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) | |||||||||||||||||||
JOHN PAK 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: | 04-30-2022 |
ITEM 1. REPORTS TO STOCKHOLDERS.
(a) Provided under separate cover.
![image8.jpg](https://capedge.com/proxy/N-CSRS/0000100334-22-000050/image8.jpg)
Semiannual Report | |||||
April 30, 2022 | |||||
Balanced Fund | |||||
Investor Class (TWBIX) | |||||
I Class (ABINX) | |||||
R5 Class (ABGNX) |
Table of Contents |
President’s Letter | |||||
Fund Characteristics | |||||
Shareholder Fee Example | |||||
Schedule of Investments | |||||
Statement of Assets and Liabilities | |||||
Statement of Operations | |||||
Statement of Changes in Net Assets | |||||
Notes to Financial Statements | |||||
Financial Highlights | |||||
Liquidity Risk Management Program | |||||
Additional Information |
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 |
![image30.jpg](https://capedge.com/proxy/N-CSRS/0000100334-22-000050/image30.jpg)
Dear Investor:
Thank you for reviewing this semiannual report for the period ended April 30, 2022. It provides a market overview (below), followed by a schedule of fund investments and other financial information. For additional investment insights, please visit americancentury.com.
Escalating Inflation, Sharp Volatility Hampered Investment Returns
Investors faced increasingly challenging market conditions as the reporting period progressed. From soaring inflation and rising interest rates to mounting geopolitical unrest and slowing growth, most asset classes struggled amid intense volatility.
Inflation was already at multiyear highs when the reporting period began. This was largely due to massive fiscal and monetary support, escalating energy prices, supply chain breakdowns and labor market shortages. Russia’s invasion of Ukraine in February sent commodity prices even higher, exacerbating existing inflationary pressures and further damaging global supply chains.
By period-end, inflation stood at a 40-year high in the U.S., a 30-year high in the U.K. and a record high in the eurozone. Most emerging markets also grappled with rising inflation. At the same time, global growth slowed dramatically.
In response to surging inflation, the Federal Reserve in March implemented its first rate hike in more than three years and ended its asset purchase program. The Bank of England executed a series of rate hikes, while European Central Bank officials announced their asset purchase program would end in the third quarter.
The combination of accelerating inflation, tighter monetary policy, geopolitical unrest and slowing economic growth fueled widespread and sharp market volatility. Global stock and bond returns plunged for the six-month period. Perceived inflation-fighting assets, including real estate investment trusts, generally fared much better than other securities.
Staying Disciplined in Uncertain Times
We expect market volatility to linger as investors navigate this complex backdrop. In addition, Russia’s invasion of Ukraine has further complicated a tense geopolitical environment. We will continue to monitor the evolving situation and its implications for our clients and investment exposure.
We appreciate your confidence in us during these extraordinary times. Our firm has a long history of helping clients weather unpredictable markets, and we’re confident we will continue to meet today’s challenges.
Sincerely,
![image27.jpg](https://capedge.com/proxy/N-CSRS/0000100334-22-000050/image27.jpg)
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
2
Fund Characteristics |
APRIL 30, 2022 | |||||
Types of Investments in Portfolio | % of net assets | ||||
Common Stocks | 59.6% | ||||
U.S. Treasury Securities | 17.4% | ||||
Corporate Bonds | 10.9% | ||||
U.S. Government Agency Mortgage-Backed Securities | 4.5% | ||||
Asset-Backed Securities | 2.8% | ||||
Collateralized Mortgage Obligations | 2.8% | ||||
Collateralized Loan Obligations | 2.3% | ||||
Commercial Mortgage-Backed Securities | 1.0% | ||||
Municipal Securities | 0.7% | ||||
U.S. Government Agency Securities | 0.3% | ||||
Sovereign Governments and Agencies | 0.1% | ||||
Exchange-Traded Funds | 0.1% | ||||
Bank Loan Obligations | 0.1% | ||||
Preferred Stocks | —* | ||||
Short-Term Investments | 0.6% | ||||
Other Assets and Liabilities | (3.2)% | ||||
*Category is less than 0.05% of total net assets. | |||||
Top Five Common Stocks Industries* | % of net assets | ||||
Software | 5.9% | ||||
Semiconductors and Semiconductor Equipment | 3.0% | ||||
Interactive Media and Services | 3.0% | ||||
Technology Hardware, Storage and Peripherals | 2.9% | ||||
Health Care Providers and Services | 2.8% |
*Exposure indicated excludes Exchange-Traded Funds. The Schedule of Investments provides additional information on the fund's portfolio holdings.
3
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, 2021 to April 30, 2022.
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 I Class shares of the American Century Diversified Bond Fund, in an American Century Investments account (i.e., not through a financial intermediary or employer-sponsored retirement plan account), American Century Investments may charge you a $25.00 annual 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 $25.00 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.
4
Beginning Account Value 11/1/21 | Ending Account Value 4/30/22 | Expenses Paid During Period(1) 11/1/21 - 4/30/22 | Annualized Expense Ratio(1) | |||||||||||
Actual | ||||||||||||||
Investor Class | $1,000 | $884.90 | $4.21 | 0.90% | ||||||||||
I Class | $1,000 | $885.80 | $3.27 | 0.70% | ||||||||||
R5 Class | $1,000 | $885.90 | $3.27 | 0.70% | ||||||||||
Hypothetical | ||||||||||||||
Investor Class | $1,000 | $1,020.33 | $4.51 | 0.90% | ||||||||||
I Class | $1,000 | $1,021.32 | $3.51 | 0.70% | ||||||||||
R5 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. Annualized expense ratio reflects actual expenses, including any applicable fee waivers or expense reimbursements and excluding any acquired fund fees and expenses.
5
Schedule of Investments |
APRIL 30, 2022 (UNAUDITED)
Shares/ Principal Amount | Value | |||||||
COMMON STOCKS — 59.6% | ||||||||
Aerospace and Defense — 0.7% | ||||||||
Lockheed Martin Corp. | 15,303 | $ | 6,612,732 | |||||
Air Freight and Logistics — 0.6% | ||||||||
United Parcel Service, Inc., Class B | 30,541 | 5,496,769 | ||||||
Auto Components — 0.5% | ||||||||
Aptiv PLC(1) | 41,735 | 4,440,604 | ||||||
Automobiles — 1.2% | ||||||||
Tesla, Inc.(1) | 12,561 | 10,937,616 | ||||||
Banks — 2.0% | ||||||||
Bank of America Corp. | 79,405 | 2,833,171 | ||||||
JPMorgan Chase & Co. | 72,025 | 8,596,904 | ||||||
Regions Financial Corp. | 352,942 | 7,312,958 | ||||||
18,743,033 | ||||||||
Beverages — 1.0% | ||||||||
PepsiCo, Inc. | 55,402 | 9,513,077 | ||||||
Biotechnology — 0.5% | ||||||||
Amgen, Inc. | 12,510 | 2,917,207 | ||||||
Vertex Pharmaceuticals, Inc.(1) | 6,094 | 1,665,003 | ||||||
4,582,210 | ||||||||
Building Products — 1.0% | ||||||||
Johnson Controls International PLC | 107,633 | 6,443,988 | ||||||
Masco Corp. | 49,448 | 2,605,415 | ||||||
9,049,403 | ||||||||
Capital Markets — 2.7% | ||||||||
Ameriprise Financial, Inc. | 13,962 | 3,706,771 | ||||||
BlackRock, Inc. | 6,658 | 4,159,119 | ||||||
Intercontinental Exchange, Inc. | 22,748 | 2,634,446 | ||||||
Morgan Stanley | 105,215 | 8,479,277 | ||||||
S&P Global, Inc. | 16,397 | 6,173,471 | ||||||
25,153,084 | ||||||||
Chemicals — 1.6% | ||||||||
Air Products and Chemicals, Inc. | 9,832 | 2,301,376 | ||||||
Ecolab, Inc. | 14,006 | 2,371,776 | ||||||
Linde PLC | 24,094 | 7,516,364 | ||||||
Sherwin-Williams Co. | 10,561 | 2,903,853 | ||||||
15,093,369 | ||||||||
Communications Equipment — 1.2% | ||||||||
Cisco Systems, Inc. | 228,248 | 11,179,587 | ||||||
Consumer Finance — 0.6% | ||||||||
American Express Co. | 33,861 | 5,915,855 | ||||||
Containers and Packaging — 0.4% | ||||||||
Ball Corp. | 43,086 | 3,496,860 | ||||||
Diversified Telecommunication Services — 0.5% | ||||||||
Verizon Communications, Inc. | 106,142 | 4,914,375 | ||||||
Electric Utilities — 1.1% | ||||||||
NextEra Energy, Inc. | 143,545 | 10,194,566 |
6
Shares/ Principal Amount | Value | |||||||
Electrical Equipment — 0.8% | ||||||||
Eaton Corp. PLC | 28,571 | $ | 4,143,366 | |||||
Generac Holdings, Inc.(1) | 2,055 | 450,826 | ||||||
Rockwell Automation, Inc. | 12,671 | 3,201,582 | ||||||
7,795,774 | ||||||||
Electronic Equipment, Instruments and Components — 1.2% | ||||||||
CDW Corp. | 27,680 | 4,516,823 | ||||||
Cognex Corp. | 34,565 | 2,337,631 | ||||||
Keysight Technologies, Inc.(1) | 31,871 | 4,470,545 | ||||||
11,324,999 | ||||||||
Energy Equipment and Services — 0.8% | ||||||||
Schlumberger NV | 205,261 | 8,007,232 | ||||||
Entertainment — 0.8% | ||||||||
Electronic Arts, Inc. | 18,741 | 2,212,375 | ||||||
Walt Disney Co.(1) | 51,812 | 5,783,774 | ||||||
7,996,149 | ||||||||
Equity Real Estate Investment Trusts (REITs) — 1.6% | ||||||||
Prologis, Inc. | 95,762 | 15,349,691 | ||||||
Food and Staples Retailing — 1.2% | ||||||||
Costco Wholesale Corp. | 7,568 | 4,024,057 | ||||||
Sysco Corp. | 82,122 | 7,019,789 | ||||||
11,043,846 | ||||||||
Food Products — 0.5% | ||||||||
Mondelez International, Inc., Class A | 72,006 | 4,642,947 | ||||||
Vital Farms, Inc.(1) | 25,270 | 290,605 | ||||||
4,933,552 | ||||||||
Health Care Equipment and Supplies — 1.2% | ||||||||
Edwards Lifesciences Corp.(1) | 55,258 | 5,845,191 | ||||||
Medtronic PLC | 40,386 | 4,214,683 | ||||||
ResMed, Inc. | 5,679 | 1,135,630 | ||||||
11,195,504 | ||||||||
Health Care Providers and Services — 2.8% | ||||||||
Cigna Corp. | 30,641 | 7,561,586 | ||||||
CVS Health Corp. | 67,307 | 6,470,222 | ||||||
Humana, Inc. | 6,257 | 2,781,612 | ||||||
UnitedHealth Group, Inc. | 19,986 | 10,163,880 | ||||||
26,977,300 | ||||||||
Hotels, Restaurants and Leisure — 1.1% | ||||||||
Booking Holdings, Inc.(1) | 1,991 | 4,400,727 | ||||||
Chipotle Mexican Grill, Inc.(1) | 855 | 1,244,547 | ||||||
Expedia Group, Inc.(1) | 29,669 | 5,184,658 | ||||||
10,829,932 | ||||||||
Household Products — 1.0% | ||||||||
Colgate-Palmolive Co. | 33,592 | 2,588,264 | ||||||
Procter & Gamble Co. | 45,651 | 7,329,268 | ||||||
9,917,532 | ||||||||
Industrial Conglomerates — 0.7% | ||||||||
Honeywell International, Inc. | 35,513 | 6,872,121 | ||||||
Insurance — 1.1% | ||||||||
Marsh & McLennan Cos., Inc. | 23,475 | 3,795,907 | ||||||
Prudential Financial, Inc. | 28,200 | 3,059,982 |
7
Shares/ Principal Amount | Value | |||||||
Travelers Cos., Inc. | 22,629 | $ | 3,870,917 | |||||
10,726,806 | ||||||||
Interactive Media and Services — 3.0% | ||||||||
Alphabet, Inc., Class A(1) | 11,036 | 25,186,249 | ||||||
Alphabet, Inc., Class C(1) | 1,404 | 3,228,259 | ||||||
28,414,508 | ||||||||
Internet and Direct Marketing Retail — 1.9% | ||||||||
Amazon.com, Inc.(1) | 7,143 | 17,754,855 | ||||||
IT Services — 2.6% | ||||||||
Accenture PLC, Class A | 22,297 | 6,697,127 | ||||||
Mastercard, Inc., Class A | 22,457 | 8,160,425 | ||||||
PayPal Holdings, Inc.(1) | 10,350 | 910,075 | ||||||
Visa, Inc., Class A | 39,963 | 8,517,314 | ||||||
24,284,941 | ||||||||
Life Sciences Tools and Services — 1.2% | ||||||||
Agilent Technologies, Inc. | 43,298 | 5,164,152 | ||||||
Thermo Fisher Scientific, Inc. | 10,979 | 6,070,509 | ||||||
11,234,661 | ||||||||
Machinery — 1.4% | ||||||||
Cummins, Inc. | 20,947 | 3,962,963 | ||||||
Deere & Co. | 6,110 | 2,306,831 | ||||||
Parker-Hannifin Corp. | 18,653 | 5,051,605 | ||||||
Xylem, Inc. | 27,522 | 2,215,521 | ||||||
13,536,920 | ||||||||
Media — 0.3% | ||||||||
Comcast Corp., Class A | 67,363 | 2,678,353 | ||||||
Multiline Retail — 0.3% | ||||||||
Target Corp. | 14,139 | 3,232,882 | ||||||
Oil, Gas and Consumable Fuels — 1.1% | ||||||||
ConocoPhillips | 111,147 | 10,616,761 | ||||||
Personal Products — 0.3% | ||||||||
Estee Lauder Cos., Inc., Class A | 9,331 | 2,463,944 | ||||||
Pharmaceuticals — 2.3% | ||||||||
Bristol-Myers Squibb Co. | 98,522 | 7,415,751 | ||||||
Merck & Co., Inc. | 62,746 | 5,564,942 | ||||||
Novo Nordisk A/S, B Shares | 32,267 | 3,685,738 | ||||||
Zoetis, Inc. | 28,359 | 5,026,633 | ||||||
21,693,064 | ||||||||
Road and Rail — 0.7% | ||||||||
Norfolk Southern Corp. | 14,361 | 3,703,415 | ||||||
Union Pacific Corp. | 13,257 | 3,105,982 | ||||||
6,809,397 | ||||||||
Semiconductors and Semiconductor Equipment — 3.0% | ||||||||
Advanced Micro Devices, Inc.(1) | 33,769 | 2,887,925 | ||||||
Analog Devices, Inc. | 38,893 | 6,004,301 | ||||||
Applied Materials, Inc. | 43,285 | 4,776,500 | ||||||
ASML Holding NV | 8,155 | 4,628,276 | ||||||
NVIDIA Corp. | 55,021 | 10,204,745 | ||||||
28,501,747 | ||||||||
Software — 5.9% | ||||||||
Adobe, Inc.(1) | 9,920 | 3,927,824 |
8
Shares/ Principal Amount | Value | |||||||
Microsoft Corp. | 167,181 | $ | 46,396,071 | |||||
Salesforce, Inc.(1) | 16,993 | 2,989,748 | ||||||
ServiceNow, Inc.(1) | 3,437 | 1,643,230 | ||||||
Workday, Inc., Class A(1) | 6,793 | 1,404,113 | ||||||
56,360,986 | ||||||||
Specialty Retail — 1.6% | ||||||||
Home Depot, Inc. | 32,449 | 9,747,679 | ||||||
TJX Cos., Inc. | 64,099 | 3,927,987 | ||||||
Tractor Supply Co. | 9,277 | 1,868,852 | ||||||
15,544,518 | ||||||||
Technology Hardware, Storage and Peripherals — 2.9% | ||||||||
Apple, Inc. | 173,650 | 27,375,922 | ||||||
Textiles, Apparel and Luxury Goods — 0.7% | ||||||||
Deckers Outdoor Corp.(1) | 5,554 | 1,475,975 | ||||||
NIKE, Inc., Class B | 41,114 | 5,126,916 | ||||||
6,602,891 | ||||||||
TOTAL COMMON STOCKS (Cost $506,295,352) | 565,399,928 | |||||||
U.S. TREASURY SECURITIES — 17.4% | ||||||||
U.S. Treasury Bonds, 5.00%, 5/15/37 | $ | 200,000 | 250,781 | |||||
U.S. Treasury Bonds, 4.625%, 2/15/40 | 1,300,000 | 1,583,537 | ||||||
U.S. Treasury Bonds, 1.375%, 11/15/40 | 500,000 | 374,346 | ||||||
U.S. Treasury Bonds, 1.875%, 2/15/41 | 3,000,000 | 2,450,273 | ||||||
U.S. Treasury Bonds, 2.25%, 5/15/41 | 800,000 | 693,484 | ||||||
U.S. Treasury Bonds, 4.375%, 5/15/41 | 1,400,000 | 1,647,543 | ||||||
U.S. Treasury Bonds, 2.00%, 11/15/41 | 2,600,000 | 2,152,719 | ||||||
U.S. Treasury Bonds, 3.125%, 11/15/41 | 1,000,000 | 993,770 | ||||||
U.S. Treasury Bonds, 2.375%, 2/15/42 | 2,400,000 | 2,121,375 | ||||||
U.S. Treasury Bonds, 3.00%, 5/15/42 | 1,400,000 | 1,363,961 | ||||||
U.S. Treasury Bonds, 2.75%, 11/15/42 | 2,000,000 | 1,863,672 | ||||||
U.S. Treasury Bonds, 2.875%, 5/15/43 | 1,300,000 | 1,233,527 | ||||||
U.S. Treasury Bonds, 3.125%, 8/15/44 | 500,000 | 493,848 | ||||||
U.S. Treasury Bonds, 3.00%, 11/15/44 | 600,000 | 580,266 | ||||||
U.S. Treasury Bonds, 2.50%, 2/15/45(2) | 1,500,000 | 1,329,082 | ||||||
U.S. Treasury Bonds, 2.75%, 8/15/47 | 200,000 | 186,953 | ||||||
U.S. Treasury Bonds, 3.375%, 11/15/48(2) | 1,460,000 | 1,545,119 | ||||||
U.S. Treasury Bonds, 2.25%, 8/15/49 | 1,500,000 | 1,282,559 | ||||||
U.S. Treasury Bonds, 2.375%, 11/15/49 | 2,400,000 | 2,111,812 | ||||||
U.S. Treasury Bonds, 2.00%, 2/15/50 | 700,000 | 565,305 | ||||||
U.S. Treasury Bonds, 1.875%, 2/15/51 | 1,000,000 | 784,023 | ||||||
U.S. Treasury Bonds, 2.375%, 5/15/51 | 2,800,000 | 2,465,969 | ||||||
U.S. Treasury Bonds, 2.00%, 8/15/51 | 5,000,000 | 4,041,016 | ||||||
U.S. Treasury Bonds, 1.875%, 11/15/51 | 300,000 | 235,383 | ||||||
U.S. Treasury Bonds, 2.25%, 2/15/52 | 4,500,000 | 3,865,078 | ||||||
U.S. Treasury Inflation Indexed Notes, 0.125%, 10/15/25 | 2,187,840 | 2,264,885 | ||||||
U.S. Treasury Notes, 0.25%, 4/15/23 | 400,000 | 392,987 | ||||||
U.S. Treasury Notes, 0.25%, 6/15/23 | 500,000 | 489,092 | ||||||
U.S. Treasury Notes, 0.125%, 8/31/23 | 2,000,000 | 1,939,297 | ||||||
U.S. Treasury Notes, 2.875%, 11/30/23 | 1,900,000 | 1,908,980 | ||||||
U.S. Treasury Notes, 1.50%, 2/29/24 | 2,000,000 | 1,958,516 | ||||||
U.S. Treasury Notes, 0.25%, 3/15/24 | 6,400,000 | 6,118,000 | ||||||
U.S. Treasury Notes, 0.375%, 4/15/24 | 8,500,000 | 8,124,805 |
9
Shares/ Principal Amount | Value | |||||||
U.S. Treasury Notes, 0.75%, 11/15/24 | $ | 5,500,000 | $ | 5,217,051 | ||||
U.S. Treasury Notes, 1.00%, 12/15/24 | 13,500,000 | 12,871,406 | ||||||
U.S. Treasury Notes, 1.125%, 1/15/25 | 1,500,000 | 1,431,914 | ||||||
U.S. Treasury Notes, 1.50%, 2/15/25 | 11,500,000 | 11,072,344 | ||||||
U.S. Treasury Notes, 1.125%, 2/28/25 | 3,300,000 | 3,144,281 | ||||||
U.S. Treasury Notes, 1.75%, 3/15/25 | 11,800,000 | 11,432,172 | ||||||
U.S. Treasury Notes, 0.25%, 5/31/25 | 1,000,000 | 922,109 | ||||||
U.S. Treasury Notes, 0.25%, 8/31/25 | 4,000,000 | 3,661,875 | ||||||
U.S. Treasury Notes, 2.625%, 12/31/25 | 200,000 | 197,863 | ||||||
U.S. Treasury Notes, 0.50%, 2/28/26 | 1,000,000 | 911,680 | ||||||
U.S. Treasury Notes, 1.375%, 8/31/26 | 1,400,000 | 1,310,914 | ||||||
U.S. Treasury Notes, 1.625%, 10/31/26 | 100,000 | 94,426 | ||||||
U.S. Treasury Notes, 1.75%, 12/31/26 | 700,000 | 663,660 | ||||||
U.S. Treasury Notes, 1.125%, 2/28/27 | 1,900,000 | 1,745,254 | ||||||
U.S. Treasury Notes, 1.875%, 2/28/27 | 13,000,000 | 12,380,469 | ||||||
U.S. Treasury Notes, 0.625%, 3/31/27 | 4,000,000 | 3,578,906 | ||||||
U.S. Treasury Notes, 2.50%, 3/31/27 | 1,500,000 | 1,470,000 | ||||||
U.S. Treasury Notes, 0.50%, 6/30/27 | 500,000 | 441,523 | ||||||
U.S. Treasury Notes, 0.625%, 12/31/27 | 3,500,000 | 3,075,352 | ||||||
U.S. Treasury Notes, 1.125%, 2/29/28 | 1,000,000 | 902,734 | ||||||
U.S. Treasury Notes, 1.25%, 3/31/28 | 1,700,000 | 1,542,086 | ||||||
U.S. Treasury Notes, 1.25%, 4/30/28 | 5,050,000 | 4,575,576 | ||||||
U.S. Treasury Notes, 1.50%, 11/30/28 | 1,500,000 | 1,368,809 | ||||||
U.S. Treasury Notes, 1.875%, 2/28/29 | 12,000,000 | 11,208,750 | ||||||
U.S. Treasury Notes, 2.375%, 3/31/29 | 5,100,000 | 4,917,516 | ||||||
U.S. Treasury Notes, 1.875%, 2/15/32 | 6,000,000 | 5,479,687 | ||||||
TOTAL U.S. TREASURY SECURITIES (Cost $175,484,325) | 165,030,320 | |||||||
CORPORATE BONDS — 10.9% | ||||||||
Aerospace and Defense — 0.1% | ||||||||
Boeing Co., 5.15%, 5/1/30 | 340,000 | 338,022 | ||||||
Boeing Co., 5.81%, 5/1/50 | 230,000 | 230,447 | ||||||
Raytheon Technologies Corp., 4.125%, 11/16/28 | 570,000 | 570,952 | ||||||
1,139,421 | ||||||||
Air Freight and Logistics† | ||||||||
GXO Logistics, Inc., 2.65%, 7/15/31(3) | 335,000 | 275,003 | ||||||
Airlines — 0.1% | ||||||||
British Airways Pass Through Trust, Series 2021-1, Class A, 2.90%, 9/15/36(3) | 390,739 | 350,332 | ||||||
Delta Air Lines, Inc. / SkyMiles IP Ltd., 4.75%, 10/20/28(3) | 568,000 | 562,183 | ||||||
912,515 | ||||||||
Auto Components† | ||||||||
Aptiv PLC, 3.10%, 12/1/51 | 290,000 | 199,615 | ||||||
Automobiles — 0.3% | ||||||||
Ford Motor Credit Co. LLC, 3.10%, 5/4/23 | 700,000 | 692,650 | ||||||
General Motors Co., 5.15%, 4/1/38 | 370,000 | 349,178 | ||||||
General Motors Financial Co., Inc., 2.75%, 6/20/25 | 780,000 | 748,430 | ||||||
General Motors Financial Co., Inc., 2.40%, 10/15/28 | 315,000 | 270,006 | ||||||
Toyota Motor Credit Corp., 1.90%, 4/6/28 | 420,000 | 379,623 | ||||||
2,439,887 | ||||||||
Banks — 1.5% | ||||||||
Banco Santander SA, 5.18%, 11/19/25 | 400,000 | 409,546 |
10
Shares/ Principal Amount | Value | |||||||
Banco Santander SA, VRN, 1.72%, 9/14/27 | $ | 200,000 | $ | 176,184 | ||||
Banco Santander SA, VRN, 4.18%, 3/24/28 | 200,000 | 194,272 | ||||||
Bank of America Corp., VRN, 3.38%, 4/2/26 | 400,000 | 391,491 | ||||||
Bank of America Corp., VRN, 2.55%, 2/4/28 | 51,000 | 47,168 | ||||||
Bank of America Corp., VRN, 3.42%, 12/20/28 | 1,512,000 | 1,433,009 | ||||||
Bank of America Corp., VRN, 2.88%, 10/22/30 | 1,072,000 | 959,943 | ||||||
Bank of America Corp., VRN, 2.48%, 9/21/36 | 665,000 | 533,099 | ||||||
Bank of Ireland Group PLC, VRN, 2.03%, 9/30/27(3) | 329,000 | 290,667 | ||||||
BNP Paribas SA, VRN, 4.375%, 3/1/33(3) | 168,000 | 159,283 | ||||||
Citigroup, Inc., VRN, 0.78%, 10/30/24 | 89,000 | 85,222 | ||||||
Citigroup, Inc., VRN, 2.01%, 1/25/26 | 684,000 | 646,933 | ||||||
Citigroup, Inc., VRN, 3.07%, 2/24/28 | 467,000 | 439,314 | ||||||
Citigroup, Inc., VRN, 3.52%, 10/27/28 | 709,000 | 675,675 | ||||||
Commonwealth Bank of Australia, VRN, 3.61%, 9/12/34(3) | 440,000 | 398,505 | ||||||
Fifth Third Bancorp, VRN, 4.06%, 4/25/28 | 294,000 | 292,141 | ||||||
Fifth Third Bancorp, VRN, 4.34%, 4/25/33 | 95,000 | 94,741 | ||||||
FNB Corp., 2.20%, 2/24/23 | 460,000 | 456,156 | ||||||
HSBC Holdings PLC, VRN, 0.73%, 8/17/24 | 320,000 | 308,166 | ||||||
HSBC Holdings PLC, VRN, 3.00%, 3/10/26 | 325,000 | 313,297 | ||||||
HSBC Holdings PLC, VRN, 2.80%, 5/24/32 | 280,000 | 236,246 | ||||||
JPMorgan Chase & Co., VRN, 1.58%, 4/22/27 | 315,000 | 285,166 | ||||||
JPMorgan Chase & Co., VRN, 2.95%, 2/24/28 | 738,000 | 695,678 | ||||||
JPMorgan Chase & Co., VRN, 2.07%, 6/1/29 | 642,000 | 562,866 | ||||||
JPMorgan Chase & Co., VRN, 2.52%, 4/22/31 | 420,000 | 365,357 | ||||||
JPMorgan Chase & Co., VRN, 4.59%, 4/26/33 | 213,000 | 214,164 | ||||||
National Australia Bank Ltd., 2.33%, 8/21/30(3) | 278,000 | 231,228 | ||||||
Societe Generale SA, 5.00%, 1/17/24(3) | 565,000 | 573,481 | ||||||
Societe Generale SA, VRN, 1.79%, 6/9/27(3) | 300,000 | 265,106 | ||||||
Societe Generale SA, VRN, 4.03%, 1/21/43(3) | 200,000 | 154,240 | ||||||
Swedbank AB, 3.36%, 4/4/25(3) | 200,000 | 198,653 | ||||||
US Bancorp, VRN, 2.49%, 11/3/36 | 415,000 | 349,278 | ||||||
Wells Fargo & Co., VRN, 3.53%, 3/24/28 | 334,000 | 321,037 | ||||||
Wells Fargo & Co., VRN, 3.07%, 4/30/41 | 605,000 | 487,740 | ||||||
Wells Fargo & Co., VRN, 4.61%, 4/25/53 | 171,000 | 168,678 | ||||||
Westpac Banking Corp., VRN, 2.89%, 2/4/30 | 205,000 | 195,714 | ||||||
Westpac Banking Corp., VRN, 3.02%, 11/18/36 | 225,000 | 186,723 | ||||||
13,796,167 | ||||||||
Beverages — 0.1% | ||||||||
Anheuser-Busch Cos. LLC / Anheuser-Busch InBev Worldwide, Inc., 4.90%, 2/1/46 | 500,000 | 493,583 | ||||||
Anheuser-Busch InBev Worldwide, Inc., 4.75%, 1/23/29 | 630,000 | 649,026 | ||||||
Keurig Dr Pepper, Inc., 4.05%, 4/15/32 | 175,000 | 167,699 | ||||||
1,310,308 | ||||||||
Biotechnology — 0.1% | ||||||||
AbbVie, Inc., 3.20%, 11/21/29 | 440,000 | 410,155 | ||||||
AbbVie, Inc., 4.40%, 11/6/42 | 240,000 | 228,149 | ||||||
Amgen, Inc., 1.65%, 8/15/28 | 540,000 | 471,384 | ||||||
CSL Finance PLC, 4.25%, 4/27/32(3) | 257,000 | 255,095 | ||||||
1,364,783 | ||||||||
Building Products† | ||||||||
Fortune Brands Home & Security, Inc., 4.50%, 3/25/52 | 180,000 | 153,393 |
11
Shares/ Principal Amount | Value | |||||||
Capital Markets — 1.4% | ||||||||
Bain Capital Specialty Finance, Inc., 2.55%, 10/13/26 | $ | 601,000 | $ | 529,338 | ||||
Blackstone Private Credit Fund, 3.25%, 3/15/27(3) | 356,000 | 319,653 | ||||||
Blackstone Secured Lending Fund, 2.85%, 9/30/28(3) | 285,000 | 239,685 | ||||||
Blue Owl Finance LLC, 3.125%, 6/10/31(3) | 85,000 | 68,207 | ||||||
Blue Owl Finance LLC, 4.125%, 10/7/51(3) | 182,000 | 128,101 | ||||||
Charles Schwab Corp., 2.45%, 3/3/27 | 145,000 | 136,568 | ||||||
Coinbase Global, Inc., 3.375%, 10/1/28(3) | 99,000 | 77,043 | ||||||
Deutsche Bank AG, VRN, 3.96%, 11/26/25 | 625,000 | 616,550 | ||||||
Deutsche Bank AG, VRN, 2.31%, 11/16/27 | 264,000 | 233,758 | ||||||
Deutsche Bank AG, VRN, 4.30%, 5/24/28 | 200,000 | 196,262 | ||||||
FS KKR Capital Corp., 4.25%, 2/14/25(3) | 121,000 | 116,386 | ||||||
FS KKR Capital Corp., 3.125%, 10/12/28 | 240,000 | 209,284 | ||||||
Goldman Sachs Group, Inc., VRN, 1.76%, 1/24/25 | 1,000,000 | 966,228 | ||||||
Goldman Sachs Group, Inc., VRN, 1.95%, 10/21/27 | 1,713,000 | 1,540,351 | ||||||
Goldman Sachs Group, Inc., VRN, 3.81%, 4/23/29 | 320,000 | 307,598 | ||||||
Golub Capital BDC, Inc., 2.50%, 8/24/26 | 168,000 | 149,930 | ||||||
Hercules Capital, Inc., 2.625%, 9/16/26 | 303,000 | 273,121 | ||||||
Hercules Capital, Inc., 3.375%, 1/20/27 | 207,000 | 190,769 | ||||||
Main Street Capital Corp., 3.00%, 7/14/26 | 246,000 | 224,100 | ||||||
Morgan Stanley, VRN, 0.53%, 1/25/24 | 1,163,000 | 1,139,075 | ||||||
Morgan Stanley, VRN, 1.16%, 10/21/25 | 699,000 | 653,074 | ||||||
Morgan Stanley, VRN, 2.63%, 2/18/26 | 999,000 | 962,113 | ||||||
Morgan Stanley, VRN, 1.93%, 4/28/32 | 1,410,000 | 1,137,057 | ||||||
Morgan Stanley, VRN, 2.48%, 9/16/36 | 311,000 | 249,116 | ||||||
Owl Rock Capital Corp., 3.40%, 7/15/26 | 124,000 | 114,506 | ||||||
Owl Rock Capital Corp., 2.625%, 1/15/27 | 199,000 | 175,629 | ||||||
Owl Rock Core Income Corp., 5.50%, 3/21/25(3) | 40,000 | 39,598 | ||||||
Owl Rock Core Income Corp., 3.125%, 9/23/26(3) | 575,000 | 512,358 | ||||||
Owl Rock Technology Finance Corp., 6.75%, 6/30/25(3) | 334,000 | 341,931 | ||||||
Owl Rock Technology Finance Corp., 4.75%, 12/15/25(3) | 72,000 | 69,861 | ||||||
Owl Rock Technology Finance Corp., 2.50%, 1/15/27 | 317,000 | 279,174 | ||||||
Prospect Capital Corp., 3.71%, 1/22/26 | 277,000 | 257,318 | ||||||
Prospect Capital Corp., 3.44%, 10/15/28 | 147,000 | 122,627 | ||||||
UBS Group AG, VRN, 1.49%, 8/10/27(3) | 425,000 | 377,507 | ||||||
12,953,876 | ||||||||
Chemicals — 0.1% | ||||||||
CF Industries, Inc., 5.15%, 3/15/34 | 330,000 | 341,746 | ||||||
CF Industries, Inc., 4.95%, 6/1/43 | 240,000 | 232,878 | ||||||
574,624 | ||||||||
Commercial Services and Supplies — 0.1% | ||||||||
Republic Services, Inc., 2.30%, 3/1/30 | 358,000 | 313,291 | ||||||
Waste Connections, Inc., 3.20%, 6/1/32 | 162,000 | 147,328 | ||||||
Waste Connections, Inc., 2.95%, 1/15/52 | 301,000 | 224,558 | ||||||
Waste Management, Inc., 2.50%, 11/15/50 | 150,000 | 107,281 | ||||||
792,458 | ||||||||
Construction and Engineering† | ||||||||
Quanta Services, Inc., 2.35%, 1/15/32 | 465,000 | 379,338 | ||||||
Construction Materials — 0.1% | ||||||||
Eagle Materials, Inc., 2.50%, 7/1/31 | 310,000 | 262,601 | ||||||
Martin Marietta Materials, Inc., 2.40%, 7/15/31 | 350,000 | 295,630 | ||||||
558,231 |
12
Shares/ Principal Amount | Value | |||||||
Consumer Finance — 0.2% | ||||||||
AerCap Ireland Capital DAC / AerCap Global Aviation Trust, 3.00%, 10/29/28 | $ | 308,000 | $ | 268,132 | ||||
AerCap Ireland Capital DAC / AerCap Global Aviation Trust, 3.40%, 10/29/33 | 176,000 | 144,610 | ||||||
AerCap Ireland Capital DAC / AerCap Global Aviation Trust, 3.85%, 10/29/41 | 154,000 | 119,211 | ||||||
Avolon Holdings Funding Ltd., 4.25%, 4/15/26(3) | 258,000 | 247,706 | ||||||
Avolon Holdings Funding Ltd., 4.375%, 5/1/26(3) | 14,000 | 13,498 | ||||||
Avolon Holdings Funding Ltd., 2.53%, 11/18/27(3) | 335,000 | 288,606 | ||||||
Avolon Holdings Funding Ltd., 2.75%, 2/21/28(3) | 409,000 | 352,466 | ||||||
SLM Corp., 3.125%, 11/2/26 | 442,000 | 404,430 | ||||||
1,838,659 | ||||||||
Containers and Packaging — 0.1% | ||||||||
Sonoco Products Co., 2.25%, 2/1/27 | 447,000 | 415,513 | ||||||
WRKCo, Inc., 3.00%, 9/15/24 | 201,000 | 198,851 | ||||||
614,364 | ||||||||
Diversified Consumer Services — 0.1% | ||||||||
Novant Health, Inc., 3.17%, 11/1/51 | 245,000 | 197,666 | ||||||
Pepperdine University, 3.30%, 12/1/59 | 355,000 | 292,202 | ||||||
489,868 | ||||||||
Diversified Financial Services — 0.2% | ||||||||
Antares Holdings LP, 2.75%, 1/15/27(3) | 256,000 | 219,522 | ||||||
Block Financial LLC, 3.875%, 8/15/30 | 456,000 | 424,157 | ||||||
Corebridge Financial, Inc., 3.85%, 4/5/29(3) | 226,000 | 216,153 | ||||||
Corebridge Financial, Inc., 4.35%, 4/5/42(3) | 104,000 | 94,187 | ||||||
GE Capital International Funding Co. Unlimited Co., 4.42%, 11/15/35 | 600,000 | 587,091 | ||||||
PG&E Energy Recovery Funding LLC, 2.82%, 7/15/48 | 775,000 | 631,063 | ||||||
2,172,173 | ||||||||
Diversified Telecommunication Services — 0.6% | ||||||||
AT&T, Inc., 4.35%, 3/1/29 | 875,000 | 884,275 | ||||||
AT&T, Inc., 5.25%, 3/1/37 | 793,000 | 842,687 | ||||||
AT&T, Inc., 4.90%, 8/15/37 | 365,000 | 369,179 | ||||||
AT&T, Inc., 5.15%, 3/15/42 | 460,000 | 471,318 | ||||||
AT&T, Inc., 4.80%, 6/15/44 | 94,000 | 90,397 | ||||||
AT&T, Inc., 4.55%, 3/9/49 | 410,000 | 392,652 | ||||||
Ooredoo International Finance Ltd., 2.625%, 4/8/31(3) | 550,000 | 495,221 | ||||||
Telefonica Emisiones SA, 4.90%, 3/6/48 | 700,000 | 644,025 | ||||||
Verizon Communications, Inc., 4.33%, 9/21/28 | 333,000 | 335,432 | ||||||
Verizon Communications, Inc., 1.75%, 1/20/31 | 445,000 | 363,735 | ||||||
Verizon Communications, Inc., 3.40%, 3/22/41 | 254,000 | 213,917 | ||||||
Verizon Communications, Inc., 4.86%, 8/21/46 | 235,000 | 237,298 | ||||||
5,340,136 | ||||||||
Electric Utilities — 0.6% | ||||||||
AEP Texas, Inc., 2.10%, 7/1/30 | 370,000 | 313,053 | ||||||
Alfa Desarrollo SpA, 4.55%, 9/27/51(3) | 99,730 | 78,351 | ||||||
Baltimore Gas and Electric Co., 2.25%, 6/15/31 | 237,000 | 204,094 | ||||||
Comision Federal de Electricidad, 4.68%, 2/9/51(3) | 550,000 | 393,041 | ||||||
Commonwealth Edison Co., 3.20%, 11/15/49 | 355,000 | 288,198 | ||||||
Duke Energy Carolinas LLC, 2.55%, 4/15/31 | 154,000 | 136,729 | ||||||
Duke Energy Corp., 2.55%, 6/15/31 | 180,000 | 153,763 | ||||||
Duke Energy Florida LLC, 1.75%, 6/15/30 | 370,000 | 312,591 |
13
Shares/ Principal Amount | Value | |||||||
Duke Energy Florida LLC, 3.85%, 11/15/42 | $ | 220,000 | $ | 196,358 | ||||
Duke Energy Progress LLC, 2.00%, 8/15/31 | 440,000 | 372,565 | ||||||
Duke Energy Progress LLC, 4.15%, 12/1/44 | 335,000 | 313,504 | ||||||
Entergy Arkansas LLC, 2.65%, 6/15/51 | 180,000 | 130,232 | ||||||
Exelon Corp., 4.45%, 4/15/46 | 150,000 | 140,556 | ||||||
Exelon Corp., 4.10%, 3/15/52(3) | 80,000 | 71,181 | ||||||
Florida Power & Light Co., 2.45%, 2/3/32 | 231,000 | 204,055 | ||||||
Florida Power & Light Co., 4.125%, 2/1/42 | 169,000 | 163,836 | ||||||
Indiana Michigan Power Co., 3.25%, 5/1/51 | 157,000 | 123,779 | ||||||
MidAmerican Energy Co., 4.40%, 10/15/44 | 290,000 | 283,070 | ||||||
Northern States Power Co., 3.20%, 4/1/52 | 240,000 | 200,128 | ||||||
Pacific Gas and Electric Co., 4.20%, 6/1/41 | 155,000 | 122,764 | ||||||
PacifiCorp, 3.30%, 3/15/51 | 310,000 | 253,628 | ||||||
Public Service Co. of Colorado, 1.875%, 6/15/31 | 312,000 | 263,611 | ||||||
Public Service Electric and Gas Co., 3.10%, 3/15/32 | 234,000 | 218,308 | ||||||
Southern Co. Gas Capital Corp., 1.75%, 1/15/31 | 360,000 | 289,840 | ||||||
Union Electric Co., 3.90%, 4/1/52 | 238,000 | 216,939 | ||||||
Xcel Energy, Inc., 3.40%, 6/1/30 | 330,000 | 309,128 | ||||||
5,753,302 | ||||||||
Energy Equipment and Services† | ||||||||
Schlumberger Investment SA, 2.65%, 6/26/30 | 340,000 | 304,302 | ||||||
Entertainment — 0.2% | ||||||||
Magallanes, Inc., 3.76%, 3/15/27(3) | 248,000 | 240,153 | ||||||
Magallanes, Inc., 5.05%, 3/15/42(3) | 158,000 | 144,220 | ||||||
Magallanes, Inc., 5.14%, 3/15/52(3) | 342,000 | 305,534 | ||||||
Netflix, Inc., 3.625%, 6/15/25(3) | 83,000 | 81,220 | ||||||
Netflix, Inc., 4.875%, 4/15/28 | 702,000 | 688,255 | ||||||
Netflix, Inc., 5.875%, 11/15/28 | 175,000 | 180,688 | ||||||
Take-Two Interactive Software, Inc., 4.00%, 4/14/32 | 194,000 | 184,881 | ||||||
1,824,951 | ||||||||
Equity Real Estate Investment Trusts (REITs) — 0.7% | ||||||||
American Tower Corp., 3.95%, 3/15/29 | 75,000 | 71,403 | ||||||
American Tower Corp., 4.05%, 3/15/32 | 173,000 | 162,447 | ||||||
Broadstone Net Lease LLC, 2.60%, 9/15/31 | 175,000 | 147,068 | ||||||
Corporate Office Properties LP, 2.00%, 1/15/29 | 345,000 | 288,269 | ||||||
EPR Properties, 4.75%, 12/15/26 | 228,000 | 223,956 | ||||||
EPR Properties, 4.95%, 4/15/28 | 635,000 | 611,564 | ||||||
EPR Properties, 3.60%, 11/15/31 | 171,000 | 144,997 | ||||||
GLP Capital LP / GLP Financing II, Inc., 5.375%, 4/15/26 | 420,000 | 428,937 | ||||||
LXP Industrial Trust, 2.375%, 10/1/31 | 465,000 | 377,839 | ||||||
National Health Investors, Inc., 3.00%, 2/1/31 | 795,000 | 651,960 | ||||||
National Retail Properties, Inc., 4.80%, 10/15/48 | 270,000 | 267,201 | ||||||
Office Properties Income Trust, 2.40%, 2/1/27 | 354,000 | 306,503 | ||||||
Phillips Edison Grocery Center Operating Partnership I LP, 2.625%, 11/15/31 | 223,000 | 184,410 | ||||||
Piedmont Operating Partnership LP, 2.75%, 4/1/32 | 203,000 | 164,821 | ||||||
Rexford Industrial Realty LP, 2.15%, 9/1/31 | 454,000 | 372,441 | ||||||
Sabra Health Care LP, 3.20%, 12/1/31 | 420,000 | 352,780 | ||||||
STORE Capital Corp., 4.625%, 3/15/29 | 163,000 | 162,512 | ||||||
STORE Capital Corp., 2.70%, 12/1/31 | 687,000 | 572,580 | ||||||
Tanger Properties LP, 2.75%, 9/1/31 | 866,000 | 705,931 | ||||||
6,197,619 |
14
Shares/ Principal Amount | Value | |||||||
Food and Staples Retailing — 0.1% | ||||||||
Sysco Corp., 5.95%, 4/1/30 | $ | 464,000 | $ | 506,676 | ||||
Food Products — 0.1% | ||||||||
JDE Peet's NV, 2.25%, 9/24/31(3) | 475,000 | 382,802 | ||||||
Kraft Heinz Foods Co., 5.00%, 6/4/42 | 379,000 | 365,431 | ||||||
Mondelez International, Inc., 2.75%, 4/13/30 | 208,000 | 186,260 | ||||||
934,493 | ||||||||
Health Care Equipment and Supplies — 0.2% | ||||||||
Baxter International, Inc., 1.92%, 2/1/27(3) | 510,000 | 464,332 | ||||||
Baxter International, Inc., 2.54%, 2/1/32(3) | 720,000 | 614,068 | ||||||
Zimmer Biomet Holdings, Inc., 1.45%, 11/22/24 | 900,000 | 852,606 | ||||||
1,931,006 | ||||||||
Health Care Providers and Services — 0.5% | ||||||||
Centene Corp., 2.45%, 7/15/28 | 560,000 | 489,275 | ||||||
Centene Corp., 4.625%, 12/15/29 | 244,000 | 236,680 | ||||||
Centene Corp., 3.375%, 2/15/30 | 399,000 | 357,047 | ||||||
CVS Health Corp., 1.75%, 8/21/30 | 310,000 | 253,025 | ||||||
CVS Health Corp., 4.78%, 3/25/38 | 160,000 | 158,440 | ||||||
CVS Health Corp., 5.05%, 3/25/48 | 220,000 | 221,674 | ||||||
Duke University Health System, Inc., 3.92%, 6/1/47 | 160,000 | 150,227 | ||||||
HCA, Inc., 2.375%, 7/15/31 | 235,000 | 193,569 | ||||||
HCA, Inc., 3.50%, 7/15/51 | 330,000 | 245,282 | ||||||
Humana, Inc., 2.15%, 2/3/32 | 1,144,000 | 942,652 | ||||||
Kaiser Foundation Hospitals, 3.00%, 6/1/51 | 260,000 | 202,037 | ||||||
Roche Holdings, Inc., 2.61%, 12/13/51(3) | 440,000 | 331,891 | ||||||
Universal Health Services, Inc., 1.65%, 9/1/26(3) | 427,000 | 380,055 | ||||||
Universal Health Services, Inc., 2.65%, 10/15/30(3) | 330,000 | 278,153 | ||||||
4,440,007 | ||||||||
Hotels, Restaurants and Leisure† | ||||||||
Marriott International, Inc., 3.50%, 10/15/32 | 372,000 | 332,583 | ||||||
Household Durables — 0.1% | ||||||||
D.R. Horton, Inc., 2.50%, 10/15/24 | 310,000 | 302,589 | ||||||
Safehold Operating Partnership LP, 2.85%, 1/15/32 | 457,000 | 379,882 | ||||||
682,471 | ||||||||
Insurance — 0.4% | ||||||||
Alleghany Corp., 3.25%, 8/15/51 | 230,000 | 181,159 | ||||||
American International Group, Inc., 6.25%, 5/1/36 | 305,000 | 356,822 | ||||||
Assured Guaranty US Holdings, Inc., 3.60%, 9/15/51 | 270,000 | 216,043 | ||||||
Athene Global Funding, 1.99%, 8/19/28(3) | 326,000 | 275,688 | ||||||
Brighthouse Financial Global Funding, 2.00%, 6/28/28(3) | 221,000 | 193,263 | ||||||
Chubb INA Holdings, Inc., 2.85%, 12/15/51 | 208,000 | 158,895 | ||||||
GA Global Funding Trust, 2.90%, 1/6/32(3) | 315,000 | 270,028 | ||||||
Global Atlantic Fin Co., 3.125%, 6/15/31(3) | 238,000 | 201,586 | ||||||
Guardian Life Global Funding, 1.625%, 9/16/28(3) | 472,000 | 399,402 | ||||||
Hill City Funding Trust, 4.05%, 8/15/41(3) | 416,000 | 325,600 | ||||||
Protective Life Global Funding, 3.22%, 3/28/25(3) | 201,000 | 198,220 | ||||||
Prudential Financial, Inc., VRN, 5.125%, 3/1/52 | 306,000 | 298,061 | ||||||
RGA Global Funding, 2.70%, 1/18/29(3) | 425,000 | 386,112 | ||||||
Sammons Financial Group, Inc., 4.75%, 4/8/32(3) | 282,000 | 267,858 | ||||||
SBL Holdings, Inc., 5.125%, 11/13/26(3) | 330,000 | 328,062 | ||||||
4,056,799 |
15
Shares/ Principal Amount | Value | |||||||
Internet and Direct Marketing Retail† | ||||||||
Amazon.com, Inc., 3.95%, 4/13/52 | $ | 237,000 | $ | 227,568 | ||||
IT Services† | ||||||||
Fiserv, Inc., 2.65%, 6/1/30 | 380,000 | 330,387 | ||||||
Life Sciences Tools and Services — 0.1% | ||||||||
Danaher Corp., 2.80%, 12/10/51 | 320,000 | 237,035 | ||||||
Illumina, Inc., 2.55%, 3/23/31 | 527,000 | 449,584 | ||||||
686,619 | ||||||||
Media — 0.3% | ||||||||
Charter Communications Operating LLC / Charter Communications Operating Capital, 5.125%, 7/1/49 | 275,000 | 236,596 | ||||||
Comcast Corp., 3.75%, 4/1/40 | 440,000 | 396,368 | ||||||
Discovery Communications LLC, 4.65%, 5/15/50 | 245,000 | 211,168 | ||||||
Grupo Televisa SAB, 5.00%, 5/13/45 | 550,000 | 521,658 | ||||||
Omnicom Group, Inc., 2.60%, 8/1/31 | 325,000 | 281,065 | ||||||
Paramount Global, 4.20%, 6/1/29 | 280,000 | 269,188 | ||||||
Paramount Global, 4.375%, 3/15/43 | 265,000 | 219,374 | ||||||
Time Warner Cable LLC, 4.50%, 9/15/42 | 675,000 | 558,994 | ||||||
Walt Disney Co., 4.70%, 3/23/50 | 210,000 | 214,505 | ||||||
2,908,916 | ||||||||
Metals and Mining — 0.1% | ||||||||
Glencore Funding LLC, 2.625%, 9/23/31(3) | 440,000 | 367,811 | ||||||
Nucor Corp., 3.125%, 4/1/32 | 342,000 | 308,106 | ||||||
South32 Treasury Ltd., 4.35%, 4/14/32(3) | 340,000 | 328,253 | ||||||
Teck Resources Ltd., 6.25%, 7/15/41 | 390,000 | 423,916 | ||||||
1,428,086 | ||||||||
Multi-Utilities — 0.2% | ||||||||
Ameren Corp., 3.50%, 1/15/31 | 430,000 | 402,611 | ||||||
CenterPoint Energy, Inc., 2.65%, 6/1/31 | 285,000 | 250,089 | ||||||
Dominion Energy, Inc., 4.90%, 8/1/41 | 270,000 | 270,242 | ||||||
NiSource, Inc., 5.65%, 2/1/45 | 290,000 | 297,156 | ||||||
Sempra Energy, 3.25%, 6/15/27 | 180,000 | 172,578 | ||||||
WEC Energy Group, Inc., 1.375%, 10/15/27 | 490,000 | 429,185 | ||||||
1,821,861 | ||||||||
Multiline Retail — 0.1% | ||||||||
Dollar Tree, Inc., 2.65%, 12/1/31 | 480,000 | 409,977 | ||||||
Target Corp., 2.95%, 1/15/52 | 327,000 | 260,098 | ||||||
670,075 | ||||||||
Oil, Gas and Consumable Fuels — 0.8% | ||||||||
Aker BP ASA, 3.75%, 1/15/30(3) | 440,000 | 411,344 | ||||||
Aker BP ASA, 4.00%, 1/15/31(3) | 160,000 | 150,563 | ||||||
BP Capital Markets America, Inc., 3.06%, 6/17/41 | 250,000 | 204,168 | ||||||
Cenovus Energy, Inc., 2.65%, 1/15/32 | 280,000 | 238,679 | ||||||
Continental Resources, Inc., 2.27%, 11/15/26(3) | 310,000 | 283,540 | ||||||
Continental Resources, Inc., 2.875%, 4/1/32(3) | 217,000 | 179,633 | ||||||
Diamondback Energy, Inc., 3.50%, 12/1/29 | 300,000 | 281,925 | ||||||
Diamondback Energy, Inc., 4.25%, 3/15/52 | 72,000 | 63,143 | ||||||
Enbridge, Inc., 3.40%, 8/1/51 | 130,000 | 102,305 | ||||||
Energy Transfer LP, 3.60%, 2/1/23 | 160,000 | 160,332 | ||||||
Energy Transfer LP, 4.25%, 3/15/23 | 370,000 | 372,919 | ||||||
Energy Transfer LP, 3.75%, 5/15/30 | 400,000 | 369,390 | ||||||
Energy Transfer LP, 4.90%, 3/15/35 | 270,000 | 256,281 |
16
Shares/ Principal Amount | Value | |||||||
Enterprise Products Operating LLC, 4.85%, 3/15/44 | $ | 460,000 | $ | 442,173 | ||||
Enterprise Products Operating LLC, 3.30%, 2/15/53 | 220,000 | 165,692 | ||||||
Equinor ASA, 3.25%, 11/18/49 | 230,000 | 191,444 | ||||||
Galaxy Pipeline Assets Bidco Ltd., 2.94%, 9/30/40(3) | 884,349 | 740,998 | ||||||
Kinder Morgan Energy Partners LP, 6.50%, 9/1/39 | 250,000 | 273,460 | ||||||
MPLX LP, 4.95%, 3/14/52 | 330,000 | 303,123 | ||||||
Petroleos Mexicanos, 3.50%, 1/30/23 | 300,000 | 298,150 | ||||||
Petroleos Mexicanos, 6.625%, 6/15/35 | 50,000 | 40,638 | ||||||
SA Global Sukuk Ltd., 2.69%, 6/17/31(3) | 1,000,000 | 901,611 | ||||||
Sabine Pass Liquefaction LLC, 5.625%, 3/1/25 | 640,000 | 663,209 | ||||||
Transcontinental Gas Pipe Line Co. LLC, 3.25%, 5/15/30 | 100,000 | 92,820 | ||||||
7,187,540 | ||||||||
Paper and Forest Products† | ||||||||
Georgia-Pacific LLC, 2.10%, 4/30/27(3) | 370,000 | 341,526 | ||||||
Personal Products† | ||||||||
GSK Consumer Healthcare Capital US LLC, 4.00%, 3/24/52(3) | 275,000 | 247,381 | ||||||
Pharmaceuticals — 0.2% | ||||||||
Bristol-Myers Squibb Co., 2.95%, 3/15/32 | 427,000 | 392,886 | ||||||
Bristol-Myers Squibb Co., 2.55%, 11/13/50 | 337,000 | 242,947 | ||||||
Merck & Co., Inc., 1.70%, 6/10/27 | 330,000 | 302,063 | ||||||
Royalty Pharma PLC, 2.20%, 9/2/30 | 235,000 | 196,595 | ||||||
Utah Acquisition Sub, Inc., 3.95%, 6/15/26 | 840,000 | 816,573 | ||||||
Viatris, Inc., 4.00%, 6/22/50 | 91,000 | 67,441 | ||||||
2,018,505 | ||||||||
Real Estate Management and Development† | ||||||||
Essential Properties LP, 2.95%, 7/15/31 | 316,000 | 260,632 | ||||||
Ontario Teachers' Cadillac Fairview Properties Trust, 2.50%, 10/15/31(3) | 201,000 | 174,454 | ||||||
435,086 | ||||||||
Road and Rail — 0.2% | ||||||||
Burlington Northern Santa Fe LLC, 4.15%, 4/1/45 | 300,000 | 283,174 | ||||||
Burlington Northern Santa Fe LLC, 3.30%, 9/15/51 | 200,000 | 166,349 | ||||||
DAE Funding LLC, 1.55%, 8/1/24(3) | 395,000 | 368,762 | ||||||
DAE Funding LLC, 3.375%, 3/20/28(3) | 642,000 | 586,627 | ||||||
Union Pacific Corp., 3.55%, 8/15/39 | 450,000 | 404,881 | ||||||
1,809,793 | ||||||||
Semiconductors and Semiconductor Equipment — 0.3% | ||||||||
Broadcom, Inc., 4.00%, 4/15/29(3) | 191,000 | 182,393 | ||||||
Broadcom, Inc., 4.93%, 5/15/37(3) | 295,000 | 276,079 | ||||||
Intel Corp., 2.80%, 8/12/41 | 580,000 | 457,360 | ||||||
Intel Corp., 3.20%, 8/12/61 | 220,000 | 166,677 | ||||||
Microchip Technology, Inc., 4.25%, 9/1/25 | 961,000 | 954,314 | ||||||
Qorvo, Inc., 4.375%, 10/15/29 | 380,000 | 353,544 | ||||||
Qorvo, Inc., 3.375%, 4/1/31(3) | 317,000 | 266,004 | ||||||
2,656,371 | ||||||||
Software† | ||||||||
Oracle Corp., 3.60%, 4/1/40 | 395,000 | 306,495 | ||||||
Workday, Inc., 3.70%, 4/1/29 | 142,000 | 135,861 | ||||||
442,356 | ||||||||
Specialty Retail — 0.2% | ||||||||
AutoNation, Inc., 1.95%, 8/1/28 | 155,000 | 132,664 |
17
Shares/ Principal Amount | Value | |||||||
Dick's Sporting Goods, Inc., 3.15%, 1/15/32 | $ | 495,000 | $ | 413,722 | ||||
Home Depot, Inc., 3.90%, 6/15/47 | 50,000 | 46,234 | ||||||
Home Depot, Inc., 2.375%, 3/15/51 | 397,000 | 277,083 | ||||||
Lowe's Cos., Inc., 2.625%, 4/1/31 | 690,000 | 605,460 | ||||||
Lowe's Cos., Inc., 4.25%, 4/1/52 | 710,000 | 639,181 | ||||||
2,114,344 | ||||||||
Technology Hardware, Storage and Peripherals — 0.1% | ||||||||
Apple, Inc., 2.65%, 2/8/51 | 480,000 | 364,412 | ||||||
Dell International LLC / EMC Corp., 5.30%, 10/1/29 | 180,000 | 185,877 | ||||||
Dell International LLC / EMC Corp., 8.10%, 7/15/36 | 226,000 | 276,993 | ||||||
HP, Inc., 4.00%, 4/15/29 | 175,000 | 166,579 | ||||||
HP, Inc., 4.20%, 4/15/32 | 162,000 | 148,714 | ||||||
1,142,575 | ||||||||
Thrifts and Mortgage Finance — 0.1% | ||||||||
Nationwide Building Society, VRN, 4.125%, 10/18/32(3) | 595,000 | 567,730 | ||||||
Trading Companies and Distributors† | ||||||||
Aircastle Ltd., 5.25%, 8/11/25(3) | 371,000 | 370,603 | ||||||
Water Utilities† | ||||||||
Essential Utilities, Inc., 2.70%, 4/15/30 | 380,000 | 340,550 | ||||||
Wireless Telecommunication Services — 0.2% | ||||||||
T-Mobile USA, Inc., 4.75%, 2/1/28 | 814,000 | 804,334 | ||||||
T-Mobile USA, Inc., 3.50%, 4/15/31 | 395,000 | 350,641 | ||||||
T-Mobile USA, Inc., 3.40%, 10/15/52(3) | 160,000 | 121,498 | ||||||
Vodafone Group PLC, VRN, 4.125%, 6/4/81 | 465,000 | 402,511 | ||||||
1,678,984 | ||||||||
TOTAL CORPORATE BONDS (Cost $116,982,841) | 103,695,884 | |||||||
U.S. GOVERNMENT AGENCY MORTGAGE-BACKED SECURITIES — 4.5% | ||||||||
Adjustable-Rate U.S. Government Agency Mortgage-Backed Securities — 0.1% | ||||||||
FHLMC, VRN, 2.36%, (1-year H15T1Y plus 2.25%), 9/1/35 | 69,070 | 71,961 | ||||||
FHLMC, VRN, 2.18%, (12-month LIBOR plus 1.87%), 7/1/36 | 18,752 | 19,479 | ||||||
FHLMC, VRN, 2.20%, (1-year H15T1Y plus 2.14%), 10/1/36 | 63,356 | 66,140 | ||||||
FHLMC, VRN, 2.40%, (1-year H15T1Y plus 2.26%), 4/1/37 | 76,474 | 79,506 | ||||||
FHLMC, VRN, 2.11%, (12-month LIBOR plus 1.86%), 7/1/41 | 69,236 | 72,056 | ||||||
FHLMC, VRN, 2.88%, (12-month LIBOR plus 1.63%), 1/1/44 | 77,618 | 78,563 | ||||||
FHLMC, VRN, 2.62%, (12-month LIBOR plus 1.60%), 6/1/45 | 40,727 | 42,144 | ||||||
FHLMC, VRN, 1.88%, (12-month LIBOR plus 1.63%), 8/1/46 | 122,056 | 125,434 | ||||||
FHLMC, VRN, 3.10%, (12-month LIBOR plus 1.64%), 9/1/47 | 180,487 | 182,042 | ||||||
FNMA, VRN, 1.73%, (6-month LIBOR plus 1.57%), 6/1/35 | 35,187 | 36,556 | ||||||
FNMA, VRN, 1.76%, (6-month LIBOR plus 1.57%), 6/1/35 | 34,268 | 35,558 | ||||||
FNMA, VRN, 2.24%, (1-year H15T1Y plus 2.16%), 3/1/38 | 63,913 | 66,570 | ||||||
FNMA, VRN, 3.18%, (12-month LIBOR plus 1.61%), 3/1/47 | 110,765 | 110,287 | ||||||
FNMA, VRN, 3.11%, (12-month LIBOR plus 1.61%), 4/1/47 | 68,041 | 67,640 | ||||||
FNMA, VRN, 3.24%, (12-month LIBOR plus 1.62%), 5/1/47 | 107,018 | 108,678 | ||||||
1,162,614 | ||||||||
Fixed-Rate U.S. Government Agency Mortgage-Backed Securities — 4.4% | ||||||||
FHLMC, 3.00%, 7/1/51 | 1,237,962 | 1,172,734 | ||||||
FHLMC, 3.00%, 7/1/51 | 850,312 | 804,983 | ||||||
FHLMC, 2.50%, 8/1/51 | 2,010,651 | 1,837,906 | ||||||
FHLMC, 2.50%, 10/1/51 | 1,126,205 | 1,032,799 | ||||||
FHLMC, 3.00%, 12/1/51 | 1,244,032 | 1,177,707 | ||||||
FNMA, 3.50%, 3/1/34 | 125,570 | 126,147 |
18
Shares/ Principal Amount | Value | |||||||
FNMA, 4.50%, 9/1/41 | $ | 151,837 | $ | 158,093 | ||||
FNMA, 3.50%, 5/1/42 | 753,812 | 745,442 | ||||||
FNMA, 3.50%, 6/1/42 | 247,060 | 244,301 | ||||||
FNMA, 3.00%, 6/1/51 | 172,668 | 164,158 | ||||||
FNMA, 2.50%, 12/1/51 | 1,447,746 | 1,323,172 | ||||||
FNMA, 3.00%, 2/1/52 | 1,233,421 | 1,167,660 | ||||||
FNMA, 3.00%, 2/1/52 | 3,607,842 | 3,413,706 | ||||||
GNMA, 4.00%, TBA | 3,930,000 | 3,936,908 | ||||||
GNMA, 7.00%, 4/20/26 | 11,720 | 12,302 | ||||||
GNMA, 7.50%, 8/15/26 | 7,213 | 7,601 | ||||||
GNMA, 7.00%, 2/15/28 | 695 | 696 | ||||||
GNMA, 7.00%, 5/15/31 | 19,211 | 20,850 | ||||||
GNMA, 5.50%, 11/15/32 | 50,131 | 54,993 | ||||||
GNMA, 4.50%, 6/15/41 | 174,971 | 186,062 | ||||||
GNMA, 3.50%, 6/20/42 | 296,138 | 296,220 | ||||||
GNMA, 3.50%, 3/15/46 | 1,392,777 | 1,399,498 | ||||||
GNMA, 3.50%, 6/20/51 | 1,118,099 | 1,098,030 | ||||||
GNMA, 2.50%, 9/20/51 | 1,346,786 | 1,253,140 | ||||||
UMBS, 3.50%, TBA | 11,320,000 | 10,981,284 | ||||||
UMBS, 4.00%, TBA | 9,322,000 | 9,271,749 | ||||||
41,888,141 | ||||||||
TOTAL U.S. GOVERNMENT AGENCY MORTGAGE-BACKED SECURITIES (Cost $44,750,469) | 43,050,755 | |||||||
ASSET-BACKED SECURITIES — 2.8% | ||||||||
Aaset Trust, Series 2021-2A, Class A SEQ, 2.80%, 1/15/47(3) | 1,544,573 | 1,394,135 | ||||||
Aligned Data Centers Issuer LLC, Series 2021-1A, Class B, 2.48%, 8/15/46(3) | 642,000 | 584,564 | ||||||
Applebee's Funding LLC / IHOP Funding LLC, Series 2019-1A, Class A2I SEQ, 4.19%, 6/5/49(3) | 429,660 | 426,367 | ||||||
Applebee's Funding LLC / IHOP Funding LLC, Series 2019-1A, Class A2II SEQ, 4.72%, 6/5/49(3) | 878,130 | 865,782 | ||||||
Blackbird Capital Aircraft, Series 2021-1A, Class A SEQ, 2.44%, 7/15/46(3) | 840,122 | 748,387 | ||||||
Castlelake Aircraft Structured Trust, Series 2017-1R, Class A SEQ, 2.74%, 8/15/41(3) | 650,616 | 570,623 | ||||||
Clsec Holdings 22t LLC, Series 2021-1, Class B, 3.46%, 5/11/37(3) | 1,544,070 | 1,426,334 | ||||||
DI Issuer LLC, Series 2021-1A, Class A2 SEQ, 3.72%, 9/15/51(3) | 1,900,000 | 1,769,049 | ||||||
Edgeconnex Data Centers, Series 2022-1, Class A2 SEQ, 4.25%, 3/25/52(3) | 948,000 | 922,046 | ||||||
FirstKey Homes Trust, Series 2020-SFR2, Class D, 1.97%, 10/19/37(3) | 1,200,000 | 1,101,554 | ||||||
FirstKey Homes Trust, Series 2021-SFR1, Class D, 2.19%, 8/17/38(3) | 950,000 | 840,686 | ||||||
FirstKey Homes Trust, Series 2021-SFR1, Class E1, 2.39%, 8/17/38(3) | 1,100,000 | 966,683 | ||||||
Flexential Issuer, Series 2021-1A, Class A2 SEQ, 3.25%, 11/27/51(3) | 1,800,000 | 1,693,645 | ||||||
Global SC Finance VII Srl, Series 2021-2A, Class A SEQ, 1.95%, 8/17/41(3) | 1,253,566 | 1,144,557 | ||||||
Goodgreen Trust, Series 2018-1A, Class A, VRN, 3.93%, 10/15/53(3) | 386,198 | 364,093 | ||||||
Goodgreen Trust, Series 2020-1A, Class A SEQ, 2.63%, 4/15/55(3) | 748,403 | 691,395 | ||||||
Goodgreen Trust, Series 2021-1A, Class A SEQ, 2.66%, 10/15/56(3) | 526,226 | 486,423 |
19
Shares/ Principal Amount | Value | |||||||
J.G. Wentworth XL LLC, Series 2017-3A, Class B, 5.43%, 2/15/69(3) | $ | 90,228 | $ | 93,281 | ||||
J.G. Wentworth XLII LLC, Series 2018-2A, Class B, 4.70%, 10/15/77(3) | 550,000 | 537,861 | ||||||
J.G. Wentworth XXXIX LLC, Series 2017-2A, Class B, 5.09%, 9/17/74(3) | 168,890 | 179,071 | ||||||
J.G. Wentworth XXXVIII LLC, Series 2017-1A, Class B, 5.43%, 8/15/62(3) | 204,304 | 216,956 | ||||||
Lunar Structured Aircraft Portfolio Notes, Series 2021-1, Class A SEQ, 2.64%, 10/15/46(3) | 1,167,791 | 1,064,296 | ||||||
MAPS Trust, Series 2021-1A, Class A SEQ, 2.52%, 6/15/46(3) | 1,610,684 | 1,440,142 | ||||||
Navigator Aircraft ABS Ltd., Series 2021-1, Class A SEQ, 2.77%, 11/15/46(3) | 1,167,857 | 1,061,122 | ||||||
New Economy Assets Phase 1 Sponsor LLC, Series 2021-1, Class A1 SEQ, 1.91%, 10/20/61(3) | 1,625,000 | 1,460,441 | ||||||
New Economy Assets Phase 1 Sponsor LLC, Series 2021-1, Class B1, 2.41%, 10/20/61(3) | 1,925,000 | 1,745,417 | ||||||
Progress Residential Trust, Series 2021-SFR3, Class C, 2.09%, 5/17/26(3) | 500,000 | 447,036 | ||||||
Progress Residential Trust, Series 2021-SFR8, Class E1, 2.38%, 10/17/38(3) | 450,000 | 394,206 | ||||||
Sierra Timeshare Receivables Funding LLC, Series 2021-1A, Class C, 1.79%, 11/20/37(3) | 323,123 | 306,607 | ||||||
Slam Ltd., Series 2021-1A, Class A SEQ, 2.43%, 6/15/46(3) | 624,666 | 559,864 | ||||||
Taco Bell Funding LLC, Series 2021-1A, Class A23 SEQ, 2.54%, 8/25/51(3) | 523,688 | 441,344 | ||||||
VSE VOI Mortgage LLC, Series 2016-A, Class A SEQ, 2.54%, 7/20/33(3) | 101,674 | 100,127 | ||||||
VSE VOI Mortgage LLC, Series 2018-A, Class B, 3.72%, 2/20/36(3) | 242,289 | 241,099 | ||||||
TOTAL ASSET-BACKED SECURITIES (Cost $28,745,821) | 26,285,193 | |||||||
COLLATERALIZED MORTGAGE OBLIGATIONS — 2.8% | ||||||||
Private Sponsor Collateralized Mortgage Obligations — 2.2% | ||||||||
ABN Amro Mortgage Corp., Series 2003-4, Class A4, 5.50%, 3/25/33 | 4,127 | 3,933 | ||||||
Adjustable Rate Mortgage Trust, Series 2004-4, Class 4A1, VRN, 2.59%, 3/25/35 | 94,196 | 95,246 | ||||||
Banc of America Mortgage Trust, Series 2004-E, Class 2A6 SEQ, VRN, 2.72%, 6/25/34 | 58,328 | 58,590 | ||||||
Bellemeade Re Ltd., Series 2019-3A, Class B1, VRN, 3.17%, (1-month LIBOR plus 2.50%), 7/25/29(3) | 400,000 | 397,074 | ||||||
Bellemeade Re Ltd., Series 2019-3A, Class M1C, VRN, 2.62%, (1-month LIBOR plus 1.95%), 7/25/29(3) | 360,000 | 358,321 | ||||||
Bellemeade Re Ltd., Series 2020-2A, Class M1C, VRN, 4.67%, (1-month LIBOR plus 4.00%), 8/26/30(3) | 290,777 | 292,078 | ||||||
Chase Mortgage Finance Corp., Series 2021-CL1, Class M1, VRN, 1.49%, (30-day average SOFR plus 1.20%), 2/25/50(3) | 375,750 | 370,193 | ||||||
CHNGE Mortgage Trust, Series 2022-1 Class A1 SEQ, VRN, 3.01%, 1/25/67(3) | 806,310 | 778,103 | ||||||
Citigroup Mortgage Loan Trust, Inc., Series 2004-UST1, Class A5, VRN, 1.97%, 8/25/34 | 183,750 | 185,790 | ||||||
Countrywide Home Loan Mortgage Pass-Through Trust, Series 2005-17, Class 1A11, 5.50%, 9/25/35 | 1,310 | 1,233 | ||||||
Credit Suisse Mortgage Trust, Series 2021-NQM2, Class A2 SEQ, VRN, 1.38%, 2/25/66(3) | 356,217 | 341,219 | ||||||
Credit Suisse Mortgage Trust, Series 2021-RPL3, Class A1 SEQ, VRN, 2.00%, 1/25/60(3) | 431,664 | 416,530 | ||||||
Credit Suisse Mortgage Trust, Series 2022-NQM2, Class A3, VRN, 4.00%, 2/25/67(3) | 600,000 | 572,546 |
20
Shares/ Principal Amount | Value | |||||||
Deephaven Residential Mortgage Trust, Series 2021-3, Class A3, VRN, 1.55%, 8/25/66(3) | $ | 320,084 | $ | 295,384 | ||||
Eagle RE Ltd., Series 2021-1, Class M1C, VRN, 2.99%, (30-day average SOFR plus 2.70%), 10/25/33(3) | 525,000 | 527,924 | ||||||
First Horizon Alternative Mortgage Securities Trust, Series 2004-AA4, Class A1, VRN, 2.55%, 10/25/34 | 90,187 | 92,235 | ||||||
GCAT Trust, Series 2021-CM2, Class A1 SEQ, VRN, 2.35%, 8/25/66(3) | 1,415,655 | 1,373,093 | ||||||
GCAT Trust, Series 2021-NQM1, Class A3 SEQ, VRN, 1.15%, 1/25/66(3) | 307,604 | 293,975 | ||||||
GSR Mortgage Loan Trust, Series 2004-7, Class 3A1, VRN, 2.17%, 6/25/34 | 24,308 | 23,606 | ||||||
GSR Mortgage Loan Trust, Series 2004-AR5, Class 3A3, VRN, 2.48%, 5/25/34 | 41,031 | 40,070 | ||||||
GSR Mortgage Loan Trust, Series 2005-AR1, Class 3A1, VRN, 2.74%, 1/25/35 | 57,257 | 58,497 | ||||||
Home RE Ltd., Series 2020-1, Class M1B, VRN, 3.92%, (1-month LIBOR plus 3.25%), 10/25/30(3) | 240,705 | 240,865 | ||||||
Home RE Ltd., Series 2021-1, Class M1B, VRN, 2.22%, (1-month LIBOR plus 1.55%), 7/25/33(3) | 360,000 | 357,964 | ||||||
Home RE Ltd., Series 2022-1, Class M1A, VRN, 3.125%, (30-day average SOFR plus 2.85%), 10/25/34(3) | 425,000 | 425,000 | ||||||
Imperial Fund Mortgage Trust, Series 2021-NQM4, Class A1, VRN, 2.09%, 1/25/57(3) | 536,428 | 477,409 | ||||||
JP Morgan Mortgage Trust, Series 2017-1, Class A2, VRN, 3.46%, 1/25/47(3) | 139,656 | 133,395 | ||||||
JP Morgan Mortgage Trust, Series 2020-3, Class A15, VRN, 3.50%, 8/25/50(3) | 200,783 | 192,912 | ||||||
JP Morgan Mortgage Trust, Series 2021-12, Class A4 SEQ, VRN, 2.50%, 2/25/52(3) | 1,002,225 | 936,096 | ||||||
JP Morgan Mortgage Trust, Series 2021-13, Class A3, VRN, 2.50%, 4/25/52(3) | 1,109,471 | 982,086 | ||||||
JP Morgan Mortgage Trust, Series 2022-4, Class A3, VRN, 3.00%, 10/25/52(3) | 400,000 | 368,187 | ||||||
JP Morgan Mortgage Trust, Series 2022-LTV1, Class A3 SEQ, VRN, 3.52%, 7/25/52(3) | 631,154 | 580,053 | ||||||
MASTR Adjustable Rate Mortgages Trust, Series 2004-13, Class 3A7, VRN, 2.76%, 11/21/34 | 80,115 | 79,368 | ||||||
Merrill Lynch Mortgage Investors Trust, Series 2005-3, Class 2A, VRN, 2.19%, 11/25/35 | 34,614 | 34,049 | ||||||
Merrill Lynch Mortgage Investors Trust, Series 2005-A2, Class A1, VRN, 2.81%, 2/25/35 | 77,446 | 76,874 | ||||||
MFA Trust, Series 2021-INV2, Class A3 SEQ, VRN, 2.26%, 11/25/56(3) | 797,265 | 737,627 | ||||||
MFA Trust, Series 2022-INV1, Class A1 SEQ, 3.91%, 4/25/66(3) | 490,882 | 486,164 | ||||||
Newrez Warehouse Securitization Trust, Series 2021-1, Class A, VRN, 1.42%, (1-month LIBOR plus 0.75%), 5/25/55(3) | 750,000 | 744,966 | ||||||
Oceanview Mortgage Trust, Series 2021-5, Class A4 SEQ, VRN, 2.50%, 10/25/51(3) | 987,419 | 915,528 | ||||||
PRMI Securitization Trust, Series 2021-1, Class A5, VRN, 2.50%, 4/25/51(3) | 886,723 | 775,482 | ||||||
PSMC Trust, Series 2021-2, Class A3 SEQ, VRN, 2.50%, 5/25/51(3) | 348,808 | 324,907 | ||||||
PSMC Trust, Series 2021-3, Class A3 SEQ, VRN, 2.50%, 8/25/51(3) | 1,052,700 | 978,678 | ||||||
Sequoia Mortgage Trust, Series 2021-5, Class A4 SEQ, VRN, 2.50%, 7/25/51(3) | 428,976 | 400,102 | ||||||
Sofi Mortgage Trust, Series 2016-1A, Class 1A4 SEQ, VRN, 3.00%, 11/25/46(3) | 42,547 | 41,559 |
21
Shares/ Principal Amount | Value | |||||||
Starwood Mortgage Residential Trust, Series 2020-2, Class B1E, VRN, 3.00%, 4/25/60(3) | $ | 446,000 | $ | 446,793 | ||||
Structured Adjustable Rate Mortgage Loan Trust, Series 2004-8, Class 2A1, VRN, 2.40%, 7/25/34 | 31,017 | 31,312 | ||||||
Verus Securitization Trust, Series 2021-7, Class A1, VRN, 1.83%, 10/25/66(3) | 559,411 | 522,027 | ||||||
Verus Securitization Trust, Series 2021-R2, Class A2, VRN, 1.12%, 2/25/64(3) | 282,880 | 276,553 | ||||||
Verus Securitization Trust, Series 2021-R2, Class A3, VRN, 1.23%, 2/25/64(3) | 323,483 | 315,500 | ||||||
Verus Securitization Trust, Series 2022-3, Class A1 SEQ, 4.13%, 2/25/67(3) | 809,100 | 798,992 | ||||||
Verus Securitization Trust, Series 2022-4, Class A3 SEQ, VRN, 4.74%, 4/25/67(3) | 749,000 | 740,190 | ||||||
Wells Fargo Mortgage Backed Securities Trust, Series 2021-2, Class A3, VRN, 2.50%, 6/25/51(3) | 799,682 | 745,856 | ||||||
20,742,134 | ||||||||
U.S. Government Agency Collateralized Mortgage Obligations — 0.6% | ||||||||
FHLMC, Series 2014-DN3, Class M3, VRN, 4.67%, (1-month LIBOR plus 4.00%), 8/25/24 | 91,067 | 92,041 | ||||||
FHLMC, Series 2015-HQ2, Class M3, VRN, 3.92%, (1-month LIBOR plus 3.25%), 5/25/25 | 50,936 | 51,345 | ||||||
FHLMC, Series 2019-DNA2, Class M2, VRN, 3.12%, (1-month LIBOR plus 2.45%), 3/25/49(3) | 397,607 | 399,733 | ||||||
FHLMC, Series 2020-DNA5, Class M2, VRN, 3.09%, (30-day average SOFR plus 2.80%), 10/25/50(3) | 409,914 | 413,169 | ||||||
FHLMC, Series 2020-HQA3, Class M2, VRN, 4.27%, (1-month LIBOR plus 3.60%), 7/25/50(3) | 36,141 | 36,193 | ||||||
FHLMC, Series 2021-DNA6, Class M2, VRN, 1.79%, (30-day average SOFR plus 1.50%), 10/25/41(3) | 1,715,000 | 1,655,015 | ||||||
FHLMC, Series 5123, Class HI, IO, 5.00%, 1/25/42 | 1,392,312 | 255,570 | ||||||
FHLMC, Series 5146, Class DI, IO, 5.50%, 7/25/39 | 429,725 | 83,344 | ||||||
FNMA, Series 2013-C01, Class M2, VRN, 5.92%, (1-month LIBOR plus 5.25%), 10/25/23 | 518,613 | 540,401 | ||||||
FNMA, Series 2014-C02, Class 2M2, VRN, 3.27%, (1-month LIBOR plus 2.60%), 5/25/24 | 156,762 | 158,025 | ||||||
FNMA, Series 2014-C04, Class 1M2, VRN, 5.57%, (1-month LIBOR plus 4.90%), 11/25/24 | 176,255 | 186,072 | ||||||
FNMA, Series 2015-C04, Class 1M2, VRN, 6.37%, (1-month LIBOR plus 5.70%), 4/25/28 | 404,298 | 434,168 | ||||||
FNMA, Series 2015-C04, Class 2M2, VRN, 6.22%, (1-month LIBOR plus 5.55%), 4/25/28 | 911,137 | 955,040 | ||||||
FNMA, Series 2017-C03, Class 1M2C, VRN, 3.67%, (1-month LIBOR plus 3.00%), 10/25/29 | 110,000 | 114,053 | ||||||
5,374,169 | ||||||||
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (Cost $27,077,235) | 26,116,303 | |||||||
COLLATERALIZED LOAN OBLIGATIONS — 2.3% | ||||||||
ABPCI Direct Lending Fund CLO IV Ltd., Series 2017-2A, Class BR, VRN, 3.125%, (3-month LIBOR plus 1.90%), 10/27/33(3) | 600,000 | 600,503 | ||||||
Aimco CLO Ltd., Series 2019-10A, Class BR, VRN, 2.74%, (3-month LIBOR plus 1.60%), 7/22/32(3) | 1,090,000 | 1,078,799 | ||||||
ARES LII CLO Ltd., Series 2019-52A, Class BR, VRN, 2.79%, (3-month LIBOR plus 1.65%), 4/22/31(3) | 550,000 | 545,129 | ||||||
Ares XL CLO Ltd., Series 2016-40A, Class BRR, VRN, 2.84%, (3-month LIBOR plus 1.80%), 1/15/29(3) | 1,000,000 | 989,470 | ||||||
Bain Capital Credit CLO Ltd., Series 2019-2A, Class BR, VRN, 2.64%, (3-month LIBOR plus 1.60%), 10/17/32(3) | 550,000 | 540,536 | ||||||
BDS Ltd., Series 2021-FL7, Class C, VRN, 2.25%, (1-month LIBOR plus 1.70%), 6/16/36(3) | 1,125,000 | 1,106,579 |
22
Shares/ Principal Amount | Value | |||||||
Bean Creek CLO Ltd., Series 2015-1A, Class AR, VRN, 2.08%, (3-month LIBOR plus 1.02%), 4/20/31(3) | $ | 575,000 | $ | 570,557 | ||||
Canyon Capital CLO Ltd., Series 2017-1A, Class BR, VRN, 2.64%, (3-month LIBOR plus 1.60%), 7/15/30(3) | 725,000 | 715,990 | ||||||
Carlyle Global Market Strategies CLO Ltd., Series 2013-1A, Class BRR, VRN, 2.66%, (3-month LIBOR plus 2.20%), 8/14/30(3) | 700,000 | 691,926 | ||||||
CarVal CLO III Ltd., Series 2019-2A, Class BR, VRN, 2.66%, (3-month LIBOR plus 1.60%), 7/20/32(3) | 500,000 | 491,724 | ||||||
Cedar Funding Ltd., Series 2019-10A, Class BR, VRN, 2.66%, (3-month LIBOR plus 1.60%), 10/20/32(3) | 600,000 | 593,651 | ||||||
Cerberus Loan Funding XXXIII LP, Series 2021-3A, Class A, VRN, 2.60%, (3-month LIBOR plus 1.56%), 7/23/33(3) | 800,000 | 792,005 | ||||||
Cerberus Loan Funding XXXVI LP, Series 2021-6A, Class A, VRN, 2.44%, (3-month LIBOR plus 1.40%), 11/22/33(3) | 672,790 | 669,511 | ||||||
KKR CLO Ltd., Series 2018, Class BR, VRN, 2.64%, (3-month LIBOR plus 1.60%), 7/18/30(3) | 575,000 | 570,814 | ||||||
KKR CLO Ltd., Series 2022A, Class A, VRN, 2.21%, (3-month LIBOR plus 1.15%), 7/20/31(3) | 450,000 | 447,231 | ||||||
KKR CLO Ltd., Series 2030A, Class BR, VRN, 2.64%, (3-month LIBOR plus 1.60%), 10/17/31(3) | 1,025,000 | 1,015,707 | ||||||
KREF Ltd., Series 2021-FL2, Class B, VRN, 2.20%, (1-month LIBOR plus 1.65%), 2/15/39(3) | 800,000 | 785,672 | ||||||
Madison Park Funding XXII Ltd., Series 2016-22A, Class A1R, VRN, 2.30%, (3-month LIBOR plus 1.26%), 1/15/33(3) | 450,000 | 448,292 | ||||||
Madison Park Funding XXXVII Ltd., Series 2019-37A, Class BR, VRN, 2.69%, (3-month LIBOR plus 1.65%), 7/15/33(3) | 1,075,000 | 1,065,670 | ||||||
MF1 Ltd., Series 2021-FL7, Class AS, VRN, 2.00%, (1-month LIBOR plus 1.45%), 10/16/36(3) | 1,075,000 | 1,057,435 | ||||||
Octagon Investment Partners XV Ltd., Series 2013-1A, Class BRR, VRN, 2.54%, (3-month LIBOR plus 1.50%), 7/19/30(3) | 800,000 | 790,452 | ||||||
Palmer Square Loan Funding Ltd., Series 2022-2A, Class A2, VRN, 3.23%, (3-month SOFR plus 1.90%), 10/15/30(3)(4) | 550,000 | 550,000 | ||||||
Parallel Ltd., Series 2019-1A, Class BR, VRN, 2.86%, (3-month LIBOR plus 1.80%), 7/20/32(3) | 825,000 | 809,532 | ||||||
Park Avenue Institutional Advisers CLO Ltd., Series 2018-1A, Class BR, VRN, 3.16%, (3-month LIBOR plus 2.10%), 10/20/31(3) | 750,000 | 732,210 | ||||||
Sound Point CLO XXII Ltd., Series 2019-1A, Class BR, VRN, 2.76%, (3-month LIBOR plus 1.70%), 1/20/32(3) | 1,350,000 | 1,328,378 | ||||||
TCW CLO Ltd., Series 2018-1A, Class BR, VRN, 2.83%, (3-month LIBOR plus 1.65%), 4/25/31(3) | 1,050,000 | 1,036,371 | ||||||
THL Credit Wind River CLO Ltd., Series 2013-2A, Class BR2, VRN, 2.61%, (3-month LIBOR plus 1.57%), 10/18/30(3) | 1,150,000 | 1,142,648 | ||||||
THL Credit Wind River CLO Ltd., Series 2019-3A, Class BR, VRN, 2.69%, (3-month LIBOR plus 1.65%), 4/15/31(3) | 850,000 | 844,110 | ||||||
TOTAL COLLATERALIZED LOAN OBLIGATIONS (Cost $22,250,484) | 22,010,902 | |||||||
COMMERCIAL MORTGAGE-BACKED SECURITIES — 1.0% | ||||||||
BDS Ltd., Series 2021-FL8, Class C, VRN, 2.10%, (1-month LIBOR plus 1.55%), 1/18/36(3) | 500,000 | 490,993 | ||||||
BDS Ltd., Series 2021-FL8, Class D, VRN, 2.45%, (1-month LIBOR plus 1.90%), 1/18/36(3) | 400,000 | 382,814 | ||||||
BX Commercial Mortgage Trust, Series 2020-VIV2, Class C, VRN, 3.66%, 3/9/44(3) | 975,000 | 867,196 | ||||||
BX Commercial Mortgage Trust, Series 2020-VIVA, Class D, VRN, 3.67%, 3/11/44(3) | 1,100,000 | 953,935 | ||||||
BX Commercial Mortgage Trust, Series 2021-VOLT, Class F, VRN, 2.95%, (1-month LIBOR plus 2.40%), 9/15/36(3) | 1,200,000 | 1,158,320 | ||||||
BXMT Ltd., Series 2020-FL2, Class C, VRN, 2.03%, (30-day average SOFR plus 1.76%), 2/15/38(3) | 1,090,000 | 1,070,644 |
23
Shares/ Principal Amount | Value | |||||||
ELP Commercial Mortgage Trust, Series 2021-ELP, Class E, VRN, 2.67%, (1-month LIBOR plus 2.12%), 11/15/38(3) | $ | 1,497,000 | $ | 1,450,537 | ||||
OPG Trust, Series 2021-PORT, Class E, VRN, 2.08%, (1-month LIBOR plus 1.53%), 10/15/36(3) | 1,431,000 | 1,367,213 | ||||||
PFP Ltd., Series 2019-5, Class B, VRN, 2.20%, (1-month LIBOR plus 1.65%), 4/14/36(3) | 550,000 | 547,652 | ||||||
PFP Ltd., Series 2021-8, Class C, VRN, 2.35%, (1-month LIBOR plus 1.80%), 8/9/37(3) | 807,000 | 792,973 | ||||||
TOTAL COMMERCIAL MORTGAGE-BACKED SECURITIES (Cost $9,616,139) | 9,082,277 | |||||||
MUNICIPAL SECURITIES — 0.7% | ||||||||
Bay Area Toll Authority Rev., 6.92%, 4/1/40 | 295,000 | 382,299 | ||||||
California State University Rev., 2.98%, 11/1/51 | 500,000 | 405,100 | ||||||
Foothill-Eastern Transportation Corridor Agency Rev., 4.09%, 1/15/49 | 275,000 | 254,144 | ||||||
Golden State Tobacco Securitization Corp. Rev., 2.75%, 6/1/34 | 660,000 | 573,442 | ||||||
Houston GO, 3.96%, 3/1/47 | 120,000 | 116,620 | ||||||
Metropolitan Transportation Authority Rev., 6.69%, 11/15/40 | 105,000 | 125,807 | ||||||
Metropolitan Transportation Authority Rev., 6.81%, 11/15/40 | 60,000 | 73,280 | ||||||
Metropolitan Water Reclamation District of Greater Chicago GO, 5.72%, 12/1/38 | 650,000 | 766,037 | ||||||
Michigan Strategic Fund Rev., (Flint Water Advocacy Fund), 3.23%, 9/1/47 | 570,000 | 481,191 | ||||||
Missouri Highway & Transportation Commission Rev., 5.45%, 5/1/33 | 130,000 | 143,678 | ||||||
New Jersey Turnpike Authority Rev., 7.41%, 1/1/40 | 200,000 | 271,885 | ||||||
New Jersey Turnpike Authority Rev., 7.10%, 1/1/41 | 95,000 | 125,710 | ||||||
New York City GO, 6.27%, 12/1/37 | 95,000 | 112,072 | ||||||
Ohio Turnpike & Infrastructure Commission Rev., 3.22%, 2/15/48 | 330,000 | 260,728 | ||||||
Ohio Water Development Authority Water Pollution Control Loan Fund Rev., 4.88%, 12/1/34 | 110,000 | 117,139 | ||||||
Port Authority of New York & New Jersey Rev., 4.93%, 10/1/51 | 50,000 | 55,412 | ||||||
Regents of the University of California Medical Center Pooled Rev., 3.26%, 5/15/60 | 245,000 | 193,522 | ||||||
Rutgers The State University of New Jersey Rev., 5.67%, 5/1/40 | 300,000 | 343,630 | ||||||
Sacramento Municipal Utility District Rev., 6.16%, 5/15/36 | 210,000 | 254,361 | ||||||
San Francisco Public Utilities Commission Water Rev., 6.00%, 11/1/40 | 105,000 | 121,812 | ||||||
Santa Clara Valley Transportation Authority Rev., 5.88%, 4/1/32 | 120,000 | 131,994 | ||||||
State of California GO, 4.60%, 4/1/38 | 355,000 | 370,532 | ||||||
State of California GO, 7.55%, 4/1/39 | 100,000 | 138,824 | ||||||
State of California GO, 7.30%, 10/1/39 | 160,000 | 211,649 | ||||||
State of California GO, 7.60%, 11/1/40 | 80,000 | 112,793 | ||||||
State of Washington GO, 5.14%, 8/1/40 | 20,000 | 22,351 | ||||||
TOTAL MUNICIPAL SECURITIES (Cost $6,256,290) | 6,166,012 | |||||||
U.S. GOVERNMENT AGENCY SECURITIES — 0.3% | ||||||||
FNMA, 0.75%, 10/8/27 | 2,000,000 | 1,778,981 | ||||||
FNMA, 6.625%, 11/15/30 | 600,000 | 753,324 | ||||||
Tennessee Valley Authority, 1.50%, 9/15/31 | 300,000 | 255,279 | ||||||
TOTAL U.S. GOVERNMENT AGENCY SECURITIES (Cost $3,011,745) | 2,787,584 | |||||||
SOVEREIGN GOVERNMENTS AND AGENCIES — 0.1% | ||||||||
Chile† | ||||||||
Chile Government International Bond, 3.625%, 10/30/42 | 100,000 | 82,968 |
24
Shares/ Principal Amount | Value | |||||||
Mexico — 0.1% | ||||||||
Mexico Government International Bond, 4.15%, 3/28/27 | $ | 600,000 | $ | 601,191 | ||||
Peru† | ||||||||
Peruvian Government International Bond, 5.625%, 11/18/50 | 170,000 | 187,185 | ||||||
Philippines† | ||||||||
Philippine Government International Bond, 6.375%, 10/23/34 | 150,000 | 175,627 | ||||||
Poland† | ||||||||
Republic of Poland Government International Bond, 3.00%, 3/17/23 | 140,000 | 139,975 | ||||||
South Africa† | ||||||||
Republic of South Africa Government International Bond, 4.67%, 1/17/24 | 110,000 | 110,656 | ||||||
Uruguay† | ||||||||
Uruguay Government International Bond, 4.125%, 11/20/45 | 120,000 | 116,219 | ||||||
TOTAL SOVEREIGN GOVERNMENTS AND AGENCIES (Cost $1,417,228) | 1,413,821 | |||||||
EXCHANGE-TRADED FUNDS — 0.1% | ||||||||
iShares Core S&P 500 ETF (Cost $1,385,118) | 3,231 | 1,336,212 | ||||||
BANK LOAN OBLIGATIONS(5) — 0.1% | ||||||||
Media — 0.1% | ||||||||
DirecTV Financing, LLC, Term Loan, 5.76%, (1-month LIBOR plus 5.00%), 8/2/27 | $ | 568,225 | 566,568 | |||||
Pharmaceuticals† | ||||||||
Horizon Therapeutics USA Inc., 2021 Term Loan B2, 2.44%, (1-month LIBOR plus 1.75%), 3/15/28 | 498,960 | 493,836 | ||||||
TOTAL BANK LOAN OBLIGATIONS (Cost $1,069,119) | 1,060,404 | |||||||
PREFERRED STOCKS† | ||||||||
Banks† | ||||||||
SVB Financial Group, 4.25% (Cost $61,000) | 61,000 | 52,918 | ||||||
SHORT-TERM INVESTMENTS — 0.6% | ||||||||
Money Market Funds — 0.6% | ||||||||
State Street Institutional U.S. Government Money Market Fund, Premier Class | 5,158,107 | 5,158,107 | ||||||
TOTAL SHORT-TERM INVESTMENTS (Cost $5,158,107) | 5,158,107 | |||||||
TOTAL INVESTMENT SECURITIES — 103.2% (Cost $949,561,273) | 978,646,620 | |||||||
OTHER ASSETS AND LIABILITIES — (3.2)% | (30,225,234) | |||||||
TOTAL NET ASSETS — 100.0% | $ | 948,421,386 |
25
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS | ||||||||||||||||||||
Currency Purchased | Currency Sold | Counterparty | Settlement Date | Unrealized Appreciation (Depreciation) | ||||||||||||||||
EUR | 159,430 | USD | 176,693 | JPMorgan Chase Bank N.A. | 6/30/22 | $ | (8,032) | |||||||||||||
EUR | 264,793 | USD | 289,198 | JPMorgan Chase Bank N.A. | 6/30/22 | (9,073) | ||||||||||||||
EUR | 135,169 | USD | 146,869 | JPMorgan Chase Bank N.A. | 6/30/22 | (3,873) | ||||||||||||||
EUR | 140,021 | USD | 150,443 | JPMorgan Chase Bank N.A. | 6/30/22 | (2,314) | ||||||||||||||
EUR | 162,896 | USD | 174,068 | JPMorgan Chase Bank N.A. | 6/30/22 | (1,739) | ||||||||||||||
EUR | 126,851 | USD | 134,364 | JPMorgan Chase Bank N.A. | 6/30/22 | (168) | ||||||||||||||
USD | 4,695,129 | EUR | 4,247,083 | JPMorgan Chase Bank N.A. | 6/30/22 | 202,127 | ||||||||||||||
USD | 157,448 | EUR | 140,715 | JPMorgan Chase Bank N.A. | 6/30/22 | 8,586 | ||||||||||||||
USD | 103,775 | EUR | 95,658 | JPMorgan Chase Bank N.A. | 6/30/22 | 2,578 | ||||||||||||||
USD | 190,866 | EUR | 175,373 | JPMorgan Chase Bank N.A. | 6/30/22 | 5,338 | ||||||||||||||
USD | 141,784 | EUR | 133,783 | JPMorgan Chase Bank N.A. | 6/30/22 | 255 | ||||||||||||||
$ | 193,685 |
FUTURES CONTRACTS PURCHASED | ||||||||||||||
Reference Entity | Contracts | Expiration Date | Notional Amount | Unrealized Appreciation (Depreciation)^ | ||||||||||
U.S. Treasury 2-Year Notes | 11 | June 2022 | $ | 2,318,938 | $ | (2,342) | ||||||||
U.S. Treasury 5-Year Notes | 10 | June 2022 | 1,126,719 | 90 | ||||||||||
U.S. Treasury Long Bonds | 57 | June 2022 | 8,019,187 | (677,040) | ||||||||||
U.S. Treasury Ultra Bonds | 8 | June 2022 | 1,283,500 | (11,351) | ||||||||||
$ | 12,748,344 | $ | (690,643) |
^Amount represents value and unrealized appreciation (depreciation).
FUTURES CONTRACTS SOLD | ||||||||||||||
Reference Entity | Contracts | Expiration Date | Notional Amount | Unrealized Appreciation (Depreciation)^ | ||||||||||
U.S. Treasury 10-Year Notes | 53 | June 2022 | $ | 6,315,281 | $ | (6,487) |
^Amount represents value and unrealized appreciation (depreciation).
CENTRALLY CLEARED CREDIT DEFAULT SWAP AGREEMENTS | |||||||||||||||||||||||
Reference Entity | Type | Fixed Rate Received (Paid) Quarterly | Termination Date | Notional Amount | Premiums Paid (Received) | Unrealized Appreciation (Depreciation) | Value^ | ||||||||||||||||
Markit CDX North America High Yield Index Series 38 | Buy | (5.00)% | 6/20/27 | $ | 8,045,000 | $ | (455,477) | $ | 292,264 | $ | (163,213) |
^The value for credit default swap agreements serves as an indicator of the current status of the payment/performance risk and represent the likelihood of an expected liability or profit at the period end. Increasing values in absolute terms when compared to the notional amount of the credit default swap agreement represent a deterioration of the referenced entity's credit soundness and an increased likelihood or risk of a credit event occurring as defined in the agreement.
26
CENTRALLY CLEARED TOTAL RETURN SWAP AGREEMENTS | |||||||||||||||||||||||
Floating Rate Index | Pay/Receive Floating Rate Index at Termination | Fixed Rate | Termination Date | Notional Amount | Premiums Paid (Received) | Unrealized Appreciation (Depreciation) | Value | ||||||||||||||||
CPURNSA | Receive | 1.78% | 8/5/24 | $ | 3,500,000 | $ | (528) | $ | 441,294 | $ | 440,766 | ||||||||||||
CPURNSA | Receive | 2.34% | 2/5/26 | $ | 2,300,000 | 302 | 271,167 | 271,469 | |||||||||||||||
CPURNSA | Receive | 2.33% | 2/8/26 | $ | 4,000,000 | 524 | 471,993 | 472,517 | |||||||||||||||
CPURNSA | Receive | 2.30% | 2/24/26 | $ | 4,000,000 | 524 | 474,772 | 475,296 | |||||||||||||||
$ | 822 | $ | 1,659,226 | $ | 1,660,048 |
NOTES TO SCHEDULE OF INVESTMENTS | ||||||||
CDX | - | Credit Derivatives Indexes | ||||||
CPURNSA | - | U.S. Consumer Price Index Urban Consumers Not Seasonally Adjusted Index | ||||||
EUR | - | Euro | ||||||
FHLMC | - | Federal Home Loan Mortgage Corporation | ||||||
FNMA | - | Federal National Mortgage Association | ||||||
GNMA | - | Government National Mortgage Association | ||||||
GO | - | General Obligation | ||||||
H15T1Y | - | Constant Maturity U.S. Treasury Note Yield Curve Rate Index | ||||||
IO | - | Interest Only | ||||||
LIBOR | - | London Interbank Offered Rate | ||||||
SEQ | - | Sequential Payer | ||||||
SOFR | - | Secured Overnight Financing Rate | ||||||
TBA | - | To-Be-Announced. Security was purchased on a forward commitment basis with an approximate principal amount and maturity date. Actual principal amount and maturity date will be determined upon settlement. | ||||||
UMBS | - | Uniform Mortgage-Backed Securities | ||||||
USD | - | United States Dollar | ||||||
VRN | - | Variable Rate Note. The rate adjusts periodically based upon the terms set forth in the security’s offering documents. The rate shown is effective at the period end and the reference rate and spread, if any, is indicated. The security's effective maturity date may be shorter than the final maturity date shown. |
†Category is less than 0.05% of total net assets.
(1)Non-income producing.
(2)Security, or a portion thereof, has been pledged at the custodian bank or with a broker for collateral requirements on forward commitments, forward foreign currency exchange contracts, futures contracts and/or swap agreements. At the period end, the aggregate value of securities pledged was $1,729,195.
(3)Security was purchased pursuant to Rule 144A or Section 4(2) under the Securities Act of 1933 and may be sold in transactions exempt from registration, normally to qualified institutional investors. The aggregate value of these securities at the period end was $101,252,908, which represented 10.7% of total net assets.
(4)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.
(5)The interest rate on a bank loan obligation adjusts periodically based on a predetermined schedule. Rate or range of rates shown is effective at period end. The maturity date on a bank loan obligation may be less than indicated as a result of contractual or optional prepayments. These prepayments cannot be predicted with certainty.
See Notes to Financial Statements.
27
Statement of Assets and Liabilities |
APRIL 30, 2022 (UNAUDITED) | |||||
Assets | |||||
Investment securities, at value (cost of $949,561,273) | $ | 978,646,620 | |||
Receivable for investments sold | 6,905,897 | ||||
Receivable for capital shares sold | 57,455 | ||||
Receivable for variation margin on swap agreements | 52,089 | ||||
Unrealized appreciation on forward foreign currency exchange contracts | 218,884 | ||||
Interest and dividends receivable | 2,312,043 | ||||
988,192,988 | |||||
Liabilities | |||||
Disbursements in excess of demand deposit cash | 10,270 | ||||
Payable for investments purchased | 28,684,800 | ||||
Payable for capital shares redeemed | 10,270,217 | ||||
Payable for variation margin on futures contracts | 52,791 | ||||
Payable for variation margin on swap agreements | 625 | ||||
Unrealized depreciation on forward foreign currency exchange contracts | 25,199 | ||||
Accrued management fees | 727,700 | ||||
39,771,602 | |||||
Net Assets | $ | 948,421,386 | |||
Net Assets Consist of: | |||||
Capital (par value and paid-in surplus) | $ | 928,973,459 | |||
Distributable earnings | 19,447,927 | ||||
$ | 948,421,386 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | |||||||||
Investor Class, $0.01 Par Value | $859,108,155 | 51,361,264 | $16.73 | ||||||||
I Class, $0.01 Par Value | $83,556,847 | 4,990,885 | $16.74 | ||||||||
R5 Class, $0.01 Par Value | $5,756,384 | 343,923 | $16.74 |
See Notes to Financial Statements.
28
Statement of Operations |
FOR THE SIX MONTHS ENDED APRIL 30, 2022 (UNAUDITED) | |||||
Investment Income (Loss) | |||||
Income: | |||||
Interest (net of foreign taxes withheld of $46) | $ | 4,591,680 | |||
Dividends (net of foreign taxes withheld of $7,948) | 3,939,757 | ||||
8,531,437 | |||||
Expenses: | |||||
Management fees | 4,628,473 | ||||
Directors' fees and expenses | 11,348 | ||||
Other expenses | 6,274 | ||||
4,646,095 | |||||
Net investment income (loss) | 3,885,342 | ||||
Realized and Unrealized Gain (Loss) | |||||
Net realized gain (loss) on: | |||||
Investment transactions | (10,818,557) | ||||
Forward foreign currency exchange contract transactions | 356,919 | ||||
Futures contract transactions | 261,248 | ||||
Swap agreement transactions | 176,933 | ||||
(10,023,457) | |||||
Change in net unrealized appreciation (depreciation) on: | |||||
Investments | (120,111,881) | ||||
Forward foreign currency exchange contracts | 116,536 | ||||
Futures contracts | (723,681) | ||||
Swap agreements | 843,075 | ||||
Translation of assets and liabilities in foreign currencies | (164) | ||||
(119,876,115) | |||||
Net realized and unrealized gain (loss) | (129,899,572) | ||||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | (126,014,230) |
See Notes to Financial Statements.
29
Statement of Changes in Net Assets |
SIX MONTHS ENDED APRIL 30, 2022 (UNAUDITED) AND YEAR ENDED OCTOBER 31, 2021 | ||||||||
Increase (Decrease) in Net Assets | April 30, 2022 | October 31, 2021 | ||||||
Operations | ||||||||
Net investment income (loss) | $ | 3,885,342 | $ | 7,300,591 | ||||
Net realized gain (loss) | (10,023,457) | 207,770,676 | ||||||
Change in net unrealized appreciation (depreciation) | (119,876,115) | 2,196,589 | ||||||
Net increase (decrease) in net assets resulting from operations | (126,014,230) | 217,267,856 | ||||||
Distributions to Shareholders | ||||||||
From earnings: | ||||||||
Investor Class | (177,364,504) | (51,263,128) | ||||||
I Class | (19,227,724) | (6,239,355) | ||||||
R5 Class | (1,278,411) | (238,351) | ||||||
Decrease in net assets from distributions | (197,870,639) | (57,740,834) | ||||||
Capital Share Transactions | ||||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | 154,641,271 | 13,739,758 | ||||||
Net increase (decrease) in net assets | (169,243,598) | 173,266,780 | ||||||
Net Assets | ||||||||
Beginning of period | 1,117,664,984 | 944,398,204 | ||||||
End of period | $ | 948,421,386 | $ | 1,117,664,984 |
See Notes to Financial Statements.
30
Notes to Financial Statements |
APRIL 30, 2022 (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’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, I Class and R5 Class.
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 (NAV) 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 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. Corporate bonds, U.S. Treasury and Government Agency securities, convertible bonds, bank loan obligations, municipal securities, and sovereign governments and agencies are valued using market models that consider trade data, quotations from dealers and active market makers, relevant yield curve and spread data, creditworthiness, trade data or market information on comparable securities, and other relevant security specific information. Mortgage-related and asset-backed securities are valued based on models that consider trade data, prepayment and default projections, benchmark yield and spread data and estimated cash flows of each tranche of the issuer. Collateralized loan obligations are valued based on discounted cash flow models that consider trade and economic data, prepayment assumptions and default projections.
Hybrid securities 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. Preferred stocks and convertible preferred stocks with perpetual maturities are valued using market models that consider trade data, quotations from dealers and active market makers, relevant yield curve and spread data, creditworthiness, trade data or market information on comparable securities, and other relevant security specific information.
31
Open-end management investment companies are valued at the reported NAV per share. Exchange-traded futures contracts are valued at the settlement price as provided by the appropriate exchange. Swap agreements are valued at an evaluated mean as provided by independent pricing services or independent brokers. 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 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 NAV 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. 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.
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.
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 less foreign taxes withheld, if any, 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 investment securities and other financial instruments. 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 collateral requirements.
32
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. 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.
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 ACIM will pay all expenses of managing and operating the fund, except brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), and extraordinary expenses. The fee is computed and accrued daily based on each class's daily net assets and paid monthly in arrears. The difference in the fee among the classes is a result of their separate arrangements for non-Rule 12b-1 shareholder services. It is not the result of any difference in advisory or custodial fees or other expenses related to the management of the fund’s assets, which do not vary by class. 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 use very similar investment teams and strategies (strategy assets).
The management fee schedule range and the effective annual management fee for each class for the period ended April 30, 2022 are as follows:
Management Fee Schedule Range | Effective Annual Management Fee | |||||||
Investor Class | 0.800% to 0.900% | 0.90% | ||||||
I Class | 0.600% to 0.700% | 0.70% | ||||||
R5 Class | 0.600% to 0.700% | 0.70% |
33
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.
Interfund Transactions — The fund may enter into security transactions with other American Century Investments funds and other client accounts of the investment advisor, in accordance with the 1940 Act rules and procedures adopted by the Board of Directors. The rules and procedures require, among other things, that these transactions be effected at the independent current market price of the security. There were no interfund transactions during the period.
4. Investment Transactions
Purchases of investment securities, excluding short-term investments, for the period ended April 30, 2022 totaled $560,545,412, of which $414,390,713 represented U.S. Treasury and Government Agency obligations.
Sales of investment securities, excluding short-term investments, for the period ended April 30, 2022 totaled $580,276,266, of which $401,471,250 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, 2022 | Year ended October 31, 2021 | |||||||||||||
Shares | Amount | Shares | Amount | |||||||||||
Investor Class/Shares Authorized | 530,000,000 | 530,000,000 | ||||||||||||
Sold | 1,967,740 | $ | 38,555,701 | 4,157,746 | $ | 88,713,677 | ||||||||
Issued in reinvestment of distributions | 9,101,914 | 172,488,758 | 2,448,377 | 49,436,486 | ||||||||||
Redeemed | (3,370,145) | (64,227,066) | (5,592,077) | (119,705,514) | ||||||||||
7,699,509 | 146,817,393 | 1,014,046 | 18,444,649 | |||||||||||
I Class/Shares Authorized | 50,000,000 | 50,000,000 | ||||||||||||
Sold | 376,149 | 7,279,065 | 904,798 | 19,191,359 | ||||||||||
Issued in reinvestment of distributions | 1,013,556 | 19,215,366 | 308,467 | 6,238,096 | ||||||||||
Redeemed | (1,092,356) | (19,433,337) | (1,561,092) | (32,908,772) | ||||||||||
297,349 | 7,061,094 | (347,827) | (7,479,317) | |||||||||||
R5 Class/Shares Authorized | 20,000,000 | 30,000,000 | ||||||||||||
Sold | 19,505 | 389,809 | 132,639 | 2,910,360 | ||||||||||
Issued in reinvestment of distributions | 67,467 | 1,278,411 | 11,751 | 238,351 | ||||||||||
Redeemed | (49,814) | (905,436) | (17,242) | (374,285) | ||||||||||
37,158 | 762,784 | 127,148 | 2,774,426 | |||||||||||
Net increase (decrease) | 8,034,016 | $ | 154,641,271 | 793,367 | $ | 13,739,758 |
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).
34
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.
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 | $ | 557,085,914 | $ | 8,314,014 | — | ||||||
U.S. Treasury Securities | — | 165,030,320 | — | ||||||||
Corporate Bonds | — | 103,695,884 | — | ||||||||
U.S. Government Agency Mortgage-Backed Securities | — | 43,050,755 | — | ||||||||
Asset-Backed Securities | — | 26,285,193 | — | ||||||||
Collateralized Mortgage Obligations | — | 26,116,303 | — | ||||||||
Collateralized Loan Obligations | — | 22,010,902 | — | ||||||||
Commercial Mortgage-Backed Securities | — | 9,082,277 | — | ||||||||
Municipal Securities | — | 6,166,012 | — | ||||||||
U.S. Government Agency Securities | — | 2,787,584 | — | ||||||||
Sovereign Governments and Agencies | — | 1,413,821 | — | ||||||||
Exchange-Traded Funds | 1,336,212 | — | — | ||||||||
Bank Loan Obligations | — | 1,060,404 | — | ||||||||
Preferred Stocks | — | 52,918 | — | ||||||||
Short-Term Investments | 5,158,107 | — | — | ||||||||
$ | 563,580,233 | $ | 415,066,387 | — | |||||||
Other Financial Instruments | |||||||||||
Futures Contracts | $ | 90 | — | — | |||||||
Swap Agreements | — | $ | 1,660,048 | — | |||||||
Forward Foreign Currency Exchange Contracts | — | 218,884 | — | ||||||||
$ | 90 | $ | 1,878,932 | — | |||||||
Liabilities | |||||||||||
Other Financial Instruments | |||||||||||
Futures Contracts | $ | 697,220 | — | — | |||||||
Swap Agreements | — | $ | 163,213 | — | |||||||
Forward Foreign Currency Exchange Contracts | — | 25,199 | — | ||||||||
$ | 697,220 | $ | 188,412 | — |
35
7. Derivative Instruments
Credit Risk — The fund is subject to credit risk in the normal course of pursuing its investment objectives. The value of a bond generally declines as the credit quality of its issuer declines. Credit default swap agreements enable a fund to buy/sell protection against a credit event of a specific issuer or index. A fund may attempt to enhance returns by selling protection or attempt to mitigate credit risk by buying protection. The buyer/seller of credit protection against a security or basket of securities may pay/receive an up-front or periodic payment to compensate for/against potential default events. Changes in value, including the periodic amounts of interest to be paid or received on swap agreements, are recorded as unrealized appreciation (depreciation) on swap agreements. Upon entering into a centrally cleared swap, a fund is required to deposit cash or securities (initial margin) with a financial intermediary in an amount equal to a certain percentage of the notional amount. 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 value and is a component of unrealized gains and losses. Realized gain or loss is recorded upon receipt or payment of a periodic settlement or termination of swap agreements. Net realized and unrealized gains or losses occurring during the holding period of swap agreements are a component of net realized gain (loss) on swap agreement transactions and change in net unrealized appreciation (depreciation) on swap agreements, respectively. The risks of entering into swap agreements include the possible lack of liquidity, failure of the counterparty to meet its obligations, and that there may be unfavorable changes in the underlying investments or instruments. The fund's average notional amount held during the period was $8,045,000.
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 settlement 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 forward foreign currency exchange contract transactions and change in net unrealized appreciation (depreciation) on forward foreign currency exchange contracts, 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 $7,384,944.
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. The fund's average notional exposure to interest rate risk derivative instruments held during the period was $14,688,276 futures contracts purchased and $7,701,644 futures contracts sold.
36
Other Contracts — A fund may enter into total return swap agreements in order to attempt to obtain or preserve a particular return or spread at a lower cost than obtaining a return or spread through purchases and/or sales of instruments in other markets or gain exposure to certain markets in the most economical way possible. A fund will segregate cash, cash equivalents or other appropriate liquid securities on its records in amounts sufficient to meet requirements. Changes in value, including the periodic amounts of interest to be paid or received on swap agreements, are recorded as unrealized appreciation (depreciation) on swap agreements. Upon entering into a centrally cleared swap, a fund is required to deposit cash or securities (initial margin) with a financial intermediary in an amount equal to a certain percentage of the notional amount. 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 value and is a component of unrealized gains and losses. Realized gain or loss is recorded upon receipt or payment of a periodic settlement or termination of swap agreements. Net realized and unrealized gains or losses occurring during the holding period of swap agreements are a component of net realized gain (loss) on swap agreement transactions and change in net unrealized appreciation (depreciation) on swap agreements, respectively. The risks of entering into swap agreements include the possible lack of liquidity, failure of the counterparty to meet its obligations, and that there may be unfavorable changes in the underlying investments or instruments, including inflationary risk. The fund's average notional amount held during the period was $14,466,667.
Value of Derivative Instruments as of April 30, 2022
Asset Derivatives | Liability Derivatives | |||||||||||||
Type of Risk Exposure | Location on Statement of Assets and Liabilities | Value | Location on Statement of Assets and Liabilities | Value | ||||||||||
Credit Risk | Receivable for variation margin on swap agreements* | $ | 52,089 | Payable for variation margin on swap agreements* | — | |||||||||
Foreign Currency Risk | Unrealized appreciation on forward foreign currency exchange contracts | 218,884 | Unrealized depreciation on forward foreign currency exchange contracts | $ | 25,199 | |||||||||
Interest Rate Risk | Receivable for variation margin on futures contracts* | — | Payable for variation margin on futures contracts* | 52,791 | ||||||||||
Other Contracts | Receivable for variation margin on swap agreements* | — | Payable for variation margin on swap agreements* | 625 | ||||||||||
$ | 270,973 | $ | 78,615 |
*Included in the unrealized appreciation (depreciation) on futures contracts or centrally cleared swap agreements, as applicable, as reported in the Schedule of Investments.
Effect of Derivative Instruments on the Statement of Operations for the Six Months Ended April 30, 2022
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 | ||||||||||
Credit Risk | Net realized gain (loss) on swap agreement transactions | $ | 17,825 | Change in net unrealized appreciation (depreciation) on swap agreements | $ | 292,264 | ||||||||
Foreign Currency Risk | Net realized gain (loss) on forward foreign currency exchange contract transactions | 356,919 | Change in net unrealized appreciation (depreciation) on forward foreign currency exchange contracts | 116,536 | ||||||||||
Interest Rate Risk | Net realized gain (loss) on futures contract transactions | 261,248 | Change in net unrealized appreciation (depreciation) on futures contracts | (723,681) | ||||||||||
Other Contracts | Net realized gain (loss) on swap agreement transactions | 159,108 | Change in net unrealized appreciation (depreciation) on swap agreements | 550,811 | ||||||||||
$ | 795,100 | $ | 235,930 |
37
8. Risk Factors
The value of the fund’s shares will go up and down, sometimes rapidly or unpredictably, based on the performance of the securities owned by the fund and other factors generally affecting the securities market. Market risks, including political, regulatory, economic and social developments, can affect the value of the fund’s investments. Natural disasters, public health emergencies, war, terrorism and other unforeseeable events may lead to increased market volatility and may have adverse long-term effects on world economies and markets generally.
The fund may invest in instruments that have variable or floating coupon rates based on the London Interbank Offered Rate (LIBOR). LIBOR is a benchmark interest rate intended to be representative of the rate at which certain major international banks lend to one another over short-terms. Financial institutions have started the process of phasing out LIBOR and the transition process to a replacement rate may lead to increased volatility or illiquidity in markets for instruments that rely on LIBOR. This could result in a change to the value of such instruments or a change in the cost of temporary borrowing for the fund.
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 period end, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $ | 952,230,828 | |||
Gross tax appreciation of investments | $ | 106,754,221 | |||
Gross tax depreciation of investments | (80,338,429) | ||||
Net tax appreciation (depreciation) of investments | $ | 26,415,792 |
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 | |||||||||||||||||||||||||||||||||||||||||
2022(3) | $22.97 | 0.07 | (2.24) | (2.17) | (0.06) | (4.01) | (4.07) | $16.73 | (11.51)% | 0.90%(4) | 0.71%(4) | 52% | $859,108 | ||||||||||||||||||||||||||||
2021 | $19.73 | 0.14 | 4.30 | 4.44 | (0.17) | (1.03) | (1.20) | $22.97 | 23.34% | 0.90% | 0.67% | 225% | $1,002,740 | ||||||||||||||||||||||||||||
2020 | $19.25 | 0.20 | 1.22 | 1.42 | (0.25) | (0.69) | (0.94) | $19.73 | 7.54% | 0.90% | 1.03% | 165% | $841,328 | ||||||||||||||||||||||||||||
2019 | $18.55 | 0.29 | 1.73 | 2.02 | (0.29) | (1.03) | (1.32) | $19.25 | 11.82% | 0.90% | 1.58% | 101% | $838,309 | ||||||||||||||||||||||||||||
2018 | $19.31 | 0.25 | 0.09 | 0.34 | (0.25) | (0.85) | (1.10) | $18.55 | 1.72% | 0.90% | 1.32% | 115% | $798,120 | ||||||||||||||||||||||||||||
2017 | $17.39 | 0.26 | 2.10 | 2.36 | (0.28) | (0.16) | (0.44) | $19.31 | 13.78% | 0.91% | 1.44% | 112% | $814,569 | ||||||||||||||||||||||||||||
I Class | |||||||||||||||||||||||||||||||||||||||||
2022(3) | $22.98 | 0.09 | (2.24) | (2.15) | (0.08) | (4.01) | (4.09) | $16.74 | (11.42)% | 0.70%(4) | 0.91%(4) | 52% | $83,557 | ||||||||||||||||||||||||||||
2021 | $19.74 | 0.19 | 4.29 | 4.48 | (0.21) | (1.03) | (1.24) | $22.98 | 23.58% | 0.70% | 0.87% | 225% | $107,875 | ||||||||||||||||||||||||||||
2020 | $19.26 | 0.23 | 1.23 | 1.46 | (0.29) | (0.69) | (0.98) | $19.74 | 7.75% | 0.70% | 1.23% | 165% | $99,524 | ||||||||||||||||||||||||||||
2019 | $18.56 | 0.33 | 1.72 | 2.05 | (0.32) | (1.03) | (1.35) | $19.26 | 12.04% | 0.70% | 1.78% | 101% | $68,889 | ||||||||||||||||||||||||||||
2018 | $19.32 | 0.29 | 0.09 | 0.38 | (0.29) | (0.85) | (1.14) | $18.56 | 1.92% | 0.70% | 1.52% | 115% | $62,077 | ||||||||||||||||||||||||||||
2017 | $17.40 | 0.30 | 2.09 | 2.39 | (0.31) | (0.16) | (0.47) | $19.32 | 13.99% | 0.71% | 1.64% | 112% | $73,385 |
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) | |||||||||||||||||||||||||||||
R5 Class | |||||||||||||||||||||||||||||||||||||||||
2022(3) | $22.98 | 0.09 | (2.24) | (2.15) | (0.08) | (4.01) | (4.09) | $16.74 | (11.41)% | 0.70%(4) | 0.91%(4) | 52% | $5,756 | ||||||||||||||||||||||||||||
2021 | $19.74 | 0.18 | 4.30 | 4.48 | (0.21) | (1.03) | (1.24) | $22.98 | 23.58% | 0.70% | 0.87% | 225% | $7,050 | ||||||||||||||||||||||||||||
2020 | $19.26 | 0.24 | 1.22 | 1.46 | (0.29) | (0.69) | (0.98) | $19.74 | 7.75% | 0.70% | 1.23% | 165% | $3,545 | ||||||||||||||||||||||||||||
2019 | $18.56 | 0.33 | 1.72 | 2.05 | (0.32) | (1.03) | (1.35) | $19.26 | 12.04% | 0.70% | 1.78% | 101% | $3,053 | ||||||||||||||||||||||||||||
2018 | $19.32 | 0.30 | 0.08 | 0.38 | (0.29) | (0.85) | (1.14) | $18.56 | 1.93% | 0.70% | 1.52% | 115% | $2,574 | ||||||||||||||||||||||||||||
2017(5) | $18.18 | 0.17 | 1.14 | 1.31 | (0.17) | — | (0.17) | $19.32 | 7.21% | 0.71%(4) | 1.66%(4) | 112%(6) | $5 |
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, 2022 (unaudited).
(4)Annualized.
(5)April 10, 2017 (commencement of sale) through October 31, 2017.
(6)Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended October 31, 2017.
See Notes to Financial Statements.
Liquidity Risk Management Program |
The Fund has adopted a liquidity risk management program (the “program”). The Fund’s Board of Directors (the "Board") has designated American Century Investment Management, Inc. (“ACIM”) as the administrator of the program. Personnel of ACIM or its affiliates conduct the day-to-day operation of the program pursuant to policies and procedures administered by the Program Administrator, including members of ACIM’s Investment Oversight Committee who are members of the ACIM’s Investment Management and Global Analytics departments.
Under the program, ACIM manages the Fund’s liquidity risk, which is the risk that the Fund could not meet shareholder redemption requests without significant dilution of remaining shareholders’ interests in the Fund. This risk is managed by monitoring the degree of liquidity of the Fund’s investments, limiting the amount of the Fund’s illiquid investments, and utilizing various risk management tools and facilities available to the Fund for meeting shareholder redemptions, among other means. ACIM’s process of determining the degree of liquidity of certain Fund’s investments is supported by a third-party liquidity assessment vendor.
The Board reviewed a report prepared by ACIM regarding the operation and effectiveness of the program for the period January 1, 2021 through December 31, 2021. No significant liquidity events impacting the Fund were noted in the report. In addition, ACIM provided its assessment that the program had been effective in managing the Fund’s liquidity risk.
41
Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain retirement accounts 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 and change your withholding percentage for future distributions.
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.
*Some 403(b), 457 and qualified retirement plan distributions may be subject to 20% mandatory withholding, as they 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 American Century Investments’ website at americancentury.com/proxy 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 americancentury.com/proxy. 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 as an exhibit to its reports on Form N-PORT. These portfolio holdings are available on the fund's website at americancentury.com and, upon request, by calling 1-800-345-2021. The fund’s Form N-PORT reports are available on the SEC’s website at sec.gov.
42
Notes |
43
Notes |
44
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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. | ||||||||
©2022 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-92356 2206 |
![image8.jpg](https://capedge.com/proxy/N-CSRS/0000100334-22-000050/image8.jpg)
Semiannual Report | |||||
April 30, 2022 | |||||
Growth Fund | |||||
Investor Class (TWCGX) | |||||
I Class (TWGIX) | |||||
Y Class (AGYWX) | |||||
A Class (TCRAX) | |||||
C Class (TWRCX) | |||||
R Class (AGWRX) | |||||
R5 Class (AGWUX) | |||||
R6 Class (AGRDX) | |||||
G Class (ACIHX) |
Table of Contents |
President’s Letter | |||||
Fund Characteristics | |||||
Shareholder Fee Example | |||||
Schedule of Investments | |||||
Statement of Assets and Liabilities | |||||
Statement of Operations | |||||
Statement of Changes in Net Assets | |||||
Notes to Financial Statements | |||||
Financial Highlights | |||||
Liquidity Risk Management Program | |||||
Additional Information |
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 |
![image30.jpg](https://capedge.com/proxy/N-CSRS/0000100334-22-000050/image30.jpg)
Dear Investor:
Thank you for reviewing this semiannual report for the period ended April 30, 2022. It provides a market overview (below), followed by a schedule of fund investments and other financial information. For additional investment insights, please visit americancentury.com.
Escalating Inflation, Sharp Volatility Hampered Investment Returns
Investors faced increasingly challenging market conditions as the reporting period progressed. From soaring inflation and rising interest rates to mounting geopolitical unrest and slowing growth, most asset classes struggled amid intense volatility.
Inflation was already at multiyear highs when the reporting period began. This was largely due to massive fiscal and monetary support, escalating energy prices, supply chain breakdowns and labor market shortages. Russia’s invasion of Ukraine in February sent commodity prices even higher, exacerbating existing inflationary pressures and further damaging global supply chains.
By period-end, inflation stood at a 40-year high in the U.S., a 30-year high in the U.K. and a record high in the eurozone. Most emerging markets also grappled with rising inflation. At the same time, global growth slowed dramatically.
In response to surging inflation, the Federal Reserve in March implemented its first rate hike in more than three years and ended its asset purchase program. The Bank of England executed a series of rate hikes, while European Central Bank officials announced their asset purchase program would end in the third quarter.
The combination of accelerating inflation, tighter monetary policy, geopolitical unrest and slowing economic growth fueled widespread and sharp market volatility. Global stock and bond returns plunged for the six-month period. Perceived inflation-fighting assets, including real estate investment trusts, generally fared much better than other securities.
Staying Disciplined in Uncertain Times
We expect market volatility to linger as investors navigate this complex backdrop. In addition, Russia’s invasion of Ukraine has further complicated a tense geopolitical environment. We will continue to monitor the evolving situation and its implications for our clients and investment exposure.
We appreciate your confidence in us during these extraordinary times. Our firm has a long history of helping clients weather unpredictable markets, and we’re confident we will continue to meet today’s challenges.
Sincerely,
![image27.jpg](https://capedge.com/proxy/N-CSRS/0000100334-22-000050/image27.jpg)
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
2
Fund Characteristics |
APRIL 30, 2022 | |||||
Types of Investments in Portfolio | % of net assets | ||||
Common Stocks | 99.0% | ||||
Exchange-Traded Funds | 0.1% | ||||
Short-Term Investments | 0.9% | ||||
Other Assets and Liabilities | —* | ||||
*Category is less than 0.05% of total net assets. | |||||
Top Five Industries* | % of net assets | ||||
Software | 17.8% | ||||
Technology Hardware, Storage and Peripherals | 10.8% | ||||
Interactive Media and Services | 9.4% | ||||
Semiconductors and Semiconductor Equipment | 7.9% | ||||
Internet and Direct Marketing Retail | 6.7% |
*Exposure indicated excludes Exchange-Traded Funds. The Schedule of Investments provides additional information on the fund's portfolio holdings.
3
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, 2021 to April 30, 2022 (except as noted).
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 I Class shares of the American Century Diversified Bond Fund, in an American Century Investments account (i.e., not through a financial intermediary or employer-sponsored retirement plan account), American Century Investments may charge you a $25.00 annual 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 $25.00 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.
4
Beginning Account Value 11/1/21 | Ending Account Value 4/30/22 | Expenses Paid During Period(1) 11/1/21 - 4/30/22 | Annualized Expense Ratio(1) | |||||||||||
Actual | ||||||||||||||
Investor Class | $1,000 | $803.80 | $4.25 | 0.95% | ||||||||||
I Class | $1,000 | $804.60 | $3.36 | 0.75% | ||||||||||
Y Class | $1,000 | $805.40 | $2.69 | 0.60% | ||||||||||
A Class | $1,000 | $802.80 | $5.36 | 1.20% | ||||||||||
C Class | $1,000 | $800.00 | $8.70 | 1.95% | ||||||||||
R Class | $1,000 | $801.90 | $6.48 | 1.45% | ||||||||||
R5 Class | $1,000 | $804.50 | $3.36 | 0.75% | ||||||||||
R6 Class | $1,000 | $805.20 | $2.69 | 0.60% | ||||||||||
G Class | $1,000 | $921.00 | $0.00(2) | 0.00%(3) | ||||||||||
Hypothetical | ||||||||||||||
Investor Class | $1,000 | $1,020.08 | $4.76 | 0.95% | ||||||||||
I Class | $1,000 | $1,021.08 | $3.76 | 0.75% | ||||||||||
Y Class | $1,000 | $1,021.82 | $3.01 | 0.60% | ||||||||||
A Class | $1,000 | $1,018.84 | $6.01 | 1.20% | ||||||||||
C Class | $1,000 | $1,015.13 | $9.74 | 1.95% | ||||||||||
R Class | $1,000 | $1,017.60 | $7.25 | 1.45% | ||||||||||
R5 Class | $1,000 | $1,021.08 | $3.76 | 0.75% | ||||||||||
R6 Class | $1,000 | $1,021.82 | $3.01 | 0.60% | ||||||||||
G Class | $1,000 | $1,024.80 | $0.00 | 0.00%(3) |
(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. Annualized expense ratio reflects actual expenses, including any applicable fee waivers or expense reimbursements and excluding any acquired fund fees and expenses.
(2)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 61, the number of days in the period from March 1, 2022 (commencement of sale) through April 30, 2022, divided by 365, to reflect the period. Had the class been available for the full period, the expenses paid during the period would have been higher.
(3)Other expenses, which include directors' fees and expenses, did not exceed 0.005%.
5
Schedule of Investments |
APRIL 30, 2022 (UNAUDITED)
Shares | Value | |||||||
COMMON STOCKS — 99.0% | ||||||||
Aerospace and Defense — 1.1% | ||||||||
Lockheed Martin Corp. | 298,066 | $ | 128,800,280 | |||||
Air Freight and Logistics — 1.6% | ||||||||
United Parcel Service, Inc., Class B | 1,079,476 | 194,284,090 | ||||||
Auto Components — 1.0% | ||||||||
Aptiv PLC(1) | 1,106,893 | 117,773,415 | ||||||
Automobiles — 3.6% | ||||||||
Tesla, Inc.(1) | 486,512 | 423,635,189 | ||||||
Beverages — 2.1% | ||||||||
PepsiCo, Inc. | 1,467,775 | 252,031,645 | ||||||
Biotechnology — 1.5% | ||||||||
Amgen, Inc. | 298,176 | 69,531,662 | ||||||
Vertex Pharmaceuticals, Inc.(1) | 416,837 | 113,888,205 | ||||||
183,419,867 | ||||||||
Building Products — 0.7% | ||||||||
Masco Corp. | 1,006,318 | 53,022,896 | ||||||
Trex Co., Inc.(1) | 575,369 | 33,480,722 | ||||||
86,503,618 | ||||||||
Capital Markets — 1.6% | ||||||||
S&P Global, Inc. | 503,166 | 189,441,999 | ||||||
Chemicals — 0.7% | ||||||||
Air Products and Chemicals, Inc. | 382,512 | 89,534,584 | ||||||
Electrical Equipment — 1.8% | ||||||||
Generac Holdings, Inc.(1) | 377,799 | 82,881,544 | ||||||
Rockwell Automation, Inc. | 533,819 | 134,880,047 | ||||||
217,761,591 | ||||||||
Electronic Equipment, Instruments and Components — 2.3% | ||||||||
CDW Corp. | 617,617 | 100,782,742 | ||||||
Cognex Corp. | 1,167,538 | 78,960,595 | ||||||
Keysight Technologies, Inc.(1) | 648,235 | 90,927,923 | ||||||
270,671,260 | ||||||||
Energy Equipment and Services — 0.3% | ||||||||
Schlumberger NV | 835,537 | 32,594,298 | ||||||
Entertainment — 1.9% | ||||||||
Liberty Media Corp.-Liberty Formula One, Class C(1) | 1,009,786 | 62,939,961 | ||||||
Take-Two Interactive Software, Inc.(1) | 390,761 | 46,699,847 | ||||||
Walt Disney Co.(1) | 1,000,965 | 111,737,723 | ||||||
221,377,531 | ||||||||
Equity Real Estate Investment Trusts (REITs) — 1.0% | ||||||||
SBA Communications Corp. | 360,965 | 125,294,561 | ||||||
Food Products — 0.9% | ||||||||
Mondelez International, Inc., Class A | 1,410,775 | 90,966,772 | ||||||
Vital Farms, Inc.(1) | 975,643 | 11,219,895 | ||||||
102,186,667 | ||||||||
Health Care Equipment and Supplies — 2.3% | ||||||||
DexCom, Inc.(1) | 126,542 | 51,702,530 | ||||||
Edwards Lifesciences Corp.(1) | 687,045 | 72,675,620 |
6
Shares | Value | |||||||
IDEXX Laboratories, Inc.(1) | 134,695 | $ | 57,983,504 | |||||
Intuitive Surgical, Inc.(1) | 367,805 | 88,015,737 | ||||||
270,377,391 | ||||||||
Health Care Providers and Services — 2.1% | ||||||||
UnitedHealth Group, Inc. | 480,783 | 244,502,195 | ||||||
Hotels, Restaurants and Leisure — 2.1% | ||||||||
Airbnb, Inc., Class A(1) | 263,736 | 40,406,992 | ||||||
Chipotle Mexican Grill, Inc.(1) | 64,524 | 93,921,780 | ||||||
Dutch Bros, Inc., Class A(1)(2) | 505,814 | 24,162,735 | ||||||
Expedia Group, Inc.(1) | 492,336 | 86,035,716 | ||||||
244,527,223 | ||||||||
Household Products — 1.3% | ||||||||
Procter & Gamble Co. | 945,955 | 151,873,075 | ||||||
Interactive Media and Services — 9.4% | ||||||||
Alphabet, Inc., Class A(1) | 411,632 | 939,422,434 | ||||||
Meta Platforms, Inc., Class A(1) | 652,788 | 130,864,410 | ||||||
Snap, Inc., Class A(1) | 1,528,460 | 43,499,972 | ||||||
1,113,786,816 | ||||||||
Internet and Direct Marketing Retail — 6.7% | ||||||||
Amazon.com, Inc.(1) | 319,063 | 793,072,565 | ||||||
IT Services — 6.6% | ||||||||
Mastercard, Inc., Class A | 121,471 | 44,140,132 | ||||||
Okta, Inc.(1) | 327,735 | 39,102,063 | ||||||
PayPal Holdings, Inc.(1) | 404,435 | 35,561,969 | ||||||
Twilio, Inc., Class A(1) | 377,168 | 42,174,926 | ||||||
Visa, Inc., Class A | 2,952,617 | 629,291,261 | ||||||
790,270,351 | ||||||||
Life Sciences Tools and Services — 1.3% | ||||||||
Agilent Technologies, Inc. | 881,918 | 105,186,360 | ||||||
Repligen Corp.(1) | 317,933 | 49,991,785 | ||||||
155,178,145 | ||||||||
Personal Products — 0.8% | ||||||||
Estee Lauder Cos., Inc., Class A | 367,436 | 97,025,150 | ||||||
Pharmaceuticals — 1.8% | ||||||||
Novo Nordisk A/S, B Shares | 779,285 | 89,014,789 | ||||||
Zoetis, Inc. | 689,027 | 122,130,036 | ||||||
211,144,825 | ||||||||
Road and Rail — 2.1% | ||||||||
Lyft, Inc., Class A(1) | 2,119,334 | 69,090,288 | ||||||
Uber Technologies, Inc.(1) | 2,159,607 | 67,984,428 | ||||||
Union Pacific Corp. | 501,457 | 117,486,361 | ||||||
254,561,077 | ||||||||
Semiconductors and Semiconductor Equipment — 7.9% | ||||||||
Advanced Micro Devices, Inc.(1) | 2,217,523 | 189,642,567 | ||||||
Analog Devices, Inc. | 1,180,860 | 182,301,167 | ||||||
ASML Holding NV(2) | 291,361 | 165,358,578 | ||||||
GLOBALFOUNDRIES, Inc.(1) | 423,057 | 22,121,651 | ||||||
NVIDIA Corp. | 2,066,271 | 383,231,282 | ||||||
942,655,245 | ||||||||
Software — 17.8% | ||||||||
Crowdstrike Holdings, Inc., Class A(1) | 304,740 | 60,570,122 | ||||||
Datadog, Inc., Class A(1) | 478,699 | 57,817,265 |
7
Shares/Principal Amount | Value | |||||||
Microsoft Corp. | 5,915,064 | $ | 1,641,548,561 | |||||
PagerDuty, Inc.(1) | 1,550,926 | 44,309,956 | ||||||
Paycor HCM, Inc.(1) | 486,219 | 11,975,574 | ||||||
Salesforce, Inc.(1) | 384,016 | 67,563,775 | ||||||
Splunk, Inc.(1) | 562,749 | 68,666,633 | ||||||
UiPath, Inc., Class A(1) | 1,699,385 | 30,300,035 | ||||||
Workday, Inc., Class A(1) | 401,978 | 83,088,853 | ||||||
Zendesk, Inc.(1) | 462,172 | 56,403,471 | ||||||
2,122,244,245 | ||||||||
Specialty Retail — 2.3% | ||||||||
Home Depot, Inc. | 925,653 | 278,066,161 | ||||||
Technology Hardware, Storage and Peripherals — 10.8% | ||||||||
Apple, Inc. | 8,143,554 | 1,283,831,288 | ||||||
Textiles, Apparel and Luxury Goods — 1.6% | ||||||||
NIKE, Inc., Class B | 1,538,120 | 191,803,564 | ||||||
TOTAL COMMON STOCKS (Cost $5,915,508,386) | 11,780,229,911 | |||||||
EXCHANGE-TRADED FUNDS — 0.1% | ||||||||
SPDR S&P 500 ETF Trust (Cost $9,716,863) | 21,612 | 8,904,144 | ||||||
SHORT-TERM INVESTMENTS — 0.9% | ||||||||
Discount Notes — 0.2% | ||||||||
Federal Farm Credit Discount Notes, 0.23%, 5/2/22(3) | $ | 20,000,000 | 20,000,000 | |||||
Money Market Funds† | ||||||||
State Street Institutional U.S. Government Money Market Fund, Premier Class | 1,189,270 | 1,189,270 | ||||||
State Street Navigator Securities Lending Government Money Market Portfolio(4) | 2,624,554 | 2,624,554 | ||||||
3,813,824 | ||||||||
Repurchase Agreements — 0.7% | ||||||||
BMO Capital Markets Corp., (collateralized by various U.S. Treasury obligations, 3.00% - 3.625%, 8/15/43 - 8/15/48, valued at $7,689,816), in a joint trading account at 0.25%, dated 4/29/22, due 5/2/22 (Delivery value $7,557,189) | 7,557,032 | |||||||
Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 1.00%, 2/15/48, valued at $77,086,623), at 0.24%, dated 4/29/22, due 5/2/22 (Delivery value $75,576,512) | 75,575,000 | |||||||
83,132,032 | ||||||||
TOTAL SHORT-TERM INVESTMENTS (Cost $106,945,728) | 106,945,856 | |||||||
TOTAL INVESTMENT SECURITIES — 100.0% (Cost $6,032,170,977) | 11,896,079,911 | |||||||
OTHER ASSETS AND LIABILITIES† | 433,631 | |||||||
TOTAL NET ASSETS — 100.0% | $ | 11,896,513,542 |
8
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS | ||||||||||||||||||||
Currency Purchased | Currency Sold | Counterparty | Settlement Date | Unrealized Appreciation (Depreciation) | ||||||||||||||||
EUR | 5,200,794 | USD | 5,686,943 | JPMorgan Chase Bank N.A. | 6/30/22 | $ | (185,008) | |||||||||||||
EUR | 6,785,798 | USD | 7,411,231 | JPMorgan Chase Bank N.A. | 6/30/22 | (232,516) | ||||||||||||||
EUR | 4,829,309 | USD | 5,247,314 | JPMorgan Chase Bank N.A. | 6/30/22 | (138,375) | ||||||||||||||
EUR | 5,002,668 | USD | 5,375,017 | JPMorgan Chase Bank N.A. | 6/30/22 | (82,679) | ||||||||||||||
EUR | 5,819,936 | USD | 6,219,067 | JPMorgan Chase Bank N.A. | 6/30/22 | (62,140) | ||||||||||||||
EUR | 4,532,120 | USD | 4,800,558 | JPMorgan Chase Bank N.A. | 6/30/22 | (6,014) | ||||||||||||||
USD | 148,971,759 | EUR | 134,755,706 | JPMorgan Chase Bank N.A. | 6/30/22 | 6,413,302 | ||||||||||||||
USD | 20,783,021 | EUR | 18,841,072 | JPMorgan Chase Bank N.A. | 6/30/22 | 850,996 | ||||||||||||||
USD | 3,707,653 | EUR | 3,417,665 | JPMorgan Chase Bank N.A. | 6/30/22 | 92,096 | ||||||||||||||
USD | 6,819,226 | EUR | 6,265,718 | JPMorgan Chase Bank N.A. | 6/30/22 | 190,704 | ||||||||||||||
USD | 5,065,660 | EUR | 4,779,777 | JPMorgan Chase Bank N.A. | 6/30/22 | 9,120 | ||||||||||||||
$ | 6,849,486 |
FUTURES CONTRACTS PURCHASED | ||||||||||||||
Reference Entity | Contracts | Expiration Date | Notional Amount | Unrealized Appreciation (Depreciation)^ | ||||||||||
S&P 500 E-Mini | 297 | June 2022 | $ | 61,293,375 | $ | (5,061,177) |
^Amount represents value and unrealized appreciation (depreciation).
NOTES TO SCHEDULE OF INVESTMENTS | ||||||||
EUR | - | Euro | ||||||
USD | - | United States Dollar |
†Category is less than 0.05% of total net assets.
(1)Non-income producing.
(2)Security, or a portion thereof, is on loan. At the period end, the aggregate value of securities on loan was $164,622,757. The amount of securities on loan indicated may not correspond with the securities on loan identified because securities with pending sales are in the process of recall from the brokers.
(3)The rate indicated is the yield to maturity at purchase.
(4)Investment of cash collateral from securities on loan. At the period end, the aggregate value of the collateral held by the fund was $175,867,560, which includes securities collateral of $173,243,006.
See Notes to Financial Statements.
9
Statement of Assets and Liabilities |
APRIL 30, 2022 (UNAUDITED) | |||||
Assets | |||||
Investment securities, at value (cost of $6,029,546,423) — including $164,622,757 of securities on loan | $ | 11,893,455,357 | |||
Investment made with cash collateral received for securities on loan, at value (cost of $2,624,554) | 2,624,554 | ||||
Total investment securities, at value (cost of $6,032,170,977) | 11,896,079,911 | ||||
Deposits with broker for futures contracts | 3,326,400 | ||||
Receivable for investments sold | 83,684,809 | ||||
Receivable for capital shares sold | 1,707,541 | ||||
Unrealized appreciation on forward foreign currency exchange contracts | 7,556,218 | ||||
Dividends and interest receivable | 2,488,844 | ||||
Securities lending receivable | 172,868 | ||||
11,995,016,591 | |||||
Liabilities | |||||
Payable for collateral received for securities on loan | 2,624,554 | ||||
Payable for investments purchased | 81,951,940 | ||||
Payable for capital shares redeemed | 2,394,333 | ||||
Payable for variation margin on futures contracts | 2,316,600 | ||||
Unrealized depreciation on forward foreign currency exchange contracts | 706,732 | ||||
Accrued management fees | 8,436,670 | ||||
Distribution and service fees payable | 72,220 | ||||
98,503,049 | |||||
Net Assets | $ | 11,896,513,542 | |||
Net Assets Consist of: | |||||
Capital (par value and paid-in surplus) | $ | 6,029,697,756 | |||
Distributable earnings | 5,866,815,786 | ||||
$ | 11,896,513,542 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | |||||||||
Investor Class, $0.01 Par Value | $7,921,006,815 | 189,881,693 | $41.72 | ||||||||
I Class, $0.01 Par Value | $1,616,568,243 | 37,649,581 | $42.94 | ||||||||
Y Class, $0.01 Par Value | $52,484,466 | 1,217,587 | $43.11 | ||||||||
A Class, $0.01 Par Value | $113,684,374 | 2,864,223 | $39.69* | ||||||||
C Class, $0.01 Par Value | $10,834,059 | 302,223 | $35.85 | ||||||||
R Class, $0.01 Par Value | $82,989,832 | 2,185,666 | $37.97 | ||||||||
R5 Class, $0.01 Par Value | $3,292,913 | 76,606 | $42.99 | ||||||||
R6 Class, $0.01 Par Value | $743,643,806 | 17,282,196 | $43.03 | ||||||||
G Class, $0.01 Par Value | $1,352,009,034 | 31,389,417 | $43.07 |
*Maximum offering price $42.11 (net asset value divided by 0.9425).
See Notes to Financial Statements.
10
Statement of Operations |
FOR THE SIX MONTHS ENDED APRIL 30, 2022 (UNAUDITED) | |||||
Investment Income (Loss) | |||||
Income: | |||||
Dividends (net of foreign taxes withheld of $190,069) | $ | 35,798,148 | |||
Securities lending, net | 1,085,628 | ||||
Interest | 22,237 | ||||
36,906,013 | |||||
Expenses: | |||||
Management fees | 56,849,487 | ||||
Distribution and service fees: | |||||
A Class | 165,447 | ||||
C Class | 60,168 | ||||
R Class | 251,074 | ||||
Directors' fees and expenses | 136,305 | ||||
Other expenses | 9,649 | ||||
57,472,130 | |||||
Fees waived(1) | (1,606,280) | ||||
55,865,850 | |||||
Net investment income (loss) | (18,959,837) | ||||
Realized and Unrealized Gain (Loss) | |||||
Net realized gain (loss) on: | |||||
Investment transactions | 277,991,724 | ||||
Forward foreign currency exchange contract transactions | 12,061,036 | ||||
Futures contract transactions | 317,997 | ||||
Foreign currency translation transactions | (12,871) | ||||
290,357,886 | |||||
Change in net unrealized appreciation (depreciation) on: | |||||
Investments | (3,040,939,667) | ||||
Forward foreign currency exchange contracts | 3,869,176 | ||||
Futures contracts | (7,837,412) | ||||
Translation of assets and liabilities in foreign currencies | (64,456) | ||||
(3,044,972,359) | |||||
Net realized and unrealized gain (loss) | (2,754,614,473) | ||||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | (2,773,574,310) |
(1)Amount consists of $578,832, $117,076, $3,723, $8,215, $751, $6,193, $254, $51,687 and $839,549 for Investor Class, I Class, Y Class, A Class, C Class, R Class, R5 Class, R6 Class and G Class, respectively.
See Notes to Financial Statements.
11
Statement of Changes in Net Assets |
SIX MONTHS ENDED APRIL 30, 2022 (UNAUDITED) AND YEAR ENDED OCTOBER 31, 2021 | ||||||||
Increase (Decrease) in Net Assets | April 30, 2022 | October 31, 2021 | ||||||
Operations | ||||||||
Net investment income (loss) | $ | (18,959,837) | $ | (37,937,675) | ||||
Net realized gain (loss) | 290,357,886 | 1,366,371,431 | ||||||
Change in net unrealized appreciation (depreciation) | (3,044,972,359) | 2,976,420,772 | ||||||
Net increase (decrease) in net assets resulting from operations | (2,773,574,310) | 4,304,854,528 | ||||||
Distributions to Shareholders | ||||||||
From earnings: | ||||||||
Investor Class | (1,115,919,567) | (282,536,663) | ||||||
I Class | (218,489,765) | (62,416,300) | ||||||
Y Class | (6,859,773) | (1,866,955) | ||||||
A Class | (16,507,216) | (3,978,341) | ||||||
C Class | (1,609,267) | (543,385) | ||||||
R Class | (13,327,118) | (3,787,686) | ||||||
R5 Class | (495,405) | (15,831) | ||||||
R6 Class | (94,719,581) | (21,373,938) | ||||||
G Class | (53) | — | ||||||
Decrease in net assets from distributions | (1,467,927,745) | (376,519,099) | ||||||
Capital Share Transactions | ||||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | 2,669,944,488 | (712,757,144) | ||||||
Net increase (decrease) in net assets | (1,571,557,567) | 3,215,578,285 | ||||||
Net Assets | ||||||||
Beginning of period | 13,468,071,109 | 10,252,492,824 | ||||||
End of period | $ | 11,896,513,542 | $ | 13,468,071,109 |
See Notes to Financial Statements.
12
Notes to Financial Statements |
APRIL 30, 2022 (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's investment objective is to seek long-term capital growth.
The fund offers the Investor Class, I Class, Y Class, A Class, C Class, R Class, R5 Class, R6 Class and G 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. Sale of the G Class commenced on March 1, 2022.
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 (NAV) 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 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. U.S. Treasury and Government Agency securities are valued using market models that consider trade data, quotations from dealers and active market makers, relevant yield curve and spread data, 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 NAV 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 exchange. 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.
13
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 NAV 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. 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. Securities lending income is net of fees and rebates earned by the lending agent for its services.
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.
Segregated Assets — In accordance with the 1940 Act, the fund segregates assets on its books and records to cover certain types of investment securities and other financial instruments. 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 collateral requirements.
14
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.
Securities Lending — Securities are lent to qualified financial institutions and brokers. State Street Bank & Trust Co. serves as securities lending agent to the fund pursuant to a Securities Lending Agreement. The lending of securities exposes the fund to risks such as: the borrowers may fail to return the loaned securities, the borrowers may not be able to provide additional collateral, the fund may experience delays in recovery of the loaned securities or delays in access to collateral, or the fund may experience losses related to the investment collateral. To minimize certain risks, loan counterparties pledge collateral in the form of cash and/or securities. The lending agent has agreed to indemnify the fund in the case of default of any securities borrowed. Cash collateral received is invested in the State Street Navigator Securities Lending Government Money Market Portfolio, a money market mutual fund registered under the 1940 Act. The loans may also be secured by U.S. government securities in an amount at least equal to the market value of the securities loaned, plus accrued interest and dividends, determined on a daily basis and adjusted accordingly. By lending securities, the fund seeks to increase its net investment income through the receipt of interest and fees. Such income is reflected separately within the Statement of Operations. The value of loaned securities and related collateral outstanding at period end, if any, are shown on a gross basis within the Schedule of Investments and Statement of Assets and Liabilities.
The following table reflects a breakdown of transactions accounted for as secured borrowings, the gross obligation by the type of collateral pledged, and the remaining contractual maturity of those transactions as of April 30, 2022.
Remaining Contractual Maturity of Agreements | |||||||||||||||||
Overnight and Continuous | <30 days | Between 30 & 90 days | >90 days | Total | |||||||||||||
Securities Lending Transactions(1) | |||||||||||||||||
Common Stocks | $ | 2,624,554 | — | — | — | $ | 2,624,554 | ||||||||||
Gross amount of recognized liabilities for securities lending transactions | $ | 2,624,554 |
(1)Amount represents the payable for cash collateral received for securities on loan. This will generally be in the Overnight and Continuous column as the securities are typically callable on demand.
15
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. Various funds issued by American Century Asset Allocation Portfolios, Inc. own, in aggregate, 8% of the shares of the fund.
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 ACIM will pay all expenses of managing and operating the fund, except brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), extraordinary expenses, and expenses incurred in connection with the provision of shareholder services and distribution services under a plan adopted pursuant to Rule 12b-1 under the 1940 Act. The fee is computed and accrued daily based on each class's daily net assets and paid monthly in arrears. The difference in the fee among the classes is a result of their separate arrangements for non-Rule 12b-1 shareholder services. It is not the result of any difference in advisory or custodial fees or other expenses related to the management of the fund's assets, which do not vary by class. 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 use very similar investment teams and strategies (strategy assets). Prior to the fund's acquisition of NT Growth Fund, the strategy assets of the fund also included the assets of NT Growth Fund. During the period ended April 30, 2022, the investment advisor agreed to waive a portion of the fund’s management fee such that the management fee does not exceed 0.95% for Investor Class, A Class, C Class and R Class, 0.75% for I Class and R5 Class, and 0.60% for Y Class and R6 Class. The investment advisor expects this waiver arrangement to continue until February 28, 2023 and cannot terminate it prior to such date without the approval of the Board of Directors. The investment advisor agreed to waive the G Class's management fee in its entirety. The investment advisor expects this waiver to remain in effect permanently and cannot terminate it without the approval of the Board of Directors.
The management fee schedule range and the effective annual management fee before and after waiver for each class for the period ended April 30, 2022 are as follows:
Management Fee Schedule Range | Effective Annual Management Fee | ||||||||||
Before Waiver | After Waiver | ||||||||||
Investor Class | 0.800% to 0.990% | 0.96% | 0.95% | ||||||||
I Class | 0.600% to 0.790% | 0.76% | 0.75% | ||||||||
Y Class | 0.450% to 0.640% | 0.61% | 0.60% | ||||||||
A Class | 0.800% to 0.990% | 0.96% | 0.95% | ||||||||
C Class | 0.800% to 0.990% | 0.96% | 0.95% | ||||||||
R Class | 0.800% to 0.990% | 0.96% | 0.95% | ||||||||
R5 Class | 0.600% to 0.790% | 0.76% | 0.75% | ||||||||
R6 Class | 0.450% to 0.640% | 0.61% | 0.60% | ||||||||
G Class | 0.450% to 0.640% | 0.61% | 0.00% |
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 period ended April 30, 2022 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.
16
Interfund Transactions — The fund may enter into security transactions with other American Century Investments funds and other client accounts of the investment advisor, in accordance with the 1940 Act rules and procedures adopted by the Board of Directors. The rules and procedures require, among other things, that these transactions be effected at the independent current market price of the security. During the period, the interfund purchases were $2,516,544 and there were no interfund sales.
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the period ended April 30, 2022 were $1,101,185,798 and $1,494,040,301, respectively.
17
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended April 30, 2022(1) | Year ended October 31, 2021 | |||||||||||||
Shares | Amount | Shares | Amount | |||||||||||
Investor Class/Shares Authorized | 2,100,000,000 | 2,100,000,000 | ||||||||||||
Sold | 3,861,146 | $ | 197,844,697 | 5,305,769 | $ | 264,722,721 | ||||||||
Issued in reinvestment of distributions | 20,434,759 | 1,074,423,880 | 5,939,447 | 269,212,365 | ||||||||||
Redeemed | (9,348,779) | (467,917,418) | (18,886,054) | (939,574,506) | ||||||||||
14,947,126 | 804,351,159 | (7,640,838) | (405,639,420) | |||||||||||
I Class/Shares Authorized | 460,000,000 | 460,000,000 | ||||||||||||
Sold | 2,868,940 | 143,896,817 | 5,030,555 | 253,476,557 | ||||||||||
Issued in reinvestment of distributions | 4,000,612 | 216,189,001 | 1,332,209 | 61,801,158 | ||||||||||
Redeemed | (3,758,986) | (194,876,653) | (11,938,383) | (624,523,946) | ||||||||||
3,110,566 | 165,209,165 | (5,575,619) | (309,246,231) | |||||||||||
Y Class/Shares Authorized | 40,000,000 | 40,000,000 | ||||||||||||
Sold | 108,128 | 5,408,256 | 125,001 | 6,382,042 | ||||||||||
Issued in reinvestment of distributions | 124,070 | 6,727,246 | 39,621 | 1,840,784 | ||||||||||
Redeemed | (132,430) | (7,198,808) | (259,242) | (13,213,793) | ||||||||||
99,768 | 4,936,694 | (94,620) | (4,990,967) | |||||||||||
A Class/Shares Authorized | 40,000,000 | 40,000,000 | ||||||||||||
Sold | 339,142 | 15,860,731 | 674,956 | 32,255,963 | ||||||||||
Issued in reinvestment of distributions | 302,755 | 15,172,225 | 83,670 | 3,641,339 | ||||||||||
Redeemed | (372,750) | (17,717,116) | (704,720) | (33,762,086) | ||||||||||
269,147 | 13,315,840 | 53,906 | 2,135,216 | |||||||||||
C Class/Shares Authorized | 20,000,000 | 30,000,000 | ||||||||||||
Sold | 60,685 | 2,592,289 | 35,432 | 1,582,981 | ||||||||||
Issued in reinvestment of distributions | 33,783 | 1,532,167 | 12,972 | 521,225 | ||||||||||
Redeemed | (39,970) | (1,727,325) | (162,645) | (6,793,871) | ||||||||||
54,498 | 2,397,131 | (114,241) | (4,689,665) | |||||||||||
R Class/Shares Authorized | 40,000,000 | 40,000,000 | ||||||||||||
Sold | 171,628 | 7,782,611 | 242,169 | 11,219,666 | ||||||||||
Issued in reinvestment of distributions | 277,158 | 13,325,583 | 89,107 | 3,740,945 | ||||||||||
Redeemed | (386,717) | (17,611,475) | (675,841) | (31,093,859) | ||||||||||
62,069 | 3,496,719 | (344,565) | (16,133,248) | |||||||||||
R5 Class/Shares Authorized | 20,000,000 | 30,000,000 | ||||||||||||
Sold | 1,648 | 91,719 | 75,078 | 3,866,385 | ||||||||||
Issued in reinvestment of distributions | 8,690 | 471,376 | 341 | 15,831 | ||||||||||
Redeemed | (16,564) | (875,731) | (2,678) | (146,108) | ||||||||||
(6,226) | (312,636) | 72,741 | 3,736,108 | |||||||||||
R6 Class/Shares Authorized | 200,000,000 | 200,000,000 | ||||||||||||
Sold | 2,613,147 | 131,248,606 | 3,696,574 | 190,995,553 | ||||||||||
Issued in reinvestment of distributions | 1,749,733 | 94,651,353 | 460,844 | 21,373,938 | ||||||||||
Redeemed | (1,745,070) | (88,030,188) | (3,762,407) | (190,298,428) | ||||||||||
2,617,810 | 137,869,771 | 395,011 | 22,071,063 | |||||||||||
G Class/Shares Authorized | 780,000,000 | N/A | ||||||||||||
Sold | 523,717 | 23,983,659 | ||||||||||||
Issued in connection with reorganization (Note 10) | 31,393,184 | 1,540,737,439 | ||||||||||||
Issued in reinvestment of distributions | 1 | 53 | ||||||||||||
Redeemed | (527,485) | (26,040,506) | ||||||||||||
31,389,417 | 1,538,680,645 | |||||||||||||
Net increase (decrease) | 52,544,175 | $ | 2,669,944,488 | (13,248,225) | $ | (712,757,144) |
(1)March 1, 2022 (commencement of sale) through April 30, 2022 for the G Class.
18
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.
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 | $ | 11,525,856,544 | $ | 254,373,367 | — | ||||||
Exchange-Traded Funds | 8,904,144 | — | — | ||||||||
Short-Term Investments | 3,813,824 | 103,132,032 | — | ||||||||
$ | 11,538,574,512 | $ | 357,505,399 | — | |||||||
Other Financial Instruments | |||||||||||
Forward Foreign Currency Exchange Contracts | — | $ | 7,556,218 | — | |||||||
Liabilities | |||||||||||
Other Financial Instruments | |||||||||||
Futures Contracts | $ | 5,061,177 | — | — | |||||||
Forward Foreign Currency Exchange Contracts | — | $ | 706,732 | — | |||||||
$ | 5,061,177 | $ | 706,732 | — |
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. The fund's average notional exposure to equity price risk derivative instruments held during the period was $39,084,072 futures contracts purchased.
19
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 settlement 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 forward foreign currency exchange contract transactions and change in net unrealized appreciation (depreciation) on forward foreign currency exchange contracts, 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 $239,139,495.
Value of Derivative Instruments as of April 30, 2022
Asset Derivatives | Liability Derivatives | |||||||||||||
Type of Risk Exposure | Location on Statement of Assets and Liabilities | Value | Location on Statement of Assets and Liabilities | Value | ||||||||||
Equity Price Risk | Receivable for variation margin on futures contracts* | — | Payable for variation margin on futures contracts* | $ | 2,316,600 | |||||||||
Foreign Currency Risk | Unrealized appreciation on forward foreign currency exchange contracts | $ | 7,556,218 | Unrealized depreciation on forward foreign currency exchange contracts | 706,732 | |||||||||
$ | 7,556,218 | $ | 3,023,332 |
*Included in the unrealized appreciation (depreciation) on futures contracts, as reported in the Schedule of Investments.
Effect of Derivative Instruments on the Statement of Operations for the Six Months Ended April 30, 2022
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 | $ | 317,997 | Change in net unrealized appreciation (depreciation) on futures contracts | $ | (7,837,412) | ||||||||
Foreign Currency Risk | Net realized gain (loss) on forward foreign currency exchange contract transactions | 12,061,036 | Change in net unrealized appreciation (depreciation) on forward foreign currency exchange contracts | 3,869,176 | ||||||||||
$ | 12,379,033 | $ | (3,968,236) |
8. Risk Factors
The value of the fund’s shares will go up and down, sometimes rapidly or unpredictably, based on the performance of the securities owned by the fund and other factors generally affecting the securities market. Market risks, including political, regulatory, economic and social developments, can affect the value of the fund’s investments. Natural disasters, public health emergencies, war, terrorism and other unforeseeable events may lead to increased market volatility and may have adverse long-term effects on world economies and markets generally.
20
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 period end, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $ | 6,040,482,898 | |||
Gross tax appreciation of investments | $ | 6,144,445,995 | |||
Gross tax depreciation of investments | (288,848,982) | ||||
Net tax appreciation (depreciation) of investments | $ | 5,855,597,013 |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales.
10. Reorganization
On December 2, 2021, the Board of Directors approved an agreement and plan of reorganization (the reorganization), whereby the net assets of NT Growth Fund, one fund in a series issued by the corporation, were transferred to Growth Fund in exchange for shares of Growth Fund. The purpose of the transaction was to combine two funds with substantially similar investment objectives and strategies. The financial statements and performance history of Growth Fund survived after the reorganization. The reorganization was effective at the close of the NYSE on March 25, 2022.
The reorganization was accomplished by a tax-free exchange of shares. On March 25, 2022, NT Growth Fund exchanged its shares for shares of Growth Fund as follows:
Original Fund/Class | Shares Exchanged | New Fund/Class | Shares Received | ||||||||
NT Growth Fund – G Class | 71,233,354 | Growth Fund – G Class | 31,393,184 |
The net assets of NT Growth Fund and Growth Fund immediately before the reorganization were $1,540,737,439 and $12,083,608,261, respectively. NT Growth Fund's unrealized appreciation of $732,269,787 was combined with that of Growth Fund. Immediately after the reorganization, the combined net assets were $13,624,345,700.
Assuming the reorganization had been completed on November 1, 2021, the beginning of the annual reporting period, the pro forma results of operations for the period ended April 30, 2022 are as follows:
Net investment income (loss) | $ | (14,793,485) | |||
Net realized and unrealized gain (loss) | (2,885,583,534) | ||||
Net increase (decrease) in net assets resulting from operations | $ | (2,900,377,019) |
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 NT Growth Fund that have been included in the fund’s Statement of Operations since March 25, 2022.
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: | 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 | |||||||||||||||||||||||||||||||||||||||||||||||
2022(3) | $58.23 | (0.09) | (10.10) | (10.19) | — | (6.32) | (6.32) | $41.72 | (19.62)% | 0.95%(4) | 0.96%(4) | (0.36)%(4) | (0.37)%(4) | 9% | $7,921,007 | ||||||||||||||||||||||||||||||||
2021 | $41.94 | (0.18) | 18.03 | 17.85 | — | (1.56) | (1.56) | $58.23 | 43.66% | 0.96% | 0.96% | (0.36)% | (0.36)% | 21% | $10,186,486 | ||||||||||||||||||||||||||||||||
2020 | $35.80 | (0.02) | 9.12 | 9.10 | (0.15) | (2.81) | (2.96) | $41.94 | 26.70% | 0.97% | 0.97% | (0.04)% | (0.04)% | 33% | $7,656,430 | ||||||||||||||||||||||||||||||||
2019 | $34.94 | 0.08 | 4.70 | 4.78 | (0.08) | (3.84) | (3.92) | $35.80 | 16.35% | 0.98% | 0.98% | 0.24% | 0.24% | 30% | $5,937,959 | ||||||||||||||||||||||||||||||||
2018 | $34.93 | 0.04 | 3.35 | 3.39 | (0.06) | (3.32) | (3.38) | $34.94 | 10.22% | 0.97% | 0.97% | 0.13% | 0.13% | 38% | $5,627,171 | ||||||||||||||||||||||||||||||||
2017 | $28.64 | 0.08 | 7.67 | 7.75 | (0.17) | (1.29) | (1.46) | $34.93 | 28.26% | 0.98% | 0.98% | 0.26% | 0.26% | 48% | $5,648,965 | ||||||||||||||||||||||||||||||||
I Class | |||||||||||||||||||||||||||||||||||||||||||||||
2022(3) | $59.70 | (0.04) | (10.40) | (10.44) | — | (6.32) | (6.32) | $42.94 | (19.54)% | 0.75%(4) | 0.76%(4) | (0.16)%(4) | (0.17)%(4) | 9% | $1,616,568 | ||||||||||||||||||||||||||||||||
2021 | $42.87 | (0.08) | 18.47 | 18.39 | — | (1.56) | (1.56) | $59.70 | 43.95% | 0.76% | 0.76% | (0.16)% | (0.16)% | 21% | $2,061,819 | ||||||||||||||||||||||||||||||||
2020 | $36.56 | 0.06 | 9.29 | 9.35 | (0.23) | (2.81) | (3.04) | $42.87 | 26.93% | 0.77% | 0.77% | 0.16% | 0.16% | 33% | $1,719,814 | ||||||||||||||||||||||||||||||||
2019 | $35.59 | 0.15 | 4.81 | 4.96 | (0.15) | (3.84) | (3.99) | $36.56 | 16.62% | 0.78% | 0.78% | 0.44% | 0.44% | 30% | $1,382,618 | ||||||||||||||||||||||||||||||||
2018 | $35.52 | 0.12 | 3.40 | 3.52 | (0.13) | (3.32) | (3.45) | $35.59 | 10.46% | 0.77% | 0.77% | 0.33% | 0.33% | 38% | $1,230,065 | ||||||||||||||||||||||||||||||||
2017 | $29.11 | 0.15 | 7.78 | 7.93 | (0.23) | (1.29) | (1.52) | $35.52 | 28.48% | 0.78% | 0.78% | 0.46% | 0.46% | 48% | $1,271,821 |
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) | |||||||||||||||||||||||||||||||||
Y Class | |||||||||||||||||||||||||||||||||||||||||||||||
2022(3) | $59.86 | —(5) | (10.43) | (10.43) | — | (6.32) | (6.32) | $43.11 | (19.46)% | 0.60%(4) | 0.61%(4) | (0.01)%(4) | (0.02)%(4) | 9% | $52,484 | ||||||||||||||||||||||||||||||||
2021 | $42.93 | (0.01) | 18.50 | 18.49 | — | (1.56) | (1.56) | $59.86 | 44.13% | 0.61% | 0.61% | (0.01)% | (0.01)% | 21% | $66,916 | ||||||||||||||||||||||||||||||||
2020 | $36.61 | 0.13 | 9.30 | 9.43 | (0.30) | (2.81) | (3.11) | $42.93 | 27.15% | 0.62% | 0.62% | 0.31% | 0.31% | 33% | $52,046 | ||||||||||||||||||||||||||||||||
2019 | $35.64 | 0.20 | 4.81 | 5.01 | (0.20) | (3.84) | (4.04) | $36.61 | 16.78% | 0.63% | 0.63% | 0.59% | 0.59% | 30% | $53,641 | ||||||||||||||||||||||||||||||||
2018 | $35.54 | 0.17 | 3.40 | 3.57 | (0.15) | (3.32) | (3.47) | $35.64 | 10.61% | 0.62% | 0.62% | 0.48% | 0.48% | 38% | $52,601 | ||||||||||||||||||||||||||||||||
2017(6) | $30.93 | 0.08 | 4.53 | 4.61 | — | — | — | $35.54 | 14.90% | 0.63%(4) | 0.63%(4) | 0.43%(4) | 0.43%(4) | 48%(7) | $56,218 | ||||||||||||||||||||||||||||||||
A Class | |||||||||||||||||||||||||||||||||||||||||||||||
2022(3) | $55.78 | (0.15) | (9.62) | (9.77) | — | (6.32) | (6.32) | $39.69 | (19.72)% | 1.20%(4) | 1.21%(4) | (0.61)%(4) | (0.62)%(4) | 9% | $113,684 | ||||||||||||||||||||||||||||||||
2021 | $40.32 | (0.30) | 17.32 | 17.02 | — | (1.56) | (1.56) | $55.78 | 43.31% | 1.21% | 1.21% | (0.61)% | (0.61)% | 21% | $144,743 | ||||||||||||||||||||||||||||||||
2020 | $34.52 | (0.10) | 8.75 | 8.65 | (0.04) | (2.81) | (2.85) | $40.32 | 26.38% | 1.22% | 1.22% | (0.29)% | (0.29)% | 33% | $102,472 | ||||||||||||||||||||||||||||||||
2019 | $33.82 | —(5) | 4.54 | 4.54 | — | (3.84) | (3.84) | $34.52 | 16.06% | 1.23% | 1.23% | (0.01)% | (0.01)% | 30% | $93,422 | ||||||||||||||||||||||||||||||||
2018 | $33.94 | (0.04) | 3.24 | 3.20 | — | (3.32) | (3.32) | $33.82 | 9.94% | 1.22% | 1.22% | (0.12)% | (0.12)% | 38% | $103,115 | ||||||||||||||||||||||||||||||||
2017 | $27.86 | 0.01 | 7.46 | 7.47 | (0.10) | (1.29) | (1.39) | $33.94 | 27.95% | 1.23% | 1.23% | 0.01% | 0.01% | 48% | $113,348 |
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) | |||||||||||||||||||||||||||||||||
C Class | |||||||||||||||||||||||||||||||||||||||||||||||
2022(3) | $51.16 | (0.29) | (8.70) | (8.99) | — | (6.32) | (6.32) | $35.85 | (20.00)% | 1.95%(4) | 1.96%(4) | (1.36)%(4) | (1.37)%(4) | 9% | $10,834 | ||||||||||||||||||||||||||||||||
2021 | $37.37 | (0.59) | 15.94 | 15.35 | — | (1.56) | (1.56) | $51.16 | 42.23% | 1.96% | 1.96% | (1.36)% | (1.36)% | 21% | $12,674 | ||||||||||||||||||||||||||||||||
2020 | $32.37 | (0.37) | 8.18 | 7.81 | — | (2.81) | (2.81) | $37.37 | 25.43% | 1.97% | 1.97% | (1.04)% | (1.04)% | 33% | $13,527 | ||||||||||||||||||||||||||||||||
2019 | $32.18 | (0.23) | 4.26 | 4.03 | — | (3.84) | (3.84) | $32.37 | 15.23% | 1.98% | 1.98% | (0.76)% | (0.76)% | 30% | $8,408 | ||||||||||||||||||||||||||||||||
2018 | $32.67 | (0.29) | 3.12 | 2.83 | — | (3.32) | (3.32) | $32.18 | 9.12% | 1.97% | 1.97% | (0.87)% | (0.87)% | 38% | $9,871 | ||||||||||||||||||||||||||||||||
2017 | $26.97 | (0.21) | 7.20 | 6.99 | — | (1.29) | (1.29) | $32.67 | 26.99% | 1.98% | 1.98% | (0.74)% | (0.74)% | 48% | $9,962 | ||||||||||||||||||||||||||||||||
R Class | |||||||||||||||||||||||||||||||||||||||||||||||
2022(3) | $53.69 | (0.20) | (9.20) | (9.40) | — | (6.32) | (6.32) | $37.97 | (19.81)% | 1.45%(4) | 1.46%(4) | (0.86)%(4) | (0.87)%(4) | 9% | $82,990 | ||||||||||||||||||||||||||||||||
2021 | $38.96 | (0.40) | 16.69 | 16.29 | — | (1.56) | (1.56) | $53.69 | 42.94% | 1.46% | 1.46% | (0.86)% | (0.86)% | 21% | $114,022 | ||||||||||||||||||||||||||||||||
2020 | $33.50 | (0.19) | 8.49 | 8.30 | (0.03) | (2.81) | (2.84) | $38.96 | 26.07% | 1.47% | 1.47% | (0.54)% | (0.54)% | 33% | $96,170 | ||||||||||||||||||||||||||||||||
2019 | $33.02 | (0.08) | 4.40 | 4.32 | — | (3.84) | (3.84) | $33.50 | 15.78% | 1.48% | 1.48% | (0.26)% | (0.26)% | 30% | $87,302 | ||||||||||||||||||||||||||||||||
2018 | $33.29 | (0.13) | 3.18 | 3.05 | — | (3.32) | (3.32) | $33.02 | 9.66% | 1.47% | 1.47% | (0.37)% | (0.37)% | 38% | $100,915 | ||||||||||||||||||||||||||||||||
2017 | $27.35 | (0.07) | 7.32 | 7.25 | (0.02) | (1.29) | (1.31) | $33.29 | 27.62% | 1.48% | 1.48% | (0.24)% | (0.24)% | 48% | $104,368 |
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) | |||||||||||||||||||||||||||||||||
R5 Class | |||||||||||||||||||||||||||||||||||||||||||||||
2022(3) | $59.76 | (0.04) | (10.41) | (10.45) | — | (6.32) | (6.32) | $42.99 | (19.55)% | 0.75%(4) | 0.76%(4) | (0.16)%(4) | (0.17)%(4) | 9% | $3,293 | ||||||||||||||||||||||||||||||||
2021 | $42.91 | (0.09) | 18.50 | 18.41 | — | (1.56) | (1.56) | $59.76 | 43.96% | 0.76% | 0.76% | (0.16)% | (0.16)% | 21% | $4,950 | ||||||||||||||||||||||||||||||||
2020 | $36.59 | 0.08 | 9.28 | 9.36 | (0.23) | (2.81) | (3.04) | $42.91 | 26.94% | 0.77% | 0.77% | 0.16% | 0.16% | 33% | $433 | ||||||||||||||||||||||||||||||||
2019 | $35.62 | 0.15 | 4.81 | 4.96 | (0.15) | (3.84) | (3.99) | $36.59 | 16.61% | 0.78% | 0.78% | 0.44% | 0.44% | 30% | $533 | ||||||||||||||||||||||||||||||||
2018 | $35.53 | 0.12 | 3.40 | 3.52 | (0.11) | (3.32) | (3.43) | $35.62 | 10.45% | 0.77% | 0.77% | 0.33% | 0.33% | 38% | $404 | ||||||||||||||||||||||||||||||||
2017(6) | $30.95 | 0.05 | 4.53 | 4.58 | — | — | — | $35.53 | 14.80% | 0.78%(4) | 0.78%(4) | 0.27%(4) | 0.27%(4) | 48%(7) | $6 | ||||||||||||||||||||||||||||||||
R6 Class | |||||||||||||||||||||||||||||||||||||||||||||||
2022(3) | $59.77 | —(5) | (10.42) | (10.42) | — | (6.32) | (6.32) | $43.03 | (19.48)% | 0.60%(4) | 0.61%(4) | (0.01)%(4) | (0.02)%(4) | 9% | $743,644 | ||||||||||||||||||||||||||||||||
2021 | $42.86 | (0.01) | 18.48 | 18.47 | — | (1.56) | (1.56) | $59.77 | 44.15% | 0.61% | 0.61% | (0.01)% | (0.01)% | 21% | $876,460 | ||||||||||||||||||||||||||||||||
2020 | $36.56 | 0.12 | 9.29 | 9.41 | (0.30) | (2.81) | (3.11) | $42.86 | 27.13% | 0.62% | 0.62% | 0.31% | 0.31% | 33% | $611,600 | ||||||||||||||||||||||||||||||||
2019 | $35.59 | 0.21 | 4.80 | 5.01 | (0.20) | (3.84) | (4.04) | $36.56 | 16.81% | 0.63% | 0.63% | 0.59% | 0.59% | 30% | $479,123 | ||||||||||||||||||||||||||||||||
2018 | $35.53 | 0.17 | 3.40 | 3.57 | (0.19) | (3.32) | (3.51) | $35.59 | 10.60% | 0.62% | 0.62% | 0.48% | 0.48% | 38% | $834,003 | ||||||||||||||||||||||||||||||||
2017 | $29.11 | 0.18 | 7.80 | 7.98 | (0.27) | (1.29) | (1.56) | $35.53 | 28.71% | 0.63% | 0.63% | 0.61% | 0.61% | 48% | $963,039 | ||||||||||||||||||||||||||||||||
G Class | |||||||||||||||||||||||||||||||||||||||||||||||
2022(8) | $47.73 | 0.02 | (3.67) | (3.65) | — | (1.01) | (1.01) | $43.07 | (7.90)% | 0.00%(4)(9) | 0.61%(4) | 0.22%(4) | (0.39)%(4) | 9%(10) | $1,352,009 |
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, 2022 (unaudited).
(4)Annualized.
(5)Per-share amount was less than $0.005.
(6)April 10, 2017 (commencement of sale) through October 31, 2017.
(7)Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended October 31, 2017.
(8)March 1, 2022 (commencement of sale) through April 30, 2022 (unaudited).
(9)Ratio was less than 0.005%.
(10)Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the six months ended April 30, 2022.
See Notes to Financial Statements.
Liquidity Risk Management Program |
The Fund has adopted a liquidity risk management program (the “program”). The Fund’s Board of Directors (the "Board") has designated American Century Investment Management, Inc. (“ACIM”) as the administrator of the program. Personnel of ACIM or its affiliates conduct the day-to-day operation of the program pursuant to policies and procedures administered by the Program Administrator, including members of ACIM’s Investment Oversight Committee who are members of the ACIM’s Investment Management and Global Analytics departments.
Under the program, ACIM manages the Fund’s liquidity risk, which is the risk that the Fund could not meet shareholder redemption requests without significant dilution of remaining shareholders’ interests in the Fund. This risk is managed by monitoring the degree of liquidity of the Fund’s investments, limiting the amount of the Fund’s illiquid investments, and utilizing various risk management tools and facilities available to the Fund for meeting shareholder redemptions, among other means. ACIM’s process of determining the degree of liquidity of certain Fund’s investments is supported by a third-party liquidity assessment vendor.
The Board reviewed a report prepared by ACIM regarding the operation and effectiveness of the program for the period January 1, 2021 through December 31, 2021. No significant liquidity events impacting the Fund were noted in the report. In addition, ACIM provided its assessment that the program had been effective in managing the Fund’s liquidity risk.
27
Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain retirement accounts 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 and change your withholding percentage for future distributions.
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.
*Some 403(b), 457 and qualified retirement plan distributions may be subject to 20% mandatory withholding, as they 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 American Century Investments’ website at americancentury.com/proxy 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 americancentury.com/proxy. 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 as an exhibit to its reports on Form N-PORT. These portfolio holdings are available on the fund's website at americancentury.com and, upon request, by calling 1-800-345-2021. The fund’s Form N-PORT reports are available on the SEC’s website at sec.gov.
28
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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. | ||||||||
©2022 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-92358 2206 |
![image8.jpg](https://capedge.com/proxy/N-CSRS/0000100334-22-000050/image8.jpg)
Semiannual Report | |||||
April 30, 2022 | |||||
Heritage Fund | |||||
Investor Class (TWHIX) | |||||
I Class (ATHIX) | |||||
Y Class (ATHYX) | |||||
A Class (ATHAX) | |||||
C Class (AHGCX) | |||||
R Class (ATHWX) | |||||
R5 Class (ATHGX) | |||||
R6 Class (ATHDX) | |||||
G Class (ACILX) |
Table of Contents |
President’s Letter | |||||
Fund Characteristics | |||||
Shareholder Fee Example | |||||
Schedule of Investments | |||||
Statement of Assets and Liabilities | |||||
Statement of Operations | |||||
Statement of Changes in Net Assets | |||||
Notes to Financial Statements | |||||
Financial Highlights | |||||
Liquidity Risk Management Program | |||||
Additional Information |
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 |
![image30.jpg](https://capedge.com/proxy/N-CSRS/0000100334-22-000050/image30.jpg)
Dear Investor:
Thank you for reviewing this semiannual report for the period ended April 30, 2022. It provides a market overview (below), followed by a schedule of fund investments and other financial information. For additional investment insights, please visit americancentury.com.
Escalating Inflation, Sharp Volatility Hampered Investment Returns
Investors faced increasingly challenging market conditions as the reporting period progressed. From soaring inflation and rising interest rates to mounting geopolitical unrest and slowing growth, most asset classes struggled amid intense volatility.
Inflation was already at multiyear highs when the reporting period began. This was largely due to massive fiscal and monetary support, escalating energy prices, supply chain breakdowns and labor market shortages. Russia’s invasion of Ukraine in February sent commodity prices even higher, exacerbating existing inflationary pressures and further damaging global supply chains.
By period-end, inflation stood at a 40-year high in the U.S., a 30-year high in the U.K. and a record high in the eurozone. Most emerging markets also grappled with rising inflation. At the same time, global growth slowed dramatically.
In response to surging inflation, the Federal Reserve in March implemented its first rate hike in more than three years and ended its asset purchase program. The Bank of England executed a series of rate hikes, while European Central Bank officials announced their asset purchase program would end in the third quarter.
The combination of accelerating inflation, tighter monetary policy, geopolitical unrest and slowing economic growth fueled widespread and sharp market volatility. Global stock and bond returns plunged for the six-month period. Perceived inflation-fighting assets, including real estate investment trusts, generally fared much better than other securities.
Staying Disciplined in Uncertain Times
We expect market volatility to linger as investors navigate this complex backdrop. In addition, Russia’s invasion of Ukraine has further complicated a tense geopolitical environment. We will continue to monitor the evolving situation and its implications for our clients and investment exposure.
We appreciate your confidence in us during these extraordinary times. Our firm has a long history of helping clients weather unpredictable markets, and we’re confident we will continue to meet today’s challenges.
Sincerely,
![image27.jpg](https://capedge.com/proxy/N-CSRS/0000100334-22-000050/image27.jpg)
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
2
Fund Characteristics |
APRIL 30, 2022 | |||||
Types of Investments in Portfolio | % of net assets | ||||
Common Stocks | 98.9% | ||||
Short-Term Investments | 1.2% | ||||
Other Assets and Liabilities | (0.1)% | ||||
Top Five Industries | % of net assets | ||||
Software | 15.9% | ||||
Hotels, Restaurants and Leisure | 7.6% | ||||
Electrical Equipment | 5.9% | ||||
Life Sciences Tools and Services | 5.7% | ||||
Biotechnology | 5.6% |
3
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, 2021 to April 30, 2022 (except as noted).
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 I Class shares of the American Century Diversified Bond Fund, in an American Century Investments account (i.e., not through a financial intermediary or employer-sponsored retirement plan account), American Century Investments may charge you a $25.00 annual 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 $25.00 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.
4
Beginning Account Value 11/1/21 | Ending Account Value 4/30/22 | Expenses Paid During Period(1) 11/1/21 - 4/30/22 | Annualized Expense Ratio(1) | |||||||||||
Actual | ||||||||||||||
Investor Class | $1,000 | $726.90 | $4.28 | 1.00% | ||||||||||
I Class | $1,000 | $727.60 | $3.43 | 0.80% | ||||||||||
Y Class | $1,000 | $728.30 | $2.79 | 0.65% | ||||||||||
A Class | $1,000 | $726.40 | $5.35 | 1.25% | ||||||||||
C Class | $1,000 | $723.20 | $8.55 | 2.00% | ||||||||||
R Class | $1,000 | $725.30 | $6.42 | 1.50% | ||||||||||
R5 Class | $1,000 | $727.90 | $3.43 | 0.80% | ||||||||||
R6 Class | $1,000 | $728.30 | $2.79 | 0.65% | ||||||||||
G Class | $1,000 | $911.60 | $0.00(2) | 0.00%(3) | ||||||||||
Hypothetical | ||||||||||||||
Investor Class | $1,000 | $1,019.84 | $5.01 | 1.00% | ||||||||||
I Class | $1,000 | $1,020.83 | $4.01 | 0.80% | ||||||||||
Y Class | $1,000 | $1,021.57 | $3.26 | 0.65% | ||||||||||
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% | ||||||||||
R5 Class | $1,000 | $1,020.83 | $4.01 | 0.80% | ||||||||||
R6 Class | $1,000 | $1,021.57 | $3.26 | 0.65% | ||||||||||
G Class | $1,000 | $1,024.80 | $0.00 | 0.00%(3) |
(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. Annualized expense ratio reflects actual expenses, including any applicable fee waivers or expense reimbursements and excluding any acquired fund fees and expenses.
(2)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 61, the number of days in the period from March 1, 2022 (commencement of sale) through April 30, 2022, divided by 365, to reflect the period. Had the class been available for the full period, the expenses paid during the period would have been higher.
(3)Other expenses, which include directors' fees and expenses, did not exceed 0.005%.
5
Schedule of Investments |
APRIL 30, 2022 (UNAUDITED)
Shares | Value | |||||||
COMMON STOCKS — 98.9% | ||||||||
Aerospace and Defense — 1.1% | ||||||||
HEICO Corp. | 413,962 | $ | 58,463,853 | |||||
Auto Components — 0.9% | ||||||||
Aptiv PLC(1) | 458,917 | 48,828,769 | ||||||
Beverages — 0.9% | ||||||||
Celsius Holdings, Inc.(1) | 980,878 | 51,005,656 | ||||||
Biotechnology — 5.6% | ||||||||
Alnylam Pharmaceuticals, Inc.(1) | 201,194 | 26,845,316 | ||||||
Biohaven Pharmaceutical Holding Co. Ltd.(1) | 523,965 | 46,721,959 | ||||||
Horizon Therapeutics PLC(1) | 868,284 | 85,578,071 | ||||||
Neurocrine Biosciences, Inc.(1) | 601,442 | 54,147,823 | ||||||
Sarepta Therapeutics, Inc.(1) | 724,220 | 52,375,590 | ||||||
Vertex Pharmaceuticals, Inc.(1) | 140,296 | 38,331,673 | ||||||
304,000,432 | ||||||||
Building Products — 2.5% | ||||||||
Trane Technologies PLC | 604,766 | 84,600,716 | ||||||
Zurn Water Solutions Corp. | 1,650,708 | 51,535,104 | ||||||
136,135,820 | ||||||||
Capital Markets — 4.8% | ||||||||
Ares Management Corp., Class A | 535,540 | 35,463,459 | ||||||
LPL Financial Holdings, Inc. | 783,279 | 147,154,626 | ||||||
MSCI, Inc. | 190,121 | 80,088,471 | ||||||
262,706,556 | ||||||||
Chemicals — 2.3% | ||||||||
Albemarle Corp. | 120,854 | 23,304,277 | ||||||
Avient Corp. | 632,821 | 31,160,106 | ||||||
Element Solutions, Inc. | 3,378,933 | 69,673,598 | ||||||
124,137,981 | ||||||||
Communications Equipment — 4.6% | ||||||||
Arista Networks, Inc.(1) | 1,511,466 | 174,680,126 | ||||||
F5, Inc.(1) | 447,613 | 74,934,892 | ||||||
249,615,018 | ||||||||
Containers and Packaging — 1.6% | ||||||||
Avery Dennison Corp. | 481,427 | 86,945,716 | ||||||
Electrical Equipment — 5.9% | ||||||||
AMETEK, Inc. | 861,484 | 108,770,970 | ||||||
Generac Holdings, Inc.(1) | 151,654 | 33,269,854 | ||||||
nVent Electric PLC | 1,398,231 | 47,232,243 | ||||||
Plug Power, Inc.(1)(2) | 943,510 | 19,832,580 | ||||||
Regal Rexnord Corp. | 547,604 | 69,677,133 | ||||||
Rockwell Automation, Inc. | 177,831 | 44,932,559 | ||||||
323,715,339 | ||||||||
Electronic Equipment, Instruments and Components — 3.4% | ||||||||
Cognex Corp. | 1,390,459 | 94,036,742 | ||||||
Keysight Technologies, Inc.(1) | 655,668 | 91,970,551 | ||||||
186,007,293 |
6
Shares | Value | |||||||
Entertainment — 1.6% | ||||||||
Live Nation Entertainment, Inc.(1) | 478,062 | $ | 50,139,142 | |||||
ROBLOX Corp., Class A(1) | 346,403 | 10,617,252 | ||||||
Roku, Inc.(1) | 307,253 | 28,543,804 | ||||||
89,300,198 | ||||||||
Equity Real Estate Investment Trusts (REITs) — 1.2% | ||||||||
Rexford Industrial Realty, Inc. | 841,987 | 65,708,665 | ||||||
Food Products — 2.3% | ||||||||
Hershey Co. | 560,766 | 126,604,140 | ||||||
Health Care Equipment and Supplies — 4.1% | ||||||||
Align Technology, Inc.(1) | 94,856 | 27,499,703 | ||||||
DexCom, Inc.(1) | 232,633 | 95,049,191 | ||||||
IDEXX Laboratories, Inc.(1) | 233,141 | 100,362,538 | ||||||
222,911,432 | ||||||||
Health Care Providers and Services — 1.3% | ||||||||
Amedisys, Inc.(1) | 303,494 | 38,741,009 | ||||||
R1 RCM, Inc.(1) | 1,511,050 | 34,028,846 | ||||||
72,769,855 | ||||||||
Health Care Technology — 1.5% | ||||||||
Veeva Systems, Inc., Class A(1) | 436,223 | 79,370,775 | ||||||
Hotels, Restaurants and Leisure — 7.6% | ||||||||
Airbnb, Inc., Class A(1) | 623,611 | 95,543,441 | ||||||
Chipotle Mexican Grill, Inc.(1) | 91,576 | 133,298,942 | ||||||
Hilton Worldwide Holdings, Inc.(1) | 1,184,393 | 183,924,389 | ||||||
412,766,772 | ||||||||
Interactive Media and Services — 1.6% | ||||||||
Match Group, Inc.(1) | 1,115,424 | 88,285,810 | ||||||
Internet and Direct Marketing Retail — 1.0% | ||||||||
Chewy, Inc., Class A(1)(2) | 769,770 | 22,369,516 | ||||||
Etsy, Inc.(1) | 372,344 | 34,698,738 | ||||||
57,068,254 | ||||||||
IT Services — 4.0% | ||||||||
Block, Inc.(1) | 696,250 | 69,304,725 | ||||||
Cloudflare, Inc., Class A(1) | 717,142 | 61,774,612 | ||||||
EPAM Systems, Inc.(1) | 210,176 | 55,694,538 | ||||||
Okta, Inc.(1) | 245,688 | 29,313,035 | ||||||
216,086,910 | ||||||||
Life Sciences Tools and Services — 5.7% | ||||||||
Agilent Technologies, Inc. | 532,332 | 63,491,238 | ||||||
Bio-Techne Corp. | 168,274 | 63,891,955 | ||||||
IQVIA Holdings, Inc.(1) | 234,813 | 51,186,886 | ||||||
Mettler-Toledo International, Inc.(1) | 77,010 | 98,382,585 | ||||||
Repligen Corp.(1) | 220,123 | 34,612,140 | ||||||
311,564,804 | ||||||||
Machinery — 2.1% | ||||||||
Graco, Inc. | 822,507 | 51,011,884 | ||||||
Parker-Hannifin Corp. | 233,171 | 63,147,370 | ||||||
114,159,254 | ||||||||
Oil, Gas and Consumable Fuels — 0.4% | ||||||||
Excelerate Energy, Inc. | 903,563 | 24,405,237 | ||||||
Professional Services — 4.3% | ||||||||
CoStar Group, Inc.(1) | 796,322 | 50,662,005 | ||||||
Jacobs Engineering Group, Inc. | 754,223 | 104,497,597 |
7
Shares | Value | |||||||
Verisk Analytics, Inc. | 376,473 | $ | 76,819,316 | |||||
231,978,918 | ||||||||
Road and Rail — 2.3% | ||||||||
Lyft, Inc., Class A(1) | 1,475,254 | 48,093,280 | ||||||
Norfolk Southern Corp. | 298,159 | 76,889,243 | ||||||
124,982,523 | ||||||||
Semiconductors and Semiconductor Equipment — 4.4% | ||||||||
Enphase Energy, Inc.(1) | 513,474 | 82,874,704 | ||||||
Marvell Technology, Inc. | 706,787 | 41,050,189 | ||||||
Monolithic Power Systems, Inc. | 143,260 | 56,192,302 | ||||||
Skyworks Solutions, Inc. | 511,599 | 57,964,167 | ||||||
238,081,362 | ||||||||
Software — 15.9% | ||||||||
Atlassian Corp. PLC, Class A(1) | 165,859 | 37,290,079 | ||||||
Cadence Design Systems, Inc.(1) | 1,018,454 | 153,633,786 | ||||||
Datadog, Inc., Class A(1) | 742,026 | 89,621,900 | ||||||
DocuSign, Inc.(1) | 324,081 | 26,250,561 | ||||||
HubSpot, Inc.(1) | 82,508 | 31,306,010 | ||||||
Manhattan Associates, Inc.(1) | 978,408 | 127,731,164 | ||||||
Palo Alto Networks, Inc.(1) | 548,963 | 308,121,953 | ||||||
Trade Desk, Inc., Class A(1) | 1,530,294 | 90,164,923 | ||||||
864,120,376 | ||||||||
Specialty Retail — 1.9% | ||||||||
Burlington Stores, Inc.(1) | 335,012 | 68,195,043 | ||||||
Five Below, Inc.(1) | 212,930 | 33,451,303 | ||||||
101,646,346 | ||||||||
Textiles, Apparel and Luxury Goods — 2.1% | ||||||||
lululemon athletica, Inc.(1) | 328,905 | 116,639,580 | ||||||
TOTAL COMMON STOCKS (Cost $4,581,004,716) | 5,390,013,644 | |||||||
SHORT-TERM INVESTMENTS — 1.2% | ||||||||
Money Market Funds — 0.8% | ||||||||
State Street Institutional U.S. Government Money Market Fund, Premier Class | 338,685 | 338,685 | ||||||
State Street Navigator Securities Lending Government Money Market Portfolio(3) | 40,666,894 | 40,666,894 | ||||||
41,005,579 | ||||||||
Repurchase Agreements — 0.4% | ||||||||
BMO Capital Markets Corp., (collateralized by various U.S. Treasury obligations, 3.00% - 3.625%, 8/15/43 - 8/15/48, valued at $2,190,583) in a joint trading account at 0.25%, dated 4/29/22, due 5/2/22 (Delivery value $2,152,802) | 2,152,757 | |||||||
Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 1.00%, 2/15/48, valued at $21,959,645) at 0.24%, dated 4/29/22, due 5/2/22 (Delivery value $21,529,431) | 21,529,000 | |||||||
23,681,757 | ||||||||
TOTAL SHORT-TERM INVESTMENTS (Cost $64,687,336) | 64,687,336 | |||||||
TOTAL INVESTMENT SECURITIES — 100.1% (Cost $4,645,692,052) | 5,454,700,980 | |||||||
OTHER ASSETS AND LIABILITIES — (0.1)% | (5,476,708) | |||||||
TOTAL NET ASSETS — 100.0% | $ | 5,449,224,272 |
8
NOTES TO SCHEDULE OF INVESTMENTS |
(1)Non-income producing.
(2)Security, or a portion thereof, is on loan. At the period end, the aggregate value of securities on loan was $42,120,728. The amount of securities on loan indicated may not correspond with the securities on loan identified because securities with pending sales are in the process of recall from the brokers.
(3)Investment of cash collateral from securities on loan. At the period end, the aggregate value of the collateral held by the fund was $43,197,032, which includes securities collateral of $2,530,138.
See Notes to Financial Statements.
9
Statement of Assets and Liabilities |
APRIL 30, 2022 (UNAUDITED) | |||||
Assets | |||||
Investment securities, at value (cost of $4,605,025,158) — including $42,120,728 of securities on loan | $ | 5,414,034,086 | |||
Investment made with cash collateral received for securities on loan, at value (cost of $40,666,894) | 40,666,894 | ||||
Total investment securities, at value (cost of $4,645,692,052) | 5,454,700,980 | ||||
Receivable for investments sold | 42,434,610 | ||||
Receivable for capital shares sold | 1,858,110 | ||||
Dividends and interest receivable | 429,287 | ||||
Securities lending receivable | 7,741 | ||||
5,499,430,728 | |||||
Liabilities | |||||
Payable for collateral received for securities on loan | 40,666,894 | ||||
Payable for investments purchased | 2,777,996 | ||||
Payable for capital shares redeemed | 2,792,293 | ||||
Accrued management fees | 3,890,757 | ||||
Distribution and service fees payable | 78,516 | ||||
50,206,456 | |||||
Net Assets | $ | 5,449,224,272 | |||
Net Assets Consist of: | |||||
Capital (par value and paid-in surplus) | $ | 4,744,647,377 | |||
Distributable earnings | 704,576,895 | ||||
$ | 5,449,224,272 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | |||||||||
Investor Class, $0.01 Par Value | $3,674,991,071 | 190,306,031 | $19.31 | ||||||||
I Class, $0.01 Par Value | $281,975,069 | 12,991,641 | $21.70 | ||||||||
Y Class, $0.01 Par Value | $66,880,226 | 3,011,106 | $22.21 | ||||||||
A Class, $0.01 Par Value | $244,341,437 | 14,837,041 | $16.47* | ||||||||
C Class, $0.01 Par Value | $12,731,728 | 1,302,842 | $9.77 | ||||||||
R Class, $0.01 Par Value | $25,649,669 | 1,573,636 | $16.30 | ||||||||
R5 Class, $0.01 Par Value | $389,836 | 17,959 | $21.71 | ||||||||
R6 Class, $0.01 Par Value | $152,045,899 | 6,846,035 | $22.21 | ||||||||
G Class, $0.01 Par Value | $990,219,337 | 44,554,325 | $22.22 |
*Maximum offering price $17.47 (net asset value divided by 0.9425).
See Notes to Financial Statements.
10
Statement of Operations |
FOR THE SIX MONTHS ENDED APRIL 30, 2022 (UNAUDITED) | |||||
Investment Income (Loss) | |||||
Income: | |||||
Dividends | $ | 8,114,274 | |||
Securities lending, net | 29,668 | ||||
Interest | 19,720 | ||||
8,163,662 | |||||
Expenses: | |||||
Management fees | 26,866,292 | ||||
Distribution and service fees: | |||||
A Class | 376,201 | ||||
C Class | 84,283 | ||||
R Class | 78,518 | ||||
Directors' fees and expenses | 60,975 | ||||
Other expenses | 28 | ||||
27,466,297 | |||||
Fees waived - G Class | (654,878) | ||||
26,811,419 | |||||
Net investment income (loss) | (18,647,757) | ||||
Realized and Unrealized Gain (Loss) | |||||
Net realized gain (loss) on: | |||||
Investment transactions | (15,138,192) | ||||
Foreign currency translation transactions | (1,030) | ||||
(15,139,222) | |||||
Change in net unrealized appreciation (depreciation) on: | |||||
Investments | (1,795,031,951) | ||||
Translation of assets and liabilities in foreign currencies | 487 | ||||
(1,795,031,464) | |||||
Net realized and unrealized gain (loss) | (1,810,170,686) | ||||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | (1,828,818,443) |
See Notes to Financial Statements.
11
Statement of Changes in Net Assets |
SIX MONTHS ENDED APRIL 30, 2022 (UNAUDITED) AND YEAR ENDED OCTOBER 31, 2021 | ||||||||
Increase (Decrease) in Net Assets | April 30, 2022 | October 31, 2021 | ||||||
Operations | ||||||||
Net investment income (loss) | $ | (18,647,757) | $ | (39,008,214) | ||||
Net realized gain (loss) | (15,139,222) | 730,468,700 | ||||||
Change in net unrealized appreciation (depreciation) | (1,795,031,464) | 1,254,889,082 | ||||||
Net increase (decrease) in net assets resulting from operations | (1,828,818,443) | 1,946,349,568 | ||||||
Distributions to Shareholders | ||||||||
From earnings: | ||||||||
Investor Class | (574,638,804) | (586,342,385) | ||||||
I Class | (40,277,730) | (43,469,882) | ||||||
Y Class | (8,346,383) | (7,086,626) | ||||||
A Class | (44,929,381) | (45,691,761) | ||||||
C Class | (4,032,180) | (7,188,612) | ||||||
R Class | (4,735,993) | (5,053,233) | ||||||
R5 Class | (93,537) | (94,815) | ||||||
R6 Class | (20,711,452) | (19,890,507) | ||||||
G Class | (18) | — | ||||||
Decrease in net assets from distributions | (697,765,478) | (714,817,821) | ||||||
Capital Share Transactions | ||||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | 1,549,073,511 | 234,696,206 | ||||||
Net increase (decrease) in net assets | (977,510,410) | 1,466,227,953 | ||||||
Net Assets | ||||||||
Beginning of period | 6,426,734,682 | 4,960,506,729 | ||||||
End of period | $ | 5,449,224,272 | $ | 6,426,734,682 |
See Notes to Financial Statements.
12
Notes to Financial Statements |
APRIL 30, 2022 (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's investment objective is to seek long-term capital growth.
The fund offers the Investor Class, I Class, Y Class, A Class, C Class, R Class, R5 Class, R6 Class and G 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. Sale of the G Class commenced on March 1, 2022.
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 (NAV) 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 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. U.S. Treasury and Government Agency securities are valued using market models that consider trade data, quotations from dealers and active market makers, relevant yield curve and spread data, 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 NAV 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.
13
The fund monitors for significant events occurring after the close of an investment’s primary exchange but before the fund’s NAV 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. 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. Securities lending income is net of fees and rebates earned by the lending agent for its services.
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.
Segregated Assets — In accordance with the 1940 Act, the fund segregates assets on its books and records to cover certain types of investment securities and other financial instruments. 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 collateral requirements.
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.
14
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.
Securities Lending — Securities are lent to qualified financial institutions and brokers. State Street Bank & Trust Co. serves as securities lending agent to the fund pursuant to a Securities Lending Agreement. The lending of securities exposes the fund to risks such as: the borrowers may fail to return the loaned securities, the borrowers may not be able to provide additional collateral, the fund may experience delays in recovery of the loaned securities or delays in access to collateral, or the fund may experience losses related to the investment collateral. To minimize certain risks, loan counterparties pledge collateral in the form of cash and/or securities. The lending agent has agreed to indemnify the fund in the case of default of any securities borrowed. Cash collateral received is invested in the State Street Navigator Securities Lending Government Money Market Portfolio, a money market mutual fund registered under the 1940 Act. The loans may also be secured by U.S. government securities in an amount at least equal to the market value of the securities loaned, plus accrued interest and dividends, determined on a daily basis and adjusted accordingly. By lending securities, the fund seeks to increase its net investment income through the receipt of interest and fees. Such income is reflected separately within the Statement of Operations. The value of loaned securities and related collateral outstanding at period end, if any, are shown on a gross basis within the Schedule of Investments and Statement of Assets and Liabilities.
The following table reflects a breakdown of transactions accounted for as secured borrowings, the gross obligation by the type of collateral pledged, and the remaining contractual maturity of those transactions as of April 30, 2022.
Remaining Contractual Maturity of Agreements | |||||||||||||||||
Overnight and Continuous | <30 days | Between 30 & 90 days | >90 days | Total | |||||||||||||
Securities Lending Transactions(1) | |||||||||||||||||
Common Stocks | $ | 40,666,894 | — | — | — | $ | 40,666,894 | ||||||||||
Gross amount of recognized liabilities for securities lending transactions | $ | 40,666,894 |
(1)Amount represents the payable for cash collateral received for securities on loan. This will generally be in the Overnight and Continuous column as the securities are typically callable on demand.
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. Various funds issued by American Century Asset Allocation Portfolios, Inc. own, in aggregate, 12% of the shares of the fund.
15
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 ACIM will pay all expenses of managing and operating the fund, except brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), extraordinary expenses, and expenses incurred in connection with the provision of shareholder services and distribution services under a plan adopted pursuant to Rule 12b-1 under the 1940 Act. The fee is computed and accrued daily based on each class's daily net assets and paid monthly in arrears. The difference in the fee among the classes is a result of their separate arrangements for non-Rule 12b-1 shareholder services. It is not the result of any difference in advisory or custodial fees or other expenses related to the management of the fund’s assets, which do not vary by class. The investment advisor agreed to waive the G Class's management fee in its entirety. The investment advisor expects this waiver to remain in effect permanently and cannot terminate it without the approval of the Board of Directors.
The annual management fee for each class is as follows:
Investor Class | I Class | Y Class | A Class | C Class | R Class | R5 Class | R6 Class | G Class(1) | ||||||||||||||||||
1.000% | 0.800% | 0.650% | 1.000% | 1.000% | 1.000% | 0.800% | 0.650% | 0.000% |
(1)Annual management fee before waiver was 0.650%.
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 period ended April 30, 2022 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.
Interfund Transactions — The fund may enter into security transactions with other American Century Investments funds and other client accounts of the investment advisor, in accordance with the 1940 Act rules and procedures adopted by the Board of Directors. The rules and procedures require, among other things, that these transactions be effected at the independent current market price of the security. There were no interfund transactions during the period.
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the period ended April 30, 2022 were $1,322,705,981 and $1,558,310,559, respectively.
16
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended April 30, 2022(1) | Year ended October 31, 2021 | |||||||||||||
Shares | Amount | Shares | Amount | |||||||||||
Investor Class/Shares Authorized | 2,100,000,000 | 2,100,000,000 | ||||||||||||
Sold | 3,228,744 | $ | 76,653,624 | 7,069,672 | $ | 190,536,048 | ||||||||
Issued in reinvestment of distributions | 21,908,142 | 555,645,484 | 22,643,103 | 564,891,390 | ||||||||||
Redeemed | (11,768,528) | (278,144,152) | (20,262,521) | (549,716,482) | ||||||||||
13,368,358 | 354,154,956 | 9,450,254 | 205,710,956 | |||||||||||
I Class/Shares Authorized | 175,000,000 | 175,000,000 | ||||||||||||
Sold | 1,375,503 | 34,892,560 | 2,723,934 | 82,538,821 | ||||||||||
Issued in reinvestment of distributions | 1,350,856 | 38,443,277 | 1,510,846 | 41,729,561 | ||||||||||
Redeemed | (2,168,976) | (56,184,601) | (4,129,476) | (124,200,919) | ||||||||||
557,383 | 17,151,236 | 105,304 | 67,463 | |||||||||||
Y Class/Shares Authorized | 30,000,000 | 30,000,000 | ||||||||||||
Sold | 457,919 | 11,897,178 | 718,287 | 21,940,985 | ||||||||||
Issued in reinvestment of distributions | 281,698 | 8,188,472 | 246,029 | 6,923,247 | ||||||||||
Redeemed | (254,914) | (6,818,437) | (392,997) | (12,068,109) | ||||||||||
484,703 | 13,267,213 | 571,319 | 16,796,123 | |||||||||||
A Class/Shares Authorized | 170,000,000 | 170,000,000 | ||||||||||||
Sold | 760,334 | 15,127,528 | 2,270,649 | 53,457,609 | ||||||||||
Issued in reinvestment of distributions | 1,998,593 | 43,327,933 | 1,995,138 | 43,434,155 | ||||||||||
Redeemed | (1,893,510) | (38,119,951) | (3,292,227) | (78,227,401) | ||||||||||
865,417 | 20,335,510 | 973,560 | 18,664,363 | |||||||||||
C Class/Shares Authorized | 40,000,000 | 70,000,000 | ||||||||||||
Sold | 19,185 | 215,159 | 77,895 | 1,237,207 | ||||||||||
Issued in reinvestment of distributions | 309,641 | 4,016,798 | 503,874 | 7,170,128 | ||||||||||
Redeemed | (314,384) | (3,927,988) | (1,374,461) | (20,969,404) | ||||||||||
14,442 | 303,969 | (792,692) | (12,562,069) | |||||||||||
R Class/Shares Authorized | 40,000,000 | 40,000,000 | ||||||||||||
Sold | 111,627 | 2,227,829 | 267,540 | 6,273,040 | ||||||||||
Issued in reinvestment of distributions | 220,330 | 4,731,864 | 233,252 | 5,049,747 | ||||||||||
Redeemed | (215,347) | (4,327,238) | (520,917) | (12,173,944) | ||||||||||
116,610 | 2,632,455 | (20,125) | (851,157) | |||||||||||
R5 Class/Shares Authorized | 20,000,000 | 30,000,000 | ||||||||||||
Sold | 968 | 25,538 | 1,618 | 48,767 | ||||||||||
Issued in reinvestment of distributions | 3,272 | 93,537 | 3,433 | 94,815 | ||||||||||
Redeemed | (15,526) | (411,448) | (26,019) | (795,308) | ||||||||||
(11,286) | (292,373) | (20,968) | (651,726) | |||||||||||
R6 Class/Shares Authorized | 70,000,000 | 70,000,000 | ||||||||||||
Sold | 1,235,607 | 36,225,817 | 1,744,294 | 53,635,470 | ||||||||||
Issued in reinvestment of distributions | 710,311 | 20,669,761 | 705,357 | 19,848,742 | ||||||||||
Redeemed | (842,469) | (22,497,712) | (2,188,698) | (65,961,959) | ||||||||||
1,103,449 | 34,397,866 | 260,953 | 7,522,253 | |||||||||||
G Class/Shares Authorized | 600,000,000 | N/A | ||||||||||||
Sold | 250,743 | 5,951,735 | ||||||||||||
Issued in connection with reorganization (Note 9) | 44,533,666 | 1,106,922,147 | ||||||||||||
Issued in reinvestment of distributions | 1 | 18 | ||||||||||||
Redeemed | (230,085) | (5,751,221) | ||||||||||||
44,554,325 | 1,107,122,679 | |||||||||||||
Net increase (decrease) | 61,053,401 | $ | 1,549,073,511 | 10,527,605 | $ | 234,696,206 |
(1)March 1, 2022 (commencement of sale) through April 30, 2022 for the G Class.
17
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.
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 | $ | 5,390,013,644 | — | — | |||||||
Short-Term Investments | 41,005,579 | $ | 23,681,757 | — | |||||||
$ | 5,431,019,223 | $ | 23,681,757 | — |
7. Risk Factors
The value of the fund’s shares will go up and down, sometimes rapidly or unpredictably, based on the performance of the securities owned by the fund and other factors generally affecting the securities market. Market risks, including political, regulatory, economic and social developments, can affect the value of the fund’s investments. Natural disasters, public health emergencies, war, terrorism and other unforeseeable events may lead to increased market volatility and may have adverse long-term effects on world economies and markets generally.
The fund may invest in common stocks of small companies. Because of this, the fund may be subject to greater risk and market fluctuations than a fund investing solely 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 period end, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $ | 4,656,749,839 | |||
Gross tax appreciation of investments | $ | 1,259,924,945 | |||
Gross tax depreciation of investments | (461,973,804) | ||||
Net tax appreciation (depreciation) of investments | $ | 797,951,141 |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales.
18
9. Reorganization
On December 2, 2021, the Board of Directors approved an agreement and plan of reorganization (the reorganization), whereby the net assets of NT Heritage Fund, one fund in a series issued by the corporation, were transferred to Heritage Fund in exchange for shares of Heritage Fund. The purpose of the transaction was to combine two funds with substantially similar investment objectives and strategies. The financial statements and performance history of Heritage Fund survived after the reorganization. The reorganization was effective at the close of the NYSE on March 25, 2022.
The reorganization was accomplished by a tax-free exchange of shares. On March 25, 2022, NT Heritage Fund exchanged its shares for shares of Heritage Fund as follows:
Original Fund/Class | Shares Exchanged | New Fund/Class | Shares Received | ||||||||
NT Heritage Fund – G Class | 82,805,306 | Heritage Fund – G Class | 44,533,666 |
The net assets of NT Heritage Fund and Heritage Fund immediately before the reorganization were $1,106,922,147 and $5,030,214,398, respectively. NT Heritage Fund's unrealized appreciation of $213,647,362 was combined with that of Heritage Fund. Immediately after the reorganization, the combined net assets were $6,137,136,545.
Assuming the reorganization had been completed on November 1, 2021, the beginning of the annual reporting period, the pro forma results of operations for the period ended April 30, 2022 are as follows:
Net investment income (loss) | $ | (17,239,610) | |||
Net realized and unrealized gain (loss) | (2,037,484,868) | ||||
Net increase (decrease) in net assets resulting from operations | $ | (2,054,724,478) |
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 NT Heritage Fund that have been included in the fund’s Statement of Operations since March 25, 2022.
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 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 | |||||||||||||||||||||||||||||||||||||||||
2022(3) | $30.00 | (0.08) | (7.35) | (7.43) | (3.26) | $19.31 | (27.31)% | 1.00%(4) | 1.00%(4) | (0.71)%(4) | (0.71)%(4) | 23% | $3,674,991 | ||||||||||||||||||||||||||||
2021 | $24.38 | (0.18) | 9.35 | 9.17 | (3.55) | $30.00 | 40.54% | 1.00% | 1.00% | (0.66)% | (0.66)% | 44% | $5,307,249 | ||||||||||||||||||||||||||||
2020 | $21.74 | (0.10) | 5.09 | 4.99 | (2.35) | $24.38 | 25.00% | 1.00% | 1.00% | (0.47)% | (0.47)% | 85% | $4,083,843 | ||||||||||||||||||||||||||||
2019 | $23.19 | (0.08) | 2.95 | 2.87 | (4.32) | $21.74 | 17.22% | 1.00% | 1.00% | (0.38)% | (0.38)% | 82% | $3,702,699 | ||||||||||||||||||||||||||||
2018 | $23.67 | (0.07) | 1.70 | 1.63 | (2.11) | $23.19 | 7.16% | 1.00% | 1.00% | (0.30)% | (0.30)% | 85% | $3,787,202 | ||||||||||||||||||||||||||||
2017 | $21.28 | (0.03) | 4.18 | 4.15 | (1.76) | $23.67 | 20.77% | 1.01% | 1.01% | (0.15)% | (0.15)% | 56% | $4,083,669 | ||||||||||||||||||||||||||||
I Class | |||||||||||||||||||||||||||||||||||||||||
2022(3) | $33.26 | (0.07) | (8.23) | (8.30) | (3.26) | $21.70 | (27.24)% | 0.80%(4) | 0.80%(4) | (0.51)%(4) | (0.51)%(4) | 23% | $281,975 | ||||||||||||||||||||||||||||
2021 | $26.66 | (0.14) | 10.29 | 10.15 | (3.55) | $33.26 | 40.78% | 0.80% | 0.80% | (0.46)% | (0.46)% | 44% | $413,523 | ||||||||||||||||||||||||||||
2020 | $23.52 | (0.06) | 5.55 | 5.49 | (2.35) | $26.66 | 25.25% | 0.80% | 0.80% | (0.27)% | (0.27)% | 85% | $328,636 | ||||||||||||||||||||||||||||
2019 | $24.66 | (0.04) | 3.22 | 3.18 | (4.32) | $23.52 | 17.50% | 0.80% | 0.80% | (0.18)% | (0.18)% | 82% | $336,242 | ||||||||||||||||||||||||||||
2018 | $25.00 | (0.03) | 1.80 | 1.77 | (2.11) | $24.66 | 7.35% | 0.80% | 0.80% | (0.10)% | (0.10)% | 85% | $247,267 | ||||||||||||||||||||||||||||
2017 | $22.34 | —(5) | 4.42 | 4.42 | (1.76) | $25.00 | 21.01% | 0.81% | 0.81% | 0.05% | 0.05% | 56% | $262,095 |
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) | |||||||||||||||||||||||||||||
Y Class | |||||||||||||||||||||||||||||||||||||||||
2022(3) | $33.93 | (0.05) | (8.41) | (8.46) | (3.26) | $22.21 | (27.17)% | 0.65%(4) | 0.65%(4) | (0.36)%(4) | (0.36)%(4) | 23% | $66,880 | ||||||||||||||||||||||||||||
2021 | $27.10 | (0.10) | 10.48 | 10.38 | (3.55) | $33.93 | 40.98% | 0.65% | 0.65% | (0.31)% | (0.31)% | 44% | $85,720 | ||||||||||||||||||||||||||||
2020 | $23.84 | (0.03) | 5.64 | 5.61 | (2.35) | $27.10 | 25.43% | 0.65% | 0.65% | (0.12)% | (0.12)% | 85% | $52,978 | ||||||||||||||||||||||||||||
2019 | $24.90 | (0.01) | 3.27 | 3.26 | (4.32) | $23.84 | 17.68% | 0.65% | 0.65% | (0.03)% | (0.03)% | 82% | $29,803 | ||||||||||||||||||||||||||||
2018 | $25.19 | —(5) | 1.82 | 1.82 | (2.11) | $24.90 | 7.51% | 0.65% | 0.65% | 0.05% | 0.05% | 85% | $9,694 | ||||||||||||||||||||||||||||
2017(6) | $22.84 | 0.02 | 2.33 | 2.35 | — | $25.19 | 10.29% | 0.66%(4) | 0.66%(4) | 0.12%(4) | 0.12%(4) | 56%(7) | $6 | ||||||||||||||||||||||||||||
A Class | |||||||||||||||||||||||||||||||||||||||||
2022(3) | $26.11 | (0.10) | (6.28) | (6.38) | (3.26) | $16.47 | (27.36)% | 1.25%(4) | 1.25%(4) | (0.96)%(4) | (0.96)%(4) | 23% | $244,341 | ||||||||||||||||||||||||||||
2021 | $21.67 | (0.22) | 8.21 | 7.99 | (3.55) | $26.11 | 40.12% | 1.25% | 1.25% | (0.91)% | (0.91)% | 44% | $364,852 | ||||||||||||||||||||||||||||
2020 | $19.61 | (0.14) | 4.55 | 4.41 | (2.35) | $21.67 | 24.73% | 1.25% | 1.25% | (0.72)% | (0.72)% | 85% | $281,637 | ||||||||||||||||||||||||||||
2019 | $21.42 | (0.12) | 2.63 | 2.51 | (4.32) | $19.61 | 16.91% | 1.25% | 1.25% | (0.63)% | (0.63)% | 82% | $263,578 | ||||||||||||||||||||||||||||
2018 | $22.07 | (0.12) | 1.58 | 1.46 | (2.11) | $21.42 | 6.89% | 1.25% | 1.25% | (0.55)% | (0.55)% | 85% | $276,813 | ||||||||||||||||||||||||||||
2017 | $20.00 | (0.08) | 3.91 | 3.83 | (1.76) | $22.07 | 20.48% | 1.26% | 1.26% | (0.40)% | (0.40)% | 56% | $353,039 |
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 | |||||||||||||||||||||||||||||||||||||||||
2022(3) | $16.95 | (0.11) | (3.81) | (3.92) | (3.26) | $9.77 | (27.68)% | 2.00%(4) | 2.00%(4) | (1.71)%(4) | (1.71)%(4) | 23% | $12,732 | ||||||||||||||||||||||||||||
2021 | $15.22 | (0.25) | 5.53 | 5.28 | (3.55) | $16.95 | 39.13% | 2.00% | 2.00% | (1.66)% | (1.66)% | 44% | $21,836 | ||||||||||||||||||||||||||||
2020 | $14.54 | (0.20) | 3.23 | 3.03 | (2.35) | $15.22 | 23.73% | 2.00% | 2.00% | (1.47)% | (1.47)% | 85% | $31,677 | ||||||||||||||||||||||||||||
2019 | $17.18 | (0.19) | 1.87 | 1.68 | (4.32) | $14.54 | 16.06% | 2.00% | 2.00% | (1.38)% | (1.38)% | 82% | $39,794 | ||||||||||||||||||||||||||||
2018 | $18.22 | (0.23) | 1.30 | 1.07 | (2.11) | $17.18 | 6.13% | 2.00% | 2.00% | (1.30)% | (1.30)% | 85% | $57,552 | ||||||||||||||||||||||||||||
2017 | $16.92 | (0.19) | 3.25 | 3.06 | (1.76) | $18.22 | 19.58% | 2.01% | 2.01% | (1.15)% | (1.15)% | 56% | $88,629 | ||||||||||||||||||||||||||||
R Class | |||||||||||||||||||||||||||||||||||||||||
2022(3) | $25.91 | (0.12) | (6.23) | (6.35) | (3.26) | $16.30 | (27.47)% | 1.50%(4) | 1.50%(4) | (1.21)%(4) | (1.21)%(4) | 23% | $25,650 | ||||||||||||||||||||||||||||
2021 | $21.57 | (0.27) | 8.16 | 7.89 | (3.55) | $25.91 | 39.80% | 1.50% | 1.50% | (1.16)% | (1.16)% | 44% | $37,753 | ||||||||||||||||||||||||||||
2020 | $19.58 | (0.18) | 4.52 | 4.34 | (2.35) | $21.57 | 24.37% | 1.50% | 1.50% | (0.97)% | (0.97)% | 85% | $31,862 | ||||||||||||||||||||||||||||
2019 | $21.43 | (0.17) | 2.64 | 2.47 | (4.32) | $19.58 | 16.66% | 1.50% | 1.50% | (0.88)% | (0.88)% | 82% | $32,803 | ||||||||||||||||||||||||||||
2018 | $22.13 | (0.18) | 1.59 | 1.41 | (2.11) | $21.43 | 6.62% | 1.50% | 1.50% | (0.80)% | (0.80)% | 85% | $32,464 | ||||||||||||||||||||||||||||
2017 | $20.10 | (0.13) | 3.92 | 3.79 | (1.76) | $22.13 | 20.16% | 1.51% | 1.51% | (0.65)% | (0.65)% | 56% | $39,033 |
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) | |||||||||||||||||||||||||||||
R5 Class | |||||||||||||||||||||||||||||||||||||||||
2022(3) | $33.26 | (0.07) | (8.22) | (8.29) | (3.26) | $21.71 | (27.21)% | 0.80%(4) | 0.80%(4) | (0.51)%(4) | (0.51)%(4) | 23% | $390 | ||||||||||||||||||||||||||||
2021 | $26.66 | (0.14) | 10.29 | 10.15 | (3.55) | $33.26 | 40.78% | 0.80% | 0.80% | (0.46)% | (0.46)% | 44% | $973 | ||||||||||||||||||||||||||||
2020 | $23.52 | (0.04) | 5.53 | 5.49 | (2.35) | $26.66 | 25.25% | 0.80% | 0.80% | (0.27)% | (0.27)% | 85% | $1,339 | ||||||||||||||||||||||||||||
2019 | $24.66 | (0.04) | 3.22 | 3.18 | (4.32) | $23.52 | 17.50% | 0.80% | 0.80% | (0.18)% | (0.18)% | 82% | $3,663 | ||||||||||||||||||||||||||||
2018 | $25.00 | (0.04) | 1.81 | 1.77 | (2.11) | $24.66 | 7.35% | 0.80% | 0.80% | (0.10)% | (0.10)% | 85% | $3,053 | ||||||||||||||||||||||||||||
2017(6) | $22.69 | —(5) | 2.31 | 2.31 | — | $25.00 | 10.18% | 0.81%(4) | 0.81%(4) | (0.03)%(4) | (0.03)%(4) | 56%(7) | $114 | ||||||||||||||||||||||||||||
R6 Class | |||||||||||||||||||||||||||||||||||||||||
2022(3) | $33.93 | (0.05) | (8.41) | (8.46) | (3.26) | $22.21 | (27.17)% | 0.65%(4) | 0.65%(4) | (0.36)%(4) | (0.36)%(4) | 23% | $152,046 | ||||||||||||||||||||||||||||
2021 | $27.10 | (0.09) | 10.47 | 10.38 | (3.55) | $33.93 | 40.98% | 0.65% | 0.65% | (0.31)% | (0.31)% | 44% | $194,829 | ||||||||||||||||||||||||||||
2020 | $23.84 | (0.03) | 5.64 | 5.61 | (2.35) | $27.10 | 25.43% | 0.65% | 0.65% | (0.12)% | (0.12)% | 85% | $148,536 | ||||||||||||||||||||||||||||
2019 | $24.90 | (0.01) | 3.27 | 3.26 | (4.32) | $23.84 | 17.68% | 0.65% | 0.65% | (0.03)% | (0.03)% | 82% | $134,822 | ||||||||||||||||||||||||||||
2018 | $25.19 | 0.02 | 1.80 | 1.82 | (2.11) | $24.90 | 7.51% | 0.65% | 0.65% | 0.05% | 0.05% | 85% | $132,651 | ||||||||||||||||||||||||||||
2017 | $22.46 | 0.04 | 4.45 | 4.49 | (1.76) | $25.19 | 21.22% | 0.66% | 0.66% | 0.20% | 0.20% | 56% | $186,335 | ||||||||||||||||||||||||||||
G Class | |||||||||||||||||||||||||||||||||||||||||
2022(8) | $24.55 | 0.01 | (2.16) | (2.15) | (0.18) | $22.22 | (8.84)% | 0.00%(4)(9) | 0.65%(4) | 0.20%(4) | (0.45)%(4) | 23%(10) | $990,219 |
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, 2022 (unaudited).
(4)Annualized.
(5)Per-share amount was less than $0.005.
(6)April 10, 2017 (commencement of sale) through October 31, 2017.
(7)Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended October 31, 2017.
(8)March 1, 2022 (commencement of sale) through April 30, 2022 (unaudited).
(9)Ratio was less than 0.005%.
(10)Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the six months ended April 30, 2022.
See Notes to Financial Statements.
Liquidity Risk Management Program |
The Fund has adopted a liquidity risk management program (the “program”). The Fund’s Board of Directors (the "Board") has designated American Century Investment Management, Inc. (“ACIM”) as the administrator of the program. Personnel of ACIM or its affiliates conduct the day-to-day operation of the program pursuant to policies and procedures administered by the Program Administrator, including members of ACIM’s Investment Oversight Committee who are members of the ACIM’s Investment Management and Global Analytics departments.
Under the program, ACIM manages the Fund’s liquidity risk, which is the risk that the Fund could not meet shareholder redemption requests without significant dilution of remaining shareholders’ interests in the Fund. This risk is managed by monitoring the degree of liquidity of the Fund’s investments, limiting the amount of the Fund’s illiquid investments, and utilizing various risk management tools and facilities available to the Fund for meeting shareholder redemptions, among other means. ACIM’s process of determining the degree of liquidity of certain Fund’s investments is supported by a third-party liquidity assessment vendor.
The Board reviewed a report prepared by ACIM regarding the operation and effectiveness of the program for the period January 1, 2021 through December 31, 2021. No significant liquidity events impacting the Fund were noted in the report. In addition, ACIM provided its assessment that the program had been effective in managing the Fund’s liquidity risk.
25
Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain retirement accounts 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 and change your withholding percentage for future distributions.
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.
*Some 403(b), 457 and qualified retirement plan distributions may be subject to 20% mandatory withholding, as they 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 American Century Investments’ website at americancentury.com/proxy 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 americancentury.com/proxy. 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 as an exhibit to its reports on Form N-PORT. These portfolio holdings are available on the fund's website at americancentury.com and, upon request, by calling 1-800-345-2021. The fund’s Form N-PORT reports are available on the SEC’s website at sec.gov.
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. | ||||||||
©2022 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-92365 2206 |
![image8.jpg](https://capedge.com/proxy/N-CSRS/0000100334-22-000050/image8.jpg)
Semiannual Report | |||||
April 30, 2022 | |||||
Select Fund | |||||
Investor Class (TWCIX) | |||||
I Class (TWSIX) | |||||
Y Class (ASLWX) | |||||
A Class (TWCAX) | |||||
C Class (ACSLX) | |||||
R Class (ASERX) | |||||
R5 Class (ASLGX) | |||||
R6 Class (ASDEX) |
Table of Contents |
President’s Letter | |||||
Fund Characteristics | |||||
Shareholder Fee Example | |||||
Schedule of Investments | |||||
Statement of Assets and Liabilities | |||||
Statement of Operations | |||||
Statement of Changes in Net Assets | |||||
Notes to Financial Statements | |||||
Financial Highlights | |||||
Liquidity Risk Management Program | |||||
Additional Information |
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 |
![image30.jpg](https://capedge.com/proxy/N-CSRS/0000100334-22-000050/image30.jpg)
Dear Investor:
Thank you for reviewing this semiannual report for the period ended April 30, 2022. It provides a market overview (below), followed by a schedule of fund investments and other financial information. For additional investment insights, please visit americancentury.com.
Escalating Inflation, Sharp Volatility Hampered Investment Returns
Investors faced increasingly challenging market conditions as the reporting period progressed. From soaring inflation and rising interest rates to mounting geopolitical unrest and slowing growth, most asset classes struggled amid intense volatility.
Inflation was already at multiyear highs when the reporting period began. This was largely due to massive fiscal and monetary support, escalating energy prices, supply chain breakdowns and labor market shortages. Russia’s invasion of Ukraine in February sent commodity prices even higher, exacerbating existing inflationary pressures and further damaging global supply chains.
By period-end, inflation stood at a 40-year high in the U.S., a 30-year high in the U.K. and a record high in the eurozone. Most emerging markets also grappled with rising inflation. At the same time, global growth slowed dramatically.
In response to surging inflation, the Federal Reserve in March implemented its first rate hike in more than three years and ended its asset purchase program. The Bank of England executed a series of rate hikes, while European Central Bank officials announced their asset purchase program would end in the third quarter.
The combination of accelerating inflation, tighter monetary policy, geopolitical unrest and slowing economic growth fueled widespread and sharp market volatility. Global stock and bond returns plunged for the six-month period. Perceived inflation-fighting assets, including real estate investment trusts, generally fared much better than other securities.
Staying Disciplined in Uncertain Times
We expect market volatility to linger as investors navigate this complex backdrop. In addition, Russia’s invasion of Ukraine has further complicated a tense geopolitical environment. We will continue to monitor the evolving situation and its implications for our clients and investment exposure.
We appreciate your confidence in us during these extraordinary times. Our firm has a long history of helping clients weather unpredictable markets, and we’re confident we will continue to meet today’s challenges.
Sincerely,
![image27.jpg](https://capedge.com/proxy/N-CSRS/0000100334-22-000050/image27.jpg)
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
2
Fund Characteristics |
APRIL 30, 2022 | |||||
Types of Investments in Portfolio | % of net assets | ||||
Common Stocks | 98.4% | ||||
Convertible Bonds | 0.4% | ||||
Short-Term Investments | 1.0% | ||||
Other Assets and Liabilities | 0.2% | ||||
Top Five Industries | % of net assets | ||||
Technology Hardware, Storage and Peripherals | 15.6% | ||||
Software | 13.1% | ||||
Interactive Media and Services | 11.2% | ||||
Semiconductors and Semiconductor Equipment | 9.5% | ||||
IT Services | 8.2% |
3
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, 2021 to April 30, 2022.
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 I Class shares of the American Century Diversified Bond Fund, in an American Century Investments account (i.e., not through a financial intermediary or employer-sponsored retirement plan account), American Century Investments may charge you a $25.00 annual 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 $25.00 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.
4
Beginning Account Value 11/1/21 | Ending Account Value 4/30/22 | Expenses Paid During Period(1) 11/1/21 - 4/30/22 | Annualized Expense Ratio(1) | |||||||||||
Actual | ||||||||||||||
Investor Class | $1,000 | $836.70 | $4.37 | 0.96% | ||||||||||
I Class | $1,000 | $837.50 | $3.46 | 0.76% | ||||||||||
Y Class | $1,000 | $838.20 | $2.78 | 0.61% | ||||||||||
A Class | $1,000 | $835.60 | $5.51 | 1.21% | ||||||||||
C Class | $1,000 | $832.50 | $8.91 | 1.96% | ||||||||||
R Class | $1,000 | $834.60 | $6.64 | 1.46% | ||||||||||
R5 Class | $1,000 | $837.50 | $3.46 | 0.76% | ||||||||||
R6 Class | $1,000 | $838.20 | $2.78 | 0.61% | ||||||||||
Hypothetical | ||||||||||||||
Investor Class | $1,000 | $1,020.03 | $4.81 | 0.96% | ||||||||||
I Class | $1,000 | $1,021.03 | $3.81 | 0.76% | ||||||||||
Y Class | $1,000 | $1,021.77 | $3.06 | 0.61% | ||||||||||
A Class | $1,000 | $1,018.79 | $6.06 | 1.21% | ||||||||||
C Class | $1,000 | $1,015.08 | $9.79 | 1.96% | ||||||||||
R Class | $1,000 | $1,017.56 | $7.30 | 1.46% | ||||||||||
R5 Class | $1,000 | $1,021.03 | $3.81 | 0.76% | ||||||||||
R6 Class | $1,000 | $1,021.77 | $3.06 | 0.61% |
(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. Annualized expense ratio reflects actual expenses, including any applicable fee waivers or expense reimbursements and excluding any acquired fund fees and expenses.
5
Schedule of Investments |
APRIL 30, 2022 (UNAUDITED)
Shares | Value | |||||||
COMMON STOCKS — 98.4% | ||||||||
Auto Components — 0.3% | ||||||||
Aptiv PLC(1) | 104,200 | $ | 11,086,880 | |||||
Automobiles — 4.1% | ||||||||
Tesla, Inc.(1) | 197,800 | 172,236,328 | ||||||
Beverages — 1.5% | ||||||||
Constellation Brands, Inc., Class A | 194,700 | 47,913,723 | ||||||
Diageo PLC | 330,500 | 16,488,266 | ||||||
64,401,989 | ||||||||
Biotechnology — 4.2% | ||||||||
Biogen, Inc.(1) | 170,400 | 35,347,776 | ||||||
Regeneron Pharmaceuticals, Inc.(1) | 125,800 | 82,916,038 | ||||||
Vertex Pharmaceuticals, Inc.(1) | 206,600 | 56,447,252 | ||||||
174,711,066 | ||||||||
Capital Markets — 1.9% | ||||||||
Moody's Corp. | 71,100 | 22,501,728 | ||||||
MSCI, Inc. | 94,100 | 39,639,625 | ||||||
S&P Global, Inc. | 40,500 | 15,248,250 | ||||||
77,389,603 | ||||||||
Containers and Packaging — 0.7% | ||||||||
Ball Corp. | 343,700 | 27,894,692 | ||||||
Energy Equipment and Services — 0.6% | ||||||||
ChampionX Corp. | 1,146,800 | 24,197,480 | ||||||
Entertainment — 1.2% | ||||||||
Electronic Arts, Inc. | 184,800 | 21,815,640 | ||||||
Walt Disney Co.(1) | 265,700 | 29,660,091 | ||||||
51,475,731 | ||||||||
Equity Real Estate Investment Trusts (REITs) — 0.6% | ||||||||
Equinix, Inc. | 36,400 | 26,174,512 | ||||||
Food and Staples Retailing — 1.7% | ||||||||
Costco Wholesale Corp. | 130,200 | 69,229,944 | ||||||
Health Care Equipment and Supplies — 0.5% | ||||||||
Penumbra, Inc.(1) | 132,300 | 22,829,688 | ||||||
Health Care Providers and Services — 4.0% | ||||||||
UnitedHealth Group, Inc. | 330,100 | 167,872,355 | ||||||
Hotels, Restaurants and Leisure — 1.8% | ||||||||
Airbnb, Inc., Class A(1) | 478,300 | 73,280,343 | ||||||
Interactive Media and Services — 11.2% | ||||||||
Alphabet, Inc., Class A(1) | 84,600 | 193,073,274 | ||||||
Alphabet, Inc., Class C(1) | 83,200 | 191,304,256 | ||||||
Meta Platforms, Inc., Class A(1) | 407,700 | 81,731,619 | ||||||
466,109,149 | ||||||||
Internet and Direct Marketing Retail — 6.3% | ||||||||
Amazon.com, Inc.(1) | 106,300 | 264,222,469 | ||||||
IT Services — 8.0% | ||||||||
Mastercard, Inc., Class A | 564,100 | 204,982,658 | ||||||
PayPal Holdings, Inc.(1) | 382,100 | 33,598,053 | ||||||
Visa, Inc., Class A | 445,100 | 94,864,163 | ||||||
333,444,874 |
6
Shares/Principal Amount | Value | |||||||
Life Sciences Tools and Services — 0.9% | ||||||||
Danaher Corp. | 143,400 | $ | 36,012,042 | |||||
Machinery — 0.5% | ||||||||
FANUC Corp. | 129,200 | 19,797,064 | ||||||
Personal Products — 0.6% | ||||||||
Estee Lauder Cos., Inc., Class A | 102,500 | 27,066,150 | ||||||
Pharmaceuticals — 1.5% | ||||||||
Bristol-Myers Squibb Co. | 859,100 | 64,664,457 | ||||||
Professional Services — 0.4% | ||||||||
Verisk Analytics, Inc. | 90,800 | 18,527,740 | ||||||
Road and Rail — 0.5% | ||||||||
Canadian Pacific Railway Ltd. | 272,000 | 19,896,345 | ||||||
Semiconductors and Semiconductor Equipment — 9.5% | ||||||||
Advanced Micro Devices, Inc.(1) | 448,100 | 38,321,512 | ||||||
Analog Devices, Inc. | 785,100 | 121,203,738 | ||||||
KLA Corp. | 162,100 | 51,752,046 | ||||||
NVIDIA Corp. | 556,700 | 103,251,149 | ||||||
Texas Instruments, Inc. | 469,900 | 80,000,475 | ||||||
394,528,920 | ||||||||
Software — 13.1% | ||||||||
Adobe, Inc.(1) | 148,400 | 58,758,980 | ||||||
Atlassian Corp. PLC, Class A(1) | 231,600 | 52,070,628 | ||||||
Crowdstrike Holdings, Inc., Class A(1) | 177,300 | 35,240,148 | ||||||
Microsoft Corp. | 1,142,700 | 317,122,104 | ||||||
Roper Technologies, Inc. | 26,000 | 12,217,920 | ||||||
Salesforce, Inc.(1) | 149,500 | 26,303,030 | ||||||
Zscaler, Inc.(1) | 219,300 | 44,460,882 | ||||||
546,173,692 | ||||||||
Specialty Retail — 5.7% | ||||||||
Home Depot, Inc. | 236,500 | 71,044,600 | ||||||
Lowe's Cos., Inc. | 459,100 | 90,777,843 | ||||||
Tractor Supply Co. | 366,600 | 73,851,570 | ||||||
235,674,013 | ||||||||
Technology Hardware, Storage and Peripherals — 15.6% | ||||||||
Apple, Inc. | 4,128,400 | 650,842,260 | ||||||
Textiles, Apparel and Luxury Goods — 1.5% | ||||||||
NIKE, Inc., Class B | 498,200 | 62,125,540 | ||||||
TOTAL COMMON STOCKS (Cost $1,619,662,608) | 4,101,865,326 | |||||||
CONVERTIBLE BONDS — 0.4% | ||||||||
Biotechnology — 0.2% | ||||||||
Ascendis Pharma A/S, 2.25%, 4/1/28(2) | $ | 10,437,000 | 9,664,662 | |||||
IT Services — 0.2% | ||||||||
Block, Inc., 0.50%, 5/15/23(3) | 5,601,000 | 7,946,418 | ||||||
TOTAL CONVERTIBLE BONDS (Cost $15,873,182) | 17,611,080 | |||||||
SHORT-TERM INVESTMENTS — 1.0% | ||||||||
Money Market Funds† | ||||||||
State Street Institutional U.S. Government Money Market Fund, Premier Class | 544,410 | 544,410 |
7
Shares/Principal Amount | Value | |||||||
State Street Navigator Securities Lending Government Money Market Portfolio(4) | 56,453 | $ | 56,453 | |||||
600,863 | ||||||||
Repurchase Agreements — 1.0% | ||||||||
BMO Capital Markets Corp., (collateralized by various U.S. Treasury obligations, 3.00% - 3.625%, 8/15/43 - 8/15/48, valued at $3,884,442), in a joint trading account at 0.25%, dated 4/29/22, due 5/2/22 (Delivery value $3,817,447) | 3,817,367 | |||||||
Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 3.125% - 3.375%, 5/15/48 - 11/15/48, valued at $38,939,601), at 0.24%, dated 4/29/22, due 5/2/22 (Delivery value $38,176,764) | 38,176,000 | |||||||
41,993,367 | ||||||||
TOTAL SHORT-TERM INVESTMENTS (Cost $42,594,230) | 42,594,230 | |||||||
TOTAL INVESTMENT SECURITIES — 99.8% (Cost $1,678,130,020) | 4,162,070,636 | |||||||
OTHER ASSETS AND LIABILITIES — 0.2% | 8,739,947 | |||||||
TOTAL NET ASSETS — 100.0% | $ | 4,170,810,583 |
WRITTEN OPTIONS CONTRACTS | |||||||||||||||||||||||
Reference Entity | Contracts | Type | Exercise Price | Expiration Date | Underlying Notional Amount | Premiums Received | Value | ||||||||||||||||
Mastercard, Inc. | 285 | Call | $ | 410.00 | 5/20/22 | $ | 10,356,330 | $ | (53,999) | $ | (27,788) | ||||||||||||
UnitedHealth Group, Inc. | 200 | Call | $ | 550.00 | 5/20/22 | $ | 10,171,000 | (52,748) | (28,000) | ||||||||||||||
$ | (106,747) | $ | (55,788) |
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS | ||||||||||||||||||||
Currency Purchased | Currency Sold | Counterparty | Settlement Date | Unrealized Appreciation (Depreciation) | ||||||||||||||||
CAD | 664,496 | USD | 526,109 | Credit Suisse AG | 6/30/22 | $ | (8,940) | |||||||||||||
CAD | 582,624 | USD | 456,034 | Goldman Sachs & Co. | 6/30/22 | (2,584) | ||||||||||||||
CAD | 1,212,848 | USD | 970,520 | Morgan Stanley | 6/30/22 | (26,575) | ||||||||||||||
USD | 15,320,607 | CAD | 19,262,768 | Credit Suisse AG | 6/30/22 | 328,622 | ||||||||||||||
USD | 462,911 | CAD | 578,816 | Credit Suisse AG | 6/30/22 | 12,425 | ||||||||||||||
USD | 556,209 | CAD | 694,960 | Credit Suisse AG | 6/30/22 | 15,330 | ||||||||||||||
$ | 318,278 |
8
NOTES TO SCHEDULE OF INVESTMENTS | ||||||||
CAD | - | Canadian Dollar | ||||||
USD | - | United States Dollar |
†Category is less than 0.05% of total net assets.
(1)Non-income producing.
(2)Security was purchased pursuant to Rule 144A or Section 4(2) under the Securities Act of 1933 and may be sold in transactions exempt from registration, normally to qualified institutional investors. The aggregate value of these securities at the period end was $9,664,662, which represented 0.2% of total net assets.
(3)Security, or a portion thereof, is on loan. At the period end, the aggregate value of securities on loan was $55,331. The amount of securities on loan indicated may not correspond with the securities on loan identified because securities with pending sales are in the process of recall from the brokers.
(4)Investment of cash collateral from securities on loan. At the period end, the aggregate value of the collateral held by the fund was $56,453.
See Notes to Financial Statements.
9
Statement of Assets and Liabilities |
APRIL 30, 2022 (UNAUDITED) | |||||
Assets | |||||
Investment securities, at value (cost of $1,678,073,567) — including $55,331 of securities on loan | $ | 4,162,014,183 | |||
Investment made with cash collateral received for securities on loan, at value (cost of $56,453) | 56,453 | ||||
Total investment securities, at value (cost of $1,678,130,020) | 4,162,070,636 | ||||
Cash | 54,000 | ||||
Receivable for investments sold | 10,816,231 | ||||
Receivable for capital shares sold | 696,568 | ||||
Unrealized appreciation on forward foreign currency exchange contracts | 356,377 | ||||
Dividends and interest receivable | 1,533,105 | ||||
Securities lending receivable | 66 | ||||
4,175,526,983 | |||||
Liabilities | |||||
Written options, at value (premiums received $106,747) | 55,788 | ||||
Payable for collateral received for securities on loan | 56,453 | ||||
Payable for capital shares redeemed | 1,048,635 | ||||
Unrealized depreciation on forward foreign currency exchange contracts | 38,099 | ||||
Accrued management fees | 3,499,665 | ||||
Distribution and service fees payable | 17,760 | ||||
4,716,400 | |||||
Net Assets | $ | 4,170,810,583 | |||
Net Assets Consist of: | |||||
Capital (par value and paid-in surplus) | $ | 1,454,986,370 | |||
Distributable earnings | 2,715,824,213 | ||||
$ | 4,170,810,583 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | |||||||||
Investor Class, $0.01 Par Value | $3,876,630,039 | 40,419,984 | $95.91 | ||||||||
I Class, $0.01 Par Value | $133,046,397 | 1,348,771 | $98.64 | ||||||||
Y Class, $0.01 Par Value | $88,282,565 | 889,739 | $99.22 | ||||||||
A Class, $0.01 Par Value | $58,619,474 | 635,148 | $92.29* | ||||||||
C Class, $0.01 Par Value | $3,426,249 | 44,299 | $77.34 | ||||||||
R Class, $0.01 Par Value | $3,824,661 | 42,313 | $90.39 | ||||||||
R5 Class, $0.01 Par Value | $10,851 | 110 | $98.65 | ||||||||
R6 Class, $0.01 Par Value | $6,970,347 | 70,350 | $99.08 |
*Maximum offering price $97.92 (net asset value divided by 0.9425).
See Notes to Financial Statements.
10
Statement of Operations |
FOR THE SIX MONTHS ENDED APRIL 30, 2022 (UNAUDITED) | |||||
Investment Income (Loss) | |||||
Income: | |||||
Dividends (net of foreign taxes withheld of $37,666) | $ | 13,411,461 | |||
Interest | 120,211 | ||||
Securities lending, net | 943 | ||||
13,532,615 | |||||
Expenses: | |||||
Management fees | 23,091,121 | ||||
Distribution and service fees: | |||||
A Class | 83,588 | ||||
C Class | 19,448 | ||||
R Class | 10,593 | ||||
Directors' fees and expenses | 51,244 | ||||
Other expenses | 228 | ||||
23,256,222 | |||||
Fees waived(1) | (756,009) | ||||
22,500,213 | |||||
Net investment income (loss) | (8,967,598) | ||||
Realized and Unrealized Gain (Loss) | |||||
Net realized gain (loss) on: | |||||
Investment transactions | 255,608,010 | ||||
Forward foreign currency exchange contract transactions | (140,028) | ||||
Written options contract transactions | 661,265 | ||||
Foreign currency translation transactions | (4,478) | ||||
256,124,769 | |||||
Change in net unrealized appreciation (depreciation) on: | |||||
Investments | (1,066,215,771) | ||||
Forward foreign currency exchange contracts | 681,619 | ||||
Written options contracts | 50,959 | ||||
Translation of assets and liabilities in foreign currencies | (10,879) | ||||
(1,065,494,072) | |||||
Net realized and unrealized gain (loss) | (809,369,303) | ||||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | (818,336,901) |
(1)Amount consists of $703,420, $23,511, $16,078, $10,635, $619, $674, $2 and $1,070 for Investor Class, I Class, Y Class, A Class, C Class, R Class, R5 Class and R6 Class, respectively.
See Notes to Financial Statements.
11
Statement of Changes in Net Assets |
SIX MONTHS ENDED APRIL 30, 2022 (UNAUDITED) AND YEAR ENDED OCTOBER 31, 2021 | ||||||||
Increase (Decrease) in Net Assets | April 30, 2022 | October 31, 2021 | ||||||
Operations | ||||||||
Net investment income (loss) | $ | (8,967,598) | $ | (16,451,537) | ||||
Net realized gain (loss) | 256,124,769 | 394,062,754 | ||||||
Change in net unrealized appreciation (depreciation) | (1,065,494,072) | 1,143,036,977 | ||||||
Net increase (decrease) in net assets resulting from operations | (818,336,901) | 1,520,648,194 | ||||||
Distributions to Shareholders | ||||||||
From earnings: | ||||||||
Investor Class | (367,899,374) | (240,030,213) | ||||||
I Class | (11,838,751) | (7,922,820) | ||||||
Y Class | (7,876,454) | (4,985,113) | ||||||
A Class | (5,779,062) | (3,739,458) | ||||||
C Class | (386,505) | (416,002) | ||||||
R Class | (370,140) | (245,807) | ||||||
R5 Class | (978) | (604) | ||||||
R6 Class | (492,899) | (271,184) | ||||||
Decrease in net assets from distributions | (394,644,163) | (257,611,201) | ||||||
Capital Share Transactions | ||||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | 264,999,446 | (1,114,068) | ||||||
Net increase (decrease) in net assets | (947,981,618) | 1,261,922,925 | ||||||
Net Assets | ||||||||
Beginning of period | 5,118,792,201 | 3,856,869,276 | ||||||
End of period | $ | 4,170,810,583 | $ | 5,118,792,201 |
See Notes to Financial Statements.
12
Notes to Financial Statements |
APRIL 30, 2022 (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’s investment objective is to seek long-term capital growth.
The fund offers the Investor Class, I Class, Y Class, A Class, C Class, R Class, R5 Class and 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.
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 (NAV) 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 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. Convertible bonds are valued using market models that consider trade data, quotations from dealers and active market makers, relevant yield curve and spread data, 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 NAV per share. Exchange-traded options contracts are valued at a mean as provided by independent pricing services. 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.
13
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 NAV 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. 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. For convertible bonds, the premiums attributable only to the debt instrument are amortized. Securities lending income is net of fees and rebates earned by the lending agent for its services.
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.
Segregated Assets — In accordance with the 1940 Act, the fund segregates assets on its books and records to cover certain types of investment securities and other financial instruments. 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 collateral requirements.
14
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.
Securities Lending — Securities are lent to qualified financial institutions and brokers. State Street Bank & Trust Co. serves as securities lending agent to the fund pursuant to a Securities Lending Agreement. The lending of securities exposes the fund to risks such as: the borrowers may fail to return the loaned securities, the borrowers may not be able to provide additional collateral, the fund may experience delays in recovery of the loaned securities or delays in access to collateral, or the fund may experience losses related to the investment collateral. To minimize certain risks, loan counterparties pledge collateral in the form of cash and/or securities. The lending agent has agreed to indemnify the fund in the case of default of any securities borrowed. Cash collateral received is invested in the State Street Navigator Securities Lending Government Money Market Portfolio, a money market mutual fund registered under the 1940 Act. The loans may also be secured by U.S. government securities in an amount at least equal to the market value of the securities loaned, plus accrued interest and dividends, determined on a daily basis and adjusted accordingly. By lending securities, the fund seeks to increase its net investment income through the receipt of interest and fees. Such income is reflected separately within the Statement of Operations. The value of loaned securities and related collateral outstanding at period end, if any, are shown on a gross basis within the Schedule of Investments and Statement of Assets and Liabilities.
The following table reflects a breakdown of transactions accounted for as secured borrowings, the gross obligation by the type of collateral pledged, and the remaining contractual maturity of those transactions as of April 30, 2022.
Remaining Contractual Maturity of Agreements | |||||||||||||||||
Overnight and Continuous | <30 days | Between 30 & 90 days | >90 days | Total | |||||||||||||
Securities Lending Transactions(1) | |||||||||||||||||
Convertible Bonds | $ | 56,453 | — | — | — | $ | 56,453 | ||||||||||
Gross amount of recognized liabilities for securities lending transactions | $ | 56,453 |
(1)Amount represents the payable for cash collateral received for securities on loan. This will generally be in the Overnight and Continuous column as the securities are typically callable on demand.
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.
15
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 ACIM will pay all expenses of managing and operating the fund, except brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), extraordinary expenses, and expenses incurred in connection with the provision of shareholder services and distribution services under a plan adopted pursuant to Rule 12b-1 under the 1940 Act. The fee is computed and accrued daily based on each class's daily net assets and paid monthly in arrears. The difference in the fee among the classes is a result of their separate arrangements for non-Rule 12b-1 shareholder services. It is not the result of any difference in advisory or custodial fees or other expenses related to the management of the fund's assets, which do not vary by class. 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 use very similar investment teams and strategies (strategy assets). During the period ended April 30, 2022, the investment advisor agreed to waive a portion of the fund’s management fee such that the management fee does not exceed 0.954% for Investor Class, A Class, C Class and R Class, 0.754% for I Class and R5 Class, and 0.604% for Y Class and R6 Class. The investment advisor expects this waiver arrangement to continue until February 28, 2023 and cannot terminate it prior to such date without the approval of the Board of Directors.
The management fee schedule range and the effective annual management fee before and after waiver for each class for the period ended April 30, 2022 are as follows:
Management Fee Schedule Range | Effective Annual Management Fee | ||||||||||
Before Waiver | After Waiver | ||||||||||
Investor Class | 0.800% to 0.990% | 0.98% | 0.95% | ||||||||
I Class | 0.600% to 0.790% | 0.78% | 0.75% | ||||||||
Y Class | 0.450% to 0.640% | 0.63% | 0.60% | ||||||||
A Class | 0.800% to 0.990% | 0.98% | 0.95% | ||||||||
C Class | 0.800% to 0.990% | 0.98% | 0.95% | ||||||||
R Class | 0.800% to 0.990% | 0.98% | 0.95% | ||||||||
R5 Class | 0.600% to 0.790% | 0.78% | 0.75% | ||||||||
R6 Class | 0.450% to 0.640% | 0.63% | 0.60% |
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 period ended April 30, 2022 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.
Interfund Transactions — The fund may enter into security transactions with other American Century Investments funds and other client accounts of the investment advisor, in accordance with the 1940 Act rules and procedures adopted by the Board of Directors. The rules and procedures require, among other things, that these transactions be effected at the independent current market price of the security. There were no interfund transactions during the period.
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the period ended April 30, 2022 were $344,466,818 and $527,245,423, respectively.
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5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended April 30, 2022 | Year ended October 31, 2021 | |||||||||||||
Shares | Amount | Shares | Amount | |||||||||||
Investor Class/Shares Authorized | 475,000,000 | 475,000,000 | ||||||||||||
Sold | 519,864 | $ | 57,085,021 | 892,572 | $ | 96,405,055 | ||||||||
Issued in reinvestment of distributions | 3,012,004 | 350,115,324 | 2,304,332 | 226,851,440 | ||||||||||
Redeemed | (1,547,657) | (171,617,601) | (3,050,748) | (327,630,332) | ||||||||||
1,984,211 | 235,582,744 | 146,156 | (4,373,837) | |||||||||||
I Class/Shares Authorized | 40,000,000 | 40,000,000 | ||||||||||||
Sold | 163,289 | 18,142,570 | 241,612 | 26,516,887 | ||||||||||
Issued in reinvestment of distributions | 94,457 | 11,283,831 | 75,030 | 7,559,973 | ||||||||||
Redeemed | (138,677) | (15,646,408) | (336,569) | (36,292,186) | ||||||||||
119,069 | 13,779,993 | (19,927) | (2,215,326) | |||||||||||
Y Class/Shares Authorized | 30,000,000 | 30,000,000 | ||||||||||||
Sold | 144,722 | 16,350,877 | 539,904 | 62,766,563 | ||||||||||
Issued in reinvestment of distributions | 65,028 | 7,809,242 | 48,856 | 4,939,354 | ||||||||||
Redeemed | (130,741) | (14,626,262) | (532,009) | (61,052,630) | ||||||||||
79,009 | 9,533,857 | 56,751 | 6,653,287 | |||||||||||
A Class/Shares Authorized | 30,000,000 | 40,000,000 | ||||||||||||
Sold | 32,385 | 3,342,977 | 64,313 | 6,610,145 | ||||||||||
Issued in reinvestment of distributions | 50,370 | 5,639,954 | 38,481 | 3,669,198 | ||||||||||
Redeemed | (54,634) | (5,764,596) | (94,091) | (9,834,703) | ||||||||||
28,121 | 3,218,335 | 8,703 | 444,640 | |||||||||||
C Class/Shares Authorized | 20,000,000 | 30,000,000 | ||||||||||||
Sold | 3,667 | 316,836 | 6,208 | 568,197 | ||||||||||
Issued in reinvestment of distributions | 4,031 | 379,383 | 5,050 | 413,834 | ||||||||||
Redeemed | (3,939) | (349,260) | (38,754) | (3,272,318) | ||||||||||
3,759 | 346,959 | (27,496) | (2,290,287) | |||||||||||
R Class/Shares Authorized | 20,000,000 | 30,000,000 | ||||||||||||
Sold | 5,297 | 541,083 | 9,167 | 939,879 | ||||||||||
Issued in reinvestment of distributions | 3,372 | 370,140 | 2,207 | 206,867 | ||||||||||
Redeemed | (4,152) | (420,730) | (11,240) | (1,143,785) | ||||||||||
4,517 | 490,493 | 134 | 2,961 | |||||||||||
R5 Class/Shares Authorized | 20,000,000 | 30,000,000 | ||||||||||||
Issued in reinvestment of distributions | 8 | 978 | 6 | 604 | ||||||||||
R6 Class/Shares Authorized | 30,000,000 | 40,000,000 | ||||||||||||
Sold | 23,785 | 2,510,915 | 13,479 | 1,430,105 | ||||||||||
Issued in reinvestment of distributions | 4,066 | 487,636 | 2,671 | 269,645 | ||||||||||
Redeemed | (8,615) | (952,464) | (9,294) | (1,035,860) | ||||||||||
19,236 | 2,046,087 | 6,856 | 663,890 | |||||||||||
Net increase (decrease) | 2,237,930 | $ | 264,999,446 | 171,183 | $ | (1,114,068) |
17
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.
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 | $ | 4,045,683,651 | $ | 56,181,675 | — | ||||||
Convertible Bonds | — | 17,611,080 | — | ||||||||
Short-Term Investments | 600,863 | 41,993,367 | — | ||||||||
$ | 4,046,284,514 | $ | 115,786,122 | — | |||||||
Other Financial Instruments | |||||||||||
Forward Foreign Currency Exchange Contracts | — | $ | 356,377 | — | |||||||
Liabilities | |||||||||||
Other Financial Instruments | |||||||||||
Forward Foreign Currency Exchange Contracts | — | $ | 38,099 | — | |||||||
Written Options Contracts | $ | 55,788 | — | — | |||||||
$ | 55,788 | $ | 38,099 | — |
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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 options contracts based on an equity index or specific security in order to manage its exposure to changes in market conditions. The risks of entering into equity price risk derivative instruments include the possible lack of liquidity, failure of the counterparty to meet its obligations, and that there may be unfavorable changes in the underlying investments or instruments. A fund may purchase or write an option contract to protect against declines in market value on the underlying index or security. A purchased option contract provides the fund a right, but not an obligation, to buy (call) or sell (put) an equity-related asset at a specified exercise price within a certain period or on a specific date. A written option contract holds the corresponding obligation to sell (call writing) or buy (put writing) the underlying equity-related asset if the purchaser exercises the option contract. The buyer pays the seller an initial purchase price (premium) for this right. Option contracts purchased by a fund are accounted for in the same manner as marketable portfolio securities. The premium received by a fund for option contracts written is recorded as a liability and valued daily. The proceeds from securities sold through the exercise of option contracts are decreased by the premium paid to purchase the option contracts. A fund may recognize a realized gain or loss when the option contract is closed, exercised or expires. Net realized and unrealized gains or losses occurring during the holding period of purchased options contracts are a component of net realized gain (loss) on investment transactions and change in net unrealized appreciation (depreciation) on investments, respectively. Net realized and unrealized gains or losses occurring during the holding period of written options contracts are a component of net realized gain (loss) on written options contract transactions and change in net unrealized appreciation (depreciation) on written options contracts, respectively. The fund’s average exposure to equity price risk derivative instruments held during the period was 1,310 written options contracts.
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 settlement 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 forward foreign currency exchange contract transactions and change in net unrealized appreciation (depreciation) on forward foreign currency exchange contracts, 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 $15,975,223.
Value of Derivative Instruments as of April 30, 2022
Asset Derivatives | Liability Derivatives | |||||||||||||
Type of Risk Exposure | Location on Statement of Assets and Liabilities | Value | Location on Statement of Assets and Liabilities | Value | ||||||||||
Equity Price Risk | Written Options | — | Written Options | $ | 55,788 | |||||||||
Foreign Currency Risk | Unrealized appreciation on forward foreign currency exchange contracts | $ | 356,377 | Unrealized depreciation on forward foreign currency exchange contracts | 38,099 | |||||||||
$ | 356,377 | $ | 93,887 |
19
Effect of Derivative Instruments on the Statement of Operations for the Six Months Ended April 30, 2022
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 written options contract transactions | $ | 661,265 | Change in net unrealized appreciation (depreciation) on written options contracts | $ | 50,959 | ||||||||
Foreign Currency Risk | Net realized gain (loss) on forward foreign currency exchange contract transactions | (140,028) | Change in net unrealized appreciation (depreciation) on forward foreign currency exchange contracts | 681,619 | ||||||||||
$ | 521,237 | $ | 732,578 |
8. Risk Factors
The value of the fund’s shares will go up and down, sometimes rapidly or unpredictably, based on the performance of the securities owned by the fund and other factors generally affecting the securities market. Market risks, including political, regulatory, economic and social developments, can affect the value of the fund’s investments. Natural disasters, public health emergencies, war, terrorism and other unforeseeable events may lead to increased market volatility and may have adverse long-term effects on world economies and markets generally.
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 period end, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $ | 1,678,152,266 | |||
Gross tax appreciation of investments | $ | 2,540,471,626 | |||
Gross tax depreciation of investments | (56,553,256) | ||||
Net tax appreciation (depreciation) of investments | $ | 2,483,918,370 |
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, 2021, the fund had late-year ordinary loss deferrals of $(15,938,766), 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: | 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 | |||||||||||||||||||||||||||||||||||||||||||||||
2022(3) | $124.12 | (0.21) | (18.37) | (18.58) | — | (9.63) | (9.63) | $95.91 | (16.33)% | 0.96%(4) | 0.99%(4) | (0.39)%(4) | (0.42)%(4) | 7% | $3,876,630 | ||||||||||||||||||||||||||||||||
2021 | $93.93 | (0.40) | 36.91 | 36.51 | — | (6.32) | (6.32) | $124.12 | 40.63% | 0.97% | 0.99% | (0.37)% | (0.39)% | 11% | $4,770,672 | ||||||||||||||||||||||||||||||||
2020 | $78.58 | (0.13) | 19.83 | 19.70 | — | (4.35) | (4.35) | $93.93 | 26.10% | 0.97% | 0.99% | (0.15)% | (0.17)% | 16% | $3,596,722 | ||||||||||||||||||||||||||||||||
2019 | $73.74 | —(5) | 10.42 | 10.42 | (0.03) | (5.55) | (5.58) | $78.58 | 15.98% | 0.97% | 0.99% | 0.00%(6) | (0.02)% | 17% | $3,054,007 | ||||||||||||||||||||||||||||||||
2018 | $71.92 | 0.04 | 6.20 | 6.24 | (0.21) | (4.21) | (4.42) | $73.74 | 8.94% | 0.97% | 0.99% | 0.06% | 0.04% | 22% | $2,835,970 | ||||||||||||||||||||||||||||||||
2017 | $58.32 | 0.21 | 15.59 | 15.80 | (0.22) | (1.98) | (2.20) | $71.92 | 27.93% | 0.99% | 1.00% | 0.33% | 0.32% | 19% | $2,753,729 | ||||||||||||||||||||||||||||||||
I Class | |||||||||||||||||||||||||||||||||||||||||||||||
2022(3) | $127.27 | (0.11) | (18.89) | (19.00) | — | (9.63) | (9.63) | $98.64 | (16.25)% | 0.76%(4) | 0.79%(4) | (0.19)%(4) | (0.22)%(4) | 7% | $133,046 | ||||||||||||||||||||||||||||||||
2021 | $95.99 | (0.19) | 37.79 | 37.60 | — | (6.32) | (6.32) | $127.27 | 40.90% | 0.77% | 0.79% | (0.17)% | (0.19)% | 11% | $156,502 | ||||||||||||||||||||||||||||||||
2020 | $80.06 | 0.05 | 20.23 | 20.28 | — | (4.35) | (4.35) | $95.99 | 26.35% | 0.77% | 0.79% | 0.05% | 0.03% | 16% | $119,954 | ||||||||||||||||||||||||||||||||
2019 | $75.02 | 0.13 | 10.63 | 10.76 | (0.17) | (5.55) | (5.72) | $80.06 | 16.22% | 0.77% | 0.79% | 0.20% | 0.18% | 17% | $105,310 | ||||||||||||||||||||||||||||||||
2018 | $73.11 | 0.19 | 6.29 | 6.48 | (0.36) | (4.21) | (4.57) | $75.02 | 9.15% | 0.77% | 0.79% | 0.26% | 0.24% | 22% | $70,986 | ||||||||||||||||||||||||||||||||
2017 | $59.25 | 0.31 | 15.87 | 16.18 | (0.34) | (1.98) | (2.32) | $73.11 | 28.20% | 0.79% | 0.80% | 0.53% | 0.52% | 19% | $60,895 |
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) | |||||||||||||||||||||||||||||||||
Y Class | |||||||||||||||||||||||||||||||||||||||||||||||
2022(3) | $127.87 | (0.02) | (19.00) | (19.02) | — | (9.63) | (9.63) | $99.22 | (16.18)% | 0.61%(4) | 0.64%(4) | (0.04)%(4) | (0.07)%(4) | 7% | $88,283 | ||||||||||||||||||||||||||||||||
2021 | $96.28 | (0.03) | 37.94 | 37.91 | — | (6.32) | (6.32) | $127.87 | 41.11% | 0.62% | 0.64% | (0.02)% | (0.04)% | 11% | $103,669 | ||||||||||||||||||||||||||||||||
2020 | $80.17 | 0.16 | 20.30 | 20.46 | — | (4.35) | (4.35) | $96.28 | 26.55% | 0.62% | 0.64% | 0.20% | 0.18% | 16% | $72,595 | ||||||||||||||||||||||||||||||||
2019 | $75.13 | 0.22 | 10.64 | 10.86 | (0.27) | (5.55) | (5.82) | $80.17 | 16.38% | 0.62% | 0.64% | 0.35% | 0.33% | 17% | $46,034 | ||||||||||||||||||||||||||||||||
2018 | $73.13 | 0.28 | 6.33 | 6.61 | (0.40) | (4.21) | (4.61) | $75.13 | 9.34% | 0.62% | 0.64% | 0.41% | 0.39% | 22% | $14,529 | ||||||||||||||||||||||||||||||||
2017(7) | $63.80 | 0.22 | 9.11 | 9.33 | — | — | — | $73.13 | 14.62% | 0.64%(4) | 0.65%(4) | 0.59%(4) | 0.58%(4) | 19%(8) | $6 | ||||||||||||||||||||||||||||||||
A Class | |||||||||||||||||||||||||||||||||||||||||||||||
2022(3) | $119.94 | (0.34) | (17.68) | (18.02) | — | (9.63) | (9.63) | $92.29 | (16.44)% | 1.21%(4) | 1.24%(4) | (0.64)%(4) | (0.67)%(4) | 7% | $58,619 | ||||||||||||||||||||||||||||||||
2021 | $91.18 | (0.65) | 35.73 | 35.08 | — | (6.32) | (6.32) | $119.94 | 40.26% | 1.22% | 1.24% | (0.62)% | (0.64)% | 11% | $72,806 | ||||||||||||||||||||||||||||||||
2020 | $76.58 | (0.33) | 19.28 | 18.95 | — | (4.35) | (4.35) | $91.18 | 25.79% | 1.22% | 1.24% | (0.40)% | (0.42)% | 16% | $54,558 | ||||||||||||||||||||||||||||||||
2019 | $72.15 | (0.18) | 10.16 | 9.98 | — | (5.55) | (5.55) | $76.58 | 15.69% | 1.22% | 1.24% | (0.25)% | (0.27)% | 17% | $42,013 | ||||||||||||||||||||||||||||||||
2018 | $70.45 | (0.14) | 6.07 | 5.93 | (0.02) | (4.21) | (4.23) | $72.15 | 8.67% | 1.22% | 1.24% | (0.19)% | (0.21)% | 22% | $39,459 | ||||||||||||||||||||||||||||||||
2017 | $57.16 | 0.05 | 15.29 | 15.34 | (0.07) | (1.98) | (2.05) | $70.45 | 27.63% | 1.24% | 1.25% | 0.08% | 0.07% | 19% | $40,345 |
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) | |||||||||||||||||||||||||||||||||
C Class | |||||||||||||||||||||||||||||||||||||||||||||||
2022(3) | $102.40 | (0.62) | (14.81) | (15.43) | — | (9.63) | (9.63) | $77.34 | (16.75)% | 1.96%(4) | 1.99%(4) | (1.39)%(4) | (1.42)%(4) | 7% | $3,426 | ||||||||||||||||||||||||||||||||
2021 | $79.23 | (1.21) | 30.70 | 29.49 | — | (6.32) | (6.32) | $102.40 | 39.23% | 1.97% | 1.99% | (1.37)% | (1.39)% | 11% | $4,151 | ||||||||||||||||||||||||||||||||
2020 | $67.55 | (0.82) | 16.85 | 16.03 | — | (4.35) | (4.35) | $79.23 | 24.85% | 1.97% | 1.99% | (1.15)% | (1.17)% | 16% | $5,390 | ||||||||||||||||||||||||||||||||
2019 | $64.79 | (0.63) | 8.94 | 8.31 | — | (5.55) | (5.55) | $67.55 | 14.82% | 1.97% | 1.99% | (1.00)% | (1.02)% | 17% | $5,523 | ||||||||||||||||||||||||||||||||
2018 | $64.11 | (0.62) | 5.51 | 4.89 | — | (4.21) | (4.21) | $64.79 | 7.86% | 1.97% | 1.99% | (0.94)% | (0.96)% | 22% | $5,700 | ||||||||||||||||||||||||||||||||
2017 | $52.51 | (0.39) | 13.97 | 13.58 | — | (1.98) | (1.98) | $64.11 | 26.66% | 1.99% | 2.00% | (0.67)% | (0.68)% | 19% | $5,668 | ||||||||||||||||||||||||||||||||
R Class | |||||||||||||||||||||||||||||||||||||||||||||||
2022(3) | $117.80 | (0.46) | (17.32) | (17.78) | — | (9.63) | (9.63) | $90.39 | (16.54)% | 1.46%(4) | 1.49%(4) | (0.89)%(4) | (0.92)%(4) | 7% | $3,825 | ||||||||||||||||||||||||||||||||
2021 | $89.86 | (0.90) | 35.16 | 34.26 | — | (6.32) | (6.32) | $117.80 | 39.92% | 1.47% | 1.49% | (0.87)% | (0.89)% | 11% | $4,452 | ||||||||||||||||||||||||||||||||
2020 | $75.71 | (0.53) | 19.03 | 18.50 | — | (4.35) | (4.35) | $89.86 | 25.48% | 1.47% | 1.49% | (0.65)% | (0.67)% | 16% | $3,384 | ||||||||||||||||||||||||||||||||
2019 | $71.56 | (0.36) | 10.06 | 9.70 | — | (5.55) | (5.55) | $75.71 | 15.40% | 1.47% | 1.49% | (0.50)% | (0.52)% | 17% | $3,019 | ||||||||||||||||||||||||||||||||
2018 | $70.05 | (0.30) | 6.02 | 5.72 | — | (4.21) | (4.21) | $71.56 | 8.41% | 1.47% | 1.49% | (0.44)% | (0.46)% | 22% | $2,259 | ||||||||||||||||||||||||||||||||
2017 | $56.92 | (0.11) | 15.22 | 15.11 | — | (1.98) | (1.98) | $70.05 | 27.30% | 1.49% | 1.50% | (0.17)% | (0.18)% | 19% | $3,518 |
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) | |||||||||||||||||||||||||||||||||
R5 Class | |||||||||||||||||||||||||||||||||||||||||||||||
2022(3) | $127.28 | (0.11) | (18.89) | (19.00) | — | (9.63) | (9.63) | $98.65 | (16.25)% | 0.76%(4) | 0.79%(4) | (0.19)%(4) | (0.22)%(4) | 7% | $11 | ||||||||||||||||||||||||||||||||
2021 | $95.99 | (0.18) | 37.79 | 37.61 | — | (6.32) | (6.32) | $127.28 | 40.91% | 0.77% | 0.79% | (0.17)% | (0.19)% | 11% | $13 | ||||||||||||||||||||||||||||||||
2020 | $80.07 | 0.03 | 20.24 | 20.27 | — | (4.35) | (4.35) | $95.99 | 26.34% | 0.77% | 0.79% | 0.05% | 0.03% | 16% | $9 | ||||||||||||||||||||||||||||||||
2019 | $75.04 | 0.13 | 10.62 | 10.75 | (0.17) | (5.55) | (5.72) | $80.07 | 16.20% | 0.77% | 0.79% | 0.20% | 0.18% | 17% | $7 | ||||||||||||||||||||||||||||||||
2018 | $73.10 | 0.18 | 6.28 | 6.46 | (0.31) | (4.21) | (4.52) | $75.04 | 9.13% | 0.77% | 0.79% | 0.26% | 0.24% | 22% | $6 | ||||||||||||||||||||||||||||||||
2017(7) | $63.83 | 0.17 | 9.10 | 9.27 | — | — | — | $73.10 | 14.52% | 0.79%(4) | 0.80%(4) | 0.44%(4) | 0.43%(4) | 19%(8) | $6 | ||||||||||||||||||||||||||||||||
R6 Class | |||||||||||||||||||||||||||||||||||||||||||||||
2022(3) | $127.70 | (0.03) | (18.96) | (18.99) | — | (9.63) | (9.63) | $99.08 | (16.18)% | 0.61%(4) | 0.64%(4) | (0.04)%(4) | (0.07)%(4) | 7% | $6,970 | ||||||||||||||||||||||||||||||||
2021 | $96.16 | (0.02) | 37.88 | 37.86 | — | (6.32) | (6.32) | $127.70 | 41.11% | 0.62% | 0.64% | (0.02)% | (0.04)% | 11% | $6,527 | ||||||||||||||||||||||||||||||||
2020 | $80.08 | 0.16 | 20.27 | 20.43 | — | (4.35) | (4.35) | $96.16 | 26.54% | 0.62% | 0.64% | 0.20% | 0.18% | 16% | $4,256 | ||||||||||||||||||||||||||||||||
2019 | $75.05 | 0.25 | 10.60 | 10.85 | (0.27) | (5.55) | (5.82) | $80.08 | 16.39% | 0.62% | 0.64% | 0.35% | 0.33% | 17% | $2,544 | ||||||||||||||||||||||||||||||||
2018 | $73.13 | 0.31 | 6.29 | 6.60 | (0.47) | (4.21) | (4.68) | $75.05 | 9.33% | 0.62% | 0.64% | 0.41% | 0.39% | 22% | $1,708 | ||||||||||||||||||||||||||||||||
2017 | $59.27 | 0.51 | 15.76 | 16.27 | (0.43) | (1.98) | (2.41) | $73.13 | 28.38% | 0.64% | 0.65% | 0.68% | 0.67% | 19% | $1,519 |
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, 2022 (unaudited).
(4)Annualized.
(5)Amount is less than $0.005.
(6)Ratio was less than 0.005%.
(7)April 10, 2017 (commencement of sale) through October 31, 2017.
(8)Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended October 31, 2017.
See Notes to Financial Statements.
Liquidity Risk Management Program |
The Fund has adopted a liquidity risk management program (the “program”). The Fund’s Board of Directors (the "Board") has designated American Century Investment Management, Inc. (“ACIM”) as the administrator of the program. Personnel of ACIM or its affiliates conduct the day-to-day operation of the program pursuant to policies and procedures administered by the Program Administrator, including members of ACIM’s Investment Oversight Committee who are members of the ACIM’s Investment Management and Global Analytics departments.
Under the program, ACIM manages the Fund’s liquidity risk, which is the risk that the Fund could not meet shareholder redemption requests without significant dilution of remaining shareholders’ interests in the Fund. This risk is managed by monitoring the degree of liquidity of the Fund’s investments, limiting the amount of the Fund’s illiquid investments, and utilizing various risk management tools and facilities available to the Fund for meeting shareholder redemptions, among other means. ACIM’s process of determining the degree of liquidity of certain Fund’s investments is supported by a third-party liquidity assessment vendor.
The Board reviewed a report prepared by ACIM regarding the operation and effectiveness of the program for the period January 1, 2021 through December 31, 2021. No significant liquidity events impacting the Fund were noted in the report. In addition, ACIM provided its assessment that the program had been effective in managing the Fund’s liquidity risk.
26
Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain retirement accounts 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 and change your withholding percentage for future distributions.
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.
*Some 403(b), 457 and qualified retirement plan distributions may be subject to 20% mandatory withholding, as they 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 American Century Investments’ website at americancentury.com/proxy 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 americancentury.com/proxy. 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 as an exhibit to its reports on Form N-PORT. These portfolio holdings are available on the fund's website at americancentury.com and, upon request, by calling 1-800-345-2021. The fund’s Form N-PORT reports are available on the SEC’s website at sec.gov.
27
Notes |
28
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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. | ||||||||
©2022 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-92357 2206 |
![image8.jpg](https://capedge.com/proxy/N-CSRS/0000100334-22-000050/image8.jpg)
Semiannual Report | |||||
April 30, 2022 | |||||
Small Cap Growth Fund | |||||
Investor Class (ANOIX) | |||||
I Class (ANONX) | |||||
Y Class (ANOYX) | |||||
A Class (ANOAX) | |||||
C Class (ANOCX) | |||||
R Class (ANORX) | |||||
R5 Class (ANOGX) | |||||
R6 Class (ANODX) | |||||
G Class (ANOHX) |
Table of Contents |
President’s Letter | |||||
Fund Characteristics | |||||
Shareholder Fee Example | |||||
Schedule of Investments | |||||
Statement of Assets and Liabilities | |||||
Statement of Operations | |||||
Statement of Changes in Net Assets | |||||
Notes to Financial Statements | |||||
Financial Highlights | |||||
Liquidity Risk Management Program | |||||
Additional Information |
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 |
![image30.jpg](https://capedge.com/proxy/N-CSRS/0000100334-22-000050/image30.jpg)
Dear Investor:
Thank you for reviewing this semiannual report for the period ended April 30, 2022. It provides a market overview (below), followed by a schedule of fund investments and other financial information. For additional investment insights, please visit americancentury.com.
Escalating Inflation, Sharp Volatility Hampered Investment Returns
Investors faced increasingly challenging market conditions as the reporting period progressed. From soaring inflation and rising interest rates to mounting geopolitical unrest and slowing growth, most asset classes struggled amid intense volatility.
Inflation was already at multiyear highs when the reporting period began. This was largely due to massive fiscal and monetary support, escalating energy prices, supply chain breakdowns and labor market shortages. Russia’s invasion of Ukraine in February sent commodity prices even higher, exacerbating existing inflationary pressures and further damaging global supply chains.
By period-end, inflation stood at a 40-year high in the U.S., a 30-year high in the U.K. and a record high in the eurozone. Most emerging markets also grappled with rising inflation. At the same time, global growth slowed dramatically.
In response to surging inflation, the Federal Reserve in March implemented its first rate hike in more than three years and ended its asset purchase program. The Bank of England executed a series of rate hikes, while European Central Bank officials announced their asset purchase program would end in the third quarter.
The combination of accelerating inflation, tighter monetary policy, geopolitical unrest and slowing economic growth fueled widespread and sharp market volatility. Global stock and bond returns plunged for the six-month period. Perceived inflation-fighting assets, including real estate investment trusts, generally fared much better than other securities.
Staying Disciplined in Uncertain Times
We expect market volatility to linger as investors navigate this complex backdrop. In addition, Russia’s invasion of Ukraine has further complicated a tense geopolitical environment. We will continue to monitor the evolving situation and its implications for our clients and investment exposure.
We appreciate your confidence in us during these extraordinary times. Our firm has a long history of helping clients weather unpredictable markets, and we’re confident we will continue to meet today’s challenges.
Sincerely,
![image27.jpg](https://capedge.com/proxy/N-CSRS/0000100334-22-000050/image27.jpg)
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
2
Fund Characteristics |
APRIL 30, 2022 | |||||
Types of Investments in Portfolio | % of net assets | ||||
Common Stocks | 98.2% | ||||
Short-Term Investments | 2.7% | ||||
Other Assets and Liabilities | (0.9)% | ||||
Top Five Industries | % of net assets | ||||
Software | 10.6% | ||||
Biotechnology | 8.7% | ||||
Health Care Providers and Services | 6.4% | ||||
Hotels, Restaurants and Leisure | 5.4% | ||||
Health Care Equipment and Supplies | 4.6% |
3
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, 2021 to April 30, 2022.
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 I Class shares of the American Century Diversified Bond Fund, in an American Century Investments account (i.e., not through a financial intermediary or employer-sponsored retirement plan account), American Century Investments may charge you a $25.00 annual 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 $25.00 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.
4
Beginning Account Value 11/1/21 | Ending Account Value 4/30/22 | Expenses Paid During Period(1) 11/1/21 - 4/30/22 | Annualized Expense Ratio(1) | |||||||||||
Actual | ||||||||||||||
Investor Class | $1,000 | $760.90 | $5.11 | 1.17% | ||||||||||
I Class | $1,000 | $761.70 | $4.24 | 0.97% | ||||||||||
Y Class | $1,000 | $762.50 | $3.58 | 0.82% | ||||||||||
A Class | $1,000 | $760.10 | $6.20 | 1.42% | ||||||||||
C Class | $1,000 | $756.90 | $9.45 | 2.17% | ||||||||||
R Class | $1,000 | $759.30 | $7.28 | 1.67% | ||||||||||
R5 Class | $1,000 | $762.00 | $4.24 | 0.97% | ||||||||||
R6 Class | $1,000 | $762.40 | $3.58 | 0.82% | ||||||||||
G Class | $1,000 | $765.90 | $0.00 | 0.00%(2) | ||||||||||
Hypothetical | ||||||||||||||
Investor Class | $1,000 | $1,018.99 | $5.86 | 1.17% | ||||||||||
I Class | $1,000 | $1,019.98 | $4.86 | 0.97% | ||||||||||
Y Class | $1,000 | $1,020.73 | $4.11 | 0.82% | ||||||||||
A Class | $1,000 | $1,017.75 | $7.10 | 1.42% | ||||||||||
C Class | $1,000 | $1,014.03 | $10.84 | 2.17% | ||||||||||
R Class | $1,000 | $1,016.51 | $8.35 | 1.67% | ||||||||||
R5 Class | $1,000 | $1,019.98 | $4.86 | 0.97% | ||||||||||
R6 Class | $1,000 | $1,020.73 | $4.11 | 0.82% | ||||||||||
G Class | $1,000 | $1,024.80 | $0.00 | 0.00%(2) |
(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. Annualized expense ratio reflects actual expenses, including any applicable fee waivers or expense reimbursements and excluding any acquired fund fees and expenses.
(2)Other expenses, which include directors' fees and expenses, did not exceed 0.005%.
5
Schedule of Investments |
APRIL 30, 2022 (UNAUDITED)
Shares | Value | |||||||
COMMON STOCKS — 98.2% | ||||||||
Aerospace and Defense — 2.6% | ||||||||
Aerojet Rocketdyne Holdings, Inc.(1) | 486,306 | $ | 19,442,514 | |||||
CAE, Inc.(1) | 693,569 | 16,493,623 | ||||||
Mercury Systems, Inc.(1) | 225,046 | 12,555,316 | ||||||
48,491,453 | ||||||||
Auto Components — 0.6% | ||||||||
Fox Factory Holding Corp.(1) | 124,510 | 10,194,879 | ||||||
Banks — 1.8% | ||||||||
Bancorp, Inc.(1) | 444,076 | 10,076,084 | ||||||
Silvergate Capital Corp., Class A(1) | 103,154 | 12,064,892 | ||||||
Triumph Bancorp, Inc.(1) | 155,345 | 10,787,157 | ||||||
32,928,133 | ||||||||
Beverages — 0.9% | ||||||||
Duckhorn Portfolio, Inc.(1) | 42,669 | 828,632 | ||||||
MGP Ingredients, Inc. | 167,615 | 15,308,278 | ||||||
16,136,910 | ||||||||
Biotechnology — 8.7% | ||||||||
ADC Therapeutics SA(1)(2) | 377,348 | 4,441,386 | ||||||
Arcus Biosciences, Inc.(1) | 92,525 | 2,240,030 | ||||||
Arcutis Biotherapeutics, Inc.(1) | 472,674 | 9,543,288 | ||||||
Biohaven Pharmaceutical Holding Co. Ltd.(1) | 167,322 | 14,920,103 | ||||||
Blueprint Medicines Corp.(1) | 167,339 | 9,764,231 | ||||||
Bridgebio Pharma, Inc.(1) | 301,482 | 2,417,886 | ||||||
Celldex Therapeutics, Inc.(1) | 164,069 | 5,012,308 | ||||||
Centessa Pharmaceuticals PLC, ADR(1)(2) | 464,785 | 4,052,925 | ||||||
Cytokinetics, Inc.(1) | 370,322 | 14,764,738 | ||||||
Erasca, Inc.(1)(2) | 271,000 | 1,972,880 | ||||||
Fate Therapeutics, Inc.(1) | 195,237 | 5,575,969 | ||||||
Global Blood Therapeutics, Inc.(1) | 315,532 | 9,686,832 | ||||||
Halozyme Therapeutics, Inc.(1) | 443,573 | 17,698,563 | ||||||
Insmed, Inc.(1) | 530,373 | 11,652,295 | ||||||
Intellia Therapeutics, Inc.(1) | 64,273 | 3,151,305 | ||||||
Iovance Biotherapeutics, Inc.(1) | 138,333 | 2,095,745 | ||||||
KalVista Pharmaceuticals, Inc.(1) | 436,457 | 5,556,098 | ||||||
Karuna Therapeutics, Inc.(1) | 116,338 | 12,967,033 | ||||||
Kinnate Biopharma, Inc.(1)(2) | 288,156 | 2,152,525 | ||||||
Kymera Therapeutics, Inc.(1) | 190,238 | 5,963,961 | ||||||
Natera, Inc.(1) | 282,421 | 9,918,626 | ||||||
Relay Therapeutics, Inc.(1) | 182,741 | 4,354,718 | ||||||
159,903,445 | ||||||||
Building Products — 1.9% | ||||||||
Hayward Holdings, Inc.(1) | 1,029,870 | 16,374,933 | ||||||
Masonite International Corp.(1) | 158,137 | 12,258,780 | ||||||
Trex Co., Inc.(1) | 103,974 | 6,050,247 | ||||||
34,683,960 | ||||||||
Capital Markets — 0.3% | ||||||||
Open Lending Corp., Class A(1) | 402,934 | 5,496,020 |
6
Shares | Value | |||||||
Chemicals — 1.6% | ||||||||
Diversey Holdings Ltd.(1) | 1,947,104 | $ | 15,070,585 | |||||
Element Solutions, Inc. | 723,466 | 14,917,869 | ||||||
29,988,454 | ||||||||
Commercial Services and Supplies — 3.4% | ||||||||
Brink's Co. | 338,221 | 19,938,128 | ||||||
Clean Harbors, Inc.(1) | 175,188 | 18,382,477 | ||||||
Driven Brands Holdings, Inc.(1) | 884,434 | 24,666,864 | ||||||
62,987,469 | ||||||||
Construction and Engineering — 0.9% | ||||||||
Construction Partners, Inc., Class A(1) | 651,196 | 16,807,369 | ||||||
Construction Materials — 1.7% | ||||||||
Eagle Materials, Inc. | 107,370 | 13,240,869 | ||||||
Summit Materials, Inc., Class A(1) | 607,704 | 16,894,171 | ||||||
30,135,040 | ||||||||
Containers and Packaging — 2.2% | ||||||||
AptarGroup, Inc. | 97,604 | 11,207,867 | ||||||
Intertape Polymer Group, Inc.(2) | 853,938 | 26,422,789 | ||||||
Ranpak Holdings Corp.(1) | 219,155 | 3,304,857 | ||||||
40,935,513 | ||||||||
Diversified Consumer Services — 0.8% | ||||||||
European Wax Center, Inc., Class A | 515,988 | 14,163,871 | ||||||
Electrical Equipment — 0.8% | ||||||||
Sensata Technologies Holding PLC(1) | 333,428 | 15,140,966 | ||||||
Electronic Equipment, Instruments and Components — 2.0% | ||||||||
Jabil, Inc. | 247,459 | 14,285,808 | ||||||
National Instruments Corp. | 622,847 | 22,509,691 | ||||||
36,795,499 | ||||||||
Equity Real Estate Investment Trusts (REITs) — 2.1% | ||||||||
DigitalBridge Group, Inc.(1) | 2,331,465 | 16,226,997 | ||||||
Ryman Hospitality Properties, Inc.(1) | 245,336 | 22,934,009 | ||||||
39,161,006 | ||||||||
Food and Staples Retailing — 2.1% | ||||||||
BJ's Wholesale Club Holdings, Inc.(1) | 381,652 | 24,559,306 | ||||||
Grocery Outlet Holding Corp.(1) | 422,374 | 14,221,333 | ||||||
38,780,639 | ||||||||
Food Products — 0.7% | ||||||||
Sovos Brands, Inc.(1) | 835,062 | 12,609,436 | ||||||
Health Care Equipment and Supplies — 4.6% | ||||||||
Establishment Labs Holdings, Inc.(1) | 168,793 | 11,943,793 | ||||||
Inari Medical, Inc.(1) | 248,261 | 20,034,663 | ||||||
NeuroPace, Inc.(1)(2) | 478,179 | 3,844,559 | ||||||
SI-BONE, Inc.(1) | 732,588 | 14,637,108 | ||||||
Silk Road Medical, Inc.(1) | 452,156 | 15,848,068 | ||||||
Tandem Diabetes Care, Inc.(1) | 194,520 | 18,767,289 | ||||||
85,075,480 | ||||||||
Health Care Providers and Services — 6.4% | ||||||||
Covetrus, Inc.(1) | 413,192 | 5,702,050 | ||||||
Encompass Health Corp. | 191,826 | 13,203,384 | ||||||
Ensign Group, Inc. | 176,398 | 14,170,051 | ||||||
HealthEquity, Inc.(1) | 384,135 | 23,939,293 | ||||||
Invitae Corp.(1) | 596,366 | 3,166,703 |
7
Shares | Value | |||||||
Progyny, Inc.(1) | 281,569 | $ | 10,826,328 | |||||
R1 RCM, Inc.(1) | 992,302 | 22,346,641 | ||||||
RadNet, Inc.(1) | 499,630 | 9,742,785 | ||||||
Tenet Healthcare Corp.(1) | 197,454 | 14,317,390 | ||||||
117,414,625 | ||||||||
Health Care Technology — 1.6% | ||||||||
Health Catalyst, Inc.(1) | 645,356 | 10,738,724 | ||||||
OptimizeRx Corp.(1) | 390,989 | 10,990,701 | ||||||
Schrodinger, Inc.(1) | 324,194 | 8,014,075 | ||||||
29,743,500 | ||||||||
Hotels, Restaurants and Leisure — 5.4% | ||||||||
Churchill Downs, Inc. | 95,821 | 19,445,914 | ||||||
Planet Fitness, Inc., Class A(1) | 295,351 | 23,636,940 | ||||||
SeaWorld Entertainment, Inc.(1) | 345,369 | 23,291,685 | ||||||
Wingstop, Inc. | 185,067 | 16,981,748 | ||||||
Wyndham Hotels & Resorts, Inc. | 171,929 | 15,122,875 | ||||||
98,479,162 | ||||||||
Household Durables — 0.5% | ||||||||
Sonos, Inc.(1) | 418,431 | 9,548,595 | ||||||
Insurance — 2.6% | ||||||||
Goosehead Insurance, Inc., Class A | 234,126 | 13,459,904 | ||||||
Kinsale Capital Group, Inc. | 92,283 | 20,458,218 | ||||||
RLI Corp. | 120,263 | 13,803,787 | ||||||
47,721,909 | ||||||||
Interactive Media and Services — 2.1% | ||||||||
Cargurus, Inc.(1) | 556,732 | 18,194,002 | ||||||
Eventbrite, Inc., Class A(1) | 1,138,338 | 12,043,616 | ||||||
QuinStreet, Inc.(1) | 837,912 | 7,968,543 | ||||||
38,206,161 | ||||||||
IT Services — 3.6% | ||||||||
DigitalOcean Holdings, Inc.(1) | 305,705 | 12,053,948 | ||||||
MAXIMUS, Inc. | 114,300 | 8,330,184 | ||||||
Perficient, Inc.(1) | 118,936 | 11,823,428 | ||||||
Switch, Inc., Class A | 699,682 | 20,892,504 | ||||||
Thoughtworks Holding, Inc.(1) | 711,205 | 13,164,405 | ||||||
66,264,469 | ||||||||
Leisure Products — 1.7% | ||||||||
Brunswick Corp. | 201,380 | 15,226,342 | ||||||
Callaway Golf Co.(1) | 682,909 | 14,983,023 | ||||||
30,209,365 | ||||||||
Life Sciences Tools and Services — 0.4% | ||||||||
MaxCyte, Inc.(1) | 1,401,332 | 7,763,379 | ||||||
Machinery — 3.7% | ||||||||
AGCO Corp. | 97,605 | 12,434,877 | ||||||
Astec Industries, Inc. | 278,046 | 10,871,599 | ||||||
ATS Automation Tooling Systems, Inc.(1) | 517,090 | 15,090,261 | ||||||
John Bean Technologies Corp. | 149,504 | 17,625,026 | ||||||
Mueller Water Products, Inc., Class A | 946,956 | 11,391,881 | ||||||
67,413,644 | ||||||||
Multiline Retail — 0.6% | ||||||||
Ollie's Bargain Outlet Holdings, Inc.(1) | 224,100 | 10,768,005 | ||||||
Oil, Gas and Consumable Fuels — 2.7% | ||||||||
Matador Resources Co. | 619,992 | 30,268,010 |
8
Shares | Value | |||||||
Whitecap Resources, Inc. | 2,317,823 | $ | 18,998,697 | |||||
49,266,707 | ||||||||
Personal Products — 0.9% | ||||||||
Medifast, Inc. | 96,440 | 17,201,038 | ||||||
Pharmaceuticals — 1.9% | ||||||||
Arvinas, Inc.(1) | 134,110 | 7,372,027 | ||||||
Edgewise Therapeutics, Inc.(1) | 272,174 | 2,171,949 | ||||||
Harmony Biosciences Holdings, Inc.(1) | 174,635 | 7,865,560 | ||||||
Intra-Cellular Therapies, Inc.(1) | 257,891 | 13,051,863 | ||||||
Ventyx Biosciences, Inc.(1)(2) | 352,126 | 5,116,391 | ||||||
35,577,790 | ||||||||
Professional Services — 1.4% | ||||||||
ASGN, Inc.(1) | 82,869 | 9,401,488 | ||||||
First Advantage Corp.(1) | 978,825 | 16,992,402 | ||||||
26,393,890 | ||||||||
Real Estate Management and Development — 1.8% | ||||||||
Altus Group Ltd.(2) | 351,595 | 13,167,194 | ||||||
Newmark Group, Inc., Class A | 703,708 | 8,550,052 | ||||||
Tricon Residential, Inc. (Toronto)(2) | 758,811 | 10,980,653 | ||||||
32,697,899 | ||||||||
Semiconductors and Semiconductor Equipment — 4.3% | ||||||||
Ambarella, Inc.(1) | 91,642 | 7,521,975 | ||||||
Ichor Holdings Ltd.(1) | 281,516 | 8,194,931 | ||||||
MACOM Technology Solutions Holdings, Inc.(1) | 164,836 | 8,398,394 | ||||||
Onto Innovation, Inc.(1) | 253,096 | 18,005,250 | ||||||
Power Integrations, Inc. | 245,742 | 19,659,360 | ||||||
Semtech Corp.(1) | 280,634 | 16,725,786 | ||||||
78,505,696 | ||||||||
Software — 10.6% | ||||||||
Box, Inc., Class A(1) | 526,502 | 16,121,491 | ||||||
JFrog Ltd.(1) | 400,903 | 8,366,846 | ||||||
Manhattan Associates, Inc.(1) | 191,453 | 24,994,189 | ||||||
nCino, Inc.(1) | 241,568 | 9,056,384 | ||||||
New Relic, Inc.(1) | 147,271 | 9,317,836 | ||||||
Paycor HCM, Inc.(1) | 929,615 | 22,896,418 | ||||||
Paylocity Holding Corp.(1) | 120,403 | 22,832,021 | ||||||
SailPoint Technologies Holdings, Inc.(1) | 234,701 | 14,980,965 | ||||||
Sprout Social, Inc., Class A(1) | 318,798 | 19,535,941 | ||||||
SPS Commerce, Inc.(1) | 166,857 | 19,961,103 | ||||||
Tenable Holdings, Inc.(1) | 479,819 | 26,500,403 | ||||||
194,563,597 | ||||||||
Specialty Retail — 3.3% | ||||||||
Leslie's, Inc.(1) | 1,218,088 | 23,874,525 | ||||||
National Vision Holdings, Inc.(1) | 462,246 | 17,403,562 | ||||||
Petco Health & Wellness Co., Inc.(1)(2) | 963,629 | 18,559,494 | ||||||
59,837,581 | ||||||||
Technology Hardware, Storage and Peripherals — 0.4% | ||||||||
Pure Storage, Inc., Class A(1) | 249,883 | 7,321,572 | ||||||
Textiles, Apparel and Luxury Goods — 0.7% | ||||||||
Crocs, Inc.(1) | 190,144 | 12,631,266 | ||||||
Trading Companies and Distributors — 1.0% | ||||||||
H&E Equipment Services, Inc. | 505,237 | 17,925,809 |
9
Shares | Value | |||||||
Water Utilities — 0.9% | ||||||||
SJW Group | 284,210 | $ | 16,768,390 | |||||
TOTAL COMMON STOCKS (Cost $1,883,761,315) | 1,802,639,591 | |||||||
SHORT-TERM INVESTMENTS — 2.7% | ||||||||
Money Market Funds — 1.0% | ||||||||
State Street Institutional U.S. Government Money Market Fund, Premier Class | 440,939 | 440,939 | ||||||
State Street Navigator Securities Lending Government Money Market Portfolio(3) | 18,293,105 | 18,293,105 | ||||||
18,734,044 | ||||||||
Repurchase Agreements — 1.7% | ||||||||
BMO Capital Markets Corp., (collateralized by various U.S. Treasury obligations, 3.00% - 3.625%, 8/15/43 - 8/15/48, valued at $2,846,439), in a joint trading account at 0.25%, dated 4/29/22, due 5/2/22 (Delivery value $2,797,346) | 2,797,288 | |||||||
Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 1.00%, 2/15/48, valued at $28,533,541), at 0.24%, dated 4/29/22, due 5/2/22 (Delivery value $27,974,559) | 27,974,000 | |||||||
30,771,288 | ||||||||
TOTAL SHORT-TERM INVESTMENTS (Cost $49,505,332) | 49,505,332 | |||||||
TOTAL INVESTMENT SECURITIES — 100.9% (Cost $1,933,266,647) | 1,852,144,923 | |||||||
OTHER ASSETS AND LIABILITIES — (0.9)% | (16,418,936) | |||||||
TOTAL NET ASSETS — 100.0% | $ | 1,835,725,987 |
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS | ||||||||||||||||||||
Currency Purchased | Currency Sold | Counterparty | Settlement Date | Unrealized Appreciation (Depreciation) | ||||||||||||||||
CAD | 3,557,008 | USD | 2,784,154 | Goldman Sachs & Co. | 6/30/22 | $ | (15,777) | |||||||||||||
CAD | 7,813,166 | USD | 6,190,480 | Morgan Stanley | 6/30/22 | (109,585) | ||||||||||||||
USD | 93,449,523 | CAD | 117,751,632 | Credit Suisse AG | 6/30/22 | 1,804,814 | ||||||||||||||
USD | 4,782,611 | CAD | 6,035,502 | Credit Suisse AG | 6/30/22 | 85,251 | ||||||||||||||
USD | 2,088,589 | CAD | 2,637,234 | Morgan Stanley | 6/30/22 | 36,061 | ||||||||||||||
USD | 2,486,696 | CAD | 3,141,671 | Morgan Stanley | 6/30/22 | 41,570 | ||||||||||||||
$ | 1,842,334 |
NOTES TO SCHEDULE OF INVESTMENTS | ||||||||
ADR | - | American Depositary Receipt | ||||||
CAD | - | Canadian Dollar | ||||||
USD | - | United States Dollar |
(1)Non-income producing.
(2)Security, or a portion thereof, is on loan. At the period end, the aggregate value of securities on loan was $23,854,870. The amount of securities on loan indicated may not correspond with the securities on loan identified because securities with pending sales are in the process of recall from the brokers.
(3)Investment of cash collateral from securities on loan. At the period end, the aggregate value of the collateral held by the fund was $24,712,389, which includes securities collateral of $6,419,284.
See Notes to Financial Statements.
10
Statement of Assets and Liabilities |
APRIL 30, 2022 (UNAUDITED) | |||||
Assets | |||||
Investment securities, at value (cost of $1,914,973,542) — including $23,854,870 of securities on loan | $ | 1,833,851,818 | |||
Investment made with cash collateral received for securities on loan, at value (cost of $18,293,105) | 18,293,105 | ||||
Total investment securities, at value (cost of $1,933,266,647) | 1,852,144,923 | ||||
Receivable for investments sold | 800,031 | ||||
Receivable for capital shares sold | 1,836,704 | ||||
Unrealized appreciation on forward foreign currency exchange contracts | 1,967,696 | ||||
Dividends and interest receivable | 1,875,074 | ||||
Securities lending receivable | 10,366 | ||||
1,858,634,794 | |||||
Liabilities | |||||
Payable for collateral received for securities on loan | 18,293,105 | ||||
Payable for investments purchased | 827,134 | ||||
Payable for capital shares redeemed | 2,266,375 | ||||
Unrealized depreciation on forward foreign currency exchange contracts | 125,362 | ||||
Accrued management fees | 1,363,591 | ||||
Distribution and service fees payable | 33,240 | ||||
22,908,807 | |||||
Net Assets | $ | 1,835,725,987 | |||
Net Assets Consist of: | |||||
Capital (par value and paid-in surplus) | $ | 1,943,133,723 | |||
Distributable earnings | (107,407,736) | ||||
$ | 1,835,725,987 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | |||||||||
Investor Class, $0.01 Par Value | $525,871,999 | 30,724,581 | $17.12 | ||||||||
I Class, $0.01 Par Value | $391,363,385 | 21,822,787 | $17.93 | ||||||||
Y Class, $0.01 Par Value | $190,767,086 | 10,424,269 | $18.30 | ||||||||
A Class, $0.01 Par Value | $96,781,031 | 6,051,746 | $15.99* | ||||||||
C Class, $0.01 Par Value | $8,595,266 | 658,403 | $13.05 | ||||||||
R Class, $0.01 Par Value | $9,054,818 | 596,229 | $15.19 | ||||||||
R5 Class, $0.01 Par Value | $7,983,259 | 444,848 | $17.95 | ||||||||
R6 Class, $0.01 Par Value | $302,274,787 | 16,525,109 | $18.29 | ||||||||
G Class, $0.01 Par Value | $303,034,356 | 16,020,554 | $18.92 |
*Maximum offering price $16.97 (net asset value divided by 0.9425).
See Notes to Financial Statements.
11
Statement of Operations |
FOR THE SIX MONTHS ENDED APRIL 30, 2022 (UNAUDITED) | |||||
Investment Income (Loss) | |||||
Income: | |||||
Dividends (net of foreign taxes withheld of $130,795) | $ | 5,443,512 | |||
Securities lending, net | 46,040 | ||||
Interest | 19,681 | ||||
5,509,233 | |||||
Expenses: | |||||
Management fees | 10,008,288 | ||||
Distribution and service fees: | |||||
A Class | 143,178 | ||||
C Class | 47,738 | ||||
R Class | 27,463 | ||||
Directors' fees and expenses | 21,928 | ||||
Other expenses | 1,567 | ||||
10,250,162 | |||||
Fees waived - G Class | (1,401,528) | ||||
8,848,634 | |||||
Net investment income (loss) | (3,339,401) | ||||
Realized and Unrealized Gain (Loss) | |||||
Net realized gain (loss) on: | |||||
Investment transactions | (16,236,436) | ||||
Forward foreign currency exchange contract transactions | (849,502) | ||||
Foreign currency translation transactions | (6,121) | ||||
(17,092,059) | |||||
Change in net unrealized appreciation (depreciation) on: | |||||
Investments | (537,330,351) | ||||
Forward foreign currency exchange contracts | 4,034,281 | ||||
Translation of assets and liabilities in foreign currencies | 166 | ||||
(533,295,904) | |||||
Net realized and unrealized gain (loss) | (550,387,963) | ||||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | (553,727,364) |
See Notes to Financial Statements.
12
Statement of Changes in Net Assets |
SIX MONTHS ENDED APRIL 30, 2022 (UNAUDITED) AND YEAR ENDED OCTOBER 31, 2021 | ||||||||
Increase (Decrease) in Net Assets | April 30, 2022 | October 31, 2021 | ||||||
Operations | ||||||||
Net investment income (loss) | $ | (3,339,401) | $ | (10,540,833) | ||||
Net realized gain (loss) | (17,092,059) | 440,180,285 | ||||||
Change in net unrealized appreciation (depreciation) | (533,295,904) | 165,939,821 | ||||||
Net increase (decrease) in net assets resulting from operations | (553,727,364) | 595,579,273 | ||||||
Distributions to Shareholders | ||||||||
From earnings: | ||||||||
Investor Class | (122,931,535) | (62,781,510) | ||||||
I Class | (76,314,465) | (43,474,342) | ||||||
Y Class | (30,096,913) | (15,461,227) | ||||||
A Class | (23,815,635) | (12,881,120) | ||||||
C Class | (2,264,825) | (823,392) | ||||||
R Class | (2,347,192) | (1,137,082) | ||||||
R5 Class | (1,046,109) | (1,134) | ||||||
R6 Class | (56,730,478) | (14,189,017) | ||||||
G Class | (60,650,367) | (31,492,935) | ||||||
Decrease in net assets from distributions | (376,197,519) | (182,241,759) | ||||||
Capital Share Transactions | ||||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | 498,669,659 | 353,243,408 | ||||||
Net increase (decrease) in net assets | (431,255,224) | 766,580,922 | ||||||
Net Assets | ||||||||
Beginning of period | 2,266,981,211 | 1,500,400,289 | ||||||
End of period | $ | 1,835,725,987 | $ | 2,266,981,211 |
See Notes to Financial Statements.
13
Notes to Financial Statements |
APRIL 30, 2022 (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’s investment objective is to seek long-term capital growth.
The fund offers the Investor Class, I Class, Y Class, A Class, C Class, R Class, R5 Class, R6 Class and G 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.
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 (NAV) 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.
Open-end management investment companies are valued at the reported NAV 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 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.
14
The fund monitors for significant events occurring after the close of an investment’s primary exchange but before the fund’s NAV 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. 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. Securities lending income is net of fees and rebates earned by the lending agent for its services.
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.
Segregated Assets — In accordance with the 1940 Act, the fund segregates assets on its books and records to cover certain types of investment securities and other financial instruments. 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 collateral requirements.
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.
Securities Lending — Securities are lent to qualified financial institutions and brokers. State Street Bank & Trust Co. serves as securities lending agent to the fund pursuant to a Securities Lending Agreement. The lending of securities exposes the fund to risks such as: the borrowers may fail to return the loaned securities, the borrowers may not be able to provide additional collateral, the fund may experience delays in recovery of the loaned securities or delays in access to collateral, or the fund may experience losses related to the investment collateral. To minimize certain risks, loan counterparties pledge collateral in the form of cash and/or securities. The lending agent has agreed to indemnify the fund in the case of default of any securities borrowed. Cash collateral received is invested in the State Street Navigator Securities Lending Government Money Market Portfolio, a money market mutual fund registered under the 1940 Act. The loans may also be secured by U.S. government securities in an amount at least equal to the market value of the securities loaned, plus accrued interest and dividends, determined on a daily basis and adjusted accordingly. By lending securities, the fund seeks to increase its net investment income through the receipt of interest and fees. Such income is reflected separately within the Statement of Operations. The value of loaned securities and related collateral outstanding at period end, if any, are shown on a gross basis within the Schedule of Investments and Statement of Assets and Liabilities.
The following table reflects a breakdown of transactions accounted for as secured borrowings, the gross obligation by the type of collateral pledged, and the remaining contractual maturity of those transactions as of April 30, 2022.
Remaining Contractual Maturity of Agreements | |||||||||||||||||
Overnight and Continuous | <30 days | Between 30 & 90 days | >90 days | Total | |||||||||||||
Securities Lending Transactions(1) | |||||||||||||||||
Common Stocks | $ | 18,293,105 | — | — | — | $ | 18,293,105 | ||||||||||
Gross amount of recognized liabilities for securities lending transactions | $ | 18,293,105 |
(1)Amount represents the payable for cash collateral received for securities on loan. This will generally be in the Overnight and Continuous column as the securities are typically callable on demand.
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. Various funds issued by American Century Asset Allocation Portfolios, Inc. own, in aggregate, 13% of the shares of the fund.
16
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 ACIM will pay all expenses of managing and operating the fund, except brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), extraordinary expenses, and expenses incurred in connection with the provision of shareholder services and distribution services under a plan adopted pursuant to Rule 12b-1 under the 1940 Act. The fee is computed and accrued daily based on each class's daily net assets and paid monthly in arrears. The difference in the fee among the classes is a result of their separate arrangements for non-Rule 12b-1 shareholder services. It is not the result of any difference in advisory or custodial fees or other expenses related to the management of the fund's assets, which do not vary by class. 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 use very similar investment teams and strategies (strategy assets). The investment advisor agreed to waive the G Class's management fee in its entirety. The investment advisor expects this waiver to remain in effect permanently and cannot terminate it without the approval of the Board of Directors.
The management fee schedule range and the effective annual management fee for each class for the period ended April 30, 2022 are as follows:
Management Fee Schedule Range | Effective Annual Management Fee | |||||||
Investor Class | 1.100% to 1.500% | 1.17% | ||||||
I Class | 0.900% to 1.300% | 0.97% | ||||||
Y Class | 0.750% to 1.150% | 0.82% | ||||||
A Class | 1.100% to 1.500% | 1.17% | ||||||
C Class | 1.100% to 1.500% | 1.17% | ||||||
R Class | 1.100% to 1.500% | 1.17% | ||||||
R5 Class | 0.900% to 1.300% | 0.97% | ||||||
R6 Class | 0.750% to 1.150% | 0.82% | ||||||
G Class | 0.750% to 1.150% | 0.00%(1) |
(1)Effective annual management fee before waiver was 0.82%.
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 period ended April 30, 2022 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.
Interfund Transactions — The fund may enter into security transactions with other American Century Investments funds and other client accounts of the investment advisor, in accordance with the 1940 Act rules and procedures adopted by the Board of Directors. The rules and procedures require, among other things, that these transactions be effected at the independent current market price of the security. There were no interfund transactions during the period.
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the period ended April 30, 2022 were $791,912,964 and $643,936,408, respectively.
17
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended April 30, 2022 | Year ended October 31, 2021 | |||||||||||||
Shares | Amount | Shares | Amount | |||||||||||
Investor Class/Shares Authorized | 335,000,000 | 335,000,000 | ||||||||||||
Sold | 1,645,599 | $ | 36,204,388 | 5,201,148 | $ | 132,383,799 | ||||||||
Issued in reinvestment of distributions | 5,388,578 | 115,638,892 | 2,479,907 | 58,274,650 | ||||||||||
Redeemed | (2,549,673) | (51,689,850) | (5,592,502) | (141,184,376) | ||||||||||
4,484,504 | 100,153,430 | 2,088,553 | 49,474,073 | |||||||||||
I Class/Shares Authorized | 210,000,000 | 210,000,000 | ||||||||||||
Sold | 5,100,928 | 106,058,746 | 8,344,806 | 219,598,270 | ||||||||||
Issued in reinvestment of distributions | 3,285,206 | 73,818,580 | 1,708,377 | 41,616,070 | ||||||||||
Redeemed | (2,940,928) | (62,323,081) | (7,651,690) | (206,252,981) | ||||||||||
5,445,206 | 117,554,245 | 2,401,493 | 54,961,359 | |||||||||||
Y Class/Shares Authorized | 45,000,000 | 30,000,000 | ||||||||||||
Sold | 5,021,865 | 107,913,762 | 2,146,541 | 58,617,976 | ||||||||||
Issued in reinvestment of distributions | 312,106 | 7,150,342 | 125,315 | 3,097,792 | ||||||||||
Redeemed | (1,921,187) | (42,720,642) | (949,794) | (25,673,469) | ||||||||||
3,412,784 | 72,343,462 | 1,322,062 | 36,042,299 | |||||||||||
A Class/Shares Authorized | 70,000,000 | 70,000,000 | ||||||||||||
Sold | 328,926 | 6,334,901 | 893,567 | 21,725,400 | ||||||||||
Issued in reinvestment of distributions | 1,153,265 | 23,146,028 | 557,328 | 12,428,385 | ||||||||||
Redeemed | (623,897) | (11,990,984) | (933,351) | (22,599,792) | ||||||||||
858,294 | 17,489,945 | 517,544 | 11,553,993 | |||||||||||
C Class/Shares Authorized | 20,000,000 | 30,000,000 | ||||||||||||
Sold | 110,276 | 1,744,525 | 256,593 | 5,394,290 | ||||||||||
Issued in reinvestment of distributions | 137,205 | 2,254,281 | 42,909 | 822,132 | ||||||||||
Redeemed | (68,654) | (1,049,207) | (108,201) | (2,217,451) | ||||||||||
178,827 | 2,949,599 | 191,301 | 3,998,971 | |||||||||||
R Class/Shares Authorized | 30,000,000 | 30,000,000 | ||||||||||||
Sold | 85,335 | 1,533,175 | 203,005 | 4,752,618 | ||||||||||
Issued in reinvestment of distributions | 122,925 | 2,345,411 | 51,236 | 1,097,821 | ||||||||||
Redeemed | (122,925) | (2,119,031) | (161,724) | (3,809,826) | ||||||||||
85,335 | 1,759,555 | 92,517 | 2,040,613 | |||||||||||
R5 Class/Shares Authorized | 20,000,000 | 30,000,000 | ||||||||||||
Sold | 234,513 | 4,746,768 | 265,537 | 6,981,382 | ||||||||||
Issued in reinvestment of distributions | 46,535 | 1,046,109 | 47 | 1,134 | ||||||||||
Redeemed | (61,497) | (1,243,421) | (40,704) | (1,098,894) | ||||||||||
219,551 | 4,549,456 | 224,880 | 5,883,622 | |||||||||||
R6 Class/Shares Authorized | 80,000,000 | 50,000,000 | ||||||||||||
Sold | 4,611,293 | 102,121,857 | 9,462,609 | 256,807,769 | ||||||||||
Issued in reinvestment of distributions | 2,448,923 | 56,080,343 | 574,222 | 14,189,017 | ||||||||||
Redeemed | (2,231,824) | (47,915,919) | (3,069,413) | (83,050,016) | ||||||||||
4,828,392 | 110,286,281 | 6,967,418 | 187,946,770 | |||||||||||
G Class/Shares Authorized | 140,000,000 | 140,000,000 | ||||||||||||
Sold | 1,033,950 | 25,635,430 | 1,374,992 | 38,113,576 | ||||||||||
Issued in reinvestment of distributions | 2,568,842 | 60,650,367 | 1,252,702 | 31,492,935 | ||||||||||
Redeemed | (521,028) | (14,702,111) | (2,531,086) | (68,264,803) | ||||||||||
3,081,764 | 71,583,686 | 96,608 | 1,341,708 | |||||||||||
Net increase (decrease) | 22,594,657 | $ | 498,669,659 | 13,902,376 | $ | 353,243,408 |
18
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.
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 | |||||||||||
Aerospace and Defense | $ | 31,997,830 | $ | 16,493,623 | — | ||||||
Containers and Packaging | 14,512,724 | 26,422,789 | — | ||||||||
Machinery | 52,323,383 | 15,090,261 | — | ||||||||
Oil, Gas and Consumable Fuels | 30,268,010 | 18,998,697 | — | ||||||||
Real Estate Management and Development | 8,550,052 | 24,147,847 | — | ||||||||
Other Industries | 1,563,834,375 | — | — | ||||||||
Short-Term Investments | 18,734,044 | 30,771,288 | — | ||||||||
$ | 1,720,220,418 | $ | 131,924,505 | — | |||||||
Other Financial Instruments | |||||||||||
Forward Foreign Currency Exchange Contracts | — | $ | 1,967,696 | — | |||||||
Liabilities | |||||||||||
Other Financial Instruments | |||||||||||
Forward Foreign Currency Exchange Contracts | — | $ | 125,362 | — |
19
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 settlement 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 forward foreign currency exchange contract transactions and change in net unrealized appreciation (depreciation) on forward foreign currency exchange contracts, 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 $95,426,038.
The value of foreign currency risk derivative instruments as of April 30, 2022, is disclosed on the Statement of Assets and Liabilities as an asset of $1,967,696 in unrealized appreciation on forward foreign currency exchange contracts and a liability of $125,362 in unrealized depreciation on forward foreign currency exchange contracts. For the six months ended April 30, 2022, the effect of foreign currency risk derivative instruments on the Statement of Operations was $(849,502) in net realized gain (loss) on forward foreign currency exchange contract transactions and $4,034,281 in change in net unrealized appreciation (depreciation) on forward foreign currency exchange contracts.
8. Risk Factors
The value of the fund’s shares will go up and down, sometimes rapidly or unpredictably, based on the performance of the securities owned by the fund and other factors generally affecting the securities market. Market risks, including political, regulatory, economic and social developments, can affect the value of the fund’s investments. Natural disasters, public health emergencies, war, terrorism and other unforeseeable events may lead to increased market volatility and may have adverse long-term effects on world economies and markets generally.
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.
There are certain risks involved in investing in foreign securities. These risks include those resulting from political events (such as civil unrest, national elections and imposition of exchange controls), social and economic events (such as labor strikes and rising inflation), and natural disasters. Securities of foreign issuers may be less liquid and more volatile.
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 period end, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $ | 1,940,469,002 | |||
Gross tax appreciation of investments | $ | 209,857,823 | |||
Gross tax depreciation of investments | (298,181,902) | ||||
Net tax appreciation (depreciation) of investments | $ | (88,324,079) |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales.
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 | |||||||||||||||||||||||||||||||||||||||||
2022(3) | $27.32 | (0.07) | (5.52) | (5.59) | (4.61) | $17.12 | (23.91)% | 1.17%(4) | 1.17%(4) | (0.63)%(4) | (0.63)%(4) | 32% | $525,872 | ||||||||||||||||||||||||||||
2021 | $22.00 | (0.21) | 8.25 | 8.04 | (2.72) | $27.32 | 38.56% | 1.17% | 1.17% | (0.82)% | (0.82)% | 96% | $716,869 | ||||||||||||||||||||||||||||
2020 | $17.54 | (0.15) | 5.61 | 5.46 | (1.00) | $22.00 | 32.43% | 1.22% | 1.22% | (0.81)% | (0.81)% | 141% | $531,353 | ||||||||||||||||||||||||||||
2019 | $18.08 | (0.12) | 1.91 | 1.79 | (2.33) | $17.54 | 13.00% | 1.28% | 1.28% | (0.70)% | (0.70)% | 92% | $392,956 | ||||||||||||||||||||||||||||
2018 | $16.70 | (0.17) | 1.65 | 1.48 | (0.10) | $18.08 | 8.89% | 1.27% | 1.27% | (0.93)% | (0.93)% | 116% | $386,455 | ||||||||||||||||||||||||||||
2017 | $12.96 | (0.13) | 4.45 | 4.32 | (0.58) | $16.70 | 33.36% | 1.36% | 1.36% | (0.83)% | (0.83)% | 70% | $361,029 | ||||||||||||||||||||||||||||
I Class | |||||||||||||||||||||||||||||||||||||||||
2022(3) | $28.37 | (0.05) | (5.78) | (5.83) | (4.61) | $17.93 | (23.83)% | 0.97%(4) | 0.97%(4) | (0.43)%(4) | (0.43)%(4) | 32% | $391,363 | ||||||||||||||||||||||||||||
2021 | $22.71 | (0.17) | 8.55 | 8.38 | (2.72) | $28.37 | 38.81% | 0.97% | 0.97% | (0.62)% | (0.62)% | 96% | $464,632 | ||||||||||||||||||||||||||||
2020 | $18.04 | (0.11) | 5.78 | 5.67 | (1.00) | $22.71 | 32.76% | 1.02% | 1.02% | (0.61)% | (0.61)% | 141% | $317,466 | ||||||||||||||||||||||||||||
2019 | $18.50 | (0.09) | 1.96 | 1.87 | (2.33) | $18.04 | 13.16% | 1.08% | 1.08% | (0.50)% | (0.50)% | 92% | $305,249 | ||||||||||||||||||||||||||||
2018 | $17.04 | (0.14) | 1.70 | 1.56 | (0.10) | $18.50 | 9.18% | 1.07% | 1.07% | (0.73)% | (0.73)% | 116% | $371,030 | ||||||||||||||||||||||||||||
2017 | $13.20 | (0.09) | 4.51 | 4.42 | (0.58) | $17.04 | 33.51% | 1.16% | 1.16% | (0.63)% | (0.63)% | 70% | $219,881 |
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) | |||||||||||||||||||||||||||||
Y Class | |||||||||||||||||||||||||||||||||||||||||
2022(3) | $28.83 | (0.03) | (5.89) | (5.92) | (4.61) | $18.30 | (23.75)% | 0.82%(4) | 0.82%(4) | (0.28)%(4) | (0.28)%(4) | 32% | $190,767 | ||||||||||||||||||||||||||||
2021 | $23.02 | (0.13) | 8.66 | 8.53 | (2.72) | $28.83 | 39.02% | 0.82% | 0.82% | (0.47)% | (0.47)% | 96% | $202,169 | ||||||||||||||||||||||||||||
2020 | $18.24 | (0.10) | 5.88 | 5.78 | (1.00) | $23.02 | 32.96% | 0.87% | 0.87% | (0.46)% | (0.46)% | 141% | $130,958 | ||||||||||||||||||||||||||||
2019 | $18.65 | (0.06) | 1.98 | 1.92 | (2.33) | $18.24 | 13.34% | 0.93% | 0.93% | (0.35)% | (0.35)% | 92% | $6,392 | ||||||||||||||||||||||||||||
2018 | $17.16 | (0.07) | 1.66 | 1.59 | (0.10) | $18.65 | 9.29% | 0.92% | 0.92% | (0.58)% | (0.58)% | 116% | $1,778 | ||||||||||||||||||||||||||||
2017(5) | $15.34 | (0.06) | 2.46 | 2.40 | (0.58) | $17.16 | 15.67% | 1.01%(4) | 1.01%(4) | (0.61)%(4) | (0.61)%(4) | 70%(6) | $6 | ||||||||||||||||||||||||||||
A Class | |||||||||||||||||||||||||||||||||||||||||
2022(3) | $25.87 | (0.09) | (5.18) | (5.27) | (4.61) | $15.99 | (23.99)% | 1.42%(4) | 1.42%(4) | (0.88)%(4) | (0.88)%(4) | 32% | $96,781 | ||||||||||||||||||||||||||||
2021 | $21.00 | (0.26) | 7.85 | 7.59 | (2.72) | $25.87 | 38.22% | 1.42% | 1.42% | (1.07)% | (1.07)% | 96% | $134,367 | ||||||||||||||||||||||||||||
2020 | $16.82 | (0.19) | 5.37 | 5.18 | (1.00) | $21.00 | 32.14% | 1.47% | 1.47% | (1.06)% | (1.06)% | 141% | $98,200 | ||||||||||||||||||||||||||||
2019 | $17.49 | (0.16) | 1.82 | 1.66 | (2.33) | $16.82 | 12.72% | 1.53% | 1.53% | (0.95)% | (0.95)% | 92% | $80,127 | ||||||||||||||||||||||||||||
2018 | $16.19 | (0.21) | 1.61 | 1.40 | (0.10) | $17.49 | 8.61% | 1.52% | 1.52% | (1.18)% | (1.18)% | 116% | $77,764 | ||||||||||||||||||||||||||||
2017 | $12.61 | (0.16) | 4.32 | 4.16 | (0.58) | $16.19 | 33.02% | 1.61% | 1.61% | (1.08)% | (1.08)% | 70% | $80,654 |
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 | |||||||||||||||||||||||||||||||||||||||||
2022(3) | $22.08 | (0.13) | (4.29) | (4.42) | (4.61) | $13.05 | (24.31)% | 2.17%(4) | 2.17%(4) | (1.63)%(4) | (1.63)%(4) | 32% | $8,595 | ||||||||||||||||||||||||||||
2021 | $18.38 | (0.38) | 6.80 | 6.42 | (2.72) | $22.08 | 37.19% | 2.17% | 2.17% | (1.82)% | (1.82)% | 96% | $10,587 | ||||||||||||||||||||||||||||
2020 | $14.94 | (0.28) | 4.72 | 4.44 | (1.00) | $18.38 | 31.18% | 2.22% | 2.22% | (1.81)% | (1.81)% | 141% | $5,298 | ||||||||||||||||||||||||||||
2019 | $15.92 | (0.25) | 1.60 | 1.35 | (2.33) | $14.94 | 11.84% | 2.28% | 2.28% | (1.70)% | (1.70)% | 92% | $4,790 | ||||||||||||||||||||||||||||
2018 | $14.86 | (0.32) | 1.48 | 1.16 | (0.10) | $15.92 | 7.83% | 2.27% | 2.27% | (1.93)% | (1.93)% | 116% | $6,227 | ||||||||||||||||||||||||||||
2017 | $11.70 | (0.25) | 3.99 | 3.74 | (0.58) | $14.86 | 31.99% | 2.36% | 2.36% | (1.83)% | (1.83)% | 70% | $9,958 | ||||||||||||||||||||||||||||
R Class | |||||||||||||||||||||||||||||||||||||||||
2022(3) | $24.84 | (0.10) | (4.94) | (5.04) | (4.61) | $15.19 | (24.07)% | 1.67%(4) | 1.67%(4) | (1.13)%(4) | (1.13)%(4) | 32% | $9,055 | ||||||||||||||||||||||||||||
2021 | $20.30 | (0.31) | 7.57 | 7.26 | (2.72) | $24.84 | 37.88% | 1.67% | 1.67% | (1.32)% | (1.32)% | 96% | $12,690 | ||||||||||||||||||||||||||||
2020 | $16.33 | (0.23) | 5.20 | 4.97 | (1.00) | $20.30 | 31.80% | 1.72% | 1.72% | (1.31)% | (1.31)% | 141% | $8,492 | ||||||||||||||||||||||||||||
2019 | $17.09 | (0.19) | 1.76 | 1.57 | (2.33) | $16.33 | 12.39% | 1.78% | 1.78% | (1.20)% | (1.20)% | 92% | $6,099 | ||||||||||||||||||||||||||||
2018 | $15.86 | (0.25) | 1.58 | 1.33 | (0.10) | $17.09 | 8.41% | 1.77% | 1.77% | (1.43)% | (1.43)% | 116% | $5,687 | ||||||||||||||||||||||||||||
2017 | $12.40 | (0.19) | 4.23 | 4.04 | (0.58) | $15.86 | 32.61% | 1.86% | 1.86% | (1.33)% | (1.33)% | 70% | $3,761 |
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) | |||||||||||||||||||||||||||||
R5 Class | |||||||||||||||||||||||||||||||||||||||||
2022(3) | $28.39 | (0.04) | (5.79) | (5.83) | (4.61) | $17.95 | (23.80)% | 0.97%(4) | 0.97%(4) | (0.43)%(4) | (0.43)%(4) | 32% | $7,983 | ||||||||||||||||||||||||||||
2021 | $22.73 | (0.18) | 8.56 | 8.38 | (2.72) | $28.39 | 38.84% | 0.97% | 0.97% | (0.62)% | (0.62)% | 96% | $6,396 | ||||||||||||||||||||||||||||
2020 | $18.05 | (0.12) | 5.80 | 5.68 | (1.00) | $22.73 | 32.74% | 1.02% | 1.02% | (0.61)% | (0.61)% | 141% | $9 | ||||||||||||||||||||||||||||
2019 | $18.51 | (0.08) | 1.95 | 1.87 | (2.33) | $18.05 | 13.21% | 1.08% | 1.08% | (0.50)% | (0.50)% | 92% | $7 | ||||||||||||||||||||||||||||
2018 | $17.05 | (0.14) | 1.70 | 1.56 | (0.10) | $18.51 | 9.12% | 1.07% | 1.07% | (0.73)% | (0.73)% | 116% | $7 | ||||||||||||||||||||||||||||
2017(5) | $15.26 | (0.07) | 2.44 | 2.37 | (0.58) | $17.05 | 15.56% | 1.16%(4) | 1.16%(4) | (0.76)%(4) | (0.76)%(4) | 70%(6) | $6 | ||||||||||||||||||||||||||||
R6 Class | |||||||||||||||||||||||||||||||||||||||||
2022(3) | $28.82 | (0.03) | (5.89) | (5.92) | (4.61) | $18.29 | (23.76)% | 0.82%(4) | 0.82%(4) | (0.28)%(4) | (0.28)%(4) | 32% | $302,275 | ||||||||||||||||||||||||||||
2021 | $23.01 | (0.13) | 8.66 | 8.53 | (2.72) | $28.82 | 39.04% | 0.82% | 0.82% | (0.47)% | (0.47)% | 96% | $337,132 | ||||||||||||||||||||||||||||
2020 | $18.24 | (0.09) | 5.86 | 5.77 | (1.00) | $23.01 | 32.91% | 0.87% | 0.87% | (0.46)% | (0.46)% | 141% | $108,820 | ||||||||||||||||||||||||||||
2019 | $18.65 | (0.06) | 1.98 | 1.92 | (2.33) | $18.24 | 13.40% | 0.93% | 0.93% | (0.35)% | (0.35)% | 92% | $48,763 | ||||||||||||||||||||||||||||
2018 | $17.15 | (0.11) | 1.71 | 1.60 | (0.10) | $18.65 | 9.30% | 0.92% | 0.92% | (0.58)% | (0.58)% | 116% | $39,687 | ||||||||||||||||||||||||||||
2017 | $13.26 | (0.08) | 4.55 | 4.47 | (0.58) | $17.15 | 33.74% | 1.01% | 1.01% | (0.48)% | (0.48)% | 70% | $28,077 | ||||||||||||||||||||||||||||
G Class | |||||||||||||||||||||||||||||||||||||||||
2022(3) | $29.53 | 0.06 | (6.06) | (6.00) | (4.61) | $18.92 | (23.41)% | 0.00%(4)(7) | 0.82%(4) | 0.54%(4) | (0.28)%(4) | 32% | $303,034 | ||||||||||||||||||||||||||||
2021 | $23.35 | 0.10 | 8.80 | 8.90 | (2.72) | $29.53 | 40.15% | 0.00%(7) | 0.82% | 0.35% | (0.47)% | 96% | $382,140 | ||||||||||||||||||||||||||||
2020 | $18.34 | 0.08 | 5.93 | 6.01 | (1.00) | $23.35 | 34.09% | 0.01% | 0.87% | 0.40% | (0.46)% | 141% | $299,803 | ||||||||||||||||||||||||||||
2019(8) | $17.43 | 0.05 | 0.86 | 0.91 | — | $18.34 | 5.22% | 0.00%(4)(7) | 0.93%(4) | 0.52%(4) | (0.41)%(4) | 92%(9) | $8,326 |
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, 2022 (unaudited).
(4)Annualized.
(5)April 10, 2017 (commencement of sale) through October 31, 2017.
(6)Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended October 31, 2017.
(7)Ratio was less than 0.005%.
(8)April 1, 2019 (commencement of sale) through October 31, 2019.
(9)Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended October 31, 2019.
See Notes to Financial Statements.
Liquidity Risk Management Program |
The Fund has adopted a liquidity risk management program (the “program”). The Fund’s Board of Directors (the "Board") has designated American Century Investment Management, Inc. (“ACIM”) as the administrator of the program. Personnel of ACIM or its affiliates conduct the day-to-day operation of the program pursuant to policies and procedures administered by the Program Administrator, including members of ACIM’s Investment Oversight Committee who are members of the ACIM’s Investment Management and Global Analytics departments.
Under the program, ACIM manages the Fund’s liquidity risk, which is the risk that the Fund could not meet shareholder redemption requests without significant dilution of remaining shareholders’ interests in the Fund. This risk is managed by monitoring the degree of liquidity of the Fund’s investments, limiting the amount of the Fund’s illiquid investments, and utilizing various risk management tools and facilities available to the Fund for meeting shareholder redemptions, among other means. ACIM’s process of determining the degree of liquidity of certain Fund’s investments is supported by a third-party liquidity assessment vendor.
The Board reviewed a report prepared by ACIM regarding the operation and effectiveness of the program for the period January 1, 2021 through December 31, 2021. No significant liquidity events impacting the Fund were noted in the report. In addition, ACIM provided its assessment that the program had been effective in managing the Fund’s liquidity risk.
26
Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain retirement accounts 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 and change your withholding percentage for future distributions.
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.
*Some 403(b), 457 and qualified retirement plan distributions may be subject to 20% mandatory withholding, as they 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 American Century Investments’ website at americancentury.com/proxy 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 americancentury.com/proxy. 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 as an exhibit to its reports on Form N-PORT. These portfolio holdings are available on the fund's website at americancentury.com and, upon request, by calling 1-800-345-2021. The fund’s Form N-PORT reports are available on the SEC’s website at sec.gov.
27
Notes |
28
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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. | ||||||||
©2022 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-92366 2206 |
![image8.jpg](https://capedge.com/proxy/N-CSRS/0000100334-22-000050/image8.jpg)
Semiannual Report | |||||
April 30, 2022 | |||||
Sustainable Equity Fund | |||||
Investor Class (AFDIX) | |||||
I Class (AFEIX) | |||||
Y Class (AFYDX) | |||||
A Class (AFDAX) | |||||
C Class (AFDCX) | |||||
R Class (AFDRX) | |||||
R5 Class (AFDGX) | |||||
R6 Class (AFEDX) | |||||
G Class (AFEGX) |
Table of Contents |
President's Letter | |||||
Fund Characteristics | |||||
Shareholder Fee Example | |||||
Schedule of Investments | |||||
Statement of Assets and Liabilities | |||||
Statement of Operations | |||||
Statement of Changes in Net Assets | |||||
Notes to Financial Statements | |||||
Financial Highlights | |||||
Liquidity Risk Management Program | |||||
Additional Information |
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 |
![image30.jpg](https://capedge.com/proxy/N-CSRS/0000100334-22-000050/image30.jpg)
Dear Investor:
Thank you for reviewing this semiannual report for the period ended April 30, 2022. It provides a market overview (below), followed by a schedule of fund investments and other financial information. For additional investment insights, please visit americancentury.com.
Escalating Inflation, Sharp Volatility Hampered Investment Returns
Investors faced increasingly challenging market conditions as the reporting period progressed. From soaring inflation and rising interest rates to mounting geopolitical unrest and slowing growth, most asset classes struggled amid intense volatility.
Inflation was already at multiyear highs when the reporting period began. This was largely due to massive fiscal and monetary support, escalating energy prices, supply chain breakdowns and labor market shortages. Russia’s invasion of Ukraine in February sent commodity prices even higher, exacerbating existing inflationary pressures and further damaging global supply chains.
By period-end, inflation stood at a 40-year high in the U.S., a 30-year high in the U.K. and a record high in the eurozone. Most emerging markets also grappled with rising inflation. At the same time, global growth slowed dramatically.
In response to surging inflation, the Federal Reserve in March implemented its first rate hike in more than three years and ended its asset purchase program. The Bank of England executed a series of rate hikes, while European Central Bank officials announced their asset purchase program would end in the third quarter.
The combination of accelerating inflation, tighter monetary policy, geopolitical unrest and slowing economic growth fueled widespread and sharp market volatility. Global stock and bond returns plunged for the six-month period. Perceived inflation-fighting assets, including real estate investment trusts, generally fared much better than other securities.
Staying Disciplined in Uncertain Times
We expect market volatility to linger as investors navigate this complex backdrop. In addition, Russia’s invasion of Ukraine has further complicated a tense geopolitical environment. We will continue to monitor the evolving situation and its implications for our clients and investment exposure.
We appreciate your confidence in us during these extraordinary times. Our firm has a long history of helping clients weather unpredictable markets, and we’re confident we will continue to meet today’s challenges.
Sincerely,
![image27.jpg](https://capedge.com/proxy/N-CSRS/0000100334-22-000050/image27.jpg)
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
2
Fund Characteristics |
APRIL 30, 2022 | |||||
Types of Investments in Portfolio | % of net assets | ||||
Common Stocks | 98.1% | ||||
Short-Term Investments | 1.4% | ||||
Other Assets and Liabilities | 0.5% | ||||
Top Five Industries | % of net assets | ||||
Software | 9.8% | ||||
Interactive Media and Services | 5.0% | ||||
Semiconductors and Semiconductor Equipment | 4.9% | ||||
Technology Hardware, Storage and Peripherals | 4.8% | ||||
Health Care Providers and Services | 4.7% |
3
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, 2021 to April 30, 2022.
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 I Class shares of the American Century Diversified Bond Fund, in an American Century Investments account (i.e., not through a financial intermediary or employer-sponsored retirement plan account), American Century Investments may charge you a $25.00 annual 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 $25.00 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.
4
Beginning Account Value 11/1/21 | Ending Account Value 4/30/22 | Expenses Paid During Period(1) 11/1/21 - 4/30/22 | Annualized Expense Ratio(1) | |||||||||||
Actual | ||||||||||||||
Investor Class | $1,000 | $869.50 | $3.66 | 0.79% | ||||||||||
I Class | $1,000 | $870.40 | $2.74 | 0.59% | ||||||||||
Y Class | $1,000 | $871.10 | $2.04 | 0.44% | ||||||||||
A Class | $1,000 | $868.40 | $4.82 | 1.04% | ||||||||||
C Class | $1,000 | $865.20 | $8.28 | 1.79% | ||||||||||
R Class | $1,000 | $867.40 | $5.97 | 1.29% | ||||||||||
R5 Class | $1,000 | $870.30 | $2.74 | 0.59% | ||||||||||
R6 Class | $1,000 | $871.00 | $2.04 | 0.44% | ||||||||||
G Class | $1,000 | $873.00 | $0.00 | 0.00%(2) | ||||||||||
Hypothetical | ||||||||||||||
Investor Class | $1,000 | $1,020.88 | $3.96 | 0.79% | ||||||||||
I Class | $1,000 | $1,021.87 | $2.96 | 0.59% | ||||||||||
Y Class | $1,000 | $1,022.61 | $2.21 | 0.44% | ||||||||||
A Class | $1,000 | $1,019.64 | $5.21 | 1.04% | ||||||||||
C Class | $1,000 | $1,015.92 | $8.95 | 1.79% | ||||||||||
R Class | $1,000 | $1,018.40 | $6.46 | 1.29% | ||||||||||
R5 Class | $1,000 | $1,021.87 | $2.96 | 0.59% | ||||||||||
R6 Class | $1,000 | $1,022.61 | $2.21 | 0.44% | ||||||||||
G Class | $1,000 | $1,024.80 | $0.00 | 0.00%(2) |
(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. Annualized expense ratio reflects actual expenses, including any applicable fee waivers or expense reimbursements and excluding any acquired fund fees and expenses.
(2)Other expenses, which include directors' fees and expenses, did not exceed 0.005%.
5
Schedule of Investments |
APRIL 30, 2022 (UNAUDITED)
Shares | Value | |||||||
COMMON STOCKS — 98.1% | ||||||||
Aerospace and Defense — 1.1% | ||||||||
Lockheed Martin Corp. | 87,089 | $ | 37,632,899 | |||||
Air Freight and Logistics — 0.9% | ||||||||
United Parcel Service, Inc., Class B | 171,136 | 30,801,057 | ||||||
Auto Components — 0.8% | ||||||||
Aptiv PLC(1) | 240,779 | 25,618,886 | ||||||
Automobiles — 1.9% | ||||||||
Tesla, Inc.(1) | 72,281 | 62,939,404 | ||||||
Banks — 3.3% | ||||||||
Bank of America Corp. | 451,891 | 16,123,471 | ||||||
JPMorgan Chase & Co. | 409,890 | 48,924,471 | ||||||
Regions Financial Corp. | 2,026,117 | 41,981,144 | ||||||
107,029,086 | ||||||||
Beverages — 1.7% | ||||||||
PepsiCo, Inc. | 317,338 | 54,490,108 | ||||||
Biotechnology — 0.8% | ||||||||
Amgen, Inc. | 70,933 | 16,540,866 | ||||||
Vertex Pharmaceuticals, Inc.(1) | 33,050 | 9,029,921 | ||||||
25,570,787 | ||||||||
Building Products — 1.6% | ||||||||
Johnson Controls International PLC | 607,005 | 36,341,389 | ||||||
Masco Corp. | 279,689 | 14,736,814 | ||||||
51,078,203 | ||||||||
Capital Markets — 4.4% | ||||||||
Ameriprise Financial, Inc. | 78,720 | 20,899,373 | ||||||
BlackRock, Inc. | 37,550 | 23,456,734 | ||||||
Intercontinental Exchange, Inc. | 126,529 | 14,653,323 | ||||||
Morgan Stanley | 603,105 | 48,604,232 | ||||||
S&P Global, Inc. | 94,174 | 35,456,511 | ||||||
143,070,173 | ||||||||
Chemicals — 2.6% | ||||||||
Air Products and Chemicals, Inc. | 54,868 | 12,842,953 | ||||||
Ecolab, Inc. | 77,852 | 13,183,458 | ||||||
Linde PLC | 138,237 | 43,124,414 | ||||||
Sherwin-Williams Co. | 59,905 | 16,471,479 | ||||||
85,622,304 | ||||||||
Communications Equipment — 1.9% | ||||||||
Cisco Systems, Inc. | 1,296,718 | 63,513,248 | ||||||
Consumer Finance — 1.0% | ||||||||
American Express Co. | 190,042 | 33,202,238 | ||||||
Containers and Packaging — 0.6% | ||||||||
Ball Corp. | 240,444 | 19,514,435 | ||||||
Diversified Telecommunication Services — 0.9% | ||||||||
Verizon Communications, Inc. | 610,174 | 28,251,056 | ||||||
Electric Utilities — 1.8% | ||||||||
NextEra Energy, Inc. | 814,452 | 57,842,381 |
6
Shares | Value | |||||||
Electrical Equipment — 1.3% | ||||||||
Eaton Corp. PLC | 159,013 | $ | 23,060,065 | |||||
Generac Holdings, Inc.(1) | 11,517 | 2,526,600 | ||||||
Rockwell Automation, Inc. | 71,200 | 17,990,104 | ||||||
43,576,769 | ||||||||
Electronic Equipment, Instruments and Components — 2.0% | ||||||||
CDW Corp. | 154,729 | 25,248,678 | ||||||
Cognex Corp. | 197,001 | 13,323,178 | ||||||
Keysight Technologies, Inc.(1) | 183,719 | 25,770,264 | ||||||
64,342,120 | ||||||||
Energy Equipment and Services — 1.4% | ||||||||
Schlumberger NV | 1,176,988 | 45,914,302 | ||||||
Entertainment — 1.4% | ||||||||
Electronic Arts, Inc. | 105,832 | 12,493,468 | ||||||
Walt Disney Co.(1) | 293,893 | 32,807,275 | ||||||
45,300,743 | ||||||||
Equity Real Estate Investment Trusts (REITs) — 2.7% | ||||||||
Prologis, Inc. | 543,189 | 87,067,765 | ||||||
Food and Staples Retailing — 1.9% | ||||||||
Costco Wholesale Corp. | 42,297 | 22,490,161 | ||||||
Sysco Corp. | 463,232 | 39,597,071 | ||||||
62,087,232 | ||||||||
Food Products — 0.8% | ||||||||
Mondelez International, Inc., Class A | 405,117 | 26,121,944 | ||||||
Vital Farms, Inc.(1) | 122,802 | 1,412,223 | ||||||
27,534,167 | ||||||||
Health Care Equipment and Supplies — 1.9% | ||||||||
Edwards Lifesciences Corp.(1) | 310,185 | 32,811,369 | ||||||
Medtronic PLC | 230,321 | 24,036,300 | ||||||
ResMed, Inc. | 30,261 | 6,051,292 | ||||||
62,898,961 | ||||||||
Health Care Providers and Services — 4.7% | ||||||||
Cigna Corp. | 175,783 | 43,379,728 | ||||||
CVS Health Corp. | 378,876 | 36,421,350 | ||||||
Humana, Inc. | 34,923 | 15,525,369 | ||||||
UnitedHealth Group, Inc. | 113,738 | 57,841,460 | ||||||
153,167,907 | ||||||||
Hotels, Restaurants and Leisure — 1.9% | ||||||||
Booking Holdings, Inc.(1) | 11,293 | 24,961,031 | ||||||
Chipotle Mexican Grill, Inc.(1) | 4,863 | 7,078,631 | ||||||
Expedia Group, Inc.(1) | 168,976 | 29,528,556 | ||||||
61,568,218 | ||||||||
Household Products — 1.7% | ||||||||
Colgate-Palmolive Co. | 188,089 | 14,492,257 | ||||||
Procter & Gamble Co. | 262,023 | 42,067,793 | ||||||
56,560,050 | ||||||||
Industrial Conglomerates — 1.2% | ||||||||
Honeywell International, Inc. | 199,784 | 38,660,202 | ||||||
Insurance — 1.9% | ||||||||
Marsh & McLennan Cos., Inc. | 134,086 | 21,681,706 | ||||||
Prudential Financial, Inc. | 156,724 | 17,006,121 | ||||||
Travelers Cos., Inc. | 130,716 | 22,360,279 | ||||||
61,048,106 |
7
Shares | Value | |||||||
Interactive Media and Services — 5.0% | ||||||||
Alphabet, Inc., Class A(1) | 71,192 | $ | 162,473,670 | |||||
Internet and Direct Marketing Retail — 3.1% | ||||||||
Amazon.com, Inc.(1) | 40,605 | 100,929,006 | ||||||
IT Services — 4.2% | ||||||||
Accenture PLC, Class A | 127,937 | 38,427,157 | ||||||
Mastercard, Inc., Class A | 128,820 | 46,810,612 | ||||||
PayPal Holdings, Inc.(1) | 59,570 | 5,237,990 | ||||||
Visa, Inc., Class A | 229,080 | 48,823,820 | ||||||
139,299,579 | ||||||||
Life Sciences Tools and Services — 1.9% | ||||||||
Agilent Technologies, Inc. | 244,241 | 29,130,624 | ||||||
Thermo Fisher Scientific, Inc. | 63,065 | 34,869,900 | ||||||
64,000,524 | ||||||||
Machinery — 2.3% | ||||||||
Cummins, Inc. | 116,666 | 22,072,041 | ||||||
Deere & Co. | 34,660 | 13,085,883 | ||||||
Parker-Hannifin Corp. | 105,803 | 28,653,568 | ||||||
Xylem, Inc. | 152,799 | 12,300,319 | ||||||
76,111,811 | ||||||||
Media — 0.4% | ||||||||
Comcast Corp., Class A | 373,039 | 14,832,031 | ||||||
Multiline Retail — 0.6% | ||||||||
Target Corp. | 80,462 | 18,397,636 | ||||||
Oil, Gas and Consumable Fuels — 1.8% | ||||||||
ConocoPhillips | 632,534 | 60,419,648 | ||||||
Personal Products — 0.4% | ||||||||
Estee Lauder Cos., Inc., Class A | 52,149 | 13,770,465 | ||||||
Pharmaceuticals — 3.8% | ||||||||
Bristol-Myers Squibb Co. | 565,315 | 42,551,260 | ||||||
Merck & Co., Inc. | 357,082 | 31,669,603 | ||||||
Novo Nordisk A/S, B Shares | 183,630 | 20,975,363 | ||||||
Zoetis, Inc. | 163,189 | 28,925,250 | ||||||
124,121,476 | ||||||||
Road and Rail — 1.2% | ||||||||
Norfolk Southern Corp. | 80,273 | 20,700,801 | ||||||
Union Pacific Corp. | 74,963 | 17,563,082 | ||||||
38,263,883 | ||||||||
Semiconductors and Semiconductor Equipment — 4.9% | ||||||||
Advanced Micro Devices, Inc.(1) | 187,412 | 16,027,474 | ||||||
Analog Devices, Inc. | 221,318 | 34,167,073 | ||||||
Applied Materials, Inc. | 243,863 | 26,910,282 | ||||||
ASML Holding NV(2) | 46,291 | 26,271,924 | ||||||
NVIDIA Corp. | 314,606 | 58,349,975 | ||||||
161,726,728 | ||||||||
Software — 9.8% | ||||||||
Adobe, Inc.(1) | 56,574 | 22,400,475 | ||||||
Microsoft Corp. | 957,330 | 265,678,222 | ||||||
Salesforce, Inc.(1) | 96,959 | 17,058,966 | ||||||
ServiceNow, Inc.(1) | 18,827 | 9,001,189 | ||||||
Workday, Inc., Class A(1) | 38,229 | 7,901,934 | ||||||
322,040,786 |
8
Shares/ Principal Amount | Value | |||||||
Specialty Retail — 2.7% | ||||||||
Home Depot, Inc. | 183,876 | $ | 55,236,350 | |||||
TJX Cos., Inc. | 370,650 | 22,713,432 | ||||||
Tractor Supply Co. | 52,964 | 10,669,598 | ||||||
88,619,380 | ||||||||
Technology Hardware, Storage and Peripherals — 4.8% | ||||||||
Apple, Inc. | 994,450 | 156,775,042 | ||||||
Textiles, Apparel and Luxury Goods — 1.1% | ||||||||
Deckers Outdoor Corp.(1) | 32,948 | 8,755,931 | ||||||
NIKE, Inc., Class B | 233,210 | 29,081,287 | ||||||
37,837,218 | ||||||||
TOTAL COMMON STOCKS (Cost $2,334,907,942) | 3,215,521,690 | |||||||
SHORT-TERM INVESTMENTS — 1.4% | ||||||||
Discount Notes — 0.2% | ||||||||
Federal Farm Credit Discount Notes, 0.23%, 5/2/22(3) | $ | 6,800,000 | 6,800,000 | |||||
Money Market Funds† | ||||||||
State Street Institutional U.S. Government Money Market Fund, Premier Class (Cost $618,842) | 618,842 | 618,842 | ||||||
Repurchase Agreements — 1.2% | ||||||||
BMO Capital Markets Corp., (collateralized by various U.S. Treasury obligations, 3.00% - 3.625%, 8/15/43 - 8/15/48, valued at $3,486,408), in a joint trading account at 0.25%, dated 4/29/22, due 5/2/22 (Delivery value $3,426,277) | 3,426,206 | |||||||
Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 3.375%, 11/15/48, valued at $34,949,367), at 0.24%, dated 4/29/22, due 5/2/22 (Delivery value $34,264,685) | 34,264,000 | |||||||
37,690,206 | ||||||||
TOTAL SHORT-TERM INVESTMENTS (Cost $45,109,004) | 45,109,048 | |||||||
TOTAL INVESTMENT SECURITIES — 99.5% (Cost $2,380,016,946) | 3,260,630,738 | |||||||
OTHER ASSETS AND LIABILITIES — 0.5% | 16,459,733 | |||||||
TOTAL NET ASSETS — 100.0% | $ | 3,277,090,471 |
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS | ||||||||||||||||||||
Currency Purchased | Currency Sold | Counterparty | Settlement Date | Unrealized Appreciation (Depreciation) | ||||||||||||||||
EUR | 904,989 | USD | 1,002,981 | JPMorgan Chase Bank N.A. | 6/30/22 | $ | (45,591) | |||||||||||||
EUR | 1,503,069 | USD | 1,641,604 | JPMorgan Chase Bank N.A. | 6/30/22 | (51,503) | ||||||||||||||
EUR | 767,273 | USD | 833,685 | JPMorgan Chase Bank N.A. | 6/30/22 | (21,985) | ||||||||||||||
EUR | 794,816 | USD | 853,975 | JPMorgan Chase Bank N.A. | 6/30/22 | (13,136) | ||||||||||||||
EUR | 924,663 | USD | 988,076 | JPMorgan Chase Bank N.A. | 6/30/22 | (9,873) | ||||||||||||||
EUR | 720,057 | USD | 762,705 | JPMorgan Chase Bank N.A. | 6/30/22 | (955) | ||||||||||||||
USD | 589,066 | EUR | 542,993 | JPMorgan Chase Bank N.A. | 6/30/22 | 14,632 | ||||||||||||||
USD | 1,083,428 | EUR | 995,488 | JPMorgan Chase Bank N.A. | 6/30/22 | 30,299 | ||||||||||||||
USD | 804,825 | EUR | 759,404 | JPMorgan Chase Bank N.A. | 6/30/22 | 1,449 | ||||||||||||||
USD | 26,651,408 | EUR | 24,108,121 | JPMorgan Chase Bank N.A. | 6/30/22 | 1,147,355 | ||||||||||||||
USD | 893,739 | EUR | 798,751 | JPMorgan Chase Bank N.A. | 6/30/22 | 48,738 | ||||||||||||||
$ | 1,099,430 |
9
FUTURES CONTRACTS PURCHASED | ||||||||||||||
Reference Entity | Contracts | Expiration Date | Notional Amount | Unrealized Appreciation (Depreciation)^ | ||||||||||
S&P 500 E-Mini | 246 | June 2022 | $ | 50,768,250 | $ | (1,461,013) |
^Amount represents value and unrealized appreciation (depreciation).
NOTES TO SCHEDULE OF INVESTMENTS | ||||||||
EUR | - | Euro | ||||||
USD | - | United States Dollar |
†Category is less than 0.05% of total net assets.
(1)Non-income producing.
(2)Security, or a portion thereof, is on loan. At the period end, the aggregate value of securities on loan was $25,746,383. The amount of securities on loan indicated may not correspond with the securities on loan identified because securities with pending sales are in the process of recall from the brokers. At the period end, the aggregate market value of the collateral held by the fund was $27,524,556, all of which was securities collateral.
(3)The rate indicated is the yield to maturity at purchase.
See Notes to Financial Statements.
10
Statement of Assets and Liabilities |
APRIL 30, 2022 (UNAUDITED) | |||||
Assets | |||||
Investment securities, at value (cost of $2,380,016,946) — including $25,746,383 of securities on loan | $ | 3,260,630,738 | |||
Deposits with broker for futures contracts | 2,755,200 | ||||
Receivable for investments sold | 13,194,978 | ||||
Receivable for capital shares sold | 1,160,285 | ||||
Unrealized appreciation on forward foreign currency exchange contracts | 1,242,473 | ||||
Dividends and interest receivable | 2,427,271 | ||||
Securities lending receivable | 2,836 | ||||
3,281,413,781 | |||||
Liabilities | |||||
Payable for capital shares redeemed | 1,187,795 | ||||
Payable for variation margin on futures contracts | 2,116,448 | ||||
Unrealized depreciation on forward foreign currency exchange contracts | 143,043 | ||||
Accrued management fees | 838,745 | ||||
Distribution and service fees payable | 37,279 | ||||
4,323,310 | |||||
Net Assets | $ | 3,277,090,471 | |||
Net Assets Consist of: | |||||
Capital (par value and paid-in surplus) | $ | 2,407,519,785 | |||
Distributable earnings | 869,570,686 | ||||
$ | 3,277,090,471 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | |||||||||
Investor Class, $0.01 Par Value | $692,552,489 | 16,973,196 | $40.80 | ||||||||
I Class, $0.01 Par Value | $465,100,630 | 11,369,679 | $40.91 | ||||||||
Y Class, $0.01 Par Value | $18,170,409 | 443,673 | $40.95 | ||||||||
A Class, $0.01 Par Value | $90,589,365 | 2,231,213 | $40.60* | ||||||||
C Class, $0.01 Par Value | $12,127,506 | 311,234 | $38.97 | ||||||||
R Class, $0.01 Par Value | $15,383,154 | 382,393 | $40.23 | ||||||||
R5 Class, $0.01 Par Value | $6,003,880 | 146,678 | $40.93 | ||||||||
R6 Class, $0.01 Par Value | $67,811,879 | 1,654,111 | $41.00 | ||||||||
G Class, $0.01 Par Value | $1,909,351,159 | 46,504,112 | $41.06 |
*Maximum offering price $43.08 (net asset value divided by 0.9425).
See Notes to Financial Statements.
11
Statement of Operations |
FOR THE SIX MONTHS ENDED APRIL 30, 2022 (UNAUDITED) | |||||
Investment Income (Loss) | |||||
Income: | |||||
Dividends (net of foreign taxes withheld of $42,916) | $ | 21,739,007 | |||
Interest | 16,703 | ||||
Securities lending, net | 2,836 | ||||
21,758,546 | |||||
Expenses: | |||||
Management fees | 9,935,829 | ||||
Distribution and service fees: | |||||
A Class | 121,952 | ||||
C Class | 68,073 | ||||
R Class | 43,644 | ||||
Directors' fees and expenses | 38,947 | ||||
Other expenses | 10,023 | ||||
10,218,468 | |||||
Fees waived - G Class | (4,739,538) | ||||
5,478,930 | |||||
Net investment income (loss) | 16,279,616 | ||||
Realized and Unrealized Gain (Loss) | |||||
Net realized gain (loss) on: | |||||
Investment transactions | 43,181,019 | ||||
Forward foreign currency exchange contract transactions | 2,085,212 | ||||
Futures contract transactions | 266,520 | ||||
Foreign currency translation transactions | 93 | ||||
45,532,844 | |||||
Change in net unrealized appreciation (depreciation) on: | |||||
Investments | (538,131,887) | ||||
Forward foreign currency exchange contracts | 592,953 | ||||
Futures contracts | (5,163,979) | ||||
Translation of assets and liabilities in foreign currencies | (7,501) | ||||
(542,710,414) | |||||
Net realized and unrealized gain (loss) | (497,177,570) | ||||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | (480,897,954) |
See Notes to Financial Statements.
12
Statement of Changes in Net Assets |
SIX MONTHS ENDED APRIL 30, 2022 (UNAUDITED) AND YEAR ENDED OCTOBER 31, 2021 | ||||||||
Increase (Decrease) in Net Assets | April 30, 2022 | October 31, 2021 | ||||||
Operations | ||||||||
Net investment income (loss) | $ | 16,279,616 | $ | 33,074,174 | ||||
Net realized gain (loss) | 45,532,844 | 121,812,224 | ||||||
Change in net unrealized appreciation (depreciation) | (542,710,414) | 1,051,723,231 | ||||||
Net increase (decrease) in net assets resulting from operations | (480,897,954) | 1,206,609,629 | ||||||
Distributions to Shareholders | ||||||||
From earnings: | ||||||||
Investor Class | (18,997,998) | (2,859,800) | ||||||
I Class | (12,504,157) | (1,771,656) | ||||||
Y Class | (523,036) | (77,746) | ||||||
A Class | (2,155,985) | (103,188) | ||||||
C Class | (301,327) | — | ||||||
R Class | (345,587) | — | ||||||
R5 Class | (152,501) | (21,739) | ||||||
R6 Class | (1,671,016) | (59,111) | ||||||
G Class | (71,512,712) | (23,737,820) | ||||||
Decrease in net assets from distributions | (108,164,319) | (28,631,060) | ||||||
Capital Share Transactions | ||||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | (444,007) | (43,906,130) | ||||||
Net increase (decrease) in net assets | (589,506,280) | 1,134,072,439 | ||||||
Net Assets | ||||||||
Beginning of period | 3,866,596,751 | 2,732,524,312 | ||||||
End of period | $ | 3,277,090,471 | $ | 3,866,596,751 |
See Notes to Financial Statements.
13
Notes to Financial Statements |
APRIL 30, 2022 (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. Sustainable Equity Fund (the fund) is one fund in a series issued by the corporation. The fund’s investment objective is to seek long-term capital growth. Income is a secondary objective.
The fund offers the Investor Class, I Class, Y Class, A Class, C Class, R Class, R5 Class, R6 Class and G 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.
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 (NAV) 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 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. U.S. Treasury and Government Agency securities are valued using market models that consider trade data, quotations from dealers and active market makers, relevant yield curve and spread data, 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 NAV 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 exchange. 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 NAV 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. 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. Securities lending income is net of fees and rebates earned by the lending agent for its services.
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.
Segregated Assets — In accordance with the 1940 Act, the fund segregates assets on its books and records to cover certain types of investment securities and other financial instruments. 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 collateral requirements.
15
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.
Securities Lending — Securities are lent to qualified financial institutions and brokers. State Street Bank & Trust Co. serves as securities lending agent to the fund pursuant to a Securities Lending Agreement. The lending of securities exposes the fund to risks such as: the borrowers may fail to return the loaned securities, the borrowers may not be able to provide additional collateral, the fund may experience delays in recovery of the loaned securities or delays in access to collateral, or the fund may experience losses related to the investment collateral. To minimize certain risks, loan counterparties pledge collateral in the form of cash and/or securities. The lending agent has agreed to indemnify the fund in the case of default of any securities borrowed. Cash collateral received is invested in the State Street Navigator Securities Lending Government Money Market Portfolio, a money market mutual fund registered under the 1940 Act. The loans may also be secured by U.S. government securities in an amount at least equal to the market value of the securities loaned, plus accrued interest and dividends, determined on a daily basis and adjusted accordingly. By lending securities, the fund seeks to increase its net investment income through the receipt of interest and fees. Such income is reflected separately within the Statement of Operations. The value of loaned securities and related collateral outstanding at period end, if any, are shown on a gross basis within the Schedule of Investments and Statement of Assets and Liabilities.
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. Various funds issued by American Century Asset Allocation Portfolios, Inc. own, in aggregate, 42% of the shares of the fund. Related parties do not invest in the fund for the purpose of exercising management or control.
16
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 ACIM will pay all expenses of managing and operating the fund, except brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), extraordinary expenses, and expenses incurred in connection with the provision of shareholder services and distribution services under a plan adopted pursuant to Rule 12b-1 under the 1940 Act. The fee is computed and accrued daily based on each class's daily net assets and paid monthly in arrears. The difference in the fee among the classes is a result of their separate arrangements for non-Rule 12b-1 shareholder services. It is not the result of any difference in advisory or custodial fees or other expenses related to the management of the fund's assets, which do not vary by class. 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 use very similar investment teams and strategies (strategy assets). The investment advisor agreed to waive the G Class's management fee in its entirety. The investment advisor expects this waiver to remain in effect permanently and cannot terminate it without the approval of the Board of Directors.
The management fee schedule range and the effective annual management fee for each class for the period ended April 30, 2022 are as follows:
Management Fee Schedule Range | Effective Annual Management Fee | |||||||
Investor Class | 0.750% to 0.790% | 0.79% | ||||||
I Class | 0.550% to 0.590% | 0.59% | ||||||
Y Class | 0.400% to 0.440% | 0.44% | ||||||
A Class | 0.750% to 0.790% | 0.79% | ||||||
C Class | 0.750% to 0.790% | 0.79% | ||||||
R Class | 0.750% to 0.790% | 0.79% | ||||||
R5 Class | 0.550% to 0.590% | 0.59% | ||||||
R6 Class | 0.400% to 0.440% | 0.44% | ||||||
G Class | 0.400% to 0.440% | 0.00%(1) |
(1)Effective annual management fee before waiver was 0.44%.
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 period ended April 30, 2022 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.
Interfund Transactions — The fund may enter into security transactions with other American Century Investments funds and other client accounts of the investment advisor, in accordance with the 1940 Act rules and procedures adopted by the Board of Directors. The rules and procedures require, among other things, that these transactions be effected at the independent current market price of the security. There were no interfund transactions during the period.
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the period ended April 30, 2022 were $217,887,155 and $250,866,928, respectively.
17
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended April 30, 2022 | Year ended October 31, 2021 | |||||||||||||
Shares | Amount | Shares | Amount | |||||||||||
Investor Class/Shares Authorized | 230,000,000 | 230,000,000 | ||||||||||||
Sold | 1,508,456 | $ | 69,392,814 | 2,943,466 | $ | 119,867,395 | ||||||||
Issued in reinvestment of distributions | 392,775 | 18,727,551 | 74,177 | 2,795,217 | ||||||||||
Redeemed | (2,310,707) | (106,647,271) | (3,342,394) | (138,556,743) | ||||||||||
(409,476) | (18,526,906) | (324,751) | (15,894,131) | |||||||||||
I Class/Shares Authorized | 60,000,000 | 50,000,000 | ||||||||||||
Sold | 2,771,925 | 126,905,636 | 4,571,811 | 189,617,073 | ||||||||||
Issued in reinvestment of distributions | 246,421 | 11,771,507 | 43,915 | 1,657,803 | ||||||||||
Redeemed | (1,390,470) | (62,455,441) | (2,155,752) | (91,287,995) | ||||||||||
1,627,876 | 76,221,702 | 2,459,974 | 99,986,881 | |||||||||||
Y Class/Shares Authorized | 30,000,000 | 30,000,000 | ||||||||||||
Sold | 80,554 | 3,652,911 | 202,749 | 8,486,726 | ||||||||||
Issued in reinvestment of distributions | 10,875 | 519,740 | 2,039 | 77,027 | ||||||||||
Redeemed | (39,709) | (1,801,378) | (52,839) | (2,276,009) | ||||||||||
51,720 | 2,371,273 | 151,949 | 6,287,744 | |||||||||||
A Class/Shares Authorized | 50,000,000 | 50,000,000 | ||||||||||||
Sold | 306,690 | 14,039,656 | 656,928 | 26,696,842 | ||||||||||
Issued in reinvestment of distributions | 39,834 | 1,891,744 | 2,368 | 88,920 | ||||||||||
Redeemed | (146,502) | (6,594,483) | (262,551) | (10,817,846) | ||||||||||
200,022 | 9,336,917 | 396,745 | 15,967,916 | |||||||||||
C Class/Shares Authorized | 20,000,000 | 30,000,000 | ||||||||||||
Sold | 29,659 | 1,301,761 | 111,500 | 4,558,582 | ||||||||||
Issued in reinvestment of distributions | 5,567 | 254,494 | — | — | ||||||||||
Redeemed | (37,719) | (1,639,503) | (112,229) | (4,368,283) | ||||||||||
(2,493) | (83,248) | (729) | 190,299 | |||||||||||
R Class/Shares Authorized | 25,000,000 | 30,000,000 | ||||||||||||
Sold | 97,397 | 4,426,486 | 208,379 | 8,474,299 | ||||||||||
Issued in reinvestment of distributions | 7,335 | 345,587 | — | — | ||||||||||
Redeemed | (103,580) | (4,689,214) | (99,077) | (3,852,366) | ||||||||||
1,152 | 82,859 | 109,302 | 4,621,933 | |||||||||||
R5 Class/Shares Authorized | 20,000,000 | 30,000,000 | ||||||||||||
Sold | 44,039 | 1,981,917 | 48,027 | 1,988,519 | ||||||||||
Issued in reinvestment of distributions | 2,292 | 109,528 | 344 | 12,998 | ||||||||||
Redeemed | (20,240) | (862,875) | (22,394) | (924,057) | ||||||||||
26,091 | 1,228,570 | 25,977 | 1,077,460 | |||||||||||
R6 Class/Shares Authorized | 30,000,000 | 50,000,000 | ||||||||||||
Sold | 821,615 | 37,789,484 | 1,386,839 | 58,488,762 | ||||||||||
Issued in reinvestment of distributions | 34,929 | 1,671,016 | 1,563 | 59,111 | ||||||||||
Redeemed | (167,597) | (7,501,217) | (575,395) | (23,155,920) | ||||||||||
688,947 | 31,959,283 | 813,007 | 35,391,953 | |||||||||||
G Class/Shares Authorized | 525,000,000 | 525,000,000 | ||||||||||||
Sold | 1,072,486 | 48,273,217 | 3,978,313 | 167,298,284 | ||||||||||
Issued in reinvestment of distributions | 1,495,144 | 71,512,712 | 627,985 | 23,737,820 | ||||||||||
Redeemed | (4,689,665) | (222,820,386) | (9,001,254) | (382,572,289) | ||||||||||
(2,122,035) | (103,034,457) | (4,394,956) | (191,536,185) | |||||||||||
Net increase (decrease) | 61,804 | $ | (444,007) | (763,482) | $ | (43,906,130) |
18
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.
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 | $ | 3,168,274,403 | $ | 47,247,287 | — | ||||||
Short-Term Investments | 618,842 | 44,490,206 | — | ||||||||
$ | 3,168,893,245 | $ | 91,737,493 | — | |||||||
Other Financial Instruments | |||||||||||
Forward Foreign Currency Exchange Contracts | — | $ | 1,242,473 | — | |||||||
Liabilities | |||||||||||
Other Financial Instruments | |||||||||||
Futures Contracts | $ | 1,461,013 | — | — | |||||||
Forward Foreign Currency Exchange Contracts | — | $ | 143,043 | — | |||||||
$ | 1,461,013 | $ | 143,043 | — |
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. The fund's average notional exposure to equity price risk derivative instruments held during the period was $44,295,733 futures contracts purchased.
19
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 settlement 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 forward foreign currency exchange contract transactions and change in net unrealized appreciation (depreciation) on forward foreign currency exchange contracts, 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 $40,912,933.
Value of Derivative Instruments as of April 30, 2022
Asset Derivatives | Liability Derivatives | |||||||||||||
Type of Risk Exposure | Location on Statement of Assets and Liabilities | Value | Location on Statement of Assets and Liabilities | Value | ||||||||||
Equity Price Risk | Receivable for variation margin on futures contracts* | — | Payable for variation margin on futures contracts* | $ | 2,116,448 | |||||||||
Foreign Currency Risk | Unrealized appreciation on forward foreign currency exchange contracts | $ | 1,242,473 | Unrealized depreciation on forward foreign currency exchange contracts | 143,043 | |||||||||
$ | 1,242,473 | $ | 2,259,491 |
*Included in the unrealized appreciation (depreciation) on futures contracts, as reported in the Schedule of Investments.
Effect of Derivative Instruments on the Statement of Operations for the Six Months Ended April 30, 2022
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 | $ | 266,520 | Change in net unrealized appreciation (depreciation) on futures contracts | $ | (5,163,979) | ||||||||
Foreign Currency Risk | Net realized gain (loss) on forward foreign currency exchange contract transactions | 2,085,212 | Change in net unrealized appreciation (depreciation) on forward foreign currency exchange contracts | 592,953 | ||||||||||
$ | 2,351,732 | $ | (4,571,026) |
8. Risk Factors
The value of the fund’s shares will go up and down, sometimes rapidly or unpredictably, based on the performance of the securities owned by the fund and other factors generally affecting the securities market. Market risks, including political, regulatory, economic and social developments, can affect the value of the fund’s investments. Natural disasters, public health emergencies, war, terrorism and other unforeseeable events may lead to increased market volatility and may have adverse long-term effects on world economies and markets generally.
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.
20
As of period end, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $ | 2,402,116,134 | |||
Gross tax appreciation of investments | $ | 905,998,441 | |||
Gross tax depreciation of investments | (47,483,837) | ||||
Net tax appreciation (depreciation) of investments | $ | 858,514,604 |
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, 2021, the fund had accumulated short-term capital losses of $(39,652,079), which represent net capital loss carryovers that may be used to offset future realized capital gains for federal income tax purposes. The capital loss carryovers may be carried forward for an unlimited period. As a result of a shift in ownership of the fund, the utilization of these capital losses in any given year are limited. Any remaining accumulated gains after application of this limitation will be distributed to shareholders.
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: | 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 | |||||||||||||||||||||||||||||||||||||||||||||||
2022(3) | $48.06 | 0.09 | (6.20) | (6.11) | (0.19) | (0.96) | (1.15) | $40.80 | (13.05)% | 0.79%(4) | 0.79%(4) | 0.41%(4) | 0.41%(4) | 6% | $692,552 | ||||||||||||||||||||||||||||||||
2021 | $33.63 | 0.19 | 14.40 | 14.59 | (0.16) | — | (0.16) | $48.06 | 43.50% | 0.79% | 0.79% | 0.46% | 0.46% | 18% | $835,453 | ||||||||||||||||||||||||||||||||
2020 | $30.40 | 0.28 | 3.15 | 3.43 | — | (0.20) | (0.20) | $33.63 | 11.33% | 0.79% | 0.83% | 0.88% | 0.84% | 36% | $595,557 | ||||||||||||||||||||||||||||||||
2019 | $28.19 | 0.33 | 3.77 | 4.10 | (0.22) | (1.67) | (1.89) | $30.40 | 16.10% | 0.80% | 0.84% | 1.14% | 1.10% | 33% | $118,225 | ||||||||||||||||||||||||||||||||
2018 | $27.22 | 0.26 | 1.52 | 1.78 | (0.20) | (0.61) | (0.81) | $28.19 | 6.60% | 0.95% | 0.95% | 0.91% | 0.91% | 41% | $142,923 | ||||||||||||||||||||||||||||||||
2017 | $21.75 | 0.23 | 5.51 | 5.74 | (0.27) | — | (0.27) | $27.22 | 26.61% | 1.00% | 1.00% | 0.95% | 0.95% | 18% | $135,315 | ||||||||||||||||||||||||||||||||
I Class | |||||||||||||||||||||||||||||||||||||||||||||||
2022(3) | $48.23 | 0.14 | (6.21) | (6.07) | (0.29) | (0.96) | (1.25) | $40.91 | (12.96)% | 0.59%(4) | 0.59%(4) | 0.61%(4) | 0.61%(4) | 6% | $465,101 | ||||||||||||||||||||||||||||||||
2021 | $33.75 | 0.27 | 14.44 | 14.71 | (0.23) | — | (0.23) | $48.23 | 43.78% | 0.59% | 0.59% | 0.66% | 0.66% | 18% | $469,840 | ||||||||||||||||||||||||||||||||
2020 | $30.50 | 0.35 | 3.16 | 3.51 | (0.06) | (0.20) | (0.26) | $33.75 | 11.55% | 0.59% | 0.63% | 1.08% | 1.04% | 36% | $245,759 | ||||||||||||||||||||||||||||||||
2019 | $28.27 | 0.37 | 3.81 | 4.18 | (0.28) | (1.67) | (1.95) | $30.50 | 16.37% | 0.60% | 0.64% | 1.34% | 1.30% | 33% | $106,268 | ||||||||||||||||||||||||||||||||
2018 | $27.30 | 0.33 | 1.51 | 1.84 | (0.26) | (0.61) | (0.87) | $28.27 | 6.80% | 0.75% | 0.75% | 1.11% | 1.11% | 41% | $38,188 | ||||||||||||||||||||||||||||||||
2017 | $21.81 | 0.27 | 5.53 | 5.80 | (0.31) | — | (0.31) | $27.30 | 26.88% | 0.80% | 0.80% | 1.15% | 1.15% | 18% | $19,776 |
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) | |||||||||||||||||||||||||||||||||
Y Class | |||||||||||||||||||||||||||||||||||||||||||||||
2022(3) | $48.32 | 0.17 | (6.22) | (6.05) | (0.36) | (0.96) | (1.32) | $40.95 | (12.89)% | 0.44%(4) | 0.44%(4) | 0.76%(4) | 0.76%(4) | 6% | $18,170 | ||||||||||||||||||||||||||||||||
2021 | $33.81 | 0.34 | 14.46 | 14.80 | (0.29) | — | (0.29) | $48.32 | 44.01% | 0.44% | 0.44% | 0.81% | 0.81% | 18% | $18,939 | ||||||||||||||||||||||||||||||||
2020 | $30.56 | 0.43 | 3.12 | 3.55 | (0.10) | (0.20) | (0.30) | $33.81 | 11.70% | 0.44% | 0.48% | 1.23% | 1.19% | 36% | $8,115 | ||||||||||||||||||||||||||||||||
2019 | $28.32 | 0.41 | 3.82 | 4.23 | (0.32) | (1.67) | (1.99) | $30.56 | 16.56% | 0.45% | 0.49% | 1.49% | 1.45% | 33% | $51,037 | ||||||||||||||||||||||||||||||||
2018 | $27.33 | 0.36 | 1.52 | 1.88 | (0.28) | (0.61) | (0.89) | $28.32 | 6.93% | 0.60% | 0.60% | 1.26% | 1.26% | 41% | $14,485 | ||||||||||||||||||||||||||||||||
2017(5) | $23.89 | 0.16 | 3.28 | 3.44 | — | — | — | $27.33 | 14.40% | 0.65%(4) | 0.65%(4) | 1.10%(4) | 1.10%(4) | 18%(6) | $383 | ||||||||||||||||||||||||||||||||
A Class | |||||||||||||||||||||||||||||||||||||||||||||||
2022(3) | $47.77 | 0.04 | (6.18) | (6.14) | (0.07) | (0.96) | (1.03) | $40.60 | (13.16)% | 1.04%(4) | 1.04%(4) | 0.16%(4) | 0.16%(4) | 6% | $90,589 | ||||||||||||||||||||||||||||||||
2021 | $33.43 | 0.08 | 14.32 | 14.40 | (0.06) | — | (0.06) | $47.77 | 43.13% | 1.04% | 1.04% | 0.21% | 0.21% | 18% | $97,032 | ||||||||||||||||||||||||||||||||
2020 | $30.29 | 0.21 | 3.13 | 3.34 | — | (0.20) | (0.20) | $33.43 | 11.07% | 1.04% | 1.08% | 0.63% | 0.59% | 36% | $54,638 | ||||||||||||||||||||||||||||||||
2019 | $28.09 | 0.25 | 3.78 | 4.03 | (0.16) | (1.67) | (1.83) | $30.29 | 15.81% | 1.05% | 1.09% | 0.89% | 0.85% | 33% | $54,290 | ||||||||||||||||||||||||||||||||
2018 | $27.13 | 0.19 | 1.51 | 1.70 | (0.13) | (0.61) | (0.74) | $28.09 | 6.31% | 1.20% | 1.20% | 0.66% | 0.66% | 41% | $50,489 | ||||||||||||||||||||||||||||||||
2017 | $21.67 | 0.17 | 5.50 | 5.67 | (0.21) | — | (0.21) | $27.13 | 26.34% | 1.25% | 1.25% | 0.70% | 0.70% | 18% | $51,396 |
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) | |||||||||||||||||||||||||||||||||
C Class | |||||||||||||||||||||||||||||||||||||||||||||||
2022(3) | $45.99 | (0.13) | (5.93) | (6.06) | — | (0.96) | (0.96) | $38.97 | (13.48)% | 1.79%(4) | 1.79%(4) | (0.59)%(4) | (0.59)%(4) | 6% | $12,128 | ||||||||||||||||||||||||||||||||
2021 | $32.37 | (0.22) | 13.84 | 13.62 | — | — | — | $45.99 | 42.08% | 1.79% | 1.79% | (0.54)% | (0.54)% | 18% | $14,427 | ||||||||||||||||||||||||||||||||
2020 | $29.56 | (0.02) | 3.03 | 3.01 | — | (0.20) | (0.20) | $32.37 | 10.22% | 1.79% | 1.83% | (0.12)% | (0.16)% | 36% | $10,178 | ||||||||||||||||||||||||||||||||
2019 | $27.48 | 0.04 | 3.71 | 3.75 | — | (1.67) | (1.67) | $29.56 | 14.98% | 1.80% | 1.84% | 0.14% | 0.10% | 33% | $10,149 | ||||||||||||||||||||||||||||||||
2018 | $26.63 | (0.03) | 1.49 | 1.46 | — | (0.61) | (0.61) | $27.48 | 5.51% | 1.95% | 1.95% | (0.09)% | (0.09)% | 41% | $11,277 | ||||||||||||||||||||||||||||||||
2017 | $21.27 | (0.01) | 5.41 | 5.40 | (0.04) | — | (0.04) | $26.63 | 25.40% | 2.00% | 2.00% | (0.05)% | (0.05)% | 18% | $17,904 | ||||||||||||||||||||||||||||||||
R Class | |||||||||||||||||||||||||||||||||||||||||||||||
2022(3) | $47.33 | (0.02) | (6.12) | (6.14) | — | (0.96) | (0.96) | $40.23 | (13.26)% | 1.29%(4) | 1.29%(4) | (0.09)%(4) | (0.09)%(4) | 6% | $15,383 | ||||||||||||||||||||||||||||||||
2021 | $33.15 | (0.02) | 14.20 | 14.18 | — | — | — | $47.33 | 42.78% | 1.29% | 1.29% | (0.04)% | (0.04)% | 18% | $18,044 | ||||||||||||||||||||||||||||||||
2020 | $30.12 | 0.12 | 3.11 | 3.23 | — | (0.20) | (0.20) | $33.15 | 10.77% | 1.29% | 1.33% | 0.38% | 0.34% | 36% | $9,014 | ||||||||||||||||||||||||||||||||
2019 | $27.93 | 0.18 | 3.77 | 3.95 | (0.09) | (1.67) | (1.76) | $30.12 | 15.56% | 1.30% | 1.34% | 0.64% | 0.60% | 33% | $4,466 | ||||||||||||||||||||||||||||||||
2018 | $26.98 | 0.11 | 1.51 | 1.62 | (0.06) | (0.61) | (0.67) | $27.93 | 6.04% | 1.45% | 1.45% | 0.41% | 0.41% | 41% | $3,223 | ||||||||||||||||||||||||||||||||
2017 | $21.55 | 0.11 | 5.47 | 5.58 | (0.15) | — | (0.15) | $26.98 | 26.03% | 1.50% | 1.50% | 0.45% | 0.45% | 18% | $3,910 |
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) | |||||||||||||||||||||||||||||||||
R5 Class | |||||||||||||||||||||||||||||||||||||||||||||||
2022(3) | $48.26 | 0.14 | (6.22) | (6.08) | (0.29) | (0.96) | (1.25) | $40.93 | (12.97)% | 0.59%(4) | 0.59%(4) | 0.61%(4) | 0.61%(4) | 6% | $6,004 | ||||||||||||||||||||||||||||||||
2021 | $33.77 | 0.27 | 14.45 | 14.72 | (0.23) | — | (0.23) | $48.26 | 43.78% | 0.59% | 0.59% | 0.66% | 0.66% | 18% | $5,819 | ||||||||||||||||||||||||||||||||
2020 | $30.52 | 0.34 | 3.17 | 3.51 | (0.06) | (0.20) | (0.26) | $33.77 | 11.55% | 0.59% | 0.63% | 1.08% | 1.04% | 36% | $3,195 | ||||||||||||||||||||||||||||||||
2019 | $28.29 | 0.38 | 3.80 | 4.18 | (0.28) | (1.67) | (1.95) | $30.52 | 16.36% | 0.60% | 0.64% | 1.34% | 1.30% | 33% | $1,314 | ||||||||||||||||||||||||||||||||
2018 | $27.30 | 0.32 | 1.52 | 1.84 | (0.24) | (0.61) | (0.85) | $28.29 | 6.82% | 0.75% | 0.75% | 1.11% | 1.11% | 41% | $1,344 | ||||||||||||||||||||||||||||||||
2017(5) | $23.89 | 0.15 | 3.26 | 3.41 | — | — | — | $27.30 | 14.27% | 0.80%(4) | 0.80%(4) | 1.07%(4) | 1.07%(4) | 18%(6) | $6 | ||||||||||||||||||||||||||||||||
R6 Class | |||||||||||||||||||||||||||||||||||||||||||||||
2022(3) | $48.37 | 0.17 | (6.22) | (6.05) | (0.36) | (0.96) | (1.32) | $41.00 | (12.90)% | 0.44%(4) | 0.44%(4) | 0.76%(4) | 0.76%(4) | 6% | $67,812 | ||||||||||||||||||||||||||||||||
2021 | $33.84 | 0.32 | 14.50 | 14.82 | (0.29) | — | (0.29) | $48.37 | 44.03% | 0.44% | 0.44% | 0.81% | 0.81% | 18% | $46,681 | ||||||||||||||||||||||||||||||||
2020 | $30.56 | 0.39 | 3.17 | 3.56 | (0.08) | (0.20) | (0.28) | $33.84 | 11.70% | 0.44% | 0.48% | 1.23% | 1.19% | 36% | $5,150 | ||||||||||||||||||||||||||||||||
2019(7) | $28.05 | 0.21 | 2.30 | 2.51 | — | — | — | $30.56 | 8.95% | 0.44%(4) | 0.49%(4) | 1.18%(4) | 1.13%(4) | 33%(8) | $3,979 | ||||||||||||||||||||||||||||||||
G Class | |||||||||||||||||||||||||||||||||||||||||||||||
2022(3) | $48.54 | 0.27 | (6.22) | (5.95) | (0.57) | (0.96) | (1.53) | $41.06 | (12.70)% | 0.00%(4)(9) | 0.44%(4) | 1.20%(4) | 0.76%(4) | 6% | $1,909,351 | ||||||||||||||||||||||||||||||||
2021 | $33.97 | 0.53 | 14.49 | 15.02 | (0.45) | — | (0.45) | $48.54 | 44.61% | 0.00%(9) | 0.44% | 1.25% | 0.81% | 18% | $2,360,362 | ||||||||||||||||||||||||||||||||
2020 | $30.64 | 0.54 | 3.18 | 3.72 | (0.19) | (0.20) | (0.39) | $33.97 | 12.21% | 0.00%(9) | 0.48% | 1.67% | 1.19% | 36% | $1,800,919 | ||||||||||||||||||||||||||||||||
2019(7) | $28.05 | 0.37 | 2.22 | 2.59 | — | — | — | $30.64 | 9.23% | 0.00%(4)(9) | 0.49%(4) | 2.04%(4) | 1.55%(4) | 33%(8) | $497,635 |
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, 2022 (unaudited).
(4)Annualized.
(5)April 10, 2017 (commencement of sale) through October 31, 2017.
(6)Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended October 31, 2017.
(7)April 1, 2019 (commencement of sale) through October 31, 2019.
(8)Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended October 31, 2019.
(9)Ratio was less than 0.005%.
See Notes to Financial Statements.
Liquidity Risk Management Program |
The Fund has adopted a liquidity risk management program (the “program”). The Fund’s Board of Directors (the "Board") has designated American Century Investment Management, Inc. (“ACIM”) as the administrator of the program. Personnel of ACIM or its affiliates conduct the day-to-day operation of the program pursuant to policies and procedures administered by the Program Administrator, including members of ACIM’s Investment Oversight Committee who are members of the ACIM’s Investment Management and Global Analytics departments.
Under the program, ACIM manages the Fund’s liquidity risk, which is the risk that the Fund could not meet shareholder redemption requests without significant dilution of remaining shareholders’ interests in the Fund. This risk is managed by monitoring the degree of liquidity of the Fund’s investments, limiting the amount of the Fund’s illiquid investments, and utilizing various risk management tools and facilities available to the Fund for meeting shareholder redemptions, among other means. ACIM’s process of determining the degree of liquidity of certain Fund’s investments is supported by a third-party liquidity assessment vendor.
The Board reviewed a report prepared by ACIM regarding the operation and effectiveness of the program for the period January 1, 2021 through December 31, 2021. No significant liquidity events impacting the Fund were noted in the report. In addition, ACIM provided its assessment that the program had been effective in managing the Fund’s liquidity risk.
27
Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain retirement accounts 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 and change your withholding percentage for future distributions.
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.
*Some 403(b), 457 and qualified retirement plan distributions may be subject to 20% mandatory withholding, as they 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 American Century Investments’ website at americancentury.com/proxy 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 americancentury.com/proxy. 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 as an exhibit to its reports on Form N-PORT. These portfolio holdings are available on the fund's website at americancentury.com and, upon request, by calling 1-800-345-2021. The fund’s Form N-PORT reports are available on the SEC’s website at sec.gov.
28
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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. | ||||||||
©2022 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-92359 2206 |
![image8.jpg](https://capedge.com/proxy/N-CSRS/0000100334-22-000050/image8.jpg)
Semiannual Report | |||||
April 30, 2022 | |||||
Ultra® Fund | |||||
Investor Class (TWCUX) | |||||
I Class (TWUIX) | |||||
Y Class (AULYX) | |||||
A Class (TWUAX) | |||||
C Class (TWCCX) | |||||
R Class (AULRX) | |||||
R5 Class (AULGX) | |||||
R6 Class (AULDX) | |||||
G Class (AULNX) |
Table of Contents |
President’s Letter | |||||
Fund Characteristics | |||||
Shareholder Fee Example | |||||
Schedule of Investments | |||||
Statement of Assets and Liabilities | |||||
Statement of Operations | |||||
Statement of Changes in Net Assets | |||||
Notes to Financial Statements | |||||
Financial Highlights | |||||
Liquidity Risk Management Program | |||||
Additional Information |
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 |
![image30.jpg](https://capedge.com/proxy/N-CSRS/0000100334-22-000050/image30.jpg)
Dear Investor:
Thank you for reviewing this semiannual report for the period ended April 30, 2022. It provides a market overview (below), followed by a schedule of fund investments and other financial information. For additional investment insights, please visit americancentury.com.
Escalating Inflation, Sharp Volatility Hampered Investment Returns
Investors faced increasingly challenging market conditions as the reporting period progressed. From soaring inflation and rising interest rates to mounting geopolitical unrest and slowing growth, most asset classes struggled amid intense volatility.
Inflation was already at multiyear highs when the reporting period began. This was largely due to massive fiscal and monetary support, escalating energy prices, supply chain breakdowns and labor market shortages. Russia’s invasion of Ukraine in February sent commodity prices even higher, exacerbating existing inflationary pressures and further damaging global supply chains.
By period-end, inflation stood at a 40-year high in the U.S., a 30-year high in the U.K. and a record high in the eurozone. Most emerging markets also grappled with rising inflation. At the same time, global growth slowed dramatically.
In response to surging inflation, the Federal Reserve in March implemented its first rate hike in more than three years and ended its asset purchase program. The Bank of England executed a series of rate hikes, while European Central Bank officials announced their asset purchase program would end in the third quarter.
The combination of accelerating inflation, tighter monetary policy, geopolitical unrest and slowing economic growth fueled widespread and sharp market volatility. Global stock and bond returns plunged for the six-month period. Perceived inflation-fighting assets, including real estate investment trusts, generally fared much better than other securities.
Staying Disciplined in Uncertain Times
We expect market volatility to linger as investors navigate this complex backdrop. In addition, Russia’s invasion of Ukraine has further complicated a tense geopolitical environment. We will continue to monitor the evolving situation and its implications for our clients and investment exposure.
We appreciate your confidence in us during these extraordinary times. Our firm has a long history of helping clients weather unpredictable markets, and we’re confident we will continue to meet today’s challenges.
Sincerely,
![image27.jpg](https://capedge.com/proxy/N-CSRS/0000100334-22-000050/image27.jpg)
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
2
Fund Characteristics |
APRIL 30, 2022 | |||||
Types of Investments in Portfolio | % of net assets | ||||
Common Stocks | 99.8% | ||||
Short-Term Investments | 0.2% | ||||
Other Assets and Liabilities | —* | ||||
*Category is less than 0.05% of total net assets. | |||||
Top Five Industries | % of net assets | ||||
Technology Hardware, Storage and Peripherals | 15.3% | ||||
IT Services | 12.7% | ||||
Interactive Media and Services | 10.2% | ||||
Software | 9.6% | ||||
Semiconductors and Semiconductor Equipment | 8.1% |
3
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, 2021 to April 30, 2022.
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 I Class shares of the American Century Diversified Bond Fund, in an American Century Investments account (i.e., not through a financial intermediary or employer-sponsored retirement plan account), American Century Investments may charge you a $25.00 annual 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 $25.00 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.
4
Beginning Account Value 11/1/21 | Ending Account Value 4/30/22 | Expenses Paid During Period(1) 11/1/21 - 4/30/22 | Annualized Expense Ratio(1) | |||||||||||
Actual | ||||||||||||||
Investor Class | $1,000 | $788.60 | $4.17 | 0.94% | ||||||||||
I Class | $1,000 | $789.40 | $3.28 | 0.74% | ||||||||||
Y Class | $1,000 | $790.00 | $2.62 | 0.59% | ||||||||||
A Class | $1,000 | $787.50 | $5.27 | 1.19% | ||||||||||
C Class | $1,000 | $784.70 | $8.58 | 1.94% | ||||||||||
R Class | $1,000 | $786.50 | $6.38 | 1.44% | ||||||||||
R5 Class | $1,000 | $789.40 | $3.28 | 0.74% | ||||||||||
R6 Class | $1,000 | $789.90 | $2.62 | 0.59% | ||||||||||
G Class | $1,000 | $792.30 | $0.00 | 0.00%(2) | ||||||||||
Hypothetical | ||||||||||||||
Investor Class | $1,000 | $1,020.13 | $4.71 | 0.94% | ||||||||||
I Class | $1,000 | $1,021.13 | $3.71 | 0.74% | ||||||||||
Y Class | $1,000 | $1,021.87 | $2.96 | 0.59% | ||||||||||
A Class | $1,000 | $1,018.89 | $5.96 | 1.19% | ||||||||||
C Class | $1,000 | $1,015.17 | $9.69 | 1.94% | ||||||||||
R Class | $1,000 | $1,017.65 | $7.20 | 1.44% | ||||||||||
R5 Class | $1,000 | $1,021.13 | $3.71 | 0.74% | ||||||||||
R6 Class | $1,000 | $1,021.87 | $2.96 | 0.59% | ||||||||||
G Class | $1,000 | $1,024.80 | $0.00 | 0.00%(2) |
(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. Annualized expense ratio reflects actual expenses, including any applicable fee waivers or expense reimbursements and excluding any acquired fund fees and expenses.
(2)Other expenses, which include directors' fees and expenses, did not exceed 0.005%.
5
Schedule of Investments |
APRIL 30, 2022 (UNAUDITED)
Shares | Value | |||||||
COMMON STOCKS — 99.8% | ||||||||
Automobiles — 5.3% | ||||||||
Tesla, Inc.(1) | 1,045,000 | $ | 909,944,200 | |||||
Banks — 0.3% | ||||||||
JPMorgan Chase & Co. | 501,000 | 59,799,360 | ||||||
Beverages — 1.4% | ||||||||
Constellation Brands, Inc., Class A | 1,002,000 | 246,582,180 | ||||||
Biotechnology — 3.4% | ||||||||
Biogen, Inc.(1) | 262,000 | 54,349,280 | ||||||
Genmab A/S(1) | 373,000 | 131,162,255 | ||||||
Regeneron Pharmaceuticals, Inc.(1) | 599,000 | 394,806,890 | ||||||
580,318,425 | ||||||||
Capital Markets — 0.9% | ||||||||
MSCI, Inc. | 389,000 | 163,866,250 | ||||||
Chemicals — 0.2% | ||||||||
Ecolab, Inc. | 239,000 | 40,472,260 | ||||||
Commercial Services and Supplies — 0.4% | ||||||||
Copart, Inc.(1) | 682,000 | 77,509,300 | ||||||
Distributors — 0.4% | ||||||||
Pool Corp. | 153,000 | 61,998,660 | ||||||
Electrical Equipment — 1.0% | ||||||||
Acuity Brands, Inc. | 759,000 | 130,912,320 | ||||||
Rockwell Automation, Inc. | 172,000 | 43,459,240 | ||||||
174,371,560 | ||||||||
Electronic Equipment, Instruments and Components — 0.6% | ||||||||
Cognex Corp. | 657,000 | 44,432,910 | ||||||
Keyence Corp. | 127,900 | 51,416,327 | ||||||
95,849,237 | ||||||||
Entertainment — 1.2% | ||||||||
Netflix, Inc.(1) | 528,000 | 100,510,080 | ||||||
Walt Disney Co.(1) | 959,000 | 107,053,170 | ||||||
207,563,250 | ||||||||
Food and Staples Retailing — 2.1% | ||||||||
Costco Wholesale Corp. | 678,000 | 360,506,160 | ||||||
Health Care Equipment and Supplies — 5.4% | ||||||||
ABIOMED, Inc.(1) | 90,000 | 25,792,200 | ||||||
DexCom, Inc.(1) | 217,000 | 88,661,860 | ||||||
Edwards Lifesciences Corp.(1) | 1,614,000 | 170,728,920 | ||||||
IDEXX Laboratories, Inc.(1) | 313,000 | 134,740,240 | ||||||
Insulet Corp.(1) | 278,000 | 66,439,220 | ||||||
Intuitive Surgical, Inc.(1) | 1,826,430 | 437,064,699 | ||||||
923,427,139 | ||||||||
Health Care Providers and Services — 4.2% | ||||||||
Guardant Health, Inc.(1) | 804,000 | 49,606,800 | ||||||
UnitedHealth Group, Inc. | 1,336,000 | 679,422,800 | ||||||
729,029,600 | ||||||||
Hotels, Restaurants and Leisure — 2.2% | ||||||||
Chipotle Mexican Grill, Inc.(1) | 223,000 | 324,601,030 |
6
Shares | Value | |||||||
Wingstop, Inc. | 676,000 | $ | 62,029,760 | |||||
386,630,790 | ||||||||
Household Durables — 0.5% | ||||||||
Sonos, Inc.(1) | 3,602,000 | 82,197,640 | ||||||
Interactive Media and Services — 10.2% | ||||||||
Alphabet, Inc., Class A(1) | 288,955 | 659,450,212 | ||||||
Alphabet, Inc., Class C(1) | 317,000 | 728,887,610 | ||||||
Meta Platforms, Inc., Class A(1) | 1,818,000 | 364,454,460 | ||||||
1,752,792,282 | ||||||||
Internet and Direct Marketing Retail — 6.3% | ||||||||
Amazon.com, Inc.(1) | 436,294 | 1,084,465,455 | ||||||
IT Services — 12.7% | ||||||||
Adyen NV(1) | 122,000 | 204,629,790 | ||||||
Block, Inc.(1) | 1,415,000 | 140,849,100 | ||||||
Mastercard, Inc., Class A | 2,256,779 | 820,068,353 | ||||||
Okta, Inc.(1) | 436,000 | 52,019,160 | ||||||
PayPal Holdings, Inc.(1) | 1,584,000 | 139,281,120 | ||||||
Shopify, Inc., Class A(1) | 220,453 | 94,093,750 | ||||||
Visa, Inc., Class A | 3,435,000 | 732,101,550 | ||||||
2,183,042,823 | ||||||||
Machinery — 1.7% | ||||||||
Donaldson Co., Inc. | 704,557 | 34,551,475 | ||||||
Nordson Corp. | 405,000 | 87,354,450 | ||||||
Westinghouse Air Brake Technologies Corp. | 1,219,000 | 109,600,290 | ||||||
Yaskawa Electric Corp. | 1,951,800 | 66,274,240 | ||||||
297,780,455 | ||||||||
Oil, Gas and Consumable Fuels — 1.0% | ||||||||
EOG Resources, Inc. | 1,513,000 | 176,657,880 | ||||||
Personal Products — 0.9% | ||||||||
Estee Lauder Cos., Inc., Class A | 611,000 | 161,340,660 | ||||||
Road and Rail — 0.9% | ||||||||
J.B. Hunt Transport Services, Inc. | 955,000 | 163,161,750 | ||||||
Semiconductors and Semiconductor Equipment — 8.1% | ||||||||
Advanced Micro Devices, Inc.(1) | 4,189,000 | 358,243,280 | ||||||
Analog Devices, Inc. | 1,258,000 | 194,210,040 | ||||||
Applied Materials, Inc. | 2,816,000 | 310,745,600 | ||||||
ASML Holding NV(2) | 133,000 | 75,482,617 | ||||||
NVIDIA Corp. | 2,430,000 | 450,692,100 | ||||||
1,389,373,637 | ||||||||
Software — 9.6% | ||||||||
DocuSign, Inc.(1) | 1,465,000 | 118,665,000 | ||||||
Microsoft Corp. | 4,457,000 | 1,236,906,640 | ||||||
Paycom Software, Inc.(1) | 312,000 | 87,818,640 | ||||||
Salesforce, Inc.(1) | 448,000 | 78,821,120 | ||||||
Zscaler, Inc.(1) | 655,000 | 132,794,700 | ||||||
1,655,006,100 | ||||||||
Technology Hardware, Storage and Peripherals — 15.3% | ||||||||
Apple, Inc. | 16,726,464 | 2,636,927,050 | ||||||
Textiles, Apparel and Luxury Goods — 3.6% | ||||||||
lululemon athletica, Inc.(1) | 928,000 | 329,096,640 |
7
Shares | Value | |||||||
NIKE, Inc., Class B | 2,302,000 | $ | 287,059,400 | |||||
616,156,040 | ||||||||
TOTAL COMMON STOCKS (Cost $5,556,795,377) | 17,216,770,143 | |||||||
SHORT-TERM INVESTMENTS — 0.2% | ||||||||
Money Market Funds† | ||||||||
State Street Institutional U.S. Government Money Market Fund, Premier Class | 528,702 | 528,702 | ||||||
Repurchase Agreements — 0.2% | ||||||||
BMO Capital Markets Corp., (collateralized by various U.S. Treasury obligations, 3.00% - 3.625%, 8/15/43 - 8/15/48, valued at $3,419,420), in a joint trading account at 0.25%, dated 4/29/22, due 5/2/22 (Delivery value $3,360,445) | 3,360,375 | |||||||
Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 3.375%, 11/15/48, valued at $34,278,142), at 0.24%, dated 4/29/22, due 5/2/22 (Delivery value $33,606,672) | 33,606,000 | |||||||
36,966,375 | ||||||||
TOTAL SHORT-TERM INVESTMENTS (Cost $37,495,077) | 37,495,077 | |||||||
TOTAL INVESTMENT SECURITIES — 100.0% (Cost $5,594,290,454) | 17,254,265,220 | |||||||
OTHER ASSETS AND LIABILITIES† | (2,994,978) | |||||||
TOTAL NET ASSETS — 100.0% | $ | 17,251,270,242 |
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS | ||||||||||||||||||||
Currency Purchased | Currency Sold | Counterparty | Settlement Date | Unrealized Appreciation (Depreciation) | ||||||||||||||||
EUR | 9,452,560 | USD | 10,476,083 | JPMorgan Chase Bank N.A. | 6/30/22 | $ | (476,192) | |||||||||||||
EUR | 7,596,940 | USD | 8,297,135 | JPMorgan Chase Bank N.A. | 6/30/22 | (260,310) | ||||||||||||||
EUR | 6,788,080 | USD | 7,375,629 | JPMorgan Chase Bank N.A. | 6/30/22 | (194,499) | ||||||||||||||
EUR | 6,280,560 | USD | 6,711,281 | JPMorgan Chase Bank N.A. | 6/30/22 | (67,058) | ||||||||||||||
USD | 158,699,401 | EUR | 143,929,500 | JPMorgan Chase Bank N.A. | 6/30/22 | 6,435,961 | ||||||||||||||
USD | 10,044,276 | EUR | 8,976,760 | JPMorgan Chase Bank N.A. | 6/30/22 | 547,736 | ||||||||||||||
USD | 5,295,725 | EUR | 4,853,160 | JPMorgan Chase Bank N.A. | 6/30/22 | 161,552 | ||||||||||||||
JPY | 371,912,450 | USD | 2,923,716 | Bank of America N.A. | 6/30/22 | (51,921) | ||||||||||||||
USD | 47,211,700 | JPY | 5,684,326,900 | Bank of America N.A. | 6/30/22 | 3,319,046 | ||||||||||||||
$ | 9,414,315 |
NOTES TO SCHEDULE OF INVESTMENTS | ||||||||
EUR | - | Euro | ||||||
JPY | - | Japanese Yen | ||||||
USD | - | United States Dollar |
†Category is less than 0.05% of total net assets.
(1)Non-income producing.
(2)Security, or a portion thereof, is on loan. At the period end, the aggregate value of securities on loan was $27,602,801. The amount of securities on loan indicated may not correspond with the securities on loan identified because securities with pending sales are in the process of recall from the brokers. At the period end, the aggregate value of the collateral held by the fund was $29,509,187 all of which is securities collateral.
See Notes to Financial Statements.
8
Statement of Assets and Liabilities |
APRIL 30, 2022 (UNAUDITED) | |||||
Assets | |||||
Investment securities, at value (cost of $5,594,290,454) — including $27,602,801 of securities on loan | $ | 17,254,265,220 | |||
Foreign currency holdings, at value (cost of $156) | 155 | ||||
Receivable for capital shares sold | 4,247,343 | ||||
Unrealized appreciation on forward foreign currency exchange contracts | 10,464,295 | ||||
Dividends and interest receivable | 2,980,882 | ||||
Securities lending receivable | 688 | ||||
17,271,958,583 | |||||
Liabilities | |||||
Payable for capital shares redeemed | 5,292,220 | ||||
Unrealized depreciation on forward foreign currency exchange contracts | 1,049,980 | ||||
Accrued management fees | 14,262,825 | ||||
Distribution and service fees payable | 83,316 | ||||
20,688,341 | |||||
Net Assets | $ | 17,251,270,242 | |||
Net Assets Consist of: | |||||
Capital (par value and paid-in surplus) | $ | 4,835,126,752 | |||
Distributable earnings | 12,416,143,490 | ||||
$ | 17,251,270,242 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | |||||||||
Investor Class, $0.01 Par Value | $15,539,504,395 | 225,416,031 | $68.94 | ||||||||
I Class, $0.01 Par Value | $742,789,418 | 10,254,315 | $72.44 | ||||||||
Y Class, $0.01 Par Value | $2,905,030 | 39,795 | $73.00 | ||||||||
A Class, $0.01 Par Value | $193,590,696 | 2,996,435 | $64.61* | ||||||||
C Class, $0.01 Par Value | $27,085,373 | 532,839 | $50.83 | ||||||||
R Class, $0.01 Par Value | $35,033,490 | 566,178 | $61.88 | ||||||||
R5 Class, $0.01 Par Value | $6,452,779 | 89,016 | $72.49 | ||||||||
R6 Class, $0.01 Par Value | $703,900,824 | 9,654,663 | $72.91 | ||||||||
G Class, $0.01 Par Value | $8,237 | 111 | $74.21 |
*Maximum offering price $68.55 (net asset value divided by 0.9425).
See Notes to Financial Statements.
9
Statement of Operations |
FOR THE SIX MONTHS ENDED APRIL 30, 2022 (UNAUDITED) | |||||
Investment Income (Loss) | |||||
Income: | |||||
Dividends (net of foreign taxes withheld of $54,707) | $ | 48,554,585 | |||
Interest | 33,006 | ||||
Securities lending, net | 761 | ||||
48,588,352 | |||||
Expenses: | |||||
Management fees | 93,112,457 | ||||
Distribution and service fees: | |||||
A Class | 286,579 | ||||
C Class | 159,908 | ||||
R Class | 94,553 | ||||
Directors' fees and expenses | 218,481 | ||||
Other expenses | 3,215 | ||||
93,875,193 | |||||
Fees waived(1) | (737,350) | ||||
93,137,843 | |||||
Net investment income (loss) | (44,549,491) | ||||
Realized and Unrealized Gain (Loss) | |||||
Net realized gain (loss) on: | |||||
Investment transactions | 873,406,617 | ||||
Forward foreign currency exchange contract transactions | 19,983,875 | ||||
Foreign currency translation transactions | (303,346) | ||||
893,087,146 | |||||
Change in net unrealized appreciation (depreciation) on: | |||||
Investments | (5,489,800,815) | ||||
Forward foreign currency exchange contracts | 3,203,494 | ||||
Translation of assets and liabilities in foreign currencies | (32,901) | ||||
(5,486,630,222) | |||||
Net realized and unrealized gain (loss) | (4,593,543,076) | ||||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | (4,638,092,567) |
(1)Amount consists of $667,586, $30,523, $105, $8,298, $1,173, $1,388, $54, $28,195 and $28 for Investor Class, I Class, Y Class, A Class, C Class, R Class, R5 Class, R6 Class and G Class, respectively.
See Notes to Financial Statements.
10
Statement of Changes in Net Assets |
SIX MONTHS ENDED APRIL 30, 2022 (UNAUDITED) AND YEAR ENDED OCTOBER 31, 2021 | ||||||||
Increase (Decrease) in Net Assets | April 30, 2022 | October 31, 2021 | ||||||
Operations | ||||||||
Net investment income (loss) | $ | (44,549,491) | $ | (88,743,075) | ||||
Net realized gain (loss) | 893,087,146 | 1,443,226,828 | ||||||
Change in net unrealized appreciation (depreciation) | (5,486,630,222) | 5,644,520,235 | ||||||
Net increase (decrease) in net assets resulting from operations | (4,638,092,567) | 6,999,003,988 | ||||||
Distributions to Shareholders | ||||||||
From earnings: | ||||||||
Investor Class | (1,280,661,900) | (467,326,500) | ||||||
I Class | (52,994,662) | (17,883,963) | ||||||
Y Class | (187,141) | (63,933) | ||||||
A Class | (17,349,811) | (5,531,503) | ||||||
C Class | (2,961,708) | (1,020,550) | ||||||
R Class | (2,905,579) | (950,777) | ||||||
R5 Class | (22,646) | (8,037) | ||||||
R6 Class | (48,932,667) | (16,143,769) | ||||||
G Class | (620) | (216) | ||||||
Decrease in net assets from distributions | (1,406,016,734) | (508,929,248) | ||||||
Capital Share Transactions | ||||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | 1,118,624,568 | (280,882,692) | ||||||
Net increase (decrease) in net assets | (4,925,484,733) | 6,209,192,048 | ||||||
Net Assets | ||||||||
Beginning of period | 22,176,754,975 | 15,967,562,927 | ||||||
End of period | $ | 17,251,270,242 | $ | 22,176,754,975 |
See Notes to Financial Statements.
11
Notes to Financial Statements |
APRIL 30, 2022 (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's investment objective is to seek long-term capital growth.
The fund offers the Investor Class, I Class, Y Class, A Class, C Class, R Class, R5 Class, R6 Class and G 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.
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 (NAV) 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.
Open-end management investment companies are valued at the reported NAV 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 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.
12
The fund monitors for significant events occurring after the close of an investment’s primary exchange but before the fund’s NAV 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. 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. Securities lending income is net of fees and rebates earned by the lending agent for its services.
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.
Segregated Assets — In accordance with the 1940 Act, the fund segregates assets on its books and records to cover certain types of investment securities and other financial instruments. 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 collateral requirements.
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.
13
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.
Securities Lending — Securities are lent to qualified financial institutions and brokers. State Street Bank & Trust Co. serves as securities lending agent to the fund pursuant to a Securities Lending Agreement. The lending of securities exposes the fund to risks such as: the borrowers may fail to return the loaned securities, the borrowers may not be able to provide additional collateral, the fund may experience delays in recovery of the loaned securities or delays in access to collateral, or the fund may experience losses related to the investment collateral. To minimize certain risks, loan counterparties pledge collateral in the form of cash and/or securities. The lending agent has agreed to indemnify the fund in the case of default of any securities borrowed. Cash collateral received is invested in the State Street Navigator Securities Lending Government Money Market Portfolio, a money market mutual fund registered under the 1940 Act. The loans may also be secured by U.S. government securities in an amount at least equal to the market value of the securities loaned, plus accrued interest and dividends, determined on a daily basis and adjusted accordingly. By lending securities, the fund seeks to increase its net investment income through the receipt of interest and fees. Such income is reflected separately within the Statement of Operations. The value of loaned securities and related collateral outstanding at period end, if any, are shown on a gross basis within the Schedule of Investments and Statement of Assets and Liabilities.
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 ACIM will pay all expenses of managing and operating the fund, except brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), extraordinary expenses, and expenses incurred in connection with the provision of shareholder services and distribution services under a plan adopted pursuant to Rule 12b-1 under the 1940 Act. The fee is computed and accrued daily based on each class's daily net assets and paid monthly in arrears. The difference in the fee among the classes is a result of their separate arrangements for non-Rule 12b-1 shareholder services. It is not the result of any difference in advisory or custodial fees or other expenses related to the management of the fund's assets, which do not vary by class. 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 use very similar investment teams and strategies (strategy assets). The investment advisor agreed to waive a portion of the fund’s management fee such that the management fee does not exceed 0.938% for Investor Class, A Class, C Class and R Class, 0.738% for I Class and R5 Class, and 0.588% for Y Class and R6 Class. The investment advisor expects this waiver arrangement to continue until February 28, 2023 and cannot terminate it prior to such date without the approval of the Board of Directors. The investment advisor agreed to waive the G Class's management fee in its entirety. The investment advisor expects this waiver to remain in effect permanently and cannot terminate it without the approval of the Board of Directors.
14
The management fee schedule range and the effective annual management fee before and after waiver for each class for the period ended April 30, 2022 are as follows:
Management Fee Schedule Range | Effective Annual Management Fee | ||||||||||
Before Waiver | After Waiver | ||||||||||
Investor Class | 0.800% to 0.990% | 0.95% | 0.94% | ||||||||
I Class | 0.600% to 0.790% | 0.75% | 0.74% | ||||||||
Y Class | 0.450% to 0.640% | 0.60% | 0.59% | ||||||||
A Class | 0.800% to 0.990% | 0.95% | 0.94% | ||||||||
C Class | 0.800% to 0.990% | 0.95% | 0.94% | ||||||||
R Class | 0.800% to 0.990% | 0.95% | 0.94% | ||||||||
R5 Class | 0.600% to 0.790% | 0.75% | 0.74% | ||||||||
R6 Class | 0.450% to 0.640% | 0.60% | 0.59% | ||||||||
G Class | 0.450% to 0.640% | 0.60% | 0.00% |
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 period ended April 30, 2022 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.
Interfund Transactions — The fund may enter into security transactions with other American Century Investments funds and other client accounts of the investment advisor, in accordance with the 1940 Act rules and procedures adopted by the Board of Directors. The rules and procedures require, among other things, that these transactions be effected at the independent current market price of the security. During the period, the interfund sales were $2,478,185 and there were no interfund purchases. The effect of interfund transactions on the Statement of Operations was $974,642 in net realized gain (loss) on investment transactions.
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the period ended April 30, 2022 were $1,285,624,458 and $1,583,792,004, respectively.
15
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended April 30, 2022 | Year ended October 31, 2021 | |||||||||||||
Shares | Amount | Shares | Amount | |||||||||||
Investor Class/Shares Authorized | 3,000,000,000 | 3,000,000,000 | ||||||||||||
Sold | 4,531,039 | $ | 364,318,934 | 7,547,892 | $ | 605,584,773 | ||||||||
Issued in reinvestment of distributions | 14,055,477 | 1,225,918,703 | 5,974,884 | 441,487,528 | ||||||||||
Redeemed | (9,496,390) | (770,023,299) | (17,884,083) | (1,445,704,546) | ||||||||||
9,090,126 | 820,214,338 | (4,361,307) | (398,632,245) | |||||||||||
I Class/Shares Authorized | 120,000,000 | 120,000,000 | ||||||||||||
Sold | 2,308,118 | 197,123,374 | 2,267,799 | 193,001,088 | ||||||||||
Issued in reinvestment of distributions | 526,979 | 48,255,456 | 199,466 | 15,400,784 | ||||||||||
Redeemed | (1,189,808) | (101,145,867) | (2,356,115) | (195,101,975) | ||||||||||
1,645,289 | 144,232,963 | 111,150 | 13,299,897 | |||||||||||
Y Class/Shares Authorized | 30,000,000 | 30,000,000 | ||||||||||||
Sold | 7,815 | 658,211 | 7,722 | 620,293 | ||||||||||
Issued in reinvestment of distributions | 1,273 | 117,405 | 519 | 40,282 | ||||||||||
Redeemed | (797) | (73,487) | (1,275) | (107,897) | ||||||||||
8,291 | 702,129 | 6,966 | 552,678 | |||||||||||
A Class/Shares Authorized | 60,000,000 | 60,000,000 | ||||||||||||
Sold | 452,202 | 34,284,248 | 776,974 | 59,920,322 | ||||||||||
Issued in reinvestment of distributions | 202,249 | 16,548,069 | 74,944 | 5,231,113 | ||||||||||
Redeemed | (569,438) | (42,543,859) | (610,136) | (45,317,012) | ||||||||||
85,013 | 8,288,458 | 241,782 | 19,834,423 | |||||||||||
C Class/Shares Authorized | 20,000,000 | 30,000,000 | ||||||||||||
Sold | 78,085 | 4,746,225 | 121,827 | 7,492,607 | ||||||||||
Issued in reinvestment of distributions | 39,175 | 2,529,562 | 15,854 | 895,771 | ||||||||||
Redeemed | (75,667) | (4,448,361) | (121,137) | (7,314,579) | ||||||||||
41,593 | 2,827,426 | 16,544 | 1,073,799 | |||||||||||
R Class/Shares Authorized | 30,000,000 | 30,000,000 | ||||||||||||
Sold | 117,131 | 8,310,191 | 209,513 | 15,189,667 | ||||||||||
Issued in reinvestment of distributions | 37,039 | 2,905,336 | 14,033 | 944,041 | ||||||||||
Redeemed | (79,146) | (5,806,906) | (173,293) | (12,606,839) | ||||||||||
75,024 | 5,408,621 | 50,253 | 3,526,869 | |||||||||||
R5 Class/Shares Authorized | 20,000,000 | 30,000,000 | ||||||||||||
Sold | 85,161 | 6,702,347 | 576 | 47,459 | ||||||||||
Issued in reinvestment of distributions | 80 | 7,330 | 38 | 2,899 | ||||||||||
Redeemed | (15) | (1,152) | (545) | (43,991) | ||||||||||
85,226 | 6,708,525 | 69 | 6,367 | |||||||||||
R6 Class/Shares Authorized | 110,000,000 | 110,000,000 | ||||||||||||
Sold | 1,991,853 | 168,078,071 | 3,631,693 | 313,904,796 | ||||||||||
Issued in reinvestment of distributions | 525,013 | 48,359,000 | 205,433 | 15,925,151 | ||||||||||
Redeemed | (1,013,060) | (86,195,583) | (3,016,020) | (250,374,643) | ||||||||||
1,503,806 | 130,241,488 | 821,106 | 79,455,304 | |||||||||||
G Class/Shares Authorized | 80,000,000 | 80,000,000 | ||||||||||||
Issued in reinvestment of distributions | 7 | 620 | 2 | 216 | ||||||||||
Net increase (decrease) | 12,534,375 | $ | 1,118,624,568 | (3,113,435) | $ | (280,882,692) |
16
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.
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 | $ | 16,687,804,914 | $ | 528,965,229 | — | ||||||
Short-Term Investments | 528,702 | 36,966,375 | — | ||||||||
$ | 16,688,333,616 | $ | 565,931,604 | — | |||||||
Other Financial Instruments | |||||||||||
Forward Foreign Currency Exchange Contracts | — | $ | 10,464,295 | — | |||||||
Liabilities | |||||||||||
Other Financial Instruments | |||||||||||
Forward Foreign Currency Exchange Contracts | — | $ | 1,049,980 | — |
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 settlement 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 forward foreign currency exchange contract transactions and change in net unrealized appreciation (depreciation) on forward foreign currency exchange contracts, 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 $336,682,120.
17
The value of foreign currency risk derivative instruments as of April 30, 2022, is disclosed on the Statement of Assets and Liabilities as an asset of $10,464,295 in unrealized appreciation on forward foreign currency exchange contracts and a liability of $1,049,980 in unrealized depreciation on forward foreign currency exchange contracts. For the six months ended April 30, 2022, the effect of foreign currency risk derivative instruments on the Statement of Operations was $19,983,875 in net realized gain (loss) on forward foreign currency exchange contract transactions and $3,203,494 in change in net unrealized appreciation (depreciation) on forward foreign currency exchange contracts.
8. Risk Factors
The value of the fund’s shares will go up and down, sometimes rapidly or unpredictably, based on the performance of the securities owned by the fund and other factors generally affecting the securities market. Market risks, including political, regulatory, economic and social developments, can affect the value of the fund’s investments. Natural disasters, public health emergencies, war, terrorism and other unforeseeable events may lead to increased market volatility and may have adverse long-term effects on world economies and markets generally.
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 period end, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $ | 5,604,712,048 | |||
Gross tax appreciation of investments | $ | 11,956,922,013 | |||
Gross tax depreciation of investments | (307,368,841) | ||||
Net tax appreciation (depreciation) of investments | $ | 11,649,553,172 |
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, 2021, the fund had late-year ordinary loss deferrals of $(86,663,062), 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.
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 | |||||||||||||||||||||||||||||||||||||||||||||||
2022(3) | $93.37 | (0.19) | (18.30) | (18.49) | — | (5.94) | (5.94) | $68.94 | (21.14)% | 0.94%(4) | 0.95%(4) | (0.46)%(4) | (0.47)%(4) | 6% | $15,539,504 | ||||||||||||||||||||||||||||||||
2021 | $66.38 | (0.38) | 29.49 | 29.11 | — | (2.12) | (2.12) | $93.37 | 44.70% | 0.95% | 0.95% | (0.47)% | (0.47)% | 8% | $20,198,765 | ||||||||||||||||||||||||||||||||
2020 | $50.27 | (0.21) | 18.55 | 18.34 | — | (2.23) | (2.23) | $66.38 | 37.77% | 0.97% | 0.97% | (0.36)% | (0.36)% | 6% | $14,648,925 | ||||||||||||||||||||||||||||||||
2019 | $47.74 | (0.06) | 5.92 | 5.86 | — | (3.33) | (3.33) | $50.27 | 13.83% | 0.97% | 0.97% | (0.13)% | (0.13)% | 13% | $11,308,500 | ||||||||||||||||||||||||||||||||
2018 | $44.59 | (0.06) | 5.82 | 5.76 | (0.07) | (2.54) | (2.61) | $47.74 | 13.44% | 0.97% | 0.97% | (0.12)% | (0.12)% | 17% | $10,524,969 | ||||||||||||||||||||||||||||||||
2017 | $35.83 | 0.07 | 10.39 | 10.46 | (0.10) | (1.60) | (1.70) | $44.59 | 30.42% | 0.98% | 0.98% | 0.17% | 0.17% | 16% | $9,593,102 | ||||||||||||||||||||||||||||||||
I Class | |||||||||||||||||||||||||||||||||||||||||||||||
2022(3) | $97.72 | (0.11) | (19.23) | (19.34) | — | (5.94) | (5.94) | $72.44 | (21.06)% | 0.74%(4) | 0.75%(4) | (0.26)%(4) | (0.27)%(4) | 6% | $742,789 | ||||||||||||||||||||||||||||||||
2021 | $69.25 | (0.23) | 30.82 | 30.59 | — | (2.12) | (2.12) | $97.72 | 45.00% | 0.75% | 0.75% | (0.27)% | (0.27)% | 8% | $841,255 | ||||||||||||||||||||||||||||||||
2020 | $52.25 | (0.10) | 19.33 | 19.23 | — | (2.23) | (2.23) | $69.25 | 38.05% | 0.77% | 0.77% | (0.16)% | (0.16)% | 6% | $588,451 | ||||||||||||||||||||||||||||||||
2019 | $49.39 | 0.03 | 6.16 | 6.19 | — | (3.33) | (3.33) | $52.25 | 14.05% | 0.77% | 0.77% | 0.07% | 0.07% | 13% | $365,036 | ||||||||||||||||||||||||||||||||
2018 | $46.04 | 0.03 | 6.02 | 6.05 | (0.16) | (2.54) | (2.70) | $49.39 | 13.68% | 0.77% | 0.77% | 0.08% | 0.08% | 17% | $402,938 | ||||||||||||||||||||||||||||||||
2017 | $36.95 | 0.14 | 10.73 | 10.87 | (0.18) | (1.60) | (1.78) | $46.04 | 30.66% | 0.78% | 0.78% | 0.37% | 0.37% | 16% | $322,059 |
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) | |||||||||||||||||||||||||||||||||
Y Class | |||||||||||||||||||||||||||||||||||||||||||||||
2022(3) | $98.36 | (0.05) | (19.37) | (19.42) | — | (5.94) | (5.94) | $73.00 | (21.00)% | 0.59%(4) | 0.60%(4) | (0.11)%(4) | (0.12)%(4) | 6% | $2,905 | ||||||||||||||||||||||||||||||||
2021 | $69.59 | (0.11) | 31.00 | 30.89 | — | (2.12) | (2.12) | $98.36 | 45.21% | 0.60% | 0.60% | (0.12)% | (0.12)% | 8% | $3,099 | ||||||||||||||||||||||||||||||||
2020 | $52.42 | (0.01) | 19.41 | 19.40 | — | (2.23) | (2.23) | $69.59 | 38.26% | 0.62% | 0.62% | (0.01)% | (0.01)% | 6% | $1,708 | ||||||||||||||||||||||||||||||||
2019 | $49.47 | 0.10 | 6.18 | 6.28 | — | (3.33) | (3.33) | $52.42 | 14.22% | 0.62% | 0.62% | 0.22% | 0.22% | 13% | $1,259 | ||||||||||||||||||||||||||||||||
2018 | $46.07 | 0.11 | 6.02 | 6.13 | (0.19) | (2.54) | (2.73) | $49.47 | 13.85% | 0.62% | 0.62% | 0.23% | 0.23% | 17% | $944 | ||||||||||||||||||||||||||||||||
2017(5) | $39.40 | 0.10 | 6.57 | 6.67 | — | — | — | $46.07 | 16.93% | 0.63%(4) | 0.63%(4) | 0.43%(4) | 0.43%(4) | 16%(6) | $6 | ||||||||||||||||||||||||||||||||
A Class | |||||||||||||||||||||||||||||||||||||||||||||||
2022(3) | $87.98 | (0.27) | (17.16) | (17.43) | — | (5.94) | (5.94) | $64.61 | (21.25)% | 1.19%(4) | 1.20%(4) | (0.71)%(4) | (0.72)%(4) | 6% | $193,591 | ||||||||||||||||||||||||||||||||
2021 | $62.81 | (0.56) | 27.85 | 27.29 | — | (2.12) | (2.12) | $87.98 | 44.35% | 1.20% | 1.20% | (0.72)% | (0.72)% | 8% | $256,161 | ||||||||||||||||||||||||||||||||
2020 | $47.79 | (0.34) | 17.59 | 17.25 | — | (2.23) | (2.23) | $62.81 | 37.43% | 1.22% | 1.22% | (0.61)% | (0.61)% | 6% | $167,682 | ||||||||||||||||||||||||||||||||
2019 | $45.67 | (0.17) | 5.62 | 5.45 | — | (3.33) | (3.33) | $47.79 | 13.54% | 1.22% | 1.22% | (0.38)% | (0.38)% | 13% | $116,630 | ||||||||||||||||||||||||||||||||
2018 | $42.80 | (0.17) | 5.58 | 5.41 | — | (2.54) | (2.54) | $45.67 | 13.15% | 1.22% | 1.22% | (0.37)% | (0.37)% | 17% | $102,806 | ||||||||||||||||||||||||||||||||
2017 | $34.45 | (0.04) | 10.00 | 9.96 | (0.01) | (1.60) | (1.61) | $42.80 | 30.10% | 1.23% | 1.23% | (0.08)% | (0.08)% | 16% | $83,130 |
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) | |||||||||||||||||||||||||||||||||
C Class | |||||||||||||||||||||||||||||||||||||||||||||||
2022(3) | $70.74 | (0.44) | (13.53) | (13.97) | — | (5.94) | (5.94) | $50.83 | (21.53)% | 1.94%(4) | 1.95%(4) | (1.46)%(4) | (1.47)%(4) | 6% | $27,085 | ||||||||||||||||||||||||||||||||
2021 | $51.23 | (0.91) | 22.54 | 21.63 | — | (2.12) | (2.12) | $70.74 | 43.28% | 1.95% | 1.95% | (1.47)% | (1.47)% | 8% | $34,751 | ||||||||||||||||||||||||||||||||
2020 | $39.65 | (0.62) | 14.43 | 13.81 | — | (2.23) | (2.23) | $51.23 | 36.39% | 1.97% | 1.97% | (1.36)% | (1.36)% | 6% | $24,320 | ||||||||||||||||||||||||||||||||
2019 | $38.77 | (0.43) | 4.64 | 4.21 | — | (3.33) | (3.33) | $39.65 | 12.69% | 1.97% | 1.97% | (1.13)% | (1.13)% | 13% | $16,676 | ||||||||||||||||||||||||||||||||
2018 | $36.96 | (0.45) | 4.80 | 4.35 | — | (2.54) | (2.54) | $38.77 | 12.32% | 1.97% | 1.97% | (1.12)% | (1.12)% | 17% | $10,700 | ||||||||||||||||||||||||||||||||
2017 | $30.17 | (0.28) | 8.67 | 8.39 | — | (1.60) | (1.60) | $36.96 | 29.12% | 1.98% | 1.98% | (0.83)% | (0.83)% | 16% | $5,359 | ||||||||||||||||||||||||||||||||
R Class | |||||||||||||||||||||||||||||||||||||||||||||||
2022(3) | $84.62 | (0.35) | (16.45) | (16.80) | — | (5.94) | (5.94) | $61.88 | (21.35)% | 1.44%(4) | 1.45%(4) | (0.96)%(4) | (0.97)%(4) | 6% | $35,033 | ||||||||||||||||||||||||||||||||
2021 | $60.62 | (0.72) | 26.84 | 26.12 | — | (2.12) | (2.12) | $84.62 | 44.00% | 1.45% | 1.45% | (0.97)% | (0.97)% | 8% | $41,561 | ||||||||||||||||||||||||||||||||
2020 | $46.31 | (0.46) | 17.00 | 16.54 | — | (2.23) | (2.23) | $60.62 | 37.08% | 1.47% | 1.47% | (0.86)% | (0.86)% | 6% | $26,729 | ||||||||||||||||||||||||||||||||
2019 | $44.47 | (0.28) | 5.45 | 5.17 | — | (3.33) | (3.33) | $46.31 | 13.26% | 1.47% | 1.47% | (0.63)% | (0.63)% | 13% | $17,240 | ||||||||||||||||||||||||||||||||
2018 | $41.84 | (0.28) | 5.45 | 5.17 | — | (2.54) | (2.54) | $44.47 | 12.87% | 1.47% | 1.47% | (0.62)% | (0.62)% | 17% | $15,137 | ||||||||||||||||||||||||||||||||
2017 | $33.79 | (0.12) | 9.77 | 9.65 | — | (1.60) | (1.60) | $41.84 | 29.75% | 1.48% | 1.48% | (0.33)% | (0.33)% | 16% | $11,345 |
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) | |||||||||||||||||||||||||||||||||
R5 Class | |||||||||||||||||||||||||||||||||||||||||||||||
2022(3) | $97.78 | (0.11) | (19.24) | (19.35) | — | (5.94) | (5.94) | $72.49 | (21.06)% | 0.74%(4) | 0.75%(4) | (0.26)%(4) | (0.27)%(4) | 6% | $6,453 | ||||||||||||||||||||||||||||||||
2021 | $69.29 | (0.23) | 30.84 | 30.61 | — | (2.12) | (2.12) | $97.78 | 45.00% | 0.75% | 0.75% | (0.27)% | (0.27)% | 8% | $371 | ||||||||||||||||||||||||||||||||
2020 | $52.28 | (0.12) | 19.36 | 19.24 | — | (2.23) | (2.23) | $69.29 | 38.05% | 0.77% | 0.77% | (0.16)% | (0.16)% | 6% | $258 | ||||||||||||||||||||||||||||||||
2019 | $49.42 | 0.01 | 6.18 | 6.19 | — | (3.33) | (3.33) | $52.28 | 14.04% | 0.77% | 0.77% | 0.07% | 0.07% | 13% | $94 | ||||||||||||||||||||||||||||||||
2018 | $46.04 | 0.04 | 6.02 | 6.06 | (0.14) | (2.54) | (2.68) | $49.42 | 13.69% | 0.77% | 0.77% | 0.08% | 0.08% | 17% | $7 | ||||||||||||||||||||||||||||||||
2017(5) | $39.41 | 0.07 | 6.56 | 6.63 | — | — | — | $46.04 | 16.82% | 0.78%(4) | 0.78%(4) | 0.28%(4) | 0.28%(4) | 16%(6) | $6 | ||||||||||||||||||||||||||||||||
R6 Class | |||||||||||||||||||||||||||||||||||||||||||||||
2022(3) | $98.25 | (0.05) | (19.35) | (19.40) | — | (5.94) | (5.94) | $72.91 | (21.01)% | 0.59%(4) | 0.60%(4) | (0.11)%(4) | (0.12)%(4) | 6% | $703,901 | ||||||||||||||||||||||||||||||||
2021 | $69.51 | (0.11) | 30.97 | 30.86 | — | (2.12) | (2.12) | $98.25 | 45.22% | 0.60% | 0.60% | (0.12)% | (0.12)% | 8% | $800,782 | ||||||||||||||||||||||||||||||||
2020 | $52.36 | —(7) | 19.38 | 19.38 | — | (2.23) | (2.23) | $69.51 | 38.26% | 0.62% | 0.62% | (0.01)% | (0.01)% | 6% | $509,484 | ||||||||||||||||||||||||||||||||
2019 | $49.42 | 0.10 | 6.17 | 6.27 | — | (3.33) | (3.33) | $52.36 | 14.22% | 0.62% | 0.62% | 0.22% | 0.22% | 13% | $461,623 | ||||||||||||||||||||||||||||||||
2018 | $46.07 | 0.10 | 6.02 | 6.12 | (0.23) | (2.54) | (2.77) | $49.42 | 13.85% | 0.62% | 0.62% | 0.23% | 0.23% | 17% | $369,109 | ||||||||||||||||||||||||||||||||
2017 | $36.97 | 0.18 | 10.75 | 10.93 | (0.23) | (1.60) | (1.83) | $46.07 | 30.86% | 0.63% | 0.63% | 0.52% | 0.52% | 16% | $233,309 |
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) | |||||||||||||||||||||||||||||||||
G Class | |||||||||||||||||||||||||||||||||||||||||||||||
2022(3) | $99.61 | 0.21 | (19.67) | (19.46) | — | (5.94) | (5.94) | $74.21 | (20.77)% | 0.00%(4)(8) | 0.60%(4) | 0.48%(4) | (0.12)%(4) | 6% | $8 | ||||||||||||||||||||||||||||||||
2021 | $70.04 | 0.42 | 31.27 | 31.69 | — | (2.12) | (2.12) | $99.61 | 46.08% | 0.00%(8) | 0.60% | 0.48% | (0.12)% | 8% | $10 | ||||||||||||||||||||||||||||||||
2020 | $52.44 | 0.37 | 19.46 | 19.83 | — | (2.23) | (2.23) | $70.04 | 39.09% | 0.01% | 0.62% | 0.60% | (0.01)% | 6% | $7 | ||||||||||||||||||||||||||||||||
2019(9) | $51.28 | 0.10 | 1.06 | 1.16 | — | — | — | $52.44 | 2.26% | 0.00%(4)(8) | 0.62%(4) | 0.78%(4) | 0.16%(4) | 13%(10) | $5 |
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, 2022 (unaudited).
(4)Annualized.
(5)April 10, 2017 (commencement of sale) through October 31, 2017.
(6)Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended October 31, 2017.
(7)Per-share amount was less than $0.005.
(8)Ratio was less than 0.005%.
(9)August 1, 2019 (commencement of sale) through October 31, 2019.
(10)Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended October 31, 2019.
See Notes to Financial Statements.
Liquidity Risk Management Program |
The Fund has adopted a liquidity risk management program (the “program”). The Fund’s Board of Directors (the "Board") has designated American Century Investment Management, Inc. (“ACIM”) as the administrator of the program. Personnel of ACIM or its affiliates conduct the day-to-day operation of the program pursuant to policies and procedures administered by the Program Administrator, including members of ACIM’s Investment Oversight Committee who are members of the ACIM’s Investment Management and Global Analytics departments.
Under the program, ACIM manages the Fund’s liquidity risk, which is the risk that the Fund could not meet shareholder redemption requests without significant dilution of remaining shareholders’ interests in the Fund. This risk is managed by monitoring the degree of liquidity of the Fund’s investments, limiting the amount of the Fund’s illiquid investments, and utilizing various risk management tools and facilities available to the Fund for meeting shareholder redemptions, among other means. ACIM’s process of determining the degree of liquidity of certain Fund’s investments is supported by a third-party liquidity assessment vendor.
The Board reviewed a report prepared by ACIM regarding the operation and effectiveness of the program for the period January 1, 2021 through December 31, 2021. No significant liquidity events impacting the Fund were noted in the report. In addition, ACIM provided its assessment that the program had been effective in managing the Fund’s liquidity risk.
24
Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain retirement accounts 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 and change your withholding percentage for future distributions.
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.
*Some 403(b), 457 and qualified retirement plan distributions may be subject to 20% mandatory withholding, as they 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 American Century Investments’ website at americancentury.com/proxy 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 americancentury.com/proxy. 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 as an exhibit to its reports on Form N-PORT. These portfolio holdings are available on the fund's website at americancentury.com and, upon request, by calling 1-800-345-2021. The fund’s Form N-PORT reports are available on the SEC’s website at sec.gov.
25
Notes |
26
Notes |
27
Notes |
28
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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. | ||||||||
©2022 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-92363 2206 |
(b) None.
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 for semiannual report filings.
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 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. DISCLOSURE OF SECURITIES LENDING ACTIVITIES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 13. 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.
(a)(4) 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/ Patrick Bannigan | ||||||||||
Name: | Patrick Bannigan | ||||||||||
Title: | President | ||||||||||
Date: | June 23, 2022 |
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/ Patrick Bannigan | |||||||
Name: | Patrick Bannigan | |||||||
Title: | President | |||||||
(principal executive officer) | ||||||||
Date: | June 23, 2022 |
By: | /s/ R. Wes Campbell | |||||||
Name: | R. Wes Campbell | |||||||
Title: | Treasurer and | |||||||
Chief Financial Officer | ||||||||
(principal financial officer) | ||||||||
Date: | June 23, 2022 |