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 | 811-06247 | |||||
AMERICAN CENTURY WORLD MUTUAL 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: | 11-30 | |||||
Date of reporting period: | 05-31-2016 |
ITEM 1. REPORTS TO STOCKHOLDERS.
![](https://capedge.com/proxy/N-CSRS/0000872825-16-000153/acihorizblkb99.jpg)
Semiannual Report | |
May 31, 2016 | |
Emerging Markets Fund |
Table of Contents |
Any opinions expressed in this report reflect those of the author as of the date of the report, and do not necessarily represent the opinions of American Century Investments® or any other person in the American Century Investments organization. Any such opinions are subject to change at any time based upon market or other conditions and American Century Investments disclaims any responsibility to update such opinions. These opinions may not be relied upon as investment advice and, because investment decisions made by American Century Investments funds are based on numerous factors, may not be relied upon as an indication of trading intent on behalf of any American Century Investments fund. Security examples are used for representational purposes only and are not intended as recommendations to purchase or sell securities. Performance information for comparative indices and securities is provided to American Century Investments by third party vendors. To the best of American Century Investments’ knowledge, such information is accurate at the time of printing.
President’s Letter |
![]() | Dear Investor: Thank you for reviewing this semiannual report for the six months ended May 31, 2016. It provides a macroeconomic and financial market overview (below), followed by a schedule of fund investments and other financial information. For additional commentary and information on fund performance, key factors that affected asset returns, and other insights regarding the investment markets, we encourage you to visit our website, americancentury.com. |
Jonathan Thomas |
Economic Growth Concerns and Central Bank Policies Triggered Market Volatility
Global macroeconomic events—in the form of recession fears and resulting central bank policy moves—triggered widespread market volatility. Stock index graphs of the six months look like a square root sign (√). From late December to mid-February, stock market indices declined sharply on a confluence of factors that carried over from last summer’s similar sell-off, including concerns about China’s slowing economic growth, its possible contagion to the global economy, an energy price collapse, and Chinese currency devaluations. Furthermore, the U.S. Federal Reserve (Fed) started to raise interest rates in December and projected four more rate hikes in 2016, which put additional pressure on commodity prices and emerging markets.
These factors combined to drive down stock prices and U.S. Treasury yields until mid-February, when the markets reversed, partly in response to indications that the global oil supply glut could be reduced. Oil prices started to rise, China stabilized, and stock markets rallied. Central bank stimulus governed the markets, with the Bank of Japan resorting to negative interest rates, the Fed holding rates steady while reducing its rate hike projections, and the European Central Bank announcing significant additional stimulus.
Modest broad market gains and losses for the reporting period do not capture its volatility, which generally pushed returns for bonds (and higher-yielding, more defensive stock sectors such as utilities and telecommunication services) ahead of broad stock returns. Also, the divergence between generally weaker global economic conditions and the relatively stable U.S. economy helped U.S. stocks generally outpace their non-U.S. counterparts.
Looking ahead, we expect more market volatility this year due to global economic and political headwinds, uncertainty surrounding future Fed moves, and the U.S. presidential election. This could present both challenges and opportunities for active investment managers. In this environment, we continue to believe in a disciplined, diversified, risk-aware investment approach, using professionally managed portfolios to meet financial goals. We appreciate your trust in us.
Sincerely,
![](https://capedge.com/proxy/N-CSRS/0000872825-16-000153/jonathanthomassig.jpg)
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
2
Fund Characteristics |
MAY 31, 2016 | |
Top Ten Holdings | % of net assets |
Tencent Holdings Ltd. | 4.8% |
Taiwan Semiconductor Manufacturing Co. Ltd. | 4.6% |
Samsung Electronics Co. Ltd. | 2.9% |
HDFC Bank Ltd. | 2.4% |
China Mobile Ltd. | 2.3% |
Industrial & Commercial Bank of China Ltd., H Shares | 2.1% |
Naspers Ltd., N Shares | 1.9% |
Ping An Insurance Group Co., H Shares | 1.8% |
President Chain Store Corp. | 1.7% |
LG Household & Health Care Ltd. | 1.5% |
Types of Investments in Portfolio | % of net assets |
Common Stocks | 97.2% |
Exchange-Traded Funds | 1.7% |
Total Equity Exposure | 98.9% |
Temporary Cash Investments | 0.6% |
Other Assets and Liabilities | 0.5% |
Investments by Country | % of net assets |
China | 23.5% |
South Korea | 14.3% |
Taiwan | 13.4% |
Thailand | 6.3% |
India | 6.3% |
South Africa | 5.8% |
Mexico | 4.8% |
Brazil | 4.7% |
Russia | 4.7% |
Indonesia | 4.4% |
Turkey | 3.3% |
Other Countries | 5.7% |
Exchange-Traded Funds* | 1.7% |
Cash and Equivalents** | 1.1% |
* 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. |
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 December 1, 2015 to May 31, 2016.
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 Institutional 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 12/1/15 | Ending Account Value 5/31/16 | Expenses Paid During Period(1) 12/1/15 - 5/31/16 | Annualized Expense Ratio(1) | |
Actual | ||||
Investor Class (after waiver) | $1,000 | $990.20 | $7.02 | 1.41% |
Investor Class (before waiver) | $1,000 | $990.20(2) | $8.26 | 1.66% |
Institutional Class (after waiver) | $1,000 | $992.50 | $6.03 | 1.21% |
Institutional Class (before waiver) | $1,000 | $992.50(2) | $7.27 | 1.46% |
A Class (after waiver) | $1,000 | $988.50 | $8.25 | 1.66% |
A Class (before waiver) | $1,000 | $988.50(2) | $9.50 | 1.91% |
C Class (after waiver) | $1,000 | $984.90 | $11.96 | 2.41% |
C Class (before waiver) | $1,000 | $984.90(2) | $13.20 | 2.66% |
R Class (after waiver) | $1,000 | $988.60 | $9.50 | 1.91% |
R Class (before waiver) | $1,000 | $988.60(2) | $10.74 | 2.16% |
R6 Class (after waiver) | $1,000 | $991.50 | $5.28 | 1.06% |
R6 Class (before waiver) | $1,000 | $991.50(2) | $6.52 | 1.31% |
Hypothetical | ||||
Investor Class (after waiver) | $1,000 | $1,017.95 | $7.11 | 1.41% |
Investor Class (before waiver) | $1,000 | $1,016.70 | $8.37 | 1.66% |
Institutional Class (after waiver) | $1,000 | $1,018.95 | $6.11 | 1.21% |
Institutional Class (before waiver) | $1,000 | $1,017.70 | $7.36 | 1.46% |
A Class (after waiver) | $1,000 | $1,016.70 | $8.37 | 1.66% |
A Class (before waiver) | $1,000 | $1,015.45 | $9.62 | 1.91% |
C Class (after waiver) | $1,000 | $1,012.95 | $12.13 | 2.41% |
C Class (before waiver) | $1,000 | $1,011.70 | $13.38 | 2.66% |
R Class (after waiver) | $1,000 | $1,015.45 | $9.62 | 1.91% |
R Class (before waiver) | $1,000 | $1,014.20 | $10.88 | 2.16% |
R6 Class (after waiver) | $1,000 | $1,019.70 | $5.35 | 1.06% |
R6 Class (before waiver) | $1,000 | $1,018.45 | $6.61 | 1.31% |
(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 183, the number of days in the most recent fiscal half-year, divided by 366, to reflect the one-half year period. |
(2) | Ending account value assumes the return earned after waiver and would have been lower if a portion of the fees had not been waived. |
5
Schedule of Investments |
MAY 31, 2016 (UNAUDITED)
Shares | Value | |||
COMMON STOCKS — 97.2% | ||||
Brazil — 4.7% | ||||
Cielo SA | 290,172 | $ | 2,542,297 | |
Itau Unibanco Holding SA ADR | 630,084 | 5,046,973 | ||
Raia Drogasil SA | 493,600 | 7,818,703 | ||
Ultrapar Participacoes SA | 307,900 | 5,815,302 | ||
Vale SA ADR | 788,741 | 3,099,752 | ||
24,323,027 | ||||
Chile — 1.0% | ||||
SACI Falabella | 715,051 | 5,025,832 | ||
China — 23.5% | ||||
AAC Technologies Holdings, Inc. | 193,500 | 1,566,277 | ||
Alibaba Group Holding Ltd. ADR(1) | 94,958 | 7,786,556 | ||
Baidu, Inc. ADR(1) | 28,144 | 5,024,830 | ||
Beijing Enterprises Water Group Ltd. | 9,932,000 | 6,377,850 | ||
China Gas Holdings Ltd. | 3,246,000 | 4,594,923 | ||
China Mobile Ltd. | 1,043,500 | 11,897,706 | ||
China Overseas Land & Investment Ltd. | 1,544,000 | 4,639,501 | ||
China Railway Construction Corp. Ltd., H Shares | 4,864,500 | 6,078,473 | ||
CNOOC Ltd. | 3,978,000 | 4,750,615 | ||
Ctrip.com International Ltd. ADR(1) | 122,318 | 5,597,272 | ||
IMAX China Holding, Inc.(1) | 795,900 | 4,383,685 | ||
Industrial & Commercial Bank of China Ltd., H Shares | 20,047,645 | 10,629,128 | ||
KWG Property Holding Ltd. | 5,299,500 | 3,328,065 | ||
New Oriental Education & Technology Group, Inc. ADR | 90,383 | 3,818,682 | ||
Ping An Insurance Group Co., H Shares | 2,058,500 | 9,192,157 | ||
Shenzhou International Group Holdings Ltd. | 1,277,000 | 6,425,467 | ||
Tencent Holdings Ltd. | 1,115,100 | 24,868,491 | ||
120,959,678 | ||||
Egypt — 0.8% | ||||
Commercial International Bank Egypt S.A.E. | 857,062 | 4,107,744 | ||
Hungary — 1.0% | ||||
Richter Gedeon Nyrt | 267,712 | 5,367,022 | ||
India — 6.3% | ||||
Bharti Infratel Ltd. | 887,340 | 4,939,484 | ||
HCL Technologies Ltd. | 383,466 | 4,216,217 | ||
HDFC Bank Ltd. | 602,151 | 12,528,965 | ||
Larsen & Toubro Ltd. | 211,433 | 4,630,409 | ||
SKS Microfinance Ltd.(1) | 608,580 | 5,881,840 | ||
32,196,915 | ||||
Indonesia — 4.4% | ||||
Astra International Tbk PT | 7,117,400 | 3,438,861 | ||
Bank Rakyat Indonesia Persero Tbk PT | 3,595,500 | 2,724,262 | ||
Matahari Department Store Tbk PT | 4,213,900 | 5,853,496 | ||
Telekomunikasi Indonesia Persero Tbk PT | 23,627,200 | 6,399,754 | ||
Wijaya Karya Persero Tbk PT | 25,140,000 | 4,416,984 | ||
22,833,357 |
6
Shares | Value | |||
Mexico — 4.8% | ||||
Alsea SAB de CV | 1,096,933 | $ | 4,156,717 | |
Cemex SAB de CV ADR(1) | 1,041,353 | 6,623,005 | ||
Corp. Inmobiliaria Vesta SAB de CV | 1,761,034 | 2,576,180 | ||
Fomento Economico Mexicano SAB de CV ADR | 53,701 | 4,869,607 | ||
Grupo Aeroportuario del Centro Norte Sab de CV | 1,082,933 | 6,220,627 | ||
24,446,136 | ||||
Peru — 1.0% | ||||
Credicorp Ltd. | 35,951 | 5,040,330 | ||
Philippines — 1.9% | ||||
Ayala Land, Inc. | 6,439,600 | 4,915,935 | ||
Universal Robina Corp. | 1,199,780 | 5,002,825 | ||
9,918,760 | ||||
Russia — 4.7% | ||||
Moscow Exchange MICEX-RTS PJSC | 3,281,554 | 5,388,471 | ||
NovaTek OAO GDR | 69,774 | 7,005,310 | ||
X5 Retail Group NV GDR(1) | 322,579 | 6,306,419 | ||
Yandex NV, A Shares(1) | 271,955 | 5,602,273 | ||
24,302,473 | ||||
South Africa — 5.8% | ||||
Aspen Pharmacare Holdings Ltd. | 263,034 | 5,389,132 | ||
Capitec Bank Holdings Ltd. | 121,651 | 4,605,496 | ||
Discovery Holdings Ltd. | 505,930 | 3,869,743 | ||
Naspers Ltd., N Shares | 67,885 | 9,984,629 | ||
Sappi Ltd.(1) | 547,732 | 2,569,588 | ||
Vodacom Group Ltd. | 340,470 | 3,561,490 | ||
29,980,078 | ||||
South Korea — 14.3% | ||||
Amorepacific Corp. | 20,500 | 7,181,364 | ||
CJ Korea Express Corp.(1) | 29,806 | 5,351,975 | ||
Coway Co. Ltd. | 61,037 | 5,275,055 | ||
GS Retail Co. Ltd. | 86,855 | 3,855,202 | ||
Innocean Worldwide, Inc. | 76,986 | 5,736,161 | ||
LG Chem Ltd. | 15,348 | 3,489,938 | ||
LG Household & Health Care Ltd. | 8,925 | 7,908,038 | ||
Medy-Tox, Inc. | 12,855 | 4,735,144 | ||
NAVER Corp. | 9,467 | 5,719,282 | ||
Orion Corp. | 5,222 | 4,250,160 | ||
Samsung Electronics Co. Ltd. | 13,581 | 14,722,816 | ||
Samsung Fire & Marine Insurance Co. Ltd. | 22,158 | 5,168,589 | ||
73,393,724 | ||||
Taiwan — 13.4% | ||||
Hota Industrial Manufacturing Co. Ltd. | 1,354,000 | 6,393,745 | ||
Largan Precision Co. Ltd. | 43,000 | 3,586,355 | ||
Nien Made Enterprise Co. Ltd.(1) | 559,000 | 5,125,059 | ||
PChome Online, Inc. | 307,553 | 3,677,905 | ||
President Chain Store Corp. | 1,135,000 | 8,613,645 | ||
Taiwan Paiho Ltd. | 1,634,000 | 4,424,138 | ||
Taiwan Semiconductor Manufacturing Co. Ltd. | 4,925,939 | 23,638,465 | ||
Tung Thih Electronic Co. Ltd. | 505,000 | 7,061,096 |
7
Shares | Value | |||
Uni-President Enterprises Corp. | 3,237,000 | $ | 6,163,824 | |
68,684,232 | ||||
Thailand — 6.3% | ||||
Airports of Thailand PCL | 348,200 | 3,859,684 | ||
CP ALL PCL | 4,288,800 | 5,972,507 | ||
Kasikornbank PCL | 575,300 | 2,834,228 | ||
KCE Electronics PCL | 1,113,800 | 2,533,135 | ||
Minor International PCL | 5,121,600 | 5,626,950 | ||
Siam Cement PCL (The) | 238,800 | 3,208,509 | ||
Srisawad Power 1979 PCL | 3,772,000 | 4,487,334 | ||
Thai Oil PCL | 2,087,800 | 3,681,775 | ||
32,204,122 | ||||
Turkey — 3.3% | ||||
Haci Omer Sabanci Holding AS | 1,305,316 | 4,063,499 | ||
TAV Havalimanlari Holding AS | 510,099 | 2,616,069 | ||
Tofas Turk Otomobil Fabrikasi AS | 746,899 | 5,601,553 | ||
Ulker Biskuvi Sanayi AS | 623,749 | 4,508,927 | ||
16,790,048 | ||||
TOTAL COMMON STOCKS (Cost $440,996,427) | 499,573,478 | |||
EXCHANGE-TRADED FUNDS — 1.7% | ||||
iShares MSCI Brazil Capped ETF | 204,044 | 5,190,879 | ||
iShares MSCI Malaysia ETF | 438,112 | 3,469,847 | ||
TOTAL EXCHANGE-TRADED FUNDS (Cost $9,693,174) | 8,660,726 | |||
TEMPORARY CASH INVESTMENTS — 0.6% | ||||
Repurchase Agreement, Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 3.75%, 11/15/43, valued at $2,352,675), at 0.10%, dated 5/31/16, due 6/1/16 (Delivery value $2,301,006) | 2,301,000 | |||
State Street Institutional Liquid Reserves Fund, Premier Class | 1,053,620 | 1,053,620 | ||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $3,354,620) | 3,354,620 | |||
TOTAL INVESTMENT SECURITIES — 99.5% (Cost $454,044,221) | 511,588,824 | |||
OTHER ASSETS AND LIABILITIES — 0.5% | 2,344,530 | |||
TOTAL NET ASSETS — 100.0% | $ | 513,933,354 |
8
MARKET SECTOR DIVERSIFICATION | ||
(as a % of net assets) | ||
Information Technology | 20.5 | % |
Financials | 19.7 | % |
Consumer Discretionary | 18.3 | % |
Consumer Staples | 14.2 | % |
Industrials | 6.5 | % |
Telecommunication Services | 5.2 | % |
Energy | 4.1 | % |
Materials | 3.7 | % |
Health Care | 2.9 | % |
Utilities | 2.1 | % |
Exchange-Traded Funds | 1.7 | % |
Cash and Equivalents* | 1.1 | % |
*Includes temporary cash investments and other assets and liabilities.
NOTES TO SCHEDULE OF INVESTMENTS | ||
ADR | - | American Depositary Receipt |
GDR | - | Global Depositary Receipt |
(1) Non-income producing.
See Notes to Financial Statements.
9
Statement of Assets and Liabilities |
MAY 31, 2016 (UNAUDITED) | |||
Assets | |||
Investment securities, at value (cost of $454,044,221) | $ | 511,588,824 | |
Foreign currency holdings, at value (cost of $1,470,983) | 1,470,917 | ||
Receivable for investments sold | 6,882,657 | ||
Receivable for capital shares sold | 227,576 | ||
Dividends and interest receivable | 567,171 | ||
Other assets | 122 | ||
520,737,267 | |||
Liabilities | |||
Payable for investments purchased | 6,004,981 | ||
Payable for capital shares redeemed | 202,867 | ||
Accrued management fees | 584,031 | ||
Distribution and service fees payable | 12,034 | ||
6,803,913 | |||
Net Assets | $ | 513,933,354 | |
Net Assets Consist of: | |||
Capital (par value and paid-in surplus) | $ | 533,127,507 | |
Undistributed net investment income | 525,274 | ||
Accumulated net realized loss | (77,219,839 | ) | |
Net unrealized appreciation | 57,500,412 | ||
$ | 513,933,354 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | ||||
Investor Class, $0.01 Par Value | $414,445,547 | 51,725,416 | $8.01 | |||
Institutional Class, $0.01 Par Value | $28,594,554 | 3,480,965 | $8.21 | |||
A Class, $0.01 Par Value | $35,887,514 | 4,642,256 | $7.73* | |||
C Class, $0.01 Par Value | $4,622,158 | 644,553 | $7.17 | |||
R Class, $0.01 Par Value | $1,626,696 | 208,352 | $7.81 | |||
R6 Class, $0.01 Par Value | $28,756,885 | 3,497,876 | $8.22 |
*Maximum offering price $8.20 (net asset value divided by 0.9425).
See Notes to Financial Statements.
10
Statement of Operations |
FOR THE SIX MONTHS ENDED MAY 31, 2016 (UNAUDITED) | |||
Investment Income (Loss) | |||
Income: | |||
Dividends (net of foreign taxes withheld of $467,761) | $ | 3,945,851 | |
Interest | 5,083 | ||
3,950,934 | |||
Expenses: | |||
Management fees | 3,957,795 | ||
Distribution and service fees: | |||
A Class | 37,812 | ||
C Class | 19,281 | ||
R Class | 3,823 | ||
Directors' fees and expenses | 8,130 | ||
Other expenses | 3,536 | ||
4,030,377 | |||
Fees waived | (610,101 | ) | |
3,420,276 | |||
Net investment income (loss) | 530,658 | ||
Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investment transactions | (15,856,001 | ) | |
Foreign currency transactions | (174,944 | ) | |
Capital gain distributions received from underlying funds | 780,521 | ||
(15,250,424 | ) | ||
Change in net unrealized appreciation (depreciation) on: | |||
Investments | 11,774,621 | ||
Translation of assets and liabilities in foreign currencies | (27,014 | ) | |
11,747,607 | |||
Net realized and unrealized gain (loss) | (3,502,817 | ) | |
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | (2,972,159 | ) |
See Notes to Financial Statements.
11
Statement of Changes in Net Assets |
SIX MONTHS ENDED MAY 31, 2016 (UNAUDITED) AND YEAR ENDED NOVEMBER 30, 2015 | ||||||
Increase (Decrease) in Net Assets | May 31, 2016 | November 30, 2015 | ||||
Operations | ||||||
Net investment income (loss) | $ | 530,658 | $ | 1,325,214 | ||
Net realized gain (loss) | (15,250,424 | ) | (3,175,447 | ) | ||
Change in net unrealized appreciation (depreciation) | 11,747,607 | (44,677,252 | ) | |||
Net increase (decrease) in net assets resulting from operations | (2,972,159 | ) | (46,527,485 | ) | ||
Distributions to Shareholders | ||||||
From net investment income: | ||||||
Investor Class | (550,383 | ) | (277,848 | ) | ||
Institutional Class | (88,977 | ) | (40,979 | ) | ||
R6 Class | (128,912 | ) | (59,777 | ) | ||
Decrease in net assets from distributions | (768,272 | ) | (378,604 | ) | ||
Capital Share Transactions | ||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | 57,962,207 | 67,583,843 | ||||
Redemption Fees | ||||||
Increase in net assets from redemption fees | 48,657 | 34,209 | ||||
Net increase (decrease) in net assets | 54,270,433 | 20,711,963 | ||||
Net Assets | ||||||
Beginning of period | 459,662,921 | 438,950,958 | ||||
End of period | $ | 513,933,354 | $ | 459,662,921 | ||
Undistributed net investment income | $ | 525,274 | $ | 762,888 |
See Notes to Financial Statements.
12
Notes to Financial Statements |
MAY 31, 2016 (UNAUDITED)
1. Organization
American Century World Mutual 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. Emerging Markets Fund (the fund) is one fund in a series issued by the corporation. The fund’s investment objective is to seek capital growth.
The fund offers the Investor Class, the Institutional Class, the A Class, the C Class, the R Class and the R6 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. The share classes differ principally in their respective sales charges and distribution and shareholder servicing expenses and arrangements. The Institutional Class and R6 Class shareholders do not require the same level of shareholder and administrative services from American Century Investment Management, Inc. (ACIM) (the investment advisor) as shareholders of other classes. In addition, financial intermediaries do not receive any service, distribution or administrative fees for the R6 Class. As a result, the Institutional Class and R6 Class are charged lower unified management fees.
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
13
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 — Income and capital gain distributions, if any, are recorded as of the ex-dividend date. Long-term capital gain distributions, if any, are a component of net realized gain (loss). 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 ACIM has determined are creditworthy pursuant to criteria adopted by the Board of Directors. The fund requires that the collateral, represented by securities, received in a repurchase transaction be transferred to the custodian in a manner sufficient to enable the fund to obtain those securities in the event of a default under the repurchase agreement. ACIM monitors, on a daily basis, the securities transferred to ensure the value, including accrued interest, of the securities under each repurchase agreement is equal to or greater than amounts owed to the fund under each repurchase agreement.
Joint Trading Account — Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the fund, along with certain other funds in the American Century Investments family of funds, may transfer uninvested cash balances into a joint trading account. These balances are invested in one or more repurchase agreements that are collateralized by U.S. Treasury or Agency obligations.
Income Tax Status — It is the fund’s policy to distribute substantially all net investment income and net realized gains to shareholders and to otherwise qualify as a regulated investment company under provisions of the Internal Revenue Code. Accordingly, no provision has been made for income taxes. The fund files U.S. federal, state, local and non-U.S. tax returns as applicable. The fund's tax returns are subject to examination by the relevant taxing authority until expiration of the applicable statute of limitations, which is generally three years from the date of filing but can be longer in certain jurisdictions. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination and for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Multiple Class — All shares of the fund represent an equal pro rata interest in the net assets of the class to which such shares belong, and have identical voting, dividend, liquidation and other rights and the same terms and conditions, except for class specific expenses and exclusive rights to vote on matters affecting only individual classes. Income, non-class specific expenses, and realized and unrealized capital gains and losses of the fund are allocated to each class of shares based on their relative net assets.
Distributions to Shareholders — Distributions from net investment income and net realized gains, if any, are generally declared and paid annually. The fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code, in all events in a manner consistent with provisions of the 1940 Act.
Redemption Fees — The fund may impose a 2.00% redemption fee on shares held less than 60 days. The fee may not be applicable to all classes. The redemption fee is retained by the fund and helps cover
14
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. Various funds issued by American Century Asset Allocation Portfolios, Inc. and American Century Strategic Asset Allocations, Inc. own, in aggregate, 29% 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, 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 rate of the fee is determined by applying a fee rate calculation formula. This formula takes into account the fund’s assets as well as certain assets, if any, of other clients of the investment advisor outside the American Century Investments family of funds (such as subadvised funds and separate accounts) that have very similar investment teams and investment strategies (strategy assets). The strategy assets of the fund also include the assets of NT Emerging Markets Fund, one fund in a series issued by the corporation. The annual management fee schedule ranges from 1.250% to 1.850% for the Investor Class, A Class, C Class and R Class. The annual management fee schedule ranges from 1.050% to 1.650% for the Institutional Class and 0.900% to 1.500% for the R6 Class. During the six months ended May 31, 2016, the investment advisor voluntarily agreed to waive 0.250% of the fund's management fee. The investment advisor expects this waiver to continue until March 31, 2017 and cannot terminate it prior to such date without the approval of the Board of Directors. The total amount of the waiver for each class for the six months ended May 31, 2016 was $502,242, $30,145, $37,812, $4,820, $1,911 and $33,171 for the Investor Class, Institutional Class, A Class, C Class, R Class and R6 Class, respectively. The effective annual management fee before waiver for each class for the six months ended May 31, 2016 was 1.65% for the Investor Class, A Class, C Class and R Class, 1.45% for the Institutional Class and 1.30% for the R6 Class. The effective annual management fee after waiver for each class for the six months ended May 31, 2016 was 1.40% for the Investor Class, A Class, C Class and R Class, 1.20% for the Institutional Class and 1.05% for the R6 Class.
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 six months ended May 31, 2016 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,
15
that these transactions be effected at the independent current market price of the security. There were no significant interfund transactions during the period.
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the six months ended May 31, 2016 were $198,039,099 and $131,458,297, respectively.
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended May 31, 2016 | Year ended November 30, 2015 | |||||||||
Shares | Amount | Shares | Amount | |||||||
Investor Class/Shares Authorized | 380,000,000 | 400,000,000 | ||||||||
Sold | 9,198,553 | $ | 71,471,540 | 13,659,639 | $ | 116,335,445 | ||||
Issued in reinvestment of distributions | 70,046 | 535,852 | 31,378 | 272,985 | ||||||
Redeemed | (6,875,777 | ) | (53,452,234 | ) | (8,051,549 | ) | (69,730,913 | ) | ||
2,392,822 | 18,555,158 | 5,639,468 | 46,877,517 | |||||||
Institutional Class/Shares Authorized | 35,000,000 | 40,000,000 | ||||||||
Sold | 3,266,850 | 26,009,165 | 493,583 | 4,194,048 | ||||||
Issued in reinvestment of distributions | 11,337 | 88,884 | 4,598 | 40,966 | ||||||
Redeemed | (374,275 | ) | (2,957,955 | ) | (1,685,794 | ) | (15,221,632 | ) | ||
2,903,912 | 23,140,094 | (1,187,613 | ) | (10,986,618 | ) | |||||
A Class/Shares Authorized | 30,000,000 | 30,000,000 | ||||||||
Sold | 1,989,569 | 15,275,028 | 3,008,091 | 25,809,533 | ||||||
Redeemed | (626,666 | ) | (4,618,699 | ) | (795,069 | ) | (6,632,037 | ) | ||
1,362,903 | 10,656,329 | 2,213,022 | 19,177,496 | |||||||
C Class/Shares Authorized | 30,000,000 | 30,000,000 | ||||||||
Sold | 243,114 | 1,714,241 | 197,372 | 1,638,348 | ||||||
Redeemed | (31,266 | ) | (214,976 | ) | (148,454 | ) | (1,145,309 | ) | ||
211,848 | 1,499,265 | 48,918 | 493,039 | |||||||
R Class/Shares Authorized | 30,000,000 | 25,000,000 | ||||||||
Sold | 47,912 | 353,845 | 84,391 | 708,493 | ||||||
Redeemed | (19,839 | ) | (149,975 | ) | (98,265 | ) | (839,815 | ) | ||
28,073 | 203,870 | (13,874 | ) | (131,322 | ) | |||||
R6 Class/Shares Authorized | 40,000,000 | 30,000,000 | ||||||||
Sold | 770,627 | 6,108,944 | 1,902,631 | 17,049,003 | ||||||
Issued in reinvestment of distributions | 16,443 | 128,912 | 6,701 | 59,777 | ||||||
Redeemed | (287,309 | ) | (2,330,365 | ) | (551,800 | ) | (4,955,049 | ) | ||
499,761 | 3,907,491 | 1,357,532 | 12,153,731 | |||||||
Net increase (decrease) | 7,399,319 | $ | 57,962,207 | 8,057,453 | $ | 67,583,843 |
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. |
16
• | Level 3 valuation inputs consist of unobservable data (including a fund’s own assumptions). |
The level classification is based on the lowest level input that is significant to the fair valuation measurement. The valuation inputs are not necessarily an indication of the risks associated with investing in these securities or other financial instruments. There were no significant transfers between levels during the period.
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 | ||||||||
Brazil | $ | 8,146,725 | $ | 16,176,302 | — | |||
China | 22,227,340 | 98,732,338 | — | |||||
Mexico | 11,492,612 | 12,953,524 | — | |||||
Peru | 5,040,330 | — | — | |||||
Russia | 5,602,273 | 18,700,200 | — | |||||
Other Countries | — | 300,501,834 | — | |||||
Exchange-Traded Funds | 8,660,726 | — | — | |||||
Temporary Cash Investments | 1,053,620 | 2,301,000 | — | |||||
$ | 62,223,626 | $ | 449,365,198 | — |
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 May 31, 2016, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $ | 454,320,358 | |
Gross tax appreciation of investments | $ | 78,876,370 | |
Gross tax depreciation of investments | (21,607,904 | ) | |
Net tax appreciation (depreciation) of investments | $ | 57,268,466 |
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 November 30, 2015, the fund had accumulated short-term capital losses of $(60,876,446), which represent net capital loss carryovers that may be used to offset future realized capital gains for federal income tax purposes. Any unlimited losses will be required to be utilized prior to the losses which carry an expiration date. Future capital loss carryover utilization in any given year may be subject to Internal Revenue Code limitations. Capital loss carryovers of $(57,815,598) expire in 2017 and the remaining losses are unlimited.
As of November 30, 2015, the fund had post-October capital loss deferrals of $(779,309), 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.
17
Financial Highlights |
For a Share Outstanding Throughout the Years Ended November 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 | |||||||||||||||
2016(3) | $8.10 | 0.01 | (0.09) | (0.08) | (0.01) | $8.01 | (0.98)% | 1.41%(4) | 1.66%(4) | 0.21%(4) | (0.04)%(4) | 27% | $414,446 | ||
2015 | $9.00 | 0.03 | (0.92) | (0.89) | (0.01) | $8.10 | (9.93)% | 1.43% | 1.68% | 0.30% | 0.05% | 58% | $399,694 | ||
2014 | $8.87 | 0.03 | 0.13 | 0.16 | (0.03) | $9.00 | 1.84% | 1.45% | 1.70% | 0.29% | 0.04% | 74% | $393,357 | ||
2013 | $8.36 | 0.01 | 0.53 | 0.54 | (0.03) | $8.87 | 6.48% | 1.63% | 1.72% | 0.17% | 0.08% | 68% | $421,274 | ||
2012 | $7.38 | 0.02 | 0.96 | 0.98 | — | $8.36 | 13.28% | 1.74% | 1.74% | 0.29% | 0.29% | 85% | $452,331 | ||
2011 | $8.46 | 0.01 | (1.09) | (1.08) | — | $7.38 | (12.77)% | 1.71% | 1.71% | 0.17% | 0.17% | 71% | $435,079 | ||
Institutional Class | |||||||||||||||
2016(3) | $8.31 | 0.02 | (0.09) | (0.07) | (0.03) | $8.21 | (0.75)% | 1.21%(4) | 1.46%(4) | 0.41%(4) | 0.16%(4) | 27% | $28,595 | ||
2015 | $9.24 | 0.02 | (0.93) | (0.91) | (0.02) | $8.31 | (9.83)% | 1.23% | 1.48% | 0.50% | 0.25% | 58% | $4,797 | ||
2014 | $9.09 | 0.05 | 0.14 | 0.19 | (0.04) | $9.24 | 2.07% | 1.25% | 1.50% | 0.49% | 0.24% | 74% | $16,300 | ||
2013 | $8.56 | 0.03 | 0.55 | 0.58 | (0.05) | $9.09 | 6.77% | 1.43% | 1.52% | 0.37% | 0.28% | 68% | $32,452 | ||
2012 | $7.56 | 0.04 | 0.97 | 1.01 | (0.01) | $8.56 | 13.43% | 1.54% | 1.54% | 0.49% | 0.49% | 85% | $28,536 | ||
2011 | $8.65 | 0.03 | (1.12) | (1.09) | — | $7.56 | (12.60)% | 1.51% | 1.51% | 0.37% | 0.37% | 71% | $29,695 |
For a Share Outstanding Throughout the Years Ended November 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 | |||||||||||||||
2016(3) | $7.82 | —(5) | (0.09) | (0.09) | — | $7.73 | (1.15)% | 1.66%(4) | 1.91%(4) | (0.04)%(4) | (0.29)%(4) | 27% | $35,888 | ||
2015 | $8.70 | 0.01 | (0.89) | (0.88) | — | $7.82 | (10.11)% | 1.68% | 1.93% | 0.05% | (0.20)% | 58% | $25,632 | ||
2014 | $8.59 | 0.01 | 0.12 | 0.13 | (0.02) | $8.70 | 1.59% | 1.70% | 1.95% | 0.04% | (0.21)% | 74% | $9,278 | ||
2013 | $8.09 | (0.01) | 0.52 | 0.51 | (0.01) | $8.59 | 6.30% | 1.88% | 1.97% | (0.08)% | (0.17)% | 68% | $11,575 | ||
2012 | $7.16 | —(5) | 0.93 | 0.93 | — | $8.09 | 12.99% | 1.99% | 1.99% | 0.04% | 0.04% | 85% | $13,745 | ||
2011 | $8.23 | (0.01) | (1.06) | (1.07) | — | $7.16 | (13.00)% | 1.96% | 1.96% | (0.08)% | (0.08)% | 71% | $15,339 | ||
C Class | |||||||||||||||
2016(3) | $7.28 | (0.03) | (0.08) | (0.11) | — | $7.17 | (1.51)% | 2.41%(4) | 2.66%(4) | (0.79)%(4) | (1.04)%(4) | 27% | $4,622 | ||
2015 | $8.15 | (0.05) | (0.82) | (0.87) | — | $7.28 | (10.67)% | 2.43% | 2.68% | (0.70)% | (0.95)% | 58% | $3,149 | ||
2014 | $8.09 | (0.06) | 0.13 | 0.07 | (0.01) | $8.15 | 0.82% | 2.45% | 2.70% | (0.71)% | (0.96)% | 74% | $3,129 | ||
2013 | $7.67 | (0.06) | 0.48 | 0.42 | — | $8.09 | 5.48% | 2.63% | 2.72% | (0.83)% | (0.92)% | 68% | $3,571 | ||
2012 | $6.84 | (0.05) | 0.88 | 0.83 | — | $7.67 | 12.13% | 2.74% | 2.74% | (0.71)% | (0.71)% | 85% | $3,376 | ||
2011 | $7.93 | (0.07) | (1.02) | (1.09) | — | $6.84 | (13.75)% | 2.71% | 2.71% | (0.83)% | (0.83)% | 71% | $3,896 |
For a Share Outstanding Throughout the Years Ended November 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) | |||
R Class | |||||||||||||||
2016(3) | $7.90 | (0.01) | (0.08) | (0.09) | — | $7.81 | (1.14)% | 1.91%(4) | 2.16%(4) | (0.29)%(4) | (0.54)%(4) | 27% | $1,627 | ||
2015 | $8.82 | (0.02) | (0.90) | (0.92) | — | $7.90 | (10.43)% | 1.93% | 2.18% | (0.20)% | (0.45)% | 58% | $1,425 | ||
2014 | $8.72 | (0.02) | 0.14 | 0.12 | (0.02) | $8.82 | 1.38% | 1.95% | 2.20% | (0.21)% | (0.46)% | 74% | $1,712 | ||
2013 | $8.23 | (0.02) | 0.51 | 0.49 | — | $8.72 | 5.95% | 2.13% | 2.22% | (0.33)% | (0.42)% | 68% | $1,133 | ||
2012 | $7.30 | (0.02) | 0.95 | 0.93 | — | $8.23 | 12.74% | 2.24% | 2.24% | (0.21)% | (0.21)% | 85% | $824 | ||
2011 | $8.42 | (0.03) | (1.09) | (1.12) | — | $7.30 | (13.30)% | 2.21% | 2.21% | (0.33)% | (0.33)% | 71% | $631 | ||
R6 Class | |||||||||||||||
2016(3) | $8.33 | 0.02 | (0.09) | (0.07) | (0.04) | $8.22 | (0.85)% | 1.06%(4) | 1.31%(4) | 0.56%(4) | 0.31%(4) | 27% | $28,757 | ||
2015 | $9.25 | 0.07 | (0.95) | (0.88) | (0.04) | $8.33 | (9.58)% | 1.08% | 1.33% | 0.65% | 0.40% | 58% | $24,965 | ||
2014 | $9.09 | —(5) | 0.20 | 0.20 | (0.04) | $9.25 | 2.23% | 1.10% | 1.35% | 0.64% | 0.39% | 74% | $15,174 | ||
2013(6) | $8.46 | —(5) | 0.63 | 0.63 | — | $9.09 | 7.45% | 1.12%(4) | 1.37%(4) | 0.14%(4) | (0.11)%(4) | 68%(7) | $27 |
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 May 31, 2016 (unaudited). |
(4) | Annualized. |
(5) | Per-share amount was less than $0.005. |
(6) | July 26, 2013 (commencement of sale) through November 30, 2013. |
(7) | Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended November 30, 2013. |
See Notes to Financial Statements.
Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain IRAs 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.
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.
Distributions you receive from 403(b), 457 and qualified plans are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
A description of the policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund is available without charge, upon request, by calling 1-800-345-2021. It is also available on the "About Us" page of American Century Investments’ website at americancentury.com and on the Securities and Exchange Commission’s website at sec.gov. Information regarding how the investment advisor voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the "About Us" page at americancentury.com. It is also available at sec.gov.
Quarterly Portfolio Disclosure
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-Q. The fund’s Forms N-Q are available on the SEC’s website at sec.gov, and may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The fund also makes its complete schedule of portfolio holdings for the most recent quarter of its fiscal year available on its
website at americancentury.com and, upon request, by calling 1-800-345-2021.
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 World Mutual 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. | ||
©2016 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-89423 1607 |
![](https://capedge.com/proxy/N-CSRS/0000872825-16-000153/acihorizblkb99.jpg)
Semiannual Report | |
May 31, 2016 | |
Emerging Markets Small Cap Fund |
Table of Contents |
Any opinions expressed in this report reflect those of the author as of the date of the report, and do not necessarily represent the opinions of American Century Investments® or any other person in the American Century Investments organization. Any such opinions are subject to change at any time based upon market or other conditions and American Century Investments disclaims any responsibility to update such opinions. These opinions may not be relied upon as investment advice and, because investment decisions made by American Century Investments funds are based on numerous factors, may not be relied upon as an indication of trading intent on behalf of any American Century Investments fund. Security examples are used for representational purposes only and are not intended as recommendations to purchase or sell securities. Performance information for comparative indices and securities is provided to American Century Investments by third party vendors. To the best of American Century Investments’ knowledge, such information is accurate at the time of printing.
President’s Letter |
![]() | Dear Investor: Thank you for reviewing this semiannual report for the approximately two-month reporting period from the fund’s inception to May 31, 2016. It provides a macroeconomic and financial market overview (below), followed by a schedule of fund investments and other financial information. For additional commentary and information on fund performance, key factors that affected asset returns, and other insights regarding the investment markets, we encourage you to visit our website, americancentury.com. |
Jonathan Thomas |
“Risk-on” Rebound From Early 2016 Sell-off Continued, Except in Emerging Markets (EM)
Global equity market returns for April and May of 2016 generally reflected a continued “risk-on” rebound from the sharp “risk-off” sell-off that dragged these markets down during the first six weeks of the year. Riskier asset classes such as stocks and high-yield bonds plunged at the start of the year on concerns about China’s slowing economic growth, its possible contagion to the global economy, and an energy price collapse. Furthermore, the U.S. Federal Reserve (Fed) started to raise interest rates in December and projected four more rate hikes in 2016, which put additional pressure on commodity prices and EM.
These factors combined to drive down stock prices until mid-February, when the markets reversed, partly in response to indications that the global oil supply glut could be reduced. Oil prices started to rise, China stabilized, and stock markets rallied. Central bank stimulus also boosted the markets, with the Bank of Japan resorting to negative interest rates, the Fed holding rates steady while reducing its rate hike projections, and the European Central Bank announcing significant additional stimulus.
The positive momentum and sentiment created by these moves was generally sustained through April and May, producing positive returns for most equity indices. The notable exception was EM. In May, the Fed indicated that it might raise interest rates again this summer. Anticipation of another Fed rate hike, along with continued economic and political struggles in non-U.S. economies, pushed the U.S. dollar higher and EM stock indices lower.
Looking ahead, we expect more market volatility this year due to global economic and political headwinds, uncertainty surrounding future Fed moves, and the U.S. presidential election. This could present both challenges and opportunities for active investment managers. In this environment, we continue to believe in a disciplined, diversified, risk-aware investment approach, using professionally managed portfolios to meet financial goals. We appreciate your trust in us.
Sincerely,
![](https://capedge.com/proxy/N-CSRS/0000872825-16-000153/jonathanthomassig.jpg)
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
2
Fund Characteristics |
MAY 31, 2016 | |
Top Ten Holdings | % of net assets |
iShares MSCI India Small-Cap ETF | 5.1% |
iShares MSCI Emerging Markets Small-Cap ETF | 4.0% |
Raia Drogasil SA | 1.8% |
Moscow Exchange MICEX-RTS PJSC | 1.6% |
Innocean Worldwide, Inc. | 1.6% |
Pou Sheng International Holdings Ltd. | 1.5% |
Green Seal Holding Ltd. | 1.5% |
Fu Shou Yuan International Group Ltd. | 1.5% |
Srisawad Power 1979 PCL | 1.5% |
Minor International PCL | 1.5% |
Types of Investments in Portfolio | % of net assets |
Common Stocks | 90.5% |
Exchange-Traded Funds | 9.1% |
Total Equity Exposure | 99.6% |
Temporary Cash Investments | 2.2% |
Other Assets and Liabilities | (1.8)% |
Investments by Country | % of net assets |
South Korea | 15.8% |
China | 15.8% |
Taiwan | 13.3% |
Thailand | 9.7% |
Indonesia | 5.4% |
Mexico | 5.4% |
Russia | 4.1% |
Brazil | 4.1% |
South Africa | 3.8% |
United Kingdom | 2.0% |
Other Countries | 11.1% |
Exchange-Traded Funds* | 9.1% |
Cash and Equivalents** | 0.4% |
* 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. |
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 December 1, 2015 to May 31, 2016 (except as noted).
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 Institutional 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 12/1/15 | Ending Account Value 5/31/16 | Expenses Paid During Period(1) 12/1/15 - 5/31/16 | Annualized Expense Ratio(1) | |
Actual | ||||
Investor Class | $1,000 | $995.00(2) | $2.40(3) | 1.60% |
Institutional Class | $1,000 | $995.00(2) | $2.10(3) | 1.40% |
A Class | $1,000 | $994.00(2) | $2.77(3) | 1.85% |
C Class | $1,000 | $993.00(2) | $3.89(3) | 2.60% |
R Class | $1,000 | $994.00(2) | $3.15(3) | 2.10% |
R6 Class | $1,000 | $995.00(2) | $1.87(3) | 1.25% |
Hypothetical | ||||
Investor Class | $1,000 | $1,017.00(4) | $8.07(4) | 1.60% |
Institutional Class | $1,000 | $1,018.00(4) | $7.06(4) | 1.40% |
A Class | $1,000 | $1,015.75(4) | $9.32(4) | 1.85% |
C Class | $1,000 | $1,012.00(4) | $13.08(4) | 2.60% |
R Class | $1,000 | $1,014.50(4) | $10.58(4) | 2.10% |
R6 Class | $1,000 | $1,018.75(4) | $6.31(4) | 1.25% |
(1) | Expenses are equal to the class's annualized expense ratio listed in the table above, multiplied by the average account value over the period, multiplied by 183, the number of days in the most recent fiscal half-year, divided by 366, to reflect the one-half year period. |
(2) | Ending account value based on actual return from April 7, 2016 (fund inception) through May 31, 2016. |
(3) | 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 55, the number of days in the period from April 7, 2016 (fund inception) through May 31, 2016, divided by 366, to reflect the period. Had the class been available for the full period, the expenses paid during the period would have been higher. |
(4) | Ending account value and expenses paid during the period assumes the class had been available throughout the entire period and are calculated using the class's annualized expense ratio listed in the table above. |
5
Schedule of Investments |
MAY 31, 2016 (UNAUDITED)
Shares | Value | |||
COMMON STOCKS — 90.5% | ||||
Brazil — 4.1% | ||||
Estacio Participacoes SA | 17,900 | $ | 55,529 | |
Odontoprev SA | 20,000 | 62,707 | ||
Raia Drogasil SA | 5,600 | 88,705 | ||
206,941 | ||||
China — 15.8% | ||||
AviChina Industry & Technology Co. Ltd., H Shares | 72,000 | 50,590 | ||
Beijing Enterprises Water Group Ltd. | 100,000 | 64,215 | ||
Brilliance China Automotive Holdings Ltd. | 32,000 | 31,091 | ||
China High Speed Transmission Equipment Group Co. Ltd.(1) | 42,000 | 32,213 | ||
China Lodging Group Ltd. ADR | 1,510 | 51,204 | ||
Fu Shou Yuan International Group Ltd. | 105,000 | 75,263 | ||
IMAX China Holding, Inc.(1) | 13,000 | 71,602 | ||
KWG Property Holding Ltd. | 64,000 | 40,192 | ||
Minth Group Ltd. | 18,000 | 52,929 | ||
Pou Sheng International Holdings Ltd.(1) | 273,000 | 76,587 | ||
Sina Corp.(1) | 1,055 | 56,981 | ||
Sunny Optical Technology Group Co. Ltd. | 19,000 | 65,650 | ||
TAL Education Group ADR(1) | 1,203 | 64,264 | ||
Weibo Corp. ADR(1) | 2,463 | 65,491 | ||
798,272 | ||||
Colombia — 1.0% | ||||
Cementos Argos SA | 12,956 | 48,789 | ||
Czech — 0.9% | ||||
Moneta Money Bank AS(1) | 14,000 | 43,956 | ||
Greece — 1.4% | ||||
JUMBO SA(1) | 5,158 | 70,590 | ||
Hong Kong — 0.8% | ||||
Pacific Textiles Holdings Ltd. | 32,000 | 38,586 | ||
Hungary — 1.0% | ||||
Richter Gedeon Nyrt | 2,630 | 52,726 | ||
Indonesia — 5.4% | ||||
Bank Pembangunan Daerah Jawa Barat Dan Banten Tbk PT | 349,500 | 24,178 | ||
Cikarang Listrindo Tbk PT(1) | 300,000 | 32,943 | ||
Indofood Sukses Makmur Tbk PT | 107,100 | 54,295 | ||
Matahari Department Store Tbk PT | 47,200 | 65,565 | ||
Mitra Keluarga Karyasehat Tbk PT | 212,100 | 36,489 | ||
Wijaya Karya Persero Tbk PT | 333,200 | 58,542 | ||
272,012 | ||||
Malaysia — 0.7% | ||||
Carlsberg Brewery Malaysia Bhd | 10,500 | 33,466 | ||
Mexico — 5.4% | ||||
Alsea SAB de CV | 19,451 | 73,708 | ||
Corp. Inmobiliaria Vesta SAB de CV | 33,825 | 49,482 | ||
Gentera SAB de CV | 17,395 | 31,582 | ||
Grupo Aeroportuario del Centro Norte Sab de CV | 9,718 | 55,822 |
6
Shares | Value | |||
Grupo Aeroportuario del Pacifico SAB de CV, B Shares | 6,053 | $ | 61,338 | |
271,932 | ||||
Philippines — 0.8% | ||||
Puregold Price Club, Inc. | 45,100 | 40,505 | ||
Poland — 1.1% | ||||
Eurocash SA | 4,630 | 57,517 | ||
Qatar — 0.4% | ||||
Qatar Industrial Manufacturing Co. QSC | 2,117 | 23,260 | ||
Russia — 4.1% | ||||
Moscow Exchange MICEX-RTS PJSC | 49,359 | 81,050 | ||
X5 Retail Group NV GDR(1) | 3,534 | 69,089 | ||
Yandex NV, A Shares(1) | 2,813 | 57,948 | ||
208,087 | ||||
Singapore — 1.1% | ||||
SIIC Environment Holdings Ltd.(1) | 118,800 | 58,662 | ||
South Africa — 3.8% | ||||
Capitec Bank Holdings Ltd. | 1,711 | 64,775 | ||
Discovery Holdings Ltd. | 4,420 | 33,807 | ||
Foschini Group Ltd. (The) | 4,427 | 39,436 | ||
Sappi Ltd.(1) | 11,777 | 55,250 | ||
193,268 | ||||
South Korea — 15.8% | ||||
CJ Korea Express Corp.(1) | 309 | 55,484 | ||
Cosmax, Inc. | 568 | 74,348 | ||
Duk San Neolux Co. Ltd.(1) | 2,612 | 55,010 | ||
GS Retail Co. Ltd. | 1,501 | 66,624 | ||
Humedix Co. Ltd. | 1,161 | 47,539 | ||
Hyundai Department Store Co. Ltd. | 338 | 37,578 | ||
Hyundai Marine & Fire Insurance Co. Ltd. | 1,348 | 35,742 | ||
Hyundai Wia Corp. | 416 | 32,322 | ||
Innocean Worldwide, Inc. | 1,081 | 80,544 | ||
JoyCity Corp.(1) | 2,457 | 58,446 | ||
Jusung Engineering Co. Ltd.(1) | 7,403 | 51,432 | ||
Kumho Petrochemical Co. Ltd. | 975 | 52,194 | ||
Lutronic Corp. | 1,217 | 45,339 | ||
Medy-Tox, Inc. | 159 | 58,568 | ||
Orion Corp. | 62 | 50,462 | ||
801,632 | ||||
Taiwan — 13.3% | ||||
Egis Technology, Inc.(1) | 11,000 | 47,727 | ||
Feng TAY Enterprise Co. Ltd. | 10,000 | 41,855 | ||
Green Seal Holding Ltd. | 16,000 | 76,290 | ||
Hermes Microvision, Inc. | 2,000 | 70,832 | ||
Himax Technologies, Inc. ADR | 5,303 | 52,374 | ||
Hota Industrial Manufacturing Co. Ltd. | 15,000 | 70,832 | ||
Nien Made Enterprise Co. Ltd.(1) | 7,000 | 64,178 | ||
PChome Online, Inc. | 6,000 | 71,752 | ||
Taiwan Paiho Ltd. | 19,000 | 51,443 | ||
Tung Thih Electronic Co. Ltd. | 5,000 | 69,912 | ||
Vanguard International Semiconductor Corp. | 34,000 | 55,776 | ||
672,971 |
7
Shares | Value | |||
Thailand — 9.7% | ||||
Chularat Hospital PCL | 352,300 | $ | 28,598 | |
Digital Telecommunications Infrastructure Fund | 122,300 | 48,954 | ||
KCE Electronics PCL | 28,600 | 65,046 | ||
Minor International PCL | 68,000 | 74,710 | ||
Muangthai Leasing PCL | 91,000 | 51,199 | ||
Sino-Thai Engineering & Construction PCL | 78,700 | 50,668 | ||
Srisawad Power 1979 PCL | 62,935 | 74,870 | ||
Thai Oil PCL | 33,800 | 59,605 | ||
Thai Union Group PCL | 57,700 | 35,694 | ||
489,344 | ||||
Turkey — 1.9% | ||||
TAV Havalimanlari Holding AS | 4,702 | 24,114 | ||
Tofas Turk Otomobil Fabrikasi AS | 4,774 | 35,804 | ||
Ulker Biskuvi Sanayi AS | 5,083 | 36,744 | ||
96,662 | ||||
United Kingdom — 2.0% | ||||
Petra Diamonds Ltd. | 32,156 | 54,025 | ||
Tullow Oil plc(1) | 14,348 | 47,900 | ||
101,925 | ||||
TOTAL COMMON STOCKS (Cost $4,543,602) | 4,581,103 | |||
EXCHANGE-TRADED FUNDS — 9.1% | ||||
iShares MSCI India Small-Cap ETF | 8,248 | 260,967 | ||
iShares MSCI Emerging Markets Small-Cap ETF | 4,994 | 202,307 | ||
TOTAL EXCHANGE-TRADED FUNDS (Cost $449,396) | 463,274 | |||
TEMPORARY CASH INVESTMENTS — 2.2% | ||||
State Street Institutional Liquid Reserves Fund, Premier Class (Cost $111,502) | 111,502 | 111,502 | ||
TOTAL INVESTMENT SECURITIES — 101.8% (Cost $5,104,500) | 5,155,879 | |||
OTHER ASSETS AND LIABILITIES — (1.8)% | (91,990) | |||
TOTAL NET ASSETS — 100.0% | $ | 5,063,889 |
8
MARKET SECTOR DIVERSIFICATION | ||
(as a % of net assets) | ||
Consumer Discretionary | 26.3 | % |
Information Technology | 14.2 | % |
Consumer Staples | 12.1 | % |
Financials | 10.9 | % |
Industrials | 7.7 | % |
Materials | 6.8 | % |
Health Care | 6.4 | % |
Utilities | 3.0 | % |
Energy | 2.1 | % |
Telecommunication Services | 1.0 | % |
Exchange-Traded Funds | 9.1 | % |
Cash and Equivalents* | 0.4 | % |
*Includes temporary cash investments and other assets and liabilities.
NOTES TO SCHEDULE OF INVESTMENTS | ||
ADR | - | American Depositary Receipt |
GDR | - | Global Depositary Receipt |
(1) | Non-income producing. |
See Notes to Financial Statements.
9
Statement of Assets and Liabilities |
MAY 31, 2016 (UNAUDITED) | |||
Assets | |||
Investment securities, at value (cost of $5,104,500) | $ | 5,155,879 | |
Foreign currency holdings, at value (cost of $1,076) | 1,077 | ||
Receivable for investments sold | 107,900 | ||
Receivable for capital shares sold | 125 | ||
Dividends and interest receivable | 11,454 | ||
5,276,435 | |||
Liabilities | |||
Payable for investments purchased | 204,752 | ||
Accrued management fees | 6,662 | ||
Distribution and service fees payable | 1,132 | ||
212,546 | |||
Net Assets | $ | 5,063,889 | |
Net Assets Consist of: | |||
Capital (par value and paid-in surplus) | $ | 5,095,238 | |
Undistributed net investment income | 10,636 | ||
Accumulated net realized loss | (93,261 | ) | |
Net unrealized appreciation | 51,276 | ||
$ | 5,063,889 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | ||||
Investor Class, $0.01 Par Value | $2,081,996 | 209,343 | $9.95 | |||
Institutional Class, $0.01 Par Value | $596,895 | 60,000 | $9.95 | |||
A Class, $0.01 Par Value | $994,165 | 100,000 | $9.94* | |||
C Class, $0.01 Par Value | $993,065 | 100,000 | $9.93 | |||
R Class, $0.01 Par Value | $198,759 | 20,000 | $9.94 | |||
R6 Class, $0.01 Par Value | $199,009 | 20,000 | $9.95 |
*Maximum offering price $10.55 (net asset value divided by 0.9425).
See Notes to Financial Statements.
10
Statement of Operations |
FOR THE PERIOD ENDED MAY 31, 2016 (UNAUDITED)(1) | |||
Investment Income (Loss) | |||
Income: | |||
Dividends (net of foreign taxes withheld of $1,649) | $ | 24,230 | |
Interest | 116 | ||
24,346 | |||
Expenses: | |||
Management fees | 11,701 | ||
Distribution and service fees: | |||
A Class | 370 | ||
C Class | 1,480 | ||
R Class | 148 | ||
Directors' fees and expenses | 11 | ||
13,710 | |||
Net investment income (loss) | 10,636 | ||
Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investment transactions | (83,812 | ) | |
Foreign currency transactions | (9,449 | ) | |
(93,261 | ) | ||
Change in net unrealized appreciation (depreciation) on: | |||
Investments | 51,379 | ||
Translation of assets and liabilities in foreign currencies | (103 | ) | |
51,276 | |||
Net realized and unrealized gain (loss) | (41,985 | ) | |
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | (31,349 | ) |
(1) | April 7, 2016 (fund inception) through May 31, 2016. |
See Notes to Financial Statements.
11
Statement of Changes in Net Assets |
PERIOD ENDED MAY 31, 2016 (UNAUDITED)(1) | |||
Increase (Decrease) in Net Assets | |||
Operations | |||
Net investment income (loss) | $ | 10,636 | |
Net realized gain (loss) | (93,261 | ) | |
Change in net unrealized appreciation (depreciation) | 51,276 | ||
Net increase (decrease) in net assets resulting from operations | (31,349 | ) | |
Capital Share Transactions | |||
Net increase (decrease) in net assets from capital share transactions (Note 5) | 5,095,238 | ||
Net increase (decrease) in net assets | 5,063,889 | ||
Net Assets | |||
End of period | $ | 5,063,889 | |
Undistributed net investment income | $ | 10,636 |
(1) | April 7, 2016 (fund inception) through May 31, 2016. |
See Notes to Financial Statements.
12
Notes to Financial Statements |
MAY 31, 2016 (UNAUDITED)
1. Organization
American Century World Mutual 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. Emerging Markets Small Cap Fund (the fund) is one fund in a series issued by the corporation. The fund’s investment objective is to seek capital growth.
The fund offers the Investor Class, the Institutional Class, the A Class, the C Class, the R Class and the R6 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. The share classes differ principally in their respective sales charges and distribution and shareholder servicing expenses and arrangements. The Institutional Class and R6 Class shareholders do not require the same level of shareholder and administrative services from American Century Investment Management, Inc. (ACIM) (the investment advisor) as shareholders of other classes. In addition, financial intermediaries do not receive any service, distribution or administrative fees for the R6 Class. As a result, the Institutional Class and R6 Class are charged lower unified management fees. All classes of the fund commenced sale on April 7, 2016, the fund’s inception date.
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.
13
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 ACIM has determined are creditworthy pursuant to criteria adopted by the Board of Directors. The fund requires that the collateral, represented by securities, received in a repurchase transaction be transferred to the custodian in a manner sufficient to enable the fund to obtain those securities in the event of a default under the repurchase agreement. ACIM monitors, on a daily basis, the securities transferred to ensure the value, including accrued interest, of the securities under each repurchase agreement is equal to or greater than amounts owed to the fund under each repurchase agreement.
Joint Trading Account — Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the fund, along with certain other funds in the American Century Investments family of funds, may transfer uninvested cash balances into a joint trading account. These balances are invested in one or more repurchase agreements that are collateralized by U.S. Treasury or Agency obligations.
Income Tax Status — It is the fund’s policy to distribute substantially all net investment income and net realized gains to shareholders and to otherwise qualify as a regulated investment company under provisions of the Internal Revenue Code. Accordingly, no provision has been made for income taxes. The fund files U.S. federal, state, local and non-U.S. tax returns as applicable. The fund's tax returns are subject to examination by the relevant taxing authority until expiration of the applicable statute of limitations, which is generally three years from the date of filing but can be longer in certain jurisdictions. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination and for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Multiple Class — All shares of the fund represent an equal pro rata interest in the net assets of the class to which such shares belong, and have identical voting, dividend, liquidation and other rights and the same terms and conditions, except for class specific expenses and exclusive rights to vote on matters affecting only individual classes. Income, non-class specific expenses, and realized and unrealized capital gains and losses of the fund are allocated to each class of shares based on their relative net assets.
Distributions to Shareholders — Distributions from net investment income and net realized gains, if any, are generally declared and paid annually. The fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code, in all events in a manner consistent with provisions of the 1940 Act.
14
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. ACIM owns 98% 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, 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 annual management fee is 1.60% for the Investor Class, A Class, C Class and R Class, 1.40% for the Institutional Class and 1.25% for the R6 Class.
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 April 7, 2016 (fund inception) through May 31, 2016 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.
Acquired Fund Fees and Expenses — The fund may invest in mutual funds, exchange-traded funds, and business development companies (the acquired funds). The fund will indirectly realize its pro rata share of the fees and expenses of the acquired funds in which it invests. These indirect fees and expenses are not paid out of the fund's assets but are reflected in the return realized by the fund on its investment in the acquired funds.
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 significant interfund transactions during the period.
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the period April 7, 2016 (fund inception) through May 31, 2016 were $5,714,826 and $638,016, respectively.
15
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Period ended May 31, 2016(1) | |||||
Shares | Amount | ||||
Investor Class/Shares Authorized | 50,000,000 | ||||
Sold | 209,343 | $ | 2,095,238 | ||
Institutional Class/Shares Authorized | 50,000,000 | ||||
Sold | 60,000 | 600,000 | |||
A Class/Shares Authorized | 50,000,000 | ||||
Sold | 100,000 | 1,000,000 | |||
C Class/Shares Authorized | 50,000,000 | ||||
Sold | 100,000 | 1,000,000 | |||
R Class/Shares Authorized | 50,000,000 | ||||
Sold | 20,000 | 200,000 | |||
R6 Class/Shares Authorized | 50,000,000 | ||||
Sold | 20,000 | 200,000 | |||
Net increase (decrease) | 509,343 | $ | 5,095,238 |
(1) | April 7, 2016 (fund inception) through May 31, 2016. |
6. Fair Value Measurements
The fund’s investments valuation process is based on several considerations and may use multiple inputs to determine the fair value of the investments held by the fund. In conformity with accounting principles generally accepted in the United States of America, the inputs used to determine a valuation are classified into three broad levels.
• | Level 1 valuation inputs consist of unadjusted quoted prices in an active market for identical investments. |
• | Level 2 valuation inputs consist of direct or indirect observable market data (including quoted prices for comparable investments, evaluations of subsequent market events, interest rates, prepayment speeds, credit risk, etc.). These inputs also consist of quoted prices for identical investments initially expressed in local currencies that are adjusted through translation into U.S. dollars. |
• | Level 3 valuation inputs consist of unobservable data (including a fund’s own assumptions). |
The level classification is based on the lowest level input that is significant to the fair valuation measurement. The valuation inputs are not necessarily an indication of the risks associated with investing in these securities or other financial instruments. There were no significant transfers between levels during the period.
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 | ||||||||
China | $ | 237,940 | $ | 560,332 | — | |||
Russia | 57,948 | 150,139 | — | |||||
Taiwan | 52,374 | 620,597 | — | |||||
Other Countries | — | 2,901,773 | — | |||||
Exchange-Traded Funds | 463,274 | — | — | |||||
Temporary Cash Investments | 111,502 | — | — | |||||
$ | 923,038 | $ | 4,232,841 | — |
16
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 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.
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 May 31, 2016, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $ | 5,104,500 | |
Gross tax appreciation of investments | $ | 204,057 | |
Gross tax depreciation of investments | (152,678 | ) | |
Net tax appreciation (depreciation) of investments | $ | 51,379 |
The cost of investments for federal income tax purposes was the same as the cost for financial reporting purposes.
17
Financial Highlights |
For a Share Outstanding Throughout the Period Indicated | ||||||||||||
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 | 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 | ||||||||||||
2016(3) | $10.00 | 0.02 | (0.07) | (0.05) | $9.95 | (0.50)% | 1.60%(4) | 1.65%(4) | 13% | $2,082 | ||
Institutional Class | ||||||||||||
2016(3) | $10.00 | 0.03 | (0.08) | (0.05) | $9.95 | (0.50)% | 1.40%(4) | 1.85%(4) | 13% | $597 | ||
A Class | ||||||||||||
2016(3) | $10.00 | 0.02 | (0.08) | (0.06) | $9.94 | (0.60)% | 1.85%(4) | 1.40%(4) | 13% | $994 | ||
C Class | ||||||||||||
2016(3) | $10.00 | 0.01 | (0.08) | (0.07) | $9.93 | (0.70)% | 2.60%(4) | 0.65%(4) | 13% | $993 | ||
R Class | ||||||||||||
2016(3) | $10.00 | 0.02 | (0.08) | (0.06) | $9.94 | (0.60)% | 2.10%(4) | 1.15%(4) | 13% | $199 | ||
R6 Class | ||||||||||||
2016(3) | $10.00 | 0.03 | (0.08) | (0.05) | $9.95 | (0.50)% | 1.25%(4) | 2.00%(4) | 13% | $199 |
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) | April 7, 2016 (fund inception) through May 31, 2016 (unaudited). |
(4) | Annualized. |
See Notes to Financial Statements.
Approval of Management Agreement |
The Fund’s Board of Directors unanimously approved the initial management agreement pursuant to which American Century Investment Management, Inc. (the “Advisor”) acts as the investment advisor for the Fund. Under Section 15(c) of the Investment Company Act of 1940, new contracts for investment advisory services are required to be approved by a majority of a fund’s independent directors and to be evaluated on an annual basis thereafter.
In advance of the Board’s consideration, the Advisor provided information concerning the fund. The materials circulated and the discussions held detailed the investment objective and strategy proposed to be utilized by the Advisor, the Fund’s characteristics and key attributes, the rationale for launching the Fund, the experience of the staff designated to manage the Fund, the proposed pricing, and the markets in which the Fund would be sold. The information considered and the discussions held included, but were not limited to:
• | the nature, extent, and quality of investment management, shareholder services, and other services to be provided to the Fund; |
• | the wide range of other programs and services to be provided to the Fund and its shareholders on a routine and non-routine basis; |
• | the Fund’s proposed investment objective and strategy, including a discussion of the Fund’s anticipated investment performance and proposed benchmark; |
• | the cost of owning the Fund compared to the cost of owning similar funds; |
• | the compliance policies, procedures, and regulatory experience of the Fund’s service providers; and |
• | any collateral benefits derived by the Advisor from the management of the Fund. |
American Century Investments’ funds utilize a unified management fee structure. Under the unified fee structure, the Advisor is responsible for providing all investment advisory, custody, audit, administrative, compliance, recordkeeping, marketing and shareholder services, or arranging and supervising third parties to provide such services. By contrast, most other funds are charged a variety of fees, including an investment advisory fee, a transfer agency fee, an administrative fee, distribution charges and other expenses. Other than their investment advisory fees and Rule 12b-1 distribution fees, all other components of the total fees charged by these other funds may be increased without shareholder approval. The Advisor and Board believe the unified fee structure is a benefit to fund shareholders because it clearly discloses to shareholders the cost of owning fund shares, and because the unified fee cannot be increased without a vote of Fund shareholders, it shifts to the Advisor the risk of increased costs of operating the Fund and provides a direct incentive to minimize administrative inefficiencies. Part of the Board’s analysis of fee levels involves reviewing certain evaluative data compiled by an independent provider and comparing the Fund’s unified fee to the total expense ratio of peer funds.
When considering the approval of the management agreement for the Fund, the independent Directors considered the entrepreneurial risk that the Advisor assumes in launching a new fund. In particular, they considered the effect of the unified management fee structure and the fact that the Advisor will assume a substantial part of the start-up costs of the Fund and the risk that the Fund will not grow to a level that will become profitable to the Advisor. The Board considered the position that the Fund would take in the lineup of the American Century Investments’ family of funds and the benefits to shareholders of existing funds of the broadened product offering. Finally, while not specifically discussed, but important in the decision to approve the management agreement, is the Directors’ familiarity with the Advisor. The Board oversees and evaluates on a continuous basis the nature and quality of all services the Advisor performs for other funds within the American Century Investments’ complex. As such, the Directors have confidence in the Advisor’s integrity and competence in providing services to the Fund.
20
The independent Directors considered all of the information provided by the Advisor and the independent Directors’ independent counsel in connection with the approval. They determined that the information was sufficient for them to evaluate the management agreement for the Fund. In connection with their review, the Directors did not identify any single factor as being all-important or controlling, and each Director may have attributed different levels of importance to different factors. The independent Directors concluded that the overall arrangements between the Fund and the Advisor, as provided in the management agreement, were fair and reasonable in light of the services to be provided and should be approved.
21
Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain IRAs 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.
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.
Distributions you receive from 403(b), 457 and qualified plans are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
A description of the policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund is available without charge, upon request, by calling 1-800-345-2021. It is also available on the "About Us" page of American Century Investments’ website at americancentury.com and on the Securities and Exchange Commission’s website at sec.gov. Information regarding how the investment advisor voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the "About Us" page at americancentury.com. It is also available at sec.gov.
Quarterly Portfolio Disclosure
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-Q. The fund’s Forms N-Q are available on the SEC’s website at sec.gov, and may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The fund also makes its complete schedule of portfolio holdings for the most recent quarter of its fiscal year available on its
website at americancentury.com and, upon request, by calling 1-800-345-2021.
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 World Mutual 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. | ||
©2016 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-89426 1607 |
![](https://capedge.com/proxy/N-CSRS/0000872825-16-000153/acihorizblkb99.jpg)
Semiannual Report | |
May 31, 2016 | |
Focused International Growth Fund |
Table of Contents |
Any opinions expressed in this report reflect those of the author as of the date of the report, and do not necessarily represent the opinions of American Century Investments® or any other person in the American Century Investments organization. Any such opinions are subject to change at any time based upon market or other conditions and American Century Investments disclaims any responsibility to update such opinions. These opinions may not be relied upon as investment advice and, because investment decisions made by American Century Investments funds are based on numerous factors, may not be relied upon as an indication of trading intent on behalf of any American Century Investments fund. Security examples are used for representational purposes only and are not intended as recommendations to purchase or sell securities. Performance information for comparative indices and securities is provided to American Century Investments by third party vendors. To the best of American Century Investments’ knowledge, such information is accurate at the time of printing.
President’s Letter |
![]() | Dear Investor: Thank you for reviewing this semiannual report for the approximately two-month reporting period from the fund’s inception to May 31, 2016. It provides a macroeconomic and financial market overview (below), followed by a schedule of fund investments and other financial information. For additional commentary and information on fund performance, key factors that affected asset returns, and other insights regarding the investment markets, we encourage you to visit our website, americancentury.com. |
Jonathan Thomas |
“Risk-on” Rebound From Early 2016 Sell-off Continued, Except in Emerging Markets (EM)
Global equity market returns for April and May of 2016 generally reflected a continued “risk-on” rebound from the sharp “risk-off” sell-off that dragged these markets down during the first six weeks of the year. Riskier asset classes such as stocks and high-yield bonds plunged at the start of the year on concerns about China’s slowing economic growth, its possible contagion to the global economy, and an energy price collapse. Furthermore, the U.S. Federal Reserve (Fed) started to raise interest rates in December and projected four more rate hikes in 2016, which put additional pressure on commodity prices and EM.
These factors combined to drive down stock prices until mid-February, when the markets reversed, partly in response to indications that the global oil supply glut could be reduced. Oil prices started to rise, China stabilized, and stock markets rallied. Central bank stimulus also boosted the markets, with the Bank of Japan resorting to negative interest rates, the Fed holding rates steady while reducing its rate hike projections, and the European Central Bank announcing significant additional stimulus.
The positive momentum and sentiment created by these moves was generally sustained through April and May, producing positive returns for most equity indices. The notable exception was EM. In May, the Fed indicated that it might raise interest rates again this summer. Anticipation of another Fed rate hike, along with continued economic and political struggles in non-U.S. economies, pushed the U.S. dollar higher and EM stock indices lower.
Looking ahead, we expect more market volatility this year due to global economic and political headwinds, uncertainty surrounding future Fed moves, and the U.S. presidential election. This could present both challenges and opportunities for active investment managers. In this environment, we continue to believe in a disciplined, diversified, risk-aware investment approach, using professionally managed portfolios to meet financial goals. We appreciate your trust in us.
Sincerely,
![](https://capedge.com/proxy/N-CSRS/0000872825-16-000153/jonathanthomassig.jpg)
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
2
Fund Characteristics |
MAY 31, 2016 | |
Top Ten Holdings | % of net assets |
Reckitt Benckiser Group plc | 4.0% |
Pandora A/S | 3.7% |
AIA Group Ltd. | 3.6% |
Ryohin Keikaku Co. Ltd. | 3.5% |
NXP Semiconductors NV | 3.3% |
Shire plc | 3.3% |
Tencent Holdings Ltd. | 3.3% |
Worldpay Group plc | 3.3% |
Roche Holding AG | 3.2% |
ORIX Corp. | 3.0% |
Types of Investments in Portfolio | % of net assets |
Common Stocks | 98.3% |
Temporary Cash Investments | 2.1% |
Other Assets and Liabilities | (0.4)% |
Investments by Country | % of net assets |
United Kingdom | 27.7% |
Japan | 11.9% |
France | 9.0% |
Germany | 5.9% |
China | 4.9% |
Mexico | 4.3% |
Indonesia | 3.8% |
Denmark | 3.7% |
Hong Kong | 3.6% |
Netherlands | 3.3% |
Switzerland | 3.2% |
Sweden | 2.8% |
Italy | 2.6% |
Portugal | 2.5% |
Austria | 2.3% |
South Korea | 2.2% |
Other Countries | 4.6% |
Cash and Equivalents* | 1.7% |
*Includes temporary cash investments and other assets and liabilities.
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 December 1, 2015 to May 31, 2016 (except as noted).
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 Institutional 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 12/1/15 | Ending Account Value 5/31/16 | Expenses Paid During Period(1) 12/1/15 - 5/31/16 | Annualized Expense Ratio(1) | |
Actual | ||||
Investor Class | $1,000 | $1,026.00(2) | $2.18(3) | 1.23% |
Institutional Class | $1,000 | $1,026.00(2) | $1.82(3) | 1.03% |
A Class | $1,000 | $1,025.00(2) | $2.62(3) | 1.48% |
C Class | $1,000 | $1,024.00(2) | $3.95(3) | 2.23% |
R Class | $1,000 | $1,025.00(2) | $3.06(3) | 1.73% |
R6 Class | $1,000 | $1,026.00(2) | $1.56(3) | 0.88% |
Hypothetical | ||||
Investor Class | $1,000 | $1,018.85(4) | $6.21(4) | 1.23% |
Institutional Class | $1,000 | $1,019.85(4) | $5.20(4) | 1.03% |
A Class | $1,000 | $1,017.60(4) | $7.47(4) | 1.48% |
C Class | $1,000 | $1,013.85(4) | $11.23(4) | 2.23% |
R Class | $1,000 | $1,016.35(4) | $8.72(4) | 1.73% |
R6 Class | $1,000 | $1,020.60(4) | $4.45(4) | 0.88% |
(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 183, the number of days in the most recent fiscal half-year, divided by 366, to reflect the one-half year period. |
(2) | Ending account value based on actual return from March 29, 2016 (fund inception) through May 31, 2016. |
(3) | 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 64, the number of days in the period from March 29, 2016 (fund inception) through May 31, 2016, divided by 366 to reflect the period. Had the class been available for the full period, the expenses paid during the period would have been higher. |
(4) | Ending account value and expenses paid during the period assumes the class had been available throughout the entire period and are calculated using the class's annualized expense ratio listed in the table above. |
5
Schedule of Investments |
MAY 31, 2016 (UNAUDITED)
Shares | Value | |||
COMMON STOCKS — 98.3% | ||||
Austria — 2.3% | ||||
Erste Group Bank AG(1) | 4,430 | $ | 118,543 | |
Canada — 1.9% | ||||
Canadian Pacific Railway Ltd. | 760 | 98,362 | ||
China — 4.9% | ||||
Baidu, Inc. ADR(1) | 450 | 80,343 | ||
Tencent Holdings Ltd. | 7,700 | 171,722 | ||
252,065 | ||||
Denmark — 3.7% | ||||
Pandora A/S | 1,290 | 191,724 | ||
France — 9.0% | ||||
Accor SA | 1,430 | 62,220 | ||
Cap Gemini SA | 1,270 | 121,100 | ||
TOTAL SA | 2,930 | 142,383 | ||
Valeo SA | 950 | 143,384 | ||
469,087 | ||||
Germany — 5.9% | ||||
Fresenius Medical Care AG & Co. KGaA | 1,300 | 112,823 | ||
Symrise AG | 1,410 | 88,466 | ||
Zalando SE(1) | 3,670 | 107,578 | ||
308,867 | ||||
Hong Kong — 3.6% | ||||
AIA Group Ltd. | 32,000 | 187,163 | ||
India — 1.7% | ||||
HDFC Bank Ltd. ADR | 1,350 | 86,886 | ||
Indonesia — 3.8% | ||||
Bank Mandiri Persero Tbk PT | 115,800 | 76,508 | ||
Matahari Department Store Tbk PT | 85,300 | 118,489 | ||
194,997 | ||||
Ireland — 1.0% | ||||
Ryanair Holdings plc ADR | 622 | 54,363 | ||
Italy — 2.6% | ||||
Intesa Sanpaolo SpA | 53,320 | 136,926 | ||
Japan — 11.9% | ||||
Calbee, Inc. | 2,600 | 96,031 | ||
Kubota Corp. | 7,400 | 108,960 | ||
ORIX Corp. | 11,300 | 157,150 | ||
Ryohin Keikaku Co. Ltd. | 800 | 184,440 | ||
Suntory Beverage & Food Ltd. | 1,500 | 70,845 | ||
617,426 | ||||
Mexico — 4.3% | ||||
Alsea SAB de CV | 38,060 | 144,224 | ||
Cemex SAB de CV ADR(1) | 12,313 | 78,311 | ||
222,535 | ||||
Netherlands — 3.3% | ||||
NXP Semiconductors NV(1) | 1,840 | 173,862 |
6
Shares | Value | |||
Portugal — 2.5% | ||||
Jeronimo Martins SGPS SA | 8,090 | $ | 131,060 | |
South Korea — 2.2% | ||||
Amorepacific Corp. | 330 | 115,603 | ||
Sweden — 2.8% | ||||
Lundin Petroleum AB(1) | 8,160 | 146,348 | ||
Switzerland — 3.2% | ||||
Roche Holding AG | 640 | 167,984 | ||
United Kingdom — 27.7% | ||||
Admiral Group plc | 3,000 | 85,510 | ||
Ashtead Group plc | 8,100 | 114,501 | ||
Associated British Foods plc | 1,210 | 51,594 | ||
Auto Trader Group plc | 22,890 | 130,290 | ||
Carnival plc | 2,190 | 108,130 | ||
London Stock Exchange Group plc | 3,390 | 134,286 | ||
Reckitt Benckiser Group plc | 2,090 | 208,110 | ||
Shire plc | 2,790 | 172,142 | ||
St. James's Place plc | 8,240 | 110,691 | ||
Wolseley plc | 2,630 | 154,309 | ||
Worldpay Group plc(1) | 42,160 | 169,204 | ||
1,438,767 | ||||
TOTAL COMMON STOCKS (Cost $4,996,772) | 5,112,568 | |||
TEMPORARY CASH INVESTMENTS — 2.1% | ||||
State Street Institutional Liquid Reserves Fund, Premier Class (Cost $108,013) | 108,013 | 108,013 | ||
TOTAL INVESTMENT SECURITIES — 100.4% (Cost $5,104,785) | 5,220,581 | |||
OTHER ASSETS AND LIABILITIES — (0.4)% | (21,282) | |||
TOTAL NET ASSETS — 100.0% | $ | 5,199,299 |
MARKET SECTOR DIVERSIFICATION | ||
(as a % of net assets) | ||
Financials | 21.0 | % |
Consumer Discretionary | 20.5 | % |
Information Technology | 16.3 | % |
Consumer Staples | 12.9 | % |
Industrials | 10.2 | % |
Health Care | 8.7 | % |
Energy | 5.5 | % |
Materials | 3.2 | % |
Cash and Equivalents* | 1.7 | % |
*Includes temporary cash investments and other assets and liabilities.
NOTES TO SCHEDULE OF INVESTMENTS | ||
ADR | - | American Depositary Receipt |
(1) | Non-income producing. |
See Notes to Financial Statements.
7
Statement of Assets and Liabilities |
MAY 31, 2016 (UNAUDITED) | |||
Assets | |||
Investment securities, at value (cost of $5,104,785) | $ | 5,220,581 | |
Foreign currency holdings, at value (cost of $11,028) | 10,931 | ||
Dividends and interest receivable | 9,993 | ||
5,241,505 | |||
Liabilities | |||
Payable for investments purchased | 35,868 | ||
Accrued management fees | 5,180 | ||
Distribution and service fees payable | 1,158 | ||
42,206 | |||
Net Assets | $ | 5,199,299 | |
Net Assets Consist of: | |||
Capital (par value and paid-in surplus) | $ | 5,072,321 | |
Undistributed net investment income | 22,904 | ||
Accumulated net realized loss | (11,609 | ) | |
Net unrealized appreciation | 115,683 | ||
$ | 5,199,299 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | ||||
Investor Class, $0.01 Par Value | $2,124,528 | 207,154 | $10.26 | |||
Institutional Class, $0.01 Par Value | $615,556 | 60,000 | $10.26 | |||
A Class, $0.01 Par Value | $1,025,132 | 100,000 | $10.25* | |||
C Class, $0.01 Par Value | $1,023,810 | 100,000 | $10.24 | |||
R Class, $0.01 Par Value | $205,035 | 20,009 | $10.25 | |||
R6 Class, $0.01 Par Value | $205,238 | 20,000 | $10.26 |
*Maximum offering price $10.88 (net asset value divided by 0.9425).
See Notes to Financial Statements.
8
Statement of Operations |
FOR THE PERIOD ENDED MAY 31, 2016 (UNAUDITED)(1) | |||
Investment Income (Loss) | |||
Income: | |||
Dividends (net of foreign taxes withheld of $3,686) | $ | 35,660 | |
Interest | 97 | ||
35,757 | |||
Expenses: | |||
Management fees | 10,476 | ||
Distribution and service fees: | |||
A Class | 436 | ||
C Class | 1,741 | ||
R Class | 174 | ||
Directors' fees and expenses | 26 | ||
12,853 | |||
Net investment income (loss) | 22,904 | ||
Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investment transactions | (14,764 | ) | |
Foreign currency transactions | 3,155 | ||
(11,609 | ) | ||
Change in net unrealized appreciation (depreciation) on: | |||
Investments | 115,796 | ||
Translation of assets and liabilities in foreign currencies | (113 | ) | |
115,683 | |||
Net realized and unrealized gain (loss) | 104,074 | ||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 126,978 |
(1) | March 29, 2016 (fund inception) through May 31, 2016. |
See Notes to Financial Statements.
9
Statement of Changes in Net Assets |
PERIOD ENDED MAY 31, 2016 (UNAUDITED)(1) | |||
Increase (Decrease) in Net Assets | |||
Operations | |||
Net investment income (loss) | $ | 22,904 | |
Net realized gain (loss) | (11,609 | ) | |
Change in net unrealized appreciation (depreciation) | 115,683 | ||
Net increase (decrease) in net assets resulting from operations | 126,978 | ||
Capital Share Transactions | |||
Net increase (decrease) in net assets from capital share transactions (Note 5) | 5,072,321 | ||
Net increase (decrease) in net assets | 5,199,299 | ||
Net Assets | |||
End of period | $ | 5,199,299 | |
Undistributed net investment income | $ | 22,904 |
(1) | March 29, 2016 (fund inception) through May 31, 2016. |
See Notes to Financial Statements.
10
Notes to Financial Statements |
MAY 31, 2016 (UNAUDITED)
1. Organization
American Century World Mutual Funds, Inc. (the corporation) is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company and is organized as a Maryland corporation. Focused International Growth Fund (the fund) is one fund in a series issued by the corporation. The fund's investment objective is to seek capital growth.
The fund offers the Investor Class, the Institutional Class, the A Class, the C Class, the R Class and the R6 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. The share classes differ principally in their respective sales charges and distribution and shareholder servicing expenses and arrangements. The Institutional Class and R6 Class shareholders do not require the same level of shareholder and administrative services from American Century Investment Management, Inc. (ACIM) (the investment advisor) as shareholders of other classes. In addition, financial intermediaries do not receive any service, distribution or administrative fees for the R6 Class. As a result, the Institutional Class and R6 Class are charged lower unified management fees. All classes of the fund commenced sale on March 29, 2016, the fund's inception date.
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 ACIM has determined are creditworthy pursuant to criteria adopted by the Board of Directors. The fund requires that the collateral, represented by securities, received in a repurchase transaction be transferred to the custodian in a manner sufficient to enable the fund to obtain those securities in the event of a default under the repurchase agreement. ACIM monitors, on a daily basis, the securities transferred to ensure the value, including accrued interest, of the securities under each repurchase agreement is equal to or greater than amounts owed to the fund under each repurchase agreement.
Joint Trading Account — Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the fund, along with certain other funds in the American Century Investments family of funds, may transfer uninvested cash balances into a joint trading account. These balances are invested in one or more repurchase agreements that are collateralized by U.S. Treasury or Agency obligations.
Income Tax Status — It is the fund’s policy to distribute substantially all net investment income and net realized gains to shareholders and to otherwise qualify as a regulated investment company under provisions of the Internal Revenue Code. Accordingly, no provision has been made for income taxes. The fund files U.S. federal, state, local and non-U.S. tax returns as applicable. The fund's tax returns are subject to examination by the relevant taxing authority until expiration of the applicable statute of limitations, which is generally three years from the date of filing but can be longer in certain jurisdictions. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination and for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Multiple Class — All shares of the fund represent an equal pro rata interest in the net assets of the class to which such shares belong, and have identical voting, dividend, liquidation and other rights and the same terms and conditions, except for class specific expenses and exclusive rights to vote on matters affecting only individual classes. Income, non-class specific expenses, and realized and unrealized capital gains and losses of the fund are allocated to each class of shares based on their relative net assets.
Distributions to Shareholders — Distributions from net investment income and net realized gains, if any, are generally declared and paid annually. The fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code, in all events in a manner consistent with provisions of the 1940 Act.
12
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. ACIM owns 99% 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, 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 annual management fee is 1.23% for the Investor Class, A Class, C Class and R Class, 1.03% for the Institutional Class and 0.88% for the R6 Class.
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 March 29, 2016 (fund inception) through May 31, 2016 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
significant interfund transactions during the period.
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the period March 29, 2016 (fund inception) through May 31, 2016 were $5,390,430 and $378,894, respectively.
13
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Period ended May 31, 2016(1) | |||||
Shares | Amount | ||||
Investor Class/Shares Authorized | 50,000,000 | ||||
Sold | 207,154 | $ | 2,072,225 | ||
Institutional Class/Shares Authorized | 50,000,000 | ||||
Sold | 60,000 | 600,000 | |||
A Class/Shares Authorized | 50,000,000 | ||||
Sold | 100,000 | 1,000,000 | |||
C Class/Shares Authorized | 50,000,000 | ||||
Sold | 100,000 | 1,000,000 | |||
R Class/Shares Authorized | 50,000,000 | ||||
Sold | 20,009 | 200,096 | |||
R6 Class/Shares Authorized | 50,000,000 | ||||
Sold | 20,000 | 200,000 | |||
Net increase (decrease) | 507,163 | $ | 5,072,321 |
(1) | March 29, 2016 (fund inception) through May 31, 2016. |
6. Fair Value Measurements
The fund’s investments valuation process is based on several considerations and may use multiple inputs to determine the fair value of the investments held by the fund. In conformity with accounting principles generally accepted in the United States of America, the inputs used to determine a valuation are classified into three broad levels.
• | Level 1 valuation inputs consist of unadjusted quoted prices in an active market for identical investments. |
• | Level 2 valuation inputs consist of direct or indirect observable market data (including quoted prices for comparable investments, evaluations of subsequent market events, interest rates, prepayment speeds, credit risk, etc.). These inputs also consist of quoted prices for identical investments initially expressed in local currencies that are adjusted through translation into U.S. dollars. |
• | Level 3 valuation inputs consist of unobservable data (including a fund’s own assumptions). |
The level classification is based on the lowest level input that is significant to the fair valuation measurement. The valuation inputs are not necessarily an indication of the risks associated with investing in these securities or other financial instruments. There were no significant transfers between levels during the period.
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 | ||||||||
China | $ | 80,343 | $ | 171,722 | — | |||
India | 86,886 | — | — | |||||
Ireland | 54,363 | — | — | |||||
Mexico | 78,311 | 144,224 | — | |||||
Netherlands | 173,862 | — | — | |||||
Other Countries | — | 4,322,857 | — | |||||
Temporary Cash Investments | 108,013 | — | — | |||||
$ | 581,778 | $ | 4,638,803 | — |
14
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 May 31, 2016, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $ | 5,104,829 | |
Gross tax appreciation of investments | $ | 204,775 | |
Gross tax depreciation of investments | (89,023 | ) | |
Net tax appreciation (depreciation) of investments | $ | 115,752 |
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 Period Indicated | ||||||||||||
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 | 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 | ||||||||||||
2016(3) | $10.00 | 0.05 | 0.21 | 0.26 | $10.26 | 2.60% | 1.23%(4) | 2.84%(4) | 7% | $2,125 | ||
Institutional Class | ||||||||||||
2016(3) | $10.00 | 0.05 | 0.21 | 0.26 | $10.26 | 2.60% | 1.03%(4) | 3.04%(4) | 7% | $616 | ||
A Class | ||||||||||||
2016(3) | $10.00 | 0.04 | 0.21 | 0.25 | $10.25 | 2.50% | 1.48%(4) | 2.59%(4) | 7% | $1,025 | ||
C Class | ||||||||||||
2016(3) | $10.00 | 0.03 | 0.21 | 0.24 | $10.24 | 2.40% | 2.23%(4) | 1.84%(4) | 7% | $1,024 | ||
R Class | ||||||||||||
2016(3) | $10.00 | 0.04 | 0.21 | 0.25 | $10.25 | 2.50% | 1.73%(4) | 2.34%(4) | 7% | $205 | ||
R6 Class | ||||||||||||
2016(3) | $10.00 | 0.06 | 0.20 | 0.26 | $10.26 | 2.60% | 0.88%(4) | 3.19%(4) | 7% | $205 |
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) | March 29, 2016 (fund inception) through May 31, 2016 (unaudited). |
(4) | Annualized. |
See Notes to Financial Statements.
Approval of Management Agreement |
The Fund’s Board of Directors unanimously approved the initial management agreement pursuant to which American Century Investment Management, Inc. (the “Advisor”) acts as the investment advisor for the Fund. Under Section 15(c) of the Investment Company Act of 1940, new contracts for investment advisory services are required to be approved by a majority of a fund’s independent directors and to be evaluated on an annual basis thereafter.
In advance of the Board’s consideration, the Advisor provided information concerning the fund. The materials circulated and the discussions held detailed the investment objective and strategy proposed to be utilized by the Advisor, the Fund’s characteristics and key attributes, the rationale for launching the Fund, the experience of the staff designated to manage the Fund, the proposed pricing, and the markets in which the Fund would be sold. The information considered and the discussions held included, but were not limited to:
• | the nature, extent, and quality of investment management, shareholder services, and other services to be provided to the Fund; |
• | the wide range of other programs and services to be provided to the Fund and its shareholders on a routine and non-routine basis; |
• | the Fund’s proposed investment objective and strategy, including a discussion of the Fund’s anticipated investment performance and proposed benchmark; |
• | the cost of owning the Fund compared to the cost of owning similar funds; |
• | the compliance policies, procedures, and regulatory experience of the Fund’s service providers; and |
• | any collateral benefits derived by the Advisor from the management of the Fund. |
American Century Investments’ funds utilize a unified management fee structure. Under the unified fee structure, the Advisor is responsible for providing all investment advisory, custody, audit, administrative, compliance, recordkeeping, marketing and shareholder services, or arranging and supervising third parties to provide such services. By contrast, most other funds are charged a variety of fees, including an investment advisory fee, a transfer agency fee, an administrative fee, distribution charges and other expenses. Other than their investment advisory fees and Rule 12b-1 distribution fees, all other components of the total fees charged by these other funds may be increased without shareholder approval. The Advisor and Board believe the unified fee structure is a benefit to fund shareholders because it clearly discloses to shareholders the cost of owning fund shares, and because the unified fee cannot be increased without a vote of Fund shareholders, it shifts to the Advisor the risk of increased costs of operating the Fund and provides a direct incentive to minimize administrative inefficiencies. Part of the Board’s analysis of fee levels involves reviewing certain evaluative data compiled by an independent provider and comparing the Fund’s unified fee to the total expense ratio of peer funds.
When considering the approval of the management agreement for the Fund, the independent Directors considered the entrepreneurial risk that the Advisor assumes in launching a new fund. In particular, they considered the effect of the unified management fee structure and the fact that the Advisor will assume a substantial part of the start-up costs of the Fund and the risk that the Fund will not grow to a level that will become profitable to the Advisor. The Board considered the position that the Fund would take in the lineup of the American Century Investments’ family of funds and the benefits to shareholders of existing funds of the broadened product offering. Finally, while not specifically discussed, but important in the decision to approve the management agreement, is the Directors’ familiarity with the Advisor. The Board oversees and evaluates on a continuous basis the nature and quality of all services the Advisor performs for other funds within the American Century Investments’ complex. As such, the Directors have confidence in the Advisor’s integrity and competence in providing services to the Fund.
17
The independent Directors considered all of the information provided by the Advisor and the independent Directors’ independent counsel in connection with the approval. They determined that the information was sufficient for them to evaluate the management agreement for the Fund. In connection with their review, the Directors did not identify any single factor as being all-important or controlling, and each Director may have attributed different levels of importance to different factors. The independent Directors concluded that the overall arrangements between the Fund and the Advisor, as provided in the management agreement, were fair and reasonable in light of the services to be provided and should be approved.
18
Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain IRAs 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.
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.
Distributions you receive from 403(b), 457 and qualified plans are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
A description of the policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund is available without charge, upon request, by calling 1-800-345-2021. It is also available on the "About Us" page of American Century Investments’ website at americancentury.com and on the Securities and Exchange Commission’s website at sec.gov. Information regarding how the investment advisor voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the "About Us" page at americancentury.com. It is also available at sec.gov.
Quarterly Portfolio Disclosure
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-Q. The fund’s Forms N-Q are available on the SEC’s website at sec.gov, and may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The fund also makes its complete schedule of portfolio holdings for the most recent quarter of its fiscal year available on its
website at americancentury.com and, upon request, by calling 1-800-345-2021.
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 World Mutual 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. | ||
©2016 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-89427 1607 |
![](https://capedge.com/proxy/N-CSRS/0000872825-16-000153/acihorizblkb99.jpg)
Semiannual Report | |
May 31, 2016 | |
Global Growth Fund |
Table of Contents |
Any opinions expressed in this report reflect those of the author as of the date of the report, and do not necessarily represent the opinions of American Century Investments® or any other person in the American Century Investments organization. Any such opinions are subject to change at any time based upon market or other conditions and American Century Investments disclaims any responsibility to update such opinions. These opinions may not be relied upon as investment advice and, because investment decisions made by American Century Investments funds are based on numerous factors, may not be relied upon as an indication of trading intent on behalf of any American Century Investments fund. Security examples are used for representational purposes only and are not intended as recommendations to purchase or sell securities. Performance information for comparative indices and securities is provided to American Century Investments by third party vendors. To the best of American Century Investments’ knowledge, such information is accurate at the time of printing.
President’s Letter |
![]() | Dear Investor: Thank you for reviewing this semiannual report for the six months ended May 31, 2016. It provides a macroeconomic and financial market overview (below), followed by a schedule of fund investments and other financial information. For additional commentary and information on fund performance, key factors that affected asset returns, and other insights regarding the investment markets, we encourage you to visit our website, americancentury.com. |
Jonathan Thomas |
Economic Growth Concerns and Central Bank Policies Triggered Market Volatility
Global macroeconomic events—in the form of recession fears and resulting central bank policy moves—triggered widespread market volatility. Stock index graphs of the six months look like a square root sign (√). From late December to mid-February, stock market indices declined sharply on a confluence of factors that carried over from last summer’s similar sell-off, including concerns about China’s slowing economic growth, its possible contagion to the global economy, an energy price collapse, and Chinese currency devaluations. Furthermore, the U.S. Federal Reserve (Fed) started to raise interest rates in December and projected four more rate hikes in 2016, which put additional pressure on commodity prices and emerging markets.
These factors combined to drive down stock prices and U.S. Treasury yields until mid-February, when the markets reversed, partly in response to indications that the global oil supply glut could be reduced. Oil prices started to rise, China stabilized, and stock markets rallied. Central bank stimulus governed the markets, with the Bank of Japan resorting to negative interest rates, the Fed holding rates steady while reducing its rate hike projections, and the European Central Bank announcing significant additional stimulus.
Modest broad market gains and losses for the reporting period do not capture its volatility, which generally pushed returns for bonds (and higher-yielding, more defensive stock sectors such as utilities and telecommunication services) ahead of broad stock returns. Also, the divergence between generally weaker global economic conditions and the relatively stable U.S. economy helped U.S. stocks generally outpace their non-U.S. counterparts.
Looking ahead, we expect more market volatility this year due to global economic and political headwinds, uncertainty surrounding future Fed moves, and the U.S. presidential election. This could present both challenges and opportunities for active investment managers. In this environment, we continue to believe in a disciplined, diversified, risk-aware investment approach, using professionally managed portfolios to meet financial goals. We appreciate your trust in us.
Sincerely,
![](https://capedge.com/proxy/N-CSRS/0000872825-16-000153/jonathanthomassig.jpg)
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
2
Fund Characteristics |
MAY 31, 2016 | |
Top Ten Holdings | % of net assets |
Alphabet, Inc.* | 3.8% |
Facebook, Inc., Class A | 3.0% |
Adobe Systems, Inc. | 2.6% |
Home Depot, Inc. (The) | 2.3% |
Roche Holding AG | 2.2% |
Cognizant Technology Solutions Corp., Class A | 2.0% |
Intercontinental Exchange, Inc. | 1.9% |
AIA Group Ltd. | 1.9% |
Celgene Corp. | 1.9% |
Tencent Holdings Ltd. | 1.8% |
*Includes all classes of the issuer held by the fund. | |
Types of Investments in Portfolio | % of net assets |
Domestic Common Stocks | 60.0% |
Foreign Common Stocks | 38.1% |
Total Common Stocks | 98.1% |
Temporary Cash Investments | 1.8% |
Other Assets and Liabilities | 0.1% |
Investments by Country | % of net assets |
United States | 60.0% |
United Kingdom | 7.1% |
France | 6.8% |
Switzerland | 3.7% |
Hong Kong | 2.7% |
Japan | 2.7% |
China | 2.5% |
Denmark | 2.3% |
Other Countries | 10.3% |
Cash and Equivalents** | 1.9% |
**Includes temporary cash investments and other assets and liabilities.
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 December 1, 2015 to May 31, 2016.
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 Institutional 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 12/1/15 | Ending Account Value 5/31/16 | Expenses Paid During Period(1) 12/1/15 - 5/31/16 | Annualized Expense Ratio(1) | |
Actual | ||||
Investor Class | $1,000 | $981.90 | $5.35 | 1.08% |
Institutional Class | $1,000 | $982.50 | $4.36 | 0.88% |
A Class | $1,000 | $980.30 | $6.58 | 1.33% |
C Class | $1,000 | $977.00 | $10.28 | 2.08% |
R Class | $1,000 | $979.30 | $7.82 | 1.58% |
R6 Class | $1,000 | $983.20 | $3.62 | 0.73% |
Hypothetical | ||||
Investor Class | $1,000 | $1,019.60 | $5.45 | 1.08% |
Institutional Class | $1,000 | $1,020.60 | $4.45 | 0.88% |
A Class | $1,000 | $1,018.35 | $6.71 | 1.33% |
C Class | $1,000 | $1,014.60 | $10.48 | 2.08% |
R Class | $1,000 | $1,017.10 | $7.97 | 1.58% |
R6 Class | $1,000 | $1,021.35 | $3.69 | 0.73% |
(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 183, the number of days in the most recent fiscal half-year, divided by 366, to reflect the one-half year period. |
5
Schedule of Investments |
MAY 31, 2016 (UNAUDITED)
Shares | Value | |||
COMMON STOCKS — 98.1% | ||||
Austria — 0.9% | ||||
Erste Group Bank AG(1) | 184,290 | $ | 4,931,460 | |
Belgium — 0.5% | ||||
UCB SA | 36,040 | 2,604,490 | ||
China — 2.5% | ||||
Alibaba Group Holding Ltd. ADR(1) | 43,340 | 3,553,880 | ||
Tencent Holdings Ltd. | 425,700 | 9,493,782 | ||
13,047,662 | ||||
Denmark — 2.3% | ||||
GN Store Nord A/S | 161,149 | 3,293,035 | ||
Pandora A/S | 60,046 | 8,924,215 | ||
12,217,250 | ||||
France — 6.8% | ||||
Accor SA | 78,396 | 3,411,025 | ||
Carrefour SA | 205,530 | 5,568,431 | ||
Kering | 13,110 | 2,117,280 | ||
Legrand SA | 55,100 | 3,030,713 | ||
Sodexo SA | 45,630 | 4,799,310 | ||
Thales SA | 29,100 | 2,520,961 | ||
TOTAL SA | 135,786 | 6,598,521 | ||
Valeo SA | 21,660 | 3,269,166 | ||
Veolia Environnement SA | 199,070 | 4,469,775 | ||
35,785,182 | ||||
Germany — 1.9% | ||||
Fresenius Medical Care AG & Co. KGaA | 76,653 | 6,652,463 | ||
Symrise AG | 49,290 | 3,092,570 | ||
9,745,033 | ||||
Hong Kong — 2.7% | ||||
AIA Group Ltd. | 1,690,400 | 9,886,907 | ||
Hang Seng Bank Ltd. | 125,000 | 2,218,254 | ||
Melco Crown Entertainment Ltd. ADR | 81,740 | 1,182,778 | ||
Sands China Ltd. | 246,800 | 946,452 | ||
14,234,391 | ||||
India — 1.0% | ||||
HDFC Bank Ltd. | 260,410 | 5,418,355 | ||
Indonesia — 0.8% | ||||
Astra International Tbk PT | 4,375,100 | 2,113,884 | ||
Bank Central Asia Tbk PT | 1,917,000 | 1,824,378 | ||
3,938,262 | ||||
Ireland — 1.4% | ||||
CRH plc | 238,820 | 7,236,970 | ||
Israel — 0.4% | ||||
Mobileye NV(1) | 58,160 | 2,208,335 | ||
Italy — 1.6% | ||||
Intesa Sanpaolo SpA | 2,128,350 | 5,465,596 |
6
Shares | Value | |||
Mediaset SpA | 594,440 | $ | 2,652,229 | |
8,117,825 | ||||
Japan — 2.7% | ||||
NTT DOCOMO, Inc. | 175,200 | 4,396,810 | ||
ORIX Corp. | 347,700 | 4,835,490 | ||
Seven & i Holdings Co. Ltd. | 109,900 | 4,708,228 | ||
13,940,528 | ||||
Mexico — 0.5% | ||||
Fomento Economico Mexicano SAB de CV ADR | 27,569 | 2,499,957 | ||
Peru — 0.7% | ||||
Credicorp Ltd. | 24,754 | 3,470,511 | ||
Portugal — 0.6% | ||||
Jeronimo Martins SGPS SA | 208,310 | 3,374,661 | ||
Switzerland — 3.7% | ||||
Adecco Group AG | 54,892 | 3,327,206 | ||
Julius Baer Group Ltd. | 90,180 | 4,012,738 | ||
Roche Holding AG | 44,761 | 11,748,637 | ||
19,088,581 | ||||
United Kingdom — 7.1% | ||||
Admiral Group plc | 141,710 | 4,039,234 | ||
Ashtead Group plc | 309,178 | 4,370,507 | ||
Capita plc | 106,883 | 1,647,114 | ||
Liberty Global plc(1) | 92,910 | 3,356,838 | ||
Liberty Global plc, Class A(1) | 109,160 | 4,077,126 | ||
Rio Tinto plc | 78,210 | 2,200,375 | ||
Royal Bank of Scotland Group plc(1) | 1,435,128 | 5,123,668 | ||
Shire plc | 141,810 | 8,749,634 | ||
Tesco plc(1) | 702,160 | 1,679,023 | ||
Whitbread plc | 30,480 | 1,859,417 | ||
37,102,936 | ||||
United States — 60.0% | ||||
Adobe Systems, Inc.(1) | 135,970 | 13,524,936 | ||
Alexion Pharmaceuticals, Inc.(1) | 30,054 | 4,535,149 | ||
Allegion plc | 51,986 | 3,516,333 | ||
Allergan plc(1) | 21,590 | 5,089,842 | ||
Alliance Data Systems Corp.(1) | 34,272 | 7,614,896 | ||
Alphabet, Inc., Class A(1) | 12,905 | 9,663,909 | ||
Alphabet, Inc., Class C(1) | 13,714 | 10,089,664 | ||
Amazon.com, Inc.(1) | 3,080 | 2,226,193 | ||
American Tower Corp. | 60,290 | 6,377,476 | ||
Becton Dickinson and Co. | 56,610 | 9,422,734 | ||
Boston Scientific Corp.(1) | 224,390 | 5,095,897 | ||
Bristol-Myers Squibb Co. | 94,260 | 6,758,442 | ||
Celgene Corp.(1) | 91,878 | 9,694,967 | ||
Charles Schwab Corp. (The) | 134,014 | 4,098,148 | ||
Chipotle Mexican Grill, Inc.(1) | 5,910 | 2,611,984 | ||
Cognizant Technology Solutions Corp., Class A(1) | 172,220 | 10,581,197 | ||
Delphi Automotive plc | 71,950 | 4,889,722 | ||
EOG Resources, Inc. | 63,030 | 5,128,121 | ||
EQT Corp. | 102,210 | 7,486,882 | ||
Equinix, Inc. | 24,276 | 8,787,912 |
7
Shares | Value | |||
Estee Lauder Cos., Inc. (The), Class A | 50,235 | $ | 4,610,568 | |
Facebook, Inc., Class A(1) | 132,541 | 15,747,196 | ||
Fortune Brands Home & Security, Inc. | 121,593 | 7,133,861 | ||
HD Supply Holdings, Inc.(1) | 145,200 | 5,125,560 | ||
Hess Corp. | 45,900 | 2,750,787 | ||
Home Depot, Inc. (The) | 90,384 | 11,941,534 | ||
Ingersoll-Rand plc | 73,219 | 4,891,761 | ||
Interactive Brokers Group, Inc., Class A | 102,570 | 4,121,263 | ||
Intercontinental Exchange, Inc. | 36,516 | 9,900,218 | ||
Lennox International, Inc. | 21,990 | 3,020,327 | ||
Lowe's Cos., Inc. | 44,270 | 3,547,355 | ||
MarketAxess Holdings, Inc. | 14,293 | 2,000,162 | ||
Martin Marietta Materials, Inc. | 48,700 | 9,206,248 | ||
MasterCard, Inc., Class A | 75,150 | 7,206,885 | ||
Mondelez International, Inc., Class A | 152,980 | 6,806,080 | ||
MSCI, Inc., Class A | 18,810 | 1,500,850 | ||
Pfizer, Inc. | 271,020 | 9,404,394 | ||
Pioneer Natural Resources Co. | 54,080 | 8,670,106 | ||
ServiceMaster Global Holdings, Inc.(1) | 96,897 | 3,705,341 | ||
Signet Jewelers Ltd. | 40,680 | 4,026,100 | ||
Sirius XM Holdings, Inc.(1) | 1,489,180 | 5,986,504 | ||
Tractor Supply Co. | 75,023 | 7,209,710 | ||
Ulta Salon Cosmetics & Fragrance, Inc.(1) | 29,790 | 6,941,368 | ||
Union Pacific Corp. | 95,752 | 8,061,361 | ||
VCA, Inc.(1) | 11,990 | 778,511 | ||
Vertex Pharmaceuticals, Inc.(1) | 21,141 | 1,969,284 | ||
Visa, Inc., Class A | 99,012 | 7,816,007 | ||
WhiteWave Foods Co. (The), Class A(1) | 138,549 | 6,186,213 | ||
Zions Bancorp | 244,784 | 6,858,848 | ||
314,318,806 | ||||
TOTAL COMMON STOCKS (Cost $389,830,494) | 513,281,195 | |||
TEMPORARY CASH INVESTMENTS — 1.8% | ||||
Repurchase Agreement, Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 3.75%, 11/15/43, valued at $6,650,475), at 0.10%, dated 5/31/16, due 6/1/16 (Delivery value $6,515,018) | 6,515,000 | |||
State Street Institutional Liquid Reserves Fund, Premier Class | 2,981,618 | 2,981,618 | ||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $9,496,618) | 9,496,618 | |||
TOTAL INVESTMENT SECURITIES — 99.9% (Cost $399,327,112) | 522,777,813 | |||
OTHER ASSETS AND LIABILITIES — 0.1% | 768,340 | |||
TOTAL NET ASSETS — 100.0% | $ | 523,546,153 |
8
MARKET SECTOR DIVERSIFICATION | ||
(as a % of net assets) | ||
Information Technology | 18.5 | % |
Financials | 18.3 | % |
Consumer Discretionary | 17.4 | % |
Health Care | 16.5 | % |
Industrials | 8.9 | % |
Consumer Staples | 6.8 | % |
Energy | 5.8 | % |
Materials | 4.2 | % |
Telecommunication Services | 0.9 | % |
Utilities | 0.8 | % |
Cash and Equivalents* | 1.9 | % |
*Includes temporary cash investments and other assets and liabilities.
NOTES TO SCHEDULE OF INVESTMENTS | ||
ADR | - | American Depositary Receipt |
(1) | Non-income producing. |
See Notes to Financial Statements.
9
Statement of Assets and Liabilities |
MAY 31, 2016 (UNAUDITED) | |||
Assets | |||
Investment securities, at value (cost of $399,327,112) | $ | 522,777,813 | |
Foreign currency holdings, at value (cost of $261,024) | 254,658 | ||
Receivable for capital shares sold | 130,290 | ||
Dividends and interest receivable | 1,429,461 | ||
Other assets | 16,478 | ||
524,608,700 | |||
Liabilities | |||
Payable for capital shares redeemed | 587,363 | ||
Accrued management fees | 456,519 | ||
Distribution and service fees payable | 18,665 | ||
1,062,547 | |||
Net Assets | $ | 523,546,153 | |
Net Assets Consist of: | |||
Capital (par value and paid-in surplus) | $ | 404,114,452 | |
Distributions in excess of net investment income | (908,043 | ) | |
Accumulated net realized loss | (3,110,960 | ) | |
Net unrealized appreciation | 123,450,704 | ||
$ | 523,546,153 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | ||||
Investor Class, $0.01 Par Value | $417,937,395 | 37,993,842 | $11.00 | |||
Institutional Class, $0.01 Par Value | $30,457,436 | 2,728,375 | $11.16 | |||
A Class, $0.01 Par Value | $42,692,890 | 3,970,656 | $10.75* | |||
C Class, $0.01 Par Value | $8,453,199 | 879,648 | $9.61 | |||
R Class, $0.01 Par Value | $6,583,403 | 618,126 | $10.65 | |||
R6 Class, $0.01 Par Value | $17,421,830 | 1,556,436 | $11.19 |
*Maximum offering price $11.41 (net asset value divided by 0.9425).
See Notes to Financial Statements.
10
Statement of Operations |
SIX MONTHS ENDED MAY 31, 2016 (UNAUDITED) | |||
Investment Income (Loss) | |||
Income: | |||
Dividends (net of foreign taxes withheld of $369,980) | $ | 4,671,043 | |
Interest | 3,249 | ||
4,674,292 | |||
Expenses: | |||
Management fees | 2,681,215 | ||
Distribution and service fees: | |||
A Class | 52,766 | ||
C Class | 40,904 | ||
R Class | 15,360 | ||
Directors' fees and expenses | 8,705 | ||
Other expenses | 1,202 | ||
2,800,152 | |||
Net investment income (loss) | 1,874,140 | ||
Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investment transactions | (2,287,490 | ) | |
Foreign currency transactions | (14,192 | ) | |
(2,301,682 | ) | ||
Change in net unrealized appreciation (depreciation) on: | |||
Investments | (10,436,074 | ) | |
Translation of assets and liabilities in foreign currencies | 13,800 | ||
(10,422,274 | ) | ||
Net realized and unrealized gain (loss) | (12,723,956 | ) | |
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | (10,849,816 | ) |
See Notes to Financial Statements.
11
Statement of Changes in Net Assets |
SIX MONTHS ENDED MAY 31, 2016 (UNAUDITED) AND YEAR ENDED NOVEMBER 30, 2015 | ||||||
Increase (Decrease) in Net Assets | May 31, 2016 | November 30, 2015 | ||||
Operations | ||||||
Net investment income (loss) | $ | 1,874,140 | $ | 155,693 | ||
Net realized gain (loss) | (2,301,682 | ) | 39,068,403 | |||
Change in net unrealized appreciation (depreciation) | (10,422,274 | ) | (30,761,290 | ) | ||
Net increase (decrease) in net assets resulting from operations | (10,849,816 | ) | 8,462,806 | |||
Distributions to Shareholders | ||||||
From net investment income: | ||||||
Investor Class | (479,702 | ) | — | |||
Institutional Class | (98,254 | ) | — | |||
R6 Class | (70,054 | ) | — | |||
From net realized gains: | ||||||
Investor Class | (28,545,970 | ) | (37,785,567 | ) | ||
Institutional Class | (2,099,704 | ) | (6,379,960 | ) | ||
A Class | (3,017,077 | ) | (4,516,949 | ) | ||
C Class | (622,424 | ) | (670,176 | ) | ||
R Class | (412,601 | ) | (478,017 | ) | ||
R6 Class | (1,009,189 | ) | (1,376,962 | ) | ||
Decrease in net assets from distributions | (36,354,975 | ) | (51,207,631 | ) | ||
Capital Share Transactions | ||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | 17,316,164 | (29,475,736 | ) | |||
Redemption Fees | ||||||
Increase in net assets from redemption fees | 6,209 | 9,942 | ||||
Net increase (decrease) in net assets | (29,882,418 | ) | (72,210,619 | ) | ||
Net Assets | ||||||
Beginning of period | 553,428,571 | 625,639,190 | ||||
End of period | $ | 523,546,153 | $ | 553,428,571 | ||
Distributions in excess of net investment income | $ | (908,043 | ) | $ | (2,134,173 | ) |
See Notes to Financial Statements.
12
Notes to Financial Statements |
MAY 31, 2016 (UNAUDITED)
1. Organization
American Century World Mutual 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 Growth Fund (the fund) is one fund in a series issued by the corporation. The fund's investment objective is to seek capital growth.
The fund offers the Investor Class, the Institutional Class, the A Class, the C Class, the R Class and the R6 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. The share classes differ principally in their respective sales charges and distribution and shareholder servicing expenses and arrangements. The Institutional Class and R6 Class shareholders do not require the same level of shareholder and administrative services from American Century Investment Management, Inc. (ACIM) (the investment advisor) as shareholders of other classes. In addition, financial intermediaries do not receive any service, distribution or administrative fees for the R6 Class. As a result, the Institutional Class and R6 Class are charged lower unified management fees.
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
13
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 ACIM has determined are creditworthy pursuant to criteria adopted by the Board of Directors. The fund requires that the collateral, represented by securities, received in a repurchase transaction be transferred to the custodian in a manner sufficient to enable the fund to obtain those securities in the event of a default under the repurchase agreement. ACIM monitors, on a daily basis, the securities transferred to ensure the value, including accrued interest, of the securities under each repurchase agreement is equal to or greater than amounts owed to the fund under each repurchase agreement.
Joint Trading Account — Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the fund, along with certain other funds in the American Century Investments family of funds, may transfer uninvested cash balances into a joint trading account. These balances are invested in one or more repurchase agreements that are collateralized by U.S. Treasury or Agency obligations.
Income Tax Status — It is the fund’s policy to distribute substantially all net investment income and net realized gains to shareholders and to otherwise qualify as a regulated investment company under provisions of the Internal Revenue Code. Accordingly, no provision has been made for income taxes. The fund files U.S. federal, state, local and non-U.S. tax returns as applicable. The fund's tax returns are subject to examination by the relevant taxing authority until expiration of the applicable statute of limitations, which is generally three years from the date of filing but can be longer in certain jurisdictions. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination and for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Multiple Class — All shares of the fund represent an equal pro rata interest in the net assets of the class to which such shares belong, and have identical voting, dividend, liquidation and other rights and the same terms and conditions, except for class specific expenses and exclusive rights to vote on matters affecting only individual classes. Income, non-class specific expenses, and realized and unrealized capital gains and losses of the fund are allocated to each class of shares based on their relative net assets.
Distributions to Shareholders — Distributions from net investment income and net realized gains, if any, are generally declared and paid annually. The fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code, in all events in a manner consistent with provisions of the 1940 Act. 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).
14
Redemption Fees — The fund may impose a 2.00% redemption fee on shares held less than 60 days. The fee may not be applicable to all classes. The redemption fee is retained by the fund and helps 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 rate of the fee is determined by applying a fee rate calculation formula. This formula takes into account the fund’s assets as well as certain assets, if any, of other clients of the investment advisor outside the American Century Investments family of funds (such as subadvised funds and separate accounts) that have very similar investment teams and investment strategies (strategy assets). The annual management fee schedule ranges from 1.050% to 1.300% for the Investor Class, A Class, C Class and R Class. The annual management fee schedule ranges from 0.850% to 1.100% for the Institutional Class and 0.700% to 0.950% for the R6 Class. The effective annual management fee for each class for the six months ended May 31, 2016 was 1.08% for the Investor Class, A Class, C Class and R Class, 0.88% for the Institutional Class and 0.73% for the R6 Class.
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 six months ended May 31, 2016 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 significant interfund transactions during the period.
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the six months ended May 31, 2016 were $148,576,050 and $173,588,274, respectively.
15
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended May 31, 2016 | Year ended November 30, 2015 | |||||||||
Shares | Amount | Shares | Amount | |||||||
Investor Class/Shares Authorized | 300,000,000 | 310,000,000 | ||||||||
Sold | 1,424,585 | $ | 15,026,321 | 3,089,165 | $ | 37,049,796 | ||||
Issued in reinvestment of distributions | 2,586,515 | 28,244,747 | 3,197,823 | 36,927,269 | ||||||
Redeemed | (2,989,707 | ) | (31,533,853 | ) | (5,095,303 | ) | (61,226,074 | ) | ||
1,021,393 | 11,737,215 | 1,191,685 | 12,750,991 | |||||||
Institutional Class/Shares Authorized | 40,000,000 | 40,000,000 | ||||||||
Sold | 155,816 | 1,652,888 | 344,330 | 4,207,103 | ||||||
Issued in reinvestment of distributions | 198,510 | 2,197,504 | 511,275 | 5,962,760 | ||||||
Redeemed | (351,485 | ) | (3,712,621 | ) | (4,150,252 | ) | (51,025,377 | ) | ||
2,841 | 137,771 | (3,294,647 | ) | (40,855,514 | ) | |||||
A Class/Shares Authorized | 40,000,000 | 40,000,000 | ||||||||
Sold | 405,604 | 4,222,946 | 1,031,144 | 12,115,263 | ||||||
Issued in reinvestment of distributions | 272,105 | 2,906,077 | 392,995 | 4,454,209 | ||||||
Redeemed | (607,800 | ) | (6,237,876 | ) | (1,776,564 | ) | (20,780,515 | ) | ||
69,909 | 891,147 | (352,425 | ) | (4,211,043 | ) | |||||
C Class/Shares Authorized | 30,000,000 | 30,000,000 | ||||||||
Sold | 128,239 | 1,212,805 | 265,307 | 2,849,458 | ||||||
Issued in reinvestment of distributions | 44,341 | 424,787 | 44,246 | 457,296 | ||||||
Redeemed | (94,644 | ) | (891,522 | ) | (127,055 | ) | (1,364,173 | ) | ||
77,936 | 746,070 | 182,498 | 1,942,581 | |||||||
R Class/Shares Authorized | 30,000,000 | 30,000,000 | ||||||||
Sold | 107,534 | 1,114,643 | 196,169 | 2,307,770 | ||||||
Issued in reinvestment of distributions | 38,905 | 412,005 | 42,408 | 478,017 | ||||||
Redeemed | (46,094 | ) | (468,314 | ) | (165,733 | ) | (1,933,558 | ) | ||
100,345 | 1,058,334 | 72,844 | 852,229 | |||||||
R6 Class/Shares Authorized | 40,000,000 | 30,000,000 | ||||||||
Sold | 317,661 | 3,367,133 | 225,533 | 2,791,939 | ||||||
Issued in reinvestment of distributions | 97,317 | 1,079,243 | 117,575 | 1,376,962 | ||||||
Redeemed | (158,059 | ) | (1,700,749 | ) | (339,633 | ) | (4,123,881 | ) | ||
256,919 | 2,745,627 | 3,475 | 45,020 | |||||||
Net increase (decrease) | 1,529,343 | $ | 17,316,164 | (2,196,570 | ) | $ | (29,475,736 | ) |
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. |
16
• | Level 3 valuation inputs consist of unobservable data (including a fund’s own assumptions). |
The level classification is based on the lowest level input that is significant to the fair valuation measurement. The valuation inputs are not necessarily an indication of the risks associated with investing in these securities or other financial instruments. There were no significant transfers between levels during the period.
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 | ||||||||
Austria | — | $ | 4,931,460 | — | ||||
Belgium | — | 2,604,490 | — | |||||
China | $ | 3,553,880 | 9,493,782 | — | ||||
Denmark | — | 12,217,250 | — | |||||
France | — | 35,785,182 | — | |||||
Germany | — | 9,745,033 | — | |||||
Hong Kong | 1,182,778 | 13,051,613 | — | |||||
India | — | 5,418,355 | — | |||||
Indonesia | — | 3,938,262 | — | |||||
Ireland | — | 7,236,970 | — | |||||
Italy | — | 8,117,825 | — | |||||
Japan | — | 13,940,528 | — | |||||
Portugal | — | 3,374,661 | — | |||||
Switzerland | — | 19,088,581 | — | |||||
United Kingdom | 7,433,964 | 29,668,972 | — | |||||
Other Countries | 322,497,609 | — | — | |||||
Temporary Cash Investments | 2,981,618 | 6,515,000 | — | |||||
$ | 337,649,849 | $ | 185,127,964 | — |
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 May 31, 2016, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $ | 400,622,791 | |
Gross tax appreciation of investments | $ | 132,971,667 | |
Gross tax depreciation of investments | (10,816,645 | ) | |
Net tax appreciation (depreciation) of investments | $ | 122,155,022 |
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 November 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 | |||||||||||||||
2016(3) | $12.01 | 0.04 | (0.27) | (0.23) | (0.01) | (0.77) | (0.78) | $11.00 | (1.81)% | 1.08%(4) | 0.75%(4) | 29% | $417,937 | ||
2015 | $12.94 | —(5) | 0.12 | 0.12 | — | (1.05) | (1.05) | $12.01 | 1.37% | 1.08% | 0.04% | 50% | $443,915 | ||
2014 | $12.39 | —(5) | 0.91 | 0.91 | (0.08) | (0.28) | (0.36) | $12.94 | 7.53% | 1.08% | 0.03% | 46% | $462,889 | ||
2013 | $9.63 | 0.01 | 2.79 | 2.80 | (0.04) | — | (0.04) | $12.39 | 29.15% | 1.09% | 0.11% | 64% | $437,599 | ||
2012 | $8.52 | 0.03 | 1.11 | 1.14 | (0.03) | — | (0.03) | $9.63 | 13.37% | 1.10% | 0.28% | 54% | $373,887 | ||
2011 | $8.41 | 0.03 | 0.13 | 0.16 | (0.05) | — | (0.05) | $8.52 | 1.82% | 1.11% | 0.28% | 53% | $322,672 | ||
Institutional Class | |||||||||||||||
2016(3) | $12.19 | 0.05 | (0.27) | (0.22) | (0.04) | (0.77) | (0.81) | $11.16 | (1.75)% | 0.88%(4) | 0.95%(4) | 29% | $30,457 | ||
2015 | $13.09 | 0.03 | 0.12 | 0.15 | — | (1.05) | (1.05) | $12.19 | 1.60% | 0.88% | 0.24% | 50% | $33,211 | ||
2014 | $12.52 | 0.03 | 0.91 | 0.94 | (0.09) | (0.28) | (0.37) | $13.09 | 7.68% | 0.88% | 0.23% | 46% | $78,802 | ||
2013 | $9.73 | 0.03 | 2.82 | 2.85 | (0.06) | — | (0.06) | $12.52 | 29.42% | 0.89% | 0.31% | 64% | $80,968 | ||
2012 | $8.60 | 0.05 | 1.13 | 1.18 | (0.05) | — | (0.05) | $9.73 | 13.71% | 0.90% | 0.48% | 54% | $47,203 | ||
2011 | $8.49 | 0.04 | 0.13 | 0.17 | (0.06) | — | (0.06) | $8.60 | 2.00% | 0.91% | 0.48% | 53% | $35,991 |
For a Share Outstanding Throughout the Years Ended November 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 | |||||||||||||||
2016(3) | $11.76 | 0.03 | (0.27) | (0.24) | — | (0.77) | (0.77) | $10.75 | (1.97)% | 1.33%(4) | 0.50%(4) | 29% | $42,693 | ||
2015 | $12.72 | (0.02) | 0.11 | 0.09 | — | (1.05) | (1.05) | $11.76 | 1.14% | 1.33% | (0.21)% | 50% | $45,855 | ||
2014 | $12.21 | (0.03) | 0.89 | 0.86 | (0.07) | (0.28) | (0.35) | $12.72 | 7.23% | 1.33% | (0.22)% | 46% | $54,091 | ||
2013 | $9.49 | (0.02) | 2.75 | 2.73 | (0.01) | — | (0.01) | $12.21 | 28.83% | 1.34% | (0.14)% | 64% | $51,351 | ||
2012 | $8.39 | —(5) | 1.10 | 1.10 | —(5) | — | —(5) | $9.49 | 13.16% | 1.35% | 0.03% | 54% | $33,938 | ||
2011 | $8.28 | —(5) | 0.13 | 0.13 | (0.02) | — | (0.02) | $8.39 | 1.58% | 1.36% | 0.03% | 53% | $26,908 | ||
C Class | |||||||||||||||
2016(3) | $10.63 | (0.01) | (0.24) | (0.25) | — | (0.77) | (0.77) | $9.61 | (2.30)% | 2.08%(4) | (0.25)%(4) | 29% | $8,453 | ||
2015 | $11.68 | (0.10) | 0.10 | —(5) | — | (1.05) | (1.05) | $10.63 | 0.40% | 2.08% | (0.96)% | 50% | $8,520 | ||
2014 | $11.30 | (0.11) | 0.81 | 0.70 | (0.04) | (0.28) | (0.32) | $11.68 | 6.39% | 2.08% | (0.97)% | 46% | $7,234 | ||
2013 | $8.84 | (0.09) | 2.55 | 2.46 | — | — | — | $11.30 | 27.97% | 2.09% | (0.89)% | 64% | $5,615 | ||
2012 | $7.87 | (0.06) | 1.03 | 0.97 | — | — | — | $8.84 | 12.20% | 2.10% | (0.72)% | 54% | $4,098 | ||
2011 | $7.81 | (0.06) | 0.12 | 0.06 | — | — | — | $7.87 | 0.77% | 2.11% | (0.72)% | 53% | $3,557 | ||
R Class | |||||||||||||||
2016(3) | $11.67 | 0.01 | (0.26) | (0.25) | — | (0.77) | (0.77) | $10.65 | (2.07)% | 1.58%(4) | 0.25%(4) | 29% | $6,583 | ||
2015 | $12.66 | (0.05) | 0.11 | 0.06 | — | (1.05) | (1.05) | $11.67 | 0.89% | 1.58% | (0.46)% | 50% | $6,040 | ||
2014 | $12.18 | (0.06) | 0.88 | 0.82 | (0.06) | (0.28) | (0.34) | $12.66 | 7.00% | 1.58% | (0.47)% | 46% | $5,632 | ||
2013 | $9.47 | (0.04) | 2.75 | 2.71 | — | — | — | $12.18 | 28.51% | 1.59% | (0.39)% | 64% | $4,489 | ||
2012 | $8.39 | (0.02) | 1.10 | 1.08 | — | — | — | $9.47 | 12.87% | 1.60% | (0.22)% | 54% | $1,587 | ||
2011 | $8.29 | (0.02) | 0.12 | 0.10 | — | — | — | $8.39 | 1.21% | 1.61% | (0.22)% | 53% | $636 |
For a Share Outstanding Throughout the Years Ended November 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) | |||
R6 Class | |||||||||||||||
2016(3) | $12.23 | 0.06 | (0.28) | (0.22) | (0.05) | (0.77) | (0.82) | $11.19 | (1.68)% | 0.73%(4) | 1.10%(4) | 29% | $17,422 | ||
2015 | $13.11 | 0.05 | 0.12 | 0.17 | — | (1.05) | (1.05) | $12.23 | 1.76% | 0.73% | 0.39% | 50% | $15,887 | ||
2014 | $12.53 | 0.02 | 0.93 | 0.95 | (0.09) | (0.28) | (0.37) | $13.11 | 7.80% | 0.73% | 0.38% | 46% | $16,992 | ||
2013(6) | $11.22 | —(5) | 1.31 | 1.31 | — | — | — | $12.53 | 11.68% | 0.74%(4) | 0.00%(4)(7) | 64%(8) | $28 |
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 May 31, 2016 (unaudited). |
(4) | Annualized. |
(5) | Per-share amount was less than $0.005. |
(6) | July 26, 2013 (commencement of sale) through November 30, 2013. |
(7) | Ratio was less than 0.005%. |
(8) | Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended November 30, 2013. |
See Notes to Financial Statements.
Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain IRAs 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.
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.
Distributions you receive from 403(b), 457 and qualified plans are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
A description of the policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund is available without charge, upon request, by calling 1-800-345-2021. It is also available on the "About Us" page of American Century Investments’ website at americancentury.com and on the Securities and Exchange Commission’s website at sec.gov. Information regarding how the investment advisor voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the "About Us" page at americancentury.com. It is also available at sec.gov.
Quarterly Portfolio Disclosure
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-Q. The fund’s Forms N-Q are available on the SEC’s website at sec.gov, and may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The fund also makes its complete schedule of portfolio holdings for the most recent quarter of its fiscal year available on its
website at americancentury.com and, upon request, by calling 1-800-345-2021.
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 World Mutual 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. | ||
©2016 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-89421 1607 |
![](https://capedge.com/proxy/N-CSRS/0000872825-16-000153/acihorizblkb99.jpg)
Semiannual Report | |
May 31, 2016 | |
Global Small Cap Fund |
Table of Contents |
Any opinions expressed in this report reflect those of the author as of the date of the report, and do not necessarily represent the opinions of American Century Investments® or any other person in the American Century Investments organization. Any such opinions are subject to change at any time based upon market or other conditions and American Century Investments disclaims any responsibility to update such opinions. These opinions may not be relied upon as investment advice and, because investment decisions made by American Century Investments funds are based on numerous factors, may not be relied upon as an indication of trading intent on behalf of any American Century Investments fund. Security examples are used for representational purposes only and are not intended as recommendations to purchase or sell securities. Performance information for comparative indices and securities is provided to American Century Investments by third party vendors. To the best of American Century Investments’ knowledge, such information is accurate at the time of printing.
President’s Letter |
![]() | Dear Investor: Thank you for reviewing this semiannual report for the approximately two-month reporting period from the fund’s inception to May 31, 2016. It provides a macroeconomic and financial market overview (below), followed by a schedule of fund investments and other financial information. For additional commentary and information on fund performance, key factors that affected asset returns, and other insights regarding the investment markets, we encourage you to visit our website, americancentury.com. |
Jonathan Thomas |
“Risk-on” Rebound From Early 2016 Sell-off Continued, Except in Emerging Markets (EM)
Global equity market returns for April and May of 2016 generally reflected a continued “risk-on” rebound from the sharp “risk-off” sell-off that dragged these markets down during the first six weeks of the year. Riskier asset classes such as stocks and high-yield bonds plunged at the start of the year on concerns about China’s slowing economic growth, its possible contagion to the global economy, and an energy price collapse. Furthermore, the U.S. Federal Reserve (Fed) started to raise interest rates in December and projected four more rate hikes in 2016, which put additional pressure on commodity prices and EM.
These factors combined to drive down stock prices until mid-February, when the markets reversed, partly in response to indications that the global oil supply glut could be reduced. Oil prices started to rise, China stabilized, and stock markets rallied. Central bank stimulus also boosted the markets, with the Bank of Japan resorting to negative interest rates, the Fed holding rates steady while reducing its rate hike projections, and the European Central Bank announcing significant additional stimulus.
The positive momentum and sentiment created by these moves was generally sustained through April and May, producing positive returns for most equity indices. The notable exception was EM. In May, the Fed indicated that it might raise interest rates again this summer. Anticipation of another Fed rate hike, along with continued economic and political struggles in non-U.S. economies, pushed the U.S. dollar higher and EM stock indices lower.
Looking ahead, we expect more market volatility this year due to global economic and political headwinds, uncertainty surrounding future Fed moves, and the U.S. presidential election. This could present both challenges and opportunities for active investment managers. In this environment, we continue to believe in a disciplined, diversified, risk-aware investment approach, using professionally managed portfolios to meet financial goals. We appreciate your trust in us.
Sincerely,
![](https://capedge.com/proxy/N-CSRS/0000872825-16-000153/jonathanthomassig.jpg)
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
2
Fund Characteristics |
MAY 31, 2016 | |
Top Ten Holdings | % of net assets |
MarketAxess Holdings, Inc. | 1.7% |
Rentokil Initial plc | 1.5% |
Bellway plc | 1.4% |
InterXion Holding NV | 1.3% |
Parex Resources, Inc. | 1.3% |
Parsley Energy, Inc., Class A | 1.3% |
Semtech Corp. | 1.3% |
Stabilus SA | 1.3% |
Nexans SA | 1.3% |
Temenos Group AG | 1.2% |
Types of Investments in Portfolio | % of net assets |
Foreign Common Stocks | 50.7% |
Domestic Common Stocks | 47.6% |
Exchange-Traded Funds | 1.0% |
Total Equity Exposure | 99.3% |
Temporary Cash Investments | 0.6% |
Other Assets and Liabilities | 0.1% |
Investments by Country | % of net assets |
United States | 47.6% |
Japan | 10.3% |
United Kingdom | 5.9% |
France | 4.8% |
Australia | 4.7% |
Canada | 3.9% |
Sweden | 3.1% |
Germany | 3.0% |
Switzerland | 2.9% |
Taiwan | 2.8% |
Other Countries | 9.3% |
Exchange-Traded Funds* | 1.0% |
Cash and Equivalents** | 0.7% |
* | 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.
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 December 1, 2015 to May 31, 2016 (except as noted).
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 Institutional 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 12/1/15 | Ending Account Value 5/31/16 | Expenses Paid During Period(1) 12/1/15 - 5/31/16 | Annualized Expense Ratio(1) | |
Actual | ||||
Investor Class | $1,000 | $1,044.00(2) | $2.68(3) | 1.50% |
Institutional Class | $1,000 | $1,044.00(2) | $2.32(3) | 1.30% |
A Class | $1,000 | $1,043.00(2) | $3.13(3) | 1.75% |
C Class | $1,000 | $1,042.00(2) | $4.46(3) | 2.50% |
R Class | $1,000 | $1,043.00(2) | $3.57(3) | 2.00% |
R6 Class | $1,000 | $1,044.00(2) | $2.06(3) | 1.15% |
Hypothetical | ||||
Investor Class | $1,000 | $1,017.50(4) | $7.57(4) | 1.50% |
Institutional Class | $1,000 | $1,018.50(4) | $6.56(4) | 1.30% |
A Class | $1,000 | $1,016.25(4) | $8.82(4) | 1.75% |
C Class | $1,000 | $1,012.50(4) | $12.58(4) | 2.50% |
R Class | $1,000 | $1,015.00(4) | $10.07(4) | 2.00% |
R6 Class | $1,000 | $1,019.25(4) | $5.81(4) | 1.15% |
(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 183, the number of days in the most recent fiscal half-year, divided by 366, to reflect the one-half year period. |
(2) | Ending account value based on actual return from March 29, 2016 (fund inception) through May 31, 2016. |
(3) | 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 64, the number of days in the period from March 29, 2016 (fund inception) through May 31, 2016, divided by 366 to reflect the period. Had the class been available for the full period, the expenses paid during the period would have been higher. |
(4) | Ending account value and expenses paid during the period assumes the class had been available throughout the entire period and are calculated using the class's annualized expense ratio listed in the table above. |
5
Schedule of Investments |
MAY 31, 2016 (UNAUDITED)
Shares | Value | |||
COMMON STOCKS — 98.3% | ||||
Australia — 4.7% | ||||
APN Outdoor Group Ltd. | 11,751 | $ | 58,093 | |
Aristocrat Leisure Ltd. | 5,429 | 50,460 | ||
BlueScope Steel Ltd. | 5,507 | 24,916 | ||
Burson Group Ltd. | 16,049 | 61,593 | ||
Domino's Pizza Enterprises Ltd. | 1,051 | 52,314 | ||
247,376 | ||||
Belgium — 0.5% | ||||
Galapagos NV(1) | 493 | 28,403 | ||
Canada — 3.9% | ||||
Aecon Group, Inc. | 2,062 | 27,753 | ||
FirstService Corp. | 629 | 29,782 | ||
Parex Resources, Inc.(1) | 6,660 | 68,512 | ||
Raging River Exploration, Inc.(1) | 6,697 | 55,155 | ||
Shopify, Inc., Class A(1) | 844 | 24,760 | ||
205,962 | ||||
China — 0.6% | ||||
Bitauto Holdings Ltd. ADR(1) | 1,513 | 30,699 | ||
France — 4.8% | ||||
Eurofins Scientific SE | 107 | 41,490 | ||
Nexans SA(1) | 1,281 | 65,921 | ||
Nexity SA | 988 | 53,250 | ||
Plastic Omnium SA | 1,216 | 40,549 | ||
Worldline SA(1) | 1,679 | 51,523 | ||
252,733 | ||||
Germany — 3.0% | ||||
Jungheinrich AG Preference Shares | 265 | 25,248 | ||
Sartorius AG Preference Shares | 235 | 64,911 | ||
Stabilus SA(1) | 1,222 | 66,059 | ||
156,218 | ||||
Israel — 0.7% | ||||
Frutarom Industries Ltd. | 774 | 37,709 | ||
Italy — 1.6% | ||||
Davide Campari-Milano SpA | 3,889 | 37,581 | ||
FinecoBank Banca Fineco SpA | 6,254 | 45,648 | ||
83,229 | ||||
Japan — 10.3% | ||||
Anicom Holdings, Inc. | 1,000 | 25,448 | ||
Dip Corp. | 1,500 | 40,976 | ||
eRex Co. Ltd. | 800 | 14,196 | ||
Hoshizaki Electric Co. Ltd. | 500 | 47,907 | ||
Ichigo Hotel REIT Investment Corp. | 35 | 62,898 | ||
Invincible Investment Corp. | 76 | 52,367 | ||
MISUMI Group, Inc. | 2,700 | 41,475 | ||
Nifco, Inc. | 1,000 | 51,565 | ||
Nihon M&A Center, Inc. | 800 | 48,837 |
6
Shares | Value | |||
Open House Co. Ltd. | 2,000 | $ | 53,533 | |
Sohgo Security Services Co. Ltd. | 500 | 24,653 | ||
Tsuruha Holdings, Inc. | 400 | 41,649 | ||
Ulvac, Inc. | 1,200 | 40,204 | ||
545,708 | ||||
Malaysia — 0.7% | ||||
My EG Services Bhd | 74,000 | 37,278 | ||
Mexico — 1.0% | ||||
Alsea SAB de CV | 13,462 | 51,013 | ||
Netherlands — 1.3% | ||||
InterXion Holding NV(1) | 1,846 | 69,151 | ||
Norway — 1.2% | ||||
Det Norske Oljeselskap ASA(1) | 6,700 | 62,590 | ||
Philippines — 0.5% | ||||
Puregold Price Club, Inc. | 28,000 | 25,147 | ||
South Korea — 1.2% | ||||
Hite Jinro Co. Ltd. | 1,118 | 23,546 | ||
Medy-Tox, Inc. | 104 | 38,308 | ||
61,854 | ||||
Sweden — 3.1% | ||||
Collector AB(1) | 2,171 | 32,664 | ||
Fastighets AB Balder, B Shares(1) | 2,096 | 54,176 | ||
Indutrade AB | 1,281 | 25,677 | ||
Saab AB, B Shares | 1,520 | 50,531 | ||
163,048 | ||||
Switzerland — 2.9% | ||||
Straumann Holding AG | 115 | 43,993 | ||
Temenos Group AG | 1,169 | 64,918 | ||
VAT Group AG(1) | 796 | 43,964 | ||
152,875 | ||||
Taiwan — 2.8% | ||||
AirTAC International Group | 7,000 | 46,899 | ||
Gourmet Master Co. Ltd. | 5,000 | 44,768 | ||
Land Mark Optoelectronics Corp. | 3,000 | 44,201 | ||
Tung Thih Electronic Co. Ltd. | 1,000 | 13,982 | ||
149,850 | ||||
United Kingdom — 5.9% | ||||
Bellway plc | 1,818 | 71,963 | ||
Rentokil Initial plc | 30,543 | 79,671 | ||
Rightmove plc | 426 | 26,062 | ||
Rotork plc | 9,032 | 25,731 | ||
RPC Group plc | 4,688 | 54,692 | ||
UDG Healthcare plc | 6,021 | 51,625 | ||
309,744 | ||||
United States — 47.6% | ||||
Acadia Healthcare Co., Inc.(1) | 904 | 53,218 | ||
Adeptus Health, Inc., Class A(1) | 725 | 51,837 | ||
American Woodmark Corp.(1) | 663 | 53,544 | ||
AptarGroup, Inc. | 486 | 37,548 | ||
Aratana Therapeutics, Inc.(1) | 6,207 | 44,256 | ||
Astec Industries, Inc. | 559 | 29,817 |
7
Shares | Value | |||
Bank of the Ozarks, Inc. | 627 | $ | 24,397 | |
BankUnited, Inc. | 1,093 | 36,178 | ||
Beacon Roofing Supply, Inc.(1) | 977 | 42,158 | ||
Benefitfocus, Inc.(1) | 842 | 30,910 | ||
BJ's Restaurants, Inc.(1) | 607 | 27,194 | ||
Brandywine Realty Trust | 3,979 | 62,828 | ||
BWX Technologies, Inc. | 746 | 26,237 | ||
Callidus Software, Inc.(1) | 745 | 13,827 | ||
Civitas Solutions, Inc.(1) | 2,344 | 50,982 | ||
Copart, Inc.(1) | 619 | 30,647 | ||
CoreSite Realty Corp. | 562 | 42,628 | ||
Denny's Corp.(1) | 2,464 | 26,439 | ||
EastGroup Properties, Inc. | 421 | 26,957 | ||
Education Realty Trust, Inc. | 915 | 39,153 | ||
Euronet Worldwide, Inc.(1) | 695 | 55,468 | ||
ExlService Holdings, Inc.(1) | 1,173 | 60,761 | ||
Fair Isaac Corp. | 498 | 55,492 | ||
FCB Financial Holdings, Inc., Class A(1) | 1,150 | 42,515 | ||
First Industrial Realty Trust, Inc. | 2,202 | 54,521 | ||
Five9, Inc.(1) | 2,807 | 28,603 | ||
Granite Construction, Inc. | 816 | 35,031 | ||
Guidewire Software, Inc.(1) | 471 | 27,648 | ||
HEICO Corp. | 420 | 27,951 | ||
Home Bancshares, Inc. | 915 | 40,214 | ||
IDEX Corp. | 309 | 25,752 | ||
John Bean Technologies Corp. | 854 | 51,821 | ||
MarketAxess Holdings, Inc. | 622 | 87,043 | ||
Masonite International Corp.(1) | 597 | 41,688 | ||
MDC Partners, Inc., Class A | 2,517 | 45,155 | ||
Merit Medical Systems, Inc.(1) | 1,957 | 36,733 | ||
Monolithic Power Systems, Inc. | 824 | 56,304 | ||
Monro Muffler Brake, Inc. | 380 | 23,921 | ||
Nanometrics, Inc.(1) | 2,101 | 39,121 | ||
Nevro Corp.(1) | 393 | 27,400 | ||
Orbital ATK, Inc. | 441 | 38,380 | ||
Parsley Energy, Inc., Class A(1) | 2,620 | 68,303 | ||
Paylocity Holding Corp.(1) | 1,451 | 53,266 | ||
PGT, Inc.(1) | 2,435 | 26,103 | ||
Pool Corp. | 283 | 25,914 | ||
Press Ganey Holdings, Inc.(1) | 1,486 | 50,569 | ||
ProAssurance Corp. | 992 | 52,070 | ||
Providence Service Corp. (The)(1) | 502 | 23,875 | ||
RenaissanceRe Holdings Ltd. | 431 | 49,785 | ||
Scotts Miracle-Gro Co. (The), Class A | 846 | 58,797 | ||
Semtech Corp.(1) | 2,883 | 67,866 | ||
Sensient Technologies Corp. | 604 | 41,205 | ||
ServiceMaster Global Holdings, Inc.(1) | 1,040 | 39,770 | ||
Six Flags Entertainment Corp. | 698 | 40,268 | ||
Summit Materials, Inc., Class A(1) | 2,780 | 60,465 | ||
Urban Edge Properties | 1,524 | 40,919 | ||
US Concrete, Inc.(1) | 823 | 52,787 |
8
Shares | Value | |||
Vail Resorts, Inc. | 200 | $ | 26,250 | |
W.R. Grace & Co. | 709 | 55,047 | ||
Watsco, Inc. | 188 | 25,235 | ||
2,510,771 | ||||
TOTAL COMMON STOCKS (Cost $4,919,964) | 5,181,358 | |||
EXCHANGE-TRADED FUNDS — 1.0% | ||||
VanEck Vectors India Small-Cap Index ETF, Class C (Cost $50,775) | 1,353 | 53,660 | ||
TEMPORARY CASH INVESTMENTS — 0.6% | ||||
State Street Institutional Liquid Reserves Fund, Premier Class (Cost $28,788) | 28,788 | 28,788 | ||
TOTAL INVESTMENT SECURITIES — 99.9% (Cost $4,999,527) | 5,263,806 | |||
OTHER ASSETS AND LIABILITIES — 0.1% | 7,232 | |||
TOTAL NET ASSETS — 100.0% | $ | 5,271,038 |
MARKET SECTOR DIVERSIFICATION | ||
(as a % of net assets) | ||
Industrials | 20.4 | % |
Financials | 19.1 | % |
Information Technology | 17.2 | % |
Consumer Discretionary | 14.5 | % |
Health Care | 11.6 | % |
Materials | 7.9 | % |
Energy | 4.8 | % |
Consumer Staples | 2.5 | % |
Utilities | 0.3 | % |
Exchange-Traded Funds | 1.0 | % |
Cash and Equivalents* | 0.7 | % |
*Includes temporary cash investments and other assets and liabilities.
NOTES TO SCHEDULE OF INVESTMENTS | ||
ADR | - | American Depositary Receipt |
(1) | Non-income producing. |
See Notes to Financial Statements.
9
Statement of Assets and Liabilities |
MAY 31, 2016 (UNAUDITED) | |||
Assets | |||
Investment securities, at value (cost of $4,999,527) | $ | 5,263,806 | |
Foreign currency holdings, at value (cost of $1,099) | 1,076 | ||
Receivable for investments sold | 22,286 | ||
Dividends and interest receivable | 3,885 | ||
5,291,053 | |||
Liabilities | |||
Payable for investments purchased | 12,529 | ||
Accrued management fees | 6,327 | ||
Distribution and service fees payable | 1,159 | ||
20,015 | |||
Net Assets | $ | 5,271,038 | |
Net Assets Consist of: | |||
Capital (par value and paid-in surplus) | $ | 5,053,653 | |
Accumulated net investment loss | (2,888 | ) | |
Accumulated net realized loss | (43,959 | ) | |
Net unrealized appreciation | 264,232 | ||
$ | 5,271,038 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | ||||
Investor Class, $0.01 Par Value | $2,142,428 | 205,301 | $10.44 | |||
Institutional Class, $0.01 Par Value | $626,353 | 60,000 | $10.44 | |||
A Class, $0.01 Par Value | $1,043,113 | 100,000 | $10.43* | |||
C Class, $0.01 Par Value | $1,041,769 | 100,000 | $10.42 | |||
R Class, $0.01 Par Value | $208,537 | 20,000 | $10.43 | |||
R6 Class, $0.01 Par Value | $208,838 | 20,000 | $10.44 |
*Maximum offering price $11.07 (net asset value divided by 0.9425).
See Notes to Financial Statements.
10
Statement of Operations |
FOR THE PERIOD ENDED MAY 31, 2016 (UNAUDITED)(1) | |||
Investment Income (Loss) | |||
Income: | |||
Dividends (net of foreign taxes withheld of $959) | $ | 12,204 | |
Interest | 88 | ||
12,292 | |||
Expenses: | |||
Management fees | 12,802 | ||
Distribution and service fees: | |||
A Class | 436 | ||
C Class | 1,742 | ||
R Class | 174 | ||
Directors' fees and expenses | 26 | ||
15,180 | |||
Net investment income (loss) | (2,888 | ) | |
Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investment transactions | (47,835 | ) | |
Foreign currency transactions | 3,876 | ||
(43,959 | ) | ||
Change in net unrealized appreciation (depreciation) on: | |||
Investments | 264,279 | ||
Translation of assets and liabilities in foreign currencies | (47 | ) | |
264,232 | |||
Net realized and unrealized gain (loss) | 220,273 | ||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 217,385 |
(1) | March 29, 2016 (fund inception) through May 31, 2016. |
See Notes to Financial Statements.
11
Statement of Changes in Net Assets |
PERIOD ENDED MAY 31, 2016 (UNAUDITED)(1) | |||
Increase (Decrease) in Net Assets | |||
Operations | |||
Net investment income (loss) | $ | (2,888 | ) |
Net realized gain (loss) | (43,959 | ) | |
Change in net unrealized appreciation (depreciation) | 264,232 | ||
Net increase (decrease) in net assets resulting from operations | 217,385 | ||
Capital Share Transactions | |||
Net increase (decrease) in net assets from capital share transactions (Note 5) | 5,053,653 | ||
Net increase (decrease) in net assets | 5,271,038 | ||
Net Assets | |||
End of period | $ | 5,271,038 | |
Accumulated net investment loss | $ | (2,888 | ) |
(1) | March 29, 2016 (fund inception) through May 31, 2016. |
See Notes to Financial Statements.
12
Notes to Financial Statements |
MAY 31, 2016 (UNAUDITED)
1. Organization
American Century World Mutual 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 Small Cap Fund (the fund) is one fund in a series issued by the corporation. The fund’s investment objective is to seek capital growth.
The fund offers the Investor Class, the Institutional Class, the A Class, the C Class, the R Class and the R6 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. The share classes differ principally in their respective sales charges and distribution and shareholder servicing expenses and arrangements. The Institutional Class and R6 Class shareholders do not require the same level of shareholder and administrative services from American Century Investment Management, Inc. (ACIM) (the investment advisor) as shareholders of other classes. In addition, financial intermediaries do not receive any service, distribution or administrative fees for the R6 Class. As a result, the Institutional Class and R6 Class are charged lower unified management fees. All classes of the fund commenced sale on March 29, 2016, the fund's inception date.
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.
13
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 ACIM has determined are creditworthy pursuant to criteria adopted by the Board of Directors. The fund requires that the collateral, represented by securities, received in a repurchase transaction be transferred to the custodian in a manner sufficient to enable the fund to obtain those securities in the event of a default under the repurchase agreement. ACIM monitors, on a daily basis, the securities transferred to ensure the value, including accrued interest, of the securities under each repurchase agreement is equal to or greater than amounts owed to the fund under each repurchase agreement.
Joint Trading Account — Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the fund, along with certain other funds in the American Century Investments family of funds, may transfer uninvested cash balances into a joint trading account. These balances are invested in one or more repurchase agreements that are collateralized by U.S. Treasury or Agency obligations.
Income Tax Status — It is the fund’s policy to distribute substantially all net investment income and net realized gains to shareholders and to otherwise qualify as a regulated investment company under provisions of the Internal Revenue Code. Accordingly, no provision has been made for income taxes. The fund files U.S. federal, state, local and non-U.S. tax returns as applicable. The fund's tax returns are subject to examination by the relevant taxing authority until expiration of the applicable statute of limitations, which is generally three years from the date of filing but can be longer in certain jurisdictions. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination and for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Multiple Class — All shares of the fund represent an equal pro rata interest in the net assets of the class to which such shares belong, and have identical voting, dividend, liquidation and other rights and the same terms and conditions, except for class specific expenses and exclusive rights to vote on matters affecting only individual classes. Income, non-class specific expenses, and realized and unrealized capital gains and losses of the fund are allocated to each class of shares based on their relative net assets.
Distributions to Shareholders — Distributions from net investment income and net realized gains, if any, are generally declared and paid annually. The fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code, in all events in a manner consistent with provisions of the 1940 Act.
14
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. ACIM owns 99% 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, 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 annual management fee is 1.50% for the Investor Class, A Class, C Class and R Class, 1.30% for the Institutional Class and 1.15% for the R6 Class.
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 March 29, 2016 (fund inception) through May 31, 2016 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 significant interfund transactions during the period.
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the period March 29, 2016 (fund inception) through May 31, 2016 were $5,879,416 and $860,838, respectively.
15
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Period ended May 31, 2016(1) | |||||
Shares | Amount | ||||
Investor Class/Shares Authorized | 50,000,000 | ||||
Sold | 205,301 | $ | 2,053,653 | ||
Institutional Class/Shares Authorized | 50,000,000 | ||||
Sold | 60,000 | 600,000 | |||
A Class/Shares Authorized | 50,000,000 | ||||
Sold | 100,000 | 1,000,000 | |||
C Class/Shares Authorized | 50,000,000 | ||||
Sold | 100,000 | 1,000,000 | |||
R Class/Shares Authorized | 50,000,000 | ||||
Sold | 20,000 | 200,000 | |||
R6 Class/Shares Authorized | 50,000,000 | ||||
Sold | 20,000 | 200,000 | |||
Net increase (decrease) | 505,301 | $ | 5,053,653 |
(1) | March 29, 2016 (fund inception) through May 31, 2016. |
6. Fair Value Measurements
The fund’s investments valuation process is based on several considerations and may use multiple inputs to determine the fair value of the investments held by the fund. In conformity with accounting principles generally accepted in the United States of America, the inputs used to determine a valuation are classified into three broad levels.
• | Level 1 valuation inputs consist of unadjusted quoted prices in an active market for identical investments. |
• | Level 2 valuation inputs consist of direct or indirect observable market data (including quoted prices for comparable investments, evaluations of subsequent market events, interest rates, prepayment speeds, credit risk, etc.). These inputs also consist of quoted prices for identical investments initially expressed in local currencies that are adjusted through translation into U.S. dollars. |
• | Level 3 valuation inputs consist of unobservable data (including a fund’s own assumptions). |
The level classification is based on the lowest level input that is significant to the fair valuation measurement. The valuation inputs are not necessarily an indication of the risks associated with investing in these securities or other financial instruments. There were no significant transfers between levels during the period.
16
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 | — | $ | 247,376 | — | ||||
Belgium | — | 28,403 | — | |||||
Canada | — | 205,962 | — | |||||
France | — | 252,733 | — | |||||
Germany | — | 156,218 | — | |||||
Israel | — | 37,709 | — | |||||
Italy | — | 83,229 | — | |||||
Japan | — | 545,708 | — | |||||
Malaysia | — | 37,278 | — | |||||
Mexico | — | 51,013 | — | |||||
Norway | — | 62,590 | — | |||||
Philippines | — | 25,147 | — | |||||
South Korea | — | 61,854 | — | |||||
Sweden | — | 163,048 | — | |||||
Switzerland | — | 152,875 | — | |||||
Taiwan | — | 149,850 | — | |||||
United Kingdom | — | 309,744 | — | |||||
Other Countries | $ | 2,610,621 | — | — | ||||
Exchange-Traded Funds | 53,660 | — | — | |||||
Temporary Cash Investments | 28,788 | — | — | |||||
$ | 2,693,069 | $ | 2,570,737 | — |
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 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 May 31, 2016, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $ | 4,999,527 | |
Gross tax appreciation of investments | $ | 341,454 | |
Gross tax depreciation of investments | (77,175 | ) | |
Net tax appreciation (depreciation) of investments | $ | 264,279 |
The cost of investments for federal income tax purposes was the same as the cost for financial reporting purposes.
17
Financial Highlights |
For a Share Outstanding Throughout the Period Indicated | ||||||||||||
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 | 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 | ||||||||||||
2016(3) | $10.00 | —(4) | 0.44 | 0.44 | $10.44 | 4.40% | 1.50%(5) | (0.10)%(5) | 17% | $2,142 | ||
Institutional Class | ||||||||||||
2016(3) | $10.00 | —(4) | 0.44 | 0.44 | $10.44 | 4.40% | 1.30%(5) | 0.10%(5) | 17% | $626 | ||
A Class | ||||||||||||
2016(3) | $10.00 | (0.01) | 0.44 | 0.43 | $10.43 | 4.30% | 1.75%(5) | (0.35)%(5) | 17% | $1,043 | ||
C Class | ||||||||||||
2016(3) | $10.00 | (0.02) | 0.44 | 0.42 | $10.42 | 4.20% | 2.50%(5) | (1.10)%(5) | 17% | $1,042 | ||
R Class | ||||||||||||
2016(3) | $10.00 | (0.01) | 0.44 | 0.43 | $10.43 | 4.30% | 2.00%(5) | (0.60)%(5) | 17% | $209 | ||
R6 Class | ||||||||||||
2016(3) | $10.00 | —(4) | 0.44 | 0.44 | $10.44 | 4.40% | 1.15%(5) | 0.25%(5) | 17% | $209 |
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) | March 29, 2016 (fund inception) through May 31, 2016 (unaudited). |
(4) | Per-share amount was less than $0.005. |
(5) | Annualized. |
See Notes to Financial Statements.
Approval of Management Agreement |
The Fund’s Board of Directors unanimously approved the initial management agreement pursuant to which American Century Investment Management, Inc. (the “Advisor”) acts as the investment advisor for the Fund. Under Section 15(c) of the Investment Company Act of 1940, new contracts for investment advisory services are required to be approved by a majority of a fund’s independent directors and to be evaluated on an annual basis thereafter.
In advance of the Board’s consideration, the Advisor provided information concerning the fund. The materials circulated and the discussions held detailed the investment objective and strategy proposed to be utilized by the Advisor, the Fund’s characteristics and key attributes, the rationale for launching the Fund, the experience of the staff designated to manage the Fund, the proposed pricing, and the markets in which the Fund would be sold. The information considered and the discussions held included, but were not limited to:
• | the nature, extent, and quality of investment management, shareholder services, and other services to be provided to the Fund; |
• | the wide range of other programs and services to be provided to the Fund and its shareholders on a routine and non-routine basis; |
• | the Fund’s proposed investment objective and strategy, including a discussion of the Fund’s anticipated investment performance and proposed benchmark; |
• | the cost of owning the Fund compared to the cost of owning similar funds; |
• | the compliance policies, procedures, and regulatory experience of the Fund’s service providers; and |
• | any collateral benefits derived by the Advisor from the management of the Fund. |
American Century Investments’ funds utilize a unified management fee structure. Under the unified fee structure, the Advisor is responsible for providing all investment advisory, custody, audit, administrative, compliance, recordkeeping, marketing and shareholder services, or arranging and supervising third parties to provide such services. By contrast, most other funds are charged a variety of fees, including an investment advisory fee, a transfer agency fee, an administrative fee, distribution charges and other expenses. Other than their investment advisory fees and Rule 12b-1 distribution fees, all other components of the total fees charged by these other funds may be increased without shareholder approval. The Advisor and Board believe the unified fee structure is a benefit to fund shareholders because it clearly discloses to shareholders the cost of owning fund shares, and because the unified fee cannot be increased without a vote of Fund shareholders, it shifts to the Advisor the risk of increased costs of operating the Fund and provides a direct incentive to minimize administrative inefficiencies. Part of the Board’s analysis of fee levels involves reviewing certain evaluative data compiled by an independent provider and comparing the Fund’s unified fee to the total expense ratio of peer funds.
When considering the approval of the management agreement for the Fund, the independent Directors considered the entrepreneurial risk that the Advisor assumes in launching a new fund. In particular, they considered the effect of the unified management fee structure and the fact that the Advisor will assume a substantial part of the start-up costs of the Fund and the risk that the Fund will not grow to a level that will become profitable to the Advisor. The Board considered the position that the Fund would take in the lineup of the American Century Investments’ family of funds and the benefits to shareholders of existing funds of the broadened product offering. Finally, while not specifically discussed, but important in the decision to approve the management agreement, is the Directors’ familiarity with the Advisor. The Board oversees and evaluates on a continuous basis the nature and quality of all services the Advisor performs for other funds within the American Century Investments’ complex. As such, the Directors have confidence in the Advisor’s integrity and competence in providing services to the Fund.
20
The independent Directors considered all of the information provided by the Advisor and the independent Directors’ independent counsel in connection with the approval. They determined that the information was sufficient for them to evaluate the management agreement for the Fund. In connection with their review, the Directors did not identify any single factor as being all-important or controlling, and each Director may have attributed different levels of importance to different factors. The independent Directors concluded that the overall arrangements between the Fund and the Advisor, as provided in the management agreement, were fair and reasonable in light of the services to be provided and should be approved.
21
Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain IRAs 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.
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.
Distributions you receive from 403(b), 457 and qualified plans are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
A description of the policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund is available without charge, upon request, by calling 1-800-345-2021. It is also available on the "About Us" page of American Century Investments’ website at americancentury.com and on the Securities and Exchange Commission’s website at sec.gov. Information regarding how the investment advisor voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the "About Us" page at americancentury.com. It is also available at sec.gov.
Quarterly Portfolio Disclosure
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-Q. The fund’s Forms N-Q are available on the SEC’s website at sec.gov, and may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The fund also makes its complete schedule of portfolio holdings for the most recent quarter of its fiscal year available on its
website at americancentury.com and, upon request, by calling 1-800-345-2021.
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 World Mutual 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. | ||
©2016 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-89428 1607 |
![](https://capedge.com/proxy/N-CSRS/0000872825-16-000153/acihorizblkb99.jpg)
Semiannual Report | |
May 31, 2016 | |
International Discovery Fund |
Table of Contents |
Any opinions expressed in this report reflect those of the author as of the date of the report, and do not necessarily represent the opinions of American Century Investments® or any other person in the American Century Investments organization. Any such opinions are subject to change at any time based upon market or other conditions and American Century Investments disclaims any responsibility to update such opinions. These opinions may not be relied upon as investment advice and, because investment decisions made by American Century Investments funds are based on numerous factors, may not be relied upon as an indication of trading intent on behalf of any American Century Investments fund. Security examples are used for representational purposes only and are not intended as recommendations to purchase or sell securities. Performance information for comparative indices and securities is provided to American Century Investments by third party vendors. To the best of American Century Investments’ knowledge, such information is accurate at the time of printing.
President’s Letter |
![]() | Dear Investor: Thank you for reviewing this semiannual report for the six months ended May 31, 2016. It provides a macroeconomic and financial market overview (below), followed by a schedule of fund investments and other financial information. For additional commentary and information on fund performance, key factors that affected asset returns, and other insights regarding the investment markets, we encourage you to visit our website, americancentury.com. |
Jonathan Thomas |
Economic Growth Concerns and Central Bank Policies Triggered Market Volatility
Global macroeconomic events—in the form of recession fears and resulting central bank policy moves—triggered widespread market volatility. Stock index graphs of the six months look like a square root sign (√). From late December to mid-February, stock market indices declined sharply on a confluence of factors that carried over from last summer’s similar sell-off, including concerns about China’s slowing economic growth, its possible contagion to the global economy, an energy price collapse, and Chinese currency devaluations. Furthermore, the U.S. Federal Reserve (Fed) started to raise interest rates in December and projected four more rate hikes in 2016, which put additional pressure on commodity prices and emerging markets.
These factors combined to drive down stock prices and U.S. Treasury yields until mid-February, when the markets reversed, partly in response to indications that the global oil supply glut could be reduced. Oil prices started to rise, China stabilized, and stock markets rallied. Central bank stimulus governed the markets, with the Bank of Japan resorting to negative interest rates, the Fed holding rates steady while reducing its rate hike projections, and the European Central Bank announcing significant additional stimulus.
Modest broad market gains and losses for the reporting period do not capture its volatility, which generally pushed returns for bonds (and higher-yielding, more defensive stock sectors such as utilities and telecommunication services) ahead of broad stock returns. Also, the divergence between generally weaker global economic conditions and the relatively stable U.S. economy helped U.S. stocks generally outpace their non-U.S. counterparts.
Looking ahead, we expect more market volatility this year due to global economic and political headwinds, uncertainty surrounding future Fed moves, and the U.S. presidential election. This could present both challenges and opportunities for active investment managers. In this environment, we continue to believe in a disciplined, diversified, risk-aware investment approach, using professionally managed portfolios to meet financial goals. We appreciate your trust in us.
Sincerely,
![](https://capedge.com/proxy/N-CSRS/0000872825-16-000153/jonathanthomassig.jpg)
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
2
Fund Characteristics |
MAY 31, 2016 | |
Top Ten Holdings | % of net assets |
Pandora A/S | 3.7% |
Thales SA | 2.8% |
Genmab A/S | 2.4% |
DSV A/S | 2.3% |
Lonza Group AG | 1.8% |
Provident Financial plc | 1.7% |
Persimmon plc | 1.7% |
DCC plc | 1.5% |
Partners Group Holding AG | 1.5% |
Teleperformance | 1.5% |
Types of Investments in Portfolio | % of net assets |
Common Stocks | 98.3% |
Temporary Cash Investments | 1.4% |
Other Assets and Liabilities | 0.3% |
Investments by Country | % of net assets |
Japan | 16.5% |
United Kingdom | 11.6% |
France | 10.9% |
Denmark | 9.9% |
Canada | 7.1% |
Switzerland | 6.6% |
China | 4.9% |
South Korea | 4.6% |
Germany | 4.3% |
Australia | 4.0% |
Sweden | 2.9% |
Spain | 2.3% |
Other Countries | 12.7% |
Cash and Equivalents* | 1.7% |
*Includes temporary cash investments and other assets and liabilities.
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 December 1, 2015 to May 31, 2016.
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 Institutional 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 12/1/15 | Ending Account Value 5/31/16 | Expenses Paid During Period(1) 12/1/15 - 5/31/16 | Annualized Expense Ratio(1) | |
Actual | ||||
Investor Class | $1,000 | $1,004.90 | $8.22 | 1.64% |
Institutional Class | $1,000 | $1,006.10 | $7.22 | 1.44% |
A Class | $1,000 | $1,004.00 | $9.47 | 1.89% |
C Class | $1,000 | $1,000.00 | $13.20 | 2.64% |
R Class | $1,000 | $1,002.10 | $10.71 | 2.14% |
Hypothetical | ||||
Investor Class | $1,000 | $1,016.80 | $8.27 | 1.64% |
Institutional Class | $1,000 | $1,017.80 | $7.26 | 1.44% |
A Class | $1,000 | $1,015.55 | $9.52 | 1.89% |
C Class | $1,000 | $1,011.80 | $13.28 | 2.64% |
R Class | $1,000 | $1,014.30 | $10.78 | 2.14% |
(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 183, the number of days in the most recent fiscal half-year, divided by 366, to reflect the one-half year period. |
5
Schedule of Investments |
MAY 31, 2016 (UNAUDITED)
Shares | Value | |||
COMMON STOCKS — 98.3% | ||||
Australia — 4.0% | ||||
Bellamy's Australia Ltd. | 266,240 | $ | 2,114,751 | |
Magellan Financial Group Ltd. | 148,750 | 2,653,324 | ||
Qantas Airways Ltd. | 2,171,620 | 4,834,179 | ||
Star Entertainment Grp Ltd. (The) | 1,050,240 | 4,288,695 | ||
Treasury Wine Estates Ltd. | 890,490 | 6,654,843 | ||
20,545,792 | ||||
Belgium — 1.0% | ||||
Galapagos NV(1) | 90,600 | 5,219,741 | ||
Canada — 7.1% | ||||
Agnico-Eagle Mines Ltd. New York Shares | 76,580 | 3,439,974 | ||
CCL Industries, Inc., Class B | 25,530 | 4,544,334 | ||
Cineplex, Inc. | 64,390 | 2,532,194 | ||
Dollarama, Inc. | 78,550 | 5,408,979 | ||
Element Financial Corp. | 409,720 | 4,805,348 | ||
Gildan Activewear, Inc. | 62,290 | 1,855,851 | ||
Maple Leaf Foods, Inc. | 219,760 | 4,935,320 | ||
PrairieSky Royalty Ltd. | 237,780 | 4,602,018 | ||
Silver Wheaton Corp. | 231,830 | 4,316,675 | ||
36,440,693 | ||||
China — 4.9% | ||||
Fuyao Glass Industry Group Co. Ltd., H Shares(1) | 2,072,000 | 4,831,534 | ||
Geely Automobile Holdings Ltd. | 4,590,000 | 2,427,681 | ||
New Oriental Education & Technology Group, Inc. ADR | 169,977 | 7,181,528 | ||
Sunny Optical Technology Group Co. Ltd. | 1,301,000 | 4,495,300 | ||
Zhuzhou CRRC Times Electric Co. Ltd., H Shares | 1,043,500 | 5,841,424 | ||
24,777,467 | ||||
Denmark — 9.9% | ||||
Dfds A/S | 52,060 | 2,579,364 | ||
DSV A/S | 252,510 | 11,517,390 | ||
Genmab A/S(1) | 67,370 | 12,174,512 | ||
H. Lundbeck A/S(1) | 139,800 | 5,500,232 | ||
Pandora A/S | 126,580 | 18,812,696 | ||
50,584,194 | ||||
Finland — 0.6% | ||||
Amer Sports Oyj | 97,020 | 2,890,883 | ||
France — 10.9% | ||||
BioMerieux | 28,600 | 3,734,288 | ||
Criteo SA ADR(1) | 96,130 | 4,313,353 | ||
Eiffage SA | 66,750 | 4,924,062 | ||
Iliad SA | 10,770 | 2,360,100 | ||
Nexans SA(1) | 128,160 | 6,595,123 | ||
Plastic Omnium SA | 184,660 | 6,157,696 | ||
Remy Cointreau SA | 74,550 | 6,191,245 | ||
Teleperformance | 86,410 | 7,535,775 |
6
Shares | Value | |||
Thales SA | 162,870 | $ | 14,109,583 | |
55,921,225 | ||||
Germany — 4.3% | ||||
GEA Group AG | 38,240 | 1,772,752 | ||
Grand City Properties SA | 226,170 | 4,759,924 | ||
KION Group AG | 83,270 | 4,607,967 | ||
SMA Solar Technology AG(1) | 86,010 | 4,739,017 | ||
Stroeer SE & Co. KGaA | 69,180 | 3,762,447 | ||
Symrise AG | 38,870 | 2,438,795 | ||
22,080,902 | ||||
Hong Kong — 1.7% | ||||
Techtronic Industries Co. Ltd. | 1,269,500 | 5,105,282 | ||
Wynn Macau Ltd. | 2,191,600 | 3,429,509 | ||
8,534,791 | ||||
India — 1.1% | ||||
Ashok Leyland Ltd. | 2,859,660 | 4,630,452 | ||
Vakrangee Ltd. | 380,250 | 1,012,719 | ||
5,643,171 | ||||
Ireland — 0.4% | ||||
Kingspan Group plc | 68,110 | 1,913,890 | ||
Israel — 0.8% | ||||
Mellanox Technologies Ltd.(1) | 89,520 | 4,243,248 | ||
Italy — 1.9% | ||||
Buzzi Unicem SpA | 374,200 | 7,436,078 | ||
FinecoBank Banca Fineco SpA | 336,800 | 2,458,298 | ||
9,894,376 | ||||
Japan — 16.5% | ||||
Daito Trust Construction Co. Ltd. | 49,700 | 7,223,746 | ||
DeNA Co. Ltd. | 231,300 | 4,653,781 | ||
Disco Corp. | 58,600 | 5,582,968 | ||
Financial Products Group Co. Ltd. | 566,000 | 6,292,012 | ||
Gulliver International Co. Ltd. | 453,600 | 4,591,914 | ||
Japan Exchange Group, Inc. | 361,200 | 4,925,380 | ||
Japan Hotel REIT Investment Corp. | 2,930 | 2,548,056 | ||
Koito Manufacturing Co. Ltd. | 96,300 | 4,548,237 | ||
LIXIL Group Corp. | 177,600 | 3,210,866 | ||
Ono Pharmaceutical Co. Ltd. | 136,100 | 6,051,893 | ||
Open House Co. Ltd. | 262,512 | 7,026,555 | ||
Ryohin Keikaku Co. Ltd. | 18,700 | 4,311,293 | ||
Sundrug Co. Ltd. | 83,000 | 6,873,256 | ||
Sysmex Corp. | 48,600 | 3,554,974 | ||
Takeuchi Manufacturing Co. Ltd. | 63,200 | 1,098,088 | ||
Temp Holdings Co. Ltd. | 206,300 | 3,293,795 | ||
Tokyo Steel Manufacturing Co. Ltd. | 531,200 | 3,190,030 | ||
W-Scope Corp. | 88,100 | 5,227,047 | ||
84,203,891 | ||||
Mexico — 1.1% | ||||
Grupo Aeroportuario del Pacifico SAB de CV, B Shares | 535,820 | 5,429,689 | ||
Netherlands — 1.0% | ||||
Koninklijke Vopak NV | 96,470 | 5,026,609 |
7
Shares | Value | |||
Norway — 1.0% | ||||
Marine Harvest ASA | 305,370 | $ | 5,099,478 | |
Portugal — 0.6% | ||||
Jeronimo Martins SGPS SA | 192,220 | 3,114,000 | ||
Russia — 1.0% | ||||
Yandex NV, A Shares(1) | 257,950 | 5,313,770 | ||
South Africa — 0.5% | ||||
Coronation Fund Managers Ltd. | 596,670 | 2,577,075 | ||
South Korea — 4.6% | ||||
Cosmax, Inc. | 25,040 | 3,277,597 | ||
Hyundai Marine & Fire Insurance Co. Ltd. | 184,090 | 4,881,057 | ||
Hyundai Mipo Dockyard Co. Ltd.(1) | 50,190 | 3,027,908 | ||
Korea Zinc Co. Ltd. | 5,310 | 2,091,832 | ||
LG Household & Health Care Ltd. | 8,280 | 7,336,533 | ||
Medy-Tox, Inc. | 7,920 | 2,917,335 | ||
23,532,262 | ||||
Spain — 2.3% | ||||
Cellnex Telecom SAU | 157,910 | 2,547,630 | ||
Distribuidora Internacional de Alimentacion SA | 360,850 | 2,158,062 | ||
Gamesa Corp. Tecnologica SA | 207,990 | 4,143,577 | ||
Merlin Properties Socimi SA | 268,850 | 2,959,652 | ||
11,808,921 | ||||
Sweden — 2.9% | ||||
Boliden AB | 97,080 | 1,717,828 | ||
Fastighets AB Balder, B Shares(1) | 176,230 | 4,555,041 | ||
Fingerprint Cards AB, B Shares(1) | 203,800 | 2,719,337 | ||
Lundin Petroleum AB(1) | 167,440 | 3,002,994 | ||
Saab AB, B Shares | 79,920 | 2,656,862 | ||
14,652,062 | ||||
Switzerland — 6.6% | ||||
dorma+kaba Holding AG | 6,120 | 4,020,483 | ||
Flughafen Zuerich AG | 33,100 | 5,804,155 | ||
Geberit AG | 17,710 | 6,770,423 | ||
Lonza Group AG | 53,450 | 9,227,384 | ||
Partners Group Holding AG | 18,520 | 7,806,720 | ||
33,629,165 | ||||
United Kingdom — 11.6% | ||||
ASOS plc(1) | 132,100 | 6,688,792 | ||
Auto Trader Group plc | 1,203,483 | 6,850,242 | ||
DCC plc | 86,580 | 7,887,541 | ||
Howden Joinery Group plc | 729,760 | 5,358,725 | ||
ITV plc | 657,520 | 2,045,581 | ||
Persimmon plc | 278,650 | 8,483,307 | ||
Provident Financial plc | 202,090 | 8,523,336 | ||
Travis Perkins plc | 101,150 | 2,817,206 | ||
Weir Group plc (The) | 219,360 | 3,809,343 | ||
Worldpay Group plc(1) | 1,691,120 | 6,787,102 | ||
59,251,175 | ||||
TOTAL COMMON STOCKS (Cost $444,700,214) | 502,328,470 |
8
Shares | Value | |||
TEMPORARY CASH INVESTMENTS — 1.4% | ||||
Repurchase Agreement, Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 3.75%, 11/15/43, valued at $5,199,350), at 0.10%, dated 5/31/16, due 6/1/16 (Delivery value $5,093,014) | $ | 5,093,000 | ||
State Street Institutional Liquid Reserves Fund, Premier Class | 2,330,514 | 2,330,514 | ||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $7,423,514) | 7,423,514 | |||
TOTAL INVESTMENT SECURITIES — 99.7% (Cost $452,123,728) | 509,751,984 | |||
OTHER ASSETS AND LIABILITIES — 0.3% | 1,324,470 | |||
TOTAL NET ASSETS — 100.0% | $ | 511,076,454 |
MARKET SECTOR DIVERSIFICATION | ||
(as a % of net assets) | ||
Industrials | 25.5 | % |
Consumer Discretionary | 20.6 | % |
Financials | 14.5 | % |
Information Technology | 9.7 | % |
Health Care | 9.5 | % |
Consumer Staples | 9.3 | % |
Materials | 6.7 | % |
Energy | 1.5 | % |
Telecommunication Services | 1.0 | % |
Cash and Equivalents* | 1.7 | % |
*Includes temporary cash investments and other assets and liabilities.
NOTES TO SCHEDULE OF INVESTMENTS | ||
ADR | - | American Depositary Receipt |
(1) | Non-income producing. |
See Notes to Financial Statements.
9
Statement of Assets and Liabilities |
MAY 31, 2016 (UNAUDITED) | |||
Assets | |||
Investment securities, at value (cost of $452,123,728) | $ | 509,751,984 | |
Foreign currency holdings, at value (cost of $137,555) | 136,457 | ||
Receivable for investments sold | 3,036,367 | ||
Receivable for capital shares sold | 73,212 | ||
Dividends and interest receivable | 1,312,327 | ||
Other assets | 112,625 | ||
514,422,972 | |||
Liabilities | |||
Payable for investments purchased | 2,119,991 | ||
Payable for capital shares redeemed | 534,148 | ||
Accrued management fees | 690,238 | ||
Distribution and service fees payable | 2,141 | ||
3,346,518 | |||
Net Assets | $ | 511,076,454 | |
Net Assets Consist of: | |||
Capital (par value and paid-in surplus) | $ | 589,057,213 | |
Distributions in excess of net investment income | (544,657 | ) | |
Accumulated net realized loss | (134,991,330 | ) | |
Net unrealized appreciation | 57,555,228 | ||
$ | 511,076,454 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | ||||
Investor Class, $0.01 Par Value | $482,176,346 | 37,426,758 | $12.88 | |||
Institutional Class, $0.01 Par Value | $21,656,548 | 1,661,923 | $13.03 | |||
A Class, $0.01 Par Value | $6,125,104 | 487,756 | $12.56* | |||
C Class, $0.01 Par Value | $960,520 | 77,221 | $12.44 | |||
R Class, $0.01 Par Value | $157,936 | 12,398 | $12.74 |
*Maximum offering price $13.33 (net asset value divided by 0.9425).
See Notes to Financial Statements.
10
Statement of Operations |
FOR THE SIX MONTHS ENDED MAY 31, 2016 (UNAUDITED) | |||
Investment Income (Loss) | |||
Income: | |||
Dividends (net of foreign taxes withheld of $493,348) | $ | 4,626,315 | |
Interest | 5,411 | ||
4,631,726 | |||
Expenses: | |||
Management fees | 4,077,407 | ||
Distribution and service fees: | |||
A Class | 7,544 | ||
C Class | 4,894 | ||
R Class | 365 | ||
Directors' fees and expenses | 8,560 | ||
Other expenses | 3,718 | ||
4,102,488 | |||
Net investment income (loss) | 529,238 | ||
Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investment transactions | (19,932,557 | ) | |
Foreign currency transactions | (116,291 | ) | |
(20,048,848 | ) | ||
Change in net unrealized appreciation (depreciation) on: | |||
Investments | 20,633,901 | ||
Translation of assets and liabilities in foreign currencies | 50,971 | ||
20,684,872 | |||
Net realized and unrealized gain (loss) | 636,024 | ||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 1,165,262 |
See Notes to Financial Statements.
11
Statement of Changes in Net Assets |
SIX MONTHS ENDED MAY 31, 2016 (UNAUDITED) AND YEAR ENDED NOVEMBER 30, 2015 | ||||||
Increase (Decrease) in Net Assets | May 31, 2016 | November 30, 2015 | ||||
Operations | ||||||
Net investment income (loss) | $ | 529,238 | $ | 4,307 | ||
Net realized gain (loss) | (20,048,848 | ) | 52,138,255 | |||
Change in net unrealized appreciation (depreciation) | 20,684,872 | (26,938,339 | ) | |||
Net increase (decrease) in net assets resulting from operations | 1,165,262 | 25,204,223 | ||||
Distributions to Shareholders | ||||||
From net investment income: | ||||||
Investor Class | (2,556,611 | ) | (1,194,380 | ) | ||
Institutional Class | (154,815 | ) | (96,309 | ) | ||
A Class | (18,092 | ) | — | |||
R Class | (75 | ) | — | |||
Decrease in net assets from distributions | (2,729,593 | ) | (1,290,689 | ) | ||
Capital Share Transactions | ||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | (24,089,452 | ) | (57,317,465 | ) | ||
Redemption Fees | ||||||
Increase in net assets from redemption fees | 3,285 | 11,710 | ||||
Net increase (decrease) in net assets | (25,650,498 | ) | (33,392,221 | ) | ||
Net Assets | ||||||
Beginning of period | 536,726,952 | 570,119,173 | ||||
End of period | $ | 511,076,454 | $ | 536,726,952 | ||
Undistributed (distributions in excess of) net investment income | $ | (544,657 | ) | $ | 1,655,698 |
See Notes to Financial Statements.
12
Notes to Financial Statements |
MAY 31, 2016 (UNAUDITED)
1. Organization
American Century World Mutual 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 Discovery Fund (the fund) is one fund in a series issued by the corporation. The fund's investment objective is to seek capital growth.
The fund offers the Investor Class, the Institutional Class, the A Class, the C Class and the 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. The share classes differ principally in their respective sales charges and distribution and shareholder servicing expenses and arrangements. The Institutional Class is made available to institutional shareholders or through financial intermediaries whose clients do not require the same level of shareholder and administrative services as shareholders of other classes. As a result, the Institutional Class is charged a lower unified management fee.
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
13
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 and net realized gains, if any, are generally declared and paid annually. The fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code, in all events in a manner consistent with provisions of the 1940 Act.
Redemption Fees — The fund may impose a 2.00% redemption fee on shares held less than 60 days. The fee may not be applicable to all classes. The redemption fee is retained by the fund and helps cover
14
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 rate of the fee is determined by applying a fee rate calculation formula. This formula takes into account the fund’s assets as well as certain assets, if any, of other clients of the investment advisor outside the American Century Investments family of funds (such as subadvised funds and separate accounts) that have very similar investment teams and investment strategies (strategy assets). The annual management fee schedule ranges from 1.200% to 1.750% for the Investor Class, A Class, C Class and R Class. The annual management fee schedule ranges from 1.000% to 1.550% for the Institutional Class. The effective annual management fee for each class for the six months ended May 31, 2016 was 1.63% for the Investor Class, A Class, C Class and R Class and 1.43% for the Institutional Class.
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 six months ended May 31, 2016 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
significant interfund transactions during the period.
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the six months ended May 31, 2016 were $322,359,401 and $355,060,557, respectively.
15
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended May 31, 2016 | Year ended November 30, 2015 | |||||||||
Shares | Amount | Shares | Amount | |||||||
Investor Class/Shares Authorized | 380,000,000 | 400,000,000 | ||||||||
Sold | 341,882 | $ | 4,236,144 | 1,973,067 | $ | 26,172,142 | ||||
Issued in reinvestment of distributions | 204,271 | 2,418,572 | 89,395 | 1,141,578 | ||||||
Redeemed | (2,408,710 | ) | (29,815,612 | ) | (6,612,888 | ) | (84,604,777 | ) | ||
(1,862,557 | ) | (23,160,896 | ) | (4,550,426 | ) | (57,291,057 | ) | |||
Institutional Class/Shares Authorized | 40,000,000 | 40,000,000 | ||||||||
Sold | 77,786 | 954,103 | 207,249 | 2,735,825 | ||||||
Issued in reinvestment of distributions | 12,934 | 154,815 | 7,460 | 96,309 | ||||||
Redeemed | (145,160 | ) | (1,813,717 | ) | (282,242 | ) | (3,687,250 | ) | ||
(54,440 | ) | (704,799 | ) | (67,533 | ) | (855,116 | ) | |||
A Class/Shares Authorized | 30,000,000 | 30,000,000 | ||||||||
Sold | 39,596 | 481,682 | 226,922 | 2,883,104 | ||||||
Issued in reinvestment of distributions | 1,566 | 18,092 | — | — | ||||||
Redeemed | (78,657 | ) | (950,335 | ) | (165,320 | ) | (2,093,362 | ) | ||
(37,495 | ) | (450,561 | ) | 61,602 | 789,742 | |||||
C Class/Shares Authorized | 30,000,000 | 20,000,000 | ||||||||
Sold | 51,024 | 624,091 | 38,351 | 487,665 | ||||||
Redeemed | (31,608 | ) | (375,576 | ) | (18,489 | ) | (226,895 | ) | ||
19,416 | 248,515 | 19,862 | 260,770 | |||||||
R Class/Shares Authorized | 30,000,000 | 20,000,000 | ||||||||
Sold | 1,287 | 15,794 | 2,256 | 28,656 | ||||||
Issued in reinvestment of distributions | 6 | 75 | — | — | ||||||
Redeemed | (2,983 | ) | (37,580 | ) | (18,745 | ) | (250,460 | ) | ||
(1,690 | ) | (21,711 | ) | (16,489 | ) | (221,804 | ) | |||
Net increase (decrease) | (1,936,766 | ) | $ | (24,089,452 | ) | (4,552,984 | ) | $ | (57,317,465 | ) |
6. Fair Value Measurements
The fund’s investments valuation process is based on several considerations and may use multiple inputs to determine the fair value of the investments held by the fund. In conformity with accounting principles generally accepted in the United States of America, the inputs used to determine a valuation are classified into three broad levels.
• | Level 1 valuation inputs consist of unadjusted quoted prices in an active market for identical investments. |
• | Level 2 valuation inputs consist of direct or indirect observable market data (including quoted prices for comparable investments, evaluations of subsequent market events, interest rates, prepayment speeds, credit risk, etc.). These inputs also consist of quoted prices for identical investments initially expressed in local currencies that are adjusted through translation into U.S. dollars. |
• | Level 3 valuation inputs consist of unobservable data (including a fund’s own assumptions). |
The level classification is based on the lowest level input that is significant to the fair valuation measurement. The valuation inputs are not necessarily an indication of the risks associated with investing in these securities or other financial instruments. There were no significant transfers between levels during the period.
16
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 | ||||||||
Canada | $ | 7,756,649 | $ | 28,684,044 | — | |||
China | 7,181,528 | 17,595,939 | — | |||||
France | 4,313,353 | 51,607,872 | — | |||||
Israel | 4,243,248 | — | — | |||||
Russia | 5,313,770 | — | — | |||||
Other Countries | — | 375,632,067 | — | |||||
Temporary Cash Investments | 2,330,514 | 5,093,000 | — | |||||
$ | 31,139,062 | $ | 478,612,922 | — |
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 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 May 31, 2016, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $ | 452,383,883 | |
Gross tax appreciation of investments | $ | 67,917,799 | |
Gross tax depreciation of investments | (10,549,698 | ) | |
Net tax appreciation (depreciation) of investments | $ | 57,368,101 |
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 November 30, 2015, the fund had accumulated short-term capital losses of $(114,127,606), which represent net capital loss carryovers that may be used to offset future realized capital gains for federal income tax purposes. Future capital loss carryover utilization in any given year may be subject to Internal Revenue Code limitations. Capital loss carryovers expire in 2017.
As of November 30, 2015, the fund had post-October capital loss deferrals of $(271,029), 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.
17
Financial Highlights |
For a Share Outstanding Throughout the Years Ended November 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 | |||||||||||||
2016(3) | $12.90 | 0.01 | 0.04 | 0.05 | (0.07) | $12.88 | 0.49% | 1.64%(4) | 0.20%(4) | 64% | $482,176 | ||
2015 | $12.35 | —(5) | 0.58 | 0.58 | (0.03) | $12.90 | 4.61% | 1.67% | 0.00%(6) | 171% | $506,817 | ||
2014 | $12.70 | 0.03 | (0.24) | (0.21) | (0.14) | $12.35 | (1.73)% | 1.61% | 0.20% | 134% | $541,410 | ||
2013 | $10.08 | —(5) | 2.79 | 2.79 | (0.17) | $12.70 | 27.97% | 1.56% | 0.03% | 157% | $620,359 | ||
2012 | $9.22 | 0.04 | 0.82 | 0.86 | —(5) | $10.08 | 9.23% | 1.50% | 0.42% | 154% | $582,331 | ||
2011 | $9.88 | 0.02 | (0.68) | (0.66) | — | $9.22 | (6.58)% | 1.42% | 0.14% | 167% | $660,971 | ||
Institutional Class | |||||||||||||
2016(3) | $13.06 | 0.03 | 0.03 | 0.06 | (0.09) | $13.03 | 0.61% | 1.44%(4) | 0.40%(4) | 64% | $21,657 | ||
2015 | $12.50 | 0.03 | 0.58 | 0.61 | (0.05) | $13.06 | 4.84% | 1.47% | 0.20% | 171% | $22,415 | ||
2014 | $12.86 | 0.06 | (0.25) | (0.19) | (0.17) | $12.50 | (1.55)% | 1.41% | 0.40% | 134% | $22,304 | ||
2013 | $10.20 | 0.05 | 2.80 | 2.85 | (0.19) | $12.86 | 28.16% | 1.36% | 0.23% | 157% | $27,341 | ||
2012 | $9.34 | 0.05 | 0.83 | 0.88 | (0.02) | $10.20 | 9.44% | 1.30% | 0.62% | 154% | $48,794 | ||
2011 | $9.99 | 0.03 | (0.68) | (0.65) | — | $9.34 | (6.41)% | 1.22% | 0.34% | 167% | $97,063 |
For a Share Outstanding Throughout the Years Ended November 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) | |||
A Class | |||||||||||||
2016(3) | $12.56 | —(5) | 0.04 | 0.04 | (0.04) | $12.56 | 0.40% | 1.89%(4) | (0.05)%(4) | 64% | $6,125 | ||
2015 | $12.03 | (0.03) | 0.56 | 0.53 | — | $12.56 | 4.32% | 1.92% | (0.25)% | 171% | $6,596 | ||
2014 | $12.36 | (0.01) | (0.22) | (0.23) | (0.10) | $12.03 | (1.92)% | 1.86% | (0.05)% | 134% | $5,576 | ||
2013 | $9.81 | (0.03) | 2.72 | 2.69 | (0.14) | $12.36 | 27.69% | 1.81% | (0.22)% | 157% | $3,585 | ||
2012 | $9.00 | 0.01 | 0.80 | 0.81 | — | $9.81 | 8.88% | 1.75% | 0.17% | 154% | $2,838 | ||
2011 | $9.67 | (0.02) | (0.65) | (0.67) | — | $9.00 | (6.83)% | 1.67% | (0.11)% | 167% | $3,182 | ||
C Class | |||||||||||||
2016(3) | $12.45 | (0.05) | 0.04 | (0.01) | — | $12.44 | 0.00% | 2.64%(4) | (0.80)%(4) | 64% | $961 | ||
2015 | $12.01 | (0.12) | 0.56 | 0.44 | — | $12.45 | 3.58% | 2.67% | (1.00)% | 171% | $720 | ||
2014 | $12.39 | (0.10) | (0.23) | (0.33) | (0.05) | $12.01 | (2.74)% | 2.61% | (0.80)% | 134% | $456 | ||
2013 | $9.83 | (0.14) | 2.76 | 2.62 | (0.06) | $12.39 | 26.75% | 2.56% | (0.97)% | 157% | $342 | ||
2012 | $9.08 | (0.05) | 0.80 | 0.75 | — | $9.83 | 8.14% | 2.50% | (0.58)% | 154% | $93 | ||
2011 | $9.82 | (0.07) | (0.67) | (0.74) | — | $9.08 | (7.43)% | 2.42% | (0.86)% | 167% | $87 |
For a Share Outstanding Throughout the Years Ended November 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) | |||
R Class | |||||||||||||
2016(3) | $12.73 | (0.02) | 0.04 | 0.02 | (0.01) | $12.74 | 0.21% | 2.14%(4) | (0.30)%(4) | 64% | $158 | ||
2015 | $12.22 | (0.08) | 0.59 | 0.51 | — | $12.73 | 4.09% | 2.17% | (0.50)% | 171% | $179 | ||
2014 | $12.55 | (0.05) | (0.22) | (0.27) | (0.06) | $12.22 | (2.19)% | 2.11% | (0.30)% | 134% | $374 | ||
2013 | $9.96 | (0.06) | 2.76 | 2.70 | (0.11) | $12.55 | 27.35% | 2.06% | (0.47)% | 157% | $388 | ||
2012 | $9.15 | —(5) | 0.81 | 0.81 | — | $9.96 | 8.73% | 2.00% | (0.08)% | 154% | $290 | ||
2011 | $9.86 | (0.04) | (0.67) | (0.71) | — | $9.15 | (7.10)% | 1.92% | (0.36)% | 167% | $27 |
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 May 31, 2016 (unaudited). |
(4) | Annualized. |
(5) | Per-share amount was less than $0.005. |
(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 IRAs 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.
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.
Distributions you receive from 403(b), 457 and qualified plans are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
A description of the policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund is available without charge, upon request, by calling 1-800-345-2021. It is also available on the "About Us" page of American Century Investments’ website at americancentury.com and on the Securities and Exchange Commission’s website at sec.gov. Information regarding how the investment advisor voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the "About Us" page at americancentury.com. It is also available at sec.gov.
Quarterly Portfolio Disclosure
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-Q. The fund’s Forms N-Q are available on the SEC’s website at sec.gov, and may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The fund also makes its complete schedule of portfolio holdings for the most recent quarter of its fiscal year available on its
website at americancentury.com and, upon request, by calling 1-800-345-2021.
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 World Mutual 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. | ||
©2016 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-89424 1607 |
![](https://capedge.com/proxy/N-CSRS/0000872825-16-000153/acihorizblkb99.jpg)
Semiannual Report | |
May 31, 2016 | |
International Growth Fund |
Table of Contents |
Any opinions expressed in this report reflect those of the author as of the date of the report, and do not necessarily represent the opinions of American Century Investments® or any other person in the American Century Investments organization. Any such opinions are subject to change at any time based upon market or other conditions and American Century Investments disclaims any responsibility to update such opinions. These opinions may not be relied upon as investment advice and, because investment decisions made by American Century Investments funds are based on numerous factors, may not be relied upon as an indication of trading intent on behalf of any American Century Investments fund. Security examples are used for representational purposes only and are not intended as recommendations to purchase or sell securities. Performance information for comparative indices and securities is provided to American Century Investments by third party vendors. To the best of American Century Investments’ knowledge, such information is accurate at the time of printing.
President’s Letter |
![]() | Dear Investor: Thank you for reviewing this semiannual report for the six months ended May 31, 2016. It provides a macroeconomic and financial market overview (below), followed by a schedule of fund investments and other financial information. For additional commentary and information on fund performance, key factors that affected asset returns, and other insights regarding the investment markets, we encourage you to visit our website, americancentury.com. |
Jonathan Thomas |
Economic Growth Concerns and Central Bank Policies Triggered Market Volatility
Global macroeconomic events—in the form of recession fears and resulting central bank policy moves—triggered widespread market volatility. Stock index graphs of the six months look like a square root sign (√). From late December to mid-February, stock market indices declined sharply on a confluence of factors that carried over from last summer’s similar sell-off, including concerns about China’s slowing economic growth, its possible contagion to the global economy, an energy price collapse, and Chinese currency devaluations. Furthermore, the U.S. Federal Reserve (Fed) started to raise interest rates in December and projected four more rate hikes in 2016, which put additional pressure on commodity prices and emerging markets.
These factors combined to drive down stock prices and U.S. Treasury yields until mid-February, when the markets reversed, partly in response to indications that the global oil supply glut could be reduced. Oil prices started to rise, China stabilized, and stock markets rallied. Central bank stimulus governed the markets, with the Bank of Japan resorting to negative interest rates, the Fed holding rates steady while reducing its rate hike projections, and the European Central Bank announcing significant additional stimulus.
Modest broad market gains and losses for the reporting period do not capture its volatility, which generally pushed returns for bonds (and higher-yielding, more defensive stock sectors such as utilities and telecommunication services) ahead of broad stock returns. Also, the divergence between generally weaker global economic conditions and the relatively stable U.S. economy helped U.S. stocks generally outpace their non-U.S. counterparts.
Looking ahead, we expect more market volatility this year due to global economic and political headwinds, uncertainty surrounding future Fed moves, and the U.S. presidential election. This could present both challenges and opportunities for active investment managers. In this environment, we continue to believe in a disciplined, diversified, risk-aware investment approach, using professionally managed portfolios to meet financial goals. We appreciate your trust in us.
Sincerely,
![](https://capedge.com/proxy/N-CSRS/0000872825-16-000153/jonathanthomassig.jpg)
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
2
Fund Characteristics |
MAY 31, 2016 | |
Top Ten Holdings | % of net assets |
Roche Holding AG | 3.7% |
Reckitt Benckiser Group plc | 2.6% |
AIA Group Ltd. | 2.0% |
Novo Nordisk A/S, B Shares | 2.0% |
Pandora A/S | 1.8% |
Intesa Sanpaolo SpA | 1.8% |
Shire plc | 1.8% |
TOTAL SA | 1.6% |
Tencent Holdings Ltd. | 1.5% |
Wolseley plc | 1.5% |
Types of Investments in Portfolio | % of net assets |
Common Stocks | 98.7% |
Temporary Cash Investments | 1.0% |
Other Assets and Liabilities | 0.3% |
Investments by Country | % of net assets |
United Kingdom | 21.9% |
Japan | 14.9% |
France | 14.8% |
Germany | 6.3% |
Switzerland | 5.0% |
Denmark | 4.8% |
Ireland | 4.2% |
Netherlands | 3.8% |
Sweden | 3.1% |
China | 2.8% |
Belgium | 2.6% |
Hong Kong | 2.5% |
Spain | 2.0% |
Other Countries | 10.0% |
Cash and Equivalents* | 1.3% |
*Includes temporary cash investments and other assets and liabilities.
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 December 1, 2015 to May 31, 2016.
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 Institutional 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 12/1/15 | Ending Account Value 5/31/16 | Expenses Paid During Period(1) 12/1/15 - 5/31/16 | Annualized Expense Ratio(1) | |
Actual | ||||
Investor Class | $1,000 | $965.20 | $5.80 | 1.18% |
Institutional Class | $1,000 | $966.60 | $4.82 | 0.98% |
A Class | $1,000 | $964.20 | $7.02 | 1.43% |
C Class | $1,000 | $960.10 | $10.68 | 2.18% |
R Class | $1,000 | $962.60 | $8.24 | 1.68% |
R6 Class | $1,000 | $967.00 | $4.08 | 0.83% |
Hypothetical | ||||
Investor Class | $1,000 | $1,019.10 | $5.96 | 1.18% |
Institutional Class | $1,000 | $1,020.10 | $4.95 | 0.98% |
A Class | $1,000 | $1,017.85 | $7.21 | 1.43% |
C Class | $1,000 | $1,014.10 | $10.98 | 2.18% |
R Class | $1,000 | $1,016.60 | $8.47 | 1.68% |
R6 Class | $1,000 | $1,020.85 | $4.19 | 0.83% |
(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 183, the number of days in the most recent fiscal half-year, divided by 366, to reflect the one-half year period. |
5
Schedule of Investments |
MAY 31, 2016 (UNAUDITED)
Shares | Value | |||
COMMON STOCKS — 98.7% | ||||
Austria — 1.0% | ||||
Erste Group Bank AG(1) | 614,110 | $ | 16,433,116 | |
Belgium — 2.6% | ||||
Anheuser-Busch InBev SA/NV | 158,852 | 20,122,614 | ||
KBC Groep NV(1) | 293,360 | 17,368,121 | ||
UCB SA | 61,590 | 4,450,902 | ||
41,941,637 | ||||
Canada — 1.9% | ||||
Alimentation Couche-Tard, Inc., B Shares | 366,310 | 16,117,808 | ||
Canadian Pacific Railway Ltd. | 106,190 | 13,743,521 | ||
29,861,329 | ||||
China — 2.8% | ||||
Alibaba Group Holding Ltd. ADR(1) | 107,790 | 8,838,780 | ||
Baidu, Inc. ADR(1) | 62,378 | 11,136,968 | ||
Tencent Holdings Ltd. | 1,122,000 | 25,022,373 | ||
44,998,121 | ||||
Denmark — 4.8% | ||||
DSV A/S | 358,560 | 16,354,503 | ||
Novo Nordisk A/S, B Shares | 569,910 | 31,698,137 | ||
Pandora A/S | 200,072 | 29,735,296 | ||
77,787,936 | ||||
France — 14.8% | ||||
Accor SA | 192,160 | 8,360,918 | ||
Arkema SA | 134,120 | 11,004,121 | ||
Cie de Saint-Gobain | 291,740 | 13,023,136 | ||
Criteo SA ADR(1) | 213,480 | 9,578,847 | ||
Essilor International SA | 155,595 | 20,315,963 | ||
Iliad SA | 48,000 | 10,518,551 | ||
Kering | 84,050 | 13,574,175 | ||
Legrand SA | 277,820 | 15,281,174 | ||
LVMH Moet Hennessy Louis Vuitton SE | 102,620 | 16,447,654 | ||
Pernod Ricard SA | 98,460 | 10,726,192 | ||
Publicis Groupe SA | 198,280 | 14,353,296 | ||
Rexel SA | 535,400 | 8,188,075 | ||
Thales SA | 196,200 | 16,996,992 | ||
TOTAL SA | 520,920 | 25,314,108 | ||
Valeo SA | 143,528 | 21,662,826 | ||
Veolia Environnement SA | 566,190 | 12,712,824 | ||
Vinci SA | 149,710 | 11,258,796 | ||
239,317,648 | ||||
Germany — 6.3% | ||||
adidas AG | 166,160 | 21,288,698 | ||
Deutsche Boerse AG | 163,260 | 14,305,039 | ||
Fresenius Medical Care AG & Co. KGaA | 249,920 | 21,689,737 | ||
HeidelbergCement AG | 229,720 | 19,652,932 | ||
Symrise AG | 145,430 | 9,124,620 |
6
Shares | Value | |||
Zalando SE(1) | 547,622 | $ | 16,052,319 | |
102,113,345 | ||||
Hong Kong — 2.5% | ||||
AIA Group Ltd. | 5,465,200 | 31,965,169 | ||
Sands China Ltd. | 2,314,400 | 8,875,478 | ||
40,840,647 | ||||
India — 0.6% | ||||
Tata Motors Ltd.(1) | 1,320,900 | 9,023,582 | ||
Indonesia — 0.9% | ||||
Astra International Tbk PT | 15,612,300 | 7,543,278 | ||
Bank Mandiri Persero Tbk PT | 9,507,600 | 6,281,559 | ||
13,824,837 | ||||
Ireland — 4.2% | ||||
Bank of Ireland(1) | 42,182,022 | 12,859,872 | ||
CRH plc | 611,060 | 18,516,970 | ||
Ryanair Holdings plc ADR | 229,958 | 20,098,329 | ||
Smurfit Kappa Group plc | 568,320 | 15,505,011 | ||
66,980,182 | ||||
Israel — 0.7% | ||||
Mobileye NV(1) | 282,420 | 10,723,487 | ||
Italy — 1.8% | ||||
Intesa Sanpaolo SpA | 11,188,240 | 28,731,365 | ||
Japan — 14.9% | ||||
Calbee, Inc. | 381,000 | 14,072,245 | ||
Daikin Industries Ltd. | 136,700 | 11,722,610 | ||
Daito Trust Construction Co. Ltd. | 101,200 | 14,709,116 | ||
Isuzu Motors Ltd. | 305,300 | 3,683,395 | ||
Kao Corp. | 167,900 | 9,250,534 | ||
Keyence Corp. | 18,800 | 11,952,138 | ||
Kubota Corp. | 1,445,600 | 21,285,509 | ||
Mitsubishi Estate Co. Ltd. | 475,000 | 9,177,428 | ||
Murata Manufacturing Co. Ltd. | 126,200 | 14,758,568 | ||
Nitori Holdings Co. Ltd. | 156,800 | 15,944,083 | ||
Olympus Corp. | 392,600 | 16,645,659 | ||
Ono Pharmaceutical Co. Ltd. | 372,100 | 16,545,992 | ||
ORIX Corp. | 1,454,600 | 20,229,232 | ||
Ryohin Keikaku Co. Ltd. | 98,000 | 22,593,940 | ||
Seven & i Holdings Co. Ltd. | 507,000 | 21,720,395 | ||
Suntory Beverage & Food Ltd. | 361,200 | 17,059,430 | ||
241,350,274 | ||||
Mexico — 0.5% | ||||
Cemex SAB de CV ADR(1) | 1,258,743 | 8,005,605 | ||
Netherlands — 3.8% | ||||
ASML Holding NV | 142,990 | 14,223,349 | ||
Koninklijke DSM NV | 201,210 | 11,975,146 | ||
Koninklijke Vopak NV | 213,030 | 11,100,016 | ||
NXP Semiconductors NV(1) | 247,920 | 23,425,961 | ||
60,724,472 | ||||
Norway — 0.9% | ||||
Statoil ASA | 955,429 | 15,235,516 |
7
Shares | Value | |||
Portugal — 1.1% | ||||
Jeronimo Martins SGPS SA | 1,142,641 | $ | 18,510,999 | |
South Korea — 0.6% | ||||
Amorepacific Corp. | 29,440 | 10,313,140 | ||
Spain — 2.0% | ||||
Cellnex Telecom SAU | 576,605 | 9,302,616 | ||
Industria de Diseno Textil SA | 683,830 | 23,099,820 | ||
32,402,436 | ||||
Sweden — 3.1% | ||||
Hexagon AB, B Shares | 489,490 | 19,007,212 | ||
Lundin Petroleum AB(1) | 779,770 | 13,984,977 | ||
Svenska Cellulosa AB SCA, B Shares | 508,252 | 16,268,744 | ||
49,260,933 | ||||
Switzerland — 5.0% | ||||
Actelion Ltd. | 58,740 | 9,638,324 | ||
Julius Baer Group Ltd. | 263,190 | 11,711,161 | ||
Roche Holding AG | 227,024 | 59,588,090 | ||
80,937,575 | ||||
United Kingdom — 21.9% | ||||
Admiral Group plc | 509,560 | 14,524,255 | ||
ARM Holdings plc | 314,600 | 4,497,274 | ||
Ashtead Group plc | 1,269,045 | 17,939,084 | ||
ASOS plc(1) | 167,730 | 8,492,892 | ||
Associated British Foods plc | 206,385 | 8,800,136 | ||
Auto Trader Group plc | 3,700,300 | 21,062,160 | ||
Aviva plc | 2,317,100 | 15,095,158 | ||
Bunzl plc | 617,280 | 18,274,122 | ||
Carnival plc | 338,230 | 16,699,849 | ||
Compass Group plc | 745,630 | 13,898,737 | ||
Liberty Global plc, Class A(1) | 223,440 | 8,345,484 | ||
London Stock Exchange Group plc | 495,050 | 19,610,101 | ||
Pearson plc | 682,300 | 8,286,132 | ||
Prudential plc | 897,790 | 17,944,331 | ||
Reckitt Benckiser Group plc | 423,356 | 42,155,267 | ||
Rio Tinto plc | 553,510 | 15,572,557 | ||
Shire plc | 464,160 | 28,638,531 | ||
St. James's Place plc | 1,343,021 | 18,041,396 | ||
Weir Group plc (The) | 432,900 | 7,517,617 | ||
Wolseley plc | 418,480 | 24,553,329 | ||
Worldpay Group plc(1) | 6,047,256 | 24,269,918 | ||
354,218,330 | ||||
TOTAL COMMON STOCKS (Cost $1,434,902,583) | 1,593,536,512 | |||
TEMPORARY CASH INVESTMENTS — 1.0% | ||||
Repurchase Agreement, Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 3.75%, 11/15/43, valued at $11,460,800), at 0.10%, dated 5/31/16, due 6/1/16 (Delivery value $11,236,031) | 11,236,000 | |||
State Street Institutional Liquid Reserves Fund, Premier Class | 5,140,916 | 5,140,916 | ||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $16,376,916) | 16,376,916 | |||
TOTAL INVESTMENT SECURITIES — 99.7% (Cost $1,451,279,499) | 1,609,913,428 | |||
OTHER ASSETS AND LIABILITIES — 0.3% | 5,494,661 | |||
TOTAL NET ASSETS — 100.0% | $ | 1,615,408,089 |
8
MARKET SECTOR DIVERSIFICATION | ||
(as a % of net assets) | ||
Consumer Discretionary | 17.6 | % |
Financials | 16.7 | % |
Industrials | 14.0 | % |
Health Care | 13.0 | % |
Consumer Staples | 12.7 | % |
Information Technology | 12.4 | % |
Materials | 6.9 | % |
Energy | 3.4 | % |
Telecommunication Services | 1.2 | % |
Utilities | 0.8 | % |
Cash and Equivalents* | 1.3 | % |
*Includes temporary cash investments and other assets and liabilities.
NOTES TO SCHEDULE OF INVESTMENTS | ||
ADR | - | American Depositary Receipt |
(1) | Non-income producing. |
See Notes to Financial Statements.
9
Statement of Assets and Liabilities |
MAY 31, 2016 (UNAUDITED) | |||
Assets | |||
Investment securities, at value (cost of $1,451,279,499) | $ | 1,609,913,428 | |
Foreign currency holdings, at value (cost of $2,829,708) | 2,792,655 | ||
Receivable for capital shares sold | 376,283 | ||
Dividends and interest receivable | 5,700,152 | ||
Other assets | 406,108 | ||
1,619,188,626 | |||
Liabilities | |||
Payable for investments purchased | 1,483,342 | ||
Payable for capital shares redeemed | 564,377 | ||
Accrued management fees | 1,553,188 | ||
Distribution and service fees payable | 35,963 | ||
Accrued foreign taxes | 143,667 | ||
3,780,537 | |||
Net Assets | $ | 1,615,408,089 | |
Net Assets Consist of: | |||
Capital (par value and paid-in surplus) | $ | 1,483,288,400 | |
Distributions in excess of net investment income | (3,144,084 | ) | |
Accumulated net realized loss | (23,116,539 | ) | |
Net unrealized appreciation | 158,380,312 | ||
$ | 1,615,408,089 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | ||||
Investor Class, $0.01 Par Value | $1,353,971,589 | 121,438,155 | $11.15 | |||
Institutional Class, $0.01 Par Value | $69,139,969 | 6,236,831 | $11.09 | |||
A Class, $0.01 Par Value | $128,085,503 | 11,404,519 | $11.23* | |||
C Class, $0.01 Par Value | $8,988,474 | 820,494 | $10.95 | |||
R Class, $0.01 Par Value | $3,554,553 | 313,435 | $11.34 | |||
R6 Class, $0.01 Par Value | $51,668,001 | 4,659,617 | $11.09 |
See Notes to Financial Statements.
10
Statement of Operations |
FOR THE SIX MONTHS ENDED MAY 31, 2016 (UNAUDITED) | |||
Investment Income (Loss) | |||
Income: | |||
Dividends (net of foreign taxes withheld of $2,408,055) | $ | 21,130,507 | |
Interest | 12,100 | ||
21,142,607 | |||
Expenses: | |||
Management fees | 9,190,375 | ||
Distribution and service fees: | |||
A Class | 162,581 | ||
C Class | 46,309 | ||
R Class | 8,328 | ||
Directors' fees and expenses | 27,118 | ||
Other expenses | 20,922 | ||
9,455,633 | |||
Net investment income (loss) | 11,686,974 | ||
Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investment transactions | (12,075,154 | ) | |
Foreign currency transactions | (253,616 | ) | |
(12,328,770 | ) | ||
Change in net unrealized appreciation (depreciation) on: | |||
Investments (includes (increase) decrease in accrued foreign taxes of $(143,667)) | (57,578,855 | ) | |
Translation of assets and liabilities in foreign currencies | 219,845 | ||
(57,359,010 | ) | ||
Net realized and unrealized gain (loss) | (69,687,780 | ) | |
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | (58,000,806 | ) |
See Notes to Financial Statements.
11
Statement of Changes in Net Assets |
SIX MONTHS ENDED MAY 31, 2016 (UNAUDITED) AND YEAR ENDED NOVEMBER 30, 2015 | ||||||
Increase (Decrease) in Net Assets | May 31, 2016 | November 30, 2015 | ||||
Operations | ||||||
Net investment income (loss) | $ | 11,686,974 | $ | 10,786,685 | ||
Net realized gain (loss) | (12,328,770 | ) | 87,356,870 | |||
Change in net unrealized appreciation (depreciation) | (57,359,010 | ) | (129,770,763 | ) | ||
Net increase (decrease) in net assets resulting from operations | (58,000,806 | ) | (31,627,208 | ) | ||
Distributions to Shareholders | ||||||
From net investment income: | ||||||
Investor Class | (7,144,126 | ) | (9,233,796 | ) | ||
Institutional Class | (467,296 | ) | (974,176 | ) | ||
A Class | (436,077 | ) | (1,277,492 | ) | ||
R Class | (4,047 | ) | (5,076 | ) | ||
R6 Class | (376,203 | ) | (72,931 | ) | ||
From net realized gains: | ||||||
Investor Class | (71,718,645 | ) | (90,129,091 | ) | ||
Institutional Class | (3,592,483 | ) | (7,644,959 | ) | ||
A Class | (7,082,263 | ) | (17,916,622 | ) | ||
C Class | (530,306 | ) | (608,755 | ) | ||
R Class | (173,171 | ) | (127,609 | ) | ||
R6 Class | (2,461,989 | ) | (499,554 | ) | ||
Decrease in net assets from distributions | (93,986,606 | ) | (128,490,061 | ) | ||
Capital Share Transactions | ||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | 60,406,390 | (115,044,232 | ) | |||
Redemption Fees | ||||||
Increase in net assets from redemption fees | 6,065 | 63,558 | ||||
Net increase (decrease) in net assets | (91,574,957 | ) | (275,097,943 | ) | ||
Net Assets | ||||||
Beginning of period | 1,706,983,046 | 1,982,080,989 | ||||
End of period | $ | 1,615,408,089 | $ | 1,706,983,046 | ||
Distributions in excess of net investment income | $ | (3,144,084 | ) | $ | (6,403,309 | ) |
See Notes to Financial Statements.
12
Notes to Financial Statements |
MAY 31, 2016 (UNAUDITED)
1. Organization
American Century World Mutual 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 Growth Fund (the fund) is one fund in a series issued by the corporation. The fund's investment objective is to seek capital growth.
The fund offers the Investor Class, the Institutional Class, the A Class, the C Class, the R Class and the R6 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. The share classes differ principally in their respective sales charges and distribution and shareholder servicing expenses and arrangements. The Institutional Class and R6 Class shareholders do not require the same level of shareholder and administrative services from American Century Investment Management, Inc. (ACIM) (the investment advisor) as shareholders of other classes. In addition, financial intermediaries do not receive any service, distribution or administrative fees for the R6 Class. As a result, the Institutional Class and R6 Class are charged lower unified management fees.
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
13
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. 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.
Repurchase Agreements — The fund may enter into repurchase agreements with institutions that ACIM has determined are creditworthy pursuant to criteria adopted by the Board of Directors. The fund requires that the collateral, represented by securities, received in a repurchase transaction be transferred to the custodian in a manner sufficient to enable the fund to obtain those securities in the event of a default under the repurchase agreement. ACIM monitors, on a daily basis, the securities transferred to ensure the value, including accrued interest, of the securities under each repurchase agreement is equal to or greater than amounts owed to the fund under each repurchase agreement.
Joint Trading Account — Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the fund, along with certain other funds in the American Century Investments family of funds, may transfer uninvested cash balances into a joint trading account. These balances are invested in one or more repurchase agreements that are collateralized by U.S. Treasury or Agency obligations.
Income Tax Status — It is the fund’s policy to distribute substantially all net investment income and net realized gains to shareholders and to otherwise qualify as a regulated investment company under provisions of the Internal Revenue Code. Accordingly, no provision has been made for income taxes. The fund files U.S. federal, state, local and non-U.S. tax returns as applicable. The fund's tax returns are subject to examination by the relevant taxing authority until expiration of the applicable statute of limitations, which is generally three years from the date of filing but can be longer in certain jurisdictions. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination and for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Multiple Class — All shares of the fund represent an equal pro rata interest in the net assets of the class to which such shares belong, and have identical voting, dividend, liquidation and other rights and the same terms and conditions, except for class specific expenses and exclusive rights to vote on matters affecting only individual classes. Income, non-class specific expenses, and realized and unrealized capital gains and losses of the fund are allocated to each class of shares based on their relative net assets.
Distributions to Shareholders — Distributions from net investment income and net realized gains, if any, are generally declared and paid annually. The fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code, in all events in a manner consistent with
14
provisions of the 1940 Act. 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).
Redemption Fees — The fund may impose a 2.00% redemption fee on shares held less than 60 days. The fee may not be applicable to all classes. The redemption fee is retained by the fund and helps 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. Various funds issued by American Century Asset Allocation Portfolios, Inc. and American Century Strategic Asset Allocations, Inc. own, in aggregate, 17% 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 rate of the fee is determined by applying a fee rate calculation formula. This formula takes into account the fund’s assets as well as certain assets, if any, of other clients of the investment advisor outside the American Century Investments family of funds (such as subadvised funds and separate accounts) that have very similar investment teams and investment strategies (strategy assets). The strategy assets of the fund also include the assets of NT International Growth Fund, one fund in a series issued by the corporation. The annual management fee schedule ranges from 1.050% to 1.500% for the Investor Class, A Class, C Class and R Class. The annual management fee schedule ranges from 0.850% to 1.300% for the Institutional Class and 0.700% to 1.150% for the R6 Class. The effective annual management fee for each class for the six months ended May 31, 2016 was 1.17% for the Investor Class, A Class, C Class and R Class, 0.97% for the Institutional Class and 0.82% for the R6 Class.
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 six months ended May 31, 2016 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
significant interfund transactions during the period.
15
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the six months ended May 31, 2016 were $522,104,391 and $543,248,191, respectively.
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended May 31, 2016 | Year ended November 30, 2015 | |||||||||
Shares | Amount | Shares | Amount | |||||||
Investor Class/Shares Authorized | 875,000,000 | 840,000,000 | ||||||||
Sold | 6,183,807 | $ | 66,975,270 | 21,692,103 | $ | 276,534,085 | ||||
Issued in reinvestment of distributions | 6,787,008 | 76,693,189 | 8,081,634 | 96,692,769 | ||||||
Redeemed | (8,511,848 | ) | (94,987,415 | ) | (26,388,283 | ) | (331,250,886 | ) | ||
4,458,967 | 48,681,044 | 3,385,454 | 41,975,968 | |||||||
Institutional Class/Shares Authorized | 70,000,000 | 70,000,000 | ||||||||
Sold | 759,556 | 8,219,189 | 1,172,500 | 14,465,900 | ||||||
Issued in reinvestment of distributions | 361,512 | 4,059,779 | 719,790 | 8,553,736 | ||||||
Redeemed | (661,526 | ) | (7,038,872 | ) | (6,506,504 | ) | (81,525,313 | ) | ||
459,542 | 5,240,096 | (4,614,214 | ) | (58,505,677 | ) | |||||
A Class/Shares Authorized | 185,000,000 | 200,000,000 | ||||||||
Sold | 939,470 | 10,279,938 | 3,435,801 | 43,328,728 | ||||||
Issued in reinvestment of distributions | 646,908 | 7,374,750 | 1,574,958 | 19,000,956 | ||||||
Redeemed | (1,638,027 | ) | (18,084,929 | ) | (15,900,104 | ) | (205,207,226 | ) | ||
(51,649 | ) | (430,241 | ) | (10,889,345 | ) | (142,877,542 | ) | |||
C Class/Shares Authorized | 30,000,000 | 30,000,000 | ||||||||
Sold | 45,970 | 496,484 | 281,983 | 3,505,108 | ||||||
Issued in reinvestment of distributions | 39,979 | 445,758 | 38,595 | 458,326 | ||||||
Redeemed | (129,324 | ) | (1,373,920 | ) | (222,720 | ) | (2,723,550 | ) | ||
(43,375 | ) | (431,678 | ) | 97,858 | 1,239,884 | |||||
R Class/Shares Authorized | 30,000,000 | 25,000,000 | ||||||||
Sold | 71,947 | 814,207 | 168,277 | 2,106,267 | ||||||
Issued in reinvestment of distributions | 13,640 | 157,129 | 9,545 | 116,453 | ||||||
Redeemed | (38,729 | ) | (426,361 | ) | (72,723 | ) | (935,167 | ) | ||
46,858 | 544,975 | 105,099 | 1,287,553 | |||||||
R6 Class/Shares Authorized | 40,000,000 | 30,000,000 | ||||||||
Sold | 832,675 | 8,694,751 | 5,097,139 | 63,522,566 | ||||||
Issued in reinvestment of distributions | 252,958 | 2,838,192 | 48,186 | 572,156 | ||||||
Redeemed | (433,687 | ) | (4,730,749 | ) | (1,768,379 | ) | (22,259,140 | ) | ||
651,946 | 6,802,194 | 3,376,946 | 41,835,582 | |||||||
Net increase (decrease) | 5,522,289 | $ | 60,406,390 | (8,538,202 | ) | $ | (115,044,232 | ) |
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. |
16
• | Level 3 valuation inputs consist of unobservable data (including a fund’s own assumptions). |
The level classification is based on the lowest level input that is significant to the fair valuation measurement. The valuation inputs are not necessarily an indication of the risks associated with investing in these securities or other financial instruments. There were no significant transfers between levels during the period.
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 | ||||||||
China | $ | 19,975,748 | $ | 25,022,373 | — | |||
France | 9,578,847 | 229,738,801 | — | |||||
Ireland | 20,098,329 | 46,881,853 | — | |||||
Israel | 10,723,487 | — | — | |||||
Mexico | 8,005,605 | — | — | |||||
Netherlands | 23,425,961 | 37,298,511 | — | |||||
United Kingdom | 8,345,484 | 345,872,846 | — | |||||
Other Countries | — | 808,568,667 | — | |||||
Temporary Cash Investments | 5,140,916 | 11,236,000 | — | |||||
$ | 105,294,377 | $ | 1,504,619,051 | — |
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 May 31, 2016, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $ | 1,455,241,389 | |
Gross tax appreciation of investments | $ | 209,203,723 | |
Gross tax depreciation of investments | (54,531,684 | ) | |
Net tax appreciation (depreciation) of investments | $ | 154,672,039 |
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 November 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 | |||||||||||||||
2016(3) | $12.25 | 0.08 | (0.50) | (0.42) | (0.06) | (0.62) | (0.68) | $11.15 | (3.48)% | 1.18%(4) | 1.48%(4) | 33% | $1,353,972 | ||
2015 | $13.40 | 0.07 | (0.34) | (0.27) | (0.08) | (0.80) | (0.88) | $12.25 | (1.86)% | 1.17% | 0.62% | 62% | $1,432,784 | ||
2014 | $13.78 | 0.10 | —(5) | 0.10 | (0.20) | (0.28) | (0.48) | $13.40 | 0.80% | 1.18% | 0.74% | 75% | $1,521,655 | ||
2013 | $11.27 | 0.11 | 2.58 | 2.69 | (0.18) | — | (0.18) | $13.78 | 24.22% | 1.22% | 0.84% | 110% | $1,499,623 | ||
2012 | $9.90 | 0.15 | 1.33 | 1.48 | (0.11) | — | (0.11) | $11.27 | 15.10% | 1.29% | 1.41% | 106% | $1,268,251 | ||
2011 | $10.30 | 0.10 | (0.35) | (0.25) | (0.15) | — | (0.15) | $9.90 | (2.57)% | 1.32% | 0.95% | 125% | $1,189,245 | ||
Institutional Class | |||||||||||||||
2016(3) | $12.19 | 0.09 | (0.49) | (0.40) | (0.08) | (0.62) | (0.70) | $11.09 | (3.34)% | 0.98%(4) | 1.68%(4) | 33% | $69,140 | ||
2015 | $13.33 | 0.10 | (0.34) | (0.24) | (0.10) | (0.80) | (0.90) | $12.19 | (1.63)% | 0.97% | 0.82% | 62% | $70,422 | ||
2014 | $13.73 | 0.14 | (0.03) | 0.11 | (0.23) | (0.28) | (0.51) | $13.33 | 0.91% | 0.98% | 0.94% | 75% | $138,527 | ||
2013 | $11.24 | 0.13 | 2.58 | 2.71 | (0.22) | — | (0.22) | $13.73 | 24.54% | 1.02% | 1.04% | 110% | $185,325 | ||
2012 | $9.89 | 0.17 | 1.33 | 1.50 | (0.15) | — | (0.15) | $11.24 | 15.28% | 1.09% | 1.61% | 106% | $140,446 | ||
2011 | $10.30 | 0.12 | (0.33) | (0.21) | (0.20) | — | (0.20) | $9.89 | (2.27)% | 1.12% | 1.15% | 125% | $113,741 |
For a Share Outstanding Throughout the Years Ended November 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 | |||||||||||||||
2016(3) | $12.32 | 0.07 | (0.50) | (0.43) | (0.04) | (0.62) | (0.66) | $11.23 | (3.58)% | 1.43%(4) | 1.23%(4) | 33% | $128,086 | ||
2015 | $13.48 | 0.07 | (0.37) | (0.30) | (0.06) | (0.80) | (0.86) | $12.32 | (2.13)% | 1.42% | 0.37% | 62% | $141,175 | ||
2014 | $13.86 | 0.07 | (0.01) | 0.06 | (0.16) | (0.28) | (0.44) | $13.48 | 0.49% | 1.43% | 0.49% | 75% | $301,164 | ||
2013 | $11.33 | 0.07 | 2.61 | 2.68 | (0.15) | — | (0.15) | $13.86 | 23.98% | 1.47% | 0.59% | 110% | $267,979 | ||
2012 | $9.92 | 0.12 | 1.35 | 1.47 | (0.06) | — | (0.06) | $11.33 | 14.80% | 1.54% | 1.16% | 106% | $198,434 | ||
2011 | $10.29 | 0.08 | (0.35) | (0.27) | (0.10) | — | (0.10) | $9.92 | (2.76)% | 1.57% | 0.70% | 125% | $172,901 | ||
C Class | |||||||||||||||
2016(3) | $12.04 | 0.02 | (0.49) | (0.47) | — | (0.62) | (0.62) | $10.95 | (3.99)% | 2.18%(4) | 0.48%(4) | 33% | $8,988 | ||
2015 | $13.22 | (0.05) | (0.33) | (0.38) | — | (0.80) | (0.80) | $12.04 | (2.81)% | 2.17% | (0.38)% | 62% | $10,402 | ||
2014 | $13.58 | (0.03) | (0.02) | (0.05) | (0.03) | (0.28) | (0.31) | $13.22 | (0.29)% | 2.18% | (0.26)% | 75% | $10,129 | ||
2013 | $11.14 | (0.03) | 2.57 | 2.54 | (0.10) | — | (0.10) | $13.58 | 23.00% | 2.22% | (0.16)% | 110% | $4,859 | ||
2012 | $9.77 | 0.04 | 1.33 | 1.37 | — | — | — | $11.14 | 14.02% | 2.29% | 0.41% | 106% | $2,497 | ||
2011 | $10.13 | —(5) | (0.36) | (0.36) | — | — | — | $9.77 | (3.55)% | 2.32% | (0.05)% | 125% | $2,725 |
For a Share Outstanding Throughout the Years Ended November 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) | |||
R Class | |||||||||||||||
2016(3) | $12.43 | 0.06 | (0.52) | (0.46) | (0.01) | (0.62) | (0.63) | $11.34 | (3.74)% | 1.68%(4) | 0.98%(4) | 33% | $3,555 | ||
2015 | $13.59 | 0.02 | (0.35) | (0.33) | (0.03) | (0.80) | (0.83) | $12.43 | (2.31)% | 1.67% | 0.12% | 62% | $3,313 | ||
2014 | $13.96 | 0.03 | (0.01) | 0.02 | (0.11) | (0.28) | (0.39) | $13.59 | 0.25% | 1.68% | 0.24% | 75% | $2,195 | ||
2013 | $11.41 | 0.05 | 2.62 | 2.67 | (0.12) | — | (0.12) | $13.96 | 23.59% | 1.72% | 0.34% | 110% | $2,270 | ||
2012 | $9.97 | 0.10 | 1.35 | 1.45 | (0.01) | — | (0.01) | $11.41 | 14.56% | 1.79% | 0.91% | 106% | $2,262 | ||
2011 | $10.32 | 0.05 | (0.36) | (0.31) | (0.04) | — | (0.04) | $9.97 | (3.05)% | 1.82% | 0.45% | 125% | $3,222 | ||
R6 Class | |||||||||||||||
2016(3) | $12.20 | 0.10 | (0.50) | (0.40) | (0.09) | (0.62) | (0.71) | $11.09 | (3.30)% | 0.83%(4) | 1.83%(4) | 33% | $51,668 | ||
2015 | $13.34 | 0.11 | (0.33) | (0.22) | (0.12) | (0.80) | (0.92) | $12.20 | (1.50)% | 0.82% | 0.97% | 62% | $48,887 | ||
2014 | $13.74 | 0.13 | —(5) | 0.13 | (0.25) | (0.28) | (0.53) | $13.34 | 1.10% | 0.83% | 1.09% | 75% | $8,411 | ||
2013(6) | $12.56 | 0.01 | 1.17 | 1.18 | — | — | — | $13.74 | 9.39% | 0.85%(4) | 0.20%(4) | 110%(7) | $5,076 |
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 May 31, 2016 (unaudited). |
(4) | Annualized. |
(5) | Per-share amount was less than $0.005. |
(6) | July 26, 2013 (commencement of sale) through November 30, 2013. |
(7) | Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended November 30, 2013. |
See Notes to Financial Statements.
Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain IRAs 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.
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.
Distributions you receive from 403(b), 457 and qualified plans are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
A description of the policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund is available without charge, upon request, by calling 1-800-345-2021. It is also available on the "About Us" page of American Century Investments’ website at americancentury.com and on the Securities and Exchange Commission’s website at sec.gov. Information regarding how the investment advisor voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the "About Us" page at americancentury.com. It is also available at sec.gov.
Quarterly Portfolio Disclosure
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-Q. The fund’s Forms N-Q are available on the SEC’s website at sec.gov, and may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The fund also makes its complete schedule of portfolio holdings for the most recent quarter of its fiscal year available on its
website at americancentury.com and, upon request, by calling 1-800-345-2021.
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 World Mutual 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. | ||
©2016 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-89420 1607 |
![](https://capedge.com/proxy/N-CSRS/0000872825-16-000153/acihorizblkb99.jpg)
Semiannual Report | |
May 31, 2016 | |
International Opportunities Fund |
Table of Contents |
Any opinions expressed in this report reflect those of the author as of the date of the report, and do not necessarily represent the opinions of American Century Investments® or any other person in the American Century Investments organization. Any such opinions are subject to change at any time based upon market or other conditions and American Century Investments disclaims any responsibility to update such opinions. These opinions may not be relied upon as investment advice and, because investment decisions made by American Century Investments funds are based on numerous factors, may not be relied upon as an indication of trading intent on behalf of any American Century Investments fund. Security examples are used for representational purposes only and are not intended as recommendations to purchase or sell securities. Performance information for comparative indices and securities is provided to American Century Investments by third party vendors. To the best of American Century Investments’ knowledge, such information is accurate at the time of printing.
President’s Letter |
![]() | Dear Investor: Thank you for reviewing this semiannual report for the six months ended May 31, 2016. It provides a macroeconomic and financial market overview (below), followed by a schedule of fund investments and other financial information. For additional commentary and information on fund performance, key factors that affected asset returns, and other insights regarding the investment markets, we encourage you to visit our website, americancentury.com. |
Jonathan Thomas |
Economic Growth Concerns and Central Bank Policies Triggered Market Volatility
Global macroeconomic events—in the form of recession fears and resulting central bank policy moves—triggered widespread market volatility. Stock index graphs of the six months look like a square root sign (√). From late December to mid-February, stock market indices declined sharply on a confluence of factors that carried over from last summer’s similar sell-off, including concerns about China’s slowing economic growth, its possible contagion to the global economy, an energy price collapse, and Chinese currency devaluations. Furthermore, the U.S. Federal Reserve (Fed) started to raise interest rates in December and projected four more rate hikes in 2016, which put additional pressure on commodity prices and emerging markets.
These factors combined to drive down stock prices and U.S. Treasury yields until mid-February, when the markets reversed, partly in response to indications that the global oil supply glut could be reduced. Oil prices started to rise, China stabilized, and stock markets rallied. Central bank stimulus governed the markets, with the Bank of Japan resorting to negative interest rates, the Fed holding rates steady while reducing its rate hike projections, and the European Central Bank announcing significant additional stimulus.
Modest broad market gains and losses for the reporting period do not capture its volatility, which generally pushed returns for bonds (and higher-yielding, more defensive stock sectors such as utilities and telecommunication services) ahead of broad stock returns. Also, the divergence between generally weaker global economic conditions and the relatively stable U.S. economy helped U.S. stocks generally outpace their non-U.S. counterparts.
Looking ahead, we expect more market volatility this year due to global economic and political headwinds, uncertainty surrounding future Fed moves, and the U.S. presidential election. This could present both challenges and opportunities for active investment managers. In this environment, we continue to believe in a disciplined, diversified, risk-aware investment approach, using professionally managed portfolios to meet financial goals. We appreciate your trust in us.
Sincerely,
![](https://capedge.com/proxy/N-CSRS/0000872825-16-000153/jonathanthomassig.jpg)
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
2
Fund Characteristics |
MAY 31, 2016 | |
Top Ten Holdings | % of net assets |
Bellway plc | 2.0% |
Straumann Holding AG | 1.9% |
Sartorius AG Preference Shares | 1.7% |
Saab AB, B Shares | 1.7% |
Nexity SA | 1.7% |
Teleperformance | 1.6% |
Auto Trader Group plc | 1.4% |
Rentokil Initial plc | 1.4% |
Penta-Ocean Construction Co. Ltd. | 1.4% |
RPC Group plc | 1.4% |
Types of Investments in Portfolio | % of net assets |
Common Stocks | 99.3% |
Other Assets and Liabilities | 0.7% |
Investments by Country | % of net assets |
Japan | 20.2% |
United Kingdom | 13.7% |
France | 9.3% |
Canada | 9.0% |
Australia | 7.0% |
Germany | 5.2% |
Taiwan | 4.6% |
Sweden | 4.3% |
Switzerland | 3.9% |
South Korea | 3.6% |
Italy | 3.4% |
China | 2.9% |
Mexico | 2.4% |
Other Countries | 9.8% |
Other Assets and Liabilities | 0.7% |
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 December 1, 2015 to May 31, 2016.
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 Institutional 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 12/1/15 | Ending Account Value 5/31/16 | Expenses Paid During Period(1) 12/1/15 - 5/31/16 | Annualized Expense Ratio(1) | |
Actual | ||||
Investor Class (after waiver) | $1,000 | $990.20 | $7.61 | 1.53% |
Investor Class (before waiver) | $1,000 | $990.20(2) | $8.61 | 1.73% |
Institutional Class (after waiver) | $1,000 | $989.70 | $6.62 | 1.33% |
Institutional Class (before waiver) | $1,000 | $989.70(2) | $7.61 | 1.53% |
A Class (after waiver) | $1,000 | $988.20 | $8.85 | 1.78% |
A Class (before waiver) | $1,000 | $988.20(2) | $9.84 | 1.98% |
C Class (after waiver) | $1,000 | $985.20 | $12.56 | 2.53% |
C Class (before waiver) | $1,000 | $985.20(2) | $13.55 | 2.73% |
R Class (after waiver) | $1,000 | $987.20 | $10.09 | 2.03% |
R Class (before waiver) | $1,000 | $987.20(2) | $11.08 | 2.23% |
Hypothetical | ||||
Investor Class (after waiver) | $1,000 | $1,017.35 | $7.72 | 1.53% |
Investor Class (before waiver) | $1,000 | $1,016.35 | $8.72 | 1.73% |
Institutional Class (after waiver) | $1,000 | $1,018.35 | $6.71 | 1.33% |
Institutional Class (before waiver) | $1,000 | $1,017.35 | $7.72 | 1.53% |
A Class (after waiver) | $1,000 | $1,016.10 | $8.97 | 1.78% |
A Class (before waiver) | $1,000 | $1,015.10 | $9.97 | 1.98% |
C Class (after waiver) | $1,000 | $1,012.35 | $12.73 | 2.53% |
C Class (before waiver) | $1,000 | $1,011.35 | $13.73 | 2.73% |
R Class (after waiver) | $1,000 | $1,014.85 | $10.23 | 2.03% |
R Class (before waiver) | $1,000 | $1,013.85 | $11.23 | 2.23% |
(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 183, the number of days in the most recent fiscal half-year, divided by 366, to reflect the one-half year period. |
(2) | Ending account value assumes the return earned after waiver and would have been lower if a portion of the fees had not been waived. |
5
Schedule of Investments |
MAY 31, 2016 (UNAUDITED)
Shares | Value | |||
COMMON STOCKS — 99.3% | ||||
Australia — 7.0% | ||||
APN Outdoor Group Ltd. | 313,020 | $ | 1,547,449 | |
Aristocrat Leisure Ltd. | 213,510 | 1,984,483 | ||
BlueScope Steel Ltd. | 217,690 | 984,920 | ||
Burson Group Ltd. | 397,330 | 1,524,874 | ||
Domino's Pizza Enterprises Ltd. | 29,930 | 1,489,790 | ||
Northern Star Resources Ltd. | 454,020 | 1,414,297 | ||
Regis Resources Ltd. | 568,940 | 1,200,708 | ||
10,146,521 | ||||
Belgium — 0.5% | ||||
Galapagos NV(1) | 13,940 | 803,126 | ||
Brazil — 1.1% | ||||
Iguatemi Empresa de Shopping Centers SA | 105,100 | 756,199 | ||
Smiles SA | 70,400 | 779,863 | ||
1,536,062 | ||||
Canada — 9.0% | ||||
Aecon Group, Inc. | 100,880 | 1,357,785 | ||
Descartes Systems Group, Inc. (The)(1) | 74,870 | 1,560,945 | ||
FirstService Corp. | 34,340 | 1,625,936 | ||
New Flyer Industries, Inc. | 43,060 | 1,363,039 | ||
Norbord, Inc. | 54,970 | 1,184,201 | ||
Parex Resources, Inc.(1) | 159,890 | 1,644,806 | ||
Raging River Exploration, Inc.(1) | 232,650 | 1,916,056 | ||
Shopify, Inc., Class A(1) | 34,860 | 1,021,049 | ||
TORC Oil & Gas Ltd. | 228,040 | 1,419,001 | ||
13,092,818 | ||||
China — 2.9% | ||||
Bitauto Holdings Ltd. ADR(1) | 43,000 | 872,470 | ||
China Maple Leaf Educational Systems Ltd. | 1,832,000 | 1,643,219 | ||
Cosmo Lady China Holdings Co. Ltd. | 523,000 | 375,554 | ||
CT Environmental Group Ltd. | 4,964,000 | 1,341,492 | ||
4,232,735 | ||||
Finland — 0.5% | ||||
Cramo Oyj | 31,110 | 671,522 | ||
France — 9.3% | ||||
APERAM SA | 35,950 | 1,432,792 | ||
Eurofins Scientific SE | 4,120 | 1,597,566 | ||
Nexans SA(1) | 33,410 | 1,719,281 | ||
Nexity SA | 44,430 | 2,394,634 | ||
Plastic Omnium SA | 34,520 | 1,151,108 | ||
Rubis SCA | 18,770 | 1,422,649 | ||
Teleperformance | 27,180 | 2,370,355 | ||
Worldline SA(1) | 47,430 | 1,455,479 | ||
13,543,864 | ||||
Germany — 5.2% | ||||
AURELIUS SE & Co. KGaA | 13,380 | 803,912 |
6
Shares | Value | |||
CTS Eventim AG & Co. KGaA | 10,690 | $ | 368,721 | |
Duerr AG | 23,070 | 1,791,429 | ||
Jungheinrich AG Preference Shares | 9,910 | 944,188 | ||
Sartorius AG Preference Shares | 8,690 | 2,400,312 | ||
Stroeer SE & Co. KGaA | 21,500 | 1,169,306 | ||
7,477,868 | ||||
Hong Kong — 0.6% | ||||
Regina Miracle International Holdings Ltd.(1) | 597,000 | 820,508 | ||
India — 0.9% | ||||
Indiabulls Housing Finance Ltd. | 120,060 | 1,281,966 | ||
Indonesia — 1.5% | ||||
Bank Tabungan Negara Persero Tbk PT | 5,684,200 | 709,485 | ||
Waskita Karya Persero Tbk PT | 8,102,100 | 1,488,746 | ||
2,198,231 | ||||
Ireland — 0.7% | ||||
Dalata Hotel Group plc(1) | 203,870 | 1,070,666 | ||
Israel — 0.5% | ||||
Frutarom Industries Ltd. | 14,540 | 708,375 | ||
Italy — 3.4% | ||||
Buzzi Unicem SpA | 61,150 | 1,215,169 | ||
Davide Campari-Milano SpA | 187,510 | 1,811,978 | ||
FinecoBank Banca Fineco SpA | 145,140 | 1,059,375 | ||
OVS SpA(1) | 123,080 | 843,581 | ||
4,930,103 | ||||
Japan — 20.2% | ||||
Anicom Holdings, Inc. | 56,800 | 1,445,454 | ||
Asahi Intecc Co. Ltd. | 22,000 | 1,112,566 | ||
Bic Camera, Inc. | 138,700 | 1,301,389 | ||
Dip Corp. | 43,500 | 1,188,310 | ||
eRex Co. Ltd. | 43,500 | 771,910 | ||
Gulliver International Co. Ltd. | 36,600 | 370,512 | ||
Hoshizaki Electric Co. Ltd. | 18,200 | 1,743,821 | ||
Invincible Investment Corp. | 2,772 | 1,909,998 | ||
Istyle, Inc. | 176,600 | 1,487,947 | ||
Lion Corp. | 117,000 | 1,713,767 | ||
MISUMI Group, Inc. | 103,800 | 1,594,472 | ||
Nifco, Inc. | 34,700 | 1,789,290 | ||
Nihon M&A Center, Inc. | 24,700 | 1,507,852 | ||
Open House Co. Ltd. | 72,400 | 1,937,902 | ||
Penta-Ocean Construction Co. Ltd. | 393,300 | 2,010,275 | ||
Pigeon Corp. | 28,200 | 769,079 | ||
Ryohin Keikaku Co. Ltd. | 5,700 | 1,314,137 | ||
Sohgo Security Services Co. Ltd. | 14,800 | 729,742 | ||
Tsuruha Holdings, Inc. | 15,000 | 1,561,837 | ||
Ulvac, Inc. | 52,600 | 1,762,279 | ||
Zenkoku Hosho Co. Ltd. | 37,300 | 1,229,467 | ||
29,252,006 | ||||
Malaysia — 0.9% | ||||
My EG Services Bhd | 2,700,400 | 1,360,337 | ||
Mexico — 2.4% | ||||
Alsea SAB de CV | 376,870 | 1,428,111 |
7
Shares | Value | |||
Banregio Grupo Financiero SAB de CV | 134,460 | $ | 736,236 | |
Controladora Vuela Cia de Aviacion SAB de CV ADR(1) | 71,820 | 1,386,844 | ||
3,551,191 | ||||
Netherlands — 0.5% | ||||
TKH Group NV | 18,520 | 718,644 | ||
Norway — 1.1% | ||||
Det Norske Oljeselskap ASA(1) | 164,070 | 1,532,714 | ||
Philippines — 0.5% | ||||
Puregold Price Club, Inc. | 797,900 | 716,600 | ||
South Korea — 3.6% | ||||
Caregen Co. Ltd. | 10,840 | 1,045,981 | ||
Hite Jinro Co. Ltd. | 48,270 | 1,016,594 | ||
Innocean Worldwide, Inc. | 3,920 | 292,076 | ||
LIG Nex1 Co. Ltd. | 8,480 | 706,548 | ||
Medy-Tox, Inc. | 2,950 | 1,086,634 | ||
Osstem Implant Co. Ltd.(1) | 17,420 | 1,087,471 | ||
5,235,304 | ||||
Spain — 0.5% | ||||
Cellnex Telecom SAU | 48,100 | 776,018 | ||
Sweden — 4.3% | ||||
Avanza Bank Holding AB | 17,950 | 733,808 | ||
Fastighets AB Balder, B Shares(1) | 61,060 | 1,578,226 | ||
Indutrade AB | 36,090 | 723,414 | ||
Inwido AB | 62,948 | 743,330 | ||
Saab AB, B Shares | 72,080 | 2,396,229 | ||
6,175,007 | ||||
Switzerland — 3.9% | ||||
Straumann Holding AG | 7,100 | 2,716,071 | ||
Temenos Group AG | 32,840 | 1,823,710 | ||
Ypsomed Holding AG | 6,400 | 1,139,638 | ||
5,679,419 | ||||
Taiwan — 4.6% | ||||
AirTAC International Group | 225,000 | 1,507,474 | ||
Gourmet Master Co. Ltd. | 140,000 | 1,253,507 | ||
Hota Industrial Manufacturing Co. Ltd. | 304,000 | 1,435,523 | ||
Land Mark Optoelectronics Corp. | 53,000 | 780,882 | ||
Nien Made Enterprise Co. Ltd.(1) | 82,000 | 751,798 | ||
Tung Thih Electronic Co. Ltd. | 66,000 | 922,836 | ||
6,652,020 | ||||
United Kingdom — 13.7% | ||||
Ashmore Group plc | 260,950 | 1,098,692 | ||
Auto Trader Group plc | 364,840 | 2,076,675 | ||
Bellway plc | 74,900 | 2,964,796 | ||
Domino's Pizza Group plc | 96,650 | 1,476,821 | ||
Great Portland Estates plc | 124,860 | 1,358,115 | ||
Greencore Group plc | 275,590 | 1,375,872 | ||
Regus plc | 403,440 | 1,844,705 | ||
Rentokil Initial plc | 771,690 | 2,012,936 | ||
Rightmove plc | 18,260 | 1,117,116 | ||
Rotork plc | 256,100 | 729,604 | ||
RPC Group plc | 172,000 | 2,006,631 |
8
Shares | Value | |||
Sophos Group plc | 275,700 | $ | 838,551 | |
Spectris plc | 41,480 | 1,008,101 | ||
19,908,615 | ||||
TOTAL INVESTMENT SECURITIES — 99.3% (Cost $120,854,111) | 144,072,240 | |||
OTHER ASSETS AND LIABILITIES — 0.7% | 973,571 | |||
TOTAL NET ASSETS — 100.0% | $ | 145,045,811 |
MARKET SECTOR DIVERSIFICATION | ||
(as a % of net assets) | ||
Industrials | 22.2 | % |
Consumer Discretionary | 20.8 | % |
Financials | 14.2 | % |
Information Technology | 12.5 | % |
Health Care | 9.0 | % |
Materials | 7.0 | % |
Consumer Staples | 6.2 | % |
Energy | 4.5 | % |
Utilities | 2.4 | % |
Telecommunication Services | 0.5 | % |
Other Assets and Liabilities | 0.7 | % |
NOTES TO SCHEDULE OF INVESTMENTS | ||
ADR | - | American Depositary Receipt |
(1) | Non-income producing. |
See Notes to Financial Statements.
9
Statement of Assets and Liabilities |
MAY 31, 2016 (UNAUDITED) | |||
Assets | |||
Investment securities, at value (cost of $120,854,111) | $ | 144,072,240 | |
Foreign currency holdings, at value (cost of $56,235) | 53,622 | ||
Receivable for investments sold | 1,904,251 | ||
Receivable for capital shares sold | 65,462 | ||
Dividends and interest receivable | 264,398 | ||
Other assets | 30,116 | ||
146,390,089 | |||
Liabilities | |||
Disbursements in excess of demand deposit cash | 914,220 | ||
Payable for capital shares redeemed | 238,344 | ||
Accrued management fees | 186,149 | ||
Distribution and service fees payable | 5,565 | ||
1,344,278 | |||
Net Assets | $ | 145,045,811 | |
Net Assets Consist of: | |||
Capital (par value and paid-in surplus) | $ | 128,088,697 | |
Distributions in excess of net investment income | (1,756,103 | ) | |
Accumulated net realized loss | (4,483,300 | ) | |
Net unrealized appreciation | 23,196,517 | ||
$ | 145,045,811 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | ||||
Investor Class, $0.01 Par Value | $117,312,968 | 13,383,358 | $8.77 | |||
Institutional Class, $0.01 Par Value | $6,198,897 | 700,224 | $8.85 | |||
A Class, $0.01 Par Value | $19,361,101 | 2,220,389 | $8.72* | |||
C Class, $0.01 Par Value | $1,483,635 | 174,031 | $8.53 | |||
R Class, $0.01 Par Value | $689,210 | 79,522 | $8.67 |
*Maximum offering price $9.25 (net asset value divided by 0.9425).
See Notes to Financial Statements.
10
Statement of Operations |
FOR THE SIX MONTHS ENDED MAY 31, 2016 (UNAUDITED) | |||
Investment Income (Loss) | |||
Income: | |||
Dividends (net of foreign taxes withheld of $108,903) | $ | 1,172,667 | |
Interest | 664 | ||
1,173,331 | |||
Expenses: | |||
Management fees | 1,283,472 | ||
Distribution and service fees: | |||
A Class | 23,883 | ||
C Class | 7,641 | ||
R Class | 1,634 | ||
Directors' fees and expenses | 2,550 | ||
Other expenses | 625 | ||
1,319,805 | |||
Fees waived | (149,308 | ) | |
1,170,497 | |||
Net investment income (loss) | 2,834 | ||
Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investment transactions | (3,071,577 | ) | |
Foreign currency transactions | (31,078 | ) | |
(3,102,655 | ) | ||
Change in net unrealized appreciation (depreciation) on: | |||
Investments | 1,095,755 | ||
Translation of assets and liabilities in foreign currencies | 8,710 | ||
1,104,465 | |||
Net realized and unrealized gain (loss) | (1,998,190 | ) | |
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | (1,995,356 | ) |
See Notes to Financial Statements.
11
Statement of Changes in Net Assets |
SIX MONTHS ENDED MAY 31, 2016 (UNAUDITED) AND YEAR ENDED NOVEMBER 30, 2015 | ||||||
Increase (Decrease) in Net Assets | May 31, 2016 | November 30, 2015 | ||||
Operations | ||||||
Net investment income (loss) | $ | 2,834 | $ | (531,867 | ) | |
Net realized gain (loss) | (3,102,655 | ) | 3,535,227 | |||
Change in net unrealized appreciation (depreciation) | 1,104,465 | 5,262,144 | ||||
Net increase (decrease) in net assets resulting from operations | (1,995,356 | ) | 8,265,504 | |||
Distributions to Shareholders | ||||||
From net investment income: | ||||||
Investor Class | (1,126,676 | ) | (310,451 | ) | ||
Institutional Class | (65,585 | ) | (10,868 | ) | ||
A Class | (135,676 | ) | (28,281 | ) | ||
C Class | (1,467 | ) | (75 | ) | ||
R Class | (3,245 | ) | (690 | ) | ||
From net realized gains: | ||||||
Investor Class | (2,032,554 | ) | (5,094,004 | ) | ||
Institutional Class | (100,298 | ) | (186,683 | ) | ||
A Class | (315,770 | ) | (623,812 | ) | ||
C Class | (25,684 | ) | (30,823 | ) | ||
R Class | (10,615 | ) | (24,603 | ) | ||
Decrease in net assets from distributions | (3,817,570 | ) | (6,310,290 | ) | ||
Capital Share Transactions | ||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | (6,216,262 | ) | 10,796,697 | |||
Redemption Fees | ||||||
Increase in net assets from redemption fees | 10,531 | 9,050 | ||||
Net increase (decrease) in net assets | (12,018,657 | ) | 12,760,961 | |||
Net Assets | ||||||
Beginning of period | 157,064,468 | 144,303,507 | ||||
End of period | $ | 145,045,811 | $ | 157,064,468 | ||
Accumulated (distributions in excess of) net investment income (loss) | $ | (1,756,103 | ) | $ | (426,288 | ) |
See Notes to Financial Statements.
12
Notes to Financial Statements |
MAY 31, 2016 (UNAUDITED)
1. Organization
American Century World Mutual 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 Opportunities Fund (the fund) is one fund in a series issued by the corporation. The fund's investment objective is to seek capital growth.
The fund offers the Investor Class, the Institutional Class, the A Class, the C Class and the 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. The share classes differ principally in their respective sales charges and distribution and shareholder servicing expenses and arrangements. The Institutional Class is made available to institutional shareholders or through financial intermediaries whose clients do not require the same level of shareholder and administrative services as shareholders of other classes. As a result, the Institutional Class is charged a lower unified management fee.
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
13
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 and net realized gains, if any, are generally declared and paid annually. The fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code, in all events in a manner consistent with provisions of the 1940 Act.
Redemption Fees — The fund may impose a 2.00% redemption fee on shares held less than 60 days. The fee may not be applicable to all classes. The redemption fee is retained by the fund and helps cover
14
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 rate of the fee is determined by applying a fee rate calculation formula. This formula takes into account the fund’s assets as well as certain assets, if any, of other clients of the investment advisor outside the American Century Investments family of funds (such as subadvised funds and separate accounts) that have very similar investment teams and investment strategies (strategy assets). The annual management fee schedule ranges from 1.400% to 2.000% for the Investor Class, A Class, C Class and R Class. The annual management fee schedule ranges from 1.200% to 1.800% for the Institutional Class. During the six months ended May 31, 2016, the investment advisor voluntarily agreed to waive 0.200% of the fund's management fee. The investment advisor expects this waiver to continue until March 31, 2017 and cannot terminate it prior to such date without the approval of the Board of Directors. The total amount of the waiver for each class for the six months ended May 31, 2016 was $121,872, $6,148, $19,106, $1,528 and $654 for the Investor Class, Institutional Class, A Class, C Class, and R Class, respectively. The effective annual management fee before waiver for each class for the six months ended May 31, 2016 was 1.73% for the Investor Class, A Class, C Class and R Class and 1.53% for the Institutional Class. The effective annual management fee after waiver for each class for the six months ended May 31, 2016 was 1.53% for the Investor Class, A Class, C Class and R Class and 1.33% for the Institutional Class.
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 six months ended May 31, 2016 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 significant interfund transactions during the period.
15
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the six months ended May 31, 2016 were $100,211,036 and $109,149,084, respectively.
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended May 31, 2016 | Year ended November 30, 2015 | |||||||||
Shares | Amount | Shares | Amount | |||||||
Investor Class/Shares Authorized | 120,000,000 | 110,000,000 | ||||||||
Sold | 1,391,021 | $ | 11,851,732 | 2,966,146 | $ | 26,732,584 | ||||
Issued in reinvestment of distributions | 343,807 | 3,039,251 | 628,862 | 5,205,836 | ||||||
Redeemed | (2,493,835 | ) | (21,196,068 | ) | (3,331,759 | ) | (28,971,648 | ) | ||
(759,007 | ) | (6,305,085 | ) | 263,249 | 2,966,772 | |||||
Institutional Class/Shares Authorized | 35,000,000 | 40,000,000 | ||||||||
Sold | 50,631 | 427,458 | 736,174 | 6,598,320 | ||||||
Issued in reinvestment of distributions | 18,597 | 165,883 | 23,676 | 197,551 | ||||||
Redeemed | (97,562 | ) | (858,094 | ) | (529,250 | ) | (4,527,913 | ) | ||
(28,334 | ) | (264,753 | ) | 230,600 | 2,267,958 | |||||
A Class/Shares Authorized | 30,000,000 | 30,000,000 | ||||||||
Sold | 444,651 | 3,770,940 | 1,261,101 | 11,178,064 | ||||||
Issued in reinvestment of distributions | 51,180 | 450,388 | 79,078 | 652,093 | ||||||
Redeemed | (467,778 | ) | (3,981,490 | ) | (800,417 | ) | (7,101,223 | ) | ||
28,053 | 239,838 | 539,762 | 4,728,934 | |||||||
C Class/Shares Authorized | 30,000,000 | 20,000,000 | ||||||||
Sold | 31,128 | 262,877 | 92,172 | 824,061 | ||||||
Issued in reinvestment of distributions | 2,651 | 22,907 | 3,828 | 30,898 | ||||||
Redeemed | (27,629 | ) | (228,295 | ) | (9,757 | ) | (83,153 | ) | ||
6,150 | 57,489 | 86,243 | 771,806 | |||||||
R Class/Shares Authorized | 30,000,000 | 20,000,000 | ||||||||
Sold | 6,771 | 57,202 | 5,465 | 48,213 | ||||||
Issued in reinvestment of distributions | 1,582 | 13,860 | 3,084 | 25,293 | ||||||
Redeemed | (1,774 | ) | (14,813 | ) | (1,482 | ) | (12,279 | ) | ||
6,579 | 56,249 | 7,067 | 61,227 | |||||||
Net increase (decrease) | (746,559 | ) | $ | (6,216,262 | ) | 1,126,921 | $ | 10,796,697 |
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). |
16
The level classification is based on the lowest level input that is significant to the fair valuation measurement. The valuation inputs are not necessarily an indication of the risks associated with investing in these securities or other financial instruments. There were no significant transfers between levels during the period.
The following is a summary of the level classifications as of period end. The Schedule of Investments provides additional information on the fund’s portfolio holdings.
Level 1 | Level 2 | Level 3 | ||||||
Assets | ||||||||
Investment Securities | ||||||||
Common Stocks | $ | 3,280,363 | $ | 140,791,877 | — |
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 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 May 31, 2016, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $ | 121,441,715 | |
Gross tax appreciation of investments | $ | 24,634,350 | |
Gross tax depreciation of investments | (2,003,825 | ) | |
Net tax appreciation (depreciation) of investments | $ | 22,630,525 |
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 November 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) | |||
Investor Class | |||||||||||||||||
2016(3) | $9.08 | —(4) | (0.09) | (0.09) | (0.08) | (0.14) | (0.22) | $8.77 | (0.98)% | 1.53%(5) | 1.73%(5) | 0.04%(5) | (0.16)%(5) | 67% | $117,313 | ||
2015 | $8.92 | (0.03) | 0.58 | 0.55 | (0.02) | (0.37) | (0.39) | $9.08 | 6.67% | 1.51% | 1.71% | (0.33)% | (0.53)% | 152% | $128,450 | ||
2014 | $9.20 | 0.01 | (0.26) | (0.25) | (0.03) | — | (0.03) | $8.92 | (2.77)% | 1.55% | 1.75% | 0.11% | (0.09)% | 128% | $123,835 | ||
2013 | $7.14 | —(4) | 2.14 | 2.14 | (0.08) | — | (0.08) | $9.20 | 30.13% | 1.72% | 1.79% | (0.04)% | (0.11)% | 123% | $137,264 | ||
2012 | $5.98 | —(4) | 1.16 | 1.16 | — | — | — | $7.14 | 19.40% | 1.87% | 1.87% | (0.04)% | (0.04)% | 127% | $99,445 | ||
2011 | $6.29 | (0.01) | (0.27) | (0.28) | (0.03) | — | (0.03) | $5.98 | (4.57)% | 1.83% | 1.83% | (0.17)% | (0.17)% | 146% | $89,708 | ||
Institutional Class | |||||||||||||||||
2016(3) | $9.18 | 0.01 | (0.11) | (0.10) | (0.09) | (0.14) | (0.23) | $8.85 | (1.03)% | 1.33%(5) | 1.53%(5) | 0.24%(5) | 0.04%(5) | 67% | $6,199 | ||
2015 | $9.02 | (0.01) | 0.58 | 0.57 | (0.04) | (0.37) | (0.41) | $9.18 | 6.82% | 1.31% | 1.51% | (0.13)% | (0.33)% | 152% | $6,685 | ||
2014 | $9.29 | 0.03 | (0.27) | (0.24) | (0.03) | — | (0.03) | $9.02 | (2.58)% | 1.35% | 1.55% | 0.31% | 0.11% | 128% | $4,491 | ||
2013 | $7.21 | (0.04) | 2.21 | 2.17 | (0.09) | — | (0.09) | $9.29 | 30.38% | 1.52% | 1.59% | 0.16% | 0.09% | 123% | $3,100 | ||
2012 | $6.03 | 0.01 | 1.17 | 1.18 | — | — | — | $7.21 | 19.57% | 1.67% | 1.67% | 0.16% | 0.16% | 127% | $45 | ||
2011 | $6.34 | —(4) | (0.27) | (0.27) | (0.04) | — | (0.04) | $6.03 | (4.35)% | 1.63% | 1.63% | 0.03% | 0.03% | 146% | $37 |
For a Share Outstanding Throughout the Years Ended November 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) | |||
A Class | |||||||||||||||||
2016(3) | $9.03 | (0.01) | (0.10) | (0.11) | (0.06) | (0.14) | (0.20) | $8.72 | (1.18)% | 1.78%(5) | 1.98%(5) | (0.21)%(5) | (0.41)%(5) | 67% | $19,361 | ||
2015 | $8.88 | (0.05) | 0.58 | 0.53 | (0.01) | (0.37) | (0.38) | $9.03 | 6.48% | 1.76% | 1.96% | (0.58)% | (0.78)% | 152% | $19,796 | ||
2014 | $9.18 | (0.01) | (0.27) | (0.28) | (0.02) | — | (0.02) | $8.88 | (3.06)% | 1.80% | 2.00% | (0.14)% | (0.34)% | 128% | $14,683 | ||
2013 | $7.12 | (0.03) | 2.15 | 2.12 | (0.06) | — | (0.06) | $9.18 | 29.89% | 1.97% | 2.04% | (0.29)% | (0.36)% | 123% | $6,743 | ||
2012 | $5.98 | (0.04) | 1.18 | 1.14 | — | — | — | $7.12 | 19.06% | 2.12% | 2.12% | (0.29)% | (0.29)% | 127% | $1,931 | ||
2011 | $6.29 | (0.04) | (0.26) | (0.30) | (0.01) | — | (0.01) | $5.98 | (4.81)% | 2.10% | 2.10% | (0.44)% | (0.44)% | 146% | $5,147 | ||
C Class | |||||||||||||||||
2016(3) | $8.81 | (0.04) | (0.09) | (0.13) | (0.01) | (0.14) | (0.15) | $8.53 | (1.48)% | 2.53%(5) | 2.73%(5) | (0.96)%(5) | (1.16)%(5) | 67% | $1,484 | ||
2015 | $8.73 | (0.12) | 0.57 | 0.45 | —(4) | (0.37) | (0.37) | $8.81 | 5.59% | 2.51% | 2.71% | (1.33)% | (1.53)% | 152% | $1,479 | ||
2014 | $9.07 | (0.08) | (0.26) | (0.34) | — | — | — | $8.73 | (3.75)% | 2.55% | 2.75% | (0.89)% | (1.09)% | 128% | $713 | ||
2013 | $7.04 | (0.09) | 2.12 | 2.03 | — | — | — | $9.07 | 29.02% | 2.72% | 2.79% | (1.04)% | (1.11)% | 123% | $425 | ||
2012 | $5.95 | (0.06) | 1.15 | 1.09 | — | — | — | $7.04 | 18.15% | 2.87% | 2.87% | (1.04)% | (1.04)% | 127% | $123 | ||
2011 | $6.30 | (0.06) | (0.29) | (0.35) | — | — | — | $5.95 | (5.56)% | 2.83% | 2.83% | (1.17)% | (1.17)% | 146% | $103 |
For a Share Outstanding Throughout the Years Ended November 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) | |||
R Class | |||||||||||||||||
2016(3) | $8.97 | (0.02) | (0.10) | (0.12) | (0.04) | (0.14) | (0.18) | $8.67 | (1.28)% | 2.03%(5) | 2.23%(5) | (0.46)%(5) | (0.66)%(5) | 67% | $689 | ||
2015 | $8.85 | (0.07) | 0.57 | 0.50 | (0.01) | (0.37) | (0.38) | $8.97 | 6.09% | 2.01% | 2.21% | (0.83)% | (1.03)% | 152% | $654 | ||
2014 | $9.15 | (0.04) | (0.25) | (0.29) | (0.01) | — | (0.01) | $8.85 | (3.15)% | 2.05% | 2.25% | (0.39)% | (0.59)% | 128% | $583 | ||
2013 | $7.10 | (0.03) | 2.12 | 2.09 | (0.04) | — | (0.04) | $9.15 | 29.50% | 2.22% | 2.29% | (0.54)% | (0.61)% | 123% | $623 | ||
2012 | $5.98 | (0.03) | 1.15 | 1.12 | — | — | — | $7.10 | 18.73% | 2.37% | 2.37% | (0.54)% | (0.54)% | 127% | $109 | ||
2011 | $6.30 | (0.04) | (0.28) | (0.32) | — | — | — | $5.98 | (5.08)% | 2.33% | 2.33% | (0.67)% | (0.67)% | 146% | $61 |
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 May 31, 2016 (unaudited). |
(4) | Per-share amount was less than $0.005. |
(5) | Annualized. |
See Notes to Financial Statements.
Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain IRAs 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.
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.
Distributions you receive from 403(b), 457 and qualified plans are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
A description of the policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund is available without charge, upon request, by calling 1-800-345-2021. It is also available on the "About Us" page of American Century Investments’ website at americancentury.com and on the Securities and Exchange Commission’s website at sec.gov. Information regarding how the investment advisor voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the "About Us" page at americancentury.com. It is also available at sec.gov.
Quarterly Portfolio Disclosure
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-Q. The fund’s Forms N-Q are available on the SEC’s website at sec.gov, and may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The fund also makes its complete schedule of portfolio holdings for the most recent quarter of its fiscal year available on its website at americancentury.com and, upon request, by calling 1-800-345-2021.
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 World Mutual 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. | ||
©2016 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-89425 1607 |
![](https://capedge.com/proxy/N-CSRS/0000872825-16-000153/acihorizblkb99.jpg)
Semiannual Report | |
May 31, 2016 | |
International Value Fund |
Table of Contents |
Any opinions expressed in this report reflect those of the author as of the date of the report, and do not necessarily represent the opinions of American Century Investments® or any other person in the American Century Investments organization. Any such opinions are subject to change at any time based upon market or other conditions and American Century Investments disclaims any responsibility to update such opinions. These opinions may not be relied upon as investment advice and, because investment decisions made by American Century Investments funds are based on numerous factors, may not be relied upon as an indication of trading intent on behalf of any American Century Investments fund. Security examples are used for representational purposes only and are not intended as recommendations to purchase or sell securities. Performance information for comparative indices and securities is provided to American Century Investments by third party vendors. To the best of American Century Investments’ knowledge, such information is accurate at the time of printing.
President’s Letter |
![]() | Dear Investor: Thank you for reviewing this semiannual report for the six months ended May 31, 2016. It provides a macroeconomic and financial market overview (below), followed by a schedule of fund investments and other financial information. For additional commentary and information on fund performance, key factors that affected asset returns, and other insights regarding the investment markets, we encourage you to visit our website, americancentury.com. |
Jonathan Thomas |
Economic Growth Concerns and Central Bank Policies Triggered Market Volatility
Global macroeconomic events—in the form of recession fears and resulting central bank policy moves—triggered widespread market volatility. Stock index graphs of the six months look like a square root sign (√). From late December to mid-February, stock market indices declined sharply on a confluence of factors that carried over from last summer’s similar sell-off, including concerns about China’s slowing economic growth, its possible contagion to the global economy, an energy price collapse, and Chinese currency devaluations. Furthermore, the U.S. Federal Reserve (Fed) started to raise interest rates in December and projected four more rate hikes in 2016, which put additional pressure on commodity prices and emerging markets.
These factors combined to drive down stock prices and U.S. Treasury yields until mid-February, when the markets reversed, partly in response to indications that the global oil supply glut could be reduced. Oil prices started to rise, China stabilized, and stock markets rallied. Central bank stimulus governed the markets, with the Bank of Japan resorting to negative interest rates, the Fed holding rates steady while reducing its rate hike projections, and the European Central Bank announcing significant additional stimulus.
Modest broad market gains and losses for the reporting period do not capture its volatility, which generally pushed returns for bonds (and higher-yielding, more defensive stock sectors such as utilities and telecommunication services) ahead of broad stock returns. Also, the divergence between generally weaker global economic conditions and the relatively stable U.S. economy helped U.S. stocks generally outpace their non-U.S. counterparts.
Looking ahead, we expect more market volatility this year due to global economic and political headwinds, uncertainty surrounding future Fed moves, and the U.S. presidential election. This could present both challenges and opportunities for active investment managers. In this environment, we continue to believe in a disciplined, diversified, risk-aware investment approach, using professionally managed portfolios to meet financial goals. We appreciate your trust in us.
Sincerely,
![](https://capedge.com/proxy/N-CSRS/0000872825-16-000153/jonathanthomassig.jpg)
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
2
Fund Characteristics |
MAY 31, 2016 | |
Top Ten Holdings | % of net assets |
Royal Dutch Shell plc, B Shares | 3.4% |
Allianz SE | 2.2% |
Westpac Banking Corp. | 2.0% |
HSBC Holdings plc | 1.9% |
Australia & New Zealand Banking Group Ltd. | 1.9% |
AXA SA | 1.9% |
TOTAL SA | 1.8% |
ING Groep NV CVA | 1.7% |
Nippon Telegraph & Telephone Corp. | 1.5% |
Rio Tinto plc | 1.5% |
Types of Investments in Portfolio | % of net assets |
Common Stocks | 98.7% |
Exchange-Traded Funds | 0.4% |
Total Equity Exposure | 99.1% |
Temporary Cash Investments | 0.2% |
Other Assets and Liabilities | 0.7% |
Investments by Country | % of net assets |
Japan | 23.0% |
United Kingdom | 22.0% |
France | 13.0% |
Germany | 9.6% |
Australia | 7.5% |
Switzerland | 4.3% |
Italy | 3.6% |
Hong Kong | 2.9% |
Spain | 2.7% |
Netherlands | 2.5% |
Other Countries | 7.6% |
Exchange-Traded Funds* | 0.4% |
Cash and Equivalents** | 0.9% |
*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. |
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 December 1, 2015 to May 31, 2016.
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 Institutional 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 12/1/15 | Ending Account Value 5/31/16 | Expenses Paid During Period(1) 12/1/15 - 5/31/16 | Annualized Expense Ratio(1) | |
Actual | ||||
Investor Class | $1,000 | $956.80 | $6.41 | 1.31% |
Institutional Class | $1,000 | $958.30 | $5.43 | 1.11% |
A Class | $1,000 | $956.20 | $7.63 | 1.56% |
C Class | $1,000 | $951.40 | $11.27 | 2.31% |
R Class | $1,000 | $955.30 | $8.85 | 1.81% |
R6 Class | $1,000 | $958.20 | $4.70 | 0.96% |
Hypothetical | ||||
Investor Class | $1,000 | $1,018.45 | $6.61 | 1.31% |
Institutional Class | $1,000 | $1,019.45 | $5.60 | 1.11% |
A Class | $1,000 | $1,017.20 | $7.87 | 1.56% |
C Class | $1,000 | $1,013.45 | $11.63 | 2.31% |
R Class | $1,000 | $1,015.95 | $9.12 | 1.81% |
R6 Class | $1,000 | $1,020.20 | $4.85 | 0.96% |
(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 183, the number of days in the most recent fiscal half-year, divided by 366, to reflect the one-half year period. |
5
Schedule of Investments |
MAY 31, 2016 (UNAUDITED)
Shares | Value | |||
COMMON STOCKS — 98.7% | ||||
Australia — 7.5% | ||||
Australia & New Zealand Banking Group Ltd. | 73,504 | $ | 1,353,626 | |
BHP Billiton Ltd. | 16,552 | 228,253 | ||
CIMIC Group Ltd. | 28,662 | 774,758 | ||
Commonwealth Bank of Australia | 569 | 31,843 | ||
Downer EDI Ltd. | 48,311 | 136,525 | ||
Flight Centre Travel Group Ltd. | 3,843 | 87,798 | ||
Fortescue Metals Group Ltd. | 114,094 | 245,735 | ||
Metcash Ltd.(1) | 57,478 | 85,161 | ||
National Australia Bank Ltd. | 5,630 | 110,476 | ||
OZ Minerals Ltd. | 36,311 | 143,291 | ||
Qantas Airways Ltd. | 95,834 | 213,333 | ||
Regis Resources Ltd. | 50,269 | 106,089 | ||
Telstra Corp. Ltd. | 101,480 | 409,997 | ||
Westpac Banking Corp. | 64,954 | 1,441,227 | ||
5,368,112 | ||||
Austria — 0.2% | ||||
Raiffeisen Bank International AG(1) | 8,858 | 118,517 | ||
Belgium — 1.4% | ||||
Bekaert SA | 2,521 | 112,200 | ||
KBC Groep NV(1) | 15,057 | 891,436 | ||
1,003,636 | ||||
Denmark — 1.0% | ||||
Vestas Wind Systems A/S | 10,237 | 733,544 | ||
Finland — 0.3% | ||||
UPM-Kymmene Oyj | 12,363 | 237,836 | ||
France — 13.0% | ||||
AXA SA | 53,251 | 1,337,859 | ||
BNP Paribas SA | 14,075 | 779,347 | ||
CNP Assurances | 8,572 | 145,449 | ||
Engie SA | 41,244 | 635,349 | ||
Faurecia | 9,472 | 376,770 | ||
Innate Pharma SA(1) | 5,386 | 78,385 | ||
Metropole Television SA | 3,637 | 66,750 | ||
Nexans SA(1) | 4,980 | 256,271 | ||
Orange SA | 50,731 | 881,402 | ||
Peugeot SA(1) | 41,949 | 660,212 | ||
Safran SA | 3,854 | 270,154 | ||
Sanofi | 12,455 | 1,021,200 | ||
SCOR SE | 8,449 | 282,494 | ||
Societe Generale SA | 20,053 | 825,320 | ||
TOTAL SA | 26,522 | 1,288,837 | ||
UBISOFT Entertainment SA(1) | 3,963 | 146,173 | ||
Valeo SA | 1,320 | 199,229 | ||
9,251,201 |
6
Shares | Value | |||
Germany — 9.6% | ||||
Allianz SE | 9,618 | $ | 1,569,906 | |
BASF SE | 2,678 | 206,879 | ||
Continental AG | 889 | 190,707 | ||
Deutsche Lufthansa AG | 5,913 | 82,864 | ||
Deutsche Telekom AG | 36,704 | 648,110 | ||
E.ON SE | 96,092 | 944,610 | ||
Hannover Rueck SE | 5,559 | 626,872 | ||
METRO AG | 25,554 | 839,617 | ||
Muenchener Rueckversicherungs-Gesellschaft AG | 1,050 | 197,265 | ||
ProSiebenSat.1 Media SE | 13,771 | 692,338 | ||
Siemens AG | 3,047 | 328,142 | ||
SMA Solar Technology AG(1) | 1,476 | 81,325 | ||
STADA Arzneimittel AG | 7,696 | 409,823 | ||
6,818,458 | ||||
Hong Kong — 2.9% | ||||
CK Hutchison Holdings Ltd. | 26,000 | 301,798 | ||
Hang Seng Bank Ltd. | 39,100 | 693,870 | ||
HKT Trust & HKT Ltd. | 93,000 | 134,759 | ||
Link REIT | 98,500 | 605,267 | ||
Sands China Ltd. | 29,600 | 113,513 | ||
Television Broadcasts Ltd. | 13,900 | 47,223 | ||
VTech Holdings Ltd. | 7,900 | 86,515 | ||
WH Group Ltd. | 101,000 | 77,725 | ||
2,060,670 | ||||
Israel — 1.5% | ||||
Bank Hapoalim BM | 107,944 | 557,553 | ||
Bezeq The Israeli Telecommunication Corp. Ltd. | 36,778 | 71,118 | ||
Teva Pharmaceutical Industries Ltd. | 8,261 | 429,057 | ||
1,057,728 | ||||
Italy — 3.6% | ||||
A2A SpA | 94,789 | 135,103 | ||
Enel SpA | 218,386 | 989,930 | ||
Eni SpA | 53,044 | 810,337 | ||
Fiat Chrysler Automobiles NV | 19,403 | 138,492 | ||
Prysmian SpA | 20,605 | 504,146 | ||
2,578,008 | ||||
Japan — 23.0% | ||||
Bridgestone Corp. | 17,300 | 597,732 | ||
Calsonic Kansei Corp. | 13,000 | 101,431 | ||
Canon, Inc. | 34,600 | 1,003,614 | ||
Central Japan Railway Co. | 3,700 | 655,899 | ||
Chiyoda Corp. | 26,000 | 186,192 | ||
Daiichi Sankyo Co. Ltd. | 6,700 | 155,891 | ||
Daikyo, Inc. | 39,000 | 59,873 | ||
Daiwa House Industry Co. Ltd. | 6,600 | 191,739 | ||
Daiwa Securities Group, Inc. | 57,000 | 332,627 | ||
Fuji Heavy Industries Ltd. | 14,800 | 554,658 | ||
Hino Motors Ltd. | 9,000 | 92,329 | ||
Hitachi Construction Machinery Co. Ltd. | 14,900 | 230,359 | ||
Honda Motor Co., Ltd. | 30,500 | 867,887 |
7
Shares | Value | |||
Hoya Corp. | 7,300 | $ | 257,562 | |
Iida Group Holdings Co. Ltd. | 19,700 | 413,089 | ||
ITOCHU Corp. | 36,600 | 459,917 | ||
Japan Airlines Co. Ltd. | 19,500 | 669,341 | ||
JX Holdings, Inc. | 104,900 | 410,184 | ||
KDDI Corp. | 13,300 | 388,785 | ||
Komatsu Ltd. | 31,500 | 544,035 | ||
Lawson, Inc. | 1,000 | 79,198 | ||
Mitsubishi Chemical Holdings Corp. | 100,700 | 513,253 | ||
Mitsubishi UFJ Financial Group, Inc. | 10,200 | 51,011 | ||
Mitsui Chemicals, Inc. | 52,000 | 195,819 | ||
Mixi, Inc. | 14,800 | 572,032 | ||
MS&AD Insurance Group Holdings, Inc. | 18,300 | 522,550 | ||
Nippon Telegraph & Telephone Corp. | 24,600 | 1,078,548 | ||
NTT Data Corp. | 4,900 | 253,109 | ||
NTT DOCOMO, Inc. | 16,500 | 414,083 | ||
OKUMA Corp. | 49,000 | 376,123 | ||
ORIX Corp. | 64,400 | 895,616 | ||
Panasonic Corp. | 27,700 | 258,026 | ||
Seiko Epson Corp. | 7,500 | 135,188 | ||
Seven Bank Ltd. | 172,700 | 636,308 | ||
Sumitomo Chemical Co. Ltd. | 78,000 | 357,827 | ||
Sumitomo Mitsui Financial Group, Inc. | 24,800 | 810,056 | ||
Teijin Ltd. | 18,000 | 63,395 | ||
Tokyo Electric Power Co. Holdings, Inc.(1) | 104,500 | 491,665 | ||
Toyota Boshoku Corp. | 8,800 | 175,944 | ||
Toyota Motor Corp. | 7,800 | 407,345 | ||
16,460,240 | ||||
Netherlands — 2.5% | ||||
ING Groep NV CVA | 95,844 | 1,193,844 | ||
Koninklijke Ahold NV | 25,594 | 566,981 | ||
NN Group NV | 1,380 | 46,087 | ||
1,806,912 | ||||
Norway — 1.3% | ||||
Norsk Hydro ASA | 20,417 | 81,394 | ||
Subsea 7 SA(1) | 66,642 | 591,888 | ||
TGS Nopec Geophysical Co. ASA | 17,051 | 256,613 | ||
929,895 | ||||
Portugal — 0.3% | ||||
EDP - Energias de Portugal SA | 65,270 | 217,505 | ||
Singapore — 0.1% | ||||
United Overseas Bank Ltd. | 5,600 | 74,092 | ||
Spain — 2.7% | ||||
ACS Actividades de Construccion y Servicios SA | 5,047 | 166,501 | ||
Banco Bilbao Vizcaya Argentaria SA | 20,000 | 132,650 | ||
Banco Santander SA | 100,893 | 481,702 | ||
Endesa SA | 25,089 | 515,874 | ||
Inmobiliaria Colonial SA(1) | 124,974 | 98,588 | ||
Repsol SA | 6,600 | 85,001 | ||
Telefonica SA | 42,229 | 441,247 | ||
1,921,563 |
8
Shares | Value | |||
Sweden — 1.5% | ||||
Axfood AB | 3,798 | $ | 69,938 | |
Fastighets AB Balder, B Shares(1) | 2,500 | 64,618 | ||
Intrum Justitia AB | 3,659 | 128,044 | ||
Peab AB | 29,279 | 241,495 | ||
Skanska AB, B Shares | 25,284 | 555,309 | ||
1,059,404 | ||||
Switzerland — 4.3% | ||||
Adecco Group AG | 1,183 | 71,706 | ||
Lonza Group AG | 897 | 154,855 | ||
Nestle SA | 4,210 | 310,879 | ||
Novartis AG | 594 | 47,150 | ||
Roche Holding AG | 2,930 | 769,051 | ||
Swiss Reinsurance Co. | 10,872 | 976,730 | ||
Transocean Ltd.(1) | 4,647 | 46,610 | ||
Zurich Insurance Group AG | 2,986 | 722,468 | ||
3,099,449 | ||||
United Kingdom — 22.0% | ||||
AstraZeneca plc | 17,276 | 1,007,874 | ||
Berkeley Group Holdings plc | 7,467 | 354,185 | ||
BHP Billiton plc | 39,188 | 467,118 | ||
BP plc | 138,156 | 714,851 | ||
British Land Co. plc (The) | 18,328 | 196,436 | ||
BT Group plc | 7,440 | 47,715 | ||
Centrica plc | 303,228 | 895,049 | ||
Debenhams plc | 24,157 | 25,873 | ||
Direct Line Insurance Group plc | 32,647 | 177,458 | ||
Evraz plc(1) | 22,204 | 35,697 | ||
GKN plc | 17,921 | 71,353 | ||
GlaxoSmithKline plc | 27,641 | 578,489 | ||
Glencore plc | 177,813 | 337,629 | ||
Go-Ahead Group plc | 5,367 | 199,385 | ||
HSBC Holdings plc | 214,042 | 1,379,689 | ||
Imperial Brands plc | 10,059 | 547,938 | ||
Investec plc | 74,814 | 507,977 | ||
Land Securities Group plc | 18,156 | 306,614 | ||
Legal & General Group plc | 229,647 | 796,266 | ||
Lloyds Banking Group plc | 615,224 | 641,741 | ||
Man Group plc | 299,428 | 572,019 | ||
Marks & Spencer Group plc | 41,165 | 226,382 | ||
Petrofac Ltd. | 27,599 | 310,990 | ||
Rio Tinto plc | 38,213 | 1,075,092 | ||
Royal Dutch Shell plc, B Shares | 100,488 | 2,416,721 | ||
Royal Mail plc | 70,811 | 554,845 | ||
Segro plc | 50,649 | 321,232 | ||
Sky plc | 38,232 | 533,522 | ||
Thomas Cook Group plc(1) | 47,394 | 52,443 | ||
Vodafone Group plc | 115,938 | 387,640 | ||
15,740,223 | ||||
TOTAL COMMON STOCKS (Cost $75,864,101) | 70,536,993 |
9
Shares | Value | |||
EXCHANGE-TRADED FUNDS — 0.4% | ||||
iShares MSCI Japan ETF (Cost $273,820) | 24,732 | $ | 291,343 | |
TEMPORARY CASH INVESTMENTS — 0.2% | ||||
Repurchase Agreement, Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 3.75%, 11/15/43, valued at $111,150), at 0.10%, dated 5/31/16, due 6/1/16 (Delivery value $103,000) | 103,000 | |||
State Street Institutional Liquid Reserves Fund, Premier Class | 48,195 | 48,195 | ||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $151,195) | 151,195 | |||
TOTAL INVESTMENT SECURITIES — 99.3% (Cost $76,289,116) | 70,979,531 | |||
OTHER ASSETS AND LIABILITIES — 0.7% | 528,302 | |||
TOTAL NET ASSETS — 100.0% | $ | 71,507,833 |
MARKET SECTOR DIVERSIFICATION | ||
(as a % of net assets) | ||
Financials | 33.2 | % |
Industrials | 12.3 | % |
Consumer Discretionary | 10.1 | % |
Energy | 9.7 | % |
Telecommunication Services | 6.8 | % |
Utilities | 6.8 | % |
Health Care | 6.5 | % |
Materials | 6.1 | % |
Consumer Staples | 3.6 | % |
Information Technology | 3.6 | % |
Exchange-Traded Funds | 0.4 | % |
Cash and Equivalents* | 0.9 | % |
*Includes temporary cash investments and other assets and liabilities.
NOTES TO SCHEDULE OF INVESTMENTS | ||
CVA | - | Certificaten Van Aandelen |
(1) | Non-income producing. |
See Notes to Financial Statements.
10
Statement of Assets and Liabilities |
MAY 31, 2016 (UNAUDITED) | |||
Assets | |||
Investment securities, at value (cost of $76,289,116) | $ | 70,979,531 | |
Foreign currency holdings, at value (cost of $96,012) | 95,522 | ||
Receivable for capital shares sold | 48,996 | ||
Dividends and interest receivable | 566,751 | ||
71,690,800 | |||
Liabilities | |||
Payable for capital shares redeemed | 109,341 | ||
Accrued management fees | 67,749 | ||
Distribution and service fees payable | 5,877 | ||
182,967 | |||
Net Assets | $ | 71,507,833 | |
Net Assets Consist of: | |||
Capital (par value and paid-in surplus) | $ | 84,289,298 | |
Undistributed net investment income | 1,092,852 | ||
Accumulated net realized loss | (8,562,205 | ) | |
Net unrealized depreciation | (5,312,112 | ) | |
$ | 71,507,833 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | ||||
Investor Class, $0.01 Par Value | $16,573,546 | 2,266,334 | $7.31 | |||
Institutional Class, $0.01 Par Value | $6,500,208 | 888,524 | $7.32 | |||
A Class, $0.01 Par Value | $12,618,224 | 1,719,681 | $7.34* | |||
C Class, $0.01 Par Value | $3,649,182 | 501,164 | $7.28 | |||
R Class, $0.01 Par Value | $406,629 | 55,732 | $7.30 | |||
R6 Class, $0.01 Par Value | $31,760,044 | 4,338,759 | $7.32 |
*Maximum offering price $7.79 (net asset value divided by 0.9425).
See Notes to Financial Statements.
11
Statement of Operations |
FOR THE SIX MONTHS ENDED MAY 31, 2016 (UNAUDITED) | |||
Investment Income (Loss) | |||
Income: | |||
Dividends (net of foreign taxes withheld of $143,725) | $ | 1,634,937 | |
Interest | 240 | ||
1,635,177 | |||
Expenses: | |||
Management fees | 400,263 | ||
Distribution and service fees: | |||
A Class | 16,141 | ||
C Class | 17,224 | ||
R Class | 967 | ||
Directors' fees and expenses | 1,208 | ||
Other expenses | 1,152 | ||
436,955 | |||
Net investment income (loss) | 1,198,222 | ||
Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investment transactions | (2,435,694 | ) | |
Foreign currency transactions | 553 | ||
(2,435,141 | ) | ||
Change in net unrealized appreciation (depreciation) on: | |||
Investments | (2,010,675 | ) | |
Translation of assets and liabilities in foreign currencies | 6,001 | ||
(2,004,674 | ) | ||
Net realized and unrealized gain (loss) | (4,439,815 | ) | |
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | (3,241,593 | ) |
See Notes to Financial Statements.
12
Statement of Changes in Net Assets |
SIX MONTHS ENDED MAY 31, 2016 (UNAUDITED) AND YEAR ENDED NOVEMBER 30, 2015 | ||||||
Increase (Decrease) in Net Assets | May 31, 2016 | November 30, 2015 | ||||
Operations | ||||||
Net investment income (loss) | $ | 1,198,222 | $ | 1,870,284 | ||
Net realized gain (loss) | (2,435,141 | ) | (3,498,434 | ) | ||
Change in net unrealized appreciation (depreciation) | (2,004,674 | ) | (6,227,011 | ) | ||
Net increase (decrease) in net assets resulting from operations | (3,241,593 | ) | (7,855,161 | ) | ||
Distributions to Shareholders | ||||||
From net investment income: | ||||||
Investor Class | (460,998 | ) | (717,239 | ) | ||
Institutional Class | (145,691 | ) | (39,683 | ) | ||
A Class | (329,220 | ) | (541,676 | ) | ||
C Class | (57,981 | ) | (67,359 | ) | ||
R Class | (7,725 | ) | (15,630 | ) | ||
R6 Class | (823,525 | ) | (84,394 | ) | ||
Decrease in net assets from distributions | (1,825,140 | ) | (1,465,981 | ) | ||
Capital Share Transactions | ||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | (2,325,632 | ) | 49,861,719 | |||
Redemption Fees | ||||||
Increase in net assets from redemption fees | 11,053 | 1,235 | ||||
Net increase (decrease) in net assets | (7,381,312 | ) | 40,541,812 | |||
Net Assets | ||||||
Beginning of period | 78,889,145 | 38,347,333 | ||||
End of period | $ | 71,507,833 | $ | 78,889,145 | ||
Undistributed net investment income | $ | 1,092,852 | $ | 1,719,770 |
See Notes to Financial Statements.
13
Notes to Financial Statements |
MAY 31, 2016 (UNAUDITED)
1. Organization
American Century World Mutual 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 Value 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, the Institutional Class, the A Class, the C Class, the R Class and the R6 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. The share classes differ principally in their respective sales charges and distribution and shareholder servicing expenses and arrangements. The Institutional Class and R6 Class shareholders do not require the same level of shareholder and administrative services from American Century Investment Management, Inc. (ACIM) (the investment advisor) as shareholders of other classes. In addition, financial intermediaries do not receive any service, distribution or administrative fees for the R6 Class. As a result, the Institutional Class and R6 Class are charged lower unified management fees.
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
14
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 ACIM has determined are creditworthy pursuant to criteria adopted by the Board of Directors. The fund requires that the collateral, represented by securities, received in a repurchase transaction be transferred to the custodian in a manner sufficient to enable the fund to obtain those securities in the event of a default under the repurchase agreement. ACIM monitors, on a daily basis, the securities transferred to ensure the value, including accrued interest, of the securities under each repurchase agreement is equal to or greater than amounts owed to the fund under each repurchase agreement.
Joint Trading Account — Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the fund, along with certain other funds in the American Century Investments family of funds, may transfer uninvested cash balances into a joint trading account. These balances are invested in one or more repurchase agreements that are collateralized by U.S. Treasury or Agency obligations.
Income Tax Status — It is the fund’s policy to distribute substantially all net investment income and net realized gains to shareholders and to otherwise qualify as a regulated investment company under provisions of the Internal Revenue Code. Accordingly, no provision has been made for income taxes. The fund files U.S. federal, state, local and non-U.S. tax returns as applicable. The fund's tax returns are subject to examination by the relevant taxing authority until expiration of the applicable statute of limitations, which is generally three years from the date of filing but can be longer in certain jurisdictions. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination and for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Multiple Class — All shares of the fund represent an equal pro rata interest in the net assets of the class to which such shares belong, and have identical voting, dividend, liquidation and other rights and the same terms and conditions, except for class specific expenses and exclusive rights to vote on matters affecting only individual classes. Income, non-class specific expenses, and realized and unrealized capital gains and losses of the fund are allocated to each class of shares based on their relative net assets.
Distributions to Shareholders — Distributions from net investment income and net realized gains, if any, are generally declared and paid annually. The fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code, in all events in a manner consistent with provisions of the 1940 Act.
Redemption Fees — The fund may impose a 2.00% redemption fee on shares held less than 60 days. The fee may not be applicable to all classes. The redemption fee is retained by the fund and helps cover
15
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 rate of the fee is determined by applying a fee rate calculation formula. This formula takes into account the fund’s assets as well as certain assets, if any, of other clients of the investment advisor outside the American Century Investments family of funds (such as subadvised funds and separate accounts) that have very similar investment teams and investment strategies (strategy assets). The strategy assets of the fund also include the assets of NT International Value Fund, one fund in a series issued by the corporation. The annual management fee schedule ranges from 1.100% to 1.300% for the Investor Class, A Class, C Class and R Class. The annual management fee schedule ranges from 0.900% to 1.100% for the Institutional Class and 0.750% to 0.950% for the R6 Class. The effective annual management fee for each class for the six months ended May 31, 2016 was 1.30% for the Investor Class, A Class, C Class and R Class, 1.10% for the Institutional Class and 0.95% for the R6 Class.
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 six months ended May 31, 2016 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.
Acquired Fund Fees and Expenses — The fund may invest in mutual funds, exchange-traded funds, and business development companies (the acquired funds). The fund will indirectly realize its pro rata share of the fees and expenses of the acquired funds in which it invests. These indirect fees and expenses are not paid out of the fund's assets but are reflected in the return realized by the fund on its investment in the acquired funds.
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 significant interfund transactions during the period.
16
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the six months ended May 31, 2016 were $24,419,401 and $27,573,264, respectively.
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended May 31, 2016 | Year ended November 30, 2015 | |||||||||
Shares | Amount | Shares | Amount | |||||||
Investor Class/Shares Authorized | 40,000,000 | 40,000,000 | ||||||||
Sold | 228,727 | $ | 1,604,054 | 1,194,072 | $ | 10,050,047 | ||||
Issued in reinvestment of distributions | 60,843 | 452,063 | 85,418 | 699,499 | ||||||
Redeemed | (697,775 | ) | (5,071,159 | ) | (745,377 | ) | (6,071,118 | ) | ||
(408,205 | ) | (3,015,042 | ) | 534,113 | 4,678,428 | |||||
Institutional Class/Shares Authorized | 40,000,000 | 40,000,000 | ||||||||
Sold | 347,651 | 2,447,645 | 2,680,128 | 23,061,474 | ||||||
Issued in reinvestment of distributions | 19,608 | 145,691 | 4,791 | 39,683 | ||||||
Redeemed | (473,575 | ) | (3,499,350 | ) | (1,747,655 | ) | (14,212,748 | ) | ||
(106,316 | ) | (906,014 | ) | 937,264 | 8,888,409 | |||||
A Class/Shares Authorized | 30,000,000 | 30,000,000 | ||||||||
Sold | 176,160 | 1,339,472 | 591,514 | 5,007,397 | ||||||
Issued in reinvestment of distributions | 43,886 | 327,831 | 65,172 | 536,132 | ||||||
Redeemed | (390,325 | ) | (2,801,553 | ) | (493,915 | ) | (4,062,546 | ) | ||
(170,279 | ) | (1,134,250 | ) | 162,771 | 1,480,983 | |||||
C Class/Shares Authorized | 30,000,000 | 30,000,000 | ||||||||
Sold | 58,518 | 427,093 | 214,569 | 1,747,541 | ||||||
Issued in reinvestment of distributions | 7,683 | 57,085 | 8,092 | 66,273 | ||||||
Redeemed | (15,473 | ) | (108,767 | ) | (32,269 | ) | (262,759 | ) | ||
50,728 | 375,411 | 190,392 | 1,551,055 | |||||||
R Class/Shares Authorized | 30,000,000 | 20,000,000 | ||||||||
Sold | 15,788 | 113,399 | 14,753 | 122,942 | ||||||
Issued in reinvestment of distributions | 1,035 | 7,694 | 1,903 | 15,570 | ||||||
Redeemed | (10,727 | ) | (76,114 | ) | (20,984 | ) | (160,604 | ) | ||
6,096 | 44,979 | (4,328 | ) | (22,092 | ) | |||||
R6 Class/Shares Authorized | 40,000,000 | 30,000,000 | ||||||||
Sold | 817,472 | 5,745,340 | 4,631,460 | 38,859,690 | ||||||
Issued in reinvestment of distributions | 110,838 | 823,525 | 10,298 | 84,394 | ||||||
Redeemed | (593,529 | ) | (4,259,581 | ) | (700,758 | ) | (5,659,148 | ) | ||
334,781 | 2,309,284 | 3,941,000 | 33,284,936 | |||||||
Net increase (decrease) | (293,195 | ) | $ | (2,325,632 | ) | 5,761,212 | $ | 49,861,719 |
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.
17
• | Level 1 valuation inputs consist of unadjusted quoted prices in an active market for identical investments. |
• | Level 2 valuation inputs consist of direct or indirect observable market data (including quoted prices for comparable investments, evaluations of subsequent market events, interest rates, prepayment speeds, credit risk, etc.). These inputs also consist of quoted prices for identical investments initially expressed in local currencies that are adjusted through translation into U.S. dollars. |
• | Level 3 valuation inputs consist of unobservable data (including a fund’s own assumptions). |
The level classification is based on the lowest level input that is significant to the fair valuation measurement. The valuation inputs are not necessarily an indication of the risks associated with investing in these securities or other financial instruments. There were no significant transfers between levels during the period.
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 | — | $ | 70,536,993 | — | ||||
Exchange-Traded Funds | $ | 291,343 | — | — | ||||
Temporary Cash Investments | 48,195 | 103,000 | — | |||||
$ | 339,538 | $ | 70,639,993 | — |
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 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.
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 May 31, 2016, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $ | 76,323,871 | |
Gross tax appreciation of investments | $ | 3,520,651 | |
Gross tax depreciation of investments | (8,864,991 | ) | |
Net tax appreciation (depreciation) of investments | $ | (5,344,340 | ) |
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 November 30, 2015, the fund had accumulated short-term capital losses of $(5,597,827), which represent net capital loss carryovers that may be used to offset future realized capital gains for federal income tax purposes. Any unlimited losses will be required to be utilized prior to the losses which carry an expiration date. Future capital loss carryover utilization in any given year may be subject to Internal Revenue Code limitations. Capital loss carryovers of $(2,258,267) expire in 2017 and the remaining losses are unlimited.
As of November 30, 2015, the fund had post-October capital loss deferrals of $(389,816), 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.
18
Financial Highlights |
For a Share Outstanding Throughout the Years Ended November 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 | |||||||||||||
2016(3) | $7.83 | 0.12 | (0.46) | (0.34) | (0.18) | $7.31 | (4.32)% | 1.31%(4) | 3.32%(4) | 34% | $16,574 | ||
2015 | $8.91 | 0.22 | (0.97) | (0.75) | (0.33) | $7.83 | (8.56)% | 1.31% | 2.70% | 77% | $20,945 | ||
2014 | $8.97 | 0.32 | (0.19) | 0.13 | (0.19) | $8.91 | 1.38% | 1.30% | 3.55% | 89% | $19,068 | ||
2013 | $7.40 | 0.21 | 1.60 | 1.81 | (0.24) | $8.97 | 24.96% | 1.31% | 2.63% | 83% | $17,920 | ||
2012 | $6.84 | 0.20 | 0.49 | 0.69 | (0.13) | $7.40 | 10.25% | 1.31% | 2.95% | 125% | $10,423 | ||
2011 | $6.91 | 0.14 | (0.09) | 0.05 | (0.12) | $6.84 | 0.57% | 1.31% | 1.85% | 30% | $9,391 | ||
Institutional Class | |||||||||||||
2016(3) | $7.84 | 0.13 | (0.45) | (0.32) | (0.20) | $7.32 | (4.17)% | 1.11%(4) | 3.52%(4) | 34% | $6,500 | ||
2015 | $8.92 | 0.28 | (1.01) | (0.73) | (0.35) | $7.84 | (8.37)% | 1.11% | 2.90% | 77% | $7,798 | ||
2014 | $8.96 | 0.38 | (0.23) | 0.15 | (0.19) | $8.92 | 1.67% | 1.10% | 3.75% | 89% | $513 | ||
2013 | $7.39 | 0.23 | 1.59 | 1.82 | (0.25) | $8.96 | 25.24% | 1.11% | 2.83% | 83% | $769 | ||
2012 | $6.84 | 0.23 | 0.47 | 0.70 | (0.15) | $7.39 | 10.33% | 1.11% | 3.15% | 125% | $235 | ||
2011 | $6.90 | 0.15 | (0.07) | 0.08 | (0.14) | $6.84 | 0.92% | 1.11% | 2.05% | 30% | $244 |
For a Share Outstanding Throughout the Years Ended November 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) | |||
A Class | |||||||||||||
2016(3) | $7.85 | 0.11 | (0.45) | (0.34) | (0.17) | $7.34 | (4.38)% | 1.56%(4) | 3.07%(4) | 34% | $12,618 | ||
2015 | $8.93 | 0.20 | (0.97) | (0.77) | (0.31) | $7.85 | (8.77)% | 1.56% | 2.45% | 77% | $14,838 | ||
2014 | $9.01 | 0.30 | (0.20) | 0.10 | (0.18) | $8.93 | 1.08% | 1.55% | 3.30% | 89% | $15,423 | ||
2013 | $7.43 | 0.20 | 1.60 | 1.80 | (0.22) | $9.01 | 24.67% | 1.56% | 2.38% | 83% | $15,554 | ||
2012 | $6.87 | 0.19 | 0.48 | 0.67 | (0.11) | $7.43 | 9.91% | 1.56% | 2.70% | 125% | $14,155 | ||
2011 | $6.93 | 0.12 | (0.08) | 0.04 | (0.10) | $6.87 | 0.45% | 1.56% | 1.60% | 30% | $13,981 | ||
C Class | |||||||||||||
2016(3) | $7.78 | 0.08 | (0.46) | (0.38) | (0.12) | $7.28 | (4.86)% | 2.31%(4) | 2.32%(4) | 34% | $3,649 | ||
2015 | $8.85 | 0.13 | (0.95) | (0.82) | (0.25) | $7.78 | (9.39)% | 2.31% | 1.70% | 77% | $3,502 | ||
2014 | $8.97 | 0.23 | (0.19) | 0.04 | (0.16) | $8.85 | 0.41% | 2.30% | 2.55% | 89% | $2,301 | ||
2013 | $7.40 | 0.14 | 1.59 | 1.73 | (0.16) | $8.97 | 23.68% | 2.31% | 1.63% | 83% | $2,009 | ||
2012 | $6.84 | 0.13 | 0.49 | 0.62 | (0.06) | $7.40 | 9.10% | 2.31% | 1.95% | 125% | $1,412 | ||
2011 | $6.90 | 0.06 | (0.08) | (0.02) | (0.04) | $6.84 | (0.31)% | 2.31% | 0.85% | 30% | $1,137 | ||
R Class | |||||||||||||
2016(3) | $7.80 | 0.10 | (0.45) | (0.35) | (0.15) | $7.30 | (4.47)% | 1.81%(4) | 2.82%(4) | 34% | $407 | ||
2015 | $8.87 | 0.18 | (0.96) | (0.78) | (0.29) | $7.80 | (8.95)% | 1.81% | 2.20% | 77% | $387 | ||
2014 | $8.97 | 0.28 | (0.21) | 0.07 | (0.17) | $8.87 | 0.78% | 1.80% | 3.05% | 89% | $479 | ||
2013 | $7.40 | 0.18 | 1.59 | 1.77 | (0.20) | $8.97 | 24.32% | 1.81% | 2.13% | 83% | $297 | ||
2012 | $6.84 | 0.17 | 0.49 | 0.66 | (0.10) | $7.40 | 9.67% | 1.81% | 2.45% | 125% | $283 | ||
2011 | $6.90 | 0.10 | (0.08) | 0.02 | (0.08) | $6.84 | 0.20% | 1.81% | 1.35% | 30% | $234 |
For a Share Outstanding Throughout the Years Ended November 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) | |||
R6 Class | |||||||||||||
2016(3) | $7.85 | 0.13 | (0.45) | (0.32) | (0.21) | $7.32 | (4.18)% | 0.96%(4) | 3.67%(4) | 34% | $31,760 | ||
2015 | $8.93 | 0.23 | (0.95) | (0.72) | (0.36) | $7.85 | (8.22)% | 0.96% | 3.05% | 77% | $31,418 | ||
2014 | $8.96 | 0.33 | (0.17) | 0.16 | (0.19) | $8.93 | 1.83% | 0.95% | 3.90% | 89% | $562 | ||
2013(5) | $8.21 | 0.06 | 0.69 | 0.75 | — | $8.96 | 9.14% | 0.96%(4) | 2.02%(4) | 83%(6) | $27 |
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 May 31, 2016 (unaudited). |
(4) | Annualized. |
(5) | July 26, 2013 (commencement of sale) through November 30, 2013. |
(6) | Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended November 30, 2013. |
See Notes to Financial Statements.
Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain IRAs 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.
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.
Distributions you receive from 403(b), 457 and qualified plans are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
A description of the policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund is available without charge, upon request, by calling 1-800-345-2021. It is also available on the "About Us" page of American Century Investments’ website at americancentury.com and on the Securities and Exchange Commission’s website at sec.gov. Information regarding how the investment advisor voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the "About Us" page at americancentury.com. It is also available at sec.gov.
Quarterly Portfolio Disclosure
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-Q. The fund’s Forms N-Q are available on the SEC’s website at sec.gov, and may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The fund also makes its complete schedule of portfolio holdings for the most recent quarter of its fiscal year available on its
website at americancentury.com and, upon request, by calling 1-800-345-2021.
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 World Mutual 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. | ||
©2016 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-89422 1607 |
![](https://capedge.com/proxy/N-CSRS/0000872825-16-000153/acihorizblkb99.jpg)
Semiannual Report | |
May 31, 2016 | |
NT Emerging Markets Fund |
Table of Contents |
Any opinions expressed in this report reflect those of the author as of the date of the report, and do not necessarily represent the opinions of American Century Investments® or any other person in the American Century Investments organization. Any such opinions are subject to change at any time based upon market or other conditions and American Century Investments disclaims any responsibility to update such opinions. These opinions may not be relied upon as investment advice and, because investment decisions made by American Century Investments funds are based on numerous factors, may not be relied upon as an indication of trading intent on behalf of any American Century Investments fund. Security examples are used for representational purposes only and are not intended as recommendations to purchase or sell securities. Performance information for comparative indices and securities is provided to American Century Investments by third party vendors. To the best of American Century Investments’ knowledge, such information is accurate at the time of printing.
Fund Characteristics |
MAY 31, 2016 | |
Top Ten Holdings | % of net assets |
Tencent Holdings Ltd. | 5.1% |
Taiwan Semiconductor Manufacturing Co. Ltd. | 4.6% |
Samsung Electronics Co. Ltd. | 2.9% |
HDFC Bank Ltd. | 2.5% |
China Mobile Ltd. | 2.4% |
Industrial & Commercial Bank of China Ltd., H Shares | 2.1% |
Naspers Ltd., N Shares | 1.9% |
Ping An Insurance Group Co., H Shares | 1.8% |
President Chain Store Corp. | 1.7% |
LG Household & Health Care Ltd. | 1.6% |
Types of Investments in Portfolio | % of net assets |
Common Stocks | 97.1% |
Exchange-Traded Funds | 1.7% |
Total Equity Exposure | 98.8% |
Temporary Cash Investments | 1.0% |
Other Assets and Liabilities | 0.2% |
Investments by Country | % of net assets |
China | 23.8% |
South Korea | 14.4% |
Taiwan | 13.3% |
India | 6.3% |
Thailand | 6.2% |
South Africa | 5.9% |
Mexico | 4.8% |
Russia | 4.7% |
Brazil | 4.5% |
Indonesia | 4.4% |
Turkey | 3.2% |
Other Countries | 5.6% |
Exchange-Traded Funds* | 1.7% |
Cash and Equivalents** | 1.2% |
*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. |
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 December 1, 2015 to May 31, 2016.
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 12/1/15 | Ending Account Value 5/31/16 | Expenses Paid During Period(1) 12/1/15 - 5/31/16 | Annualized Expense Ratio(1) | |
Actual | ||||
Institutional Class (after waiver) | $1,000 | $988.90 | $6.02 | 1.21% |
Institutional Class (before waiver) | $1,000 | $988.90(2) | $7.26 | 1.46% |
R6 Class (after waiver) | $1,000 | $990.40 | $5.27 | 1.06% |
R6 Class (before waiver) | $1,000 | $990.40(2) | $6.52 | 1.31% |
Hypothetical | ||||
Institutional Class (after waiver) | $1,000 | $1,018.95 | $6.11 | 1.21% |
Institutional Class (before waiver) | $1,000 | $1,017.70 | $7.36 | 1.46% |
R6 Class (after waiver) | $1,000 | $1,019.70 | $5.35 | 1.06% |
R6 Class (before waiver) | $1,000 | $1,018.45 | $6.61 | 1.31% |
(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 183, the number of days in the most recent fiscal half-year, divided by 366, to reflect the one-half year period. |
(2) | Ending account value assumes the return earned after waiver and would have been lower if a portion of the fees had not been waived. |
3
Schedule of Investments |
MAY 31, 2016 (UNAUDITED)
Shares | Value | |||
COMMON STOCKS — 97.1% | ||||
Brazil — 4.5% | ||||
Cielo SA | 242,876 | $ | 2,127,921 | |
Itau Unibanco Holding SA ADR | 527,189 | 4,222,784 | ||
Raia Drogasil SA | 370,800 | 5,873,531 | ||
Ultrapar Participacoes SA | 249,200 | 4,706,636 | ||
Vale SA ADR | 657,187 | 2,582,745 | ||
19,513,617 | ||||
Chile — 1.0% | ||||
SACI Falabella | 621,518 | 4,368,423 | ||
China — 23.8% | ||||
AAC Technologies Holdings, Inc. | 161,500 | 1,307,255 | ||
Alibaba Group Holding Ltd. ADR(1) | 77,898 | 6,387,636 | ||
Baidu, Inc. ADR(1) | 23,590 | 4,211,759 | ||
Beijing Enterprises Water Group Ltd. | 8,272,000 | 5,311,879 | ||
China Gas Holdings Ltd. | 2,640,000 | 3,737,091 | ||
China Mobile Ltd. | 893,000 | 10,181,746 | ||
China Overseas Land & Investment Ltd. | 1,292,000 | 3,882,276 | ||
China Railway Construction Corp. Ltd., H Shares | 4,051,500 | 5,062,583 | ||
CNOOC Ltd. | 3,144,000 | 3,754,634 | ||
Ctrip.com International Ltd. ADR(1) | 105,215 | 4,814,638 | ||
IMAX China Holding, Inc.(1) | 672,400 | 3,703,467 | ||
Industrial & Commercial Bank of China Ltd., H Shares | 16,788,095 | 8,900,936 | ||
KWG Property Holding Ltd. | 4,415,500 | 2,772,916 | ||
New Oriental Education & Technology Group, Inc. ADR | 75,630 | 3,195,368 | ||
Ping An Insurance Group Co., H Shares | 1,685,500 | 7,526,539 | ||
Shenzhou International Group Holdings Ltd. | 1,064,000 | 5,353,717 | ||
Tencent Holdings Ltd. | 976,400 | 21,775,262 | ||
101,879,702 | ||||
Egypt — 0.8% | ||||
Commercial International Bank Egypt S.A.E. | 688,973 | 3,302,123 | ||
Hungary — 1.0% | ||||
Richter Gedeon Nyrt | 223,047 | 4,471,590 | ||
India — 6.3% | ||||
Bharti Infratel Ltd. | 733,543 | 4,083,355 | ||
HCL Technologies Ltd. | 312,416 | 3,435,021 | ||
HDFC Bank Ltd. | 513,901 | 10,692,746 | ||
Larsen & Toubro Ltd. | 179,145 | 3,923,298 | ||
SKS Microfinance Ltd.(1) | 506,949 | 4,899,590 | ||
27,034,010 | ||||
Indonesia — 4.4% | ||||
Astra International Tbk PT | 5,926,100 | 2,863,269 | ||
Bank Rakyat Indonesia Persero Tbk PT | 2,975,300 | 2,254,345 | ||
Matahari Department Store Tbk PT | 3,510,800 | 4,876,825 | ||
Telekomunikasi Indonesia Persero Tbk PT | 19,031,000 | 5,154,810 | ||
Wijaya Karya Persero Tbk PT | 20,666,200 | 3,630,958 | ||
18,780,207 |
4
Shares | Value | |||
Mexico — 4.8% | ||||
Alsea SAB de CV | 913,750 | $ | 3,462,564 | |
Cemex SAB de CV ADR(1) | 867,162 | 5,515,150 | ||
Corp. Inmobiliaria Vesta SAB de CV | 1,699,371 | 2,485,975 | ||
Fomento Economico Mexicano SAB de CV ADR | 44,931 | 4,074,343 | ||
Grupo Aeroportuario del Centro Norte Sab de CV | 856,116 | 4,917,736 | ||
20,455,768 | ||||
Peru — 1.0% | ||||
Credicorp Ltd. | 30,083 | 4,217,637 | ||
Philippines — 1.8% | ||||
Ayala Land, Inc. | 5,047,200 | 3,852,989 | ||
Universal Robina Corp. | 943,570 | 3,934,484 | ||
7,787,473 | ||||
Russia — 4.7% | ||||
Moscow Exchange MICEX-RTS PJSC | 2,737,796 | 4,495,594 | ||
NovaTek OAO GDR | 56,935 | 5,716,274 | ||
X5 Retail Group NV GDR(1) | 258,680 | 5,057,194 | ||
Yandex NV, A Shares(1) | 226,891 | 4,673,954 | ||
19,943,016 | ||||
South Africa — 5.9% | ||||
Aspen Pharmacare Holdings Ltd. | 219,151 | 4,490,042 | ||
Capitec Bank Holdings Ltd. | 103,461 | 3,916,854 | ||
Discovery Holdings Ltd. | 437,489 | 3,346,253 | ||
Naspers Ltd., N Shares | 56,559 | 8,318,784 | ||
Sappi Ltd.(1) | 458,329 | 2,150,169 | ||
Vodacom Group Ltd. | 283,613 | 2,966,737 | ||
25,188,839 | ||||
South Korea — 14.4% | ||||
Amorepacific Corp. | 17,098 | 5,989,608 | ||
CJ Korea Express Corp.(1) | 24,821 | 4,456,867 | ||
Coway Co. Ltd. | 52,502 | 4,537,427 | ||
GS Retail Co. Ltd. | 74,710 | 3,316,126 | ||
Innocean Worldwide, Inc. | 64,142 | 4,779,166 | ||
LG Chem Ltd. | 12,843 | 2,920,333 | ||
LG Household & Health Care Ltd. | 7,555 | 6,694,143 | ||
Medy-Tox, Inc. | 10,757 | 3,962,345 | ||
NAVER Corp. | 7,922 | 4,785,904 | ||
Orion Corp. | 4,356 | 3,545,326 | ||
Samsung Electronics Co. Ltd. | 11,352 | 12,306,414 | ||
Samsung Fire & Marine Insurance Co. Ltd. | 18,382 | 4,287,797 | ||
61,581,456 | ||||
Taiwan — 13.3% | ||||
Hota Industrial Manufacturing Co. Ltd. | 1,134,000 | 5,354,879 | ||
Largan Precision Co. Ltd. | 36,000 | 3,002,530 | ||
Nien Made Enterprise Co. Ltd.(1) | 467,000 | 4,281,579 | ||
PChome Online, Inc. | 254,810 | 3,047,172 | ||
President Chain Store Corp. | 970,000 | 7,361,441 | ||
Taiwan Paiho Ltd. | 1,378,000 | 3,731,005 | ||
Taiwan Semiconductor Manufacturing Co. Ltd. | 4,116,774 | 19,755,466 | ||
Tung Thih Electronic Co. Ltd. | 387,000 | 5,411,177 |
5
Shares | Value | |||
Uni-President Enterprises Corp. | 2,655,000 | $ | 5,055,592 | |
57,000,841 | ||||
Thailand — 6.2% | ||||
Airports of Thailand PCL | 288,200 | 3,194,603 | ||
CP ALL PCL | 3,578,100 | 4,982,799 | ||
Kasikornbank PCL | 434,200 | 2,139,096 | ||
KCE Electronics PCL | 936,500 | 2,129,899 | ||
Minor International PCL | 4,190,600 | 4,604,088 | ||
Siam Cement PCL (The) | 222,950 | 2,995,549 | ||
Srisawad Power 1979 PCL | 3,086,317 | 3,671,616 | ||
Thai Oil PCL | 1,739,100 | 3,066,852 | ||
26,784,502 | ||||
Turkey — 3.2% | ||||
Haci Omer Sabanci Holding AS | 1,086,971 | 3,383,782 | ||
TAV Havalimanlari Holding AS | 422,110 | 2,164,813 | ||
Tofas Turk Otomobil Fabrikasi AS | 595,683 | 4,467,471 | ||
Ulker Biskuvi Sanayi AS | 511,687 | 3,698,859 | ||
13,714,925 | ||||
TOTAL COMMON STOCKS (Cost $388,980,195) | 416,024,129 | |||
EXCHANGE-TRADED FUNDS — 1.7% | ||||
iShares MSCI Brazil Capped ETF | 170,722 | 4,343,167 | ||
iShares MSCI Malaysia ETF | 360,965 | 2,858,843 | ||
TOTAL EXCHANGE-TRADED FUNDS (Cost $8,092,172) | 7,202,010 | |||
TEMPORARY CASH INVESTMENTS — 1.0% | ||||
Repurchase Agreement, Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 3.75%, 11/15/43, valued at $3,112,200), at 0.10%, dated 5/31/16, due 6/1/16 (Delivery value $3,048,008) | 3,048,000 | |||
State Street Institutional Liquid Reserves Fund, Premier Class | 1,394,919 | 1,394,919 | ||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $4,442,919) | 4,442,919 | |||
TOTAL INVESTMENT SECURITIES — 99.8% (Cost $401,515,286) | 427,669,058 | |||
OTHER ASSETS AND LIABILITIES — 0.2% | 990,730 | |||
TOTAL NET ASSETS — 100.0% | $ | 428,659,788 |
6
MARKET SECTOR DIVERSIFICATION | ||
(as a % of net assets) | ||
Information Technology | 20.8 | % |
Financials | 19.7 | % |
Consumer Discretionary | 18.1 | % |
Consumer Staples | 14.0 | % |
Industrials | 6.3 | % |
Telecommunication Services | 5.3 | % |
Energy | 4.0 | % |
Materials | 3.8 | % |
Health Care | 3.0 | % |
Utilities | 2.1 | % |
Exchange-Traded Funds | 1.7 | % |
Cash and Equivalents* | 1.2 | % |
*Includes temporary cash investments and other assets and liabilities.
NOTES TO SCHEDULE OF INVESTMENTS | ||
ADR | - | American Depositary Receipt |
GDR | - | Global Depositary Receipt |
(1) | Non-income producing. |
See Notes to Financial Statements.
7
Statement of Assets and Liabilities |
MAY 31, 2016 (UNAUDITED) | |||
Assets | |||
Investment securities, at value (cost of $401,515,286) | $ | 427,669,058 | |
Foreign currency holdings, at value (cost of $1,079,737) | 1,080,392 | ||
Receivable for investments sold | 6,207,453 | ||
Receivable for capital shares sold | 1,187 | ||
Dividends and interest receivable | 439,549 | ||
Other assets | 12,716 | ||
435,410,355 | |||
Liabilities | |||
Payable for investments purchased | 4,784,606 | ||
Payable for capital shares redeemed | 1,543,503 | ||
Accrued management fees | 416,387 | ||
Accrued foreign taxes | 6,071 | ||
6,750,567 | |||
Net Assets | $ | 428,659,788 | |
Net Assets Consist of: | |||
Capital (par value and paid-in surplus) | $ | 424,365,308 | |
Undistributed net investment income | 838,503 | ||
Accumulated net realized loss | (22,659,712 | ) | |
Net unrealized appreciation | 26,115,689 | ||
$ | 428,659,788 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | ||||
Institutional Class, $0.01 Par Value | $399,369,079 | 41,547,531 | $9.61 | |||
R6 Class, $0.01 Par Value | $29,290,709 | 3,047,569 | $9.61 |
See Notes to Financial Statements.
8
Statement of Operations |
FOR THE SIX MONTHS ENDED MAY 31, 2016 (UNAUDITED) | |||
Investment Income (Loss) | |||
Income: | |||
Dividends (net of foreign taxes withheld of $385,194) | $ | 3,234,031 | |
Interest | 3,941 | ||
3,237,972 | |||
Expenses: | |||
Management fees | 2,889,193 | ||
Directors' fees and expenses | 6,698 | ||
Other expenses | 4,500 | ||
2,900,391 | |||
Fees waived | (501,184 | ) | |
2,399,207 | |||
Net investment income (loss) | 838,765 | ||
Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investment transactions | (11,243,569 | ) | |
Foreign currency transactions | (225,643 | ) | |
Capital gain distributions received from underlying funds | 673,363 | ||
(10,795,849 | ) | ||
Change in net unrealized appreciation (depreciation) on: | |||
Investments (includes (increase) decrease in accrued foreign taxes of $134,679) | 8,540,316 | ||
Translation of assets and liabilities in foreign currencies | (26,709 | ) | |
8,513,607 | |||
Net realized and unrealized gain (loss) | (2,282,242 | ) | |
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | (1,443,477 | ) |
See Notes to Financial Statements.
9
Statement of Changes in Net Assets |
SIX MONTHS ENDED MAY 31, 2016 (UNAUDITED) AND YEAR ENDED NOVEMBER 30, 2015 | ||||||
Increase (Decrease) in Net Assets | May 31, 2016 | November 30, 2015 | ||||
Operations | ||||||
Net investment income (loss) | $ | 838,765 | $ | 1,883,408 | ||
Net realized gain (loss) | (10,795,849 | ) | (5,520,167 | ) | ||
Change in net unrealized appreciation (depreciation) | 8,513,607 | (34,256,631 | ) | |||
Net increase (decrease) in net assets resulting from operations | (1,443,477 | ) | (37,893,390 | ) | ||
Distributions to Shareholders | ||||||
From net investment income: | ||||||
Institutional Class | (1,209,292 | ) | (700,610 | ) | ||
R6 Class | (111,666 | ) | (53,663 | ) | ||
Decrease in net assets from distributions | (1,320,958 | ) | (754,273 | ) | ||
Capital Share Transactions | ||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | 36,527,773 | 99,909,755 | ||||
Net increase (decrease) in net assets | 33,763,338 | 61,262,092 | ||||
Net Assets | ||||||
Beginning of period | 394,896,450 | 333,634,358 | ||||
End of period | $ | 428,659,788 | $ | 394,896,450 | ||
Undistributed net investment income | $ | 838,503 | $ | 1,320,696 |
See Notes to Financial Statements.
10
Notes to Financial Statements |
MAY 31, 2016 (UNAUDITED)
1. Organization
American Century World Mutual 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 Emerging Markets Fund (the fund) is one fund in a series issued by the corporation. The fund’s investment objective is to seek capital growth. The fund is not permitted to invest in securities issued by companies assigned the Global Industry Classification Standard for the tobacco industry.
The fund offers the Institutional Class and the R6 Class, which have different fees and expenses. The difference in the fee structures between the classes is the result of their separate arrangements for shareholder and distribution services, which may be provided indirectly through another American Century Investment mutual fund. As a result, the investment advisor is able to charge the R6 Class lower unified management fees.
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
11
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. 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 — Income and capital gain distributions, if any, are recorded as of the ex-dividend date. Long-term capital gain distributions, if any, are a component of net realized gain (loss). Dividend income less foreign taxes withheld, if any, is recorded as of the ex-dividend date. Distributions received on securities that represent a return of capital or long-term capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The fund may estimate the components of distributions received that may be considered nontaxable distributions or long-term capital gain distributions for income tax purposes. Interest income is recorded on the accrual basis and includes accretion of discounts and amortization of premiums.
Foreign Currency Translations — All assets and liabilities initially expressed in foreign currencies are translated into U.S. dollars at prevailing exchange rates at period end. The fund may enter into spot foreign currency exchange contracts to facilitate transactions denominated in a foreign currency. Purchases and sales of investment securities, dividend and interest income, spot foreign currency exchange contracts, and expenses are translated at the rates of exchange prevailing on the respective dates of such transactions. Net realized and unrealized foreign currency exchange gains or losses related to investment securities are a component of net realized gain (loss) on investment transactions and change in net unrealized appreciation (depreciation) on investments, respectively.
Repurchase Agreements — The fund may enter into repurchase agreements with institutions that American Century Investment Management, Inc. (ACIM) (the investment advisor) has determined are creditworthy pursuant to criteria adopted by the Board of Directors. The fund requires that the collateral, represented by securities, received in a repurchase transaction be transferred to the custodian in a manner sufficient to enable the fund to obtain those securities in the event of a default under the repurchase agreement. ACIM monitors, on a daily basis, the securities transferred to ensure the value, including accrued interest, of the securities under each repurchase agreement is equal to or greater than amounts owed to the fund under each repurchase agreement.
Joint Trading Account — Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the fund, along with certain other funds in the American Century Investments family of funds, may transfer uninvested cash balances into a joint trading account. These balances are invested in one or more repurchase agreements that are collateralized by U.S. Treasury or Agency obligations.
Income Tax Status — It is the fund’s policy to distribute substantially all net investment income and net realized gains to shareholders and to otherwise qualify as a regulated investment company under provisions of the Internal Revenue Code. Accordingly, no provision has been made for income taxes. The fund files U.S. federal, state, local and non-U.S. tax returns as applicable. The fund's tax returns are subject to examination by the relevant taxing authority until expiration of the applicable statute of limitations, which is generally three years from the date of filing but can be longer in certain jurisdictions. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination and for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Multiple Class — All shares of the fund represent an equal pro rata interest in the net assets of the class to which such shares belong, and have identical voting, dividend, liquidation and other rights and the same terms and conditions, except for class specific expenses and exclusive rights to vote on matters affecting only individual classes. Income, non-class specific expenses, and realized and unrealized capital gains and losses of the fund are allocated to each class of shares based on their relative net assets.
Distributions to Shareholders — Distributions from net investment income and net realized gains, if any, are generally declared and paid annually. The fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code, in all events in a manner consistent with provisions of the 1940 Act.
12
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) 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 rate of the fee is determined by applying a fee rate calculation formula. This formula takes into account the fund’s assets as well as certain assets, if any, of other clients of the investment advisor outside the American Century Investments family of funds (such as subadvised funds and separate accounts) that have very similar investment teams and investment strategies (strategy assets). The strategy assets of the fund also include the assets of Emerging Markets Fund, one fund in a series issued by the corporation. The annual management fee schedule ranges from 1.050% to 1.650% for the Institutional Class and 0.900% to 1.500% for the R6 Class. During the six months ended May 31, 2016, the investment advisor voluntarily agreed to waive 0.250% of the fund's management fee. The investment advisor expects this waiver to continue until March 31, 2017 and cannot terminate it prior to such date without the approval of the Board of Directors. The total amount of the waiver for each class for the six months ended May 31, 2016 was $468,772 and $32,412 for the Institutional Class and R6 Class, respectively. The effective annual management fee before waiver for each class for the six months ended May 31, 2016 was 1.45% for the Institutional Class and 1.30% for the R6 Class. The effective annual management fee after waiver for each class for the six months ended May 31, 2016 was 1.20% for the Institutional Class and 1.05% for the R6 Class.
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 significant interfund transactions during the period.
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the six months ended May 31, 2016 were $166,614,826 and $123,619,317, respectively.
13
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended May 31, 2016 | Year ended November 30, 2015 | |||||||||
Shares | Amount | Shares | Amount | |||||||
Institutional Class/Shares Authorized | 300,000,000 | 300,000,000 | ||||||||
Sold | 5,828,742 | $ | 52,639,304 | 11,739,797 | $ | 121,732,892 | ||||
Issued in reinvestment of distributions | 127,026 | 1,209,292 | 67,044 | 700,610 | ||||||
Redeemed | (2,653,840 | ) | (24,546,562 | ) | (3,424,560 | ) | (36,763,331 | ) | ||
3,301,928 | 29,302,034 | 8,382,281 | 85,670,171 | |||||||
R6 Class/Shares Authorized | 40,000,000 | 40,000,000 | ||||||||
Sold | 913,070 | 8,468,389 | 1,656,279 | 17,340,728 | ||||||
Issued in reinvestment of distributions | 11,730 | 111,666 | 5,140 | 53,663 | ||||||
Redeemed | (142,543 | ) | (1,354,316 | ) | (317,714 | ) | (3,154,807 | ) | ||
782,257 | 7,225,739 | 1,343,705 | 14,239,584 | |||||||
Net increase (decrease) | 4,084,185 | $ | 36,527,773 | 9,725,986 | $ | 99,909,755 |
6. Fair Value Measurements
The fund’s investments valuation process is based on several considerations and may use multiple inputs to determine the fair value of the investments held by the fund. In conformity with accounting principles generally accepted in the United States of America, the inputs used to determine a valuation are classified into three broad levels.
• | Level 1 valuation inputs consist of unadjusted quoted prices in an active market for identical investments. |
• | Level 2 valuation inputs consist of direct or indirect observable market data (including quoted prices for comparable investments, evaluations of subsequent market events, interest rates, prepayment speeds, credit risk, etc.). These inputs also consist of quoted prices for identical investments initially expressed in local currencies that are adjusted through translation into U.S. dollars. |
• | Level 3 valuation inputs consist of unobservable data (including a fund’s own assumptions). |
The level classification is based on the lowest level input that is significant to the fair valuation measurement. The valuation inputs are not necessarily an indication of the risks associated with investing in these securities or other financial instruments. There were no significant transfers between levels during the period.
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 | ||||||||
Brazil | $ | 6,805,529 | $ | 12,708,088 | — | |||
China | 18,609,401 | 83,270,301 | — | |||||
Mexico | 9,589,493 | 10,866,275 | — | |||||
Peru | 4,217,637 | — | — | |||||
Russia | 4,673,954 | 15,269,062 | — | |||||
Other Countries | — | 250,014,389 | — | |||||
Exchange-Traded Funds | 7,202,010 | — | — | |||||
Temporary Cash Investments | 1,394,919 | 3,048,000 | — | |||||
$ | 52,492,943 | $ | 375,176,115 | — |
14
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 May 31, 2016, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $ | 402,789,735 | |
Gross tax appreciation of investments | $ | 46,621,980 | |
Gross tax depreciation of investments | (21,742,657 | ) | |
Net tax appreciation (depreciation) of investments | $ | 24,879,323 |
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 November 30, 2015, the fund had accumulated short-term capital losses of $(9,140,455), which represent net capital loss carryovers that may be used to offset future realized capital gains for federal income tax purposes. Any unlimited losses will be required to be utilized prior to the losses which carry an expiration date. Future capital loss carryover utilization in any given year may be subject to Internal Revenue Code limitations. Capital loss carryovers of $(1,146,451) expire in 2017 and the remaining losses are unlimited.
As of November 30, 2015, the fund had post-October capital loss deferrals of $(1,040,430), 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 November 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) | |||
Institutional Class | |||||||||||||||
2016(3) | $9.75 | 0.02 | (0.13) | (0.11) | (0.03) | $9.61 | (1.11)% | 1.21%(4) | 1.46%(4) | 0.41%(4) | 0.16%(4) | 31% | $399,369 | ||
2015 | $10.84 | 0.05 | (1.12) | (1.07) | (0.02) | $9.75 | (9.88)% | 1.24% | 1.49% | 0.49% | 0.24% | 61% | $372,802 | ||
2014 | $10.67 | 0.05 | 0.16 | 0.21 | (0.04) | $10.84 | 2.02% | 1.25% | 1.50% | 0.45% | 0.20% | 84% | $323,641 | ||
2013 | $10.05 | 0.04 | 0.63 | 0.67 | (0.05) | $10.67 | 6.66% | 1.42% | 1.52% | 0.38% | 0.28% | 76% | $269,117 | ||
2012 | $8.94 | 0.05 | 1.07 | 1.12 | (0.01) | $10.05 | 12.51% | 1.54% | 1.54% | 0.50% | 0.50% | 101% | $169,277 | ||
2011 | $10.24 | 0.04 | (1.34) | (1.30) | — | $8.94 | (12.70)% | 1.52% | 1.52% | 0.37% | 0.37% | 87% | $119,682 | ||
R6 Class | |||||||||||||||
2016(3) | $9.75 | 0.03 | (0.12) | (0.09) | (0.05) | $9.61 | (0.96)% | 1.06%(4) | 1.31%(4) | 0.56%(4) | 0.31%(4) | 31% | $29,291 | ||
2015 | $10.84 | 0.07 | (1.12) | (1.05) | (0.04) | $9.75 | (9.74)% | 1.09% | 1.34% | 0.64% | 0.39% | 61% | $22,095 | ||
2014 | $10.68 | 0.06 | 0.16 | 0.22 | (0.06) | $10.84 | 2.11% | 1.10% | 1.35% | 0.60% | 0.35% | 84% | $9,993 | ||
2013(5) | $9.90 | (0.01) | 0.79 | 0.78 | — | $10.68 | 7.88% | 1.12%(4) | 1.37%(4) | (0.37)%(4) | (0.62)%(4) | 76%(6) | $2,280 |
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 May 31, 2016 (unaudited). |
(4) | Annualized. |
(5) | July 26, 2013 (commencement of sale) through November 30, 2013. |
(6) | Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended November 30, 2013. |
See Notes to Financial Statements.
Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain IRAs 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.
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.
Distributions you receive from 403(b), 457 and qualified plans are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
A description of the policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund is available without charge, upon request, by calling 1-800-345-2021. It is also available on the "About Us" page of American Century Investments’ website at americancentury.com and on the Securities and Exchange Commission’s website at sec.gov. Information regarding how the investment advisor voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the "About Us" page at americancentury.com. It is also available at sec.gov.
Quarterly Portfolio Disclosure
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-Q. The fund’s Forms N-Q are available on the SEC’s website at sec.gov, and may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The fund also makes its complete schedule of portfolio holdings for the most recent quarter of its fiscal year available on its
website at americancentury.com and, upon request, by calling 1-800-345-2021.
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 World Mutual 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. | ||
©2016 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-89416 1607 |
![](https://capedge.com/proxy/N-CSRS/0000872825-16-000153/acihorizblkb99.jpg)
Semiannual Report | |
May 31, 2016 | |
NT International Growth Fund |
Table of Contents |
Any opinions expressed in this report reflect those of the author as of the date of the report, and do not necessarily represent the opinions of American Century Investments® or any other person in the American Century Investments organization. Any such opinions are subject to change at any time based upon market or other conditions and American Century Investments disclaims any responsibility to update such opinions. These opinions may not be relied upon as investment advice and, because investment decisions made by American Century Investments funds are based on numerous factors, may not be relied upon as an indication of trading intent on behalf of any American Century Investments fund. Security examples are used for representational purposes only and are not intended as recommendations to purchase or sell securities. Performance information for comparative indices and securities is provided to American Century Investments by third party vendors. To the best of American Century Investments’ knowledge, such information is accurate at the time of printing.
Fund Characteristics |
MAY 31, 2016 | |
Top Ten Holdings | % of net assets |
Roche Holding AG | 3.5% |
Reckitt Benckiser Group plc | 2.5% |
Novo Nordisk A/S, B Shares | 2.0% |
AIA Group Ltd. | 1.9% |
Pandora A/S | 1.8% |
Intesa Sanpaolo SpA | 1.7% |
Shire plc | 1.7% |
TOTAL SA | 1.5% |
Tencent Holdings Ltd. | 1.5% |
Worldpay Group plc | 1.5% |
Types of Investments in Portfolio | % of net assets |
Common Stocks | 96.4% |
Exchange-Traded Funds | 0.4% |
Total Equity Exposure | 96.8% |
Temporary Cash Investments | 2.9% |
Other Assets and Liabilities | 0.3% |
Investments by Country | % of net assets |
United Kingdom | 21.3% |
Japan | 14.5% |
France | 14.4% |
Germany | 6.2% |
Switzerland | 5.4% |
Denmark | 4.8% |
Ireland | 4.1% |
Netherlands | 3.7% |
Sweden | 2.9% |
China | 2.7% |
Belgium | 2.5% |
Hong Kong | 2.4% |
Other Countries | 11.5% |
Exchange-Traded Funds | 0.4% |
Cash and Equivalents* | 3.2% |
*Includes temporary cash investments and other assets and liabilities.
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 December 1, 2015 to May 31, 2016.
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 12/1/15 | Ending Account Value 5/31/16 | Expenses Paid During Period(1) 12/1/15 - 5/31/16 | Annualized Expense Ratio(1) | |
Actual | ||||
Institutional Class | $1,000 | $963.50 | $4.81 | 0.98% |
R6 Class | $1,000 | $964.90 | $4.08 | 0.83% |
Hypothetical | ||||
Institutional Class | $1,000 | $1,020.10 | $4.95 | 0.98% |
R6 Class | $1,000 | $1,020.85 | $4.19 | 0.83% |
(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 183, the number of days in the most recent fiscal half-year, divided by 366, to reflect the one-half year period. |
3
Schedule of Investments |
MAY 31, 2016 (UNAUDITED)
Shares | Value | |||
COMMON STOCKS — 96.4% | ||||
Austria — 1.0% | ||||
Erste Group Bank AG(1) | 327,040 | $ | 8,751,342 | |
Belgium — 2.5% | ||||
Anheuser-Busch InBev SA/NV | 85,838 | 10,873,549 | ||
KBC Groep NV(1) | 155,270 | 9,192,624 | ||
UCB SA | 34,330 | 2,480,913 | ||
22,547,086 | ||||
Canada — 1.8% | ||||
Alimentation Couche-Tard, Inc., B Shares | 197,950 | 8,709,891 | ||
Canadian Pacific Railway Ltd. | 55,620 | 7,198,556 | ||
15,908,447 | ||||
China — 2.7% | ||||
Alibaba Group Holding Ltd. ADR(1) | 58,050 | 4,760,100 | ||
Baidu, Inc. ADR(1) | 33,710 | 6,018,583 | ||
Tencent Holdings Ltd. | 599,500 | 13,369,797 | ||
24,148,480 | ||||
Denmark — 4.8% | ||||
DSV A/S | 198,770 | 9,066,222 | ||
Novo Nordisk A/S, B Shares | 317,580 | 17,663,656 | ||
Pandora A/S | 109,660 | 16,297,996 | ||
43,027,874 | ||||
France — 14.4% | ||||
Accor SA | 103,760 | 4,514,617 | ||
Arkema SA | 73,810 | 6,055,877 | ||
Cie de Saint-Gobain | 157,990 | 7,052,599 | ||
Criteo SA ADR(1) | 115,360 | 5,176,203 | ||
Essilor International SA | 82,751 | 10,804,757 | ||
Iliad SA | 25,940 | 5,684,400 | ||
Kering | 47,040 | 7,597,016 | ||
Legrand SA | 150,340 | 8,269,281 | ||
LVMH Moet Hennessy Louis Vuitton SE | 54,180 | 8,683,823 | ||
Pernod Ricard SA | 53,620 | 5,841,341 | ||
Publicis Groupe SA | 106,310 | 7,695,677 | ||
Rexel SA | 298,290 | 4,561,862 | ||
Thales SA | 106,900 | 9,260,849 | ||
TOTAL SA | 276,781 | 13,450,173 | ||
Valeo SA | 79,000 | 11,923,550 | ||
Veolia Environnement SA | 308,840 | 6,934,472 | ||
Vinci SA | 83,410 | 6,272,768 | ||
129,779,265 | ||||
Germany — 6.2% | ||||
adidas AG | 90,710 | 11,621,918 | ||
Deutsche Boerse AG | 85,030 | 7,450,431 | ||
Fresenius Medical Care AG & Co. KGaA | 136,270 | 11,826,427 | ||
HeidelbergCement AG | 125,300 | 10,719,625 | ||
Symrise AG | 79,390 | 4,981,115 |
4
Shares | Value | |||
Zalando SE(1) | 301,712 | $ | 8,844,015 | |
55,443,531 | ||||
Hong Kong — 2.4% | ||||
AIA Group Ltd. | 2,929,400 | 17,133,640 | ||
Sands China Ltd. | 1,240,800 | 4,758,336 | ||
21,891,976 | ||||
India — 0.6% | ||||
Tata Motors Ltd.(1) | 716,970 | 4,897,901 | ||
Indonesia — 0.8% | ||||
Astra International Tbk PT | 8,400,200 | 4,058,662 | ||
Bank Mandiri Persero Tbk PT | 5,269,200 | 3,481,298 | ||
7,539,960 | ||||
Ireland — 4.1% | ||||
Bank of Ireland(1) | 23,510,736 | 7,167,628 | ||
CRH plc | 332,410 | 10,073,031 | ||
Ryanair Holdings plc ADR | 127,688 | 11,159,931 | ||
Smurfit Kappa Group plc | 306,820 | 8,370,720 | ||
36,771,310 | ||||
Israel — 0.6% | ||||
Mobileye NV(1) | 150,470 | 5,713,346 | ||
Italy — 1.7% | ||||
Intesa Sanpaolo SpA | 6,045,990 | 15,526,083 | ||
Japan — 14.5% | ||||
Calbee, Inc. | 207,200 | 7,652,937 | ||
Daikin Industries Ltd. | 74,400 | 6,380,118 | ||
Daito Trust Construction Co. Ltd. | 54,600 | 7,935,946 | ||
Isuzu Motors Ltd. | 168,100 | 2,028,099 | ||
Kao Corp. | 87,600 | 4,826,366 | ||
Keyence Corp. | 10,200 | 6,484,671 | ||
Kubota Corp. | 832,300 | 12,255,070 | ||
Mitsubishi Estate Co. Ltd. | 257,000 | 4,965,472 | ||
Murata Manufacturing Co. Ltd. | 67,400 | 7,882,151 | ||
Nitori Holdings Co. Ltd. | 84,700 | 8,612,652 | ||
Olympus Corp. | 212,000 | 8,988,486 | ||
Ono Pharmaceutical Co. Ltd. | 201,500 | 8,960,004 | ||
ORIX Corp. | 767,700 | 10,676,462 | ||
Ryohin Keikaku Co. Ltd. | 52,300 | 12,057,787 | ||
Seven & i Holdings Co. Ltd. | 272,000 | 11,652,756 | ||
Suntory Beverage & Food Ltd. | 193,500 | 9,138,980 | ||
130,497,957 | ||||
Mexico — 0.5% | ||||
Cemex SAB de CV ADR(1) | 681,668 | 4,335,408 | ||
Netherlands — 3.7% | ||||
ASML Holding NV | 76,910 | 7,650,310 | ||
Koninklijke DSM NV | 110,730 | 6,590,169 | ||
Koninklijke Vopak NV | 118,690 | 6,184,391 | ||
NXP Semiconductors NV(1) | 132,910 | 12,558,666 | ||
32,983,536 | ||||
Norway — 0.9% | ||||
Statoil ASA | 507,660 | 8,095,276 |
5
Shares | Value | |||
Portugal — 1.1% | ||||
Jeronimo Martins SGPS SA | 617,500 | $ | 10,003,616 | |
South Korea — 0.6% | ||||
Amorepacific Corp. | 16,040 | 5,618,980 | ||
Spain — 1.9% | ||||
Cellnex Telecom SAU | 296,245 | 4,779,447 | ||
Industria de Diseno Textil SA | 361,035 | 12,195,785 | ||
16,975,232 | ||||
Sweden — 2.9% | ||||
Hexagon AB, B Shares | 265,080 | 10,293,227 | ||
Lundin Petroleum AB(1) | 423,410 | 7,593,751 | ||
Svenska Cellulosa AB SCA, B Shares | 267,614 | 8,566,112 | ||
26,453,090 | ||||
Switzerland — 5.4% | ||||
Actelion Ltd. | 31,740 | 5,208,042 | ||
Chocoladefabriken Lindt & Spruengli AG | 970 | 5,977,113 | ||
Julius Baer Group Ltd. | 140,240 | 6,240,257 | ||
Roche Holding AG | 119,864 | 31,461,285 | ||
48,886,697 | ||||
United Kingdom — 21.3% | ||||
Admiral Group plc | 262,980 | 7,495,856 | ||
ARM Holdings plc | 165,380 | 2,364,142 | ||
Ashtead Group plc | 685,773 | 9,694,014 | ||
ASOS plc(1) | 91,490 | 4,632,533 | ||
Associated British Foods plc | 112,063 | 4,778,301 | ||
Auto Trader Group plc | 2,062,416 | 11,739,301 | ||
Aviva plc | 1,242,200 | 8,092,532 | ||
Bunzl plc | 333,570 | 9,875,095 | ||
Carnival plc | 186,050 | 9,186,077 | ||
Compass Group plc | 410,350 | 7,649,031 | ||
Liberty Global plc, Class A(1) | 117,140 | 4,375,179 | ||
London Stock Exchange Group plc | 269,920 | 10,692,169 | ||
Pearson plc | 371,740 | 4,514,564 | ||
Prudential plc | 474,000 | 9,473,945 | ||
Reckitt Benckiser Group plc | 228,780 | 22,780,549 | ||
Rio Tinto plc | 301,566 | 8,484,316 | ||
Shire plc | 250,590 | 15,461,327 | ||
St. James's Place plc | 715,200 | 9,607,599 | ||
Weir Group plc (The) | 241,190 | 4,188,436 | ||
Wolseley plc | 224,370 | 13,164,381 | ||
Worldpay Group plc(1) | 3,294,717 | 13,222,941 | ||
191,472,288 | ||||
TOTAL COMMON STOCKS (Cost $789,722,205) | 867,268,681 | |||
EXCHANGE-TRADED FUNDS — 0.4% | ||||
iShares MSCI EAFE ETF (Cost $3,786,508) | 62,460 | 3,646,415 | ||
TEMPORARY CASH INVESTMENTS — 2.9% | ||||
Repurchase Agreement, Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 3.75%, 11/15/43, valued at $18,407,675), at 0.10%, dated 5/31/16, due 6/1/16 (Delivery value $18,041,050) | 18,041,000 |
6
Shares | Value | |||
State Street Institutional Liquid Reserves Fund, Premier Class | 8,253,100 | $ | 8,253,100 | |
TOTAL TEMPORARY CASH INVESTMENTS (Cost $26,294,100) | 26,294,100 | |||
TOTAL INVESTMENT SECURITIES — 99.7% (Cost $819,802,813) | 897,209,196 | |||
OTHER ASSETS AND LIABILITIES — 0.3% | 3,005,604 | |||
TOTAL NET ASSETS — 100.0% | $ | 900,214,800 |
MARKET SECTOR DIVERSIFICATION | ||
(as a % of net assets) | ||
Consumer Discretionary | 17.3 | % |
Financials | 16.1 | % |
Industrials | 14.0 | % |
Consumer Staples | 12.7 | % |
Health Care | 12.6 | % |
Information Technology | 12.0 | % |
Materials | 6.6 | % |
Energy | 3.2 | % |
Telecommunication Services | 1.1 | % |
Utilities | 0.8 | % |
Exchange-Traded Funds | 0.4 | % |
Cash and Equivalents* | 3.2 | % |
*Includes temporary cash investments and other assets and liabilities.
NOTES TO SCHEDULE OF INVESTMENTS | ||
ADR | - | American Depositary Receipt |
(1) | Non-income producing. |
See Notes to Financial Statements.
7
Statement of Assets and Liabilities |
MAY 31, 2016 (UNAUDITED) | |||
Assets | |||
Investment securities, at value (cost of $819,802,813) | $ | 897,209,196 | |
Foreign currency holdings, at value (cost of $1,516,562) | 1,498,505 | ||
Receivable for capital shares sold | 40,246 | ||
Dividends and interest receivable | 3,471,118 | ||
Other assets | 33,800 | ||
902,252,865 | |||
Liabilities | |||
Payable for investments purchased | 949,175 | ||
Payable for capital shares redeemed | 299,030 | ||
Accrued management fees | 715,461 | ||
Accrued foreign taxes | 74,399 | ||
2,038,065 | |||
Net Assets | $ | 900,214,800 | |
Net Assets Consist of: | |||
Capital (par value and paid-in surplus) | $ | 835,220,907 | |
Undistributed net investment income | 3,425,370 | ||
Accumulated net realized loss | (15,688,859 | ) | |
Net unrealized appreciation | 77,257,382 | ||
$ | 900,214,800 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | ||||
Institutional Class, $0.01 Par Value | $838,686,760 | 82,747,235 | $10.14 | |||
R6 Class, $0.01 Par Value | $61,528,040 | 6,070,420 | $10.14 |
See Notes to Financial Statements.
8
Statement of Operations |
FOR THE SIX MONTHS ENDED MAY 31, 2016 (UNAUDITED) | |||
Investment Income (Loss) | |||
Income: | |||
Dividends (net of foreign taxes withheld of $1,266,432) | $ | 11,208,416 | |
Interest | 10,862 | ||
11,219,278 | |||
Expenses: | |||
Management fees | 4,037,340 | ||
Directors' fees and expenses | 14,073 | ||
Other expenses | 12,806 | ||
4,064,219 | |||
Net investment income (loss) | 7,155,059 | ||
Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investment transactions | (11,670,639 | ) | |
Foreign currency transactions | (137,980 | ) | |
(11,808,619 | ) | ||
Change in net unrealized appreciation (depreciation) on: | |||
Investments (includes (increase) decrease in accrued foreign taxes of $(74,399)) | (19,086,911 | ) | |
Translation of assets and liabilities in foreign currencies | 62,025 | ||
(19,024,886 | ) | ||
Net realized and unrealized gain (loss) | (30,833,505 | ) | |
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | (23,678,446 | ) |
See Notes to Financial Statements.
9
Statement of Changes in Net Assets |
SIX MONTHS ENDED MAY 31, 2016 (UNAUDITED) AND YEAR ENDED NOVEMBER 30, 2015 | ||||||
Increase (Decrease) in Net Assets | May 31, 2016 | November 30, 2015 | ||||
Operations | ||||||
Net investment income (loss) | $ | 7,155,059 | $ | 6,033,670 | ||
Net realized gain (loss) | (11,808,619 | ) | 25,543,145 | |||
Change in net unrealized appreciation (depreciation) | (19,024,886 | ) | (36,306,946 | ) | ||
Net increase (decrease) in net assets resulting from operations | (23,678,446 | ) | (4,730,131 | ) | ||
Distributions to Shareholders | ||||||
From net investment income: | ||||||
Institutional Class | (5,713,153 | ) | (4,445,815 | ) | ||
R6 Class | (434,699 | ) | (177,103 | ) | ||
From net realized gains: | ||||||
Institutional Class | (23,995,241 | ) | (32,506,946 | ) | ||
R6 Class | (1,521,449 | ) | (994,137 | ) | ||
Decrease in net assets from distributions | (31,664,542 | ) | (38,124,001 | ) | ||
Capital Share Transactions | ||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | 113,223,218 | (81,703,913 | ) | |||
Net increase (decrease) in net assets | 57,880,230 | (124,558,045 | ) | |||
Net Assets | ||||||
Beginning of period | 842,334,570 | 966,892,615 | ||||
End of period | $ | 900,214,800 | $ | 842,334,570 | ||
Undistributed net investment income | $ | 3,425,370 | $ | 2,418,163 |
See Notes to Financial Statements.
10
Notes to Financial Statements |
MAY 31, 2016 (UNAUDITED)
1. Organization
American Century World Mutual 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 International Growth Fund (the fund) is one fund in a series issued by the corporation. The fund’s investment objective is to seek capital growth. The fund is not permitted to invest in securities issued by companies assigned the Global Industry Classification Standard for the tobacco industry.
The fund offers the Institutional Class and the R6 Class, which have different fees and expenses. The difference in the fee structures between the classes is the result of their separate arrangements for shareholder and distribution services, which may be provided indirectly through another American Century Investment mutual fund. As a result, the investment advisor is able to charge the R6 Class a lower unified management fee.
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
11
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. 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.
Repurchase Agreements — The fund may enter into repurchase agreements with institutions that American Century Investment Management, Inc. (ACIM) (the investment advisor) has determined are creditworthy pursuant to criteria adopted by the Board of Directors. The fund requires that the collateral, represented by securities, received in a repurchase transaction be transferred to the custodian in a manner sufficient to enable the fund to obtain those securities in the event of a default under the repurchase agreement. ACIM monitors, on a daily basis, the securities transferred to ensure the value, including accrued interest, of the securities under each repurchase agreement is equal to or greater than amounts owed to the fund under each repurchase agreement.
Joint Trading Account — Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the fund, along with certain other funds in the American Century Investments family of funds, may transfer uninvested cash balances into a joint trading account. These balances are invested in one or more repurchase agreements that are collateralized by U.S. Treasury or Agency obligations.
Income Tax Status — It is the fund’s policy to distribute substantially all net investment income and net realized gains to shareholders and to otherwise qualify as a regulated investment company under provisions of the Internal Revenue Code. Accordingly, no provision has been made for income taxes. The fund files U.S. federal, state, local and non-U.S. tax returns as applicable. The fund's tax returns are subject to examination by the relevant taxing authority until expiration of the applicable statute of limitations, which is generally three years from the date of filing but can be longer in certain jurisdictions. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination and for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Multiple Class — All shares of the fund represent an equal pro rata interest in the net assets of the class to which such shares belong, and have identical voting, dividend, liquidation and other rights and the same terms and conditions, except for class specific expenses and exclusive rights to vote on matters affecting only individual classes. Income, non-class specific expenses, and realized and unrealized capital gains and losses of the fund are allocated to each class of shares based on their relative net assets.
Distributions to Shareholders — Distributions from net investment income and net realized gains, if any, are generally declared and paid annually. The fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code, in all events in a manner consistent with provisions of the 1940 Act. The fund may elect to treat a portion of its payment to a redeeming shareholder,
12
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.
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 rate of the fee is determined by applying a fee rate calculation formula. This formula takes into account the fund’s assets as well as certain assets, if any, of other clients of the investment advisor outside the American Century Investments family of funds (such as subadvised funds and separate accounts) that have very similar investment teams and investment strategies (strategy assets). The strategy assets of the fund also include the assets of International Growth Fund, one fund in a series issued by the corporation. The annual management fee schedule ranges from 0.850% to 1.300% for the Institutional Class and 0.700% to 1.150% for the R6 Class. The effective annual management fee for each class for the six months ended May 31, 2016 was 0.97% for the Institutional Class and 0.82% for the R6 Class.
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.
Acquired Fund Fees and Expenses — The fund may invest in mutual funds, exchange-traded funds, and business development companies (the acquired funds). The fund will indirectly realize its pro rata share of the fees and expenses of the acquired funds in which it invests. These indirect fees and expenses are not paid out of the fund's assets but are reflected in the return realized by the fund on its investment in the acquired funds.
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
significant interfund transactions during the period.
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the six months ended May 31, 2016 were $359,634,777 and $260,731,004, respectively.
13
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended May 31, 2016 | Year ended November 30, 2015 | |||||||||
Shares | Amount | Shares | Amount | |||||||
Institutional Class/Shares Authorized | 560,000,000 | 520,000,000 | ||||||||
Sold | 10,812,507 | $ | 103,390,114 | 20,052,758 | $ | 221,419,288 | ||||
Issued in reinvestment of distributions | 2,887,113 | 29,708,394 | 3,473,004 | 36,952,761 | ||||||
Redeemed | (3,671,359 | ) | (38,208,189 | ) | (31,869,055 | ) | (359,661,904 | ) | ||
10,028,261 | 94,890,319 | (8,343,293 | ) | (101,289,855 | ) | |||||
R6 Class/Shares Authorized | 40,000,000 | 40,000,000 | ||||||||
Sold | 1,833,943 | 18,211,509 | 3,382,368 | 37,379,941 | ||||||
Issued in reinvestment of distributions | 190,102 | 1,956,148 | 110,183 | 1,171,240 | ||||||
Redeemed | (184,747 | ) | (1,834,758 | ) | (1,696,365 | ) | (18,965,239 | ) | ||
1,839,298 | 18,332,899 | 1,796,186 | 19,585,942 | |||||||
Net increase (decrease) | 11,867,559 | $ | 113,223,218 | (6,547,107 | ) | $ | (81,703,913 | ) |
6. Fair Value Measurements
The fund’s investments valuation process is based on several considerations and may use multiple inputs to determine the fair value of the investments held by the fund. In conformity with accounting principles generally accepted in the United States of America, the inputs used to determine a valuation are classified into three broad levels.
• | Level 1 valuation inputs consist of unadjusted quoted prices in an active market for identical investments. |
• | Level 2 valuation inputs consist of direct or indirect observable market data (including quoted prices for comparable investments, evaluations of subsequent market events, interest rates, prepayment speeds, credit risk, etc.). These inputs also consist of quoted prices for identical investments initially expressed in local currencies that are adjusted through translation into U.S. dollars. |
• | Level 3 valuation inputs consist of unobservable data (including a fund’s own assumptions). |
The level classification is based on the lowest level input that is significant to the fair valuation measurement. The valuation inputs are not necessarily an indication of the risks associated with investing in these securities or other financial instruments. There were no significant transfers between levels during the period.
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 | ||||||||
China | $ | 10,778,683 | $ | 13,369,797 | — | |||
France | 5,176,203 | 124,603,062 | — | |||||
Ireland | 11,159,931 | 25,611,379 | — | |||||
Israel | 5,713,346 | — | — | |||||
Mexico | 4,335,408 | — | — | |||||
Netherlands | 12,558,666 | 20,424,870 | — | |||||
United Kingdom | 4,375,179 | 187,097,109 | — | |||||
Other Countries | — | 442,065,048 | — | |||||
Exchange-Traded Funds | 3,646,415 | — | — | |||||
Temporary Cash Investments | 8,253,100 | 18,041,000 | — | |||||
$ | 65,996,931 | $ | 831,212,265 | — |
14
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 May 31, 2016, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $ | 823,895,547 | |
Gross tax appreciation of investments | $ | 98,310,486 | |
Gross tax depreciation of investments | (24,996,837 | ) | |
Net tax appreciation (depreciation) of investments | $ | 73,313,649 |
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 November 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) | |||
Institutional Class | |||||||||||||||
2016(3) | $10.95 | 0.08 | (0.47) | (0.39) | (0.08) | (0.34) | (0.42) | $10.14 | (3.65)% | 0.98%(4) | 1.70%(4) | 32% | $838,687 | ||
2015 | $11.58 | 0.08 | (0.26) | (0.18) | (0.05) | (0.40) | (0.45) | $10.95 | (1.44)% | 0.97% | 0.69% | 83% | $795,985 | ||
2014 | $12.17 | 0.10 | 0.03 | 0.13 | (0.17) | (0.55) | (0.72) | $11.58 | 1.26% | 0.98% | 0.86% | 67% | $938,672 | ||
2013 | $9.94 | 0.11 | 2.27 | 2.38 | (0.15) | — | (0.15) | $12.17 | 24.27% | 1.02% | 1.01% | 89% | $771,045 | ||
2012 | $8.71 | 0.13 | 1.17 | 1.30 | (0.07) | — | (0.07) | $9.94 | 15.13% | 1.08% | 1.47% | 93% | $487,964 | ||
2011 | $9.11 | 0.10 | (0.41) | (0.31) | (0.09) | — | (0.09) | $8.71 | (3.47)% | 1.12% | 1.04% | 77% | $345,234 | ||
R6 Class | |||||||||||||||
2016(3) | $10.95 | 0.10 | (0.47) | (0.37) | (0.10) | (0.34) | (0.44) | $10.14 | (3.51)% | 0.83%(4) | 1.85%(4) | 32% | $61,528 | ||
2015 | $11.59 | 0.10 | (0.27) | (0.17) | (0.07) | (0.40) | (0.47) | $10.95 | (1.37)% | 0.82% | 0.84% | 83% | $46,349 | ||
2014 | $12.18 | 0.11 | 0.04 | 0.15 | (0.19) | (0.55) | (0.74) | $11.59 | 1.43% | 0.83% | 1.01% | 67% | $28,220 | ||
2013(5) | $11.13 | (0.01) | 1.06 | 1.05 | — | — | — | $12.18 | 9.43% | 0.85%(4) | (0.34)%(4) | 89%(6) | $6,561 |
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 May 31, 2016 (unaudited). |
(4) | Annualized. |
(5) | July 26, 2013 (commencement of sale) through November 30, 2013. |
(6) | Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended November 30, 2013. |
See Notes to Financial Statements.
Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain IRAs 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.
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.
Distributions you receive from 403(b), 457 and qualified plans are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
A description of the policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund is available without charge, upon request, by calling 1-800-345-2021. It is also available on the "About Us" page of American Century Investments’ website at americancentury.com and on the Securities and Exchange Commission’s website at sec.gov. Information regarding how the investment advisor voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the "About Us" page at americancentury.com. It is also available at sec.gov.
Quarterly Portfolio Disclosure
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-Q. The fund’s Forms N-Q are available on the SEC’s website at sec.gov, and may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The fund also makes its complete schedule of portfolio holdings for the most recent quarter of its fiscal year available on its
website at americancentury.com and, upon request, by calling 1-800-345-2021.
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 World Mutual 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. | ||
©2016 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-89417 1607 |
![](https://capedge.com/proxy/N-CSRS/0000872825-16-000153/acihorizblkb99.jpg)
Semiannual Report | |
May 31, 2016 | |
NT International Small-Mid Cap Fund |
Table of Contents |
Any opinions expressed in this report reflect those of the author as of the date of the report, and do not necessarily represent the opinions of American Century Investments® or any other person in the American Century Investments organization. Any such opinions are subject to change at any time based upon market or other conditions and American Century Investments disclaims any responsibility to update such opinions. These opinions may not be relied upon as investment advice and, because investment decisions made by American Century Investments funds are based on numerous factors, may not be relied upon as an indication of trading intent on behalf of any American Century Investments fund. Security examples are used for representational purposes only and are not intended as recommendations to purchase or sell securities. Performance information for comparative indices and securities is provided to American Century Investments by third party vendors. To the best of American Century Investments’ knowledge, such information is accurate at the time of printing.
Fund Characteristics |
MAY 31, 2016 | |
Top Ten Holdings | % of net assets |
Pandora A/S | 2.6% |
Genmab A/S | 2.3% |
DSV A/S | 2.2% |
Persimmon plc | 1.6% |
Buzzi Unicem SpA | 1.5% |
DCC plc | 1.5% |
Lonza Group AG | 1.5% |
Teleperformance | 1.5% |
W-Scope Corp. | 1.4% |
Dfds A/S | 1.4% |
Types of Investments in Portfolio | % of net assets |
Common Stocks | 98.4% |
Temporary Cash Investments | 1.0% |
Other Assets and Liabilities | 0.6% |
Investments by Country | % of net assets |
Japan | 21.8% |
United Kingdom | 13.8% |
France | 10.4% |
Denmark | 10.1% |
Australia | 6.1% |
Switzerland | 5.8% |
Sweden | 5.7% |
Germany | 5.4% |
Canada | 5.1% |
Spain | 2.8% |
Italy | 2.6% |
Other Countries | 8.8% |
Cash and Equivalents* | 1.6% |
*Includes temporary cash investments and other assets and liabilities. |
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 December 1, 2015 to May 31, 2016.
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 12/1/15 | Ending Account Value 5/31/16 | Expenses Paid During Period(1) 12/1/15 - 5/31/16 | Annualized Expense Ratio(1) | |
Actual | ||||
Investor Class | $1,000 | $1,033.50 | $7.52 | 1.48% |
Institutional Class | $1,000 | $1,034.10 | $6.51 | 1.28% |
R6 Class | $1,000 | $1,035.30 | $5.75 | 1.13% |
Hypothetical | ||||
Investor Class | $1,000 | $1,017.60 | $7.47 | 1.48% |
Institutional Class | $1,000 | $1,018.60 | $6.46 | 1.28% |
R6 Class | $1,000 | $1,019.35 | $5.70 | 1.13% |
(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 183, the number of days in the most recent fiscal half-year, divided by 366, to reflect the one-half year period. |
3
Schedule of Investments |
MAY 31, 2016 (UNAUDITED)
Shares | Value | |||
COMMON STOCKS — 98.4% | ||||
Australia — 6.1% | ||||
APN Outdoor Group Ltd. | 501,999 | $ | 2,481,688 | |
Bellamy's Australia Ltd. | 139,313 | 1,106,566 | ||
Burson Group Ltd. | 372,300 | 1,428,814 | ||
Magellan Financial Group Ltd. | 104,256 | 1,859,664 | ||
Qantas Airways Ltd. | 881,358 | 1,961,965 | ||
Star Entertainment Grp Ltd. (The) | 439,185 | 1,793,429 | ||
Treasury Wine Estates Ltd. | 334,449 | 2,499,416 | ||
13,131,542 | ||||
Belgium — 1.0% | ||||
Galapagos NV(1) | 38,999 | 2,246,851 | ||
Canada — 5.1% | ||||
Agnico-Eagle Mines Ltd. New York Shares | 31,736 | 1,425,581 | ||
CCL Industries, Inc., Class B | 8,540 | 1,520,118 | ||
Element Financial Corp. | 146,932 | 1,723,273 | ||
Gildan Activewear, Inc. | 19,717 | 587,443 | ||
Maple Leaf Foods, Inc. | 90,390 | 2,029,958 | ||
PrairieSky Royalty Ltd. | 97,230 | 1,881,799 | ||
Silver Wheaton Corp. | 94,270 | 1,755,308 | ||
10,923,480 | ||||
China — 0.4% | ||||
Tongda Group Holdings Ltd. | 4,280,000 | 908,793 | ||
Denmark — 10.1% | ||||
Ambu A/S, B Shares | 26,280 | 1,071,297 | ||
Dfds A/S | 61,622 | 3,053,122 | ||
DSV A/S | 102,564 | 4,678,110 | ||
Genmab A/S(1) | 27,559 | 4,980,220 | ||
H. Lundbeck A/S(1) | 58,590 | 2,305,140 | ||
Pandora A/S | 38,034 | 5,652,726 | ||
21,740,615 | ||||
Finland — 0.6% | ||||
Amer Sports Oyj | 46,886 | 1,397,051 | ||
France — 10.4% | ||||
BioMerieux | 11,390 | 1,487,187 | ||
Criteo SA ADR(1) | 43,460 | 1,950,050 | ||
Eiffage SA | 28,280 | 2,086,179 | ||
Eurofins Scientific SE | 6,569 | 2,547,186 | ||
Nexans SA(1) | 50,885 | 2,618,546 | ||
Nexity SA | 39,589 | 2,133,720 | ||
Plastic Omnium SA | 66,889 | 2,230,489 | ||
Remy Cointreau SA | 29,645 | 2,461,964 | ||
Rubis SCA | 23,225 | 1,760,310 | ||
Teleperformance | 36,117 | 3,149,747 | ||
22,425,378 | ||||
Germany — 5.4% | ||||
CompuGroup Medical SE | 36,787 | 1,604,907 |
4
Shares | Value | |||
GEA Group AG | 14,630 | $ | 678,226 | |
Grand City Properties SA | 123,932 | 2,608,245 | ||
KION Group AG | 32,339 | 1,789,565 | ||
SMA Solar Technology AG(1) | 32,353 | 1,782,600 | ||
Stroeer SE & Co. KGaA | 37,469 | 2,037,802 | ||
Symrise AG | 16,809 | 1,054,636 | ||
11,555,981 | ||||
Hong Kong — 1.6% | ||||
Techtronic Industries Co. Ltd. | 514,000 | 2,067,046 | ||
Wynn Macau Ltd. | 888,800 | 1,390,832 | ||
3,457,878 | ||||
Ireland — 1.3% | ||||
Dalata Hotel Group plc(1) | 390,620 | 2,051,423 | ||
Kingspan Group plc | 27,337 | 768,169 | ||
2,819,592 | ||||
Israel — 1.4% | ||||
Mellanox Technologies Ltd.(1) | 36,630 | 1,736,262 | ||
Partner Communications Co. Ltd.(1) | 235,377 | 1,257,926 | ||
2,994,188 | ||||
Italy — 2.6% | ||||
Buzzi Unicem SpA | 165,630 | 3,291,388 | ||
De' Longhi SpA | 44,653 | 1,197,861 | ||
FinecoBank Banca Fineco SpA | 139,330 | 1,016,968 | ||
5,506,217 | ||||
Japan — 21.8% | ||||
Anicom Holdings, Inc. | 66,700 | 1,697,391 | ||
Asahi Intecc Co. Ltd. | 38,000 | 1,921,705 | ||
Daito Trust Construction Co. Ltd. | 19,400 | 2,819,732 | ||
DeNA Co. Ltd. | 95,200 | 1,915,434 | ||
Dip Corp. | 92,300 | 2,521,402 | ||
Disco Corp. | 23,900 | 2,277,013 | ||
Ezaki Glico Co. Ltd. | 17,500 | 943,469 | ||
Financial Products Group Co. Ltd. | 252,400 | 2,805,837 | ||
Gulliver International Co. Ltd. | 186,100 | 1,883,940 | ||
Hoshizaki Electric Co. Ltd. | 13,200 | 1,264,749 | ||
Ichigo, Inc. | 704,200 | 2,963,446 | ||
Japan Exchange Group, Inc. | 116,600 | 1,589,976 | ||
Japan Hotel REIT Investment Corp. | 2,280 | 1,982,788 | ||
Koito Manufacturing Co. Ltd. | 38,900 | 1,837,242 | ||
LIXIL Group Corp. | 72,800 | 1,316,166 | ||
Ono Pharmaceutical Co. Ltd. | 20,500 | 911,564 | ||
Open House Co. Ltd. | 107,172 | 2,868,631 | ||
Ryohin Keikaku Co. Ltd. | 7,600 | 1,752,183 | ||
Sundrug Co. Ltd. | 30,800 | 2,550,558 | ||
Sysmex Corp. | 19,900 | 1,455,637 | ||
Takeuchi Manufacturing Co. Ltd. | 71,300 | 1,238,824 | ||
Temp Holdings Co. Ltd. | 119,600 | 1,909,539 | ||
Tokyo Steel Manufacturing Co. Ltd. | 217,500 | 1,306,159 | ||
W-Scope Corp. | 52,000 | 3,085,203 | ||
46,818,588 |
5
Shares | Value | |||
Netherlands — 1.0% | ||||
Koninklijke Vopak NV | 41,283 | $ | 2,151,068 | |
Norway — 1.0% | ||||
Marine Harvest ASA | 127,185 | 2,123,906 | ||
Portugal — 0.5% | ||||
Jeronimo Martins SGPS SA | 62,059 | 1,005,367 | ||
Spain — 2.8% | ||||
Cellnex Telecom SAU | 66,533 | 1,073,406 | ||
Distribuidora Internacional de Alimentacion SA | 150,880 | 902,337 | ||
Gamesa Corp. Tecnologica SA | 91,791 | 1,828,661 | ||
Inmobiliaria Colonial SA(1) | 1,479,919 | 1,167,462 | ||
Merlin Properties Socimi SA | 90,189 | 992,851 | ||
5,964,717 | ||||
Sweden — 5.7% | ||||
Attendo AB | 106,085 | 1,052,412 | ||
Boliden AB | 49,896 | 882,908 | ||
Fastighets AB Balder, B Shares(1) | 74,312 | 1,920,752 | ||
Fingerprint Cards AB, B Shares(1) | 86,425 | 1,153,183 | ||
Loomis AB, B Shares | 50,970 | 1,346,759 | ||
Lundin Petroleum AB(1) | 65,014 | 1,166,010 | ||
RaySearch Laboratories AB | 143,986 | 2,162,030 | ||
Saab AB, B Shares | 46,595 | 1,549,005 | ||
Thule Group AB (The) | 66,097 | 1,014,274 | ||
12,247,333 | ||||
Switzerland — 5.8% | ||||
dorma+kaba Holding AG | 2,239 | 1,470,892 | ||
Flughafen Zuerich AG | 14,150 | 2,481,233 | ||
Geberit AG | 6,740 | 2,576,660 | ||
Lonza Group AG | 18,598 | 3,210,681 | ||
Partners Group Holding AG | 6,660 | 2,807,384 | ||
12,546,850 | ||||
United Kingdom — 13.8% | ||||
ASOS plc(1) | 56,009 | 2,835,977 | ||
Auto Trader Group plc | 514,045 | 2,925,951 | ||
DCC plc | 35,272 | 3,213,321 | ||
Greencore Group plc | 220,082 | 1,098,751 | ||
Howden Joinery Group plc | 282,019 | 2,070,903 | ||
ITV plc | 276,140 | 859,087 | ||
Persimmon plc | 113,564 | 3,457,378 | ||
Provident Financial plc | 68,552 | 2,891,245 | ||
Rightmove plc | 17,526 | 1,072,211 | ||
Rotork plc | 573,840 | 1,634,815 | ||
Sophos Group plc | 288,718 | 878,146 | ||
Travis Perkins plc | 42,520 | 1,184,257 | ||
UDG Healthcare plc | 136,010 | 1,166,181 | ||
Weir Group plc (The) | 91,840 | 1,594,867 | ||
Worldpay Group plc(1) | 687,836 | 2,760,545 | ||
29,643,635 | ||||
TOTAL COMMON STOCKS (Cost $184,291,385) | 211,609,030 |
6
Shares | Value | |||
TEMPORARY CASH INVESTMENTS — 1.0% | ||||
Repurchase Agreement, Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 3.75%, 11/15/43, valued at $1,506,700), at 0.10%, dated 5/31/16, due 6/1/16 (Delivery value $1,475,004) | $ | 1,475,000 | ||
State Street Institutional Liquid Reserves Fund, Premier Class | 674,941 | 674,941 | ||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $2,149,941) | 2,149,941 | |||
TOTAL INVESTMENT SECURITIES — 99.4% (Cost $186,441,326) | 213,758,971 | |||
OTHER ASSETS AND LIABILITIES — 0.6% | 1,326,057 | |||
TOTAL NET ASSETS — 100.0% | $ | 215,085,028 |
MARKET SECTOR DIVERSIFICATION | ||
(as a % of net assets) | ||
Industrials | 22.2 | % |
Consumer Discretionary | 18.6 | % |
Financials | 16.6 | % |
Health Care | 13.1 | % |
Information Technology | 10.2 | % |
Consumer Staples | 7.7 | % |
Materials | 6.6 | % |
Energy | 1.5 | % |
Telecommunication Services | 1.1 | % |
Utilities | 0.8 | % |
Cash and Equivalents* | 1.6 | % |
*Includes temporary cash investments and other assets and liabilities.
NOTES TO SCHEDULE OF INVESTMENTS | ||
ADR | - | American Depositary Receipt |
(1) | Non-income producing. |
See Notes to Financial Statements.
7
Statement of Assets and Liabilities |
MAY 31, 2016 (UNAUDITED) | |||
Assets | |||
Investment securities, at value (cost of $186,441,326) | $ | 213,758,971 | |
Foreign currency holdings, at value (cost of $95,454) | 94,816 | ||
Receivable for investments sold | 1,919,777 | ||
Receivable for capital shares sold | 1,150 | ||
Dividends and interest receivable | 458,165 | ||
216,232,879 | |||
Liabilities | |||
Payable for investments purchased | 912,793 | ||
Accrued management fees | 235,058 | ||
1,147,851 | |||
Net Assets | $ | 215,085,028 | |
Net Assets Consist of: | |||
Capital (par value and paid-in surplus) | $ | 202,703,509 | |
Distributions in excess of net investment income | (153,672 | ) | |
Accumulated net realized loss | (14,786,693 | ) | |
Net unrealized appreciation | 27,321,884 | ||
$ | 215,085,028 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | ||||
Investor Class, $0.01 Par Value | $63,863,957 | 6,061,194 | $10.54 | |||
Institutional Class, $0.01 Par Value | $140,555,449 | 13,328,912 | $10.55 | |||
R6 Class, $0.01 Par Value | $10,665,622 | 1,010,826 | $10.55 |
See Notes to Financial Statements.
8
Statement of Operations |
FOR THE SIX MONTHS ENDED MAY 31, 2016 (UNAUDITED) | |||
Investment Income (Loss) | |||
Income: | |||
Dividends (net of foreign taxes withheld of $156,785) | $ | 1,779,053 | |
Interest | 2,641 | ||
1,781,694 | |||
Expenses: | |||
Management fees | 1,323,349 | ||
Directors' fees and expenses | 3,373 | ||
Other expenses | 1,698 | ||
1,328,420 | |||
Net investment income (loss) | 453,274 | ||
Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investment transactions | (6,192,361 | ) | |
Foreign currency transactions | (23,520 | ) | |
(6,215,881 | ) | ||
Change in net unrealized appreciation (depreciation) on: | |||
Investments | 13,579,100 | ||
Translation of assets and liabilities in foreign currencies | 11,249 | ||
13,590,349 | |||
Net realized and unrealized gain (loss) | 7,374,468 | ||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 7,827,742 |
See Notes to Financial Statements.
9
Statement of Changes in Net Assets |
SIX MONTHS ENDED MAY 31, 2016 (UNAUDITED) AND PERIOD ENDED NOVEMBER 30, 2015 | ||||||
Increase (Decrease) in Net Assets | May 31, 2016 | November 30, 2015(1) | ||||
Operations | ||||||
Net investment income (loss) | $ | 453,274 | $ | 649,860 | ||
Net realized gain (loss) | (6,215,881 | ) | (8,218,545 | ) | ||
Change in net unrealized appreciation (depreciation) | 13,590,349 | 13,731,535 | ||||
Net increase (decrease) in net assets resulting from operations | 7,827,742 | 6,162,850 | ||||
Distributions to Shareholders | ||||||
From net investment income: | ||||||
Investor Class | (438,707 | ) | — | |||
Institutional Class | (1,087,818 | ) | — | |||
R6 Class | (82,548 | ) | — | |||
Decrease in net assets from distributions | (1,609,073 | ) | — | |||
Capital Share Transactions | ||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | 1,750,675 | 200,952,834 | ||||
Net increase (decrease) in net assets | 7,969,344 | 207,115,684 | ||||
Net Assets | ||||||
Beginning of period | 207,115,684 | — | ||||
End of period | $ | 215,085,028 | $ | 207,115,684 | ||
Undistributed (distributions in excess of) net investment income | $ | (153,672 | ) | $ | 1,002,127 |
(1) | March 19, 2015 (fund inception) through November 30, 2015. |
See Notes to Financial Statements.
10
Notes to Financial Statements |
MAY 31, 2016 (UNAUDITED)
1. Organization
American Century World Mutual 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 International Small-Mid Cap Fund (the fund) is one fund in a series issued by the corporation. The fund’s investment objective is to seek capital growth. The fund is not permitted to invest in securities issued by companies assigned the Global Industry Classification Standard for the tobacco industry.
The fund offers the Investor Class, the Institutional Class and the R6 Class, which have different fees and expenses. The difference in the fee structures between the classes is the result of their separate arrangements for shareholder and distribution services, which may be provided indirectly through another American Century Investment mutual fund. As a result, the investment advisor is able to charge the Institutional Class and R6 Class lower unified management fees. All classes of the fund commenced sale on March 19, 2015, the fund’s inception date.
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
11
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 and net realized gains, if any, are generally declared and paid annually. The fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code, in all events in a manner consistent with provisions of the 1940 Act.
12
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. and American Century Strategic Asset Allocations, 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) 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 annual management fee is 1.47% for the Investor Class, 1.27% for the Institutional Class and 1.12% for the R6 Class.
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 significant interfund transactions during the period.
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the six months ended May 31, 2016 were $126,108,618 and $123,122,277, respectively.
13
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended May 31, 2016 | Period ended November 30, 2015(1) | |||||||||
Shares | Amount | Shares | Amount | |||||||
Investor Class/Shares Authorized | 80,000,000 | 100,000,000 | ||||||||
Sold | — | — | 6,624,685 | $ | 66,247,282 | |||||
Issued in reinvestment of distributions | 43,010 | $ | 438,707 | — | — | |||||
Redeemed | (342,034 | ) | (3,526,562 | ) | (264,467 | ) | (2,771,716 | ) | ||
(299,024 | ) | (3,087,855 | ) | 6,360,218 | 63,475,566 | |||||
Institutional Class/Shares Authorized | 130,000,000 | 150,000,000 | ||||||||
Sold | 1,208,204 | 11,378,100 | 13,245,884 | 132,504,598 | ||||||
Issued in reinvestment of distributions | 106,649 | 1,087,818 | — | — | ||||||
Redeemed | (921,636 | ) | (9,508,427 | ) | (310,189 | ) | (3,259,552 | ) | ||
393,217 | 2,957,491 | 12,935,695 | 129,245,046 | |||||||
R6 Class/Shares Authorized | 40,000,000 | 40,000,000 | ||||||||
Sold | 231,297 | 2,273,259 | 910,428 | 9,164,580 | ||||||
Issued in reinvestment of distributions | 8,093 | 82,548 | — | — | ||||||
Redeemed | (46,362 | ) | (474,768 | ) | (92,630 | ) | (932,358 | ) | ||
193,028 | 1,881,039 | 817,798 | 8,232,222 | |||||||
Net increase (decrease) | 287,221 | $ | 1,750,675 | 20,113,711 | $ | 200,952,834 |
(1) | March 19, 2015 (fund inception) through November 30, 2015. |
6. Fair Value Measurements
The fund’s investments valuation process is based on several considerations and may use multiple inputs to determine the fair value of the investments held by the fund. In conformity with accounting principles generally accepted in the United States of America, the inputs used to determine a valuation are classified into three broad levels.
• | Level 1 valuation inputs consist of unadjusted quoted prices in an active market for identical investments. |
• | Level 2 valuation inputs consist of direct or indirect observable market data (including quoted prices for comparable investments, evaluations of subsequent market events, interest rates, prepayment speeds, credit risk, etc.). These inputs also consist of quoted prices for identical investments initially expressed in local currencies that are adjusted through translation into U.S. dollars. |
• | Level 3 valuation inputs consist of unobservable data (including a fund’s own assumptions). |
The level classification is based on the lowest level input that is significant to the fair valuation measurement. The valuation inputs are not necessarily an indication of the risks associated with investing in these securities or other financial instruments. There were no significant transfers between levels during the period.
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 | $ | 6,867,201 | $ | 204,741,829 | — | |||
Temporary Cash Investments | 674,941 | 1,475,000 | — | |||||
$ | 7,542,142 | $ | 206,216,829 | — |
14
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.
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 May 31, 2016, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $ | 186,822,124 | |
Gross tax appreciation of investments | $ | 29,550,154 | |
Gross tax depreciation of investments | (2,613,307 | ) | |
Net tax appreciation (depreciation) of investments | $ | 26,936,847 |
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 November 30, 2015, the fund had accumulated short-term capital losses of $(7,556,613), 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.
15
Financial Highlights |
For a Share Outstanding Throughout the Periods Indicated | |||||||||||||
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 | |||||||||||||
2016(3) | $10.29 | 0.01 | 0.31 | 0.32 | (0.07) | $10.54 | 3.35% | 1.48%(4) | 0.30%(4) | 62% | $63,864 | ||
2015(5) | $10.00 | 0.02 | 0.27 | 0.29 | — | $10.29 | 2.70% | 1.47%(4) | 0.32%(4) | 118% | $65,428 | ||
Institutional Class | |||||||||||||
2016(3) | $10.30 | 0.03 | 0.31 | 0.34 | (0.09) | $10.55 | 3.41% | 1.28%(4) | 0.50%(4) | 62% | $140,555 | ||
2015(5) | $10.00 | 0.04 | 0.26 | 0.30 | — | $10.30 | 2.80% | 1.27%(4) | 0.52%(4) | 118% | $133,255 | ||
R6 Class | |||||||||||||
2016(3) | $10.31 | 0.04 | 0.30 | 0.34 | (0.10) | $10.55 | 3.53% | 1.13%(4) | 0.65%(4) | 62% | $10,666 | ||
2015(5) | $10.00 | 0.05 | 0.26 | 0.31 | — | $10.31 | 2.90% | 1.12%(4) | 0.67%(4) | 118% | $8,433 |
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 May 31, 2016 (unaudited). |
(4) | Annualized. |
(5) | March 19, 2015 (fund inception) through November 30, 2015. |
See Notes to Financial Statements.
Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain IRAs 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.
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.
Distributions you receive from 403(b), 457 and qualified plans are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
A description of the policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund is available without charge, upon request, by calling 1-800-345-2021. It is also available on the "About Us" page of American Century Investments’ website at americancentury.com and on the Securities and Exchange Commission’s website at sec.gov. Information regarding how the investment advisor voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the "About Us" page at americancentury.com. It is also available at sec.gov.
Quarterly Portfolio Disclosure
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-Q. The fund’s Forms N-Q are available on the SEC’s website at sec.gov, and may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The fund also makes its complete schedule of portfolio holdings for the most recent quarter of its fiscal year available on its
website at americancentury.com and, upon request, by calling 1-800-345-2021.
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 World Mutual 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. | ||
©2016 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-89418 1607 |
![](https://capedge.com/proxy/N-CSRS/0000872825-16-000153/acihorizblkb99.jpg)
Semiannual Report | |
May 31, 2016 | |
NT International Value Fund |
Table of Contents |
Any opinions expressed in this report reflect those of the author as of the date of the report, and do not necessarily represent the opinions of American Century Investments® or any other person in the American Century Investments organization. Any such opinions are subject to change at any time based upon market or other conditions and American Century Investments disclaims any responsibility to update such opinions. These opinions may not be relied upon as investment advice and, because investment decisions made by American Century Investments funds are based on numerous factors, may not be relied upon as an indication of trading intent on behalf of any American Century Investments fund. Security examples are used for representational purposes only and are not intended as recommendations to purchase or sell securities. Performance information for comparative indices and securities is provided to American Century Investments by third party vendors. To the best of American Century Investments’ knowledge, such information is accurate at the time of printing.
Fund Characteristics |
MAY 31, 2016 | |
Top Ten Holdings | % of net assets |
Royal Dutch Shell plc, B Shares | 3.4% |
Allianz SE | 2.2% |
Westpac Banking Corp. | 2.0% |
HSBC Holdings plc | 1.9% |
Australia & New Zealand Banking Group Ltd. | 1.9% |
AXA SA | 1.9% |
TOTAL SA | 1.8% |
ING Groep NV CVA | 1.7% |
Nippon Telegraph & Telephone Corp. | 1.5% |
Rio Tinto plc | 1.5% |
Types of Investments in Portfolio | % of net assets |
Common Stocks | 97.9% |
Exchange-Traded Funds | 0.5% |
Total Equity Exposure | 98.4% |
Temporary Cash Investments | 0.7% |
Other Assets and Liabilities | 0.9% |
Investments by Country | % of net assets |
Japan | 22.8% |
United Kingdom | 21.6% |
France | 12.8% |
Germany | 9.5% |
Australia | 7.5% |
Switzerland | 4.4% |
Italy | 3.6% |
Hong Kong | 2.9% |
Spain | 2.6% |
Netherlands | 2.6% |
Other Countries | 7.6% |
Exchange-Traded Funds* | 0.5% |
Cash and Equivalents** | 1.6% |
*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. |
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 December 1, 2015 to May 31, 2016.
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 12/1/15 | Ending Account Value 5/31/16 | Expenses Paid During Period(1) 12/1/15 - 5/31/16 | Annualized Expense Ratio(1) | |
Actual | ||||
Investor Class | $1,000 | $956.90 | $6.36 | 1.30% |
Institutional Class | $1,000 | $958.50 | $5.39 | 1.10% |
R6 Class | $1,000 | $958.60 | $4.65 | 0.95% |
Hypothetical | ||||
Investor Class | $1,000 | $1,018.50 | $6.56 | 1.30% |
Institutional Class | $1,000 | $1,019.50 | $5.55 | 1.10% |
R6 Class | $1,000 | $1,020.25 | $4.80 | 0.95% |
(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 183, the number of days in the most recent fiscal half-year, divided by 366, to reflect the one-half year period. |
3
Schedule of Investments |
MAY 31, 2016 (UNAUDITED)
Shares | Value | |||
COMMON STOCKS — 97.9% | ||||
Australia — 7.5% | ||||
Australia & New Zealand Banking Group Ltd. | 830,871 | $ | 15,301,049 | |
BHP Billiton Ltd. | 191,978 | 2,647,391 | ||
CIMIC Group Ltd. | 332,987 | 9,000,924 | ||
Commonwealth Bank of Australia | 9,117 | 510,211 | ||
Downer EDI Ltd. | 598,689 | 1,691,867 | ||
Flight Centre Travel Group Ltd. | 36,925 | 843,593 | ||
Fortescue Metals Group Ltd. | 1,271,881 | 2,739,371 | ||
Metcash Ltd.(1) | 539,369 | 799,149 | ||
National Australia Bank Ltd. | 54,000 | 1,059,624 | ||
OZ Minerals Ltd. | 425,334 | 1,678,460 | ||
Qantas Airways Ltd. | 1,057,190 | 2,353,379 | ||
Regis Resources Ltd. | 562,889 | 1,187,938 | ||
Telstra Corp. Ltd. | 1,183,665 | 4,782,212 | ||
Westpac Banking Corp. | 730,499 | 16,208,626 | ||
60,803,794 | ||||
Austria — 0.2% | ||||
Raiffeisen Bank International AG(1) | 96,927 | 1,296,847 | ||
Belgium — 1.4% | ||||
Bekaert SA | 32,959 | 1,466,874 | ||
KBC Groep NV(1) | 172,702 | 10,224,670 | ||
11,691,544 | ||||
Denmark — 1.0% | ||||
Vestas Wind Systems A/S | 118,158 | 8,466,750 | ||
Finland — 0.3% | ||||
UPM-Kymmene Oyj | 126,936 | 2,441,960 | ||
France — 12.8% | ||||
AXA SA | 607,142 | 15,253,619 | ||
BNP Paribas SA | 161,626 | 8,949,400 | ||
CNP Assurances | 98,626 | 1,673,478 | ||
Engie SA | 469,451 | 7,231,725 | ||
Faurecia | 108,851 | 4,329,793 | ||
Innate Pharma SA(1) | 50,305 | 732,112 | ||
Metropole Television SA | 34,603 | 635,074 | ||
Nexans SA(1) | 57,195 | 2,943,259 | ||
Orange SA | 567,860 | 9,866,019 | ||
Peugeot SA(1) | 484,605 | 7,626,926 | ||
Safran SA | 40,652 | 2,849,582 | ||
Sanofi | 141,599 | 11,609,872 | ||
SCOR SE | 101,254 | 3,385,442 | ||
Societe Generale SA | 222,795 | 9,169,559 | ||
TOTAL SA | 299,370 | 14,547,885 | ||
UBISOFT Entertainment SA(1) | 40,929 | 1,509,640 | ||
Valeo SA | 13,783 | 2,080,282 | ||
104,393,667 |
4
Shares | Value | |||
Germany — 9.5% | ||||
Allianz SE | 109,199 | $ | 17,824,094 | |
BASF SE | 29,714 | 2,295,445 | ||
Continental AG | 9,365 | 2,008,970 | ||
Deutsche Lufthansa AG | 78,335 | 1,097,773 | ||
Deutsche Telekom AG | 407,784 | 7,200,552 | ||
E.ON SE | 1,075,616 | 10,573,591 | ||
Hannover Rueck SE | 64,522 | 7,275,959 | ||
METRO AG | 284,832 | 9,358,600 | ||
Muenchener Rueckversicherungs-Gesellschaft AG | 12,833 | 2,410,949 | ||
ProSiebenSat.1 Media SE | 158,268 | 7,956,940 | ||
Siemens AG | 33,746 | 3,634,222 | ||
SMA Solar Technology AG(1) | 16,578 | 913,422 | ||
STADA Arzneimittel AG | 85,573 | 4,556,886 | ||
77,107,403 | ||||
Hong Kong — 2.9% | ||||
CK Hutchison Holdings Ltd. | 276,500 | 3,209,510 | ||
Hang Seng Bank Ltd. | 439,700 | 7,802,932 | ||
HKT Trust & HKT Ltd. | 1,188,000 | 1,721,440 | ||
Link REIT | 1,160,000 | 7,128,012 | ||
Sands China Ltd. | 302,000 | 1,158,138 | ||
Television Broadcasts Ltd. | 157,900 | 536,442 | ||
VTech Holdings Ltd. | 95,900 | 1,050,232 | ||
WH Group Ltd. | 1,300,500 | 1,000,803 | ||
23,607,509 | ||||
Israel — 1.5% | ||||
Bank Hapoalim BM | 1,183,199 | 6,111,470 | ||
Bezeq The Israeli Telecommunication Corp. Ltd. | 507,941 | 982,210 | ||
Teva Pharmaceutical Industries Ltd. | 93,986 | 4,881,407 | ||
11,975,087 | ||||
Italy — 3.6% | ||||
A2A SpA | 989,326 | 1,410,091 | ||
Enel SpA | 2,459,608 | 11,149,249 | ||
Eni SpA | 619,293 | 9,460,746 | ||
Fiat Chrysler Automobiles NV | 235,247 | 1,679,111 | ||
Prysmian SpA | 234,635 | 5,740,857 | ||
29,440,054 | ||||
Japan — 22.8% | ||||
Bridgestone Corp. | 197,300 | 6,816,903 | ||
Calsonic Kansei Corp. | 140,000 | 1,092,338 | ||
Canon, Inc. | 382,000 | 11,080,363 | ||
Central Japan Railway Co. | 41,700 | 7,392,161 | ||
Chiyoda Corp. | 297,000 | 2,126,889 | ||
Daiichi Sankyo Co. Ltd. | 76,400 | 1,777,619 | ||
Daikyo, Inc. | 369,000 | 566,488 | ||
Daiwa House Industry Co. Ltd. | 69,600 | 2,021,973 | ||
Daiwa Securities Group, Inc. | 602,000 | 3,513,003 | ||
Fuji Heavy Industries Ltd. | 173,700 | 6,509,730 | ||
Hino Motors Ltd. | 93,000 | 954,061 | ||
Hitachi Construction Machinery Co. Ltd. | 159,300 | 2,462,831 | ||
Honda Motor Co., Ltd. | 335,900 | 9,558,142 |
5
Shares | Value | |||
Hoya Corp. | 87,300 | $ | 3,080,156 | |
Iida Group Holdings Co. Ltd. | 226,700 | 4,753,668 | ||
ITOCHU Corp. | 397,300 | 4,992,486 | ||
Japan Airlines Co. Ltd. | 217,600 | 7,469,161 | ||
JX Holdings, Inc. | 1,222,700 | 4,781,046 | ||
KDDI Corp. | 145,700 | 4,259,095 | ||
Komatsu Ltd. | 356,300 | 6,153,644 | ||
Lawson, Inc. | 13,600 | 1,077,094 | ||
Mitsubishi Chemical Holdings Corp. | 1,173,700 | 5,982,176 | ||
Mitsubishi UFJ Financial Group, Inc. | 97,100 | 485,610 | ||
Mitsui Chemicals, Inc. | 667,000 | 2,511,753 | ||
Mixi, Inc. | 164,300 | 6,350,332 | ||
MS&AD Insurance Group Holdings, Inc. | 208,400 | 5,950,791 | ||
Nippon Telegraph & Telephone Corp. | 286,400 | 12,556,753 | ||
NTT Data Corp. | 54,000 | 2,789,362 | ||
NTT DOCOMO, Inc. | 191,700 | 4,810,894 | ||
OKUMA Corp. | 530,000 | 4,068,271 | ||
ORIX Corp. | 722,800 | 10,052,034 | ||
Panasonic Corp. | 305,300 | 2,843,879 | ||
Seiko Epson Corp. | 78,900 | 1,422,174 | ||
Seven Bank Ltd. | 1,986,900 | 7,320,677 | ||
Sumitomo Chemical Co. Ltd. | 896,000 | 4,110,426 | ||
Sumitomo Mitsui Financial Group, Inc. | 277,300 | 9,057,607 | ||
Teijin Ltd. | 226,000 | 795,954 | ||
Tokyo Electric Power Co. Holdings, Inc.(1) | 1,195,400 | 5,624,269 | ||
Toyota Boshoku Corp. | 97,300 | 1,945,385 | ||
Toyota Motor Corp. | 96,700 | 5,050,039 | ||
186,167,237 | ||||
Netherlands — 2.6% | ||||
ING Groep NV CVA | 1,089,801 | 13,574,692 | ||
Koninklijke Ahold NV | 300,344 | 6,653,481 | ||
NN Group NV | 17,561 | 586,470 | ||
20,814,643 | ||||
Norway — 1.3% | ||||
Norsk Hydro ASA | 268,429 | 1,070,109 | ||
Subsea 7 SA(1) | 734,009 | 6,519,182 | ||
TGS Nopec Geophysical Co. ASA | 187,440 | 2,820,921 | ||
10,410,212 | ||||
Portugal — 0.3% | ||||
EDP - Energias de Portugal SA | 766,923 | 2,555,685 | ||
Singapore — 0.1% | ||||
United Overseas Bank Ltd. | 65,500 | 866,611 | ||
Spain — 2.6% | ||||
ACS Actividades de Construccion y Servicios SA | 57,361 | 1,892,344 | ||
Banco Bilbao Vizcaya Argentaria SA | 169,997 | 1,127,507 | ||
Banco Santander SA | 1,081,067 | 5,161,427 | ||
Endesa SA | 305,470 | 6,281,006 | ||
Inmobiliaria Colonial SA(1) | 1,114,832 | 879,456 | ||
Repsol SA | 75,000 | 965,920 | ||
Telefonica SA | 468,763 | 4,898,057 | ||
21,205,717 |
6
Shares | Value | |||
Sweden — 1.5% | ||||
Axfood AB | 44,826 | $ | 825,439 | |
Fastighets AB Balder, B Shares(1) | 35,279 | 911,861 | ||
Intrum Justitia AB | 52,300 | 1,830,204 | ||
Peab AB | 322,680 | 2,661,486 | ||
Skanska AB, B Shares | 287,076 | 6,305,013 | ||
12,534,003 | ||||
Switzerland — 4.4% | ||||
Adecco Group AG | 13,121 | 795,312 | ||
Lonza Group AG | 10,863 | 1,875,343 | ||
Nestle SA | 52,633 | 3,886,582 | ||
Novartis AG | 2,087 | 165,658 | ||
Roche Holding AG | 34,536 | 9,064,831 | ||
Swiss Reinsurance Co. | 125,646 | 11,287,915 | ||
Transocean Ltd.(1) | 50,511 | 506,635 | ||
Zurich Insurance Group AG | 34,145 | 8,261,441 | ||
35,843,717 | ||||
United Kingdom — 21.6% | ||||
AstraZeneca plc | 196,885 | 11,486,177 | ||
Berkeley Group Holdings plc | 85,019 | 4,032,745 | ||
BHP Billiton plc | 449,904 | 5,362,819 | ||
BP plc | 1,518,104 | 7,855,018 | ||
British Land Co. plc (The) | 233,623 | 2,503,922 | ||
BT Group plc | 150,995 | 968,375 | ||
Centrica plc | 3,503,339 | 10,340,934 | ||
Debenhams plc | 541,031 | 579,474 | ||
Direct Line Insurance Group plc | 438,826 | 2,385,307 | ||
Evraz plc(1) | 253,149 | 406,980 | ||
GKN plc | 219,759 | 874,973 | ||
GlaxoSmithKline plc | 320,650 | 6,710,773 | ||
Glencore plc | 1,995,212 | 3,788,482 | ||
Go-Ahead Group plc | 69,642 | 2,587,212 | ||
HSBC Holdings plc | 2,424,044 | 15,625,097 | ||
Investec plc | 865,573 | 5,877,122 | ||
Land Securities Group plc | 217,441 | 3,672,091 | ||
Legal & General Group plc | 2,739,680 | 9,499,427 | ||
Lloyds Banking Group plc | 7,076,008 | 7,380,994 | ||
Man Group plc | 3,319,182 | 6,340,876 | ||
Marks & Spencer Group plc | 519,403 | 2,856,396 | ||
Petrofac Ltd. | 327,576 | 3,691,179 | ||
Rio Tinto plc | 432,068 | 12,155,884 | ||
Royal Dutch Shell plc, B Shares | 1,138,382 | 27,377,912 | ||
Royal Mail plc | 802,161 | 6,285,390 | ||
Segro plc | 623,650 | 3,955,390 | ||
Sky plc | 464,460 | 6,481,469 | ||
Thomas Cook Group plc(1) | 456,545 | 505,185 | ||
Vodafone Group plc | 1,399,558 | 4,679,444 | ||
176,267,047 | ||||
TOTAL COMMON STOCKS (Cost $841,142,421) | 797,889,487 |
7
Shares | Value | |||
EXCHANGE-TRADED FUNDS — 0.5% | ||||
iShares MSCI Japan ETF (Cost $3,915,485) | 328,587 | $ | 3,870,755 | |
TEMPORARY CASH INVESTMENTS — 0.7% | ||||
Repurchase Agreement, Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 3.75%, 11/15/43, valued at $4,273,100), at 0.10%, dated 5/31/16, due 6/1/16 (Delivery value $4,184,012) | 4,184,000 | |||
State Street Institutional Liquid Reserves Fund, Premier Class | 1,914,482 | 1,914,482 | ||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $6,098,482) | 6,098,482 | |||
TOTAL INVESTMENT SECURITIES — 99.1% (Cost $851,156,388) | 807,858,724 | |||
OTHER ASSETS AND LIABILITIES — 0.9% | 7,033,870 | |||
TOTAL NET ASSETS — 100.0% | $ | 814,892,594 |
MARKET SECTOR DIVERSIFICATION | ||
(as a % of net assets) | ||
Financials | 33.4 | % |
Industrials | 12.2 | % |
Consumer Discretionary | 10.1 | % |
Energy | 9.7 | % |
Telecommunication Services | 6.9 | % |
Utilities | 6.9 | % |
Health Care | 6.4 | % |
Materials | 5.9 | % |
Information Technology | 3.5 | % |
Consumer Staples | 2.9 | % |
Exchange-Traded Funds | 0.5 | % |
Cash and Equivalents* | 1.6 | % |
*Includes temporary cash investments and other assets and liabilities.
NOTES TO SCHEDULE OF INVESTMENTS | ||
CVA | - | Certificaten Van Aandelen |
(1) | Non-income producing. |
See Notes to Financial Statements.
8
Statement of Assets and Liabilities |
MAY 31, 2016 (UNAUDITED) | |||
Assets | |||
Investment securities, at value (cost of $851,156,388) | $ | 807,858,724 | |
Foreign currency holdings, at value (cost of $1,175,550) | 1,170,761 | ||
Receivable for capital shares sold | 26,320 | ||
Dividends and interest receivable | 6,610,333 | ||
815,666,138 | |||
Liabilities | |||
Payable for capital shares redeemed | 26 | ||
Accrued management fees | 773,518 | ||
773,544 | |||
Net Assets | $ | 814,892,594 | |
Net Assets Consist of: | |||
Capital (par value and paid-in surplus) | $ | 917,158,513 | |
Undistributed net investment income | 13,315,212 | ||
Accumulated net realized loss | (72,300,815 | ) | |
Net unrealized depreciation | (43,280,316 | ) | |
$ | 814,892,594 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | ||||
Investor Class, $0.01 Par Value | $192,755,034 | 22,286,318 | $8.65 | |||
Institutional Class, $0.01 Par Value | $578,477,692 | 66,825,089 | $8.66 | |||
R6 Class, $0.01 Par Value | $43,659,868 | 5,040,171 | $8.66 |
See Notes to Financial Statements.
9
Statement of Operations |
FOR THE SIX MONTHS ENDED MAY 31, 2016 (UNAUDITED) | |||
Investment Income (Loss) | |||
Income: | |||
Dividends (net of foreign taxes withheld of $1,599,042) | $ | 18,073,332 | |
Interest | 5,784 | ||
18,079,116 | |||
Expenses: | |||
Management fees | 4,346,188 | ||
Directors' fees and expenses | 12,812 | ||
Other expenses | 3,407 | ||
4,362,407 | |||
Net investment income (loss) | 13,716,709 | ||
Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investment transactions | (38,531,388 | ) | |
Foreign currency transactions | 60,133 | ||
(38,471,255 | ) | ||
Change in net unrealized appreciation (depreciation) on: | |||
Investments | (845,168 | ) | |
Translation of assets and liabilities in foreign currencies | 83,291 | ||
(761,877 | ) | ||
Net realized and unrealized gain (loss) | (39,233,132 | ) | |
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | (25,516,423 | ) |
See Notes to Financial Statements.
10
Statement of Changes in Net Assets |
SIX MONTHS ENDED MAY 31, 2016 (UNAUDITED) AND PERIOD ENDED NOVEMBER 30, 2015 | ||||||
Increase (Decrease) in Net Assets | May 31, 2016 | November 30, 2015(1) | ||||
Operations | ||||||
Net investment income (loss) | $ | 13,716,709 | $ | 16,712,379 | ||
Net realized gain (loss) | (38,471,255 | ) | (33,907,997 | ) | ||
Change in net unrealized appreciation (depreciation) | (761,877 | ) | (42,518,439 | ) | ||
Net increase (decrease) in net assets resulting from operations | (25,516,423 | ) | (59,714,057 | ) | ||
Distributions to Shareholders | ||||||
From net investment income: | ||||||
Investor Class | (3,816,917 | ) | — | |||
Institutional Class | (12,359,341 | ) | — | |||
R6 Class | (859,181 | ) | — | |||
Decrease in net assets from distributions | (17,035,439 | ) | — | |||
Capital Share Transactions | ||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | 85,587,543 | 831,570,970 | ||||
Net increase (decrease) in net assets | 43,035,681 | 771,856,913 | ||||
Net Assets | ||||||
Beginning of period | 771,856,913 | — | ||||
End of period | $ | 814,892,594 | $ | 771,856,913 | ||
Undistributed net investment income | $ | 13,315,212 | $ | 16,633,942 |
(1) | March 19, 2015 (fund inception) through November 30, 2015. |
See Notes to Financial Statements.
11
Notes to Financial Statements |
MAY 31, 2016 (UNAUDITED)
1. Organization
American Century World Mutual 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 International Value 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 for the tobacco industry.
The fund offers the Investor Class, the Institutional Class and the R6 Class, which have different fees and expenses. The difference in the fee structures between the classes is the result of their separate arrangements for shareholder and distribution services, which may be provided indirectly through another American Century Investment mutual fund. As a result, the investment advisor is able to charge the Institutional Class and R6 Class lower unified management fees. All classes of the fund commenced sale on March 19, 2015, the fund’s inception date.
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
12
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 and net realized gains, if any, are generally declared and paid annually. The fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code, in all events in a manner consistent with provisions of the 1940 Act.
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
13
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. and American Century Strategic Asset Allocations, 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) 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 rate of the fee is determined by applying a fee rate calculation formula. This formula takes into account the fund’s assets as well as certain assets, if any, of other clients of the investment advisor outside the American Century Investments family of funds (such as subadvised funds and separate accounts) that have very similar investment teams and investment strategies (strategy assets). The strategy assets of the fund also include the assets of International Value Fund, one fund in a series issued by the corporation. The annual management fee schedule ranges from 1.100% to 1.300% for the Investor Class, 0.900% to 1.100% for the Institutional Class and 0.750% to 0.950% for the R6 Class. The effective annual management fee for each class for the six months ended May 31, 2016 was 1.30% for the Investor Class, 1.10% for the Institutional Class and 0.95% for the R6 Class.
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 significant interfund transactions during the period.
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the six months ended May 31, 2016 were $342,746,186 and $254,824,582, respectively.
14
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended May 31, 2016 | Period ended November 30, 2015(1) | |||||||||
Shares | Amount | Shares | Amount | |||||||
Investor Class/Shares Authorized | 200,000,000 | 200,000,000 | ||||||||
Sold | 2,299,842 | $ | 18,963,466 | 22,561,269 | $ | 225,871,525 | ||||
Issued in reinvestment of distributions | 434,234 | 3,816,917 | — | — | ||||||
Redeemed | (1,473,823 | ) | (13,762,464 | ) | (1,535,204 | ) | (14,572,591 | ) | ||
1,260,253 | 9,017,919 | 21,026,065 | 211,298,934 | |||||||
Institutional Class/Shares Authorized | 450,000,000 | 420,000,000 | ||||||||
Sold | 9,746,073 | 79,732,013 | 62,418,999 | 619,721,716 | ||||||
Issued in reinvestment of distributions | 1,406,068 | 12,359,341 | — | — | ||||||
Redeemed | (3,187,632 | ) | (27,704,920 | ) | (3,558,419 | ) | (35,213,173 | ) | ||
7,964,509 | 64,386,434 | 58,860,580 | 584,508,543 | |||||||
R6 Class/Shares Authorized | 40,000,000 | 40,000,000 | ||||||||
Sold | 1,582,683 | 13,349,896 | 4,132,581 | 40,891,450 | ||||||
Issued in reinvestment of distributions | 97,745 | 859,181 | — | — | ||||||
Redeemed | (237,590 | ) | (2,025,887 | ) | (535,248 | ) | (5,127,957 | ) | ||
1,442,838 | 12,183,190 | 3,597,333 | 35,763,493 | |||||||
Net increase (decrease) | 10,667,600 | $ | 85,587,543 | 83,483,978 | $ | 831,570,970 |
(1) | March 19, 2015 (fund inception) through November 30, 2015. |
6. Fair Value Measurements
The fund’s investments valuation process is based on several considerations and may use multiple inputs to determine the fair value of the investments held by the fund. In conformity with accounting principles generally accepted in the United States of America, the inputs used to determine a valuation are classified into three broad levels.
• | Level 1 valuation inputs consist of unadjusted quoted prices in an active market for identical investments. |
• | Level 2 valuation inputs consist of direct or indirect observable market data (including quoted prices for comparable investments, evaluations of subsequent market events, interest rates, prepayment speeds, credit risk, etc.). These inputs also consist of quoted prices for identical investments initially expressed in local currencies that are adjusted through translation into U.S. dollars. |
• | Level 3 valuation inputs consist of unobservable data (including a fund’s own assumptions). |
The level classification is based on the lowest level input that is significant to the fair valuation measurement. The valuation inputs are not necessarily an indication of the risks associated with investing in these securities or other financial instruments. There were no significant transfers between levels during the period.
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 | — | $ | 797,889,487 | — | ||||
Exchange-Traded Funds | $ | 3,870,755 | — | — | ||||
Temporary Cash Investments | 1,914,482 | 4,184,000 | — | |||||
$ | 5,785,237 | $ | 802,073,487 | — |
15
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 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.
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 May 31, 2016, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $ | 854,991,720 | |
Gross tax appreciation of investments | $ | 26,531,448 | |
Gross tax depreciation of investments | (73,664,444 | ) | |
Net tax appreciation (depreciation) of investments | $ | (47,132,996 | ) |
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 November 30, 2015, the fund had accumulated short-term capital losses of $(33,133,202), 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.
16
Financial Highlights |
For a Share Outstanding Throughout the Periods Indicated | |||||||||||||
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 | |||||||||||||
2016(3) | $9.24 | 0.15 | (0.54) | (0.39) | (0.20) | $8.65 | (4.31)% | 1.30%(4) | 3.45%(4) | 34% | $192,755 | ||
2015(5) | $10.00 | 0.20 | (0.96) | (0.76) | — | $9.24 | (7.60)% | 1.30%(4) | 2.95%(4) | 55% | $194,181 | ||
Institutional Class | |||||||||||||
2016(3) | $9.25 | 0.15 | (0.53) | (0.38) | (0.21) | $8.66 | (4.15)% | 1.10%(4) | 3.65%(4) | 34% | $578,478 | ||
2015(5) | $10.00 | 0.21 | (0.96) | (0.75) | — | $9.25 | (7.50)% | 1.10%(4) | 3.15%(4) | 55% | $544,369 | ||
R6 Class | |||||||||||||
2016(3) | $9.26 | 0.16 | (0.54) | (0.38) | (0.22) | $8.66 | (4.14)% | 0.95%(4) | 3.80%(4) | 34% | $43,660 | ||
2015(5) | $10.00 | 0.22 | (0.96) | (0.74) | — | $9.26 | (7.40)% | 0.95%(4) | 3.30%(4) | 55% | $33,307 |
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 May 31, 2016 (unaudited). |
(4) | Annualized. |
(5) | March 19, 2015 (fund inception) through November 30, 2015. |
See Notes to Financial Statements.
Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain IRAs 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.
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.
Distributions you receive from 403(b), 457 and qualified plans are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
A description of the policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund is available without charge, upon request, by calling 1-800-345-2021. It is also available on the "About Us" page of American Century Investments’ website at americancentury.com and on the Securities and Exchange Commission’s website at sec.gov. Information regarding how the investment advisor voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the "About Us" page at americancentury.com. It is also available at sec.gov.
Quarterly Portfolio Disclosure
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-Q. The fund’s Forms N-Q are available on the SEC’s website at sec.gov, and may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The fund also makes its complete schedule of portfolio holdings for the most recent quarter of its fiscal year available on its
website at americancentury.com and, upon request, by calling 1-800-345-2021.
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 World Mutual 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. | ||
©2016 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-89419 1607 |
ITEM 2. CODE OF ETHICS.
Not applicable for semiannual report filings.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable for semiannual report filings.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable for semiannual report filings.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. INVESTMENTS.
(a) | The schedule of investments is included as part of the report to stockholders filed under Item 1 of this Form. |
(b) | Not applicable. |
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
During the reporting period, there were no material changes to the procedures by which shareholders may recommend nominees to the registrant’s board.
ITEM 11. CONTROLS AND PROCEDURES.
(a) | The registrant's principal executive officer and principal financial officer have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) are effective based on their evaluation of these controls and procedures as of a date within 90 days of the filing date of this report. |
(b) | There were no changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the registrant's second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant's internal control over financial reporting. |
ITEM 12. EXHIBITS.
(a)(1) | Not applicable for semiannual report filings. |
(a)(2) | Separate certifications by the registrant’s principal executive officer and principal financial officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 and Rule 30a-2(a) under the Investment Company Act of 1940, are filed and attached hereto as EX-99.CERT. |
(a)(3) | Not applicable. |
(b) | A certification by the registrant’s chief executive officer and chief financial officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, is furnished and attached hereto as EX- 99.906CERT. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Registrant: | American Century World Mutual Funds, Inc. | |||
By: | /s/ Jonathan S. Thomas | |||
Name: | Jonathan S. Thomas | |||
Title: | President | |||
Date: | July 28, 2016 |
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: | July 28, 2016 |
By: | /s/ C. Jean Wade | ||
Name: | C. Jean Wade | ||
Title: | Vice President, Treasurer, and | ||
Chief Financial Officer | |||
(principal financial officer) | |||
Date: | July 28, 2016 |