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
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AMERICAN CENTURY ASSET ALLOCATION PORTFOLIOS, INC.
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(Exact name of registrant as specified in charter)
4500 MAIN STREET, KANSAS CITY, MISSOURI 64111
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(Address of principal executive offices) (Zip code)
CHARLES A. ETHERINGTON, 4500 MAIN STREET, KANSAS CITY, MISSOURI 64111
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(Name and address of agent for service)
Registrant's telephone number, including area code: 816-531-5575
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Date of fiscal year end: 07-31
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Date of reporting period: 01-31-2008
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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.
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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.
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3
LIVESTRONG Portfolios
Growth of $10,000 Over Life of LIVESTRONG Income Portfolio -- Investor Class
$10,000 investment made August 31, 2004
*From 8/31/04, the Investor Class's inception date. Not annualized.
Growth of $10,000 Over Life of LIVESTRONG 2015 Portfolio -- Investor Class
$10,000 investment made August 31, 2004
*From 8/31/04, the Investor Class's inception date. Not annualized.
Data presented reflect past performance. Past performance is no guarantee of
future results. Current performance may be higher or lower than the
performance shown. Investment return and principal value will fluctuate, and
redemption value may be more or less than original cost. To obtain performance
data current to the most recent month end, please call 1-800-345-2021 or visit
americancentury.com. The performance of LIVESTRONG Portfolios is dependent on
the performance of their underlying American Century funds, and will assume
the risks associated with these funds. The risks will vary according to each
LIVESTRONG Portfolio's asset allocation, and a fund with a later target date
is expected to be more volatile than one with an earlier target date.
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.
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4
LIVESTRONG Portfolios
Growth of $10,000 Over Life of LIVESTRONG 2025 Portfolio -- Investor Class
$10,000 investment made August 31, 2004
*From 8/31/04, the Investor Class's inception date. Not annualized.
Growth of $10,000 Over Life of LIVESTRONG 2035 Portfolio -- Investor Class
$10,000 investment made August 31, 2004
*From 8/31/04, the Investor Class's inception date. Not annualized.
Data presented reflect past performance. Past performance is no guarantee of
future results. Current performance may be higher or lower than the
performance shown. Investment return and principal value will fluctuate, and
redemption value may be more or less than original cost. To obtain performance
data current to the most recent month end, please call 1-800-345-2021 or visit
americancentury.com. The performance of LIVESTRONG Portfolios is dependent on
the performance of their underlying American Century funds, and will assume
the risks associated with these funds. The risks will vary according to each
LIVESTRONG Portfolio's asset allocation, and a fund with a later target date
is expected to be more volatile than one with an earlier target date.
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.
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5
LIVESTRONG Portfolios
Growth of $10,000 Over Life of LIVESTRONG 2045 Portfolio -- Investor Class
$10,000 investment made August 31, 2004
*From 8/31/04, the Investor Class's inception date. Not annualized.
One-Year Returns Over Life of Class
Periods ended January 31
2005* 2006 2007 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.
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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.
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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.
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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.
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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.
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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
=========== ============ =========== ============
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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
=========== ============ =========== ============
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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.
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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.
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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.
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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.
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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.
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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
*From 9/30/04, the Investor Class's inception date. Not annualized.
Growth of $10,000 Over Life of One Choice Portfolio: Conservative
$10,000 investment made September 30, 2004
*From 9/30/04, the Investor Class's inception date. Not annualized.
Data presented reflect past performance. Past performance is no guarantee of
future results. Current performance may be higher or lower than the
performance shown. Investment return and principal value will fluctuate, and
redemption value may be more or less than original cost. To obtain performance
data current to the most recent month end, please call 1-800-345-2021 or visit
americancentury.com. The performance of the portfolios is dependent on the
performance of their underlying American Century funds, and will assume the
risks associated with these funds. The risks will vary according to each
portfolio's asset allocation, and the risk level assigned to each portfolio is
intended to reflect the relative short-term price volatility among the funds
in each. 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
*From 9/30/04, the Investor Class's inception date. Not annualized.
Growth of $10,000 Over Life of One Choice Portfolio: Aggressive
$10,000 investment made September 30, 2004
*From 9/30/04, the Investor Class's inception date. Not annualized.
Data presented reflect past performance. Past performance is no guarantee of
future results. Current performance may be higher or lower than the
performance shown. Investment return and principal value will fluctuate, and
redemption value may be more or less than original cost. To obtain performance
data current to the most recent month end, please call 1-800-345-2021 or visit
americancentury.com. The performance of the portfolios is dependent on the
performance of their underlying American Century funds, and will assume the
risks associated with these funds. The risks will vary according to each
portfolio's asset allocation, and the risk level assigned to each portfolio is
intended to reflect the relative short-term price volatility among the funds
in each. 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
*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
