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 811-21591 --------------------------------------------- AMERICAN CENTURY ASSET ALLOCATION PORTFOLIOS, INC. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in charter) 4500 MAIN STREET, KANSAS CITY, MISSOURI 64111 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip code) CHARLES A. ETHERINGTON, 4500 MAIN STREET, KANSAS CITY, MISSOURI 64111 - -------------------------------------------------------------------------------- (Name and address of agent for service) Registrant's telephone number, including area code: 816-531-5575 ---------------------------- Date of fiscal year end: 07-31 -------------------------------------------------- Date of reporting period: 01-31-2007 --------------------------------------------------
ITEM 1. REPORTS TO STOCKHOLDERS. [front cover] [american century investments livestrong portfolios logo and text logo] LIVESTRONG(TM) PORTFOLIOS FROM AMERICAN CENTURY INVESTMENTS Semiannual Report LIVESTRONG Income Portfolio LIVESTRONG 2015 Portfolio LIVESTRONG 2025 Portfolio LIVESTRONG 2035 Portfolio LIVESTRONG 2045 Portfolio [photo of man] January 31, 2007 OUR MESSAGE TO YOU We have the privilege of providing you with the semiannual report for the LIVESTRONG(TM) Portfolios from American Century Investments for the six months ended January 31, 2007. We've gathered this information to help you monitor your investment. Another resource is our website, americancentury.com, where we post company news, portfolio commentaries, investment views, and other communications about portfolio strategy, personal finance, government policy, and the markets. Speaking of company news, American Century announced the following leadership changes. Chief Investment Officer Mark Mallon retired in the first quarter of 2007, after nearly a decade at American Century. Effective January 1, 2007, former International Equity CIO Enrique Chang became CIO with responsibilities for the entire investment management operation. Prior to joining American Century in 2006, Enrique worked at Munder Capital Management, serving the last four years as president and CIO. Before that, he held a series of senior investment management positions at Vantage Global Advisors, J. & W. Seligman and Co. and General Reinsurance Corp. In January 2007, President and Chief Executive Officer Bill Lyons announced his retirement after nearly 20 years at American Century. Chief Financial Officer Jonathan Thomas was appointed president and CEO effective March 1, 2007. Since 2005, Jonathan has overseen American Century's financial area, with additional responsibilities in purchasing, facilities, real estate, information technology, operations, and human resources. Before joining American Century, Jonathan was a managing director and global chief operating officer of Morgan Stanley's investment division, and worked in senior leadership roles for Bank of America, Boston Financial Services, and Fidelity Investments. We wish to thank Mark and Bill for their many years of distinguished service -- American Century is a stronger company as a result of their hard work. And we firmly believe their roles in our firm are transitioning to two talented, committed, and experienced top executives. [photo of James E. Stowers III and James E. Stowers, Jr.] /s/James E. Stowers, Jr. James E. Stowers, Jr. FOUNDER AND CO-CHAIRMAN OF THE BOARD AMERICAN CENTURY COMPANIES, INC. /s/James E. Stowers III James E. Stowers III VICE CHAIRMAN OF THE BOARD AMERICAN CENTURY COMPANIES, INC. TABLE OF CONTENTS LIVESTRONG(TM) PORTFOLIOS FROM AMERICAN CENTURY INVESTMENTS Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Portfolio Commentary. . . . . . . . . . . . . . . . . . . . . . . . . 7 Market Index Total Returns . . . . . . . . . . . . . . . . . . . . . 7 Underlying Fund Allocations. . . . . . . . . . . . . . . . . . . . . 8 Types of Investments in LIVESTRONG Portfolios. . . . . . . . . . . . 9 Shareholder Fee Examples. . . . . . . . . . . . . . . . . . . . . . . 11 Schedule of Investments . . . . . . . . . . . . . . . . . . . . . . . 15 FINANCIAL STATEMENTS Statement of Assets and Liabilities . . . . . . . . . . . . . . . . . 18 Statement of Operations . . . . . . . . . . . . . . . . . . . . . . . 20 Statement of Changes in Net Assets. . . . . . . . . . . . . . . . . . 22 Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . 25 Financial Highlights. . . . . . . . . . . . . . . . . . . . . . . . . 37 OTHER INFORMATION Share Class Information . . . . . . . . . . . . . . . . . . . . . . . 57 Additional Information. . . . . . . . . . . . . . . . . . . . . . . . 58 Index Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . 59 American Century Investment Services, Inc., has entered into an agreement with the Lance Armstrong Foundation for rights to use the LIVESTRONG name. LIVESTRONG is a trademark of the Lance Armstrong Foundation. For more information about the foundation, visit livestrong.org. The opinions expressed in the Portfolio Commentary reflect those of the portfolio management team as of the date of the report, and do not necessarily represent the opinions of American Century or any other person in the American Century organization. Any such opinions are subject to change at any time based upon market or other conditions and American Century 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 funds are based on numerous factors, may not be relied upon as an indication of trading intent on behalf of any American Century 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 by third party vendors. To the best of American Century's knowledge, such information is accurate at the time of printing. PERFORMANCE LIVESTRONG Portfolios Total Returns as of January 31, 2007 Average Annual Returns Since Inception 6 months(1) 1 year Inception Date LIVESTRONG INCOME PORTFOLIO INVESTOR CLASS 7.64% 8.18% 7.78% 8/31/04 Institutional Class 7.75% 8.40% 7.99% 8/31/04 Advisor Class 7.41% 7.91% 7.49% 8/31/04 R Class 7.38% 7.65% 7.24% 8/31/04 LIVESTRONG 2015 PORTFOLIO INVESTOR CLASS 8.88% 9.07% 10.18% 8/31/04 Institutional Class 8.99% 9.29% 10.38% 8/31/04 Advisor Class 8.71% 8.71% 9.89% 8/31/04 R Class 8.53% 8.43% 9.62% 8/31/04 LIVESTRONG 2025 PORTFOLIO INVESTOR CLASS 10.37% 9.99% 12.24% 8/31/04 Institutional Class 10.40% 10.21% 12.44% 8/31/04 Advisor Class 10.19% 9.71% 11.96% 8/31/04 R Class 10.11% 9.53% 11.70% 8/31/04 RUSSELL 3000 INDEX(2) 14.33% 14.11% 14.93% -- CITIGROUP US BROAD INVESTMENT-GRADE BOND INDEX(2)(3) 3.67% 4.32% 3.37% -- LEHMAN BROTHERS U.S. AGGREGATE INDEX(2)(3) 3.65% 4.28% 3.29% -- (1) Total returns for periods less than one year are not annualized. (2) Data provided by Lipper Inc. -- A Reuters Company. © 2007 Reuters. All rights reserved. Any copying, republication or redistribution of Lipper content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Lipper. Lipper shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon. The data contained herein has been obtained from company reports, financial reporting services, periodicals and other resources believed to be reliable. Although carefully verified, data on compilations is not guaranteed by Lipper and may be incomplete. No offer or solicitations to buy or sell any of the securities herein is being made by Lipper. (3) In September of 2006, the LIVESTRONG Portfolios changed their fixed-income benchmark from the Lehman Brothers U.S. Aggregate Index to the Citigroup US Broad Investment-Grade Bond Index. The fund's investment advisor believes this index better represents the fund's portfolio composition. The Russell 3000 Index represents approximately 98% of the investable U.S. equity market and provides a broad measure of equity performance. The Lehman Brothers U.S. Aggregate Index and the Citigroup US Broad Investment-Grade Bond Index represent the U.S. investment-grade fixed-rate bond market and provides a broad measure of bond market performance. Performance for these indices is provided for reference only. Neither index is intended to represent the composition of the portfolio, which invests in a mix of equity and fixed-income securities. (See the Schedule of Investments for the LIVESTRONG Portfolio's asset allocations as of January 31, 2007.) Data presented reflect past performance. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance shown. Investment return and principal value will fluctuate, and redemption value may be more or less than original cost. To obtain performance data current to the most recent month end, please call 1-800-345-2021 or visit americancentury.com. The performance of LIVESTRONG Portfolios is dependent on the performance of their underlying American Century funds, and will assume the risks associated with these funds. The risks will vary according to each LIVESTRONG Portfolio's asset allocation, and a fund with a later target date is expected to be more volatile than one with an earlier target date. Data assumes reinvestment of dividends and capital gains, and none of the charts reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Returns for the indices are provided for comparison. The fund's total returns include operating expenses (such as administrative fees) that reduce returns, while the total returns of the indices do not. - ------ 2 LIVESTRONG Portfolios Total Returns as of January 31, 2007 Average Annual Returns Since Inception 6 months(1) 1 year Inception Date LIVESTRONG 2035 PORTFOLIO INVESTOR CLASS 12.04% 11.38% 14.24% 8/31/04 Institutional Class 12.15% 11.68% 14.49% 8/31/04 Advisor Class 11.94% 11.10% 13.97% 8/31/04 R Class 11.76% 10.82% 13.70% 8/31/04 LIVESTRONG 2045 PORTFOLIO INVESTOR CLASS 12.94% 12.09% 15.23% 8/31/04 Institutional Class 12.97% 12.22% 15.44% 8/31/04 Advisor Class 12.84% 11.81% 14.96% 8/31/04 R Class 12.57% 11.45% 14.64% 8/31/04 RUSSELL 3000 INDEX(2) 14.33% 14.11% 14.93% -- CITIGROUP US BROAD INVESTMENT-GRADE BOND INDEX(2)(3) 3.67% 4.32% 3.37% -- LEHMAN BROTHERS U.S. AGGREGATE INDEX(2)(3) 3.65% 4.28% 3.29% -- (1) Total returns for periods less than one year are not annualized. (2) Data provided by Lipper Inc. -- A Reuters Company. © 2007 Reuters. All rights reserved. Any copying, republication or redistribution of Lipper content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Lipper. Lipper shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon. The data contained herein has been obtained from company reports, financial reporting services, periodicals and other resources believed to be reliable. Although carefully verified, data on compilations is not guaranteed by Lipper and may be incomplete. No offer or solicitations to buy or sell any of the securities herein is being made by Lipper. (3) In September of 2006, the LIVESTRONG Portfolios changed their fixed-income benchmark from the Lehman Brothers U.S. Aggregate Index to the Citigroup US Broad Investment-Grade Bond Index. The fund's investment advisor believes this index better represents the fund's portfolio composition. The Russell 3000 Index represents approximately 98% of the investable U.S. equity market and provides a broad measure of equity performance. The Lehman Brothers U.S. Aggregate Index and the Citigroup US Broad Investment-Grade Bond Index represent the U.S. investment-grade fixed-rate bond market and provides a broad measure of bond market performance. Performance for these indices is provided for reference only. Neither index is intended to represent the composition of the portfolio, which invests in a mix of equity and fixed-income securities. (See the Schedule of Investments for the LIVESTRONG Portfolio's asset allocations as of January 31, 2007.) Data presented reflect past performance. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance shown. Investment return and principal value will fluctuate, and redemption value may be more or less than original cost. To obtain performance data current to the most recent month end, please call 1-800-345-2021 or visit americancentury.com. The performance of LIVESTRONG Portfolios is dependent on the performance of their underlying American Century funds, and will assume the risks associated with these funds. The risks will vary according to each LIVESTRONG Portfolio's asset allocation, and a fund with a later target date is expected to be more volatile than one with an earlier target date. Data assumes reinvestment of dividends and capital gains, and none of the charts reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Returns for the indices are provided for comparison. The fund's total returns include operating expenses (such as administrative fees) that reduce returns, while the total returns of the indices do not. - ------ 3 LIVESTRONG Portfolios
Growth of $10,000 Over Life of LIVESTRONG Income Portfolio -- Investor Class
$10,000 investment made August 31, 2004
![](https://capedge.com/proxy/N-CSRS/0001293210-07-000011/growthlivestrongincome.gif)
*From 8/31/04, the Investor Class's inception date. Not annualized.
Growth of $10,000 Over Life of LIVESTRONG 2015 Portfolio -- Investor Class
$10,000 investment made August 31, 2004
![](https://capedge.com/proxy/N-CSRS/0001293210-07-000011/growthlivestrong2015.gif)
*From 8/31/04, the Investor Class's inception date. Not annualized. Data presented reflect past performance. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance shown. Investment return and principal value will fluctuate, and redemption value may be more or less than original cost. To obtain performance data current to the most recent month end, please call 1-800-345-2021 or visit americancentury.com. The performance of LIVESTRONG Portfolios is dependent on the performance of their underlying American Century funds, and will assume the risks associated with these funds. The risks will vary according to each LIVESTRONG Portfolio's asset allocation, and a fund with a later target date is expected to be more volatile than one with an earlier target date. Data assumes reinvestment of dividends and capital gains, and none of the charts reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Returns for the indices are provided for comparison. The fund's total returns include operating expenses (such as administrative fees) that reduce returns, while the total returns of the indices do not. - ------ 4 LIVESTRONG Portfolios
Growth of $10,000 Over Life of LIVESTRONG 2025 Portfolio -- Investor Class
$10,000 investment made August 31, 2004
![](https://capedge.com/proxy/N-CSRS/0001293210-07-000011/growthlivestrong2025.gif)
*From 8/31/04, the Investor Class's inception date. Not annualized.
Growth of $10,000 Over Life of LIVESTRONG 2035 Portfolio -- Investor Class
$10,000 investment made August 31, 2004
![](https://capedge.com/proxy/N-CSRS/0001293210-07-000011/growthlivestrong2035.gif)
*From 8/31/04, the Investor Class's inception date. Not annualized. Data presented reflect past performance. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance shown. Investment return and principal value will fluctuate, and redemption value may be more or less than original cost. To obtain performance data current to the most recent month end, please call 1-800-345-2021 or visit americancentury.com. The performance of LIVESTRONG Portfolios is dependent on the performance of their underlying American Century funds, and will assume the risks associated with these funds. The risks will vary according to each LIVESTRONG Portfolio's asset allocation, and a fund with a later target date is expected to be more volatile than one with an earlier target date. Data assumes reinvestment of dividends and capital gains, and none of the charts reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Returns for the indices are provided for comparison. The fund's total returns include operating expenses (such as administrative fees) that reduce returns, while the total returns of the indices do not. - ------ 5 LIVESTRONG Portfolios
Growth of $10,000 Over Life of LIVESTRONG 2045 Portfolio -- Investor Class
$10,000 investment made August 31, 2004
![](https://capedge.com/proxy/N-CSRS/0001293210-07-000011/growthlivestrong2045.gif)
*From 8/31/04, the Investor Class's inception date. Not annualized. One-Year Returns Over Life of Class Periods ended January 31 2005* 2006 2007 LIVESTRONG Income Portfolio -- Investor Class 5.00% 5.54% 8.18% LIVESTRONG 2015 Portfolio -- Investor Class 6.80% 8.55% 9.07% LIVESTRONG 2025 Portfolio -- Investor Class 8.00% 11.30% 9.99% LIVESTRONG 2035 Portfolio -- Investor Class 9.33% 13.33% 11.38% LIVESTRONG 2045 Portfolio -- Investor Class 10.07% 14.20% 12.09% Russell 3000 Index 8.87% 12.67% 14.11% Citigroup US Broad Investment-Grade Bond Index 1.91% 1.91% 4.32% Lehman Brothers U.S. Aggregate Index 1.86% 1.80% 4.28% *From 8/31/04, the Investor Class's inception date. Not annualized. Data presented reflect past performance. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance shown. Investment return and principal value will fluctuate, and redemption value may be more or less than original cost. To obtain performance data current to the most recent month end, please call 1-800-345-2021 or visit americancentury.com. The performance of LIVESTRONG Portfolios is dependent on the performance of their underlying American Century funds, and will assume the risks associated with these funds. The risks will vary according to each LIVESTRONG Portfolio's asset allocation, and a fund with a later target date is expected to be more volatile than one with an earlier target date. Data assumes reinvestment of dividends and capital gains, and none of the charts reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Returns for the indices are provided for comparison. The fund's total returns include operating expenses (such as administrative fees) that reduce returns, while the total returns of the indices do not. - ------ 6 PORTFOLIO COMMENTARY LIVESTRONG Portfolios Portfolio Managers: Jeff Tyler and Irina Torelli PERFORMANCE SUMMARY All five LIVESTRONG Portfolios posted positive returns for the six months ended January 31, 2007. Returns ranged from 7.64%* for the LIVESTRONG Income Portfolio to 12.94% for LIVESTRONG 2045 Portfolio (see pages 2-6 for more detailed performance information). LIVESTRONG Portfolios' results reflected solid gains for stocks and bonds, both domestically and internationally. Because of the Portfolios' strategic exposure to the various asset classes, a review of the financial markets helps explain much of their performance. STOCK MARKET REVIEW U.S. stocks rallied sharply during the six-month period, posting double-digit gains. Despite a modest slowdown in the economy, corporate profit growth remained robust--as of January 31, 2007, the companies in the S&P 500 were on track to deliver double-digit earnings growth in the fourth quarter of 2006, extending a streak that dates back to the second quarter of 2002. Heavy merger and acquisition activity, driven primarily by private equity firms awash in cash, also contributed to the stock market's gains. As the table to the right shows, mid-cap stocks produced the best returns (based on the Russell indices), while small-cap issues outpaced their large-cap counterparts. Value stocks generally outperformed growth-oriented shares, with the exception of the large-cap segment of the market--large-cap growth stocks came out ahead, ending an extended period of underperformance versus large-cap value. Foreign stocks also enjoyed double-digit gains during the period. Emerging markets were the best performers, led by Latin America. Among developed markets, the Pacific Rim countries posted the highest returns, followed by European bourses. Japan was the laggard, though it too registered a positive return for the six months. Market Index Total Returns For the six months ended January 31, 2007 U.S. STOCKS Russell 1000 (Large-Cap)(1) 14.28% Russell Midcap(1) 16.20% Russell 2000 (Small-Cap)(1) 14.95% INTERNATIONAL STOCKS MSCI EAFE 14.33% MSCI Emerging Markets 20.45% U.S. FIXED INCOME Lehman Brothers U.S. Aggregate(1) 3.65% 10-Year U.S. Treasury Note 3.27% 90-Day U.S. Treasury Bill(1) 2.45% INTERNATIONAL BONDS Citigroup Non-U.S. World Government Bond 0.58% (1) Data provided by Lipper Inc. -- A Reuters Company. © 2007 Reuters. All rights reserved. Any copying, republication or redistribution of Lipper content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Lipper. Lipper shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon. The data contained herein has been obtained from company reports, financial reporting services, periodicals and other resources believed to be reliable. Although carefully verified, data on compilations is not guaranteed by Lipper and may be incomplete. No offer or solicitations to buy or sell any of the securities herein is being made by Lipper. *All LIVESTRONG Portfolio returns referenced in this commentary are for Investor Class shares. Total returns for periods less than one year are not annualized. - ------ 7 LIVESTRONG Portfolios BOND MARKET REVIEW U.S. bonds advanced during the period, but their gains were more modest than those in the stock market (see table on previous page). The bond market rallied early in the period amid evidence of slowing economic growth and the Federal Reserve's shift to a stable interest rate policy. After raising short-term interest rates 17 times between June 2004 and June 2006, the Fed held rates steady at 5.25% throughout the six-month period. Bonds surrendered some of their gains in the last two months as the economy displayed some unexpected resiliency. From a sector perspective, high-yield corporate bonds posted the highest returns, benefiting from strong investor demand for yield. Investment-grade corporate bonds and mortgage-backed securities also performed well, while Treasury and government agency bonds lagged. Money market rates were little changed during the period, reflecting the Fed's stable interest rate policy. Underlying Fund Allocations -- Institutional Class as a % of net assets as of January 31, 2007 LIVESTRONG LIVESTRONG LIVESTRONG LIVESTRONG LIVESTRONG Income 2015 2025 2035 2045 Portfolio Portfolio Portfolio Portfolio Portfolio NT Equity Growth Fund 13.3% 12.8% 12.7% 14.2% 15.1% NT Growth Fund 6.6% 8.4% 11.9% 14.1% 15.1% NT Large Company Value Fund 11.2% 11.4% 12.4% 14.1% 15.3% NT Mid Cap Value Fund 4.0% 5.3% 5.2% 6.9% 7.4% NT Small Company Fund 2.1% 2.0% 3.9% 4.1% 4.8% NT Vista Fund 2.6% 4.2% 5.2% 7.2% 7.7% Real Estate Fund 0.9% 1.3% 1.8% 2.2% 2.7% NT Emerging Markets Fund -- 1.8% 3.1% 4.9% 6.4% NT International Growth Fund 5.2% 6.8% 9.3% 10.2% 9.9% High-Yield Fund 3.8% 3.5% 3.0% 2.1% 1.6% Inflation-Adjusted Bond Fund 7.4% 7.0% 5.7% 4.1% 3.1% NT Diversified Bond Fund 26.1% 24.3% 19.9% 14.8% 10.8% International Bond Fund 6.6% 5.1% 0.9% -- -- Premium Money Market Fund* 10.0% 6.0% 4.9% 1.0% -- Other Assets and Liabilities 0.2% 0.1% 0.1% 0.1% 0.1% *Investor Class - ------ 8 LIVESTRONG Portfolios Foreign bonds gained ground but trailed the domestic bond market. Improving economic growth, particularly in Europe and developing countries, contributed to the underperformance of international bonds. The U.S. dollar's impact was mixed--the greenback rose nearly 6% versus the Japanese yen during the period but fell by just under 2% against the euro. PORTFOLIO STRATEGY Each LIVESTRONG Portfolio is a "fund of funds" that invests in other American Century mutual funds to achieve its investment objective and target asset allocation. (See page 8 for the specific underlying fund allocations for each LIVESTRONG Portfolio.) Every underlying fund produced positive results during the period. The top performer was Emerging Markets, reflecting the healthy gains of stocks located in developing countries. International Growth also posted a strong return, while Real Estate delivered the best results among domestic equity funds. Mirroring the broader market, the value funds in LIVESTRONG Portfolios generally performed better than the growth-oriented funds. Unlike the market indexes, however, LIVESTRONG Portfolios' large-cap stock Types of Investments in LIVESTRONG Portfolios as a % of net assets as of January 31, 2007 LIVESTRONG LIVESTRONG LIVESTRONG LIVESTRONG LIVESTRONG Income 2015 2025 2035 2045 Portfolio Portfolio Portfolio Portfolio Portfolio EQUITY Large Cap Blend 13.3% 12.8% 12.7% 14.2% 15.1% Large Cap Value 11.2% 11.4% 12.4% 14.1% 15.3% Large Cap Growth 6.6% 8.4% 11.9% 14.1% 15.1% Large Cap Blend -- International 5.2% 6.8% 9.3% 10.2% 9.9% Large Cap Growth -- International -- 1.8% 3.1% 4.9% 6.4% Mid Cap Growth 2.6% 4.2% 5.2% 7.2% 7.7% Mid Cap Value 4.0% 5.3% 5.2% 6.9% 7.4% Small Cap Value 2.1% 2.0% 3.9% 4.1% 4.8% Real Estate 0.9% 1.3% 1.8% 2.2% 2.7% ---------- ---------- ---------- ---------- ---------- TOTAL EQUITY 45.9% 54.0% 65.5% 77.9% 84.4% ---------- ---------- ---------- ---------- ---------- FIXED INCOME Investment Grade 33.5% 31.3% 25.6% 18.9% 13.9% High-Yield 3.8% 3.5% 3.0% 2.1% 1.6% International 6.6% 5.1% 0.9% -- -- ---------- ---------- ---------- ---------- ---------- TOTAL FIXED-INCOME 43.9% 39.9% 29.5% 21.0% 15.5% ---------- ---------- ---------- ---------- ---------- MONEY MARKET 10.0% 6.0% 4.9% 1.0% -- OTHER ASSETS AND LIABILITIES 0.2% 0.1% 0.1% 0.1% 0.1% - ------ 9 LIVESTRONG Portfolios funds, including Growth and Large Company Value, outperformed the smaller-cap funds, such as Vista and Small Company. The fixed-income funds reflected the more modest returns of the bond market. High-Yield posted the best results, while International Bond registered the smallest gain. Prime Money Market's performance was in line with that of the three-month U.S. Treasury bill. STARTING POINT FOR THE NEXT REPORT PERIOD We will continue to adjust each LIVESTRONG Portfolio's target asset mix annually (with the exception of LIVESTRONG Income, which remains static). In general, the allocation to stocks will decrease and the allocations to bonds and cash will increase each year until the target year is reached. At that point, the asset mix will become fixed and match that of LIVESTRONG Income. - ------ 10 SHAREHOLDER FEE EXAMPLES (UNAUDITED) 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. As a shareholder in the underlying American Century funds, your fund will indirectly bear its pro rata share of the expenses incurred by the underlying funds. These expenses are not included in the fund's annualized expense ratio or the expenses paid during the period. These expenses are, however, included in the effective expenses paid during the period. The example is based on an investment of $1,000 made at the beginning of the period and held for the entire period from August 1, 2006 to January 31, 2007. 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 fund, or Institutional Class shares of the American Century Diversified Bond Fund, in an American Century account (i.e., not a financial intermediary or retirement plan account), American Century may charge you a $12.50 semiannual account maintenance fee if the value of those shares is less than $10,000. We will redeem shares automatically in one of your accounts to pay the $12.50 fee. In determining your total eligible investment amount, we will include your investments in all PERSONAL ACCOUNTS (including American Century 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 Brokerage accounts, you are currently not subject to this fee. We will not charge the fee as long as you choose to manage your accounts exclusively online. 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. - ------ 11 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. LIVESTRONG Income Portfolio Shareholder Fee Example Effective Expenses Expenses Beginning Ending Paid During Paid During Effective Account Account Period(1) Annualized Period(2) Annualized Value Value 8/1/06 - Expense 8/1/06 - Expense 8/1/06 1/31/07 1/31/07 Ratio(1) 1/31/07 Ratio(2) ACTUAL Investor Class $1,000 $1,076.40 $1.05 0.20% $3.93 0.75% Institutional Class $1,000 $1,077.50 $0.00 0.00%(3) $2.88 0.55% Advisor Class $1,000 $1,074.10 $2.35 0.45% $5.23 1.00% R Class $1,000 $1,073.80 $3.66 0.70% $6.53 1.25% HYPOTHETICAL Investor Class $1,000 $1,024.20 $1.02 0.20% $3.82 0.75% Institutional Class $1,000 $1,025.21 $0.00 0.00%(3) $2.80 0.55% Advisor Class $1,000 $1,022.94 $2.29 0.45% $5.09 1.00% R Class $1,000 $1,021.68 $3.57 0.70% $6.36 1.25% (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 184, the number of days in the most recent fiscal half-year, divided by 365, to reflect the one-half year period. The fees and expenses of the underlying American Century funds in which the fund invests are not included in the class's annualized expense ratio. (2) Effective expenses reflect the sum of expenses borne directly by the class plus the fund's pro rata share of the weighted average expense ratio of the underlying funds in which it invests. The effective annualized expense ratio combines the class's annualized expense ratio and the annualized weighted average expense ratio of the underlying funds. The annualized weighted average expense ratio of the underlying funds for the one-half year period reflects the actual expense ratio of each underlying fund from its most recent shareholder report, annualized and weighted for the fund's relative average investment therein during the period. (3) Other expenses, which include the fees and expenses of the fund's independent directors and its legal counsel, as well as interest, did not exceed 0.005%. - ------ 12 LIVESTRONG 2015 Portfolio Shareholder Fee Example Effective Expenses Expenses Beginning Ending Paid During Paid During Effective Account Account Period(1) Annualized Period(2) Annualized Value Value 8/1/06 - Expense 8/1/06 - Expense 8/1/06 1/31/07 1/31/07 Ratio(1) 1/31/07 Ratio(2) ACTUAL Investor Class $1,000 $1,088.80 $1.05 0.20% $4.26 0.81% Institutional Class $1,000 $1,089.90 $0.00 0.00%(3) $3.21 0.61% Advisor Class $1,000 $1,087.10 $2.37 0.45% $5.58 1.06% R Class $1,000 $1,085.30 $3.68 0.70% $6.89 1.31% HYPOTHETICAL Investor Class $1,000 $1,024.20 $1.02 0.20% $4.13 0.81% Institutional Class $1,000 $1,025.21 $0.00 0.00%(3) $3.11 0.61% Advisor Class $1,000 $1,022.94 $2.29 0.45% $5.40 1.06% R Class $1,000 $1,021.68 $3.57 0.70% $6.67 1.31% LIVESTRONG 2025 Portfolio Shareholder Fee Example ACTUAL Investor Class $1,000 $1,103.70 $1.06 0.20% $4.56 0.86% Institutional Class $1,000 $1,104.00 $0.00 0.00%(3) $3.50 0.66% Advisor Class $1,000 $1,101.90 $2.38 0.45% $5.88 1.11% R Class $1,000 $1,101.10 $3.71 0.70% $7.20 1.36% HYPOTHETICAL Investor Class $1,000 $1,024.20 $1.02 0.20% $4.38 0.86% Institutional Class $1,000 $1,025.21 $0.00 0.00%(3) $3.36 0.66% Advisor Class $1,000 $1,022.94 $2.29 0.45% $5.65 1.11% R Class $1,000 $1,021.68 $3.57 0.70% $6.92 1.36% (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 184, the number of days in the most recent fiscal half-year, divided by 365, to reflect the one-half year period. The fees and expenses of the underlying American Century funds in which the fund invests are not included in the class's annualized expense ratio. (2) Effective expenses reflect the sum of expenses borne directly by the class plus the fund's pro rata share of the weighted average expense ratio of the underlying funds in which it invests. The effective annualized expense ratio combines the class's annualized expense ratio and the annualized weighted average expense ratio of the underlying funds. The annualized weighted average expense ratio of the underlying funds for the one-half year period reflects the actual expense ratio of each underlying fund from its most recent shareholder report, annualized and weighted for the fund's relative average investment therein during the period. (3) Other expenses, which include the fees and expenses of the fund's independent directors and its legal counsel, as well as interest, did not exceed 0.005%. - ------ 13 LIVESTRONG 2035 Portfolio Shareholder Fee Example Effective Expenses Expenses Beginning Ending Paid During Paid During Effective Account Account Period(1) Annualized Period(2) Annualized Value Value 8/1/06 - Expense 8/1/06 - Expense 8/1/06 1/31/07 1/31/07 Ratio(1) 1/31/07 Ratio(2) ACTUAL Investor Class $1,000 $1,120.40 $1.07 0.20% $4.86 0.91% Institutional Class $1,000 $1,121.50 $0.00 0.00%(3) $3.80 0.71% Advisor Class $1,000 $1,119.40 $2.40 0.45% $6.20 1.16% R Class $1,000 $1,117.60 $3.74 0.70% $7.53 1.41% HYPOTHETICAL Investor Class $1,000 $1,024.20 $1.02 0.20% $4.63 0.91% Institutional Class $1,000 $1,025.21 $0.00 0.00%(3) $3.62 0.71% Advisor Class $1,000 $1,022.94 $2.29 0.45% $5.90 1.16% R Class $1,000 $1,021.68 $3.57 0.70% $7.17 1.41% LIVESTRONG 2045 Portfolio Shareholder Fee Example ACTUAL Investor Class $1,000 $1,129.40 $1.07 0.20% $5.05 0.94% Institutional Class $1,000 $1,129.70 $0.00 0.00%(3) $3.97 0.74% Advisor Class $1,000 $1,128.40 $2.41 0.45% $6.38 1.19% R Class $1,000 $1,125.70 $3.75 0.70% $7.72 1.44% HYPOTHETICAL Investor Class $1,000 $1,024.20 $1.02 0.20% $4.79 0.94% Institutional Class $1,000 $1,025.21 $0.00 0.00%(3) $3.77 0.74% Advisor Class $1,000 $1,022.94 $2.29 0.45% $6.06 1.19% R Class $1,000 $1,021.68 $3.57 0.70% $7.32 1.44% (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 184, the number of days in the most recent fiscal half-year, divided by 365, to reflect the one-half year period. The fees and expenses of the underlying American Century funds in which the fund invests are not included in the class's annualized expense ratio. (2) Effective expenses reflect the sum of expenses borne directly by the class plus the fund's pro rata share of the weighted average expense ratio of the underlying funds in which it invests. The effective annualized expense ratio combines the class's annualized expense ratio and the annualized weighted average expense ratio of the underlying funds. The annualized weighted average expense ratio of the underlying funds for the one-half year period reflects the actual expense ratio of each underlying fund from its most recent shareholder report, annualized and weighted for the fund's relative average investment therein during the period. (3) Other expenses, which include the fees and expenses of the fund's independent directors and its legal counsel, as well as interest, did not exceed 0.005%. - ------ 14 SCHEDULE OF INVESTMENTS LIVESTRONG Portfolios JANUARY 31, 2007 (UNAUDITED) Shares Value LIVESTRONG Income Portfolio Mutual Funds(1) -- 99.8% DOMESTIC EQUITY FUNDS -- 40.7% 572,765 NT Equity Growth Fund Institutional Class $ 6,329,053 287,319 NT Growth Fund Institutional Class 3,149,016 474,368 NT Large Company Value Fund Institutional Class 5,336,640 173,051 NT Mid Cap Value Fund Institutional Class 1,913,944 97,186 NT Small Company Fund Institutional Class 978,663 124,985 NT Vista Fund Institutional Class(2) 1,234,852 13,798 Real Estate Fund Institutional Class 448,987 -------------- 19,391,155 -------------- DOMESTIC FIXED INCOME FUNDS -- 37.3% 282,067 High-Yield Fund Institutional Class 1,816,511 333,564 Inflation-Adjusted Bond Fund Institutional Class 3,532,443 1,228,831 NT Diversified Bond Fund Institutional Class 12,411,200 -------------- 17,760,154 -------------- MONEY MARKET FUNDS -- 10.0% 4,767,570 Premium Money Market Fund Investor Class 4,767,570 -------------- INTERNATIONAL FIXED INCOME FUNDS -- 6.6% 231,484 International Bond Fund Institutional Class 3,141,238 -------------- INTERNATIONAL EQUITY FUNDS -- 5.2% 228,556 NT International Growth Fund Institutional Class 2,468,405 -------------- TOTAL INVESTMENT SECURITIES -- 99.8% (Cost $45,479,406) 47,528,522 -------------- OTHER ASSETS AND LIABILITIES -- 0.2% 73,015 -------------- TOTAL NET ASSETS -- 100.0% $47,601,537 ============== Notes to Schedule of Investments (1) Investments are funds within the American Century family of funds, of which certain funds may be deemed to be under common control because of the same board of directors. (2) Non-income producing. See Notes to Financial Statements. Shares Value LIVESTRONG 2015 Portfolio Mutual Funds(1) -- 99.9% DOMESTIC EQUITY FUNDS -- 45.4% 1,677,960 NT Equity Growth Fund Institutional Class $ 18,541,459 1,110,366 NT Growth Fund Institutional Class 12,169,611 1,474,107 NT Large Company Value Fund Institutional Class 16,583,705 690,541 NT Mid Cap Value Fund Institutional Class 7,637,383 296,319 NT Small Company Fund Institutional Class 2,983,932 610,464 NT Vista Fund Institutional Class(2) 6,031,384 58,887 Real Estate Fund Institutional Class 1,916,183 -------------- 65,863,657 -------------- DOMESTIC FIXED INCOME FUNDS -- 34.8% 797,275 High-Yield Fund Institutional Class 5,134,451 949,591 Inflation-Adjusted Bond Fund Institutional Class 10,056,169 3,492,938 NT Diversified Bond Fund Institutional Class 35,278,663 -------------- 50,469,283 -------------- INTERNATIONAL EQUITY FUNDS -- 8.6% 228,823 NT Emerging Markets Fund Institutional Class 2,633,753 904,338 NT International Growth Fund Institutional Class 9,766,850 -------------- 12,400,603 -------------- MONEY MARKET FUNDS -- 6.0% 8,640,246 Premium Money Market Fund Investor Class 8,640,246 -------------- INTERNATIONAL FIXED INCOME FUNDS -- 5.1% 542,120 International Bond Fund Institutional Class 7,356,568 -------------- TOTAL INVESTMENT SECURITIES -- 99.9% (Cost $137,484,209) 144,730,357 -------------- OTHER ASSETS AND LIABILITIES -- 0.1% 193,820 -------------- TOTAL NET ASSETS -- 100.0% $144,924,177 ============== Notes to Schedule of Investments (1) Investments are funds within the American Century family of funds, of which certain funds may be deemed to be under common control because of the same board of directors. (2) Non-income producing. - ------ 15 LIVESTRONG Portfolios Shares Value LIVESTRONG 2025 Portfolio Mutual Funds(1) -- 99.9% DOMESTIC EQUITY FUNDS -- 53.1% 2,317,014 NT Equity Growth Fund Institutional Class $ 25,603,004 2,184,468 NT Growth Fund Institutional Class 23,941,769 2,216,486 NT Large Company Value Fund Institutional Class 24,935,468 953,361 NT Mid Cap Value Fund Institutional Class 10,544,173 787,984 NT Small Company Fund Institutional Class 7,934,999 1,053,773 NT Vista Fund Institutional Class(2) 10,411,277 110,258 Real Estate Fund Institutional Class 3,587,795 -------------- 106,958,485 -------------- DOMESTIC FIXED INCOME FUNDS -- 28.6% 930,129 High-Yield Fund Institutional Class 5,990,031 1,081,581 Inflation-Adjusted Bond Fund Institutional Class 11,453,943 3,973,092 NT Diversified Bond Fund Institutional Class 40,128,243 -------------- 57,572,217 -------------- INTERNATIONAL EQUITY FUNDS -- 12.4% 541,381 NT Emerging Markets Fund Institutional Class 6,231,295 1,728,687 NT International Growth Fund Institutional Class 18,669,820 -------------- 24,901,115 -------------- MONEY MARKET FUNDS -- 4.9% 9,940,493 Premium Money Market Fund Investor Class 9,940,493 -------------- INTERNATIONAL FIXED INCOME FUNDS -- 0.9% 138,093 International Bond Fund Institutional Class 1,873,922 -------------- TOTAL INVESTMENT SECURITIES -- 99.9% (Cost $189,317,066) 201,246,232 -------------- OTHER ASSETS AND LIABILITIES -- 0.1% 236,597 -------------- TOTAL NET ASSETS -- 100.0% $201,482,829 ============== Notes to Schedule of Investments (1) Investments are funds within the American Century family of funds, of which certain funds may be deemed to be under common control because of the same board of directors. (2) Non-income producing. See Notes to Financial Statements. Shares Value LIVESTRONG 2035 Portfolio Mutual Funds(1) -- 99.9% DOMESTIC EQUITY FUNDS -- 62.8% 1,284,251 NT Equity Growth Fund Institutional Class $ 14,190,975 1,288,222 NT Growth Fund Institutional Class 14,118,913 1,253,408 NT Large Company Value Fund Institutional Class 14,100,840 629,263 NT Mid Cap Value Fund Institutional Class 6,959,649 405,292 NT Small Company Fund Institutional Class 4,081,290 730,634 NT Vista Fund Institutional Class(2) 7,218,664 69,084 Real Estate Fund Institutional Class 2,247,993 -------------- 62,918,324 -------------- DOMESTIC FIXED INCOME FUNDS -- 21.0% 329,836 High-Yield Fund Institutional Class 2,124,144 390,107 Inflation-Adjusted Bond Fund Institutional Class 4,131,233 1,469,604 NT Diversified Bond Fund Institutional Class 14,843,004 -------------- 21,098,381 -------------- INTERNATIONAL EQUITY FUNDS -- 15.1% 424,355 NT Emerging Markets Fund Institutional Class 4,884,326 950,790 NT International Growth Fund Institutional Class 10,268,532 -------------- 15,152,858 -------------- MONEY MARKET FUNDS -- 1.0% 983,783 Premium Money Market Fund Investor Class 983,783 -------------- TOTAL INVESTMENT SECURITIES -- 99.9% (Cost $93,146,061) 100,153,346 -------------- OTHER ASSETS AND LIABILITIES -- 0.1% 80,837 -------------- TOTAL NET ASSETS -- 100.0% $100,234,183 ============== Notes to Schedule of Investments (1) Investments are funds within the American Century family of funds, of which certain funds may be deemed to be under common control because of the same board of directors. (2) Non-income producing. - ------ 16 LIVESTRONG Portfolios Shares Value LIVESTRONG 2045 Portfolio Mutual Funds(1) -- 99.9% DOMESTIC EQUITY FUNDS -- 68.1% 891,345 NT Equity Growth Fund Institutional Class $ 9,849,362 894,128 NT Growth Fund Institutional Class 9,799,643 884,558 NT Large Company Value Fund Institutional Class 9,951,269 436,826 NT Mid Cap Value Fund Institutional Class 4,831,296 311,722 NT Small Company Fund Institutional Class 3,139,041 506,916 NT Vista Fund Institutional Class(2) 5,008,330 54,098 Real Estate Fund Institutional Class 1,760,349 -------------- 44,339,290 -------------- INTERNATIONAL EQUITY FUNDS -- 16.3% 361,587 NT Emerging Markets Fund Institutional Class 4,161,866 600,341 NT International Growth Fund Institutional Class 6,483,683 -------------- 10,645,549 -------------- DOMESTIC FIXED INCOME FUNDS -- 15.5% 159,038 High-Yield Fund Institutional Class 1,024,205 188,151 Inflation-Adjusted Bond Fund Institutional Class 1,992,519 698,983 NT Diversified Bond Fund Institutional Class 7,059,728 -------------- 10,076,452 -------------- TOTAL INVESTMENT SECURITIES -- 99.9% (Cost $60,096,920) 65,061,291 -------------- OTHER ASSETS AND LIABILITIES -- 0.1% 37,074 -------------- TOTAL NET ASSETS -- 100.0% $65,098,365 ============== Notes to Schedule of Investments (1) Investments are funds within the American Century family of funds, of which certain funds may be deemed to be under common control because of the same board of directors. (2) Non-income producing. See Notes to Financial Statements. - ------ 17 STATEMENT OF ASSETS AND LIABILITIES JANUARY 31, 2007 (UNAUDITED) LIVESTRONG LIVESTRONG LIVESTRONG Income 2015 2025 Portfolio Portfolio Portfolio ASSETS Investment securities in affiliates, at value (cost of $45,479,406, $137,484,209 and $189,317,066, respectively) $47,528,522 $144,730,357 $201,246,232 Cash 8,682 26,874 35,785 Receivable for capital shares sold 208 3,676 15,182 Distributions receivable from affiliates 72,456 189,238 216,328 ------------ ------------ ------------ 47,609,868 144,950,145 201,513,527 ------------ ------------ ------------ LIABILITIES Accrued administrative fees 7,071 22,280 27,384 Distribution and service fees payable 1,260 3,688 3,314 ------------ ------------ ------------ 8,331 25,968 30,698 ------------ ------------ ------------ NET ASSETS $47,601,537 $144,924,177 $201,482,829 ============ ============ ============ NET ASSETS CONSIST OF: Capital (par value and paid-in surplus) $45,805,563 $137,777,357 $189,535,819 Accumulated net investment loss (108,576) (107,696) (89,265) Accumulated undistributed net realized gain (loss) on investment transactions (144,566) 8,368 107,109 Net unrealized appreciation on investments 2,049,116 7,246,148 11,929,166 ------------ ------------ ------------ $47,601,537 $144,924,177 $201,482,829 ============ ============ ============ INVESTOR CLASS, $0.01 PAR VALUE Net assets $36,204,801 $115,309,119 $148,614,876 Shares outstanding 3,334,576 10,002,118 12,477,484 Net asset value per share $10.86 $11.53 $11.91 INSTITUTIONAL CLASS, $0.01 PAR VALUE Net assets $5,208,611 $12,874,886 $38,628,878 Shares outstanding 479,637 1,116,336 3,242,276 Net asset value per share $10.86 $11.53 $11.91 ADVISOR CLASS, $0.01 PAR VALUE Net assets $6,136,623 $16,155,747 $13,198,877 Shares outstanding 565,442 1,401,893 1,108,210 Net asset value per share $10.85 $11.52 $11.91 R CLASS, $0.01 PAR VALUE Net assets $51,502 $584,425 $1,040,198 Shares outstanding 4,747 50,711 87,367 Net asset value per share $10.85 $11.52 $11.91 See Notes to Financial Statements. - ------ 18 JANUARY 31, 2007 (UNAUDITED) LIVESTRONG LIVESTRONG 2035 2045 Portfolio Portfolio ASSETS Investment securities in affiliates, at value (cost of $93,146,061 and $60,096,920, respectively) $100,153,346 $65,061,291 Cash 17,092 9,520 Receivable for capital shares sold 9,936 5,678 Distributions receivable from affiliates 70,295 31,038 ------------ ------------ 100,250,669 65,107,527 ------------ ------------ LIABILITIES Accrued administrative fees 14,273 7,742 Distribution and service fees payable 2,213 1,420 ------------ ------------ 16,486 9,162 ------------ ------------ NET ASSETS $100,234,183 $65,098,365 ============ ============ NET ASSETS CONSIST OF: Capital (par value and paid-in surplus) $93,141,416 $60,070,078 Undistributed net investment income 6,246 23,511 Undistributed net realized gain on investment transactions 79,236 40,405 Net unrealized appreciation on investments 7,007,285 4,964,371 ------------ ------------ $100,234,183 $65,098,365 ============ ============ INVESTOR CLASS, $0.01 PAR VALUE Net assets $73,759,953 $39,934,923 Shares outstanding 5,877,326 3,119,777 Net asset value per share $12.55 $12.80 INSTITUTIONAL CLASS, $0.01 PAR VALUE Net assets $16,471,491 $18,699,813 Shares outstanding 1,311,733 1,460,387 Net asset value per share $12.56 $12.80 ADVISOR CLASS, $0.01 PAR VALUE Net assets $9,356,966 $5,936,911 Shares outstanding 745,557 463,990 Net asset value per share $12.55 $12.80 R CLASS, $0.01 PAR VALUE Net assets $645,773 $526,718 Shares outstanding 51,460 41,167 Net asset value per share $12.55 $12.79 See Notes to Financial Statements. - ------ 19 STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED JANUARY 31, 2007 (UNAUDITED) LIVESTRONG LIVESTRONG LIVESTRONG Income 2015 2025 Portfolio Portfolio Portfolio INVESTMENT INCOME (LOSS) INCOME: Income distributions from underlying funds -- affiliates $ 744,549 $ 2,152,231 $ 2,632,248 ------------ ------------ ------------ EXPENSES: Administrative fees 36,593 117,429 144,346 Distribution and service fees: Advisor Class 5,314 15,836 13,267 R Class 114 1,146 2,145 Directors' fees and expenses 343 1,079 1,459 ------------ ------------ ------------ 42,364 135,490 161,217 ------------ ------------ ------------ NET INVESTMENT INCOME (LOSS) 702,185 2,016,741 2,471,031 ------------ ------------ ------------ NET REALIZED AND UNREALIZED GAIN (LOSS) ON AFFILIATES NET REALIZED GAIN (LOSS) ON: Sale of investments in underlying funds (36,557) 42,177 111,532 Capital gain distributions received from underlying funds 22,592 89,975 157,701 ------------ ------------ ------------ (13,965) 132,152 269,233 ------------ ------------ ------------ CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS 2,238,554 8,568,245 14,680,518 ------------ ------------ ------------ NET REALIZED AND UNREALIZED GAIN (LOSS) 2,224,589 8,700,397 14,949,751 ------------ ------------ ------------ NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $2,926,774 $10,717,138 $17,420,782 ============ ============ ============ See Notes to Financial Statements. - ------ 20 FOR THE SIX MONTHS ENDED JANUARY 31, 2007 (UNAUDITED) LIVESTRONG LIVESTRONG 2035 2045 Portfolio Portfolio INVESTMENT INCOME (LOSS) INCOME: Income distributions from underlying funds -- affiliates $1,118,337 $ 672,161 ------------ ------------ EXPENSES: Administrative fees 72,289 38,280 Distribution and service fees: Advisor Class 9,120 6,585 R Class 1,182 622 Directors' fees and expenses 708 451 ------------ ------------ 83,299 45,938 ------------ ------------ NET INVESTMENT INCOME (LOSS) 1,035,038 626,223 ------------ ------------ NET REALIZED AND UNREALIZED GAIN (LOSS) ON AFFILIATES NET REALIZED GAIN (LOSS) ON: Sale of investments in underlying funds 65,269 33,301 Capital gain distributions received from underlying funds 92,958 69,850 ------------ ------------ 158,227 103,151 ------------ ------------ CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS 8,487,867 5,825,962 ------------ ------------ NET REALIZED AND UNREALIZED GAIN (LOSS) 8,646,094 5,929,113 ------------ ------------ NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $9,681,132 $6,555,336 ============ ============ See Notes to Financial Statements. - ------ 21 STATEMENT OF CHANGES IN NET ASSETS SIX MONTHS ENDED JANUARY 31, 2007 (UNAUDITED) AND YEAR ENDED JULY 31, 2006 LIVESTRONG LIVESTRONG Income Portfolio 2015 Portfolio Increase (Decrease) in Net Assets 2007 2006 2007 2006 OPERATIONS Net investment income (loss) $ 702,185 $ 963,734 $ 2,016,741 $ 2,355,575 Net realized gain (loss) (13,965) 491,794 132,152 3,025,866 Change in net unrealized appreciation (depreciation) 2,238,554 (550,729) 8,568,245 (2,621,574) -------------- -------------- -------------- -------------- Net increase (decrease) in net assets resulting from operations 2,926,774 904,799 10,717,138 2,759,867 -------------- -------------- -------------- -------------- DISTRIBUTIONS TO SHAREHOLDERS From net investment income: Investor Class (707,153) (740,215) (2,492,002) (1,494,047) Institutional Class (104,838) (123,487) (296,721) (101,538) Advisor Class (94,479) (48,341) (318,604) (73,173) R Class (870) (437) (9,697) (461) From net realized gains: Investor Class (470,015) (26,989) (2,495,693) (57,984) Institutional Class (67,991) (4,013) (272,911) (3,679) Advisor Class (72,923) (1,746) (358,795) (3,112) R Class (648) (14) (12,472) (22) -------------- -------------- -------------- -------------- Decrease in net assets from distributions (1,518,917) (945,242) (6,256,895) (1,734,016) -------------- -------------- -------------- -------------- CAPITAL SHARE TRANSACTIONS Net increase (decrease) in net assets from capital share transactions 11,408,049 15,136,327 30,685,684 64,687,101 -------------- -------------- -------------- -------------- NET INCREASE (DECREASE) IN NET ASSETS 12,815,906 15,095,884 35,145,927 65,712,952 NET ASSETS Beginning of period 34,785,631 19,689,747 109,778,250 44,065,298 -------------- -------------- -------------- -------------- End of period $47,601,537 $34,785,631 $144,924,177 $109,778,250 ============== ============== ============== ============== Accumulated undistributed net investment income (loss) $(108,576) $96,579 $(107,696) $992,587 ============== ============== ============== ============== See Notes to Financial Statements - ------ 22 SIX MONTHS ENDED JANUARY 31, 2007 (UNAUDITED) AND YEAR ENDED JULY 31, 2006 LIVESTRONG LIVESTRONG 2025 Portfolio 2035 Portfolio Increase (Decrease) in Net Assets 2007 2006 2007 2006 OPERATIONS Net investment income (loss) $ 2,471,031 $ 3,376,289 $ 1,035,038 $ 1,187,047 Net realized gain (loss) 269,233 7,946,235 158,227 3,744,415 Change in net unrealized appreciation (depreciation) 14,680,518 (6,077,343) 8,487,867 (2,785,173) -------------- -------------- -------------- -------------- Net increase (decrease) in net assets resulting from operations 17,420,782 5,245,181 9,681,132 2,146,289 -------------- -------------- -------------- -------------- DISTRIBUTIONS TO SHAREHOLDERS From net investment income: Investor Class (2,728,388) (1,904,998) (1,038,224) (741,605) Institutional Class (782,731) (702,282) (266,923) (121,935) Advisor Class (222,178) (63,954) (107,434) (33,882) R Class (13,994) (1,781) (5,618) (801) From net realized gains: Investor Class (5,947,272) (100,651) (2,806,851) (29,595) Institutional Class (1,544,817) (34,639) (635,902) (4,508) Advisor Class (556,560) (3,737) (349,261) (1,501) R Class (41,251) (116) (22,938) (40) -------------- -------------- -------------- -------------- Decrease in net assets from distributions (11,837,191) (2,812,158) (5,233,151) (933,867) -------------- -------------- -------------- -------------- CAPITAL SHARE TRANSACTIONS Net increase (decrease) in net assets from capital share transactions 44,349,687 73,921,053 26,957,370 42,524,951 -------------- -------------- -------------- -------------- NET INCREASE (DECREASE) IN NET ASSETS 49,933,278 76,354,076 31,405,351 43,737,373 NET ASSETS Beginning of period 151,549,551 75,195,475 68,828,832 25,091,459 -------------- -------------- -------------- -------------- End of period $201,482,829 $151,549,551 $100,234,183 $68,828,832 ============== ============== ============== ============== Accumulated undistributed net investment income (loss) $(89,265) $1,186,995 $6,246 $389,407 ============== ============== ============== ============== See Notes to Financial Statements - ------ 23 SIX MONTHS ENDED JANUARY 31, 2007 (UNAUDITED) AND YEAR ENDED JULY 31, 2006 LIVESTRONG 2045 Portfolio Increase (Decrease) in Net Assets 2007 2006 OPERATIONS Net investment income (loss) $ 626,223 $ 692,802 Net realized gain (loss) 103,151 2,435,830 Change in net unrealized appreciation (depreciation) 5,825,962 (1,825,720) -------------- -------------- Net increase (decrease) in net assets resulting from operations 6,555,336 1,302,912 -------------- -------------- DISTRIBUTIONS TO SHAREHOLDERS From net investment income: Investor Class (468,015) (322,350) Institutional Class (256,627) (240,707) Advisor Class (61,872) (15,750) R Class (2,066) (228) From net realized gains: Investor Class (1,476,282) (32,689) Institutional Class (698,729) (22,737) Advisor Class (242,944) (1,761) R Class (10,785) (29) -------------- -------------- Decrease in net assets from distributions (3,217,320) (636,251) -------------- -------------- CAPITAL SHARE TRANSACTIONS Net increase (decrease) in net assets from capital share transactions 21,585,487 24,476,051 -------------- -------------- NET INCREASE (DECREASE) IN NET ASSETS 24,923,503 25,142,712 NET ASSETS Beginning of period 40,174,862 15,032,150 -------------- -------------- End of period $65,098,365 $40,174,862 ============== ============== Undistributed net investment income $23,511 $185,868 ============== ============== See Notes to Financial Statements - ------ 24 NOTES TO FINANCIAL STATEMENTS JANUARY 31, 2007 (UNAUDITED) 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ORGANIZATION -- American Century Asset Allocation Portfolios, Inc. (the corporation) is registered under the Investment Company Act of 1940 (the 1940 Act), as amended, as an open-end management investment company. LIVESTRONG Income Portfolio, LIVESTRONG 2015 Portfolio, LIVESTRONG 2025 Portfolio, LIVESTRONG 2035 Portfolio and LIVESTRONG 2045 Portfolio (collectively, the funds) are five funds in a series issued by the corporation. The funds operate as "fund of funds," meaning substantially all of the funds' assets will be invested in other funds in the American Century family of funds (the underlying funds). Because the funds directly invest in a relatively small number of underlying funds, they are not diversified as defined by the 1940 Act. However, the underlying funds are generally diversified and so indirectly provide broad exposure to a large number of securities. The investment objective of LIVESTRONG Income Portfolio is to seek current income. Capital appreciation is a secondary objective. The investment objectives of the four target-year LIVESTRONG Portfolios are to seek the highest total return consistent with their respective asset mix. The funds pursue their objectives by investing in underlying funds that represent a variety of asset classes and investment styles. For each fund with a target year, the target asset mix will be adjusted annually in a step-like fashion. In general, as the target year approaches, the allocation to stocks will decrease and the allocation to bonds and money market instruments will increase. When a fund reaches its most conservative planned target asset allocation, which is expected to occur on approximately November 30 of the year before the target year, its target asset mix will become fixed and will match that of LIVESTRONG Income Portfolio. The following is a summary of the funds' significant accounting policies. MULTIPLE CLASS -- The funds are authorized to issue the Investor Class, Institutional Class, Advisor Class and R Class. The share classes differ principally in their respective distribution and shareholder servicing expenses and arrangements. All shares of each 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 funds are allocated to each class of shares based on their relative net assets. UNDERLYING FUNDS -- Each fund's assets are allocated among underlying funds that represent major asset classes, including equity securities (stocks), fixed-income securities (bonds) and cash-equivalent instruments (money markets). The underlying NT Diversified Bond, NT Emerging Markets, NT Equity Growth, NT Growth, NT International Growth, NT Large Company Value, NT Mid Cap Value, NT Small Company and NT Vista funds are not permitted to invest in securities issues by companies assigned the Global Industry Classification Standard (GICS) for the tobacco industry. A brief description of each of the underlying funds follows. DOMESTIC EQUITY FUNDS NT EQUITY GROWTH seeks long-term capital growth. It uses a quantitative investment strategy to construct an optimized portfolio drawn primarily from the 1,500 largest publicly traded U.S. companies without regard to dividend yield. NT GROWTH seeks long-term capital growth. It uses a growth investment strategy and generally invests in larger U.S. companies. NT LARGE COMPANY VALUE seeks long-term capital growth with income as a secondary objective. It uses a value investment strategy and invests primarily in larger U.S. companies. NT MID CAP VALUE seeks long-term capital growth with income as a secondary objective. It uses a value investment strategy and invests primarily in mid-sized U.S. companies. NT SMALL COMPANY seeks long-term capital growth. It uses a quantitative investment strategy and invests primarily in smaller U.S. companies. NT VISTA seeks long-term capital growth. It uses a growth investment strategy and generally invests in medium-sized and smaller U.S. companies. - ------ 25 REAL ESTATE seeks long-term capital appreciation with income as a secondary objective. It invests primarily in equity securities issued by real estate investment trusts and companies engaged in the real estate industry. INTERNATIONAL EQUITY FUNDS NT EMERGING MARKETS seeks capital growth. It uses a growth investment strategy and invests primarily in securities of companies located in emerging market countries and companies that derive a significant portion of their business from emerging market countries. NT INTERNATIONAL GROWTH seeks capital growth. It uses a growth investment strategy and invests primarily in securities of companies located in developed countries other than the United States. DOMESTIC FIXED INCOME FUNDS HIGH-YIELD seeks high current income by investing in a diversified portfolio of high-yield corporate bonds and other debt securities. As a second objective, the fund seeks capital appreciation, but only when consistent with its primary objective of maximizing current income. INFLATION-ADJUSTED BOND seeks to provide total return and inflation protection consistent with investment in inflation-indexed securities. NT DIVERSIFIED BOND seeks a high level of income by investing primarily in high- and medium-grade non-money market debt securities. These securities, which may be payable in U.S. or foreign currencies, may include corporate bonds and notes, government securities and securities backed by mortgages or other assets. INTERNATIONAL FIXED INCOME FUNDS INTERNATIONAL BOND seeks high total return by investing in high-quality, non-dollar-denominated government and corporate debt securities outside the United States. MONEY MARKET FUNDS PREMIUM MONEY MARKET seeks to earn the highest level of current income while preserving the value of shareholder investments by investing in high-quality, cash-equivalent securities. SECURITY VALUATIONS -- Investments in the underlying funds are valued at their reported net asset value. The underlying funds have specific valuation policies. If an event occurs after the value of a security was established but before the net asset value per share of an underlying fund was determined that was likely to materially change the net asset value of the underlying fund, that security would be valued at fair value as determined in accordance with procedures adopted by the Board of Directors/Trustees. If the underlying fund determines that the market price of a portfolio security is not readily available, or that the valuation methods mentioned above do not reflect the security's fair value, such security is valued at its fair value as determined by, or in accordance with procedures adopted by, the Board of Directors/Trustees or its designee if such fair value determination would materially impact an underlying fund's net asset value. Certain other circumstances may cause the underlying fund to fair value a security such as: a security has been declared in default; trading in a security has been halted during the trading day; or there is a foreign market holiday and no trading will commence. 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 -- Income and capital gain distributions, if any, from the underlying funds are recorded as of the ex-dividend date. Long-term capital gain distributions, if any, from the underlying funds are a component of net realized gain (loss). EXPENSES -- The expenses included in the accompanying financial statements reflect the expenses of each fund and do not include any expenses associated with the underlying funds. INCOME TAX STATUS -- It is each 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 federal or state income taxes. - ------ 26 DISTRIBUTIONS TO SHAREHOLDERS -- Distributions to shareholders are recorded on the ex-dividend date. Distributions from net investment income, if any, are generally declared and paid quarterly for LIVESTRONG Income Portfolio. Distributions from net investment income, if any, are generally declared and paid annually for the four target-date LIVESTRONG Portfolios. Distributions from net realized gains, if any, are generally declared and paid annually for all funds. 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 funds. In addition, in the normal course of business, the funds enter into contracts that provide general indemnifications. The funds' maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the funds. The risk of material loss from such claims is considered by management to be remote. USE OF ESTIMATES -- The financial statements are prepared in conformity with accounting principles generally accepted in the United States of America, which may require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from these estimates. 2. FEES AND TRANSACTIONS WITH RELATED PARTIES ADMINISTRATIVE FEES -- The corporation has entered into a Management Agreement with American Century Investment Management, Inc. (ACIM), under which ACIM provides the funds with shareholder services in exchange for an administrative fee (the fee). The fee is computed and accrued daily based on the daily net assets of each specific class of shares of each fund and paid monthly in arrears. The rate of the fee for the Investor Class, Advisor Class and R Class of the funds is 0.20%. There is no administrative fee for the Institutional Class. DISTRIBUTION FEES -- The Board of Directors has adopted a separate Master Distribution and Individual Shareholder Services Plan for the Advisor Class and R Class (collectively, the plans), pursuant to Rule 12b-1 of the 1940 Act. The plans provide that the Advisor Class and R Class will pay American Century Investment Services, Inc. (ACIS) 0.25% and 0.50%, respectively. The fees are computed and accrued daily based on each class's daily net assets and paid monthly in arrears. These fees are used to pay for distribution services and shareholder services. Fees incurred under the plans during the six months ended January 31, 2007, are detailed in the Statement of Operations. MANAGEMENT FEES -- Each fund will indirectly realize its pro rata share of the fees and expenses of the underlying funds in which it invests. These fees and expenses are already reflected in the valuation of the underlying funds. RELATED PARTIES -- Certain officers and directors of the corporation are also officers and/or directors, and, as a group, controlling stockholders of American Century Companies, Inc. (ACC), the parent of the corporation's investment advisor, ACIM, the distributor of the corporation, ACIS, and the corporation's transfer agent, American Century Services, LLC. The directors of the corporation are also directors of some underlying funds and therefore those underlying funds may be deemed to be under common control with the corporation. The officers of the corporation are also officers of all the underlying funds. ACIM or American Century Global Investment Management, Inc., a wholly-owned subsidiary of ACIM, serves as the investment advisor for the underlying funds. 3. INVESTMENT TRANSACTIONS Investment transactions for the six months ended January 31, 2007, were as follows: LIVESTRONG LIVESTRONG LIVESTRONG LIVESTRONG LIVESTRONG Income 2015 2025 2035 2045 Portfolio Portfolio Portfolio Portfolio Portfolio Purchases $14,531,274 $34,887,933 $45,598,748 $30,475,396 $22,546,290 Proceeds from sales $ 3,921,927 $ 8,361,317 $10,473,697 $ 7,639,425 $ 3,507,047 - ------ 27 4. CAPITAL SHARE TRANSACTIONS The corporation is authorized to issue 3,000,000,000 shares. Transactions in shares of the funds were as follows: LIVESTRONG Income Portfolio Six months ended Year ended January 31, 2007 July 31, 2006 Shares Amount Shares Amount INVESTOR CLASS Sold 1,072,811 $11,547,878 1,865,285 $19,417,311 Issued in reinvestment of distributions 101,465 1,092,775 65,833 680,610 Redeemed (459,466) (4,936,330) (793,132) (8,273,388) ------------ ------------ ------------ ------------ 714,810 7,704,323 1,137,986 11,824,533 ------------ ------------ ------------ ------------ INSTITUTIONAL CLASS Sold 131,884 1,421,608 197,184 2,062,635 Issued in reinvestment of distributions 16,020 172,533 12,315 127,282 Redeemed (90,098) (959,608) (89,121) (934,968) ------------ ------------ ------------ ------------ 57,806 634,533 120,378 1,254,949 ------------ ------------ ------------ ------------ ADVISOR CLASS Sold 310,234 3,366,237 289,089 3,021,063 Issued in reinvestment of distributions 15,524 167,402 4,853 50,087 Redeemed (44,249) (476,996) (99,509) (1,043,161) ------------ ------------ ------------ ------------ 281,509 3,056,643 194,433 2,027,989 ------------ ------------ ------------ ------------ R CLASS Sold 2,220 23,832 3,442 35,859 Issued in reinvestment of distributions 141 1,518 44 451 Redeemed (1,188) (12,800) (724) (7,454) ------------ ------------ ------------ ------------ 1,173 12,550 2,762 28,856 ------------ ------------ ------------ ------------ Net increase (decrease) 1,055,298 $11,408,049 1,455,559 $15,136,327 ============ ============ ============ ============ LIVESTRONG 2015 Portfolio INVESTOR CLASS Sold 2,506,956 $ 28,742,618 5,549,139 $ 61,147,153 Issued in reinvestment of distributions 430,356 4,927,575 140,409 1,524,842 Redeemed (1,000,567) (11,508,052) (1,350,088) (14,856,888) ------------ ------------ ------------ ------------ 1,936,745 22,162,141 4,339,460 47,815,107 ------------ ------------ ------------ ------------ INSTITUTIONAL CLASS Sold 208,326 2,399,845 758,066 8,404,619 Issued in reinvestment of distributions 48,962 561,103 9,680 105,217 Redeemed (81,139) (934,423) (102,771) (1,134,102) ------------ ------------ ------------ ------------ 176,149 2,026,525 664,975 7,375,734 ------------ ------------ ------------ ------------ ADVISOR CLASS Sold 615,232 7,151,489 891,334 9,793,874 Issued in reinvestment of distributions 59,162 677,399 7,024 76,285 Redeemed (135,744) (1,551,089) (64,749) (710,437) ------------ ------------ ------------ ------------ 538,650 6,277,799 833,609 9,159,722 ------------ ------------ ------------ ------------ R CLASS Sold 20,940 241,745 33,377 368,054 Issued in reinvestment of distributions 1,934 22,169 44 483 Redeemed (3,921) (44,695) (2,932) (31,999) ------------ ------------ ------------ ------------ 18,953 219,219 30,489 336,538 ------------ ------------ ------------ ------------ Net increase (decrease) 2,670,497 $ 30,685,684 5,868,533 $ 64,687,101 ============ ============ ============ ============ - ------ 28 LIVESTRONG 2025 Portfolio Six months ended Year ended January 31, 2007 July 31, 2006 Shares Amount Shares Amount INVESTOR CLASS Sold 2,960,239 $ 35,161,045 6,131,308 $ 69,967,543 Issued in reinvestment of distributions 730,281 8,610,010 176,795 1,988,938 Redeemed (975,547) (11,580,952) (1,298,238) (14,798,332) ------------ ------------ ------------ ------------ 2,714,973 32,190,103 5,009,865 57,158,149 ------------ ------------ ------------ ------------ INSTITUTIONAL CLASS Sold 514,164 6,141,507 986,172 11,275,206 Issued in reinvestment of distributions 190,800 2,249,531 65,504 736,921 Redeemed (191,133) (2,286,110) (234,870) (2,674,891) ------------ ------------ ------------ ------------ 513,831 6,104,928 816,806 9,337,236 ------------ ------------ ------------ ------------ ADVISOR CLASS Sold 545,861 6,571,927 665,010 7,572,377 Issued in reinvestment of distributions 65,995 778,738 6,012 67,691 Redeemed (148,727) (1,765,359) (60,570) (694,686) ------------ ------------ ------------ ------------ 463,129 5,585,306 610,452 6,945,382 ------------ ------------ ------------ ------------ R CLASS Sold 42,176 497,004 55,608 638,412 Issued in reinvestment of distributions 4,682 55,245 169 1,897 Redeemed (7,041) (82,899) (14,043) (160,023) ------------ ------------ ------------ ------------ 39,817 469,350 41,734 480,286 ------------ ------------ ------------ ------------ Net increase (decrease) 3,731,750 $ 44,349,687 6,478,857 $ 73,921,053 ============ ============ ============ ============ LIVESTRONG 2035 Portfolio INVESTOR CLASS Sold 1,798,621 $22,263,589 3,133,987 $36,820,309 Issued in reinvestment of distributions 306,847 3,801,838 65,522 758,749 Redeemed (633,687) (7,899,591) (677,940) (7,960,207) ------------ ------------ ------------ ------------ 1,471,781 18,165,836 2,521,569 29,618,851 ------------ ------------ ------------ ------------ INSTITUTIONAL CLASS Sold 406,176 5,051,176 694,353 8,252,385 Issued in reinvestment of distributions 67,322 834,796 10,919 126,443 Redeemed (97,372) (1,210,011) (69,706) (818,529) ------------ ------------ ------------ ------------ 376,126 4,675,961 635,566 7,560,299 ------------ ------------ ------------ ------------ ADVISOR CLASS Sold 384,449 4,796,496 507,513 5,948,743 Issued in reinvestment of distributions 36,830 456,695 3,055 35,383 Redeemed (117,119) (1,463,819) (79,097) (925,996) ------------ ------------ ------------ ------------ 304,160 3,789,372 431,471 5,058,130 ------------ ------------ ------------ ------------ R CLASS Sold 31,296 387,365 25,918 304,212 Issued in reinvestment of distributions 2,303 28,556 73 841 Redeemed (7,179) (89,720) (1,493) (17,382) ------------ ------------ ------------ ------------ 26,420 326,201 24,498 287,671 ------------ ------------ ------------ ------------ Net increase (decrease) 2,178,487 $26,957,370 3,613,104 $42,524,951 ============ ============ ============ ============ - ------ 29 LIVESTRONG 2045 Portfolio Six months ended Year ended January 31, 2007 July 31, 2006 Shares Amount Shares Amount INVESTOR CLASS Sold 1,486,462 $18,567,456 1,513,147 $17,989,677 Issued in reinvestment of distributions 152,330 1,922,401 29,951 349,831 Redeemed (394,617) (4,986,313) (314,171) (3,729,359) ------------ ------------ ------------ ------------ 1,244,175 15,503,544 1,228,927 14,610,149 ------------ ------------ ------------ ------------ INSTITUTIONAL CLASS Sold 353,529 4,446,580 583,552 6,945,344 Issued in reinvestment of distributions 75,566 953,638 22,555 263,444 Redeemed (87,104) (1,106,084) (108,965) (1,293,059) ------------ ------------ ------------ ------------ 341,991 4,294,134 497,142 5,915,729 ------------ ------------ ------------ ------------ ADVISOR CLASS Sold 170,776 2,159,230 348,190 4,162,541 Issued in reinvestment of distributions 24,153 304,816 1,501 17,511 Redeemed (80,661) (1,022,314) (32,947) (387,544) ------------ ------------ ------------ ------------ 114,268 1,441,732 316,744 3,792,508 ------------ ------------ ------------ ------------ R CLASS Sold 31,879 402,531 14,010 166,299 Issued in reinvestment of distributions 1,018 12,851 22 257 Redeemed (5,528) (69,305) (765) (8,891) ------------ ------------ ------------ ------------ 27,369 346,077 13,267 157,665 ------------ ------------ ------------ ------------ Net increase (decrease) 1,727,803 $21,585,487 2,056,080 $24,476,051 ============ ============ ============ ============ - ------ 30 5. AFFILIATED COMPANY TRANSACTIONS Investments are funds within the American Century family of funds, of which certain funds may be deemed to be under common control because of the same board of directors. A summary of the transactions for each underlying fund during the six months ended January 31, 2007 follows: LIVESTRONG Income Portfolio January 31, 2007 July 31, 2006 Realized Underlying Share Purchase Sales Gain Distributions Share Market Fund Balance Cost Cost (Loss) Received(1) Balance Value NT Equity Growth Fund Institutional Class 466,081 $1,688,954 $ 572,584 $ 2,273 $ 32,664 572,765 $ 6,329,053 NT Growth Fund Institutional Class 235,532 844,226 308,393 113 8,617 287,319 3,149,016 NT Large Company Value Fund Institutional Class 388,517 1,429,017 507,212 2,033 53,630 474,368 5,336,640 NT Mid Cap Value Fund Institutional Class 141,077 519,296 184,536 651 42,591 173,051 1,913,944 NT Small Company Fund Institutional Class 75,409 270,602 67,843 (3,702) 1,779 97,186 978,663 NT Vista Fund Institutional Class(2) 100,680 324,433 112,890 (8,853) -- 124,985 1,234,852 Real Estate Fund Institutional Class 12,122 128,293 77,486 2,595 47,230 13,798 448,987 High-Yield Fund Institutional Class 205,631 610,102 124,535 (2,797) 51,984 282,067 1,816,511 Inflation- Adjusted Bond Fund Institutional Class 243,667 1,210,309 257,191 (13,794) 32,364 333,564 3,532,443 NT Diversified Bond Fund Institutional Class 901,183 4,203,414 859,251 (7,689) 323,132 1,228,831 12,411,200 Premium Money Market Fund Investor Class 3,405,795 1,681,865 320,090 -- 99,980 4,767,570 4,767,570 International Bond Fund Institutional Class 177,722 971,466 233,574 (9,327) 66,134 231,484 3,141,238 NT International Growth Fund Institutional Class 196,623 649,297 332,899 1,940 7,036 228,556 2,468,405 --------- ----------- ---------- --------- ---------- --------- ----------- $14,531,274 $3,958,484 $(36,557) $767,141 $47,528,522 =========== ========== ========= ========== =========== (1) Distributions received includes distributions from net investment income and from capital gains from the underlying funds. (2) Non-income producing. - ------ 31 LIVESTRONG 2015 Portfolio January 31, 2007 July 31, 2006 Realized Underlying Share Purchase Sales Gain Distributions Share Market Fund Balance Cost Cost (Loss) Received(1) Balance Value NT Equity Growth Fund Institutional Class 1,380,570 $ 3,679,841 $ 572,232 $ 24 $ 96,652 1,677,960 $ 18,541,459 NT Growth Fund Institutional Class 1,024,610 2,606,948 1,720,064 28,187 33,804 1,110,366 12,169,611 NT Large Company Value Fund Institutional Class 1,248,519 3,355,709 946,599 (88) 169,746 1,474,107 16,583,705 NT Mid Cap Value Fund Institutional Class 581,803 1,565,701 431,097 1,127 172,979 690,541 7,637,383 NT Small Company Fund Institutional Class 266,651 644,918 384,850 (11,618) 5,516 296,319 2,983,932 NT Vista Fund Institutional Class(2) 537,679 1,241,646 633,040 (35,570) -- 610,464 6,031,384 Real Estate Fund Institutional Class 55,301 425,587 316,570 20,971 205,539 58,887 1,916,183 High-Yield Fund Institutional Class 595,761 1,400,691 118,812 (3,650) 149,632 797,275 5,134,451 Inflation- Adjusted Bond Fund Institutional Class 706,080 2,850,971 247,510 (15,870) 93,239 949,591 10,056,169 NT Diversified Bond Fund Institutional Class 2,622,086 9,722,627 827,114 (16,648) 933,115 3,492,938 35,278,663 NT Emerging Markets Fund Institutional Class 253,841 570,227 816,303 69,523 19,522 228,823 2,633,753 NT International Growth Fund Institutional Class 802,143 1,938,630 926,385 17,506 28,248 904,338 9,766,850 Premium Money Market Fund Investor Class 5,894,217 2,938,374 192,345 -- 176,524 8,640,246 8,640,246 International Bond Fund Institutional Class 415,182 1,946,063 186,219 (11,717) 157,690 542,120 7,356,568 --------- ----------- ---------- -------- ---------- --------- ------------ $34,887,933 $8,319,140 $ 42,177 $2,242,206 $144,730,357 =========== ========== ======== ========== ============ (1) Distributions received includes distributions from net investment income and from capital gains from the underlying funds. (2) Non-income producing. - ------ 32 LIVESTRONG 2025 Portfolio January 31, 2007 July 31, 2006 Realized Underlying Share Purchase Sales Gain Distributions Share Market Fund Balance Cost Cost (Loss) Received(1) Balance Value NT Equity Growth Fund Institutional Class 1,937,538 $ 4,812,915 $ 869,957 $ 1,314 $ 134,525 2,317,014 $ 25,603,004 NT Growth Fund Institutional Class 1,917,716 4,653,700 1,929,294 4,999 66,968 2,184,468 23,941,769 NT Large Company Value Fund Institutional Class 1,869,552 4,716,633 1,022,972 737 255,456 2,216,486 24,935,468 NT Mid Cap Value Fund Institutional Class 799,340 2,021,062 418,879 999 240,006 953,361 10,544,173 NT Small Company Fund Institutional Class 651,704 1,520,901 248,045 (4,416) 14,691 787,984 7,934,999 NT Vista Fund Institutional Class(2) 913,828 1,989,651 791,680 (42,090) -- 1,053,773 10,411,277 Real Estate Fund Institutional Class 102,308 742,792 503,345 31,699 387,583 110,258 3,587,795 High-Yield Fund Institutional Class 677,982 1,716,761 111,331 (3,314) 172,615 930,129 5,990,031 Inflation- Adjusted Bond Fund Institutional Class 796,775 3,277,108 226,735 (14,235) 105,824 1,081,581 11,453,943 NT Diversified Bond Fund Institutional Class 2,928,445 11,435,774 757,470 (15,744) 1,056,268 3,973,092 40,128,243 NT Emerging Markets Fund Institutional Class 550,499 1,193,545 1,278,449 106,838 46,524 541,381 6,231,295 NT International Growth Fund Institutional Class 1,571,037 3,529,946 1,986,325 47,033 54,386 1,728,687 18,669,820 Premium Money Market Fund Investor Class 7,362,225 2,758,598 180,330 -- 214,862 9,940,493 9,940,493 International Bond Fund Institutional Class 54,841 1,229,362 37,353 (2,288) 40,241 138,093 1,873,922 --------- ----------- ----------- -------- ----------- --------- ------------ $45,598,748 $10,362,165 $111,532 $2,789,949 $201,246,232 =========== =========== ======== =========== ============ (1) Distributions received includes distributions from net investment income and from capital gains from the underlying funds. (2) Non-income producing. - ------ 33 LIVESTRONG 2035 Portfolio January 31, 2007 July 31, 2006 Realized Underlying Share Purchase Sales Gain Distributions Share Market Fund Balance Cost Cost (Loss) Received(1) Balance Value NT Equity Growth Fund Institutional Class 998,380 $ 3,896,420 $ 925,237 $ 4,245 $ 73,057 1,284,251 $ 14,190,975 NT Growth Fund Institutional Class 1,008,391 3,896,334 1,007,440 (141) 39,354 1,288,222 14,118,913 NT Large Company Value Fund Institutional Class 1,000,250 3,941,639 1,250,172 4,258 142,479 1,253,408 14,100,840 NT Mid Cap Value Fund Institutional Class 481,782 1,925,267 384,818 1,664 156,212 629,263 6,959,649 NT Small Company Fund Institutional Class 294,609 1,235,756 196,152 (2,238) 7,558 405,292 4,081,290 NT Vista Fund Institutional Class(2) 550,757 1,957,650 351,060 (11,744) -- 730,634 7,218,664 Real Estate Fund Institutional Class 58,093 667,414 333,777 12,152 239,665 69,084 2,247,993 High-Yield Fund Institutional Class 216,648 825,270 105,437 (1,974) 58,773 329,836 2,124,144 Inflation- Adjusted Bond Fund Institutional Class 259,945 1,607,076 219,006 (11,695) 35,292 390,107 4,131,233 NT Diversified Bond Fund Institutional Class 982,924 5,724,815 757,128 (14,910) 378,649 1,469,604 14,843,004 NT Emerging Markets Fund Institutional Class 394,918 1,351,565 1,053,595 73,378 36,320 424,355 4,884,326 NT International Growth Fund Institutional Class 767,610 2,750,600 945,737 12,274 29,795 950,790 10,268,532 Premium Money Market Fund Investor Class 332,790 695,590 44,597 -- 14,141 983,783 983,783 --------- ----------- ---------- -------- ----------- -------- ------------ $30,475,396 $7,574,156 $65,269 $1,211,295 $100,153,346 =========== ========== ======== =========== ============ (1) Distributions received includes distributions from net investment income and from capital gains from the underlying funds. (2) Non-income producing. - ------ 34 LIVESTRONG 2045 Portfolio January 31, 2007 July 31, 2006 Realized Underlying Share Purchase Sales Gain Distributions Share Market Fund Balance Cost Cost (Loss) Received(1) Balance Value NT Equity Growth Fund Institutional Class 622,511 $ 3,213,476 $ 434,699 $ 387 $ 50,273 891,345 $ 9,849,362 NT Growth Fund Institutional Class 628,776 3,213,428 494,786 (2,581) 26,983 894,128 9,799,643 NT Large Company Value Fund Institutional Class 623,017 3,266,434 493,978 (527) 99,030 884,558 9,951,269 NT Mid Cap Value Fund Institutional Class 300,760 1,587,490 174,730 (12) 107,292 436,826 4,831,296 NT Small Company Fund Institutional Class 203,767 1,114,951 106,568 (2,544) 5,736 311,722 3,139,041 NT Vista Fund Institutional Class(2) 343,690 1,635,069 173,430 (9,226) -- 506,916 5,008,330 Real Estate Fund Institutional Class 40,745 619,960 213,143 6,300 185,977 54,098 1,760,349 NT Emerging Markets Fund Institutional Class 299,005 1,360,857 735,608 50,906 30,580 361,587 4,161,866 NT International Growth Fund Institutional Class 424,763 2,025,783 291,235 (512) 18,589 600,341 6,483,683 High-Yield Fund Institutional Class 92,365 459,133 35,376 (1,040) 27,254 159,038 1,024,205 Inflation- Adjusted Bond Fund Institutional Class 109,499 916,335 72,477 (3,813) 15,903 188,151 1,992,519 NT Diversified Bond Fund Institutional Class 416,572 3,133,374 247,716 (4,037) 174,394 698,983 7,059,728 --------- ----------- ---------- -------- ---------- ------- ----------- $22,546,290 $3,473,746 $33,301 $742,011 $65,061,291 =========== ========== ======== ========== =========== (1) Distributions received includes distributions from net investment income and from capital gains from the underlying funds. (2) Non-income producing. - ------ 35 6. INVESTMENTS IN UNDERLYING FUNDS The funds do not invest in the underlying funds for the purpose of exercising management or control; however, investments by the funds within their investment strategies may represent a significant portion of the underlying funds' net assets. As of January 31, 2007, the following LIVESTRONG Portfolios owned 25% or more of the total outstanding shares of the underlying funds: LIVESTRONG LIVESTRONG LIVESTRONG 2015 2025 2035 Portfolio Portfolio Portfolio NT Diversified Bond Fund 32% 37% -- NT Emerging Markets Fund -- 35% 27% NT Equity Growth Fund 25% 34% -- NT Growth Fund -- 38% -- NT International Growth Fund -- 39% -- NT Large Company Value Fund -- 35% -- NT Mid Cap Value Fund -- 33% -- NT Small Company Fund -- 42% -- NT Vista Fund -- 35% -- As of January 31, 2007, the funds, in aggregate, owned 100% of the total outstanding shares of the underlying NT Diversified Bond, NT Emerging Markets, NT Equity Growth, NT Growth, NT International Growth, NT Large Company Value, NT Mid Cap Value, NT Small Company and NT Vista funds. 7. FEDERAL TAX INFORMATION The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements. As of January 31, 2007, the components of investments for federal income tax purposes were as follows: LIVESTRONG LIVESTRONG LIVESTRONG LIVESTRONG LIVESTRONG Income 2015 2025 2035 2045 Portfolio Portfolio Portfolio Portfolio Portfolio Federal tax cost of investments $45,660,467 $137,705,161 $189,570,047 $93,276,565 $60,189,295 ============ ============ ============ ============ ============ Gross tax appreciation of investments $2,052,368 $7,366,830 $12,059,282 $6,982,962 $4,920,074 Gross tax depreciation of investments (184,313) (341,634) (383,097) (106,181) (48,078) ------------ ------------ ------------ ------------ ------------ Net tax appreciation (depreciation) of investments $1,868,055 $7,025,196 $11,676,185 $6,876,781 $4,871,996 ============ ============ ============ ============ ============ The difference between book-basis and tax-basis cost and unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales. 8. RECENTLY ISSUED ACCOUNTING STANDARDS In June 2006, the Financial Accounting Standards Board (FASB) issued Interpretation No. 48, "Accounting for Uncertainty in Income Taxes - an Interpretation of FASB Statement No. 109" (FIN 48). FIN 48 establishes a minimum threshold for financial statement recognition of the benefit of positions taken in filing tax returns (including whether an entity is taxable in a particular jurisdiction), and requires certain expanded tax disclosures. FIN 48 is effective for fiscal years beginning after December 15, 2006, and is to be applied to all open tax years as of the date of effectiveness. The FASB issued Statement of Financial Accounting Standards No. 157, "Fair Value Measurements" (FAS 157), in September 2006, which is effective for fiscal years beginning after November 15, 2007. FAS 157 defines fair value, establishes a framework for measuring fair value and expands the required financial statement disclosures about fair value measurements. Management is currently evaluating the impact of adopting FIN 48 and FAS 157. - ------ 36 FINANCIAL HIGHLIGHTS LIVESTRONG Income Portfolio Investor Class For a Share Outstanding Throughout the Years Ended July 31 (except as noted) 2007(1) 2006 2005(2) PER-SHARE DATA Net Asset Value, Beginning of Period $10.45 $10.51 $10.00 -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(3) 0.18 0.37 0.29 Net Realized and Unrealized Gain (Loss) 0.61 (0.07) 0.52 -------- -------- -------- Total From Investment Operations 0.79 0.30 0.81 -------- -------- -------- Distributions From Net Investment Income (0.23) (0.35) (0.30) From Net Realized Gains (0.15) (0.01) -- -------- -------- -------- Total Distributions (0.38) (0.36) (0.30) -------- -------- -------- Net Asset Value, End of Period $10.86 $10.45 $10.51 ======== ======== ======== TOTAL RETURN(4) 7.64% 2.99% 8.14% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets(5) 0.20%(6) 0.20% 0.20%(6) Ratio of Net Investment Income (Loss) to Average Net Assets 3.41%(6) 3.51% 3.16%(6) Portfolio Turnover Rate 10% 120% 6% Net Assets, End of Period (in thousands) $36,205 $27,374 $15,572 (1) Six months ended January 31, 2007 (unaudited). (2) August 31, 2004 (fund inception) through July 31, 2005. (3) Computed using average shares outstanding throughout the period. (4) Total return assumes reinvestment of net investment income and capital gains distributions, if any. Total returns for periods less than one year are not annualized. The total return of the classes may not precisely reflect the class expense differences because of the impact of calculating the net asset values to two decimal places. If net asset values were calculated to three decimal places, the total return differences would more closely reflect the class expense differences. The calculation of net asset values to two decimal places is made in accordance with SEC guidelines and does not result in any gain or loss of value between one class and another. (5) Ratio of operating expenses to average net assets does not include any expenses of the underlying funds. (6) Annualized. See Notes to Financial Statements. - ------ 37 LIVESTRONG Income Portfolio Institutional Class For a Share Outstanding Throughout the Years Ended July 31 (except as noted) 2007(1) 2006 2005(2) PER-SHARE DATA Net Asset Value, Beginning of Period $10.45 $10.51 $10.00 -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(3) 0.19 0.37 0.34 Net Realized and Unrealized Gain (Loss) 0.61 (0.05) 0.48 -------- -------- -------- Total From Investment Operations 0.80 0.32 0.82 -------- -------- -------- Distributions From Net Investment Income (0.24) (0.37) (0.31) From Net Realized Gains (0.15) (0.01) -- -------- -------- -------- Total Distributions (0.39) (0.38) (0.31) -------- -------- -------- Net Asset Value, End of Period $10.86 $10.45 $10.51 ======== ======== ======== TOTAL RETURN(4) 7.75% 3.20% 8.31% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets(5) 0.00%(6) 0.00% 0.00%(6) Ratio of Net Investment Income (Loss) to Average Net Assets 3.61%(6) 3.71% 3.36%(6) Portfolio Turnover Rate 10% 120% 6% Net Assets, End of Period (in thousands) $5,209 $4,409 $3,169 (1) Six months ended January 31, 2007 (unaudited). (2) August 31, 2004 (fund inception) through July 31, 2005. (3) Computed using average shares outstanding throughout the period. (4) Total return assumes reinvestment of net investment income and capital gains distributions, if any. Total returns for periods less than one year are not annualized. The total return of the classes may not precisely reflect the class expense differences because of the impact of calculating the net asset values to two decimal places. If net asset values were calculated to three decimal places, the total return differences would more closely reflect the class expense differences. The calculation of net asset values to two decimal places is made in accordance with SEC guidelines and does not result in any gain or loss of value between one class and another. (5) Ratio of operating expenses to average net assets does not include any expenses of the underlying funds. (6) Annualized. See Notes to Financial Statements. - ------ 38 LIVESTRONG Income Portfolio Advisor Class For a Share Outstanding Throughout the Years Ended July 31 (except as noted) 2007(1) 2006 2005(2) PER-SHARE DATA Net Asset Value, Beginning of Period $10.45 $10.51 $10.00 -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(3) 0.18 0.33 0.18 Net Realized and Unrealized Gain (Loss) 0.59 (0.05) 0.61 -------- -------- -------- Total From Investment Operations 0.77 0.28 0.79 -------- -------- -------- Distributions From Net Investment Income (0.22) (0.33) (0.28) From Net Realized Gains (0.15) (0.01) -- -------- -------- -------- Total Distributions (0.37) (0.34) (0.28) -------- -------- -------- Net Asset Value, End of Period $10.85 $10.45 $10.51 ======== ======== ======== TOTAL RETURN(4) 7.41% 2.83% 7.82% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets(5) 0.45%(6) 0.45% 0.45%(6) Ratio of Net Investment Income (Loss) to Average Net Assets 3.16%(6) 3.26% 2.91%(6) Portfolio Turnover Rate 10% 120% 6% Net Assets, End of Period (in thousands) $6,137 $2,966 $940 (1) Six months ended January 31, 2007 (unaudited). (2) August 31, 2004 (fund inception) through July 31, 2005. (3) Computed using average shares outstanding throughout the period. (4) Total return assumes reinvestment of net investment income and capital gains distributions, if any. Total returns for periods less than one year are not annualized. The total return of the classes may not precisely reflect the class expense differences because of the impact of calculating the net asset values to two decimal places. If net asset values were calculated to three decimal places, the total return differences would more closely reflect the class expense differences. The calculation of net asset values to two decimal places is made in accordance with SEC guidelines and does not result in any gain or loss of value between one class and another. (5) Ratio of operating expenses to average net assets does not include any expenses of the underlying funds. (6) Annualized. See Notes to Financial Statements. - ------ 39 LIVESTRONG Income Portfolio R Class For a Share Outstanding Throughout the Years Ended July 31 (except as noted) 2007(1) 2006 2005(2) PER-SHARE DATA Net Asset Value, Beginning of Period $10.44 $10.50 $10.00 -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(3) 0.16 0.26 0.29 Net Realized and Unrealized Gain (Loss) 0.61 (0.01) 0.46 -------- -------- -------- Total From Investment Operations 0.77 0.25 0.75 -------- -------- -------- Distributions From Net Investment Income (0.21) (0.30) (0.25) From Net Realized Gains (0.15) (0.01) -- -------- -------- -------- Total Distributions (0.36) (0.31) (0.25) -------- -------- -------- Net Asset Value, End of Period $10.85 $10.44 $10.50 ======== ======== ======== TOTAL RETURN(4) 7.38% 2.48% 7.61% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets(5) 0.70%(6) 0.70% 0.70%(6) Ratio of Net Investment Income (Loss) to Average Net Assets 2.91%(6) 3.01% 2.66%(6) Portfolio Turnover Rate 10% 120% 6% Net Assets, End of Period (in thousands) $52 $37 $9 (1) Six months ended January 31, 2007 (unaudited). (2) August 31, 2004 (fund inception) through July 31, 2005. (3) Computed using average shares outstanding throughout the period. (4) Total return assumes reinvestment of net investment income and capital gains distributions, if any. Total returns for periods less than one year are not annualized. The total return of the classes may not precisely reflect the class expense differences because of the impact of calculating the net asset values to two decimal places. If net asset values were calculated to three decimal places, the total return differences would more closely reflect the class expense differences. The calculation of net asset values to two decimal places is made in accordance with SEC guidelines and does not result in any gain or loss of value between one class and another. (5) Ratio of operating expenses to average net assets does not include any expenses of the underlying funds. (6) Annualized. See Notes to Financial Statements. - ------ 40 LIVESTRONG 2015 Portfolio Investor Class For a Share Outstanding Throughout the Years Ended July 31 (except as noted) 2007(1) 2006 2005(2) PER-SHARE DATA Net Asset Value, Beginning of Period $11.09 $10.93 $10.00 -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(3) 0.18 0.37 0.25 Net Realized and Unrealized Gain (Loss) 0.80 0.11 0.86 -------- -------- -------- Total From Investment Operations 0.98 0.48 1.11 -------- -------- -------- Distributions From Net Investment Income (0.27) (0.31) (0.18) From Net Realized Gains (0.27) (0.01) -- -------- -------- -------- Total Distributions (0.54) (0.32) (0.18) -------- -------- -------- Net Asset Value, End of Period $11.53 $11.09 $10.93 ======== ======== ======== TOTAL RETURN(4) 8.88% 4.46% 11.17% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets(5) 0.20%(6) 0.20% 0.20%(6) Ratio of Net Investment Income (Loss) to Average Net Assets 3.14%(6) 3.27% 2.61%(6) Portfolio Turnover Rate 7% 123% 2% Net Assets, End of Period (in thousands) $115,309 $89,431 $40,717 (1) Six months ended January 31, 2007 (unaudited). (2) August 31, 2004 (fund inception) through July 31, 2005. (3) Computed using average shares outstanding throughout the period. (4) Total return assumes reinvestment of net investment income and capital gains distributions, if any. Total returns for periods less than one year are not annualized. The total return of the classes may not precisely reflect the class expense differences because of the impact of calculating the net asset values to two decimal places. If net asset values were calculated to three decimal places, the total return differences would more closely reflect the class expense differences. The calculation of net asset values to two decimal places is made in accordance with SEC guidelines and does not result in any gain or loss of value between one class and another. (5) Ratio of operating expenses to average net assets does not include any expenses of the underlying funds. (6) Annualized. See Notes to Financial Statements. - ------ 41 LIVESTRONG 2015 Portfolio Institutional Class For a Share Outstanding Throughout the Years Ended July 31 (except as noted) 2007(1) 2006 2005(2) PER-SHARE DATA Net Asset Value, Beginning of Period $11.10 $10.94 $10.00 -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(3) 0.19 0.33 0.29 Net Realized and Unrealized Gain (Loss) 0.80 0.17 0.84 -------- -------- -------- Total From Investment Operations 0.99 0.50 1.13 -------- -------- -------- Distributions From Net Investment Income (0.29) (0.33) (0.19) From Net Realized Gains (0.27) (0.01) -- -------- -------- -------- Total Distributions (0.56) (0.34) (0.19) -------- -------- -------- Net Asset Value, End of Period $11.53 $11.10 $10.94 ======== ======== ======== TOTAL RETURN(4) 8.99% 4.67% 11.32% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets(5) 0.00%(6) 0.00% 0.00%(6) Ratio of Net Investment Income (Loss) to Average Net Assets 3.34%(6) 3.47% 2.81%(6) Portfolio Turnover Rate 7% 123% 2% Net Assets, End of Period (in thousands) $12,875 $10,439 $3,011 (1) Six months ended January 31, 2007 (unaudited). (2) August 31, 2004 (fund inception) through July 31, 2005. (3) Computed using average shares outstanding throughout the period. (4) Total return assumes reinvestment of net investment income and capital gains distributions, if any. Total returns for periods less than one year are not annualized. The total return of the classes may not precisely reflect the class expense differences because of the impact of calculating the net asset values to two decimal places. If net asset values were calculated to three decimal places, the total return differences would more closely reflect the class expense differences. The calculation of net asset values to two decimal places is made in accordance with SEC guidelines and does not result in any gain or loss of value between one class and another. (5) Ratio of operating expenses to average net assets does not include any expenses of the underlying funds. (6) Annualized. See Notes to Financial Statements. - ------ 42 LIVESTRONG 2015 Portfolio Advisor Class For a Share Outstanding Throughout the Years Ended July 31 (except as noted) 2007(1) 2006 2005(2) PER-SHARE DATA Net Asset Value, Beginning of Period $11.07 $10.91 $10.00 -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(3) 0.18 0.31 0.17 Net Realized and Unrealized Gain (Loss) 0.78 0.14 0.91 -------- -------- -------- Total From Investment Operations 0.96 0.45 1.08 -------- -------- -------- Distributions From Net Investment Income (0.24) (0.28) (0.17) From Net Realized Gains (0.27) (0.01) -- -------- -------- -------- Total Distributions (0.51) (0.29) (0.17) -------- -------- -------- Net Asset Value, End of Period $11.52 $11.07 $10.91 ======== ======== ======== TOTAL RETURN(4) 8.71% 4.22% 10.88% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets(5) 0.45%(6) 0.45% 0.45%(6) Ratio of Net Investment Income (Loss) to Average Net Assets 2.89%(6) 3.02% 2.36%(6) Portfolio Turnover Rate 7% 123% 2% Net Assets, End of Period (in thousands) $16,156 $9,556 $323 (1) Six months ended January 31, 2007 (unaudited). (2) August 31, 2004 (fund inception) through July 31, 2005. (3) Computed using average shares outstanding throughout the period. (4) Total return assumes reinvestment of net investment income and capital gains distributions, if any. Total returns for periods less than one year are not annualized. The total return of the classes may not precisely reflect the class expense differences because of the impact of calculating the net asset values to two decimal places. If net asset values were calculated to three decimal places, the total return differences would more closely reflect the class expense differences. The calculation of net asset values to two decimal places is made in accordance with SEC guidelines and does not result in any gain or loss of value between one class and another. (5) Ratio of operating expenses to average net assets does not include any expenses of the underlying funds. (6) Annualized. See Notes to Financial Statements. - ------ 43 LIVESTRONG 2015 Portfolio R Class For a Share Outstanding Throughout the Years Ended July 31 (except as noted) 2007(1) 2006 2005(2) PER-SHARE DATA Net Asset Value, Beginning of Period $11.06 $10.90 $10.00 -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(3) 0.16 0.19 0.24 Net Realized and Unrealized Gain (Loss) 0.78 0.23 0.82 -------- -------- -------- Total From Investment Operations 0.94 0.42 1.06 -------- -------- -------- Distributions From Net Investment Income (0.21) (0.25) (0.16) From Net Realized Gains (0.27) (0.01) -- -------- -------- -------- Total Distributions (0.48) (0.26) (0.16) -------- -------- -------- Net Asset Value, End of Period $11.52 $11.06 $10.90 ======== ======== ======== TOTAL RETURN(4) 8.53% 4.05% 10.59% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets(5) 0.70%(6) 0.70% 0.70%(6) Ratio of Net Investment Income (Loss) to Average Net Assets 2.64%(6) 2.77% 2.11%(6) Portfolio Turnover Rate 7% 123% 2% Net Assets, End of Period (in thousands) $584 $351 $14 (1) Six months ended January 31, 2007 (unaudited). (2) August 31, 2004 (fund inception) through July 31, 2005. (3) Computed using average shares outstanding throughout the period. (4) Total return assumes reinvestment of net investment income and capital gains distributions, if any. Total returns for periods less than one year are not annualized. The total return of the classes may not precisely reflect the class expense differences because of the impact of calculating the net asset values to two decimal places. If net asset values were calculated to three decimal places, the total return differences would more closely reflect the class expense differences. The calculation of net asset values to two decimal places is made in accordance with SEC guidelines and does not result in any gain or loss of value between one class and another. (5) Ratio of operating expenses to average net assets does not include any expenses of the underlying funds. (6) Annualized. See Notes to Financial Statements. - ------ 44 LIVESTRONG 2025 Portfolio Investor Class For a Share Outstanding Throughout the Years Ended July 31 (except as noted) 2007(1) 2006 2005(2) PER-SHARE DATA Net Asset Value, Beginning of Period $11.49 $11.21 $10.00 -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(3) 0.16 0.34 0.18 Net Realized and Unrealized Gain (Loss) 1.02 0.27 1.17 -------- -------- -------- Total From Investment Operations 1.18 0.61 1.35 -------- -------- -------- Distributions From Net Investment Income (0.24) (0.31) (0.14) From Net Realized Gains (0.52) (0.02) -- -------- -------- -------- Total Distributions (0.76) (0.33) (0.14) -------- -------- -------- Net Asset Value, End of Period $11.91 $11.49 $11.21 ======== ======== ======== TOTAL RETURN(4) 10.37% 5.48% 13.57% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets(5) 0.20%(6) 0.20% 0.20%(6) Ratio of Net Investment Income (Loss) to Average Net Assets 2.73%(6) 2.98% 2.08%(6) Portfolio Turnover Rate 6% 120% 2% Net Assets, End of Period (in thousands) $148,615 $112,202 $53,285 (1) Six months ended January 31, 2007 (unaudited). (2) August 31, 2004 (fund inception) through July 31, 2005. (3) Computed using average shares outstanding throughout the period. (4) Total return assumes reinvestment of net investment income and capital gains distributions, if any. Total returns for periods less than one year are not annualized. The total return of the classes may not precisely reflect the class expense differences because of the impact of calculating the net asset values to two decimal places. If net asset values were calculated to three decimal places, the total return differences would more closely reflect the class expense differences. The calculation of net asset values to two decimal places is made in accordance with SEC guidelines and does not result in any gain or loss of value between one class and another. (5) Ratio of operating expenses to average net assets does not include any expenses of the underlying funds. (6) Annualized. See Notes to Financial Statements. - ------ 45 LIVESTRONG 2025 Portfolio Institutional Class For a Share Outstanding Throughout the Years Ended July 31 (except as noted) 2007(1) 2006 2005(2) PER-SHARE DATA Net Asset Value, Beginning of Period $11.51 $11.23 $10.00 -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(3) 0.17 0.37 0.27 Net Realized and Unrealized Gain (Loss) 1.02 0.26 1.11 -------- -------- -------- Total From Investment Operations 1.19 0.63 1.38 -------- -------- -------- Distributions From Net Investment Income (0.27) (0.33) (0.15) From Net Realized Gains (0.52) (0.02) -- -------- -------- -------- Total Distributions (0.79) (0.35) (0.15) -------- -------- -------- Net Asset Value, End of Period $11.91 $11.51 $11.23 ======== ======== ======== TOTAL RETURN(4) 10.40% 5.77% 13.74% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets(5) 0.00%(6) 0.00% 0.00%(6) Ratio of Net Investment Income (Loss) to Average Net Assets 2.93%(6) 3.18% 2.28%(6) Portfolio Turnover Rate 6% 120% 2% Net Assets, End of Period (in thousands) $38,629 $31,399 $21,458 (1) Six months ended January 31, 2007 (unaudited). (2) August 31, 2004 (fund inception) through July 31, 2005. (3) Computed using average shares outstanding throughout the period. (4) Total return assumes reinvestment of net investment income and capital gains distributions, if any. Total returns for periods less than one year are not annualized. The total return of the classes may not precisely reflect the class expense differences because of the impact of calculating the net asset values to two decimal places. If net asset values were calculated to three decimal places, the total return differences would more closely reflect the class expense differences. The calculation of net asset values to two decimal places is made in accordance with SEC guidelines and does not result in any gain or loss of value between one class and another. (5) Ratio of operating expenses to average net assets does not include any expenses of the underlying funds. (6) Annualized. See Notes to Financial Statements. - ------ 46 LIVESTRONG 2025 Portfolio Advisor Class For a Share Outstanding Throughout the Years Ended July 31 (except as noted) 2007(1) 2006 2005(2) PER-SHARE DATA Net Asset Value, Beginning of Period $11.48 $11.19 $10.00 -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(3) 0.16 0.29 0.12 Net Realized and Unrealized Gain (Loss) 1.00 0.30 1.20 -------- -------- -------- Total From Investment Operations 1.16 0.59 1.32 -------- -------- -------- Distributions From Net Investment Income (0.21) (0.28) (0.13) From Net Realized Gains (0.52) (0.02) -- -------- -------- -------- Total Distributions (0.73) (0.30) (0.13) -------- -------- -------- Net Asset Value, End of Period $11.91 $11.48 $11.19 ======== ======== ======== TOTAL RETURN(4) 10.19% 5.30% 13.28% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets(5) 0.45%(6) 0.45% 0.45%(6) Ratio of Net Investment Income (Loss) to Average Net Assets 2.48%(6) 2.73% 1.83%(6) Portfolio Turnover Rate 6% 120% 2% Net Assets, End of Period (in thousands) $13,199 $7,404 $388 (1) Six months ended January 31, 2007 (unaudited). (2) August 31, 2004 (fund inception) through July 31, 2005. (3) Computed using average shares outstanding throughout the period. (4) Total return assumes reinvestment of net investment income and capital gains distributions, if any. Total returns for periods less than one year are not annualized. The total return of the classes may not precisely reflect the class expense differences because of the impact of calculating the net asset values to two decimal places. If net asset values were calculated to three decimal places, the total return differences would more closely reflect the class expense differences. The calculation of net asset values to two decimal places is made in accordance with SEC guidelines and does not result in any gain or loss of value between one class and another. (5) Ratio of operating expenses to average net assets does not include any expenses of the underlying funds. (6) Annualized. See Notes to Financial Statements. - ------ 47 LIVESTRONG 2025 Portfolio R Class For a Share Outstanding Throughout the Years Ended July 31 (except as noted) 2007(1) 2006 2005(2) PER-SHARE DATA Net Asset Value, Beginning of Period $11.46 $11.18 $10.00 -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(3) 0.14 0.19 0.15 Net Realized and Unrealized Gain (Loss) 1.01 0.36 1.15 -------- -------- -------- Total From Investment Operations 1.15 0.55 1.30 -------- -------- -------- Distributions From Net Investment Income (0.18) (0.25) (0.12) From Net Realized Gains (0.52) (0.02) -- -------- -------- -------- Total Distributions (0.70) (0.27) (0.12) -------- -------- -------- Net Asset Value, End of Period $11.91 $11.46 $11.18 ======== ======== ======== TOTAL RETURN(4) 10.11% 4.95% 13.10% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets(5) 0.70%(6) 0.70% 0.70%(6) Ratio of Net Investment Income (Loss) to Average Net Assets 2.23%(6) 2.48% 1.58%(6) Portfolio Turnover Rate 6% 120% 2% Net Assets, End of Period (in thousands) $1,040 $545 $65 (1) Six months ended January 31, 2007 (unaudited). (2) August 31, 2004 (fund inception) through July 31, 2005. (3) Computed using average shares outstanding throughout the period. (4) Total return assumes reinvestment of net investment income and capital gains distributions, if any. Total returns for periods less than one year are not annualized. The total return of the classes may not precisely reflect the class expense differences because of the impact of calculating the net asset values to two decimal places. If net asset values were calculated to three decimal places, the total return differences would more closely reflect the class expense differences. The calculation of net asset values to two decimal places is made in accordance with SEC guidelines and does not result in any gain or loss of value between one class and another. (5) Ratio of operating expenses to average net assets does not include any expenses of the underlying funds. (6) Annualized. See Notes to Financial Statements. - ------ 48 LIVESTRONG 2035 Portfolio Investor Class For a Share Outstanding Throughout the Years Ended July 31 (except as noted) 2007(1) 2006 2005(2) PER-SHARE DATA Net Asset Value, Beginning of Period $11.85 $11.43 $10.00 -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(3) 0.15 0.31 0.17 Net Realized and Unrealized Gain (Loss) 1.26 0.42 1.39 -------- -------- -------- Total From Investment Operations 1.41 0.73 1.56 -------- -------- -------- Distributions From Net Investment Income (0.19) (0.30) (0.13) From Net Realized Gains (0.52) (0.01) -- -------- -------- -------- Total Distributions (0.71) (0.31) (0.13) -------- -------- -------- Net Asset Value, End of Period $12.55 $11.85 $11.43 ======== ======== ======== TOTAL RETURN(4) 12.04% 6.45% 15.71% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets(5) 0.20%(6) 0.20% 0.20%(6) Ratio of Net Investment Income (Loss) to Average Net Assets 2.39%(6) 2.61% 1.62%(6) Portfolio Turnover Rate 9% 141% 3% Net Assets, End of Period (in thousands) $73,760 $52,206 $21,537 (1) Six months ended January 31, 2007 (unaudited). (2) August 31, 2004 (fund inception) through July 31, 2005. (3) Computed using average shares outstanding throughout the period. (4) Total return assumes reinvestment of net investment income and capital gains distributions, if any. Total returns for periods less than one year are not annualized. The total return of the classes may not precisely reflect the class expense differences because of the impact of calculating the net asset values to two decimal places. If net asset values were calculated to three decimal places, the total return differences would more closely reflect the class expense differences. The calculation of net asset values to two decimal places is made in accordance with SEC guidelines and does not result in any gain or loss of value between one class and another. (5) Ratio of operating expenses to average net assets does not include any expenses of the underlying funds. (6) Annualized. See Notes to Financial Statements. - ------ 49 LIVESTRONG 2035 Portfolio Institutional Class For a Share Outstanding Throughout the Years Ended July 31 (except as noted) 2007(1) 2006 2005(2) PER-SHARE DATA Net Asset Value, Beginning of Period $11.87 $11.45 $10.00 -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(3) 0.16 0.30 0.16 Net Realized and Unrealized Gain (Loss) 1.27 0.45 1.43 -------- -------- -------- Total From Investment Operations 1.43 0.75 1.59 -------- -------- -------- Distributions From Net Investment Income (0.22) (0.32) (0.14) From Net Realized Gains (0.52) (0.01) -- -------- -------- -------- Total Distributions (0.74) (0.33) (0.14) -------- -------- -------- Net Asset Value, End of Period $12.56 $11.87 $11.45 ======== ======== ======== TOTAL RETURN(4) 12.15% 6.66% 15.98% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets(5) 0.00%(6) 0.00% 0.00%(6) Ratio of Net Investment Income (Loss) to Average Net Assets 2.59%(6) 2.81% 1.82%(6) Portfolio Turnover Rate 9% 141% 3% Net Assets, End of Period (in thousands) $16,471 $11,104 $3,435 (1) Six months ended January 31, 2007 (unaudited). (2) August 31, 2004 (fund inception) through July 31, 2005. (3) Computed using average shares outstanding throughout the period. (4) Total return assumes reinvestment of net investment income and capital gains distributions, if any. Total returns for periods less than one year are not annualized. The total return of the classes may not precisely reflect the class expense differences because of the impact of calculating the net asset values to two decimal places. If net asset values were calculated to three decimal places, the total return differences would more closely reflect the class expense differences. The calculation of net asset values to two decimal places is made in accordance with SEC guidelines and does not result in any gain or loss of value between one class and another. (5) Ratio of operating expenses to average net assets does not include any expenses of the underlying funds. (6) Annualized. See Notes to Financial Statements. - ------ 50 LIVESTRONG 2035 Portfolio Advisor Class For a Share Outstanding Throughout the Years Ended July 31 (except as noted) 2007(1) 2006 2005(2) PER-SHARE DATA Net Asset Value, Beginning of Period $11.83 $11.42 $10.00 -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(3) 0.14 0.26 0.11 Net Realized and Unrealized Gain (Loss) 1.26 0.43 1.44 -------- -------- -------- Total From Investment Operations 1.40 0.69 1.55 -------- -------- -------- Distributions From Net Investment Income (0.16) (0.27) (0.13) From Net Realized Gains (0.52) (0.01) -- -------- -------- -------- Total Distributions (0.68) (0.28) (0.13) -------- -------- -------- Net Asset Value, End of Period $12.55 $11.83 $11.42 ======== ======== ======== TOTAL RETURN(4) 11.94% 6.10% 15.53% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets(5) 0.45%(6) 0.45% 0.45%(6) Ratio of Net Investment Income (Loss) to Average Net Assets 2.14%(6) 2.36% 1.37%(6) Portfolio Turnover Rate 9% 141% 3% Net Assets, End of Period (in thousands) $9,357 $5,224 $113 (1) Six months ended January 31, 2007 (unaudited). (2) August 31, 2004 (fund inception) through July 31, 2005. (3) Computed using average shares outstanding throughout the period. (4) Total return assumes reinvestment of net investment income and capital gains distributions, if any. Total returns for periods less than one year are not annualized. The total return of the classes may not precisely reflect the class expense differences because of the impact of calculating the net asset values to two decimal places. If net asset values were calculated to three decimal places, the total return differences would more closely reflect the class expense differences. The calculation of net asset values to two decimal places is made in accordance with SEC guidelines and does not result in any gain or loss of value between one class and another. (5) Ratio of operating expenses to average net assets does not include any expenses of the underlying funds. (6) Annualized. See Notes to Financial Statements. - ------ 51 LIVESTRONG 2035 Portfolio R Class For a Share Outstanding Throughout the Years Ended July 31 (except as noted) 2007(1) 2006 2005(2) PER-SHARE DATA Net Asset Value, Beginning of Period $11.82 $11.40 $10.00 -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(3) 0.13 0.16 0.22 Net Realized and Unrealized Gain (Loss) 1.25 0.51 1.30 -------- -------- -------- Total From Investment Operations 1.38 0.67 1.52 -------- -------- -------- Distributions From Net Investment Income (0.13) (0.24) (0.12) From Net Realized Gains (0.52) (0.01) -- -------- -------- -------- Total Distributions (0.65) (0.25) (0.12) -------- -------- -------- Net Asset Value, End of Period $12.55 $11.82 $11.40 ======== ======== ======== TOTAL RETURN(4) 11.76% 5.93% 15.24% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets(5) 0.70%(6) 0.70% 0.70%(6) Ratio of Net Investment Income (Loss) to Average Net Assets 1.89%(6) 2.11% 1.12%(6) Portfolio Turnover Rate 9% 141% 3% Net Assets, End of Period (in thousands) $646 $296 $6 (1) Six months ended January 31, 2007 (unaudited). (2) August 31, 2004 (fund inception) through July 31, 2005. (3) Computed using average shares outstanding throughout the period. (4) Total return assumes reinvestment of net investment income and capital gains distributions, if any. Total returns for periods less than one year are not annualized. The total return of the classes may not precisely reflect the class expense differences because of the impact of calculating the net asset values to two decimal places. If net asset values were calculated to three decimal places, the total return differences would more closely reflect the class expense differences. The calculation of net asset values to two decimal places is made in accordance with SEC guidelines and does not result in any gain or loss of value between one class and another. (5) Ratio of operating expenses to average net assets does not include any expenses of the underlying funds. (6) Annualized. See Notes to Financial Statements. - ------ 52 LIVESTRONG 2045 Portfolio Investor Class For a Share Outstanding Throughout the Years Ended July 31 (except as noted) 2007(1) 2006 2005(2) PER-SHARE DATA Net Asset Value, Beginning of Period $11.96 $11.54 $10.00 -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(3) 0.15 0.31 0.12 Net Realized and Unrealized Gain (Loss) 1.39 0.46 1.56 -------- -------- -------- Total From Investment Operations 1.54 0.77 1.68 -------- -------- -------- Distributions From Net Investment Income (0.17) (0.32) (0.14) From Net Realized Gains (0.53) (0.03) -- -------- -------- -------- Total Distributions (0.70) (0.35) (0.14) -------- -------- -------- Net Asset Value, End of Period $12.80 $11.96 $11.54 ======== ======== ======== TOTAL RETURN(4) 12.94% 6.76% 16.86% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets(5) 0.20%(6) 0.20% 0.20%(6) Ratio of Net Investment Income (Loss) to Average Net Assets 2.26%(6) 2.62% 1.83%(6) Portfolio Turnover Rate 7% 137% 17% Net Assets, End of Period (in thousands) $39,935 $22,437 $7,465 (1) Six months ended January 31, 2007 (unaudited). (2) August 31, 2004 (fund inception) through July 31, 2005. (3) Computed using average shares outstanding throughout the period. (4) Total return assumes reinvestment of net investment income and capital gains distributions, if any. Total returns for periods less than one year are not annualized. The total return of the classes may not precisely reflect the class expense differences because of the impact of calculating the net asset values to two decimal places. If net asset values were calculated to three decimal places, the total return differences would more closely reflect the class expense differences. The calculation of net asset values to two decimal places is made in accordance with SEC guidelines and does not result in any gain or loss of value between one class and another. (5) Ratio of operating expenses to average net assets does not include any expenses of the underlying funds. (6) Annualized. See Notes to Financial Statements. - ------ 53 LIVESTRONG 2045 Portfolio Institutional Class For a Share Outstanding Throughout the Years Ended July 31 (except as noted) 2007(1) 2006 2005(2) PER-SHARE DATA Net Asset Value, Beginning of Period $11.98 $11.56 $10.00 -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(3) 0.15 0.35 0.25 Net Realized and Unrealized Gain (Loss) 1.39 0.44 1.45 -------- -------- -------- Total From Investment Operations 1.54 0.79 1.70 -------- -------- -------- Distributions From Net Investment Income (0.19) (0.34) (0.14) From Net Realized Gains (0.53) (0.03) -- -------- -------- -------- Total Distributions (0.72) (0.37) (0.14) -------- -------- -------- Net Asset Value, End of Period $12.80 $11.98 $11.56 ======== ======== ======== TOTAL RETURN(4) 12.97% 6.96% 17.11% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets(5) 0.00%(6) 0.00% 0.00%(6) Ratio of Net Investment Income (Loss) to Average Net Assets 2.46%(6) 2.82% 2.03%(6) Portfolio Turnover Rate 7% 137% 17% Net Assets, End of Period (in thousands) $18,700 $13,397 $7,181 (1) Six months ended January 31, 2007 (unaudited). (2) August 31, 2004 (fund inception) through July 31, 2005. (3) Computed using average shares outstanding throughout the period. (4) Total return assumes reinvestment of net investment income and capital gains distributions, if any. Total returns for periods less than one year are not annualized. The total return of the classes may not precisely reflect the class expense differences because of the impact of calculating the net asset values to two decimal places. If net asset values were calculated to three decimal places, the total return differences would more closely reflect the class expense differences. The calculation of net asset values to two decimal places is made in accordance with SEC guidelines and does not result in any gain or loss of value between one class and another. (5) Ratio of operating expenses to average net assets does not include any expenses of the underlying funds. (6) Annualized. See Notes to Financial Statements. - ------ 54 LIVESTRONG 2045 Portfolio Advisor Class For a Share Outstanding Throughout the Years Ended July 31 (except as noted) 2007(1) 2006 2005(2) PER-SHARE DATA Net Asset Value, Beginning of Period $11.94 $11.53 $10.00 -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(3) 0.13 0.20 0.07 Net Realized and Unrealized Gain (Loss) 1.39 0.53 1.59 -------- -------- -------- Total From Investment Operations 1.52 0.73 1.66 -------- -------- -------- Distributions From Net Investment Income (0.13) (0.29) (0.13) From Net Realized Gains (0.53) (0.03) -- -------- -------- -------- Total Distributions (0.66) (0.32) (0.13) -------- -------- -------- Net Asset Value, End of Period $12.80 $11.94 $11.53 ======== ======== ======== TOTAL RETURN(4) 12.84% 6.51% 16.57% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets(5) 0.45%(6) 0.45% 0.45%(6) Ratio of Net Investment Income (Loss) to Average Net Assets 2.01%(6) 2.37% 1.58%(6) Portfolio Turnover Rate 7% 137% 17% Net Assets, End of Period (in thousands) $5,937 $4,177 $380 (1) Six months ended January 31, 2007 (unaudited). (2) August 31, 2004 (fund inception) through July 31, 2005. (3) Computed using average shares outstanding throughout the period. (4) Total return assumes reinvestment of net investment income and capital gains distributions, if any. Total returns for periods less than one year are not annualized. The total return of the classes may not precisely reflect the class expense differences because of the impact of calculating the net asset values to two decimal places. If net asset values were calculated to three decimal places, the total return differences would more closely reflect the class expense differences. The calculation of net asset values to two decimal places is made in accordance with SEC guidelines and does not result in any gain or loss of value between one class and another. (5) Ratio of operating expenses to average net assets does not include any expenses of the underlying funds. (6) Annualized. See Notes to Financial Statements. - ------ 55 LIVESTRONG 2045 Portfolio R Class For a Share Outstanding Throughout the Years Ended July 31 (except as noted) 2007(1) 2006 2005(2) PER-SHARE DATA Net Asset Value, Beginning of Period $11.93 $11.51 $10.00 -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(3) 0.11 0.12 0.18 Net Realized and Unrealized Gain (Loss) 1.38 0.59 1.45 -------- -------- -------- Total From Investment Operations 1.49 0.71 1.63 -------- -------- -------- Distributions From Net Investment Income (0.10) (0.26) (0.12) From Net Realized Gains (0.53) (0.03) -- -------- -------- -------- Total Distributions (0.63) (0.29) (0.12) -------- -------- -------- Net Asset Value, End of Period $12.79 $11.93 $11.51 ======== ======== ======== TOTAL RETURN(4) 12.57% 6.24% 16.38% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets(5) 0.70%(6) 0.70% 0.70%(6) Ratio of Net Investment Income (Loss) to Average Net Assets 1.76%(6) 2.12% 1.33%(6) Portfolio Turnover Rate 7% 137% 17% Net Assets, End of Period (in thousands) $527 $165 $6 (1) Six months ended January 31, 2007 (unaudited). (2) August 31, 2004 (fund inception) through July 31, 2005. (3) Computed using average shares outstanding throughout the period. (4) Total return assumes reinvestment of net investment income and capital gains distributions, if any. Total returns for periods less than one year are not annualized. The total return of the classes may not precisely reflect the class expense differences because of the impact of calculating the net asset values to two decimal places. If net asset values were calculated to three decimal places, the total return differences would more closely reflect the class expense differences. The calculation of net asset values to two decimal places is made in accordance with SEC guidelines and does not result in any gain or loss of value between one class and another. (5) Ratio of operating expenses to average net assets does not include any expenses of the underlying funds. (6) Annualized. See Notes to Financial Statements. - ------ 56 SHARE CLASS INFORMATION Four classes of shares are authorized for sale by the funds: Investor Class, Institutional Class, Advisor Class and R Class. The total expense ratio of Institutional Class shares is lower than that of Investor Class shares; the total expense ratios of the Advisor Class and R Class shares is higher than that of Investor Class shares. INVESTOR CLASS shares are available for purchase in two ways: 1) directly from American Century without any commissions or other fees; or 2) through certain financial intermediaries (such as banks, broker-dealers, insurance companies and investment advisors), which may require payment of a transaction fee to the financial intermediary. INSTITUTIONAL CLASS shares are available to large investors such as endowments, foundations, and retirement plans, and to financial intermediaries serving these investors. This class recognizes the relatively lower cost of serving institutional customers and others who invest at least $5 million ($3 million for endowments and foundations) in an American Century fund or at least $10 million in multiple funds. In recognition of the larger investments and account balances and comparatively lower transaction costs, the total expense ratio of Institutional Class shares is 0.20% less than the total expense ratio of Investor Class shares. ADVISOR CLASS shares are sold primarily through institutions such as investment advisors, banks, broker-dealers, insurance companies, and financial advisors. Advisor Class shares are subject to a 0.25% annual Rule 12b-1 distribution and service fee. The total expense ratio of Advisor Class shares is 0.25% higher than the total expense ratio of Investor Class shares. R CLASS shares are sold primarily through employer-sponsored retirement plans and through institutions such as investment advisors, banks, broker-dealers, and insurance companies. R Class shares are subject to a 0.50% annual Rule 12b-1 distribution and service fee. The total expense ratio of R Class shares is 0.50% higher than the total expense ratio of Investor Class shares. All classes of shares represent a pro rata interest in the funds and generally have the same rights and preferences. - ------ 57 ADDITIONAL INFORMATION RETIREMENT ACCOUNT INFORMATION As required by law, any distributions you receive from an IRA or certain 403(b), 457 and qualified plans [those not eligible for rollover to an IRA or to another qualified plan] 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. Even if you plan to roll over the amount you withdraw to another tax-deferred account, the withholding rate still applies to the withdrawn amount unless we have received notice not to withhold federal income tax prior to the withdrawal. You may notify us in writing or in certain situations by telephone or through other electronic means. You have the right to revoke your withholding election at any time and any election you make may remain in effect until revoked by filing a new election. 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. 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. State taxes will be withheld from your distribution in accordance with the respective state rules. PROXY VOTING GUIDELINES American Century Investment Management, Inc., the funds' investment advisor, is responsible for exercising the voting rights associated with the securities purchased and/or held by the funds. A description of the policies and procedures the advisor uses in fulfilling this responsibility is available without charge, upon request, by calling 1-800-345-2021. It is also available on American Century's website at americancentury.com and on the Securities and Exchange Commission's website at sec.gov. Information regarding how the investment advisor voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the "About Us" page at americancentury.com. It is also available at sec.gov. QUARTERLY PORTFOLIO DISCLOSURE The funds file their complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-Q. The funds' Forms N-Q are available on the SEC's website at sec.gov, and may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The funds also make their complete schedule of portfolio holdings for the most recent quarter of their fiscal year available on their website at americancentury.com and, upon request, by calling 1-800-345-2021. - ------ 58 INDEX DEFINITIONS The following indices are used to illustrate investment market, sector, or style performance or to serve as fund performance comparisons. They are not investment products available for purchase. The 90-DAY U.S. TREASURY BILL INDEX is derived from secondary market interest rates as published by the Federal Reserve Bank and includes three-month, six-month, and one-year instruments. The CITIGROUP NON-U.S. WORLD GOVERNMENT BOND INDEX is based on the Citigroup World Bond Index, and excludes issues denominated in U.S. dollars. The index measures the total return of government securities in major sectors of the international bond market. The CITIGROUP US BROAD INVESTMENT-GRADE (BIG) BOND INDEX is a market- capitalization-weighted index that includes fixed-rate Treasury, government- sponsored, mortgage, asset-backed, and investment-grade issues with a maturity of one year or longer. The LEHMAN BROTHERS U.S. AGGREGATE INDEX represents securities that are taxable, registered with the Securities and Exchange Commission, and U.S. dollar-denominated. The index covers the U.S. investment-grade fixed-rate bond market, with index components for government and corporate securities, mortgage pass-through securities, and asset-backed securities. Morgan Stanley Capital International (MSCI) has developed several indices that measure the performance of foreign stock markets. The MSCI EAFE® (Europe, Australasia, Far East) INDEX is designed to measure developed market equity performance, excluding the U.S. and Canada. The MSCI EM® (Emerging Markets) INDEX represents the performance of stocks in global emerging market countries. The RUSSELL 1000® INDEX is a market-capitalization weighted, large-cap index created by Frank Russell Company to measure the performance of the 1,000 largest companies in the Russell 3000 Index (the 3,000 largest publicly traded U.S. companies, based on total market capitalization). The RUSSELL 2000® INDEX is a market-capitalization weighted index created by Frank Russell Company to measure the performance of the 2,000 smallest of the 3,000 largest publicly traded U.S. companies, based on total market capitalization. The RUSSELL 3000® INDEX measures the performance of the 3,000 largest U.S. companies based on total market capitalization, which represents approximately 98% of the investable U.S. equity market. The RUSSELL MIDCAP® INDEX measures the performance of the 800 smallest of the 1,000 largest publicly traded U.S. companies, based on total market capitalization. The S&P 500 INDEX is a market value-weighted index of the stocks of 500 publicly traded U.S. companies chosen for market size, liquidity, and industry group representation that are considered to be leading firms in dominant industries. Each stock's weight in the index is proportionate to its market value. Created by Standard & Poor's, it is considered to be a broad measure of U.S. stock market performance. - ------ 59 NOTES - ------ 60 CONTACT US AMERICANCENTURY.COM AUTOMATED INFORMATION LINE: 1-800-345-8765 INVESTOR SERVICES REPRESENTATIVE: 1-800-345-2021 or 816-531-5575 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 DEVICE FOR THE DEAF: 1-800-634-4113 or 816-444-3485 AMERICAN CENTURY ASSET ALLOCATION PORTFOLIOS, 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. American Century Investment Services, Inc., Distributor ©2007 American Century Proprietary Holdings, Inc. All rights reserved. The American Century Investments logo, American Century and American Century Investments are service marks of American Century Proprietary Holdings, Inc. 0703 SH-SAN-53521N
AMERICAN CENTURY INVESTMENTS Semiannual Report January 31, 2007 [photo of winter] One Choice Portfolio(SM): Very Conservative One Choice Portfolio(SM): Conservative One Choice Portfolio(SM): Moderate One Choice Portfolio(SM): Aggressive One Choice Portfolio(SM): Very Aggressive [american century investments logo and text logo] OUR MESSAGE TO YOU We have the privilege of providing you with the semiannual report for the American Century One Choice Portfolios for the six months ended January 31, 2007. We've gathered this information to help you monitor your investment. Another resource is our website, americancentury.com, where we post company news, portfolio commentaries, investment views, and other communications about portfolio strategy, personal finance, government policy, and the markets. Speaking of company news, American Century announced the following leadership changes. Chief Investment Officer Mark Mallon retired in the first quarter of 2007, after nearly a decade at American Century. Effective January 1, 2007, former International Equity CIO Enrique Chang became CIO with responsibilities for the entire investment management operation. Prior to joining American Century in 2006, Enrique worked at Munder Capital Management, serving the last four years as president and CIO. Before that, he held a series of senior investment management positions at Vantage Global Advisors, J.&W. Seligman and Co., and General Reinsurance Corp. In January 2007, President and Chief Executive Officer Bill Lyons announced his retirement after nearly 20 years at American Century. Chief Financial Officer Jonathan Thomas was appointed president and CEO effective March 1, 2007. Since 2005, Jonathan has overseen American Century's financial area, with additional responsibilities in purchasing, facilities, real estate, information technology, operations, and human resources. Before joining American Century, Jonathan was a managing director and global chief operating officer of Morgan Stanley's investment division, and worked in senior leadership roles for Bank of America, Boston Financial Services, and Fidelity Investments. We wish to thank Mark and Bill for their many years of distinguished service - -- American Century is a stronger company as a result of their hard work. And we firmly believe their roles in our firm have transitioned to two talented, committed, and experienced top executives. [photo of James E. Stowers III and James E. Stowers, Jr.] /s/James E Stowers, Jr. James E. Stowers, Jr. FOUNDER AND CO-CHAIRMAN OF THE BOARD AMERICAN CENTURY COMPANIES, INC. /s/James E Stowers III James E. Stowers III VICE CHAIRMAN OF THE BOARD AMERICAN CENTURY COMPANIES, INC. Table of Contents ONE CHOICE PORTFOLIOS Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Portfolio Commentary. . . . . . . . . . . . . . . . . . . . . . . . . 6 Market Index Total Returns . . . . . . . . . . . . . . . . . . . . . 6 Underlying Fund Allocations. . . . . . . . . . . . . . . . . . . . . 7 Types of Investments in Portfolios . . . . . . . . . . . . . . . . . 8 Shareholder Fee Example . . . . . . . . . . . . . . . . . . . . . . . 10 Schedule of Investments . . . . . . . . . . . . . . . . . . . . . . . 12 FINANCIAL STATEMENTS Statement of Assets and Liabilities . . . . . . . . . . . . . . . . . 15 Statement of Operations . . . . . . . . . . . . . . . . . . . . . . . 17 Statement of Changes in Net Assets. . . . . . . . . . . . . . . . . . 19 Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . 22 Financial Highlights. . . . . . . . . . . . . . . . . . . . . . . . . 28 OTHER INFORMATION Additional Information. . . . . . . . . . . . . . . . . . . . . . . . 33 Index Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . 34 The opinions expressed in the Portfolio Commentary reflect those of the portfolio management team as of the date of the report, and do not necessarily represent the opinions of American Century or any other person in the American Century organization. Any such opinions are subject to change at any time based upon market or other conditions and American Century 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 funds are based on numerous factors, may not be relied upon as an indication of trading intent on behalf of any American Century 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 by third party vendors. To the best of American Century's knowledge, such information is accurate at the time of printing. PERFORMANCE One Choice Portfolios Total Returns as of January 31, 2007 Average Annual Returns Since Inception 6 months(1) 1 year Inception Date ONE CHOICE PORTFOLIO: VERY CONSERVATIVE -- INVESTOR CLASS 5.41% 6.75% 6.07% 9/30/04 ONE CHOICE PORTFOLIO: CONSERVATIVE -- INVESTOR CLASS 7.73% 8.46% 8.73% 9/30/04 ONE CHOICE PORTFOLIO: MODERATE -- INVESTOR CLASS 10.29% 10.41% 12.41% 9/30/04 ONE CHOICE PORTFOLIO: AGGRESSIVE -- INVESTOR CLASS 12.45% 11.32% 14.70% 9/30/04 ONE CHOICE PORTFOLIO: VERY AGGRESSIVE -- INVESTOR CLASS 14.18% 12.62% 16.93% 9/30/04 RUSSELL 3000 INDEX(2) 14.33% 14.11% 14.75% -- CITIGROUP US BROAD INVESTMENT-GRADE BOND INDEX(2)(3) 3.67% 4.32% 3.38% -- LEHMAN BROTHERS U.S. AGGREGATE INDEX(2)(3) 3.65% 4.28% 3.29% -- (1) Total returns for periods less than one year are not annualized. (2) Data provided by Lipper Inc. - A Reuters Company. © 2007 Reuters. All rights reserved. Any copying, republication or redistribution of Lipper content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Lipper. Lipper shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon. The data contained herein has been obtained from company reports, financial reporting services, periodicals and other resources believed to be reliable. Although carefully verified, data on compilations is not guaranteed by Lipper and may be incomplete. No offer or solicitations to buy or sell any of the securities herein is being made by Lipper. (3) In September of 2006, the portfolios changed their fixed-income index from the Lehman Brothers U.S. Aggregate Index to the Citigroup US Broad Investment-Grade Bond Index. The fund's investment advisor believes this index better represents the fund's portfolio composition. The Russell 3000 Index represents approximately 98% of investable U.S. equity market and provides a broad measure of equity performance. The Lehman Brothers U.S. Aggregate Index and the Citigroup US Broad Investment-Grade Bond Index represent the U.S. investment-grade fixed-rate bond market and provide a broad measure of bond market performance. Performance for these indices is provided for reference only. None of the indices are intended to represent the composition of the portfolio, which invests in a mix of equity and fixed-income securities. (See the Schedule of Investments for the portfolio's asset allocations as of January 31, 2007.) Data presented reflect past performance. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance shown. Investment return and principal value will fluctuate, and redemption value may be more or less than original cost. To obtain performance data current to the most recent month end, please call 1-800-345-2021 or visit americancentury.com. The performance of the portfolios is dependent on the performance of their underlying American Century funds, and will assume the risks associated with these funds. The risks will vary according to each portfolio's asset allocation, and the risk level assigned to each portfolio is intended to reflect the relative short-term price volatility among the funds in each. Data assumes reinvestment of dividends and capital gains, and none of the charts reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Returns for the indices are provided for comparison. The fund's total returns include operating expenses that reduce returns, while the total returns of the indices do not. - ------ 2 One Choice Portfolios
Growth of $10,000 Over Life of One Choice Portfolio: Very Conservative
$10,000 investment made September 30, 2004
![](https://capedge.com/proxy/N-CSRS/0001293210-07-000011/ocpvc2007.gif)
*From 9/30/04, the Investor Class's inception date. Not annualized.
Growth of $10,000 Over Life of One Choice Portfolio: Conservative
$10,000 investment made September 30, 2004
![](https://capedge.com/proxy/N-CSRS/0001293210-07-000011/ocpcon2007.gif)
*From 9/30/04, the Investor Class's inception date. Not annualized. Data presented reflect past performance. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance shown. Investment return and principal value will fluctuate, and redemption value may be more or less than original cost. To obtain performance data current to the most recent month end, please call 1-800-345-2021 or visit americancentury.com. The performance of the portfolios is dependent on the performance of their underlying American Century funds, and will assume the risks associated with these funds. The risks will vary according to each portfolio's asset allocation, and the risk level assigned to each portfolio is intended to reflect the relative short-term price volatility among the funds in each. Data assumes reinvestment of dividends and capital gains, and none of the charts reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Returns for the indices are provided for comparison. The fund's total returns include operating expenses that reduce returns, while the total returns of the indices do not. - ------ 3 One Choice Portfolios
Growth of $10,000 Over Life of One Choice Portfolio: Moderate
$10,000 investment made September 30, 2004
![](https://capedge.com/proxy/N-CSRS/0001293210-07-000011/ocpmod2007.gif)
*From 9/30/04, the Investor Class's inception date. Not annualized.
Growth of $10,000 Over Life of One Choice Portfolio: Aggressive
$10,000 investment made September 30, 2004
![](https://capedge.com/proxy/N-CSRS/0001293210-07-000011/ocpagg2007.gif)
*From 9/30/04, the Investor Class's inception date. Not annualized. Data presented reflect past performance. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance shown. Investment return and principal value will fluctuate, and redemption value may be more or less than original cost. To obtain performance data current to the most recent month end, please call 1-800-345-2021 or visit americancentury.com. The performance of the portfolios is dependent on the performance of their underlying American Century funds, and will assume the risks associated with these funds. The risks will vary according to each portfolio's asset allocation, and the risk level assigned to each portfolio is intended to reflect the relative short-term price volatility among the funds in each. Data assumes reinvestment of dividends and capital gains, and none of the charts reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Returns for the indices are provided for comparison. The fund's total returns include operating expenses that reduce returns, while the total returns of the indices do not. - ------ 4 One Choice PortfoliosGrowth of $10,000 Over Life of One Choice Portfolio: Very Aggressive
$10,000 investment made September 30, 2004
![](https://capedge.com/proxy/N-CSRS/0001293210-07-000011/ocpva2007.gif)
*From 9/30/04, the Investor Class's inception date. Not annualized. One-Year Returns Over Life of Class Periods ended January 31 2005* 2006 2007 One Choice Portfolio: Very Conservative -- Investor Class 3.35% 4.03% 6.75% One Choice Portfolio: Conservative -- Investor Class 4.78% 7.01% 8.46% One Choice Portfolio: Moderate -- Investor Class 6.65% 11.62% 10.41% One Choice Portfolio: Aggressive -- Investor Class 7.45% 15.18% 11.32% One Choice Portfolio: Very Aggressive -- Investor Class 8.65% 17.80% 12.62% Russell 3000 Index 7.22% 12.67% 14.11% Citigroup US Broad Investment-Grade Bond Index 1.65% 1.91% 4.32% Lehman Brothers U.S. Aggregate Index 1.59% 1.80% 4.28% *From 9/30/04, the Investor Class's inception date. Not annualized. Data presented reflect past performance. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance shown. Investment return and principal value will fluctuate, and redemption value may be more or less than original cost. To obtain performance data current to the most recent month end, please call 1-800-345-2021 or visit americancentury.com. The performance of the portfolios is dependent on the performance of their underlying American Century funds, and will assume the risks associated with these funds. The risks will vary according to each portfolio's asset allocation, and the risk level assigned to each portfolio is intended to reflect the relative short-term price volatility among the funds in each. Data assumes reinvestment of dividends and capital gains, and none of the charts reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Returns for the indices are provided for comparison. The fund's total returns include operating expenses that reduce returns, while the total returns of the indices do not. - ------ 5 PORTFOLIO COMMENTARY One Choice Portfolios Portfolio Managers: Jeff Tyler and Irina Torelli PERFORMANCE SUMMARY All five of the One Choice Portfolios posted positive returns for the six months ended January 31, 2007. Returns ranged from 5.41%* for One Choice: Very Conservative to 14.18% for One Choice: Very Aggressive (see pages 2-5 for more detailed performance information). The Portfolios' results reflected solid gains for stocks and bonds, both domestically and internationally. Because of the Portfolios' strategic exposure to the various asset classes, a review of the financial markets helps explain much of their performance. STOCK MARKET REVIEW U.S. stocks rallied sharply during the six-month period, posting double-digit gains. Despite a modest slowdown in the economy, corporate profit growth remained robust--as of January 31, 2007, the companies in the S&P 500 were on track to deliver double-digit earnings growth in the fourth quarter of 2006, extending a streak that dates back to the second quarter of 2002. Heavy merger and acquisition activity, driven primarily by private equity firms awash in cash, also contributed to the stock market's gains. As the table below shows, mid-cap stocks produced the best returns (based on the Russell indexes), while small-cap issues outpaced their large-cap counterparts. Value stocks generally outperformed growth-oriented shares, with the exception of the large-cap segment of the market--large-cap growth stocks came out ahead, ending an extended period of underperformance versus large-cap value. Foreign stocks also enjoyed double-digit gains during the period. Emerging markets were the best performers, led by Latin America. Among developed markets, the Pacific Rim countries posted the highest returns, followed by European bourses. Japan was the laggard, though it too registered a positive return for the six months. BOND MARKET REVIEW U.S. bonds advanced during the period, but their gains were more modest than those in the stock market (see the adjacent table). The bond Market Index Total Returns For the six months ended January 31, 2007* U.S. STOCKS Russell 1000 (Large-Cap)(1) 14.28% Russell Midcap(1) 16.20% Russell 2000 (Small-Cap)(1) 14.95% INTERNATIONAL STOCKS MSCI EAFE 14.33% MSCI Emerging Markets 20.45% U.S. FIXED INCOME Lehman Brothers U.S. Aggregate(1) 3.65% 10-Year U.S. Treasury Note 3.27% 90-Day U.S. Treasury Bill(1) 2.45% INTERNATIONAL BONDS Citigroup Non-U.S. World Government Bond 0.58% (1) Data provided by Lipper Inc. -- A Reuters Company. ©2007 Reuters. All rights reserved. Any copying, republication or redistribution of Lipper content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Lipper. Lipper shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon. The data contained herein has been obtained from company reports, financial reporting services, periodicals and other resources believed to be reliable. Although carefully verified, data on compilations is not guaranteed by Lipper and may be incomplete. No offer or solicitations to buy or sell any of the securities herein is being made by Lipper. *Total returns for periods less than one year are not annualized. - ------ 6 One Choice Portfolios market rallied early in the period amid evidence of slowing economic growth and the Federal Reserve's (the Fed's) shift to a stable interest rate policy. After raising short-term interest rates 17 times between June 2004 and June 2006, the Fed held rates steady at 5.25% throughout the six-month period. Bonds surrendered some of their gains in the last two months as the economy displayed some unexpected resiliency. From a sector perspective, high-yield corporate bonds posted the highest returns, benefiting from strong investor demand for yield. Investment-grade corporate bonds and mortgage-backed securities also performed well, while Treasury and government agency bonds lagged. Money market rates were little changed during the period, reflecting the Fed's stable interest rate policy. Foreign bonds gained ground but trailed the domestic bond market. Improving economic growth, particularly in Europe and developing countries, contributed to the underperformance of international bonds. The U.S. dollar's impact was mixed--the greenback rose nearly 6% versus the Japanese yen during the period but fell by just under 2% against the euro. Underlying Fund Allocations as a % of net assets as of January 31, 2007(1) Very Very Conservative Conservative Moderate Aggressive Aggressive Equity Growth Fund 5.2% 9.2% 15.6% 13.9% 16.9% Growth Fund 3.1% 5.4% 8.7% 15.2% 18.2% Large Company Value Fund 8.4% 11.3% 10.2% 9.0% 11.0% Real Estate Fund 2.1% 2.0% 2.0% 2.0% 2.0% Small Company Fund 1.0% 1.5% 2.0% 2.2% 2.5% Value Fund 4.2% 5.9% 4.4% 3.6% 4.7% Vista Fund 0.8% 3.5% 6.4% 13.2% 16.2% Emerging Markets Fund -- -- 3.9% 6.3% 7.2% International Growth Fund -- 6.5% 10.6% 13.1% 16.1% Diversified Bond Fund 39.4% 36.0% 24.0% 14.2% 2.4% High-Yield Fund -- -- 2.5% 4.4% -- International Bond Fund 10.8% 8.7% 3.8% 0.9% 0.9% Prime Money Market Fund 24.8% 9.8% 5.8% 1.9% 1.9% Other Assets and Liabilities 0.2% 0.2% 0.1% 0.1% --(2) (1) Underlying fund investments represent Investor Class. (2) Category is less than 0.05% of total net assets. - ------ 7 One Choice Portfolios PORTFOLIO STRATEGY Each One Choice Portfolio is a "fund of funds" that invests in other American Century mutual funds to achieve its investment objective and target asset allocation. (See table on page 7 for the specific underlying fund allocations for each One Choice Portfolio.) Every underlying fund produced positive results during the period. The top performer was Emerging Markets, reflecting the healthy gains of stocks located in developing countries. International Growth also posted a strong return, while Real Estate delivered the best results among domestic equity funds. Mirroring the broader market, the value funds in the Portfolio generally performed better than the growth-oriented funds. Unlike the market indexes, however, the Portfolios' large-cap stock funds, including Growth and Large Company Value, outperformed the smaller-cap funds, such as Vista and Small Company. The fixed-income funds reflected the more modest returns of the bond market. High-Yield posted the best results, while International Bond registered the smallest gain. Prime Money Market's performance was in line with that of the three-month U.S. Treasury bill. Types of Investments in Portfolios as a % of net assets as of January 31, 2007 Very Very Conservative Conservative Moderate Aggressive Aggressive EQUITY Large Cap Value 12.6% 17.2% 14.6% 12.6% 15.7% Large Cap Blend 5.2% 9.2% 15.6% 13.9% 16.9% Large Cap Blend -- International -- 6.5% 10.6% 13.1% 16.1% Large Cap Growth 3.1% 5.4% 8.7% 15.2% 18.2% Large Cap Growth -- International -- -- 3.9% 6.3% 7.2% Mid Cap Growth 0.8% 3.5% 6.4% 13.2% 16.2% Small Cap Value 1.0% 1.5% 2.0% 2.2% 2.5% Real Estate 2.1% 2.0% 2.0% 2.0% 2.0% --------- --------- --------- --------- --------- TOTAL EQUITY 24.8% 45.3% 63.8% 78.5% 94.8% --------- --------- --------- --------- --------- FIXED INCOME Investment Grade 39.4% 36.0% 24.0% 14.2% 2.4% High-Yield -- -- 2.5% 4.4% -- International 10.8% 8.7% 3.8% 0.9% 0.9% --------- --------- --------- --------- --------- TOTAL FIXED INCOME 50.2% 44.7% 30.3% 19.5% 3.3% --------- --------- --------- --------- --------- MONEY MARKET 24.8% 9.8% 5.8% 1.9% 1.9% OTHER ASSETS AND LIABILITIES 0.2% 0.2% 0.1% 0.1% --(1) (1) Category is less than 0.05% of total net assets. - ------ 8 One Choice Portfolios Although each Portfolio has a "neutral" asset mix that does not change, we often make modest adjustments to take advantage of opportunities that we believe will help the Portfolios better meet their investment objectives. At the beginning of the six-month period, the Portfolios were neutrally positioned with regard to stocks, bonds, and cash equivalents. However, in October, we established a modest overweight in bonds and a corresponding underweight in stocks. This was a more defensive position, reflecting our view that declining profit margins and decelerating earnings growth could put downward pressure on the stock market. Digging a little deeper into the Portfolios, we made some other adjustments to the underlying fund holdings. The most significant change was a shift to an overweight position in large-cap stocks, which have underperformed in recent years, and a comparable underweight in smaller-cap issues. We moved back to a more neutral position in growth-oriented stocks and international stocks, reducing slight overweights in both, and we decreased our underweight in value shares as well. Within the fixed-income portion of the Portfolios, we remained overweight in international bonds, based on our expectations for a weaker dollar given declining economic activity domestically and expanding economies elsewhere in the world. We also emphasized high-quality bonds over lower-quality securities. STARTING POINT FOR THE NEXT REPORT PERIOD As of January 31, 2007, we intended to maintain the same positioning for the Portfolios. The stock market was likely to face some headwinds, including a weaker economy and lower profit growth--the S&P 500's streak of 19 consecutive quarters of double-digit earnings growth was expected to end in the first quarter of 2007. We also expected high-quality bonds to hold up well in a slower economic environment. - ------ 9 SHAREHOLDER FEE EXAMPLES (UNAUDITED) 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. As a shareholder in the underlying American Century funds, your fund will indirectly bear its pro rata share of the expenses incurred by the underlying funds. These expenses are not included in the fund's annualized expense ratio or the expenses paid during the period. These expenses are, however, included in the effective expenses paid during the period. The example is based on an investment of $1,000 made at the beginning of the period and held for the entire period from August 1, 2006 to January 31, 2007. 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 fund, or Institutional Class shares of the American Century Diversified Bond Fund, in an American Century account (i.e., not a financial intermediary or retirement plan account), American Century may charge you a $12.50 semiannual account maintenance fee if the value of those shares is less than $10,000. We will redeem shares automatically in one of your accounts to pay the $12.50 fee. In determining your total eligible investment amount, we will include your investments in all PERSONAL ACCOUNTS (including American Century 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 Brokerage accounts, you are currently not subject to this fee. We will not charge the fee as long as you choose to manage your accounts exclusively online. 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. - ------ 10 Effective Expenses Expenses Paid Paid Beginning Ending During During Effective Account Account Period(1) Annualized Period(2) Annualized Value Value 8/1/06 - Expense 8/1/06 - Expense 8/1/06 1/31/07 1/31/07 Ratio(1) 1/31/07 Ratio(2) One Choice Portfolio: Very Conservative -- Investor Class Shareholder Fee Example Actual $1,000 $1,054.10 $0.00 0.00%(3) $3.57 0.69% Hypothetical $1,000 $1,025.21 $0.00 0.00%(3) $3.52 0.69% One Choice Portfolio: Conservative -- Investor Class Shareholder Fee Example Actual $1,000 $1,077.30 $0.00 0.00%(3) $4.03 0.77% Hypothetical $1,000 $1,025.21 $0.00 0.00%(3) $3.93 0.77% One Choice Portfolio: Moderate -- Investor Class Shareholder Fee Example Actual $1,000 $1,102.90 $0.00 0.00%(3) $4.56 0.86% Hypothetical $1,000 $1,025.21 $0.00 0.00%(3) $4.39 0.86% One Choice Portfolio: Aggressive -- Investor Class Shareholder Fee Example Actual $1,000 $1,124.50 $0.00 0.00%(3) $5.09 0.95% Hypothetical $1,000 $1,025.21 $0.00 0.00%(3) $4.85 0.95% One Choice Portfolio: Very Aggressive -- Investor Class Shareholder Fee Example Actual $1,000 $1,141.80 $0.00 0.00%(3) $5.40 1.00% Hypothetical $1,000 $1,025.21 $0.00 0.00%(3) $5.10 1.00% (1) Expenses are equal to the class's annualized expense ratio listed in the table above, multiplied by the average account value over the period, multiplied by 184, the number of days in the most recent fiscal half-year, divided by 365, to reflect the one-half year period. The fees and expenses of the underlying American Century funds in which the fund invests are not included in the class's annualized expense ratio. (2) Effective expenses reflect the sum of expenses borne directly by the class plus the fund's pro rata share of the weighted average expense ratio of the underlying funds in which it invests. The effective annualized expense ratio combines the class's annualized expense ratio and the annualized weighted average expense ratio of the underlying funds. The annualized weighted average expense ratio of the underlying funds for the one-half year period reflects the actual expense ratio of each underlying fund from its most recent shareholder report, annualized and weighted for the fund's relative average investment therein during the period. (3) Other expenses, which include the fees and expenses of the fund's independent directors and its legal counsel, as well as interest, did not exceed 0.005%. - ------ 11 SCHEDULE OF INVESTMENTS One Choice Portfolios JANUARY 31, 2007 (UNAUDITED) Shares Value One Choice Portfolio: Very Conservative Mutual Funds(1) -- 99.8% DOMESTIC FIXED INCOME FUNDS -- 39.4% 1,295,283 Diversified Bond Fund Investor Class $12,862,160 -------------- MONEY MARKET FUNDS -- 24.8% 8,090,157 Prime Money Market Fund Investor Class 8,090,157 -------------- DOMESTIC EQUITY FUNDS -- 24.8% 64,554 Equity Growth Fund Investor Class 1,682,277 44,926 Growth Fund Investor Class 1,025,211 357,605 Large Company Value Fund Investor Class 2,728,526 20,595 Real Estate Fund Investor Class 669,338 33,181 Small Company Fund Investor Class 337,451 179,581 Value Fund Investor Class 1,375,590 15,072 Vista Fund Investor Class 268,734 -------------- 8,087,127 -------------- INTERNATIONAL FIXED INCOME FUNDS -- 10.8% 258,748 International Bond Fund Investor Class 3,508,623 -------------- TOTAL INVESTMENT SECURITIES -- 99.8% (Cost $31,839,544) 32,548,067 -------------- OTHER ASSETS AND LIABILITIES -- 0.2% 73,214 -------------- TOTAL NET ASSETS -- 100.0% $32,621,281 ============== Notes to Schedule of Investments (1) Investments are funds within the American Century family of funds, of which certain funds may be deemed to be under common control because of the same board of directors. See Notes to Financial Statements. Shares Value One Choice Portfolio: Conservative Mutual Funds(1) -- 99.8% DOMESTIC EQUITY FUNDS -- 38.8% 638,728 Equity Growth Fund Investor Class $ 16,645,252 432,088 Growth Fund Investor Class 9,860,248 2,699,945 Large Company Value Fund Investor Class 20,600,579 113,569 Real Estate Fund Investor Class 3,690,993 273,826 Small Company Fund Investor Class 2,784,810 1,395,514 Value Fund Investor Class 10,689,637 359,226 Vista Fund Investor Class 6,405,000 -------------- 70,676,519 -------------- DOMESTIC FIXED INCOME FUNDS -- 36.0% 6,590,461 Diversified Bond Fund Investor Class 65,443,278 -------------- MONEY MARKET FUNDS -- 9.8% 17,792,724 Prime Money Market Fund Investor Class 17,792,724 -------------- INTERNATIONAL FIXED INCOME FUNDS -- 8.7% 1,165,526 International Bond Fund Investor Class 15,804,533 -------------- INTERNATIONAL EQUITY FUNDS -- 6.5% 928,529 International Growth Fund Investor Class 11,745,892 -------------- TOTAL INVESTMENT SECURITIES -- 99.8% (Cost $173,531,944) 181,462,946 -------------- OTHER ASSETS AND LIABILITIES -- 0.2% 306,723 -------------- TOTAL NET ASSETS -- 100.0% $181,769,669 ============== Notes to Schedule of Investments (1) Investments are funds within the American Century family of funds, of which certain funds may be deemed to be under common control because of the same board of directors. - ------ 12 One Choice Portfolios Shares Value One Choice Portfolio: Moderate Mutual Funds(1) -- 99.9% DOMESTIC EQUITY FUNDS -- 49.3% 2,744,410 Equity Growth Fund Investor Class $ 71,519,325 1,744,543 Growth Fund Investor Class 39,810,471 6,121,028 Large Company Value Fund Investor Class 46,703,444 283,791 Real Estate Fund Investor Class 9,223,208 910,871 Small Company Fund Investor Class 9,263,558 2,613,373 Value Fund Investor Class 20,018,437 1,652,086 Vista Fund Investor Class 29,456,693 -------------- 225,995,136 -------------- DOMESTIC FIXED INCOME FUNDS -- 26.5% 11,124,405 Diversified Bond Fund Investor Class 110,465,341 1,749,524 High-Yield Fund Investor Class 11,266,935 -------------- 121,732,276 -------------- INTERNATIONAL EQUITY FUNDS -- 14.5% 1,986,822 Emerging Markets Fund Investor Class 18,020,476 3,855,780 International Growth Fund Investor Class 48,775,617 -------------- 66,796,093 -------------- MONEY MARKET FUNDS -- 5.8% 26,670,268 Prime Money Market Fund Investor Class 26,670,268 -------------- INTERNATIONAL FIXED INCOME FUNDS -- 3.8% 1,293,958 International Bond Fund Investor Class 17,546,070 -------------- TOTAL INVESTMENT SECURITIES -- 99.9% (Cost $430,084,418) 458,739,843 -------------- OTHER ASSETS AND LIABILITIES -- 0.1% 522,702 -------------- TOTAL NET ASSETS -- 100.0% $459,262,545 ============== Notes to Schedule of Investments (1) Investments are funds within the American Century family of funds, of which certain funds may be deemed to be under common control because of the same board of directors. See Notes to Financial Statements. Shares Value One Choice Portfolio: Aggressive Mutual Funds(1) -- 99.9% DOMESTIC EQUITY FUNDS -- 59.1% 1,682,892 Equity Growth Fund Investor Class $ 43,856,166 2,090,288 Growth Fund Investor Class 47,700,372 3,739,354 Large Company Value Fund Investor Class 28,531,271 192,822 Real Estate Fund Investor Class 6,266,715 696,113 Small Company Fund Investor Class 7,079,469 1,478,045 Value Fund Investor Class 11,321,825 2,338,380 Vista Fund Investor Class 41,693,315 -------------- 186,449,133 -------------- INTERNATIONAL EQUITY FUNDS -- 19.4% 2,194,020 Emerging Markets Fund Investor Class 19,899,761 3,273,261 International Growth Fund Investor Class 41,406,752 -------------- 61,306,513 -------------- DOMESTIC FIXED INCOME FUNDS -- 18.6% 4,524,641 Diversified Bond Fund Investor Class 44,929,685 2,135,664 High-Yield Fund Investor Class 13,753,676 -------------- 58,683,361 -------------- MONEY MARKET FUNDS -- 1.9% 6,027,028 Prime Money Market Fund Investor Class 6,027,028 -------------- INTERNATIONAL FIXED INCOME FUNDS -- 0.9% 219,173 International Bond Fund Investor Class 2,971,986 -------------- TOTAL INVESTMENT SECURITIES -- 99.9% (Cost $289,721,148) 315,438,021 -------------- OTHER ASSETS AND LIABILITIES -- 0.1% 236,521 -------------- TOTAL NET ASSETS -- 100.0% $315,674,542 ============== Notes to Schedule of Investments (1) Investments are funds within the American Century family of funds, of which certain funds may be deemed to be under common control because of the same board of directors. - ------ 13 One Choice Portfolios Shares Value One Choice Portfolio: Very Aggressive Mutual Funds(1) -- 100.0% DOMESTIC EQUITY FUNDS -- 71.5% 846,958 Equity Growth Fund Investor Class $ 22,071,725 1,038,745 Growth Fund Investor Class 23,704,162 1,866,720 Large Company Value Fund Investor Class 14,243,074 78,776 Real Estate Fund Investor Class 2,560,220 315,952 Small Company Fund Investor Class 3,213,232 805,473 Value Fund Investor Class 6,169,923 1,183,910 Vista Fund Investor Class 21,109,115 -------------- 93,071,451 -------------- INTERNATIONAL EQUITY FUNDS -- 23.3% 1,034,604 Emerging Markets Fund Investor Class 9,383,858 1,657,339 International Growth Fund Investor Class 20,965,339 -------------- 30,349,197 -------------- DOMESTIC FIXED INCOME FUNDS -- 2.4% 308,041 Diversified Bond Fund Investor Class 3,058,847 -------------- MONEY MARKET FUNDS -- 1.9% 2,462,165 Prime Money Market Fund Investor Class 2,462,165 -------------- INTERNATIONAL FIXED INCOME FUNDS -- 0.9% 89,499 International Bond Fund Investor Class 1,213,606 -------------- TOTAL INVESTMENT SECURITIES -- 100.0% (Cost $117,467,123) 130,155,266 -------------- OTHER ASSETS AND LIABILITIES(2) 26,580 -------------- TOTAL NET ASSETS -- 100.0% $130,181,846 ============== Notes to Schedule of Investments (1) Investments are funds within the American Century family of funds, of which certain funds may be deemed to be under common control because of the same board of directors. (2) Category is less than 0.05% of total net assets. See Notes to Financial Statements. - ------ 14 STATEMENT OF ASSETS AND LIABILITIES JANUARY 31, 2007 (UNAUDITED) Very Conservative Conservative Moderate ASSETS Investment securities in affiliates, at value (cost of $31,839,544, $173,531,944 and $430,084,418, respectively) $32,548,067 $181,462,946 $458,739,843 Cash 55 27,063 83 Receivable for capital shares sold -- -- 10,703 Distributions receivable from affiliates 73,159 279,660 511,916 ------------ ------------ ------------ NET ASSETS $32,621,281 $181,769,669 $459,262,545 ============ ============ ============ INVESTOR CLASS CAPITAL SHARES, $0.01 PAR VALUE Outstanding 3,113,501 16,226,873 37,644,888 ============ ============ ============ NET ASSET VALUE PER SHARE $10.48 $11.20 $12.20 ============ ============ ============ NET ASSETS CONSIST OF: Capital (par value and paid-in surplus) $31,989,998 $173,334,620 $427,503,414 Accumulated net investment loss (62,706) (224,570) (335,059) Accumulated undistributed net realized gain (loss) on investment transactions (14,534) 728,617 3,438,765 Net unrealized appreciation on investments 708,523 7,931,002 28,655,425 ------------ ------------ ------------ $32,621,281 $181,769,669 $459,262,545 ============ ============ ============ See Notes to Financial Statements. - ------ 15 JANUARY 31, 2007 (UNAUDITED) Very Aggressive Aggressive ASSETS Investment securities in affiliates, at value (cost of $289,721,148 and $117,467,123, respectively) $315,438,021 $130,155,266 Cash 98 81 Receivable for capital shares sold -- 7,721 Distributions receivable from affiliates 236,423 18,778 ------------ ------------ NET ASSETS $315,674,542 $130,181,846 ============ ============ INVESTOR CLASS CAPITAL SHARES, $0.01 PAR VALUE Outstanding 24,362,969 9,530,162 ============ ============ NET ASSET VALUE PER SHARE $12.96 $13.66 ============ ============ NET ASSETS CONSIST OF: Capital (par value and paid-in surplus) $287,336,871 $116,227,229 Accumulated net investment loss (140,789) (11,645) Undistributed net realized gain on investment transactions 2,761,587 1,278,119 Net unrealized appreciation on investments 25,716,873 12,688,143 ------------ ------------ $315,674,542 $130,181,846 ============ ============ See Notes to Financial Statements. - ------ 16 STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED JANUARY 31, 2007 (UNAUDITED) Very Conservative Conservative Moderate INVESTMENT INCOME (LOSS) INCOME: Income distributions from underlying funds - affiliates $ 607,515 $ 2,889,096 $ 7,187,282 ------------ ------------ ------------ EXPENSES: Directors' fees and expenses 194 1,062 2,537 ------------ ------------ ------------ NET INVESTMENT INCOME (LOSS) 607,321 2,888,034 7,184,745 ------------ ------------ ------------ NET REALIZED AND UNREALIZED GAIN (LOSS) ON AFFILIATES NET REALIZED GAIN (LOSS) ON: Sale of investments in underlying funds (13,451) (72,353) (305,025) Capital gain distributions received from underlying funds 134,460 1,079,314 4,261,785 ------------ ------------ ------------ 121,009 1,006,961 3,956,760 ------------ ------------ ------------ CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS 583,971 6,422,884 22,316,414 NET REALIZED AND UNREALIZED GAIN (LOSS) 704,980 7,429,845 26,273,174 ------------ ------------ ------------ NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $1,312,301 $10,317,879 $33,457,919 ============ ============ ============ See Notes to Financial Statements. - ------ 17 FOR THE SIX MONTHS ENDED JANUARY 31, 2007 (UNAUDITED) Very Aggressive Aggressive INVESTMENT INCOME (LOSS) INCOME: Income distributions from underlying funds - affiliates $ 4,823,600 $ 1,782,990 ------------ ------------ EXPENSES: Directors' fees and expenses 1,826 769 ------------ ------------ NET INVESTMENT INCOME (LOSS) 4,821,774 1,782,221 ------------ ------------ NET REALIZED AND UNREALIZED GAIN (LOSS) ON AFFILIATES NET REALIZED GAIN (LOSS) ON: Sale of investments in underlying funds (162,734) (26,308) Capital gain distributions received from underlying funds 3,261,864 1,573,237 ------------ ------------ 3,099,130 1,546,929 ------------ ------------ CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS 20,646,169 10,001,181 ------------ ------------ NET REALIZED AND UNREALIZED GAIN (LOSS) 23,745,299 11,548,110 ------------ ------------ NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $28,567,073 $13,330,331 ============ ============ See Notes to Financial Statements. - ------ 18 STATEMENT OF CHANGES IN NET ASSETS SIX MONTHS ENDED JANUARY 31, 2007 (UNAUDITED) AND YEAR ENDED JULY 31, 2006 Very Conservative Conservative Increase (Decrease) in Net Assets 2007 2006 2007 2006 OPERATIONS Net investment income (loss) $ 607,321 $ 482,566 $ 2,888,034 $ 2,293,357 Net realized gain (loss) 121,009 (32,553) 1,006,961 241,594 Change in net unrealized appreciation (depreciation) 583,971 10,991 6,422,884 639,449 ------------ ------------ ------------ ------------ Net increase (decrease) in net assets resulting from operations 1,312,301 461,004 10,317,879 3,174,400 ------------ ------------ ------------ ------------ DISTRIBUTIONS TO SHAREHOLDERS From net investment income (732,196) (445,170) (3,366,484) (2,121,359) From net realized gains (69,135) (12,349) (467,167) (54,085) ------------ ------------ ------------ ------------ Decrease in net assets from distributions (801,331) (457,519) (3,833,651) (2,175,444) ------------ ------------ ------------ ------------ CAPITAL SHARE TRANSACTIONS Proceeds from shares sold 14,762,151 15,527,335 75,097,802 85,607,594 Proceeds from reinvestment of distributions 768,717 438,945 3,699,841 2,099,406 Payments for shares redeemed (3,272,693) (6,249,815) (13,896,518) (21,504,844) ------------ ------------ ------------ ------------ Net increase (decrease) in net assets from capital share transactions 12,258,175 9,716,465 64,901,125 66,202,156 ------------ ------------ ------------ ------------ NET INCREASE (DECREASE) IN NET ASSETS 12,769,145 9,719,950 71,385,353 67,201,112 NET ASSETS Beginning of period 19,852,136 10,132,186 110,384,316 43,183,204 ------------ ------------ ------------ ------------ End of period $32,621,281 $19,852,136 $181,769,669 $110,384,316 ============ ============ ============ ============ Accumulated undistributed net investment income (loss) $(62,706) $62,169 $(224,570) $253,880 ============ ============ ============ ============ TRANSACTIONS IN SHARES OF THE FUND Sold 1,412,479 1,524,331 6,803,702 8,083,889 Issued in reinvestment of distributions 73,694 43,390 333,800 200,128 Redeemed (313,388) (613,143) (1,261,478) (2,030,348) ------------ ------------ ------------ ------------ Net increase (decrease) in shares of the fund 1,172,785 954,578 5,876,024 6,253,669 ============ ============ ============ ============ See Notes to Financial Statements. - ------ 19 SIX MONTHS ENDED JANUARY 31, 2007 (UNAUDITED) AND YEAR ENDED JULY 31, 2006 Moderate Aggressive Increase (Decrease) in Net Assets 2007 2006 2007 2006 OPERATIONS Net investment income (loss) $ 7,184,745 $ 4,955,123 $ 4,821,774 $ 3,222,238 Net realized gain (loss) 3,956,760 1,015,983 3,099,130 821,545 Change in net unrealized appreciation (depreciation) 22,316,414 3,109,672 20,646,169 2,197,038 ------------ ------------ ------------ ------------ Net increase (decrease) in net assets resulting from operations 33,457,919 9,080,778 28,567,073 6,240,821 ------------ ------------ ------------ ------------ DISTRIBUTIONS TO SHAREHOLDERS From net investment income (7,953,780) (4,656,349) (6,046,181) (2,399,441) From net realized gains (1,486,928) (85,464) (1,127,290) (60,490) ------------ ------------ ------------ ------------ Decrease in net assets from distributions (9,440,708) (4,741,813) (7,173,471) (2,459,931) ------------ ------------ ------------ ------------ CAPITAL SHARE TRANSACTIONS Proceeds from shares sold 198,151,277 184,059,502 114,189,850 145,803,669 Proceeds from reinvestment of distributions 9,123,210 4,577,903 7,051,707 2,416,686 Payments for shares redeemed (25,639,396) (36,678,759) (18,310,502) (25,274,500) ------------ ------------ ------------ ------------ Net increase (decrease) in net assets from capital share transactions 181,635,091 151,958,646 102,931,055 122,945,855 ------------ ------------ ------------ ------------ NET INCREASE (DECREASE) IN NET ASSETS 205,652,302 156,297,611 124,324,657 126,726,745 NET ASSETS Beginning of period 253,610,243 97,312,632 191,349,885 64,623,140 ------------ ------------ ------------ ------------ End of period $459,262,545 $253,610,243 $315,674,542 $191,349,885 ============ ============ ============ ============ Accumulated undistributed net investment income (loss) $(335,059) $433,976 $(140,789) $1,083,618 ============ ============ ============ ============ TRANSACTIONS IN SHARES OF THE FUND Sold 16,680,045 16,339,558 9,104,841 12,363,087 Issued in reinvestment of distributions 760,228 413,171 552,210 210,696 Redeemed (2,160,539) (3,261,353) (1,462,267) (2,147,138) ------------ ------------ ------------ ------------ Net increase (decrease) in shares of the fund 15,279,734 13,491,376 8,194,784 10,426,645 ============ ============ ============ ============ See Notes to Financial Statements. - ------ 20 SIX MONTHS ENDED JANUARY 31, 2007 (UNAUDITED) AND YEAR ENDED JULY 31, 2006 Very Aggressive Increase (Decrease) in Net Assets 2007 2006 OPERATIONS Net investment income (loss) $ 1,782,221 $ 1,031,204 Net realized gain (loss) 1,546,929 253,117 Change in net unrealized appreciation (depreciation) 10,001,181 1,333,630 ------------ ------------ Net increase (decrease) in net assets resulting from operations 13,330,331 2,617,951 ------------ ------------ DISTRIBUTIONS TO SHAREHOLDERS From net investment income (1,997,828) (877,225) From net realized gains (490,929) (26,412) ------------ ------------ Decrease in net assets from distributions (2,488,757) (903,637) ------------ ------------ CAPITAL SHARE TRANSACTIONS Proceeds from shares sold 49,092,346 62,885,135 Proceeds from reinvestment of distributions 2,422,976 882,423 Payments for shares redeemed (9,436,699) (13,869,437) ------------ ------------ Net increase (decrease) in net assets from capital share transactions 42,078,623 49,898,121 ------------ ------------ NET INCREASE (DECREASE) IN NET ASSETS 52,920,197 51,612,435 NET ASSETS Beginning of period 77,261,649 25,649,214 ------------ ------------ End of period $130,181,846 $77,261,649 ============ ============ Accumulated undistributed net investment income (loss) $(11,645) $203,962 ============ ============ TRANSACTIONS IN SHARES OF THE FUND Sold 3,750,016 5,154,430 Issued in reinvestment of distributions 180,550 74,592 Redeemed (719,198) (1,143,694) ------------ ------------ Net increase (decrease) in shares of the fund 3,211,368 4,085,328 ============ ============ See Notes to Financial Statements. - ------ 21 NOTES TO FINANCIAL STATEMENTS JANUARY 31, 2007 (UNAUDITED) 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ORGANIZATION -- American Century Asset Allocation Portfolios, Inc. (the corporation) is registered under the Investment Company Act of 1940 (the 1940 Act), as amended, as an open-end management investment company. One Choice Portfolio: Very Conservative (Very Conservative), One Choice Portfolio: Conservative (Conservative), One Choice Portfolio: Moderate (Moderate), One Choice Portfolio: Aggressive (Aggressive), and One Choice Portfolio: Very Aggressive (Very Aggressive) (collectively, the funds) are five funds in a series issued by the corporation. The funds operate as "fund of funds," meaning that substantially all of the funds' assets will be invested in other funds in the American Century family of funds (the underlying funds). Because the funds directly invest in a relatively small number of underlying funds, they are not diversified as defined by the 1940 Act. However, the underlying funds are generally diversified and so indirectly provide broad exposure to a large number of securities. The funds' investment objectives are to seek the highest total return consistent with their respective asset mix. The funds pursue their objectives by investing in underlying funds that represent a variety of asset classes and investment styles. Generally, more conservative funds emphasize investments in bonds and cash equivalents while more aggressive funds emphasize investments in stocks. The corporation is authorized to issue 3,000,000,000 shares. The following is a summary of the funds' significant accounting policies. UNDERLYING FUNDS -- Each fund's assets are allocated among underlying funds that represent major asset classes, including equity securities (stocks), fixed-income securities (bonds) and cash-equivalent instruments (money markets). A brief description of each of the underlying funds follows. DOMESTIC EQUITY FUNDS EQUITY GROWTH seeks long-term capital growth. It uses a quantitative investment strategy to construct an optimized portfolio drawn primarily from the 1,500 largest publicly traded U.S. companies without regard to dividend yield. GROWTH seeks long-term capital growth. It uses a growth investment strategy and generally invests in larger U.S. companies. LARGE COMPANY VALUE seeks long-term capital growth with income as a secondary objective. It uses a value investment strategy and invests primarily in larger U.S. companies. REAL ESTATE seeks long-term capital appreciation with income as a secondary objective. It invests primarily in equity securities issued by real estate investment trusts and companies engaged in the real estate industry. SMALL COMPANY seeks long-term capital growth. It uses a quantitative investment strategy and invests primarily in smaller U.S. companies. VALUE seeks long-term capital growth with income as a secondary objective. It uses a value investment strategy and invests primarily in U.S. companies of all sizes. VISTA seeks long-term capital growth. It uses a growth investment strategy and generally invests in medium-sized and smaller U.S. companies. INTERNATIONAL EQUITY FUNDS EMERGING MARKETS seeks capital growth. It uses a growth investment strategy and invests primarily in securities of companies located in emerging market countries and companies that derive a significant portion of their business from emerging market countries. INTERNATIONAL GROWTH seeks capital growth. It uses a growth investment strategy and invests primarily in securities of companies located in developed countries other than the United States. - ------ 22 DOMESTIC FIXED INCOME FUNDS DIVERSIFIED BOND seeks a high level of income by investing primarily in high- and medium-grade non-money market debt securities. These securities, which may be payable in U.S. or foreign currencies, may include corporate bonds and notes, government securities and securities backed by mortgages or other assets. HIGH-YIELD seeks high current income by investing in a diversified portfolio of high-yield corporate bonds and other debt securities. As a second objective, the fund seeks capital appreciation, but only when consistent with its primary objective of maximizing current income. INTERNATIONAL FIXED INCOME FUNDS INTERNATIONAL BOND seeks high total return by investing in high-quality, nondollar-denominated government and corporate debt securities outside the United States. MONEY MARKET FUNDS PRIME MONEY MARKET seeks to earn the highest level of current income while preserving the value of shareholder investments by investing in high-quality, cash-equivalent securities. SECURITY VALUATIONS -- Investments in the underlying funds are valued at their reported net asset value. The underlying funds have specific valuation policies. If an event occurs after the value of a security was established but before the net asset value per share of an underlying fund was determined that was likely to materially change the net asset value of the underlying fund, that security would be valued at fair value as determined in accordance with procedures adopted by the Board of Directors/Trustees. If the underlying fund determines that the market price of a portfolio security is not readily available, or that the valuation methods mentioned above do not reflect the security's fair value, such security is valued at its fair value as determined by, or in accordance with procedures adopted by, the Board of Directors/Trustees or its designee if such fair value determination would materially impact an underlying fund's net asset value. Certain other circumstances may cause the underlying fund to fair value a security such as: a security has been declared in default; trading in a security has been halted during the trading day; or there is a foreign market holiday and no trading will commence. 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 -- Income and capital gain distributions, if any, from the underlying funds are recorded as of the ex-dividend date. Long-term capital gain distributions, if any, from the underlying funds are a component of net realized gain (loss). INCOME TAX STATUS -- It is each 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 federal or state income taxes. DISTRIBUTIONS TO SHAREHOLDERS -- Distributions to shareholders are recorded on the ex-dividend date. Distributions from net investment income, if any, are generally declared and paid quarterly for Very Conservative, Conservative, and Moderate. Distributions from net investment income, if any, are generally declared and paid annually for Aggressive and Very Aggressive. Distributions from net realized gains, if any, are generally declared and paid annually for all funds. 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 funds. In addition, in the normal course of business, the funds enter into contracts that provide general indemnifications. The funds maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the funds. The risk of material loss from such claims is considered by management to be remote. USE OF ESTIMATES -- The financial statements are prepared in conformity with accounting principles generally accepted in the United States of America, which may require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from these estimates. - ------ 23 2. FEES AND TRANSACTIONS WITH RELATED PARTIES MANAGEMENT FEES -- The corporation's investment advisor, American Century Investment Management, Inc. (ACIM), does not receive an administrative fee for services provided to the funds. Each fund will indirectly realize its pro rata share of the fees and expenses of the underlying funds in which it invests. These fees and expenses are already reflected in the valuation of the underlying funds. RELATED PARTIES -- Certain officers and directors of the corporation are also officers and/or directors, and, as a group, controlling stockholders of American Century Companies, Inc. (ACC), the parent of the corporation's investment advisor, ACIM, the distributor of the corporation, American Century Investment Services, Inc., and the corporation's transfer agent, American Century Services, LLC. The directors of the corporation are also directors of some underlying funds and therefore those underlying funds may be deemed to be under common control with the corporation. The officers of the corporation are also officers of all the underlying funds. ACIM or American Century Global Investment Management, Inc., a wholly-owned subsidiary of ACIM, serves as the investment advisor for the underlying funds. 3. INVESTMENT TRANSACTIONS Investment transactions for the six months ended January 31, 2007, were as follows: Very Conservative Conservative Moderate Aggressive Very Aggressive Purchases $13,314,521 $67,631,132 $191,183,460 $109,422,028 $45,241,470 Proceeds from sales $1,146,740 $2,730,836 $7,781,504 $5,674,855 $2,314,073 4. AFFILIATED COMPANY TRANSACTIONS Investments are funds within the American Century family of funds, of which certain funds may be deemed to be under common control because of the same board of directors. The funds do not invest in the underlying funds for the purpose of exercising management or control; however, investments by the funds within their investment strategies may represent a significant portion of the underlying funds' net assets. As of January 31, 2007, the funds did not own a significant percentage of total outstanding shares of the underlying funds. A summary of transactions for each underlying fund during the six months ended January 31, 2007 follows: One Choice Portfolio: Very Conservative January 31, 2007 July 31, 2006 Realized Share Purchase Sales Gain Distributions Share Market Underlying Fund Balance Cost Cost (Loss) Received(1) Balance Value Diversified Bond Fund $ Investor Class 788,890 5,367,389 $ 319,841 $(9,080) $238,854 1,295,283 $12,862,160 Prime Money Market Fund Investor Class 4,928,595 3,356,882 195,320 -- 158,941 8,090,157 8,090,157 Equity Growth Fund Investor Class 40,991 636,415 40,800 (633) 53,099 64,554 1,682,277 Growth Fund Investor Class 28,952 381,486 34,634 (194) 630 44,926 1,025,211 Large Company Value Fund Investor Class 218,520 1,078,470 61,794 (104) 41,939 357,605 2,728,526 Real Estate Fund Investor Class 13,617 253,477 33,243 (702) 68,873 20,595 669,338 Small Company Fund Investor Class 19,521 142,561 8,605 (666) 15,311 33,181 337,451 Value Fund Investor Class 124,597 547,665 125,011 10 95,906 179,581 1,375,590 Vista Fund Investor Class 23,366 124,483 250,330 2,459 1,874 15,072 268,734 International Bond Fund Investor Class 161,605 1,425,693 90,613 (4,541) 66,548 258,748 3,508,623 --------- ----------- ---------- --------- ------------ --------- ----------- $13,314,521 $1,160,191 $(13,451) $ 741,975 $32,548,067 =========== ========== ========= ============ =========== (1) Distributions received includes distributions from net investment income and from capital gains from the underlying funds. - ------ 24 One Choice Portfolio: Conservative January 31, 2007 July 31, 2006 Share Purchase Sales Realized Distributions Share Market Underlying Fund Balance Cost Cost Gain (Loss) Received(1) Balance Value Equity Growth Fund Investor Class 410,926 $ 5,845,123 $ 58,348 $ (485) $ 508,763 638,728 $ 16,645,252 Growth Fund Investor Class 268,644 3,601,367 34,171 (619) 5,858 432,088 9,860,248 8 Large Company Value Fund Investor Class 1,703,72 7,397,665 70,404 (203) 308,528 2,699,945 20,600,579 Real Estate Fund Investor Class 75,911 1,296,596 105,251 (212) 364,534 113,569 3,690,993 Small Company Fund Investor Class 162,944 1,104,813 10,581 (920) 122,055 273,826 2,784,810 Value Fund Investor Class 963,764 3,923,897 605,668 634 715,722 1,395,514 10,689,637 Vista Fund Investor Class 276,338 2,223,653 860,119 (42,321) 43,202 359,226 6,405,000 2 Diversified Bond Fund Investor Class 4,061,09 25,473,863 243,457 (6,710) 1,189,798 6,590,461 65,443,278 6 Prime Money Market Fund Investor Class 10,993,12 6,863,841 64,243 -- 342,629 17,792,724 17,792,724 International Bond Fund Investor Class 737,059 5,947,983 59,711 (1,872) 289,890 1,165,526 15,804,533 International Growth Fund Investor Class 653,301 3,952,331 691,236 (19,645) 77,431 928,529 11,745,892 -------- ----------- ---------- ---------- ----------- ---------- ----------- $67,631,132 $2,803,189 $(72,353) $3,968,410 $181,462,946 =========== ========== ========== =========== =========== One Choice Portfolio: Moderate Equity Growth Fund Investor Class 1,687,245 $28,240,089 $1,362,178 $ (2,148) $ 2,126,785 2,744,410 $ 71,519,325 Growth Fund Investor Class 1,055,431 15,393,525 317,184 54 23,003 1,744,543 39,810,471 Large Company Value Fund Investor Class 3,373,572 20,192,229 5,011 (4) 671,340 6,121,028 46,703,444 Real Estate Fund Investor Class 175,411 3,620,265 201,354 (740) 882,391 283,791 9,223,208 Small Company Fund Investor Class 501,537 4,045,444 1,299 (187) 394,676 910,871 9,263,558 Value Fund Investor Class 1,781,053 8,318,478 1,914,591 11,025 1,302,508 2,613,373 20,018,437 Vista Fund Investor Class 1,126,585 11,372,391 2,818,846 (273,386) 193,399 1,652,086 29,456,693 Diversified Bond Fund Investor Class 6,125,114 49,897,377 13,607 (556) 1,909,138 11,124,405 110,465,341 High-Yield Fund Investor Class 1,015,623 4,679,993 1,461 (65) 282,731 1,749,524 11,266,935 Emerging Markets Fund Investor Class 1,068,723 8,331,153 2,133 (181) 2,539,498 1,986,822 18,020,476 International Growth Fund Investor Class 2,434,874 18,279,595 1,443,095 (38,635) 313,049 3,855,780 48,775,617 Prime Money Market Fund Investor Class 15,237,051 11,436,549 3,332 -- 494,499 26,670,268 26,670,268 International Bond Fund Investor Class 757,510 7,376,372 2,438 (202) 316,050 1,293,958 17,546,070 ---------- ------------ ---------- ---------- ----------- ---------- ------------ $191,183,460 $8,086,529 $(305,025) $11,449,067 $458,739,843 ============ ========== ========== =========== ============ (1) Distributions received includes distributions from net investment income and from capital gains from the underlying funds. - ------ 25 One Choice Portfolio: Aggressive January 31, 2007 July 31, 2006 Share Purchase Sales Realized Distributions Share Market Underlying Fund Balance Cost Cost Gain (Loss) Received(1) Balance Value Equity Growth Fund Investor Class 1,161,627 $14,536,818 $1,249,859 $ 413 $1,314,588 1,682,892 $43,856,166 Growth Fund Investor Class 1,414,558 15,476,824 666,333 (2,703) 27,614 2,090,288 47,700,372 Large Company Value Fund Investor Class 2,279,282 10,771,925 29,849 (70) 418,311 3,739,354 28,531,271 Real Estate Fund Investor Class 133,370 2,061,983 191,472 331 603,145 192,822 6,266,715 Small Company Fund Investor Class 428,074 2,655,243 9,688 (1,352) 302,248 696,113 7,079,469 Value Fund Investor Class 1,150,600 3,961,233 1,435,762 7,809 743,705 1,478,045 11,321,825 Vista Fund Investor Class 1,594,954 13,173,793 886,797 (124,022) 274,257 2,338,380 41,693,315 Emerging Markets Fund Investor Class 1,391,260 7,316,145 24,582 (2,287) 2,807,208 2,194,020 19,899,761 International Growth Fund Investor Class 2,288,519 12,989,808 1,260,198 (37,711) 266,288 3,273,261 41,406,752 Diversified Bond Fund Investor Class 2,675,997 18,502,619 52,432 (2,235) 798,235 4,524,641 44,929,685 High-Yield Fund Investor Class 1,390,222 4,772,397 17,530 (879) 359,294 2,135,664 13,753,676 Prime Money Market Fund Investor Class 3,862,210 2,172,215 7,398 -- 116,322 6,027,028 6,027,028 International Bond Fund Investor Class 144,708 1,031,025 5,689 (28) 54,249 219,173 2,971,986 --------- ------------ ---------- ---------- ----------- --------- ------------ $109,422,028 $5,837,589 $(162,734) $8,085,464 $315,438,021 ============ ========== ========== =========== ============ One Choice Portfolio: Very Aggressive Equity Growth Fund Investor Class 576,860 $ 7,435,901 $ 552,883 $ 2,860 $ 656,301 846,958 $ 22,071,725 Growth Fund Investor Class 697,982 7,824,718 358,153 409 13,608 1,038,745 23,704,162 Large Company Value Fund Investor Class 1,156,008 5,245,330 12,930 (78) 208,170 1,866,720 14,243,074 Real Estate Fund Investor Class 54,124 855,668 81,661 24 243,663 78,776 2,560,220 Small Company Fund Investor Class 192,812 1,218,825 3,465 (415) 136,012 315,952 3,213,232 Value Fund Investor Class 604,033 2,183,828 639,913 1,058 400,272 805,473 6,169,923 Vista Fund Investor Class 784,706 6,766,261 127,410 (16,358) 137,735 1,183,910 21,109,115 Emerging Markets Fund Investor Class 658,305 3,423,512 9,269 (402) 1,311,541 1,034,604 9,383,858 International Growth Fund Investor Class 1,142,021 6,686,264 545,594 (13,329) 133,743 1,657,339 20,965,339 Diversified Bond Fund Investor Class 80,339 2,276,436 2,330 (38) 45,768 308,041 3,058,847 Prime Money Market Fund Investor Class 1,567,786 896,811 2,432 -- 47,328 2,462,165 2,462,165 International Bond Fund Investor Class 58,738 427,916 4,341 (39) 22,086 89,499 1,213,606 -------- ----------- ---------- --------- ---------- --------- ------------ $45,241,470 $2,340,381 $(26,308) $3,356,227 $130,155,266 =========== ========== ========= ========== ============ (1) Distributions received includes distributions from net investment income and from capital gains from the underlying funds. - ------ 26 5. 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 January 31, 2007, the components of investments for federal income tax purposes were as follows: Very Very Conservative Conservative Moderate Aggressive Aggressive Federal tax cost of investments $31,988,231 $173,881,960 $430,903,696 $290,217,065 $117,761,044 ============ ============ ============ ============ ============ Gross tax appreciation of investments $747,102 $8,292,531 $28,831,327 $25,558,033 $12,413,505 Gross tax depreciation of investments (187,266) (711,545) (995,180) (337,077) (19,283) ------------ ------------ ------------ ------------ ------------ Net tax appreciation (depreciation) of investments $559,836 $7,580,986 $27,836,147 $25,220,956 $12,394,222 ============ ============ ============ ============ ============ The difference between book-basis and tax-basis cost and unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales. 6. RECENTLY ISSUED ACCOUNTING STANDARDS In June 2006, the Financial Accounting Standards Board (FASB) issued Interpretation No. 48, "Accounting for Uncertainty in Income Taxes - an Interpretation of FASB Statement No. 109" (FIN 48). FIN 48 establishes a minimum threshold for financial statement recognition of the benefit of positions taken in filing tax returns (including whether an entity is taxable in a particular jurisdiction), and requires certain expanded tax disclosures. FIN 48 is effective for fiscal years beginning after December 15, 2006, and is to be applied to all open tax years as of the date of effectiveness. The FASB issued Statement of Financial Accounting Standards No. 157, "Fair Value Measurements" (FAS 157), in September 2006, which is effective for fiscal years beginning after November 15, 2007. FAS 157 defines fair value, establishes a framework for measuring fair value and expands the required financial statement disclosures about fair value measurements. Management is currently evaluating the impact of adopting FIN 48 and FAS 157. - ------ 27 FINANCIAL HIGHLIGHTS One Choice Portfolio: Very Conservative Investor Class For a Share Outstanding Throughout the Years Ended July 31 (except as noted) 2007(1) 2006 2005(2) PER-SHARE DATA Net Asset Value, Beginning of Period $10.23 $10.27 $10.00 -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(3) 0.24 0.37 0.25 Net Realized and Unrealized Gain (Loss) 0.31 (0.04) 0.29 -------- -------- -------- Total From Investment Operations 0.55 0.33 0.54 -------- -------- -------- Distributions From Net Investment Income (0.28) (0.36) (0.27) From Net Realized Gains (0.02) (0.01) -- -------- -------- -------- Total Distributions (0.30) (0.37) (0.27) -------- -------- -------- Net Asset Value, End of Period $10.48 $10.23 $10.27 ======== ======== ======== TOTAL RETURN(4) 5.41% 3.27% 5.43% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets(5) 0.00%(6) 0.00% 0.00%(6) Ratio of Net Investment Income (Loss) to Average Net Assets 4.57%(6) 3.67% 3.00%(6) Portfolio Turnover Rate 4% 34% 38% Net Assets, End of Period (in thousands) $32,621 $19,852 $10,132 (1) Six months ended January 31, 2007 (unaudited). (2) September 30, 2004 (fund inception) through July 31, 2005. (3) Computed using average shares outstanding throughout the period. (4) Total return assumes reinvestment of net investment income and capital gains distributions, if any. Total returns for periods less than one year are not annualized. (5) Ratio of operating expenses to average net assets does not include any expenses of the underlying funds. (6) Annualized. See Notes to Financial Statements. - ------ 28 One Choice Portfolio: Conservative Investor Class For a Share Outstanding Throughout the Years Ended July 31 (except as noted) 2007(1) 2006 2005(2) PER-SHARE DATA Net Asset Value, Beginning of Period $10.66 $10.54 $10.00 -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(3) 0.22 0.34 0.22 Net Realized and Unrealized Gain (Loss) 0.60 0.12 0.58 -------- -------- -------- Total From Investment Operations 0.82 0.46 0.80 -------- -------- -------- Distributions From Net Investment Income (0.25) (0.33) (0.26) From Net Realized Gains (0.03) (0.01) -- -------- -------- -------- Total Distributions (0.28) (0.34) (0.26) -------- -------- -------- Net Asset Value, End of Period $11.20 $10.66 $10.54 ======== ======== ======== TOTAL RETURN(4) 7.73% 4.45% 8.08% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets(5) 0.00%(6) 0.00% 0.00%(6) Ratio of Net Investment Income (Loss) to Average Net Assets 4.01%(6) 3.23% 2.63%(6) Portfolio Turnover Rate 2% 8% 12% Net Assets, End of Period (in thousands) $181,770 $110,384 $43,183 (1) Six months ended January 31, 2007 (unaudited). (2) September 30, 2004 (fund inception) through July 31, 2005. (3) Computed using average shares outstanding throughout the period. (4) Total return assumes reinvestment of net investment income and capital gains distributions, if any. Total returns for periods less than one year are not annualized. (5) Ratio of operating expenses to average net assets does not include any expenses of the underlying funds. (6) Annualized. See Notes to Financial Statements. - ------ 29 One Choice Portfolio: Moderate Investor Class For a Share Outstanding Throughout the Years Ended July 31 (except as noted) 2007(1) 2006 2005(2) PER-SHARE DATA Net Asset Value, Beginning of Period $11.34 $10.97 $10.00 -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(3) 0.25 0.34 0.17 Net Realized and Unrealized Gain (Loss) 0.92 0.38 0.99 -------- -------- -------- Total From Investment Operations 1.17 0.72 1.16 -------- -------- -------- Distributions From Net Investment Income (0.26) (0.34) (0.19) From Net Realized Gains (0.05) (0.01) -- -------- -------- -------- Total Distributions (0.31) (0.35) (0.19) -------- -------- -------- Net Asset Value, End of Period $12.20 $11.34 $10.97 ======== ======== ======== TOTAL RETURN(4) 10.29% 6.68% 11.71% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets(5) 0.00%(6) 0.00% 0.00%(6) Ratio of Net Investment Income (Loss) to Average Net Assets 4.12%(6) 3.02% 1.98%(6) Portfolio Turnover Rate 2% 7% 3% Net Assets, End of Period (in thousands) $459,263 $253,610 $97,313 (1) Six months ended January 31, 2007 (unaudited). (2) September 30, 2004 (fund inception) through July 31, 2005. (3) Computed using average shares outstanding throughout the period. (4) Total return assumes reinvestment of net investment income and capital gains distributions, if any. Total returns for periods less than one year are not annualized. (5) Ratio of operating expenses to average net assets does not include any expenses of the underlying funds. (6) Annualized. See Notes to Financial Statements. - ------ 30 One Choice Portfolio: Aggressive Investor Class For a Share Outstanding Throughout the Years Ended July 31 (except as noted) 2007(1) 2006 2005(2) PER-SHARE DATA Net Asset Value, Beginning of Period $11.83 $11.26 $10.00 -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(3) 0.25 0.31 0.14 Net Realized and Unrealized Gain (Loss) 1.21 0.56 1.22 -------- -------- -------- Total From Investment Operations 1.46 0.87 1.36 -------- -------- -------- Distributions From Net Investment Income (0.28) (0.29) (0.10) From Net Realized Gains (0.05) (0.01) -- -------- -------- -------- Total Distributions (0.33) (0.30) (0.10) -------- -------- -------- Net Asset Value, End of Period $12.96 $11.83 $11.26 ======== ======== ======== TOTAL RETURN(4) 12.45% 7.84% 13.61% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets(5) 0.00%(6) 0.00% 0.00%(6) Ratio of Net Investment Income (Loss) to Average Net Assets 3.91%(6) 2.68% 1.52%(6) Portfolio Turnover Rate 2% 6% 3% Net Assets, End of Period (in thousands) $315,675 $191,350 $64,623 (1) Six months ended January 31, 2007 (unaudited). (2) September 30, 2004 (fund inception) through July 31, 2005. (3) Computed using average shares outstanding throughout the period. (4) Total return assumes reinvestment of net investment income and capital gains distributions, if any. Total returns for periods less than one year are not annualized. (5) Ratio of operating expenses to average net assets does not include any expenses of the underlying funds. (6) Annualized. See Notes to Financial Statements. - ------ 31 One Choice Portfolio: Very Aggressive Investor Class For a Share Outstanding Throughout the Years Ended July 31 (except as noted) 2007(1) 2006 2005(2) PER-SHARE DATA Net Asset Value, Beginning of Period $12.23 $11.48 $10.00 -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(3) 0.23 0.25 0.08 Net Realized and Unrealized Gain (Loss) 1.50 0.78 1.49 -------- -------- -------- Total From Investment Operations 1.73 1.03 1.57 -------- -------- -------- Distributions From Net Investment Income (0.24) (0.27) (0.09) From Net Realized Gains (0.06) (0.01) -- -------- -------- -------- Total Distributions (0.30) (0.28) (0.09) -------- -------- -------- Net Asset Value, End of Period $13.66 $12.23 $11.48 ======== ======== ======== TOTAL RETURN(4) 14.18% 9.00% 15.81% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets(5) 0.00%(6) 0.00% 0.00%(6) Ratio of Net Investment Income (Loss) to Average Net Assets 3.54%(6) 2.08% 0.84%(6) Portfolio Turnover Rate 2% 9% 8% Net Assets, End of Period (in thousands) $130,182 $77,262 $25,649 (1) Six months ended January 31, 2007 (unaudited). (2) September 30, 2004 (fund inception) through July 31, 2005. (3) Computed using average shares outstanding throughout the period. (4) Total return assumes reinvestment of net investment income and capital gains distributions, if any. Total returns for periods less than one year are not annualized. (5) Ratio of operating expenses to average net assets does not include any expenses of the underlying funds. (6) Annualized. See Notes to Financial Statements. - ------ 32 ADDITIONAL INFORMATION RETIREMENT ACCOUNT INFORMATION As required by law, any distributions you receive from an IRA or certain 403(b), 457 and qualified plans [those not eligible for rollover to an IRA or to another qualified plan] 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. Even if you plan to roll over the amount you withdraw to another tax-deferred account, the withholding rate still applies to the withdrawn amount unless we have received notice not to withhold federal income tax prior to the withdrawal. You may notify us in writing or in certain situations by telephone or through other electronic means. You have the right to revoke your withholding election at any time and any election you make may remain in effect until revoked by filing a new election. 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. 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. State taxes will be withheld from your distribution in accordance with the respective state rules. PROXY VOTING GUIDELINES American Century Investment Management, Inc., the funds' investment advisor, is responsible for exercising the voting rights associated with the securities purchased and/or held by the funds. A description of the policies and procedures the advisor uses in fulfilling this responsibility is available without charge, upon request, by calling 1-800-345-2021. It is also available on American Century's website at americancentury.com and on the Securities and Exchange Commission's website at sec.gov. Information regarding how the investment advisor voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the "About Us" page at americancentury.com. It is also available at sec.gov. QUARTERLY PORTFOLIO DISCLOSURE The funds file their complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-Q. The funds' Forms N-Q are available on the SEC's website at sec.gov, and may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The funds also make their complete schedule of portfolio holdings for the most recent quarter of their fiscal year available on their website at americancentury.com and, upon request, by calling 1-800-345-2021. - ------ 33 INDEX DEFINITIONS The following indices are used to illustrate investment market, sector, or style performance or to serve as fund performance comparisons. They are not investment products available for purchase. The 90-DAY U.S. TREASURY BILL INDEX is derived from secondary market interest rates as published by the Federal Reserve Bank and includes three-month, six-month, and one-year instruments. The CITIGROUP US BROAD INVESTMENT-GRADE (BIG) BOND INDEX is a market- capitalization-weighted index that includes fixed-rate Treasury, government- sponsored, mortgage, asset-backed, and investment-grade issues with a maturity of one year or longer. The CITIGROUP NON-U.S. WORLD GOVERNMENT BOND INDEX is based on the Citigroup World Bond Index, and excludes issues denominated in U.S. dollars. The index measures the total return of government securities in major sectors of the international bond market. The LEHMAN BROTHERS U.S. AGGREGATE INDEX represents securities that are taxable, registered with the Securities and Exchange Commission, and U.S. dollar- denominated. The index covers the U.S. investment-grade fixed-rate bond market, with index components for government and corporate securities, mortgage pass-through securities, and asset-backed securities. Morgan Stanley Capital International (MSCI) has developed several indices that measure the performance of foreign stock markets. The MSCI EAFE® (Europe, Australasia, Far East) INDEX is designed to measure developed market equity performance, excluding the U.S. and Canada. The MSCI EM (Emerging Markets) INDEX represents the performance of stocks in global emerging market countries. The RUSSELL 1000® INDEX is a market-capitalization weighted, large-cap index created by Frank Russell Company to measure the performance of the 1,000 largest companies in the Russell 3000 Index (the 3,000 largest publicly traded U.S. companies, based on total market capitalization). The RUSSELL 2000® INDEX is a market-capitalization weighted index created by Frank Russell Company to measure the performance of the 2,000 smallest of the 3,000 largest publicly traded U.S. companies, based on total market capitalization. The RUSSELL 3000® INDEX measures the performance of the 3,000 largest U.S. companies based on total market capitalization, which represents approximately 98% of the investable U.S. equity market. The RUSSELL MIDCAP® INDEX measures the performance of the 800 smallest of the 1,000 largest publicly traded U.S. companies, based on total market capitalization. The S&P 500 INDEX is a market value-weighted index of the stocks of 500 publicly traded U.S. companies chosen for market size, liquidity, and industry group representation that are considered to be leading firms in dominant industries. Each stock's weight in the index is proportionate to its market value. Created by Standard & Poor's, it is considered to be a broad measure of U.S. stock market performance. - ------ 34 NOTES - ------ 35 NOTES - ------ 36 CONTACT US AMERICANCENTURY.COM AUTOMATED INFORMATION LINE: 1-800-345-8765 INVESTOR SERVICES REPRESENTATIVE: 1-800-345-2021 or 816-531-5575 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 DEVICE FOR THE DEAF: 1-800-634-4113 or 816-444-3485 AMERICAN CENTURY ASSET ALLOCATION PORTFOLIOS, 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. American Century Investment Services, Inc., Distributor ©2007 American Century Proprietary Holdings, Inc. All rights reserved. The American Century Investments logo, American Century and American Century Investments are service marks of American Century Proprietary Holdings, Inc. 0703 SH-SAN-53522N
ITEM 2. CODE OF ETHICS. Not applicable for semiannual report filings. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. Not applicable for semiannual report filings. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Not applicable for semiannual report filings. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. Not applicable. ITEM 6. SCHEDULE OF INVESTMENTS. The schedule of investments is included as part of the report to stockholders filed under Item 1 of this Form. ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. Not applicable. ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. During the reporting period, there were no material changes to the procedures by which shareholders may recommend nominees to the registrant's board. ITEM 11. CONTROLS AND PROCEDURES. (a) The registrant's principal executive officer and principal financial officer have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) are effective based on their evaluation of these controls and procedures as of a date within 90 days of the filing date of this report. (b) There were no changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the registrant's second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant's internal control over financial reporting. ITEM 12. EXHIBITS. (a)(1) Not applicable for semiannual report filings. (a)(2) Separate certifications by the registrant's principal executive officer and principal financial officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 and Rule 30a-2(a) under the Investment Company Act of 1940, are filed and attached hereto as Exhibit 99.302CERT. (a)(3) Not applicable. (b) A certification by the registrant's chief executive officer and chief financial officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, is furnished and attached hereto as Exhibit 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 ASSET ALLOCATION PORTFOLIOS, INC. By: /s/ Jonathan S. Thomas ---------------------------------------- Name: Jonathan S. Thomas Title: President Date: March 30, 2007 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By: /s/ Jonathan S. Thomas ---------------------------------------- Name: Jonathan S. Thomas Title: President (principal executive officer) Date: March 30, 2007 By: /s/ Robert J. Leach ---------------------------------------- Name: Robert J. Leach Title: Vice President, Treasurer, and Chief Financial Officer (principal financial officer) Date: March 30, 2007