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 | 811-21861 | |||||
AMERICAN CENTURY GROWTH FUNDS, INC. | ||||||
(Exact name of registrant as specified in charter) | ||||||
4500 MAIN STREET, KANSAS CITY, MISSOURI | 64111 | |||||
(Address of principal executive offices) | (Zip Code) | |||||
CHARLES A. ETHERINGTON 4500 MAIN STREET, KANSAS CITY, MISSOURI 64111 | ||||||
(Name and address of agent for service) | ||||||
Registrant’s telephone number, including area code: | 816-531-5575 | |||||
Date of fiscal year end: | 07-31 | |||||
Date of reporting period: | 01-31-2018 |
ITEM 1. REPORTS TO STOCKHOLDERS.
Semiannual Report | |
January 31, 2018 | |
Adaptive All Cap Fund |
Table of Contents |
Any opinions expressed in this report reflect those of the author as of the date of the report, and do not necessarily represent the opinions of American Century Investments® or any other person in the American Century Investments organization. Any such opinions are subject to change at any time based upon market or other conditions and American Century Investments disclaims any responsibility to update such opinions. These opinions may not be relied upon as investment advice and, because investment decisions made by American Century Investments funds are based on numerous factors, may not be relied upon as an indication of trading intent on behalf of any American Century Investments fund. Security examples are used for representational purposes only and are not intended as recommendations to purchase or sell securities. Performance information for comparative indices and securities is provided to American Century Investments by third party vendors. To the best of American Century Investments’ knowledge, such information is accurate at the time of printing.
President’s Letter |
Jonathan Thomas
Dear Investor:
Thank you for reviewing this semiannual report for the six months ended January 31, 2018. It provides a market overview (below), followed by a schedule of fund investments and other financial information. For additional commentary and information on fund performance, plus other investment insights, we encourage you to visit our website, americancentury.com.
Stock Market Rally Rolled On
The global stock market rally extended its run amid a backdrop of unusually subdued market volatility. Investors generally responded enthusiastically to robust corporate earnings results, improving and synchronizing global economic growth, and a significant U.S. tax-reform package. This optimism drove major U.S. stock market indices to a series of record-high levels. Gains were broad-based, but U.S. growth stocks delivered particularly stellar returns. Outside the U.S., it was a similar story. Solid corporate profits, improving economic growth rates, and continued central bank support fueled gains in the developed markets. Returns for emerging markets equities were even stronger, as rallying commodities markets and a weaker U.S. dollar further bolstered performance.
The backdrop for bonds proved more challenging, as yields headed upward on Federal Reserve (Fed) action and rising inflation expectations. In addition to launching a plan to gradually reduce its $4.5 trillion balance sheet, the Fed raised interest rates once during the reporting period. The December rate hike pushed the federal funds rate target to a range of 1.25%-1.50%. The Fed also indicated it would lift rates three times in 2018. Meanwhile, current inflation remained below the Fed’s target, but longer-term inflation expectations rose as the period progressed. Treasury yields increased, and interest rate-sensitive assets, including longer-maturity U.S. Treasuries, utilities stocks, and U.S. real estate investment trusts (REITs), generally produced more muted returns for the six-month period.
With global growth strengthening, inflationary pressures mounting, and Treasury yields rising, investors likely will face new opportunities and challenges in the months ahead. We believe this scenario warrants a disciplined, diversified, and risk-aware approach, using professionally managed portfolios in pursuit of investment goals. We appreciate your continued trust and confidence in us.
Sincerely,
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
2
Fund Characteristics |
JANUARY 31, 2018 | |
Top Ten Holdings | % of net assets |
Saia, Inc. | 2.1% |
Meridian Bioscience, Inc. | 2.0% |
Northwest Bancshares, Inc. | 2.0% |
Williams Partners LP | 1.7% |
Neenah, Inc. | 1.6% |
Orthofix International NV | 1.6% |
Boeing Co. (The) | 1.6% |
TransDigm Group, Inc. | 1.6% |
Ormat Technologies, Inc. | 1.5% |
Progress Software Corp. | 1.5% |
Top Five Industries | % of net assets |
Thrifts and Mortgage Finance | 6.7% |
Health Care Equipment and Supplies | 6.4% |
Equity Real Estate Investment Trusts (REITs) | 6.4% |
Software | 5.7% |
IT Services | 4.6% |
Types of Investments in Portfolio | % of net assets |
Common Stocks | 99.7% |
Temporary Cash Investments | 0.4% |
Other Assets and Liabilities | (0.1)% |
3
Shareholder Fee Example |
Fund shareholders may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption/exchange fees; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in your fund and to compare these costs with the ongoing cost of investing in other mutual funds.
The example is based on an investment of $1,000 made at the beginning of the period and held for the entire period from August 1, 2017 to January 31, 2018.
Actual Expenses
The table provides information about actual account values and actual expenses for each class. You may use the information, together with the amount you invested, to estimate the expenses that you paid over the period. First, identify the share class you own. Then simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
If you hold Investor Class shares of any American Century Investments fund, or I Class shares of the American Century Diversified Bond Fund, in an American Century Investments account (i.e., not a financial intermediary or retirement plan account), American Century Investments 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 Investments Brokerage accounts) registered under your Social Security number. Personal accounts include individual accounts, joint accounts, UGMA/UTMA accounts, personal trusts, Coverdell Education Savings Accounts and IRAs (including traditional, Roth, Rollover, SEP-, SARSEP- and SIMPLE-IRAs), and certain other retirement accounts. If you have only business, business retirement, employer-sponsored or American Century Investments Brokerage accounts, you are currently not subject to this fee. If you are subject to the Account Maintenance Fee, your account value could be reduced by the fee amount.
Hypothetical Example for Comparison Purposes
The table also provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio of each class of your fund and an assumed rate of return of 5% per year before expenses, which is not the actual return of a fund’s share class. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) or redemption/exchange fees. Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
4
Beginning Account Value 8/1/17 | Ending Account Value 1/31/18 | Expenses Paid During Period(1) 8/1/17 - 1/31/18 | Annualized Expense Ratio(1) | |
Actual | ||||
Investor Class | $1,000 | $1,131.80 | $6.23 | 1.16% |
I Class | $1,000 | $1,133.20 | $5.16 | 0.96% |
Advisor Class | $1,000 | $1,130.30 | $7.57 | 1.41% |
R Class | $1,000 | $1,129.60 | $8.91 | 1.66% |
R5 Class | $1,000 | $1,133.50 | $5.16 | 0.96% |
R6 Class | $1,000 | $1,133.80 | $4.36 | 0.81% |
Hypothetical | ||||
Investor Class | $1,000 | $1,019.36 | $5.90 | 1.16% |
I Class | $1,000 | $1,020.37 | $4.89 | 0.96% |
Advisor Class | $1,000 | $1,018.10 | $7.17 | 1.41% |
R Class | $1,000 | $1,016.84 | $8.44 | 1.66% |
R5 Class | $1,000 | $1,020.37 | $4.89 | 0.96% |
R6 Class | $1,000 | $1,021.12 | $4.13 | 0.81% |
(1) | Expenses are equal to the class's annualized expense ratio listed in the table above, multiplied by the average account value over the period, multiplied by 184, the number of days in the most recent fiscal half-year, divided by 365, to reflect the one-half year period. Annualized expense ratio reflects actual expenses, including any applicable fee waivers or expense reimbursements and excluding any acquired fund fees and expenses. |
5
Schedule of Investments |
JANUARY 31, 2018 (UNAUDITED)
Shares | Value | ||||
COMMON STOCKS — 99.7% | |||||
Aerospace and Defense — 3.5% | |||||
Aerojet Rocketdyne Holdings, Inc.(1) | 11,520 | $ | 316,800 | ||
Boeing Co. (The) | 4,563 | 1,616,991 | |||
TransDigm Group, Inc. | 5,087 | 1,612,121 | |||
3,545,912 | |||||
Airlines — 1.2% | |||||
Delta Air Lines, Inc. | 15,940 | 904,914 | |||
JetBlue Airways Corp.(1) | 13,918 | 290,329 | |||
1,195,243 | |||||
Auto Components — 0.3% | |||||
Superior Industries International, Inc. | 18,531 | 312,247 | |||
Banks — 2.2% | |||||
BCB Bancorp, Inc. | 22,921 | 347,253 | |||
CIT Group, Inc. | 11,273 | 571,429 | |||
M&T Bank Corp. | 5,114 | 975,649 | |||
Macatawa Bank Corp. | 18,130 | 187,827 | |||
United Security Bancshares | 20,184 | 223,033 | |||
2,305,191 | |||||
Beverages — 0.7% | |||||
Boston Beer Co., Inc. (The), Class A(1) | 3,629 | 688,966 | |||
Biotechnology — 2.5% | |||||
Amgen, Inc. | 1,981 | 368,565 | |||
Asterias Biotherapeutics, Inc.(1) | 4,217 | 8,856 | |||
BioSpecifics Technologies Corp.(1) | 11,220 | 480,440 | |||
Bluebird Bio, Inc.(1) | 457 | 93,639 | |||
Curis, Inc.(1) | 12,996 | 8,020 | |||
Dynavax Technologies Corp.(1) | 33,309 | 536,275 | |||
Gilead Sciences, Inc. | 10,066 | 843,531 | |||
Matinas BioPharma Holdings, Inc.(1) | 124,445 | 121,969 | |||
Versartis, Inc.(1) | 42,442 | 84,884 | |||
2,546,179 | |||||
Building Products — 0.7% | |||||
Simpson Manufacturing Co., Inc. | 12,465 | 732,194 | |||
Capital Markets — 3.9% | |||||
AllianceBernstein Holding LP | 26,349 | 719,328 | |||
Evercore, Inc., Class A | 10,300 | 1,035,665 | |||
Janus Henderson Group plc | 36,841 | 1,450,798 | |||
Waddell & Reed Financial, Inc., Class A | 32,448 | 746,304 | |||
3,952,095 | |||||
Chemicals — 2.0% | |||||
AgroFresh Solutions, Inc.(1) | 80,262 | 605,175 | |||
Praxair, Inc. | 2,090 | 337,514 | |||
Sensient Technologies Corp. | 14,529 | 1,043,909 | |||
Tronox Ltd., Class A | 5,739 | 112,657 | |||
2,099,255 |
6
Shares | Value | ||||
Communications Equipment — 1.7% | |||||
Cisco Systems, Inc. | 14,842 | $ | 616,537 | ||
Plantronics, Inc. | 19,299 | 1,138,448 | |||
1,754,985 | |||||
Consumer Finance — 1.8% | |||||
EZCORP, Inc., Class A(1) | 81,460 | 961,228 | |||
Synchrony Financial | 22,906 | 908,910 | |||
1,870,138 | |||||
Distributors — 1.0% | |||||
Genuine Parts Co. | 10,238 | 1,065,469 | |||
Diversified Consumer Services — 1.0% | |||||
Carriage Services, Inc. | 37,705 | 1,004,084 | |||
Diversified Telecommunication Services — 0.9% | |||||
Zayo Group Holdings, Inc.(1) | 24,102 | 884,543 | |||
Electric Utilities — 2.2% | |||||
Avangrid, Inc. | 25,966 | 1,265,063 | |||
NextEra Energy, Inc. | 6,042 | 957,174 | |||
2,222,237 | |||||
Electronic Equipment, Instruments and Components — 1.8% | |||||
Daktronics, Inc. | 79,781 | 738,772 | |||
Plexus Corp.(1) | 17,943 | 1,072,094 | |||
1,810,866 | |||||
Energy Equipment and Services — 0.3% | |||||
RPC, Inc. | 12,757 | 257,691 | |||
Equity Real Estate Investment Trusts (REITs) — 6.4% | |||||
Agree Realty Corp. | 6,936 | 333,899 | |||
Armada Hoffler Properties, Inc. | 44,460 | 639,779 | |||
Ashford Hospitality Prime, Inc. | 49,729 | 448,556 | |||
Ashford Hospitality Trust, Inc. | 106,235 | 684,153 | |||
CubeSmart | 15,303 | 421,292 | |||
Easterly Government Properties, Inc. | 29,490 | 614,277 | |||
Gladstone Commercial Corp. | 20,820 | 395,580 | |||
InfraREIT, Inc.(1) | 69,381 | 1,316,851 | |||
MedEquities Realty Trust, Inc. | 60,971 | 665,803 | |||
Sunstone Hotel Investors, Inc. | 25,934 | 436,988 | |||
VEREIT, Inc. | 87,084 | 627,005 | |||
6,584,183 | |||||
Food and Staples Retailing — 0.6% | |||||
Walgreens Boots Alliance, Inc. | 8,788 | 661,385 | |||
Food Products — 2.0% | |||||
Blue Buffalo Pet Products, Inc.(1) | 15,380 | 522,612 | |||
Calavo Growers, Inc. | 17,154 | 1,492,398 | |||
2,015,010 | |||||
Health Care Equipment and Supplies — 6.4% | |||||
Abbott Laboratories | 15,787 | 981,320 | |||
Anika Therapeutics, Inc.(1) | 4,971 | 331,665 | |||
LeMaitre Vascular, Inc. | 22,733 | 791,108 | |||
Meridian Bioscience, Inc. | 133,234 | 2,085,112 | |||
Orthofix International NV(1) | 28,911 | 1,660,648 | |||
Varian Medical Systems, Inc.(1) | 5,890 | 750,975 | |||
6,600,828 |
7
Shares | Value | ||||
Health Care Providers and Services — 3.2% | |||||
Aetna, Inc. | 3,503 | $ | 654,430 | ||
Express Scripts Holding Co.(1) | 3,275 | 259,315 | |||
HCA Healthcare, Inc.(1) | 9,976 | 1,009,172 | |||
Magellan Health, Inc.(1) | 6,264 | 623,894 | |||
RadNet, Inc.(1) | 21,404 | 217,251 | |||
Triple-S Management Corp., Class B(1) | 21,309 | 489,681 | |||
3,253,743 | |||||
Hotels, Restaurants and Leisure — 4.5% | |||||
Denny's Corp.(1) | 91,187 | 1,366,893 | |||
Red Robin Gourmet Burgers, Inc.(1) | 9,162 | 482,379 | |||
Royal Caribbean Cruises Ltd. | 5,369 | 717,030 | |||
Ruth's Hospitality Group, Inc. | 23,997 | 568,729 | |||
Sonic Corp. | 28,102 | 726,156 | |||
Wingstop, Inc. | 14,459 | 699,237 | |||
4,560,424 | |||||
Household Durables — 0.7% | |||||
Toll Brothers, Inc. | 3,360 | 156,509 | |||
TRI Pointe Group, Inc.(1) | 34,520 | 563,021 | |||
719,530 | |||||
Household Products — 1.1% | |||||
WD-40 Co. | 9,320 | 1,153,350 | |||
Independent Power and Renewable Electricity Producers — 1.5% | |||||
Ormat Technologies, Inc. | 22,166 | 1,553,393 | |||
Insurance — 0.8% | |||||
Old Republic International Corp. | 38,651 | 830,610 | |||
Internet Software and Services — 3.4% | |||||
CommerceHub, Inc., Series C(1) | 34,479 | 665,100 | |||
Etsy, Inc.(1) | 17,904 | 335,879 | |||
NIC, Inc. | 31,408 | 521,373 | |||
Web.com Group, Inc.(1) | 51,000 | 1,185,750 | |||
Yelp, Inc., Class A(1) | 17,334 | 759,576 | |||
3,467,678 | |||||
IT Services — 4.6% | |||||
Convergys Corp. | 64,964 | 1,511,712 | |||
EPAM Systems, Inc.(1) | 7,332 | 861,363 | |||
Fiserv, Inc.(1) | 5,494 | 773,775 | |||
International Business Machines Corp. | 3,332 | 545,449 | |||
Western Union Co. (The) | 50,549 | 1,050,914 | |||
4,743,213 | |||||
Leisure Products — 0.7% | |||||
Sturm Ruger & Co., Inc. | 12,864 | 681,149 | |||
Life Sciences Tools and Services — 1.8% | |||||
Enzo Biochem, Inc.(1) | 47,681 | 350,932 | |||
Waters Corp.(1) | 6,907 | 1,489,218 | |||
1,840,150 | |||||
Machinery — 0.7% | |||||
Pentair plc | 10,328 | 738,452 | |||
Marine — 0.4% | |||||
Costamare, Inc. | 55,679 | 363,027 |
8
Shares | Value | ||||
Media — 3.2% | |||||
Hemisphere Media Group, Inc.(1) | 31,261 | $ | 334,492 | ||
Interpublic Group of Cos., Inc. (The) | 28,618 | 626,448 | |||
MDC Partners, Inc., Class A(1) | 162,302 | 1,460,718 | |||
Omnicom Group, Inc. | 7,375 | 565,294 | |||
Walt Disney Co. (The) | 3,064 | 332,965 | |||
3,319,917 | |||||
Oil, Gas and Consumable Fuels — 4.0% | |||||
Anadarko Petroleum Corp. | 4,217 | 253,231 | |||
Laredo Petroleum, Inc.(1) | 19,058 | 185,434 | |||
Marathon Petroleum Corp. | 21,520 | 1,490,691 | |||
Williams Cos., Inc. (The) | 15,644 | 491,065 | |||
Williams Partners LP | 40,929 | 1,714,925 | |||
4,135,346 | |||||
Paper and Forest Products — 1.6% | |||||
Neenah, Inc. | 18,567 | 1,680,314 | |||
Pharmaceuticals — 1.5% | |||||
Catalent, Inc.(1) | 8,648 | 402,478 | |||
Prestige Brands Holdings, Inc.(1) | 25,917 | 1,084,108 | |||
1,486,586 | |||||
Professional Services — 3.9% | |||||
CRA International, Inc. | 16,010 | 743,344 | |||
Dun & Bradstreet Corp. (The) | 7,797 | 964,723 | |||
Equifax, Inc. | 4,728 | 590,669 | |||
Navigant Consulting, Inc.(1) | 50,595 | 1,038,209 | |||
TransUnion(1) | 11,349 | 673,677 | |||
4,010,622 | |||||
Real Estate Management and Development — 0.4% | |||||
HFF, Inc., Class A | 8,794 | 432,753 | |||
Road and Rail — 2.1% | |||||
Saia, Inc.(1) | 28,462 | 2,150,304 | |||
Semiconductors and Semiconductor Equipment — 1.8% | |||||
AXT, Inc.(1) | 41,963 | 331,507 | |||
Power Integrations, Inc. | 5,847 | 436,771 | |||
Tower Semiconductor Ltd.(1) | 31,974 | 1,110,777 | |||
1,879,055 | |||||
Software — 5.7% | |||||
American Software, Inc., Class A | 44,936 | 563,048 | |||
CA, Inc. | 7,843 | 281,171 | |||
Fortinet, Inc.(1) | 22,778 | 1,048,699 | |||
Progress Software Corp. | 30,543 | 1,521,958 | |||
QAD, Inc., Class A | 20,234 | 872,085 | |||
RealPage, Inc.(1) | 20,396 | 1,014,701 | |||
VMware, Inc., Class A(1) | 4,683 | 579,709 | |||
5,881,371 | |||||
Specialty Retail — 0.5% | |||||
Williams-Sonoma, Inc. | 9,261 | 474,441 | |||
Textiles, Apparel and Luxury Goods — 0.4% | |||||
Skechers U.S.A., Inc., Class A(1) | 10,750 | 442,793 | |||
Thrifts and Mortgage Finance — 6.7% | |||||
Entegra Financial Corp.(1) | 7,088 | 199,882 |
9
Shares | Value | ||||
Essent Group Ltd.(1) | 23,419 | $ | 1,089,452 | ||
Hingham Institution for Savings | 3,843 | 832,855 | |||
NMI Holdings, Inc., Class A(1) | 23,481 | 430,876 | |||
Northwest Bancshares, Inc. | 121,450 | 2,046,433 | |||
PHH Corp.(1) | 55,997 | 502,293 | |||
Provident Financial Holdings, Inc. | 10,854 | 198,628 | |||
Prudential Bancorp, Inc. | 13,152 | 227,661 | |||
Walker & Dunlop, Inc.(1) | 9,638 | 447,685 | |||
Waterstone Financial, Inc. | 52,162 | 891,970 | |||
6,867,735 | |||||
Tobacco — 0.5% | |||||
Vector Group Ltd. | 25,471 | 542,532 | |||
Trading Companies and Distributors — 0.6% | |||||
CAI International, Inc.(1) | 21,534 | 608,551 | |||
Water Utilities — 0.3% | |||||
Global Water Resources, Inc. | 29,285 | 260,637 | |||
TOTAL COMMON STOCKS (Cost $90,407,681) | 102,186,377 | ||||
TEMPORARY CASH INVESTMENTS — 0.4% | |||||
Repurchase Agreement, BMO Capital Markets Corp.,(collateralized by various U.S. Treasury obligations, 1.49% - 4.50%, 12/31/18 - 8/15/47, valued at $215,318),in a joint trading account at 1.05%, dated 1/31/18, due 2/1/18 (Delivery value $211,433) | 211,427 | ||||
Repurchase Agreement, Fixed Income Clearing Corp.,(collateralized by various U.S. Treasury obligations, 2.125%, 5/15/25, valued at $184,005),at 0.54%, dated 1/31/18, due 2/1/18 (Delivery value $176,003) | 176,000 | ||||
State Street Institutional U.S. Government Money Market Fund, Premier Class | 454 | 454 | |||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $387,881) | 387,881 | ||||
TOTAL INVESTMENT SECURITIES — 100.1% (Cost $90,795,562) | 102,574,258 | ||||
OTHER ASSETS AND LIABILITIES — (0.1)% | (63,968 | ) | |||
TOTAL NET ASSETS — 100.0% | $ | 102,510,290 |
NOTES TO SCHEDULE OF INVESTMENTS |
(1) | Non-income producing. |
See Notes to Financial Statements.
10
Statement of Assets and Liabilities |
JANUARY 31, 2018 (UNAUDITED) | |||
Assets | |||
Investment securities, at value (cost of $90,795,562) | $ | 102,574,258 | |
Receivable for capital shares sold | 278,355 | ||
Dividends and interest receivable | 52,452 | ||
102,905,065 | |||
Liabilities | |||
Payable for capital shares redeemed | 292,724 | ||
Accrued management fees | 98,902 | ||
Distribution and service fees payable | 3,149 | ||
394,775 | |||
Net Assets | $ | 102,510,290 | |
Net Assets Consist of: | |||
Capital (par value and paid-in surplus) | $ | 87,005,618 | |
Distributions in excess of net investment income | (451,989 | ) | |
Undistributed net realized gain | 4,177,965 | ||
Net unrealized appreciation | 11,778,696 | ||
$ | 102,510,290 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | ||||
Investor Class, $0.01 Par Value | $78,154,062 | 3,610,013 | $21.65 | |||
I Class, $0.01 Par Value | $13,585,244 | 623,167 | $21.80 | |||
Advisor Class, $0.01 Par Value | $3,984,345 | 185,883 | $21.43 | |||
R Class, $0.01 Par Value | $5,849,882 | 276,248 | $21.18 | |||
R5 Class, $0.01 Par Value | $400,171 | 18,342 | $21.82 | |||
R6 Class, $0.01 Par Value | $536,586 | 24,334 | $22.05 |
See Notes to Financial Statements.
11
Statement of Operations |
FOR THE SIX MONTHS ENDED JANUARY 31, 2018 (UNAUDITED) | |||
Investment Income (Loss) | |||
Income: | |||
Dividends (net of foreign taxes withheld of $124) | $ | 899,017 | |
Interest | 2,454 | ||
901,471 | |||
Expenses: | |||
Management fees | 571,818 | ||
Distribution and service fees: | |||
Advisor Class | 4,112 | ||
R Class | 12,810 | ||
Directors' fees and expenses | 1,641 | ||
Other expenses | 2,480 | ||
592,861 | |||
Net investment income (loss) | 308,610 | ||
Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investment transactions | 9,893,470 | ||
Forward foreign currency exchange contract transactions | (20,260 | ) | |
Foreign currency translation transactions | (19 | ) | |
9,873,191 | |||
Change in net unrealized appreciation (depreciation) on: | |||
Investments | 2,451,644 | ||
Forward foreign currency exchange contracts | 35,397 | ||
2,487,041 | |||
Net realized and unrealized gain (loss) | 12,360,232 | ||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 12,668,842 |
See Notes to Financial Statements.
12
Statement of Changes in Net Assets |
SIX MONTHS ENDED JANUARY 31, 2018 (UNAUDITED) AND YEAR ENDED JULY 31, 2017 | ||||||
Increase (Decrease) in Net Assets | January 31, 2018 | July 31, 2017 | ||||
Operations | ||||||
Net investment income (loss) | $ | 308,610 | $ | 903,091 | ||
Net realized gain (loss) | 9,873,191 | 7,270,630 | ||||
Change in net unrealized appreciation (depreciation) | 2,487,041 | 3,215,608 | ||||
Net increase (decrease) in net assets resulting from operations | 12,668,842 | 11,389,329 | ||||
Distributions to Shareholders | ||||||
From net investment income: | ||||||
Investor Class | (1,147,713 | ) | (707,284 | ) | ||
I Class | (228,191 | ) | (112,982 | ) | ||
Advisor Class | (39,871 | ) | (61,896 | ) | ||
R Class | (54,299 | ) | (17,887 | ) | ||
R5 Class | (6,046 | ) | — | |||
R6 Class | (7,486 | ) | (28 | ) | ||
From net realized gains: | ||||||
Investor Class | (4,992,235 | ) | — | |||
I Class | (871,224 | ) | — | |||
Advisor Class | (209,984 | ) | — | |||
R Class | (362,355 | ) | — | |||
R5 Class | (23,885 | ) | — | |||
R6 Class | (26,179 | ) | — | |||
Decrease in net assets from distributions | (7,969,468 | ) | (900,077 | ) | ||
Capital Share Transactions | ||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | (1,384,360 | ) | (672,676 | ) | ||
Net increase (decrease) in net assets | 3,315,014 | 9,816,576 | ||||
Net Assets | ||||||
Beginning of period | 99,195,276 | 89,378,700 | ||||
End of period | $ | 102,510,290 | $ | 99,195,276 | ||
Undistributed (distributions in excess of) net investment income | $ | (451,989 | ) | $ | 723,007 |
See Notes to Financial Statements.
13
Notes to Financial Statements |
JANUARY 31, 2018 (UNAUDITED)
1. Organization
American Century Growth Funds, Inc. (the corporation) is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company and is organized as a Maryland corporation. Adaptive All Cap Fund (the fund) is one fund in a series issued by the corporation. The fund’s investment objective is to seek long-term capital growth. The fund offers the Investor Class, I Class, Advisor Class, R Class, R5 Class and R6 Class. Sale of the R5 Class and R6 Class commenced on April 10, 2017 and December 1, 2016, respectively.
2. Significant Accounting Policies
The following is a summary of significant accounting policies consistently followed by the fund in preparation of its financial statements. The fund is an investment company and follows accounting and reporting guidance in accordance with accounting principles generally accepted in the United States of America. This may require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from these estimates. Management evaluated the impact of events or transactions occurring through the date the financial statements were issued that would merit recognition or disclosure.
Investment Valuations — The fund determines the fair value of its investments and computes its net asset value per share at the close of regular trading (usually 4 p.m. Eastern time) on the New York Stock Exchange (NYSE) on each day the NYSE is open. The Board of Directors has adopted valuation policies and procedures to guide the investment advisor in the fund’s investment valuation process and to provide methodologies for the oversight of the fund’s pricing function.
Equity securities that are listed or traded on a domestic securities exchange are valued at the last reported sales price or at the official closing price as provided by the exchange. Equity securities traded on foreign securities exchanges are generally valued at the closing price of such securities on the exchange where primarily traded or at the close of the NYSE, if that is earlier. If no last sales price is reported, or if local convention or regulation so provides, the mean of the latest bid and asked prices may be used. Securities traded over-the-counter are valued at the mean of the latest bid and asked prices, the last sales price, or the official closing price. Equity securities initially expressed in local currencies are translated into U.S. dollars at the mean of the appropriate currency exchange rate at the close of the NYSE as provided by an independent pricing service.
Open-end management investment companies are valued at the reported net asset value per share. Repurchase agreements are valued at cost, which approximates fair value. Forward foreign currency exchange contracts are valued at the mean of the appropriate forward exchange rate at the close of the NYSE as provided by an independent pricing service.
If the fund determines that the market price for an investment is not readily available or the valuation methods mentioned above do not reflect an investment’s fair value, such investment is valued as determined in good faith by the Board of Directors or its delegate, in accordance with policies and procedures adopted by the Board of Directors. In its determination of fair value, the fund may review several factors including, but not limited to, market information regarding the specific investment or comparable investments and correlation with other investment types, futures indices or general market indicators. Circumstances that may cause the fund to use these procedures to value an investment include, but are not limited to: an investment has been declared in default or is distressed; trading in a security has been suspended during the trading day or a security is not actively trading on its principal exchange; prices received from a regular pricing source are deemed unreliable; or there is a foreign market holiday and no trading occurred.
The fund monitors for significant events occurring after the close of an investment’s primary exchange but before the fund’s net asset value per share is determined. Significant events may include, but are not limited to: corporate announcements and transactions; governmental action and political unrest that could impact a specific investment or an investment sector; or armed conflicts, natural disasters and similar events that could affect investments in a specific country or region. The fund also monitors for significant fluctuations between domestic and foreign markets, as evidenced by the U.S. market or such other indicators that the Board of Directors, or its delegate, deems appropriate. If significant fluctuations in foreign markets are identified, the
14
fund may apply a model-derived factor to the closing price of equity securities traded on foreign securities exchanges. The factor is based on observable market data as provided by an independent pricing service.
Security Transactions — Security transactions are accounted for as of the trade date. Net realized gains and losses are determined on the identified cost basis, which is also used for federal income tax purposes.
Investment Income — Dividend income less foreign taxes withheld, if any, is recorded as of the ex-dividend date. Distributions received on securities that represent a return of capital or long-term capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The fund may estimate the components of distributions received that may be considered nontaxable distributions or long-term capital gain distributions for income tax purposes. Interest income is recorded on the accrual basis and includes accretion of discounts and amortization of premiums.
Foreign Currency Translations — All assets and liabilities initially expressed in foreign currencies are translated into U.S. dollars at prevailing exchange rates at period end. The fund may enter into spot foreign currency exchange contracts to facilitate transactions denominated in a foreign currency. Purchases and sales of investment securities, dividend and interest income, spot foreign currency exchange contracts, and expenses are translated at the rates of exchange prevailing on the respective dates of such transactions. Net realized and unrealized foreign currency exchange gains or losses related to investment securities are a component of net realized gain (loss) on investment transactions and change in net unrealized appreciation (depreciation) on investments, respectively.
Repurchase Agreements — The fund may enter into repurchase agreements with institutions that American Century Investment Management, Inc. (ACIM) (the investment advisor) has determined are creditworthy pursuant to criteria adopted by the Board of Directors. The fund requires that the collateral, represented by securities, received in a repurchase transaction be transferred to the custodian in a manner sufficient to enable the fund to obtain those securities in the event of a default under the repurchase agreement. ACIM monitors, on a daily basis, the securities transferred to ensure the value, including accrued interest, of the securities under each repurchase agreement is equal to or greater than amounts owed to the fund under each repurchase agreement.
Joint Trading Account — Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the fund, along with certain other funds in the American Century Investments family of funds, may transfer uninvested cash balances into a joint trading account. These balances are invested in one or more repurchase agreements that are collateralized by U.S. Treasury or Agency obligations.
Income Tax Status — It is the fund’s policy to distribute substantially all net investment income and net realized gains to shareholders and to otherwise qualify as a regulated investment company under provisions of the Internal Revenue Code. Accordingly, no provision has been made for income taxes. The fund files U.S. federal, state, local and non-U.S. tax returns as applicable. The fund's tax returns are subject to examination by the relevant taxing authority until expiration of the applicable statute of limitations, which is generally three years from the date of filing but can be longer in certain jurisdictions. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination and for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Multiple Class — All shares of the fund represent an equal pro rata interest in the net assets of the class to which such shares belong, and have identical voting, dividend, liquidation and other rights and the same terms and conditions, except for class specific expenses and exclusive rights to vote on matters affecting only individual classes. Income, non-class specific expenses, and realized and unrealized capital gains and losses of the fund are allocated to each class of shares based on their relative net assets.
Distributions to Shareholders — Distributions from net investment income and net realized gains, if any, are generally declared and paid annually. The fund may elect to treat a portion of its payment to a redeeming shareholder, which represents the pro rata share of undistributed net investment income and net realized gains, as a distribution for federal income tax purposes (tax equalization).
Indemnifications — Under the corporation’s organizational documents, its officers and directors are indemnified against certain liabilities arising out of the performance of their duties to the fund. In addition, in the normal course of business, the fund enters into contracts that provide general indemnifications. The maximum exposure under these arrangements is unknown as this would involve future claims that may be made against a fund. The risk of material loss from such claims is considered by management to be remote.
15
3. Fees and Transactions with Related Parties
Certain officers and directors of the corporation are also officers and/or directors of American Century Companies, Inc. (ACC). The corporation’s investment advisor, ACIM, the corporation's distributor, American Century Investment Services, Inc. (ACIS), and the corporation’s transfer agent, American Century Services, LLC, are wholly owned, directly or indirectly, by ACC.
Management Fees — The corporation has entered into a management agreement with ACIM, under which ACIM provides the fund with investment advisory and management services in exchange for a single, unified management fee (the fee) per class. The agreement provides that all expenses of managing and operating the fund, except distribution and service fees, brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), and extraordinary expenses, will be paid by ACIM. The fee is computed and accrued daily based on each class’s daily net assets and paid monthly in arrears. The difference in the fee among the classes is a result of their separate arrangements for non-Rule 12b-1 shareholder services. It is not the result of any difference in advisory or custodial fees or other expenses related to the management of the fund’s assets, which do not vary by class. The rate of the fee is determined by applying a fee rate calculation formula. This formula takes into account the fund’s assets as well as certain assets, if any, of other clients of the investment advisor outside the American Century Investments family of funds (such as subadvised funds and separate accounts) that use very similar investment teams and strategies (strategy assets).
The management fee schedule range and the effective annual management fee for each class for the period ended January 31, 2018 are as follows:
Management Fee Schedule Range | Effective Annual Management Fee | |
Investor Class | 0.85% to 1.15% | 1.15% |
I Class | 0.65% to 0.95% | 0.95% |
Advisor Class | 0.85% to 1.15% | 1.15% |
R Class | 0.85% to 1.15% | 1.15% |
R5 Class | 0.65% to 0.95% | 0.95% |
R6 Class | 0.50% to 0.80% | 0.80% |
Distribution and Service Fees — The Board of Directors has adopted a separate Master Distribution and Individual Shareholder Services Plan for each of the R Class and Advisor Class (collectively the plans), pursuant to Rule 12b-1 of the 1940 Act. The plans provide that the R Class will pay ACIS an annual distribution and service fee of 0.50%. The plans provide that the Advisor Class will pay ACIS an annual distribution and service fee of 0.25%. The fees are computed and accrued daily based on each class’s daily net assets and paid monthly in arrears. The fees are used to pay financial intermediaries for distribution and individual shareholder services. Fees incurred under the plans during the period ended January 31, 2018 are detailed in the Statement of Operations.
Directors' Fees and Expenses — The Board of Directors is responsible for overseeing the investment advisor’s management and operations of the fund. The directors receive detailed information about the fund and its investment advisor regularly throughout the year, and meet at least quarterly with management of the investment advisor to review reports about fund operations. The fund’s officers do not receive compensation from the fund.
Interfund Transactions — The fund may enter into security transactions with other American Century Investments funds and other client accounts of the investment advisor, in accordance with the 1940 Act rules and procedures adopted by the Board of Directors. The rules and procedures require, among other things, that these transactions be effected at the independent current market price of the security. During the period, the interfund purchases and sales were $470,548 and $1,918,634, respectively. The effect of interfund transactions on the Statement of Operations was $506,318 in net realized gain (loss) on investment transactions.
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the period ended January 31, 2018 were $53,801,294 and $62,157,106, respectively.
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5. Capital Share Transactions
The corporation is authorized to issue 3,000,000,000 shares. Transactions in shares of the fund were as follows:
Six months ended January 31, 2018 | Year ended July 31, 2017(1) | |||||||||
Shares | Amount | Shares | Amount | |||||||
Investor Class | ||||||||||
Sold | 463,729 | $ | 9,874,231 | 1,535,888 | $ | 29,985,032 | ||||
Issued in reinvestment of distributions | 283,162 | 5,923,753 | 35,661 | 689,679 | ||||||
Redeemed | (902,970 | ) | (19,378,545 | ) | (1,641,743 | ) | (31,984,773 | ) | ||
(156,079 | ) | (3,580,561 | ) | (70,194 | ) | (1,310,062 | ) | |||
I Class | ||||||||||
Sold | 80,972 | 1,760,566 | 362,329 | 7,132,416 | ||||||
Issued in reinvestment of distributions | 51,160 | 1,077,429 | 5,806 | 112,982 | ||||||
Redeemed | (127,571 | ) | (2,785,794 | ) | (101,964 | ) | (2,052,327 | ) | ||
4,561 | 52,201 | 266,171 | 5,193,071 | |||||||
Advisor Class | ||||||||||
Sold | 76,863 | 1,637,554 | 73,421 | 1,405,769 | ||||||
Issued in reinvestment of distributions | 12,059 | 249,855 | 3,230 | 61,896 | ||||||
Redeemed | (38,131 | ) | (833,856 | ) | (421,935 | ) | (8,274,626 | ) | ||
50,791 | 1,053,553 | (345,284 | ) | (6,806,961 | ) | |||||
R Class | ||||||||||
Sold | 83,966 | 1,769,060 | 107,690 | 2,029,664 | ||||||
Issued in reinvestment of distributions | 20,344 | 416,654 | 943 | 17,887 | ||||||
Redeemed | (49,287 | ) | (1,021,276 | ) | (42,002 | ) | (795,196 | ) | ||
55,023 | 1,164,438 | 66,631 | 1,252,355 | |||||||
R5 Class | ||||||||||
Sold | 19,203 | 419,737 | 250 | 5,000 | ||||||
Issued in reinvestment of distributions | 1,420 | 29,931 | — | — | ||||||
Redeemed | (2,531 | ) | (55,936 | ) | — | — | ||||
18,092 | 393,732 | 250 | 5,000 | |||||||
R6 Class | ||||||||||
Sold | 5,897 | 128,595 | 46,666 | 993,893 | ||||||
Issued in reinvestment of distributions | 1,580 | 33,665 | 1 | 28 | ||||||
Redeemed | (29,810 | ) | (629,983 | ) | — | — | ||||
(22,333 | ) | (467,723 | ) | 46,667 | 993,921 | |||||
Net increase (decrease) | (49,945 | ) | $ | (1,384,360 | ) | (35,759 | ) | $ | (672,676 | ) |
(1) April 10, 2017 (commencement of sale) through July 31, 2017 for the R5 Class and December 1, 2016 (commencement of sale) through July 31, 2017 for the R6 Class.
6. Fair Value Measurements
The fund’s investments valuation process is based on several considerations and may use multiple inputs to determine the fair value of the investments held by the fund. In conformity with accounting principles generally accepted in the United States of America, the inputs used to determine a valuation are classified into three broad levels.
• Level 1 valuation inputs consist of unadjusted quoted prices in an active market for identical investments.
• Level 2 valuation inputs consist of direct or indirect observable market data (including quoted prices for comparable investments, evaluations of subsequent market events, interest rates, prepayment speeds, credit risk, etc.). These inputs also consist of quoted prices for identical investments initially expressed in local currencies that are adjusted through translation into U.S. dollars.
• Level 3 valuation inputs consist of unobservable data (including a fund’s own assumptions).
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The level classification is based on the lowest level input that is significant to the fair valuation measurement. The valuation inputs are not necessarily an indication of the risks associated with investing in these securities or other financial instruments. There were no significant transfers between levels during the period.
The following is a summary of the level classifications as of period end. The Schedule of Investments provides additional information on the fund’s portfolio holdings.
Level 1 | Level 2 | Level 3 | ||||||
Assets | ||||||||
Investment Securities | ||||||||
Common Stocks | $ | 102,186,377 | — | — | ||||
Temporary Cash Investments | 454 | $ | 387,427 | — | ||||
$ | 102,186,831 | $ | 387,427 | — |
7. Derivative Instruments
Foreign Currency Risk — The fund is subject to foreign currency exchange rate risk in the normal course of pursuing its investment objectives. The value of foreign investments held by a fund may be significantly affected by changes in foreign currency exchange rates. The dollar value of a foreign security generally decreases when the value of the dollar rises against the foreign currency in which the security is denominated and tends to increase when the value of the dollar declines against such foreign currency. A fund may enter into forward foreign currency exchange contracts to reduce a fund's exposure to foreign currency exchange rate fluctuations. The net U.S. dollar value of foreign currency underlying all contractual commitments held by a fund and the resulting unrealized appreciation or depreciation are determined daily. Realized gain or loss is recorded upon the termination of the contract. Net realized and unrealized gains or losses occurring during the holding period of forward foreign currency exchange contracts are a component of net realized gain (loss) on forward foreign currency exchange contract transactions and change in net unrealized appreciation (depreciation) on forward foreign currency exchange contracts, respectively. A fund bears the risk of an unfavorable change in the foreign currency exchange rate underlying the forward contract. Additionally, losses, up to the fair value, may arise if the counterparties do not perform under the contract terms. The fund's average U.S. dollar exposure to foreign currency risk derivative instruments held during the period was $875,282.
At period end, the fund did not have any derivative instruments disclosed on the Statement of Assets and Liabilities. For the six months ended January 31, 2018, the effect of foreign currency risk derivative instruments on the Statement of Operations was $(20,260) in net realized gain (loss) on forward foreign currency exchange contract transactions and $35,397 in change in net unrealized appreciation (depreciation) on forward foreign currency exchange contracts.
8. Risk Factors
The fund’s investment process may result in high portfolio turnover, which could mean high transaction costs, affecting both performance and capital gains tax liabilities to investors.
The fund invests in common stocks of small companies. Because of this, the fund may be subject to greater risk and market fluctuations than a fund investing in larger, more established companies.
9. Federal Tax Information
The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
18
As of period end, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $ | 90,879,847 | |
Gross tax appreciation of investments | $ | 14,566,695 | |
Gross tax depreciation of investments | (2,872,284 | ) | |
Net tax appreciation (depreciation) of investments | $ | 11,694,411 |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales.
10. Corporate Event
The fund will be renamed Adaptive Small Cap Fund effective May 7, 2018.
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Financial Highlights |
For a Share Outstanding Throughout the Years Ended July 31 (except as noted) | |||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||
Income From Investment Operations: | Distributions From: | Ratio to Average Net Assets of: | |||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Net Investment Income (Loss) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
Investor Class | |||||||||||||||
2018(3) | $20.72 | 0.07 | 2.61 | 2.68 | (0.33) | (1.42) | (1.75) | $21.65 | 13.18% | 1.16%(4) | 0.61%(4) | 53% | $78,154 | ||
2017 | $18.55 | 0.19 | 2.17 | 2.36 | (0.19) | — | (0.19) | $20.72 | 12.85% | 1.15% | 0.97% | 105% | $78,040 | ||
2016 | $18.54 | 0.18 | (0.12)(5) | 0.06 | (0.05) | — | (0.05) | $18.55 | 0.36% | 1.16% | 1.06% | 126% | $71,170 | ||
2015 | $16.35 | 0.09 | 2.18 | 2.27 | (0.08) | — | (0.08) | $18.54 | 13.94% | 1.16% | 0.48% | 193% | $37,463 | ||
2014 | $14.46 | 0.09 | 2.01 | 2.10 | (0.21) | — | (0.21) | $16.35 | 14.60% | 1.15% | 0.54% | 175% | $21,232 | ||
2013 | $11.30 | 0.15 | 3.20 | 3.35 | (0.19) | — | (0.19) | $14.46 | 30.01% | 1.16% | 1.21% | 170% | $9,801 | ||
I Class | |||||||||||||||
2018(3) | $20.88 | 0.09 | 2.62 | 2.71 | (0.37) | (1.42) | (1.79) | $21.80 | 13.32% | 0.96%(4) | 0.81%(4) | 53% | $13,585 | ||
2017 | $18.69 | 0.21 | 2.21 | 2.42 | (0.23) | — | (0.23) | $20.88 | 13.03% | 0.95% | 1.17% | 105% | $12,914 | ||
2016 | $18.68 | 0.23 | (0.13)(5) | 0.10 | (0.09) | — | (0.09) | $18.69 | 0.55% | 0.96% | 1.26% | 126% | $6,587 | ||
2015 | $16.47 | 0.11 | 2.22 | 2.33 | (0.12) | — | (0.12) | $18.68 | 14.19% | 0.96% | 0.68% | 193% | $504 | ||
2014 | $14.56 | 0.12 | 2.03 | 2.15 | (0.24) | — | (0.24) | $16.47 | 14.86% | 0.95% | 0.74% | 175% | $32 | ||
2013 | $11.38 | 0.18 | 3.21 | 3.39 | (0.21) | — | (0.21) | $14.56 | 30.23% | 0.96% | 1.41% | 170% | $23 |
For a Share Outstanding Throughout the Years Ended July 31 (except as noted) | |||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||
Income From Investment Operations: | Distributions From: | Ratio to Average Net Assets of: | |||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Net Investment Income (Loss) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
Advisor Class | |||||||||||||||
2018(3) | $20.51 | 0.03 | 2.58 | 2.61 | (0.27) | (1.42) | (1.69) | $21.43 | 13.03% | 1.41%(4) | 0.36%(4) | 53% | $3,984 | ||
2017 | $18.36 | 0.16 | 2.13 | 2.29 | (0.14) | — | (0.14) | $20.51 | 12.53% | 1.40% | 0.72% | 105% | $2,770 | ||
2016 | $18.35 | 0.14 | (0.12)(5) | 0.02 | (0.01) | — | (0.01) | $18.36 | 0.11% | 1.41% | 0.81% | 126% | $8,819 | ||
2015 | $16.18 | 0.05 | 2.16 | 2.21 | (0.04) | — | (0.04) | $18.35 | 13.67% | 1.41% | 0.23% | 193% | $3,995 | ||
2014 | $14.31 | 0.05 | 1.99 | 2.04 | (0.17) | — | (0.17) | $16.18 | 14.32% | 1.40% | 0.29% | 175% | $3,221 | ||
2013 | $11.19 | 0.12 | 3.16 | 3.28 | (0.16) | — | (0.16) | $14.31 | 29.63% | 1.41% | 0.96% | 170% | $384 | ||
R Class | |||||||||||||||
2018(3) | $20.25 | 0.01 | 2.55 | 2.56 | (0.21) | (1.42) | (1.63) | $21.18 | 12.96% | 1.66%(4) | 0.11%(4) | 53% | $5,850 | ||
2017 | $18.13 | 0.07 | 2.14 | 2.21 | (0.09) | — | (0.09) | $20.25 | 12.23% | 1.65% | 0.47% | 105% | $4,480 | ||
2016 | $18.16 | 0.10 | (0.13)(5) | (0.03) | — | — | — | $18.13 | (0.17)% | 1.66% | 0.56% | 126% | $2,803 | ||
2015 | $16.01 | (0.01) | 2.16 | 2.15 | — | — | — | $18.16 | 13.43% | 1.66% | (0.02)% | 193% | $655 | ||
2014 | $14.16 | —(6) | 1.98 | 1.98 | (0.13) | — | (0.13) | $16.01 | 14.03% | 1.65% | 0.04% | 175% | $142 | ||
2013 | $11.07 | 0.06 | 3.16 | 3.22 | (0.13) | — | (0.13) | $14.16 | 29.36% | 1.66% | 0.71% | 170% | $112 | ||
R5 Class | |||||||||||||||
2018(3) | $20.88 | 0.08 | 2.64 | 2.72 | (0.36) | (1.42) | (1.78) | $21.82 | 13.35% | 0.96%(4) | 0.81%(4) | 53% | $400 | ||
2017(7) | $20.00 | 0.04 | 0.84 | 0.88 | — | — | — | $20.88 | 4.40% | 0.95%(4) | 0.58%(4) | 105%(8) | $5 | ||
R6 Class | |||||||||||||||
2018(3) | $21.11 | 0.13 | 2.64 | 2.77 | (0.41) | (1.42) | (1.83) | $22.05 | 13.38% | 0.81%(4) | 0.96%(4) | 53% | $537 | ||
2017(9) | $19.04 | 0.01 | 2.08 | 2.09 | (0.02) | — | (0.02) | $21.11 | 11.05% | 0.80%(4) | 0.07%(4) | 105%(8) | $985 |
Notes to Financial Highlights |
(1) | Computed using average shares outstanding throughout the period. |
(2) | Total returns are calculated based on the net asset value of the last business day. Total returns for periods less than one year are not annualized. |
(3) | Six months ended January 31, 2018 (unaudited). |
(4) | Annualized. |
(5) | Per-share amount was not in accord with the net realized and unrealized gain (loss) for the period because of the timing of transactions in shares of the fund and the amount and timing of per-share net realized and unrealized gain (loss) on such shares. |
(6) | Per-share amount was less than $0.005. |
(7) | April 10, 2017 (commencement of sale) through July 31, 2017. |
(8) | Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended July 31, 2017. |
(9) | December 1, 2016 (commencement of sale) through July 31, 2017. |
See Notes to Financial Statements.
Proxy Voting Results |
A special meeting of shareholders was held on October 18, 2017, to vote on the following proposal. The proposal received the required votes and was adopted. A summary of voting results is listed below.
To elect four directors to the Board of Directors of American Century Growth Funds, Inc.:
Affirmative | Withhold | ||||||
Thomas W. Bunn | $ | 91,289,412 | $ | 1,678,991 | |||
Barry Fink | $ | 91,251,000 | $ | 1,717,403 | |||
Jan M. Lewis | $ | 91,297,912 | $ | 1,670,491 | |||
Stephen E. Yates | $ | 91,202,473 | $ | 1,765,930 |
The other directors whose term of office continued after the meeting include Jonathan S. Thomas, Andrea C. Hall, James A. Olson, M. Jeannine Strandjord, and John R. Whitten.
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Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain retirement accounts are subject to federal income tax withholding, unless you elect not to have withholding apply*. Tax will be withheld on the total amount withdrawn even though you may be receiving amounts that are not subject to withholding, such as nondeductible contributions. In such case, excess amounts of withholding could occur. You may adjust your withholding election so that a greater or lesser amount will be withheld.
If you don’t want us to withhold on this amount, you must notify us to not withhold the federal income tax. You may notify us in writing or in certain situations by telephone or through other electronic means. For systematic withdrawals, your withholding election will remain in effect until revoked or changed by filing a new election. You have the right to revoke your election at any time and change your withholding percentage for future distributions.
Remember, even if you elect not to have income tax withheld, you are liable for paying income tax on the taxable portion of your withdrawal. If you elect not to have income tax withheld or you don’t have enough income tax withheld, you may be responsible for payment of estimated tax. You may incur penalties under the estimated tax rules if your withholding and estimated tax payments are not sufficient. You can reduce or defer the income tax on a distribution by directly or indirectly rolling such distribution over to another IRA or eligible plan. You should consult your tax advisor for additional information.
State tax will be withheld if, at the time of your distribution, your address is within one of the mandatory withholding states and you have federal income tax withheld (or as otherwise required by state law). State taxes will be withheld from your distribution in accordance with the respective state rules.
*Some 403(b), 457 and qualified retirement plan distributions may be subject to 20% mandatory withholding, as they are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
A description of the policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund is available without charge, upon request, by calling 1-800-345-2021. It is also available on the "About Us" page of American Century Investments’ 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 fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-Q. The fund’s 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 fund also makes its complete schedule of portfolio holdings for the most recent quarter of its fiscal year available on its website at americancentury.com and, upon request, by calling 1-800-345-2021.
24
Contact Us | americancentury.com | |
Automated Information Line | 1-800-345-8765 | |
Investor Services Representative | 1-800-345-2021 or 816-531-5575 | |
Investors Using Advisors | 1-800-378-9878 | |
Business, Not-For-Profit, Employer-Sponsored Retirement Plans | 1-800-345-3533 | |
Banks and Trust Companies, Broker-Dealers, Financial Professionals, Insurance Companies | 1-800-345-6488 | |
Telecommunications Relay Service for the Deaf | 711 | |
American Century Growth Funds, Inc. | ||
Investment Advisor: American Century Investment Management, Inc. Kansas City, Missouri | ||
This report and the statements it contains are submitted for the general information of our shareholders. The report is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus. | ||
©2018 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-91637 1803 |
Semiannual Report | |
January 31, 2018 | |
Focused Dynamic Growth Fund |
Table of Contents |
Any opinions expressed in this report reflect those of the author as of the date of the report, and do not necessarily represent the opinions of American Century Investments® or any other person in the American Century Investments organization. Any such opinions are subject to change at any time based upon market or other conditions and American Century Investments disclaims any responsibility to update such opinions. These opinions may not be relied upon as investment advice and, because investment decisions made by American Century Investments funds are based on numerous factors, may not be relied upon as an indication of trading intent on behalf of any American Century Investments fund. Security examples are used for representational purposes only and are not intended as recommendations to purchase or sell securities. Performance information for comparative indices and securities is provided to American Century Investments by third party vendors. To the best of American Century Investments’ knowledge, such information is accurate at the time of printing.
President’s Letter |
Jonathan Thomas
Dear Investor:
Thank you for reviewing this semiannual report for the six months ended January 31, 2018. It provides a market overview (below), followed by a schedule of fund investments and other financial information. For additional commentary and information on fund performance, plus other investment insights, we encourage you to visit our website, americancentury.com.
Stock Market Rally Rolled On
The global stock market rally extended its run amid a backdrop of unusually subdued market volatility. Investors generally responded enthusiastically to robust corporate earnings results, improving and synchronizing global economic growth, and a significant U.S. tax-reform package. This optimism drove major U.S. stock market indices to a series of record-high levels. Gains were broad-based, but U.S. growth stocks delivered particularly stellar returns. Outside the U.S., it was a similar story. Solid corporate profits, improving economic growth rates, and continued central bank support fueled gains in the developed markets. Returns for emerging markets equities were even stronger, as rallying commodities markets and a weaker U.S. dollar further bolstered performance.
The backdrop for bonds proved more challenging, as yields headed upward on Federal Reserve (Fed) action and rising inflation expectations. In addition to launching a plan to gradually reduce its $4.5 trillion balance sheet, the Fed raised interest rates once during the reporting period. The December rate hike pushed the federal funds rate target to a range of 1.25%-1.50%. The Fed also indicated it would lift rates three times in 2018. Meanwhile, current inflation remained below the Fed’s target, but longer-term inflation expectations rose as the period progressed. Treasury yields increased, and interest rate-sensitive assets, including longer-maturity U.S. Treasuries, utilities stocks, and U.S. real estate investment trusts (REITs), generally produced more muted returns for the six-month period.
With global growth strengthening, inflationary pressures mounting, and Treasury yields rising, investors likely will face new opportunities and challenges in the months ahead. We believe this scenario warrants a disciplined, diversified, and risk-aware approach, using professionally managed portfolios in pursuit of investment goals. We appreciate your continued trust and confidence in us.
Sincerely,
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
2
Fund Characteristics |
JANUARY 31, 2018 | |
Top Ten Holdings | % of net assets |
Alphabet, Inc., Class C | 4.8% |
Square, Inc., Class A | 4.8% |
Facebook, Inc., Class A | 4.5% |
Amazon.com, Inc. | 3.7% |
Okta, Inc. | 3.6% |
Boston Beer Co., Inc. (The), Class A | 3.5% |
NIKE, Inc., Class B | 3.5% |
Tableau Software, Inc., Class A | 3.4% |
Tesla, Inc. | 3.3% |
Intercontinental Exchange, Inc. | 3.2% |
Top Five Industries | % of net assets |
Internet Software and Services | 16.3% |
Biotechnology | 11.7% |
Machinery | 11.2% |
IT Services | 9.2% |
Software | 8.6% |
Types of Investments in Portfolio | % of net assets |
Domestic Common Stocks | 90.9% |
Foreign Common Stocks* | 6.6% |
Total Common Stocks | 97.5% |
Temporary Cash Investments | 3.4% |
Other Assets and Liabilities | (0.9)% |
*Includes depositary shares, dual listed securities and foreign ordinary shares.
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Shareholder Fee Example |
Fund shareholders may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption/exchange fees; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in your fund and to compare these costs with the ongoing cost of investing in other mutual funds.
The example is based on an investment of $1,000 made at the beginning of the period and held for the entire period from August 1, 2017 to January 31, 2018.
Actual Expenses
The table provides information about actual account values and actual expenses for each class. You may use the information, together with the amount you invested, to estimate the expenses that you paid over the period. First, identify the share class you own. Then simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
If you hold Investor Class shares of any American Century Investments fund, or I Class shares of the American Century Diversified Bond Fund, in an American Century Investments account (i.e., not a financial intermediary or retirement plan account), American Century Investments 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 Investments Brokerage accounts) registered under your Social Security number. Personal accounts include individual accounts, joint accounts, UGMA/UTMA accounts, personal trusts, Coverdell Education Savings Accounts and IRAs (including traditional, Roth, Rollover, SEP-, SARSEP- and SIMPLE-IRAs), and certain other retirement accounts. If you have only business, business retirement, employer-sponsored or American Century Investments Brokerage accounts, you are currently not subject to this fee. If you are subject to the Account Maintenance Fee, your account value could be reduced by the fee amount.
Hypothetical Example for Comparison Purposes
The table also provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio of each class of your fund and an assumed rate of return of 5% per year before expenses, which is not the actual return of a fund’s share class. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) or redemption/exchange fees. Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
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Beginning Account Value 8/1/17 | Ending Account Value 1/31/18 | Expenses Paid During Period(1) 8/1/17 - 1/31/18 | Annualized Expense Ratio(1) | |
Actual | ||||
Investor Class | $1,000 | $1,202.70 | $5.72 | 1.03% |
I Class | $1,000 | $1,203.40 | $4.61 | 0.83% |
Advisor Class | $1,000 | $1,201.00 | $7.10 | 1.28% |
R Class | $1,000 | $1,199.40 | $8.48 | 1.53% |
R6 Class | $1,000 | $1,205.30 | $3.78 | 0.68% |
Hypothetical | ||||
Investor Class | $1,000 | $1,020.01 | $5.24 | 1.03% |
I Class | $1,000 | $1,021.02 | $4.23 | 0.83% |
Advisor Class | $1,000 | $1,018.75 | $6.51 | 1.28% |
R Class | $1,000 | $1,017.49 | $7.78 | 1.53% |
R6 Class | $1,000 | $1,021.78 | $3.47 | 0.68% |
(1) | Expenses are equal to the class's annualized expense ratio listed in the table above, multiplied by the average account value over the period, multiplied by 184, the number of days in the most recent fiscal half-year, divided by 365, to reflect the one-half year period. Annualized expense ratio reflects actual expenses, including any applicable fee waivers or expense reimbursements and excluding any acquired fund fees and expenses. |
5
Schedule of Investments |
JANUARY 31, 2018 (UNAUDITED)
Shares | Value | ||||
COMMON STOCKS — 97.5% | |||||
Automobiles — 3.3% | |||||
Tesla, Inc.(1) | 3,385 | $ | 1,199,339 | ||
Beverages — 3.5% | |||||
Boston Beer Co., Inc. (The), Class A(1) | 6,644 | 1,261,363 | |||
Biotechnology — 11.7% | |||||
Biogen, Inc.(1) | 2,162 | 751,965 | |||
Celgene Corp.(1) | 5,480 | 554,357 | |||
Ionis Pharmaceuticals, Inc.(1) | 14,516 | 762,380 | |||
Regeneron Pharmaceuticals, Inc.(1) | 2,417 | 886,193 | |||
Spark Therapeutics, Inc.(1) | 13,263 | 743,391 | |||
Vertex Pharmaceuticals, Inc.(1) | 3,279 | 547,167 | |||
4,245,453 | |||||
Capital Markets — 3.3% | |||||
Intercontinental Exchange, Inc. | 15,922 | 1,175,681 | |||
Chemicals — 1.8% | |||||
Ecolab, Inc. | 4,792 | 659,763 | |||
Electronic Equipment, Instruments and Components — 2.1% | |||||
Cognex Corp. | 12,420 | 774,635 | |||
Health Care Equipment and Supplies — 2.2% | |||||
Intuitive Surgical, Inc.(1) | 1,872 | 808,086 | |||
Hotels, Restaurants and Leisure — 2.5% | |||||
Chipotle Mexican Grill, Inc.(1) | 2,745 | 891,466 | |||
Internet and Direct Marketing Retail — 6.7% | |||||
Amazon.com, Inc.(1) | 924 | 1,340,622 | |||
Netflix, Inc.(1) | 3,960 | 1,070,388 | |||
2,411,010 | |||||
Internet Software and Services — 16.3% | |||||
Alphabet, Inc., Class C(1) | 1,485 | 1,737,361 | |||
Baidu, Inc. ADR(1) | 2,605 | 643,227 | |||
Facebook, Inc., Class A(1) | 8,804 | 1,645,379 | |||
Okta, Inc.(1) | 43,658 | 1,285,728 | |||
Tencent Holdings Ltd. | 10,200 | 604,491 | |||
5,916,186 | |||||
IT Services — 9.2% | |||||
MasterCard, Inc., Class A | 5,534 | 935,246 | |||
Square, Inc., Class A(1) | 36,917 | 1,731,777 | |||
Visa, Inc., Class A | 5,313 | 660,034 | |||
3,327,057 | |||||
Machinery — 11.2% | |||||
FANUC Corp. | 4,100 | 1,106,966 | |||
Middleby Corp. (The)(1) | 8,346 | 1,137,226 | |||
WABCO Holdings, Inc.(1) | 4,884 | 754,041 | |||
Wabtec Corp. | 12,915 | 1,046,632 | |||
4,044,865 | |||||
Oil, Gas and Consumable Fuels — 2.1% | |||||
Concho Resources, Inc.(1) | 4,852 | 763,899 |
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Shares | Value | ||||
Personal Products — 2.1% | |||||
Estee Lauder Cos., Inc. (The), Class A | 5,555 | $ | 749,703 | ||
Professional Services — 2.1% | |||||
Verisk Analytics, Inc.(1) | 7,464 | 746,773 | |||
Software — 8.6% | |||||
salesforce.com, Inc.(1) | 10,099 | 1,150,377 | |||
Splunk, Inc.(1) | 7,964 | 735,635 | |||
Tableau Software, Inc., Class A(1) | 15,928 | 1,223,430 | |||
3,109,442 | |||||
Specialty Retail — 3.2% | |||||
Ross Stores, Inc. | 14,269 | 1,175,623 | |||
Technology Hardware, Storage and Peripherals — 2.1% | |||||
Apple, Inc. | 4,607 | 771,350 | |||
Textiles, Apparel and Luxury Goods — 3.5% | |||||
NIKE, Inc., Class B | 18,438 | 1,257,840 | |||
TOTAL COMMON STOCKS (Cost $26,968,798) | 35,289,534 | ||||
TEMPORARY CASH INVESTMENTS — 3.4% | |||||
Repurchase Agreement, BMO Capital Markets Corp., (collateralized by various U.S. Treasury obligations, 1.49% - 4.50%, 12/31/18 - 8/15/47, valued at $692,054), in a joint trading account at 1.05%, dated 1/31/18, due 2/1/18 (Delivery value $679,567) | 679,547 | ||||
Repurchase Agreement, Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 2.125%, 5/15/25, valued at $581,067), at 0.54%, dated 1/31/18, due 2/1/18 (Delivery value $566,008) | 566,000 | ||||
State Street Institutional U.S. Government Money Market Fund, Premier Class | 1,140 | 1,140 | |||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $1,246,687) | 1,246,687 | ||||
TOTAL INVESTMENT SECURITIES — 100.9% (Cost $28,215,485) | 36,536,221 | ||||
OTHER ASSETS AND LIABILITIES — (0.9)% | (333,824 | ) | |||
TOTAL NET ASSETS — 100.0% | $ | 36,202,397 |
NOTES TO SCHEDULE OF INVESTMENTS | ||
ADR | - | American Depositary Receipt |
(1) | Non-income producing. |
See Notes to Financial Statements.
7
Statement of Assets and Liabilities |
JANUARY 31, 2018 (UNAUDITED) | |||
Assets | |||
Investment securities, at value (cost of $28,215,485) | $ | 36,536,221 | |
Receivable for capital shares sold | 192,151 | ||
Dividends and interest receivable | 1,860 | ||
36,730,232 | |||
Liabilities | |||
Payable for investments purchased | 472,897 | ||
Payable for capital shares redeemed | 26,190 | ||
Accrued management fees | 28,567 | ||
Distribution and service fees payable | 181 | ||
527,835 | |||
Net Assets | $ | 36,202,397 | |
Net Assets Consist of: | |||
Capital (par value and paid-in surplus) | $ | 32,525,122 | |
Accumulated net investment loss | (151,753 | ) | |
Accumulated net realized loss | (4,491,708 | ) | |
Net unrealized appreciation | 8,320,736 | ||
$ | 36,202,397 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | ||||
Investor Class, $0.01 Par Value | $34,871,892 | 1,443,903 | $24.15 | |||
I Class, $0.01 Par Value | $575,122 | 23,703 | $24.26 | |||
Advisor Class, $0.01 Par Value | $496,796 | 20,734 | $23.96 | |||
R Class, $0.01 Par Value | $221,457 | 9,321 | $23.76 | |||
R6 Class, $0.01 Par Value | $37,130 | 1,510 | $24.59 |
See Notes to Financial Statements.
8
Statement of Operations |
FOR THE SIX MONTHS ENDED JANUARY 31, 2018 (UNAUDITED) | |||
Investment Income (Loss) | |||
Income: | |||
Dividends (net of foreign taxes withheld of $965) | $ | 45,186 | |
Interest | 2,981 | ||
48,167 | |||
Expenses: | |||
Management fees | 148,258 | ||
Distribution and service fees: | |||
Advisor Class | 501 | ||
R Class | 374 | ||
Directors' fees and expenses | 409 | ||
Other expenses | 621 | ||
150,163 | |||
Fees waived(1) | (10,813 | ) | |
139,350 | |||
Net investment income (loss) | (91,183 | ) | |
Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investment transactions | 306,988 | ||
Foreign currency translation transactions | (780 | ) | |
306,208 | |||
Change in net unrealized appreciation (depreciation) on: | |||
Investments | 4,897,596 | ||
Translation of assets and liabilities in foreign currencies | (67 | ) | |
4,897,529 | |||
Net realized and unrealized gain (loss) | 5,203,737 | ||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 5,112,554 |
(1) | Amount consists of $10,433, $147, $160, $60 and $13 for Investor Class, I Class, Advisor Class, R Class and R6 Class, respectively. |
See Notes to Financial Statements.
9
Statement of Changes in Net Assets |
SIX MONTHS ENDED JANUARY 31, 2018 (UNAUDITED) AND YEAR ENDED JULY 31, 2017 | ||||||
Increase (Decrease) in Net Assets | January 31, 2018 | July 31, 2017 | ||||
Operations | ||||||
Net investment income (loss) | $ | (91,183 | ) | $ | (87,133 | ) |
Net realized gain (loss) | 306,208 | (157,207 | ) | |||
Change in net unrealized appreciation (depreciation) | 4,897,529 | 2,823,938 | ||||
Net increase (decrease) in net assets resulting from operations | 5,112,554 | 2,579,598 | ||||
Distributions to Shareholders | ||||||
From net investment income: | ||||||
Investor Class | — | (110,059 | ) | |||
I Class | — | (262 | ) | |||
Advisor Class | — | (3,520 | ) | |||
R Class | — | (150 | ) | |||
R6 Class | — | (31 | ) | |||
Decrease in net assets from distributions | — | (114,022 | ) | |||
Capital Share Transactions | ||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | 9,489,348 | 9,131,862 | ||||
Net increase (decrease) in net assets | 14,601,902 | 11,597,438 | ||||
Net Assets | ||||||
Beginning of period | 21,600,495 | 10,003,057 | ||||
End of period | $ | 36,202,397 | $ | 21,600,495 | ||
Accumulated net investment loss | $ | (151,753 | ) | $ | (60,570 | ) |
See Notes to Financial Statements.
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Notes to Financial Statements |
JANUARY 31, 2018 (UNAUDITED)
1. Organization
American Century Growth Funds, Inc. (the corporation) is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company and is organized as a Maryland corporation. Focused Dynamic Growth Fund (the fund) is one fund in a series issued by the corporation. The fund’s investment objective is to seek long-term capital growth. The fund offers the Investor Class, I Class, Advisor Class, R Class and R6 Class. Sale of the R6 Class commenced on December 1, 2016.
2. Significant Accounting Policies
The following is a summary of significant accounting policies consistently followed by the fund in preparation of its financial statements. The fund is an investment company and follows accounting and reporting guidance in accordance with accounting principles generally accepted in the United States of America. This may require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from these estimates. Management evaluated the impact of events or transactions occurring through the date the financial statements were issued that would merit recognition or disclosure.
Investment Valuations — The fund determines the fair value of its investments and computes its net asset value per share at the close of regular trading (usually 4 p.m. Eastern time) on the New York Stock Exchange (NYSE) on each day the NYSE is open. The Board of Directors has adopted valuation policies and procedures to guide the investment advisor in the fund’s investment valuation process and to provide methodologies for the oversight of the fund’s pricing function.
Equity securities that are listed or traded on a domestic securities exchange are valued at the last reported sales price or at the official closing price as provided by the exchange. Equity securities traded on foreign securities exchanges are generally valued at the closing price of such securities on the exchange where primarily traded or at the close of the NYSE, if that is earlier. If no last sales price is reported, or if local convention or regulation so provides, the mean of the latest bid and asked prices may be used. Securities traded over-the-counter are valued at the mean of the latest bid and asked prices, the last sales price, or the official closing price. Equity securities initially expressed in local currencies are translated into U.S. dollars at the mean of the appropriate currency exchange rate at the close of the NYSE as provided by an independent pricing service.
Open-end management investment companies are valued at the reported net asset value per share. Repurchase agreements are valued at cost, which approximates fair value.
If the fund determines that the market price for an investment is not readily available or the valuation methods mentioned above do not reflect an investment’s fair value, such investment is valued as determined in good faith by the Board of Directors or its delegate, in accordance with policies and procedures adopted by the Board of Directors. In its determination of fair value, the fund may review several factors including, but not limited to, market information regarding the specific investment or comparable investments and correlation with other investment types, futures indices or general market indicators. Circumstances that may cause the fund to use these procedures to value an investment include, but are not limited to: an investment has been declared in default or is distressed; trading in a security has been suspended during the trading day or a security is not actively trading on its principal exchange; prices received from a regular pricing source are deemed unreliable; or there is a foreign market holiday and no trading occurred.
The fund monitors for significant events occurring after the close of an investment’s primary exchange but before the fund’s net asset value per share is determined. Significant events may include, but are not limited to: corporate announcements and transactions; governmental action and political unrest that could impact a specific investment or an investment sector; or armed conflicts, natural disasters and similar events that could affect investments in a specific country or region. The fund also monitors for significant fluctuations between domestic and foreign markets, as evidenced by the U.S. market or such other indicators that the Board of Directors, or its delegate, deems appropriate. If significant fluctuations in foreign markets are identified, the fund may apply a model-derived factor to the closing price of equity securities traded on foreign securities exchanges. The factor is based on observable market data as provided by an independent pricing service.
11
Security Transactions — Security transactions are accounted for as of the trade date. Net realized gains and losses are determined on the identified cost basis, which is also used for federal income tax purposes.
Investment Income — Dividend income less foreign taxes withheld, if any, is recorded as of the ex-dividend date. Distributions received on securities that represent a return of capital or long-term capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The fund may estimate the components of distributions received that may be considered nontaxable distributions or long-term capital gain distributions for income tax purposes. Interest income is recorded on the accrual basis and includes accretion of discounts and amortization of premiums.
Foreign Currency Translations — All assets and liabilities initially expressed in foreign currencies are translated into U.S. dollars at prevailing exchange rates at period end. The fund may enter into spot foreign currency exchange contracts to facilitate transactions denominated in a foreign currency. Purchases and sales of investment securities, dividend and interest income, spot foreign currency exchange contracts, and expenses are translated at the rates of exchange prevailing on the respective dates of such transactions. Net realized and unrealized foreign currency exchange gains or losses related to investment securities are a component of net realized gain (loss) on investment transactions and change in net unrealized appreciation (depreciation) on investments, respectively.
Repurchase Agreements — The fund may enter into repurchase agreements with institutions that American Century Investment Management, Inc. (ACIM) (the investment advisor) has determined are creditworthy pursuant to criteria adopted by the Board of Directors. The fund requires that the collateral, represented by securities, received in a repurchase transaction be transferred to the custodian in a manner sufficient to enable the fund to obtain those securities in the event of a default under the repurchase agreement. ACIM monitors, on a daily basis, the securities transferred to ensure the value, including accrued interest, of the securities under each repurchase agreement is equal to or greater than amounts owed to the fund under each repurchase agreement.
Joint Trading Account — Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the fund, along with certain other funds in the American Century Investments family of funds, may transfer uninvested cash balances into a joint trading account. These balances are invested in one or more repurchase agreements that are collateralized by U.S. Treasury or Agency obligations.
Income Tax Status — It is the fund’s policy to distribute substantially all net investment income and net realized gains to shareholders and to otherwise qualify as a regulated investment company under provisions of the Internal Revenue Code. Accordingly, no provision has been made for income taxes. The fund files U.S. federal, state, local and non-U.S. tax returns as applicable. The fund's tax returns are subject to examination by the relevant taxing authority until expiration of the applicable statute of limitations, which is generally three years from the date of filing but can be longer in certain jurisdictions. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination and for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Multiple Class — All shares of the fund represent an equal pro rata interest in the net assets of the class to which such shares belong, and have identical voting, dividend, liquidation and other rights and the same terms and conditions, except for class specific expenses and exclusive rights to vote on matters affecting only individual classes. Income, non-class specific expenses, and realized and unrealized capital gains and losses of the fund are allocated to each class of shares based on their relative net assets.
Distributions to Shareholders — Distributions from net investment income and net realized gains, if any, are generally declared and paid annually.
Indemnifications — Under the corporation’s organizational documents, its officers and directors are indemnified against certain liabilities arising out of the performance of their duties to the fund. In addition, in the normal course of business, the fund enters into contracts that provide general indemnifications. The maximum exposure under these arrangements is unknown as this would involve future claims that may be made against a fund. The risk of material loss from such claims is considered by management to be remote.
12
3. Fees and Transactions with Related Parties
Certain officers and directors of the corporation are also officers and/or directors of American Century Companies, Inc. (ACC). The corporation’s investment advisor, ACIM, the corporation's distributor, American Century Investment Services, Inc. (ACIS), and the corporation’s transfer agent, American Century Services, LLC, are wholly owned, directly or indirectly, by ACC.
Management Fees — The corporation has entered into a management agreement with ACIM, under which ACIM provides the fund with investment advisory and management services in exchange for a single, unified management fee (the fee) per class. The agreement provides that all expenses of managing and operating the fund, except distribution and service fees, brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), and extraordinary expenses, will be paid by ACIM. The fee is computed and accrued daily based on each class's daily net assets and paid monthly in arrears. The difference in the fee among the classes is a result of their separate arrangements for non-Rule 12b-1 shareholder services. It is not the result of any difference in advisory or custodial fees or other expenses related to the management of the fund’s assets, which do not vary by class. The rate of the fee is determined by applying a fee rate calculation formula. This formula takes into account the fund’s assets as well as certain assets, if any, of other clients of the investment advisor outside the American Century Investments family of funds (such as subadvised funds and separate accounts) that use very similar investment teams and strategies (strategy assets). During the period ended January 31, 2018, the investment advisor agreed to waive 0.08% of the fund's management fee. The investment advisor expects this waiver to continue until November 30, 2018, and cannot terminate it prior to such date without the approval of the Board of Directors.
The management fee schedule range and the effective annual management fee before and after waiver for each class for the period ended January 31, 2018, are as follows:
Effective Annual Management Fee | |||
Management Fee Schedule Range | Before Waiver | After Waiver | |
Investor Class | 0.80% to 1.10% | 1.10% | 1.02% |
I Class | 0.60% to 0.90% | 0.90% | 0.82% |
Advisor Class | 0.80% to 1.10% | 1.10% | 1.02% |
R Class | 0.80% to 1.10% | 1.10% | 1.02% |
R6 Class | 0.45% to 0.75% | 0.75% | 0.67% |
Distribution and Service Fees — The Board of Directors has adopted a separate Master Distribution and Individual Shareholder Services Plan for each of the R Class and Advisor Class (collectively the plans), pursuant to Rule 12b-1 of the 1940 Act. The plans provide that the R Class will pay ACIS an annual distribution and service fee of 0.50%. The plans provide that the Advisor Class will pay ACIS an annual distribution and service fee of 0.25%. The fees are computed and accrued daily based on each class’s daily net assets and paid monthly in arrears. The fees are used to pay financial intermediaries for distribution and individual shareholder services. Fees incurred under the plans during the period ended January 31, 2018 are detailed in the Statement of Operations.
Directors' Fees and Expenses — The Board of Directors is responsible for overseeing the investment advisor’s management and operations of the fund. The directors receive detailed information about the fund and its investment advisor regularly throughout the year, and meet at least quarterly with management of the investment advisor to review reports about fund operations. The fund’s officers do not receive compensation from the fund.
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the period ended January 31, 2018 were $9,632,527 and $542,756, respectively.
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5. Capital Share Transactions
The corporation is authorized to issue 3,000,000,000 shares. Transactions in shares of the fund were as follows:
Six months ended January 31, 2018 | Year ended July 31, 2017(1) | |||||||||
Shares | Amount | Shares | Amount | |||||||
Investor Class | ||||||||||
Sold | 568,351 | $ | 12,631,960 | 731,261 | $ | 13,488,885 | ||||
Issued in reinvestment of distributions | — | — | 6,349 | 106,341 | ||||||
Redeemed | (168,936 | ) | (3,666,297 | ) | (231,470 | ) | (4,134,952 | ) | ||
399,415 | 8,965,663 | 506,140 | 9,460,274 | |||||||
I Class | ||||||||||
Sold | 23,451 | 510,249 | 5,467 | 106,072 | ||||||
Issued in reinvestment of distributions | — | — | 16 | 262 | ||||||
Redeemed | (6,410 | ) | (140,958 | ) | (761 | ) | (12,883 | ) | ||
17,041 | 369,291 | 4,722 | 93,451 | |||||||
Advisor Class | ||||||||||
Sold | 2,548 | 59,668 | 4,672 | 79,756 | ||||||
Issued in reinvestment of distributions | — | — | 211 | 3,520 | ||||||
Redeemed | (9 | ) | (194 | ) | (13,308 | ) | (239,051 | ) | ||
2,539 | 59,474 | (8,425 | ) | (155,775 | ) | |||||
R Class | ||||||||||
Sold | 5,049 | 109,163 | 5,386 | 97,928 | ||||||
Issued in reinvestment of distributions | — | — | 9 | 150 | ||||||
Redeemed | (672 | ) | (14,243 | ) | (22,736 | ) | (389,197 | ) | ||
4,377 | 94,920 | (17,341 | ) | (291,119 | ) | |||||
R6 Class | ||||||||||
Sold | — | — | 1,508 | 25,000 | ||||||
Issued in reinvestment of distributions | — | — | 2 | 31 | ||||||
— | — | 1,510 | 25,031 | |||||||
Net increase (decrease) | 423,372 | $ | 9,489,348 | 486,606 | $ | 9,131,862 |
(1) December 1, 2016 (commencement of sale) through July 31, 2017 for the R6 Class.
6. Fair Value Measurements
The fund’s investments valuation process is based on several considerations and may use multiple inputs to determine the fair value of the investments held by the fund. In conformity with accounting principles generally accepted in the United States of America, the inputs used to determine a valuation are classified into three broad levels.
• | Level 1 valuation inputs consist of unadjusted quoted prices in an active market for identical investments. |
• | Level 2 valuation inputs consist of direct or indirect observable market data (including quoted prices for comparable investments, evaluations of subsequent market events, interest rates, prepayment speeds, credit risk, etc.). These inputs also consist of quoted prices for identical investments initially expressed in local currencies that are adjusted through translation into U.S. dollars. |
• | Level 3 valuation inputs consist of unobservable data (including a fund’s own assumptions). |
The level classification is based on the lowest level input that is significant to the fair valuation measurement. The valuation inputs are not necessarily an indication of the risks associated with investing in these securities or other financial instruments. There were no significant transfers between levels during the period.
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The following is a summary of the level classifications as of period end. The Schedule of Investments provides additional information on the fund’s portfolio holdings.
Level 1 | Level 2 | Level 3 | ||||||
Assets | ||||||||
Investment Securities | ||||||||
Common Stocks | $ | 33,578,077 | $ | 1,711,457 | — | |||
Temporary Cash Investments | 1,140 | 1,245,547 | — | |||||
$ | 33,579,217 | $ | 2,957,004 | — |
7. Risk Factors
There are certain risks involved in investing in foreign securities. These risks include those resulting from future adverse political, social and economic developments, fluctuations in currency exchange rates, the possible imposition of exchange controls, and other foreign laws or restrictions.
8. Federal Tax Information
The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
As of period end, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $ | 28,224,267 | |
Gross tax appreciation of investments | $ | 8,653,101 | |
Gross tax depreciation of investments | (341,147 | ) | |
Net tax appreciation (depreciation) of investments | $ | 8,311,954 |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales.
As of July 31, 2017, the fund had accumulated short-term capital losses of $(4,789,135), which represent net capital loss carryovers that may be used to offset future realized capital gains for federal income tax purposes. Any unlimited losses will be required to be utilized prior to the losses which carry an expiration date. Future capital loss carryover utilization in any given year may be subject to Internal Revenue Code limitations.
As of July 31, 2017, the fund had late-year ordinary loss deferrals of $(60,312), which represent certain qualified losses that the fund has elected to treat as having been incurred in the following fiscal year for federal income tax purposes.
15
Financial Highlights |
For a Share Outstanding Throughout the Years Ended July 31 (except as noted) | |||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||
Income From Investment Operations: | Ratio to Average Net Assets of: | ||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Distributions From Net Investment Income | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Operating Expenses (before expense waiver) | Net Investment Income (Loss) | Net Investment Income (Loss) (before expense waiver) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
Investor Class | |||||||||||||||
2018(3) | $20.08 | (0.07) | 4.14 | 4.07 | — | $24.15 | 20.27% | 1.03%(4) | 1.11%(4) | (0.67)%(4) | (0.75)%(4) | 2% | $34,872 | ||
2017 | $16.99 | (0.12) | 3.40 | 3.28 | (0.19) | $20.08 | 19.52% | 1.02% | 1.10% | (0.65)% | (0.73)% | 21% | $20,975 | ||
2016 | $17.04 | 0.18 | (0.02) | 0.16 | (0.21) | $16.99 | 1.03% | 1.10% | 1.11% | 1.11% | 1.10% | 250% | $9,147 | ||
2015 | $16.06 | 0.13 | 1.07 | 1.20 | (0.22) | $17.04 | 7.55% | 1.11% | 1.11% | 0.76% | 0.76% | 216% | $12,309 | ||
2014 | $13.61 | 0.22 | 2.37 | 2.59 | (0.14) | $16.06 | 19.16% | 1.10% | 1.10% | 1.46% | 1.46% | 228% | $14,829 | ||
2013 | $11.11 | 0.17 | 2.62 | 2.79 | (0.29) | $13.61 | 25.74% | 1.11% | 1.11% | 1.39% | 1.39% | 253% | $9,897 | ||
I Class | |||||||||||||||
2018(3) | $20.16 | (0.06) | 4.16 | 4.10 | — | $24.26 | 20.34% | 0.83%(4) | 0.91%(4) | (0.47)%(4) | (0.55)%(4) | 2% | $575 | ||
2017 | $17.05 | (0.09) | 3.42 | 3.33 | (0.22) | $20.16 | 19.80% | 0.82% | 0.90% | (0.45)% | (0.53)% | 21% | $134 | ||
2016 | $17.10 | 0.20 | (0.01) | 0.19 | (0.24) | $17.05 | 1.23% | 0.90% | 0.91% | 1.31% | 1.30% | 250% | $33 | ||
2015 | $16.12 | 0.17 | 1.06 | 1.23 | (0.25) | $17.10 | 7.74% | 0.91% | 0.91% | 0.96% | 0.96% | 216% | $33 | ||
2014 | $13.67 | 0.25 | 2.37 | 2.62 | (0.17) | $16.12 | 19.32% | 0.90% | 0.90% | 1.66% | 1.66% | 228% | $18 | ||
2013 | $11.14 | 0.19 | 2.65 | 2.84 | (0.31) | $13.67 | 26.19% | 0.91% | 0.91% | 1.59% | 1.59% | 253% | $15 |
For a Share Outstanding Throughout the Years Ended July 31 (except as noted) | |||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||
Income From Investment Operations: | Ratio to Average Net Assets of: | ||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Distributions From Net Investment Income | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Operating Expenses (before expense waiver) | Net Investment Income (Loss) | Net Investment Income (Loss) (before expense waiver) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
Advisor Class | |||||||||||||||
2018(3) | $19.95 | (0.10) | 4.11 | 4.01 | — | $23.96 | 20.10% | 1.28%(4) | 1.36%(4) | (0.92)%(4) | (1.00)%(4) | 2% | $497 | ||
2017 | $16.88 | (0.16) | 3.38 | 3.22 | (0.15) | $19.95 | 19.22% | 1.27% | 1.35% | (0.90)% | (0.98)% | 21% | $363 | ||
2016 | $16.92 | 0.13 | —(5) | 0.13 | (0.17) | $16.88 | 0.85% | 1.35% | 1.36% | 0.86% | 0.85% | 250% | $449 | ||
2015 | $15.95 | 0.09 | 1.06 | 1.15 | (0.18) | $16.92 | 7.26% | 1.36% | 1.36% | 0.51% | 0.51% | 216% | $602 | ||
2014 | $13.53 | 0.16 | 2.37 | 2.53 | (0.11) | $15.95 | 18.75% | 1.35% | 1.35% | 1.21% | 1.21% | 228% | $664 | ||
2013 | $11.03 | 0.14 | 2.62 | 2.76 | (0.26) | $13.53 | 25.62% | 1.36% | 1.36% | 1.14% | 1.14% | 253% | $191 | ||
R Class | |||||||||||||||
2018(3) | $19.81 | (0.13) | 4.08 | 3.95 | — | $23.76 | 19.94% | 1.53%(4) | 1.61%(4) | (1.17)%(4) | (1.25)%(4) | 2% | $221 | ||
2017 | $16.76 | (0.18) | 3.33 | 3.15 | (0.10) | $19.81 | 18.94% | 1.52% | 1.60% | (1.15)% | (1.23)% | 21% | $98 | ||
2016 | $16.81 | 0.09 | (0.01) | 0.08 | (0.13) | $16.76 | 0.54% | 1.60% | 1.61% | 0.61% | 0.60% | 250% | $374 | ||
2015 | $15.84 | 0.04 | 1.07 | 1.11 | (0.14) | $16.81 | 7.04% | 1.61% | 1.61% | 0.26% | 0.26% | 216% | $510 | ||
2014 | $13.43 | 0.06 | 2.42 | 2.48 | (0.07) | $15.84 | 18.51% | 1.60% | 1.60% | 0.96% | 0.96% | 228% | $423 | ||
2013 | $10.96 | 0.11 | 2.60 | 2.71 | (0.24) | $13.43 | 25.20% | 1.61% | 1.61% | 0.89% | 0.89% | 253% | $19 | ||
R6 Class | |||||||||||||||
2018(3) | $20.41 | (0.03) | 4.21 | 4.18 | — | $24.59 | 20.53% | 0.68%(4) | 0.76%(4) | (0.32)%(4) | (0.40)%(4) | 2% | $37 | ||
2017(6) | $16.58 | (0.04) | 3.89 | 3.85 | (0.02) | $20.41 | 23.25% | 0.67%(4) | 0.75%(4) | (0.34)%(4) | (0.42)%(4) | 21%(7) | $31 |
Notes to Financial Highlights |
(1) | Computed using average shares outstanding throughout the period. |
(2) | Total returns are calculated based on the net asset value of the last business day. Total returns for periods less than one year are not annualized. |
(3) | Six months ended January 31, 2018 (unaudited). |
(4) | Annualized. |
(5) | Per share amount was less than $0.005. |
(6) | December 1, 2016 (commencement of sale) through July 31, 2017. |
(7) | Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended July 31, 2017. |
See Notes to Financial Statements.
Proxy Voting Results |
A special meeting of shareholders was held on October 18, 2017, to vote on the following proposal. The proposal received the required votes and was adopted. A summary of voting results is listed below.
To elect four directors to the Board of Directors of American Century Growth Funds, Inc.:
Affirmative | Withhold | ||||||
Thomas W. Bunn | $ | 91,289,412 | $ | 1,678,991 | |||
Barry Fink | $ | 91,251,000 | $ | 1,717,403 | |||
Jan M. Lewis | $ | 91,297,912 | $ | 1,670,491 | |||
Stephen E. Yates | $ | 91,202,473 | $ | 1,765,930 |
The other directors whose term of office continued after the meeting include Jonathan S. Thomas, Andrea C. Hall, James A. Olson, M. Jeannine Strandjord, and John R. Whitten.
19
Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain retirement accounts are subject to federal income tax withholding, unless you elect not to have withholding apply*. Tax will be withheld on the total amount withdrawn even though you may be receiving amounts that are not subject to withholding, such as nondeductible contributions. In such case, excess amounts of withholding could occur. You may adjust your withholding election so that a greater or lesser amount will be withheld.
If you don’t want us to withhold on this amount, you must notify us to not withhold the federal income tax. You may notify us in writing or in certain situations by telephone or through other electronic means. For systematic withdrawals, your withholding election will remain in effect until revoked or changed by filing a new election. You have the right to revoke your election at any time and change your withholding percentage for future distributions.
Remember, even if you elect not to have income tax withheld, you are liable for paying income tax on the taxable portion of your withdrawal. If you elect not to have income tax withheld or you don’t have enough income tax withheld, you may be responsible for payment of estimated tax. You may incur penalties under the estimated tax rules if your withholding and estimated tax payments are not sufficient. You can reduce or defer the income tax on a distribution by directly or indirectly rolling such distribution over to another IRA or eligible plan. You should consult your tax advisor for additional information.
State tax will be withheld if, at the time of your distribution, your address is within one of the mandatory withholding states and you have federal income tax withheld (or as otherwise required by state law). State taxes will be withheld from your distribution in accordance with the respective state rules.
*Some 403(b), 457 and qualified retirement plan distributions may be subject to 20% mandatory withholding, as they are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
A description of the policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund is available without charge, upon request, by calling 1-800-345-2021. It is also available on the "About Us" page of American Century Investments’ 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 fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-Q. The fund’s 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 fund also makes its complete schedule of portfolio holdings for the most recent quarter of its fiscal year available on its website at americancentury.com and, upon request, by calling 1-800-345-2021.
20
Contact Us | americancentury.com | |
Automated Information Line | 1-800-345-8765 | |
Investor Services Representative | 1-800-345-2021 or 816-531-5575 | |
Investors Using Advisors | 1-800-378-9878 | |
Business, Not-For-Profit, Employer-Sponsored Retirement Plans | 1-800-345-3533 | |
Banks and Trust Companies, Broker-Dealers, Financial Professionals, Insurance Companies | 1-800-345-6488 | |
Telecommunications Relay Service for the Deaf | 711 | |
American Century Growth Funds, Inc. | ||
Investment Advisor: American Century Investment Management, Inc. Kansas City, Missouri | ||
This report and the statements it contains are submitted for the general information of our shareholders. The report is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus. | ||
©2018 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-91636 1803 |
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. INVESTMENTS.
(a) | The schedule of investments is included as part of the report to stockholders filed under Item 1 of this Form. |
(b) | Not applicable. |
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
During the reporting period, there were no material changes to the procedures by which shareholders may recommend nominees to the registrant’s board.
ITEM 11. CONTROLS AND PROCEDURES.
(a) | The registrant's principal executive officer and principal financial officer have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) are effective based on their evaluation of these controls and procedures as of a date within 90 days of the filing date of this report. |
(b) | There were no changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant's internal control over financial reporting. |
ITEM 12. DISCLOSURE OF SECURITIES LENDING ACTIVITIES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 13. EXHIBITS.
(a)(1) | Not applicable for semiannual report filings. |
(a)(2) | Separate certifications by the registrant’s principal executive officer and principal financial officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 and Rule 30a-2(a) under the Investment Company Act of 1940, are filed and attached hereto as EX-99.CERT. |
(a)(3) | Not applicable. |
(b) | A certification by the registrant’s chief executive officer and chief financial officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, is furnished and attached hereto as EX- 99.906CERT. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Registrant: | American Century Growth Funds, Inc. | |||
By: | /s/ Jonathan S. Thomas | |||
Name: | Jonathan S. Thomas | |||
Title: | President | |||
Date: | March 27, 2018 | |||
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 27, 2018 |
By: | /s/ C. Jean Wade | ||
Name: | C. Jean Wade | ||
Title: | Vice President, Treasurer, and | ||
Chief Financial Officer | |||
(principal financial officer) | |||
Date: | March 27, 2018 |