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: 01-31-2008 ------------------------------------------------------
ITEM 1. REPORTS TO STOCKHOLDERS. [front cover] [american century investments logo and text logo] [livestrong(TM) portfolios text logo] SEMIANNUAL REPORT JANUARY 31, 2008 LIVESTRONG(TM) PORTFOLIOS FROM AMERICAN CENTURY INVESTMENTS LIVESTRONG(TM) Income Portfolio LIVESTRONG(TM) 2015 Portfolio LIVESTRONG(TM) 2025 Portfolio LIVESTRONG(TM) 2035 Portfolio LIVESTRONG(TM) 2045 Portfolio OUR MESSAGE TO YOU [photo of Jonathan Thomas] JONATHAN THOMAS President and CEO American Century Companies, Inc. To help you monitor your investment, my colleagues and I take pride in providing you with the semiannual report for LIVESTRONG(TM) Portfolios from American Century Investments for the six months ended January 31, 2008. I am honored to be addressing you in the "Our Message" space long devoted to company founder Jim Stowers, Jr. and his son Jim Stowers III. Jim Stowers III stepped down from the American Century Companies, Inc. (ACC) board of directors in July 2007, his final move in a well-planned career transition to pursue new ventures outside the company. This reflected his family's support of our company's direction and its leadership team. The Stowers family remains an integral part of our heritage, leadership, and financial structure. In fact, Jim Stowers, Jr. continues as co-chair of the ACC board with Richard Brown, who has been on the board since 1998. American Century Investments®, our clients, and our employees have been my top priority since I became company president and CEO in March, 2007. We have also added the executive talents of overall chief investment officer (CIO) Enrique Chang, international equity CIO Mark On, U.S. growth equity CIO Steve Lurito, and chief operating officer Barry Fink. This skilled group, combined with our existing senior management team, has already had a positive impact on the development and management of the products and services we take pride in delivering to you. We believe the ultimate measure of our performance is our clients' success. Therefore, our focus continues to be on building a long-term relationship with you and on delivering superior investment performance across our product line. /s/Jonathan Thomas [photo of James E. Stowers, Jr.] JAMES E. STOWERS, JR. Founder and Co-Chairman of the Board American Century Companies, Inc. [photo of Richard Brown] RICHARD BROWN Co-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 Shareholder Fee Examples. . . . . . . . . . . . . . . . . . . . . . . 10 Schedule of Investments . . . . . . . . . . . . . . . . . . . . . . . 14 FINANCIAL STATEMENTS Statement of Assets and Liabilities . . . . . . . . . . . . . . . . . 17 Statement of Operations . . . . . . . . . . . . . . . . . . . . . . . 19 Statement of Changes in Net Assets. . . . . . . . . . . . . . . . . . 21 Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . 24 Financial Highlights. . . . . . . . . . . . . . . . . . . . . . . . . 36 OTHER INFORMATION Share Class Information . . . . . . . . . . . . . . . . . . . . . . . 56 Additional Information. . . . . . . . . . . . . . . . . . . . . . . . 57 Index Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . 58 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, 2008 Average Annual Returns 6 Since Inception months(1) 1 year Inception Date LIVESTRONG INCOME PORTFOLIO INVESTOR CLASS 1.86% 4.58% 6.84% 8/31/04 Institutional Class 1.96% 4.78% 7.04% 8/31/04 Advisor Class 1.83% 4.41% 6.58% 8/31/04 R Class 1.61% 4.06% 6.30% 8/31/04 LIVESTRONG 2015 PORTFOLIO INVESTOR CLASS 1.42% 4.76% 8.57% 8/31/04 Institutional Class 1.45% 4.97% 8.77% 8/31/04 Advisor Class 1.34% 4.59% 8.31% 8/31/04 R Class 1.16% 4.32% 8.05% 8/31/04 LIVESTRONG 2025 PORTFOLIO INVESTOR CLASS 0.12% 3.82% 9.71% 8/31/04 Institutional Class 0.16% 4.03% 9.92% 8/31/04 Advisor Class -0.05% 3.56% 9.44% 8/31/04 R Class -0.22% 3.21% 9.15% 8/31/04 RUSSELL 3000 INDEX(2) -4.54% -3.08% 9.34% -- CITIGROUP US BROAD INVESTMENT-GRADE BOND INDEX 7.38% 9.32% 5.08% -- (1) Total returns for periods less than one year are not annualized. (2) Data provided by Lipper Inc. -- A Reuters Company. © 2008 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. The Russell 3000 Index represents approximately 98% of the investable U.S. equity market and provides a broad measure of equity performance. The Citigroup US Broad Investment-Grade Bond Index represents 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 each LIVESTRONG Portfolio's asset allocations as of January 31, 2008.) 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. International investing involves special risks, such as political instability and currency fluctuations. Investing in emerging markets may accentuate these risks. Unless otherwise indicated, performance reflects Investor Class shares; performance for other share classes will vary due to differences in fee structure. For information about other share classes available, please consult the prospectus. 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, 2008 Average Annual Returns 6 Since Inception months(1) 1 year Inception Date LIVESTRONG 2035 PORTFOLIO Investor Class -1.25% 3.00% 10.83% 8/31/04 Institutional Class -1.12% 3.21% 11.07% 8/31/04 Advisor Class -1.43% 2.74% 10.56% 8/31/04 R Class -1.53% 2.48% 10.29% 8/31/04 LIVESTRONG 2045 PORTFOLIO Investor Class -2.13% 2.46% 11.33% 8/31/04 Institutional Class -2.01% 2.74% 11.57% 8/31/04 Advisor Class -2.23% 2.20% 11.07% 8/31/04 R Class -2.34% 2.02% 10.80% 8/31/04 RUSSELL 3000 INDEX(2) -4.54% -3.08% 9.34% -- CITIGROUP US BROAD INVESTMENT-GRADE BOND INDEX 7.38% 9.32% 5.08% -- (1) Total returns for periods less than one year are not annualized. (2) Data provided by Lipper Inc. -- A Reuters Company. © 2008 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. The Russell 3000 Index represents approximately 98% of the investable U.S. equity market and provides a broad measure of equity performance. The Citigroup US Broad Investment-Grade Bond Index represents 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 each LIVESTRONG Portfolio's asset allocations as of January 31, 2008.) 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. International investing involves special risks, such as political instability and currency fluctuations. Investing in emerging markets may accentuate these risks. Unless otherwise indicated, performance reflects Investor Class shares; performance for other share classes will vary due to differences in fee structure. For information about other share classes available, please consult the prospectus. 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
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*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
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*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. International investing involves special risks, such as political instability and currency fluctuations. Investing in emerging markets may accentuate these risks. Unless otherwise indicated, performance reflects Investor Class shares; performance for other share classes will vary due to differences in fee structure. For information about other share classes available, please consult the prospectus. 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
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*From 8/31/04, the Investor Class's inception date. Not annualized. Growth of $10,000 Over Life of LIVESTRONG 2035 Portfolio -- Investor Class $10,000 investment made August 31, 2004
![](https://capedge.com/proxy/N-CSRS/0001293210-08-000013/growthlivestrong20350803.gif)
*From 8/31/04, the Investor Class's inception date. Not annualized. Data presented reflect past performance. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance shown. Investment return and principal value will fluctuate, and redemption value may be more or less than original cost. To obtain performance data current to the most recent month end, please call 1-800-345-2021 or visit americancentury.com. The performance of LIVESTRONG Portfolios is dependent on the performance of their underlying American Century funds, and will assume the risks associated with these funds. The risks will vary according to each LIVESTRONG Portfolio's asset allocation, and a fund with a later target date is expected to be more volatile than one with an earlier target date. International investing involves special risks, such as political instability and currency fluctuations. Investing in emerging markets may accentuate these risks. Unless otherwise indicated, performance reflects Investor Class shares; performance for other share classes will vary due to differences in fee structure. For information about other share classes available, please consult the prospectus. 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
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*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 2008 LIVESTRONG Income Portfolio -- Investor Class 5.00% 5.54% 8.18% 4.58% LIVESTRONG 2015 Portfolio -- Investor Class 6.80% 8.55% 9.07% 4.76% LIVESTRONG 2025 Portfolio -- Investor Class 8.00% 11.30% 9.99% 3.82% LIVESTRONG 2035 Portfolio -- Investor Class 9.33% 13.33% 11.38% 3.00% LIVESTRONG 2045 Portfolio -- Investor Class 10.07% 14.20% 12.09% 2.46% Russell 3000 Index 8.87% 12.67% 14.11% -3.08% Citigroup US Broad Investment-Grade Bond Index 1.91% 1.91% 4.32% 9.32% *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. International investing involves special risks, such as political instability and currency fluctuations. Investing in emerging markets may accentuate these risks. Unless otherwise indicated, performance reflects Investor Class shares; performance for other share classes will vary due to differences in fee structure. For information about other share classes available, please consult the prospectus. 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 The five LIVESTRONG Portfolios produced mixed results for the six months ended January 31, 2008. Returns ranged from 1.86%* for LIVESTRONG Income Portfolio to -2.13%* for LIVESTRONG 2045 Portfolio (see pages 2-6 for more detailed performance information). The Portfolios' performance reflected a decline in stock markets worldwide and robust returns for bonds. 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 A sharp increase in volatility led to a decline in the broad U.S. stock indexes during the six-month period. The driving factor was a meltdown in the subprime mortgage industry and a subsequent credit crunch. Tighter lending standards caused the credit markets to seize up and crimped funding for leveraged buy-outs, removing what had been an important leg of support for the stock market. In addition, banks and financial firms reported unexpectedly large subprime-related losses, corporate profit growth weakened, and rising energy and commodity prices sparked inflation worries despite evidence of slowing economic activity. In response, the Federal Reserve (the Fed) lowered its federal funds rate target for the first time since June 2003, cutting rates three times in the last four months of 2007 and twice more in January 2008. Although the Fed's actions helped alleviate some of the credit and economic concerns, many market participants grew concerned that the Fed had fallen behind the curve and acted too late to prevent a recession. As a result, with the exception of an uneven rally in September and October, the major stock indexes generally fell throughout the six-month period. Large-cap stocks held up the best (see the accompanying table), while small-cap issues suffered the largest declines. Growth stocks comfortably outpaced value shares across all market capitalizations. Market Index Total Returns For the six months ended January 31, 2008(1) U.S. STOCKS Russell 1000 (Large-Cap)(2) -4.27% Russell Midcap(2) -6.70% Russell 2000 (Small-Cap)(2) -7.51% INTERNATIONAL STOCKS MSCI EAFE (Europe, Australasia, Far East) Index -7.52% MSCI EM (Emerging Markets) Index -1.33% U.S. FIXED INCOME Lehman Brothers U.S. Aggregate(2) 6.82% 10-year U.S. Treasury Note 11.36% 90-Day U.S. Treasury Bill 2.65% INTERNATIONAL BONDS Citigroup Non-US World Government Bond(2) 13.06% (1) Total returns for periods less than one year are not annualized. (2) Data provided by Lipper Inc. -- A Reuters Company. © 2008 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 fund returns referenced in this commentary are for Investor Class shares. Total returns for periods less than one year are not annualized. - ------ 7 LIVESTRONG Portfolios International stocks generally produced larger losses than the domestic market during the six-month period despite a weaker U.S. dollar. Market volatility in the U.S. spread to other markets as subprime-related losses among financial firms worldwide led to concerns about a peak in global economic growth. Emerging markets, which often underperform in a volatile environment, held up well during the period, declining modestly overall. Among developed markets, the Pacific Rim countries (excluding Japan) generated the best results, while the Japanese stock market declined notably amid sluggish domestic consumption. BOND MARKET REVIEW In contrast to the global equity markets, U.S. bonds advanced during the six-month period. The fallout from the subprime debacle led many investors to shun riskier Underlying Fund Allocations* as a % of net assets as of January 31, 2008 LIVESTRONG LIVESTRONG LIVESTRONG LIVESTRONG LIVESTRONG Income 2015 2025 2035 2045 Portfolio Portfolio Portfolio Portfolio Portfolio EQUITY NT Equity Growth Fund 13.0% 12.4% 12.3% 14.0% 15.0% NT Growth Fund 6.5% 7.9% 11.0% 13.9% 14.9% NT Large Company Value Fund 11.1% 11.3% 12.2% 14.1% 15.4% NT Mid Cap Value Fund 4.1% 5.0% 5.3% 6.8% 7.3% NT Small Company Fund 2.0% 2.0% 3.5% 4.0% 4.8% NT Vista Fund 2.5% 4.0% 5.0% 6.8% 7.3% Real Estate Fund 1.0% 1.4% 1.8% 2.2% 2.7% NT Emerging Markets Fund -- 1.7% 2.9% 4.5% 6.2% NT International Growth Fund 5.0% 6.3% 8.7% 10.0% 9.8% TOTAL EQUITY 45.2% 52.0% 62.7% 76.3% 83.4% FIXED INCOME High-Yield Fund 3.8% 3.5% 3.0% 2.2% 1.6% Inflation-Adjusted Bond Fund 7.6% 7.2% 6.0% 4.4% 3.3% NT Diversified Bond Fund 26.3% 24.6% 20.5% 15.3% 11.6% International Bond Fund 7.0% 5.5% 1.5% -- -- TOTAL FIXED INCOME 44.7% 40.8% 31.0% 21.9% 16.5% PREMIUM MONEY MARKET FUND 9.9% 6.4% 4.9% 1.5% -- OTHER ASSETS AND LIABILITIES 0.2% 0.8% 1.4% 0.3% 0.1% *Institutional Class, except Premium Money Market Fund Investor Class. - ------ 8 LIVESTRONG Portfolios investments and seek out the relative safety of the bond market. The Fed's short-term interest rate cuts, which brought the federal funds rate down from 5.25% to 3.00%, also contributed favorably to bond performance. Although bond yields declined across the board, shorter-term yields fell the most -- the two-year Treasury note yield declined from 4.53% to 2.10%, reflecting the change in Fed rate policy and expectations of further rate cuts going forward. Longer-term bond yields fell to a lesser degree -- the 10-year Treasury bond yield slid from 4.74% to 3.60%. Consequently, the gap between short- and long-term bond yields widened substantially, creating a steeper yield curve. Treasury and government agency bonds delivered the best returns, benefiting the most from the flight to quality. Higher-quality mortgage-backed securities also held up well. Corporate bonds lagged as credit concerns intensified in the wake of the subprime meltdown; most notably, high-yield corporate bonds were the weakest performers in the bond market. Foreign bonds produced double-digit gains, reflecting the favorable bond environment globally and a broad decline in the U.S. dollar versus other major currencies. PORTFOLIO PERFORMANCE 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.) Just one equity fund within LIVESTRONG Portfolios posted a positive return for the six-month period -- NT Growth, a large-cap growth fund. Among the remaining stock funds, Real Estate produced the smallest decline thanks to strong gains in the first half of the period. The Portfolios' two international equity funds -- NT Emerging Markets and NT International Growth - -- also held up well, as did mid-cap growth component NT Vista. The biggest decliner among the Portfolios' equity holdings was NT Small Company, reflecting the broad weakness in small-cap stocks. The best-performing fund in LIVESTRONG Portfolios was Inflation-Adjusted Bond, which benefited from rising inflation driven by higher energy and commodity prices. International Bond also enjoyed a double-digit return that was in line with the performance of foreign fixed-income markets. NT Diversified Bond advanced solidly, while High-Yield and Premium Money Market produced modestly positive returns. OUTLOOK U.S. economic growth is likely to be subpar in 2008. The severe housing downturn and subprime-related credit crunch have impaired lending activity, reduced liquidity in the credit markets, and increased the likelihood of a recession. The Fed has already taken significant steps to boost liquidity and economic activity, but the central bank's future efforts may be limited by the inflationary threats of chronically high energy prices and a weak U.S. dollar. In an uncertain and volatile environment, owning investments like LIVESTRONG Portfolios -- which invest in a diversified mix of stocks, bonds, and money market funds -- becomes increasingly important. - ------ 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, 2007 to January 31, 2008. 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. - ------ 10 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. Effective Expenses Expenses Paid Paid Beginning Ending During During Effective Account Account Period(1) Annualized Period(2) Annualized Value Value 8/1/07 - Expense 8/1/07 - Expense 8/1/07 1/31/08 1/31/08 Ratio(1) 1/31/08 Ratio(2) LIVESTRONG Income Portfolio ACTUAL Investor Class $1,000 $1,018.60 $1.01 0.20% $3.86 0.76% Institutional Class $1,000 $1,019.60 $0.00 0.00%(3) $2.84 0.56% Advisor Class $1,000 $1,018.30 $2.28 0.45% $5.12 1.01% R Class $1,000 $1,016.10 $3.55 0.70% $6.39 1.26% HYPOTHETICAL Investor Class $1,000 $1,024.13 $1.02 0.20% $3.86 0.76% Institutional Class $1,000 $1,025.14 $0.00 0.00%(3) $2.85 0.56% Advisor Class $1,000 $1,022.87 $2.29 0.45% $5.13 1.01% R Class $1,000 $1,021.62 $3.56 0.70% $6.39 1.26% (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 366, 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 funds' independent directors and its legal counsel, as well as interest, did not exceed 0.005%. - ------ 11 Effective Expenses Expenses Paid Paid Beginning Ending During During Effective Account Account Period(1) Annualized Period(2) Annualized Value Value 8/1/07 - Expense 8/1/07 - Expense 8/1/07 1/31/08 1/31/08 Ratio(1) 1/31/08 Ratio(2) LIVESTRONG 2015 Portfolio ACTUAL Investor Class $1,000 $1,014.20 $1.01 0.20% $4.05 0.80% Institutional Class $1,000 $1,014.50 $0.00 0.00%(3) $3.04 0.60% Advisor Class $1,000 $1,013.40 $2.28 0.45% $5.31 1.05% R Class $1,000 $1,011.60 $3.54 0.70% $6.57 1.30% HYPOTHETICAL Investor Class $1,000 $1,024.13 $1.02 0.20% $4.06 0.80% Institutional Class $1,000 $1,025.14 $0.00 0.00%(3) $3.05 0.60% Advisor Class $1,000 $1,022.87 $2.29 0.45% $5.33 1.05% R Class $1,000 $1,021.62 $3.56 0.70% $6.60 1.30% LIVESTRONG 2025 Portfolio ACTUAL Investor Class $1,000 $1,001.20 $1.01 0.20% $4.28 0.85% Institutional Class $1,000 $1,001.60 $0.00 0.00%(3) $3.27 0.65% Advisor Class $1,000 $999.50 $2.26 0.45% $5.53 1.10% R Class $1,000 $997.80 $3.52 0.70% $6.78 1.35% HYPOTHETICAL Investor Class $1,000 $1,024.13 $1.02 0.20% $4.32 0.85% Institutional Class $1,000 $1,025.14 $0.00 0.00%(3) $3.30 0.65% Advisor Class $1,000 $1,022.87 $2.29 0.45% $5.58 1.10% R Class $1,000 $1,021.62 $3.56 0.70% $6.85 1.35% (1) Expenses are equal to the class's annualized expense ratio listed in the table above, multiplied by the average account value over the period, multiplied by 184, the number of days in the most recent fiscal half-year, divided by 366, 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 funds' independent directors and its legal counsel, as well as interest, did not exceed 0.005%. - ------ 12 Effective Expenses Expenses Paid Paid Beginning Ending During During Effective Account Account Period(1) Annualized Period(2) Annualized Value Value 8/1/07 - Expense 8/1/07 - Expense 8/1/07 1/31/08 1/31/08 Ratio(1) 1/31/08 Ratio(2) LIVESTRONG 2035 Portfolio ACTUAL Investor Class $1,000 $987.50 $1.00 0.20% $4.50 0.90% Institutional Class $1,000 $988.80 $0.00 0.00%(3) $3.50 0.70% Advisor Class $1,000 $985.70 $2.25 0.45% $5.74 1.15% R Class $1,000 $984.70 $3.49 0.70% $6.98 1.40% HYPOTHETICAL Investor Class $1,000 $1,024.13 $1.02 0.20% $4.57 0.90% Institutional Class $1,000 $1,025.14 $0.00 0.00%(3) $3.56 0.70% Advisor Class $1,000 $1,022.87 $2.29 0.45% $5.84 1.15% R Class $1,000 $1,021.62 $3.56 0.70% $7.10 1.40% LIVESTRONG 2045 Portfolio ACTUAL Investor Class $1,000 $978.70 $0.99 0.20% $4.63 0.93% Institutional Class $1,000 $979.90 $0.00 0.00%(3) $3.63 0.73% Advisor Class $1,000 $977.70 $2.24 0.45% $5.87 1.18% R Class $1,000 $976.60 $3.48 0.70% $7.10 1.43% HYPOTHETICAL Investor Class $1,000 $1,024.13 $1.02 0.20% $4.72 0.93% Institutional Class $1,000 $1,025.14 $0.00 0.00%(3) $3.71 0.73% Advisor Class $1,000 $1,022.87 $2.29 0.45% $5.99 1.18% R Class $1,000 $1,021.62 $3.56 0.70% $7.25 1.43% (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 366, 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 funds' independent directors and its legal counsel, as well as interest, did not exceed 0.005%. - ------ 13 SCHEDULE OF INVESTMENTS LIVESTRONG Portfolios JANUARY 31, 2008 (UNAUDITED) Shares Value LIVESTRONG Income Portfolio Mutual Funds(1) -- 99.8% DOMESTIC EQUITY FUNDS -- 40.2% 818,237 NT Equity Growth Fund Institutional Class $ 8,386,928 377,454 NT Growth Fund Institutional Class 4,163,318 697,252 NT Large Company Value Fund Institutional Class 7,167,750 283,944 NT Mid Cap Value Fund Institutional Class 2,617,964 153,497 NT Small Company Fund Institutional Class 1,303,190 142,630 NT Vista Fund Institutional Class 1,617,424 29,975 Real Estate Fund Institutional Class 645,062 ------------ 25,901,636 ------------ DOMESTIC FIXED INCOME FUNDS -- 37.7% 401,039 High-Yield Fund Institutional Class 2,434,307 417,867 Inflation-Adjusted Bond Fund Institutional Class 4,893,223 1,606,638 NT Diversified Bond Fund Institutional Class 16,966,104 ------------ 24,293,634 ------------ MONEY MARKET FUNDS -- 9.9% 6,352,645 Premium Money Market Fund Investor Class 6,352,645 ------------ INTERNATIONAL FIXED INCOME FUNDS -- 7.0% 297,998 International Bond Fund Institutional Class 4,496,790 ------------ INTERNATIONAL EQUITY FUNDS -- 5.0% 297,150 NT International Growth Fund Institutional Class 3,244,878 ------------ TOTAL INVESTMENT SECURITIES -- 99.8% (Cost $62,440,444) 64,289,583 ------------ OTHER ASSETS AND LIABILITIES -- 0.2% 105,704 ------------ TOTAL NET ASSETS -- 100.0% $64,395,287 ============ 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 LIVESTRONG 2015 Portfolio Mutual Funds(1) -- 99.2% DOMESTIC EQUITY FUNDS -- 44.0% 2,291,215 NT Equity Growth Fund Institutional Class $ 23,484,954 1,352,984 NT Growth Fund Institutional Class 14,923,414 2,076,573 NT Large Company Value Fund Institutional Class 21,347,170 1,033,664 NT Mid Cap Value Fund Institutional Class 9,530,382 447,048 NT Small Company Fund Institutional Class 3,795,438 664,609 NT Vista Fund Institutional Class 7,536,666 117,847 Real Estate Fund Institutional Class 2,536,067 ------------ 83,154,091 ------------ DOMESTIC FIXED INCOME FUNDS -- 35.3% 1,106,671 High-Yield Fund Institutional Class 6,717,493 1,153,149 Inflation-Adjusted Bond Fund Institutional Class 13,503,375 4,398,385 NT Diversified Bond Fund Institutional Class 46,446,935 ------------ 66,667,803 ------------ INTERNATIONAL EQUITY FUNDS -- 8.0% 268,451 NT Emerging Markets Fund Institutional Class 3,242,888 1,081,858 NT International Growth Fund Institutional Class 11,813,889 ------------ 15,056,777 ------------ MONEY MARKET FUNDS -- 6.4% 12,027,270 Premium Money Market Fund Investor Class 12,027,270 ------------ INTERNATIONAL FIXED INCOME FUNDS -- 5.5% 694,351 International Bond Fund Institutional Class 10,477,757 ------------ TOTAL INVESTMENT SECURITIES -- 99.2% (Cost $181,594,344) 187,383,698 ------------ OTHER ASSETS AND LIABILITIES -- 0.8% 1,446,715 ------------ TOTAL NET ASSETS -- 100.0% $188,830,413 ============ 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. - ------ 14 LIVESTRONG Portfolios Shares Value LIVESTRONG 2025 Portfolio Mutual Funds(1) -- 98.6% DOMESTIC EQUITY FUNDS -- 51.1% 3,118,769 NT Equity Growth Fund Institutional Class $ 31,967,381 2,589,919 NT Growth Fund Institutional Class 28,566,807 3,077,764 NT Large Company Value Fund Institutional Class 31,639,414 1,477,540 NT Mid Cap Value Fund Institutional Class 13,622,919 1,065,081 NT Small Company Fund Institutional Class 9,042,538 1,130,852 NT Vista Fund Institutional Class 12,823,862 219,843 Real Estate Fund Institutional Class 4,731,021 ------------ 132,393,942 ------------ DOMESTIC FIXED INCOME FUNDS -- 29.5% 1,276,745 High-Yield Fund Institutional Class 7,749,842 1,330,429 Inflation-Adjusted Bond Fund Institutional Class 15,579,324 5,030,843 NT Diversified Bond Fund Institutional Class 53,125,717 ------------ 76,454,883 ------------ INTERNATIONAL EQUITY FUNDS -- 11.6% 626,603 NT Emerging Markets Fund Institutional Class 7,569,364 2,062,247 NT International Growth Fund Institutional Class 22,519,737 ------------ 30,089,101 ------------ MONEY MARKET FUNDS -- 4.9% 12,596,810 Premium Money Market Fund Investor Class 12,596,810 ------------ INTERNATIONAL FIXED INCOME FUNDS -- 1.5% 253,219 International Bond Fund Institutional Class 3,821,075 ------------ TOTAL INVESTMENT SECURITIES -- 98.6% (Cost $248,756,534) 255,355,811 ------------ OTHER ASSETS AND LIABILITIES -- 1.4% 3,597,212 ------------ TOTAL NET ASSETS -- 100.0% $258,953,023 ============ 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 LIVESTRONG 2035 Portfolio Mutual Funds(1) -- 99.7% DOMESTIC EQUITY FUNDS -- 61.8% 1,973,112 NT Equity Growth Fund Institutional Class $ 20,224,402 1,820,892 NT Growth Fund Institutional Class 20,084,439 1,986,553 NT Large Company Value Fund Institutional Class 20,421,765 1,072,972 NT Mid Cap Value Fund Institutional Class 9,892,802 687,588 NT Small Company Fund Institutional Class 5,837,622 862,347 NT Vista Fund Institutional Class 9,779,015 157,741 Real Estate Fund Institutional Class 3,394,586 ------------ 89,634,631 ------------ DOMESTIC FIXED INCOME FUNDS -- 21.9% 520,430 High-Yield Fund Institutional Class 3,159,010 542,304 Inflation-Adjusted Bond Fund Institutional Class 6,350,380 2,105,282 NT Diversified Bond Fund Institutional Class 22,231,778 ------------ 31,741,168 ------------ INTERNATIONAL EQUITY FUNDS -- 14.5% 531,169 NT Emerging Markets Fund Institutional Class 6,416,522 1,331,558 NT International Growth Fund Institutional Class 14,540,613 ------------ 20,957,135 ------------ MONEY MARKET FUNDS -- 1.5% 2,135,676 Premium Money Market Fund Investor Class 2,135,676 ------------ TOTAL INVESTMENT SECURITIES -- 99.7% (Cost $142,084,316) 144,468,610 ------------ OTHER ASSETS AND LIABILITIES -- 0.3% 402,458 ------------ TOTAL NET ASSETS -- 100.0% $144,871,068 ============ 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. - ------ 15 LIVESTRONG Portfolios Shares Value LIVESTRONG 2045 Portfolio Mutual Funds(1) -- 99.9% DOMESTIC EQUITY FUNDS -- 67.4% 1,495,777 NT Equity Growth Fund Institutional Class $ 15,331,714 1,380,204 NT Growth Fund Institutional Class 15,223,650 1,531,256 NT Large Company Value Fund Institutional Class 15,741,303 815,657 NT Mid Cap Value Fund Institutional Class 7,520,358 577,851 NT Small Company Fund Institutional Class 4,905,955 655,362 NT Vista Fund Institutional Class 7,431,805 135,357 Real Estate Fund Institutional Class 2,912,883 ------------ 69,067,668 ------------ DOMESTIC FIXED INCOME FUNDS -- 16.5% 276,253 High-Yield Fund Institutional Class 1,676,856 287,881 Inflation-Adjusted Bond Fund Institutional Class 3,371,087 1,120,935 NT Diversified Bond Fund Institutional Class 11,837,073 ------------ 16,885,016 ------------ INTERNATIONAL EQUITY FUNDS -- 16.0% 522,001 NT Emerging Markets Fund Institutional Class 6,305,772 918,906 NT International Growth Fund Institutional Class 10,034,454 ------------ 16,340,226 ------------ TOTAL INVESTMENT SECURITIES -- 99.9% (Cost $101,446,219) 102,292,910 ------------ OTHER ASSETS AND LIABILITIES -- 0.1% 123,125 ------------ TOTAL NET ASSETS -- 100.0% $102,416,035 ============ 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. - ------ 16 STATEMENT OF ASSETS AND LIABILITIES JANUARY 31, 2008 (UNAUDITED) LIVESTRONG LIVESTRONG LIVESTRONG Income 2015 2025 Portfolio Portfolio Portfolio ASSETS Investment securities in affiliates, at value (cost of $62,440,444, $181,594,344 and $248,756,534, respectively) $64,289,583 $187,383,698 $255,355,811 Cash 11,066 34,791 41,334 Receivable for capital shares sold 190 1,174,712 3,284,197 Distributions receivable from affiliates 105,094 270,817 311,627 ----------- ------------ ------------ 64,405,933 188,864,018 258,992,969 ----------- ------------ ------------ LIABILITIES Accrued administrative fees 9,239 28,675 35,843 Distribution and service fees payable 1,407 4,930 4,103 ----------- ------------ ------------ 10,646 33,605 39,946 ----------- ------------ ------------ NET ASSETS $64,395,287 $188,830,413 $258,953,023 =========== ============ ============ NET ASSETS CONSIST OF: Capital (par value and paid-in surplus) $62,291,334 $181,034,930 $248,849,252 Undistributed net investment income 59,682 133,967 88,636 Undistributed net realized gain on investment transactions 195,132 1,872,162 3,415,858 Net unrealized appreciation on investments 1,849,139 5,789,354 6,599,277 ----------- ------------ ------------ $64,395,287 $188,830,413 $258,953,023 =========== ============ ============ INVESTOR CLASS, $0.01 PAR VALUE Net assets $48,242,945 $151,655,916 $196,113,664 Shares outstanding 4,400,931 13,039,831 16,444,698 Net asset value per share $10.96 $11.63 $11.93 INSTITUTIONAL CLASS, $0.01 PAR VALUE Net assets $9,359,661 $16,341,427 $41,783,349 Shares outstanding 853,663 1,404,533 3,502,777 Net asset value per share $10.96 $11.63 $11.93 ADVISOR CLASS, $0.01 PAR VALUE Net assets $6,660,354 $16,752,349 $19,403,179 Shares outstanding 607,869 1,440,893 1,626,994 Net asset value per share $10.96 $11.63 $11.93 R CLASS, $0.01 PAR VALUE Net assets $132,327 $4,080,721 $1,652,831 Shares outstanding 12,081 350,936 138,629 Net asset value per share $10.95 $11.63 $11.92 See Notes to Financial Statements. - ------ 17 JANUARY 31, 2008 (UNAUDITED) LIVESTRONG LIVESTRONG 2035 2045 Portfolio Portfolio ASSETS Investment securities in affiliates, at value (cost of $142,084,316 and $101,446,219, respectively) $144,468,610 $102,292,910 Cash 24,045 15,037 Receivable for capital shares sold 284,829 62,221 Distributions receivable from affiliates 116,766 60,363 ------------ ------------ 144,894,250 102,430,531 ------------ ------------ LIABILITIES Accrued administrative fees 19,794 11,979 Distribution and service fees payable 3,388 2,517 ------------ ------------ 23,182 14,496 ------------ ------------ NET ASSETS $144,871,068 $102,416,035 ============ ============ NET ASSETS CONSIST OF: Capital (par value and paid-in surplus) $140,149,961 $100,366,225 Accumulated net investment loss (12,828) (19,665) Undistributed net realized gain on investment transactions 2,349,641 1,222,784 Net unrealized appreciation on investments 2,384,294 846,691 ------------ ------------ $144,871,068 $102,416,035 ============ ============ INVESTOR CLASS, $0.01 PAR VALUE Net assets $105,448,002 $61,201,300 Shares outstanding 8,443,082 4,825,990 Net asset value per share $12.49 $12.68 INSTITUTIONAL CLASS, $0.01 PAR VALUE Net assets $22,235,010 $30,190,981 Shares outstanding 1,779,422 2,379,972 Net asset value per share $12.50 $12.69 ADVISOR CLASS, $0.01 PAR VALUE Net assets $15,778,518 $10,094,079 Shares outstanding 1,263,234 796,232 Net asset value per share $12.49 $12.68 R CLASS, $0.01 PAR VALUE Net assets $1,409,538 $929,675 Shares outstanding 112,849 73,331 Net asset value per share $12.49 $12.68 See Notes to Financial Statements. - ------ 18 STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED JANUARY 31, 2008 (UNAUDITED) LIVESTRONG LIVESTRONG LIVESTRONG Income 2015 2025 Portfolio Portfolio Portfolio INVESTMENT INCOME (LOSS) INCOME: Income distributions from underlying funds -- affiliates $ 1,538,009 $4,659,121 $ 6,112,385 ----------- ----------- ------------ EXPENSES: Administrative fees 54,748 171,689 207,820 Distribution and service fees: Advisor Class 9,523 22,430 21,433 R Class 328 10,071 3,987 Directors' fees and expenses 711 2,095 2,691 ----------- ----------- ------------ 65,310 206,285 235,931 ----------- ----------- ------------ NET INVESTMENT INCOME (LOSS) 1,472,699 4,452,836 5,876,454 ----------- ----------- ------------ NET REALIZED AND UNREALIZED GAIN (LOSS) ON AFFILIATES NET REALIZED GAIN (LOSS) ON: Sale of investments in underlying funds 67,429 816,377 1,061,689 Capital gain distributions received from underlying funds 399,739 1,581,588 2,819,431 ----------- ----------- ------------ 467,168 2,397,965 3,881,120 ----------- ----------- ------------ CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS IN UNDERLYING FUNDS (721,221) (4,134,064) (10,067,751) ----------- ----------- ------------ NET REALIZED AND UNREALIZED GAIN (LOSS) ON AFFILIATES (254,053) (1,736,099) (6,186,631) ----------- ----------- ------------ NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 1,218,646 $2,716,737 $ (310,177) =========== =========== ============ See Notes to Financial Statements. - ------ 19 FOR THE SIX MONTHS ENDED JANUARY 31, 2008 (UNAUDITED) LIVESTRONG LIVESTRONG 2035 2045 Portfolio Portfolio INVESTMENT INCOME (LOSS) INCOME: Income distributions from underlying funds -- affiliates $ 3,454,660 $ 2,516,806 ------------ ------------ EXPENSES: Administrative fees 115,371 65,824 Distribution and service fees: Advisor Class 17,395 12,638 R Class 3,509 2,242 Directors' fees and expenses 1,522 1,046 ------------ ------------ 137,797 81,750 ------------ ------------ NET INVESTMENT INCOME (LOSS) 3,316,863 2,435,056 ------------ ------------ NET REALIZED AND UNREALIZED GAIN (LOSS) ON AFFILIATES NET REALIZED GAIN (LOSS) ON: Sale of investments in underlying funds 660,740 (144,043) Capital gain distributions received from underlying funds 1,949,992 1,566,518 ------------ ------------ 2,610,732 1,422,475 ------------ ------------ CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS IN UNDERLYING FUNDS (7,802,688) (6,663,551) ------------ ------------ NET REALIZED AND UNREALIZED GAIN (LOSS) ON AFFILIATES (5,191,956) (5,241,076) ------------ ------------ NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $(1,875,093) $(2,806,020) ============ ============ See Notes to Financial Statements. - ------ 20 STATEMENT OF CHANGES IN NET ASSETS SIX MONTHS ENDED JANUARY 31, 2008 (UNAUDITED) AND YEAR ENDED JULY 31, 2007 LIVESTRONG Income Portfolio LIVESTRONG 2015 Portfolio Increase (Decrease) in Net Assets 2008 2007 2008 2007 OPERATIONS Net investment income (loss) $ 1,472,699 $ 1,450,147 $ 4,452,836 $ 3,968,852 Net realized gain (loss) 467,168 (9,450) 2,397,965 316,017 Change in net unrealized appreciation (depreciation) (721,221) 2,759,798 (4,134,064) 11,245,515 ----------- ------------ ------------ ------------ Net increase (decrease) in net assets resulting from operations 1,218,646 4,200,495 2,716,737 15,530,384 ----------- ------------ ------------ ------------ DISTRIBUTIONS TO SHAREHOLDERS From net investment income: Investor Class (1,194,220) (1,047,364) (5,029,481) (2,492,556) Institutional Class (229,670) (174,881) (526,172) (296,721) Advisor Class (161,412) (147,969) (486,532) (318,604) R Class (2,828) (1,399) (120,545) (9,697) From net realized gains: Investor Class (100,510) (470,015) (582,593) (2,496,248) Institutional Class (18,324) (67,991) (57,480) (272,911) Advisor Class (12,887) (72,923) (60,961) (358,795) R Class (264) (648) (16,447) (12,472) ----------- ------------ ------------ ------------ Decrease in net assets from distributions (1,720,115) (1,983,190) (6,880,211) (6,258,004) ----------- ------------ ------------ ------------ CAPITAL SHARE TRANSACTIONS Net increase (decrease) in net assets from capital share transactions 4,261,378 23,632,442 15,076,706 58,866,551 ----------- ------------ ------------ ------------ NET INCREASE (DECREASE) IN NET ASSETS 3,759,909 25,849,747 10,913,232 68,138,931 NET ASSETS Beginning of period 60,635,378 34,785,631 177,917,181 109,778,250 ----------- ------------ ------------ ------------ End of period $64,395,287 $60,635,378 $188,830,413 $177,917,181 =========== ============ ============ ============ Undistributed net investment income $59,682 $175,113 $133,967 $1,843,861 =========== ============ ============ ============ See Notes to Financial Statements. - ------ 21 SIX MONTHS ENDED JANUARY 31, 2008 (UNAUDITED) AND YEAR ENDED JULY 31, 2007 LIVESTRONG 2025 Portfolio LIVESTRONG 2035 Portfolio Increase (Decrease) in Net Assets 2008 2007 2008 2007 OPERATIONS Net investment income (loss) $ 5,876,454 $ 4,725,147 $ 3,316,863 $ 1,886,107 Net realized gain (loss) 3,881,120 693,679 2,610,732 360,790 Change in net unrealized appreciation (depreciation) (10,067,751) 19,418,380 (7,802,688) 11,667,564 ------------ ------------ ------------ ------------ Net increase (decrease) in net assets resulting from operations (310,177) 24,837,206 (1,875,093) 13,914,461 ------------ ------------ ------------ ------------ DISTRIBUTIONS TO SHAREHOLDERS From net investment income: Investor Class (6,067,719) (2,728,920) (3,073,437) (1,038,223) Institutional Class (1,379,241) (782,731) (715,086) (266,923) Advisor Class (459,566) (222,178) (352,833) (107,434) R Class (45,611) (13,994) (45,651) (5,618) From net realized gains: Investor Class (763,033) (5,948,432) (398,837) (2,806,849) Institutional Class (162,933) (1,544,817) (86,918) (635,902) Advisor Class (62,855) (556,560) (50,009) (349,261) R Class (6,836) (41,251) (7,128) (22,938) ------------ ------------ ------------ ------------ Decrease in net assets from distributions (8,947,794) (11,838,883) (4,729,899) (5,233,148) ------------ ------------ ------------ ------------ CAPITAL SHARE TRANSACTIONS Net increase (decrease) in net assets from capital share transactions 30,522,500 73,140,620 23,589,290 50,376,625 ------------ ------------ ------------ ------------ NET INCREASE (DECREASE) IN NET ASSETS 21,264,529 86,138,943 16,984,298 59,057,938 ------------ ------------ ------------ ------------ NET ASSETS Beginning of period 237,688,494 151,549,551 127,886,770 68,828,832 ------------ ------------ ------------ ------------ End of period $258,953,023 $237,688,494 $144,871,068 $127,886,770 ============ ============ ============ ============ Accumulated undistributed net investment income (loss) $88,636 $2,164,319 $(12,828) $857,316 ============ ============ ============ ============ See Notes to Financial Statements. - ------ 22 SIX MONTHS ENDED JANUARY 31, 2008 (UNAUDITED) AND YEAR ENDED JULY 31, 2007 LIVESTRONG 2045 Portfolio Increase (Decrease) in Net Assets 2008 2007 OPERATIONS Net investment income (loss) $ 2,435,056 $ 1,088,643 Net realized gain (loss) 1,422,475 225,057 Change in net unrealized appreciation (depreciation) (6,663,551) 8,371,833 ------------ ----------- Net increase (decrease) in net assets resulting from operations (2,806,020) 9,685,533 ------------ ----------- DISTRIBUTIONS TO SHAREHOLDERS From net investment income: Investor Class (1,730,917) (468,015) Institutional Class (914,356) (256,627) Advisor Class (270,802) (61,872) R Class (24,577) (2,066) From net realized gains: Investor Class (215,142) (1,476,282) Institutional Class (106,359) (698,729) Advisor Class (36,814) (242,944) R Class (3,687) (10,785) ------------ ----------- Decrease in net assets from distributions (3,302,654) (3,217,320) ------------ ----------- CAPITAL SHARE TRANSACTIONS Net increase (decrease) in net assets from capital share transactions 21,968,917 39,912,717 ------------ ----------- NET INCREASE (DECREASE) IN NET ASSETS 15,860,243 46,380,930 NET ASSETS Beginning of period 86,555,792 40,174,862 ------------ ----------- End of period $102,416,035 $86,555,792 ============ =========== Accumulated undistributed net investment income (loss) $(19,665) $485,931 ============ =========== See Notes to Financial Statements. - ------ 23 NOTES TO FINANCIAL STATEMENTS JANUARY 31, 2008 (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 issued 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. - ------ 24 REAL ESTATE seeks high total return through a combination of capital appreciation and current income. 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. 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 secondary 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 issued 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, very short-term debt securities issued by corporations, banks and governments. 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 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 as determined by the Board of Directors / Trustees or its designee, in accordance with procedures adopted by the Board of Directors, if such determination would materially impact an underlying fund's net asset value. Certain other circumstances may cause the underlying fund to use alternative procedures to 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 -- For financial reporting purposes, 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. At this time, management has not identified any uncertain - ------ 25 tax positions that would materially impact the financial statements. Accordingly, no provision has been made for federal or state income taxes. Interest and penalties associated with any federal or state income tax obligations, if any, are recorded as interest expense. 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 the 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 will pay American Century Investment Services, Inc. (ACIS) an annual distribution and service fee of 0.25%. The plans provide that the R Class will pay ACIS an annual distribution and service fee of 0.50%. The fees are computed and accrued daily based on each class's daily net assets and paid monthly in arrears. These fees are used to pay for distribution services and shareholder services. Fees incurred under the plans during the six months ended January 31, 2008, 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, 2008, were as follows: LIVESTRONG LIVESTRONG LIVESTRONG LIVESTRONG LIVESTRONG Income 2015 2025 2035 2045 Portfolio Portfolio Portfolio Portfolio Portfolio Purchases $15,820,537 $39,846,762 $60,014,812 $40,794,004 $35,026,521 Proceeds from sales $11,381,793 $26,708,873 $32,959,485 $16,935,328 $12,412,398 - ------ 26 4. CAPITAL SHARE TRANSACTIONS The corporation is authorized to issue 3,000,000,000 shares. Transactions in shares of the funds were as follows: Six months ended Year ended January 31, 2008 July 31, 2007 Shares Amount Shares Amount LIVESTRONG Income Portfolio INVESTOR CLASS Sold 896,548 $ 10,026,886 2,462,543 $ 26,953,295 Issued in reinvestment of distributions 112,360 1,249,159 129,852 1,409,610 Redeemed (597,876) (6,667,943) (1,222,262) (13,344,056) ----------- ------------ ----------- ------------ 411,032 4,608,102 1,370,133 15,018,849 ----------- ------------ ----------- ------------ INSTITUTIONAL CLASS Sold 281,798 3,157,312 429,024 4,691,259 Issued in reinvestment of distributions 22,293 247,994 22,300 242,560 Redeemed (199,730) (2,256,085) (123,853) (1,333,750) ----------- ------------ ----------- ------------ 104,361 1,149,221 327,471 3,600,069 ----------- ------------ ----------- ------------ ADVISOR CLASS Sold 259,821 2,900,124 526,267 5,759,864 Issued in reinvestment of distributions 15,654 174,299 20,308 220,892 Redeemed (403,255) (4,592,904) (94,859) (1,039,319) ----------- ------------ ----------- ------------ (127,780) (1,518,481) 451,716 4,941,437 ----------- ------------ ----------- ------------ R CLASS Sold 9,121 103,407 8,006 87,439 Issued in reinvestment of distributions 278 3,092 188 2,047 Redeemed (7,481) (83,963) (1,605) (17,399) ----------- ------------ ----------- ------------ 1,918 22,536 6,589 72,087 ----------- ------------ ----------- ------------ Net increase (decrease) 389,531 $ 4,261,378 2,155,909 $ 23,632,442 =========== ============ =========== ============ LIVESTRONG 2015 Portfolio INVESTOR CLASS Sold 2,200,486 $ 26,439,573 6,051,177 $ 70,849,640 Issued in reinvestment of distributions 471,644 5,574,831 430,453 4,928,684 Redeemed (1,365,553) (16,430,648) (2,813,749) (32,877,851) ----------- ------------ ----------- ------------ 1,306,577 15,583,756 3,667,881 42,900,473 ----------- ------------ ----------- ------------ INSTITUTIONAL CLASS Sold 323,682 3,841,846 573,261 6,672,802 Issued in reinvestment of distributions 49,378 583,652 48,962 561,103 Redeemed (288,042) (3,485,751) (242,895) (2,850,614) ----------- ------------ ----------- ------------ 85,018 939,747 379,328 4,383,291 ----------- ------------ ----------- ------------ ADVISOR CLASS Sold 483,085 5,783,211 949,444 11,088,609 Issued in reinvestment of distributions 46,319 547,493 59,162 677,399 Redeemed (709,261) (8,776,726) (251,099) (2,909,393) ----------- ------------ ----------- ------------ (179,857) (2,446,022) 757,507 8,856,615 ----------- ------------ ----------- ------------ R CLASS Sold 93,195 1,127,888 247,594 2,854,414 Issued in reinvestment of distributions 11,492 135,950 1,934 22,169 Redeemed (22,099) (264,613) (12,938) (150,411) ----------- ------------ ----------- ------------ 82,588 999,225 236,590 2,726,172 ----------- ------------ ----------- ------------ Net increase (decrease) 1,294,326 $ 15,076,706 5,041,306 $ 58,866,551 =========== ============ =========== ============ - ------ 27 Six months ended Year ended January 31, 2008 July 31, 2007 Shares Amount Shares Amount LIVESTRONG 2025 Portfolio INVESTOR CLASS Sold 3,112,858 $ 38,914,833 6,934,370 $ 84,059,562 Issued in reinvestment of distributions 554,253 6,811,768 730,389 8,611,314 Redeemed (1,386,776) (17,228,432) (3,262,907) (39,307,539) ----------- ------------ ----------- ------------ 2,280,335 28,498,169 4,401,852 53,363,337 ----------- ------------ ----------- ------------ INSTITUTIONAL CLASS Sold 447,853 5,576,390 1,131,075 13,609,369 Issued in reinvestment of distributions 125,482 1,542,174 190,800 2,249,531 Redeemed (647,859) (8,178,089) (473,019) (5,782,282) ----------- ------------ ----------- ------------ (74,524) (1,059,525) 848,856 10,076,618 ----------- ------------ ----------- ------------ ADVISOR CLASS Sold 660,202 8,117,088 948,240 11,464,534 Issued in reinvestment of distributions 42,508 522,421 65,995 778,738 Redeemed (459,756) (5,901,828) (275,276) (3,302,202) ----------- ------------ ----------- ------------ 242,954 2,737,681 738,959 8,941,070 ----------- ------------ ----------- ------------ R CLASS Sold 36,775 468,162 92,621 1,106,787 Issued in reinvestment of distributions 4,062 49,926 4,682 55,245 Redeemed (14,057) (171,913) (33,004) (402,437) ----------- ------------ ----------- ------------ 26,780 346,175 64,299 759,595 ----------- ------------ ----------- ------------ Net increase (decrease) 2,475,545 $ 30,522,500 6,053,966 $ 73,140,620 =========== ============ =========== ============ LIVESTRONG 2035 Portfolio INVESTOR CLASS Sold 2,018,358 $ 26,491,414 4,307,986 $ 55,031,500 Issued in reinvestment of distributions 265,643 3,469,300 306,847 3,801,836 Redeemed (807,384) (10,622,730) (2,053,913) (26,048,629) ----------- ------------ ----------- ------------ 1,476,617 19,337,984 2,560,920 32,784,707 ----------- ------------ ----------- ------------ INSTITUTIONAL CLASS Sold 210,211 2,743,974 983,032 12,436,788 Issued in reinvestment of distributions 61,409 802,004 67,322 834,796 Redeemed (193,652) (2,582,964) (284,507) (3,669,430) ----------- ------------ ----------- ------------ 77,968 963,014 765,847 9,602,154 ----------- ------------ ----------- ------------ ADVISOR CLASS Sold 569,356 7,270,659 709,861 8,993,384 Issued in reinvestment of distributions 30,822 402,842 36,830 456,695 Redeemed (359,833) (4,930,057) (165,199) (2,093,911) ----------- ------------ ----------- ------------ 240,345 2,743,444 581,492 7,356,168 ----------- ------------ ----------- ------------ R CLASS Sold 76,611 1,024,612 67,584 865,775 Issued in reinvestment of distributions 3,922 51,263 2,303 28,556 Redeemed (42,311) (531,027) (20,300) (260,735) ----------- ------------ ----------- ------------ 38,222 544,848 49,587 633,596 ----------- ------------ ----------- ------------ Net increase (decrease) 1,833,152 $ 23,589,290 3,957,846 $ 50,376,625 =========== ============ =========== ============ - ------ 28 Six months ended Year ended January 31, 2008 July 31, 2007 Shares Amount Shares Amount LIVESTRONG 2045 Portfolio INVESTOR CLASS Sold 1,630,364 $22,148,332 3,075,123 $39,756,020 Issued in reinvestment of distributions 145,129 1,938,929 152,330 1,922,401 Redeemed (548,412) (7,338,265) (1,504,146) (19,352,541) --------- ----------- ----------- ------------ 1,227,081 16,748,996 1,723,307 22,325,880 --------- ----------- ----------- ------------ INSTITUTIONAL CLASS Sold 506,265 6,843,009 1,159,259 14,839,594 Issued in reinvestment of distributions 76,344 1,020,715 75,565 953,638 Redeemed (325,221) (4,376,856) (230,636) (3,028,804) --------- ----------- ----------- ------------ 257,388 3,486,868 1,004,188 12,764,428 --------- ----------- ----------- ------------ ADVISOR CLASS Sold 337,777 4,468,577 410,315 5,320,358 Issued in reinvestment of distributions 23,025 307,616 24,153 304,816 Redeemed (244,060) (3,282,277) (104,700) (1,345,029) --------- ----------- ----------- ------------ 116,742 1,493,916 329,768 4,280,145 --------- ----------- ----------- ------------ R CLASS Sold 32,620 448,109 51,269 654,681 Issued in reinvestment of distributions 1,521 20,338 1,018 12,851 Redeemed (17,154) (229,310) (9,741) (125,268) --------- ----------- ----------- ------------ 16,987 239,137 42,546 542,264 --------- ----------- ----------- ------------ Net increase (decrease) 1,618,198 $21,968,917 3,099,809 $39,912,717 ========= =========== =========== ============ - ------ 29 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, 2008 follows: January 31, 2008 July 31, 2007 Realized Fund/Underlying Share Purchase Sales Gain Distributions Share Market Fund Balance Cost Cost (Loss) Received(1) Balance Value LIVESTRONG Income Portfolio NT Equity Growth Fund Institutional Class 682,400 $2,364,998 $ 947,855 $(25,913) $ 129,258 818,237 $8,386,928 NT Growth Fund Institutional Class 339,967 1,114,564 698,484 21,497 199,607 377,454 4,163,318 NT Large Company Value Fund Institutional Class 568,193 2,154,169 815,447 (35,315) 155,073 697,252 7,167,750 NT Mid Cap Value Fund Institutional Class 204,460 1,062,131 305,154 (21,386) 248,597 283,944 2,617,964 NT Small Company Fund Institutional Class 113,463 503,946 152,311 (10,385) 4,230 153,497 1,303,190 NT Vista Fund Institutional Class 128,983 534,723 366,697 46,526 3,599 142,630 1,617,424 Real Estate Fund Institutional Class 20,947 278,016 83,108 (11,779) 105,981 29,975 645,062 High-Yield Fund Institutional Class 369,407 522,942 343,603 (14,133) 84,448 401,039 2,434,307 Inflation-Adjusted Bond Fund Institutional Class 450,390 852,296 1,208,655 14,404 62,011 417,867 4,893,223 NT Diversified Bond Fund Institutional Class 1,647,816 3,134,759 3,552,870 21,550 505,249 1,606,638 16,966,104 Premium Money Market Fund Investor Class 6,151,530 1,367,508 1,166,393 -- 150,239 6,352,645 6,352,645 International Bond Fund Institutional Class 313,676 784,846 998,594 16,829 186,326 297,998 4,496,790 NT International Growth Fund Institutional Class 255,233 1,145,639 675,193 65,534 103,130 297,150 3,244,878 ---------- ----------- ----------- --------- ----------- --------- ----------- $15,820,537 $11,314,364 $ 67,429 $1,937,748 $64,289,583 =========== =========== ========= =========== =========== (1) Distributions received includes distributions from net investment income and from capital gains from the underlying funds. - ------ 30 January 31, 2008 July 31, 2007 Realized Fund/Underlying Share Purchase Sales Gain Distributions Share Market Fund Balance Cost Cost (Loss) Received(1) Balance Value LIVESTRONG 2015 Portfolio NT Equity Growth Fund Institutional Class 1,931,325 $5,306,301 $1,519,653 $(44,688) $ 364,444 2,291,215 $23,484,954 NT Growth Fund Institutional Class 1,270,356 3,154,384 2,251,288 107,611 719,848 1,352,984 14,923,414 NT Large Company Value Fund Institutional Class 1,710,273 5,226,728 1,390,672 (63,217) 464,753 2,076,573 21,347,170 NT Mid Cap Value Fund Institutional Class 789,561 2,967,038 666,342 (52,194) 911,014 1,033,664 9,530,382 NT Small Company Fund Institutional Class 333,840 1,263,615 256,716 (20,606) 12,427 447,048 3,795,438 NT Vista Fund Institutional Class 607,646 2,054,760 1,322,544 233,323 16,876 664,609 7,536,666 Real Estate Fund Institutional Class 86,244 876,526 190,492 (26,026) 419,210 117,847 2,536,067 High-Yield Fund Institutional Class 1,015,434 1,242,167 717,058 (35,941) 232,169 1,106,671 6,717,493 Inflation-Adjusted Bond Fund Institutional Class 1,247,402 1,768,707 2,802,170 34,369 172,130 1,153,149 13,503,375 NT Diversified Bond Fund Institutional Class 4,558,835 6,681,072 8,300,906 71,990 1,390,017 4,398,385 46,446,935 NT Emerging Markets Fund Institutional Class 221,121 1,374,959 690,101 272,430 455,604 268,451 3,242,888 NT International Growth Fund Institutional Class 976,930 3,559,189 2,321,731 343,690 377,553 1,081,858 11,813,889 Premium Money Market Fund Investor Class 10,863,093 2,928,566 1,764,389 -- 270,809 12,027,270 12,027,270 International Bond Fund Institutional Class 712,586 1,442,750 1,698,434 (4,364) 433,855 694,351 10,477,757 ---------- ----------- ----------- --------- ----------- ---------- ------------ $39,846,762 $25,892,496 $816,377 $6,240,709 $187,383,698 =========== =========== ========= =========== ============ (1) Distributions received includes distributions from net investment income and from capital gains from the underlying funds. - ------ 31 January 31, 2008 July 31, 2007 Realized Fund/Underlying Share Purchase Sales Gain Distributions Share Market Fund Balance Cost Cost (Loss) Received(1) Balance Value LIVESTRONG 2025 Portfolio NT Equity Growth Fund Institutional Class 2,597,176 $7,091,200 $1,498,618 $ (77,828) $ 494,629 3,118,769 $31,967,381 NT Growth Fund Institutional Class 2,433,050 5,564,214 3,745,231 152,594 1,381,376 2,589,919 28,566,807 NT Large Company Value Fund Institutional Class 2,504,489 7,565,926 1,487,685 (95,307) 684,269 3,077,764 31,639,414 NT Mid Cap Value Fund Institutional Class 1,061,868 4,685,460 656,780 (59,957) 1,296,519 1,477,540 13,622,919 NT Small Company Fund Institutional Class 864,264 2,296,218 505,709 (49,569) 30,315 1,065,081 9,042,538 NT Vista Fund Institutional Class 1,021,337 3,293,906 1,887,415 285,209 28,785 1,130,852 12,823,862 Real Estate Fund Institutional Class 157,448 1,633,952 251,977 (36,546) 780,018 219,843 4,731,021 High-Yield Fund Institutional Class 1,154,173 1,650,561 944,969 (52,351) 262,828 1,276,745 7,749,842 Inflation-Adjusted Bond Fund Institutional Class 1,384,426 2,568,868 3,151,116 20,524 195,254 1,330,429 15,579,324 NT Diversified Bond Fund Institutional Class 5,052,386 9,992,527 10,193,323 33,019 1,550,854 5,030,843 53,125,717 NT Emerging Markets Fund Institutional Class 509,743 3,088,241 1,409,540 520,739 1,065,666 626,603 7,569,364 NT International Growth Fund Institutional Class 1,819,108 6,355,558 3,505,258 432,151 721,537 2,062,247 22,519,737 Premium Money Market Fund Investor Class 12,175,305 2,523,071 2,101,566 -- 294,086 12,596,810 12,596,810 International Bond Fund Institutional Class 177,465 1,705,110 558,609 (10,989) 145,680 253,219 3,821,075 ---------- ----------- ----------- ---------- ------------- ---------- ------------ $60,014,812 $31,897,796 $1,061,689 $8,931,816 $255,355,811 =========== =========== ========== ============= ============ (1) Distributions received includes distributions from net investment income and from capital gains from the underlying funds. - ------ 32 January 31, 2008 July 31, 2007 Realized Fund/Underlying Share Purchase Sales Gain Distributions Share Market Fund Balance Cost Cost (Loss) Received(1) Balance Value LIVESTRONG 2035 Portfolio NT Equity Growth Fund Institutional Class 1,575,446 $ 5,198,488 $ 942,830 $(48,709) $ 306,856 1,973,112 $20,224,402 NT Growth Fund Institutional Class 1,569,905 4,548,194 1,698,117 962 954,365 1,820,892 20,084,439 NT Large Company Value Fund Institutional Class 1,550,388 5,586,965 965,722 (68,295) 431,955 1,986,553 20,421,765 NT Mid Cap Value Fund Institutional Class 766,999 3,401,086 453,524 (42,836) 922,953 1,072,972 9,892,802 NT Small Company Fund Institutional Class 486,423 2,068,202 263,344 (27,606) 18,601 687,588 5,837,622 NT Vista Fund Institutional Class 774,181 2,797,356 1,669,529 255,470 21,571 862,347 9,779,015 Real Estate Fund Institutional Class 107,785 1,283,569 164,619 (23,394) 547,527 157,741 3,394,586 High-Yield Fund Institutional Class 448,136 873,067 451,975 (24,420) 104,012 520,430 3,159,010 Inflation-Adjusted Bond Fund Institutional Class 546,547 1,360,896 1,393,555 15,511 77,932 542,304 6,350,380 NT Diversified Bond Fund Institutional Class 2,045,986 5,305,656 4,678,081 18,955 635,804 2,105,282 22,231,778 NT Emerging Markets Fund Institutional Class 436,927 2,810,505 1,441,150 522,892 887,633 531,169 6,416,522 NT International Growth Fund Institutional Class 1,094,619 4,405,916 1,814,627 82,210 457,866 1,331,558 14,540,613 Premium Money Market Fund Investor Class 1,319,087 1,154,104 337,515 -- 37,577 2,135,676 2,135,676 --------- ----------- ----------- --------- ------------- --------- ------------ $40,794,004 $16,274,588 $660,740 $5,404,652 $144,468,610 =========== =========== ========= ============= ============ (1) Distributions received includes distributions from net investment income and from capital gains from the underlying funds. - ------ 33 January 31, 2008 July 31, 2007 Realized Fund/Underlying Share Purchase Sales Gain Distributions Share Market Fund Balance Cost Cost (Loss) Received(1) Balance Value LIVESTRONG 2045 Portfolio NT Equity Growth Fund Institutional Class 1,146,959 $ 4,862,425 $1,084,071 $(102,295) $ 231,465 1,495,777 $15,331,714 NT Growth Fund Institutional Class 1,142,994 4,299,181 1,498,703 (62,365) 723,270 1,380,204 15,223,650 NT Large Company Value Fund Institutional Class 1,147,523 5,263,079 1,182,657 (124,091) 329,054 1,531,256 15,741,303 NT Mid Cap Value Fund Institutional Class 558,336 2,944,247 438,442 (53,212) 693,364 815,657 7,520,358 NT Small Company Fund Institutional Class 392,443 1,993,112 320,461 (46,935) 15,641 577,851 4,905,955 NT Vista Fund Institutional Class 563,617 2,501,949 1,346,025 86,680 16,388 655,362 7,431,805 Real Estate Fund Institutional Class 88,467 1,243,272 184,883 (35,094) 465,138 135,357 2,912,883 High-Yield Fund Institutional Class 226,553 581,328 289,003 (16,541) 53,591 276,253 1,676,856 Inflation- Adjusted Bond Fund Institutional Class 276,330 965,522 831,764 7,609 41,099 287,881 3,371,087 NT Diversified Bond Fund Institutional Class 1,019,975 3,839,432 2,796,782 5,984 326,766 1,120,935 11,837,073 NT Emerging Markets Fund Institutional Class 390,776 3,016,452 1,247,031 216,116 871,722 522,001 6,305,772 NT International Growth Fund Institutional Class 725,229 3,516,522 1,336,619 (19,899) 315,826 918,906 10,034,454 --------- ----------- ----------- ---------- ------------- --------- ------------ $35,026,521 $12,556,441 $(144,043) $4,083,324 $102,292,910 =========== =========== ========== ============= ============ (1) Distributions received includes distributions from net investment income and from capital gains from the underlying funds. 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, 2008, the following LIVESTRONG Portfolios owned 25% or more of the total outstanding shares of the underlying funds: LIVESTRONG LIVESTRONG LIVESTRONG LIVESTRONG 2015 2025 2035 2045 Portfolio Portfolio Portfolio Portfolio NT Diversified Bond Fund 31% 35% -- -- NT Emerging Markets Fund -- 32% 27% 27% NT Equity Growth Fund -- 32% -- -- NT Growth Fund -- 34% -- -- NT International Growth Fund -- 36% -- -- NT Large Company Value Fund -- 33% -- -- NT Mid Cap Value Fund -- 32% -- -- NT Small Company Fund -- 36% -- -- NT Vista Fund -- 33% 25% -- As of January 31, 2008, 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. - ------ 34 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, 2008, 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 $62,812,406 $182,304,257 $249,696,527 $142,601,282 $102,175,937 =========== ============ ============ ============ ============ Gross tax appreciation of investments $2,262,729 $ 7,621,003 $10,114,548 $ 5,461,995 $ 3,386,316 Gross tax depreciation of investments (785,552) (2,541,562) (4,455,264) (3,594,667) (3,269,343) ----------- ------------ ------------ ------------ ------------ Net tax appreciation (depreciation) of investments $1,477,177 $ 5,079,441 $5,659,284 $ 1,867,328 $ 116,973 =========== ============ ============ ============ ============ 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 The Financial Accounting Standards Board 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 that adopting FAS 157 will have on the financial statement disclosures. - ------ 35 FINANCIAL HIGHLIGHTS LIVESTRONG Income Portfolio Investor Class For a Share Outstanding Throughout the Years Ended July 31 (except as noted) 2008(1) 2007 2006 2005(2) PER-SHARE DATA Net Asset Value, Beginning of Period $11.06 $10.45 $10.51 $10.00 -------- -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(3) 0.26 0.33 0.37 0.29 Net Realized and Unrealized Gain (Loss) (0.05) 0.75 (0.07) 0.52 -------- -------- -------- -------- Total From Investment Operations 0.21 1.08 0.30 0.81 -------- -------- -------- -------- Distributions From Net Investment Income (0.29) (0.32) (0.35) (0.30) From Net Realized Gains (0.02) (0.15) (0.01) -- -------- -------- -------- -------- Total Distributions (0.31) (0.47) (0.36) (0.30) -------- -------- -------- -------- Net Asset Value, End of Period $10.96 $11.06 $10.45 $10.51 ======== ======== ======== ======== TOTAL RETURN(4) 1.86% 10.51% 2.99% 8.14% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets(5) 0.20%(6) 0.20% 0.20% 0.20%(6) Ratio of Net Investment Income (Loss) to Average Net Assets 4.64%(6) 3.03% 3.51% 3.16%(6) Portfolio Turnover Rate 18% 22% 120% 6% Net Assets, End of Period (in thousands) $48,243 $44,109 $27,374 $15,572 (1) Six months ended January 31, 2008 (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. - ------ 36 LIVESTRONG Income Portfolio Institutional Class For a Share Outstanding Throughout the Years Ended July 31 (except as noted) 2008(1) 2007 2006 2005(2) PER-SHARE DATA Net Asset Value, Beginning of Period $11.06 $10.45 $10.51 $10.00 -------- -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(3) 0.27 0.35 0.37 0.34 Net Realized and Unrealized Gain (Loss) (0.05) 0.75 (0.05) 0.48 -------- -------- -------- -------- Total From Investment Operations 0.22 1.10 0.32 0.82 -------- -------- -------- -------- Distributions From Net Investment Income (0.30) (0.34) (0.37) (0.31) From Net Realized Gains (0.02) (0.15) (0.01) -- -------- -------- -------- -------- Total Distributions (0.32) (0.49) (0.38) (0.31) -------- -------- -------- -------- Net Asset Value, End of Period $10.96 $11.06 $10.45 $10.51 ======== ======== ======== ======== TOTAL RETURN(4) 1.96% 10.73% 3.20% 8.31% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets(5) 0.00%(6) 0.00% 0.00% 0.00%(6) Ratio of Net Investment Income (Loss) to Average Net Assets 4.84%(6) 3.23% 3.71% 3.36%(6) Portfolio Turnover Rate 18% 22% 120% 6% Net Assets, End of Period (in thousands) $9,360 $8,285 $4,409 $3,169 (1) Six months ended January 31, 2008 (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 Advisor Class For a Share Outstanding Throughout the Years Ended July 31 (except as noted) 2008(1) 2007 2006 2005(2) PER-SHARE DATA Net Asset Value, Beginning of Period $11.05 $10.45 $10.51 $10.00 -------- -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(3) 0.23 0.31 0.33 0.18 Net Realized and Unrealized Gain (Loss) (0.03) 0.74 (0.05) 0.61 -------- -------- -------- -------- Total From Investment Operations 0.20 1.05 0.28 0.79 -------- -------- -------- -------- Distributions From Net Investment Income (0.27) (0.30) (0.33) (0.28) From Net Realized Gains (0.02) (0.15) (0.01) -- -------- -------- -------- -------- Total Distributions (0.29) (0.45) (0.34) (0.28) -------- -------- -------- -------- Net Asset Value, End of Period $10.96 $11.05 $10.45 $10.51 ======== ======== ======== ======== TOTAL RETURN(4) 1.83% 10.13% 2.83% 7.82% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets(5) 0.45%(6) 0.45% 0.45% 0.45%(6) Ratio of Net Investment Income (Loss) to Average Net Assets 4.39%(6) 2.78% 3.26% 2.91%(6) Portfolio Turnover Rate 18% 22% 120% 6% Net Assets, End of Period (in thousands) $6,660 $8,129 $2,966 $940 (1) Six months ended January 31, 2008 (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 R Class For a Share Outstanding Throughout the Years Ended July 31 (except as noted) 2008(1) 2007 2006 2005(2) PER-SHARE DATA Net Asset Value, Beginning of Period $11.05 $10.44 $10.50 $10.00 -------- -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(3) 0.23 0.27 0.26 0.29 Net Realized and Unrealized Gain (Loss) (0.05) 0.76 (0.01) 0.46 -------- -------- -------- -------- Total From Investment Operations 0.18 1.03 0.25 0.75 -------- -------- -------- -------- Distributions From Net Investment Income (0.26) (0.27) (0.30) (0.25) From Net Realized Gains (0.02) (0.15) (0.01) -- -------- -------- -------- -------- Total Distributions (0.28) (0.42) (0.31) (0.25) -------- -------- -------- -------- Net Asset Value, End of Period $10.95 $11.05 $10.44 $10.50 ======== ======== ======== ======== TOTAL RETURN(4) 1.61% 9.97% 2.48% 7.61% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets(5) 0.70%(6) 0.70% 0.70% 0.70%(6) Ratio of Net Investment Income (Loss) to Average Net Assets 4.14%(6) 2.53% 3.01% 2.66%(6) Portfolio Turnover Rate 18% 22% 120% 6% Net Assets, End of Period (in thousands) $132 $112 $37 $9 (1) Six months ended January 31, 2008 (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 2015 Portfolio Investor Class For a Share Outstanding Throughout the Years Ended July 31 (except as noted) 2008(1) 2007 2006 2005(2) PER-SHARE DATA Net Asset Value, Beginning of Period $11.91 $11.09 $10.93 $10.00 -------- -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(3) 0.29 0.32 0.37 0.25 Net Realized and Unrealized Gain (Loss) (0.11) 1.04 0.11 0.86 -------- -------- -------- -------- Total From Investment Operations 0.18 1.36 0.48 1.11 -------- -------- -------- -------- Distributions From Net Investment Income (0.41) (0.27) (0.31) (0.18) From Net Realized Gains (0.05) (0.27) (0.01) -- -------- -------- -------- -------- Total Distributions (0.46) (0.54) (0.32) (0.18) -------- -------- -------- -------- Net Asset Value, End of Period $11.63 $11.91 $11.09 $10.93 ======== ======== ======== ======== TOTAL RETURN(4) 1.42% 12.46% 4.46% 11.17% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets(5) 0.20%(6) 0.20% 0.20% 0.20%(6) Ratio of Net Investment Income (Loss) to Average Net Assets 4.80%(6) 2.74% 3.27% 2.61%(6) Portfolio Turnover Rate 14% 18% 123% 2% Net Assets, End of Period (in thousands) $151,656 $139,725 $89,431 $40,717 (1) Six months ended January 31, 2008 (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 Institutional Class For a Share Outstanding Throughout the Years Ended July 31 (except as noted) 2008(1) 2007 2006 2005(2) PER-SHARE DATA Net Asset Value, Beginning of Period $11.93 $11.10 $10.94 $10.00 -------- -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(3) 0.30 0.34 0.33 0.29 Net Realized and Unrealized Gain (Loss) (0.12) 1.05 0.17 0.84 -------- -------- -------- -------- Total From Investment Operations 0.18 1.39 0.50 1.13 -------- -------- -------- -------- Distributions From Net Investment Income (0.43) (0.29) (0.33) (0.19) From Net Realized Gains (0.05) (0.27) (0.01) -- -------- -------- -------- -------- Total Distributions (0.48) (0.56) (0.34) (0.19) -------- -------- -------- -------- Net Asset Value, End of Period $11.63 $11.93 $11.10 $10.94 ======== ======== ======== ======== TOTAL RETURN(4) 1.45% 12.77% 4.67% 11.32% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets(5) 0.00%(6) 0.00% 0.00% 0.00%(6) Ratio of Net Investment Income (Loss) to Average Net Assets 5.00%(6) 2.94% 3.47% 2.81%(6) Portfolio Turnover Rate 14% 18% 123% 2% Net Assets, End of Period (in thousands) $16,341 $15,736 $10,439 $3,011 (1) Six months ended January 31, 2008 (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 Advisor Class For a Share Outstanding Throughout the Years Ended July 31 (except as noted) 2008(1) 2007 2006 2005(2) PER-SHARE DATA Net Asset Value, Beginning of Period $11.89 $11.07 $10.91 $10.00 -------- -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(3) 0.26 0.30 0.31 0.17 Net Realized and Unrealized Gain (Loss) (0.09) 1.03 0.14 0.91 -------- -------- -------- -------- Total From Investment Operations 0.17 1.33 0.45 1.08 -------- -------- -------- -------- Distributions From Net Investment Income (0.38) (0.24) (0.28) (0.17) From Net Realized Gains (0.05) (0.27) (0.01) -- -------- -------- -------- -------- Total Distributions (0.43) (0.51) (0.29) (0.17) -------- -------- -------- -------- Net Asset Value, End of Period $11.63 $11.89 $11.07 $10.91 ======== ======== ======== ======== TOTAL RETURN(4) 1.34% 12.20% 4.22% 10.88% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets(5) 0.45%(6) 0.45% 0.45% 0.45%(6) Ratio of Net Investment Income (Loss) to Average Net Assets 4.55%(6) 2.49% 3.02% 2.36%(6) Portfolio Turnover Rate 14% 18% 123% 2% Net Assets, End of Period (in thousands) $16,752 $19,270 $9,556 $323 (1) Six months ended January 31, 2008 (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 R Class For a Share Outstanding Throughout the Years Ended July 31 (except as noted) 2008(1) 2007 2006 2005(2) PER-SHARE DATA Net Asset Value, Beginning of Period $11.88 $11.06 $10.90 $10.00 -------- -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(3) 0.28 0.25 0.19 0.24 Net Realized and Unrealized Gain (Loss) (0.13) 1.05 0.23 0.82 -------- -------- -------- -------- Total From Investment Operations 0.15 1.30 0.42 1.06 -------- -------- -------- -------- Distributions From Net Investment Income (0.35) (0.21) (0.25) (0.16) From Net Realized Gains (0.05) (0.27) (0.01) -- -------- -------- -------- -------- Total Distributions (0.40) (0.48) (0.26) (0.16) -------- -------- -------- -------- Net Asset Value, End of Period $11.63 $11.88 $11.06 $10.90 ======== ======== ======== ======== TOTAL RETURN(4) 1.16% 11.92% 4.05% 10.59% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets(5) 0.70%(6) 0.70% 0.70% 0.70%(6) Ratio of Net Investment Income (Loss) to Average Net Assets 4.30%(6) 2.24% 2.77% 2.11%(6) Portfolio Turnover Rate 14% 18% 123% 2% Net Assets, End of Period (in thousands) $4,081 $3,187 $351 $14 (1) Six months ended January 31, 2008 (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 2025 Portfolio Investor Class For a Share Outstanding Throughout the Years Ended July 31 (except as noted) 2008(1) 2007 2006 2005(2) PER-SHARE DATA Net Asset Value, Beginning of Period $12.35 $11.49 $11.21 $10.00 -------- -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(3) 0.30 0.28 0.34 0.18 Net Realized and Unrealized Gain (Loss) (0.27) 1.34 0.27 1.17 -------- -------- -------- -------- Total From Investment Operations 0.03 1.62 0.61 1.35 -------- -------- -------- -------- Distributions From Net Investment Income (0.40) (0.24) (0.31) (0.14) From Net Realized Gains (0.05) (0.52) (0.02) -- -------- -------- -------- -------- Total Distributions (0.45) (0.76) (0.33) (0.14) -------- -------- -------- -------- Net Asset Value, End of Period $11.93 $12.35 $11.49 $11.21 ======== ======== ======== ======== TOTAL RETURN(4) 0.12% 14.45% 5.48% 13.57% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets(5) 0.20%(6) 0.20% 0.20% 0.20%(6) Ratio of Net Investment Income (Loss) to Average Net Assets 4.70%(6) 2.34% 2.98% 2.08%(6) Portfolio Turnover Rate 13% 18% 120% 2% Net Assets, End of Period (in thousands) $196,114 $174,984 $112,202 $53,285 (1) Six months ended January 31, 2008 (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 Institutional Class For a Share Outstanding Throughout the Years Ended July 31 (except as noted) 2008(1) 2007 2006 2005(2) PER-SHARE DATA Net Asset Value, Beginning of Period $12.37 $11.51 $11.23 $10.00 -------- -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(3) 0.30 0.31 0.37 0.27 Net Realized and Unrealized Gain (Loss) (0.27) 1.34 0.26 1.11 -------- -------- -------- -------- Total From Investment Operations 0.03 1.65 0.63 1.38 -------- -------- -------- -------- Distributions From Net Investment Income (0.42) (0.27) (0.33) (0.15) From Net Realized Gains (0.05) (0.52) (0.02) -- -------- -------- -------- -------- Total Distributions (0.47) (0.79) (0.35) (0.15) -------- -------- -------- -------- Net Asset Value, End of Period $11.93 $12.37 $11.51 $11.23 ======== ======== ======== ======== TOTAL RETURN(4) 0.16% 14.67% 5.77% 13.74% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets(5) 0.00%(6) 0.00% 0.00% 0.00%(6) Ratio of Net Investment Income (Loss) to Average Net Assets 4.90%(6) 2.54% 3.18% 2.28%(6) Portfolio Turnover Rate 13% 18% 120% 2% Net Assets, End of Period (in thousands) $41,783 $44,250 $31,399 $21,458 (1) Six months ended January 31, 2008 (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 Advisor Class For a Share Outstanding Throughout the Years Ended July 31 (except as noted) 2008(1) 2007 2006 2005(2) PER-SHARE DATA Net Asset Value, Beginning of Period $12.34 $11.48 $11.19 $10.00 -------- -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(3) 0.27 0.26 0.29 0.12 Net Realized and Unrealized Gain (Loss) (0.26) 1.33 0.30 1.20 -------- -------- -------- -------- Total From Investment Operations 0.01 1.59 0.59 1.32 -------- -------- -------- -------- Distributions From Net Investment Income (0.37) (0.21) (0.28) (0.13) From Net Realized Gains (0.05) (0.52) (0.02) -- -------- -------- -------- -------- Total Distributions (0.42) (0.73) (0.30) (0.13) -------- -------- -------- -------- Net Asset Value, End of Period $11.93 $12.34 $11.48 $11.19 ======== ======== ======== ======== TOTAL RETURN(4) (0.05)% 14.17% 5.30% 13.28% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets(5) 0.45%(6) 0.45% 0.45% 0.45%(6) Ratio of Net Investment Income (Loss) to Average Net Assets 4.45%(6) 2.09% 2.73% 1.83%(6) Portfolio Turnover Rate 13% 18% 120% 2% Net Assets, End of Period (in thousands) $19,403 $17,076 $7,404 $388 (1) Six months ended January 31, 2008 (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 R Class For a Share Outstanding Throughout the Years Ended July 31 (except as noted) 2008(1) 2007 2006 2005(2) PER-SHARE DATA Net Asset Value, Beginning of Period $12.32 $11.46 $11.18 $10.00 -------- -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(3) 0.29 0.22 0.19 0.15 Net Realized and Unrealized Gain (Loss) (0.31) 1.34 0.36 1.15 -------- -------- -------- -------- Total From Investment Operations (0.02) 1.56 0.55 1.30 -------- -------- -------- -------- Distributions From Net Investment Income (0.33) (0.18) (0.25) (0.12) From Net Realized Gains (0.05) (0.52) (0.02) -- -------- -------- -------- -------- Total Distributions (0.38) (0.70) (0.27) (0.12) -------- -------- -------- -------- Net Asset Value, End of Period $11.92 $12.32 $11.46 $11.18 ======== ======== ======== ======== TOTAL RETURN(4) (0.22)% 13.90% 4.95% 13.10% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets(5) 0.70%(6) 0.70% 0.70% 0.70%(6) Ratio of Net Investment Income (Loss) to Average Net Assets 4.20%(6) 1.84% 2.48% 1.58%(6) Portfolio Turnover Rate 13% 18% 120% 2% Net Assets, End of Period (in thousands) $1,653 $1,378 $545 $65 (1) Six months ended January 31, 2008 (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 2035 Portfolio Investor Class For a Share Outstanding Throughout the Years Ended July 31 (except as noted) 2008(1) 2007 2006 2005(2) PER-SHARE DATA Net Asset Value, Beginning of Period $13.09 $11.85 $11.43 $10.00 -------- -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(3) 0.33 0.24 0.31 0.17 Net Realized and Unrealized Gain (Loss) (0.48) 1.71 0.42 1.39 -------- -------- -------- -------- Total From Investment Operations (0.15) 1.95 0.73 1.56 -------- -------- -------- -------- Distributions From Net Investment Income (0.40) (0.19) (0.30) (0.13) From Net Realized Gains (0.05) (0.52) (0.01) -- -------- -------- -------- -------- Total Distributions (0.45) (0.71) (0.31) (0.13) -------- -------- -------- -------- Net Asset Value, End of Period $12.49 $13.09 $11.85 $11.43 ======== ======== ======== ======== TOTAL RETURN(4) (1.25)% 16.86% 6.45% 15.71% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets(5) 0.20%(6) 0.20% 0.20% 0.20%(6) Ratio of Net Investment Income (Loss) to Average Net Assets 4.82%(6) 1.87% 2.61% 1.62%(6) Portfolio Turnover Rate 12% 23% 141% 3% Net Assets, End of Period (in thousands) $105,448 $91,220 $52,206 $21,537 (1) Six months ended January 31, 2008 (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 Institutional Class For a Share Outstanding Throughout the Years Ended July 31 (except as noted) 2008(1) 2007 2006 2005(2) PER-SHARE DATA Net Asset Value, Beginning of Period $13.11 $11.87 $11.45 $10.00 -------- -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(3) 0.32 0.26 0.30 0.16 Net Realized and Unrealized Gain (Loss) (0.45) 1.72 0.45 1.43 -------- -------- -------- -------- Total From Investment Operations (0.13) 1.98 0.75 1.59 -------- -------- -------- -------- Distributions From Net Investment Income (0.43) (0.22) (0.32) (0.14) From Net Realized Gains (0.05) (0.52) (0.01) -- -------- -------- -------- -------- Total Distributions (0.48) (0.74) (0.33) (0.14) -------- -------- -------- -------- Net Asset Value, End of Period $12.50 $13.11 $11.87 $11.45 ======== ======== ======== ======== TOTAL RETURN(4) (1.12)% 17.07% 6.66% 15.98% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets(5) 0.00%(6) 0.00% 0.00% 0.00%(6) Ratio of Net Investment Income (Loss) to Average Net Assets 5.02%(6) 2.07% 2.81% 1.82%(6) Portfolio Turnover Rate 12% 23% 141% 3% Net Assets, End of Period (in thousands) $22,235 $22,314 $11,104 $3,435 (1) Six months ended January 31, 2008 (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 Advisor Class For a Share Outstanding Throughout the Years Ended July 31 (except as noted) 2008(1) 2007 2006 2005(2) PER-SHARE DATA Net Asset Value, Beginning of Period $13.08 $11.83 $11.42 $10.00 -------- -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(3) 0.29 0.21 0.26 0.11 Net Realized and Unrealized Gain (Loss) (0.46) 1.72 0.43 1.44 -------- -------- -------- -------- Total From Investment Operations (0.17) 1.93 0.69 1.55 -------- -------- -------- -------- Distributions From Net Investment Income (0.37) (0.16) (0.27) (0.13) From Net Realized Gains (0.05) (0.52) (0.01) -- -------- -------- -------- -------- Total Distributions (0.42) (0.68) (0.28) (0.13) -------- -------- -------- -------- Net Asset Value, End of Period $12.49 $13.08 $11.83 $11.42 ======== ======== ======== ======== TOTAL RETURN(4) (1.43)% 16.67% 6.10% 15.53% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets(5) 0.45%(6) 0.45% 0.45% 0.45%(6) Ratio of Net Investment Income (Loss) to Average Net Assets 4.57%(6) 1.62% 2.36% 1.37%(6) Portfolio Turnover Rate 12% 23% 141% 3% Net Assets, End of Period (in thousands) $15,779 $13,378 $5,224 $113 (1) Six months ended January 31, 2008 (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 R Class For a Share Outstanding Throughout the Years Ended July 31 (except as noted) 2008(1) 2007 2006 2005(2) PER-SHARE DATA Net Asset Value, Beginning of Period $13.06 $11.82 $11.40 $10.00 -------- -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(3) 0.38 0.18 0.16 0.22 Net Realized and Unrealized Gain (Loss) (0.56) 1.71 0.51 1.30 -------- -------- -------- -------- Total From Investment Operations (0.18) 1.89 0.67 1.52 -------- -------- -------- -------- Distributions From Net Investment Income (0.34) (0.13) (0.24) (0.12) From Net Realized Gains (0.05) (0.52) (0.01) -- -------- -------- -------- -------- Total Distributions (0.39) (0.65) (0.25) (0.12) -------- -------- -------- -------- Net Asset Value, End of Period $12.49 $13.06 $11.82 $11.40 ======== ======== ======== ======== TOTAL RETURN(4) (1.53)% 16.30% 5.93% 15.24% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets(5) 0.70%(6) 0.70% 0.70% 0.70%(6) Ratio of Net Investment Income (Loss) to Average Net Assets 4.32%(6) 1.37% 2.11% 1.12%(6) Portfolio Turnover Rate 12% 23% 141% 3% Net Assets, End of Period (in thousands) $1,410 $975 $296 $6 (1) Six months ended January 31, 2008 (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 2045 Portfolio Investor Class For a Share Outstanding Throughout the Years Ended July 31 (except as noted) 2008(1) 2007 2006 2005(2) PER-SHARE DATA Net Asset Value, Beginning of Period $13.40 $11.96 $11.54 $10.00 -------- -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(3) 0.36 0.22 0.31 0.12 Net Realized and Unrealized Gain (Loss) (0.62) 1.92 0.46 1.56 -------- -------- -------- -------- Total From Investment Operations (0.26) 2.14 0.77 1.68 -------- -------- -------- -------- Distributions From Net Investment Income (0.41) (0.17) (0.32) (0.14) From Net Realized Gains (0.05) (0.53) (0.03) -- -------- -------- -------- -------- Total Distributions (0.46) (0.70) (0.35) (0.14) -------- -------- -------- -------- Net Asset Value, End of Period $12.68 $13.40 $11.96 $11.54 ======== ======== ======== ======== TOTAL RETURN(4) (2.13)% 18.23% 6.76% 16.86% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets(5) 0.20%(6) 0.20% 0.20% 0.20%(6) Ratio of Net Investment Income (Loss) to Average Net Assets 5.11%(6) 1.62% 2.62% 1.83%(6) Portfolio Turnover Rate 13% 25% 137% 17% Net Assets, End of Period (in thousands) $61,201 $48,229 $22,437 $7,465 (1) Six months ended January 31, 2008 (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 Institutional Class For a Share Outstanding Throughout the Years Ended July 31 (except as noted) 2008(1) 2007 2006 2005(2) PER-SHARE DATA Net Asset Value, Beginning of Period $13.42 $11.98 $11.56 $10.00 -------- -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(3) 0.34 0.23 0.35 0.25 Net Realized and Unrealized Gain (Loss) (0.58) 1.93 0.44 1.45 -------- -------- -------- -------- Total From Investment Operations (0.24) 2.16 0.79 1.70 -------- -------- -------- -------- Distributions From Net Investment Income (0.44) (0.19) (0.34) (0.14) From Net Realized Gains (0.05) (0.53) (0.03) -- -------- -------- -------- -------- Total Distributions (0.49) (0.72) (0.37) (0.14) -------- -------- -------- -------- Net Asset Value, End of Period $12.69 $13.42 $11.98 $11.56 ======== ======== ======== ======== TOTAL RETURN(4) (2.01)% 18.44% 6.96% 17.11% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets(5) 0.00%(6) 0.00% 0.00% 0.00%(6) Ratio of Net Investment Income (Loss) to Average Net Assets 5.31%(6) 1.82% 2.82% 2.03%(6) Portfolio Turnover Rate 13% 25% 137% 17% Net Assets, End of Period (in thousands) $30,191 $28,483 $13,397 $7,181 (1) Six months ended January 31, 2008 (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 Advisor Class For a Share Outstanding Throughout the Years Ended July 31 (except as noted) 2008(1) 2007 2006 2005(2) PER-SHARE DATA Net Asset Value, Beginning of Period $13.38 $11.94 $11.53 $10.00 -------- -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(3) 0.32 0.18 0.20 0.07 Net Realized and Unrealized Gain (Loss) (0.60) 1.92 0.53 1.59 -------- -------- -------- -------- Total From Investment Operations (0.28) 2.10 0.73 1.66 -------- -------- -------- -------- Distributions From Net Investment Income (0.37) (0.13) (0.29) (0.13) From Net Realized Gains (0.05) (0.53) (0.03) -- -------- -------- -------- -------- Total Distributions (0.42) (0.66) (0.32) (0.13) -------- -------- -------- -------- Net Asset Value, End of Period $12.68 $13.38 $11.94 $11.53 ======== ======== ======== ======== TOTAL RETURN(4) (2.23)% 17.96% 6.51% 16.57% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets(5) 0.45%(6) 0.45% 0.45% 0.45%(6) Ratio of Net Investment Income (Loss) to Average Net Assets 4.86%(6) 1.37% 2.37% 1.58%(6) Portfolio Turnover Rate 13% 25% 137% 17% Net Assets, End of Period (in thousands) $10,094 $9,091 $4,177 $380 (1) Six months ended January 31, 2008 (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 R Class For a Share Outstanding Throughout the Years Ended July 31 (except as noted) 2008(1) 2007 2006 2005(2) PER-SHARE DATA Net Asset Value, Beginning of Period $13.36 $11.93 $11.51 $10.00 -------- -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(3) 0.35 0.12 0.12 0.18 Net Realized and Unrealized Gain (Loss) (0.64) 1.94 0.59 1.45 -------- -------- -------- -------- Total From Investment Operations (0.29) 2.06 0.71 1.63 -------- -------- -------- -------- Distributions From Net Investment Income (0.34) (0.10) (0.26) (0.12) From Net Realized Gains (0.05) (0.53) (0.03) -- -------- -------- -------- -------- Total Distributions (0.39) (0.63) (0.29) (0.12) -------- -------- -------- -------- Net Asset Value, End of Period $12.68 $13.36 $11.93 $11.51 ======== ======== ======== ======== TOTAL RETURN(4) (2.34)% 17.58% 6.24% 16.38% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets(5) 0.70%(6) 0.70% 0.70% 0.70%(6) Ratio of Net Investment Income (Loss) to Average Net Assets 4.61%(6) 1.12% 2.12% 1.33%(6) Portfolio Turnover Rate 13% 25% 137% 17% Net Assets, End of Period (in thousands) $930 $753 $165 $6 (1) Six months ended January 31, 2008 (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 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 Advisor Class and R Class shares are 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; and/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. The funds' prospectus contains additional information regarding eligibility for Investor Class shares. 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. - ------ 56 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. - ------ 57 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 CITIGROUP NON-US 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 gross 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. - ------ 58 NOTES - ------ 59 NOTES - ------ 60 [back cover] [american century investments logo and text logo ®] 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 ©2008 American Century Proprietary Holdings, Inc. All rights reserved. 0803 SH-SAN-58748N
[front cover] SEMIANNUAL REPORT JANUARY 31, 2008 [american century investments logo and text logo ®] AMERICAN CENTURY INVESTMENTS 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 OUR MESSAGE TO YOU [photo of Jonathan Thomas] JONATHAN THOMAS President and CEO American Century Companies, Inc. To help you monitor your investment, my colleagues and I take pride in providing you with the semiannual report for the American Century® One Choice Portfolios for the six months ended January 31, 2008. I am honored to be addressing you in the "Our Message" space long devoted to company founder Jim Stowers, Jr. and his son Jim Stowers III. Jim Stowers III stepped down from the American Century Companies, Inc. (ACC) board of directors in July 2007, his final move in a well-planned career transition to pursue new ventures outside the company. This reflected his family's support of our company's direction and its leadership team. The Stowers family remains an integral part of our heritage, leadership, and financial structure. In fact, Jim Stowers, Jr. continues as co-chair of the ACC board with Richard Brown, who has been on the board since 1998. American Century Investments®, our clients, and our employees have been my top priority since I became company president and CEO in March, 2007. We have also added the executive talents of overall chief investment officer (CIO) Enrique Chang, international equity CIO Mark On, U.S. growth equity CIO Steve Lurito, and chief operating officer Barry Fink. This skilled group, combined with our existing senior management team, has already had a positive impact on the development and management of the products and services we take pride in delivering to you. We believe the ultimate measure of our performance is our clients' success. Therefore, our focus continues to be on building a long-term relationship with you and on delivering superior investment performance across our product line. /s/Jonathan Thomas [photo of James E. Stowers, Jr.] JAMES E. STOWERS, JR. Founder and Co-Chairman of the Board American Century Companies, Inc. [photo of Richard Brown] RICHARD BROWN Co-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 Shareholder Fee Examples. . . . . . . . . . . . . . . . . . . . . . . 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. . . . . . . . . . . . . . . . . . . . . . . . . 29 OTHER INFORMATION Additional Information. . . . . . . . . . . . . . . . . . . . . . . . 34 Index Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . 35 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, 2008 Average Annual Returns Since Inception 6 months(1) 1 year Inception Date ONE CHOICE PORTFOLIO: VERY CONSERVATIVE -- INVESTOR CLASS 3.78% 5.57% 5.92% 9/30/04 ONE CHOICE PORTFOLIO: CONSERVATIVE - -- INVESTOR CLASS 2.08% 4.61% 7.48% 9/30/04 ONE CHOICE PORTFOLIO: MODERATE -- INVESTOR CLASS 0.07% 3.94% 9.80% 9/30/04 ONE CHOICE PORTFOLIO: AGGRESSIVE - -- INVESTOR CLASS -1.16% 4.41% 11.51% 9/30/04 ONE CHOICE PORTFOLIO: VERY AGGRESSIVE -- INVESTOR CLASS -3.07% 3.46% 12.72% 9/30/04 RUSSELL 3000 INDEX(2) -4.54% -3.08% 9.08% -- CITIGROUP US BROAD INVESTMENT-GRADE BOND INDEX 7.38% 9.32% 5.12% -- (1) Total returns for periods less than one year are not annualized. (2) Data provided by Lipper Inc. -- A Reuters Company. © 2008 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. The Russell 3000 Index represents approximately 98% of investable U.S. equity market and provides a broad measure of equity performance. The Citigroup US Broad Investment-Grade Bond Index represents 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. 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, 2008.) 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. International investing involves special risks, such as political instability and currency fluctuations. Investing in emerging markets may accentuate these risks. 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 funds' total returns include operating expenses that reduce returns, while the total returns of the indices do not. - ------ 2 One Choice Portfolios Growth of $10,000 Over Life of One Choice Portfolio: Very Conservative $10,000 investment made September 30, 2004
![](https://capedge.com/proxy/N-CSRS/0001293210-08-000013/ocpvcgrowth0803.gif)
*From 9/30/04, the Investor Class's inception date. Not annualized. Growth of $10,000 Over Life of One Choice Portfolio: Conservative $10,000 investment made September 30, 2004
![](https://capedge.com/proxy/N-CSRS/0001293210-08-000013/ocpcgrowth0803.gif)
*From 9/30/04, the Investor Class's inception date. Not annualized. Data presented reflect past performance. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance shown. Investment return and principal value will fluctuate, and redemption value may be more or less than original cost. To obtain performance data current to the most recent month end, please call 1-800-345-2021 or visit americancentury.com. The performance of the portfolios is dependent on the performance of their underlying American Century funds, and will assume the risks associated with these funds. The risks will vary according to each portfolio's asset allocation, and the risk level assigned to each portfolio is intended to reflect the relative short-term price volatility among the funds in each. International investing involves special risks, such as political instability and currency fluctuations. Investing in emerging markets may accentuate these risks. 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 funds' total returns include operating expenses that reduce returns, while the total returns of the indices do not. One Choice Portfolios - ------ 3 Growth of $10,000 Over Life of One Choice Portfolio: Moderate $10,000 investment made September 30, 2004
![](https://capedge.com/proxy/N-CSRS/0001293210-08-000013/ocpmgrowth0803.gif)
*From 9/30/04, the Investor Class's inception date. Not annualized. Growth of $10,000 Over Life of One Choice Portfolio: Aggressive $10,000 investment made September 30, 2004
![](https://capedge.com/proxy/N-CSRS/0001293210-08-000013/ocpagrowth0803.gif)
*From 9/30/04, the Investor Class's inception date. Not annualized. Data presented reflect past performance. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance shown. Investment return and principal value will fluctuate, and redemption value may be more or less than original cost. To obtain performance data current to the most recent month end, please call 1-800-345-2021 or visit americancentury.com. The performance of the portfolios is dependent on the performance of their underlying American Century funds, and will assume the risks associated with these funds. The risks will vary according to each portfolio's asset allocation, and the risk level assigned to each portfolio is intended to reflect the relative short-term price volatility among the funds in each. International investing involves special risks, such as political instability and currency fluctuations. Investing in emerging markets may accentuate these risks. 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 funds' 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
![](https://capedge.com/proxy/N-CSRS/0001293210-08-000013/ocpvagrowth0803.gif)
*From 9/30/04, the Investor Class's inception date. Not annualized. One-Year Returns Over Life of Class Periods ended January 31 2005* 2006 2007 2008 One Choice Portfolio: Very Conservative -- Investor Class 3.35% 4.03% 6.75% 5.57% One Choice Portfolio: Conservative -- Investor Class 4.78% 7.01% 8.46% 4.61% One Choice Portfolio: Moderate -- Investor Class 6.65% 11.62% 10.41% 3.94% One Choice Portfolio: Aggressive -- Investor Class 7.45% 15.18% 11.32% 4.41% One Choice Portfolio: Very Aggressive -- Investor Class 8.65% 17.80% 12.62% 3.46% Russell 3000 Index 7.22% 12.67% 14.11% -3.08% Citigroup US Broad Investment-Grade Bond Index 1.65% 1.91% 4.32% 9.32% *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. International investing involves special risks, such as political instability and currency fluctuations. Investing in emerging markets may accentuate these risks. 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 funds' 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 The five One Choice Portfolios produced mixed results for the six months ended January 31, 2008. Returns ranged from 3.78%(1) for One Choice Portfolio: Very Conservative to -3.07%(1) for One Choice Portfolio: Very Aggressive (see pages 2-5 for more detailed performance information). The Portfolios' performance reflected a decline in stock markets worldwide and robust returns for bonds. 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 A sharp increase in volatility led to a decline in the broad U.S. stock indexes during the six-month period. The driving factor was a meltdown in the subprime mortgage industry and a subsequent credit crunch. Tighter lending standards caused the credit markets to seize up and crimped funding for leveraged buy-outs, removing what had been an important leg of support for the stock market. In addition, banks and financial firms reported unexpectedly large subprime-related losses, corporate profit growth weakened, and rising energy and commodity prices sparked inflation worries despite evidence of slowing economic activity. In response, the Federal Reserve (the Fed) lowered its federal funds rate target for the first time since June 2003, cutting rates three times in the last four months of 2007 and twice more in January 2008. Although the Fed's actions helped alleviate some of the credit and economic concerns, many market participants grew concerned that the Fed had fallen behind the curve and acted too late to prevent a recession. As a result, with the exception of an uneven rally in September and October, the major stock indexes generally fell throughout the six-month period. Large-cap stocks held up the best (see the accompanying table), while small-cap issues suffered the largest declines. Growth stocks comfortably outpaced value shares across all market capitalizations. Market Index Total Returns For the six months ended January 31, 2008(1) U.S. STOCKS Russell 1000 (Large-Cap)(2) -4.27% Russell Midcap(2) -6.70% Russell 2000 (Small-Cap)(2) -7.51% INTERNATIONAL STOCKS MSCI EAFE (Europe, Australasia, Far East) Index -7.52% MSCI EM (Emerging Markets) Index -1.33% U.S. FIXED INCOME Lehman Brothers U.S. Aggregate(2) 6.82% 10-Year U.S. Treasury Note 11.36% 90-Day U.S. Treasury Bill 2.65% INTERNATIONAL BONDS Citigroup Non-US World Government Bond 13.06% (1) Total returns for periods less than one year are not annualized. (2) Data provided by Lipper Inc. -- A Reuters Company. © 2008 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. - ------ 6 One Choice Portfolios International stocks generally produced larger losses than the domestic market during the six-month period despite a weaker U.S. dollar. Market volatility in the U.S. spread to other markets as subprime-related losses among financial firms worldwide led to concerns about a peak in global economic growth. Emerging markets, which often underperform in a volatile environment, held up well during the period, declining modestly overall. Among developed markets, the Pacific Rim countries (excluding Japan) generated the best results, while the Japanese stock market declined notably amid sluggish domestic consumption. BOND MARKET REVIEW In contrast to the global equity markets, U.S. bonds advanced during the six-month period. The fallout from the subprime debacle led many investors to shun riskier investments and seek out the relative safety of the bond market. The Fed's short-term interest rate cuts, which brought the federal funds rate down from 5.25% to 3.00%, also contributed favorably to bond performance. Although bond yields declined across the board, shorter-term yields fell the most -- the two-year Treasury note yield declined from 4.53% to 2.10%, reflecting the change in Fed rate policy and expectations of further rate cuts going forward. Longer-term bond yields fell to a lesser degree -- the 10-year Treasury bond yield slid from 4.74% to 3.60%. Consequently, the gap between short- and long-term bond yields widened substantially, creating a steeper yield curve. Underlying Fund Allocations as a % of net assets as of January 31, 2008(1) Very Very Conservative Conservative Moderate Aggressive Aggressive EQUITY Equity Growth Fund 4.5% 8.5% 15.5% 14.0% 17.2% Growth Fund 3.0% 5.2% 8.5% 14.9% 18.1% Large Company Value Fund 8.2% 11.2% 9.6% 8.6% 10.6% Real Estate Fund 2.0% 2.0% 2.0% 2.0% 2.0% Small Company Fund 1.0% 1.5% 2.0% 2.3% 2.5% Value Fund 4.3% 6.1% 4.6% 3.8% 5.1% Vista Fund 1.5% 4.0% 7.0% 13.5% 16.5% Emerging Markets Fund -- -- 4.0% 6.4% 7.4% International Growth Fund -- 6.1% 10.1% 12.6% 15.6% TOTAL EQUITY 24.5% 44.6% 63.3% 78.1% 95.0% FIXED INCOME Diversified Bond Fund 40.8% 37.6% 25.7% 15.8% 3.0% High-Yield Fund -- -- 2.0% 4.0% -- International Bond Fund 10.0% 8.0% 3.0% -- -- TOTAL FIXED INCOME 50.8% 45.6% 30.7% 19.8% 3.0% PRIME MONEY MARKET FUND 24.5% 9.6% 5.9% 2.0% 1.9% OTHER ASSETS AND LIABILITIES 0.2% 0.2% 0.1% 0.1% 0.1% (1) Underlying fund investments represent Investor Class. - ------ 7 One Choice Portfolios Treasury and government agency bonds delivered the best returns, benefiting the most from the flight to quality. Higher-quality mortgage-backed securities also held up well. Corporate bonds lagged as credit concerns intensified in the wake of the subprime meltdown; most notably, high-yield corporate bonds were the weakest performers in the bond market. Foreign bonds produced double-digit gains, reflecting the favorable bond environment globally and a broad decline in the U.S. dollar versus other major currencies. PORTFOLIO PERFORMANCE 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 page 7 for the specific underlying fund allocations for each One Choice Portfolio.) Just one equity fund within the One Choice Portfolios posted a positive return for the six-month period -- Growth, a large-cap growth fund. Among the remaining stock funds, Real Estate produced the smallest decline thanks to strong gains in the first half of the period. The Portfolios' two international equity funds -- Emerging Markets and International Growth -- also held up well, as did mid-cap growth component Vista. The biggest decliner among the Portfolios' equity holdings was Small Company, reflecting the broad weakness in small-cap stocks. The best-performing fund in the Portfolios was International Bond, which enjoyed a double-digit return that was in line with the performance of foreign fixed-income markets. Diversified Bond also advanced solidly, while High-Yield and Prime Money Market produced modestly positive returns. PORTFOLIO STRATEGY Each Portfolio has a "neutral" asset mix that remains constant, but we typically make modest adjustments to each Portfolio's actual asset mix to add value and improve the Portfolios' ability to meet their investment objectives. Throughout the six-month period, we maintained a defensive position for the Portfolios, with a modest overweight position in bonds and a corresponding underweight in stocks relative to the neutral asset mix. This positioning added value during the period as bonds advanced and stocks declined. The Portfolios remained overweight in large-cap and growth-oriented stocks, both of which outperformed during the six-month period. In particular, we held an overweight position in Growth, the best-performing equity holding in the portfolio, and an underweight position in Value, one of the weaker performers. Strong stock selection among our mid-cap and international equity holdings also contributed positively to performance as these segments of the Portfolios outperformed their respective market indexes by a wide margin. For most of the six-month period, our modest overweight position in fixed-income securities was entirely in international bonds, which paid off as foreign bonds posted the best returns in the global financial markets. Toward the end of the period, however, we removed our overweight in international bonds (eliminating them completely from the One Choice Portfolio: Aggressive and One Choice Portfolio: Very Aggressive) and shifted to an overweight in high-quality domestic bonds. Within Diversified Bond, our main domestic bond component, defensive strategies contributed favorably to results. In particular, an underweight position in corporate bonds, - ------ 8 One Choice Portfolios limited exposure to financials within the corporate sector, and a maturity structure that benefited from a steeper yield curve all boosted performance. In addition, we were also underweight High-Yield in the Portfolios that have exposure to this fund. OUTLOOK U.S. economic growth is likely to be subpar in 2008. The severe housing downturn and subprime-related credit crunch have impaired lending activity, reduced liquidity in the credit markets, and increased the likelihood of a recession. The Fed has already taken significant steps to boost liquidity and economic activity, but the central bank's future efforts may be limited by the inflationary threats of chronically high energy prices and a weak U.S. dollar. Given this environment, as well as the substantial volatility in both the stock and bond markets, we expect to maintain our defensive tactical positioning going forward, with a modest underweight in stocks and a slight overweight in bonds. - ------ 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, 2007 to January 31, 2008. 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 8/1/07 - Expense 8/1/07 - Expense 8/1/07 1/31/08 1/31/08 Ratio(1) 1/31/08 Ratio(2) One Choice Portfolio: Very Conservative Actual $1,000 $1,037.80 $0.00 0.00%(3) $3.53 0.69% Hypothetical $1,000 $1,025.14 $0.00 0.00%(3) $3.51 0.69% One Choice Portfolio: Conservative Actual $1,000 $1,020.80 $0.00 0.00%(3) $3.91 0.77% Hypothetical $1,000 $1,025.14 $0.00 0.00%(3) $3.91 0.77% One Choice Portfolio: Moderate Actual $1,000 $1,000.70 $0.00 0.00%(3) $4.33 0.86% Hypothetical $1,000 $1,025.14 $0.00 0.00%(3) $4.37 0.86% One Choice Portfolio: Aggressive Actual $1,000 $988.40 $0.00 0.00%(3) $4.70 0.94% Hypothetical $1,000 $1,025.14 $0.00 0.00%(3) $4.77 0.94% One Choice Portfolio: Very Aggressive Actual $1,000 $969.30 $0.00 0.00%(3) $4.95 1.00% Hypothetical $1,000 $1,025.14 $0.00 0.00%(3) $5.08 1.00% (1) Expenses are equal to the fund'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 366, 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 fund's annualized expense ratio. (2) Effective expenses reflect the sum of expenses borne directly by the fund 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 fund'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, 2008 (unaudited) Shares Value One Choice Portfolio: Very Conservative Mutual Funds(1) -- 99.8% DOMESTIC FIXED INCOME FUNDS -- 40.8% 2,437,138 Diversified Bond Fund Investor Class $25,468,092 ----------- DOMESTIC EQUITY FUNDS -- 24.5% 126,053 Equity Growth Fund Investor Class 2,831,150 77,940 Growth Fund Investor Class 1,874,457 740,032 Large Company Value Fund Investor Class 5,084,020 58,402 Real Estate Fund Investor Class 1,255,059 82,827 Small Company Fund Investor Class 635,283 452,436 Value Fund Investor Class 2,705,567 50,738 Vista Fund Investor Class 946,264 ----------- 15,331,800 ----------- MONEY MARKET FUNDS -- 24.5% 15,329,453 Prime Money Market Fund Investor Class 15,329,453 ----------- INTERNATIONAL FIXED INCOME FUNDS -- 10.0% 415,333 International Bond Fund Investor Class 6,267,375 ----------- TOTAL INVESTMENT SECURITIES -- 99.8% (Cost $61,743,016) 62,396,720 ----------- OTHER ASSETS AND LIABILITIES -- 0.2% 130,511 ----------- TOTAL NET ASSETS -- 100.0% $62,527,231 =========== 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. Shares Value One Choice Portfolio: Conservative Mutual Funds(1) -- 99.8% DOMESTIC EQUITY FUNDS -- 38.5% 1,019,935 Equity Growth Fund Investor Class $ 22,907,740 584,252 Growth Fund Investor Class 14,051,261 4,358,795 Large Company Value Fund Investor Class 29,944,921 250,182 Real Estate Fund Investor Class 5,376,411 532,277 Small Company Fund Investor Class 4,082,565 2,736,278 Value Fund Investor Class 16,362,942 579,647 Vista Fund Investor Class 10,810,417 ------------ 103,536,257 ------------ DOMESTIC FIXED INCOME FUNDS -- 37.6% 9,677,451 Diversified Bond Fund Investor Class 101,129,363 ------------ MONEY MARKET FUNDS -- 9.6% 25,869,932 Prime Money Market Fund Investor Class 25,869,932 ------------ INTERNATIONAL FIXED INCOME FUNDS -- 8.0% 1,423,356 International Bond Fund Investor Class 21,478,442 ------------ INTERNATIONAL EQUITY FUNDS -- 6.1% 1,300,607 International Growth Fund Investor Class 16,270,594 ------------ TOTAL INVESTMENT SECURITIES -- 99.8% (Cost $265,435,594) 268,284,588 ------------ OTHER ASSETS AND LIABILITIES -- 0.2% 458,201 ------------ TOTAL NET ASSETS -- 100.0% $268,742,789 ============ 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. - ------ 12 One Choice Portfolios Shares Value One Choice Portfolio: Moderate Mutual Funds(1) -- 99.9% DOMESTIC EQUITY FUNDS -- 49.2% 4,438,412 Equity Growth Fund Investor Class $ 99,686,734 2,257,444 Growth Fund Investor Class 54,291,528 8,983,317 Large Company Value Fund Investor Class 61,715,388 597,188 Real Estate Fund Investor Class 12,833,570 1,694,058 Small Company Fund Investor Class 12,993,425 4,898,182 Value Fund Investor Class 29,291,128 2,420,772 Vista Fund Investor Class 45,147,398 ------------ 315,959,171 ------------ DOMESTIC FIXED INCOME FUNDS -- 27.7% 15,807,792 Diversified Bond Fund Investor Class 165,191,426 2,104,429 High-Yield Fund Investor Class 12,773,884 ------------ 177,965,310 ------------ INTERNATIONAL EQUITY FUNDS -- 14.1% 2,566,675 Emerging Markets Fund Investor Class 25,435,749 5,174,603 International Growth Fund Investor Class 64,734,284 ------------ 90,170,033 ------------ MONEY MARKET FUNDS -- 5.9% 38,002,514 Prime Money Market Fund Investor Class 38,002,514 ------------ INTERNATIONAL FIXED INCOME FUNDS -- 3.0% 1,274,114 International Bond Fund Investor Class 19,226,380 ------------ TOTAL INVESTMENT SECURITIES -- 99.9% (Cost $635,620,612) 641,323,408 ------------ OTHER ASSETS AND LIABILITIES -- 0.1% 853,933 ------------ TOTAL NET ASSETS -- 100.0% $642,177,341 ============ 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. Shares Value One Choice Portfolio: Aggressive Mutual Funds(1) -- 99.9% DOMESTIC EQUITY FUNDS -- 59.1% 2,623,464 Equity Growth Fund Investor Class $ 58,923,001 2,607,180 Growth Fund Investor Class 62,702,679 5,259,701 Large Company Value Fund Investor Class 36,134,146 390,846 Real Estate Fund Investor Class 8,399,281 1,247,389 Small Company Fund Investor Class 9,567,474 2,671,383 Value Fund Investor Class 15,974,870 3,055,296 Vista Fund Investor Class 56,981,270 ------------ 248,682,721 ------------ DOMESTIC FIXED INCOME FUNDS -- 19.8% 6,368,651 Diversified Bond Fund Investor Class 66,552,403 2,755,500 High-Yield Fund Investor Class 16,725,885 ------------ 83,278,288 ------------ INTERNATIONAL EQUITY FUNDS -- 19.0% 2,730,402 Emerging Markets Fund Investor Class 27,058,284 4,234,145 International Growth Fund Investor Class 52,969,154 ------------ 80,027,438 ------------ MONEY MARKET FUNDS -- 2.0% 8,292,476 Prime Money Market Fund Investor Class 8,292,476 ------------ TOTAL INVESTMENT SECURITIES -- 99.9% (Cost $409,573,993) 420,280,923 ------------ OTHER ASSETS AND LIABILITIES -- 0.1% 416,050 ------------ TOTAL NET ASSETS -- 100.0% $420,696,973 ============ 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. - ------ 13 One Choice Portfolios Shares Value One Choice Portfolio: Very Aggressive Mutual Funds(1) -- 99.9% DOMESTIC EQUITY FUNDS -- 72.0% 1,395,508 Equity Growth Fund Investor Class $ 31,343,110 1,369,560 Growth Fund Investor Class 32,937,918 2,804,728 Large Company Value Fund Investor Class 19,268,481 168,739 Real Estate Fund Investor Class 3,626,201 598,416 Small Company Fund Investor Class 4,589,851 1,537,708 Value Fund Investor Class 9,195,494 1,612,151 Vista Fund Investor Class 30,066,616 ------------ 131,027,671 ------------ INTERNATIONAL EQUITY FUNDS -- 23.0% 1,360,537 Emerging Markets Fund Investor Class 13,482,922 2,267,165 International Growth Fund Investor Class 28,362,234 ------------ 41,845,156 ------------ DOMESTIC FIXED INCOME FUNDS -- 3.0% 515,711 Diversified Bond Fund Investor Class 5,389,180 ------------ MONEY MARKET FUNDS -- 1.9% 3,581,094 Prime Money Market Fund Investor Class 3,581,094 ------------ TOTAL INVESTMENT SECURITIES -- 99.9% (Cost $178,571,520) 181,843,101 ------------ OTHER ASSETS AND LIABILITIES -- 0.1% 97,204 ------------ TOTAL NET ASSETS -- 100.0% $181,940,305 ============ 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. - ------ 14 STATEMENT OF ASSETS AND LIABILITIES JANUARY 31, 2008 (UNAUDITED) Very Conservative Conservative Moderate ASSETS Investment securities in affiliates, at value (cost of $61,743,016, $265,435,594 and $635,620,612, respectively) $62,396,720 $268,284,588 $641,323,408 Cash 68 90 76 Receivable for capital shares sold -- 2,000 21,867 Distributions receivable from affiliates 130,443 456,111 831,990 ------------ ------------ ------------ NET ASSETS $62,527,231 $268,742,789 $642,177,341 ============ ============ ============ INVESTOR CLASS CAPITAL SHARES, $0.01 PAR VALUE Outstanding 5,914,476 23,932,565 52,896,902 ============ ============ ============ NET ASSET VALUE PER SHARE $10.57 $11.23 $12.14 ============ ============ ============ NET ASSETS CONSIST OF: Capital (par value and paid-in surplus) $61,657,975 $261,303,276 $619,950,135 Accumulated undistributed net investment income (loss) (63,330) 131,967 (129,926) Undistributed net realized gain on investment transactions 278,882 4,458,552 16,654,336 Net unrealized appreciation on investments 653,704 2,848,994 5,702,796 ------------ ------------ ------------ $62,527,231 $268,742,789 $642,177,341 ============ ============ ============ See Notes to Financial Statements. - ------ 15 JANUARY 31, 2008 (UNAUDITED) Aggressive Very Aggressive ASSETS Investment securities in affiliates, at value (cost of $409,573,993 and $178,571,520, respectively) $420,280,923 $181,843,101 Cash 87 68 Receivable for capital shares sold 31,300 63,269 Distributions receivable from affiliates 384,663 33,867 ------------ ------------- NET ASSETS $420,696,973 $181,940,305 ============ ============= INVESTOR CLASS CAPITAL SHARES, $0.01 PAR VALUE Outstanding 32,383,266 13,369,840 ============ ============= NET ASSET VALUE PER SHARE $12.99 $13.61 ============ ============= NET ASSETS CONSIST OF: Capital (par value and paid-in surplus) $396,906,960 $172,147,958 Accumulated net investment loss (366,485) (287,562) Undistributed net realized gain on investment transactions 13,449,568 6,808,328 Net unrealized appreciation on investments 10,706,930 3,271,581 ------------ ------------- $420,696,973 $181,940,305 ============ ============= See Notes to Financial Statements. - ------ 16 STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED JANUARY 31, 2008 (UNAUDITED) Very Conservative Conservative Moderate INVESTMENT INCOME (LOSS) INCOME: Income distributions from underlying funds - affiliates $1,284,977 $6,322,584 $14,641,090 ------------- ------------ ------------ EXPENSES: Directors' fees and expenses 451 2,425 6,244 ------------- ------------ ------------ NET INVESTMENT INCOME (LOSS) 1,284,526 6,320,159 14,634,846 ------------- ------------ ------------ NET REALIZED AND UNREALIZED GAIN (LOSS) ON AFFILIATES NET REALIZED GAIN (LOSS) ON: Sale of investments in underlying funds (28,067) 28,687 215,892 Capital gain distributions received from underlying funds 539,663 5,142,471 18,843,723 ------------- ------------ ------------ 511,596 5,171,158 19,059,615 ------------- ------------ ------------ CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS IN UNDERLYING FUNDS (69,947) (6,904,148) (35,409,087) ------------- ------------ ------------ NET REALIZED AND UNREALIZED GAIN (LOSS) ON AFFILIATES 441,649 (1,732,990) (16,349,472) ------------- ------------ ------------ NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $1,726,175 $4,587,169 $(1,714,626) ============ ============ ============ See Notes to Financial Statements. - ------ 17 FOR THE SIX MONTHS ENDED JANUARY 31, 2008 (UNAUDITED) Aggressive Very Aggressive INVESTMENT INCOME (LOSS) INCOME: Income distributions from underlying funds - affiliates $9,176,963 $3,792,100 ------------ ------------- EXPENSES: Directors' fees and expenses 4,257 1,820 ------------ ------------- NET INVESTMENT INCOME (LOSS) 9,172,706 3,790,280 ------------ ------------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON AFFILIATES NET REALIZED GAIN (LOSS) ON: Sale of investments in underlying funds (37,519) (447,536) Capital gain distributions received from underlying funds 15,171,641 7,980,319 ------------ ------------- 15,134,122 7,532,783 ------------ ------------- CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS IN UNDERLYING FUNDS (30,929,877) (17,995,147) ------------ ------------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON AFFILIATES (15,795,755) (10,462,364) ------------ ------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $(6,623,049) $(6,672,084) ============ ============= See Notes to Financial Statements. - ------ 18 STATEMENT OF CHANGES IN NET ASSETS SIX MONTHS ENDED JANUARY 31, 2008 (UNAUDITED) AND YEAR ENDED JULY 31, 2007 Very Conservative Conservative Increase (Decrease) in Net Assets 2008 2007 2008 2007 OPERATIONS Net investment income (loss) $ 1,284,526 $ 1,237,837 $ 6,320,159 $ 5,551,796 Net realized gain (loss) 511,596 93,636 5,171,158 1,264,794 Change in net unrealized appreciation (depreciation) (69,947) 599,099 (6,904,148) 8,245,024 ----------- ------------ ------------ ------------ Net increase (decrease) in net assets resulting from operations 1,726,175 1,930,572 4,587,169 15,061,614 ----------- ------------ ------------ ------------ DISTRIBUTIONS TO SHAREHOLDERS From net investment income (1,494,558) (1,153,304) (6,762,594) (5,231,274) From net realized gains (190,807) (69,135) (1,699,054) (467,169) ----------- ------------ ------------ ------------ Decrease in net assets from distributions (1,685,365) (1,222,439) (8,461,648) (5,698,443) ----------- ------------ ------------ ------------ CAPITAL SHARE TRANSACTIONS Proceeds from shares sold 26,930,110 29,687,745 70,016,640 138,628,869 Proceeds from reinvestment of distributions 1,625,838 1,174,189 8,278,879 5,503,221 Payments for shares redeemed (7,052,342) (10,439,388) (33,507,808) (36,050,020) ----------- ------------ ------------ ------------ Net increase (decrease) in net assets from capital share transactions 21,503,606 20,422,546 44,787,711 108,082,070 ----------- ------------ ------------ ------------ NET INCREASE (DECREASE) IN NET ASSETS 21,544,416 21,130,679 40,913,232 117,445,241 NET ASSETS Beginning of period 40,982,815 19,852,136 227,829,557 110,384,316 ----------- ------------ ------------ ------------ End of period $62,527,231 $40,982,815 $268,742,789 $227,829,557 =========== ============ ============ ============ Accumulated undistributed net investment income (loss) $(63,330) $146,702 $131,967 $574,402 =========== ============ ============ ============ TRANSACTIONS IN SHARES OF THE FUND Sold 2,537,593 2,818,872 6,105,307 12,377,036 Issued in reinvestment of distributions 154,522 112,054 727,697 491,552 Redeemed (660,784) (988,497) (2,924,384) (3,195,492) ----------- ------------ ------------ ------------ Net increase (decrease) in shares of the fund 2,031,331 1,942,429 3,908,620 9,673,096 =========== ============ ============ ============ See Notes to Financial Statements. - ------ 19 SIX MONTHS ENDED JANUARY 31, 2008 (UNAUDITED) AND YEAR ENDED JULY 31, 2007 Moderate Aggressive Increase (Decrease) in Net Assets 2008 2007 2008 2007 OPERATIONS Net investment income (loss) $ 14,634,846 $ 12,589,264 $ 9,172,706 $ 7,522,680 Net realized gain (loss) 19,059,615 5,252,428 15,134,122 4,035,206 Change in net unrealized appreciation (depreciation) (35,409,087) 34,772,872 (30,929,877) 36,566,103 ------------ ------------ ------------ ------------ Net increase (decrease) in net assets resulting from operations (1,714,626) 52,614,564 (6,623,049) 48,123,989 ------------ ------------ ------------ ------------ DISTRIBUTIONS TO SHAREHOLDERS From net investment income (15,841,235) (11,946,777) (12,099,333) (6,046,156) From net realized gains (7,139,715) (1,486,925) (5,382,222) (1,127,285) ------------ ------------ ------------ ------------ Decrease in net assets from distributions (22,980,950) (13,433,702) (17,481,555) (7,173,441) ------------ ------------ ------------ ------------ CAPITAL SHARE TRANSACTIONS Proceeds from shares sold 130,596,248 350,149,847 76,050,508 206,152,389 Proceeds from reinvestment of distributions 22,271,712 12,997,995 17,179,188 7,051,677 Payments for shares redeemed (72,371,595) (69,562,395) (45,450,000) (48,482,618) ------------ ------------ ------------ ------------ Net increase (decrease) in net assets from capital share transactions 80,496,365 293,585,447 47,779,696 164,721,448 ------------ ------------ ------------ ------------ NET INCREASE (DECREASE) IN NET ASSETS 55,800,789 332,766,309 23,675,092 205,671,996 NET ASSETS Beginning of period 586,376,552 253,610,243 397,021,881 191,349,885 ------------ ------------ ------------ ------------ End of period $642,177,341 $586,376,552 $420,696,973 $397,021,881 ============ ============ ============ ============ Accumulated undistributed net investment income (loss) $(129,926) $1,076,463 $(366,485) $2,560,142 ============ ============ ============ ============ TRANSACTIONS IN SHARES OF THE FUND Sold 10,260,355 28,824,439 5,454,112 15,967,469 Issued in reinvestment of distributions 1,765,710 1,067,879 1,248,488 552,206 Redeemed (5,727,369) (5,659,266) (3,311,175) (3,696,019) ------------ ------------ ------------ ------------ Net increase (decrease) in shares of the fund 6,298,696 24,233,052 3,391,425 12,823,656 ============ ============ ============ ============ See Notes to Financial Statements. - ------ 20 SIX MONTHS ENDED JANUARY 31, 2008 (UNAUDITED) AND YEAR ENDED JULY 31, 2007 Very Aggressive Increase (Decrease) in Net Assets 2008 2007 OPERATIONS Net investment income (loss) $ 3,790,280 $ 2,336,864 Net realized gain (loss) 7,532,783 1,943,059 Change in net unrealized appreciation (depreciation) (17,995,147) 18,579,766 ------------ ------------ Net increase (decrease) in net assets resulting from operations (6,672,084) 22,859,689 ------------ ------------ DISTRIBUTIONS TO SHAREHOLDERS From net investment income (4,620,480) (1,998,188) From net realized gains (2,398,616) (491,017) ------------ ------------ Decrease in net assets from distributions (7,019,096) (2,489,205) ------------ ------------ CAPITAL SHARE TRANSACTIONS Proceeds from shares sold 46,404,561 94,590,521 Proceeds from reinvestment of distributions 6,951,211 2,423,425 Payments for shares redeemed (26,568,126) (25,802,240) ------------ ------------ Net increase (decrease) in net assets from capital share transactions 26,787,646 71,211,706 ------------ ------------ NET INCREASE (DECREASE) IN NET ASSETS 13,096,466 91,582,190 NET ASSETS Beginning of period 168,843,839 77,261,649 ------------ ------------ End of period $181,940,305 $168,843,839 ============ ============ Accumulated undistributed net investment income (loss) $(287,562) $542,638 ============ ============ TRANSACTIONS IN SHARES OF THE FUND Sold 3,128,551 6,950,789 Issued in reinvestment of distributions 472,871 180,583 Redeemed (1,815,021) (1,866,727) ------------ ------------ Net increase (decrease) in shares of the fund 1,786,401 5,264,645 ============ ============ See Notes to Financial Statements. - ------ 21 NOTES TO FINANCIAL STATEMENTS JANUARY 31, 2008 (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 high total investment return through a combination of capital appreciation and current income. 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. 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 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. - ------ 22 HIGH-YIELD seeks high current income by investing in a diversified portfolio of high-yield corporate bonds and other debt securities. As a secondary 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, non-dollar-denominated government and corporate debt securities issued 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, very short-term debt securities issued by corporations, banks and governments. 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 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 as determined by the Board of Directors/Trustees or its designee, in accordance with procedures adopted by the Board of Directors, if such determination would materially impact an underlying fund's net asset value. Certain other circumstances may cause the underlying fund to use alternative procedures to 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 -- For financial reporting purposes, 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. At this time, management has not identified any uncertain tax positions that would materially impact the financial statements. Accordingly, no provision has been made for federal or state income taxes. Interest and penalties associated with any federal or state income tax obligations, if any, are recorded as interest expense. 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 the 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., 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, 2008, were as follows: Very Very Conservative Conservative Moderate Aggressive Aggressive Purchases $26,213,931 $73,828,409 $169,748,483 $105,516,654 $50,844,421 Proceeds from sales $4,603,390 $26,107,814 $78,876,121 $50,955,500 $19,368,279 - ------ 24 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. A summary of transactions for each underlying fund during the six months ended January 31, 2008 follows: January 31, 2008 July 31, Realized Fund/Underlying 2007 Share Purchase Gain Distributions Share Fund Balance Cost Sales Cost (Loss) Received(1) Balance Market Value One Choice Portfolio: Very Conservative Diversified Bond Fund Investor Class 1,672,271 $9,550,550 $1,714,904 $(16,650) $436,668 2,437,138 $25,468,092 Equity Growth Fund Investor Class 68,751 1,535,518 170,317 3,905 170,009 126,053 2,831,150 Growth Fund Investor Class 51,420 849,271 191,667 10,538 1,997 77,940 1,874,457 Large Company Value Fund Investor Class 412,204 2,531,538 214,738 (3,900) 154,562 740,032 5,084,020 Real Estate Fund Investor Class 28,932 771,526 123,125 (17,635) 168,762 58,402 1,255,059 Small Company Fund Investor Class 38,129 406,241 31,811 (1,541) 55,312 82,827 635,283 Value Fund Investor Class 217,015 1,606,781 88,427 (2,705) 292,440 452,436 2,705,567 Vista Fund Investor Class 29,213 550,570 127,832 6,071 69,206 50,738 946,264 Prime Money Market Fund Investor Class 10,152,022 5,994,516 817,085 -- 272,795 15,329,453 15,329,453 International Bond Fund Investor Class 329,535 2,417,420 1,151,551 (6,150) 202,889 415,333 6,267,375 ---------- ----------- ---------- --------- ---------- ---------- ------------ $26,213,931 $4,631,457 $(28,067) $1,824,640 $62,396,720 =========== ========== ========= ========== ============ One Choice Portfolio: Conservative Equity Growth Fund Investor Class 725,342 $7,925,572 $798,358 $(17,537) $1,645,974 1,019,935 $22,907,740 Growth Fund Investor Class 502,880 3,451,282 1,446,120 38,086 17,895 584,252 14,051,261 Large Company Value Fund Investor Class 3,167,995 8,967,011 377,283 (31,084) 1,088,015 4,358,795 29,944,921 Real Estate Fund Investor Class 161,780 2,426,663 498,473 (115,810) 861,060 250,182 5,376,411 Small Company Fund Investor Class 319,768 1,913,359 80,198 (11,071) 425,139 532,277 4,082,565 Value Fund Investor Class 1,713,124 6,973,560 219,047 (30,189) 2,111,204 2,736,278 16,362,942 Vista Fund Investor Class 438,398 4,192,787 1,443,542 64,783 945,352 579,647 10,810,417 Diversified Bond Fund Investor Class 8,653,564 21,592,091 11,302,299 (52,804) 2,098,153 9,677,451 101,129,363 Prime Money Market Fund Investor Class 22,372,011 5,885,117 2,387,196 -- 561,404 25,869,932 25,869,932 International Bond Fund Investor Class 1,507,491 4,707,643 5,910,455 8,150 834,287 1,423,356 21,478,442 International Growth Fund Investor Class 988,506 5,793,324 1,616,156 176,163 876,572 1,300,607 16,270,594 ---------- ----------- ---------- --------- ---------- ---------- ------------ $73,828,409 $26,079,127 $28,687 $11,465,055 $268,284,588 =========== ========== ========= ========== ============ (1) Distributions received includes distributions from net investment income and from capital gains from the underlying funds. - ------ 25 January 31, 2008 July 31, Fund/Underlying 2007 Share Realized Distributions Share Fund Balance Purchase Cost Sales Cost Gain (Loss) Received(1) Balance Market Value One Choice Portfolio: Moderate Equity Growth Fund Investor Class 3,413,200 $27,892,077 $2,866,116 $(328,733) $7,519,958 4,438,412 $99,686,734 Growth Fund Investor Class 2,102,736 10,633,372 6,836,667 15,002 72,522 2,257,444 54,291,528 Large Company Value Fund Investor Class 7,069,404 15,920,798 1,986,951 (217,074) 2,358,260 8,983,317 61,715,388 Real Estate Fund Investor Class 417,609 5,281,202 1,540,973 (466,010) 2,159,572 597,188 12,833,570 Small Company Fund Investor Class 1,100,773 5,565,026 405,381 (87,050) 1,419,061 1,694,058 12,993,425 Value Fund Investor Class 3,318,289 11,365,992 877,402 (161,273) 3,961,293 4,898,182 29,291,128 Vista Fund Investor Class 1,982,955 14,721,472 6,320,485 127,023 4,141,208 2,420,772 45,147,398 Diversified Bond Fund Investor Class 15,108,434 34,187,687 27,399,185 44,085 3,611,598 15,807,792 165,191,426 High-Yield Fund Investor Class 1,870,879 2,787,280 1,387,801 (66,802) 428,529 2,104,429 12,773,884 Emerging Markets Fund Investor Class 2,195,578 9,125,056 4,814,957 863,837 2,455,536 2,566,675 25,435,749 International Growth Fund Investor Class 4,254,581 19,052,185 7,026,022 196,938 3,656,137 5,174,603 64,734,284 Prime Money Market Fund Investor Class 35,573,044 8,462,542 6,033,072 -- 878,193 38,002,514 38,002,514 International Bond Fund Investor Class 1,731,065 4,753,794 11,165,217 295,949 822,946 1,274,114 19,226,380 ---------- ------------ ----------- ---------- ------------- ------------ $169,748,483 $78,660,229 $215,892 $33,484,813 $641,323,408 ============ =========== ========== ============= ============ One Choice Portfolio: Aggressive Equity Growth Fund Investor Class 2,088,338 $14,946,997 $1,668,989 $(255,530) $4,586,957 2,623,464 $58,923,001 Growth Fund Investor Class 2,513,849 10,274,465 7,984,836 (120,128) 86,512 2,607,180 62,702,679 Large Company Value Fund Investor Class 4,284,730 8,748,856 1,563,685 (194,083) 1,426,121 5,259,701 36,134,146 Real Estate Fund Investor Class 282,762 3,316,160 1,116,378 (386,149) 1,461,735 390,846 8,399,281 Small Company Fund Investor Class 838,718 3,904,826 307,347 (80,124) 1,079,013 1,247,389 9,567,474 Value Fund Investor Class 1,872,957 5,862,466 486,833 (108,221) 2,234,564 2,671,383 15,974,870 Vista Fund Investor Class 2,594,601 15,846,020 6,935,399 65,418 5,401,232 3,055,296 56,981,270 Diversified Bond Fund Investor Class 6,140,346 14,601,656 12,389,340 91,066 1,470,231 6,368,651 66,552,403 High-Yield Fund Investor Class 2,534,166 3,825,584 2,549,055 (142,318) 577,971 2,755,500 16,725,885 Emerging Markets Fund Investor Class 2,417,645 8,433,195 4,767,161 782,069 2,697,258 2,730,402 27,058,284 International Growth Fund Investor Class 3,602,665 13,085,369 4,832,762 (18,229) 3,089,559 4,234,145 52,969,154 Prime Money Market Fund Investor Class 8,031,973 1,939,353 1,678,850 -- 197,431 8,292,476 8,292,476 International Bond Fund Investor Class 293,166 731,707 4,712,384 328,710 40,020 -- -- ---------- ------------ ----------- ---------- ------------- ---------- ------------ $105,516,654 $50,993,019 $(37,519) $24,348,604 $420,280,923 ============ =========== ========== ============= ============ (1) Distributions received includes distributions from net investment income and from capital gains from the underlying funds. - ------ 26 January 31, 2008 July 31, 2007 Fund/Underlying Share Purchase Realized Distributions Share Fund Balance Cost Sales Cost Gain (Loss) Received(1) Balance Market Value One Choice Portfolio: Very Aggressive Equity Growth Fund Investor Class 1,097,999 $8,741,260 $1,380,281 $(170,565) $2,383,152 1,395,508 $31,343,110 Growth Fund Investor Class 1,304,700 6,850,982 5,201,396 (83,887) 46,341 1,369,560 32,937,918 Large Company Value Fund Investor Class 2,258,544 5,318,280 1,341,005 (151,417) 740,341 2,804,728 19,268,481 Real Estate Fund Investor Class 120,735 1,523,187 618,026 (199,629) 592,254 168,739 3,626,201 Small Company Fund Investor Class 397,812 1,930,933 184,207 (35,291) 487,388 598,416 4,589,851 Value Fund Investor Class 1,065,877 3,729,682 665,462 (121,591) 1,222,450 1,537,708 9,195,494 Vista Fund Investor Class 1,352,983 8,079,512 2,853,781 (22,480) 2,965,289 1,612,151 30,066,616 Emerging Markets Fund Investor Class 1,189,434 3,699,820 1,657,269 230,809 1,433,920 1,360,537 13,482,922 International Growth Fund Investor Class 1,906,138 6,835,214 1,931,533 (38,360) 1,706,863 2,267,165 28,362,234 Diversified Bond Fund Investor Class 349,452 2,616,880 918,773 11,183 92,880 515,711 5,389,180 Prime Money Market Fund Investor Class 3,427,061 1,092,095 938,062 -- 84,742 3,581,094 3,581,094 International Bond Fund Investor Class 125,026 426,576 2,126,020 133,692 16,799 -- -- --------- ----------- ----------- ---------- ------------- --------- --------------- $50,844,421 $19,815,815 $(447,536) $11,772,419 $181,843,101 =========== =========== ========== ============= =============== (1) Distributions received includes distributions from net investment income and from capital gains from the underlying funds. 5. 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, 2008, the funds, in aggregate, owned 52% of Diversified Bond Fund. 6. RISK FACTORS Some of the underlying funds invest in foreign securities, which are generally riskier than U.S. securities. As a result, the funds are subject to foreign risk, meaning that political events (such as civil unrest, national elections and imposition of exchange controls), social and economic events (such as labor strikes and rising inflation), and natural disasters occurring in a country where the funds invest could cause the funds' investments in that country to experience gains or losses. Investing in emerging markets may accentuate these risks. - ------ 27 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, 2008, the components of investments for federal income tax purposes were as follows: Very Very Conservative Conservative Moderate Aggressive Aggressive Federal tax cost of investments $62,003,397 $266,204,899 $638,404,386 $411,714,584 $179,753,164 ============ ============ ============ ============ ============ Gross tax appreciation of investments $1,445,384 $10,038,498 $27,808,939 $24,503,929 $10,017,835 Gross tax depreciation of investments (1,052,061) (7,958,809) (24,889,917) (15,937,590) (7,927,898) ------------ ------------ ------------ ------------ ------------ Net tax appreciation (depreciation) of investments $393,323 $2,079,689 $2,919,022 $8,566,339 $2,089,937 ============ ============ ============ ============ ============ 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 The Financial Accounting Standards Board 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 that adopting FAS 157 will have on the financial statement disclosures. - ------ 28 FINANCIAL HIGHLIGHTS One Choice Portfolio: Very Conservative Investor Class For a Share Outstanding Throughout the Years Ended July 31 (except as noted) 2008(1) 2007 2006 2005(2) PER-SHARE DATA Net Asset Value, Beginning of Period $10.55 $10.23 $10.27 $10.00 -------- ------- ------- -------- Income From Investment Operations Net Investment Income (Loss)(3) 0.29 0.40 0.37 0.25 Net Realized and Unrealized Gain (Loss) 0.10 0.33 (0.04) 0.29 -------- ------- ------- -------- Total From Investment Operations 0.39 0.73 0.33 0.54 -------- ------- ------- -------- Distributions From Net Investment Income (0.33) (0.39) (0.36) (0.27) From Net Realized Gains (0.04) (0.02) (0.01) -- -------- ------- ------- -------- Total Distributions (0.37) (0.41) (0.37) (0.27) -------- ------- ------- -------- Net Asset Value, End of Period $10.57 $10.55 $10.23 $10.27 ======== ======= ======= ======== TOTAL RETURN(4) 3.78% 7.23% 3.27% 5.43% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets(5) 0.00%(6) 0.00% 0.00% 0.00%(6) Ratio of Net Investment Income (Loss) to Average Net Assets 5.38%(6) 3.83% 3.67% 3.00%(6) Portfolio Turnover Rate 10% 17% 34% 38% Net Assets, End of Period (in thousands) $62,527 $40,983 $19,852 $10,132 (1) Six months ended January 31, 2008 (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: Conservative Investor Class For a Share Outstanding Throughout the Years Ended July 31 (except as noted) 2008(1) 2007 2006 2005(2) PER-SHARE DATA Net Asset Value, Beginning of Period $11.38 $10.66 $10.54 $10.00 -------- -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(3) 0.30 0.35 0.34 0.22 Net Realized and Unrealized Gain (Loss) (0.06) 0.75 0.12 0.58 -------- -------- -------- -------- Total From Investment Operations 0.24 1.10 0.46 0.80 -------- -------- -------- -------- Distributions From Net Investment Income (0.31) (0.35) (0.33) (0.26) From Net Realized Gains (0.08) (0.03) (0.01) -- -------- -------- -------- -------- Total Distributions (0.39) (0.38) (0.34) (0.26) -------- -------- -------- -------- Net Asset Value, End of Period $11.23 $11.38 $10.66 $10.54 ======== ======== ======== ======== TOTAL RETURN(4) 2.08% 10.41% 4.45% 8.08% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets(5) 0.00%(6) 0.00% 0.00% 0.00%(6) Ratio of Net Investment Income (Loss) to Average Net Assets 5.09%(6) 3.14% 3.23% 2.63%(6) Portfolio Turnover Rate 11% 7% 8% 12% Net Assets, End of Period (in thousands) $268,743 $227,830 $110,384 $43,183 (1) Six months ended January 31, 2008 (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: Moderate Investor Class For a Share Outstanding Throughout the Years Ended July 31 (except as noted) 2008(1) 2007 2006 2005(2) PER-SHARE DATA Net Asset Value, Beginning of Period $12.58 $11.34 $10.97 $10.00 -------- -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(3) 0.30 0.35 0.34 0.17 Net Realized and Unrealized Gain (Loss) (0.28) 1.29 0.38 0.99 -------- -------- -------- -------- Total From Investment Operations 0.02 1.64 0.72 1.16 -------- -------- -------- -------- Distributions From Net Investment Income (0.32) (0.35) (0.34) (0.19) From Net Realized Gains (0.14) (0.05) (0.01) -- -------- -------- -------- -------- Total Distributions (0.46) (0.40) (0.35) (0.19) -------- -------- -------- -------- Net Asset Value, End of Period $12.14 $12.58 $11.34 $10.97 ======== ======== ======== ======== TOTAL RETURN(4) 0.07% 14.56% 6.68% 11.71% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets(5) 0.00%(6) 0.00% 0.00% 0.00%(6) Ratio of Net Investment Income (Loss) to Average Net Assets 4.64%(6) 2.85% 3.02% 1.98%(6) Portfolio Turnover Rate 13% 7% 7% 3% Net Assets, End of Period (in thousands) $642,177 $586,377 $253,610 $97,313 (1) Six months ended January 31, 2008 (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: Aggressive Investor Class For a Share Outstanding Throughout the Years Ended July 31 (except as noted) 2008(1) 2007 2006 2005(2) PER-SHARE DATA Net Asset Value, Beginning of Period $13.69 $11.83 $11.26 $10.00 -------- -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(3) 0.30 0.32 0.31 0.14 Net Realized and Unrealized Gain (Loss) (0.42) 1.87 0.56 1.22 -------- -------- -------- -------- Total From Investment Operations (0.12) 2.19 0.87 1.36 -------- -------- -------- -------- Distributions From Net Investment Income (0.40) (0.28) (0.29) (0.10) From Net Realized Gains (0.18) (0.05) (0.01) -- -------- -------- -------- -------- Total Distributions (0.58) (0.33) (0.30) (0.10) -------- -------- -------- -------- Net Asset Value, End of Period $12.99 $13.69 $11.83 $11.26 ======== ======== ======== ======== TOTAL RETURN(4) (1.16)% 18.78% 7.84% 13.61% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets(5) 0.00%(6) 0.00% 0.00% 0.00%(6) Ratio of Net Investment Income (Loss) to Average Net Assets 4.31%(6) 2.46% 2.68% 1.52%(6) Portfolio Turnover Rate 12% 7% 6% 3% Net Assets, End of Period (in thousands) $420,697 $397,022 $191,350 $64,623 (1) Six months ended January 31, 2008 (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 One Choice Portfolio: Very Aggressive Investor Class For a Share Outstanding Throughout the Years Ended July 31 (except as noted) 2008(1) 2007 2006 2005(2) PER-SHARE DATA Net Asset Value, Beginning of Period $14.58 $12.23 $11.48 $10.00 -------- -------- ------- -------- Income From Investment Operations Net Investment Income (Loss)(3) 0.31 0.25 0.25 0.08 Net Realized and Unrealized Gain (Loss) (0.72) 2.40 0.78 1.49 -------- -------- ------- -------- Total From Investment Operations (0.41) 2.65 1.03 1.57 -------- -------- ------- -------- Distributions From Net Investment Income (0.37) (0.24) (0.27) (0.09) From Net Realized Gains (0.19) (0.06) (0.01) -- -------- -------- ------- -------- Total Distributions (0.56) (0.30) (0.28) (0.09) -------- -------- ------- -------- Net Asset Value, End of Period $13.61 $14.58 $12.23 $11.48 ======== ======== ======= ======== TOTAL RETURN(4) (3.07)% 21.87% 9.00% 15.81% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets(5) 0.00%(6) 0.00% 0.00% 0.00%(6) Ratio of Net Investment Income (Loss) to Average Net Assets 4.15%(6) 1.85% 2.08% 0.84%(6) Portfolio Turnover Rate 11% 8% 9% 8% Net Assets, End of Period (in thousands) $181,940 $168,844 $77,262 $25,649 (1) Six months ended January 31, 2008 (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. - ------ 33 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. - ------ 34 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 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-US 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 gross 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. - ------ 35 NOTES - ------ 36 [inside back page blank] [american century investments logo and text logo ®] 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 ©2008 American Century Proprietary Holdings, Inc. All rights reserved. 0803 SH-SAN-58749N
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 31, 2008 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 31, 2008 By: /s/ Robert J. Leach ------------------------------------ Name: Robert J. Leach Title: Vice President, Treasurer, and Chief Financial Officer (principal financial officer) Date: March 31, 2008