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 | 811-05447 | |||||
AMERICAN CENTURY QUANTITATIVE EQUITY 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: | 06-30 | |||||
Date of reporting period: | 12-31-2018 |
ITEM 1. REPORTS TO STOCKHOLDERS.
SEMIANNUAL REPORT | |
DECEMBER 31, 2018 | |
AC Alternatives® Disciplined Long Short Fund |
Investor Class (ACDJX) |
I Class (ACDKX) |
A Class (ACDQX) |
C Class (ACDHX) |
R Class (ACDWX) |
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the fund’s shareholder reports like this one will no longer be sent by mail, unless you specifically request paper copies of the reports from the fund or from your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the fund or your financial intermediary electronically by calling or sending an email request to your appropriate contacts as listed on the back cover of this report.
You may elect to receive all future reports in paper free of charge. You can inform the fund or your financial intermediary that you wish to continue receiving paper copies of your shareholder reports by calling or sending an email request to your appropriate contacts as listed on the back cover of this report. Your election to receive reports in paper will apply to all funds held with the fund complex/your financial intermediary.
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 period ended December 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, please visit our website, americancentury.com.
Risk-On/Risk-Off Rotation Highlights Heightened Volatility
The six-month reporting period began on an upbeat note for stock investors. Against a backdrop of robust economic and earnings data and federal tax and regulatory reform, U.S. stocks soared. The S&P 500 Index gained nearly 8% in the first three months of the period. Outside the U.S., stocks also advanced, but the gains were more subdued amid signs of slowing growth. Meanwhile, favorable U.S. economic data and continued Federal Reserve (Fed) tightening helped push U.S. Treasury yields higher. This pressured interest rate-sensitive assets, including longer-maturity Treasuries, gold, utilities stocks, and REITs (real estate investment trusts), and they generally underperformed U.S. stocks.
In the second half of the reporting period, investor sentiment and asset-class performance took a drastic turn. Investors exited stocks on mounting concerns about slowing global economic and earnings growth and Fed policy. Along with its December interest rate increase, the Fed delivered a surprisingly bullish outlook. Investors feared the Fed’s plans for two rate hikes in 2019 were too aggressive, further fueling the steep sell-off among riskier assets. The S&P 500 Index declined more than 13% in the fourth quarter. For the entire six-month period, U.S. stocks fell 6.85%. Losses among non-U.S. stocks were even steeper.
The risk-off climate in the second half of the period sparked a flight to quality. Treasury yields plunged in the fourth quarter, triggering a year-end rally in Treasuries and other perceived safe-haven assets. Overall, Treasuries were up for the six-month period and significantly outperformed stocks and other riskier assets.
As recent performance trends indicate, market volatility remains a formidable force. But volatile markets often produce the most compelling investment opportunities. We believe this scenario underscores the importance of 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 |
DECEMBER 31, 2018 | |
Top Ten Long Holdings | % of net assets |
Alphabet, Inc.* | 2.40% |
Republic Services, Inc. | 1.84% |
Comerica, Inc. | 1.70% |
United Community Banks, Inc. | 1.68% |
Amazon.com, Inc. | 1.67% |
PS Business Parks, Inc. | 1.67% |
Visa, Inc., Class A | 1.65% |
UnitedHealth Group, Inc. | 1.65% |
Apple, Inc. | 1.62% |
Microsoft Corp. | 1.62% |
*Includes all classes of the issuer held by the fund. | |
Top Five Short Holdings | % of net assets |
Alexandria Real Estate Equities, Inc. | (1.34)% |
Pinnacle Financial Partners, Inc. | (1.29)% |
Old Line Bancshares, Inc. | (1.19)% |
Worldpay, Inc., Class A | (1.03)% |
Gartner, Inc. | (1.01)% |
Types of Investments in Portfolio | % of net assets |
Common Stocks | 99.4% |
Common Stocks Sold Short | (52.7)% |
Temporary Cash Investments | 53.5% |
Other Assets and Liabilities | (0.2)% |
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 July 1, 2018 to December 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 7/1/18 | Ending Account Value 12/31/18 | Expenses Paid During Period(1) 7/1/18 - 12/31/18 | Annualized Expense Ratio(1) | |
Actual | ||||
Investor Class | $1,000 | $964.40 | $11.98 | 2.42% |
I Class | $1,000 | $965.00 | $11.00 | 2.22% |
A Class | $1,000 | $963.40 | $13.21 | 2.67% |
C Class | $1,000 | $959.70 | $16.89 | 3.42% |
R Class | $1,000 | $961.70 | $14.44 | 2.92% |
Hypothetical | ||||
Investor Class | $1,000 | $1,013.01 | $12.28 | 2.42% |
I Class | $1,000 | $1,014.01 | $11.27 | 2.22% |
A Class | $1,000 | $1,011.75 | $13.54 | 2.67% |
C Class | $1,000 | $1,007.97 | $17.31 | 3.42% |
R Class | $1,000 | $1,010.49 | $14.80 | 2.92% |
(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 |
DECEMBER 31, 2018 (UNAUDITED)
Shares | Value | ||||
COMMON STOCKS — 99.4% | |||||
Aerospace and Defense — 3.1% | |||||
Boeing Co. (The)(1) | 2,190 | $ | 706,275 | ||
Curtiss-Wright Corp. | 449 | 45,852 | |||
Raytheon Co.(1) | 3,023 | 463,577 | |||
Textron, Inc.(1) | 5,000 | 229,950 | |||
1,445,654 | |||||
Air Freight and Logistics — 0.3% | |||||
CH Robinson Worldwide, Inc. | 1,846 | 155,230 | |||
Banks — 8.5% | |||||
Central Pacific Financial Corp.(1) | 28,811 | 701,548 | |||
Comerica, Inc.(1) | 11,515 | 790,965 | |||
East West Bancorp, Inc. | 2,663 | 115,921 | |||
First Financial Northwest, Inc.(1) | 17,196 | 266,022 | |||
Hanmi Financial Corp. | 4,138 | 81,519 | |||
Independent Bank Corp.(1) | 28,815 | 605,691 | |||
Pacific City Financial Corp. | 8,909 | 139,426 | |||
SVB Financial Group(2) | 685 | 130,095 | |||
United Community Banks, Inc.(1) | 36,420 | 781,573 | |||
West Bancorporation, Inc.(1) | 19,389 | 370,136 | |||
3,982,896 | |||||
Beverages — 0.9% | |||||
Coca-Cola Co. (The)(1) | 4,724 | 223,681 | |||
PepsiCo, Inc.(1) | 1,952 | 215,657 | |||
439,338 | |||||
Biotechnology — 4.8% | |||||
AbbVie, Inc. | 2,055 | 189,450 | |||
Acorda Therapeutics, Inc.(2) | 5,801 | 90,380 | |||
Alexion Pharmaceuticals, Inc.(2) | 1,257 | 122,382 | |||
Amgen, Inc.(1) | 1,892 | 368,316 | |||
Biogen, Inc.(1)(2) | 1,157 | 348,164 | |||
Celgene Corp.(2) | 2,684 | 172,018 | |||
Emergent BioSolutions, Inc.(2) | 1,368 | 81,095 | |||
Genomic Health, Inc.(2) | 1,984 | 127,789 | |||
Halozyme Therapeutics, Inc.(2) | 8,240 | 120,551 | |||
Incyte Corp.(2) | 3,046 | 193,695 | |||
Inovio Pharmaceuticals, Inc.(2) | 14,717 | 58,868 | |||
Jounce Therapeutics, Inc.(2) | 7,224 | 24,345 | |||
Pfenex, Inc.(2) | 9,368 | 29,884 | |||
Puma Biotechnology, Inc.(2) | 2,520 | 51,282 | |||
Veracyte, Inc.(2) | 3,136 | 39,451 | |||
Vertex Pharmaceuticals, Inc.(1)(2) | 1,297 | 214,926 | |||
2,232,596 | |||||
Building Products — 0.4% | |||||
Armstrong World Industries, Inc.(1) | 3,186 | 185,457 | |||
Capital Markets — 1.7% | |||||
Interactive Brokers Group, Inc., Class A | 2,943 | 160,835 |
6
Shares | Value | ||||
LPL Financial Holdings, Inc.(1) | 5,556 | $ | 339,360 | ||
SEI Investments Co. | 3,655 | 168,861 | |||
Silvercrest Asset Management Group, Inc., Class A | 7,652 | 101,236 | |||
770,292 | |||||
Chemicals — 0.9% | |||||
AdvanSix, Inc.(2) | 4,945 | 120,361 | |||
Kraton Corp.(2) | 1,605 | 35,053 | |||
Scotts Miracle-Gro Co. (The) | 1,074 | 66,008 | |||
Sherwin-Williams Co. (The)(1) | 565 | 222,305 | |||
443,727 | |||||
Commercial Services and Supplies — 3.5% | |||||
McGrath RentCorp | 1,981 | 101,982 | |||
MSA Safety, Inc.(1) | 2,879 | 271,403 | |||
Republic Services, Inc.(1) | 11,864 | 855,276 | |||
Waste Management, Inc.(1) | 4,333 | 385,594 | |||
1,614,255 | |||||
Communications Equipment — 0.3% | |||||
Arista Networks, Inc.(2) | 387 | 81,541 | |||
Quantenna Communications, Inc.(2) | 3,918 | 56,223 | |||
137,764 | |||||
Construction and Engineering — 0.9% | |||||
EMCOR Group, Inc.(1) | 7,247 | 432,573 | |||
Consumer Finance — 3.0% | |||||
American Express Co.(1) | 5,666 | 540,083 | |||
Capital One Financial Corp.(1) | 2,485 | 187,841 | |||
Discover Financial Services(1) | 5,306 | 312,948 | |||
Enova International, Inc.(2) | 2,641 | 51,394 | |||
Green Dot Corp., Class A(2) | 1,840 | 146,317 | |||
Regional Management Corp.(2) | 2,039 | 49,038 | |||
Synchrony Financial | 4,359 | 102,262 | |||
1,389,883 | |||||
Containers and Packaging — 0.3% | |||||
International Paper Co. | 770 | 31,077 | |||
Sealed Air Corp. | 2,962 | 103,196 | |||
134,273 | |||||
Distributors — 0.2% | |||||
Core-Mark Holding Co., Inc. | 4,236 | 98,487 | |||
Diversified Financial Services — 0.2% | |||||
Marlin Business Services Corp. | 1,403 | 31,329 | |||
On Deck Capital, Inc.(2) | 8,708 | 51,377 | |||
82,706 | |||||
Diversified Telecommunication Services — 0.2% | |||||
Cogent Communications Holdings, Inc. | 669 | 30,245 | |||
Ooma, Inc.(2) | 5,376 | 74,619 | |||
104,864 | |||||
Electrical Equipment — 0.9% | |||||
Atkore International Group, Inc.(2) | 1,574 | 31,228 | |||
Generac Holdings, Inc.(1)(2) | 5,570 | 276,829 | |||
Rockwell Automation, Inc. | 794 | 119,481 | |||
427,538 |
7
Shares | Value | ||||
Electronic Equipment, Instruments and Components — 2.3% | |||||
CDW Corp. | 2,375 | $ | 192,494 | ||
FLIR Systems, Inc. | 3,268 | 142,289 | |||
National Instruments Corp.(1) | 9,020 | 409,327 | |||
OSI Systems, Inc.(2) | 443 | 32,472 | |||
Zebra Technologies Corp., Class A(1)(2) | 1,936 | 308,269 | |||
1,084,851 | |||||
Energy Equipment and Services — 0.8% | |||||
Halliburton Co.(1) | 14,396 | 382,646 | |||
Entertainment — 0.2% | |||||
Electronic Arts, Inc.(2) | 1,159 | 91,457 | |||
Equity Real Estate Investment Trusts (REITs) — 4.8% | |||||
Americold Realty Trust(1) | 17,505 | 447,078 | |||
CoreSite Realty Corp.(1) | 3,060 | 266,924 | |||
GEO Group, Inc. (The)(1) | 25,582 | 503,965 | |||
PS Business Parks, Inc.(1) | 5,924 | 776,044 | |||
Ryman Hospitality Properties, Inc. | 431 | 28,743 | |||
Tanger Factory Outlet Centers, Inc.(1) | 11,540 | 233,339 | |||
2,256,093 | |||||
Food and Staples Retailing — 0.5% | |||||
Performance Food Group Co.(2) | 794 | 25,622 | |||
US Foods Holding Corp.(1)(2) | 5,926 | 187,499 | |||
213,121 | |||||
Food Products — 0.1% | |||||
Limoneira Co. | 2,790 | 54,545 | |||
Health Care Equipment and Supplies — 3.8% | |||||
Cardiovascular Systems, Inc.(2) | 2,819 | 80,313 | |||
CONMED Corp.(1) | 3,587 | 230,285 | |||
DexCom, Inc.(2) | 235 | 28,153 | |||
GenMark Diagnostics, Inc.(2) | 5,662 | 27,517 | |||
Globus Medical, Inc., Class A(1)(2) | 6,863 | 297,031 | |||
Haemonetics Corp.(2) | 1,629 | 162,982 | |||
Hill-Rom Holdings, Inc. | 429 | 37,988 | |||
ICU Medical, Inc.(1)(2) | 1,282 | 294,386 | |||
Integer Holdings Corp.(1)(2) | 3,223 | 245,786 | |||
Masimo Corp.(2) | 826 | 88,688 | |||
NuVasive, Inc.(2) | 3,747 | 185,701 | |||
OraSure Technologies, Inc.(2) | 2,591 | 30,263 | |||
Orthofix Medical, Inc.(2) | 421 | 22,098 | |||
STAAR Surgical Co.(2) | 1,885 | 60,150 | |||
1,791,341 | |||||
Health Care Providers and Services — 2.3% | |||||
Amedisys, Inc.(2) | 673 | 78,815 | |||
CorVel Corp.(2) | 1,224 | 75,545 | |||
Ensign Group, Inc. (The) | 1,951 | 75,679 | |||
HCA Healthcare, Inc. | 378 | 47,042 | |||
Tenet Healthcare Corp.(2) | 1,203 | 20,620 | |||
UnitedHealth Group, Inc.(1) | 3,080 | 767,290 | |||
1,064,991 | |||||
Health Care Technology — 0.4% | |||||
athenahealth, Inc.(2) | 205 | 27,046 |
8
Shares | Value | ||||
Computer Programs & Systems, Inc. | 2,515 | $ | 63,126 | ||
HealthStream, Inc. | 4,175 | 100,826 | |||
190,998 | |||||
Hotels, Restaurants and Leisure — 2.7% | |||||
BJ's Restaurants, Inc. | 792 | 40,051 | |||
Bloomin' Brands, Inc. | 1,247 | 22,309 | |||
Darden Restaurants, Inc. | 1,409 | 140,703 | |||
Extended Stay America, Inc.(1) | 25,164 | 390,042 | |||
Nathan's Famous, Inc. | 969 | 64,390 | |||
Ruth's Hospitality Group, Inc. | 4,705 | 106,945 | |||
Starbucks Corp. | 3,523 | 226,881 | |||
Texas Roadhouse, Inc.(1) | 3,543 | 211,517 | |||
Town Sports International Holdings, Inc.(2) | 6,125 | 39,200 | |||
1,242,038 | |||||
Household Durables — 1.6% | |||||
KB Home(1) | 9,847 | 188,078 | |||
NVR, Inc.(2) | 50 | 121,850 | |||
PulteGroup, Inc.(1) | 11,775 | 306,032 | |||
Toll Brothers, Inc. | 3,868 | 127,373 | |||
743,333 | |||||
Insurance — 3.1% | |||||
Primerica, Inc. | 1,861 | 181,839 | |||
Progressive Corp. (The)(1) | 11,888 | 717,203 | |||
Travelers Cos., Inc. (The)(1) | 4,455 | 533,486 | |||
1,432,528 | |||||
Interactive Media and Services — 4.0% | |||||
Alphabet, Inc., Class C(1)(2) | 757 | 783,957 | |||
Alphabet, Inc., Class A(2) | 321 | 335,432 | |||
Care.com, Inc.(2) | 6,975 | 134,687 | |||
Facebook, Inc., Class A(1)(2) | 4,657 | 610,486 | |||
1,864,562 | |||||
Internet and Direct Marketing Retail — 2.4% | |||||
Amazon.com, Inc.(1)(2) | 518 | 778,020 | |||
eBay, Inc.(1)(2) | 6,403 | 179,732 | |||
Nutrisystem, Inc. | 2,662 | 116,809 | |||
PetMed Express, Inc. | 1,879 | 43,706 | |||
1,118,267 | |||||
IT Services — 3.4% | |||||
Accenture plc, Class A | 785 | 110,693 | |||
Akamai Technologies, Inc.(2) | 448 | 27,364 | |||
Booz Allen Hamilton Holding Corp. | 3,257 | 146,793 | |||
Carbonite, Inc.(2) | 1,196 | 30,211 | |||
Endurance International Group Holdings, Inc.(2) | 8,830 | 58,720 | |||
EVERTEC, Inc. | 2,392 | 68,650 | |||
Fidelity National Information Services, Inc.(1) | 1,990 | 204,074 | |||
MAXIMUS, Inc. | 1,403 | 91,321 | |||
PayPal Holdings, Inc.(2) | 669 | 56,256 | |||
Visa, Inc., Class A(1) | 5,817 | 767,495 | |||
1,561,577 | |||||
Leisure Products — 0.2% | |||||
Callaway Golf Co. | 1,444 | 22,093 |
9
Shares | Value | ||||
MasterCraft Boat Holdings, Inc.(2) | 2,889 | $ | 54,025 | ||
76,118 | |||||
Life Sciences Tools and Services — 1.1% | |||||
Fluidigm Corp.(2) | 4,066 | 35,049 | |||
Medpace Holdings, Inc.(2) | 686 | 36,310 | |||
Thermo Fisher Scientific, Inc.(1) | 2,021 | 452,279 | |||
523,638 | |||||
Machinery — 1.0% | |||||
Global Brass & Copper Holdings, Inc. | 4,419 | 111,138 | |||
Graham Corp. | 2,703 | 61,737 | |||
Harsco Corp.(2) | 5,915 | 117,472 | |||
Parker-Hannifin Corp. | 1,131 | 168,677 | |||
459,024 | |||||
Media — 0.9% | |||||
Cable One, Inc.(1) | 365 | 299,337 | |||
Emerald Expositions Events, Inc. | 9,104 | 112,343 | |||
411,680 | |||||
Metals and Mining — 0.8% | |||||
Compass Minerals International, Inc. | 2,018 | 84,130 | |||
Steel Dynamics, Inc.(1) | 10,040 | 301,602 | |||
385,732 | |||||
Oil, Gas and Consumable Fuels — 2.4% | |||||
Continental Resources, Inc.(1)(2) | 5,748 | 231,012 | |||
CVR Energy, Inc.(1) | 6,536 | 225,361 | |||
Delek US Holdings, Inc. | 613 | 19,929 | |||
EOG Resources, Inc.(1) | 4,483 | 390,962 | |||
Evolution Petroleum Corp.(1) | 29,075 | 198,291 | |||
Isramco, Inc.(2) | 249 | 29,507 | |||
Renewable Energy Group, Inc.(2) | 890 | 22,873 | |||
1,117,935 | |||||
Paper and Forest Products — 0.1% | |||||
Louisiana-Pacific Corp. | 1,784 | 39,640 | |||
Personal Products† | |||||
elf Beauty, Inc.(2) | 2,495 | 21,607 | |||
Pharmaceuticals — 3.4% | |||||
Allergan plc(1) | 1,927 | 257,563 | |||
Bristol-Myers Squibb Co. | 6,241 | 324,407 | |||
Eli Lilly & Co.(1) | 3,853 | 445,869 | |||
Horizon Pharma plc(2) | 6,271 | 122,535 | |||
Innoviva, Inc.(2) | 1,342 | 23,418 | |||
Johnson & Johnson | 239 | 30,843 | |||
Phibro Animal Health Corp., Class A | 1,685 | 54,190 | |||
Zoetis, Inc.(1) | 3,718 | 318,038 | |||
1,576,863 | |||||
Professional Services — 2.1% | |||||
BG Staffing, Inc. | 1,316 | 27,175 | |||
CoStar Group, Inc.(2) | 459 | 154,839 | |||
Heidrick & Struggles International, Inc. | 1,468 | 45,787 | |||
Insperity, Inc. | 481 | 44,906 | |||
Kforce, Inc. | 3,233 | 99,964 | |||
Korn/Ferry International | 2,035 | 80,464 |
10
Shares | Value | ||||
Robert Half International, Inc.(1) | 8,397 | $ | 480,309 | ||
TrueBlue, Inc.(2) | 1,957 | 43,543 | |||
976,987 | |||||
Road and Rail — 0.9% | |||||
ArcBest Corp. | 4,500 | 154,170 | |||
CSX Corp.(1) | 3,220 | 200,059 | |||
Schneider National, Inc., Class B | 1,421 | 26,530 | |||
YRC Worldwide, Inc.(2) | 7,329 | 23,086 | |||
403,845 | |||||
Semiconductors and Semiconductor Equipment — 3.3% | |||||
Aquantia Corp.(2) | 6,867 | 60,224 | |||
Cabot Microelectronics Corp.(1) | 2,424 | 231,129 | |||
Cirrus Logic, Inc.(2) | 2,305 | 76,480 | |||
Cypress Semiconductor Corp. | 2,235 | 28,429 | |||
Inphi Corp.(2) | 941 | 30,253 | |||
Intel Corp.(1) | 11,083 | 520,125 | |||
Lattice Semiconductor Corp.(2) | 9,585 | 66,328 | |||
Nanometrics, Inc.(2) | 1,966 | 53,731 | |||
ON Semiconductor Corp.(1)(2) | 16,600 | 274,066 | |||
Qorvo, Inc.(2) | 832 | 50,527 | |||
Xilinx, Inc. | 1,567 | 133,461 | |||
1,524,753 | |||||
Software — 8.8% | |||||
A10 Networks, Inc.(2) | 11,773 | 73,463 | |||
Adobe, Inc.(1)(2) | 1,783 | 403,386 | |||
Amber Road, Inc.(2) | 6,130 | 50,450 | |||
Box, Inc., Class A(2) | 4,712 | 79,539 | |||
Cadence Design Systems, Inc.(1)(2) | 5,914 | 257,141 | |||
Cornerstone OnDemand, Inc.(2) | 2,327 | 117,351 | |||
Intuit, Inc. | 826 | 162,598 | |||
LogMeIn, Inc. | 857 | 69,905 | |||
Microsoft Corp.(1) | 7,416 | 753,243 | |||
Model N, Inc.(2) | 3,385 | 44,783 | |||
Oracle Corp. (New York) | 4,758 | 214,824 | |||
Palo Alto Networks, Inc.(2) | 571 | 107,548 | |||
Paylocity Holding Corp.(2) | 816 | 49,131 | |||
Progress Software Corp. | 4,920 | 174,611 | |||
Proofpoint, Inc.(2) | 627 | 52,549 | |||
salesforce.com, Inc.(2) | 2,197 | 300,923 | |||
Tableau Software, Inc., Class A(2) | 686 | 82,320 | |||
Teradata Corp.(1)(2) | 6,859 | 263,111 | |||
Ultimate Software Group, Inc. (The)(2) | 773 | 189,284 | |||
Verint Systems, Inc.(1)(2) | 4,344 | 183,795 | |||
VMware, Inc., Class A(1) | 3,093 | 424,143 | |||
Zix Corp.(2) | 3,957 | 22,674 | |||
4,076,772 | |||||
Specialty Retail — 2.7% | |||||
AutoZone, Inc.(1)(2) | 578 | 484,561 | |||
Burlington Stores, Inc.(2) | 278 | 45,222 | |||
Conn's, Inc.(2) | 1,507 | 28,422 | |||
MarineMax, Inc.(2) | 3,211 | 58,793 |
11
Shares | Value | ||||
O'Reilly Automotive, Inc.(1)(2) | 811 | $ | 279,252 | ||
Ross Stores, Inc.(1) | 3,615 | 300,768 | |||
Ulta Beauty, Inc.(2) | 122 | 29,871 | |||
Urban Outfitters, Inc.(2) | 741 | 24,601 | |||
1,251,490 | |||||
Technology Hardware, Storage and Peripherals — 1.8% | |||||
Apple, Inc.(1) | 4,782 | 754,313 | |||
NetApp, Inc. | 1,773 | 105,795 | |||
860,108 | |||||
Textiles, Apparel and Luxury Goods — 2.2% | |||||
Columbia Sportswear Co.(1) | 2,042 | 171,712 | |||
Deckers Outdoor Corp.(1)(2) | 3,896 | 498,493 | |||
Movado Group, Inc. | 1,141 | 36,078 | |||
Oxford Industries, Inc. | 1,349 | 95,833 | |||
Tapestry, Inc.(1) | 6,720 | 226,800 | |||
1,028,916 | |||||
Thrifts and Mortgage Finance — 2.8% | |||||
Essent Group Ltd.(1)(2) | 8,486 | 290,052 | |||
FS Bancorp, Inc. | 3,488 | 149,565 | |||
Luther Burbank Corp.(1) | 41,449 | 373,870 | |||
NMI Holdings, Inc., Class A(2) | 4,123 | 73,596 | |||
Sterling Bancorp, Inc.(1) | 39,158 | 272,148 | |||
Walker & Dunlop, Inc. | 3,073 | 132,907 | |||
1,292,138 | |||||
Tobacco — 0.3% | |||||
Altria Group, Inc. | 2,889 | 142,688 | |||
Trading Companies and Distributors — 1.7% | |||||
HD Supply Holdings, Inc.(1)(2) | 13,935 | 522,841 | |||
W.W. Grainger, Inc.(1) | 943 | 266,266 | |||
789,107 | |||||
Wireless Telecommunication Services — 0.4% | |||||
Boingo Wireless, Inc.(2) | 1,378 | 28,345 | |||
Shenandoah Telecommunications Co. | 3,626 | 160,451 | |||
188,796 | |||||
TOTAL COMMON STOCKS (Cost $47,092,932) | 46,317,718 | ||||
TEMPORARY CASH INVESTMENTS — 53.5% | |||||
Repurchase Agreement, BMO Capital Markets Corp., (collateralized by various U.S. Treasury obligations, 0.125% - 2.75%, 10/31/19 - 2/15/44, valued at $21,764,327), in a joint trading account at 2.45%, dated 12/31/18, due 1/2/19 (Delivery value $21,343,261) | 21,340,356 | ||||
Repurchase Agreement, Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 3.375%, 11/15/48, valued at $3,634,025), at 1.25%, dated 12/31/18, due 1/2/19 (Delivery value $3,562,247) | 3,562,000 | ||||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $24,902,356) | 24,902,356 | ||||
TOTAL INVESTMENT SECURITIES BEFORE SECURITIES SOLD SHORT — 152.9% (Cost $71,995,288) | 71,220,074 | ||||
COMMON STOCKS SOLD SHORT — (52.7)% | |||||
Aerospace and Defense — (1.2)% | |||||
BWX Technologies, Inc. | (7,943 | ) | (303,661 | ) | |
Mercury Systems, Inc. | (3,026 | ) | (143,099 | ) | |
12
Shares | Value | ||||
Spirit Aerosystems Holdings, Inc., Class A | (1,540 | ) | $ | (111,019 | ) |
(557,779 | ) | ||||
Airlines — (0.1)% | |||||
Allegiant Travel Co. | (580 | ) | (58,128 | ) | |
Auto Components — (0.4)% | |||||
LCI Industries | (611 | ) | (40,815 | ) | |
Lear Corp. | (1,078 | ) | (132,443 | ) | |
(173,258 | ) | ||||
Banks — (8.4)% | |||||
Allegiance Bancshares, Inc. | (7,947 | ) | (257,244 | ) | |
Ameris Bancorp | (4,418 | ) | (139,918 | ) | |
Blue Hills Bancorp, Inc. | (18,154 | ) | (387,406 | ) | |
Equity Bancshares, Inc., Class A | (12,278 | ) | (432,800 | ) | |
Glacier Bancorp, Inc. | (4,596 | ) | (182,094 | ) | |
HarborOne Bancorp, Inc. | (19,118 | ) | (303,785 | ) | |
Home BancShares, Inc. | (19,816 | ) | (323,793 | ) | |
Howard Bancorp, Inc. | (18,242 | ) | (260,861 | ) | |
Old Line Bancshares, Inc. | (21,028 | ) | (553,457 | ) | |
Origin Bancorp, Inc. | (1,231 | ) | (41,952 | ) | |
Pinnacle Financial Partners, Inc. | (12,996 | ) | (599,116 | ) | |
Preferred Bank | (933 | ) | (40,446 | ) | |
Reliant Bancorp, Inc. | (4,470 | ) | (102,989 | ) | |
Triumph Bancorp, Inc. | (9,752 | ) | (289,634 | ) | |
(3,915,495 | ) | ||||
Beverages — (0.6)% | |||||
Brown-Forman Corp., Class B | (5,712 | ) | (271,777 | ) | |
Biotechnology — (2.7)% | |||||
Alnylam Pharmaceuticals, Inc. | (517 | ) | (37,694 | ) | |
Amicus Therapeutics, Inc. | (3,049 | ) | (29,209 | ) | |
AnaptysBio, Inc. | (867 | ) | (55,306 | ) | |
Atara Biotherapeutics, Inc. | (3,509 | ) | (121,903 | ) | |
Audentes Therapeutics, Inc. | (2,724 | ) | (58,076 | ) | |
Avrobio, Inc. | (1,260 | ) | (20,979 | ) | |
Biohaven Pharmaceutical Holding Co. Ltd. | (1,717 | ) | (63,495 | ) | |
Bluebird Bio, Inc. | (298 | ) | (29,561 | ) | |
Celcuity, Inc. | (1,480 | ) | (35,505 | ) | |
Deciphera Pharmaceuticals, Inc. | (1,439 | ) | (30,205 | ) | |
Fate Therapeutics, Inc. | (3,566 | ) | (45,752 | ) | |
G1 Therapeutics, Inc. | (2,404 | ) | (46,037 | ) | |
Global Blood Therapeutics, Inc. | (977 | ) | (40,106 | ) | |
Heron Therapeutics, Inc. | (1,174 | ) | (30,453 | ) | |
Immunomedics, Inc. | (4,106 | ) | (58,593 | ) | |
Insmed, Inc. | (1,806 | ) | (23,695 | ) | |
Iovance Biotherapeutics, Inc. | (3,394 | ) | (30,037 | ) | |
Madrigal Pharmaceuticals, Inc. | (418 | ) | (47,117 | ) | |
Repligen Corp. | (3,906 | ) | (206,002 | ) | |
Rubius Therapeutics, Inc. | (2,059 | ) | (33,109 | ) | |
Sage Therapeutics, Inc. | (621 | ) | (59,485 | ) | |
Sarepta Therapeutics, Inc. | (1,585 | ) | (172,971 | ) | |
(1,275,290 | ) |
13
Shares | Value | ||||
Building Products — (0.9)% | |||||
AAON, Inc. | (12,084 | ) | $ | (423,665 | ) |
Capital Markets — (1.0)% | |||||
Hamilton Lane, Inc., Class A | (8,202 | ) | (303,474 | ) | |
Virtus Investment Partners, Inc. | (1,406 | ) | (111,679 | ) | |
WisdomTree Investments, Inc. | (7,931 | ) | (52,741 | ) | |
(467,894 | ) | ||||
Chemicals — (1.9)% | |||||
Albemarle Corp. | (560 | ) | (43,159 | ) | |
Chase Corp. | (2,242 | ) | (224,312 | ) | |
International Flavors & Fragrances, Inc. | (948 | ) | (127,288 | ) | |
NewMarket Corp. | (332 | ) | (136,814 | ) | |
Quaker Chemical Corp. | (703 | ) | (124,930 | ) | |
Sensient Technologies Corp. | (4,089 | ) | (228,371 | ) | |
(884,874 | ) | ||||
Commercial Services and Supplies — (0.8)% | |||||
Copart, Inc. | (1,647 | ) | (78,694 | ) | |
Healthcare Services Group, Inc. | (4,249 | ) | (170,725 | ) | |
Interface, Inc. | (4,352 | ) | (62,016 | ) | |
Multi-Color Corp. | (2,335 | ) | (81,935 | ) | |
(393,370 | ) | ||||
Construction and Engineering — (0.8)% | |||||
Granite Construction, Inc. | (3,328 | ) | (134,052 | ) | |
MasTec, Inc. | (5,987 | ) | (242,832 | ) | |
(376,884 | ) | ||||
Consumer Finance — (0.1)% | |||||
Curo Group Holdings Corp. | (2,616 | ) | (24,826 | ) | |
Containers and Packaging — (1.4)% | |||||
Avery Dennison Corp. | (3,254 | ) | (292,307 | ) | |
Crown Holdings, Inc. | (2,058 | ) | (85,551 | ) | |
Graphic Packaging Holding Co. | (27,831 | ) | (296,122 | ) | |
(673,980 | ) | ||||
Distributors — (0.2)% | |||||
LKQ Corp. | (3,475 | ) | (82,462 | ) | |
Electrical Equipment — (0.6)% | |||||
EnerSys | (1,680 | ) | (130,385 | ) | |
TPI Composites, Inc. | (5,165 | ) | (126,955 | ) | |
(257,340 | ) | ||||
Electronic Equipment, Instruments and Components — (1.8)% | |||||
Amphenol Corp., Class A | (3,436 | ) | (278,385 | ) | |
Cognex Corp. | (1,901 | ) | (73,512 | ) | |
FARO Technologies, Inc. | (1,473 | ) | (59,863 | ) | |
II-VI, Inc. | (6,922 | ) | (224,688 | ) | |
IPG Photonics Corp. | (209 | ) | (23,677 | ) | |
Park Electrochemical Corp. | (6,518 | ) | (117,780 | ) | |
Rogers Corp. | (583 | ) | (57,752 | ) | |
(835,657 | ) | ||||
Energy Equipment and Services — (0.3)% | |||||
ProPetro Holding Corp. | (6,561 | ) | (80,831 | ) | |
Solaris Oilfield Infrastructure, Inc., Class A | (3,145 | ) | (38,023 | ) | |
(118,854 | ) |
14
Shares | Value | ||||
Equity Real Estate Investment Trusts (REITs) — (3.0)% | |||||
Alexandria Real Estate Equities, Inc. | (5,408 | ) | $ | (623,218 | ) |
Crown Castle International Corp. | (1,572 | ) | (170,766 | ) | |
Equinix, Inc. | (466 | ) | (164,293 | ) | |
Gaming and Leisure Properties, Inc. | (5,179 | ) | (167,334 | ) | |
Iron Mountain, Inc. | (8,186 | ) | (265,308 | ) | |
(1,390,919 | ) | ||||
Food and Staples Retailing — (0.1)% | |||||
PriceSmart, Inc. | (530 | ) | (31,323 | ) | |
Food Products — (0.6)% | |||||
J&J Snack Foods Corp. | (1,884 | ) | (272,407 | ) | |
Gas Utilities — (0.2)% | |||||
South Jersey Industries, Inc. | (3,563 | ) | (99,051 | ) | |
Health Care Equipment and Supplies — (1.9)% | |||||
AxoGen, Inc. | (2,703 | ) | (55,222 | ) | |
Cantel Medical Corp. | (324 | ) | (24,122 | ) | |
CryoLife, Inc. | (2,867 | ) | (81,365 | ) | |
Insulet Corp. | (461 | ) | (36,567 | ) | |
Neogen Corp. | (1,097 | ) | (62,529 | ) | |
OrthoPediatrics Corp. | (5,896 | ) | (205,652 | ) | |
Sientra, Inc. | (5,607 | ) | (71,265 | ) | |
Teleflex, Inc. | (507 | ) | (131,049 | ) | |
Wright Medical Group NV | (8,425 | ) | (229,329 | ) | |
(897,100 | ) | ||||
Health Care Providers and Services — (0.9)% | |||||
Henry Schein, Inc. | (4,838 | ) | (379,880 | ) | |
PetIQ, Inc. | (2,130 | ) | (49,991 | ) | |
(429,871 | ) | ||||
Health Care Technology — (0.3)% | |||||
Inspire Medical Systems, Inc. | (811 | ) | (34,265 | ) | |
Medidata Solutions, Inc. | (1,377 | ) | (92,837 | ) | |
Omnicell, Inc. | (546 | ) | (33,437 | ) | |
(160,539 | ) | ||||
Hotels, Restaurants and Leisure — (2.5)% | |||||
Belmond Ltd., Class A | (9,246 | ) | (231,427 | ) | |
Caesars Entertainment Corp. | (5,068 | ) | (34,412 | ) | |
Churchill Downs, Inc. | (1,063 | ) | (259,308 | ) | |
Eldorado Resorts, Inc. | (1,190 | ) | (43,090 | ) | |
Golden Entertainment, Inc. | (3,300 | ) | (52,866 | ) | |
Hilton Grand Vacations, Inc. | (5,122 | ) | (135,170 | ) | |
Lindblad Expeditions Holdings, Inc. | (10,544 | ) | (141,922 | ) | |
Marriott International, Inc., Class A | (921 | ) | (99,984 | ) | |
Marriott Vacations Worldwide Corp. | (1,144 | ) | (80,664 | ) | |
Planet Fitness, Inc., Class A | (1,591 | ) | (85,309 | ) | |
(1,164,152 | ) | ||||
Household Durables — (1.3)% | |||||
Century Communities, Inc. | (2,184 | ) | (37,696 | ) | |
Installed Building Products, Inc. | (947 | ) | (31,904 | ) | |
Leggett & Platt, Inc. | (7,814 | ) | (280,054 | ) | |
Mohawk Industries, Inc. | (1,268 | ) | (148,305 | ) | |
Tempur Sealy International, Inc. | (2,298 | ) | (95,137 | ) |
15
Shares | Value | ||||
Universal Electronics, Inc. | (957 | ) | $ | (24,193 | ) |
(617,289 | ) | ||||
Household Products — (0.1)% | |||||
WD-40 Co. | (195 | ) | (35,736 | ) | |
Insurance — (2.4)% | |||||
Ambac Financial Group, Inc. | (9,362 | ) | (161,401 | ) | |
Aon plc | (3,158 | ) | (459,047 | ) | |
Arch Capital Group Ltd. | (5,157 | ) | (137,795 | ) | |
Marsh & McLennan Cos., Inc. | (4,384 | ) | (349,624 | ) | |
(1,107,867 | ) | ||||
Internet and Direct Marketing Retail — (0.4)% | |||||
Gaia, Inc. | (8,963 | ) | (92,857 | ) | |
Wayfair, Inc., Class A | (1,232 | ) | (110,978 | ) | |
(203,835 | ) | ||||
IT Services — (3.0)% | |||||
Evo Payments, Inc., Class A | (2,739 | ) | (67,571 | ) | |
Exela Technologies, Inc. | (6,790 | ) | (26,413 | ) | |
Gartner, Inc. | (3,672 | ) | (469,429 | ) | |
Global Payments, Inc. | (3,424 | ) | (353,117 | ) | |
PRGX Global, Inc. | (2,505 | ) | (23,722 | ) | |
Worldpay, Inc., Class A | (6,275 | ) | (479,598 | ) | |
(1,419,850 | ) | ||||
Life Sciences Tools and Services — (0.5)% | |||||
Bio-Techne Corp. | (759 | ) | (109,843 | ) | |
Charles River Laboratories International, Inc. | (1,291 | ) | (146,115 | ) | |
(255,958 | ) | ||||
Machinery — (2.1)% | |||||
CIRCOR International, Inc. | (4,478 | ) | (95,382 | ) | |
Donaldson Co., Inc. | (4,906 | ) | (212,871 | ) | |
Fortive Corp. | (969 | ) | (65,563 | ) | |
John Bean Technologies Corp. | (1,704 | ) | (122,364 | ) | |
Lydall, Inc. | (1,494 | ) | (30,343 | ) | |
Middleby Corp. (The) | (1,995 | ) | (204,946 | ) | |
NN, Inc. | (4,661 | ) | (31,275 | ) | |
Sun Hydraulics Corp. | (3,847 | ) | (127,682 | ) | |
Welbilt, Inc. | (10,058 | ) | (111,745 | ) | |
(1,002,171 | ) | ||||
Media — (1.3)% | |||||
GCI Liberty, Inc., Class A | (7,357 | ) | (302,814 | ) | |
New York Times Co. (The), Class A | (13,079 | ) | (291,531 | ) | |
(594,345 | ) | ||||
Metals and Mining — (0.1)% | |||||
Cleveland-Cliffs, Inc. | (3,252 | ) | (25,008 | ) | |
Multiline Retail — (0.4)% | |||||
Ollie's Bargain Outlet Holdings, Inc. | (2,710 | ) | (180,242 | ) | |
Oil, Gas and Consumable Fuels — (0.2)% | |||||
Diamondback Energy, Inc. | (708 | ) | (65,632 | ) | |
Matador Resources Co. | (2,621 | ) | (40,704 | ) | |
(106,336 | ) | ||||
Pharmaceuticals — (0.5)% | |||||
Aerie Pharmaceuticals, Inc. | (2,939 | ) | (106,098 | ) |
16
Shares | Value | ||||
Catalent, Inc. | (3,101 | ) | $ | (96,689 | ) |
Tricida, Inc. | (1,184 | ) | (27,919 | ) | |
(230,706 | ) | ||||
Professional Services — (1.6)% | |||||
Equifax, Inc. | (3,171 | ) | (295,315 | ) | |
TransUnion | (4,756 | ) | (270,141 | ) | |
TriNet Group, Inc. | (3,932 | ) | (164,947 | ) | |
(730,403 | ) | ||||
Real Estate Management and Development — (0.6)% | |||||
Cushman & Wakefield plc | (2,943 | ) | (42,585 | ) | |
Howard Hughes Corp. (The) | (2,289 | ) | (223,452 | ) | |
(266,037 | ) | ||||
Road and Rail — (0.1)% | |||||
Heartland Express, Inc. | (1,703 | ) | (31,165 | ) | |
Semiconductors and Semiconductor Equipment — (0.1)% | |||||
Brooks Automation, Inc. | (1,641 | ) | (42,961 | ) | |
Software — (1.8)% | |||||
2U, Inc. | (3,342 | ) | (166,164 | ) | |
Everbridge, Inc. | (4,294 | ) | (243,728 | ) | |
OneSpan, Inc. | (9,758 | ) | (126,366 | ) | |
Pluralsight, Inc., Class A | (5,176 | ) | (121,895 | ) | |
PROS Holdings, Inc. | (936 | ) | (29,390 | ) | |
SS&C Technologies Holdings, Inc. | (2,970 | ) | (133,977 | ) | |
Trade Desk, Inc. (The), Class A | (185 | ) | (21,471 | ) | |
(842,991 | ) | ||||
Specialty Retail — (0.6)% | |||||
At Home Group, Inc. | (1,257 | ) | (23,456 | ) | |
Carvana Co. | (1,628 | ) | (53,252 | ) | |
Gap, Inc. (The) | (1,614 | ) | (41,577 | ) | |
Monro, Inc. | (2,162 | ) | (148,637 | ) | |
(266,922 | ) | ||||
Technology Hardware, Storage and Peripherals — (0.1)% | |||||
USA Technologies, Inc. | (6,618 | ) | (25,744 | ) | |
Textiles, Apparel and Luxury Goods — (0.7)% | |||||
Carter's, Inc. | (2,064 | ) | (168,464 | ) | |
Skechers U.S.A., Inc., Class A | (7,563 | ) | (173,117 | ) | |
(341,581 | ) | ||||
Thrifts and Mortgage Finance — (1.1)% | |||||
Kearny Financial Corp. | (18,102 | ) | (232,068 | ) | |
Provident Bancorp, Inc. | (5,292 | ) | (114,730 | ) | |
Western New England Bancorp, Inc. | (16,915 | ) | (169,827 | ) | |
(516,625 | ) | ||||
Trading Companies and Distributors — (1.0)% | |||||
Air Lease Corp. | (8,636 | ) | (260,894 | ) | |
BlueLinx Holdings, Inc. | (3,069 | ) | (75,835 | ) | |
CAI International, Inc. | (3,663 | ) | (85,091 | ) | |
Willis Lease Finance Corp. | (1,947 | ) | (67,366 | ) | |
(489,186 | ) | ||||
TOTAL COMMON STOCKS SOLD SHORT (Proceeds $28,226,699) | (24,569,853 | ) | |||
OTHER ASSETS AND LIABILITIES — (0.2)% | (80,840 | ) | |||
TOTAL NET ASSETS — 100.0% | $ | 46,569,381 |
17
NOTES TO SCHEDULE OF INVESTMENTS |
† | Category is less than 0.05% of total net assets. |
(1) | Security, or a portion thereof, has been pledged at the custodian bank or with a broker for collateral requirements on securities sold short. At the period end, the aggregate value of securities pledged was $30,534,870. |
(2) | Non-income producing. |
See Notes to Financial Statements.
18
Statement of Assets and Liabilities |
DECEMBER 31, 2018 (UNAUDITED) | |||
Assets | |||
Investment securities, at value (cost of $47,092,932) | $ | 46,317,718 | |
Repurchase agreements, at value (cost of $24,902,356) | 24,902,356 | ||
Total investment securities, at value (cost of $71,995,288) | 71,220,074 | ||
Cash | 15,399 | ||
Receivable for capital shares sold | 83,613 | ||
Dividends and interest receivable | 37,754 | ||
71,356,840 | |||
Liabilities | |||
Securities sold short, at value (proceeds of $28,226,699) | 24,569,853 | ||
Payable for capital shares redeemed | 113,597 | ||
Accrued management fees | 54,713 | ||
Distribution and service fees payable | 1,947 | ||
Dividend expense payable on securities sold short | 25,429 | ||
Fees and charges payable on borrowings for securities sold short | 21,920 | ||
24,787,459 | |||
Net Assets | $ | 46,569,381 | |
Net Assets Consist of: | |||
Capital (par value and paid-in surplus) | $ | 44,324,536 | |
Distributable earnings | 2,244,845 | ||
$ | 46,569,381 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | ||||
Investor Class, $0.01 Par Value | $33,108,940 | 2,016,724 | $16.42 | |||
I Class, $0.01 Par Value | $9,664,180 | 586,260 | $16.48 | |||
A Class, $0.01 Par Value | $1,432,279 | 88,577 | $16.17* | |||
C Class, $0.01 Par Value | $1,459,686 | 95,722 | $15.25 | |||
R Class, $0.01 Par Value | $904,296 | 56,901 | $15.89 |
*Maximum offering price $17.16 (net asset value divided by 0.9425).
See Notes to Financial Statements.
19
Statement of Operations |
FOR THE SIX MONTHS ENDED DECEMBER 31, 2018 (UNAUDITED) | |||
Investment Income (Loss) | |||
Income: | |||
Dividends | $ | 396,376 | |
Interest | 187,499 | ||
583,875 | |||
Expenses: | |||
Dividend expense on securities sold short | 117,912 | ||
Fees and charges on borrowings for securities sold short | 115,014 | ||
Management fees | 335,931 | ||
Distribution and service fees: | |||
A Class | 1,960 | ||
C Class | 8,236 | ||
R Class | 2,163 | ||
Directors' fees and expenses | 1,637 | ||
Other expenses | 212 | ||
583,065 | |||
Net investment income (loss) | 810 | ||
Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investment transactions | 2,252,160 | ||
Securities sold short transactions | (1,047,380 | ) | |
1,204,780 | |||
Change in net unrealized appreciation (depreciation) on: | |||
Investments | (8,003,996 | ) | |
Securities sold short | 5,227,334 | ||
(2,776,662 | ) | ||
Net realized and unrealized gain (loss) | (1,571,882 | ) | |
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | (1,571,072 | ) |
See Notes to Financial Statements.
20
Statement of Changes in Net Assets |
SIX MONTHS ENDED DECEMBER 31, 2018 (UNAUDITED) AND YEAR ENDED JUNE 30, 2018 | ||||||
Increase (Decrease) in Net Assets | December 31, 2018 | June 30, 2018 | ||||
Operations | ||||||
Net investment income (loss) | $ | 810 | $ | (293,111 | ) | |
Net realized gain (loss) | 1,204,780 | 2,372,201 | ||||
Change in net unrealized appreciation (depreciation) | (2,776,662 | ) | 26,213 | |||
Net increase (decrease) in net assets resulting from operations | (1,571,072 | ) | 2,105,303 | |||
Distributions to Shareholders | ||||||
From earnings: | ||||||
Investor Class | (2,086,696 | ) | (2,804,255 | ) | ||
I Class | (493,394 | ) | (130,005 | ) | ||
A Class | (92,518 | ) | (135,710 | ) | ||
C Class | (97,278 | ) | (152,548 | ) | ||
R Class | (56,435 | ) | (49,146 | ) | ||
Decrease in net assets from distributions | (2,826,321 | ) | (3,271,664 | ) | ||
Capital Share Transactions | ||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | 2,041,981 | 9,245,912 | ||||
Net increase (decrease) in net assets | (2,355,412 | ) | 8,079,551 | |||
Net Assets | ||||||
Beginning of period | 48,924,793 | 40,845,242 | ||||
End of period | $ | 46,569,381 | $ | 48,924,793 |
See Notes to Financial Statements.
21
Notes to Financial Statements |
DECEMBER 31, 2018 (UNAUDITED)
1. Organization
American Century Quantitative Equity 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. AC Alternatives Disciplined Long Short 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, A Class, C Class and R Class. The A Class may incur an initial sales charge. The A Class and C Class may be subject to a contingent deferred sales charge.
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.
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.
22
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.
Securities Sold Short — The fund enters into short sales, which is selling securities it does not own, as part of its normal investment activities. Upon selling a security short, the fund will segregate cash, cash equivalents or other appropriate liquid securities in at least an amount equal to the current market value of the securities sold short until the fund replaces the borrowed security. Interest earned on segregated cash for securities sold short, if any, is reflected as interest income. The fund is required to pay any dividends or interest due on securities sold short. Such dividends and interest are recorded as an expense. The fund may pay fees or charges on the assets borrowed for securities sold short. These fees are calculated daily based upon the value of each security sold short and a rate that is dependent on the availability of such security. Liabilities for securities sold short are valued daily and changes in value are recorded as change in net unrealized appreciation (depreciation) on securities sold short. The fund records realized gain (loss) on a security sold short when it is terminated by the fund and includes as a component of net realized gain (loss) on securities sold short transactions.
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.
Segregated Assets — In accordance with the 1940 Act, the fund segregates assets on its books and records to cover certain types of investment securities and other financial instruments. ACIM monitors, on a daily basis, the securities segregated to ensure the fund designates a sufficient amount of liquid assets, marked-to-market daily. The fund may also receive assets or be required to pledge assets at the custodian bank or with a broker for collateral requirements.
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, if any, are generally declared and paid semiannually. Distributions from 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
23
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.
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, expenses on securities sold short, 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 fee consists of (1) an Investment Category Fee based on the daily net assets of the fund and certain other accounts managed by the investment advisor that are in the same broad investment category as the fund and (2) a Complex Fee based on the assets of all the funds in the American Century Investments family of funds.
The Investment Category Fee range, the Complex Fee range and the effective annual management fee for each class for the period ended December 31, 2018 are as follows:
Investment Category Fee Range | Complex Fee Range | Effective Annual Management Fee | |
Investor Class | 1.1180% to 1.3000% | 0.2500% to 0.3100% | 1.44% |
I Class | 0.0500% to 0.1100% | 1.24% | |
A Class | 0.2500% to 0.3100% | 1.44% | |
C Class | 0.2500% to 0.3100% | 1.44% | |
R Class | 0.2500% to 0.3100% | 1.44% |
Distribution and Service Fees — The Board of Directors has adopted a separate Master Distribution and Individual Shareholder Services Plan for each of the A Class, C Class and R Class (collectively the plans), pursuant to Rule 12b-1 of the 1940 Act. The plans provide that the A Class will pay ACIS an annual distribution and service fee of 0.25%. The plans provide that the C Class will pay ACIS an annual distribution and service fee of 1.00%, of which 0.25% is paid for individual shareholder services and 0.75% is paid for distribution services. The plans provide that the R Class will pay ACIS an annual distribution and service fee of 0.50%. The fees are computed and accrued daily based on each class’s daily net assets and paid monthly in arrears. The fees are used to pay financial intermediaries for distribution and individual shareholder services. Fees incurred under the plans during the period ended December 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.
24
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 $654,388 and $608,253, respectively. The effect of interfund transactions on the Statement of Operations was $47,747 in net realized gain (loss) on investment transactions.
4. Investment Transactions
Purchases and sales of investment securities and securities sold short, excluding short-term investments, for the period ended December 31, 2018 were $55,874,357 and $56,228,909, respectively.
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended December 31, 2018 | Year ended June 30, 2018 | |||||||||
Shares | Amount | Shares | Amount | |||||||
Investor Class/Shares Authorized | 50,000,000 | 50,000,000 | ||||||||
Sold | 303,655 | $ | 5,520,927 | 1,274,754 | $ | 23,619,522 | ||||
Issued in reinvestment of distributions | 121,131 | 2,036,209 | 148,786 | 2,664,762 | ||||||
Redeemed | (598,230 | ) | (10,885,888 | ) | (1,165,589 | ) | (21,437,057 | ) | ||
(173,444 | ) | (3,328,752 | ) | 257,951 | 4,847,227 | |||||
I Class/Shares Authorized | 25,000,000 | 25,000,000 | ||||||||
Sold | 368,197 | 6,384,896 | 275,796 | 5,086,168 | ||||||
Issued in reinvestment of distributions | 29,229 | 493,394 | 7,247 | 130,005 | ||||||
Redeemed | (89,232 | ) | (1,533,497 | ) | (26,606 | ) | (487,271 | ) | ||
308,194 | 5,344,793 | 256,437 | 4,728,902 | |||||||
A Class/Shares Authorized | 20,000,000 | 20,000,000 | ||||||||
Sold | 8,375 | 151,355 | 26,419 | 483,482 | ||||||
Issued in reinvestment of distributions | 5,471 | 90,602 | 7,335 | 129,830 | ||||||
Redeemed | (13,756 | ) | (243,762 | ) | (51,825 | ) | (945,562 | ) | ||
90 | (1,805 | ) | (18,071 | ) | (332,250 | ) | ||||
C Class/Shares Authorized | 15,000,000 | 15,000,000 | ||||||||
Sold | 3,280 | 54,879 | 13,593 | 239,127 | ||||||
Issued in reinvestment of distributions | 6,228 | 97,278 | 9,032 | 152,548 | ||||||
Redeemed | (20,678 | ) | (354,986 | ) | (40,415 | ) | (706,839 | ) | ||
(11,170 | ) | (202,829 | ) | (17,790 | ) | (315,164 | ) | |||
R Class/Shares Authorized | 15,000,000 | 15,000,000 | ||||||||
Sold | 12,880 | 226,618 | 27,688 | 502,597 | ||||||
Issued in reinvestment of distributions | 3,467 | 56,435 | 2,815 | 49,146 | ||||||
Redeemed | (2,954 | ) | (52,479 | ) | (13,075 | ) | (234,546 | ) | ||
13,393 | 230,574 | 17,428 | 317,197 | |||||||
Net increase (decrease) | 137,063 | $ | 2,041,981 | 495,955 | $ | 9,245,912 |
25
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.
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 | $ | 46,317,718 | — | — | ||||
Temporary Cash Investments | — | $ | 24,902,356 | — | ||||
$ | 46,317,718 | $ | 24,902,356 | — | ||||
Liabilities | ||||||||
Securities Sold Short | ||||||||
Common Stocks | $ | 24,569,853 | — | — |
7. Risk Factors
The fund is subject to short sales risk. If the market price of a security increases after the fund borrows the security, the fund may suffer a loss when it replaces the borrowed security at the higher price. Any loss will be increased by the amount of compensation, interest or dividends, and transaction costs the fund must pay to the lender of the borrowed security.
The fund's investment strategy utilizes leverage, which can increase market exposure and subject the fund to greater risk and higher volatility.
If the fund is overweighted in a stock or sector, any negative development related to that stock or sector will have a greater impact on the fund than other funds that are not overweighted in that stock or sector.
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.
26
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 | $ | 72,050,096 | |
Gross tax appreciation of investments | $ | 4,192,299 | |
Gross tax depreciation of investments | (5,022,321 | ) | |
Net tax appreciation (depreciation) of investments | (830,022 | ) | |
Gross tax appreciation on securities sold short | 4,110,994 | ||
Gross tax depreciation on securities sold short | (485,403 | ) | |
Net tax appreciation (depreciation) | $ | 2,795,569 |
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 June 30, 2018, the fund had late-year ordinary loss deferrals of $(114,435), 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.
27
Financial Highlights |
For a Share Outstanding Throughout the Years Ended June 30 (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 | Operating Expenses (excluding expenses on securities sold short) | Net Investment Income (Loss) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
Investor Class | ||||||||||||||||
2018(3) | $18.13 | —(4) | (0.62) | (0.62) | — | (1.09) | (1.09) | $16.42 | (3.56)% | 2.42%(5) | 1.45%(5) | 0.03%(5) | 112% | $33,109 | ||
2018 | $18.54 | (0.11) | 1.02 | 0.91 | — | (1.32) | (1.32) | $18.13 | 5.06% | 2.39% | 1.44% | (0.58)% | 243% | $39,702 | ||
2017 | $16.17 | —(4) | 2.38 | 2.38 | (0.01) | — | (0.01) | $18.54 | 14.65% | 2.05% | 1.45% | 0.00%(6) | 127% | $35,816 | ||
2016 | $16.67 | 0.02 | (0.25) | (0.23) | —(4) | (0.27) | (0.27) | $16.17 | (1.40)% | 1.91% | 1.47% | 0.14% | 121% | $34,885 | ||
2015 | $16.02 | 0.04 | 1.54 | 1.58 | (0.01) | (0.92) | (0.93) | $16.67 | 10.22% | 1.80% | 1.45% | 0.22% | 115% | $47,976 | ||
2014 | $12.65 | 0.03 | 3.76 | 3.79 | (0.01) | (0.41) | (0.42) | $16.02 | 30.29% | 1.81% | 1.46% | 0.17% | 96% | $15,188 | ||
I Class | ||||||||||||||||
2018(3) | $18.18 | 0.03 | (0.64) | (0.61) | — | (1.09) | (1.09) | $16.48 | (3.50)% | 2.22%(5) | 1.25%(5) | 0.23%(5) | 112% | $9,664 | ||
2018 | $18.55 | (0.06) | 1.01 | 0.95 | — | (1.32) | (1.32) | $18.18 | 5.22% | 2.19% | 1.24% | (0.38)% | 243% | $5,055 | ||
2017 | $16.18 | 0.04 | 2.37 | 2.41 | (0.04) | — | (0.04) | $18.55 | 14.93% | 1.85% | 1.25% | 0.20% | 127% | $401 | ||
2016 | $16.69 | 0.04 | (0.24) | (0.20) | (0.04) | (0.27) | (0.31) | $16.18 | (1.26)% | 1.71% | 1.27% | 0.34% | 121% | $322 | ||
2015 | $16.03 | 0.06 | 1.57 | 1.63 | (0.05) | (0.92) | (0.97) | $16.69 | 10.49% | 1.60% | 1.25% | 0.42% | 115% | $1,027 | ||
2014 | $12.66 | 0.05 | 3.77 | 3.82 | (0.04) | (0.41) | (0.45) | $16.03 | 30.52% | 1.61% | 1.26% | 0.37% | 96% | $503 |
For a Share Outstanding Throughout the Years Ended June 30 (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 | Operating Expenses (excluding expenses on securities sold short) | Net Investment Income (Loss) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
A Class | ||||||||||||||||
2018(3) | $17.89 | (0.02) | (0.61) | (0.63) | — | (1.09) | (1.09) | $16.17 | (3.66)% | 2.67%(5) | 1.70%(5) | (0.22)%(5) | 112% | $1,432 | ||
2018 | $18.36 | (0.15) | 1.00 | 0.85 | — | (1.32) | (1.32) | $17.89 | 4.77% | 2.64% | 1.69% | (0.83)% | 243% | $1,583 | ||
2017 | $16.04 | (0.05) | 2.37 | 2.32 | — | — | — | $18.36 | 14.40% | 2.30% | 1.70% | (0.25)% | 127% | $1,956 | ||
2016 | $16.59 | (0.02) | (0.26) | (0.28) | — | (0.27) | (0.27) | $16.04 | (1.72)% | 2.16% | 1.72% | (0.11)% | 121% | $5,333 | ||
2015 | $15.97 | (0.01) | 1.55 | 1.54 | — | (0.92) | (0.92) | $16.59 | 9.97% | 2.05% | 1.70% | (0.03)% | 115% | $6,083 | ||
2014 | $12.63 | (0.01) | 3.76 | 3.75 | — | (0.41) | (0.41) | $15.97 | 29.99% | 2.06% | 1.71% | (0.08)% | 96% | $1,252 | ||
C Class | ||||||||||||||||
2018(3) | $17.00 | (0.09) | (0.57) | (0.66) | — | (1.09) | (1.09) | $15.25 | (4.03)% | 3.42%(5) | 2.45%(5) | (0.97)%(5) | 112% | $1,460 | ||
2018 | $17.63 | (0.28) | 0.97 | 0.69 | — | (1.32) | (1.32) | $17.00 | 3.97% | 3.39% | 2.44% | (1.58)% | 243% | $1,817 | ||
2017 | $15.53 | (0.17) | 2.27 | 2.10 | — | — | — | $17.63 | 13.52% | 3.05% | 2.45% | (1.00)% | 127% | $2,199 | ||
2016 | $16.18 | (0.14) | (0.24) | (0.38) | — | (0.27) | (0.27) | $15.53 | (2.38)% | 2.91% | 2.47% | (0.86)% | 121% | $2,325 | ||
2015 | $15.71 | (0.13) | 1.52 | 1.39 | — | (0.92) | (0.92) | $16.18 | 9.16% | 2.80% | 2.45% | (0.78)% | 115% | $1,306 | ||
2014 | $12.53 | (0.12) | 3.71 | 3.59 | — | (0.41) | (0.41) | $15.71 | 28.94% | 2.81% | 2.46% | (0.83)% | 96% | $699 | ||
R Class | ||||||||||||||||
2018(3) | $17.63 | (0.04) | (0.61) | (0.65) | — | (1.09) | (1.09) | $15.89 | (3.83)% | 2.92%(5) | 1.95%(5) | (0.47)%(5) | 112% | $904 | ||
2018 | $18.15 | (0.19) | 0.99 | 0.80 | — | (1.32) | (1.32) | $17.63 | 4.54% | 2.89% | 1.94% | (1.08)% | 243% | $767 | ||
2017 | $15.90 | (0.08) | 2.33 | 2.25 | — | — | — | $18.15 | 14.09% | 2.55% | 1.95% | (0.50)% | 127% | $473 | ||
2016 | $16.48 | (0.06) | (0.25) | (0.31) | — | (0.27) | (0.27) | $15.90 | (1.91)% | 2.41% | 1.97% | (0.36)% | 121% | $171 | ||
2015 | $15.91 | (0.04) | 1.53 | 1.49 | — | (0.92) | (0.92) | $16.48 | 9.69% | 2.30% | 1.95% | (0.28)% | 115% | $44 | ||
2014 | $12.62 | (0.05) | 3.75 | 3.70 | — | (0.41) | (0.41) | $15.91 | 29.61% | 2.31% | 1.96% | (0.33)% | 96% | $521 |
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 and do not reflect applicable sales charges, if any. Total returns for periods less than one year are not annualized. |
(3) | Six months ended December 31, 2018 (unaudited). |
(4) | Per share amount was less than $0.005. |
(5) | Annualized. |
(6) | Ratio was less than 0.005%. |
See Notes to Financial Statements.
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
Descriptions of the principles and policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund are available without charge, upon request, by calling 1-800-345-2021 or visiting the "About Us" page of American Century Investments’ website at americancentury.com. A description of the policies is also available 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. 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.
31
Notes |
32
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 Quantitative Equity 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. | ||
©2019 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-91460 1902 |
SEMIANNUAL REPORT | |
DECEMBER 31, 2018 | |
AC Alternatives® Equity Market Neutral Fund |
Investor Class (ALHIX) |
I Class (ALISX) |
Y Class (ALYIX) |
A Class (ALIAX) |
C Class (ALICX) |
R Class (ALIRX) |
R5 Class (ALIGX) |
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the fund’s shareholder reports like this one will no longer be sent by mail, unless you specifically request paper copies of the reports from the fund or from your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the fund or your financial intermediary electronically by calling or sending an email request to your appropriate contacts as listed on the back cover of this report.
You may elect to receive all future reports in paper free of charge. You can inform the fund or your financial intermediary that you wish to continue receiving paper copies of your shareholder reports by calling or sending an email request to your appropriate contacts as listed on the back cover of this report. Your election to receive reports in paper will apply to all funds held with the fund complex/your financial intermediary.
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 period ended December 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, please visit our website, americancentury.com.
Risk-On/Risk-Off Rotation Highlights Heightened Volatility
The six-month reporting period began on an upbeat note for stock investors. Against a backdrop of robust economic and earnings data and federal tax and regulatory reform, U.S. stocks soared. The S&P 500 Index gained nearly 8% in the first three months of the period. Outside the U.S., stocks also advanced, but the gains were more subdued amid signs of slowing growth. Meanwhile, favorable U.S. economic data and continued Federal Reserve (Fed) tightening helped push U.S. Treasury yields higher. This pressured interest rate-sensitive assets, including longer-maturity Treasuries, gold, utilities stocks, and REITs (real estate investment trusts), and they generally underperformed U.S. stocks.
In the second half of the reporting period, investor sentiment and asset-class performance took a drastic turn. Investors exited stocks on mounting concerns about slowing global economic and earnings growth and Fed policy. Along with its December interest rate increase, the Fed delivered a surprisingly bullish outlook. Investors feared the Fed’s plans for two rate hikes in 2019 were too aggressive, further fueling the steep sell-off among riskier assets. The S&P 500 Index declined more than 13% in the fourth quarter. For the entire six-month period, U.S. stocks fell 6.85%. Losses among non-U.S. stocks were even steeper.
The risk-off climate in the second half of the period sparked a flight to quality. Treasury yields plunged in the fourth quarter, triggering a year-end rally in Treasuries and other perceived safe-haven assets. Overall, Treasuries were up for the six-month period and significantly outperformed stocks and other riskier assets.
As recent performance trends indicate, market volatility remains a formidable force. But volatile markets often produce the most compelling investment opportunities. We believe this scenario underscores the importance of 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 |
DECEMBER 31, 2018 | |
Top Ten Long Holdings | % of net assets |
PulteGroup, Inc. | 0.94% |
JPMorgan Chase & Co. | 0.91% |
Graham Holdings Co., Class B | 0.90% |
Ciena Corp. | 0.90% |
Anglo American plc | 0.88% |
CF Industries Holdings, Inc. | 0.88% |
Capcom Co., Ltd. | 0.88% |
Deckers Outdoor Corp. | 0.87% |
Showa Shell Sekiyu KK | 0.87% |
Bank of America Corp. | 0.86% |
Top Ten Short Holdings | % of net assets |
TFS Financial Corp. | (0.97)% |
Cree, Inc. | (0.93)% |
Eversource Energy | (0.92)% |
Henry Schein, Inc. | (0.88)% |
Europcar Mobility Group | (0.87)% |
Goldcorp, Inc. | (0.86)% |
Sempra Energy | (0.86)% |
HIS Co. Ltd. | (0.86)% |
New York Times Co. (The), Class A | (0.85)% |
CME Group, Inc. | (0.85)% |
Types of Investments in Portfolio | % of net assets |
Domestic Common Stocks | 72.9% |
Foreign Common Stocks* | 18.9% |
Domestic Common Stocks Sold Short | (74.2)% |
Foreign Common Stocks Sold Short* | (16.7)% |
Temporary Cash Investments | 6.7% |
Other Assets and Liabilities | 92.4%** |
*Includes depositary shares, dual listed securities and foreign ordinary shares.
**Amount relates primarily to deposits for securities sold short at period end.
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 July 1, 2018 to December 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 7/1/18 | Ending Account Value 12/31/18 | Expenses Paid During Period(1) 7/1/18 - 12/31/18 | Annualized Expense Ratio(1) | |
Actual | ||||
Investor Class | $1,000 | $1,019.20 | $14.86 | 2.92% |
I Class | $1,000 | $1,019.60 | $13.85 | 2.72% |
Y Class | $1,000 | $1,019.60 | $13.59 | 2.67% |
A Class | $1,000 | $1,017.90 | $16.12 | 3.17% |
C Class | $1,000 | $1,013.60 | $19.90 | 3.92% |
R Class | $1,000 | $1,016.60 | $17.38 | 3.42% |
R5 Class | $1,000 | $1,019.60 | $13.85 | 2.72% |
Hypothetical | ||||
Investor Class | $1,000 | $1,010.49 | $14.80 | 2.92% |
I Class | $1,000 | $1,011.49 | $13.79 | 2.72% |
Y Class | $1,000 | $1,011.75 | $13.54 | 2.67% |
A Class | $1,000 | $1,009.23 | $16.05 | 3.17% |
C Class | $1,000 | $1,005.44 | $19.82 | 3.92% |
R Class | $1,000 | $1,007.97 | $17.31 | 3.42% |
R5 Class | $1,000 | $1,011.49 | $13.79 | 2.72% |
(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 |
DECEMBER 31, 2018 (UNAUDITED)
Shares | Value | ||||
COMMON STOCKS — 91.8% | |||||
Aerospace and Defense — 2.9% | |||||
Boeing Co. (The) | 1,002 | $ | 323,145 | ||
Curtiss-Wright Corp. | 4,230 | 431,967 | |||
Harris Corp. | 2,638 | 355,207 | |||
Raytheon Co.(1) | 3,545 | 543,626 | |||
Textron, Inc. | 8,808 | 405,080 | |||
2,059,025 | |||||
Auto Components — 0.1% | |||||
Faurecia SA | 2,112 | 80,024 | |||
Automobiles — 0.1% | |||||
Peugeot SA | 2,491 | 53,214 | |||
Banks — 5.6% | |||||
Bank of America Corp.(1) | 24,564 | 605,257 | |||
BB&T Corp. | 1,460 | 63,247 | |||
Comerica, Inc. | 8,241 | 566,074 | |||
Fifth Third Bancorp(1) | 23,913 | 562,673 | |||
First Citizens BancShares, Inc., Class A(1) | 1,404 | 529,378 | |||
Huntington Bancshares, Inc. | 13,873 | 165,366 | |||
JPMorgan Chase & Co.(1) | 6,532 | 637,654 | |||
KeyCorp | 8,356 | 123,502 | |||
Regions Financial Corp. | 11,169 | 149,441 | |||
SunTrust Banks, Inc.(1) | 10,788 | 544,147 | |||
3,946,739 | |||||
Beverages — 0.8% | |||||
Coca-Cola Co. (The)(1) | 11,535 | 546,182 | |||
Biotechnology — 1.9% | |||||
AbbVie, Inc. | 2,016 | 185,855 | |||
Alexion Pharmaceuticals, Inc.(2) | 1,333 | 129,781 | |||
Amgen, Inc. | 882 | 171,699 | |||
Biogen, Inc.(2) | 570 | 171,524 | |||
Celgene Corp.(2) | 2,477 | 158,751 | |||
Genomic Health, Inc.(2) | 2,488 | 160,252 | |||
Incyte Corp.(2) | 2,702 | 171,820 | |||
Swedish Orphan Biovitrum AB(2) | 7,997 | 173,909 | |||
1,323,591 | |||||
Building Products — 0.8% | |||||
Masco Corp. | 19,236 | 562,461 | |||
Capital Markets — 2.0% | |||||
Affiliated Managers Group, Inc. | 3,110 | 303,038 | |||
Evercore, Inc., Class A(1) | 6,858 | 490,758 | |||
LPL Financial Holdings, Inc. | 9,769 | 596,691 | |||
1,390,487 | |||||
Chemicals — 1.7% | |||||
CF Industries Holdings, Inc.(1) | 14,221 | 618,755 | |||
Olin Corp. | 27,652 | 556,082 | |||
1,174,837 |
6
Shares | Value | ||||
Commercial Services and Supplies — 2.5% | |||||
Aggreko plc | 31,950 | $ | 298,340 | ||
Clean Harbors, Inc.(2) | 9,407 | 464,236 | |||
MSA Safety, Inc.(1) | 6,053 | 570,616 | |||
Republic Services, Inc.(1) | 5,738 | 413,652 | |||
1,746,844 | |||||
Communications Equipment — 0.9% | |||||
Ciena Corp.(1)(2) | 18,591 | 630,421 | |||
Construction and Engineering — 0.6% | |||||
EMCOR Group, Inc. | 6,846 | 408,638 | |||
Consumer Finance — 1.4% | |||||
Capital One Financial Corp. | 3,851 | 291,097 | |||
Discover Financial Services | 8,849 | 521,914 | |||
Synchrony Financial | 7,339 | 172,173 | |||
985,184 | |||||
Containers and Packaging — 0.8% | |||||
WestRock Co.(1) | 14,112 | 532,869 | |||
Diversified Consumer Services — 0.9% | |||||
Graham Holdings Co., Class B(1) | 989 | 633,534 | |||
Electric Utilities — 0.8% | |||||
OGE Energy Corp.(1) | 14,960 | 586,282 | |||
Electrical Equipment — 0.3% | |||||
Generac Holdings, Inc.(1)(2) | 4,809 | 239,007 | |||
Electronic Equipment, Instruments and Components — 2.8% | |||||
CDW Corp. | 1,718 | 139,244 | |||
Keysight Technologies, Inc.(2) | 9,000 | 558,720 | |||
National Instruments Corp. | 12,070 | 547,736 | |||
Tech Data Corp.(2) | 6,081 | 497,487 | |||
Zebra Technologies Corp., Class A(2) | 1,473 | 234,546 | |||
1,977,733 | |||||
Energy Equipment and Services — 1.2% | |||||
Halliburton Co.(1) | 20,418 | 542,711 | |||
Petrofac Ltd. | 45,004 | 273,617 | |||
816,328 | |||||
Entertainment — 1.3% | |||||
Capcom Co., Ltd. | 31,000 | 617,958 | |||
Daiichikosho Co., Ltd. | 900 | 42,537 | |||
Electronic Arts, Inc.(2) | 3,048 | 240,518 | |||
901,013 | |||||
Equity Real Estate Investment Trusts (REITs) — 4.3% | |||||
Brixmor Property Group, Inc.(1) | 38,407 | 564,199 | |||
GEO Group, Inc. (The)(1) | 26,674 | 525,478 | |||
Healthcare Trust of America, Inc., Class A | 21,233 | 537,407 | |||
Link REIT | 59,500 | 602,561 | |||
Outfront Media, Inc. | 19,849 | 359,664 | |||
Sunstone Hotel Investors, Inc. | 13,145 | 171,016 | |||
Weingarten Realty Investors | 10,473 | 259,835 | |||
3,020,160 | |||||
Food and Staples Retailing — 0.4% | |||||
US Foods Holding Corp.(2) | 8,529 | 269,858 |
7
Shares | Value | ||||
Food Products — 1.9% | |||||
a2 Milk Co. Ltd.(2) | 68,045 | $ | 509,240 | ||
General Mills, Inc. | 7,905 | 307,821 | |||
Tate & Lyle plc | 63,684 | 535,733 | |||
1,352,794 | |||||
Gas Utilities — 0.2% | |||||
National Fuel Gas Co. | 2,617 | 133,938 | |||
Health Care Equipment and Supplies — 5.1% | |||||
DexCom, Inc.(2) | 2,071 | 248,106 | |||
Globus Medical, Inc., Class A(1)(2) | 11,884 | 514,339 | |||
Hill-Rom Holdings, Inc.(1) | 6,138 | 543,520 | |||
ICU Medical, Inc.(1)(2) | 2,261 | 519,193 | |||
Integer Holdings Corp.(2) | 3,671 | 279,950 | |||
Medtronic plc | 6,459 | 587,511 | |||
NuVasive, Inc.(2) | 6,173 | 305,934 | |||
STERIS plc | 5,569 | 595,048 | |||
3,593,601 | |||||
Health Care Providers and Services — 0.8% | |||||
Amedisys, Inc.(2) | 2,722 | 318,773 | |||
Tenet Healthcare Corp.(2) | 15,784 | 270,538 | |||
589,311 | |||||
Health Care Technology — 0.6% | |||||
athenahealth, Inc.(2) | 3,017 | 398,033 | |||
Hotels, Restaurants and Leisure — 1.2% | |||||
Darden Restaurants, Inc. | 3,303 | 329,837 | |||
Jack in the Box, Inc. | 1,363 | 105,810 | |||
Sushiro Global Holdings Ltd. | 7,700 | 419,002 | |||
854,649 | |||||
Household Durables — 2.3% | |||||
KB Home(1) | 30,608 | 584,613 | |||
PulteGroup, Inc.(1) | 25,538 | 663,733 | |||
Sony Corp. | 4,900 | 235,969 | |||
Toll Brothers, Inc. | 3,422 | 112,686 | |||
1,597,001 | |||||
Independent Power and Renewable Electricity Producers — 1.6% | |||||
AES Corp.(1) | 40,335 | 583,244 | |||
NRG Energy, Inc. | 13,690 | 542,124 | |||
1,125,368 | |||||
Insurance — 2.2% | |||||
Hartford Financial Services Group, Inc. (The) | 13,451 | 597,897 | |||
Progressive Corp. (The)(1) | 9,894 | 596,905 | |||
Travelers Cos., Inc. (The) | 3,241 | 388,110 | |||
1,582,912 | |||||
Interactive Media and Services — 0.4% | |||||
Facebook, Inc., Class A(2) | 1,940 | 254,315 | |||
Internet and Direct Marketing Retail — 0.8% | |||||
eBay, Inc.(1)(2) | 20,918 | 587,168 | |||
IT Services — 1.2% | |||||
Akamai Technologies, Inc.(2) | 6,621 | 404,411 | |||
MAXIMUS, Inc. | 1,929 | 125,558 |
8
Shares | Value | ||||
Visa, Inc., Class A | 2,288 | $ | 301,879 | ||
831,848 | |||||
Life Sciences Tools and Services — 0.7% | |||||
Agilent Technologies, Inc. | 5,518 | 372,244 | |||
Evotec AG(2) | 5,886 | 117,109 | |||
489,353 | |||||
Machinery — 2.4% | |||||
Allison Transmission Holdings, Inc. | 6,121 | 268,773 | |||
DMG Mori Co. Ltd. | 28,400 | 316,972 | |||
Parker-Hannifin Corp.(1) | 3,862 | 575,979 | |||
Snap-on, Inc. | 3,586 | 521,010 | |||
1,682,734 | |||||
Metals and Mining — 4.6% | |||||
Anglo American plc | 27,801 | 619,336 | |||
BHP Group plc | 21,985 | 462,813 | |||
Compass Minerals International, Inc. | 3,384 | 141,079 | |||
Evraz plc | 34,801 | 213,137 | |||
Freeport-McMoRan, Inc. | 40,320 | 415,699 | |||
Iluka Resources Ltd. | 67,770 | 363,731 | |||
St. Barbara Ltd. | 143,069 | 473,622 | |||
Steel Dynamics, Inc. | 18,811 | 565,082 | |||
3,254,499 | |||||
Multiline Retail — 0.7% | |||||
Kohl's Corp. | 7,428 | 492,774 | |||
Oil, Gas and Consumable Fuels — 6.3% | |||||
Aker BP ASA | 16,834 | 426,297 | |||
ConocoPhillips | 3,618 | 225,582 | |||
Continental Resources, Inc.(2) | 12,884 | 517,808 | |||
Cosmo Energy Holdings Co. Ltd. | 26,600 | 541,450 | |||
CVR Energy, Inc. | 15,992 | 551,404 | |||
Etablissements Maurel et Prom(2) | 50,959 | 188,588 | |||
Gaztransport Et Technigaz SA | 6,030 | 463,931 | |||
Lundin Petroleum AB | 2,048 | 51,203 | |||
Newfield Exploration Co.(2) | 30,515 | 447,350 | |||
Showa Shell Sekiyu KK | 43,600 | 610,569 | |||
Whitehaven Coal Ltd. | 140,832 | 428,522 | |||
4,452,704 | |||||
Paper and Forest Products — 1.4% | |||||
Domtar Corp.(1) | 14,891 | 523,121 | |||
Louisiana-Pacific Corp.(1) | 22,210 | 493,506 | |||
1,016,627 | |||||
Personal Products — 0.8% | |||||
Edgewell Personal Care Co.(2) | 14,145 | 528,316 | |||
Pharmaceuticals — 2.3% | |||||
Allergan plc | 1,115 | 149,031 | |||
Astellas Pharma, Inc. | 11,700 | 148,896 | |||
Eisai Co. Ltd. | 2,000 | 155,729 | |||
H Lundbeck A/S | 3,892 | 170,671 | |||
Horizon Pharma plc(2) | 10,021 | 195,810 | |||
KYORIN Holdings, Inc. | 5,500 | 121,166 | |||
Mylan NV(2) | 5,846 | 160,180 |
9
Shares | Value | ||||
Roche Holding AG | 650 | $ | 160,728 | ||
Sawai Pharmaceutical Co. Ltd. | 1,600 | 75,834 | |||
Shionogi & Co. Ltd. | 2,900 | 164,441 | |||
Zoetis, Inc. | 1,124 | 96,147 | |||
1,598,633 | |||||
Professional Services — 3.0% | |||||
ASGN, Inc.(1)(2) | 8,079 | 440,305 | |||
CoStar Group, Inc.(1)(2) | 1,676 | 565,382 | |||
Korn/Ferry International | 12,987 | 513,506 | |||
Robert Half International, Inc. | 9,779 | 559,359 | |||
2,078,552 | |||||
Real Estate Management and Development — 0.1% | |||||
Swire Properties Ltd. | 30,000 | 105,357 | |||
Road and Rail — 1.3% | |||||
Sankyu, Inc. | 12,600 | 566,798 | |||
Schneider National, Inc., Class B | 19,133 | 357,213 | |||
924,011 | |||||
Semiconductors and Semiconductor Equipment — 2.9% | |||||
Cirrus Logic, Inc.(1)(2) | 16,009 | 531,179 | |||
Dialog Semiconductor plc(2) | 22,954 | 596,715 | |||
Intel Corp. | 7,796 | 365,866 | |||
Qorvo, Inc.(1)(2) | 9,354 | 568,068 | |||
2,061,828 | |||||
Software — 2.0% | |||||
Cadence Design Systems, Inc.(2) | 9,597 | 417,278 | |||
LogMeIn, Inc. | 5,992 | 488,767 | |||
Symantec Corp. | 9,211 | 174,042 | |||
Teradata Corp.(2) | 7,826 | 300,205 | |||
1,380,292 | |||||
Specialty Retail — 3.1% | |||||
American Eagle Outfitters, Inc. | 5,257 | 101,618 | |||
AutoZone, Inc.(1)(2) | 610 | 511,387 | |||
Foot Locker, Inc. | 6,541 | 347,981 | |||
Super Retail Group Ltd. | 21,774 | 107,816 | |||
T-Gaia Corp. | 30,900 | 581,957 | |||
Urban Outfitters, Inc.(2) | 16,729 | 555,403 | |||
2,206,162 | |||||
Technology Hardware, Storage and Peripherals — 1.7% | |||||
Logitech International SA | 6,247 | 197,383 | |||
Seagate Technology plc(1) | 13,377 | 516,219 | |||
Toshiba TEC Corp. | 21,400 | 497,423 | |||
1,211,025 | |||||
Textiles, Apparel and Luxury Goods — 2.3% | |||||
Deckers Outdoor Corp.(1)(2) | 4,773 | 610,706 | |||
Michael Kors Holdings Ltd.(2) | 10,421 | 395,164 | |||
Steven Madden Ltd. | 2,304 | 69,719 | |||
Tapestry, Inc. | 16,820 | 567,675 | |||
1,643,264 | |||||
Thrifts and Mortgage Finance — 0.8% | |||||
Essent Group Ltd.(2) | 16,564 | 566,157 |
10
Shares | Value | ||||
Trading Companies and Distributors — 2.2% | |||||
HD Supply Holdings, Inc.(2) | 15,252 | $ | 572,255 | ||
Sojitz Corp. | 112,500 | 388,077 | |||
W.W. Grainger, Inc. | 2,012 | 568,108 | |||
1,528,440 | |||||
Wireless Telecommunication Services — 0.8% | |||||
Telephone & Data Systems, Inc. | 16,991 | 552,887 | |||
TOTAL COMMON STOCKS (Cost $69,780,734) | 64,558,984 | ||||
TEMPORARY CASH INVESTMENTS — 6.7% | |||||
Repurchase Agreement, BMO Capital Markets Corp., (collateralized by various U.S. Treasury obligations, 0.125% - 2.75%, 10/31/19 - 2/15/44, valued at $4,145,867), in a joint trading account at 2.45%, dated 12/31/18, due 1/2/19 (Delivery value $4,065,658) | 4,065,105 | ||||
Repurchase Agreement, Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 3.375%, 11/15/48, valued at $694,740), at 1.25%, dated 12/31/18, due 1/2/19 (Delivery value $678,047) | 678,000 | ||||
State Street Institutional U.S. Government Money Market Fund, Premier Class | 3,455 | 3,455 | |||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $4,746,560) | 4,746,560 | ||||
TOTAL INVESTMENT SECURITIES BEFORE SECURITIES SOLD SHORT — 98.5% (Cost $74,527,294) | 69,305,544 | ||||
COMMON STOCKS SOLD SHORT — (90.9)% | |||||
Aerospace and Defense — (1.5)% | |||||
BWX Technologies, Inc. | (13,612 | ) | (520,387 | ) | |
United Technologies Corp. | (4,860 | ) | (517,493 | ) | |
(1,037,880 | ) | ||||
Airlines — (0.9)% | |||||
Allegiant Travel Co. | (4,242 | ) | (425,133 | ) | |
Spirit Airlines, Inc. | (3,243 | ) | (187,835 | ) | |
(612,968 | ) | ||||
Automobiles — (1.3)% | |||||
Daimler AG | (11,120 | ) | (584,652 | ) | |
Ford Motor Co. | (33,252 | ) | (254,378 | ) | |
Volkswagen AG Preference Shares | (700 | ) | (111,394 | ) | |
(950,424 | ) | ||||
Banks — (4.5)% | |||||
Bankia SA | (107,397 | ) | (315,008 | ) | |
First Financial Bancorp | (22,880 | ) | (542,713 | ) | |
First Midwest Bancorp, Inc. | (8,175 | ) | (161,947 | ) | |
Home BancShares, Inc. | (8,114 | ) | (132,583 | ) | |
Old National Bancorp | (13,670 | ) | (210,518 | ) | |
Pinnacle Financial Partners, Inc. | (11,841 | ) | (545,870 | ) | |
Simmons First National Corp., Class A | (6,811 | ) | (164,349 | ) | |
Sterling Bancorp | (3,249 | ) | (53,641 | ) | |
Union Bankshares Corp. | (17,529 | ) | (494,844 | ) | |
United Bankshares, Inc. | (17,827 | ) | (554,598 | ) | |
(3,176,071 | ) | ||||
Beverages — (1.2)% | |||||
Brown-Forman Corp., Class B | (12,475 | ) | (593,561 | ) | |
Sapporo Holdings Ltd. | (12,000 | ) | (249,112 | ) | |
(842,673 | ) |
11
Shares | Value | ||||
Biotechnology — (1.5)% | |||||
Alnylam Pharmaceuticals, Inc. | (2,313 | ) | $ | (168,641 | ) |
Bluebird Bio, Inc. | (832 | ) | (82,534 | ) | |
Global Blood Therapeutics, Inc. | (3,968 | ) | (162,886 | ) | |
Immunomedics, Inc. | (8,940 | ) | (127,574 | ) | |
Madrigal Pharmaceuticals, Inc. | (341 | ) | (38,438 | ) | |
Sage Therapeutics, Inc. | (1,223 | ) | (117,151 | ) | |
Sarepta Therapeutics, Inc. | (1,612 | ) | (175,918 | ) | |
Ultragenyx Pharmaceutical, Inc. | (4,288 | ) | (186,442 | ) | |
(1,059,584 | ) | ||||
Capital Markets — (2.8)% | |||||
Ares Management Corp., Class A | (17,340 | ) | (308,305 | ) | |
Brookfield Asset Management, Inc., Class A | (13,259 | ) | (508,483 | ) | |
CME Group, Inc. | (3,178 | ) | (597,845 | ) | |
Hamilton Lane, Inc., Class A | (14,479 | ) | (535,723 | ) | |
(1,950,356 | ) | ||||
Chemicals — (3.0)% | |||||
Albemarle Corp. | (1,725 | ) | (132,946 | ) | |
DowDuPont, Inc. | (1,417 | ) | (75,781 | ) | |
International Flavors & Fragrances, Inc. | (4,249 | ) | (570,513 | ) | |
Platform Specialty Products Corp. | (30,895 | ) | (319,145 | ) | |
Sensient Technologies Corp. | (9,040 | ) | (504,884 | ) | |
Umicore SA | (12,340 | ) | (492,870 | ) | |
(2,096,139 | ) | ||||
Commercial Services and Supplies — (0.6)% | |||||
Elis SA | (21,703 | ) | (361,804 | ) | |
Healthcare Services Group, Inc. | (1,707 | ) | (68,587 | ) | |
(430,391 | ) | ||||
Construction and Engineering — (2.6)% | |||||
Fluor Corp. | (13,379 | ) | (430,804 | ) | |
JGC Corp. | (22,800 | ) | (318,273 | ) | |
Penta-Ocean Construction Co. Ltd. | (63,700 | ) | (350,031 | ) | |
Skanska AB, B Shares | (11,640 | ) | (185,852 | ) | |
Valmont Industries, Inc. | (4,604 | ) | (510,814 | ) | |
(1,795,774 | ) | ||||
Consumer Finance — (0.7)% | |||||
SLM Corp. | (63,365 | ) | (526,563 | ) | |
Containers and Packaging — (2.1)% | |||||
AptarGroup, Inc. | (5,806 | ) | (546,171 | ) | |
Crown Holdings, Inc. | (8,309 | ) | (345,405 | ) | |
Graphic Packaging Holding Co. | (55,435 | ) | (589,828 | ) | |
(1,481,404 | ) | ||||
Diversified Financial Services — (0.4)% | |||||
Berkshire Hathaway, Inc., Class B | (1,330 | ) | (271,559 | ) | |
Diversified Telecommunication Services — (1.9)% | |||||
Cellnex Telecom SA | (23,141 | ) | (593,644 | ) | |
Iliad SA | (3,798 | ) | (533,719 | ) | |
Zayo Group Holdings, Inc. | (10,291 | ) | (235,046 | ) | |
(1,362,409 | ) | ||||
Electric Utilities — (2.3)% | |||||
Alliant Energy Corp. | (12,700 | ) | (536,575 | ) |
12
Shares | Value | ||||
Duke Energy Corp. | (4,874 | ) | $ | (420,626 | ) |
Eversource Energy | (9,904 | ) | (644,156 | ) | |
(1,601,357 | ) | ||||
Electrical Equipment — (0.3)% | |||||
EnerSys | (3,044 | ) | (236,245 | ) | |
Electronic Equipment, Instruments and Components — (2.9)% | |||||
Amphenol Corp., Class A | (6,381 | ) | (516,988 | ) | |
Avnet, Inc. | (14,719 | ) | (531,356 | ) | |
AVX Corp. | (10,704 | ) | (163,236 | ) | |
Cognex Corp. | (7,761 | ) | (300,118 | ) | |
II-VI, Inc. | (16,137 | ) | (523,807 | ) | |
(2,035,505 | ) | ||||
Energy Equipment and Services — (1.2)% | |||||
Oceaneering International, Inc. | (35,480 | ) | (429,308 | ) | |
Patterson-UTI Energy, Inc. | (36,874 | ) | (381,646 | ) | |
(810,954 | ) | ||||
Equity Real Estate Investment Trusts (REITs) — (5.3)% | |||||
Alexandria Real Estate Equities, Inc. | (4,808 | ) | (554,074 | ) | |
Crown Castle International Corp. | (2,991 | ) | (324,912 | ) | |
CyrusOne, Inc. | (9,982 | ) | (527,848 | ) | |
Digital Realty Trust, Inc. | (3,625 | ) | (386,244 | ) | |
Equinix, Inc. | (1,577 | ) | (555,987 | ) | |
Invitation Homes, Inc. | (26,757 | ) | (537,281 | ) | |
Iron Mountain, Inc. | (9,538 | ) | (309,127 | ) | |
ProLogis, Inc. | (8,814 | ) | (517,558 | ) | |
(3,713,031 | ) | ||||
Food and Staples Retailing — (0.1)% | |||||
PriceSmart, Inc. | (852 | ) | (50,353 | ) | |
Food Products — (2.9)% | |||||
Archer-Daniels-Midland Co. | (4,344 | ) | (177,974 | ) | |
Bunge Ltd. | (1,555 | ) | (83,099 | ) | |
Darling Ingredients, Inc. | (22,638 | ) | (435,555 | ) | |
J&J Snack Foods Corp. | (1,717 | ) | (248,261 | ) | |
Sanderson Farms, Inc. | (3,844 | ) | (381,671 | ) | |
Schouw & Co. A/S | (6,751 | ) | (502,632 | ) | |
Seaboard Corp. | (69 | ) | (244,123 | ) | |
(2,073,315 | ) | ||||
Gas Utilities — (0.1)% | |||||
South Jersey Industries, Inc. | (1,713 | ) | (47,621 | ) | |
Health Care Equipment and Supplies — (3.2)% | |||||
Avanos Medical, Inc. | (12,401 | ) | (555,441 | ) | |
Insulet Corp. | (4,555 | ) | (361,303 | ) | |
Merit Medical Systems, Inc. | (8,077 | ) | (450,777 | ) | |
Teleflex, Inc. | (1,262 | ) | (326,202 | ) | |
Wright Medical Group NV | (21,293 | ) | (579,595 | ) | |
(2,273,318 | ) | ||||
Health Care Providers and Services — (0.9)% | |||||
Henry Schein, Inc. | (7,883 | ) | (618,973 | ) | |
Health Care Technology — (0.7)% | |||||
Medidata Solutions, Inc. | (6,971 | ) | (469,985 | ) |
13
Shares | Value | ||||
Hotels, Restaurants and Leisure — (3.2)% | |||||
Churchill Downs, Inc. | (1,760 | ) | $ | (429,334 | ) |
HIS Co. Ltd. | (16,700 | ) | (602,675 | ) | |
Marriott International, Inc., Class A | (5,060 | ) | (549,314 | ) | |
Planet Fitness, Inc., Class A | (5,789 | ) | (310,406 | ) | |
Scientific Games Corp., Class A | (3,462 | ) | (61,901 | ) | |
Tosho Co. Ltd. | (10,600 | ) | (328,641 | ) | |
(2,282,271 | ) | ||||
Household Durables — (2.0)% | |||||
Leggett & Platt, Inc. | (16,176 | ) | (579,748 | ) | |
Mohawk Industries, Inc. | (2,814 | ) | (329,125 | ) | |
Tempur Sealy International, Inc. | (12,614 | ) | (522,220 | ) | |
(1,431,093 | ) | ||||
Independent Power and Renewable Electricity Producers — (0.8)% | |||||
Ormat Technologies, Inc. | (10,975 | ) | (573,992 | ) | |
Insurance — (3.2)% | |||||
American International Group, Inc. | (8,288 | ) | (326,630 | ) | |
Aon plc | (2,252 | ) | (327,351 | ) | |
Enstar Group Ltd. | (2,755 | ) | (461,655 | ) | |
Marsh & McLennan Cos., Inc. | (3,028 | ) | (241,483 | ) | |
RLI Corp. | (4,706 | ) | (324,667 | ) | |
WR Berkley Corp. | (7,851 | ) | (580,268 | ) | |
(2,262,054 | ) | ||||
Internet and Direct Marketing Retail — (0.8)% | |||||
Wayfair, Inc., Class A | (6,422 | ) | (578,494 | ) | |
IT Services — (2.8)% | |||||
Altran Technologies SA | (67,574 | ) | (542,347 | ) | |
Gartner, Inc. | (4,182 | ) | (534,627 | ) | |
Global Payments, Inc. | (3,291 | ) | (339,401 | ) | |
Worldpay, Inc., Class A | (7,448 | ) | (569,251 | ) | |
(1,985,626 | ) | ||||
Life Sciences Tools and Services — (1.8)% | |||||
Bio-Techne Corp. | (1,167 | ) | (168,888 | ) | |
IQVIA Holdings, Inc. | (4,793 | ) | (556,803 | ) | |
PerkinElmer, Inc. | (6,888 | ) | (541,052 | ) | |
(1,266,743 | ) | ||||
Machinery — (3.6)% | |||||
Donaldson Co., Inc. | (12,382 | ) | (537,255 | ) | |
Dover Corp. | (727 | ) | (51,581 | ) | |
Fortive Corp. | (5,328 | ) | (360,492 | ) | |
John Bean Technologies Corp. | (6,580 | ) | (472,510 | ) | |
Middleby Corp. (The) | (5,154 | ) | (529,470 | ) | |
Stanley Black & Decker, Inc. | (4,908 | ) | (587,684 | ) | |
(2,538,992 | ) | ||||
Marine — (0.8)% | |||||
Nippon Yusen KK | (35,900 | ) | (556,259 | ) | |
Media — (0.9)% | |||||
New York Times Co. (The), Class A | (26,975 | ) | (601,273 | ) | |
Metals and Mining — (3.4)% | |||||
Agnico Eagle Mines Ltd. | (6,460 | ) | (260,984 | ) | |
Alcoa Corp. | (11,027 | ) | (293,098 | ) |
14
Shares | Value | ||||
AMG Advanced Metallurgical Group NV | (9,255 | ) | $ | (298,818 | ) |
Cleveland-Cliffs, Inc. | (52,199 | ) | (401,410 | ) | |
Dowa Holdings Co. Ltd. | (19,000 | ) | (567,083 | ) | |
Goldcorp, Inc. | (61,898 | ) | (606,601 | ) | |
(2,427,994 | ) | ||||
Mortgage Real Estate Investment Trusts (REITs) — (1.9)% | |||||
AGNC Investment Corp. | (33,374 | ) | (585,380 | ) | |
Blackstone Mortgage Trust, Inc., Class A | (5,582 | ) | (177,843 | ) | |
Starwood Property Trust, Inc. | (28,486 | ) | (561,459 | ) | |
(1,324,682 | ) | ||||
Multi-Utilities — (1.2)% | |||||
NiSource, Inc. | (8,641 | ) | (219,050 | ) | |
Sempra Energy | (5,601 | ) | (605,972 | ) | |
(825,022 | ) | ||||
Multiline Retail — (0.3)% | |||||
Ollie's Bargain Outlet Holdings, Inc. | (3,565 | ) | (237,108 | ) | |
Oil, Gas and Consumable Fuels — (4.6)% | |||||
Centennial Resource Development, Inc., Class A | (22,575 | ) | (248,776 | ) | |
Concho Resources, Inc. | (4,628 | ) | (475,712 | ) | |
Diamondback Energy, Inc. | (5,520 | ) | (511,704 | ) | |
Extraction Oil & Gas, Inc. | (29,668 | ) | (127,276 | ) | |
Matador Resources Co. | (20,216 | ) | (313,954 | ) | |
Noble Energy, Inc. | (16,321 | ) | (306,182 | ) | |
PDC Energy, Inc. | (8,205 | ) | (244,181 | ) | |
Targa Resources Corp. | (13,379 | ) | (481,912 | ) | |
Williams Cos., Inc. (The) | (24,480 | ) | (539,784 | ) | |
(3,249,481 | ) | ||||
Personal Products — (0.3)% | |||||
Coty, Inc., Class A | (28,347 | ) | (185,956 | ) | |
Pharmaceuticals — (0.5)% | |||||
Aerie Pharmaceuticals, Inc. | (4,688 | ) | (169,237 | ) | |
Catalent, Inc. | (4,793 | ) | (149,446 | ) | |
(318,683 | ) | ||||
Professional Services — (1.0)% | |||||
Nielsen Holdings plc | (22,432 | ) | (523,339 | ) | |
TransUnion | (2,123 | ) | (120,586 | ) | |
TriNet Group, Inc. | (1,930 | ) | (80,963 | ) | |
(724,888 | ) | ||||
Real Estate Management and Development — (2.0)% | |||||
Capital & Counties Properties plc | (144,033 | ) | (424,263 | ) | |
Howard Hughes Corp. (The) | (4,869 | ) | (475,312 | ) | |
Kennedy-Wilson Holdings, Inc. | (27,312 | ) | (496,259 | ) | |
(1,395,834 | ) | ||||
Road and Rail — (1.3)% | |||||
AMERCO | (879 | ) | (288,409 | ) | |
Europcar Mobility Group | (67,523 | ) | (608,471 | ) | |
(896,880 | ) | ||||
Semiconductors and Semiconductor Equipment — (2.4)% | |||||
ams AG | (4,067 | ) | (98,068 | ) | |
Cree, Inc. | (15,241 | ) | (651,934 | ) | |
First Solar, Inc. | (9,235 | ) | (392,072 | ) |
15
Shares | Value | ||||
SCREEN Holdings Co. Ltd. | (13,300 | ) | $ | (561,800 | ) |
(1,703,874 | ) | ||||
Software — (0.4)% | |||||
2U, Inc. | (5,537 | ) | (275,300 | ) | |
Specialty Retail — (1.6)% | |||||
Kingfisher plc | (194,972 | ) | (515,661 | ) | |
Monro, Inc. | (8,604 | ) | (591,525 | ) | |
(1,107,186 | ) | ||||
Textiles, Apparel and Luxury Goods — (0.3)% | |||||
Cie Financiere Richemont SA | (3,732 | ) | (239,846 | ) | |
Thrifts and Mortgage Finance — (1.0)% | |||||
TFS Financial Corp. | (42,232 | ) | (681,202 | ) | |
Trading Companies and Distributors — (2.7)% | |||||
GATX Corp. | (7,634 | ) | (540,563 | ) | |
Hanwa Co. Ltd. | (22,100 | ) | (573,523 | ) | |
NOW, Inc. | (25,458 | ) | (296,331 | ) | |
SiteOne Landscape Supply, Inc. | (9,254 | ) | (511,469 | ) | |
(1,921,886 | ) | ||||
Water Utilities — (1.2)% | |||||
American Water Works Co., Inc. | (5,781 | ) | (524,742 | ) | |
Aqua America, Inc. | (9,433 | ) | (322,514 | ) | |
(847,256 | ) | ||||
TOTAL COMMON STOCKS SOLD SHORT (Proceeds $73,647,579) | (63,964,727 | ) | |||
OTHER ASSETS AND LIABILITIES(3) — 92.4% | 64,990,937 | ||||
TOTAL NET ASSETS — 100.0% | $ | 70,331,754 |
NOTES TO SCHEDULE OF INVESTMENTS |
(1) | Security, or a portion thereof, has been pledged at the custodian bank or with a broker for collateral requirements on securities sold short. At the period end, the aggregate value of securities pledged was $13,402,732. |
(2) | Non-income producing. |
(3) | Amount relates primarily to deposits for securities sold short at period end. |
See Notes to Financial Statements.
16
Statement of Assets and Liabilities |
DECEMBER 31, 2018 (UNAUDITED) | |||
Assets | |||
Investment securities, at value (cost of $74,527,294) | $ | 69,305,544 | |
Deposits for securities sold short | 65,172,225 | ||
Receivable for capital shares sold | 19,637 | ||
Interest and dividends receivable | 200,236 | ||
134,697,642 | |||
Liabilities | |||
Securities sold short, at value (proceeds of $73,647,579) | 63,964,727 | ||
Payable for capital shares redeemed | 207,331 | ||
Accrued management fees | 82,579 | ||
Distribution and service fees payable | 5,527 | ||
Dividend expense payable on securities sold short | 105,724 | ||
64,365,888 | |||
Net Assets | $ | 70,331,754 | |
Net Assets Consist of: | |||
Capital (par value and paid-in surplus) | $ | 69,680,929 | |
Distributable earnings | 650,825 | ||
$ | 70,331,754 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | ||||
Investor Class, $0.01 Par Value | $37,152,891 | 3,391,382 | $10.96 | |||
I Class, $0.01 Par Value | $19,330,052 | 1,720,412 | $11.24 | |||
Y Class, $0.01 Par Value | $3,331,677 | 296,372 | $11.24 | |||
A Class, $0.01 Par Value | $3,429,921 | 322,747 | $10.63* | |||
C Class, $0.01 Par Value | $4,664,701 | 483,443 | $9.65 | |||
R Class, $0.01 Par Value | $2,417,178 | 234,792 | $10.29 | |||
R5 Class, $0.01 Par Value | $5,334 | 475 | $11.23 |
See Notes to Financial Statements.
17
Statement of Operations |
FOR THE SIX MONTHS ENDED DECEMBER 31, 2018 (UNAUDITED) | |||
Investment Income (Loss) | |||
Income: | |||
Interest | $ | 647,432 | |
Dividends (net of foreign taxes withheld of $18,847) | 602,416 | ||
1,249,848 | |||
Expenses: | |||
Dividend expense on securities sold short | 608,791 | ||
Management fees | 507,168 | ||
Distribution and service fees: | |||
A Class | 4,467 | ||
C Class | 23,364 | ||
R Class | 6,255 | ||
Directors' fees and expenses | 2,718 | ||
Other expenses | 107 | ||
1,152,870 | |||
Net investment income (loss) | 96,978 | ||
Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investment transactions | (269,001 | ) | |
Securities sold short transactions | 1,798,148 | ||
Foreign currency translation transactions | (1,495 | ) | |
1,527,652 | |||
Change in net unrealized appreciation (depreciation) on: | |||
Investments | (10,943,959 | ) | |
Securities sold short | 10,680,215 | ||
Translation of assets and liabilities in foreign currencies | 344 | ||
(263,400 | ) | ||
Net realized and unrealized gain (loss) | 1,264,252 | ||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 1,361,230 |
See Notes to Financial Statements.
18
Statement of Changes in Net Assets |
SIX MONTHS ENDED DECEMBER 31, 2018 (UNAUDITED) AND YEAR ENDED JUNE 30, 2018 | ||||||
Increase (Decrease) in Net Assets | December 31, 2018 | June 30, 2018 | ||||
Operations | ||||||
Net investment income (loss) | $ | 96,978 | $ | (715,325 | ) | |
Net realized gain (loss) | 1,527,652 | 6,124,462 | ||||
Change in net unrealized appreciation (depreciation) | (263,400 | ) | (3,094,720 | ) | ||
Net increase (decrease) in net assets resulting from operations | 1,361,230 | 2,314,417 | ||||
Distributions to Shareholders | ||||||
From earnings: | ||||||
Investor Class | (1,794,225 | ) | — | |||
I Class | (1,330,784 | ) | — | |||
Y Class | (145,291 | ) | — | |||
A Class | (169,123 | ) | — | |||
C Class | (242,745 | ) | — | |||
R Class | (122,773 | ) | — | |||
R5 Class | (247 | ) | — | |||
Decrease in net assets from distributions | (3,805,188 | ) | — | |||
Capital Share Transactions | ||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | (4,972,123 | ) | (39,883,856 | ) | ||
Net increase (decrease) in net assets | (7,416,081 | ) | (37,569,439 | ) | ||
Net Assets | ||||||
Beginning of period | 77,747,835 | 115,317,274 | ||||
End of period | $ | 70,331,754 | $ | 77,747,835 |
See Notes to Financial Statements.
19
Notes to Financial Statements |
DECEMBER 31, 2018 (UNAUDITED)
1. Organization
American Century Quantitative Equity 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. AC Alternatives Equity Market Neutral Fund (the fund) is one fund in a series issued by the corporation. The fund’s investment objective is to seek capital appreciation independent of equity market conditions.
The fund offers the Investor Class, I Class, Y Class, A Class, C Class, R Class and R5 Class. The A Class may incur an initial sales charge. The A Class and C Class may be subject to a contingent deferred sales charge.
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
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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.
Securities Sold Short — The fund enters into short sales, which is selling securities it does not own, as part of its normal investment activities. Upon selling a security short, the fund will segregate cash, cash equivalents or other appropriate liquid securities in at least an amount equal to the current market value of the securities sold short until the fund replaces the borrowed security. Interest earned on segregated cash for securities sold short, if any, is reflected as interest income. The fund is required to pay any dividends or interest due on securities sold short. Such dividends and interest are recorded as an expense. The fund may pay fees or charges on the assets borrowed for securities sold short. These fees are calculated daily based upon the value of each security sold short and a rate that is dependent on the availability of such security. Liabilities for securities sold short are valued daily and changes in value are recorded as change in net unrealized appreciation (depreciation) on securities sold short. The fund records realized gain (loss) on a security sold short when it is terminated by the fund and includes as a component of net realized gain (loss) on securities sold short transactions.
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. Net realized and unrealized foreign currency exchange gains or losses related to securities sold short are a component of net realized gain (loss) on securities sold short transactions and change in net unrealized appreciation (depreciation) on securities sold short, 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.
Segregated Assets — In accordance with the 1940 Act, the fund segregates assets on its books and records to cover certain types of investment securities and other financial instruments. ACIM monitors, on a daily basis, the securities segregated to ensure the fund designates a sufficient amount of liquid assets, marked-to-market daily. The fund may also receive assets or be required to pledge assets at the custodian bank or with a broker for collateral requirements.
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
21
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, if any, are generally declared and paid semiannually. Distributions from 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.
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, expenses on securities sold short, 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 fee consists of (1) an Investment Category Fee based on the daily net assets of the fund and certain other accounts managed by the investment advisor that are in the same broad investment category as the fund and (2) a Complex Fee based on the assets of all the funds in the American Century Investments family of funds.
The Investment Category Fee range, the Complex Fee range and the effective annual management fee for each class for the period ended December 31, 2018 are as follows:
Investment Category Fee Range | Complex Fee Range | Effective Annual Management Fee | |
Investor Class | 1.0480% to 1.2300% | 0.2500% to 0.3100% | 1.37% |
I Class | 0.0500% to 0.1100% | 1.17% | |
Y Class | 0.0000% to 0.0600% | 1.12% | |
A Class | 0.2500% to 0.3100% | 1.37% | |
C Class | 0.2500% to 0.3100% | 1.37% | |
R Class | 0.2500% to 0.3100% | 1.37% | |
R5 Class | 0.0500% to 0.1100% | 1.17% |
Distribution and Service Fees — The Board of Directors has adopted a separate Master Distribution and Individual Shareholder Services Plan for each of the A Class, C Class and R Class (collectively the plans), pursuant to Rule 12b-1 of the 1940 Act. The plans provide that the A Class will pay ACIS an annual distribution and service fee of 0.25%. The plans provide that the C Class will pay ACIS an annual distribution and service fee of 1.00%, of which 0.25% is paid for individual shareholder services and 0.75% is paid for distribution services. The plans provide that the R Class will pay ACIS an annual distribution and service fee of 0.50%. The fees are computed and accrued daily based on each class’s daily net assets and paid monthly in arrears. The fees are used to pay financial intermediaries for distribution and individual shareholder services. Fees
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incurred under the plans during the period ended December 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 and securities sold short, excluding short-term investments, for the period ended December 31, 2018 were $118,621,126 and $119,638,399, respectively.
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended December 31, 2018 | Year ended June 30, 2018 | |||||||||
Shares | Amount | Shares | Amount | |||||||
Investor Class/Shares Authorized | 70,000,000 | 70,000,000 | ||||||||
Sold | 366,061 | $ | 4,112,350 | 906,191 | $ | 10,253,405 | ||||
Issued in reinvestment of distributions | 166,521 | 1,788,434 | — | — | ||||||
Redeemed | (394,722 | ) | (4,408,469 | ) | (4,913,854 | ) | (55,483,172 | ) | ||
137,860 | 1,492,315 | (4,007,663 | ) | (45,229,767 | ) | |||||
I Class/Shares Authorized | 30,000,000 | 30,000,000 | ||||||||
Sold | 278,199 | 3,200,528 | 4,254,423 | 49,144,474 | ||||||
Issued in reinvestment of distributions | 120,860 | 1,330,671 | — | — | ||||||
Redeemed | (1,178,309 | ) | (13,251,114 | ) | (3,617,623 | ) | (42,188,226 | ) | ||
(779,250 | ) | (8,719,915 | ) | 636,800 | 6,956,248 | |||||
Y Class/Shares Authorized | 50,000,000 | 50,000,000 | ||||||||
Sold | 220,876 | 2,542,006 | 65,935 | 770,788 | ||||||
Issued in reinvestment of distributions | 13,196 | 145,291 | — | — | ||||||
Redeemed | (3,587 | ) | (40,955 | ) | (484 | ) | (5,632 | ) | ||
230,485 | 2,646,342 | 65,451 | 765,156 | |||||||
A Class/Shares Authorized | 20,000,000 | 20,000,000 | ||||||||
Sold | 63,421 | 696,213 | 94,048 | 1,043,367 | ||||||
Issued in reinvestment of distributions | 15,992 | 166,638 | — | — | ||||||
Redeemed | (98,351 | ) | (1,078,037 | ) | (203,489 | ) | (2,256,379 | ) | ||
(18,938 | ) | (215,186 | ) | (109,441 | ) | (1,213,012 | ) | |||
C Class/Shares Authorized | 20,000,000 | 20,000,000 | ||||||||
Sold | 50,395 | 495,036 | 278,923 | 2,846,030 | ||||||
Issued in reinvestment of distributions | 25,091 | 237,364 | — | — | ||||||
Redeemed | (84,526 | ) | (840,161 | ) | (307,223 | ) | (3,114,851 | ) | ||
(9,040 | ) | (107,761 | ) | (28,300 | ) | (268,821 | ) | |||
R Class/Shares Authorized | 20,000,000 | 20,000,000 | ||||||||
Sold | 8,997 | 95,309 | 34,986 | 375,985 | ||||||
Issued in reinvestment of distributions | 12,166 | 122,762 | — | — | ||||||
Redeemed | (26,506 | ) | (280,477 | ) | (118,537 | ) | (1,275,653 | ) | ||
(5,343 | ) | (62,406 | ) | (83,551 | ) | (899,668 | ) | |||
R5 Class/Shares Authorized | 50,000,000 | 50,000,000 | ||||||||
Sold | 30 | 341 | 517 | 6,031 | ||||||
Issued in reinvestment of distributions | 22 | 247 | — | — | ||||||
Redeemed | (528 | ) | (6,100 | ) | (2 | ) | (23 | ) | ||
(476 | ) | (5,512 | ) | 515 | 6,008 | |||||
Net increase (decrease) | (444,702 | ) | $ | (4,972,123 | ) | (3,526,189 | ) | $ | (39,883,856 | ) |
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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.
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 | ||||||||
Auto Components | — | $ | 80,024 | — | ||||
Automobiles | — | 53,214 | — | |||||
Biotechnology | $ | 1,149,682 | 173,909 | — | ||||
Commercial Services and Supplies | 1,448,504 | 298,340 | — | |||||
Energy Equipment and Services | 542,711 | 273,617 | — | |||||
Entertainment | 240,518 | 660,495 | — | |||||
Equity Real Estate Investment Trusts (REITs) | 2,417,599 | 602,561 | — | |||||
Food Products | 307,821 | 1,044,973 | — | |||||
Hotels, Restaurants and Leisure | 435,647 | 419,002 | — | |||||
Household Durables | 1,361,032 | 235,969 | — | |||||
Life Sciences Tools and Services | 372,244 | 117,109 | — | |||||
Machinery | 1,365,762 | 316,972 | — | |||||
Metals and Mining | 1,121,860 | 2,132,639 | — | |||||
Oil, Gas and Consumable Fuels | 1,742,144 | 2,710,560 | — | |||||
Pharmaceuticals | 601,168 | 997,465 | — | |||||
Real Estate Management and Development | — | 105,357 | — | |||||
Road and Rail | 357,213 | 566,798 | — | |||||
Semiconductors and Semiconductor Equipment | 1,465,113 | 596,715 | — | |||||
Specialty Retail | 1,516,389 | 689,773 | — | |||||
Technology Hardware, Storage and Peripherals | 516,219 | 694,806 | — | |||||
Trading Companies and Distributors | 1,140,363 | 388,077 | — | |||||
Other Industries | 33,298,620 | — | — | |||||
Temporary Cash Investments | 3,455 | 4,743,105 | — | |||||
$ | 51,404,064 | $ | 17,901,480 | — | ||||
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Level 1 | Level 2 | Level 3 | ||||||
Liabilities | ||||||||
Securities Sold Short | ||||||||
Common Stocks | ||||||||
Automobiles | $ | 254,378 | $ | 696,046 | — | |||
Banks | 2,861,063 | 315,008 | — | |||||
Beverages | 593,561 | 249,112 | — | |||||
Chemicals | 1,603,269 | 492,870 | — | |||||
Commercial Services and Supplies | 68,587 | 361,804 | — | |||||
Construction and Engineering | 941,618 | 854,156 | — | |||||
Diversified Telecommunication Services | 235,046 | 1,127,363 | — | |||||
Food Products | 1,570,683 | 502,632 | — | |||||
Hotels, Restaurants and Leisure | 1,350,955 | 931,316 | — | |||||
IT Services | 1,443,279 | 542,347 | — | |||||
Marine | — | 556,259 | — | |||||
Metals and Mining | 1,562,093 | 865,901 | — | |||||
Real Estate Management and Development | 971,571 | 424,263 | — | |||||
Road and Rail | 288,409 | 608,471 | — | |||||
Semiconductors and Semiconductor Equipment | 1,044,006 | 659,868 | — | |||||
Specialty Retail | 591,525 | 515,661 | — | |||||
Textiles, Apparel and Luxury Goods | — | 239,846 | — | |||||
Trading Companies and Distributors | 1,348,363 | 573,523 | — | |||||
Other Industries | 36,719,875 | — | — | |||||
$ | 53,448,281 | $ | 10,516,446 | — |
7. Risk Factors
The fund is subject to short sales risk. If the market price of a security increases after the fund borrows the security, the fund may suffer a loss when it replaces the borrowed security at the higher price. Any loss will be increased by the amount of compensation, interest or dividends, and transaction costs the fund must pay to the lender of the borrowed security.
The fund's investment strategy utilizes leverage, which can increase market exposure and subject the fund to greater risk and higher volatility.
If the fund is overweighted in a stock or sector, any negative development related to that stock or sector will have a greater impact on the fund than other funds that are not overweighted in that stock or sector.
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.
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. Investing in emerging markets may accentuate these risks.
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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 | $ | 74,652,093 | |
Gross tax appreciation of investments | $ | 2,637,078 | |
Gross tax depreciation of investments | (7,983,627 | ) | |
Net tax appreciation (depreciation) of investments | $ | (5,346,549 | ) |
Gross tax appreciation on securities sold short | 10,950,850 | ||
Gross tax depreciation on securities sold short | (1,330,052 | ) | |
Net tax appreciation (depreciation) | $ | 4,274,249 |
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 June 30, 2018, the fund had accumulated short-term capital losses of $(1,103,887), which represent net capital loss carryovers that may be used to offset future realized capital gains for federal income tax purposes. The capital loss carryovers may be carried forward for an unlimited period. Future capital loss carryover utilization in any given year may be subject to Internal Revenue Code limitations.
As of June 30, 2018, the fund had late-year ordinary loss deferrals of $(141,802), 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.
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Financial Highlights |
For a Share Outstanding Throughout the Years Ended June 30 (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 Realized Gains | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Operating Expenses (excluding expenses on securities sold short) | Net Investment Income (Loss) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
Investor Class | ||||||||||||||
2018(3) | $11.30 | 0.01 | 0.20 | 0.21 | (0.55) | $10.96 | 1.92% | 2.92%(4) | 1.37%(4) | 0.26%(4) | 162% | $37,153 | ||
2018 | $11.11 | (0.08) | 0.27 | 0.19 | — | $11.30 | 1.71% | 3.07% | 1.38% | (0.69)% | 289% | $36,778 | ||
2017 | $11.01 | (0.13) | 0.23 | 0.10 | — | $11.11 | 0.91% | 2.92% | 1.38% | (1.17)% | 344% | $80,666 | ||
2016 | $11.12 | (0.14) | 0.03 | (0.11) | — | $11.01 | (0.99)% | 2.93% | 1.40% | (1.25)% | 235% | $84,899 | ||
2015 | $11.24 | (0.16) | 0.04 | (0.12) | — | $11.12 | (1.07)% | 2.91% | 1.38% | (1.42)% | 243% | $57,263 | ||
2014 | $10.78 | (0.17) | 0.63 | 0.46 | — | $11.24 | 4.27% | 2.92% | 1.38% | (1.56)% | 226% | $50,641 | ||
I Class | ||||||||||||||
2018(3) | $11.57 | 0.03 | 0.19 | 0.22 | (0.55) | $11.24 | 1.96% | 2.72%(4) | 1.17%(4) | 0.46%(4) | 162% | $19,330 | ||
2018 | $11.34 | (0.05) | 0.28 | 0.23 | — | $11.57 | 2.03% | 2.87% | 1.18% | (0.49)% | 289% | $28,914 | ||
2017 | $11.22 | (0.11) | 0.23 | 0.12 | — | $11.34 | 1.07% | 2.72% | 1.18% | (0.97)% | 344% | $21,132 | ||
2016 | $11.30 | (0.12) | 0.04 | (0.08) | — | $11.22 | (0.71)% | 2.73% | 1.20% | (1.05)% | 235% | $14,129 | ||
2015 | $11.41 | (0.14) | 0.03 | (0.11) | — | $11.30 | (0.96)% | 2.71% | 1.18% | (1.22)% | 243% | $9,509 | ||
2014 | $10.92 | (0.15) | 0.64 | 0.49 | — | $11.41 | 4.49% | 2.72% | 1.18% | (1.36)% | 226% | $16,810 | ||
Y Class | ||||||||||||||
2018(3) | $11.57 | 0.03 | 0.19 | 0.22 | (0.55) | $11.24 | 1.96% | 2.67%(4) | 1.12%(4) | 0.51%(4) | 162% | $3,332 | ||
2018 | $11.34 | (0.01) | 0.24 | 0.23 | — | $11.57 | 2.03% | 2.82% | 1.13% | (0.44)% | 289% | $762 | ||
2017(5) | $11.47 | (0.02) | (0.11) | (0.13) | — | $11.34 | (1.13)% | 2.67%(4) | 1.13%(4) | (0.64)%(4) | 344%(6) | $5 |
For a Share Outstanding Throughout the Years Ended June 30 (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 Realized Gains | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Operating Expenses (excluding expenses on securities sold short) | Net Investment Income (Loss) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
A Class | ||||||||||||||
2018(3) | $11.00 | —(7) | 0.18 | 0.18 | (0.55) | $10.63 | 1.79% | 3.17%(4) | 1.62%(4) | 0.01%(4) | 162% | $3,430 | ||
2018 | $10.83 | (0.10) | 0.27 | 0.17 | — | $11.00 | 1.48% | 3.32% | 1.63% | (0.94)% | 289% | $3,757 | ||
2017 | $10.76 | (0.16) | 0.23 | 0.07 | — | $10.83 | 0.65% | 3.17% | 1.63% | (1.42)% | 344% | $4,888 | ||
2016 | $10.90 | (0.17) | 0.03 | (0.14) | — | $10.76 | (1.28)% | 3.18% | 1.65% | (1.50)% | 235% | $11,113 | ||
2015 | $11.04 | (0.19) | 0.05 | (0.14) | — | $10.90 | (1.27)% | 3.16% | 1.63% | (1.67)% | 243% | $18,129 | ||
2014 | $10.62 | (0.20) | 0.62 | 0.42 | — | $11.04 | 3.95% | 3.17% | 1.63% | (1.81)% | 226% | $31,354 | ||
C Class | ||||||||||||||
2018(3) | $10.07 | (0.04) | 0.17 | 0.13 | (0.55) | $9.65 | 1.36% | 3.92%(4) | 2.37%(4) | (0.74)%(4) | 162% | $4,665 | ||
2018 | $10.00 | (0.17) | 0.24 | 0.07 | — | $10.07 | 0.70% | 4.07% | 2.38% | (1.69)% | 289% | $4,960 | ||
2017 | $10.01 | (0.22) | 0.21 | (0.01) | — | $10.00 | (0.10)% | 3.92% | 2.38% | (2.17)% | 344% | $5,207 | ||
2016 | $10.20 | (0.23) | 0.04 | (0.19) | — | $10.01 | (1.86)% | 3.93% | 2.40% | (2.25)% | 235% | $7,182 | ||
2015 | $10.42 | (0.25) | 0.03 | (0.22) | — | $10.20 | (2.11)% | 3.91% | 2.38% | (2.42)% | 243% | $6,413 | ||
2014 | $10.10 | (0.26) | 0.58 | 0.32 | — | $10.42 | 3.17% | 3.92% | 2.38% | (2.56)% | 226% | $5,729 |
For a Share Outstanding Throughout the Years Ended June 30 (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 Realized Gains | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Operating Expenses (excluding expenses on securities sold short) | Net Investment Income (Loss) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
R Class | ||||||||||||||
2018(3) | $10.68 | (0.01) | 0.17 | 0.16 | (0.55) | $10.29 | 1.66% | 3.42%(4) | 1.87%(4) | (0.24)%(4) | 162% | $2,417 | ||
2018 | $10.55 | (0.13) | 0.26 | 0.13 | — | $10.68 | 1.23% | 3.57% | 1.88% | (1.19)% | 289% | $2,565 | ||
2017 | $10.51 | (0.18) | 0.22 | 0.04 | — | $10.55 | 0.38% | 3.42% | 1.88% | (1.67)% | 344% | $3,416 | ||
2016 | $10.66 | (0.19) | 0.04 | (0.15) | — | $10.51 | (1.41)% | 3.43% | 1.90% | (1.75)% | 235% | $3,742 | ||
2015 | $10.83 | (0.21) | 0.04 | (0.17) | — | $10.66 | (1.57)% | 3.41% | 1.88% | (1.92)% | 243% | $2,187 | ||
2014 | $10.45 | (0.22) | 0.60 | 0.38 | — | $10.83 | 3.64% | 3.42% | 1.88% | (2.06)% | 226% | $1,718 | ||
R5 Class | ||||||||||||||
2018(3) | $11.56 | 0.02 | 0.20 | 0.22 | (0.55) | $11.23 | 1.96% | 2.72%(4) | 1.17%(4) | 0.46%(4) | 162% | $5 | ||
2018 | $11.34 | (0.04) | 0.26 | 0.22 | — | $11.56 | 1.94% | 2.87% | 1.18% | (0.49)% | 289% | $11 | ||
2017(5) | $11.47 | (0.02) | (0.11) | (0.13) | — | $11.34 | (1.13)% | 2.72%(4) | 1.18%(4) | (0.69)%(4) | 344%(6) | $5 |
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 and do not reflect applicable sales charges, if any. Total returns for periods less than one year are not annualized. |
(3) | Six months ended December 31, 2018 (unaudited). |
(4) | Annualized. |
(5) | April 10, 2017 (commencement of sale) through June 30, 2017. |
(6) | Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended June 30, 2017. |
(7) | Per share amount was less than $0.005. |
See Notes to Financial Statements.
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
Descriptions of the principles and policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund are available without charge, upon request, by calling 1-800-345-2021 or visiting the "About Us" page of American Century Investments’ website at americancentury.com. A description of the policies is also available 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. 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.
31
Notes |
32
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 | |
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Banks and Trust Companies, Broker-Dealers, Financial Professionals, Insurance Companies | 1-800-345-6488 | |
Telecommunications Relay Service for the Deaf | 711 | |
American Century Quantitative Equity 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. | ||
©2019 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-91452 1902 |
Semiannual Report | |
December 31, 2018 | |
Core Equity Plus Fund | |
Investor Class (ACPVX) | |
I Class (ACPKX) | |
A Class (ACPQX) | |
C Class (ACPHX) | |
R Class (ACPWX) |
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the fund’s shareholder reports like this one will no longer be sent by mail, unless you specifically request paper copies of the reports from the fund or from your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the fund or your financial intermediary electronically by calling or sending an email request to your appropriate contacts as listed on the back cover of this report.
You may elect to receive all future reports in paper free of charge. You can inform the fund or your financial intermediary that you wish to continue receiving paper copies of your shareholder reports by calling or sending an email request to your appropriate contacts as listed on the back cover of this report. Your election to receive reports in paper will apply to all funds held with the fund complex/your financial intermediary.
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 period ended December 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, please visit our website, americancentury.com.
Risk-On/Risk-Off Rotation Highlights Heightened Volatility
The six-month reporting period began on an upbeat note for stock investors. Against a backdrop of robust economic and earnings data and federal tax and regulatory reform, U.S. stocks soared. The S&P 500 Index gained nearly 8% in the first three months of the period. Outside the U.S., stocks also advanced, but the gains were more subdued amid signs of slowing growth. Meanwhile, favorable U.S. economic data and continued Federal Reserve (Fed) tightening helped push U.S. Treasury yields higher. This pressured interest rate-sensitive assets, including longer-maturity Treasuries, gold, utilities stocks, and REITs (real estate investment trusts), and they generally underperformed U.S. stocks.
In the second half of the reporting period, investor sentiment and asset-class performance took a drastic turn. Investors exited stocks on mounting concerns about slowing global economic and earnings growth and Fed policy. Along with its December interest rate increase, the Fed delivered a surprisingly bullish outlook. Investors feared the Fed’s plans for two rate hikes in 2019 were too aggressive, further fueling the steep sell-off among riskier assets. The S&P 500 Index declined more than 13% in the fourth quarter. For the entire six-month period, U.S. stocks fell 6.85%. Losses among non-U.S. stocks were even steeper.
The risk-off climate in the second half of the period sparked a flight to quality. Treasury yields plunged in the fourth quarter, triggering a year-end rally in Treasuries and other perceived safe-haven assets. Overall, Treasuries were up for the six-month period and significantly outperformed stocks and other riskier assets.
As recent performance trends indicate, market volatility remains a formidable force. But volatile markets often produce the most compelling investment opportunities. We believe this scenario underscores the importance of 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 |
DECEMBER 31, 2018 | |
Top Ten Long Holdings | % of net assets |
Apple, Inc. | 4.03% |
Microsoft Corp. | 3.93% |
Amazon.com, Inc. | 3.54% |
Alphabet, Inc., Class A | 3.51% |
JPMorgan Chase & Co. | 2.21% |
Facebook, Inc., Class A | 1.95% |
Verizon Communications, Inc. | 1.82% |
Visa, Inc., Class A | 1.79% |
Intel Corp. | 1.76% |
Bank of America Corp. | 1.75% |
Top Five Short Holdings | % of net assets |
Monro, Inc. | (0.90)% |
United Bankshares, Inc. | (0.88)% |
Cree, Inc. | (0.84)% |
Leggett & Platt, Inc. | (0.82)% |
Avanos Medical, Inc. | (0.82)% |
Types of Investments in Portfolio | % of net assets |
Common Stocks | 126.7% |
Common Stocks Sold Short | (28.5)% |
Temporary Cash Investments | 1.7% |
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 July 1, 2018 to December 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 7/1/18 | Ending Account Value 12/31/18 | Expenses Paid During Period(1) 7/1/18 - 12/31/18 | Annualized Expense Ratio(1) | |
Actual | ||||
Investor Class | $1,000 | $911.00 | $9.20 | 1.91% |
I Class | $1,000 | $911.70 | $8.24 | 1.71% |
A Class | $1,000 | $910.20 | $10.40 | 2.16% |
C Class | $1,000 | $906.10 | $13.98 | 2.91% |
R Class | $1,000 | $909.00 | $11.60 | 2.41% |
Hypothetical | ||||
Investor Class | $1,000 | $1,015.58 | $9.70 | 1.91% |
I Class | $1,000 | $1,016.59 | $8.69 | 1.71% |
A Class | $1,000 | $1,014.32 | $10.97 | 2.16% |
C Class | $1,000 | $1,010.54 | $14.75 | 2.91% |
R Class | $1,000 | $1,013.06 | $12.23 | 2.41% |
(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 |
DECEMBER 31, 2018 (UNAUDITED)
Shares | Value | ||||
COMMON STOCKS — 126.7% | |||||
Aerospace and Defense — 3.7% | |||||
Boeing Co. (The)(1) | 7,284 | $ | 2,349,090 | ||
Curtiss-Wright Corp. | 3,858 | 393,979 | |||
Raytheon Co. | 10,225 | 1,568,004 | |||
Teledyne Technologies, Inc.(2) | 740 | 153,232 | |||
Textron, Inc. | 24,832 | 1,142,023 | |||
5,606,328 | |||||
Banks — 9.7% | |||||
Bank of America Corp.(1) | 108,334 | 2,669,350 | |||
BB&T Corp. | 35,736 | 1,548,083 | |||
Citigroup, Inc. | 2,347 | 122,185 | |||
Comerica, Inc. | 17,858 | 1,226,666 | |||
Fifth Third Bancorp | 55,008 | 1,294,338 | |||
First Citizens BancShares, Inc., Class A | 1,977 | 745,428 | |||
JPMorgan Chase & Co.(1) | 34,601 | 3,377,749 | |||
SunTrust Banks, Inc. | 27,047 | 1,364,251 | |||
Wells Fargo & Co.(1) | 52,996 | 2,442,056 | |||
14,790,106 | |||||
Beverages — 1.2% | |||||
Coca-Cola Co. (The) | 28,319 | 1,340,905 | |||
Constellation Brands, Inc., Class A | 3,249 | 522,504 | |||
1,863,409 | |||||
Biotechnology — 4.1% | |||||
AbbVie, Inc. | 14,970 | 1,380,084 | |||
Alexion Pharmaceuticals, Inc.(2) | 1,321 | 128,613 | |||
Amgen, Inc. | 6,509 | 1,267,107 | |||
Biogen, Inc.(2) | 2,542 | 764,939 | |||
Celgene Corp.(2) | 10,150 | 650,514 | |||
Emergent BioSolutions, Inc.(2) | 4,062 | 240,795 | |||
Gilead Sciences, Inc. | 4,375 | 273,656 | |||
Incyte Corp.(2) | 7,041 | 447,737 | |||
Regeneron Pharmaceuticals, Inc.(2) | 1,406 | 525,141 | |||
Vertex Pharmaceuticals, Inc.(2) | 3,875 | 642,126 | |||
6,320,712 | |||||
Building Products — 0.2% | |||||
Johnson Controls International plc | 12,460 | 369,439 | |||
Capital Markets — 0.7% | |||||
LPL Financial Holdings, Inc. | 17,937 | 1,095,592 | |||
Chemicals — 0.9% | |||||
CF Industries Holdings, Inc. | 30,674 | 1,334,626 | |||
Commercial Services and Supplies — 2.7% | |||||
Clean Harbors, Inc.(2) | 12,964 | 639,773 | |||
MSA Safety, Inc. | 11,256 | 1,061,103 | |||
Republic Services, Inc. | 17,390 | 1,253,645 | |||
Waste Management, Inc. | 12,352 | 1,099,205 | |||
4,053,726 |
6
Shares | Value | ||||
Communications Equipment — 2.2% | |||||
Ciena Corp.(2) | 27,715 | $ | 939,816 | ||
Cisco Systems, Inc.(1) | 57,683 | 2,499,404 | |||
3,439,220 | |||||
Construction and Engineering — 0.1% | |||||
EMCOR Group, Inc. | 1,832 | 109,352 | |||
Consumer Finance — 2.9% | |||||
American Express Co. | 15,878 | 1,513,491 | |||
Capital One Financial Corp. | 14,572 | 1,101,497 | |||
Discover Financial Services | 22,512 | 1,327,758 | |||
Synchrony Financial | 20,518 | 481,352 | |||
4,424,098 | |||||
Containers and Packaging — 0.4% | |||||
WestRock Co. | 16,667 | 629,346 | |||
Diversified Consumer Services — 0.8% | |||||
Graham Holdings Co., Class B | 1,862 | 1,192,760 | |||
Diversified Financial Services — 1.1% | |||||
Berkshire Hathaway, Inc., Class B(2) | 8,049 | 1,643,445 | |||
Diversified Telecommunication Services — 2.0% | |||||
AT&T, Inc. | 11,655 | 332,634 | |||
Verizon Communications, Inc.(1) | 49,319 | 2,772,714 | |||
3,105,348 | |||||
Electric Utilities — 0.5% | |||||
OGE Energy Corp. | 19,512 | 764,675 | |||
Electrical Equipment — 0.9% | |||||
Generac Holdings, Inc.(2) | 22,548 | 1,120,636 | |||
Rockwell Automation, Inc. | 1,744 | 262,437 | |||
1,383,073 | |||||
Electronic Equipment, Instruments and Components — 2.0% | |||||
Keysight Technologies, Inc.(2) | 11,751 | 729,502 | |||
National Instruments Corp. | 18,617 | 844,840 | |||
Tech Data Corp.(2) | 1,685 | 137,850 | |||
Zebra Technologies Corp., Class A(2) | 8,692 | 1,384,027 | |||
3,096,219 | |||||
Energy Equipment and Services — 0.9% | |||||
Halliburton Co. | 51,798 | 1,376,791 | |||
Entertainment — 0.8% | |||||
Activision Blizzard, Inc. | 20,247 | 942,903 | |||
Electronic Arts, Inc.(2) | 3,891 | 307,039 | |||
1,249,942 | |||||
Equity Real Estate Investment Trusts (REITs) — 2.9% | |||||
Brixmor Property Group, Inc. | 93,446 | 1,372,721 | |||
GEO Group, Inc. (The) | 64,166 | 1,264,070 | |||
Healthcare Trust of America, Inc., Class A | 14,719 | 372,538 | |||
Host Hotels & Resorts, Inc. | 32,946 | 549,210 | |||
PS Business Parks, Inc. | 550 | 72,050 | |||
Rayonier, Inc. | 15,778 | 436,893 | |||
Ryman Hospitality Properties, Inc. | 4,633 | 308,975 | |||
4,376,457 | |||||
Food and Staples Retailing — 1.3% | |||||
Performance Food Group Co.(2) | 24,732 | 798,101 |
7
Shares | Value | ||||
US Foods Holding Corp.(2) | 36,973 | $ | 1,169,826 | ||
1,967,927 | |||||
Food Products — 0.5% | |||||
General Mills, Inc. | 20,575 | 801,191 | |||
Health Care Equipment and Supplies — 6.8% | |||||
Danaher Corp. | 10,594 | 1,092,453 | |||
DexCom, Inc.(2) | 5,238 | 627,512 | |||
Globus Medical, Inc., Class A(2) | 26,530 | 1,148,218 | |||
Hill-Rom Holdings, Inc. | 12,460 | 1,103,333 | |||
ICU Medical, Inc.(2) | 5,497 | 1,262,276 | |||
Integer Holdings Corp.(2) | 9,127 | 696,025 | |||
Masimo Corp.(2) | 1,313 | 140,977 | |||
Medtronic plc | 22,048 | 2,005,486 | |||
NuVasive, Inc.(2) | 22,958 | 1,137,799 | |||
STERIS plc | 10,302 | 1,100,769 | |||
10,314,848 | |||||
Health Care Providers and Services — 1.5% | |||||
Amedisys, Inc.(2) | 9,238 | 1,081,862 | |||
HCA Healthcare, Inc. | 2,801 | 348,585 | |||
Tenet Healthcare Corp.(2) | 16,453 | 282,004 | |||
UnitedHealth Group, Inc. | 2,394 | 596,393 | |||
2,308,844 | |||||
Health Care Technology — 0.2% | |||||
athenahealth, Inc.(2) | 2,243 | 295,919 | |||
Hotels, Restaurants and Leisure — 1.2% | |||||
Darden Restaurants, Inc. | 10,588 | 1,057,318 | |||
Starbucks Corp. | 11,739 | 755,991 | |||
1,813,309 | |||||
Household Durables — 3.0% | |||||
KB Home | 72,450 | 1,383,795 | |||
NVR, Inc.(2) | 591 | 1,440,261 | |||
PulteGroup, Inc. | 48,090 | 1,249,859 | |||
Toll Brothers, Inc. | 14,737 | 485,290 | |||
4,559,205 | |||||
Household Products — 0.1% | |||||
Procter & Gamble Co. (The) | 1,786 | 164,169 | |||
Independent Power and Renewable Electricity Producers — 0.8% | |||||
AES Corp. | 83,836 | 1,212,269 | |||
Industrial Conglomerates — 1.7% | |||||
General Electric Co. | 52,341 | 396,221 | |||
Honeywell International, Inc.(1) | 16,216 | 2,142,458 | |||
2,538,679 | |||||
Insurance — 2.8% | |||||
Hartford Financial Services Group, Inc. (The) | 35,088 | 1,559,662 | |||
Progressive Corp. (The) | 22,595 | 1,363,156 | |||
Travelers Cos., Inc. (The) | 11,446 | 1,370,658 | |||
4,293,476 | |||||
Interactive Media and Services — 5.5% | |||||
Alphabet, Inc., Class A(1)(2) | 5,134 | 5,364,825 | |||
Facebook, Inc., Class A(1)(2) | 22,684 | 2,973,645 | |||
8,338,470 |
8
Shares | Value | ||||
Internet and Direct Marketing Retail — 5.0% | |||||
Amazon.com, Inc.(2) | 3,599 | $ | 5,405,590 | ||
eBay, Inc.(1)(2) | 58,340 | 1,637,604 | |||
Stamps.com, Inc.(2) | 4,089 | 636,412 | |||
7,679,606 | |||||
IT Services — 3.4% | |||||
Akamai Technologies, Inc.(2) | 22,073 | 1,348,219 | |||
Booz Allen Hamilton Holding Corp. | 11,441 | 515,646 | |||
International Business Machines Corp. | 3,884 | 441,494 | |||
MAXIMUS, Inc. | 2,242 | 145,932 | |||
Visa, Inc., Class A(1) | 20,771 | 2,740,526 | |||
5,191,817 | |||||
Leisure Products — 0.7% | |||||
Brunswick Corp. | 22,047 | 1,024,083 | |||
Life Sciences Tools and Services — 1.6% | |||||
Agilent Technologies, Inc. | 9,896 | 667,584 | |||
Thermo Fisher Scientific, Inc.(1) | 8,094 | 1,811,356 | |||
2,478,940 | |||||
Machinery — 2.2% | |||||
Allison Transmission Holdings, Inc. | 14,770 | 648,551 | |||
Parker-Hannifin Corp. | 9,601 | 1,431,893 | |||
Snap-on, Inc. | 9,152 | 1,329,694 | |||
3,410,138 | |||||
Media — 0.2% | |||||
Comcast Corp., Class A | 9,810 | 334,031 | |||
Metals and Mining — 0.7% | |||||
Steel Dynamics, Inc. | 36,375 | 1,092,705 | |||
Multiline Retail — 1.0% | |||||
Kohl's Corp. | 23,403 | 1,552,555 | |||
Oil, Gas and Consumable Fuels — 7.2% | |||||
Chevron Corp. | 14,351 | 1,561,245 | |||
ConocoPhillips(1) | 31,323 | 1,952,989 | |||
Continental Resources, Inc.(2) | 25,067 | 1,007,443 | |||
CVR Energy, Inc. | 37,422 | 1,290,311 | |||
EOG Resources, Inc. | 10,113 | 881,955 | |||
Exxon Mobil Corp. | 14,258 | 972,253 | |||
HollyFrontier Corp. | 12,036 | 615,280 | |||
Marathon Petroleum Corp. | 13,707 | 808,850 | |||
Newfield Exploration Co.(2) | 22,944 | 336,359 | |||
Occidental Petroleum Corp. | 15,092 | 926,347 | |||
Phillips 66 | 8,019 | 690,837 | |||
11,043,869 | |||||
Paper and Forest Products — 1.1% | |||||
Domtar Corp. | 32,394 | 1,138,001 | |||
Louisiana-Pacific Corp. | 25,973 | 577,120 | |||
1,715,121 | |||||
Personal Products — 0.3% | |||||
Edgewell Personal Care Co.(2) | 12,004 | 448,349 | |||
Pharmaceuticals — 5.6% | |||||
Allergan plc | 4,644 | 620,717 | |||
Bristol-Myers Squibb Co. | 18,518 | 962,566 |
9
Shares | Value | ||||
Eli Lilly & Co. | 3,965 | $ | 458,830 | ||
Horizon Pharma plc(2) | 18,060 | 352,892 | |||
Jazz Pharmaceuticals plc(2) | 2,322 | 287,835 | |||
Johnson & Johnson(1) | 16,054 | 2,071,769 | |||
Merck & Co., Inc. | 13,520 | 1,033,063 | |||
Pfizer, Inc.(1) | 49,305 | 2,152,163 | |||
Zoetis, Inc. | 7,391 | 632,226 | |||
8,572,061 | |||||
Professional Services — 2.5% | |||||
ASGN, Inc.(2) | 3,600 | 196,200 | |||
CoStar Group, Inc.(2) | 2,483 | 837,615 | |||
Insperity, Inc. | 3,019 | 281,854 | |||
Korn/Ferry International | 26,423 | 1,044,765 | |||
Robert Half International, Inc. | 24,593 | 1,406,720 | |||
3,767,154 | |||||
Road and Rail — 1.1% | |||||
Norfolk Southern Corp.(1) | 11,203 | 1,675,297 | |||
Semiconductors and Semiconductor Equipment — 4.7% | |||||
Broadcom, Inc. | 3,482 | 885,403 | |||
Cabot Microelectronics Corp. | 6,571 | 626,545 | |||
Cirrus Logic, Inc.(2) | 23,646 | 784,574 | |||
Intel Corp.(1) | 57,212 | 2,684,959 | |||
ON Semiconductor Corp.(2) | 42,525 | 702,088 | |||
Qorvo, Inc.(2) | 9,326 | 566,368 | |||
QUALCOMM, Inc. | 15,051 | 856,552 | |||
7,106,489 | |||||
Software — 8.5% | |||||
Adobe, Inc.(1)(2) | 8,323 | 1,882,995 | |||
Cadence Design Systems, Inc.(2) | 25,518 | 1,109,523 | |||
Intuit, Inc. | 4,702 | 925,589 | |||
LogMeIn, Inc. | 2,712 | 221,218 | |||
Microsoft Corp.(1) | 59,034 | 5,996,083 | |||
Proofpoint, Inc.(2) | 4,024 | 337,251 | |||
Teradata Corp.(2) | 25,510 | 978,564 | |||
Ultimate Software Group, Inc. (The)(2) | 3,508 | 859,004 | |||
VMware, Inc., Class A | 5,472 | 750,375 | |||
13,060,602 | |||||
Specialty Retail — 3.1% | |||||
American Eagle Outfitters, Inc. | 8,422 | 162,797 | |||
AutoZone, Inc.(2) | 1,702 | 1,426,855 | |||
Foot Locker, Inc. | 4,108 | 218,546 | |||
O'Reilly Automotive, Inc.(2) | 2,809 | 967,223 | |||
Ross Stores, Inc. | 7,216 | 600,371 | |||
Urban Outfitters, Inc.(2) | 38,978 | 1,294,069 | |||
4,669,861 | |||||
Technology Hardware, Storage and Peripherals — 4.9% | |||||
Apple, Inc.(1) | 39,045 | 6,158,958 | |||
HP, Inc. | 43,789 | 895,923 | |||
Seagate Technology plc | 11,582 | 446,950 | |||
7,501,831 |
10
Shares | Value | ||||
Textiles, Apparel and Luxury Goods — 2.7% | |||||
Deckers Outdoor Corp.(2) | 10,941 | $ | 1,399,901 | ||
Michael Kors Holdings Ltd.(2) | 13,054 | 495,008 | |||
NIKE, Inc., Class B | 3,015 | 223,532 | |||
Ralph Lauren Corp. | 6,545 | 677,146 | |||
Tapestry, Inc. | 37,930 | 1,280,137 | |||
4,075,724 | |||||
Thrifts and Mortgage Finance — 0.8% | |||||
Essent Group Ltd.(2) | 36,552 | 1,249,347 | |||
Tobacco — 1.3% | |||||
Altria Group, Inc.(1) | 41,112 | 2,030,522 | |||
Trading Companies and Distributors — 1.2% | |||||
HD Supply Holdings, Inc.(2) | 31,546 | 1,183,606 | |||
W.W. Grainger, Inc. | 2,180 | 615,545 | |||
1,799,151 | |||||
Wireless Telecommunication Services — 0.8% | |||||
Telephone & Data Systems, Inc. | 27,429 | 892,540 | |||
United States Cellular Corp.(2) | 5,496 | 285,627 | |||
1,178,167 | |||||
TOTAL COMMON STOCKS (Cost $177,994,999) | 193,490,390 | ||||
TEMPORARY CASH INVESTMENTS — 1.7% | |||||
Repurchase Agreement, BMO Capital Markets Corp., (collateralized by various U.S. Treasury obligations, 0.125% - 2.75%, 10/31/19 - 2/15/44, valued at $2,319,309), in a joint trading account at 2.45%, dated 12/31/18, due 1/2/19 (Delivery value $2,274,439) | 2,274,129 | ||||
Repurchase Agreement, Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 3.375%, 11/15/48, valued at $390,123), at 1.25%, dated 12/31/18, due 1/2/19 (Delivery value $379,026) | 379,000 | ||||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $2,653,129) | 2,653,129 | ||||
TOTAL INVESTMENT SECURITIES BEFORE SECURITIES SOLD SHORT — 128.4% (Cost $180,648,128) | 196,143,519 | ||||
COMMON STOCKS SOLD SHORT — (28.5)% | |||||
Aerospace and Defense — (0.5)% | |||||
BWX Technologies, Inc. | (21,819 | ) | (834,140 | ) | |
Airlines — (0.2)% | |||||
Allegiant Travel Co. | (1,465 | ) | (146,822 | ) | |
Spirit Airlines, Inc. | (2,425 | ) | (140,456 | ) | |
(287,278 | ) | ||||
Banks — (3.5)% | |||||
First Financial Bancorp | (39,779 | ) | (943,558 | ) | |
First Midwest Bancorp, Inc. | (10,730 | ) | (212,561 | ) | |
Home BancShares, Inc. | (6,708 | ) | (109,609 | ) | |
Old National Bancorp | (25,742 | ) | (396,427 | ) | |
Pinnacle Financial Partners, Inc. | (24,203 | ) | (1,115,758 | ) | |
Sterling Bancorp | (23,718 | ) | (391,584 | ) | |
Union Bankshares Corp. | (27,146 | ) | (766,332 | ) | |
United Bankshares, Inc. | (43,140 | ) | (1,342,085 | ) | |
(5,277,914 | ) | ||||
Biotechnology — (1.0)% | |||||
Alnylam Pharmaceuticals, Inc. | (4,639 | ) | (338,230 | ) | |
Global Blood Therapeutics, Inc. | (9,104 | ) | (373,719 | ) |
11
Shares | Value | ||||
Immunomedics, Inc. | (20,354 | ) | $ | (290,452 | ) |
Sage Therapeutics, Inc. | (2,065 | ) | (197,806 | ) | |
Sarepta Therapeutics, Inc. | (3,118 | ) | (340,267 | ) | |
(1,540,474 | ) | ||||
Chemicals — (0.2)% | |||||
Albemarle Corp. | (2,050 | ) | (157,994 | ) | |
Sensient Technologies Corp. | (2,080 | ) | (116,168 | ) | |
(274,162 | ) | ||||
Commercial Services and Supplies — (0.4)% | |||||
Healthcare Services Group, Inc. | (14,542 | ) | (584,298 | ) | |
Construction and Engineering — (1.4)% | |||||
Fluor Corp. | (17,469 | ) | (562,502 | ) | |
Granite Construction, Inc. | (26,441 | ) | (1,065,043 | ) | |
MasTec, Inc. | (1,814 | ) | (73,576 | ) | |
Valmont Industries, Inc. | (3,946 | ) | (437,809 | ) | |
(2,138,930 | ) | ||||
Consumer Finance — (0.7)% | |||||
SLM Corp. | (125,446 | ) | (1,042,456 | ) | |
Containers and Packaging — (1.9)% | |||||
AptarGroup, Inc. | (13,325 | ) | (1,253,483 | ) | |
Crown Holdings, Inc. | (13,395 | ) | (556,830 | ) | |
Graphic Packaging Holding Co. | (104,213 | ) | (1,108,826 | ) | |
(2,919,139 | ) | ||||
Distributors — (0.3)% | |||||
LKQ Corp. | (22,322 | ) | (529,701 | ) | |
Diversified Telecommunication Services — (0.3)% | |||||
Zayo Group Holdings, Inc. | (20,693 | ) | (472,628 | ) | |
Electronic Equipment, Instruments and Components — (1.1)% | |||||
Avnet, Inc. | (6,988 | ) | (252,267 | ) | |
Cognex Corp. | (7,718 | ) | (298,455 | ) | |
II-VI, Inc. | (34,895 | ) | (1,132,692 | ) | |
(1,683,414 | ) | ||||
Energy Equipment and Services — (0.8)% | |||||
Oceaneering International, Inc. | (56,465 | ) | (683,226 | ) | |
Patterson-UTI Energy, Inc. | (52,136 | ) | (539,608 | ) | |
(1,222,834 | ) | ||||
Health Care Equipment and Supplies — (1.6)% | |||||
Avanos Medical, Inc. | (27,986 | ) | (1,253,493 | ) | |
Wright Medical Group NV | (41,920 | ) | (1,141,062 | ) | |
(2,394,555 | ) | ||||
Health Care Providers and Services — (0.2)% | |||||
Henry Schein, Inc. | (4,180 | ) | (328,214 | ) | |
Hotels, Restaurants and Leisure — (1.1)% | |||||
Churchill Downs, Inc. | (2,847 | ) | (694,497 | ) | |
Planet Fitness, Inc., Class A | (13,458 | ) | (721,618 | ) | |
Scientific Games Corp., Class A | (15,143 | ) | (270,757 | ) | |
(1,686,872 | ) | ||||
Household Durables — (1.7)% | |||||
Leggett & Platt, Inc. | (35,048 | ) | (1,256,120 | ) | |
Mohawk Industries, Inc. | (4,990 | ) | (583,631 | ) |
12
Shares | Value | ||||
Tempur Sealy International, Inc. | (20,261 | ) | $ | (838,805 | ) |
(2,678,556 | ) | ||||
Independent Power and Renewable Electricity Producers — (0.2)% | |||||
Ormat Technologies, Inc. | (6,711 | ) | (350,985 | ) | |
Insurance — (0.2)% | |||||
WR Berkley Corp. | (4,350 | ) | (321,509 | ) | |
Internet and Direct Marketing Retail — (0.3)% | |||||
Wayfair, Inc., Class A | (4,818 | ) | (434,005 | ) | |
IT Services — (0.7)% | |||||
Gartner, Inc. | (5,830 | ) | (745,307 | ) | |
Worldpay, Inc., Class A | (3,831 | ) | (292,804 | ) | |
(1,038,111 | ) | ||||
Life Sciences Tools and Services — (0.3)% | |||||
PerkinElmer, Inc. | (5,603 | ) | (440,116 | ) | |
Machinery — (1.7)% | |||||
Donaldson Co., Inc. | (19,820 | ) | (859,990 | ) | |
John Bean Technologies Corp. | (10,332 | ) | (741,941 | ) | |
Middleby Corp. (The) | (6,840 | ) | (702,673 | ) | |
Stanley Black & Decker, Inc. | (2,041 | ) | (244,389 | ) | |
(2,548,993 | ) | ||||
Marine — (0.2)% | |||||
Kirby Corp. | (5,346 | ) | (360,107 | ) | |
Media — (0.8)% | |||||
Loral Space & Communications, Inc. | (2,107 | ) | (78,486 | ) | |
New York Times Co. (The), Class A | (51,524 | ) | (1,148,470 | ) | |
(1,226,956 | ) | ||||
Metals and Mining — (0.5)% | |||||
Alcoa Corp. | (22,014 | ) | (585,132 | ) | |
Goldcorp, Inc. | (14,793 | ) | (144,972 | ) | |
(730,104 | ) | ||||
Mortgage Real Estate Investment Trusts (REITs) — (0.1)% | |||||
Starwood Property Trust, Inc. | (10,519 | ) | (207,330 | ) | |
Oil, Gas and Consumable Fuels — (1.1)% | |||||
Matador Resources Co. | (5,203 | ) | (80,803 | ) | |
Noble Energy, Inc. | (6,937 | ) | (130,138 | ) | |
QEP Resources, Inc. | (25,542 | ) | (143,801 | ) | |
Targa Resources Corp. | (25,635 | ) | (923,373 | ) | |
Williams Cos., Inc. (The) | (15,150 | ) | (334,057 | ) | |
(1,612,172 | ) | ||||
Pharmaceuticals — (0.4)% | |||||
Aerie Pharmaceuticals, Inc. | (9,446 | ) | (341,001 | ) | |
Catalent, Inc. | (10,313 | ) | (321,559 | ) | |
(662,560 | ) | ||||
Professional Services — (0.3)% | |||||
Nielsen Holdings plc | (17,047 | ) | (397,706 | ) | |
TriNet Group, Inc. | (1,781 | ) | (74,713 | ) | |
(472,419 | ) | ||||
Real Estate Management and Development — (1.1)% | |||||
Howard Hughes Corp. (The) | (10,069 | ) | (982,936 | ) | |
Kennedy-Wilson Holdings, Inc. | (39,057 | ) | (709,665 | ) | |
(1,692,601 | ) |
13
Shares | Value | ||||
Semiconductors and Semiconductor Equipment — (0.9)% | |||||
Cree, Inc. | (29,883 | ) | $ | (1,278,245 | ) |
First Solar, Inc. | (3,090 | ) | (131,186 | ) | |
(1,409,431 | ) | ||||
Software — (0.6)% | |||||
2U, Inc. | (17,131 | ) | (851,753 | ) | |
Specialty Retail — (0.9)% | |||||
Monro, Inc. | (20,053 | ) | (1,378,644 | ) | |
Thrifts and Mortgage Finance — (0.5)% | |||||
TFS Financial Corp. | (46,654 | ) | (752,529 | ) | |
Trading Companies and Distributors — (0.3)% | |||||
GATX Corp. | (5,758 | ) | (407,724 | ) | |
Water Utilities — (0.5)% | |||||
Aqua America, Inc. | (20,959 | ) | (716,588 | ) | |
TOTAL COMMON STOCKS SOLD SHORT (Proceeds $51,690,288) | (43,510,202 | ) | |||
OTHER ASSETS AND LIABILITIES — 0.1% | 94,111 | ||||
TOTAL NET ASSETS — 100.0% | $ | 152,727,428 |
NOTES TO SCHEDULE OF INVESTMENTS |
(1) | Security, or a portion thereof, has been pledged at the custodian bank or with a broker for collateral requirements on securities sold short. At the period end, the aggregate value of securities pledged was $54,189,028. |
(2) | Non-income producing. |
See Notes to Financial Statements.
14
Statement of Assets and Liabilities |
DECEMBER 31, 2018 (UNAUDITED) | |||
Assets | |||
Investment securities, at value (cost of $180,648,128) | $ | 196,143,519 | |
Cash | 2,237 | ||
Receivable for capital shares sold | 201,410 | ||
Dividends and interest receivable | 174,453 | ||
196,521,619 | |||
Liabilities | |||
Securities sold short, at value (proceeds of $51,690,288) | 43,510,202 | ||
Payable for capital shares redeemed | 3,912 | ||
Accrued management fees | 177,252 | ||
Distribution and service fees payable | 371 | ||
Dividend expense payable on securities sold short | 62,514 | ||
Fees and charges payable on borrowings for securities sold short | 39,940 | ||
43,794,191 | |||
Net Assets | $ | 152,727,428 | |
Net Assets Consist of: | |||
Capital (par value and paid-in surplus) | $ | 125,628,647 | |
Distributable earnings | 27,098,781 | ||
$ | 152,727,428 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | ||||
Investor Class, $0.01 Par Value | $151,735,267 | 11,854,667 | $12.80 | |||
I Class, $0.01 Par Value | $4,810 | 376 | $12.79 | |||
A Class, $0.01 Par Value | $578,679 | 45,293 | $12.78* | |||
C Class, $0.01 Par Value | $139,907 | 11,370 | $12.30 | |||
R Class, $0.01 Par Value | $268,765 | 21,202 | $12.68 |
*Maximum offering price $13.56 (net asset value divided by 0.9425).
See Notes to Financial Statements.
15
Statement of Operations |
FOR THE SIX MONTHS ENDED DECEMBER 31, 2018 (UNAUDITED) | |||
Investment Income (Loss) | |||
Income: | |||
Dividends | $ | 2,127,077 | |
Interest | 19,572 | ||
2,146,649 | |||
Expenses: | |||
Dividend expense on securities sold short | 351,360 | ||
Fees and charges on borrowings for securities sold short | 252,561 | ||
Management fees | 1,272,342 | ||
Distribution and service fees: | |||
A Class | 822 | ||
C Class | 829 | ||
R Class | 674 | ||
Directors' fees and expenses | 6,995 | ||
1,885,583 | |||
Net investment income (loss) | 261,066 | ||
Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investment transactions | 10,900,816 | ||
Securities sold short transactions | (159,414 | ) | |
Futures contract transactions | (800,025 | ) | |
9,941,377 | |||
Change in net unrealized appreciation (depreciation) on: | |||
Investments | (35,825,963 | ) | |
Securities sold short | 9,835,824 | ||
(25,990,139 | ) | ||
Net realized and unrealized gain (loss) | (16,048,762 | ) | |
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | (15,787,696 | ) |
See Notes to Financial Statements.
16
Statement of Changes in Net Assets |
SIX MONTHS ENDED DECEMBER 31, 2018 (UNAUDITED) AND YEAR ENDED JUNE 30, 2018 | ||||||
Increase (Decrease) in Net Assets | December 31, 2018 | June 30, 2018 | ||||
Operations | ||||||
Net investment income (loss) | $ | 261,066 | $ | 916,676 | ||
Net realized gain (loss) | 9,941,377 | 9,483,593 | ||||
Change in net unrealized appreciation (depreciation) | (25,990,139 | ) | 13,495,201 | |||
Net increase (decrease) in net assets resulting from operations | (15,787,696 | ) | 23,895,470 | |||
Distributions to Shareholders | ||||||
From earnings:(1) | ||||||
Investor Class | (15,743,084 | ) | (7,104,528 | ) | ||
I Class | (506 | ) | (1,539 | ) | ||
A Class | (62,617 | ) | (17,901 | ) | ||
C Class | (16,143 | ) | (8,914 | ) | ||
R Class | (27,782 | ) | (7,443 | ) | ||
Decrease in net assets from distributions | (15,850,132 | ) | (7,140,325 | ) | ||
Capital Share Transactions | ||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | (14,929,525 | ) | 3,279,313 | |||
Net increase (decrease) in net assets | (46,567,353 | ) | 20,034,458 | |||
Net Assets | ||||||
Beginning of period | 199,294,781 | 179,260,323 | ||||
End of period | $ | 152,727,428 | $ | 199,294,781 |
(1) | Prior period presentation has been updated to reflect the current period combination of distributions to shareholders from net investment income and net realized gains. Distributions from net investment income were $(859,233), $(129), $(1,208) and $(136) for Investor Class, I Class, A Class and R Class, respectively. Distributions from net realized gains were $(6,245,295), $(1,410), $(16,693), $(8,914) and $(7,307) for Investor Class, I Class, A Class, C Class and R Class, respectively. |
See Notes to Financial Statements.
17
Statement of Cash Flows |
SIX MONTHS ENDED DECEMBER 31, 2018 (UNAUDITED) | |||
Cash Flows From (Used In) Operating Activities | |||
Net increase (decrease) in net assets resulting from operations | $ | (15,787,696 | ) |
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash from (used in) operating activities: | |||
Purchases of investment securities | (124,154,762 | ) | |
Proceeds from investments sold | 162,541,425 | ||
Purchases to cover securities sold short | (38,662,465 | ) | |
Proceeds from securities sold short | 32,757,128 | ||
(Increase) decrease in short-term investments | 280,701 | ||
(Increase) decrease in receivable for investments sold | 9,658,053 | ||
(Increase) decrease in dividends and interest receivable | 13,896 | ||
Increase (decrease) in payable for investments purchased | (10,904,885 | ) | |
Increase (decrease) in accrued management fees | (38,319 | ) | |
Increase (decrease) in distribution and service fees payable | (76 | ) | |
Increase (decrease) in dividend expense payable on securities sold short | 14,668 | ||
Increase (decrease) in fees and charges payable on borrowings for securities sold short | (9,263 | ) | |
Change in net unrealized (appreciation) depreciation on investments | 35,825,963 | ||
Net realized (gain) loss on investment transactions | (10,900,816 | ) | |
Change in net unrealized (appreciation) depreciation on securities sold short | (9,835,824 | ) | |
Net realized (gain) loss on securities sold short transactions | 159,414 | ||
Net cash from (used in) operating activities | 30,957,142 | ||
Cash Flows From (Used In) Financing Activities | |||
Proceeds from shares sold | 5,877,385 | ||
Payments for shares redeemed | (36,791,693 | ) | |
Distributions paid, net of reinvestments | (40,597 | ) | |
Net cash from (used in) financing activities | (30,954,905 | ) | |
Net Increase (Decrease) In Cash | 2,237 | ||
Cash at beginning of period | — | ||
Cash at end of period | $ | 2,237 | |
Supplemental disclosure of cash flow information: | |||
Non cash financing activities not included herein consist of all reinvestment of distributions of $15,809,535. |
See Notes to Financial Statements.
18
Notes to Financial Statements |
DECEMBER 31, 2018 (UNAUDITED)
1. Organization
American Century Quantitative Equity 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. Core Equity Plus 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, A Class, C Class and R Class. The A Class may incur an initial sales charge. The A Class and C Class may be subject to a contingent deferred sales charge.
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.
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. Exchange-traded futures contracts are valued at the settlement price as provided by the appropriate exchange.
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.
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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.
Securities Sold Short — The fund enters into short sales, which is selling securities it does not own, as part of its normal investment activities. Upon selling a security short, the fund will segregate cash, cash equivalents or other appropriate liquid securities in at least an amount equal to the current market value of the securities sold short until the fund replaces the borrowed security. Interest earned on segregated cash for securities sold short, if any, is reflected as interest income. The fund is required to pay any dividends or interest due on securities sold short. Such dividends and interest are recorded as an expense. The fund may pay fees or charges on the assets borrowed for securities sold short. These fees are calculated daily based upon the value of each security sold short and a rate that is dependent on the availability of such security. Liabilities for securities sold short are valued daily and changes in value are recorded as change in net unrealized appreciation (depreciation) on securities sold short. The fund records realized gain (loss) on a security sold short when it is terminated by the fund and includes as a component of net realized gain (loss) on securities sold short transactions.
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.
Segregated Assets — In accordance with the 1940 Act, the fund segregates assets on its books and records to cover certain types of investment securities and other financial instruments. ACIM monitors, on a daily basis, the securities segregated to ensure the fund designates a sufficient amount of liquid assets, marked-to-market daily. The fund may also receive assets or be required to pledge assets at the custodian bank or with a broker for collateral requirements.
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, if any, are generally declared and paid semiannually. Distributions from net realized gains, if any, are generally declared and paid annually.
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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.
Statement of Cash Flows — The Statement of Cash Flows has been prepared using the indirect method which requires net increase (decrease) in net assets resulting from operations to be adjusted to reconcile to net cash from (used in) operating activities. The beginning of period and end of period cash is the amount of domestic and foreign currency included in the fund's Statement of Assets and Liabilities and represents the cash on hand at the custodian bank and does not include any short-term investments or deposits for securities sold short.
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. Various funds issued by American Century Asset Allocation Portfolios, Inc. own, in aggregate, 92% of the shares of the fund. Related parties do not invest in the fund for the purpose of exercising management or control.
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, expenses on securities sold short, 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 fee consists of (1) an Investment Category Fee based on the daily net assets of the fund and certain other accounts managed by the investment advisor that are in the same broad investment category as the fund and (2) a Complex Fee based on the assets of all the funds in the American Century Investments family of funds.
The Investment Category Fee range, the Complex Fee range and the effective annual management fee for each class for the period ended December 31, 2018 are as follows:
Investment Category Fee Range | Complex Fee Range | Effective Annual Management Fee | |
Investor Class | 0.9680% to 1.1500% | 0.2500% to 0.3100% | 1.29% |
I Class | 0.0500% to 0.1100% | 1.09% | |
A Class | 0.2500% to 0.3100% | 1.29% | |
C Class | 0.2500% to 0.3100% | 1.29% | |
R Class | 0.2500% to 0.3100% | 1.29% |
Distribution and Service Fees — The Board of Directors has adopted a separate Master Distribution and Individual Shareholder Services Plan for each of the A Class, C Class and R Class (collectively the plans), pursuant to Rule 12b-1 of the 1940 Act. The plans provide that the A Class will pay ACIS an annual distribution and service fee of 0.25%. The plans provide that the C Class will pay ACIS an annual distribution and service fee of 1.00%, of which 0.25% is paid for individual shareholder services and 0.75% is paid for distribution services. The plans provide that the R Class will pay ACIS an annual distribution and service fee of 0.50%. The fees are computed and accrued daily based on each class’s daily net assets and paid monthly in arrears. The fees are used to pay financial intermediaries for distribution and individual shareholder services. Fees incurred under the plans during the period ended December 31, 2018 are detailed in the Statement of Operations.
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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 $2,933,903 and $2,182,777, respectively. The effect of interfund transactions on the Statement of Operations was $(36,350) in net realized gain (loss) on investment transactions.
4. Investment Transactions
Purchases and sales of investment securities and securities sold short, excluding short-term investments, for the period ended December 31, 2018 were $162,817,227 and $195,186,493, respectively.
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended December 31, 2018 | Year ended June 30, 2018 | |||||||||
Shares | Amount | Shares | Amount | |||||||
Investor Class/Shares Authorized | 110,000,000 | 110,000,000 | ||||||||
Sold | 399,013 | $ | 5,882,125 | 433,552 | $ | 6,761,560 | ||||
Issued in reinvestment of distributions | 1,182,954 | 15,702,487 | 459,516 | 7,090,550 | ||||||
Redeemed | (2,421,230 | ) | (36,661,174 | ) | (603,054 | ) | (9,339,634 | ) | ||
(839,263 | ) | (15,076,562 | ) | 290,014 | 4,512,476 | |||||
I Class/Shares Authorized | 25,000,000 | 25,000,000 | ||||||||
Sold | — | — | 778 | 11,358 | ||||||
Issued in reinvestment of distributions | 38 | 506 | 100 | 1,539 | ||||||
Redeemed | — | — | (71,046 | ) | (1,062,889 | ) | ||||
38 | 506 | (70,168 | ) | (1,049,992 | ) | |||||
A Class/Shares Authorized | 15,000,000 | 15,000,000 | ||||||||
Sold | 5,020 | 81,602 | 15,734 | 244,083 | ||||||
Issued in reinvestment of distributions | 4,726 | 62,617 | 1,164 | 17,901 | ||||||
Redeemed | (6,881 | ) | (103,912 | ) | (16,964 | ) | (256,974 | ) | ||
2,865 | 40,307 | (66 | ) | 5,010 | ||||||
C Class/Shares Authorized | 15,000,000 | 15,000,000 | ||||||||
Sold | 1,073 | 16,861 | 2,139 | 31,875 | ||||||
Issued in reinvestment of distributions | 1,265 | 16,143 | 597 | 8,914 | ||||||
Redeemed | (1,102 | ) | (14,331 | ) | (19,259 | ) | (284,363 | ) | ||
1,236 | 18,673 | (16,523 | ) | (243,574 | ) | |||||
R Class/Shares Authorized | 15,000,000 | 15,000,000 | ||||||||
Sold | 4,918 | 75,775 | 6,532 | 100,315 | ||||||
Issued in reinvestment of distributions | 2,113 | 27,782 | 487 | 7,443 | ||||||
Redeemed | (1,092 | ) | (16,006 | ) | (3,343 | ) | (52,365 | ) | ||
5,939 | 87,551 | 3,676 | 55,393 | |||||||
Net increase (decrease) | (829,185 | ) | $ | (14,929,525 | ) | 206,933 | $ | 3,279,313 |
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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.
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 | $ | 193,490,390 | — | — | ||||
Temporary Cash Investments | — | $ | 2,653,129 | — | ||||
$ | 193,490,390 | $ | 2,653,129 | — | ||||
Liabilities | ||||||||
Securities Sold Short | ||||||||
Common Stocks | $ | 43,510,202 | — | — |
7. Derivative Instruments
Equity Price Risk — The fund is subject to equity price risk in the normal course of pursuing its investment objectives. A fund may enter into futures contracts based on an equity index in order to manage its exposure to changes in market conditions. A fund may purchase futures contracts to gain exposure to increases in market value or sell futures contracts to protect against a decline in market value. Upon entering into a futures contract, a fund is required to deposit either cash or securities in an amount equal to a certain percentage of the contract value (initial margin). Subsequent payments (variation margin) are made or received daily, in cash, by a fund. The variation margin is equal to the daily change in the contract value and is recorded as unrealized gains and losses. A fund recognizes a realized gain or loss when the contract is closed or expires. Net realized and unrealized gains or losses occurring during the holding period of futures contracts are a component of net realized gain (loss) on futures contract transactions and change in net unrealized appreciation (depreciation) on futures contracts, respectively. One of the risks of entering into futures contracts is the possibility that the change in value of the contract may not correlate with the changes in value of the underlying securities. During the period, the fund participated in equity price risk derivative instruments for temporary investment purposes.
At period end, the fund did not have any derivative instruments disclosed on the Statement of Assets and Liabilities. For the six months ended December 31, 2018, the effect of equity price risk derivative instruments on the Statement of Operations was $(800,025) in net realized gain (loss) on futures contract transactions.
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8. Risk Factors
The fund is subject to short sales risk. If the market price of a security increases after the fund borrows the security, the fund may suffer a loss when it replaces the borrowed security at the higher price. Any loss will be increased by the amount of compensation, interest or dividends, and transaction costs the fund must pay to the lender of the borrowed security.
The fund's investment strategy utilizes leverage, which can increase market exposure and subject the fund to greater risk and higher volatility.
If the fund is overweighted in a stock or sector, any negative development related to that stock or sector will have a greater impact on the fund than other funds that are not overweighted in that stock or sector.
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.
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.
As of period end, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $ | 181,030,310 | |
Gross tax appreciation of investments | $ | 31,907,867 | |
Gross tax depreciation of investments | (16,794,658 | ) | |
Net tax appreciation (depreciation) of investments | 15,113,209 | ||
Gross tax appreciation on securities sold short | 8,579,791 | ||
Gross tax depreciation on securities sold short | (524,224 | ) | |
Net tax appreciation (depreciation) | $ | 23,168,776 |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales.
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Financial Highlights |
For a Share Outstanding Throughout the Years Ended June 30 (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 | Operating Expenses (excluding expenses on securities sold short) | Net Investment Income (Loss) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
Investor Class | ||||||||||||||||
2018(3) | $15.62 | 0.02 | (1.36) | (1.34) | (0.01) | (1.47) | (1.48) | $12.80 | (8.90)% | 1.91%(4) | 1.30%(4) | 0.26%(4) | 65% | $151,735 | ||
2018 | $14.28 | 0.07 | 1.85 | 1.92 | (0.07) | (0.51) | (0.58) | $15.62 | 13.50% | 1.85% | 1.29% | 0.48% | 101% | $198,238 | ||
2017 | $12.31 | 0.06 | 1.97 | 2.03 | (0.06) | — | (0.06) | $14.28 | 16.46% | 1.97% | 1.30% | 0.45% | 111% | $177,112 | ||
2016 | $13.85 | 0.10 | (0.40) | (0.30) | (0.10) | (1.14) | (1.24) | $12.31 | (2.13)% | 1.89% | 1.30% | 0.82% | 107% | $159,174 | ||
2015 | $15.12 | 0.12 | 0.59 | 0.71 | (0.11) | (1.87) | (1.98) | $13.85 | 4.84% | 1.73% | 1.30% | 0.82% | 106% | $163,487 | ||
2014 | $12.84 | 0.10 | 3.25 | 3.35 | (0.11) | (0.96) | (1.07) | $15.12 | 26.86% | 1.77% | 1.30% | 0.69% | 104% | $148,620 | ||
I Class | ||||||||||||||||
2018(3) | $15.61 | 0.04 | (1.37) | (1.33) | (0.02) | (1.47) | (1.49) | $12.79 | (8.83)% | 1.71%(4) | 1.10%(4) | 0.46%(4) | 65% | $5 | ||
2018 | $14.27 | 0.20 | 1.75 | 1.95 | (0.10) | (0.51) | (0.61) | $15.61 | 13.73% | 1.65% | 1.09% | 0.68% | 101% | $5 | ||
2017 | $12.31 | 0.09 | 1.95 | 2.04 | (0.08) | — | (0.08) | $14.27 | 16.61% | 1.77% | 1.10% | 0.65% | 111% | $1,006 | ||
2016 | $13.85 | 0.13 | (0.39) | (0.26) | (0.14) | (1.14) | (1.28) | $12.31 | (1.91)% | 1.69% | 1.10% | 1.02% | 107% | $1,381 | ||
2015 | $15.13 | 0.15 | 0.57 | 0.72 | (0.13) | (1.87) | (2.00) | $13.85 | 5.04% | 1.53% | 1.10% | 1.02% | 106% | $1,854 | ||
2014 | $12.84 | 0.13 | 3.26 | 3.39 | (0.14) | (0.96) | (1.10) | $15.13 | 27.19% | 1.57% | 1.10% | 0.89% | 104% | $5,993 |
For a Share Outstanding Throughout the Years Ended June 30 (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 | Operating Expenses (excluding expenses on securities sold short) | Net Investment Income (Loss) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
A Class | ||||||||||||||||
2018(3) | $15.60 | —(5) | (1.35) | (1.35) | — | (1.47) | (1.47) | $12.78 | (8.98)% | 2.16%(4) | 1.55%(4) | 0.01%(4) | 65% | $579 | ||
2018 | $14.26 | 0.04 | 1.84 | 1.88 | (0.03) | (0.51) | (0.54) | $15.60 | 13.24% | 2.10% | 1.54% | 0.23% | 101% | $662 | ||
2017 | $12.30 | 0.03 | 1.95 | 1.98 | (0.02) | — | (0.02) | $14.26 | 16.10% | 2.22% | 1.55% | 0.20% | 111% | $606 | ||
2016 | $13.84 | 0.07 | (0.39) | (0.32) | (0.08) | (1.14) | (1.22) | $12.30 | (2.35)% | 2.14% | 1.55% | 0.57% | 107% | $882 | ||
2015 | $15.12 | 0.08 | 0.58 | 0.66 | (0.07) | (1.87) | (1.94) | $13.84 | 4.59% | 1.98% | 1.55% | 0.57% | 106% | $801 | ||
2014 | $12.84 | 0.06 | 3.25 | 3.31 | (0.07) | (0.96) | (1.03) | $15.12 | 26.55% | 2.02% | 1.55% | 0.44% | 104% | $753 | ||
C Class | ||||||||||||||||
2018(3) | $15.14 | (0.05) | (1.32) | (1.37) | — | (1.47) | (1.47) | $12.30 | (9.39)% | 2.91%(4) | 2.30%(4) | (0.74)%(4) | 65% | $140 | ||
2018 | $13.93 | (0.06) | 1.78 | 1.72 | — | (0.51) | (0.51) | $15.14 | 12.40% | 2.85% | 2.29% | (0.52)% | 101% | $153 | ||
2017 | $12.09 | (0.07) | 1.91 | 1.84 | — | — | — | $13.93 | 15.22% | 2.97% | 2.30% | (0.55)% | 111% | $371 | ||
2016 | $13.69 | (0.02) | (0.40) | (0.42) | (0.04) | (1.14) | (1.18) | $12.09 | (3.09)% | 2.89% | 2.30% | (0.18)% | 107% | $310 | ||
2015 | $15.01 | (0.03) | 0.58 | 0.55 | — | (1.87) | (1.87) | $13.69 | 3.77% | 2.73% | 2.30% | (0.18)% | 106% | $736 | ||
2014 | $12.78 | (0.05) | 3.24 | 3.19 | — | (0.96) | (0.96) | $15.01 | 25.66% | 2.77% | 2.30% | (0.31)% | 104% | $768 | ||
R Class | ||||||||||||||||
2018(3) | $15.51 | (0.02) | (1.34) | (1.36) | — | (1.47) | (1.47) | $12.68 | (9.10)% | 2.41%(4) | 1.80%(4) | (0.24)%(4) | 65% | $269 | ||
2018 | $14.20 | (0.01) | 1.84 | 1.83 | (0.01) | (0.51) | (0.52) | $15.51 | 12.94% | 2.35% | 1.79% | (0.02)% | 101% | $237 | ||
2017 | $12.26 | —(5) | 1.94 | 1.94 | — | — | — | $14.20 | 15.82% | 2.47% | 1.80% | (0.05)% | 111% | $165 | ||
2016 | $13.83 | 0.03 | (0.39) | (0.36) | (0.07) | (1.14) | (1.21) | $12.26 | (2.62)% | 2.39% | 1.80% | 0.32% | 107% | $57 | ||
2015 | $15.11 | 0.04 | 0.59 | 0.63 | (0.04) | (1.87) | (1.91) | $13.83 | 4.28% | 2.23% | 1.80% | 0.32% | 106% | $9 | ||
2014 | $12.83 | 0.03 | 3.25 | 3.28 | (0.04) | (0.96) | (1.00) | $15.11 | 26.27% | 2.27% | 1.80% | 0.19% | 104% | $176 |
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 and do not reflect applicable sales charges, if any. Total returns for periods less than one year are not annualized. |
(3) | Six months ended December 31, 2018 (unaudited). |
(4) | Annualized. |
(5) | Per-share amount was less than $0.005. |
See Notes to Financial Statements.
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
Descriptions of the principles and policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund are available without charge, upon request, by calling 1-800-345-2021 or visiting the "About Us" page of American Century Investments’ website at americancentury.com. A description of the policies is also available 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. 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.
28
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 Quantitative Equity 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. | ||
©2019 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-91459 1902 |
Semiannual Report | |
December 31, 2018 | |
Disciplined Growth Fund | |
Investor Class (ADSIX) | |
I Class (ADCIX) | |
Y Class (ADCYX) | |
A Class (ADCVX) | |
C Class (ADCCX) | |
R Class (ADRRX) | |
R5 Class (ADGGX) |
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the fund’s shareholder reports like this one will no longer be sent by mail, unless you specifically request paper copies of the reports from the fund or from your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the fund or your financial intermediary electronically by calling or sending an email request to your appropriate contacts as listed on the back cover of this report.
You may elect to receive all future reports in paper free of charge. You can inform the fund or your financial intermediary that you wish to continue receiving paper copies of your shareholder reports by calling or sending an email request to your appropriate contacts as listed on the back cover of this report. Your election to receive reports in paper will apply to all funds held with the fund complex/your financial intermediary.
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 period ended December 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, please visit our website, americancentury.com.
Risk-On/Risk-Off Rotation Highlights Heightened Volatility
The six-month reporting period began on an upbeat note for stock investors. Against a backdrop of robust economic and earnings data and federal tax and regulatory reform, U.S. stocks soared. The S&P 500 Index gained nearly 8% in the first three months of the period. Outside the U.S., stocks also advanced, but the gains were more subdued amid signs of slowing growth. Meanwhile, favorable U.S. economic data and continued Federal Reserve (Fed) tightening helped push U.S. Treasury yields higher. This pressured interest rate-sensitive assets, including longer-maturity Treasuries, gold, utilities stocks, and REITs (real estate investment trusts), and they generally underperformed U.S. stocks.
In the second half of the reporting period, investor sentiment and asset-class performance took a drastic turn. Investors exited stocks on mounting concerns about slowing global economic and earnings growth and Fed policy. Along with its December interest rate increase, the Fed delivered a surprisingly bullish outlook. Investors feared the Fed’s plans for two rate hikes in 2019 were too aggressive, further fueling the steep sell-off among riskier assets. The S&P 500 Index declined more than 13% in the fourth quarter. For the entire six-month period, U.S. stocks fell 6.85%. Losses among non-U.S. stocks were even steeper.
The risk-off climate in the second half of the period sparked a flight to quality. Treasury yields plunged in the fourth quarter, triggering a year-end rally in Treasuries and other perceived safe-haven assets. Overall, Treasuries were up for the six-month period and significantly outperformed stocks and other riskier assets.
As recent performance trends indicate, market volatility remains a formidable force. But volatile markets often produce the most compelling investment opportunities. We believe this scenario underscores the importance of 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 |
DECEMBER 31, 2018 | |
Top Ten Holdings | % of net assets |
Apple, Inc. | 7.3% |
Amazon.com, Inc. | 6.0% |
Microsoft Corp. | 5.9% |
Alphabet, Inc., Class A | 5.2% |
Facebook, Inc., Class A | 3.4% |
Visa, Inc., Class A | 2.9% |
UnitedHealth Group, Inc. | 2.8% |
Boeing Co. (The) | 2.3% |
AbbVie, Inc. | 2.1% |
Adobe, Inc. | 1.8% |
Top Five Industries | % of net assets |
Software | 13.2% |
Interactive Media and Services | 8.6% |
Technology Hardware, Storage and Peripherals | 8.1% |
Biotechnology | 7.3% |
Internet and Direct Marketing Retail | 6.9% |
Types of Investments in Portfolio | % of net assets |
Common Stocks | 99.9% |
Temporary Cash Investments | 0.4% |
Other Assets and Liabilities | (0.3)% |
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 July 1, 2018 to December 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 7/1/18 | Ending Account Value 12/31/18 | Expenses Paid During Period(1) 7/1/18 - 12/31/18 | Annualized Expense Ratio(1) | |
Actual | ||||
Investor Class | $1,000 | $894.80 | $4.87 | 1.02% |
I Class | $1,000 | $895.90 | $3.92 | 0.82% |
Y Class | $1,000 | $896.20 | $3.68 | 0.77% |
A Class | $1,000 | $893.60 | $6.06 | 1.27% |
C Class | $1,000 | $890.90 | $9.63 | 2.02% |
R Class | $1,000 | $892.70 | $7.25 | 1.52% |
R5 Class | $1,000 | $896.00 | $3.92 | 0.82% |
Hypothetical | ||||
Investor Class | $1,000 | $1,020.06 | $5.19 | 1.02% |
I Class | $1,000 | $1,021.07 | $4.18 | 0.82% |
Y Class | $1,000 | $1,021.32 | $3.92 | 0.77% |
A Class | $1,000 | $1,018.80 | $6.46 | 1.27% |
C Class | $1,000 | $1,015.02 | $10.26 | 2.02% |
R Class | $1,000 | $1,017.54 | $7.73 | 1.52% |
R5 Class | $1,000 | $1,021.07 | $4.18 | 0.82% |
(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 |
DECEMBER 31, 2018 (UNAUDITED)
Shares | Value | ||||
COMMON STOCKS — 99.9% | |||||
Aerospace and Defense — 3.4% | |||||
Astronics Corp.(1) | 504 | $ | 15,347 | ||
Astronics Corp., Class B(1) | 604 | 18,368 | |||
Boeing Co. (The) | 36,456 | 11,757,060 | |||
Raytheon Co. | 36,767 | 5,638,219 | |||
17,428,994 | |||||
Auto Components† | |||||
Stoneridge, Inc.(1) | 1,968 | 48,511 | |||
Banks — 1.0% | |||||
Central Pacific Financial Corp. | 120,028 | 2,922,682 | |||
Comerica, Inc. | 24,728 | 1,698,566 | |||
Independent Bank Corp. | 18,897 | 397,215 | |||
United Community Banks, Inc. | 5,797 | 124,404 | |||
5,142,867 | |||||
Beverages — 1.2% | |||||
Coca-Cola Co. (The) | 40,982 | 1,940,498 | |||
Constellation Brands, Inc., Class A | 13,872 | 2,230,895 | |||
PepsiCo, Inc. | 16,421 | 1,814,192 | |||
5,985,585 | |||||
Biotechnology — 7.3% | |||||
AbbVie, Inc. | 113,800 | 10,491,222 | |||
Amgen, Inc. | 48,056 | 9,355,061 | |||
Biogen, Inc.(1) | 23,252 | 6,996,992 | |||
Celgene Corp.(1) | 35,044 | 2,245,970 | |||
Genomic Health, Inc.(1) | 10,629 | 684,614 | |||
Incyte Corp.(1) | 69,075 | 4,392,479 | |||
Vertex Pharmaceuticals, Inc.(1) | 19,787 | 3,278,904 | |||
37,445,242 | |||||
Building Products† | |||||
Continental Building Products, Inc.(1) | 8,206 | 208,843 | |||
Capital Markets — 1.3% | |||||
BGC Partners, Inc., Class A | 11,855 | 61,290 | |||
Blucora, Inc.(1) | 21,589 | 575,131 | |||
Interactive Brokers Group, Inc., Class A | 45,953 | 2,511,332 | |||
LPL Financial Holdings, Inc. | 9,565 | 584,230 | |||
TD Ameritrade Holding Corp. | 55,310 | 2,707,978 | |||
6,439,961 | |||||
Chemicals — 0.1% | |||||
Scotts Miracle-Gro Co. (The) | 2,450 | 150,577 | |||
Sherwin-Williams Co. (The) | 608 | 239,224 | |||
389,801 | |||||
Commercial Services and Supplies — 1.9% | |||||
MSA Safety, Inc. | 28,080 | 2,647,102 | |||
Republic Services, Inc. | 61,372 | 4,424,307 | |||
Waste Management, Inc. | 29,907 | 2,661,424 | |||
9,732,833 |
6
Shares | Value | ||||
Communications Equipment — 0.1% | |||||
Arista Networks, Inc.(1) | 1,530 | $ | 322,371 | ||
Quantenna Communications, Inc.(1) | 11,953 | 171,525 | |||
493,896 | |||||
Consumer Finance — 1.1% | |||||
Discover Financial Services | 64,522 | 3,805,508 | |||
Synchrony Financial | 67,955 | 1,594,224 | |||
5,399,732 | |||||
Diversified Telecommunication Services† | |||||
Vonage Holdings Corp.(1) | 506 | 4,417 | |||
Electronic Equipment, Instruments and Components — 2.2% | |||||
CDW Corp. | 49,825 | 4,038,316 | |||
FLIR Systems, Inc. | 60,788 | 2,646,709 | |||
National Instruments Corp. | 77,981 | 3,538,778 | |||
Zebra Technologies Corp., Class A(1) | 6,220 | 990,411 | |||
11,214,214 | |||||
Energy Equipment and Services — 0.9% | |||||
Halliburton Co. | 164,357 | 4,368,609 | |||
Entertainment — 1.2% | |||||
Electronic Arts, Inc.(1) | 62,006 | 4,892,893 | |||
Netflix, Inc.(1) | 2,786 | 745,701 | |||
Walt Disney Co. (The) | 5,858 | 642,330 | |||
6,280,924 | |||||
Equity Real Estate Investment Trusts (REITs) — 0.2% | |||||
GEO Group, Inc. (The) | 39,660 | 781,302 | |||
Tanger Factory Outlet Centers, Inc. | 18,395 | 371,947 | |||
1,153,249 | |||||
Food and Staples Retailing† | |||||
Walgreens Boots Alliance, Inc. | 557 | 38,060 | |||
Health Care Equipment and Supplies — 2.0% | |||||
CONMED Corp. | 9,133 | 586,339 | |||
DexCom, Inc.(1) | 24,090 | 2,885,982 | |||
ICU Medical, Inc.(1) | 17,558 | 4,031,843 | |||
Integer Holdings Corp.(1) | 34,907 | 2,662,008 | |||
Surmodics, Inc.(1) | 2,203 | 104,114 | |||
10,270,286 | |||||
Health Care Providers and Services — 3.1% | |||||
Ensign Group, Inc. (The) | 27,929 | 1,083,366 | |||
UnitedHealth Group, Inc. | 58,490 | 14,571,029 | |||
15,654,395 | |||||
Health Care Technology — 0.2% | |||||
athenahealth, Inc.(1) | 2,205 | 290,906 | |||
Computer Programs & Systems, Inc. | 5,498 | 138,000 | |||
HealthStream, Inc. | 18,251 | 440,761 | |||
869,667 | |||||
Hotels, Restaurants and Leisure — 2.9% | |||||
Darden Restaurants, Inc. | 40,532 | 4,047,526 | |||
Ruth's Hospitality Group, Inc. | 27,413 | 623,097 | |||
Starbucks Corp. | 120,680 | 7,771,792 | |||
Texas Roadhouse, Inc. | 41,651 | 2,486,565 | |||
14,928,980 |
7
Shares | Value | ||||
Household Durables — 0.6% | |||||
PulteGroup, Inc. | 123,842 | $ | 3,218,654 | ||
Insurance — 1.9% | |||||
Progressive Corp. (The) | 96,493 | 5,821,423 | |||
Travelers Cos., Inc. (The) | 31,176 | 3,733,326 | |||
�� | 9,554,749 | ||||
Interactive Media and Services — 8.6% | |||||
Alphabet, Inc., Class A(1) | 25,617 | 26,768,740 | |||
Facebook, Inc., Class A(1) | 131,508 | 17,239,384 | |||
44,008,124 | |||||
Internet and Direct Marketing Retail — 6.9% | |||||
Amazon.com, Inc.(1) | 20,458 | 30,727,302 | |||
Booking Holdings, Inc.(1) | 5 | 8,612 | |||
eBay, Inc.(1) | 155,594 | 4,367,524 | |||
Stamps.com, Inc.(1) | 687 | 106,925 | |||
35,210,363 | |||||
IT Services — 6.7% | |||||
Accenture plc, Class A | 3,917 | 552,336 | |||
Akamai Technologies, Inc.(1) | 45,535 | 2,781,278 | |||
Booz Allen Hamilton Holding Corp. | 33,386 | 1,504,707 | |||
EVERTEC, Inc. | 34,946 | 1,002,950 | |||
Fidelity National Information Services, Inc. | 42,106 | 4,317,970 | |||
MasterCard, Inc., Class A | 18,584 | 3,505,872 | |||
MAXIMUS, Inc. | 12,255 | 797,678 | |||
NIC, Inc. | 13,127 | 163,825 | |||
PayPal Holdings, Inc.(1) | 5,501 | 462,579 | |||
VeriSign, Inc.(1) | 30,717 | 4,555,024 | |||
Visa, Inc., Class A | 110,883 | 14,629,903 | |||
34,274,122 | |||||
Life Sciences Tools and Services — 0.8% | |||||
Thermo Fisher Scientific, Inc. | 18,469 | 4,133,177 | |||
Machinery — 0.3% | |||||
Global Brass & Copper Holdings, Inc. | 10,130 | 254,770 | |||
Hyster-Yale Materials Handling, Inc. | 1,315 | 81,477 | |||
Lydall, Inc.(1) | 2,290 | 46,510 | |||
Parker-Hannifin Corp. | 5,928 | 884,102 | |||
1,266,859 | |||||
Media† | |||||
Entravision Communications Corp., Class A | 29,489 | 85,813 | |||
Metals and Mining — 0.7% | |||||
Steel Dynamics, Inc. | 120,764 | 3,627,751 | |||
Oil, Gas and Consumable Fuels — 2.0% | |||||
Continental Resources, Inc.(1) | 74,010 | 2,974,462 | |||
CVR Energy, Inc. | 107,670 | 3,712,461 | |||
EOG Resources, Inc. | 42,451 | 3,702,152 | |||
10,389,075 | |||||
Personal Products — 0.4% | |||||
Medifast, Inc. | 16,618 | 2,077,582 | |||
Pharmaceuticals — 4.2% | |||||
Allergan plc | 25,221 | 3,371,039 | |||
Bristol-Myers Squibb Co. | 106,337 | 5,527,397 |
8
Shares | Value | ||||
Eli Lilly & Co. | 53,850 | $ | 6,231,522 | ||
Zoetis, Inc. | 71,395 | 6,107,128 | |||
21,237,086 | |||||
Professional Services — 2.5% | |||||
ASGN, Inc.(1) | 1,588 | 86,546 | |||
BG Staffing, Inc. | 29,688 | 613,057 | |||
CoStar Group, Inc.(1) | 12,501 | 4,217,087 | |||
Insperity, Inc. | 21,758 | 2,031,327 | |||
Kforce, Inc. | 46,839 | 1,448,262 | |||
Robert Half International, Inc. | 73,707 | 4,216,040 | |||
TrueBlue, Inc.(1) | 6,234 | 138,707 | |||
12,751,026 | |||||
Real Estate Management and Development† | |||||
Newmark Group, Inc., Class A | 5,499 | 44,102 | |||
Road and Rail — 0.5% | |||||
ArcBest Corp. | 77,181 | 2,644,221 | |||
Semiconductors and Semiconductor Equipment — 2.9% | |||||
Advanced Micro Devices, Inc.(1) | 19,071 | 352,051 | |||
Broadcom, Inc. | 8,425 | 2,142,309 | |||
Intel Corp. | 98,682 | 4,631,146 | |||
Micron Technology, Inc.(1) | 91,102 | 2,890,666 | |||
NVIDIA Corp. | 679 | 90,647 | |||
ON Semiconductor Corp.(1) | 227,140 | 3,750,081 | |||
Qorvo, Inc.(1) | 19,940 | 1,210,956 | |||
15,067,856 | |||||
Software — 13.2% | |||||
Adobe, Inc.(1) | 41,353 | 9,355,703 | |||
Cadence Design Systems, Inc.(1) | 93,779 | 4,077,511 | |||
Cornerstone OnDemand, Inc.(1) | 15,510 | 782,169 | |||
Fortinet, Inc.(1) | 9,620 | 677,537 | |||
Intuit, Inc. | 28,652 | 5,640,146 | |||
LogMeIn, Inc. | 10,286 | 839,029 | |||
Microsoft Corp. | 295,229 | 29,986,410 | |||
salesforce.com, Inc.(1) | 25,185 | 3,449,589 | |||
Teradata Corp.(1) | 105,551 | 4,048,936 | |||
Ultimate Software Group, Inc. (The)(1) | 17,947 | 4,394,682 | |||
VMware, Inc., Class A | 31,827 | 4,364,436 | |||
67,616,148 | |||||
Specialty Retail — 5.1% | |||||
AutoZone, Inc.(1) | 5,634 | 4,723,208 | |||
Burlington Stores, Inc.(1) | 32,151 | 5,230,003 | |||
Home Depot, Inc. (The) | 27,010 | 4,640,858 | |||
O'Reilly Automotive, Inc.(1) | 16,455 | 5,665,950 | |||
Ross Stores, Inc. | 67,026 | 5,576,563 | |||
25,836,582 | |||||
Technology Hardware, Storage and Peripherals — 8.1% | |||||
Apple, Inc. | 236,503 | 37,305,983 | |||
Immersion Corp.(1) | 55,380 | 496,205 | |||
NetApp, Inc. | 63,413 | 3,783,854 | |||
41,586,042 |
9
Shares | Value | ||||
Textiles, Apparel and Luxury Goods — 1.9% | |||||
Columbia Sportswear Co. | 8,759 | $ | 736,544 | ||
Deckers Outdoor Corp.(1) | 36,946 | 4,727,241 | |||
NIKE, Inc., Class B | 12,832 | 951,364 | |||
Tapestry, Inc. | 102,090 | 3,445,538 | |||
9,860,687 | |||||
Thrifts and Mortgage Finance — 0.3% | |||||
Essent Group Ltd.(1) | 42,227 | 1,443,319 | |||
Merchants Bancorp | 7,239 | 144,490 | |||
Mr Cooper Group, Inc.(1) | 2,262 | 26,398 | |||
1,614,207 | |||||
Tobacco — 1.4% | |||||
Altria Group, Inc. | 141,495 | 6,988,438 | |||
Trading Companies and Distributors — 0.7% | |||||
W.W. Grainger, Inc. | 13,139 | 3,709,928 | |||
Wireless Telecommunication Services — 0.1% | |||||
T-Mobile US, Inc.(1) | 10,182 | 647,677 | |||
TOTAL COMMON STOCKS (Cost $422,465,407) | 510,949,335 | ||||
TEMPORARY CASH INVESTMENTS — 0.4% | |||||
Repurchase Agreement, BMO Capital Markets Corp., (collateralized by various U.S. Treasury obligations, 0.125% - 2.75%, 10/31/19 - 2/15/44, valued at $1,951,151), in a joint trading account at 2.45%, dated 12/31/18, due 1/2/19 (Delivery value $1,913,402) | 1,913,142 | ||||
Repurchase Agreement, Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 3.375%, 11/15/48, valued at $325,993), at 1.25%, dated 12/31/18, due 1/2/19 (Delivery value $319,022) | 319,000 | ||||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $2,232,142) | 2,232,142 | ||||
TOTAL INVESTMENT SECURITIES — 100.3% (Cost $424,697,549) | 513,181,477 | ||||
OTHER ASSETS AND LIABILITIES — (0.3)% | (1,702,928 | ) | |||
TOTAL NET ASSETS — 100.0% | $ | 511,478,549 |
NOTES TO SCHEDULE OF INVESTMENTS |
† | Category is less than 0.05% of total net assets. |
(1) | Non-income producing. |
See Notes to Financial Statements.
10
Statement of Assets and Liabilities |
DECEMBER 31, 2018 (UNAUDITED) | |||
Assets | |||
Investment securities, at value (cost of $424,697,549) | $ | 513,181,477 | |
Receivable for capital shares sold | 437,335 | ||
Dividends and interest receivable | 280,459 | ||
513,899,271 | |||
Liabilities | |||
Disbursements in excess of demand deposit cash | 17,069 | ||
Payable for capital shares redeemed | 1,926,281 | ||
Accrued management fees | 439,066 | ||
Distribution and service fees payable | 38,306 | ||
2,420,722 | |||
Net Assets | $ | 511,478,549 | |
Net Assets Consist of: | |||
Capital (par value and paid-in surplus) | $ | 420,183,709 | |
Distributable earnings | 91,294,840 | ||
$ | 511,478,549 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | ||||
Investor Class, $0.01 Par Value | $275,041,952 | 15,026,082 | $18.30 | |||
I Class, $0.01 Par Value | $166,426,069 | 9,060,551 | $18.37 | |||
Y Class, $0.01 Par Value | $399,353 | 21,730 | $18.38 | |||
A Class, $0.01 Par Value | $29,389,023 | 1,622,355 | $18.12* | |||
C Class, $0.01 Par Value | $30,766,931 | 1,825,165 | $16.86 | |||
R Class, $0.01 Par Value | $8,320,766 | 469,300 | $17.73 | |||
R5 Class, $0.01 Par Value | $1,134,455 | 61,721 | $18.38 |
*Maximum offering price $19.23 (net asset value divided by 0.9425).
See Notes to Financial Statements.
11
Statement of Operations |
FOR THE SIX MONTHS ENDED DECEMBER 31, 2018 (UNAUDITED) | |||
Investment Income (Loss) | |||
Income: | |||
Dividends | $ | 4,034,242 | |
Interest | 24,631 | ||
4,058,873 | |||
Expenses: | |||
Management fees | 3,033,714 | ||
Distribution and service fees: | |||
A Class | 45,186 | ||
C Class | 193,926 | ||
R Class | 24,858 | ||
Directors' fees and expenses | 22,752 | ||
Other expenses | 4,178 | ||
3,324,614 | |||
Net investment income (loss) | 734,259 | ||
Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on investment transactions | 35,579,690 | ||
Change in net unrealized appreciation (depreciation) on investments | (97,220,298 | ) | |
Net realized and unrealized gain (loss) | (61,640,608 | ) | |
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | (60,906,349 | ) |
See Notes to Financial Statements.
12
Statement of Changes in Net Assets |
SIX MONTHS ENDED DECEMBER 31, 2018 (UNAUDITED) AND YEAR ENDED JUNE 30, 2018 | ||||||
Increase (Decrease) in Net Assets | December 31, 2018 | June 30, 2018 | ||||
Operations | ||||||
Net investment income (loss) | $ | 734,259 | $ | 1,504,460 | ||
Net realized gain (loss) | 35,579,690 | 102,467,670 | ||||
Change in net unrealized appreciation (depreciation) | (97,220,298 | ) | 26,906,887 | |||
Net increase (decrease) in net assets resulting from operations | (60,906,349 | ) | 130,879,017 | |||
Distributions to Shareholders | ||||||
From earnings:(1) | ||||||
Investor Class | (44,670,071 | ) | (33,683,311 | ) | ||
I Class | (28,543,082 | ) | (21,343,836 | ) | ||
Y Class | (62,999 | ) | (497 | ) | ||
A Class | (4,820,931 | ) | (4,537,047 | ) | ||
C Class | (5,520,779 | ) | (3,660,556 | ) | ||
R Class | (1,329,846 | ) | (837,751 | ) | ||
R5 Class | (172,198 | ) | (42,306 | ) | ||
Decrease in net assets from distributions | (85,119,906 | ) | (64,105,304 | ) | ||
Capital Share Transactions | ||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | (26,479,547 | ) | (169,631,530 | ) | ||
Net increase (decrease) in net assets | (172,505,802 | ) | (102,857,817 | ) | ||
Net Assets | ||||||
Beginning of period | 683,984,351 | 786,842,168 | ||||
End of period | $ | 511,478,549 | $ | 683,984,351 |
(1) | Prior period presentation has been updated to reflect the current period combination of distributions to shareholders from net investment income and net realized gains. Distributions from net investment income were $(472,347), $(777,511), $(23) and $(3,760) for Investor Class, I Class, Y Class and R5 Class, respectively. Distributions from net realized gains were $(33,210,964), $(20,566,325), $(474), $(4,537,047), $(3,660,556), $(837,751) and $(38,546) for Investor Class, I Class, Y Class, A Class, C Class, R Class and R5 Class, respectively. |
See Notes to Financial Statements.
13
Notes to Financial Statements |
DECEMBER 31, 2018 (UNAUDITED)
1. Organization
American Century Quantitative Equity 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. Disciplined 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, Y Class, A Class, C Class, R Class and R5 Class. The A Class may incur an initial sales charge. The A Class and C Class may be subject to a contingent deferred sales charge.
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.
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.
14
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.
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, if any, are generally declared and paid semiannually. Distributions from 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.
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.
15
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 fee consists of (1) an Investment Category Fee based on the daily net assets of the fund and certain other accounts managed by the investment advisor that are in the same broad investment category as the fund and (2) a Complex Fee based on the assets of all the funds in the American Century Investments family of funds.
The Investment Category Fee range, the Complex Fee range and the effective annual management fee for each class for the period ended December 31, 2018 are as follows:
Investment Category Fee Range | Complex Fee Range | Effective Annual Management Fee | |
Investor Class | 0.6880% to 0.8700% | 0.2500% to 0.3100% | 1.01% |
I Class | 0.0500% to 0.1100% | 0.81% | |
Y Class | 0.0000% to 0.0600% | 0.76% | |
A Class | 0.2500% to 0.3100% | 1.01% | |
C Class | 0.2500% to 0.3100% | 1.01% | |
R Class | 0.2500% to 0.3100% | 1.01% | |
R5 Class | 0.0500% to 0.1100% | 0.81% |
Distribution and Service Fees — The Board of Directors has adopted a separate Master Distribution and Individual Shareholder Services Plan for each of the A Class, C Class and R Class (collectively the plans), pursuant to Rule 12b-1 of the 1940 Act. The plans provide that the A Class will pay ACIS an annual distribution and service fee of 0.25%. The plans provide that the C Class will pay ACIS an annual distribution and service fee of 1.00%, of which 0.25% is paid for individual shareholder services and 0.75% is paid for distribution services. The plans provide that the R Class will pay ACIS an annual distribution and service fee of 0.50%. The fees are computed and accrued daily based on each class’s daily net assets and paid monthly in arrears. The fees are used to pay financial intermediaries for distribution and individual shareholder services. Fees incurred under the plans during the period ended December 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 $5,110,118 and $3,076,532, respectively. The effect of interfund transactions on the Statement of Operations was $310,053 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 December 31, 2018 were $327,417,696 and $434,668,456, respectively.
16
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended December 31, 2018 | Year ended June 30, 2018 | |||||||||
Shares | Amount | Shares | Amount | |||||||
Investor Class/Shares Authorized | 170,000,000 | 170,000,000 | ||||||||
Sold | 1,115,885 | $ | 25,646,605 | 2,472,572 | $ | 58,172,305 | ||||
Issued in reinvestment of distributions | 2,291,436 | 43,972,655 | 1,466,544 | 33,371,100 | ||||||
Redeemed | (3,468,878 | ) | (80,993,570 | ) | (8,504,895 | ) | (200,151,785 | ) | ||
(61,557 | ) | (11,374,310 | ) | (4,565,779 | ) | (108,608,380 | ) | |||
I Class/Shares Authorized | 100,000,000 | 100,000,000 | ||||||||
Sold | 854,303 | 20,763,204 | 3,053,444 | 71,671,023 | ||||||
Issued in reinvestment of distributions | 1,476,631 | 28,452,009 | 913,990 | 20,917,098 | ||||||
Redeemed | (2,855,496 | ) | (65,010,933 | ) | (5,144,961 | ) | (120,641,069 | ) | ||
(524,562 | ) | (15,795,720 | ) | (1,177,527 | ) | (28,052,948 | ) | |||
Y Class/Shares Authorized | 50,000,000 | 50,000,000 | ||||||||
Sold | 18,208 | 470,294 | — | — | ||||||
Issued in reinvestment of distributions | 3,268 | 62,999 | 22 | 497 | ||||||
21,476 | 533,293 | 22 | 497 | |||||||
A Class/Shares Authorized | 50,000,000 | 50,000,000 | ||||||||
Sold | 143,063 | 3,215,110 | 376,774 | 8,788,129 | ||||||
Issued in reinvestment of distributions | 227,180 | 4,314,141 | 167,654 | 3,782,262 | ||||||
Redeemed | (332,859 | ) | (7,619,296 | ) | (1,620,851 | ) | (37,798,729 | ) | ||
37,384 | (90,045 | ) | (1,076,423 | ) | (25,228,338 | ) | ||||
C Class/Shares Authorized | 20,000,000 | 20,000,000 | ||||||||
Sold | 36,052 | 734,229 | 93,700 | 2,087,597 | ||||||
Issued in reinvestment of distributions | 300,837 | 5,318,801 | 164,651 | 3,523,536 | ||||||
Redeemed | (297,127 | ) | (6,027,177 | ) | (589,772 | ) | (13,023,595 | ) | ||
39,762 | 25,853 | (331,421 | ) | (7,412,462 | ) | |||||
R Class/Shares Authorized | 20,000,000 | 20,000,000 | ||||||||
Sold | 52,458 | 1,213,556 | 71,330 | 1,648,416 | ||||||
Issued in reinvestment of distributions | 71,536 | 1,329,846 | 37,720 | 837,751 | ||||||
Redeemed | (107,497 | ) | (2,616,201 | ) | (172,037 | ) | (3,935,711 | ) | ||
16,497 | (72,799 | ) | (62,987 | ) | (1,449,544 | ) | ||||
R5 Class/Shares Authorized | 50,000,000 | 50,000,000 | ||||||||
Sold | 8,745 | 201,823 | 48,935 | 1,165,506 | ||||||
Issued in reinvestment of distributions | 8,933 | 172,198 | 1,840 | 42,306 | ||||||
Redeemed | (3,267 | ) | (79,840 | ) | (3,697 | ) | (88,167 | ) | ||
14,411 | 294,181 | 47,078 | 1,119,645 | |||||||
Net increase (decrease) | (456,589 | ) | $ | (26,479,547 | ) | (7,167,037 | ) | $ | (169,631,530 | ) |
17
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.
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 | $ | 510,949,335 | — | — | ||||
Temporary Cash Investments | — | $ | 2,232,142 | — | ||||
$ | 510,949,335 | $ | 2,232,142 | — |
7. 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.
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 | $ | 426,505,823 | |
Gross tax appreciation of investments | $ | 121,344,638 | |
Gross tax depreciation of investments | (34,668,984 | ) | |
Net tax appreciation (depreciation) of investments | $ | 86,675,654 |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales.
18
Financial Highlights |
For a Share Outstanding Throughout the Years Ended June 30 (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) | $24.05 | 0.03 | (2.40) | (2.37) | — | (3.38) | (3.38) | $18.30 | (10.52)% | 1.02%(4) | 0.24%(4) | 52% | $275,042 | ||
2018 | $22.10 | 0.05 | 3.97 | 4.02 | (0.03) | (2.04) | (2.07) | $24.05 | 18.80% | 1.02% | 0.21% | 97% | $362,865 | ||
2017 | $18.36 | 0.11 | 3.74 | 3.85 | (0.11) | — | (0.11) | $22.10 | 20.88% | 1.02% | 0.51% | 124% | $434,242 | ||
2016 | $19.15 | 0.12 | (0.53) | (0.41) | (0.12) | (0.26) | (0.38) | $18.36 | (2.08)% | 1.03% | 0.64% | 113% | $370,901 | ||
2015 | $18.82 | 0.14 | 1.09 | 1.23 | (0.11) | (0.79) | (0.90) | $19.15 | 6.59% | 1.02% | 0.75% | 108% | $502,389 | ||
2014 | $15.56 | 0.12 | 4.15 | 4.27 | (0.11) | (0.90) | (1.01) | $18.82 | 28.05% | 1.02% | 0.70% | 102% | $226,370 | ||
I Class | |||||||||||||||
2018(3) | $24.13 | 0.05 | (2.40) | (2.35) | (0.03) | (3.38) | (3.41) | $18.37 | (10.41)% | 0.82%(4) | 0.44%(4) | 52% | $166,426 | ||
2018 | $22.16 | 0.10 | 3.99 | 4.09 | (0.08) | (2.04) | (2.12) | $24.13 | 19.01% | 0.82% | 0.41% | 97% | $231,261 | ||
2017 | $18.41 | 0.15 | 3.75 | 3.90 | (0.15) | — | (0.15) | $22.16 | 21.18% | 0.82% | 0.71% | 124% | $238,480 | ||
2016 | $19.20 | 0.16 | (0.53) | (0.37) | (0.16) | (0.26) | (0.42) | $18.41 | (1.95)% | 0.83% | 0.84% | 113% | $318,576 | ||
2015 | $18.87 | 0.20 | 1.06 | 1.26 | (0.14) | (0.79) | (0.93) | $19.20 | 6.84% | 0.82% | 0.95% | 108% | $372,011 | ||
2014 | $15.60 | 0.16 | 4.15 | 4.31 | (0.14) | (0.90) | (1.04) | $18.87 | 28.30% | 0.82% | 0.90% | 102% | $26,334 | ||
Y Class | |||||||||||||||
2018(3) | $24.14 | 0.08 | (2.43) | (2.35) | (0.03) | (3.38) | (3.41) | $18.38 | (10.38)% | 0.77%(4) | 0.49%(4) | 52% | $399 | ||
2018 | $22.17 | 0.11 | 3.99 | 4.10 | (0.09) | (2.04) | (2.13) | $24.14 | 19.06% | 0.77% | 0.46% | 97% | $6 | ||
2017(5) | $21.62 | 0.04 | 0.63 | 0.67 | (0.12) | — | (0.12) | $22.17 | 3.07% | 0.77%(4) | 0.74%(4) | 124%(6) | $5 |
For a Share Outstanding Throughout the Years Ended June 30 (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) | |||
A Class | |||||||||||||||
2018(3) | $23.87 | —(7) | (2.37) | (2.37) | — | (3.38) | (3.38) | $18.12 | (10.64)% | 1.27%(4) | (0.01)%(4) | 52% | $29,389 | ||
2018 | $21.97 | (0.01) | 3.95 | 3.94 | — | (2.04) | (2.04) | $23.87 | 18.48% | 1.27% | (0.04)% | 97% | $37,832 | ||
2017 | $18.28 | 0.05 | 3.72 | 3.77 | (0.08) | — | (0.08) | $21.97 | 20.61% | 1.27% | 0.26% | 124% | $58,469 | ||
2016 | $19.09 | 0.07 | (0.52) | (0.45) | (0.10) | (0.26) | (0.36) | $18.28 | (2.35)% | 1.28% | 0.39% | 113% | $133,042 | ||
2015 | $18.77 | 0.09 | 1.08 | 1.17 | (0.06) | (0.79) | (0.85) | $19.09 | 6.35% | 1.27% | 0.50% | 108% | $173,300 | ||
2014 | $15.52 | 0.08 | 4.13 | 4.21 | (0.06) | (0.90) | (0.96) | $18.77 | 27.75% | 1.27% | 0.45% | 102% | $95,509 | ||
C Class | |||||||||||||||
2018(3) | $22.55 | (0.09) | (2.22) | (2.31) | — | (3.38) | (3.38) | $16.86 | (10.91)% | 2.02%(4) | (0.76)%(4) | 52% | $30,767 | ||
2018 | $21.00 | (0.17) | 3.76 | 3.59 | — | (2.04) | (2.04) | $22.55 | 17.57% | 2.02% | (0.79)% | 97% | $40,253 | ||
2017 | $17.54 | (0.09) | 3.55 | 3.46 | — | — | — | $21.00 | 19.73% | 2.02% | (0.49)% | 124% | $44,456 | ||
2016 | $18.41 | (0.06) | (0.51) | (0.57) | (0.04) | (0.26) | (0.30) | $17.54 | (3.11)% | 2.03% | (0.36)% | 113% | $45,050 | ||
2015 | $18.21 | (0.05) | 1.04 | 0.99 | — | (0.79) | (0.79) | $18.41 | 5.56% | 2.02% | (0.25)% | 108% | $50,355 | ||
2014 | $15.14 | (0.05) | 4.02 | 3.97 | — | (0.90) | (0.90) | $18.21 | 26.80% | 2.02% | (0.30)% | 102% | $24,646 | ||
R Class | |||||||||||||||
2018(3) | $23.47 | (0.03) | (2.33) | (2.36) | — | (3.38) | (3.38) | $17.73 | (10.73)% | 1.52%(4) | (0.26)%(4) | 52% | $8,321 | ||
2018 | $21.68 | (0.06) | 3.89 | 3.83 | — | (2.04) | (2.04) | $23.47 | 18.20% | 1.52% | (0.29)% | 97% | $10,626 | ||
2017 | $18.06 | —(7) | 3.67 | 3.67 | (0.05) | — | (0.05) | $21.68 | 20.33% | 1.52% | 0.01% | 124% | $11,184 | ||
2016 | $18.89 | 0.03 | (0.52) | (0.49) | (0.08) | (0.26) | (0.34) | $18.06 | (2.60)% | 1.53% | 0.14% | 113% | $12,778 | ||
2015 | $18.60 | 0.04 | 1.06 | 1.10 | (0.02) | (0.79) | (0.81) | $18.89 | 6.06% | 1.52% | 0.25% | 108% | $14,449 | ||
2014 | $15.39 | 0.03 | 4.10 | 4.13 | (0.02) | (0.90) | (0.92) | $18.60 | 27.41% | 1.52% | 0.20% | 102% | $6,611 |
For a Share Outstanding Throughout the Years Ended June 30 (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) | |||
R5 Class | |||||||||||||||
2018(3) | $24.14 | 0.06 | (2.41) | (2.35) | (0.03) | (3.38) | (3.41) | $18.38 | (10.40)% | 0.82%(4) | 0.44%(4) | 52% | $1,134 | ||
2018 | $22.17 | 0.10 | 3.99 | 4.09 | (0.08) | (2.04) | (2.12) | $24.14 | 19.00% | 0.82% | 0.41% | 97% | $1,142 | ||
2017(5) | $21.62 | 0.03 | 0.63 | 0.66 | (0.11) | — | (0.11) | $22.17 | 3.06% | 0.82%(4) | 0.69%(4) | 124%(6) | $5 |
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 and do not reflect applicable sales charges, if any. Total returns for periods less than one year are not annualized. |
(3) | Six months ended December 31, 2018 (unaudited). |
(4) | Annualized. |
(5) | April 10, 2017 (commencement of sale) through June 30, 2017. |
(6) | Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended June 30, 2017. |
(7) | Amount is less than $0.005. |
See Notes to Financial Statements.
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
Descriptions of the principles and policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund are available without charge, upon request, by calling 1-800-345-2021 or visiting the "About Us" page of American Century Investments’ website at americancentury.com. A description of the policies is also available 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. 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.
22
Notes |
23
Notes |
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 Quantitative Equity 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. | ||
©2019 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-91454 1902 |
Semiannual Report | |
December 31, 2018 | |
Equity Growth Fund | |
Investor Class (BEQGX) | |
I Class (AMEIX) | |
A Class (BEQAX) | |
C Class (AEYCX) | |
R Class (AEYRX) | |
R5 Class (AEYGX) |
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the fund’s shareholder reports like this one will no longer be sent by mail, unless you specifically request paper copies of the reports from the fund or from your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the fund or your financial intermediary electronically by calling or sending an email request to your appropriate contacts as listed on the back cover of this report.
You may elect to receive all future reports in paper free of charge. You can inform the fund or your financial intermediary that you wish to continue receiving paper copies of your shareholder reports by calling or sending an email request to your appropriate contacts as listed on the back cover of this report. Your election to receive reports in paper will apply to all funds held with the fund complex/your financial intermediary.
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 period ended December 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, please visit our website, americancentury.com.
Risk-On/Risk-Off Rotation Highlights Heightened Volatility
The six-month reporting period began on an upbeat note for stock investors. Against a backdrop of robust economic and earnings data and federal tax and regulatory reform, U.S. stocks soared. The S&P 500 Index gained nearly 8% in the first three months of the period. Outside the U.S., stocks also advanced, but the gains were more subdued amid signs of slowing growth. Meanwhile, favorable U.S. economic data and continued Federal Reserve (Fed) tightening helped push U.S. Treasury yields higher. This pressured interest rate-sensitive assets, including longer-maturity Treasuries, gold, utilities stocks, and REITs (real estate investment trusts), and they generally underperformed U.S. stocks.
In the second half of the reporting period, investor sentiment and asset-class performance took a drastic turn. Investors exited stocks on mounting concerns about slowing global economic and earnings growth and Fed policy. Along with its December interest rate increase, the Fed delivered a surprisingly bullish outlook. Investors feared the Fed’s plans for two rate hikes in 2019 were too aggressive, further fueling the steep sell-off among riskier assets. The S&P 500 Index declined more than 13% in the fourth quarter. For the entire six-month period, U.S. stocks fell 6.85%. Losses among non-U.S. stocks were even steeper.
The risk-off climate in the second half of the period sparked a flight to quality. Treasury yields plunged in the fourth quarter, triggering a year-end rally in Treasuries and other perceived safe-haven assets. Overall, Treasuries were up for the six-month period and significantly outperformed stocks and other riskier assets.
As recent performance trends indicate, market volatility remains a formidable force. But volatile markets often produce the most compelling investment opportunities. We believe this scenario underscores the importance of 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 |
DECEMBER 31, 2018 | |
Top Ten Holdings | % of net assets |
Microsoft Corp. | 4.6% |
Alphabet, Inc., Class A | 3.8% |
Amazon.com, Inc. | 3.7% |
Apple, Inc. | 3.4% |
JPMorgan Chase & Co. | 2.3% |
Pfizer, Inc. | 2.1% |
Facebook, Inc., Class A | 2.1% |
Intel Corp. | 2.0% |
Visa, Inc., Class A | 1.9% |
Bank of America Corp. | 1.9% |
Top Five Industries | % of net assets |
Software | 8.0% |
Banks | 6.4% |
Interactive Media and Services | 5.9% |
Pharmaceuticals | 5.6% |
Oil, Gas and Consumable Fuels | 5.0% |
Types of Investments in Portfolio | % of net assets |
Common Stocks | 99.1% |
Temporary Cash Investments | 1.1% |
Other Assets and Liabilities | (0.2)% |
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 July 1, 2018 to December 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 7/1/18 | Ending Account Value 12/31/18 | Expenses Paid During Period(1) 7/1/18 - 12/31/18 | Annualized Expense Ratio(1) | |
Actual | ||||
Investor Class | $1,000 | $906.40 | $3.22 | 0.67% |
I Class | $1,000 | $907.50 | $2.26 | 0.47% |
A Class | $1,000 | $905.10 | $4.42 | 0.92% |
C Class | $1,000 | $901.70 | $8.00 | 1.67% |
R Class | $1,000 | $904.00 | $5.61 | 1.17% |
R5 Class | $1,000 | $907.40 | $2.26 | 0.47% |
Hypothetical | ||||
Investor Class | $1,000 | $1,021.83 | $3.41 | 0.67% |
I Class | $1,000 | $1,022.84 | $2.40 | 0.47% |
A Class | $1,000 | $1,020.57 | $4.69 | 0.92% |
C Class | $1,000 | $1,016.79 | $8.49 | 1.67% |
R Class | $1,000 | $1,019.31 | $5.96 | 1.17% |
R5 Class | $1,000 | $1,022.84 | $2.40 | 0.47% |
(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 |
DECEMBER 31, 2018 (UNAUDITED)
Shares | Value | ||||
COMMON STOCKS — 99.1% | |||||
Aerospace and Defense — 3.2% | |||||
Boeing Co. (The) | 133,954 | $ | 43,200,165 | ||
Raytheon Co. | 163,539 | 25,078,706 | |||
Teledyne Technologies, Inc.(1) | 13,621 | 2,820,500 | |||
Textron, Inc. | 282,394 | 12,987,300 | |||
84,086,671 | |||||
Banks — 6.4% | |||||
Bank of America Corp. | 1,991,600 | 49,073,024 | |||
Comerica, Inc. | 166,885 | 11,463,331 | |||
Fifth Third Bancorp | 287,859 | 6,773,322 | |||
JPMorgan Chase & Co. | 622,255 | 60,744,533 | |||
SunTrust Banks, Inc. | 437,286 | 22,056,706 | |||
Wells Fargo & Co. | 332,844 | 15,337,451 | |||
165,448,367 | |||||
Beverages — 1.3% | |||||
Coca-Cola Co. (The) | 544,208 | 25,768,249 | |||
Constellation Brands, Inc., Class A | 46,798 | 7,526,054 | |||
33,294,303 | |||||
Biotechnology — 4.5% | |||||
AbbVie, Inc. | 433,660 | 39,979,116 | |||
Alexion Pharmaceuticals, Inc.(1) | 48,098 | 4,682,821 | |||
Amgen, Inc. | 189,765 | 36,941,553 | |||
Biogen, Inc.(1) | 87,661 | 26,378,948 | |||
Celgene Corp.(1) | 154,580 | 9,907,032 | |||
117,889,470 | |||||
Capital Markets — 0.7% | |||||
Evercore, Inc., Class A | 72,495 | 5,187,742 | |||
Houlihan Lokey, Inc. | 47,366 | 1,743,069 | |||
LPL Financial Holdings, Inc. | 165,813 | 10,127,858 | |||
TD Ameritrade Holding Corp. | 27,436 | 1,343,267 | |||
18,401,936 | |||||
Chemicals — 0.5% | |||||
CF Industries Holdings, Inc. | 321,377 | 13,983,113 | |||
Commercial Services and Supplies — 2.3% | |||||
MSA Safety, Inc. | 85,087 | 8,021,151 | |||
Republic Services, Inc. | 358,089 | 25,814,636 | |||
Waste Management, Inc. | 303,017 | 26,965,483 | |||
60,801,270 | |||||
Communications Equipment — 1.7% | |||||
Cisco Systems, Inc. | 1,018,762 | 44,142,957 | |||
Consumer Finance — 2.6% | |||||
American Express Co. | 286,497 | 27,308,894 |
6
Shares | Value | ||||
Capital One Financial Corp. | 140,238 | $ | 10,600,590 | ||
Discover Financial Services | 356,564 | 21,030,145 | |||
Synchrony Financial | 368,671 | 8,649,022 | |||
67,588,651 | |||||
Diversified Consumer Services — 0.8% | |||||
Graham Holdings Co., Class B | 6,877 | 4,405,269 | |||
H&R Block, Inc. | 619,454 | 15,715,548 | |||
20,120,817 | |||||
Diversified Financial Services — 1.1% | |||||
Berkshire Hathaway, Inc., Class B(1) | 135,018 | 27,567,975 | |||
Diversified Telecommunication Services — 2.0% | |||||
AT&T, Inc. | 187,767 | 5,358,870 | |||
Verizon Communications, Inc. | 830,416 | 46,685,988 | |||
52,044,858 | |||||
Electric Utilities — 0.8% | |||||
OGE Energy Corp. | 516,021 | 20,222,863 | |||
Electronic Equipment, Instruments and Components — 0.7% | |||||
Keysight Technologies, Inc.(1) | 273,645 | 16,987,881 | |||
National Instruments Corp. | 46,399 | 2,105,587 | |||
19,093,468 | |||||
Energy Equipment and Services — 0.7% | |||||
Halliburton Co. | 697,966 | 18,551,936 | |||
Entertainment — 0.9% | |||||
Electronic Arts, Inc.(1) | 294,290 | 23,222,424 | |||
Equity Real Estate Investment Trusts (REITs) — 2.1% | |||||
Brixmor Property Group, Inc. | 1,101,833 | 16,185,927 | |||
GEO Group, Inc. (The) | 286,048 | 5,635,146 | |||
Healthcare Trust of America, Inc., Class A | 374,834 | 9,487,048 | |||
Highwoods Properties, Inc. | 80,377 | 3,109,786 | |||
Host Hotels & Resorts, Inc. | 590,134 | 9,837,534 | |||
PotlatchDeltic Corp. | 72,548 | 2,295,419 | |||
PS Business Parks, Inc. | 30,511 | 3,996,941 | |||
Weingarten Realty Investors | 134,853 | 3,345,703 | |||
53,893,504 | |||||
Food and Staples Retailing — 0.8% | |||||
US Foods Holding Corp.(1) | 656,120 | 20,759,637 | |||
Food Products — 0.9% | |||||
General Mills, Inc. | 602,271 | 23,452,433 | |||
Health Care Equipment and Supplies — 3.8% | |||||
Danaher Corp. | 167,616 | 17,284,562 | |||
DexCom, Inc.(1) | 10,222 | 1,224,596 | |||
Hill-Rom Holdings, Inc. | 133,160 | 11,791,318 | |||
ICU Medical, Inc.(1) | 50,454 | 11,585,752 | |||
Integer Holdings Corp.(1) | 66,984 | 5,108,200 | |||
Medtronic plc | 412,266 | 37,499,715 | |||
STERIS plc | 136,229 | 14,556,069 |
7
Shares | Value | ||||
Varian Medical Systems, Inc.(1) | 4,565 | $ | 517,260 | ||
99,567,472 | |||||
Health Care Providers and Services — 1.3% | |||||
Amedisys, Inc.(1) | 50,935 | 5,964,998 | |||
Cigna Corp. | 2,955 | 561,282 | |||
UnitedHealth Group, Inc. | 107,484 | 26,776,414 | |||
33,302,694 | |||||
Hotels, Restaurants and Leisure — 1.2% | |||||
Darden Restaurants, Inc. | 212,941 | 21,264,288 | |||
Starbucks Corp. | 169,002 | 10,883,729 | |||
32,148,017 | |||||
Household Durables — 0.5% | |||||
NVR, Inc.(1) | 4,869 | 11,865,704 | |||
Household Products — 0.1% | |||||
Procter & Gamble Co. (The) | 24,787 | 2,278,421 | |||
Independent Power and Renewable Electricity Producers — 1.3% | |||||
AES Corp. | 833,754 | 12,056,083 | |||
NRG Energy, Inc. | 576,515 | 22,829,994 | |||
34,886,077 | |||||
Industrial Conglomerates — 0.7% | |||||
Honeywell International, Inc. | 138,233 | 18,263,344 | |||
Insurance — 2.9% | |||||
Hartford Financial Services Group, Inc. (The) | 532,928 | 23,688,650 | |||
Progressive Corp. (The) | 443,240 | 26,740,669 | |||
Travelers Cos., Inc. (The) | 204,862 | 24,532,224 | |||
74,961,543 | |||||
Interactive Media and Services — 5.9% | |||||
Alphabet, Inc., Class A(1) | 95,919 | 100,231,518 | |||
Facebook, Inc., Class A(1) | 410,004 | 53,747,425 | |||
153,978,943 | |||||
Internet and Direct Marketing Retail — 4.5% | |||||
Amazon.com, Inc.(1) | 63,350 | 95,149,800 | |||
eBay, Inc.(1) | 783,803 | 22,001,350 | |||
117,151,150 | |||||
IT Services — 2.8% | |||||
Akamai Technologies, Inc.(1) | 95,184 | 5,813,838 | |||
International Business Machines Corp. | 117,743 | 13,383,847 | |||
MAXIMUS, Inc. | 60,865 | 3,961,703 | |||
Visa, Inc., Class A | 374,067 | 49,354,400 | |||
72,513,788 | |||||
Leisure Products† | |||||
Brunswick Corp. | 15,972 | 741,899 | |||
Life Sciences Tools and Services — 1.7% | |||||
Agilent Technologies, Inc. | 207,208 | 13,978,251 | |||
Thermo Fisher Scientific, Inc. | 139,501 | 31,218,929 | |||
45,197,180 |
8
Shares | Value | ||||
Machinery — 1.7% | |||||
Caterpillar, Inc. | 247,447 | $ | 31,443,090 | ||
Parker-Hannifin Corp. | 91,575 | 13,657,496 | |||
45,100,586 | |||||
Multiline Retail — 0.8% | |||||
Kohl's Corp. | 291,658 | 19,348,592 | |||
Oil, Gas and Consumable Fuels — 5.0% | |||||
Chevron Corp. | 222,362 | 24,190,762 | |||
ConocoPhillips | 457,508 | 28,525,624 | |||
Continental Resources, Inc.(1) | 237,530 | 9,546,331 | |||
CVR Energy, Inc. | 13,973 | 481,789 | |||
EOG Resources, Inc. | 91,871 | 8,012,070 | |||
Exxon Mobil Corp. | 241,708 | 16,482,068 | |||
HollyFrontier Corp. | 94,290 | 4,820,105 | |||
Marathon Petroleum Corp. | 232,919 | 13,744,550 | |||
Phillips 66 | 261,246 | 22,506,343 | |||
128,309,642 | |||||
Paper and Forest Products — 0.3% | |||||
Domtar Corp. | 189,270 | 6,649,055 | |||
Louisiana-Pacific Corp. | 82,520 | 1,833,595 | |||
8,482,650 | |||||
Personal Products — 0.4% | |||||
Edgewell Personal Care Co.(1) | 244,184 | 9,120,272 | |||
Pharmaceuticals — 5.6% | |||||
Allergan plc | 178,185 | 23,816,207 | |||
Bristol-Myers Squibb Co. | 341,374 | 17,744,621 | |||
Jazz Pharmaceuticals plc(1) | 49,997 | 6,197,628 | |||
Johnson & Johnson | 178,922 | 23,089,884 | |||
Merck & Co., Inc. | 15,566 | 1,189,398 | |||
Pfizer, Inc. | 1,272,880 | 55,561,212 | |||
Zoetis, Inc. | 202,006 | 17,279,593 | |||
144,878,543 | |||||
Professional Services — 1.4% | |||||
CoStar Group, Inc.(1) | 43,184 | 14,567,691 | |||
Robert Half International, Inc. | 381,090 | 21,798,348 | |||
36,366,039 | |||||
Real Estate Management and Development — 0.2% | |||||
Jones Lang LaSalle, Inc. | 45,799 | 5,798,153 | |||
Road and Rail — 1.0% | |||||
Norfolk Southern Corp. | 168,128 | 25,141,861 | |||
Semiconductors and Semiconductor Equipment — 3.7% | |||||
Broadcom, Inc. | 74,691 | 18,992,427 | |||
Intel Corp. | 1,100,151 | 51,630,086 | |||
QUALCOMM, Inc. | 429,405 | 24,437,439 | |||
95,059,952 | |||||
Software — 8.0% | |||||
Adobe, Inc.(1) | 158,495 | 35,857,909 |
9
Shares | Value | ||||
Intuit, Inc. | 79,244 | $ | 15,599,181 | ||
LogMeIn, Inc. | 75,597 | 6,166,447 | |||
Microsoft Corp. | 1,174,873 | 119,331,851 | |||
Ultimate Software Group, Inc. (The)(1) | 44,646 | 10,932,466 | |||
VMware, Inc., Class A | 141,805 | 19,445,720 | |||
207,333,574 | |||||
Specialty Retail — 2.9% | |||||
AutoZone, Inc.(1) | 28,591 | 23,968,979 | |||
O'Reilly Automotive, Inc.(1) | 67,720 | 23,318,028 | |||
Ross Stores, Inc. | 325,266 | 27,062,131 | |||
74,349,138 | |||||
Technology Hardware, Storage and Peripherals — 3.7% | |||||
Apple, Inc. | 553,355 | 87,286,218 | |||
Seagate Technology plc | 198,263 | 7,650,969 | |||
94,937,187 | |||||
Textiles, Apparel and Luxury Goods — 2.2% | |||||
Deckers Outdoor Corp.(1) | 184,926 | 23,661,282 | |||
Michael Kors Holdings Ltd.(1) | 385,637 | 14,623,355 | |||
Tapestry, Inc. | 591,386 | 19,959,277 | |||
58,243,914 | |||||
Thrifts and Mortgage Finance — 0.3% | |||||
Essent Group Ltd.(1) | 188,373 | 6,438,589 | |||
Tobacco — 1.2% | |||||
Altria Group, Inc. | 625,705 | 30,903,570 | |||
TOTAL COMMON STOCKS (Cost $2,201,335,749) | 2,571,235,147 | ||||
TEMPORARY CASH INVESTMENTS — 1.1% | |||||
Repurchase Agreement, BMO Capital Markets Corp., (collateralized by various U.S. Treasury obligations, 0.125% - 2.75%, 10/31/19 - 2/15/44, valued at $25,790,426), in a joint trading account at 2.45%, dated 12/31/18, due 1/2/19 (Delivery value $25,291,469) | 25,288,027 | ||||
Repurchase Agreement, Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 3.375%, 11/15/48, valued at $4,307,389), at 1.25%, dated 12/31/18, due 1/2/19 (Delivery value $4,221,293) | 4,221,000 | ||||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $29,509,027) | 29,509,027 | ||||
TOTAL INVESTMENT SECURITIES — 100.2% (Cost $2,230,844,776) | 2,600,744,174 | ||||
OTHER ASSETS AND LIABILITIES — (0.2)% | (6,028,489 | ) | |||
TOTAL NET ASSETS — 100.0% | $ | 2,594,715,685 |
NOTES TO SCHEDULE OF INVESTMENTS |
† | Category is less than 0.05% of total net assets. |
(1) | Non-income producing. |
See Notes to Financial Statements.
10
Statement of Assets and Liabilities |
DECEMBER 31, 2018 (UNAUDITED) | |||
Assets | |||
Investment securities, at value (cost of $2,230,844,776) | $ | 2,600,744,174 | |
Cash | 18,199 | ||
Receivable for capital shares sold | 3,763,394 | ||
Dividends and interest receivable | 2,121,758 | ||
2,606,647,525 | |||
Liabilities | |||
Payable for capital shares redeemed | 10,427,556 | ||
Accrued management fees | 1,472,407 | ||
Distribution and service fees payable | 31,831 | ||
Dividends payable | 46 | ||
11,931,840 | |||
Net Assets | $ | 2,594,715,685 | |
Net Assets Consist of: | |||
Capital (par value and paid-in surplus) | $ | 2,214,726,016 | |
Distributable earnings | 379,989,669 | ||
$ | 2,594,715,685 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | ||||
Investor Class, $0.01 Par Value | $2,112,319,144 | 78,234,008 | $27.00 | |||
I Class, $0.01 Par Value | $378,449,430 | 14,003,469 | $27.03 | |||
A Class, $0.01 Par Value | $74,441,906 | 2,760,804 | $26.96* | |||
C Class, $0.01 Par Value | $7,329,651 | 274,767 | $26.68 | |||
R Class, $0.01 Par Value | $20,416,797 | 756,638 | $26.98 | |||
R5 Class, $0.01 Par Value | $1,758,757 | 65,070 | $27.03 |
*Maximum offering price $28.60 (net asset value divided by 0.9425).
See Notes to Financial Statements.
11
Statement of Operations |
FOR THE SIX MONTHS ENDED DECEMBER 31, 2018 (UNAUDITED) | |||
Investment Income (Loss) | |||
Income: | |||
Dividends | $ | 28,535,397 | |
Interest | 190,128 | ||
28,725,525 | |||
Expenses: | |||
Management fees | 9,673,465 | ||
Distribution and service fees: | |||
A Class | 112,881 | ||
C Class | 46,756 | ||
R Class | 57,866 | ||
Directors' fees and expenses | 107,505 | ||
Other expenses | 127 | ||
9,998,600 | |||
Net investment income (loss) | 18,726,925 | ||
Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on investment transactions | 104,673,746 | ||
Change in net unrealized appreciation (depreciation) on investments | (399,219,547 | ) | |
Net realized and unrealized gain (loss) | (294,545,801 | ) | |
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | (275,818,876 | ) |
See Notes to Financial Statements.
12
Statement of Changes in Net Assets |
SIX MONTHS ENDED DECEMBER 31, 2018 (UNAUDITED) AND YEAR ENDED JUNE 30, 2018 | ||||||
Increase (Decrease) in Net Assets | December 31, 2018 | June 30, 2018 | ||||
Operations | ||||||
Net investment income (loss) | $ | 18,726,925 | $ | 41,879,329 | ||
Net realized gain (loss) | 104,673,746 | 294,153,097 | ||||
Change in net unrealized appreciation (depreciation) | (399,219,547 | ) | 128,926,557 | |||
Net increase (decrease) in net assets resulting from operations | (275,818,876 | ) | 464,958,983 | |||
Distributions to Shareholders | ||||||
From earnings:(1) | ||||||
Investor Class | (250,384,340 | ) | (246,393,955 | ) | ||
I Class | (43,240,067 | ) | (43,061,358 | ) | ||
A Class | (8,349,486 | ) | (9,689,982 | ) | ||
C Class | (823,433 | ) | (1,051,547 | ) | ||
R Class | (2,276,205 | ) | (1,977,467 | ) | ||
R5 Class | (197,817 | ) | (73,675 | ) | ||
Decrease in net assets from distributions | (305,271,348 | ) | (302,247,984 | ) | ||
Capital Share Transactions | ||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | 98,100,762 | (259,690,200 | ) | |||
Net increase (decrease) in net assets | (482,989,462 | ) | (96,979,201 | ) | ||
Net Assets | ||||||
Beginning of period | 3,077,705,147 | 3,174,684,348 | ||||
End of period | $ | 2,594,715,685 | $ | 3,077,705,147 |
(1) | Prior period presentation has been updated to reflect the current period combination of distributions to shareholders from net investment income and net realized gains. Distributions from net investment income were $(31,401,314), $(6,265,397), $(1,028,392), $(29,746), $(196,109) and $(10,135) for Investor Class, I Class, A Class, C Class, R Class and R5 Class, respectively. Distributions from net realized gains were $(214,992,641), $(36,795,961), $(8,661,590), $(1,021,801), $(1,781,358) and $(63,540) for Investor Class, I Class, A Class, C Class, R Class and R5 Class, respectively. |
See Notes to Financial Statements.
13
Notes to Financial Statements |
DECEMBER 31, 2018 (UNAUDITED)
1. Organization
American Century Quantitative Equity 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. Equity 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 by investing in common stocks.
The fund offers the Investor Class, I Class, A Class, C Class, R Class and R5 Class. The A Class may incur an initial sales charge. The A Class and C Class may be subject to a contingent deferred sales charge.
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.
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.
14
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.
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, if any, are generally declared and paid quarterly. Distributions from 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.
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. Various funds issued by American Century Asset Allocation Portfolios, Inc. own, in aggregate, 18% of the shares of the fund.
15
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 fee consists of (1) an Investment Category Fee based on the daily net assets of the fund and certain other accounts managed by the investment advisor that are in the same broad investment category as the fund and (2) a Complex Fee based on the assets of all the funds in the American Century Investments family of funds.
The Investment Category Fee range, the Complex Fee range and the effective annual management fee for each class for the period ended December 31, 2018 are as follows:
Investment Category Fee Range | Complex Fee Range | Effective Annual Management Fee | |
Investor Class | 0.3380% to 0.5200% | 0.2500% to 0.3100% | 0.66% |
I Class | 0.0500% to 0.1100% | 0.46% | |
A Class | 0.2500% to 0.3100% | 0.66% | |
C Class | 0.2500% to 0.3100% | 0.66% | |
R Class | 0.2500% to 0.3100% | 0.66% | |
R5 Class | 0.0500% to 0.1100% | 0.46% |
Distribution and Service Fees — The Board of Directors has adopted a separate Master Distribution and Individual Shareholder Services Plan for each of the A Class, C Class and R Class (collectively the plans), pursuant to Rule 12b-1 of the 1940 Act. The plans provide that the A Class will pay ACIS an annual distribution and service fee of 0.25%. The plans provide that the C Class will pay ACIS an annual distribution and service fee of 1.00%, of which 0.25% is paid for individual shareholder services and 0.75% is paid for distribution services. The plans provide that the R Class will pay ACIS an annual distribution and service fee of 0.50%. The fees are computed and accrued daily based on each class’s daily net assets and paid monthly in arrears. The fees are used to pay financial intermediaries for distribution and individual shareholder services. Fees incurred under the plans during the period ended December 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 $24,331,868 and $6,324,420, respectively. The effect of interfund transactions on the Statement of Operations was $(959,037) in net realized gain (loss) on investment transactions.
16
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the period ended December 31, 2018 were $1,226,413,086 and $1,398,683,207, respectively.
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended December 31, 2018 | Year ended June 30, 2018 | |||||||||
Shares | Amount | Shares | Amount | |||||||
Investor Class/Shares Authorized | 680,000,000 | 680,000,000 | ||||||||
Sold | 3,885,396 | $ | 126,907,373 | 5,332,130 | $ | 176,276,961 | ||||
Issued in reinvestment of distributions | 8,681,197 | 246,154,128 | 7,487,792 | 242,830,271 | ||||||
Redeemed | (10,997,896 | ) | (343,490,710 | ) | (16,133,813 | ) | (536,282,918 | ) | ||
1,568,697 | 29,570,791 | (3,313,891 | ) | (117,175,686 | ) | |||||
I Class/Shares Authorized | 120,000,000 | 120,000,000 | ||||||||
Sold | 2,942,395 | 100,186,412 | 2,342,307 | 79,141,119 | ||||||
Issued in reinvestment of distributions | 1,509,293 | 42,890,187 | 1,289,658 | 41,897,285 | ||||||
Redeemed | (2,213,752 | ) | (73,900,049 | ) | (6,678,723 | ) | (221,437,781 | ) | ||
2,237,936 | 69,176,550 | (3,046,758 | ) | (100,399,377 | ) | |||||
A Class/Shares Authorized | 45,000,000 | 45,000,000 | ||||||||
Sold | 253,172 | 8,164,173 | 421,446 | 14,067,450 | ||||||
Issued in reinvestment of distributions | 263,265 | 7,447,788 | 270,453 | 8,749,209 | ||||||
Redeemed | (509,064 | ) | (16,835,111 | ) | (1,621,912 | ) | (54,197,067 | ) | ||
7,373 | (1,223,150 | ) | (930,013 | ) | (31,380,408 | ) | ||||
C Class/Shares Authorized | 20,000,000 | 20,000,000 | ||||||||
Sold | 14,841 | 486,074 | 23,907 | 790,510 | ||||||
Issued in reinvestment of distributions | 28,200 | 785,731 | 31,653 | 1,011,259 | ||||||
Redeemed | (107,349 | ) | (3,591,406 | ) | (90,399 | ) | (2,995,989 | ) | ||
(64,308 | ) | (2,319,601 | ) | (34,839 | ) | (1,194,220 | ) | |||
R Class/Shares Authorized | 20,000,000 | 20,000,000 | ||||||||
Sold | 77,516 | 2,567,188 | 242,105 | 8,043,308 | ||||||
Issued in reinvestment of distributions | 80,559 | 2,276,205 | 61,122 | 1,977,467 | ||||||
Redeemed | (78,513 | ) | (2,539,978 | ) | (631,699 | ) | (21,132,880 | ) | ||
79,562 | 2,303,415 | (328,472 | ) | (11,112,105 | ) | |||||
R5 Class/Shares Authorized | 50,000,000 | 50,000,000 | ||||||||
Sold | 25,778 | 887,966 | 44,805 | 1,518,831 | ||||||
Issued in reinvestment of distributions | 6,967 | 197,817 | 2,265 | 73,675 | ||||||
Redeemed | (14,284 | ) | (493,026 | ) | (622 | ) | (20,910 | ) | ||
18,461 | 592,757 | 46,448 | 1,571,596 | |||||||
Net increase (decrease) | 3,847,721 | $ | 98,100,762 | (7,607,525 | ) | $ | (259,690,200 | ) |
17
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.
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 | $ | 2,571,235,147 | — | — | ||||
Temporary Cash Investments | — | $ | 29,509,027 | — | ||||
$ | 2,571,235,147 | $ | 29,509,027 | — |
7. Federal Tax Information
The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
As of period end, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $ | 2,234,143,296 | |
Gross tax appreciation of investments | $ | 556,091,931 | |
Gross tax depreciation of investments | (189,491,053 | ) | |
Net tax appreciation (depreciation) of investments | $ | 366,600,878 |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales.
18
Financial Highlights |
For a Share Outstanding Throughout the Years Ended June 30 (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) | $33.36 | 0.20 | (3.18) | (2.98) | (0.17) | (3.21) | (3.38) | $27.00 | (9.36)% | 0.67%(4) | 1.20%(4) | 41% | $2,112,319 | ||
2018 | $31.79 | 0.43 | 4.40 | 4.83 | (0.40) | (2.86) | (3.26) | $33.36 | 15.62% | 0.66% | 1.30% | 84% | $2,557,773 | ||
2017 | $27.44 | 0.40 | 4.50 | 4.90 | (0.40) | (0.15) | (0.55) | $31.79 | 17.99% | 0.67% | 1.34% | 85% | $2,542,710 | ||
2016 | $30.56 | 0.41 | (1.29) | (0.88) | (0.40) | (1.84) | (2.24) | $27.44 | (2.78)% | 0.67% | 1.45% | 91% | $2,488,951 | ||
2015 | $32.75 | 0.46 | 1.37 | 1.83 | (0.43) | (3.59) | (4.02) | $30.56 | 5.93% | 0.67% | 1.45% | 86% | $2,886,976 | ||
2014 | $27.74 | 0.44 | 6.31 | 6.75 | (0.43) | (1.31) | (1.74) | $32.75 | 24.92% | 0.67% | 1.45% | 80% | $2,568,711 | ||
I Class | |||||||||||||||
2018(3) | $33.39 | 0.24 | (3.18) | (2.94) | (0.21) | (3.21) | (3.42) | $27.03 | (9.25)% | 0.47%(4) | 1.40%(4) | 41% | $378,449 | ||
2018 | $31.82 | 0.50 | 4.40 | 4.90 | (0.47) | (2.86) | (3.33) | $33.39 | 15.87% | 0.46% | 1.50% | 84% | $392,859 | ||
2017 | $27.46 | 0.46 | 4.51 | 4.97 | (0.46) | (0.15) | (0.61) | $31.82 | 18.21% | 0.47% | 1.54% | 85% | $471,260 | ||
2016 | $30.58 | 0.46 | (1.29) | (0.83) | (0.45) | (1.84) | (2.29) | $27.46 | (2.58)% | 0.47% | 1.65% | 91% | $453,858 | ||
2015 | $32.77 | 0.53 | 1.37 | 1.90 | (0.50) | (3.59) | (4.09) | $30.58 | 6.13% | 0.47% | 1.65% | 86% | $497,333 | ||
2014 | $27.75 | 0.50 | 6.32 | 6.82 | (0.49) | (1.31) | (1.80) | $32.77 | 25.19% | 0.47% | 1.65% | 80% | $450,166 | ||
A Class | |||||||||||||||
2018(3) | $33.32 | 0.16 | (3.18) | (3.02) | (0.13) | (3.21) | (3.34) | $26.96 | (9.49)% | 0.92%(4) | 0.95%(4) | 41% | $74,442 | ||
2018 | $31.76 | 0.35 | 4.39 | 4.74 | (0.32) | (2.86) | (3.18) | $33.32 | 15.32% | 0.91% | 1.05% | 84% | $91,750 | ||
2017 | $27.41 | 0.32 | 4.50 | 4.82 | (0.32) | (0.15) | (0.47) | $31.76 | 17.71% | 0.92% | 1.09% | 85% | $116,980 | ||
2016 | $30.53 | 0.33 | (1.29) | (0.96) | (0.32) | (1.84) | (2.16) | $27.41 | (3.03)% | 0.92% | 1.20% | 91% | $144,365 | ||
2015 | $32.72 | 0.38 | 1.37 | 1.75 | (0.35) | (3.59) | (3.94) | $30.53 | 5.67% | 0.92% | 1.20% | 86% | $195,262 | ||
2014 | $27.72 | 0.37 | 6.29 | 6.66 | (0.35) | (1.31) | (1.66) | $32.72 | 24.59% | 0.92% | 1.20% | 80% | $298,677 |
For a Share Outstanding Throughout the Years Ended June 30 (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) | |||
C Class | |||||||||||||||
2018(3) | $33.00 | 0.03 | (3.13) | (3.10) | (0.01) | (3.21) | (3.22) | $26.68 | (9.83)% | 1.67%(4) | 0.20%(4) | 41% | $7,330 | ||
2018 | $31.50 | 0.10 | 4.34 | 4.44 | (0.08) | (2.86) | (2.94) | $33.00 | 14.48% | 1.66% | 0.30% | 84% | $11,191 | ||
2017 | $27.19 | 0.10 | 4.46 | 4.56 | (0.10) | (0.15) | (0.25) | $31.50 | 16.78% | 1.67% | 0.34% | 85% | $11,777 | ||
2016 | $30.29 | 0.12 | (1.27) | (1.15) | (0.11) | (1.84) | (1.95) | $27.19 | (3.73)% | 1.67% | 0.45% | 91% | $12,542 | ||
2015 | $32.50 | 0.15 | 1.35 | 1.50 | (0.12) | (3.59) | (3.71) | $30.29 | 4.87% | 1.67% | 0.45% | 86% | $16,342 | ||
2014 | $27.54 | 0.14 | 6.25 | 6.39 | (0.12) | (1.31) | (1.43) | $32.50 | 23.68% | 1.67% | 0.45% | 80% | $13,447 | ||
R Class | |||||||||||||||
2018(3) | $33.34 | 0.12 | (3.18) | (3.06) | (0.09) | (3.21) | (3.30) | $26.98 | (9.60)% | 1.17%(4) | 0.70%(4) | 41% | $20,417 | ||
2018 | $31.78 | 0.28 | 4.37 | 4.65 | (0.23) | (2.86) | (3.09) | $33.34 | 15.06% | 1.16% | 0.80% | 84% | $22,576 | ||
2017 | $27.43 | 0.25 | 4.50 | 4.75 | (0.25) | (0.15) | (0.40) | $31.78 | 17.37% | 1.17% | 0.84% | 85% | $31,953 | ||
2016 | $30.54 | 0.27 | (1.29) | (1.02) | (0.25) | (1.84) | (2.09) | $27.43 | (3.24)% | 1.17% | 0.95% | 91% | $28,535 | ||
2015 | $32.74 | 0.32 | 1.35 | 1.67 | (0.28) | (3.59) | (3.87) | $30.54 | 5.38% | 1.17% | 0.95% | 86% | $30,271 | ||
2014 | $27.73 | 0.29 | 6.30 | 6.59 | (0.27) | (1.31) | (1.58) | $32.74 | 24.31% | 1.17% | 0.95% | 80% | $12,795 | ||
R5 Class | |||||||||||||||
2018(3) | $33.39 | 0.24 | (3.18) | (2.94) | (0.21) | (3.21) | (3.42) | $27.03 | (9.26)% | 0.47%(4) | 1.40%(4) | 41% | $1,759 | ||
2018 | $31.82 | 0.43 | 4.47 | 4.90 | (0.47) | (2.86) | (3.33) | $33.39 | 15.83% | 0.46% | 1.50% | 84% | $1,556 | ||
2017(5) | $31.12 | 0.11 | 0.69 | 0.80 | (0.10) | — | (0.10) | $31.82 | 2.58% | 0.47%(4) | 1.60%(4) | 85%(6) | $5 |
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 and do not reflect applicable sales charges, if any. Total returns for periods less than one year are not annualized. |
(3) | Six months ended December 31, 2018 (unaudited). |
(4) | Annualized. |
(5) | April 10, 2017 (commencement of sale) through June 30, 2017. |
(6) | Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended June 30, 2017. |
See Notes to Financial Statements.
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
Descriptions of the principles and policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund are available without charge, upon request, by calling 1-800-345-2021 or visiting the "About Us" page of American Century Investments’ website at americancentury.com. A description of the policies is also available 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. 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.
22
Notes |
23
Notes |
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 Quantitative Equity 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. | ||
©2019 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-91455 1902 |
Semiannual Report | |
December 31, 2018 | |
Global Gold Fund | |
Investor Class (BGEIX) | |
I Class (AGGNX) | |
A Class (ACGGX) | |
C Class (AGYCX) | |
R Class (AGGWX) |
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the fund’s shareholder reports like this one will no longer be sent by mail, unless you specifically request paper copies of the reports from the fund or from your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the fund or your financial intermediary electronically by calling or sending an email request to your appropriate contacts as listed on the back cover of this report.
You may elect to receive all future reports in paper free of charge. You can inform the fund or your financial intermediary that you wish to continue receiving paper copies of your shareholder reports by calling or sending an email request to your appropriate contacts as listed on the back cover of this report. Your election to receive reports in paper will apply to all funds held with the fund complex/your financial intermediary.
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 period ended December 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, please visit our website, americancentury.com.
Risk-On/Risk-Off Rotation Highlights Heightened Volatility
The six-month reporting period began on an upbeat note for stock investors. Against a backdrop of robust economic and earnings data and federal tax and regulatory reform, U.S. stocks soared. The S&P 500 Index gained nearly 8% in the first three months of the period. Outside the U.S., stocks also advanced, but the gains were more subdued amid signs of slowing growth. Meanwhile, favorable U.S. economic data and continued Federal Reserve (Fed) tightening helped push U.S. Treasury yields higher. This pressured interest rate-sensitive assets, including longer-maturity Treasuries, gold, utilities stocks, and REITs (real estate investment trusts), and they generally underperformed U.S. stocks.
In the second half of the reporting period, investor sentiment and asset-class performance took a drastic turn. Investors exited stocks on mounting concerns about slowing global economic and earnings growth and Fed policy. Along with its December interest rate increase, the Fed delivered a surprisingly bullish outlook. Investors feared the Fed’s plans for two rate hikes in 2019 were too aggressive, further fueling the steep sell-off among riskier assets. The S&P 500 Index declined more than 13% in the fourth quarter. For the entire six-month period, U.S. stocks fell 6.85%. Losses among non-U.S. stocks were even steeper.
The risk-off climate in the second half of the period sparked a flight to quality. Treasury yields plunged in the fourth quarter, triggering a year-end rally in Treasuries and other perceived safe-haven assets. Overall, Treasuries were up for the six-month period and significantly outperformed stocks and other riskier assets.
As recent performance trends indicate, market volatility remains a formidable force. But volatile markets often produce the most compelling investment opportunities. We believe this scenario underscores the importance of 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 |
DECEMBER 31, 2018 | |
Top Ten Holdings | % of net assets |
Barrick Gold Corp. | 11.5% |
Newmont Mining Corp. | 11.1% |
Franco-Nevada Corp.* | 8.1% |
Randgold Resources Ltd. ADR | 5.1% |
Newcrest Mining Ltd. | 4.8% |
Kirkland Lake Gold Ltd. | 4.6% |
Wheaton Precious Metals Corp. | 4.3% |
Royal Gold, Inc. | 3.8% |
Agnico Eagle Mines Ltd.* | 3.7% |
Cia de Minas Buenaventura SAA ADR | 2.9% |
*Includes shares traded on all exchanges. | |
Geographic Composition | % of net assets |
Canada | 51.4% |
Australia | 15.8% |
United States | 14.9% |
United Kingdom | 6.2% |
South Africa | 5.6% |
Peru | 2.9% |
China | 1.2% |
Russia | 0.3% |
Exchange-Traded Funds | 1.3% |
Cash and Equivalents* | 0.4% |
*Includes temporary cash investments and other assets and liabilities. | |
Types of Investments in Portfolio | % of net assets |
Foreign Common Stocks | 83.4% |
Domestic Common Stocks | 14.9% |
Exchange-Traded Funds | 1.3% |
Total Equity Exposure | 99.6% |
Temporary Cash Investments | 0.1% |
Other Assets and Liabilities | 0.3% |
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 July 1, 2018 to December 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 7/1/18 | Ending Account Value 12/31/18 | Expenses Paid During Period(1) 7/1/18 - 12/31/18 | Annualized Expense Ratio(1) | |
Actual | ||||
Investor Class | $1,000 | $944.10 | $3.28 | 0.67% |
I Class | $1,000 | $944.60 | $2.30 | 0.47% |
A Class | $1,000 | $942.90 | $4.51 | 0.92% |
C Class | $1,000 | $939.00 | $8.16 | 1.67% |
R Class | $1,000 | $942.30 | $5.73 | 1.17% |
Hypothetical | ||||
Investor Class | $1,000 | $1,021.83 | $3.41 | 0.67% |
I Class | $1,000 | $1,022.84 | $2.40 | 0.47% |
A Class | $1,000 | $1,020.57 | $4.69 | 0.92% |
C Class | $1,000 | $1,016.79 | $8.49 | 1.67% |
R Class | $1,000 | $1,019.31 | $5.96 | 1.17% |
(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 |
DECEMBER 31, 2018 (UNAUDITED)
Shares | Value | ||||
COMMON STOCKS — 98.3% | |||||
Australia — 15.8% | |||||
Evolution Mining Ltd. | 2,853,200 | $ | 7,450,154 | ||
Gold Road Resources Ltd.(1) | 5,909,090 | 2,705,160 | |||
Newcrest Mining Ltd. | 1,186,813 | 18,284,338 | |||
Northern Star Resources Ltd. | 1,421,100 | 9,303,323 | |||
OZ Minerals Ltd. | 45,000 | 278,899 | |||
Regis Resources Ltd. | 2,229,000 | 7,611,500 | |||
Saracen Mineral Holdings Ltd.(1) | 3,024,000 | 6,280,810 | |||
St. Barbara Ltd. | 2,391,300 | 7,921,878 | |||
59,836,062 | |||||
Canada — 51.4% | |||||
Agnico Eagle Mines Ltd. | 107,566 | 4,341,405 | |||
Agnico Eagle Mines Ltd. (New York) | 240,700 | 9,724,280 | |||
Alamos Gold, Inc., Class A (New York) | 588,600 | 2,118,960 | |||
B2Gold Corp. (New York)(1) | 1,986,200 | 5,799,704 | |||
Barrick Gold Corp. | 3,196,512 | 43,280,772 | |||
Centerra Gold, Inc.(1) | 1,094,300 | 4,697,186 | |||
Continental Gold, Inc.(1) | 270,400 | 445,649 | |||
Detour Gold Corp.(1) | 418,101 | 3,531,134 | |||
Fortuna Silver Mines, Inc.(1) | 1,038,100 | 3,778,684 | |||
Franco-Nevada Corp. | 151,893 | 10,650,979 | |||
Franco-Nevada Corp. (New York) | 282,500 | 19,823,025 | |||
GoGold Resources, Inc.(1) | 5,526,925 | 1,012,109 | |||
Goldcorp, Inc. | 491,376 | 4,812,260 | |||
Goldcorp, Inc. (New York) | 618,800 | 6,064,240 | |||
Guyana Goldfields, Inc.(1) | 892,621 | 1,046,142 | |||
IAMGOLD Corp. (New York)(1) | 49,200 | 181,056 | |||
Kinross Gold Corp. (New York)(1) | 2,059,057 | 6,671,345 | |||
Kirkland Lake Gold Ltd. | 663,300 | 17,296,718 | |||
Lucara Diamond Corp. | 357,700 | 387,779 | |||
OceanaGold Corp. | 1,738,553 | 6,341,923 | |||
Orezone Gold Corp.(1) | 5,400,000 | 2,254,615 | |||
Pan American Silver Corp. (NASDAQ) | 503,500 | 7,351,100 | |||
Premier Gold Mines Ltd.(1) | 339,100 | 399,906 | |||
Pretium Resources, Inc.(1) | 488,800 | 4,130,360 | |||
Roxgold, Inc.(1) | 2,860,300 | 1,697,072 | |||
Sandstorm Gold Ltd.(1) | 345,000 | 1,597,129 | |||
Sandstorm Gold Ltd. (New York)(1) | 384,400 | 1,772,084 | |||
Seabridge Gold, Inc.(1) | 39,800 | 526,554 | |||
SEMAFO, Inc.(1) | 516,100 | 1,115,218 | |||
Silvercorp Metals, Inc. | 584,900 | 1,221,041 | |||
SSR Mining, Inc.(1) | 199,700 | 2,414,373 | |||
Torex Gold Resources, Inc.(1) | 40,000 | 380,604 | |||
Wheaton Precious Metals Corp. | 835,800 | 16,323,174 | |||
Yamana Gold, Inc. (New York) | 506,981 | 1,196,475 | |||
194,385,055 |
6
Shares | Value | ||||
China — 1.2% | |||||
Zijin Mining Group Co. Ltd., H Shares | 11,896,000 | $ | 4,496,203 | ||
Peru — 2.9% | |||||
Cia de Minas Buenaventura SAA ADR | 676,200 | 10,967,964 | |||
Russia — 0.3% | |||||
Alrosa PJSC | 747,600 | 1,058,175 | |||
South Africa — 5.6% | |||||
Anglo American Platinum Ltd. | 93,500 | 3,490,191 | |||
AngloGold Ashanti Ltd. | 225,302 | 2,841,538 | |||
AngloGold Ashanti Ltd. ADR | 583,776 | 7,326,389 | |||
Gold Fields Ltd. | 1,056,010 | 3,655,878 | |||
Harmony Gold Mining Co. Ltd. ADR(1) | 289,700 | 518,563 | |||
Impala Platinum Holdings Ltd.(1) | 489,100 | 1,247,062 | |||
Sibanye Gold Ltd. ADR(1) | 664,300 | 1,879,969 | |||
20,959,590 | |||||
United Kingdom — 6.2% | |||||
Centamin plc | 2,181,900 | 3,041,536 | |||
Fresnillo plc | 77,400 | 845,945 | |||
Hochschild Mining plc | 194,300 | 385,191 | |||
Randgold Resources Ltd. ADR | 223,500 | 19,127,130 | |||
23,399,802 | |||||
United States — 14.9% | |||||
Newmont Mining Corp. | 1,212,014 | 41,996,285 | |||
Royal Gold, Inc. | 169,121 | 14,485,214 | |||
56,481,499 | |||||
TOTAL COMMON STOCKS (Cost $285,812,760) | 371,584,350 | ||||
EXCHANGE-TRADED FUNDS — 1.3% | |||||
VanEck Vectors Gold Miners ETF | 151,700 | 3,199,353 | |||
VanEck Vectors Junior Gold Miners ETF | 51,400 | 1,553,308 | |||
TOTAL EXCHANGE-TRADED FUNDS (Cost $4,622,228) | 4,752,661 | ||||
TEMPORARY CASH INVESTMENTS — 0.1% | |||||
Repurchase Agreement, BMO Capital Markets Corp., (collateralized by various U.S. Treasury obligations, 0.125% - 2.75%, 10/31/19 - 2/15/44, valued at $480,919), in a joint trading account at 2.45%, dated 12/31/18, due 1/2/19 (Delivery value $471,615) | 471,551 | ||||
State Street Institutional U.S. Government Money Market Fund, Premier Class | 79,635 | 79,635 | |||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $551,186) | 551,186 | ||||
TOTAL INVESTMENT SECURITIES — 99.7% (Cost $290,986,174) | 376,888,197 | ||||
OTHER ASSETS AND LIABILITIES — 0.3% | 1,095,857 | ||||
TOTAL NET ASSETS — 100.0% | $ | 377,984,054 |
NOTES TO SCHEDULE OF INVESTMENTS | ||
ADR | - | American Depositary Receipt |
(1) | Non-income producing. |
See Notes to Financial Statements.
7
Statement of Assets and Liabilities |
DECEMBER 31, 2018 (UNAUDITED) | |||
Assets | |||
Investment securities, at value (cost of $290,986,174) | $ | 376,888,197 | |
Receivable for investments sold | 2,057,507 | ||
Receivable for capital shares sold | 488,179 | ||
Dividends and interest receivable | 208,902 | ||
379,642,785 | |||
Liabilities | |||
Payable for investments purchased | 961,764 | ||
Payable for capital shares redeemed | 490,456 | ||
Accrued management fees | 201,092 | ||
Distribution and service fees payable | 5,419 | ||
1,658,731 | |||
Net Assets | $ | 377,984,054 | |
Net Assets Consist of: | |||
Capital (par value and paid-in surplus) | $ | 450,560,612 | |
Distributable earnings | (72,576,558 | ) | |
$ | 377,984,054 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | ||||
Investor Class, $0.01 Par Value | $342,012,270 | 42,237,191 | $8.10 | |||
I Class, $0.01 Par Value | $21,417,217 | 2,615,794 | $8.19 | |||
A Class, $0.01 Par Value | $7,120,789 | 898,664 | $7.92* | |||
C Class, $0.01 Par Value | $2,486,461 | 329,842 | $7.54 | |||
R Class, $0.01 Par Value | $4,947,317 | 631,390 | $7.84 |
*Maximum offering price $8.40 (net asset value divided by 0.9425).
See Notes to Financial Statements.
8
Statement of Operations |
FOR THE SIX MONTHS ENDED DECEMBER 31, 2018 (UNAUDITED) | |||
Investment Income (Loss) | |||
Income: | |||
Dividends (net of foreign taxes withheld of $172,935) | $ | 2,066,868 | |
Interest | 34,788 | ||
2,101,656 | |||
Expenses: | |||
Management fees | 1,127,775 | ||
Distribution and service fees: | |||
A Class | 8,159 | ||
C Class | 11,472 | ||
R Class | 12,295 | ||
Directors' fees and expenses | 11,863 | ||
Other expenses | 35 | ||
1,171,599 | |||
Net investment income (loss) | 930,057 | ||
Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investment transactions | (10,185,197 | ) | |
Foreign currency translation transactions | 79,329 | ||
(10,105,868 | ) | ||
Change in net unrealized appreciation (depreciation) on: | |||
Investments | (9,071,133 | ) | |
Translation of assets and liabilities in foreign currencies | (80,654 | ) | |
(9,151,787 | ) | ||
Net realized and unrealized gain (loss) | (19,257,655 | ) | |
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | (18,327,598 | ) |
See Notes to Financial Statements.
9
Statement of Changes in Net Assets |
SIX MONTHS ENDED DECEMBER 31, 2018 (UNAUDITED) AND YEAR ENDED JUNE 30, 2018 | ||||||
Increase (Decrease) in Net Assets | December 31, 2018 | June 30, 2018 | ||||
Operations | ||||||
Net investment income (loss) | $ | 930,057 | $ | 1,768,735 | ||
Net realized gain (loss) | (10,105,868 | ) | (3,372,961 | ) | ||
Change in net unrealized appreciation (depreciation) | (9,151,787 | ) | 16,478,278 | |||
Net increase (decrease) in net assets resulting from operations | (18,327,598 | ) | 14,874,052 | |||
Capital Share Transactions | ||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | 20,072,981 | (19,266,702 | ) | |||
Redemption Fees | ||||||
Increase in net assets from redemption fees | — | 10,437 | ||||
Net increase (decrease) in net assets | 1,745,383 | (4,382,213 | ) | |||
Net Assets | ||||||
Beginning of period | 376,238,671 | 380,620,884 | ||||
End of period | $ | 377,984,054 | $ | 376,238,671 |
See Notes to Financial Statements.
10
Notes to Financial Statements |
DECEMBER 31, 2018 (UNAUDITED)
1. Organization
American Century Quantitative Equity 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. Global Gold Fund (the fund) is one fund in a series issued by the corporation. The fund’s investment objective is to seek to realize a total return (capital growth and dividends) consistent with investment in securities of companies that are engaged in mining, processing, fabricating or distributing gold or other precious metals throughout the world.
The fund offers the Investor Class, I Class, A Class, C Class and R Class. The A Class may incur an initial sales charge. The A Class and C Class may be subject to a contingent deferred sales charge.
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.
11
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.
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, if any, are generally declared and paid semiannually. Distributions from net realized gains, if any, are generally declared and paid annually.
12
Redemption Fees — Prior to October 9, 2017, the fund may have imposed a 1.00% redemption fee on shares held less than 60 days. The fee was not applicable to all classes. The redemption fee was retained by the fund to help cover transaction costs that long-term investors may bear when the fund sells securities to meet investor redemptions.
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.
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 fee consists of (1) an Investment Category Fee based on the daily net assets of the fund and certain other accounts managed by the investment advisor that are in the same broad investment category as the fund and (2) a Complex Fee based on the assets of all the funds in the American Century Investments family of funds.
The Investment Category Fee range, the Complex Fee range and the effective annual management fee for each class for the period ended December 31, 2018 are as follows:
Investment Category Fee Range | Complex Fee Range | Effective Annual Management Fee | |
Investor Class | 0.3380% to 0.5200% | 0.2500% to 0.3100% | 0.66% |
I Class | 0.0500% to 0.1100% | 0.46% | |
A Class | 0.2500% to 0.3100% | 0.66% | |
C Class | 0.2500% to 0.3100% | 0.66% | |
R Class | 0.2500% to 0.3100% | 0.66% |
Distribution and Service Fees — The Board of Directors has adopted a separate Master Distribution and Individual Shareholder Services Plan for each of the A Class, C Class and R Class (collectively the plans), pursuant to Rule 12b-1 of the 1940 Act. The plans provide that the A Class will pay ACIS an annual distribution and service fee of 0.25%. The plans provide that the C Class will pay ACIS an annual distribution and service fee of 1.00%, of which 0.25% is paid for individual shareholder services and 0.75% is paid for distribution services. The plans provide that the R Class will pay ACIS an annual distribution and service fee of 0.50%. The fees are computed and accrued daily based on each class’s daily net assets and paid monthly in arrears. The fees are used to pay financial intermediaries for distribution and individual shareholder services. Fees incurred under the plans during the period ended December 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. There were no interfund transactions during the period.
13
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the period ended December 31, 2018 were $94,238,067 and $67,176,957, respectively.
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended December 31, 2018 | Year ended June 30, 2018 | |||||||||
Shares | Amount | Shares | Amount | |||||||
Investor Class/Shares Authorized | 360,000,000 | 360,000,000 | ||||||||
Sold | 5,640,866 | $ | 42,772,391 | 4,889,599 | $ | 42,188,999 | ||||
Redeemed | (3,893,768 | ) | (29,709,206 | ) | (6,948,239 | ) | (59,883,390 | ) | ||
1,747,098 | 13,063,185 | (2,058,640 | ) | (17,694,391 | ) | |||||
I Class/Shares Authorized | 30,000,000 | 30,000,000 | ||||||||
Sold | 2,407,438 | 17,504,223 | 783,804 | 6,828,597 | ||||||
Redeemed | (1,345,356 | ) | (10,500,708 | ) | (998,465 | ) | (8,657,027 | ) | ||
1,062,082 | 7,003,515 | (214,661 | ) | (1,828,430 | ) | |||||
A Class/Shares Authorized | 20,000,000 | 20,000,000 | ||||||||
Sold | 235,399 | 1,772,563 | 468,886 | 3,956,561 | ||||||
Redeemed | (226,214 | ) | (1,681,925 | ) | (553,185 | ) | (4,670,101 | ) | ||
9,185 | 90,638 | (84,299 | ) | (713,540 | ) | |||||
C Class/Shares Authorized | 15,000,000 | 15,000,000 | ||||||||
Sold | 55,621 | 386,215 | 76,000 | 609,071 | ||||||
Redeemed | (32,684 | ) | (228,539 | ) | (61,872 | ) | (498,848 | ) | ||
22,937 | 157,676 | 14,128 | 110,223 | |||||||
R Class/Shares Authorized | 20,000,000 | 20,000,000 | ||||||||
Sold | 107,836 | 789,321 | 229,235 | 1,920,049 | ||||||
Redeemed | (140,334 | ) | (1,031,354 | ) | (126,663 | ) | (1,060,613 | ) | ||
(32,498 | ) | (242,033 | ) | 102,572 | 859,436 | |||||
Net increase (decrease) | 2,808,804 | $ | 20,072,981 | (2,240,900 | ) | $ | (19,266,702 | ) |
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.
14
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 | ||||||||
Australia | — | $ | 59,836,062 | — | ||||
Canada | $ | 131,156,186 | 63,228,869 | — | ||||
China | — | 4,496,203 | — | |||||
Russia | — | 1,058,175 | — | |||||
South Africa | 9,724,921 | 11,234,669 | — | |||||
United Kingdom | 19,127,130 | 4,272,672 | — | |||||
Other Countries | 67,449,463 | — | — | |||||
Exchange-Traded Funds | 4,752,661 | — | — | |||||
Temporary Cash Investments | 79,635 | 471,551 | — | |||||
$ | 232,289,996 | $ | 144,598,201 | — |
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. Investing in emerging markets may accentuate these risks.
The fund concentrates its investments in a narrow segment of the total market. Because of this, the fund may be subject to greater risk and market fluctuations than a portfolio representing a broader range of industries. Gold stocks are generally considered speculative because of high share price volatility. The price of gold will likely impact the value of the companies in which the fund invests. The price of gold will fluctuate, sometimes considerably. Though many investors believe that gold investments hedge against inflation, currency devaluations and stock market declines, there is no guarantee that these historical inverse relationships will continue.
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 | $ | 305,603,157 | |
Gross tax appreciation of investments | $ | 92,377,743 | |
Gross tax depreciation of investments | (21,092,703 | ) | |
Net tax appreciation (depreciation) of investments | $ | 71,285,040 |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the realization to ordinary income for tax purposes of unrealized gains on investments in passive foreign investment companies.
As of June 30, 2018, the fund had accumulated short-term capital losses of $(32,394,062) and accumulated long-term capital losses of $(102,583,302), which represent net capital loss carryovers that may be used to offset future realized capital gains for federal income tax purposes. The capital loss carryovers may be carried forward for an unlimited period. Future capital loss carryover utilization in any given year may be subject to Internal Revenue Code limitations.
As of June 30, 2018, the fund had late-year ordinary loss deferrals of $(21,819), 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 June 30 (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 | Net Investment Income (Loss) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
Investor Class | |||||||||||||
2018(3) | $8.58 | 0.02 | (0.50) | (0.48) | — | $8.10 | (5.59)% | 0.67%(4) | 0.54%(4) | 20% | $342,012 | ||
2018 | $8.25 | 0.04 | 0.29 | 0.33 | — | $8.58 | 4.00% | 0.66% | 0.47% | 37% | $347,311 | ||
2017 | $11.66 | —(5) | (2.57) | (2.57) | (0.84) | $8.25 | (21.33)% | 0.67% | 0.05% | 27% | $351,207 | ||
2016 | $7.21 | —(5) | 4.45 | 4.45 | — | $11.66 | 61.72% | 0.68% | 0.06% | 11% | $474,952 | ||
2015 | $11.08 | 0.02 | (3.64) | (3.62) | (0.25) | $7.21 | (32.61)% | 0.67% | 0.21% | 17% | $288,172 | ||
2014 | $9.72 | 0.04 | 1.32 | 1.36 | — | $11.08 | 13.99% | 0.67% | 0.40% | 29% | $455,211 | ||
I Class | |||||||||||||
2018(3) | $8.67 | 0.03 | (0.51) | (0.48) | — | $8.19 | (5.54)% | 0.47%(4) | 0.74%(4) | 20% | $21,417 | ||
2018 | $8.32 | 0.06 | 0.29 | 0.35 | — | $8.67 | 4.21% | 0.46% | 0.67% | 37% | $13,464 | ||
2017 | $11.75 | 0.02 | (2.60) | (2.58) | (0.85) | $8.32 | (21.17)% | 0.47% | 0.25% | 27% | $14,717 | ||
2016 | $7.25 | 0.02 | 4.48 | 4.50 | — | $11.75 | 62.07% | 0.48% | 0.26% | 11% | $15,579 | ||
2015 | $11.14 | 0.04 | (3.67) | (3.63) | (0.26) | $7.25 | (32.48)% | 0.47% | 0.41% | 17% | $9,639 | ||
2014 | $9.75 | 0.06 | 1.33 | 1.39 | — | $11.14 | 14.26% | 0.47% | 0.60% | 29% | $14,375 | ||
A Class | |||||||||||||
2018(3) | $8.40 | 0.01 | (0.49) | (0.48) | — | $7.92 | (5.71)% | 0.92%(4) | 0.29%(4) | 20% | $7,121 | ||
2018 | $8.11 | 0.02 | 0.27 | 0.29 | — | $8.40 | 3.58% | 0.91% | 0.22% | 37% | $7,475 | ||
2017 | $11.47 | (0.02) | (2.52) | (2.54) | (0.82) | $8.11 | (21.45)% | 0.92% | (0.20)% | 27% | $7,895 | ||
2016 | $7.11 | (0.01) | 4.37 | 4.36 | — | $11.47 | 61.32% | 0.93% | (0.19)% | 11% | $15,196 | ||
2015 | $10.94 | (0.01) | (3.59) | (3.60) | (0.23) | $7.11 | (32.84)% | 0.92% | (0.04)% | 17% | $7,732 | ||
2014 | $9.61 | 0.01 | 1.32 | 1.33 | — | $10.94 | 13.84% | 0.92% | 0.15% | 29% | $18,387 |
For a Share Outstanding Throughout the Years Ended June 30 (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 | Net Investment Income (Loss) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
C Class | |||||||||||||
2018(3) | $8.03 | (0.02) | (0.47) | (0.49) | — | $7.54 | (6.10)% | 1.67%(4) | (0.46)%(4) | 20% | $2,486 | ||
2018 | $7.80 | (0.04) | 0.27 | 0.23 | — | $8.03 | 2.95% | 1.66% | (0.53)% | 37% | $2,463 | ||
2017 | $11.07 | (0.09) | (2.43) | (2.52) | (0.75) | $7.80 | (22.04)% | 1.67% | (0.95)% | 27% | $2,284 | ||
2016 | $6.91 | (0.06) | 4.22 | 4.16 | — | $11.07 | 60.20% | 1.68% | (0.94)% | 11% | $2,589 | ||
2015 | $10.64 | (0.07) | (3.48) | (3.55) | (0.18) | $6.91 | (33.36)% | 1.67% | (0.79)% | 17% | $2,024 | ||
2014 | $9.42 | (0.06) | 1.28 | 1.22 | — | $10.64 | 12.95% | 1.67% | (0.60)% | 29% | $3,465 | ||
R Class | |||||||||||||
2018(3) | $8.32 | —(5) | (0.48) | (0.48) | — | $7.84 | (5.77)% | 1.17%(4) | 0.04%(4) | 20% | $4,947 | ||
2018 | $8.05 | —(5) | 0.27 | 0.27 | — | $8.32 | 3.35% | 1.16% | (0.03)% | 37% | $5,524 | ||
2017 | $11.39 | (0.04) | (2.50) | (2.54) | (0.80) | $8.05 | (21.63)% | 1.17% | (0.45)% | 27% | $4,517 | ||
2016 | $7.08 | (0.03) | 4.34 | 4.31 | — | $11.39 | 60.88% | 1.18% | (0.44)% | 11% | $5,176 | ||
2015 | $10.89 | (0.02) | (3.58) | (3.60) | (0.21) | $7.08 | (32.98)% | 1.17% | (0.29)% | 17% | $2,534 | ||
2014 | $9.59 | (0.01) | 1.31 | 1.30 | — | $10.89 | 13.56% | 1.17% | (0.10)% | 29% | $3,494 |
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 and do not reflect applicable sales charges, if any. Total returns for periods less than one year are not annualized. |
(3) | Six months ended December 31, 2018 (unaudited). |
(4) | Annualized. |
(5) | Per-share amount was less than $0.005. |
See Notes to Financial Statements.
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
Descriptions of the principles and policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund are available without charge, upon request, by calling 1-800-345-2021 or visiting the "About Us" page of American Century Investments’ website at americancentury.com. A description of the policies is also available 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. 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.
18
Notes |
19
Notes |
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 Quantitative Equity 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. | ||
©2019 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-91453 1902 |
Semiannual Report | |
December 31, 2018 | |
Income & Growth Fund | |
Investor Class (BIGRX) | |
I Class (AMGIX) | |
A Class (AMADX) | |
C Class (ACGCX) | |
R Class (AICRX) | |
R5 Class (AICGX) |
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the fund’s shareholder reports like this one will no longer be sent by mail, unless you specifically request paper copies of the reports from the fund or from your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the fund or your financial intermediary electronically by calling or sending an email request to your appropriate contacts as listed on the back cover of this report.
You may elect to receive all future reports in paper free of charge. You can inform the fund or your financial intermediary that you wish to continue receiving paper copies of your shareholder reports by calling or sending an email request to your appropriate contacts as listed on the back cover of this report. Your election to receive reports in paper will apply to all funds held with the fund complex/your financial intermediary.
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 period ended December 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, please visit our website, americancentury.com.
Risk-On/Risk-Off Rotation Highlights Heightened Volatility
The six-month reporting period began on an upbeat note for stock investors. Against a backdrop of robust economic and earnings data and federal tax and regulatory reform, U.S. stocks soared. The S&P 500 Index gained nearly 8% in the first three months of the period. Outside the U.S., stocks also advanced, but the gains were more subdued amid signs of slowing growth. Meanwhile, favorable U.S. economic data and continued Federal Reserve (Fed) tightening helped push U.S. Treasury yields higher. This pressured interest rate-sensitive assets, including longer-maturity Treasuries, gold, utilities stocks, and REITs (real estate investment trusts), and they generally underperformed U.S. stocks.
In the second half of the reporting period, investor sentiment and asset-class performance took a drastic turn. Investors exited stocks on mounting concerns about slowing global economic and earnings growth and Fed policy. Along with its December interest rate increase, the Fed delivered a surprisingly bullish outlook. Investors feared the Fed’s plans for two rate hikes in 2019 were too aggressive, further fueling the steep sell-off among riskier assets. The S&P 500 Index declined more than 13% in the fourth quarter. For the entire six-month period, U.S. stocks fell 6.85%. Losses among non-U.S. stocks were even steeper.
The risk-off climate in the second half of the period sparked a flight to quality. Treasury yields plunged in the fourth quarter, triggering a year-end rally in Treasuries and other perceived safe-haven assets. Overall, Treasuries were up for the six-month period and significantly outperformed stocks and other riskier assets.
As recent performance trends indicate, market volatility remains a formidable force. But volatile markets often produce the most compelling investment opportunities. We believe this scenario underscores the importance of 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 |
DECEMBER 31, 2018 | |
Top Ten Holdings | % of net assets |
Microsoft Corp. | 4.4% |
Apple, Inc. | 3.6% |
Alphabet, Inc., Class A | 3.3% |
JPMorgan Chase & Co. | 2.4% |
Amazon.com, Inc. | 2.2% |
Pfizer, Inc. | 2.1% |
Intel Corp. | 2.0% |
Verizon Communications, Inc. | 1.9% |
Cisco Systems, Inc. | 1.9% |
Chevron Corp. | 1.8% |
Top Five Industries | % of net assets |
Pharmaceuticals | 7.0% |
Software | 6.8% |
Oil, Gas and Consumable Fuels | 6.7% |
Banks | 6.6% |
Technology Hardware, Storage and Peripherals | 5.5% |
Types of Investments in Portfolio | % of net assets |
Common Stocks | 99.1% |
Temporary Cash Investments | 0.8% |
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 July 1, 2018 to December 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 7/1/18 | Ending Account Value 12/31/18 | Expenses Paid During Period(1) 7/1/18 - 12/31/18 | Annualized Expense Ratio(1) | |
Actual | ||||
Investor Class | $1,000 | $916.80 | $3.24 | 0.67% |
I Class | $1,000 | $917.60 | $2.27 | 0.47% |
A Class | $1,000 | $915.50 | $4.44 | 0.92% |
C Class | $1,000 | $912.10 | $8.05 | 1.67% |
R Class | $1,000 | $914.70 | $5.65 | 1.17% |
R5 Class | $1,000 | $917.90 | $2.27 | 0.47% |
Hypothetical | ||||
Investor Class | $1,000 | $1,021.83 | $3.41 | 0.67% |
I Class | $1,000 | $1,022.84 | $2.40 | 0.47% |
A Class | $1,000 | $1,020.57 | $4.69 | 0.92% |
C Class | $1,000 | $1,016.79 | $8.49 | 1.67% |
R Class | $1,000 | $1,019.31 | $5.96 | 1.17% |
R5 Class | $1,000 | $1,022.84 | $2.40 | 0.47% |
(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 |
DECEMBER 31, 2018 (UNAUDITED)
Shares | Value | ||||
COMMON STOCKS — 99.1% | |||||
Aerospace and Defense — 3.3% | |||||
Boeing Co. (The) | 101,297 | $ | 32,668,283 | ||
Lockheed Martin Corp. | 56,422 | 14,773,536 | |||
Raytheon Co. | 116,661 | 17,889,964 | |||
65,331,783 | |||||
Automobiles — 0.3% | |||||
Harley-Davidson, Inc. | 166,648 | 5,686,030 | |||
Banks — 6.6% | |||||
Bank of America Corp. | 1,253,262 | 30,880,376 | |||
BB&T Corp. | 331,295 | 14,351,699 | |||
Comerica, Inc. | 94,792 | 6,511,262 | |||
JPMorgan Chase & Co. | 477,395 | 46,603,300 | |||
SunTrust Banks, Inc. | 251,705 | 12,696,000 | |||
Wells Fargo & Co. | 420,959 | 19,397,791 | |||
130,440,428 | |||||
Beverages — 0.9% | |||||
Coca-Cola Co. (The) | 306,149 | 14,496,155 | |||
Constellation Brands, Inc., Class A | 16,164 | 2,599,495 | |||
17,095,650 | |||||
Biotechnology — 4.8% | |||||
AbbVie, Inc. | 342,502 | 31,575,259 | |||
Amgen, Inc. | 165,317 | 32,182,261 | |||
Biogen, Inc.(1) | 70,713 | 21,278,956 | |||
Gilead Sciences, Inc. | 155,793 | 9,744,852 | |||
94,781,328 | |||||
Capital Markets — 0.2% | |||||
TD Ameritrade Holding Corp. | 84,457 | 4,135,015 | |||
Chemicals — 0.8% | |||||
LyondellBasell Industries NV, Class A | 193,116 | 16,059,527 | |||
Commercial Services and Supplies — 1.9% | |||||
Republic Services, Inc. | 254,545 | 18,350,149 | |||
Waste Management, Inc. | 224,722 | 19,998,011 | |||
38,348,160 | |||||
Communications Equipment — 1.9% | |||||
Cisco Systems, Inc. | 847,906 | 36,739,767 | |||
Consumer Finance — 1.2% | |||||
Discover Financial Services | 281,359 | 16,594,554 | |||
Synchrony Financial | 265,771 | 6,234,987 | |||
22,829,541 | |||||
Containers and Packaging — 1.6% | |||||
Packaging Corp. of America | 175,649 | 14,659,665 | |||
WestRock Co. | 426,814 | 16,116,497 | |||
30,776,162 | |||||
Diversified Consumer Services — 0.9% | |||||
H&R Block, Inc. | 718,113 | 18,218,527 |
6
Shares | Value | ||||
Diversified Financial Services — 0.9% | |||||
Berkshire Hathaway, Inc., Class B(1) | 85,040 | $ | 17,363,467 | ||
Diversified Telecommunication Services — 2.6% | |||||
AT&T, Inc. | 484,476 | 13,826,945 | |||
Verizon Communications, Inc. | 667,518 | 37,527,862 | |||
51,354,807 | |||||
Electric Utilities — 0.9% | |||||
Evergy, Inc. | 7,081 | 401,988 | |||
OGE Energy Corp. | 463,495 | 18,164,369 | |||
18,566,357 | |||||
Electrical Equipment — 0.5% | |||||
Rockwell Automation, Inc. | 64,494 | 9,705,057 | |||
Electronic Equipment, Instruments and Components — 0.9% | |||||
National Instruments Corp. | 391,263 | 17,755,515 | |||
Energy Equipment and Services — 1.4% | |||||
Halliburton Co. | 582,506 | 15,483,009 | |||
Schlumberger Ltd. | 352,159 | 12,705,897 | |||
28,188,906 | |||||
Equity Real Estate Investment Trusts (REITs) — 5.2% | |||||
Apple Hospitality REIT, Inc. | 227,368 | 3,242,268 | |||
Brixmor Property Group, Inc. | 1,035,389 | 15,209,864 | |||
EPR Properties | 46,515 | 2,978,355 | |||
Healthcare Trust of America, Inc., Class A | 560,955 | 14,197,771 | |||
Hospitality Properties Trust | 55,546 | 1,326,438 | |||
Industrial Logistics Properties Trust | 310,010 | 6,097,904 | |||
Kimco Realty Corp. | 464,338 | 6,802,552 | |||
Omega Healthcare Investors, Inc. | 414,884 | 14,583,173 | |||
Select Income REIT | 616,925 | 4,540,568 | |||
Senior Housing Properties Trust | 1,006,921 | 11,801,114 | |||
Spirit Realty Capital, Inc. | 123,981 | 4,370,330 | |||
Tanger Factory Outlet Centers, Inc. | 456,957 | 9,239,671 | |||
Weingarten Realty Investors | 339,918 | 8,433,366 | |||
102,823,374 | |||||
Food Products — 0.9% | |||||
General Mills, Inc. | 449,486 | 17,502,985 | |||
Health Care Equipment and Supplies — 1.6% | |||||
ICU Medical, Inc.(1) | 20,663 | 4,744,845 | |||
Medtronic plc | 306,826 | 27,908,893 | |||
32,653,738 | |||||
Health Care Providers and Services — 0.8% | |||||
UnitedHealth Group, Inc. | 64,397 | 16,042,581 | |||
Hotels, Restaurants and Leisure — 1.6% | |||||
Darden Restaurants, Inc. | 163,959 | 16,372,946 | |||
Las Vegas Sands Corp. | 292,677 | 15,233,838 | |||
31,606,784 | |||||
Household Products — 0.1% | |||||
Procter & Gamble Co. (The) | 17,586 | 1,616,505 | |||
Industrial Conglomerates — 1.2% | |||||
Honeywell International, Inc. | 176,978 | 23,382,333 | |||
Insurance — 3.9% | |||||
Hartford Financial Services Group, Inc. (The) | 407,116 | 18,096,306 |
7
Shares | Value | ||||
MetLife, Inc. | 277,838 | $ | 11,408,028 | ||
Old Republic International Corp. | 357,291 | 7,349,476 | |||
Progressive Corp. (The) | 337,551 | 20,364,452 | |||
RenaissanceRe Holdings Ltd. | 9,926 | 1,327,106 | |||
Travelers Cos., Inc. (The) | 153,389 | 18,368,333 | |||
76,913,701 | |||||
Interactive Media and Services — 4.3% | |||||
Alphabet, Inc., Class A(1) | 62,872 | 65,698,725 | |||
Facebook, Inc., Class A(1) | 141,216 | 18,512,006 | |||
84,210,731 | |||||
Internet and Direct Marketing Retail — 2.2% | |||||
Amazon.com, Inc.(1) | 29,300 | 44,007,721 | |||
IT Services — 2.3% | |||||
Automatic Data Processing, Inc. | 3,042 | 398,867 | |||
International Business Machines Corp. | 215,135 | 24,454,395 | |||
Leidos Holdings, Inc. | 38,764 | 2,043,638 | |||
MAXIMUS, Inc. | 86,973 | 5,661,073 | |||
Visa, Inc., Class A | 91,312 | 12,047,705 | |||
44,605,678 | |||||
Machinery — 2.8% | |||||
Caterpillar, Inc. | 187,821 | 23,866,415 | |||
Parker-Hannifin Corp. | 112,901 | 16,838,055 | |||
Snap-on, Inc. | 104,201 | 15,139,363 | |||
55,843,833 | |||||
Media — 0.5% | |||||
Comcast Corp., Class A | 302,690 | 10,306,594 | |||
Metals and Mining† | |||||
Nucor Corp. | 6,729 | 348,629 | |||
Mortgage Real Estate Investment Trusts (REITs) — 0.7% | |||||
Two Harbors Investment Corp. | 1,114,531 | 14,310,578 | |||
Multi-Utilities — 0.5% | |||||
Dominion Energy, Inc. | 145,192 | 10,375,420 | |||
Multiline Retail — 1.0% | |||||
Kohl's Corp. | 291,533 | 19,340,299 | |||
Oil, Gas and Consumable Fuels — 6.7% | |||||
Chevron Corp. | 329,164 | 35,809,752 | |||
ConocoPhillips | 338,217 | 21,087,830 | |||
Exxon Mobil Corp. | 188,748 | 12,870,726 | |||
HollyFrontier Corp. | 208,481 | 10,657,549 | |||
Marathon Petroleum Corp. | 281,360 | 16,603,054 | |||
Occidental Petroleum Corp. | 300,267 | 18,430,388 | |||
Phillips 66 | 197,109 | 16,980,940 | |||
132,440,239 | |||||
Paper and Forest Products — 0.3% | |||||
Domtar Corp. | 179,801 | 6,316,409 | |||
Pharmaceuticals — 7.0% | |||||
Allergan plc | 133,060 | 17,784,799 | |||
Bristol-Myers Squibb Co. | 477,667 | 24,829,131 | |||
Eli Lilly & Co. | 181,108 | 20,957,818 | |||
Johnson & Johnson | 127,479 | 16,451,165 | |||
Merck & Co., Inc. | 221,129 | 16,896,467 |
8
Shares | Value | ||||
Pfizer, Inc. | 960,129 | $ | 41,909,631 | ||
138,829,011 | |||||
Semiconductors and Semiconductor Equipment — 5.4% | |||||
Applied Materials, Inc. | 450,719 | 14,756,540 | |||
Broadcom, Inc. | 65,486 | 16,651,780 | |||
Intel Corp. | 831,099 | 39,003,476 | |||
KLA-Tencor Corp. | 102,537 | 9,176,036 | |||
Lam Research Corp. | 24,506 | 3,336,982 | |||
QUALCOMM, Inc. | 397,541 | 22,624,059 | |||
Texas Instruments, Inc. | 10,216 | 965,412 | |||
106,514,285 | |||||
Software — 6.8% | |||||
Intuit, Inc. | 51,157 | 10,070,256 | |||
LogMeIn, Inc. | 143,134 | 11,675,440 | |||
Microsoft Corp. | 861,684 | 87,521,244 | |||
Oracle Corp. (New York) | 573,716 | 25,903,277 | |||
135,170,217 | |||||
Specialty Retail — 1.6% | |||||
American Eagle Outfitters, Inc. | 482,191 | 9,320,752 | |||
Best Buy Co., Inc. | 193,267 | 10,235,420 | |||
Ross Stores, Inc. | 147,994 | 12,313,101 | |||
31,869,273 | |||||
Technology Hardware, Storage and Peripherals — 5.5% | |||||
Apple, Inc. | 447,816 | 70,638,496 | |||
Hewlett Packard Enterprise Co. | 613,840 | 8,108,826 | |||
HP, Inc. | 836,545 | 17,115,711 | |||
Seagate Technology plc | 321,205 | 12,395,301 | |||
108,258,334 | |||||
Textiles, Apparel and Luxury Goods — 2.1% | |||||
NIKE, Inc., Class B | 139,727 | 10,359,360 | |||
Ralph Lauren Corp. | 145,340 | 15,036,876 | |||
Tapestry, Inc. | 455,210 | 15,363,338 | |||
40,759,574 | |||||
Tobacco — 1.6% | |||||
Altria Group, Inc. | 475,327 | 23,476,401 | |||
Philip Morris International, Inc. | 115,244 | 7,693,689 | |||
31,170,090 | |||||
Trading Companies and Distributors — 0.9% | |||||
W.W. Grainger, Inc. | 63,204 | 17,846,281 | |||
TOTAL COMMON STOCKS (Cost $1,715,466,552) | 1,958,441,224 | ||||
TEMPORARY CASH INVESTMENTS — 0.8% | |||||
Repurchase Agreement, BMO Capital Markets Corp., (collateralized by various U.S. Treasury obligations, 0.125% - 2.75%, 10/31/19 - 2/15/44, valued at $14,499,904), in a joint trading account at 2.45%, dated 12/31/18, due 1/2/19 (Delivery value $14,219,380) | 14,217,445 | ||||
Repurchase Agreement, Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 3.375%, 11/15/48, valued at $2,420,902), at 1.25%, dated 12/31/18, due 1/2/19 (Delivery value $2,373,165) | 2,373,000 |
9
Shares | Value | ||||
State Street Institutional U.S. Government Money Market Fund, Premier Class | 10,359 | $ | 10,359 | ||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $16,600,804) | 16,600,804 | ||||
TOTAL INVESTMENT SECURITIES — 99.9% (Cost $1,732,067,356) | 1,975,042,028 | ||||
OTHER ASSETS AND LIABILITIES — 0.1% | 2,124,818 | ||||
TOTAL NET ASSETS — 100.0% | $ | 1,977,166,846 |
NOTES TO SCHEDULE OF INVESTMENTS |
† | Category is less than 0.05% of total net assets. |
(1) | Non-income producing. |
See Notes to Financial Statements.
10
Statement of Assets and Liabilities |
DECEMBER 31, 2018 (UNAUDITED) | |||
Assets | |||
Investment securities, at value (cost of $1,732,067,356) | $ | 1,975,042,028 | |
Receivable for capital shares sold | 2,721,544 | ||
Dividends and interest receivable | 9,391,153 | ||
1,987,154,725 | |||
Liabilities | |||
Payable for investments purchased | 5,939,799 | ||
Payable for capital shares redeemed | 2,894,224 | ||
Accrued management fees | 1,106,489 | ||
Distribution and service fees payable | 47,367 | ||
9,987,879 | |||
Net Assets | $ | 1,977,166,846 | |
Net Assets Consist of: | |||
Capital (par value and paid-in surplus) | $ | 1,713,003,779 | |
Distributable earnings | 264,163,067 | ||
$ | 1,977,166,846 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | ||||
Investor Class, $0.01 Par Value | $1,554,939,807 | 47,673,707 | $32.62 | |||
I Class, $0.01 Par Value | $242,126,278 | 7,412,753 | $32.66 | |||
A Class, $0.01 Par Value | $137,073,524 | 4,209,268 | $32.56* | |||
C Class, $0.01 Par Value | $8,321,791 | 256,037 | $32.50 | |||
R Class, $0.01 Par Value | $22,976,540 | 704,670 | $32.61 | |||
R5 Class, $0.01 Par Value | $11,728,906 | 358,997 | $32.67 |
*Maximum offering price $34.55 (net asset value divided by 0.9425).
See Notes to Financial Statements.
11
Statement of Operations |
FOR THE SIX MONTHS ENDED DECEMBER 31, 2018 (UNAUDITED) | |||
Investment Income (Loss) | |||
Income: | |||
Dividends (net of foreign taxes withheld of $3,904) | $ | 32,239,342 | |
Interest | 171,302 | ||
32,410,644 | |||
Expenses: | |||
Management fees | 7,088,036 | ||
Distribution and service fees: | |||
A Class | 194,657 | ||
C Class | 42,808 | ||
R Class | 64,042 | ||
Directors' fees and expenses | 77,900 | ||
Other expenses | 82 | ||
7,467,525 | |||
Net investment income (loss) | 24,943,119 | ||
Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on investment transactions | 61,422,895 | ||
Change in net unrealized appreciation (depreciation) on investments | (265,051,707 | ) | |
Net realized and unrealized gain (loss) | (203,628,812 | ) | |
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | (178,685,693 | ) |
See Notes to Financial Statements.
12
Statement of Changes in Net Assets |
SIX MONTHS ENDED DECEMBER 31, 2018 (UNAUDITED) AND YEAR ENDED JUNE 30, 2018 | ||||||
Increase (Decrease) in Net Assets | December 31, 2018 | June 30, 2018 | ||||
Operations | ||||||
Net investment income (loss) | $ | 24,943,119 | $ | 51,051,644 | ||
Net realized gain (loss) | 61,422,895 | 180,526,468 | ||||
Change in net unrealized appreciation (depreciation) | (265,051,707 | ) | 58,020,952 | |||
Net increase (decrease) in net assets resulting from operations | (178,685,693 | ) | 289,599,064 | |||
Distributions to Shareholders | ||||||
From earnings:(1) | ||||||
Investor Class | (169,014,450 | ) | (154,991,490 | ) | ||
I Class | (26,269,948 | ) | (23,117,923 | ) | ||
A Class | (14,777,432 | ) | (13,914,990 | ) | ||
C Class | (822,853 | ) | (586,715 | ) | ||
R Class | (2,425,312 | ) | (2,339,012 | ) | ||
R5 Class | (1,348,127 | ) | (109,527 | ) | ||
Decrease in net assets from distributions | (214,658,122 | ) | (195,059,657 | ) | ||
Capital Share Transactions | ||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | 150,756,497 | 60,088,088 | ||||
Net increase (decrease) in net assets | (242,587,318 | ) | 154,627,495 | |||
Net Assets | ||||||
Beginning of period | 2,219,754,164 | 2,065,126,669 | ||||
End of period | $ | 1,977,166,846 | $ | 2,219,754,164 |
(1) | Prior period presentation has been updated to reflect the current period combination of distributions to shareholders from net investment income and net realized gains. Distributions from net investment income were $(39,274,876), $(5,820,706), $(3,170,464), $(93,791), $(480,039) and $(39,086) for Investor Class, I Class, A Class, C Class, R Class and R5 Class, respectively. Distributions from net realized gains were $(115,716,614), $(17,297,217), $(10,744,526), $(492,924), $(1,858,973) and $(70,441) for Investor Class, I Class, A Class, C Class, R Class and R5 Class, respectively. |
See Notes to Financial Statements.
13
Notes to Financial Statements |
DECEMBER 31, 2018 (UNAUDITED)
1. Organization
American Century Quantitative Equity 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. Income & 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 by investing in common stocks. Income is a secondary objective.
The fund offers the Investor Class, I Class, A Class, C Class, R Class and R5 Class. The A Class may incur an initial sales charge. The A Class and C Class may be subject to a contingent deferred sales charge.
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.
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.
14
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.
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, if any, are generally declared and paid quarterly. Distributions from 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.
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
15
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 fee consists of (1) an Investment Category Fee based on the daily net assets of the fund and certain other accounts managed by the investment advisor that are in the same broad investment category as the fund and (2) a Complex Fee based on the assets of all the funds in the American Century Investments family of funds.
The Investment Category Fee range, the Complex Fee range and the effective annual management fee for each class for the period ended December 31, 2018 are as follows:
Investment Category Fee Range | Complex Fee Range | Effective Annual Management Fee | |
Investor Class | 0.3380% to 0.5200% | 0.2500% to 0.3100% | 0.66% |
I Class | 0.0500% to 0.1100% | 0.46% | |
A Class | 0.2500% to 0.3100% | 0.66% | |
C Class | 0.2500% to 0.3100% | 0.66% | |
R Class | 0.2500% to 0.3100% | 0.66% | |
R5 Class | 0.0500% to 0.1100% | 0.46% |
Distribution and Service Fees — The Board of Directors has adopted a separate Master Distribution and Individual Shareholder Services Plan for each of the A Class, C Class and R Class (collectively the plans), pursuant to Rule 12b-1 of the 1940 Act. The plans provide that the A Class will pay ACIS an annual distribution and service fee of 0.25%. The plans provide that the C Class will pay ACIS an annual distribution and service fee of 1.00%, of which 0.25% is paid for individual shareholder services and 0.75% is paid for distribution services. The plans provide that the R Class will pay ACIS an annual distribution and service fee of 0.50%. The fees are computed and accrued daily based on each class’s daily net assets and paid monthly in arrears. The fees are used to pay financial intermediaries for distribution and individual shareholder services. Fees incurred under the plans during the period ended December 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 $4,898,342 and $6,685,937, respectively. The effect of interfund transactions on the Statement of Operations was $705,234 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 December 31, 2018 were $781,056,324 and $799,871,687, respectively.
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5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended December 31, 2018 | Year ended June 30, 2018 | |||||||||
Shares | Amount | Shares | Amount | |||||||
Investor Class/Shares Authorized | 370,000,000 | 370,000,000 | ||||||||
Sold | 2,068,134 | $ | 79,999,403 | 3,270,833 | $ | 128,998,737 | ||||
Issued in reinvestment of distributions | 4,682,994 | 161,740,356 | 3,770,568 | 148,574,725 | ||||||
Redeemed | (3,303,846 | ) | (128,516,285 | ) | (7,433,451 | ) | (293,866,762 | ) | ||
3,447,282 | 113,223,474 | (392,050 | ) | (16,293,300 | ) | |||||
I Class/Shares Authorized | 40,000,000 | 40,000,000 | ||||||||
Sold | 1,011,326 | 38,912,120 | 2,780,758 | 110,115,067 | ||||||
Issued in reinvestment of distributions | 736,436 | 25,497,768 | 582,477 | 22,993,886 | ||||||
Redeemed | (1,261,059 | ) | (49,824,653 | ) | (1,223,728 | ) | (48,844,162 | ) | ||
486,703 | 14,585,235 | 2,139,507 | 84,264,791 | |||||||
A Class/Shares Authorized | 50,000,000 | 50,000,000 | ||||||||
Sold | 404,075 | 15,723,918 | 522,616 | 20,782,157 | ||||||
Issued in reinvestment of distributions | 392,967 | 13,534,381 | 321,189 | 12,629,052 | ||||||
Redeemed | (512,695 | ) | (20,132,485 | ) | (1,063,137 | ) | (42,165,557 | ) | ||
284,347 | 9,125,814 | (219,332 | ) | (8,754,348 | ) | |||||
C Class/Shares Authorized | 15,000,000 | 15,000,000 | ||||||||
Sold | 81,313 | 3,030,807 | 64,499 | 2,548,008 | ||||||
Issued in reinvestment of distributions | 21,495 | 735,767 | 12,980 | 508,562 | ||||||
Redeemed | (63,504 | ) | (2,403,030 | ) | (55,721 | ) | (2,197,171 | ) | ||
39,304 | 1,363,544 | 21,758 | 859,399 | |||||||
R Class/Shares Authorized | 20,000,000 | 20,000,000 | ||||||||
Sold | 142,085 | 5,394,039 | 178,677 | 7,068,133 | ||||||
Issued in reinvestment of distributions | 29,095 | 1,000,557 | 19,416 | 763,688 | ||||||
Redeemed | (105,440 | ) | (4,143,350 | ) | (299,498 | ) | (11,926,030 | ) | ||
65,740 | 2,251,246 | (101,405 | ) | (4,094,209 | ) | |||||
R5 Class/Shares Authorized | 50,000,000 | 50,000,000 | ||||||||
Sold | 288,563 | 11,612,870 | 107,538 | 4,314,570 | ||||||
Issued in reinvestment of distributions | 39,167 | 1,348,127 | 2,762 | 109,527 | ||||||
Redeemed | (75,658 | ) | (2,753,813 | ) | (7,995 | ) | (318,342 | ) | ||
252,072 | 10,207,184 | 102,305 | 4,105,755 | |||||||
Net increase (decrease) | 4,575,448 | $ | 150,756,497 | 1,550,783 | $ | 60,088,088 |
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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.
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 | $ | 1,958,441,224 | — | — | ||||
Temporary Cash Investments | 10,359 | $ | 16,590,445 | — | ||||
$ | 1,958,451,583 | $ | 16,590,445 | — |
7. Federal Tax Information
The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
As of period end, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $ | 1,735,541,471 | |
Gross tax appreciation of investments | $ | 410,845,540 | |
Gross tax depreciation of investments | (171,344,983 | ) | |
Net tax appreciation (depreciation) of investments | $ | 239,500,557 |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales.
18
Financial Highlights |
For a Share Outstanding Throughout the Years Ended June 30 (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) | $39.61 | 0.45 | (3.57) | (3.12) | (0.40) | (3.47) | (3.87) | $32.62 | (8.32)% | 0.67%(4) | 2.23%(4) | 36% | $1,554,940 | ||
2018 | $37.90 | 0.93 | 4.40 | 5.33 | (0.88) | (2.74) | (3.62) | $39.61 | 14.32% | 0.66% | 2.33% | 77% | $1,751,738 | ||
2017 | $33.91 | 0.79 | 4.55 | 5.34 | (0.76) | (0.59) | (1.35) | $37.90 | 15.95% | 0.67% | 2.16% | 81% | $1,691,048 | ||
2016 | $36.78 | 0.82 | (0.61) | 0.21 | (0.84) | (2.24) | (3.08) | $33.91 | 1.00% | 0.68% | 2.40% | 79% | $1,551,664 | ||
2015 | $38.52 | 0.81 | 0.29 | 1.10 | (0.79) | (2.05) | (2.84) | $36.78 | 2.87% | 0.67% | 2.11% | 79% | $1,655,693 | ||
2014 | $31.58 | 0.77 | 6.95 | 7.72 | (0.78) | — | (0.78) | $38.52 | 24.66% | 0.67% | 2.17% | 76% | $1,708,291 | ||
I Class | |||||||||||||||
2018(3) | $39.66 | 0.49 | (3.58) | (3.09) | (0.44) | (3.47) | (3.91) | $32.66 | (8.24)% | 0.47%(4) | 2.43%(4) | 36% | $242,126 | ||
2018 | $37.94 | 0.99 | 4.43 | 5.42 | (0.96) | (2.74) | (3.70) | $39.66 | 14.55% | 0.46% | 2.53% | 77% | $274,687 | ||
2017 | $33.95 | 0.86 | 4.55 | 5.41 | (0.83) | (0.59) | (1.42) | $37.94 | 16.16% | 0.47% | 2.36% | 81% | $181,620 | ||
2016 | $36.82 | 0.88 | (0.60) | 0.28 | (0.91) | (2.24) | (3.15) | $33.95 | 1.21% | 0.48% | 2.60% | 79% | $127,626 | ||
2015 | $38.55 | 0.88 | 0.30 | 1.18 | (0.86) | (2.05) | (2.91) | $36.82 | 3.10% | 0.47% | 2.31% | 79% | $125,872 | ||
2014 | $31.61 | 0.84 | 6.95 | 7.79 | (0.85) | — | (0.85) | $38.55 | 24.89% | 0.47% | 2.37% | 76% | $89,218 | ||
A Class | |||||||||||||||
2018(3) | $39.55 | 0.40 | (3.57) | (3.17) | (0.35) | (3.47) | (3.82) | $32.56 | (8.45)% | 0.92%(4) | 1.98%(4) | 36% | $137,074 | ||
2018 | $37.85 | 0.83 | 4.39 | 5.22 | (0.78) | (2.74) | (3.52) | $39.55 | 14.03% | 0.91% | 2.08% | 77% | $155,233 | ||
2017 | $33.87 | 0.69 | 4.55 | 5.24 | (0.67) | (0.59) | (1.26) | $37.85 | 15.65% | 0.92% | 1.91% | 81% | $156,863 | ||
2016 | $36.74 | 0.73 | (0.61) | 0.12 | (0.75) | (2.24) | (2.99) | $33.87 | 0.75% | 0.93% | 2.15% | 79% | $205,390 | ||
2015 | $38.48 | 0.71 | 0.29 | 1.00 | (0.69) | (2.05) | (2.74) | $36.74 | 2.62% | 0.92% | 1.86% | 79% | $239,515 | ||
2014 | $31.55 | 0.68 | 6.94 | 7.62 | (0.69) | — | (0.69) | $38.48 | 24.34% | 0.92% | 1.92% | 76% | $232,471 |
For a Share Outstanding Throughout the Years Ended June 30 (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) | |||
C Class | |||||||||||||||
2018(3) | $39.48 | 0.25 | (3.55) | (3.30) | (0.21) | (3.47) | (3.68) | $32.50 | (8.79)% | 1.67%(4) | 1.23%(4) | 36% | $8,322 | ||
2018 | $37.79 | 0.53 | 4.39 | 4.92 | (0.49) | (2.74) | (3.23) | $39.48 | 13.18% | 1.66% | 1.33% | 77% | $8,557 | ||
2017 | $33.82 | 0.42 | 4.53 | 4.95 | (0.39) | (0.59) | (0.98) | $37.79 | 14.77% | 1.67% | 1.16% | 81% | $7,368 | ||
2016 | $36.68 | 0.47 | (0.60) | (0.13) | (0.49) | (2.24) | (2.73) | $33.82 | 0.01% | 1.68% | 1.40% | 79% | $6,734 | ||
2015 | $38.42 | 0.42 | 0.29 | 0.71 | (0.40) | (2.05) | (2.45) | $36.68 | 1.86% | 1.67% | 1.11% | 79% | $8,195 | ||
2014 | $31.50 | 0.41 | 6.93 | 7.34 | (0.42) | — | (0.42) | $38.42 | 23.42% | 1.67% | 1.17% | 76% | $5,445 | ||
R Class | |||||||||||||||
2018(3) | $39.59 | 0.35 | (3.56) | (3.21) | (0.30) | (3.47) | (3.77) | $32.61 | (8.53)% | 1.17%(4) | 1.73%(4) | 36% | $22,977 | ||
2018 | $37.89 | 0.73 | 4.40 | 5.13 | (0.69) | (2.74) | (3.43) | $39.59 | 13.73% | 1.16% | 1.83% | 77% | $25,298 | ||
2017 | $33.91 | 0.60 | 4.55 | 5.15 | (0.58) | (0.59) | (1.17) | $37.89 | 15.34% | 1.17% | 1.66% | 81% | $28,052 | ||
2016 | $36.77 | 0.65 | (0.60) | 0.05 | (0.67) | (2.24) | (2.91) | $33.91 | 0.52% | 1.18% | 1.90% | 79% | $23,290 | ||
2015 | $38.51 | 0.60 | 0.31 | 0.91 | (0.60) | (2.05) | (2.65) | $36.77 | 2.36% | 1.17% | 1.61% | 79% | $15,663 | ||
2014 | $31.57 | 0.59 | 6.95 | 7.54 | (0.60) | — | (0.60) | $38.51 | 24.05% | 1.17% | 1.67% | 76% | $3,577 | ||
R5 Class | |||||||||||||||
2018(3) | $39.66 | 0.52 | (3.60) | (3.08) | (0.44) | (3.47) | (3.91) | $32.67 | (8.21)% | 0.47%(4) | 2.43%(4) | 36% | $11,729 | ||
2018 | $37.95 | 0.91 | 4.50 | 5.41 | (0.96) | (2.74) | (3.70) | $39.66 | 14.52% | 0.46% | 2.53% | 77% | $4,241 | ||
2017(5) | $37.51 | 0.20 | 0.43 | 0.63 | (0.19) | — | (0.19) | $37.95 | 1.68% | 0.47%(4) | 2.37%(4) | 81%(6) | $175 |
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 and do not reflect applicable sales charges, if any. Total returns for periods less than one year are not annualized. |
(3) | Six months ended December 31, 2018 (unaudited). |
(4) | Annualized. |
(5) | April 10, 2017 (commencement of sale) through June 30, 2017. |
(6) | Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended June 30, 2017. |
See Notes to Financial Statements.
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
Descriptions of the principles and policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund are available without charge, upon request, by calling 1-800-345-2021 or visiting the "About Us" page of American Century Investments’ website at americancentury.com. A description of the policies is also available 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. 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.
22
Notes |
23
Notes |
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 Quantitative Equity 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. | ||
©2019 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-91456 1902 |
Semiannual Report | |
December 31, 2018 | |
International Core Equity Fund | |
Investor Class (ACIMX) | |
I Class (ACIUX) | |
A Class (ACIQX) | |
C Class (ACIKX) | |
R Class (ACIRX) |
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the fund’s shareholder reports like this one will no longer be sent by mail, unless you specifically request paper copies of the reports from the fund or from your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the fund or your financial intermediary electronically by calling or sending an email request to your appropriate contacts as listed on the back cover of this report.
You may elect to receive all future reports in paper free of charge. You can inform the fund or your financial intermediary that you wish to continue receiving paper copies of your shareholder reports by calling or sending an email request to your appropriate contacts as listed on the back cover of this report. Your election to receive reports in paper will apply to all funds held with the fund complex/your financial intermediary.
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 period ended December 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, please visit our website, americancentury.com.
Risk-On/Risk-Off Rotation Highlights Heightened Volatility
The six-month reporting period began on an upbeat note for stock investors. Against a backdrop of robust economic and earnings data and federal tax and regulatory reform, U.S. stocks soared. The S&P 500 Index gained nearly 8% in the first three months of the period. Outside the U.S., stocks also advanced, but the gains were more subdued amid signs of slowing growth. Meanwhile, favorable U.S. economic data and continued Federal Reserve (Fed) tightening helped push U.S. Treasury yields higher. This pressured interest rate-sensitive assets, including longer-maturity Treasuries, gold, utilities stocks, and REITs (real estate investment trusts), and they generally underperformed U.S. stocks.
In the second half of the reporting period, investor sentiment and asset-class performance took a drastic turn. Investors exited stocks on mounting concerns about slowing global economic and earnings growth and Fed policy. Along with its December interest rate increase, the Fed delivered a surprisingly bullish outlook. Investors feared the Fed’s plans for two rate hikes in 2019 were too aggressive, further fueling the steep sell-off among riskier assets. The S&P 500 Index declined more than 13% in the fourth quarter. For the entire six-month period, U.S. stocks fell 6.85%. Losses among non-U.S. stocks were even steeper.
The risk-off climate in the second half of the period sparked a flight to quality. Treasury yields plunged in the fourth quarter, triggering a year-end rally in Treasuries and other perceived safe-haven assets. Overall, Treasuries were up for the six-month period and significantly outperformed stocks and other riskier assets.
As recent performance trends indicate, market volatility remains a formidable force. But volatile markets often produce the most compelling investment opportunities. We believe this scenario underscores the importance of 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 |
DECEMBER 31, 2018 | |
Top Ten Holdings | % of net assets |
iShares MSCI EAFE ETF | 2.1% |
Roche Holding AG | 2.1% |
Royal Dutch Shell plc, B Shares | 1.8% |
Novartis AG | 1.6% |
Nestle SA | 1.6% |
GlaxoSmithKline plc | 1.6% |
BHP Group plc | 1.5% |
Allianz SE | 1.5% |
Eni SpA | 1.3% |
Rio Tinto plc | 1.3% |
Investments by Country | % of net assets |
Japan | 23.9% |
United Kingdom | 15.2% |
France | 8.7% |
Switzerland | 7.2% |
Netherlands | 5.9% |
Germany | 5.7% |
Australia | 5.6% |
Hong Kong | 3.8% |
Sweden | 3.1% |
Singapore | 2.8% |
Norway | 2.6% |
Italy | 2.2% |
Other Countries | 9.8% |
Exchange-Traded Funds* | 3.0% |
Cash and Equivalents** | 0.5% |
* Category may increase exposure to the countries indicated. The Schedule of Investments provides additional information on the fund's portfolio holdings. | |
** Includes temporary cash investments and other assets and liabilities. | |
Types of Investments in Portfolio | % of net assets |
Common Stocks | 96.5% |
Exchange-Traded Funds | 3.0% |
Total Equity Exposure | 99.5% |
Temporary Cash Investments | 0.1% |
Other Assets and Liabilities | 0.4% |
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 July 1, 2018 to December 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 7/1/18 | Ending Account Value 12/31/18 | Expenses Paid During Period(1) 7/1/18 - 12/31/18 | Annualized Expense Ratio(1) | |
Actual | ||||
Investor Class | $1,000 | $864.60 | $5.40 | 1.15% |
I Class | $1,000 | $865.50 | $4.47 | 0.95% |
A Class | $1,000 | $863.60 | $6.58 | 1.40% |
C Class | $1,000 | $860.50 | $10.08 | 2.15% |
R Class | $1,000 | $862.10 | $7.74 | 1.65% |
Hypothetical | ||||
Investor Class | $1,000 | $1,019.41 | $5.85 | 1.15% |
I Class | $1,000 | $1,020.42 | $4.84 | 0.95% |
A Class | $1,000 | $1,018.15 | $7.12 | 1.40% |
C Class | $1,000 | $1,014.37 | $10.92 | 2.15% |
R Class | $1,000 | $1,016.89 | $8.39 | 1.65% |
(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 |
DECEMBER 31, 2018 (UNAUDITED)
Shares | Value | ||||
COMMON STOCKS — 96.5% | |||||
Australia — 5.6% | |||||
Aristocrat Leisure Ltd. | 1,549 | $ | 23,828 | ||
Australia & New Zealand Banking Group Ltd. | 15,241 | 262,578 | |||
CIMIC Group Ltd. | 7,238 | 221,308 | |||
Commonwealth Bank of Australia | 858 | 43,748 | |||
JB Hi-Fi Ltd. | 5,898 | 91,975 | |||
Regis Resources Ltd. | 27,298 | 92,868 | |||
Santos Ltd. | 49,137 | 189,661 | |||
Super Retail Group Ltd. | 34,389 | 170,280 | |||
Telstra Corp. Ltd. | 12,192 | 24,474 | |||
Wesfarmers Ltd. | 7,981 | 181,122 | |||
Whitehaven Coal Ltd. | 24,677 | 75,087 | |||
1,376,929 | |||||
China — 1.5% | |||||
China Petroleum & Chemical Corp., H Shares | 176,000 | 125,642 | |||
CITIC Ltd. | 116,000 | 181,914 | |||
Country Garden Holdings Co. Ltd. | 46,000 | 55,984 | |||
363,540 | |||||
Denmark — 0.5% | |||||
DSV A/S | 653 | 43,059 | |||
H Lundbeck A/S | 1,732 | 75,951 | |||
Novo Nordisk A/S, B Shares | 255 | 11,722 | |||
130,732 | |||||
France — 8.7% | |||||
Beneteau SA | 5,924 | 77,920 | |||
BNP Paribas SA | 6,058 | 273,994 | |||
CNP Assurances | 10,564 | 224,160 | |||
Dassault Aviation SA | 135 | 187,158 | |||
Eiffage SA | 495 | 41,379 | |||
Faurecia SA | 1,247 | 47,249 | |||
Kaufman & Broad SA | 3,517 | 134,589 | |||
Kering SA | 383 | 180,619 | |||
L'Oreal SA | 658 | 151,685 | |||
Metropole Television SA | 3,906 | 62,833 | |||
Peugeot SA | 9,524 | 203,456 | |||
Sanofi | 2,365 | 205,016 | |||
TOTAL SA | 4,562 | 241,379 | |||
Ubisoft Entertainment SA(1) | 1,600 | 129,204 | |||
2,160,641 | |||||
Germany — 5.7% | |||||
adidas AG | 781 | 163,206 | |||
Allianz SE | 1,791 | 359,393 |
6
Shares | Value | ||||
Covestro AG | 2,446 | $ | 121,009 | ||
Deutsche Telekom AG | 17,875 | 303,636 | |||
HOCHTIEF AG | 367 | 49,465 | |||
HUGO BOSS AG | 1,459 | 89,983 | |||
MTU Aero Engines AG | 419 | 76,104 | |||
RTL Group SA | 1,485 | 79,484 | |||
RWE AG | 1,782 | 38,740 | |||
Siemens AG | 500 | 55,765 | |||
Siltronic AG | 796 | 65,836 | |||
1,402,621 | |||||
Hong Kong — 3.8% | |||||
Champion REIT | 143,000 | 97,884 | |||
CLP Holdings Ltd. | 10,500 | 118,671 | |||
Health & Happiness H&H International Holdings Ltd.(1) | 20,500 | 117,023 | |||
Hongkong Land Holdings Ltd. | 14,700 | 92,610 | |||
Link REIT | 13,000 | 131,652 | |||
Sands China Ltd. | 24,400 | 106,880 | |||
Swire Properties Ltd. | 66,200 | 232,488 | |||
Wharf Holdings Ltd. (The) | 16,000 | 41,683 | |||
938,891 | |||||
Israel — 1.9% | |||||
Bank Leumi Le-Israel BM | 32,680 | 197,520 | |||
Mizrahi Tefahot Bank Ltd. | 1,271 | 21,462 | |||
Nice Ltd.(1) | 991 | 106,595 | |||
Teva Pharmaceutical Industries Ltd. ADR | 6,200 | 95,604 | |||
Wix.com Ltd.(1) | 600 | 54,204 | |||
475,385 | |||||
Italy — 2.2% | |||||
Eni SpA | 20,255 | 318,979 | |||
EXOR NV | 1,404 | 75,868 | |||
Fiat Chrysler Automobiles NV(1) | 9,671 | 140,604 | |||
535,451 | |||||
Japan — 23.9% | |||||
Asahi Kasei Corp. | 7,900 | 80,605 | |||
Astellas Pharma, Inc. | 16,100 | 204,891 | |||
Brother Industries Ltd. | 7,400 | 108,619 | |||
Canon, Inc. | 6,400 | 176,348 | |||
Capcom Co., Ltd. | 6,100 | 121,598 | |||
Dai-ichi Life Holdings, Inc. | 4,900 | 75,927 | |||
Daiichi Sankyo Co. Ltd. | 800 | 25,718 | |||
Daiichikosho Co., Ltd. | 1,600 | 75,621 | |||
Daiwa Securities Group, Inc. | 6,000 | 30,593 | |||
DMG Mori Co. Ltd. | 10,700 | 119,423 | |||
Eisai Co. Ltd. | 3,100 | 241,379 | |||
Fast Retailing Co. Ltd. | 100 | 51,154 | |||
Honda Motor Co. Ltd. | 400 | 10,452 | |||
Hoya Corp. | 4,000 | 244,489 |
7
Shares | Value | ||||
Isuzu Motors Ltd. | 3,800 | $ | 53,057 | ||
Kansai Electric Power Co., Inc. (The) | 1,600 | 24,025 | |||
KDDI Corp. | 7,600 | 181,109 | |||
Kikkoman Corp. | 1,100 | 59,032 | |||
Kirin Holdings Co. Ltd. | 4,500 | 94,657 | |||
Mitsubishi Chemical Holdings Corp. | 4,600 | 34,607 | |||
Mitsubishi Corp. | 3,400 | 92,796 | |||
Mitsubishi UFJ Financial Group, Inc. | 36,900 | 181,959 | |||
Mitsui & Co. Ltd. | 3,400 | 52,694 | |||
Nihon Unisys Ltd. | 7,800 | 173,108 | |||
Nikon Corp. | 9,400 | 139,294 | |||
Nippon Telegraph & Telephone Corp. | 3,400 | 138,435 | |||
NTT DOCOMO, Inc. | 6,600 | 148,203 | |||
ORIX Corp. | 10,500 | 152,561 | |||
Recruit Holdings Co. Ltd. | 6,700 | 160,403 | |||
Sankyu, Inc. | 4,000 | 179,936 | |||
SBI Holdings, Inc. | 7,700 | 150,301 | |||
SG Holdings Co. Ltd. | 5,500 | 144,246 | |||
Shionogi & Co. Ltd. | 3,200 | 181,452 | |||
Shiseido Co. Ltd. | 1,300 | 80,775 | |||
SoftBank Group Corp. | 700 | 46,140 | |||
Sojitz Corp. | 54,600 | 188,347 | |||
Sony Corp. | 4,500 | 216,706 | |||
Stanley Electric Co. Ltd. | 2,300 | 64,142 | |||
Subaru Corp. | 6,600 | 140,895 | |||
Sumitomo Chemical Co. Ltd. | 30,700 | 150,134 | |||
Sumitomo Mitsui Financial Group, Inc. | 1,600 | 52,763 | |||
Suzuken Co. Ltd. | 1,500 | 76,986 | |||
Suzuki Motor Corp. | 4,300 | 217,582 | |||
Takeda Pharmaceutical Co., Ltd. | 1,600 | 54,289 | |||
Toho Holdings Co. Ltd. | 2,700 | 65,736 | |||
Tokio Marine Holdings, Inc. | 900 | 42,782 | |||
Tokuyama Corp. | 2,200 | 48,223 | |||
Tokyo Electron Ltd. | 400 | 45,892 | |||
Toshiba TEC Corp. | 5,500 | 127,842 | |||
Toyota Motor Corp. | 4,000 | 232,323 | |||
Trend Micro, Inc. | 1,900 | 102,830 | |||
TS Tech Co. Ltd. | 1,800 | 50,239 | |||
5,913,318 | |||||
Malaysia — 0.8% | |||||
CIMB Group Holdings Bhd | 41,900 | 57,895 | |||
Hong Leong Financial Group Bhd | 15,300 | 68,716 | |||
Petronas Chemicals Group Bhd | 33,900 | 76,208 | |||
202,819 | |||||
Netherlands — 5.9% | |||||
ASR Nederland NV | 5,522 | 218,782 | |||
Coca-Cola European Partners plc(1) | 4,300 | 197,155 |
8
Shares | Value | ||||
Koninklijke Ahold Delhaize NV | 10,480 | $ | 265,065 | ||
Koninklijke Philips NV | 8,056 | 285,489 | |||
NN Group NV | 4,978 | 198,483 | |||
Pharming Group NV(1) | 47,395 | 41,134 | |||
QIAGEN NV(1) | 3,736 | 127,391 | |||
TomTom NV(1) | 5,523 | 49,991 | |||
Unilever NV CVA | 1,355 | 73,619 | |||
1,457,109 | |||||
New Zealand — 1.4% | |||||
a2 Milk Co. Ltd.(1) | 27,016 | 202,185 | |||
Spark New Zealand Ltd. | 49,266 | 137,229 | |||
339,414 | |||||
Norway — 2.6% | |||||
Equinor ASA | 10,264 | 218,892 | |||
Marine Harvest ASA | 7,323 | 154,157 | |||
Salmar ASA | 4,204 | 207,927 | |||
Telenor ASA | 2,986 | 57,641 | |||
638,617 | |||||
Portugal — 0.3% | |||||
EDP - Energias de Portugal SA | 22,977 | 80,268 | |||
Singapore — 2.8% | |||||
Oversea-Chinese Banking Corp. Ltd. | 37,000 | 305,675 | |||
Singapore Technologies Engineering Ltd. | 63,400 | 162,343 | |||
United Overseas Bank Ltd. | 12,800 | 230,747 | |||
698,765 | |||||
South Korea — 1.6% | |||||
LG Household & Health Care Ltd. Preference Shares(1) | 270 | 158,465 | |||
Samsung Electronics Co. Ltd. | 4,700 | 162,623 | |||
SK Hynix, Inc. | 1,206 | 65,189 | |||
386,277 | |||||
Spain — 1.0% | |||||
ACS Actividades de Construccion y Servicios SA | 1,252 | 48,529 | |||
Banco Bilbao Vizcaya Argentaria SA | 28,468 | 151,197 | |||
Mapfre SA | 19,993 | 53,144 | |||
252,870 | |||||
Sweden — 3.1% | |||||
Axfood AB | 2,950 | 50,558 | |||
Lundin Petroleum AB | 4,028 | 100,705 | |||
Sandvik AB | 11,666 | 166,922 | |||
Swedish Match AB | 3,721 | 146,700 | |||
Swedish Orphan Biovitrum AB(1) | 2,336 | 50,800 | |||
Telefonaktiebolaget LM Ericsson, B Shares | 27,601 | 243,275 | |||
758,960 | |||||
Switzerland — 7.2% | |||||
Logitech International SA | 1,185 | 37,442 | |||
Nestle SA | 4,769 | 387,724 | |||
Novartis AG | 4,706 | 403,061 |
9
Shares | Value | ||||
Partners Group Holding AG | 244 | $ | 148,311 | ||
Roche Holding AG | 2,138 | 528,672 | |||
Zurich Insurance Group AG(1) | 940 | 280,862 | |||
1,786,072 | |||||
Taiwan — 0.8% | |||||
Formosa Chemicals & Fibre Corp. | 14,000 | 47,433 | |||
President Chain Store Corp. | 15,000 | 151,552 | |||
198,985 | |||||
United Kingdom — 15.2% | |||||
Aggreko plc | 8,611 | 80,407 | |||
Anglo American plc | 5,043 | 112,345 | |||
BAE Systems plc | 38,346 | 224,438 | |||
BBA Aviation plc | 17,724 | 49,294 | |||
BHP Group plc | 17,922 | 377,281 | |||
BP plc | 10,000 | 63,214 | |||
Burberry Group plc | 1,778 | 39,331 | |||
Centrica plc | 136,205 | 234,196 | |||
Direct Line Insurance Group plc | 51,024 | 207,267 | |||
GlaxoSmithKline plc | 20,219 | 384,299 | |||
HSBC Holdings plc | 26,172 | 215,798 | |||
Imperial Brands plc | 2,477 | 75,046 | |||
International Consolidated Airlines Group SA | 31,433 | 249,219 | |||
Legal & General Group plc | 55,819 | 164,349 | |||
Marks & Spencer Group plc | 8,185 | 25,789 | |||
National Express Group plc | 47,929 | 228,478 | |||
Rio Tinto plc | 6,619 | 314,684 | |||
Royal Dutch Shell plc, B Shares | 14,665 | 437,393 | |||
Royal Mail plc | 23,934 | 83,008 | |||
Tate & Lyle plc | 18,606 | 156,520 | |||
Unilever plc | 691 | 36,186 | |||
3,758,542 | |||||
TOTAL COMMON STOCKS (Cost $26,286,954) | 23,856,206 | ||||
EXCHANGE-TRADED FUNDS — 3.0% | |||||
iShares MSCI EAFE ETF | 9,000 | 529,020 | |||
iShares MSCI Japan ETF | 4,136 | 209,654 | |||
TOTAL EXCHANGE-TRADED FUNDS (Cost $812,972) | 738,674 | ||||
TEMPORARY CASH INVESTMENTS — 0.1% | |||||
State Street Institutional U.S. Government Money Market Fund, Premier Class (Cost $39,218) | 39,218 | 39,218 | |||
TOTAL INVESTMENT SECURITIES — 99.6% (Cost $27,139,144) | 24,634,098 | ||||
OTHER ASSETS AND LIABILITIES — 0.4% | 90,426 | ||||
TOTAL NET ASSETS — 100.0% | $ | 24,724,524 |
10
MARKET SECTOR DIVERSIFICATION | ||
(as a % of net assets) | ||
Financials | 18.1 | % |
Industrials | 12.7 | % |
Health Care | 12.2 | % |
Consumer Discretionary | 11.9 | % |
Consumer Staples | 11.1 | % |
Energy | 7.3 | % |
Information Technology | 7.0 | % |
Communication Services | 6.1 | % |
Materials | 5.9 | % |
Real Estate | 2.2 | % |
Utilities | 2.0 | % |
Exchange-Traded Funds | 3.0 | % |
Cash and Equivalents* | 0.5 | % |
* Includes temporary cash investments and other assets and liabilities.
NOTES TO SCHEDULE OF INVESTMENTS | ||
ADR | - | American Depositary Receipt |
CVA | - | Certificaten Van Aandelen |
(1) | Non-income producing. |
See Notes to Financial Statements.
11
Statement of Assets and Liabilities |
DECEMBER 31, 2018 (UNAUDITED) | |||
Assets | |||
Investment securities, at value (cost of $27,139,144) | $ | 24,634,098 | |
Foreign currency holdings, at value (cost of $2,137) | 2,142 | ||
Receivable for capital shares sold | 47,432 | ||
Dividends and interest receivable | 77,635 | ||
24,761,307 | |||
Liabilities | |||
Payable for capital shares redeemed | 11,718 | ||
Accrued management fees | 23,696 | ||
Distribution and service fees payable | 1,369 | ||
36,783 | |||
Net Assets | $ | 24,724,524 | |
Net Assets Consist of: | |||
Capital (par value and paid-in surplus) | $ | 28,521,882 | |
Distributable earnings | (3,797,358 | ) | |
$ | 24,724,524 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | ||||
Investor Class, $0.01 Par Value | $15,192,023 | 1,958,121 | $7.76 | |||
I Class, $0.01 Par Value | $5,279,596 | 679,679 | $7.77 | |||
A Class, $0.01 Par Value | $3,331,228 | 428,342 | $7.78* | |||
C Class, $0.01 Par Value | $423,278 | 54,559 | $7.76 | |||
R Class, $0.01 Par Value | $498,399 | 64,233 | $7.76 |
* Maximum offering price $8.25 (net asset value divided by 0.9425).
See Notes to Financial Statements.
12
Statement of Operations |
FOR THE SIX MONTHS ENDED DECEMBER 31, 2018 (UNAUDITED) | |||
Investment Income (Loss) | |||
Income: | |||
Dividends (net of foreign taxes withheld of $25,203) | $ | 312,142 | |
Interest | 2,069 | ||
314,211 | |||
Expenses: | |||
Management fees | 159,835 | ||
Distribution and service fees: | |||
A Class | 4,933 | ||
C Class | 3,804 | ||
R Class | 1,429 | ||
Directors' fees and expenses | 1,033 | ||
Other expenses | 148 | ||
171,182 | |||
Net investment income (loss) | 143,029 | ||
Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investment transactions | (1,071,486 | ) | |
Foreign currency translation transactions | (2,377 | ) | |
(1,073,863 | ) | ||
Change in net unrealized appreciation (depreciation) on: | |||
Investments | (3,039,199 | ) | |
Translation of assets and liabilities in foreign currencies | 911 | ||
(3,038,288 | ) | ||
Net realized and unrealized gain (loss) | (4,112,151 | ) | |
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | (3,969,122 | ) |
See Notes to Financial Statements.
13
Statement of Changes in Net Assets |
SIX MONTHS ENDED DECEMBER 31, 2018 (UNAUDITED) AND YEAR ENDED JUNE 30, 2018 | ||||||
Increase (Decrease) in Net Assets | December 31, 2018 | June 30, 2018 | ||||
Operations | ||||||
Net investment income (loss) | $ | 143,029 | $ | 653,860 | ||
Net realized gain (loss) | (1,073,863 | ) | 2,919,253 | |||
Change in net unrealized appreciation (depreciation) | (3,038,288 | ) | (2,121,279 | ) | ||
Net increase (decrease) in net assets resulting from operations | (3,969,122 | ) | 1,451,834 | |||
Distributions to Shareholders | ||||||
From earnings: | ||||||
Investor Class | (395,026 | ) | (516,137 | ) | ||
I Class | (139,331 | ) | (127,810 | ) | ||
A Class | (75,200 | ) | (83,615 | ) | ||
C Class | (8,304 | ) | (15,744 | ) | ||
R Class | (10,254 | ) | (11,337 | ) | ||
Decrease in net assets from distributions | (628,115 | ) | (754,643 | ) | ||
Capital Share Transactions | ||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | (2,791,707 | ) | 1,205,674 | |||
Redemption Fees | ||||||
Increase in net assets from redemption fees | — | 1,256 | ||||
Net increase (decrease) in net assets | (7,388,944 | ) | 1,904,121 | |||
Net Assets | ||||||
Beginning of period | 32,113,468 | 30,209,347 | ||||
End of period | $ | 24,724,524 | $ | 32,113,468 |
See Notes to Financial Statements.
14
Notes to Financial Statements |
DECEMBER 31, 2018 (UNAUDITED)
1. Organization
American Century Quantitative Equity 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. International Core Equity 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, A Class, C Class and R Class. The A Class may incur an initial sales charge. The A Class and C Class may be subject to a contingent deferred sales charge.
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.
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.
15
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. Certain countries impose taxes on realized gains on the sale of securities registered in their country. The fund records the foreign tax expense, if any, on an accrual basis. The foreign tax expense on realized gains and unrealized appreciation reduces the net realized gain (loss) on investment transactions and net unrealized appreciation (depreciation) on investments, respectively.
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.
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.
Redemption Fees — Prior to October 9, 2017, the fund may have imposed a 2.00% redemption fee on shares held less than 60 days. The fee was not applicable to all classes. The redemption fee was retained by the fund to help cover transaction costs that long-term investors may bear when the fund sells securities to meet investor redemptions.
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.
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, American Century Investment Management, Inc. (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.
16
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 fee consists of (1) an Investment Category Fee based on the daily net assets of the fund and certain other accounts managed by the investment advisor that are in the same broad investment category as the fund and (2) a Complex Fee based on the assets of all the funds in the American Century Investments family of funds.
The Investment Category Fee range, the Complex Fee range and the effective annual management fee for each class for the period ended December 31, 2018 are as follows:
Investment Category Fee Range | Complex Fee Range | Effective Annual Management Fee | |
Investor Class | 0.8180% to 1.0000% | 0.2500% to 0.3100% | 1.14% |
I Class | 0.0500% to 0.1100% | 0.94% | |
A Class | 0.2500% to 0.3100% | 1.14% | |
C Class | 0.2500% to 0.3100% | 1.14% | |
R Class | 0.2500% to 0.3100% | 1.14% |
Distribution and Service Fees — The Board of Directors has adopted a separate Master Distribution and Individual Shareholder Services Plan for each of the A Class, C Class and R Class (collectively the plans), pursuant to Rule 12b-1 of the 1940 Act. The plans provide that the A Class will pay ACIS an annual distribution and service fee of 0.25%. The plans provide that the C Class will pay ACIS an annual distribution and service fee of 1.00%, of which 0.25% is paid for individual shareholder services and 0.75% is paid for distribution services. The plans provide that the R Class will pay ACIS an annual distribution and service fee of 0.50%. The fees are computed and accrued daily based on each class’s daily net assets and paid monthly in arrears. The fees are used to pay financial intermediaries for distribution and individual shareholder services. Fees incurred under the plans during the period ended December 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 were $34,092 and there were no interfund sales.
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the period ended December 31, 2018 were $12,421,630 and $15,596,640, respectively.
17
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended December 31, 2018 | Year ended June 30, 2018 | |||||||||
Shares | Amount | Shares | Amount | |||||||
Investor Class/Shares Authorized | 40,000,000 | 40,000,000 | ||||||||
Sold | 217,987 | $ | 1,918,459 | 645,731 | $ | 6,175,791 | ||||
Issued in reinvestment of distributions | 49,907 | 388,272 | 53,279 | 506,681 | ||||||
Redeemed | (530,935 | ) | (4,710,227 | ) | (802,902 | ) | (7,685,849 | ) | ||
(263,041 | ) | (2,403,496 | ) | (103,892 | ) | (1,003,377 | ) | |||
I Class/Shares Authorized | 25,000,000 | 25,000,000 | ||||||||
Sold | 138,834 | 1,190,426 | 350,565 | 3,358,023 | ||||||
Issued in reinvestment of distributions | 17,886 | 139,331 | 13,145 | 125,144 | ||||||
Redeemed | (100,591 | ) | (885,151 | ) | (196,352 | ) | (1,911,066 | ) | ||
56,129 | 444,606 | 167,358 | 1,572,101 | |||||||
A Class/Shares Authorized | 20,000,000 | 20,000,000 | ||||||||
Sold | 42,626 | 370,195 | 149,264 | 1,427,760 | ||||||
Issued in reinvestment of distributions | 9,608 | 74,944 | 8,758 | 83,549 | ||||||
Redeemed | (87,204 | ) | (770,014 | ) | (61,528 | ) | (590,835 | ) | ||
(34,970 | ) | (324,875 | ) | 96,494 | 920,474 | |||||
C Class/Shares Authorized | 15,000,000 | 15,000,000 | ||||||||
Sold | 971 | 8,535 | 13,943 | 130,619 | ||||||
Issued in reinvestment of distributions | 924 | 7,199 | 1,529 | 14,542 | ||||||
Redeemed | (55,051 | ) | (473,013 | ) | (34,929 | ) | (336,899 | ) | ||
(53,156 | ) | (457,279 | ) | (19,457 | ) | (191,738 | ) | |||
R Class/Shares Authorized | 15,000,000 | 15,000,000 | ||||||||
Sold | 9,202 | 82,511 | 17,529 | 166,488 | ||||||
Issued in reinvestment of distributions | 1,316 | 10,254 | 1,192 | 11,337 | ||||||
Redeemed | (15,916 | ) | (143,428 | ) | (27,973 | ) | (269,611 | ) | ||
(5,398 | ) | (50,663 | ) | (9,252 | ) | (91,786 | ) | |||
Net increase (decrease) | (300,436 | ) | $ | (2,791,707 | ) | 131,251 | $ | 1,205,674 |
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.
18
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 | $ | 346,963 | $ | 23,509,243 | — | |||
Exchange-Traded Funds | 738,674 | — | — | |||||
Temporary Cash Investments | 39,218 | — | — | |||||
$ | 1,124,855 | $ | 23,509,243 | — |
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. Investing in emerging markets may accentuate these risks.
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 | $ | 27,148,503 | |
Gross tax appreciation of investments | $ | 565,649 | |
Gross tax depreciation of investments | (3,080,054 | ) | |
Net tax appreciation (depreciation) of investments | $ | (2,514,405 | ) |
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 June 30, 2018, the fund had accumulated short-term capital losses of $(69,260), which represent net capital loss carryovers that may be used to offset future realized capital gains for federal income tax purposes. The capital loss carryovers may be carried forward for an unlimited period. Future capital loss carryover utilization in any given year may be subject to Internal Revenue Code limitations.
19
Financial Highlights |
For a Share Outstanding Throughout the Years Ended June 30 (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 | Net Investment Income (Loss) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
Investor Class | |||||||||||||
2018(3) | $9.21 | 0.04 | (1.29) | (1.25) | (0.20) | $7.76 | (13.54)% | 1.15%(4) | 1.01%(4) | 43% | $15,192 | ||
2018 | $9.01 | 0.19 | 0.23 | 0.42 | (0.22) | $9.21 | 4.69% | 1.15% | 1.97% | 99% | $20,459 | ||
2017 | $7.71 | 0.18 | 1.33 | 1.51 | (0.21) | $9.01 | 19.92% | 1.15% | 2.19% | 113% | $20,938 | ||
2016 | $8.89 | 0.16 | (1.18) | (1.02) | (0.16) | $7.71 | (11.53)% | 1.17% | 1.94% | 117% | $19,646 | ||
2015 | $9.68 | 0.24 | (0.75) | (0.51) | (0.28) | $8.89 | (5.11)% | 1.15% | 2.67% | 96% | $22,366 | ||
2014 | $7.77 | 0.26 | 1.76 | 2.02 | (0.11) | $9.68 | 26.15% | 1.15% | 2.61% | 125% | $11,859 | ||
I Class | |||||||||||||
2018(3) | $9.23 | 0.05 | (1.29) | (1.24) | (0.22) | $7.77 | (13.45)% | 0.95%(4) | 1.21%(4) | 43% | $5,280 | ||
2018 | $9.02 | 0.22 | 0.23 | 0.45 | (0.24) | $9.23 | 4.89% | 0.95% | 2.17% | 99% | $5,756 | ||
2017 | $7.72 | 0.20 | 1.33 | 1.53 | (0.23) | $9.02 | 20.26% | 0.95% | 2.39% | 113% | $4,117 | ||
2016 | $8.90 | 0.17 | (1.17) | (1.00) | (0.18) | $7.72 | (11.34)% | 0.97% | 2.14% | 117% | $1,183 | ||
2015 | $9.69 | 0.26 | (0.75) | (0.49) | (0.30) | $8.90 | (4.91)% | 0.95% | 2.87% | 96% | $1,621 | ||
2014 | $7.78 | 0.28 | 1.76 | 2.04 | (0.13) | $9.69 | 26.37% | 0.95% | 2.81% | 125% | $921 | ||
A Class | |||||||||||||
2018(3) | $9.22 | 0.03 | (1.29) | (1.26) | (0.18) | $7.78 | (13.64)% | 1.40%(4) | 0.76%(4) | 43% | $3,331 | ||
2018 | $9.01 | 0.17 | 0.23 | 0.40 | (0.19) | $9.22 | 4.41% | 1.40% | 1.72% | 99% | $4,272 | ||
2017 | $7.71 | 0.15 | 1.34 | 1.49 | (0.19) | $9.01 | 19.74% | 1.40% | 1.94% | 113% | $3,307 | ||
2016 | $8.89 | 0.13 | (1.17) | (1.04) | (0.14) | $7.71 | (11.75)% | 1.42% | 1.69% | 117% | $6,441 | ||
2015 | $9.67 | 0.24 | (0.76) | (0.52) | (0.26) | $8.89 | (5.25)% | 1.40% | 2.42% | 96% | $8,196 | ||
2014 | $7.76 | 0.16 | 1.84 | 2.00 | (0.09) | $9.67 | 25.87% | 1.40% | 2.36% | 125% | $3,164 |
For a Share Outstanding Throughout the Years Ended June 30 (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 | Net Investment Income (Loss) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
C Class | |||||||||||||
2018(3) | $9.16 | —(5) | (1.28) | (1.28) | (0.12) | $7.76 | (13.95)% | 2.15%(4) | 0.01%(4) | 43% | $423 | ||
2018 | $8.96 | 0.08 | 0.24 | 0.32 | (0.12) | $9.16 | 3.54% | 2.15% | 0.97% | 99% | $987 | ||
2017 | $7.66 | 0.10 | 1.33 | 1.43 | (0.13) | $8.96 | 18.96% | 2.15% | 1.19% | 113% | $1,139 | ||
2016 | $8.84 | 0.08 | (1.18) | (1.10) | (0.08) | $7.66 | (12.48)% | 2.17% | 0.94% | 117% | $1,134 | ||
2015 | $9.62 | 0.13 | (0.72) | (0.59) | (0.19) | $8.84 | (6.02)% | 2.15% | 1.67% | 96% | $1,141 | ||
2014 | $7.72 | 0.14 | 1.78 | 1.92 | (0.02) | $9.62 | 24.92% | 2.15% | 1.61% | 125% | $1,081 | ||
R Class | |||||||||||||
2018(3) | $9.19 | 0.02 | (1.29) | (1.27) | (0.16) | $7.76 | (13.79)% | 1.65%(4) | 0.51%(4) | 43% | $498 | ||
2018 | $8.98 | 0.13 | 0.25 | 0.38 | (0.17) | $9.19 | 4.17% | 1.65% | 1.47% | 99% | $640 | ||
2017 | $7.69 | 0.14 | 1.32 | 1.46 | (0.17) | $8.98 | 19.36% | 1.65% | 1.69% | 113% | $709 | ||
2016 | $8.86 | 0.12 | (1.17) | (1.05) | (0.12) | $7.69 | (11.90)% | 1.67% | 1.44% | 117% | $583 | ||
2015 | $9.65 | 0.16 | (0.72) | (0.56) | (0.23) | $8.86 | (5.61)% | 1.65% | 2.17% | 96% | $538 | ||
2014 | $7.74 | 0.19 | 1.79 | 1.98 | (0.07) | $9.65 | 25.62% | 1.65% | 2.11% | 125% | $1,242 |
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 and do not reflect applicable sales charges, if any. Total returns for periods less than one year are not annualized. |
(3) | Six months ended December 31, 2018 (unaudited). |
(4) | Annualized. |
(5) | Per share amount was less than $0.005. |
See Notes to Financial Statements.
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
Descriptions of the principles and policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund are available without charge, upon request, by calling 1-800-345-2021 or visiting the "About Us" page of American Century Investments’ website at americancentury.com. A description of the policies is also available 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. 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.
22
Notes |
23
Notes |
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 Quantitative Equity 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. | ||
©2019 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-91450 1902 |
Semiannual Report | |
December 31, 2018 | |
Multi-Asset Real Return Fund | |
Investor Class (ASIOX) | |
I Class (ASINX) | |
A Class (ASIDX) | |
C Class (ASIZX) | |
R Class (ASIUX) | |
R5 Class (AMRUX) |
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the fund’s shareholder reports like this one will no longer be sent by mail, unless you specifically request paper copies of the reports from the fund or from your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the fund or your financial intermediary electronically by calling or sending an email request to your appropriate contacts as listed on the back cover of this report.
You may elect to receive all future reports in paper free of charge. You can inform the fund or your financial intermediary that you wish to continue receiving paper copies of your shareholder reports by calling or sending an email request to your appropriate contacts as listed on the back cover of this report. Your election to receive reports in paper will apply to all funds held with the fund complex/your financial intermediary.
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 period ended December 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, please visit our website, americancentury.com.
Risk-On/Risk-Off Rotation Highlights Heightened Volatility
The six-month reporting period began on an upbeat note for stock investors. Against a backdrop of robust economic and earnings data and federal tax and regulatory reform, U.S. stocks soared. The S&P 500 Index gained nearly 8% in the first three months of the period. Outside the U.S., stocks also advanced, but the gains were more subdued amid signs of slowing growth. Meanwhile, favorable U.S. economic data and continued Federal Reserve (Fed) tightening helped push U.S. Treasury yields higher. This pressured interest rate-sensitive assets, including longer-maturity Treasuries, gold, utilities stocks, and REITs (real estate investment trusts), and they generally underperformed U.S. stocks.
In the second half of the reporting period, investor sentiment and asset-class performance took a drastic turn. Investors exited stocks on mounting concerns about slowing global economic and earnings growth and Fed policy. Along with its December interest rate increase, the Fed delivered a surprisingly bullish outlook. Investors feared the Fed’s plans for two rate hikes in 2019 were too aggressive, further fueling the steep sell-off among riskier assets. The S&P 500 Index declined more than 13% in the fourth quarter. For the entire six-month period, U.S. stocks fell 6.85%. Losses among non-U.S. stocks were even steeper.
The risk-off climate in the second half of the period sparked a flight to quality. Treasury yields plunged in the fourth quarter, triggering a year-end rally in Treasuries and other perceived safe-haven assets. Overall, Treasuries were up for the six-month period and significantly outperformed stocks and other riskier assets.
As recent performance trends indicate, market volatility remains a formidable force. But volatile markets often produce the most compelling investment opportunities. We believe this scenario underscores the importance of 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 |
DECEMBER 31, 2018 | |
Types of Investments in Portfolio | % of net assets |
Domestic Common Stocks | 31.5% |
Foreign Common Stocks* | 10.9% |
Collateralized Mortgage Obligations | 15.7% |
Corporate Bonds | 9.3% |
Commercial Mortgage-Backed Securities | 4.1% |
Asset-Backed Securities | 4.1% |
Collateralized Loan Obligations | 3.5% |
Exchange-Traded Funds | 2.7% |
Sovereign Governments and Agencies | 0.8% |
U.S. Treasury Securities | 0.7% |
Temporary Cash Investments | 17.1% |
Other Assets and Liabilities | (0.4)% |
*Includes depositary shares, dual listed securities and foreign ordinary shares.
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 July 1, 2018 to December 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 7/1/18 | Ending Account Value 12/31/18 | Expenses Paid During Period(1) 7/1/18 - 12/31/18 | Annualized Expense Ratio(1) | |
Actual | ||||
Investor Class | $1,000 | $947.20 | $4.32 | 0.88% |
I Class | $1,000 | $948.90 | $3.34 | 0.68% |
A Class | $1,000 | $947.10 | $5.55 | 1.13% |
C Class | $1,000 | $943.00 | $9.21 | 1.88% |
R Class | $1,000 | $944.80 | $6.76 | 1.38% |
R5 Class | $1,000 | $947.90 | $3.34 | 0.68% |
Hypothetical | ||||
Investor Class | $1,000 | $1,020.77 | $4.48 | 0.88% |
I Class | $1,000 | $1,021.78 | $3.47 | 0.68% |
A Class | $1,000 | $1,019.51 | $5.75 | 1.13% |
C Class | $1,000 | $1,015.73 | $9.55 | 1.88% |
R Class | $1,000 | $1,018.25 | $7.02 | 1.38% |
R5 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 |
DECEMBER 31, 2018 (UNAUDITED)
Shares/ Principal Amount | Value | |||||
COMMON STOCKS — 42.4% | ||||||
Aerospace and Defense — 0.6% | ||||||
Boeing Co. (The) | 106 | $ | 34,185 | |||
Harris Corp. | 258 | 34,740 | ||||
68,925 | ||||||
Airlines — 0.2% | ||||||
United Continental Holdings, Inc.(1) | 363 | 30,394 | ||||
Banks — 0.3% | ||||||
JPMorgan Chase & Co. | 316 | 30,848 | ||||
Beverages — 0.6% | ||||||
Coca-Cola Co. (The) | 800 | 37,880 | ||||
PepsiCo, Inc. | 337 | 37,232 | ||||
75,112 | ||||||
Biotechnology — 1.0% | ||||||
AbbVie, Inc. | 373 | 34,387 | ||||
Alexion Pharmaceuticals, Inc.(1) | 281 | 27,358 | ||||
Biogen, Inc.(1) | 95 | 28,587 | ||||
Vertex Pharmaceuticals, Inc.(1) | 188 | 31,154 | ||||
121,486 | ||||||
Capital Markets — 0.6% | ||||||
Brookfield Asset Management, Inc., Class A | 309 | 11,842 | ||||
Intercontinental Exchange, Inc. | 439 | 33,070 | ||||
Nasdaq, Inc. | 428 | 34,912 | ||||
79,824 | ||||||
Chemicals — 0.6% | ||||||
Celanese Corp. | 209 | 18,804 | ||||
CF Industries Holdings, Inc. | 264 | 11,487 | ||||
Linde AG | 50 | 11,099 | ||||
LyondellBasell Industries NV, Class A | 177 | 14,719 | ||||
Mosaic Co. (The) | 363 | 10,603 | ||||
Nutrien Ltd. | 275 | 12,925 | ||||
79,637 | ||||||
Communications Equipment — 0.2% | ||||||
Cisco Systems, Inc. | 653 | 28,294 | ||||
Construction and Engineering — 0.3% | ||||||
Quanta Services, Inc. | 1,036 | 31,184 | ||||
Containers and Packaging — 0.2% | ||||||
Berry Global Group, Inc.(1) | 223 | 10,599 | ||||
Sonoco Products Co. | 197 | 10,467 | ||||
21,066 | ||||||
Diversified Telecommunication Services — 0.3% | ||||||
Verizon Communications, Inc. | 685 | 38,511 |
6
Shares/ Principal Amount | Value | |||||
Electric Utilities — 1.0% | ||||||
FirstEnergy Corp. | 1,059 | $ | 39,766 | |||
NextEra Energy, Inc. | 232 | 40,326 | ||||
Portland General Electric Co. | 834 | 38,239 | ||||
118,331 | ||||||
Electronic Equipment, Instruments and Components — 0.2% | ||||||
Keysight Technologies, Inc.(1) | 486 | 30,171 | ||||
Equity Real Estate Investment Trusts (REITs) — 12.6% | ||||||
Advance Residence Investment Corp. | 7 | 19,342 | ||||
Agree Realty Corp. | 563 | 33,285 | ||||
Alexandria Real Estate Equities, Inc. | 513 | 59,118 | ||||
American Campus Communities, Inc. | 1,053 | 43,584 | ||||
AvalonBay Communities, Inc. | 255 | 44,383 | ||||
Boardwalk Real Estate Investment Trust | 400 | 11,078 | ||||
Boston Properties, Inc. | 374 | 42,094 | ||||
Camden Property Trust | 686 | 60,402 | ||||
Canadian Apartment Properties REIT | 528 | 17,133 | ||||
CapitaLand Commercial Trust | 8,000 | 10,272 | ||||
Charter Hall Group | 6,872 | 35,915 | ||||
Digital Realty Trust, Inc. | 501 | 53,382 | ||||
Duke Realty Corp. | 923 | 23,906 | ||||
Extra Space Storage, Inc. | 431 | 38,997 | ||||
Gaming and Leisure Properties, Inc. | 2,224 | 71,857 | ||||
Gecina SA | 401 | 51,917 | ||||
GLP J-Reit | 35 | 35,752 | ||||
Goodman Group | 6,962 | 52,126 | ||||
HCP, Inc. | 2,706 | 75,579 | ||||
Inmobiliaria Colonial Socimi SA | 2,765 | 25,772 | ||||
Invitation Homes, Inc. | 850 | 17,068 | ||||
Japan Hotel REIT Investment Corp. | 38 | 27,181 | ||||
Link REIT | 6,500 | 65,826 | ||||
Mapletree Commercial Trust | 12,700 | 15,375 | ||||
Northview Apartment Real Estate Investment Trust | 723 | 12,964 | ||||
Orix JREIT, Inc. | 38 | 63,199 | ||||
Prologis, Inc. | 1,250 | 73,400 | ||||
Regency Centers Corp. | 583 | 34,210 | ||||
Rexford Industrial Realty, Inc. | 866 | 25,521 | ||||
Safestore Holdings plc | 2,736 | 17,663 | ||||
SBA Communications Corp.(1) | 87 | 14,084 | ||||
Segro plc | 5,613 | 42,110 | ||||
Simon Property Group, Inc. | 626 | 105,162 | ||||
STORE Capital Corp. | 1,282 | 36,293 | ||||
Sun Communities, Inc. | 677 | 68,858 | ||||
UDR, Inc. | 1,232 | 48,812 | ||||
UNITE Group plc (The) | 1,531 | 15,728 | ||||
Welltower, Inc. | 1,009 | 70,035 | ||||
1,559,383 |
7
Shares/ Principal Amount | Value | |||||
Food and Staples Retailing — 0.3% | ||||||
Walgreens Boots Alliance, Inc. | 473 | $ | 32,320 | |||
Food Products — 0.4% | ||||||
Archer-Daniels-Midland Co. | 880 | 36,053 | ||||
Salmar ASA | 204 | 10,090 | ||||
46,143 | ||||||
Health Care Equipment and Supplies — 1.4% | ||||||
Abbott Laboratories | 425 | 30,740 | ||||
Danaher Corp. | 340 | 35,061 | ||||
Intuitive Surgical, Inc.(1) | 66 | 31,609 | ||||
Masimo Corp.(1) | 349 | 37,472 | ||||
Stryker Corp. | 207 | 32,447 | ||||
167,329 | ||||||
Health Care Providers and Services — 0.9% | ||||||
Anthem, Inc. | 109 | 28,627 | ||||
Encompass Health Corp. | 445 | 27,456 | ||||
HCA Healthcare, Inc. | 242 | 30,117 | ||||
UnitedHealth Group, Inc. | 113 | 28,151 | ||||
114,351 | ||||||
Health Care Technology — 0.2% | ||||||
Veeva Systems, Inc., Class A(1) | 336 | 30,012 | ||||
Hotels, Restaurants and Leisure — 0.6% | ||||||
Darden Restaurants, Inc. | 373 | 37,248 | ||||
McDonald's Corp. | 197 | 34,981 | ||||
72,229 | ||||||
Household Products — 0.6% | ||||||
Church & Dwight Co., Inc. | 556 | 36,563 | ||||
Procter & Gamble Co. (The) | 425 | 39,066 | ||||
75,629 | ||||||
Industrial Conglomerates — 0.6% | ||||||
Honeywell International, Inc. | 248 | 32,766 | ||||
Roper Technologies, Inc. | 138 | 36,779 | ||||
69,545 | ||||||
Interactive Media and Services — 0.2% | ||||||
Alphabet, Inc., Class A(1) | 26 | 27,169 | ||||
Internet and Direct Marketing Retail — 0.7% | ||||||
Amazon.com, Inc.(1) | 20 | 30,039 | ||||
Booking Holdings, Inc.(1) | 16 | 27,559 | ||||
Expedia Group, Inc. | 250 | 28,163 | ||||
85,761 | ||||||
IT Services — 2.1% | ||||||
Akamai Technologies, Inc.(1) | 424 | 25,898 | ||||
Automatic Data Processing, Inc. | 232 | 30,420 | ||||
Fidelity National Information Services, Inc. | 304 | 31,175 | ||||
GDS Holdings Ltd. ADR(1) | 761 | 17,571 | ||||
InterXion Holding NV(1) | 506 | 27,405 | ||||
MasterCard, Inc., Class A | 166 | 31,316 |
8
Shares/ Principal Amount | Value | |||||
NEXTDC Ltd.(1) | 2,586 | $ | 11,129 | |||
PayPal Holdings, Inc.(1) | 319 | 26,825 | ||||
Total System Services, Inc. | 353 | 28,695 | ||||
Visa, Inc., Class A | 220 | 29,027 | ||||
259,461 | ||||||
Life Sciences Tools and Services — 1.2% | ||||||
Agilent Technologies, Inc. | 427 | 28,805 | ||||
ICON plc(1) | 222 | 28,685 | ||||
Illumina, Inc.(1) | 100 | 29,993 | ||||
PRA Health Sciences, Inc.(1) | 359 | 33,014 | ||||
Thermo Fisher Scientific, Inc. | 147 | 32,897 | ||||
153,394 | ||||||
Machinery — 0.7% | ||||||
Caterpillar, Inc. | 241 | 30,624 | ||||
Crane Co. | 406 | 29,305 | ||||
Ingersoll-Rand plc | 329 | 30,015 | ||||
89,944 | ||||||
Media — 0.5% | ||||||
Altice USA, Inc., Class A | 1,908 | 31,520 | ||||
Comcast Corp., Class A | 927 | 31,564 | ||||
63,084 | ||||||
Metals and Mining — 0.6% | ||||||
Anglo American plc | 589 | 13,121 | ||||
BHP Group Ltd. | 596 | 14,369 | ||||
Glencore plc(1) | 3,213 | 11,932 | ||||
Nucor Corp. | 197 | 10,207 | ||||
Rio Tinto plc ADR | 278 | 13,477 | ||||
Vale SA ADR | 856 | 11,291 | ||||
74,397 | ||||||
Mortgage Real Estate Investment Trusts (REITs) — 0.2% | ||||||
Blackstone Mortgage Trust, Inc., Class A | 334 | 10,641 | ||||
Starwood Property Trust, Inc. | 534 | 10,525 | ||||
21,166 | ||||||
Multi-Utilities — 0.6% | ||||||
Brookfield Infrastructure Partners LP | 869 | 30,007 | ||||
CMS Energy Corp. | 788 | 39,124 | ||||
69,131 | ||||||
Oil, Gas and Consumable Fuels — 2.0% | ||||||
BP plc | 2,263 | 14,305 | ||||
Cheniere Energy Partners LP | 303 | 10,938 | ||||
Chevron Corp. | 156 | 16,971 | ||||
Energy Transfer LP | 802 | 10,594 | ||||
Eni SpA | 1,139 | 17,937 | ||||
Enterprise Products Partners LP | 721 | 17,729 | ||||
Equinor ASA | 493 | 10,514 | ||||
Exxon Mobil Corp. | 254 | 17,320 | ||||
Kinder Morgan, Inc. | 1,162 | 17,872 |
9
Shares/ Principal Amount | Value | |||||
Lundin Petroleum AB | 422 | $ | 10,551 | |||
Magellan Midstream Partners LP | 186 | 10,613 | ||||
Marathon Petroleum Corp. | 178 | 10,504 | ||||
MPLX LP | 605 | 18,332 | ||||
Neste Oyj | 211 | 16,291 | ||||
Phillips 66 Partners LP | 411 | 17,307 | ||||
Plains GP Holdings LP, Class A(1) | 520 | 10,452 | ||||
TOTAL SA | 229 | 12,117 | ||||
Williams Cos., Inc. (The) | 472 | 10,408 | ||||
250,755 | ||||||
Pharmaceuticals — 1.6% | ||||||
Eli Lilly & Co. | 267 | 30,897 | ||||
Merck & Co., Inc. | 390 | 29,800 | ||||
Novartis AG | 441 | 37,771 | ||||
Pfizer, Inc. | 679 | 29,638 | ||||
Sanofi | 432 | 37,449 | ||||
Zoetis, Inc. | 344 | 29,426 | ||||
194,981 | ||||||
Real Estate Management and Development — 3.8% | ||||||
ADO Properties SA | 252 | 13,176 | ||||
Ayala Land, Inc. | 23,600 | 18,263 | ||||
CapitaLand Ltd. | 11,300 | 25,785 | ||||
China Overseas Land & Investment Ltd. | 12,000 | 41,223 | ||||
Ciputra Development Tbk PT | 72,500 | 5,091 | ||||
CK Asset Holdings Ltd. | 3,500 | 25,611 | ||||
Corp. Inmobiliaria Vesta SAB de CV | 6,690 | 8,998 | ||||
Iguatemi Empresa de Shopping Centers SA | 1,800 | 19,295 | ||||
Longfor Group Holdings Ltd. | 11,500 | 34,366 | ||||
Mitsui Fudosan Co. Ltd. | 2,100 | 46,530 | ||||
Shimao Property Holdings Ltd. | 12,500 | 33,363 | ||||
Shurgard Self Storage SA(1) | 454 | 12,614 | ||||
Sino Land Co. Ltd. | 12,000 | 20,566 | ||||
Sumitomo Realty & Development Co. Ltd. | 900 | 32,871 | ||||
Sun Hung Kai Properties Ltd. | 2,000 | 28,504 | ||||
Swire Properties Ltd. | 6,600 | 23,179 | ||||
VGP NV | 144 | 9,800 | ||||
Vonovia SE | 1,585 | 71,937 | ||||
471,172 | ||||||
Road and Rail — 0.5% | ||||||
CSX Corp. | 511 | 31,748 | ||||
Union Pacific Corp. | 234 | 32,346 | ||||
64,094 | ||||||
Semiconductors and Semiconductor Equipment — 1.0% | ||||||
Broadcom, Inc. | 123 | 31,276 | ||||
Intel Corp. | 568 | 26,656 | ||||
Mellanox Technologies Ltd.(1) | 392 | 36,213 |
10
Shares/ Principal Amount | Value | |||||
Xilinx, Inc. | 304 | $ | 25,892 | |||
120,037 | ||||||
Software — 2.4% | ||||||
Adobe, Inc.(1) | 119 | 26,923 | ||||
ANSYS, Inc.(1) | 183 | 26,158 | ||||
Citrix Systems, Inc. | 294 | 30,123 | ||||
Fortinet, Inc.(1) | 500 | 35,215 | ||||
Microsoft Corp. | 304 | 30,877 | ||||
Palo Alto Networks, Inc.(1) | 197 | 37,105 | ||||
salesforce.com, Inc.(1) | 204 | 27,942 | ||||
ServiceNow, Inc.(1) | 153 | 27,242 | ||||
Splunk, Inc.(1) | 265 | 27,785 | ||||
VMware, Inc., Class A | 215 | 29,483 | ||||
298,853 | ||||||
Specialty Retail — 0.3% | ||||||
Tractor Supply Co. | 366 | 30,539 | ||||
Technology Hardware, Storage and Peripherals — 0.3% | ||||||
NetApp, Inc. | 569 | 33,952 | ||||
TOTAL COMMON STOCKS (Cost $5,177,573) | 5,228,614 | |||||
COLLATERALIZED MORTGAGE OBLIGATIONS — 15.7% | ||||||
Private Sponsor Collateralized Mortgage Obligations — 7.1% | ||||||
ABN Amro Mortgage Corp., Series 2003-6, Class 1A4, 5.50%, 5/25/33 | $ | 2,872 | 2,978 | |||
Bear Stearns Adjustable Rate Mortgage Trust, Series 2004-12, Class 2A1, VRN, 4.07%, 2/25/35 | 30,541 | 30,864 | ||||
Citigroup Mortgage Loan Trust, Inc., Series 2004-UST1, Class A4, VRN, 4.26%, 8/25/34 | 14,430 | 14,033 | ||||
Citigroup Mortgage Loan Trust, Inc., Series 2005-4, Class A, VRN, 4.47%, 8/25/35 | 22,651 | 22,904 | ||||
Countrywide Home Loan Mortgage Pass-Through Trust, Series 2004-4, Class A19, 5.25%, 5/25/34 | 26,642 | 26,843 | ||||
Countrywide Home Loan Mortgage Pass-Through Trust, Series 2004-5, Class 2A4, 5.50%, 5/25/34 | 4,343 | 4,358 | ||||
First Horizon Mortgage Pass-Through Trust, Series 2005-AR3, Class 4A1, VRN, 4.39%, 8/25/35 | 15,246 | 15,294 | ||||
GSR Mortgage Loan Trust, Series 2005-AR6, Class 2A1, VRN, 4.30%, 9/25/35 | 25,568 | 26,071 | ||||
JPMorgan Mortgage Trust, Series 2005-A6, Class 7A1, VRN, 4.37%, 8/25/35 | 25,771 | 25,220 | ||||
JPMorgan Mortgage Trust, Series 2006-A3, Class 7A1, VRN, 4.13%, 4/25/35 | 6,085 | 6,169 | ||||
JPMorgan Mortgage Trust, Series 2016-1, Class A7 SEQ, VRN, 3.50%, 5/25/46(2) | 100,000 | 98,245 | ||||
Thornburg Mortgage Securities Trust, Series 2004-3, Class A, VRN, 3.25%, (1-month LIBOR plus 0.74%), 9/25/44 | 9,027 | 8,878 | ||||
Thornburg Mortgage Securities Trust, Series 2006-4, Class A2B, VRN, 4.13%, 7/25/36 | 68,608 | 66,539 | ||||
WaMu Mortgage Pass-Through Certificates, Series 2003-S11, Class 3A5, 5.95%, 11/25/33 | 5,177 | 5,191 | ||||
Wells Fargo Mortgage-Backed Securities Trust, Series 2005-17, Class 2A1, 5.50%, 1/25/36 | 61,157 | 61,040 |
11
Shares/ Principal Amount | Value | |||||
Wells Fargo Mortgage-Backed Securities Trust, Series 2005-18, Class 1A1, 5.50%, 1/25/36 | $ | 47,908 | $ | 47,366 | ||
Wells Fargo Mortgage-Backed Securities Trust, Series 2005-AR16, Class 3A2, VRN, 4.42%, 3/25/35 | 19,645 | 19,941 | ||||
Wells Fargo Mortgage-Backed Securities Trust, Series 2005-AR7, Class 1A1, VRN, 4.37%, 5/25/35 | 9,407 | 9,510 | ||||
Wells Fargo Mortgage-Backed Securities Trust, Series 2006-10, Class A4 SEQ, 6.00%, 8/25/36 | 22,430 | 22,181 | ||||
Wells Fargo Mortgage-Backed Securities Trust, Series 2006-4, Class 2A1, 6.00%, 4/25/36 | 27,478 | 26,932 | ||||
Wells Fargo Mortgage-Backed Securities Trust, Series 2006-9, Class 1A9 SEQ, 6.00%, 8/25/36 | 9,989 | 9,827 | ||||
Wells Fargo Mortgage-Backed Securities Trust, Series 2006-AR1, Class 2A5 SEQ, VRN, 3.97%, 3/25/36 | 31,099 | 30,431 | ||||
Wells Fargo Mortgage-Backed Securities Trust, Series 2006-AR10, Class 5A6 SEQ, VRN, 4.43%, 7/25/36 | 131,157 | 131,107 | ||||
Wells Fargo Mortgage-Backed Securities Trust, Series 2006-AR12, Class 1A1, VRN, 4.71%, 9/25/36 | 55,891 | 56,250 | ||||
Wells Fargo Mortgage-Backed Securities Trust, Series 2006-AR15, Class A1, VRN, 4.73%, 10/25/36 | 15,029 | 14,822 | ||||
Wells Fargo Mortgage-Backed Securities Trust, Series 2007-11, Class A3 SEQ, 6.00%, 8/25/37 | 12,880 | 12,555 | ||||
Wells Fargo Mortgage-Backed Securities Trust, Series 2007-13, Class A1, 6.00%, 9/25/37 | 15,179 | 15,025 | ||||
Wells Fargo Mortgage-Backed Securities Trust, Series 2007-14, Class 2A2, 5.50%, 10/25/22 | 2,349 | 2,380 | ||||
Wells Fargo Mortgage-Backed Securities Trust, Series 2007-16, Class 1A1, 6.00%, 12/28/37 | 3,628 | 3,596 | ||||
Wells Fargo Mortgage-Backed Securities Trust, Series 2007-8, Class 1A5 SEQ, 6.00%, 7/25/37 | 51,176 | 50,420 | ||||
Wells Fargo Mortgage-Backed Securities Trust, Series 2007-AR10, Class 1A1, VRN, 4.91%, 1/25/38 | 3,119 | 2,991 | ||||
WinWater Mortgage Loan Trust, Series 2014-1, Class A4 SEQ, VRN, 3.50%, 6/20/44(2) | 8,347 | 8,348 | ||||
878,309 | ||||||
U.S. Government Agency Collateralized Mortgage Obligations — 8.6% | ||||||
FHLMC, Series 2018-DNA1, Class M1, VRN, 2.96%, (1-month LIBOR plus 0.45%), 7/25/30 | 278,791 | 277,519 | ||||
FNMA, Series 2017-C07, Class 1M2, VRN, 4.91%, (1-month LIBOR plus 2.40%), 5/25/30 | 300,000 | 302,587 | ||||
FNMA, Series 2018-C01, Class 1M1, VRN, 3.11%, (1-month LIBOR plus 0.60%), 7/25/30 | 278,737 | 277,859 | ||||
FNMA, Series 2018-C02, Class 2M1, VRN, 3.16%, (1-month LIBOR plus 0.65%), 8/25/30 | 200,289 | 200,112 | ||||
1,058,077 | ||||||
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (Cost $1,935,433) | 1,936,386 | |||||
CORPORATE BONDS — 9.3% | ||||||
Aerospace and Defense — 0.1% | ||||||
United Technologies Corp., 3.75%, 11/1/46 | 10,000 | 8,476 | ||||
Banks — 0.2% | ||||||
Bank of America Corp., MTN, 3.25%, 10/21/27 | 15,000 | 13,887 | ||||
Citigroup, Inc., 4.45%, 9/29/27 | 10,000 | 9,653 | ||||
23,540 |
12
Shares/ Principal Amount | Value | |||||
Beverages — 0.1% | ||||||
Anheuser-Busch Cos. LLC / Anheuser-Busch InBev Worldwide, Inc., 3.65%, 2/1/26(2) | $ | 10,000 | $ | 9,461 | ||
Chemicals — 0.6% | ||||||
Ashland LLC, 4.75%, 8/15/22 | 75,000 | 74,156 | ||||
Commercial Services and Supplies — 0.3% | ||||||
Nielsen Finance LLC / Nielsen Finance Co., 5.00%, 4/15/22(2) | 40,000 | 38,400 | ||||
Consumer Finance — 0.7% | ||||||
CIT Group, Inc., 5.00%, 8/15/22 | 40,000 | 39,550 | ||||
GLP Capital LP / GLP Financing II, Inc., 4.875%, 11/1/20 | 50,000 | 50,550 | ||||
90,100 | ||||||
Containers and Packaging — 0.8% | ||||||
Berry Global, Inc., 5.50%, 5/15/22 | 50,000 | 49,937 | ||||
Reynolds Group Issuer, Inc. / Reynolds Group Issuer LLC / Reynolds Group Issuer Lu, 5.125%, 7/15/23(2) | 50,000 | 47,688 | ||||
97,625 | ||||||
Diversified Financial Services — 0.2% | ||||||
Morgan Stanley, MTN, 5.625%, 9/23/19 | 20,000 | 20,300 | ||||
Equity Real Estate Investment Trusts (REITs) — 0.6% | ||||||
Crown Castle International Corp., 5.25%, 1/15/23 | 75,000 | 77,948 | ||||
Gas Utilities — 0.2% | ||||||
Andeavor Logistics LP / Tesoro Logistics Finance Corp., 6.25%, 10/15/22 | 19,000 | 19,428 | ||||
MPLX LP, 4.875%, 6/1/25 | 10,000 | 10,096 | ||||
29,524 | ||||||
Health Care Providers and Services — 1.4% | ||||||
DaVita, Inc., 5.75%, 8/15/22 | 50,000 | 49,875 | ||||
Fresenius Medical Care US Finance II, Inc., 5.625%, 7/31/19(2) | 70,000 | 70,799 | ||||
HCA, Inc., 4.25%, 10/15/19 | 50,000 | 49,969 | ||||
170,643 | ||||||
Hotels, Restaurants and Leisure — 0.7% | ||||||
1011778 BC ULC / New Red Finance, Inc., 5.00%, 10/15/25(2) | 40,000 | 36,900 | ||||
Boyd Gaming Corp., 6.875%, 5/15/23 | 50,000 | 50,688 | ||||
87,588 | ||||||
Media — 0.8% | ||||||
CCO Holdings LLC / CCO Holdings Capital Corp., 5.25%, 9/30/22 | 40,000 | 39,725 | ||||
CCO Holdings LLC / CCO Holdings Capital Corp., 5.125%, 5/1/27(2) | 40,000 | 37,356 | ||||
Charter Communications Operating LLC / Charter Communications Operating Capital, 6.48%, 10/23/45 | 10,000 | 10,354 | ||||
Time Warner Cable LLC, 4.50%, 9/15/42 | 10,000 | 8,075 | ||||
95,510 | ||||||
Metals and Mining — 0.4% | ||||||
Freeport-McMoRan, Inc., 3.55%, 3/1/22 | 50,000 | 47,438 | ||||
Multi-Utilities — 0.4% | ||||||
Duke Energy Progress LLC, 3.70%, 10/15/46 | 10,000 | 9,069 | ||||
Exelon Generation Co. LLC, 5.60%, 6/15/42 | 5,000 | 4,914 | ||||
IPALCO Enterprises, Inc., 3.45%, 7/15/20 | 30,000 | 29,979 | ||||
43,962 |
13
Shares/ Principal Amount | Value | |||||
Oil, Gas and Consumable Fuels — 1.8% | ||||||
Antero Resources Corp., 5.125%, 12/1/22 | $ | 50,000 | $ | 47,187 | ||
Carrizo Oil & Gas, Inc., 6.25%, 4/15/23 | 50,000 | 46,500 | ||||
Newfield Exploration Co., 5.75%, 1/30/22 | 40,000 | 40,500 | ||||
Oasis Petroleum, Inc., 6.875%, 3/15/22 | 50,000 | 47,250 | ||||
Suburban Propane Partners LP / Suburban Energy Finance Corp., 5.50%, 6/1/24 | 50,000 | 46,750 | ||||
228,187 | ||||||
TOTAL CORPORATE BONDS (Cost $1,187,140) | 1,142,858 | |||||
COMMERCIAL MORTGAGE-BACKED SECURITIES — 4.1% | ||||||
Commercial Mortgage Pass-Through Certificates, Series 2014-CR15, Class B, VRN, 4.67%, 2/10/47 | 50,000 | 52,620 | ||||
Commercial Mortgage Trust, Series 2016-CD1, Class AM, 2.93%, 8/10/49 | 25,000 | 23,598 | ||||
Commercial Mortgage Trust, Series 2016-CD2, Class A4 SEQ, VRN, 3.53%, 11/10/49 | 50,000 | 49,897 | ||||
Core Industrial Trust, Series 2015-CALW, Class B, 3.25%, 2/10/34(2) | 50,000 | 49,442 | ||||
Core Industrial Trust, Series 2015-TEXW, Class B, 3.33%, 2/10/34(2) | 50,000 | 49,554 | ||||
GS Mortgage Securities Trust, Series 2016-GS2, Class B, VRN, 3.76%, 5/10/49 | 75,000 | 74,120 | ||||
Hudson Yards Mortgage Trust, Series 2016-10HY, Class B, VRN, 2.98%, 8/10/38(2) | 50,000 | 47,412 | ||||
JPMorgan Chase Commercial Mortgage Securities Trust, Series 2016-JP2, Class B, 3.46%, 8/15/49 | 50,000 | 47,624 | ||||
JPMorgan Chase Commercial Mortgage Securities Trust, Series 2016-JP3, Class AS, 3.14%, 8/15/49 | 50,000 | 47,268 | ||||
Morgan Stanley Capital I Trust, Series 2016-UB11, Class A4 SEQ, 2.78%, 8/15/49 | 75,000 | 71,186 | ||||
TOTAL COMMERCIAL MORTGAGE-BACKED SECURITIES (Cost $545,581) | 512,721 | |||||
ASSET-BACKED SECURITIES — 4.1% | ||||||
Colony Starwood Homes, Series 2016-2A, Class A, VRN, 3.71%, (1-month LIBOR plus 1.25%), 12/17/33(2) | 35,513 | 35,613 | ||||
Goodgreen, Series 2018-1A, Class A, VRN, 3.93%, 10/15/53(2) | 87,350 | 88,977 | ||||
Hilton Grand Vacations Trust, Series 2014-AA, Class A SEQ, 1.77%, 11/25/26(2) | 15,737 | 15,489 | ||||
Invitation Homes Trust, Series 2018-SFR2, Class C, VRN, 3.74%, (1-month LIBOR plus 1.28%), 6/17/37(2) | 100,000 | 99,320 | ||||
MVW Owner Trust, Series 2014-1A, Class B, 2.70%, 9/22/31(2) | 54,355 | 53,231 | ||||
MVW Owner Trust, Series 2016-1A, Class A SEQ, 2.25%, 12/20/33(2) | 10,846 | 10,582 | ||||
MVW Owner Trust, Series 2017-1A, Class B, 2.75%, 12/20/34(2) | 35,677 | 34,965 | ||||
Progress Residential Trust, Series 2016-SFR2, Class A SEQ, VRN, 3.86%, (1-month LIBOR plus 1.40%), 1/17/34(2) | 24,975 | 25,024 | ||||
Progress Residential Trust, Series 2018-SFR3, Class C, 4.18%, 10/17/35(2) | 50,000 | 50,577 | ||||
Sierra Timeshare Receivables Funding LLC, Series 2015-1A, Class A SEQ, 2.40%, 3/22/32(2) | 14,225 | 14,141 | ||||
Sierra Timeshare Receivables Funding LLC, Series 2015-2A, Class A SEQ, 2.43%, 6/20/32(2) | 16,377 | 16,148 | ||||
Sierra Timeshare Receivables Funding LLC, Series 2016-2A, Class A SEQ, 2.33%, 7/20/33(2) | 12,783 | 12,437 |
14
Shares/ Principal Amount | Value | |||||
Sierra Timeshare Receivables Funding LLC, Series 2018-3A, Class C, 4.17%, 9/20/35(2) | $ | 45,155 | $ | 45,916 | ||
TOTAL ASSET-BACKED SECURITIES (Cost $503,172) | 502,420 | |||||
COLLATERALIZED LOAN OBLIGATIONS — 3.5% | ||||||
Bean Creek CLO Ltd., Series 2015-1A, Class BR, VRN, 3.92%, (3-month LIBOR plus 1.45%), 4/20/31(2) | 200,000 | 190,365 | ||||
CIFC Funding Ltd., Series 2013-3RA, Class A2, VRN, 3.89%, (3-month LIBOR plus 1.40%), 4/24/31(2) | 250,000 | 241,635 | ||||
TOTAL COLLATERALIZED LOAN OBLIGATIONS (Cost $450,000) | 432,000 | |||||
EXCHANGE-TRADED FUNDS — 2.7% | ||||||
Invesco DB Base Metals Fund | 4,717 | 72,595 | ||||
Invesco DB Commodity Index Tracking Fund | 4,304 | 62,365 | ||||
Invesco DB Energy Fund | 7,044 | 87,627 | ||||
SPDR Gold Shares(1) | 946 | 114,702 | ||||
TOTAL EXCHANGE-TRADED FUNDS (Cost $339,081) | 337,289 | |||||
SOVEREIGN GOVERNMENTS AND AGENCIES — 0.8% | ||||||
Russia — 0.8% | ||||||
Russian Foreign Bond - Eurobond, 12.75%, 6/24/28 (Cost $106,585) | $ | 65,000 | 102,925 | |||
U.S. TREASURY SECURITIES — 0.7% | ||||||
U.S. Treasury Inflation Indexed Notes, 2.375%, 1/15/25(3) (Cost $90,792) | 80,486 | 87,054 | ||||
TEMPORARY CASH INVESTMENTS — 17.1% | ||||||
State Street Institutional U.S. Government Money Market Fund, Premier Class (Cost $2,106,325) | 2,106,325 | 2,106,325 | ||||
TOTAL INVESTMENT SECURITIES — 100.4% (Cost $12,441,682) | 12,388,592 | |||||
OTHER ASSETS AND LIABILITIES — (0.4)% | (54,414 | ) | ||||
TOTAL NET ASSETS — 100.0% | $ | 12,334,178 |
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
Currency Purchased | Currency Sold | Counterparty | Settlement Date | Unrealized Appreciation (Depreciation) | |||||
AUD | 526 | USD | 372 | Bank of America N.A. | 3/29/19 | $ | (1 | ) | |
AUD | 3,168 | USD | 2,238 | Bank of America N.A. | 3/29/19 | (4 | ) | ||
USD | 302 | AUD | 428 | Bank of America N.A. | 3/29/19 | 1 | |||
USD | 322 | AUD | 457 | Bank of America N.A. | 3/29/19 | (1 | ) | ||
USD | 13,931 | AUD | 19,384 | Bank of America N.A. | 3/29/19 | 257 | |||
USD | 102,304 | AUD | 142,356 | Bank of America N.A. | 3/29/19 | 1,891 | |||
BRL | 2,248,023 | USD | 581,922 | Goldman Sachs & Co. | 3/20/19 | (5,144 | ) | ||
USD | 5,496 | BRL | 21,610 | Goldman Sachs & Co. | 3/20/19 | (49 | ) | ||
USD | 11,042 | BRL | 43,068 | Goldman Sachs & Co. | 3/20/19 | (8 | ) | ||
USD | 16,072 | BRL | 63,446 | Goldman Sachs & Co. | 3/20/19 | (207 | ) | ||
CAD | 1,544,016 | USD | 1,160,879 | Morgan Stanley | 3/20/19 | (27,866 | ) | ||
CAD | 5,047 | USD | 3,726 | Morgan Stanley | 3/20/19 | (23 | ) |
15
Currency Purchased | Currency Sold | Counterparty | Settlement Date | Unrealized Appreciation (Depreciation) | |||||
CAD | 5,436 | USD | 4,014 | Morgan Stanley | 3/29/19 | $ | (24 | ) | |
CAD | 3,867 | USD | 2,840 | Morgan Stanley | 3/29/19 | (2 | ) | ||
USD | 5,710 | CAD | 7,634 | Morgan Stanley | 3/20/19 | 108 | |||
USD | 42,448 | CAD | 57,644 | Morgan Stanley | 3/20/19 | 149 | |||
USD | 50,884 | CAD | 68,171 | Morgan Stanley | 3/29/19 | 851 | |||
USD | 7,419 | CAD | 10,065 | Morgan Stanley | 3/29/19 | 32 | |||
CHF | 6,872 | USD | 7,009 | UBS AG | 3/20/19 | 33 | |||
CHF | 23,168 | USD | 23,568 | UBS AG | 3/20/19 | 173 | |||
CHF | 975 | USD | 996 | UBS AG | 3/29/19 | 5 | |||
USD | 577,343 | CHF | 567,748 | UBS AG | 3/20/19 | (4,428 | ) | ||
USD | 37,302 | CHF | 36,694 | UBS AG | 3/29/19 | (333 | ) | ||
EUR | 200,857 | USD | 230,320 | JPMorgan Chase Bank N.A. | 3/20/19 | 1,297 | |||
EUR | 13,056 | USD | 15,103 | Credit Suisse AG | 3/29/19 | (36 | ) | ||
EUR | 1,104 | USD | 1,270 | Credit Suisse AG | 3/29/19 | 4 | |||
EUR | 729 | USD | 839 | Credit Suisse AG | 3/29/19 | 3 | |||
EUR | 5,323 | USD | 6,114 | Credit Suisse AG | 3/29/19 | 29 | |||
EUR | 4,096 | USD | 4,720 | Credit Suisse AG | 3/29/19 | 6 | |||
EUR | 805 | USD | 927 | Credit Suisse AG | 3/29/19 | 1 | |||
USD | 3,323 | EUR | 2,896 | JPMorgan Chase Bank N.A. | 3/20/19 | (17 | ) | ||
USD | 9,291 | EUR | 8,101 | JPMorgan Chase Bank N.A. | 3/20/19 | (51 | ) | ||
USD | 5,913 | EUR | 5,149 | Credit Suisse AG | 3/29/19 | (29 | ) | ||
USD | 37,327 | EUR | 32,442 | Credit Suisse AG | 3/29/19 | (114 | ) | ||
USD | 72,164 | EUR | 62,720 | Credit Suisse AG | 3/29/19 | (220 | ) | ||
USD | 184,493 | EUR | 160,350 | Credit Suisse AG | 3/29/19 | (563 | ) | ||
GBP | 1 | USD | 1 | Bank of America N.A. | 3/20/19 | — | |||
GBP | 2,196 | USD | 2,799 | JPMorgan Chase Bank N.A. | 3/29/19 | 12 | |||
USD | 73,720 | GBP | 57,980 | JPMorgan Chase Bank N.A. | 3/29/19 | (490 | ) | ||
USD | 51,029 | GBP | 40,134 | JPMorgan Chase Bank N.A. | 3/29/19 | (339 | ) | ||
USD | 1,728 | GBP | 1,363 | JPMorgan Chase Bank N.A. | 3/29/19 | (16 | ) | ||
USD | 259,351 | HKD | 2,024,715 | Bank of America N.A. | 3/29/19 | 126 | |||
USD | 1,441 | HKD | 11,262 | Bank of America N.A. | 3/29/19 | (1 | ) | ||
HUF | 4,864,082 | USD | 17,359 | UBS AG | 3/20/19 | 93 | |||
HUF | 3,133,405 | USD | 11,182 | UBS AG | 3/20/19 | 60 | |||
HUF | 13,987,641 | USD | 49,973 | UBS AG | 3/20/19 | 213 | |||
USD | 1,161,323 | HUF | 327,632,383 | UBS AG | 3/20/19 | (14,178 | ) | ||
USD | 5,429 | HUF | 1,541,682 | UBS AG | 3/20/19 | (102 | ) | ||
JPY | 502,848 | USD | 4,587 | Bank of America N.A. | 3/29/19 | 31 | |||
USD | 219,272 | JPY | 24,486,971 | Bank of America N.A. | 3/29/19 | (5,621 | ) | ||
USD | 8,329 | MXN | 169,955 | JPMorgan Chase Bank N.A. | 3/29/19 | (204 | ) | ||
NOK | 4,421,953 | USD | 518,598 | Goldman Sachs & Co. | 3/20/19 | (5,446 | ) | ||
NOK | 51,347 | USD | 5,951 | Goldman Sachs & Co. | 3/20/19 | 8 | |||
NOK | 7,454 | USD | 853 | Goldman Sachs & Co. | 3/29/19 | 12 | |||
NOK | 7,332 | USD | 844 | Goldman Sachs & Co. | 3/29/19 | 7 | |||
USD | 20,359 | NOK | 178,575 | Goldman Sachs & Co. | 3/20/19 | (364 | ) | ||
USD | 20,865 | NOK | 181,735 | Goldman Sachs & Co. | 3/29/19 | (232 | ) | ||
USD | 491 | NOK | 4,241 | Goldman Sachs & Co. | 3/29/19 | (1 | ) |
16
Currency Purchased | Currency Sold | Counterparty | Settlement Date | Unrealized Appreciation (Depreciation) | |||||
PLN | 2,175,222 | USD | 576,202 | Goldman Sachs & Co. | 3/20/19 | $ | 6,085 | ||
USD | 8,398 | PLN | 31,416 | Goldman Sachs & Co. | 3/20/19 | (12 | ) | ||
USD | 27,914 | PLN | 104,850 | Goldman Sachs & Co. | 3/20/19 | (154 | ) | ||
SEK | 5,211,065 | USD | 577,834 | Goldman Sachs & Co. | 3/20/19 | 13,752 | |||
SEK | 2,374 | USD | 265 | Goldman Sachs & Co. | 3/29/19 | 5 | |||
SEK | 2,210 | USD | 246 | Goldman Sachs & Co. | 3/29/19 | 5 | |||
USD | 6,440 | SEK | 57,857 | Goldman Sachs & Co. | 3/20/19 | (129 | ) | ||
USD | 6,247 | SEK | 56,042 | Goldman Sachs & Co. | 3/20/19 | (115 | ) | ||
USD | 20,452 | SEK | 184,085 | Goldman Sachs & Co. | 3/20/19 | (446 | ) | ||
USD | 10,344 | SEK | 93,084 | Goldman Sachs & Co. | 3/29/19 | (231 | ) | ||
USD | 241 | SEK | 2,129 | Goldman Sachs & Co. | 3/29/19 | (1 | ) | ||
USD | 49,621 | SGD | 67,891 | Bank of America N.A. | 3/29/19 | (290 | ) | ||
$ | (42,243 | ) |
FUTURES CONTRACTS PURCHASED | |||||||||||
Reference Entity | Contracts | Expiration Date | Notional Amount | Underlying Contract Value | Unrealized Appreciation (Depreciation) | ||||||
U.S. Treasury 10-Year Notes | 1 | March 2019 | USD | 100,000 | $ | 122,016 | $ | 2,511 | |||
U.S. Treasury 10-Year Ultra Notes | 2 | March 2019 | USD | 200,000 | 260,156 | 7,435 | |||||
$ | 382,172 | $ | 9,946 |
FUTURES CONTRACTS SOLD | |||||||||||
Reference Entity | Contracts | Expiration Date | Notional Amount | Underlying Contract Value | Unrealized Appreciation (Depreciation) | ||||||
Euro-Bobl 5-Year Bonds | 1 | March 2019 | EUR | 100,000 | $ | 151,835 | $ | (437 | ) | ||
Euro-Bund 10-Year Bonds | 1 | March 2019 | EUR | 100,000 | 187,376 | (1,491 | ) | ||||
$ | 339,211 | $ | (1,928 | ) |
CENTRALLY CLEARED TOTAL RETURN SWAP AGREEMENTS | |||||||||||||||
Floating Rate Index | Pay/Receive Floating Rate Index | Fixed Rate | Termination Date | Notional Amount | Premiums Paid (Received) | Unrealized Appreciation (Depreciation) | Value | ||||||||
CPURNSA | Receive | 2.24% | 8/19/19 | $ | 500,000 | $ | 503 | $ | (24,904 | ) | $ | (24,401 | ) |
TOTAL RETURN SWAP AGREEMENTS | ||||||||||
Counterparty | Floating Rate Index | Pay/Receive Floating Rate Index | Fixed Rate | Termination Date | Notional Amount | Value* | ||||
Bank of America N.A. | CPURNSA | Receive | 2.21% | 3/13/19 | $ | 1,000,000 | $ | (40,026 | ) | |
Bank of America N.A. | CPURNSA | Receive | 1.41% | 8/27/20 | $ | 700,000 | 8,558 | |||
$ | (31,468 | ) |
*Amount represents value and unrealized appreciation (depreciation).
17
NOTES TO SCHEDULE OF INVESTMENTS | ||
ADR | - | American Depositary Receipt |
AUD | - | Australian Dollar |
BRL | - | Brazilian Real |
CAD | - | Canadian Dollar |
CHF | - | Swiss Franc |
CPURNSA | - | U.S. Consumer Price Index Urban Consumers Not Seasonally Adjusted Index |
EUR | - | Euro |
FHLMC | - | Federal Home Loan Mortgage Corporation |
FNMA | - | Federal National Mortgage Association |
GBP | - | British Pound |
HKD | - | Hong Kong Dollar |
HUF | - | Hungarian Forint |
JPY | - | Japanese Yen |
LIBOR | - | London Interbank Offered Rate |
MTN | - | Medium Term Note |
MXN | - | Mexican Peso |
NOK | - | Norwegian Krone |
PLN | - | Polish Zloty |
SEK | - | Swedish Krona |
SEQ | - | Sequential Payer |
SGD | - | Singapore Dollar |
USD | - | United States Dollar |
VRN | - | Variable Rate Note. The rate adjusts periodically based upon the terms set forth in the security’s offering documents. The rate shown is effective at the period end and the reference rate and spread, if any, is indicated. |
(1) | Non-income producing. |
(2) | Security was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration, normally to qualified institutional investors. The aggregate value of these securities at the period end was $1,428,025, which represented 11.6% of total net assets. |
(3) | Security, or a portion thereof, has been pledged at the custodian bank or with a broker for collateral requirements on forward foreign currency exchange contracts, futures contracts and/or swap agreements. At the period end, the aggregate value of securities pledged was $23,424. |
See Notes to Financial Statements.
18
Statement of Assets and Liabilities |
DECEMBER 31, 2018 (UNAUDITED) | |||
Assets | |||
Investment securities, at value (cost of $12,441,682) | $ | 12,388,592 | |
Cash | 2,650 | ||
Foreign currency holdings, at value (cost of $241) | 254 | ||
Receivable for investments sold | 19,483 | ||
Receivable for capital shares sold | 118 | ||
Receivable for variation margin on futures contracts | 1,580 | ||
Unrealized appreciation on forward foreign currency exchange contracts | 25,249 | ||
Swap agreements, at value | 8,558 | ||
Interest and dividends receivable | 41,654 | ||
Other assets | 179 | ||
12,488,317 | |||
Liabilities | |||
Payable for investments purchased | 32,227 | ||
Payable for capital shares redeemed | 3,622 | ||
Payable for variation margin on swap agreements | 98 | ||
Unrealized depreciation on forward foreign currency exchange contracts | 67,492 | ||
Swap agreements, at value | 40,026 | ||
Accrued management fees | 9,299 | ||
Distribution and service fees payable | 1,375 | ||
154,139 | |||
Net Assets | $ | 12,334,178 | |
Net Assets Consist of: | |||
Capital (par value and paid-in surplus) | $ | 18,205,410 | |
Distributable earnings | (5,871,232 | ) | |
$ | 12,334,178 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | ||||
Investor Class, $0.01 Par Value | $7,834,110 | 813,222 | $9.63 | |||
I Class, $0.01 Par Value | $1,524,601 | 157,397 | $9.69 | |||
A Class, $0.01 Par Value | $1,703,942 | 178,486 | $9.55* | |||
C Class, $0.01 Par Value | $1,135,873 | 124,132 | $9.15 | |||
R Class, $0.01 Par Value | $16,465 | 1,748 | $9.42 | |||
R5 Class, $0.01 Par Value | $119,187 | 12,307 | $9.68 |
*Maximum offering price $10.13 (net asset value divided by 0.9425).
See Notes to Financial Statements.
19
Statement of Operations |
FOR THE SIX MONTHS ENDED DECEMBER 31, 2018 (UNAUDITED) | |||
Investment Income (Loss) | |||
Income: | |||
Interest | $ | 121,521 | |
Dividends (net of foreign taxes withheld of $1,507) | 69,634 | ||
191,155 | |||
Expenses: | |||
Management fees | 66,261 | ||
Distribution and service fees: | |||
A Class | 2,349 | ||
C Class | 6,311 | ||
R Class | 39 | ||
Directors' fees and expenses | 528 | ||
Other expenses | 132 | ||
75,620 | |||
Fees waived(1) | (2,615 | ) | |
73,005 | |||
Net investment income (loss) | 118,150 | ||
Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investment transactions | (201,903 | ) | |
Forward foreign currency exchange contract transactions | (17,390 | ) | |
Futures contract transactions | (12,716 | ) | |
Written options contract transactions | 21,602 | ||
Swap agreement transactions | (106 | ) | |
Foreign currency translation transactions | (986 | ) | |
(211,499 | ) | ||
Change in net unrealized appreciation (depreciation) on: | |||
Investments | (631,556 | ) | |
Forward foreign currency exchange contracts | (54,017 | ) | |
Futures contracts | 9,688 | ||
Swap agreements | (24,590 | ) | |
Translation of assets and liabilities in foreign currencies | 112 | ||
(700,363 | ) | ||
Net realized and unrealized gain (loss) | (911,862 | ) | |
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | (793,712 | ) |
(1) | Amount consists of $1,558, $490, $325, $219, $2 and $21 for Investor Class, I Class, A Class, C Class, R Class and R5 Class, respectively. |
See Notes to Financial Statements.
20
Statement of Changes in Net Assets |
SIX MONTHS ENDED DECEMBER 31, 2018 (UNAUDITED) AND YEAR ENDED JUNE 30, 2018 | ||||||
Increase (Decrease) in Net Assets | December 31, 2018 | June 30, 2018 | ||||
Operations | ||||||
Net investment income (loss) | $ | 118,150 | $ | 239,953 | ||
Net realized gain (loss) | (211,499 | ) | 1,069,115 | |||
Change in net unrealized appreciation (depreciation) | (700,363 | ) | (123,938 | ) | ||
Net increase (decrease) in net assets resulting from operations | (793,712 | ) | 1,185,130 | |||
Distributions to Shareholders | ||||||
From earnings: | ||||||
Investor Class | (156,358 | ) | (170,131 | ) | ||
I Class | (68,369 | ) | (70,277 | ) | ||
A Class | (33,368 | ) | (31,819 | ) | ||
C Class | (20,830 | ) | (12,518 | ) | ||
R Class | (262 | ) | (1,346 | ) | ||
R5 Class | (2,319 | ) | (653 | ) | ||
Decrease in net assets from distributions | (281,506 | ) | (286,744 | ) | ||
Capital Share Transactions | ||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | (1,783,230 | ) | (4,301,001 | ) | ||
Net increase (decrease) in net assets | (2,858,448 | ) | (3,402,615 | ) | ||
Net Assets | ||||||
Beginning of period | 15,192,626 | 18,595,241 | ||||
End of period | $ | 12,334,178 | $ | 15,192,626 |
See Notes to Financial Statements.
21
Notes to Financial Statements |
DECEMBER 31, 2018 (UNAUDITED)
1. Organization
American Century Quantitative Equity 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. Multi-Asset Real Return Fund (the fund) is one fund in a series issued by the corporation. The fund’s investment objective is to seek total real return.
The fund offers the Investor Class, I Class, A Class, C Class, R Class and R5 Class. The A Class may incur an initial sales charge. The A Class and C Class may be subject to a contingent deferred sales charge.
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.
Fixed income securities are valued at the evaluated mean as provided by independent pricing services or at the mean of the most recent bid and asked prices as provided by investment dealers. Corporate bonds, U.S. Treasury and Government Agency securities, convertible bonds, municipal securities, and sovereign governments and agencies are valued using market models that consider trade data, quotations from dealers and active market makers, relevant yield curve and spread data, creditworthiness, trade data or market information on comparable securities, and other relevant security specific information. Mortgage-related and asset-backed securities are valued based on models that consider trade data, prepayment and default projections, benchmark yield and spread data and estimated cash flows of each tranche of the issuer. Collateralized loan obligations are valued based on discounted cash flow models that consider trade and economic data, prepayment assumptions and default projections. Fixed income 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.
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. Exchange-traded futures are valued at the settlement price as provided by the appropriate exchange. Exchange-traded options contracts are valued at a mean as provided by independent pricing services. Swap agreements are valued at an evaluated mean as provided by independent pricing services or independent brokers. 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. Investments 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.
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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.
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 paydown gain (loss) and accretion of discounts and amortization of premiums. Inflation adjustments related to inflation-linked debt securities are reflected as interest income.
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.
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.
Segregated Assets — In accordance with the 1940 Act, the fund segregates assets on its books and records to cover certain types of investment securities and other financial instruments. American Century Investment Management, Inc. (ACIM) (the investment advisor) monitors, on a daily basis, the securities segregated to ensure the fund designates a sufficient amount of liquid assets, marked-to-market daily. The fund may also receive assets or be required to pledge assets at the custodian bank or with a broker for collateral requirements.
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.
23
Distributions to Shareholders — Distributions from net investment income, if any, are generally declared and paid quarterly. Distributions from 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.
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 fee consists of (1) an Investment Category Fee based on the daily net assets of the fund and certain other accounts managed by the investment advisor that are in the same broad investment category as the fund and (2) a Complex Fee based on the assets of all the funds in the American Century Investments family of funds. From July 1, 2018 through July 31, 2018, the investment advisor agreed to waive 0.20% of the fund’s management fee. Effective August 1, 2018, the investment advisor terminated the waiver and decreased the Investment Category Fee range by 0.20%.
The Investment Category Fee range, the Complex Fee range and the effective annual management fee before and after waiver for each class for the period ended December 31, 2018 are as follows:
Effective Annual Management Fee | ||||
Investment Category Fee Range | Complex Fee Range | Before Waiver | After Waiver | |
Investor Class | 0.5754% to 0.6929%* | 0.2500% to 0.3100% | 0.91% | 0.87% |
I Class | 0.0500% to 0.1100% | 0.71% | 0.67% | |
A Class | 0.2500% to 0.3100% | 0.91% | 0.87% | |
C Class | 0.2500% to 0.3100% | 0.91% | 0.87% | |
R Class | 0.2500% to 0.3100% | 0.91% | 0.87% | |
R5 Class | 0.0500% to 0.1100% | 0.71% | 0.67% |
*Prior to August 1, 2018, the Investment Category Fee range was 0.7754% to 0.8929%.
Distribution and Service Fees — The Board of Directors has adopted a separate Master Distribution and Individual Shareholder Services Plan for each of the A Class, C Class and R Class (collectively the plans), pursuant to Rule 12b-1 of the 1940 Act. The plans provide that the A Class will pay ACIS an annual distribution and service fee of 0.25%. The plans provide that the C Class will pay ACIS an annual distribution and service fee of 1.00%, of which 0.25% is paid for individual shareholder services and 0.75% is paid for distribution services. The plans provide that the R Class will pay ACIS an annual distribution and service fee of 0.50%. The fees are computed and accrued daily based on each class’s daily net assets and paid monthly in arrears. The fees are used to pay financial intermediaries for distribution and individual shareholder services. Fees incurred under the plans during the period ended December 31, 2018 are detailed in the Statement of Operations.
24
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 $182,962 and $326,142, respectively. The effect of interfund transactions on the Statement of Operations was $(14,966) in net realized gain (loss) on investment transactions.
4. Investment Transactions
Purchases of investment securities, excluding short-term investments, for the period ended December 31, 2018 totaled $16,366,436, of which $822,457 represented U.S. Treasury and Government Agency obligations.
Sales of investment securities, excluding short-term investments, for the period ended December 31, 2018 totaled $19,017,805, of which $327,504 represented U.S. Treasury and Government Agency obligations.
25
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended December 31, 2018 | Year ended June 30, 2018 | |||||||||
Shares | Amount | Shares | Amount | |||||||
Investor Class/Shares Authorized | 50,000,000 | 50,000,000 | ||||||||
Sold | 16,752 | $ | 171,784 | 62,533 | $ | 643,979 | ||||
Issued in reinvestment of distributions | 13,523 | 141,312 | 14,619 | 151,114 | ||||||
Redeemed | (93,345 | ) | (955,044 | ) | (552,338 | ) | (5,598,099 | ) | ||
(63,070 | ) | (641,948 | ) | (475,186 | ) | (4,803,006 | ) | |||
I Class/Shares Authorized | 25,000,000 | 25,000,000 | ||||||||
Sold | 207,255 | 2,147,639 | 533,646 | 5,492,235 | ||||||
Issued in reinvestment of distributions | 6,413 | 67,399 | 6,593 | 68,443 | ||||||
Redeemed | (326,834 | ) | (3,248,944 | ) | (432,897 | ) | (4,446,801 | ) | ||
(113,166 | ) | (1,033,906 | ) | 107,342 | 1,113,877 | |||||
A Class/Shares Authorized | 30,000,000 | 30,000,000 | ||||||||
Sold | 3,603 | 36,221 | 16,417 | 169,772 | ||||||
Issued in reinvestment of distributions | 3,205 | 33,235 | 3,091 | 31,697 | ||||||
Redeemed | (12,678 | ) | (127,935 | ) | (37,137 | ) | (373,227 | ) | ||
(5,870 | ) | (58,479 | ) | (17,629 | ) | (171,758 | ) | |||
C Class/Shares Authorized | 20,000,000 | 20,000,000 | ||||||||
Sold | 297 | 3,000 | 8,025 | 77,245 | ||||||
Issued in reinvestment of distributions | 1,992 | 19,841 | 1,216 | 11,969 | ||||||
Redeemed | (8,363 | ) | (80,388 | ) | (55,980 | ) | (541,372 | ) | ||
(6,074 | ) | (57,547 | ) | (46,739 | ) | (452,158 | ) | |||
R Class/Shares Authorized | 15,000,000 | 15,000,000 | ||||||||
Sold | 378 | 3,782 | 322 | 3,242 | ||||||
Issued in reinvestment of distributions | 26 | 262 | 133 | 1,346 | ||||||
Redeemed | (109 | ) | (1,108 | ) | (10,729 | ) | (109,135 | ) | ||
295 | 2,936 | (10,274 | ) | (104,547 | ) | |||||
R5 Class/Shares Authorized | 50,000,000 | 50,000,000 | ||||||||
Sold | 336 | 3,494 | 11,190 | 115,994 | ||||||
Issued in reinvestment of distributions | 221 | 2,319 | 62 | 653 | ||||||
Redeemed | (9 | ) | (99 | ) | (5 | ) | (56 | ) | ||
548 | 5,714 | 11,247 | 116,591 | |||||||
Net increase (decrease) | (187,337 | ) | $ | (1,783,230 | ) | (431,239 | ) | $ | (4,301,001 | ) |
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.
26
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 | ||||||||
Capital Markets | $ | 67,982 | $ | 11,842 | — | |||
Chemicals | 68,538 | 11,099 | — | |||||
Equity Real Estate Investment Trusts (REITs) | 1,040,030 | 519,353 | — | |||||
Food Products | 36,053 | 10,090 | — | |||||
IT Services | 248,332 | 11,129 | — | |||||
Metals and Mining | 34,975 | 39,422 | — | |||||
Oil, Gas and Consumable Fuels | 169,040 | 81,715 | — | |||||
Pharmaceuticals | 119,761 | 75,220 | — | |||||
Real Estate Management and Development | — | 471,172 | — | |||||
Other Industries | 2,212,861 | — | — | |||||
Collateralized Mortgage Obligations | — | 1,936,386 | — | |||||
Corporate Bonds | — | 1,142,858 | — | |||||
Commercial Mortgage-Backed Securities | — | 512,721 | — | |||||
Asset-Backed Securities | — | 502,420 | — | |||||
Collateralized Loan Obligations | — | 432,000 | — | |||||
Exchange-Traded Funds | 337,289 | — | — | |||||
Sovereign Governments and Agencies | — | 102,925 | — | |||||
U.S. Treasury Securities | — | 87,054 | — | |||||
Temporary Cash Investments | 2,106,325 | — | — | |||||
$ | 6,441,186 | $ | 5,947,406 | — | ||||
Other Financial Instruments | ||||||||
Futures Contracts | $ | 9,946 | — | — | ||||
Swap Agreements | — | $ | 8,558 | — | ||||
Forward Foreign Currency Exchange Contracts | — | 25,249 | — | |||||
$ | 9,946 | $ | 33,807 | — | ||||
Liabilities | ||||||||
Other Financial Instruments | ||||||||
Futures Contracts | — | $ | 1,928 | — | ||||
Swap Agreements | — | 64,427 | — | |||||
Forward Foreign Currency Exchange Contracts | — | 67,492 | — | |||||
— | $ | 133,847 | — |
7. Derivative Instruments
Equity Price Risk — The fund is subject to equity price risk in the normal course of pursuing its investment objectives. A fund may enter into futures contracts or option contracts based on an equity index or specific security in order to manage its exposure to changes in market conditions. The risks of entering into equity price risk derivative instruments include the possible lack of liquidity, failure of the counterparty to meet its obligations, and that there may be unfavorable changes in the underlying investments or instruments.
27
A fund may purchase or write an option contract to protect against declines in market value on the underlying index or security. A purchased option contract provides the fund a right, but not an obligation, to buy (call) or sell (put) an equity-related asset at a specified exercise price within a certain period or on a specific date. A written option contract holds the corresponding obligation to sell (call writing) or buy (put writing) the underlying equity-related asset if the purchaser exercises the option contract. The buyer pays the seller an initial purchase price (premium) for this right. Option contracts purchased by a fund are accounted for in the same manner as marketable portfolio securities. The premium received by a fund for option contracts written is recorded as a liability and valued daily. The proceeds from securities sold through the exercise of option contracts are decreased by the premium paid to purchase the option contracts. A fund may recognize a realized gain or loss when the option contract is closed, exercised or expires. Net realized and unrealized gains or losses occurring during the holding period of purchased options contracts are a component of net realized gain (loss) on investment transactions and change in net unrealized appreciation (depreciation) on investments, respectively. Net realized and unrealized gains or losses occurring during the holding period of written options contracts are a component of net realized gain (loss) on written options contract transactions and change in net unrealized appreciation (depreciation) on written options contracts, respectively. The fund's average exposure to these equity price risk derivative instruments held during the period was 49 written options contracts.
A fund may purchase futures contracts to gain exposure to increases in market value or sell futures contracts to protect against a decline in market value. Upon entering into a futures contract, a fund is required to deposit either cash or securities in an amount equal to a certain percentage of the contract value (initial margin). Subsequent payments (variation margin) are made or received daily, in cash, by a fund. The variation margin is equal to the daily change in the contract value and is recorded as unrealized gains and losses. A fund recognizes a realized gain or loss when the contract is closed or expires. Net realized and unrealized gains or losses occurring during the holding period of futures contracts are a component of net realized gain (loss) on futures contract transactions and change in net unrealized appreciation (depreciation) on futures contracts, respectively. During the period, the fund participated in these equity price risk derivative instruments for temporary investment purposes.
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 or to gain exposure to the fluctuations in the value of foreign currencies. 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 $14,393,726.
Interest Rate Risk — The fund is subject to interest rate risk in the normal course of pursuing its investment objectives. The value of bonds generally declines as interest rates rise. A fund may enter into futures contracts based on a bond index or a specific underlying security. A fund may purchase futures contracts to gain exposure to increases in market value or sell futures contracts to protect against a decline in market value. Upon entering into a futures contract, a fund will segregate cash, cash equivalents or other appropriate liquid securities on its records in amounts sufficient to meet requirements. Subsequent payments (variation margin) are made or received daily, in cash, by a fund. The variation margin is equal to the daily change in the contract value and is recorded as unrealized gains and losses. A fund recognizes a realized gain or loss when the futures contract is closed or expires. Net realized and unrealized gains or losses occurring during the holding period of futures contracts are a component of net realized gain (loss) on futures contract transactions and change in net unrealized appreciation (depreciation) on futures contracts, respectively. One of the risks of entering into futures contracts is the possibility that the change in value of the contract may not correlate with the changes in value of the underlying securities. The fund's average notional exposure to interest rate risk derivative instruments held during the period was $300,000 futures contracts purchased and $337,803 futures contracts sold.
28
Other Contracts — A fund may enter into total return swap agreements in order to attempt to obtain or preserve a particular return or spread at a lower cost than obtaining a return or spread through purchases and/or sales of instruments in other markets or gain exposure to certain markets in the most economical way possible. A fund will segregate cash, cash equivalents or other appropriate liquid securities on its records in amounts sufficient to meet requirements. Changes in value, including the periodic amounts of interest to be paid or received on swap agreements, are recorded as unrealized appreciation (depreciation) on swap agreements. Upon entering into a centrally cleared swap, a fund is required to deposit cash or securities (initial margin) with a financial intermediary in an amount equal to a certain percentage of the notional amount. Subsequent payments (variation margin) are made or received daily, in cash, by a fund. The variation margin is equal to the daily change in the value and is a component of unrealized gains and losses. Realized gain or loss is recorded upon receipt or payment of a periodic settlement or termination of swap agreements. Net realized and unrealized gains or losses occurring during the holding period of swap agreements are a component of net realized gain (loss) on swap agreement transactions and change in net unrealized appreciation (depreciation) on swap agreements, respectively. The risks of entering into swap agreements include the possible lack of liquidity, failure of the counterparty to meet its obligations, and that there may be unfavorable changes in the underlying investments or instruments, including inflationary risk. The fund's average notional amount held during the period was $2,200,000.
Value of Derivative Instruments as of December 31, 2018
Asset Derivatives | Liability Derivatives | |||||||
Type of Risk Exposure | Location on Statement of Assets and Liabilities | Value | Location on Statement of Assets and Liabilities | Value | ||||
Foreign Currency Risk | Unrealized appreciation on forward foreign currency exchange contracts | $ | 25,249 | Unrealized depreciation on forward foreign currency exchange contracts | $ | 67,492 | ||
Interest Rate Risk | Receivable for variation margin on futures contracts* | 1,580 | Payable for variation margin on futures contracts* | — | ||||
Other Contracts | Receivable for variation margin on swap agreements* | — | Payable for variation margin on swap agreements* | 98 | ||||
Other Contracts | Swap agreements | 8,558 | Swap agreements | 40,026 | ||||
$ | 35,387 | $ | 107,616 |
* | Included in the unrealized appreciation (depreciation) on futures contracts or centrally cleared swap agreements, as applicable, as reported in the Schedule of Investments. |
Effect of Derivative Instruments on the Statement of Operations for the Six Months Ended December 31, 2018
Net Realized Gain (Loss) | Change in Net Unrealized Appreciation (Depreciation) | |||||||
Type of Risk Exposure | Location on Statement of Operations | Value | Location on Statement of Operations | Value | ||||
Equity Price Risk | Net realized gain (loss) on futures contract transactions | $ | (2,663 | ) | Change in net unrealized appreciation (depreciation) on futures contracts | $ | (98 | ) |
Equity Price Risk | Net realized gain (loss) on written options contract transactions | 21,602 | Change in net unrealized appreciation (depreciation) on written options contracts | — | ||||
Foreign Currency Risk | Net realized gain (loss) on forward foreign currency exchange contract transactions | (17,390 | ) | Change in net unrealized appreciation (depreciation) on forward foreign currency exchange contracts | (54,017 | ) | ||
Interest Rate Risk | Net realized gain (loss) on futures contract transactions | (10,053 | ) | Change in net unrealized appreciation (depreciation) on futures contracts | 9,786 | |||
Other Contracts | Net realized gain (loss) on swap agreement transactions | (106 | ) | Change in net unrealized appreciation (depreciation) on swap agreements | (24,590 | ) | ||
$ | (8,610 | ) | $ | (68,919 | ) |
29
8. 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. Investing in emerging markets may accentuate these risks.
There are certain risks involved with investing in forward foreign currency exchange contracts. Changes in the value of foreign currencies against the U.S. dollar could result in gains or losses to the fund. The value of a share of the fund is determined in U.S. dollars. As a result, the fund could recognize a gain or loss based solely upon a change in the exchange rate between the foreign currency and the U.S. dollar. Changes in exchange rates may increase losses and lower gains from the fund’s investments. The overall impact on the fund may be significant depending on the currencies represented in the portfolio and how each one appreciates or depreciates in relation to the U.S. dollar. Currency trends are unpredictable and exchange rates in foreign currencies may fluctuate significantly over short periods of time for a number of reasons, including changes in interest rates, intervention (or the failure to intervene) by U.S. or foreign governments, central banks or Supranational entities, or by the imposition of currency controls or other political developments in the United States or abroad.
The fund’s commodity-related investments may be subject to greater volatility than investments in traditional securities. The value of the fund’s commodity-related investments may be affected by changes in overall market movements, interest rate changes, and volatility in commodity-related indexes. The value of these investments may also be affected by factors affecting a particular commodity, such as weather, disease, embargoes, tariffs, taxes and economic, political and regulatory developments.
The fund may be subject to certain risks similar to those associated with direct investment in real estate including but not limited to: local or regional economic conditions, changes in zoning laws, changes in property values, property tax increases, overbuilding, increased competition, environmental contamination, natural disasters, and interest rate risk.
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.
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.
As of period end, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $ | 12,491,547 | |
Gross tax appreciation of investments | $ | 287,830 | |
Gross tax depreciation of investments | (390,785 | ) | |
Net tax appreciation (depreciation) of investments | $ | (102,955 | ) |
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 June 30, 2018, the fund had accumulated short-term capital losses of $(3,180,237) and accumulated long-term capital losses of $(2,299,909), which represent net capital loss carryovers that may be used to offset future realized capital gains for federal income tax purposes. The capital loss carryovers may be carried forward for an unlimited period. Future capital loss carryover utilization in any given year may be subject to Internal Revenue Code limitations.
30
10. Recently Issued Accounting Standards
In March 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2017-08, “Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20), Premium Amortization on Purchased Callable Debt Securities” (ASU 2017-08). ASU 2017-08 amends the amortization period for certain purchased callable debt securities held at a premium, shortening such period to the earliest call date. The amendments are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Management is currently evaluating the impact that adopting ASU 2017-08 will have on the financial statements.
31
Financial Highlights |
For a Share Outstanding Throughout the Years Ended June 30 (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) | $10.35 | 0.08 | (0.61) | (0.53) | (0.19) | $9.63 | (5.28)% | 0.88%(4) | 0.92%(4) | 1.62%(4) | 1.58%(4) | 126% | $7,834 | ||
2018 | $9.80 | 0.16 | 0.58 | 0.74 | (0.19) | $10.35 | 7.57% | 0.89% | 1.09% | 1.61% | 1.41% | 160% | $9,067 | ||
2017 | $9.43 | 0.16 | 0.21 | 0.37 | — | $9.80 | 3.92% | 0.89% | 1.09% | 1.68% | 1.48% | 173% | $13,250 | ||
2016 | $9.54 | 0.04 | (0.15) | (0.11) | — | $9.43 | (1.15)% | 0.90% | 1.10% | 0.47% | 0.27% | 152% | $14,230 | ||
2015 | $10.50 | 0.02 | (0.89) | (0.87) | (0.09) | $9.54 | (8.35)% | 0.89% | 1.09% | 0.24% | 0.04% | 93% | $24,054 | ||
2014 | $9.92 | 0.03 | 0.57 | 0.60 | (0.02) | $10.50 | 6.09% | 0.91% | 1.09% | 0.27% | 0.09% | 87% | $28,261 | ||
I Class | |||||||||||||||
2018(3) | $10.40 | 0.09 | (0.61) | (0.52) | (0.19) | $9.69 | (5.11)% | 0.68%(4) | 0.72%(4) | 1.82%(4) | 1.78%(4) | 126% | $1,525 | ||
2018 | $9.85 | 0.19 | 0.57 | 0.76 | (0.21) | $10.40 | 7.74% | 0.69% | 0.89% | 1.81% | 1.61% | 160% | $2,813 | ||
2017 | $9.46 | 0.18 | 0.21 | 0.39 | — | $9.85 | 4.12% | 0.69% | 0.89% | 1.88% | 1.68% | 173% | $1,608 | ||
2016 | $9.55 | 0.08 | (0.17) | (0.09) | — | $9.46 | (0.94)% | 0.70% | 0.90% | 0.67% | 0.47% | 152% | $1,384 | ||
2015 | $10.53 | 0.04 | (0.89) | (0.85) | (0.13) | $9.55 | (8.15)% | 0.69% | 0.89% | 0.44% | 0.24% | 93% | $1,102 | ||
2014 | $9.94 | 0.05 | 0.58 | 0.63 | (0.04) | $10.53 | 6.28% | 0.71% | 0.89% | 0.47% | 0.29% | 87% | $1,360 |
For a Share Outstanding Throughout the Years Ended June 30 (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) | |||
A Class | |||||||||||||||
2018(3) | $10.26 | 0.07 | (0.60) | (0.53) | (0.18) | $9.55 | (5.29)% | 1.13%(4) | 1.17%(4) | 1.37%(4) | 1.33%(4) | 126% | $1,704 | ||
2018 | $9.73 | 0.14 | 0.56 | 0.70 | (0.17) | $10.26 | 7.15% | 1.14% | 1.34% | 1.36% | 1.16% | 160% | $1,892 | ||
2017 | $9.38 | 0.13 | 0.22 | 0.35 | — | $9.73 | 3.73% | 1.14% | 1.34% | 1.43% | 1.23% | 173% | $1,964 | ||
2016 | $9.51 | 0.03 | (0.16) | (0.13) | — | $9.38 | (1.37)% | 1.15% | 1.35% | 0.22% | 0.02% | 152% | $4,587 | ||
2015 | $10.45 | —(5) | (0.89) | (0.89) | (0.05) | $9.51 | (8.59)% | 1.14% | 1.34% | (0.01)% | (0.21)% | 93% | $8,385 | ||
2014 | $9.87 | —(5) | 0.58 | 0.58 | — | $10.45 | 5.88% | 1.16% | 1.34% | 0.02% | (0.16)% | 87% | $14,044 | ||
C Class | |||||||||||||||
2018(3) | $9.86 | 0.03 | (0.58) | (0.55) | (0.16) | $9.15 | (5.70)% | 1.88%(4) | 1.92%(4) | 0.62%(4) | 0.58%(4) | 126% | $1,136 | ||
2018 | $9.35 | 0.06 | 0.54 | 0.60 | (0.09) | $9.86 | 6.42% | 1.89% | 2.09% | 0.61% | 0.41% | 160% | $1,284 | ||
2017 | $9.09 | 0.06 | 0.20 | 0.26 | — | $9.35 | 2.86% | 1.89% | 2.09% | 0.68% | 0.48% | 173% | $1,655 | ||
2016 | $9.28 | (0.05) | (0.14) | (0.19) | — | $9.09 | (2.05)% | 1.90% | 2.10% | (0.53)% | (0.73)% | 152% | $2,310 | ||
2015 | $10.23 | (0.08) | (0.87) | (0.95) | — | $9.28 | (9.29)% | 1.89% | 2.09% | (0.76)% | (0.96)% | 93% | $5,479 | ||
2014 | $9.74 | (0.07) | 0.56 | 0.49 | — | $10.23 | 5.03% | 1.91% | 2.09% | (0.73)% | (0.91)% | 87% | $9,029 | ||
R Class | |||||||||||||||
2018(3) | $10.14 | 0.06 | (0.61) | (0.55) | (0.17) | $9.42 | (5.52)% | 1.38%(4) | 1.42%(4) | 1.12%(4) | 1.08%(4) | 126% | $16 | ||
2018 | $9.61 | 0.11 | 0.56 | 0.67 | (0.14) | $10.14 | 6.98% | 1.39% | 1.59% | 1.11% | 0.91% | 160% | $15 | ||
2017 | $9.29 | 0.11 | 0.21 | 0.32 | — | $9.61 | 3.44% | 1.39% | 1.59% | 1.18% | 0.98% | 173% | $113 | ||
2016 | $9.44 | 0.01 | (0.16) | (0.15) | — | $9.29 | (1.59)% | 1.40% | 1.60% | (0.03)% | (0.23)% | 152% | $105 | ||
2015 | $10.38 | (0.03) | (0.89) | (0.92) | (0.02) | $9.44 | (8.88)% | 1.39% | 1.59% | (0.26)% | (0.46)% | 93% | $106 | ||
2014 | $9.83 | (0.02) | 0.57 | 0.55 | — | $10.38 | 5.60% | 1.41% | 1.59% | (0.23)% | (0.41)% | 87% | $116 |
For a Share Outstanding Throughout the Years Ended June 30 (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) | |||
R5 Class | |||||||||||||||
2018(3) | $10.40 | 0.10 | (0.63) | (0.53) | (0.19) | $9.68 | (5.21)% | 0.68%(4) | 0.72%(4) | 1.82%(4) | 1.78%(4) | 126% | $119 | ||
2018 | $9.85 | 0.19 | 0.57 | 0.76 | (0.21) | $10.40 | 7.74% | 0.69% | 0.89% | 1.81% | 1.61% | 160% | $122 | ||
2017(6) | $9.77 | 0.05 | 0.03 | 0.08 | — | $9.85 | 0.82% | 0.69%(4) | 0.89%(4) | 2.42%(4) | 2.22%(4) | 173%(7) | $5 |
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 and do not reflect applicable sales charges, if any. Total returns for periods less than one year are not annualized. |
(3) | Six months ended December 31, 2018 (unaudited). |
(4) | Annualized. |
(5) | Per-share amount was less than $0.005. |
(6) | April 10, 2017 (commencement of sale) through June 30, 2017. |
(7) | Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended June 30, 2017. |
See Notes to Financial Statements.
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
Descriptions of the principles and policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund are available without charge, upon request, by calling 1-800-345-2021 or visiting the "About Us" page of American Century Investments’ website at americancentury.com. A description of the policies is also available 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. 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.
35
Notes |
36
Contact Us | americancentury.com | |
Automated Information Line | 1-800-345-8765 | |
Investor Services Representative | 1-800-345-2021 or 816-531-5575 | |
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 Quantitative Equity 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. | ||
©2019 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-91458 1902 |
Semiannual Report | |
December 31, 2018 | |
NT Core Equity Plus Fund | |
G Class (ACNKX) |
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the fund’s shareholder reports like this one will no longer be sent by mail, unless you specifically request paper copies of the reports from the fund or from your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the fund or your financial intermediary electronically by calling or sending an email request to your appropriate contacts as listed on the back cover of this report.
You may elect to receive all future reports in paper free of charge. You can inform the fund or your financial intermediary that you wish to continue receiving paper copies of your shareholder reports by calling or sending an email request to your appropriate contacts as listed on the back cover of this report. Your election to receive reports in paper will apply to all funds held with the fund complex/your financial intermediary.
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.
Fund Characteristics |
DECEMBER 31, 2018 | |
Top Ten Long Holdings | % of net assets |
Apple, Inc. | 4.07% |
Microsoft Corp. | 3.94% |
Amazon.com, Inc. | 3.53% |
Alphabet, Inc., Class A | 3.51% |
JPMorgan Chase & Co. | 2.22% |
Facebook, Inc., Class A | 1.98% |
Verizon Communications, Inc. | 1.86% |
Intel Corp. | 1.79% |
Visa, Inc., Class A | 1.78% |
Bank of America Corp. | 1.75% |
Top Five Short Holdings | % of net assets |
Monro, Inc. | (0.92)% |
United Bankshares, Inc. | (0.87)% |
Cree, Inc. | (0.85)% |
Avanos Medical, Inc. | (0.83)% |
Leggett & Platt, Inc. | (0.82)% |
Types of Investments in Portfolio | % of net assets |
Common Stocks | 127.0% |
Common Stocks Sold Short | (28.6)% |
Temporary Cash Investments | 1.6% |
Other Assets and Liabilities | —* |
*Category is less than 0.05% of total net assets.
2
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 July 1, 2018 to December 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.
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.
Beginning Account Value 7/1/18 | Ending Account Value 12/31/18 | Expenses Paid During Period(1) 7/1/18 - 12/31/18 | Annualized Expense Ratio(1) | |
Actual | ||||
G Class | $1,000 | $919.30 | $3.00 | 0.62% |
Hypothetical | ||||
G Class | $1,000 | $1,022.08 | $3.16 | 0.62% |
(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. |
3
Schedule of Investments |
DECEMBER 31, 2018 (UNAUDITED)
Shares | Value | ||||
COMMON STOCKS — 127.0% | |||||
Aerospace and Defense — 3.7% | |||||
Boeing Co. (The)(1) | 21,779 | $ | 7,023,727 | ||
Curtiss-Wright Corp. | 11,390 | 1,163,147 | |||
Raytheon Co.(1) | 30,825 | 4,727,014 | |||
Teledyne Technologies, Inc.(2) | 2,054 | 425,322 | |||
Textron, Inc. | 73,989 | 3,402,754 | |||
16,741,964 | |||||
Banks — 9.7% | |||||
Bank of America Corp.(1) | 319,627 | 7,875,609 | |||
BB&T Corp.(1) | 104,505 | 4,527,157 | |||
Citigroup, Inc. | 8,931 | 464,948 | |||
Comerica, Inc. | 47,979 | 3,295,678 | |||
Fifth Third Bancorp | 164,655 | 3,874,332 | |||
First Citizens BancShares, Inc., Class A | 5,730 | 2,160,496 | |||
JPMorgan Chase & Co.(1) | 102,369 | 9,993,262 | |||
SunTrust Banks, Inc. | 79,953 | 4,032,829 | |||
Wells Fargo & Co.(1) | 161,209 | 7,428,511 | |||
43,652,822 | |||||
Beverages — 1.4% | |||||
Coca-Cola Co. (The) | 92,296 | 4,370,216 | |||
Constellation Brands, Inc., Class A | 11,053 | 1,777,543 | |||
6,147,759 | |||||
Biotechnology — 4.2% | |||||
AbbVie, Inc. | 44,874 | 4,136,934 | |||
Alexion Pharmaceuticals, Inc.(2) | 3,686 | 358,869 | |||
Amgen, Inc. | 19,824 | 3,859,138 | |||
Biogen, Inc.(2) | 8,001 | 2,407,661 | |||
Celgene Corp.(2) | 30,890 | 1,979,740 | |||
Emergent BioSolutions, Inc.(2) | 10,204 | 604,893 | |||
Gilead Sciences, Inc. | 14,193 | 887,772 | |||
Incyte Corp.(2) | 20,404 | 1,297,490 | |||
Regeneron Pharmaceuticals, Inc.(2) | 3,791 | 1,415,939 | |||
Vertex Pharmaceuticals, Inc.(2) | 11,833 | 1,960,847 | |||
18,909,283 | |||||
Building Products — 0.2% | |||||
Johnson Controls International plc | 33,062 | 980,288 | |||
Capital Markets — 0.6% | |||||
LPL Financial Holdings, Inc. | 47,699 | 2,913,455 | |||
Chemicals — 0.9% | |||||
CF Industries Holdings, Inc. | 92,755 | 4,035,770 | |||
Commercial Services and Supplies — 2.7% | |||||
Clean Harbors, Inc.(2) | 39,017 | 1,925,489 | |||
MSA Safety, Inc. | 33,628 | 3,170,111 | |||
Republic Services, Inc. | 54,493 | 3,928,400 | |||
Waste Management, Inc. | 36,935 | 3,286,846 | |||
12,310,846 |
4
Shares | Value | ||||
Communications Equipment — 2.3% | |||||
Ciena Corp.(2) | 82,950 | $ | 2,812,834 | ||
Cisco Systems, Inc.(1) | 174,942 | 7,580,237 | |||
10,393,071 | |||||
Construction and Engineering — 0.1% | |||||
EMCOR Group, Inc. | 4,849 | 289,437 | |||
Consumer Finance — 2.9% | |||||
American Express Co.(1) | 47,512 | 4,528,844 | |||
Capital One Financial Corp. | 39,293 | 2,970,158 | |||
Discover Financial Services | 68,186 | 4,021,610 | |||
Synchrony Financial | 67,532 | 1,584,301 | |||
13,104,913 | |||||
Containers and Packaging — 0.4% | |||||
WestRock Co. | 51,977 | 1,962,651 | |||
Diversified Consumer Services — 0.8% | |||||
Graham Holdings Co., Class B | 5,766 | 3,693,584 | |||
Diversified Financial Services — 1.0% | |||||
Berkshire Hathaway, Inc., Class B(2) | 21,763 | 4,443,569 | |||
Diversified Telecommunication Services — 2.1% | |||||
AT&T, Inc. | 34,498 | 984,573 | |||
Verizon Communications, Inc.(1) | 148,847 | 8,368,178 | |||
9,352,751 | |||||
Electric Utilities — 0.6% | |||||
OGE Energy Corp. | 64,478 | 2,526,893 | |||
Electrical Equipment — 0.9% | |||||
Generac Holdings, Inc.(2) | 66,947 | 3,327,266 | |||
Rockwell Automation, Inc. | 5,257 | 791,073 | |||
4,118,339 | |||||
Electronic Equipment, Instruments and Components — 2.0% | |||||
Keysight Technologies, Inc.(2) | 32,146 | 1,995,624 | |||
National Instruments Corp. | 56,368 | 2,557,980 | |||
Tech Data Corp.(2) | 4,461 | 364,954 | |||
Zebra Technologies Corp., Class A(2) | 25,677 | 4,088,549 | |||
9,007,107 | |||||
Energy Equipment and Services — 0.9% | |||||
Halliburton Co. | 155,946 | 4,145,045 | |||
Entertainment — 0.8% | |||||
Activision Blizzard, Inc. | 60,639 | 2,823,958 | |||
Electronic Arts, Inc.(2) | 11,780 | 929,560 | |||
3,753,518 | |||||
Equity Real Estate Investment Trusts (REITs) — 3.1% | |||||
Brixmor Property Group, Inc. | 287,782 | 4,227,518 | |||
GEO Group, Inc. (The) | 196,632 | 3,873,650 | |||
Healthcare Trust of America, Inc., Class A | 48,623 | 1,230,648 | |||
Host Hotels & Resorts, Inc. | 96,667 | 1,611,439 | |||
PS Business Parks, Inc. | 3,190 | 417,890 | |||
Rayonier, Inc. | 50,324 | 1,393,471 | |||
Ryman Hospitality Properties, Inc. | 15,084 | 1,005,952 | |||
13,760,568 | |||||
Food and Staples Retailing — 1.4% | |||||
Performance Food Group Co.(2) | 78,444 | 2,531,388 |
5
Shares | Value | ||||
US Foods Holding Corp.(2) | 116,759 | $ | 3,694,255 | ||
6,225,643 | |||||
Food Products — 0.6% | |||||
General Mills, Inc. | 66,689 | 2,596,870 | |||
Health Care Equipment and Supplies — 6.8% | |||||
Danaher Corp. | 29,918 | 3,085,144 | |||
DexCom, Inc.(2) | 15,838 | 1,897,392 | |||
Globus Medical, Inc., Class A(2) | 78,803 | 3,410,594 | |||
Hill-Rom Holdings, Inc. | 36,941 | 3,271,126 | |||
ICU Medical, Inc.(2) | 16,197 | 3,719,317 | |||
Integer Holdings Corp.(2) | 25,773 | 1,965,449 | |||
Masimo Corp.(2) | 2,941 | 315,775 | |||
Medtronic plc | 66,989 | 6,093,319 | |||
NuVasive, Inc.(2) | 68,225 | 3,381,231 | |||
STERIS plc | 30,635 | 3,273,350 | |||
30,412,697 | |||||
Health Care Providers and Services — 1.5% | |||||
Amedisys, Inc.(2) | 26,834 | 3,142,530 | |||
HCA Healthcare, Inc. | 7,845 | 976,310 | |||
Tenet Healthcare Corp.(2) | 45,559 | 780,881 | |||
UnitedHealth Group, Inc. | 7,030 | 1,751,314 | |||
6,651,035 | |||||
Health Care Technology — 0.2% | |||||
athenahealth, Inc.(2) | 6,012 | 793,163 | |||
Hotels, Restaurants and Leisure — 1.2% | |||||
Darden Restaurants, Inc. | 31,342 | 3,129,812 | |||
Starbucks Corp. | 35,479 | 2,284,848 | |||
5,414,660 | |||||
Household Durables — 3.0% | |||||
KB Home | 215,664 | 4,119,183 | |||
NVR, Inc.(2) | 1,770 | 4,313,472 | |||
PulteGroup, Inc. | 145,208 | 3,773,956 | |||
Toll Brothers, Inc. | 41,597 | 1,369,789 | |||
13,576,400 | |||||
Household Products — 0.2% | |||||
Procter & Gamble Co. (The) | 11,604 | 1,066,640 | |||
Independent Power and Renewable Electricity Producers — 0.8% | |||||
AES Corp. | 252,523 | 3,651,483 | |||
Industrial Conglomerates — 1.7% | |||||
General Electric Co. | 164,649 | 1,246,393 | |||
Honeywell International, Inc.(1) | 49,780 | 6,576,933 | |||
7,823,326 | |||||
Insurance — 2.9% | |||||
Hartford Financial Services Group, Inc. (The)(1) | 108,262 | 4,812,246 | |||
Progressive Corp. (The) | 68,811 | 4,151,368 | |||
Travelers Cos., Inc. (The) | 33,307 | 3,988,513 | |||
12,952,127 | |||||
Interactive Media and Services — 5.5% | |||||
Alphabet, Inc., Class A(1)(2) | 15,115 | 15,794,571 | |||
Facebook, Inc., Class A(1)(2) | 67,958 | 8,908,614 | |||
24,703,185 |
6
Shares | Value | ||||
Internet and Direct Marketing Retail — 5.1% | |||||
Amazon.com, Inc.(2) | 10,587 | $ | 15,901,357 | ||
eBay, Inc.(1)(2) | 175,060 | 4,913,934 | |||
Stamps.com, Inc.(2) | 12,586 | 1,958,885 | |||
22,774,176 | |||||
IT Services — 3.4% | |||||
Akamai Technologies, Inc.(2) | 65,791 | 4,018,514 | |||
Booz Allen Hamilton Holding Corp. | 32,769 | 1,476,899 | |||
International Business Machines Corp. | 12,688 | 1,442,245 | |||
MAXIMUS, Inc. | 8,536 | 555,608 | |||
Visa, Inc., Class A(1) | 60,875 | 8,031,848 | |||
15,525,114 | |||||
Leisure Products — 0.7% | |||||
Brunswick Corp. | 65,752 | 3,054,180 | |||
Life Sciences Tools and Services — 1.6% | |||||
Agilent Technologies, Inc. | 26,861 | 1,812,043 | |||
Thermo Fisher Scientific, Inc.(1) | 23,980 | 5,366,484 | |||
7,178,527 | |||||
Machinery — 2.3% | |||||
Allison Transmission Holdings, Inc. | 42,912 | 1,884,266 | |||
Parker-Hannifin Corp. | 28,458 | 4,244,226 | |||
Snap-on, Inc. | 27,669 | 4,020,029 | |||
10,148,521 | |||||
Media — 0.3% | |||||
Comcast Corp., Class A | 33,564 | 1,142,854 | |||
Metals and Mining — 0.7% | |||||
Steel Dynamics, Inc. | 109,296 | 3,283,252 | |||
Multiline Retail — 1.0% | |||||
Kohl's Corp. | 70,018 | 4,644,994 | |||
Oil, Gas and Consumable Fuels — 7.3% | |||||
Chevron Corp. | 43,392 | 4,720,616 | |||
ConocoPhillips(1) | 92,522 | 5,768,747 | |||
Continental Resources, Inc.(2) | 73,789 | 2,965,580 | |||
CVR Energy, Inc. | 113,056 | 3,898,171 | |||
EOG Resources, Inc. | 29,036 | 2,532,229 | |||
Exxon Mobil Corp. | 43,017 | 2,933,329 | |||
HollyFrontier Corp. | 35,994 | 1,840,013 | |||
Marathon Petroleum Corp. | 41,374 | 2,441,480 | |||
Newfield Exploration Co.(2) | 63,527 | 931,306 | |||
Occidental Petroleum Corp. | 43,853 | 2,691,697 | |||
Phillips 66 | 24,721 | 2,129,714 | |||
32,852,882 | |||||
Paper and Forest Products — 1.2% | |||||
Domtar Corp. | 99,774 | 3,505,060 | |||
Louisiana-Pacific Corp. | 80,621 | 1,791,399 | |||
5,296,459 | |||||
Personal Products — 0.3% | |||||
Edgewell Personal Care Co.(2) | 39,319 | 1,468,565 | |||
Pharmaceuticals — 5.7% | |||||
Allergan plc | 13,459 | 1,798,930 | |||
Bristol-Myers Squibb Co. | 58,176 | 3,023,988 |
7
Shares | Value | ||||
Eli Lilly & Co. | 10,661 | $ | 1,233,691 | ||
Horizon Pharma plc(2) | 51,472 | 1,005,763 | |||
Jazz Pharmaceuticals plc(2) | 6,161 | 763,718 | |||
Johnson & Johnson(1) | 49,368 | 6,370,940 | |||
Merck & Co., Inc. | 39,561 | 3,022,856 | |||
Pfizer, Inc.(1) | 151,478 | 6,612,015 | |||
Zoetis, Inc. | 22,542 | 1,928,243 | |||
25,760,144 | |||||
Professional Services — 2.5% | |||||
ASGN, Inc.(2) | 10,395 | 566,528 | |||
CoStar Group, Inc.(2) | 7,483 | 2,524,315 | |||
Insperity, Inc. | 8,755 | 817,367 | |||
Korn/Ferry International | 76,769 | 3,035,446 | |||
Robert Half International, Inc. | 73,982 | 4,231,770 | |||
11,175,426 | |||||
Road and Rail — 1.1% | |||||
Norfolk Southern Corp.(1) | 33,231 | 4,969,364 | |||
Semiconductors and Semiconductor Equipment — 4.7% | |||||
Broadcom, Inc. | 10,325 | 2,625,441 | |||
Cabot Microelectronics Corp. | 19,148 | 1,825,762 | |||
Cirrus Logic, Inc.(2) | 73,404 | 2,435,545 | |||
Intel Corp.(1) | 172,176 | 8,080,220 | |||
ON Semiconductor Corp.(2) | 118,943 | 1,963,749 | |||
Qorvo, Inc.(2) | 29,025 | 1,762,688 | |||
QUALCOMM, Inc. | 41,784 | 2,377,927 | |||
21,071,332 | |||||
Software — 8.6% | |||||
Adobe, Inc.(1)(2) | 24,670 | 5,581,341 | |||
Cadence Design Systems, Inc.(2) | 75,880 | 3,299,262 | |||
Intuit, Inc. | 14,221 | 2,799,404 | |||
LogMeIn, Inc. | 7,171 | 584,938 | |||
Microsoft Corp.(1) | 174,562 | 17,730,262 | |||
Proofpoint, Inc.(2) | 10,813 | 906,238 | |||
Teradata Corp.(2) | 78,001 | 2,992,118 | |||
Ultimate Software Group, Inc. (The)(2) | 10,339 | 2,531,711 | |||
VMware, Inc., Class A | 15,999 | 2,193,943 | |||
38,619,217 | |||||
Specialty Retail — 3.0% | |||||
American Eagle Outfitters, Inc. | 23,811 | 460,267 | |||
AutoZone, Inc.(2) | 5,094 | 4,270,504 | |||
Foot Locker, Inc. | 11,203 | 596,000 | |||
O'Reilly Automotive, Inc.(2) | 7,822 | 2,693,349 | |||
Ross Stores, Inc. | 21,133 | 1,758,265 | |||
Urban Outfitters, Inc.(2) | 117,287 | 3,893,928 | |||
13,672,313 | |||||
Technology Hardware, Storage and Peripherals — 5.0% | |||||
Apple, Inc.(1) | 116,163 | 18,323,552 | |||
HP, Inc. | 132,911 | 2,719,359 | |||
Seagate Technology plc | 37,288 | 1,438,944 | |||
22,481,855 |
8
Shares | Value | ||||
Textiles, Apparel and Luxury Goods — 2.7% | |||||
Deckers Outdoor Corp.(2) | 32,380 | $ | 4,143,021 | ||
Michael Kors Holdings Ltd.(2) | 39,757 | 1,507,585 | |||
NIKE, Inc., Class B | 10,437 | 773,799 | |||
Ralph Lauren Corp. | 19,623 | 2,030,196 | |||
Tapestry, Inc. | 114,170 | 3,853,238 | |||
12,307,839 | |||||
Thrifts and Mortgage Finance — 0.8% | |||||
Essent Group Ltd.(2) | 109,882 | 3,755,767 | |||
Trading Companies and Distributors — 1.1% | |||||
HD Supply Holdings, Inc.(2) | 87,485 | 3,282,437 | |||
W.W. Grainger, Inc. | 5,837 | 1,648,135 | |||
4,930,572 | |||||
Wireless Telecommunication Services — 0.8% | |||||
Telephone & Data Systems, Inc. | 83,566 | 2,719,238 | |||
United States Cellular Corp.(2) | 15,163 | 788,021 | |||
3,507,259 | |||||
TOTAL COMMON STOCKS (Cost $527,296,723) | 571,731,474 | ||||
TEMPORARY CASH INVESTMENTS — 1.6% | |||||
Repurchase Agreement, BMO Capital Markets Corp., (collateralized by various U.S. Treasury obligations, 0.125% - 2.75%, 10/31/19 - 2/15/44, valued at $6,337,348), in a joint trading account at 2.45%, dated 12/31/18, due 1/2/19 (Delivery value $6,214,741) | 6,213,895 | ||||
Repurchase Agreement, Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 3.375%, 11/15/48, valued at $1,058,143), at 1.25%, dated 12/31/18, due 1/2/19 (Delivery value $1,037,072) | 1,037,000 | ||||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $7,250,895) | 7,250,895 | ||||
TOTAL INVESTMENT SECURITIES BEFORE SECURITIES SOLD SHORT — 128.6% (Cost $534,547,618) | 578,982,369 | ||||
COMMON STOCKS SOLD SHORT — (28.6)% | |||||
Aerospace and Defense — (0.5)% | |||||
BWX Technologies, Inc. | (64,832 | ) | (2,478,527 | ) | |
Airlines — (0.2)% | |||||
Allegiant Travel Co. | (4,191 | ) | (420,022 | ) | |
Spirit Airlines, Inc. | (7,289 | ) | (422,179 | ) | |
(842,201 | ) | ||||
Banks — (3.5)% | |||||
First Financial Bancorp | (114,023 | ) | (2,704,625 | ) | |
First Midwest Bancorp, Inc. | (34,571 | ) | (684,851 | ) | |
Home BancShares, Inc. | (29,402 | ) | (480,429 | ) | |
Old National Bancorp | (61,154 | ) | (941,772 | ) | |
Pinnacle Financial Partners, Inc. | (73,729 | ) | (3,398,907 | ) | |
Sterling Bancorp | (73,955 | ) | (1,220,997 | ) | |
Union Bankshares Corp. | (83,505 | ) | (2,357,346 | ) | |
United Bankshares, Inc. | (126,145 | ) | (3,924,371 | ) | |
(15,713,298 | ) | ||||
Biotechnology — (1.1)% | |||||
Alnylam Pharmaceuticals, Inc. | (15,291 | ) | (1,114,867 | ) | |
Global Blood Therapeutics, Inc. | (30,093 | ) | (1,235,318 | ) | |
Immunomedics, Inc. | (59,178 | ) | (844,470 | ) | |
Sage Therapeutics, Inc. | (6,074 | ) | (581,828 | ) |
9
Shares | Value | ||||
Sarepta Therapeutics, Inc. | (9,436 | ) | $ | (1,029,751 | ) |
(4,806,234 | ) | ||||
Chemicals — (0.1)% | |||||
Albemarle Corp. | (5,460 | ) | (420,802 | ) | |
Sensient Technologies Corp. | (3,567 | ) | (199,217 | ) | |
(620,019 | ) | ||||
Commercial Services and Supplies — (0.4)% | |||||
Healthcare Services Group, Inc. | (42,463 | ) | (1,706,163 | ) | |
Construction and Engineering — (1.4)% | |||||
Fluor Corp. | (53,012 | ) | (1,706,986 | ) | |
Granite Construction, Inc. | (78,699 | ) | (3,169,996 | ) | |
MasTec, Inc. | (6,507 | ) | (263,924 | ) | |
Valmont Industries, Inc. | (11,962 | ) | (1,327,184 | ) | |
(6,468,090 | ) | ||||
Consumer Finance — (0.7)% | |||||
SLM Corp. | (369,836 | ) | (3,073,337 | ) | |
Containers and Packaging — (1.9)% | |||||
AptarGroup, Inc. | (38,629 | ) | (3,633,830 | ) | |
Crown Holdings, Inc. | (39,265 | ) | (1,632,246 | ) | |
Graphic Packaging Holding Co. | (295,766 | ) | (3,146,950 | ) | |
(8,413,026 | ) | ||||
Distributors — (0.4)% | |||||
LKQ Corp. | (70,699 | ) | (1,677,687 | ) | |
Diversified Telecommunication Services — (0.3)% | |||||
Zayo Group Holdings, Inc. | (62,113 | ) | (1,418,661 | ) | |
Electronic Equipment, Instruments and Components — (1.1)% | |||||
Avnet, Inc. | (20,012 | ) | (722,433 | ) | |
Cognex Corp. | (20,805 | ) | (804,529 | ) | |
II-VI, Inc. | (103,693 | ) | (3,365,875 | ) | |
(4,892,837 | ) | ||||
Energy Equipment and Services — (0.8)% | |||||
Oceaneering International, Inc. | (166,261 | ) | (2,011,758 | ) | |
Patterson-UTI Energy, Inc. | (157,685 | ) | (1,632,040 | ) | |
(3,643,798 | ) | ||||
Health Care Equipment and Supplies — (1.6)% | |||||
Avanos Medical, Inc. | (83,665 | ) | (3,747,355 | ) | |
Wright Medical Group NV | (122,404 | ) | (3,331,837 | ) | |
(7,079,192 | ) | ||||
Health Care Providers and Services — (0.2)% | |||||
Henry Schein, Inc. | (13,134 | ) | (1,031,282 | ) | |
Hotels, Restaurants and Leisure — (1.2)% | |||||
Churchill Downs, Inc. | (9,331 | ) | (2,276,204 | ) | |
Planet Fitness, Inc., Class A | (39,953 | ) | (2,142,280 | ) | |
Scientific Games Corp., Class A | (43,517 | ) | (778,084 | ) | |
(5,196,568 | ) | ||||
Household Durables — (1.7)% | |||||
Leggett & Platt, Inc. | (103,027 | ) | (3,692,488 | ) | |
Mohawk Industries, Inc. | (13,954 | ) | (1,632,060 | ) | |
Tempur Sealy International, Inc. | (60,796 | ) | (2,516,954 | ) | |
(7,841,502 | ) |
10
Shares | Value | ||||
Independent Power and Renewable Electricity Producers — (0.2)% | |||||
Ormat Technologies, Inc. | (18,284 | ) | $ | (956,253 | ) |
Insurance — (0.2)% | |||||
WR Berkley Corp. | (12,696 | ) | (938,361 | ) | |
Internet and Direct Marketing Retail — (0.3)% | |||||
Wayfair, Inc., Class A | (14,675 | ) | (1,321,924 | ) | |
IT Services — (0.7)% | |||||
Gartner, Inc. | (17,744 | ) | (2,268,393 | ) | |
Worldpay, Inc., Class A | (10,803 | ) | (825,673 | ) | |
(3,094,066 | ) | ||||
Life Sciences Tools and Services — (0.3)% | |||||
PerkinElmer, Inc. | (15,743 | ) | (1,236,613 | ) | |
Machinery — (1.7)% | |||||
Donaldson Co., Inc. | (58,434 | ) | (2,535,451 | ) | |
John Bean Technologies Corp. | (31,925 | ) | (2,292,534 | ) | |
Middleby Corp. (The) | (21,298 | ) | (2,187,944 | ) | |
Stanley Black & Decker, Inc. | (4,933 | ) | (590,678 | ) | |
(7,606,607 | ) | ||||
Marine — (0.2)% | |||||
Kirby Corp. | (15,610 | ) | (1,051,490 | ) | |
Media — (0.8)% | |||||
Loral Space & Communications, Inc. | (7,541 | ) | (280,902 | ) | |
New York Times Co. (The), Class A | (153,081 | ) | (3,412,176 | ) | |
(3,693,078 | ) | ||||
Metals and Mining — (0.5)% | |||||
Alcoa Corp. | (68,027 | ) | (1,808,158 | ) | |
Goldcorp, Inc. | (32,642 | ) | (319,891 | ) | |
(2,128,049 | ) | ||||
Mortgage Real Estate Investment Trusts (REITs) — (0.2)% | |||||
Starwood Property Trust, Inc. | (41,744 | ) | (822,774 | ) | |
Oil, Gas and Consumable Fuels — (1.1)% | |||||
Matador Resources Co. | (22,502 | ) | (349,456 | ) | |
Noble Energy, Inc. | (16,865 | ) | (316,387 | ) | |
QEP Resources, Inc. | (73,864 | ) | (415,854 | ) | |
Targa Resources Corp. | (76,839 | ) | (2,767,741 | ) | |
Williams Cos., Inc. (The) | (42,853 | ) | (944,909 | ) | |
(4,794,347 | ) | ||||
Pharmaceuticals — (0.4)% | |||||
Aerie Pharmaceuticals, Inc. | (26,228 | ) | (946,831 | ) | |
Catalent, Inc. | (29,095 | ) | (907,182 | ) | |
(1,854,013 | ) | ||||
Professional Services — (0.3)% | |||||
Nielsen Holdings plc | (46,037 | ) | (1,074,043 | ) | |
TriNet Group, Inc. | (5,673 | ) | (237,983 | ) | |
(1,312,026 | ) | ||||
Real Estate Management and Development — (1.1)% | |||||
Howard Hughes Corp. (The) | (30,855 | ) | (3,012,065 | ) | |
Kennedy-Wilson Holdings, Inc. | (118,761 | ) | (2,157,888 | ) | |
(5,169,953 | ) | ||||
Semiconductors and Semiconductor Equipment — (0.9)% | |||||
Cree, Inc. | (89,808 | ) | (3,841,537 | ) |
11
Shares | Value | ||||
First Solar, Inc. | (9,062 | ) | $ | (384,727 | ) |
(4,226,264 | ) | ||||
Software — (0.6)% | |||||
2U, Inc. | (52,010 | ) | (2,585,937 | ) | |
Specialty Retail — (0.9)% | |||||
Monro, Inc. | (60,592 | ) | (4,165,700 | ) | |
Thrifts and Mortgage Finance — (0.4)% | |||||
TFS Financial Corp. | (112,387 | ) | (1,812,802 | ) | |
Trading Companies and Distributors — (0.3)% | |||||
GATX Corp. | (16,113 | ) | (1,140,962 | ) | |
Water Utilities — (0.4)% | |||||
Aqua America, Inc. | (54,361 | ) | (1,858,603 | ) | |
TOTAL COMMON STOCKS SOLD SHORT (Proceeds $153,017,439) | (128,672,244 | ) | |||
OTHER ASSETS AND LIABILITIES† | 120,274 | ||||
TOTAL NET ASSETS — 100.0% | $ | 450,430,399 |
NOTES TO SCHEDULE OF INVESTMENTS |
† | Category is less than 0.05% of total net assets. |
(1) | Security, or a portion thereof, has been pledged at the custodian bank or with a broker for collateral requirements on securities sold short. At the period end, the aggregate value of securities pledged was $160,219,860. |
(2) | Non-income producing. |
See Notes to Financial Statements.
12
Statement of Assets and Liabilities |
DECEMBER 31, 2018 (UNAUDITED) | |||
Assets | |||
Investment securities, at value (cost of $534,547,618) | $ | 578,982,369 | |
Cash | 4,686 | ||
Receivable for capital shares sold | 3,494 | ||
Dividends and interest receivable | 427,253 | ||
579,417,802 | |||
Liabilities | |||
Securities sold short, at value (proceeds of $153,017,439) | 128,672,244 | ||
Dividend expense payable on securities sold short | 190,655 | ||
Fees and charges payable on borrowings for securities sold short | 124,504 | ||
128,987,403 | |||
Net Assets | $ | 450,430,399 | |
G Class Capital Shares, $0.01 Par Value | |||
Shares authorized | 320,000,000 | ||
Shares outstanding | 34,452,857 | ||
Net Asset Value Per Share | $ | 13.07 | |
Net Assets Consist of: | |||
Capital (par value and paid-in surplus) | $ | 375,065,166 | |
Distributable earnings | 75,365,233 | ||
$ | 450,430,399 |
See Notes to Financial Statements.
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Statement of Operations |
FOR THE SIX MONTHS ENDED DECEMBER 31, 2018 (UNAUDITED) | |||
Investment Income (Loss) | |||
Income: | |||
Dividends | $ | 5,896,179 | |
Interest | 45,979 | ||
5,942,158 | |||
Expenses: | |||
Dividend expense on securities sold short | 979,072 | ||
Fees and charges on borrowings for securities sold short | 715,835 | ||
Management fees | 3,001,560 | ||
Directors' fees and expenses | 19,512 | ||
Other expenses | 504 | ||
4,716,483 | |||
Fees waived | (3,001,560 | ) | |
1,714,923 | |||
Net investment income (loss) | 4,227,235 | ||
Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investment transactions | 34,498,655 | ||
Securities sold short transactions | (488,834 | ) | |
Futures contract transactions | (1,170,352 | ) | |
32,839,469 | |||
Change in net unrealized appreciation (depreciation) on: | |||
Investments | (104,836,709 | ) | |
Securities sold short | 28,842,307 | ||
(75,994,402 | ) | ||
Net realized and unrealized gain (loss) | (43,154,933 | ) | |
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | (38,927,698 | ) |
See Notes to Financial Statements.
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Statement of Changes in Net Assets |
SIX MONTHS ENDED DECEMBER 31, 2018 (UNAUDITED) AND YEAR ENDED JUNE 30, 2018 | ||||||
Increase (Decrease) in Net Assets | December 31, 2018 | June 30, 2018 | ||||
Operations | ||||||
Net investment income (loss) | $ | 4,227,235 | $ | 10,307,697 | ||
Net realized gain (loss) | 32,839,469 | 47,476,513 | ||||
Change in net unrealized appreciation (depreciation) | (75,994,402 | ) | 27,946,512 | |||
Net increase (decrease) in net assets resulting from operations | (38,927,698 | ) | 85,730,722 | |||
Distributions to Shareholders | ||||||
From earnings(1) | (74,248,723 | ) | (18,520,743 | ) | ||
Capital Share Transactions | ||||||
Proceeds from shares sold | 10,906,746 | 18,649,225 | ||||
Proceeds from reinvestment of distributions | 74,248,723 | 18,520,743 | ||||
Payments for shares redeemed | (95,245,452 | ) | (129,145,890 | ) | ||
Net increase (decrease) in net assets from capital share transactions | (10,089,983 | ) | (91,975,922 | ) | ||
Net increase (decrease) in net assets | (123,266,404 | ) | (24,765,943 | ) | ||
Net Assets | ||||||
Beginning of period | 573,696,803 | 598,462,746 | ||||
End of period | $ | 450,430,399 | $ | 573,696,803 | ||
Transactions in Shares of the Fund | ||||||
Sold | 655,407 | 1,133,604 | ||||
Issued in reinvestment of distributions | 5,451,900 | 1,098,889 | ||||
Redeemed | (5,614,019 | ) | (7,709,753 | ) | ||
Net increase (decrease) in shares of the fund | 493,288 | (5,477,260 | ) |
(1) | Prior period presentation has been updated to reflect the current period combination of distributions to shareholders from net investment income and net realized gains. Distributions from net investment income were $(9,744,111). Distributions from net realized gains were $(8,776,632). |
See Notes to Financial Statements.
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Statement of Cash Flows |
FOR THE SIX MONTHS ENDED DECEMBER 31, 2018 (UNAUDITED) | |||
Cash Flows From (Used In) Operating Activities | |||
Net increase (decrease) in net assets resulting from operations | $ | (38,927,698 | ) |
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash from (used in) operating activities: | |||
Purchases of investment securities | (369,504,643 | ) | |
Proceeds from investments sold | 467,496,403 | ||
Purchases to cover securities sold short | (116,763,667 | ) | |
Proceeds from securities sold short | 103,179,144 | ||
(Increase) decrease in short-term investments | (4,089 | ) | |
(Increase) decrease in receivable for investments sold | 27,421,058 | ||
(Increase) decrease in dividends and interest receivable | 122,315 | ||
Increase (decrease) in payable for investments purchased | (29,647,276 | ) | |
Increase (decrease) in dividend expense payable on securities sold short | 53,000 | ||
Increase (decrease) in fees and charges payable on borrowings for securities sold short | (18,542 | ) | |
Change in net unrealized (appreciation) depreciation on investments | 104,836,709 | ||
Net realized (gain) loss on investment transactions | (34,498,655 | ) | |
Change in net unrealized (appreciation) depreciation on securities sold short | (28,842,307 | ) | |
Net realized (gain) loss on securities sold short transactions | 488,834 | ||
Net cash from (used in) operating activities | 85,390,586 | ||
Cash Flows From (Used In) Financing Activities | |||
Proceeds from shares sold | 10,903,252 | ||
Payments for shares redeemed | (96,289,152 | ) | |
Net cash from (used in) financing activities | (85,385,900 | ) | |
Net Increase (Decrease) In Cash | 4,686 | ||
Cash at beginning of period | — | ||
Cash at end of period | 4,686 | ||
Supplemental disclosure of cash flow information: | |||
Non cash financing activities not included herein consist of all reinvestment of distributions of $74,248,723. |
See Notes to Financial Statements.
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Notes to Financial Statements |
DECEMBER 31, 2018 (UNAUDITED)
1. Organization
American Century Quantitative Equity 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. NT Core Equity Plus 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 is not permitted to invest in securities issued by companies assigned the Global Industry Classification Standard or the Bloomberg Industry Classification Standard for the tobacco industry. The fund offers the G Class.
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.
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. Exchange-traded futures contracts are valued at the settlement price as provided by the appropriate exchange.
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.
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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.
Securities Sold Short — The fund enters into short sales, which is selling securities it does not own, as part of its normal investment activities. Upon selling a security short, the fund will segregate cash, cash equivalents or other appropriate liquid securities in at least an amount equal to the current market value of the securities sold short until the fund replaces the borrowed security. Interest earned on segregated cash for securities sold short, if any, is reflected as interest income. The fund is required to pay any dividends or interest due on securities sold short. Such dividends and interest are recorded as an expense. The fund may pay fees or charges on the assets borrowed for securities sold short. These fees are calculated daily based upon the value of each security sold short and a rate that is dependent on the availability of such security. Liabilities for securities sold short are valued daily and changes in value are recorded as change in net unrealized appreciation (depreciation) on securities sold short. The fund records realized gain (loss) on a security sold short when it is terminated by the fund and includes as a component of net realized gain (loss) on securities sold short transactions.
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.
Segregated Assets — In accordance with the 1940 Act, the fund segregates assets on its books and records to cover certain types of investment securities and other financial instruments. ACIM monitors, on a daily basis, the securities segregated to ensure the fund designates a sufficient amount of liquid assets, marked-to-market daily. The fund may also receive assets or be required to pledge assets at the custodian bank or with a broker for collateral requirements.
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.
Distributions to Shareholders — Distributions from net investment income, if any, are generally declared and paid semiannually. Distributions from 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.
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Statement of Cash Flows — The Statement of Cash Flows has been prepared using the indirect method which requires net increase (decrease) in net assets resulting from operations to be adjusted to reconcile to net cash from (used in) operating activities. The beginning of period and end of period cash is the amount of domestic and foreign currency included in the fund's Statement of Assets and Liabilities and represents the cash on hand at the custodian bank and does not include any short-term investments or deposits for securities sold short.
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., and the corporation’s transfer agent, American Century Services, LLC, are wholly owned, directly or indirectly, by ACC. Various funds issued by American Century Asset Allocation Portfolios, Inc. own, in aggregate, 100% of the shares of the fund. Related parties do not invest in the fund for the purpose of exercising management or control.
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). The agreement provides that all expenses of managing and operating the fund, except expenses on securities sold short, 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 the daily net assets of the fund and paid monthly in arrears. The fee consists of (1) an Investment Category Fee based on the daily net assets of the fund and certain other accounts managed by the investment advisor that are in the same broad investment category as the fund and (2) a Complex Fee based on the assets of all the funds in the American Century Investments family of funds. The rates for the Investment Category Fee range from 0.9680% to 1.1500%. The rates for the Complex Fee range from 0.0500% to 0.1100%. The investment advisor agreed to waive the fund's management fee in its entirety. The investment advisor expects this waiver to remain in effect permanently and cannot terminate it without the approval of the Board of Directors. The effective annual management fee for the period ended December 31, 2018 was 1.09% before waiver and 0.00% after waiver.
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 $8,884,376 and $6,392,689, respectively. The effect of interfund transactions on the Statement of Operations was $38,563 in net realized gain (loss) on investment transactions.
4. Investment Transactions
Purchases and sales of investment securities and securities sold short, excluding short-term investments, for the period ended December 31, 2018 were $486,268,310 and $570,357,989, respectively.
5. 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, |
19
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.
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 | $ | 571,731,474 | — | — | ||||
Temporary Cash Investments | — | $ | 7,250,895 | — | ||||
$ | 571,731,474 | $ | 7,250,895 | — | ||||
Liabilities | ||||||||
Securities Sold Short | ||||||||
Common Stocks | $ | 128,672,244 | — | — |
6. Derivative Instruments
Equity Price Risk — The fund is subject to equity price risk in the normal course of pursuing its investment objectives. A fund may enter into futures contracts based on an equity index in order to manage its exposure to changes in market conditions. A fund may purchase futures contracts to gain exposure to increases in market value or sell futures contracts to protect against a decline in market value. Upon entering into a futures contract, a fund is required to deposit either cash or securities in an amount equal to a certain percentage of the contract value (initial margin). Subsequent payments (variation margin) are made or received daily, in cash, by a fund. The variation margin is equal to the daily change in the contract value and is recorded as unrealized gains and losses. A fund recognizes a realized gain or loss when the contract is closed or expires. Net realized and unrealized gains or losses occurring during the holding period of futures contracts are a component of net realized gain (loss) on futures contract transactions and change in net unrealized appreciation (depreciation) on futures contracts, respectively. One of the risks of entering into futures contracts is the possibility that the change in value of the contract may not correlate with the changes in value of the underlying securities. During the period, the fund participated in equity price risk derivative instruments for temporary investment purposes.
At period end, the fund did not have any derivative instruments disclosed on the Statement of Assets and Liabilities. For the six months ended December 31, 2018, the effect of equity price risk derivative instruments on the Statement of Operations was $(1,170,352) in net realized gain (loss) on futures contract transactions.
7. Risk Factors
The fund is subject to short sales risk. If the market price of a security increases after the fund borrows the security, the fund may suffer a loss when it replaces the borrowed security at the higher price. Any loss will be increased by the amount of compensation, interest or dividends, and transaction costs the fund must pay to the lender of the borrowed security.
The fund's investment strategy utilizes leverage, which can increase market exposure and subject the fund to greater risk and higher volatility.
If the fund is overweighted in a stock or sector, any negative development related to that stock or sector will have a greater impact on the fund than other funds that are not overweighted in that stock or sector.
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.
20
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 | $ | 535,985,718 | |
Gross tax appreciation of investments | $ | 90,818,509 | |
Gross tax depreciation of investments | (47,821,858 | ) | |
Net tax appreciation (depreciation) of investments | 42,996,651 | ||
Gross tax appreciation on securities sold short | 25,162,019 | ||
Gross tax depreciation on securities sold short | (1,287,256 | ) | |
Net tax appreciation (depreciation) | $ | 66,871,414 |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales.
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Financial Highlights |
For a Share Outstanding Throughout the Years Ended June 30 (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 | Operating Expenses (before expense waiver) | Operating Expenses (excluding expenses on securities sold short) | Net Investment Income (Loss) | Net Investment Income (Loss)(before expense waiver) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
G Class | ||||||||||||||||||
2018(3) | $16.89 | 0.13 | (1.42) | (1.29) | (0.12) | (2.41) | (2.53) | $13.07 | (8.07)% | 0.62%(4) | 1.71%(4) | 0.01%(4) | 1.53%(4) | 0.44%(4) | 69% | $450,430 | ||
2018 | $15.18 | 0.28 | 1.95 | 2.23 | (0.28) | (0.24) | (0.52) | $16.89 | 14.82% | 0.66% | 1.66% | 0.10% | 1.71% | 0.71% | 100% | $573,697 | ||
2017 | $13.10 | 0.09 | 2.08 | 2.17 | (0.09) | — | (0.09) | $15.18 | 16.45% | 1.79% | 1.79% | 1.10% | 0.64% | 0.64% | 111% | $598,463 | ||
2016 | $14.41 | 0.14 | (0.44) | (0.30) | (0.12) | (0.89) | (1.01) | $13.10 | (1.96)% | 1.68% | 1.68% | 1.10% | 1.01% | 1.01% | 109% | $530,104 | ||
2015 | $15.55 | 0.16 | 0.58 | 0.74 | (0.14) | (1.74) | (1.88) | $14.41 | 4.86% | 1.53% | 1.53% | 1.10% | 1.03% | 1.03% | 106% | $474,697 | ||
2014 | $13.05 | 0.13 | 3.33 | 3.46 | (0.12) | (0.84) | (0.96) | $15.55 | 27.10% | 1.57% | 1.57% | 1.10% | 0.88% | 0.88% | 104% | $386,877 |
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 December 31, 2018 (unaudited). |
(4) | Annualized. |
See Notes to Financial Statements.
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
Descriptions of the principles and policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund are available without charge, upon request, by calling 1-800-345-2021 or visiting the "About Us" page of American Century Investments’ website at americancentury.com. A description of the policies is also available 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. 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.
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Notes |
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 Quantitative Equity 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. | ||
©2019 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-91464 1902 |
Semiannual Report | |
December 31, 2018 | |
NT Disciplined Growth Fund | |
Investor Class (ANTDX) | |
G Class (ANDGX) |
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the fund’s shareholder reports like this one will no longer be sent by mail, unless you specifically request paper copies of the reports from the fund or from your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the fund or your financial intermediary electronically by calling or sending an email request to your appropriate contacts as listed on the back cover of this report.
You may elect to receive all future reports in paper free of charge. You can inform the fund or your financial intermediary that you wish to continue receiving paper copies of your shareholder reports by calling or sending an email request to your appropriate contacts as listed on the back cover of this report. Your election to receive reports in paper will apply to all funds held with the fund complex/your financial intermediary.
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.
Fund Characteristics |
DECEMBER 31, 2018 | |
Top Ten Holdings | % of net assets |
Apple, Inc. | 7.3% |
Amazon.com, Inc. | 5.9% |
Microsoft Corp. | 5.6% |
Alphabet, Inc., Class A | 5.2% |
Facebook, Inc., Class A | 3.3% |
Visa, Inc., Class A | 2.8% |
UnitedHealth Group, Inc. | 2.8% |
Boeing Co. (The) | 2.3% |
AbbVie, Inc. | 2.0% |
Amgen, Inc. | 1.8% |
Top Five Industries | % of net assets |
Software | 13.0% |
Interactive Media and Services | 8.5% |
Technology Hardware, Storage and Peripherals | 8.1% |
Biotechnology | 7.3% |
Internet and Direct Marketing Retail | 6.8% |
Types of Investments in Portfolio | % of net assets |
Common Stocks | 98.6% |
Temporary Cash Investments | 1.4% |
Other Assets and Liabilities | —* |
*Category is less than 0.05% of total net assets.
2
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 July 1, 2018 to December 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.
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.
Beginning Account Value 7/1/18 | Ending Account Value 12/31/18 | Expenses Paid During Period(1) 7/1/18 - 12/31/18 | Annualized Expense Ratio(1) | |
Actual | ||||
Investor Class | $1,000 | $895.50 | $4.87 | 1.02% |
G Class | $1,000 | $900.40 | $0.05 | 0.01% |
Hypothetical | ||||
Investor Class | $1,000 | $1,020.06 | $5.19 | 1.02% |
G Class | $1,000 | $1,025.16 | $0.05 | 0.01% |
(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. |
3
Schedule of Investments |
DECEMBER 31, 2018 (UNAUDITED)
Shares | Value | ||||
COMMON STOCKS — 98.6% | |||||
Aerospace and Defense — 3.4% | |||||
Astronics Corp.(1) | 1,326 | $ | 40,377 | ||
Astronics Corp., Class B(1) | 198 | 6,021 | |||
Boeing Co. (The) | 31,379 | 10,119,728 | |||
Raytheon Co. | 32,024 | 4,910,880 | |||
15,077,006 | |||||
Auto Components† | |||||
Stoneridge, Inc.(1) | 2,699 | 66,530 | |||
Banks — 1.1% | |||||
Central Pacific Financial Corp. | 108,767 | 2,648,477 | |||
Comerica, Inc. | 23,341 | 1,603,293 | |||
Independent Bank Corp. | 18,158 | 381,681 | |||
United Community Banks, Inc. | 7,241 | 155,392 | |||
4,788,843 | |||||
Beverages — 1.8% | |||||
Coca-Cola Co. (The) | 59,864 | 2,834,561 | |||
Constellation Brands, Inc., Class A | 13,593 | 2,186,026 | |||
PepsiCo, Inc. | 25,825 | 2,853,146 | |||
7,873,733 | |||||
Biotechnology — 7.3% | |||||
AbbVie, Inc. | 97,673 | 9,004,474 | |||
Amgen, Inc. | 42,156 | 8,206,509 | |||
Biogen, Inc.(1) | 20,045 | 6,031,941 | |||
Celgene Corp.(1) | 31,323 | 2,007,491 | |||
Genomic Health, Inc.(1) | 8,650 | 557,147 | |||
Incyte Corp.(1) | 58,104 | 3,694,833 | |||
Vertex Pharmaceuticals, Inc.(1) | 17,169 | 2,845,075 | |||
32,347,470 | |||||
Building Products — 0.1% | |||||
Continental Building Products, Inc.(1) | 10,598 | 269,719 | |||
Capital Markets — 1.2% | |||||
BGC Partners, Inc., Class A | 8,241 | 42,606 | |||
Blucora, Inc.(1) | 19,855 | 528,937 | |||
Interactive Brokers Group, Inc., Class A | 36,872 | 2,015,055 | |||
LPL Financial Holdings, Inc. | 9,155 | 559,187 | |||
TD Ameritrade Holding Corp. | 46,087 | 2,256,420 | |||
5,402,205 | |||||
Chemicals — 0.1% | |||||
Scotts Miracle-Gro Co. (The) | 644 | 39,580 | |||
Sherwin-Williams Co. (The) | 980 | 385,591 | |||
425,171 |
4
Shares | Value | ||||
Commercial Services and Supplies — 2.0% | |||||
MSA Safety, Inc. | 23,912 | $ | 2,254,184 | ||
Republic Services, Inc. | 57,354 | 4,134,650 | |||
Waste Management, Inc. | 30,238 | 2,690,880 | |||
9,079,714 | |||||
Communications Equipment — 0.1% | |||||
Arista Networks, Inc.(1) | 1,411 | 297,298 | |||
Quantenna Communications, Inc.(1) | 10,538 | 151,220 | |||
448,518 | |||||
Consumer Finance — 1.0% | |||||
Discover Financial Services | 56,382 | 3,325,410 | |||
Synchrony Financial | 57,208 | 1,342,100 | |||
4,667,510 | |||||
Diversified Telecommunication Services† | |||||
Vonage Holdings Corp.(1) | 8,623 | 75,279 | |||
Electronic Equipment, Instruments and Components — 2.2% | |||||
CDW Corp. | 42,488 | 3,443,653 | |||
FLIR Systems, Inc. | 52,956 | 2,305,704 | |||
National Instruments Corp. | 69,419 | 3,150,234 | |||
Zebra Technologies Corp., Class A(1) | 4,774 | 760,164 | |||
9,659,755 | |||||
Energy Equipment and Services — 0.9% | |||||
Halliburton Co. | 142,297 | 3,782,254 | |||
Entertainment — 1.3% | |||||
Electronic Arts, Inc.(1) | 54,407 | 4,293,257 | |||
Netflix, Inc.(1) | 2,538 | 679,321 | |||
Walt Disney Co. (The) | 6,125 | 671,606 | |||
5,644,184 | |||||
Equity Real Estate Investment Trusts (REITs) — 0.3% | |||||
GEO Group, Inc. (The) | 34,807 | 685,698 | |||
Tanger Factory Outlet Centers, Inc. | 33,505 | 677,471 | |||
1,363,169 | |||||
Food and Staples Retailing† | |||||
Walgreens Boots Alliance, Inc. | 1,073 | 73,318 | |||
Health Care Equipment and Supplies — 2.0% | |||||
CONMED Corp. | 9,218 | 591,796 | |||
DexCom, Inc.(1) | 20,539 | 2,460,572 | |||
ICU Medical, Inc.(1) | 14,956 | 3,434,346 | |||
Integer Holdings Corp.(1) | 28,497 | 2,173,181 | |||
Surmodics, Inc.(1) | 2,680 | 126,657 | |||
8,786,552 | |||||
Health Care Providers and Services — 3.0% | |||||
Ensign Group, Inc. (The) | 24,538 | 951,829 | |||
UnitedHealth Group, Inc. | 49,873 | 12,424,362 | |||
13,376,191 | |||||
Health Care Technology — 0.1% | |||||
athenahealth, Inc.(1) | 1,375 | 181,404 |
5
Shares | Value | ||||
Computer Programs & Systems, Inc. | 3,635 | $ | 91,238 | ||
HealthStream, Inc. | 15,177 | 366,525 | |||
639,167 | |||||
Hotels, Restaurants and Leisure — 2.9% | |||||
Darden Restaurants, Inc. | 35,049 | 3,499,993 | |||
Ruth's Hospitality Group, Inc. | 27,746 | 630,666 | |||
Starbucks Corp. | 100,798 | 6,491,391 | |||
Texas Roadhouse, Inc. | 36,938 | 2,205,199 | |||
12,827,249 | |||||
Household Durables — 0.6% | |||||
PulteGroup, Inc. | 107,246 | 2,787,323 | |||
Insurance — 2.1% | |||||
Progressive Corp. (The) | 83,627 | 5,045,217 | |||
Travelers Cos., Inc. (The) | 34,160 | 4,090,660 | |||
9,135,877 | |||||
Interactive Media and Services — 8.5% | |||||
Alphabet, Inc., Class A(1) | 22,102 | 23,095,706 | |||
Facebook, Inc., Class A(1) | 113,555 | 14,885,925 | |||
37,981,631 | |||||
Internet and Direct Marketing Retail — 6.8% | |||||
Amazon.com, Inc.(1) | 17,534 | 26,335,542 | |||
eBay, Inc.(1) | 138,284 | 3,881,632 | |||
30,217,174 | |||||
IT Services — 6.6% | |||||
Accenture plc, Class A | 3,287 | 463,500 | |||
Akamai Technologies, Inc.(1) | 39,716 | 2,425,853 | |||
Booz Allen Hamilton Holding Corp. | 26,969 | 1,215,493 | |||
EVERTEC, Inc. | 34,103 | 978,756 | |||
Fidelity National Information Services, Inc. | 37,465 | 3,842,036 | |||
MasterCard, Inc., Class A | 16,429 | 3,099,331 | |||
MAXIMUS, Inc. | 10,687 | 695,617 | |||
NIC, Inc. | 14,950 | 186,576 | |||
PayPal Holdings, Inc.(1) | 4,664 | 392,196 | |||
VeriSign, Inc.(1) | 25,658 | 3,804,825 | |||
Visa, Inc., Class A | 95,057 | 12,541,820 | |||
29,646,003 | |||||
Life Sciences Tools and Services — 0.8% | |||||
Thermo Fisher Scientific, Inc. | 16,519 | 3,696,787 | |||
Machinery — 0.2% | |||||
Global Brass & Copper Holdings, Inc. | 8,309 | 208,972 | |||
Hyster-Yale Materials Handling, Inc. | 117 | 7,249 | |||
Lydall, Inc.(1) | 1,865 | 37,878 | |||
Parker-Hannifin Corp. | 4,777 | 712,442 | |||
966,541 | |||||
Media† | |||||
Entravision Communications Corp., Class A | 31,635 | 92,058 |
6
Shares | Value | ||||
Metals and Mining — 0.7% | |||||
Steel Dynamics, Inc. | 109,268 | $ | 3,282,411 | ||
Oil, Gas and Consumable Fuels — 2.0% | |||||
Continental Resources, Inc.(1) | 63,740 | 2,561,711 | |||
CVR Energy, Inc. | 94,705 | 3,265,428 | |||
EOG Resources, Inc. | 37,259 | 3,249,357 | |||
9,076,496 | |||||
Personal Products — 0.4% | |||||
Medifast, Inc. | 14,495 | 1,812,165 | |||
Pharmaceuticals — 4.1% | |||||
Allergan plc | 21,987 | 2,938,782 | |||
Bristol-Myers Squibb Co. | 93,773 | 4,874,321 | |||
Eli Lilly & Co. | 45,828 | 5,303,216 | |||
Zoetis, Inc. | 61,273 | 5,241,292 | |||
18,357,611 | |||||
Professional Services — 2.5% | |||||
ASGN, Inc.(1) | 1,290 | 70,305 | |||
BG Staffing, Inc. | 24,429 | 504,459 | |||
CoStar Group, Inc.(1) | 10,945 | 3,692,186 | |||
Insperity, Inc. | 18,386 | 1,716,517 | |||
Kforce, Inc. | 42,996 | 1,329,436 | |||
Robert Half International, Inc. | 64,767 | 3,704,672 | |||
TrueBlue, Inc.(1) | 4,807 | 106,956 | |||
11,124,531 | |||||
Real Estate Management and Development† | |||||
Newmark Group, Inc., Class A | 3,822 | 30,652 | |||
Road and Rail — 0.5% | |||||
ArcBest Corp. | 66,611 | 2,282,093 | |||
Semiconductors and Semiconductor Equipment — 2.9% | |||||
Advanced Micro Devices, Inc.(1) | 16,530 | 305,144 | |||
Broadcom, Inc. | 7,768 | 1,975,247 | |||
Intel Corp. | 87,116 | 4,088,354 | |||
Micron Technology, Inc.(1) | 77,217 | 2,450,095 | |||
ON Semiconductor Corp.(1) | 185,429 | 3,061,433 | |||
Qorvo, Inc.(1) | 17,651 | 1,071,945 | |||
12,952,218 | |||||
Software — 13.0% | |||||
Adobe, Inc.(1) | 35,414 | 8,012,063 | |||
Cadence Design Systems, Inc.(1) | 78,882 | 3,429,789 | |||
Cornerstone OnDemand, Inc.(1) | 11,802 | 595,175 | |||
Fortinet, Inc.(1) | 8,167 | 575,202 | |||
Intuit, Inc. | 26,752 | 5,266,131 | |||
LogMeIn, Inc. | 8,835 | 720,671 | |||
Microsoft Corp. | 248,182 | 25,207,846 | |||
salesforce.com, Inc.(1) | 21,453 | 2,938,417 | |||
Teradata Corp.(1) | 95,433 | 3,660,810 | |||
Ultimate Software Group, Inc. (The)(1) | 15,343 | 3,757,041 |
7
Shares | Value | ||||
VMware, Inc., Class A | 26,655 | $ | 3,655,200 | ||
57,818,345 | |||||
Specialty Retail — 5.0% | |||||
AutoZone, Inc.(1) | 4,814 | 4,035,769 | |||
Burlington Stores, Inc.(1) | 27,795 | 4,521,413 | |||
Home Depot, Inc. (The) | 23,515 | 4,040,347 | |||
O'Reilly Automotive, Inc.(1) | 13,959 | 4,806,502 | |||
Ross Stores, Inc. | 59,748 | 4,971,034 | |||
22,375,065 | |||||
Technology Hardware, Storage and Peripherals — 8.1% | |||||
Apple, Inc. | 205,272 | 32,379,605 | |||
Immersion Corp.(1) | 51,956 | 465,526 | |||
NetApp, Inc. | 55,544 | 3,314,310 | |||
36,159,441 | |||||
Textiles, Apparel and Luxury Goods — 1.9% | |||||
Columbia Sportswear Co. | 7,357 | 618,650 | |||
Deckers Outdoor Corp.(1) | 31,759 | 4,063,564 | |||
NIKE, Inc., Class B | 11,722 | 869,069 | |||
Tapestry, Inc. | 90,065 | 3,039,694 | |||
8,590,977 | |||||
Thrifts and Mortgage Finance — 0.3% | |||||
Essent Group Ltd.(1) | 38,062 | 1,300,959 | |||
Merchants Bancorp | 1,175 | 23,453 | |||
Mr Cooper Group, Inc.(1) | 1,853 | 21,625 | |||
1,346,037 | |||||
Trading Companies and Distributors — 0.7% | |||||
HD Supply Holdings, Inc.(1) | 2,673 | 100,291 | |||
W.W. Grainger, Inc. | 11,053 | 3,120,925 | |||
3,221,216 | |||||
Wireless Telecommunication Services — 0.1% | |||||
T-Mobile US, Inc.(1) | 7,520 | 478,347 | |||
TOTAL COMMON STOCKS (Cost $388,394,698) | 440,104,536 | ||||
TEMPORARY CASH INVESTMENTS — 1.4% | |||||
Repurchase Agreement, BMO Capital Markets Corp., (collateralized by various U.S. Treasury obligations, 0.125% - 2.75%, 10/31/19 - 2/15/44, valued at $5,361,769), in a joint trading account at 2.45%, dated 12/31/18, due 1/2/19 (Delivery value $5,258,037) | 5,257,321 | ||||
Repurchase Agreement, Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 3.375%, 11/15/48, valued at $897,818), at 1.25%, dated 12/31/18, due 1/2/19 (Delivery value $877,061) | 877,000 | ||||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $6,134,321) | 6,134,321 | ||||
TOTAL INVESTMENT SECURITIES — 100.0% (Cost $394,529,019) | 446,238,857 | ||||
OTHER ASSETS AND LIABILITIES† | 209,916 | ||||
TOTAL NET ASSETS — 100.0% | $ | 446,448,773 |
8
NOTES TO SCHEDULE OF INVESTMENTS |
† | Category is less than 0.05% of total net assets. |
(1) | Non-income producing. |
See Notes to Financial Statements.
9
Statement of Assets and Liabilities |
DECEMBER 31, 2018 (UNAUDITED) | |||
Assets | |||
Investment securities, at value (cost of $394,529,019) | $ | 446,238,857 | |
Cash | 4,280 | ||
Receivable for capital shares sold | 135,190 | ||
Dividends and interest receivable | 158,501 | ||
446,536,828 | |||
Liabilities | |||
Accrued management fees | 88,055 | ||
Net Assets | $ | 446,448,773 | |
Net Assets Consist of: | |||
Capital (par value and paid-in surplus) | $ | 395,421,004 | |
Distributable earnings | 51,027,769 | ||
$ | 446,448,773 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | ||||
Investor Class, $0.01 Par Value | $98,885,801 | 9,570,129 | $10.33 | |||
G Class, $0.01 Par Value | $347,562,972 | 33,584,723 | $10.35 |
See Notes to Financial Statements.
10
Statement of Operations |
FOR THE SIX MONTHS ENDED DECEMBER 31, 2018 (UNAUDITED) | |||
Investment Income (Loss) | |||
Income: | |||
Dividends | $ | 3,286,677 | |
Interest | 33,667 | ||
3,320,344 | |||
Expenses: | |||
Management fees | 2,273,698 | ||
Directors' fees and expenses | 18,766 | ||
Other expenses | 224 | ||
2,292,688 | |||
Fees waived - G Class | (1,669,046 | ) | |
623,642 | |||
Net investment income (loss) | 2,696,702 | ||
Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on investment transactions | 18,635,453 | ||
Change in net unrealized appreciation (depreciation) on investments | (69,783,724 | ) | |
Net realized and unrealized gain (loss) | (51,148,271 | ) | |
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | (48,451,569 | ) |
See Notes to Financial Statements.
11
Statement of Changes in Net Assets |
SIX MONTHS ENDED DECEMBER 31, 2018 (UNAUDITED) AND YEAR ENDED JUNE 30, 2018 | ||||||
Increase (Decrease) in Net Assets | December 31, 2018 | June 30, 2018 | ||||
Operations | ||||||
Net investment income (loss) | $ | 2,696,702 | $ | 5,503,263 | ||
Net realized gain (loss) | 18,635,453 | 59,983,314 | ||||
Change in net unrealized appreciation (depreciation) | (69,783,724 | ) | 38,144,547 | |||
Net increase (decrease) in net assets resulting from operations | (48,451,569 | ) | 103,631,124 | |||
Distributions to Shareholders | ||||||
From earnings:(1) | ||||||
Investor Class | (12,462,035 | ) | (3,614,812 | ) | ||
G Class | (45,689,352 | ) | (18,356,862 | ) | ||
Decrease in net assets from distributions | (58,151,387 | ) | (21,971,674 | ) | ||
Capital Share Transactions | ||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | 2,042,345 | (86,893,311 | ) | |||
Net increase (decrease) in net assets | (104,560,611 | ) | (5,233,861 | ) | ||
Net Assets | ||||||
Beginning of period | 551,009,384 | 556,243,245 | ||||
End of period | $ | 446,448,773 | $ | 551,009,384 |
(1) | Prior period presentation has been updated to reflect the current period combination of distributions to shareholders from net investment income and net realized gains. Distributions from net investment income were $(261,486) and $(4,961,641), for Investor Class and G Class, respectively. Distributions from net realized gains were $(3,353,326) and $(13,395,221) for Investor Class and G Class, respectively. |
See Notes to Financial Statements.
12
Notes to Financial Statements |
DECEMBER 31, 2018 (UNAUDITED)
1. Organization
American Century Quantitative Equity 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. NT Disciplined 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 is not permitted to invest in securities issued by companies assigned the Global Industry Classification Standard or the Bloomberg Industry Classification Standard for the tobacco industry. The fund offers the Investor Class and G Class.
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.
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.
13
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.
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, if any, are generally declared and paid semiannually. Distributions from 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.
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., and the corporation’s transfer agent, American Century Services, LLC, are wholly owned, directly or indirectly, by ACC. Various funds issued by American Century Asset Allocation Portfolios, Inc. own, in aggregate, 100% of the shares of the fund. Related parties do not invest in the fund for the purpose of exercising management or control.
14
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 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, which may be provided indirectly through another American Century Investments mutual fund. 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 fee consists of (1) an Investment Category Fee based on the daily net assets of the fund and certain other accounts managed by the investment advisor that are in the same broad investment category as the fund and (2) a Complex Fee based on the assets of all the funds in the American Century Investments family of funds. The investment advisor agreed to waive the G Class’s management fee in its entirety. The investment advisor expects this waiver to remain in effect permanently and cannot terminate it without the approval of the Board of Directors.
The Investment Category Fee range, the Complex Fee range and the effective annual management fee for each class for the period ended December 31, 2018 are as follows:
Investment Category Fee Range | Complex Fee Range | Effective Annual Management Fee | |
Investor Class | 0.6880% to 0.8700% | 0.2500% to 0.3100% | 1.01% |
G Class | 0.0500% to 0.1100% | 0.00%(1) |
(1) Effective annual management fee before waiver was 0.81%.
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 $4,277,332 and $3,195,884, respectively. The effect of interfund transactions on the Statement of Operations was $(141,698) 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 December 31, 2018 were $291,861,779 and $349,182,399, respectively.
15
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended December 31, 2018 | Year ended June 30, 2018 | |||||||||
Shares | Amount | Shares | Amount | |||||||
Investor Class/Shares Authorized | 80,000,000 | 80,000,000 | ||||||||
Sold | 110,148 | $ | 1,175,274 | 216,714 | $ | 2,721,186 | ||||
Issued in reinvestment of distributions | 1,150,659 | 12,462,035 | 290,418 | 3,614,812 | ||||||
Redeemed | (900,881 | ) | (11,638,622 | ) | (628,753 | ) | (7,892,158 | ) | ||
359,926 | 1,998,687 | (121,621 | ) | (1,556,160 | ) | |||||
G Class/Shares Authorized | 330,000,000 | 330,000,000 | ||||||||
Sold | 1,635,147 | 20,975,194 | 902,193 | 11,218,441 | ||||||
Issued in reinvestment of distributions | 4,203,989 | 45,689,352 | 1,459,107 | 18,356,862 | ||||||
Redeemed | (4,992,446 | ) | (66,620,888 | ) | (9,039,547 | ) | (114,912,454 | ) | ||
846,690 | 43,658 | (6,678,247 | ) | (85,337,151 | ) | |||||
Net increase (decrease) | 1,206,616 | $ | 2,042,345 | (6,799,868 | ) | $ | (86,893,311 | ) |
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.
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 | $ | 440,104,536 | — | — | ||||
Temporary Cash Investments | — | $ | 6,134,321 | — | ||||
$ | 440,104,536 | $ | 6,134,321 | — |
7. 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.
16
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 | $ | 396,434,939 | |
Gross tax appreciation of investments | $ | 79,568,080 | |
Gross tax depreciation of investments | (29,764,162 | ) | |
Net tax appreciation (depreciation) of investments | $ | 49,803,918 |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales.
17
Financial Highlights |
For a Share Outstanding Throughout the Years Ended June 30 (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) | $13.13 | 0.02 | (1.32) | (1.30) | (0.02) | (1.48) | (1.50) | $10.33 | (10.45)% | 1.02%(4) | 0.23%(4) | 56% | $98,886 | ||
2018 | $11.41 | 0.03 | 2.10 | 2.13 | (0.03) | (0.38) | (0.41) | $13.13 | 18.85% | 1.01% | 0.22% | 105% | $120,907 | ||
2017 | $9.49 | 0.05 | 1.92 | 1.97 | (0.05) | — | (0.05) | $11.41 | 20.83% | 1.02% | 0.51% | 131% | $106,476 | ||
2016 | $9.77 | 0.06 | (0.27) | (0.21) | (0.07) | — | (0.07) | $9.49 | (2.18)% | 1.02% | 0.62% | 118% | $92,560 | ||
2015(5) | $10.00 | 0.02 | (0.25) | (0.23) | — | — | — | $9.77 | (2.30)% | 1.01%(4) | 0.55%(4) | 29% | $94,459 | ||
G Class | |||||||||||||||
2018(3) | $13.14 | 0.08 | (1.32) | (1.24) | (0.07) | (1.48) | (1.55) | $10.35 | (9.96)% | 0.01%(4)(6) | 1.24%(4)(6) | 56% | $347,563 | ||
2018 | $11.41 | 0.15 | 2.10 | 2.25 | (0.14) | (0.38) | (0.52) | $13.14 | 19.98% | 0.07%(7) | 1.16%(7) | 105% | $430,102 | ||
2017 | $9.49 | 0.08 | 1.92 | 2.00 | (0.08) | — | (0.08) | $11.41 | 21.08% | 0.82% | 0.71% | 131% | $449,768 | ||
2016 | $9.78 | 0.08 | (0.28) | (0.20) | (0.09) | — | (0.09) | $9.49 | (2.03)% | 0.82% | 0.82% | 118% | $397,955 | ||
2015(5) | $10.00 | 0.02 | (0.24) | (0.22) | — | — | — | $9.78 | (2.20)% | 0.81%(4) | 0.75%(4) | 29% | $357,113 |
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 December 31, 2018 (unaudited). |
(4) | Annualized. |
(5) | March 19, 2015 (fund inception) through June 30, 2015. |
(6) | The annualized ratio of operating expenses to average net assets before expense waiver and the annualized ratio of net investment income (loss) to average net assets before expense waiver was 0.82% and 0.43%, respectively. |
(7) | The ratio of operating expenses to average net assets before expense waiver and the ratio of net investment income (loss) to average net assets before expense waiver was 0.81% and 0.42%, respectively. |
See Notes to Financial Statements.
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
Descriptions of the principles and policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund are available without charge, upon request, by calling 1-800-345-2021 or visiting the "About Us" page of American Century Investments’ website at americancentury.com. A description of the policies is also available 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. 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 Quantitative Equity 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. | ||
©2019 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-91465 1902 |
Semiannual Report | |
December 31, 2018 | |
NT Equity Growth Fund | |
G Class (ACLEX) |
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the fund’s shareholder reports like this one will no longer be sent by mail, unless you specifically request paper copies of the reports from the fund or from your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the fund or your financial intermediary electronically by calling or sending an email request to your appropriate contacts as listed on the back cover of this report.
You may elect to receive all future reports in paper free of charge. You can inform the fund or your financial intermediary that you wish to continue receiving paper copies of your shareholder reports by calling or sending an email request to your appropriate contacts as listed on the back cover of this report. Your election to receive reports in paper will apply to all funds held with the fund complex/your financial intermediary.
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.
Fund Characteristics |
DECEMBER 31, 2018 | |
Top Ten Holdings | % of net assets |
Microsoft Corp. | 4.5% |
Alphabet, Inc., Class A | 3.8% |
Amazon.com, Inc. | 3.7% |
Apple, Inc. | 3.4% |
JPMorgan Chase & Co. | 2.3% |
Pfizer, Inc. | 2.1% |
Facebook, Inc., Class A | 2.1% |
Intel Corp. | 2.0% |
Visa, Inc., Class A | 1.9% |
Bank of America Corp. | 1.9% |
Top Five Industries | % of net assets |
Software | 7.9% |
Banks | 6.3% |
Interactive Media and Services | 5.9% |
Pharmaceuticals | 5.6% |
Oil, Gas and Consumable Fuels | 5.1% |
Types of Investments in Portfolio | % of net assets |
Common Stocks | 98.2% |
Temporary Cash Investments | 1.7% |
Other Assets and Liabilities | 0.1% |
2
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 July 1, 2018 to December 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.
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.
Beginning Account Value 7/1/18 | Ending Account Value 12/31/18 | Expenses Paid During Period(1) 7/1/18 - 12/31/18 | Annualized Expense Ratio(1) | |
Actual | ||||
G Class | $1,000 | $910.80 | $0.05 | 0.01% |
Hypothetical | ||||
G Class | $1,000 | $1,025.16 | $0.05 | 0.01% |
(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. |
3
Schedule of Investments |
DECEMBER 31, 2018 (UNAUDITED)
Shares | Value | ||||
COMMON STOCKS — 98.2% | |||||
Aerospace and Defense — 3.2% | |||||
Boeing Co. (The) | 67,607 | $ | 21,803,257 | ||
Raytheon Co. | 83,786 | 12,848,583 | |||
Teledyne Technologies, Inc.(1) | 6,614 | 1,369,561 | |||
Textron, Inc. | 147,124 | 6,766,233 | |||
42,787,634 | |||||
Banks — 6.3% | |||||
Bank of America Corp. | 1,007,330 | 24,820,611 | |||
Comerica, Inc. | 78,463 | 5,389,623 | |||
Fifth Third Bancorp | 135,620 | 3,191,139 | |||
JPMorgan Chase & Co. | 315,202 | 30,770,019 | |||
SunTrust Banks, Inc. | 217,995 | 10,995,668 | |||
Wells Fargo & Co. | 199,887 | 9,210,793 | |||
84,377,853 | |||||
Beverages — 1.6% | |||||
Coca-Cola Co. (The) | 313,564 | 14,847,255 | |||
Constellation Brands, Inc., Class A | 36,528 | 5,874,433 | |||
20,721,688 | |||||
Biotechnology — 4.5% | |||||
AbbVie, Inc. | 222,343 | 20,497,801 | |||
Alexion Pharmaceuticals, Inc.(1) | 22,758 | 2,215,719 | |||
Amgen, Inc. | 98,019 | 19,081,359 | |||
Biogen, Inc.(1) | 45,166 | 13,591,353 | |||
Celgene Corp.(1) | 81,012 | 5,192,059 | |||
60,578,291 | |||||
Capital Markets — 0.7% | |||||
Evercore, Inc., Class A | 46,564 | 3,332,120 | |||
Houlihan Lokey, Inc. | 20,835 | 766,728 | |||
LPL Financial Holdings, Inc. | 78,152 | 4,773,524 | |||
TD Ameritrade Holding Corp. | 9,399 | 460,175 | |||
9,332,547 | |||||
Chemicals — 0.5% | |||||
CF Industries Holdings, Inc. | 166,655 | 7,251,159 | |||
Commercial Services and Supplies — 2.4% | |||||
MSA Safety, Inc. | 44,149 | 4,161,926 | |||
Republic Services, Inc. | 185,123 | 13,345,517 | |||
Waste Management, Inc. | 161,649 | 14,385,145 | |||
31,892,588 | |||||
Communications Equipment — 1.7% | |||||
Cisco Systems, Inc. | 526,771 | 22,824,987 | |||
Consumer Finance — 2.6% | |||||
American Express Co. | 145,905 | 13,907,665 |
4
Shares | Value | ||||
Capital One Financial Corp. | 70,605 | $ | 5,337,032 | ||
Discover Financial Services | 183,970 | 10,850,551 | |||
Synchrony Financial | 198,023 | 4,645,619 | |||
34,740,867 | |||||
Diversified Consumer Services — 0.8% | |||||
Graham Holdings Co., Class B | 3,707 | 2,374,630 | |||
H&R Block, Inc. | 320,528 | 8,131,795 | |||
10,506,425 | |||||
Diversified Financial Services — 1.0% | |||||
Berkshire Hathaway, Inc., Class B(1) | 62,106 | 12,680,803 | |||
Diversified Telecommunication Services — 2.0% | |||||
AT&T, Inc. | 101,683 | 2,902,033 | |||
Verizon Communications, Inc. | 425,030 | 23,895,186 | |||
26,797,219 | |||||
Electric Utilities — 0.8% | |||||
OGE Energy Corp. | 284,609 | 11,153,827 | |||
Electronic Equipment, Instruments and Components — 0.7% | |||||
Keysight Technologies, Inc.(1) | 136,329 | 8,463,304 | |||
National Instruments Corp. | 20,009 | 908,009 | |||
9,371,313 | |||||
Energy Equipment and Services — 0.7% | |||||
Halliburton Co. | 356,855 | 9,485,206 | |||
Entertainment — 0.9% | |||||
Electronic Arts, Inc.(1) | 148,700 | 11,733,917 | |||
Equity Real Estate Investment Trusts (REITs) — 2.3% | |||||
Brixmor Property Group, Inc. | 576,438 | 8,467,874 | |||
GEO Group, Inc. (The) | 156,215 | 3,077,436 | |||
Healthcare Trust of America, Inc., Class A | 197,843 | 5,007,406 | |||
Highwoods Properties, Inc. | 46,852 | 1,812,704 | |||
Host Hotels & Resorts, Inc. | 312,791 | 5,214,226 | |||
PotlatchDeltic Corp. | 59,752 | 1,890,553 | |||
PS Business Parks, Inc. | 22,177 | 2,905,187 | |||
Weingarten Realty Investors | 96,343 | 2,390,270 | |||
30,765,656 | |||||
Food and Staples Retailing — 0.8% | |||||
US Foods Holding Corp.(1) | 350,843 | 11,100,673 | |||
Food Products — 1.0% | |||||
General Mills, Inc. | 330,155 | 12,856,236 | |||
Health Care Equipment and Supplies — 3.7% | |||||
Danaher Corp. | 86,311 | 8,900,390 | |||
DexCom, Inc.(1) | 4,173 | 499,926 | |||
Hill-Rom Holdings, Inc. | 63,991 | 5,666,403 | |||
ICU Medical, Inc.(1) | 25,344 | 5,819,743 | |||
Integer Holdings Corp.(1) | 31,657 | 2,414,163 | |||
Medtronic plc | 210,228 | 19,122,339 | |||
STERIS plc | 66,979 | 7,156,706 |
5
Shares | Value | ||||
Varian Medical Systems, Inc.(1) | 1,069 | $ | 121,128 | ||
49,700,798 | |||||
Health Care Providers and Services — 1.3% | |||||
Amedisys, Inc.(1) | 25,203 | 2,951,523 | |||
Cigna Corp. | 1,963 | 372,817 | |||
UnitedHealth Group, Inc. | 57,693 | 14,372,480 | |||
17,696,820 | |||||
Hotels, Restaurants and Leisure — 1.3% | |||||
Darden Restaurants, Inc. | 109,036 | 10,888,335 | |||
Starbucks Corp. | 106,260 | 6,843,144 | |||
17,731,479 | |||||
Household Durables — 0.5% | |||||
NVR, Inc.(1) | 2,481 | 6,046,172 | |||
Household Products — 0.2% | |||||
Procter & Gamble Co. (The) | 33,187 | 3,050,549 | |||
Independent Power and Renewable Electricity Producers — 1.3% | |||||
AES Corp. | 435,750 | 6,300,945 | |||
NRG Energy, Inc. | 290,319 | 11,496,632 | |||
17,797,577 | |||||
Industrial Conglomerates — 0.8% | |||||
Honeywell International, Inc. | 75,707 | 10,002,409 | |||
Insurance — 2.9% | |||||
Hartford Financial Services Group, Inc. (The) | 282,378 | 12,551,702 | |||
Progressive Corp. (The) | 225,552 | 13,607,552 | |||
Travelers Cos., Inc. (The) | 111,084 | 13,302,309 | |||
39,461,563 | |||||
Interactive Media and Services — 5.9% | |||||
Alphabet, Inc., Class A(1) | 48,970 | 51,171,691 | |||
Facebook, Inc., Class A(1) | 209,704 | 27,490,098 | |||
78,661,789 | |||||
Internet and Direct Marketing Retail — 4.5% | |||||
Amazon.com, Inc.(1) | 32,804 | 49,270,624 | |||
eBay, Inc.(1) | 399,003 | 11,200,014 | |||
60,470,638 | |||||
IT Services — 2.8% | |||||
Akamai Technologies, Inc.(1) | 46,592 | 2,845,839 | |||
International Business Machines Corp. | 65,278 | 7,420,150 | |||
MAXIMUS, Inc. | 31,517 | 2,051,442 | |||
Visa, Inc., Class A | 189,474 | 24,999,200 | |||
37,316,631 | |||||
Leisure Products† | |||||
Brunswick Corp. | 4,692 | 217,943 | |||
Life Sciences Tools and Services — 1.7% | |||||
Agilent Technologies, Inc. | 106,566 | 7,188,942 | |||
Thermo Fisher Scientific, Inc. | 71,398 | 15,978,159 | |||
23,167,101 |
6
Shares | Value | ||||
Machinery — 1.7% | |||||
Caterpillar, Inc. | 125,804 | $ | 15,985,914 | ||
Parker-Hannifin Corp. | 44,661 | 6,660,742 | |||
22,646,656 | |||||
Multiline Retail — 0.7% | |||||
Kohl's Corp. | 146,734 | 9,734,334 | |||
Oil, Gas and Consumable Fuels — 5.1% | |||||
Chevron Corp. | 132,865 | 14,454,383 | |||
ConocoPhillips | 230,420 | 14,366,687 | |||
Continental Resources, Inc.(1) | 116,674 | 4,689,128 | |||
CVR Energy, Inc. | 11,026 | 380,177 | |||
EOG Resources, Inc. | 44,866 | 3,912,764 | |||
Exxon Mobil Corp. | 123,779 | 8,440,490 | |||
HollyFrontier Corp. | 49,714 | 2,541,380 | |||
Marathon Petroleum Corp. | 131,489 | 7,759,166 | |||
Phillips 66 | 132,275 | 11,395,491 | |||
67,939,666 | |||||
Paper and Forest Products — 0.4% | |||||
Domtar Corp. | 104,612 | 3,675,020 | |||
Louisiana-Pacific Corp. | 54,484 | 1,210,634 | |||
4,885,654 | |||||
Personal Products — 0.4% | |||||
Edgewell Personal Care Co.(1) | 134,595 | 5,027,123 | |||
Pharmaceuticals — 5.6% | |||||
Allergan plc | 90,792 | 12,135,259 | |||
Bristol-Myers Squibb Co. | 175,571 | 9,126,181 | |||
Jazz Pharmaceuticals plc(1) | 24,597 | 3,049,044 | |||
Johnson & Johnson | 98,087 | 12,658,127 | |||
Merck & Co., Inc. | 5,213 | 398,325 | |||
Pfizer, Inc. | 655,240 | 28,601,226 | |||
Zoetis, Inc. | 100,094 | 8,562,041 | |||
74,530,203 | |||||
Professional Services — 1.4% | |||||
CoStar Group, Inc.(1) | 21,407 | 7,221,437 | |||
Robert Half International, Inc. | 196,690 | 11,250,668 | |||
18,472,105 | |||||
Real Estate Management and Development — 0.2% | |||||
Jones Lang LaSalle, Inc. | 22,650 | 2,867,490 | |||
Road and Rail — 0.9% | |||||
Norfolk Southern Corp. | 84,201 | 12,591,418 | |||
Semiconductors and Semiconductor Equipment — 3.6% | |||||
Broadcom, Inc. | 38,239 | 9,723,413 | |||
Intel Corp. | 564,148 | 26,475,465 | |||
QUALCOMM, Inc. | 219,523 | 12,493,054 | |||
48,691,932 | |||||
Software — 7.9% | |||||
Adobe, Inc.(1) | 80,542 | 18,221,822 |
7
Shares | Value | ||||
Intuit, Inc. | 40,396 | $ | 7,951,953 | ||
LogMeIn, Inc. | 37,246 | 3,038,156 | |||
Microsoft Corp. | 597,733 | 60,711,741 | |||
Ultimate Software Group, Inc. (The)(1) | 21,721 | 5,318,821 | |||
VMware, Inc., Class A | 80,381 | 11,022,647 | |||
106,265,140 | |||||
Specialty Retail — 2.8% | |||||
AutoZone, Inc.(1) | 14,302 | 11,989,938 | |||
O'Reilly Automotive, Inc.(1) | 33,715 | 11,609,086 | |||
Ross Stores, Inc. | 170,234 | 14,163,469 | |||
37,762,493 | |||||
Technology Hardware, Storage and Peripherals — 3.6% | |||||
Apple, Inc. | 284,683 | 44,905,896 | |||
Seagate Technology plc | 101,878 | 3,931,472 | |||
48,837,368 | |||||
Textiles, Apparel and Luxury Goods — 2.2% | |||||
Deckers Outdoor Corp.(1) | 93,594 | 11,975,352 | |||
Michael Kors Holdings Ltd.(1) | 195,557 | 7,415,522 | |||
Tapestry, Inc. | 303,220 | 10,233,675 | |||
29,624,549 | |||||
Thrifts and Mortgage Finance — 0.3% | |||||
Essent Group Ltd.(1) | 96,844 | 3,310,128 | |||
TOTAL COMMON STOCKS (Cost $1,146,371,430) | 1,315,466,617 | ||||
TEMPORARY CASH INVESTMENTS — 1.7% | |||||
Repurchase Agreement, BMO Capital Markets Corp., (collateralized by various U.S. Treasury obligations, 0.125% - 2.75%, 10/31/19 - 2/15/44, valued at $20,603,557), in a joint trading account at 2.45%, dated 12/31/18, due 1/2/19 (Delivery value $20,204,948) | 20,202,198 | ||||
Repurchase Agreement, Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 3.375%, 11/15/48, valued at $3,441,636), at 1.25%, dated 12/31/18, due 1/2/19 (Delivery value $3,372,234) | 3,372,000 | ||||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $23,574,198) | 23,574,198 | ||||
TOTAL INVESTMENT SECURITIES — 99.9% (Cost $1,169,945,628) | 1,339,040,815 | ||||
OTHER ASSETS AND LIABILITIES — 0.1% | 848,790 | ||||
TOTAL NET ASSETS — 100.0% | $ | 1,339,889,605 |
NOTES TO SCHEDULE OF INVESTMENTS |
† Category is less than 0.05% of total net assets.
(1) | Non-income producing. |
See Notes to Financial Statements.
8
Statement of Assets and Liabilities |
DECEMBER 31, 2018 (UNAUDITED) | |||
Assets | |||
Investment securities, at value (cost of $1,169,945,628) | $ | 1,339,040,815 | |
Cash | 14,652 | ||
Dividends and interest receivable | 834,138 | ||
Net Assets | $ | 1,339,889,605 | |
G Class Capital Shares, $0.01 Par Value | |||
Shares authorized | 985,000,000 | ||
Shares outstanding | 120,282,271 | ||
Net Asset Value Per Share | $ | 11.14 | |
Net Assets Consist of: | |||
Capital (par value and paid-in surplus) | $ | 1,160,797,903 | |
Distributable earnings | 179,091,702 | ||
$ | 1,339,889,605 |
See Notes to Financial Statements.
9
Statement of Operations |
FOR THE SIX MONTHS ENDED DECEMBER 31, 2018 (UNAUDITED) | |||
Investment Income (Loss) | |||
Income: | |||
Dividends | $ | 14,806,702 | |
Interest | 179,160 | ||
14,985,862 | |||
Expenses: | |||
Management fees | 3,711,610 | ||
Directors' fees and expenses | 57,067 | ||
Other expenses | 1,520 | ||
3,770,197 | |||
Fees waived | (3,711,610 | ) | |
58,587 | |||
Net investment income (loss) | 14,927,275 | ||
Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investment transactions | 61,757,866 | ||
Futures contract transactions | 651,780 | ||
62,409,646 | |||
Change in net unrealized appreciation (depreciation) on investments | (206,550,576 | ) | |
Net realized and unrealized gain (loss) | (144,140,930 | ) | |
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | (129,213,655 | ) |
See Notes to Financial Statements.
10
Statement of Changes in Net Assets |
SIX MONTHS ENDED DECEMBER 31, 2018 (UNAUDITED) AND YEAR ENDED JUNE 30, 2018 | ||||||
Increase (Decrease) in Net Assets | December 31, 2018 | June 30, 2018 | ||||
Operations | ||||||
Net investment income (loss) | $ | 14,927,275 | $ | 33,983,049 | ||
Net realized gain (loss) | 62,409,646 | 164,821,845 | ||||
Change in net unrealized appreciation (depreciation) | (206,550,576 | ) | 71,664,277 | |||
Net increase (decrease) in net assets resulting from operations | (129,213,655 | ) | 270,469,171 | |||
Distributions to Shareholders | ||||||
From earnings(1) | (180,742,351 | ) | (132,600,513 | ) | ||
Capital Share Transactions | ||||||
Proceeds from shares sold | 83,426,456 | 80,237,665 | ||||
Proceeds from reinvestment of distributions | 180,742,351 | 132,600,513 | ||||
Payments for shares redeemed | (287,162,971 | ) | (449,428,027 | ) | ||
Net increase (decrease) in net assets from capital share transactions | (22,994,164 | ) | (236,589,849 | ) | ||
Net increase (decrease) in net assets | (332,950,170 | ) | (98,721,191 | ) | ||
Net Assets | ||||||
Beginning of period | 1,672,839,775 | 1,771,560,966 | ||||
End of period | $ | 1,339,889,605 | $ | 1,672,839,775 | ||
Transactions in Shares of the Fund | ||||||
Sold | 6,101,221 | 5,859,218 | ||||
Issued in reinvestment of distributions | 15,387,572 | 9,709,545 | ||||
Redeemed | (20,489,337 | ) | (32,236,842 | ) | ||
Net increase (decrease) in shares of the fund | 999,456 | (16,668,079 | ) |
(1) | Prior period presentation has been updated to reflect the current period combination of distributions to shareholders from net investment income and net realized gains. Distributions from net investment income were $(32,706,722). Distributions from net realized gains were $(99,893,791). |
See Notes to Financial Statements.
11
Notes to Financial Statements |
DECEMBER 31, 2018 (UNAUDITED)
1. Organization
American Century Quantitative Equity 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. NT Equity 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 is not permitted to invest in securities issued by companies assigned the Global Industry Classification Standard or the Bloomberg Industry Classification Standard for the tobacco industry. The fund offers the G Class.
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.
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. Exchange-traded futures contracts are valued at the settlement price as provided by the appropriate exchange.
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.
12
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.
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.
Segregated Assets — In accordance with the 1940 Act, the fund segregates assets on its books and records to cover certain types of investment securities and other financial instruments. ACIM monitors, on a daily basis, the securities segregated to ensure the fund designates a sufficient amount of liquid assets, marked-to-market daily. The fund may also receive assets or be required to pledge assets at the custodian bank or with a broker for collateral requirements.
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.
Distributions to Shareholders — Distributions from net investment income, if any, are generally declared and paid quarterly. Distributions from 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.
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., and the corporation’s transfer agent, American Century Services, LLC, are wholly owned, directly or indirectly, by ACC. Various funds issued by American Century Asset Allocation Portfolios, Inc. own, in aggregate, 100% of the shares of the fund. Related parties do not invest in the fund for the purpose of exercising management or control.
13
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). The agreement provides that all expenses of managing and operating the fund, except 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 the daily net assets of the fund and paid monthly in arrears. The fee consists of (1) an Investment Category Fee based on the daily net assets of the fund and certain other accounts managed by the investment advisor that are in the same broad investment category as the fund and (2) a Complex Fee based on the assets of all the funds in the American Century Investments family of funds. The rates for the Investment Category Fee range from 0.3380% to 0.5200%. The rates for the Complex Fee range from 0.0500% to 0.1100%. Effective July 31, 2017, the investment advisor agreed to waive the fund's management fee in its entirety. The investment advisor expects this waiver to remain in effect permanently and cannot terminate it without the approval of the Board of Directors. The effective annual management fee for the period ended December 31, 2018 was 0.46% before waiver and 0.00% after waiver.
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 $15,229,974 and $10,492,270, respectively. The effect of interfund transactions on the Statement of Operations was $(314,799) 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 December 31, 2018 were $700,180,887 and $890,821,788, respectively.
5. 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.
14
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 | $ | 1,315,466,617 | — | — | ||||
Temporary Cash Investments | — | $ | 23,574,198 | — | ||||
$ | 1,315,466,617 | $ | 23,574,198 | — |
6. Derivative Instruments
Equity Price Risk — The fund is subject to equity price risk in the normal course of pursuing its investment objectives. A fund may enter into futures contracts based on an equity index in order to manage its exposure to changes in market conditions. A fund may purchase futures contracts to gain exposure to increases in market value or sell futures contracts to protect against a decline in market value. Upon entering into a futures contract, a fund is required to deposit either cash or securities in an amount equal to a certain percentage of the contract value (initial margin). Subsequent payments (variation margin) are made or received daily, in cash, by a fund. The variation margin is equal to the daily change in the contract value and is recorded as unrealized gains and losses. A fund recognizes a realized gain or loss when the contract is closed or expires. Net realized and unrealized gains or losses occurring during the holding period of futures contracts are a component of net realized gain (loss) on futures contract transactions and change in net unrealized appreciation (depreciation) on futures contracts, respectively. One of the risks of entering into futures contracts is the possibility that the change in value of the contract may not correlate with the changes in value of the underlying securities. The fund’s average notional exposure to equity price risk derivative instruments held during the period was $18,575 futures contracts purchased.
At period end, the fund did not have any derivative instruments disclosed on the Statement of Assets and Liabilities. For the six months ended December 31, 2018, the effect of equity price risk derivative instruments on the Statement of Operations was $651,780 in net realized gain (loss) on futures contract transactions.
7. Federal Tax Information
The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
As of period end, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $ | 1,177,759,799 | |
Gross tax appreciation of investments | $ | 252,627,130 | |
Gross tax depreciation of investments | (91,346,114 | ) | |
Net tax appreciation (depreciation) of investments | $ | 161,281,016 |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales.
15
Financial Highlights |
For a Share Outstanding Throughout the Years Ended June 30 (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 | 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) | |||
G Class | |||||||||||||||||
2018(3) | $14.02 | 0.13 | (1.31) | (1.18) | (0.12) | (1.58) | (1.70) | $11.14 | (8.92)% | 0.01%(4) | 0.47%(4) | 1.84%(4) | 1.38%(4) | 45% | $1,339,890 | ||
2018 | $13.03 | 0.27 | 1.79 | 2.06 | (0.26) | (0.81) | (1.07) | $14.02 | 16.11% | 0.04% | 0.46% | 1.93% | 1.51% | 83% | $1,672,840 | ||
2017 | $11.20 | 0.19 | 1.83 | 2.02 | (0.19) | — | (0.19) | $13.03 | 18.09% | 0.47% | 0.47% | 1.54% | 1.54% | 88% | $1,771,561 | ||
2016 | $12.30 | 0.19 | (0.53) | (0.34) | (0.19) | (0.57) | (0.76) | $11.20 | (2.65)% | 0.47% | 0.47% | 1.65% | 1.65% | 94% | $1,563,685 | ||
2015 | $13.04 | 0.21 | 0.53 | 0.74 | (0.20) | (1.28) | (1.48) | $12.30 | 5.97% | 0.47% | 0.47% | 1.66% | 1.66% | 84% | $1,381,049 | ||
2014 | $11.58 | 0.20 | 2.59 | 2.79 | (0.19) | (1.14) | (1.33) | $13.04 | 25.29% | 0.47% | 0.47% | 1.64% | 1.64% | 77% | $1,124,703 |
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 December 31, 2018 (unaudited). |
(4) | Annualized. |
See Notes to Financial Statements.
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
Descriptions of the principles and policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund are available without charge, upon request, by calling 1-800-345-2021 or visiting the "About Us" page of American Century Investments’ website at americancentury.com. A description of the policies is also available 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. 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.
17
Notes |
18
Notes |
19
Notes |
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 Quantitative Equity 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. | ||
©2019 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-91462 1902 |
Semiannual Report | |
December 31, 2018 | |
NT Small Company Fund | |
G Class (ACLOX) |
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the fund’s shareholder reports like this one will no longer be sent by mail, unless you specifically request paper copies of the reports from the fund or from your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the fund or your financial intermediary electronically by calling or sending an email request to your appropriate contacts as listed on the back cover of this report.
You may elect to receive all future reports in paper free of charge. You can inform the fund or your financial intermediary that you wish to continue receiving paper copies of your shareholder reports by calling or sending an email request to your appropriate contacts as listed on the back cover of this report. Your election to receive reports in paper will apply to all funds held with the fund complex/your financial intermediary.
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.
Fund Characteristics |
DECEMBER 31, 2018 | |
Top Ten Holdings | % of net assets |
PS Business Parks, Inc. | 0.8% |
Investment Technology Group, Inc. | 0.8% |
Generac Holdings, Inc. | 0.8% |
Haemonetics Corp. | 0.8% |
Deckers Outdoor Corp. | 0.8% |
Louisiana-Pacific Corp. | 0.8% |
Globus Medical, Inc., Class A | 0.7% |
Green Dot Corp., Class A | 0.7% |
Integer Holdings Corp. | 0.7% |
Stewart Information Services Corp. | 0.7% |
Top Five Industries | % of net assets |
Banks | 7.5% |
Software | 7.2% |
Equity Real Estate Investment Trusts (REITs) | 6.2% |
Specialty Retail | 4.9% |
Health Care Equipment and Supplies | 4.8% |
Types of Investments in Portfolio | % of net assets |
Common Stocks | 98.8% |
Temporary Cash Investments | 1.1% |
Other Assets and Liabilities | 0.1% |
2
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 July 1, 2018 to December 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.
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.
Beginning Account Value 7/1/18 | Ending Account Value 12/31/18 | Expenses Paid During Period(1) 7/1/18 - 12/31/18 | Annualized Expense Ratio(1) | |
Actual | ||||
G Class | $1,000 | $817.20 | $0.05 | 0.01% |
Hypothetical | ||||
G Class | $1,000 | $1,025.16 | $0.05 | 0.01% |
(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. |
3
Schedule of Investments |
DECEMBER 31, 2018 (UNAUDITED)
Shares | Value | ||||
COMMON STOCKS — 98.8% | |||||
Aerospace and Defense — 1.0% | |||||
Aerojet Rocketdyne Holdings, Inc.(1) | 35,981 | $ | 1,267,611 | ||
Curtiss-Wright Corp. | 17,450 | 1,781,994 | |||
Vectrus, Inc.(1) | 19,330 | 417,141 | |||
3,466,746 | |||||
Air Freight and Logistics — 0.2% | |||||
Forward Air Corp. | 921 | 50,517 | |||
Hub Group, Inc., Class A(1) | 15,948 | 591,192 | |||
641,709 | |||||
Banks — 7.5% | |||||
Bancorp, Inc. (The)(1) | 204,753 | 1,629,834 | |||
Bank of NT Butterfield & Son Ltd. (The) | 61,583 | 1,930,627 | |||
Banner Corp. | 3,776 | 201,940 | |||
Bryn Mawr Bank Corp. | 2,057 | 70,761 | |||
Camden National Corp. | 7,783 | 279,955 | |||
Central Pacific Financial Corp. | 84,265 | 2,051,853 | |||
Customers Bancorp, Inc.(1) | 60,230 | 1,096,186 | |||
Enterprise Financial Services Corp. | 36,400 | 1,369,732 | |||
Financial Institutions, Inc. | 40,326 | 1,036,378 | |||
First Citizens BancShares, Inc., Class A | 5,103 | 1,924,086 | |||
First Merchants Corp. | 2,005 | 68,711 | |||
Franklin Financial Network, Inc.(1) | 72,184 | 1,903,492 | |||
Hanmi Financial Corp. | 23,619 | 465,294 | |||
Hilltop Holdings, Inc. | 112,775 | 2,010,778 | |||
Independent Bank Corp. | 80,856 | 1,699,593 | |||
International Bancshares Corp. | 70,251 | 2,416,634 | |||
Lakeland Bancorp, Inc. | 12,129 | 179,631 | |||
OFG Bancorp | 114,098 | 1,878,053 | |||
Peapack Gladstone Financial Corp. | 12,081 | 304,200 | |||
Renasant Corp. | 20,325 | 613,409 | |||
UMB Financial Corp. | 22,552 | 1,374,995 | |||
United Community Banks, Inc. | 96,654 | 2,074,195 | |||
26,580,337 | |||||
Biotechnology — 4.2% | |||||
Acorda Therapeutics, Inc.(1) | 52,046 | 810,877 | |||
Arcus Biosciences, Inc.(1) | 10,498 | 113,063 | |||
Ardelyx, Inc.(1) | 36,219 | 64,832 | |||
BioSpecifics Technologies Corp.(1) | 12,280 | 744,168 | |||
CareDx, Inc.(1) | 2,805 | 70,518 | |||
ChemoCentryx, Inc.(1) | 21,592 | 235,569 | |||
Emergent BioSolutions, Inc.(1) | 22,296 | 1,321,707 | |||
Exelixis, Inc.(1) | 39,438 | 775,745 | |||
Genomic Health, Inc.(1) | 17,123 | 1,102,892 | |||
Halozyme Therapeutics, Inc.(1) | 70,165 | 1,026,514 | |||
Inovio Pharmaceuticals, Inc.(1) | 35,119 | 140,476 | |||
Ligand Pharmaceuticals, Inc.(1) | 9,059 | 1,229,306 |
4
Shares | Value | ||||
Loxo Oncology, Inc.(1) | 10,721 | $ | 1,501,691 | ||
Myriad Genetics, Inc.(1) | 31,491 | 915,443 | |||
Pieris Pharmaceuticals, Inc.(1) | 210,994 | 561,244 | |||
Protagonist Therapeutics, Inc.(1) | 37,559 | 252,772 | |||
Prothena Corp. plc(1) | 6,587 | 67,846 | |||
Puma Biotechnology, Inc.(1) | 5,841 | 118,864 | |||
REGENXBIO, Inc.(1) | 16,007 | 671,494 | |||
Spark Therapeutics, Inc.(1) | 21,885 | 856,579 | |||
Vanda Pharmaceuticals, Inc.(1) | 37,643 | 983,612 | |||
Veracyte, Inc.(1) | 33,084 | 416,197 | |||
Vericel Corp.(1) | 43,221 | 752,045 | |||
Voyager Therapeutics, Inc.(1) | 7,932 | 74,561 | |||
14,808,015 | |||||
Building Products — 1.0% | |||||
Armstrong Flooring, Inc.(1) | 14,237 | 168,566 | |||
Continental Building Products, Inc.(1) | 77,789 | 1,979,730 | |||
Insteel Industries, Inc. | 3,932 | 95,469 | |||
Patrick Industries, Inc.(1) | 49,889 | 1,477,213 | |||
3,720,978 | |||||
Capital Markets — 1.8% | |||||
Blucora, Inc.(1) | 67,268 | 1,792,020 | |||
Investment Technology Group, Inc. | 94,867 | 2,868,778 | |||
Piper Jaffray Cos. | 4,605 | 303,193 | |||
Waddell & Reed Financial, Inc., Class A | 73,691 | 1,332,333 | |||
6,296,324 | |||||
Chemicals — 0.5% | |||||
FutureFuel Corp. | 15,737 | 249,589 | |||
Kraton Corp.(1) | 50,354 | 1,099,731 | |||
OMNOVA Solutions, Inc.(1) | 61,645 | 451,858 | |||
Tredegar Corp. | 6,194 | 98,237 | |||
1,899,415 | |||||
Commercial Services and Supplies — 2.5% | |||||
Brady Corp., Class A | 39,754 | 1,727,709 | |||
Herman Miller, Inc. | 70,229 | 2,124,427 | |||
McGrath RentCorp | 12,854 | 661,724 | |||
MSA Safety, Inc. | 23,973 | 2,259,935 | |||
Steelcase, Inc., Class A | 136,796 | 2,028,684 | |||
US Ecology, Inc. | 3,866 | 243,481 | |||
9,045,960 | |||||
Communications Equipment — 0.9% | |||||
Ciena Corp.(1) | 52,000 | 1,763,320 | |||
Comtech Telecommunications Corp. | 11,415 | 277,841 | |||
Lumentum Holdings, Inc.(1) | 11,964 | 502,608 | |||
Quantenna Communications, Inc.(1) | 46,203 | 663,013 | |||
3,206,782 | |||||
Construction and Engineering — 1.3% | |||||
Comfort Systems USA, Inc. | 46,304 | 2,022,559 | |||
EMCOR Group, Inc. | 40,645 | 2,426,100 | |||
Sterling Construction Co., Inc.(1) | 10,919 | 118,908 | |||
4,567,567 |
5
Shares | Value | ||||
Consumer Finance — 1.3% | |||||
Enova International, Inc.(1) | 98,302 | $ | 1,912,957 | ||
Green Dot Corp., Class A(1) | 33,263 | 2,645,074 | |||
4,558,031 | |||||
Distributors — 0.3% | |||||
Core-Mark Holding Co., Inc. | 50,104 | 1,164,918 | |||
Diversified Consumer Services — 0.5% | |||||
American Public Education, Inc.(1) | 27,607 | 785,695 | |||
Career Education Corp.(1) | 11,171 | 127,573 | |||
K12, Inc.(1) | 39,224 | 972,363 | |||
1,885,631 | |||||
Diversified Financial Services — 0.5% | |||||
On Deck Capital, Inc.(1) | 315,116 | 1,859,184 | |||
Diversified Telecommunication Services — 0.1% | |||||
Ooma, Inc.(1) | 12,651 | 175,596 | |||
Windstream Holdings, Inc.(1) | 61,791 | 129,143 | |||
304,739 | |||||
Electric Utilities — 0.4% | |||||
Otter Tail Corp. | 8,894 | 441,498 | |||
PNM Resources, Inc. | 21,812 | 896,255 | |||
1,337,753 | |||||
Electrical Equipment — 1.6% | |||||
Allied Motion Technologies, Inc. | 4,777 | 213,484 | |||
Atkore International Group, Inc.(1) | 103,070 | 2,044,909 | |||
AZZ, Inc. | 8,342 | 336,683 | |||
Encore Wire Corp. | 8,271 | 415,039 | |||
Generac Holdings, Inc.(1) | 57,685 | 2,866,944 | |||
5,877,059 | |||||
Electronic Equipment, Instruments and Components — 1.9% | |||||
Insight Enterprises, Inc.(1) | 31,693 | 1,291,490 | |||
PC Connection, Inc. | 22,405 | 666,101 | |||
Sanmina Corp.(1) | 16,450 | 395,787 | |||
ScanSource, Inc.(1) | 18,523 | 636,821 | |||
Tech Data Corp.(1) | 29,061 | 2,377,480 | |||
Vishay Precision Group, Inc.(1) | 51,357 | 1,552,522 | |||
6,920,201 | |||||
Energy Equipment and Services — 1.4% | |||||
Exterran Corp.(1) | 31,949 | 565,497 | |||
Mammoth Energy Services, Inc. | 6,353 | 114,227 | |||
Matrix Service Co.(1) | 96,059 | 1,723,298 | |||
Newpark Resources, Inc.(1) | 46,716 | 320,939 | |||
SEACOR Holdings, Inc.(1) | 44,791 | 1,657,267 | |||
Unit Corp.(1) | 37,559 | 536,343 | |||
4,917,571 | |||||
Entertainment — 0.5% | |||||
Glu Mobile, Inc.(1) | 93,416 | 753,867 | |||
IMAX Corp.(1) | 59,692 | 1,122,807 | |||
1,876,674 | |||||
Equity Real Estate Investment Trusts (REITs) — 6.2% | |||||
American Assets Trust, Inc. | 31,622 | 1,270,256 | |||
Americold Realty Trust | 18,894 | 482,553 |
6
Shares | Value | ||||
CareTrust REIT, Inc. | 110,540 | $ | 2,040,568 | ||
Chesapeake Lodging Trust | 85,492 | 2,081,730 | |||
City Office REIT, Inc. | 56,917 | 583,399 | |||
Franklin Street Properties Corp. | 73,518 | 458,017 | |||
GEO Group, Inc. (The) | 106,223 | 2,092,593 | |||
Industrial Logistics Properties Trust | 43,663 | 858,842 | |||
InfraREIT, Inc. | 19,003 | 399,443 | |||
Lexington Realty Trust | 172,035 | 1,412,407 | |||
LTC Properties, Inc. | 12,843 | 535,296 | |||
MedEquities Realty Trust, Inc. | 7,722 | 52,819 | |||
Pebblebrook Hotel Trust | 45,237 | 1,280,660 | |||
PS Business Parks, Inc. | 22,437 | 2,939,247 | |||
RLJ Lodging Trust | 131,943 | 2,163,865 | |||
Select Income REIT | 86,889 | 639,503 | |||
Sunstone Hotel Investors, Inc. | 173,176 | 2,253,020 | |||
Whitestone REIT | 42,881 | 525,721 | |||
22,069,939 | |||||
Food and Staples Retailing — 0.1% | |||||
Natural Grocers by Vitamin Cottage, Inc.(1) | 11,868 | 181,937 | |||
Smart & Final Stores, Inc.(1) | 20,160 | 95,558 | |||
277,495 | |||||
Food Products — 0.4% | |||||
Cal-Maine Foods, Inc. | 13,098 | 554,045 | |||
Lancaster Colony Corp. | 4,165 | 736,622 | |||
1,290,667 | |||||
Health Care Equipment and Supplies — 4.8% | |||||
AngioDynamics, Inc.(1) | 82,417 | 1,659,054 | |||
Atrion Corp. | 268 | 198,609 | |||
Cardiovascular Systems, Inc.(1) | 23,650 | 673,789 | |||
CONMED Corp. | 33,492 | 2,150,186 | |||
Globus Medical, Inc., Class A(1) | 61,182 | 2,647,957 | |||
Haemonetics Corp.(1) | 27,620 | 2,763,381 | |||
Integer Holdings Corp.(1) | 34,394 | 2,622,886 | |||
Meridian Bioscience, Inc. | 10,878 | 188,842 | |||
Orthofix Medical, Inc.(1) | 7,189 | 377,351 | |||
Quidel Corp.(1) | 8,872 | 433,131 | |||
STAAR Surgical Co.(1) | 57,916 | 1,848,100 | |||
Surmodics, Inc.(1) | 32,149 | 1,519,362 | |||
17,082,648 | |||||
Health Care Providers and Services — 3.2% | |||||
Amedisys, Inc.(1) | 19,708 | 2,308,004 | |||
Brookdale Senior Living, Inc.(1) | 183,852 | 1,231,808 | |||
CorVel Corp.(1) | 2,821 | 174,112 | |||
Ensign Group, Inc. (The) | 51,536 | 1,999,082 | |||
Molina Healthcare, Inc.(1) | 8,992 | 1,045,050 | |||
National Healthcare Corp. | 20,304 | 1,592,849 | |||
Tenet Healthcare Corp.(1) | 86,398 | 1,480,862 | |||
Tivity Health, Inc.(1) | 69,488 | 1,723,997 | |||
11,555,764 | |||||
Health Care Technology — 0.8% | |||||
Computer Programs & Systems, Inc. | 40,433 | 1,014,868 |
7
Shares | Value | ||||
HealthStream, Inc. | 79,473 | $ | 1,919,273 | ||
2,934,141 | |||||
Hotels, Restaurants and Leisure — 2.4% | |||||
BJ's Restaurants, Inc. | 37,745 | 1,908,765 | |||
Brinker International, Inc. | 17,961 | 789,925 | |||
Carrols Restaurant Group, Inc.(1) | 10,287 | 101,224 | |||
Cheesecake Factory, Inc. (The) | 38,877 | 1,691,538 | |||
International Speedway Corp., Class A | 57,824 | 2,536,160 | |||
Ruth's Hospitality Group, Inc. | 63,553 | 1,444,560 | |||
Town Sports International Holdings, Inc.(1) | 38,585 | 246,944 | |||
8,719,116 | |||||
Household Durables — 0.4% | |||||
Hooker Furniture Corp. | 7,394 | 194,758 | |||
ZAGG, Inc.(1) | 122,383 | 1,196,906 | |||
1,391,664 | |||||
Independent Power and Renewable Electricity Producers — 0.5% | |||||
Clearway Energy, Inc., Class A | 22,407 | 379,126 | |||
TerraForm Power, Inc., Class A | 123,721 | 1,388,150 | |||
1,767,276 | |||||
Insurance — 1.6% | |||||
Employers Holdings, Inc. | 48,485 | 2,034,915 | |||
FBL Financial Group, Inc., Class A | 2,819 | 185,067 | |||
National Western Life Group, Inc., Class A | 249 | 74,874 | |||
Safety Insurance Group, Inc. | 2,275 | 186,118 | |||
Stewart Information Services Corp. | 62,047 | 2,568,746 | |||
Universal Insurance Holdings, Inc. | 14,944 | 566,677 | |||
5,616,397 | |||||
Interactive Media and Services — 1.6% | |||||
Care.com, Inc.(1) | 120,544 | 2,327,705 | |||
Liberty TripAdvisor Holdings, Inc., Class A(1) | 42,018 | 667,666 | |||
Meet Group, Inc. (The)(1) | 47,359 | 219,272 | |||
QuinStreet, Inc.(1) | 153,807 | 2,496,287 | |||
5,710,930 | |||||
Internet and Direct Marketing Retail — 1.5% | |||||
Liberty Expedia Holdings, Inc., Class A(1) | 22,403 | 876,181 | |||
Nutrisystem, Inc. | 58,217 | 2,554,562 | |||
PetMed Express, Inc. | 86,165 | 2,004,198 | |||
5,434,941 | |||||
IT Services — 1.7% | |||||
Carbonite, Inc.(1) | 57,524 | 1,453,056 | |||
Endurance International Group Holdings, Inc.(1) | 250,242 | 1,664,109 | |||
EVERTEC, Inc. | 80,284 | 2,304,151 | |||
Science Applications International Corp. | 8,075 | 514,378 | |||
5,935,694 | |||||
Leisure Products — 1.4% | |||||
Callaway Golf Co. | 110,825 | 1,695,623 | |||
Johnson Outdoors, Inc., Class A | 3,314 | 194,664 | |||
Malibu Boats, Inc., Class A(1) | 49,564 | 1,724,827 | |||
MasterCraft Boat Holdings, Inc.(1) | 69,871 | 1,306,588 | |||
4,921,702 |
8
Shares | Value | ||||
Life Sciences Tools and Services — 1.0% | |||||
Medpace Holdings, Inc.(1) | 42,093 | $ | 2,227,983 | ||
NeoGenomics, Inc.(1) | 104,399 | 1,316,471 | |||
3,544,454 | |||||
Machinery — 2.2% | |||||
Columbus McKinnon Corp. | 6,435 | 193,951 | |||
Global Brass & Copper Holdings, Inc. | 71,360 | 1,794,704 | |||
Harsco Corp.(1) | 108,599 | 2,156,776 | |||
Navistar International Corp.(1) | 56,982 | 1,478,683 | |||
SPX FLOW, Inc.(1) | 22,262 | 677,210 | |||
TriMas Corp.(1) | 53,766 | 1,467,274 | |||
7,768,598 | |||||
Marine — 0.1% | |||||
Safe Bulkers, Inc.(1) | 100,654 | 179,164 | |||
Media — 0.9% | |||||
Emerald Expositions Events, Inc. | 15,543 | 191,800 | |||
Gray Television, Inc.(1) | 64,332 | 948,254 | |||
MSG Networks, Inc., Class A(1) | 7,065 | 166,451 | |||
New Media Investment Group, Inc. | 122,368 | 1,415,798 | |||
Nexstar Media Group, Inc., Class A | 8,242 | 648,151 | |||
3,370,454 | |||||
Metals and Mining — 1.2% | |||||
Kaiser Aluminum Corp. | 19,229 | 1,716,957 | |||
Schnitzer Steel Industries, Inc., Class A | 47,979 | 1,033,947 | |||
Worthington Industries, Inc. | 48,909 | 1,703,990 | |||
4,454,894 | |||||
Oil, Gas and Consumable Fuels — 3.7% | |||||
Arch Coal, Inc., Class A | 25,526 | 2,118,403 | |||
CVR Energy, Inc. | 53,046 | 1,829,026 | |||
Delek US Holdings, Inc. | 47,018 | 1,528,555 | |||
Denbury Resources, Inc.(1) | 469,730 | 803,238 | |||
Evolution Petroleum Corp. | 43,486 | 296,575 | |||
NACCO Industries, Inc., Class A | 33,138 | 1,123,378 | |||
Renewable Energy Group, Inc.(1) | 80,523 | 2,069,441 | |||
Southwestern Energy Co.(1) | 521,668 | 1,778,888 | |||
W&T Offshore, Inc.(1) | 363,662 | 1,498,287 | |||
13,045,791 | |||||
Paper and Forest Products — 1.3% | |||||
Louisiana-Pacific Corp. | 122,981 | 2,732,638 | |||
Verso Corp., Class A(1) | 77,580 | 1,737,792 | |||
4,470,430 | |||||
Personal Products — 0.7% | |||||
Medifast, Inc. | 15,601 | 1,950,437 | |||
Natural Health Trends Corp. | 29,691 | 548,987 | |||
2,499,424 | |||||
Pharmaceuticals — 1.5% | |||||
Assertio Therapeutics, Inc.(1) | 61,554 | 222,210 | |||
Collegium Pharmaceutical, Inc.(1) | 18,867 | 323,947 | |||
Corcept Therapeutics, Inc.(1) | 36,628 | 489,350 | |||
Horizon Pharma plc(1) | 70,100 | 1,369,754 | |||
Innoviva, Inc.(1) | 69,977 | 1,221,099 |
9
Shares | Value | ||||
Phibro Animal Health Corp., Class A | 26,133 | $ | 840,437 | ||
Supernus Pharmaceuticals, Inc.(1) | 27,060 | 898,933 | |||
5,365,730 | |||||
Professional Services — 3.4% | |||||
ASGN, Inc.(1) | 39,341 | 2,144,085 | |||
Barrett Business Services, Inc. | 15,528 | 888,978 | |||
BG Staffing, Inc. | 56,483 | 1,166,374 | |||
Heidrick & Struggles International, Inc. | 67,154 | 2,094,533 | |||
Insperity, Inc. | 18,773 | 1,752,647 | |||
Kforce, Inc. | 67,504 | 2,087,224 | |||
TrueBlue, Inc.(1) | 85,892 | 1,911,097 | |||
12,044,938 | |||||
Real Estate Management and Development — 0.3% | |||||
Marcus & Millichap, Inc.(1) | 30,715 | 1,054,446 | |||
RMR Group, Inc. (The), Class A | 999 | 53,027 | |||
1,107,473 | |||||
Road and Rail — 2.1% | |||||
ArcBest Corp. | 56,715 | 1,943,056 | |||
Covenant Transportation Group, Inc., Class A(1) | 27,172 | 521,702 | |||
Marten Transport Ltd. | 49,408 | 799,915 | |||
Saia, Inc.(1) | 34,652 | 1,934,275 | |||
USA Truck, Inc.(1) | 18,512 | 277,125 | |||
Werner Enterprises, Inc. | 69,524 | 2,053,739 | |||
7,529,812 | |||||
Semiconductors and Semiconductor Equipment — 3.3% | |||||
Cabot Microelectronics Corp. | 24,294 | 2,316,433 | |||
Diodes, Inc.(1) | 72,612 | 2,342,463 | |||
Lattice Semiconductor Corp.(1) | 341,415 | 2,362,592 | |||
Nanometrics, Inc.(1) | 71,839 | 1,963,360 | |||
Rudolph Technologies, Inc.(1) | 45,950 | 940,596 | |||
SMART Global Holdings, Inc.(1) | 57,541 | 1,708,968 | |||
11,634,412 | |||||
Software — 7.2% | |||||
Altair Engineering, Inc.(1) | 7,633 | 210,518 | |||
Appfolio, Inc., Class A(1) | 30,726 | 1,819,594 | |||
Aspen Technology, Inc.(1) | 8,424 | 692,284 | |||
ChannelAdvisor Corp.(1) | 7,528 | 85,443 | |||
CommVault Systems, Inc.(1) | 12,449 | 735,611 | |||
Cornerstone OnDemand, Inc.(1) | 48,318 | 2,436,677 | |||
Envestnet, Inc.(1) | 49,551 | 2,437,414 | |||
Fair Isaac Corp.(1) | 11,286 | 2,110,482 | |||
Model N, Inc.(1) | 114,275 | 1,511,858 | |||
New Relic, Inc.(1) | 30,677 | 2,483,917 | |||
Paylocity Holding Corp.(1) | 36,120 | 2,174,785 | |||
Progress Software Corp. | 63,145 | 2,241,016 | |||
SPS Commerce, Inc.(1) | 25,851 | 2,129,605 | |||
Upland Software, Inc.(1) | 19,258 | 523,433 | |||
Verint Systems, Inc.(1) | 28,581 | 1,209,262 | |||
Workiva, Inc.(1) | 15,287 | 548,651 | |||
Zendesk, Inc.(1) | 27,827 | 1,624,262 |
10
Shares | Value | ||||
Zix Corp.(1) | 104,452 | $ | 598,510 | ||
25,573,322 | |||||
Specialty Retail — 4.9% | |||||
Abercrombie & Fitch Co., Class A | 48,332 | 969,057 | |||
American Eagle Outfitters, Inc. | 128,639 | 2,486,592 | |||
Asbury Automotive Group, Inc.(1) | 11,061 | 737,326 | |||
Barnes & Noble Education, Inc.(1) | 268,061 | 1,074,925 | |||
Buckle, Inc. (The) | 89,021 | 1,721,666 | |||
Caleres, Inc. | 57,699 | 1,605,763 | |||
Cato Corp. (The), Class A | 22,440 | 320,219 | |||
Citi Trends, Inc. | 7,390 | 150,682 | |||
Conn's, Inc.(1) | 15,528 | 292,858 | |||
Genesco, Inc.(1) | 45,793 | 2,028,630 | |||
MarineMax, Inc.(1) | 62,305 | 1,140,805 | |||
Shoe Carnival, Inc. | 56,289 | 1,886,244 | |||
Tailored Brands, Inc. | 108,405 | 1,478,644 | |||
Tilly's, Inc., Class A | 54,209 | 588,710 | |||
Zumiez, Inc.(1) | 50,579 | 969,599 | |||
17,451,720 | |||||
Technology Hardware, Storage and Peripherals — 0.2% | |||||
Immersion Corp.(1) | 43,178 | 386,875 | |||
Pure Storage, Inc., Class A(1) | 18,463 | 296,885 | |||
683,760 | |||||
Textiles, Apparel and Luxury Goods — 2.5% | |||||
Crocs, Inc.(1) | 86,811 | 2,255,350 | |||
Deckers Outdoor Corp.(1) | 21,498 | 2,750,669 | |||
G-III Apparel Group Ltd.(1) | 37,528 | 1,046,656 | |||
Movado Group, Inc. | 46,191 | 1,460,560 | |||
Oxford Industries, Inc. | 8,950 | 635,808 | |||
Vera Bradley, Inc.(1) | 104,113 | 892,248 | |||
9,041,291 | |||||
Thrifts and Mortgage Finance — 4.4% | |||||
Essent Group Ltd.(1) | 73,219 | 2,502,625 | |||
Flagstar Bancorp, Inc.(1) | 72,119 | 1,903,942 | |||
MGIC Investment Corp.(1) | 222,019 | 2,322,319 | |||
NMI Holdings, Inc., Class A(1) | 113,045 | 2,017,853 | |||
Radian Group, Inc. | 140,385 | 2,296,699 | |||
TrustCo Bank Corp. NY | 83,734 | 574,415 | |||
Walker & Dunlop, Inc. | 42,487 | 1,837,563 | |||
Washington Federal, Inc. | 87,389 | 2,334,160 | |||
15,789,576 | |||||
Trading Companies and Distributors — 1.4% | |||||
Applied Industrial Technologies, Inc. | 44,315 | 2,390,351 | |||
Rush Enterprises, Inc., Class A | 58,468 | 2,015,976 | |||
Veritiv Corp.(1) | 29,275 | 730,997 | |||
5,137,324 | |||||
Wireless Telecommunication Services — 0.5% | |||||
Boingo Wireless, Inc.(1) | 23,721 | 487,941 | |||
Shenandoah Telecommunications Co. | 14,128 | 625,164 |
11
Shares | Value | ||||
Spok Holdings, Inc. | 38,772 | $ | 514,117 | ||
1,627,222 | |||||
TOTAL COMMON STOCKS (Cost $382,458,060) | 351,963,757 | ||||
TEMPORARY CASH INVESTMENTS — 1.1% | |||||
Repurchase Agreement, BMO Capital Markets Corp., (collateralized by various U.S. Treasury obligations, 0.125% - 2.75%, 10/31/19 - 2/15/44, valued at $3,481,551), in a joint trading account at 2.45%, dated 12/31/18, due 1/2/19 (Delivery value $3,414,195) | 3,413,730 | ||||
Repurchase Agreement, Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 3.375%, 11/15/48, valued at $582,513), at 1.25%, dated 12/31/18, due 1/2/19 (Delivery value $569,040) | 569,000 | ||||
State Street Institutional U.S. Government Money Market Fund, Premier Class | 3,262 | 3,262 | |||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $3,985,992) | 3,985,992 | ||||
TOTAL INVESTMENT SECURITIES — 99.9% (Cost $386,444,052) | 355,949,749 | ||||
OTHER ASSETS AND LIABILITIES — 0.1% | 413,424 | ||||
TOTAL NET ASSETS — 100.0% | $ | 356,363,173 |
NOTES TO SCHEDULE OF INVESTMENTS |
(1) | Non-income producing. |
See Notes to Financial Statements.
12
Statement of Assets and Liabilities |
DECEMBER 31, 2018 (UNAUDITED) | |||
Assets | |||
Investment securities, at value (cost of $386,444,052) | $ | 355,949,749 | |
Dividends and interest receivable | 1,249,998 | ||
357,199,747 | |||
Liabilities | |||
Payable for investments purchased | 836,574 | ||
Net Assets | $ | 356,363,173 | |
G Class Capital Shares, $0.01 Par Value | |||
Shares authorized | 340,000,000 | ||
Shares outstanding | 50,392,787 | ||
Net Asset Value Per Share | $ | 7.07 | |
Net Assets Consist of: | |||
Capital (par value and paid-in surplus) | $ | 397,209,068 | |
Distributable earnings | (40,845,895 | ) | |
$ | 356,363,173 |
See Notes to Financial Statements.
13
Statement of Operations |
FOR THE SIX MONTHS ENDED DECEMBER 31, 2018 (UNAUDITED) | |||
Investment Income (Loss) | |||
Income: | |||
Dividends (net of foreign taxes withheld of $1,379) | $ | 2,611,438 | |
Interest | 34,518 | ||
2,645,956 | |||
Expenses: | |||
Management fees | 1,345,384 | ||
Directors' fees and expenses | 14,285 | ||
Other expenses | 424 | ||
1,360,093 | |||
Fees waived | (1,345,384 | ) | |
14,709 | |||
Net investment income (loss) | 2,631,247 | ||
Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investment transactions | 10,759,373 | ||
Futures contract transactions | 129,464 | ||
10,888,837 | |||
Change in net unrealized appreciation (depreciation) on investments | (90,120,250 | ) | |
Net realized and unrealized gain (loss) | (79,231,413 | ) | |
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | (76,600,166 | ) |
See Notes to Financial Statements.
14
Statement of Changes in Net Assets |
SIX MONTHS ENDED DECEMBER 31, 2018 (UNAUDITED) AND YEAR ENDED JUNE 30, 2018 | ||||||
Increase (Decrease) in Net Assets | December 31, 2018 | June 30, 2018 | ||||
Operations | ||||||
Net investment income (loss) | $ | 2,631,247 | $ | 3,964,550 | ||
Net realized gain (loss) | 10,888,837 | 43,989,451 | ||||
Change in net unrealized appreciation (depreciation) | (90,120,250 | ) | 12,517,018 | |||
Net increase (decrease) in net assets resulting from operations | (76,600,166 | ) | 60,471,019 | |||
Distributions to Shareholders | ||||||
From earnings:(1) | (56,176,953 | ) | (59,035,626 | ) | ||
Capital Share Transactions | ||||||
Proceeds from shares sold | 50,188,598 | 29,785,693 | ||||
Proceeds from reinvestment of distributions | 56,176,953 | 59,035,626 | ||||
Payments for shares redeemed | (41,253,562 | ) | (105,178,093 | ) | ||
Net increase (decrease) in net assets from capital share transactions | 65,111,989 | (16,356,774 | ) | |||
Net increase (decrease) in net assets | (67,665,130 | ) | (14,921,381 | ) | ||
Net Assets | ||||||
Beginning of period | 424,028,303 | 438,949,684 | ||||
End of period | $ | 356,363,173 | $ | 424,028,303 | ||
Transactions in Shares of the Fund | ||||||
Sold | 5,433,132 | 2,936,932 | ||||
Issued in reinvestment of distributions | 7,412,688 | 6,185,583 | ||||
Redeemed | (4,220,090 | ) | (10,098,030 | ) | ||
Net increase (decrease) in shares of the fund | 8,625,730 | (975,515 | ) |
(1) | Prior period presentation has been updated to reflect the current period combination of distributions to shareholders from net investment income and net realized gains. Distributions from net investment income were $(2,762,976). Distributions from net realized gains were $(56,272,650). |
See Notes to Financial Statements.
15
Notes to Financial Statements |
DECEMBER 31, 2018 (UNAUDITED)
1. Organization
American Century Quantitative Equity 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. NT Small Company 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 is not permitted to invest in securities issued by companies assigned the Global Industry Classification Standard or the Bloomberg Industry Classification Standard for the tobacco industry. The fund offers the G Class.
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.
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. Exchange-traded futures contracts are valued at the settlement price as provided by the appropriate exchange.
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.
16
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.
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.
Segregated Assets — In accordance with the 1940 Act, the fund segregates assets on its books and records to cover certain types of investment securities and other financial instruments. ACIM monitors, on a daily basis, the securities segregated to ensure the fund designates a sufficient amount of liquid assets, marked-to-market daily. The fund may also receive assets or be required to pledge assets at the custodian bank or with a broker for collateral requirements.
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.
Distributions to Shareholders — Distributions from net investment income, if any, are generally declared and paid quarterly. Distributions from 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.
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., and the corporation’s transfer agent, American Century Services, LLC, are wholly owned, directly or indirectly, by ACC. Various funds issued by American Century Asset Allocation Portfolios, Inc. own, in aggregate, 100% of the shares of the fund. Related parties do not invest in the fund for the purpose of exercising management or control.
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). The agreement provides that all expenses of managing and operating the fund, except 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
17
based on the daily net assets of the fund and paid monthly in arrears. The fee consists of (1) an Investment Category Fee based on the daily net assets of the fund and certain other accounts managed by the investment advisor that are in the same broad investment category as the fund and (2) a Complex Fee based on the assets of all the funds in the American Century Investments family of funds. The rates for the Investment Category Fee range from 0.5380% to 0.7200%. The rates for the Complex Fee range from 0.0500% to 0.1100%. The investment advisor agreed to waive the fund's management fee in its entirety. The investment advisor expects this waiver to remain in effect permanently and cannot terminate it without the approval of the Board of Directors. The effective annual management fee for the period ended December 31, 2018 was 0.66% before waiver and 0.00% after waiver.
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 $1,361,104 and $3,839,004, respectively. The effect of interfund transactions on the Statement of Operations was $1,277,861 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 December 31, 2018 were $237,449,145 and $227,203,906, respectively.
5. 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.
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 | $ | 351,963,757 | — | — | ||||
Temporary Cash Investments | 3,262 | $ | 3,982,730 | — | ||||
$ | 351,967,019 | $ | 3,982,730 | — |
18
6. Derivative Instruments
Equity Price Risk — The fund is subject to equity price risk in the normal course of pursuing its investment objectives. A fund may enter into futures contracts based on an equity index in order to manage its exposure to changes in market conditions. A fund may purchase futures contracts to gain exposure to increases in market value or sell futures contracts to protect against a decline in market value. Upon entering into a futures contract, a fund is required to deposit either cash or securities in an amount equal to a certain percentage of the contract value (initial margin). Subsequent payments (variation margin) are made or received daily, in cash, by a fund. The variation margin is equal to the daily change in the contract value and is recorded as unrealized gains and losses. A fund recognizes a realized gain or loss when the contract is closed or expires. Net realized and unrealized gains or losses occurring during the holding period of futures contracts are a component of net realized gain (loss) on futures contract transactions and change in net unrealized appreciation (depreciation) on futures contracts, respectively. One of the risks of entering into futures contracts is the possibility that the change in value of the contract may not correlate with the changes in value of the underlying securities. During the period, the fund participated in equity price risk derivative instruments for temporary investment purposes.
At period end, the fund did not have any derivative instruments disclosed on the Statement of Assets and Liabilities. For the six months ended December 31, 2018, the effect of equity price risk derivative instruments on the Statement of Operations was $129,464 in net realized gain (loss) on futures contract transactions.
7. Risk Factors
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.
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.
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 | $ | 387,763,946 | |
Gross tax appreciation of investments | $ | 22,536,540 | |
Gross tax depreciation of investments | (54,350,737 | ) | |
Net tax appreciation (depreciation) of investments | $ | (31,814,197 | ) |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales.
19
Financial Highlights |
For a Share Outstanding Throughout the Years Ended June 30 (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 | 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) | |||
G Class | |||||||||||||||||
2018(3) | $10.15 | 0.06 | (1.83) | (1.77) | (0.10) | (1.21) | (1.31) | $7.07 | (18.28)% | 0.01%(4) | 0.67%(4) | 1.29%(4) | 0.63%(4) | 57% | $356,363 | ||
2018 | $10.27 | 0.09 | 1.26 | 1.35 | (0.06) | (1.41) | (1.47) | $10.15 | 14.13% | 0.06% | 0.66% | 0.90% | 0.30% | 99% | $424,028 | ||
2017 | $8.51 | 0.05 | 1.77 | 1.82 | (0.06) | — | (0.06) | $10.27 | 21.42% | 0.67% | 0.67% | 0.57% | 0.57% | 118% | $438,950 | ||
2016 | $10.13 | 0.05 | (0.89) | (0.84) | (0.05) | (0.73) | (0.78) | $8.51 | (8.27)% | 0.67% | 0.67% | 0.56% | 0.56% | 107% | $392,337 | ||
2015 | $11.00 | 0.04 | 0.41 | 0.45 | (0.03) | (1.29) | (1.32) | $10.13 | 5.12% | 0.67% | 0.67% | 0.43% | 0.43% | 119% | $353,174 | ||
2014 | $9.89 | 0.04 | 2.48 | 2.52 | (0.04) | (1.37) | (1.41) | $11.00 | 26.77% | 0.67% | 0.67% | 0.38% | 0.38% | 96% | $371,130 |
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 December 31, 2018 (unaudited). |
(4) | Annualized. |
See Notes to Financial Statements.
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
Descriptions of the principles and policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund are available without charge, upon request, by calling 1-800-345-2021 or visiting the "About Us" page of American Century Investments’ website at americancentury.com. A description of the policies is also available 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. 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.
21
Notes |
22
Notes |
23
Notes |
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 Quantitative Equity 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. | ||
©2019 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-91463 1902 |
Semiannual Report | |
December 31, 2018 | |
Small Company Fund | |
Investor Class (ASQIX) | |
I Class (ASCQX) | |
A Class (ASQAX) | |
C Class (ASQCX) | |
R Class (ASCRX) | |
R5 Class (ASQGX) |
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the fund’s shareholder reports like this one will no longer be sent by mail, unless you specifically request paper copies of the reports from the fund or from your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the fund or your financial intermediary electronically by calling or sending an email request to your appropriate contacts as listed on the back cover of this report.
You may elect to receive all future reports in paper free of charge. You can inform the fund or your financial intermediary that you wish to continue receiving paper copies of your shareholder reports by calling or sending an email request to your appropriate contacts as listed on the back cover of this report. Your election to receive reports in paper will apply to all funds held with the fund complex/your financial intermediary.
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 period ended December 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, please visit our website, americancentury.com.
Risk-On/Risk-Off Rotation Highlights Heightened Volatility
The six-month reporting period began on an upbeat note for stock investors. Against a backdrop of robust economic and earnings data and federal tax and regulatory reform, U.S. stocks soared. The S&P 500 Index gained nearly 8% in the first three months of the period. Outside the U.S., stocks also advanced, but the gains were more subdued amid signs of slowing growth. Meanwhile, favorable U.S. economic data and continued Federal Reserve (Fed) tightening helped push U.S. Treasury yields higher. This pressured interest rate-sensitive assets, including longer-maturity Treasuries, gold, utilities stocks, and REITs (real estate investment trusts), and they generally underperformed U.S. stocks.
In the second half of the reporting period, investor sentiment and asset-class performance took a drastic turn. Investors exited stocks on mounting concerns about slowing global economic and earnings growth and Fed policy. Along with its December interest rate increase, the Fed delivered a surprisingly bullish outlook. Investors feared the Fed’s plans for two rate hikes in 2019 were too aggressive, further fueling the steep sell-off among riskier assets. The S&P 500 Index declined more than 13% in the fourth quarter. For the entire six-month period, U.S. stocks fell 6.85%. Losses among non-U.S. stocks were even steeper.
The risk-off climate in the second half of the period sparked a flight to quality. Treasury yields plunged in the fourth quarter, triggering a year-end rally in Treasuries and other perceived safe-haven assets. Overall, Treasuries were up for the six-month period and significantly outperformed stocks and other riskier assets.
As recent performance trends indicate, market volatility remains a formidable force. But volatile markets often produce the most compelling investment opportunities. We believe this scenario underscores the importance of 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 |
DECEMBER 31, 2018 | |
Top Ten Holdings | % of net assets |
PS Business Parks, Inc. | 0.8% |
Investment Technology Group, Inc. | 0.8% |
Generac Holdings, Inc. | 0.8% |
Haemonetics Corp. | 0.8% |
Deckers Outdoor Corp. | 0.8% |
Louisiana-Pacific Corp. | 0.8% |
Globus Medical, Inc., Class A | 0.7% |
Green Dot Corp., Class A | 0.7% |
Integer Holdings Corp. | 0.7% |
Nutrisystem, Inc. | 0.7% |
Top Five Industries | % of net assets |
Banks | 7.5% |
Software | 7.0% |
Equity Real Estate Investment Trusts (REITs) | 6.1% |
Specialty Retail | 4.8% |
Health Care Equipment and Supplies | 4.7% |
Types of Investments in Portfolio | % of net assets |
Common Stocks | 97.5% |
Temporary Cash Investments | 2.4% |
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 July 1, 2018 to December 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 7/1/18 | Ending Account Value 12/31/18 | Expenses Paid During Period(1) 7/1/18 - 12/31/18 | Annualized Expense Ratio(1) | |
Actual | ||||
Investor Class | $1,000 | $814.90 | $3.98 | 0.87% |
I Class | $1,000 | $815.60 | $3.07 | 0.67% |
A Class | $1,000 | $813.80 | $5.12 | 1.12% |
C Class | $1,000 | $810.80 | $8.54 | 1.87% |
R Class | $1,000 | $812.40 | $6.26 | 1.37% |
R5 Class | $1,000 | $815.80 | $3.07 | 0.67% |
Hypothetical | ||||
Investor Class | $1,000 | $1,020.82 | $4.43 | 0.87% |
I Class | $1,000 | $1,021.83 | $3.41 | 0.67% |
A Class | $1,000 | $1,019.56 | $5.70 | 1.12% |
C Class | $1,000 | $1,015.78 | $9.50 | 1.87% |
R Class | $1,000 | $1,018.30 | $6.97 | 1.37% |
R5 Class | $1,000 | $1,021.83 | $3.41 | 0.67% |
(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 |
DECEMBER 31, 2018 (UNAUDITED)
Shares | Value | ||||
COMMON STOCKS — 97.5% | |||||
Aerospace and Defense — 0.9% | |||||
Aerojet Rocketdyne Holdings, Inc.(1) | 57,760 | $ | 2,034,885 | ||
Curtiss-Wright Corp. | 27,645 | 2,823,107 | |||
Vectrus, Inc.(1) | 28,912 | 623,921 | |||
5,481,913 | |||||
Air Freight and Logistics — 0.2% | |||||
Forward Air Corp. | 1,344 | 73,718 | |||
Hub Group, Inc., Class A(1) | 26,997 | 1,000,779 | |||
1,074,497 | |||||
Banks — 7.5% | |||||
Bancorp, Inc. (The)(1) | 318,153 | 2,532,498 | |||
Bank of NT Butterfield & Son Ltd. (The) | 102,149 | 3,202,371 | |||
Banner Corp. | 10,091 | 539,667 | |||
Bryn Mawr Bank Corp. | 5,118 | 176,059 | |||
Camden National Corp. | 14,469 | 520,450 | |||
Central Pacific Financial Corp. | 129,334 | 3,149,283 | |||
Customers Bancorp, Inc.(1) | 96,439 | 1,755,190 | |||
Enterprise Financial Services Corp. | 64,105 | 2,412,271 | |||
Financial Institutions, Inc. | 59,984 | 1,541,589 | |||
First Citizens BancShares, Inc., Class A | 7,451 | 2,809,400 | |||
First Merchants Corp. | 10,868 | 372,446 | |||
Franklin Financial Network, Inc.(1) | 111,968 | 2,952,596 | |||
Hanmi Financial Corp. | 34,998 | 689,461 | |||
Hilltop Holdings, Inc. | 187,745 | 3,347,493 | |||
Independent Bank Corp. | 124,546 | 2,617,957 | |||
International Bancshares Corp. | 104,880 | 3,607,872 | |||
Lakeland Bancorp, Inc. | 30,371 | 449,795 | |||
OFG Bancorp | 187,451 | 3,085,443 | |||
Peapack Gladstone Financial Corp. | 25,118 | 632,471 | |||
Renasant Corp. | 37,828 | 1,141,649 | |||
UMB Financial Corp. | 36,345 | 2,215,955 | |||
United Community Banks, Inc. | 155,703 | 3,341,386 | |||
43,093,302 | |||||
Biotechnology — 4.1% | |||||
Acorda Therapeutics, Inc.(1) | 83,530 | 1,301,397 | |||
Arcus Biosciences, Inc.(1) | 18,246 | 196,509 | |||
Ardelyx, Inc.(1) | 56,811 | 101,692 | |||
BioSpecifics Technologies Corp.(1) | 19,834 | 1,201,940 | |||
CareDx, Inc.(1) | 4,483 | 112,703 | |||
ChemoCentryx, Inc.(1) | 35,138 | 383,356 | |||
Emergent BioSolutions, Inc.(1) | 35,182 | 2,085,589 | |||
Exelixis, Inc.(1) | 60,296 | 1,186,022 | |||
Genomic Health, Inc.(1) | 27,784 | 1,789,567 | |||
Halozyme Therapeutics, Inc.(1) | 118,027 | 1,726,735 | |||
Inovio Pharmaceuticals, Inc.(1) | 60,524 | 242,096 | |||
Ligand Pharmaceuticals, Inc.(1) | 14,293 | 1,939,560 |
6
Shares | Value | ||||
Loxo Oncology, Inc.(1) | 17,055 | $ | 2,388,894 | ||
Myriad Genetics, Inc.(1) | 50,754 | 1,475,419 | |||
Pieris Pharmaceuticals, Inc.(1) | 349,298 | 929,133 | |||
Protagonist Therapeutics, Inc.(1) | 60,954 | 410,220 | |||
Prothena Corp. plc(1) | 10,529 | 108,449 | |||
Puma Biotechnology, Inc.(1) | 9,627 | 195,910 | |||
REGENXBIO, Inc.(1) | 25,879 | 1,085,624 | |||
Spark Therapeutics, Inc.(1) | 35,635 | 1,394,754 | |||
Vanda Pharmaceuticals, Inc.(1) | 59,352 | 1,550,868 | |||
Veracyte, Inc.(1) | 54,742 | 688,654 | |||
Vericel Corp.(1) | 70,278 | 1,222,837 | |||
Voyager Therapeutics, Inc.(1) | 14,092 | 132,465 | |||
23,850,393 | |||||
Building Products — 1.0% | |||||
Armstrong Flooring, Inc.(1) | 21,898 | 259,272 | |||
Continental Building Products, Inc.(1) | 122,630 | 3,120,934 | |||
Insteel Industries, Inc. | 7,806 | 189,530 | |||
Patrick Industries, Inc.(1) | 78,730 | 2,331,195 | |||
5,900,931 | |||||
Capital Markets — 1.7% | |||||
Blucora, Inc.(1) | 106,895 | 2,847,683 | |||
Investment Technology Group, Inc. | 151,088 | 4,568,901 | |||
Piper Jaffray Cos. | 6,854 | 451,267 | |||
Waddell & Reed Financial, Inc., Class A | 118,362 | 2,139,985 | |||
10,007,836 | |||||
Chemicals — 0.5% | |||||
FutureFuel Corp. | 25,628 | 406,460 | |||
Kraton Corp.(1) | 80,320 | 1,754,189 | |||
OMNOVA Solutions, Inc.(1) | 96,783 | 709,419 | |||
Tredegar Corp. | 12,910 | 204,753 | |||
3,074,821 | |||||
Commercial Services and Supplies — 2.5% | |||||
Brady Corp., Class A | 63,735 | 2,769,923 | |||
Herman Miller, Inc. | 112,580 | 3,405,545 | |||
McGrath RentCorp | 20,802 | 1,070,887 | |||
MSA Safety, Inc. | 37,801 | 3,563,500 | |||
Steelcase, Inc., Class A | 224,634 | 3,331,322 | |||
US Ecology, Inc. | 7,084 | 446,151 | |||
14,587,328 | |||||
Communications Equipment — 0.9% | |||||
Ciena Corp.(1) | 84,413 | 2,862,445 | |||
Comtech Telecommunications Corp. | 17,927 | 436,343 | |||
Lumentum Holdings, Inc.(1) | 18,660 | 783,907 | |||
Quantenna Communications, Inc.(1) | 75,912 | 1,089,337 | |||
5,172,032 | |||||
Construction and Engineering — 1.2% | |||||
Comfort Systems USA, Inc. | 75,707 | 3,306,882 | |||
EMCOR Group, Inc. | 62,966 | 3,758,440 | |||
Sterling Construction Co., Inc.(1) | 15,700 | 170,973 | |||
7,236,295 |
7
Shares | Value | ||||
Consumer Finance — 1.3% | |||||
Enova International, Inc.(1) | 159,073 | $ | 3,095,561 | ||
Green Dot Corp., Class A(1) | 52,601 | 4,182,831 | |||
7,278,392 | |||||
Distributors — 0.3% | |||||
Core-Mark Holding Co., Inc. | 80,656 | 1,875,252 | |||
Diversified Consumer Services — 0.5% | |||||
American Public Education, Inc.(1) | 44,496 | 1,266,356 | |||
Career Education Corp.(1) | 20,577 | 234,990 | |||
K12, Inc.(1) | 59,727 | 1,480,632 | |||
2,981,978 | |||||
Diversified Financial Services — 0.5% | |||||
On Deck Capital, Inc.(1) | 499,698 | 2,948,218 | |||
Diversified Telecommunication Services — 0.1% | |||||
Ooma, Inc.(1) | 17,295 | 240,055 | |||
Windstream Holdings, Inc.(1) | 90,010 | 188,121 | |||
428,176 | |||||
Electric Utilities — 0.4% | |||||
Otter Tail Corp. | 16,351 | 811,664 | |||
PNM Resources, Inc. | 38,240 | 1,571,281 | |||
2,382,945 | |||||
Electrical Equipment — 1.6% | |||||
Allied Motion Technologies, Inc. | 6,902 | 308,450 | |||
Atkore International Group, Inc.(1) | 164,064 | 3,255,030 | |||
AZZ, Inc. | 15,256 | 615,732 | |||
Encore Wire Corp. | 14,870 | 746,177 | |||
Generac Holdings, Inc.(1) | 91,357 | 4,540,443 | |||
9,465,832 | |||||
Electronic Equipment, Instruments and Components — 2.0% | |||||
Insight Enterprises, Inc.(1) | 52,147 | 2,124,990 | |||
PC Connection, Inc. | 34,166 | 1,015,755 | |||
Sanmina Corp.(1) | 29,359 | 706,378 | |||
ScanSource, Inc.(1) | 30,965 | 1,064,577 | |||
Tech Data Corp.(1) | 46,838 | 3,831,817 | |||
Vishay Precision Group, Inc.(1) | 84,050 | 2,540,831 | |||
11,284,348 | |||||
Energy Equipment and Services — 1.4% | |||||
Exterran Corp.(1) | 51,085 | 904,204 | |||
Mammoth Energy Services, Inc. | 9,875 | 177,552 | |||
Matrix Service Co.(1) | 155,123 | 2,782,907 | |||
Newpark Resources, Inc.(1) | 74,879 | 514,419 | |||
SEACOR Holdings, Inc.(1) | 70,824 | 2,620,488 | |||
Unit Corp.(1) | 62,438 | 891,615 | |||
7,891,185 | |||||
Entertainment — 0.5% | |||||
Glu Mobile, Inc.(1) | 153,900 | 1,241,973 | |||
IMAX Corp.(1) | 96,653 | 1,818,043 | |||
3,060,016 | |||||
Equity Real Estate Investment Trusts (REITs) — 6.1% | |||||
American Assets Trust, Inc. | 54,979 | 2,208,506 | |||
Americold Realty Trust | 24,954 | 637,325 |
8
Shares | Value | ||||
CareTrust REIT, Inc. | 173,392 | $ | 3,200,816 | ||
Chesapeake Lodging Trust | 129,774 | 3,159,997 | |||
City Office REIT, Inc. | 88,963 | 911,871 | |||
Franklin Street Properties Corp. | 127,985 | 797,347 | |||
GEO Group, Inc. (The) | 165,855 | 3,267,343 | |||
Industrial Logistics Properties Trust | 67,466 | 1,327,053 | |||
InfraREIT, Inc.(1) | 30,361 | 638,188 | |||
Lexington Realty Trust | 290,342 | 2,383,708 | |||
LTC Properties, Inc. | 26,081 | 1,087,056 | |||
MedEquities Realty Trust, Inc. | 19,471 | 133,182 | |||
Pebblebrook Hotel Trust | 72,500 | 2,052,475 | |||
PS Business Parks, Inc. | 35,064 | 4,593,384 | |||
RLJ Lodging Trust | 203,774 | 3,341,894 | |||
Select Income REIT | 134,258 | 988,139 | |||
Sunstone Hotel Investors, Inc. | 274,467 | 3,570,816 | |||
Whitestone REIT | 74,830 | 917,416 | |||
35,216,516 | |||||
Food and Staples Retailing — 0.1% | |||||
Natural Grocers by Vitamin Cottage, Inc.(1) | 16,471 | 252,501 | |||
Smart & Final Stores, Inc.(1) | 35,280 | 167,227 | |||
419,728 | |||||
Food Products — 0.4% | |||||
Cal-Maine Foods, Inc. | 20,790 | 879,417 | |||
Lancaster Colony Corp. | 7,169 | 1,267,909 | |||
2,147,326 | |||||
Health Care Equipment and Supplies — 4.7% | |||||
AngioDynamics, Inc.(1) | 131,083 | 2,638,701 | |||
Atrion Corp. | 371 | 274,941 | |||
Cardiovascular Systems, Inc.(1) | 37,659 | 1,072,905 | |||
CONMED Corp. | 52,915 | 3,397,143 | |||
Globus Medical, Inc., Class A(1) | 96,916 | 4,194,525 | |||
Haemonetics Corp.(1) | 43,847 | 4,386,892 | |||
Integer Holdings Corp.(1) | 54,543 | 4,159,449 | |||
Meridian Bioscience, Inc. | 20,987 | 364,334 | |||
Orthofix Medical, Inc.(1) | 11,134 | 584,424 | |||
Quidel Corp.(1) | 13,042 | 636,710 | |||
STAAR Surgical Co.(1) | 92,240 | 2,943,378 | |||
Surmodics, Inc.(1) | 51,038 | 2,412,056 | |||
27,065,458 | |||||
Health Care Providers and Services — 3.2% | |||||
Amedisys, Inc.(1) | 31,282 | 3,663,435 | |||
Brookdale Senior Living, Inc.(1) | 299,645 | 2,007,621 | |||
CorVel Corp.(1) | 5,297 | 326,931 | |||
Ensign Group, Inc. (The) | 83,517 | 3,239,624 | |||
Molina Healthcare, Inc.(1) | 14,308 | 1,662,876 | |||
National Healthcare Corp. | 33,484 | 2,626,820 | |||
Tenet Healthcare Corp.(1) | 138,206 | 2,368,851 | |||
Tivity Health, Inc.(1) | 110,263 | 2,735,625 | |||
18,631,783 | |||||
Health Care Technology — 0.8% | |||||
Computer Programs & Systems, Inc. | 66,438 | 1,667,594 |
9
Shares | Value | ||||
HealthStream, Inc. | 128,029 | $ | 3,091,900 | ||
4,759,494 | |||||
Hotels, Restaurants and Leisure — 2.4% | |||||
BJ's Restaurants, Inc. | 61,083 | 3,088,967 | |||
Brinker International, Inc. | 29,198 | 1,284,128 | |||
Carrols Restaurant Group, Inc.(1) | 16,109 | 158,512 | |||
Cheesecake Factory, Inc. (The) | 64,085 | 2,788,338 | |||
International Speedway Corp., Class A | 90,331 | 3,961,918 | |||
Ruth's Hospitality Group, Inc. | 103,231 | 2,346,441 | |||
Town Sports International Holdings, Inc.(1) | 58,694 | 375,642 | |||
14,003,946 | |||||
Household Durables — 0.4% | |||||
Hooker Furniture Corp. | 10,333 | 272,171 | |||
ZAGG, Inc.(1) | 194,953 | 1,906,641 | |||
2,178,812 | |||||
Independent Power and Renewable Electricity Producers — 0.5% | |||||
Clearway Energy, Inc., Class A | 35,494 | 600,559 | |||
TerraForm Power, Inc., Class A | 198,282 | 2,224,724 | |||
2,825,283 | |||||
Insurance — 1.6% | |||||
Employers Holdings, Inc. | 80,085 | 3,361,168 | |||
FBL Financial Group, Inc., Class A | 2,991 | 196,359 | |||
National Western Life Group, Inc., Class A | 631 | 189,742 | |||
Safety Insurance Group, Inc. | 5,301 | 433,675 | |||
Stewart Information Services Corp. | 96,258 | 3,985,081 | |||
Universal Insurance Holdings, Inc. | 22,970 | 871,022 | |||
9,037,047 | |||||
Interactive Media and Services — 1.6% | |||||
Care.com, Inc.(1) | 191,627 | 3,700,317 | |||
Liberty TripAdvisor Holdings, Inc., Class A(1) | 68,749 | 1,092,422 | |||
Meet Group, Inc. (The)(1) | 67,857 | 314,178 | |||
QuinStreet, Inc.(1) | 244,928 | 3,975,181 | |||
9,082,098 | |||||
Internet and Direct Marketing Retail — 1.5% | |||||
Liberty Expedia Holdings, Inc., Class A(1) | 36,697 | 1,435,220 | |||
Nutrisystem, Inc. | 92,020 | 4,037,838 | |||
PetMed Express, Inc. | 139,056 | 3,234,442 | |||
8,707,500 | |||||
IT Services — 1.6% | |||||
Carbonite, Inc.(1) | 91,214 | 2,304,066 | |||
Endurance International Group Holdings, Inc.(1) | 399,477 | 2,656,522 | |||
EVERTEC, Inc. | 126,783 | 3,638,672 | |||
Science Applications International Corp. | 13,788 | 878,295 | |||
9,477,555 | |||||
Leisure Products — 1.4% | |||||
Callaway Golf Co. | 180,135 | 2,756,066 | |||
Johnson Outdoors, Inc., Class A | 5,580 | 327,769 | |||
Malibu Boats, Inc., Class A(1) | 78,740 | 2,740,152 | |||
MasterCraft Boat Holdings, Inc.(1) | 110,789 | 2,071,754 | |||
7,895,741 |
10
Shares | Value | ||||
Life Sciences Tools and Services — 1.0% | |||||
Medpace Holdings, Inc.(1) | 66,760 | $ | 3,533,607 | ||
NeoGenomics, Inc.(1) | 165,557 | 2,087,674 | |||
5,621,281 | |||||
Machinery — 2.1% | |||||
Columbus McKinnon Corp. | 10,593 | 319,273 | |||
Global Brass & Copper Holdings, Inc. | 110,905 | 2,789,261 | |||
Harsco Corp.(1) | 172,337 | 3,422,613 | |||
Navistar International Corp.(1) | 91,106 | 2,364,201 | |||
SPX FLOW, Inc.(1) | 36,289 | 1,103,911 | |||
TriMas Corp.(1) | 89,046 | 2,430,065 | |||
12,429,324 | |||||
Marine — 0.1% | |||||
Safe Bulkers, Inc.(1) | 169,781 | 302,210 | |||
Media — 1.0% | |||||
Emerald Expositions Events, Inc. | 25,090 | 309,611 | |||
Gray Television, Inc.(1) | 105,156 | 1,549,999 | |||
MSG Networks, Inc., Class A(1) | 13,235 | 311,817 | |||
New Media Investment Group, Inc. | 195,769 | 2,265,047 | |||
Nexstar Media Group, Inc., Class A | 14,022 | 1,102,690 | |||
5,539,164 | |||||
Metals and Mining — 1.2% | |||||
Kaiser Aluminum Corp. | 30,872 | 2,756,561 | |||
Schnitzer Steel Industries, Inc., Class A | 76,427 | 1,647,002 | |||
Worthington Industries, Inc. | 77,491 | 2,699,786 | |||
7,103,349 | |||||
Oil, Gas and Consumable Fuels — 3.6% | |||||
Arch Coal, Inc., Class A | 40,312 | 3,345,493 | |||
CVR Energy, Inc. | 87,010 | 3,000,105 | |||
Delek US Holdings, Inc. | 75,041 | 2,439,583 | |||
Denbury Resources, Inc.(1) | 754,854 | 1,290,800 | |||
Evolution Petroleum Corp. | 62,617 | 427,048 | |||
NACCO Industries, Inc., Class A | 52,946 | 1,794,869 | |||
Renewable Energy Group, Inc.(1) | 128,598 | 3,304,968 | |||
Southwestern Energy Co.(1) | 833,182 | 2,841,151 | |||
W&T Offshore, Inc.(1) | 580,564 | 2,391,924 | |||
20,835,941 | |||||
Paper and Forest Products — 1.2% | |||||
Louisiana-Pacific Corp. | 196,034 | 4,355,876 | |||
Verso Corp., Class A(1) | 123,873 | 2,774,755 | |||
7,130,631 | |||||
Personal Products — 0.7% | |||||
Medifast, Inc. | 25,175 | 3,147,379 | |||
Natural Health Trends Corp. | 46,749 | 864,389 | |||
4,011,768 | |||||
Pharmaceuticals — 1.5% | |||||
Assertio Therapeutics, Inc.(1) | 96,043 | 346,715 | |||
Collegium Pharmaceutical, Inc.(1) | 27,661 | 474,939 | |||
Corcept Therapeutics, Inc.(1) | 58,670 | 783,831 | |||
Horizon Pharma plc(1) | 110,469 | 2,158,564 | |||
Innoviva, Inc.(1) | 113,979 | 1,988,934 |
11
Shares | Value | ||||
Phibro Animal Health Corp., Class A | 42,706 | $ | 1,373,425 | ||
Supernus Pharmaceuticals, Inc.(1) | 43,181 | 1,434,473 | |||
8,560,881 | |||||
Professional Services — 3.4% | |||||
ASGN, Inc.(1) | 64,336 | 3,506,312 | |||
Barrett Business Services, Inc. | 25,783 | 1,476,077 | |||
BG Staffing, Inc. | 89,177 | 1,841,505 | |||
Heidrick & Struggles International, Inc. | 106,337 | 3,316,651 | |||
Insperity, Inc. | 30,711 | 2,867,179 | |||
Kforce, Inc. | 108,561 | 3,356,706 | |||
TrueBlue, Inc.(1) | 134,967 | 3,003,016 | |||
19,367,446 | |||||
Real Estate Management and Development — 0.3% | |||||
Marcus & Millichap, Inc.(1) | 46,488 | 1,595,933 | |||
RMR Group, Inc. (The), Class A | 1,791 | 95,066 | |||
1,690,999 | |||||
Road and Rail — 2.1% | |||||
ArcBest Corp. | 89,152 | 3,054,347 | |||
Covenant Transportation Group, Inc., Class A(1) | 40,028 | 768,538 | |||
Marten Transport Ltd. | 85,862 | 1,390,106 | |||
Saia, Inc.(1) | 56,346 | 3,145,234 | |||
USA Truck, Inc.(1) | 27,857 | 417,019 | |||
Werner Enterprises, Inc. | 109,712 | 3,240,892 | |||
12,016,136 | |||||
Semiconductors and Semiconductor Equipment — 3.2% | |||||
Cabot Microelectronics Corp. | 39,796 | 3,794,549 | |||
Diodes, Inc.(1) | 113,700 | 3,667,962 | |||
Lattice Semiconductor Corp.(1) | 541,935 | 3,750,190 | |||
Nanometrics, Inc.(1) | 112,171 | 3,065,634 | |||
Rudolph Technologies, Inc.(1) | 75,792 | 1,551,462 | |||
SMART Global Holdings, Inc.(1) | 92,202 | 2,738,399 | |||
18,568,196 | |||||
Software — 7.0% | |||||
Altair Engineering, Inc.(1) | 13,937 | 384,382 | |||
Appfolio, Inc., Class A(1) | 49,171 | 2,911,907 | |||
Aspen Technology, Inc.(1) | 13,743 | 1,129,400 | |||
ChannelAdvisor Corp.(1) | 12,033 | 136,575 | |||
CommVault Systems, Inc.(1) | 18,579 | 1,097,833 | |||
Cornerstone OnDemand, Inc.(1) | 76,593 | 3,862,585 | |||
Envestnet, Inc.(1) | 78,251 | 3,849,167 | |||
Fair Isaac Corp.(1) | 17,559 | 3,283,533 | |||
Model N, Inc.(1) | 180,287 | 2,385,197 | |||
New Relic, Inc.(1) | 49,780 | 4,030,687 | |||
Paylocity Holding Corp.(1) | 57,098 | 3,437,871 | |||
Progress Software Corp. | 100,158 | 3,554,607 | |||
SPS Commerce, Inc.(1) | 40,925 | 3,371,402 | |||
Upland Software, Inc.(1) | 30,828 | 837,905 | |||
Verint Systems, Inc.(1) | 46,501 | 1,967,457 | |||
Workiva, Inc.(1) | 25,696 | 922,229 | |||
Zendesk, Inc.(1) | 44,911 | 2,621,455 |
12
Shares | Value | ||||
Zix Corp.(1) | 161,236 | $ | 923,882 | ||
40,708,074 | |||||
Specialty Retail — 4.8% | |||||
Abercrombie & Fitch Co., Class A | 77,324 | 1,550,346 | |||
American Eagle Outfitters, Inc. | 208,023 | 4,021,084 | |||
Asbury Automotive Group, Inc.(1) | 17,874 | 1,191,481 | |||
Barnes & Noble Education, Inc.(1) | 423,398 | 1,697,826 | |||
Buckle, Inc. (The) | 140,809 | 2,723,246 | |||
Caleres, Inc. | 91,680 | 2,551,454 | |||
Cato Corp. (The), Class A | 30,912 | 441,114 | |||
Citi Trends, Inc. | 13,067 | 266,436 | |||
Conn's, Inc.(1) | 24,137 | 455,224 | |||
Genesco, Inc.(1) | 74,009 | 3,278,599 | |||
MarineMax, Inc.(1) | 100,952 | 1,848,431 | |||
Shoe Carnival, Inc. | 89,127 | 2,986,646 | |||
Tailored Brands, Inc. | 173,359 | 2,364,617 | |||
Tilly's, Inc., Class A | 87,514 | 950,402 | |||
Zumiez, Inc.(1) | 83,104 | 1,593,104 | |||
27,920,010 | |||||
Technology Hardware, Storage and Peripherals — 0.2% | |||||
Immersion Corp.(1) | 69,878 | 626,107 | |||
Pure Storage, Inc., Class A(1) | 29,491 | 474,215 | |||
1,100,322 | |||||
Textiles, Apparel and Luxury Goods — 2.5% | |||||
Crocs, Inc.(1) | 140,708 | 3,655,594 | |||
Deckers Outdoor Corp.(1) | 34,246 | 4,381,776 | |||
G-III Apparel Group Ltd.(1) | 59,952 | 1,672,061 | |||
Movado Group, Inc. | 72,709 | 2,299,058 | |||
Oxford Industries, Inc. | 14,677 | 1,042,654 | |||
Vera Bradley, Inc.(1) | 169,252 | 1,450,490 | |||
14,501,633 | |||||
Thrifts and Mortgage Finance — 4.3% | |||||
Essent Group Ltd.(1) | 114,922 | 3,928,034 | |||
Flagstar Bancorp, Inc.(1) | 108,568 | 2,866,195 | |||
MGIC Investment Corp.(1) | 350,157 | 3,662,642 | |||
NMI Holdings, Inc., Class A(1) | 182,980 | 3,266,193 | |||
Radian Group, Inc. | 221,555 | 3,624,640 | |||
Trustco Bank Corp. NY | 119,872 | 822,322 | |||
Walker & Dunlop, Inc. | 68,994 | 2,983,990 | |||
Washington Federal, Inc. | 131,618 | 3,515,517 | |||
24,669,533 | |||||
Trading Companies and Distributors — 1.4% | |||||
Applied Industrial Technologies, Inc. | 69,731 | 3,761,290 | |||
Rush Enterprises, Inc., Class A | 93,326 | 3,217,880 | |||
Veritiv Corp.(1) | 48,012 | 1,198,860 | |||
8,178,030 | |||||
Wireless Telecommunication Services — 0.5% | |||||
Boingo Wireless, Inc.(1) | 39,439 | 811,260 | |||
Shenandoah Telecommunications Co. | 24,106 | 1,066,691 |
13
Shares | Value | ||||
Spok Holdings, Inc. | 56,316 | $ | 746,750 | ||
2,624,701 | |||||
TOTAL COMMON STOCKS (Cost $616,506,451) | 563,403,606 | ||||
TEMPORARY CASH INVESTMENTS — 2.4% | |||||
Repurchase Agreement, BMO Capital Markets Corp., (collateralized by various U.S. Treasury obligations, 0.125% - 2.75%, 10/31/19 - 2/15/44, valued at $12,019,372), in a joint trading account at 2.45%, dated 12/31/18, due 1/2/19 (Delivery value $11,786,838) | 11,785,234 | ||||
Repurchase Agreement, Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 3.375%, 11/15/48, valued at $2,009,402), at 1.25%, dated 12/31/18, due 1/2/19 (Delivery value $1,967,137) | 1,967,000 | ||||
State Street Institutional U.S. Government Money Market Fund, Premier Class | 8,623 | 8,623 | |||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $13,760,857) | 13,760,857 | ||||
TOTAL INVESTMENT SECURITIES — 99.9% (Cost $630,267,308) | 577,164,463 | ||||
OTHER ASSETS AND LIABILITIES — 0.1% | 298,482 | ||||
TOTAL NET ASSETS — 100.0% | $ | 577,462,945 |
FUTURES CONTRACTS PURCHASED | |||||||||||
Reference Entity | Contracts | Expiration Date | Notional Amount | Underlying Contract Value | Unrealized Appreciation (Depreciation) | ||||||
Russell 2000 E-Mini Index | 80 | March 2019 | $ | 4,000 | $ | 5,396,000 | $ | 231,425 |
NOTES TO SCHEDULE OF INVESTMENTS |
(1) | Non-income producing. |
See Notes to Financial Statements.
14
Statement of Assets and Liabilities |
DECEMBER 31, 2018 (UNAUDITED) | |||
Assets | |||
Investment securities, at value (cost of $630,267,308) | $ | 577,164,463 | |
Deposits with broker for futures contracts | 284,000 | ||
Receivable for capital shares sold | 111,623 | ||
Receivable for variation margin on futures contracts | 32,400 | ||
Dividends and interest receivable | 1,944,438 | ||
579,536,924 | |||
Liabilities | |||
Payable for investments purchased | 1,292,646 | ||
Payable for capital shares redeemed | 346,197 | ||
Accrued management fees | 424,712 | ||
Distribution and service fees payable | 9,884 | ||
Dividends payable | 540 | ||
2,073,979 | |||
Net Assets | $ | 577,462,945 | |
Net Assets Consist of: | |||
Capital (par value and paid-in surplus) | $ | 641,997,580 | |
Distributable earnings | (64,534,635 | ) | |
$ | 577,462,945 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | ||||
Investor Class, $0.01 Par Value | $530,658,716 | 45,294,187 | $11.72 | |||
I Class, $0.01 Par Value | $17,947,010 | 1,523,866 | $11.78 | |||
A Class, $0.01 Par Value | $15,934,100 | 1,398,972 | $11.39* | |||
C Class, $0.01 Par Value | $1,347,185 | 124,319 | $10.84 | |||
R Class, $0.01 Par Value | $11,365,621 | 1,023,436 | $11.11 | |||
R5 Class, $0.01 Par Value | $210,313 | 17,843 | $11.79 |
*Maximum offering price $12.08 (net asset value divided by 0.9425).
See Notes to Financial Statements.
15
Statement of Operations |
FOR THE SIX MONTHS ENDED DECEMBER 31, 2018 (UNAUDITED) | |||
Investment Income (Loss) | |||
Income: | |||
Dividends (net of foreign taxes withheld of $2,232) | $ | 4,062,958 | |
Interest | 65,848 | ||
4,128,806 | |||
Expenses: | |||
Management fees | 2,713,888 | ||
Distribution and service fees: | |||
A Class | 26,781 | ||
C Class | 9,393 | ||
R Class | 35,377 | ||
Directors' fees and expenses | 22,193 | ||
Other expenses | 3,334 | ||
2,810,966 | |||
Net investment income (loss) | 1,317,840 | ||
Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investment transactions | 17,188,008 | ||
Futures contract transactions | (829,261 | ) | |
16,358,747 | |||
Change in net unrealized appreciation (depreciation) on: | |||
Investments | (140,159,133 | ) | |
Futures contracts | 231,425 | ||
(139,927,708 | ) | ||
Net realized and unrealized gain (loss) | (123,568,961 | ) | |
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | (122,251,121 | ) |
See Notes to Financial Statements.
16
Statement of Changes in Net Assets |
SIX MONTHS ENDED DECEMBER 31, 2018 (UNAUDITED) AND YEAR ENDED JUNE 30, 2018 | ||||||
Increase (Decrease) in Net Assets | December 31, 2018 | June 30, 2018 | ||||
Operations | ||||||
Net investment income (loss) | $ | 1,317,840 | $ | 623,612 | ||
Net realized gain (loss) | 16,358,747 | 54,489,973 | ||||
Change in net unrealized appreciation (depreciation) | (139,927,708 | ) | 29,995,696 | |||
Net increase (decrease) in net assets resulting from operations | (122,251,121 | ) | 85,109,281 | |||
Distributions to Shareholders | ||||||
From earnings:(1) | ||||||
Investor Class | (60,873,033 | ) | (30,665,842 | ) | ||
I Class | (2,151,580 | ) | (1,310,721 | ) | ||
A Class | (1,924,288 | ) | (1,379,611 | ) | ||
C Class | (194,670 | ) | (87,493 | ) | ||
R Class | (1,385,413 | ) | (829,884 | ) | ||
R5 Class | (23,818 | ) | (5,652 | ) | ||
Decrease in net assets from distributions | (66,552,802 | ) | (34,279,203 | ) | ||
Capital Share Transactions | ||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | 105,228,587 | (60,229,187 | ) | |||
Net increase (decrease) in net assets | (83,575,336 | ) | (9,399,109 | ) | ||
Net Assets | ||||||
Beginning of period | 661,038,281 | 670,437,390 | ||||
End of period | $ | 577,462,945 | $ | 661,038,281 |
(1) | Prior period presentation has been updated to reflect the current period combination of distributions to shareholders from net investment income and net realized gains. Distributions from net investment income were $(785,449), $(64,889) and $(11) for Investor Class, I Class and R5 Class, respectively. Distributions from net realized gains were $(29,880,393), $(1,245,832), $(1,379,611), $(87,493), $(829,884) and $(5,641) for Investor Class, I Class, A Class, C Class, R Class and R5 Class, respectively. |
See Notes to Financial Statements.
17
Notes to Financial Statements |
DECEMBER 31, 2018 (UNAUDITED)
1. Organization
American Century Quantitative Equity 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. Small Company 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 by investing primarily in common stocks of small companies.
The fund offers the Investor Class, I Class, A Class, C Class, R Class and R5 Class. The A Class may incur an initial sales charge. The A Class and C Class may be subject to a contingent deferred sales charge.
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.
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. Exchange-traded futures contracts are valued at the settlement price as provided by the appropriate exchange.
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
18
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.
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.
Segregated Assets — In accordance with the 1940 Act, the fund segregates assets on its books and records to cover certain types of investment securities and other financial instruments. ACIM monitors, on a daily basis, the securities segregated to ensure the fund designates a sufficient amount of liquid assets, marked-to-market daily. The fund may also receive assets or be required to pledge assets at the custodian bank or with a broker for collateral requirements.
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, if any, are generally declared and paid quarterly. Distributions from 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.
19
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. Various funds issued by American Century Asset Allocation Portfolios, Inc. own, in aggregate, 19% of the shares of the fund.
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 fee consists of (1) an Investment Category Fee based on the daily net assets of the fund and certain other accounts managed by the investment advisor that are in the same broad investment category as the fund and (2) a Complex Fee based on the assets of all the funds in the American Century Investments family of funds.
The Investment Category Fee range, the Complex Fee range and the effective annual management fee for each class for the period ended December 31, 2018 are as follows:
Investment Category Fee Range | Complex Fee Range | Effective Annual Management Fee | |
Investor Class | 0.5380% to 0.7200% | 0.2500% to 0.3100% | 0.86% |
I Class | 0.0500% to 0.1100% | 0.66% | |
A Class | 0.2500% to 0.3100% | 0.86% | |
C Class | 0.2500% to 0.3100% | 0.86% | |
R Class | 0.2500% to 0.3100% | 0.86% | |
R5 Class | 0.0500% to 0.1100% | 0.66% |
Distribution and Service Fees — The Board of Directors has adopted a separate Master Distribution and Individual Shareholder Services Plan for each of the A Class, C Class and R Class (collectively the plans), pursuant to Rule 12b-1 of the 1940 Act. The plans provide that the A Class will pay ACIS an annual distribution and service fee of 0.25%. The plans provide that the C Class will pay ACIS an annual distribution and service fee of 1.00%, of which 0.25% is paid for individual shareholder services and 0.75% is paid for distribution services. The plans provide that the R Class will pay ACIS an annual distribution and service fee of 0.50%. The fees are computed and accrued daily based on each class’s daily net assets and paid monthly in arrears. The fees are used to pay financial intermediaries for distribution and individual shareholder services. Fees incurred under the plans during the period ended December 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 $1,328,934 and $4,952,768, respectively. The effect of interfund transactions on the Statement of Operations was $1,862,052 in net realized gain (loss) on investment transactions.
20
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the period ended December 31, 2018 were $352,176,067 and $326,331,662, respectively.
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended December 31, 2018 | Year ended June 30, 2018 | |||||||||
Shares | Amount | Shares | Amount | |||||||
Investor Class/Shares Authorized | 340,000,000 | 340,000,000 | ||||||||
Sold | 6,718,669 | $ | 96,448,040 | 7,270,277 | $ | 111,592,178 | ||||
Issued in reinvestment of distributions | 4,843,845 | 59,918,562 | 1,991,057 | 30,226,281 | ||||||
Redeemed | (2,924,495 | ) | (45,984,300 | ) | (12,109,286 | ) | (189,122,443 | ) | ||
8,638,019 | 110,382,302 | (2,847,952 | ) | (47,303,984 | ) | |||||
I Class/Shares Authorized | 35,000,000 | 35,000,000 | ||||||||
Sold | 265,705 | 4,151,809 | 538,945 | 8,483,548 | ||||||
Issued in reinvestment of distributions | 171,734 | 2,150,512 | 85,455 | 1,303,311 | ||||||
Redeemed | (587,404 | ) | (9,407,982 | ) | (661,717 | ) | (10,287,095 | ) | ||
(149,965 | ) | (3,105,661 | ) | (37,317 | ) | (500,236 | ) | |||
A Class/Shares Authorized | 35,000,000 | 35,000,000 | ||||||||
Sold | 132,690 | 1,927,568 | 249,098 | 3,779,255 | ||||||
Issued in reinvestment of distributions | 134,925 | 1,621,800 | 77,935 | 1,156,559 | ||||||
Redeemed | (387,563 | ) | (5,889,178 | ) | (955,491 | ) | (14,557,608 | ) | ||
(119,948 | ) | (2,339,810 | ) | (628,458 | ) | (9,621,794 | ) | |||
C Class/Shares Authorized | 15,000,000 | 15,000,000 | ||||||||
Sold | 10,932 | 164,317 | 30,730 | 452,208 | ||||||
Issued in reinvestment of distributions | 15,968 | 182,677 | 5,737 | 82,103 | ||||||
Redeemed | (33,788 | ) | (436,846 | ) | (24,649 | ) | (363,944 | ) | ||
(6,888 | ) | (89,852 | ) | 11,818 | 170,367 | |||||
R Class/Shares Authorized | 20,000,000 | 20,000,000 | ||||||||
Sold | 115,883 | 1,606,186 | 271,949 | 4,056,105 | ||||||
Issued in reinvestment of distributions | 104,398 | 1,223,547 | 46,547 | 677,257 | ||||||
Redeemed | (170,139 | ) | (2,514,327 | ) | (525,637 | ) | (7,911,493 | ) | ||
50,142 | 315,406 | (207,141 | ) | (3,178,131 | ) | |||||
R5 Class/Shares Authorized | 50,000,000 | 50,000,000 | ||||||||
Sold | 2,919 | 43,688 | 12,393 | 198,939 | ||||||
Issued in reinvestment of distributions | 1,904 | 23,818 | 370 | 5,652 | ||||||
Redeemed | (79 | ) | (1,304 | ) | — | — | ||||
4,744 | 66,202 | 12,763 | 204,591 | |||||||
Net increase (decrease) | 8,416,104 | $ | 105,228,587 | (3,696,287 | ) | $ | (60,229,187 | ) |
21
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.
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 | $ | 563,403,606 | — | — | ||||
Temporary Cash Investments | 8,623 | $ | 13,752,234 | — | ||||
$ | 563,412,229 | $ | 13,752,234 | — | ||||
Other Financial Instruments | ||||||||
Futures Contracts | $ | 231,425 | — | — |
7. Derivative Instruments
Equity Price Risk — The fund is subject to equity price risk in the normal course of pursuing its investment objectives. A fund may enter into futures contracts based on an equity index in order to manage its exposure to changes in market conditions. A fund may purchase futures contracts to gain exposure to increases in market value or sell futures contracts to protect against a decline in market value. Upon entering into a futures contract, a fund is required to deposit either cash or securities in an amount equal to a certain percentage of the contract value (initial margin). Subsequent payments (variation margin) are made or received daily, in cash, by a fund. The variation margin is equal to the daily change in the contract value and is recorded as unrealized gains and losses. A fund recognizes a realized gain or loss when the contract is closed or expires. Net realized and unrealized gains or losses occurring during the holding period of futures contracts are a component of net realized gain (loss) on futures contract transactions and change in net unrealized appreciation (depreciation) on futures contracts, respectively. One of the risks of entering into futures contracts is the possibility that the change in value of the contract may not correlate with the changes in value of the underlying securities. During the period, the fund participated in equity price risk derivative instruments
for temporary investment purposes.
The value of equity price risk derivative instruments as of December 31, 2018, is disclosed on the Statement of Assets and Liabilities as an asset of $32,400 in receivable for variation margin on futures contracts.* For the six months ended December 31, 2018, the effect of equity price risk derivative instruments on the Statement of Operations was $(829,261) in net realized gain (loss) on futures contract transactions and $231,425 in change in net unrealized appreciation (depreciation) on futures contracts.
* Included in the unrealized appreciation (depreciation) on futures contracts as reported in the Schedule of
Investments.
22
8. Risk Factors
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.
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.
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.
As of period end, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $ | 630,317,764 | |
Gross tax appreciation of investments | $ | 34,641,964 | |
Gross tax depreciation of investments | (87,795,265 | ) | |
Net tax appreciation (depreciation) of investments | $ | (53,153,301 | ) |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales.
23
Financial Highlights |
For a Share Outstanding Throughout the Years Ended June 30 (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) | $16.17 | 0.03 | (2.94) | (2.91) | (0.01) | (1.53) | (1.54) | $11.72 | (18.51)% | 0.87%(4) | 0.42%(4) | 52% | $530,659 | ||
2018 | $15.04 | 0.02 | 1.91 | 1.93 | (0.02) | (0.78) | (0.80) | $16.17 | 13.18% | 0.86% | 0.11% | 92% | $592,615 | ||
2017 | $12.46 | 0.05 | 2.58 | 2.63 | (0.05) | — | (0.05) | $15.04 | 21.19% | 0.87% | 0.37% | 90% | $594,198 | ||
2016 | $13.68 | 0.04 | (1.22) | (1.18) | (0.04) | — | (0.04) | $12.46 | (8.63)% | 0.88% | 0.36% | 93% | $654,517 | ||
2015 | $13.10 | 0.03 | 0.56 | 0.59 | (0.01) | — | (0.01) | $13.68 | 4.51% | 0.87% | 0.25% | 100% | $464,592 | ||
2014 | $10.36 | 0.02 | 2.75 | 2.77 | (0.03) | — | (0.03) | $13.10 | 26.79% | 0.87% | 0.18% | 83% | $342,090 | ||
I Class | |||||||||||||||
2018(3) | $16.26 | 0.04 | (2.95) | (2.91) | (0.04) | (1.53) | (1.57) | $11.78 | (18.44)% | 0.67%(4) | 0.62%(4) | 52% | $17,947 | ||
2018 | $15.11 | 0.05 | 1.92 | 1.97 | (0.04) | (0.78) | (0.82) | $16.26 | 13.42% | 0.66% | 0.31% | 92% | $27,213 | ||
2017 | $12.52 | 0.08 | 2.59 | 2.67 | (0.08) | — | (0.08) | $15.11 | 21.41% | 0.67% | 0.57% | 90% | $25,863 | ||
2016 | $13.76 | 0.07 | (1.24) | (1.17) | (0.07) | — | (0.07) | $12.52 | (8.50)% | 0.68% | 0.56% | 93% | $34,094 | ||
2015 | $13.15 | 0.06 | 0.57 | 0.63 | (0.02) | — | (0.02) | $13.76 | 4.77% | 0.67% | 0.45% | 100% | $39,483 | ||
2014 | $10.41 | 0.05 | 2.76 | 2.81 | (0.07) | — | (0.07) | $13.15 | 27.02% | 0.67% | 0.38% | 83% | $39,805 | ||
A Class | |||||||||||||||
2018(3) | $15.78 | 0.01 | (2.87) | (2.86) | — | (1.53) | (1.53) | $11.39 | (18.62)% | 1.12%(4) | 0.17%(4) | 52% | $15,934 | ||
2018 | $14.72 | (0.02) | 1.86 | 1.84 | — | (0.78) | (0.78) | $15.78 | 12.90% | 1.11% | (0.14)% | 92% | $23,970 | ||
2017 | $12.19 | 0.02 | 2.53 | 2.55 | (0.02) | — | (0.02) | $14.72 | 20.85% | 1.12% | 0.12% | 90% | $31,600 | ||
2016 | $13.39 | 0.01 | (1.20) | (1.19) | (0.01) | — | (0.01) | $12.19 | (8.89)% | 1.13% | 0.11% | 93% | $35,153 | ||
2015 | $12.84 | —(5) | 0.55 | 0.55 | —(5) | — | —(5) | $13.39 | 4.30% | 1.12% | 0.00%(6) | 100% | $47,471 | ||
2014 | $10.15 | (0.01) | 2.70 | 2.69 | —(5) | — | —(5) | $12.84 | 26.54% | 1.12% | (0.07)% | 83% | $38,437 |
For a Share Outstanding Throughout the Years Ended June 30 (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) | |||
C Class | |||||||||||||||
2018(3) | $15.16 | (0.05) | (2.74) | (2.79) | — | (1.53) | (1.53) | $10.84 | (18.92)% | 1.87%(4) | (0.58)%(4) | 52% | $1,347 | ||
2018 | $14.27 | (0.13) | 1.80 | 1.67 | — | (0.78) | (0.78) | $15.16 | 12.01% | 1.86% | (0.89)% | 92% | $1,989 | ||
2017 | $11.89 | (0.08) | 2.46 | 2.38 | — | — | — | $14.27 | 20.02% | 1.87% | (0.63)% | 90% | $1,703 | ||
2016 | $13.15 | (0.07) | (1.19) | (1.26) | — | — | — | $11.89 | (9.58)% | 1.88% | (0.64)% | 93% | $1,631 | ||
2015 | $12.70 | (0.09) | 0.54 | 0.45 | — | — | — | $13.15 | 3.54% | 1.87% | (0.75)% | 100% | $1,212 | ||
2014 | $10.12 | (0.10) | 2.68 | 2.58 | — | — | — | $12.70 | 25.49% | 1.87% | (0.82)% | 83% | $685 | ||
R Class | |||||||||||||||
2018(3) | $15.45 | (0.01) | (2.80) | (2.81) | — | (1.53) | (1.53) | $11.11 | (18.76)% | 1.37%(4) | (0.08)%(4) | 52% | $11,366 | ||
2018 | $14.46 | (0.06) | 1.83 | 1.77 | — | (0.78) | (0.78) | $15.45 | 12.56% | 1.36% | (0.39)% | 92% | $15,038 | ||
2017 | $11.99 | (0.02) | 2.49 | 2.47 | — | — | — | $14.46 | 20.60% | 1.37% | (0.13)% | 90% | $17,067 | ||
2016 | $13.19 | (0.01) | (1.19) | (1.20) | — | — | — | $11.99 | (9.10)% | 1.38% | (0.14)% | 93% | $14,847 | ||
2015 | $12.68 | (0.03) | 0.54 | 0.51 | — | — | — | $13.19 | 4.02% | 1.37% | (0.25)% | 100% | $5,185 | ||
2014 | $10.05 | (0.04) | 2.67 | 2.63 | — | — | — | $12.68 | 26.17% | 1.37% | (0.32)% | 83% | $2,743 | ||
R5 Class | |||||||||||||||
2018(3) | $16.27 | 0.05 | (2.96) | (2.91) | (0.04) | (1.53) | (1.57) | $11.79 | (18.42)% | 0.67%(4) | 0.62%(4) | 52% | $210 | ||
2018 | $15.12 | 0.06 | 1.90 | 1.96 | (0.03) | (0.78) | (0.81) | $16.27 | 13.34% | 0.66% | 0.31% | 92% | $213 | ||
2017(7) | $14.90 | 0.02 | 0.20 | 0.22 | — | — | — | $15.12 | 1.48% | 0.67%(4) | 0.51%(4) | 90%(8) | $5 |
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 and do not reflect applicable sales charges. Total returns for periods less than one year are not annualized. |
(3) | Six months ended December 31, 2018 (unaudited). |
(4) | Annualized. |
(5) | Per-share amount was less than $0.005. |
(6) | Ratio was less than 0.005%. |
(7) | April 10, 2017 (commencement of sale) through June 30, 2017. |
(8) | Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended June 30, 2017. |
See Notes to Financial Statements.
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
Descriptions of the principles and policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund are available without charge, upon request, by calling 1-800-345-2021 or visiting the "About Us" page of American Century Investments’ website at americancentury.com. A description of the policies is also available 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. 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.
27
Notes |
28
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 Quantitative Equity 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. | ||
©2019 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-91457 1902 |
Semiannual Report | |
December 31, 2018 | |
Utilities Fund | |
Investor Class (BULIX) |
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the fund’s shareholder reports like this one will no longer be sent by mail, unless you specifically request paper copies of the reports from the fund or from your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the fund or your financial intermediary electronically by calling or sending an email request to your appropriate contacts as listed on the back cover of this report.
You may elect to receive all future reports in paper free of charge. You can inform the fund or your financial intermediary that you wish to continue receiving paper copies of your shareholder reports by calling or sending an email request to your appropriate contacts as listed on the back cover of this report. Your election to receive reports in paper will apply to all funds held with the fund complex/your financial intermediary.
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 period ended December 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, please visit our website, americancentury.com.
Risk-On/Risk-Off Rotation Highlights Heightened Volatility
The six-month reporting period began on an upbeat note for stock investors. Against a backdrop of robust economic and earnings data and federal tax and regulatory reform, U.S. stocks soared. The S&P 500 Index gained nearly 8% in the first three months of the period. Outside the U.S., stocks also advanced, but the gains were more subdued amid signs of slowing growth. Meanwhile, favorable U.S. economic data and continued Federal Reserve (Fed) tightening helped push U.S. Treasury yields higher. This pressured interest rate-sensitive assets, including longer-maturity Treasuries, gold, utilities stocks, and REITs (real estate investment trusts), and they generally underperformed U.S. stocks.
In the second half of the reporting period, investor sentiment and asset-class performance took a drastic turn. Investors exited stocks on mounting concerns about slowing global economic and earnings growth and Fed policy. Along with its December interest rate increase, the Fed delivered a surprisingly bullish outlook. Investors feared the Fed’s plans for two rate hikes in 2019 were too aggressive, further fueling the steep sell-off among riskier assets. The S&P 500 Index declined more than 13% in the fourth quarter. For the entire six-month period, U.S. stocks fell 6.85%. Losses among non-U.S. stocks were even steeper.
The risk-off climate in the second half of the period sparked a flight to quality. Treasury yields plunged in the fourth quarter, triggering a year-end rally in Treasuries and other perceived safe-haven assets. Overall, Treasuries were up for the six-month period and significantly outperformed stocks and other riskier assets.
As recent performance trends indicate, market volatility remains a formidable force. But volatile markets often produce the most compelling investment opportunities. We believe this scenario underscores the importance of 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 |
DECEMBER 31, 2018 | |
Top Ten Holdings | % of net assets |
Verizon Communications, Inc. | 13.0% |
AT&T, Inc. | 11.7% |
Exelon Corp. | 4.8% |
Southern Co. (The) | 4.8% |
PPL Corp. | 4.6% |
Entergy Corp. | 4.2% |
Edison International | 3.9% |
FirstEnergy Corp. | 3.9% |
AES Corp. | 3.7% |
UGI Corp. | 3.7% |
Sub-Industry Allocation | % of net assets |
Electric Utilities | 41.9% |
Integrated Telecommunication Services | 24.7% |
Multi-Utilities | 14.3% |
Gas Utilities | 6.7% |
Independent Power Producers and Energy Traders | 6.2% |
Wireless Telecommunication Services | 2.5% |
Alternative Carriers | 2.0% |
Application Software | 1.1% |
Cash and Equivalents* | 0.6% |
*Includes temporary cash investments and other assets and liabilities. | |
Types of Investments in Portfolio | % of net assets |
Common Stocks | 99.4% |
Temporary Cash Investments | 0.5% |
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 July 1, 2018 to December 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 7/1/18 | Ending Account Value 12/31/18 | Expenses Paid During Period(1) 7/1/18 - 12/31/18 | Annualized Expense Ratio(1) | |
Actual | ||||
Investor Class | $1,000 | $1,013.30 | $3.40 | 0.67% |
Hypothetical | ||||
Investor Class | $1,000 | $1,021.83 | $3.41 | 0.67% |
(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 |
DECEMBER 31, 2018 (UNAUDITED)
Shares | Value | ||||
COMMON STOCKS — 99.4% | |||||
Alternative Carriers — 2.0% | |||||
CenturyLink, Inc. | 521,714 | $ | 7,903,967 | ||
Application Software — 1.1% | |||||
j2 Global, Inc. | 60,209 | 4,177,300 | |||
Electric Utilities — 41.9% | |||||
American Electric Power Co., Inc. | 186,112 | 13,910,011 | |||
Duke Energy Corp. | 130,382 | 11,251,967 | |||
Edison International | 268,212 | 15,226,395 | |||
Entergy Corp. | 191,395 | 16,473,368 | |||
Exelon Corp. | 415,591 | 18,743,154 | |||
FirstEnergy Corp. | 401,970 | 15,093,973 | |||
NextEra Energy, Inc. | 33,313 | 5,790,466 | |||
OGE Energy Corp. | 196,189 | 7,688,647 | |||
PG&E Corp.(1) | 338,588 | 8,041,465 | |||
Pinnacle West Capital Corp. | 22,245 | 1,895,274 | |||
Portland General Electric Co. | 257,420 | 11,802,707 | |||
PPL Corp. | 632,889 | 17,929,745 | |||
Southern Co. (The) | 426,396 | 18,727,312 | |||
Spark Energy, Inc., Class A | 107,778 | 800,791 | |||
163,375,275 | |||||
Gas Utilities — 6.7% | |||||
National Fuel Gas Co. | 230,562 | 11,800,163 | |||
UGI Corp. | 266,639 | 14,225,191 | |||
26,025,354 | |||||
Independent Power Producers and Energy Traders — 6.2% | |||||
AES Corp. | 984,466 | 14,235,378 | |||
NRG Energy, Inc. | 249,399 | 9,876,201 | |||
24,111,579 | |||||
Integrated Telecommunication Services — 24.7% | |||||
AT&T, Inc. | 1,594,636 | 45,510,911 | |||
Verizon Communications, Inc. | 899,410 | 50,564,830 | |||
96,075,741 | |||||
Multi-Utilities — 14.3% | |||||
Ameren Corp. | 192,414 | 12,551,165 | |||
CenterPoint Energy, Inc. | 472,633 | 13,342,430 | |||
Consolidated Edison, Inc. | 3,101 | 237,103 | |||
Dominion Energy, Inc. | 83,855 | 5,992,278 | |||
DTE Energy Co. | 53,470 | 5,897,741 | |||
NorthWestern Corp. | 107,652 | 6,398,835 | |||
Public Service Enterprise Group, Inc. | 217,989 | 11,346,327 | |||
55,765,879 | |||||
Wireless Telecommunication Services — 2.5% | |||||
Spok Holdings, Inc. | 189,113 | 2,507,638 | |||
T-Mobile US, Inc.(1) | 83,368 | 5,303,039 |
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Shares | Value | ||||
Telephone & Data Systems, Inc. | 64,421 | $ | 2,096,259 | ||
9,906,936 | |||||
TOTAL COMMON STOCKS (Cost $340,993,825) | 387,342,031 | ||||
TEMPORARY CASH INVESTMENTS — 0.5% | |||||
Repurchase Agreement, BMO Capital Markets Corp., (collateralized by various U.S. Treasury obligations, 0.125% - 2.75%, 10/31/19 - 2/15/44, valued at $1,634,320), in a joint trading account at 2.45%, dated 12/31/18, due 1/2/19 (Delivery value $1,602,702) | 1,602,484 | ||||
Repurchase Agreement, Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 3.375%, 11/15/48, valued at $272,552), at 1.25%, dated 12/31/18, due 1/2/19 (Delivery value $267,019) | 267,000 | ||||
State Street Institutional U.S. Government Money Market Fund, Premier Class | 1,633 | 1,633 | |||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $1,871,117) | 1,871,117 | ||||
TOTAL INVESTMENT SECURITIES — 99.9% (Cost $342,864,942) | 389,213,148 | ||||
OTHER ASSETS AND LIABILITIES — 0.1% | 275,116 | ||||
TOTAL NET ASSETS — 100.0% | $ | 389,488,264 |
NOTES TO SCHEDULE OF INVESTMENTS |
(1) | Non-income producing. |
See Notes to Financial Statements.
7
Statement of Assets and Liabilities |
DECEMBER 31, 2018 (UNAUDITED) | |||
Assets | |||
Investment securities, at value (cost of $342,864,942) | $ | 389,213,148 | |
Receivable for capital shares sold | 157,381 | ||
Dividends and interest receivable | 721,652 | ||
390,092,181 | |||
Liabilities | |||
Payable for capital shares redeemed | 376,417 | ||
Accrued management fees | 227,500 | ||
603,917 | |||
Net Assets | $ | 389,488,264 | |
Investor Class Capital Shares, $0.01 Par Value | |||
Shares authorized | 260,000,000 | ||
Shares outstanding | 23,775,022 | ||
Net Asset Value Per Share | $ | 16.38 | |
Net Assets Consist of: | |||
Capital (par value and paid-in surplus) | $ | 346,646,623 | |
Distributable earnings | 42,841,641 | ||
$ | 389,488,264 |
See Notes to Financial Statements.
8
Statement of Operations |
FOR THE SIX MONTHS ENDED DECEMBER 31, 2018 (UNAUDITED) | |||
Investment Income (Loss) | |||
Income: | |||
Dividends | $ | 8,040,400 | |
Interest | 27,782 | ||
8,068,182 | |||
Expenses: | |||
Management fees | 1,354,557 | ||
Directors' fees and expenses | 14,135 | ||
Other expenses | 726 | ||
1,369,418 | |||
Net investment income (loss) | 6,698,764 | ||
Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on investment transactions | 8,010,358 | ||
Change in net unrealized appreciation (depreciation) on: | |||
Investments | (8,966,221 | ) | |
Translation of assets and liabilities in foreign currencies | (99 | ) | |
(8,966,320 | ) | ||
Net realized and unrealized gain (loss) | (955,962 | ) | |
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 5,742,802 |
See Notes to Financial Statements.
9
Statement of Changes in Net Assets |
SIX MONTHS ENDED DECEMBER 31, 2018 (UNAUDITED) AND YEAR ENDED JUNE 30, 2018 | ||||||
Increase (Decrease) in Net Assets | December 31, 2018 | June 30, 2018 | ||||
Operations | ||||||
Net investment income (loss) | $ | 6,698,764 | $ | 15,662,765 | ||
Net realized gain (loss) | 8,010,358 | 948,911 | ||||
Change in net unrealized appreciation (depreciation) | (8,966,320 | ) | (17,700,487 | ) | ||
Net increase (decrease) in net assets resulting from operations | 5,742,802 | (1,088,811 | ) | |||
Distributions to Shareholders | ||||||
From earnings(1) | (16,915,800 | ) | (35,125,331 | ) | ||
Capital Share Transactions | ||||||
Proceeds from shares sold | 34,469,653 | 51,770,202 | ||||
Proceeds from reinvestment of distributions | 16,121,013 | 33,504,690 | ||||
Payments for shares redeemed | (55,773,061 | ) | (184,096,682 | ) | ||
Net increase (decrease) in net assets from capital share transactions | (5,182,395 | ) | (98,821,790 | ) | ||
Net increase (decrease) in net assets | (16,355,393 | ) | (135,035,932 | ) | ||
Net Assets | ||||||
Beginning of period | 405,843,657 | 540,879,589 | ||||
End of period | $ | 389,488,264 | $ | 405,843,657 | ||
Transactions in Shares of the Fund | ||||||
Sold | 1,975,872 | 2,935,538 | ||||
Issued in reinvestment of distributions | 929,858 | 1,910,190 | ||||
Redeemed | (3,216,249 | ) | (10,579,560 | ) | ||
Net increase (decrease) in shares of the fund | (310,519 | ) | (5,733,832 | ) |
(1) | Prior period presentation has been updated to reflect the current period combination of distributions to shareholders from net investment income and net realized gains. Distributions from net investment income were $(15,058,609). Distributions from net realized gains were $(20,066,722). |
See Notes to Financial Statements.
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Notes to Financial Statements |
DECEMBER 31, 2018 (UNAUDITED)
1. Organization
American Century Quantitative Equity 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. Utilities Fund (the fund) is one fund in a series issued by the corporation. The fund’s investment objectives are to seek current income and long-term growth of capital and income. The fund invests at least 80% of its assets in equity securities of companies engaged in the utilities industry. The fund offers the Investor Class.
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.
Distributions to Shareholders — Distributions from net investment income, if any, are generally declared and paid quarterly. Distributions from 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.
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., and the corporation’s transfer agent, American Century Services, LLC, are wholly owned, directly or indirectly, by ACC.
12
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). The agreement provides that all expenses of managing and operating the fund, except 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 the daily net assets of the fund and paid monthly in arrears. The fee consists of (1) an Investment Category Fee based on the daily net assets of the fund and certain other accounts managed by the investment advisor that are in the same broad investment category as the fund and (2) a Complex Fee based on the assets of all the funds in the American Century Investments family of funds. The rates for the Investment Category Fee range from 0.3380% to 0.5200% and the rates for the Complex Fee range from 0.2500% to 0.3100%. The effective annual management fee for the period ended December 31, 2018 was 0.66%.
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 sales were $3,737,242 and there were no interfund purchases. The effect of interfund transactions on the Statement of Operations was $251,312 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 December 31, 2018 were $128,311,136 and $142,307,129, respectively.
5. 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.
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 | $ | 387,342,031 | — | — | ||||
Temporary Cash Investments | 1,633 | $ | 1,869,484 | — | ||||
$ | 387,343,664 | $ | 1,869,484 | — |
13
6. Risk Factors
The fund concentrates its investments in a narrow segment of the total market. Because of this, the fund may be subject to greater risk and market fluctuations than a portfolio representing a broader range of industries.
7. Federal Tax Information
The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
As of period end, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $ | 347,355,834 | |
Gross tax appreciation of investments | $ | 59,132,435 | |
Gross tax depreciation of investments | (17,275,121 | ) | |
Net tax appreciation (depreciation) of investments | $ | 41,857,314 |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales.
14
Financial Highlights |
For a Share Outstanding Throughout the Years Ended June 30 (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) | $16.85 | 0.29 | (0.03) | 0.26 | (0.30) | (0.43) | (0.73) | $16.38 | 1.33% | 0.67%(4) | 3.26%(4) | 32% | $389,488 | ||
2018 | $18.14 | 0.58 | (0.58) | —(5) | (0.56) | (0.73) | (1.29) | $16.85 | (0.06)% | 0.67% | 3.31% | 48% | $405,844 | ||
2017 | $19.35 | 0.59 | (0.48) | 0.11 | (0.58) | (0.74) | (1.32) | $18.14 | 0.61% | 0.67% | 3.17% | 39% | $540,880 | ||
2016 | $16.28 | 0.57 | 3.44 | 4.01 | (0.54) | (0.40) | (0.94) | $19.35 | 25.76% | 0.68% | 3.35% | 36% | $640,342 | ||
2015 | $18.03 | 0.55 | (0.98) | (0.43) | (0.58) | (0.74) | (1.32) | $16.28 | (2.73)% | 0.67% | 3.14% | 40% | $348,382 | ||
2014 | $16.90 | 0.58 | 2.13 | 2.71 | (0.58) | (1.00) | (1.58) | $18.03 | 17.35% | 0.67% | 3.41% | 45% | $414,840 |
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 December 31, 2018 (unaudited). |
(4) | Annualized. |
(5) | Per share amount was less than $0.005. |
See Notes to Financial Statements.
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
Descriptions of the principles and policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund are available without charge, upon request, by calling 1-800-345-2021 or visiting the "About Us" page of American Century Investments’ website at americancentury.com. A description of the policies is also available 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. 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.
16
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 Quantitative Equity 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. | ||
©2019 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-91451 1902 |
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 for semiannual report filings.
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. |
(a)(4) | 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 Quantitative Equity Funds, Inc. | |||
By: | /s/ Jonathan S. Thomas | |||
Name: | Jonathan S. Thomas | |||
Title: | President | |||
Date: | February 22, 2019 |
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: | February 22, 2019 |
By: | /s/ R. Wes Campbell | ||
Name: | R. Wes Campbell | ||
Title: | Treasurer and | ||
Chief Financial Officer | |||
(principal financial officer) | |||
Date: | February 22, 2019 |