 | 400,000 | 412,589 | ||||
Bank of America Corp., 6.50%, 8/1/16 | 480,000 | 510,708 | ||||
Bank of America Corp., 5.75%, 12/1/17 | 360,000 | 395,805 | ||||
Bank of America Corp., 5.625%, 7/1/20 | 110,000 | 126,120 | ||||
Bank of America Corp., 5.70%, 1/24/22 | 220,000 | 255,446 | ||||
Bank of America Corp., 4.10%, 7/24/23 | 70,000 | 73,791 | ||||
Bank of America Corp., MTN, 4.00%, 4/1/24 | 220,000 | 230,918 | ||||
Bank of America Corp., MTN, 4.20%, 8/26/24 | 380,000 | 384,791 | ||||
Bank of America Corp., MTN, 4.00%, 1/22/25 | 300,000 | 298,063 | ||||
Bank of America Corp., MTN, 5.00%, 1/21/44 | 110,000 | 121,884 | ||||
Bank of America N.A., 5.30%, 3/15/17 | 870,000 | 927,507 | ||||
Bank of Nova Scotia, 2.55%, 1/12/17 | 150,000 | 154,013 | ||||
Barclays Bank plc, 5.14%, 10/14/20 | 200,000 | 221,591 | ||||
Barclays Bank plc, 3.75%, 5/15/24 | 200,000 | 208,157 | ||||
BB&T Corp., MTN, 2.05%, 6/19/18 | 100,000 | 101,301 | ||||
BPCE SA, 5.15%, 7/21/24(2) | 200,000 | 210,541 | ||||
Branch Banking & Trust Co., 3.80%, 10/30/26 | 130,000 | 135,627 | ||||
Capital One Financial Corp., 1.00%, 11/6/15 | 90,000 | 90,119 | ||||
Capital One Financial Corp., 3.20%, 2/5/25 | 290,000 | 286,147 | ||||
Citigroup, Inc., 4.45%, 1/10/17 | 100,000 | 105,189 | ||||
Citigroup, Inc., 5.50%, 2/15/17 | 90,000 | 96,394 | ||||
Citigroup, Inc., 1.75%, 5/1/18 | 710,000 | 709,012 | ||||
Citigroup, Inc., 4.50%, 1/14/22 | 560,000 | 612,813 | ||||
Citigroup, Inc., 4.05%, 7/30/22 | 70,000 | 73,052 | ||||
Citigroup, Inc., 3.30%, 4/27/25 | 680,000 | 675,106 | ||||
Citigroup, Inc., 6.00%, 10/31/33 | 120,000 | 139,161 | ||||
Citigroup, Inc., 5.30%, 5/6/44 | 140,000 | 151,871 | ||||
Commerzbank AG, 8.125%, 9/19/23(2) | 200,000 | 242,250 | ||||
Cooperatieve Centrale Raiffeisen-Boerenleenbank BA, 3.875%, 2/8/22 | 430,000 | 460,856 | ||||
Fifth Third Bancorp, 4.30%, 1/16/24 | 110,000 | 117,289 | ||||
Fifth Third Bank, 2.875%, 10/1/21 | 250,000 | 252,675 | ||||
HBOS plc, MTN, 6.75%, 5/21/18(2) | 200,000 | 224,124 | ||||
HSBC Holdings plc, 5.10%, 4/5/21 | 230,000 | 261,461 | ||||
Intesa Sanpaolo SpA, 5.02%, 6/26/24(2) | 230,000 | 232,194 | ||||
JM Smucker Co. (The), 2.50%, 3/15/20(2) | 110,000 | 111,177 | ||||
JPMorgan Chase & Co., 6.00%, 1/15/18 | 520,000 | 579,680 | ||||
JPMorgan Chase & Co., 4.625%, 5/10/21 | 460,000 | 510,330 | ||||
JPMorgan Chase & Co., 3.25%, 9/23/22 | 220,000 | 223,533 |
13
Shares/ Principal Amount | Value | |||||
JPMorgan Chase & Co., 3.875%, 9/10/24 | $ | 370,000 | $ | 375,194 | ||
JPMorgan Chase & Co., 3.125%, 1/23/25 | 570,000 | 562,890 | ||||
JPMorgan Chase Bank N.A., 5.875%, 6/13/16 | 250,000 | 263,373 | ||||
KeyCorp, MTN, 2.30%, 12/13/18 | 220,000 | 224,004 | ||||
KFW, 2.00%, 6/1/16 | 260,000 | 264,505 | ||||
KFW, 2.00%, 10/4/22 | 300,000 | 301,683 | ||||
Royal Bank of Scotland Group plc, 6.125%, 12/15/22 | 230,000 | 254,856 | ||||
Royal Bank of Scotland plc (The), 4.375%, 3/16/16 | 250,000 | 257,395 | ||||
Standard Chartered plc, 3.95%, 1/11/23(2) | 200,000 | 199,297 | ||||
SunTrust Banks, Inc., 3.60%, 4/15/16 | 50,000 | 51,184 | ||||
U.S. Bancorp, 3.44%, 2/1/16 | 120,000 | 122,372 | ||||
U.S. Bancorp, MTN, 3.00%, 3/15/22 | 110,000 | 112,956 | ||||
U.S. Bancorp, MTN, 3.60%, 9/11/24 | 330,000 | 342,778 | ||||
US Bank N.A., 2.80%, 1/27/25 | 500,000 | 495,125 | ||||
Wells Fargo & Co., 3.68%, 6/15/16 | 140,000 | 144,609 | ||||
Wells Fargo & Co., 4.125%, 8/15/23 | 200,000 | 212,970 | ||||
Wells Fargo & Co., MTN, 2.10%, 5/8/17 | 20,000 | 20,442 | ||||
Wells Fargo & Co., MTN, 4.60%, 4/1/21 | 450,000 | 502,857 | ||||
Wells Fargo & Co., MTN, 3.00%, 2/19/25 | 160,000 | 158,047 | ||||
Wells Fargo & Co., MTN, 4.10%, 6/3/26 | 210,000 | 218,047 | ||||
Wells Fargo & Co., MTN, 4.65%, 11/4/44 | 80,000 | 81,844 | ||||
16,089,713 | ||||||
Beverages — 0.2% | ||||||
Anheuser-Busch InBev Worldwide, Inc., 7.75%, 1/15/19 | 460,000 | 554,617 | ||||
Anheuser-Busch InBev Worldwide, Inc., 2.50%, 7/15/22 | 460,000 | 455,036 | ||||
Coca-Cola Co. (The), 1.80%, 9/1/16 | 180,000 | 182,920 | ||||
Pernod-Ricard SA, 2.95%, 1/15/17(2) | 180,000 | 184,847 | ||||
1,377,420 | ||||||
Biotechnology — 0.2% | ||||||
Amgen, Inc., 2.125%, 5/15/17 | 180,000 | 183,338 | ||||
Amgen, Inc., 4.10%, 6/15/21 | 100,000 | 108,129 | ||||
Amgen, Inc., 5.375%, 5/15/43 | 250,000 | 283,557 | ||||
Celgene Corp., 3.25%, 8/15/22 | 190,000 | 194,700 | ||||
Celgene Corp., 3.625%, 5/15/24 | 300,000 | 311,197 | ||||
Gilead Sciences, Inc., 4.40%, 12/1/21 | 310,000 | 347,794 | ||||
1,428,715 | ||||||
Building Products† | ||||||
Masco Corp., 4.45%, 4/1/25 | 170,000 | 175,525 | ||||
Capital Markets — 0.1% | ||||||
Ameriprise Financial, Inc., 4.00%, 10/15/23 | 140,000 | 150,638 | ||||
Bear Stearns Cos. LLC (The), 6.40%, 10/2/17 | 370,000 | 412,006 | ||||
Jefferies Group, Inc., 5.125%, 4/13/18 | 110,000 | 116,263 | ||||
678,907 | ||||||
Chemicals — 0.2% | ||||||
Ashland, Inc., 4.75%, 8/15/22 | 210,000 | 216,300 | ||||
Dow Chemical Co. (The), 2.50%, 2/15/16 | 110,000 | 111,513 |
14
Shares/ Principal Amount | Value | |||||
Dow Chemical Co. (The), 4.25%, 11/15/20 | $ | 100,000 | $ | 109,490 | ||
Eastman Chemical Co., 2.70%, 1/15/20 | 210,000 | 213,917 | ||||
Eastman Chemical Co., 3.60%, 8/15/22 | 198,000 | 204,897 | ||||
Ecolab, Inc., 4.35%, 12/8/21 | 250,000 | 275,210 | ||||
LyondellBasell Industries NV, 5.00%, 4/15/19 | 200,000 | 220,061 | ||||
LyondellBasell Industries NV, 4.625%, 2/26/55 | 140,000 | 135,470 | ||||
Mosaic Co. (The), 4.25%, 11/15/23 | 140,000 | 148,989 | ||||
Mosaic Co. (The), 5.625%, 11/15/43 | 120,000 | 139,097 | ||||
1,774,944 | ||||||
Commercial Services and Supplies — 0.1% | ||||||
Clean Harbors, Inc., 5.25%, 8/1/20 | 180,000 | 186,300 | ||||
Covanta Holding Corp., 5.875%, 3/1/24 | 150,000 | 156,000 | ||||
Pitney Bowes, Inc., 4.625%, 3/15/24 | 160,000 | 165,859 | ||||
Republic Services, Inc., 3.55%, 6/1/22 | 220,000 | 228,167 | ||||
Waste Management, Inc., 4.10%, 3/1/45 | 150,000 | 145,888 | ||||
882,214 | ||||||
Communications Equipment† | ||||||
CC Holdings GS V LLC / Crown Castle GS III Corp., 3.85%, 4/15/23 | 260,000 | 262,364 | ||||
Cisco Systems, Inc., 5.90%, 2/15/39 | 130,000 | 160,373 | ||||
422,737 | ||||||
Construction Materials† | ||||||
Owens Corning, 4.20%, 12/15/22 | 160,000 | 166,207 | ||||
Consumer Finance — 0.3% | ||||||
American Express Centurion Bank, MTN, 6.00%, 9/13/17 | 250,000 | 276,448 | ||||
American Express Co., 1.55%, 5/22/18 | 220,000 | 220,078 | ||||
American Express Credit Corp., 1.30%, 7/29/16 | 180,000 | 180,999 | ||||
Capital One Bank USA N.A., 2.30%, 6/5/19 | 250,000 | 250,561 | ||||
Capital One Bank USA N.A., 3.375%, 2/15/23 | 250,000 | 251,858 | ||||
CIT Group, Inc., 4.25%, 8/15/17 | 470,000 | 479,400 | ||||
CIT Group, Inc., 5.00%, 8/15/22 | 90,000 | 92,644 | ||||
Discover Bank, 2.00%, 2/21/18 | 250,000 | 250,620 | ||||
Equifax, Inc., 3.30%, 12/15/22 | 140,000 | 142,612 | ||||
GLP Capital LP / GLP Financing II, Inc., 4.875%, 11/1/20 | 420,000 | 429,450 | ||||
John Deere Capital Corp., MTN, 3.15%, 10/15/21 | 100,000 | 104,690 | ||||
PNC Bank N.A., 6.00%, 12/7/17 | 290,000 | 322,175 | ||||
Synchrony Financial, 3.00%, 8/15/19 | 90,000 | 91,776 | ||||
3,093,311 | ||||||
Containers and Packaging — 0.1% | ||||||
Ball Corp., 4.00%, 11/15/23 | 180,000 | 177,300 | ||||
Crown Americas LLC / Crown Americas Capital Corp. IV, 4.50%, 1/15/23 | 210,000 | 212,100 | ||||
Rock-Tenn Co., 3.50%, 3/1/20 | 140,000 | 145,601 | ||||
Rock-Tenn Co., 4.00%, 3/1/23 | 240,000 | 250,266 | ||||
785,267 | ||||||
Diversified Consumer Services† | ||||||
Catholic Health Initiatives, 1.60%, 11/1/17 | 45,000 | 45,080 | ||||
Catholic Health Initiatives, 2.95%, 11/1/22 | 110,000 | 109,630 |
15
Shares/ Principal Amount | Value | |||||
Johns Hopkins University, 4.08%, 7/1/53 | $ | 45,000 | $ | 45,922 | ||
University of Notre Dame du Lac, 3.44%, 2/15/45 | 130,000 | 125,292 | ||||
325,924 | ||||||
Diversified Financial Services — 1.0% | ||||||
Ally Financial, Inc., 2.75%, 1/30/17 | 340,000 | 339,660 | ||||
Denali Borrower LLC / Denali Finance Corp., 5.625%, 10/15/20(2) | 140,000 | 149,975 | ||||
Deutsche Bank AG, VRN, 4.30%, 5/24/23 | 200,000 | 194,504 | ||||
General Electric Capital Corp., 5.30%, 2/11/21 | 40,000 | 46,372 | ||||
General Electric Capital Corp., MTN, 2.30%, 4/27/17 | 420,000 | 431,445 | ||||
General Electric Capital Corp., MTN, 5.625%, 9/15/17 | 490,000 | 541,087 | ||||
General Electric Capital Corp., MTN, 4.375%, 9/16/20 | 870,000 | 969,606 | ||||
General Electric Capital Corp., MTN, 4.65%, 10/17/21 | 120,000 | 136,439 | ||||
Goldman Sachs Group, Inc. (The), 2.375%, 1/22/18 | 330,000 | 336,162 | ||||
Goldman Sachs Group, Inc. (The), 2.90%, 7/19/18 | 530,000 | 546,767 | ||||
Goldman Sachs Group, Inc. (The), 5.75%, 1/24/22 | 460,000 | 533,844 | ||||
Goldman Sachs Group, Inc. (The), 4.00%, 3/3/24 | 300,000 | 314,421 | ||||
Goldman Sachs Group, Inc. (The), 3.50%, 1/23/25 | 160,000 | 160,511 | ||||
Goldman Sachs Group, Inc. (The), 6.75%, 10/1/37 | 260,000 | 328,366 | ||||
Goldman Sachs Group, Inc. (The), MTN, 5.375%, 3/15/20 | 110,000 | 124,652 | ||||
Goldman Sachs Group, Inc. (The), MTN, 4.80%, 7/8/44 | 220,000 | 234,695 | ||||
Icahn Enterprises LP / Icahn Enterprises Finance Corp., 3.50%, 3/15/17 | 150,000 | 151,125 | ||||
Morgan Stanley, 2.65%, 1/27/20 | 90,000 | 91,155 | ||||
Morgan Stanley, 5.00%, 11/24/25 | 610,000 | 662,325 | ||||
Morgan Stanley, MTN, 6.625%, 4/1/18 | 690,000 | 782,183 | ||||
Morgan Stanley, MTN, 5.625%, 9/23/19 | 870,000 | 986,399 | ||||
Morgan Stanley, MTN, 3.70%, 10/23/24 | 300,000 | 307,584 | ||||
UBS AG (Stamford Branch), 5.875%, 12/20/17 | 321,000 | 355,986 | ||||
8,725,263 | ||||||
Diversified Telecommunication Services — 0.7% | ||||||
AT&T, Inc., 2.625%, 12/1/22 | 290,000 | 279,990 | ||||
AT&T, Inc., 3.40%, 5/15/25(3) | 500,000 | 496,401 | ||||
AT&T, Inc., 6.55%, 2/15/39 | 287,000 | 350,830 | ||||
AT&T, Inc., 4.30%, 12/15/42 | 130,000 | 119,401 | ||||
British Telecommunications plc, 5.95%, 1/15/18 | 480,000 | 536,214 | ||||
CenturyLink, Inc., 6.00%, 4/1/17 | 60,000 | 64,275 | ||||
CenturyLink, Inc., Series Q, 6.15%, 9/15/19 | 140,000 | 152,250 | ||||
Deutsche Telekom International Finance BV, 2.25%, 3/6/17(2) | 250,000 | 254,446 | ||||
Deutsche Telekom International Finance BV, 6.75%, 8/20/18 | 210,000 | 243,818 | ||||
Frontier Communications Corp., 8.25%, 4/15/17 | 160,000 | 177,600 | ||||
Frontier Communications Corp., 8.50%, 4/15/20 | 150,000 | 166,875 | ||||
Orange SA, 4.125%, 9/14/21 | 210,000 | 229,669 | ||||
Orange SA, 5.50%, 2/6/44 | 80,000 | 92,321 | ||||
Telecom Italia Capital SA, 7.00%, 6/4/18 | 240,000 | 268,500 | ||||
Telecom Italia Capital SA, 6.00%, 9/30/34 | 120,000 | 126,000 | ||||
Telefonica Emisiones SAU, 5.46%, 2/16/21 | 100,000 | 113,705 | ||||
Verizon Communications, Inc., 3.65%, 9/14/18 | 480,000 | 508,919 |
16
Shares/ Principal Amount | Value | |||||
Verizon Communications, Inc., 3.50%, 11/1/21 | $ | 130,000 | $ | 135,592 | ||
Verizon Communications, Inc., 5.15%, 9/15/23 | 350,000 | 395,854 | ||||
Verizon Communications, Inc., 5.05%, 3/15/34 | 570,000 | 610,119 | ||||
Verizon Communications, Inc., 4.75%, 11/1/41 | 150,000 | 150,045 | ||||
Verizon Communications, Inc., 6.55%, 9/15/43 | 140,000 | 175,745 | ||||
Verizon Communications, Inc., 4.86%, 8/21/46 | 250,000 | 252,158 | ||||
Verizon Communications, Inc., 5.01%, 8/21/54 | 199,000 | 197,768 | ||||
Windstream Corp., 7.875%, 11/1/17 | 60,000 | 64,912 | ||||
6,163,407 | ||||||
Electrical Equipment† | ||||||
Belden, Inc., 5.25%, 7/15/24(2) | 180,000 | 183,150 | ||||
Electronic Equipment, Instruments and Components† | ||||||
Jabil Circuit, Inc., 7.75%, 7/15/16 | 200,000 | 215,250 | ||||
Jabil Circuit, Inc., 5.625%, 12/15/20 | 50,000 | 54,750 | ||||
270,000 | ||||||
Energy Equipment and Services — 0.1% | ||||||
Ensco plc, 4.70%, 3/15/21 | 270,000 | 277,770 | ||||
Ensco plc, 5.20%, 3/15/25 | 80,000 | 82,654 | ||||
Noble Holding International Ltd., 5.95%, 4/1/25 | 75,000 | 73,914 | ||||
Schlumberger Investment SA, 3.65%, 12/1/23 | 170,000 | 180,070 | ||||
Transocean, Inc., 6.50%, 11/15/20 | 70,000 | 62,737 | ||||
Weatherford International Ltd., 4.50%, 4/15/22 | 130,000 | 125,737 | ||||
802,882 | ||||||
Food and Staples Retailing — 0.2% | ||||||
CVS Health Corp., 2.75%, 12/1/22 | 170,000 | 170,838 | ||||
Delhaize Group SA, 5.70%, 10/1/40 | 90,000 | 97,060 | ||||
Dollar General Corp., 3.25%, 4/15/23 | 150,000 | 146,444 | ||||
Kroger Co. (The), 6.40%, 8/15/17 | 200,000 | 222,333 | ||||
Kroger Co. (The), 3.30%, 1/15/21 | 330,000 | 341,898 | ||||
Sysco Corp., 3.50%, 10/2/24 | 220,000 | 226,518 | ||||
Target Corp., 3.50%, 7/1/24 | 210,000 | 221,004 | ||||
Wal-Mart Stores, Inc., 2.55%, 4/11/23 | 50,000 | 50,225 | ||||
Wal-Mart Stores, Inc., 5.625%, 4/15/41 | 110,000 | 138,734 | ||||
Wal-Mart Stores, Inc., 4.30%, 4/22/44 | 390,000 | 421,035 | ||||
2,036,089 | ||||||
Food Products — 0.1% | ||||||
Kellogg Co., 4.45%, 5/30/16 | 200,000 | 207,729 | ||||
Kraft Foods Group, Inc., 5.00%, 6/4/42 | 220,000 | 238,272 | ||||
Mondelez International, Inc., 4.00%, 2/1/24 | 220,000 | 236,113 | ||||
Tyson Foods, Inc., 4.50%, 6/15/22 | 180,000 | 196,509 | ||||
878,623 | ||||||
Gas Utilities — 0.6% | ||||||
Enbridge Energy Partners LP, 6.50%, 4/15/18 | 130,000 | 144,639 | ||||
Enbridge Energy Partners LP, 5.20%, 3/15/20 | 100,000 | 110,207 | ||||
Enbridge, Inc., 4.50%, 6/10/44 | 120,000 | 110,194 | ||||
Energy Transfer Equity LP, 7.50%, 10/15/20 | 150,000 | 169,500 |
17
Shares/ Principal Amount | Value | |||||
Energy Transfer Partners LP, 4.15%, 10/1/20 | $ | 200,000 | $ | 211,961 | ||
Energy Transfer Partners LP, 3.60%, 2/1/23 | 160,000 | 159,079 | ||||
Energy Transfer Partners LP, 6.50%, 2/1/42 | 180,000 | 206,119 | ||||
Enterprise Products Operating LLC, 3.70%, 6/1/15 | 150,000 | 150,308 | ||||
Enterprise Products Operating LLC, 6.30%, 9/15/17 | 300,000 | 333,820 | ||||
Enterprise Products Operating LLC, 4.85%, 3/15/44 | 390,000 | 402,326 | ||||
Enterprise Products Operating LLC, VRN, 7.03%, 1/15/18 | 140,000 | 152,075 | ||||
Kinder Morgan Energy Partners LP, 6.50%, 4/1/20 | 210,000 | 243,071 | ||||
Kinder Morgan Energy Partners LP, 5.30%, 9/15/20 | 170,000 | 187,884 | ||||
Kinder Morgan Energy Partners LP, 3.95%, 9/1/22 | 170,000 | 172,775 | ||||
Kinder Morgan Energy Partners LP, 6.50%, 9/1/39 | 210,000 | 230,823 | ||||
Kinder Morgan, Inc., 7.25%, 6/1/18 | 150,000 | 170,807 | ||||
Kinder Morgan, Inc., 4.30%, 6/1/25 | 80,000 | 81,312 | ||||
Kinder Morgan, Inc., 5.55%, 6/1/45 | 150,000 | 150,256 | ||||
Magellan Midstream Partners LP, 6.55%, 7/15/19 | 150,000 | 175,863 | ||||
Magellan Midstream Partners LP, 5.15%, 10/15/43 | 80,000 | 87,440 | ||||
MarkWest Energy Partners LP / MarkWest Energy Finance Corp., 6.75%, 11/1/20 | 60,000 | 63,000 | ||||
MarkWest Energy Partners LP / MarkWest Energy Finance Corp., 6.50%, 8/15/21 | 90,000 | 94,950 | ||||
MarkWest Energy Partners LP / MarkWest Energy Finance Corp., 4.875%, 12/1/24 | 130,000 | 135,122 | ||||
Plains All American Pipeline LP / PAA Finance Corp., 3.65%, 6/1/22 | 310,000 | 320,405 | ||||
Sunoco Logistics Partners Operations LP, 3.45%, 1/15/23 | 330,000 | 323,953 | ||||
Targa Resources Partners LP / Targa Resources Partners Finance Corp., 4.25%, 11/15/23 | 210,000 | 205,800 | ||||
TransCanada PipeLines Ltd., 2.50%, 8/1/22 | 200,000 | 195,375 | ||||
Williams Cos., Inc. (The), 3.70%, 1/15/23 | 50,000 | 47,372 | ||||
Williams Cos., Inc. (The), 5.75%, 6/24/44 | 90,000 | 84,932 | ||||
Williams Partners LP, 4.125%, 11/15/20 | 200,000 | 211,202 | ||||
Williams Partners LP, 5.40%, 3/4/44 | 240,000 | 233,556 | ||||
5,566,126 | ||||||
Health Care Equipment and Supplies — 0.1% | ||||||
Baxter International, Inc., 3.20%, 6/15/23 | 80,000 | 80,080 | ||||
Becton Dickinson and Co., 3.73%, 12/15/24 | 360,000 | 372,627 | ||||
Medtronic, Inc., 2.50%, 3/15/20(2) | 130,000 | 133,171 | ||||
Medtronic, Inc., 2.75%, 4/1/23 | 200,000 | 200,201 | ||||
Medtronic, Inc., 3.50%, 3/15/25(2) | 180,000 | 186,452 | ||||
Medtronic, Inc., 4.375%, 3/15/35(2) | 210,000 | 222,257 | ||||
Zimmer Holdings, Inc., 2.70%, 4/1/20 | 120,000 | 121,295 | ||||
1,316,083 | ||||||
Health Care Providers and Services — 0.2% | ||||||
Aetna, Inc., 2.75%, 11/15/22 | 130,000 | 129,688 | ||||
CHS / Community Health Systems, Inc., 5.125%, 8/15/18 | 240,000 | 249,600 | ||||
Express Scripts Holding Co., 2.65%, 2/15/17 | 510,000 | 521,996 | ||||
Express Scripts Holding Co., 7.25%, 6/15/19 | 170,000 | 203,629 | ||||
HCA, Inc., 3.75%, 3/15/19 | 310,000 | 320,075 | ||||
NYU Hospitals Center, 4.43%, 7/1/42 | 90,000 | 88,047 |
18
Shares/ Principal Amount | Value | |||||
UnitedHealth Group, Inc., 2.875%, 12/15/21 | $ | 230,000 | $ | 235,348 | ||
UnitedHealth Group, Inc., 2.875%, 3/15/23 | 130,000 | 131,456 | ||||
Universal Health Services, Inc., 7.125%, 6/30/16 | 160,000 | 170,600 | ||||
Universal Health Services, Inc., 4.75%, 8/1/22(2) | 130,000 | 136,662 | ||||
2,187,101 | ||||||
Hotels, Restaurants and Leisure — 0.1% | ||||||
McDonald's Corp., MTN, 3.25%, 6/10/24 | 200,000 | 206,928 | ||||
Royal Caribbean Cruises Ltd., 5.25%, 11/15/22 | 160,000 | 171,100 | ||||
Wyndham Worldwide Corp., 2.95%, 3/1/17 | 110,000 | 112,485 | ||||
490,513 | ||||||
Household Durables — 0.1% | ||||||
D.R. Horton, Inc., 3.625%, 2/15/18 | 270,000 | 276,412 | ||||
D.R. Horton, Inc., 5.75%, 8/15/23 | 110,000 | 119,900 | ||||
Lennar Corp., 4.75%, 12/15/17 | 210,000 | 220,500 | ||||
Lennar Corp., 4.50%, 6/15/19 | 160,000 | 165,600 | ||||
MDC Holdings, Inc., 5.50%, 1/15/24 | 140,000 | 140,000 | ||||
Toll Brothers Finance Corp., 6.75%, 11/1/19 | 100,000 | 114,000 | ||||
TRI Pointe Holdings, Inc., 4.375%, 6/15/19(2) | 100,000 | 98,875 | ||||
1,135,287 | ||||||
Industrial Conglomerates — 0.1% | ||||||
General Electric Co., 5.25%, 12/6/17 | 230,000 | 253,607 | ||||
General Electric Co., 2.70%, 10/9/22 | 210,000 | 212,465 | ||||
General Electric Co., 4.125%, 10/9/42 | 180,000 | 186,844 | ||||
Ingersoll-Rand Luxembourg Finance SA, 3.55%, 11/1/24 | 170,000 | 171,869 | ||||
824,785 | ||||||
Insurance — 0.5% | ||||||
ACE INA Holdings, Inc., 3.15%, 3/15/25 | 180,000 | 183,436 | ||||
AerCap Ireland Capital Ltd. / AerCap Global Aviation Trust, 3.75%, 5/15/19(2) | 150,000 | 152,250 | ||||
Allstate Corp. (The), VRN, 5.75%, 8/15/23 | 90,000 | 98,269 | ||||
American International Group, Inc., 4.875%, 6/1/22 | 550,000 | 621,037 | ||||
American International Group, Inc., 4.50%, 7/16/44 | 120,000 | 123,768 | ||||
American International Group, Inc., MTN, 5.85%, 1/16/18 | 210,000 | 233,947 | ||||
Berkshire Hathaway Finance Corp., 4.25%, 1/15/21 | 140,000 | 155,706 | ||||
Berkshire Hathaway Finance Corp., 3.00%, 5/15/22 | 90,000 | 93,322 | ||||
Berkshire Hathaway, Inc., 4.50%, 2/11/43 | 220,000 | 242,931 | ||||
Hartford Financial Services Group, Inc. (The), 5.95%, 10/15/36 | 50,000 | 61,858 | ||||
International Lease Finance Corp., 6.25%, 5/15/19 | 100,000 | 110,750 | ||||
Liberty Mutual Group, Inc., 4.95%, 5/1/22(2) | 60,000 | 66,152 | ||||
Liberty Mutual Group, Inc., 4.85%, 8/1/44(2) | 210,000 | 219,491 | ||||
Lincoln National Corp., 6.25%, 2/15/20 | 160,000 | 187,753 | ||||
Markel Corp., 4.90%, 7/1/22 | 190,000 | 209,029 | ||||
Markel Corp., 3.625%, 3/30/23 | 100,000 | 101,785 | ||||
MetLife, Inc., 1.76%, 12/15/17 | 90,000 | 91,211 | ||||
MetLife, Inc., 4.125%, 8/13/42 | 110,000 | 111,204 | ||||
MetLife, Inc., 4.875%, 11/13/43 | 110,000 | 125,105 | ||||
Metropolitan Life Global Funding I, 3.00%, 1/10/23(2) | 200,000 | 202,527 |
19
Shares/ Principal Amount | Value | |||||
Principal Financial Group, Inc., 3.30%, 9/15/22 | $ | 70,000 | $ | 71,188 | ||
Prudential Financial, Inc., MTN, 5.375%, 6/21/20 | 70,000 | 79,986 | ||||
Prudential Financial, Inc., MTN, 5.625%, 5/12/41 | 220,000 | 254,818 | ||||
Prudential Financial, Inc., MTN, 4.60%, 5/15/44 | 190,000 | 193,589 | ||||
TIAA Asset Management Finance Co. LLC, 4.125%, 11/1/24(2) | 120,000 | 126,055 | ||||
Travelers Cos., Inc. (The), 4.60%, 8/1/43 | 100,000 | 113,064 | ||||
Voya Financial, Inc., 5.50%, 7/15/22 | 180,000 | 207,338 | ||||
Voya Financial, Inc., 5.70%, 7/15/43 | 160,000 | 192,875 | ||||
WR Berkley Corp., 4.625%, 3/15/22 | 130,000 | 140,641 | ||||
WR Berkley Corp., 4.75%, 8/1/44 | 90,000 | 91,890 | ||||
XLIT Ltd., 4.45%, 3/31/25 | 50,000 | 50,455 | ||||
4,913,430 | ||||||
Internet Software and Services — 0.1% | ||||||
Alibaba Group Holding Ltd., 3.125%, 11/28/21(2) | 200,000 | 200,365 | ||||
Netflix, Inc., 5.375%, 2/1/21 | 200,000 | 210,000 | ||||
Netflix, Inc., 5.75%, 3/1/24 | 40,000 | 42,500 | ||||
452,865 | ||||||
IT Services — 0.1% | ||||||
Fidelity National Information Services, Inc., 1.45%, 6/5/17 | 150,000 | 149,950 | ||||
Fidelity National Information Services, Inc., 5.00%, 3/15/22 | 100,000 | 105,826 | ||||
Fidelity National Information Services, Inc., 3.50%, 4/15/23 | 110,000 | 110,923 | ||||
Xerox Corp., 2.95%, 3/15/17 | 80,000 | 82,304 | ||||
449,003 | ||||||
Life Sciences Tools and Services — 0.1% | ||||||
Thermo Fisher Scientific, Inc., 3.60%, 8/15/21 | 150,000 | 157,369 | ||||
Thermo Fisher Scientific, Inc., 3.30%, 2/15/22 | 80,000 | 81,482 | ||||
Thermo Fisher Scientific, Inc., 4.15%, 2/1/24 | 180,000 | 192,822 | ||||
Thermo Fisher Scientific, Inc., 5.30%, 2/1/44 | 150,000 | 174,709 | ||||
606,382 | ||||||
Machinery — 0.1% | ||||||
Caterpillar Financial Services Corp., MTN, 2.85%, 6/1/22 | 220,000 | 224,594 | ||||
Deere & Co., 5.375%, 10/16/29 | 200,000 | 245,164 | ||||
Oshkosh Corp., 5.375%, 3/1/22 | 290,000 | 303,775 | ||||
773,533 | ||||||
Media — 0.7% | ||||||
21st Century Fox America, Inc., 3.00%, 9/15/22 | 240,000 | 243,399 | ||||
21st Century Fox America, Inc., 6.90%, 8/15/39 | 150,000 | 201,525 | ||||
21st Century Fox America, Inc., 4.75%, 9/15/44 | 190,000 | 204,447 | ||||
CBS Corp., 3.50%, 1/15/25 | 170,000 | 170,473 | ||||
CBS Corp., 4.85%, 7/1/42 | 60,000 | 60,644 | ||||
Comcast Corp., 5.90%, 3/15/16 | 339,000 | 354,693 | ||||
Comcast Corp., 6.40%, 5/15/38 | 310,000 | 405,750 | ||||
Comcast Corp., 4.75%, 3/1/44 | 310,000 | 340,366 | ||||
DirecTV Holdings LLC / DirecTV Financing Co., Inc., 5.00%, 3/1/21 | 250,000 | 277,067 | ||||
DirecTV Holdings LLC / DirecTV Financing Co., Inc., 4.45%, 4/1/24 | 120,000 | 126,929 | ||||
Discovery Communications LLC, 5.625%, 8/15/19 | 90,000 | 101,686 |
20
Shares/ Principal Amount | Value | |||||
Discovery Communications LLC, 3.25%, 4/1/23 | $ | 100,000 | $ | 99,373 | ||
DISH DBS Corp., 7.125%, 2/1/16 | 50,000 | 51,813 | ||||
Embarq Corp., 8.00%, 6/1/36 | 120,000 | 141,900 | ||||
Gannett Co., Inc., 5.125%, 7/15/20 | 330,000 | 346,912 | ||||
Interpublic Group of Cos., Inc. (The), 4.00%, 3/15/22 | 160,000 | 167,367 | ||||
Lamar Media Corp., 5.375%, 1/15/24 | 180,000 | 188,802 | ||||
NBCUniversal Media LLC, 5.15%, 4/30/20 | 90,000 | 103,155 | ||||
NBCUniversal Media LLC, 4.375%, 4/1/21 | 380,000 | 422,170 | ||||
NBCUniversal Media LLC, 2.875%, 1/15/23 | 120,000 | 121,443 | ||||
Nielsen Finance LLC / Nielsen Finance Co., 5.00%, 4/15/22(2) | 160,000 | 161,480 | ||||
Omnicom Group, Inc., 3.625%, 5/1/22 | 50,000 | 52,470 | ||||
Scripps Networks Interactive, Inc., 2.75%, 11/15/19 | 110,000 | 110,730 | ||||
Time Warner Cable, Inc., 6.75%, 7/1/18 | 130,000 | 145,074 | ||||
Time Warner Cable, Inc., 5.50%, 9/1/41 | 70,000 | 65,937 | ||||
Time Warner Cable, Inc., 4.50%, 9/15/42 | 100,000 | 86,465 | ||||
Time Warner, Inc., 4.70%, 1/15/21 | 140,000 | 154,519 | ||||
Time Warner, Inc., 7.70%, 5/1/32 | 200,000 | 279,342 | ||||
Time Warner, Inc., 5.375%, 10/15/41 | 100,000 | 113,146 | ||||
Time Warner, Inc., 5.35%, 12/15/43 | 120,000 | 134,688 | ||||
Viacom, Inc., 4.50%, 3/1/21 | 110,000 | 119,111 | ||||
Viacom, Inc., 3.125%, 6/15/22 | 190,000 | 187,957 | ||||
Virgin Media Secured Finance plc, 5.25%, 1/15/26(2) | 200,000 | 199,250 | ||||
Walt Disney Co. (The), MTN, 2.35%, 12/1/22 | 130,000 | 129,190 | ||||
Walt Disney Co. (The), MTN, 4.125%, 6/1/44 | 230,000 | 244,006 | ||||
6,313,279 | ||||||
Metals and Mining — 0.2% | ||||||
Barrick North America Finance LLC, 4.40%, 5/30/21 | 230,000 | 237,399 | ||||
Barrick North America Finance LLC, 5.75%, 5/1/43 | 70,000 | 71,147 | ||||
Freeport-McMoRan, Inc., 4.55%, 11/14/24 | 80,000 | 77,264 | ||||
Glencore Finance Canada Ltd., 4.95%, 11/15/21(2) | 110,000 | 118,834 | ||||
Newmont Mining Corp., 6.25%, 10/1/39 | 80,000 | 80,314 | ||||
Southern Copper Corp., 5.25%, 11/8/42 | 100,000 | 92,432 | ||||
Steel Dynamics, Inc., 6.125%, 8/15/19 | 157,000 | 168,382 | ||||
Teck Resources Ltd., 3.15%, 1/15/17 | 110,000 | 111,384 | ||||
Vale Overseas Ltd., 5.625%, 9/15/19 | 280,000 | 299,561 | ||||
Vale Overseas Ltd., 4.625%, 9/15/20 | 150,000 | 154,365 | ||||
1,411,082 | ||||||
Multi-Utilities — 0.6% | ||||||
Berkshire Hathaway Energy Co., 3.50%, 2/1/25 | 160,000 | 166,482 | ||||
CenterPoint Energy Houston Electric LLC, 3.55%, 8/1/42 | 70,000 | 66,270 | ||||
CMS Energy Corp., 8.75%, 6/15/19 | 180,000 | 225,601 | ||||
Consolidated Edison Co. of New York, Inc., 3.95%, 3/1/43 | 150,000 | 152,440 | ||||
Constellation Energy Group, Inc., 5.15%, 12/1/20 | 220,000 | 246,025 | ||||
Consumers Energy Co., 2.85%, 5/15/22 | 50,000 | 51,005 | ||||
Consumers Energy Co., 3.375%, 8/15/23 | 50,000 | 52,585 | ||||
Dominion Resources, Inc., 6.40%, 6/15/18 | 190,000 | 216,771 |
21
Shares/ Principal Amount | Value | |||||
Dominion Resources, Inc., 2.75%, 9/15/22 | $ | 210,000 | $ | 207,296 | ||
Dominion Resources, Inc., 3.625%, 12/1/24 | 160,000 | 165,112 | ||||
Dominion Resources, Inc., 4.90%, 8/1/41 | 130,000 | 144,052 | ||||
Dominion Resources, Inc., VRN, 7.50%, 6/30/16 | 120,000 | 121,932 | ||||
DPL, Inc., 6.50%, 10/15/16 | 44,000 | 46,310 | ||||
Duke Energy Corp., 1.625%, 8/15/17 | 150,000 | 151,710 | ||||
Duke Energy Corp., 3.55%, 9/15/21 | 90,000 | 95,477 | ||||
Duke Energy Florida, Inc., 6.35%, 9/15/37 | 110,000 | 151,425 | ||||
Duke Energy Florida, Inc., 3.85%, 11/15/42 | 220,000 | 223,604 | ||||
Duke Energy Progress, Inc., 4.15%, 12/1/44 | 130,000 | 138,248 | ||||
Edison International, 3.75%, 9/15/17 | 130,000 | 137,610 | ||||
Exelon Generation Co. LLC, 4.25%, 6/15/22 | 120,000 | 126,004 | ||||
Exelon Generation Co. LLC, 5.60%, 6/15/42 | 70,000 | 78,498 | ||||
FirstEnergy Corp., 2.75%, 3/15/18 | 135,000 | 138,024 | ||||
FirstEnergy Corp., 4.25%, 3/15/23 | 260,000 | 270,539 | ||||
Florida Power & Light Co., 4.125%, 2/1/42 | 140,000 | 149,369 | ||||
Georgia Power Co., 4.30%, 3/15/42 | 70,000 | 74,416 | ||||
IPALCO Enterprises, Inc., 5.00%, 5/1/18 | 230,000 | 246,100 | ||||
MidAmerican Energy Co., 4.40%, 10/15/44 | 90,000 | 98,709 | ||||
NextEra Energy Capital Holdings, Inc., VRN, 7.30%, 9/1/17 | 210,000 | 221,143 | ||||
Nisource Finance Corp., 4.45%, 12/1/21 | 70,000 | 76,215 | ||||
Nisource Finance Corp., 5.65%, 2/1/45 | 100,000 | 122,955 | ||||
PacifiCorp, 6.00%, 1/15/39 | 110,000 | 144,729 | ||||
Potomac Electric Power Co., 3.60%, 3/15/24 | 120,000 | 127,532 | ||||
Progress Energy, Inc., 3.15%, 4/1/22 | 90,000 | 92,379 | ||||
Sempra Energy, 6.50%, 6/1/16 | 200,000 | 212,108 | ||||
Sempra Energy, 2.40%, 3/15/20 | 120,000 | 120,968 | ||||
Sempra Energy, 2.875%, 10/1/22 | 200,000 | 199,593 | ||||
Southern Power Co., 5.15%, 9/15/41 | 40,000 | 45,274 | ||||
Virginia Electric and Power Co., 3.45%, 2/15/24 | 160,000 | 169,016 | ||||
Virginia Electric and Power Co., 4.45%, 2/15/44 | 80,000 | 87,595 | ||||
Xcel Energy, Inc., 4.80%, 9/15/41 | 50,000 | 56,251 | ||||
5,617,372 | ||||||
Multiline Retail — 0.1% | ||||||
Macy's Retail Holdings, Inc., 3.625%, 6/1/24 | 540,000 | 558,132 | ||||
Target Corp., 4.00%, 7/1/42 | 280,000 | 283,808 | ||||
841,940 | ||||||
Oil, Gas and Consumable Fuels — 0.8% | ||||||
AmeriGas Partners LP / AmeriGas Finance Corp., 6.25%, 8/20/19 | 90,000 | 93,600 | ||||
Anadarko Petroleum Corp., 5.95%, 9/15/16 | 80,000 | 85,117 | ||||
Anadarko Petroleum Corp., 6.45%, 9/15/36 | 110,000 | 136,314 | ||||
Apache Corp., 4.75%, 4/15/43 | 90,000 | 91,695 | ||||
BP Capital Markets plc, 4.50%, 10/1/20 | 100,000 | 111,789 | ||||
BP Capital Markets plc, 2.75%, 5/10/23 | 100,000 | 98,017 | ||||
California Resources Corp., 5.50%, 9/15/21 | 260,000 | 247,650 | ||||
Chesapeake Energy Corp., 4.875%, 4/15/22 | 220,000 | 204,050 |
22
Shares/ Principal Amount | Value | |||||
Chevron Corp., 2.43%, 6/24/20 | $ | 80,000 | $ | 82,741 | ||
Cimarex Energy Co., 4.375%, 6/1/24 | 220,000 | 223,850 | ||||
CNOOC Nexen Finance 2014 ULC, 4.25%, 4/30/24 | 140,000 | 148,085 | ||||
Concho Resources, Inc., 7.00%, 1/15/21 | 330,000 | 349,800 | ||||
ConocoPhillips Holding Co., 6.95%, 4/15/29 | 40,000 | 53,928 | ||||
Continental Resources, Inc., 5.00%, 9/15/22 | 240,000 | 243,900 | ||||
Continental Resources, Inc., 3.80%, 6/1/24 | 190,000 | 182,983 | ||||
Ecopetrol SA, 4.125%, 1/16/25 | 90,000 | 86,823 | ||||
EOG Resources, Inc., 5.625%, 6/1/19 | 150,000 | 171,977 | ||||
EOG Resources, Inc., 4.10%, 2/1/21 | 130,000 | 142,063 | ||||
Exxon Mobil Corp., 2.71%, 3/6/25 | 280,000 | 281,969 | ||||
Hess Corp., 6.00%, 1/15/40 | 90,000 | 102,704 | ||||
Marathon Petroleum Corp., 3.50%, 3/1/16 | 210,000 | 214,267 | ||||
Newfield Exploration Co., 5.75%, 1/30/22 | 220,000 | 234,300 | ||||
Noble Energy, Inc., 4.15%, 12/15/21 | 290,000 | 308,585 | ||||
Pemex Project Funding Master Trust, 6.625%, 6/15/35 | 50,000 | 56,600 | ||||
Petro-Canada, 6.80%, 5/15/38 | 200,000 | 263,183 | ||||
Petrobras Global Finance BV, 5.75%, 1/20/20 | 200,000 | 200,000 | ||||
Petrobras Global Finance BV, 5.375%, 1/27/21 | 310,000 | 299,088 | ||||
Petrobras Global Finance BV, 5.625%, 5/20/43 | 70,000 | 58,170 | ||||
Petroleos Mexicanos, 6.00%, 3/5/20 | 120,000 | 136,680 | ||||
Petroleos Mexicanos, 4.875%, 1/24/22 | 240,000 | 254,400 | ||||
Petroleos Mexicanos, 3.50%, 1/30/23 | 60,000 | 58,125 | ||||
Petroleos Mexicanos, 5.50%, 6/27/44 | 230,000 | 228,045 | ||||
Phillips 66, 4.30%, 4/1/22 | 250,000 | 272,163 | ||||
Phillips 66, 4.65%, 11/15/34 | 180,000 | 188,896 | ||||
Range Resources Corp., 6.75%, 8/1/20 | 190,000 | 198,550 | ||||
Shell International Finance BV, 2.375%, 8/21/22 | 130,000 | 128,445 | ||||
Shell International Finance BV, 3.625%, 8/21/42 | 140,000 | 134,406 | ||||
Statoil ASA, 2.45%, 1/17/23 | 190,000 | 187,816 | ||||
Statoil ASA, 3.95%, 5/15/43 | 50,000 | 50,144 | ||||
Statoil ASA, 4.80%, 11/8/43 | 100,000 | 114,314 | ||||
Suburban Propane Partners LP / Suburban Energy Finance Corp., 7.375%, 8/1/21 | 150,000 | 162,000 | ||||
Talisman Energy, Inc., 7.75%, 6/1/19 | 95,000 | 110,978 | ||||
Tesoro Corp., 5.375%, 10/1/22 | 100,000 | 105,000 | ||||
Total Capital Canada Ltd., 2.75%, 7/15/23 | 120,000 | 119,295 | ||||
Total Capital SA, 2.125%, 8/10/18 | 140,000 | 143,325 | ||||
Whiting Petroleum Corp., 5.00%, 3/15/19 | 190,000 | 190,475 | ||||
7,556,305 | ||||||
Paper and Forest Products — 0.1% | ||||||
Georgia-Pacific LLC, 2.54%, 11/15/19(2) | 250,000 | 252,554 | ||||
Georgia-Pacific LLC, 5.40%, 11/1/20(2) | 350,000 | 398,080 | ||||
International Paper Co., 6.00%, 11/15/41 | 70,000 | 80,712 | ||||
731,346 | ||||||
Pharmaceuticals — 0.3% | ||||||
AbbVie, Inc., 1.75%, 11/6/17 | 300,000 | 301,860 |
23
Shares/ Principal Amount | Value | |||||
AbbVie, Inc., 2.90%, 11/6/22 | $ | 220,000 | $ | 217,940 | ||
AbbVie, Inc., 4.40%, 11/6/42 | 240,000 | 237,245 | ||||
Actavis Funding SCS, 3.85%, 6/15/24 | 220,000 | 224,468 | ||||
Actavis Funding SCS, 4.55%, 3/15/35 | 150,000 | 150,994 | ||||
Actavis, Inc., 1.875%, 10/1/17 | 220,000 | 220,713 | ||||
Actavis, Inc., 3.25%, 10/1/22 | 200,000 | 198,817 | ||||
Actavis, Inc., 4.625%, 10/1/42 | 60,000 | 59,510 | ||||
Bristol-Myers Squibb Co., 3.25%, 8/1/42 | 80,000 | 71,842 | ||||
Forest Laboratories, Inc., 4.875%, 2/15/21(2) | 270,000 | 295,595 | ||||
GlaxoSmithKline Capital plc, 2.85%, 5/8/22 | 250,000 | 252,770 | ||||
Merck & Co., Inc., 2.40%, 9/15/22 | 100,000 | 99,627 | ||||
Merck & Co., Inc., 3.70%, 2/10/45 | 80,000 | 77,496 | ||||
Perrigo Finance plc, 3.90%, 12/15/24 | 200,000 | 205,765 | ||||
Roche Holdings, Inc., 6.00%, 3/1/19(2) | 205,000 | 236,486 | ||||
Roche Holdings, Inc., 3.35%, 9/30/24(2) | 110,000 | 115,077 | ||||
Sanofi, 4.00%, 3/29/21 | 95,000 | 104,199 | ||||
3,070,404 | ||||||
Real Estate Investment Trusts (REITs) — 0.3% | ||||||
American Tower Corp., 5.05%, 9/1/20 | 130,000 | 143,613 | ||||
DDR Corp., 4.75%, 4/15/18 | 230,000 | 247,292 | ||||
DDR Corp., 3.625%, 2/1/25 | 150,000 | 149,255 | ||||
Essex Portfolio LP, 3.625%, 8/15/22 | 150,000 | 154,502 | ||||
Essex Portfolio LP, 3.375%, 1/15/23 | 60,000 | 60,312 | ||||
Essex Portfolio LP, 3.25%, 5/1/23 | 50,000 | 49,911 | ||||
HCP, Inc., 3.75%, 2/1/16 | 200,000 | 204,126 | ||||
Health Care REIT, Inc., 2.25%, 3/15/18 | 50,000 | 50,711 | ||||
Health Care REIT, Inc., 3.75%, 3/15/23 | 130,000 | 133,551 | ||||
Hospitality Properties Trust, 4.65%, 3/15/24 | 350,000 | 360,451 | ||||
Hospitality Properties Trust, 4.50%, 3/15/25 | 140,000 | 142,722 | ||||
Host Hotels & Resorts LP, 3.75%, 10/15/23 | 100,000 | 100,595 | ||||
Kilroy Realty LP, 3.80%, 1/15/23 | 190,000 | 194,765 | ||||
Realty Income Corp., 4.125%, 10/15/26 | 80,000 | 83,952 | ||||
Reckson Operating Partnership LP, 6.00%, 3/31/16 | 125,000 | 130,247 | ||||
Senior Housing Properties Trust, 4.75%, 5/1/24 | 180,000 | 186,285 | ||||
Ventas Realty LP / Ventas Capital Corp., 3.125%, 11/30/15 | 95,000 | 96,233 | ||||
Ventas Realty LP / Ventas Capital Corp., 4.75%, 6/1/21 | 120,000 | 132,486 | ||||
2,621,009 | ||||||
Road and Rail — 0.2% | ||||||
Burlington Northern Santa Fe LLC, 3.60%, 9/1/20 | 176,000 | 188,664 | ||||
Burlington Northern Santa Fe LLC, 5.05%, 3/1/41 | 60,000 | 68,215 | ||||
Burlington Northern Santa Fe LLC, 4.45%, 3/15/43 | 220,000 | 229,327 | ||||
Burlington Northern Santa Fe LLC, 4.15%, 4/1/45 | 180,000 | 182,197 | ||||
CSX Corp., 4.25%, 6/1/21 | 150,000 | 165,105 | ||||
CSX Corp., 3.40%, 8/1/24 | 180,000 | 186,707 | ||||
Norfolk Southern Corp., 5.75%, 4/1/18 | 40,000 | 44,805 | ||||
Norfolk Southern Corp., 3.25%, 12/1/21 | 200,000 | 208,235 |
24
Shares/ Principal Amount | Value | |||||
Penske Truck Leasing Co. LP / PTL Finance Corp., 2.875%, 7/17/18(2) | $ | 40,000 | $ | 40,919 | ||
Penske Truck Leasing Co. LP / PTL Finance Corp., 3.375%, 2/1/22(2) | 110,000 | 109,556 | ||||
Union Pacific Corp., 4.00%, 2/1/21 | 100,000 | 110,194 | ||||
Union Pacific Corp., 4.75%, 9/15/41 | 250,000 | 280,989 | ||||
1,814,913 | ||||||
Semiconductors and Semiconductor Equipment† | ||||||
Intel Corp., 1.35%, 12/15/17 | 140,000 | 140,838 | ||||
KLA-Tencor Corp., 4.65%, 11/1/24 | 80,000 | 82,270 | ||||
223,108 | ||||||
Software — 0.2% | ||||||
Activision Blizzard, Inc., 5.625%, 9/15/21(2) | 210,000 | 224,963 | ||||
Intuit, Inc., 5.75%, 3/15/17 | 254,000 | 274,435 | ||||
Microsoft Corp., 2.70%, 2/12/25 | 360,000 | 355,854 | ||||
Oracle Corp., 2.50%, 10/15/22 | 260,000 | 257,109 | ||||
Oracle Corp., 3.625%, 7/15/23 | 280,000 | 297,318 | ||||
Oracle Corp., 3.40%, 7/8/24 | 170,000 | 176,024 | ||||
Oracle Corp., 4.30%, 7/8/34 | 160,000 | 166,523 | ||||
1,752,226 | ||||||
Specialty Retail — 0.1% | ||||||
Home Depot, Inc. (The), 5.95%, 4/1/41 | 360,000 | 467,172 | ||||
Sally Holdings LLC / Sally Capital, Inc., 6.875%, 11/15/19 | 227,000 | 241,187 | ||||
United Rentals North America, Inc., 4.625%, 7/15/23 | 170,000 | 172,763 | ||||
881,122 | ||||||
Technology Hardware, Storage and Peripherals — 0.2% | ||||||
Apple, Inc., 1.00%, 5/3/18 | 160,000 | 159,282 | ||||
Apple, Inc., 2.85%, 5/6/21 | 180,000 | 186,227 | ||||
Apple, Inc., 3.45%, 5/6/24 | 240,000 | 252,230 | ||||
Dell, Inc., 2.30%, 9/10/15 | 90,000 | 90,231 | ||||
Dell, Inc., 3.10%, 4/1/16 | 40,000 | 40,350 | ||||
Hewlett-Packard Co., 4.30%, 6/1/21 | 290,000 | 310,597 | ||||
Seagate HDD Cayman, 4.75%, 6/1/23 | 310,000 | 325,884 | ||||
1,364,801 | ||||||
Textiles, Apparel and Luxury Goods — 0.1% | ||||||
Hanesbrands, Inc., 6.375%, 12/15/20 | 280,000 | 297,500 | ||||
L Brands, Inc., 6.90%, 7/15/17 | 100,000 | 110,625 | ||||
PVH Corp., 4.50%, 12/15/22 | 210,000 | 215,250 | ||||
623,375 | ||||||
Tobacco — 0.1% | ||||||
Altria Group, Inc., 2.85%, 8/9/22 | 270,000 | 269,193 | ||||
Philip Morris International, Inc., 4.125%, 5/17/21 | 180,000 | 196,327 | ||||
465,520 | ||||||
Wireless Telecommunication Services — 0.1% | ||||||
America Movil SAB de CV, 3.125%, 7/16/22 | 310,000 | 314,823 | ||||
Sprint Communications, 6.00%, 12/1/16 | 150,000 | 156,750 | ||||
Sprint Communications, 9.00%, 11/15/18(2) | 180,000 | 205,256 | ||||
T-Mobile USA, Inc., 6.46%, 4/28/19 | 210,000 | 217,350 |
25
Shares/ Principal Amount | Value | |||||
Vodafone Group plc, 5.625%, 2/27/17 | $ | 110,000 | $ | 118,555 | ||
1,012,734 | ||||||
TOTAL CORPORATE BONDS (Cost $101,915,474) | 105,433,923 | |||||
U.S. GOVERNMENT AGENCY MORTGAGE-BACKED SECURITIES(4) — 10.7% | ||||||
Adjustable-Rate U.S. Government Agency Mortgage-Backed Securities — 1.6% | ||||||
FHLMC, VRN, 1.75%, 5/15/15 | 162,081 | 166,307 | ||||
FHLMC, VRN, 1.84%, 5/15/15 | 455,791 | 468,886 | ||||
FHLMC, VRN, 1.97%, 5/15/15 | 236,877 | 244,600 | ||||
FHLMC, VRN, 1.98%, 5/15/15 | 342,229 | 353,018 | ||||
FHLMC, VRN, 2.09%, 5/15/15 | 627,465 | 640,345 | ||||
FHLMC, VRN, 2.26%, 5/15/15 | 392,728 | 420,452 | ||||
FHLMC, VRN, 2.33%, 5/15/15 | 807,528 | 820,267 | ||||
FHLMC, VRN, 2.39%, 5/15/15 | 172,575 | 184,813 | ||||
FHLMC, VRN, 2.39%, 5/15/15 | 105,915 | 113,318 | ||||
FHLMC, VRN, 2.40%, 5/15/15 | 1,071,012 | 1,145,192 | ||||
FHLMC, VRN, 2.55%, 5/15/15 | 86,458 | 91,787 | ||||
FHLMC, VRN, 2.86%, 5/15/15 | 192,738 | 199,529 | ||||
FHLMC, VRN, 3.08%, 5/15/15 | 407,414 | 434,071 | ||||
FHLMC, VRN, 3.24%, 5/15/15 | 104,031 | 110,965 | ||||
FHLMC, VRN, 3.29%, 5/15/15 | 296,776 | 315,650 | ||||
FHLMC, VRN, 3.78%, 5/15/15 | 182,150 | 191,749 | ||||
FHLMC, VRN, 4.06%, 5/15/15 | 154,979 | 163,132 | ||||
FHLMC, VRN, 4.21%, 5/15/15 | 448,330 | 472,004 | ||||
FHLMC, VRN, 5.13%, 5/15/15 | 58,166 | 61,655 | ||||
FHLMC, VRN, 5.17%, 5/15/15 | 117,739 | 124,387 | ||||
FHLMC, VRN, 5.77%, 5/15/15 | 280,208 | 300,769 | ||||
FHLMC, VRN, 5.93%, 5/15/15 | 267,974 | 287,423 | ||||
FHLMC, VRN, 6.12%, 5/15/15 | 146,289 | 157,246 | ||||
FNMA, VRN, 1.89%, 5/25/15 | 361,530 | 379,709 | ||||
FNMA, VRN, 1.92%, 5/25/15 | 922,147 | 969,530 | ||||
FNMA, VRN, 1.94%, 5/25/15 | 627,934 | 660,299 | ||||
FNMA, VRN, 1.94%, 5/25/15 | 1,057,999 | 1,112,530 | ||||
FNMA, VRN, 1.94%, 5/25/15 | 782,104 | 822,416 | ||||
FNMA, VRN, 1.94%, 5/25/15 | 452,863 | 476,205 | ||||
FNMA, VRN, 2.20%, 5/25/15 | 54,815 | 58,491 | ||||
FNMA, VRN, 2.31%, 5/25/15 | 99,687 | 107,698 | ||||
FNMA, VRN, 2.33%, 5/25/15 | 373,627 | 399,777 | ||||
FNMA, VRN, 2.33%, 5/25/15 | 81,128 | 86,646 | ||||
FNMA, VRN, 2.70%, 5/25/15 | 367,359 | 378,549 | ||||
FNMA, VRN, 3.36%, 5/25/15 | 166,318 | 174,455 | ||||
FNMA, VRN, 3.68%, 5/25/15 | 268,333 | 282,691 | ||||
FNMA, VRN, 3.93%, 5/25/15 | 204,826 | 217,426 | ||||
FNMA, VRN, 5.07%, 5/25/15 | 173,923 | 187,230 | ||||
13,781,217 | ||||||
Fixed-Rate U.S. Government Agency Mortgage-Backed Securities — 9.1% | ||||||
FHLMC, 4.50%, 1/1/19 | 185,843 | 194,659 |
26
Shares/ Principal Amount | Value | |||||
FHLMC, 6.50%, 1/1/28 | $ | 24,813 | $ | 28,882 | ||
FHLMC, 5.50%, 12/1/33 | 204,543 | 233,030 | ||||
FHLMC, 5.00%, 7/1/35 | 1,912,606 | 2,144,911 | ||||
FHLMC, 5.50%, 1/1/38 | 236,544 | 266,685 | ||||
FHLMC, 6.00%, 8/1/38 | 73,923 | 84,263 | ||||
FHLMC, 6.50%, 7/1/47 | 7,261 | 8,090 | ||||
FNMA, 3.00%, 5/13/15(5) | 1,750,000 | 1,781,719 | ||||
FNMA, 3.50%, 5/13/15(5) | 6,000,000 | 6,289,219 | ||||
FNMA, 4.00%, 5/13/15(5) | 5,450,000 | 5,826,955 | ||||
FNMA, 4.50%, 5/13/15(5) | 1,705,000 | 1,855,786 | ||||
FNMA, 4.50%, 5/1/19 | 62,965 | 65,916 | ||||
FNMA, 4.50%, 5/1/19 | 171,892 | 180,289 | ||||
FNMA, 5.00%, 9/1/20 | 348,913 | 376,763 | ||||
FNMA, 2.625%, 9/6/24 | 590,000 | 608,768 | ||||
FNMA, 6.50%, 1/1/28 | 18,798 | 21,669 | ||||
FNMA, 6.50%, 1/1/29 | 33,880 | 39,171 | ||||
FNMA, 7.50%, 7/1/29 | 87,113 | 100,205 | ||||
FNMA, 7.50%, 9/1/30 | 20,000 | 23,518 | ||||
FNMA, 6.625%, 11/15/30 | 2,290,000 | 3,400,160 | ||||
FNMA, 5.00%, 7/1/31 | 1,114,565 | 1,246,851 | ||||
FNMA, 6.50%, 9/1/31 | 24,534 | 28,284 | ||||
FNMA, 7.00%, 9/1/31 | 9,956 | 10,811 | ||||
FNMA, 6.50%, 1/1/32 | 34,644 | 39,927 | ||||
FNMA, 6.50%, 8/1/32 | 37,672 | 44,025 | ||||
FNMA, 5.50%, 6/1/33 | 117,757 | 134,737 | ||||
FNMA, 5.50%, 7/1/33 | 205,564 | 233,921 | ||||
FNMA, 5.50%, 8/1/33 | 369,380 | 420,325 | ||||
FNMA, 5.50%, 9/1/33 | 222,239 | 255,553 | ||||
FNMA, 5.00%, 11/1/33 | 678,253 | 759,154 | ||||
FNMA, 5.00%, 4/1/35 | 922,715 | 1,029,922 | ||||
FNMA, 4.50%, 9/1/35 | 458,488 | 501,368 | ||||
FNMA, 5.00%, 2/1/36 | 620,592 | 691,921 | ||||
FNMA, 5.50%, 4/1/36 | 232,819 | 263,284 | ||||
FNMA, 5.50%, 5/1/36 | 451,227 | 511,438 | ||||
FNMA, 5.00%, 11/1/36 | 1,617,321 | 1,803,313 | ||||
FNMA, 5.50%, 2/1/37 | 118,511 | 134,011 | ||||
FNMA, 6.00%, 7/1/37 | 867,145 | 995,483 | ||||
FNMA, 6.50%, 8/1/37 | 163,859 | 184,104 | ||||
FNMA, 5.50%, 7/1/39 | 758,194 | 859,583 | ||||
FNMA, 5.00%, 4/1/40 | 1,698,663 | 1,889,763 | ||||
FNMA, 5.00%, 6/1/40 | 1,489,895 | 1,665,969 | ||||
FNMA, 4.50%, 8/1/40 | 2,204,484 | 2,407,126 | ||||
FNMA, 4.50%, 9/1/40 | 3,659,273 | 4,020,647 | ||||
FNMA, 3.50%, 1/1/41 | 1,997,403 | 2,098,562 | ||||
FNMA, 4.00%, 1/1/41 | 1,580,943 | 1,724,973 | ||||
FNMA, 4.50%, 1/1/41 | 1,377,903 | 1,523,594 |
27
Shares/ Principal Amount | Value | |||||
FNMA, 4.00%, 5/1/41 | $ | 1,965,544 | $ | 2,110,846 | ||
FNMA, 4.50%, 7/1/41 | 665,117 | 734,069 | ||||
FNMA, 4.50%, 9/1/41 | 728,225 | 795,901 | ||||
FNMA, 4.50%, 9/1/41 | 2,893,659 | 3,163,241 | ||||
FNMA, 4.00%, 12/1/41 | 1,661,373 | 1,799,426 | ||||
FNMA, 4.00%, 1/1/42 | 978,121 | 1,049,722 | ||||
FNMA, 4.00%, 1/1/42 | 1,422,187 | 1,528,081 | ||||
FNMA, 4.00%, 3/1/42 | 1,323,695 | 1,420,046 | ||||
FNMA, 3.50%, 5/1/42 | 2,643,391 | 2,781,431 | ||||
FNMA, 3.50%, 6/1/42 | 825,420 | 870,761 | ||||
FNMA, 3.00%, 11/1/42 | 1,920,844 | 1,962,264 | ||||
FNMA, 6.50%, 8/1/47 | 28,232 | 31,637 | ||||
FNMA, 6.50%, 8/1/47 | 42,961 | 48,146 | ||||
FNMA, 6.50%, 9/1/47 | 43,769 | 49,081 | ||||
FNMA, 6.50%, 9/1/47 | 3,127 | 3,505 | ||||
FNMA, 6.50%, 9/1/47 | 16,430 | 18,415 | ||||
FNMA, 6.50%, 9/1/47 | 23,872 | 26,767 | ||||
FNMA, 6.50%, 9/1/47 | 6,376 | 7,145 | ||||
GNMA, 3.50%, 5/20/15(5) | 3,300,000 | 3,481,758 | ||||
GNMA, 4.00%, 5/20/15(5) | 2,000,000 | 2,138,125 | ||||
GNMA, 7.00%, 4/20/26 | 59,329 | 69,803 | ||||
GNMA, 7.50%, 8/15/26 | 35,670 | 43,351 | ||||
GNMA, 7.00%, 2/15/28 | 12,341 | 12,542 | ||||
GNMA, 7.50%, 2/15/28 | 15,430 | 15,802 | ||||
GNMA, 7.00%, 12/15/28 | 21,528 | 22,439 | ||||
GNMA, 7.00%, 5/15/31 | 69,537 | 85,289 | ||||
GNMA, 5.50%, 11/15/32 | 247,565 | 281,019 | ||||
GNMA, 4.50%, 5/20/41 | 917,731 | 1,001,328 | ||||
GNMA, 4.50%, 6/15/41 | 775,470 | 877,704 | ||||
GNMA, 4.00%, 12/15/41 | 1,447,666 | 1,566,238 | ||||
GNMA, 3.50%, 6/20/42 | 1,706,752 | 1,806,328 | ||||
GNMA, 3.50%, 7/20/42 | 833,289 | 881,905 | ||||
GNMA, 4.50%, 11/20/43 | 1,379,616 | 1,498,067 | ||||
81,191,489 | ||||||
TOTAL U.S. GOVERNMENT AGENCY MORTGAGE-BACKED SECURITIES (Cost $92,426,089) | 94,972,706 | |||||
COLLATERALIZED MORTGAGE OBLIGATIONS(4) — 2.2% | ||||||
Private Sponsor Collateralized Mortgage Obligations — 2.0% | ||||||
ABN Amro Mortgage Corp., Series 2003-4, Class A4, 5.50%, 3/25/33 | 35,052 | 36,848 | ||||
Adjustable Rate Mortgage Trust, Series 2004-4, Class 4A1, VRN, 2.51%, 5/1/15 | 420,972 | 421,345 | ||||
Banc of America Alternative Loan Trust, Series 2007-2, Class 2A4, 5.75%, 6/25/37 | 387,044 | 286,708 | ||||
Banc of America Mortgage Securities, Inc., Series 2003-G, Class 2A1, VRN, 2.61%, 5/1/15 | 264,881 | 266,370 | ||||
Banc of America Mortgage Securities, Inc., Series 2004-7, Class 7A1, 5.00%, 8/25/19 | 36,603 | 37,047 | ||||
Banc of America Mortgage Securities, Inc., Series 2004-E, Class 2A6 SEQ, VRN, 2.74%, 5/1/15 | 417,787 | 416,995 |
28
Shares/ Principal Amount | Value | |||||
Banc of America Mortgage Securities, Inc., Series 2005-1, Class 1A15, 5.50%, 2/25/35 | $ | 155,129 | $ | 161,479 | ||
Citigroup Mortgage Loan Trust, Inc., Series 2004-UST1, Class A4, VRN, 2.18%, 5/1/15 | 765,396 | 760,323 | ||||
Citigroup Mortgage Loan Trust, Inc., Series 2004-UST1, Class A5, VRN, 1.94%, 5/1/15 | 1,048,235 | 1,033,375 | ||||
Citigroup Mortgage Loan Trust, Inc., Series 2005-4, Class A, VRN, 5.19%, 5/1/15 | 188,669 | 187,003 | ||||
Countrywide Home Loan Mortgage Pass-Through Trust, Series 2005-17, Class 1A11, 5.50%, 9/25/35 | 11,998 | 11,788 | ||||
Credit Suisse First Boston Mortgage Securities Corp., Series 2003-AR28, Class 2A1, VRN, 2.48%, 5/1/15 | 227,727 | 225,665 | ||||
First Horizon Alternative Mortgage Securities Trust, Series 2004-AA4, Class A1, VRN, 2.25%, 5/1/15 | 794,551 | 789,237 | ||||
First Horizon Mortgage Pass-Through Trust, Series 2005-AR3, Class 4A1, VRN, 5.07%, 5/1/15 | 133,443 | 127,776 | ||||
GSR Mortgage Loan Trust, Series 2004-7, Class 3A1, VRN, 2.10%, 5/1/15 | 305,984 | 297,803 | ||||
GSR Mortgage Loan Trust, Series 2004-AR5, Class 3A3, VRN, 2.66%, 5/1/15 | 337,677 | 336,448 | ||||
GSR Mortgage Loan Trust, Series 2005-AR1, Class 3A1, VRN, 2.68%, 5/1/15 | 437,393 | 438,826 | ||||
GSR Mortgage Loan Trust, Series 2005-AR6, Class 2A1, VRN, 2.68%, 5/1/15 | 353,478 | 355,212 | ||||
JPMorgan Mortgage Trust, Series 2005-A4, Class 1A1, VRN, 4.92%, 5/1/15 | 157,393 | 156,184 | ||||
JPMorgan Mortgage Trust, Series 2005-A4, Class 2A1, VRN, 2.53%, 5/1/15 | 90,367 | 90,101 | ||||
JPMorgan Mortgage Trust, Series 2006-A3, Class 7A1, VRN, 2.61%, 5/1/15 | 475,995 | 480,583 | ||||
JPMorgan Mortgage Trust, Series 2013-1, Class 2A2 SEQ, VRN, 2.50%, 5/1/15(2) | 182,407 | 182,927 | ||||
MASTR Adjustable Rate Mortgages Trust, Series 2004-13, Class 3A7, VRN, 2.64%, 5/1/15 | 640,195 | 653,865 | ||||
MASTR Asset Securitization Trust, Series 2003-10, Class 3A1, 5.50%, 11/25/33 | 84,367 | 88,829 | ||||
Merrill Lynch Mortgage Investors Trust, Series 2005-3, Class 2A, VRN, 2.16%, 5/25/15 | 323,556 | 318,795 | ||||
Merrill Lynch Mortgage Investors Trust, Series 2005-A2, Class A1, VRN, 2.46%, 5/1/15 | 464,459 | 457,291 | ||||
PHHMC Mortgage Pass-Through Certificates, Series 2007-6, Class A1, VRN, 5.40%, 5/1/15 | 63,011 | 62,606 | ||||
Sequoia Mortgage Trust, Series 2012-1, Class 1A1, VRN, 2.87%, 5/1/15 | 100,147 | 100,718 | ||||
Sequoia Mortgage Trust, Series 2013-12, Class A1 SEQ, VRN, 4.00%, 5/1/15(2) | 294,631 | 307,132 | ||||
Structured Adjustable Rate Mortgage Loan Trust, Series 2004-6, Class 3A2, VRN, 2.41%, 5/1/15 | 303,051 | 303,644 | ||||
Structured Adjustable Rate Mortgage Loan Trust, Series 2004-8, Class 2A1, VRN, 2.42%, 5/1/15 | 291,339 | 291,586 | ||||
Thornburg Mortgage Securities Trust, Series 2004-3, Class A, VRN, 0.92%, 5/27/15 | 1,180,091 | 1,138,658 | ||||
WaMu Mortgage Pass-Through Certificates, Series 2005-AR3, Class A1, VRN, 2.44%, 5/1/15 | 792,498 | 789,327 | ||||
Wells Fargo Mortgage-Backed Securities Trust, Series 2004-4, Class A9, 5.50%, 5/25/34 | 86,210 | 89,167 |
29
Shares/ Principal Amount | Value | |||||
Wells Fargo Mortgage-Backed Securities Trust, Series 2004-K, Class 2A6, VRN, 2.62%, 5/1/15 | $ | 124,019 | $ | 125,023 | ||
Wells Fargo Mortgage-Backed Securities Trust, Series 2004-S, Class A1, VRN, 2.62%, 5/1/15 | 246,318 | 252,647 | ||||
Wells Fargo Mortgage-Backed Securities Trust, Series 2004-Z, Class 2A2, VRN, 2.61%, 5/1/15 | 258,252 | 260,224 | ||||
Wells Fargo Mortgage-Backed Securities Trust, Series 2005-17, Class 1A1, 5.50%, 1/25/36 | 163,800 | 168,340 | ||||
Wells Fargo Mortgage-Backed Securities Trust, Series 2005-3, Class A12, 5.50%, 5/25/35 | 265,706 | 271,824 | ||||
Wells Fargo Mortgage-Backed Securities Trust, Series 2005-9, Class 2A6, 5.25%, 10/25/35 | 446,683 | 471,125 | ||||
Wells Fargo Mortgage-Backed Securities Trust, Series 2005-AR10, Class 1A1, VRN, 2.63%, 5/1/15 | 784,832 | 804,236 | ||||
Wells Fargo Mortgage-Backed Securities Trust, Series 2005-AR10, Class 2A15, VRN, 2.63%, 5/1/15 | 81,060 | 82,658 | ||||
Wells Fargo Mortgage-Backed Securities Trust, Series 2005-AR10, Class 2A17, VRN, 2.63%, 5/1/15 | 540,399 | 551,857 | ||||
Wells Fargo Mortgage-Backed Securities Trust, Series 2005-AR14, Class A1, VRN, 5.35%, 5/1/15 | 153,907 | 153,110 | ||||
Wells Fargo Mortgage-Backed Securities Trust, Series 2005-AR16, Class 1A1, VRN, 2.61%, 5/1/15 | 161,805 | 165,467 | ||||
Wells Fargo Mortgage-Backed Securities Trust, Series 2005-AR16, Class 3A2, VRN, 2.64%, 5/1/15 | 425,135 | 429,606 | ||||
Wells Fargo Mortgage-Backed Securities Trust, Series 2005-AR2, Class 3A1, VRN, 2.61%, 5/1/15 | 126,546 | 128,503 | ||||
Wells Fargo Mortgage-Backed Securities Trust, Series 2005-AR7, Class 1A1, VRN, 3.11%, 5/1/15 | 468,603 | 470,446 | ||||
Wells Fargo Mortgage-Backed Securities Trust, Series 2006-10, Class A4 SEQ, 6.00%, 8/25/36 | 201,558 | 207,312 | ||||
Wells Fargo Mortgage-Backed Securities Trust, Series 2006-13, Class A5, 6.00%, 10/25/36 | 261,699 | 270,097 | ||||
Wells Fargo Mortgage-Backed Securities Trust, Series 2007-13, Class A1, 6.00%, 9/25/37 | 137,869 | 143,356 | ||||
Wells Fargo Mortgage-Backed Securities Trust, Series 2007-14, Class 2A2, 5.50%, 10/25/22 | 146,248 | 151,444 | ||||
Wells Fargo Mortgage-Backed Securities Trust, Series 2007-16, Class 1A1, 6.00%, 12/28/37 | 101,322 | 104,974 | ||||
Wells Fargo Mortgage-Backed Securities Trust, Series 2007-9, Class 1A8, 5.50%, 7/25/37 | 69,797 | 71,019 | ||||
Wells Fargo Mortgage-Backed Securities Trust, Series 2007-AR10, Class 1A1, VRN, 6.17%, 5/1/15 | 133,671 | 133,309 | ||||
Wells Fargo Mortgage-Backed Securities Trust, Series 2008-1, Class 4A1, 5.75%, 2/25/38 | 397,326 | 420,131 | ||||
17,538,369 | ||||||
U.S. Government Agency Collateralized Mortgage Obligations — 0.2% | ||||||
FHLMC, Series 2926, Class EW SEQ, 5.00%, 1/15/25 | 374,184 | 410,943 | ||||
FHLMC, Series 77, Class H, 8.50%, 9/15/20 | 23,049 | 24,332 | ||||
FNMA, Series 2014-M3, Class ASQ2, 0.56%, 3/25/16 | 1,118,341 | 1,118,898 | ||||
1,554,173 | ||||||
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (Cost $19,149,632) | 19,092,542 | |||||
COMMERCIAL MORTGAGE-BACKED SECURITIES(4) — 2.1% | ||||||
Banc of America Commercial Mortgage, Inc., Series 2005-5, Class A4, VRN, 5.12%, 5/1/15 | 221,959 | 222,848 |
30
Shares/ Principal Amount | Value | |||||
Banc of America Commercial Mortgage, Inc., Series 2005-5, Class AM, VRN, 5.18%, 5/1/15 | $ | 300,000 | $ | 305,371 | ||
Bank of America Merrill Lynch Commercial Mortgage Securities Trust, Series 2012-PARK, Class A SEQ, 2.96%, 12/10/30(2) | 1,125,000 | 1,148,632 | ||||
Bank of America Merrill Lynch Commercial Mortgage Securities Trust, Series 2014-ICTS, Class A, VRN, 0.98%, 5/15/15(2) | 825,000 | 822,874 | ||||
Bank of America Merrill Lynch Commercial Mortgage Securities Trust, Series 2015-200P, Class B, VRN, 3.49%, 5/1/15(2) | 625,000 | 640,514 | ||||
BB-UBS Trust, Series 2012-SHOW, Class A SEQ, 3.43%, 11/5/36(2) | 950,000 | 983,537 | ||||
BLCP Hotel Trust, Series 2014-CLRN, Class A, VRN, 1.13%, 5/15/15(2) | 1,400,000 | 1,396,401 | ||||
Commercial Mortgage Pass-Through Certificates, Series 2014-BBG, Class A, VRN, 0.98%, 5/15/15(2) | 925,000 | 924,031 | ||||
Commercial Mortgage Pass-Through Certificates, Series 2014-CR15, Class AM SEQ, 4.43%, 2/10/47 | 675,000 | 752,297 | ||||
Commercial Mortgage Pass-Through Certificates, Series 2014-LC17, Class AM, VRN, 4.19%, 5/1/15 | 775,000 | 846,264 | ||||
Commercial Mortgage Pass-Through Certificates, Series 2014-UBS5, Class AM, 4.19%, 9/10/47 | 1,025,000 | 1,109,592 | ||||
Commercial Mortgage Pass-Through Certificates, Series 2015-3BP, Class B, VRN, 3.35%, 5/1/15(2) | 500,000 | 504,536 | ||||
Commercial Mortgage Pass-Through Certificates, Series 2015-CR22, Class AM, 3.60%, 3/10/48 | 750,000 | 775,294 | ||||
Core Industrial Trust Core, Series 2015-4, Class A, 3.29%, 2/10/37 | 1,150,000 | 1,179,502 | ||||
GS Mortgage Securities Corp. II, Series 2015-GC28, Class AS, 3.76%, 2/10/48 | 325,000 | 341,879 | ||||
Irvine Core Office Trust, Series 2013-IRV, Class A2 SEQ, VRN, 3.28%, 5/10/15(2) | 1,575,000 | 1,627,330 | ||||
JPMBB Commercial Mortgage Securities Trust, Series 2014-C21, Class B, VRN, 4.34%, 5/1/15 | 475,000 | 510,230 | ||||
JPMorgan Chase Commercial Mortgage Securities Corp., Series 2013-C16, Class A4, 4.17%, 12/15/46 | 275,000 | 303,934 | ||||
JPMorgan Chase Commercial Mortgage Securities Corp., Series 2013-C16, Class AS, 4.52%, 12/15/46 | 450,000 | 502,202 | ||||
JPMorgan Chase Commercial Mortgage Securities Corp., Series 2014-CBM, Class A, VRN, 1.08%, 5/15/15(2) | 925,000 | 924,044 | ||||
LB-UBS Commercial Mortgage Trust, Series 2004-C1, Class A4 SEQ, 4.57%, 1/15/31 | 42,542 | 43,268 | ||||
LB-UBS Commercial Mortgage Trust, Series 2005-C5, Class A4 SEQ, 4.95%, 9/15/30 | 5,357 | 5,358 | ||||
LB-UBS Commercial Mortgage Trust, Series 2005-C5, Class AM, VRN, 5.02%, 5/11/15 | 400,000 | 402,297 | ||||
LB-UBS Commercial Mortgage Trust, Series 2005-C7, Class AM, VRN, 5.26%, 5/11/15 | 425,000 | 429,391 | ||||
Morgan Stanley Capital I Trust, Series 2014-CPT, Class A, 3.35%, 7/13/29(2) | 800,000 | 840,900 | ||||
Morgan Stanley Capital I Trust, Series 2014-CPT, Class C, VRN, 3.56%, 5/1/15(2) | 725,000 | 749,206 | ||||
TOTAL COMMERCIAL MORTGAGE-BACKED SECURITIES (Cost $17,911,975) | 18,291,732 | |||||
ASSET-BACKED SECURITIES(4) — 1.2% | ||||||
Avis Budget Rental Car Funding AESOP LLC, Series 2012-1A, Class A SEQ, 2.05%, 8/20/16(2) | 450,000 | 451,064 | ||||
Avis Budget Rental Car Funding AESOP LLC, Series 2012-2A, Class A SEQ, 2.80%, 5/20/18(2) | 750,000 | 769,880 |
31
Shares/ Principal Amount | Value | |||||
Chesapeake Funding LLC, Series 2014-1A, Class A, VRN, 0.60%, 5/7/15(2) | $ | 922,897 | $ | 922,515 | ||
CNH Equipment Trust, Series 2014-B, Class A2 SEQ, 0.48%, 8/15/17 | 576,408 | 576,273 | ||||
Dryrock Issuance Trust, Series 2014-1, Class A, VRN, 0.54%, 5/15/15 | 775,000 | 774,406 | ||||
Enterprise Fleet Financing LLC, Series 2014-1, Class A2 SEQ, 0.87%, 9/20/19(2) | 396,128 | 396,215 | ||||
Harley-Davidson Motorcycle Trust, Series 2014-1, Class A2B, VRN, 0.35%, 5/15/15 | 724,640 | 723,641 | ||||
Hertz Fleet Lease Funding LP, Series 2014-1, Class A, VRN, 0.58%, 5/11/15(2) | 1,125,000 | 1,124,234 | ||||
Hilton Grand Vacations Trust, Series 2013-A, Class A SEQ, 2.28%, 1/25/26(2) | 226,835 | 228,580 | ||||
Hilton Grand Vacations Trust, Series 2014-AA, Class A SEQ, 1.77%, 11/25/26(2) | 1,158,962 | 1,152,194 | ||||
John Deere Owner Trust, Series 2014-A, Class A2 SEQ, 0.45%, 9/15/16 | 781,409 | 781,439 | ||||
John Deere Owner Trust, Series 2014-A, Class A3 SEQ, 0.92%, 4/16/18 | 675,000 | 675,993 | ||||
MVW Owner Trust, Series 2014-1A, Class A, 2.25%, 9/20/31(2) | 619,066 | 620,182 | ||||
Sierra Receivables Funding Co. LLC, Series 2015-1A, Class A, 2.40%, 3/22/32(2) | 743,879 | 747,671 | ||||
US Airways Pass-Through Trust, Series 2013-1, Class A, 3.95%, 5/15/27 | 165,050 | 172,477 | ||||
Volvo Financial Equipment LLC, Series 2015-1A, Class A2, 0.95%, 11/15/17(2) | 675,000 | 675,692 | ||||
TOTAL ASSET-BACKED SECURITIES (Cost $10,793,957) | 10,792,456 | |||||
SOVEREIGN GOVERNMENTS AND AGENCIES — 0.6% | ||||||
Brazil — 0.1% | ||||||
Brazilian Government International Bond, 5.875%, 1/15/19 | 430,000 | 480,525 | ||||
Brazilian Government International Bond, 4.875%, 1/22/21 | 20,000 | 21,470 | ||||
Brazilian Government International Bond, 2.625%, 1/5/23 | 260,000 | 238,160 | ||||
740,155 | ||||||
Canada† | ||||||
Province of Ontario Canada, 1.00%, 7/22/16 | 150,000 | 150,812 | ||||
Chile† | ||||||
Chile Government International Bond, 3.25%, 9/14/21 | 100,000 | 107,250 | ||||
Chile Government International Bond, 3.625%, 10/30/42 | 100,000 | 97,250 | ||||
204,500 | ||||||
Colombia — 0.1% | ||||||
Colombia Government International Bond, 4.375%, 7/12/21 | 310,000 | 329,685 | ||||
Colombia Government International Bond, 6.125%, 1/18/41 | 100,000 | 117,750 | ||||
447,435 | ||||||
Italy† | ||||||
Italy Government International Bond, 6.875%, 9/27/23 | 220,000 | 282,919 | ||||
Mexico — 0.2% | ||||||
Mexico Government International Bond, MTN, 5.95%, 3/19/19 | 420,000 | 480,480 | ||||
Mexico Government International Bond, 5.125%, 1/15/20 | 330,000 | 370,425 | ||||
Mexico Government International Bond, 4.00%, 10/2/23 | 100,000 | 105,225 |
32
Shares/ Principal Amount | Value | |||||
Mexico Government International Bond, 6.05%, 1/11/40 | $ | 50,000 | $ | 60,812 | ||
Mexico Government International Bond, MTN, 4.75%, 3/8/44 | 400,000 | 412,700 | ||||
1,429,642 | ||||||
Peru† | ||||||
Peruvian Government International Bond, 6.55%, 3/14/37 | 70,000 | 93,013 | ||||
Peruvian Government International Bond, 5.625%, 11/18/50 | 170,000 | 205,275 | ||||
298,288 | ||||||
Philippines — 0.1% | ||||||
Philippine Government International Bond, 4.00%, 1/15/21 | 300,000 | 330,000 | ||||
Philippine Government International Bond, 6.375%, 10/23/34 | 150,000 | 210,000 | ||||
540,000 | ||||||
Poland† | ||||||
Poland Government International Bond, 5.125%, 4/21/21 | 140,000 | 160,124 | ||||
Poland Government International Bond, 3.00%, 3/17/23 | 140,000 | 142,674 | ||||
302,798 | ||||||
South Africa† | ||||||
South Africa Government International Bond, 4.67%, 1/17/24 | 110,000 | 115,889 | ||||
South Korea† | ||||||
Export-Import Bank of Korea, 3.75%, 10/20/16 | 160,000 | 166,403 | ||||
Korea Development Bank (The), 3.25%, 3/9/16 | 130,000 | 132,506 | ||||
Korea Development Bank (The), 4.00%, 9/9/16 | 110,000 | 114,305 | ||||
413,214 | ||||||
Turkey — 0.1% | ||||||
Turkey Government International Bond, 3.25%, 3/23/23 | 300,000 | 283,380 | ||||
Turkey Government International Bond, 4.25%, 4/14/26 | 200,000 | 195,500 | ||||
478,880 | ||||||
Uruguay† | ||||||
Uruguay Government International Bond, 4.125%, 11/20/45 | 120,000 | 111,000 | ||||
TOTAL SOVEREIGN GOVERNMENTS AND AGENCIES (Cost $5,187,686) | 5,515,532 | |||||
MUNICIPAL SECURITIES — 0.4% | ||||||
American Municipal Power-Ohio, Inc., Rev., (Building Bonds), 5.94%, 2/15/47 | 50,000 | 62,630 | ||||
American Municipal Power-Ohio, Inc., Rev., (Building Bonds), 7.50%, 2/15/50 | 75,000 | 108,225 | ||||
Bay Area Toll Authority Toll Bridge Rev., Series 2010 S-1, (Building Bonds), 6.92%, 4/1/40 | 135,000 | 184,409 | ||||
California GO, (Building Bonds), 7.55%, 4/1/39 | 100,000 | 154,539 | ||||
California GO, (Building Bonds), 7.30%, 10/1/39 | 170,000 | 249,608 | ||||
California GO, (Building Bonds), 7.60%, 11/1/40 | 80,000 | 125,602 | ||||
Illinois GO, (Taxable Pension), 5.10%, 6/1/33 | 245,000 | 244,564 | ||||
Los Angeles Community College District GO, Series 2010 D, (Election of 2008), 6.68%, 8/1/36 | 100,000 | 133,461 | ||||
Los Angeles Department of Water & Power Rev., (Building Bonds), 5.72%, 7/1/39 | 60,000 | 75,434 | ||||
Metropolitan Transportation Authority Rev., Series 2010 C-1, (Building Bonds), 6.69%, 11/15/40 | 105,000 | 143,827 | ||||
Metropolitan Transportation Authority Rev., Series 2010 E, (Building Bonds), 6.81%, 11/15/40 | 60,000 | 83,152 | ||||
Missouri Highways & Transportation Commission Rev., (Building Bonds), 5.45%, 5/1/33 | 130,000 | 159,945 |
33
Shares/ Principal Amount | Value | |||||
New Jersey State Turnpike Authority Rev., Series 2009 F, (Building Bonds), 7.41%, 1/1/40 | $ | 200,000 | $ | 298,256 | ||
New Jersey State Turnpike Authority Rev., Series 2010 A, (Building Bonds), 7.10%, 1/1/41 | 95,000 | 137,839 | ||||
New York GO, Series 2010 F-1, (Building Bonds), 6.27%, 12/1/37 | 95,000 | 126,067 | ||||
Ohio Water Development Authority Pollution Control Rev., Series 2010 B-2, (Building Bonds), 4.88%, 12/1/34 | 110,000 | 125,651 | ||||
Oregon State Department of Transportation Highway User Tax Rev., Series 2010 A, (Building Bonds), 5.83%, 11/15/34 | 70,000 | 90,395 | ||||
Port Authority of New York & New Jersey Rev., 4.93%, 10/1/51 | 50,000 | 57,959 | ||||
Port Authority of New York & New Jersey Rev., 4.46%, 10/1/62 | 245,000 | 264,539 | ||||
Rutgers State University Rev., Series 2010 H, (Building Bonds), 5.67%, 5/1/40 | 205,000 | 256,969 | ||||
Sacramento Municipal Utility District Electric Rev., Series 2010 W, (Building Bonds), 6.16%, 5/15/36 | 210,000 | 266,431 | ||||
Salt River Agricultural Improvement & Power District Electric Rev., Series 2010 A, (Building Bonds), 4.84%, 1/1/41 | 95,000 | 113,578 | ||||
San Francisco City & County Public Utilities Water Commission Rev., Series 2010 B, (Building Bonds), 6.00%, 11/1/40 | 105,000 | 132,904 | ||||
Santa Clara Valley Transportation Authority Sales Tax Rev., Series 2010 A, (Building Bonds), 5.88%, 4/1/32 | 120,000 | 148,393 | ||||
Texas GO, (Building Bonds), 5.52%, 4/1/39 | 50,000 | 65,584 | ||||
Washington GO, Series 2010 F, (Building Bonds), 5.14%, 8/1/40 | 20,000 | 24,432 | ||||
TOTAL MUNICIPAL SECURITIES (Cost $3,109,125) | 3,834,393 | |||||
TEMPORARY CASH INVESTMENTS — 1.1% | ||||||
SSgA U.S. Government Money Market Fund, Class N | 4,891,938 | 4,891,938 | ||||
State Street Institutional Liquid Reserves Fund, Premier Class | 5,129,323 | 5,129,323 | ||||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $10,021,261) | 10,021,261 | |||||
TOTAL INVESTMENT SECURITIES — 102.3% (Cost $806,583,252) | 911,750,737 | |||||
OTHER ASSETS AND LIABILITIES — (2.3)% | (20,205,263) | |||||
TOTAL NET ASSETS — 100.0% | $ | 891,545,474 |
34
NOTES TO SCHEDULE OF INVESTMENTS | ||
FHLMC | - | Federal Home Loan Mortgage Corporation |
FNMA | - | Federal National Mortgage Association |
GNMA | - | Government National Mortgage Association |
GO | - | General Obligation |
MTN | - | Medium Term Note |
SEQ | - | Sequential Payer |
VRN | - | Variable Rate Note. Interest reset date is indicated. Rate shown is effective at the period end. |
† | Category is less than 0.05% of total net assets. |
(1) | Non-income producing. |
(2) | Restricted security exempt from registration pursuant to Rule 144A under the Securities Act of 1933. These securities may be sold without restriction to qualified institutional investors and have been deemed liquid under policies approved by the Board of Directors. The aggregate value of these securities at the period end was $25,228,048, which represented 2.8% of total net assets. |
(3) | When-issued security. The issue price and yield are fixed on the date of the commitment, but payment and delivery are scheduled for a future date. |
(4) | Final maturity date indicated, unless otherwise noted. |
(5) | Forward commitment. Settlement date is indicated. |
(6) | Security, or a portion thereof, has been pledged at the custodian bank or with a broker for margin |
requirements on futures contracts. At the period end, the aggregate value of securities pledged was
$34,050.
See Notes to Financial Statements.
35
Statement of Assets and Liabilities |
APRIL 30, 2015 (UNAUDITED) | |||
Assets | |||
Investment securities, at value (cost of $806,583,252) | $ | 911,750,737 | |
Receivable for investments sold | 16,885,901 | ||
Receivable for capital shares sold | 636,541 | ||
Receivable for variation margin on futures contracts | 9,919 | ||
Dividends and interest receivable | 2,488,426 | ||
931,771,524 | |||
Liabilities | |||
Payable for investments purchased | 39,077,692 | ||
Payable for capital shares redeemed | 494,415 | ||
Accrued management fees | 653,943 | ||
40,226,050 | |||
Net Assets | $ | 891,545,474 | |
Net Assets Consist of: | |||
Capital (par value and paid-in surplus) | $ | 759,247,929 | |
Undistributed net investment income | 900,408 | ||
Undistributed net realized gain | 26,229,652 | ||
Net unrealized appreciation | 105,167,485 | ||
$ | 891,545,474 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | ||
Investor Class, $0.01 Par Value | $840,167,469 | 45,700,876 | $18.38 | |
Institutional Class, $0.01 Par Value | $51,378,005 | 2,793,159 | $18.39 |
See Notes to Financial Statements.
36
Statement of Operations |
FOR THE SIX MONTHS ENDED APRIL 30, 2015 (UNAUDITED) | |||
Investment Income (Loss) | |||
Income: | |||
Dividends (net of foreign taxes withheld of $4,832) | $ | 5,876,106 | |
Interest | 4,481,094 | ||
10,357,200 | |||
Expenses: | |||
Management fees | 3,901,234 | ||
Directors' fees and expenses | 15,827 | ||
Other expenses | 64 | ||
3,917,125 | |||
Net investment income (loss) | 6,440,075 | ||
Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investment transactions | 28,737,688 | ||
Futures contract transactions | 29,807 | ||
28,767,495 | |||
Change in net unrealized appreciation (depreciation) on investments | (10,219,778 | ) | |
Net realized and unrealized gain (loss) | 18,547,717 | ||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 24,987,792 |
See Notes to Financial Statements.
37
Statement of Changes in Net Assets |
SIX MONTHS ENDED APRIL 30, 2015 (UNAUDITED) AND YEAR ENDED OCTOBER 31, 2014 | ||||||
Increase (Decrease) in Net Assets | April 30, 2015 | October 31, 2014 | ||||
Operations | ||||||
Net investment income (loss) | $ | 6,440,075 | $ | 11,199,202 | ||
Net realized gain (loss) | 28,767,495 | 62,541,609 | ||||
Change in net unrealized appreciation (depreciation) | (10,219,778 | ) | 9,796,675 | |||
Net increase (decrease) in net assets resulting from operations | 24,987,792 | 83,537,486 | ||||
Distributions to Shareholders | ||||||
From net investment income: | ||||||
Investor Class | (6,423,045 | ) | (11,400,287 | ) | ||
Institutional Class | (436,519 | ) | (817,811 | ) | ||
From net realized gains: | ||||||
Investor Class | (57,795,741 | ) | (54,390,743 | ) | ||
Institutional Class | (3,452,739 | ) | (3,584,868 | ) | ||
Decrease in net assets from distributions | (68,108,044 | ) | (70,193,709 | ) | ||
Capital Share Transactions | ||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | 70,020,874 | 82,774,430 | ||||
Net increase (decrease) in net assets | 26,900,622 | 96,118,207 | ||||
Net Assets | ||||||
Beginning of period | 864,644,852 | 768,526,645 | ||||
End of period | $ | 891,545,474 | $ | 864,644,852 | ||
Undistributed net investment income | $ | 900,408 | $ | 1,319,897 |
See Notes to Financial Statements.
38
Notes to Financial Statements |
APRIL 30, 2015 (UNAUDITED)
1. Organization
American Century Mutual Funds, Inc. (the corporation) is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company and is organized as a Maryland corporation. Balanced Fund (the fund) is one fund in a series issued by the corporation. The fund is diversified as defined under the 1940 Act. The fund’s investment objective is to seek long-term capital growth and current income by investing approximately 60% of its assets in equity securities and the remainder in bonds and other fixed-income securities.
The fund offers the Investor Class and the Institutional Class. The share classes differ principally in their respective distribution and shareholder servicing expenses and arrangements. The Institutional Class is made available to institutional shareholders or through financial intermediaries whose clients do not require the same level of shareholder and administrative services as shareholders of other classes. As a result, the Institutional Class is charged a lower unified management fee.
2. Significant Accounting Policies
The following is a summary of significant accounting policies consistently followed by the fund in preparation of its financial statements. The fund is an investment company and follows accounting and reporting guidance in accordance with accounting principles generally accepted in the United States of America. This may require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from these estimates. Management evaluated the impact of events or transactions occurring through the date the financial statements were issued that would merit recognition or disclosure.
Investment Valuations — The fund determines the fair value of its investments and computes its net asset value per share at 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. The Board of Directors has adopted valuation policies and procedures to guide the investment advisor in the fund’s investment valuation process and to provide methodologies for the oversight of the fund’s pricing function.
Equity securities that are listed or traded on a domestic securities exchange are valued at the last reported sales price or at the official closing price as provided by the exchange. Equity securities traded on foreign securities exchanges are generally valued at the closing price of such securities on the exchange where primarily traded or at the close of the NYSE, if that is earlier. If no last sales price is reported, or if local convention or regulation so provides, the mean of the latest bid and asked prices may be used. Securities traded over-the-counter are valued at the mean of the latest bid and asked prices, the last sales price, or the official closing price.
Fixed income securities maturing in greater than 60 days at the time of purchase are valued at the evaluated mean as provided by independent pricing services or at the mean of the most recent bid and asked prices as provided by investment dealers. Fixed income securities maturing within 60 days at the time of purchase may be valued at cost, plus or minus any amortized discount or premium or at the evaluated mean as provided by an independent pricing service. Evaluated mean prices are commonly derived through utilization of market models, which may consider, among other factors: trade data, quotations from 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.
Open-end management investment companies are valued at the reported net asset value per share. Exchange-traded futures contracts are valued at the settlement price as provided by the appropriate clearing corporation.
If the fund determines that the market price for an investment is not readily available or the valuation methods mentioned above do not reflect an investment’s fair value, such investment is valued as determined in good faith by the Board of Directors or its delegate, in accordance with policies and procedures adopted by the Board of Directors. In its determination of fair value, the fund may review several factors including, but not limited to, market information regarding the specific investment or comparable investments and correlation with other investment types, futures indices or general market indicators. Circumstances that may cause the
39
fund to use these procedures to value an investment include, but are not limited to: an investment has been declared in default or is distressed; trading in a security has been suspended during the trading day or a security is not actively trading on its principal exchange; prices received from a regular pricing source are deemed unreliable; or there is a foreign market holiday and no trading occurred.
The fund monitors for significant events occurring after the close of an investment’s primary exchange but before the fund’s net asset value per share is determined. Significant events may include, but are not limited to: corporate announcements and transactions; governmental action and political unrest that could impact a specific investment or an investment sector; or armed conflicts, natural disasters and similar events that could affect investments in a specific country or region. The fund also monitors for significant fluctuations between domestic and foreign markets, as evidenced by the U.S. market or such other indicators that the Board of Directors, or its delegate, deems appropriate. If significant fluctuations in foreign markets are identified, the fund may apply a model-derived factor to the closing price of equity securities traded on foreign securities exchanges. The factor is based on observable market data as provided by an independent pricing service.
Security Transactions — Security transactions are accounted for as of the trade date. Net realized gains and losses are determined on the identified cost basis, which is also used for federal income tax purposes.
Investment Income — Dividend income less foreign taxes withheld, if any, is recorded as of the ex-dividend date. Distributions received on securities that represent a return of capital or long-term capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The fund may estimate the components of distributions received that may be considered nontaxable distributions or long-term capital gain distributions for income tax purposes. Interest income is recorded on the accrual basis and includes paydown gain (loss) and accretion of discounts and amortization of premiums. Inflation adjustments related to inflation-linked debt securities are reflected as interest income.
Forward Commitments — The fund may engage in securities transactions on a forward commitment basis. In these transactions, the securities’ prices and yields are fixed on the date of the commitment. The fund may sell a to-be-announced (TBA) security and at the same time make a commitment to purchase the same security at a future date at a specified price. Conversely, the fund may purchase a TBA security and at the same time make a commitment to sell the same security at a future date at a specified price. These types of transactions are known as “TBA roll” transactions and are accounted for as purchases and sales. The fund will segregate cash, cash equivalents or other appropriate liquid securities on its records in amounts sufficient to meet the purchase price.
Segregated Assets — In accordance with the 1940 Act, the fund segregates assets on its books and records to cover certain types of investments, including, but not limited to, futures contracts, forward commitments, when-issued securities, swap agreements and certain forward foreign currency exchange contracts. American Century Investment Management, Inc. (ACIM) (the investment advisor) monitors, on a daily basis, the securities segregated to ensure the fund designates a sufficient amount of liquid assets, marked-to-market daily. The fund may also receive assets or be required to pledge assets at the custodian bank or with a broker for margin requirements on futures contracts, forward commitments and swap agreements.
Income Tax Status — It is the fund’s policy to distribute substantially all net investment income and net realized gains to shareholders and to otherwise qualify as a regulated investment company under provisions of the Internal Revenue Code. Accordingly, no provision has been made for income taxes. The fund files U.S. federal, state, local and non-U.S. tax returns as applicable. The fund's tax returns are subject to examination by the relevant taxing authority until expiration of the applicable statute of limitations, which is generally three years from the date of filing but can be longer in certain jurisdictions. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination and for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Multiple Class — All shares of the fund represent an equal pro rata interest in the net assets of the class to which such shares belong, and have identical voting, dividend, liquidation and other rights and the same terms and conditions, except for class specific expenses and exclusive rights to vote on matters affecting only individual classes. Income, non-class specific expenses, and realized and unrealized capital gains and losses of the fund are allocated to each class of shares based on their relative net assets.
Distributions to Shareholders — Distributions from net investment income, if any, are generally declared and paid quarterly. Distributions from net realized gains, if any, are generally declared and paid annually.
40
Indemnifications — Under the corporation’s organizational documents, its officers and directors are indemnified against certain liabilities arising out of the performance of their duties to the fund. In addition, in the normal course of business, the fund enters into contracts that provide general indemnifications. The maximum exposure under these arrangements is unknown as this would involve future claims that may be made against a fund. The risk of material loss from such claims is considered by management to be remote.
3. Fees and Transactions with Related Parties
Certain officers and directors of the corporation are also officers and/or directors of American Century Companies, Inc. (ACC). The corporation’s investment advisor, ACIM, the corporation's distributor, American Century Investment Services, Inc., and the corporation’s transfer agent, American Century Services, LLC, are wholly owned, directly or indirectly, by ACC.
Management Fees — The corporation has entered into a management agreement with ACIM, under which ACIM provides the fund with investment advisory and management services in exchange for a single, unified management fee (the fee) per class. The agreement provides that all expenses of managing and operating the fund, except distribution and service fees, brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), and extraordinary expenses, will be paid by ACIM. The fee is computed and accrued daily based on each class’s daily net assets and paid monthly in arrears. The rate of the fee is determined by applying a fee rate calculation formula. This formula takes into account the fund’s assets as well as certain assets, if any, of other clients of the investment advisor outside the American Century Investments family of funds (such as subadvised funds and separate accounts) that have very similar investment teams and investment strategies (strategy assets). The annual management fee schedule ranges from 0.800% to 0.900% for the Investor Class. The annual management fee schedule ranges from 0.600% to 0.700% for the Institutional Class. The effective annual management fee for each class for the six months ended April 30, 2015 was 0.90% for the Investor Class and 0.70% for the Institutional Class.
Directors' Fees and Expenses — The Board of Directors is responsible for overseeing the investment advisor’s management and operations of the fund. The directors receive detailed information about the fund and its investment advisor regularly throughout the year, and meet at least quarterly with management of the investment advisor to review reports about fund operations. The fund’s officers do not receive compensation from the fund.
4. Investment Transactions
Purchases of investment securities, excluding short-term investments, for the six months ended April 30, 2015 totaled $403,591,720, of which $155,996,837 represented U.S. Treasury and Government Agency obligations.
Sales of investment securities, excluding short-term investments, for the six months ended April 30, 2015 totaled $379,913,601, of which $137,586,419 represented U.S. Treasury and Government Agency obligations.
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended April 30, 2015 | Year ended October 31, 2014 | |||||||
Shares | Amount | Shares | Amount | |||||
Investor Class/Shares Authorized | 250,000,000 | 250,000,000 | ||||||
Sold | 3,270,813 | $ | 60,917,451 | 6,263,780 | $ | 117,386,844 | ||
Issued in reinvestment of distributions | 3,490,753 | 62,768,406 | 3,565,008 | 64,242,576 | ||||
Redeemed | (3,148,258) | (58,443,802) | (5,340,834) | (100,173,536) | ||||
3,613,308 | 65,242,055 | 4,487,954 | 81,455,884 | |||||
Institutional Class/Shares Authorized | 15,000,000 | 15,000,000 | ||||||
Sold | 244,349 | 4,558,961 | 504,596 | 9,504,663 | ||||
Issued in reinvestment of distributions | 216,132 | 3,889,258 | 244,093 | 4,402,679 | ||||
Redeemed | (194,934) | (3,669,400) | (669,392) | (12,588,796) | ||||
265,547 | 4,778,819 | 79,297 | 1,318,546 | |||||
Net increase (decrease) | 3,878,855 | $ | 70,020,874 | 4,567,251 | $ | 82,774,430 |
41
6. Fair Value Measurements
The fund’s investments valuation process is based on several considerations and may use multiple inputs to determine the fair value of the investments held by the fund. In conformity with accounting principles generally accepted in the United States of America, the inputs used to determine a valuation are classified into three broad levels.
• | Level 1 valuation inputs consist of unadjusted quoted prices in an active market for identical investments. |
• | Level 2 valuation inputs consist of direct or indirect observable market data (including quoted prices for comparable investments, evaluations of subsequent market events, interest rates, prepayment speeds, credit risk, etc.). These inputs also consist of quoted prices for identical investments initially expressed in local currencies that are adjusted through translation into U.S. dollars. |
• | Level 3 valuation inputs consist of unobservable data (including a fund’s own assumptions). |
The level classification is based on the lowest level input that is significant to the fair valuation measurement. The valuation inputs are not necessarily an indication of the risks associated with investing in these securities or other financial instruments. There were no significant transfers between levels during the period.
The following is a summary of the level classifications as of period end. The Schedule of Investments provides additional information on the fund’s portfolio holdings.
Level 1 | Level 2 | Level 3 | ||||||
Assets | ||||||||
Investment Securities | ||||||||
Common Stocks | $ | 530,497,960 | — | — | ||||
U.S. Treasury Securities | — | $ | 113,298,232 | — | ||||
Corporate Bonds | — | 105,433,923 | — | |||||
U.S. Government Agency Mortgage-Backed Securities | — | 94,972,706 | — | |||||
Collateralized Mortgage Obligations | — | 19,092,542 | — | |||||
Commercial Mortgage-Backed Securities | — | 18,291,732 | — | |||||
Asset-Backed Securities | — | 10,792,456 | — | |||||
Sovereign Governments and Agencies | — | 5,515,532 | — | |||||
Municipal Securities | — | 3,834,393 | — | |||||
Temporary Cash Investments | 10,021,261 | — | — | |||||
$ | 540,519,221 | $ | 371,231,516 | — |
7. Derivative Instruments
Interest Rate Risk — The fund is subject to interest rate risk in the normal course of pursuing its investment objectives. The value of bonds generally declines as interest rates rise. A fund may enter into futures contracts based on a bond index or a specific underlying security. A fund may purchase futures contracts to gain exposure to increases in market value or sell futures contracts to protect against a decline in market value. Upon entering into a futures contract, a fund will segregate cash, cash equivalents or other appropriate liquid securities on its records in amounts sufficient to meet requirements. Subsequent payments (variation margin) are made or received daily, in cash, by a fund. The variation margin is equal to the daily change in the contract value and is recorded as unrealized gains and losses. A fund recognizes a realized gain or loss when the futures contract is closed or expires. Net realized and unrealized gains or losses occurring during the holding period of futures contracts are a component of net realized gain (loss) on futures contract transactions and change in net unrealized appreciation (depreciation) on futures contracts, respectively. One of the risks of entering into futures contracts is the possibility that the change in value of the contract may not correlate with the changes in value of the underlying securities. During the period, the fund infrequently purchased interest rate risk derivative instruments for temporary investment purposes.
The value of interest rate risk derivative instruments as of April 30, 2015, is disclosed on the Statement of
Assets and Liabilities as an asset of $9,919 in receivable for variation margin on futures contracts. For the six months ended April 30, 2015, the effect of interest rate risk derivative instruments on the Statement of Operations was $29,807 in net realized gain (loss) on futures contract transactions.
42
8. Federal Tax Information
The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
As of April 30, 2015, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $ | 809,052,756 | |
Gross tax appreciation of investments | $ | 111,318,105 | |
Gross tax depreciation of investments | (8,620,124 | ) | |
Net tax appreciation (depreciation) of investments | $ | 102,697,981 |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales.
43
Financial Highlights |
For a Share Outstanding Throughout the Years Ended October 31 (except as noted) | |||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||
Income From Investment Operations: | Distributions From: | 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 | Net Investment Income | Net Realized Gains | Total Distributions | 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 | |||||||||||||||
2015(3) | $19.38 | 0.13 | 0.38 | 0.51 | (0.14) | (1.37) | (1.51) | $18.38 | 2.86% | 0.90%(4) | 1.46%(4) | 43% | $840,167 | ||
2014 | $19.19 | 0.25 | 1.66 | 1.91 | (0.28) | (1.44) | (1.72) | $19.38 | 10.76% | 0.90% | 1.36% | 64% | $815,636 | ||
2013 | $17.41 | 0.30 | 2.25 | 2.55 | (0.31) | (0.46) | (0.77) | $19.19 | 15.21% | 0.90% | 1.64% | 81% | $721,523 | ||
2012 | $15.96 | 0.29 | 1.47 | 1.76 | (0.31) | — | (0.31) | $17.41 | 11.12% | 0.90% | 1.75% | 82% | $609,476 | ||
2011 | $15.02 | 0.29 | 0.94 | 1.23 | (0.29) | — | (0.29) | $15.96 | 8.26% | 0.90% | 1.84% | 87% | $511,829 | ||
2010 | $13.58 | 0.27 | 1.44 | 1.71 | (0.27) | — | (0.27) | $15.02 | 12.70% | 0.91% | 1.85% | 69% | $487,066 | ||
Institutional Class | |||||||||||||||
2015(3) | $19.39 | 0.15 | 0.38 | 0.53 | (0.16) | (1.37) | (1.53) | $18.39 | 2.96% | 0.70%(4) | 1.66%(4) | 43% | $51,378 | ||
2014 | $19.20 | 0.29 | 1.65 | 1.94 | (0.31) | (1.44) | (1.75) | $19.39 | 10.98% | 0.70% | 1.56% | 64% | $49,009 | ||
2013 | $17.41 | 0.32 | 2.28 | 2.60 | (0.35) | (0.46) | (0.81) | $19.20 | 15.49% | 0.70% | 1.84% | 81% | $47,004 | ||
2012 | $15.96 | 0.32 | 1.47 | 1.79 | (0.34) | — | (0.34) | $17.41 | 11.34% | 0.70% | 1.95% | 82% | $19,667 | ||
2011 | $15.02 | 0.32 | 0.94 | 1.26 | (0.32) | — | (0.32) | $15.96 | 8.48% | 0.70% | 2.04% | 87% | $9,736 | ||
2010 | $13.59 | 0.29 | 1.44 | 1.73 | (0.30) | — | (0.30) | $15.02 | 12.84% | 0.71% | 2.05% | 69% | $6,538 |
44
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) | Six months ended April 30, 2015 (unaudited). |
(4) | Annualized. |
See Notes to Financial Statements.
45
Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain IRAs are subject to federal income tax withholding, unless you elect not to have withholding apply. Tax will be withheld on the total amount withdrawn even though you may be receiving amounts that are not subject to withholding, such as nondeductible contributions. In such case, excess amounts of withholding could occur. You may adjust your withholding election so that a greater or lesser amount will be withheld.
If you don’t want us to withhold on this amount, you must notify us to not withhold the federal income tax. You may notify us in writing or in certain situations by telephone or through other electronic means. For systematic withdrawals, your withholding election will remain in effect until revoked or changed by filing a new election. You have the right to revoke your election at any time.
Remember, even if you elect not to have income tax withheld, you are liable for paying income tax on the taxable portion of your withdrawal. If you elect not to have income tax withheld or you don’t have enough income tax withheld, you may be responsible for payment of estimated tax. You may incur penalties under the estimated tax rules if your withholding and estimated tax payments are not sufficient. You can reduce or defer the income tax on a distribution by directly or indirectly rolling such distribution over to another IRA or eligible plan. You should consult your tax advisor for additional information.
State tax will be withheld if, at the time of your distribution, your address is within one of the mandatory withholding states and you have federal income tax withheld (or as otherwise required by state law). State taxes will be withheld from your distribution in accordance with the respective state rules.
Distributions you receive from 403(b), 457 and qualified plans are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
A description of the policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund is available without charge, upon request, by calling 1-800-345-2021. It is also available on the "About Us" page of American Century Investments’ website at americancentury.com and on the Securities and Exchange Commission’s website at sec.gov. Information regarding how the investment advisor voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the "About Us" page at americancentury.com. It is also available at sec.gov.
Quarterly Portfolio Disclosure
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-Q. The fund’s Forms N-Q are available on the SEC’s website at sec.gov, and may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The fund also makes its complete schedule of portfolio holdings for the most recent quarter of its fiscal year available on its
website at americancentury.com and, upon request, by calling 1-800-345-2021.
46
Notes |
47
Notes |
48
![]() | ||
Contact Us | americancentury.com | |
Automated Information Line | 1-800-345-8765 | |
Investor Services Representative | 1-800-345-2021 or 816-531-5575 | |
Investors Using Advisors | 1-800-378-9878 | |
Business, Not-For-Profit, Employer-Sponsored Retirement Plans | 1-800-345-3533 | |
Banks and Trust Companies, Broker-Dealers, Financial Professionals, Insurance Companies | 1-800-345-6488 | |
Telecommunications Relay Service for the Deaf | 711 | |
American Century Mutual Funds, Inc. | ||
Investment Advisor: American Century Investment Management, Inc. Kansas City, Missouri | ||
This report and the statements it contains are submitted for the general information of our shareholders. The report is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus. | ||
©2015 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-85681 1506 |
SEMIANNUAL REPORT | APRIL 30, 2015 |
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Capital Value Fund
Table of Contents |
Any opinions expressed in this report reflect those of the author as of the date of the report, and do not necessarily represent the opinions of American Century Investments® or any other person in the American Century Investments organization. Any such opinions are subject to change at any time based upon market or other conditions and American Century Investments disclaims any responsibility to update such opinions. These opinions may not be relied upon as investment advice and, because investment decisions made by American Century Investments funds are based on numerous factors, may not be relied upon as an indication of trading intent on behalf of any American Century Investments fund. Security examples are used for representational purposes only and are not intended as recommendations to purchase or sell securities. Performance information for comparative indices and securities is provided to American Century Investments by third party vendors. To the best of American Century Investments’ knowledge, such information is accurate at the time of printing.
President’s Letter |
![]() | Dear Investor: Thank you for reviewing this semiannual report for the six months ended April 30, 2015. It provides a macroeconomic and financial market overview (below), followed by fund performance, a schedule of fund investments, and other financial information. For additional commentary and updated information on fund performance, key factors that affected asset returns, and other insights regarding the investment markets, we encourage you to visit our website, americancentury.com. |
Jonathan Thomas |
Global Divergence in Monetary Policies Influenced Investor Behavior
The six-month reporting period saw big swings in market returns, triggered in part by central bank moves. In October 2014, just before the period started, the U.S. Federal Reserve ended its latest bond-buying program (quantitative easing, QE). As QE wound down, the U.S. economy enjoyed 5% annualized growth (after inflation) in the third quarter of 2014, the highest rate since the third quarter of 2003. But while QE was ending in the U.S., other major central banks were starting or increasing QE as their economies faltered. A “global divergence” of economic growth and monetary policies opened between the U.S. and most of the rest of the developed world.
This divergence helped fuel increased demand for the U.S. dollar and U.S. dollar-denominated assets, and put downward pressure on commodities prices, most notably oil. Though the resulting dollar rally and oil price decline reversed somewhat in April 2015, the dollar remained 9% higher for the reporting period, as measured by the U.S. Dollar Index, while oil remained more than 25% lower, as measured by both Brent and West Texas Intermediate crude oil futures. In this environment, U.S. stocks and bonds posted moderate gains—the S&P 500 Index and the Barclays U.S. Aggregate Bond Index returned 4.40% and 2.06%, respectively.
We expect monetary policy divergence between the U.S. and other major developed economies to continue this year, accompanied by market volatility. This could present both challenges and opportunities for active investment managers. Upward pressures on inflation and interest rates could develop as the massive amount of global monetary stimulus in progress takes hold and economies improve. But we believe lingering constraining forces will likely keep inflation and interest rates relatively low for the next six months. In this environment, we continue to believe in a disciplined, diversified, long-term investment approach, using professionally managed stock and bond portfolios to meet financial goals. We appreciate your continued trust in us.
Sincerely,
![](https://capedge.com/proxy/N-CSRS/0000100334-15-000051/jonathanthomassig.jpg)
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
2
Performance |
Total Returns as of April 30, 2015 | |||||||
Average Annual Returns | |||||||
Ticker Symbol | 6 months(1) | 1 year | 5 years | 10 years | Since Inception | Inception Date | |
Investor Class | ACTIX | 3.73%(2) | 10.56%(2) | 12.98%(2) | 6.30%(2) | 6.43%(2) | 3/31/99 |
Russell 1000 Value Index | — | 2.89% | 9.31% | 13.38% | 7.50% | 6.51% | — |
Institutional Class | ACPIX | 3.83%(2) | 10.76%(2) | 13.22%(2) | 6.52%(2) | 6.53%(2) | 3/1/02 |
A Class(3) | ACCVX | 5/14/03 | |||||
No sales charge* | 3.68%(2) | 10.29%(2) | 12.70%(2) | 6.05%(2) | 7.70%(2) | ||
With sales charge* | -2.28%(2) | 4.00%(2) | 11.36%(2) | 5.43%(2) | 7.16%(2) |
* Sales charges include initial sales charges and contingent deferred sales charges (CDSCs), as applicable. A Class shares have a 5.75% maximum initial sales charge and may be subject to a maximum CDSC of 1.00%. The SEC requires that mutual funds provide performance information net of maximum sales charges in all cases where charges could be applied.
(1) | Total returns for periods less than one year are not annualized. |
(2) | Returns would have been lower if a portion of the management fee had not been waived. |
(3) | Prior to March 1, 2010, the A Class was referred to as the Advisor Class and did not have a front-end sales charge. Performance prior to that date has been adjusted to reflect this charge. |
Total Annual Fund Operating Expenses | ||
Investor Class | Institutional Class | A Class |
1.10% | 0.90% | 1.35% |
The total annual fund operating expenses shown is as stated in the fund’s prospectus current as of the date of this report. The prospectus may vary from the expense ratio shown elsewhere in this report because it is based on a different time period, includes acquired fund fees and expenses, and, if applicable, does not include fee waivers or expense reimbursements.
Data presented reflect past performance. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance shown. Investment return and principal value will fluctuate, and redemption value may be more or less than original cost. Data assumes reinvestment of dividends and capital gains, and none of the charts reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. To obtain performance data current to the most recent month end, please call 1-800-345-2021 or visit americancentury.com. For additional information about the fund, please consult the prospectus.
3
Fund Characteristics |
APRIL 30, 2015 | |
Top Ten Holdings | % of net assets |
JPMorgan Chase & Co. | 4.0% |
Wells Fargo & Co. | 3.4% |
Johnson & Johnson | 3.3% |
Chevron Corp. | 3.1% |
Merck & Co., Inc. | 2.3% |
Medtronic, plc | 2.3% |
CVS Health Corp. | 2.2% |
United Technologies Corp. | 2.1% |
U.S. Bancorp | 1.9% |
Ingersoll-Rand plc | 1.9% |
Top Five Industries | % of net assets |
Banks | 14.5% |
Oil, Gas and Consumable Fuels | 9.4% |
Pharmaceuticals | 6.5% |
Insurance | 6.1% |
Capital Markets | 6.0% |
Types of Investments in Portfolio | % of net assets |
Common Stocks | 99.8% |
Temporary Cash Investments | 0.3% |
Other Assets and Liabilities | (0.1)% |
4
Shareholder Fee Example |
Fund shareholders may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption/exchange fees; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in your fund and to compare these costs with the ongoing cost of investing in other mutual funds.
The example is based on an investment of $1,000 made at the beginning of the period and held for the entire period from November 1, 2014 to April 30, 2015.
Actual Expenses
The table provides information about actual account values and actual expenses for each class. You may use the information, together with the amount you invested, to estimate the expenses that you paid over the period. First, identify the share class you own. Then simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
If you hold Investor Class shares of any American Century Investments fund, or Institutional Class shares of the American Century Diversified Bond Fund, in an American Century Investments account (i.e., not a financial intermediary or retirement plan account), American Century Investments may charge you a $12.50 semiannual account maintenance fee if the value of those shares is less than $10,000. We will redeem shares automatically in one of your accounts to pay the $12.50 fee. 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. Personal accounts include individual accounts, joint accounts, UGMA/UTMA accounts, personal trusts, Coverdell Education Savings Accounts and 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. If you are subject to the Account Maintenance Fee, your account value could be reduced by the fee amount.
Hypothetical Example for Comparison Purposes
The table also provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio of each class of your fund and an assumed rate of return of 5% per year before expenses, which is not the actual return of a fund’s share class. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) or redemption/exchange fees. Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
5
Beginning Account Value 11/1/14 | Ending Account Value 4/30/15 | Expenses Paid During Period(1) 11/1/14 - 4/30/15 | Annualized Expense Ratio(1) | |
Actual | ||||
Investor Class (after waiver) | $1,000 | $1,037.30 | $5.05 | 1.00% |
Investor Class (before waiver) | $1,000 | $1,037.30(2) | $5.56 | 1.10% |
Institutional Class (after waiver) | $1,000 | $1,038.30 | $4.04 | 0.80% |
Institutional Class (before waiver) | $1,000 | $1,038.30(2) | $4.55 | 0.90% |
A Class (after waiver) | $1,000 | $1,036.80 | $6.31 | 1.25% |
A Class (before waiver) | $1,000 | $1,036.80(2) | $6.82 | 1.35% |
Hypothetical | ||||
Investor Class (after waiver) | $1,000 | $1,019.84 | $5.01 | 1.00% |
Investor Class (before waiver) | $1,000 | $1,019.34 | $5.51 | 1.10% |
Institutional Class (after waiver) | $1,000 | $1,020.83 | $4.01 | 0.80% |
Institutional Class (before waiver) | $1,000 | $1,020.33 | $4.51 | 0.90% |
A Class (after waiver) | $1,000 | $1,018.60 | $6.26 | 1.25% |
A Class (before waiver) | $1,000 | $1,018.10 | $6.76 | 1.35% |
(1) | Expenses are equal to the class's annualized expense ratio listed in the table above, multiplied by the average account value over the period, multiplied by 181, the number of days in the most recent fiscal half-year, divided by 365, to reflect the one-half year period. |
(2) | Ending account value assumes the return earned after waiver and would have been lower if a portion of the management fee had not been waived. |
6
Schedule of Investments |
APRIL 30, 2015 (UNAUDITED)
Shares | Value | ||||
COMMON STOCKS — 99.8% | |||||
Aerospace and Defense — 5.8% | |||||
Honeywell International, Inc. | 21,090 | $ | 2,128,403 | ||
Huntington Ingalls Industries, Inc. | 6,340 | 834,281 | |||
Precision Castparts Corp. | 6,540 | 1,351,752 | |||
Raytheon Co. | 15,730 | 1,635,920 | |||
United Technologies Corp. | 29,130 | 3,313,537 | |||
9,263,893 | |||||
Auto Components — 1.2% | |||||
BorgWarner, Inc. | 9,120 | 539,904 | |||
Delphi Automotive plc | 17,290 | 1,435,070 | |||
1,974,974 | |||||
Automobiles — 1.0% | |||||
Ford Motor Co. | 89,930 | 1,420,894 | |||
Harley-Davidson, Inc. | 2,600 | 146,146 | |||
1,567,040 | |||||
Banks — 14.5% | |||||
Bank of America Corp. | 163,874 | 2,610,513 | |||
Citigroup, Inc. | 24,016 | 1,280,533 | |||
JPMorgan Chase & Co. | 101,520 | 6,422,155 | |||
KeyCorp | 101,560 | 1,467,542 | |||
PNC Financial Services Group, Inc. (The) | 29,580 | 2,713,373 | |||
U.S. Bancorp | 71,470 | 3,063,919 | |||
Wells Fargo & Co. | 98,530 | 5,429,003 | |||
22,987,038 | |||||
Biotechnology — 1.5% | |||||
Amgen, Inc. | 9,560 | 1,509,620 | |||
Gilead Sciences, Inc.(1) | 8,650 | 869,411 | |||
2,379,031 | |||||
Building Products — 0.6% | |||||
Masco Corp. | 35,950 | 952,316 | |||
Capital Markets — 6.0% | |||||
Ameriprise Financial, Inc. | 14,760 | 1,849,133 | |||
BlackRock, Inc. | 4,250 | 1,546,745 | |||
Goldman Sachs Group, Inc. (The) | 11,380 | 2,235,259 | |||
Invesco Ltd. | 42,640 | 1,766,149 | |||
Morgan Stanley | 20,790 | 775,675 | |||
State Street Corp. | 17,230 | 1,328,778 | |||
9,501,739 | |||||
Chemicals — 2.2% | |||||
Dow Chemical Co. (The) | 44,780 | 2,283,780 | |||
LyondellBasell Industries NV, Class A | 12,370 | 1,280,542 | |||
3,564,322 |
7
Shares | Value | ||||
Communications Equipment — 1.0% | |||||
Cisco Systems, Inc. | 56,350 | $ | 1,624,571 | ||
Consumer Finance — 1.7% | |||||
Capital One Financial Corp. | 25,580 | 2,068,143 | |||
Discover Financial Services | 10,900 | 631,873 | |||
2,700,016 | |||||
Diversified Financial Services — 1.4% | |||||
Berkshire Hathaway, Inc., Class B(1) | 16,150 | 2,280,542 | |||
Diversified Telecommunication Services — 0.7% | |||||
AT&T, Inc. | 31,700 | 1,098,088 | |||
Electric Utilities — 2.6% | |||||
American Electric Power Co., Inc. | 8,140 | 462,922 | |||
PPL Corp. | 40,100 | 1,364,603 | |||
Westar Energy, Inc. | 27,750 | 1,044,788 | |||
Xcel Energy, Inc. | 37,040 | 1,256,026 | |||
4,128,339 | |||||
Electrical Equipment — 1.2% | |||||
Eaton Corp. plc | 27,240 | 1,872,205 | |||
Energy Equipment and Services — 2.7% | |||||
Baker Hughes, Inc. | 18,990 | 1,300,056 | |||
Halliburton Co. | 16,680 | 816,486 | |||
National Oilwell Varco, Inc. | 20,830 | 1,133,360 | |||
Schlumberger Ltd. | 10,890 | 1,030,303 | |||
4,280,205 | |||||
Food and Staples Retailing — 2.9% | |||||
CVS Health Corp. | 35,440 | 3,518,837 | |||
Kroger Co. (The) | 14,780 | 1,018,490 | |||
4,537,327 | |||||
Health Care Equipment and Supplies — 4.1% | |||||
Abbott Laboratories | 55,730 | 2,586,986 | |||
Medtronic, plc | 48,300 | 3,595,935 | |||
Zimmer Holdings, Inc. | 2,690 | 295,470 | |||
6,478,391 | |||||
Health Care Providers and Services — 2.7% | |||||
Aetna, Inc. | 19,910 | 2,127,782 | |||
Anthem, Inc. | 11,530 | 1,740,223 | |||
HCA Holdings, Inc.(1) | 5,210 | 385,592 | |||
4,253,597 | |||||
Hotels, Restaurants and Leisure — 0.5% | |||||
Marriott International, Inc., Class A | 9,730 | 778,887 | |||
Household Durables — 1.0% | |||||
Whirlpool Corp. | 9,260 | 1,626,056 | |||
Household Products — 0.6% | |||||
Procter & Gamble Co. (The) | 12,720 | 1,011,367 | |||
Industrial Conglomerates — 0.8% | |||||
General Electric Co. | 45,750 | 1,238,910 |
8
Shares | Value | ||||
Insurance — 6.1% | |||||
Allstate Corp. (The) | 30,020 | $ | 2,091,193 | ||
American International Group, Inc. | 29,880 | 1,681,945 | |||
MetLife, Inc. | 38,930 | 1,996,720 | |||
Principal Financial Group, Inc. | 14,400 | 736,128 | |||
Prudential Financial, Inc. | 19,260 | 1,571,616 | |||
Travelers Cos., Inc. (The) | 16,590 | 1,677,415 | |||
9,755,017 | |||||
Machinery — 2.6% | |||||
Ingersoll-Rand plc | 45,440 | 2,991,770 | |||
Stanley Black & Decker, Inc. | 11,880 | 1,172,556 | |||
4,164,326 | |||||
Media — 3.5% | |||||
Comcast Corp., Class A | 33,560 | 1,938,426 | |||
Time Warner Cable, Inc. | 7,820 | 1,216,166 | |||
Time Warner, Inc. | 28,830 | 2,433,540 | |||
5,588,132 | |||||
Multiline Retail — 1.9% | |||||
Macy's, Inc. | 34,240 | 2,212,931 | |||
Target Corp. | 10,120 | 797,760 | |||
3,010,691 | |||||
Oil, Gas and Consumable Fuels — 9.4% | |||||
Chevron Corp. | 43,720 | 4,855,543 | |||
Exxon Mobil Corp. | 33,640 | 2,939,127 | |||
Imperial Oil Ltd. | 40,030 | 1,764,439 | |||
Oasis Petroleum, Inc.(1) | 44,890 | 805,326 | |||
Occidental Petroleum Corp. | 27,350 | 2,190,735 | |||
Total SA ADR | 45,010 | 2,435,041 | |||
14,990,211 | |||||
Paper and Forest Products — 0.6% | |||||
International Paper Co. | 18,620 | 1,000,266 | |||
Pharmaceuticals — 6.5% | |||||
Actavis plc(1) | 620 | 175,373 | |||
Catalent, Inc.(1) | 23,701 | 681,878 | |||
Johnson & Johnson | 52,160 | 5,174,272 | |||
Merck & Co., Inc. | 60,670 | 3,613,505 | |||
Pfizer, Inc. | 18,210 | 617,865 | |||
10,262,893 | |||||
Real Estate Investment Trusts (REITs) — 0.5% | |||||
Brixmor Property Group, Inc. | 34,760 | 815,122 | |||
Semiconductors and Semiconductor Equipment — 3.1% | |||||
Applied Materials, Inc. | 120,190 | 2,378,560 | |||
Microchip Technology, Inc. | 42,510 | 2,025,814 | |||
Micron Technology, Inc.(1) | 18,850 | 530,251 | |||
4,934,625 |
9
Shares | Value | ||||
Software — 4.6% | |||||
Electronic Arts, Inc.(1) | 39,410 | $ | 2,289,327 | ||
Microsoft Corp. | 48,700 | 2,368,768 | |||
Oracle Corp. | 59,930 | 2,614,146 | |||
7,272,241 | |||||
Specialty Retail — 1.5% | |||||
Lowe's Cos., Inc. | 33,730 | 2,322,648 | |||
Technology Hardware, Storage and Peripherals — 0.9% | |||||
Western Digital Corp. | 15,350 | 1,500,309 | |||
Tobacco — 1.5% | |||||
Altria Group, Inc. | 21,300 | 1,066,065 | |||
Philip Morris International, Inc. | 14,790 | 1,234,521 | |||
2,300,586 | |||||
Trading Companies and Distributors — 0.4% | |||||
United Rentals, Inc.(1) | 7,320 | 706,966 | |||
TOTAL COMMON STOCKS (Cost $104,831,993) | 158,722,887 | ||||
TEMPORARY CASH INVESTMENTS — 0.3% | |||||
Repurchase Agreement, Bank of America Merrill Lynch, (collateralized by various U.S. Treasury obligations, 1.375%, 4/30/20, valued at $70,553), in a joint trading account at 0.08%, dated 4/30/15, due 5/1/15 (Delivery value $69,326) | 69,326 | ||||
Repurchase Agreement, Credit Suisse First Boston, Inc., (collateralized by various U.S. Treasury obligations, 1.50%, 12/31/18, valued at $169,363), in a joint trading account at 0.03%, dated 4/30/15, due 5/1/15 (Delivery value $166,383) | 166,383 | ||||
Repurchase Agreement, Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 3.625%, 2/15/44, valued at $201,025), at 0.01%, dated 4/30/15, due 5/1/15 (Delivery value $194,000) | 194,000 | ||||
State Street Institutional Liquid Reserves Fund, Premier Class | 537 | 537 | |||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $430,246) | 430,246 | ||||
TOTAL INVESTMENT SECURITIES — 100.1% (Cost $105,262,239) | 159,153,133 | ||||
OTHER ASSETS AND LIABILITIES — (0.1)% | (108,687 | ) | |||
TOTAL NET ASSETS — 100.0% | $ | 159,044,446 |
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS | ||||||||||
Currency Purchased | Currency Sold | Counterparty | Settlement Date | Unrealized Appreciation (Depreciation) | ||||||
USD | 1,255,588 | CAD | 1,519,299 | JPMorgan Chase Bank N.A. | 5/29/15 | $ | (3,192 | ) | ||
USD | 1,641,043 | EUR | 1,503,951 | UBS AG | 5/29/15 | (48,191 | ) | |||
USD | 67,340 | EUR | 60,273 | UBS AG | 5/29/15 | (359 | ) | |||
$ | (51,742 | ) |
NOTES TO SCHEDULE OF INVESTMENTS | ||
ADR | - | American Depositary Receipt |
CAD | - | Canadian Dollar |
EUR | - | Euro |
USD | - | United States Dollar |
(1) | Non-income producing. |
See Notes to Financial Statements.
10
Statement of Assets and Liabilities |
APRIL 30, 2015 (UNAUDITED) | |||
Assets | |||
Investment securities, at value (cost of $105,262,239) | $ | 159,153,133 | |
Foreign currency holdings, at value (cost of $5,222) | 5,235 | ||
Receivable for capital shares sold | 15,177 | ||
Dividends and interest receivable | 116,670 | ||
159,290,215 | |||
Liabilities | |||
Payable for capital shares redeemed | 61,970 | ||
Unrealized depreciation on forward foreign currency exchange contracts | 51,742 | ||
Accrued management fees | 131,116 | ||
Distribution and service fees payable | 941 | ||
245,769 | |||
Net Assets | $ | 159,044,446 | |
Net Assets Consist of: | |||
Capital (par value and paid-in surplus) | $ | 98,090,630 | |
Undistributed net investment income | 552,281 | ||
Undistributed net realized gain | 6,562,370 | ||
Net unrealized appreciation | 53,839,165 | ||
$ | 159,044,446 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | ||||
Investor Class, $0.01 Par Value | $151,535,085 | 16,237,077 | $9.33 | |||
Institutional Class, $0.01 Par Value | $2,976,428 | 318,274 | $9.35 | |||
A Class, $0.01 Par Value | $4,532,933 | 487,050 | $9.31* |
*Maximum offering price $9.88 (net asset value divided by 0.9425).
See Notes to Financial Statements.
11
Statement of Operations |
FOR THE SIX MONTHS ENDED APRIL 30, 2015 (UNAUDITED) | |||
Investment Income (Loss) | |||
Income: | |||
Dividends (net of foreign taxes withheld of $14,433) | $ | 1,804,186 | |
Interest | 103 | ||
1,804,289 | |||
Expenses: | |||
Management fees | 870,525 | ||
Distribution and service fees - A Class | 5,520 | ||
Directors' fees and expenses | 2,866 | ||
878,911 | |||
Fees waived | (79,410 | ) | |
799,501 | |||
Net investment income (loss) | 1,004,788 | ||
Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investment transactions | 7,854,928 | ||
Foreign currency transactions | 344,151 | ||
8,199,079 | |||
Change in net unrealized appreciation (depreciation) on: | |||
Investments | (3,284,857 | ) | |
Translation of assets and liabilities in foreign currencies | (76,579 | ) | |
(3,361,436 | ) | ||
Net realized and unrealized gain (loss) | 4,837,643 | ||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 5,842,431 |
See Notes to Financial Statements.
12
Statement of Changes in Net Assets |
SIX MONTHS ENDED APRIL 30, 2015 (UNAUDITED) AND YEAR ENDED OCTOBER 31, 2014 | ||||||
Increase (Decrease) in Net Assets | April 30, 2015 | October 31, 2014 | ||||
Operations | ||||||
Net investment income (loss) | $ | 1,004,788 | $ | 2,009,905 | ||
Net realized gain (loss) | 8,199,079 | 10,829,207 | ||||
Change in net unrealized appreciation (depreciation) | (3,361,436 | ) | 9,236,308 | |||
Net increase (decrease) in net assets resulting from operations | 5,842,431 | 22,075,420 | ||||
Distributions to Shareholders | ||||||
From net investment income: | ||||||
Investor Class | (2,061,009 | ) | (1,920,651 | ) | ||
Institutional Class | (47,038 | ) | (51,046 | ) | ||
A Class | (48,794 | ) | (36,557 | ) | ||
From net realized gains: | ||||||
Investor Class | (8,800,770 | ) | — | |||
Institutional Class | (175,620 | ) | — | |||
A Class | (254,043 | ) | — | |||
Decrease in net assets from distributions | (11,387,274 | ) | (2,008,254 | ) | ||
Capital Share Transactions | ||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | 5,748,173 | (6,554,884 | ) | |||
Net increase (decrease) in net assets | 203,330 | 13,512,282 | ||||
Net Assets | ||||||
Beginning of period | 158,841,116 | 145,328,834 | ||||
End of period | $ | 159,044,446 | $ | 158,841,116 | ||
Undistributed net investment income | $ | 552,281 | $ | 1,704,334 |
See Notes to Financial Statements.
13
Notes to Financial Statements |
APRIL 30, 2015 (UNAUDITED)
1. Organization
American Century Mutual Funds, Inc. (the corporation) is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company and is organized as a Maryland corporation. Capital Value Fund (the fund) is one fund in a series issued by the corporation. The fund is diversified as defined under the 1940 Act. The fund’s investment objective is to seek long-term capital growth.
The fund offers the Investor Class, the Institutional Class and the A Class. The A Class may incur an initial sales charge. The A Class may be subject to a contingent deferred sales charge. The share classes differ principally in their respective sales charges and distribution and shareholder servicing expenses and arrangements. The Institutional Class is made available to institutional shareholders or through financial intermediaries whose clients do not require the same level of shareholder and administrative services as shareholders of other classes. As a result, the Institutional Class is charged a lower unified management fee.
2. Significant Accounting Policies
The following is a summary of significant accounting policies consistently followed by the fund in preparation of its financial statements. The fund is an investment company and follows accounting and reporting guidance in accordance with accounting principles generally accepted in the United States of America. This may require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from these estimates. Management evaluated the impact of events or transactions occurring through the date the financial statements were issued that would merit recognition or disclosure.
Investment Valuations — The fund determines the fair value of its investments and computes its net asset value per share at 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. The Board of Directors has adopted valuation policies and procedures to guide the investment advisor in the fund’s investment valuation process and to provide methodologies for the oversight of the fund’s pricing function.
Equity securities that are listed or traded on a domestic securities exchange are valued at the last reported sales price or at the official closing price as provided by the exchange. Equity securities traded on foreign securities exchanges are generally valued at the closing price of such securities on the exchange where primarily traded or at the close of the NYSE, if that is earlier. If no last sales price is reported, or if local convention or regulation so provides, the mean of the latest bid and asked prices may be used. Securities traded over-the-counter are valued at the mean of the latest bid and asked prices, the last sales price, or the official closing price. Equity securities initially expressed in local currencies are translated into U.S. dollars at the mean of the appropriate currency exchange rate at the close of the NYSE as provided by an independent pricing service.
Fixed income securities maturing within 60 days at the time of purchase may be valued at cost, plus or minus any amortized discount or premium or at the evaluated mean as provided by an independent pricing service. Evaluated mean prices are commonly derived through utilization of market models, which may consider, among other factors: trade data, quotations from 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.
Open-end management investment companies are valued at the reported net asset value per share. Repurchase agreements are valued at cost, which approximates fair value. Forward foreign currency exchange contracts are valued at the mean of the appropriate forward exchange rate at the close of the NYSE as provided by an independent pricing service.
If the fund determines that the market price for an investment is not readily available or the valuation methods mentioned above do not reflect an investment’s fair value, such investment is valued as determined in good faith by the Board of Directors or its delegate, in accordance with policies and procedures adopted by the Board of Directors. In its determination of fair value, the fund may review several factors including, but not limited to, market information regarding the specific investment or comparable investments and correlation
14
with other investment types, futures indices or general market indicators. Circumstances that may cause the fund to use these procedures to value an investment include, but are not limited to: an investment has been declared in default or is distressed; trading in a security has been suspended during the trading day or a security is not actively trading on its principal exchange; prices received from a regular pricing source are deemed unreliable; or there is a foreign market holiday and no trading occurred.
The fund monitors for significant events occurring after the close of an investment’s primary exchange but before the fund’s net asset value per share is determined. Significant events may include, but are not limited to: corporate announcements and transactions; governmental action and political unrest that could impact a specific investment or an investment sector; or armed conflicts, natural disasters and similar events that could affect investments in a specific country or region. The fund also monitors for significant fluctuations between domestic and foreign markets, as evidenced by the U.S. market or such other indicators that the Board of Directors, or its delegate, deems appropriate. If significant fluctuations in foreign markets are identified, the fund may apply a model-derived factor to the closing price of equity securities traded on foreign securities exchanges. The factor is based on observable market data as provided by an independent pricing service.
Security Transactions — Security transactions are accounted for as of the trade date. Net realized gains and losses are determined on the identified cost basis, which is also used for federal income tax purposes.
Investment Income — Dividend income less foreign taxes withheld, if any, is recorded as of the ex-dividend date. Distributions received on securities that represent a return of capital or long-term capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The fund may estimate the components of distributions received that may be considered nontaxable distributions or long-term capital gain distributions for income tax purposes. Interest income is recorded on the accrual basis and includes accretion of discounts and amortization of premiums.
Foreign Currency Translations — All assets and liabilities initially expressed in foreign currencies are translated into U.S. dollars at prevailing exchange rates at period end. The fund may enter into spot foreign currency exchange contracts to facilitate transactions denominated in a foreign currency. Purchases and sales of investment securities, dividend and interest income, spot foreign currency exchange contracts, and expenses are translated at the rates of exchange prevailing on the respective dates of such transactions. Net realized and unrealized foreign currency exchange gains or losses related to investment securities are a component of net realized gain (loss) on investment transactions and change in net unrealized appreciation (depreciation) on investments, respectively.
Repurchase Agreements — The fund may enter into repurchase agreements with institutions that American Century Investment Management, Inc. (ACIM) (the investment advisor) has determined are creditworthy pursuant to criteria adopted by the Board of Directors. The fund requires that the collateral, represented by securities, received in a repurchase transaction be transferred to the custodian in a manner sufficient to enable the fund to obtain those securities in the event of a default under the repurchase agreement. ACIM monitors, on a daily basis, the securities transferred to ensure the value, including accrued interest, of the securities under each repurchase agreement is equal to or greater than amounts owed to the fund under each repurchase agreement.
Joint Trading Account — Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the fund, along with certain other funds in the American Century Investments family of funds, may transfer uninvested cash balances into a joint trading account. These balances are invested in one or more repurchase agreements that are collateralized by U.S. Treasury or Agency obligations.
Income Tax Status — It is the fund’s policy to distribute substantially all net investment income and net realized gains to shareholders and to otherwise qualify as a regulated investment company under provisions of the Internal Revenue Code. Accordingly, no provision has been made for income taxes. The fund files U.S. federal, state, local and non-U.S. tax returns as applicable. The fund's tax returns are subject to examination by the relevant taxing authority until expiration of the applicable statute of limitations, which is generally three years from the date of filing but can be longer in certain jurisdictions. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination and for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
15
Multiple Class — All shares of the fund represent an equal pro rata interest in the net assets of the class to which such shares belong, and have identical voting, dividend, liquidation and other rights and the same terms and conditions, except for class specific expenses and exclusive rights to vote on matters affecting only individual classes. Income, non-class specific expenses, and realized and unrealized capital gains and losses of the fund are allocated to each class of shares based on their relative net assets.
Distributions to Shareholders — Distributions from net investment income and net realized gains, if any, are generally declared and paid annually.
Indemnifications — Under the corporation’s organizational documents, its officers and directors are indemnified against certain liabilities arising out of the performance of their duties to the fund. In addition, in the normal course of business, the fund enters into contracts that provide general indemnifications. The maximum exposure under these arrangements is unknown as this would involve future claims that may be made against a fund. The risk of material loss from such claims is considered by management to be remote.
3. Fees and Transactions with Related Parties
Certain officers and directors of the corporation are also officers and/or directors of American Century Companies, Inc. (ACC). The corporation’s investment advisor, ACIM, the corporation's distributor, American Century Investment Services, Inc. (ACIS), and the corporation’s transfer agent, American Century Services, LLC, are wholly owned, directly or indirectly, by ACC.
Management Fees — The corporation has entered into a management agreement with ACIM, under which ACIM provides the fund with investment advisory and management services in exchange for a single, unified management fee (the fee) per class. The agreement provides that all expenses of managing and operating the fund, except distribution and service fees, brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), and extraordinary expenses, will be paid by ACIM. The fee is computed and accrued daily based on each class’s daily net assets and paid monthly in arrears. The rate of the fee is determined by applying a fee rate calculation formula. This formula takes into account the fund’s assets as well as certain assets, if any, of other clients of the investment advisor outside the American Century Investments family of funds (such as subadvised funds and separate accounts) that have very similar investment teams and investment strategies (strategy assets). The annual management fee schedule ranges from 0.900% to 1.100% for the Investor Class and A Class. The annual management fee ranges from 0.700% to 0.900% for the Institutional Class. During the six months ended April 30, 2015, the investment advisor voluntarily agreed to waive 0.100% of its management fee. The investment advisor expects the fee waiver to continue through July 31, 2015, and cannot terminate it without the approval of the Board of Directors. The total amount of the waiver for each class for the six months ended April 30, 2015 was $75,713, $1,489 and $2,208 for the Investor Class, Institutional Class and A Class, respectively. The effective annual management fee before waiver for each class for the six months ended April 30, 2015 was 1.10% for the Investor Class and A Class and 0.90% for the Institutional Class. The effective annual management fee after waiver for each class for the six months ended April 30, 2015 was 1.00% for the Investor Class and A Class and 0.80% for the Institutional Class.
Distribution and Service Fees — The Board of Directors has adopted a Master Distribution and Individual Shareholder Services Plan (the plan) for the A Class, pursuant to Rule 12b-1 of the 1940 Act. The plan provides that the A Class will pay ACIS an annual distribution and service fee of 0.25%. The fees are computed and accrued daily based on the A Class’s daily net assets and paid monthly in arrears. The fees are used to pay financial intermediaries for distribution and individual shareholder services. Fees incurred under the plan during the six months ended April 30, 2015 are detailed in the Statement of Operations.
Directors' Fees and Expenses — The Board of Directors is responsible for overseeing the investment advisor’s management and operations of the fund. The directors receive detailed information about the fund and its investment advisor regularly throughout the year, and meet at least quarterly with management of the investment advisor to review reports about fund operations. The fund’s officers do not receive compensation from the fund.
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the six months ended April 30, 2015 were $24,466,772 and $28,565,288, respectively.
16
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended April 30, 2015 | Year ended October 31, 2014 | |||||||||
Shares | Amount | Shares | Amount | |||||||
Investor Class/Shares Authorized | 200,000,000 | 200,000,000 | ||||||||
Sold | 453,211 | $ | 4,244,825 | 1,267,771 | $ | 11,567,934 | ||||
Issued in reinvestment of distributions | 1,187,673 | 10,463,399 | 216,834 | 1,847,429 | ||||||
Redeemed | (1,025,738 | ) | (9,603,817 | ) | (2,174,796 | ) | (19,739,614 | ) | ||
615,146 | 5,104,407 | (690,191 | ) | (6,324,251 | ) | |||||
Institutional Class/Shares Authorized | 15,000,000 | 15,000,000 | ||||||||
Sold | 727 | 6,750 | 15,136 | 134,931 | ||||||
Issued in reinvestment of distributions | 15,972 | 140,869 | 5,746 | 49,014 | ||||||
Redeemed | (8,392 | ) | (77,474 | ) | (96,090 | ) | (873,186 | ) | ||
8,307 | 70,145 | (75,208 | ) | (689,241 | ) | |||||
A Class/Shares Authorized | 50,000,000 | 50,000,000 | ||||||||
Sold | 82,919 | 778,708 | 183,136 | 1,647,219 | ||||||
Issued in reinvestment of distributions | 34,040 | 299,551 | 4,248 | 36,111 | ||||||
Redeemed | (54,486 | ) | (504,638 | ) | (134,836 | ) | (1,224,722 | ) | ||
62,473 | 573,621 | 52,548 | 458,608 | |||||||
Net increase (decrease) | 685,926 | $ | 5,748,173 | (712,851 | ) | $ | (6,554,884 | ) |
6. Fair Value Measurements
The fund’s investments valuation process is based on several considerations and may use multiple inputs to determine the fair value of the investments held by the fund. In conformity with accounting principles generally accepted in the United States of America, the inputs used to determine a valuation are classified into three broad levels.
• | Level 1 valuation inputs consist of unadjusted quoted prices in an active market for identical investments. |
• | Level 2 valuation inputs consist of direct or indirect observable market data (including quoted prices for comparable investments, evaluations of subsequent market events, interest rates, prepayment speeds, credit risk, etc.). These inputs also consist of quoted prices for identical investments initially expressed in local currencies that are adjusted through translation into U.S. dollars. |
• | Level 3 valuation inputs consist of unobservable data (including a fund’s own assumptions). |
The level classification is based on the lowest level input that is significant to the fair valuation measurement. The valuation inputs are not necessarily an indication of the risks associated with investing in these securities or other financial instruments. There were no significant transfers between levels during the period.
17
The following is a summary of the level classifications as of period end. The Schedule of Investments provides additional information on the fund’s portfolio holdings.
Level 1 | Level 2 | Level 3 | ||||||
Assets | ||||||||
Investment Securities | ||||||||
Common Stocks | $ | 156,958,448 | $ | 1,764,439 | — | |||
Temporary Cash Investments | 537 | 429,709 | — | |||||
$ | 156,958,985 | $ | 2,194,148 | — | ||||
Liabilities | ||||||||
Other Financial Instruments | ||||||||
Forward Foreign Currency Exchange Contracts | — | $ | (51,742 | ) | — |
7. Derivative Instruments
Foreign Currency Risk — The fund is subject to foreign currency exchange rate risk in the normal course of pursuing its investment objectives. The value of foreign investments held by a fund may be significantly affected by changes in foreign currency exchange rates. The dollar value of a foreign security generally decreases when the value of the dollar rises against the foreign currency in which the security is denominated and tends to increase when the value of the dollar declines against such foreign currency. A fund may enter into forward foreign currency exchange contracts to reduce a fund's exposure to foreign currency exchange rate fluctuations. The net U.S. dollar value of foreign currency underlying all contractual commitments held by a fund and the resulting unrealized appreciation or depreciation are determined daily. Realized gain or loss is recorded upon the termination of the contract. Net realized and unrealized gains or losses occurring during the holding period of forward foreign currency exchange contracts are a component of net realized gain (loss) on foreign currency transactions and change in net unrealized appreciation (depreciation) on translation of assets and liabilities in foreign currencies, respectively. A fund bears the risk of an unfavorable change in the foreign currency exchange rate underlying the forward contract. Additionally, losses, up to the fair value, may arise if the counterparties do not perform under the contract terms. The fund's average U.S. dollar exposure to foreign currency risk derivative instruments held during the period was $3,084,589.
The value of foreign currency risk derivative instruments as of April 30, 2015, is disclosed on the Statement of Assets and Liabilities as a liability of $51,742 in unrealized depreciation on forward foreign currency exchange contracts. For the six months ended April 30, 2015, the effect of foreign currency risk derivative instruments on the Statement of Operations was $349,644 in net realized gain (loss) on foreign currency transactions and $(78,782) in change in net unrealized appreciation (depreciation) on translation of assets and liabilities in foreign currencies.
8. Federal Tax Information
The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
As of April 30, 2015, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $ | 106,586,716 | |
Gross tax appreciation of investments | $ | 52,883,406 | |
Gross tax depreciation of investments | (316,989 | ) | |
Net tax appreciation (depreciation) of investments | $ | 52,566,417 |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales.
18
Financial Highlights |
For a Share Outstanding Throughout the Years Ended October 31 (except as noted) | |||||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||||
Income From Investment Operations: | Distributions From: | 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 | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Operating Expenses (before expense waiver) | Net Investment Income (Loss) | Net Investment Income (Loss) (before expense waiver) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
Investor Class | |||||||||||||||||
2015(3) | $9.71 | 0.06 | 0.26 | 0.32 | (0.13) | (0.57) | (0.70) | $9.33 | 3.73% | 1.00%(4) | 1.10%(4) | 1.27%(4) | 1.17%(4) | 15% | $151,535 | ||
2014 | $8.51 | 0.12 | 1.20 | 1.32 | (0.12) | — | (0.12) | $9.71 | 15.68% | 1.00% | 1.10% | 1.32% | 1.22% | 31% | $151,715 | ||
2013 | $6.89 | 0.13 | 1.61 | 1.74 | (0.12) | — | (0.12) | $8.51 | 25.67% | 1.00% | 1.10% | 1.66% | 1.56% | 26% | $138,884 | ||
2012 | $5.96 | 0.11 | 0.93 | 1.04 | (0.11) | — | (0.11) | $6.89 | 17.80% | 1.00% | 1.10% | 1.76% | 1.66% | 32% | $117,210 | ||
2011 | $5.73 | 0.09 | 0.23 | 0.32 | (0.09) | — | (0.09) | $5.96 | 5.67% | 1.00% | 1.10% | 1.53% | 1.43% | 37% | $111,188 | ||
2010 | $5.32 | 0.09 | 0.42 | 0.51 | (0.10) | — | (0.10) | $5.73 | 9.69% | 1.09% | 1.11% | 1.56% | 1.54% | 27% | $137,037 | ||
Institutional Class | |||||||||||||||||
2015(3) | $9.74 | 0.07 | 0.26 | 0.33 | (0.15) | (0.57) | (0.72) | $9.35 | 3.83% | 0.80%(4) | 0.90%(4) | 1.47%(4) | 1.37%(4) | 15% | $2,976 | ||
2014 | $8.54 | 0.14 | 1.20 | 1.34 | (0.14) | — | (0.14) | $9.74 | 15.86% | 0.80% | 0.90% | 1.52% | 1.42% | 31% | $3,019 | ||
2013 | $6.90 | 0.15 | 1.62 | 1.77 | (0.13) | — | (0.13) | $8.54 | 26.00% | 0.80% | 0.90% | 1.86% | 1.76% | 26% | $3,289 | ||
2012 | $5.97 | 0.12 | 0.93 | 1.05 | (0.12) | — | (0.12) | $6.90 | 18.00% | 0.80% | 0.90% | 1.96% | 1.86% | 32% | $3,943 | ||
2011 | $5.74 | 0.10 | 0.24 | 0.34 | (0.11) | — | (0.11) | $5.97 | 5.87% | 0.80% | 0.90% | 1.73% | 1.63% | 37% | $3,618 | ||
2010 | $5.32 | 0.10 | 0.43 | 0.53 | (0.11) | — | (0.11) | $5.74 | 10.11% | 0.89% | 0.91% | 1.76% | 1.74% | 27% | $3,980 |
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For a Share Outstanding Throughout the Years Ended October 31 (except as noted) | |||||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||||
Income From Investment Operations: | Distributions From: | 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 | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Operating Expenses (before expense waiver) | Net Investment Income (Loss) | Net Investment Income (Loss) (before expense waiver) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
A Class(5) | |||||||||||||||||
2015(3) | $9.67 | 0.05 | 0.27 | 0.32 | (0.11) | (0.57) | (0.68) | $9.31 | 3.68% | 1.25%(4) | 1.35%(4) | 1.02%(4) | 0.92%(4) | 15% | $4,533 | ||
2014 | $8.48 | 0.10 | 1.19 | 1.29 | (0.10) | — | (0.10) | $9.67 | 15.32% | 1.25% | 1.35% | 1.07% | 0.97% | 31% | $4,107 | ||
2013 | $6.87 | 0.11 | 1.62 | 1.73 | (0.12) | — | (0.12) | $8.48 | 25.51% | 1.25% | 1.35% | 1.41% | 1.31% | 26% | $3,155 | ||
2012 | $5.95 | 0.10 | 0.92 | 1.02 | (0.10) | — | (0.10) | $6.87 | 17.37% | 1.25% | 1.35% | 1.51% | 1.41% | 32% | $2,796 | ||
2011 | $5.72 | 0.08 | 0.23 | 0.31 | (0.08) | — | (0.08) | $5.95 | 5.41% | 1.25% | 1.35% | 1.28% | 1.18% | 37% | $3,326 | ||
2010 | $5.30 | 0.07 | 0.44 | 0.51 | (0.09) | — | (0.09) | $5.72 | 9.64% | 1.34% | 1.36% | 1.31% | 1.29% | 27% | $4,130 |
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 and do not reflect applicable sales charges, if any. Total returns for periods less than one year are not annualized. |
(3) | Six months ended April 30, 2015 (unaudited). |
(4) | Annualized. |
(5) | Prior to March 1, 2010, the A Class was referred to as the Advisor Class. |
See Notes to Financial Statements.
20
Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain IRAs are subject to federal income tax withholding, unless you elect not to have withholding apply. Tax will be withheld on the total amount withdrawn even though you may be receiving amounts that are not subject to withholding, such as nondeductible contributions. In such case, excess amounts of withholding could occur. You may adjust your withholding election so that a greater or lesser amount will be withheld.
If you don’t want us to withhold on this amount, you must notify us to not withhold the federal income tax. You may notify us in writing or in certain situations by telephone or through other electronic means. For systematic withdrawals, your withholding election will remain in effect until revoked or changed by filing a new election. You have the right to revoke your election at any time.
Remember, even if you elect not to have income tax withheld, you are liable for paying income tax on the taxable portion of your withdrawal. If you elect not to have income tax withheld or you don’t have enough income tax withheld, you may be responsible for payment of estimated tax. You may incur penalties under the estimated tax rules if your withholding and estimated tax payments are not sufficient. You can reduce or defer the income tax on a distribution by directly or indirectly rolling such distribution over to another IRA or eligible plan. You should consult your tax advisor for additional information.
State tax will be withheld if, at the time of your distribution, your address is within one of the mandatory withholding states and you have federal income tax withheld (or as otherwise required by state law). State taxes will be withheld from your distribution in accordance with the respective state rules.
Distributions you receive from 403(b), 457 and qualified plans are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
A description of the policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund is available without charge, upon request, by calling 1-800-345-2021. It is also available on the "About Us" page of American Century Investments’ website at americancentury.com and on the Securities and Exchange Commission’s website at sec.gov. Information regarding how the investment advisor voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the "About Us" page at americancentury.com. It is also available at sec.gov.
Quarterly Portfolio Disclosure
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-Q. The fund’s Forms N-Q are available on the SEC’s website at sec.gov, and may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The fund also makes its complete schedule of portfolio holdings for the most recent quarter of its fiscal year available on its
website at americancentury.com and, upon request, by calling 1-800-345-2021.
21
Notes |
22
Notes |
23
Notes |
24
![]() | ||
Contact Us | americancentury.com | |
Automated Information Line | 1-800-345-8765 | |
Investor Services Representative | 1-800-345-2021 or 816-531-5575 | |
Investors Using Advisors | 1-800-378-9878 | |
Business, Not-For-Profit, Employer-Sponsored Retirement Plans | 1-800-345-3533 | |
Banks and Trust Companies, Broker-Dealers, Financial Professionals, Insurance Companies | 1-800-345-6488 | |
Telecommunications Relay Service for the Deaf | 711 | |
American Century Mutual Funds, Inc. | ||
Investment Advisor: American Century Investment Management, Inc. Kansas City, Missouri | ||
This report and the statements it contains are submitted for the general information of our shareholders. The report is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus. | ||
©2015 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-85686 1506 |
SEMIANNUAL REPORT | APRIL 30, 2015 |
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Focused Growth Fund
Table of Contents |
Any opinions expressed in this report reflect those of the author as of the date of the report, and do not necessarily represent the opinions of American Century Investments® or any other person in the American Century Investments organization. Any such opinions are subject to change at any time based upon market or other conditions and American Century Investments disclaims any responsibility to update such opinions. These opinions may not be relied upon as investment advice and, because investment decisions made by American Century Investments funds are based on numerous factors, may not be relied upon as an indication of trading intent on behalf of any American Century Investments fund. Security examples are used for representational purposes only and are not intended as recommendations to purchase or sell securities. Performance information for comparative indices and securities is provided to American Century Investments by third party vendors. To the best of American Century Investments’ knowledge, such information is accurate at the time of printing.
President’s Letter |
![]() | Dear Investor: Thank you for reviewing this semiannual report for the six months ended April 30, 2015. It provides a macroeconomic and financial market overview (below), followed by fund performance, a schedule of fund investments, and other financial information. For additional commentary and updated information on fund performance, key factors that affected asset returns, and other insights regarding the investment markets, we encourage you to visit our website, americancentury.com. |
Jonathan Thomas |
Global Divergence in Monetary Policies Influenced Investor Behavior
The six-month reporting period saw big swings in market returns, triggered in part by central bank moves. In October 2014, just before the period started, the U.S. Federal Reserve ended its latest bond-buying program (quantitative easing, QE). As QE wound down, the U.S. economy enjoyed 5% annualized growth (after inflation) in the third quarter of 2014, the highest rate since the third quarter of 2003. But while QE was ending in the U.S., other major central banks were starting or increasing QE as their economies faltered. A “global divergence” of economic growth and monetary policies opened between the U.S. and most of the rest of the developed world.
This divergence helped fuel increased demand for the U.S. dollar and U.S. dollar-denominated assets, and put downward pressure on commodities prices, most notably oil. Though the resulting dollar rally and oil price decline reversed somewhat in April 2015, the dollar remained 9% higher for the reporting period, as measured by the U.S. Dollar Index, while oil remained more than 25% lower, as measured by both Brent and West Texas Intermediate crude oil futures. In this environment, U.S. stocks and bonds posted moderate gains—the S&P 500 Index and the Barclays U.S. Aggregate Bond Index returned 4.40% and 2.06%, respectively.
We expect monetary policy divergence between the U.S. and other major developed economies to continue this year, accompanied by market volatility. This could present both challenges and opportunities for active investment managers. Upward pressures on inflation and interest rates could develop as the massive amount of global monetary stimulus in progress takes hold and economies improve. But we believe lingering constraining forces will likely keep inflation and interest rates relatively low for the next six months. In this environment, we continue to believe in a disciplined, diversified, long-term investment approach, using professionally managed stock and bond portfolios to meet financial goals. We appreciate your continued trust in us.
Sincerely,
![](https://capedge.com/proxy/N-CSRS/0000100334-15-000051/jonathanthomassig.jpg)
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
2
Performance |
Total Returns as of April 30, 2015 | |||||||
Average Annual Returns | |||||||
Ticker Symbol | 6 months(1) | 1 year | 5 years | 10 years | Since Inception | Inception Date | |
Investor Class | AFSIX | 4.39% | 11.81% | 12.46% | 8.17% | 7.65% | 2/28/05 |
Russell 1000 Growth Index | — | 6.54% | 16.67% | 15.48% | 9.62% | 9.05% | — |
Institutional Class | AFGNX | 4.41% | 12.05% | 12.68% | — | 6.88% | 9/28/07 |
A Class | AFGAX | 9/28/07 | |||||
No sales charge* | 4.25% | 11.53% | 12.18% | — | 6.41% | ||
With sales charge* | -1.76% | 5.09% | 10.86% | — | 5.58% | ||
C Class | AFGCX | 9/28/07 | |||||
No sales charge* | 3.87% | 10.74% | 11.35% | — | 5.62% | ||
With sales charge* | 3.06% | 10.74% | 11.35% | — | 5.62% | ||
R Class | AFGRX | 4.15% | 11.31% | 11.91% | — | 6.15% | 9/28/07 |
* | Sales charges include initial sales charges and contingent deferred sales charges (CDSCs), as applicable. A Class shares have a 5.75% maximum initial sales charge and may be subject to a maximum CDSC of 1.00%. C Class shares redeemed within 12 months of purchase are subject to a maximum CDSC of 1.00%. The SEC requires that mutual funds provide performance information net of maximum sales charges in all cases where charges could be applied. |
(1) | Total returns for periods less than one year are not annualized. |
Total Annual Fund Operating Expenses | ||||
Investor Class | Institutional Class | A Class | C Class | R Class |
1.00% | 0.80% | 1.25% | 2.00% | 1.50% |
The total annual fund operating expenses shown is as stated in the fund’s prospectus current as of the date of this report. The prospectus may vary from the expense ratio shown elsewhere in this report because it is based on a different time period, includes acquired fund fees and expenses, and, if applicable, does not include fee waivers or expense reimbursements.
Data presented reflect past performance. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance shown. Investment return and principal value will fluctuate, and redemption value may be more or less than original cost. Data assumes reinvestment of dividends and capital gains, and none of the charts reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. To obtain performance data current to the most recent month end, please call 1-800-345-2021 or visit americancentury.com. For additional information about the fund, please consult the prospectus.
3
Fund Characteristics |
APRIL 30, 2015 | |
Top Ten Holdings | % of net assets |
Walt Disney Co. (The) | 4.3% |
PepsiCo, Inc. | 4.1% |
Visa, Inc., Class A | 4.1% |
Oracle Corp. | 3.9% |
Comcast Corp., Class A | 3.8% |
Boeing Co. (The) | 3.6% |
Intuit, Inc. | 3.2% |
Lockheed Martin Corp. | 3.0% |
Caterpillar, Inc. | 3.0% |
Electronic Arts, Inc. | 2.9% |
Top Five Industries | % of net assets |
Software | 11.2% |
Media | 8.1% |
Biotechnology | 6.7% |
Aerospace and Defense | 6.6% |
Specialty Retail | 5.9% |
Types of Investments in Portfolio | % of net assets |
Common Stocks | 97.4% |
Exchange-Traded Funds | 0.8% |
Total Equity Exposure | 98.2% |
Temporary Cash Investments | 1.9% |
Other Assets and Liabilities | (0.1)% |
4
Shareholder Fee Example |
Fund shareholders may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption/exchange fees; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in your fund and to compare these costs with the ongoing cost of investing in other mutual funds.
The example is based on an investment of $1,000 made at the beginning of the period and held for the entire period from November 1, 2014 to April 30, 2015.
Actual Expenses
The table provides information about actual account values and actual expenses for each class. You may use the information, together with the amount you invested, to estimate the expenses that you paid over the period. First, identify the share class you own. Then simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
If you hold Investor Class shares of any American Century Investments fund, or Institutional Class shares of the American Century Diversified Bond Fund, in an American Century Investments account (i.e., not a financial intermediary or retirement plan account), American Century Investments may charge you a $12.50 semiannual account maintenance fee if the value of those shares is less than $10,000. We will redeem shares automatically in one of your accounts to pay the $12.50 fee. 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. Personal accounts include individual accounts, joint accounts, UGMA/UTMA accounts, personal trusts, Coverdell Education Savings Accounts and 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. If you are subject to the Account Maintenance Fee, your account value could be reduced by the fee amount.
Hypothetical Example for Comparison Purposes
The table also provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio of each class of your fund and an assumed rate of return of 5% per year before expenses, which is not the actual return of a fund’s share class. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) or redemption/exchange fees. Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
5
Beginning Account Value 11/1/14 | Ending Account Value 4/30/15 | Expenses Paid During Period(1) 11/1/14 - 4/30/15 | Annualized Expense Ratio(1) | |
Actual | ||||
Investor Class | $1,000 | $1,043.90 | $5.02 | 0.99% |
Institutional Class | $1,000 | $1,044.10 | $4.00 | 0.79% |
A Class | $1,000 | $1,042.50 | $6.28 | 1.24% |
C Class | $1,000 | $1,038.70 | $10.06 | 1.99% |
R Class | $1,000 | $1,041.50 | $7.54 | 1.49% |
Hypothetical | ||||
Investor Class | $1,000 | $1,019.89 | $4.96 | 0.99% |
Institutional Class | $1,000 | $1,020.88 | $3.96 | 0.79% |
A Class | $1,000 | $1,018.65 | $6.21 | 1.24% |
C Class | $1,000 | $1,014.93 | $9.94 | 1.99% |
R Class | $1,000 | $1,017.41 | $7.45 | 1.49% |
(1) | Expenses are equal to the class's annualized expense ratio listed in the table above, multiplied by the average account value over the period, multiplied by 181, the number of days in the most recent fiscal half-year, divided by 365, to reflect the one-half year period. |
6
Schedule of Investments |
APRIL 30, 2015 (UNAUDITED)
Shares | Value | |||
COMMON STOCKS — 97.4% | ||||
Aerospace and Defense — 6.6% | ||||
Boeing Co. (The) | 4,266 | $ | 611,488 | |
Lockheed Martin Corp. | 2,770 | 516,882 | ||
1,128,370 | ||||
Airlines — 1.4% | ||||
Alaska Air Group, Inc. | 3,833 | 245,542 | ||
Automobiles — 0.9% | ||||
Harley-Davidson, Inc. | 2,741 | 154,072 | ||
Beverages — 4.1% | ||||
PepsiCo, Inc. | 7,259 | 690,476 | ||
Biotechnology — 6.7% | ||||
Alexion Pharmaceuticals, Inc.(1) | 2,064 | 349,291 | ||
Biogen Idec, Inc.(1) | 471 | 176,121 | ||
Gilead Sciences, Inc.(1) | 2,689 | 270,271 | ||
Incyte Corp.(1) | 3,580 | 347,833 | ||
1,143,516 | ||||
Capital Markets — 2.2% | ||||
Franklin Resources, Inc. | 7,395 | 381,286 | ||
Chemicals — 2.1% | ||||
Dow Chemical Co. (The) | 5,317 | 271,167 | ||
Sherwin-Williams Co. (The) | 277 | 77,006 | ||
348,173 | ||||
Communications Equipment — 1.4% | ||||
QUALCOMM, Inc. | 3,589 | 244,052 | ||
Electrical Equipment — 0.2% | ||||
Generac Holdings, Inc.(1) | 737 | 30,725 | ||
Energy Equipment and Services — 0.4% | ||||
National Oilwell Varco, Inc. | 1,102 | 59,960 | ||
Food Products — 2.7% | ||||
Mead Johnson Nutrition Co. | 4,725 | 453,222 | ||
Health Care Equipment and Supplies — 2.7% | ||||
C.R. Bard, Inc. | 2,736 | 455,763 | ||
Health Care Providers and Services — 2.9% | ||||
Cardinal Health, Inc. | 5,293 | 446,412 | ||
Express Scripts Holding Co.(1) | 560 | 48,384 | ||
494,796 | ||||
Hotels, Restaurants and Leisure — 2.8% | ||||
Marriott International, Inc., Class A | 5,905 | 472,695 | ||
Internet and Catalog Retail — 2.8% | ||||
Expedia, Inc. | 5,108 | 481,327 | ||
Internet Software and Services — 5.3% | ||||
Facebook, Inc., Class A(1) | 4,168 | 328,313 | ||
Google, Inc., Class A(1) | 562 | 308,409 | ||
Yelp, Inc.(1) | 6,709 | 264,268 | ||
900,990 |
7
Shares | Value | |||
IT Services — 5.8% | ||||
Cognizant Technology Solutions Corp., Class A(1) | 285 | $ | 16,684 | |
Fiserv, Inc.(1) | 198 | 15,365 | ||
Teradata Corp.(1) | 6,036 | 265,524 | ||
Visa, Inc., Class A | 10,447 | 690,024 | ||
987,597 | ||||
Life Sciences Tools and Services — 0.3% | ||||
Illumina, Inc.(1) | 277 | 51,037 | ||
Machinery — 5.7% | ||||
Caterpillar, Inc. | 5,802 | 504,078 | ||
Parker-Hannifin Corp. | 2,317 | 276,557 | ||
WABCO Holdings, Inc.(1) | 1,468 | 182,692 | ||
963,327 | ||||
Media — 8.1% | ||||
Comcast Corp., Class A | 11,153 | 644,197 | ||
Walt Disney Co. (The) | 6,669 | 725,054 | ||
1,369,251 | ||||
Metals and Mining — 1.5% | ||||
United States Steel Corp. | 10,889 | 261,554 | ||
Multiline Retail — 2.8% | ||||
Macy's, Inc. | 7,447 | 481,300 | ||
Oil, Gas and Consumable Fuels — 3.0% | ||||
Concho Resources, Inc.(1) | 194 | 24,572 | ||
Exxon Mobil Corp. | 5,534 | 483,506 | ||
508,078 | ||||
Personal Products — 0.7% | ||||
Estee Lauder Cos., Inc. (The), Class A | 1,554 | 126,325 | ||
Pharmaceuticals — 2.4% | ||||
Teva Pharmaceutical Industries Ltd. ADR | 6,727 | 406,445 | ||
Road and Rail — 2.1% | ||||
Union Pacific Corp. | 3,414 | 362,669 | ||
Semiconductors and Semiconductor Equipment — 0.1% | ||||
Altera Corp. | 283 | 11,795 | ||
Software — 11.2% | ||||
Electronic Arts, Inc.(1) | 8,525 | 495,217 | ||
Intuit, Inc. | 5,346 | 536,364 | ||
Oracle Corp. | 15,370 | 670,440 | ||
Splunk, Inc.(1) | 3,142 | 208,456 | ||
1,910,477 | ||||
Specialty Retail — 5.9% | ||||
Bed Bath & Beyond, Inc.(1) | 6,502 | 458,131 | ||
Gap, Inc. (The) | 3,390 | 134,380 | ||
O'Reilly Automotive, Inc.(1) | 1,868 | 406,906 | ||
999,417 | ||||
Wireless Telecommunication Services — 2.6% | ||||
SBA Communications Corp., Class A(1) | 3,885 | 449,961 | ||
TOTAL COMMON STOCKS (Cost $13,817,568) | 16,574,198 |
8
Shares | Value | |||
EXCHANGE-TRADED FUNDS — 0.8% | ||||
iShares Russell 1000 Growth Index Fund (Cost $140,435) | 1,422 | $ | 141,432 | |
TEMPORARY CASH INVESTMENTS — 1.9% | ||||
Repurchase Agreement, Bank of America Merrill Lynch, (collateralized by various U.S. Treasury obligations, 1.375%, 4/30/20, valued at $52,599), in a joint trading account at 0.08%, dated 4/30/15, due 5/1/15 (Delivery value $51,685) | 51,685 | |||
Repurchase Agreement, Credit Suisse First Boston, Inc., (collateralized by various U.S. Treasury obligations, 1.50%, 12/31/18, valued at $126,265), in a joint trading account at 0.03%, dated 4/30/15, due 5/1/15 (Delivery value $124,043) | 124,043 | |||
Repurchase Agreement, Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 3.625%, 2/15/44, valued at $147,813), at 0.01%, dated 4/30/15, due 5/1/15 (Delivery value $144,000) | 144,000 | |||
State Street Institutional Liquid Reserves Fund, Premier Class | 945 | 945 | ||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $320,673) | 320,673 | |||
TOTAL INVESTMENT SECURITIES — 100.1% (Cost $14,278,676) | 17,036,303 | |||
OTHER ASSETS AND LIABILITIES — (0.1)% | (18,659) | |||
TOTAL NET ASSETS — 100.0% | $ | 17,017,644 |
NOTES TO SCHEDULE OF INVESTMENTS | ||
ADR | - | American Depositary Receipt |
(1) | Non-income producing. |
See Notes to Financial Statements.
9
Statement of Assets and Liabilities |
APRIL 30, 2015 (UNAUDITED) | |||
Assets | |||
Investment securities, at value (cost of $14,278,676) | $ | 17,036,303 | |
Receivable for capital shares sold | 1,334 | ||
Dividends and interest receivable | 4,666 | ||
17,042,303 | |||
Liabilities | |||
Payable for capital shares redeemed | 10,000 | ||
Accrued management fees | 14,151 | ||
Distribution and service fees payable | 508 | ||
24,659 | |||
Net Assets | $ | 17,017,644 | |
Net Assets Consist of: | |||
Capital (par value and paid-in surplus) | $ | 13,256,825 | |
Undistributed net investment income | 13,609 | ||
Undistributed net realized gain | 989,583 | ||
Net unrealized appreciation | 2,757,627 | ||
$ | 17,017,644 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | ||||
Investor Class, $0.01 Par Value | $15,849,444 | 1,276,997 | $12.41 | |||
Institutional Class, $0.01 Par Value | $41,445 | 3,339 | $12.41 | |||
A Class, $0.01 Par Value | $624,066 | 50,398 | $12.38* | |||
C Class, $0.01 Par Value | $380,641 | 32,185 | $11.83 | |||
R Class, $0.01 Par Value | $122,048 | 9,934 | $12.29 |
*Maximum offering price $13.14 (net asset value divided by 0.9425).
See Notes to Financial Statements.
10
Statement of Operations |
FOR THE SIX MONTHS ENDED APRIL 30, 2015 (UNAUDITED) | |||
Investment Income (Loss) | |||
Income: | |||
Dividends (net of foreign taxes withheld of $532) | $ | 119,761 | |
Interest | 47 | ||
119,808 | |||
Expenses: | |||
Management fees | 85,184 | ||
Distribution and service fees: | |||
A Class | 910 | ||
C Class | 1,878 | ||
R Class | 301 | ||
Directors' fees and expenses | 310 | ||
88,583 | |||
Net investment income (loss) | 31,225 | ||
Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on investment transactions | 1,028,679 | ||
Change in net unrealized appreciation (depreciation) on investments | (325,045 | ) | |
Net realized and unrealized gain (loss) | 703,634 | ||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 734,859 |
See Notes to Financial Statements.
11
Statement of Changes in Net Assets |
SIX MONTHS ENDED APRIL 30, 2015 (UNAUDITED) AND YEAR ENDED OCTOBER 31, 2014 | ||||||
Increase (Decrease) in Net Assets | April 30, 2015 | October 31, 2014 | ||||
Operations | ||||||
Net investment income (loss) | $ | 31,225 | $ | 58,084 | ||
Net realized gain (loss) | 1,028,679 | 3,833,059 | ||||
Change in net unrealized appreciation (depreciation) | (325,045 | ) | (1,675,354 | ) | ||
Net increase (decrease) in net assets resulting from operations | 734,859 | 2,215,789 | ||||
Distributions to Shareholders | ||||||
From net investment income: | ||||||
Investor Class | (58,116 | ) | (64,380 | ) | ||
Institutional Class | (222 | ) | (216 | ) | ||
A Class | (750 | ) | (1,153 | ) | ||
From net realized gains: | ||||||
Investor Class | (3,294,997 | ) | (1,657,959 | ) | ||
Institutional Class | (8,120 | ) | (3,744 | ) | ||
A Class | (137,956 | ) | (75,832 | ) | ||
C Class | (80,522 | ) | (48,564 | ) | ||
R Class | (24,279 | ) | (11,461 | ) | ||
Decrease in net assets from distributions | (3,604,962 | ) | (1,863,309 | ) | ||
Capital Share Transactions | ||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | 2,514,376 | (613,458 | ) | |||
Net increase (decrease) in net assets | (355,727 | ) | (260,978 | ) | ||
Net Assets | ||||||
Beginning of period | 17,373,371 | 17,634,349 | ||||
End of period | $ | 17,017,644 | $ | 17,373,371 | ||
Undistributed net investment income | $ | 13,609 | $ | 41,472 |
See Notes to Financial Statements.
12
Notes to Financial Statements |
APRIL 30, 2015 (UNAUDITED)
1. Organization
American Century Mutual Funds, Inc. (the corporation) is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company and is organized as a Maryland corporation. Focused Growth Fund (the fund) is one fund in a series issued by the corporation. The fund is diversified as defined under the 1940 Act. The fund’s investment objective is to seek long-term capital growth.
The fund offers the Investor Class, the Institutional Class, the A Class, the C Class and the R Class. The A Class may incur an initial sales charge. The A Class and C Class may be subject to a contingent deferred sales charge. The share classes differ principally in their respective sales charges and distribution and shareholder servicing expenses and arrangements. The Institutional Class is made available to institutional shareholders or through financial intermediaries whose clients do not require the same level of shareholder and administrative services as shareholders of other classes. As a result, the Institutional Class is charged a lower unified management fee.
2. Significant Accounting Policies
The following is a summary of significant accounting policies consistently followed by the fund in preparation of its financial statements. The fund is an investment company and follows accounting and reporting guidance in accordance with accounting principles generally accepted in the United States of America. This may require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from these estimates. Management evaluated the impact of events or transactions occurring through the date the financial statements were issued that would merit recognition or disclosure.
Investment Valuations — The fund determines the fair value of its investments and computes its net asset value per share at 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. The Board of Directors has adopted valuation policies and procedures to guide the investment advisor in the fund’s investment valuation process and to provide methodologies for the oversight of the fund’s pricing function.
Equity securities that are listed or traded on a domestic securities exchange are valued at the last reported sales price or at the official closing price as provided by the exchange. Equity securities traded on foreign securities exchanges are generally valued at the closing price of such securities on the exchange where primarily traded or at the close of the NYSE, if that is earlier. If no last sales price is reported, or if local convention or regulation so provides, the mean of the latest bid and asked prices may be used. Securities traded over-the-counter are valued at the mean of the latest bid and asked prices, the last sales price, or the official closing price.
Fixed income securities maturing within 60 days at the time of purchase may be valued at cost, plus or minus any amortized discount or premium or at the evaluated mean as provided by an independent pricing service. Evaluated mean prices are commonly derived through utilization of market models, which may consider, among other factors: trade data, quotations from 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.
Open-end management investment companies are valued at the reported net asset value per share. Repurchase agreements are valued at cost, which approximates fair value.
If the fund determines that the market price for an investment is not readily available or the valuation methods mentioned above do not reflect an investment’s fair value, such investment is valued as determined in good faith by the Board of Directors or its delegate, in accordance with policies and procedures adopted by the Board of Directors. In its determination of fair value, the fund may review several factors including, but not limited to, market information regarding the specific investment or comparable investments and correlation with other investment types, futures indices or general market indicators. Circumstances that may cause the fund to use these procedures to value an investment include, but are not limited to: an investment has been declared in default or is distressed; trading in a security has been suspended during the trading day or a
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security is not actively trading on its principal exchange; prices received from a regular pricing source are deemed unreliable; or there is a foreign market holiday and no trading occurred.
The fund monitors for significant events occurring after the close of an investment’s primary exchange but before the fund’s net asset value per share is determined. Significant events may include, but are not limited to: corporate announcements and transactions; governmental action and political unrest that could impact a specific investment or an investment sector; or armed conflicts, natural disasters and similar events that could affect investments in a specific country or region. The fund also monitors for significant fluctuations between domestic and foreign markets, as evidenced by the U.S. market or such other indicators that the Board of Directors, or its delegate, deems appropriate. If significant fluctuations in foreign markets are identified, the fund may apply a model-derived factor to the closing price of equity securities traded on foreign securities exchanges. The factor is based on observable market data as provided by an independent pricing service.
Security Transactions — Security transactions are accounted for as of the trade date. Net realized gains and losses are determined on the identified cost basis, which is also used for federal income tax purposes.
Investment Income — Dividend income less foreign taxes withheld, if any, is recorded as of the ex-dividend date. Distributions received on securities that represent a return of capital or long-term capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The fund may estimate the components of distributions received that may be considered nontaxable distributions or long-term capital gain distributions for income tax purposes. Interest income is recorded on the accrual basis and includes accretion of discounts and amortization of premiums.
Repurchase Agreements — The fund may enter into repurchase agreements with institutions that American Century Investment Management, Inc. (ACIM) (the investment advisor) has determined are creditworthy pursuant to criteria adopted by the Board of Directors. The fund requires that the collateral, represented by securities, received in a repurchase transaction be transferred to the custodian in a manner sufficient to enable the fund to obtain those securities in the event of a default under the repurchase agreement. ACIM monitors, on a daily basis, the securities transferred to ensure the value, including accrued interest, of the securities under each repurchase agreement is equal to or greater than amounts owed to the fund under each repurchase agreement.
Joint Trading Account — Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the fund, along with certain other funds in the American Century Investments family of funds, may transfer uninvested cash balances into a joint trading account. These balances are invested in one or more repurchase agreements that are collateralized by U.S. Treasury or Agency obligations.
Income Tax Status — It is the fund’s policy to distribute substantially all net investment income and net realized gains to shareholders and to otherwise qualify as a regulated investment company under provisions of the Internal Revenue Code. Accordingly, no provision has been made for income taxes. The fund files U.S. federal, state, local and non-U.S. tax returns as applicable. The fund's tax returns are subject to examination by the relevant taxing authority until expiration of the applicable statute of limitations, which is generally three years from the date of filing but can be longer in certain jurisdictions. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination and for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Multiple Class — All shares of the fund represent an equal pro rata interest in the net assets of the class to which such shares belong, and have identical voting, dividend, liquidation and other rights and the same terms and conditions, except for class specific expenses and exclusive rights to vote on matters affecting only individual classes. Income, non-class specific expenses, and realized and unrealized capital gains and losses of the fund are allocated to each class of shares based on their relative net assets.
Distributions to Shareholders — Distributions from net investment income and net realized gains, if any, are generally declared and paid annually. The fund may elect to treat a portion of its payment to a redeeming shareholder, which represents the pro rata share of undistributed net investment income and net realized gains, as a distribution for federal income tax purposes (tax equalization).
Indemnifications — Under the corporation’s organizational documents, its officers and directors are indemnified against certain liabilities arising out of the performance of their duties to the fund. In addition, in the normal course of business, the fund enters into contracts that provide general indemnifications. The maximum exposure under these arrangements is unknown as this would involve future claims that may be made against a fund. The risk of material loss from such claims is considered by management to be remote.
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3. Fees and Transactions with Related Parties
Certain officers and directors of the corporation are also officers and/or directors of American Century Companies, Inc. (ACC). The corporation’s investment advisor, ACIM, the corporation's distributor, American Century Investment Services, Inc. (ACIS), and the corporation’s transfer agent, American Century Services, LLC, are wholly owned, directly or indirectly, by ACC.
Management Fees — The corporation has entered into a management agreement with ACIM, under which ACIM provides the fund with investment advisory and management services in exchange for a single, unified management fee (the fee) per class. The agreement provides that all expenses of managing and operating the fund, except distribution and service fees, brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), and extraordinary expenses, will be paid by ACIM. The fee is computed and accrued daily based on each class’s daily net assets and paid monthly in arrears. The rate of the fee is determined by applying a fee rate calculation formula. This formula takes into account the fund’s assets as well as certain assets, if any, of other clients of the investment advisor outside the American Century Investments family of funds (such as subadvised funds and separate accounts) that have very similar investment teams and investment strategies (strategy assets). The annual management fee schedule ranges from 0.800% to 0.990% for the Investor Class, A Class, C Class and R Class. The annual management fee schedule ranges from 0.600% to 0.790% for the Institutional Class. The effective annual management fee for each class for the six months ended April 30, 2015 was 0.99% for the Investor Class, A Class, C Class and R Class and 0.79% for the Institutional Class.
Distribution and Service Fees — The Board of Directors has adopted a separate Master Distribution and Individual Shareholder Services Plan for each of the A Class, C Class and R Class (collectively the plans), pursuant to Rule 12b-1 of the 1940 Act. The plans provide that the A Class will pay ACIS an annual distribution and service fee of 0.25%. The plans provide that the C Class will pay ACIS an annual distribution and service fee of 1.00%, of which 0.25% is paid for individual shareholder services and 0.75% is paid for distribution services. The plans provide that the R Class will pay ACIS an annual distribution and service fee of 0.50%. The fees are computed and accrued daily based on each class’s daily net assets and paid monthly in arrears. The fees are used to pay financial intermediaries for distribution and individual shareholder services. Fees incurred under the plans during the six months ended April 30, 2015 are detailed in the Statement of Operations.
Directors' Fees and Expenses — The Board of Directors is responsible for overseeing the investment advisor’s management and operations of the fund. The directors receive detailed information about the fund and its investment advisor regularly throughout the year, and meet at least quarterly with management of the investment advisor to review reports about fund operations. The fund’s officers do not receive compensation from the fund.
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the six months ended April 30, 2015 were $5,589,295 and $6,663,199, respectively.
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5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended April 30, 2015 | Year ended October 31, 2014 | |||||||||
Shares | Amount | Shares | Amount | |||||||
Investor Class/Shares Authorized | 50,000,000 | 50,000,000 | ||||||||
Sold | 69,302 | $ | 904,453 | 83,756 | $ | 1,199,614 | ||||
Issued in reinvestment of distributions | 280,501 | 3,295,886 | 126,729 | 1,704,510 | ||||||
Redeemed | (127,931 | ) | (1,583,499 | ) | (207,315 | ) | (2,973,387 | ) | ||
221,872 | 2,616,840 | 3,170 | (69,263 | ) | ||||||
Institutional Class/Shares Authorized | 10,000,000 | 10,000,000 | ||||||||
Issued in reinvestment of distributions | 711 | 8,342 | 295 | 3,960 | ||||||
A Class/Shares Authorized | 10,000,000 | 10,000,000 | ||||||||
Sold | 8,102 | 101,489 | 31,298 | 441,244 | ||||||
Issued in reinvestment of distributions | 11,513 | 135,042 | 5,575 | 74,867 | ||||||
Redeemed | (31,326 | ) | (442,159 | ) | (26,665 | ) | (378,220 | ) | ||
(11,711 | ) | (205,628 | ) | 10,208 | 137,891 | |||||
C Class/Shares Authorized | 10,000,000 | 10,000,000 | ||||||||
Sold | 1,244 | 15,067 | 3,194 | 45,140 | ||||||
Issued in reinvestment of distributions | 5,686 | 63,915 | 3,058 | 39,961 | ||||||
Redeemed | (745 | ) | (8,828 | ) | (10,239 | ) | (139,779 | ) | ||
6,185 | 70,154 | (3,987 | ) | (54,678 | ) | |||||
R Class/Shares Authorized | 10,000,000 | 10,000,000 | ||||||||
Sold | 180 | 2,404 | 436 | 6,356 | ||||||
Issued in reinvestment of distributions | 2,084 | 24,279 | 856 | 11,461 | ||||||
Redeemed | (156 | ) | (2,015 | ) | (42,964 | ) | (649,185 | ) | ||
2,108 | 24,668 | (41,672 | ) | (631,368 | ) | |||||
Net increase (decrease) | 219,165 | $ | 2,514,376 | (31,986 | ) | $ | (613,458 | ) |
6. Fair Value Measurements
The fund’s investments valuation process is based on several considerations and may use multiple inputs to determine the fair value of the investments held by the fund. In conformity with accounting principles generally accepted in the United States of America, the inputs used to determine a valuation are classified into three broad levels.
• | Level 1 valuation inputs consist of unadjusted quoted prices in an active market for identical investments. |
• | Level 2 valuation inputs consist of direct or indirect observable market data (including quoted prices for comparable investments, evaluations of subsequent market events, interest rates, prepayment speeds, credit risk, etc.). These inputs also consist of quoted prices for identical investments initially expressed in local currencies that are adjusted through translation into U.S. dollars. |
• | Level 3 valuation inputs consist of unobservable data (including a fund’s own assumptions). |
The level classification is based on the lowest level input that is significant to the fair valuation measurement. The valuation inputs are not necessarily an indication of the risks associated with investing in these securities or other financial instruments. There were no significant transfers between levels during the period.
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The following is a summary of the level classifications as of period end. The Schedule of Investments provides additional information on the fund’s portfolio holdings.
Level 1 | Level 2 | Level 3 | ||||||
Assets | ||||||||
Investment Securities | ||||||||
Common Stocks | $ | 16,574,198 | — | — | ||||
Exchange-Traded Funds | 141,432 | — | — | |||||
Temporary Cash Investments | 945 | $ | 319,728 | — | ||||
$ | 16,716,575 | $ | 319,728 | — |
7. Federal Tax Information
The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
As of April 30, 2015, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $ | 14,320,100 | |
Gross tax appreciation of investments | $ | 3,088,327 | |
Gross tax depreciation of investments | (372,124 | ) | |
Net tax appreciation (depreciation) of investments | $ | 2,716,203 |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales.
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Financial Highlights |
For a Share Outstanding Throughout the Years Ended October 31 (except as noted) | |||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||
Income From Investment Operations: | Distributions From: | 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 | Net Investment Income | Net Realized Gains | Total Distributions | 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 | |||||||||||||||
2015(3) | $15.08 | 0.03 | 0.44 | 0.47 | (0.05) | (3.09) | (3.14) | $12.41 | 4.39% | 0.99%(4) | 0.40%(4) | 33% | $15,849 | ||
2014 | $14.89 | 0.05 | 1.80 | 1.85 | (0.06) | (1.60) | (1.66) | $15.08 | 13.75% | 1.00% | 0.38% | 97% | $15,906 | ||
2013 | $12.00 | 0.08 | 2.89 | 2.97 | (0.08) | — | (0.08) | $14.89 | 24.93% | 1.00% | 0.64% | 73% | $15,664 | ||
2012 | $10.70 | 0.08 | 1.28 | 1.36 | (0.06) | — | (0.06) | $12.00 | 12.78% | 1.01% | 0.70% | 59% | $13,828 | ||
2011 | $10.17 | 0.06 | 0.53 | 0.59 | (0.06) | — | (0.06) | $10.70 | 5.76% | 1.00% | 0.54% | 91% | $14,335 | ||
2010 | $8.73 | 0.04 | 1.40 | 1.44 | —(5) | — | —(5) | $10.17 | 16.54% | 1.02% | 0.38% | 66% | $12,739 | ||
Institutional Class | |||||||||||||||
2015(3) | $15.10 | 0.04 | 0.44 | 0.48 | (0.08) | (3.09) | (3.17) | $12.41 | 4.41% | 0.79%(4) | 0.60%(4) | 33% | $41 | ||
2014 | $14.91 | 0.08 | 1.80 | 1.88 | (0.09) | (1.60) | (1.69) | $15.10 | 14.06% | 0.80% | 0.58% | 97% | $40 | ||
2013 | $12.01 | 0.11 | 2.88 | 2.99 | (0.09) | — | (0.09) | $14.91 | 25.06% | 0.80% | 0.84% | 73% | $35 | ||
2012 | $10.70 | 0.10 | 1.29 | 1.39 | (0.08) | — | (0.08) | $12.01 | 13.09% | 0.81% | 0.90% | 59% | $28 | ||
2011 | $10.17 | 0.08 | 0.53 | 0.61 | (0.08) | — | (0.08) | $10.70 | 5.98% | 0.80% | 0.74% | 91% | $25 | ||
2010 | $8.73 | 0.05 | 1.41 | 1.46 | (0.02) | — | (0.02) | $10.17 | 16.77% | 0.82% | 0.58% | 66% | $23 |
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For a Share Outstanding Throughout the Years Ended October 31 (except as noted) | |||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||
Income From Investment Operations: | Distributions From: | 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 | Net Investment Income | Net Realized Gains | Total Distributions | 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) | |||
A Class | |||||||||||||||
2015(3) | $15.03 | 0.01 | 0.45 | 0.46 | (0.02) | (3.09) | (3.11) | $12.38 | 4.25% | 1.24%(4) | 0.15%(4) | 33% | $624 | ||
2014 | $14.84 | 0.02 | 1.79 | 1.81 | (0.02) | (1.60) | (1.62) | $15.03 | 13.49% | 1.25% | 0.13% | 97% | $933 | ||
2013 | $11.99 | 0.05 | 2.88 | 2.93 | (0.08) | — | (0.08) | $14.84 | 24.53% | 1.25% | 0.39% | 73% | $770 | ||
2012 | $10.68 | 0.05 | 1.29 | 1.34 | (0.03) | — | (0.03) | $11.99 | 12.62% | 1.26% | 0.45% | 59% | $1,376 | ||
2011 | $10.15 | 0.04 | 0.52 | 0.56 | (0.03) | — | (0.03) | $10.68 | 5.51% | 1.25% | 0.29% | 91% | $1,040 | ||
2010 | $8.74 | 0.01 | 1.40 | 1.41 | — | — | — | $10.15 | 16.27% | 1.27% | 0.13% | 66% | $501 | ||
C Class | |||||||||||||||
2015(3) | $14.52 | (0.04) | 0.44 | 0.40 | — | (3.09) | (3.09) | $11.83 | 3.87% | 1.99%(4) | (0.60)%(4) | 33% | $381 | ||
2014 | $14.47 | (0.09) | 1.74 | 1.65 | — | (1.60) | (1.60) | $14.52 | 12.66% | 2.00% | (0.62)% | 97% | $378 | ||
2013 | $11.75 | (0.05) | 2.82 | 2.77 | (0.05) | — | (0.05) | $14.47 | 23.65% | 2.00% | (0.36)% | 73% | $434 | ||
2012 | $10.52 | (0.03) | 1.26 | 1.23 | — | — | — | $11.75 | 11.69% | 2.01% | (0.30)% | 59% | $311 | ||
2011 | $10.05 | (0.05) | 0.52 | 0.47 | — | — | — | $10.52 | 4.68% | 2.00% | (0.46)% | 91% | $346 | ||
2010 | $8.71 | (0.06) | 1.40 | 1.34 | — | — | — | $10.05 | 15.38% | 2.02% | (0.62)% | 66% | $131 | ||
R Class | |||||||||||||||
2015(3) | $14.93 | (0.01) | 0.46 | 0.45 | — | (3.09) | (3.09) | $12.29 | 4.15% | 1.49%(4) | (0.10)%(4) | 33% | $122 | ||
2014 | $14.77 | 0.02 | 1.74 | 1.76 | — | (1.60) | (1.60) | $14.93 | 13.20% | 1.50% | (0.12)% | 97% | $117 | ||
2013 | $11.95 | 0.02 | 2.87 | 2.89 | (0.07) | — | (0.07) | $14.77 | 24.27% | 1.50% | 0.14% | 73% | $731 | ||
2012 | $10.65 | 0.02 | 1.29 | 1.31 | (0.01) | — | (0.01) | $11.95 | 12.29% | 1.51% | 0.20% | 59% | $558 | ||
2011 | $10.12 | 0.01 | 0.52 | 0.53 | —(5) | — | —(5) | $10.65 | 5.26% | 1.50% | 0.04% | 91% | $480 | ||
2010 | $8.73 | (0.01) | 1.40 | 1.39 | — | — | — | $10.12 | 15.92% | 1.52% | (0.12)% | 66% | $24 |
Notes to Financial Highlights |
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(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 and do not reflect applicable sales charges, if any. Total returns for periods less than one year are not annualized. |
(3) | Six months ended April 30, 2015 (unaudited). |
(4) | Annualized. |
(5) | Per-share amount was less than $0.005. |
See Notes to Financial Statements.
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Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain IRAs are subject to federal income tax withholding, unless you elect not to have withholding apply. Tax will be withheld on the total amount withdrawn even though you may be receiving amounts that are not subject to withholding, such as nondeductible contributions. In such case, excess amounts of withholding could occur. You may adjust your withholding election so that a greater or lesser amount will be withheld.
If you don’t want us to withhold on this amount, you must notify us to not withhold the federal income tax. You may notify us in writing or in certain situations by telephone or through other electronic means. For systematic withdrawals, your withholding election will remain in effect until revoked or changed by filing a new election. You have the right to revoke your election at any time.
Remember, even if you elect not to have income tax withheld, you are liable for paying income tax on the taxable portion of your withdrawal. If you elect not to have income tax withheld or you don’t have enough income tax withheld, you may be responsible for payment of estimated tax. You may incur penalties under the estimated tax rules if your withholding and estimated tax payments are not sufficient. You can reduce or defer the income tax on a distribution by directly or indirectly rolling such distribution over to another IRA or eligible plan. You should consult your tax advisor for additional information.
State tax will be withheld if, at the time of your distribution, your address is within one of the mandatory withholding states and you have federal income tax withheld (or as otherwise required by state law). State taxes will be withheld from your distribution in accordance with the respective state rules.
Distributions you receive from 403(b), 457 and qualified plans are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
A description of the policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund is available without charge, upon request, by calling 1-800-345-2021. It is also available on the "About Us" page of American Century Investments’ website at americancentury.com and on the Securities and Exchange Commission’s website at sec.gov. Information regarding how the investment advisor voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the "About Us" page at americancentury.com. It is also available at sec.gov.
Quarterly Portfolio Disclosure
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-Q. The fund’s Forms N-Q are available on the SEC’s website at sec.gov, and may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The fund also makes its complete schedule of portfolio holdings for the most recent quarter of its fiscal year available on its
website at americancentury.com and, upon request, by calling 1-800-345-2021.
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Notes |
22
Notes |
23
Notes |
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Contact Us | americancentury.com | |
Automated Information Line | 1-800-345-8765 | |
Investor Services Representative | 1-800-345-2021 or 816-531-5575 | |
Investors Using Advisors | 1-800-378-9878 | |
Business, Not-For-Profit, Employer-Sponsored Retirement Plans | 1-800-345-3533 | |
Banks and Trust Companies, Broker-Dealers, Financial Professionals, Insurance Companies | 1-800-345-6488 | |
Telecommunications Relay Service for the Deaf | 711 | |
American Century Mutual Funds, Inc. | ||
Investment Advisor: American Century Investment Management, Inc. Kansas City, Missouri | ||
This report and the statements it contains are submitted for the general information of our shareholders. The report is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus. | ||
©2015 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-85685 1506 |
SEMIANNUAL REPORT | APRIL 30, 2015 |
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Fundamental Equity Fund
Table of Contents |
Any opinions expressed in this report reflect those of the author as of the date of the report, and do not necessarily represent the opinions of American Century Investments® or any other person in the American Century Investments organization. Any such opinions are subject to change at any time based upon market or other conditions and American Century Investments disclaims any responsibility to update such opinions. These opinions may not be relied upon as investment advice and, because investment decisions made by American Century Investments funds are based on numerous factors, may not be relied upon as an indication of trading intent on behalf of any American Century Investments fund. Security examples are used for representational purposes only and are not intended as recommendations to purchase or sell securities. Performance information for comparative indices and securities is provided to American Century Investments by third party vendors. To the best of American Century Investments’ knowledge, such information is accurate at the time of printing.
President’s Letter |
![]() | Dear Investor: Thank you for reviewing this semiannual report for the six months ended April 30, 2015. It provides a macroeconomic and financial market overview (below), followed by fund performance, a schedule of fund investments, and other financial information. For additional commentary and updated information on fund performance, key factors that affected asset returns, and other insights regarding the investment markets, we encourage you to visit our website, americancentury.com. |
Jonathan Thomas |
Global Divergence in Monetary Policies Influenced Investor Behavior
The six-month reporting period saw big swings in market returns, triggered in part by central bank moves. In October 2014, just before the period started, the U.S. Federal Reserve ended its latest bond-buying program (quantitative easing, QE). As QE wound down, the U.S. economy enjoyed 5% annualized growth (after inflation) in the third quarter of 2014, the highest rate since the third quarter of 2003. But while QE was ending in the U.S., other major central banks were starting or increasing QE as their economies faltered. A “global divergence” of economic growth and monetary policies opened between the U.S. and most of the rest of the developed world.
This divergence helped fuel increased demand for the U.S. dollar and U.S. dollar-denominated assets, and put downward pressure on commodities prices, most notably oil. Though the resulting dollar rally and oil price decline reversed somewhat in April 2015, the dollar remained 9% higher for the reporting period, as measured by the U.S. Dollar Index, while oil remained more than 25% lower, as measured by both Brent and West Texas Intermediate crude oil futures. In this environment, U.S. stocks and bonds posted moderate gains—the S&P 500 Index and the Barclays U.S. Aggregate Bond Index returned 4.40% and 2.06%, respectively.
We expect monetary policy divergence between the U.S. and other major developed economies to continue this year, accompanied by market volatility. This could present both challenges and opportunities for active investment managers. Upward pressures on inflation and interest rates could develop as the massive amount of global monetary stimulus in progress takes hold and economies improve. But we believe lingering constraining forces will likely keep inflation and interest rates relatively low for the next six months. In this environment, we continue to believe in a disciplined, diversified, long-term investment approach, using professionally managed stock and bond portfolios to meet financial goals. We appreciate your continued trust in us.
Sincerely,
![](https://capedge.com/proxy/N-CSRS/0000100334-15-000051/jonathanthomassig.jpg)
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
2
Performance |
Total Returns as of April 30, 2015 | |||||||
Average Annual Returns | |||||||
Ticker Symbol | 6 months(1) | 1 year | 5 years | 10 years | Since Inception | Inception Date | |
A Class | AFDAX | 11/30/04 | |||||
No sales charge* | 3.59% | 12.32% | 13.94% | 9.75% | 9.32% | ||
With sales charge* | -2.39% | 5.88% | 12.59% | 9.10% | 8.70% | ||
S&P 500 Index | — | 4.40% | 12.98% | 14.32% | 8.32% | 7.90% | — |
Investor Class | AFDIX | 3.75% | 12.57% | 14.23% | — | 9.31% | 7/29/05 |
Institutional Class | AFEIX | 3.85% | 12.83% | 14.46% | — | 9.52% | 7/29/05 |
B Class | AFDBX | 11/30/04 | |||||
No sales charge* | 3.24% | 11.48% | 13.09% | 8.92% | 8.50% | ||
With sales charge* | -1.76% | 7.48% | 12.97% | 8.92% | 8.50% | ||
C Class | AFDCX | 11/30/04 | |||||
No sales charge* | 3.19% | 11.48% | 13.09% | 8.92% | 8.50% | ||
With sales charge* | 2.19% | 11.48% | 13.09% | 8.92% | 8.50% | ||
R Class | AFDRX | 3.49% | 12.03% | 13.64% | — | 8.75% | 7/29/05 |
* Sales charges include initial sales charges and contingent deferred sales charges (CDSCs), as applicable. A Class shares have a 5.75% maximum initial sales charge and may be subject to a maximum CDSC of 1.00%. B Class shares redeemed within six years of purchase are subject to a CDSC that declines from 5.00% during the first year to 0.00% after the sixth year. C Class shares redeemed within 12 months of purchase are subject to a maximum CDSC of 1.00%. The SEC requires that mutual funds provide performance information net of maximum sales charges in all cases where charges could be applied.
(1) | Total returns for periods less than one year are not annualized. |
Total Annual Fund Operating Expenses | |||||
Investor Class | Institutional Class | A Class | B Class | C Class | R Class |
1.00% | 0.80% | 1.25% | 2.00% | 2.00% | 1.50% |
The total annual fund operating expenses shown is as stated in the fund’s prospectus current as of the date of this report. The prospectus may vary from the expense ratio shown elsewhere in this report because it is based on a different time period, includes acquired fund fees and expenses, and, if applicable, does not include fee waivers or expense reimbursements.
Data presented reflect past performance. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance shown. Investment return and principal value will fluctuate, and redemption value may be more or less than original cost. Data assumes reinvestment of dividends and capital gains, and none of the charts reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. To obtain performance data current to the most recent month end, please call 1-800-345-2021 or visit americancentury.com. For additional information about the fund, please consult the prospectus.
3
Fund Characteristics |
APRIL 30, 2015 | |
Top Ten Holdings | % of net assets |
Apple, Inc. | 4.2% |
Johnson & Johnson | 3.0% |
Exxon Mobil Corp. | 2.9% |
Wells Fargo & Co. | 2.9% |
JPMorgan Chase & Co. | 2.8% |
Pfizer, Inc. | 2.5% |
Comcast Corp., Class A | 2.1% |
Visa, Inc., Class A | 1.9% |
Home Depot, Inc. (The) | 1.9% |
American International Group, Inc. | 1.9% |
Top Five Industries | % of net assets |
Pharmaceuticals | 6.9% |
Banks | 6.7% |
Oil, Gas and Consumable Fuels | 6.1% |
Technology Hardware, Storage and Peripherals | 5.8% |
Media | 4.2% |
Types of Investments in Portfolio | % of net assets |
Common Stocks | 98.9% |
Exchange-Traded Funds | 0.4% |
Total Equity Exposure | 99.3% |
Temporary Cash Investments | 0.8% |
Other Assets and Liabilities | (0.1)% |
4
Shareholder Fee Example |
Fund shareholders may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption/exchange fees; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in your fund and to compare these costs with the ongoing cost of investing in other mutual funds.
The example is based on an investment of $1,000 made at the beginning of the period and held for the entire period from November 1, 2014 to April 30, 2015.
Actual Expenses
The table provides information about actual account values and actual expenses for each class. You may use the information, together with the amount you invested, to estimate the expenses that you paid over the period. First, identify the share class you own. Then simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
If you hold Investor Class shares of any American Century Investments fund, or Institutional Class shares of the American Century Diversified Bond Fund, in an American Century Investments account (i.e., not a financial intermediary or retirement plan account), American Century Investments may charge you a $12.50 semiannual account maintenance fee if the value of those shares is less than $10,000. We will redeem shares automatically in one of your accounts to pay the $12.50 fee. 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. Personal accounts include individual accounts, joint accounts, UGMA/UTMA accounts, personal trusts, Coverdell Education Savings Accounts and 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. If you are subject to the Account Maintenance Fee, your account value could be reduced by the fee amount.
Hypothetical Example for Comparison Purposes
The table also provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio of each class of your fund and an assumed rate of return of 5% per year before expenses, which is not the actual return of a fund’s share class. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) or redemption/exchange fees. Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
5
Beginning Account Value 11/1/14 | Ending Account Value 4/30/15 | Expenses Paid During Period(1)11/1/14 - 4/30/15 | Annualized Expense Ratio(1) | |
Actual | ||||
Investor Class | $1,000 | $1,037.50 | $5.00 | 0.99% |
Institutional Class | $1,000 | $1,038.50 | $3.99 | 0.79% |
A Class | $1,000 | $1,035.90 | $6.26 | 1.24% |
B Class | $1,000 | $1,032.40 | $10.03 | 1.99% |
C Class | $1,000 | $1,031.90 | $10.03 | 1.99% |
R Class | $1,000 | $1,034.90 | $7.52 | 1.49% |
Hypothetical | ||||
Investor Class | $1,000 | $1,019.89 | $4.96 | 0.99% |
Institutional Class | $1,000 | $1,020.88 | $3.96 | 0.79% |
A Class | $1,000 | $1,018.65 | $6.21 | 1.24% |
B Class | $1,000 | $1,014.93 | $9.94 | 1.99% |
C Class | $1,000 | $1,014.93 | $9.94 | 1.99% |
R Class | $1,000 | $1,017.41 | $7.45 | 1.49% |
(1) | Expenses are equal to the class's annualized expense ratio listed in the table above, multiplied by the average account value over the period, multiplied by 181, the number of days in the most recent fiscal half-year, divided by 365, to reflect the one-half year period. |
6
Schedule of Investments |
APRIL 30, 2015 (UNAUDITED)
Shares | Value | |||
COMMON STOCKS — 98.9% | ||||
Aerospace and Defense — 3.9% | ||||
Boeing Co. (The) | 4,890 | $ | 700,932 | |
General Dynamics Corp. | 17,543 | 2,409,005 | ||
Lockheed Martin Corp. | 15,170 | 2,830,722 | ||
Northrop Grumman Corp. | 26,318 | 4,054,025 | ||
Raytheon Co. | 1,260 | 131,040 | ||
10,125,724 | ||||
Airlines — 0.8% | ||||
Delta Air Lines, Inc. | 46,349 | 2,069,019 | ||
Banks — 6.7% | ||||
BancorpSouth, Inc. | 8,983 | 217,478 | ||
Bank of America Corp. | 31,941 | 508,820 | ||
Citigroup, Inc. | 22,212 | 1,184,344 | ||
Fifth Third Bancorp | 1,386 | 27,720 | ||
JPMorgan Chase & Co. | 113,831 | 7,200,949 | ||
KeyCorp | 19,156 | 276,804 | ||
M&T Bank Corp. | 428 | 51,219 | ||
PacWest Bancorp | 6,419 | 289,497 | ||
Wells Fargo & Co. | 136,009 | 7,494,096 | ||
17,250,927 | ||||
Beverages — 2.0% | ||||
Coca-Cola Enterprises, Inc. | 16,343 | 725,793 | ||
Dr Pepper Snapple Group, Inc. | 17,404 | 1,297,990 | ||
PepsiCo, Inc. | 31,466 | 2,993,046 | ||
5,016,829 | ||||
Biotechnology — 3.9% | ||||
Alexion Pharmaceuticals, Inc.(1) | 1,011 | 171,092 | ||
Amgen, Inc. | 8,521 | 1,345,551 | ||
Biogen Idec, Inc.(1) | 11,551 | 4,319,265 | ||
Gilead Sciences, Inc.(1) | 37,975 | 3,816,867 | ||
Regeneron Pharmaceuticals, Inc.(1) | 596 | 272,646 | ||
9,925,421 | ||||
Capital Markets — 1.7% | ||||
Ameriprise Financial, Inc. | 11,988 | 1,501,857 | ||
BlackRock, Inc. | 1,931 | 702,768 | ||
Franklin Resources, Inc. | 12,571 | 648,161 | ||
Goldman Sachs Group, Inc. (The) | 969 | 190,331 | ||
Legg Mason, Inc. | 26,211 | 1,380,009 | ||
4,423,126 | ||||
Chemicals — 2.2% | ||||
CF Industries Holdings, Inc. | 3,130 | 899,781 | ||
Dow Chemical Co. (The) | 11,444 | 583,644 | ||
LyondellBasell Industries NV, Class A | 5,336 | 552,383 | ||
PPG Industries, Inc. | 8,724 | 1,932,889 | ||
Sherwin-Williams Co. (The) | 6,422 | 1,785,316 | ||
5,754,013 |
7
Shares | Value | |||
Commercial Services and Supplies — 0.3% | ||||
Deluxe Corp. | 1,569 | $ | 101,593 | |
Tyco International plc | 15,163 | 597,119 | ||
698,712 | ||||
Communications Equipment — 3.7% | ||||
ARRIS Group, Inc.(1) | 9,381 | 315,905 | ||
Cisco Systems, Inc. | 137,727 | 3,970,670 | ||
Harris Corp. | 1,950 | 156,468 | ||
Motorola Solutions, Inc. | 26,976 | 1,611,816 | ||
QUALCOMM, Inc. | 52,669 | 3,581,492 | ||
9,636,351 | ||||
Construction and Engineering — 0.1% | ||||
Fluor Corp. | 5,268 | 316,818 | ||
Diversified Consumer Services — 0.3% | ||||
H&R Block, Inc. | 24,263 | 733,713 | ||
Diversified Financial Services — 1.3% | ||||
Berkshire Hathaway, Inc., Class B(1) | 8,977 | 1,267,642 | ||
McGraw-Hill Cos., Inc. (The) | 13,238 | 1,380,724 | ||
Moody's Corp. | 5,256 | 565,125 | ||
3,213,491 | ||||
Diversified Telecommunication Services — 2.1% | ||||
AT&T, Inc. | 80,810 | 2,799,259 | ||
CenturyLink, Inc. | 46,940 | 1,687,962 | ||
Level 3 Communications, Inc.(1) | 2,102 | 117,586 | ||
Verizon Communications, Inc. | 18,136 | 914,780 | ||
5,519,587 | ||||
Electric Utilities — 1.0% | ||||
Duke Energy Corp. | 1,123 | 87,111 | ||
Edison International | 9,615 | 585,938 | ||
Entergy Corp. | 15,698 | 1,211,572 | ||
Xcel Energy, Inc. | 22,708 | 770,028 | ||
2,654,649 | ||||
Electrical Equipment† | ||||
Emerson Electric Co. | 1,157 | 68,066 | ||
Electronic Equipment, Instruments and Components† | ||||
Dolby Laboratories, Inc., Class A | 634 | 25,525 | ||
FLIR Systems, Inc. | 1,540 | 47,570 | ||
73,095 | ||||
Energy Equipment and Services — 2.2% | ||||
Cameron International Corp.(1) | 7,148 | 391,853 | ||
Diamond Offshore Drilling, Inc. | 22,920 | 767,132 | ||
Nabors Industries Ltd. | 6,816 | 113,827 | ||
National Oilwell Varco, Inc. | 67,311 | 3,662,392 | ||
Patterson-UTI Energy, Inc. | 1,040 | 23,244 | ||
Schlumberger Ltd. | 2,328 | 220,252 | ||
Transocean Ltd. | 31,196 | 587,109 | ||
5,765,809 | ||||
Food and Staples Retailing — 3.5% | ||||
CVS Health Corp. | 48,276 | 4,793,324 | ||
Kroger Co. (The) | 51,212 | 3,529,019 |
8
Shares | Value | |||
Rite Aid Corp.(1) | 19,933 | $ | 153,683 | |
SUPERVALU, Inc.(1) | 49,826 | 437,971 | ||
8,913,997 | ||||
Food Products — 2.7% | ||||
Archer-Daniels-Midland Co. | 12,478 | 609,925 | ||
Campbell Soup Co. | 5,974 | 267,098 | ||
ConAgra Foods, Inc. | 19,442 | 702,828 | ||
General Mills, Inc. | 27,848 | 1,541,108 | ||
Pinnacle Foods, Inc. | 22,592 | 916,106 | ||
Tyson Foods, Inc., Class A | 74,519 | 2,943,500 | ||
6,980,565 | ||||
Health Care Equipment and Supplies — 1.5% | ||||
Abbott Laboratories | 56,262 | 2,611,682 | ||
Boston Scientific Corp.(1) | 22,144 | 394,606 | ||
C.R. Bard, Inc. | 1,980 | 329,828 | ||
Intuitive Surgical, Inc.(1) | 304 | 150,778 | ||
Medtronic, plc | 6,001 | 446,775 | ||
ResMed, Inc. | 367 | 23,466 | ||
3,957,135 | ||||
Health Care Providers and Services — 2.6% | ||||
Aetna, Inc. | 11,045 | 1,180,379 | ||
AmerisourceBergen Corp. | 22,063 | 2,521,801 | ||
Cigna Corp. | 12,871 | 1,604,242 | ||
Express Scripts Holding Co.(1) | 15,763 | 1,361,923 | ||
6,668,345 | ||||
Hotels, Restaurants and Leisure — 0.6% | ||||
Brinker International, Inc. | 13,398 | 741,847 | ||
Cheesecake Factory, Inc. (The) | 2,939 | 147,332 | ||
Las Vegas Sands Corp. | 5,405 | 285,817 | ||
Wynn Resorts Ltd. | 2,498 | 277,453 | ||
Yum! Brands, Inc. | 1,020 | 87,679 | ||
1,540,128 | ||||
Household Products — 0.3% | ||||
Energizer Holdings, Inc. | 579 | 79,103 | ||
Kimberly-Clark Corp. | 7,308 | 801,614 | ||
880,717 | ||||
Independent Power and Renewable Electricity Producers — 0.2% | ||||
AES Corp. (The) | 27,738 | 367,529 | ||
NRG Energy, Inc. | 2,309 | 58,279 | ||
425,808 | ||||
Industrial Conglomerates — 1.1% | ||||
3M Co. | 15,769 | 2,466,114 | ||
General Electric Co. | 8,711 | 235,894 | ||
2,702,008 | ||||
Insurance — 4.0% | ||||
American International Group, Inc. | 87,072 | 4,901,283 | ||
MetLife, Inc. | 26,808 | 1,374,982 | ||
Principal Financial Group, Inc. | 1,378 | 70,443 | ||
Travelers Cos., Inc. (The) | 38,168 | 3,859,167 | ||
10,205,875 |
9
Shares | Value | |||
Internet and Catalog Retail — 0.6% | ||||
Expedia, Inc. | 14,242 | $ | 1,342,023 | |
Liberty Interactive Corp., Class A(1) | 8,947 | 257,316 | ||
1,599,339 | ||||
Internet Software and Services — 2.9% | ||||
eBay, Inc.(1) | 1,752 | 102,071 | ||
Facebook, Inc., Class A(1) | 47,445 | 3,737,243 | ||
Google, Inc., Class A(1) | 3,700 | 2,030,449 | ||
Google, Inc., Class C(1) | 1,534 | 824,387 | ||
IAC/InterActiveCorp | 2,782 | 194,239 | ||
VeriSign, Inc.(1) | 2,698 | 171,350 | ||
Yelp, Inc.(1) | 9,818 | 386,731 | ||
7,446,470 | ||||
IT Services — 2.9% | ||||
Alliance Data Systems Corp.(1) | 4,466 | 1,327,787 | ||
Computer Sciences Corp. | 5,176 | 333,593 | ||
MasterCard, Inc., Class A | 2,396 | 216,143 | ||
Visa, Inc., Class A | 75,789 | 5,005,863 | ||
Western Union Co. (The) | 28,115 | 570,172 | ||
Xerox Corp. | 10,549 | 121,314 | ||
7,574,872 | ||||
Life Sciences Tools and Services — 0.2% | ||||
Agilent Technologies, Inc. | 9,887 | 409,025 | ||
Machinery — 2.9% | ||||
Caterpillar, Inc. | 31,862 | 2,768,171 | ||
Cummins, Inc. | 24,505 | 3,388,061 | ||
Dover Corp. | 12,205 | 924,163 | ||
Flowserve Corp. | 3,230 | 189,052 | ||
Parker-Hannifin Corp. | 1,770 | 211,267 | ||
7,480,714 | ||||
Media — 4.2% | ||||
Comcast Corp., Class A | 93,763 | 5,415,751 | ||
DISH Network Corp., Class A(1) | 2,886 | 195,267 | ||
Time Warner Cable, Inc. | 1,520 | 236,390 | ||
Time Warner, Inc. | 15,071 | 1,272,143 | ||
Viacom, Inc., Class B | 33,059 | 2,295,948 | ||
Walt Disney Co. (The) | 13,529 | 1,470,873 | ||
10,886,372 | ||||
Multi-Utilities — 1.2% | ||||
Ameren Corp. | 22,854 | 935,643 | ||
CenterPoint Energy, Inc. | 5,623 | 117,914 | ||
DTE Energy Co. | 6,556 | 522,054 | ||
PG&E Corp. | 15,702 | 830,950 | ||
Public Service Enterprise Group, Inc. | 14,118 | 586,462 | ||
2,993,023 | ||||
Multiline Retail — 2.1% | ||||
Big Lots, Inc. | 10,418 | 474,748 | ||
Kohl's Corp. | 8,034 | 575,636 | ||
Macy's, Inc. | 23,261 | 1,503,358 | ||
Target Corp. | 35,585 | 2,805,166 | ||
5,358,908 |
10
Shares | Value | |||
Oil, Gas and Consumable Fuels — 6.1% | ||||
Apache Corp. | 3,653 | $ | 249,865 | |
Chesapeake Energy Corp. | 51,584 | 813,480 | ||
Chevron Corp. | 2,276 | 252,772 | ||
ConocoPhillips | 23,203 | 1,575,948 | ||
EOG Resources, Inc. | 6,823 | 675,136 | ||
Exxon Mobil Corp. | 86,447 | 7,552,874 | ||
HollyFrontier Corp. | 8,715 | 337,968 | ||
Murphy Oil Corp. | 5,888 | 280,328 | ||
Occidental Petroleum Corp. | 41,052 | 3,288,265 | ||
Valero Energy Corp. | 13,892 | 790,455 | ||
15,817,091 | ||||
Paper and Forest Products — 0.8% | ||||
International Paper Co. | 38,867 | 2,087,935 | ||
Pharmaceuticals — 6.9% | ||||
AbbVie, Inc. | 29,171 | 1,886,197 | ||
Eli Lilly & Co. | 16,044 | 1,153,082 | ||
Johnson & Johnson | 77,786 | 7,716,371 | ||
Mylan NV(1) | 11,260 | 813,648 | ||
Pfizer, Inc. | 186,728 | 6,335,681 | ||
17,904,979 | ||||
Professional Services — 0.1% | ||||
Equifax, Inc. | 3,004 | 291,178 | ||
Real Estate Investment Trusts (REITs) — 1.6% | ||||
Annaly Capital Management, Inc. | 20,988 | 211,349 | ||
AvalonBay Communities, Inc. | 1,316 | 216,271 | ||
CBL & Associates Properties, Inc. | 4,956 | 89,258 | ||
Digital Realty Trust, Inc. | 1,441 | 91,374 | ||
Host Hotels & Resorts, Inc. | 60,080 | 1,210,011 | ||
Iron Mountain, Inc. | 2,543 | 87,708 | ||
Macerich Co. (The) | 587 | 47,993 | ||
ProLogis, Inc. | 5,684 | 228,497 | ||
Public Storage | 7,944 | 1,492,757 | ||
Simon Property Group, Inc. | 953 | 172,960 | ||
Weyerhaeuser Co. | 4,517 | 142,331 | ||
3,990,509 | ||||
Road and Rail — 1.8% | ||||
Con-way, Inc. | 2,266 | 93,133 | ||
Ryder System, Inc. | 2,757 | 262,907 | ||
Union Pacific Corp. | 40,713 | 4,324,942 | ||
4,680,982 | ||||
Semiconductors and Semiconductor Equipment — 2.1% | ||||
Altera Corp. | 3,471 | 144,671 | ||
First Solar, Inc.(1) | 4,445 | 265,233 | ||
Intel Corp. | 5,373 | 174,891 | ||
KLA-Tencor Corp. | 15,803 | 929,216 | ||
Marvell Technology Group Ltd. | 30,872 | 432,517 | ||
Micron Technology, Inc.(1) | 36,938 | 1,039,066 | ||
NVIDIA Corp. | 27,250 | 604,814 | ||
Texas Instruments, Inc. | 32,582 | 1,766,270 |
11
Shares | Value | |||
Xilinx, Inc. | 3,791 | $ | 164,378 | |
5,521,056 | ||||
Software — 3.6% | ||||
CA, Inc. | 1,614 | 51,277 | ||
Citrix Systems, Inc.(1) | 776 | 52,116 | ||
Electronic Arts, Inc.(1) | 23,061 | 1,339,613 | ||
Microsoft Corp. | 64,729 | 3,148,418 | ||
MicroStrategy, Inc., Class A(1) | 589 | 107,269 | ||
Oracle Corp. | 56,672 | 2,472,033 | ||
Red Hat, Inc.(1) | 5,922 | 445,690 | ||
Symantec Corp. | 64,563 | 1,609,233 | ||
9,225,649 | ||||
Specialty Retail — 3.2% | ||||
Bed Bath & Beyond, Inc.(1) | 1,102 | 77,647 | ||
Best Buy Co., Inc. | 6,565 | 227,477 | ||
Gap, Inc. (The) | 36,015 | 1,427,635 | ||
Home Depot, Inc. (The) | 46,704 | 4,996,394 | ||
Lowe's Cos., Inc. | 6,246 | 430,100 | ||
Pier 1 Imports, Inc. | 3,464 | 43,820 | ||
Rent-A-Center, Inc. | 2,057 | 60,887 | ||
Ross Stores, Inc. | 931 | 92,057 | ||
TJX Cos., Inc. (The) | 14,988 | 967,325 | ||
8,323,342 | ||||
Technology Hardware, Storage and Peripherals — 5.8% | ||||
Apple, Inc. | 85,782 | 10,735,617 | ||
EMC Corp. | 29,152 | 784,480 | ||
Hewlett-Packard Co. | 95,171 | 3,137,788 | ||
NetApp, Inc. | 1,626 | 58,943 | ||
Western Digital Corp. | 2,342 | 228,907 | ||
14,945,735 | ||||
Textiles, Apparel and Luxury Goods — 0.4% | ||||
Coach, Inc. | 2,916 | 111,420 | ||
Ralph Lauren Corp. | 7,229 | 964,421 | ||
1,075,841 | ||||
Thrifts and Mortgage Finance† | ||||
Hudson City Bancorp, Inc. | 7,103 | 66,058 | ||
Tobacco — 0.8% | ||||
Lorillard, Inc. | 27,435 | 1,916,609 | ||
Trading Companies and Distributors† | ||||
W.W. Grainger, Inc. | 289 | 71,796 | ||
TOTAL COMMON STOCKS (Cost $186,708,636) | 255,187,411 | |||
EXCHANGE-TRADED FUNDS — 0.4% | ||||
SPDR S&P 500 ETF Trust (Cost $898,415) | 4,406 | 918,739 | ||
TEMPORARY CASH INVESTMENTS — 0.8% | ||||
Repurchase Agreement, Bank of America Merrill Lynch, (collateralized by various U.S. Treasury obligations, 1.375%, 4/30/20, valued at $343,470), in a joint trading account at 0.08%, dated 4/30/15, due 5/1/15 (Delivery value $337,501) | 337,500 |
12
Shares | Value | |||
Repurchase Agreement, Credit Suisse First Boston, Inc., (collateralized by various U.S. Treasury obligations, 1.50%, 12/31/18, valued at $824,508), in a joint trading account at 0.03%, dated 4/30/15, due 5/1/15 (Delivery value $810,001) | $ | 810,000 | ||
Repurchase Agreement, Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 3.625%, 2/15/44, valued at $969,650), at 0.01%, dated 4/30/15, due 5/1/15 (Delivery value $946,000) | 946,000 | |||
State Street Institutional Liquid Reserves Fund, Premier Class | 488 | 488 | ||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $2,093,988) | 2,093,988 | |||
TOTAL INVESTMENT SECURITIES — 100.1% (Cost $189,701,039) | 258,200,138 | |||
OTHER ASSETS AND LIABILITIES — (0.1)% | (220,894) | |||
TOTAL NET ASSETS — 100.0% | $ | 257,979,244 |
NOTES TO SCHEDULE OF INVESTMENTS |
† | Category is less than 0.05% of total net assets. |
(1) | Non-income producing. |
See Notes to Financial Statements.
13
Statement of Assets and Liabilities |
APRIL 30, 2015 (UNAUDITED) | |||
Assets | |||
Investment securities, at value (cost of $189,701,039) | $ | 258,200,138 | |
Foreign currency holdings, at value (cost of $36) | 36 | ||
Receivable for capital shares sold | 80,438 | ||
Dividends and interest receivable | 174,195 | ||
258,454,807 | |||
Liabilities | |||
Payable for capital shares redeemed | 219,167 | ||
Accrued management fees | 210,595 | ||
Distribution and service fees payable | 45,801 | ||
475,563 | |||
Net Assets | $ | 257,979,244 | |
Net Assets Consist of: | |||
Capital (par value and paid-in surplus) | $ | 229,750,174 | |
Undistributed net investment income | 593,177 | ||
Accumulated net realized loss | (40,863,206) | ||
Net unrealized appreciation | 68,499,099 | ||
$ | 257,979,244 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | ||
Investor Class, $0.01 Par Value | $93,786,643 | 4,297,510 | $21.82 | |
Institutional Class, $0.01 Par Value | $13,470,100 | 616,046 | $21.87 | |
A Class, $0.01 Par Value | $123,492,948 | 5,672,138 | $21.77* | |
B Class, $0.01 Par Value | $2,558,859 | 119,310 | $21.45 | |
C Class, $0.01 Par Value | $18,957,979 | 883,657 | $21.45 | |
R Class, $0.01 Par Value | $5,712,715 | 263,471 | $21.68 |
*Maximum offering price $23.10 (net asset value divided by 0.9425).
See Notes to Financial Statements.
14
Statement of Operations |
FOR THE SIX MONTHS ENDED APRIL 30, 2015 (UNAUDITED) | |||
Investment Income (Loss) | |||
Income: | |||
Dividends | $ | 2,786,221 | |
Interest | 382 | ||
2,786,603 | |||
Expenses: | |||
Management fees | 1,206,918 | ||
Distribution and service fees: | |||
A Class | 149,451 | ||
B Class | 14,001 | ||
C Class | 88,525 | ||
R Class | 13,616 | ||
Directors' fees and expenses | 4,419 | ||
Other expenses | 179 | ||
1,477,109 | |||
Net investment income (loss) | 1,309,494 | ||
Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on investment transactions | 11,322,456 | ||
Change in net unrealized appreciation (depreciation) on investments | (4,008,956) | ||
Net realized and unrealized gain (loss) | 7,313,500 | ||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 8,622,994 |
See Notes to Financial Statements.
15
Statement of Changes in Net Assets |
SIX MONTHS ENDED APRIL 30, 2015 (UNAUDITED) AND YEAR ENDED OCTOBER 31, 2014 | ||||||
Increase (Decrease) in Net Assets | April 30, 2015 | October 31, 2014 | ||||
Operations | ||||||
Net investment income (loss) | $ | 1,309,494 | $ | 2,240,486 | ||
Net realized gain (loss) | 11,322,456 | 41,107,598 | ||||
Change in net unrealized appreciation (depreciation) | (4,008,956 | ) | (7,784,637 | ) | ||
Net increase (decrease) in net assets resulting from operations | 8,622,994 | 35,563,447 | ||||
Distributions to Shareholders | ||||||
From net investment income: | ||||||
Investor Class | (983,981) | (884,103) | ||||
Institutional Class | (156,428) | (143,856) | ||||
A Class | (1,149,742) | (1,093,090) | ||||
B Class | (7,167) | (5,373) | ||||
C Class | (42,651) | (27,587) | ||||
R Class | (40,456) | (32,137) | ||||
Decrease in net assets from distributions | (2,380,425) | (2,186,146) | ||||
Capital Share Transactions | ||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | 22,448,221 | (27,318,260 | ) | |||
Net increase (decrease) in net assets | 28,690,790 | 6,059,041 | ||||
Net Assets | ||||||
Beginning of period | 229,288,454 | 223,229,413 | ||||
End of period | $ | 257,979,244 | $ | 229,288,454 | ||
Undistributed net investment income | $ | 593,177 | $ | 1,664,108 |
See Notes to Financial Statements.
16
Notes to Financial Statements |
APRIL 30, 2015 (UNAUDITED)
1. Organization
American Century Mutual Funds, Inc. (the corporation) is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company and is organized as a Maryland corporation. Fundamental Equity Fund (the fund) is one fund in a series issued by the corporation. The fund is diversified as defined under the 1940 Act. The fund’s investment objective is to seek long-term capital growth. Income is a secondary objective.
The fund offers the Investor Class, the Institutional Class, the A Class, the B Class, the C Class and the R Class. The A Class may incur an initial sales charge. The A Class, B Class and C Class may be subject to a contingent deferred sales charge. The share classes differ principally in their respective sales charges and distribution and shareholder servicing expenses and arrangements. The Institutional Class is made available to institutional shareholders or through financial intermediaries whose clients do not require the same level of shareholder and administrative services as shareholders of other classes. As a result, the Institutional Class is charged a lower unified management fee.
2. Significant Accounting Policies
The following is a summary of significant accounting policies consistently followed by the fund in preparation of its financial statements. The fund is an investment company and follows accounting and reporting guidance in accordance with accounting principles generally accepted in the United States of America. This may require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from these estimates. Management evaluated the impact of events or transactions occurring through the date the financial statements were issued that would merit recognition or disclosure.
Investment Valuations — The fund determines the fair value of its investments and computes its net asset value per share at 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. The Board of Directors has adopted valuation policies and procedures to guide the investment advisor in the fund’s investment valuation process and to provide methodologies for the oversight of the fund’s pricing function.
Equity securities that are listed or traded on a domestic securities exchange are valued at the last reported sales price or at the official closing price as provided by the exchange. Equity securities traded on foreign securities exchanges are generally valued at the closing price of such securities on the exchange where primarily traded or at the close of the NYSE, if that is earlier. If no last sales price is reported, or if local convention or regulation so provides, the mean of the latest bid and asked prices may be used. Securities traded over-the-counter are valued at the mean of the latest bid and asked prices, the last sales price, or the official closing price.
Fixed income securities maturing within 60 days at the time of purchase may be valued at cost, plus or minus any amortized discount or premium or at the evaluated mean as provided by an independent pricing service. Evaluated mean prices are commonly derived through utilization of market models, which may consider, among other factors: trade data, quotations from 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.
Open-end management investment companies are valued at the reported net asset value per share. Repurchase agreements are valued at cost, which approximates fair value.
If the fund determines that the market price for an investment is not readily available or the valuation methods mentioned above do not reflect an investment’s fair value, such investment is valued as determined in good faith by the Board of Directors or its delegate, in accordance with policies and procedures adopted by the Board of Directors. In its determination of fair value, the fund may review several factors including, but not limited to, market information regarding the specific investment or comparable investments and correlation with other investment types, futures indices or general market indicators. Circumstances that may cause the fund to use these procedures to value an investment include, but are not limited to: an investment has been declared in default or is distressed; trading in a security has been suspended during the trading day or a
17
security is not actively trading on its principal exchange; prices received from a regular pricing source are deemed unreliable; or there is a foreign market holiday and no trading occurred.
The fund monitors for significant events occurring after the close of an investment’s primary exchange but before the fund’s net asset value per share is determined. Significant events may include, but are not limited to: corporate announcements and transactions; governmental action and political unrest that could impact a specific investment or an investment sector; or armed conflicts, natural disasters and similar events that could affect investments in a specific country or region. The fund also monitors for significant fluctuations between domestic and foreign markets, as evidenced by the U.S. market or such other indicators that the Board of Directors, or its delegate, deems appropriate. If significant fluctuations in foreign markets are identified, the fund may apply a model-derived factor to the closing price of equity securities traded on foreign securities exchanges. The factor is based on observable market data as provided by an independent pricing service.
Security Transactions — Security transactions are accounted for as of the trade date. Net realized gains and losses are determined on the identified cost basis, which is also used for federal income tax purposes.
Investment Income — Dividend income less foreign taxes withheld, if any, is recorded as of the ex-dividend date. Distributions received on securities that represent a return of capital or long-term capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The fund may estimate the components of distributions received that may be considered nontaxable distributions or long-term capital gain distributions for income tax purposes. Interest income is recorded on the accrual basis and includes accretion of discounts and amortization of premiums.
Repurchase Agreements — The fund may enter into repurchase agreements with institutions that American Century Investment Management, Inc. (ACIM) (the investment advisor) has determined are creditworthy pursuant to criteria adopted by the Board of Directors. The fund requires that the collateral, represented by securities, received in a repurchase transaction be transferred to the custodian in a manner sufficient to enable the fund to obtain those securities in the event of a default under the repurchase agreement. ACIM monitors, on a daily basis, the securities transferred to ensure the value, including accrued interest, of the securities under each repurchase agreement is equal to or greater than amounts owed to the fund under each repurchase agreement.
Joint Trading Account — Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the fund, along with certain other funds in the American Century Investments family of funds, may transfer uninvested cash balances into a joint trading account. These balances are invested in one or more repurchase agreements that are collateralized by U.S. Treasury or Agency obligations.
Income Tax Status — It is the fund’s policy to distribute substantially all net investment income and net realized gains to shareholders and to otherwise qualify as a regulated investment company under provisions of the Internal Revenue Code. Accordingly, no provision has been made for income taxes. The fund files U.S. federal, state, local and non-U.S. tax returns as applicable. The fund's tax returns are subject to examination by the relevant taxing authority until expiration of the applicable statute of limitations, which is generally three years from the date of filing but can be longer in certain jurisdictions. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination and for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Multiple Class — All shares of the fund represent an equal pro rata interest in the net assets of the class to which such shares belong, and have identical voting, dividend, liquidation and other rights and the same terms and conditions, except for class specific expenses and exclusive rights to vote on matters affecting only individual classes. Income, non-class specific expenses, and realized and unrealized capital gains and losses of the fund are allocated to each class of shares based on their relative net assets.
Distributions to Shareholders — Distributions from net investment income and net realized gains, if any, are generally declared and paid annually.
Indemnifications — Under the corporation’s organizational documents, its officers and directors are indemnified against certain liabilities arising out of the performance of their duties to the fund. In addition, in the normal course of business, the fund enters into contracts that provide general indemnifications. The maximum exposure under these arrangements is unknown as this would involve future claims that may be made against a fund. The risk of material loss from such claims is considered by management to be remote.
18
3. Fees and Transactions with Related Parties
Certain officers and directors of the corporation are also officers and/or directors of American Century Companies, Inc. (ACC). The corporation’s investment advisor, ACIM, the corporation's distributor, American Century Investment Services, Inc. (ACIS), and the corporation’s transfer agent, American Century Services, LLC, are wholly owned, directly or indirectly, by ACC.
Management Fees — The corporation has entered into a management agreement with ACIM, under which ACIM provides the fund with investment advisory and management services in exchange for a single, unified management fee (the fee) per class. The agreement provides that all expenses of managing and operating the fund, except distribution and service fees, brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), and extraordinary expenses, will be paid by ACIM. The fee is computed and accrued daily based on each class’s daily net assets and paid monthly in arrears. The rate of the fee is determined by applying a fee rate calculation formula. This formula takes into account the fund’s assets as well as certain assets, if any, of other clients of the investment advisor outside the American Century Investments family of funds (such as subadvised funds and separate accounts) that have very similar investment teams and investment strategies (strategy assets). The annual management fee schedule ranges from 0.800% to 0.990% for the Investor Class, A Class, B Class, C Class and R Class. The annual management fee schedule ranges from 0.600% to 0.790% for the Institutional Class. The effective annual management fee for each class for the six months ended April 30, 2015 was 0.99% for the Investor Class, A Class, B Class, C Class and R Class and 0.79% for the Institutional Class.
Distribution and Service Fees — The Board of Directors has adopted a separate Master Distribution and Individual Shareholder Services Plan for each of the A Class, B Class, C Class and R Class (collectively the plans), pursuant to Rule 12b-1 of the 1940 Act. The plans provide that the A Class will pay ACIS an annual distribution and service fee of 0.25%. The plans provide that the B Class and C Class will each pay ACIS an annual distribution and service fee of 1.00%, of which 0.25% is paid for individual shareholder services and 0.75% is paid for distribution services. The plans provide that the R Class will pay ACIS an annual distribution and service fee of 0.50%. The fees are computed and accrued daily based on each class’s daily net assets and paid monthly in arrears. The fees are used to pay financial intermediaries for distribution and individual shareholder services. Fees incurred under the plans during the six months ended April 30, 2015 are detailed in the Statement of Operations.
Directors' Fees and Expenses — The Board of Directors is responsible for overseeing the investment advisor’s management and operations of the fund. The directors receive detailed information about the fund and its investment advisor regularly throughout the year, and meet at least quarterly with management of the investment advisor to review reports about fund operations. The fund’s officers do not receive compensation from the fund.
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the six months ended April 30, 2015 were $66,151,568 and $44,690,542, respectively.
19
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended April 30, 2015 | Year ended October 31, 2014 | |||||||||
Shares | Amount | Shares | Amount | |||||||
Investor Class/Shares Authorized | 200,000,000 | 200,000,000 | ||||||||
Sold | 1,497,953 | $ | 32,356,910 | 1,240,505 | $ | 24,046,130 | ||||
Issued in reinvestment of distributions | 44,610 | 925,208 | 45,454 | 843,629 | ||||||
Redeemed | (859,898 | ) | (18,738,168 | ) | (1,386,474 | ) | (27,284,419 | ) | ||
682,665 | 14,543,950 | (100,515 | ) | (2,394,660 | ) | |||||
Institutional Class/Shares Authorized | 25,000,000 | 25,000,000 | ||||||||
Sold | 154,649 | 3,349,846 | 50,921 | 1,012,141 | ||||||
Issued in reinvestment of distributions | 7,535 | 156,428 | 7,739 | 143,856 | ||||||
Redeemed | (48,329 | ) | (1,066,382 | ) | (122,317 | ) | (2,428,789 | ) | ||
113,855 | 2,439,892 | (63,657 | ) | (1,272,792 | ) | |||||
A Class/Shares Authorized | 150,000,000 | 150,000,000 | ||||||||
Sold | 615,231 | 13,410,349 | 562,114 | 10,904,874 | ||||||
Issued in reinvestment of distributions | 52,390 | 1,085,009 | 54,286 | 1,006,471 | ||||||
Redeemed | (481,714 | ) | (10,458,270 | ) | (1,635,326 | ) | (32,004,656 | ) | ||
185,907 | 4,037,088 | (1,018,926 | ) | (20,093,311 | ) | |||||
B Class/Shares Authorized | 25,000,000 | 25,000,000 | ||||||||
Sold | 4,755 | 101,295 | 7,348 | 141,987 | ||||||
Issued in reinvestment of distributions | 312 | 6,391 | 269 | 4,937 | ||||||
Redeemed | (30,250 | ) | (647,308 | ) | (47,860 | ) | (919,712 | ) | ||
(25,183 | ) | (539,622 | ) | (40,243 | ) | (772,788 | ) | |||
C Class/Shares Authorized | 50,000,000 | 50,000,000 | ||||||||
Sold | 122,458 | 2,632,460 | 67,666 | 1,293,651 | ||||||
Issued in reinvestment of distributions | 1,564 | 31,997 | 1,079 | 19,765 | ||||||
Redeemed | (45,522 | ) | (972,769 | ) | (189,694 | ) | (3,655,169 | ) | ||
78,500 | 1,691,688 | (120,949 | ) | (2,341,753 | ) | |||||
R Class/Shares Authorized | 10,000,000 | 10,000,000 | ||||||||
Sold | 31,568 | 680,192 | 40,435 | 792,329 | ||||||
Issued in reinvestment of distributions | 1,960 | 40,456 | 1,739 | 32,137 | ||||||
Redeemed | (20,788 | ) | (445,423 | ) | (65,414 | ) | (1,267,422 | ) | ||
12,740 | 275,225 | (23,240 | ) | (442,956 | ) | |||||
Net increase (decrease) | 1,048,484 | $ | 22,448,221 | (1,367,530 | ) | $ | (27,318,260 | ) |
20
6. Fair Value Measurements
The fund’s investments valuation process is based on several considerations and may use multiple inputs to determine the fair value of the investments held by the fund. In conformity with accounting principles generally accepted in the United States of America, the inputs used to determine a valuation are classified into three broad levels.
• | Level 1 valuation inputs consist of unadjusted quoted prices in an active market for identical investments. |
• | Level 2 valuation inputs consist of direct or indirect observable market data (including quoted prices for comparable investments, evaluations of subsequent market events, interest rates, prepayment speeds, credit risk, etc.). These inputs also consist of quoted prices for identical investments initially expressed in local currencies that are adjusted through translation into U.S. dollars. |
• | Level 3 valuation inputs consist of unobservable data (including a fund’s own assumptions). |
The level classification is based on the lowest level input that is significant to the fair valuation measurement. The valuation inputs are not necessarily an indication of the risks associated with investing in these securities or other financial instruments. There were no significant transfers between levels during the period.
The following is a summary of the level classifications as of period end. The Schedule of Investments provides additional information on the fund’s portfolio holdings.
Level 1 | Level 2 | Level 3 | ||||||
Assets | ||||||||
Investment Securities | ||||||||
Common Stocks | $ | 255,187,411 | — | — | ||||
Exchange-Traded Funds | 918,739 | — | — | |||||
Temporary Cash Investments | 488 | $ | 2,093,500 | — | ||||
$ | 256,106,638 | $ | 2,093,500 | — |
7. Federal Tax Information
The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
As of April 30, 2015, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $ | 191,898,406 | |
Gross tax appreciation of investments | $ | 68,624,619 | |
Gross tax depreciation of investments | (2,322,887 | ) | |
Net tax appreciation (depreciation) of investments | $ | 66,301,732 |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales.
As of October 31, 2014, the fund had accumulated short-term capital losses of $(49,763,770), which represent net capital loss carryovers that may be used to offset future realized capital gains for federal income tax purposes. Future capital loss carryover utilization in any given year may be subject to Internal Revenue Code limitations. Capital loss carryovers expire in 2017.
21
Financial Highlights |
For a Share Outstanding Throughout the Years Ended October 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 | 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 | |||||||||||||
2015(3) | $21.31 | 0.14 | 0.63 | 0.77 | (0.26) | $21.82 | 3.75% | 0.99%(4) | 1.27%(4) | 18% | $93,787 | ||
2014 | $18.41 | 0.24 | 2.88 | 3.12 | (0.22) | $21.31 | 17.06% | 1.00% | 1.19% | 41% | $77,015 | ||
2013 | $14.82 | 0.23 | 3.55 | 3.78 | (0.19) | $18.41 | 25.83% | 1.01% | 1.44% | 36% | $68,416 | ||
2012 | $12.97 | 0.20 | 1.81 | 2.01 | (0.16) | $14.82 | 15.65% | 1.01% | 1.39% | 18% | $38,250 | ||
2011 | $11.95 | 0.14 | 1.02 | 1.16 | (0.14) | $12.97 | 9.72% | 1.01% | 1.11% | 18% | $45,991 | ||
2010 | $10.57 | 0.12 | 1.40 | 1.52 | (0.14) | $11.95 | 14.47% | 1.02% | 1.06% | 29% | $41,698 | ||
Institutional Class | |||||||||||||
2015(3) | $21.37 | 0.16 | 0.65 | 0.81 | (0.31) | $21.87 | 3.85% | 0.79%(4) | 1.47%(4) | 18% | $13,470 | ||
2014 | $18.47 | 0.28 | 2.88 | 3.16 | (0.26) | $21.37 | 17.29% | 0.80% | 1.39% | 41% | $10,731 | ||
2013 | $14.85 | 0.27 | 3.55 | 3.82 | (0.20) | $18.47 | 26.06% | 0.81% | 1.64% | 36% | $10,451 | ||
2012 | $12.99 | 0.21 | 1.83 | 2.04 | (0.18) | $14.85 | 15.93% | 0.81% | 1.59% | 18% | $9,225 | ||
2011 | $11.96 | 0.17 | 1.02 | 1.19 | (0.16) | $12.99 | 10.02% | 0.81% | 1.31% | 18% | $103 | ||
2010 | $10.59 | 0.15 | 1.38 | 1.53 | (0.16) | $11.96 | 14.57% | 0.82% | 1.26% | 29% | $120 |
22
For a Share Outstanding Throughout the Years Ended October 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 | 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) | |||
A Class | |||||||||||||
2015(3) | $21.23 | 0.11 | 0.64 | 0.75 | (0.21) | $21.77 | 3.59% | 1.24%(4) | 1.02%(4) | 18% | $123,493 | ||
2014 | $18.35 | 0.19 | 2.86 | 3.05 | (0.17) | $21.23 | 16.76% | 1.25% | 0.94% | 41% | $116,462 | ||
2013 | $14.80 | 0.20 | 3.53 | 3.73 | (0.18) | $18.35 | 25.51% | 1.26% | 1.19% | 36% | $119,358 | ||
2012 | $12.94 | 0.16 | 1.82 | 1.98 | (0.12) | $14.80 | 15.48% | 1.26% | 1.14% | 18% | $105,718 | ||
2011 | $11.93 | 0.11 | 1.01 | 1.12 | (0.11) | $12.94 | 9.38% | 1.26% | 0.86% | 18% | $106,159 | ||
2010 | $10.56 | 0.09 | 1.39 | 1.48 | (0.11) | $11.93 | 14.10% | 1.27% | 0.81% | 29% | $129,960 | ||
B Class | |||||||||||||
2015(3) | $20.83 | 0.03 | 0.64 | 0.67 | (0.05) | $21.45 | 3.24% | 1.99%(4) | 0.27%(4) | 18% | $2,559 | ||
2014 | $18.00 | 0.04 | 2.82 | 2.86 | (0.03) | $20.83 | 15.91% | 2.00% | 0.19% | 41% | $3,010 | ||
2013 | $14.60 | 0.08 | 3.47 | 3.55 | (0.15) | $18.00 | 24.56% | 2.01% | 0.44% | 36% | $3,326 | ||
2012 | $12.77 | 0.06 | 1.80 | 1.86 | (0.03) | $14.60 | 14.60% | 2.01% | 0.39% | 18% | $3,165 | ||
2011 | $11.77 | 0.01 | 1.00 | 1.01 | (0.01) | $12.77 | 8.59% | 2.01% | 0.11% | 18% | $3,133 | ||
2010 | $10.42 | 0.01 | 1.37 | 1.38 | (0.03) | $11.77 | 13.23% | 2.02% | 0.06% | 29% | $3,838 | ||
C Class | |||||||||||||
2015(3) | $20.84 | 0.03 | 0.63 | 0.66 | (0.05) | $21.45 | 3.19% | 1.99%(4) | 0.27%(4) | 18% | $18,958 | ||
2014 | $18.01 | 0.04 | 2.82 | 2.86 | (0.03) | $20.84 | 15.90% | 2.00% | 0.19% | 41% | $16,777 | ||
2013 | $14.61 | 0.07 | 3.48 | 3.55 | (0.15) | $18.01 | 24.54% | 2.01% | 0.44% | 36% | $16,679 | ||
2012 | $12.78 | 0.05 | 1.81 | 1.86 | (0.03) | $14.61 | 14.59% | 2.01% | 0.39% | 18% | $14,967 | ||
2011 | $11.77 | 0.01 | 1.01 | 1.02 | (0.01) | $12.78 | 8.68% | 2.01% | 0.11% | 18% | $13,990 | ||
2010 | $10.42 | 0.01 | 1.37 | 1.38 | (0.03) | $11.77 | 13.23% | 2.02% | 0.06% | 29% | $14,816 |
23
For a Share Outstanding Throughout the Years Ended October 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 | 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) | |||
R Class | |||||||||||||
2015(3) | $21.11 | 0.08 | 0.65 | 0.73 | (0.16) | $21.68 | 3.49% | 1.49%(4) | 0.77%(4) | 18% | $5,713 | ||
2014 | $18.25 | 0.14 | 2.84 | 2.98 | (0.12) | $21.11 | 16.45% | 1.50% | 0.69% | 41% | $5,294 | ||
2013 | $14.74 | 0.15 | 3.53 | 3.68 | (0.17) | $18.25 | 25.25% | 1.51% | 0.94% | 36% | $5,000 | ||
2012 | $12.90 | 0.13 | 1.80 | 1.93 | (0.09) | $14.74 | 15.09% | 1.51% | 0.89% | 18% | $2,817 | ||
2011 | $11.89 | 0.08 | 1.00 | 1.08 | (0.07) | $12.90 | 9.14% | 1.51% | 0.61% | 18% | $2,456 | ||
2010 | $10.52 | 0.06 | 1.39 | 1.45 | (0.08) | $11.89 | 13.86% | 1.52% | 0.56% | 29% | $2,624 |
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 and do not reflect applicable sales charges, if any. Total returns for periods less than one year are not annualized. |
(3) | Six months ended April 30, 2015 (unaudited). |
(4) | Annualized. |
See Notes to Financial Statements.
24
Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain IRAs are subject to federal income tax withholding, unless you elect not to have withholding apply. Tax will be withheld on the total amount withdrawn even though you may be receiving amounts that are not subject to withholding, such as nondeductible contributions. In such case, excess amounts of withholding could occur. You may adjust your withholding election so that a greater or lesser amount will be withheld.
If you don’t want us to withhold on this amount, you must notify us to not withhold the federal income tax. You may notify us in writing or in certain situations by telephone or through other electronic means. For systematic withdrawals, your withholding election will remain in effect until revoked or changed by filing a new election. You have the right to revoke your election at any time.
Remember, even if you elect not to have income tax withheld, you are liable for paying income tax on the taxable portion of your withdrawal. If you elect not to have income tax withheld or you don’t have enough income tax withheld, you may be responsible for payment of estimated tax. You may incur penalties under the estimated tax rules if your withholding and estimated tax payments are not sufficient. You can reduce or defer the income tax on a distribution by directly or indirectly rolling such distribution over to another IRA or eligible plan. You should consult your tax advisor for additional information.
State tax will be withheld if, at the time of your distribution, your address is within one of the mandatory withholding states and you have federal income tax withheld (or as otherwise required by state law). State taxes will be withheld from your distribution in accordance with the respective state rules.
Distributions you receive from 403(b), 457 and qualified plans are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
A description of the policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund is available without charge, upon request, by calling 1-800-345-2021. It is also available on the "About Us" page of American Century Investments’ website at americancentury.com and on the Securities and Exchange Commission’s website at sec.gov. Information regarding how the investment advisor voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the "About Us" page at americancentury.com. It is also available at sec.gov.
Quarterly Portfolio Disclosure
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-Q. The fund’s Forms N-Q are available on the SEC’s website at sec.gov, and may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The fund also makes its complete schedule of portfolio holdings for the most recent quarter of its fiscal year available on its
website at americancentury.com and, upon request, by calling 1-800-345-2021.
25
Notes |
26
Notes |
27
Notes |
28
![]() | ||
Contact Us | americancentury.com | |
Automated Information Line | 1-800-345-8765 | |
Investor Services Representative | 1-800-345-2021 or 816-531-5575 | |
Investors Using Advisors | 1-800-378-9878 | |
Business, Not-For-Profit, Employer-Sponsored Retirement Plans | 1-800-345-3533 | |
Banks and Trust Companies, Broker-Dealers, Financial Professionals, Insurance Companies | 1-800-345-6488 | |
Telecommunications Relay Service for the Deaf | 711 | |
American Century Mutual Funds, Inc. | ||
Investment Advisor: American Century Investment Management, Inc. Kansas City, Missouri | ||
This report and the statements it contains are submitted for the general information of our shareholders. The report is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus. | ||
©2015 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-85684 1506 |
SEMIANNUAL REPORT | APRIL 30, 2015 |
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Growth Fund
Table of Contents |
Any opinions expressed in this report reflect those of the author as of the date of the report, and do not necessarily represent the opinions of American Century Investments® or any other person in the American Century Investments organization. Any such opinions are subject to change at any time based upon market or other conditions and American Century Investments disclaims any responsibility to update such opinions. These opinions may not be relied upon as investment advice and, because investment decisions made by American Century Investments funds are based on numerous factors, may not be relied upon as an indication of trading intent on behalf of any American Century Investments fund. Security examples are used for representational purposes only and are not intended as recommendations to purchase or sell securities. Performance information for comparative indices and securities is provided to American Century Investments by third party vendors. To the best of American Century Investments’ knowledge, such information is accurate at the time of printing.
President’s Letter |
![]() | Dear Investor: Thank you for reviewing this semiannual report for the six months ended April 30, 2015. It provides a macroeconomic and financial market overview (below), followed by fund performance, a schedule of fund investments, and other financial information. For additional commentary and updated information on fund performance, key factors that affected asset returns, and other insights regarding the investment markets, we encourage you to visit our website, americancentury.com. |
Jonathan Thomas |
Global Divergence in Monetary Policies Influenced Investor Behavior
The six-month reporting period saw big swings in market returns, triggered in part by central bank moves. In October 2014, just before the period started, the U.S. Federal Reserve ended its latest bond-buying program (quantitative easing, QE). As QE wound down, the U.S. economy enjoyed 5% annualized growth (after inflation) in the third quarter of 2014, the highest rate since the third quarter of 2003. But while QE was ending in the U.S., other major central banks were starting or increasing QE as their economies faltered. A “global divergence” of economic growth and monetary policies opened between the U.S. and most of the rest of the developed world.
This divergence helped fuel increased demand for the U.S. dollar and U.S. dollar-denominated assets, and put downward pressure on commodities prices, most notably oil. Though the resulting dollar rally and oil price decline reversed somewhat in April 2015, the dollar remained 9% higher for the reporting period, as measured by the U.S. Dollar Index, while oil remained more than 25% lower, as measured by both Brent and West Texas Intermediate crude oil futures. In this environment, U.S. stocks and bonds posted moderate gains—the S&P 500 Index and the Barclays U.S. Aggregate Bond Index returned 4.40% and 2.06%, respectively.
We expect monetary policy divergence between the U.S. and other major developed economies to continue this year, accompanied by market volatility. This could present both challenges and opportunities for active investment managers. Upward pressures on inflation and interest rates could develop as the massive amount of global monetary stimulus in progress takes hold and economies improve. But we believe lingering constraining forces will likely keep inflation and interest rates relatively low for the next six months. In this environment, we continue to believe in a disciplined, diversified, long-term investment approach, using professionally managed stock and bond portfolios to meet financial goals. We appreciate your continued trust in us.
Sincerely,
![](https://capedge.com/proxy/N-CSRS/0000100334-15-000051/jonathanthomassig.jpg)
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
2
Performance |
Total Returns as of April 30, 2015 | |||||||
Average Annual Returns | |||||||
Ticker Symbol | 6 months(1) | 1 year | 5 years | 10 years | Since Inception | Inception Date | |
Investor Class | TWCGX | 5.18% | 13.07% | 12.92% | 8.89% | 13.46% | 6/30/71(2) |
Russell 1000 Growth Index | — | 6.54% | 16.67% | 15.48% | 9.62% | N/A(3) | — |
Institutional Class | TWGIX | 5.32% | 13.29% | 13.15% | 9.10% | 6.84% | 6/16/97 |
A Class(4) | TCRAX | 6/4/97 | |||||
No sales charge* | 5.05% | 12.77% | 12.64% | 8.62% | 6.67% | ||
With sales charge* | -0.98% | 6.28% | 11.32% | 7.98% | 6.31% | ||
C Class | TWRCX | 3/1/10 | |||||
No sales charge* | 4.68% | 11.95% | 11.81% | — | 12.70% | ||
With sales charge* | 3.86% | 11.95% | 11.81% | — | 12.70% | ||
R Class | AGWRX | 4.95% | 12.53% | 12.36% | 8.35% | 8.14% | 8/29/03 |
R6 Class | AGRDX | 5.40% | 13.48% | — | — | 15.65% | 7/26/13 |
* | Sales charges include initial sales charges and contingent deferred sales charges (CDSCs), as applicable. A Class shares have a 5.75% maximum initial sales charge and may be subject to a maximum CDSC of 1.00%. C Class shares redeemed within 12 months of purchase are subject to a maximum CDSC of 1.00%. The SEC requires that mutual funds provide performance information net of maximum sales charges in all cases where charges could be applied. |
(1) | Total returns for periods less than one year are not annualized. |
(2) | Although the fund’s actual inception date was October 31, 1958, this inception date corresponds with the investment advisor’s implementation of its current investment philosophy and practices. |
(3) | Benchmark data first available December 1978. |
(4) | Prior to March 1, 2010, the A Class was referred to as the Advisor Class and did not have a front-end sales charge. Performance prior to that date has been adjusted to reflect this charge. |
Total Annual Fund Operating Expenses | |||||
Investor Class | Institutional Class | A Class | C Class | R Class | R6 Class |
0.97% | 0.77% | 1.22% | 1.97% | 1.47% | 0.62% |
The total annual fund operating expenses shown is as stated in the fund’s prospectus current as of the date of this report. The prospectus may vary from the expense ratio shown elsewhere in this report because it is based on a different time period, includes acquired fund fees and expenses, and, if applicable, does not include fee waivers or expense reimbursements.
Data presented reflect past performance. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance shown. Investment return and principal value will fluctuate, and redemption value may be more or less than original cost. Data assumes reinvestment of dividends and capital gains, and none of the charts reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. To obtain performance data current to the most recent month end, please call 1-800-345-2021 or visit americancentury.com. For additional information about the fund, please consult the prospectus.
3
Fund Characteristics |
APRIL 30, 2015 | |
Top Ten Holdings | % of net assets |
Apple, Inc. | 6.3% |
Visa, Inc., Class A | 4.1% |
Comcast Corp., Class A | 2.8% |
PepsiCo, Inc. | 2.8% |
Facebook, Inc., Class A | 2.6% |
Exxon Mobil Corp. | 2.4% |
Walt Disney Co. (The) | 2.2% |
Boeing Co. (The) | 2.1% |
Lockheed Martin Corp. | 2.0% |
Expedia, Inc. | 2.0% |
Top Five Industries | % of net assets |
IT Services | 7.6% |
Technology Hardware, Storage and Peripherals | 6.7% |
Software | 6.7% |
Biotechnology | 6.1% |
Specialty Retail | 6.0% |
Types of Investments in Portfolio | % of net assets |
Common Stocks | 99.7% |
Temporary Cash Investments | 0.5% |
Other Assets and Liabilities | (0.2)% |
4
Shareholder Fee Example |
Fund shareholders may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption/exchange fees; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in your fund and to compare these costs with the ongoing cost of investing in other mutual funds.
The example is based on an investment of $1,000 made at the beginning of the period and held for the entire period from November 1, 2014 to April 30, 2015.
Actual Expenses
The table provides information about actual account values and actual expenses for each class. You may use the information, together with the amount you invested, to estimate the expenses that you paid over the period. First, identify the share class you own. Then simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
If you hold Investor Class shares of any American Century Investments fund, or Institutional Class shares of the American Century Diversified Bond Fund, in an American Century Investments account (i.e., not a financial intermediary or retirement plan account), American Century Investments may charge you a $12.50 semiannual account maintenance fee if the value of those shares is less than $10,000. We will redeem shares automatically in one of your accounts to pay the $12.50 fee. 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. Personal accounts include individual accounts, joint accounts, UGMA/UTMA accounts, personal trusts, Coverdell Education Savings Accounts and 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. If you are subject to the Account Maintenance Fee, your account value could be reduced by the fee amount.
Hypothetical Example for Comparison Purposes
The table also provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio of each class of your fund and an assumed rate of return of 5% per year before expenses, which is not the actual return of a fund’s share class. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) or redemption/exchange fees. Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
5
Beginning Account Value 11/1/14 | Ending Account Value 4/30/15 | Expenses Paid During Period(1) 11/1/14 - 4/30/15 | Annualized Expense Ratio(1) | |
Actual | ||||
Investor Class | $1,000 | $1,051.80 | $4.93 | 0.97% |
Institutional Class | $1,000 | $1,053.20 | $3.92 | 0.77% |
A Class | $1,000 | $1,050.50 | $6.20 | 1.22% |
C Class | $1,000 | $1,046.80 | $10.00 | 1.97% |
R Class | $1,000 | $1,049.50 | $7.47 | 1.47% |
R6 Class | $1,000 | $1,054.00 | $3.16 | 0.62% |
Hypothetical | ||||
Investor Class | $1,000 | $1,019.98 | $4.86 | 0.97% |
Institutional Class | $1,000 | $1,020.98 | $3.86 | 0.77% |
A Class | $1,000 | $1,018.75 | $6.11 | 1.22% |
C Class | $1,000 | $1,015.03 | $9.84 | 1.97% |
R Class | $1,000 | $1,017.51 | $7.35 | 1.47% |
R6 Class | $1,000 | $1,021.72 | $3.11 | 0.62% |
(1) | Expenses are equal to the class's annualized expense ratio listed in the table above, multiplied by the average account value over the period, multiplied by 181, the number of days in the most recent fiscal half-year, divided by 365, to reflect the one-half year period. |
6
Schedule of Investments |
APRIL 30, 2015 (UNAUDITED)
Shares | Value | ||||
COMMON STOCKS — 99.7% | |||||
Aerospace and Defense — 4.8% | |||||
Boeing Co. (The) | 1,314,431 | $ | 188,410,540 | ||
Lockheed Martin Corp. | 964,647 | 180,003,130 | |||
Raytheon Co. | 540,091 | 56,169,464 | |||
424,583,134 | |||||
Airlines — 0.6% | |||||
Alaska Air Group, Inc. | 798,315 | 51,140,059 | |||
Automobiles — 0.5% | |||||
Harley-Davidson, Inc. | 746,954 | 41,986,284 | |||
Beverages — 2.8% | |||||
PepsiCo, Inc. | 2,551,412 | 242,690,309 | |||
Biotechnology — 6.1% | |||||
Alexion Pharmaceuticals, Inc.(1) | 833,322 | 141,023,082 | |||
Biogen Idec, Inc.(1) | 380,495 | 142,278,496 | |||
Gilead Sciences, Inc.(1) | 1,597,539 | 160,568,645 | |||
Incyte Corp.(1) | 416,594 | 40,476,273 | |||
Regeneron Pharmaceuticals, Inc.(1) | 121,755 | 55,698,042 | |||
540,044,538 | |||||
Capital Markets — 1.0% | |||||
Franklin Resources, Inc. | 1,751,473 | 90,305,948 | |||
Chemicals — 2.8% | |||||
Dow Chemical Co. (The) | 1,764,812 | 90,005,412 | |||
PPG Industries, Inc. | 284,308 | 62,991,280 | |||
Sherwin-Williams Co. (The) | 325,829 | 90,580,462 | |||
243,577,154 | |||||
Communications Equipment — 2.5% | |||||
Cisco Systems, Inc. | 2,267,038 | 65,358,706 | |||
QUALCOMM, Inc. | 2,217,728 | 150,805,504 | |||
216,164,210 | |||||
Electrical Equipment — 0.5% | |||||
Generac Holdings, Inc.(1) | 1,110,707 | 46,305,375 | |||
Energy Equipment and Services — 1.2% | |||||
Halliburton Co. | 1,771,990 | 86,738,911 | |||
National Oilwell Varco, Inc. | 369,440 | 20,101,230 | |||
106,840,141 | |||||
Food and Staples Retailing — 0.6% | |||||
Kroger Co. (The) | 809,273 | 55,767,002 | |||
Food Products — 1.9% | |||||
ConAgra Foods, Inc. | 1,446,791 | 52,301,495 | |||
Mead Johnson Nutrition Co. | 1,244,039 | 119,328,221 | |||
171,629,716 |
7
Shares | Value | ||||
Health Care Equipment and Supplies — 2.5% | |||||
C.R. Bard, Inc. | 329,891 | $ | 54,953,243 | ||
DENTSPLY International, Inc. | 1,464,214 | 74,674,914 | |||
Intuitive Surgical, Inc.(1) | 179,460 | 89,008,571 | |||
218,636,728 | |||||
Health Care Providers and Services — 2.2% | |||||
Cardinal Health, Inc. | 731,577 | 61,701,204 | |||
Express Scripts Holding Co.(1) | 1,529,568 | 132,154,675 | |||
193,855,879 | |||||
Health Care Technology — 0.7% | |||||
Cerner Corp.(1) | 864,919 | 62,109,833 | |||
Hotels, Restaurants and Leisure — 2.7% | |||||
Chipotle Mexican Grill, Inc.(1) | 98,781 | 61,376,586 | |||
Las Vegas Sands Corp. | 1,089,367 | 57,605,727 | |||
Marriott International, Inc., Class A | 964,094 | 77,175,725 | |||
MGM Resorts International(1) | 1,935,932 | 40,944,962 | |||
237,103,000 | |||||
Household Products — 0.6% | |||||
Church & Dwight Co., Inc. | 693,656 | 56,304,058 | |||
Industrial Conglomerates — 1.8% | |||||
3M Co. | 1,007,934 | 157,630,798 | |||
Insurance — 0.9% | |||||
Aflac, Inc. | 470,670 | 29,671,037 | |||
American International Group, Inc. | 872,795 | 49,129,630 | |||
78,800,667 | |||||
Internet and Catalog Retail — 2.5% | |||||
Amazon.com, Inc.(1) | 102,044 | 43,040,118 | |||
Expedia, Inc. | 1,901,291 | 179,158,651 | |||
222,198,769 | |||||
Internet Software and Services — 5.8% | |||||
Facebook, Inc., Class A(1) | 2,950,072 | 232,377,172 | |||
Google, Inc., Class A(1) | 177,325 | 97,310,640 | |||
LinkedIn Corp., Class A(1) | 223,283 | 56,296,343 | |||
Pandora Media, Inc.(1) | 2,815,585 | 50,230,036 | |||
VeriSign, Inc.(1) | 762,843 | 48,448,159 | |||
Yelp, Inc.(1) | 741,292 | 29,199,492 | |||
513,861,842 | |||||
IT Services — 7.6% | |||||
Alliance Data Systems Corp.(1) | 345,271 | 102,652,521 | |||
Cognizant Technology Solutions Corp., Class A(1) | 1,257,276 | 73,600,937 | |||
Fiserv, Inc.(1) | 1,091,694 | 84,715,454 | |||
Teradata Corp.(1) | 1,080,013 | 47,509,772 | |||
Visa, Inc., Class A | 5,522,968 | 364,792,037 | |||
673,270,721 | |||||
Life Sciences Tools and Services — 1.8% | |||||
Illumina, Inc.(1) | 376,760 | 69,418,030 |
8
Shares | Value | ||||
Mettler-Toledo International, Inc.(1) | 130,552 | $ | 41,386,290 | ||
Waters Corp.(1) | 348,995 | 43,690,684 | |||
154,495,004 | |||||
Machinery — 4.2% | |||||
Caterpillar, Inc. | 1,857,555 | 161,384,379 | |||
Parker-Hannifin Corp. | 622,162 | 74,261,256 | |||
WABCO Holdings, Inc.(1) | 516,619 | 64,293,235 | |||
Wabtec Corp. | 711,026 | 66,871,995 | |||
366,810,865 | |||||
Media — 5.6% | |||||
Comcast Corp., Class A | 4,272,914 | 246,803,513 | |||
Sirius XM Holdings, Inc.(1) | 13,482,313 | 53,255,136 | |||
Walt Disney Co. (The) | 1,752,608 | 190,543,542 | |||
490,602,191 | |||||
Metals and Mining — 0.2% | |||||
United States Steel Corp. | 871,358 | 20,930,019 | |||
Multiline Retail — 1.1% | |||||
Macy's, Inc. | 1,434,946 | 92,740,560 | |||
Oil, Gas and Consumable Fuels — 3.4% | |||||
Concho Resources, Inc.(1) | 717,111 | 90,829,279 | |||
Exxon Mobil Corp. | 2,420,611 | 211,488,783 | |||
302,318,062 | |||||
Personal Products — 0.9% | |||||
Estee Lauder Cos., Inc. (The), Class A | 956,412 | 77,746,731 | |||
Pharmaceuticals — 2.9% | |||||
Jazz Pharmaceuticals plc(1) | 190,546 | 34,050,570 | |||
Johnson & Johnson | 1,010,015 | 100,193,488 | |||
Pfizer, Inc. | 1,288,812 | 43,729,391 | |||
Teva Pharmaceutical Industries Ltd. ADR | 622,891 | 37,635,074 | |||
Zoetis, Inc. | 959,175 | 42,606,554 | |||
258,215,077 | |||||
Real Estate Investment Trusts (REITs) — 0.9% | |||||
Simon Property Group, Inc. | 418,575 | 75,967,177 | |||
Road and Rail — 2.0% | |||||
Union Pacific Corp. | 1,623,088 | 172,420,638 | |||
Semiconductors and Semiconductor Equipment — 1.6% | |||||
Altera Corp. | 1,769,829 | 73,766,473 | |||
Skyworks Solutions, Inc. | 406,130 | 37,465,492 | |||
Xilinx, Inc. | 594,570 | 25,780,555 | |||
137,012,520 | |||||
Software — 6.7% | |||||
Adobe Systems, Inc.(1) | 993,875 | 75,594,132 | |||
Electronic Arts, Inc.(1) | 1,191,623 | 69,221,380 | |||
Intuit, Inc. | 1,737,520 | 174,325,382 | |||
NetSuite, Inc.(1) | 494,627 | 47,271,502 | |||
Oracle Corp. | 4,067,011 | 177,403,020 |
9
Shares | Value | ||||
Splunk, Inc.(1) | 726,035 | $ | 48,168,792 | ||
591,984,208 | |||||
Specialty Retail — 6.0% | |||||
Bed Bath & Beyond, Inc.(1) | 1,663,899 | 117,238,324 | |||
Gap, Inc. (The) | 1,406,730 | 55,762,777 | |||
O'Reilly Automotive, Inc.(1) | 640,817 | 139,589,167 | |||
Ross Stores, Inc. | 883,924 | 87,402,405 | |||
TJX Cos., Inc. (The) | 2,009,303 | 129,680,416 | |||
529,673,089 | |||||
Technology Hardware, Storage and Peripherals — 6.7% | |||||
Apple, Inc. | 4,427,906 | 554,152,436 | |||
EMC Corp. | 1,487,633 | 40,032,204 | |||
594,184,640 | |||||
Tobacco — 1.5% | |||||
Philip Morris International, Inc. | 1,554,366 | 129,742,930 | |||
Wireless Telecommunication Services — 1.6% | |||||
SBA Communications Corp., Class A(1) | 1,187,405 | 137,525,247 | |||
TOTAL COMMON STOCKS (Cost $7,103,181,745) | 8,777,175,123 | ||||
TEMPORARY CASH INVESTMENTS — 0.5% | |||||
Repurchase Agreement, Bank of America Merrill Lynch, (collateralized by various U.S. Treasury obligations, 1.375%, 4/30/20, valued at $6,749,344), in a joint trading account at 0.08%, dated 4/30/15, due 5/1/15 (Delivery value $6,632,033) | 6,632,018 | ||||
Repurchase Agreement, Credit Suisse First Boston, Inc., (collateralized by various U.S. Treasury obligations, 1.50%, 12/31/18, valued at $16,201,947), in a joint trading account at 0.03%, dated 4/30/15, due 5/1/15 (Delivery value $15,916,856) | 15,916,843 | ||||
Repurchase Agreement, Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 3.125%, 11/15/41, valued at $18,953,802), at 0.01%, dated 4/30/15, due 5/1/15 (Delivery value $18,580,005) | 18,580,000 | ||||
State Street Institutional Liquid Reserves Fund, Premier Class | 485 | 485 | |||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $41,129,346) | 41,129,346 | ||||
TOTAL INVESTMENT SECURITIES — 100.2% (Cost $7,144,311,091) | 8,818,304,469 | ||||
OTHER ASSETS AND LIABILITIES — (0.2)% | (19,508,187 | ) | |||
TOTAL NET ASSETS — 100.0% | $ | 8,798,796,282 |
NOTES TO SCHEDULE OF INVESTMENTS | ||
ADR | - | American Depositary Receipt |
(1) | Non-income producing. |
See Notes to Financial Statements.
10
Statement of Assets and Liabilities |
APRIL 30, 2015 (UNAUDITED) | |||
Assets | |||
Investment securities, at value (cost of $7,144,311,091) | $ | 8,818,304,469 | |
Receivable for investments sold | 51,679,295 | ||
Receivable for capital shares sold | 3,805,818 | ||
Dividends and interest receivable | 2,369,148 | ||
8,876,158,730 | |||
Liabilities | |||
Payable for investments purchased | 56,398,785 | ||
Payable for capital shares redeemed | 13,989,895 | ||
Accrued management fees | 6,774,652 | ||
Distribution and service fees payable | 199,116 | ||
77,362,448 | |||
Net Assets | $ | 8,798,796,282 | |
Net Assets Consist of: | |||
Capital (par value and paid-in surplus) | $ | 6,572,430,137 | |
Undistributed net investment income | 20,120,213 | ||
Undistributed net realized gain | 532,252,723 | ||
Net unrealized appreciation | 1,673,993,209 | ||
$ | 8,798,796,282 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | ||||
Investor Class, $0.01 Par Value | $5,831,783,142 | 197,803,615 | $29.48 | |||
Institutional Class, $0.01 Par Value | $1,897,376,962 | 63,455,991 | $29.90 | |||
A Class, $0.01 Par Value | $629,872,022 | 21,898,323 | $28.76* | |||
C Class, $0.01 Par Value | $12,629,862 | 448,069 | $28.19 | |||
R Class, $0.01 Par Value | $123,645,035 | 4,361,948 | $28.35 | |||
R6 Class, $0.01 Par Value | $303,489,259 | 10,155,001 | $29.89 |
*Maximum offering price $30.51 (net asset value divided by 0.9425).
See Notes to Financial Statements.
11
Statement of Operations |
FOR THE SIX MONTHS ENDED APRIL 30, 2015 (UNAUDITED) | |||
Investment Income (Loss) | |||
Income: | |||
Dividends (net of foreign taxes withheld of $112,014) | $ | 64,124,552 | |
Interest | 10,972 | ||
64,135,524 | |||
Expenses: | |||
Management fees | 42,576,456 | ||
Distribution and service fees: | |||
A Class | 839,084 | ||
C Class | 65,961 | ||
R Class | 344,331 | ||
Directors' fees and expenses | 169,611 | ||
Other expenses | 4,091 | ||
43,999,534 | |||
Net investment income (loss) | 20,135,990 | ||
Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investment transactions | 534,758,922 | ||
Futures contract transactions | 1,481,042 | ||
536,239,964 | |||
Change in net unrealized appreciation (depreciation) on: | |||
Investments | (53,590,927 | ) | |
Translation of assets and liabilities in foreign currencies | (139 | ) | |
(53,591,066 | ) | ||
Net realized and unrealized gain (loss) | 482,648,898 | ||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 502,784,888 |
See Notes to Financial Statements.
12
Statement of Changes in Net Assets |
SIX MONTHS ENDED APRIL 30, 2015 (UNAUDITED) AND YEAR ENDED OCTOBER 31, 2014 | ||||||
Increase (Decrease) in Net Assets | April 30, 2015 | October 31, 2014 | ||||
Operations | ||||||
Net investment income (loss) | $ | 20,135,990 | $ | 36,134,621 | ||
Net realized gain (loss) | 536,239,964 | 2,198,704,083 | ||||
Change in net unrealized appreciation (depreciation) | (53,591,066 | ) | (898,224,384 | ) | ||
Net increase (decrease) in net assets resulting from operations | 502,784,888 | 1,336,614,320 | ||||
Distributions to Shareholders | ||||||
From net investment income: | ||||||
Investor Class | (16,585,425 | ) | (22,778,559 | ) | ||
Institutional Class | (10,940,258 | ) | (15,873,908 | ) | ||
A Class | (217,419 | ) | (888,505 | ) | ||
R6 Class | (4,181,750 | ) | (106,884 | ) | ||
From net realized gains: | ||||||
Investor Class | (1,198,333,488 | ) | (363,165,714 | ) | ||
Institutional Class | (462,150,035 | ) | (162,417,278 | ) | ||
A Class | (141,524,178 | ) | (46,907,160 | ) | ||
C Class | (2,779,036 | ) | (847,836 | ) | ||
R Class | (29,100,730 | ) | (8,690,601 | ) | ||
R6 Class | (134,632,055 | ) | (862,082 | ) | ||
Decrease in net assets from distributions | (2,000,444,374 | ) | (622,538,527 | ) | ||
Capital Share Transactions | ||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | 350,917,800 | (930,608,672 | ) | |||
Net increase (decrease) in net assets | (1,146,741,686 | ) | (216,532,879 | ) | ||
Net Assets | ||||||
Beginning of period | 9,945,537,968 | 10,162,070,847 | ||||
End of period | $ | 8,798,796,282 | $ | 9,945,537,968 | ||
Undistributed net investment income | $ | 20,120,213 | $ | 31,909,075 |
See Notes to Financial Statements.
13
Notes to Financial Statements |
APRIL 30, 2015 (UNAUDITED)
1. Organization
American Century Mutual Funds, Inc. (the corporation) is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company and is organized as a Maryland corporation. Growth Fund (the fund) is one fund in a series issued by the corporation. The fund is diversified as defined under the 1940 Act. The fund's investment objective is to seek long-term capital growth.
The fund offers the Investor Class, the Institutional Class, the A Class, the C Class, the R Class and the R6 Class. The A Class may incur an initial sales charge. The A Class and C Class may be subject to a contingent deferred sales charge. The share classes differ principally in their respective sales charges and distribution and shareholder servicing expenses and arrangements. The Institutional Class and R6 Class shareholders do not require the same level of shareholder and administrative services from American Century Investment Management, Inc. (ACIM) (the investment advisor) as shareholders of other classes. In addition, financial intermediaries do not receive any service, distribution or administrative fees for the R6 Class. As a result, the Institutional Class and R6 Class are charged lower unified management fees.
2. Significant Accounting Policies
The following is a summary of significant accounting policies consistently followed by the fund in preparation of its financial statements. The fund is an investment company and follows accounting and reporting guidance in accordance with accounting principles generally accepted in the United States of America. This may require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from these estimates. Management evaluated the impact of events or transactions occurring through the date the financial statements were issued that would merit recognition or disclosure.
Investment Valuations — The fund determines the fair value of its investments and computes its net asset value per share at 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. The Board of Directors has adopted valuation policies and procedures to guide the investment advisor in the fund’s investment valuation process and to provide methodologies for the oversight of the fund’s pricing function.
Equity securities that are listed or traded on a domestic securities exchange are valued at the last reported sales price or at the official closing price as provided by the exchange. Equity securities traded on foreign securities exchanges are generally valued at the closing price of such securities on the exchange where primarily traded or at the close of the NYSE, if that is earlier. If no last sales price is reported, or if local convention or regulation so provides, the mean of the latest bid and asked prices may be used. Securities traded over-the-counter are valued at the mean of the latest bid and asked prices, the last sales price, or the official closing price. Equity securities initially expressed in local currencies are translated into U.S. dollars at the mean of the appropriate currency exchange rate at the close of the NYSE as provided by an independent pricing service.
Fixed income securities maturing within 60 days at the time of purchase may be valued at cost, plus or minus any amortized discount or premium or at the evaluated mean as provided by an independent pricing service. Evaluated mean prices are commonly derived through utilization of market models, which may consider, among other factors: trade data, quotations from 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.
Open-end management investment companies are valued at the reported net asset value per share. Repurchase agreements are valued at cost, which approximates fair value. Exchange-traded futures contracts are valued at the settlement price as provided by the appropriate clearing corporation.
If the fund determines that the market price for an investment is not readily available or the valuation methods mentioned above do not reflect an investment’s fair value, such investment is valued as determined in good faith by the Board of Directors or its delegate, in accordance with policies and procedures adopted by the Board of Directors. In its determination of fair value, the fund may review several factors including, but not limited to, market information regarding the specific investment or comparable investments and correlation
14
with other investment types, futures indices or general market indicators. Circumstances that may cause the fund to use these procedures to value an investment include, but are not limited to: an investment has been declared in default or is distressed; trading in a security has been suspended during the trading day or a security is not actively trading on its principal exchange; prices received from a regular pricing source are deemed unreliable; or there is a foreign market holiday and no trading occurred.
The fund monitors for significant events occurring after the close of an investment’s primary exchange but before the fund’s net asset value per share is determined. Significant events may include, but are not limited to: corporate announcements and transactions; governmental action and political unrest that could impact a specific investment or an investment sector; or armed conflicts, natural disasters and similar events that could affect investments in a specific country or region. The fund also monitors for significant fluctuations between domestic and foreign markets, as evidenced by the U.S. market or such other indicators that the Board of Directors, or its delegate, deems appropriate. If significant fluctuations in foreign markets are identified, the fund may apply a model-derived factor to the closing price of equity securities traded on foreign securities exchanges. The factor is based on observable market data as provided by an independent pricing service.
Security Transactions — Security transactions are accounted for as of the trade date. Net realized gains and losses are determined on the identified cost basis, which is also used for federal income tax purposes.
Investment Income — Dividend income less foreign taxes withheld, if any, is recorded as of the ex-dividend date. Distributions received on securities that represent a return of capital or long-term capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The fund may estimate the components of distributions received that may be considered nontaxable distributions or long-term capital gain distributions for income tax purposes. Interest income is recorded on the accrual basis and includes accretion of discounts and amortization of premiums.
Foreign Currency Translations — All assets and liabilities initially expressed in foreign currencies are translated into U.S. dollars at prevailing exchange rates at period end. The fund may enter into spot foreign currency exchange contracts to facilitate transactions denominated in a foreign currency. Purchases and sales of investment securities, dividend and interest income, spot foreign currency exchange contracts, and expenses are translated at the rates of exchange prevailing on the respective dates of such transactions. Net realized and unrealized foreign currency exchange gains or losses related to investment securities are a component of net realized gain (loss) on investment transactions and change in net unrealized appreciation (depreciation) on investments, respectively.
Repurchase Agreements — The fund may enter into repurchase agreements with institutions that ACIM has determined are creditworthy pursuant to criteria adopted by the Board of Directors. The fund requires that the collateral, represented by securities, received in a repurchase transaction be transferred to the custodian in a manner sufficient to enable the fund to obtain those securities in the event of a default under the repurchase agreement. ACIM monitors, on a daily basis, the securities transferred to ensure the value, including accrued interest, of the securities under each repurchase agreement is equal to or greater than amounts owed to the fund under each repurchase agreement.
Joint Trading Account — Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the fund, along with certain other funds in the American Century Investments family of funds, may transfer uninvested cash balances into a joint trading account. These balances are invested in one or more repurchase agreements that are collateralized by U.S. Treasury or Agency obligations.
Segregated Assets — In accordance with the 1940 Act, the fund segregates assets on its books and records to cover futures contracts. ACIM monitors, on a daily basis, the securities segregated to ensure the fund designates a sufficient amount of liquid assets, marked-to-market daily. The fund may also receive assets or be required to pledge assets at the custodian bank or with a broker for margin requirements on futures contracts.
Income Tax Status — It is the fund’s policy to distribute substantially all net investment income and net realized gains to shareholders and to otherwise qualify as a regulated investment company under provisions of the Internal Revenue Code. Accordingly, no provision has been made for income taxes. The fund files U.S. federal, state, local and non-U.S. tax returns as applicable. The fund's tax returns are subject to examination by the relevant taxing authority until expiration of the applicable statute of limitations, which is generally three years from the date of filing but can be longer in certain jurisdictions. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination and for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
15
Multiple Class — All shares of the fund represent an equal pro rata interest in the net assets of the class to which such shares belong, and have identical voting, dividend, liquidation and other rights and the same terms and conditions, except for class specific expenses and exclusive rights to vote on matters affecting only individual classes. Income, non-class specific expenses, and realized and unrealized capital gains and losses of the fund are allocated to each class of shares based on their relative net assets.
Distributions to Shareholders — Distributions from net investment income and net realized gains, if any, are generally declared and paid annually. The fund may elect to treat a portion of its payment to a redeeming shareholder, which represents the pro rata share of undistributed net investment income and net realized gains, as a distribution for federal income tax purposes (tax equalization).
Indemnifications — Under the corporation’s organizational documents, its officers and directors are indemnified against certain liabilities arising out of the performance of their duties to the fund. In addition, in the normal course of business, the fund enters into contracts that provide general indemnifications. The maximum exposure under these arrangements is unknown as this would involve future claims that may be made against a fund. The risk of material loss from such claims is considered by management to be remote.
3. Fees and Transactions with Related Parties
Certain officers and directors of the corporation are also officers and/or directors of American Century Companies, Inc. (ACC). The corporation’s investment advisor, ACIM, the corporation's distributor, American Century Investment Services, Inc. (ACIS), and the corporation’s transfer agent, American Century Services, LLC, are wholly owned, directly or indirectly, by ACC.
Management Fees — The corporation has entered into a management agreement with ACIM, under which ACIM provides the fund with investment advisory and management services in exchange for a single, unified management fee (the fee) per class. The agreement provides that all expenses of managing and operating the fund, except distribution and service fees, brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), and extraordinary expenses, will be paid by ACIM. The fee is computed and accrued daily based on each class’s daily net assets and paid monthly in arrears. The rate of the fee is determined by applying a fee rate calculation formula. This formula takes into account the fund’s assets as well as certain assets, if any, of other clients of the investment advisor outside the American Century Investments family of funds (such as subadvised funds and separate accounts) that have very similar investment teams and investment strategies (strategy assets). The strategy assets of the fund also include the assets of NT Growth Fund, one fund in a series issued by the corporation. The annual management fee schedule ranges from 0.800% to 0.990% for the Investor Class, A Class, C Class and R Class. The annual management fee schedule ranges from 0.600% to 0.790% for the Institutional Class and 0.450% to 0.640% for the R6 Class. The effective annual management fee for each class for the six months ended April 30, 2015 was 0.96% for the Investor Class, A Class, C Class and R Class, 0.76% for the Institutional Class and 0.61% for the R6 Class.
Distribution and Service Fees — The Board of Directors has adopted a separate Master Distribution and Individual Shareholder Services Plan for each of the A Class, C Class and R Class (collectively the plans), pursuant to Rule 12b-1 of the 1940 Act. The plans provide that the A Class will pay ACIS an annual distribution and service fee of 0.25%. The plans provide that the C Class will pay ACIS an annual distribution and service fee of 1.00%, of which 0.25% is paid for individual shareholder services and 0.75% is paid for distribution services. The plans provide that the R Class will pay ACIS an annual distribution and service fee of 0.50%. The fees are computed and accrued daily based on each class’s daily net assets and paid monthly in arrears. The fees are used to pay financial intermediaries for distribution and individual shareholder services. Fees incurred under the plans during the six months ended April 30, 2015 are detailed in the Statement of Operations.
Directors' Fees and Expenses — The Board of Directors is responsible for overseeing the investment advisor’s management and operations of the fund. The directors receive detailed information about the fund and its investment advisor regularly throughout the year, and meet at least quarterly with management of the investment advisor to review reports about fund operations. The fund’s officers do not receive compensation from the fund.
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the six months ended April 30, 2015 were $2,513,646,892 and $4,129,283,871, respectively.
16
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended April 30, 2015 | Year ended October 31, 2014 | |||||||||
Shares | Amount | Shares | Amount | |||||||
Investor Class/Shares Authorized | 800,000,000 | 800,000,000 | ||||||||
Sold | 5,270,575 | $ | 161,487,139 | 13,332,918 | $ | 445,451,613 | ||||
Issued in reinvestment of distributions | 42,695,891 | 1,180,114,435 | 11,936,516 | 375,642,112 | ||||||
Redeemed | (20,310,263 | ) | (622,934,762 | ) | (46,275,518 | ) | (1,573,721,708 | ) | ||
27,656,203 | 718,666,812 | (21,006,084 | ) | (752,627,983 | ) | |||||
Institutional Class/Shares Authorized | 345,000,000 | 345,000,000 | ||||||||
Sold | 6,093,794 | 187,451,886 | 19,929,594 | 680,057,728 | ||||||
Issued in reinvestment of distributions | 16,531,988 | 463,061,000 | 5,462,288 | 173,755,364 | ||||||
Redeemed | (28,466,590 | ) | (888,971,715 | ) | (40,962,347 | ) | (1,379,407,350 | ) | ||
(5,840,808 | ) | (238,458,829 | ) | (15,570,465 | ) | (525,594,258 | ) | |||
A Class/Shares Authorized | 310,000,000 | 310,000,000 | ||||||||
Sold | 1,472,353 | 42,951,738 | 2,580,515 | 84,073,659 | ||||||
Issued in reinvestment of distributions | 4,969,965 | 134,139,352 | 1,452,224 | 44,844,664 | ||||||
Redeemed | (5,283,330 | ) | (158,556,609 | ) | (8,476,259 | ) | (280,585,369 | ) | ||
1,158,988 | 18,534,481 | (4,443,520 | ) | (151,667,046 | ) | |||||
C Class/Shares Authorized | 20,000,000 | 20,000,000 | ||||||||
Sold | 41,416 | 1,168,711 | 46,991 | 1,539,309 | ||||||
Issued in reinvestment of distributions | 75,478 | 2,001,685 | 19,381 | 594,604 | ||||||
Redeemed | (61,039 | ) | (1,782,165 | ) | (123,535 | ) | (3,974,728 | ) | ||
55,855 | 1,388,231 | (57,163 | ) | (1,840,815 | ) | |||||
R Class/Shares Authorized | 30,000,000 | 30,000,000 | ||||||||
Sold | 667,442 | 19,236,380 | 601,554 | 19,559,453 | ||||||
Issued in reinvestment of distributions | 1,071,849 | 28,532,630 | 276,271 | 8,459,424 | ||||||
Redeemed | (1,544,472 | ) | (44,960,532 | ) | (1,229,483 | ) | (40,169,460 | ) | ||
194,819 | 2,808,478 | (351,658 | ) | (12,150,583 | ) | |||||
R6 Class/Shares Authorized | 50,000,000 | 50,000,000 | ||||||||
Sold | 5,860,997 | 194,836,027 | 16,405,541 | 548,650,322 | ||||||
Issued in reinvestment of distributions | 4,961,180 | 138,813,805 | 30,490 | 968,966 | ||||||
Redeemed | (16,483,770 | ) | (485,671,205 | ) | (1,073,663 | ) | (36,347,275 | ) | ||
(5,661,593 | ) | (152,021,373 | ) | 15,362,368 | 513,272,013 | |||||
Net increase (decrease) | 17,563,464 | $ | 350,917,800 | (26,066,522 | ) | $ | (930,608,672 | ) |
6. Fair Value Measurements
The fund’s investments valuation process is based on several considerations and may use multiple inputs to determine the fair value of the investments held by the fund. In conformity with accounting principles generally accepted in the United States of America, the inputs used to determine a valuation are classified into three broad levels.
• | Level 1 valuation inputs consist of unadjusted quoted prices in an active market for identical investments. |
• | Level 2 valuation inputs consist of direct or indirect observable market data (including quoted prices for comparable investments, evaluations of subsequent market events, interest rates, prepayment speeds, credit risk, etc.). These inputs also consist of quoted prices for identical investments initially expressed in local currencies that are adjusted through translation into U.S. dollars. |
• | Level 3 valuation inputs consist of unobservable data (including a fund’s own assumptions). |
17
The level classification is based on the lowest level input that is significant to the fair valuation measurement. The valuation inputs are not necessarily an indication of the risks associated with investing in these securities or other financial instruments. There were no significant transfers between levels during the period.
The following is a summary of the level classifications as of period end. The Schedule of Investments provides additional information on the fund’s portfolio holdings.
Level 1 | Level 2 | Level 3 | ||||||
Assets | ||||||||
Investment Securities | ||||||||
Common Stocks | $ | 8,777,175,123 | — | — | ||||
Temporary Cash Investments | 485 | $ | 41,128,861 | — | ||||
$ | 8,777,175,608 | $ | 41,128,861 | — |
7. Derivative Instruments
Equity Price Risk — The fund is subject to equity price risk in the normal course of pursuing its investment objectives. A fund may enter into futures contracts based on an equity index in order to manage its exposure to changes in market conditions. A fund may purchase futures contracts to gain exposure to increases in market value or sell futures contracts to protect against a decline in market value. Upon entering into a futures contract, a fund is required to deposit either cash or securities in an amount equal to a certain percentage of the contract value (initial margin). Subsequent payments (variation margin) are made or received daily, in cash, by a fund. The variation margin is equal to the daily change in the contract value and is recorded as unrealized gains and losses. A fund recognizes a realized gain or loss when the contract is closed or expires. Net realized and unrealized gains or losses occurring during the holding period of futures contracts are a component of net realized gain (loss) on futures contract transactions and change in net unrealized appreciation (depreciation) on futures contracts, respectively. One of the risks of entering into futures contracts is the possibility that the change in value of the contract may not correlate with the changes in value of the underlying securities. During the period, the fund purchased equity price risk derivative instruments for temporary investment purposes.
At period end, the fund did not have any derivative instruments disclosed on the Statement of Assets and Liabilities. For the six months ended April 30, 2015, the effect of equity price risk derivative instruments on the Statement of Operations was $1,481,042 in net realized gain (loss) on futures contract transactions.
8. Risk Factors
The fund’s investment process may result in high portfolio turnover, which could mean high transaction costs, affecting both performance and capital gains tax liabilities to investors.
9. Federal Tax Information
The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
As of April 30, 2015, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $ | 7,148,090,452 | |
Gross tax appreciation of investments | $ | 1,788,528,720 | |
Gross tax depreciation of investments | (118,314,703 | ) | |
Net tax appreciation (depreciation) of investments | $ | 1,670,214,017 |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales.
18
Financial Highlights |
For a Share Outstanding Throughout the Years Ended October 31 (except as noted) | |||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||
Income From Investment Operations: | Distributions From: | 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 | Net Investment Income | Net Realized Gains | Total Distributions | 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 | |||||||||||||||
2015(3) | $35.39 | 0.06 | 1.29 | 1.35 | (0.10) | (7.16) | (7.26) | $29.48 | 5.18% | 0.97%(4) | 0.39%(4) | 27% | $5,831,783 | ||
2014 | $33.10 | 0.11 | 4.22 | 4.33 | (0.12) | (1.92) | (2.04) | $35.39 | 13.84% | 0.97% | 0.32% | 103% | $6,021,115 | ||
2013 | $27.48 | 0.21 | 6.53 | 6.74 | (0.25) | (0.87) | (1.12) | $33.10 | 25.42% | 0.97% | 0.71% | 67% | $6,327,674 | ||
2012 | $25.88 | 0.14 | 2.50 | 2.64 | (0.13) | (0.91) | (1.04) | $27.48 | 10.67% | 0.97% | 0.54% | 74% | $5,593,916 | ||
2011 | $24.00 | 0.16 | 1.81 | 1.97 | (0.09) | — | (0.09) | $25.88 | 8.20% | 0.98% | 0.58% | 79% | $5,377,431 | ||
2010 | $20.28 | 0.10 | 3.68 | 3.78 | (0.06) | — | (0.06) | $24.00 | 18.65% | 1.00% | 0.43% | 86% | $4,440,152 | ||
Institutional Class | |||||||||||||||
2015(3) | $35.83 | 0.09 | 1.31 | 1.40 | (0.17) | (7.16) | (7.33) | $29.90 | 5.32% | 0.77%(4) | 0.59%(4) | 27% | $1,897,377 | ||
2014 | $33.49 | 0.18 | 4.27 | 4.45 | (0.19) | (1.92) | (2.11) | $35.83 | 14.03% | 0.77% | 0.52% | 103% | $2,482,606 | ||
2013 | $27.75 | 0.27 | 6.60 | 6.87 | (0.26) | (0.87) | (1.13) | $33.49 | 25.68% | 0.77% | 0.91% | 67% | $2,842,185 | ||
2012 | $26.13 | 0.20 | 2.51 | 2.71 | (0.18) | (0.91) | (1.09) | $27.75 | 10.86% | 0.77% | 0.74% | 74% | $2,237,708 | ||
2011 | $24.23 | 0.20 | 1.84 | 2.04 | (0.14) | — | (0.14) | $26.13 | 8.42% | 0.78% | 0.78% | 79% | $2,080,463 | ||
2010 | $20.47 | 0.14 | 3.72 | 3.86 | (0.10) | — | (0.10) | $24.23 | 18.90% | 0.80% | 0.63% | 86% | $1,106,748 |
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For a Share Outstanding Throughout the Years Ended October 31 (except as noted) | |||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||
Income From Investment Operations: | Distributions From: | 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 | Net Investment Income | Net Realized Gains | Total Distributions | 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) | |||
A Class(5) | |||||||||||||||
2015(3) | $34.65 | 0.02 | 1.26 | 1.28 | (0.01) | (7.16) | (7.17) | $28.76 | 5.05% | 1.22%(4) | 0.14%(4) | 27% | $629,872 | ||
2014 | $32.45 | 0.03 | 4.13 | 4.16 | (0.04) | (1.92) | (1.96) | $34.65 | 13.53% | 1.22% | 0.07% | 103% | $718,640 | ||
2013 | $27.00 | 0.13 | 6.42 | 6.55 | (0.23) | (0.87) | (1.10) | $32.45 | 25.14% | 1.22% | 0.46% | 67% | $817,166 | ||
2012 | $25.45 | 0.07 | 2.46 | 2.53 | (0.07) | (0.91) | (0.98) | $27.00 | 10.37% | 1.22% | 0.29% | 74% | $701,313 | ||
2011 | $23.60 | 0.08 | 1.79 | 1.87 | (0.02) | — | (0.02) | $25.45 | 7.93% | 1.23% | 0.33% | 79% | $628,634 | ||
2010 | $19.94 | 0.04 | 3.62 | 3.66 | —(6) | — | —(6) | $23.60 | 18.37% | 1.25% | 0.18% | 86% | $369,142 | ||
C Class | |||||||||||||||
2015(3) | $34.20 | (0.09) | 1.24 | 1.15 | — | (7.16) | (7.16) | $28.19 | 4.68% | 1.97%(4) | (0.61)%(4) | 27% | $12,630 | ||
2014 | $32.24 | (0.22) | 4.10 | 3.88 | — | (1.92) | (1.92) | $34.20 | 12.71% | 1.97% | (0.68)% | 103% | $13,413 | ||
2013 | $26.98 | (0.08) | 6.38 | 6.30 | (0.17) | (0.87) | (1.04) | $32.24 | 24.16% | 1.97% | (0.29)% | 67% | $14,489 | ||
2012 | $25.55 | (0.12) | 2.46 | 2.34 | — | (0.91) | (0.91) | $26.98 | 9.55% | 1.97% | (0.46)% | 74% | $14,084 | ||
2011 | $23.85 | (0.12) | 1.82 | 1.70 | — | — | — | $25.55 | 7.13% | 1.98% | (0.42)% | 79% | $14,730 | ||
2010(7) | $22.10 | (0.10) | 1.85 | 1.75 | — | — | — | $23.85 | 7.92% | 2.00%(4) | (0.66)%(4) | 86%(8) | $6,219 | ||
R Class | |||||||||||||||
2015(3) | $34.28 | (0.02) | 1.25 | 1.23 | — | (7.16) | (7.16) | $28.35 | 4.95% | 1.47%(4) | (0.11)%(4) | 27% | $123,645 | ||
2014 | $32.16 | (0.06) | 4.10 | 4.04 | — | (1.92) | (1.92) | $34.28 | 13.26% | 1.47% | (0.18)% | 103% | $142,845 | ||
2013 | $26.82 | 0.06 | 6.36 | 6.42 | (0.21) | (0.87) | (1.08) | $32.16 | 24.80% | 1.47% | 0.21% | 67% | $145,337 | ||
2012 | $25.28 | 0.01 | 2.44 | 2.45 | —(6) | (0.91) | (0.91) | $26.82 | 10.12% | 1.47% | 0.04% | 74% | $115,208 | ||
2011 | $23.49 | —(6) | 1.79 | 1.79 | — | — | — | $25.28 | 7.62% | 1.48% | 0.08% | 79% | $79,569 | ||
2010 | $19.90 | (0.02) | 3.61 | 3.59 | — | — | — | $23.49 | 18.10% | 1.50% | (0.07)% | 86% | $20,325 |
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For a Share Outstanding Throughout the Years Ended October 31 (except as noted) | |||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||
Income From Investment Operations: | Distributions From: | 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 | Net Investment Income | Net Realized Gains | Total Distributions | 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) | |||
R6 Class | |||||||||||||||
2015(3) | $35.84 | 0.13 | 1.30 | 1.43 | (0.22) | (7.16) | (7.38) | $29.89 | 5.40% | 0.62%(4) | 0.74%(4) | 27% | $303,489 | ||
2014 | $33.51 | 0.18 | 4.31 | 4.49 | (0.24) | (1.92) | (2.16) | $35.84 | 14.20% | 0.62% | 0.67% | 103% | $566,919 | ||
2013(9) | $31.22 | 0.05 | 2.24 | 2.29 | — | — | — | $33.51 | 7.34% | 0.62%(4) | 0.64%(4) | 67%(10) | $15,219 |
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 and do not reflect applicable sales charges, if any. Total returns for periods less than one year are not annualized. |
(3) | Six months ended April 30, 2015 (unaudited). |
(4) | Annualized. |
(5) | Prior to March 1, 2010, the A Class was referred to as the Advisor Class. |
(6) | Per-share amount was less than $0.005. |
(7) | March 1, 2010 (commencement of sale) through October 31, 2010. |
(8) | Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended October 31, 2010. |
(9) | July 26, 2013 (commencement of sale) through October 31, 2013. |
(10) | Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended October 31, 2013. |
See Notes to Financial Statements.
21
Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain IRAs are subject to federal income tax withholding, unless you elect not to have withholding apply. Tax will be withheld on the total amount withdrawn even though you may be receiving amounts that are not subject to withholding, such as nondeductible contributions. In such case, excess amounts of withholding could occur. You may adjust your withholding election so that a greater or lesser amount will be withheld.
If you don’t want us to withhold on this amount, you must notify us to not withhold the federal income tax. You may notify us in writing or in certain situations by telephone or through other electronic means. For systematic withdrawals, your withholding election will remain in effect until revoked or changed by filing a new election. You have the right to revoke your election at any time.
Remember, even if you elect not to have income tax withheld, you are liable for paying income tax on the taxable portion of your withdrawal. If you elect not to have income tax withheld or you don’t have enough income tax withheld, you may be responsible for payment of estimated tax. You may incur penalties under the estimated tax rules if your withholding and estimated tax payments are not sufficient. You can reduce or defer the income tax on a distribution by directly or indirectly rolling such distribution over to another IRA or eligible plan. You should consult your tax advisor for additional information.
State tax will be withheld if, at the time of your distribution, your address is within one of the mandatory withholding states and you have federal income tax withheld (or as otherwise required by state law). State taxes will be withheld from your distribution in accordance with the respective state rules.
Distributions you receive from 403(b), 457 and qualified plans are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
A description of the policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund is available without charge, upon request, by calling 1-800-345-2021. It is also available on the "About Us" page of American Century Investments’ website at americancentury.com and on the Securities and Exchange Commission’s website at sec.gov. Information regarding how the investment advisor voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the "About Us" page at americancentury.com. It is also available at sec.gov.
Quarterly Portfolio Disclosure
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-Q. The fund’s Forms N-Q are available on the SEC’s website at sec.gov, and may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The fund also makes its complete schedule of portfolio holdings for the most recent quarter of its fiscal year available on its
website at americancentury.com and, upon request, by calling 1-800-345-2021.
22
Notes |
23
Notes |
24
![]() | ||
Contact Us | americancentury.com | |
Automated Information Line | 1-800-345-8765 | |
Investor Services Representative | 1-800-345-2021 or 816-531-5575 | |
Investors Using Advisors | 1-800-378-9878 | |
Business, Not-For-Profit, Employer-Sponsored Retirement Plans | 1-800-345-3533 | |
Banks and Trust Companies, Broker-Dealers, Financial Professionals, Insurance Companies | 1-800-345-6488 | |
Telecommunications Relay Service for the Deaf | 711 | |
American Century Mutual Funds, Inc. | ||
Investment Advisor: American Century Investment Management, Inc. Kansas City, Missouri | ||
This report and the statements it contains are submitted for the general information of our shareholders. The report is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus. | ||
©2015 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-85683 1506 |
SEMIANNUAL REPORT | APRIL 30, 2015 |
![](https://capedge.com/proxy/N-CSRS/0000100334-15-000051/image49a03.jpg)
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Heritage Fund
Table of Contents |
Any opinions expressed in this report reflect those of the author as of the date of the report, and do not necessarily represent the opinions of American Century Investments® or any other person in the American Century Investments organization. Any such opinions are subject to change at any time based upon market or other conditions and American Century Investments disclaims any responsibility to update such opinions. These opinions may not be relied upon as investment advice and, because investment decisions made by American Century Investments funds are based on numerous factors, may not be relied upon as an indication of trading intent on behalf of any American Century Investments fund. Security examples are used for representational purposes only and are not intended as recommendations to purchase or sell securities. Performance information for comparative indices and securities is provided to American Century Investments by third party vendors. To the best of American Century Investments’ knowledge, such information is accurate at the time of printing.
President’s Letter |
![]() | Dear Investor: Thank you for reviewing this semiannual report for the six months ended April 30, 2015. It provides a macroeconomic and financial market overview (below), followed by fund performance, a schedule of fund investments, and other financial information. For additional commentary and updated information on fund performance, key factors that affected asset returns, and other insights regarding the investment markets, we encourage you to visit our website, americancentury.com. |
Jonathan Thomas |
Global Divergence in Monetary Policies Influenced Investor Behavior
The six-month reporting period saw big swings in market returns, triggered in part by central bank moves. In October 2014, just before the period started, the U.S. Federal Reserve ended its latest bond-buying program (quantitative easing, QE). As QE wound down, the U.S. economy enjoyed 5% annualized growth (after inflation) in the third quarter of 2014, the highest rate since the third quarter of 2003. But while QE was ending in the U.S., other major central banks were starting or increasing QE as their economies faltered. A “global divergence” of economic growth and monetary policies opened between the U.S. and most of the rest of the developed world.
This divergence helped fuel increased demand for the U.S. dollar and U.S. dollar-denominated assets, and put downward pressure on commodities prices, most notably oil. Though the resulting dollar rally and oil price decline reversed somewhat in April 2015, the dollar remained 9% higher for the reporting period, as measured by the U.S. Dollar Index, while oil remained more than 25% lower, as measured by both Brent and West Texas Intermediate crude oil futures. In this environment, U.S. stocks and bonds posted moderate gains—the S&P 500 Index and the Barclays U.S. Aggregate Bond Index returned 4.40% and 2.06%, respectively.
We expect monetary policy divergence between the U.S. and other major developed economies to continue this year, accompanied by market volatility. This could present both challenges and opportunities for active investment managers. Upward pressures on inflation and interest rates could develop as the massive amount of global monetary stimulus in progress takes hold and economies improve. But we believe lingering constraining forces will likely keep inflation and interest rates relatively low for the next six months. In this environment, we continue to believe in a disciplined, diversified, long-term investment approach, using professionally managed stock and bond portfolios to meet financial goals. We appreciate your continued trust in us.
Sincerely,
![](https://capedge.com/proxy/N-CSRS/0000100334-15-000051/jonathanthomassig.jpg)
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
2
Performance |
Total Returns as of April 30, 2015 | |||||||
Average Annual Returns | |||||||
Ticker Symbol | 6 months(1) | 1 year | 5 years | 10 years | Since Inception | Inception Date | |
Investor Class | TWHIX | 9.07% | 16.89% | 13.84% | 13.17% | 11.89% | 11/10/87 |
Russell Midcap Growth Index | — | 7.77% | 16.46% | 15.58% | 10.55% | 11.35%(2) | — |
Institutional Class | ATHIX | 9.17% | 17.13% | 14.07% | 13.40% | 9.71% | 6/16/97 |
A Class(3) | ATHAX | 7/11/97 | |||||
No sales charge* | 8.94% | 16.64% | 13.56% | 12.90% | 8.97% | ||
With sales charge* | 2.69% | 9.93% | 12.22% | 12.23% | 8.60% | ||
B Class | ATHBX | 9/28/07 | |||||
No sales charge* | 8.54% | 15.74% | 12.71% | — | 6.12% | ||
With sales charge* | 3.54% | 11.74% | 12.59% | — | 6.12% | ||
C Class | AHGCX | 6/26/01 | |||||
No sales charge* | 8.55% | 15.77% | 12.72% | 12.06% | 7.55% | ||
With sales charge* | 7.65% | 15.77% | 12.72% | 12.06% | 7.55% | ||
R Class | ATHWX | 8.82% | 16.35% | 13.28% | — | 6.65% | 9/28/07 |
R6 Class | ATHDX | 9.24% | 17.32% | — | — | 14.85% | 7/26/13 |
* | Sales charges include initial sales charges and contingent deferred sales charges (CDSCs), as applicable. A Class shares have a 5.75% maximum initial sales charge and may be subject to a maximum CDSC of 1.00%. B Class shares redeemed within six years of purchase are subject to a CDSC that declines from 5.00% during the first year to 0.00% after the sixth year. C Class shares redeemed within 12 months of purchase are subject to a maximum CDSC of 1.00%. The SEC requires that mutual funds provide performance information net of maximum sales charges in all cases where charges could be applied. |
(1) | Total returns for periods less than one year are not annualized. |
(2) | Since October 31, 1987, the date nearest the Investor Class’s inception for which data are available. |
(3) | Prior to September 4, 2007, the A Class was referred to as the Advisor Class and did not have a front-end sales charge. Performance prior to that date has been adjusted to reflect this charge. |
Total Annual Fund Operating Expenses | ||||||
Investor Class | Institutional Class | A Class | B Class | C Class | R Class | R6 Class |
1.00% | 0.80% | 1.25% | 2.00% | 2.00% | 1.50% | 0.65% |
The total annual fund operating expenses shown is as stated in the fund’s prospectus current as of the date of this report. The prospectus may vary from the expense ratio shown elsewhere in this report because it is based on a different time period, includes acquired fund fees and expenses, and, if applicable, does not include fee waivers or expense reimbursements.
Data presented reflect past performance. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance shown. Investment return and principal value will fluctuate, and redemption value may be more or less than original cost. Data assumes reinvestment of dividends and capital gains, and none of the charts reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. To obtain performance data current to the most recent month end, please call 1-800-345-2021 or visit americancentury.com. For additional information about the fund, please consult the prospectus.
3
Fund Characteristics |
APRIL 30, 2015 | |
Top Ten Holdings | % of net assets |
Electronic Arts, Inc. | 3.4% |
SBA Communications Corp., Class A | 3.0% |
Constellation Brands, Inc., Class A | 2.4% |
Teleflex, Inc. | 2.2% |
Affiliated Managers Group, Inc. | 2.2% |
Canadian Pacific Railway Ltd., New York Shares | 2.1% |
Middleby Corp. | 2.0% |
Intuit, Inc. | 1.8% |
Charter Communications, Inc., Class A | 1.8% |
CoStar Group, Inc. | 1.8% |
Top Five Industries | % of net assets |
Software | 7.0% |
Specialty Retail | 6.4% |
Machinery | 5.6% |
Beverages | 4.2% |
Health Care Equipment and Supplies | 4.0% |
Types of Investments in Portfolio | % of net assets |
Common Stocks | 97.4% |
Temporary Cash Investments | 2.1% |
Other Assets and Liabilities | 0.5% |
4
Shareholder Fee Example |
Fund shareholders may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption/exchange fees; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in your fund and to compare these costs with the ongoing cost of investing in other mutual funds.
The example is based on an investment of $1,000 made at the beginning of the period and held for the entire period from November 1, 2014 to April 30, 2015.
Actual Expenses
The table provides information about actual account values and actual expenses for each class. You may use the information, together with the amount you invested, to estimate the expenses that you paid over the period. First, identify the share class you own. Then simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
If you hold Investor Class shares of any American Century Investments fund, or Institutional Class shares of the American Century Diversified Bond Fund, in an American Century Investments account (i.e., not a financial intermediary or retirement plan account), American Century Investments may charge you a $12.50 semiannual account maintenance fee if the value of those shares is less than $10,000. We will redeem shares automatically in one of your accounts to pay the $12.50 fee. 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. Personal accounts include individual accounts, joint accounts, UGMA/UTMA accounts, personal trusts, Coverdell Education Savings Accounts and 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. If you are subject to the Account Maintenance Fee, your account value could be reduced by the fee amount.
Hypothetical Example for Comparison Purposes
The table also provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio of each class of your fund and an assumed rate of return of 5% per year before expenses, which is not the actual return of a fund’s share class. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) or redemption/exchange fees. Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
5
Beginning Account Value 11/1/14 | Ending Account Value 4/30/15 | Expenses Paid During Period(1) 11/1/14 - 4/30/15 | Annualized Expense Ratio(1) | |
Actual | ||||
Investor Class | $1,000 | $1,090.70 | $5.18 | 1.00% |
Institutional Class | $1,000 | $1,091.70 | $4.15 | 0.80% |
A Class | $1,000 | $1,089.40 | $6.48 | 1.25% |
B Class | $1,000 | $1,085.40 | $10.34 | 2.00% |
C Class | $1,000 | $1,085.50 | $10.34 | 2.00% |
R Class | $1,000 | $1,088.20 | $7.77 | 1.50% |
R6 Class | $1,000 | $1,092.40 | $3.37 | 0.65% |
Hypothetical | ||||
Investor Class | $1,000 | $1,019.84 | $5.01 | 1.00% |
Institutional Class | $1,000 | $1,020.83 | $4.01 | 0.80% |
A Class | $1,000 | $1,018.60 | $6.26 | 1.25% |
B Class | $1,000 | $1,014.88 | $9.99 | 2.00% |
C Class | $1,000 | $1,014.88 | $9.99 | 2.00% |
R Class | $1,000 | $1,017.36 | $7.50 | 1.50% |
R6 Class | $1,000 | $1,021.57 | $3.26 | 0.65% |
(1) | Expenses are equal to the class's annualized expense ratio listed in the table above, multiplied by the average account value over the period, multiplied by 181, the number of days in the most recent fiscal half-year, divided by 365, to reflect the one-half year period. |
6
Schedule of Investments |
APRIL 30, 2015 (UNAUDITED)
Shares | Value | |||
COMMON STOCKS — 97.4% | ||||
Aerospace and Defense — 2.0% | ||||
B/E Aerospace, Inc. | 833,304 | $ | 49,823,246 | |
Esterline Technologies Corp.(1) | 629,475 | 70,054,273 | ||
119,877,519 | ||||
Airlines — 1.2% | ||||
Spirit Airlines, Inc.(1) | 1,005,646 | 68,856,582 | ||
Auto Components — 1.3% | ||||
BorgWarner, Inc. | 1,304,620 | 77,233,504 | ||
Banks — 2.5% | ||||
East West Bancorp, Inc. | 1,111,874 | 45,130,966 | ||
Signature Bank(1) | 369,709 | 49,574,280 | ||
SVB Financial Group(1) | 366,314 | 48,631,846 | ||
143,337,092 | ||||
Beverages — 4.2% | ||||
Boston Beer Co., Inc. (The), Class A(1) | 117,456 | 29,105,597 | ||
Brown-Forman Corp., Class B | 858,120 | 77,428,167 | ||
Constellation Brands, Inc., Class A(1) | 1,206,170 | 139,843,350 | ||
246,377,114 | ||||
Biotechnology — 2.2% | ||||
Alnylam Pharmaceuticals, Inc.(1) | 259,346 | 26,419,577 | ||
AMAG Pharmaceuticals, Inc.(1) | 580,335 | 29,579,675 | ||
Regeneron Pharmaceuticals, Inc.(1) | 62,484 | 28,583,931 | ||
Vertex Pharmaceuticals, Inc.(1) | 376,398 | 46,402,345 | ||
130,985,528 | ||||
Building Products — 1.0% | ||||
Lennox International, Inc. | 576,022 | 61,035,291 | ||
Capital Markets — 2.2% | ||||
Affiliated Managers Group, Inc.(1) | 578,858 | 130,897,159 | ||
Commercial Services and Supplies — 1.8% | ||||
KAR Auction Services, Inc. | 1,654,758 | 61,573,545 | ||
Stericycle, Inc.(1) | 309,115 | 41,245,215 | ||
102,818,760 | ||||
Communications Equipment — 3.0% | ||||
Juniper Networks, Inc. | 2,239,918 | 59,201,032 | ||
Motorola Solutions, Inc. | 1,022,361 | 61,086,070 | ||
Palo Alto Networks, Inc.(1) | 384,436 | 56,788,886 | ||
177,075,988 | ||||
Consumer Finance — 0.5% | ||||
Discover Financial Services | 510,067 | 29,568,584 | ||
Containers and Packaging — 1.6% | ||||
Ball Corp. | 859,164 | 63,071,229 | ||
Berry Plastics Group, Inc.(1) | 963,382 | 32,966,932 | ||
96,038,161 | ||||
Distributors — 0.3% | ||||
LKQ Corp.(1) | 578,230 | 15,652,686 |
7
Shares | Value | |||
Diversified Telecommunication Services — 0.5% | ||||
Zayo Group Holdings, Inc.(1) | 1,089,447 | $ | 28,924,818 | |
Electrical Equipment — 0.8% | ||||
Acuity Brands, Inc. | 296,786 | 49,548,423 | ||
Electronic Equipment, Instruments and Components — 0.9% | ||||
TE Connectivity Ltd. | 756,664 | 50,355,989 | ||
Energy Equipment and Services — 0.9% | ||||
Patterson-UTI Energy, Inc. | 1,550,020 | 34,642,947 | ||
Weatherford International plc(1) | 1,049,496 | 15,270,167 | ||
49,913,114 | ||||
Food and Staples Retailing — 2.1% | ||||
Costco Wholesale Corp. | 427,516 | 61,156,164 | ||
United Natural Foods, Inc.(1) | 383,383 | 25,863,017 | ||
Whole Foods Market, Inc. | 740,700 | 35,375,832 | ||
122,395,013 | ||||
Food Products — 2.0% | ||||
Hain Celestial Group, Inc. (The)(1) | 711,941 | 42,887,326 | ||
Hershey Co. (The) | 481,160 | 44,228,227 | ||
WhiteWave Foods Co., Class A(1) | 741,799 | 32,616,902 | ||
119,732,455 | ||||
Health Care Equipment and Supplies — 4.0% | ||||
Cooper Cos., Inc. (The) | 254,432 | 45,306,706 | ||
DexCom, Inc.(1) | 388,267 | 26,235,201 | ||
NuVasive, Inc.(1) | 638,693 | 28,568,738 | ||
Teleflex, Inc. | 1,069,028 | 131,447,683 | ||
231,558,328 | ||||
Health Care Providers and Services — 3.7% | ||||
AmerisourceBergen Corp. | 626,653 | 71,626,438 | ||
Catamaran Corp.(1) | 496,526 | 29,468,818 | ||
Team Health Holdings, Inc.(1) | 932,314 | 55,537,945 | ||
Universal Health Services, Inc., Class B | 499,887 | 58,461,785 | ||
215,094,986 | ||||
Hotels, Restaurants and Leisure — 1.5% | ||||
Jack in the Box, Inc. | 275,120 | 23,872,162 | ||
La Quinta Holdings, Inc.(1) | 1,498,482 | 36,083,447 | ||
Papa John's International, Inc. | 481,051 | 29,522,100 | ||
89,477,709 | ||||
Household Durables — 2.6% | ||||
Harman International Industries, Inc. | 424,511 | 55,347,744 | ||
Jarden Corp.(1) | 621,876 | 31,827,614 | ||
Mohawk Industries, Inc.(1) | 362,802 | 62,946,147 | ||
150,121,505 | ||||
Internet and Catalog Retail — 0.7% | ||||
TripAdvisor, Inc.(1) | 533,291 | 42,924,593 | ||
Internet Software and Services — 3.6% | ||||
CoStar Group, Inc.(1) | 500,888 | 102,396,534 | ||
LinkedIn Corp., Class A(1) | 240,322 | 60,592,386 | ||
Twitter, Inc.(1) | 1,203,724 | 46,897,087 | ||
209,886,007 |
8
Shares | Value | |||
IT Services — 2.3% | ||||
Alliance Data Systems Corp.(1) | 292,647 | $ | 87,006,879 | |
Vantiv, Inc., Class A(1) | 1,145,837 | 44,802,227 | ||
131,809,106 | ||||
Leisure Products — 1.5% | ||||
Brunswick Corp. | 646,524 | 32,352,061 | ||
Polaris Industries, Inc. | 416,675 | 57,067,808 | ||
89,419,869 | ||||
Machinery — 5.6% | ||||
Flowserve Corp. | 939,526 | 54,990,457 | ||
Ingersoll-Rand plc | 937,076 | 61,697,084 | ||
Middleby Corp.(1) | 1,159,313 | 117,484,780 | ||
Snap-On, Inc. | 326,597 | 48,842,581 | ||
WABCO Holdings, Inc.(1) | 367,112 | 45,687,088 | ||
328,701,990 | ||||
Media — 1.8% | ||||
Charter Communications, Inc., Class A(1) | 568,377 | 106,320,602 | ||
Multiline Retail — 1.7% | ||||
Burlington Stores, Inc.(1) | 588,966 | 30,372,977 | ||
Dollar Tree, Inc.(1) | 934,067 | 71,372,059 | ||
101,745,036 | ||||
Oil, Gas and Consumable Fuels — 3.9% | ||||
Antero Resources Corp.(1) | 1,203,895 | 53,344,588 | ||
Cabot Oil & Gas Corp. | 935,216 | 31,629,005 | ||
Concho Resources, Inc.(1) | 686,299 | 86,926,631 | ||
Gulfport Energy Corp.(1) | 631,202 | 30,891,026 | ||
Oasis Petroleum, Inc.(1) | 1,305,984 | 23,429,353 | ||
226,220,603 | ||||
Pharmaceuticals — 3.3% | ||||
Endo International plc(1) | 937,151 | 78,781,599 | ||
Pacira Pharmaceuticals, Inc.(1) | 351,780 | 24,089,894 | ||
Zoetis, Inc. | 1,969,510 | 87,485,634 | ||
190,357,127 | ||||
Professional Services — 1.4% | ||||
Nielsen NV | 1,802,459 | 81,002,507 | ||
Real Estate Management and Development — 1.5% | ||||
Jones Lang LaSalle, Inc. | 516,984 | 85,850,363 | ||
Road and Rail — 3.7% | ||||
Canadian Pacific Railway Ltd., New York Shares | 640,101 | 121,990,449 | ||
J.B. Hunt Transport Services, Inc. | 550,662 | 48,017,726 | ||
Kansas City Southern | 445,860 | 45,696,191 | ||
215,704,366 | ||||
Semiconductors and Semiconductor Equipment — 3.4% | ||||
Altera Corp. | 804,825 | 33,545,106 | ||
Avago Technologies Ltd. | 833,225 | 97,387,338 | ||
Freescale Semiconductor Ltd.(1) | 765,568 | 29,926,053 | ||
NXP Semiconductors NV(1) | 404,933 | 38,922,160 | ||
199,780,657 | ||||
Software — 7.0% | ||||
Electronic Arts, Inc.(1) | 3,428,104 | 199,138,561 |
9
Shares | Value | |||
Intuit, Inc. | 1,076,907 | $ | 108,046,079 | |
NetSuite, Inc.(1) | 358,689 | 34,279,908 | ||
Splunk, Inc.(1) | 607,499 | 40,304,521 | ||
Tyler Technologies, Inc.(1) | 232,132 | 28,308,498 | ||
410,077,567 | ||||
Specialty Retail — 6.4% | ||||
Advance Auto Parts, Inc. | 285,462 | 40,821,066 | ||
AutoZone, Inc.(1) | 70,812 | 47,632,400 | ||
Restoration Hardware Holdings, Inc.(1) | 333,611 | 28,747,260 | ||
Sally Beauty Holdings, Inc.(1) | 1,451,068 | 45,287,832 | ||
Signet Jewelers Ltd. | 709,102 | 95,111,851 | ||
Tractor Supply Co. | 796,733 | 68,566,842 | ||
Ulta Salon Cosmetics & Fragrance, Inc.(1) | 303,146 | 45,802,329 | ||
371,969,580 | ||||
Textiles, Apparel and Luxury Goods — 3.8% | ||||
Hanesbrands, Inc. | 2,783,540 | 86,512,423 | ||
Kate Spade & Co.(1) | 1,066,535 | 34,875,695 | ||
Lululemon Athletica, Inc.(1) | 467,306 | 29,739,354 | ||
Under Armour, Inc., Class A(1) | 887,822 | 68,850,596 | ||
219,978,068 | ||||
Wireless Telecommunication Services — 3.0% | ||||
SBA Communications Corp., Class A(1) | 1,511,540 | 175,066,563 | ||
TOTAL COMMON STOCKS (Cost $4,247,106,723) | 5,693,690,912 | |||
TEMPORARY CASH INVESTMENTS — 2.1% | ||||
Repurchase Agreement, Bank of America Merrill Lynch, (collateralized by various U.S. Treasury obligations, 1.375%, 4/30/20, valued at $20,467,329), in a joint trading account at 0.08%, dated 4/30/15, due 5/1/15 (Delivery value $20,111,583) | 20,111,538 | |||
Repurchase Agreement, Credit Suisse First Boston, Inc., (collateralized by various U.S. Treasury obligations, 1.50%, 12/31/18, valued at $49,132,266), in a joint trading account at 0.03%, dated 4/30/15, due 5/1/15 (Delivery value $48,267,730) | 48,267,690 | |||
Repurchase Agreement, Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 3.625%, 2/15/44, valued at $57,475,413), at 0.01%, dated 4/30/15, due 5/1/15 (Delivery value $56,344,016) | 56,344,000 | |||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $124,723,228) | 124,723,228 | |||
TOTAL INVESTMENT SECURITIES — 99.5% (Cost $4,371,829,951) | 5,818,414,140 | |||
OTHER ASSETS AND LIABILITIES — 0.5% | 29,404,976 | |||
TOTAL NET ASSETS — 100.0% | $ | 5,847,819,116 |
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS | ||||||||
Currency Purchased | Currency Sold | Counterparty | Settlement Date | Unrealized Appreciation (Depreciation) | ||||
CAD | 3,378,174 | USD | 2,808,664 | JPMorgan Chase Bank N.A. | 5/29/15 | $ | (9,756 | ) |
USD | 117,165,447 | CAD | 141,773,706 | JPMorgan Chase Bank N.A. | 5/29/15 | (297,898 | ) | |
$ | (307,654 | ) |
10
NOTES TO SCHEDULE OF INVESTMENTS | ||
CAD | - | Canadian Dollar |
USD | - | United States Dollar |
(1) | Non-income producing. |
See Notes to Financial Statements.
11
Statement of Assets and Liabilities |
APRIL 30, 2015 (UNAUDITED) | |||
Assets | |||
Investment securities, at value (cost of $4,371,829,951) | $ | 5,818,414,140 | |
Cash | 55,330 | ||
Foreign currency holdings, at value (cost of $17,853) | 14,438 | ||
Receivable for investments sold | 209,147,909 | ||
Receivable for capital shares sold | 5,918,991 | ||
Dividends and interest receivable | 1,002,703 | ||
6,034,553,511 | |||
Liabilities | |||
Payable for investments purchased | 175,486,823 | ||
Payable for capital shares redeemed | 5,759,028 | ||
Unrealized depreciation on forward foreign currency exchange contracts | 307,654 | ||
Accrued management fees | 4,859,807 | ||
Distribution and service fees payable | 321,083 | ||
186,734,395 | |||
Net Assets | $ | 5,847,819,116 | |
Net Assets Consist of: | |||
Capital (par value and paid-in surplus) | $ | 3,889,034,718 | |
Accumulated net investment loss | (45,660,685 | ) | |
Undistributed net realized gain | 558,131,832 | ||
Net unrealized appreciation | 1,446,313,251 | ||
$ | 5,847,819,116 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | ||||
Investor Class, $0.01 Par Value | $4,534,982,829 | 181,171,737 | $25.03 | |||
Institutional Class, $0.01 Par Value | $162,124,241 | 6,220,764 | $26.06 | |||
A Class, $0.01 Par Value | $856,791,217 | 36,028,791 | $23.78* | |||
B Class, $0.01 Par Value | $2,559,121 | 111,548 | $22.94 | |||
C Class, $0.01 Par Value | $132,726,590 | 6,387,232 | $20.78 | |||
R Class, $0.01 Par Value | $62,097,752 | 2,590,961 | $23.97 | |||
R6 Class, $0.01 Par Value | $96,537,366 | 3,693,804 | $26.13 |
*Maximum offering price $25.23 (net asset value divided by 0.9425).
See Notes to Financial Statements.
12
Statement of Operations |
FOR THE SIX MONTHS ENDED APRIL 30, 2015 (UNAUDITED) | |||
Investment Income (Loss) | |||
Income: | |||
Dividends (net of foreign taxes withheld of $174,778) | $ | 17,296,684 | |
Interest | 7,326 | ||
17,304,010 | |||
Expenses: | |||
Management fees | 28,622,863 | ||
Distribution and service fees: | |||
A Class | 1,067,759 | ||
B Class | 12,755 | ||
C Class | 645,503 | ||
R Class | 145,359 | ||
Directors' fees and expenses | 104,315 | ||
Other expenses | 296 | ||
30,598,850 | |||
Net investment income (loss) | (13,294,840 | ) | |
Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investment transactions | 561,306,825 | ||
Futures contract transactions | 2,754,731 | ||
Foreign currency transactions | 6,467,807 | ||
570,529,363 | |||
Change in net unrealized appreciation (depreciation) on: | |||
Investments | (55,167,634 | ) | |
Translation of assets and liabilities in foreign currencies | (844,140 | ) | |
(56,011,774 | ) | ||
Net realized and unrealized gain (loss) | 514,517,589 | ||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 501,222,749 |
See Notes to Financial Statements.
13
Statement of Changes in Net Assets |
SIX MONTHS ENDED APRIL 30, 2015 (UNAUDITED) AND YEAR ENDED OCTOBER 31, 2014 | ||||||
Increase (Decrease) in Net Assets | April 30, 2015 | October 31, 2014 | ||||
Operations | ||||||
Net investment income (loss) | $ | (13,294,840 | ) | $ | (35,891,230 | ) |
Net realized gain (loss) | 570,529,363 | 968,944,726 | ||||
Change in net unrealized appreciation (depreciation) | (56,011,774 | ) | (464,877,475 | ) | ||
Net increase (decrease) in net assets resulting from operations | 501,222,749 | 468,176,021 | ||||
Distributions to Shareholders | ||||||
From net realized gains: | ||||||
Investor Class | (627,197,365 | ) | (377,362,029 | ) | ||
Institutional Class | (26,142,114 | ) | (30,282,537 | ) | ||
A Class | (127,268,570 | ) | (140,744,405 | ) | ||
B Class | (380,363 | ) | (416,601 | ) | ||
C Class | (21,063,349 | ) | (19,841,840 | ) | ||
R Class | (8,236,815 | ) | (7,088,192 | ) | ||
R6 Class | (7,912,123 | ) | (9,153 | ) | ||
Decrease in net assets from distributions | (818,200,699 | ) | (575,744,757 | ) | ||
Capital Share Transactions | ||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | 401,125,712 | 1,321,732,036 | ||||
Net increase (decrease) in net assets | 84,147,762 | 1,214,163,300 | ||||
Net Assets | ||||||
Beginning of period | 5,763,671,354 | 4,549,508,054 | ||||
End of period | $ | 5,847,819,116 | $ | 5,763,671,354 | ||
Accumulated net investment loss | $ | (45,660,685 | ) | $ | (32,365,845 | ) |
See Notes to Financial Statements.
14
Notes to Financial Statements |
APRIL 30, 2015 (UNAUDITED)
1. Organization
American Century Mutual Funds, Inc. (the corporation) is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company and is organized as a Maryland corporation. Heritage Fund (the fund) is one fund in a series issued by the corporation. The fund is diversified as defined under the 1940 Act. The fund's investment objective is to seek long-term capital growth.
The fund offers the Investor Class, the Institutional Class, the A Class, the B Class, the C Class, the R Class and the R6 Class. The A Class may incur an initial sales charge. The A Class, B Class and C Class may be subject to a contingent deferred sales charge. The share classes differ principally in their respective sales charges and distribution and shareholder servicing expenses and arrangements. The Institutional Class and R6 Class shareholders do not require the same level of shareholder and administrative services from American Century Investment Management, Inc. (ACIM) (the investment advisor) as shareholders of other classes. In addition, financial intermediaries do not receive any service, distribution or administrative fees for the R6 Class. As a result, the Institutional Class and R6 Class are charged lower unified management fees.
2. Significant Accounting Policies
The following is a summary of significant accounting policies consistently followed by the fund in preparation of its financial statements. The fund is an investment company and follows accounting and reporting guidance in accordance with accounting principles generally accepted in the United States of America. This may require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from these estimates. Management evaluated the impact of events or transactions occurring through the date the financial statements were issued that would merit recognition or disclosure.
Investment Valuations — The fund determines the fair value of its investments and computes its net asset value per share at 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. The Board of Directors has adopted valuation policies and procedures to guide the investment advisor in the fund’s investment valuation process and to provide methodologies for the oversight of the fund’s pricing function.
Equity securities that are listed or traded on a domestic securities exchange are valued at the last reported sales price or at the official closing price as provided by the exchange. Equity securities traded on foreign securities exchanges are generally valued at the closing price of such securities on the exchange where primarily traded or at the close of the NYSE, if that is earlier. If no last sales price is reported, or if local convention or regulation so provides, the mean of the latest bid and asked prices may be used. Securities traded over-the-counter are valued at the mean of the latest bid and asked prices, the last sales price, or the official closing price. Equity securities initially expressed in local currencies are translated into U.S. dollars at the mean of the appropriate currency exchange rate at the close of the NYSE as provided by an independent pricing service.
Fixed income securities maturing within 60 days at the time of purchase may be valued at cost, plus or minus any amortized discount or premium or at the evaluated mean as provided by an independent pricing service. Evaluated mean prices are commonly derived through utilization of market models, which may consider, among other factors: trade data, quotations from 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.
Open-end management investment companies are valued at the reported net asset value per share. Repurchase agreements are valued at cost, which approximates fair value. Exchange-traded futures contracts are valued at the settlement price as provided by the appropriate clearing corporation. Forward foreign currency exchange contracts are valued at the mean of the appropriate forward exchange rate at the close of the NYSE as provided by an independent pricing service.
If the fund determines that the market price for an investment is not readily available or the valuation methods mentioned above do not reflect an investment’s fair value, such investment is valued as determined in good faith by the Board of Directors or its delegate, in accordance with policies and procedures adopted by the
15
Board of Directors. In its determination of fair value, the fund may review several factors including, but not limited to, market information regarding the specific investment or comparable investments and correlation with other investment types, futures indices or general market indicators. Circumstances that may cause the fund to use these procedures to value an investment include, but are not limited to: an investment has been declared in default or is distressed; trading in a security has been suspended during the trading day or a security is not actively trading on its principal exchange; prices received from a regular pricing source are deemed unreliable; or there is a foreign market holiday and no trading occurred.
The fund monitors for significant events occurring after the close of an investment’s primary exchange but before the fund’s net asset value per share is determined. Significant events may include, but are not limited to: corporate announcements and transactions; governmental action and political unrest that could impact a specific investment or an investment sector; or armed conflicts, natural disasters and similar events that could affect investments in a specific country or region. The fund also monitors for significant fluctuations between domestic and foreign markets, as evidenced by the U.S. market or such other indicators that the Board of Directors, or its delegate, deems appropriate. If significant fluctuations in foreign markets are identified, the fund may apply a model-derived factor to the closing price of equity securities traded on foreign securities exchanges. The factor is based on observable market data as provided by an independent pricing service.
Security Transactions — Security transactions are accounted for as of the trade date. Net realized gains and losses are determined on the identified cost basis, which is also used for federal income tax purposes.
Investment Income — Dividend income less foreign taxes withheld, if any, is recorded as of the ex-dividend date. Distributions received on securities that represent a return of capital or long-term capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The fund may estimate the components of distributions received that may be considered nontaxable distributions or long-term capital gain distributions for income tax purposes. Interest income is recorded on the accrual basis and includes accretion of discounts and amortization of premiums.
Foreign Currency Translations — All assets and liabilities initially expressed in foreign currencies are translated into U.S. dollars at prevailing exchange rates at period end. The fund may enter into spot foreign currency exchange contracts to facilitate transactions denominated in a foreign currency. Purchases and sales of investment securities, dividend and interest income, spot foreign currency exchange contracts, and expenses are translated at the rates of exchange prevailing on the respective dates of such transactions. Net realized and unrealized foreign currency exchange gains or losses related to investment securities are a component of net realized gain (loss) on investment transactions and change in net unrealized appreciation (depreciation) on investments, respectively.
Repurchase Agreements — The fund may enter into repurchase agreements with institutions that ACIM has determined are creditworthy pursuant to criteria adopted by the Board of Directors. The fund requires that the collateral, represented by securities, received in a repurchase transaction be transferred to the custodian in a manner sufficient to enable the fund to obtain those securities in the event of a default under the repurchase agreement. ACIM monitors, on a daily basis, the securities transferred to ensure the value, including accrued interest, of the securities under each repurchase agreement is equal to or greater than amounts owed to the fund under each repurchase agreement.
Joint Trading Account — Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the fund, along with certain other funds in the American Century Investments family of funds, may transfer uninvested cash balances into a joint trading account. These balances are invested in one or more repurchase agreements that are collateralized by U.S. Treasury or Agency obligations.
Segregated Assets — In accordance with the 1940 Act, the fund segregates assets on its books and records
to cover futures contracts. ACIM monitors, on a daily basis, the securities segregated to ensure the fund
designates a sufficient amount of liquid assets, marked-to-market daily. The fund may also receive assets or
be required to pledge assets at the custodian bank or with a broker for margin requirements on futures
contracts.
Income Tax Status — It is the fund’s policy to distribute substantially all net investment income and net realized gains to shareholders and to otherwise qualify as a regulated investment company under provisions of the Internal Revenue Code. Accordingly, no provision has been made for income taxes. The fund files U.S. federal, state, local and non-U.S. tax returns as applicable. The fund's tax returns are subject to examination by the relevant taxing authority until expiration of the applicable statute of limitations, which is generally three years from the date of filing but can be longer in certain jurisdictions. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination
16
and for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Multiple Class — All shares of the fund represent an equal pro rata interest in the net assets of the class to which such shares belong, and have identical voting, dividend, liquidation and other rights and the same terms and conditions, except for class specific expenses and exclusive rights to vote on matters affecting only individual classes. Income, non-class specific expenses, and realized and unrealized capital gains and losses of the fund are allocated to each class of shares based on their relative net assets.
Distributions to Shareholders — Distributions from net investment income and net realized gains, if any, are generally declared and paid annually. The fund may elect to treat a portion of its payment to a redeeming shareholder, which represents the pro rata share of undistributed net investment income and net realized gains, as a distribution for federal income tax purposes (tax equalization).
Indemnifications — Under the corporation’s organizational documents, its officers and directors are indemnified against certain liabilities arising out of the performance of their duties to the fund. In addition, in the normal course of business, the fund enters into contracts that provide general indemnifications. The maximum exposure under these arrangements is unknown as this would involve future claims that may be made against a fund. The risk of material loss from such claims is considered by management to be remote.
3. Fees and Transactions with Related Parties
Certain officers and directors of the corporation are also officers and/or directors of American Century Companies, Inc. (ACC). The corporation’s investment advisor, ACIM, the corporation's distributor, American Century Investment Services, Inc. (ACIS), and the corporation’s transfer agent, American Century Services, LLC, are wholly owned, directly or indirectly, by ACC.
Management Fees — The corporation has entered into a management agreement with ACIM, under which ACIM provides the fund with investment advisory and management services in exchange for a single, unified management fee (the fee) per class. The agreement provides that all expenses of managing and operating the fund, except distribution and service fees, brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), and extraordinary expenses, will be paid by ACIM. The fee is computed and accrued daily based on each class's daily net assets and paid monthly in arrears. The annual management fee is 1.00% for the Investor Class, A Class, B Class, C Class and R Class, 0.80% for the Institutional Class and 0.65% for the R6 Class.
Distribution and Service Fees — The Board of Directors has adopted a separate Master Distribution and Individual Shareholder Services Plan for each of the A Class, B Class, C Class and R Class (collectively the plans), pursuant to Rule 12b-1 of the 1940 Act. The plans provide that the A Class will pay ACIS an annual distribution and service fee of 0.25%. The plans provide that the B Class and C Class will each pay ACIS an annual distribution and service fee of 1.00%, of which 0.25% is paid for individual shareholder services and 0.75% is paid for distribution services. The plans provide that the R Class will pay ACIS an annual distribution and service fee of 0.50%. The fees are computed and accrued daily based on each class’s daily net assets and paid monthly in arrears. The fees are used to pay financial intermediaries for distribution and individual shareholder services. Fees incurred under the plans during the six months ended April 30, 2015 are detailed in the Statement of Operations.
Directors' Fees and Expenses — The Board of Directors is responsible for overseeing the investment advisor’s management and operations of the fund. The directors receive detailed information about the fund and its investment advisor regularly throughout the year, and meet at least quarterly with management of the investment advisor to review reports about fund operations. The fund’s officers do not receive compensation from the fund.
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the six months ended April 30, 2015 were $1,707,909,894 and $2,213,293,867, respectively.
17
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended April 30, 2015 | Year ended October 31, 2014 | |||||||||
Shares | Amount | Shares | Amount | |||||||
Investor Class/Shares Authorized | 1,150,000,000 | 1,150,000,000 | ||||||||
Sold | 9,669,182 | $ | 241,013,575 | 19,443,145 | $ | 506,861,274 | ||||
Issued in connection with reorganization (Note 10) | — | — | 57,086,650 | 1,417,578,208 | ||||||
Issued in reinvestment of distributions | 27,126,056 | 608,166,180 | 14,781,644 | 364,367,525 | ||||||
Redeemed | (21,064,620 | ) | (528,938,841 | ) | (31,920,610 | ) | (828,419,741 | ) | ||
15,730,618 | 320,240,914 | 59,390,829 | 1,460,387,266 | |||||||
Institutional Class/Shares Authorized | 120,000,000 | 120,000,000 | ||||||||
Sold | 713,826 | 18,626,062 | 2,215,202 | 59,672,546 | ||||||
Issued in connection with reorganization (Note 10) | — | — | 2,456,543 | 62,960,928 | ||||||
Issued in reinvestment of distributions | 1,077,578 | 25,139,900 | 1,186,665 | 30,200,632 | ||||||
Redeemed | (2,721,766 | ) | (70,892,027 | ) | (7,034,757 | ) | (189,801,647 | ) | ||
(930,362 | ) | (27,126,065 | ) | (1,176,347 | ) | (36,967,541 | ) | |||
A Class/Shares Authorized | 510,000,000 | 510,000,000 | ||||||||
Sold | 4,550,375 | 108,478,144 | 6,854,460 | 171,181,761 | ||||||
Issued in connection with reorganization (Note 10) | — | — | 2,306,433 | 55,013,464 | ||||||
Issued in reinvestment of distributions | 5,811,176 | 123,894,272 | 5,786,878 | 137,033,276 | ||||||
Redeemed | (8,061,701 | ) | (189,176,748 | ) | (20,982,643 | ) | (525,622,531 | ) | ||
2,299,850 | 43,195,668 | (6,034,872 | ) | (162,394,030 | ) | |||||
B Class/Shares Authorized | 35,000,000 | 35,000,000 | ||||||||
Sold | 2,954 | 67,036 | 3,351 | 85,668 | ||||||
Issued in reinvestment of distributions | 16,976 | 350,214 | 16,762 | 388,880 | ||||||
Redeemed | (13,163 | ) | (313,638 | ) | (33,378 | ) | (817,653 | ) | ||
6,767 | 103,612 | (13,265 | ) | (343,105 | ) | |||||
C Class/Shares Authorized | 85,000,000 | 85,000,000 | ||||||||
Sold | 625,358 | 12,751,529 | 742,832 | 16,581,958 | ||||||
Issued in connection with reorganization (Note 10) | — | — | 5,312 | 114,258 | ||||||
Issued in reinvestment of distributions | 956,169 | 17,861,230 | 767,435 | 16,392,408 | ||||||
Redeemed | (759,089 | ) | (15,777,626 | ) | (1,477,752 | ) | (33,088,095 | ) | ||
822,438 | 14,835,133 | 37,827 | 529 | |||||||
R Class/Shares Authorized | 40,000,000 | 40,000,000 | ||||||||
Sold | 582,299 | 13,998,225 | 554,024 | 13,999,728 | ||||||
Issued in connection with reorganization (Note 10) | — | — | 568,103 | 13,685,676 | ||||||
Issued in reinvestment of distributions | 382,413 | 8,225,706 | 296,453 | 7,088,192 | ||||||
Redeemed | (623,136 | ) | (15,088,573 | ) | (1,121,755 | ) | (27,935,786 | ) | ||
341,576 | 7,135,358 | 296,825 | 6,837,810 | |||||||
R6 Class/Shares Authorized | 50,000,000 | 50,000,000 | ||||||||
Sold | 2,078,429 | 54,517,672 | 2,267,161 | 60,858,580 | ||||||
Issued in reinvestment of distributions | 338,414 | 7,912,123 | 359 | 9,153 | ||||||
Redeemed | (748,782 | ) | (19,688,703 | ) | (244,291 | ) | (6,656,626 | ) | ||
1,668,061 | 42,741,092 | 2,023,229 | 54,211,107 | |||||||
Net increase (decrease) | 19,938,948 | $ | 401,125,712 | 54,524,226 | $ | 1,321,732,036 |
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6. Fair Value Measurements
The fund’s investments valuation process is based on several considerations and may use multiple inputs to determine the fair value of the investments held by the fund. In conformity with accounting principles generally accepted in the United States of America, the inputs used to determine a valuation are classified into three broad levels.
• | Level 1 valuation inputs consist of unadjusted quoted prices in an active market for identical investments. |
• | Level 2 valuation inputs consist of direct or indirect observable market data (including quoted prices for comparable investments, evaluations of subsequent market events, interest rates, prepayment speeds, credit risk, etc.). These inputs also consist of quoted prices for identical investments initially expressed in local currencies that are adjusted through translation into U.S. dollars. |
• | Level 3 valuation inputs consist of unobservable data (including a fund’s own assumptions). |
The level classification is based on the lowest level input that is significant to the fair valuation measurement. The valuation inputs are not necessarily an indication of the risks associated with investing in these securities or other financial instruments. There were no significant transfers between levels during the period.
The following is a summary of the level classifications as of period end. The Schedule of Investments provides additional information on the fund’s portfolio holdings.
Level 1 | Level 2 | Level 3 | ||||||
Assets | ||||||||
Investment Securities | ||||||||
Common Stocks | $ | 5,693,690,912 | — | — | ||||
Temporary Cash Investments | — | $ | 124,723,228 | — | ||||
$ | 5,693,690,912 | $ | 124,723,228 | — | ||||
Liabilities | ||||||||
Other Financial Instruments | ||||||||
Forward Foreign Currency Exchange Contracts | — | $ | (307,654 | ) | — |
7. Derivative Instruments
Equity Price Risk — The fund is subject to equity price risk in the normal course of pursuing its investment objectives. A fund may enter into futures contracts based on an equity index in order to manage its exposure to changes in market conditions. A fund may purchase futures contracts to gain exposure to increases in market value or sell futures contracts to protect against a decline in market value. Upon entering into a futures contract, a fund is required to deposit either cash or securities in an amount equal to a certain percentage of the contract value (initial margin). Subsequent payments (variation margin) are made or received daily, in cash, by a fund. The variation margin is equal to the daily change in the contract value and is recorded as unrealized gains and losses. A fund recognizes a realized gain or loss when the contract is closed or expires. Net realized and unrealized gains or losses occurring during the holding period of futures contracts are a component of net realized gain (loss) on futures contract transactions and change in net unrealized appreciation (depreciation) on futures contracts, respectively. One of the risks of entering into futures contracts is the possibility that the change in value of the contract may not correlate with the changes in value of the underlying securities. During the period, the fund infrequently purchased equity price risk derivative instruments for temporary investment purposes.
Foreign Currency Risk — The fund is subject to foreign currency exchange rate risk in the normal course of pursuing its investment objectives. The value of foreign investments held by a fund may be significantly affected by changes in foreign currency exchange rates. The dollar value of a foreign security generally decreases when the value of the dollar rises against the foreign currency in which the security is denominated and tends to increase when the value of the dollar declines against such foreign currency. A fund may enter into forward foreign currency exchange contracts to reduce a fund's exposure to foreign currency exchange rate fluctuations. The net U.S. dollar value of foreign currency underlying all contractual commitments held by a fund and the resulting unrealized appreciation or depreciation are determined daily. Realized gain or loss is recorded upon the termination of the contract. Net realized and unrealized gains or losses occurring during the
19
holding period of forward foreign currency exchange contracts are a component of net realized gain (loss) on foreign currency transactions and change in net unrealized appreciation (depreciation) on translation of assets and liabilities in foreign currencies, respectively. A fund bears the risk of an unfavorable change in the foreign currency exchange rate underlying the forward contract. Additionally, losses, up to the fair value, may arise if the counterparties do not perform under the contract terms. The fund's average U.S. dollar exposure to foreign currency risk derivative instruments held during the period was $109,205,075.
Value of Derivative Instruments as of April 30, 2015 | ||||||||
Asset Derivatives | Liability Derivatives | |||||||
Type of Risk Exposure | Location on Statement of Assets and Liabilities | Value | Location on Statement of Assets and Liabilities | Value | ||||
Foreign Currency Risk | Unrealized appreciation on forward foreign currency exchange contracts | — | Unrealized depreciation on forward foreign currency exchange contracts | $ | 307,654 | |||
Effect of Derivative Instruments on the Statement of Operations for the Six Months Ended April 30, 2015 | ||||||||
Net Realized Gain (Loss) | Change in Net Unrealized Appreciation (Depreciation) | |||||||
Type of Risk Exposure | Location on Statement of Operations | Value | Location on Statement of Operations | Value | ||||
Equity Price Risk | Net realized gain (loss) on futures contract transactions | $ | 2,754,731 | Change in net unrealized appreciation (depreciation) on futures contracts | — | |||
Foreign Currency Risk | Net realized gain (loss) on foreign currency transactions | 6,472,000 | Change in net unrealized appreciation (depreciation) on translation of assets and liabilities in foreign currencies | $ | (849,176 | ) | ||
$ | 9,226,731 | $ | (849,176 | ) |
8. Risk Factors
The fund invests in common stocks of small companies. Because of this, the fund may be subject to greater risk and market fluctuations than a fund investing in larger, more established companies.
9. Federal Tax Information
The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
As of April 30, 2015, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $ | 4,380,699,711 | |
Gross tax appreciation of investments | $ | 1,548,420,224 | |
Gross tax depreciation of investments | (110,705,795 | ) | |
Net tax appreciation (depreciation) of investments | $ | 1,437,714,429 |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales.
As of October 31, 2014, the fund had late-year ordinary loss deferrals of $(31,824,323), which represent certain qualified losses that the fund has elected to treat as having been incurred in the following fiscal year for federal income tax purposes.
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10. Reorganization
On September 12, 2013, the Board of Directors approved an agreement and plan of reorganization (the reorganization), whereby the net assets of Vista Fund (Vista), one fund in a series issued by the corporation, were transferred to Heritage Fund (Heritage) in exchange for shares of Heritage. The purpose of the
transaction was to combine two funds with matching investment objectives and similar underlying securities.
The financial statements and performance history of Heritage survived after the reorganization. The reorganization was effective at the close of the NYSE on December 6, 2013.
The reorganization was accomplished by a tax-free exchange of shares. On December 6, 2013, Vista exchanged its shares for shares of Heritage as follows:
Original Fund/Class | Shares Exchanged | New Fund/Class | Shares Received | ||
Vista – Investor Class | 66,205,582 | Heritage – Investor Class | 57,086,650 | ||
Vista – Institutional Class | 2,836,089 | Heritage – Institutional Class | 2,456,543 | ||
Vista – A Class | 2,682,028 | Heritage – A Class | 2,306,433 | ||
Vista – C Class | 5,555 | Heritage – C Class | 5,312 | ||
Vista – R Class | 668,896 | Heritage – R Class | 568,103 |
The net assets of Vista and Heritage immediately before the reorganization were $1,549,352,534 and $4,468,145,045, respectively. Vista’s unrealized appreciation of $520,936,072 was combined with that of Heritage. Immediately after the reorganization, the combined net assets were $6,017,497,579.
Assuming the reorganization had been completed on November 1, 2013, the beginning of the annual reporting period, the pro forma results of operations for the year ended October 31, 2014 are as follows:
Net investment income (loss) | $ | (36,359,829 | ) |
Net realized and unrealized gain (loss) | 522,241,877 | ||
Net increase (decrease) in net assets resulting from operations | $ | 485,882,048 |
Because the combined investment portfolios have been managed as a single integrated portfolio since the reorganization was completed, it is not practicable to separate the amounts of revenue and earnings of Vista that have been included in the fund’s Statement of Operations since December 6, 2013.
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Financial Highlights |
For a Share Outstanding Throughout the Years Ended October 31 (except as noted) | |||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||
Income From Investment Operations: | Distributions From: | 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 | Net Investment Income | Net Realized Gains | Total Distributions | 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 | |||||||||||||||
2015(3) | $26.89 | (0.05) | 2.04 | 1.99 | — | (3.85) | (3.85) | $25.03 | 9.07% | 1.00%(4) | (0.40)%(4) | 30% | $4,534,983 | ||
2014 | $28.45 | (0.14) | 2.18 | 2.04 | — | (3.60) | (3.60) | $26.89 | 8.33% | 1.00% | (0.55)% | 73% | $4,449,377 | ||
2013 | $22.44 | (0.07) | 6.55 | 6.48 | — | (0.47) | (0.47) | $28.45 | 29.43% | 1.00% | (0.29)% | 70% | $3,016,930 | ||
2012 | $20.51 | (0.06) | 1.99 | 1.93 | — | — | — | $22.44 | 9.41% | 1.01% | (0.28)% | 72% | $2,499,048 | ||
2011 | $19.21 | (0.07) | 1.37 | 1.30 | — | — | — | $20.51 | 6.77% | 1.01% | (0.35)% | 95% | $2,395,881 | ||
2010 | $14.32 | (0.07) | 4.96 | 4.89 | — | — | — | $19.21 | 34.15% | 1.01% | (0.45)% | 114% | $1,886,729 | ||
Institutional Class | |||||||||||||||
2015(3) | $27.81 | (0.03) | 2.13 | 2.10 | — | (3.85) | (3.85) | $26.06 | 9.17% | 0.80%(4) | (0.20)%(4) | 30% | $162,124 | ||
2014 | $29.25 | (0.09) | 2.25 | 2.16 | — | (3.60) | (3.60) | $27.81 | 8.53% | 0.80% | (0.35)% | 73% | $198,895 | ||
2013 | $23.01 | (0.02) | 6.73 | 6.71 | — | (0.47) | (0.47) | $29.25 | 29.70% | 0.80% | (0.09)% | 70% | $243,548 | ||
2012 | $20.99 | (0.01) | 2.03 | 2.02 | — | — | — | $23.01 | 9.62% | 0.81% | (0.08)% | 72% | $187,984 | ||
2011 | $19.62 | (0.03) | 1.40 | 1.37 | — | — | — | $20.99 | 6.98% | 0.81% | (0.15)% | 95% | $156,681 | ||
2010 | $14.60 | (0.04) | 5.07 | 5.03 | (0.01) | — | (0.01) | $19.62 | 34.44% | 0.81% | (0.25)% | 114% | $115,261 |
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For a Share Outstanding Throughout the Years Ended October 31 (except as noted) | |||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||
Income From Investment Operations: | Distributions From: | 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 | Net Investment Income | Net Realized Gains | Total Distributions | 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) | |||
A Class | |||||||||||||||
2015(3) | $25.78 | (0.08) | 1.93 | 1.85 | — | (3.85) | (3.85) | $23.78 | 8.94% | 1.25%(4) | (0.65)%(4) | 30% | $856,791 | ||
2014 | $27.48 | (0.20) | 2.10 | 1.90 | — | (3.60) | (3.60) | $25.78 | 8.04% | 1.25% | (0.80)% | 73% | $869,381 | ||
2013 | $21.74 | (0.13) | 6.34 | 6.21 | — | (0.47) | (0.47) | $27.48 | 29.13% | 1.25% | (0.54)% | 70% | $1,092,574 | ||
2012 | $19.92 | (0.11) | 1.93 | 1.82 | — | — | — | $21.74 | 9.08% | 1.26% | (0.53)% | 72% | $972,795 | ||
2011 | $18.70 | (0.12) | 1.34 | 1.22 | — | — | — | $19.92 | 6.58% | 1.26% | (0.60)% | 95% | $973,051 | ||
2010 | $13.98 | (0.11) | 4.83 | 4.72 | — | — | — | $18.70 | 33.76% | 1.26% | (0.70)% | 114% | $803,692 | ||
B Class | |||||||||||||||
2015(3) | $25.09 | (0.16) | 1.86 | 1.70 | — | (3.85) | (3.85) | $22.94 | 8.54% | 2.00%(4) | (1.40)%(4) | 30% | $2,559 | ||
2014 | $27.02 | (0.38) | 2.05 | 1.67 | — | (3.60) | (3.60) | $25.09 | 7.23% | 2.00% | (1.55)% | 73% | $2,629 | ||
2013 | $21.54 | (0.30) | 6.25 | 5.95 | — | (0.47) | (0.47) | $27.02 | 28.17% | 2.00% | (1.29)% | 70% | $3,189 | ||
2012 | $19.89 | (0.27) | 1.92 | 1.65 | — | — | — | $21.54 | 8.30% | 2.01% | (1.28)% | 72% | $3,051 | ||
2011 | $18.81 | (0.28) | 1.36 | 1.08 | — | — | — | $19.89 | 5.74% | 2.01% | (1.35)% | 95% | $3,574 | ||
2010 | $14.16 | (0.24) | 4.89 | 4.65 | — | — | — | $18.81 | 32.84% | 2.01% | (1.45)% | 114% | $3,997 | ||
C Class | |||||||||||||||
2015(3) | $23.10 | (0.15) | 1.68 | 1.53 | — | (3.85) | (3.85) | $20.78 | 8.55% | 2.00%(4) | (1.40)%(4) | 30% | $132,727 | ||
2014 | $25.16 | (0.35) | 1.89 | 1.54 | — | (3.60) | (3.60) | $23.10 | 7.25% | 2.00% | (1.55)% | 73% | $128,522 | ||
2013 | $20.09 | (0.28) | 5.82 | 5.54 | — | (0.47) | (0.47) | $25.16 | 28.10% | 2.00% | (1.29)% | 70% | $139,064 | ||
2012 | $18.55 | (0.25) | 1.79 | 1.54 | — | — | — | $20.09 | 8.30% | 2.01% | (1.28)% | 72% | $117,580 | ||
2011 | $17.55 | (0.26) | 1.26 | 1.00 | — | — | — | $18.55 | 5.75% | 2.01% | (1.35)% | 95% | $115,641 | ||
2010 | $13.21 | (0.22) | 4.56 | 4.34 | — | — | — | $17.55 | 32.85% | 2.01% | (1.45)% | 114% | $85,381 |
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For a Share Outstanding Throughout the Years Ended October 31 (except as noted) | |||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||
Income From Investment Operations: | Distributions From: | 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 | Net Investment Income | Net Realized Gains | Total Distributions | 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) | |||
R Class | |||||||||||||||
2015(3) | $25.97 | (0.11) | 1.96 | 1.85 | — | (3.85) | (3.85) | $23.97 | 8.82% | 1.50%(4) | (0.90)%(4) | 30% | $62,098 | ||
2014 | $27.72 | (0.27) | 2.12 | 1.85 | — | (3.60) | (3.60) | $25.97 | 7.80% | 1.50% | (1.05)% | 73% | $58,426 | ||
2013 | $21.99 | (0.20) | 6.40 | 6.20 | — | (0.47) | (0.47) | $27.72 | 28.74% | 1.50% | (0.79)% | 70% | $54,129 | ||
2012 | $20.20 | (0.16) | 1.95 | 1.79 | — | — | — | $21.99 | 8.86% | 1.51% | (0.78)% | 72% | $39,314 | ||
2011 | $19.01 | (0.18) | 1.37 | 1.19 | — | — | — | $20.20 | 6.26% | 1.51% | (0.85)% | 95% | $32,023 | ||
2010 | $14.24 | (0.16) | 4.93 | 4.77 | — | — | — | $19.01 | 33.50% | 1.51% | (0.95)% | 114% | $17,544 | ||
R6 Class | |||||||||||||||
2015(3) | $27.86 | (0.01) | 2.13 | 2.12 | — | (3.85) | (3.85) | $26.13 | 9.24% | 0.65%(4) | (0.05)%(4) | 30% | $96,537 | ||
2014 | $29.25 | (0.07) | 2.28 | 2.21 | — | (3.60) | (3.60) | $27.86 | 8.72% | 0.65% | (0.20)% | 73% | $56,442 | ||
2013(5) | $27.22 | —(6) | 2.03 | 2.03 | — | — | — | $29.25 | 7.46% | 0.65%(4) | (0.07)%(4) | 70%(7) | $74 |
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 and do not reflect applicable sales charges, if any. Total returns for periods less than one year are not annualized. |
(3) | Six months ended April 30, 2015 (unaudited). |
(4) | Annualized. |
(5) | July 26, 2013 (commencement of sale) through October 31, 2013. |
(6) | Per-share amount was less than $0.005. |
(7) | Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended October 31, 2013. |
See Notes to Financial Statements.
24
Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain IRAs are subject to federal income tax withholding, unless you elect not to have withholding apply. Tax will be withheld on the total amount withdrawn even though you may be receiving amounts that are not subject to withholding, such as nondeductible contributions. In such case, excess amounts of withholding could occur. You may adjust your withholding election so that a greater or lesser amount will be withheld.
If you don’t want us to withhold on this amount, you must notify us to not withhold the federal income tax. You may notify us in writing or in certain situations by telephone or through other electronic means. For systematic withdrawals, your withholding election will remain in effect until revoked or changed by filing a new election. You have the right to revoke your election at any time.
Remember, even if you elect not to have income tax withheld, you are liable for paying income tax on the taxable portion of your withdrawal. If you elect not to have income tax withheld or you don’t have enough income tax withheld, you may be responsible for payment of estimated tax. You may incur penalties under the estimated tax rules if your withholding and estimated tax payments are not sufficient. You can reduce or defer the income tax on a distribution by directly or indirectly rolling such distribution over to another IRA or eligible plan. You should consult your tax advisor for additional information.
State tax will be withheld if, at the time of your distribution, your address is within one of the mandatory withholding states and you have federal income tax withheld (or as otherwise required by state law). State taxes will be withheld from your distribution in accordance with the respective state rules.
Distributions you receive from 403(b), 457 and qualified plans are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
A description of the policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund is available without charge, upon request, by calling 1-800-345-2021. It is also available on the "About Us" page of American Century Investments’ website at americancentury.com and on the Securities and Exchange Commission’s website at sec.gov. Information regarding how the investment advisor voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the "About Us" page at americancentury.com. It is also available at sec.gov.
Quarterly Portfolio Disclosure
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-Q. The fund’s Forms N-Q are available on the SEC’s website at sec.gov, and may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The fund also makes its complete schedule of portfolio holdings for the most recent quarter of its fiscal year available on its
website at americancentury.com and, upon request, by calling 1-800-345-2021.
25
Notes |
26
Notes |
27
Notes |
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![]() | ||
Contact Us | americancentury.com | |
Automated Information Line | 1-800-345-8765 | |
Investor Services Representative | 1-800-345-2021 or 816-531-5575 | |
Investors Using Advisors | 1-800-378-9878 | |
Business, Not-For-Profit, Employer-Sponsored Retirement Plans | 1-800-345-3533 | |
Banks and Trust Companies, Broker-Dealers, Financial Professionals, Insurance Companies | 1-800-345-6488 | |
Telecommunications Relay Service for the Deaf | 711 | |
American Century Mutual Funds, Inc. | ||
Investment Advisor: American Century Investment Management, Inc. Kansas City, Missouri | ||
This report and the statements it contains are submitted for the general information of our shareholders. The report is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus. | ||
©2015 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-85691 1506 |
SEMIANNUAL REPORT | APRIL 30, 2015 |
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New Opportunities Fund
Table of Contents |
Any opinions expressed in this report reflect those of the author as of the date of the report, and do not necessarily represent the opinions of American Century Investments® or any other person in the American Century Investments organization. Any such opinions are subject to change at any time based upon market or other conditions and American Century Investments disclaims any responsibility to update such opinions. These opinions may not be relied upon as investment advice and, because investment decisions made by American Century Investments funds are based on numerous factors, may not be relied upon as an indication of trading intent on behalf of any American Century Investments fund. Security examples are used for representational purposes only and are not intended as recommendations to purchase or sell securities. Performance information for comparative indices and securities is provided to American Century Investments by third party vendors. To the best of American Century Investments’ knowledge, such information is accurate at the time of printing.
President’s Letter |
![]() | Dear Investor: Thank you for reviewing this semiannual report for the six months ended April 30, 2015. It provides a macroeconomic and financial market overview (below), followed by fund performance, a schedule of fund investments, and other financial information. For additional commentary and updated information on fund performance, key factors that affected asset returns, and other insights regarding the investment markets, we encourage you to visit our website, americancentury.com. |
Jonathan Thomas |
Global Divergence in Monetary Policies Influenced Investor Behavior
The six-month reporting period saw big swings in market returns, triggered in part by central bank moves. In October 2014, just before the period started, the U.S. Federal Reserve ended its latest bond-buying program (quantitative easing, QE). As QE wound down, the U.S. economy enjoyed 5% annualized growth (after inflation) in the third quarter of 2014, the highest rate since the third quarter of 2003. But while QE was ending in the U.S., other major central banks were starting or increasing QE as their economies faltered. A “global divergence” of economic growth and monetary policies opened between the U.S. and most of the rest of the developed world.
This divergence helped fuel increased demand for the U.S. dollar and U.S. dollar-denominated assets, and put downward pressure on commodities prices, most notably oil. Though the resulting dollar rally and oil price decline reversed somewhat in April 2015, the dollar remained 9% higher for the reporting period, as measured by the U.S. Dollar Index, while oil remained more than 25% lower, as measured by both Brent and West Texas Intermediate crude oil futures. In this environment, U.S. stocks and bonds posted moderate gains—the S&P 500 Index and the Barclays U.S. Aggregate Bond Index returned 4.40% and 2.06%, respectively.
We expect monetary policy divergence between the U.S. and other major developed economies to continue this year, accompanied by market volatility. This could present both challenges and opportunities for active investment managers. Upward pressures on inflation and interest rates could develop as the massive amount of global monetary stimulus in progress takes hold and economies improve. But we believe lingering constraining forces will likely keep inflation and interest rates relatively low for the next six months. In this environment, we continue to believe in a disciplined, diversified, long-term investment approach, using professionally managed stock and bond portfolios to meet financial goals. We appreciate your continued trust in us.
Sincerely,
![](https://capedge.com/proxy/N-CSRS/0000100334-15-000051/jonathanthomassig.jpg)
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
2
Performance |
Total Returns as of April 30, 2015 | |||||||
Average Annual Returns | |||||||
Ticker Symbol | 6 months(1) | 1 year | 5 years | 10 years | Since Inception | Inception Date | |
Investor Class | TWNOX | 8.04%(2) | 15.02%(2) | 14.37% | 10.09% | 8.05% | 12/26/96 |
Russell 2500 Growth Index | — | 8.31% | 15.54% | 15.67% | 11.02% | 8.24% | — |
Institutional Class | TWNIX | 8.14%(2) | 15.26%(2) | 14.61% | — | 15.80% | 3/1/10 |
A Class | TWNAX | 3/1/10 | |||||
No sales charge* | 7.97%(2) | 14.82%(2) | 14.09% | — | 15.30% | ||
With sales charge* | 1.72%(2) | 8.24%(2) | 12.74% | — | 13.98% | ||
C Class | TWNCX | 3/1/10 | |||||
No sales charge* | 7.52%(2) | 13.86%(2) | 13.22% | — | 14.41% | ||
With sales charge* | 6.52%(2) | 13.86%(2) | 13.22% | — | 14.41% | ||
R Class | TWNRX | 7.79%(2) | 14.51%(2) | 13.78% | — | 14.99% | 3/1/10 |
* Sales charges include initial sales charges and contingent deferred sales charges (CDSCs), as applicable. A Class shares have a 5.75% maximum initial sales charge and may be subject to a maximum CDSC of 1.00%. C Class shares redeemed within 12 months of purchase are subject to a maximum CDSC of 1.00%. The SEC requires that mutual funds provide performance information net of maximum sales charges in all cases where charges could be applied.
(1) | Total returns for periods less than one year are not annualized. |
(2) | Returns would have been lower if a portion of the management fee had not been waived. |
Total Annual Fund Operating Expenses | ||||
Investor Class | Institutional Class | A Class | C Class | R Class |
1.51% | 1.31% | 1.76% | 2.51% | 2.01% |
The total annual fund operating expenses shown is as stated in the fund’s prospectus current as of the date of this report. The prospectus may vary from the expense ratio shown elsewhere in this report because it is based on a different time period, includes acquired fund fees and expenses, and, if applicable, does not include fee waivers or expense reimbursements.
Data presented reflect past performance. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance shown. Investment return and principal value will fluctuate, and redemption value may be more or less than original cost. Data assumes reinvestment of dividends and capital gains, and none of the charts reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. To obtain performance data current to the most recent month end, please call 1-800-345-2021 or visit americancentury.com. For additional information about the fund, please consult the prospectus.
3
Fund Characteristics |
APRIL 30, 2015 | |
Top Ten Holdings | % of net assets |
Middleby Corp. | 2.1% |
CoStar Group, Inc. | 2.0% |
LKQ Corp. | 1.6% |
Signet Jewelers Ltd. | 1.5% |
Hanesbrands, Inc. | 1.4% |
Snap-On, Inc. | 1.3% |
Skechers U.S.A., Inc., Class A | 1.3% |
Vantiv, Inc., Class A | 1.3% |
Signature Bank | 1.2% |
Brunswick Corp. | 1.2% |
Top Five Industries | % of net assets |
Biotechnology | 7.2% |
Specialty Retail | 5.7% |
Software | 5.3% |
Health Care Equipment and Supplies | 4.9% |
Internet Software and Services | 4.7% |
Types of Investments in Portfolio | % of net assets |
Common Stocks | 98.1% |
Temporary Cash Investments | 2.0% |
Other Assets and Liabilities | (0.1)% |
4
Shareholder Fee Example |
Fund shareholders may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption/exchange fees; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in your fund and to compare these costs with the ongoing cost of investing in other mutual funds.
The example is based on an investment of $1,000 made at the beginning of the period and held for the entire period from November 1, 2014 to April 30, 2015.
Actual Expenses
The table provides information about actual account values and actual expenses for each class. You may use the information, together with the amount you invested, to estimate the expenses that you paid over the period. First, identify the share class you own. Then simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
If you hold Investor Class shares of any American Century Investments fund, or Institutional Class shares of the American Century Diversified Bond Fund, in an American Century Investments account (i.e., not a financial intermediary or retirement plan account), American Century Investments may charge you a $12.50 semiannual account maintenance fee if the value of those shares is less than $10,000. We will redeem shares automatically in one of your accounts to pay the $12.50 fee. 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. Personal accounts include individual accounts, joint accounts, UGMA/UTMA accounts, personal trusts, Coverdell Education Savings Accounts and 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. If you are subject to the Account Maintenance Fee, your account value could be reduced by the fee amount.
Hypothetical Example for Comparison Purposes
The table also provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio of each class of your fund and an assumed rate of return of 5% per year before expenses, which is not the actual return of a fund’s share class. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) or redemption/exchange fees. Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
5
Beginning Account Value 11/1/14 | Ending Account Value 4/30/15 | Expenses Paid During Period(1) 11/1/14 - 4/30/15 | Annualized Expense Ratio(1) | |
Actual | ||||
Investor Class (after waiver) | $1,000 | $1,080.40 | $7.22 | 1.40% |
Investor Class (before waiver) | $1,000 | $1,080.40(2) | $7.74 | 1.50% |
Institutional Class (after waiver) | $1,000 | $1,081.40 | $6.19 | 1.20% |
Institutional Class (before waiver) | $1,000 | $1,081.40(2) | $6.71 | 1.30% |
A Class (after waiver) | $1,000 | $1,079.70 | $8.51 | 1.65% |
A Class (before waiver) | $1,000 | $1,079.70(2) | $9.02 | 1.75% |
C Class (after waiver) | $1,000 | $1,075.20 | $12.35 | 2.40% |
C Class (before waiver) | $1,000 | $1,075.20(2) | $12.86 | 2.50% |
R Class (after waiver) | $1,000 | $1,077.90 | $9.79 | 1.90% |
R Class (before waiver) | $1,000 | $1,077.90(2) | $10.30 | 2.00% |
Hypothetical | ||||
Investor Class (after waiver) | $1,000 | $1,017.85 | $7.00 | 1.40% |
Investor Class (before waiver) | $1,000 | $1,017.36 | $7.50 | 1.50% |
Institutional Class (after waiver) | $1,000 | $1,018.84 | $6.01 | 1.20% |
Institutional Class (before waiver) | $1,000 | $1,018.35 | $6.51 | 1.30% |
A Class (after waiver) | $1,000 | $1,016.61 | $8.25 | 1.65% |
A Class (before waiver) | $1,000 | $1,016.12 | $8.75 | 1.75% |
C Class (after waiver) | $1,000 | $1,012.89 | $11.98 | 2.40% |
C Class (before waiver) | $1,000 | $1,012.40 | $12.47 | 2.50% |
R Class (after waiver) | $1,000 | $1,015.37 | $9.49 | 1.90% |
R Class (before waiver) | $1,000 | $1,014.88 | $9.99 | 2.00% |
(1) | Expenses are equal to the class's annualized expense ratio listed in the table above, multiplied by the average account value over the period, multiplied by 181, the number of days in the most recent fiscal half-year, divided by 365, to reflect the one-half year period. |
(2) | Ending account value assumes the return earned after waiver and would have been lower if a portion of the management fee had not been waived. |
6
Schedule of Investments |
APRIL 30, 2015 (UNAUDITED)
Shares | Value | |||
COMMON STOCKS — 98.1% | ||||
Aerospace and Defense — 1.5% | ||||
B/E Aerospace, Inc. | 15,942 | $ | 953,172 | |
Esterline Technologies Corp.(1) | 17,320 | 1,927,543 | ||
2,880,715 | ||||
Airlines — 0.8% | ||||
Spirit Airlines, Inc.(1) | 21,863 | 1,496,960 | ||
Banks — 2.3% | ||||
Bank of the Ozarks, Inc. | 20,718 | 803,030 | ||
Cathay General Bancorp | 44,094 | 1,260,206 | ||
Signature Bank(1) | 17,754 | 2,380,634 | ||
4,443,870 | ||||
Biotechnology — 7.2% | ||||
ACADIA Pharmaceuticals, Inc.(1) | 11,636 | 397,602 | ||
Aduro Biotech, Inc.(1) | 5,310 | 134,874 | ||
Agios Pharmaceuticals, Inc.(1) | 1,990 | 183,757 | ||
Alder Biopharmaceuticals, Inc.(1) | 19,549 | 498,499 | ||
Alkermes plc(1) | 13,818 | 765,103 | ||
Alnylam Pharmaceuticals, Inc.(1) | 7,379 | 751,699 | ||
AMAG Pharmaceuticals, Inc.(1) | 20,066 | 1,022,764 | ||
Anacor Pharmaceuticals, Inc.(1) | 11,959 | 630,120 | ||
Bluebird Bio, Inc.(1) | 3,384 | 450,715 | ||
Celldex Therapeutics, Inc.(1) | 13,204 | 316,896 | ||
Cepheid, Inc.(1) | 9,223 | 517,410 | ||
Clovis Oncology, Inc.(1) | 2,223 | 178,640 | ||
Dyax Corp.(1) | 18,113 | 433,082 | ||
Esperion Therapeutics, Inc.(1) | 4,689 | 446,065 | ||
Exact Sciences Corp.(1) | 14,026 | 293,143 | ||
Incyte Corp.(1) | 13,383 | 1,300,292 | ||
Intercept Pharmaceuticals, Inc.(1) | 1,763 | 445,704 | ||
Isis Pharmaceuticals, Inc.(1) | 13,070 | 741,330 | ||
Keryx Biopharmaceuticals, Inc.(1) | 17,068 | 181,945 | ||
Kite Pharma, Inc.(1) | 5,963 | 300,416 | ||
Medivation, Inc.(1) | 7,976 | 963,022 | ||
Puma Biotechnology, Inc.(1) | 1,913 | 345,450 | ||
Receptos, Inc.(1) | 3,014 | 444,083 | ||
Seattle Genetics, Inc.(1) | 12,491 | 428,941 | ||
Spark Therapeutics, Inc.(1) | 4,064 | 232,745 | ||
Synageva BioPharma Corp.(1) | 3,837 | 352,851 | ||
TESARO, Inc.(1) | 4,857 | 264,561 | ||
United Therapeutics Corp.(1) | 5,015 | 800,845 | ||
13,822,554 | ||||
Building Products — 4.2% | ||||
Apogee Enterprises, Inc. | 26,777 | 1,409,006 | ||
Caesarstone Sdot-Yam Ltd. | 20,133 | 1,192,679 | ||
Fortune Brands Home & Security, Inc. | 41,486 | 1,850,275 |
7
Shares | Value | |||
Lennox International, Inc. | 17,504 | $ | 1,854,724 | |
NCI Building Systems, Inc.(1) | 50,648 | 784,031 | ||
Trex Co., Inc.(1) | 21,510 | 1,009,249 | ||
8,099,964 | ||||
Capital Markets — 1.9% | ||||
Evercore Partners, Inc., Class A | 21,516 | 1,037,932 | ||
HFF, Inc., Class A | 20,366 | 798,143 | ||
Lazard Ltd., Class A | 32,739 | 1,736,149 | ||
3,572,224 | ||||
Chemicals — 1.1% | ||||
International Flavors & Fragrances, Inc. | 10,501 | 1,204,990 | ||
PolyOne Corp. | 25,931 | 1,012,605 | ||
2,217,595 | ||||
Commercial Services and Supplies — 2.5% | ||||
ABM Industries, Inc. | 33,400 | 1,070,470 | ||
HNI Corp. | 14,492 | 675,907 | ||
KAR Auction Services, Inc. | 45,676 | 1,699,604 | ||
Multi-Color Corp. | 22,800 | 1,431,384 | ||
4,877,365 | ||||
Communications Equipment — 1.9% | ||||
Infinera Corp.(1) | 48,086 | 904,017 | ||
Palo Alto Networks, Inc.(1) | 12,135 | 1,792,582 | ||
Ruckus Wireless, Inc.(1) | 88,537 | 1,034,112 | ||
3,730,711 | ||||
Construction Materials — 1.4% | ||||
Headwaters, Inc.(1) | 67,964 | 1,194,807 | ||
Summit Materials, Inc., Class A(1) | 66,879 | 1,584,364 | ||
2,779,171 | ||||
Containers and Packaging — 2.8% | ||||
Ball Corp. | 25,996 | 1,908,366 | ||
Berry Plastics Group, Inc.(1) | 45,211 | 1,547,121 | ||
Graphic Packaging Holding Co. | 86,343 | 1,217,436 | ||
Packaging Corp. of America | 9,828 | 679,999 | ||
5,352,922 | ||||
Distributors — 1.6% | ||||
LKQ Corp.(1) | 113,626 | 3,075,856 | ||
Diversified Consumer Services — 0.7% | ||||
Nord Anglia Education, Inc.(1) | 54,703 | 1,425,013 | ||
Diversified Financial Services — 1.1% | ||||
CBOE Holdings, Inc. | 15,997 | 900,151 | ||
MarketAxess Holdings, Inc. | 13,735 | 1,179,150 | ||
2,079,301 | ||||
Electrical Equipment — 1.0% | ||||
Acuity Brands, Inc. | 11,233 | 1,875,349 | ||
Electronic Equipment, Instruments and Components — 1.6% | ||||
Belden, Inc. | 12,629 | 1,060,205 | ||
Mercury Systems, Inc.(1) | 81,171 | 1,120,971 | ||
Methode Electronics, Inc. | 23,340 | 991,016 | ||
3,172,192 |
8
Shares | Value | |||
Energy Equipment and Services — 0.6% | ||||
Helmerich & Payne, Inc. | 7,181 | $ | 559,903 | |
RigNet, Inc.(1) | 15,313 | 573,625 | ||
1,133,528 | ||||
Food and Staples Retailing — 1.3% | ||||
Natural Grocers by Vitamin Cottage, Inc.(1) | 33,310 | 876,719 | ||
United Natural Foods, Inc.(1) | 23,721 | 1,600,219 | ||
2,476,938 | ||||
Food Products — 1.9% | ||||
Hain Celestial Group, Inc. (The)(1) | 29,535 | 1,779,188 | ||
J&J Snack Foods Corp. | 9,568 | 998,230 | ||
TreeHouse Foods, Inc.(1) | 11,484 | 933,190 | ||
3,710,608 | ||||
Health Care Equipment and Supplies — 4.9% | ||||
Align Technology, Inc.(1) | 7,988 | 470,014 | ||
Cardiovascular Systems, Inc.(1) | 30,811 | 964,384 | ||
Cooper Cos., Inc. (The) | 4,342 | 773,180 | ||
DexCom, Inc.(1) | 18,690 | 1,262,883 | ||
Entellus Medical, Inc.(1) | 37,278 | 1,025,891 | ||
IDEXX Laboratories, Inc.(1) | 4,779 | 599,143 | ||
NuVasive, Inc.(1) | 35,507 | 1,588,228 | ||
STERIS Corp. | 15,681 | 1,042,786 | ||
Teleflex, Inc. | 13,937 | 1,713,694 | ||
9,440,203 | ||||
Health Care Providers and Services — 4.2% | ||||
AAC Holdings, Inc.(1) | 34,451 | 1,194,072 | ||
Adeptus Health, Inc., Class A(1) | 8,481 | 538,289 | ||
AMN Healthcare Services, Inc.(1) | 50,574 | 1,153,593 | ||
Centene Corp.(1) | 14,762 | 915,096 | ||
ExamWorks Group, Inc.(1) | 51,839 | 2,122,807 | ||
Healthways, Inc.(1) | 34,753 | 604,702 | ||
Team Health Holdings, Inc.(1) | 20,442 | 1,217,730 | ||
Universal Health Services, Inc., Class B | 3,310 | 387,105 | ||
8,133,394 | ||||
Health Care Technology — 1.2% | ||||
athenahealth, Inc.(1) | 4,476 | 549,026 | ||
HMS Holdings Corp.(1) | 56,248 | 956,779 | ||
Medidata Solutions, Inc.(1) | 13,777 | 736,105 | ||
2,241,910 | ||||
Hotels, Restaurants and Leisure — 4.6% | ||||
Buffalo Wild Wings, Inc.(1) | 4,868 | 775,472 | ||
El Pollo Loco Holdings, Inc.(1) | 49,822 | 1,304,340 | ||
La Quinta Holdings, Inc.(1) | 75,762 | 1,824,349 | ||
Papa John's International, Inc. | 35,960 | 2,206,865 | ||
Texas Roadhouse, Inc. | 34,765 | 1,168,104 | ||
Vail Resorts, Inc. | 16,956 | 1,682,205 | ||
8,961,335 | ||||
9
Shares | Value | |||
Household Durables — 1.9% | ||||
Harman International Industries, Inc. | 15,529 | $ | 2,024,671 | |
Jarden Corp.(1) | 30,239 | 1,547,632 | ||
3,572,303 | ||||
Insurance — 0.9% | ||||
Allied World Assurance Co. Holdings Ltd. | 40,228 | 1,654,980 | ||
Internet Software and Services — 4.7% | ||||
comScore, Inc.(1) | 28,112 | 1,471,944 | ||
CoStar Group, Inc.(1) | 19,131 | 3,910,950 | ||
Demandware, Inc.(1) | 16,599 | 1,022,499 | ||
Envestnet, Inc.(1) | 32,981 | 1,690,606 | ||
Rackspace Hosting, Inc.(1) | 19,185 | 1,034,072 | ||
9,130,071 | ||||
IT Services — 2.8% | ||||
Alliance Data Systems Corp.(1) | 2,717 | 807,791 | ||
Sabre Corp. | 39,615 | 986,017 | ||
Vantiv, Inc., Class A(1) | 62,601 | 2,447,699 | ||
Virtusa Corp.(1) | 30,567 | 1,216,567 | ||
5,458,074 | ||||
Leisure Products — 1.8% | ||||
Brunswick Corp. | 45,931 | 2,298,387 | ||
Polaris Industries, Inc. | 8,226 | 1,126,633 | ||
3,425,020 | ||||
Life Sciences Tools and Services — 1.0% | ||||
Charles River Laboratories International, Inc.(1) | 14,513 | 1,003,719 | ||
Mettler-Toledo International, Inc.(1) | 2,757 | 873,997 | ||
1,877,716 | ||||
Machinery — 4.0% | ||||
Middleby Corp.(1) | 39,286 | 3,981,243 | ||
Snap-On, Inc. | 17,128 | 2,561,493 | ||
WABCO Holdings, Inc.(1) | 10,091 | 1,255,825 | ||
7,798,561 | ||||
Metals and Mining — 0.8% | ||||
Horsehead Holding Corp.(1) | 99,618 | 1,489,289 | ||
Multiline Retail — 0.5% | ||||
Burlington Stores, Inc.(1) | 19,808 | 1,021,499 | ||
Oil, Gas and Consumable Fuels — 2.8% | ||||
Carrizo Oil & Gas, Inc.(1) | 23,932 | 1,333,730 | ||
Diamondback Energy, Inc.(1) | 14,245 | 1,176,210 | ||
Enviva Partners, LP | 60,999 | 1,292,569 | ||
Gulfport Energy Corp.(1) | 33,911 | 1,659,604 | ||
5,462,113 | ||||
Pharmaceuticals — 2.6% | ||||
Depomed, Inc.(1) | 40,005 | 930,516 | ||
Horizon Pharma plc(1) | 39,569 | 1,112,680 | ||
Jazz Pharmaceuticals plc(1) | 6,562 | 1,172,630 | ||
Mallinckrodt plc(1) | 7,760 | 878,277 | ||
Medicines Co. (The)(1) | 11,115 | 284,655 | ||
Pacira Pharmaceuticals, Inc.(1) | 9,930 | 680,006 | ||
5,058,764 |
10
Shares | Value | |||
Professional Services — 1.1% | ||||
Huron Consulting Group, Inc.(1) | 19,514 | $ | 1,182,939 | |
Korn/Ferry International | 30,382 | 957,944 | ||
2,140,883 | ||||
Real Estate Investment Trusts (REITs) — 1.1% | ||||
Federal Realty Investment Trust | 6,194 | 827,952 | ||
Sun Communities, Inc. | 20,858 | 1,294,447 | ||
2,122,399 | ||||
Road and Rail — 0.9% | ||||
Saia, Inc.(1) | 28,136 | 1,146,542 | ||
Swift Transportation Co.(1) | 27,329 | 661,362 | ||
1,807,904 | ||||
Semiconductors and Semiconductor Equipment — 3.6% | ||||
Cypress Semiconductor Corp. | 97,234 | 1,295,157 | ||
Freescale Semiconductor Ltd.(1) | 24,078 | 941,209 | ||
M/A-COM Technology Solutions Holdings, Inc.(1) | 25,904 | 789,295 | ||
Skyworks Solutions, Inc. | 20,123 | 1,856,347 | ||
Synaptics, Inc.(1) | 23,364 | 1,979,398 | ||
6,861,406 | ||||
Software — 5.3% | ||||
Barracuda Networks, Inc.(1) | 29,727 | 1,204,835 | ||
FireEye, Inc.(1) | 28,043 | 1,158,176 | ||
Manhattan Associates, Inc.(1) | 14,942 | 785,352 | ||
Monotype Imaging Holdings, Inc. | 28,218 | 914,545 | ||
QLIK Technologies, Inc.(1) | 44,205 | 1,537,892 | ||
ServiceNow, Inc.(1) | 28,042 | 2,099,224 | ||
Splunk, Inc.(1) | 18,596 | 1,233,752 | ||
Tyler Technologies, Inc.(1) | 11,115 | 1,355,474 | ||
10,289,250 | ||||
Specialty Retail — 5.7% | ||||
Men's Wearhouse, Inc. (The) | 36,813 | 2,083,248 | ||
Monro Muffler Brake, Inc. | 21,760 | 1,303,206 | ||
Restoration Hardware Holdings, Inc.(1) | 24,936 | 2,148,735 | ||
Sally Beauty Holdings, Inc.(1) | 45,068 | 1,406,572 | ||
Signet Jewelers Ltd. | 21,735 | 2,915,316 | ||
Ulta Salon Cosmetics & Fragrance, Inc.(1) | 7,065 | 1,067,451 | ||
10,924,528 | ||||
Technology Hardware, Storage and Peripherals — 1.6% | ||||
Nimble Storage, Inc.(1) | 48,314 | 1,181,760 | ||
Super Micro Computer, Inc.(1) | 68,837 | 1,980,441 | ||
3,162,201 | ||||
Textiles, Apparel and Luxury Goods — 2.7% | ||||
Hanesbrands, Inc. | 88,856 | 2,761,644 | ||
Skechers U.S.A., Inc., Class A(1) | 27,539 | 2,476,307 | ||
5,237,951 | ||||
TOTAL COMMON STOCKS (Cost $147,674,257) | 189,494,590 | |||
11
Shares | Value | |||
TEMPORARY CASH INVESTMENTS — 2.0% | ||||
Repurchase Agreement, Bank of America Merrill Lynch, (collateralized by various U.S. Treasury obligations, 1.375%, 4/30/20, valued at $643,742), in a joint trading account at 0.08%, dated 4/30/15, due 5/1/15 (Delivery value $632,553) | $ | 632,552 | ||
Repurchase Agreement, Credit Suisse First Boston, Inc., (collateralized by various U.S. Treasury obligations, 1.50%, 12/31/18, valued at $1,545,316), in a joint trading account at 0.03%, dated 4/30/15, due 5/1/15 (Delivery value $1,518,124) | 1,518,123 | |||
Repurchase Agreement, Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 3.625%, 2/15/44, valued at $1,809,225), at 0.01%, dated 4/30/15, due 5/1/15 (Delivery value $1,772,000) | 1,772,000 | |||
State Street Institutional Liquid Reserves Fund, Premier Class | 1,942 | 1,942 | ||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $3,924,617) | 3,924,617 | |||
TOTAL INVESTMENT SECURITIES — 100.1% (Cost $151,598,874) | 193,419,207 | |||
OTHER ASSETS AND LIABILITIES — (0.1)% | (136,508) | |||
TOTAL NET ASSETS — 100.0% | $ | 193,282,699 |
NOTES TO SCHEDULE OF INVESTMENTS |
(1) | Non-income producing. |
See Notes to Financial Statements.
12
Statement of Assets and Liabilities |
APRIL 30, 2015 (UNAUDITED) | |||
Assets | |||
Investment securities, at value (cost of $151,598,874) | $ | 193,419,207 | |
Receivable for investments sold | 3,029,945 | ||
Receivable for capital shares sold | 30,384 | ||
Dividends and interest receivable | 23,049 | ||
196,502,585 | |||
Liabilities | |||
Payable for investments purchased | 2,979,963 | ||
Payable for capital shares redeemed | 10,611 | ||
Accrued management fees | 229,097 | ||
Distribution and service fees payable | 215 | ||
3,219,886 | |||
Net Assets | $ | 193,282,699 | |
Net Assets Consist of: | |||
Capital (par value and paid-in surplus) | $ | 139,020,875 | |
Accumulated net investment loss | (2,365,950 | ) | |
Undistributed net realized gain | 14,807,441 | ||
Net unrealized appreciation | 41,820,333 | ||
$ | 193,282,699 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | ||||
Investor Class, $0.01 Par Value | $192,578,695 | 16,059,774 | $11.99 | |||
Institutional Class, $0.01 Par Value | $53,901 | 4,447 | $12.12 | |||
A Class, $0.01 Par Value | $448,132 | 37,897 | $11.82* | |||
C Class, $0.01 Par Value | $82,153 | 7,242 | $11.34 | |||
R Class, $0.01 Par Value | $119,818 | 10,274 | $11.66 |
*Maximum offering price $12.54 (net asset value divided by 0.9425).
See Notes to Financial Statements.
13
Statement of Operations |
FOR THE SIX MONTHS ENDED APRIL 30, 2015 (UNAUDITED) | |||
Investment Income (Loss) | |||
Income: | |||
Dividends (net of foreign taxes withheld of $1,947) | $ | 496,305 | |
Interest | 502 | ||
496,807 | |||
Expenses: | |||
Management fees | 1,412,946 | ||
Distribution and service fees: | |||
A Class | 540 | ||
C Class | 394 | ||
R Class | 284 | ||
Directors' fees and expenses | 3,400 | ||
1,417,564 | |||
Fees waived | (94,200 | ) | |
1,323,364 | |||
Net investment income (loss) | (826,557 | ) | |
Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on investment transactions | 14,963,824 | ||
Change in net unrealized appreciation (depreciation) on investments | 343,655 | ||
Net realized and unrealized gain (loss) | 15,307,479 | ||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 14,480,922 |
See Notes to Financial Statements.
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Statement of Changes in Net Assets |
SIX MONTHS ENDED APRIL 30, 2015 (UNAUDITED) AND YEAR ENDED OCTOBER 31, 2014 | ||||||
Increase (Decrease) in Net Assets | April 30, 2015 | October 31, 2014 | ||||
Operations | ||||||
Net investment income (loss) | $ | (826,557 | ) | $ | (1,763,797 | ) |
Net realized gain (loss) | 14,963,824 | 21,490,206 | ||||
Change in net unrealized appreciation (depreciation) | 343,655 | (4,048,543 | ) | |||
Net increase (decrease) in net assets resulting from operations | 14,480,922 | 15,677,866 | ||||
Distributions to Shareholders | ||||||
From net realized gains: | ||||||
Investor Class | (11,647,699 | ) | — | |||
Institutional Class | (3,143 | ) | — | |||
A Class | (26,309 | ) | — | |||
C Class | (5,042 | ) | — | |||
R Class | (7,030 | ) | — | |||
Decrease in net assets from distributions | (11,689,223 | ) | — | |||
Capital Share Transactions | ||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | 3,729,376 | (19,993,842 | ) | |||
Redemption Fees | ||||||
Increase in net assets from redemption fees | 670 | 8,985 | ||||
Net increase (decrease) in net assets | 6,521,745 | (4,306,991 | ) | |||
Net Assets | ||||||
Beginning of period | 186,760,954 | 191,067,945 | ||||
End of period | $ | 193,282,699 | $ | 186,760,954 | ||
Accumulated net investment loss | $ | (2,365,950 | ) | $ | (1,539,393 | ) |
See Notes to Financial Statements.
15
Notes to Financial Statements |
APRIL 30, 2015 (UNAUDITED)
1. Organization
American Century Mutual Funds, Inc. (the corporation) is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company and is organized as a Maryland corporation. New Opportunities Fund (the fund) is one fund in a series issued by the corporation. The fund is diversified as defined under the 1940 Act. The fund’s investment objective is to seek long-term capital growth.
The fund offers the Investor Class, the Institutional Class, the A Class, the C Class and the R Class. The A Class may incur an initial sales charge. The A Class and C Class may be subject to a contingent deferred sales charge. The share classes differ principally in their respective sales charges and distribution and shareholder servicing expenses and arrangements. The Institutional Class is made available to institutional shareholders or through financial intermediaries whose clients do not require the same level of shareholder and administrative services as shareholders of other classes. As a result, the Institutional Class is charged a lower unified management fee.
2. Significant Accounting Policies
The following is a summary of significant accounting policies consistently followed by the fund in preparation of its financial statements. The fund is an investment company and follows accounting and reporting guidance in accordance with accounting principles generally accepted in the United States of America. This may require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from these estimates. Management evaluated the impact of events or transactions occurring through the date the financial statements were issued that would merit recognition or disclosure.
Investment Valuations — The fund determines the fair value of its investments and computes its net asset value per share at 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. The Board of Directors has adopted valuation policies and procedures to guide the investment advisor in the fund’s investment valuation process and to provide methodologies for the oversight of the fund’s pricing function.
Equity securities that are listed or traded on a domestic securities exchange are valued at the last reported sales price or at the official closing price as provided by the exchange. Equity securities traded on foreign securities exchanges are generally valued at the closing price of such securities on the exchange where primarily traded or at the close of the NYSE, if that is earlier. If no last sales price is reported, or if local convention or regulation so provides, the mean of the latest bid and asked prices may be used. Securities traded over-the-counter are valued at the mean of the latest bid and asked prices, the last sales price, or the official closing price.
Fixed income securities maturing within 60 days at the time of purchase may be valued at cost, plus or minus any amortized discount or premium or at the evaluated mean as provided by an independent pricing service. Evaluated mean prices are commonly derived through utilization of market models, which may consider, among other factors: trade data, quotations from 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.
Open-end management investment companies are valued at the reported net asset value per share. Repurchase agreements are valued at cost, which approximates fair value.
If the fund determines that the market price for an investment is not readily available or the valuation methods mentioned above do not reflect an investment’s fair value, such investment is valued as determined in good faith by the Board of Directors or its delegate, in accordance with policies and procedures adopted by the Board of Directors. In its determination of fair value, the fund may review several factors including, but not limited to, market information regarding the specific investment or comparable investments and correlation with other investment types, futures indices or general market indicators. Circumstances that may cause the fund to use these procedures to value an investment include, but are not limited to: an investment has been declared in default or is distressed; trading in a security has been suspended during the trading day or a security is not actively trading on its principal exchange; prices received from a regular pricing source are
deemed unreliable; or there is a foreign market holiday and no trading occurred.
16
The fund monitors for significant events occurring after the close of an investment’s primary exchange but before the fund’s net asset value per share is determined. Significant events may include, but are not limited to: corporate announcements and transactions; governmental action and political unrest that could impact a specific investment or an investment sector; or armed conflicts, natural disasters and similar events that could affect investments in a specific country or region. The fund also monitors for significant fluctuations between domestic and foreign markets, as evidenced by the U.S. market or such other indicators that the Board of Directors, or its delegate, deems appropriate. If significant fluctuations in foreign markets are identified, the fund may apply a model-derived factor to the closing price of equity securities traded on foreign securities exchanges. The factor is based on observable market data as provided by an independent pricing service.
Security Transactions — Security transactions are accounted for as of the trade date. Net realized gains and losses are determined on the identified cost basis, which is also used for federal income tax purposes.
Investment Income — Dividend income less foreign taxes withheld, if any, is recorded as of the ex-dividend date. Distributions received on securities that represent a return of capital or long-term capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The fund may estimate the components of distributions received that may be considered nontaxable distributions or long-term capital gain distributions for income tax purposes. Interest income is recorded on the accrual basis and includes accretion of discounts and amortization of premiums.
Repurchase Agreements — The fund may enter into repurchase agreements with institutions that American Century Investment Management, Inc. (ACIM) (the investment advisor) has determined are creditworthy pursuant to criteria adopted by the Board of Directors. The fund requires that the collateral, represented by securities, received in a repurchase transaction be transferred to the custodian in a manner sufficient to enable the fund to obtain those securities in the event of a default under the repurchase agreement. ACIM monitors, on a daily basis, the securities transferred to ensure the value, including accrued interest, of the securities under each repurchase agreement is equal to or greater than amounts owed to the fund under each repurchase agreement.
Joint Trading Account — Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the fund, along with certain other funds in the American Century Investments family of funds, may transfer uninvested cash balances into a joint trading account. These balances are invested in one or more repurchase agreements that are collateralized by U.S. Treasury or Agency obligations.
Income Tax Status — It is the fund’s policy to distribute substantially all net investment income and net realized gains to shareholders and to otherwise qualify as a regulated investment company under provisions of the Internal Revenue Code. Accordingly, no provision has been made for income taxes. The fund files U.S. federal, state, local and non-U.S. tax returns as applicable. The fund's tax returns are subject to examination by the relevant taxing authority until expiration of the applicable statute of limitations, which is generally three years from the date of filing but can be longer in certain jurisdictions. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination and for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Multiple Class — All shares of the fund represent an equal pro rata interest in the net assets of the class to which such shares belong, and have identical voting, dividend, liquidation and other rights and the same terms and conditions, except for class specific expenses and exclusive rights to vote on matters affecting only individual classes. Income, non-class specific expenses, and realized and unrealized capital gains and losses of the fund are allocated to each class of shares based on their relative net assets.
Distributions to Shareholders — Distributions from net investment income and net realized gains, if any, are generally declared and paid annually.
Redemption Fees — The fund may impose a 2.00% redemption fee on shares held less than 60 days. The fee may not be applicable to all classes. The redemption fee is retained by the fund and helps cover transaction costs that long-term investors may bear when the fund sells securities to meet investor redemptions.
Indemnifications — Under the corporation’s organizational documents, its officers and directors are indemnified against certain liabilities arising out of the performance of their duties to the fund. In addition, in the normal course of business, the fund enters into contracts that provide general indemnifications. The maximum exposure under these arrangements is unknown as this would involve future claims that may be made against a fund. The risk of material loss from such claims is considered by management to be remote.
17
3. Fees and Transactions with Related Parties
Certain officers and directors of the corporation are also officers and/or directors of American Century Companies, Inc. (ACC). The corporation’s investment advisor, ACIM, the corporation's distributor, American Century Investment Services, Inc. (ACIS), and the corporation’s transfer agent, American Century Services, LLC, are wholly owned, directly or indirectly, by ACC.
Management Fees — The corporation has entered into a management agreement with ACIM, under which ACIM provides the fund with investment advisory and management services in exchange for a single, unified management fee (the fee) per class. The agreement provides that all expenses of managing and operating the fund, except distribution and service fees, brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), and extraordinary expenses, will be paid by ACIM. The fee is computed and accrued daily based on each class’s daily net assets and paid monthly in arrears. The rate of the fee is determined by applying a fee rate calculation formula. This formula takes into account the fund’s assets as well as certain assets, if any, of other clients of the investment advisor outside the American Century Investments family of funds (such as subadvised funds and separate accounts) that have very similar investment teams and investment strategies (strategy assets). The annual management fee schedule ranges from 1.100% to 1.500% for the Investor Class, A Class, C Class and R Class. The annual management fee schedule ranges from 0.900% to 1.300% for the Institutional Class. During the six months ended April 30, 2015, the investment advisor voluntarily agreed to waive 0.10% of its management fee. The investment advisor expects the fee waiver to continue through July 31, 2015, and cannot terminate it without the approval of the Board of Directors. The total amount of the waiver for each class for the six months ended April 30, 2015 was $93,862, $26, $216, $39, and $57 for the Investor Class, Institutional Class, A Class, C Class and R Class, respectively. The effective annual management fee before waiver for each class for the six months ended April 30, 2015 was 1.50% for the Investor Class, A Class, C Class and R Class and 1.30% for the Institutional Class. The effective annual management fee after waiver for each class for the six months ended April 30, 2015 was 1.40% for the Investor Class, A Class, C Class and R Class and 1.20% for the Institutional Class.
Distribution and Service Fees — The Board of Directors has adopted a separate Master Distribution and Individual Shareholder Services Plan for each of the A Class, C Class and R Class (collectively the plans), pursuant to Rule 12b-1 of the 1940 Act. The plans provide that the A Class will pay ACIS an annual distribution and service fee of 0.25%. The plans provide that the C Class will pay ACIS an annual distribution and service fee of 1.00%, of which 0.25% is paid for individual shareholder services and 0.75% is paid for distribution services. The plans provide that the R Class will pay ACIS an annual distribution and service fee of 0.50%. The fees are computed and accrued daily based on each class’s daily net assets and paid monthly in arrears. The fees are used to pay financial intermediaries for distribution and individual shareholder services. Fees incurred under the plans during the six months ended April 30, 2015 are detailed in the Statement of Operations.
Directors' Fees and Expenses — The Board of Directors is responsible for overseeing the investment advisor’s management and operations of the fund. The directors receive detailed information about the fund and its investment advisor regularly throughout the year, and meet at least quarterly with management of the investment advisor to review reports about fund operations. The fund’s officers do not receive compensation from the fund.
Acquired Fund Fees and Expenses — The fund may invest in mutual funds, exchange-traded funds, and business development companies (the acquired funds). The fund will indirectly realize its pro rata share of the fees and expenses of the acquired funds in which it invests. These indirect fees and expenses are not paid out of the fund's assets but are reflected in the return realized by the fund on its investment in the acquired funds.
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the six months ended April 30, 2015 were $81,796,067 and $89,999,428, respectively.
18
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended April 30, 2015 | Year ended October 31, 2014 | |||||||||
Shares | Amount | Shares | Amount | |||||||
Investor Class/Shares Authorized | 200,000,000 | 200,000,000 | ||||||||
Sold | 382,470 | $ | 4,630,234 | 670,786 | $ | 7,648,874 | ||||
Issued in reinvestment of distributions | 1,005,158 | 10,905,967 | — | ��� | ||||||
Redeemed | (1,007,644 | ) | (11,874,399 | ) | (2,422,255 | ) | (27,644,383 | ) | ||
379,984 | 3,661,802 | (1,751,469 | ) | (19,995,509 | ) | |||||
Institutional Class/Shares Authorized | 25,000,000 | 25,000,000 | ||||||||
Sold | 41 | 500 | — | — | ||||||
Issued in reinvestment of distributions | 287 | 3,143 | — | — | ||||||
328 | 3,643 | — | — | |||||||
A Class/Shares Authorized | 25,000,000 | 25,000,000 | ||||||||
Sold | 6,680 | 77,479 | 7,111 | 80,085 | ||||||
Issued in reinvestment of distributions | 2,393 | 25,627 | — | — | ||||||
Redeemed | (4,760 | ) | (55,585 | ) | (3,258 | ) | (35,806 | ) | ||
4,313 | 47,521 | 3,853 | 44,279 | |||||||
C Class/Shares Authorized | 25,000,000 | 25,000,000 | ||||||||
Sold | 195 | 2,227 | 967 | 10,481 | ||||||
Issued in reinvestment of distributions | 489 | 5,042 | — | — | ||||||
Redeemed | (100 | ) | (1,170 | ) | (5,463 | ) | (60,448 | ) | ||
584 | 6,099 | (4,496 | ) | (49,967 | ) | |||||
R Class/Shares Authorized | 25,000,000 | 25,000,000 | ||||||||
Sold | 398 | 4,581 | 972 | 10,912 | ||||||
Issued in reinvestment of distributions | 665 | 7,030 | — | — | ||||||
Redeemed | (110 | ) | (1,300 | ) | (319 | ) | (3,557 | ) | ||
953 | 10,311 | 653 | 7,355 | |||||||
Net increase (decrease) | 386,162 | $ | 3,729,376 | (1,751,459 | ) | $ | (19,993,842 | ) |
6. Fair Value Measurements
The fund’s investments valuation process is based on several considerations and may use multiple inputs to determine the fair value of the investments held by the fund. In conformity with accounting principles generally accepted in the United States of America, the inputs used to determine a valuation are classified into three broad levels.
• | Level 1 valuation inputs consist of unadjusted quoted prices in an active market for identical investments. |
• | Level 2 valuation inputs consist of direct or indirect observable market data (including quoted prices for comparable investments, evaluations of subsequent market events, interest rates, prepayment speeds, credit risk, etc.). These inputs also consist of quoted prices for identical investments initially expressed in local currencies that are adjusted through translation into U.S. dollars. |
• | Level 3 valuation inputs consist of unobservable data (including a fund’s own assumptions). |
The level classification is based on the lowest level input that is significant to the fair valuation measurement. The valuation inputs are not necessarily an indication of the risks associated with investing in these securities or other financial instruments. There were no significant transfers between levels during the period.
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The following is a summary of the level classifications as of period end. The Schedule of Investments provides additional information on the fund’s portfolio holdings.
Level 1 | Level 2 | Level 3 | ||||||
Assets | ||||||||
Investment Securities | ||||||||
Common Stocks | $ | 189,494,590 | — | — | ||||
Temporary Cash Investments | 1,942 | $ | 3,922,675 | — | ||||
$ | 189,496,532 | $ | 3,922,675 | — |
7. Risk Factors
The fund invests in common stocks of small companies. Because of this, the fund may be subject to greater risk and market fluctuations than a fund investing in larger, more established companies.
8. Federal Tax Information
The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
As of April 30, 2015, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $ | 152,097,426 | |
Gross tax appreciation of investments | $ | 44,366,916 | |
Gross tax depreciation of investments | (3,045,135 | ) | |
Net tax appreciation (depreciation) of investments | $ | 41,321,781 |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales.
As of October 31, 2014, the fund had late-year ordinary loss deferrals of $(1,539,393), which represent certain qualified losses that the fund has elected to treat as having been incurred in the following fiscal year for federal income tax purposes.
20
Financial Highlights |
For a Share Outstanding Throughout the Years Ended October 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 Realized Gains | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Operating Expenses (before expense waiver) | Net Investment Income (Loss) | Net Investment Income (Loss) (before expense waiver) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
Investor Class | |||||||||||||||
2015(3) | $11.87 | (0.05) | 0.93 | 0.88 | (0.76) | $11.99 | 8.04% | 1.40%(4) | 1.50%(4) | (0.87)%(4) | (0.97)%(4) | 44% | $192,579 | ||
2014 | $10.93 | (0.11) | 1.05 | 0.94 | — | $11.87 | 8.60% | 1.48% | 1.50% | (0.93)% | (0.95)% | 76% | $186,134 | ||
2013 | $8.13 | (0.06) | 2.86 | 2.80 | — | $10.93 | 34.44% | 1.50% | 1.50% | (0.62)% | (0.62)% | 79% | $190,490 | ||
2012 | $7.47 | (0.02) | 0.68 | 0.66 | — | $8.13 | 8.84% | 1.50% | 1.50% | (0.22)% | (0.22)% | 63% | $154,517 | ||
2011 | $6.86 | (0.07) | 0.68 | 0.61 | — | $7.47 | 8.89% | 1.50% | 1.50% | (0.95)% | (0.95)% | 107% | $158,117 | ||
2010 | $5.06 | (0.04) | 1.84 | 1.80 | — | $6.86 | 33.57% | 1.51% | 1.51% | (0.59)% | (0.59)% | 181% | $146,747 | ||
Institutional Class | |||||||||||||||
2015(3) | $11.98 | (0.04) | 0.94 | 0.90 | (0.76) | $12.12 | 8.14% | 1.20%(4) | 1.30%(4) | (0.67)%(4) | (0.77)%(4) | 44% | $54 | ||
2014 | $11.01 | (0.08) | 1.05 | 0.97 | — | $11.98 | 8.81% | 1.28% | 1.30% | (0.73)% | (0.75)% | 76% | $49 | ||
2013 | $8.17 | (0.04) | 2.88 | 2.84 | — | $11.01 | 34.76% | 1.30% | 1.30% | (0.42)% | (0.42)% | 79% | $45 | ||
2012 | $7.49 | —(5) | 0.68 | 0.68 | — | $8.17 | 9.08% | 1.30% | 1.30% | (0.02)% | (0.02)% | 63% | $34 | ||
2011 | $6.87 | (0.06) | 0.68 | 0.62 | — | $7.49 | 9.02% | 1.30% | 1.30% | (0.75)% | (0.75)% | 107% | $31 | ||
2010(6) | $6.07 | (0.01) | 0.81 | 0.80 | — | $6.87 | 13.18% | 1.31%(4) | 1.31%(4) | (0.29)%(4) | (0.29)%(4) | 181%(7) | $28 | ||
A Class | |||||||||||||||
2015(3) | $11.73 | (0.07) | 0.92 | 0.85 | (0.76) | $11.82 | 7.97% | 1.65%(4) | 1.75%(4) | (1.12)%(4) | (1.22)%(4) | 44% | $448 | ||
2014 | $10.83 | (0.13) | 1.03 | 0.90 | — | $11.73 | 8.31% | 1.73% | 1.75% | (1.18)% | (1.20)% | 76% | $394 | ||
2013 | $8.08 | (0.08) | 2.83 | 2.75 | — | $10.83 | 34.03% | 1.75% | 1.75% | (0.87)% | (0.87)% | 79% | $322 | ||
2012 | $7.44 | (0.04) | 0.68 | 0.64 | — | $8.08 | 8.60% | 1.75% | 1.75% | (0.47)% | (0.47)% | 63% | $239 | ||
2011 | $6.85 | (0.09) | 0.68 | 0.59 | — | $7.44 | 8.61% | 1.75% | 1.75% | (1.20)% | (1.20)% | 107% | $282 | ||
2010(6) | $6.07 | (0.03) | 0.81 | 0.78 | — | $6.85 | 12.85% | 1.76%(4) | 1.76%(4) | (0.67)%(4) | (0.67)%(4) | 181%(7) | $121 |
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For a Share Outstanding Throughout the Years Ended October 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 Realized Gains | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Operating Expenses (before expense waiver) | Net Investment Income (Loss) | Net Investment Income (Loss) (before expense waiver) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
C Class | |||||||||||||||
2015(3) | $11.33 | (0.10) | 0.87 | 0.77 | (0.76) | $11.34 | 7.52% | 2.40%(4) | 2.50%(4) | (1.87)%(4) | (1.97)%(4) | 44% | $82 | ||
2014 | $10.53 | (0.21) | 1.01 | 0.80 | — | $11.33 | 7.50% | 2.48% | 2.50% | (1.93)% | (1.95)% | 76% | $75 | ||
2013 | $7.91 | (0.15) | 2.77 | 2.62 | — | $10.53 | 33.12% | 2.50% | 2.50% | (1.62)% | (1.62)% | 79% | $117 | ||
2012 | $7.34 | (0.09) | 0.66 | 0.57 | — | $7.91 | 7.77% | 2.50% | 2.50% | (1.22)% | (1.22)% | 63% | $80 | ||
2011 | $6.81 | (0.15) | 0.68 | 0.53 | — | $7.34 | 7.78% | 2.50% | 2.50% | (1.95)% | (1.95)% | 107% | $57 | ||
2010(6) | $6.07 | (0.06) | 0.80 | 0.74 | — | $6.81 | 12.19% | 2.51%(4) | 2.51%(4) | (1.46)%(4) | (1.46)%(4) | 181%(7) | $40 | ||
R Class | |||||||||||||||
2015(3) | $11.59 | (0.08) | 0.91 | 0.83 | (0.76) | $11.66 | 7.79% | 1.90%(4) | 2.00%(4) | (1.37)%(4) | (1.47)%(4) | 44% | $120 | ||
2014 | $10.73 | (0.16) | 1.02 | 0.86 | — | $11.59 | 8.12% | 1.98% | 2.00% | (1.43)% | (1.45)% | 76% | $108 | ||
2013 | $8.02 | (0.11) | 2.82 | 2.71 | — | $10.73 | 33.67% | 2.00% | 2.00% | (1.12)% | (1.12)% | 79% | $93 | ||
2012 | $7.40 | (0.06) | 0.68 | 0.62 | — | $8.02 | 8.38% | 2.00% | 2.00% | (0.72)% | (0.72)% | 63% | $62 | ||
2011 | $6.84 | (0.11) | 0.67 | 0.56 | — | $7.40 | 8.19% | 2.00% | 2.00% | (1.45)% | (1.45)% | 107% | $48 | ||
2010(6) | $6.07 | (0.04) | 0.81 | 0.77 | — | $6.84 | 12.69% | 2.01%(4) | 2.01%(4) | (0.99)%(4) | (0.99)%(4) | 181%(7) | $29 |
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 and do not reflect applicable sales charges, if any. Total returns for periods less than one year are not annualized. |
(3) | Six months ended April 30, 2015 (unaudited). |
(4) | Annualized. |
(5) | Per-share amount was less than $0.005. |
(6) | March 1, 2010 (commencement of sale) through October 31, 2010. |
(7) | Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended October 31, 2010. |
See Notes to Financial Statements.
22
Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain IRAs are subject to federal income tax withholding, unless you elect not to have withholding apply. Tax will be withheld on the total amount withdrawn even though you may be receiving amounts that are not subject to withholding, such as nondeductible contributions. In such case, excess amounts of withholding could occur. You may adjust your withholding election so that a greater or lesser amount will be withheld.
If you don’t want us to withhold on this amount, you must notify us to not withhold the federal income tax. You may notify us in writing or in certain situations by telephone or through other electronic means. For systematic withdrawals, your withholding election will remain in effect until revoked or changed by filing a new election. You have the right to revoke your election at any time.
Remember, even if you elect not to have income tax withheld, you are liable for paying income tax on the taxable portion of your withdrawal. If you elect not to have income tax withheld or you don’t have enough income tax withheld, you may be responsible for payment of estimated tax. You may incur penalties under the estimated tax rules if your withholding and estimated tax payments are not sufficient. You can reduce or defer the income tax on a distribution by directly or indirectly rolling such distribution over to another IRA or eligible plan. You should consult your tax advisor for additional information.
State tax will be withheld if, at the time of your distribution, your address is within one of the mandatory withholding states and you have federal income tax withheld (or as otherwise required by state law). State taxes will be withheld from your distribution in accordance with the respective state rules.
Distributions you receive from 403(b), 457 and qualified plans are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
A description of the policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund is available without charge, upon request, by calling 1-800-345-2021. It is also available on the "About Us" page of American Century Investments’ website at americancentury.com and on the Securities and Exchange Commission’s website at sec.gov. Information regarding how the investment advisor voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the "About Us" page at americancentury.com. It is also available at sec.gov.
Quarterly Portfolio Disclosure
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-Q. The fund’s Forms N-Q are available on the SEC’s website at sec.gov, and may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The fund also makes its complete schedule of portfolio holdings for the most recent quarter of its fiscal year available on its
website at americancentury.com and, upon request, by calling 1-800-345-2021.
23
Notes |
24
![]() | ||
Contact Us | americancentury.com | |
Automated Information Line | 1-800-345-8765 | |
Investor Services Representative | 1-800-345-2021 or 816-531-5575 | |
Investors Using Advisors | 1-800-378-9878 | |
Business, Not-For-Profit, Employer-Sponsored Retirement Plans | 1-800-345-3533 | |
Banks and Trust Companies, Broker-Dealers, Financial Professionals, Insurance Companies | 1-800-345-6488 | |
Telecommunications Relay Service for the Deaf | 711 | |
American Century Mutual Funds, Inc. | ||
Investment Advisor: American Century Investment Management, Inc. Kansas City, Missouri | ||
This report and the statements it contains are submitted for the general information of our shareholders. The report is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus. | ||
©2015 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-85688 1506 |
SEMIANNUAL REPORT | APRIL 30, 2015 |
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NT Growth Fund
Table of Contents |
Any opinions expressed in this report reflect those of the author as of the date of the report, and do not necessarily represent the opinions of American Century Investments® or any other person in the American Century Investments organization. Any such opinions are subject to change at any time based upon market or other conditions and American Century Investments disclaims any responsibility to update such opinions. These opinions may not be relied upon as investment advice and, because investment decisions made by American Century Investments funds are based on numerous factors, may not be relied upon as an indication of trading intent on behalf of any American Century Investments fund. Security examples are used for representational purposes only and are not intended as recommendations to purchase or sell securities. Performance information for comparative indices and securities is provided to American Century Investments by third party vendors. To the best of American Century Investments’ knowledge, such information is accurate at the time of printing.
President’s Letter |
![]() | Dear Investor: Thank you for reviewing this semiannual report for the six months ended April 30, 2015. It provides a macroeconomic and financial market overview (below), followed by fund performance, a schedule of fund investments, and other financial information. For additional commentary and updated information on fund performance, key factors that affected asset returns, and other insights regarding the investment markets, we encourage you to visit our website, americancentury.com. |
Jonathan Thomas |
Global Divergence in Monetary Policies Influenced Investor Behavior
The six-month reporting period saw big swings in market returns, triggered in part by central bank moves. In October 2014, just before the period started, the U.S. Federal Reserve ended its latest bond-buying program (quantitative easing, QE). As QE wound down, the U.S. economy enjoyed 5% annualized growth (after inflation) in the third quarter of 2014, the highest rate since the third quarter of 2003. But while QE was ending in the U.S., other major central banks were starting or increasing QE as their economies faltered. A “global divergence” of economic growth and monetary policies opened between the U.S. and most of the rest of the developed world.
This divergence helped fuel increased demand for the U.S. dollar and U.S. dollar-denominated assets, and put downward pressure on commodities prices, most notably oil. Though the resulting dollar rally and oil price decline reversed somewhat in April 2015, the dollar remained 9% higher for the reporting period, as measured by the U.S. Dollar Index, while oil remained more than 25% lower, as measured by both Brent and West Texas Intermediate crude oil futures. In this environment, U.S. stocks and bonds posted moderate gains—the S&P 500 Index and the Barclays U.S. Aggregate Bond Index returned 4.40% and 2.06%, respectively.
We expect monetary policy divergence between the U.S. and other major developed economies to continue this year, accompanied by market volatility. This could present both challenges and opportunities for active investment managers. Upward pressures on inflation and interest rates could develop as the massive amount of global monetary stimulus in progress takes hold and economies improve. But we believe lingering constraining forces will likely keep inflation and interest rates relatively low for the next six months. In this environment, we continue to believe in a disciplined, diversified, long-term investment approach, using professionally managed stock and bond portfolios to meet financial goals. We appreciate your continued trust in us.
Sincerely,
![](https://capedge.com/proxy/N-CSRS/0000100334-15-000051/jonathanthomassig.jpg)
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
2
Performance |
Total Returns as of April 30, 2015 | ||||||
Average Annual Returns | ||||||
Ticker Symbol | 6 months(1) | 1 year | 5 years | Since Inception | Inception Date | |
Institutional Class | ACLTX | 5.05% | 12.98% | 13.10% | 8.82% | 5/12/06 |
Russell 1000 Growth Index | — | 6.54% | 16.67% | 15.48% | 9.25% | — |
R6 Class | ACDTX | 5.16% | 13.17% | — | 15.52% | 7/26/13 |
(1) | Total returns for periods less than one year are not annualized. |
Total Annual Fund Operating Expenses | |
Institutional Class | R6 Class |
0.77% | 0.62% |
The total annual fund operating expenses shown is as stated in the fund’s prospectus current as of the date of this report. The prospectus may vary from the expense ratio shown elsewhere in this report because it is based on a different time period, includes acquired fund fees and expenses, and, if applicable, does not include fee waivers or expense reimbursements.
Data presented reflect past performance. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance shown. Investment return and principal value will fluctuate, and redemption value may be more or less than original cost. Data assumes reinvestment of dividends and capital gains, and none of the charts reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. To obtain performance data current to the most recent month end, please call 1-800-345-2021 or visit americancentury.com. For additional information about the fund, please consult the prospectus.
3
Fund Characteristics |
APRIL 30, 2015 | |
Top Ten Holdings | % of net assets |
Apple, Inc. | 6.3% |
PepsiCo, Inc. | 4.2% |
Visa, Inc., Class A | 4.1% |
Comcast Corp., Class A | 2.8% |
Facebook, Inc., Class A | 2.6% |
Exxon Mobil Corp. | 2.4% |
Walt Disney Co. (The) | 2.1% |
Boeing Co. (The) | 2.1% |
Expedia, Inc. | 2.0% |
Lockheed Martin Corp. | 2.0% |
Top Five Industries | % of net assets |
IT Services | 7.6% |
Technology Hardware, Storage and Peripherals | 6.7% |
Software | 6.7% |
Biotechnology | 6.1% |
Specialty Retail | 6.0% |
Types of Investments in Portfolio | % of net assets |
Common Stocks | 98.9% |
Exchange-Traded Funds | 0.6% |
Total Equity Exposure | 99.5% |
Temporary Cash Investments | 0.8% |
Other Assets and Liabilities | (0.3)% |
4
Shareholder Fee Example |
Fund shareholders may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption/exchange fees; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in your fund and to compare these costs with the ongoing cost of investing in other mutual funds.
The example is based on an investment of $1,000 made at the beginning of the period and held for the entire period from November 1, 2014 to April 30, 2015.
Actual Expenses
The table provides information about actual account values and actual expenses for each class. You may use the information, together with the amount you invested, to estimate the expenses that you paid over the period. First, identify the share class you own. Then simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The table also provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio of each class of your fund and an assumed rate of return of 5% per year before expenses, which is not the actual return of a fund’s share class. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) or redemption/exchange fees. Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Beginning Account Value 11/1/14 | Ending Account Value 4/30/15 | Expenses Paid During Period(1) 11/1/14 - 4/30/15 | Annualized Expense Ratio(1) | |
Actual | ||||
Institutional Class | $1,000 | $1,050.50 | $3.91 | 0.77% |
R6 Class | $1,000 | $1,051.60 | $3.15 | 0.62% |
Hypothetical | ||||
Institutional Class | $1,000 | $1,020.98 | $3.86 | 0.77% |
R6 Class | $1,000 | $1,021.72 | $3.11 | 0.62% |
(1) | Expenses are equal to the class's annualized expense ratio listed in the table above, multiplied by the average account value over the period, multiplied by 181, the number of days in the most recent fiscal half-year, divided by 365, to reflect the one-half year period. |
5
Schedule of Investments |
APRIL 30, 2015 (UNAUDITED)
Shares | Value | |||
COMMON STOCKS — 98.9% | ||||
Aerospace and Defense — 4.8% | ||||
Boeing Co. (The) | 152,667 | $ | 21,883,288 | |
Lockheed Martin Corp. | 112,041 | 20,906,850 | ||
Raytheon Co. | 62,730 | 6,523,920 | ||
49,314,058 | ||||
Airlines — 0.6% | ||||
Alaska Air Group, Inc. | 91,996 | 5,893,264 | ||
Automobiles — 0.5% | ||||
Harley-Davidson, Inc. | 87,651 | 4,926,863 | ||
Beverages — 4.2% | ||||
PepsiCo, Inc. | 458,168 | 43,580,940 | ||
Biotechnology — 6.1% | ||||
Alexion Pharmaceuticals, Inc.(1) | 97,013 | 16,417,510 | ||
Biogen Idec, Inc.(1) | 44,526 | 16,649,607 | ||
Gilead Sciences, Inc.(1) | 187,054 | 18,800,798 | ||
Incyte Corp.(1) | 48,499 | 4,712,163 | ||
Regeneron Pharmaceuticals, Inc.(1) | 14,364 | 6,570,955 | ||
63,151,033 | ||||
Capital Markets — 1.0% | ||||
Franklin Resources, Inc. | 201,208 | 10,374,285 | ||
Chemicals — 2.7% | ||||
Dow Chemical Co. (The) | 202,741 | 10,339,791 | ||
PPG Industries, Inc. | 32,661 | 7,236,371 | ||
Sherwin-Williams Co. (The) | 38,178 | 10,613,484 | ||
28,189,646 | ||||
Communications Equipment — 2.4% | ||||
Cisco Systems, Inc. | 262,539 | 7,568,999 | ||
QUALCOMM, Inc. | 258,183 | 17,556,444 | ||
25,125,443 | ||||
Electrical Equipment — 0.5% | ||||
Generac Holdings, Inc.(1) | 128,790 | 5,369,255 | ||
Energy Equipment and Services — 1.2% | ||||
Halliburton Co. | 207,431 | 10,153,747 | ||
National Oilwell Varco, Inc. | 41,531 | 2,259,702 | ||
12,413,449 | ||||
Food and Staples Retailing — 0.6% | ||||
Kroger Co. (The) | 93,995 | 6,477,195 | ||
Food Products — 1.9% | ||||
ConAgra Foods, Inc. | 165,989 | 6,000,503 | ||
Mead Johnson Nutrition Co. | 145,185 | 13,926,145 | ||
19,926,648 | ||||
Health Care Equipment and Supplies — 2.5% | ||||
C.R. Bard, Inc. | 38,495 | 6,412,497 | ||
DENTSPLY International, Inc. | 168,673 | 8,602,323 | ||
Intuitive Surgical, Inc.(1) | 20,616 | 10,225,124 | ||
25,239,944 |
6
Shares | Value | |||
Health Care Providers and Services — 2.2% | ||||
Cardinal Health, Inc. | 85,971 | $ | 7,250,794 | |
Express Scripts Holding Co.(1) | 178,992 | 15,464,909 | ||
22,715,703 | ||||
Health Care Technology — 0.7% | ||||
Cerner Corp.(1) | 100,061 | 7,185,380 | ||
Hotels, Restaurants and Leisure — 2.7% | ||||
Chipotle Mexican Grill, Inc.(1) | 11,505 | 7,148,517 | ||
Las Vegas Sands Corp. | 126,527 | 6,690,748 | ||
Marriott International, Inc., Class A | 111,027 | 8,887,711 | ||
MGM Resorts International(1) | 219,548 | 4,643,440 | ||
27,370,416 | ||||
Household Products — 0.6% | ||||
Church & Dwight Co., Inc. | 81,237 | 6,594,007 | ||
Industrial Conglomerates — 1.8% | ||||
3M Co. | 117,069 | 18,308,421 | ||
Insurance — 0.9% | ||||
Aflac, Inc. | 52,911 | 3,335,509 | ||
American International Group, Inc. | 101,876 | 5,734,600 | ||
9,070,109 | ||||
Internet and Catalog Retail — 2.5% | ||||
Amazon.com, Inc.(1) | 11,909 | 5,022,978 | ||
Expedia, Inc. | 221,890 | 20,908,695 | ||
25,931,673 | ||||
Internet Software and Services — 5.8% | ||||
Facebook, Inc., Class A(1) | 343,767 | 27,078,527 | ||
Google, Inc., Class A(1) | 20,751 | 11,387,526 | ||
LinkedIn Corp., Class A(1) | 25,934 | 6,538,740 | ||
Pandora Media, Inc.(1) | 328,461 | 5,859,744 | ||
VeriSign, Inc.(1) | 88,942 | 5,648,706 | ||
Yelp, Inc.(1) | 85,057 | 3,350,395 | ||
59,863,638 | ||||
IT Services — 7.6% | ||||
Alliance Data Systems Corp.(1) | 39,910 | 11,865,642 | ||
Cognizant Technology Solutions Corp., Class A(1) | 144,435 | 8,455,225 | ||
Fiserv, Inc.(1) | 125,413 | 9,732,049 | ||
Teradata Corp.(1) | 126,385 | 5,559,676 | ||
Visa, Inc., Class A | 646,818 | 42,722,329 | ||
78,334,921 | ||||
Life Sciences Tools and Services — 1.7% | ||||
Illumina, Inc.(1) | 43,474 | 8,010,084 | ||
Mettler-Toledo International, Inc.(1) | 14,676 | 4,652,439 | ||
Waters Corp.(1) | 40,905 | 5,120,897 | ||
17,783,420 | ||||
Machinery — 4.1% | ||||
Caterpillar, Inc. | 216,252 | 18,787,974 | ||
Parker-Hannifin Corp. | 72,464 | 8,649,303 | ||
WABCO Holdings, Inc.(1) | 60,162 | 7,487,161 | ||
Wabtec Corp. | 82,118 | 7,723,198 | ||
42,647,636 |
7
Shares | Value | |||
Media — 5.5% | ||||
Comcast Corp., Class A | 500,022 | $ | 28,881,271 | |
Sirius XM Holdings, Inc.(1) | 1,569,578 | 6,199,833 | ||
Walt Disney Co. (The) | 203,560 | 22,131,043 | ||
57,212,147 | ||||
Metals and Mining — 0.2% | ||||
United States Steel Corp. | 97,954 | 2,352,855 | ||
Multiline Retail — 1.1% | ||||
Macy's, Inc. | 167,465 | 10,823,263 | ||
Oil, Gas and Consumable Fuels — 3.4% | ||||
Concho Resources, Inc.(1) | 82,381 | 10,434,378 | ||
Exxon Mobil Corp. | 281,147 | 24,563,813 | ||
34,998,191 | ||||
Personal Products — 0.9% | ||||
Estee Lauder Cos., Inc. (The), Class A | 111,618 | 9,073,427 | ||
Pharmaceuticals — 2.9% | ||||
Jazz Pharmaceuticals plc(1) | 22,819 | 4,077,755 | ||
Johnson & Johnson | 118,234 | 11,728,813 | ||
Pfizer, Inc. | 148,854 | 5,050,616 | ||
Teva Pharmaceutical Industries Ltd. ADR | 72,694 | 4,392,172 | ||
Zoetis, Inc. | 114,240 | 5,074,541 | ||
30,323,897 | ||||
Real Estate Investment Trusts (REITs) — 0.9% | ||||
Simon Property Group, Inc. | 48,204 | 8,748,544 | ||
Road and Rail — 1.9% | ||||
Union Pacific Corp. | 188,517 | 20,026,161 | ||
Semiconductors and Semiconductor Equipment — 1.5% | ||||
Altera Corp. | 204,034 | 8,504,137 | ||
Skyworks Solutions, Inc. | 45,655 | 4,211,674 | ||
Xilinx, Inc. | 69,256 | 3,002,940 | ||
15,718,751 | ||||
Software — 6.7% | ||||
Adobe Systems, Inc.(1) | 116,298 | 8,845,626 | ||
Electronic Arts, Inc.(1) | 137,529 | 7,989,059 | ||
Intuit, Inc. | 201,808 | 20,247,397 | ||
NetSuite, Inc.(1) | 57,910 | 5,534,459 | ||
Oracle Corp. | 472,371 | 20,604,823 | ||
Splunk, Inc.(1) | 84,746 | 5,622,473 | ||
68,843,837 | ||||
Specialty Retail — 6.0% | ||||
Bed Bath & Beyond, Inc.(1) | 194,107 | 13,676,779 | ||
Gap, Inc. (The) | 164,172 | 6,507,778 | ||
O'Reilly Automotive, Inc.(1) | 74,602 | 16,250,554 | ||
Ross Stores, Inc. | 101,545 | 10,040,770 | ||
TJX Cos., Inc. (The) | 234,141 | 15,111,460 | ||
61,587,341 | ||||
Technology Hardware, Storage and Peripherals — 6.7% | ||||
Apple, Inc. | 518,160 | 64,847,724 | ||
EMC Corp. | 173,267 | 4,662,615 | ||
69,510,339 |
8
Shares | Value | |||
Wireless Telecommunication Services — 1.6% | ||||
SBA Communications Corp., Class A(1) | 138,299 | $ | 16,017,790 | |
TOTAL COMMON STOCKS (Cost $824,032,425) | 1,021,023,890 | |||
EXCHANGE-TRADED FUNDS — 0.6% | ||||
iShares Russell 1000 Growth Index Fund (Cost $6,306,100) | 63,931 | 6,358,577 | ||
TEMPORARY CASH INVESTMENTS — 0.8% | ||||
Repurchase Agreement, Bank of America Merrill Lynch, (collateralized by various U.S. Treasury obligations, 1.375%, 4/30/20, valued at $1,288,020), in a joint trading account at 0.08%, dated 4/30/15, due 5/1/15 (Delivery value $1,265,632) | 1,265,629 | |||
Repurchase Agreement, Credit Suisse First Boston, Inc., (collateralized by various U.S. Treasury obligations, 1.50%, 12/31/18, valued at $3,091,919), in a joint trading account at 0.03%, dated 4/30/15, due 5/1/15 (Delivery value $3,037,514) | 3,037,511 | |||
Repurchase Agreement, Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 3.625%, 2/15/44, valued at $3,618,450), at 0.01%, dated 4/30/15, due 5/1/15 (Delivery value $3,546,001) | 3,546,000 | |||
State Street Institutional Liquid Reserves Fund, Premier Class | 3,362 | 3,362 | ||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $7,852,502) | 7,852,502 | |||
TOTAL INVESTMENT SECURITIES — 100.3% (Cost $838,191,027) | 1,035,234,969 | |||
OTHER ASSETS AND LIABILITIES — (0.3)% | (2,612,644) | |||
TOTAL NET ASSETS — 100.0% | $ | 1,032,622,325 |
NOTES TO SCHEDULE OF INVESTMENTS | ||
ADR | - | American Depositary Receipt |
(1) | Non-income producing. |
See Notes to Financial Statements.
9
Statement of Assets and Liabilities |
APRIL 30, 2015 (UNAUDITED) | |||
Assets | |||
Investment securities, at value (cost of $838,191,027) | $ | 1,035,234,969 | |
Receivable for investments sold | 5,582,403 | ||
Receivable for capital shares sold | 971,803 | ||
Dividends and interest receivable | 272,099 | ||
1,042,061,274 | |||
Liabilities | |||
Payable for investments purchased | 8,787,990 | ||
Accrued management fees | 650,959 | ||
9,438,949 | |||
Net Assets | $ | 1,032,622,325 | |
Net Assets Consist of: | |||
Capital (par value and paid-in surplus) | $ | 762,034,917 | |
Undistributed net investment income | 1,680,213 | ||
Undistributed net realized gain | 71,863,253 | ||
Net unrealized appreciation | 197,043,942 | ||
$ | 1,032,622,325 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | ||||
Institutional Class, $0.01 Par Value | $985,670,628 | 65,683,116 | $15.01 | |||
R6 Class, $0.01 Par Value | $46,951,697 | 3,131,124 | $15.00 |
See Notes to Financial Statements.
10
Statement of Operations |
FOR THE SIX MONTHS ENDED APRIL 30, 2015 (UNAUDITED) | |||
Investment Income (Loss) | |||
Income: | |||
Dividends (net of foreign taxes withheld of $15,822) | $ | 8,400,167 | |
Interest | 3,118 | ||
8,403,285 | |||
Expenses: | |||
Management fees | 4,756,435 | ||
Directors' fees and expenses | 22,346 | ||
Other expenses | 225 | ||
4,779,006 | |||
Net investment income (loss) | 3,624,279 | ||
Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investment transactions | 71,816,936 | ||
Futures contract transactions | 2,886,730 | ||
74,703,666 | |||
Change in net unrealized appreciation (depreciation) on investments | (4,548,154 | ) | |
Net realized and unrealized gain (loss) | 70,155,512 | ||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 73,779,791 |
See Notes to Financial Statements.
11
Statement of Changes in Net Assets |
SIX MONTHS ENDED APRIL 30, 2015 (UNAUDITED) AND YEAR ENDED OCTOBER 31, 2014 | ||||||
Increase (Decrease) in Net Assets | April 30, 2015 | October 31, 2014 | ||||
Operations | ||||||
Net investment income (loss) | $ | 3,624,279 | $ | 5,886,437 | ||
Net realized gain (loss) | 74,703,666 | 190,149,182 | ||||
Change in net unrealized appreciation (depreciation) | (4,548,154 | ) | (42,727,202 | ) | ||
Net increase (decrease) in net assets resulting from operations | 73,779,791 | 153,308,417 | ||||
Distributions to Shareholders | ||||||
From net investment income: | ||||||
Institutional Class | (6,018,552 | ) | (5,994,161 | ) | ||
R6 Class | (241,854 | ) | (63,884 | ) | ||
From net realized gains: | ||||||
Institutional Class | (176,148,301 | ) | (39,897,401 | ) | ||
R6 Class | (5,428,799 | ) | (337,944 | ) | ||
Decrease in net assets from distributions | (187,837,506 | ) | (46,293,390 | ) | ||
Capital Share Transactions | ||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | (124,340,548 | ) | 160,105,574 | |||
Net increase (decrease) in net assets | (238,398,263 | ) | 267,120,601 | |||
Net Assets | ||||||
Beginning of period | 1,271,020,588 | 1,003,899,987 | ||||
End of period | $ | 1,032,622,325 | $ | 1,271,020,588 | ||
Undistributed net investment income | $ | 1,680,213 | $ | 4,316,340 |
See Notes to Financial Statements.
12
Notes to Financial Statements |
APRIL 30, 2015 (UNAUDITED)
1. Organization
American Century Mutual Funds, Inc. (the corporation) is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company and is organized as a Maryland corporation. NT Growth Fund (the fund) is one fund in a series issued by the corporation. The fund is diversified as defined under the 1940 Act. The fund's investment objective is to seek long-term capital growth. The fund is not permitted to invest in securities issued by companies assigned the Global Industry Classification Standard for the tobacco industry.
The fund offers the Institutional Class and the R6 Class, which have different fees and expenses. The difference in the fee structures between the classes is not the result of any difference in advisory or custodial fees or other expenses related to management of the fund’s assets, which do not vary by class. The fund’s R6 Class shares are available for purchase exclusively by certain American Century Investments funds of funds that are offered only through employer-sponsored retirement plans where a financial intermediary provides retirement recordkeeping services to plan participants. Because financial intermediaries do not receive any service, distribution or administrative fees for offering such funds of funds, American Century Investment Management, Inc. (ACIM) (the investment advisor) is able to charge the R6 Class a lower unified management fee.
2. Significant Accounting Policies
The following is a summary of significant accounting policies consistently followed by the fund in preparation of its financial statements. The fund is an investment company and follows accounting and reporting guidance in accordance with accounting principles generally accepted in the United States of America. This may require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from these estimates. Management evaluated the impact of events or transactions occurring through the date the financial statements were issued that would merit recognition or disclosure.
Investment Valuations — The fund determines the fair value of its investments and computes its net asset value per share at 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. The Board of Directors has adopted valuation policies and procedures to guide the investment advisor in the fund’s investment valuation process and to provide methodologies for the oversight of the fund’s pricing function.
Equity securities that are listed or traded on a domestic securities exchange are valued at the last reported sales price or at the official closing price as provided by the exchange. Equity securities traded on foreign securities exchanges are generally valued at the closing price of such securities on the exchange where primarily traded or at the close of the NYSE, if that is earlier. If no last sales price is reported, or if local convention or regulation so provides, the mean of the latest bid and asked prices may be used. Securities traded over-the-counter are valued at the mean of the latest bid and asked prices, the last sales price, or the official closing price.
Fixed income securities maturing within 60 days at the time of purchase may be valued at cost, plus or minus any amortized discount or premium or at the evaluated mean as provided by an independent pricing service. Evaluated mean prices are commonly derived through utilization of market models, which may consider, among other factors: trade data, quotations from 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.
Open-end management investment companies are valued at the reported net asset value per share. Repurchase agreements are valued at cost, which approximates fair value. Exchange-traded futures contracts are valued at the settlement price as provided by the appropriate clearing corporation.
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If the fund determines that the market price for an investment is not readily available or the valuation methods mentioned above do not reflect an investment’s fair value, such investment is valued as determined in good faith by the Board of Directors or its delegate, in accordance with policies and procedures adopted by the Board of Directors. In its determination of fair value, the fund may review several factors including, but not limited to, market information regarding the specific investment or comparable investments and correlation with other investment types, futures indices or general market indicators. Circumstances that may cause the fund to use these procedures to value an investment include, but are not limited to: an investment has been declared in default or is distressed; trading in a security has been suspended during the trading day or a security is not actively trading on its principal exchange; prices received from a regular pricing source are deemed unreliable; or there is a foreign market holiday and no trading occurred.
The fund monitors for significant events occurring after the close of an investment’s primary exchange but before the fund’s net asset value per share is determined. Significant events may include, but are not limited to: corporate announcements and transactions; governmental action and political unrest that could impact a specific investment or an investment sector; or armed conflicts, natural disasters and similar events that could affect investments in a specific country or region. The fund also monitors for significant fluctuations between domestic and foreign markets, as evidenced by the U.S. market or such other indicators that the Board of Directors, or its delegate, deems appropriate. If significant fluctuations in foreign markets are identified, the fund may apply a model-derived factor to the closing price of equity securities traded on foreign securities exchanges. The factor is based on observable market data as provided by an independent pricing service.
Security Transactions — Security transactions are accounted for as of the trade date. Net realized gains and losses are determined on the identified cost basis, which is also used for federal income tax purposes.
Investment Income — Dividend income less foreign taxes withheld, if any, is recorded as of the ex-dividend date. Distributions received on securities that represent a return of capital or long-term capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The fund may estimate the components of distributions received that may be considered nontaxable distributions or long-term capital gain distributions for income tax purposes. Interest income is recorded on the accrual basis and includes accretion of discounts and amortization of premiums.
Repurchase Agreements — The fund may enter into repurchase agreements with institutions that ACIM has determined are creditworthy pursuant to criteria adopted by the Board of Directors. The fund requires that the collateral, represented by securities, received in a repurchase transaction be transferred to the custodian in a manner sufficient to enable the fund to obtain those securities in the event of a default under the repurchase agreement. ACIM monitors, on a daily basis, the securities transferred to ensure the value, including accrued interest, of the securities under each repurchase agreement is equal to or greater than amounts owed to the fund under each repurchase agreement.
Joint Trading Account — Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the fund, along with certain other funds in the American Century Investments family of funds, may transfer uninvested cash balances into a joint trading account. These balances are invested in one or more repurchase agreements that are collateralized by U.S. Treasury or Agency obligations.
Segregated Assets — In accordance with the 1940 Act, the fund segregates assets on its books and records to cover futures contracts. ACIM monitors, on a daily basis, the securities segregated to ensure the fund designates a sufficient amount of liquid assets, marked-to-market daily. The fund may also receive assets or be required to pledge assets at the custodian bank or with a broker for margin requirements on futures contracts.
Income Tax Status — It is the fund’s policy to distribute substantially all net investment income and net realized gains to shareholders and to otherwise qualify as a regulated investment company under provisions of the Internal Revenue Code. Accordingly, no provision has been made for income taxes. The fund files U.S. federal, state, local and non-U.S. tax returns as applicable. The fund's tax returns are subject to examination by the relevant taxing authority until expiration of the applicable statute of limitations, which is generally three years from the date of filing but can be longer in certain jurisdictions. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination and for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
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Multiple Class — All shares of the fund represent an equal pro rata interest in the net assets of the class to which such shares belong, and have identical voting, dividend, liquidation and other rights and the same terms and conditions, except for class specific expenses and exclusive rights to vote on matters affecting only individual classes. Income, non-class specific expenses, and realized and unrealized capital gains and losses of the fund are allocated to each class of shares based on their relative net assets.
Distributions to Shareholders — Distributions from net investment income and net realized gains, if any, are generally declared and paid annually. The fund may elect to treat a portion of its payment to a redeeming shareholder, which represents the pro rata share of undistributed net investment income and net realized gains, as a distribution for federal income tax purposes (tax equalization).
Indemnifications — Under the corporation’s organizational documents, its officers and directors are indemnified against certain liabilities arising out of the performance of their duties to the fund. In addition, in the normal course of business, the fund enters into contracts that provide general indemnifications. The maximum exposure under these arrangements is unknown as this would involve future claims that may be made against a fund. The risk of material loss from such claims is considered by management to be remote.
3. Fees and Transactions with Related Parties
Certain officers and directors of the corporation are also officers and/or directors of American Century Companies, Inc. (ACC). The corporation’s investment advisor, ACIM, the corporation's distributor, American Century Investment Services, Inc., and the corporation’s transfer agent, American Century Services, LLC, are wholly owned, directly or indirectly, by ACC. Various funds issued by American Century Asset Allocation Portfolios, Inc. own, in aggregate, 100% of the shares of the fund. Related parties do not invest in the fund for the purpose of exercising management or control.
Management Fees — The corporation has entered into a management agreement with ACIM, under which ACIM provides the fund with investment advisory and management services in exchange for a single, unified management fee (the fee) per class. The agreement provides that all expenses of managing and operating the fund, except distribution and service fees, brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), and extraordinary expenses, will be paid by ACIM. The fee is computed and accrued daily based on each class's daily net assets and paid monthly in arrears. The rate of the fee is determined by applying a fee rate calculation formula. This formula takes into account the fund’s assets as well as certain assets, if any, of other clients of the investment advisor outside the American Century Investments family of funds (such as subadvised funds and separate accounts) that have very similar investment teams and investment strategies (strategy assets). The strategy assets of the fund also include the assets of Growth Fund, one fund in a series issued by the corporation. The annual management fee schedule ranges from 0.600% to 0.790% for the Institutional Class and 0.450% to 0.640% for the R6 Class. The effective annual management fee for each class for the six months ended April 30, 2015 was 0.76% for the Institutional Class and 0.61% for the R6 Class.
Directors' Fees and Expenses — The Board of Directors is responsible for overseeing the investment advisor’s management and operations of the fund. The directors receive detailed information about the fund and its investment advisor regularly throughout the year, and meet at least quarterly with management of the investment advisor to review reports about fund operations. The fund’s officers do not receive compensation from the fund.
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the six months ended April 30, 2015 were $569,910,447 and $881,334,808, respectively.
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5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended April 30, 2015 | Year ended October 31, 2014 | |||||||||
Shares | Amount | Shares | Amount | |||||||
Institutional Class/Shares Authorized | 300,000,000 | 300,000,000 | ||||||||
Sold | 8,478,417 | $ | 127,901,992 | 10,717,121 | $ | 168,204,864 | ||||
Issued in reinvestment of distributions | 12,910,478 | 182,166,853 | 3,073,782 | 45,891,562 | ||||||
Redeemed | (29,126,379 | ) | (448,314,118 | ) | (4,925,067 | ) | (79,243,577 | ) | ||
(7,737,484 | ) | (138,245,273 | ) | 8,865,836 | 134,852,849 | |||||
R6 Class/Shares Authorized | 50,000,000 | 50,000,000 | ||||||||
Sold | 1,958,675 | 29,437,621 | 1,838,061 | 28,823,154 | ||||||
Issued in reinvestment of distributions | 402,459 | 5,670,653 | 26,932 | 401,828 | ||||||
Redeemed | (1,383,903 | ) | (21,203,549 | ) | (250,670 | ) | (3,972,257 | ) | ||
977,231 | 13,904,725 | 1,614,323 | 25,252,725 | |||||||
Net increase (decrease) | (6,760,253 | ) | $ | (124,340,548 | ) | 10,480,159 | $ | 160,105,574 |
6. Fair Value Measurements
The fund’s investments valuation process is based on several considerations and may use multiple inputs to determine the fair value of the investments held by the fund. In conformity with accounting principles generally accepted in the United States of America, the inputs used to determine a valuation are classified into three broad levels.
• | Level 1 valuation inputs consist of unadjusted quoted prices in an active market for identical investments. |
• | Level 2 valuation inputs consist of direct or indirect observable market data (including quoted prices for comparable investments, evaluations of subsequent market events, interest rates, prepayment speeds, credit risk, etc.). These inputs also consist of quoted prices for identical investments initially expressed in local currencies that are adjusted through translation into U.S. dollars. |
• | Level 3 valuation inputs consist of unobservable data (including a fund’s own assumptions). |
The level classification is based on the lowest level input that is significant to the fair valuation measurement. The valuation inputs are not necessarily an indication of the risks associated with investing in these securities or other financial instruments. There were no significant transfers between levels during the period.
The following is a summary of the level classifications as of period end. The Schedule of Investments provides additional information on the fund’s portfolio holdings.
Level 1 | Level 2 | Level 3 | ||||||
Assets | ||||||||
Investment Securities | ||||||||
Common Stocks | $ | 1,021,023,890 | — | — | ||||
Exchange-Traded Funds | 6,358,577 | — | — | |||||
Temporary Cash Investments | 3,362 | $ | 7,849,140 | — | ||||
$ | 1,027,385,829 | $ | 7,849,140 | — |
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7. Derivative Instruments
Equity Price Risk — The fund is subject to equity price risk in the normal course of pursuing its investment objectives. A fund may enter into futures contracts based on an equity index in order to manage its exposure to changes in market conditions. A fund may purchase futures contracts to gain exposure to increases in market value or sell futures contracts to protect against a decline in market value. Upon entering into a futures contract, a fund is required to deposit either cash or securities in an amount equal to a certain percentage of the contract value (initial margin). Subsequent payments (variation margin) are made or received daily, in cash, by a fund. The variation margin is equal to the daily change in the contract value and is recorded as unrealized gains and losses. A fund recognizes a realized gain or loss when the contract is closed or expires. Net realized and unrealized gains or losses occurring during the holding period of futures contracts are a component of net realized gain (loss) on futures contract transactions and change in net unrealized appreciation (depreciation) on futures contracts, respectively. One of the risks of entering into futures contracts is the possibility that the change in value of the contract may not correlate with the changes in value of the underlying securities. During the period, the fund purchased equity price risk derivative instruments for temporary investment purposes.
At period end, the fund did not have any derivative instruments disclosed on the Statement of Assets and Liabilities. For the six months ended April 30, 2015, the effect of equity price risk derivative instruments on the Statement of Operations was $2,886,730 in net realized gain (loss) on futures contract transactions.
8. Risk Factors
The fund’s investment process may result in high portfolio turnover, which could mean high transaction costs, affecting both performance and capital gains tax liabilities to investors.
9. Federal Tax Information
The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
As of April 30, 2015, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $ | 844,796,160 | |
Gross tax appreciation of investments | $ | 200,451,128 | |
Gross tax depreciation of investments | (10,012,319 | ) | |
Net tax appreciation (depreciation) of investments | $ | 190,438,809 |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales.
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Financial Highlights |
For a Share Outstanding Throughout the Years Ended October 31 (except as noted) | |||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||
Income From Investment Operations: | Distributions From: | 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 | Net Investment Income | Net Realized Gains | Total Distributions | 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) | |||
Institutional Class | |||||||||||||||
2015(3) | $16.82 | 0.04 | 0.65 | 0.69 | (0.08) | (2.42) | (2.50) | $15.01 | 5.05% | 0.77%(4) | 0.57%(4) | 46% | $985,671 | ||
2014 | $15.42 | 0.08 | 2.02 | 2.10 | (0.09) | (0.61) | (0.70) | $16.82 | 14.17% | 0.77% | 0.50% | 119% | $1,234,784 | ||
2013 | $12.72 | 0.12 | 3.08 | 3.20 | (0.10) | (0.40) | (0.50) | $15.42 | 26.05% | 0.77% | 0.85% | 77% | $995,575 | ||
2012 | $11.92 | 0.09 | 1.09 | 1.18 | (0.08) | (0.30) | (0.38) | $12.72 | 10.33% | 0.77% | 0.71% | 87% | $635,906 | ||
2011 | $11.06 | 0.09 | 0.85 | 0.94 | (0.08) | — | (0.08) | $11.92 | 8.48% | 0.78% | 0.78% | 95% | $461,845 | ||
2010 | $9.34 | 0.06 | 1.71 | 1.77 | (0.05) | — | (0.05) | $11.06 | 18.94% | 0.79% | 0.63% | 95% | $340,417 | ||
R6 Class | |||||||||||||||
2015(3) | $16.82 | 0.05 | 0.66 | 0.71 | (0.11) | (2.42) | (2.53) | $15.00 | 5.16% | 0.62%(4) | 0.72%(4) | 46% | $46,952 | ||
2014 | $15.43 | 0.10 | 2.01 | 2.11 | (0.11) | (0.61) | (0.72) | $16.82 | 14.27% | 0.62% | 0.65% | 119% | $36,237 | ||
2013(5) | $14.38 | —(6) | 1.05 | 1.05 | — | — | — | $15.43 | 7.30% | 0.62%(4) | 0.09%(4) | 77%(7) | $8,325 |
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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) | Six months ended April 30, 2015 (unaudited). |
(4) | Annualized. |
(5) | July 26, 2013 (commencement of sale) through October 31, 2013. |
(6) | Per-share amount was less than $0.005. |
(7) | Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended October 31, 2013. |
See Notes to Financial Statements.
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Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain IRAs are subject to federal income tax withholding, unless you elect not to have withholding apply. Tax will be withheld on the total amount withdrawn even though you may be receiving amounts that are not subject to withholding, such as nondeductible contributions. In such case, excess amounts of withholding could occur. You may adjust your withholding election so that a greater or lesser amount will be withheld.
If you don’t want us to withhold on this amount, you must notify us to not withhold the federal income tax. You may notify us in writing or in certain situations by telephone or through other electronic means. For systematic withdrawals, your withholding election will remain in effect until revoked or changed by filing a new election. You have the right to revoke your election at any time.
Remember, even if you elect not to have income tax withheld, you are liable for paying income tax on the taxable portion of your withdrawal. If you elect not to have income tax withheld or you don’t have enough income tax withheld, you may be responsible for payment of estimated tax. You may incur penalties under the estimated tax rules if your withholding and estimated tax payments are not sufficient. You can reduce or defer the income tax on a distribution by directly or indirectly rolling such distribution over to another IRA or eligible plan. You should consult your tax advisor for additional information.
State tax will be withheld if, at the time of your distribution, your address is within one of the mandatory withholding states and you have federal income tax withheld (or as otherwise required by state law). State taxes will be withheld from your distribution in accordance with the respective state rules.
Distributions you receive from 403(b), 457 and qualified plans are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
A description of the policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund is available without charge, upon request, by calling 1-800-345-2021. It is also available on the "About Us" page of American Century Investments’ website at americancentury.com and on the Securities and Exchange Commission’s website at sec.gov. Information regarding how the investment advisor voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the "About Us" page at americancentury.com. It is also available at sec.gov.
Quarterly Portfolio Disclosure
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-Q. The fund’s Forms N-Q are available on the SEC’s website at sec.gov, and may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The fund also makes its complete schedule of portfolio holdings for the most recent quarter of its fiscal year available on its
website at americancentury.com and, upon request, by calling 1-800-345-2021.
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![]() | ||
Contact Us | americancentury.com | |
Automated Information Line | 1-800-345-8765 | |
Investor Services Representative | 1-800-345-2021 or 816-531-5575 | |
Investors Using Advisors | 1-800-378-9878 | |
Business, Not-For-Profit, Employer-Sponsored Retirement Plans | 1-800-345-3533 | |
Banks and Trust Companies, Broker-Dealers, Financial Professionals, Insurance Companies | 1-800-345-6488 | |
Telecommunications Relay Service for the Deaf | 711 | |
American Century Mutual Funds, Inc. | ||
Investment Advisor: American Century Investment Management, Inc. Kansas City, Missouri | ||
This report and the statements it contains are submitted for the general information of our shareholders. The report is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus. | ||
©2015 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-85695 1506 |
SEMIANNUAL REPORT | APRIL 30, 2015 |
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NT Heritage Fund
Table of Contents |
Any opinions expressed in this report reflect those of the author as of the date of the report, and do not necessarily represent the opinions of American Century Investments® or any other person in the American Century Investments organization. Any such opinions are subject to change at any time based upon market or other conditions and American Century Investments disclaims any responsibility to update such opinions. These opinions may not be relied upon as investment advice and, because investment decisions made by American Century Investments funds are based on numerous factors, may not be relied upon as an indication of trading intent on behalf of any American Century Investments fund. Security examples are used for representational purposes only and are not intended as recommendations to purchase or sell securities. Performance information for comparative indices and securities is provided to American Century Investments by third party vendors. To the best of American Century Investments’ knowledge, such information is accurate at the time of printing.
President’s Letter |
![]() | Dear Investor: Thank you for reviewing this semiannual report for the six months ended April 30, 2015. It provides a macroeconomic and financial market overview (below), followed by fund performance, a schedule of fund investments, and other financial information. For additional commentary and updated information on fund performance, key factors that affected asset returns, and other insights regarding the investment markets, we encourage you to visit our website, americancentury.com. |
Jonathan Thomas |
Global Divergence in Monetary Policies Influenced Investor Behavior
The six-month reporting period saw big swings in market returns, triggered in part by central bank moves. In October 2014, just before the period started, the U.S. Federal Reserve ended its latest bond-buying program (quantitative easing, QE). As QE wound down, the U.S. economy enjoyed 5% annualized growth (after inflation) in the third quarter of 2014, the highest rate since the third quarter of 2003. But while QE was ending in the U.S., other major central banks were starting or increasing QE as their economies faltered. A “global divergence” of economic growth and monetary policies opened between the U.S. and most of the rest of the developed world.
This divergence helped fuel increased demand for the U.S. dollar and U.S. dollar-denominated assets, and put downward pressure on commodities prices, most notably oil. Though the resulting dollar rally and oil price decline reversed somewhat in April 2015, the dollar remained 9% higher for the reporting period, as measured by the U.S. Dollar Index, while oil remained more than 25% lower, as measured by both Brent and West Texas Intermediate crude oil futures. In this environment, U.S. stocks and bonds posted moderate gains—the S&P 500 Index and the Barclays U.S. Aggregate Bond Index returned 4.40% and 2.06%, respectively.
We expect monetary policy divergence between the U.S. and other major developed economies to continue this year, accompanied by market volatility. This could present both challenges and opportunities for active investment managers. Upward pressures on inflation and interest rates could develop as the massive amount of global monetary stimulus in progress takes hold and economies improve. But we believe lingering constraining forces will likely keep inflation and interest rates relatively low for the next six months. In this environment, we continue to believe in a disciplined, diversified, long-term investment approach, using professionally managed stock and bond portfolios to meet financial goals. We appreciate your continued trust in us.
Sincerely,
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Jonathan Thomas
President and Chief Executive Officer
American Century Investments
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Performance |
Total Returns as of April 30, 2015 | ||||||
Average Annual Returns | ||||||
Ticker Symbol | 6 months(1) | 1 year | 5 years | Since Inception | Inception Date | |
Institutional Class | ACLWX | 9.08% | 17.05% | 12.89% | 5.88% | 5/12/06 |
Russell Midcap Growth Index | — | 7.77% | 16.46% | 15.58% | 8.94% | — |
R6 Class | ACDUX | 9.22% | 17.19% | — | 14.47% | 7/26/13 |
(1) | Total returns for periods less than one year are not annualized. |
Total Annual Fund Operating Expenses | |
Institutional Class | R6 Class |
0.80% | 0.65% |
The total annual fund operating expenses shown is as stated in the fund’s prospectus current as of the date of this report. The prospectus may vary from the expense ratio shown elsewhere in this report because it is based on a different time period, includes acquired fund fees and expenses, and, if applicable, does not include fee waivers or expense reimbursements.
Data presented reflect past performance. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance shown. Investment return and principal value will fluctuate, and redemption value may be more or less than original cost. Data assumes reinvestment of dividends and capital gains, and none of the charts reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. To obtain performance data current to the most recent month end, please call 1-800-345-2021 or visit americancentury.com. For additional information about the fund, please consult the prospectus.
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Fund Characteristics |
APRIL 30, 2015 | |
Top Ten Holdings | % of net assets |
Electronic Arts, Inc. | 3.4% |
SBA Communications Corp., Class A | 3.0% |
Constellation Brands, Inc., Class A | 2.4% |
Teleflex, Inc. | 2.2% |
Affiliated Managers Group, Inc. | 2.2% |
Canadian Pacific Railway Ltd., New York Shares | 2.1% |
Middleby Corp. | 2.0% |
Intuit, Inc. | 1.8% |
Charter Communications, Inc., Class A | 1.8% |
CoStar Group, Inc. | 1.7% |
Top Five Industries | % of net assets |
Software | 7.0% |
Specialty Retail | 6.4% |
Machinery | 5.6% |
Beverages | 4.2% |
Health Care Equipment and Supplies | 3.9% |
Types of Investments in Portfolio | % of net assets |
Common Stocks | 97.1% |
Temporary Cash Investments | 2.5% |
Other Assets and Liabilities | 0.4% |
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Shareholder Fee Example |
Fund shareholders may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption/exchange fees; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in your fund and to compare these costs with the ongoing cost of investing in other mutual funds.
The example is based on an investment of $1,000 made at the beginning of the period and held for the entire period from November 1, 2014 to April 30, 2015.
Actual Expenses
The table provides information about actual account values and actual expenses for each class. You may use the information, together with the amount you invested, to estimate the expenses that you paid over the period. First, identify the share class you own. Then simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The table also provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio of each class of your fund and an assumed rate of return of 5% per year before expenses, which is not the actual return of a fund’s share class. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) or redemption/exchange fees. Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Beginning Account Value 11/1/14 | Ending Account Value 4/30/15 | Expenses Paid During Period(1) 11/1/14 - 4/30/15 | Annualized Expense Ratio(1) | |
Actual | ||||
Institutional Class | $1,000 | $1,090.80 | $4.15 | 0.80% |
R6 Class | $1,000 | $1,092.20 | $3.37 | 0.65% |
Hypothetical | ||||
Institutional Class | $1,000 | $1,020.83 | $4.01 | 0.80% |
R6 Class | $1,000 | $1,021.57 | $3.26 | 0.65% |
(1) | Expenses are equal to the class's annualized expense ratio listed in the table above, multiplied by the average account value over the period, multiplied by 181, the number of days in the most recent fiscal half-year, divided by 365, to reflect the one-half year period. |
5
Schedule of Investments |
APRIL 30, 2015 (UNAUDITED)
Shares | Value | |||
COMMON STOCKS — 97.1% | ||||
Aerospace and Defense — 2.0% | ||||
B/E Aerospace, Inc. | 86,896 | $ | 5,195,512 | |
Esterline Technologies Corp.(1) | 65,405 | 7,278,922 | ||
12,474,434 | ||||
Airlines — 1.2% | ||||
Spirit Airlines, Inc.(1) | 104,867 | 7,180,243 | ||
Auto Components — 1.3% | ||||
BorgWarner, Inc. | 135,600 | 8,027,520 | ||
Banks — 2.5% | ||||
East West Bancorp, Inc. | 115,275 | 4,679,012 | ||
Signature Bank(1) | 39,092 | 5,241,847 | ||
SVB Financial Group(1) | 38,012 | 5,046,473 | ||
14,967,332 | ||||
Beverages — 4.2% | ||||
Boston Beer Co., Inc. (The), Class A(1) | 11,800 | 2,924,040 | ||
Brown-Forman Corp., Class B | 89,191 | 8,047,704 | ||
Constellation Brands, Inc., Class A(1) | 125,488 | 14,549,079 | ||
25,520,823 | ||||
Biotechnology — 2.2% | ||||
Alnylam Pharmaceuticals, Inc.(1) | 26,740 | 2,724,004 | ||
AMAG Pharmaceuticals, Inc.(1) | 60,346 | 3,075,836 | ||
Regeneron Pharmaceuticals, Inc.(1) | 6,499 | 2,973,032 | ||
Vertex Pharmaceuticals, Inc.(1) | 39,250 | 4,838,740 | ||
13,611,612 | ||||
Building Products — 1.0% | ||||
Lennox International, Inc. | 60,056 | 6,363,534 | ||
Capital Markets — 2.2% | ||||
Affiliated Managers Group, Inc.(1) | 60,362 | 13,649,659 | ||
Commercial Services and Supplies — 1.7% | ||||
KAR Auction Services, Inc. | 172,068 | 6,402,650 | ||
Stericycle, Inc.(1) | 31,947 | 4,262,688 | ||
10,665,338 | ||||
Communications Equipment — 3.0% | ||||
Juniper Networks, Inc. | 232,916 | 6,155,970 | ||
Motorola Solutions, Inc. | 105,124 | 6,281,159 | ||
Palo Alto Networks, Inc.(1) | 40,033 | 5,913,675 | ||
18,350,804 | ||||
Consumer Finance — 0.5% | ||||
Discover Financial Services | 53,189 | 3,083,366 | ||
Containers and Packaging — 1.6% | ||||
Ball Corp. | 87,640 | 6,433,652 | ||
Berry Plastics Group, Inc.(1) | 100,132 | 3,426,517 | ||
9,860,169 | ||||
Distributors — 0.3% | ||||
LKQ Corp.(1) | 60,024 | 1,624,850 |
6
Shares | Value | |||
Diversified Telecommunication Services — 0.5% | ||||
Zayo Group Holdings, Inc.(1) | 112,355 | $ | 2,983,025 | |
Electrical Equipment — 0.8% | ||||
Acuity Brands, Inc. | 30,996 | 5,174,782 | ||
Electronic Equipment, Instruments and Components — 0.9% | ||||
TE Connectivity Ltd. | 78,646 | 5,233,891 | ||
Energy Equipment and Services — 0.9% | ||||
Patterson-UTI Energy, Inc. | 165,073 | 3,689,382 | ||
Weatherford International plc(1) | 113,179 | 1,646,754 | ||
5,336,136 | ||||
Food and Staples Retailing — 2.1% | ||||
Costco Wholesale Corp. | 44,581 | 6,377,312 | ||
United Natural Foods, Inc.(1) | 41,299 | 2,786,030 | ||
Whole Foods Market, Inc. | 77,239 | 3,688,935 | ||
12,852,277 | ||||
Food Products — 2.1% | ||||
Hain Celestial Group, Inc. (The)(1) | 75,623 | 4,555,530 | ||
Hershey Co. (The) | 50,175 | 4,612,086 | ||
WhiteWave Foods Co., Class A(1) | 78,860 | 3,467,474 | ||
12,635,090 | ||||
Health Care Equipment and Supplies — 3.9% | ||||
Cooper Cos., Inc. (The) | 26,457 | 4,711,198 | ||
DexCom, Inc.(1) | 40,488 | 2,735,774 | ||
NuVasive, Inc.(1) | 66,400 | 2,970,072 | ||
Teleflex, Inc. | 111,440 | 13,702,662 | ||
24,119,706 | ||||
Health Care Providers and Services — 3.7% | ||||
AmerisourceBergen Corp. | 66,359 | 7,584,834 | ||
Catamaran Corp.(1) | 51,542 | 3,059,018 | ||
Team Health Holdings, Inc.(1) | 96,903 | 5,772,512 | ||
Universal Health Services, Inc., Class B | 51,910 | 6,070,874 | ||
22,487,238 | ||||
Hotels, Restaurants and Leisure — 1.5% | ||||
Jack in the Box, Inc. | 28,961 | 2,512,946 | ||
La Quinta Holdings, Inc.(1) | 159,067 | 3,830,333 | ||
Papa John's International, Inc. | 50,235 | 3,082,922 | ||
9,426,201 | ||||
Household Durables — 2.6% | ||||
Harman International Industries, Inc. | 44,612 | 5,816,512 | ||
Jarden Corp.(1) | 64,821 | 3,317,539 | ||
Mohawk Industries, Inc.(1) | 37,726 | 6,545,461 | ||
15,679,512 | ||||
Internet and Catalog Retail — 0.7% | ||||
TripAdvisor, Inc.(1) | 55,942 | 4,502,772 | ||
Internet Software and Services — 3.6% | ||||
CoStar Group, Inc.(1) | 52,045 | 10,639,559 | ||
LinkedIn Corp., Class A(1) | 25,060 | 6,318,378 | ||
Twitter, Inc.(1) | 125,522 | 4,890,337 | ||
21,848,274 |
7
Shares | Value | |||
IT Services — 2.3% | ||||
Alliance Data Systems Corp.(1) | 30,641 | $ | 9,109,876 | |
Vantiv, Inc., Class A(1) | 119,096 | 4,656,653 | ||
13,766,529 | ||||
Leisure Products — 1.5% | ||||
Brunswick Corp. | 67,420 | 3,373,697 | ||
Polaris Industries, Inc. | 43,028 | 5,893,115 | ||
9,266,812 | ||||
Machinery — 5.6% | ||||
Flowserve Corp. | 97,696 | 5,718,147 | ||
Ingersoll-Rand plc | 97,717 | 6,433,687 | ||
Middleby Corp.(1) | 121,146 | 12,276,936 | ||
Snap-On, Inc. | 34,195 | 5,113,862 | ||
WABCO Holdings, Inc.(1) | 38,389 | 4,777,511 | ||
34,320,143 | ||||
Media — 1.8% | ||||
Charter Communications, Inc., Class A(1) | 59,277 | 11,088,356 | ||
Multiline Retail — 1.7% | ||||
Burlington Stores, Inc.(1) | 62,665 | 3,231,634 | ||
Dollar Tree, Inc.(1) | 97,385 | 7,441,188 | ||
10,672,822 | ||||
Oil, Gas and Consumable Fuels — 3.9% | ||||
Antero Resources Corp.(1) | 126,034 | 5,584,567 | ||
Cabot Oil & Gas Corp. | 98,010 | 3,314,698 | ||
Concho Resources, Inc.(1) | 71,919 | 9,109,261 | ||
Gulfport Energy Corp.(1) | 65,332 | 3,197,348 | ||
Oasis Petroleum, Inc.(1) | 136,161 | 2,442,728 | ||
23,648,602 | ||||
Pharmaceuticals — 3.2% | ||||
Endo International plc(1) | 97,406 | 8,188,436 | ||
Pacira Pharmaceuticals, Inc.(1) | 36,683 | 2,512,052 | ||
Zoetis, Inc. | 205,377 | 9,122,846 | ||
19,823,334 | ||||
Professional Services — 1.4% | ||||
Nielsen NV | 187,957 | 8,446,788 | ||
Real Estate Management and Development — 1.4% | ||||
Jones Lang LaSalle, Inc. | 52,956 | 8,793,873 | ||
Road and Rail — 3.7% | ||||
Canadian Pacific Railway Ltd., New York Shares | 66,749 | 12,721,024 | ||
J.B. Hunt Transport Services, Inc. | 57,260 | 4,993,072 | ||
Kansas City Southern | 46,373 | 4,752,769 | ||
22,466,865 | ||||
Semiconductors and Semiconductor Equipment — 3.4% | ||||
Altera Corp. | 83,652 | 3,486,615 | ||
Avago Technologies Ltd. | 86,887 | 10,155,353 | ||
Freescale Semiconductor Ltd.(1) | 82,128 | 3,210,384 | ||
NXP Semiconductors NV(1) | 42,226 | 4,058,763 | ||
20,911,115 | ||||
Software — 7.0% | ||||
Electronic Arts, Inc.(1) | 357,477 | 20,765,839 |
8
Shares | Value | |||
Intuit, Inc. | 112,298 | $ | 11,266,858 | |
NetSuite, Inc.(1) | 38,058 | 3,637,203 | ||
Splunk, Inc.(1) | 62,237 | 4,129,114 | ||
Tyler Technologies, Inc.(1) | 24,202 | 2,951,434 | ||
42,750,448 | ||||
Specialty Retail — 6.4% | ||||
Advance Auto Parts, Inc. | 29,684 | 4,244,812 | ||
AutoZone, Inc.(1) | 7,383 | 4,966,249 | ||
Restoration Hardware Holdings, Inc.(1) | 35,841 | 3,088,419 | ||
Sally Beauty Holdings, Inc.(1) | 150,888 | 4,709,215 | ||
Signet Jewelers Ltd. | 73,703 | 9,885,783 | ||
Tractor Supply Co. | 83,067 | 7,148,746 | ||
Ulta Salon Cosmetics & Fragrance, Inc.(1) | 31,612 | 4,776,257 | ||
38,819,481 | ||||
Textiles, Apparel and Luxury Goods — 3.8% | ||||
Hanesbrands, Inc. | 287,456 | 8,934,133 | ||
Kate Spade & Co.(1) | 112,575 | 3,681,203 | ||
Lululemon Athletica, Inc.(1) | 49,882 | 3,174,490 | ||
Under Armour, Inc., Class A(1) | 92,193 | 7,149,567 | ||
22,939,393 | ||||
Wireless Telecommunication Services — 3.0% | ||||
SBA Communications Corp., Class A(1) | 157,677 | 18,262,150 | ||
TOTAL COMMON STOCKS (Cost $465,972,855) | 593,635,299 | |||
TEMPORARY CASH INVESTMENTS — 2.5% | ||||
Repurchase Agreement, Bank of America Merrill Lynch, (collateralized by various U.S. Treasury obligations, 1.375%, 4/30/20, valued at $2,552,502), in a joint trading account at 0.08%, dated 4/30/15, due 5/1/15 (Delivery value $2,508,137) | 2,508,131 | |||
Repurchase Agreement, Credit Suisse First Boston, Inc., (collateralized by various U.S. Treasury obligations, 1.50%, 12/31/18, valued at $6,127,336), in a joint trading account at 0.03%, dated 4/30/15, due 5/1/15 (Delivery value $6,019,519) | 6,019,514 | |||
Repurchase Agreement, Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 3.625%, 2/15/44, valued at $7,171,863), at 0.01%, dated 4/30/15, due 5/1/15 (Delivery value $7,027,002) | 7,027,000 | |||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $15,554,645) | 15,554,645 | |||
TOTAL INVESTMENT SECURITIES — 99.6% (Cost $481,527,500) | 609,189,944 | |||
OTHER ASSETS AND LIABILITIES — 0.4% | 2,449,389 | |||
TOTAL NET ASSETS — 100.0% | $ | 611,639,333 |
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS | ||||||||
Currency Purchased | Currency Sold | Counterparty | Settlement Date | Unrealized Appreciation (Depreciation) | ||||
CAD | 351,768 | USD | 292,465 | JPMorgan Chase Bank N.A. | 5/29/15 | $ | (1,016 | ) |
USD | 12,200,392 | CAD | 14,762,841 | JPMorgan Chase Bank N.A. | 5/29/15 | (31,020 | ) | |
$ | (32,036 | ) |
9
NOTES TO SCHEDULE OF INVESTMENTS | ||
CAD | - | Canadian Dollar |
USD | - | United States Dollar |
(1) | Non-income producing. |
See Notes to Financial Statements.
10
Statement of Assets and Liabilities |
APRIL 30, 2015 (UNAUDITED) | |||
Assets | |||
Investment securities, at value (cost of $481,527,500) | $ | 609,189,944 | |
Cash | 6,862 | ||
Receivable for investments sold | 21,041,852 | ||
Receivable for capital shares sold | 1,638,214 | ||
Dividends and interest receivable | 80,874 | ||
631,957,746 | |||
Liabilities | |||
Payable for investments purchased | 19,883,313 | ||
Unrealized depreciation on forward foreign currency exchange contracts | 32,036 | ||
Accrued management fees | 403,064 | ||
20,318,413 | |||
Net Assets | $ | 611,639,333 | |
Net Assets Consist of: | |||
Capital (par value and paid-in surplus) | $ | 438,029,709 | |
Accumulated net investment loss | (2,241,329 | ) | |
Undistributed net realized gain | 48,220,545 | ||
Net unrealized appreciation | 127,630,408 | ||
$ | 611,639,333 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | ||
Institutional Class, $0.01 Par Value | $583,667,054 | 42,018,266 | $13.89 | |
R6 Class, $0.01 Par Value | $27,972,279 | 2,008,195 | $13.93 |
See Notes to Financial Statements.
11
Statement of Operations |
FOR THE SIX MONTHS ENDED APRIL 30, 2015 (UNAUDITED) | |||
Investment Income (Loss) | |||
Income: | |||
Dividends (net of foreign taxes withheld of $18,428) | $ | 1,850,980 | |
Interest | 1,610 | ||
1,852,590 | |||
Expenses: | |||
Management fees | 2,440,427 | ||
Directors' fees and expenses | 11,004 | ||
2,451,431 | |||
Net investment income (loss) | (598,841 | ) | |
Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investment transactions | 47,574,772 | ||
Futures contract transactions | 1,316,877 | ||
Foreign currency transactions | 716,941 | ||
49,608,590 | |||
Change in net unrealized appreciation (depreciation) on: | |||
Investments | 7,372,226 | ||
Translation of assets and liabilities in foreign currencies | (86,660 | ) | |
7,285,566 | |||
Net realized and unrealized gain (loss) | 56,894,156 | ||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 56,295,315 |
See Notes to Financial Statements.
12
Statement of Changes in Net Assets |
SIX MONTHS ENDED APRIL 30, 2015 (UNAUDITED) AND YEAR ENDED OCTOBER 31, 2014 | ||||||
Increase (Decrease) in Net Assets | April 30, 2015 | October 31, 2014 | ||||
Operations | ||||||
Net investment income (loss) | $ | (598,841 | ) | $ | (1,662,340 | ) |
Net realized gain (loss) | 49,608,590 | 26,740,021 | ||||
Change in net unrealized appreciation (depreciation) | 7,285,566 | 20,366,104 | ||||
Net increase (decrease) in net assets resulting from operations | 56,295,315 | 45,443,785 | ||||
Distributions to Shareholders | ||||||
From net realized gains: | ||||||
Institutional Class | (26,719,040 | ) | (51,250,181 | ) | ||
R6 Class | (826,114 | ) | (433,893 | ) | ||
Decrease in net assets from distributions | (27,545,154 | ) | (51,684,074 | ) | ||
Capital Share Transactions | ||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | (6,187,934 | ) | 131,572,665 | |||
Net increase (decrease) in net assets | 22,562,227 | 125,332,376 | ||||
Net Assets | ||||||
Beginning of period | 589,077,106 | 463,744,730 | ||||
End of period | $ | 611,639,333 | $ | 589,077,106 | ||
Accumulated net investment loss | $ | (2,241,329 | ) | $ | (1,642,488 | ) |
See Notes to Financial Statements.
13
Notes to Financial Statements |
APRIL 30, 2015 (UNAUDITED)
1. Organization
American Century Mutual Funds, Inc. (the corporation) is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company and is organized as a Maryland corporation. NT Heritage Fund (the fund) is one fund in a series issued by the corporation. The fund is diversified as defined under the 1940 Act. The fund's investment objective is to seek long-term capital growth. The fund is not permitted to invest in securities issued by companies assigned the Global Industry Classification Standard for the tobacco industry.
The fund offers the Institutional Class and the R6 Class, which have different fees and expenses. The difference in the fee structures between the classes is not the result of any difference in advisory or custodial fees or other expenses related to management of the fund’s assets, which do not vary by class. The fund’s R6 Class shares are available for purchase exclusively by certain American Century Investments funds of funds that are offered only through employer-sponsored retirement plans where a financial intermediary provides retirement recordkeeping services to plan participants. Because financial intermediaries do not receive any service, distribution or administrative fees for offering such funds of funds, American Century Investment Management, Inc. (ACIM) (the investment advisor) is able to charge the R6 Class a lower unified management fee.
2. Significant Accounting Policies
The following is a summary of significant accounting policies consistently followed by the fund in preparation of its financial statements. The fund is an investment company and follows accounting and reporting guidance in accordance with accounting principles generally accepted in the United States of America. This may require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from these estimates. Management evaluated the impact of events or transactions occurring through the date the financial statements were issued that would merit recognition or disclosure.
Investment Valuations — The fund determines the fair value of its investments and computes its net asset value per share at 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. The Board of Directors has adopted valuation policies and procedures to guide the investment advisor in the fund’s investment valuation process and to provide methodologies for the oversight of the fund’s pricing function.
Equity securities that are listed or traded on a domestic securities exchange are valued at the last reported sales price or at the official closing price as provided by the exchange. Equity securities traded on foreign securities exchanges are generally valued at the closing price of such securities on the exchange where primarily traded or at the close of the NYSE, if that is earlier. If no last sales price is reported, or if local convention or regulation so provides, the mean of the latest bid and asked prices may be used. Securities traded over-the-counter are valued at the mean of the latest bid and asked prices, the last sales price, or the official closing price. Equity securities initially expressed in local currencies are translated into U.S. dollars at the mean of the appropriate currency exchange rate at the close of the NYSE as provided by an independent pricing service.
Fixed income securities maturing within 60 days at the time of purchase may be valued at cost, plus or minus any amortized discount or premium or at the evaluated mean as provided by an independent pricing service. Evaluated mean prices are commonly derived through utilization of market models, which may consider, among other factors: trade data, quotations from 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.
Open-end management investment companies are valued at the reported net asset value per share. Repurchase agreements are valued at cost, which approximates fair value. Exchange-traded futures contracts are valued at the settlement price as provided by the appropriate clearing corporation. Forward foreign currency exchange contracts are valued at the mean of the appropriate forward exchange rate at the close of the NYSE as provided by an independent pricing service.
14
If the fund determines that the market price for an investment is not readily available or the valuation methods mentioned above do not reflect an investment’s fair value, such investment is valued as determined in good faith by the Board of Directors or its delegate, in accordance with policies and procedures adopted by the Board of Directors. In its determination of fair value, the fund may review several factors including, but not limited to, market information regarding the specific investment or comparable investments and correlation with other investment types, futures indices or general market indicators. Circumstances that may cause the fund to use these procedures to value an investment include, but are not limited to: an investment has been declared in default or is distressed; trading in a security has been suspended during the trading day or a security is not actively trading on its principal exchange; prices received from a regular pricing source are deemed unreliable; or there is a foreign market holiday and no trading occurred.
The fund monitors for significant events occurring after the close of an investment’s primary exchange but before the fund’s net asset value per share is determined. Significant events may include, but are not limited to: corporate announcements and transactions; governmental action and political unrest that could impact a specific investment or an investment sector; or armed conflicts, natural disasters and similar events that could affect investments in a specific country or region. The fund also monitors for significant fluctuations between domestic and foreign markets, as evidenced by the U.S. market or such other indicators that the Board of Directors, or its delegate, deems appropriate. If significant fluctuations in foreign markets are identified, the fund may apply a model-derived factor to the closing price of equity securities traded on foreign securities exchanges. The factor is based on observable market data as provided by an independent pricing service.
Security Transactions — Security transactions are accounted for as of the trade date. Net realized gains and losses are determined on the identified cost basis, which is also used for federal income tax purposes.
Investment Income — Dividend income less foreign taxes withheld, if any, is recorded as of the ex-dividend date. Distributions received on securities that represent a return of capital or long-term capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The fund may estimate the components of distributions received that may be considered nontaxable distributions or long-term capital gain distributions for income tax purposes. Interest income is recorded on the accrual basis and includes accretion of discounts and amortization of premiums.
Foreign Currency Translations — All assets and liabilities initially expressed in foreign currencies are translated into U.S. dollars at prevailing exchange rates at period end. The fund may enter into spot foreign currency exchange contracts to facilitate transactions denominated in a foreign currency. Purchases and sales of investment securities, dividend and interest income, spot foreign currency exchange contracts, and expenses are translated at the rates of exchange prevailing on the respective dates of such transactions. Net realized and unrealized foreign currency exchange gains or losses related to investment securities are a component of net realized gain (loss) on investment transactions and change in net unrealized appreciation (depreciation) on investments, respectively.
Repurchase Agreements — The fund may enter into repurchase agreements with institutions that ACIM has determined are creditworthy pursuant to criteria adopted by the Board of Directors. The fund requires that the collateral, represented by securities, received in a repurchase transaction be transferred to the custodian in a manner sufficient to enable the fund to obtain those securities in the event of a default under the repurchase agreement. ACIM monitors, on a daily basis, the securities transferred to ensure the value, including accrued interest, of the securities under each repurchase agreement is equal to or greater than amounts owed to the fund under each repurchase agreement.
Joint Trading Account — Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the fund, along with certain other funds in the American Century Investments family of funds, may transfer uninvested cash balances into a joint trading account. These balances are invested in one or more repurchase agreements that are collateralized by U.S. Treasury or Agency obligations.
Segregated Assets — In accordance with the 1940 Act, the fund segregates assets on its books and records
to cover futures contracts. ACIM monitors, on a daily basis, the securities segregated to ensure the fund
designates a sufficient amount of liquid assets, marked-to-market daily. The fund may also receive assets or
be required to pledge assets at the custodian bank or with a broker for margin requirements on futures
contracts.
Income Tax Status — It is the fund’s policy to distribute substantially all net investment income and net realized gains to shareholders and to otherwise qualify as a regulated investment company under provisions of the Internal Revenue Code. Accordingly, no provision has been made for income taxes. The fund files U.S. federal, state, local and non-U.S. tax returns as applicable. The fund's tax returns are subject to examination
15
by the relevant taxing authority until expiration of the applicable statute of limitations, which is generally three years from the date of filing but can be longer in certain jurisdictions. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination and for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Multiple Class — All shares of the fund represent an equal pro rata interest in the net assets of the class to which such shares belong, and have identical voting, dividend, liquidation and other rights and the same terms and conditions, except for class specific expenses and exclusive rights to vote on matters affecting only individual classes. Income, non-class specific expenses, and realized and unrealized capital gains and losses of the fund are allocated to each class of shares based on their relative net assets.
Distributions to Shareholders — Distributions from net investment income and net realized gains, if any, are generally declared and paid annually.
Indemnifications — Under the corporation’s organizational documents, its officers and directors are indemnified against certain liabilities arising out of the performance of their duties to the fund. In addition, in the normal course of business, the fund enters into contracts that provide general indemnifications. The maximum exposure under these arrangements is unknown as this would involve future claims that may be made against a fund. The risk of material loss from such claims is considered by management to be remote.
3. Fees and Transactions with Related Parties
Certain officers and directors of the corporation are also officers and/or directors of American Century Companies, Inc. (ACC). The corporation’s investment advisor, ACIM, the corporation's distributor, American Century Investment Services, Inc., and the corporation’s transfer agent, American Century Services, LLC, are wholly owned, directly or indirectly, by ACC. Various funds issued by American Century Asset Allocation Portfolios, Inc. own, in aggregate, 100% of the shares of the fund. Related parties do not invest in the fund for the purpose of exercising management or control.
Management Fees — The corporation has entered into a management agreement with ACIM, under which ACIM provides the fund with investment advisory and management services in exchange for a single, unified management fee (the fee) per class. The agreement provides that all expenses of managing and operating the fund, except distribution and service fees, brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), and extraordinary expenses, will be paid by ACIM. The fee is computed and accrued daily based on each class's daily net assets and paid monthly in arrears. The annual management fee is 0.80% for the Institutional Class and 0.65% for the R6 Class.
Directors' Fees and Expenses — The Board of Directors is responsible for overseeing the investment advisor’s management and operations of the fund. The directors receive detailed information about the fund and its investment advisor regularly throughout the year, and meet at least quarterly with management of the investment advisor to review reports about fund operations. The fund’s officers do not receive compensation from the fund.
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the six months ended April 30, 2015 were $251,312,197 and $293,148,974, respectively.
16
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended April 30, 2015 | Year ended October 31, 2014 | |||||||||
Shares | Amount | Shares | Amount | |||||||
Institutional Class/Shares Authorized | 150,000,000 | 150,000,000 | ||||||||
Sold | 3,709,559 | $ | 50,484,552 | 7,340,306 | $ | 94,685,851 | ||||
Issued in reinvestment of distributions | 2,147,833 | 26,719,040 | 4,197,394 | 51,250,181 | ||||||
Redeemed | (6,631,303 | ) | (93,114,498 | ) | (2,037,795 | ) | (26,819,633 | ) | ||
(773,911 | ) | (15,910,906 | ) | 9,499,905 | 119,116,399 | |||||
R6 Class/Shares Authorized | 50,000,000 | 50,000,000 | ||||||||
Sold | 988,154 | 13,312,363 | 1,085,310 | 13,736,485 | ||||||
Issued in reinvestment of distributions | 66,248 | 826,114 | 35,507 | 433,893 | ||||||
Redeemed | (314,837 | ) | (4,415,505 | ) | (132,053 | ) | (1,714,112 | ) | ||
739,565 | 9,722,972 | 988,764 | 12,456,266 | |||||||
Net increase (decrease) | (34,346 | ) | $ | (6,187,934 | ) | 10,488,669 | $ | 131,572,665 |
6. Fair Value Measurements
The fund’s investments valuation process is based on several considerations and may use multiple inputs to determine the fair value of the investments held by the fund. In conformity with accounting principles generally accepted in the United States of America, the inputs used to determine a valuation are classified into three broad levels.
• | Level 1 valuation inputs consist of unadjusted quoted prices in an active market for identical investments. |
• | Level 2 valuation inputs consist of direct or indirect observable market data (including quoted prices for comparable investments, evaluations of subsequent market events, interest rates, prepayment speeds, credit risk, etc.). These inputs also consist of quoted prices for identical investments initially expressed in local currencies that are adjusted through translation into U.S. dollars. |
• | Level 3 valuation inputs consist of unobservable data (including a fund’s own assumptions). |
The level classification is based on the lowest level input that is significant to the fair valuation measurement. The valuation inputs are not necessarily an indication of the risks associated with investing in these securities or other financial instruments. There were no significant transfers between levels during the period.
The following is a summary of the level classifications as of period end. The Schedule of Investments provides additional information on the fund’s portfolio holdings.
Level 1 | Level 2 | Level 3 | ||||||
Assets | ||||||||
Investment Securities | ||||||||
Common Stocks | $ | 593,635,299 | — | — | ||||
Temporary Cash Investments | — | $ | 15,554,645 | — | ||||
$ | 593,635,299 | $ | 15,554,645 | — | ||||
Liabilities | ||||||||
Other Financial Instruments | ||||||||
Forward Foreign Currency Exchange Contracts | — | $ | (32,036 | ) | — |
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7. Derivative Instruments
Equity Price Risk — The fund is subject to equity price risk in the normal course of pursuing its investment objectives. A fund may enter into futures contracts based on an equity index in order to manage its exposure to changes in market conditions. A fund may purchase futures contracts to gain exposure to increases in market value or sell futures contracts to protect against a decline in market value. Upon entering into a futures contract, a fund is required to deposit either cash or securities in an amount equal to a certain percentage of the contract value (initial margin). Subsequent payments (variation margin) are made or received daily, in cash, by a fund. The variation margin is equal to the daily change in the contract value and is recorded as unrealized gains and losses. A fund recognizes a realized gain or loss when the contract is closed or expires. Net realized and unrealized gains or losses occurring during the holding period of futures contracts are a component of net realized gain (loss) on futures contract transactions and change in net unrealized appreciation (depreciation) on futures contracts, respectively. One of the risks of entering into futures contracts is the possibility that the change in value of the contract may not correlate with the changes in value of the underlying securities. During the period, the fund infrequently purchased equity price risk derivative instruments for temporary investment purposes.
Foreign Currency Risk — The fund is subject to foreign currency exchange rate risk in the normal course of pursuing its investment objectives. The value of foreign investments held by a fund may be significantly affected by changes in foreign currency exchange rates. The dollar value of a foreign security generally decreases when the value of the dollar rises against the foreign currency in which the security is denominated and tends to increase when the value of the dollar declines against such foreign currency. A fund may enter into forward foreign currency exchange contracts to reduce a fund's exposure to foreign currency exchange rate fluctuations. The net U.S. dollar value of foreign currency underlying all contractual commitments held by a fund and the resulting unrealized appreciation or depreciation are determined daily. Realized gain or loss is recorded upon the termination of the contract. Net realized and unrealized gains or losses occurring during the holding period of forward foreign currency exchange contracts are a component of net realized gain (loss) on foreign currency transactions and change in net unrealized appreciation (depreciation) on translation of assets and liabilities in foreign currencies, respectively. A fund bears the risk of an unfavorable change in the foreign currency exchange rate underlying the forward contract. Additionally, losses, up to the fair value, may arise if the counterparties do not perform under the contract terms. The fund's average U.S. dollar exposure to foreign currency risk derivative instruments held during the period was $11,608,423.
Value of Derivative Instruments as of April 30, 2015 | ||||||||
Asset Derivatives | Liability Derivatives | |||||||
Type of Risk Exposure | Location on Statement of Assets and Liabilities | Value | Location on Statement of Assets and Liabilities | Value | ||||
Foreign Currency Risk | Unrealized appreciation on forward foreign currency exchange contracts | — | Unrealized depreciation on forward foreign currency exchange contracts | $ | 32,036 | |||
Effect of Derivative Instruments on the Statement of Operations for the Six Months Ended April 30, 2015 | ||||||||
Net Realized Gain (Loss) | Change in Net Unrealized Appreciation (Depreciation) | |||||||
Type of Risk Exposure | Location on Statement of Operations | Value | Location on Statement of Operations | Value | ||||
Equity Price Risk | Net realized gain (loss) on futures contract transactions | $ | 1,316,877 | Change in net unrealized appreciation (depreciation) on futures contracts | — | |||
Foreign Currency Risk | Net realized gain (loss) on foreign currency transactions | 717,413 | Change in net unrealized appreciation (depreciation) on translation of assets and liabilities in foreign currencies | $ | (86,660 | ) | ||
$ | 2,034,290 | $ | (86,660 | ) |
8. Risk Factors
The fund invests in common stocks of small companies. Because of this, the fund may be subject to greater risk and market fluctuations than a fund investing in larger, more established companies.
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9. Federal Tax Information
The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
As of April 30, 2015, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $ | 484,086,866 | |
Gross tax appreciation of investments | $ | 135,966,216 | |
Gross tax depreciation of investments | (10,863,138 | ) | |
Net tax appreciation (depreciation) of investments | $ | 125,103,078 |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales.
As of October 31, 2014, the fund had late-year ordinary loss deferrals of $(1,587,864), which represent certain qualified losses that the fund has elected to treat as having been incurred in the following fiscal year for federal income tax purposes.
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Financial Highlights |
For a Share Outstanding Throughout the Years Ended October 31 (except as noted) | |||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||
Income From Investment Operations: | Distributions From: | 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 | Net Investment Income | Net Realized Gains | Total Distributions | 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) | |||
Institutional Class | |||||||||||||||
2015(3) | $13.37 | (0.01) | 1.15 | 1.14 | — | (0.62) | (0.62) | $13.89 | 9.08% | 0.80%(4) | (0.20)%(4) | 42% | $583,667 | ||
2014 | $13.81 | (0.04) | 1.08 | 1.04 | — | (1.48) | (1.48) | $13.37 | 8.53% | 0.80% | (0.31)% | 76% | $572,085 | ||
2013 | $10.61 | (0.01) | 3.23 | 3.22 | (0.02) | — | (0.02) | $13.81 | 30.38% | 0.80% | (0.10)% | 113% | $459,877 | ||
2012 | $10.03 | —(5) | 0.74 | 0.74 | — | (0.16) | (0.16) | $10.61 | 7.59% | 0.81% | (0.02)% | 92% | $297,429 | ||
2011 | $9.44 | (0.03) | 0.62 | 0.59 | — | — | — | $10.03 | 6.25% | 0.80% | (0.27)% | 115% | $215,060 | ||
2010 | $7.50 | (0.02) | 1.96 | 1.94 | —(5) | — | —(5) | $9.44 | 26.05% | 0.80% | (0.26)% | 152% | $161,304 | ||
R6 Class | |||||||||||||||
2015(3) | $13.39 | —(5) | 1.16 | 1.16 | — | (0.62) | (0.62) | $13.93 | 9.22% | 0.65%(4) | (0.05)%(4) | 42% | $27,972 | ||
2014 | $13.82 | (0.02) | 1.07 | 1.05 | — | (1.48) | (1.48) | $13.39 | 8.60% | 0.65% | (0.16)% | 76% | $16,992 | ||
2013(6) | $12.92 | —(5) | 0.90 | 0.90 | — | — | — | $13.82 | 6.97% | 0.65%(4) | 0.03%(4) | 113%(7) | $3,867 |
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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) | Six months ended April 30, 2015 (unaudited). |
(4) | Annualized. |
(5) | Per-share amount was less than $0.005. |
(6) | July 26, 2013 (commencement of sale) through October 31, 2013. |
(7) | Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended October 31, 2013. |
See Notes to Financial Statements.
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Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain IRAs are subject to federal income tax withholding, unless you elect not to have withholding apply. Tax will be withheld on the total amount withdrawn even though you may be receiving amounts that are not subject to withholding, such as nondeductible contributions. In such case, excess amounts of withholding could occur. You may adjust your withholding election so that a greater or lesser amount will be withheld.
If you don’t want us to withhold on this amount, you must notify us to not withhold the federal income tax. You may notify us in writing or in certain situations by telephone or through other electronic means. For systematic withdrawals, your withholding election will remain in effect until revoked or changed by filing a new election. You have the right to revoke your election at any time.
Remember, even if you elect not to have income tax withheld, you are liable for paying income tax on the taxable portion of your withdrawal. If you elect not to have income tax withheld or you don’t have enough income tax withheld, you may be responsible for payment of estimated tax. You may incur penalties under the estimated tax rules if your withholding and estimated tax payments are not sufficient. You can reduce or defer the income tax on a distribution by directly or indirectly rolling such distribution over to another IRA or eligible plan. You should consult your tax advisor for additional information.
State tax will be withheld if, at the time of your distribution, your address is within one of the mandatory withholding states and you have federal income tax withheld (or as otherwise required by state law). State taxes will be withheld from your distribution in accordance with the respective state rules.
Distributions you receive from 403(b), 457 and qualified plans are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
A description of the policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund is available without charge, upon request, by calling 1-800-345-2021. It is also available on the "About Us" page of American Century Investments’ website at americancentury.com and on the Securities and Exchange Commission’s website at sec.gov. Information regarding how the investment advisor voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the "About Us" page at americancentury.com. It is also available at sec.gov.
Quarterly Portfolio Disclosure
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-Q. The fund’s Forms N-Q are available on the SEC’s website at sec.gov, and may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The fund also makes its complete schedule of portfolio holdings for the most recent quarter of its fiscal year available on its
website at americancentury.com and, upon request, by calling 1-800-345-2021.
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Notes |
23
Notes |
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![]() | ||
Contact Us | americancentury.com | |
Automated Information Line | 1-800-345-8765 | |
Investor Services Representative | 1-800-345-2021 or 816-531-5575 | |
Investors Using Advisors | 1-800-378-9878 | |
Business, Not-For-Profit, Employer-Sponsored Retirement Plans | 1-800-345-3533 | |
Banks and Trust Companies, Broker-Dealers, Financial Professionals, Insurance Companies | 1-800-345-6488 | |
Telecommunications Relay Service for the Deaf | 711 | |
American Century Mutual Funds, Inc. | ||
Investment Advisor: American Century Investment Management, Inc. Kansas City, Missouri | ||
This report and the statements it contains are submitted for the general information of our shareholders. The report is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus. | ||
©2015 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-85696 1506 |
SEMIANNUAL REPORT | APRIL 30, 2015 |
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Select Fund
Table of Contents |
Any opinions expressed in this report reflect those of the author as of the date of the report, and do not necessarily represent the opinions of American Century Investments® or any other person in the American Century Investments organization. Any such opinions are subject to change at any time based upon market or other conditions and American Century Investments disclaims any responsibility to update such opinions. These opinions may not be relied upon as investment advice and, because investment decisions made by American Century Investments funds are based on numerous factors, may not be relied upon as an indication of trading intent on behalf of any American Century Investments fund. Security examples are used for representational purposes only and are not intended as recommendations to purchase or sell securities. Performance information for comparative indices and securities is provided to American Century Investments by third party vendors. To the best of American Century Investments’ knowledge, such information is accurate at the time of printing.
President’s Letter |
![]() | Dear Investor: Thank you for reviewing this semiannual report for the six months ended April 30, 2015. It provides a macroeconomic and financial market overview (below), followed by fund performance, a schedule of fund investments, and other financial information. For additional commentary and updated information on fund performance, key factors that affected asset returns, and other insights regarding the investment markets, we encourage you to visit our website, americancentury.com. |
Jonathan Thomas |
Global Divergence in Monetary Policies Influenced Investor Behavior
The six-month reporting period saw big swings in market returns, triggered in part by central bank moves. In October 2014, just before the period started, the U.S. Federal Reserve ended its latest bond-buying program (quantitative easing, QE). As QE wound down, the U.S. economy enjoyed 5% annualized growth (after inflation) in the third quarter of 2014, the highest rate since the third quarter of 2003. But while QE was ending in the U.S., other major central banks were starting or increasing QE as their economies faltered. A “global divergence” of economic growth and monetary policies opened between the U.S. and most of the rest of the developed world.
This divergence helped fuel increased demand for the U.S. dollar and U.S. dollar-denominated assets, and put downward pressure on commodities prices, most notably oil. Though the resulting dollar rally and oil price decline reversed somewhat in April 2015, the dollar remained 9% higher for the reporting period, as measured by the U.S. Dollar Index, while oil remained more than 25% lower, as measured by both Brent and West Texas Intermediate crude oil futures. In this environment, U.S. stocks and bonds posted moderate gains—the S&P 500 Index and the Barclays U.S. Aggregate Bond Index returned 4.40% and 2.06%, respectively.
We expect monetary policy divergence between the U.S. and other major developed economies to continue this year, accompanied by market volatility. This could present both challenges and opportunities for active investment managers. Upward pressures on inflation and interest rates could develop as the massive amount of global monetary stimulus in progress takes hold and economies improve. But we believe lingering constraining forces will likely keep inflation and interest rates relatively low for the next six months. In this environment, we continue to believe in a disciplined, diversified, long-term investment approach, using professionally managed stock and bond portfolios to meet financial goals. We appreciate your continued trust in us.
Sincerely,
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Jonathan Thomas
President and Chief Executive Officer
American Century Investments
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Performance |
Total Returns as of April 30, 2015 | |||||||
Average Annual Returns | |||||||
Ticker Symbol | 6 months(1) | 1 year | 5 years | 10 years | Since Inception | Inception Date | |
Investor Class | TWCIX | 6.52% | 17.48% | 14.17% | 7.89% | 12.38% | 6/30/71(2) |
Russell 1000 Growth Index | — | 6.54% | 16.67% | 15.48% | 9.62% | N/A(3) | — |
Institutional Class | TWSIX | 6.62% | 17.72% | 14.40% | 8.11% | 6.80% | 3/13/97 |
A Class(4) | TWCAX | 8/8/97 | |||||
No sales charge* | 6.40% | 17.20% | 13.89% | 7.62% | 5.30% | ||
With sales charge* | 0.28% | 10.46% | 12.55% | 6.99% | 4.94% | ||
C Class | ACSLX | 1/31/03 | |||||
No sales charge* | 5.99% | 16.30% | 13.04% | 6.82% | 7.43% | ||
With sales charge* | 5.03% | 16.30% | 13.04% | 6.82% | 7.43% | ||
R Class | ASERX | 6.26% | 16.88% | 13.60% | — | 6.62% | 7/29/05 |
R6 Class | ASDEX | 6.70% | 17.89% | — | — | 18.27% | 7/26/13 |
* | Sales charges include initial sales charges and contingent deferred sales charges (CDSCs), as applicable. A Class shares have a 5.75% maximum initial sales charge and may be subject to a maximum CDSC of 1.00%. C Class shares redeemed within 12 months of purchase are subject to a maximum CDSC of 1.00%. The SEC requires that mutual funds provide performance information net of maximum sales charges in all cases where charges could be applied. |
(1) | Total returns for periods less than one year are not annualized. |
(2) | Although the fund’s actual inception date was October 31, 1958, this inception date corresponds with the investment advisor’s implementation of its current investment philosophy and practices. |
(3) | Benchmark data first available December 1978. |
(4) | Prior to September 4, 2007, the A Class was referred to as the Advisor Class and did not have a front-end sales charge. Performance prior to that date has been adjusted to reflect this charge. |
Total Annual Fund Operating Expenses | |||||
Investor Class | Institutional Class | A Class | C Class | R Class | R6 Class |
1.00% | 0.80% | 1.25% | 2.00% | 1.50% | 0.65% |
The total annual fund operating expenses shown is as stated in the fund’s prospectus current as of the date of this report. The prospectus may vary from the expense ratio shown elsewhere in this report because it is based on a different time period, includes acquired fund fees and expenses, and, if applicable, does not include fee waivers or expense reimbursements.
Data presented reflect past performance. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance shown. Investment return and principal value will fluctuate, and redemption value may be more or less than original cost. Data assumes reinvestment of dividends and capital gains, and none of the charts reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. To obtain performance data current to the most recent month end, please call 1-800-345-2021 or visit americancentury.com. For additional information about the fund, please consult the prospectus.
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Fund Characteristics |
APRIL 30, 2015 | |
Top Ten Holdings | % of net assets |
Apple, Inc. | 9.7% |
Google, Inc.(1) | 4.3% |
Walt Disney Co. (The) | 3.3% |
UnitedHealth Group, Inc. | 3.0% |
Gilead Sciences, Inc. | 3.0% |
MasterCard, Inc., Class A | 2.8% |
Starbucks Corp. | 2.7% |
Biogen Idec, Inc. | 2.7% |
Bristol-Myers Squibb Co. | 2.5% |
Constellation Brands, Inc., Class A | 2.3% |
(1) Includes all classes of the issuer. | |
Top Five Industries | % of net assets |
Technology Hardware, Storage and Peripherals | 11.2% |
Internet Software and Services | 7.9% |
Biotechnology | 6.8% |
Specialty Retail | 6.4% |
Pharmaceuticals | 5.0% |
Types of Investments in Portfolio | % of net assets |
Domestic Common Stocks | 93.4% |
Foreign Common Stocks(2) | 6.2% |
Total Common Stocks | 99.6% |
Temporary Cash Investments | 0.4% |
Other Assets and Liabilities | —(3) |
(2) Includes depositary shares, dual listed securities and foreign ordinary shares. | |
(3) Category is less than 0.05% of total net assets. |
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Shareholder Fee Example |
Fund shareholders may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption/exchange fees; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in your fund and to compare these costs with the ongoing cost of investing in other mutual funds.
The example is based on an investment of $1,000 made at the beginning of the period and held for the entire period from November 1, 2014 to April 30, 2015.
Actual Expenses
The table provides information about actual account values and actual expenses for each class. You may use the information, together with the amount you invested, to estimate the expenses that you paid over the period. First, identify the share class you own. Then simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
If you hold Investor Class shares of any American Century Investments fund, or Institutional Class shares of the American Century Diversified Bond Fund, in an American Century Investments account (i.e., not a financial intermediary or retirement plan account), American Century Investments may charge you a $12.50 semiannual account maintenance fee if the value of those shares is less than $10,000. We will redeem shares automatically in one of your accounts to pay the $12.50 fee. 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. Personal accounts include individual accounts, joint accounts, UGMA/UTMA accounts, personal trusts, Coverdell Education Savings Accounts and 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. If you are subject to the Account Maintenance Fee, your account value could be reduced by the fee amount.
Hypothetical Example for Comparison Purposes
The table also provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio of each class of your fund and an assumed rate of return of 5% per year before expenses, which is not the actual return of a fund’s share class. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) or redemption/exchange fees. Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
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Beginning Account Value 11/1/14 | Ending Account Value 4/30/15 | Expenses Paid During Period(1) 11/1/14 - 4/30/15 | Annualized Expense Ratio(1) | |
Actual | ||||
Investor Class | $1,000 | $1,065.20 | $5.07 | 0.99% |
Institutional Class | $1,000 | $1,066.20 | $4.05 | 0.79% |
A Class | $1,000 | $1,064.00 | $6.35 | 1.24% |
C Class | $1,000 | $1,059.90 | $10.16 | 1.99% |
R Class | $1,000 | $1,062.60 | $7.62 | 1.49% |
R6 Class | $1,000 | $1,067.00 | $3.28 | 0.64% |
Hypothetical | ||||
Investor Class | $1,000 | $1,019.89 | $4.96 | 0.99% |
Institutional Class | $1,000 | $1,020.88 | $3.96 | 0.79% |
A Class | $1,000 | $1,018.65 | $6.21 | 1.24% |
C Class | $1,000 | $1,014.93 | $9.94 | 1.99% |
R Class | $1,000 | $1,017.41 | $7.45 | 1.49% |
R6 Class | $1,000 | $1,021.62 | $3.21 | 0.64% |
(1) | Expenses are equal to the class's annualized expense ratio listed in the table above, multiplied by the average account value over the period, multiplied by 181, the number of days in the most recent fiscal half-year, divided by 365, to reflect the one-half year period. |
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Schedule of Investments |
APRIL 30, 2015 (UNAUDITED)
Shares | Value | |||
COMMON STOCKS — 99.6% | ||||
Aerospace and Defense — 3.5% | ||||
Boeing Co. (The) | 278,400 | $ | 39,905,856 | |
United Technologies Corp. | 411,200 | 46,774,000 | ||
86,679,856 | ||||
Auto Components — 2.0% | ||||
Delphi Automotive plc | 381,100 | 31,631,300 | ||
Gentex Corp. | 1,083,400 | 18,796,990 | ||
50,428,290 | ||||
Banks — 0.9% | ||||
JPMorgan Chase & Co. | 360,800 | 22,824,208 | ||
Beverages — 3.9% | ||||
Constellation Brands, Inc., Class A(1) | 492,500 | 57,100,450 | ||
Diageo plc | 1,444,400 | 40,118,026 | ||
97,218,476 | ||||
Biotechnology — 6.8% | ||||
Biogen Idec, Inc.(1) | 176,500 | 65,998,645 | ||
Celgene Corp.(1) | 205,900 | 22,249,554 | ||
Gilead Sciences, Inc.(1) | 733,400 | 73,714,034 | ||
Vertex Pharmaceuticals, Inc.(1) | 55,500 | 6,842,040 | ||
168,804,273 | ||||
Capital Markets — 1.8% | ||||
Franklin Resources, Inc. | 854,900 | 44,078,644 | ||
Chemicals — 3.0% | ||||
Ashland, Inc. | 200,300 | 25,309,908 | ||
Monsanto Co. | 424,100 | 48,330,436 | ||
Sigma-Aldrich Corp. | 4,400 | 611,248 | ||
74,251,592 | ||||
Communications Equipment — 1.8% | ||||
QUALCOMM, Inc. | 673,400 | 45,791,200 | ||
Diversified Financial Services — 1.4% | ||||
CBOE Holdings, Inc. | 611,600 | 34,414,732 | ||
Electrical Equipment — 0.6% | ||||
Emerson Electric Co. | 265,600 | 15,625,248 | ||
Energy Equipment and Services — 2.0% | ||||
Core Laboratories NV | 112,700 | 14,795,256 | ||
Schlumberger Ltd. | 380,300 | 35,980,183 | ||
50,775,439 | ||||
Food and Staples Retailing — 2.1% | ||||
Costco Wholesale Corp. | 341,900 | 48,908,795 | ||
PriceSmart, Inc. | 40,900 | 3,290,814 | ||
52,199,609 | ||||
Food Products — 1.6% | ||||
Mead Johnson Nutrition Co. | 373,600 | 35,835,712 | ||
Mondelez International, Inc., Class A | 103,500 | 3,971,295 | ||
39,807,007 |
7
Shares | Value | |||
Health Care Providers and Services — 4.4% | ||||
Express Scripts Holding Co.(1) | 413,200 | $ | 35,700,480 | |
UnitedHealth Group, Inc. | 670,100 | 74,649,140 | ||
110,349,620 | ||||
Hotels, Restaurants and Leisure — 3.6% | ||||
Papa John's International, Inc. | 361,700 | 22,197,529 | ||
Starbucks Corp. | 1,332,700 | 66,075,266 | ||
88,272,795 | ||||
Industrial Conglomerates — 2.1% | ||||
Roper Industries, Inc. | 306,000 | 51,460,020 | ||
Insurance — 1.3% | ||||
MetLife, Inc. | 629,800 | 32,302,442 | ||
Internet and Catalog Retail — 2.5% | ||||
Amazon.com, Inc.(1) | 135,100 | 56,982,478 | ||
TripAdvisor, Inc.(1) | 66,300 | 5,336,487 | ||
62,318,965 | ||||
Internet Software and Services — 7.9% | ||||
Alibaba Group Holding Ltd. ADR(1) | 39,000 | 3,170,310 | ||
Baidu, Inc. ADR(1) | 114,500 | 22,932,060 | ||
Facebook, Inc., Class A(1) | 624,300 | 49,176,111 | ||
Google, Inc., Class A(1) | 98,600 | 54,108,722 | ||
Google, Inc., Class C(1) | 96,665 | 51,941,766 | ||
LinkedIn Corp., Class A(1) | 53,800 | 13,564,594 | ||
194,893,563 | ||||
IT Services — 3.8% | ||||
MasterCard, Inc., Class A | 762,500 | 68,785,125 | ||
Teradata Corp.(1) | 563,500 | 24,788,365 | ||
93,573,490 | ||||
Leisure Products — 0.3% | ||||
Hasbro, Inc. | 106,300 | 7,524,977 | ||
Machinery — 4.6% | ||||
FANUC Corp. | 101,500 | 22,200,210 | ||
Graco, Inc. | 349,900 | 25,059,838 | ||
KUKA AG | 261,600 | 18,648,269 | ||
Middleby Corp.(1) | 307,400 | 31,151,916 | ||
Nordson Corp. | 205,500 | 16,368,075 | ||
113,428,308 | ||||
Media — 3.3% | ||||
Walt Disney Co. (The) | 757,500 | 82,355,400 | ||
Oil, Gas and Consumable Fuels — 1.4% | ||||
EOG Resources, Inc. | 128,100 | 12,675,495 | ||
Noble Energy, Inc. | 132,600 | 6,725,472 | ||
Occidental Petroleum Corp. | 186,600 | 14,946,660 | ||
34,347,627 | ||||
Personal Products — 1.5% | ||||
Estee Lauder Cos., Inc. (The), Class A | 446,400 | 36,287,856 | ||
Pharmaceuticals — 5.0% | ||||
Actavis plc(1) | 82,600 | 23,364,236 | ||
Bristol-Myers Squibb Co. | 958,700 | 61,097,951 | ||
Teva Pharmaceutical Industries Ltd. ADR | 664,900 | 40,173,258 | ||
124,635,445 |
8
Shares | Value | |||
Professional Services — 1.6% | ||||
Verisk Analytics, Inc., Class A(1) | 540,700 | $ | 40,574,128 | |
Real Estate Investment Trusts (REITs) — 1.2% | ||||
American Tower Corp. | 307,800 | 29,096,334 | ||
Road and Rail — 0.3% | ||||
Swift Transportation Co.(1) | 337,600 | 8,169,920 | ||
Semiconductors and Semiconductor Equipment — 0.9% | ||||
Linear Technology Corp. | 464,400 | 21,422,772 | ||
Software — 4.1% | ||||
Electronic Arts, Inc.(1) | 816,000 | 47,401,440 | ||
Mobileye NV(1) | 219,800 | 9,860,228 | ||
Oracle Corp. | 1,037,800 | 45,268,836 | ||
102,530,504 | ||||
Specialty Retail — 6.4% | ||||
AutoZone, Inc.(1) | 82,400 | 55,427,184 | ||
Home Depot, Inc. (The) | 486,800 | 52,077,864 | ||
TJX Cos., Inc. (The) | 778,400 | 50,237,936 | ||
157,742,984 | ||||
Technology Hardware, Storage and Peripherals — 11.2% | ||||
Apple, Inc. | 1,926,200 | 241,063,930 | ||
EMC Corp. | 1,408,800 | 37,910,808 | ||
278,974,738 | ||||
Tobacco — 0.8% | ||||
Philip Morris International, Inc. | 237,800 | 19,849,166 | ||
TOTAL COMMON STOCKS (Cost $1,355,882,110) | 2,473,009,628 | |||
TEMPORARY CASH INVESTMENTS — 0.4% | ||||
Repurchase Agreement, Bank of America Merrill Lynch, (collateralized by various U.S. Treasury obligations, 1.375%, 4/30/20, valued at $1,445,375), in a joint trading account at 0.08%, dated 4/30/15, due 5/1/15 (Delivery value $1,420,252) | 1,420,249 | |||
Repurchase Agreement, Credit Suisse First Boston, Inc., (collateralized by various U.S. Treasury obligations, 1.50%, 12/31/18, valued at $3,469,653), in a joint trading account at 0.03%, dated 4/30/15, due 5/1/15 (Delivery value $3,408,601) | 3,408,598 | |||
Repurchase Agreement, Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 3.625%, 2/15/44, valued at $4,061,888), at 0.01%, dated 4/30/15, due 5/1/15 (Delivery value $3,979,001) | 3,979,000 | |||
State Street Institutional Liquid Reserves Fund, Premier Class | 3,901 | 3,901 | ||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $8,811,748) | 8,811,748 | |||
TOTAL INVESTMENT SECURITIES — 100.0% (Cost $1,364,693,858) | 2,481,821,376 | |||
OTHER ASSETS AND LIABILITIES† | 89,428 | |||
TOTAL NET ASSETS — 100.0% | $ | 2,481,910,804 |
9
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS | ||||||||
Currency Purchased | Currency Sold | Counterparty | Settlement Date | Unrealized Appreciation (Depreciation) | ||||
EUR | 522,136 | USD | 583,355 | UBS AG | 5/29/15 | $ | 3,108 | |
EUR | 507,467 | USD | 568,228 | UBS AG | 5/29/15 | 1,758 | ||
USD | 16,507,854 | EUR | 15,128,790 | UBS AG | 5/29/15 | (484,769 | ) | |
USD | 486,495 | EUR | 443,158 | UBS AG | 5/29/15 | (11,258 | ) | |
GBP | 828,725 | USD | 1,271,132 | Credit Suisse AG | 5/29/15 | 738 | ||
USD | 34,838,749 | GBP | 22,885,074 | Credit Suisse AG | 5/29/15 | (283,716 | ) | |
USD | 719,902 | JPY | 85,412,250 | Credit Suisse AG | 5/29/15 | 4,423 | ||
USD | 19,365,266 | JPY | 2,303,111,125 | Credit Suisse AG | 5/29/15 | 72,640 | ||
$ | (697,076 | ) |
NOTES TO SCHEDULE OF INVESTMENTS | ||
ADR | - | American Depositary Receipt |
EUR | - | Euro |
GBP | - | British Pound |
JPY | - | Japanese Yen |
USD | - | United States Dollar |
† | Category is less than 0.05% of total net assets. |
(1) | Non-income producing. |
See Notes to Financial Statements.
10
Statement of Assets and Liabilities |
APRIL 30, 2015 (UNAUDITED) | |||
Assets | |||
Investment securities, at value (cost of $1,364,693,858) | $ | 2,481,821,376 | |
Foreign currency holdings, at value (cost of $408,632) | 386,267 | ||
Receivable for investments sold | 9,640,432 | ||
Receivable for capital shares sold | 412,593 | ||
Unrealized appreciation on forward foreign currency exchange contracts | 82,667 | ||
Dividends and interest receivable | 1,163,998 | ||
2,493,507,333 | |||
Liabilities | |||
Payable for investments purchased | 8,258,937 | ||
Payable for capital shares redeemed | 499,485 | ||
Unrealized depreciation on forward foreign currency exchange contracts | 779,743 | ||
Accrued management fees | 2,044,298 | ||
Distribution and service fees payable | 14,066 | ||
11,596,529 | |||
Net Assets | $ | 2,481,910,804 | |
Net Assets Consist of: | |||
Capital (par value and paid-in surplus) | $ | 1,279,858,872 | |
Undistributed net investment income | 4,426,705 | ||
Undistributed net realized gain | 81,219,414 | ||
Net unrealized appreciation | 1,116,405,813 | ||
$ | 2,481,910,804 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | ||||
Investor Class, $0.01 Par Value | $2,389,937,924 | 40,426,859 | $59.12 | |||
Institutional Class, $0.01 Par Value | $36,112,624 | 602,473 | $59.94 | |||
A Class, $0.01 Par Value | $38,065,200 | 655,428 | $58.08* | |||
C Class, $0.01 Par Value | $5,605,443 | 103,554 | $54.13 | |||
R Class, $0.01 Par Value | $3,154,410 | 54,421 | $57.96 | |||
R6 Class, $0.01 Par Value | $9,035,203 | 150,793 | $59.92 |
*Maximum offering price $61.62 (net asset value divided by 0.9425).
See Notes to Financial Statements.
11
Statement of Operations |
FOR THE SIX MONTHS ENDED APRIL 30, 2015 (UNAUDITED) | |||
Investment Income (Loss) | |||
Income: | |||
Dividends (net of foreign taxes withheld of $120,868) | $ | 17,436,115 | |
Interest | 1,655 | ||
17,437,770 | |||
Expenses: | |||
Management fees | 11,935,924 | ||
Distribution and service fees: | |||
A Class | 47,597 | ||
C Class | 28,141 | ||
R Class | 7,679 | ||
Directors' fees and expenses | 43,465 | ||
Other expenses | 2,351 | ||
12,065,157 | |||
Net investment income (loss) | 5,372,613 | ||
Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investment transactions | 81,671,471 | ||
Foreign currency transactions | 3,189,274 | ||
84,860,745 | |||
Change in net unrealized appreciation (depreciation) on: | |||
Investments | 63,462,207 | ||
Translation of assets and liabilities in foreign currencies | (1,645,601 | ) | |
61,816,606 | |||
Net realized and unrealized gain (loss) | 146,677,351 | ||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 152,049,964 |
See Notes to Financial Statements.
12
Statement of Changes in Net Assets |
SIX MONTHS ENDED APRIL 30, 2015 (UNAUDITED) AND YEAR ENDED OCTOBER 31, 2014 | ||||||
Increase (Decrease) in Net Assets | April 30, 2015 | October 31, 2014 | ||||
Operations | ||||||
Net investment income (loss) | $ | 5,372,613 | $ | 7,707,013 | ||
Net realized gain (loss) | 84,860,745 | 209,270,269 | ||||
Change in net unrealized appreciation (depreciation) | 61,816,606 | 132,769,313 | ||||
Net increase (decrease) in net assets resulting from operations | 152,049,964 | 349,746,595 | ||||
Distributions to Shareholders | ||||||
From net investment income: | ||||||
Investor Class | (8,938,027 | ) | (9,365,514 | ) | ||
Institutional Class | (156,488 | ) | (245,709 | ) | ||
A Class | (56,611 | ) | (82,331 | ) | ||
R6 Class | (55,615 | ) | (214 | ) | ||
From net realized gains: | ||||||
Investor Class | (201,146,776 | ) | (8,633,102 | ) | ||
Institutional Class | (2,344,544 | ) | (155,106 | ) | ||
A Class | (3,423,892 | ) | (178,850 | ) | ||
C Class | (533,273 | ) | (34,463 | ) | ||
R Class | (268,899 | ) | (14,057 | ) | ||
R6 Class | (666,192 | ) | (109 | ) | ||
Decrease in net assets from distributions | (217,590,317 | ) | (18,709,455 | ) | ||
Capital Share Transactions | ||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | 167,990,463 | (165,037,117 | ) | |||
Net increase (decrease) in net assets | 102,450,110 | 166,000,023 | ||||
Net Assets | ||||||
Beginning of period | 2,379,460,694 | 2,213,460,671 | ||||
End of period | $ | 2,481,910,804 | $ | 2,379,460,694 | ||
Undistributed net investment income | $ | 4,426,705 | $ | 8,260,833 |
See Notes to Financial Statements.
13
Notes to Financial Statements |
APRIL 30, 2015 (UNAUDITED)
1. Organization
American Century Mutual Funds, Inc. (the corporation) is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company and is organized as a Maryland corporation. Select Fund (the fund) is one fund in a series issued by the corporation. The fund is diversified as defined under the 1940 Act. The fund’s investment objective is to seek long-term capital growth.
The fund offers the Investor Class, the Institutional Class, the A Class, the C Class, the R Class and the R6 Class. The A Class may incur an initial sales charge. The A Class and C Class may be subject to a contingent deferred sales charge. The share classes differ principally in their respective sales charges and distribution and shareholder servicing expenses and arrangements. The Institutional Class and R6 Class shareholders do not require the same level of shareholder and administrative services from American Century Investment Management, Inc. (ACIM) (the investment advisor) as shareholders of other classes. In addition, financial intermediaries do not receive any service, distribution or administrative fees for the R6 Class. As a result, the Institutional Class and R6 Class are charged lower unified management fees.
2. Significant Accounting Policies
The following is a summary of significant accounting policies consistently followed by the fund in preparation of its financial statements. The fund is an investment company and follows accounting and reporting guidance in accordance with accounting principles generally accepted in the United States of America. This may require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from these estimates. Management evaluated the impact of events or transactions occurring through the date the financial statements were issued that would merit recognition or disclosure.
Investment Valuations — The fund determines the fair value of its investments and computes its net asset value per share at 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. The Board of Directors has adopted valuation policies and procedures to guide the investment advisor in the fund’s investment valuation process and to provide methodologies for the oversight of the fund’s pricing function.
Equity securities that are listed or traded on a domestic securities exchange are valued at the last reported sales price or at the official closing price as provided by the exchange. Equity securities traded on foreign securities exchanges are generally valued at the closing price of such securities on the exchange where primarily traded or at the close of the NYSE, if that is earlier. If no last sales price is reported, or if local convention or regulation so provides, the mean of the latest bid and asked prices may be used. Securities traded over-the-counter are valued at the mean of the latest bid and asked prices, the last sales price, or the official closing price. Equity securities initially expressed in local currencies are translated into U.S. dollars at the mean of the appropriate currency exchange rate at the close of the NYSE as provided by an independent pricing service.
Fixed income securities maturing within 60 days at the time of purchase may be valued at cost, plus or minus any amortized discount or premium or at the evaluated mean as provided by an independent pricing service. Evaluated mean prices are commonly derived through utilization of market models, which may consider, among other factors: trade data, quotations from 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.
Open-end management investment companies are valued at the reported net asset value per share. Repurchase agreements are valued at cost, which approximates fair value. Forward foreign currency exchange contracts are valued at the mean of the appropriate forward exchange rate at the close of the NYSE as provided by an independent pricing service.
14
If the fund determines that the market price for an investment is not readily available or the valuation methods mentioned above do not reflect an investment’s fair value, such investment is valued as determined in good faith by the Board of Directors or its delegate, in accordance with policies and procedures adopted by the Board of Directors. In its determination of fair value, the fund may review several factors including, but not limited to, market information regarding the specific investment or comparable investments and correlation with other investment types, futures indices or general market indicators. Circumstances that may cause the fund to use these procedures to value an investment include, but are not limited to: an investment has been declared in default or is distressed; trading in a security has been suspended during the trading day or a security is not actively trading on its principal exchange; prices received from a regular pricing source are deemed unreliable; or there is a foreign market holiday and no trading occurred.
The fund monitors for significant events occurring after the close of an investment’s primary exchange but before the fund’s net asset value per share is determined. Significant events may include, but are not limited to: corporate announcements and transactions; governmental action and political unrest that could impact a specific investment or an investment sector; or armed conflicts, natural disasters and similar events that could affect investments in a specific country or region. The fund also monitors for significant fluctuations between domestic and foreign markets, as evidenced by the U.S. market or such other indicators that the Board of Directors, or its delegate, deems appropriate. If significant fluctuations in foreign markets are identified, the fund may apply a model-derived factor to the closing price of equity securities traded on foreign securities exchanges. The factor is based on observable market data as provided by an independent pricing service.
Security Transactions — Security transactions are accounted for as of the trade date. Net realized gains and losses are determined on the identified cost basis, which is also used for federal income tax purposes.
Investment Income — Dividend income less foreign taxes withheld, if any, is recorded as of the ex-dividend date. Distributions received on securities that represent a return of capital or long-term capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The fund may estimate the components of distributions received that may be considered nontaxable distributions or long-term capital gain distributions for income tax purposes. Interest income is recorded on the accrual basis and includes accretion of discounts and amortization of premiums.
Foreign Currency Translations — All assets and liabilities initially expressed in foreign currencies are translated into U.S. dollars at prevailing exchange rates at period end. The fund may enter into spot foreign currency exchange contracts to facilitate transactions denominated in a foreign currency. Purchases and sales of investment securities, dividend and interest income, spot foreign currency exchange contracts, and expenses are translated at the rates of exchange prevailing on the respective dates of such transactions. Net realized and unrealized foreign currency exchange gains or losses related to investment securities are a component of net realized gain (loss) on investment transactions and change in net unrealized appreciation (depreciation) on investments, respectively.
Repurchase Agreements — The fund may enter into repurchase agreements with institutions that ACIM has determined are creditworthy pursuant to criteria adopted by the Board of Directors. The fund requires that the collateral, represented by securities, received in a repurchase transaction be transferred to the custodian in a manner sufficient to enable the fund to obtain those securities in the event of a default under the repurchase agreement. ACIM monitors, on a daily basis, the securities transferred to ensure the value, including accrued interest, of the securities under each repurchase agreement is equal to or greater than amounts owed to the fund under each repurchase agreement.
Joint Trading Account — Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the fund, along with certain other funds in the American Century Investments family of funds, may transfer uninvested cash balances into a joint trading account. These balances are invested in one or more repurchase agreements that are collateralized by U.S. Treasury or Agency obligations.
Income Tax Status — It is the fund’s policy to distribute substantially all net investment income and net realized gains to shareholders and to otherwise qualify as a regulated investment company under provisions of the Internal Revenue Code. Accordingly, no provision has been made for income taxes. The fund files U.S. federal, state, local and non-U.S. tax returns as applicable. The fund's tax returns are subject to examination by the relevant taxing authority until expiration of the applicable statute of limitations, which is generally three years from the date of filing but can be longer in certain jurisdictions. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination and for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
15
Multiple Class — All shares of the fund represent an equal pro rata interest in the net assets of the class to which such shares belong, and have identical voting, dividend, liquidation and other rights and the same terms and conditions, except for class specific expenses and exclusive rights to vote on matters affecting only individual classes. Income, non-class specific expenses, and realized and unrealized capital gains and losses of the fund are allocated to each class of shares based on their relative net assets.
Distributions to Shareholders — Distributions from net investment income and net realized gains, if any, are generally declared and paid annually.
Indemnifications — Under the corporation’s organizational documents, its officers and directors are indemnified against certain liabilities arising out of the performance of their duties to the fund. In addition, in the normal course of business, the fund enters into contracts that provide general indemnifications. The maximum exposure under these arrangements is unknown as this would involve future claims that may be made against a fund. The risk of material loss from such claims is considered by management to be remote.
3. Fees and Transactions with Related Parties
Certain officers and directors of the corporation are also officers and/or directors of American Century Companies, Inc. (ACC). The corporation’s investment advisor, ACIM, the corporation's distributor, American Century Investment Services, Inc. (ACIS), and the corporation’s transfer agent, American Century Services, LLC, are wholly owned, directly or indirectly, by ACC.
Management Fees — The corporation has entered into a management agreement with ACIM, under which ACIM provides the fund with investment advisory and management services in exchange for a single, unified management fee (the fee) per class. The agreement provides that all expenses of managing and operating the fund, except distribution and service fees, brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), and extraordinary expenses, will be paid by ACIM. The fee is computed and accrued daily based on each class’s daily net assets and paid monthly in arrears. The rate of the fee is determined by applying a fee rate calculation formula. This formula takes into account the fund’s assets as well as certain assets, if any, of other clients of the investment advisor outside the American Century Investments family of funds (such as subadvised funds and separate accounts) that have very similar investment teams and investment strategies (strategy assets). The annual management fee schedule ranges from 0.800% to 0.990% for the Investor Class, A Class, C Class and R Class. The annual management fee schedule ranges from 0.600% to 0.790% for the Institutional Class and 0.450% to 0.640% for the R6 Class. The effective annual management fee for each class for the six months ended April 30, 2015 was 0.99% for the Investor Class, A Class, C Class and R Class, 0.79% for the Institutional Class and 0.64% for the R6 Class.
Distribution and Service Fees — The Board of Directors has adopted a separate Master Distribution and Individual Shareholder Services Plan for each of the A Class, C Class and R Class (collectively the plans), pursuant to Rule 12b-1 of the 1940 Act. The plans provide that the A Class will pay ACIS an annual distribution and service fee of 0.25%. The plans provide that the C Class will pay ACIS an annual distribution and service fee of 1.00%, of which 0.25% is paid for individual shareholder services and 0.75% is paid for distribution services. The plans provide that the R Class will pay ACIS an annual distribution and service fee of 0.50%. The fees are computed and accrued daily based on each class’s daily net assets and paid monthly in arrears. The fees are used to pay financial intermediaries for distribution and individual shareholder services. Fees incurred under the plans during the six months ended April 30, 2015 are detailed in the Statement of Operations.
Directors' Fees and Expenses — The Board of Directors is responsible for overseeing the investment advisor’s management and operations of the fund. The directors receive detailed information about the fund and its investment advisor regularly throughout the year, and meet at least quarterly with management of the investment advisor to review reports about fund operations. The fund’s officers do not receive compensation from the fund.
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the six months ended April 30, 2015 were $300,981,700 and $314,651,905, respectively.
16
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended April 30, 2015 | Year ended October 31, 2014 | |||||||||
Shares | Amount | Shares | Amount | |||||||
Investor Class/Shares Authorized | 300,000,000 | 300,000,000 | ||||||||
Sold | 1,174,468 | $ | 69,044,805 | 1,013,144 | $ | 57,402,134 | ||||
Issued in reinvestment of distributions | 3,711,291 | 200,706,584 | 318,597 | 17,156,436 | ||||||
Redeemed | (1,872,583) | (110,375,210) | (3,857,942) | (218,157,619) | ||||||
3,013,176 | 159,376,179 | (2,526,201) | (143,599,049) | |||||||
Institutional Class/Shares Authorized | 40,000,000 | 40,000,000 | ||||||||
Sold | 245,990 | 14,463,006 | 161,413 | 9,211,409 | ||||||
Issued in reinvestment of distributions | 45,621 | 2,499,550 | 6,433 | 350,521 | ||||||
Redeemed | (157,845) | (9,500,088) | (429,102) | (25,087,621) | ||||||
133,766 | 7,462,468 | (261,256) | (15,525,691) | |||||||
A Class/Shares Authorized | 75,000,000 | 75,000,000 | ||||||||
Sold | 69,585 | 4,074,172 | 116,938 | 6,632,877 | ||||||
Issued in reinvestment of distributions | 62,450 | 3,320,470 | 4,668 | 247,529 | ||||||
Redeemed | (136,990) | (7,904,493) | (291,832) | (16,281,685) | ||||||
(4,955) | (509,851) | (170,226) | (9,401,279) | |||||||
C Class/Shares Authorized | 25,000,000 | 25,000,000 | ||||||||
Sold | 9,707 | 524,663 | 12,065 | 623,486 | ||||||
Issued in reinvestment of distributions | 8,094 | 402,289 | 379 | 19,014 | ||||||
Redeemed | (18,928) | (1,037,105) | (71,078) | (3,785,994) | ||||||
(1,127) | (110,153) | (58,634) | (3,143,494) | |||||||
R Class/Shares Authorized | 50,000,000 | 50,000,000 | ||||||||
Sold | 2,418 | 140,060 | 8,774 | 488,474 | ||||||
Issued in reinvestment of distributions | 5,062 | 268,899 | 265 | 14,057 | ||||||
Redeemed | (3,789) | (222,286) | (21,213) | (1,181,480) | ||||||
3,691 | 186,673 | (12,174) | (678,949) | |||||||
R6 Class/Shares Authorized | 50,000,000 | 50,000,000 | ||||||||
Sold | 22,846 | 1,375,989 | 129,561 | 7,711,850 | ||||||
Issued in reinvestment of distributions | 13,186 | 721,807 | 6 | 323 | ||||||
Redeemed | (8,630) | (512,649) | (6,676 | ) | (400,828 | ) | ||||
27,402 | 1,585,147 | 122,891 | 7,311,345 | |||||||
Net increase (decrease) | 3,171,953 | $ | 167,990,463 | (2,905,600) | $ | (165,037,117 | ) |
6. Fair Value Measurements
The fund’s investments valuation process is based on several considerations and may use multiple inputs to determine the fair value of the investments held by the fund. In conformity with accounting principles generally accepted in the United States of America, the inputs used to determine a valuation are classified into three broad levels.
• | Level 1 valuation inputs consist of unadjusted quoted prices in an active market for identical investments. |
• | Level 2 valuation inputs consist of direct or indirect observable market data (including quoted prices for comparable investments, evaluations of subsequent market events, interest rates, prepayment speeds, credit risk, etc.). These inputs also consist of quoted prices for identical investments initially expressed in local currencies that are adjusted through translation into U.S. dollars. |
• | Level 3 valuation inputs consist of unobservable data (including a fund’s own assumptions). |
17
The level classification is based on the lowest level input that is significant to the fair valuation measurement. The valuation inputs are not necessarily an indication of the risks associated with investing in these securities or other financial instruments. There were no significant transfers between levels during the period.
The following is a summary of the level classifications as of period end. The Schedule of Investments provides additional information on the fund’s portfolio holdings.
Level 1 | Level 2 | Level 3 | ||||||
Assets | ||||||||
Investment Securities | ||||||||
Common Stocks | $ | 2,392,043,123 | $ | 80,966,505 | — | |||
Temporary Cash Investments | 3,901 | 8,807,847 | — | |||||
$ | 2,392,047,024 | $ | 89,774,352 | — | ||||
Other Financial Instruments | ||||||||
Forward Foreign Currency Exchange Contracts | — | $ | 82,667 | — | ||||
Liabilities | ||||||||
Other Financial Instruments | ||||||||
Forward Foreign Currency Exchange Contracts | — | $ | (779,743 | ) | — |
7. Derivative Instruments
Foreign Currency Risk — The fund is subject to foreign currency exchange rate risk in the normal course of pursuing its investment objectives. The value of foreign investments held by a fund may be significantly affected by changes in foreign currency exchange rates. The dollar value of a foreign security generally decreases when the value of the dollar rises against the foreign currency in which the security is denominated and tends to increase when the value of the dollar declines against such foreign currency. A fund may enter into forward foreign currency exchange contracts to reduce a fund's exposure to foreign currency exchange rate fluctuations. The net U.S. dollar value of foreign currency underlying all contractual commitments held by a fund and the resulting unrealized appreciation or depreciation are determined daily. Realized gain or loss is recorded upon the termination of the contract. Net realized and unrealized gains or losses occurring during the holding period of forward foreign currency exchange contracts are a component of net realized gain (loss) on foreign currency transactions and change in net unrealized appreciation (depreciation) on translation of assets and liabilities in foreign currencies, respectively. A fund bears the risk of an unfavorable change in the foreign currency exchange rate underlying the forward contract. Additionally, losses, up to the fair value, may arise if the counterparties do not perform under the contract terms. The fund's average U.S. dollar exposure to foreign currency risk derivative instruments held during the period was $59,745,644.
The value of foreign currency risk derivative instruments as of April 30, 2015, is disclosed on the Statement of Assets and Liabilities as an asset of $82,667 in unrealized appreciation on forward foreign currency exchange contracts and a liability of $779,743 in unrealized depreciation on forward foreign currency exchange contracts. For the six months ended April 30, 2015, the effect of foreign currency risk derivative instruments on the Statement of Operations was $3,184,826 in net realized gain (loss) on foreign currency transactions and $(1,638,728) in change in net unrealized appreciation (depreciation) on translation of assets and liabilities in foreign currencies.
8. Risk Factors
There are certain risks involved in investing in foreign securities. These risks include those resulting from future adverse political, social and economic developments, fluctuations in currency exchange rates, the possible imposition of exchange controls, and other foreign laws or restrictions.
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9. Federal Tax Information
The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
As of April 30, 2015, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $ | 1,368,518,211 | |
Gross tax appreciation of investments | $ | 1,123,321,171 | |
Gross tax depreciation of investments | (10,018,006 | ) | |
Net tax appreciation (depreciation) of investments | $ | 1,113,303,165 |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales.
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Financial Highlights |
For a Share Outstanding Throughout the Years Ended October 31 (except as noted) | |||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||
Income From Investment Operations: | Distributions From: | 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 | Net Investment Income | Net Realized Gains | Total Distributions | 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 | |||||||||||||||
2015(3) | $61.31 | 0.13 | 3.34 | 3.47 | (0.24) | (5.42) | (5.66) | $59.12 | 6.52% | 0.99%(4) | 0.45%(4) | 12% | $2,389,938 | ||
2014 | $53.07 | 0.19 | 8.51 | 8.70 | (0.24) | (0.22) | (0.46) | $61.31 | 16.50% | 1.00% | 0.34% | 25% | $2,293,893 | ||
2013 | $43.52 | 0.35 | 9.51 | 9.86 | (0.31) | — | (0.31) | $53.07 | 22.80% | 1.00% | 0.74% | 31% | $2,119,523 | ||
2012 | $39.14 | 0.17 | 4.31 | 4.48 | (0.10) | — | (0.10) | $43.52 | 11.50% | 1.00% | 0.41% | 17% | $1,861,545 | ||
2011 | $35.54 | 0.10 | 3.62 | 3.72 | (0.12) | — | (0.12) | $39.14 | 10.49% | 1.00% | 0.26% | 17% | $1,765,718 | ||
2010 | $30.58 | 0.11 | 5.01 | 5.12 | (0.16) | — | (0.16) | $35.54 | 16.78% | 1.01% | 0.34% | 35% | $1,722,138 | ||
Institutional Class | |||||||||||||||
2015(3) | $62.15 | 0.20 | 3.37 | 3.57 | (0.36) | (5.42) | (5.78) | $59.94 | 6.62% | 0.79%(4) | 0.65%(4) | 12% | $36,113 | ||
2014 | $53.79 | 0.32 | 8.61 | 8.93 | (0.35) | (0.22) | (0.57) | $62.15 | 16.74% | 0.80% | 0.54% | 25% | $29,130 | ||
2013 | $44.04 | 0.36 | 9.72 | 10.08 | (0.33) | — | (0.33) | $53.79 | 23.05% | 0.80% | 0.94% | 31% | $39,263 | ||
2012 | $39.60 | 0.24 | 4.38 | 4.62 | (0.18) | — | (0.18) | $44.04 | 11.73% | 0.80% | 0.61% | 17% | $16,828 | ||
2011 | $35.95 | 0.18 | 3.67 | 3.85 | (0.20) | — | (0.20) | $39.60 | 10.73% | 0.80% | 0.46% | 17% | $5,133 | ||
2010 | $30.94 | 0.18 | 5.06 | 5.24 | (0.23) | — | (0.23) | $35.95 | 17.02% | 0.81% | 0.54% | 35% | $4,563 |
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For a Share Outstanding Throughout the Years Ended October 31 (except as noted) | |||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||
Income From Investment Operations: | Distributions From: | 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 | Net Investment Income | Net Realized Gains | Total Distributions | 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) | |||
A Class | |||||||||||||||
2015(3) | $60.25 | 0.06 | 3.28 | 3.34 | (0.09) | (5.42) | (5.51) | $58.08 | 6.40% | 1.24%(4) | 0.20%(4) | 12% | $38,065 | ||
2014 | $52.15 | 0.06 | 8.36 | 8.42 | (0.10) | (0.22) | (0.32) | $60.25 | 16.21% | 1.25% | 0.09% | 25% | $39,786 | ||
2013 | $42.85 | 0.25 | 9.33 | 9.58 | (0.28) | — | (0.28) | $52.15 | 22.48% | 1.25% | 0.49% | 31% | $43,318 | ||
2012 | $38.54 | 0.06 | 4.26 | 4.32 | (0.01) | — | (0.01) | $42.85 | 11.22% | 1.25% | 0.16% | 17% | $45,355 | ||
2011 | $34.99 | —(5) | 3.58 | 3.58 | (0.03) | — | (0.03) | $38.54 | 10.23% | 1.25% | 0.01% | 17% | $24,573 | ||
2010 | $30.11 | 0.03 | 4.93 | 4.96 | (0.08) | — | (0.08) | $34.99 | 16.48% | 1.26% | 0.09% | 35% | $20,666 | ||
C Class | |||||||||||||||
2015(3) | $56.64 | (0.15) | 3.06 | 2.91 | — | (5.42) | (5.42) | $54.13 | 5.99% | 1.99%(4) | (0.55)%(4) | 12% | $5,605 | ||
2014 | $49.32 | (0.34) | 7.88 | 7.54 | — | (0.22) | (0.22) | $56.64 | 15.34% | 2.00% | (0.66)% | 25% | $5,929 | ||
2013 | $40.75 | (0.14) | 8.90 | 8.76 | (0.19) | — | (0.19) | $49.32 | 21.57% | 2.00% | (0.26)% | 31% | $8,054 | ||
2012 | $36.92 | (0.25) | 4.08 | 3.83 | — | — | — | $40.75 | 10.37% | 2.00% | (0.59)% | 17% | $5,666 | ||
2011 | $33.74 | (0.28) | 3.46 | 3.18 | — | — | — | $36.92 | 9.43% | 2.00% | (0.74)% | 17% | $571 | ||
2010 | $29.19 | (0.20) | 4.75 | 4.55 | — | — | — | $33.74 | 15.63% | 2.01% | (0.66)% | 35% | $390 | ||
R Class | |||||||||||||||
2015(3) | $60.12 | (0.02) | 3.28 | 3.26 | — | (5.42) | (5.42) | $57.96 | 6.26% | 1.49%(4) | (0.05)%(4) | 12% | $3,154 | ||
2014 | $52.07 | (0.08) | 8.35 | 8.27 | — | (0.22) | (0.22) | $60.12 | 15.92% | 1.50% | (0.16)% | 25% | $3,050 | ||
2013 | $42.86 | 0.03 | 9.43 | 9.46 | (0.25) | — | (0.25) | $52.07 | 22.18% | 1.50% | 0.24% | 31% | $3,275 | ||
2012 | $38.64 | (0.06) | 4.28 | 4.22 | — | — | — | $42.86 | 10.92% | 1.50% | (0.09)% | 17% | $1,456 | ||
2011 | $35.14 | (0.08) | 3.58 | 3.50 | — | — | — | $38.64 | 9.96% | 1.50% | (0.24)% | 17% | $59 | ||
2010 | $30.24 | (0.05) | 4.95 | 4.90 | — | — | — | $35.14 | 16.20% | 1.51% | (0.16)% | 35% | $29 |
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For a Share Outstanding Throughout the Years Ended October 31 (except as noted) | |||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||
Income From Investment Operations: | Distributions From: | 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 | Net Investment Income | Net Realized Gains | Total Distributions | 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) | |||
R6 Class | |||||||||||||||
2015(3) | $62.18 | 0.23 | 3.38 | 3.61 | (0.45) | (5.42) | (5.87) | $59.92 | 6.70% | 0.64%(4) | 0.80%(4) | 12% | $9,035 | ||
2014 | $53.81 | 0.18 | 8.84 | 9.02 | (0.43) | (0.22) | (0.65) | $62.18 | 16.92% | 0.65% | 0.69% | 25% | $7,672 | ||
2013(6) | $49.95 | 0.10 | 3.76 | 3.86 | — | — | — | $53.81 | 7.73% | 0.65%(4) | 0.72%(4) | 31%(7) | $27 |
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 and do not reflect applicable sales charges, if any. Total returns for periods less than one year are not annualized. |
(3) | Six months ended April 30, 2015 (unaudited). |
(4) | Annualized. |
(5) | Per-share amount was less than $0.005. |
(6) | July 26, 2013 (commencement of sale) through October 31, 2013. |
(7) | Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended October 31, 2013. |
See Notes to Financial Statements.
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Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain IRAs are subject to federal income tax withholding, unless you elect not to have withholding apply. Tax will be withheld on the total amount withdrawn even though you may be receiving amounts that are not subject to withholding, such as nondeductible contributions. In such case, excess amounts of withholding could occur. You may adjust your withholding election so that a greater or lesser amount will be withheld.
If you don’t want us to withhold on this amount, you must notify us to not withhold the federal income tax. You may notify us in writing or in certain situations by telephone or through other electronic means. For systematic withdrawals, your withholding election will remain in effect until revoked or changed by filing a new election. You have the right to revoke your election at any time.
Remember, even if you elect not to have income tax withheld, you are liable for paying income tax on the taxable portion of your withdrawal. If you elect not to have income tax withheld or you don’t have enough income tax withheld, you may be responsible for payment of estimated tax. You may incur penalties under the estimated tax rules if your withholding and estimated tax payments are not sufficient. You can reduce or defer the income tax on a distribution by directly or indirectly rolling such distribution over to another IRA or eligible plan. You should consult your tax advisor for additional information.
State tax will be withheld if, at the time of your distribution, your address is within one of the mandatory withholding states and you have federal income tax withheld (or as otherwise required by state law). State taxes will be withheld from your distribution in accordance with the respective state rules.
Distributions you receive from 403(b), 457 and qualified plans are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
A description of the policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund is available without charge, upon request, by calling 1-800-345-2021. It is also available on the "About Us" page of American Century Investments’ website at americancentury.com and on the Securities and Exchange Commission’s website at sec.gov. Information regarding how the investment advisor voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the "About Us" page at americancentury.com. It is also available at sec.gov.
Quarterly Portfolio Disclosure
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-Q. The fund’s Forms N-Q are available on the SEC’s website at sec.gov, and may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The fund also makes its complete schedule of portfolio holdings for the most recent quarter of its fiscal year available on its
website at americancentury.com and, upon request, by calling 1-800-345-2021.
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Notes |
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![]() | ||
Contact Us | americancentury.com | |
Automated Information Line | 1-800-345-8765 | |
Investor Services Representative | 1-800-345-2021 or 816-531-5575 | |
Investors Using Advisors | 1-800-378-9878 | |
Business, Not-For-Profit, Employer-Sponsored Retirement Plans | 1-800-345-3533 | |
Banks and Trust Companies, Broker-Dealers, Financial Professionals, Insurance Companies | 1-800-345-6488 | |
Telecommunications Relay Service for the Deaf | 711 | |
American Century Mutual Funds, Inc. | ||
Investment Advisor: American Century Investment Management, Inc. Kansas City, Missouri | ||
This report and the statements it contains are submitted for the general information of our shareholders. The report is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus. | ||
©2015 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-85682 1506 |
SEMIANNUAL REPORT | APRIL 30, 2015 |
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Small Cap Growth Fund
Table of Contents |
Any opinions expressed in this report reflect those of the author as of the date of the report, and do not necessarily represent the opinions of American Century Investments® or any other person in the American Century Investments organization. Any such opinions are subject to change at any time based upon market or other conditions and American Century Investments disclaims any responsibility to update such opinions. These opinions may not be relied upon as investment advice and, because investment decisions made by American Century Investments funds are based on numerous factors, may not be relied upon as an indication of trading intent on behalf of any American Century Investments fund. Security examples are used for representational purposes only and are not intended as recommendations to purchase or sell securities. Performance information for comparative indices and securities is provided to American Century Investments by third party vendors. To the best of American Century Investments’ knowledge, such information is accurate at the time of printing.
President’s Letter |
![]() | Dear Investor: Thank you for reviewing this semiannual report for the six months ended April 30, 2015. It provides a macroeconomic and financial market overview (below), followed by fund performance, a schedule of fund investments, and other financial information. For additional commentary and updated information on fund performance, key factors that affected asset returns, and other insights regarding the investment markets, we encourage you to visit our website, americancentury.com. |
Jonathan Thomas |
Global Divergence in Monetary Policies Influenced Investor Behavior
The six-month reporting period saw big swings in market returns, triggered in part by central bank moves. In October 2014, just before the period started, the U.S. Federal Reserve ended its latest bond-buying program (quantitative easing, QE). As QE wound down, the U.S. economy enjoyed 5% annualized growth (after inflation) in the third quarter of 2014, the highest rate since the third quarter of 2003. But while QE was ending in the U.S., other major central banks were starting or increasing QE as their economies faltered. A “global divergence” of economic growth and monetary policies opened between the U.S. and most of the rest of the developed world.
This divergence helped fuel increased demand for the U.S. dollar and U.S. dollar-denominated assets, and put downward pressure on commodities prices, most notably oil. Though the resulting dollar rally and oil price decline reversed somewhat in April 2015, the dollar remained 9% higher for the reporting period, as measured by the U.S. Dollar Index, while oil remained more than 25% lower, as measured by both Brent and West Texas Intermediate crude oil futures. In this environment, U.S. stocks and bonds posted moderate gains—the S&P 500 Index and the Barclays U.S. Aggregate Bond Index returned 4.40% and 2.06%, respectively.
We expect monetary policy divergence between the U.S. and other major developed economies to continue this year, accompanied by market volatility. This could present both challenges and opportunities for active investment managers. Upward pressures on inflation and interest rates could develop as the massive amount of global monetary stimulus in progress takes hold and economies improve. But we believe lingering constraining forces will likely keep inflation and interest rates relatively low for the next six months. In this environment, we continue to believe in a disciplined, diversified, long-term investment approach, using professionally managed stock and bond portfolios to meet financial goals. We appreciate your continued trust in us.
Sincerely,
![](https://capedge.com/proxy/N-CSRS/0000100334-15-000051/jonathanthomassig.jpg)
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
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Performance |
Total Returns as of April 30, 2015 | |||||||
Average Annual Returns | |||||||
Ticker Symbol | 6 months(1) | 1 year | 5 years | 10 years | Since Inception | Inception Date | |
Investor Class | ANOIX | 8.19% | 15.87% | 14.11% | 10.24% | 8.84% | 6/1/01 |
Russell 2000 Growth Index | — | 7.25% | 14.65% | 14.93% | 10.41% | 7.08% | — |
Institutional Class | ANONX | 8.22% | 16.08% | 14.31% | — | 7.07% | 5/18/07 |
A Class | ANOAX | 1/31/03 | |||||
No sales charge* | 7.97% | 15.53% | 13.81% | 9.96% | 11.50% | ||
With sales charge* | 1.73% | 8.84% | 12.48% | 9.32% | 10.97% | ||
B Class | ANOBX | 1/31/03 | |||||
No sales charge* | 7.56% | 14.67% | 12.96% | 9.14% | 10.68% | ||
With sales charge* | 2.56% | 10.67% | 12.84% | 9.14% | 10.68% | ||
C Class | ANOCX | 1/31/03 | |||||
No sales charge* | 7.62% | 14.71% | 12.95% | 9.14% | 10.71%(2) | ||
With sales charge* | 6.62% | 14.71% | 12.95% | 9.14% | 10.71%(2) | ||
R Class | ANORX | 7.91% | 15.26% | 13.53% | — | 5.46% | 9/28/07 |
R6 Class | ANODX | 8.29% | 16.23% | — | — | 13.26% | 7/26/13 |
* Sales charges include initial sales charges and contingent deferred sales charges (CDSCs), as applicable. A Class shares have a 5.75% maximum initial sales charge and may be subject to a maximum CDSC of 1.00%. B Class shares redeemed within six years of purchase are subject to a CDSC that declines from 5.00% during the first year to 0.00% after the sixth year. C Class shares redeemed within 12 months of purchase are subject to a maximum CDSC of 1.00%. The SEC requires that mutual funds provide performance information net of maximum sales charges in all cases where charges could be applied.
(1) | Total returns for periods less than one year are not annualized. |
(2) | Returns would have been lower if a portion of the distribution and service fees had not been waived. |
Total Annual Fund Operating Expenses | ||||||
Investor Class | Institutional Class | A Class | B Class | C Class | R Class | R6 Class |
1.41% | 1.21% | 1.66% | 2.41% | 2.41% | 1.91% | 1.06% |
The total annual fund operating expenses shown is as stated in the fund’s prospectus current as of the date of this report. The prospectus may vary from the expense ratio shown elsewhere in this report because it is based on a different time period, includes acquired fund fees and expenses, and, if applicable, does not include fee waivers or expense reimbursements.
Data presented reflect past performance. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance shown. Investment return and principal value will fluctuate, and redemption value may be more or less than original cost. Data assumes reinvestment of dividends and capital gains, and none of the charts reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. To obtain performance data current to the most recent month end, please call 1-800-345-2021 or visit americancentury.com. For additional information about the fund, please consult the prospectus.
3
Fund Characteristics |
APRIL 30, 2015 | |
Top Ten Holdings | % of net assets |
CoStar Group, Inc. | 1.7% |
Middleby Corp. | 1.6% |
Brunswick Corp. | 1.5% |
Skechers U.S.A., Inc., Class A | 1.5% |
Papa John's International, Inc. | 1.5% |
Restoration Hardware Holdings, Inc. | 1.4% |
ExamWorks Group, Inc. | 1.4% |
Envestnet, Inc. | 1.4% |
Men's Wearhouse, Inc. (The) | 1.3% |
Vail Resorts, Inc. | 1.2% |
Top Five Industries | % of net assets |
Biotechnology | 9.9% |
Software | 6.6% |
Hotels, Restaurants and Leisure | 5.8% |
Internet Software and Services | 5.6% |
Health Care Equipment and Supplies | 5.6% |
Types of Investments in Portfolio | % of net assets |
Common Stocks | 98.4% |
Temporary Cash Investments | 2.1% |
Other Assets and Liabilities | (0.5)% |
4
Shareholder Fee Example |
Fund shareholders may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption/exchange fees; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in your fund and to compare these costs with the ongoing cost of investing in other mutual funds.
The example is based on an investment of $1,000 made at the beginning of the period and held for the entire period from November 1, 2014 to April 30, 2015.
Actual Expenses
The table provides information about actual account values and actual expenses for each class. You may use the information, together with the amount you invested, to estimate the expenses that you paid over the period. First, identify the share class you own. Then simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
If you hold Investor Class shares of any American Century Investments fund, or Institutional Class shares of the American Century Diversified Bond Fund, in an American Century Investments account (i.e., not a financial intermediary or retirement plan account), American Century Investments may charge you a $12.50 semiannual account maintenance fee if the value of those shares is less than $10,000. We will redeem shares automatically in one of your accounts to pay the $12.50 fee. 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. Personal accounts include individual accounts, joint accounts, UGMA/UTMA accounts, personal trusts, Coverdell Education Savings Accounts and 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. If you are subject to the Account Maintenance Fee, your account value could be reduced by the fee amount.
Hypothetical Example for Comparison Purposes
The table also provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio of each class of your fund and an assumed rate of return of 5% per year before expenses, which is not the actual return of a fund’s share class. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) or redemption/exchange fees. Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
5
Beginning Account Value 11/1/14 | Ending Account Value 4/30/15 | Expenses Paid During Period(1) 11/1/14 - 4/30/15 | Annualized Expense Ratio(1) | |
Actual | ||||
Investor Class | $1,000 | $1,081.90 | $7.33 | 1.42% |
Institutional Class | $1,000 | $1,082.20 | $6.30 | 1.22% |
A Class | $1,000 | $1,079.70 | $8.61 | 1.67% |
B Class | $1,000 | $1,075.60 | $12.45 | 2.42% |
C Class | $1,000 | $1,076.20 | $12.46 | 2.42% |
R Class | $1,000 | $1,079.10 | $9.90 | 1.92% |
R6 Class | $1,000 | $1,082.90 | $5.53 | 1.07% |
Hypothetical | ||||
Investor Class | $1,000 | $1,017.75 | $7.10 | 1.42% |
Institutional Class | $1,000 | $1,018.75 | $6.11 | 1.22% |
A Class | $1,000 | $1,016.51 | $8.35 | 1.67% |
B Class | $1,000 | $1,012.79 | $12.08 | 2.42% |
C Class | $1,000 | $1,012.79 | $12.08 | 2.42% |
R Class | $1,000 | $1,015.27 | $9.59 | 1.92% |
R6 Class | $1,000 | $1,019.49 | $5.36 | 1.07% |
(1) | Expenses are equal to the class's annualized expense ratio listed in the table above, multiplied by the average account value over the period, multiplied by 181, the number of days in the most recent fiscal half-year, divided by 365, to reflect the one-half year period. |
6
Schedule of Investments |
APRIL 30, 2015 (UNAUDITED)
Shares | Value | |||
COMMON STOCKS — 98.4% | ||||
Aerospace and Defense — 0.9% | ||||
Esterline Technologies Corp.(1) | 32,990 | $ | 3,671,457 | |
Airlines — 0.5% | ||||
Spirit Airlines, Inc.(1) | 30,810 | 2,109,561 | ||
Banks — 2.3% | ||||
Bank of the Ozarks, Inc. | 60,597 | 2,348,740 | ||
Cathay General Bancorp | 92,776 | 2,651,538 | ||
Renasant Corp. | 53,163 | 1,579,473 | ||
Signature Bank(1) | 16,979 | 2,276,714 | ||
8,856,465 | ||||
Beverages — 0.3% | ||||
Boston Beer Co., Inc. (The), Class A(1) | 4,206 | 1,042,247 | ||
Biotechnology — 9.9% | ||||
ACADIA Pharmaceuticals, Inc.(1) | 44,374 | 1,516,260 | ||
Acceleron Pharma, Inc.(1) | 8,868 | 245,200 | ||
Aduro Biotech, Inc.(1) | 10,706 | 271,932 | ||
Agios Pharmaceuticals, Inc.(1) | 7,535 | 695,782 | ||
Alder Biopharmaceuticals, Inc.(1) | 51,051 | 1,301,801 | ||
AMAG Pharmaceuticals, Inc.(1) | 41,074 | 2,093,542 | ||
Anacor Pharmaceuticals, Inc.(1) | 24,054 | 1,267,405 | ||
Bluebird Bio, Inc.(1) | 12,960 | 1,726,142 | ||
Celldex Therapeutics, Inc.(1) | 50,783 | 1,218,792 | ||
Cepheid, Inc.(1) | 38,583 | 2,164,506 | ||
Clovis Oncology, Inc.(1) | 18,244 | 1,466,088 | ||
Dyax Corp.(1) | 86,917 | 2,078,185 | ||
Esperion Therapeutics, Inc.(1) | 11,429 | 1,087,241 | ||
Exact Sciences Corp.(1) | 54,842 | 1,146,198 | ||
Halozyme Therapeutics, Inc.(1) | 76,943 | 1,144,142 | ||
Isis Pharmaceuticals, Inc.(1) | 54,605 | 3,097,196 | ||
Keryx Biopharmaceuticals, Inc.(1) | 65,622 | 699,531 | ||
Kite Pharma, Inc.(1) | 14,236 | 717,210 | ||
KYTHERA Biopharmaceuticals, Inc.(1) | 9,806 | 428,424 | ||
Ligand Pharmaceuticals, Inc., Class B(1) | 11,974 | 929,661 | ||
Neurocrine Biosciences, Inc.(1) | 47,355 | 1,614,332 | ||
Novavax, Inc.(1) | 159,212 | 1,230,709 | ||
Opko Health, Inc.(1) | 112,016 | 1,541,340 | ||
Portola Pharmaceuticals, Inc.(1) | 28,780 | 1,027,158 | ||
PTC Therapeutics, Inc.(1) | 9,692 | 569,405 | ||
Puma Biotechnology, Inc.(1) | 10,295 | 1,859,071 | ||
Receptos, Inc.(1) | 11,052 | 1,628,402 | ||
Sangamo Biosciences, Inc.(1) | 55,155 | 682,267 | ||
Sarepta Therapeutics, Inc.(1) | 32,106 | 391,693 | ||
Spark Therapeutics, Inc.(1) | 8,336 | 477,403 | ||
Synageva BioPharma Corp.(1) | 13,780 | 1,267,209 | ||
TESARO, Inc.(1) | 16,335 | 889,767 | ||
38,473,994 |
7
Shares | Value | |||
Building Products — 3.8% | ||||
Apogee Enterprises, Inc. | 56,225 | $ | 2,958,559 | |
Caesarstone Sdot-Yam Ltd. | 52,706 | 3,122,303 | ||
Insteel Industries, Inc. | 95,629 | 1,937,444 | ||
Lennox International, Inc. | 18,574 | 1,968,101 | ||
NCI Building Systems, Inc.(1) | 127,949 | 1,980,651 | ||
Trex Co., Inc.(1) | 56,421 | 2,647,273 | ||
14,614,331 | ||||
Capital Markets — 1.6% | ||||
Evercore Partners, Inc., Class A | 62,379 | 3,009,163 | ||
HFF, Inc., Class A | 84,992 | 3,330,836 | ||
6,339,999 | ||||
Chemicals — 0.6% | ||||
PolyOne Corp. | 60,056 | 2,345,187 | ||
Commercial Services and Supplies — 3.3% | ||||
ABM Industries, Inc. | 70,401 | 2,256,352 | ||
ARC Document Solutions, Inc.(1) | 224,444 | 1,916,752 | ||
HNI Corp. | 48,849 | 2,278,317 | ||
KAR Auction Services, Inc. | 81,943 | 3,049,099 | ||
Multi-Color Corp. | 54,054 | 3,393,510 | ||
12,894,030 | ||||
Communications Equipment — 1.3% | ||||
Infinera Corp.(1) | 142,890 | 2,686,332 | ||
Ruckus Wireless, Inc.(1) | 195,139 | 2,279,224 | ||
4,965,556 | ||||
Construction Materials — 1.6% | ||||
Headwaters, Inc.(1) | 157,194 | 2,763,471 | ||
Summit Materials, Inc., Class A(1) | 136,793 | 3,240,626 | ||
6,004,097 | ||||
Containers and Packaging — 1.5% | ||||
Berry Plastics Group, Inc.(1) | 89,312 | 3,056,257 | ||
Graphic Packaging Holding Co. | 187,720 | 2,646,852 | ||
5,703,109 | ||||
Distributors — 1.4% | ||||
Core-Mark Holding Co., Inc. | 39,588 | 2,086,684 | ||
LKQ Corp.(1) | 117,491 | 3,180,481 | ||
5,267,165 | ||||
Diversified Consumer Services — 0.8% | ||||
Nord Anglia Education, Inc.(1) | 117,909 | 3,071,529 | ||
Diversified Financial Services — 0.8% | ||||
MarketAxess Holdings, Inc. | 36,416 | 3,126,314 | ||
Electronic Equipment, Instruments and Components — 2.8% | ||||
Belden, Inc. | 46,747 | 3,924,410 | ||
Cognex Corp.(1) | 33,881 | 1,520,918 | ||
Mercury Systems, Inc.(1) | 178,880 | 2,470,333 | ||
Methode Electronics, Inc. | 66,939 | 2,842,230 | ||
10,757,891 | ||||
Energy Equipment and Services — 0.3% | ||||
RigNet, Inc.(1) | 35,228 | 1,319,641 | ||
Food and Staples Retailing — 1.6% | ||||
Natural Grocers by Vitamin Cottage, Inc.(1) | 69,214 | 1,821,713 |
8
Shares | Value | |||
United Natural Foods, Inc.(1) | 66,744 | $ | 4,502,550 | |
6,324,263 | ||||
Food Products — 1.4% | ||||
J&J Snack Foods Corp. | 30,146 | 3,145,132 | ||
TreeHouse Foods, Inc.(1) | 29,652 | 2,409,522 | ||
5,554,654 | ||||
Health Care Equipment and Supplies — 5.6% | ||||
Cantel Medical Corp. | 25,148 | 1,126,379 | ||
Cardiovascular Systems, Inc.(1) | 64,676 | 2,024,359 | ||
DexCom, Inc.(1) | 55,853 | 3,773,987 | ||
Entellus Medical, Inc.(1) | 76,149 | 2,095,620 | ||
HeartWare International, Inc.(1) | 11,317 | 856,810 | ||
Insulet Corp.(1) | 27,995 | 835,651 | ||
NuVasive, Inc.(1) | 84,703 | 3,788,765 | ||
STERIS Corp. | 45,963 | 3,056,540 | ||
Teleflex, Inc. | 16,600 | 2,041,136 | ||
West Pharmaceutical Services, Inc. | 40,408 | 2,152,938 | ||
21,752,185 | ||||
Health Care Providers and Services — 5.5% | ||||
AAC Holdings, Inc.(1) | 70,232 | 2,434,241 | ||
Adeptus Health, Inc., Class A(1) | 43,109 | 2,736,128 | ||
Air Methods Corp.(1) | 25,529 | 1,166,675 | ||
AMN Healthcare Services, Inc.(1) | 119,992 | 2,737,018 | ||
ExamWorks Group, Inc.(1) | 130,295 | 5,335,580 | ||
Healthways, Inc.(1) | 71,019 | 1,235,731 | ||
Molina Healthcare, Inc.(1) | 19,152 | 1,134,373 | ||
Team Health Holdings, Inc.(1) | 74,764 | 4,453,691 | ||
21,233,437 | ||||
Health Care Technology — 1.2% | ||||
HMS Holdings Corp.(1) | 139,276 | 2,369,085 | ||
Medidata Solutions, Inc.(1) | 45,924 | 2,453,719 | ||
4,822,804 | ||||
Hotels, Restaurants and Leisure — 5.8% | ||||
Buffalo Wild Wings, Inc.(1) | 14,856 | 2,366,561 | ||
El Pollo Loco Holdings, Inc.(1) | 109,009 | 2,853,855 | ||
La Quinta Holdings, Inc.(1) | 155,977 | 3,755,926 | ||
Papa John's International, Inc. | 92,947 | 5,704,157 | ||
Texas Roadhouse, Inc. | 92,418 | 3,105,245 | ||
Vail Resorts, Inc. | 47,013 | 4,664,160 | ||
22,449,904 | ||||
Insurance — 0.4% | ||||
Allied World Assurance Co. Holdings Ltd. | 36,240 | 1,490,914 | ||
Internet Software and Services — 5.6% | ||||
comScore, Inc.(1) | 84,624 | 4,430,913 | ||
CoStar Group, Inc.(1) | 32,053 | 6,552,595 | ||
Demandware, Inc.(1) | 41,165 | 2,535,764 | ||
Envestnet, Inc.(1) | 103,762 | 5,318,840 | ||
Q2 Holdings, Inc.(1) | 146,193 | 2,975,027 | ||
21,813,139 | ||||
IT Services — 1.6% | ||||
Virtusa Corp.(1) | 79,304 | 3,156,299 |
9
Shares | Value | |||
WEX, Inc.(1) | 27,872 | $ | 3,141,453 | |
6,297,752 | ||||
Leisure Products — 1.5% | ||||
Brunswick Corp. | 118,836 | 5,946,553 | ||
Life Sciences Tools and Services — 0.9% | ||||
Charles River Laboratories International, Inc.(1) | 28,578 | 1,976,454 | ||
PAREXEL International Corp.(1) | 26,335 | 1,674,248 | ||
3,650,702 | ||||
Machinery — 2.4% | ||||
John Bean Technologies Corp. | 78,334 | 3,022,909 | ||
Middleby Corp.(1) | 60,248 | 6,105,532 | ||
9,128,441 | ||||
Metals and Mining — 0.9% | ||||
Horsehead Holding Corp.(1) | 224,622 | 3,358,099 | ||
Multiline Retail — 0.6% | ||||
Burlington Stores, Inc.(1) | 47,908 | 2,470,616 | ||
Oil, Gas and Consumable Fuels — 3.3% | ||||
Carrizo Oil & Gas, Inc.(1) | 74,777 | 4,167,322 | ||
Diamondback Energy, Inc.(1) | 39,953 | 3,298,919 | ||
Enviva Partners, LP(1) | 123,224 | 2,611,117 | ||
Gulfport Energy Corp.(1) | 58,695 | 2,872,533 | ||
12,949,891 | ||||
Paper and Forest Products — 0.3% | ||||
KapStone Paper and Packaging Corp. | 37,221 | 1,040,327 | ||
Pharmaceuticals — 2.2% | ||||
Depomed, Inc.(1) | 98,155 | 2,283,085 | ||
Horizon Pharma plc(1) | 93,247 | 2,622,106 | ||
Medicines Co. (The)(1) | 42,463 | 1,087,477 | ||
Pacira Pharmaceuticals, Inc.(1) | 29,153 | 1,996,398 | ||
Tetraphase Pharmaceuticals, Inc.(1) | 12,319 | 434,614 | ||
8,423,680 | ||||
Professional Services — 1.4% | ||||
Huron Consulting Group, Inc.(1) | 50,760 | 3,077,071 | ||
Korn/Ferry International | 75,365 | 2,376,259 | ||
5,453,330 | ||||
Real Estate Investment Trusts (REITs) — 0.7% | ||||
Sun Communities, Inc. | 42,710 | 2,650,583 | ||
Road and Rail — 1.2% | ||||
Saia, Inc.(1) | 68,408 | 2,787,626 | ||
Swift Transportation Co.(1) | 80,528 | 1,948,778 | ||
4,736,404 | ||||
Semiconductors and Semiconductor Equipment — 4.9% | ||||
Cavium, Inc.(1) | 39,243 | 2,542,554 | ||
Cypress Semiconductor Corp. | 314,343 | 4,187,049 | ||
M/A-COM Technology Solutions Holdings, Inc.(1) | 55,762 | 1,699,068 | ||
Photronics, Inc.(1) | 229,473 | 2,012,478 | ||
Qorvo, Inc.(1) | 57,828 | 3,811,443 | ||
Synaptics, Inc.(1) | 54,184 | 4,590,469 | ||
18,843,061 |
10
Shares | Value | |||
Software — 6.6% | ||||
Barracuda Networks, Inc.(1) | 64,856 | $ | 2,628,614 | |
ePlus, Inc.(1) | 25,127 | 2,084,536 | ||
FireEye, Inc.(1) | 23,854 | 985,170 | ||
Manhattan Associates, Inc.(1) | 63,029 | 3,312,804 | ||
Monotype Imaging Holdings, Inc. | 89,337 | 2,895,412 | ||
Proofpoint, Inc.(1) | 18,295 | 987,564 | ||
QLIK Technologies, Inc.(1) | 102,001 | 3,548,615 | ||
Tyler Technologies, Inc.(1) | 23,714 | 2,891,922 | ||
Ultimate Software Group, Inc.(1) | 14,627 | 2,431,300 | ||
Verint Systems, Inc.(1) | 60,567 | 3,720,631 | ||
25,486,568 | ||||
Specialty Retail — 5.1% | ||||
Kirkland's, Inc.(1) | 151,563 | 3,598,106 | ||
Men's Wearhouse, Inc. (The) | 86,035 | 4,868,721 | ||
Monro Muffler Brake, Inc. | 53,344 | 3,194,772 | ||
Restoration Hardware Holdings, Inc.(1) | 64,365 | 5,546,332 | ||
Tile Shop Holdings, Inc.(1) | 187,164 | 2,427,517 | ||
19,635,448 | ||||
Technology Hardware, Storage and Peripherals — 1.8% | ||||
Nimble Storage, Inc.(1) | 111,517 | 2,727,706 | ||
Super Micro Computer, Inc.(1) | 153,490 | 4,415,907 | ||
7,143,613 | ||||
Textiles, Apparel and Luxury Goods — 1.5% | ||||
Skechers U.S.A., Inc., Class A(1) | 64,425 | 5,793,096 | ||
Wireless Telecommunication Services — 0.7% | ||||
RingCentral, Inc., Class A(1) | 148,613 | 2,560,602 | ||
TOTAL COMMON STOCKS (Cost $288,197,610) | 381,572,639 | |||
TEMPORARY CASH INVESTMENTS — 2.1% | ||||
Repurchase Agreement, Bank of America Merrill Lynch, (collateralized by various U.S. Treasury obligations, 1.375%, 4/30/20, valued at $1,332,608), in a joint trading account at 0.08%, dated 4/30/15, due 5/1/15 (Delivery value $1,309,446) | 1,309,443 | |||
Repurchase Agreement, Credit Suisse First Boston, Inc., (collateralized by various U.S. Treasury obligations, 1.50%, 12/31/18, valued at $3,198,954), in a joint trading account at 0.03%, dated 4/30/15, due 5/1/15 (Delivery value $3,142,665) | 3,142,662 | |||
Repurchase Agreement, Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 3.625%, 2/15/44, valued at $3,742,613), at 0.01%, dated 4/30/15, due 5/1/15 (Delivery value $3,668,001) | 3,668,000 | |||
State Street Institutional Liquid Reserves Fund, Premier Class | 4,232 | 4,232 | ||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $8,124,337) | 8,124,337 | |||
TOTAL INVESTMENT SECURITIES — 100.5% (Cost $296,321,947) | 389,696,976 | |||
OTHER ASSETS AND LIABILITIES — (0.5)% | (1,792,815) | |||
TOTAL NET ASSETS — 100.0% | $ | 387,904,161 |
NOTES TO SCHEDULE OF INVESTMENTS |
(1) | Non-income producing. |
See Notes to Financial Statements.
11
Statement of Assets and Liabilities |
APRIL 30, 2015 (UNAUDITED) | |||
Assets | |||
Investment securities, at value (cost of $296,321,947) | $ | 389,696,976 | |
Receivable for investments sold | 4,991,185 | ||
Receivable for capital shares sold | 267,457 | ||
Dividends and interest receivable | 15,522 | ||
394,971,140 | |||
Liabilities | |||
Payable for investments purchased | 6,363,320 | ||
Payable for capital shares redeemed | 222,879 | ||
Accrued management fees | 446,793 | ||
Distribution and service fees payable | 33,987 | ||
7,066,979 | |||
Net Assets | $ | 387,904,161 | |
Net Assets Consist of: | |||
Capital (par value and paid-in surplus) | $ | 382,948,747 | |
Accumulated net investment loss | (5,488,594 | ) | |
Accumulated net realized loss | (82,931,021 | ) | |
Net unrealized appreciation | 93,375,029 | ||
$ | 387,904,161 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | ||
Investor Class, $0.01 Par Value | $178,919,474 | 12,902,664 | $13.87 | |
Institutional Class, $0.01 Par Value | $67,385,051 | 4,786,047 | $14.08 | |
A Class, $0.01 Par Value | $104,570,338 | 7,720,670 | $13.54* | |
B Class, $0.01 Par Value | $594,866 | 46,982 | $12.66 | |
C Class, $0.01 Par Value | $12,050,013 | 948,291 | $12.71 | |
R Class, $0.01 Par Value | $1,599,021 | 119,633 | $13.37 | |
R6 Class, $0.01 Par Value | $22,785,398 | 1,614,766 | $14.11 |
*Maximum offering price $14.37 (net asset value divided by 0.9425).
See Notes to Financial Statements.
12
Statement of Operations |
FOR THE SIX MONTHS ENDED APRIL 30, 2015 (UNAUDITED) | |||
Investment Income (Loss) | |||
Income: | |||
Dividends (net of foreign taxes withheld of $4,899) | $ | 861,987 | |
Interest | 1,070 | ||
863,057 | |||
Expenses: | |||
Management fees | 2,594,045 | ||
Distribution and service fees: | |||
A Class | 128,867 | ||
B Class | 3,101 | ||
C Class | 60,439 | ||
R Class | 3,625 | ||
Directors' fees and expenses | 6,910 | ||
2,796,987 | |||
Net investment income (loss) | (1,933,930 | ) | |
Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investment transactions | 26,895,789 | ||
Foreign currency transactions | 19,888 | ||
26,915,677 | |||
Change in net unrealized appreciation (depreciation) on: | |||
Investments | 4,510,333 | ||
Translation of assets and liabilities in foreign currencies | (15,996 | ) | |
4,494,337 | |||
Net realized and unrealized gain (loss) | 31,410,014 | ||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 29,476,084 |
See Notes to Financial Statements.
13
Statement of Changes in Net Assets |
SIX MONTHS ENDED APRIL 30, 2015 (UNAUDITED) AND YEAR ENDED OCTOBER 31, 2014 | ||||||
Increase (Decrease) in Net Assets | April 30, 2015 | October 31, 2014 | ||||
Operations | ||||||
Net investment income (loss) | $ | (1,933,930 | ) | $ | (4,072,462 | ) |
Net realized gain (loss) | 26,915,677 | 68,980,855 | ||||
Change in net unrealized appreciation (depreciation) | 4,494,337 | (37,263,366 | ) | |||
Net increase (decrease) in net assets resulting from operations | 29,476,084 | 27,645,027 | ||||
Capital Share Transactions | ||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | (16,705,508 | ) | (85,899,458 | ) | ||
Redemption Fees | ||||||
Increase in net assets from redemption fees | 7,279 | 32,108 | ||||
Net increase (decrease) in net assets | 12,777,855 | (58,222,323 | ) | |||
Net Assets | ||||||
Beginning of period | 375,126,306 | 433,348,629 | ||||
End of period | $ | 387,904,161 | $ | 375,126,306 | ||
Accumulated net investment loss | $ | (5,488,594 | ) | $ | (3,554,664 | ) |
See Notes to Financial Statements.
14
Notes to Financial Statements |
APRIL 30, 2015 (UNAUDITED)
1. Organization
American Century Mutual Funds, Inc. (the corporation) is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company and is organized as a Maryland corporation. Small Cap Growth Fund (the fund) is one fund in a series issued by the corporation. The fund is diversified as defined under the 1940 Act. The fund’s investment objective is to seek long-term capital growth.
The fund offers the Investor Class, the Institutional Class, the A Class, the B Class, the C Class, the R Class and the R6 Class. The A Class may incur an initial sales charge. The A Class, B Class and C Class may be subject to a contingent deferred sales charge. The share classes differ principally in their respective sales charges and distribution and shareholder servicing expenses and arrangements. The Institutional Class and R6 Class shareholders do not require the same level of shareholder and administrative services from American Century Investment Management, Inc. (ACIM) (the investment advisor) as shareholders of other classes. In addition, financial intermediaries do not receive any service, distribution or administrative fees for the R6 Class. As a result, the Institutional Class and R6 Class are charged lower unified management fees.
2. Significant Accounting Policies
The following is a summary of significant accounting policies consistently followed by the fund in preparation of its financial statements. The fund is an investment company and follows accounting and reporting guidance in accordance with accounting principles generally accepted in the United States of America. This may require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from these estimates. Management evaluated the impact of events or transactions occurring through the date the financial statements were issued that would merit recognition or disclosure.
Investment Valuations — The fund determines the fair value of its investments and computes its net asset value per share at 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. The Board of Directors has adopted valuation policies and procedures to guide the investment advisor in the fund’s investment valuation process and to provide methodologies for the oversight of the fund’s pricing function.
Equity securities that are listed or traded on a domestic securities exchange are valued at the last reported sales price or at the official closing price as provided by the exchange. Equity securities traded on foreign securities exchanges are generally valued at the closing price of such securities on the exchange where primarily traded or at the close of the NYSE, if that is earlier. If no last sales price is reported, or if local convention or regulation so provides, the mean of the latest bid and asked prices may be used. Securities traded over-the-counter are valued at the mean of the latest bid and asked prices, the last sales price, or the official closing price. Equity securities initially expressed in local currencies are translated into U.S. dollars at the mean of the appropriate currency exchange rate at the close of the NYSE as provided by an independent pricing service.
Fixed income securities maturing within 60 days at the time of purchase may be valued at cost, plus or minus any amortized discount or premium or at the evaluated mean as provided by an independent pricing service. Evaluated mean prices are commonly derived through utilization of market models, which may consider, among other factors: trade data, quotations from 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.
Open-end management investment companies are valued at the reported net asset value per share. Repurchase agreements are valued at cost, which approximates fair value. Forward foreign currency exchange contracts are valued at the mean of the appropriate forward exchange rate at the close of the NYSE as provided by an independent pricing service.
15
If the fund determines that the market price for an investment is not readily available or the valuation methods mentioned above do not reflect an investment’s fair value, such investment is valued as determined in good faith by the Board of Directors or its delegate, in accordance with policies and procedures adopted by the Board of Directors. In its determination of fair value, the fund may review several factors including, but not limited to, market information regarding the specific investment or comparable investments and correlation with other investment types, futures indices or general market indicators. Circumstances that may cause the fund to use these procedures to value an investment include, but are not limited to: an investment has been declared in default or is distressed; trading in a security has been suspended during the trading day or a security is not actively trading on its principal exchange; prices received from a regular pricing source are deemed unreliable; or there is a foreign market holiday and no trading occurred.
The fund monitors for significant events occurring after the close of an investment’s primary exchange but before the fund’s net asset value per share is determined. Significant events may include, but are not limited to: corporate announcements and transactions; governmental action and political unrest that could impact a specific investment or an investment sector; or armed conflicts, natural disasters and similar events that could affect investments in a specific country or region. The fund also monitors for significant fluctuations between domestic and foreign markets, as evidenced by the U.S. market or such other indicators that the Board of Directors, or its delegate, deems appropriate. If significant fluctuations in foreign markets are identified, the fund may apply a model-derived factor to the closing price of equity securities traded on foreign securities exchanges. The factor is based on observable market data as provided by an independent pricing service.
Security Transactions — Security transactions are accounted for as of the trade date. Net realized gains and losses are determined on the identified cost basis, which is also used for federal income tax purposes.
Investment Income — Dividend income less foreign taxes withheld, if any, is recorded as of the ex-dividend date. Distributions received on securities that represent a return of capital or long-term capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The fund may estimate the components of distributions received that may be considered nontaxable distributions or long-term capital gain distributions for income tax purposes. Interest income is recorded on the accrual basis and includes accretion of discounts and amortization of premiums.
Foreign Currency Translations — All assets and liabilities initially expressed in foreign currencies are translated into U.S. dollars at prevailing exchange rates at period end. The fund may enter into spot foreign currency exchange contracts to facilitate transactions denominated in a foreign currency. Purchases and sales of investment securities, dividend and interest income, spot foreign currency exchange contracts, and expenses are translated at the rates of exchange prevailing on the respective dates of such transactions. Net realized and unrealized foreign currency exchange gains or losses related to investment securities are a component of net realized gain (loss) on investment transactions and change in net unrealized appreciation (depreciation) on investments, respectively.
Repurchase Agreements — The fund may enter into repurchase agreements with institutions that ACIM has determined are creditworthy pursuant to criteria adopted by the Board of Directors. The fund requires that the collateral, represented by securities, received in a repurchase transaction be transferred to the custodian in a manner sufficient to enable the fund to obtain those securities in the event of a default under the repurchase agreement. ACIM monitors, on a daily basis, the securities transferred to ensure the value, including accrued interest, of the securities under each repurchase agreement is equal to or greater than amounts owed to the fund under each repurchase agreement.
Joint Trading Account — Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the fund, along with certain other funds in the American Century Investments family of funds, may transfer uninvested cash balances into a joint trading account. These balances are invested in one or more repurchase agreements that are collateralized by U.S. Treasury or Agency obligations.
Income Tax Status — It is the fund’s policy to distribute substantially all net investment income and net realized gains to shareholders and to otherwise qualify as a regulated investment company under provisions of the Internal Revenue Code. Accordingly, no provision has been made for income taxes. The fund files U.S. federal, state, local and non-U.S. tax returns as applicable. The fund's tax returns are subject to examination by the relevant taxing authority until expiration of the applicable statute of limitations, which is generally three years from the date of filing but can be longer in certain jurisdictions. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination and for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
16
Multiple Class — All shares of the fund represent an equal pro rata interest in the net assets of the class to which such shares belong, and have identical voting, dividend, liquidation and other rights and the same terms and conditions, except for class specific expenses and exclusive rights to vote on matters affecting only individual classes. Income, non-class specific expenses, and realized and unrealized capital gains and losses of the fund are allocated to each class of shares based on their relative net assets.
Distributions to Shareholders — Distributions from net investment income and net realized gains, if any, are generally declared and paid annually.
Redemption Fees — The fund may impose a 2.00% redemption fee on shares held less than 60 days. The fee may not be applicable to all classes. The redemption fee is retained by the fund and helps cover transaction costs that long-term investors may bear when the fund sells securities to meet investor redemptions.
Indemnifications — Under the corporation’s organizational documents, its officers and directors are indemnified against certain liabilities arising out of the performance of their duties to the fund. In addition, in the normal course of business, the fund enters into contracts that provide general indemnifications. The maximum exposure under these arrangements is unknown as this would involve future claims that may be made against a fund. The risk of material loss from such claims is considered by management to be remote.
3. Fees and Transactions with Related Parties
Certain officers and directors of the corporation are also officers and/or directors of American Century Companies, Inc. (ACC). The corporation’s investment advisor, ACIM, the corporation's distributor, American Century Investment Services, Inc. (ACIS), and the corporation’s transfer agent, American Century Services, LLC, are wholly owned, directly or indirectly, by ACC.
Management Fees — The corporation has entered into a management agreement with ACIM, under which ACIM provides the fund with investment advisory and management services in exchange for a single, unified management fee (the fee) per class. The agreement provides that all expenses of managing and operating the fund, except distribution and service fees, brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), and extraordinary expenses, will be paid by ACIM. The fee is computed and accrued daily based on each class’s daily net assets and paid monthly in arrears. The rate of the fee is determined by applying a fee rate calculation formula. This formula takes into account the fund’s assets as well as certain assets, if any, of other clients of the investment advisor outside the American Century Investments family of funds (such as subadvised funds and separate accounts) that have very similar investment teams and investment strategies (strategy assets). The annual management fee schedule
ranges from 1.100% to 1.500% for the Investor Class, A Class, B Class, C Class and R Class. The annual management fee schedule ranges from 0.900% to 1.300% for the Institutional Class and 0.750% to 1.150% for the R6 Class. The effective annual management fee for each class for the six months ended April 30, 2015 was 1.41% for the Investor Class, A Class, B Class, C Class and R Class, 1.21% for the Institutional Class and 1.06% for the R6 Class.
Distribution and Service Fees — The Board of Directors has adopted a separate Master Distribution and Individual Shareholder Services Plan for each of the A Class, B Class, C Class and R Class (collectively the plans), pursuant to Rule 12b-1 of the 1940 Act. The plans provide that the A Class will pay ACIS an annual distribution and service fee of 0.25%. The plans provide that the B Class and C Class will each pay ACIS an annual distribution and service fee of 1.00%, of which 0.25% is paid for individual shareholder services and 0.75% is paid for distribution services. The plans provide that the R Class will pay ACIS an annual distribution and service fee of 0.50%. The fees are computed and accrued daily based on each class’s daily net assets and paid monthly in arrears. The fees are used to pay financial intermediaries for distribution and individual shareholder services. Fees incurred under the plans during the six months ended April 30, 2015 are detailed in the Statement of Operations.
Directors' Fees and Expenses — The Board of Directors is responsible for overseeing the investment advisor’s management and operations of the fund. The directors receive detailed information about the fund and its investment advisor regularly throughout the year, and meet at least quarterly with management of the investment advisor to review reports about fund operations. The fund’s officers do not receive compensation from the fund.
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Acquired Fund Fees and Expenses — The fund may invest in mutual funds, exchange-traded funds, and business development companies (the acquired funds). The fund will indirectly realize its pro rata share of the fees and expenses of the acquired funds in which it invests. These indirect fees and expenses are not paid out of the fund's assets but are reflected in the return realized by the fund on its investment in the acquired funds.
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the six months ended April 30, 2015 were $160,347,138 and $180,751,727, respectively.
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended April 30, 2015 | Year ended October 31, 2014 | |||||||||
Shares | Amount | Shares | Amount | |||||||
Investor Class/Shares Authorized | 165,000,000 | 165,000,000 | ||||||||
Sold | 1,584,786 | $ | 22,009,135 | 2,973,559 | $ | 36,997,342 | ||||
Redeemed | (1,962,321 | ) | (26,600,818 | ) | (6,364,796 | ) | (78,560,612 | ) | ||
(377,535 | ) | (4,591,683 | ) | (3,391,237 | ) | (41,563,270 | ) | |||
Institutional Class/Shares Authorized | 150,000,000 | 150,000,000 | ||||||||
Sold | 154,057 | 2,117,960 | 498,126 | 6,292,729 | ||||||
Redeemed | (944,469 | ) | (13,206,839 | ) | (3,476,777 | ) | (43,573,925 | ) | ||
(790,412 | ) | (11,088,879 | ) | (2,978,651 | ) | (37,281,196 | ) | |||
A Class/Shares Authorized | 110,000,000 | 110,000,000 | ||||||||
Sold | 512,738 | 6,881,883 | 794,104 | 9,618,573 | ||||||
Redeemed | (769,353 | ) | (10,235,805 | ) | (2,550,555 | ) | (30,759,719 | ) | ||
(256,615 | ) | (3,353,922 | ) | (1,756,451 | ) | (21,141,146 | ) | |||
B Class/Shares Authorized | 20,000,000 | 20,000,000 | ||||||||
Sold | — | — | 8,571 | 97,098 | ||||||
Redeemed | (9,937 | ) | (121,299 | ) | (63,019 | ) | (720,580 | ) | ||
(9,937 | ) | (121,299 | ) | (54,448 | ) | (623,482 | ) | |||
C Class/Shares Authorized | 20,000,000 | 20,000,000 | ||||||||
Sold | 46,024 | 573,505 | 189,767 | 2,181,272 | ||||||
Redeemed | (90,686 | ) | (1,140,115 | ) | (381,341 | ) | (4,360,695 | ) | ||
(44,662 | ) | (566,610 | ) | (191,574 | ) | (2,179,423 | ) | |||
R Class/Shares Authorized | 20,000,000 | 20,000,000 | ||||||||
Sold | 23,534 | 314,686 | 29,376 | 350,874 | ||||||
Redeemed | (14,734 | ) | (192,464 | ) | (92,712 | ) | (1,120,090 | ) | ||
8,800 | 122,222 | (63,336 | ) | (769,216 | ) | |||||
R6 Class/Shares Authorized | 50,000,000 | 50,000,000 | ||||||||
Sold | 344,857 | 4,922,675 | 1,440,038 | 17,986,045 | ||||||
Redeemed | (146,105 | ) | (2,028,012 | ) | (26,231 | ) | (327,770 | ) | ||
198,752 | 2,894,663 | 1,413,807 | 17,658,275 | |||||||
Net increase (decrease) | (1,271,609 | ) | $ | (16,705,508 | ) | (7,021,890 | ) | $ | (85,899,458 | ) |
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6. Fair Value Measurements
The fund’s investments valuation process is based on several considerations and may use multiple inputs to determine the fair value of the investments held by the fund. In conformity with accounting principles generally accepted in the United States of America, the inputs used to determine a valuation are classified into three broad levels.
• | Level 1 valuation inputs consist of unadjusted quoted prices in an active market for identical investments. |
• | Level 2 valuation inputs consist of direct or indirect observable market data (including quoted prices for comparable investments, evaluations of subsequent market events, interest rates, prepayment speeds, credit risk, etc.). These inputs also consist of quoted prices for identical investments initially expressed in local currencies that are adjusted through translation into U.S. dollars. |
• | Level 3 valuation inputs consist of unobservable data (including a fund’s own assumptions). |
The level classification is based on the lowest level input that is significant to the fair valuation measurement. The valuation inputs are not necessarily an indication of the risks associated with investing in these securities or other financial instruments. There were no significant transfers between levels during the period.
The following is a summary of the level classifications as of period end. The Schedule of Investments provides additional information on the fund’s portfolio holdings.
Level 1 | Level 2 | Level 3 | ||||||
Assets | ||||||||
Investment Securities | ||||||||
Common Stocks | $ | 381,572,639 | — | — | ||||
Temporary Cash Investments | 4,232 | $ | 8,120,105 | — | ||||
$ | 381,576,871 | $ | 8,120,105 | — |
7. Derivative Instruments
Foreign Currency Risk — The fund is subject to foreign currency exchange rate risk in the normal course of pursuing its investment objectives. The value of foreign investments held by a fund may be significantly affected by changes in foreign currency exchange rates. The dollar value of a foreign security generally decreases when the value of the dollar rises against the foreign currency in which the security is denominated and tends to increase when the value of the dollar declines against such foreign currency. A fund may enter into forward foreign currency exchange contracts to reduce a fund's exposure to foreign currency exchange rate fluctuations. The net U.S. dollar value of foreign currency underlying all contractual commitments held by a fund and the resulting unrealized appreciation or depreciation are determined daily. Realized gain or loss is recorded upon the termination of the contract. Net realized and unrealized gains or losses occurring during the holding period of forward foreign currency exchange contracts are a component of net realized gain (loss) on foreign currency transactions and change in net unrealized appreciation (depreciation) on translation of assets and liabilities in foreign currencies, respectively. A fund bears the risk of an unfavorable change in the foreign currency exchange rate underlying the forward contract. Additionally, losses, up to the fair value, may arise if the counterparties do not perform under the contract terms. The fund participated in foreign currency risk derivative instruments during the period consistent with its exposure to foreign denominated securities.
At period end, the fund did not have any derivative instruments disclosed on the Statement of Assets and Liabilities. For the six months ended April 30, 2015, the effect of foreign currency risk derivative instruments on the Statement of Operations was $20,037 in net realized gain (loss) on foreign currency transactions and $(16,153) in change in net unrealized appreciation (depreciation) on translation of assets and liabilities in foreign currencies.
8. Risk Factors
The fund invests in common stocks of small companies. Because of this, the fund may be subject to greater risk and market fluctuations than a fund investing in larger, more established companies.
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9. Federal Tax Information
The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
As of April 30, 2015, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $ | 297,386,085 | |
Gross tax appreciation of investments | $ | 97,746,847 | |
Gross tax depreciation of investments | (5,435,956 | ) | |
Net tax appreciation (depreciation) of investments | $ | 92,310,891 |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales.
As of October 31, 2014, the fund had accumulated short-term capital losses of $(108,751,398), which represent net capital loss carryovers that may be used to offset future realized capital gains for federal income tax purposes. Future capital loss carryover utilization in any given year may be subject to Internal Revenue Code limitations. Capital loss carryovers expire in 2017.
As of October 31, 2014, the fund had late-year ordinary loss deferrals of $(3,538,511), which represent certain qualified losses that the fund has elected to treat as having been incurred in the following fiscal year for federal income tax purposes.
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Financial Highlights |
For a Share Outstanding Throughout the Years Ended October 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 | 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 | |||||||||||||
2015(3) | $12.82 | (0.07) | 1.12 | 1.05 | — | $13.87 | 8.19% | 1.42%(4) | (0.97)%(4) | 43% | $178,919 | ||
2014 | $11.95 | (0.11) | 0.98 | 0.87 | — | $12.82 | 7.28% | 1.40% | (0.93)% | 75% | $170,316 | ||
2013 | $8.79 | (0.05) | 3.23 | 3.18 | (0.02) | $11.95 | 36.23% | 1.42% | (0.47)% | 80% | $199,294 | ||
2012 | $8.06 | (0.01) | 0.74 | 0.73 | — | $8.79 | 9.06% | 1.42% | (0.12)% | 62% | $144,021 | ||
2011 | $7.45 | (0.07) | 0.68 | 0.61 | — | $8.06 | 8.19% | 1.40% | (0.84)% | 108% | $166,243 | ||
2010 | $5.47 | (0.03) | 2.01 | 1.98 | — | $7.45 | 36.20% | 1.42% | (0.48)% | 183% | $142,793 | ||
Institutional Class | |||||||||||||
2015(3) | $13.01 | (0.05) | 1.12 | 1.07 | — | $14.08 | 8.22% | 1.22%(4) | (0.77)%(4) | 43% | $67,385 | ||
2014 | $12.10 | (0.09) | 1.00 | 0.91 | — | $13.01 | 7.52% | 1.20% | (0.73)% | 75% | $72,542 | ||
2013 | $8.88 | (0.02) | 3.26 | 3.24 | (0.02) | $12.10 | 36.61% | 1.22% | (0.27)% | 80% | $103,520 | ||
2012 | $8.13 | 0.01 | 0.74 | 0.75 | — | $8.88 | 9.23% | 1.22% | 0.08% | 62% | $96,092 | ||
2011 | $7.50 | (0.05) | 0.68 | 0.63 | — | $8.13 | 8.40% | 1.20% | (0.64)% | 108% | $105,520 | ||
2010 | $5.49 | (0.02) | 2.03 | 2.01 | — | $7.50 | 36.61% | 1.22% | (0.28)% | 183% | $114,513 |
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For a Share Outstanding Throughout the Years Ended October 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 | 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) | |||
A Class | |||||||||||||
2015(3) | $12.54 | (0.08) | 1.08 | 1.00 | — | $13.54 | 7.97% | 1.67%(4) | (1.22)%(4) | 43% | $104,570 | ||
2014 | $11.72 | (0.14) | 0.96 | 0.82 | — | $12.54 | 7.00% | 1.65% | (1.18)% | 75% | $100,051 | ||
2013 | $8.63 | (0.07) | 3.17 | 3.10 | (0.01) | $11.72 | 36.00% | 1.67% | (0.72)% | 80% | $114,080 | ||
2012 | $7.94 | (0.03) | 0.72 | 0.69 | — | $8.63 | 8.69% | 1.67% | (0.37)% | 62% | $98,665 | ||
2011 | $7.35 | (0.09) | 0.68 | 0.59 | — | $7.94 | 8.03% | 1.65% | (1.09)% | 108% | $115,741 | ||
2010 | $5.41 | (0.05) | 1.99 | 1.94 | — | $7.35 | 35.86% | 1.67% | (0.73)% | 183% | $126,763 | ||
B Class | |||||||||||||
2015(3) | $11.77 | (0.12) | 1.01 | 0.89 | — | $12.66 | 7.56% | 2.42%(4) | (1.97)%(4) | 43% | $595 | ||
2014 | $11.08 | (0.22) | 0.91 | 0.69 | — | $11.77 | 6.23% | 2.40% | (1.93)% | 75% | $670 | ||
2013 | $8.21 | (0.13) | 3.00 | 2.87 | — | $11.08 | 34.96% | 2.42% | (1.47)% | 80% | $1,234 | ||
2012 | $7.60 | (0.09) | 0.70 | 0.61 | — | $8.21 | 8.03% | 2.42% | (1.12)% | 62% | $1,623 | ||
2011 | $7.10 | (0.15) | 0.65 | 0.50 | — | $7.60 | 7.04% | 2.40% | (1.84)% | 108% | $2,197 | ||
2010 | $5.26 | (0.09) | 1.93 | 1.84 | — | $7.10 | 34.98% | 2.42% | (1.48)% | 183% | $3,107 | ||
C Class | |||||||||||||
2015(3) | $11.81 | (0.12) | 1.02 | 0.90 | — | $12.71 | 7.62% | 2.42%(4) | (1.97)%(4) | 43% | $12,050 | ||
2014 | $11.12 | (0.22) | 0.91 | 0.69 | — | $11.81 | 6.21% | 2.40% | (1.93)% | 75% | $11,727 | ||
2013 | $8.24 | (0.14) | 3.02 | 2.88 | — | $11.12 | 34.95% | 2.42% | (1.47)% | 80% | $13,171 | ||
2012 | $7.63 | (0.09) | 0.70 | 0.61 | — | $8.24 | 7.99% | 2.42% | (1.12)% | 62% | $11,291 | ||
2011 | $7.13 | (0.15) | 0.65 | 0.50 | — | $7.63 | 7.01% | 2.40% | (1.84)% | 108% | $12,691 | ||
2010 | $5.28 | (0.09) | 1.94 | 1.85 | — | $7.13 | 35.04% | 2.42% | (1.48)% | 183% | $13,476 |
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For a Share Outstanding Throughout the Years Ended October 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 | 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) | |||
R Class | |||||||||||||
2015(3) | $12.39 | (0.10) | 1.08 | 0.98 | — | $13.37 | 7.91% | 1.92%(4) | (1.47)%(4) | 43% | $1,599 | ||
2014 | $11.61 | (0.17) | 0.95 | 0.78 | — | $12.39 | 6.72% | 1.90% | (1.43)% | 75% | $1,373 | ||
2013 | $8.56 | (0.10) | 3.16 | 3.06 | (0.01) | $11.61 | 35.73% | 1.92% | (0.97)% | 80% | $2,022 | ||
2012 | $7.89 | (0.04) | 0.71 | 0.67 | — | $8.56 | 8.49% | 1.92% | (0.62)% | 62% | $1,570 | ||
2011 | $7.33 | (0.11) | 0.67 | 0.56 | — | $7.89 | 7.64% | 1.90% | (1.34)% | 108% | $1,266 | ||
2010 | $5.41 | (0.06) | 1.98 | 1.92 | — | $7.33 | 35.49% | 1.92% | (0.98)% | 183% | $998 | ||
R6 Class | |||||||||||||
2015(3) | $13.03 | (0.04) | 1.12 | 1.08 | — | $14.11 | 8.29% | 1.07%(4) | (0.62)%(4) | 43% | $22,785 | ||
2014 | $12.10 | (0.08) | 1.01 | 0.93 | — | $13.03 | 7.69% | 1.07% | (0.60)% | 75% | $18,447 | ||
2013(5) | $11.33 | (0.02) | 0.79 | 0.77 | — | $12.10 | 6.80% | 1.05%(4) | (0.55)%(4) | 80%(6) | $27 |
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 and do not reflect applicable sales charges, if any. Total returns for periods less than one year are not annualized. |
(3) | Six months ended April 30, 2015 (unaudited). |
(4) | Annualized. |
(5) | July 26, 2013 (commencement of sale) through October 31, 2013. |
(6) | Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended October 31, 2013. |
See Notes to Financial Statements.
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Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain IRAs are subject to federal income tax withholding, unless you elect not to have withholding apply. Tax will be withheld on the total amount withdrawn even though you may be receiving amounts that are not subject to withholding, such as nondeductible contributions. In such case, excess amounts of withholding could occur. You may adjust your withholding election so that a greater or lesser amount will be withheld.
If you don’t want us to withhold on this amount, you must notify us to not withhold the federal income tax. You may notify us in writing or in certain situations by telephone or through other electronic means. For systematic withdrawals, your withholding election will remain in effect until revoked or changed by filing a new election. You have the right to revoke your election at any time.
Remember, even if you elect not to have income tax withheld, you are liable for paying income tax on the taxable portion of your withdrawal. If you elect not to have income tax withheld or you don’t have enough income tax withheld, you may be responsible for payment of estimated tax. You may incur penalties under the estimated tax rules if your withholding and estimated tax payments are not sufficient. You can reduce or defer the income tax on a distribution by directly or indirectly rolling such distribution over to another IRA or eligible plan. You should consult your tax advisor for additional information.
State tax will be withheld if, at the time of your distribution, your address is within one of the mandatory withholding states and you have federal income tax withheld (or as otherwise required by state law). State taxes will be withheld from your distribution in accordance with the respective state rules.
Distributions you receive from 403(b), 457 and qualified plans are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
A description of the policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund is available without charge, upon request, by calling 1-800-345-2021. It is also available on the "About Us" page of American Century Investments’ website at americancentury.com and on the Securities and Exchange Commission’s website at sec.gov. Information regarding how the investment advisor voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the "About Us" page at americancentury.com. It is also available at sec.gov.
Quarterly Portfolio Disclosure
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-Q. The fund’s Forms N-Q are available on the SEC’s website at sec.gov, and may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The fund also makes its complete schedule of portfolio holdings for the most recent quarter of its fiscal year available on its
website at americancentury.com and, upon request, by calling 1-800-345-2021.
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![]() | ||
Contact Us | americancentury.com | |
Automated Information Line | 1-800-345-8765 | |
Investor Services Representative | 1-800-345-2021 or 816-531-5575 | |
Investors Using Advisors | 1-800-378-9878 | |
Business, Not-For-Profit, Employer-Sponsored Retirement Plans | 1-800-345-3533 | |
Banks and Trust Companies, Broker-Dealers, Financial Professionals, Insurance Companies | 1-800-345-6488 | |
Telecommunications Relay Service for the Deaf | 711 | |
American Century Mutual Funds, Inc. | ||
Investment Advisor: American Century Investment Management, Inc. Kansas City, Missouri | ||
This report and the statements it contains are submitted for the general information of our shareholders. The report is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus. | ||
©2015 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-85692 1506 |
SEMIANNUAL REPORT | APRIL 30, 2015 |
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Ultra® Fund
Table of Contents |
Any opinions expressed in this report reflect those of the author as of the date of the report, and do not necessarily represent the opinions of American Century Investments® or any other person in the American Century Investments organization. Any such opinions are subject to change at any time based upon market or other conditions and American Century Investments disclaims any responsibility to update such opinions. These opinions may not be relied upon as investment advice and, because investment decisions made by American Century Investments funds are based on numerous factors, may not be relied upon as an indication of trading intent on behalf of any American Century Investments fund. Security examples are used for representational purposes only and are not intended as recommendations to purchase or sell securities. Performance information for comparative indices and securities is provided to American Century Investments by third party vendors. To the best of American Century Investments’ knowledge, such information is accurate at the time of printing.
President’s Letter |
![]() | Dear Investor: Thank you for reviewing this semiannual report for the six months ended April 30, 2015. It provides a macroeconomic and financial market overview (below), followed by fund performance, a schedule of fund investments, and other financial information. For additional commentary and updated information on fund performance, key factors that affected asset returns, and other insights regarding the investment markets, we encourage you to visit our website, americancentury.com. |
Jonathan Thomas |
Global Divergence in Monetary Policies Influenced Investor Behavior
The six-month reporting period saw big swings in market returns, triggered in part by central bank moves. In October 2014, just before the period started, the U.S. Federal Reserve ended its latest bond-buying program (quantitative easing, QE). As QE wound down, the U.S. economy enjoyed 5% annualized growth (after inflation) in the third quarter of 2014, the highest rate since the third quarter of 2003. But while QE was ending in the U.S., other major central banks were starting or increasing QE as their economies faltered. A “global divergence” of economic growth and monetary policies opened between the U.S. and most of the rest of the developed world.
This divergence helped fuel increased demand for the U.S. dollar and U.S. dollar-denominated assets, and put downward pressure on commodities prices, most notably oil. Though the resulting dollar rally and oil price decline reversed somewhat in April 2015, the dollar remained 9% higher for the reporting period, as measured by the U.S. Dollar Index, while oil remained more than 25% lower, as measured by both Brent and West Texas Intermediate crude oil futures. In this environment, U.S. stocks and bonds posted moderate gains—the S&P 500 Index and the Barclays U.S. Aggregate Bond Index returned 4.40% and 2.06%, respectively.
We expect monetary policy divergence between the U.S. and other major developed economies to continue this year, accompanied by market volatility. This could present both challenges and opportunities for active investment managers. Upward pressures on inflation and interest rates could develop as the massive amount of global monetary stimulus in progress takes hold and economies improve. But we believe lingering constraining forces will likely keep inflation and interest rates relatively low for the next six months. In this environment, we continue to believe in a disciplined, diversified, long-term investment approach, using professionally managed stock and bond portfolios to meet financial goals. We appreciate your continued trust in us.
Sincerely,
![](https://capedge.com/proxy/N-CSRS/0000100334-15-000051/jonathanthomassig.jpg)
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
2
Performance |
Total Returns as of April 30, 2015 | |||||||
Average Annual Returns | |||||||
Ticker Symbol | 6 months(1) | 1 year | 5 years | 10 years | Since Inception | Inception Date | |
Investor Class | TWCUX | 5.60% | 17.06% | 15.08% | 8.11% | 11.64% | 11/2/81 |
Russell 1000 Growth Index | — | 6.54% | 16.67% | 15.48% | 9.62% | 10.84%(2) | — |
S&P 500 Index | — | 4.40% | 12.98% | 14.32% | 8.32% | 11.73%(2) | — |
Institutional Class | TWUIX | 5.69% | 17.29% | 15.31% | 8.33% | 6.95% | 11/14/96 |
A Class(3) | TWUAX | 10/2/96 | |||||
No sales charge* | 5.46% | 16.77% | 14.79% | 7.84% | 6.66% | ||
With sales charge* | -0.60% | 10.05% | 13.45% | 7.20% | 6.32% | ||
C Class | TWCCX | 10/29/01 | |||||
No sales charge* | 5.07% | 15.90% | 13.93% | 7.04% | 5.41% | ||
With sales charge* | 4.10% | 15.90% | 13.93% | 7.04% | 5.41% | ||
R Class | AULRX | 5.35% | 16.49% | 14.52% | 7.57% | 7.20% | 8/29/03 |
R6 Class | AULDX | 5.80% | 17.51% | — | — | 18.09% | 7/26/13 |
* Sales charges include initial sales charges and contingent deferred sales charges (CDSCs), as applicable. A Class shares have a 5.75% maximum initial sales charge and may be subject to a maximum CDSC of 1.00%. C Class shares redeemed within 12 months of purchase are subject to a maximum CDSC of 1.00%. The SEC requires that mutual funds provide performance information net of maximum sales charges in all cases where charges could be applied.
(1) | Total returns for periods less than one year are not annualized. |
(2) | Since October 31, 1981, the date nearest the Investor Class's inception for which data are available. |
(3) | Prior to September 4, 2007, the A Class was referred to as the Advisor Class and did not have a front-end sales charge. Performance prior to that date has been adjusted to reflect this charge. |
Total Annual Fund Operating Expenses | |||||
Investor Class | Institutional Class | A Class | C Class | R Class | R6 Class |
1.01% | 0.81% | 1.26% | 2.01% | 1.51% | 0.66% |
The total annual fund operating expenses shown is as stated in the fund’s prospectus current as of the date of this report. The prospectus may vary from the expense ratio shown elsewhere in this report because it is based on a different time period, includes acquired fund fees and expenses, and, if applicable, does not include fee waivers or expense reimbursements.
Data presented reflect past performance. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance shown. Investment return and principal value will fluctuate, and redemption value may be more or less than original cost. Data assumes reinvestment of dividends and capital gains, and none of the charts reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. To obtain performance data current to the most recent month end, please call 1-800-345-2021 or visit americancentury.com. For additional information about the fund, please consult the prospectus.
3
Fund Characteristics |
APRIL 30, 2015 | |
Top Ten Holdings | % of net assets |
Apple, Inc. | 9.4% |
Google, Inc.* | 4.1% |
Gilead Sciences, Inc. | 3.0% |
Starbucks Corp. | 3.0% |
Amazon.com, Inc. | 2.9% |
Celgene Corp. | 2.7% |
UnitedHealth Group, Inc. | 2.6% |
MasterCard, Inc., Class A | 2.5% |
Walt Disney Co. (The) | 2.4% |
Visa, Inc., Class A | 2.3% |
* Includes all classes of the issuer. | |
Top Five Industries | % of net assets |
Technology Hardware, Storage and Peripherals | 10.2% |
Internet Software and Services | 9.0% |
Biotechnology | 8.4% |
IT Services | 4.8% |
Software | 4.8% |
Types of Investments in Portfolio | % of net assets |
Common Stocks | 99.6% |
Temporary Cash Investments | 0.6% |
Other Assets and Liabilities | (0.2)% |
4
Shareholder Fee Example |
Fund shareholders may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption/exchange fees; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in your fund and to compare these costs with the ongoing cost of investing in other mutual funds.
The example is based on an investment of $1,000 made at the beginning of the period and held for the entire period from November 1, 2014 to April 30, 2015.
Actual Expenses
The table provides information about actual account values and actual expenses for each class. You may use the information, together with the amount you invested, to estimate the expenses that you paid over the period. First, identify the share class you own. Then simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
If you hold Investor Class shares of any American Century Investments fund, or Institutional Class shares of the American Century Diversified Bond Fund, in an American Century Investments account (i.e., not a financial intermediary or retirement plan account), American Century Investments may charge you a $12.50 semiannual account maintenance fee if the value of those shares is less than $10,000. We will redeem shares automatically in one of your accounts to pay the $12.50 fee. 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. Personal accounts include individual accounts, joint accounts, UGMA/UTMA accounts, personal trusts, Coverdell Education Savings Accounts and 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. If you are subject to the Account Maintenance Fee, your account value could be reduced by the fee amount.
Hypothetical Example for Comparison Purposes
The table also provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio of each class of your fund and an assumed rate of return of 5% per year before expenses, which is not the actual return of a fund’s share class. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) or redemption/exchange fees. Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
5
Beginning Account Value 11/1/14 | Ending Account Value 4/30/15 | Expenses Paid During Period(1) 11/1/14 - 4/30/15 | Annualized Expense Ratio(1) | |
Actual | ||||
Investor Class | $1,000 | $1,056.00 | $5.00 | 0.98% |
Institutional Class | $1,000 | $1,056.90 | $3.98 | 0.78% |
A Class | $1,000 | $1,054.60 | $6.27 | 1.23% |
C Class | $1,000 | $1,050.70 | $10.07 | 1.98% |
R Class | $1,000 | $1,053.50 | $7.54 | 1.48% |
R6 Class | $1,000 | $1,058.00 | $3.21 | 0.63% |
Hypothetical | ||||
Investor Class | $1,000 | $1,019.94 | $4.91 | 0.98% |
Institutional Class | $1,000 | $1,020.93 | $3.91 | 0.78% |
A Class | $1,000 | $1,018.70 | $6.16 | 1.23% |
C Class | $1,000 | $1,014.98 | $9.89 | 1.98% |
R Class | $1,000 | $1,017.46 | $7.40 | 1.48% |
R6 Class | $1,000 | $1,021.67 | $3.16 | 0.63% |
(1) | Expenses are equal to the class's annualized expense ratio listed in the table above, multiplied by the average account value over the period, multiplied by 181, the number of days in the most recent fiscal half-year, divided by 365, to reflect the one-half year period. |
6
Schedule of Investments |
APRIL 30, 2015 (UNAUDITED)
Shares | Value | ||||
COMMON STOCKS — 99.6% | |||||
Aerospace and Defense — 2.9% | |||||
Boeing Co. (The) | 841,000 | $ | 120,548,940 | ||
United Technologies Corp. | 1,066,000 | 121,257,500 | |||
241,806,440 | |||||
Auto Components — 0.3% | |||||
BorgWarner, Inc. | 474,000 | 28,060,800 | |||
Automobiles — 0.8% | |||||
Tesla Motors, Inc.(1) | 296,000 | 66,910,800 | |||
Banks — 1.0% | |||||
JPMorgan Chase & Co. | 1,324,000 | 83,756,240 | |||
Beverages — 1.9% | |||||
Boston Beer Co., Inc. (The), Class A(1) | 156,000 | 38,656,800 | |||
Constellation Brands, Inc., Class A(1) | 1,050,000 | 121,737,000 | |||
160,393,800 | |||||
Biotechnology — 8.4% | |||||
Alexion Pharmaceuticals, Inc.(1) | 463,000 | 78,353,490 | |||
Celgene Corp.(1) | 2,132,000 | 230,383,920 | |||
Gilead Sciences, Inc.(1) | 2,496,000 | 250,872,960 | |||
Isis Pharmaceuticals, Inc.(1) | 410,000 | 23,255,200 | |||
Regeneron Pharmaceuticals, Inc.(1) | 286,000 | 130,833,560 | |||
713,699,130 | |||||
Capital Markets — 1.7% | |||||
Franklin Resources, Inc. | 1,375,000 | 70,895,000 | |||
T. Rowe Price Group, Inc. | 939,000 | 76,228,020 | |||
147,123,020 | |||||
Chemicals — 2.8% | |||||
Monsanto Co. | 1,328,000 | 151,338,880 | |||
Valspar Corp. (The) | 1,027,000 | 83,289,700 | |||
234,628,580 | |||||
Communications Equipment — 1.8% | |||||
QUALCOMM, Inc. | 2,296,000 | 156,128,000 | |||
Consumer Finance — 0.9% | |||||
American Express Co. | 1,022,000 | 79,153,900 | |||
Electrical Equipment — 2.7% | |||||
Acuity Brands, Inc. | 679,000 | 113,359,050 | |||
Eaton Corp. plc | 253,000 | 17,388,690 | |||
Emerson Electric Co. | 1,712,000 | 100,716,960 | |||
231,464,700 | |||||
Energy Equipment and Services — 2.0% | |||||
Core Laboratories NV | 427,000 | 56,056,560 | |||
Schlumberger Ltd. | 1,166,000 | 110,315,260 | |||
166,371,820 |
7
Shares | Value | ||||
Food and Staples Retailing — 2.9% | |||||
Costco Wholesale Corp. | 1,253,000 | $ | 179,241,650 | ||
Whole Foods Market, Inc. | 1,319,000 | 62,995,440 | |||
242,237,090 | |||||
Food Products — 1.3% | |||||
Mead Johnson Nutrition Co. | 841,000 | 80,668,720 | |||
Nestle SA | 412,000 | 32,127,626 | |||
112,796,346 | |||||
Health Care Equipment and Supplies — 2.6% | |||||
Intuitive Surgical, Inc.(1) | 258,649 | 128,284,731 | |||
St. Jude Medical, Inc. | 960,000 | 67,248,000 | |||
Varian Medical Systems, Inc.(1) | 303,000 | 26,921,550 | |||
222,454,281 | |||||
Health Care Providers and Services — 4.0% | |||||
Express Scripts Holding Co.(1) | 1,401,000 | 121,046,400 | |||
UnitedHealth Group, Inc. | 1,946,000 | 216,784,400 | |||
337,830,800 | |||||
Health Care Technology — 1.1% | |||||
Cerner Corp.(1) | 1,287,000 | 92,419,470 | |||
Hotels, Restaurants and Leisure — 4.2% | |||||
Chipotle Mexican Grill, Inc.(1) | 164,000 | 101,899,760 | |||
Starbucks Corp. | 5,044,000 | 250,081,520 | |||
351,981,280 | |||||
Household Durables — 0.5% | |||||
GoPro, Inc., Class A(1) | 806,000 | 40,364,480 | |||
Insurance — 1.2% | |||||
MetLife, Inc. | 2,046,000 | 104,939,340 | |||
Internet and Catalog Retail — 2.9% | |||||
Amazon.com, Inc.(1) | 580,000 | 244,632,400 | |||
Internet Software and Services — 9.0% | |||||
Alibaba Group Holding Ltd. ADR(1) | 113,000 | 9,185,770 | |||
Baidu, Inc. ADR(1) | 308,000 | 61,686,240 | |||
Facebook, Inc., Class A(1) | 2,217,000 | 174,633,090 | |||
Google, Inc., Class A(1) | 318,484 | 174,774,465 | |||
Google, Inc., Class C(1) | 318,873 | 171,343,169 | |||
LinkedIn Corp., Class A(1) | 382,000 | 96,313,660 | |||
Tencent Holdings Ltd. | 3,675,000 | 75,897,744 | |||
763,834,138 | |||||
IT Services — 4.8% | |||||
MasterCard, Inc., Class A | 2,354,802 | 212,426,689 | |||
Visa, Inc., Class A | 2,965,000 | 195,838,250 | |||
408,264,939 | |||||
Machinery — 3.2% | |||||
Cummins, Inc. | 701,000 | 96,920,260 | |||
Donaldson Co., Inc. | 749,000 | 27,990,130 | |||
WABCO Holdings, Inc.(1) | 558,000 | 69,443,100 |
8
Shares | Value | ||||
Wabtec Corp. | 772,000 | $ | 72,606,600 | ||
266,960,090 | |||||
Media — 4.6% | |||||
Time Warner, Inc. | 2,228,000 | 188,065,480 | |||
Walt Disney Co. (The) | 1,837,000 | 199,718,640 | |||
387,784,120 | |||||
Oil, Gas and Consumable Fuels — 1.7% | |||||
Concho Resources, Inc.(1) | 279,000 | 35,338,140 | |||
EOG Resources, Inc. | 866,000 | 85,690,700 | |||
Noble Energy, Inc. | 476,000 | 24,142,720 | |||
145,171,560 | |||||
Personal Products — 1.7% | |||||
Estee Lauder Cos., Inc. (The), Class A | 1,756,000 | 142,745,240 | |||
Pharmaceuticals — 1.0% | |||||
Pfizer, Inc. | 2,487,000 | 84,383,910 | |||
Professional Services — 1.1% | |||||
Nielsen NV | 2,081,000 | 93,520,140 | |||
Semiconductors and Semiconductor Equipment — 1.2% | |||||
ARM Holdings plc | 2,455,000 | 41,732,306 | |||
Linear Technology Corp. | 1,199,000 | 55,309,870 | |||
97,042,176 | |||||
Software — 4.8% | |||||
NetSuite, Inc.(1) | 506,000 | 48,358,420 | |||
Oracle Corp. | 2,649,000 | 115,549,380 | |||
Salesforce.com, Inc.(1) | 1,084,000 | 78,936,880 | |||
Splunk, Inc.(1) | 445,000 | 29,523,525 | |||
Tableau Software, Inc., Class A(1) | 412,000 | 40,310,080 | |||
VMware, Inc., Class A(1) | 743,000 | 65,458,300 | |||
Workday, Inc.(1) | 326,000 | 29,734,460 | |||
407,871,045 | |||||
Specialty Retail — 3.1% | |||||
O'Reilly Automotive, Inc.(1) | 476,000 | 103,687,080 | |||
Tiffany & Co. | 181,000 | 15,833,880 | |||
TJX Cos., Inc. (The) | 2,234,000 | 144,182,360 | |||
263,703,320 | |||||
Technology Hardware, Storage and Peripherals — 10.2% | |||||
Apple, Inc. | 6,336,315 | 792,989,822 | |||
EMC Corp. | 2,568,000 | 69,104,880 | |||
862,094,702 | |||||
Textiles, Apparel and Luxury Goods — 3.9% | |||||
Burberry Group plc | 1,892,256 | 50,552,687 | |||
NIKE, Inc., Class B | 1,915,000 | 189,278,600 | |||
Under Armour, Inc., Class A(1) | 1,142,000 | 88,562,100 | |||
328,393,387 | |||||
Tobacco — 1.4% | |||||
Philip Morris International, Inc. | 1,439,000 | 120,113,330 | |||
TOTAL COMMON STOCKS (Cost $3,845,095,448) | 8,431,034,814 |
9
Shares | Value | ||||
TEMPORARY CASH INVESTMENTS — 0.6% | |||||
Repurchase Agreement, Bank of America Merrill Lynch, (collateralized by various U.S. Treasury obligations, 1.375%, 4/30/20, valued at $8,706,211), in a joint trading account at 0.08%, dated 4/30/15, due 5/1/15 (Delivery value $8,554,886) | $ | 8,554,867 | |||
Repurchase Agreement, Credit Suisse First Boston, Inc., (collateralized by various U.S. Treasury obligations, 1.50%, 12/31/18, valued at $20,899,447), in a joint trading account at 0.03%, dated 4/30/15, due 5/1/15 (Delivery value $20,531,698) | 20,531,681 | ||||
Repurchase Agreement, Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 3.125%, 11/15/41, valued at $24,450,349), at 0.01%, dated 4/30/15, due 5/1/15 (Delivery value $23,967,007) | 23,967,000 | ||||
State Street Institutional Liquid Reserves Fund, Premier Class | 42,867 | 42,867 | |||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $53,096,415) | 53,096,415 | ||||
TOTAL INVESTMENT SECURITIES — 100.2% (Cost $3,898,191,863) | 8,484,131,229 | ||||
OTHER ASSETS AND LIABILITIES — (0.2)% | (16,948,888 | ) | |||
TOTAL NET ASSETS — 100.0% | $ | 8,467,182,341 |
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS | ||||||||||
Currency Purchased | Currency Sold | Counterparty | Settlement Date | Unrealized Appreciation (Depreciation) | ||||||
USD | 27,342,976 | CHF | 26,002,350 | Credit Suisse AG | 5/29/15 | $ | (550,967 | ) | ||
GBP | 1,272,441 | USD | 1,967,333 | Credit Suisse AG | 5/29/15 | (14,476 | ) | |||
USD | 81,877,025 | GBP | 53,783,842 | Credit Suisse AG | 5/29/15 | (666,781 | ) | |||
$ | (1,232,224 | ) |
NOTES TO SCHEDULE OF INVESTMENTS | ||
ADR | - | American Depositary Receipt |
CHF | - | Swiss Franc |
GBP | - | British Pound |
USD | - | United States Dollar |
(1) | Non-income producing. |
See Notes to Financial Statements.
10
Statement of Assets and Liabilities |
APRIL 30, 2015 (UNAUDITED) | |||
Assets | |||
Investment securities, at value (cost of $3,898,191,863) | $ | 8,484,131,229 | |
Foreign currency holdings, at value (cost of $398,518) | 396,952 | ||
Receivable for investments sold | 3,366,700 | ||
Receivable for capital shares sold | 952,223 | ||
Dividends and interest receivable | 2,745,264 | ||
8,491,592,368 | |||
Liabilities | |||
Payable for investments purchased | 13,229,228 | ||
Payable for capital shares redeemed | 3,092,817 | ||
Unrealized depreciation on forward foreign currency exchange contracts | 1,232,224 | ||
Accrued management fees | 6,834,802 | ||
Distribution and service fees payable | 20,956 | ||
24,410,027 | |||
Net Assets | $ | 8,467,182,341 | |
Net Assets Consist of: | |||
Capital (par value and paid-in surplus) | $ | 3,740,424,419 | |
Undistributed net investment income | 14,007,789 | ||
Undistributed net realized gain | 128,063,302 | ||
Net unrealized appreciation | 4,584,686,831 | ||
$ | 8,467,182,341 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | ||
Investor Class, $0.01 Par Value | $8,152,865,228 | 224,059,067 | $36.39 | |
Institutional Class, $0.01 Par Value | $196,449,124 | 5,249,330 | $37.42 | |
A Class, $0.01 Par Value | $72,436,458 | 2,063,444 | $35.10* | |
C Class, $0.01 Par Value | $2,686,546 | 85,824 | $31.30 | |
R Class, $0.01 Par Value | $8,617,113 | 249,144 | $34.59 | |
R6 Class, $0.01 Par Value | $34,127,872 | 912,125 | $37.42 |
*Maximum offering price $37.24 (net asset value divided by 0.9425).
See Notes to Financial Statements.
11
Statement of Operations |
FOR THE SIX MONTHS ENDED APRIL 30, 2015 (UNAUDITED) | |||
Investment Income (Loss) | |||
Income: | |||
Dividends (net of foreign taxes withheld of $372,339) | $ | 56,501,445 | |
Interest | 5,117 | ||
56,506,562 | |||
Expenses: | |||
Management fees | 40,528,098 | ||
Distribution and service fees: | |||
A Class | 90,467 | ||
C Class | 12,543 | ||
R Class | 20,878 | ||
Directors' fees and expenses | 253,746 | ||
Other expenses | 225 | ||
40,905,957 | |||
Net investment income (loss) | 15,600,605 | ||
Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investment transactions | 161,388,129 | ||
Foreign currency transactions | 4,123,032 | ||
165,511,161 | |||
Change in net unrealized appreciation (depreciation) on: | |||
Investments | 276,621,443 | ||
Translation of assets and liabilities in foreign currencies | (2,778,838 | ) | |
273,842,605 | |||
Net realized and unrealized gain (loss) | 439,353,766 | ||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 454,954,371 |
See Notes to Financial Statements.
12
Statement of Changes in Net Assets |
SIX MONTHS ENDED APRIL 30, 2015 (UNAUDITED) AND YEAR ENDED OCTOBER 31, 2014 | ||||||
Increase (Decrease) in Net Assets | April 30, 2015 | October 31, 2014 | ||||
Operations | ||||||
Net investment income (loss) | $ | 15,600,605 | $ | 22,736,256 | ||
Net realized gain (loss) | 165,511,161 | 574,984,530 | ||||
Change in net unrealized appreciation (depreciation) | 273,842,605 | 560,375,653 | ||||
Net increase (decrease) in net assets resulting from operations | 454,954,371 | 1,158,096,439 | ||||
Distributions to Shareholders | ||||||
From net investment income: | ||||||
Investor Class | (25,643,753 | ) | (22,249,493 | ) | ||
Institutional Class | (1,043,481 | ) | (1,003,895 | ) | ||
A Class | (57,827 | ) | (36,312 | ) | ||
R6 Class | (199,356 | ) | (176 | ) | ||
From net realized gains: | ||||||
Investor Class | (539,477,637 | ) | (287,611,433 | ) | ||
Institutional Class | (13,666,153 | ) | (7,766,552 | ) | ||
A Class | (5,033,302 | ) | (2,913,158 | ) | ||
C Class | (192,382 | ) | (96,221 | ) | ||
R Class | (590,316 | ) | (274,425 | ) | ||
R6 Class | (2,035,262 | ) | (1,048 | ) | ||
Decrease in net assets from distributions | (587,939,469 | ) | (321,952,713 | ) | ||
Capital Share Transactions | ||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | 298,122,535 | (154,161,615 | ) | |||
Net increase (decrease) in net assets | 165,137,437 | 681,982,111 | ||||
Net Assets | ||||||
Beginning of period | 8,302,044,904 | 7,620,062,793 | ||||
End of period | $ | 8,467,182,341 | $ | 8,302,044,904 | ||
Undistributed net investment income | $ | 14,007,789 | $ | 25,351,601 |
See Notes to Financial Statements.
13
Notes to Financial Statements |
APRIL 30, 2015 (UNAUDITED)
1. Organization
American Century Mutual Funds, Inc. (the corporation) is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company and is organized as a Maryland corporation. Ultra Fund (the fund) is one fund in a series issued by the corporation. The fund is diversified as defined under the 1940 Act. The fund's investment objective is to seek long-term capital growth.
The fund offers the Investor Class, the Institutional Class, the A Class, the C Class, the R Class and the R6 Class. The A Class may incur an initial sales charge. The A Class and C Class may be subject to a contingent deferred sales charge. The share classes differ principally in their respective sales charges and distribution and shareholder servicing expenses and arrangements. The Institutional Class and R6 Class shareholders do not require the same level of shareholder and administrative services from American Century Investment Management, Inc. (ACIM) (the investment advisor) as shareholders of other classes. In addition, financial intermediaries do not receive any service, distribution or administrative fees for the R6 Class. As a result, the Institutional Class and R6 Class are charged lower unified management fees.
2. Significant Accounting Policies
The following is a summary of significant accounting policies consistently followed by the fund in preparation of its financial statements. The fund is an investment company and follows accounting and reporting guidance in accordance with accounting principles generally accepted in the United States of America. This may require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from these estimates. Management evaluated the impact of events or transactions occurring through the date the financial statements were issued that would merit recognition or disclosure.
Investment Valuations — The fund determines the fair value of its investments and computes its net asset value per share at 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. The Board of Directors has adopted valuation policies and procedures to guide the investment advisor in the fund’s investment valuation process and to provide methodologies for the oversight of the fund’s pricing function.
Equity securities that are listed or traded on a domestic securities exchange are valued at the last reported sales price or at the official closing price as provided by the exchange. Equity securities traded on foreign securities exchanges are generally valued at the closing price of such securities on the exchange where primarily traded or at the close of the NYSE, if that is earlier. If no last sales price is reported, or if local convention or regulation so provides, the mean of the latest bid and asked prices may be used. Securities traded over-the-counter are valued at the mean of the latest bid and asked prices, the last sales price, or the official closing price. Equity securities initially expressed in local currencies are translated into U.S. dollars at the mean of the appropriate currency exchange rate at the close of the NYSE as provided by an independent pricing service.
Fixed income securities maturing within 60 days at the time of purchase may be valued at cost, plus or minus any amortized discount or premium or at the evaluated mean as provided by an independent pricing service. Evaluated mean prices are commonly derived through utilization of market models, which may consider, among other factors: trade data, quotations from 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.
Open-end management investment companies are valued at the reported net asset value per share. Repurchase agreements are valued at cost, which approximates fair value. Forward foreign currency exchange contracts are valued at the mean of the appropriate forward exchange rate at the close of the NYSE as provided by an independent pricing service.
If the fund determines that the market price for an investment is not readily available or the valuation methods mentioned above do not reflect an investment’s fair value, such investment is valued as determined in good faith by the Board of Directors or its delegate, in accordance with policies and procedures adopted by the Board of Directors. In its determination of fair value, the fund may review several factors including, but not
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limited to, market information regarding the specific investment or comparable investments and correlation with other investment types, futures indices or general market indicators. Circumstances that may cause the fund to use these procedures to value an investment include, but are not limited to: an investment has been declared in default or is distressed; trading in a security has been suspended during the trading day or a security is not actively trading on its principal exchange; prices received from a regular pricing source are deemed unreliable; or there is a foreign market holiday and no trading occurred.
The fund monitors for significant events occurring after the close of an investment’s primary exchange but before the fund’s net asset value per share is determined. Significant events may include, but are not limited to: corporate announcements and transactions; governmental action and political unrest that could impact a specific investment or an investment sector; or armed conflicts, natural disasters and similar events that could affect investments in a specific country or region. The fund also monitors for significant fluctuations between domestic and foreign markets, as evidenced by the U.S. market or such other indicators that the Board of Directors, or its delegate, deems appropriate. If significant fluctuations in foreign markets are identified, the fund may apply a model-derived factor to the closing price of equity securities traded on foreign securities exchanges. The factor is based on observable market data as provided by an independent pricing service.
Security Transactions — Security transactions are accounted for as of the trade date. Net realized gains and losses are determined on the identified cost basis, which is also used for federal income tax purposes.
Investment Income — Dividend income less foreign taxes withheld, if any, is recorded as of the ex-dividend date. Distributions received on securities that represent a return of capital or long-term capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The fund may estimate the components of distributions received that may be considered nontaxable distributions or long-term capital gain distributions for income tax purposes. Interest income is recorded on the accrual basis and includes accretion of discounts and amortization of premiums.
Foreign Currency Translations — All assets and liabilities initially expressed in foreign currencies are translated into U.S. dollars at prevailing exchange rates at period end. The fund may enter into spot foreign currency exchange contracts to facilitate transactions denominated in a foreign currency. Purchases and sales of investment securities, dividend and interest income, spot foreign currency exchange contracts, and expenses are translated at the rates of exchange prevailing on the respective dates of such transactions. Net realized and unrealized foreign currency exchange gains or losses related to investment securities are a component of net realized gain (loss) on investment transactions and change in net unrealized appreciation (depreciation) on investments, respectively.
Repurchase Agreements — The fund may enter into repurchase agreements with institutions that ACIM has determined are creditworthy pursuant to criteria adopted by the Board of Directors. The fund requires that the collateral, represented by securities, received in a repurchase transaction be transferred to the custodian in a manner sufficient to enable the fund to obtain those securities in the event of a default under the repurchase agreement. ACIM monitors, on a daily basis, the securities transferred to ensure the value, including accrued interest, of the securities under each repurchase agreement is equal to or greater than amounts owed to the fund under each repurchase agreement.
Joint Trading Account — Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the fund, along with certain other funds in the American Century Investments family of funds, may transfer uninvested cash balances into a joint trading account. These balances are invested in one or more repurchase agreements that are collateralized by U.S. Treasury or Agency obligations.
Income Tax Status — It is the fund’s policy to distribute substantially all net investment income and net realized gains to shareholders and to otherwise qualify as a regulated investment company under provisions of the Internal Revenue Code. Accordingly, no provision has been made for income taxes. The fund files U.S. federal, state, local and non-U.S. tax returns as applicable. The fund's tax returns are subject to examination by the relevant taxing authority until expiration of the applicable statute of limitations, which is generally three years from the date of filing but can be longer in certain jurisdictions. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination and for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
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Multiple Class — All shares of the fund represent an equal pro rata interest in the net assets of the class to which such shares belong, and have identical voting, dividend, liquidation and other rights and the same terms and conditions, except for class specific expenses and exclusive rights to vote on matters affecting only individual classes. Income, non-class specific expenses, and realized and unrealized capital gains and losses of the fund are allocated to each class of shares based on their relative net assets.
Distributions to Shareholders — Distributions from net investment income and net realized gains, if any, are generally declared and paid annually.
Indemnifications — Under the corporation’s organizational documents, its officers and directors are indemnified against certain liabilities arising out of the performance of their duties to the fund. In addition, in the normal course of business, the fund enters into contracts that provide general indemnifications. The maximum exposure under these arrangements is unknown as this would involve future claims that may be made against a fund. The risk of material loss from such claims is considered by management to be remote.
3. Fees and Transactions with Related Parties
Certain officers and directors of the corporation are also officers and/or directors of American Century Companies, Inc. (ACC). The corporation’s investment advisor, ACIM, the corporation's distributor, American Century Investment Services, Inc. (ACIS), and the corporation’s transfer agent, American Century Services, LLC, are wholly owned, directly or indirectly, by ACC.
Management Fees — The corporation has entered into a management agreement with ACIM, under which ACIM provides the fund with investment advisory and management services in exchange for a single, unified management fee (the fee) per class. The agreement provides that all expenses of managing and operating the fund, except distribution and service fees, brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), and extraordinary expenses, will be paid by ACIM. The fee is computed and accrued daily based on each class’s daily net assets and paid monthly in arrears. The rate of the fee is determined by applying a fee rate calculation formula. This formula takes into account the fund’s assets as well as certain assets, if any, of other clients of the investment advisor outside the American Century Investments family of funds (such as subadvised funds and separate accounts) that have very similar investment teams and investment strategies (strategy assets). The annual management fee schedule ranges from 0.800% to 0.990% for the Investor Class, A Class, C Class and R Class. The annual management fee schedule ranges from 0.600% to 0.790% for the Institutional Class and 0.450% to 0.640% for the R6 Class. The effective annual management fee for each class for the six months ended April 30, 2015 was 0.98% for the Investor Class, A Class, C Class and R Class, 0.78% for the Institutional Class and 0.63% for the R6 Class.
Distribution and Service Fees — The Board of Directors has adopted a separate Master Distribution and Individual Shareholder Services Plan for each of the A Class, C Class and R Class (collectively the plans), pursuant to Rule 12b-1 of the 1940 Act. The plans provide that the A Class will pay ACIS an annual distribution and service fee of 0.25%. The plans provide that the C Class will pay ACIS an annual distribution and service fee of 1.00%, of which 0.25% is paid for individual shareholder services and 0.75% is paid for distribution services. The plans provide that the R Class will pay ACIS an annual distribution and service fee of 0.50%. The fees are computed and accrued daily based on each class’s daily net assets and paid monthly in arrears. The fees are used to pay financial intermediaries for distribution and individual shareholder services. Fees incurred under the plans during the six months ended April 30, 2015 are detailed in the Statement of Operations.
Directors' Fees and Expenses — The Board of Directors is responsible for overseeing the investment advisor’s management and operations of the fund. The directors receive detailed information about the fund and its investment advisor regularly throughout the year, and meet at least quarterly with management of the investment advisor to review reports about fund operations. The fund’s officers do not receive compensation from the fund.
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the six months ended April 30, 2015 were $475,171,470 and $732,197,486, respectively.
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5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended April 30, 2015 | Year ended October 31, 2014 | |||||||||
Shares | Amount | Shares | Amount | |||||||
Investor Class/Shares Authorized | 3,500,000,000 | 3,500,000,000 | ||||||||
Sold | 2,787,187 | $ | 100,429,828 | 6,200,249 | $ | 213,362,510 | ||||
Issued in reinvestment of distributions | 16,395,869 | 546,966,398 | 9,141,045 | 300,466,112 | ||||||
Redeemed | (9,675,711 | ) | (349,389,260 | ) | (19,472,162 | ) | (674,617,017 | ) | ||
9,507,345 | 298,006,966 | (4,130,868 | ) | (160,788,395 | ) | |||||
Institutional Class/Shares Authorized | 200,000,000 | 200,000,000 | ||||||||
Sold | 347,029 | 12,923,346 | 768,139 | 27,328,125 | ||||||
Issued in reinvestment of distributions | 419,817 | 14,391,326 | 255,214 | 8,603,265 | ||||||
Redeemed | (1,128,367 | ) | (41,133,487 | ) | (1,281,115 | ) | (46,122,369 | ) | ||
(361,521 | ) | (13,818,815 | ) | (257,762 | ) | (10,190,979 | ) | |||
A Class/Shares Authorized | 100,000,000 | 100,000,000 | ||||||||
Sold | 180,673 | 6,279,119 | 407,067 | 13,580,404 | ||||||
Issued in reinvestment of distributions | 152,311 | 4,905,938 | 88,201 | 2,806,562 | ||||||
Redeemed | (263,401 | ) | (9,157,427 | ) | (690,952 | ) | (23,193,216 | ) | ||
69,583 | 2,027,630 | (195,684 | ) | (6,806,250 | ) | |||||
C Class/Shares Authorized | 50,000,000 | 50,000,000 | ||||||||
Sold | 16,007 | 491,460 | 19,057 | 573,448 | ||||||
Issued in reinvestment of distributions | 4,717 | 135,843 | 2,224 | 64,240 | ||||||
Redeemed | (11,486 | ) | (354,443 | ) | (14,867 | ) | (456,659 | ) | ||
9,238 | 272,860 | 6,414 | 181,029 | |||||||
R Class/Shares Authorized | 50,000,000 | 50,000,000 | ||||||||
Sold | 34,495 | 1,194,603 | 89,195 | 2,986,075 | ||||||
Issued in reinvestment of distributions | 17,210 | 546,763 | 8,616 | 271,047 | ||||||
Redeemed | (27,713 | ) | (957,275 | ) | (76,899 | ) | (2,556,081 | ) | ||
23,992 | 784,091 | 20,912 | 701,041 | |||||||
R6 Class/Shares Authorized | 50,000,000 | 50,000,000 | ||||||||
Sold | 321,257 | 12,067,440 | 635,580 | 23,373,082 | ||||||
Issued in reinvestment of distributions | 65,225 | 2,234,618 | 36 | 1,224 | ||||||
Redeemed | (93,614 | ) | (3,452,255 | ) | (17,151 | ) | (632,367 | ) | ||
292,868 | 10,849,803 | 618,465 | 22,741,939 | |||||||
Net increase (decrease) | 9,541,505 | $ | 298,122,535 | (3,938,523 | ) | $ | (154,161,615 | ) |
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6. Fair Value Measurements
The fund’s investments valuation process is based on several considerations and may use multiple inputs to determine the fair value of the investments held by the fund. In conformity with accounting principles generally accepted in the United States of America, the inputs used to determine a valuation are classified into three broad levels.
• | Level 1 valuation inputs consist of unadjusted quoted prices in an active market for identical investments. |
• | Level 2 valuation inputs consist of direct or indirect observable market data (including quoted prices for comparable investments, evaluations of subsequent market events, interest rates, prepayment speeds, credit risk, etc.). These inputs also consist of quoted prices for identical investments initially expressed in local currencies that are adjusted through translation into U.S. dollars. |
• | Level 3 valuation inputs consist of unobservable data (including a fund’s own assumptions). |
The level classification is based on the lowest level input that is significant to the fair valuation measurement. The valuation inputs are not necessarily an indication of the risks associated with investing in these securities or other financial instruments. There were no significant transfers between levels during the period.
The following is a summary of the level classifications as of period end. The Schedule of Investments provides additional information on the fund’s portfolio holdings.
Level 1 | Level 2 | Level 3 | ||||||
Assets | ||||||||
Investment Securities | ||||||||
Common Stocks | $ | 8,230,724,451 | $ | 200,310,363 | — | |||
Temporary Cash Investments | 42,867 | 53,053,548 | — | |||||
$ | 8,230,767,318 | $ | 253,363,911 | — | ||||
Liabilities | ||||||||
Other Financial Instruments | ||||||||
Forward Foreign Currency Exchange Contracts | — | $ | (1,232,224 | ) | — |
7. Derivative Instruments
Foreign Currency Risk — The fund is subject to foreign currency exchange rate risk in the normal course of pursuing its investment objectives. The value of foreign investments held by a fund may be significantly affected by changes in foreign currency exchange rates. The dollar value of a foreign security generally decreases when the value of the dollar rises against the foreign currency in which the security is denominated and tends to increase when the value of the dollar declines against such foreign currency. A fund may enter into forward foreign currency exchange contracts to reduce a fund's exposure to foreign currency exchange rate fluctuations. The net U.S. dollar value of foreign currency underlying all contractual commitments held by a fund and the resulting unrealized appreciation or depreciation are determined daily. Realized gain or loss is recorded upon the termination of the contract. Net realized and unrealized gains or losses occurring during the holding period of forward foreign currency exchange contracts are a component of net realized gain (loss) on foreign currency transactions and change in net unrealized appreciation (depreciation) on translation of assets and liabilities in foreign currencies, respectively. A fund bears the risk of an unfavorable change in the foreign currency exchange rate underlying the forward contract. Additionally, losses, up to the fair value, may arise if the counterparties do not perform under the contract terms. The fund's average U.S. dollar exposure to foreign currency risk derivative instruments held during the period was $122,936,529.
The value of foreign currency risk derivative instruments as of April 30, 2015, is disclosed on the Statement of Assets and Liabilities as a liability of $1,232,224 in unrealized depreciation on forward foreign currency exchange contracts. For the six months ended April 30, 2015, the effect of foreign currency risk derivative instruments on the Statement of Operations was $4,113,435 in net realized gain (loss) on foreign currency transactions and $(2,808,222) in change in net unrealized appreciation (depreciation) on translation of assets and liabilities in foreign currencies.
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8. Federal Tax Information
The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
As of April 30, 2015, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $ | 3,936,031,885 | |
Gross tax appreciation of investments | $ | 4,563,102,347 | |
Gross tax depreciation of investments | (15,003,003 | ) | |
Net tax appreciation (depreciation) of investments | $ | 4,548,099,344 |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales.
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Financial Highlights |
For a Share Outstanding Throughout the Years Ended October 31 (except as noted) | |||||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||||
Income From Investment Operations: | Distributions From: | 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 | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Operating Expenses (before expense waiver) | Net Investment Income (Loss) | Net Investment Income (Loss) (before expense waiver) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
Investor Class | |||||||||||||||||
2015(3) | $37.20 | 0.07 | 1.77 | 1.84 | (0.12) | (2.53) | (2.65) | $36.39 | 5.60% | 0.98%(4) | 0.98%(4) | 0.38%(4) | 0.38%(4) | 6% | $8,152,865 | ||
2014 | $33.56 | 0.10 | 4.96 | 5.06 | (0.10) | (1.32) | (1.42) | $37.20 | 15.66% | 1.00% | 1.01% | 0.29% | 0.28% | 16% | $7,981,781 | ||
2013 | $25.68 | 0.15 | 7.86 | 8.01 | (0.13) | — | (0.13) | $33.56 | 31.34% | 0.99% | 0.99% | 0.52% | 0.52% | 26% | $7,338,222 | ||
2012 | $23.42 | 0.06 | 2.20 | 2.26 | — | — | — | $25.68 | 9.65% | 0.99% | 0.99% | 0.26% | 0.26% | 13% | $6,194,268 | ||
2011 | $21.22 | 0.04 | 2.20 | 2.24 | (0.04) | — | (0.04) | $23.42 | 10.59% | 0.99% | 0.99% | 0.16% | 0.16% | 13% | $5,984,972 | ||
2010 | $17.82 | 0.05 | 3.44 | 3.49 | (0.09) | — | (0.09) | $21.22 | 19.63% | 1.00% | 1.00% | 0.25% | 0.25% | 24% | $5,906,158 | ||
Institutional Class | |||||||||||||||||
2015(3) | $38.22 | 0.10 | 1.82 | 1.92 | (0.19) | (2.53) | (2.72) | $37.42 | 5.69% | 0.78%(4) | 0.78%(4) | 0.58%(4) | 0.58%(4) | 6% | $196,449 | ||
2014 | $34.44 | 0.17 | 5.10 | 5.27 | (0.17) | (1.32) | (1.49) | $38.22 | 15.90% | 0.80% | 0.81% | 0.49% | 0.48% | 16% | $214,464 | ||
2013 | $26.32 | 0.17 | 8.10 | 8.27 | (0.15) | — | (0.15) | $34.44 | 31.56% | 0.79% | 0.79% | 0.72% | 0.72% | 26% | $202,118 | ||
2012 | $23.95 | 0.12 | 2.25 | 2.37 | — | — | — | $26.32 | 9.90% | 0.79% | 0.79% | 0.46% | 0.46% | 13% | $52,362 | ||
2011 | $21.69 | 0.08 | 2.27 | 2.35 | (0.09) | — | (0.09) | $23.95 | 10.85% | 0.79% | 0.79% | 0.36% | 0.36% | 13% | $52,751 | ||
2010 | $18.22 | 0.09 | 3.51 | 3.60 | (0.13) | — | (0.13) | $21.69 | 19.81% | 0.80% | 0.80% | 0.45% | 0.45% | 24% | $45,791 |
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For a Share Outstanding Throughout the Years Ended October 31 (except as noted) | |||||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||||
Income From Investment Operations: | Distributions From: | 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 | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Operating Expenses (before expense waiver) | Net Investment Income (Loss) | Net Investment Income (Loss) (before expense waiver) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
A Class | |||||||||||||||||
2015(3) | $35.94 | 0.02 | 1.70 | 1.72 | (0.03) | (2.53) | (2.56) | $35.10 | 5.46% | 1.23%(4) | 1.23%(4) | 0.13%(4) | 0.13%(4) | 6% | $72,436 | ||
2014 | $32.46 | 0.01 | 4.81 | 4.82 | (0.02) | (1.32) | (1.34) | $35.94 | 15.35% | 1.25% | 1.26% | 0.04% | 0.03% | 16% | $71,650 | ||
2013 | $24.89 | 0.08 | 7.60 | 7.68 | (0.11) | — | (0.11) | $32.46 | 30.99% | 1.24% | 1.24% | 0.27% | 0.27% | 26% | $71,063 | ||
2012 | $22.75 | —(5) | 2.14 | 2.14 | — | — | — | $24.89 | 9.41% | 1.24% | 1.24% | 0.01% | 0.01% | 13% | $63,461 | ||
2011 | $20.62 | (0.02) | 2.15 | 2.13 | — | — | — | $22.75 | 10.33% | 1.24% | 1.24% | (0.09)% | (0.09)% | 13% | $62,304 | ||
2010 | $17.33 | —(5) | 3.33 | 3.33 | (0.04) | — | (0.04) | $20.62 | 19.24% | 1.25% | 1.25% | 0.00%(6) | 0.00%(6) | 24% | $68,109 | ||
C Class | |||||||||||||||||
2015(3) | $32.41 | (0.10) | 1.52 | 1.42 | — | (2.53) | (2.53) | $31.30 | 5.07% | 1.98%(4) | 1.98%(4) | (0.62)%(4) | (0.62)%(4) | 6% | $2,687 | ||
2014 | $29.60 | (0.22) | 4.35 | 4.13 | — | (1.32) | (1.32) | $32.41 | 14.51% | 2.00% | 2.01% | (0.71)% | (0.72)% | 16% | $2,482 | ||
2013 | $22.83 | (0.13) | 6.96 | 6.83 | (0.06) | — | (0.06) | $29.60 | 29.98% | 1.99% | 1.99% | (0.48)% | (0.48)% | 26% | $2,077 | ||
2012 | $21.02 | (0.17) | 1.98 | 1.81 | — | — | — | $22.83 | 8.61% | 1.99% | 1.99% | (0.74)% | (0.74)% | 13% | $1,464 | ||
2011 | $19.20 | (0.17) | 1.99 | 1.82 | — | — | — | $21.02 | 9.48% | 1.99% | 1.99% | (0.84)% | (0.84)% | 13% | $678 | ||
2010 | $16.22 | (0.13) | 3.11 | 2.98 | — | — | — | $19.20 | 18.45% | 2.00% | 2.00% | (0.75)% | (0.75)% | 24% | $789 |
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For a Share Outstanding Throughout the Years Ended October 31 (except as noted) | |||||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||||
Income From Investment Operations: | Distributions From: | 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 | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Operating Expenses (before expense waiver) | Net Investment Income (Loss) | Net Investment Income (Loss) (before expense waiver) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
R Class | |||||||||||||||||
2015(3) | $35.46 | (0.02) | 1.68 | 1.66 | — | (2.53) | (2.53) | $34.59 | 5.35% | 1.48%(4) | 1.48%(4) | (0.12)%(4) | (0.12)%(4) | 6% | $8,617 | ||
2014 | $32.10 | (0.08) | 4.76 | 4.68 | — | (1.32) | (1.32) | $35.46 | 15.08% | 1.50% | 1.51% | (0.21)% | (0.22)% | 16% | $7,983 | ||
2013 | $24.66 | 0.01 | 7.53 | 7.54 | (0.10) | — | (0.10) | $32.10 | 30.66% | 1.49% | 1.49% | 0.02% | 0.02% | 26% | $6,556 | ||
2012 | $22.60 | (0.06) | 2.12 | 2.06 | — | — | — | $24.66 | 9.12% | 1.49% | 1.49% | (0.24)% | (0.24)% | 13% | $5,595 | ||
2011 | $20.54 | (0.08) | 2.14 | 2.06 | — | — | — | $22.60 | 10.03% | 1.49% | 1.49% | (0.34)% | (0.34)% | 13% | $4,173 | ||
2010 | $17.26 | (0.05) | 3.33 | 3.28 | — | — | — | $20.54 | 19.00% | 1.50% | 1.50% | (0.25)% | (0.25)% | 24% | $3,260 | ||
R6 Class | |||||||||||||||||
2015(3) | $38.25 | 0.13 | 1.82 | 1.95 | (0.25) | (2.53) | (2.78) | $37.42 | 5.80% | 0.63%(4) | 0.63%(4) | 0.73%(4) | 0.73%(4) | 6% | $34,128 | ||
2014 | $34.46 | 0.05 | 5.28 | 5.33 | (0.22) | (1.32) | (1.54) | $38.25 | 16.06% | 0.65% | 0.66% | 0.64% | 0.63% | 16% | $23,684 | ||
2013(7) | $31.57 | 0.05 | 2.84 | 2.89 | — | — | — | $34.46 | 9.15% | 0.63%(4) | 0.64%(4) | 0.61%(4) | 0.60%(4) | 26%(8) | $27 |
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 and do not reflect applicable sales charges, if any. Total returns for periods less than one year are not annualized. |
(3) | Six months ended April 30, 2015 (unaudited). |
(4) | Annualized. |
(5) | Per-share amount was less than $0.005. |
(6) | Ratio was less than 0.005%. |
(7) | July 26, 2013 (commencement of sale) through October 31, 2013. |
(8) | Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended October 31, 2013. |
See Notes to Financial Statements.
22
Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain IRAs are subject to federal income tax withholding, unless you elect not to have withholding apply. Tax will be withheld on the total amount withdrawn even though you may be receiving amounts that are not subject to withholding, such as nondeductible contributions. In such case, excess amounts of withholding could occur. You may adjust your withholding election so that a greater or lesser amount will be withheld.
If you don’t want us to withhold on this amount, you must notify us to not withhold the federal income tax. You may notify us in writing or in certain situations by telephone or through other electronic means. For systematic withdrawals, your withholding election will remain in effect until revoked or changed by filing a new election. You have the right to revoke your election at any time.
Remember, even if you elect not to have income tax withheld, you are liable for paying income tax on the taxable portion of your withdrawal. If you elect not to have income tax withheld or you don’t have enough income tax withheld, you may be responsible for payment of estimated tax. You may incur penalties under the estimated tax rules if your withholding and estimated tax payments are not sufficient. You can reduce or defer the income tax on a distribution by directly or indirectly rolling such distribution over to another IRA or eligible plan. You should consult your tax advisor for additional information.
State tax will be withheld if, at the time of your distribution, your address is within one of the mandatory withholding states and you have federal income tax withheld (or as otherwise required by state law). State taxes will be withheld from your distribution in accordance with the respective state rules.
Distributions you receive from 403(b), 457 and qualified plans are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
A description of the policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund is available without charge, upon request, by calling 1-800-345-2021. It is also available on the "About Us" page of American Century Investments’ website at americancentury.com and on the Securities and Exchange Commission’s website at sec.gov. Information regarding how the investment advisor voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the "About Us" page at americancentury.com. It is also available at sec.gov.
Quarterly Portfolio Disclosure
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-Q. The fund’s Forms N-Q are available on the SEC’s website at sec.gov, and may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The fund also makes its complete schedule of portfolio holdings for the most recent quarter of its fiscal year available on its
website at americancentury.com and, upon request, by calling 1-800-345-2021.
23
Notes |
24
![]() | ||
Contact Us | americancentury.com | |
Automated Information Line | 1-800-345-8765 | |
Investor Services Representative | 1-800-345-2021 or 816-531-5575 | |
Investors Using Advisors | 1-800-378-9878 | |
Business, Not-For-Profit, Employer-Sponsored Retirement Plans | 1-800-345-3533 | |
Banks and Trust Companies, Broker-Dealers, Financial Professionals, Insurance Companies | 1-800-345-6488 | |
Telecommunications Relay Service for the Deaf | 711 | |
American Century Mutual Funds, Inc. | ||
Investment Advisor: American Century Investment Management, Inc. Kansas City, Missouri | ||
This report and the statements it contains are submitted for the general information of our shareholders. The report is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus. | ||
©2015 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-85689 1506 |
SEMIANNUAL REPORT | APRIL 30, 2015 |
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Veedot® Fund
Table of Contents |
Any opinions expressed in this report reflect those of the author as of the date of the report, and do not necessarily represent the opinions of American Century Investments® or any other person in the American Century Investments organization. Any such opinions are subject to change at any time based upon market or other conditions and American Century Investments disclaims any responsibility to update such opinions. These opinions may not be relied upon as investment advice and, because investment decisions made by American Century Investments funds are based on numerous factors, may not be relied upon as an indication of trading intent on behalf of any American Century Investments fund. Security examples are used for representational purposes only and are not intended as recommendations to purchase or sell securities. Performance information for comparative indices and securities is provided to American Century Investments by third party vendors. To the best of American Century Investments’ knowledge, such information is accurate at the time of printing.
President’s Letter |
![]() | Dear Investor: Thank you for reviewing this semiannual report for the six months ended April 30, 2015. It provides a macroeconomic and financial market overview (below), followed by fund performance, a schedule of fund investments, and other financial information. For additional commentary and updated information on fund performance, key factors that affected asset returns, and other insights regarding the investment markets, we encourage you to visit our website, americancentury.com. |
Jonathan Thomas |
Global Divergence in Monetary Policies Influenced Investor Behavior
The six-month reporting period saw big swings in market returns, triggered in part by central bank moves. In October 2014, just before the period started, the U.S. Federal Reserve ended its latest bond-buying program (quantitative easing, QE). As QE wound down, the U.S. economy enjoyed 5% annualized growth (after inflation) in the third quarter of 2014, the highest rate since the third quarter of 2003. But while QE was ending in the U.S., other major central banks were starting or increasing QE as their economies faltered. A “global divergence” of economic growth and monetary policies opened between the U.S. and most of the rest of the developed world.
This divergence helped fuel increased demand for the U.S. dollar and U.S. dollar-denominated assets, and put downward pressure on commodities prices, most notably oil. Though the resulting dollar rally and oil price decline reversed somewhat in April 2015, the dollar remained 9% higher for the reporting period, as measured by the U.S. Dollar Index, while oil remained more than 25% lower, as measured by both Brent and West Texas Intermediate crude oil futures. In this environment, U.S. stocks and bonds posted moderate gains—the S&P 500 Index and the Barclays U.S. Aggregate Bond Index returned 4.40% and 2.06%, respectively.
We expect monetary policy divergence between the U.S. and other major developed economies to continue this year, accompanied by market volatility. This could present both challenges and opportunities for active investment managers. Upward pressures on inflation and interest rates could develop as the massive amount of global monetary stimulus in progress takes hold and economies improve. But we believe lingering constraining forces will likely keep inflation and interest rates relatively low for the next six months. In this environment, we continue to believe in a disciplined, diversified, long-term investment approach, using professionally managed stock and bond portfolios to meet financial goals. We appreciate your continued trust in us.
Sincerely,
![](https://capedge.com/proxy/N-CSRS/0000100334-15-000051/jonathanthomassig.jpg)
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
2
Performance |
Total Returns as of April 30, 2015 | |||||||
Average Annual Returns | |||||||
Ticker Symbol | 6 months(1) | 1 year | 5 years | 10 years | Since Inception | Inception Date | |
Investor Class | AMVIX | 8.38% | 14.59% | 14.84% | 8.67% | 5.56% | 11/30/99 |
Russell 3000 Index | — | 4.74% | 12.74% | 14.32% | 8.66% | 5.18% | — |
Institutional Class | AVDIX | 8.52% | 14.84% | 15.07% | 8.88% | 4.59% | 8/1/00 |
(1) | Total returns for periods less than one year are not annualized. |
Total Annual Fund Operating Expenses | |
Investor Class | Institutional Class |
1.25% | 1.05% |
The total annual fund operating expenses shown is as stated in the fund’s prospectus current as of the date of this report. The prospectus may vary from the expense ratio shown elsewhere in this report because it is based on a different time period, includes acquired fund fees and expenses, and, if applicable, does not include fee waivers or expense reimbursements.
Data presented reflect past performance. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance shown. Investment return and principal value will fluctuate, and redemption value may be more or less than original cost. Data assumes reinvestment of dividends and capital gains, and none of the charts reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. To obtain performance data current to the most recent month end, please call 1-800-345-2021 or visit americancentury.com. For additional information about the fund, please consult the prospectus.
3
Fund Characteristics |
APRIL 30, 2015 | |
Top Ten Holdings | % of net assets |
Microsoft Corp. | 1.7% |
Apple, Inc. | 1.6% |
Exxon Mobil Corp. | 1.6% |
Aetna, Inc. | 1.4% |
Western Digital Corp. | 1.3% |
Eli Lilly & Co. | 1.2% |
Janus Capital Group, Inc. | 1.2% |
Time Warner Cable, Inc. | 1.2% |
Gray Television, Inc. | 1.2% |
Intel Corp. | 1.2% |
Top Five Industries | % of net assets |
Oil, Gas and Consumable Fuels | 6.6% |
Pharmaceuticals | 5.3% |
Capital Markets | 5.2% |
IT Services | 4.9% |
Software | 4.6% |
Types of Investments in Portfolio | % of net assets |
Common Stocks | 98.9% |
Temporary Cash Investments | 2.8% |
Other Assets and Liabilities | (1.7)% |
4
Shareholder Fee Example |
Fund shareholders may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption/exchange fees; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in your fund and to compare these costs with the ongoing cost of investing in other mutual funds.
The example is based on an investment of $1,000 made at the beginning of the period and held for the entire period from November 1, 2014 to April 30, 2015.
Actual Expenses
The table provides information about actual account values and actual expenses for each class. You may use the information, together with the amount you invested, to estimate the expenses that you paid over the period. First, identify the share class you own. Then simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
If you hold Investor Class shares of any American Century Investments fund, or Institutional Class shares of the American Century Diversified Bond Fund, in an American Century Investments account (i.e., not a financial intermediary or retirement plan account), American Century Investments may charge you a $12.50 semiannual account maintenance fee if the value of those shares is less than $10,000. We will redeem shares automatically in one of your accounts to pay the $12.50 fee. 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. Personal accounts include individual accounts, joint accounts, UGMA/UTMA accounts, personal trusts, Coverdell Education Savings Accounts and 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. If you are subject to the Account Maintenance Fee, your account value could be reduced by the fee amount.
Hypothetical Example for Comparison Purposes
The table also provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio of each class of your fund and an assumed rate of return of 5% per year before expenses, which is not the actual return of a fund’s share class. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) or redemption/exchange fees. Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
5
Beginning Account Value 11/1/14 | Ending Account Value 4/30/15 | Expenses Paid During Period(1) 11/1/14 - 4/30/15 | Annualized Expense Ratio(1) | |
Actual | ||||
Investor Class | $1,000 | $1,083.80 | $6.46 | 1.25% |
Institutional Class | $1,000 | $1,085.20 | $5.43 | 1.05% |
Hypothetical | ||||
Investor Class | $1,000 | $1,018.60 | $6.26 | 1.25% |
Institutional Class | $1,000 | $1,019.59 | $5.26 | 1.05% |
(1) | Expenses are equal to the class's annualized expense ratio listed in the table above, multiplied by the average account value over the period, multiplied by 181, the number of days in the most recent fiscal half-year, divided by 365, to reflect the one-half year period. |
6
Schedule of Investments |
APRIL 30, 2015 (UNAUDITED)
Shares | Value | |||
COMMON STOCKS — 98.9% | ||||
Aerospace and Defense — 4.0% | ||||
Curtiss-Wright Corp. | 13,921 | $ | 1,017,068 | |
General Dynamics Corp. | 7,400 | 1,016,168 | ||
Rockwell Collins, Inc. | 10,544 | 1,026,248 | ||
Textron, Inc. | 22,251 | 978,599 | ||
4,038,083 | ||||
Auto Components — 1.0% | ||||
American Axle & Manufacturing Holdings, Inc.(1) | 38,807 | 967,458 | ||
Automobiles — 0.6% | ||||
Ford Motor Co. | 38,405 | 606,799 | ||
Banks — 0.6% | ||||
Wells Fargo & Co. | 11,497 | 633,485 | ||
Beverages — 1.5% | ||||
Brown-Forman Corp., Class B | 5,948 | 536,688 | ||
Coca-Cola Femsa SAB de CV ADR | 10,034 | 801,717 | ||
Monster Beverage Corp.(1) | 1,565 | 214,577 | ||
1,552,982 | ||||
Biotechnology — 1.0% | ||||
Celgene Corp.(1) | 8,885 | 960,113 | ||
Capital Markets — 5.2% | ||||
AllianceBernstein Holding LP | 38,319 | 1,201,301 | ||
BlackRock, Inc. | 1,860 | 676,928 | ||
Blackstone Group LP (The) | 25,589 | 1,048,126 | ||
Janus Capital Group, Inc. | 69,308 | 1,240,613 | ||
KCG Holdings, Inc., Class A(1) | 79,450 | 1,020,138 | ||
5,187,106 | ||||
Chemicals — 2.1% | ||||
Dow Chemical Co. (The) | 21,306 | 1,086,606 | ||
Mosaic Co. (The) | 22,772 | 1,001,968 | ||
2,088,574 | ||||
Communications Equipment — 1.1% | ||||
Cisco Systems, Inc. | 38,617 | 1,113,328 | ||
Construction Materials — 1.1% | ||||
Headwaters, Inc.(1) | 63,456 | 1,115,556 | ||
Consumer Finance — 0.9% | ||||
American Express Co. | 11,383 | 881,613 | ||
Diversified Financial Services — 0.8% | ||||
Berkshire Hathaway, Inc., Class A(1) | 4 | 853,600 | ||
Diversified Telecommunication Services — 1.0% | ||||
Verizon Communications, Inc. | 20,465 | 1,032,255 | ||
Electric Utilities — 0.8% | ||||
Exelon Corp. | 23,994 | 816,276 | ||
Electrical Equipment — 1.0% | ||||
Emerson Electric Co. | 17,704 | 1,041,526 |
7
Shares | Value | |||
Electronic Equipment, Instruments and Components — 1.6% | ||||
Arrow Electronics, Inc.(1) | 8,542 | $ | 510,043 | |
Corning, Inc. | 52,482 | 1,098,448 | ||
1,608,491 | ||||
Energy Equipment and Services — 1.2% | ||||
Halliburton Co. | 19,022 | 931,127 | ||
Transocean Ltd. | 12,146 | 228,588 | ||
1,159,715 | ||||
Food and Staples Retailing — 2.5% | ||||
CVS Health Corp. | 6,169 | 612,520 | ||
Kroger Co. (The) | 13,923 | 959,434 | ||
Wal-Mart Stores, Inc. | 12,216 | 953,459 | ||
2,525,413 | ||||
Food Products — 2.7% | ||||
Archer-Daniels-Midland Co. | 20,048 | 979,946 | ||
General Mills, Inc. | 13,586 | 751,849 | ||
Mondelez International, Inc., Class A | 25,070 | 961,936 | ||
2,693,731 | ||||
Health Care Equipment and Supplies — 0.8% | ||||
DexCom, Inc.(1) | 11,947 | 807,259 | ||
Health Care Providers and Services — 4.2% | ||||
Aetna, Inc. | 13,070 | 1,396,791 | ||
Air Methods Corp.(1) | 13,183 | 602,463 | ||
Anthem, Inc. | 7,803 | 1,177,707 | ||
Express Scripts Holding Co.(1) | 11,751 | 1,015,286 | ||
4,192,247 | ||||
Hotels, Restaurants and Leisure — 2.1% | ||||
Hyatt Hotels Corp., Class A(1) | 12,791 | 742,517 | ||
McDonald's Corp. | 6,478 | 625,451 | ||
Ruth's Hospitality Group, Inc. | 49,487 | 720,036 | ||
2,088,004 | ||||
Household Products — 0.7% | ||||
Colgate-Palmolive Co. | 10,508 | 706,978 | ||
Independent Power and Renewable Electricity Producers — 1.2% | ||||
Ormat Technologies, Inc. | 32,330 | 1,182,955 | ||
Industrial Conglomerates — 1.9% | ||||
3M Co. | 4,772 | 746,293 | ||
General Electric Co. | 43,121 | 1,167,717 | ||
1,914,010 | ||||
Insurance — 2.6% | ||||
ACE Ltd. | 5,624 | 601,712 | ||
Aflac, Inc. | 16,221 | 1,022,572 | ||
HCI Group, Inc. | 22,723 | 990,268 | ||
2,614,552 | ||||
Internet and Catalog Retail — 0.8% | ||||
TripAdvisor, Inc.(1) | 9,603 | 772,945 | ||
Internet Software and Services — 1.2% | ||||
Facebook, Inc., Class A(1) | 7,653 | 602,827 | ||
WebMD Health Corp.(1) | 14,165 | 625,385 | ||
1,228,212 |
8
Shares | Value | |||
IT Services — 4.9% | ||||
Euronet Worldwide, Inc.(1) | 19,637 | $ | 1,148,372 | |
Fiserv, Inc.(1) | 11,972 | 929,027 | ||
International Business Machines Corp. | 4,502 | 771,148 | ||
Luxoft Holding, Inc.(1) | 21,137 | 1,095,531 | ||
Visa, Inc., Class A | 15,547 | 1,026,879 | ||
4,970,957 | ||||
Leisure Products — 1.0% | ||||
Nautilus, Inc.(1) | 57,551 | 967,432 | ||
Life Sciences Tools and Services — 3.1% | ||||
Bio-Techne Corp. | 10,337 | 991,938 | ||
Charles River Laboratories International, Inc.(1) | 16,162 | 1,117,764 | ||
Waters Corp.(1) | 7,661 | 959,081 | ||
3,068,783 | ||||
Media — 3.6% | ||||
Comcast Corp., Class A | 3,796 | 219,257 | ||
Gray Television, Inc.(1) | 91,860 | 1,218,064 | ||
Time Warner Cable, Inc. | 7,921 | 1,231,874 | ||
Walt Disney Co. (The) | 9,077 | 986,851 | ||
3,656,046 | ||||
Metals and Mining — 0.3% | ||||
RTI International Metals, Inc.(1) | 8,583 | 323,150 | ||
Multi-Utilities — 0.6% | ||||
Dominion Resources, Inc. | 7,750 | 555,520 | ||
Multiline Retail — 1.0% | ||||
Macy's, Inc. | 15,492 | 1,001,248 | ||
Oil, Gas and Consumable Fuels — 6.6% | ||||
Anadarko Petroleum Corp. | 11,960 | 1,125,436 | ||
Cabot Oil & Gas Corp. | 10,050 | 339,891 | ||
Chevron Corp. | 8,902 | 988,656 | ||
EOG Resources, Inc. | 10,580 | 1,046,891 | ||
Exxon Mobil Corp. | 18,221 | 1,591,969 | ||
Occidental Petroleum Corp. | 7,347 | 588,495 | ||
Tsakos Energy Navigation Ltd. | 105,990 | 972,988 | ||
6,654,326 | ||||
Paper and Forest Products — 0.6% | ||||
International Paper Co. | 11,871 | 637,710 | ||
Personal Products — 1.0% | ||||
Estee Lauder Cos., Inc. (The), Class A | 12,013 | 976,537 | ||
Pharmaceuticals — 5.3% | ||||
Bristol-Myers Squibb Co. | 12,123 | 772,599 | ||
Eli Lilly & Co. | 17,353 | 1,247,160 | ||
Merck & Co., Inc. | 12,116 | 721,629 | ||
Mylan NV(1) | 12,979 | 937,863 | ||
Prestige Brands Holdings, Inc.(1) | 24,230 | 951,027 | ||
Sanofi ADR | 13,489 | 681,869 | ||
5,312,147 | ||||
Professional Services — 2.1% | ||||
Korn/Ferry International | 33,729 | 1,063,475 | ||
RPX Corp.(1) | 68,741 | 1,069,610 | ||
2,133,085 |
9
Shares | Value | |||
Real Estate Investment Trusts (REITs) — 2.7% | ||||
Chambers Street Properties | 125,903 | $ | 944,272 | |
Columbia Property Trust, Inc. | 31,875 | 836,081 | ||
WP Carey, Inc. | 15,293 | 970,800 | ||
2,751,153 | ||||
Road and Rail — 0.9% | ||||
ArcBest Corp. | 26,591 | 949,299 | ||
Semiconductors and Semiconductor Equipment — 2.6% | ||||
Intel Corp. | 37,131 | 1,208,614 | ||
Micron Technology, Inc.(1) | 36,965 | 1,039,825 | ||
Tessera Technologies, Inc. | 10,890 | 393,238 | ||
2,641,677 | ||||
Software — 4.6% | ||||
Fortinet, Inc.(1) | 23,200 | 875,568 | ||
Microsoft Corp. | 34,872 | 1,696,174 | ||
Oracle Corp. | 24,202 | 1,055,691 | ||
SolarWinds, Inc.(1) | 19,800 | 965,844 | ||
4,593,277 | ||||
Specialty Retail — 2.6% | ||||
Home Depot, Inc. (The) | 9,102 | 973,732 | ||
Lowe's Cos., Inc. | 14,060 | 968,172 | ||
Penske Automotive Group, Inc. | 12,898 | 629,551 | ||
2,571,455 | ||||
Technology Hardware, Storage and Peripherals — 4.0% | ||||
Apple, Inc. | 13,209 | 1,653,106 | ||
Seagate Technology plc | 18,765 | 1,101,881 | ||
Western Digital Corp. | 12,903 | 1,261,139 | ||
4,016,126 | ||||
Thrifts and Mortgage Finance — 3.3% | ||||
Capitol Federal Financial, Inc. | 74,325 | 891,900 | ||
Essent Group Ltd.(1) | 41,774 | 1,042,261 | ||
Northwest Bancshares, Inc. | 59,238 | 729,220 | ||
TFS Financial Corp. | 47,863 | 699,757 | ||
3,363,138 | ||||
Tobacco — 0.9% | ||||
Philip Morris International, Inc. | 11,033 | 920,925 | ||
Trading Companies and Distributors — 0.5% | ||||
Aircastle Ltd. | 19,465 | 466,771 | ||
Wireless Telecommunication Services — 0.5% | ||||
America Movil SAB de CV, Series L ADR | 22,733 | 474,892 | ||
TOTAL COMMON STOCKS (Cost $89,706,435) | 99,388,920 | |||
TEMPORARY CASH INVESTMENTS — 2.8% | ||||
Repurchase Agreement, Bank of America Merrill Lynch, (collateralized by various U.S. Treasury obligations, 1.375%, 4/30/20, valued at $471,814), in a joint trading account at 0.08%, dated 4/30/15, due 5/1/15 (Delivery value $463,613) | 463,612 | |||
Repurchase Agreement, Credit Suisse First Boston, Inc., (collateralized by various U.S. Treasury obligations, 1.50%, 12/31/18, valued at $1,132,599), in a joint trading account at 0.03%, dated 4/30/15, due 5/1/15 (Delivery value $1,112,670) | 1,112,669 |
10
Value | ||||
Repurchase Agreement, Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 3.625%, 2/15/44, valued at $1,330,313), at 0.01%, dated 4/30/15, due 5/1/15 (Delivery value $1,299,000) | $ | 1,299,000 | ||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $2,875,281) | 2,875,281 | |||
TOTAL INVESTMENT SECURITIES — 101.7% (Cost $92,581,716) | 102,264,201 | |||
OTHER ASSETS AND LIABILITIES — (1.7)% | (1,750,285) | |||
TOTAL NET ASSETS — 100.0% | $ | 100,513,916 |
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS | |||||||||
Currency Purchased | Currency Sold | Counterparty | Settlement Date | Unrealized Appreciation (Depreciation) | |||||
EUR | 13,447 | USD | 15,024 | UBS AG | 5/29/15 | $ | 80 | ||
USD | 633,146 | EUR | 583,861 | UBS AG | 5/29/15 | (22,645 | ) | ||
GBP | 218,100 | USD | 334,281 | Credit Suisse AG | 5/29/15 | 444 | |||
GBP | 251,876 | USD | 389,427 | Credit Suisse AG | 5/29/15 | (2,865 | ) | ||
GBP | 14,619 | USD | 22,255 | Credit Suisse AG | 5/29/15 | 181 | |||
USD | 707,512 | GBP | 473,529 | Credit Suisse AG | 5/29/15 | (19,228 | ) | ||
USD | 16,661 | GBP | 11,066 | Credit Suisse AG | 5/29/15 | (322 | ) | ||
$ | (44,355 | ) |
NOTES TO SCHEDULE OF INVESTMENTS | ||
ADR | - | American Depositary Receipt |
EUR | - | Euro |
GBP | - | British Pound |
USD | - | United States Dollar |
(1) | Non-income producing. |
See Notes to Financial Statements.
11
Statement of Assets and Liabilities |
APRIL 30, 2015 (UNAUDITED) | |||
Assets | |||
Investment securities, at value (cost of $92,581,716) | $ | 102,264,201 | |
Receivable for investments sold | 1,552,787 | ||
Receivable for capital shares sold | 74,602 | ||
Unrealized appreciation on forward foreign currency exchange contracts | 705 | ||
Dividends and interest receivable | 106,358 | ||
103,998,653 | |||
Liabilities | |||
Disbursements in excess of demand deposit cash | 1,445 | ||
Payable for investments purchased | 3,271,848 | ||
Payable for capital shares redeemed | 63,558 | ||
Unrealized depreciation on forward foreign currency exchange contracts | 45,060 | ||
Accrued management fees | 102,826 | ||
3,484,737 | |||
Net Assets | $ | 100,513,916 | |
Net Assets Consist of: | |||
Capital (par value and paid-in surplus) | $ | 83,524,561 | |
Undistributed net investment income | 98,559 | ||
Undistributed net realized gain | 7,252,666 | ||
Net unrealized appreciation | 9,638,130 | ||
$ | 100,513,916 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | ||
Investor Class, $0.01 Par Value | $97,800,843 | 8,936,948 | $10.94 | |
Institutional Class, $0.01 Par Value | $2,713,073 | 243,059 | $11.16 |
See Notes to Financial Statements.
12
Statement of Operations |
FOR THE SIX MONTHS ENDED APRIL 30, 2015 (UNAUDITED) | |||
Investment Income (Loss) | |||
Income: | |||
Dividends (net of foreign taxes withheld of $6,054) | $ | 905,146 | |
Interest | 232 | ||
905,378 | |||
Expenses: | |||
Management fees | 595,297 | ||
Directors' fees and expenses | 1,720 | ||
597,017 | |||
Net investment income (loss) | 308,361 | ||
Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investment transactions | 8,898,589 | ||
Foreign currency transactions | 172,326 | ||
9,070,915 | |||
Change in net unrealized appreciation (depreciation) on: | |||
Investments | (1,576,585 | ) | |
Translation of assets and liabilities in foreign currencies | (78,413 | ) | |
(1,654,998 | ) | ||
Net realized and unrealized gain (loss) | 7,415,917 | ||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 7,724,278 |
See Notes to Financial Statements.
13
Statement of Changes in Net Assets |
SIX MONTHS ENDED APRIL 30, 2015 (UNAUDITED) AND YEAR ENDED OCTOBER 31, 2014 | ||||||
Increase (Decrease) in Net Assets | April 30, 2015 | October 31, 2014 | ||||
Operations | ||||||
Net investment income (loss) | $ | 308,361 | $ | 545,978 | ||
Net realized gain (loss) | 9,070,915 | 11,501,263 | ||||
Change in net unrealized appreciation (depreciation) | (1,654,998) | (838,591 | ) | |||
Net increase (decrease) in net assets resulting from operations | 7,724,278 | 11,208,650 | ||||
Distributions to Shareholders | ||||||
From net investment income: | ||||||
Investor Class | (488,170) | (933,951) | ||||
Institutional Class | (18,491) | (1,513) | ||||
Decrease in net assets from distributions | (506,661) | (935,464) | ||||
Capital Share Transactions | ||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | (299,131) | (5,259,520) | ||||
Redemption Fees | ||||||
Increase in net assets from redemption fees | 2,014 | 6,720 | ||||
Net increase (decrease) in net assets | 6,920,500 | 5,020,386 | ||||
Net Assets | ||||||
Beginning of period | 93,593,416 | 88,573,030 | ||||
End of period | $ | 100,513,916 | $ | 93,593,416 | ||
Undistributed net investment income | $ | 98,559 | $ | 296,859 |
See Notes to Financial Statements.
14
Notes to Financial Statements |
APRIL 30, 2015 (UNAUDITED)
1. Organization
American Century Mutual Funds, Inc. (the corporation) is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company and is organized as a Maryland corporation. Veedot Fund (the fund) is one fund in a series issued by the corporation. The fund is nondiversified as defined under the 1940 Act. The fund's investment objective is to seek long-term capital growth.
The fund offers the Investor Class and the Institutional Class. The share classes differ principally in their respective distribution and shareholder servicing expenses and arrangements. The Institutional Class is made available to institutional shareholders or through financial intermediaries whose clients do not require the same level of shareholder and administrative services as shareholders of other classes. As a result, the Institutional Class is charged a lower unified management fee.
2. Significant Accounting Policies
The following is a summary of significant accounting policies consistently followed by the fund in preparation of its financial statements. The fund is an investment company and follows accounting and reporting guidance in accordance with accounting principles generally accepted in the United States of America. This may require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from these estimates. Management evaluated the impact of events or transactions occurring through the date the financial statements were issued that would merit recognition or disclosure.
Investment Valuations — The fund determines the fair value of its investments and computes its net asset value per share at 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. The Board of Directors has adopted valuation policies and procedures to guide the investment advisor in the fund’s investment valuation process and to provide methodologies for the oversight of the fund’s pricing function.
Equity securities that are listed or traded on a domestic securities exchange are valued at the last reported sales price or at the official closing price as provided by the exchange. Equity securities traded on foreign securities exchanges are generally valued at the closing price of such securities on the exchange where primarily traded or at the close of the NYSE, if that is earlier. If no last sales price is reported, or if local convention or regulation so provides, the mean of the latest bid and asked prices may be used. Securities traded over-the-counter are valued at the mean of the latest bid and asked prices, the last sales price, or the official closing price. Equity securities initially expressed in local currencies are translated into U.S. dollars at the mean of the appropriate currency exchange rate at the close of the NYSE as provided by an independent pricing service.
Fixed income securities maturing within 60 days at the time of purchase may be valued at cost, plus or minus any amortized discount or premium or at the evaluated mean as provided by an independent pricing service. Evaluated mean prices are commonly derived through utilization of market models, which may consider, among other factors: trade data, quotations from 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.
Open-end management investment companies are valued at the reported net asset value per share. Repurchase agreements are valued at cost, which approximates fair value. Forward foreign currency exchange contracts are valued at the mean of the appropriate forward exchange rate at the close of the NYSE as provided by an independent pricing service.
If the fund determines that the market price for an investment is not readily available or the valuation methods mentioned above do not reflect an investment’s fair value, such investment is valued as determined in good faith by the Board of Directors or its delegate, in accordance with policies and procedures adopted by the Board of Directors. In its determination of fair value, the fund may review several factors including, but not limited to, market information regarding the specific investment or comparable investments and correlation with other investment types, futures indices or general market indicators. Circumstances that may cause the
15
fund to use these procedures to value an investment include, but are not limited to: an investment has been declared in default or is distressed; trading in a security has been suspended during the trading day or a security is not actively trading on its principal exchange; prices received from a regular pricing source are deemed unreliable; or there is a foreign market holiday and no trading occurred.
The fund monitors for significant events occurring after the close of an investment’s primary exchange but before the fund’s net asset value per share is determined. Significant events may include, but are not limited to: corporate announcements and transactions; governmental action and political unrest that could impact a specific investment or an investment sector; or armed conflicts, natural disasters and similar events that could affect investments in a specific country or region. The fund also monitors for significant fluctuations between domestic and foreign markets, as evidenced by the U.S. market or such other indicators that the Board of Directors, or its delegate, deems appropriate. If significant fluctuations in foreign markets are identified, the fund may apply a model-derived factor to the closing price of equity securities traded on foreign securities exchanges. The factor is based on observable market data as provided by an independent pricing service.
Security Transactions — Security transactions are accounted for as of the trade date. Net realized gains and losses are determined on the identified cost basis, which is also used for federal income tax purposes.
Investment Income — Dividend income less foreign taxes withheld, if any, is recorded as of the ex-dividend date. Distributions received on securities that represent a return of capital or long-term capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The fund may estimate the components of distributions received that may be considered nontaxable distributions or long-term capital gain distributions for income tax purposes. Interest income is recorded on the accrual basis and includes accretion of discounts and amortization of premiums.
Foreign Currency Translations — All assets and liabilities initially expressed in foreign currencies are translated into U.S. dollars at prevailing exchange rates at period end. The fund may enter into spot foreign currency exchange contracts to facilitate transactions denominated in a foreign currency. Purchases and sales of investment securities, dividend and interest income, spot foreign currency exchange contracts, and expenses are translated at the rates of exchange prevailing on the respective dates of such transactions. Net realized and unrealized foreign currency exchange gains or losses related to investment securities are a component of net realized gain (loss) on investment transactions and change in net unrealized appreciation (depreciation) on investments, respectively.
Repurchase Agreements — The fund may enter into repurchase agreements with institutions that American Century Investment Management, Inc. (ACIM) (the investment advisor) has determined are creditworthy pursuant to criteria adopted by the Board of Directors. The fund requires that the collateral, represented by securities, received in a repurchase transaction be transferred to the custodian in a manner sufficient to enable the fund to obtain those securities in the event of a default under the repurchase agreement. ACIM monitors, on a daily basis, the securities transferred to ensure the value, including accrued interest, of the securities under each repurchase agreement is equal to or greater than amounts owed to the fund under each repurchase agreement.
Joint Trading Account — Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the fund, along with certain other funds in the American Century Investments family of funds, may transfer uninvested cash balances into a joint trading account. These balances are invested in one or more repurchase agreements that are collateralized by U.S. Treasury or Agency obligations.
Income Tax Status — It is the fund’s policy to distribute substantially all net investment income and net realized gains to shareholders and to otherwise qualify as a regulated investment company under provisions of the Internal Revenue Code. Accordingly, no provision has been made for income taxes. The fund files U.S. federal, state, local and non-U.S. tax returns as applicable. The fund's tax returns are subject to examination by the relevant taxing authority until expiration of the applicable statute of limitations, which is generally three years from the date of filing but can be longer in certain jurisdictions. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination and for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Multiple Class — All shares of the fund represent an equal pro rata interest in the net assets of the class to which such shares belong, and have identical voting, dividend, liquidation and other rights and the same terms and conditions, except for class specific expenses and exclusive rights to vote on matters affecting only individual classes. Income, non-class specific expenses, and realized and unrealized capital gains and losses of the fund are allocated to each class of shares based on their relative net assets.
16
Distributions to Shareholders — Distributions from net investment income and net realized gains, if any, are generally declared and paid annually.
Redemption Fees — The fund may impose a 2.00% redemption fee on shares held less than 60 days. The redemption fee is retained by the fund and helps cover transaction costs that long-term investors may bear when the fund sells securities to meet investor redemptions.
Indemnifications — Under the corporation’s organizational documents, its officers and directors are indemnified against certain liabilities arising out of the performance of their duties to the fund. In addition, in the normal course of business, the fund enters into contracts that provide general indemnifications. The maximum exposure under these arrangements is unknown as this would involve future claims that may be made against a fund. The risk of material loss from such claims is considered by management to be remote.
3. Fees and Transactions with Related Parties
Certain officers and directors of the corporation are also officers and/or directors of American Century Companies, Inc. (ACC). The corporation’s investment advisor, ACIM, the corporation's distributor, American Century Investment Services, Inc., and the corporation’s transfer agent, American Century Services, LLC, are wholly owned, directly or indirectly, by ACC.
Management Fees — The corporation has entered into a management agreement with ACIM, under which ACIM provides the fund with investment advisory and management services in exchange for a single, unified management fee (the fee) per class. The agreement provides that all expenses of managing and operating the fund, except distribution and service fees, brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), and extraordinary expenses, will be paid by ACIM. The fee is computed and accrued daily based on each class’s daily net assets and paid monthly in arrears. The rate of the fee is determined by applying a fee rate calculation formula. This formula takes into account the fund’s assets as well as certain assets, if any, of other clients of the investment advisor outside the American Century Investments family of funds (such as subadvised funds and separate accounts) that have very similar investment teams and investment strategies (strategy assets). The annual management fee schedule ranges from 1.000% to 1.250% for the Investor Class. The annual management fee schedule ranges from 0.800% to 1.050% for the Institutional Class. The effective annual management fee for each class for the six months ended April 30, 2015 was 1.25% and 1.05% for the Investor Class and Institutional Class, respectively.
Directors' Fees and Expenses — The Board of Directors is responsible for overseeing the investment advisor’s management and operations of the fund. The directors receive detailed information about the fund and its investment advisor regularly throughout the year, and meet at least quarterly with management of the investment advisor to review reports about fund operations. The fund’s officers do not receive compensation from the fund.
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the six months ended April 30, 2015 were $86,088,856 and $86,713,295, respectively.
17
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended April 30, 2015 | Year ended October 31, 2014 | |||||||||
Shares | Amount | Shares | Amount | |||||||
Investor Class/Shares Authorized | 200,000,000 | 200,000,000 | ||||||||
Sold | 405,511 | $ | 4,408,642 | 719,155 | $ | 6,834,412 | ||||
Issued in reinvestment of distributions | 47,825 | 475,861 | 99,908 | 912,160 | ||||||
Redeemed | (493,431 | ) | (5,201,791 | ) | (1,558,477 | ) | (15,012,894 | ) | ||
(40,095 | ) | (317,288 | ) | (739,414 | ) | (7,266,322 | ) | |||
Institutional Class/Shares Authorized | 100,000,000 | 100,000,000 | ||||||||
Sold | 4,653 | 49,644 | 251,800 | 2,432,360 | ||||||
Issued in reinvestment of distributions | 1,824 | 18,491 | 163 | 1,513 | ||||||
Redeemed | (4,813 | ) | (49,978 | ) | (44,714 | ) | (427,071 | ) | ||
1,664 | 18,157 | 207,249 | 2,006,802 | |||||||
Net increase (decrease) | (38,431 | ) | $ | (299,131 | ) | (532,165 | ) | $ | (5,259,520 | ) |
6. Fair Value Measurements
The fund’s investments valuation process is based on several considerations and may use multiple inputs to determine the fair value of the investments held by the fund. In conformity with accounting principles generally accepted in the United States of America, the inputs used to determine a valuation are classified into three broad levels.
• | Level 1 valuation inputs consist of unadjusted quoted prices in an active market for identical investments. |
• | Level 2 valuation inputs consist of direct or indirect observable market data (including quoted prices for comparable investments, evaluations of subsequent market events, interest rates, prepayment speeds, credit risk, etc.). These inputs also consist of quoted prices for identical investments initially expressed in local currencies that are adjusted through translation into U.S. dollars. |
• | Level 3 valuation inputs consist of unobservable data (including a fund’s own assumptions). |
The level classification is based on the lowest level input that is significant to the fair valuation measurement. The valuation inputs are not necessarily an indication of the risks associated with investing in these securities or other financial instruments. There were no significant transfers between levels during the period.
The following is a summary of the level classifications as of period end. The Schedule of Investments provides additional information on the fund’s portfolio holdings.
Level 1 | Level 2 | Level 3 | ||||||
Assets | ||||||||
Investment Securities | ||||||||
Common Stocks | $ | 99,388,920 | — | — | ||||
Temporary Cash Investments | — | $ | 2,875,281 | — | ||||
$ | 99,388,920 | $ | 2,875,281 | — | ||||
Other Financial Instruments | ||||||||
Forward Foreign Currency Exchange Contracts | — | $ | 705 | — | ||||
Liabilities | ||||||||
Other Financial Instruments | ||||||||
Forward Foreign Currency Exchange Contracts | — | $ | (45,060 | ) | — |
18
7. Derivative Instruments
Foreign Currency Risk — The fund is subject to foreign currency exchange rate risk in the normal course of pursuing its investment objectives. The value of foreign investments held by a fund may be significantly affected by changes in foreign currency exchange rates. The dollar value of a foreign security generally decreases when the value of the dollar rises against the foreign currency in which the security is denominated and tends to increase when the value of the dollar declines against such foreign currency. A fund may enter into forward foreign currency exchange contracts to reduce a fund's exposure to foreign currency exchange rate fluctuations. The net U.S. dollar value of foreign currency underlying all contractual commitments held by a fund and the resulting unrealized appreciation or depreciation are determined daily. Realized gain or loss is recorded upon the termination of the contract. Net realized and unrealized gains or losses occurring during the holding period of forward foreign currency exchange contracts are a component of net realized gain (loss) on foreign currency transactions and change in net unrealized appreciation (depreciation) on translation of assets and liabilities in foreign currencies, respectively. A fund bears the risk of an unfavorable change in the foreign currency exchange rate underlying the forward contract. Additionally, losses, up to the fair value, may arise if the counterparties do not perform under the contract terms. The fund's average U.S. dollar exposure to foreign currency risk derivative instruments held during the period was $1,275,414.
The value of foreign currency risk derivative instruments as of April 30, 2015, is disclosed on the Statement of Assets and Liabilities as an asset of $705 in unrealized appreciation on forward foreign currency exchange contracts and a liability of $45,060 in unrealized depreciation on forward foreign currency exchange contracts. For the six months ended April 30, 2015, the effect of foreign currency risk derivative instruments on the Statement of Operations was $172,326 in net realized gain (loss) on foreign currency transactions and $(78,413) in change in net unrealized appreciation (depreciation) on translation of assets and liabilities in foreign currencies.
8. Risk Factors
The fund’s investment process may result in high portfolio turnover, which could mean high transaction costs, affecting both performance and capital gains tax liabilities to investors.
9. Federal Tax Information
The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
As of April 30, 2015, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $ | 92,595,689 | |
Gross tax appreciation of investments | $ | 11,095,450 | |
Gross tax depreciation of investments | (1,426,938 | ) | |
Net tax appreciation (depreciation) of investments | $ | 9,668,512 |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales.
As of October 31, 2014, the fund had accumulated short-term capital losses of $(1,907,755), which represent net capital loss carryovers that may be used to offset future realized capital gains for federal income tax purposes. Future capital loss carryover utilization in any given year may be subject to Internal Revenue Code limitations. Capital loss carryovers expire in 2017.
19
Financial Highlights |
For a Share Outstanding Throughout the Years Ended October 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 | 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 | |||||||||||||
2015(3) | $10.15 | 0.03 | 0.82 | 0.85 | (0.06) | $10.94 | 8.38% | 1.25%(4) | 0.64%(4) | 91% | $97,801 | ||
2014 | $9.08 | 0.06 | 1.11 | 1.17 | (0.10) | $10.15 | 12.96% | 1.25% | 0.59% | 184% | $91,093 | ||
2013 | $6.90 | 0.06 | 2.25 | 2.31 | (0.13) | $9.08 | 34.11% | 1.25% | 0.80% | 158% | $88,256 | ||
2012 | $6.25 | 0.09 | 0.65 | 0.74 | (0.09) | $6.90 | 12.03% | 1.26% | 1.35% | 257% | $72,311 | ||
2011 | $5.68 | 0.05 | 0.53 | 0.58 | (0.01) | $6.25 | 10.16% | 1.25% | 0.82% | 280% | $72,851 | ||
2010 | $4.71 | —(5) | 0.97 | 0.97 | —(5) | $5.68 | 20.66% | 1.26% | (0.06)% | 260% | $78,441 | ||
Institutional Class | |||||||||||||
2015(3) | $10.36 | 0.04 | 0.84 | 0.88 | (0.08) | $11.16 | 8.52% | 1.05%(4) | 0.84%(4) | 91% | $2,713 | ||
2014 | $9.27 | 0.09 | 1.11 | 1.20 | (0.11) | $10.36 | 13.13% | 1.05% | 0.79% | 184% | $2,501 | ||
2013 | $7.03 | 0.07 | 2.31 | 2.38 | (0.14) | $9.27 | 34.41% | 1.05% | 1.00% | 158% | $317 | ||
2012 | $6.37 | 0.10 | 0.66 | 0.76 | (0.10) | $7.03 | 12.18% | 1.06% | 1.55% | 257% | $158 | ||
2011 | $5.78 | 0.06 | 0.55 | 0.61 | (0.02) | $6.37 | 10.55% | 1.05% | 1.02% | 280% | $169 | ||
2010 | $4.79 | 0.01 | 0.99 | 1.00 | (0.01) | $5.78 | 20.97% | 1.06% | 0.14% | 260% | $2,981 |
20
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) | Six months ended April 30, 2015 (unaudited). |
(4) | Annualized. |
(5) | Per-share amount was less than $0.005. |
See Notes to Financial Statements.
21
Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain IRAs are subject to federal income tax withholding, unless you elect not to have withholding apply. Tax will be withheld on the total amount withdrawn even though you may be receiving amounts that are not subject to withholding, such as nondeductible contributions. In such case, excess amounts of withholding could occur. You may adjust your withholding election so that a greater or lesser amount will be withheld.
If you don’t want us to withhold on this amount, you must notify us to not withhold the federal income tax. You may notify us in writing or in certain situations by telephone or through other electronic means. For systematic withdrawals, your withholding election will remain in effect until revoked or changed by filing a new election. You have the right to revoke your election at any time.
Remember, even if you elect not to have income tax withheld, you are liable for paying income tax on the taxable portion of your withdrawal. If you elect not to have income tax withheld or you don’t have enough income tax withheld, you may be responsible for payment of estimated tax. You may incur penalties under the estimated tax rules if your withholding and estimated tax payments are not sufficient. You can reduce or defer the income tax on a distribution by directly or indirectly rolling such distribution over to another IRA or eligible plan. You should consult your tax advisor for additional information.
State tax will be withheld if, at the time of your distribution, your address is within one of the mandatory withholding states and you have federal income tax withheld (or as otherwise required by state law). State taxes will be withheld from your distribution in accordance with the respective state rules.
Distributions you receive from 403(b), 457 and qualified plans are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
A description of the policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund is available without charge, upon request, by calling 1-800-345-2021. It is also available on the "About Us" page of American Century Investments’ website at americancentury.com and on the Securities and Exchange Commission’s website at sec.gov. Information regarding how the investment advisor voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the "About Us" page at americancentury.com. It is also available at sec.gov.
Quarterly Portfolio Disclosure
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-Q. The fund’s Forms N-Q are available on the SEC’s website at sec.gov, and may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The fund also makes its complete schedule of portfolio holdings for the most recent quarter of its fiscal year available on its
website at americancentury.com and, upon request, by calling 1-800-345-2021.
22
Notes |
23
Notes |
24
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Contact Us | americancentury.com | |
Automated Information Line | 1-800-345-8765 | |
Investor Services Representative | 1-800-345-2021 or 816-531-5575 | |
Investors Using Advisors | 1-800-378-9878 | |
Business, Not-For-Profit, Employer-Sponsored Retirement Plans | 1-800-345-3533 | |
Banks and Trust Companies, Broker-Dealers, Financial Professionals, Insurance Companies | 1-800-345-6488 | |
Telecommunications Relay Service for the Deaf | 711 | |
American Century Mutual Funds, Inc. | ||
Investment Advisor: American Century Investment Management, Inc. Kansas City, Missouri | ||
This report and the statements it contains are submitted for the general information of our shareholders. The report is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus. | ||
©2015 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-85690 1506 |
ITEM 2. CODE OF ETHICS.
Not applicable for semiannual report filings.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable for semiannual report filings.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable for semiannual report filings.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. INVESTMENTS.
(a) | The schedule of investments is included as part of the report to stockholders filed under Item 1 of this Form. |
(b) | Not applicable. |
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
During the reporting period, there were no material changes to the procedures by which shareholders may recommend nominees to the registrant’s board.
ITEM 11. CONTROLS AND PROCEDURES.
(a) | The registrant's principal executive officer and principal financial officer have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) are effective based on their evaluation of these controls and procedures as of a date within 90 days of the filing date of this report. |
(b) | There were no changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the registrant's second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant's internal control over financial reporting. |
ITEM 12. EXHIBITS.
(a)(1) | Not applicable for semiannual report filings. |
(a)(2) | Separate certifications by the registrant’s principal executive officer and principal financial officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 and Rule 30a-2(a) under the Investment Company Act of 1940, are filed and attached hereto as EX-99.CERT. |
(a)(3) | Not applicable. |
(b) | A certification by the registrant’s chief executive officer and chief financial officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, is furnished and attached hereto as EX- 99.906CERT. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Registrant: | American Century Mutual Funds, Inc. | ||
By: | /s/ Jonathan S. Thomas | ||
Name: | Jonathan S. Thomas | ||
Title: | President | ||
Date: | June 26, 2015 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By: | /s/ Jonathan S. Thomas | |
Name: | Jonathan S. Thomas | |
Title: | President | |
(principal executive officer) | ||
Date: | June 26, 2015 |
By: | /s/ C. Jean Wade | |
Name: | C. Jean Wade | |
Title: | Vice President, Treasurer, and | |
Chief Financial Officer | ||
(principal financial officer) | ||
Date: | June 26, 2015 |