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
*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
*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
*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
*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
*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
*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
*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
*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
*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 Portfolios
Growth of $10,000 Over Life of One Choice Portfolio: Very Aggressive
$10,000 investment made September 30, 2004
*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
