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: | 11-30-2020 |
ITEM 1. REPORTS TO STOCKHOLDERS.
(a)
![image171.jpg](https://capedge.com/proxy/N-CSR/0000872825-21-000006/image171.jpg)
Annual Report | |||||
November 30, 2020 | |||||
Emerging Markets Fund | |||||
Investor Class (TWMIX) | |||||
I Class (AMKIX) | |||||
Y Class (AEYMX) | |||||
A Class (AEMMX) | |||||
C Class (ACECX) | |||||
R Class (AEMRX) | |||||
R5 Class (AEGMX) | |||||
R6 Class (AEDMX) |
Table of Contents |
President’s Letter | |||||
Performance | |||||
Portfolio Commentary | |||||
Fund Characteristics | |||||
Shareholder Fee Example | |||||
Schedule of Investments | |||||
Statement of Assets and Liabilities | |||||
Statement of Operations | |||||
Statement of Changes in Net Assets | |||||
Notes to Financial Statements | |||||
Financial Highlights | |||||
Report of Independent Registered Public Accounting Firm | |||||
Management | |||||
Approval of Management Agreement | |||||
Additional Information |
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 |
![image141.jpg](https://capedge.com/proxy/N-CSR/0000872825-21-000006/image141.jpg)
Dear Investor:
Thank you for reviewing this annual report for the period ended November 30, 2020. Annual reports help convey important information about fund returns, including market factors that affected performance. For additional investment insights, please visit americancentury.com.
Stocks Recovered from Pandemic-Fueled Sell-Off
In late 2019, broad market sentiment was generally upbeat. Dovish central banks in developed markets, modest inflation, improving economic and corporate earnings data, and progress on U.S.-China trade policy helped boost global growth outlooks. Against this backdrop, riskier assets generally remained in favor.
However, beginning in late February, the COVID-19 outbreak rapidly spread worldwide, halting most economic activity and triggering a deep global recession. Global stocks sold off sharply amid a widespread flight to safety. Quick and aggressive action from the Federal Reserve and other central banks and federal governments helped stabilize and restore confidence in the financial markets. By summer, declining coronavirus infection and death rates in many regions and the reopening of economies were positive influences. By the end of November, most data suggested economies were recovering. But at the same time, COVID-19 infection rates were rising in the U.S. and Europe, prompting new lockdown measures that threatened the economic recovery.
Overall, global stocks overcame the effects of the early 2020 sell-off to deliver solid gains for the 12-month period. Emerging markets stocks rallied and outperformed developed markets stocks, while growth stocks significantly outpaced value stocks worldwide.
Science Helps Steer the Return to Normal
The return to pre-pandemic life will take time and patience, but we are confident we will get there. The first COVID-19 vaccine is now approved and in limited distribution, and medical professionals continue to develop better treatment protocols. Until the vaccine is widely available, investors likely will face periods of outbreak-related disruptions, economic uncertainty and heightened market volatility. These influences can be unsettling, but they tend to be temporary.
We appreciate your confidence in us during these extraordinary times. Our firm has a long history of helping clients weather unpredictable markets, and we’re confident we will continue to meet today’s challenges.
Sincerely,
![image231.jpg](https://capedge.com/proxy/N-CSR/0000872825-21-000006/image231.jpg)
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
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Performance |
Total Returns as of November 30, 2020 | ||||||||||||||||||||
Average Annual Returns | ||||||||||||||||||||
Ticker Symbol | 1 year | 5 years | 10 years | Since Inception | Inception Date | |||||||||||||||
Investor Class | TWMIX | 22.79% | 11.61% | 5.27% | — | 9/30/97 | ||||||||||||||
MSCI Emerging Markets Index | — | 18.43% | 10.71% | 3.60% | — | — | ||||||||||||||
I Class | AMKIX | 22.94% | 11.83% | 5.48% | — | 1/28/99 | ||||||||||||||
Y Class | AEYMX | 23.09% | — | — | 11.42% | 4/10/17 | ||||||||||||||
A Class | AEMMX | 5/12/99 | ||||||||||||||||||
No sales charge | 22.50% | 11.32% | 5.02% | — | ||||||||||||||||
With sales charge | 15.47% | 10.00% | 4.40% | — | ||||||||||||||||
C Class | ACECX | 21.48% | 10.49% | 4.23% | — | 12/18/01 | ||||||||||||||
R Class | AEMRX | 22.11% | 11.05% | 4.74% | — | 9/28/07 | ||||||||||||||
R5 Class | AEGMX | 22.92% | — | — | 11.26% | 4/10/17 | ||||||||||||||
R6 Class | AEDMX | 23.13% | 11.98% | — | 7.91% | 7/26/13 |
Average annual returns since inception are presented when ten years of performance history is not available.
Fund returns would have been lower if a portion of the fees had not been waived.
Sales charges include initial sales charges and contingent deferred sales charges (CDSCs), as applicable. A Class shares have a 5.75% maximum initial sales charge and may be subject to a maximum CDSC of 1.00%. C Class shares redeemed within 12 months of purchase are subject to a maximum CDSC of 1.00%. The SEC requires that mutual funds provide performance information net of maximum sales charges in all cases where charges could be applied.
Data presented reflect past performance. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance shown. Total returns for periods less than one year are not annualized. Investment return and principal value will fluctuate, and redemption value may be more or less than original cost. Data assumes reinvestment of dividends and capital gains, and none of the charts reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. To obtain performance data current to the most recent month end, please call 1-800-345-2021 or visit americancentury.com. For additional information about the fund, please consult the prospectus.
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Growth of $10,000 Over 10 Years | ||
$10,000 investment made November 30, 2010 | ||
Performance for other share classes will vary due to differences in fee structure. |
![chart-07be428c0f934f8eb211.jpg](https://capedge.com/proxy/N-CSR/0000872825-21-000006/chart-07be428c0f934f8eb211.jpg)
Value on November 30, 2020 | |||||
Investor Class — $16,722 | |||||
MSCI Emerging Markets Index — $14,253 | |||||
Ending value of Investor Class would have been lower if a portion of the fees had not been waived.
Total Annual Fund Operating Expenses | |||||||||||||||||||||||
Investor Class | I Class | Y Class | A Class | C Class | R Class | R5 Class | R6 Class | ||||||||||||||||
1.25% | 1.05% | 0.90% | 1.50% | 2.25% | 1.75% | 1.05% | 0.90% |
The total annual fund operating expenses shown is as stated in the fund’s prospectus current as of the date of this report. The prospectus may vary from the expense ratio shown elsewhere in this report because it is based on a different time period, includes acquired fund fees and expenses, and, if applicable, does not include fee waivers or expense reimbursements.
Data presented reflect past performance. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance shown. Total returns for periods less than one year are not annualized. Investment return and principal value will fluctuate, and redemption value may be more or less than original cost. Data assumes reinvestment of dividends and capital gains, and none of the charts reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. To obtain performance data current to the most recent month end, please call 1-800-345-2021 or visit americancentury.com. For additional information about the fund, please consult the prospectus.
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Portfolio Commentary |
Portfolio Managers: Patricia Ribeiro and Sherwin Soo
Performance Summary
Emerging Markets returned 22.79%* for the 12 months ended November 30, 2020. The fund’s benchmark, the MSCI Emerging Markets Index, returned 18.43% for the same period.
The fund outperformed its benchmark during the period, driven primarily by a combination of an overweight, relative to the benchmark, for most of the year in information technology and positive stock selection in the sector. Stock selection in communication services also added value, along with an underweight to energy. Conversely, stock selection in consumer discretionary had a significant negative relative impact. Regionally, stock selection in China and Malaysia were key drivers of relative outperformance, while stock choices in South Korea weighed on returns.
Information Technology Holdings Contributed
Holdings in the information technology sector were the primary drivers of the fund’s outperformance over the 12-month period. Notable contributors included overweight positions in China-based solar glass manufacturer Xinyi Solar Holdings, China-based data center operator GDS Holdings and Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s largest chipmaker.
Xinyi Solar’s stock price appreciated as the company continued to benefit from rapidly rising prices as supply did not meet a dramatic rise in demand, driving sales volumes higher amid lower costs for raw materials and production. China’s decarbonization efforts to address climate change underpinned Xinyi Solar’s growth. GDS continued to benefit from ongoing digitization efforts by industries in China, supporting strong demand for data centers. The company’s successful capital raise to pursue projects and capacity expansion also bolstered the stock. Shares of TSMC rallied sharply with the expansion of its addressable market. We believe high-performance computing, artificial intelligence and demand for 5G-related technology will likely continue to be key growth drivers for TSMC.
In the communication services sector, another substantial relative contributor, China-based social media and gaming giant Tencent Holdings and Russia-based search engine and online services provider Yandex drove the fund’s outperformance. Tencent’s shares continued to rally amid strong revenue growth and expectations for robust earnings and increased monetization of Tencent’s user base. Reduced social activity bolstered Tencent’s online gaming franchise. We remain constructive on Tencent’s rich game pipeline and multiple revenue streams, including cloud, financial technology and advertisements, amid an ongoing recovery in advertising. Yandex continued to gain market share across multiple businesses, including advertising, ride-sharing, e-commerce and food delivery.
Notable individual contributors included Top Glove, the Malaysia-based rubber glovemaker, and Country Garden Services Holdings, the China-based property service provider. Top Glove’s shares advanced as a surge in demand from COVID-19 drove a severe demand/supply mismatch that supported aggressive price increases. As the pandemic lingers, prices are expected to keep rising as customers continue to scramble for gloves amid the shortage. Country Garden beat earnings estimates, driven by revenue growth in value-added services and improved margins. The company continued to gain market share and enhance efficiencies through cost savings measures.
Consumer Discretionary Sector Detracted
Within consumer discretionary, lack of exposure to several China-based benchmark constituents that performed well during the period weighed on the fund’s relative return. These included food delivery, group buying and consumer review platform Meituan (formerly Meituan Dianping) and
*All fund returns referenced in this commentary are for Investor Class shares. Performance for other share classes will vary due to differences in fee structure; when Investor Class performance exceeds that of the fund’s benchmark, other share classes may not. See page 3 for returns for all share classes.
5
automobile manufacturer NIO. Brazil-based residential real estate firm Cyrela Brazil Realty, a holding classified as a household durables stock, also weighed on returns. Shares declined amid expectations for a prolonged disruption from COVID-19 restrictions, and we exited our position during the first half of 2020.
Health care also weighed on relative results, driven by an underweight to the sector and a position in NMC Health, a U.K.-listed diversified health care and medical services provider in the Middle East, which we exited in May 2020. NMC's shares were impacted by concerns surrounding the company’s financial health, and we exited the position given the lack of visibility.
Outlook
While each of the emerging markets (EM) has responded differently to COVID-19 and may face different challenges, we continue to believe the long-term case for EM stocks remains strong. We believe EM economies will likely benefit from the recovery in global demand and that the extension of highly accommodative monetary policies in prominent global markets will likely continue to push capital flows into EM.
The change in the U.S. administration is likely to reduce uncertainty and lower volatility, given the potential reduction in geopolitical risk that has, at times, weighed on EM equities. In our view, as COVID-19 vaccines roll out, the U.S. is likely to de-escalate tensions with China, which could help improve commodity prices and weaken the U.S. dollar, all positives for EM equities in 2021.
The acceleration of existing trends, aided by the pandemic, continues to drive growth in areas related to information technology. E-commerce and logistics are benefiting amid increasing adoption of online purchasing, including within previously underutilized areas such as groceries. Also, 5G network rollout and the smartphone replacement cycle support growth. We believe COVID-19 may permanently alter consumer behavior, further accelerating these trends.
The information technology (IT) sector remains a prominent overweight for the fund. We are positioned in a variety of businesses, including producers of electric vehicle batteries and solar glass. The consumer discretionary sector also remains an important overweight, particularly education holdings such as China-based TAL Education Group and New Oriental Education & Technology Group.
China continues to be a prominent position in the portfolio. Holdings include positions in IT and the online economy (media, entertainment and e-commerce). We also own names in distance learning and structural growth areas such as the 5G build-out. In our view, IT and communication services will likely continue to benefit from the COVID-19-related structural changes occurring across sectors.
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Fund Characteristics |
NOVEMBER 30, 2020 | |||||
Top Ten Holdings | % of net assets | ||||
Taiwan Semiconductor Manufacturing Co. Ltd. | 8.7% | ||||
Tencent Holdings Ltd. | 7.4% | ||||
Alibaba Group Holding Ltd. ADR | 7.0% | ||||
Samsung Electronics Co. Ltd. | 5.3% | ||||
Naspers Ltd., N Shares | 2.7% | ||||
HDFC Bank Ltd. | 2.4% | ||||
Chailease Holding Co. Ltd. | 1.8% | ||||
Xinyi Solar Holdings Ltd. | 1.7% | ||||
Vale SA ADR | 1.7% | ||||
Yandex NV, A Shares | 1.7% | ||||
Types of Investments in Portfolio | % of net assets | ||||
Common Stocks | 98.6% | ||||
Temporary Cash Investments | 1.4% | ||||
Other Assets and Liabilities | —* | ||||
*Category is less than 0.05% of total net assets. | |||||
Investments by Country | % of net assets | ||||
China | 38.5% | ||||
South Korea | 15.4% | ||||
Taiwan | 13.7% | ||||
Brazil | 7.8% | ||||
India | 7.6% | ||||
South Africa | 4.0% | ||||
Russia | 3.2% | ||||
Mexico | 2.0% | ||||
Other Countries | 6.4% | ||||
Cash and Equivalents* | 1.4% | ||||
*Includes temporary cash investments and other assets and liabilities. |
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Shareholder Fee Example |
Fund shareholders may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption/exchange fees; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in your fund and to compare these costs with the ongoing cost of investing in other mutual funds.
The example is based on an investment of $1,000 made at the beginning of the period and held for the entire period from June 1, 2020 to November 30, 2020.
Actual Expenses
The table provides information about actual account values and actual expenses for each class. You may use the information, together with the amount you invested, to estimate the expenses that you paid over the period. First, identify the share class you own. Then simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
If you hold Investor Class shares of any American Century Investments fund, or I Class shares of the American Century Diversified Bond Fund, in an American Century Investments account (i.e., not through a financial intermediary or employer-sponsored retirement plan account), American Century Investments may charge you a $25.00 annual 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 $25.00 fee. In determining your total eligible investment amount, we will include your investments in all personal accounts (including American Century Investments brokerage accounts) registered under your Social Security number. Personal accounts include individual accounts, joint accounts, UGMA/UTMA accounts, personal trusts, Coverdell Education Savings Accounts and IRAs (including traditional, Roth, Rollover, SEP-, SARSEP- and SIMPLE-IRAs), and certain other retirement accounts. If you have only business, business retirement, employer-sponsored or American Century Investments brokerage accounts, you are currently not subject to this fee. If you are subject to the account maintenance fee, your account value could be reduced by the fee amount.
Hypothetical Example for Comparison Purposes
The table also provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio of each class of your fund and an assumed rate of return of 5% per year before expenses, which is not the actual return of a fund’s share class. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) or redemption/exchange fees. Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
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Beginning Account Value 6/1/20 | Ending Account Value 11/30/20 | Expenses Paid During Period(1) 6/1/20 - 11/30/20 | Annualized Expense Ratio(1) | |||||||||||
Actual | ||||||||||||||
Investor Class | $1,000 | $1,340.60 | $7.31 | 1.25% | ||||||||||
I Class | $1,000 | $1,342.00 | $6.15 | 1.05% | ||||||||||
Y Class | $1,000 | $1,342.30 | $5.27 | 0.90% | ||||||||||
A Class | $1,000 | $1,338.40 | $8.77 | 1.50% | ||||||||||
C Class | $1,000 | $1,333.30 | $13.12 | 2.25% | ||||||||||
R Class | $1,000 | $1,337.10 | $10.22 | 1.75% | ||||||||||
R5 Class | $1,000 | $1,341.70 | $6.15 | 1.05% | ||||||||||
R6 Class | $1,000 | $1,342.90 | $5.27 | 0.90% | ||||||||||
Hypothetical | ||||||||||||||
Investor Class | $1,000 | $1,018.75 | $6.31 | 1.25% | ||||||||||
I Class | $1,000 | $1,019.75 | $5.30 | 1.05% | ||||||||||
Y Class | $1,000 | $1,020.50 | $4.55 | 0.90% | ||||||||||
A Class | $1,000 | $1,017.50 | $7.57 | 1.50% | ||||||||||
C Class | $1,000 | $1,013.75 | $11.33 | 2.25% | ||||||||||
R Class | $1,000 | $1,016.25 | $8.82 | 1.75% | ||||||||||
R5 Class | $1,000 | $1,019.75 | $5.30 | 1.05% | ||||||||||
R6 Class | $1,000 | $1,020.50 | $4.55 | 0.90% |
(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. Annualized expense ratio reflects actual expenses, including any applicable fee waivers or expense reimbursements and excluding any acquired fund fees and expenses.
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Schedule of Investments |
NOVEMBER 30, 2020
Shares | Value | |||||||
COMMON STOCKS — 98.6% | ||||||||
Argentina — 1.1% | ||||||||
Globant SA(1) | 165,924 | $ | 31,306,540 | |||||
Brazil — 7.8% | ||||||||
B3 SA - Brasil Bolsa Balcao | 3,403,200 | 35,655,657 | ||||||
Locaweb Servicos de Internet SA(1) | 1,535,600 | 18,909,085 | ||||||
Magazine Luiza SA | 7,783,272 | 33,966,644 | ||||||
Raia Drogasil SA | 4,959,800 | 24,125,954 | ||||||
TOTVS SA | 3,500,400 | 17,902,520 | ||||||
Vale SA, ADR | 3,342,195 | 48,662,359 | ||||||
WEG SA | 3,140,300 | 43,540,054 | ||||||
222,762,273 | ||||||||
China — 38.5% | ||||||||
A-Living Smart City Services Co., Ltd., H Shares | 4,020,500 | 16,971,976 | ||||||
Alibaba Group Holding Ltd., ADR(1) | 753,185 | 198,358,802 | ||||||
Anhui Conch Cement Co. Ltd., H Shares | 2,216,000 | 14,129,585 | ||||||
China Construction Bank Corp., H Shares | 54,801,000 | 42,152,415 | ||||||
China Education Group Holdings Ltd. | 9,550,000 | 19,062,394 | ||||||
China Gas Holdings Ltd. | 4,976,000 | 18,142,883 | ||||||
China Tourism Group Duty Free Corp. Ltd., A Shares | 1,000,917 | 29,427,416 | ||||||
CIFI Holdings Group Co. Ltd. | 39,800,888 | 34,255,599 | ||||||
CNOOC Ltd. | 27,739,000 | 27,305,793 | ||||||
Country Garden Services Holdings Co. Ltd. | 3,568,000 | 20,004,584 | ||||||
GDS Holdings Ltd., ADR(1) | 454,658 | 40,932,860 | ||||||
Geely Automobile Holdings Ltd. | 9,561,000 | 26,654,849 | ||||||
Industrial & Commercial Bank of China Ltd., H Shares | 44,372,645 | 27,639,297 | ||||||
JD.com, Inc., ADR(1) | 444,425 | 37,931,674 | ||||||
Kweichow Moutai Co. Ltd., A Shares | 106,310 | 27,621,047 | ||||||
Li Ning Co. Ltd. | 3,989,000 | 21,691,719 | ||||||
Luxshare Precision Industry Co. Ltd., A Shares | 5,157,134 | 40,668,686 | ||||||
New Oriental Education & Technology Group, Inc., ADR(1) | 156,305 | 25,766,879 | ||||||
Nine Dragons Paper Holdings Ltd. | 12,385,000 | 16,173,733 | ||||||
Ping An Insurance Group Co. of China Ltd., H Shares | 2,964,500 | 34,724,063 | ||||||
Sany Heavy Industry Co. Ltd., A Shares | 5,541,380 | 25,839,595 | ||||||
Shenzhou International Group Holdings Ltd. | 1,057,400 | 17,423,187 | ||||||
TAL Education Group, ADR(1) | 350,808 | 24,577,608 | ||||||
Tencent Holdings Ltd. | 2,905,400 | 211,486,696 | ||||||
Wuxi Biologics, Inc.(1) | 3,420,000 | 34,006,463 | ||||||
Xinyi Solar Holdings Ltd. | 27,573,818 | 49,697,628 | ||||||
Zhongji Innolight Co. Ltd., A Shares | 1,830,938 | 13,642,983 | ||||||
1,096,290,414 | ||||||||
Hungary — 1.2% | ||||||||
OTP Bank Nyrt(1) | 877,810 | 34,715,480 | ||||||
India — 7.6% | ||||||||
Asian Paints Ltd. | 876,513 | 26,069,471 | ||||||
Bajaj Finance Ltd. | 344,554 | 22,607,320 | ||||||
Bata India Ltd. | 643,473 | 13,656,613 | ||||||
HDFC Bank Ltd.(1) | 3,576,662 | 68,980,383 |
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Shares | Value | |||||||
Indraprastha Gas Ltd. | 1,844,144 | $ | 12,287,697 | |||||
Jubilant Foodworks Ltd. | 730,692 | 24,644,384 | ||||||
Nestle India Ltd. | 94,618 | 22,846,248 | ||||||
Tata Consultancy Services Ltd. | 684,706 | 24,763,621 | ||||||
215,855,737 | ||||||||
Indonesia — 1.3% | ||||||||
Bank Rakyat Indonesia Persero Tbk PT | 78,306,200 | 22,593,423 | ||||||
Telekomunikasi Indonesia Persero Tbk PT | 68,550,900 | 15,687,283 | ||||||
38,280,706 | ||||||||
Malaysia — 0.5% | ||||||||
Top Glove Corp. Bhd | 8,241,900 | 14,397,363 | ||||||
Mexico — 2.0% | ||||||||
Cemex SAB de CV, ADR | 8,697,890 | 40,010,294 | ||||||
Wal-Mart de Mexico SAB de CV | 6,544,675 | 17,227,729 | ||||||
57,238,023 | ||||||||
Philippines — 0.7% | ||||||||
Ayala Land, Inc. | 24,231,200 | 19,151,306 | ||||||
Russia — 3.2% | ||||||||
Novatek PJSC, GDR | 135,655 | 21,045,055 | ||||||
Sberbank of Russia PJSC, ADR (London) | 1,761,672 | 23,333,754 | ||||||
Yandex NV, A Shares(1) | 687,615 | 47,417,931 | ||||||
91,796,740 | ||||||||
South Africa — 4.0% | ||||||||
Capitec Bank Holdings Ltd.(1) | 267,034 | 22,299,920 | ||||||
Kumba Iron Ore Ltd. | 422,312 | 14,309,314 | ||||||
Naspers Ltd., N Shares(2) | 381,741 | 76,870,305 | ||||||
113,479,539 | ||||||||
South Korea — 15.4% | ||||||||
CJ Logistics Corp.(1) | 225,793 | 33,810,263 | ||||||
Cosmax, Inc. | 130,101 | 11,227,515 | ||||||
Hotel Shilla Co. Ltd. | 233,909 | 16,954,277 | ||||||
Hyundai Motor Co. | 229,762 | 37,841,593 | ||||||
LG Household & Health Care Ltd. | 11,239 | 15,381,676 | ||||||
Mando Corp. | 661,868 | 29,140,311 | ||||||
NAVER Corp. | 127,392 | 32,037,739 | ||||||
Orion Corp./Republic of Korea | 100,714 | 10,862,366 | ||||||
Samsung Biologics Co. Ltd.(1) | 22,476 | 16,098,830 | ||||||
Samsung Electro-Mechanics Co. Ltd. | 328,476 | 46,449,272 | ||||||
Samsung Electronics Co. Ltd. | 2,505,813 | 151,377,042 | ||||||
Samsung SDI Co. Ltd. | 75,726 | 36,600,094 | ||||||
437,780,978 | ||||||||
Taiwan — 13.7% | ||||||||
ASPEED Technology, Inc. | 324,000 | 16,059,210 | ||||||
Chailease Holding Co. Ltd. | 9,558,338 | 52,379,605 | ||||||
Giant Manufacturing Co. Ltd. | 1,372,000 | 13,613,918 | ||||||
Largan Precision Co. Ltd. | 124,000 | 13,978,478 | ||||||
Merida Industry Co. Ltd. | 1,979,000 | 17,377,689 | ||||||
President Chain Store Corp. | 1,338,000 | 12,165,707 | ||||||
Taiwan Semiconductor Manufacturing Co. Ltd. | 14,708,939 | 248,435,694 | ||||||
Win Semiconductors Corp. | 1,322,000 | 15,563,402 | ||||||
389,573,703 |
11
Shares | Value | |||||||
Thailand — 0.9% | ||||||||
CP ALL PCL(1) | 6,066,700 | $ | 12,063,269 | |||||
Muangthai Capital PCL(1) | 6,961,000 | 12,329,895 | ||||||
24,393,164 | ||||||||
Turkey — 0.7% | ||||||||
BIM Birlesik Magazalar AS | 2,106,988 | 18,831,612 | ||||||
TOTAL COMMON STOCKS (Cost $1,872,887,962) | 2,805,853,578 | |||||||
TEMPORARY CASH INVESTMENTS — 1.4% | ||||||||
Repurchase Agreement, BMO Capital Markets Corp., (collateralized by various U.S. Treasury obligations, 0.625% - 1.375%, 1/31/25 - 5/15/30, valued at $18,945,160), in a joint trading account at 0.06%, dated 11/30/20, due 12/1/20 (Delivery value $18,556,346) | 18,556,315 | |||||||
Repurchase Agreement, Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 0.625%, 4/15/23, valued at $21,282,329), at 0.07%, dated 11/30/20, due 12/1/20 (Delivery value $20,865,041) | 20,865,000 | |||||||
State Street Institutional U.S. Government Money Market Fund, Premier Class | 980 | 980 | ||||||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $39,422,295) | 39,422,295 | |||||||
TOTAL INVESTMENT SECURITIES — 100.0% (Cost $1,912,310,257) | 2,845,275,873 | |||||||
OTHER ASSETS AND LIABILITIES† | (843,049) | |||||||
TOTAL NET ASSETS — 100.0% | $ | 2,844,432,824 |
MARKET SECTOR DIVERSIFICATION | |||||
(as a % of net assets) | |||||
Information Technology | 26.9 | % | |||
Consumer Discretionary | 23.4 | % | |||
Financials | 14.1 | % | |||
Communication Services | 10.7 | % | |||
Consumer Staples | 6.1 | % | |||
Materials | 5.6 | % | |||
Industrials | 4.9 | % | |||
Health Care | 2.3 | % | |||
Real Estate | 1.9 | % | |||
Energy | 1.7 | % | |||
Utilities | 1.0 | % | |||
Cash and Equivalents* | 1.4 | % |
*Includes temporary cash investments and other assets and liabilities.
NOTES TO SCHEDULE OF INVESTMENTS | ||||||||
ADR | - | American Depositary Receipt | ||||||
GDR | - | Global Depositary Receipt |
†Category is less than 0.05% of total net assets.
(1)Non-income producing.
(2)Security, or a portion thereof, is on loan. At the period end, the aggregate value of securities on loan was $61,496,083. The amount of securities on loan indicated may not correspond with the securities on loan identified because securities with pending sales are in the process of recall from the brokers. At period end, the aggregate value of the collateral held by the fund was $66,868,298, all of which is securities collateral.
See Notes to Financial Statements.
12
Statement of Assets and Liabilities |
NOVEMBER 30, 2020 | |||||
Assets | |||||
Investment securities, at value (cost of $1,912,310,257) — including $61,496,083 of securities on loan | $ | 2,845,275,873 | |||
Foreign currency holdings, at value (cost of $123,512) | 121,538 | ||||
Receivable for capital shares sold | 4,135,399 | ||||
Dividends and interest receivable | 94,085 | ||||
Securities lending receivable | 1,993 | ||||
Other assets | 48,544 | ||||
2,849,677,432 | |||||
Liabilities | |||||
Payable for capital shares redeemed | 1,668,344 | ||||
Accrued management fees | 2,467,481 | ||||
Distribution and service fees payable | 43,247 | ||||
Accrued foreign taxes | 1,065,536 | ||||
5,244,608 | |||||
Net Assets | $ | 2,844,432,824 | |||
Net Assets Consist of: | |||||
Capital (par value and paid-in surplus) | $ | 2,286,284,963 | |||
Distributable earnings | 558,147,861 | ||||
$ | 2,844,432,824 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | |||||||||
Investor Class, $0.01 Par Value | $582,035,803 | 42,736,523 | $13.62 | ||||||||
I Class, $0.01 Par Value | $1,534,445,154 | 109,823,372 | $13.97 | ||||||||
Y Class, $0.01 Par Value | $30,169,363 | 2,154,274 | $14.00 | ||||||||
A Class, $0.01 Par Value | $88,485,440 | 6,740,149 | $13.13* | ||||||||
C Class, $0.01 Par Value | $27,100,541 | 2,281,467 | $11.88 | ||||||||
R Class, $0.01 Par Value | $7,465,977 | 566,850 | $13.17 | ||||||||
R5 Class, $0.01 Par Value | $3,862,952 | 276,274 | $13.98 | ||||||||
R6 Class, $0.01 Par Value | $570,867,594 | 40,833,321 | $13.98 |
*Maximum offering price $13.93 (net asset value divided by 0.9425).
See Notes to Financial Statements.
13
Statement of Operations |
YEAR ENDED NOVEMBER 30, 2020 | |||||
Investment Income (Loss) | |||||
Income: | |||||
Dividends (net of foreign taxes withheld of $4,675,714) | $ | 38,910,315 | |||
Securities lending, net | 132,274 | ||||
Interest | 72,837 | ||||
39,115,426 | |||||
Expenses: | |||||
Management fees | 26,555,703 | ||||
Distribution and service fees: | |||||
A Class | 194,113 | ||||
C Class | 264,412 | ||||
R Class | 33,523 | ||||
Directors' fees and expenses | 77,745 | ||||
Other expenses | 70,583 | ||||
27,196,079 | |||||
Net investment income (loss) | 11,919,347 | ||||
Realized and Unrealized Gain (Loss) | |||||
Net realized gain (loss) on: | |||||
Investment transactions (net of foreign tax expenses paid (refunded) of $(20,598)) | (74,989,683) | ||||
Foreign currency translation transactions | (687,389) | ||||
(75,677,072) | |||||
Change in net unrealized appreciation (depreciation) on: | |||||
Investments (includes (increase) decrease in accrued foreign taxes of $(1,065,536)) | 586,986,177 | ||||
Translation of assets and liabilities in foreign currencies | 49,803 | ||||
587,035,980 | |||||
Net realized and unrealized gain (loss) | 511,358,908 | ||||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 523,278,255 |
See Notes to Financial Statements.
14
Statement of Changes in Net Assets |
YEARS ENDED NOVEMBER 30, 2020 AND NOVEMBER 30, 2019 | ||||||||
Increase (Decrease) in Net Assets | November 30, 2020 | November 30, 2019 | ||||||
Operations | ||||||||
Net investment income (loss) | $ | 11,919,347 | $ | 40,847,232 | ||||
Net realized gain (loss) | (75,677,072) | (165,576,882) | ||||||
Change in net unrealized appreciation (depreciation) | 587,035,980 | 371,028,910 | ||||||
Net increase (decrease) in net assets resulting from operations | 523,278,255 | 246,299,260 | ||||||
Distributions to Shareholders | ||||||||
From earnings: | ||||||||
Investor Class | (8,013,736) | (4,369,482) | ||||||
I Class | (21,862,436) | (6,026,364) | ||||||
Y Class | (310,424) | (55,971) | ||||||
A Class | (874,154) | (149,480) | ||||||
C Class | (114,160) | — | ||||||
R Class | (57,761) | — | ||||||
R5 Class | (44,744) | (18,644) | ||||||
R6 Class | (8,006,334) | (2,430,490) | ||||||
Decrease in net assets from distributions | (39,283,749) | (13,050,431) | ||||||
Capital Share Transactions | ||||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | (110,421,098) | 825,809 | ||||||
Net increase (decrease) in net assets | 373,573,408 | 234,074,638 | ||||||
Net Assets | ||||||||
Beginning of period | 2,470,859,416 | 2,236,784,778 | ||||||
End of period | $ | 2,844,432,824 | $ | 2,470,859,416 | ||||
See Notes to Financial Statements.
15
Notes to Financial Statements |
NOVEMBER 30, 2020
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, I Class, Y Class, A Class, C Class, R Class, R5 Class and 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.
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 (NAV) 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 NAV 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.
16
The fund monitors for significant events occurring after the close of an investment’s primary exchange but before the fund’s NAV 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. 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. Securities lending income is net of fees and rebates earned by the lending agent for its services.
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.
Segregated Assets — In accordance with the 1940 Act, the fund segregates assets on its books and records to cover certain types of investment securities and other financial instruments. ACIM monitors, on a daily basis, the securities segregated to ensure the fund designates a sufficient amount of liquid assets, marked-to-market daily. The fund may also receive assets or be required to pledge assets at the custodian bank or with a broker for collateral requirements.
Income Tax Status — It is the fund’s policy to distribute substantially all net investment income and net realized gains to shareholders and to otherwise qualify as a regulated investment company under provisions of the Internal Revenue Code. Accordingly, no provision has been made for income taxes. The fund files U.S. federal, state, local and non-U.S. tax returns as applicable. The fund's tax returns are subject to examination by the relevant taxing authority until expiration of the applicable statute of limitations, which is generally three years from the date of filing but can be longer in certain jurisdictions. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination and for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
17
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 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.
Securities Lending — Securities are lent to qualified financial institutions and brokers. State Street Bank & Trust Co. serves as securities lending agent to the fund pursuant to a Securities Lending Agreement. The lending of securities exposes the fund to risks such as: the borrowers may fail to return the loaned securities, the borrowers may not be able to provide additional collateral, the fund may experience delays in recovery of the loaned securities or delays in access to collateral, or the fund may experience losses related to the investment collateral. To minimize certain risks, loan counterparties pledge collateral in the form of cash and/or securities. The lending agent has agreed to indemnify the fund in the case of default of any securities borrowed. Cash collateral received is invested in the State Street Navigator Securities Lending Government Money Market Portfolio, a money market mutual fund registered under the 1940 Act. The loans may also be secured by U.S. government securities in an amount at least equal to the market value of the securities loaned, plus accrued interest and dividends, determined on a daily basis and adjusted accordingly. By lending securities, the fund seeks to increase its net investment income through the receipt of interest and fees. Such income is reflected separately within the Statement of Operations. The value of loaned securities and related collateral outstanding at period end, if any, are shown on a gross basis within the Schedule of Investments and Statement of Assets and Liabilities.
3. Fees and Transactions with Related Parties
Certain officers and directors of the corporation are also officers and/or directors of American Century Companies, Inc. (ACC). The corporation’s investment advisor, ACIM, the corporation's distributor, American Century Investment Services, Inc. (ACIS), and the corporation’s transfer agent, American Century Services, LLC, are wholly owned, directly or indirectly, by ACC. Various funds issued by American Century Asset Allocation Portfolios, Inc. own, in aggregate, 6% 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 ACIM will pay all expenses of managing and operating the fund, except brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), extraordinary expenses, and expenses incurred in connection with the provision of shareholder services and distribution services under a plan adopted pursuant to Rule 12b-1 under the 1940 Act. The fee is computed and accrued daily based on each class's daily net assets and paid monthly in arrears. The difference in the fee among the classes is a result of their separate arrangements for non-Rule 12b-1 shareholder services. It is not the result of any difference in advisory or custodial fees or other expenses related to the management of the fund’s assets, which do not vary by class.
The annual management fee for each class is as follows:
Investor Class | I Class | Y Class | A Class | C Class | R Class | R5 Class | R6 Class | ||||||||||||||||
1.25% | 1.05% | 0.90% | 1.25% | 1.25% | 1.25% | 1.05% | 0.90% |
18
Distribution and Service Fees — The Board of Directors has adopted a separate Master Distribution and Individual Shareholder Services Plan for each of the A Class, C Class and R Class (collectively the plans), pursuant to Rule 12b-1 of the 1940 Act. The plans provide that the A Class will pay ACIS an annual distribution and service fee of 0.25%. The plans provide that the C Class will pay ACIS an annual distribution and service fee of 1.00%, of which 0.25% is paid for individual shareholder services and 0.75% is paid for distribution services. The plans provide that the R Class will pay ACIS an annual distribution and service fee of 0.50%. The fees are computed and accrued daily based on each class’s daily net assets and paid monthly in arrears. The fees are used to pay financial intermediaries for distribution and individual shareholder services. Fees incurred under the plans during the period ended November 30, 2020 are detailed in the Statement of Operations.
Directors' Fees and Expenses — The Board of Directors is responsible for overseeing the investment advisor’s management and operations of the fund. The directors receive detailed information about the fund and its investment advisor regularly throughout the year, and meet at least quarterly with management of the investment advisor to review reports about fund operations. The fund’s officers do not receive compensation from the fund.
Interfund Transactions — The fund may enter into security transactions with other American Century Investments funds and other client accounts of the investment advisor, in accordance with the 1940 Act rules and procedures adopted by the Board of Directors. The rules and procedures require, among other things, that these transactions be effected at the independent current market price of the security. During the period, the interfund sales were $175 and there were no interfund purchases. The effect of interfund transactions on the Statement of Operations was $81 in net realized gain (loss) on investment transactions.
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the period ended November 30, 2020 were $733,750,339 and $856,530,710, respectively.
19
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Year ended November 30, 2020 | Year ended November 30, 2019 | |||||||||||||
Shares | Amount | Shares | Amount | |||||||||||
Investor Class/Shares Authorized | 1,100,000,000 | 1,100,000,000 | ||||||||||||
Sold | 12,495,933 | $ | 134,906,888 | 22,833,790 | $ | 240,540,598 | ||||||||
Issued in reinvestment of distributions | 722,447 | 7,801,863 | 388,374 | 4,217,739 | ||||||||||
Redeemed | (24,386,669) | (277,708,979) | (65,606,525) | (711,808,825) | ||||||||||
(11,168,289) | (135,000,228) | (42,384,361) | (467,050,488) | |||||||||||
I Class/Shares Authorized | 1,520,000,000 | 1,520,000,000 | ||||||||||||
Sold | 49,164,195 | 563,271,691 | 78,665,181 | 874,061,540 | ||||||||||
Issued in reinvestment of distributions | 1,776,798 | 19,811,353 | 474,557 | 5,281,820 | ||||||||||
Redeemed | (55,821,848) | (622,419,153) | (50,245,387) | (545,284,007) | ||||||||||
(4,880,855) | (39,336,109) | 28,894,351 | 334,059,353 | |||||||||||
Y Class/Shares Authorized | 30,000,000 | 30,000,000 | ||||||||||||
Sold | 1,038,304 | 11,973,089 | 913,667 | 10,139,043 | ||||||||||
Issued in reinvestment of distributions | 27,351 | 306,119 | 4,968 | 55,447 | ||||||||||
Redeemed | (173,558) | (1,986,251) | (106,700) | (1,190,387) | ||||||||||
892,097 | 10,292,957 | 811,935 | 9,004,103 | |||||||||||
A Class/Shares Authorized | 100,000,000 | 100,000,000 | ||||||||||||
Sold | 2,676,295 | 29,022,024 | 3,294,887 | 33,939,545 | ||||||||||
Issued in reinvestment of distributions | 53,746 | 556,804 | 10,533 | 110,381 | ||||||||||
Redeemed | (3,247,159) | (34,383,970) | (3,456,550) | (35,675,172) | ||||||||||
(517,118) | (4,805,142) | (151,130) | (1,625,246) | |||||||||||
C Class/Shares Authorized | 45,000,000 | 45,000,000 | ||||||||||||
Sold | 192,283 | 2,004,278 | 716,119 | 6,640,072 | ||||||||||
Issued in reinvestment of distributions | 10,261 | 96,660 | — | — | ||||||||||
Redeemed | (977,404) | (9,501,689) | (1,227,066) | (11,446,164) | ||||||||||
(774,860) | (7,400,751) | (510,947) | (4,806,092) | |||||||||||
R Class/Shares Authorized | 30,000,000 | 30,000,000 | ||||||||||||
Sold | 257,538 | 2,908,336 | 220,384 | 2,282,049 | ||||||||||
Issued in reinvestment of distributions | 5,549 | 57,761 | — | — | ||||||||||
Redeemed | (323,560) | (3,545,976) | (184,311) | (1,924,685) | ||||||||||
(60,473) | (579,879) | 36,073 | 357,364 | |||||||||||
R5 Class/Shares Authorized | 30,000,000 | 30,000,000 | ||||||||||||
Sold | 181,608 | 2,248,341 | 58,405 | 635,522 | ||||||||||
Issued in reinvestment of distributions | 4,015 | 44,739 | 1,674 | 18,644 | ||||||||||
Redeemed | (120,565) | (1,477,816) | (280,786) | (3,093,224) | ||||||||||
65,058 | 815,264 | (220,707) | (2,439,058) | |||||||||||
R6 Class/Shares Authorized | 450,000,000 | 450,000,000 | ||||||||||||
Sold | 17,846,785 | 207,338,285 | 18,822,132 | 206,418,584 | ||||||||||
Issued in reinvestment of distributions | 690,876 | 7,733,183 | 212,269 | 2,364,675 | ||||||||||
Redeemed | (12,752,599) | (149,478,678) | (6,804,815) | (75,457,386) | ||||||||||
5,785,062 | 65,592,790 | 12,229,586 | 133,325,873 | |||||||||||
Net increase (decrease) | (10,659,378) | $ | (110,421,098) | (1,295,200) | $ | 825,809 |
20
6. Fair Value Measurements
The fund’s investments valuation process is based on several considerations and may use multiple inputs to determine the fair value of the investments held by the fund. In conformity with accounting principles generally accepted in the United States of America, the inputs used to determine a valuation are classified into three broad levels.
•Level 1 valuation inputs consist of unadjusted quoted prices in an active market for identical investments.
•Level 2 valuation inputs consist of direct or indirect observable market data (including quoted prices for comparable investments, evaluations of subsequent market events, interest rates, prepayment speeds, credit risk, etc.). These inputs also consist of quoted prices for identical investments initially expressed in local currencies that are adjusted through translation into U.S. dollars.
•Level 3 valuation inputs consist of unobservable data (including a fund’s own assumptions).
The level classification is based on the lowest level input that is significant to the fair valuation measurement. The valuation inputs are not necessarily an indication of the risks associated with investing in these securities or other financial instruments.
The following is a summary of the level classifications as of period end. The Schedule of Investments provides additional information on the fund’s portfolio holdings.
Level 1 | Level 2 | Level 3 | |||||||||
Assets | |||||||||||
Investment Securities | |||||||||||
Common Stocks | |||||||||||
Argentina | $ | 31,306,540 | — | — | |||||||
Brazil | 48,662,359 | $ | 174,099,914 | — | |||||||
China | 327,567,823 | 768,722,591 | — | ||||||||
Mexico | 40,010,294 | 17,227,729 | — | ||||||||
Russia | 47,417,931 | 44,378,809 | — | ||||||||
Other Countries | — | 1,306,459,588 | — | ||||||||
Temporary Cash Investments | 980 | 39,421,315 | — | ||||||||
$ | 494,965,927 | $ | 2,350,309,946 | — |
7. Risk Factors
The value of the fund’s shares will go up and down, sometimes rapidly or unpredictably, based on the performance of the securities owned by the fund and other factors generally affecting the securities market. Market risks, including political, regulatory, economic and social developments, can affect the value of the fund’s investments. Natural disasters, public health emergencies, terrorism and other unforeseeable events may lead to increased market volatility and may have adverse long-term effects on world economies and markets generally.
There are certain risks involved in investing in foreign securities. These risks include those resulting from political events (such as civil unrest, national elections and imposition of exchange controls), social and economic events (such as labor strikes and rising inflation), and natural disasters. Securities of foreign issuers may be less liquid and more volatile. Investing in emerging markets or a significant portion of assets in one country or region may accentuate these risks.
21
8. Federal Tax Information
The tax character of distributions paid during the years ended November 30, 2020 and November 30, 2019 were as follows:
2020 | 2019 | |||||||
Distributions Paid From | ||||||||
Ordinary income | $ | 39,283,749 | $ | 13,050,431 | ||||
Long-term capital gains | — | — |
The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
As of period end, the federal tax cost of investments and the components of distributable earnings on a tax-basis were as follows:
Federal tax cost of investments | $ | 1,924,568,076 | |||
Gross tax appreciation of investments | $ | 975,234,572 | |||
Gross tax depreciation of investments | (54,526,775) | ||||
Net tax appreciation (depreciation) of investments | 920,707,797 | ||||
Net tax appreciation (depreciation) on translation of assets and liabilities in foreign currencies | (1,068,423) | ||||
Net tax appreciation (depreciation) | $ | 919,639,374 | |||
Undistributed ordinary income | $ | 22,712,299 | |||
Accumulated short-term capital losses | $ | (294,244,851) | |||
Accumulated long-term capital losses | $ | (89,958,961) |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the realization to ordinary income for tax purposes of unrealized gains on investments in passive foreign investment companies.
Accumulated capital losses 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.
22
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 | |||||||||||||||||||||||||||||||||||||||||||||||
2020 | $11.25 | 0.04 | 2.48 | 2.52 | (0.15) | — | (0.15) | $13.62 | 22.79% | 1.26% | 1.26% | 0.33% | 0.33% | 30% | $582,036 | ||||||||||||||||||||||||||||||||
2019 | $10.19 | 0.17 | 0.94 | 1.11 | (0.05) | — | (0.05) | $11.25 | 10.99% | 1.25% | 1.25% | 1.59% | 1.59% | 39% | $606,668 | ||||||||||||||||||||||||||||||||
2018 | $12.00 | 0.08 | (1.80) | (1.72) | (0.03) | (0.06) | (0.09) | $10.19 | (14.57)% | 1.18% | 1.29% | 0.71% | 0.60% | 36% | $980,765 | ||||||||||||||||||||||||||||||||
2017 | $8.57 | 0.02 | 3.44 | 3.46 | (0.03) | — | (0.03) | $12.00 | 40.46% | 1.18% | 1.50% | 0.19% | (0.13)% | 47% | $883,436 | ||||||||||||||||||||||||||||||||
2016 | $8.10 | 0.02 | 0.46 | 0.48 | (0.01) | — | (0.01) | $8.57 | 5.95% | 1.38% | 1.63% | 0.30% | 0.05% | 59% | $470,280 | ||||||||||||||||||||||||||||||||
I Class | |||||||||||||||||||||||||||||||||||||||||||||||
2020 | $11.56 | 0.06 | 2.54 | 2.60 | (0.19) | — | (0.19) | $13.97 | 22.94% | 1.06% | 1.06% | 0.53% | 0.53% | 30% | $1,534,445 | ||||||||||||||||||||||||||||||||
2019 | $10.46 | 0.20 | 0.97 | 1.17 | (0.07) | — | (0.07) | $11.56 | 11.20% | 1.05% | 1.05% | 1.79% | 1.79% | 39% | $1,325,801 | ||||||||||||||||||||||||||||||||
2018 | $12.32 | 0.11 | (1.85) | (1.74) | (0.06) | (0.06) | (0.12) | $10.46 | (14.35)% | 0.98% | 1.09% | 0.91% | 0.80% | 36% | $897,336 | ||||||||||||||||||||||||||||||||
2017 | $8.79 | 0.04 | 3.54 | 3.58 | (0.05) | — | (0.05) | $12.32 | 40.86% | 0.94% | 1.26% | 0.43% | 0.11% | 47% | $505,000 | ||||||||||||||||||||||||||||||||
2016 | $8.31 | 0.04 | 0.47 | 0.51 | (0.03) | — | (0.03) | $8.79 | 6.13% | 1.18% | 1.43% | 0.50% | 0.25% | 59% | $37,036 | ||||||||||||||||||||||||||||||||
Y Class | |||||||||||||||||||||||||||||||||||||||||||||||
2020 | $11.60 | 0.08 | 2.54 | 2.62 | (0.22) | — | (0.22) | $14.00 | 23.09% | 0.91% | 0.91% | 0.68% | 0.68% | 30% | $30,169 | ||||||||||||||||||||||||||||||||
2019 | $10.49 | 0.26 | 0.94 | 1.20 | (0.09) | — | (0.09) | $11.60 | 11.43% | 0.90% | 0.90% | 1.94% | 1.94% | 39% | $14,638 | ||||||||||||||||||||||||||||||||
2018 | $12.34 | 0.08 | (1.81) | (1.73) | (0.06) | (0.06) | (0.12) | $10.49 | (14.23)% | 0.83% | 0.94% | 1.06% | 0.95% | 36% | $4,724 | ||||||||||||||||||||||||||||||||
2017(3) | $9.79 | 0.07 | 2.48 | 2.55 | — | — | — | $12.34 | 26.05% | 0.77%(4) | 1.12%(4) | 0.91%(4) | 0.56%(4) | 47%(5) | $6 |
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 | |||||||||||||||||||||||||||||||||||||||||||||||
2020 | $10.84 | 0.01 | 2.40 | 2.41 | (0.12) | — | (0.12) | $13.13 | 22.50% | 1.51% | 1.51% | 0.08% | 0.08% | 30% | $88,485 | ||||||||||||||||||||||||||||||||
2019 | $9.81 | 0.14 | 0.91 | 1.05 | (0.02) | — | (0.02) | $10.84 | 10.71% | 1.50% | 1.50% | 1.34% | 1.34% | 39% | $78,704 | ||||||||||||||||||||||||||||||||
2018 | $11.57 | 0.05 | (1.75) | (1.70) | — | (0.06) | (0.06) | $9.81 | (14.80)% | 1.43% | 1.54% | 0.46% | 0.35% | 36% | $72,711 | ||||||||||||||||||||||||||||||||
2017 | $8.26 | —(6) | 3.32 | 3.32 | (0.01) | — | (0.01) | $11.57 | 40.16% | 1.43% | 1.75% | (0.06)% | (0.38)% | 47% | $61,586 | ||||||||||||||||||||||||||||||||
2016 | $7.82 | 0.01 | 0.43 | 0.44 | — | — | — | $8.26 | 5.63% | 1.63% | 1.88% | 0.05% | (0.20)% | 59% | $37,743 | ||||||||||||||||||||||||||||||||
C Class | |||||||||||||||||||||||||||||||||||||||||||||||
2020 | $9.82 | (0.07) | 2.17 | 2.10 | (0.04) | — | (0.04) | $11.88 | 21.48% | 2.26% | 2.26% | (0.67)% | (0.67)% | 30% | $27,101 | ||||||||||||||||||||||||||||||||
2019 | $8.93 | 0.05 | 0.84 | 0.89 | — | — | — | $9.82 | 9.97% | 2.25% | 2.25% | 0.59% | 0.59% | 39% | $30,004 | ||||||||||||||||||||||||||||||||
2018 | $10.61 | (0.03) | (1.59) | (1.62) | — | (0.06) | (0.06) | $8.93 | (15.39)% | 2.18% | 2.29% | (0.29)% | (0.40)% | 36% | $31,871 | ||||||||||||||||||||||||||||||||
2017 | $7.63 | (0.08) | 3.06 | 2.98 | — | — | — | $10.61 | 39.06% | 2.16% | 2.48% | (0.79)% | (1.11)% | 47% | $24,972 | ||||||||||||||||||||||||||||||||
2016 | $7.28 | (0.05) | 0.40 | 0.35 | — | — | — | $7.63 | 4.81% | 2.38% | 2.63% | (0.70)% | (0.95)% | 59% | $5,840 | ||||||||||||||||||||||||||||||||
R Class | |||||||||||||||||||||||||||||||||||||||||||||||
2020 | $10.88 | (0.02) | 2.40 | 2.38 | (0.09) | — | (0.09) | $13.17 | 22.11% | 1.76% | 1.76% | (0.17)% | (0.17)% | 30% | $7,466 | ||||||||||||||||||||||||||||||||
2019 | $9.85 | 0.12 | 0.91 | 1.03 | — | — | — | $10.88 | 10.46% | 1.75% | 1.75% | 1.09% | 1.09% | 39% | $6,825 | ||||||||||||||||||||||||||||||||
2018 | $11.64 | 0.02 | (1.75) | (1.73) | — | (0.06) | (0.06) | $9.85 | (14.97)% | 1.68% | 1.79% | 0.21% | 0.10% | 36% | $5,825 | ||||||||||||||||||||||||||||||||
2017 | $8.33 | (0.02) | 3.33 | 3.31 | — | — | — | $11.64 | 39.74% | 1.68% | 2.00% | (0.31)% | (0.63)% | 47% | $4,811 | ||||||||||||||||||||||||||||||||
2016 | $7.90 | (0.02) | 0.45 | 0.43 | — | — | — | $8.33 | 5.44% | 1.88% | 2.13% | (0.20)% | (0.45)% | 59% | $2,340 |
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) | |||||||||||||||||||||||||||||||||
R5 Class | |||||||||||||||||||||||||||||||||||||||||||||||
2020 | $11.57 | 0.06 | 2.54 | 2.60 | (0.19) | — | (0.19) | $13.98 | 22.92% | 1.06% | 1.06% | 0.53% | 0.53% | 30% | $3,863 | ||||||||||||||||||||||||||||||||
2019 | $10.47 | 0.20 | 0.97 | 1.17 | (0.07) | — | (0.07) | $11.57 | 11.19% | 1.05% | 1.05% | 1.79% | 1.79% | 39% | $2,444 | ||||||||||||||||||||||||||||||||
2018 | $12.32 | 0.12 | (1.86) | (1.74) | (0.05) | (0.06) | (0.11) | $10.47 | (14.33)% | 0.98% | 1.09% | 0.91% | 0.80% | 36% | $4,521 | ||||||||||||||||||||||||||||||||
2017(3) | $9.78 | 0.03 | 2.51 | 2.54 | — | — | — | $12.32 | 25.97% | 0.92%(4) | 1.27%(4) | 0.78%(4) | 0.43%(4) | 47%(5) | $46 | ||||||||||||||||||||||||||||||||
R6 Class | |||||||||||||||||||||||||||||||||||||||||||||||
2020 | $11.58 | 0.08 | 2.54 | 2.62 | (0.22) | — | (0.22) | $13.98 | 23.13% | 0.91% | 0.91% | 0.68% | 0.68% | 30% | $570,868 | ||||||||||||||||||||||||||||||||
2019 | $10.48 | 0.23 | 0.96 | 1.19 | (0.09) | — | (0.09) | $11.58 | 11.45% | 0.90% | 0.90% | 1.94% | 1.94% | 39% | $405,776 | ||||||||||||||||||||||||||||||||
2018 | $12.34 | 0.12 | (1.84) | (1.72) | (0.08) | (0.06) | (0.14) | $10.48 | (14.28)% | 0.83% | 0.94% | 1.06% | 0.95% | 36% | $239,031 | ||||||||||||||||||||||||||||||||
2017 | $8.81 | 0.06 | 3.53 | 3.59 | (0.06) | — | (0.06) | $12.34 | 40.98% | 0.83% | 1.15% | 0.54% | 0.22% | 47% | $92,470 | ||||||||||||||||||||||||||||||||
2016 | $8.33 | 0.06 | 0.46 | 0.52 | (0.04) | — | (0.04) | $8.81 | 6.27% | 1.03% | 1.28% | 0.65% | 0.40% | 59% | $34,065 |
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 10, 2017 (commencement of sale) through November 30, 2017.
(4)Annualized.
(5)Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended November 30, 2017.
(6)Per share amount was less than $0.005.
See Notes to Financial Statements.
Report of Independent Registered Public Accounting Firm |
To the Shareholders and the Board of Directors of American Century World Mutual Funds, Inc.:
Opinion on the Financial Statements and Financial Highlights
We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of Emerging Markets Fund (the “Fund”), one of the funds constituting the American Century World Mutual Funds, Inc., as of November 30, 2020, the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of Emerging Markets Fund of the American Century World Mutual Funds, Inc. as of November 30, 2020, and the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on the Fund’s financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. Our procedures included confirmation of securities owned as of November 30, 2020, by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
DELOITTE & TOUCHE LLP
Kansas City, Missouri
January 19, 2021
We have served as the auditor of one or more American Century investment companies since 1997.
27
Management |
The Board of Directors
The individuals listed below serve as directors of the funds. Each director will continue to serve in this capacity until death, retirement, resignation or removal from office. The board has adopted a mandatory retirement age for directors who are not “interested persons,” as that term is defined in the Investment Company Act (independent directors). Independent directors shall retire by December 31 of the year in which they reach their 75th birthday.
Mr. Thomas is an “interested person” because he currently serves as President and Chief Executive Officer of American Century Companies, Inc. (ACC), the parent company of American Century Investment Management, Inc. (ACIM or the advisor). The other directors (more than three-fourths of the total number) are independent. They are not employees, directors or officers of, and have no financial interest in, ACC or any of its wholly owned, direct or indirect, subsidiaries, including ACIM, American Century Investment Services, Inc. (ACIS) and American Century Services, LLC (ACS), and they do not have any other affiliations, positions or relationships that would cause them to be considered “interested persons” under the Investment Company Act. The directors serve in this capacity for seven (in the case of Jonathan S. Thomas, 16; and Stephen E. Yates, 8) registered investment companies in the American Century Investments family of funds.
The following table presents additional information about the directors. The mailing address for each director is 4500 Main Street, Kansas City, Missouri 64111.
Name (Year of Birth) | Position(s) Held with Funds | Length of Time Served | Principal Occupation(s) During Past 5 Years | Number of American Century Portfolios Overseen by Director | Other Directorships Held During Past 5 Years | ||||||||||||
Independent Directors | |||||||||||||||||
Thomas W. Bunn (1953) | Director | Since 2017 | Retired | 62 | SquareTwo Financial; Barings (formerly Babson Capital Funds Trust) (2013 to 2016) | ||||||||||||
Chris H. Cheesman (1962) | Director | Since 2019 | Retired. Senior Vice President & Chief Audit Executive, AllianceBernstein (1999 to 2018) | 62 | None | ||||||||||||
Barry Fink (1955) | Director | Since 2012 (independent since 2016) | Retired | 62 | None | ||||||||||||
Rajesh K. Gupta (1960) | Director | Since 2019 | Partner Emeritus, SeaCrest Investment Management and SeaCrest Wealth Management (2019 to Present); Chief Executive Officer and Chief Investment Officer, SeaCrest Investment Management (2006 to 2019); Chief Executive Officer and Chief Investment Officer, SeaCrest Wealth Management (2008 to 2019) | 62 | None |
28
Name (Year of Birth) | Position(s) Held with Funds | Length of Time Served | Principal Occupation(s) During Past 5 Years | Number of American Century Portfolios Overseen by Director | Other Directorships Held During Past 5 Years | ||||||||||||
Independent Directors | |||||||||||||||||
Lynn Jenkins (1963) | Director | Since 2019 | Consultant, LJ Strategies (2019 to present); United States Representative, U.S. House of Representatives (2009 to 2018) | 62 | MGP Ingredients, Inc. | ||||||||||||
Jan M. Lewis (1957) | Director | Since 2011 | Retired | 62 | None | ||||||||||||
John R. Whitten (1946) | Director | Since 2008 | Retired | 62 | Onto Innovation Inc. (2019 to 2020); Rudolph Technologies, Inc. (2006 to 2019) | ||||||||||||
Stephen E. Yates (1948) | Director and Chairman of the Board | Since 2012 (Chairman since 2018) | Retired | 87 | None | ||||||||||||
Interested Director | |||||||||||||||||
Jonathan S. Thomas (1963) | Director | Since 2007 | President and Chief Executive Officer, ACC (2007 to present). Also serves as Chief Executive Officer, ACS; Executive Vice President, ACIM; Director, ACC, ACIM and other ACC subsidiaries | 125 | None |
The Statement of Additional Information has additional information about the fund's directors and is available without charge, upon request, by calling 1-800-345-2021.
29
Officers
The following table presents certain information about the executive officers of the funds. Each officer serves as an officer for each of the 16 (in the case of Robert J. Leach, 15) investment companies in the American Century family of funds. No officer is compensated for his or her service as an officer of the funds. The listed officers are interested persons of the funds and are appointed or re-appointed on an annual basis. The mailing address for each officer listed below is 4500 Main Street, Kansas City, Missouri 64111.
Name (Year of Birth) | Offices with the Funds | Principal Occupation(s) During the Past Five Years | ||||||
Patrick Bannigan (1965) | President since 2019 | Executive Vice President and Director, ACC (2012 to present); Chief Financial Officer, Chief Accounting Officer and Treasurer, ACC (2015 to present). Also serves as President, ACS; Vice President, ACIM; Chief Financial Officer, Chief Accounting Officer and/or Director, ACIM, ACS and other ACC subsidiaries | ||||||
R. Wes Campbell (1974) | Chief Financial Officer and Treasurer since 2018 | Vice President, ACS, (2020 to present); Investment Operations and Investment Accounting, ACS (2000 to present) | ||||||
Amy D. Shelton (1964) | Chief Compliance Officer and Vice President since 2014 | Chief Compliance Officer, American Century funds, (2014 to present); Chief Compliance Officer, ACIM (2014 to present); Chief Compliance Officer, ACIS (2009 to present). Also serves as Vice President, ACIS | ||||||
Charles A. Etherington (1957) | General Counsel since 2007 and Senior Vice President since 2006 | Attorney, ACC (1994 to present); Vice President, ACC (2005 to present); General Counsel, ACC (2007 to present). Also serves as General Counsel, ACIM, ACS, ACIS and other ACC subsidiaries; and Senior Vice President, ACIM and ACS | ||||||
C. Jean Wade (1964) | Vice President since 2012 | Senior Vice President, ACS (2017 to present); Vice President, ACS (2000 to 2017) | ||||||
Robert J. Leach (1966) | Vice President since 2006 | Vice President, ACS (2000 to present) | ||||||
David H. Reinmiller (1963) | Vice President since 2000 | Attorney, ACC (1994 to present). Also serves as Vice President, ACIM and ACS | ||||||
Ward D. Stauffer (1960) | Secretary since 2005 | Attorney, ACC (2003 to present) |
30
Approval of Management Agreement |
At a meeting held on June 24, 2020, the Fund’s Board of Directors (the "Board") unanimously approved the renewal of the 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, contracts for investment advisory services are required to be reviewed, evaluated, and approved by a majority of a fund’s directors (the “Directors”), including a majority of the independent Directors, each year.
Prior to its consideration of the renewal of the management agreement, the Directors requested and reviewed extensive data and information compiled by the Advisor and certain independent providers of evaluation data concerning the Fund and the services provided to the Fund by the Advisor. This review was in addition to the oversight and evaluation undertaken by the Board and its committees on a continual basis and the information received was supplemental to the extensive information that the Board and its committees receive and consider throughout the year.
In connection with its consideration of the renewal of the management agreement, the Board’s review and evaluation of the services provided by the Advisor included, but was not limited to, the following:
•the nature, extent, and quality of investment management, shareholder services, and other services provided and to be provided to the Fund;
•the wide range of other programs and services provided and to be provided to the Fund and its shareholders on a routine and non-routine basis;
•the Fund’s investment performance, including data comparing the Fund's performance to appropriate benchmarks and/or a peer group of other mutual funds with similar investment objectives and strategies;
•the cost of owning the Fund compared to the cost of owning similar funds;
•the compliance policies, procedures, and regulatory experience of the Advisor and the Fund's service providers;
•the Advisor’s strategic plans;
•the Advisor’s business continuity plans and specifically its response to the COVID-19 pandemic;
•financial data showing the cost of services provided to the Fund, the profitability of the Fund to the Advisor, and the overall profitability of the Advisor;
•possible economies of scale associated with the Advisor’s management of the Fund and other accounts;
•services provided and charges to the Advisor's other investment management clients;
•acquired fund fees and expenses;
•payments and practices in connection with financial intermediaries holding shares of the Fund and the services provided by intermediaries in connection therewith; and
•possible collateral benefits to the Advisor from the management of the Fund.
The Board held two meetings to consider the renewal. The independent Directors also met in private session three times to review and discuss the information provided in response to their request. The independent Directors held active discussions with the Advisor regarding the renewal of the management agreement, requesting supplemental information, and reviewing information provided by the Advisor in response thereto. The independent Directors had the benefit of the advice of their independent counsel throughout the process.
Factors Considered
The Directors considered all of the information provided by the Advisor, the independent data providers, and 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
31
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. In deciding to renew the management agreement, the Board based its decision on a number of factors, including without limitation the following:
Nature, Extent and Quality of Services — Generally. Under the management agreement, the Advisor is responsible for providing or arranging for all services necessary for the operation of the Fund. The Board noted that the Advisor provides or arranges at its own expense a wide variety of services including without limitation the following:
•constructing and designing the Fund
•portfolio research and security selection
•initial capitalization/funding
•securities trading
•Fund administration
•custody of Fund assets
•daily valuation of the Fund’s portfolio
•shareholder servicing and transfer agency, including shareholder confirmations, recordkeeping, and communications
•legal services (except the independent Directors’ counsel)
•regulatory and portfolio compliance
•financial reporting
•marketing and distribution (except amounts paid by the Fund under Rule 12b-1 plans)
The Board noted that many of these services have expanded over time in terms of both quantity and complexity in response to shareholder demands, competition in the industry, changing distribution channels, and the changing regulatory environment.
Investment Management Services. The nature of the investment management services provided to the Fund is quite complex and allows Fund shareholders access to professional money management, instant diversification of their investments within an asset class, the opportunity to easily diversify among asset classes by investing in or exchanging among various American Century Investments funds, and liquidity. In evaluating investment performance, the Board expects the Advisor to manage the Fund in accordance with its investment objectives and approved strategies. Further, the Directors recognize that the Advisor has an obligation to monitor trading activities, and in particular to seek the best execution of fund trades, and to evaluate the use of and payment for research. In providing these services, the Advisor utilizes teams of investment professionals (portfolio managers, analysts, research assistants, and securities traders) who require extensive information technology, research, training, compliance, and other systems to conduct their business. The Board, directly and through its Fund Performance Review Committee, provides oversight of the investment performance process. It regularly reviews investment performance information for the Fund, together with comparative information for appropriate benchmarks and/or peer groups of similarly-managed funds, over different time horizons. The Directors also review investment performance information during the management agreement renewal process. If performance concerns are identified, the Fund receives special reviews until performance improves, during which the Board discusses with the Advisor the reasons for such results (e.g., market conditions, security selection) and any efforts being undertaken to improve performance. The Fund’s performance was above its benchmark for the one-, three-, five-, and ten-year periods reviewed by the Board. The Board found the investment management services provided by the Advisor to the Fund to be satisfactory and consistent with the management agreement.
Shareholder and Other Services. Under the management agreement, the Advisor provides the Fund with a comprehensive package of transfer agency, shareholder, and other services. The Board, directly and through its various committees, regularly reviews reports and evaluations of such services at its regular meetings. These reports include, but are not limited to, information
32
regarding the operational efficiency and accuracy of the shareholder and transfer agency services provided, staffing levels, shareholder satisfaction, technology support (including cyber security), new products and services offered to Fund shareholders, securities trading activities, portfolio valuation services, auditing services, and legal and operational compliance activities. The Board found the services provided by the Advisor to the Fund under the management agreement to be competitive and of high quality.
COVID-19 Response. During 2020, much of the world experienced unprecedented change and challenges from the impacts of the rapidly evolving, worldwide spread of the COVID-19 virus. The Board evaluated the Advisor’s response to the COVID-19 pandemic and its impact on service to the Fund. The Board found that Fund shareholders have continued to receive the Advisor’s investment management and other services without disruption, and Advisor personnel have demonstrated great resiliency in providing those services. The Board, directly and through its Audit Committee, continues to monitor the impact of the pandemic and the response of each of the Fund’s service providers.
Costs of Services and Profitability. The Advisor provides detailed information concerning its cost of providing various services to the Fund, its profitability in managing the Fund (pre- and post-distribution), its overall profitability, and its financial condition. The Directors have reviewed with the Advisor the methodology used to prepare this financial information. This information is considered in evaluating the Advisor’s financial condition, its ability to continue to provide services under the management agreement, and the reasonableness of the current management fee. The Board concluded that the Advisor’s profits were reasonable in light of the services provided to the Fund.
Ethics. The Board generally considers the Advisor’s commitment to providing quality services to shareholders and to conducting its business ethically. They noted that the Advisor’s practices generally meet or exceed industry best practices.
Economies of Scale. The Board also reviewed information provided by the Advisor regarding the possible existence of economies of scale in connection with the management of the Fund. The Board concluded that economies of scale are difficult to measure and predict with precision, especially on a fund-by-fund basis. The Board concluded that the Advisor is appropriately sharing economies of scale, to the extent they exist, through its competitive fee structure, offering competitive fees from fund inception, and through reinvestment in its business, infrastructure, investment capabilities and initiatives to provide shareholders additional content and services.
Comparison to Other Funds’ Fees. The management agreement provides that the Fund pays the Advisor a single, all-inclusive (or unified) management fee for providing all services necessary for the management and operation of the Fund, other than brokerage expenses, expenses attributable to short sales, taxes, interest, extraordinary expenses, fees and expenses of the Fund’s independent Directors (including their independent legal counsel), and expenses incurred in connection with the provision of shareholder services and distribution services under a plan adopted pursuant to Rule 12b-1 under the Investment Company Act. 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 any applicable Rule 12b-1 distribution fees, all other components of the total fees charged by these other funds may be increased without shareholder approval. The Board believes the unified fee structure is a benefit to Fund shareholders because it clearly discloses to shareholders the cost of owning Fund shares, and, since 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 comparing the Fund’s unified fee to the total expense ratios of its peers. The unified fee charged to shareholders
33
of the Fund was below the median of the total expense ratios of the Fund’s peer expense universe. The Board concluded that the management fee paid by the Fund to the Advisor under the management agreement is reasonable in light of the services provided to the Fund.
Comparison to Fees and Services Provided to Other Clients of the Advisor. The Board also requested and received information from the Advisor concerning the nature of the services, fees, costs, and profitability of its advisory services to advisory clients other than the Fund. They observed that these varying types of client accounts require different services and involve different regulatory and entrepreneurial risks than the management of the Fund. The Board analyzed this information and concluded that the fees charged and services provided to the Fund were reasonable by comparison.
Payments to Intermediaries. The Directors also requested and received a description of payments made to intermediaries by the Fund and the Advisor and services provided in response thereto. These payments include various payments made by the Fund or the Advisor to different types of intermediaries and recordkeepers for distribution and service activities provided for the Fund. The Directors reviewed such information and received representations from the Advisor that all such payments by the Fund were made pursuant to the Fund's Rule 12b-1 Plan and that all such payments by the Advisor were made from the Advisor’s resources and reasonable profits. The Board found such payments to be reasonable in scope and purpose.
Collateral or “Fall-Out” Benefits Derived by the Advisor. The Board considered the possible existence of collateral benefits the Advisor may receive as a result of its relationship with the Fund. They concluded that the Advisor’s primary business is managing mutual funds and it generally does not use fund or shareholder information to generate profits in other lines of business, and therefore does not derive any significant collateral benefits from them. To the extent there are potential collateral benefits, the board has been advised and has taken this into consideration in its review of the management contract with the Fund. The Board noted that additional assets from other clients may offer the Advisor some benefit from increased leverage with service providers and counterparties. Additionally, the Advisor may receive proprietary research from broker-dealers that execute fund portfolio transactions, which the Board concluded is likely to benefit other clients of the Advisor, as well as Fund shareholders. The Board also determined that the Advisor is able to provide investment management services to certain clients other than the Fund, at least in part, due to its existing infrastructure built to serve the fund complex. The Board concluded that appropriate allocation methodologies had been employed to assign resources and the cost of those resources to these other clients.
Existing Relationship. The Board also considered whether there was any reason for not continuing the existing arrangement with the Advisor. In this regard, the Board was mindful of the potential disruptions of the Fund’s operations and various risks, uncertainties, and other effects that could occur as a result of a decision not to continue such relationship. In particular, the Board recognized that most shareholders have invested in the Fund on the strength of the Advisor’s industry standing and reputation and in the expectation that the Advisor will have a continuing role in providing advisory services to the Fund.
Conclusion of the Directors. As a result of this process, the Board, including all of the independent Directors, taking into account all of the factors discussed above and the information provided by the Advisor and others in connection with its review and throughout the year, determined that the management fee is fair and reasonable in light of the services provided and that the investment management agreement between the Fund and the Advisor should be renewed.
34
Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain retirement accounts are subject to federal income tax withholding, unless you elect not to have withholding apply*. Tax will be withheld on the total amount withdrawn even though you may be receiving amounts that are not subject to withholding, such as nondeductible contributions. In such case, excess amounts of withholding could occur. You may adjust your withholding election so that a greater or lesser amount will be withheld.
If you don’t want us to withhold on this amount, you must notify us to not withhold the federal income tax. You may notify us in writing or in certain situations by telephone or through other electronic means. For systematic withdrawals, your withholding election will remain in effect until revoked or changed by filing a new election. You have the right to revoke your election at any time and change your withholding percentage for future distributions.
Remember, even if you elect not to have income tax withheld, you are liable for paying income tax on the taxable portion of your withdrawal. If you elect not to have income tax withheld or you don’t have enough income tax withheld, you may be responsible for payment of estimated tax. You may incur penalties under the estimated tax rules if your withholding and estimated tax payments are not sufficient. You can reduce or defer the income tax on a distribution by directly or indirectly rolling such distribution over to another IRA or eligible plan. You should consult your tax advisor for additional information.
State tax will be withheld if, at the time of your distribution, your address is within one of the mandatory withholding states and you have federal income tax withheld (or as otherwise required by state law). State taxes will be withheld from your distribution in accordance with the respective state rules.
*Some 403(b), 457 and qualified retirement plan distributions may be subject to 20% mandatory withholding, as they are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
A description of the policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund is available without charge, upon request, by calling 1-800-345-2021. It is also available on American Century Investments’ website at americancentury.com/proxy 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 americancentury.com/proxy. 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 as an exhibit to its reports on
Form N-PORT. The fund’s Form N-PORT reports are available on the SEC’s website at sec.gov.
The fund also makes its complete schedule of portfolio holdings for the most recent quarter of its
fiscal year available on its website at americancentury.com and, upon request, by calling
1-800-345-2021.
35
Other Tax Information
The following information is provided pursuant to provisions of the Internal Revenue Code.
The fund hereby designates up to the maximum amount allowable as qualified dividend income for
the fiscal year ended November 30, 2020.
For the fiscal year ended November 30, 2020, the fund intends to pass through to shareholders
foreign source income of $43,586,029 and foreign taxes paid of $4,421,186, or up to the maximum
amount allowable, as a foreign tax credit. Foreign source income and foreign tax expense per
outstanding share on November 30, 2020 are $0.2122 and $0.0215, respectively.
36
Notes |
37
Notes |
38
Notes |
39
Notes |
40
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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. | ||||||||
©2021 American Century Proprietary Holdings, Inc. All rights reserved. CL-ANN-91030 2101 |
![image171.jpg](https://capedge.com/proxy/N-CSR/0000872825-21-000006/image171.jpg)
Annual Report | |||||
November 30, 2020 | |||||
Emerging Markets Small Cap Fund | |||||
Investor Class (AECVX) | |||||
I Class (AECSX) | |||||
A Class (AECLX) | |||||
C Class (AECHX) | |||||
R Class (AECMX) | |||||
R6 Class (AECTX) |
Table of Contents |
President’s Letter | |||||
Performance | |||||
Portfolio Commentary | |||||
Fund Characteristics | |||||
Shareholder Fee Example | |||||
Schedule of Investments | |||||
Statement of Assets and Liabilities | |||||
Statement of Operations | |||||
Statement of Changes in Net Assets | |||||
Notes to Financial Statements | |||||
Financial Highlights | |||||
Report of Independent Registered Public Accounting Firm | |||||
Management | |||||
Approval of Management Agreement | |||||
Additional Information |
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 |
![image141.jpg](https://capedge.com/proxy/N-CSR/0000872825-21-000006/image141.jpg)
Dear Investor:
Thank you for reviewing this annual report for the period ended November 30, 2020. Annual reports help convey important information about fund returns, including market factors that affected performance. For additional investment insights, please visit americancentury.com.
Stocks Recovered from Pandemic-Fueled Sell-Off
In late 2019, broad market sentiment was generally upbeat. Dovish central banks in developed markets, modest inflation, improving economic and corporate earnings data, and progress on U.S.-China trade policy helped boost global growth outlooks. Against this backdrop, riskier assets generally remained in favor.
However, beginning in late February, the COVID-19 outbreak rapidly spread worldwide, halting most economic activity and triggering a deep global recession. Global stocks sold off sharply amid a widespread flight to safety. Quick and aggressive action from the Federal Reserve and other central banks and federal governments helped stabilize and restore confidence in the financial markets. By summer, declining coronavirus infection and death rates in many regions and the reopening of economies were positive influences. By the end of November, most data suggested economies were recovering. But at the same time, COVID-19 infection rates were rising in the U.S. and Europe, prompting new lockdown measures that threatened the economic recovery.
Overall, global stocks overcame the effects of the early 2020 sell-off to deliver solid gains for the 12-month period. Emerging markets stocks rallied and outperformed developed markets stocks, while growth stocks significantly outpaced value stocks worldwide.
Science Helps Steer the Return to Normal
The return to pre-pandemic life will take time and patience, but we are confident we will get there. The first COVID-19 vaccine is now approved and in limited distribution, and medical professionals continue to develop better treatment protocols. Until the vaccine is widely available, investors likely will face periods of outbreak-related disruptions, economic uncertainty and heightened market volatility. These influences can be unsettling, but they tend to be temporary.
We appreciate your confidence in us during these extraordinary times. Our firm has a long history of helping clients weather unpredictable markets, and we’re confident we will continue to meet today’s challenges.
Sincerely,
![image231.jpg](https://capedge.com/proxy/N-CSR/0000872825-21-000006/image231.jpg)
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
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Performance |
Total Returns as of November 30, 2020 | ||||||||||||||
Average Annual Returns | ||||||||||||||
Ticker Symbol | 1 year | Since Inception | Inception Date | |||||||||||
Investor Class | AECVX | 14.07% | 9.30% | 4/7/16 | ||||||||||
MSCI Emerging Markets Small Cap Index | — | 17.51% | 7.09% | — | ||||||||||
I Class | AECSX | 14.25% | 9.50% | 4/7/16 | ||||||||||
A Class | AECLX | 4/7/16 | ||||||||||||
No sales charge | 13.76% | 9.02% | ||||||||||||
With sales charge | 7.22% | 7.65% | ||||||||||||
C Class | AECHX | 12.94% | 8.21% | 4/7/16 | ||||||||||
R Class | AECMX | 13.54% | 8.75% | 4/7/16 | ||||||||||
R6 Class | AECTX | 14.47% | 9.68% | 4/7/16 |
Sales charges include initial sales charges and contingent deferred sales charges (CDSCs), as applicable. A Class shares have a 5.75% maximum initial sales charge and may be subject to a maximum CDSC of 1.00%. C Class shares redeemed within 12 months of purchase are subject to a maximum CDSC of 1.00%. The SEC requires that mutual funds provide performance information net of maximum sales charges in all cases where charges could be applied.
Data presented reflect past performance. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance shown. Total returns for periods less than one year are not annualized. Investment return and principal value will fluctuate, and redemption value may be more or less than original cost. Data assumes reinvestment of dividends and capital gains, and none of the charts reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. To obtain performance data current to the most recent month end, please call 1-800-345-2021 or visit americancentury.com. For additional information about the fund, please consult the prospectus.
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Growth of $10,000 Over Life of Class | ||
$10,000 investment made April 7, 2016 | ||
Performance for other share classes will vary due to differences in fee structure. |
![chart-82e771b67ba7432a8091.jpg](https://capedge.com/proxy/N-CSR/0000872825-21-000006/chart-82e771b67ba7432a8091.jpg)
Value on November 30, 2020 | |||||
Investor Class — $15,124 | |||||
MSCI Emerging Markets Small Cap Index — $13,752 | |||||
Total Annual Fund Operating Expenses | |||||||||||||||||
Investor Class | I Class | A Class | C Class | R Class | R6 Class | ||||||||||||
1.40% | 1.20% | 1.65% | 2.40% | 1.90% | 1.05% |
The total annual fund operating expenses shown is as stated in the fund’s prospectus current as of the date of this report. The prospectus may vary from the expense ratio shown elsewhere in this report because it is based on a different time period, includes acquired fund fees and expenses, and, if applicable, does not include fee waivers or expense reimbursements.
Data presented reflect past performance. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance shown. Total returns for periods less than one year are not annualized. Investment return and principal value will fluctuate, and redemption value may be more or less than original cost. Data assumes reinvestment of dividends and capital gains, and none of the charts reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. To obtain performance data current to the most recent month end, please call 1-800-345-2021 or visit americancentury.com. For additional information about the fund, please consult the prospectus.
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Portfolio Commentary |
Portfolio Managers: Patricia Ribeiro and Sherwin Soo
Performance Summary
Emerging Markets Small Cap returned 14.07%* for the 12 months ended November 30, 2020. The fund’s benchmark, the MSCI Emerging Markets Small Cap Index, returned 17.51% for the same period.
The fund underperformed its benchmark during the period, due primarily to an underweight, relative to the benchmark, in the health care sector. Stock selection and an overweight to consumer staples also detracted from relative results. Conversely, stock choices in industrials bolstered relative performance, along with an underweight to real estate. Regionally, South Korea was the primary detractor, due to a combination of stock choices and an underweight to the market. An overweight to Indonesia also weighed on returns. Those relative losses were partially offset by stock selection and positioning in China and India.
Health Care, Consumer Staples Holdings Detracted
Holdings in the health care and consumer staples sectors were the primary drivers of the fund’s underperformance over the 12-month period. Detraction in health care was due to a significant underweight to the sector, as overall stock selection was a positive. Lack of exposure to South Korea-based biologics developer Seegene and several other index constituents in the pharmaceuticals and biotechnology industries weighed on relative performance, as they performed well amid the race for COVID-19 therapies.
Notable detractors in consumer staples included Brazil-based retailer Cia Brasileira de Distribuicao and South Korea beverage and snack producer Orion Corp/Republic of Korea. Cia Brasileira de Distribuicao’s earnings results were mixed, and top-line trends were lower than its main peer, Carrefour Brasil. We exited the position during the period. Orion’s shares declined amid sluggish domestic sales in South Korea, despite a healthy outlook for its business in China.
Other notable detractors included U.K.-listed, United Arab Emirates-based payment solutions provider Network International Holdings, Brazil-based residential real estate firm Cyrela Brazil Realty and Indonesia-based Bank BTPN Syariah.
Network International lowered sales estimates, accounting for the negative impact of Jordanian regulations associated with caps on fees. We exited the position during the third quarter of 2020. Cyrela Brazil Realty’s shares declined amid expectations for a prolonged disruption from COVID-19 restrictions, and we exited our position during the first half of 2020. Bank BTPN Syariah’s shares declined later in the period as loan growth remained weak, with expectations for low, single-digit growth in the short term.
Industrials a Key Contributor
Industrials holdings substantially bolstered relative results, driven largely by China-based property service providers Country Garden Services Holdings and A-Living Smart City Services. Country Garden beat earnings estimates, driven by revenue growth in value-added services and improved margins. The company continued to gain market share and enhance efficiencies through cost savings measures. A-Living’s shares performed well, backed by Chinese government efforts to increase professional property management coverage.
Our substantial underweight to the real estate sector was a notable contributor, due largely to lack of exposure to real estate investment trusts and real estate developers that declined during the period. Stock selection in the sector also added value, led by shares of China-based hotel and residential developer CIFI Holdings Group, which advanced, supported by its prime geographical exposure and strategic capability in land replenishment, as well as government measures to support construction activity.
*All fund returns referenced in this commentary are for Investor Class shares. Performance for other share classes will vary due to differences in fee structure; when Investor Class performance exceeds that of the fund’s benchmark, other share classes may not. See page 3 for returns for all share classes.
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Information technology holdings also bolstered relative returns, led by contribution from Taiwan-based semiconductor manufacturing firm Alchip Technologies and China-based data center operator GDS Holdings. Alchip’s shares were bolstered by increasing demand, driven by China’s efforts to localize production of central processing units and artificial intelligence processors. GDS continued to benefit from ongoing digitization efforts by industries in China, supporting strong demand for data centers. The company’s successful capital raise to pursue projects and capacity expansion also bolstered the stock.
Other notable contributors included China-based online education service provider GSX Techedu, which we sold during the period, and Top Glove, the Malaysia-based rubber glovemaker. GSX benefited from revenue growth led by K-12 courses, as well as improving margins. Top Glove’s shares advanced as a surge in demand from COVID-19 drove a severe demand/supply mismatch that supported aggressive price increases.
Outlook
While each of the emerging markets (EM) has responded differently to COVID-19 and may face different challenges, we continue to believe the long-term case for EM stocks remains strong. We believe EM economies will likely benefit from the recovery in global demand and that the extension of highly accommodative monetary policies in prominent global markets will likely continue to push capital flows into EM.
The change in the U.S. administration is likely to reduce uncertainty and lower volatility, given the potential reduction in geopolitical risk that has, at times, weighed on EM equities. In our view, as COVID-19 vaccines roll out, the U.S. is likely to de-escalate tensions with China, which could help improve commodity prices and weaken the U.S. dollar, all positives for EM equities in 2021.
The acceleration of existing trends, aided by the pandemic, continues to drive growth in areas related to information technology. E-commerce and logistics are benefiting amid increasing adoption of online purchasing, including within previously underutilized areas such as groceries. Also, 5G network rollout and the smartphone replacement cycle support growth. We believe COVID-19 may permanently alter consumer behavior, further accelerating these trends.
Consumer discretionary remains a prominent overweight for the fund, though we reduced our sector holdings during the period. We maintain exposure to companies positioned to benefit from strong consumer trends, including growing demand for luxury and status goods and access to a higher standard of living through education, health care and financial services. For example, we hold overweight positions in several China-based education service providers. During the period, we initiated a position in Mando, the South Korean automotive components manufacturer, amid recovering vehicle sales in South Korea and China. The information technology (IT) sector is also a prominent overweight for the fund.
While we reduced exposure to China during the period, the market remains a prominent position. Holdings include positions in IT and the online economy (media, entertainment and e-commerce). We also own names in distance learning and structural growth areas such as the 5G build-out. In our view, IT and communication services will likely continue to benefit from the COVID-19-related structural changes occurring across sectors.
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Fund Characteristics |
NOVEMBER 30, 2020 | |||||
Top Ten Holdings | % of net assets | ||||
Chailease Holding Co. Ltd. | 2.6% | ||||
Alchip Technologies Ltd. | 2.5% | ||||
Han Kuk Carbon Co. Ltd. | 2.4% | ||||
Cemex SAB de CV, ADR | 2.2% | ||||
Realtek Semiconductor Corp. | 2.1% | ||||
Larsen & Toubro Infotech Ltd. | 2.1% | ||||
Vanguard International Semiconductor Corp. | 1.8% | ||||
Banco Inter SA | 1.7% | ||||
Airtac International Group | 1.6% | ||||
Digital Telecommunications Infrastructure Fund | 1.5% | ||||
Types of Investments in Portfolio | % of net assets | ||||
Common Stocks | 99.8% | ||||
Warrants | —* | ||||
Total Equity Exposure | 99.8% | ||||
Other Assets and Liabilities | 0.2% | ||||
*Category is less than 0.05% of total net assets. | |||||
Investments by Country | % of net assets | ||||
Taiwan | 19.6% | ||||
South Korea | 16.6% | ||||
China | 13.6% | ||||
India | 12.6% | ||||
Brazil | 10.0% | ||||
Indonesia | 4.9% | ||||
Thailand | 4.6% | ||||
Russia | 2.6% | ||||
South Africa | 2.3% | ||||
Mexico | 2.2% | ||||
Philippines | 2.2% | ||||
Other Countries | 8.6% | ||||
Other Assets and Liabilities | 0.2% |
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Shareholder Fee Example |
Fund shareholders may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption/exchange fees; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in your fund and to compare these costs with the ongoing cost of investing in other mutual funds.
The example is based on an investment of $1,000 made at the beginning of the period and held for the entire period from June 1, 2020 to November 30, 2020.
Actual Expenses
The table provides information about actual account values and actual expenses for each class. You may use the information, together with the amount you invested, to estimate the expenses that you paid over the period. First, identify the share class you own. Then simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
If you hold Investor Class shares of any American Century Investments fund, or I Class shares of the American Century Diversified Bond Fund, in an American Century Investments account (i.e., not through a financial intermediary or employer-sponsored retirement plan account), American Century Investments may charge you a $25.00 annual 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 $25.00 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.
8
Beginning Account Value 6/1/20 | Ending Account Value 11/30/20 | Expenses Paid During Period(1) 6/1/20 - 11/30/20 | Annualized Expense Ratio(1) | |||||||||||
Actual | ||||||||||||||
Investor Class | $1,000 | $1,248.20 | $8.26 | 1.47% | ||||||||||
I Class | $1,000 | $1,248.50 | $7.14 | 1.27% | ||||||||||
A Class | $1,000 | $1,247.40 | $9.66 | 1.72% | ||||||||||
C Class | $1,000 | $1,241.50 | $13.84 | 2.47% | ||||||||||
R Class | $1,000 | $1,244.70 | $11.06 | 1.97% | ||||||||||
R6 Class | $1,000 | $1,250.90 | $6.30 | 1.12% | ||||||||||
Hypothetical | ||||||||||||||
Investor Class | $1,000 | $1,017.65 | $7.41 | 1.47% | ||||||||||
I Class | $1,000 | $1,018.65 | $6.41 | 1.27% | ||||||||||
A Class | $1,000 | $1,016.40 | $8.67 | 1.72% | ||||||||||
C Class | $1,000 | $1,012.65 | $12.43 | 2.47% | ||||||||||
R Class | $1,000 | $1,015.15 | $9.92 | 1.97% | ||||||||||
R6 Class | $1,000 | $1,019.40 | $5.65 | 1.12% |
(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. Annualized expense ratio reflects actual expenses, including any applicable fee waivers or expense reimbursements and excluding any acquired fund fees and expenses.
9
Schedule of Investments |
NOVEMBER 30, 2020
Shares | Value | |||||||
COMMON STOCKS — 99.8% | ||||||||
Argentina — 1.3% | ||||||||
Globant SA(1) | 506 | $ | 95,472 | |||||
Brazil — 10.0% | ||||||||
Arco Platform Ltd., Class A(1) | 1,553 | 67,944 | ||||||
Banco Inter SA | 9,394 | 127,827 | ||||||
Cia de Saneamento do Parana | 10,700 | 50,071 | ||||||
Construtora Tenda SA | 7,100 | 38,261 | ||||||
Equatorial Energia SA | 19,100 | 77,649 | ||||||
Fleury SA | 9,700 | 48,107 | ||||||
Locaweb Servicos de Internet SA(1) | 6,300 | 77,577 | ||||||
Magazine Luiza SA | 14,408 | 62,877 | ||||||
Randon SA Implementos e Participacoes, Preference Shares | 34,100 | 92,929 | ||||||
TOTVS SA | 12,600 | 64,442 | ||||||
Via Varejo SA(1) | 11,300 | 37,186 | ||||||
744,870 | ||||||||
Chile — 0.5% | ||||||||
Geopark Ltd. | 4,240 | 38,711 | ||||||
China — 13.6% | ||||||||
21Vianet Group, Inc., ADR(1) | 2,628 | 74,477 | ||||||
A-Living Smart City Services Co., Ltd., H Shares | 8,750 | 36,937 | ||||||
China East Education Holdings Ltd. | 42,000 | 93,705 | ||||||
China Education Group Holdings Ltd. | 54,000 | 107,787 | ||||||
China Lesso Group Holdings Ltd. | 52,000 | 92,963 | ||||||
China Resources Cement Holdings Ltd. | 32,000 | 39,638 | ||||||
China Yongda Automobiles Services Holdings Ltd. | 55,500 | 95,017 | ||||||
CIFI Holdings Group Co. Ltd. | 120,570 | 103,771 | ||||||
Country Garden Services Holdings Co. Ltd. | 7,000 | 39,247 | ||||||
GDS Holdings Ltd., ADR(1) | 1,238 | 111,457 | ||||||
Haitian International Holdings Ltd. | 14,000 | 37,834 | ||||||
Li Ning Co. Ltd. | 12,500 | 67,973 | ||||||
Times China Holdings Ltd. | 46,000 | 66,980 | ||||||
West China Cement Ltd. | 270,000 | 42,061 | ||||||
1,009,847 | ||||||||
Greece — 1.3% | ||||||||
JUMBO SA | 2,944 | 52,649 | ||||||
OPAP SA | 3,894 | 43,911 | ||||||
96,560 | ||||||||
Hong Kong — 1.3% | ||||||||
Minth Group Ltd. | 20,000 | 99,559 | ||||||
India — 12.6% | ||||||||
Bata India Ltd. | 1,954 | 41,470 | ||||||
Berger Paints India Ltd. | 5,729 | 49,793 | ||||||
Central Depository Services India Ltd. | 5,504 | 36,368 | ||||||
Crompton Greaves Consumer Electricals Ltd. | 19,606 | 80,788 | ||||||
EPL Ltd. | 9,544 | 33,737 | ||||||
ICICI Securities Ltd. | 6,133 | 37,125 | ||||||
IndiaMart InterMesh Ltd. | 573 | 39,339 |
10
Shares | Value | |||||||
Indraprastha Gas Ltd. | 10,667 | $ | 71,075 | |||||
Jubilant Foodworks Ltd. | 3,257 | 109,850 | ||||||
L&T Technology Services Ltd. | 2,180 | 50,687 | ||||||
Larsen & Toubro Infotech Ltd. | 3,570 | 153,771 | ||||||
Prestige Estates Projects Ltd. | 19,472 | 70,200 | ||||||
Torrent Pharmaceuticals Ltd. | 2,069 | 73,028 | ||||||
Zydus Wellness Ltd. | 3,365 | 84,597 | ||||||
931,828 | ||||||||
Indonesia — 4.9% | ||||||||
Ace Hardware Indonesia Tbk PT | 590,000 | 66,271 | ||||||
Bank BTPN Syariah Tbk PT | 231,800 | 67,868 | ||||||
Jasa Marga Persero Tbk PT | 229,800 | 68,285 | ||||||
Semen Indonesia Persero Tbk PT | 61,300 | 50,861 | ||||||
Tower Bersama Infrastructure Tbk PT | 608,300 | 61,464 | ||||||
XL Axiata Tbk PT | 267,900 | 45,426 | ||||||
360,175 | ||||||||
Malaysia — 1.8% | ||||||||
Carlsberg Brewery Malaysia Bhd | 7,600 | 35,896 | ||||||
Inari Amertron Bhd | 75,900 | 49,956 | ||||||
Top Glove Corp. Bhd | 28,900 | 50,484 | ||||||
136,336 | ||||||||
Mexico — 2.2% | ||||||||
Cemex SAB de CV, ADR | 35,687 | 164,160 | ||||||
Philippines — 2.2% | ||||||||
International Container Terminal Services, Inc. | 29,600 | 71,908 | ||||||
Wilcon Depot, Inc. | 243,500 | 90,968 | ||||||
162,876 | ||||||||
Russia — 2.6% | ||||||||
TCS Group Holding plc, GDR | 3,236 | 98,520 | ||||||
Yandex NV, A Shares(1) | 1,353 | 93,303 | ||||||
191,823 | ||||||||
Saudi Arabia — 1.4% | ||||||||
Leejam Sports Co. JSC | 5,580 | 106,155 | ||||||
South Africa — 2.3% | ||||||||
Capitec Bank Holdings Ltd.(1) | 630 | 52,611 | ||||||
Clicks Group Ltd. | 5,365 | 81,115 | ||||||
JSE Ltd. | 4,300 | 33,507 | ||||||
167,233 | ||||||||
South Korea — 16.6% | ||||||||
CJ Logistics Corp.(1) | 688 | 103,021 | ||||||
Cosmax, Inc. | 656 | 56,612 | ||||||
Doosan Bobcat, Inc. | 2,736 | 74,478 | ||||||
Ecopro BM Co. Ltd. | 651 | 89,440 | ||||||
GS Retail Co. Ltd. | 1,882 | 57,101 | ||||||
Han Kuk Carbon Co. Ltd. | 14,552 | 175,160 | ||||||
Hite Jinro Co. Ltd. | 1,290 | 37,331 | ||||||
Hotel Shilla Co. Ltd. | 526 | 38,126 | ||||||
Iljin Materials Co. Ltd. | 2,211 | 94,130 | ||||||
Innocean Worldwide, Inc. | 673 | 35,503 | ||||||
Koh Young Technology, Inc. | 657 | 55,672 | ||||||
LG Innotek Co. Ltd. | 737 | 103,539 | ||||||
LG Uplus Corp. | 3,169 | 34,272 |
11
Shares | Value | |||||||
Mando Corp. | 2,493 | $ | 109,760 | |||||
Orion Corp./Republic of Korea | 850 | 91,676 | ||||||
Studio Dragon Corp.(1) | 1,012 | 73,611 | ||||||
1,229,432 | ||||||||
Taiwan — 19.6% | ||||||||
Accton Technology Corp. | 10,000 | 84,003 | ||||||
Airtac International Group | 4,000 | 116,649 | ||||||
Alchip Technologies Ltd. | 8,000 | 187,934 | ||||||
Asia Cement Corp. | 42,000 | 63,867 | ||||||
ASPEED Technology, Inc. | 1,000 | 49,565 | ||||||
Chailease Holding Co. Ltd. | 34,717 | 190,249 | ||||||
Chaun-Choung Technology Corp. | 4,000 | 33,424 | ||||||
Giant Manufacturing Co. Ltd. | 7,000 | 69,459 | ||||||
ITEQ Corp. | 14,000 | 67,398 | ||||||
Merida Industry Co. Ltd. | 8,000 | 70,248 | ||||||
Powertech Technology, Inc. | 21,000 | 67,870 | ||||||
Realtek Semiconductor Corp. | 12,000 | 156,390 | ||||||
Sercomm Corp. | 14,000 | 38,758 | ||||||
Taiwan Union Technology Corp. | 15,000 | 61,657 | ||||||
Vanguard International Semiconductor Corp. | 36,000 | 132,847 | ||||||
Win Semiconductors Corp. | 5,000 | 58,863 | ||||||
1,449,181 | ||||||||
Thailand — 4.6% | ||||||||
Digital Telecommunications Infrastructure Fund | 256,000 | 112,556 | ||||||
Muangthai Capital PCL(1) | 30,000 | 53,139 | ||||||
Sri Trang Gloves Thailand PCL | 44,100 | 110,895 | ||||||
Srisawad Corp. PCL | 33,460 | 64,028 | ||||||
340,618 | ||||||||
Turkey — 1.0% | ||||||||
Sok Marketler Ticaret AS(1) | 44,768 | 71,690 | ||||||
TOTAL COMMON STOCKS (Cost $5,446,004) | 7,396,526 | |||||||
WARRANTS† | ||||||||
Thailand† | ||||||||
Srisawad Corp. PCL(1) (Cost $—) | 2,022 | 675 | ||||||
TOTAL INVESTMENT SECURITIES — 99.8% (Cost $5,446,004) | 7,397,201 | |||||||
OTHER ASSETS AND LIABILITIES — 0.2% | 16,187 | |||||||
TOTAL NET ASSETS — 100.0% | $ | 7,413,388 |
12
MARKET SECTOR DIVERSIFICATION | |||||
(as a % of net assets) | |||||
Information Technology | 25.9 | % | |||
Consumer Discretionary | 20.8 | % | |||
Industrials | 12.4 | % | |||
Financials | 10.3 | % | |||
Materials | 8.4 | % | |||
Consumer Staples | 7.0 | % | |||
Communication Services | 4.7 | % | |||
Health Care | 3.9 | % | |||
Real Estate | 3.2 | % | |||
Utilities | 2.7 | % | |||
Energy | 0.5 | % | |||
Other Assets and Liabilities | 0.2 | % |
NOTES TO SCHEDULE OF INVESTMENTS | ||||||||
ADR | - | American Depositary Receipt | ||||||
GDR | - | Global Depositary Receipt |
†Category is less than 0.05% of total net assets.
(1)Non-income producing.
See Notes to Financial Statements.
13
Statement of Assets and Liabilities |
NOVEMBER 30, 2020 | |||||
Assets | |||||
Investment securities, at value (cost of $5,446,004) | $ | 7,397,201 | |||
Foreign currency holdings, at value (cost of $66,688) | 66,688 | ||||
Receivable for capital shares sold | 16,806 | ||||
Dividends and interest receivable | 10,689 | ||||
Other assets | 581 | ||||
7,491,965 | |||||
Liabilities | |||||
Disbursements in excess of demand deposit cash | 10,908 | ||||
Payable for investments purchased | 37,586 | ||||
Payable for capital shares redeemed | 2,290 | ||||
Accrued management fees | 8,123 | ||||
Distribution and service fees payable | 328 | ||||
Accrued foreign taxes | 19,342 | ||||
78,577 | |||||
Net Assets | $ | 7,413,388 | |||
Net Assets Consist of: | |||||
Capital (par value and paid-in surplus) | $ | 5,198,358 | |||
Distributable earnings | 2,215,030 | ||||
$ | 7,413,388 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | |||||||||
Investor Class, $0.01 Par Value | $2,983,758 | 209,735 | $14.23 | ||||||||
I Class, $0.01 Par Value | $3,932,220 | 275,474 | $14.27 | ||||||||
A Class, $0.01 Par Value | $206,355 | 14,567 | $14.17* | ||||||||
C Class, $0.01 Par Value | $8,326 | 600 | $13.88 | ||||||||
R Class, $0.01 Par Value | $267,708 | 19,003 | $14.09 | ||||||||
R6 Class, $0.01 Par Value | $15,021 | 1,050 | $14.31 |
*Maximum offering price $15.03 (net asset value divided by 0.9425).
See Notes to Financial Statements.
14
Statement of Operations |
YEAR ENDED NOVEMBER 30, 2020 | |||||
Investment Income (Loss) | |||||
Income: | |||||
Dividends (net of foreign taxes withheld of $18,229) | $ | 174,647 | |||
Securities lending, net | 2,275 | ||||
Interest | 529 | ||||
177,451 | |||||
Expenses: | |||||
Management fees | 135,611 | ||||
Distribution and service fees: | |||||
A Class | 2,029 | ||||
C Class | 6,266 | ||||
R Class | 1,681 | ||||
Directors' fees and expenses | 298 | ||||
Other expenses | 292 | ||||
146,177 | |||||
Net investment income (loss) | 31,274 | ||||
Realized and Unrealized Gain (Loss) | |||||
Net realized gain (loss) on: | |||||
Investment transactions (net of foreign tax expenses paid (refunded) of $503) | 645,918 | ||||
Foreign currency translation transactions | (20,450) | ||||
625,468 | |||||
Change in net unrealized appreciation (depreciation) on: | |||||
Investments (includes (increase) decrease in accrued foreign taxes of $(14,418)) | 510,932 | ||||
Translation of assets and liabilities in foreign currencies | 142 | ||||
511,074 | |||||
Net realized and unrealized gain (loss) | 1,136,542 | ||||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 1,167,816 |
See Notes to Financial Statements.
15
Statement of Changes in Net Assets |
YEARS ENDED NOVEMBER 30, 2020 AND NOVEMBER 30, 2019 | ||||||||
Increase (Decrease) in Net Assets | November 30, 2020 | November 30, 2019 | ||||||
Operations | ||||||||
Net investment income (loss) | $ | 31,274 | $ | 33,440 | ||||
Net realized gain (loss) | 625,468 | (305,445) | ||||||
Change in net unrealized appreciation (depreciation) | 511,074 | 1,379,222 | ||||||
Net increase (decrease) in net assets resulting from operations | 1,167,816 | 1,107,217 | ||||||
Distributions to Shareholders | ||||||||
From earnings: | ||||||||
Investor Class | (18,004) | (211,250) | ||||||
I Class | (14,053) | (47,717) | ||||||
A Class | (971) | (42,563) | ||||||
C Class | — | (41,460) | ||||||
R Class | — | (13,422) | ||||||
R6 Class | (1,053) | (8,507) | ||||||
Decrease in net assets from distributions | (34,081) | (364,919) | ||||||
Capital Share Transactions | ||||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | (2,886,183) | (1,788,460) | ||||||
Net increase (decrease) in net assets | (1,752,448) | (1,046,162) | ||||||
Net Assets | ||||||||
Beginning of period | 9,165,836 | 10,211,998 | ||||||
End of period | $ | 7,413,388 | $ | 9,165,836 |
See Notes to Financial Statements.
16
Notes to Financial Statements |
NOVEMBER 30, 2020
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, I Class, A Class, C Class, R Class and 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.
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 (NAV) 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 NAV 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 NAV 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
17
Directors, or its delegate, deems appropriate. 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. Securities lending income is net of fees and rebates earned by the lending agent for its services.
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.
Segregated Assets — In accordance with the 1940 Act, the fund segregates assets on its books and records to cover certain types of investment securities and other financial instruments. ACIM monitors, on a daily basis, the securities segregated to ensure the fund designates a sufficient amount of liquid assets, marked-to-market daily. The fund may also receive assets or be required to pledge assets at the custodian bank or with a broker for collateral requirements.
Income Tax Status — It is the fund’s policy to distribute substantially all net investment income and net realized gains to shareholders and to otherwise qualify as a regulated investment company under provisions of the Internal Revenue Code. Accordingly, no provision has been made for income taxes. The fund files U.S. federal, state, local and non-U.S. tax returns as applicable. The fund's tax returns are subject to examination by the relevant taxing authority until expiration of the applicable statute of limitations, which is generally three years from the date of filing but can be longer in certain jurisdictions. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination and for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Multiple Class — All shares of the fund represent an equal pro rata interest in the net assets of the class to which such shares belong, and have identical voting, dividend, liquidation and other rights and the same terms and conditions, except for class specific expenses and exclusive rights to vote on matters affecting only individual classes. Income, non-class specific expenses, and realized and unrealized capital gains and losses of the fund are allocated to each class of shares based on their relative net assets.
18
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).
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.
Securities Lending — Securities are lent to qualified financial institutions and brokers. State Street Bank & Trust Co. serves as securities lending agent to the fund pursuant to a Securities Lending Agreement. The lending of securities exposes the fund to risks such as: the borrowers may fail to return the loaned securities, the borrowers may not be able to provide additional collateral, the fund may experience delays in recovery of the loaned securities or delays in access to collateral, or the fund may experience losses related to the investment collateral. To minimize certain risks, loan counterparties pledge collateral in the form of cash and/or securities. The lending agent has agreed to indemnify the fund in the case of default of any securities borrowed. Cash collateral received is invested in the State Street Navigator Securities Lending Government Money Market Portfolio, a money market mutual fund registered under the 1940 Act. The loans may also be secured by U.S. government securities in an amount at least equal to the market value of the securities loaned, plus accrued interest and dividends, determined on a daily basis and adjusted accordingly. By lending securities, the fund seeks to increase its net investment income through the receipt of interest and fees. Such income is reflected separately within the Statement of Operations. The value of loaned securities and related collateral outstanding at period end, if any, are shown on a gross basis within the Schedule of Investments and Statement of Assets and Liabilities.
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 ACIM will pay all expenses of managing and operating the fund, except brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), extraordinary expenses, and expenses incurred in connection with the provision of shareholder services and distribution services under a plan adopted pursuant to Rule 12b-1 under the 1940 Act. The fee is computed and accrued daily based on each class's daily net assets and paid monthly in arrears. The difference in the fee among the classes is a result of their separate arrangements for non-Rule 12b-1 shareholder services. It is not the result of any difference in advisory or custodial fees or other expenses related to the management of the fund’s assets, which do not vary by class. Effective August 1, 2020, the investment advisor decreased the annual management fee by 0.21%.
The annual management fee and the effective annual management fee for each class for the period ended November 30, 2020 are as follows:
Annual Management Fee* | Effective Annual Management Fee | |||||||
Investor Class | 1.39% | 1.53% | ||||||
I Class | 1.19% | 1.33% | ||||||
A Class | 1.39% | 1.53% | ||||||
C Class | 1.39% | 1.53% | ||||||
R Class | 1.39% | 1.53% | ||||||
R6 Class | 1.04% | 1.18% |
*Prior to August 1, 2020, the annual management fee was 1.60% for Investor Class, A Class, C Class and R Class, 1.40% for I Class and 1.25% for R6 Class.
19
Distribution and Service Fees — The Board of Directors has adopted a separate Master Distribution and Individual Shareholder Services Plan for each of the A Class, C Class and R Class (collectively the plans), pursuant to Rule 12b-1 of the 1940 Act. The plans provide that the A Class will pay ACIS an annual distribution and service fee of 0.25%. The plans provide that the C Class will pay ACIS an annual distribution and service fee of 1.00%, of which 0.25% is paid for individual shareholder services and 0.75% is paid for distribution services. The plans provide that the R Class will pay ACIS an annual distribution and service fee of 0.50%. The fees are computed and accrued daily based on each class’s daily net assets and paid monthly in arrears. The fees are used to pay financial intermediaries for distribution and individual shareholder services. Fees incurred under the plans during the period ended November 30, 2020 are detailed in the Statement of Operations.
Directors' Fees and Expenses — The Board of Directors is responsible for overseeing the investment advisor’s management and operations of the fund. The directors receive detailed information about the fund and its investment advisor regularly throughout the year, and meet at least quarterly with management of the investment advisor to review reports about fund operations. The fund’s officers do not receive compensation from the fund.
Interfund Transactions — The fund may enter into security transactions with other American Century Investments funds and other client accounts of the investment advisor, in accordance with the 1940 Act rules and procedures adopted by the Board of Directors. The rules and procedures require, among other things, that these transactions be effected at the independent current market price of the security. There were no interfund transactions during the period.
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the period ended November 30, 2020 were $5,443,215 and $8,133,477, respectively.
20
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Year ended November 30, 2020 | Year ended November 30, 2019 | |||||||||||||
Shares | Amount | Shares | Amount | |||||||||||
Investor Class/Shares Authorized | 40,000,000 | 40,000,000 | ||||||||||||
Sold | 120,640 | $ | 1,518,746 | 135,086 | $ | 1,622,100 | ||||||||
Issued in reinvestment of distributions | 1,277 | 16,531 | 19,297 | 210,336 | ||||||||||
Redeemed | (292,724) | (3,710,859) | (281,199) | (3,374,805) | ||||||||||
(170,807) | (2,175,582) | (126,816) | (1,542,369) | |||||||||||
I Class/Shares Authorized | 30,000,000 | 30,000,000 | ||||||||||||
Sold | 146,395 | 1,806,093 | 120,968 | 1,458,880 | ||||||||||
Issued in reinvestment of distributions | 1,084 | 14,053 | 4,370 | 47,717 | ||||||||||
Redeemed | (61,929) | (811,084) | (46,951) | (576,122) | ||||||||||
85,550 | 1,009,062 | 78,387 | 930,475 | |||||||||||
A Class/Shares Authorized | 30,000,000 | 30,000,000 | ||||||||||||
Sold | 2,814 | 32,167 | 11,855 | 129,000 | ||||||||||
Issued in reinvestment of distributions | 75 | 971 | 3,908 | 42,563 | ||||||||||
Redeemed | (56,705) | (766,988) | (51,108) | (623,555) | ||||||||||
(53,816) | (733,850) | (35,345) | (451,992) | |||||||||||
C Class/Shares Authorized | 30,000,000 | 30,000,000 | ||||||||||||
Sold | 747 | 10,204 | — | — | ||||||||||
Issued in reinvestment of distributions | — | — | 3,835 | 41,460 | ||||||||||
Redeemed | (55,780) | (740,656) | (48,347) | (585,000) | ||||||||||
(55,033) | (730,452) | (44,512) | (543,540) | |||||||||||
R Class/Shares Authorized | 20,000,000 | 20,000,000 | ||||||||||||
Sold | 12,202 | 145,359 | 8,751 | 103,794 | ||||||||||
Issued in reinvestment of distributions | — | — | 1,235 | 13,422 | ||||||||||
Redeemed | (20,231) | (261,806) | (15,170) | (184,757) | ||||||||||
(8,029) | (116,447) | (5,184) | (67,541) | |||||||||||
R6 Class/Shares Authorized | 20,000,000 | 20,000,000 | ||||||||||||
Issued in reinvestment of distributions | 81 | 1,053 | 778 | 8,507 | ||||||||||
Redeemed | (10,463) | (139,967) | (9,894) | (122,000) | ||||||||||
(10,382) | (138,914) | (9,116) | (113,493) | |||||||||||
Net increase (decrease) | (212,517) | $ | (2,886,183) | (142,586) | $ | (1,788,460) |
21
6. Fair Value Measurements
The fund’s investments valuation process is based on several considerations and may use multiple inputs to determine the fair value of the investments held by the fund. In conformity with accounting principles generally accepted in the United States of America, the inputs used to determine a valuation are classified into three broad levels.
•Level 1 valuation inputs consist of unadjusted quoted prices in an active market for identical investments.
•Level 2 valuation inputs consist of direct or indirect observable market data (including quoted prices for comparable investments, evaluations of subsequent market events, interest rates, prepayment speeds, credit risk, etc.). These inputs also consist of quoted prices for identical investments initially expressed in local currencies that are adjusted through translation into U.S. dollars.
•Level 3 valuation inputs consist of unobservable data (including a fund’s own assumptions).
The level classification is based on the lowest level input that is significant to the fair valuation measurement. The valuation inputs are not necessarily an indication of the risks associated with investing in these securities or other financial instruments.
The following is a summary of the level classifications as of period end. The Schedule of Investments provides additional information on the fund’s portfolio holdings.
Level 1 | Level 2 | Level 3 | |||||||||
Assets | |||||||||||
Investment Securities | |||||||||||
Common Stocks | |||||||||||
Argentina | $ | 95,472 | — | — | |||||||
Brazil | 67,944 | $ | 676,926 | — | |||||||
Chile | 38,711 | — | — | ||||||||
China | 185,934 | 823,913 | — | ||||||||
Mexico | 164,160 | — | — | ||||||||
Russia | 93,303 | 98,520 | — | ||||||||
Other Countries | — | 5,151,643 | — | ||||||||
Warrants | — | 675 | — | ||||||||
$ | 645,524 | $ | 6,751,677 | — |
7. Risk Factors
The value of the fund’s shares will go up and down, sometimes rapidly or unpredictably, based on the performance of the securities owned by the fund and other factors generally affecting the securities market. Market risks, including political, regulatory, economic and social developments, can affect the value of the fund’s investments. Natural disasters, public health emergencies, terrorism and other unforeseeable events may lead to increased market volatility and may have adverse long-term effects on world economies and markets generally.
There are certain risks involved in investing in foreign securities. These risks include those resulting from political events (such as civil unrest, national elections and imposition of exchange controls), social and economic events (such as labor strikes and rising inflation), and natural disasters. Securities of foreign issuers may be less liquid and more volatile. Investing in emerging markets or a significant portion of assets in one country or region 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.
22
8. Federal Tax Information
On December 22, 2020, the fund declared and paid a per-share distribution from net realized gains to
shareholders of record on December 21, 2020 of $0.6077 for the Investor Class, I Class, A Class, C
Class, R Class and R6 Class.
The tax character of distributions paid during the years ended November 30, 2020 and November 30, 2019 were as follows:
2020 | 2019 | |||||||
Distributions Paid From | ||||||||
Ordinary income | $ | 20,197 | $ | 61 | ||||
Long-term capital gains | $ | 13,884 | $ | 364,858 |
The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
As of period end, the federal tax cost of investments and the components of distributable earnings on a tax-basis were as follows:
Federal tax cost of investments | $ | 5,485,644 | |||
Gross tax appreciation of investments | $ | 2,059,592 | |||
Gross tax depreciation of investments | (148,035) | ||||
Net tax appreciation (depreciation) of investments | 1,911,557 | ||||
Net tax appreciation (depreciation) on translation of assets and liabilities in foreign currencies | (19,734) | ||||
Net tax appreciation (depreciation) | $ | 1,891,823 | |||
Undistributed ordinary income | — | ||||
Accumulated long-term gains | $ | 323,207 |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales.
23
Financial Highlights |
For a Share Outstanding Throughout the Years Ended 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 | |||||||||||||||||||||||||||||||||||||||||
2020 | $12.52 | 0.04 | 1.72 | 1.76 | (0.05) | — | (0.05) | $14.23 | 14.07% | 1.54% | 0.37% | 60% | $2,984 | ||||||||||||||||||||||||||||
2019 | $11.68 | 0.05 | 1.20 | 1.25 | — | (0.41) | (0.41) | $12.52 | 11.36% | 1.61% | 0.43% | 67% | $4,764 | ||||||||||||||||||||||||||||
2018 | $13.66 | 0.04 | (1.86) | (1.82) | (0.14) | (0.02) | (0.16) | $11.68 | (13.59)% | 1.60% | 0.31% | 75% | $5,924 | ||||||||||||||||||||||||||||
2017 | $10.45 | (0.03) | 3.33 | 3.30 | (0.09) | — | (0.09) | $13.66 | 31.85% | 1.61% | (0.16)% | 49% | $6,884 | ||||||||||||||||||||||||||||
2016(3) | $10.00 | 0.04 | 0.41 | 0.45 | — | — | — | $10.45 | 4.50% | 1.60%(4) | 0.59%(4) | 51% | $2,373 | ||||||||||||||||||||||||||||
I Class | |||||||||||||||||||||||||||||||||||||||||
2020 | $12.56 | 0.07 | 1.71 | 1.78 | (0.07) | — | (0.07) | $14.27 | 14.25% | 1.34% | 0.57% | 60% | $3,932 | ||||||||||||||||||||||||||||
2019 | $11.69 | 0.07 | 1.21 | 1.28 | — | (0.41) | (0.41) | $12.56 | 11.52% | 1.41% | 0.63% | 67% | $2,386 | ||||||||||||||||||||||||||||
2018 | $13.68 | 0.06 | (1.86) | (1.80) | (0.17) | (0.02) | (0.19) | $11.69 | (13.39)% | 1.40% | 0.51% | 75% | $1,304 | ||||||||||||||||||||||||||||
2017 | $10.46 | 0.01 | 3.32 | 3.33 | (0.11) | — | (0.11) | $13.68 | 32.18% | 1.41% | 0.04% | 49% | $829 | ||||||||||||||||||||||||||||
2016(3) | $10.00 | 0.05 | 0.41 | 0.46 | — | — | — | $10.46 | 4.60% | 1.40%(4) | 0.79%(4) | 51% | $628 | ||||||||||||||||||||||||||||
A Class | |||||||||||||||||||||||||||||||||||||||||
2020 | $12.47 | 0.02 | 1.69 | 1.71 | (0.01) | — | (0.01) | $14.17 | 13.76% | 1.79% | 0.12% | 60% | $206 | ||||||||||||||||||||||||||||
2019 | $11.66 | 0.02 | 1.20 | 1.22 | — | (0.41) | (0.41) | $12.47 | 11.11% | 1.86% | 0.18% | 67% | $853 | ||||||||||||||||||||||||||||
2018 | $13.64 | 0.01 | (1.86) | (1.85) | (0.11) | (0.02) | (0.13) | $11.66 | (13.82)% | 1.85% | 0.06% | 75% | $1,209 | ||||||||||||||||||||||||||||
2017 | $10.43 | (0.04) | 3.31 | 3.27 | (0.06) | — | (0.06) | $13.64 | 31.57% | 1.86% | (0.41)% | 49% | $1,956 | ||||||||||||||||||||||||||||
2016(3) | $10.00 | 0.02 | 0.41 | 0.43 | — | — | — | $10.43 | 4.30% | 1.85%(4) | 0.34%(4) | 51% | $1,043 |
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) | |||||||||||||||||||||||||||||
C Class | |||||||||||||||||||||||||||||||||||||||||
2020 | $12.29 | (0.07) | 1.66 | 1.59 | — | — | — | $13.88 | 12.94% | 2.54% | (0.63)% | 60% | $8 | ||||||||||||||||||||||||||||
2019 | $11.58 | (0.07) | 1.19 | 1.12 | — | (0.41) | (0.41) | $12.29 | 10.20% | 2.61% | (0.57)% | 67% | $684 | ||||||||||||||||||||||||||||
2018 | $13.55 | (0.10) | (1.85) | (1.95) | —(5) | (0.02) | (0.02) | $11.58 | (14.41)% | 2.60% | (0.69)% | 75% | $1,160 | ||||||||||||||||||||||||||||
2017 | $10.38 | (0.13) | 3.30 | 3.17 | — | — | — | $13.55 | 30.54% | 2.61% | (1.16)% | 49% | $1,355 | ||||||||||||||||||||||||||||
2016(3) | $10.00 | (0.03) | 0.41 | 0.38 | — | — | — | $10.38 | 3.80% | 2.60%(4) | (0.41)%(4) | 51% | $1,038 | ||||||||||||||||||||||||||||
R Class | |||||||||||||||||||||||||||||||||||||||||
2020 | $12.42 | (0.01) | 1.68 | 1.67 | — | — | — | $14.09 | 13.54% | 2.04% | (0.13)% | 60% | $268 | ||||||||||||||||||||||||||||
2019 | $11.64 | (0.01) | 1.20 | 1.19 | — | (0.41) | (0.41) | $12.42 | 10.68% | 2.11% | (0.07)% | 67% | $336 | ||||||||||||||||||||||||||||
2018 | $13.62 | (0.03) | (1.86) | (1.89) | (0.07) | (0.02) | (0.09) | $11.64 | (13.98)% | 2.10% | (0.19)% | 75% | $375 | ||||||||||||||||||||||||||||
2017 | $10.41 | (0.07) | 3.32 | 3.25 | (0.04) | — | (0.04) | $13.62 | 31.30% | 2.11% | (0.66)% | 49% | $331 | ||||||||||||||||||||||||||||
2016(3) | $10.00 | 0.01 | 0.40 | 0.41 | — | — | — | $10.41 | 4.10% | 2.10%(4) | 0.09%(4) | 51% | $212 | ||||||||||||||||||||||||||||
R6 Class | |||||||||||||||||||||||||||||||||||||||||
2020 | $12.59 | 0.10 | 1.71 | 1.81 | (0.09) | — | (0.09) | $14.31 | 14.47% | 1.19% | 0.72% | 60% | $15 | ||||||||||||||||||||||||||||
2019 | $11.70 | 0.09 | 1.21 | 1.30 | — | (0.41) | (0.41) | $12.59 | 11.68% | 1.26% | 0.78% | 67% | $144 | ||||||||||||||||||||||||||||
2018 | $13.69 | 0.08 | (1.86) | (1.78) | (0.19) | (0.02) | (0.21) | $11.70 | (13.25)% | 1.25% | 0.66% | 75% | $240 | ||||||||||||||||||||||||||||
2017 | $10.47 | 0.03 | 3.31 | 3.34 | (0.12) | — | (0.12) | $13.69 | 32.35% | 1.26% | 0.19% | 49% | $277 | ||||||||||||||||||||||||||||
2016(3) | $10.00 | 0.06 | 0.41 | 0.47 | — | — | — | $10.47 | 4.70% | 1.25%(4) | 0.94%(4) | 51% | $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)April 7, 2016 (fund inception) through November 30, 2016.
(4)Annualized.
(5)Per-share amount was less than $0.005.
See Notes to Financial Statements.
Report of Independent Registered Public Accounting Firm |
To the Shareholders and the Board of Directors of American Century World Mutual Funds, Inc.:
Opinion on the Financial Statements and Financial Highlights
We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of Emerging Markets Small Cap Fund (the “Fund”), one of the funds constituting the American Century World Mutual Funds, Inc., as of November 30, 2020, the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the years ended November 30, 2020, 2019, 2018, 2017 and for the period April 7, 2016 (fund inception) through November 30, 2016, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of Emerging Markets Small Cap Fund of the American Century World Mutual Funds, Inc. as of November 30, 2020, and the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the years ended November 30, 2020, 2019, 2018, 2017 and for the period April 7, 2016 (fund inception) through November 30, 2016, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on the Fund’s financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. Our procedures included confirmation of securities owned as of November 30, 2020, by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
DELOITTE & TOUCHE LLP
Kansas City, Missouri
January 19, 2021
We have served as the auditor of one or more American Century investment companies since 1997.
27
Management |
The Board of Directors
The individuals listed below serve as directors of the funds. Each director will continue to serve in this capacity until death, retirement, resignation or removal from office. The board has adopted a mandatory retirement age for directors who are not “interested persons,” as that term is defined in the Investment Company Act (independent directors). Independent directors shall retire by December 31 of the year in which they reach their 75th birthday.
Mr. Thomas is an “interested person” because he currently serves as President and Chief Executive Officer of American Century Companies, Inc. (ACC), the parent company of American Century Investment Management, Inc. (ACIM or the advisor). The other directors (more than three-fourths of the total number) are independent. They are not employees, directors or officers of, and have no financial interest in, ACC or any of its wholly owned, direct or indirect, subsidiaries, including ACIM, American Century Investment Services, Inc. (ACIS) and American Century Services, LLC (ACS), and they do not have any other affiliations, positions or relationships that would cause them to be considered “interested persons” under the Investment Company Act. The directors serve in this capacity for seven (in the case of Jonathan S. Thomas, 16; and Stephen E. Yates, 8) registered investment companies in the American Century Investments family of funds.
The following table presents additional information about the directors. The mailing address for each director is 4500 Main Street, Kansas City, Missouri 64111.
Name (Year of Birth) | Position(s) Held with Funds | Length of Time Served | Principal Occupation(s) During Past 5 Years | Number of American Century Portfolios Overseen by Director | Other Directorships Held During Past 5 Years | ||||||||||||
Independent Directors | |||||||||||||||||
Thomas W. Bunn (1953) | Director | Since 2017 | Retired | 62 | SquareTwo Financial; Barings (formerly Babson Capital Funds Trust) (2013 to 2016) | ||||||||||||
Chris H. Cheesman (1962) | Director | Since 2019 | Retired. Senior Vice President & Chief Audit Executive, AllianceBernstein (1999 to 2018) | 62 | None | ||||||||||||
Barry Fink (1955) | Director | Since 2012 (independent since 2016) | Retired | 62 | None | ||||||||||||
Rajesh K. Gupta (1960) | Director | Since 2019 | Partner Emeritus, SeaCrest Investment Management and SeaCrest Wealth Management (2019 to Present); Chief Executive Officer and Chief Investment Officer, SeaCrest Investment Management (2006 to 2019); Chief Executive Officer and Chief Investment Officer, SeaCrest Wealth Management (2008 to 2019) | 62 | None |
28
Name (Year of Birth) | Position(s) Held with Funds | Length of Time Served | Principal Occupation(s) During Past 5 Years | Number of American Century Portfolios Overseen by Director | Other Directorships Held During Past 5 Years | ||||||||||||
Independent Directors | |||||||||||||||||
Lynn Jenkins (1963) | Director | Since 2019 | Consultant, LJ Strategies (2019 to present); United States Representative, U.S. House of Representatives (2009 to 2018) | 62 | MGP Ingredients, Inc. | ||||||||||||
Jan M. Lewis (1957) | Director | Since 2011 | Retired | 62 | None | ||||||||||||
John R. Whitten (1946) | Director | Since 2008 | Retired | 62 | Onto Innovation Inc. (2019 to 2020); Rudolph Technologies, Inc. (2006 to 2019) | ||||||||||||
Stephen E. Yates (1948) | Director and Chairman of the Board | Since 2012 (Chairman since 2018) | Retired | 87 | None | ||||||||||||
Interested Director | |||||||||||||||||
Jonathan S. Thomas (1963) | Director | Since 2007 | President and Chief Executive Officer, ACC (2007 to present). Also serves as Chief Executive Officer, ACS; Executive Vice President, ACIM; Director, ACC, ACIM and other ACC subsidiaries | 125 | None |
The Statement of Additional Information has additional information about the fund's directors and is available without charge, upon request, by calling 1-800-345-2021.
29
Officers
The following table presents certain information about the executive officers of the funds. Each officer serves as an officer for each of the 16 (in the case of Robert J. Leach, 15) investment companies in the American Century family of funds. No officer is compensated for his or her service as an officer of the funds. The listed officers are interested persons of the funds and are appointed or re-appointed on an annual basis. The mailing address for each officer listed below is 4500 Main Street, Kansas City, Missouri 64111.
Name (Year of Birth) | Offices with the Funds | Principal Occupation(s) During the Past Five Years | ||||||
Patrick Bannigan (1965) | President since 2019 | Executive Vice President and Director, ACC (2012 to present); Chief Financial Officer, Chief Accounting Officer and Treasurer, ACC (2015 to present). Also serves as President, ACS; Vice President, ACIM; Chief Financial Officer, Chief Accounting Officer and/or Director, ACIM, ACS and other ACC subsidiaries | ||||||
R. Wes Campbell (1974) | Chief Financial Officer and Treasurer since 2018 | Vice President, ACS, (2020 to present); Investment Operations and Investment Accounting, ACS (2000 to present) | ||||||
Amy D. Shelton (1964) | Chief Compliance Officer and Vice President since 2014 | Chief Compliance Officer, American Century funds, (2014 to present); Chief Compliance Officer, ACIM (2014 to present); Chief Compliance Officer, ACIS (2009 to present). Also serves as Vice President, ACIS | ||||||
Charles A. Etherington (1957) | General Counsel since 2007 and Senior Vice President since 2006 | Attorney, ACC (1994 to present); Vice President, ACC (2005 to present); General Counsel, ACC (2007 to present). Also serves as General Counsel, ACIM, ACS, ACIS and other ACC subsidiaries; and Senior Vice President, ACIM and ACS | ||||||
C. Jean Wade (1964) | Vice President since 2012 | Senior Vice President, ACS (2017 to present); Vice President, ACS (2000 to 2017) | ||||||
Robert J. Leach (1966) | Vice President since 2006 | Vice President, ACS (2000 to present) | ||||||
David H. Reinmiller (1963) | Vice President since 2000 | Attorney, ACC (1994 to present). Also serves as Vice President, ACIM and ACS | ||||||
Ward D. Stauffer (1960) | Secretary since 2005 | Attorney, ACC (2003 to present) |
30
Approval of Management Agreement |
At a meeting held on June 24, 2020, the Fund’s Board of Directors (the "Board") unanimously approved the renewal of the 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, contracts for investment advisory services are required to be reviewed, evaluated, and approved by a majority of a fund’s directors (the “Directors”), including a majority of the independent Directors, each year.
Prior to its consideration of the renewal of the management agreement, the Directors requested and reviewed extensive data and information compiled by the Advisor and certain independent providers of evaluation data concerning the Fund and the services provided to the Fund by the Advisor. This review was in addition to the oversight and evaluation undertaken by the Board and its committees on a continual basis and the information received was supplemental to the extensive information that the Board and its committees receive and consider throughout the year.
In connection with its consideration of the renewal of the management agreement, the Board’s review and evaluation of the services provided by the Advisor included, but was not limited to, the following:
•the nature, extent, and quality of investment management, shareholder services, and other services provided and to be provided to the Fund;
•the wide range of other programs and services provided and to be provided to the Fund and its shareholders on a routine and non-routine basis;
•the Fund’s investment performance, including data comparing the Fund's performance to appropriate benchmarks and/or a peer group of other mutual funds with similar investment objectives and strategies;
•the cost of owning the Fund compared to the cost of owning similar funds;
•the compliance policies, procedures, and regulatory experience of the Advisor and the Fund's service providers;
•the Advisor’s strategic plans;
•the Advisor’s business continuity plans and specifically its response to the COVID-19 pandemic;
•financial data showing the cost of services provided to the Fund, the profitability of the Fund to the Advisor, and the overall profitability of the Advisor;
•possible economies of scale associated with the Advisor’s management of the Fund and other accounts;
•services provided and charges to the Advisor's other investment management clients;
•acquired fund fees and expenses;
•payments and practices in connection with financial intermediaries holding shares of the Fund and the services provided by intermediaries in connection therewith; and
•possible collateral benefits to the Advisor from the management of the Fund.
The Board held two meetings to consider the renewal. The independent Directors also met in private session three times to review and discuss the information provided in response to their request. The independent Directors held active discussions with the Advisor regarding the renewal of the management agreement, requesting supplemental information, and reviewing information provided by the Advisor in response thereto. The independent Directors had the benefit of the advice of their independent counsel throughout the process.
Factors Considered
The Directors considered all of the information provided by the Advisor, the independent data providers, and 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
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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. In deciding to renew the management agreement, the Board based its decision on a number of factors, including without limitation the following:
Nature, Extent and Quality of Services — Generally. Under the management agreement, the Advisor is responsible for providing or arranging for all services necessary for the operation of the Fund. The Board noted that the Advisor provides or arranges at its own expense a wide variety of services including without limitation the following:
•constructing and designing the Fund
•portfolio research and security selection
•initial capitalization/funding
•securities trading
•Fund administration
•custody of Fund assets
•daily valuation of the Fund’s portfolio
•shareholder servicing and transfer agency, including shareholder confirmations, recordkeeping, and communications
•legal services (except the independent Directors’ counsel)
•regulatory and portfolio compliance
•financial reporting
•marketing and distribution (except amounts paid by the Fund under Rule 12b-1 plans)
The Board noted that many of these services have expanded over time in terms of both quantity and complexity in response to shareholder demands, competition in the industry, changing distribution channels, and the changing regulatory environment.
Investment Management Services. The nature of the investment management services provided to the Fund is quite complex and allows Fund shareholders access to professional money management, instant diversification of their investments within an asset class, the opportunity to easily diversify among asset classes by investing in or exchanging among various American Century Investments funds, and liquidity. In evaluating investment performance, the Board expects the Advisor to manage the Fund in accordance with its investment objectives and approved strategies. Further, the Directors recognize that the Advisor has an obligation to monitor trading activities, and in particular to seek the best execution of fund trades, and to evaluate the use of and payment for research. In providing these services, the Advisor utilizes teams of investment professionals (portfolio managers, analysts, research assistants, and securities traders) who require extensive information technology, research, training, compliance, and other systems to conduct their business. The Board, directly and through its Fund Performance Review Committee, provides oversight of the investment performance process. It regularly reviews investment performance information for the Fund, together with comparative information for appropriate benchmarks and/or peer groups of similarly-managed funds, over different time horizons. The Directors also review investment performance information during the management agreement renewal process. If performance concerns are identified, the Fund receives special reviews until performance improves, during which the Board discusses with the Advisor the reasons for such results (e.g., market conditions, security selection) and any efforts being undertaken to improve performance. The Fund’s performance was above its benchmark for the one- and three-year periods reviewed by the Board. The Board found the investment management services provided by the Advisor to the Fund to be satisfactory and consistent with the management agreement.
Shareholder and Other Services. Under the management agreement, the Advisor provides the Fund with a comprehensive package of transfer agency, shareholder, and other services. The Board, directly and through its various committees, regularly reviews reports and evaluations of such services at its regular meetings. These reports include, but are not limited to, information regarding the operational efficiency and accuracy of the shareholder and transfer agency services
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provided, staffing levels, shareholder satisfaction, technology support (including cyber security), new products and services offered to Fund shareholders, securities trading activities, portfolio valuation services, auditing services, and legal and operational compliance activities. The Board found the services provided by the Advisor to the Fund under the management agreement to be competitive and of high quality.
COVID-19 Response. During 2020, much of the world experienced unprecedented change and challenges from the impacts of the rapidly evolving, worldwide spread of the COVID-19 virus. The Board evaluated the Advisor’s response to the COVID-19 pandemic and its impact on service to the Fund. The Board found that Fund shareholders have continued to receive the Advisor’s investment management and other services without disruption, and Advisor personnel have demonstrated great resiliency in providing those services. The Board, directly and through its Audit Committee, continues to monitor the impact of the pandemic and the response of each of the Fund’s service providers.
Costs of Services and Profitability. The Advisor provides detailed information concerning its cost of providing various services to the Fund, its profitability in managing the Fund (pre- and post-distribution), its overall profitability, and its financial condition. The Directors have reviewed with the Advisor the methodology used to prepare this financial information. This information is considered in evaluating the Advisor’s financial condition, its ability to continue to provide services under the management agreement, and the reasonableness of the current management fee. The Board concluded that the Advisor’s profits were reasonable in light of the services provided to the Fund.
Ethics. The Board generally considers the Advisor’s commitment to providing quality services to shareholders and to conducting its business ethically. They noted that the Advisor’s practices generally meet or exceed industry best practices.
Economies of Scale. The Board also reviewed information provided by the Advisor regarding the possible existence of economies of scale in connection with the management of the Fund. The Board concluded that economies of scale are difficult to measure and predict with precision, especially on a fund-by-fund basis. The Board concluded that the Advisor is appropriately sharing economies of scale, to the extent they exist, through its competitive fee structure, offering competitive fees from fund inception, and through reinvestment in its business, infrastructure, investment capabilities and initiatives to provide shareholders additional content and services.
Comparison to Other Funds’ Fees. The management agreement provides that the Fund pays the Advisor a single, all-inclusive (or unified) management fee for providing all services necessary for the management and operation of the Fund, other than brokerage expenses, expenses attributable to short sales, taxes, interest, extraordinary expenses, fees and expenses of the Fund’s independent Directors (including their independent legal counsel), and expenses incurred in connection with the provision of shareholder services and distribution services under a plan adopted pursuant to Rule 12b-1 under the Investment Company Act. 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 any applicable Rule 12b-1 distribution fees, all other components of the total fees charged by these other funds may be increased without shareholder approval. The Board believes the unified fee structure is a benefit to Fund shareholders because it clearly discloses to shareholders the cost of owning Fund shares, and, since 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 comparing the Fund’s unified fee to the total expense ratios of its peers. The unified fee charged to shareholders of the Fund was above the median of the total expense ratios of the Fund’s peer expense universe
33
and was within the range of its peer expense group. The Board and the Advisor agreed to a permanent change to the Fund's fee schedule that should have the effect of lowering the Fund's annual unified management fee by approximately 0.21% (e.g., the Investor Class unified fee will be reduced from 1.60% to 1.39%), beginning August 1, 2020. The Board concluded that the management fee paid by the Fund to the Advisor under the management agreement is reasonable in light of the services provided to the Fund.
Comparison to Fees and Services Provided to Other Clients of the Advisor. The Board also requested and received information from the Advisor concerning the nature of the services, fees, costs, and profitability of its advisory services to advisory clients other than the Fund. They observed that these varying types of client accounts require different services and involve different regulatory and entrepreneurial risks than the management of the Fund. The Board analyzed this information and concluded that the fees charged and services provided to the Fund were reasonable by comparison.
Payments to Intermediaries. The Directors also requested and received a description of payments made to intermediaries by the Fund and the Advisor and services provided in response thereto. These payments include various payments made by the Fund or the Advisor to different types of intermediaries and recordkeepers for distribution and service activities provided for the Fund. The Directors reviewed such information and received representations from the Advisor that all such payments by the Fund were made pursuant to the Fund's Rule 12b-1 Plan and that all such payments by the Advisor were made from the Advisor’s resources and reasonable profits. The Board found such payments to be reasonable in scope and purpose.
Collateral or “Fall-Out” Benefits Derived by the Advisor. The Board considered the possible existence of collateral benefits the Advisor may receive as a result of its relationship with the Fund. They concluded that the Advisor’s primary business is managing mutual funds and it generally does not use fund or shareholder information to generate profits in other lines of business, and therefore does not derive any significant collateral benefits from them. To the extent there are potential collateral benefits, the board has been advised and has taken this into consideration in its review of the management contract with the Fund. The Board noted that additional assets from other clients may offer the Advisor some benefit from increased leverage with service providers and counterparties. Additionally, the Advisor may receive proprietary research from broker-dealers that execute fund portfolio transactions, which the Board concluded is likely to benefit other clients of the Advisor, as well as Fund shareholders. The Board also determined that the Advisor is able to provide investment management services to certain clients other than the Fund, at least in part, due to its existing infrastructure built to serve the fund complex. The Board concluded that appropriate allocation methodologies had been employed to assign resources and the cost of those resources to these other clients.
Existing Relationship. The Board also considered whether there was any reason for not continuing the existing arrangement with the Advisor. In this regard, the Board was mindful of the potential disruptions of the Fund’s operations and various risks, uncertainties, and other effects that could occur as a result of a decision not to continue such relationship. In particular, the Board recognized that most shareholders have invested in the Fund on the strength of the Advisor’s industry standing and reputation and in the expectation that the Advisor will have a continuing role in providing advisory services to the Fund.
Conclusion of the Directors. As a result of this process, the Board, including all of the independent Directors, taking into account all of the factors discussed above and the information provided by the Advisor and others in connection with its review and throughout the year, determined that the management fee is fair and reasonable in light of the services provided and that the investment management agreement between the Fund and the Advisor should be renewed.
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Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain retirement accounts are subject to federal income tax withholding, unless you elect not to have withholding apply*. Tax will be withheld on the total amount withdrawn even though you may be receiving amounts that are not subject to withholding, such as nondeductible contributions. In such case, excess amounts of withholding could occur. You may adjust your withholding election so that a greater or lesser amount will be withheld.
If you don’t want us to withhold on this amount, you must notify us to not withhold the federal income tax. You may notify us in writing or in certain situations by telephone or through other electronic means. For systematic withdrawals, your withholding election will remain in effect until revoked or changed by filing a new election. You have the right to revoke your election at any time and change your withholding percentage for future distributions.
Remember, even if you elect not to have income tax withheld, you are liable for paying income tax on the taxable portion of your withdrawal. If you elect not to have income tax withheld or you don’t have enough income tax withheld, you may be responsible for payment of estimated tax. You may incur penalties under the estimated tax rules if your withholding and estimated tax payments are not sufficient. You can reduce or defer the income tax on a distribution by directly or indirectly rolling such distribution over to another IRA or eligible plan. You should consult your tax advisor for additional information.
State tax will be withheld if, at the time of your distribution, your address is within one of the mandatory withholding states and you have federal income tax withheld (or as otherwise required by state law). State taxes will be withheld from your distribution in accordance with the respective state rules.
*Some 403(b), 457 and qualified retirement plan distributions may be subject to 20% mandatory withholding, as they are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
A description of the policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund is available without charge, upon request, by calling 1-800-345-2021. It is also available on American Century Investments’ website at americancentury.com/proxy 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 americancentury.com/proxy. 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 as an exhibit to its reports on
Form N-PORT. The fund’s Form N-PORT reports are available on the SEC’s website at sec.gov.
The fund also makes its complete schedule of portfolio holdings for the most recent quarter of its
fiscal year available on its website at americancentury.com and, upon request, by calling
1-800-345-2021.
35
Other Tax Information
The following information is provided pursuant to provisions of the Internal Revenue Code.
The fund hereby designates up to the maximum amount allowable as qualified dividend income for
the fiscal year ended November 30, 2020.
The fund hereby designates $15,995, or up to the maximum amount allowable, as long-term
capital gain distributions (20% rate gain distributions) for the fiscal year ended November 30, 2020.
For the fiscal year ended November 30, 2020, the fund intends to pass through to shareholders
foreign source income of $191,645 and foreign taxes paid of $17,723, or up to the maximum
amount allowable, as a foreign tax credit. Foreign source income and foreign tax expense per
outstanding share on November 30, 2020 are $0.3682 and $0.0341, respectively.
The fund utilized earnings and profits of $2,111 distributed to shareholders on redemption of
shares as part of the dividends paid deduction (tax equalization).
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Notes |
37
Notes |
38
Notes |
39
Notes |
40
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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. | ||||||||
©2021 American Century Proprietary Holdings, Inc. All rights reserved. CL-ANN-91033 2101 |
![image171.jpg](https://capedge.com/proxy/N-CSR/0000872825-21-000006/image171.jpg)
Annual Report | |||||
November 30, 2020 | |||||
Focused Global Growth Fund | |||||
Investor Class (TWGGX) | |||||
I Class (AGGIX) | |||||
Y Class (AGYGX) | |||||
A Class (AGGRX) | |||||
C Class (AGLCX) | |||||
R Class (AGORX) | |||||
R5 Class (AGFGX) | |||||
R6 Class (AGGDX) |
Table of Contents |
President’s Letter | |||||
Performance | |||||
Portfolio Commentary | |||||
Fund Characteristics | |||||
Shareholder Fee Example | |||||
Schedule of Investments | |||||
Statement of Assets and Liabilities | |||||
Statement of Operations | |||||
Statement of Changes in Net Assets | |||||
Notes to Financial Statements | |||||
Financial Highlights | |||||
Report of Independent Registered Public Accounting Firm | |||||
Management | |||||
Approval of Management Agreement | |||||
Additional Information |
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 |
![image141.jpg](https://capedge.com/proxy/N-CSR/0000872825-21-000006/image141.jpg)
Dear Investor:
Thank you for reviewing this annual report for the period ended November 30, 2020. Annual reports help convey important information about fund returns, including market factors that affected performance. For additional investment insights, please visit americancentury.com.
Stocks Recovered from Pandemic-Fueled Sell-Off
In late 2019, broad market sentiment was generally upbeat. Dovish central banks in developed markets, modest inflation, improving economic and corporate earnings data, and progress on U.S.-China trade policy helped boost global growth outlooks. Against this backdrop, riskier assets generally remained in favor.
However, beginning in late February, the COVID-19 outbreak rapidly spread worldwide, halting most economic activity and triggering a deep global recession. Global stocks sold off sharply amid a widespread flight to safety. Quick and aggressive action from the Federal Reserve and other central banks and federal governments helped stabilize and restore confidence in the financial markets. By summer, declining coronavirus infection and death rates in many regions and the reopening of economies were positive influences. By the end of November, most data suggested economies were recovering. But at the same time, COVID-19 infection rates were rising in the U.S. and Europe, prompting new lockdown measures that threatened the economic recovery.
Overall, global stocks overcame the effects of the early 2020 sell-off to deliver solid gains for the 12-month period. Emerging markets stocks rallied and outperformed developed markets stocks, while growth stocks significantly outpaced value stocks worldwide.
Science Helps Steer the Return to Normal
The return to pre-pandemic life will take time and patience, but we are confident we will get there. The first COVID-19 vaccine is now approved and in limited distribution, and medical professionals continue to develop better treatment protocols. Until the vaccine is widely available, investors likely will face periods of outbreak-related disruptions, economic uncertainty and heightened market volatility. These influences can be unsettling, but they tend to be temporary.
We appreciate your confidence in us during these extraordinary times. Our firm has a long history of helping clients weather unpredictable markets, and we’re confident we will continue to meet today’s challenges.
Sincerely,
![image231.jpg](https://capedge.com/proxy/N-CSR/0000872825-21-000006/image231.jpg)
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
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Performance |
Total Returns as of November 30, 2020 | ||||||||||||||||||||
Average Annual Returns | ||||||||||||||||||||
Ticker Symbol | 1 year | 5 years | 10 years | Since Inception | Inception Date | |||||||||||||||
Investor Class | TWGGX | 27.02% | 14.16% | 12.16% | — | 12/1/98 | ||||||||||||||
MSCI ACWI Index | — | 15.01% | 10.83% | 9.40% | — | — | ||||||||||||||
I Class | AGGIX | 27.21% | 14.38% | 12.39% | — | 8/1/00 | ||||||||||||||
Y Class | AGYGX | 27.48% | — | — | 18.42% | 4/10/17 | ||||||||||||||
A Class | AGGRX | 2/5/99 | ||||||||||||||||||
No sales charge | 26.66% | 13.87% | 11.88% | — | ||||||||||||||||
With sales charge | 19.36% | 12.52% | 11.22% | — | ||||||||||||||||
C Class | AGLCX | 25.84% | 13.03% | 11.05% | — | 3/1/02 | ||||||||||||||
R Class | AGORX | 26.34% | 13.58% | 11.59% | — | 7/29/05 | ||||||||||||||
R5 Class | AGFGX | 27.21% | — | — | 18.24% | 4/10/17 | ||||||||||||||
R6 Class | AGGDX | 27.44% | 14.56% | — | 12.77% | 7/26/13 |
Average annual returns since inception are presented when ten years of performance history is not available.
Sales charges include initial sales charges and contingent deferred sales charges (CDSCs), as applicable. A Class shares have a 5.75% maximum initial sales charge and may be subject to a maximum CDSC of 1.00%. C Class shares redeemed within 12 months of purchase are subject to a maximum CDSC of 1.00%. The SEC requires that mutual funds provide performance information net of maximum sales charges in all cases where charges could be applied.
Data presented reflect past performance. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance shown. Total returns for periods less than one year are not annualized. Investment return and principal value will fluctuate, and redemption value may be more or less than original cost. Data assumes reinvestment of dividends and capital gains, and none of the charts reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. To obtain performance data current to the most recent month end, please call 1-800-345-2021 or visit americancentury.com. For additional information about the fund, please consult the prospectus.
3
Growth of $10,000 Over 10 Years | ||
$10,000 investment made November 30, 2010 | ||
Performance for other share classes will vary due to differences in fee structure. |
![chart-4eede56155314d7b9da1.jpg](https://capedge.com/proxy/N-CSR/0000872825-21-000006/chart-4eede56155314d7b9da1.jpg)
Value on November 30, 2020 | |||||
Investor Class — $31,534 | |||||
MSCI ACWI Index — $24,570 | |||||
Total Annual Fund Operating Expenses | |||||||||||||||||||||||
Investor Class | I Class | Y Class | A Class | C Class | R Class | R5 Class | R6 Class | ||||||||||||||||
1.07% | 0.87% | 0.72% | 1.32% | 2.07% | 1.57% | 0.87% | 0.72% |
The total annual fund operating expenses shown is as stated in the fund’s prospectus current as of the date of this report. The prospectus may vary from the expense ratio shown elsewhere in this report because it is based on a different time period, includes acquired fund fees and expenses, and, if applicable, does not include fee waivers or expense reimbursements.
Data presented reflect past performance. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance shown. Total returns for periods less than one year are not annualized. Investment return and principal value will fluctuate, and redemption value may be more or less than original cost. Data assumes reinvestment of dividends and capital gains, and none of the charts reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. To obtain performance data current to the most recent month end, please call 1-800-345-2021 or visit americancentury.com. For additional information about the fund, please consult the prospectus.
4
Portfolio Commentary |
Portfolio Managers: Keith Creveling, Brent Puff and Ted Harlan
Performance Summary
Focused Global Growth returned 27.02%* for the fiscal year ended November 30, 2020, compared with the 15.01% return of its benchmark, the MSCI ACWI Index.
Security selection in the health care, consumer discretionary and financials sectors contributed to the fund’s outperformance, while an underweight position in the communication services sector limited relative gains. Negative stock selection within the materials sector as well as an underweight position in this sector also detracted. Geographically, the fund’s U.S. and Switzerland holdings lifted relative results. Notably, the fund’s exposure in Switzerland included two stocks: Lonza Group and Zurich Insurance Group. Conversely, performance was hindered by overweight positions in Hungary, Ireland and India, where the fund’s exposure included a single investment from each region: OTP Bank (Hungary), CRH (Ireland), which was later sold, and HDFC Bank (India).
Remote Working Trends Lifted a Number of Holdings
On an individual stock basis, key contributors included e-commerce company Amazon.com, cloud services firm ServiceNow and software-as-a-service provider Adobe. All three companies continued to deliver strong earnings growth, despite the pandemic. Longer-term trends that contributed to Amazon.com’s share gains included increased adoption of cloud computing among business enterprises, which led to improving margins for Amazon Web Services. ServiceNow’s stock advanced on healthy demand for its enterprise software solutions. Adobe benefited from its continued shift away from license-based software sales to subscription-based cloud distributed models.
Other standout performers during the period included contract drug manufacturer Lonza Group. Pharmaceutical companies have increased their spending on outsourcing the production of ingredients and drugs, benefiting Lonza and other contract drug manufacturers. Lonza outperformed during the pandemic-related sell-off in March then later rallied on news of its development of a COVID-19 vaccine in partnership with biotechnology firm Moderna.
Not Owning Select Information Technology Stocks Detracted
Relative gains were limited by the fund’s lack of exposure to technology hardware and services company Apple and software firm Microsoft, two stocks that do not fit our investment criteria and that we do not own. Meanwhile, Microsoft benefited from work-from-home trends.
Boston Scientific also weighed on the fund’s relative results. The medical device maker’s stock fell sharply following its voluntary recall of all unused inventory of the LOTUS Edge Aortic Valve System. Boston Scientific discontinued the entire LOTUS platform, citing complexities with the device delivery system. We will continue to closely monitor developments at the company.
Another notable detractor was oil and gas exploration and production company Pioneer Natural Resources. During the health crisis, stay-at-home directives and the resulting economic downturn depressed energy use worldwide. However, we believe the company is in a unique position to benefit from continued production growth from its assets in the Permian Basin. It continues to squeeze costs from its operations and, in our view, will benefit as cyclical growth recovers.
*All fund returns referenced in this commentary are for Investor Class shares. Performance for other share classes will vary due to differences in fee structure; when Investor Class performance exceeds that of the fund’s benchmark, other share classes may not. See page 3 for returns for all share classes.
5
Portfolio Positioning
The portfolio continues to invest in companies where we believe business fundamentals are improving and where we have high conviction that improvement is sustainable. Though the outbreak of COVID-19 has been disruptive, the portfolio’s major themes are structurally unchanged. We are finding opportunities in what we believe are reasonably valued cyclical names with high-quality growth profiles driven by strong improvement stories. Additionally, we continue to look for pricing dislocation to add to or establish new positions. In our view, current holdings contain examples of attractive companies with strong fundamentals that may be well positioned to weather the current volatility.
For example, we believe the need for reliable remote access will remain an attractive investment opportunity beyond the deployment of a COVID-19 vaccine. In our view, the secular growth drivers, which include digitalization, cloud computing, 5G network rollout and data center expansion, will persist. As such, fund holdings include companies that facilitate the proliferation of data and information (e.g., data centers, data infrastructure, 5G equipment) as well as software-as-a-service names providing mission-critical software support.
Our focus remains on medical devices and equipment, tools, diagnostics and production companies. Such names are benefiting from increased research and development needed for an aging population. Companies involved in production of testing equipment and life sciences tools and diagnostics have also seen sustainable growth.
Certain investments in businesses where demand was impacted negatively during the health crisis have started to recover on the promise of a vaccine. Specifically, we believe revenue and earnings should start to inflect higher for companies tied to travel and those industrials whose end markets are poised to benefit from a cyclical recovery.
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Fund Characteristics |
NOVEMBER 30, 2020 | |||||
Top Ten Holdings | % of net assets | ||||
Amazon.com, Inc. | 5.2% | ||||
ServiceNow, Inc. | 3.1% | ||||
NXP Semiconductors NV | 3.1% | ||||
IHS Markit Ltd. | 3.1% | ||||
American Express Co. | 3.1% | ||||
Avantor, Inc. | 3.0% | ||||
Aptiv plc | 3.0% | ||||
Texas Instruments, Inc. | 3.0% | ||||
HDFC Bank Ltd. | 3.0% | ||||
Zurich Insurance Group AG | 3.0% | ||||
Types of Investments in Portfolio | % of net assets | ||||
Domestic Common Stocks | 69.7% | ||||
Foreign Common Stocks | 29.8% | ||||
Total Common Stocks | 99.5% | ||||
Temporary Cash Investments | 0.5% | ||||
Other Assets and Liabilities | —* | ||||
*Category is less than 0.05% of total net assets. | |||||
Investments by Country | % of net assets | ||||
United States | 69.7% | ||||
Switzerland | 5.8% | ||||
Hong Kong | 5.5% | ||||
India | 3.0% | ||||
Brazil | 2.9% | ||||
China | 2.9% | ||||
France | 2.8% | ||||
Japan | 2.8% | ||||
United Kingdom | 2.8% | ||||
Other Countries | 1.3% | ||||
Cash and Equivalents* | 0.5% |
*Includes temporary cash investments and other assets and liabilities.
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Shareholder Fee Example |
Fund shareholders may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption/exchange fees; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in your fund and to compare these costs with the ongoing cost of investing in other mutual funds.
The example is based on an investment of $1,000 made at the beginning of the period and held for the entire period from June 1, 2020 to November 30, 2020.
Actual Expenses
The table provides information about actual account values and actual expenses for each class. You may use the information, together with the amount you invested, to estimate the expenses that you paid over the period. First, identify the share class you own. Then simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
If you hold Investor Class shares of any American Century Investments fund, or I Class shares of the American Century Diversified Bond Fund, in an American Century Investments account (i.e., not through a financial intermediary or employer-sponsored retirement plan account), American Century Investments may charge you a $25.00 annual 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 $25.00 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.
8
Beginning Account Value 6/1/20 | Ending Account Value 11/30/20 | Expenses Paid During Period(1) 6/1/20 - 11/30/20 | Annualized Expense Ratio(1) | |||||||||||
Actual | ||||||||||||||
Investor Class | $1,000 | $1,245.50 | $6.01 | 1.07% | ||||||||||
I Class | $1,000 | $1,246.20 | $4.89 | 0.87% | ||||||||||
Y Class | $1,000 | $1,246.90 | $4.04 | 0.72% | ||||||||||
A Class | $1,000 | $1,242.40 | $7.40 | 1.32% | ||||||||||
C Class | $1,000 | $1,239.50 | $11.59 | 2.07% | ||||||||||
R Class | $1,000 | $1,240.80 | $8.80 | 1.57% | ||||||||||
R5 Class | $1,000 | $1,246.20 | $4.89 | 0.87% | ||||||||||
R6 Class | $1,000 | $1,247.30 | $4.05 | 0.72% | ||||||||||
Hypothetical | ||||||||||||||
Investor Class | $1,000 | $1,019.65 | $5.40 | 1.07% | ||||||||||
I Class | $1,000 | $1,020.65 | $4.39 | 0.87% | ||||||||||
Y Class | $1,000 | $1,021.40 | $3.64 | 0.72% | ||||||||||
A Class | $1,000 | $1,018.40 | $6.66 | 1.32% | ||||||||||
C Class | $1,000 | $1,014.65 | $10.43 | 2.07% | ||||||||||
R Class | $1,000 | $1,017.15 | $7.92 | 1.57% | ||||||||||
R5 Class | $1,000 | $1,020.65 | $4.39 | 0.87% | ||||||||||
R6 Class | $1,000 | $1,021.40 | $3.64 | 0.72% |
(1)Expenses are equal to the class's annualized expense ratio listed in the table above, multiplied by the average account value over the period, multiplied by 183, the number of days in the most recent fiscal half-year, divided by 366, to reflect the one-half year period. Annualized expense ratio reflects actual expenses, including any applicable fee waivers or expense reimbursements and excluding any acquired fund fees and expenses.
9
Schedule of Investments |
NOVEMBER 30, 2020
Shares | Value | |||||||
COMMON STOCKS — 99.5% | ||||||||
Brazil — 2.9% | ||||||||
B3 SA - Brasil Bolsa Balcao | 1,910,800 | $ | 20,019,637 | |||||
China — 2.9% | ||||||||
Alibaba Group Holding Ltd., ADR(1) | 75,580 | 19,904,749 | ||||||
France — 2.8% | ||||||||
Peugeot SA(1) | 845,330 | 19,823,238 | ||||||
Hong Kong — 5.5% | ||||||||
AIA Group Ltd. | 1,671,200 | 18,254,595 | ||||||
Hong Kong Exchanges & Clearing Ltd. | 395,483 | 19,669,907 | ||||||
37,924,502 | ||||||||
Hungary — 1.3% | ||||||||
OTP Bank Nyrt(1) | 224,353 | 8,872,674 | ||||||
India — 3.0% | ||||||||
HDFC Bank Ltd.(1) | 1,069,160 | 20,620,083 | ||||||
Japan — 2.8% | ||||||||
Shiseido Co. Ltd. | 279,200 | 19,737,725 | ||||||
Switzerland — 5.8% | ||||||||
Lonza Group AG | 31,150 | 19,502,446 | ||||||
Zurich Insurance Group AG | 50,730 | 20,564,083 | ||||||
40,066,529 | ||||||||
United Kingdom — 2.8% | ||||||||
London Stock Exchange Group plc | 177,791 | 19,184,001 | ||||||
United States — 69.7% | ||||||||
Adobe, Inc.(1) | 36,957 | 17,682,816 | ||||||
Amazon.com, Inc.(1) | 11,388 | 36,077,640 | ||||||
American Express Co. | 180,040 | 21,350,944 | ||||||
Aptiv plc | 177,840 | 21,109,608 | ||||||
Avantor, Inc.(1) | 774,260 | 21,121,813 | ||||||
Bio-Rad Laboratories, Inc., Class A(1) | 29,504 | 15,887,904 | ||||||
Booking Holdings, Inc.(1) | 10,000 | 20,284,500 | ||||||
Boston Scientific Corp.(1) | 433,595 | 14,373,674 | ||||||
Charles Schwab Corp. (The) | 402,318 | 19,625,072 | ||||||
Cheniere Energy, Inc.(1) | 337,650 | 19,141,378 | ||||||
Danaher Corp. | 74,955 | 16,837,142 | ||||||
Equinix, Inc. | 22,786 | 15,899,843 | ||||||
Fidelity National Information Services, Inc. | 116,507 | 17,290,804 | ||||||
FMC Corp. | 159,100 | 18,457,191 | ||||||
HEICO Corp. | 154,780 | 19,127,712 | ||||||
IHS Markit Ltd. | 215,190 | 21,402,797 | ||||||
L3Harris Technologies, Inc. | 98,620 | 18,934,054 | ||||||
Lowe's Cos., Inc. | 108,850 | 16,961,007 | ||||||
MasterCard, Inc., Class A | 53,630 | 18,047,031 | ||||||
NXP Semiconductors NV | 136,190 | 21,575,220 | ||||||
Pioneer Natural Resources Co. | 117,758 | 11,844,100 | ||||||
ServiceNow, Inc.(1) | 40,640 | 21,724,112 | ||||||
Teleflex, Inc. | 52,438 | 20,070,644 | ||||||
Texas Instruments, Inc. | 129,100 | 20,817,375 |
10
Shares | Value | |||||||
Visa, Inc., Class A | 84,792 | $ | 17,835,997 | |||||
483,480,378 | ||||||||
TOTAL COMMON STOCKS (Cost $468,245,569) | 689,633,516 | |||||||
TEMPORARY CASH INVESTMENTS — 0.5% | ||||||||
Repurchase Agreement, BMO Capital Markets Corp., (collateralized by various U.S. Treasury obligations, 0.625% - 1.375%, 1/31/25 - 5/15/30, valued at $1,742,210), in a joint trading account at 0.06%, dated 11/30/20, due 12/1/20 (Delivery value $1,706,455) | 1,706,452 | |||||||
Repurchase Agreement, Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 0.625%, 5/15/30, valued at $1,956,427), at 0.07%, dated 11/30/20, due 12/1/20 (Delivery value $1,918,004) | 1,918,000 | |||||||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $3,624,452) | 3,624,452 | |||||||
TOTAL INVESTMENT SECURITIES — 100.0% (Cost $471,870,021) | 693,257,968 | |||||||
OTHER ASSETS AND LIABILITIES† | (209,494) | |||||||
TOTAL NET ASSETS — 100.0% | $ | 693,048,474 |
MARKET SECTOR DIVERSIFICATION | |||||
(as a % of net assets) | |||||
Financials | 24.4 | % | |||
Information Technology | 19.5 | % | |||
Consumer Discretionary | 19.2 | % | |||
Health Care | 15.5 | % | |||
Industrials | 8.6 | % | |||
Energy | 4.5 | % | |||
Consumer Staples | 2.8 | % | |||
Materials | 2.7 | % | |||
Real Estate | 2.3 | % | |||
Cash and Equivalents* | 0.5 | % |
*Includes temporary cash investments and other assets and liabilities.
NOTES TO SCHEDULE OF INVESTMENTS | ||||||||
ADR | - | American Depositary Receipt |
†Category is less than 0.05% of total net assets.
(1) Non-income producing.
See Notes to Financial Statements.
11
Statement of Assets and Liabilities |
NOVEMBER 30, 2020 | |||||
Assets | |||||
Investment securities, at value (cost of $471,870,021) | $ | 693,257,968 | |||
Foreign currency holdings, at value (cost of $21) | 21 | ||||
Receivable for capital shares sold | 1,069,879 | ||||
Dividends and interest receivable | 446,829 | ||||
Other assets | 1,184 | ||||
694,775,881 | |||||
Liabilities | |||||
Disbursements in excess of demand deposit cash | 72,327 | ||||
Payable for capital shares redeemed | 492,878 | ||||
Accrued management fees | 547,730 | ||||
Distribution and service fees payable | 13,958 | ||||
Accrued foreign taxes | 600,514 | ||||
1,727,407 | |||||
Net Assets | $ | 693,048,474 | |||
Net Assets Consist of: | |||||
Capital (par value and paid-in surplus) | $ | 408,268,909 | |||
Distributable earnings | 284,779,565 | ||||
$ | 693,048,474 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | |||||||||
Investor Class, $0.01 Par Value | $462,780,894 | 31,789,685 | $14.56 | ||||||||
I Class, $0.01 Par Value | $94,888,114 | 6,354,981 | $14.93 | ||||||||
Y Class, $0.01 Par Value | $166,885 | 11,089 | $15.05 | ||||||||
A Class, $0.01 Par Value | $30,536,901 | 2,189,931 | $13.94* | ||||||||
C Class, $0.01 Par Value | $5,302,313 | 472,292 | $11.23 | ||||||||
R Class, $0.01 Par Value | $8,931,329 | 658,938 | $13.55 | ||||||||
R5 Class, $0.01 Par Value | $9,209 | 617 | $14.93 | ||||||||
R6 Class, $0.01 Par Value | $90,432,829 | 6,018,129 | $15.03 |
*Maximum offering price $14.79 (net asset value divided by 0.9425).
See Notes to Financial Statements.
12
Statement of Operations |
YEAR ENDED NOVEMBER 30, 2020 | |||||
Investment Income (Loss) | |||||
Income: | |||||
Dividends (net of foreign taxes withheld of $194,849) | $ | 5,495,887 | |||
Interest | 15,117 | ||||
5,511,004 | |||||
Expenses: | |||||
Management fees | 6,003,460 | ||||
Distribution and service fees: | |||||
A Class | 67,471 | ||||
C Class | 47,823 | ||||
R Class | 38,031 | ||||
Directors' fees and expenses | 18,797 | ||||
Other expenses | 10,009 | ||||
6,185,591 | |||||
Net investment income (loss) | (674,587) | ||||
Realized and Unrealized Gain (Loss) | |||||
Net realized gain (loss) on: | |||||
Investment transactions (net of foreign tax expenses paid (refunded) of $69,639) | 81,820,200 | ||||
Foreign currency translation transactions | (118,813) | ||||
81,701,387 | |||||
Change in net unrealized appreciation (depreciation) on: | |||||
Investments (includes (increase) decrease in accrued foreign taxes of $(527,836)) | 73,974,695 | ||||
Translation of assets and liabilities in foreign currencies | 20,761 | ||||
73,995,456 | |||||
Net realized and unrealized gain (loss) | 155,696,843 | ||||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 155,022,256 |
See Notes to Financial Statements.
13
Statement of Changes in Net Assets |
YEARS ENDED NOVEMBER 30, 2020 AND NOVEMBER 30, 2019 | ||||||||
Increase (Decrease) in Net Assets | November 30, 2020 | November 30, 2019 | ||||||
Operations | ||||||||
Net investment income (loss) | $ | (674,587) | $ | 459,057 | ||||
Net realized gain (loss) | 81,701,387 | 93,175,825 | ||||||
Change in net unrealized appreciation (depreciation) | 73,995,456 | 13,822,059 | ||||||
Net increase (decrease) in net assets resulting from operations | 155,022,256 | 107,456,941 | ||||||
Distributions to Shareholders | ||||||||
From earnings: | ||||||||
Investor Class | (70,603,884) | (36,935,706) | ||||||
I Class | (4,139,998) | (1,467,077) | ||||||
Y Class | (46,321) | (546) | ||||||
A Class | (4,387,898) | (2,409,311) | ||||||
C Class | (962,993) | (500,817) | ||||||
R Class | (1,212,750) | (660,873) | ||||||
R5 Class | (1,131) | (540) | ||||||
R6 Class | (6,775,967) | (4,427,325) | ||||||
Decrease in net assets from distributions | (88,130,942) | (46,402,195) | ||||||
Capital Share Transactions | ||||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | 42,008,322 | 12,249,882 | ||||||
Net increase (decrease) in net assets | 108,899,636 | 73,304,628 | ||||||
Net Assets | ||||||||
Beginning of period | 584,148,838 | 510,844,210 | ||||||
End of period | $ | 693,048,474 | $ | 584,148,838 | ||||
See Notes to Financial Statements.
14
Notes to Financial Statements |
NOVEMBER 30, 2020
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 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, I Class, Y Class, A Class, C Class, R Class, R5 Class and 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.
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 (NAV) 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 NAV 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.
15
The fund monitors for significant events occurring after the close of an investment’s primary exchange but before the fund’s NAV 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. 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.
16
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).
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 ACIM will pay all expenses of managing and operating the fund, except brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), extraordinary expenses, and expenses incurred in connection with the provision of shareholder services and distribution services under a plan adopted pursuant to Rule 12b-1 under the 1940 Act. The fee is computed and accrued daily based on each class’s daily net assets and paid monthly in arrears. The difference in the fee among the classes is a result of their separate arrangements for non-Rule 12b-1 shareholder services. It is not the result of any difference in advisory or custodial fees or other expenses related to the management of the fund’s assets, which do not vary by class. The rate of the fee is determined by applying a fee rate calculation formula. This formula takes into account the fund’s assets as well as certain assets, if any, of other clients of the investment advisor outside the American Century Investments family of funds (such as subadvised funds and separate accounts) that use very similar investment teams and strategies (strategy assets).
The management fee schedule range and the effective annual management fee for each class for the period ended November 30, 2020 are as follows:
Management Fee Schedule Range | Effective Annual Management Fee | |||||||
Investor Class | 1.050% to 1.300% | 1.07% | ||||||
I Class | 0.850% to 1.100% | 0.87% | ||||||
Y Class | 0.700% to 0.950% | 0.72% | ||||||
A Class | 1.050% to 1.300% | 1.07% | ||||||
C Class | 1.050% to 1.300% | 1.07% | ||||||
R Class | 1.050% to 1.300% | 1.07% | ||||||
R5 Class | 0.850% to 1.100% | 0.87% | ||||||
R6 Class | 0.700% to 0.950% | 0.72% |
Distribution and Service Fees — The Board of Directors has adopted a separate Master Distribution and Individual Shareholder Services Plan for each of the A Class, C Class and R Class (collectively the plans), pursuant to Rule 12b-1 of the 1940 Act. The plans provide that the A Class will pay ACIS an annual distribution and service fee of 0.25%. The plans provide that the C Class will pay ACIS an annual distribution and service fee of 1.00%, of which 0.25% is paid for individual shareholder services and 0.75% is paid for distribution services. The plans provide that the R Class will pay ACIS an annual distribution and service fee of 0.50%. The fees are computed and accrued daily based on each class’s daily net assets and paid monthly in arrears. The fees are used to pay financial intermediaries for distribution and individual shareholder services. Fees incurred under the plans during the period ended November 30, 2020 are detailed in the Statement of Operations.
17
Directors' Fees and Expenses — The Board of Directors is responsible for overseeing the investment advisor’s management and operations of the fund. The directors receive detailed information about the fund and its investment advisor regularly throughout the year, and meet at least quarterly with management of the investment advisor to review reports about fund operations. The fund’s officers do not receive compensation from the fund.
Interfund Transactions — The fund may enter into security transactions with other American Century Investments funds and other client accounts of the investment advisor, in accordance with the 1940 Act rules and procedures adopted by the Board of Directors. The rules and procedures require, among other things, that these transactions be effected at the independent current market price of the security. During the period, the interfund sales were $367,977 and there were no interfund purchases. The effect of interfund transactions on the Statement of Operations was $223,752 in net realized gain (loss) on investment transactions.
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the period ended November 30, 2020 were $434,567,688 and $480,021,776, respectively.
18
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Year ended November 30, 2020 | Year ended November 30, 2019 | |||||||||||||
Shares | Amount | Shares | Amount | |||||||||||
Investor Class/Shares Authorized | 450,000,000 | 450,000,000 | ||||||||||||
Sold | 4,048,205 | $ | 48,125,859 | 2,039,625 | $ | 25,196,722 | ||||||||
Issued in reinvestment of distributions | 5,805,629 | 68,462,968 | 3,477,530 | 35,957,657 | ||||||||||
Redeemed | (11,332,337) | (135,918,928) | (5,409,998) | (65,892,519) | ||||||||||
(1,478,503) | (19,330,101) | 107,157 | (4,738,140) | |||||||||||
I Class/Shares Authorized | 40,000,000 | 40,000,000 | ||||||||||||
Sold | 6,520,526 | 78,283,780 | 1,077,089 | 13,794,877 | ||||||||||
Issued in reinvestment of distributions | 342,162 | 4,129,640 | 138,538 | 1,461,572 | ||||||||||
Redeemed | (2,548,314) | (32,311,440) | (464,877) | (5,764,381) | ||||||||||
4,314,374 | 50,101,980 | 750,750 | 9,492,068 | |||||||||||
Y Class/Shares Authorized | 20,000,000 | 20,000,000 | ||||||||||||
Sold | — | — | 22,544 | 303,359 | ||||||||||
Issued in reinvestment of distributions | 3,811 | 46,321 | 51 | 546 | ||||||||||
Redeemed | (14,182) | (179,832) | (1,693) | (22,088) | ||||||||||
(10,371) | (133,511) | 20,902 | 281,817 | |||||||||||
A Class/Shares Authorized | 40,000,000 | 40,000,000 | ||||||||||||
Sold | 510,346 | 6,048,111 | 290,672 | 3,485,724 | ||||||||||
Issued in reinvestment of distributions | 375,963 | 4,257,021 | 233,037 | 2,332,697 | ||||||||||
Redeemed | (755,382) | (8,720,936) | (660,400) | (7,718,982) | ||||||||||
130,927 | 1,584,196 | (136,691) | (1,900,561) | |||||||||||
C Class/Shares Authorized | 30,000,000 | 30,000,000 | ||||||||||||
Sold | 109,079 | 1,056,740 | 116,094 | 1,060,561 | ||||||||||
Issued in reinvestment of distributions | 95,662 | 879,003 | 52,006 | 441,007 | ||||||||||
Redeemed | (183,221) | (1,758,641) | (169,103) | (1,654,534) | ||||||||||
21,520 | 177,102 | (1,003) | (152,966) | |||||||||||
R Class/Shares Authorized | 30,000,000 | 30,000,000 | ||||||||||||
Sold | 197,690 | 2,324,558 | 130,276 | 1,543,815 | ||||||||||
Issued in reinvestment of distributions | 109,728 | 1,210,541 | 67,219 | 660,090 | ||||||||||
Redeemed | (230,339) | (2,620,957) | (210,738) | (2,489,964) | ||||||||||
77,079 | 914,142 | (13,243) | (286,059) | |||||||||||
R5 Class/Shares Authorized | 20,000,000 | 20,000,000 | ||||||||||||
Issued in reinvestment of distributions | 94 | 1,131 | 51 | 540 | ||||||||||
R6 Class/Shares Authorized | 65,000,000 | 65,000,000 | ||||||||||||
Sold | 3,891,598 | 44,325,196 | 1,443,634 | 17,087,804 | ||||||||||
Issued in reinvestment of distributions | 463,745 | 5,619,736 | 418,067 | 4,427,325 | ||||||||||
Redeemed | (3,069,071) | (41,251,549) | (940,824) | (11,961,946) | ||||||||||
1,286,272 | 8,693,383 | 920,877 | 9,553,183 | |||||||||||
Net increase (decrease) | 4,341,392 | $ | 42,008,322 | 1,648,800 | $ | 12,249,882 |
19
6. Fair Value Measurements
The fund’s investments valuation process is based on several considerations and may use multiple inputs to determine the fair value of the investments held by the fund. In conformity with accounting principles generally accepted in the United States of America, the inputs used to determine a valuation are classified into three broad levels.
•Level 1 valuation inputs consist of unadjusted quoted prices in an active market for identical investments.
•Level 2 valuation inputs consist of direct or indirect observable market data (including quoted prices for comparable investments, evaluations of subsequent market events, interest rates, prepayment speeds, credit risk, etc.). These inputs also consist of quoted prices for identical investments initially expressed in local currencies that are adjusted through translation into U.S. dollars.
•Level 3 valuation inputs consist of unobservable data (including a fund’s own assumptions).
The level classification is based on the lowest level input that is significant to the fair valuation measurement. The valuation inputs are not necessarily an indication of the risks associated with investing in these securities or other financial instruments.
The following is a summary of the level classifications as of period end. The Schedule of Investments provides additional information on the fund’s portfolio holdings.
Level 1 | Level 2 | Level 3 | |||||||||
Assets | |||||||||||
Investment Securities | |||||||||||
Common Stocks | |||||||||||
Brazil | — | $ | 20,019,637 | — | |||||||
France | — | 19,823,238 | — | ||||||||
Hong Kong | — | 37,924,502 | — | ||||||||
Hungary | — | 8,872,674 | — | ||||||||
India | — | 20,620,083 | — | ||||||||
Japan | — | 19,737,725 | — | ||||||||
Switzerland | — | 40,066,529 | — | ||||||||
United Kingdom | — | 19,184,001 | — | ||||||||
Other Countries | $ | 503,385,127 | — | — | |||||||
Temporary Cash Investments | — | 3,624,452 | — | ||||||||
$ | 503,385,127 | $ | 189,872,841 | — |
7. Risk Factors
The value of the fund’s shares will go up and down, sometimes rapidly or unpredictably, based on the performance of the securities owned by the fund and other factors generally affecting the securities market. Market risks, including political, regulatory, economic and social developments, can affect the value of the fund’s investments. Natural disasters, public health emergencies, terrorism and other unforeseeable events may lead to increased market volatility and may have adverse long-term effects on world economies and markets generally.
There are certain risks involved in investing in foreign securities. These risks include those resulting from political events (such as civil unrest, national elections and imposition of exchange controls), social and economic events (such as labor strikes and rising inflation), and natural disasters. Securities of foreign issuers may be less liquid and more volatile. Investing in emerging markets or a significant portion of assets in one country or region may accentuate these risks.
20
8. Federal Tax Information
On December 22, 2020, the fund declared and paid a per-share distribution from net realized gains to shareholders of record on December 21, 2020 of $1.4436 for the Investor Class, I Class, Y Class, A Class, C Class, R Class, R5 Class and R6 Class.
The tax character of distributions paid during the years ended November 30, 2020 and November 30, 2019 were as follows:
2020 | 2019 | |||||||
Distributions Paid From | ||||||||
Ordinary income | $ | 310,524 | $ | 657,150 | ||||
Long-term capital gains | $ | 87,820,418 | $ | 45,745,045 |
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.
The reclassifications, which are primarily due to tax equalization, were made to capital $13,838,902 and distributable earnings $(13,838,902).
As of period end, the federal tax cost of investments and the components of distributable earnings on a tax-basis were as follows:
Federal tax cost of investments | $ | 476,515,650 | |||
Gross tax appreciation of investments | $ | 223,243,362 | |||
Gross tax depreciation of investments | (6,501,044) | ||||
Net tax appreciation (depreciation) of investments | 216,742,318 | ||||
Net tax appreciation (depreciation) on translation of assets and liabilities in foreign currencies | (583,843) | ||||
Net tax appreciation (depreciation) | $ | 216,158,475 | |||
Undistributed ordinary income | $ | 19,026,029 | |||
Accumulated long-term gains | $ | 49,595,061 |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales.
21
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 | |||||||||||||||||||||||||||||||||||||||||
2020 | $13.54 | (0.02) | 3.16 | 3.14 | —(3) | (2.12) | (2.12) | $14.56 | 27.02% | 1.07% | (0.14)% | 73% | $462,781 | ||||||||||||||||||||||||||||
2019 | $12.32 | 0.01 | 2.33 | 2.34 | (0.01) | (1.11) | (1.12) | $13.54 | 21.82% | 1.07% | 0.07% | 68% | $450,413 | ||||||||||||||||||||||||||||
2018 | $13.67 | 0.04 | 0.11 | 0.15 | (0.03) | (1.47) | (1.50) | $12.32 | 1.27% | 1.07% | 0.29% | 42% | $408,562 | ||||||||||||||||||||||||||||
2017 | $10.84 | 0.02 | 2.98 | 3.00 | (0.04) | (0.13) | (0.17) | $13.67 | 27.99% | 1.08% | 0.14% | 54% | $437,822 | ||||||||||||||||||||||||||||
2016 | $12.01 | 0.03 | (0.42) | (0.39) | (0.01) | (0.77) | (0.78) | $10.84 | (3.24)% | 1.08% | 0.27% | 57% | $387,155 | ||||||||||||||||||||||||||||
I Class | |||||||||||||||||||||||||||||||||||||||||
2020 | $13.84 | —(3) | 3.24 | 3.24 | (0.03) | (2.12) | (2.15) | $14.93 | 27.21% | 0.87% | 0.06% | 73% | $94,888 | ||||||||||||||||||||||||||||
2019 | $12.57 | 0.03 | 2.39 | 2.42 | (0.04) | (1.11) | (1.15) | $13.84 | 22.04% | 0.87% | 0.27% | 68% | $28,238 | ||||||||||||||||||||||||||||
2018 | $13.91 | 0.06 | 0.12 | 0.18 | (0.05) | (1.47) | (1.52) | $12.57 | 1.52% | 0.87% | 0.49% | 42% | $16,210 | ||||||||||||||||||||||||||||
2017 | $11.01 | 0.05 | 3.02 | 3.07 | (0.04) | (0.13) | (0.17) | $13.91 | 28.25% | 0.88% | 0.34% | 54% | $32,498 | ||||||||||||||||||||||||||||
2016 | $12.19 | 0.05 | (0.42) | (0.37) | (0.04) | (0.77) | (0.81) | $11.01 | (3.07)% | 0.88% | 0.47% | 57% | $37,028 | ||||||||||||||||||||||||||||
Y Class | |||||||||||||||||||||||||||||||||||||||||
2020 | $13.93 | 0.03 | 3.26 | 3.29 | (0.05) | (2.12) | (2.17) | $15.05 | 27.48% | 0.72% | 0.21% | 73% | $167 | ||||||||||||||||||||||||||||
2019 | $12.65 | 0.01 | 2.43 | 2.44 | (0.05) | (1.11) | (1.16) | $13.93 | 22.18% | 0.72% | 0.42% | 68% | $299 | ||||||||||||||||||||||||||||
2018 | $13.98 | 0.08 | 0.12 | 0.20 | (0.06) | (1.47) | (1.53) | $12.65 | 1.62% | 0.72% | 0.64% | 42% | $7 | ||||||||||||||||||||||||||||
2017(4) | $11.95 | 0.04 | 1.99 | 2.03 | — | — | — | $13.98 | 16.99% | 0.73%(5) | 0.49%(5) | 54%(6) | $6 |
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 | |||||||||||||||||||||||||||||||||||||||||
2020 | $13.08 | (0.05) | 3.03 | 2.98 | — | (2.12) | (2.12) | $13.94 | 26.66% | 1.32% | (0.39)% | 73% | $30,537 | ||||||||||||||||||||||||||||
2019 | $11.96 | (0.02) | 2.25 | 2.23 | — | (1.11) | (1.11) | $13.08 | 21.48% | 1.32% | (0.18)% | 68% | $26,932 | ||||||||||||||||||||||||||||
2018 | $13.31 | —(3) | 0.12 | 0.12 | — | (1.47) | (1.47) | $11.96 | 1.08% | 1.32% | 0.04% | 42% | $26,256 | ||||||||||||||||||||||||||||
2017 | $10.58 | (0.01) | 2.90 | 2.89 | (0.03) | (0.13) | (0.16) | $13.31 | 27.65% | 1.33% | (0.11)% | 54% | $30,622 | ||||||||||||||||||||||||||||
2016 | $11.76 | —(3) | (0.41) | (0.41) | — | (0.77) | (0.77) | $10.58 | (3.52)% | 1.33% | 0.02% | 57% | $36,382 | ||||||||||||||||||||||||||||
C Class | |||||||||||||||||||||||||||||||||||||||||
2020 | $11.00 | (0.11) | 2.46 | 2.35 | — | (2.12) | (2.12) | $11.23 | 25.84% | 2.07% | (1.14)% | 73% | $5,302 | ||||||||||||||||||||||||||||
2019 | $10.32 | (0.09) | 1.88 | 1.79 | — | (1.11) | (1.11) | $11.00 | 20.53% | 2.07% | (0.93)% | 68% | $4,960 | ||||||||||||||||||||||||||||
2018 | $11.77 | (0.08) | 0.10 | 0.02 | — | (1.47) | (1.47) | $10.32 | 0.27% | 2.07% | (0.71)% | 42% | $4,662 | ||||||||||||||||||||||||||||
2017 | $9.42 | (0.09) | 2.58 | 2.49 | (0.01) | (0.13) | (0.14) | $11.77 | 26.77% | 2.08% | (0.86)% | 54% | $5,977 | ||||||||||||||||||||||||||||
2016 | $10.63 | (0.07) | (0.37) | (0.44) | — | (0.77) | (0.77) | $9.42 | (4.23)% | 2.08% | (0.73)% | 57% | $6,872 | ||||||||||||||||||||||||||||
R Class | |||||||||||||||||||||||||||||||||||||||||
2020 | $12.80 | (0.07) | 2.94 | 2.87 | — | (2.12) | (2.12) | $13.55 | 26.34% | 1.57% | (0.64)% | 73% | $8,931 | ||||||||||||||||||||||||||||
2019 | $11.75 | (0.05) | 2.21 | 2.16 | — | (1.11) | (1.11) | $12.80 | 21.24% | 1.57% | (0.43)% | 68% | $7,448 | ||||||||||||||||||||||||||||
2018 | $13.14 | (0.03) | 0.11 | 0.08 | — | (1.47) | (1.47) | $11.75 | 0.75% | 1.57% | (0.21)% | 42% | $6,995 | ||||||||||||||||||||||||||||
2017 | $10.47 | (0.04) | 2.86 | 2.82 | (0.02) | (0.13) | (0.15) | $13.14 | 27.29% | 1.58% | (0.36)% | 54% | $7,925 | ||||||||||||||||||||||||||||
2016 | $11.67 | (0.03) | (0.40) | (0.43) | — | (0.77) | (0.77) | $10.47 | (3.73)% | 1.58% | (0.23)% | 57% | $7,007 |
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) | |||||||||||||||||||||||||||||
R5 Class | |||||||||||||||||||||||||||||||||||||||||
2020 | $13.84 | 0.01 | 3.23 | 3.24 | (0.03) | (2.12) | (2.15) | $14.93 | 27.21% | 0.87% | 0.06% | 73% | $9 | ||||||||||||||||||||||||||||
2019 | $12.57 | 0.03 | 2.39 | 2.42 | (0.04) | (1.11) | (1.15) | $13.84 | 22.04% | 0.87% | 0.27% | 68% | $7 | ||||||||||||||||||||||||||||
2018 | $13.90 | 0.06 | 0.12 | 0.18 | (0.04) | (1.47) | (1.51) | $12.57 | 1.52% | 0.87% | 0.49% | 42% | $6 | ||||||||||||||||||||||||||||
2017(4) | $11.90 | 0.03 | 1.97 | 2.00 | — | — | — | $13.90 | 16.81% | 0.88%(5) | 0.34%(5) | 54%(6) | $6 | ||||||||||||||||||||||||||||
R6 Class | |||||||||||||||||||||||||||||||||||||||||
2020 | $13.92 | 0.03 | 3.25 | 3.28 | (0.05) | (2.12) | (2.17) | $15.03 | 27.44% | 0.72% | 0.21% | 73% | $90,433 | ||||||||||||||||||||||||||||
2019 | $12.63 | 0.05 | 2.40 | 2.45 | (0.05) | (1.11) | (1.16) | $13.92 | 22.30% | 0.72% | 0.42% | 68% | $65,850 | ||||||||||||||||||||||||||||
2018 | $13.98 | 0.09 | 0.10 | 0.19 | (0.07) | (1.47) | (1.54) | $12.63 | 1.58% | 0.72% | 0.64% | 42% | $48,147 | ||||||||||||||||||||||||||||
2017 | $11.05 | 0.05 | 3.05 | 3.10 | (0.04) | (0.13) | (0.17) | $13.98 | 28.46% | 0.73% | 0.49% | 54% | $37,248 | ||||||||||||||||||||||||||||
2016 | $12.23 | 0.07 | (0.43) | (0.36) | (0.05) | (0.77) | (0.82) | $11.05 | (2.91)% | 0.73% | 0.62% | 57% | $16,508 |
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)Per-share amount was less than $0.005.
(4)April 10, 2017 (commencement of sale) through November 30, 2017.
(5)Annualized.
(6)Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended November 30, 2017.
See Notes to Financial Statements.
Report of Independent Registered Public Accounting Firm |
To the Shareholders and the Board of Directors of American Century World Mutual Funds, Inc.:
Opinion on the Financial Statements and Financial Highlights
We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of Focused Global Growth Fund (the “Fund”), one of the funds constituting the American Century World Mutual Funds, Inc., as of November 30, 2020, the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of Focused Global Growth Fund of the American Century World Mutual Funds, Inc. as of November 30, 2020, and the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on the Fund’s financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. Our procedures included confirmation of securities owned as of November 30, 2020, by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
DELOITTE & TOUCHE LLP
Kansas City, Missouri
January 19, 2021
We have served as the auditor of one or more American Century investment companies since 1997.
26
Management |
The Board of Directors
The individuals listed below serve as directors of the funds. Each director will continue to serve in this capacity until death, retirement, resignation or removal from office. The board has adopted a mandatory retirement age for directors who are not “interested persons,” as that term is defined in the Investment Company Act (independent directors). Independent directors shall retire by December 31 of the year in which they reach their 75th birthday.
Mr. Thomas is an “interested person” because he currently serves as President and Chief Executive Officer of American Century Companies, Inc. (ACC), the parent company of American Century Investment Management, Inc. (ACIM or the advisor). The other directors (more than three-fourths of the total number) are independent. They are not employees, directors or officers of, and have no financial interest in, ACC or any of its wholly owned, direct or indirect, subsidiaries, including ACIM, American Century Investment Services, Inc. (ACIS) and American Century Services, LLC (ACS), and they do not have any other affiliations, positions or relationships that would cause them to be considered “interested persons” under the Investment Company Act. The directors serve in this capacity for seven (in the case of Jonathan S. Thomas, 16; and Stephen E. Yates, 8) registered investment companies in the American Century Investments family of funds.
The following table presents additional information about the directors. The mailing address for each director is 4500 Main Street, Kansas City, Missouri 64111.
Name (Year of Birth) | Position(s) Held with Funds | Length of Time Served | Principal Occupation(s) During Past 5 Years | Number of American Century Portfolios Overseen by Director | Other Directorships Held During Past 5 Years | ||||||||||||
Independent Directors | |||||||||||||||||
Thomas W. Bunn (1953) | Director | Since 2017 | Retired | 62 | SquareTwo Financial; Barings (formerly Babson Capital Funds Trust) (2013 to 2016) | ||||||||||||
Chris H. Cheesman (1962) | Director | Since 2019 | Retired. Senior Vice President & Chief Audit Executive, AllianceBernstein (1999 to 2018) | 62 | None | ||||||||||||
Barry Fink (1955) | Director | Since 2012 (independent since 2016) | Retired | 62 | None | ||||||||||||
Rajesh K. Gupta (1960) | Director | Since 2019 | Partner Emeritus, SeaCrest Investment Management and SeaCrest Wealth Management (2019 to Present); Chief Executive Officer and Chief Investment Officer, SeaCrest Investment Management (2006 to 2019); Chief Executive Officer and Chief Investment Officer, SeaCrest Wealth Management (2008 to 2019) | 62 | None |
27
Name (Year of Birth) | Position(s) Held with Funds | Length of Time Served | Principal Occupation(s) During Past 5 Years | Number of American Century Portfolios Overseen by Director | Other Directorships Held During Past 5 Years | ||||||||||||
Independent Directors | |||||||||||||||||
Lynn Jenkins (1963) | Director | Since 2019 | Consultant, LJ Strategies (2019 to present); United States Representative, U.S. House of Representatives (2009 to 2018) | 62 | MGP Ingredients, Inc. | ||||||||||||
Jan M. Lewis (1957) | Director | Since 2011 | Retired | 62 | None | ||||||||||||
John R. Whitten (1946) | Director | Since 2008 | Retired | 62 | Onto Innovation Inc. (2019 to 2020); Rudolph Technologies, Inc. (2006 to 2019) | ||||||||||||
Stephen E. Yates (1948) | Director and Chairman of the Board | Since 2012 (Chairman since 2018) | Retired | 87 | None | ||||||||||||
Interested Director | |||||||||||||||||
Jonathan S. Thomas (1963) | Director | Since 2007 | President and Chief Executive Officer, ACC (2007 to present). Also serves as Chief Executive Officer, ACS; Executive Vice President, ACIM; Director, ACC, ACIM and other ACC subsidiaries | 125 | None |
The Statement of Additional Information has additional information about the fund's directors and is available without charge, upon request, by calling 1-800-345-2021.
28
Officers
The following table presents certain information about the executive officers of the funds. Each officer serves as an officer for each of the 16 (in the case of Robert J. Leach, 15) investment companies in the American Century family of funds. No officer is compensated for his or her service as an officer of the funds. The listed officers are interested persons of the funds and are appointed or re-appointed on an annual basis. The mailing address for each officer listed below is 4500 Main Street, Kansas City, Missouri 64111.
Name (Year of Birth) | Offices with the Funds | Principal Occupation(s) During the Past Five Years | ||||||
Patrick Bannigan (1965) | President since 2019 | Executive Vice President and Director, ACC (2012 to present); Chief Financial Officer, Chief Accounting Officer and Treasurer, ACC (2015 to present). Also serves as President, ACS; Vice President, ACIM; Chief Financial Officer, Chief Accounting Officer and/or Director, ACIM, ACS and other ACC subsidiaries | ||||||
R. Wes Campbell (1974) | Chief Financial Officer and Treasurer since 2018 | Vice President, ACS, (2020 to present); Investment Operations and Investment Accounting, ACS (2000 to present) | ||||||
Amy D. Shelton (1964) | Chief Compliance Officer and Vice President since 2014 | Chief Compliance Officer, American Century funds, (2014 to present); Chief Compliance Officer, ACIM (2014 to present); Chief Compliance Officer, ACIS (2009 to present). Also serves as Vice President, ACIS | ||||||
Charles A. Etherington (1957) | General Counsel since 2007 and Senior Vice President since 2006 | Attorney, ACC (1994 to present); Vice President, ACC (2005 to present); General Counsel, ACC (2007 to present). Also serves as General Counsel, ACIM, ACS, ACIS and other ACC subsidiaries; and Senior Vice President, ACIM and ACS | ||||||
C. Jean Wade (1964) | Vice President since 2012 | Senior Vice President, ACS (2017 to present); Vice President, ACS (2000 to 2017) | ||||||
Robert J. Leach (1966) | Vice President since 2006 | Vice President, ACS (2000 to present) | ||||||
David H. Reinmiller (1963) | Vice President since 2000 | Attorney, ACC (1994 to present). Also serves as Vice President, ACIM and ACS | ||||||
Ward D. Stauffer (1960) | Secretary since 2005 | Attorney, ACC (2003 to present) |
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Approval of Management Agreement |
At a meeting held on June 24, 2020, the Fund’s Board of Directors (the "Board") unanimously approved the renewal of the 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, contracts for investment advisory services are required to be reviewed, evaluated, and approved by a majority of a fund’s directors (the “Directors”), including a majority of the independent Directors, each year.
Prior to its consideration of the renewal of the management agreement, the Directors requested and reviewed extensive data and information compiled by the Advisor and certain independent providers of evaluation data concerning the Fund and the services provided to the Fund by the Advisor. This review was in addition to the oversight and evaluation undertaken by the Board and its committees on a continual basis and the information received was supplemental to the extensive information that the Board and its committees receive and consider throughout the year.
In connection with its consideration of the renewal of the management agreement, the Board’s review and evaluation of the services provided by the Advisor included, but was not limited to, the following:
•the nature, extent, and quality of investment management, shareholder services, and other services provided and to be provided to the Fund;
•the wide range of other programs and services provided and to be provided to the Fund and its shareholders on a routine and non-routine basis;
•the Fund’s investment performance, including data comparing the Fund's performance to appropriate benchmarks and/or a peer group of other mutual funds with similar investment objectives and strategies;
•the cost of owning the Fund compared to the cost of owning similar funds;
•the compliance policies, procedures, and regulatory experience of the Advisor and the Fund's service providers;
•the Advisor’s strategic plans;
•the Advisor’s business continuity plans and specifically its response to the COVID-19 pandemic;
•financial data showing the cost of services provided to the Fund, the profitability of the Fund to the Advisor, and the overall profitability of the Advisor;
•possible economies of scale associated with the Advisor’s management of the Fund and other accounts;
•services provided and charges to the Advisor's other investment management clients;
•acquired fund fees and expenses;
•payments and practices in connection with financial intermediaries holding shares of the Fund and the services provided by intermediaries in connection therewith; and
•possible collateral benefits to the Advisor from the management of the Fund.
The Board held two meetings to consider the renewal. The independent Directors also met in private session three times to review and discuss the information provided in response to their request. The independent Directors held active discussions with the Advisor regarding the renewal of the management agreement, requesting supplemental information, and reviewing information provided by the Advisor in response thereto. The independent Directors had the benefit of the advice of their independent counsel throughout the process.
Factors Considered
The Directors considered all of the information provided by the Advisor, the independent data providers, and 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
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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. In deciding to renew the management agreement, the Board based its decision on a number of factors, including without limitation the following:
Nature, Extent and Quality of Services — Generally. Under the management agreement, the Advisor is responsible for providing or arranging for all services necessary for the operation of the Fund. The Board noted that the Advisor provides or arranges at its own expense a wide variety of services including without limitation the following:
•constructing and designing the Fund
•portfolio research and security selection
•initial capitalization/funding
•securities trading
•Fund administration
•custody of Fund assets
•daily valuation of the Fund’s portfolio
•shareholder servicing and transfer agency, including shareholder confirmations, recordkeeping, and communications
•legal services (except the independent Directors’ counsel)
•regulatory and portfolio compliance
•financial reporting
•marketing and distribution (except amounts paid by the Fund under Rule 12b-1 plans)
The Board noted that many of these services have expanded over time in terms of both quantity and complexity in response to shareholder demands, competition in the industry, changing distribution channels, and the changing regulatory environment.
Investment Management Services. The nature of the investment management services provided to the Fund is quite complex and allows Fund shareholders access to professional money management, instant diversification of their investments within an asset class, the opportunity to easily diversify among asset classes by investing in or exchanging among various American Century Investments funds, and liquidity. In evaluating investment performance, the Board expects the Advisor to manage the Fund in accordance with its investment objectives and approved strategies. Further, the Directors recognize that the Advisor has an obligation to monitor trading activities, and in particular to seek the best execution of fund trades, and to evaluate the use of and payment for research. In providing these services, the Advisor utilizes teams of investment professionals (portfolio managers, analysts, research assistants, and securities traders) who require extensive information technology, research, training, compliance, and other systems to conduct their business. The Board, directly and through its Fund Performance Review Committee, provides oversight of the investment performance process. It regularly reviews investment performance information for the Fund, together with comparative information for appropriate benchmarks and/or peer groups of similarly-managed funds, over different time horizons. The Directors also review investment performance information during the management agreement renewal process. If performance concerns are identified, the Fund receives special reviews until performance improves, during which the Board discusses with the Advisor the reasons for such results (e.g., market conditions, security selection) and any efforts being undertaken to improve performance. The Fund’s performance was above its benchmark for the one-, three-, five-, and ten-year periods reviewed by the Board. The Board found the investment management services provided by the Advisor to the Fund to be satisfactory and consistent with the management agreement.
Shareholder and Other Services. Under the management agreement, the Advisor provides the Fund with a comprehensive package of transfer agency, shareholder, and other services. The Board, directly and through its various committees, regularly reviews reports and evaluations of such services at its regular meetings. These reports include, but are not limited to, information regarding the operational efficiency and accuracy of the shareholder and transfer agency services
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provided, staffing levels, shareholder satisfaction, technology support (including cyber security), new products and services offered to Fund shareholders, securities trading activities, portfolio valuation services, auditing services, and legal and operational compliance activities. The Board found the services provided by the Advisor to the Fund under the management agreement to be competitive and of high quality.
COVID-19 Response. During 2020, much of the world experienced unprecedented change and challenges from the impacts of the rapidly evolving, worldwide spread of the COVID-19 virus. The Board evaluated the Advisor’s response to the COVID-19 pandemic and its impact on service to the Fund. The Board found that Fund shareholders have continued to receive the Advisor’s investment management and other services without disruption, and Advisor personnel have demonstrated great resiliency in providing those services. The Board, directly and through its Audit Committee, continues to monitor the impact of the pandemic and the response of each of the Fund’s service providers.
Costs of Services and Profitability. The Advisor provides detailed information concerning its cost of providing various services to the Fund, its profitability in managing the Fund (pre- and post-distribution), its overall profitability, and its financial condition. The Directors have reviewed with the Advisor the methodology used to prepare this financial information. This information is considered in evaluating the Advisor’s financial condition, its ability to continue to provide services under the management agreement, and the reasonableness of the current management fee. The Board concluded that the Advisor’s profits were reasonable in light of the services provided to the Fund.
Ethics. The Board generally considers the Advisor’s commitment to providing quality services to shareholders and to conducting its business ethically. They noted that the Advisor’s practices generally meet or exceed industry best practices.
Economies of Scale. The Board also reviewed information provided by the Advisor regarding the possible existence of economies of scale in connection with the management of the Fund. The Board concluded that economies of scale are difficult to measure and predict with precision, especially on a fund-by-fund basis. The Board concluded that the Advisor is appropriately sharing economies of scale, to the extent they exist, through its competitive fee structure, offering competitive fees from fund inception, and through reinvestment in its business, infrastructure, investment capabilities and initiatives to provide shareholders additional content and services. The Board also noted that economies of scale are shared with the Fund and its shareholders through management fee breakpoints that serve to reduce the effective management fee as the assets of the Fund grow.
Comparison to Other Funds’ Fees. The management agreement provides that the Fund pays the Advisor a single, all-inclusive (or unified) management fee for providing all services necessary for the management and operation of the Fund, other than brokerage expenses, expenses attributable to short sales, taxes, interest, extraordinary expenses, fees and expenses of the Fund’s independent Directors (including their independent legal counsel), and expenses incurred in connection with the provision of shareholder services and distribution services under a plan adopted pursuant to Rule 12b-1 under the Investment Company Act. 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 any applicable Rule 12b-1 distribution fees, all other components of the total fees charged by these other funds may be increased without shareholder approval. The Board believes the unified fee structure is a benefit to Fund shareholders because it clearly discloses to shareholders the cost of owning Fund shares, and, since 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
32
involves reviewing certain evaluative data compiled by an independent provider comparing the Fund’s unified fee to the total expense ratios of its peers. The unified fee charged to shareholders of the Fund was below the median of the total expense ratios of the Fund’s peer expense universe and was within the range of its peer expense group. The Board concluded that the management fee paid by the Fund to the Advisor under the management agreement is reasonable in light of the services provided to the Fund.
Comparison to Fees and Services Provided to Other Clients of the Advisor. The Board also requested and received information from the Advisor concerning the nature of the services, fees, costs, and profitability of its advisory services to advisory clients other than the Fund. They observed that these varying types of client accounts require different services and involve different regulatory and entrepreneurial risks than the management of the Fund. The Board analyzed this information and concluded that the fees charged and services provided to the Fund were reasonable by comparison.
Payments to Intermediaries. The Directors also requested and received a description of payments made to intermediaries by the Fund and the Advisor and services provided in response thereto. These payments include various payments made by the Fund or the Advisor to different types of intermediaries and recordkeepers for distribution and service activities provided for the Fund. The Directors reviewed such information and received representations from the Advisor that all such payments by the Fund were made pursuant to the Fund's Rule 12b-1 Plan and that all such payments by the Advisor were made from the Advisor’s resources and reasonable profits. The Board found such payments to be reasonable in scope and purpose.
Collateral or “Fall-Out” Benefits Derived by the Advisor. The Board considered the possible existence of collateral benefits the Advisor may receive as a result of its relationship with the Fund. They concluded that the Advisor’s primary business is managing mutual funds and it generally does not use fund or shareholder information to generate profits in other lines of business, and therefore does not derive any significant collateral benefits from them. To the extent there are potential collateral benefits, the board has been advised and has taken this into consideration in its review of the management contract with the Fund. The Board noted that additional assets from other clients may offer the Advisor some benefit from increased leverage with service providers and counterparties. Additionally, the Advisor may receive proprietary research from broker-dealers that execute fund portfolio transactions, which the Board concluded is likely to benefit other clients of the Advisor, as well as Fund shareholders. The Board also determined that the Advisor is able to provide investment management services to certain clients other than the Fund, at least in part, due to its existing infrastructure built to serve the fund complex. The Board concluded that appropriate allocation methodologies had been employed to assign resources and the cost of those resources to these other clients and, where expressly provided, these other client assets may be included with the assets of the Fund to determine breakpoints in the management fee schedule.
Existing Relationship. The Board also considered whether there was any reason for not continuing the existing arrangement with the Advisor. In this regard, the Board was mindful of the potential disruptions of the Fund’s operations and various risks, uncertainties, and other effects that could occur as a result of a decision not to continue such relationship. In particular, the Board recognized that most shareholders have invested in the Fund on the strength of the Advisor’s industry standing and reputation and in the expectation that the Advisor will have a continuing role in providing advisory services to the Fund.
Conclusion of the Directors. As a result of this process, the Board, including all of the independent Directors, taking into account all of the factors discussed above and the information provided by the Advisor and others in connection with its review and throughout the year, determined that the management fee is fair and reasonable in light of the services provided and that the investment management agreement between the Fund and the Advisor should be renewed.
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Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain retirement accounts are subject to federal income tax withholding, unless you elect not to have withholding apply*. Tax will be withheld on the total amount withdrawn even though you may be receiving amounts that are not subject to withholding, such as nondeductible contributions. In such case, excess amounts of withholding could occur. You may adjust your withholding election so that a greater or lesser amount will be withheld.
If you don’t want us to withhold on this amount, you must notify us to not withhold the federal income tax. You may notify us in writing or in certain situations by telephone or through other electronic means. For systematic withdrawals, your withholding election will remain in effect until revoked or changed by filing a new election. You have the right to revoke your election at any time and change your withholding percentage for future distributions.
Remember, even if you elect not to have income tax withheld, you are liable for paying income tax on the taxable portion of your withdrawal. If you elect not to have income tax withheld or you don’t have enough income tax withheld, you may be responsible for payment of estimated tax. You may incur penalties under the estimated tax rules if your withholding and estimated tax payments are not sufficient. You can reduce or defer the income tax on a distribution by directly or indirectly rolling such distribution over to another IRA or eligible plan. You should consult your tax advisor for additional information.
State tax will be withheld if, at the time of your distribution, your address is within one of the mandatory withholding states and you have federal income tax withheld (or as otherwise required by state law). State taxes will be withheld from your distribution in accordance with the respective state rules.
*Some 403(b), 457 and qualified retirement plan distributions may be subject to 20% mandatory withholding, as they are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
A description of the policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund is available without charge, upon request, by calling 1-800-345-2021. It is also available on American Century Investments’ website at americancentury.com/proxy 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 americancentury.com/proxy. 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 as an exhibit to its reports on
Form N-PORT. The fund’s Form N-PORT reports are available on the SEC’s website at sec.gov.
The fund also makes its complete schedule of portfolio holdings for the most recent quarter of its
fiscal year available on its website at americancentury.com and, upon request, by calling
1-800-345-2021.
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Other Tax Information
The following information is provided pursuant to provisions of the Internal Revenue Code.
The fund hereby designates up to the maximum amount allowable as qualified dividend income for the fiscal year ended November 30, 2020.
For corporate taxpayers, the fund hereby designates $310,524, or up to the maximum amount allowable, of ordinary income distributions paid during the fiscal year ended November 30, 2020 as qualified for the corporate dividends received deduction.
The fund hereby designates $99,545,250 or up to the maximum amount allowable, as long-term capital gains distributions (20% rate gain distributions) for the fiscal year ended November 30, 2020.
The fund hereby designates $2,114,687 as qualified short-term capital gain distributions for purposes of Internal Revenue Code Section 871 for the fiscal year ended November 30, 2020.
The fund utilized earnings and profits of $13,838,904 distributed to shareholders on redemption of shares as part of the dividends paid deduction (tax equalization).
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Notes |
36
Notes |
37
Notes |
38
Notes |
39
Notes |
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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. | ||||||||
©2021 American Century Proprietary Holdings, Inc. All rights reserved. CL-ANN-91028 2101 |
![image171.jpg](https://capedge.com/proxy/N-CSR/0000872825-21-000006/image171.jpg)
Annual Report | |||||
November 30, 2020 | |||||
Focused International Growth Fund | |||||
Investor Class (AFCNX) | |||||
I Class (AFCSX) | |||||
A Class (AFCLX) | |||||
C Class (AFCHX) | |||||
R Class (AFCWX) | |||||
R6 Class (AFCMX) | |||||
G Class (AFCGX) |
Table of Contents |
President’s Letter | |||||
Performance | |||||
Portfolio Commentary | |||||
Fund Characteristics | |||||
Shareholder Fee Example | |||||
Schedule of Investments | |||||
Statement of Assets and Liabilities | |||||
Statement of Operations | |||||
Statement of Changes in Net Assets | |||||
Notes to Financial Statements | |||||
Financial Highlights | |||||
Report of Independent Registered Public Accounting Firm | |||||
Management | |||||
Approval of Management Agreement | |||||
Additional Information |
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 |
![image141.jpg](https://capedge.com/proxy/N-CSR/0000872825-21-000006/image141.jpg)
Dear Investor:
Thank you for reviewing this annual report for the period ended November 30, 2020. Annual reports help convey important information about fund returns, including market factors that affected performance. For additional investment insights, please visit americancentury.com.
Stocks Recovered from Pandemic-Fueled Sell-Off
In late 2019, broad market sentiment was generally upbeat. Dovish central banks in developed markets, modest inflation, improving economic and corporate earnings data, and progress on U.S.-China trade policy helped boost global growth outlooks. Against this backdrop, riskier assets generally remained in favor.
However, beginning in late February, the COVID-19 outbreak rapidly spread worldwide, halting most economic activity and triggering a deep global recession. Global stocks sold off sharply amid a widespread flight to safety. Quick and aggressive action from the Federal Reserve and other central banks and federal governments helped stabilize and restore confidence in the financial markets. By summer, declining coronavirus infection and death rates in many regions and the reopening of economies were positive influences. By the end of November, most data suggested economies were recovering. But at the same time, COVID-19 infection rates were rising in the U.S. and Europe, prompting new lockdown measures that threatened the economic recovery.
Overall, global stocks overcame the effects of the early 2020 sell-off to deliver solid gains for the 12-month period. Emerging markets stocks rallied and outperformed developed markets stocks, while growth stocks significantly outpaced value stocks worldwide.
Science Helps Steer the Return to Normal
The return to pre-pandemic life will take time and patience, but we are confident we will get there. The first COVID-19 vaccine is now approved and in limited distribution, and medical professionals continue to develop better treatment protocols. Until the vaccine is widely available, investors likely will face periods of outbreak-related disruptions, economic uncertainty and heightened market volatility. These influences can be unsettling, but they tend to be temporary.
We appreciate your confidence in us during these extraordinary times. Our firm has a long history of helping clients weather unpredictable markets, and we’re confident we will continue to meet today’s challenges.
Sincerely,
![image231.jpg](https://capedge.com/proxy/N-CSR/0000872825-21-000006/image231.jpg)
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
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Performance |
Total Returns as of November 30, 2020 | ||||||||||||||||||||
Average Annual Returns | ||||||||||||||||||||
Ticker Symbol | 1 year | Since Inception | Inception Date | |||||||||||||||||
Investor Class | AFCNX | 31.15% | 14.78% | 3/29/16 | ||||||||||||||||
MSCI ACWI ex-U.S. Index | — | 9.52% | 8.83% | — | ||||||||||||||||
I Class | AFCSX | 31.39% | 15.01% | 3/29/16 | ||||||||||||||||
A Class | AFCLX | 3/29/16 | ||||||||||||||||||
No sales charge | 30.78% | 14.49% | ||||||||||||||||||
With sales charge | 23.27% | 13.05% | ||||||||||||||||||
C Class | AFCHX | 29.84% | 13.65% | 3/29/16 | ||||||||||||||||
R Class | AFCWX | 30.47% | 14.21% | 3/29/16 | ||||||||||||||||
R6 Class | AFCMX | 31.61% | 15.18% | 3/29/16 | ||||||||||||||||
G Class | AFCGX | 32.75% | 26.93% | 4/1/19 |
G Class returns would have been lower if a portion of the fees had not been waived. Extraordinary performance is attributable in part to unusually favorable market conditions and may not be repeated or consistently achieved.
Sales charges include initial sales charges and contingent deferred sales charges (CDSCs), as applicable. A Class shares have a 5.75% maximum initial sales charge and may be subject to a maximum CDSC of 1.00%. C Class shares redeemed within 12 months of purchase are subject to a maximum CDSC of 1.00%. The SEC requires that mutual funds provide performance information net of maximum sales charges in all cases where charges could be applied.
Data presented reflect past performance. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance shown. Total returns for periods less than one year are not annualized. Investment return and principal value will fluctuate, and redemption value may be more or less than original cost. Data assumes reinvestment of dividends and capital gains, and none of the charts reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. To obtain performance data current to the most recent month end, please call 1-800-345-2021 or visit americancentury.com. For additional information about the fund, please consult the prospectus.
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Growth of $10,000 Over Life of Class | ||
$10,000 investment made March 29, 2016 | ||
Performance for other share classes will vary due to differences in fee structure. |
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Value on November 30, 2020 | |||||
Investor Class — $19,055 | |||||
MSCI ACWI ex-U.S. Index — $14,855 | |||||
Total Annual Fund Operating Expenses | ||||||||||||||||||||
Investor Class | I Class | A Class | C Class | R Class | R6 Class | G Class | ||||||||||||||
1.10% | 0.90% | 1.35% | 2.10% | 1.60% | 0.75% | 0.75% |
The total annual fund operating expenses shown is as stated in the fund’s prospectus current as of the date of this report. The prospectus may vary from the expense ratio shown elsewhere in this report because it is based on a different time period, includes acquired fund fees and expenses, and, if applicable, does not include fee waivers or expense reimbursements.
Data presented reflect past performance. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance shown. Total returns for periods less than one year are not annualized. Investment return and principal value will fluctuate, and redemption value may be more or less than original cost. Data assumes reinvestment of dividends and capital gains, and none of the charts reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. To obtain performance data current to the most recent month end, please call 1-800-345-2021 or visit americancentury.com. For additional information about the fund, please consult the prospectus.
4
Portfolio Commentary |
Portfolio Managers: Raj Gandhi and Jim Zhao
Performance Summary
Focused International Growth returned 31.15%* for the fiscal year ended November 30, 2020, outperforming its benchmark, the MSCI ACWI ex-U.S. Index, which returned 9.52%.
Stock selection across a broad range of sectors propelled the fund’s outperformance, including information technology, financials, energy, consumer discretionary and communication services, while consumer staples holdings detracted. From a geographic perspective, Japan-based and European holdings contributed to returns.
The COVID-19 pandemic precipitated a health and economic crisis that plunged non-U.S. equities into bear market territory in the first quarter of 2020 as global supply chains were disrupted and lockdowns brought global demand to a halt. Our focus on firms with sustainable growth tied to company-specific structural or secular drivers rather than those levered to the economic cycle helped the portfolio weather the downturn. Stocks roared back amid record amounts of fiscal and monetary stimulus and earnings results that exceeded overly pessimistic expectations. Volatility persisted in the second half of the year, albeit less extreme, as the global economy recovered amid concerns about a second wave of the pandemic and the U.S. elections. Toward the end of the reporting period, progress on multiple coronavirus vaccines fueled investor optimism over the potential for a return to more normal economic activity in 2021 and drove strong gains among non-U.S. equities.
Stock Selection Key to Outperformance
A diverse array of information technology holdings fueled the fund’s outperformance. Payment processor Adyen gained on strong earnings amid the acceleration of beneficial trends, such as the shift from cash to card payments and the rise of online shopping. Factory automation specialist Keyence outperformed driven by increased demand for factory automation solutions supported by the need for improved efficiency and productivity. Cellular components supplier Murata Manufacturing saw strong order growth driven by demand for 5G.
Among financials, our disciplined selection process resulted in an underweight position relative to the benchmark in banks, which proved beneficial as low interest rates constrained banks’ earnings and hampered stock performance. In addition, several portfolio holdings outperformed, including London Stock Exchange Group, which is transitioning to a subscription-based data service business model, and Partners Group Holding, which continued to see increased investment returns.
Our focus on sustainable earnings growth also kept us away from most traditional oil and gas energy stocks. However, our selective investment in Neste, a leading producer of renewable diesel and jet fuel, ranked among the top individual contributors to performance. The stock advanced on strong growth in demand for renewable diesel. Neste’s proprietary technology allows for a variety of inputs, including animal waste, and results in transportation fuel that produces 90% less carbon dioxide emissions than traditional diesel.
*All fund returns referenced in this commentary are for Investor Class shares. Performance for other share classes will vary due to differences in fee structure; when Investor Class performance exceeds that of the fund’s benchmark, other share classes may not. See page 3 for returns for all share classes.
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Retailers Magazine Luiza and ASOS drove much of the fund’s consumer discretionary contribution. Magazine Luiza has excelled at integrating e-commerce into its existing store network, and the company experienced accelerating revenue and earnings growth driven by its e-commerce division, Magalu. The stock of ASOS also advanced sharply, propelled by strong reported results. The online apparel retailer benefited from improved consumer spending trends and the ongoing shift to online shopping. Sales increased amid higher demand, and profitability improved with a lower rate of returned orders.
Among communication services stocks, Cellnex Telecom showed significant strength. Substantial cell tower acquisition activity drove large increases in the firm’s revenue and earnings. Cellnex also saw robust customer activity with a rise in sites and new tenants in all its regions.
Notable individual contributors included Lonza Group, a contract manufacturer of drugs and specialty ingredients for the pharmaceuticals and biotechnology industries. The company reported strong results driven by continued demand for outsourced manufacturing services by pharmaceuticals and biotechnology firms. In addition, the stock reacted positively to Lonza’s deal to manufacture the majority of Moderna’s COVID-19 vaccine.
On the downside, Melrose Industries detracted from the fund’s performance. The turnaround specialist’s stock fell on significant weakness in the automotive and aerospace markets. A highly leveraged balance sheet raised potential liquidity concerns, and extreme end-market demand pressures reduced prospects for near-term earnings growth from synergies related to its acquisition of GKN. We sold the stock.
Portfolio Positioning
We remain committed to our disciplined, bottom-up process of identifying companies exhibiting accelerating, sustainable growth. This year has been volatile and one where we have had multiple pivots in our outlook due to COVID-19. While uncertainties remain over the current surge in coronavirus cases and additional lockdowns, we believe the efficacy and delivery of vaccines is a game-changer. In addition, other factors that weighed on sentiment simultaneously improved, including Brexit and the U.S. election. We think the distribution of the vaccine coupled with the massive amounts of fiscal and monetary stimulus could lead to a strong, synchronized global earnings recovery that is not fully reflected in analysts’ expectations. We continue to maintain exposure to companies benefiting from strong secular trends such as renewable energy and 5G that could accelerate with economic improvement. However, we expect to see a change in earnings leadership and have added to several names that should benefit from economic reopening and cyclical improvement. Information technology remains the fund’s largest overweight and is broadly diversified with exposure to different end markets, including 5G, automobiles, factory automation and digital solutions. The fund is also overweight to industrials with holdings that are exposed to cyclical improvement coupled with a strong competitive or structural advantage. Our bottom-up stock selection resulted in no exposure to consumer staples by the end of the reporting period.
Europe continues to be the fund’s largest regional exposure. The European Union’s 750 billion euro recovery plan represented a first-of-its-kind undertaking that could mean improved coordination of fiscal measures, central bank policy and debt across member states. In our view, such coordination, if successful, could potentially help Europe outperform other developed markets. We remain underweight to Japan and Asia in general.
6
Fund Characteristics |
NOVEMBER 30, 2020 | |||||
Top Ten Holdings | % of net assets | ||||
Taiwan Semiconductor Manufacturing Co. Ltd. | 3.8% | ||||
Schneider Electric SE | 3.0% | ||||
Infineon Technologies AG | 3.0% | ||||
Murata Manufacturing Co. Ltd. | 2.8% | ||||
Cellnex Telecom SA | 2.8% | ||||
Adyen NV | 2.8% | ||||
Recruit Holdings Co. Ltd. | 2.7% | ||||
Tencent Holdings Ltd. | 2.5% | ||||
Neste Oyj | 2.5% | ||||
Capgemini SE | 2.4% | ||||
Types of Investments in Portfolio | % of net assets | ||||
Common Stocks | 95.2% | ||||
Temporary Cash Investments | 4.4% | ||||
Temporary Cash Investments - Securities Lending Collateral | 2.4% | ||||
Other Assets and Liabilities | (2.0)% | ||||
Investments by Country | % of net assets | ||||
France | 21.4% | ||||
Japan | 12.3% | ||||
China | 8.0% | ||||
United Kingdom | 7.6% | ||||
Germany | 7.4% | ||||
Spain | 5.9% | ||||
Sweden | 4.4% | ||||
Switzerland | 4.2% | ||||
Taiwan | 3.8% | ||||
Hong Kong | 3.7% | ||||
Denmark | 3.6% | ||||
Netherlands | 2.8% | ||||
Finland | 2.5% | ||||
India | 2.1% | ||||
Australia | 2.0% | ||||
Other Countries | 3.5% | ||||
Cash and Equivalents* | 4.8% |
*Includes temporary cash investments, temporary cash investments - securities lending collateral and other assets and liabilities.
7
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 June 1, 2020 to November 30, 2020.
Actual Expenses
The table provides information about actual account values and actual expenses for each class. You may use the information, together with the amount you invested, to estimate the expenses that you paid over the period. First, identify the share class you own. Then simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
If you hold Investor Class shares of any American Century Investments fund, or I Class shares of the American Century Diversified Bond Fund, in an American Century Investments account (i.e., not through a financial intermediary or employer-sponsored retirement plan account), American Century Investments may charge you a $25.00 annual 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 $25.00 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.
8
Beginning Account Value 6/1/20 | Ending Account Value 11/30/20 | Expenses Paid During Period(1) 6/1/20 - 11/30/20 | Annualized Expense Ratio(1) | |||||||||||
Actual | ||||||||||||||
Investor Class | $1,000 | $1,332.40 | $6.59 | 1.13% | ||||||||||
I Class | $1,000 | $1,333.80 | $5.43 | 0.93% | ||||||||||
A Class | $1,000 | $1,330.60 | $8.04 | 1.38% | ||||||||||
C Class | $1,000 | $1,326.50 | $12.39 | 2.13% | ||||||||||
R Class | $1,000 | $1,328.60 | $9.49 | 1.63% | ||||||||||
R6 Class | $1,000 | $1,334.10 | $4.55 | 0.78% | ||||||||||
G Class | $1,000 | $1,340.80 | $0.00 | 0.00%(2) | ||||||||||
Hypothetical | ||||||||||||||
Investor Class | $1,000 | $1,019.35 | $5.70 | 1.13% | ||||||||||
I Class | $1,000 | $1,020.35 | $4.70 | 0.93% | ||||||||||
A Class | $1,000 | $1,018.10 | $6.96 | 1.38% | ||||||||||
C Class | $1,000 | $1,014.35 | $10.73 | 2.13% | ||||||||||
R Class | $1,000 | $1,016.85 | $8.22 | 1.63% | ||||||||||
R6 Class | $1,000 | $1,021.10 | $3.94 | 0.78% | ||||||||||
G Class | $1,000 | $1,025.00 | $0.00 | 0.00%(2) |
(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. Annualized expense ratio reflects actual expenses, including any applicable fee waivers or expense reimbursements and excluding any acquired fund fees and expenses.
(2)Other expenses, which include directors' fees and expenses, did not exceed 0.005%.
9
Schedule of Investments |
NOVEMBER 30, 2020
Shares | Value | |||||||
COMMON STOCKS — 95.2% | ||||||||
Australia — 2.0% | ||||||||
CSL Ltd. | 1,910 | $ | 417,207 | |||||
Brazil — 1.6% | ||||||||
Magazine Luiza SA | 78,164 | 341,112 | ||||||
Canada — 1.9% | ||||||||
Element Fleet Management Corp. | 38,180 | 388,356 | ||||||
China — 8.0% | ||||||||
Alibaba Group Holding Ltd., ADR(1) | 1,790 | 471,414 | ||||||
ANTA Sports Products Ltd. | 23,000 | 313,801 | ||||||
GDS Holdings Ltd., ADR(1) | 3,800 | 342,114 | ||||||
Tencent Holdings Ltd. | 7,200 | 524,095 | ||||||
1,651,424 | ||||||||
Denmark — 3.6% | ||||||||
DSV Panalpina A/S | 2,290 | 360,498 | ||||||
Novo Nordisk A/S, B Shares | 5,700 | 382,821 | ||||||
743,319 | ||||||||
Finland — 2.5% | ||||||||
Neste Oyj | 7,830 | 522,023 | ||||||
France — 21.4% | ||||||||
Air Liquide SA | 2,170 | 355,317 | ||||||
Arkema SA | 2,300 | 267,457 | ||||||
Capgemini SE | 3,650 | 504,441 | ||||||
Dassault Systemes SE | 1,740 | 320,852 | ||||||
Edenred | 7,160 | 408,329 | ||||||
LVMH Moet Hennessy Louis Vuitton SE | 810 | 464,736 | ||||||
Safran SA(1) | 3,300 | 479,277 | ||||||
Schneider Electric SE | 4,540 | 629,806 | ||||||
Teleperformance | 1,480 | 491,881 | ||||||
Valeo SA | 12,990 | 501,281 | ||||||
4,423,377 | ||||||||
Germany — 7.4% | ||||||||
Infineon Technologies AG | 17,415 | 612,157 | ||||||
Knorr-Bremse AG | 3,831 | 489,821 | ||||||
Puma SE(1) | 4,340 | 431,067 | ||||||
1,533,045 | ||||||||
Hong Kong — 3.7% | ||||||||
AIA Group Ltd. | 30,000 | 327,691 | ||||||
Techtronic Industries Co. Ltd. | 33,500 | 430,238 | ||||||
757,929 | ||||||||
India — 2.1% | ||||||||
HDFC Bank Ltd., ADR(1) | 6,280 | 433,320 | ||||||
Japan — 12.3% | ||||||||
Keyence Corp. | 900 | 457,435 | ||||||
MonotaRO Co. Ltd. | 5,600 | 341,387 | ||||||
Murata Manufacturing Co. Ltd. | 6,700 | 587,584 | ||||||
Olympus Corp. | 16,300 | 353,929 | ||||||
Pan Pacific International Holdings Corp. | 11,100 | 262,922 |
10
Shares | Value | |||||||
Recruit Holdings Co. Ltd. | 13,100 | $ | 548,964 | |||||
2,552,221 | ||||||||
Netherlands — 2.8% | ||||||||
Adyen NV(1) | 299 | 570,354 | ||||||
Spain — 5.9% | ||||||||
CaixaBank SA | 77,580 | 197,970 | ||||||
Cellnex Telecom SA | 9,264 | 583,457 | ||||||
Iberdrola SA | 32,864 | 447,849 | ||||||
1,229,276 | ||||||||
Sweden — 4.4% | ||||||||
Hexagon AB, B Shares(1)(2) | 5,740 | 475,231 | ||||||
Telefonaktiebolaget LM Ericsson, B Shares | 36,310 | 442,987 | ||||||
918,218 | ||||||||
Switzerland — 4.2% | ||||||||
Lonza Group AG | 720 | 450,779 | ||||||
Partners Group Holding AG | 390 | 415,530 | ||||||
866,309 | ||||||||
Taiwan — 3.8% | ||||||||
Taiwan Semiconductor Manufacturing Co. Ltd. | 46,000 | 776,945 | ||||||
United Kingdom — 7.6% | ||||||||
ASOS plc(1) | 5,270 | 325,050 | ||||||
AstraZeneca plc | 3,960 | 414,904 | ||||||
London Stock Exchange Group plc | 3,900 | 420,818 | ||||||
Whitbread plc(1) | 10,410 | 421,511 | ||||||
1,582,283 | ||||||||
TOTAL COMMON STOCKS (Cost $12,566,570) | 19,706,718 | |||||||
TEMPORARY CASH INVESTMENTS — 4.4% | ||||||||
Repurchase Agreement, BMO Capital Markets Corp., (collateralized by various U.S. Treasury obligations, 0.625% - 1.375%, 1/31/25 - 5/15/30, valued at $435,629), in a joint trading account at 0.06%, dated 11/30/20, due 12/1/20 (Delivery value $426,689) | 426,688 | |||||||
Repurchase Agreement, Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 0.625%, 5/15/30, valued at $488,664), at 0.07%, dated 11/30/20, due 12/1/20 (Delivery value $479,001) | 479,000 | |||||||
State Street Institutional U.S. Government Money Market Fund, Premier Class | 22 | 22 | ||||||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $905,710) | 905,710 | |||||||
TEMPORARY CASH INVESTMENTS - SECURITIES LENDING COLLATERAL(3) — 2.4% | ||||||||
State Street Navigator Securities Lending Government Money Market Portfolio (Cost $495,908) | 495,908 | 495,908 | ||||||
TOTAL INVESTMENT SECURITIES — 102.0% (Cost $13,968,188) | 21,108,336 | |||||||
OTHER ASSETS AND LIABILITIES — (2.0)% | (410,994) | |||||||
TOTAL NET ASSETS — 100.0% | $ | 20,697,342 |
11
MARKET SECTOR DIVERSIFICATION | |||||
(as a % of net assets) | |||||
Information Technology | 26.6 | % | |||
Industrials | 18.2 | % | |||
Consumer Discretionary | 17.1 | % | |||
Financials | 10.5 | % | |||
Health Care | 9.8 | % | |||
Communication Services | 5.3 | % | |||
Materials | 3.0 | % | |||
Energy | 2.5 | % | |||
Utilities | 2.2 | % | |||
Cash and Equivalents* | 4.8 | % |
*Includes temporary cash investments, temporary cash investments - securities lending collateral and other assets and liabilities.
NOTES TO SCHEDULE OF INVESTMENTS | ||||||||
ADR | - | American Depositary Receipt |
(1)Non-income producing.
(2)Security, or a portion thereof, is on loan. At the period end, the aggregate value of securities on loan was $469,767. The amount of securities on loan indicated may not correspond with the securities on loan identified because securities with pending sales are in the process of recall from the brokers.
(3)Investment of cash collateral from securities on loan. At the period end, the aggregate value of the collateral held by the fund was $495,908.
See Notes to Financial Statements.
12
Statement of Assets and Liabilities |
NOVEMBER 30, 2020 | |||||
Assets | |||||
Investment securities, at value (cost of $13,472,280) — including $469,767 of securities on loan | $ | 20,612,428 | |||
Investment made with cash collateral received for securities on loan, at value (cost of $495,908) | 495,908 | ||||
Total investment securities, at value (cost of $13,968,188) | 21,108,336 | ||||
Foreign currency holdings, at value (cost of $4,289) | 4,275 | ||||
Receivable for capital shares sold | 76,586 | ||||
Dividends and interest receivable | 18,543 | ||||
Securities lending receivable | 21 | ||||
21,207,761 | |||||
Liabilities | |||||
Payable for collateral received for securities on loan | 495,908 | ||||
Payable for capital shares redeemed | 1,000 | ||||
Accrued management fees | 12,959 | ||||
Distribution and service fees payable | 552 | ||||
510,419 | |||||
Net Assets | $ | 20,697,342 | |||
Net Assets Consist of: | |||||
Capital (par value and paid-in surplus) | $ | 13,636,883 | |||
Distributable earnings | 7,060,459 | ||||
$ | 20,697,342 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | |||||||||
Investor Class, $0.01 Par Value | $9,749,276 | 535,589 | $18.20 | ||||||||
I Class, $0.01 Par Value | $5,584,687 | 305,231 | $18.30 | ||||||||
A Class, $0.01 Par Value | $85,106 | 4,709 | $18.07* | ||||||||
C Class, $0.01 Par Value | $49,388 | 2,808 | $17.59 | ||||||||
R Class, $0.01 Par Value | $683,310 | 38,065 | $17.95 | ||||||||
R6 Class, $0.01 Par Value | $189,646 | 10,322 | $18.37 | ||||||||
G Class, $0.01 Par Value | $4,355,929 | 233,617 | $18.65 |
*Maximum offering price $19.17 (net asset value divided by 0.9425).
See Notes to Financial Statements.
13
Statement of Operations |
YEAR ENDED NOVEMBER 30, 2020 | |||||
Investment Income (Loss) | |||||
Income: | |||||
Dividends (net of foreign taxes withheld of $21,108) | $ | 170,925 | |||
Interest | 1,905 | ||||
Securities lending, net | 860 | ||||
173,690 | |||||
Expenses: | |||||
Management fees | 170,150 | ||||
Distribution and service fees: | |||||
A Class | 2,023 | ||||
C Class | 7,752 | ||||
R Class | 2,946 | ||||
Directors' fees and expenses | 494 | ||||
Other expenses | 112 | ||||
183,477 | |||||
Fees waived - G Class | (22,851) | ||||
160,626 | |||||
Net investment income (loss) | 13,064 | ||||
Realized and Unrealized Gain (Loss) | |||||
Net realized gain (loss) on: | |||||
Investment transactions | (47,774) | ||||
Foreign currency translation transactions | (4,927) | ||||
(52,701) | |||||
Change in net unrealized appreciation (depreciation) on: | |||||
Investments | 4,859,802 | ||||
Translation of assets and liabilities in foreign currencies | 1,862 | ||||
4,861,664 | |||||
Net realized and unrealized gain (loss) | 4,808,963 | ||||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 4,822,027 |
See Notes to Financial Statements.
14
Statement of Changes in Net Assets |
YEARS ENDED NOVEMBER 30, 2020 AND NOVEMBER 30, 2019 | ||||||||
Increase (Decrease) in Net Assets | November 30, 2020 | November 30, 2019 | ||||||
Operations | ||||||||
Net investment income (loss) | $ | 13,064 | $ | 5,355 | ||||
Net realized gain (loss) | (52,701) | 603,228 | ||||||
Change in net unrealized appreciation (depreciation) | 4,861,664 | 1,322,654 | ||||||
Net increase (decrease) in net assets resulting from operations | 4,822,027 | 1,931,237 | ||||||
Distributions to Shareholders | ||||||||
From earnings: | ||||||||
Investor Class | (231,555) | (31,989) | ||||||
I Class | (86,412) | (5,626) | ||||||
A Class | (26,816) | (3,404) | ||||||
C Class | (26,219) | — | ||||||
R Class | (16,491) | (167) | ||||||
R6 Class | (5,882) | (2,051) | ||||||
G Class | (46,910) | — | ||||||
Decrease in net assets from distributions | (440,285) | (43,237) | ||||||
Capital Share Transactions | ||||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | 3,612,428 | 823,591 | ||||||
Net increase (decrease) in net assets | 7,994,170 | 2,711,591 | ||||||
Net Assets | ||||||||
Beginning of period | 12,703,172 | 9,991,581 | ||||||
End of period | $ | 20,697,342 | $ | 12,703,172 |
See Notes to Financial Statements.
15
Notes to Financial Statements |
NOVEMBER 30, 2020
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, I Class, A Class, C Class, R Class, R6 Class and G 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. Sale of the G Class commenced on April 1, 2019.
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 (NAV) 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 NAV 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.
16
The fund monitors for significant events occurring after the close of an investment’s primary exchange but before the fund’s NAV 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. 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. Securities lending income is net of fees and rebates earned by the lending agent for its services.
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.
Segregated Assets — In accordance with the 1940 Act, the fund segregates assets on its books and records to cover certain types of investment securities and other financial instruments. ACIM monitors, on a daily basis, the securities segregated to ensure the fund designates a sufficient amount of liquid assets, marked-to-market daily. The fund may also receive assets or be required to pledge assets at the custodian bank or with a broker for collateral requirements.
Income Tax Status — It is the fund’s policy to distribute substantially all net investment income and net realized gains to shareholders and to otherwise qualify as a regulated investment company under provisions of the Internal Revenue Code. Accordingly, no provision has been made for income taxes. The fund files U.S. federal, state, local and non-U.S. tax returns as applicable. The fund's tax returns are subject to examination by the relevant taxing authority until expiration of the applicable statute of limitations, which is generally three years from the date of filing but can be longer in certain jurisdictions. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination and for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
17
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 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.
Securities Lending — Securities are lent to qualified financial institutions and brokers. State Street Bank & Trust Co. serves as securities lending agent to the fund pursuant to a Securities Lending Agreement. The lending of securities exposes the fund to risks such as: the borrowers may fail to return the loaned securities, the borrowers may not be able to provide additional collateral, the fund may experience delays in recovery of the loaned securities or delays in access to collateral, or the fund may experience losses related to the investment collateral. To minimize certain risks, loan counterparties pledge collateral in the form of cash and/or securities. The lending agent has agreed to indemnify the fund in the case of default of any securities borrowed. Cash collateral received is invested in the State Street Navigator Securities Lending Government Money Market Portfolio, a money market mutual fund registered under the 1940 Act. The loans may also be secured by U.S. government securities in an amount at least equal to the market value of the securities loaned, plus accrued interest and dividends, determined on a daily basis and adjusted accordingly. By lending securities, the fund seeks to increase its net investment income through the receipt of interest and fees. Such income is reflected separately within the Statement of Operations. The value of loaned securities and related collateral outstanding at period end, if any, are shown on a gross basis within the Schedule of Investments and Statement of Assets and Liabilities.
The following table reflects a breakdown of transactions accounted for as secured borrowings, the gross obligation by the type of collateral pledged, and the remaining contractual maturity of those transactions as of November 30, 2020.
Remaining Contractual Maturity of Agreements | |||||||||||||||||
Overnight and Continuous | <30 days | Between 30 & 90 days | >90 days | Total | |||||||||||||
Securities Lending Transactions(1) | |||||||||||||||||
Common Stocks | $ | 495,908 | — | — | — | $ | 495,908 | ||||||||||
Gross amount of recognized liabilities for securities lending transactions | $ | 495,908 |
(1) Amount represents the payable for cash collateral received for securities on loan. This will generally be in the Overnight and Continuous column as the securities are typically callable on demand.
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.
18
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 ACIM will pay all expenses of managing and operating the fund, except brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), extraordinary expenses, and expenses incurred in connection with the provision of shareholder services and distribution services under a plan adopted pursuant to Rule 12b-1 under the 1940 Act. The fee is computed and accrued daily based on each class's daily net assets and paid monthly in arrears. The difference in the fee among the classes is a result of their separate arrangements for non-Rule 12b-1 shareholder services. It is not the result of any difference in advisory or custodial fees or other expenses related to the management of the fund’s assets, which do not vary by class. The investment advisor agreed to waive the G Class's management fee in its entirety. The investment advisor expects this waiver to remain in effect permanently and cannot terminate it without the approval of the Board of Directors. Effective August 1, 2020, the investment advisor decreased the annual management fee by 0.14%.
The annual management fee and the effective annual management fee for each class for the period ended November 30, 2020 are as follows:
Annual Management Fee* | Effective Annual Management Fee | |||||||
Investor Class | 1.09% | 1.18% | ||||||
I Class | 0.89% | 0.98% | ||||||
A Class | 1.09% | 1.18% | ||||||
C Class | 1.09% | 1.18% | ||||||
R Class | 1.09% | 1.18% | ||||||
R6 Class | 0.74% | 0.83% | ||||||
G Class | 0.00%(1) | 0.00%(2) |
*Prior to August 1, 2020, the annual management fee was 1.23% for the Investor Class, A Class, C Class and R Class, 1.03% for the I Class and 0.88% for the R6 and G Class.
(1)Annual management fee before waiver was 0.74%.
(2)Effective annual management fee before waiver was 0.83%.
Distribution and Service Fees — The Board of Directors has adopted a separate Master Distribution and Individual Shareholder Services Plan for each of the A Class, C Class and R Class (collectively the plans), pursuant to Rule 12b-1 of the 1940 Act. The plans provide that the A Class will pay ACIS an annual distribution and service fee of 0.25%. The plans provide that the C Class will pay ACIS an annual distribution and service fee of 1.00%, of which 0.25% is paid for individual shareholder services and 0.75% is paid for distribution services. The plans provide that the R Class will pay ACIS an annual distribution and service fee of 0.50%. The fees are computed and accrued daily based on each class’s daily net assets and paid monthly in arrears. The fees are used to pay financial intermediaries for distribution and individual shareholder services. Fees incurred under the plans during the period ended November 30, 2020 are detailed in the Statement of Operations.
Directors' Fees and Expenses — The Board of Directors is responsible for overseeing the investment advisor’s management and operations of the fund. The directors receive detailed information about the fund and its investment advisor regularly throughout the year, and meet at least quarterly with management of the investment advisor to review reports about fund operations. The fund’s officers do not receive compensation from the fund.
Interfund Transactions — The fund may enter into security transactions with other American Century Investments funds and other client accounts of the investment advisor, in accordance with the 1940 Act rules and procedures adopted by the Board of Directors. The rules and procedures require, among other things, that these transactions be effected at the independent current market price of the security. There were no interfund transactions during the period.
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the period ended November 30, 2020 were $16,851,254 and $14,153,117, respectively.
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5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Year ended November 30, 2020 | Year ended November 30, 2019(1) | |||||||||||||
Shares | Amount | Shares | Amount | |||||||||||
Investor Class/Shares Authorized | 50,000,000 | 50,000,000 | ||||||||||||
Sold | 444,978 | $ | 6,842,135 | 181,700 | $ | 2,441,852 | ||||||||
Issued in reinvestment of distributions | 16,376 | 229,083 | 2,828 | 31,989 | ||||||||||
Redeemed | (391,362) | (5,932,032) | (237,365) | (3,054,194) | ||||||||||
69,992 | 1,139,186 | (52,837) | (580,353) | |||||||||||
I Class/Shares Authorized | 30,000,000 | 30,000,000 | ||||||||||||
Sold | 360,602 | 5,962,098 | 145,088 | 2,001,579 | ||||||||||
Issued in reinvestment of distributions | 6,159 | 86,412 | 497 | 5,626 | ||||||||||
Redeemed | (242,553) | (3,916,623) | (29,472) | (392,509) | ||||||||||
124,208 | 2,131,887 | 116,113 | 1,614,696 | |||||||||||
A Class/Shares Authorized | 30,000,000 | 30,000,000 | ||||||||||||
Sold | 3,159 | 53,590 | — | — | ||||||||||
Issued in reinvestment of distributions | 1,925 | 26,816 | 301 | 3,404 | ||||||||||
Redeemed | (57,907) | (1,014,907) | (45,299) | (601,599) | ||||||||||
(52,823) | (934,501) | (44,998) | (598,195) | |||||||||||
C Class/Shares Authorized | 30,000,000 | 30,000,000 | ||||||||||||
Sold | 2,105 | 31,528 | 970 | 13,149 | ||||||||||
Issued in reinvestment of distributions | 1,921 | 26,219 | — | — | ||||||||||
Redeemed | (57,410) | (979,320) | (44,793) | (585,022) | ||||||||||
(53,384) | (921,573) | (43,823) | (571,873) | |||||||||||
R Class/Shares Authorized | 20,000,000 | 20,000,000 | ||||||||||||
Sold | 24,980 | 357,602 | 9,081 | 117,317 | ||||||||||
Issued in reinvestment of distributions | 1,193 | 16,491 | 15 | 167 | ||||||||||
Redeemed | (21,018) | (324,511) | (10,549) | (137,759) | ||||||||||
5,155 | 49,582 | (1,453) | (20,275) | |||||||||||
R6 Class/Shares Authorized | 20,000,000 | 20,000,000 | ||||||||||||
Sold | 170 | 2,596 | 1,611 | 19,127 | ||||||||||
Issued in reinvestment of distributions | 418 | 5,882 | 181 | 2,051 | ||||||||||
Redeemed | (2,884) | (50,420) | (9,399) | (125,437) | ||||||||||
(2,296) | (41,942) | (7,607) | (104,259) | |||||||||||
G Class/Shares Authorized | 40,000,000 | 40,000,000 | ||||||||||||
Sold | 178,453 | 2,580,442 | 84,787 | 1,148,841 | ||||||||||
Issued in reinvestment of distributions | 3,350 | 46,910 | — | — | ||||||||||
Redeemed | (28,318) | (437,563) | (4,655) | (64,991) | ||||||||||
153,485 | 2,189,789 | 80,132 | 1,083,850 | |||||||||||
Net increase (decrease) | 244,337 | $ | 3,612,428 | 45,527 | $ | 823,591 |
(1)April 1, 2019 (commencement of sale) through November 30, 2019 for the G Class.
20
6. Fair Value Measurements
The fund’s investments valuation process is based on several considerations and may use multiple inputs to determine the fair value of the investments held by the fund. In conformity with accounting principles generally accepted in the United States of America, the inputs used to determine a valuation are classified into three broad levels.
•Level 1 valuation inputs consist of unadjusted quoted prices in an active market for identical investments.
•Level 2 valuation inputs consist of direct or indirect observable market data (including quoted prices for comparable investments, evaluations of subsequent market events, interest rates, prepayment speeds, credit risk, etc.). These inputs also consist of quoted prices for identical investments initially expressed in local currencies that are adjusted through translation into U.S. dollars.
•Level 3 valuation inputs consist of unobservable data (including a fund’s own assumptions).
The level classification is based on the lowest level input that is significant to the fair valuation measurement. The valuation inputs are not necessarily an indication of the risks associated with investing in these securities or other financial instruments.
The following is a summary of the level classifications as of period end. The Schedule of Investments provides additional information on the fund’s portfolio holdings.
Level 1 | Level 2 | Level 3 | |||||||||
Assets | |||||||||||
Investment Securities | |||||||||||
Common Stocks | |||||||||||
China | $ | 813,528 | $ | 837,896 | — | ||||||
India | 433,320 | — | — | ||||||||
Other Countries | — | 17,621,974 | — | ||||||||
Temporary Cash Investments | 22 | 905,688 | — | ||||||||
Temporary Cash Investments - Securities Lending Collateral | 495,908 | — | — | ||||||||
$ | 1,742,778 | $ | 19,365,558 | — |
7. Risk Factors
The value of the fund’s shares will go up and down, sometimes rapidly or unpredictably, based on the performance of the securities owned by the fund and other factors generally affecting the securities market. Market risks, including political, regulatory, economic and social developments, can affect the value of the fund’s investments. Natural disasters, public health emergencies, terrorism and other unforeseeable events may lead to increased market volatility and may have adverse long-term effects on world economies and markets generally.
There are certain risks involved in investing in foreign securities. These risks include those resulting from political events (such as civil unrest, national elections and imposition of exchange controls), social and economic events (such as labor strikes and rising inflation), and natural disasters. Securities of foreign issuers may be less liquid and more volatile. Investing in emerging markets or a significant portion of assets in one country or region may accentuate these risks.
8. Federal Tax Information
The tax character of distributions paid during the years ended November 30, 2020 and November 30, 2019 were as follows:
2020 | 2019 | |||||||
Distributions Paid From | ||||||||
Ordinary income | $ | 83 | $ | 43,237 | ||||
Long-term capital gains | $ | 440,202 | — |
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The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
As of period end, the federal tax cost of investments and the components of distributable earnings on a tax-basis were as follows:
Federal tax cost of investments | $ | 14,027,650 | |||
Gross tax appreciation of investments | $ | 7,090,673 | |||
Gross tax depreciation of investments | (9,987) | ||||
Net tax appreciation (depreciation) of investments | 7,080,686 | ||||
Net tax appreciation (depreciation) on translation of assets and liabilities in foreign currencies | 1,070 | ||||
Net tax appreciation (depreciation) | $ | 7,081,756 | |||
Undistributed ordinary income | $ | 8,054 | |||
Accumulated short-term capital losses | $ | (29,351) |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales.
Accumulated capital losses 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.
22
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 | |||||||||||||||||||||||||||||||||||||||||
2020 | $14.34 | (0.01) | 4.33 | 4.32 | — | (0.46) | (0.46) | $18.20 | 31.15% | 1.18% | (0.09)% | 92% | $9,749 | ||||||||||||||||||||||||||||
2019 | $11.92 | 0.02 | 2.46 | 2.48 | (0.06) | — | (0.06) | $14.34 | 20.96% | 1.24% | 0.13% | 96% | $6,677 | ||||||||||||||||||||||||||||
2018 | $12.81 | 0.08 | (0.97) | (0.89) | — | — | — | $11.92 | (6.95)% | 1.23% | 0.59% | 82% | $6,180 | ||||||||||||||||||||||||||||
2017 | $9.75 | 0.01 | 3.13 | 3.14 | (0.08) | — | (0.08) | $12.81 | 32.40% | 1.24% | 0.14% | 76% | $5,882 | ||||||||||||||||||||||||||||
2016(3) | $10.00 | 0.04 | (0.29) | (0.25) | — | — | — | $9.75 | (2.50)% | 1.23%(4) | 0.56%(4) | 47% | $2,074 | ||||||||||||||||||||||||||||
I Class | |||||||||||||||||||||||||||||||||||||||||
2020 | $14.39 | 0.01 | 4.36 | 4.37 | — | (0.46) | (0.46) | $18.30 | 31.39% | 0.98% | 0.11% | 92% | $5,585 | ||||||||||||||||||||||||||||
2019 | $11.96 | 0.02 | 2.49 | 2.51 | (0.08) | — | (0.08) | $14.39 | 21.21% | 1.04% | 0.33% | 96% | $2,605 | ||||||||||||||||||||||||||||
2018 | $12.83 | 0.09 | (0.96) | (0.87) | — | — | — | $11.96 | (6.78)% | 1.03% | 0.79% | 82% | $776 | ||||||||||||||||||||||||||||
2017 | $9.76 | 0.05 | 3.11 | 3.16 | (0.09) | — | (0.09) | $12.83 | 32.74% | 1.04% | 0.34% | 76% | $777 | ||||||||||||||||||||||||||||
2016(3) | $10.00 | 0.05 | (0.29) | (0.24) | — | — | — | $9.76 | (2.40)% | 1.03%(4) | 0.76%(4) | 47% | $586 | ||||||||||||||||||||||||||||
A Class | |||||||||||||||||||||||||||||||||||||||||
2020 | $14.28 | (0.04) | 4.29 | 4.25 | — | (0.46) | (0.46) | $18.07 | 30.78% | 1.43% | (0.34)% | 92% | $85 | ||||||||||||||||||||||||||||
2019 | $11.87 | —(5) | 2.44 | 2.44 | (0.03) | — | (0.03) | $14.28 | 20.66% | 1.49% | (0.12)% | 96% | $822 | ||||||||||||||||||||||||||||
2018 | $12.79 | 0.03 | (0.95) | (0.92) | — | — | — | $11.87 | (7.19)% | 1.48% | 0.34% | 82% | $1,217 | ||||||||||||||||||||||||||||
2017 | $9.73 | (0.01) | 3.12 | 3.11 | (0.05) | — | (0.05) | $12.79 | 32.13% | 1.49% | (0.11)% | 76% | $1,295 | ||||||||||||||||||||||||||||
2016(3) | $10.00 | 0.02 | (0.29) | (0.27) | — | — | — | $9.73 | (2.70)% | 1.48%(4) | 0.31%(4) | 47% | $978 |
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) | |||||||||||||||||||||||||||||
C Class | |||||||||||||||||||||||||||||||||||||||||
2020 | $14.01 | (0.14) | 4.18 | 4.04 | — | (0.46) | (0.46) | $17.59 | 29.84% | 2.18% | (1.09)% | 92% | $49 | ||||||||||||||||||||||||||||
2019 | $11.70 | (0.09) | 2.40 | 2.31 | — | — | — | $14.01 | 19.85% | 2.24% | (0.87)% | 96% | $787 | ||||||||||||||||||||||||||||
2018 | $12.70 | (0.07) | (0.93) | (1.00) | — | — | — | $11.70 | (7.95)% | 2.23% | (0.41)% | 82% | $1,170 | ||||||||||||||||||||||||||||
2017 | $9.68 | (0.09) | 3.11 | 3.02 | — | — | — | $12.70 | 31.20% | 2.24% | (0.86)% | 76% | $1,270 | ||||||||||||||||||||||||||||
2016(3) | $10.00 | (0.03) | (0.29) | (0.32) | — | — | — | $9.68 | (3.20)% | 2.23%(4) | (0.44)%(4) | 47% | $968 | ||||||||||||||||||||||||||||
R Class | |||||||||||||||||||||||||||||||||||||||||
2020 | $14.22 | (0.08) | 4.27 | 4.19 | — | (0.46) | (0.46) | $17.95 | 30.47% | 1.68% | (0.59)% | 92% | $683 | ||||||||||||||||||||||||||||
2019 | $11.82 | (0.04) | 2.44 | 2.40 | —(5) | — | —(5) | $14.22 | 20.36% | 1.74% | (0.37)% | 96% | $468 | ||||||||||||||||||||||||||||
2018 | $12.77 | —(5) | (0.95) | (0.95) | — | — | — | $11.82 | (7.44)% | 1.73% | 0.09% | 82% | $406 | ||||||||||||||||||||||||||||
2017 | $9.72 | (0.04) | 3.12 | 3.08 | (0.03) | — | (0.03) | $12.77 | 31.73% | 1.74% | (0.36)% | 76% | $298 | ||||||||||||||||||||||||||||
2016(3) | $10.00 | —(5) | (0.28) | (0.28) | — | — | — | $9.72 | (2.80)% | 1.73%(4) | 0.06%(4) | 47% | $196 | ||||||||||||||||||||||||||||
R6 Class | |||||||||||||||||||||||||||||||||||||||||
2020 | $14.42 | 0.05 | 4.36 | 4.41 | — | (0.46) | (0.46) | $18.37 | 31.61% | 0.83% | 0.26% | 92% | $190 | ||||||||||||||||||||||||||||
2019 | $11.99 | 0.08 | 2.45 | 2.53 | (0.10) | — | (0.10) | $14.42 | 21.34% | 0.89% | 0.48% | 96% | $182 | ||||||||||||||||||||||||||||
2018 | $12.84 | 0.11 | (0.96) | (0.85) | — | — | — | $11.99 | (6.62)% | 0.88% | 0.94% | 82% | $242 | ||||||||||||||||||||||||||||
2017 | $9.77 | 0.06 | 3.12 | 3.18 | (0.11) | — | (0.11) | $12.84 | 32.90% | 0.89% | 0.49% | 76% | $260 | ||||||||||||||||||||||||||||
2016(3) | $10.00 | 0.06 | (0.29) | (0.23) | — | — | — | $9.77 | (2.30)% | 0.88%(4) | 0.91%(4) | 47% | $195 | ||||||||||||||||||||||||||||
G Class | |||||||||||||||||||||||||||||||||||||||||
2020 | $14.51 | 0.17 | 4.43 | 4.60 | — | (0.46) | (0.46) | $18.65 | 32.75% | 0.00%(6) | 1.09%(6) | 92% | $4,356 | ||||||||||||||||||||||||||||
2019(7) | $12.94 | 0.12 | 1.45 | 1.57 | — | — | — | $14.51 | 12.13% | 0.01%(4)(8) | 1.29%(4)(8) | 96%(9) | $1,163 |
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 November 30, 2016.
(4)Annualized.
(5)Per-share amount was less than $0.005.
(6)The ratio of operating expenses to average net assets before expense waiver and the ratio of net investment income (loss) to average net assets before expense waiver was 0.83% and 0.26%, respectively.
(7)April 1, 2019 (commencement of sale) through November 30, 2019.
(8)The annualized ratio of operating expenses to average net assets before expense waiver and the annualized ratio of net investment income (loss) to average net assets before expense waiver was 0.89% and 0.41%, respectively.
(9)Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended November 30, 2019.
See Notes to Financial Statements.
Report of Independent Registered Public Accounting Firm |
To the Shareholders and the Board of Directors of American Century World Mutual Funds, Inc.:
Opinion on the Financial Statements and Financial Highlights
We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of Focused International Growth Fund (the "Fund"), one of the funds constituting the American Century World Mutual Funds, Inc., as of November 30, 2020, the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the years ended November 30, 2020, 2019, 2018, 2017 and for the period March 29, 2016 (fund inception) through November 30, 2016, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of Focused International Growth Fund of the American Century World Mutual Funds, Inc. as of November 30, 2020, and the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the years ended November 30, 2020, 2019, 2018, 2017 and for the period March 29, 2016 (fund inception) through November 30, 2016, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on the Fund’s financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. Our procedures included confirmation of securities owned as of November 30, 2020, by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
DELOITTE & TOUCHE LLP
Kansas City, Missouri
January 19, 2021
We have served as the auditor of one or more American Century investment companies since 1997.
26
Management |
The Board of Directors
The individuals listed below serve as directors of the funds. Each director will continue to serve in this capacity until death, retirement, resignation or removal from office. The board has adopted a mandatory retirement age for directors who are not “interested persons,” as that term is defined in the Investment Company Act (independent directors). Independent directors shall retire by December 31 of the year in which they reach their 75th birthday.
Mr. Thomas is an “interested person” because he currently serves as President and Chief Executive Officer of American Century Companies, Inc. (ACC), the parent company of American Century Investment Management, Inc. (ACIM or the advisor). The other directors (more than three-fourths of the total number) are independent. They are not employees, directors or officers of, and have no financial interest in, ACC or any of its wholly owned, direct or indirect, subsidiaries, including ACIM, American Century Investment Services, Inc. (ACIS) and American Century Services, LLC (ACS), and they do not have any other affiliations, positions or relationships that would cause them to be considered “interested persons” under the Investment Company Act. The directors serve in this capacity for seven (in the case of Jonathan S. Thomas, 16; and Stephen E. Yates, 8) registered investment companies in the American Century Investments family of funds.
The following table presents additional information about the directors. The mailing address for each director is 4500 Main Street, Kansas City, Missouri 64111.
Name (Year of Birth) | Position(s) Held with Funds | Length of Time Served | Principal Occupation(s) During Past 5 Years | Number of American Century Portfolios Overseen by Director | Other Directorships Held During Past 5 Years | ||||||||||||
Independent Directors | |||||||||||||||||
Thomas W. Bunn (1953) | Director | Since 2017 | Retired | 62 | SquareTwo Financial; Barings (formerly Babson Capital Funds Trust) (2013 to 2016) | ||||||||||||
Chris H. Cheesman (1962) | Director | Since 2019 | Retired. Senior Vice President & Chief Audit Executive, AllianceBernstein (1999 to 2018) | 62 | None | ||||||||||||
Barry Fink (1955) | Director | Since 2012 (independent since 2016) | Retired | 62 | None | ||||||||||||
Rajesh K. Gupta (1960) | Director | Since 2019 | Partner Emeritus, SeaCrest Investment Management and SeaCrest Wealth Management (2019 to Present); Chief Executive Officer and Chief Investment Officer, SeaCrest Investment Management (2006 to 2019); Chief Executive Officer and Chief Investment Officer, SeaCrest Wealth Management (2008 to 2019) | 62 | None |
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Name (Year of Birth) | Position(s) Held with Funds | Length of Time Served | Principal Occupation(s) During Past 5 Years | Number of American Century Portfolios Overseen by Director | Other Directorships Held During Past 5 Years | ||||||||||||
Independent Directors | |||||||||||||||||
Lynn Jenkins (1963) | Director | Since 2019 | Consultant, LJ Strategies (2019 to present); United States Representative, U.S. House of Representatives (2009 to 2018) | 62 | MGP Ingredients, Inc. | ||||||||||||
Jan M. Lewis (1957) | Director | Since 2011 | Retired | 62 | None | ||||||||||||
John R. Whitten (1946) | Director | Since 2008 | Retired | 62 | Onto Innovation Inc. (2019 to 2020); Rudolph Technologies, Inc. (2006 to 2019) | ||||||||||||
Stephen E. Yates (1948) | Director and Chairman of the Board | Since 2012 (Chairman since 2018) | Retired | 87 | None | ||||||||||||
Interested Director | |||||||||||||||||
Jonathan S. Thomas (1963) | Director | Since 2007 | President and Chief Executive Officer, ACC (2007 to present). Also serves as Chief Executive Officer, ACS; Executive Vice President, ACIM; Director, ACC, ACIM and other ACC subsidiaries | 125 | None |
The Statement of Additional Information has additional information about the fund's directors and is available without charge, upon request, by calling 1-800-345-2021.
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Officers
The following table presents certain information about the executive officers of the funds. Each officer serves as an officer for each of the 16 (in the case of Robert J. Leach, 15) investment companies in the American Century family of funds. No officer is compensated for his or her service as an officer of the funds. The listed officers are interested persons of the funds and are appointed or re-appointed on an annual basis. The mailing address for each officer listed below is 4500 Main Street, Kansas City, Missouri 64111.
Name (Year of Birth) | Offices with the Funds | Principal Occupation(s) During the Past Five Years | ||||||
Patrick Bannigan (1965) | President since 2019 | Executive Vice President and Director, ACC (2012 to present); Chief Financial Officer, Chief Accounting Officer and Treasurer, ACC (2015 to present). Also serves as President, ACS; Vice President, ACIM; Chief Financial Officer, Chief Accounting Officer and/or Director, ACIM, ACS and other ACC subsidiaries | ||||||
R. Wes Campbell (1974) | Chief Financial Officer and Treasurer since 2018 | Vice President, ACS, (2020 to present); Investment Operations and Investment Accounting, ACS (2000 to present) | ||||||
Amy D. Shelton (1964) | Chief Compliance Officer and Vice President since 2014 | Chief Compliance Officer, American Century funds, (2014 to present); Chief Compliance Officer, ACIM (2014 to present); Chief Compliance Officer, ACIS (2009 to present). Also serves as Vice President, ACIS | ||||||
Charles A. Etherington (1957) | General Counsel since 2007 and Senior Vice President since 2006 | Attorney, ACC (1994 to present); Vice President, ACC (2005 to present); General Counsel, ACC (2007 to present). Also serves as General Counsel, ACIM, ACS, ACIS and other ACC subsidiaries; and Senior Vice President, ACIM and ACS | ||||||
C. Jean Wade (1964) | Vice President since 2012 | Senior Vice President, ACS (2017 to present); Vice President, ACS (2000 to 2017) | ||||||
Robert J. Leach (1966) | Vice President since 2006 | Vice President, ACS (2000 to present) | ||||||
David H. Reinmiller (1963) | Vice President since 2000 | Attorney, ACC (1994 to present). Also serves as Vice President, ACIM and ACS | ||||||
Ward D. Stauffer (1960) | Secretary since 2005 | Attorney, ACC (2003 to present) |
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Approval of Management Agreement |
At a meeting held on June 24, 2020, the Fund’s Board of Directors (the "Board") unanimously approved the renewal of the 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, contracts for investment advisory services are required to be reviewed, evaluated, and approved by a majority of a fund’s directors (the “Directors”), including a majority of the independent Directors, each year.
Prior to its consideration of the renewal of the management agreement, the Directors requested and reviewed extensive data and information compiled by the Advisor and certain independent providers of evaluation data concerning the Fund and the services provided to the Fund by the Advisor. This review was in addition to the oversight and evaluation undertaken by the Board and its committees on a continual basis and the information received was supplemental to the extensive information that the Board and its committees receive and consider throughout the year.
In connection with its consideration of the renewal of the management agreement, the Board’s review and evaluation of the services provided by the Advisor included, but was not limited to, the following:
•the nature, extent, and quality of investment management, shareholder services, and other services provided and to be provided to the Fund;
•the wide range of other programs and services provided and to be provided to the Fund and its shareholders on a routine and non-routine basis;
•the Fund’s investment performance, including data comparing the Fund's performance to appropriate benchmarks and/or a peer group of other mutual funds with similar investment objectives and strategies;
•the cost of owning the Fund compared to the cost of owning similar funds;
•the compliance policies, procedures, and regulatory experience of the Advisor and the Fund's service providers;
•the Advisor’s strategic plans;
•the Advisor’s business continuity plans and specifically its response to the COVID-19 pandemic;
•financial data showing the cost of services provided to the Fund, the profitability of the Fund to the Advisor, and the overall profitability of the Advisor;
•possible economies of scale associated with the Advisor’s management of the Fund and other accounts;
•services provided and charges to the Advisor's other investment management clients;
•acquired fund fees and expenses;
•payments and practices in connection with financial intermediaries holding shares of the Fund and the services provided by intermediaries in connection therewith; and
•possible collateral benefits to the Advisor from the management of the Fund.
The Board held two meetings to consider the renewal. The independent Directors also met in private session three times to review and discuss the information provided in response to their request. The independent Directors held active discussions with the Advisor regarding the renewal of the management agreement, requesting supplemental information, and reviewing information provided by the Advisor in response thereto. The independent Directors had the benefit of the advice of their independent counsel throughout the process.
Factors Considered
The Directors considered all of the information provided by the Advisor, the independent data providers, and 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
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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. In deciding to renew the management agreement, the Board based its decision on a number of factors, including without limitation the following:
Nature, Extent and Quality of Services — Generally. Under the management agreement, the Advisor is responsible for providing or arranging for all services necessary for the operation of the Fund. The Board noted that the Advisor provides or arranges at its own expense a wide variety of services including without limitation the following:
•constructing and designing the Fund
•portfolio research and security selection
•initial capitalization/funding
•securities trading
•Fund administration
•custody of Fund assets
•daily valuation of the Fund’s portfolio
•shareholder servicing and transfer agency, including shareholder confirmations, recordkeeping, and communications
•legal services (except the independent Directors’ counsel)
•regulatory and portfolio compliance
•financial reporting
•marketing and distribution (except amounts paid by the Fund under Rule 12b-1 plans)
The Board noted that many of these services have expanded over time in terms of both quantity and complexity in response to shareholder demands, competition in the industry, changing distribution channels, and the changing regulatory environment.
Investment Management Services. The nature of the investment management services provided to the Fund is quite complex and allows Fund shareholders access to professional money management, instant diversification of their investments within an asset class, the opportunity to easily diversify among asset classes by investing in or exchanging among various American Century Investments funds, and liquidity. In evaluating investment performance, the Board expects the Advisor to manage the Fund in accordance with its investment objectives and approved strategies. Further, the Directors recognize that the Advisor has an obligation to monitor trading activities, and in particular to seek the best execution of fund trades, and to evaluate the use of and payment for research. In providing these services, the Advisor utilizes teams of investment professionals (portfolio managers, analysts, research assistants, and securities traders) who require extensive information technology, research, training, compliance, and other systems to conduct their business. The Board, directly and through its Fund Performance Review Committee, provides oversight of the investment performance process. It regularly reviews investment performance information for the Fund, together with comparative information for appropriate benchmarks and/or peer groups of similarly-managed funds, over different time horizons. The Directors also review investment performance information during the management agreement renewal process. If performance concerns are identified, the Fund receives special reviews until performance improves, during which the Board discusses with the Advisor the reasons for such results (e.g., market conditions, security selection) and any efforts being undertaken to improve performance. The Fund’s performance was above its benchmark for the one- and three-year periods reviewed by the Board. The Board found the investment management services provided by the Advisor to the Fund to be satisfactory and consistent with the management agreement.
Shareholder and Other Services. Under the management agreement, the Advisor provides the Fund with a comprehensive package of transfer agency, shareholder, and other services. The Board, directly and through its various committees, regularly reviews reports and evaluations of such services at its regular meetings. These reports include, but are not limited to, information regarding the operational efficiency and accuracy of the shareholder and transfer agency services
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provided, staffing levels, shareholder satisfaction, technology support (including cyber security), new products and services offered to Fund shareholders, securities trading activities, portfolio valuation services, auditing services, and legal and operational compliance activities. The Board found the services provided by the Advisor to the Fund under the management agreement to be competitive and of high quality.
COVID-19 Response. During 2020, much of the world experienced unprecedented change and challenges from the impacts of the rapidly evolving, worldwide spread of the COVID-19 virus. The Board evaluated the Advisor’s response to the COVID-19 pandemic and its impact on service to the Fund. The Board found that Fund shareholders have continued to receive the Advisor’s investment management and other services without disruption, and Advisor personnel have demonstrated great resiliency in providing those services. The Board, directly and through its Audit Committee, continues to monitor the impact of the pandemic and the response of each of the Fund’s service providers.
Costs of Services and Profitability. The Advisor provides detailed information concerning its cost of providing various services to the Fund, its profitability in managing the Fund (pre- and post-distribution), its overall profitability, and its financial condition. The Directors have reviewed with the Advisor the methodology used to prepare this financial information. This information is considered in evaluating the Advisor’s financial condition, its ability to continue to provide services under the management agreement, and the reasonableness of the current management fee. The Board concluded that the Advisor’s profits were reasonable in light of the services provided to the Fund.
Ethics. The Board generally considers the Advisor’s commitment to providing quality services to shareholders and to conducting its business ethically. They noted that the Advisor’s practices generally meet or exceed industry best practices.
Economies of Scale. The Board also reviewed information provided by the Advisor regarding the possible existence of economies of scale in connection with the management of the Fund. The Board concluded that economies of scale are difficult to measure and predict with precision, especially on a fund-by-fund basis. The Board concluded that the Advisor is appropriately sharing economies of scale, to the extent they exist, through its competitive fee structure, offering competitive fees from fund inception, and through reinvestment in its business, infrastructure, investment capabilities and initiatives to provide shareholders additional content and services.
Comparison to Other Funds’ Fees. The management agreement provides that the Fund pays the Advisor a single, all-inclusive (or unified) management fee for providing all services necessary for the management and operation of the Fund, other than brokerage expenses, expenses attributable to short sales, taxes, interest, extraordinary expenses, fees and expenses of the Fund’s independent Directors (including their independent legal counsel), and expenses incurred in connection with the provision of shareholder services and distribution services under a plan adopted pursuant to Rule 12b-1 under the Investment Company Act. 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 any applicable Rule 12b-1 distribution fees, all other components of the total fees charged by these other funds may be increased without shareholder approval. The Board believes the unified fee structure is a benefit to Fund shareholders because it clearly discloses to shareholders the cost of owning Fund shares, and, since 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 comparing the Fund’s unified fee to the total expense ratios of its peers. The unified fee charged to shareholders of the Fund was above the median of the total expense ratios of the Fund’s peer expense universe
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and was within the range of its peer expense group. The Board and the Advisor agreed to a permanent change to the Fund's fee schedule that should have the effect of lowering the Fund's annual unified management fee by approximately 0.14% (e.g., the Investor Class unified fee will be reduced from 1.23% to 1.09%), beginning August 1, 2020. The Board concluded that the management fee paid by the Fund to the Advisor under the management agreement is reasonable in light of the services provided to the Fund.
Comparison to Fees and Services Provided to Other Clients of the Advisor. The Board also requested and received information from the Advisor concerning the nature of the services, fees, costs, and profitability of its advisory services to advisory clients other than the Fund. They observed that these varying types of client accounts require different services and involve different regulatory and entrepreneurial risks than the management of the Fund. The Board analyzed this information and concluded that the fees charged and services provided to the Fund were reasonable by comparison.
Payments to Intermediaries. The Directors also requested and received a description of payments made to intermediaries by the Fund and the Advisor and services provided in response thereto. These payments include various payments made by the Fund or the Advisor to different types of intermediaries and recordkeepers for distribution and service activities provided for the Fund. The Directors reviewed such information and received representations from the Advisor that all such payments by the Fund were made pursuant to the Fund's Rule 12b-1 Plan and that all such payments by the Advisor were made from the Advisor’s resources and reasonable profits. The Board found such payments to be reasonable in scope and purpose.
Collateral or “Fall-Out” Benefits Derived by the Advisor. The Board considered the possible existence of collateral benefits the Advisor may receive as a result of its relationship with the Fund. They concluded that the Advisor’s primary business is managing mutual funds and it generally does not use fund or shareholder information to generate profits in other lines of business, and therefore does not derive any significant collateral benefits from them. To the extent there are potential collateral benefits, the board has been advised and has taken this into consideration in its review of the management contract with the Fund. The Board noted that additional assets from other clients may offer the Advisor some benefit from increased leverage with service providers and counterparties. Additionally, the Advisor may receive proprietary research from broker-dealers that execute fund portfolio transactions, which the Board concluded is likely to benefit other clients of the Advisor, as well as Fund shareholders. The Board also determined that the Advisor is able to provide investment management services to certain clients other than the Fund, at least in part, due to its existing infrastructure built to serve the fund complex. The Board concluded that appropriate allocation methodologies had been employed to assign resources and the cost of those resources to these other clients.
Existing Relationship. The Board also considered whether there was any reason for not continuing the existing arrangement with the Advisor. In this regard, the Board was mindful of the potential disruptions of the Fund’s operations and various risks, uncertainties, and other effects that could occur as a result of a decision not to continue such relationship. In particular, the Board recognized that most shareholders have invested in the Fund on the strength of the Advisor’s industry standing and reputation and in the expectation that the Advisor will have a continuing role in providing advisory services to the Fund.
Conclusion of the Directors. As a result of this process, the Board, including all of the independent Directors, taking into account all of the factors discussed above and the information provided by the Advisor and others in connection with its review and throughout the year, determined that the management fee is fair and reasonable in light of the services provided and that the investment management agreement between the Fund and the Advisor should be renewed.
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Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain retirement accounts are subject to federal income tax withholding, unless you elect not to have withholding apply*. Tax will be withheld on the total amount withdrawn even though you may be receiving amounts that are not subject to withholding, such as nondeductible contributions. In such case, excess amounts of withholding could occur. You may adjust your withholding election so that a greater or lesser amount will be withheld.
If you don’t want us to withhold on this amount, you must notify us to not withhold the federal income tax. You may notify us in writing or in certain situations by telephone or through other electronic means. For systematic withdrawals, your withholding election will remain in effect until revoked or changed by filing a new election. You have the right to revoke your election at any time and change your withholding percentage for future distributions.
Remember, even if you elect not to have income tax withheld, you are liable for paying income tax on the taxable portion of your withdrawal. If you elect not to have income tax withheld or you don’t have enough income tax withheld, you may be responsible for payment of estimated tax. You may incur penalties under the estimated tax rules if your withholding and estimated tax payments are not sufficient. You can reduce or defer the income tax on a distribution by directly or indirectly rolling such distribution over to another IRA or eligible plan. You should consult your tax advisor for additional information.
State tax will be withheld if, at the time of your distribution, your address is within one of the mandatory withholding states and you have federal income tax withheld (or as otherwise required by state law). State taxes will be withheld from your distribution in accordance with the respective state rules.
*Some 403(b), 457 and qualified retirement plan distributions may be subject to 20% mandatory withholding, as they are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
A description of the policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund is available without charge, upon request, by calling 1-800-345-2021. It is also available on American Century Investments’ website at americancentury.com/proxy 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 americancentury.com/proxy. 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 as an exhibit to its reports on
Form N-PORT. The fund’s Form N-PORT reports are available on the SEC’s website at sec.gov.
The fund also makes its complete schedule of portfolio holdings for the most recent quarter of its
fiscal year available on its website at americancentury.com and, upon request, by calling
1-800-345-2021.
34
Other Tax Information
The following information is provided pursuant to provisions of the Internal Revenue Code.
The fund hereby designates up to the maximum amount allowable as qualified dividend income for the fiscal year ended November 30, 2020.
The fund hereby designates $440,202 or up to the maximum amount allowable, as long-term capital gains distributions (20% rate gain distributions) for the fiscal year ended November 30, 2020.
For the fiscal year ended November 30, 2020, the fund intends to pass through to shareholders foreign source income of $192,034 and foreign taxes paid of $21,106 or up to the maximum amount allowable, as a foreign tax credit. Foreign source income and foreign tax expense per outstanding share on November 30, 2020 are $0.1699 and $0.0187, respectively.
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Notes |
36
Notes |
37
Notes |
38
Notes |
39
Notes |
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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. | ||||||||
©2021 American Century Proprietary Holdings, Inc. All rights reserved. CL-ANN-91034 2101 |
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Annual Report | |||||
November 30, 2020 | |||||
Global Small Cap Fund | |||||
Investor Class (AGCVX) | |||||
I Class (AGCSX) | |||||
A Class (AGCLX) | |||||
C Class (AGCHX) | |||||
R Class (AGCWX) | |||||
R6 Class (AGCTX) |
Table of Contents |
President’s Letter | |||||
Performance | |||||
Portfolio Commentary | |||||
Fund Characteristics | |||||
Shareholder Fee Example | |||||
Schedule of Investments | |||||
Statement of Assets and Liabilities | |||||
Statement of Operations | |||||
Statement of Changes in Net Assets | |||||
Notes to Financial Statements | |||||
Financial Highlights | |||||
Report of Independent Registered Public Accounting Firm | |||||
Management | |||||
Approval of Management Agreement | |||||
Additional Information |
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 |
![image141.jpg](https://capedge.com/proxy/N-CSR/0000872825-21-000006/image141.jpg)
Dear Investor:
Thank you for reviewing this annual report for the period ended November 30, 2020. Annual reports help convey important information about fund returns, including market factors that affected performance. For additional investment insights, please visit americancentury.com.
Stocks Recovered from Pandemic-Fueled Sell-Off
In late 2019, broad market sentiment was generally upbeat. Dovish central banks in developed markets, modest inflation, improving economic and corporate earnings data, and progress on U.S.-China trade policy helped boost global growth outlooks. Against this backdrop, riskier assets generally remained in favor.
However, beginning in late February, the COVID-19 outbreak rapidly spread worldwide, halting most economic activity and triggering a deep global recession. Global stocks sold off sharply amid a widespread flight to safety. Quick and aggressive action from the Federal Reserve and other central banks and federal governments helped stabilize and restore confidence in the financial markets. By summer, declining coronavirus infection and death rates in many regions and the reopening of economies were positive influences. By the end of November, most data suggested economies were recovering. But at the same time, COVID-19 infection rates were rising in the U.S. and Europe, prompting new lockdown measures that threatened the economic recovery.
Overall, global stocks overcame the effects of the early 2020 sell-off to deliver solid gains for the 12-month period. Emerging markets stocks rallied and outperformed developed markets stocks, while growth stocks significantly outpaced value stocks worldwide.
Science Helps Steer the Return to Normal
The return to pre-pandemic life will take time and patience, but we are confident we will get there. The first COVID-19 vaccine is now approved and in limited distribution, and medical professionals continue to develop better treatment protocols. Until the vaccine is widely available, investors likely will face periods of outbreak-related disruptions, economic uncertainty and heightened market volatility. These influences can be unsettling, but they tend to be temporary.
We appreciate your confidence in us during these extraordinary times. Our firm has a long history of helping clients weather unpredictable markets, and we’re confident we will continue to meet today’s challenges.
Sincerely,
![image231.jpg](https://capedge.com/proxy/N-CSR/0000872825-21-000006/image231.jpg)
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
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Performance |
Total Returns as of November 30, 2020 | ||||||||||||||||||||
Average Annual Returns | ||||||||||||||||||||
Ticker Symbol | 1 year | Since Inception | Inception Date | |||||||||||||||||
Investor Class | AGCVX | 40.28% | 20.39% | 3/29/16 | ||||||||||||||||
MSCI ACWI Small Cap Index | — | 12.34% | 10.62% | — | ||||||||||||||||
I Class | AGCSX | 40.62% | 20.64% | 3/29/16 | ||||||||||||||||
A Class | AGCLX | 3/29/16 | ||||||||||||||||||
No sales charge | 39.95% | 20.09% | ||||||||||||||||||
With sales charge | 31.86% | 18.58% | ||||||||||||||||||
C Class | AGCHX | 38.88% | 19.20% | 3/29/16 | ||||||||||||||||
R Class | AGCWX | 39.52% | 19.79% | 3/29/16 | ||||||||||||||||
R6 Class | AGCTX | 40.75% | 20.82% | 3/29/16 |
Extraordinary performance is attributable in part to unusually favorable market conditions and may not be repeated or consistently achieved in the future.
Sales charges include initial sales charges and contingent deferred sales charges (CDSCs), as applicable. A Class shares have a 5.75% maximum initial sales charge and may be subject to a maximum CDSC of 1.00%. C Class shares redeemed within 12 months of purchase are subject to a maximum CDSC of 1.00%. The SEC requires that mutual funds provide performance information net of maximum sales charges in all cases where charges could be applied.
Data presented reflect past performance. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance shown. Total returns for periods less than one year are not annualized. Investment return and principal value will fluctuate, and redemption value may be more or less than original cost. Data assumes reinvestment of dividends and capital gains, and none of the charts reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. To obtain performance data current to the most recent month end, please call 1-800-345-2021 or visit americancentury.com. For additional information about the fund, please consult the prospectus.
3
Growth of $10,000 Over Life of Class | ||
$10,000 investment made March 29, 2016 | ||
Performance for other share classes will vary due to differences in fee structure. |
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Value on November 30, 2020 | |||||
Investor Class — $23,817 | |||||
MSCI ACWI Small Cap Index — $16,035 | |||||
Total Annual Fund Operating Expenses | |||||||||||||||||
Investor Class | I Class | A Class | C Class | R Class | R6 Class | ||||||||||||
1.11% | 0.91% | 1.36% | 2.11% | 1.61% | 0.76% |
The total annual fund operating expenses shown is as stated in the fund’s prospectus current as of the date of this report. The prospectus may vary from the expense ratio shown elsewhere in this report because it is based on a different time period, includes acquired fund fees and expenses, and, if applicable, does not include fee waivers or expense reimbursements.
Data presented reflect past performance. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance shown. Total returns for periods less than one year are not annualized. Investment return and principal value will fluctuate, and redemption value may be more or less than original cost. Data assumes reinvestment of dividends and capital gains, and none of the charts reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. To obtain performance data current to the most recent month end, please call 1-800-345-2021 or visit americancentury.com. For additional information about the fund, please consult the prospectus.
4
Portfolio Commentary |
Portfolio Managers: Trevor Gurwich and Federico Laffan
Performance Summary
Global Small Cap returned 40.28%* for the 12-month period ended November 30, 2020, outperforming its benchmark, the MSCI ACWI Small Cap Index, which returned 12.34%.
Global small-cap stocks delivered solid returns for the 12-month period despite heightened volatility. Stocks started out the period with strength, as positive earnings and hopes for a U.S.-China trade deal drove valuations higher in the fourth quarter of 2019. The market then sold off sharply in the first quarter of 2020 after the coronavirus pandemic that started in China spread worldwide, leading to lockdown measures that sharply curtailed economic growth. Stocks rebounded strongly in the second quarter, supported by central bank and government stimulus measures, easing lockdown measures and hopes for an economic recovery. Stocks extended these gains into the third quarter, aided by signs of improving economic growth in most countries. However, a late fall resurgence in the virus, especially in Europe and the U.S., led to new lockdown measures as well as renewed economic uncertainty and market volatility. Nonetheless, stocks ended the 12-month period on a positive note as progress toward a COVID-19 vaccine raised hopes for a return to normal economic activity in 2021.
The fund delivered very strong returns for the 12 months, driven by stock selection across most sectors. Stock selection in energy detracted modestly from relative performance, however. From a geographic standpoint, stock selection in the U.S. was a strong contributor to relative outperformance, while an overweight and stock selection in Indonesia, where Bank BTPN Syariah was our only investment, detracted.
China-Based Property Manager was a Top Contributor
China-based property manager A-Living Smart City Services was a top contributor to relative outperformance. The stock surged higher in the second quarter of 2020, lifted by hopes for economic recovery after the Chinese government lifted virus-related lockdown orders. We liquidated our holdings after this period of outperformance, as we looked for stocks with more earnings acceleration upside tied to a potential global economic recovery in 2021.
HelloFresh was another top contributor. It benefited from robust demand for its home-delivered meal preparation kits, which were popular with consumers during the lockdowns. Growth in the digital economy also fueled strong stock performance for Teladoc Health, a U.S.-based company that provides on-demand health care consultations through phone calls and videoconferencing. The company reported increased new customer volumes as more people adopted its service, especially during the pandemic. We exited our positions in both stocks following their strong performance and reallocated the proceeds into investments that we believe have more attractive risk/reward potential.
As a small-cap fund, we occasionally invest in initial public offerings (IPOs) if we believe they will deliver accelerating and sustainable earnings growth. During the period, our IPOs contributed positively to relative performance.
*All fund returns referenced in this commentary are for Investor Class shares. Performance for other share classes will vary due to differences in fee structure; when Investor Class performance exceeds that of the fund’s benchmark, other share classes may not. See page 3 for returns for all share classes.
5
Pandemic Pressured U.S.-Based Clothing Retailer
Pandemic-related economic pressures took a toll on several other holdings that were relative detractors for the period. These included Boot Barn Holdings, a U.S.-based retailer of Western
wear and workwear that struggled in a difficult retailing environment. The stock fell sharply in March
after the company reported disappointing earnings and guidance due to the coronavirus-related store closures. Given uncertainty for revenues, we liquidated our holdings. The difficult retailing environment also created challenges for Essential Properties Realty Trust, a U.S.-based real estate investment trust that focuses on single-tenant retail properties. The stock declined in the first half of 2020 on concerns that pandemic-related store lockdowns would lead to retailer delinquencies and bankruptcies. We exited the position given the difficult environment for retail real estate. Outside the U.S., Bank BTPN Syariah was a prominent detractor. This Indonesia-based bank faced an uncertain near-term business outlook and loan quality concerns due to COVID-19. We liquidated our holdings in the second quarter.
Outlook
While we recognize near-term economic uncertainty due to COVID-19, we believe the approval and effective distribution of a vaccine could spur a revival in economic growth in 2021. We also believe valuations remain attractive relative to large caps. Nonetheless, we remain selective as we focus on stocks with long-term drivers for earnings growth.
We continue to find opportunities in consumer discretionary stocks, where we have focused on companies we believe are inflecting positively and have sustainable earnings growth. We added to our consumer discretionary weighting, moving to a sizable overweight, as we favored companies we believe may benefit from long-term secular trends or the potential lifting of social distancing restrictions in 2021. Information technology also remains a prominent weighting, as we continue to find opportunities in companies tied to the digital economy. These include a broad range of information technology holdings, including IT services, software and semiconductors. We have also found opportunities supported by growth in e-commerce, cloud computing, software as a service and 5G network build-out. Our bottom-up focus on identifying earnings acceleration led to an increased weighting in industrials, a sector exposed to economic recovery. By contrast, stock selection led to underweights in real estate and health care, as we found fewer compelling risk/reward opportunities in those sectors.
From a regional standpoint, stock selection led to overweights in North America, notably the U.S., and Europe. The fund remains underweight in Asia, especially in Japan, and in the emerging markets, where we have found fewer companies in the region that we believe offer the potential for accelerating earnings growth.
6
Fund Characteristics |
NOVEMBER 30, 2020 | |||||
Top Ten Holdings | % of net assets | ||||
Hannon Armstrong Sustainable Infrastructure Capital, Inc. | 1.5% | ||||
Capri Holdings Ltd. | 1.4% | ||||
Metso Outotec Oyj | 1.3% | ||||
Kornit Digital Ltd. | 1.3% | ||||
flatexDEGIRO AG | 1.3% | ||||
China Yongda Automobiles Services Holdings Ltd. | 1.3% | ||||
R1 RCM, Inc. | 1.2% | ||||
Zeon Corp. | 1.2% | ||||
Global Medical REIT, Inc. | 1.1% | ||||
Brunswick Corp. | 1.1% | ||||
Types of Investments in Portfolio | % of net assets | ||||
Domestic Common Stocks | 53.3% | ||||
Foreign Common Stocks | 44.3% | ||||
Exchange-Traded Funds | 1.5% | ||||
Total Equity Exposure | 99.1% | ||||
Temporary Cash Investments | 0.6% | ||||
Temporary Cash Investments - Securities Lending Collateral | 0.8% | ||||
Other Assets and Liabilities | (0.5)% | ||||
Investments by Country | % of net assets | ||||
United States | 53.3% | ||||
Sweden | 6.6% | ||||
Canada | 6.2% | ||||
United Kingdom | 4.5% | ||||
Japan | 4.1% | ||||
Brazil | 2.6% | ||||
Israel | 2.4% | ||||
Taiwan | 2.3% | ||||
Netherlands | 2.3% | ||||
Germany | 2.0% | ||||
Finland | 2.0% | ||||
Other Countries | 9.3% | ||||
Exchange-Traded Funds | 1.5% | ||||
Cash and Equivalents* | 0.9% |
*Includes temporary cash investments, temporary cash investments - securities lending collateral and other assets and liabilities.
7
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 June 1, 2020 to November 30, 2020.
Actual Expenses
The table provides information about actual account values and actual expenses for each class. You may use the information, together with the amount you invested, to estimate the expenses that you paid over the period. First, identify the share class you own. Then simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
If you hold Investor Class shares of any American Century Investments fund, or I Class shares of the American Century Diversified Bond Fund, in an American Century Investments account (i.e., not through a financial intermediary or employer-sponsored retirement plan account), American Century Investments may charge you a $25.00 annual 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 $25.00 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.
8
Beginning Account Value 6/1/20 | Ending Account Value 11/30/20 | Expenses Paid During Period(1) 6/1/20 - 11/30/20 | Annualized Expense Ratio(1) | |||||||||||
Actual | ||||||||||||||
Investor Class | $1,000 | $1,331.90 | $7.17 | 1.23% | ||||||||||
I Class | $1,000 | $1,333.10 | $6.01 | 1.03% | ||||||||||
A Class | $1,000 | $1,329.70 | $8.62 | 1.48% | ||||||||||
C Class | $1,000 | $1,325.40 | $12.96 | 2.23% | ||||||||||
R Class | $1,000 | $1,328.40 | $10.07 | 1.73% | ||||||||||
R6 Class | $1,000 | $1,334.00 | $5.13 | 0.88% | ||||||||||
Hypothetical | ||||||||||||||
Investor Class | $1,000 | $1,018.85 | $6.21 | 1.23% | ||||||||||
I Class | $1,000 | $1,019.85 | $5.20 | 1.03% | ||||||||||
A Class | $1,000 | $1,017.60 | $7.47 | 1.48% | ||||||||||
C Class | $1,000 | $1,013.85 | $11.23 | 2.23% | ||||||||||
R Class | $1,000 | $1,016.35 | $8.72 | 1.73% | ||||||||||
R6 Class | $1,000 | $1,020.60 | $4.45 | 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. Annualized expense ratio reflects actual expenses, including any applicable fee waivers or expense reimbursements and excluding any acquired fund fees and expenses.
9
Schedule of Investments |
NOVEMBER 30, 2020
Shares | Value | |||||||
COMMON STOCKS — 97.6% | ||||||||
Australia — 1.9% | ||||||||
Breville Group Ltd. | 10,281 | $ | 181,938 | |||||
NEXTDC Ltd.(1) | 37,622 | 311,060 | ||||||
Seven Group Holdings Ltd.(2) | 26,597 | 430,032 | ||||||
923,030 | ||||||||
Belgium — 0.9% | ||||||||
Melexis NV | 4,653 | 444,271 | ||||||
Brazil — 2.6% | ||||||||
Locaweb Servicos de Internet SA(1) | 24,100 | 296,763 | ||||||
Pet Center Comercio e Participacoes SA(1) | 82,883 | 291,314 | ||||||
Randon SA Implementos e Participacoes, Preference Shares | 161,300 | 439,575 | ||||||
TOTVS SA | 40,300 | 206,111 | ||||||
1,233,763 | ||||||||
Canada — 6.2% | ||||||||
BRP, Inc. | 3,948 | 225,231 | ||||||
CAE, Inc. | 10,516 | 254,418 | ||||||
Capstone Mining Corp.(1) | 198,975 | 301,826 | ||||||
Colliers International Group, Inc. | 4,084 | 364,280 | ||||||
ECN Capital Corp. | 85,619 | 398,197 | ||||||
FirstService Corp. | 2,924 | 398,783 | ||||||
Innergex Renewable Energy, Inc. | 13,809 | 273,267 | ||||||
Jamieson Wellness, Inc. | 6,133 | 169,912 | ||||||
Kinaxis, Inc.(1) | 1,042 | 157,090 | ||||||
TFI International, Inc. | 8,644 | 438,623 | ||||||
2,981,627 | ||||||||
China — 1.5% | ||||||||
China Yongda Automobiles Services Holdings Ltd. | 355,000 | 607,764 | ||||||
Times Neighborhood Holdings Ltd. | 119,000 | 118,322 | ||||||
726,086 | ||||||||
Denmark — 0.3% | ||||||||
Pandora A/S | 1,268 | 126,558 | ||||||
Finland — 2.0% | ||||||||
Huhtamaki Oyj | 6,013 | 301,792 | ||||||
Metso Outotec Oyj | 71,892 | 641,909 | ||||||
943,701 | ||||||||
France — 0.9% | ||||||||
SOITEC(1) | 2,569 | 447,584 | ||||||
Germany — 2.0% | ||||||||
flatexDEGIRO AG(1) | 9,322 | 622,422 | ||||||
Hypoport SE(1) | 612 | 321,505 | ||||||
943,927 | ||||||||
Hong Kong — 0.8% | ||||||||
Minth Group Ltd. | 80,000 | 398,237 | ||||||
Israel — 2.4% | ||||||||
Kornit Digital Ltd.(1) | 7,465 | 629,822 | ||||||
Nova Measuring Instruments Ltd.(1) | 7,923 | 511,350 | ||||||
1,141,172 |
10
Shares | Value | |||||||
Japan — 4.1% | ||||||||
Anritsu Corp. | 9,600 | $ | 219,281 | |||||
Kobe Bussan Co. Ltd. | 7,700 | 268,796 | ||||||
Menicon Co. Ltd. | 4,700 | 292,308 | ||||||
Nippon Gas Co. Ltd. | 6,700 | 337,118 | ||||||
SHIFT, Inc.(1) | 2,100 | 311,829 | ||||||
Zeon Corp. | 44,700 | 553,256 | ||||||
1,982,588 | ||||||||
Netherlands — 2.3% | ||||||||
ASM International NV | 1,350 | 237,701 | ||||||
Basic-Fit NV(1)(2) | 9,722 | 353,203 | ||||||
Corbion NV | 4,524 | 233,729 | ||||||
IMCD NV | 2,040 | 254,931 | ||||||
1,079,564 | ||||||||
Norway — 1.7% | ||||||||
Bakkafrost P/F(1) | 5,207 | 325,102 | ||||||
LINK Mobility Group Holding ASA(1) | 40,421 | 227,189 | ||||||
NEL ASA(1) | 102,726 | 282,530 | ||||||
834,821 | ||||||||
South Korea — 0.8% | ||||||||
SK Materials Co. Ltd. | 1,592 | 374,273 | ||||||
Sweden — 6.6% | ||||||||
Beijer Ref AB | 7,741 | 265,837 | ||||||
BHG Group AB(1) | 15,504 | 284,122 | ||||||
Lifco AB, B Shares | 4,286 | 350,082 | ||||||
Lindab International AB | 17,795 | 309,195 | ||||||
MIPS AB | 2,623 | 131,553 | ||||||
Nordic Entertainment Group AB, B Shares(1) | 6,583 | 327,401 | ||||||
Samhallsbyggnadsbolaget i Norden AB(2) | 139,380 | 472,865 | ||||||
Sinch AB(1) | 2,511 | 328,782 | ||||||
Stillfront Group AB(1) | 3,399 | 390,155 | ||||||
Trelleborg AB, B Shares(1) | 14,008 | 289,185 | ||||||
3,149,177 | ||||||||
Switzerland — 0.5% | ||||||||
SIG Combibloc Group AG(1) | 10,256 | 235,960 | ||||||
Taiwan — 2.3% | ||||||||
Accton Technology Corp. | 27,000 | 226,807 | ||||||
Airtac International Group | 17,000 | 495,760 | ||||||
Alchip Technologies Ltd. | 17,000 | 399,358 | ||||||
1,121,925 | ||||||||
United Kingdom — 4.5% | ||||||||
ASOS plc(1) | 3,584 | 221,058 | ||||||
boohoo Group plc(1) | 54,986 | 230,885 | ||||||
Electrocomponents plc | 38,351 | 412,575 | ||||||
Fevertree Drinks plc | 6,696 | 206,210 | ||||||
Games Workshop Group plc | 2,277 | 298,684 | ||||||
Howden Joinery Group plc(1) | 31,553 | 264,626 | ||||||
Weir Group plc (The)(1) | 22,938 | 510,382 | ||||||
2,144,420 | ||||||||
United States — 53.3% | ||||||||
Allegro MicroSystems, Inc.(1) | 11,842 | 283,616 | ||||||
American Woodmark Corp.(1) | 2,398 | 209,849 |
11
Shares | Value | |||||||
AMN Healthcare Services, Inc.(1) | 5,052 | $ | 329,188 | |||||
Applied Industrial Technologies, Inc. | 2,875 | 225,486 | ||||||
ArcBest Corp. | 6,530 | 273,672 | ||||||
Avalara, Inc.(1) | 1,491 | 256,079 | ||||||
Axogen, Inc.(1) | 7,992 | 114,206 | ||||||
Bloomin' Brands, Inc. | 19,622 | 343,385 | ||||||
Brinker International, Inc. | 6,696 | 335,537 | ||||||
Brunswick Corp. | 6,944 | 518,300 | ||||||
Builders FirstSource, Inc.(1) | 10,446 | 390,785 | ||||||
Callaway Golf Co. | 23,873 | 507,301 | ||||||
Cannae Holdings, Inc.(1) | 8,490 | 334,676 | ||||||
Capri Holdings Ltd.(1) | 18,806 | 665,356 | ||||||
Chegg, Inc.(1) | 5,058 | 394,170 | ||||||
Clean Harbors, Inc.(1) | 4,533 | 328,053 | ||||||
Crocs, Inc.(1) | 7,924 | 466,644 | ||||||
Deckers Outdoor Corp.(1) | 1,642 | 418,037 | ||||||
eHealth, Inc.(1) | 3,109 | 236,253 | ||||||
elf Beauty, Inc.(1) | 10,581 | 230,031 | ||||||
Encompass Health Corp. | 2,066 | 166,478 | ||||||
Entegris, Inc. | 2,706 | 250,630 | ||||||
Envestnet, Inc.(1) | 2,603 | 208,917 | ||||||
Essent Group Ltd. | 9,989 | 438,118 | ||||||
Evoqua Water Technologies Corp.(1) | 15,487 | 404,056 | ||||||
Five9, Inc.(1) | 1,868 | 289,914 | ||||||
Fox Factory Holding Corp.(1) | 3,976 | 346,986 | ||||||
Freshpet, Inc.(1) | 2,272 | 310,991 | ||||||
Global Medical REIT, Inc. | 39,868 | 545,793 | ||||||
Goosehead Insurance, Inc., Class A | 2,756 | 339,291 | ||||||
H.B. Fuller Co. | 8,607 | 450,404 | ||||||
Hamilton Lane, Inc., Class A | 3,157 | 220,611 | ||||||
Hannon Armstrong Sustainable Infrastructure Capital, Inc. | 12,964 | 708,612 | ||||||
Helen of Troy Ltd.(1) | 1,155 | 233,298 | ||||||
Huntsman Corp. | 16,975 | 420,471 | ||||||
IAA, Inc.(1) | 5,931 | 355,386 | ||||||
Inphi Corp.(1) | 1,759 | 272,874 | ||||||
Jabil, Inc. | 9,058 | 346,197 | ||||||
JetBlue Airways Corp.(1) | 26,531 | 400,353 | ||||||
Kinsale Capital Group, Inc. | 1,995 | 479,119 | ||||||
Lattice Semiconductor Corp.(1) | 7,322 | 306,426 | ||||||
Masonite International Corp.(1) | 3,790 | 379,190 | ||||||
Monolithic Power Systems, Inc. | 639 | 204,454 | ||||||
Natera, Inc.(1) | 5,686 | 501,903 | ||||||
National Vision Holdings, Inc.(1) | 10,034 | 429,556 | ||||||
nCino, Inc.(1) | 4,700 | 383,003 | ||||||
NeoGenomics, Inc.(1) | 9,345 | 444,635 | ||||||
Onto Innovation, Inc.(1) | 2,178 | 96,289 | ||||||
Open Lending Corp., Class A(1) | 7,827 | 220,095 | ||||||
Option Care Health, Inc.(1) | 20,962 | 330,152 | ||||||
Pennant Group, Inc. (The)(1) | 4,674 | 236,925 | ||||||
Planet Fitness, Inc., Class A(1) | 5,393 | 393,419 | ||||||
Power Integrations, Inc. | 4,062 | 289,986 | ||||||
QuinStreet, Inc.(1) | 20,665 | 368,767 |
12
Shares | Value | |||||||
R1 RCM, Inc.(1) | 28,344 | $ | 574,816 | |||||
RadNet, Inc.(1) | 22,735 | 423,326 | ||||||
Rapid7, Inc.(1) | 3,253 | 243,780 | ||||||
Redfin Corp.(1) | 4,579 | 219,288 | ||||||
Repay Holdings Corp.(1) | 12,378 | 298,681 | ||||||
RH(1) | 1,046 | 474,005 | ||||||
Ryman Hospitality Properties, Inc. | 1,450 | 93,076 | ||||||
SailPoint Technologies Holdings, Inc.(1) | 6,118 | 284,854 | ||||||
SeaSpine Holdings Corp.(1) | 14,808 | 210,570 | ||||||
SI-BONE, Inc.(1) | 8,785 | 203,461 | ||||||
Silk Road Medical, Inc.(1) | 4,788 | 274,352 | ||||||
SiteOne Landscape Supply, Inc.(1) | 874 | 120,699 | ||||||
SiTime Corp.(1) | 3,272 | 284,566 | ||||||
Skyline Champion Corp.(1) | 8,299 | 255,028 | ||||||
SP Plus Corp.(1) | 9,908 | 281,784 | ||||||
Summit Materials, Inc., Class A(1) | 12,490 | 237,310 | ||||||
SYNNEX Corp. | 2,921 | 468,266 | ||||||
Tandem Diabetes Care, Inc.(1) | 2,718 | 255,166 | ||||||
TCF Financial Corp. | 10,063 | 338,117 | ||||||
TopBuild Corp.(1) | 1,757 | 306,122 | ||||||
Wintrust Financial Corp. | 6,207 | 338,219 | ||||||
Wyndham Destinations, Inc. | 7,607 | 319,950 | ||||||
Wyndham Hotels & Resorts, Inc. | 6,016 | 345,920 | ||||||
25,485,279 | ||||||||
TOTAL COMMON STOCKS (Cost $32,369,762) | 46,717,963 | |||||||
EXCHANGE-TRADED FUNDS — 1.5% | ||||||||
Schwab International Small-Cap Equity ETF(2) | 9,823 | 351,958 | ||||||
Schwab US Small-Cap ETF(2) | 4,285 | 352,698 | ||||||
TOTAL EXCHANGE-TRADED FUNDS (Cost $665,655) | 704,656 | |||||||
TEMPORARY CASH INVESTMENTS — 0.6% | ||||||||
Repurchase Agreement, BMO Capital Markets Corp., (collateralized by various U.S. Treasury obligations, 0.625% - 1.375%, 1/31/25 - 5/15/30, valued at $130,719), in a joint trading account at 0.06%, dated 11/30/20, due 12/1/20 (Delivery value $128,036) | 128,036 | |||||||
Repurchase Agreement, Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 0.625%, 5/15/30, valued at $147,976), at 0.07%, dated 11/30/20, due 12/1/20 (Delivery value $145,000) | 145,000 | |||||||
State Street Institutional U.S. Government Money Market Fund, Premier Class | 7 | 7 | ||||||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $273,043) | 273,043 | |||||||
TEMPORARY CASH INVESTMENTS - SECURITIES LENDING COLLATERAL(3) — 0.8% | ||||||||
State Street Navigator Securities Lending Government Money Market Portfolio (Cost $394,496) | 394,496 | 394,496 | ||||||
TOTAL INVESTMENT SECURITIES — 100.5% (Cost $33,702,956) | 48,090,158 | |||||||
OTHER ASSETS AND LIABILITIES — (0.5)% | (250,990) | |||||||
TOTAL NET ASSETS — 100.0% | $ | 47,839,168 |
13
MARKET SECTOR DIVERSIFICATION | |||||
(as a % of net assets) | |||||
Consumer Discretionary | 21.3 | % | |||
Industrials | 20.3 | % | |||
Information Technology | 18.7 | % | |||
Financials | 10.5 | % | |||
Health Care | 9.1 | % | |||
Materials | 6.4 | % | |||
Real Estate | 4.4 | % | |||
Consumer Staples | 3.3 | % | |||
Communication Services | 2.3 | % | |||
Utilities | 1.3 | % | |||
Exchange-Traded Funds | 1.5 | % | |||
Cash and Equivalents* | 0.9 | % |
*Includes temporary cash investments, temporary cash investments - securities lending collateral and other assets and liabilities.
NOTES TO SCHEDULE OF INVESTMENTS |
(1)Non-income producing.
(2)Security, or a portion thereof, is on loan. At the period end, the aggregate value of securities on loan was $1,616,479. The amount of securities on loan indicated may not correspond with the securities on loan identified because securities with pending sales are in the process of recall from the brokers.
(3)Investment of cash collateral from securities on loan. At the period end, the aggregate value of the collateral held by the fund was $1,699,047, which includes securities collateral of $1,304,551.
See Notes to Financial Statements.
14
Statement of Assets and Liabilities |
NOVEMBER 30, 2020 | |||||
Assets | |||||
Investment securities, at value (cost of $33,308,460) — including $1,616,479 of securities on loan | $ | 47,695,662 | |||
Investment made with cash collateral received for securities on loan, at value (cost of $394,496) | 394,496 | ||||
Total investment securities, at value (cost of $33,702,956) | 48,090,158 | ||||
Receivable for investments sold | 126,585 | ||||
Receivable for capital shares sold | 81,388 | ||||
Dividends and interest receivable | 26,883 | ||||
Securities lending receivable | 683 | ||||
Other assets | 1,589 | ||||
48,327,286 | |||||
Liabilities | |||||
Payable for collateral received for securities on loan | 394,496 | ||||
Payable for investments purchased | 44,998 | ||||
Payable for capital shares redeemed | 13,465 | ||||
Accrued management fees | 34,783 | ||||
Distribution and service fees payable | 376 | ||||
488,118 | |||||
Net Assets | $ | 47,839,168 | |||
Net Assets Consist of: | |||||
Capital (par value and paid-in surplus) | $ | 31,892,910 | |||
Distributable earnings | 15,946,258 | ||||
$ | 47,839,168 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | |||||||||
Investor Class, $0.01 Par Value | $21,562,043 | 1,021,390 | $21.11 | ||||||||
I Class, $0.01 Par Value | $587,087 | 27,528 | $21.33 | ||||||||
A Class, $0.01 Par Value | $62,593 | 3,002 | $20.85* | ||||||||
C Class, $0.01 Par Value | $45,255 | 2,254 | $20.08 | ||||||||
R Class, $0.01 Par Value | $839,239 | 40,754 | $20.59 | ||||||||
R6 Class, $0.01 Par Value | $24,742,951 | 1,151,524 | $21.49 |
* Maximum offering price $22.12 (net asset value divided by 0.9425).
See Notes to Financial Statements.
15
Statement of Operations |
YEAR ENDED NOVEMBER 30, 2020 | |||||
Investment Income (Loss) | |||||
Income: | |||||
Dividends (net of foreign taxes withheld of $18,206) | $ | 262,242 | |||
Securities lending, net | 8,132 | ||||
Interest | 1,922 | ||||
272,296 | |||||
Expenses: | |||||
Management fees | 415,924 | ||||
Distribution and service fees: | |||||
A Class | 1,285 | ||||
C Class | 4,607 | ||||
R Class | 3,263 | ||||
Directors' fees and expenses | 1,089 | ||||
Other expenses | 4,399 | ||||
430,567 | |||||
Net investment income (loss) | (158,271) | ||||
Realized and Unrealized Gain (Loss) | |||||
Net realized gain (loss) on: | |||||
Investment transactions | 1,915,494 | ||||
Foreign currency translation transactions | (8,655) | ||||
1,906,839 | |||||
Change in net unrealized appreciation (depreciation) on: | |||||
Investments | 11,333,060 | ||||
Translation of assets and liabilities in foreign currencies | 238 | ||||
11,333,298 | |||||
Net realized and unrealized gain (loss) | 13,240,137 | ||||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 13,081,866 |
See Notes to Financial Statements.
16
Statement of Changes in Net Assets |
YEARS ENDED NOVEMBER 30, 2020 AND NOVEMBER 30, 2019 | ||||||||
Increase (Decrease) in Net Assets | November 30, 2020 | November 30, 2019 | ||||||
Operations | ||||||||
Net investment income (loss) | $ | (158,271) | $ | (84,461) | ||||
Net realized gain (loss) | 1,906,839 | 1,372,496 | ||||||
Change in net unrealized appreciation (depreciation) | 11,333,298 | 1,628,442 | ||||||
Net increase (decrease) in net assets resulting from operations | 13,081,866 | 2,916,477 | ||||||
Distributions to Shareholders | ||||||||
From earnings: | ||||||||
Investor Class | (752,595) | (244,814) | ||||||
I Class | (27,255) | (19,145) | ||||||
A Class | (33,528) | (25,394) | ||||||
C Class | (30,545) | (24,698) | ||||||
R Class | (27,101) | (8,586) | ||||||
R6 Class | (10,074) | (6,072) | ||||||
Decrease in net assets from distributions | (881,098) | (328,709) | ||||||
Capital Share Transactions | ||||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | 18,080,718 | (5,349,893) | ||||||
Net increase (decrease) in net assets | 30,281,486 | (2,762,125) | ||||||
Net Assets | ||||||||
Beginning of period | 17,557,682 | 20,319,807 | ||||||
End of period | $ | 47,839,168 | $ | 17,557,682 | ||||
See Notes to Financial Statements.
17
Notes to Financial Statements |
NOVEMBER 30, 2020
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, I Class, A Class, C Class, R Class and 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.
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 (NAV) 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 NAV 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.
18
The fund monitors for significant events occurring after the close of an investment’s primary exchange but before the fund’s NAV 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. 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. Securities lending income is net of fees and rebates earned by the lending agent for its services.
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.
Segregated Assets — In accordance with the 1940 Act, the fund segregates assets on its books and records to cover certain types of investment securities and other financial instruments. ACIM monitors, on a daily basis, the securities segregated to ensure the fund designates a sufficient amount of liquid assets, marked-to-market daily. The fund may also receive assets or be required to pledge assets at the custodian bank or with a broker for collateral requirements.
Income Tax Status — It is the fund’s policy to distribute substantially all net investment income and net realized gains to shareholders and to otherwise qualify as a regulated investment company under provisions of the Internal Revenue Code. Accordingly, no provision has been made for income taxes. The fund files U.S. federal, state, local and non-U.S. tax returns as applicable. The fund's tax returns are subject to examination by the relevant taxing authority until expiration of the applicable statute of limitations, which is generally three years from the date of filing but can be longer in certain jurisdictions. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination and for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
19
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 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.
Securities Lending — Securities are lent to qualified financial institutions and brokers. State Street Bank & Trust Co. serves as securities lending agent to the fund pursuant to a Securities Lending Agreement. The lending of securities exposes the fund to risks such as: the borrowers may fail to return the loaned securities, the borrowers may not be able to provide additional collateral, the fund may experience delays in recovery of the loaned securities or delays in access to collateral, or the fund may experience losses related to the investment collateral. To minimize certain risks, loan counterparties pledge collateral in the form of cash and/or securities. The lending agent has agreed to indemnify the fund in the case of default of any securities borrowed. Cash collateral received is invested in the State Street Navigator Securities Lending Government Money Market Portfolio, a money market mutual fund registered under the 1940 Act. The loans may also be secured by U.S. government securities in an amount at least equal to the market value of the securities loaned, plus accrued interest and dividends, determined on a daily basis and adjusted accordingly. By lending securities, the fund seeks to increase its net investment income through the receipt of interest and fees. Such income is reflected separately within the Statement of Operations. The value of loaned securities and related collateral outstanding at period end, if any, are shown on a gross basis within the Schedule of Investments and Statement of Assets and Liabilities.
The following table reflects a breakdown of transactions accounted for as secured borrowings, the gross obligation by the type of collateral pledged, and the remaining contractual maturity of those transactions as of November 30, 2020.
Remaining Contractual Maturity of Agreements | |||||||||||||||||
Overnight and Continuous | <30 days | Between 30 & 90 days | >90 days | Total | |||||||||||||
Securities Lending Transactions(1) | |||||||||||||||||
Exchange-Traded Funds | $ | 394,496 | — | — | — | $ | 394,496 | ||||||||||
Gross amount of recognized liabilities for securities lending transactions | $ | 394,496 |
(1)Amount represents the payable for cash collateral received for securities on loan. This will generally be in the Overnight and Continuous column as the securities are typically callable on demand.
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.
20
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 ACIM will pay all expenses of managing and operating the fund, except brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), extraordinary expenses, and expenses incurred in connection with the provision of shareholder services and distribution services under a plan adopted pursuant to Rule 12b-1 under the 1940 Act. The fee is computed and accrued daily based on each class's daily net assets and paid monthly in arrears. The difference in the fee among the classes is a result of their separate arrangements for non-Rule 12b-1 shareholder services. It is not the result of any difference in advisory or custodial fees or other expenses related to the management of the fund’s assets, which do not vary by class. Effective August 1, 2020, the investment advisor decreased the annual management fee by 0.40%.
The annual management fee and the effective annual management fee for each class for the period ended November 30, 2020 are as follows:
Annual Management Fee* | Effective Annual Management Fee | |||||||
Investor Class | 1.10% | 1.37% | ||||||
I Class | 0.90% | 1.17% | ||||||
A Class | 1.10% | 1.37% | ||||||
C Class | 1.10% | 1.37% | ||||||
R Class | 1.10% | 1.37% | ||||||
R6 Class | 0.75% | 1.02% |
*Prior to August 1, 2020, the annual management fee was 1.50% for Investor Class, A Class, C Class and R Class, 1.30% for I Class and 1.15% for 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 ended November 30, 2020 are detailed in the Statement of Operations.
Directors' Fees and Expenses — The Board of Directors is responsible for overseeing the investment advisor’s management and operations of the fund. The directors receive detailed information about the fund and its investment advisor regularly throughout the year, and meet at least quarterly with management of the investment advisor to review reports about fund operations. The fund’s officers do not receive compensation from the fund.
Interfund Transactions — The fund may enter into security transactions with other American Century Investments funds and other client accounts of the investment advisor, in accordance with the 1940 Act rules and procedures adopted by the Board of Directors. The rules and procedures require, among other things, that these transactions be effected at the independent current market price of the security. During the period, the interfund purchases and sales were $230,766 and $92,240, respectively. The effect of interfund transactions on the Statement of Operations was $28,892 in net realized gain (loss) on investment transactions.
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the period ended November 30, 2020 were $87,376,745 and $70,500,018, respectively.
21
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Year ended November 30, 2020 | Year ended November 30, 2019 | |||||||||||||
Shares | Amount | Shares | Amount | |||||||||||
Investor Class/Shares Authorized | 40,000,000 | 40,000,000 | ||||||||||||
Sold | 507,419 | $ | 8,327,857 | 362,514 | $ | 5,144,156 | ||||||||
Issued in reinvestment of distributions | 47,962 | 739,577 | 19,659 | 242,195 | ||||||||||
Redeemed | (482,942) | (7,711,302) | (542,922) | (7,621,732) | ||||||||||
72,439 | 1,356,132 | (160,749) | (2,235,381) | |||||||||||
I Class/Shares Authorized | 25,000,000 | 25,000,000 | ||||||||||||
Sold | 21,302 | 404,684 | 7,591 | 112,985 | ||||||||||
Issued in reinvestment of distributions | 1,753 | 27,255 | 1,544 | 19,145 | ||||||||||
Redeemed | (30,455) | (549,600) | (77,886) | (1,089,958) | ||||||||||
(7,400) | (117,661) | (68,751) | (957,828) | |||||||||||
A Class/Shares Authorized | 30,000,000 | 30,000,000 | ||||||||||||
Sold | 2,004 | 32,714 | 831 | 9,923 | ||||||||||
Issued in reinvestment of distributions | 2,196 | 33,528 | 2,075 | 25,394 | ||||||||||
Redeemed | (44,016) | (783,257) | (68,936) | (1,001,875) | ||||||||||
(39,816) | (717,015) | (66,030) | (966,558) | |||||||||||
C Class/Shares Authorized | 30,000,000 | 30,000,000 | ||||||||||||
Sold | 1,400 | 20,980 | 273 | 4,549 | ||||||||||
Issued in reinvestment of distributions | 2,062 | 30,545 | 2,061 | 24,698 | ||||||||||
Redeemed | (40,331) | (711,043) | (69,074) | (978,912) | ||||||||||
(36,869) | (659,518) | (66,740) | (949,665) | |||||||||||
R Class/Shares Authorized | 20,000,000 | 20,000,000 | ||||||||||||
Sold | 25,240 | 399,452 | 13,711 | 194,728 | ||||||||||
Issued in reinvestment of distributions | 1,794 | 27,101 | 707 | 8,586 | ||||||||||
Redeemed | (20,014) | (329,670) | (17,244) | (246,353) | ||||||||||
7,020 | 96,883 | (2,826) | (43,039) | |||||||||||
R6 Class/Shares Authorized | 20,000,000 | 20,000,000 | ||||||||||||
Sold | 2,037,224 | 31,243,617 | 289 | 4,190 | ||||||||||
Issued in reinvestment of distributions | 644 | 10,074 | 488 | 6,072 | ||||||||||
Redeemed | (899,244) | (13,131,794) | (14,013) | (207,684) | ||||||||||
1,138,624 | 18,121,897 | (13,236) | (197,422) | |||||||||||
Net increase (decrease) | 1,133,998 | $ | 18,080,718 | (378,332) | $ | (5,349,893) |
22
6. Fair Value Measurements
The fund’s investments valuation process is based on several considerations and may use multiple inputs to determine the fair value of the investments held by the fund. In conformity with accounting principles generally accepted in the United States of America, the inputs used to determine a valuation are classified into three broad levels.
•Level 1 valuation inputs consist of unadjusted quoted prices in an active market for identical investments.
•Level 2 valuation inputs consist of direct or indirect observable market data (including quoted prices for comparable investments, evaluations of subsequent market events, interest rates, prepayment speeds, credit risk, etc.). These inputs also consist of quoted prices for identical investments initially expressed in local currencies that are adjusted through translation into U.S. dollars.
•Level 3 valuation inputs consist of unobservable data (including a fund’s own assumptions).
The level classification is based on the lowest level input that is significant to the fair valuation measurement. The valuation inputs are not necessarily an indication of the risks associated with investing in these securities or other financial instruments.
The following is a summary of the level classifications as of period end. The Schedule of Investments provides additional information on the fund’s portfolio holdings.
Level 1 | Level 2 | Level 3 | |||||||||
Assets | |||||||||||
Investment Securities | |||||||||||
Common Stocks | |||||||||||
Australia | — | $ | 923,030 | — | |||||||
Belgium | — | 444,271 | — | ||||||||
Brazil | — | 1,233,763 | — | ||||||||
Canada | — | 2,981,627 | — | ||||||||
China | — | 726,086 | — | ||||||||
Denmark | — | 126,558 | — | ||||||||
Finland | — | 943,701 | — | ||||||||
France | — | 447,584 | — | ||||||||
Germany | — | 943,927 | — | ||||||||
Hong Kong | — | 398,237 | — | ||||||||
Japan | — | 1,982,588 | — | ||||||||
Netherlands | — | 1,079,564 | — | ||||||||
Norway | — | 834,821 | — | ||||||||
South Korea | — | 374,273 | — | ||||||||
Sweden | — | 3,149,177 | — | ||||||||
Switzerland | — | 235,960 | — | ||||||||
Taiwan | — | 1,121,925 | — | ||||||||
United Kingdom | — | 2,144,420 | — | ||||||||
Other Countries | $ | 26,626,451 | — | — | |||||||
Exchange-Traded Funds | 704,656 | — | — | ||||||||
Temporary Cash Investments | 7 | 273,036 | — | ||||||||
Temporary Cash Investments - Securities Lending Collateral | 394,496 | — | — | ||||||||
$ | 27,725,610 | $ | 20,364,548 | — |
23
7. Risk Factors
The value of the fund’s shares will go up and down, sometimes rapidly or unpredictably, based on the performance of the securities owned by the fund and other factors generally affecting the securities market. Market risks, including political, regulatory, economic and social developments, can affect the value of the fund’s investments. Natural disasters, public health emergencies, terrorism and other unforeseeable events may lead to increased market volatility and may have adverse long-term effects on world economies and markets generally.
There are certain risks involved in investing in foreign securities. These risks include those resulting from political events (such as civil unrest, national elections and imposition of exchange controls), social and economic events (such as labor strikes and rising inflation), and natural disasters. Securities of foreign issuers may be less liquid and more volatile. Investing in emerging markets or a significant portion of assets in one country or region 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
On December 22, 2020, the fund declared and paid a per-share distribution from net realized gains to shareholders of record on December 21, 2020 of $1.0600 for the Investor Class, I Class, A Class, C Class, R Class and R6 Class.
The tax character of distributions paid during the years ended November 30, 2020 and November 30, 2019 were as follows:
2020 | 2019 | |||||||
Distributions Paid From | ||||||||
Ordinary income | — | — | ||||||
Long-term capital gains | $ | 881,098 | $ | 328,709 |
The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
As of period end, the federal tax cost of investments and the components of distributable earnings on a tax-basis were as follows:
Federal tax cost of investments | $ | 35,128,237 | |||
Gross tax appreciation of investments | $ | 13,111,055 | |||
Gross tax depreciation of investments | (149,134) | ||||
Net tax appreciation (depreciation) of investments | 12,961,921 | ||||
Net tax appreciation (depreciation) on translation of assets and liabilities in foreign currencies | 184 | ||||
Net tax appreciation (depreciation) | $ | 12,962,105 | |||
Undistributed ordinary income | $ | 685,647 | |||
Accumulated long-term gains | $ | 2,298,506 |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales.
24
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 Realized Gains | 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 | |||||||||||||||||||||||||||||||||||
2020 | $15.81 | (0.11) | 6.19 | 6.08 | (0.78) | $21.11 | 40.28% | 1.39% | (0.63)% | 204% | $21,562 | ||||||||||||||||||||||||
2019 | $13.66 | (0.06) | 2.44 | 2.38 | (0.23) | $15.81 | 17.93% | 1.51% | (0.39)% | 161% | $15,005 | ||||||||||||||||||||||||
2018 | $14.80 | (0.13) | (0.24) | (0.37) | (0.77) | $13.66 | (2.73)% | 1.50% | (0.86)% | 147% | $15,159 | ||||||||||||||||||||||||
2017 | $10.85 | (0.06) | 4.01 | 3.95 | — | $14.80 | 36.41% | 1.51% | (0.44)% | 130% | $10,059 | ||||||||||||||||||||||||
2016(3) | $10.00 | (0.03) | 0.88 | 0.85 | — | $10.85 | 8.50% | 1.50%(4) | (0.40)%(4) | 95% | $2,357 | ||||||||||||||||||||||||
I Class | |||||||||||||||||||||||||||||||||||
2020 | $15.94 | (0.08) | 6.25 | 6.17 | (0.78) | $21.33 | 40.62% | 1.19% | (0.43)% | 204% | $587 | ||||||||||||||||||||||||
2019 | $13.74 | (0.02) | 2.45 | 2.43 | (0.23) | $15.94 | 18.12% | 1.31% | (0.19)% | 161% | $557 | ||||||||||||||||||||||||
2018 | $14.85 | (0.10) | (0.24) | (0.34) | (0.77) | $13.74 | (2.50)% | 1.30% | (0.66)% | 147% | $1,424 | ||||||||||||||||||||||||
2017 | $10.86 | (0.02) | 4.01 | 3.99 | — | $14.85 | 36.74% | 1.31% | (0.24)% | 130% | $891 | ||||||||||||||||||||||||
2016(3) | $10.00 | (0.01) | 0.87 | 0.86 | — | $10.86 | 8.60% | 1.30%(4) | (0.20)%(4) | 95% | $652 | ||||||||||||||||||||||||
A Class | |||||||||||||||||||||||||||||||||||
2020 | $15.66 | (0.15) | 6.12 | 5.97 | (0.78) | $20.85 | 39.95% | 1.64% | (0.88)% | 204% | $63 | ||||||||||||||||||||||||
2019 | $13.57 | (0.08) | 2.40 | 2.32 | (0.23) | $15.66 | 17.60% | 1.76% | (0.64)% | 161% | $671 | ||||||||||||||||||||||||
2018 | $14.74 | (0.17) | (0.23) | (0.40) | (0.77) | $13.57 | (2.95)% | 1.75% | (1.11)% | 147% | $1,477 | ||||||||||||||||||||||||
2017 | $10.83 | (0.08) | 3.99 | 3.91 | — | $14.74 | 36.10% | 1.76% | (0.69)% | 130% | $1,517 | ||||||||||||||||||||||||
2016(3) | $10.00 | (0.05) | 0.88 | 0.83 | — | $10.83 | 8.30% | 1.75%(4) | (0.65)%(4) | 95% | $1,083 |
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 Realized Gains | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Net Investment Income (Loss) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||||||||||||||||||||||||
C Class | |||||||||||||||||||||||||||||||||||
2020 | $15.22 | (0.26) | 5.90 | 5.64 | (0.78) | $20.08 | 38.88% | 2.39% | (1.63)% | 204% | $45 | ||||||||||||||||||||||||
2019 | $13.29 | (0.18) | 2.34 | 2.16 | (0.23) | $15.22 | 16.75% | 2.51% | (1.39)% | 161% | $595 | ||||||||||||||||||||||||
2018 | $14.56 | (0.28) | (0.22) | (0.50) | (0.77) | $13.29 | (3.71)% | 2.50% | (1.86)% | 147% | $1,407 | ||||||||||||||||||||||||
2017 | $10.78 | (0.17) | 3.95 | 3.78 | — | $14.56 | 35.06% | 2.51% | (1.44)% | 130% | $1,468 | ||||||||||||||||||||||||
2016(3) | $10.00 | (0.10) | 0.88 | 0.78 | — | $10.78 | 7.80% | 2.50%(4) | (1.40)%(4) | 95% | $1,078 | ||||||||||||||||||||||||
R Class | |||||||||||||||||||||||||||||||||||
2020 | $15.52 | (0.18) | 6.03 | 5.85 | (0.78) | $20.59 | 39.52% | 1.89% | (1.13)% | 204% | $839 | ||||||||||||||||||||||||
2019 | $13.48 | (0.12) | 2.39 | 2.27 | (0.23) | $15.52 | 17.34% | 2.01% | (0.89)% | 161% | $523 | ||||||||||||||||||||||||
2018 | $14.68 | (0.21) | (0.22) | (0.43) | (0.77) | $13.48 | (3.18)% | 2.00% | (1.36)% | 147% | $493 | ||||||||||||||||||||||||
2017 | $10.81 | (0.11) | 3.98 | 3.87 | — | $14.68 | 35.80% | 2.01% | (0.94)% | 130% | $338 | ||||||||||||||||||||||||
2016(3) | $10.00 | (0.06) | 0.87 | 0.81 | — | $10.81 | 8.10% | 2.00%(4) | (0.90)%(4) | 95% | $218 | ||||||||||||||||||||||||
R6 Class | |||||||||||||||||||||||||||||||||||
2020 | $16.03 | (0.03) | 6.27 | 6.24 | (0.78) | $21.49 | 40.75% | 1.04% | (0.28)% | 204% | $24,743 | ||||||||||||||||||||||||
2019 | $13.79 | —(5) | 2.47 | 2.47 | (0.23) | $16.03 | 18.34% | 1.16% | (0.04)% | 161% | $207 | ||||||||||||||||||||||||
2018 | $14.89 | (0.08) | (0.25) | (0.33) | (0.77) | $13.79 | (2.36)% | 1.15% | (0.51)% | 147% | $361 | ||||||||||||||||||||||||
2017 | $10.87 | (0.01) | 4.03 | 4.02 | — | $14.89 | 36.86% | 1.16% | (0.09)% | 130% | $366 | ||||||||||||||||||||||||
2016(3) | $10.00 | —(5) | 0.87 | 0.87 | — | $10.87 | 8.80% | 1.15%(4) | (0.05)%(4) | 95% | $217 |
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 November 30, 2016.
(4)Annualized.
(5)Per-share amount was less than $0.005.
See Notes to Financial Statements.
Report of Independent Registered Public Accounting Firm |
To the Shareholders and the Board of Directors of American Century World Mutual Funds, Inc.:
Opinion on the Financial Statements and Financial Highlights
We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of Global Small Cap Fund (the “Fund”), one of the funds constituting the American Century World Mutual Funds, Inc., as of November 30, 2020, the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the years ended November 30, 2020, 2019, 2018, 2017 and for the period March 29, 2016 (fund inception) through November 30, 2016, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of Global Small Cap Fund of the American Century World Mutual Funds, Inc. as of November 30, 2020, and the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the years ended November 30, 2020, 2019, 2018, 2017 and for the period March 29, 2016 (fund inception) through November 30, 2016, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on the Fund’s financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. Our procedures included confirmation of securities owned as of November 30, 2020, by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
DELOITTE & TOUCHE LLP
Kansas City, Missouri
January 19, 2021
We have served as the auditor of one or more American Century investment companies since 1997.
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Management |
The Board of Directors
The individuals listed below serve as directors of the funds. Each director will continue to serve in this capacity until death, retirement, resignation or removal from office. The board has adopted a mandatory retirement age for directors who are not “interested persons,” as that term is defined in the Investment Company Act (independent directors). Independent directors shall retire by December 31 of the year in which they reach their 75th birthday.
Mr. Thomas is an “interested person” because he currently serves as President and Chief Executive Officer of American Century Companies, Inc. (ACC), the parent company of American Century Investment Management, Inc. (ACIM or the advisor). The other directors (more than three-fourths of the total number) are independent. They are not employees, directors or officers of, and have no financial interest in, ACC or any of its wholly owned, direct or indirect, subsidiaries, including ACIM, American Century Investment Services, Inc. (ACIS) and American Century Services, LLC (ACS), and they do not have any other affiliations, positions or relationships that would cause them to be considered “interested persons” under the Investment Company Act. The directors serve in this capacity for seven (in the case of Jonathan S. Thomas, 16; and Stephen E. Yates, 8) registered investment companies in the American Century Investments family of funds.
The following table presents additional information about the directors. The mailing address for each director is 4500 Main Street, Kansas City, Missouri 64111.
Name (Year of Birth) | Position(s) Held with Funds | Length of Time Served | Principal Occupation(s) During Past 5 Years | Number of American Century Portfolios Overseen by Director | Other Directorships Held During Past 5 Years | ||||||||||||
Independent Directors | |||||||||||||||||
Thomas W. Bunn (1953) | Director | Since 2017 | Retired | 62 | SquareTwo Financial; Barings (formerly Babson Capital Funds Trust) (2013 to 2016) | ||||||||||||
Chris H. Cheesman (1962) | Director | Since 2019 | Retired. Senior Vice President & Chief Audit Executive, AllianceBernstein (1999 to 2018) | 62 | None | ||||||||||||
Barry Fink (1955) | Director | Since 2012 (independent since 2016) | Retired | 62 | None | ||||||||||||
Rajesh K. Gupta (1960) | Director | Since 2019 | Partner Emeritus, SeaCrest Investment Management and SeaCrest Wealth Management (2019 to Present); Chief Executive Officer and Chief Investment Officer, SeaCrest Investment Management (2006 to 2019); Chief Executive Officer and Chief Investment Officer, SeaCrest Wealth Management (2008 to 2019) | 62 | None |
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Name (Year of Birth) | Position(s) Held with Funds | Length of Time Served | Principal Occupation(s) During Past 5 Years | Number of American Century Portfolios Overseen by Director | Other Directorships Held During Past 5 Years | ||||||||||||
Independent Directors | |||||||||||||||||
Lynn Jenkins (1963) | Director | Since 2019 | Consultant, LJ Strategies (2019 to present); United States Representative, U.S. House of Representatives (2009 to 2018) | 62 | MGP Ingredients, Inc. | ||||||||||||
Jan M. Lewis (1957) | Director | Since 2011 | Retired | 62 | None | ||||||||||||
John R. Whitten (1946) | Director | Since 2008 | Retired | 62 | Onto Innovation Inc. (2019 to 2020); Rudolph Technologies, Inc. (2006 to 2019) | ||||||||||||
Stephen E. Yates (1948) | Director and Chairman of the Board | Since 2012 (Chairman since 2018) | Retired | 87 | None | ||||||||||||
Interested Director | |||||||||||||||||
Jonathan S. Thomas (1963) | Director | Since 2007 | President and Chief Executive Officer, ACC (2007 to present). Also serves as Chief Executive Officer, ACS; Executive Vice President, ACIM; Director, ACC, ACIM and other ACC subsidiaries | 125 | None |
The Statement of Additional Information has additional information about the fund's directors and is available without charge, upon request, by calling 1-800-345-2021.
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Officers
The following table presents certain information about the executive officers of the funds. Each officer serves as an officer for each of the 16 (in the case of Robert J. Leach, 15) investment companies in the American Century family of funds. No officer is compensated for his or her service as an officer of the funds. The listed officers are interested persons of the funds and are appointed or re-appointed on an annual basis. The mailing address for each officer listed below is 4500 Main Street, Kansas City, Missouri 64111.
Name (Year of Birth) | Offices with the Funds | Principal Occupation(s) During the Past Five Years | ||||||
Patrick Bannigan (1965) | President since 2019 | Executive Vice President and Director, ACC (2012 to present); Chief Financial Officer, Chief Accounting Officer and Treasurer, ACC (2015 to present). Also serves as President, ACS; Vice President, ACIM; Chief Financial Officer, Chief Accounting Officer and/or Director, ACIM, ACS and other ACC subsidiaries | ||||||
R. Wes Campbell (1974) | Chief Financial Officer and Treasurer since 2018 | Vice President, ACS, (2020 to present); Investment Operations and Investment Accounting, ACS (2000 to present) | ||||||
Amy D. Shelton (1964) | Chief Compliance Officer and Vice President since 2014 | Chief Compliance Officer, American Century funds, (2014 to present); Chief Compliance Officer, ACIM (2014 to present); Chief Compliance Officer, ACIS (2009 to present). Also serves as Vice President, ACIS | ||||||
Charles A. Etherington (1957) | General Counsel since 2007 and Senior Vice President since 2006 | Attorney, ACC (1994 to present); Vice President, ACC (2005 to present); General Counsel, ACC (2007 to present). Also serves as General Counsel, ACIM, ACS, ACIS and other ACC subsidiaries; and Senior Vice President, ACIM and ACS | ||||||
C. Jean Wade (1964) | Vice President since 2012 | Senior Vice President, ACS (2017 to present); Vice President, ACS (2000 to 2017) | ||||||
Robert J. Leach (1966) | Vice President since 2006 | Vice President, ACS (2000 to present) | ||||||
David H. Reinmiller (1963) | Vice President since 2000 | Attorney, ACC (1994 to present). Also serves as Vice President, ACIM and ACS | ||||||
Ward D. Stauffer (1960) | Secretary since 2005 | Attorney, ACC (2003 to present) |
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Approval of Management Agreement |
At a meeting held on June 24, 2020, the Fund’s Board of Directors (the "Board") unanimously approved the renewal of the 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, contracts for investment advisory services are required to be reviewed, evaluated, and approved by a majority of a fund’s directors (the “Directors”), including a majority of the independent Directors, each year.
Prior to its consideration of the renewal of the management agreement, the Directors requested and reviewed extensive data and information compiled by the Advisor and certain independent providers of evaluation data concerning the Fund and the services provided to the Fund by the Advisor. This review was in addition to the oversight and evaluation undertaken by the Board and its committees on a continual basis and the information received was supplemental to the extensive information that the Board and its committees receive and consider throughout the year.
In connection with its consideration of the renewal of the management agreement, the Board’s review and evaluation of the services provided by the Advisor included, but was not limited to, the following:
•the nature, extent, and quality of investment management, shareholder services, and other services provided and to be provided to the Fund;
•the wide range of other programs and services provided and to be provided to the Fund and its shareholders on a routine and non-routine basis;
•the Fund’s investment performance, including data comparing the Fund's performance to appropriate benchmarks and/or a peer group of other mutual funds with similar investment objectives and strategies;
•the cost of owning the Fund compared to the cost of owning similar funds;
•the compliance policies, procedures, and regulatory experience of the Advisor and the Fund's service providers;
•the Advisor’s strategic plans;
•the Advisor’s business continuity plans and specifically its response to the COVID-19 pandemic;
•financial data showing the cost of services provided to the Fund, the profitability of the Fund to the Advisor, and the overall profitability of the Advisor;
•possible economies of scale associated with the Advisor’s management of the Fund and other accounts;
•services provided and charges to the Advisor's other investment management clients;
•acquired fund fees and expenses;
•payments and practices in connection with financial intermediaries holding shares of the Fund and the services provided by intermediaries in connection therewith; and
•possible collateral benefits to the Advisor from the management of the Fund.
The Board held two meetings to consider the renewal. The independent Directors also met in private session three times to review and discuss the information provided in response to their request. The independent Directors held active discussions with the Advisor regarding the renewal of the management agreement, requesting supplemental information, and reviewing information provided by the Advisor in response thereto. The independent Directors had the benefit of the advice of their independent counsel throughout the process.
Factors Considered
The Directors considered all of the information provided by the Advisor, the independent data providers, and 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
32
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. In deciding to renew the management agreement, the Board based its decision on a number of factors, including without limitation the following:
Nature, Extent and Quality of Services — Generally. Under the management agreement, the Advisor is responsible for providing or arranging for all services necessary for the operation of the Fund. The Board noted that the Advisor provides or arranges at its own expense a wide variety of services including without limitation the following:
•constructing and designing the Fund
•portfolio research and security selection
•initial capitalization/funding
•securities trading
•Fund administration
•custody of Fund assets
•daily valuation of the Fund’s portfolio
•shareholder servicing and transfer agency, including shareholder confirmations, recordkeeping, and communications
•legal services (except the independent Directors’ counsel)
•regulatory and portfolio compliance
•financial reporting
•marketing and distribution (except amounts paid by the Fund under Rule 12b-1 plans)
The Board noted that many of these services have expanded over time in terms of both quantity and complexity in response to shareholder demands, competition in the industry, changing distribution channels, and the changing regulatory environment.
Investment Management Services. The nature of the investment management services provided to the Fund is quite complex and allows Fund shareholders access to professional money management, instant diversification of their investments within an asset class, the opportunity to easily diversify among asset classes by investing in or exchanging among various American Century Investments funds, and liquidity. In evaluating investment performance, the Board expects the Advisor to manage the Fund in accordance with its investment objectives and approved strategies. Further, the Directors recognize that the Advisor has an obligation to monitor trading activities, and in particular to seek the best execution of fund trades, and to evaluate the use of and payment for research. In providing these services, the Advisor utilizes teams of investment professionals (portfolio managers, analysts, research assistants, and securities traders) who require extensive information technology, research, training, compliance, and other systems to conduct their business. The Board, directly and through its Fund Performance Review Committee, provides oversight of the investment performance process. It regularly reviews investment performance information for the Fund, together with comparative information for appropriate benchmarks and/or peer groups of similarly-managed funds, over different time horizons. The Directors also review investment performance information during the management agreement renewal process. If performance concerns are identified, the Fund receives special reviews until performance improves, during which the Board discusses with the Advisor the reasons for such results (e.g., market conditions, security selection) and any efforts being undertaken to improve performance. The Fund’s performance was above its benchmark for the one- and three-year periods reviewed by the Board. The Board found the investment management services provided by the Advisor to the Fund to be satisfactory and consistent with the management agreement.
Shareholder and Other Services. Under the management agreement, the Advisor provides the Fund with a comprehensive package of transfer agency, shareholder, and other services. The Board, directly and through its various committees, regularly reviews reports and evaluations of such services at its regular meetings. These reports include, but are not limited to, information regarding the operational efficiency and accuracy of the shareholder and transfer agency services
33
provided, staffing levels, shareholder satisfaction, technology support (including cyber security), new products and services offered to Fund shareholders, securities trading activities, portfolio valuation services, auditing services, and legal and operational compliance activities. The Board found the services provided by the Advisor to the Fund under the management agreement to be competitive and of high quality.
COVID-19 Response. During 2020, much of the world experienced unprecedented change and challenges from the impacts of the rapidly evolving, worldwide spread of the COVID-19 virus. The Board evaluated the Advisor’s response to the COVID-19 pandemic and its impact on service to the Fund. The Board found that Fund shareholders have continued to receive the Advisor’s investment management and other services without disruption, and Advisor personnel have demonstrated great resiliency in providing those services. The Board, directly and through its Audit Committee, continues to monitor the impact of the pandemic and the response of each of the Fund’s service providers.
Costs of Services and Profitability. The Advisor provides detailed information concerning its cost of providing various services to the Fund, its profitability in managing the Fund (pre- and post-distribution), its overall profitability, and its financial condition. The Directors have reviewed with the Advisor the methodology used to prepare this financial information. This information is considered in evaluating the Advisor’s financial condition, its ability to continue to provide services under the management agreement, and the reasonableness of the current management fee. The Board concluded that the Advisor’s profits were reasonable in light of the services provided to the Fund.
Ethics. The Board generally considers the Advisor’s commitment to providing quality services to shareholders and to conducting its business ethically. They noted that the Advisor’s practices generally meet or exceed industry best practices.
Economies of Scale. The Board also reviewed information provided by the Advisor regarding the possible existence of economies of scale in connection with the management of the Fund. The Board concluded that economies of scale are difficult to measure and predict with precision, especially on a fund-by-fund basis. The Board concluded that the Advisor is appropriately sharing economies of scale, to the extent they exist, through its competitive fee structure, offering competitive fees from fund inception, and through reinvestment in its business, infrastructure, investment capabilities and initiatives to provide shareholders additional content and services.
Comparison to Other Funds’ Fees. The management agreement provides that the Fund pays the Advisor a single, all-inclusive (or unified) management fee for providing all services necessary for the management and operation of the Fund, other than brokerage expenses, expenses attributable to short sales, taxes, interest, extraordinary expenses, fees and expenses of the Fund’s independent Directors (including their independent legal counsel), and expenses incurred in connection with the provision of shareholder services and distribution services under a plan adopted pursuant to Rule 12b-1 under the Investment Company Act. 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 any applicable Rule 12b-1 distribution fees, all other components of the total fees charged by these other funds may be increased without shareholder approval. The Board believes the unified fee structure is a benefit to Fund shareholders because it clearly discloses to shareholders the cost of owning Fund shares, and, since 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 comparing the Fund’s unified fee to the total expense ratios of its peers. The unified fee charged to shareholders of the Fund was above the median of the total expense ratios of the Fund’s peer expense universe
34
and was within the range of its peer expense group. The Board and the Advisor agreed to a permanent change to the Fund's fee schedule that should have the effect of lowering the Fund's annual unified management fee by approximately 0.40% (e.g., the Investor Class unified fee will be reduced from 1.50% to 1.10%), beginning August 1, 2020. The Board concluded that the management fee paid by the Fund to the Advisor under the management agreement is reasonable in light of the services provided to the Fund.
Comparison to Fees and Services Provided to Other Clients of the Advisor. The Board also requested and received information from the Advisor concerning the nature of the services, fees, costs, and profitability of its advisory services to advisory clients other than the Fund. They observed that these varying types of client accounts require different services and involve different regulatory and entrepreneurial risks than the management of the Fund. The Board analyzed this information and concluded that the fees charged and services provided to the Fund were reasonable by comparison.
Payments to Intermediaries. The Directors also requested and received a description of payments made to intermediaries by the Fund and the Advisor and services provided in response thereto. These payments include various payments made by the Fund or the Advisor to different types of intermediaries and recordkeepers for distribution and service activities provided for the Fund. The Directors reviewed such information and received representations from the Advisor that all such payments by the Fund were made pursuant to the Fund's Rule 12b-1 Plan and that all such payments by the Advisor were made from the Advisor’s resources and reasonable profits. The Board found such payments to be reasonable in scope and purpose.
Collateral or “Fall-Out” Benefits Derived by the Advisor. The Board considered the possible existence of collateral benefits the Advisor may receive as a result of its relationship with the Fund. They concluded that the Advisor’s primary business is managing mutual funds and it generally does not use fund or shareholder information to generate profits in other lines of business, and therefore does not derive any significant collateral benefits from them. To the extent there are potential collateral benefits, the board has been advised and has taken this into consideration in its review of the management contract with the Fund. The Board noted that additional assets from other clients may offer the Advisor some benefit from increased leverage with service providers and counterparties. Additionally, the Advisor may receive proprietary research from broker-dealers that execute fund portfolio transactions, which the Board concluded is likely to benefit other clients of the Advisor, as well as Fund shareholders. The Board also determined that the Advisor is able to provide investment management services to certain clients other than the Fund, at least in part, due to its existing infrastructure built to serve the fund complex. The Board concluded that appropriate allocation methodologies had been employed to assign resources and the cost of those resources to these other clients.
Existing Relationship. The Board also considered whether there was any reason for not continuing the existing arrangement with the Advisor. In this regard, the Board was mindful of the potential disruptions of the Fund’s operations and various risks, uncertainties, and other effects that could occur as a result of a decision not to continue such relationship. In particular, the Board recognized that most shareholders have invested in the Fund on the strength of the Advisor’s industry standing and reputation and in the expectation that the Advisor will have a continuing role in providing advisory services to the Fund.
Conclusion of the Directors. As a result of this process, the Board, including all of the independent Directors, taking into account all of the factors discussed above and the information provided by the Advisor and others in connection with its review and throughout the year, determined that the management fee is fair and reasonable in light of the services provided and that the investment management agreement between the Fund and the Advisor should be renewed.
35
Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain retirement accounts are subject to federal income tax withholding, unless you elect not to have withholding apply*. Tax will be withheld on the total amount withdrawn even though you may be receiving amounts that are not subject to withholding, such as nondeductible contributions. In such case, excess amounts of withholding could occur. You may adjust your withholding election so that a greater or lesser amount will be withheld.
If you don’t want us to withhold on this amount, you must notify us to not withhold the federal income tax. You may notify us in writing or in certain situations by telephone or through other electronic means. For systematic withdrawals, your withholding election will remain in effect until revoked or changed by filing a new election. You have the right to revoke your election at any time and change your withholding percentage for future distributions.
Remember, even if you elect not to have income tax withheld, you are liable for paying income tax on the taxable portion of your withdrawal. If you elect not to have income tax withheld or you don’t have enough income tax withheld, you may be responsible for payment of estimated tax. You may incur penalties under the estimated tax rules if your withholding and estimated tax payments are not sufficient. You can reduce or defer the income tax on a distribution by directly or indirectly rolling such distribution over to another IRA or eligible plan. You should consult your tax advisor for additional information.
State tax will be withheld if, at the time of your distribution, your address is within one of the mandatory withholding states and you have federal income tax withheld (or as otherwise required by state law). State taxes will be withheld from your distribution in accordance with the respective state rules.
*Some 403(b), 457 and qualified retirement plan distributions may be subject to 20% mandatory withholding, as they are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
A description of the policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund is available without charge, upon request, by calling 1-800-345-2021. It is also available on American Century Investments’ website at americancentury.com/proxy 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 americancentury.com/proxy. 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 as an exhibit to its reports on
Form N-PORT. The fund’s Form N-PORT reports are available on the SEC’s website at sec.gov.
The fund also makes its complete schedule of portfolio holdings for the most recent quarter of its
fiscal year available on its website at americancentury.com and, upon request, by calling
1-800-345-2021.
36
Other Tax Information
The following information is provided pursuant to provisions of the Internal Revenue Code.
The fund hereby designates $881,098, or up to the maximum amount allowable, as long-term capital gain distributions (20% rate gain distributions) for the fiscal year ended November 30, 2020.
37
Notes |
38
Notes |
39
Notes |
40
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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. | ||||||||
©2021 American Century Proprietary Holdings, Inc. All rights reserved. CL-ANN-91035 2101 |
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Annual Report | |||||
November 30, 2020 | |||||
International Growth Fund | |||||
Investor Class (TWIEX) | |||||
I Class (TGRIX) | |||||
Y Class (ATYGX) | |||||
A Class (TWGAX) | |||||
C Class (AIWCX) | |||||
R Class (ATGRX) | |||||
R5 Class (ATGGX) | |||||
R6 Class (ATGDX) |
Table of Contents |
President’s Letter | |||||
Performance | |||||
Portfolio Commentary | |||||
Fund Characteristics | |||||
Shareholder Fee Example | |||||
Schedule of Investments | |||||
Statement of Assets and Liabilities | |||||
Statement of Operations | |||||
Statement of Changes in Net Assets | |||||
Notes to Financial Statements | |||||
Financial Highlights | |||||
Report of Independent Registered Public Accounting Firm | |||||
Management | |||||
Approval of Management Agreement | |||||
Additional Information |
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 |
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Dear Investor:
Thank you for reviewing this annual report for the period ended November 30, 2020. Annual reports help convey important information about fund returns, including market factors that affected performance. For additional investment insights, please visit americancentury.com.
Stocks Recovered from Pandemic-Fueled Sell-Off
In late 2019, broad market sentiment was generally upbeat. Dovish central banks in developed markets, modest inflation, improving economic and corporate earnings data, and progress on U.S.-China trade policy helped boost global growth outlooks. Against this backdrop, riskier assets generally remained in favor.
However, beginning in late February, the COVID-19 outbreak rapidly spread worldwide, halting most economic activity and triggering a deep global recession. Global stocks sold off sharply amid a widespread flight to safety. Quick and aggressive action from the Federal Reserve and other central banks and federal governments helped stabilize and restore confidence in the financial markets. By summer, declining coronavirus infection and death rates in many regions and the reopening of economies were positive influences. By the end of November, most data suggested economies were recovering. But at the same time, COVID-19 infection rates were rising in the U.S. and Europe, prompting new lockdown measures that threatened the economic recovery.
Overall, global stocks overcame the effects of the early 2020 sell-off to deliver solid gains for the 12-month period. Emerging markets stocks rallied and outperformed developed markets stocks, while growth stocks significantly outpaced value stocks worldwide.
Science Helps Steer the Return to Normal
The return to pre-pandemic life will take time and patience, but we are confident we will get there. The first COVID-19 vaccine is now approved and in limited distribution, and medical professionals continue to develop better treatment protocols. Until the vaccine is widely available, investors likely will face periods of outbreak-related disruptions, economic uncertainty and heightened market volatility. These influences can be unsettling, but they tend to be temporary.
We appreciate your confidence in us during these extraordinary times. Our firm has a long history of helping clients weather unpredictable markets, and we’re confident we will continue to meet today’s challenges.
Sincerely,
![image231.jpg](https://capedge.com/proxy/N-CSR/0000872825-21-000006/image231.jpg)
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
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Performance |
Total Returns as of November 30, 2020 | ||||||||||||||||||||
Average Annual Returns | ||||||||||||||||||||
Ticker Symbol | 1 year | 5 years | 10 years | Since Inception | Inception Date | |||||||||||||||
Investor Class | TWIEX | 24.57% | 9.65% | 8.12% | — | 5/9/91 | ||||||||||||||
MSCI EAFE Index | — | 6.37% | 6.18% | 5.85% | — | — | ||||||||||||||
MSCI EAFE Growth Index | — | 16.01% | 9.28% | 7.81% | — | — | ||||||||||||||
I Class | TGRIX | 24.82% | 9.87% | 8.35% | — | 11/20/97 | ||||||||||||||
Y Class | ATYGX | 24.97% | — | — | 13.73% | 4/10/17 | ||||||||||||||
A Class | TWGAX | 10/2/96 | ||||||||||||||||||
No sales charge | 24.27% | 9.39% | 7.86% | — | ||||||||||||||||
With sales charge | 17.12% | 8.10% | 7.22% | — | ||||||||||||||||
C Class | AIWCX | 23.32% | 8.56% | 7.05% | — | 6/4/01 | ||||||||||||||
R Class | ATGRX | 24.04% | 9.10% | 7.59% | — | 8/29/03 | ||||||||||||||
R5 Class | ATGGX | 24.80% | — | — | 13.57% | 4/10/17 | ||||||||||||||
R6 Class | ATGDX | 24.99% | 10.03% | — | 7.98% | 7/26/13 |
Average annual returns since inception are presented when ten years of performance history is not available.
Sales charges include initial sales charges and contingent deferred sales charges (CDSCs), as applicable. A Class shares have a 5.75% maximum initial sales charge and may be subject to a maximum CDSC of 1.00%. C Class shares redeemed within 12 months of purchase are subject to a maximum CDSC of 1.00%. The SEC requires that mutual funds provide performance information net of maximum sales charges in all cases where charges could be applied.
Data presented reflect past performance. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance shown. Total returns for periods less than one year are not annualized. Investment return and principal value will fluctuate, and redemption value may be more or less than original cost. Data assumes reinvestment of dividends and capital gains, and none of the charts reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. To obtain performance data current to the most recent month end, please call 1-800-345-2021 or visit americancentury.com. For additional information about the fund, please consult the prospectus.
3
Growth of $10,000 Over 10 Years | ||
$10,000 investment made November 30, 2010 | ||
Performance for other share classes will vary due to differences in fee structure. |
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Value on November 30, 2020 | |||||
Investor Class — $21,853 | |||||
MSCI EAFE Index — $17,659 | |||||
MSCI EAFE Growth Index — $21,217 | |||||
Total Annual Fund Operating Expenses | |||||||||||||||||||||||
Investor Class | I Class | Y Class | A Class | C Class | R Class | R5 Class | R6 Class | ||||||||||||||||
1.18% | 0.98% | 0.83% | 1.43% | 2.18% | 1.68% | 0.98% | 0.83% |
The total annual fund operating expenses shown is as stated in the fund’s prospectus current as of the date of this report. The prospectus may vary from the expense ratio shown elsewhere in this report because it is based on a different time period, includes acquired fund fees and expenses, and, if applicable, does not include fee waivers or expense reimbursements.
Data presented reflect past performance. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance shown. Total returns for periods less than one year are not annualized. Investment return and principal value will fluctuate, and redemption value may be more or less than original cost. Data assumes reinvestment of dividends and capital gains, and none of the charts reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. To obtain performance data current to the most recent month end, please call 1-800-345-2021 or visit americancentury.com. For additional information about the fund, please consult the prospectus.
4
Portfolio Commentary |
Portfolio Managers: Raj Gandhi and Jim Zhao
Performance Summary
International Growth returned 24.57%* for the fiscal year ended November 30, 2020, outperforming its benchmark, the MSCI EAFE Index, which returned 6.37%.
Stock selection across a broad range of sectors propelled the fund’s outperformance, including information technology, financials, energy, consumer discretionary and industrials, while consumer staples holdings detracted modestly. From a geographic perspective, Japan-based holdings benefited returns as did stock selection in the U.K. and positioning in China.
The COVID-19 pandemic precipitated a health and economic crisis that plunged non-U.S. equities into bear market territory in the first quarter of 2020 as global supply chains were disrupted and lockdowns brought global demand to a halt. Our focus on firms with sustainable growth tied to company-specific structural or secular drivers rather than those levered to the economic cycle helped the portfolio weather the downturn. Stocks roared back amid record amounts of fiscal and monetary stimulus and earnings results that exceeded overly pessimistic expectations. Volatility persisted in the second half of the year, albeit less extreme, as the global economy recovered amid concerns about a second wave of the pandemic and the U.S. elections. Toward the end of the reporting period, progress on multiple coronavirus vaccines fueled investor optimism over the potential for a return to more normal economic activity in 2021 and drove strong gains among non-U.S. equities.
Stock Selection Key to Outperformance
A diverse array of information technology holdings fueled the fund’s outperformance. Payment processor Adyen gained on strong earnings amid the acceleration of beneficial trends, such as the shift from cash to card payments and rise of online shopping. Shopify’s stock also advanced on new customer growth and pandemic-driven e-commerce trends as its online store platform and services helped merchants quickly adapt to selling online. Data center operator GDS Holdings benefited from demand for increased capacity with the ongoing rise of cloud computing and the accelerated need for remote access to work, school and entertainment. Semiconductor manufacturer Infineon Technologies experienced sharp earnings acceleration driven by recovery in automobile manufacturing and the shift to electric and hybrid vehicles.
Among financials, our disciplined selection process resulted in an underweight position relative to the benchmark in banks, which proved beneficial as low interest rates constrained banks’ earnings and hampered stock performance. Portfolio holding London Stock Exchange Group benefited from synergies related to the Refinitiv acquisition and the shift in its business model to subscription-based data services.
Our focus on sustainable earnings growth kept us away from most traditional oil and gas energy stocks. However, our selective investment in Neste, a leading producer of renewable diesel and jet fuel, ranked among the top individual contributors to performance. The stock advanced on strong growth in demand for renewable diesel. Neste’s proprietary technology allows for a variety of inputs, including animal waste, and results in transportation fuel that produces 90% less carbon dioxide emissions than traditional diesel.
*All fund returns referenced in this commentary are for Investor Class shares. Performance for other share classes will vary due to differences in fee structure; when Investor Class performance exceeds that of the fund’s benchmark, other share classes may not. See page 3 for returns for all share classes.
5
Online apparel retailer ASOS, one the fund’s top individual performers, drove a large portion of the consumer discretionary contribution. The stock advanced sharply propelled by strong reported results. ASOS benefited from improved consumer spending trends and the ongoing shift to online shopping. Sales increased amid higher demand, and profitability improved with a lower rate of returned orders.
Among industrials, MonotaRO, the largest online distributor of industrial components in Japan, benefited from an acceleration in new customer acquisition as companies transitioned to online at a faster pace due to the pandemic. The firm posted double-digit revenue growth at a time when overall industrial activity in Japan declined.
Notable individual contributors also included Lonza Group, a contract manufacturer of drugs and specialty ingredients for the pharmaceuticals and biotechnology industries. The company reported strong results driven by continued demand for outsourced manufacturing services by pharmaceuticals and biotechnology firms. In addition, the stock reacted positively to Lonza’s deal to manufacture the majority of Moderna’s COVID-19 vaccine.
On the downside, Melrose Industries detracted from the fund’s performance. The turnaround specialist’s stock fell on significant weakness in the automotive and aerospace markets. A highly leveraged balance sheet raised potential liquidity concerns, and extreme end-market demand pressures reduced prospects for near-term earnings growth from synergies related to its acquisition of GKN. We sold the stock.
Portfolio Positioning
We remain committed to our disciplined, bottom-up process of identifying companies exhibiting accelerating, sustainable growth. This year has been volatile and one where we have had multiple pivots in our outlook due to COVID-19. While uncertainties remain over the current surge in coronavirus cases and additional lockdowns, we believe the efficacy and delivery of vaccines is a game-changer along with other factors that weighed on sentiment simultaneously moving away, such as the U.S. election. We think the distribution of the vaccine coupled with the massive amounts of fiscal and monetary stimulus could lead to a strong, synchronized global earnings recovery that is not fully reflected in analysts’ expectations. We continue to maintain exposure to companies benefiting from strong secular trends such as renewable energy and 5G that could accelerate with improved economic activity. However, our view of where earnings growth will demonstrate the strongest acceleration has changed since earlier in the year. We have added several names that should benefit from an acceleration in cyclical activity as the economy reopens. Information technology remains the fund’s largest overweight and is broadly diversified with exposure to different end markets, including 5G, automobiles, factory automation and digital solutions. Our bottom-up stock selection continues to lead to an underweight in consumer staples.
Europe remains the fund’s largest regional exposure. The European Union’s 750 billion euro recovery plan represented a first-of-its-kind undertaking that could mean improved coordination of fiscal measures, central bank policy and debt across member states. In our view, such coordination, if successful, could potentially help Europe outperform other developed markets. We remain underweight to Japan and Asia in general.
6
Fund Characteristics |
NOVEMBER 30, 2020 | |||||
Top Ten Holdings | % of net assets | ||||
Murata Manufacturing Co. Ltd. | 2.1% | ||||
LVMH Moet Hennessy Louis Vuitton SE | 2.1% | ||||
AstraZeneca plc | 2.0% | ||||
Infineon Technologies AG | 1.9% | ||||
ASML Holding NV | 1.9% | ||||
CSL Ltd. | 1.8% | ||||
Schneider Electric SE | 1.8% | ||||
AIA Group Ltd. | 1.7% | ||||
Iberdrola SA | 1.7% | ||||
Keyence Corp. | 1.7% | ||||
Types of Investments in Portfolio | % of net assets | ||||
Common Stocks | 97.5% | ||||
Temporary Cash Investments | 2.4% | ||||
Temporary Cash Investments - Securities Lending Collateral | 3.2% | ||||
Other Assets and Liabilities | (3.1)% | ||||
Investments by Country | % of net assets | ||||
France | 16.2% | ||||
Japan | 15.1% | ||||
United Kingdom | 9.4% | ||||
Switzerland | 7.3% | ||||
Germany | 6.6% | ||||
Denmark | 5.4% | ||||
Spain | 4.7% | ||||
Netherlands | 4.5% | ||||
Sweden | 4.1% | ||||
Canada | 3.7% | ||||
China | 3.3% | ||||
Hong Kong | 3.2% | ||||
Ireland | 2.9% | ||||
Australia | 2.4% | ||||
Other Countries | 8.7% | ||||
Cash and Equivalents* | 2.5% |
*Includes temporary cash investments, temporary cash investments - securities lending collateral and other assets and liabilities.
7
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 June 1, 2020 to November 30, 2020.
Actual Expenses
The table provides information about actual account values and actual expenses for each class. You may use the information, together with the amount you invested, to estimate the expenses that you paid over the period. First, identify the share class you own. Then simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
If you hold Investor Class shares of any American Century Investments fund, or I Class shares of the American Century Diversified Bond Fund, in an American Century Investments account (i.e., not through a financial intermediary or employer-sponsored retirement plan account), American Century Investments may charge you a $25.00 annual 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 $25.00 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.
8
Beginning Account Value 6/1/20 | Ending Account Value 11/30/20 | Expenses Paid During Period(1) 6/1/20 - 11/30/20 | Annualized Expense Ratio(1) | |||||||||||
Actual | ||||||||||||||
Investor Class | $1,000 | $1,277.70 | $6.72 | 1.18% | ||||||||||
I Class | $1,000 | $1,277.90 | $5.58 | 0.98% | ||||||||||
Y Class | $1,000 | $1,279.60 | $4.73 | 0.83% | ||||||||||
A Class | $1,000 | $1,276.50 | $8.14 | 1.43% | ||||||||||
C Class | $1,000 | $1,271.40 | $12.38 | 2.18% | ||||||||||
R Class | $1,000 | $1,274.80 | $9.55 | 1.68% | ||||||||||
R5 Class | $1,000 | $1,278.80 | $5.58 | 0.98% | ||||||||||
R6 Class | $1,000 | $1,279.80 | $4.73 | 0.83% | ||||||||||
Hypothetical | ||||||||||||||
Investor Class | $1,000 | $1,019.10 | $5.96 | 1.18% | ||||||||||
I Class | $1,000 | $1,020.10 | $4.95 | 0.98% | ||||||||||
Y Class | $1,000 | $1,020.85 | $4.19 | 0.83% | ||||||||||
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% | ||||||||||
R5 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. Annualized expense ratio reflects actual expenses, including any applicable fee waivers or expense reimbursements and excluding any acquired fund fees and expenses.
9
Schedule of Investments |
NOVEMBER 30, 2020
Shares | Value | |||||||
COMMON STOCKS — 97.5% | ||||||||
Australia — 2.4% | ||||||||
Atlassian Corp. plc, Class A(1) | 38,310 | $ | 8,621,665 | |||||
CSL Ltd. | 125,270 | 27,363,078 | ||||||
35,984,743 | ||||||||
Belgium — 1.7% | ||||||||
KBC Group NV(1) | 360,320 | 25,009,038 | ||||||
Brazil — 1.1% | ||||||||
Magazine Luiza SA | 2,509,324 | 10,950,834 | ||||||
XP, Inc., Class A(1) | 131,736 | 5,402,493 | ||||||
16,353,327 | ||||||||
Canada — 3.7% | ||||||||
Alimentation Couche-Tard, Inc., B Shares | 249,070 | 8,271,648 | ||||||
Canada Goose Holdings, Inc.(1)(2) | 292,720 | 9,734,794 | ||||||
Canadian Pacific Railway Ltd. | 48,430 | 15,646,242 | ||||||
Element Fleet Management Corp. | 1,478,380 | 15,037,653 | ||||||
Shopify, Inc., Class A(1) | 6,580 | 7,081,949 | ||||||
55,772,286 | ||||||||
China — 3.3% | ||||||||
Alibaba Group Holding Ltd., ADR(1) | 34,030 | 8,962,141 | ||||||
ANTA Sports Products Ltd. | 433,000 | 5,907,651 | ||||||
GDS Holdings Ltd., ADR(1) | 106,000 | 9,543,180 | ||||||
Huazhu Group Ltd., ADR | 207,930 | 10,350,755 | ||||||
Tencent Holdings Ltd. | 200,200 | 14,572,739 | ||||||
49,336,466 | ||||||||
Denmark — 5.4% | ||||||||
Carlsberg A/S, B Shares | 118,910 | 17,646,914 | ||||||
DSV Panalpina A/S | 115,682 | 18,210,956 | ||||||
Novo Nordisk A/S, B Shares | 299,750 | 20,131,715 | ||||||
Orsted A/S | 60,110 | 10,851,618 | ||||||
Vestas Wind Systems A/S | 66,280 | 13,449,526 | ||||||
80,290,729 | ||||||||
Finland — 1.5% | ||||||||
Neste Oyj | 335,580 | 22,372,969 | ||||||
France — 16.2% | ||||||||
Air Liquide SA | 135,600 | 22,203,242 | ||||||
Arkema SA | 133,320 | 15,503,211 | ||||||
Capgemini SE | 134,580 | 18,599,362 | ||||||
Dassault Systemes SE | 69,660 | 12,845,120 | ||||||
Edenred | 369,091 | 21,048,940 | ||||||
Iliad SA | 44,160 | 8,952,126 | ||||||
LVMH Moet Hennessy Louis Vuitton SE | 53,990 | 30,976,664 | ||||||
Peugeot SA(1) | 586,540 | 13,754,536 | ||||||
Safran SA(1) | 137,860 | 20,022,153 | ||||||
Schneider Electric SE | 191,070 | 26,505,965 | ||||||
Teleperformance | 58,580 | 19,469,188 | ||||||
Valeo SA | 640,130 | 24,702,478 |
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Shares | Value | |||||||
Vivendi SA | 270,410 | $ | 8,123,645 | |||||
242,706,630 | ||||||||
Germany — 6.6% | ||||||||
adidas AG(1) | 17,560 | 5,591,754 | ||||||
Daimler AG | 191,030 | 12,856,483 | ||||||
Infineon Technologies AG | 817,079 | 28,721,265 | ||||||
Knorr-Bremse AG | 151,998 | 19,434,052 | ||||||
Muenchener Rueckversicherungs-Gesellschaft AG | 48,690 | 13,566,717 | ||||||
Puma SE(1) | 193,850 | 19,253,987 | ||||||
99,424,258 | ||||||||
Hong Kong — 3.2% | ||||||||
AIA Group Ltd. | 2,399,200 | 26,206,572 | ||||||
Sands China Ltd. | 1,603,200 | 6,572,869 | ||||||
Techtronic Industries Co. Ltd. | 1,149,500 | 14,762,922 | ||||||
47,542,363 | ||||||||
India — 1.2% | ||||||||
HDFC Bank Ltd.(1) | 956,890 | 18,454,816 | ||||||
Indonesia — 0.6% | ||||||||
Bank Central Asia Tbk PT | 4,003,300 | 8,771,046 | ||||||
Ireland — 2.9% | ||||||||
ICON plc(1) | 51,240 | 9,985,651 | ||||||
Kerry Group plc, A Shares | 107,450 | 15,023,759 | ||||||
Ryanair Holdings plc, ADR(1) | 174,480 | 18,105,789 | ||||||
43,115,199 | ||||||||
Italy — 1.0% | ||||||||
Ferrari NV | 71,300 | 15,113,075 | ||||||
Japan — 15.1% | ||||||||
Daifuku Co. Ltd. | 79,700 | 9,236,642 | ||||||
FANUC Corp. | 29,800 | 7,189,853 | ||||||
Hoya Corp. | 144,700 | 19,284,177 | ||||||
Keyence Corp. | 50,100 | 25,463,903 | ||||||
Kobe Bussan Co. Ltd. | 265,200 | 9,257,745 | ||||||
MonotaRO Co. Ltd. | 274,800 | 16,752,324 | ||||||
Murata Manufacturing Co. Ltd. | 367,100 | 32,194,366 | ||||||
Obic Co. Ltd. | 71,900 | 16,182,088 | ||||||
Olympus Corp. | 563,900 | 12,244,204 | ||||||
Pan Pacific International Holdings Corp. | 609,400 | 14,434,644 | ||||||
Recruit Holdings Co. Ltd. | 593,900 | 24,887,771 | ||||||
Sony Corp. | 187,100 | 17,397,920 | ||||||
Terumo Corp. | 426,600 | 16,878,413 | ||||||
Workman Co. Ltd. | 49,900 | 4,434,679 | ||||||
225,838,729 | ||||||||
Netherlands — 4.5% | ||||||||
Adyen NV(1) | 11,708 | 22,333,470 | ||||||
ASML Holding NV | 65,490 | 28,360,156 | ||||||
Just Eat Takeaway.com NV(1) | 59,240 | 6,280,412 | ||||||
Koninklijke DSM NV | 68,146 | 11,164,960 | ||||||
68,138,998 | ||||||||
Singapore — 0.5% | ||||||||
Sea Ltd., ADR(1) | 42,570 | 7,678,351 | ||||||
Spain — 4.7% | ||||||||
Amadeus IT Group SA | 275,213 | 18,744,587 |
11
Shares | Value | |||||||
CaixaBank SA | 2,315,800 | $ | 5,909,510 | |||||
Cellnex Telecom SA | 327,059 | 20,598,519 | ||||||
Iberdrola SA | 1,898,254 | 25,868,153 | ||||||
71,120,769 | ||||||||
Sweden — 4.1% | ||||||||
Atlas Copco AB, A Shares(2) | 296,640 | 14,964,449 | ||||||
Hexagon AB, B Shares(1)(2) | 296,570 | 24,553,897 | ||||||
Telefonaktiebolaget LM Ericsson, B Shares | 1,786,670 | 21,797,597 | ||||||
61,315,943 | ||||||||
Switzerland — 7.3% | ||||||||
Lonza Group AG | 37,040 | 23,190,068 | ||||||
Nestle SA | 200,400 | 22,362,243 | ||||||
Novartis AG | 148,790 | 13,494,494 | ||||||
Partners Group Holding AG | 15,820 | 16,855,605 | ||||||
Sika AG | 71,353 | 18,179,824 | ||||||
Zurich Insurance Group AG | 36,940 | 14,974,122 | ||||||
109,056,356 | ||||||||
Taiwan — 1.1% | ||||||||
Taiwan Semiconductor Manufacturing Co. Ltd. | 990,000 | 16,721,215 | ||||||
United Kingdom — 9.4% | ||||||||
Ashtead Group plc | 280,780 | 11,874,341 | ||||||
ASOS plc(1) | 280,844 | 17,322,249 | ||||||
Associated British Foods plc | 157,670 | 4,443,764 | ||||||
AstraZeneca plc | 281,980 | 29,544,137 | ||||||
Carnival plc | 499,110 | 8,791,925 | ||||||
Ferguson plc | 102,480 | 11,479,637 | ||||||
Halma plc | 223,020 | 6,578,427 | ||||||
London Stock Exchange Group plc | 182,470 | 19,688,874 | ||||||
Ocado Group plc(1) | 169,409 | 4,984,677 | ||||||
Reckitt Benckiser Group plc | 88,820 | 7,798,823 | ||||||
Whitbread plc(1) | 468,750 | 18,980,129 | ||||||
141,486,983 | ||||||||
TOTAL COMMON STOCKS (Cost $919,780,328) | 1,461,604,289 | |||||||
TEMPORARY CASH INVESTMENTS — 2.4% | ||||||||
Repurchase Agreement, BMO Capital Markets Corp., (collateralized by various U.S. Treasury obligations, 0.625% - 1.375%, 1/31/25 - 5/15/30, valued at $16,926,561), in a joint trading account at 0.06%, dated 11/30/20, due 12/1/20 (Delivery value $16,579,175) | 16,579,147 | |||||||
Repurchase Agreement, Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 0.625% - 1.75%, 5/15/23 - 05/15/30, valued at $19,015,911), at 0.07%, dated 11/30/20, due 12/1/20 (Delivery value $18,643,036) | 18,643,000 | |||||||
State Street Institutional U.S. Government Money Market Fund, Premier Class | 876 | 876 | ||||||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $35,223,023) | 35,223,023 | |||||||
TEMPORARY CASH INVESTMENTS - SECURITIES LENDING COLLATERAL(3) — 3.2% | ||||||||
State Street Navigator Securities Lending Government Money Market Portfolio (Cost $48,530,507) | 48,530,507 | 48,530,507 | ||||||
TOTAL INVESTMENT SECURITIES — 103.1% (Cost $1,003,533,858) | 1,545,357,819 | |||||||
OTHER ASSETS AND LIABILITIES — (3.1)% | (45,828,362) | |||||||
TOTAL NET ASSETS — 100.0% | $ | 1,499,529,457 |
12
MARKET SECTOR DIVERSIFICATION | |||||
(as a % of net assets) | |||||
Information Technology | 21.2 | % | |||
Consumer Discretionary | 17.8 | % | |||
Industrials | 17.5 | % | |||
Health Care | 11.6 | % | |||
Financials | 11.4 | % | |||
Consumer Staples | 5.7 | % | |||
Materials | 4.4 | % | |||
Communication Services | 4.0 | % | |||
Utilities | 2.4 | % | |||
Energy | 1.5 | % | |||
Cash and Equivalents* | 2.5 | % |
*Includes temporary cash investments, temporary cash investments - securities lending collateral and other assets and liabilities.
NOTES TO SCHEDULE OF INVESTMENTS | ||||||||
ADR | - | American Depositary Receipt |
(1)Non-income producing.
(2)Security, or a portion thereof, is on loan. At the period end, the aggregate value of securities on loan was $46,036,131. The amount of securities on loan indicated may not correspond with the securities on loan identified because securities with pending sales are in the process of recall from the brokers.
(3)Investment of cash collateral from securities on loan. At the period end, the aggregate value of the collateral held by the fund was $48,530,507.
See Notes to Financial Statements.
13
Statement of Assets and Liabilities |
NOVEMBER 30, 2020 | |||||
Assets | |||||
Investment securities, at value (cost of $955,003,351) — including $46,036,131 of securities on loan | $ | 1,496,827,312 | |||
Investment made with cash collateral received for securities on loan, at value (cost of $48,530,507) | 48,530,507 | ||||
Total investment securities, at value (cost of $1,003,533,858) | 1,545,357,819 | ||||
Foreign currency holdings, at value (cost of $235,127) | 234,328 | ||||
Receivable for investments sold | 1,964,216 | ||||
Receivable for capital shares sold | 642,897 | ||||
Dividends and interest receivable | 3,053,722 | ||||
Securities lending receivable | 119,537 | ||||
Other assets | 64,703 | ||||
1,551,437,222 | |||||
Liabilities | |||||
Payable for collateral received for securities on loan | 48,530,507 | ||||
Payable for investments purchased | 723,625 | ||||
Payable for capital shares redeemed | 364,933 | ||||
Accrued management fees | 1,355,775 | ||||
Distribution and service fees payable | 20,295 | ||||
Accrued foreign taxes | 845,321 | ||||
Accrued other expenses | 67,309 | ||||
51,907,765 | |||||
Net Assets | $ | 1,499,529,457 | |||
Net Assets Consist of: | |||||
Capital (par value and paid-in surplus) | $ | 895,488,773 | |||
Distributable earnings | 604,040,684 | ||||
$ | 1,499,529,457 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | |||||||||
Investor Class, $0.01 Par Value | $1,243,217,078 | 81,139,697 | $15.32 | ||||||||
I Class, $0.01 Par Value | $82,221,715 | 5,400,704 | $15.22 | ||||||||
Y Class, $0.01 Par Value | $29,299,298 | 1,922,437 | $15.24 | ||||||||
A Class, $0.01 Par Value | $81,087,568 | 5,259,299 | $15.42* | ||||||||
C Class, $0.01 Par Value | $1,854,774 | 126,069 | $14.71 | ||||||||
R Class, $0.01 Par Value | $6,700,953 | 431,328 | $15.54 | ||||||||
R5 Class, $0.01 Par Value | $10,828 | 711 | $15.23 | ||||||||
R6 Class, $0.01 Par Value | $55,137,243 | 3,620,175 | $15.23 |
*Maximum offering price $16.36 (net asset value divided by 0.9425).
See Notes to Financial Statements.
14
Statement of Operations |
YEAR ENDED NOVEMBER 30, 2020 | |||||
Investment Income (Loss) | |||||
Income: | |||||
Dividends (net of foreign taxes withheld of $1,999,387) | $ | 16,236,559 | |||
Securities lending, net | 277,225 | ||||
Interest (net of foreign taxes withheld of $520) | 42,163 | ||||
16,555,947 | |||||
Expenses: | |||||
Management fees | 15,175,428 | ||||
Distribution and service fees: | |||||
A Class | 176,045 | ||||
C Class | 21,281 | ||||
R Class | 28,261 | ||||
Directors' fees and expenses | 42,283 | ||||
Other expenses | 97,959 | ||||
15,541,257 | |||||
Net investment income (loss) | 1,014,690 | ||||
Realized and Unrealized Gain (Loss) | |||||
Net realized gain (loss) on: | |||||
Investment transactions (net of foreign tax expenses paid (refunded) of $11,063) | 63,903,619 | ||||
Foreign currency translation transactions | (293,839) | ||||
63,609,780 | |||||
Change in net unrealized appreciation (depreciation) on: | |||||
Investments (includes (increase) decrease in accrued foreign taxes of $(638,867)) | 238,640,468 | ||||
Translation of assets and liabilities in foreign currencies | 197,202 | ||||
238,837,670 | |||||
Net realized and unrealized gain (loss) | 302,447,450 | ||||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 303,462,140 |
See Notes to Financial Statements.
15
Statement of Changes in Net Assets |
YEARS ENDED NOVEMBER 30, 2020 AND NOVEMBER 30, 2019 | ||||||||
Increase (Decrease) in Net Assets | November 30, 2020 | November 30, 2019 | ||||||
Operations | ||||||||
Net investment income (loss) | $ | 1,014,690 | $ | 5,729,293 | ||||
Net realized gain (loss) | 63,609,780 | 19,513,072 | ||||||
Change in net unrealized appreciation (depreciation) | 238,837,670 | 179,991,328 | ||||||
Net increase (decrease) in net assets resulting from operations | 303,462,140 | 205,233,693 | ||||||
Distributions to Shareholders | ||||||||
From earnings: | ||||||||
Investor Class | (4,906,875) | (113,411,938) | ||||||
I Class | (471,463) | (6,954,669) | ||||||
Y Class | (151,818) | (673,691) | ||||||
A Class | (231,840) | (6,300,639) | ||||||
C Class | (9,443) | (380,655) | ||||||
R Class | (19,202) | (308,126) | ||||||
R5 Class | (40) | (561) | ||||||
R6 Class | (297,497) | (3,902,361) | ||||||
Decrease in net assets from distributions | (6,088,178) | (131,932,640) | ||||||
Capital Share Transactions | ||||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | (167,936,818) | (60,754,535) | ||||||
Net increase (decrease) in net assets | 129,437,144 | 12,546,518 | ||||||
Net Assets | ||||||||
Beginning of period | 1,370,092,313 | 1,357,545,795 | ||||||
End of period | $ | 1,499,529,457 | $ | 1,370,092,313 | ||||
See Notes to Financial Statements.
16
Notes to Financial Statements |
NOVEMBER 30, 2020
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, I Class, Y Class, A Class, C Class, R Class, R5 Class and 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.
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 (NAV) 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 NAV 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.
17
The fund monitors for significant events occurring after the close of an investment’s primary exchange but before the fund’s NAV 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. 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 less foreign taxes withheld, if any, is recorded on the accrual basis and includes accretion of discounts and amortization of premiums. Securities lending income is net of fees and rebates earned by the lending agent for its services.
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.
Segregated Assets — In accordance with the 1940 Act, the fund segregates assets on its books and records to cover certain types of investment securities and other financial instruments. ACIM monitors, on a daily basis, the securities segregated to ensure the fund designates a sufficient amount of liquid assets, marked-to-market daily. The fund may also receive assets or be required to pledge assets at the custodian bank or with a broker for collateral requirements.
Income Tax Status — It is the fund’s policy to distribute substantially all net investment income and net realized gains to shareholders and to otherwise qualify as a regulated investment company under provisions of the Internal Revenue Code. Accordingly, no provision has been made for income taxes. The fund files U.S. federal, state, local and non-U.S. tax returns as applicable. The fund's tax returns are subject to examination by the relevant taxing authority until expiration of the applicable statute of limitations, which is generally three years from the date of filing but can be longer in certain jurisdictions. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination and for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
18
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 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.
Securities Lending — Securities are lent to qualified financial institutions and brokers. State Street Bank & Trust Co. serves as securities lending agent to the fund pursuant to a Securities Lending Agreement. The lending of securities exposes the fund to risks such as: the borrowers may fail to return the loaned securities, the borrowers may not be able to provide additional collateral, the fund may experience delays in recovery of the loaned securities or delays in access to collateral, or the fund may experience losses related to the investment collateral. To minimize certain risks, loan counterparties pledge collateral in the form of cash and/or securities. The lending agent has agreed to indemnify the fund in the case of default of any securities borrowed. Cash collateral received is invested in the State Street Navigator Securities Lending Government Money Market Portfolio, a money market mutual fund registered under the 1940 Act. The loans may also be secured by U.S. government securities in an amount at least equal to the market value of the securities loaned, plus accrued interest and dividends, determined on a daily basis and adjusted accordingly. By lending securities, the fund seeks to increase its net investment income through the receipt of interest and fees. Such income is reflected separately within the Statement of Operations. The value of loaned securities and related collateral outstanding at period end, if any, are shown on a gross basis within the Schedule of Investments and Statement of Assets and Liabilities.
The following table reflects a breakdown of transactions accounted for as secured borrowings, the gross obligation by the type of collateral pledged, and the remaining contractual maturity of those transactions as of November 30, 2020.
Remaining Contractual Maturity of Agreements | |||||||||||||||||
Overnight and Continuous | <30 days | Between 30 & 90 days | >90 days | Total | |||||||||||||
Securities Lending Transactions(1) | |||||||||||||||||
Common Stocks | $ | 48,530,507 | — | — | — | $ | 48,530,507 | ||||||||||
Gross amount of recognized liabilities for securities lending transactions | $ | 48,530,507 |
(1)Amount represents the payable for cash collateral received for securities on loan. This will generally be in the Overnight and Continuous column as the securities are typically callable on demand.
3. Fees and Transactions with Related Parties
Certain officers and directors of the corporation are also officers and/or directors of American Century Companies, Inc. (ACC). The corporation’s investment advisor, ACIM, the corporation's distributor, American Century Investment Services, Inc. (ACIS), and the corporation’s transfer agent, American Century Services, LLC, are wholly owned, directly or indirectly, by ACC. Various funds issued by American Century Asset Allocation Portfolios, Inc. own, in aggregate, 16% of the shares of the fund.
19
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 ACIM will pay all expenses of managing and operating the fund, except brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), extraordinary expenses, and expenses incurred in connection with the provision of shareholder services and distribution services under a plan adopted pursuant to Rule 12b-1 under the 1940 Act. The fee is computed and accrued daily based on each class's daily net assets and paid monthly in arrears. The difference in the fee among the classes is a result of their separate arrangements for non-Rule 12b-1 shareholder services. It is not the result of any difference in advisory or custodial fees or other expenses related to the management of the fund’s assets, which do not vary by class. The rate of the fee is determined by applying a fee rate calculation formula. This formula takes into account the fund’s assets as well as certain assets, if any, of other clients of the investment advisor outside the American Century Investments family of funds (such as subadvised funds and separate accounts) that use very similar investment teams and strategies (strategy assets). The strategy assets of the fund also include the assets of NT International Growth Fund, one fund in a series issued by the corporation.
The management fee schedule range and the effective annual management fee for each class for the period ended November 30, 2020 are as follows:
Management Fee Schedule Range | Effective Annual Management Fee | |||||||
Investor Class | 1.050% to 1.500% | 1.17% | ||||||
I Class | 0.850% to 1.300% | 0.97% | ||||||
Y Class | 0.700% to 1.150% | 0.82% | ||||||
A Class | 1.050% to 1.500% | 1.17% | ||||||
C Class | 1.050% to 1.500% | 1.17% | ||||||
R Class | 1.050% to 1.500% | 1.17% | ||||||
R5 Class | 0.850% to 1.300% | 0.97% | ||||||
R6 Class | 0.700% to 1.150% | 0.82% |
Distribution and Service Fees — The Board of Directors has adopted a separate Master Distribution and Individual Shareholder Services Plan for each of the A Class, C Class and R Class (collectively the plans), pursuant to Rule 12b-1 of the 1940 Act. The plans provide that the A Class will pay ACIS an annual distribution and service fee of 0.25%. The plans provide that the C Class will pay ACIS an annual distribution and service fee of 1.00%, of which 0.25% is paid for individual shareholder services and 0.75% is paid for distribution services. The plans provide that the R Class will pay ACIS an annual distribution and service fee of 0.50%. The fees are computed and accrued daily based on each class’s daily net assets and paid monthly in arrears. The fees are used to pay financial intermediaries for distribution and individual shareholder services. Fees incurred under the plans during the period ended November 30, 2020 are detailed in the Statement of Operations.
Directors' Fees and Expenses — The Board of Directors is responsible for overseeing the investment advisor’s management and operations of the fund. The directors receive detailed information about the fund and its investment advisor regularly throughout the year, and meet at least quarterly with management of the investment advisor to review reports about fund operations. The fund’s officers do not receive compensation from the fund.
Interfund Transactions — The fund may enter into security transactions with other American Century Investments funds and other client accounts of the investment advisor, in accordance with the 1940 Act rules and procedures adopted by the Board of Directors. The rules and procedures require, among other things, that these transactions be effected at the independent current market price of the security. There were no interfund transactions during the period.
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the period ended November 30, 2020 were $668,377,763 and $860,109,338, respectively.
20
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Year ended November 30, 2020 | Year ended November 30, 2019 | |||||||||||||
Shares | Amount | Shares | Amount | |||||||||||
Investor Class/Shares Authorized | 1,250,000,000 | 1,250,000,000 | ||||||||||||
Sold | 3,240,677 | $ | 38,156,109 | 2,936,669 | $ | 32,672,588 | ||||||||
Issued in reinvestment of distributions | 379,819 | 4,748,521 | 11,000,262 | 110,112,626 | ||||||||||
Redeemed | (16,638,244) | (211,154,875) | (18,952,247) | (213,897,065) | ||||||||||
(13,017,748) | (168,250,245) | (5,015,316) | (71,111,851) | |||||||||||
I Class/Shares Authorized | 90,000,000 | 90,000,000 | ||||||||||||
Sold | 1,092,403 | 13,679,290 | 1,106,320 | 12,258,681 | ||||||||||
Issued in reinvestment of distributions | 36,444 | 453,353 | 671,521 | 6,668,204 | ||||||||||
Redeemed | (1,813,504) | (22,006,067) | (1,445,190) | (16,173,218) | ||||||||||
(684,657) | (7,873,424) | 332,651 | 2,753,667 | |||||||||||
Y Class/Shares Authorized | 30,000,000 | 30,000,000 | ||||||||||||
Sold | 889,212 | 11,191,681 | 1,061,894 | 12,025,226 | ||||||||||
Issued in reinvestment of distributions | 12,036 | 149,903 | 65,166 | 646,443 | ||||||||||
Redeemed | (500,101) | (6,593,043) | (130,199) | (1,497,748) | ||||||||||
401,147 | 4,748,541 | 996,861 | 11,173,921 | |||||||||||
A Class/Shares Authorized | 80,000,000 | 80,000,000 | ||||||||||||
Sold | 1,149,517 | 14,501,908 | 923,390 | 10,602,327 | ||||||||||
Issued in reinvestment of distributions | 18,170 | 228,255 | 614,961 | 6,217,253 | ||||||||||
Redeemed | (1,359,112) | (17,240,766) | (1,526,896) | (17,523,483) | ||||||||||
(191,425) | (2,510,603) | 11,455 | (703,903) | |||||||||||
C Class/Shares Authorized | 30,000,000 | 30,000,000 | ||||||||||||
Sold | 12,823 | 149,256 | 7,853 | 81,463 | ||||||||||
Issued in reinvestment of distributions | 695 | 8,410 | 36,374 | 356,101 | ||||||||||
Redeemed | (112,520) | (1,326,676) | (190,670) | (2,084,116) | ||||||||||
(99,002) | (1,169,010) | (146,443) | (1,646,552) | |||||||||||
R Class/Shares Authorized | 30,000,000 | 30,000,000 | ||||||||||||
Sold | 73,216 | 960,881 | 338,828 | 3,544,091 | ||||||||||
Issued in reinvestment of distributions | 1,499 | 19,053 | 28,116 | 287,906 | ||||||||||
Redeemed | (126,035) | (1,616,452) | (152,739) | (1,796,153) | ||||||||||
(51,320) | (636,518) | 214,205 | 2,035,844 | |||||||||||
R5 Class/Shares Authorized | 20,000,000 | 20,000,000 | ||||||||||||
Sold | 189 | 2,856 | — | — | ||||||||||
Issued in reinvestment of distributions | 3 | 40 | 57 | 561 | ||||||||||
192 | 2,896 | 57 | 561 | |||||||||||
R6 Class/Shares Authorized | 50,000,000 | 50,000,000 | ||||||||||||
Sold | 1,715,636 | 21,568,793 | 893,061 | 9,948,629 | ||||||||||
Issued in reinvestment of distributions | 23,795 | 296,197 | 392,562 | 3,894,212 | ||||||||||
Redeemed | (1,139,714) | (14,113,445) | (1,520,322) | (17,099,063) | ||||||||||
599,717 | 7,751,545 | (234,699) | (3,256,222) | |||||||||||
Net increase (decrease) | (13,043,096) | $ | (167,936,818) | (3,841,229) | $ | (60,754,535) |
21
6. Fair Value Measurements
The fund’s investments valuation process is based on several considerations and may use multiple inputs to determine the fair value of the investments held by the fund. In conformity with accounting principles generally accepted in the United States of America, the inputs used to determine a valuation are classified into three broad levels.
•Level 1 valuation inputs consist of unadjusted quoted prices in an active market for identical investments.
•Level 2 valuation inputs consist of direct or indirect observable market data (including quoted prices for comparable investments, evaluations of subsequent market events, interest rates, prepayment speeds, credit risk, etc.). These inputs also consist of quoted prices for identical investments initially expressed in local currencies that are adjusted through translation into U.S. dollars.
•Level 3 valuation inputs consist of unobservable data (including a fund’s own assumptions).
The level classification is based on the lowest level input that is significant to the fair valuation measurement. The valuation inputs are not necessarily an indication of the risks associated with investing in these securities or other financial instruments.
The following is a summary of the level classifications as of period end. The Schedule of Investments provides additional information on the fund’s portfolio holdings.
Level 1 | Level 2 | Level 3 | |||||||||
Assets | |||||||||||
Investment Securities | |||||||||||
Common Stocks | |||||||||||
Australia | $ | 8,621,665 | $ | 27,363,078 | — | ||||||
Brazil | 5,402,493 | 10,950,834 | — | ||||||||
China | 28,856,076 | 20,480,390 | — | ||||||||
Ireland | 28,091,440 | 15,023,759 | — | ||||||||
Singapore | 7,678,351 | — | — | ||||||||
Other Countries | — | 1,309,136,203 | — | ||||||||
Temporary Cash Investments | 876 | 35,222,147 | — | ||||||||
Temporary Cash Investments - Securities Lending Collateral | 48,530,507 | — | — | ||||||||
$ | 127,181,408 | $ | 1,418,176,411 | — |
7. Risk Factors
The value of the fund’s shares will go up and down, sometimes rapidly or unpredictably, based on the performance of the securities owned by the fund and other factors generally affecting the securities market. Market risks, including political, regulatory, economic and social developments, can affect the value of the fund’s investments. Natural disasters, public health emergencies, terrorism and other unforeseeable events may lead to increased market volatility and may have adverse long-term effects on world economies and markets generally.
There are certain risks involved in investing in foreign securities. These risks include those resulting from political events (such as civil unrest, national elections and imposition of exchange controls), social and economic events (such as labor strikes and rising inflation), and natural disasters. Securities of foreign issuers may be less liquid and more volatile. Investing in emerging markets or a significant portion of assets in one country or region may accentuate these risks.
22
8. Federal Tax Information
On December 22, 2020, the fund declared and paid a per-share distribution from net realized gains to shareholders of record on December 21, 2020 of $0.6780 for the Investor Class, I Class, Y Class, A Class, C Class, R Class, R5 Class and R6 Class.
On December 22, 2020, the fund declared and paid the following per-share distributions from net investment income to shareholders of record on December 21, 2020:
Investor Class | I Class | Y Class | A Class | C Class | R Class | R5 Class | R6 Class | ||||||||||||||||
$0.0026 | $0.0339 | $0.0574 | — | — | — | $0.0339 | $0.0574 |
The tax character of distributions paid during the years ended November 30, 2020 and November 30, 2019 were as follows:
2020 | 2019 | |||||||
Distributions Paid From | ||||||||
Ordinary income | $ | 1,443,053 | $ | 13,681,516 | ||||
Long-term capital gains | $ | 4,645,125 | $ | 118,251,124 |
The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
As of period end, the federal tax cost of investments and the components of distributable earnings on a tax-basis were as follows:
Federal tax cost of investments | $ | 1,007,387,775 | |||
Gross tax appreciation of investments | $ | 540,572,387 | |||
Gross tax depreciation of investments | (2,602,343) | ||||
Net tax appreciation (depreciation) of investments | 537,970,044 | ||||
Net tax appreciation (depreciation) on translation of assets and liabilities in foreign currencies | (729,092) | ||||
Net tax appreciation (depreciation) | $ | 537,240,952 | |||
Undistributed ordinary income | $ | 704,717 | |||
Accumulated long-term gains | $ | 66,095,015 |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales.
23
Financial Highlights |
For a Share Outstanding Throughout the Years Ended 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 | |||||||||||||||||||||||||||||||||||||||||
2020 | $12.35 | 0.01 | 3.01 | 3.02 | (0.01) | (0.04) | (0.05) | $15.32 | 24.57% | 1.18% | 0.06% | 51% | $1,243,217 | ||||||||||||||||||||||||||||
2019 | $11.83 | 0.05 | 1.66 | 1.71 | (0.12) | (1.07) | (1.19) | $12.35 | 16.82% | 1.18% | 0.43% | 68% | $1,162,998 | ||||||||||||||||||||||||||||
2018 | $13.80 | 0.08 | (1.28) | (1.20) | (0.13) | (0.64) | (0.77) | $11.83 | (9.23)% | 1.17% | 0.62% | 69% | $1,173,094 | ||||||||||||||||||||||||||||
2017 | $10.56 | 0.10 | 3.19 | 3.29 | (0.05) | — | (0.05) | $13.80 | 31.32% | 1.17% | 0.80% | 57% | $1,357,353 | ||||||||||||||||||||||||||||
2016 | $12.25 | 0.09 | (1.10) | (1.01) | (0.06) | (0.62) | (0.68) | $10.56 | (8.59)% | 1.18% | 0.83% | 70% | $1,229,531 | ||||||||||||||||||||||||||||
I Class | |||||||||||||||||||||||||||||||||||||||||
2020 | $12.27 | 0.03 | 3.00 | 3.03 | (0.04) | (0.04) | (0.08) | $15.22 | 24.82% | 0.98% | 0.26% | 51% | $82,222 | ||||||||||||||||||||||||||||
2019 | $11.76 | 0.07 | 1.66 | 1.73 | (0.15) | (1.07) | (1.22) | $12.27 | 17.09% | 0.98% | 0.63% | 68% | $74,688 | ||||||||||||||||||||||||||||
2018 | $13.74 | 0.10 | (1.28) | (1.18) | (0.16) | (0.64) | (0.80) | $11.76 | (9.12)% | 0.97% | 0.82% | 69% | $67,677 | ||||||||||||||||||||||||||||
2017 | $10.51 | 0.13 | 3.17 | 3.30 | (0.07) | — | (0.07) | $13.74 | 31.64% | 0.97% | 1.00% | 57% | $90,679 | ||||||||||||||||||||||||||||
2016 | $12.19 | 0.11 | (1.09) | (0.98) | (0.08) | (0.62) | (0.70) | $10.51 | (8.40)% | 0.98% | 1.03% | 70% | $59,236 | ||||||||||||||||||||||||||||
Y Class | |||||||||||||||||||||||||||||||||||||||||
2020 | $12.29 | 0.05 | 2.99 | 3.04 | (0.05) | (0.04) | (0.09) | $15.24 | 24.97% | 0.83% | 0.41% | 51% | $29,299 | ||||||||||||||||||||||||||||
2019 | $11.78 | 0.08 | 1.66 | 1.74 | (0.16) | (1.07) | (1.23) | $12.29 | 17.27% | 0.83% | 0.78% | 68% | $18,691 | ||||||||||||||||||||||||||||
2018 | $13.75 | 0.15 | (1.30) | (1.15) | (0.18) | (0.64) | (0.82) | $11.78 | (8.95)% | 0.82% | 0.97% | 69% | $6,177 | ||||||||||||||||||||||||||||
2017(3) | $11.48 | 0.09 | 2.18 | 2.27 | — | — | — | $13.75 | 19.77% | 0.82%(4) | 1.14%(4) | 57%(5) | $6 |
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 | |||||||||||||||||||||||||||||||||||||||||
2020 | $12.45 | (0.02) | 3.03 | 3.01 | — | (0.04) | (0.04) | $15.42 | 24.27% | 1.43% | (0.19)% | 51% | $81,088 | ||||||||||||||||||||||||||||
2019 | $11.91 | 0.02 | 1.69 | 1.71 | (0.10) | (1.07) | (1.17) | $12.45 | 16.56% | 1.43% | 0.18% | 68% | $67,857 | ||||||||||||||||||||||||||||
2018 | $13.88 | 0.05 | (1.29) | (1.24) | (0.09) | (0.64) | (0.73) | $11.91 | (9.45)% | 1.42% | 0.37% | 69% | $64,784 | ||||||||||||||||||||||||||||
2017 | $10.63 | 0.06 | 3.22 | 3.28 | (0.03) | — | (0.03) | $13.88 | 30.88% | 1.42% | 0.55% | 57% | $77,983 | ||||||||||||||||||||||||||||
2016 | $12.32 | 0.06 | (1.09) | (1.03) | (0.04) | (0.62) | (0.66) | $10.63 | (8.73)% | 1.43% | 0.58% | 70% | $108,847 | ||||||||||||||||||||||||||||
C Class | |||||||||||||||||||||||||||||||||||||||||
2020 | $11.97 | (0.11) | 2.89 | 2.78 | — | (0.04) | (0.04) | $14.71 | 23.32% | 2.18% | (0.94)% | 51% | $1,855 | ||||||||||||||||||||||||||||
2019 | $11.49 | (0.06) | 1.62 | 1.56 | (0.01) | (1.07) | (1.08) | $11.97 | 15.66% | 2.18% | (0.57)% | 68% | $2,694 | ||||||||||||||||||||||||||||
2018 | $13.42 | (0.04) | (1.25) | (1.29) | — | (0.64) | (0.64) | $11.49 | (10.12)% | 2.17% | (0.38)% | 69% | $4,268 | ||||||||||||||||||||||||||||
2017 | $10.33 | (0.03) | 3.12 | 3.09 | — | — | — | $13.42 | 29.91% | 2.17% | (0.20)% | 57% | $6,743 | ||||||||||||||||||||||||||||
2016 | $12.04 | (0.02) | (1.07) | (1.09) | — | (0.62) | (0.62) | $10.33 | (9.43)% | 2.18% | (0.17)% | 70% | $6,743 | ||||||||||||||||||||||||||||
R Class | |||||||||||||||||||||||||||||||||||||||||
2020 | $12.58 | (0.06) | 3.06 | 3.00 | — | (0.04) | (0.04) | $15.54 | 24.04% | 1.68% | (0.44)% | 51% | $6,701 | ||||||||||||||||||||||||||||
2019 | $12.02 | (0.01) | 1.71 | 1.70 | (0.07) | (1.07) | (1.14) | $12.58 | 16.17% | 1.68% | (0.07)% | 68% | $6,069 | ||||||||||||||||||||||||||||
2018 | $14.00 | 0.02 | (1.30) | (1.28) | (0.06) | (0.64) | (0.70) | $12.02 | (9.68)% | 1.67% | 0.12% | 69% | $3,226 | ||||||||||||||||||||||||||||
2017 | $10.72 | 0.03 | 3.25 | 3.28 | — | — | — | $14.00 | 30.60% | 1.67% | 0.30% | 57% | $3,609 | ||||||||||||||||||||||||||||
2016 | $12.43 | 0.04 | (1.12) | (1.08) | (0.01) | (0.62) | (0.63) | $10.72 | (9.00)% | 1.68% | 0.33% | 70% | $3,090 |
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) | |||||||||||||||||||||||||||||
R5 Class | |||||||||||||||||||||||||||||||||||||||||
2020 | $12.28 | 0.03 | 3.00 | 3.03 | (0.04) | (0.04) | (0.08) | $15.23 | 24.80% | 0.98% | 0.26% | 51% | $11 | ||||||||||||||||||||||||||||
2019 | $11.77 | 0.07 | 1.66 | 1.73 | (0.15) | (1.07) | (1.22) | $12.28 | 17.09% | 0.98% | 0.63% | 68% | $6 | ||||||||||||||||||||||||||||
2018 | $13.73 | 0.11 | (1.27) | (1.16) | (0.16) | (0.64) | (0.80) | $11.77 | (9.03)% | 0.97% | 0.82% | 69% | $5 | ||||||||||||||||||||||||||||
2017(3) | $11.48 | 0.08 | 2.17 | 2.25 | — | — | — | $13.73 | 19.60% | 0.97%(4) | 0.99%(4) | 57%(5) | $6 | ||||||||||||||||||||||||||||
R6 Class | |||||||||||||||||||||||||||||||||||||||||
2020 | $12.28 | 0.05 | 2.99 | 3.04 | (0.05) | (0.04) | (0.09) | $15.23 | 24.99% | 0.83% | 0.41% | 51% | $55,137 | ||||||||||||||||||||||||||||
2019 | $11.77 | 0.09 | 1.65 | 1.74 | (0.16) | (1.07) | (1.23) | $12.28 | 17.28% | 0.83% | 0.78% | 68% | $37,088 | ||||||||||||||||||||||||||||
2018 | $13.75 | 0.14 | (1.29) | (1.15) | (0.19) | (0.64) | (0.83) | $11.77 | (8.93)% | 0.82% | 0.97% | 69% | $38,315 | ||||||||||||||||||||||||||||
2017 | $10.53 | 0.15 | 3.16 | 3.31 | (0.09) | — | (0.09) | $13.75 | 31.68% | 0.82% | 1.15% | 57% | $29,846 | ||||||||||||||||||||||||||||
2016 | $12.20 | 0.14 | (1.10) | (0.96) | (0.09) | (0.62) | (0.71) | $10.53 | (8.19)% | 0.83% | 1.18% | 70% | $37,903 |
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 10, 2017 (commencement of sale) through November 30, 2017.
(4)Annualized.
(5)Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended November 30, 2017.
See Notes to Financial Statements.
Report of Independent Registered Public Accounting Firm |
To the Shareholders and the Board of Directors of American Century World Mutual Funds, Inc.:
Opinion on the Financial Statements and Financial Highlights
We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of International Growth Fund (the “Fund”), one of the funds constituting the American Century World Mutual Funds, Inc., as of November 30, 2020, the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of International Growth Fund of the American Century World Mutual Funds, Inc. as of November 30, 2020, and the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on the Fund’s financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. Our procedures included confirmation of securities owned as of November 30, 2020, by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
DELOITTE & TOUCHE LLP
Kansas City, Missouri
January 19, 2021
We have served as the auditor of one or more American Century investment companies since 1997.
27
Management |
The Board of Directors
The individuals listed below serve as directors of the funds. Each director will continue to serve in this capacity until death, retirement, resignation or removal from office. The board has adopted a mandatory retirement age for directors who are not “interested persons,” as that term is defined in the Investment Company Act (independent directors). Independent directors shall retire by December 31 of the year in which they reach their 75th birthday.
Mr. Thomas is an “interested person” because he currently serves as President and Chief Executive Officer of American Century Companies, Inc. (ACC), the parent company of American Century Investment Management, Inc. (ACIM or the advisor). The other directors (more than three-fourths of the total number) are independent. They are not employees, directors or officers of, and have no financial interest in, ACC or any of its wholly owned, direct or indirect, subsidiaries, including ACIM, American Century Investment Services, Inc. (ACIS) and American Century Services, LLC (ACS), and they do not have any other affiliations, positions or relationships that would cause them to be considered “interested persons” under the Investment Company Act. The directors serve in this capacity for seven (in the case of Jonathan S. Thomas, 16; and Stephen E. Yates, 8) registered investment companies in the American Century Investments family of funds.
The following table presents additional information about the directors. The mailing address for each director is 4500 Main Street, Kansas City, Missouri 64111.
Name (Year of Birth) | Position(s) Held with Funds | Length of Time Served | Principal Occupation(s) During Past 5 Years | Number of American Century Portfolios Overseen by Director | Other Directorships Held During Past 5 Years | ||||||||||||
Independent Directors | |||||||||||||||||
Thomas W. Bunn (1953) | Director | Since 2017 | Retired | 62 | SquareTwo Financial; Barings (formerly Babson Capital Funds Trust) (2013 to 2016) | ||||||||||||
Chris H. Cheesman (1962) | Director | Since 2019 | Retired. Senior Vice President & Chief Audit Executive, AllianceBernstein (1999 to 2018) | 62 | None | ||||||||||||
Barry Fink (1955) | Director | Since 2012 (independent since 2016) | Retired | 62 | None | ||||||||||||
Rajesh K. Gupta (1960) | Director | Since 2019 | Partner Emeritus, SeaCrest Investment Management and SeaCrest Wealth Management (2019 to Present); Chief Executive Officer and Chief Investment Officer, SeaCrest Investment Management (2006 to 2019); Chief Executive Officer and Chief Investment Officer, SeaCrest Wealth Management (2008 to 2019) | 62 | None |
28
Name (Year of Birth) | Position(s) Held with Funds | Length of Time Served | Principal Occupation(s) During Past 5 Years | Number of American Century Portfolios Overseen by Director | Other Directorships Held During Past 5 Years | ||||||||||||
Independent Directors | |||||||||||||||||
Lynn Jenkins (1963) | Director | Since 2019 | Consultant, LJ Strategies (2019 to present); United States Representative, U.S. House of Representatives (2009 to 2018) | 62 | MGP Ingredients, Inc. | ||||||||||||
Jan M. Lewis (1957) | Director | Since 2011 | Retired | 62 | None | ||||||||||||
John R. Whitten (1946) | Director | Since 2008 | Retired | 62 | Onto Innovation Inc. (2019 to 2020); Rudolph Technologies, Inc. (2006 to 2019) | ||||||||||||
Stephen E. Yates (1948) | Director and Chairman of the Board | Since 2012 (Chairman since 2018) | Retired | 87 | None | ||||||||||||
Interested Director | |||||||||||||||||
Jonathan S. Thomas (1963) | Director | Since 2007 | President and Chief Executive Officer, ACC (2007 to present). Also serves as Chief Executive Officer, ACS; Executive Vice President, ACIM; Director, ACC, ACIM and other ACC subsidiaries | 125 | None |
The Statement of Additional Information has additional information about the fund's directors and is available without charge, upon request, by calling 1-800-345-2021.
29
Officers
The following table presents certain information about the executive officers of the funds. Each officer serves as an officer for each of the 16 (in the case of Robert J. Leach, 15) investment companies in the American Century family of funds. No officer is compensated for his or her service as an officer of the funds. The listed officers are interested persons of the funds and are appointed or re-appointed on an annual basis. The mailing address for each officer listed below is 4500 Main Street, Kansas City, Missouri 64111.
Name (Year of Birth) | Offices with the Funds | Principal Occupation(s) During the Past Five Years | ||||||
Patrick Bannigan (1965) | President since 2019 | Executive Vice President and Director, ACC (2012 to present); Chief Financial Officer, Chief Accounting Officer and Treasurer, ACC (2015 to present). Also serves as President, ACS; Vice President, ACIM; Chief Financial Officer, Chief Accounting Officer and/or Director, ACIM, ACS and other ACC subsidiaries | ||||||
R. Wes Campbell (1974) | Chief Financial Officer and Treasurer since 2018 | Vice President, ACS, (2020 to present); Investment Operations and Investment Accounting, ACS (2000 to present) | ||||||
Amy D. Shelton (1964) | Chief Compliance Officer and Vice President since 2014 | Chief Compliance Officer, American Century funds, (2014 to present); Chief Compliance Officer, ACIM (2014 to present); Chief Compliance Officer, ACIS (2009 to present). Also serves as Vice President, ACIS | ||||||
Charles A. Etherington (1957) | General Counsel since 2007 and Senior Vice President since 2006 | Attorney, ACC (1994 to present); Vice President, ACC (2005 to present); General Counsel, ACC (2007 to present). Also serves as General Counsel, ACIM, ACS, ACIS and other ACC subsidiaries; and Senior Vice President, ACIM and ACS | ||||||
C. Jean Wade (1964) | Vice President since 2012 | Senior Vice President, ACS (2017 to present); Vice President, ACS (2000 to 2017) | ||||||
Robert J. Leach (1966) | Vice President since 2006 | Vice President, ACS (2000 to present) | ||||||
David H. Reinmiller (1963) | Vice President since 2000 | Attorney, ACC (1994 to present). Also serves as Vice President, ACIM and ACS | ||||||
Ward D. Stauffer (1960) | Secretary since 2005 | Attorney, ACC (2003 to present) |
30
Approval of Management Agreement |
At a meeting held on June 24, 2020, the Fund’s Board of Directors (the "Board") unanimously approved the renewal of the 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, contracts for investment advisory services are required to be reviewed, evaluated, and approved by a majority of a fund’s directors (the “Directors”), including a majority of the independent Directors, each year.
Prior to its consideration of the renewal of the management agreement, the Directors requested and reviewed extensive data and information compiled by the Advisor and certain independent providers of evaluation data concerning the Fund and the services provided to the Fund by the Advisor. This review was in addition to the oversight and evaluation undertaken by the Board and its committees on a continual basis and the information received was supplemental to the extensive information that the Board and its committees receive and consider throughout the year.
In connection with its consideration of the renewal of the management agreement, the Board’s review and evaluation of the services provided by the Advisor included, but was not limited to, the following:
•the nature, extent, and quality of investment management, shareholder services, and other services provided and to be provided to the Fund;
•the wide range of other programs and services provided and to be provided to the Fund and its shareholders on a routine and non-routine basis;
•the Fund’s investment performance, including data comparing the Fund's performance to appropriate benchmarks and/or a peer group of other mutual funds with similar investment objectives and strategies;
•the cost of owning the Fund compared to the cost of owning similar funds;
•the compliance policies, procedures, and regulatory experience of the Advisor and the Fund's service providers;
•the Advisor’s strategic plans;
•the Advisor’s business continuity plans and specifically its response to the COVID-19 pandemic;
•financial data showing the cost of services provided to the Fund, the profitability of the Fund to the Advisor, and the overall profitability of the Advisor;
•possible economies of scale associated with the Advisor’s management of the Fund and other accounts;
•services provided and charges to the Advisor's other investment management clients;
•acquired fund fees and expenses;
•payments and practices in connection with financial intermediaries holding shares of the Fund and the services provided by intermediaries in connection therewith; and
•possible collateral benefits to the Advisor from the management of the Fund.
The Board held two meetings to consider the renewal. The independent Directors also met in private session three times to review and discuss the information provided in response to their request. The independent Directors held active discussions with the Advisor regarding the renewal of the management agreement, requesting supplemental information, and reviewing information provided by the Advisor in response thereto. The independent Directors had the benefit of the advice of their independent counsel throughout the process.
Factors Considered
The Directors considered all of the information provided by the Advisor, the independent data providers, and 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
31
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. In deciding to renew the management agreement, the Board based its decision on a number of factors, including without limitation the following:
Nature, Extent and Quality of Services — Generally. Under the management agreement, the Advisor is responsible for providing or arranging for all services necessary for the operation of the Fund. The Board noted that the Advisor provides or arranges at its own expense a wide variety of services including without limitation the following:
•constructing and designing the Fund
•portfolio research and security selection
•initial capitalization/funding
•securities trading
•Fund administration
•custody of Fund assets
•daily valuation of the Fund’s portfolio
•shareholder servicing and transfer agency, including shareholder confirmations, recordkeeping, and communications
•legal services (except the independent Directors’ counsel)
•regulatory and portfolio compliance
•financial reporting
•marketing and distribution (except amounts paid by the Fund under Rule 12b-1 plans)
The Board noted that many of these services have expanded over time in terms of both quantity and complexity in response to shareholder demands, competition in the industry, changing distribution channels, and the changing regulatory environment.
Investment Management Services. The nature of the investment management services provided to the Fund is quite complex and allows Fund shareholders access to professional money management, instant diversification of their investments within an asset class, the opportunity to easily diversify among asset classes by investing in or exchanging among various American Century Investments funds, and liquidity. In evaluating investment performance, the Board expects the Advisor to manage the Fund in accordance with its investment objectives and approved strategies. Further, the Directors recognize that the Advisor has an obligation to monitor trading activities, and in particular to seek the best execution of fund trades, and to evaluate the use of and payment for research. In providing these services, the Advisor utilizes teams of investment professionals (portfolio managers, analysts, research assistants, and securities traders) who require extensive information technology, research, training, compliance, and other systems to conduct their business. The Board, directly and through its Fund Performance Review Committee, provides oversight of the investment performance process. It regularly reviews investment performance information for the Fund, together with comparative information for appropriate benchmarks and/or peer groups of similarly-managed funds, over different time horizons. The Directors also review investment performance information during the management agreement renewal process. If performance concerns are identified, the Fund receives special reviews until performance improves, during which the Board discusses with the Advisor the reasons for such results (e.g., market conditions, security selection) and any efforts being undertaken to improve performance. The Fund’s performance was above its benchmark for the one-, three-, five-, and ten-year periods reviewed by the Board. The Board found the investment management services provided by the Advisor to the Fund to be satisfactory and consistent with the management agreement.
Shareholder and Other Services. Under the management agreement, the Advisor provides the Fund with a comprehensive package of transfer agency, shareholder, and other services. The Board, directly and through its various committees, regularly reviews reports and evaluations of such services at its regular meetings. These reports include, but are not limited to, information
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regarding the operational efficiency and accuracy of the shareholder and transfer agency services provided, staffing levels, shareholder satisfaction, technology support (including cyber security), new products and services offered to Fund shareholders, securities trading activities, portfolio valuation services, auditing services, and legal and operational compliance activities. The Board found the services provided by the Advisor to the Fund under the management agreement to be competitive and of high quality.
COVID-19 Response. During 2020, much of the world experienced unprecedented change and challenges from the impacts of the rapidly evolving, worldwide spread of the COVID-19 virus. The Board evaluated the Advisor’s response to the COVID-19 pandemic and its impact on service to the Fund. The Board found that Fund shareholders have continued to receive the Advisor’s investment management and other services without disruption, and Advisor personnel have demonstrated great resiliency in providing those services. The Board, directly and through its Audit Committee, continues to monitor the impact of the pandemic and the response of each of the Fund’s service providers.
Costs of Services and Profitability. The Advisor provides detailed information concerning its cost of providing various services to the Fund, its profitability in managing the Fund (pre- and post-distribution), its overall profitability, and its financial condition. The Directors have reviewed with the Advisor the methodology used to prepare this financial information. This information is considered in evaluating the Advisor’s financial condition, its ability to continue to provide services under the management agreement, and the reasonableness of the current management fee. The Board concluded that the Advisor’s profits were reasonable in light of the services provided to the Fund.
Ethics. The Board generally considers the Advisor’s commitment to providing quality services to shareholders and to conducting its business ethically. They noted that the Advisor’s practices generally meet or exceed industry best practices.
Economies of Scale. The Board also reviewed information provided by the Advisor regarding the possible existence of economies of scale in connection with the management of the Fund. The Board concluded that economies of scale are difficult to measure and predict with precision, especially on a fund-by-fund basis. The Board concluded that the Advisor is appropriately sharing economies of scale, to the extent they exist, through its competitive fee structure, offering competitive fees from fund inception, and through reinvestment in its business, infrastructure, investment capabilities and initiatives to provide shareholders additional content and services. The Board also noted that economies of scale are shared with the Fund and its shareholders through management fee breakpoints that serve to reduce the effective management fee as the assets of the Fund grow.
Comparison to Other Funds’ Fees. The management agreement provides that the Fund pays the Advisor a single, all-inclusive (or unified) management fee for providing all services necessary for the management and operation of the Fund, other than brokerage expenses, expenses attributable to short sales, taxes, interest, extraordinary expenses, fees and expenses of the Fund’s independent Directors (including their independent legal counsel), and expenses incurred in connection with the provision of shareholder services and distribution services under a plan adopted pursuant to Rule 12b-1 under the Investment Company Act. 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 any applicable Rule 12b-1 distribution fees, all other components of the total fees charged by these other funds may be increased without shareholder approval. The Board believes the unified fee structure is a benefit to Fund shareholders because it clearly discloses to shareholders the cost of owning Fund shares, and, since 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
33
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 comparing the Fund’s unified fee to the total expense ratios of its peers. The unified fee charged to shareholders of the Fund was below the median of the total expense ratios of the Fund’s peer expense universe. The Board concluded that the management fee paid by the Fund to the Advisor under the management agreement is reasonable in light of the services provided to the Fund.
Comparison to Fees and Services Provided to Other Clients of the Advisor. The Board also requested and received information from the Advisor concerning the nature of the services, fees, costs, and profitability of its advisory services to advisory clients other than the Fund. They observed that these varying types of client accounts require different services and involve different regulatory and entrepreneurial risks than the management of the Fund. The Board analyzed this information and concluded that the fees charged and services provided to the Fund were reasonable by comparison.
Payments to Intermediaries. The Directors also requested and received a description of payments made to intermediaries by the Fund and the Advisor and services provided in response thereto. These payments include various payments made by the Fund or the Advisor to different types of intermediaries and recordkeepers for distribution and service activities provided for the Fund. The Directors reviewed such information and received representations from the Advisor that all such payments by the Fund were made pursuant to the Fund's Rule 12b-1 Plan and that all such payments by the Advisor were made from the Advisor’s resources and reasonable profits. The Board found such payments to be reasonable in scope and purpose.
Collateral or “Fall-Out” Benefits Derived by the Advisor. The Board considered the possible existence of collateral benefits the Advisor may receive as a result of its relationship with the Fund. They concluded that the Advisor’s primary business is managing mutual funds and it generally does not use fund or shareholder information to generate profits in other lines of business, and therefore does not derive any significant collateral benefits from them. To the extent there are potential collateral benefits, the board has been advised and has taken this into consideration in its review of the management contract with the Fund. The Board noted that additional assets from other clients may offer the Advisor some benefit from increased leverage with service providers and counterparties. Additionally, the Advisor may receive proprietary research from broker-dealers that execute fund portfolio transactions, which the Board concluded is likely to benefit other clients of the Advisor, as well as Fund shareholders. The Board also determined that the Advisor is able to provide investment management services to certain clients other than the Fund, at least in part, due to its existing infrastructure built to serve the fund complex. The Board concluded that appropriate allocation methodologies had been employed to assign resources and the cost of those resources to these other clients and, where expressly provided, these other client assets may be included with the assets of the Fund to determine breakpoints in the management fee schedule.
Existing Relationship. The Board also considered whether there was any reason for not continuing the existing arrangement with the Advisor. In this regard, the Board was mindful of the potential disruptions of the Fund’s operations and various risks, uncertainties, and other effects that could occur as a result of a decision not to continue such relationship. In particular, the Board recognized that most shareholders have invested in the Fund on the strength of the Advisor’s industry standing and reputation and in the expectation that the Advisor will have a continuing role in providing advisory services to the Fund.
Conclusion of the Directors. As a result of this process, the Board, including all of the independent Directors, taking into account all of the factors discussed above and the information provided by the Advisor and others in connection with its review and throughout the year, determined that the management fee is fair and reasonable in light of the services provided and that the investment management agreement between the Fund and the Advisor should be renewed.
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Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain retirement accounts are subject to federal income tax withholding, unless you elect not to have withholding apply*. Tax will be withheld on the total amount withdrawn even though you may be receiving amounts that are not subject to withholding, such as nondeductible contributions. In such case, excess amounts of withholding could occur. You may adjust your withholding election so that a greater or lesser amount will be withheld.
If you don’t want us to withhold on this amount, you must notify us to not withhold the federal income tax. You may notify us in writing or in certain situations by telephone or through other electronic means. For systematic withdrawals, your withholding election will remain in effect until revoked or changed by filing a new election. You have the right to revoke your election at any time and change your withholding percentage for future distributions.
Remember, even if you elect not to have income tax withheld, you are liable for paying income tax on the taxable portion of your withdrawal. If you elect not to have income tax withheld or you don’t have enough income tax withheld, you may be responsible for payment of estimated tax. You may incur penalties under the estimated tax rules if your withholding and estimated tax payments are not sufficient. You can reduce or defer the income tax on a distribution by directly or indirectly rolling such distribution over to another IRA or eligible plan. You should consult your tax advisor for additional information.
State tax will be withheld if, at the time of your distribution, your address is within one of the mandatory withholding states and you have federal income tax withheld (or as otherwise required by state law). State taxes will be withheld from your distribution in accordance with the respective state rules.
*Some 403(b), 457 and qualified retirement plan distributions may be subject to 20% mandatory withholding, as they are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
A description of the policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund is available without charge, upon request, by calling 1-800-345-2021. It is also available on American Century Investments’ website at americancentury.com/proxy 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 americancentury.com/proxy. 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 as an exhibit to its reports on
Form N-PORT. The fund’s Form N-PORT reports are available on the SEC’s website at sec.gov.
The fund also makes its complete schedule of portfolio holdings for the most recent quarter of its
fiscal year available on its website at americancentury.com and, upon request, by calling
1-800-345-2021.
35
Other Tax Information
The following information is provided pursuant to provisions of the Internal Revenue Code.
The fund hereby designates up to the maximum amount allowable as qualified dividend income for the fiscal year ended November 30, 2020.
The fund hereby designates $4,645,125, or up to the maximum amount allowable, as long-term capital gain distributions (20% rate gain distributions) for the fiscal year ended November 30, 2020.
For the fiscal year ended November 30, 2020, the fund intends to pass through to shareholders foreign source income of $17,944,033 and foreign taxes paid of $1,608,475, or up to the maximum amount allowable, as a foreign tax credit. Foreign source income and foreign tax expense per
outstanding share on November 30, 2020 are $0.1833 and $0.0164, respectively.
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Notes |
37
Notes |
38
Notes |
39
Notes |
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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. | ||||||||
©2021 American Century Proprietary Holdings, Inc. All rights reserved. CL-ANN-91027 2101 |
![image171.jpg](https://capedge.com/proxy/N-CSR/0000872825-21-000006/image171.jpg)
Annual Report | |||||
November 30, 2020 | |||||
International Opportunities Fund | |||||
Investor Class (AIOIX) | |||||
I Class (ACIOX) | |||||
A Class (AIVOX) | |||||
C Class (AIOCX) | |||||
R Class (AIORX) |
Table of Contents |
President’s Letter | |||||
Performance | |||||
Portfolio Commentary | |||||
Fund Characteristics | |||||
Shareholder Fee Example | |||||
Schedule of Investments | |||||
Statement of Assets and Liabilities | |||||
Statement of Operations | |||||
Statement of Changes in Net Assets | |||||
Notes to Financial Statements | |||||
Financial Highlights | |||||
Report of Independent Registered Public Accounting Firm | |||||
Management | |||||
Approval of Management Agreement | |||||
Additional Information |
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 |
![image141.jpg](https://capedge.com/proxy/N-CSR/0000872825-21-000006/image141.jpg)
Dear Investor:
Thank you for reviewing this annual report for the period ended November 30, 2020. Annual reports help convey important information about fund returns, including market factors that affected performance. For additional investment insights, please visit americancentury.com.
Stocks Recovered from Pandemic-Fueled Sell-Off
In late 2019, broad market sentiment was generally upbeat. Dovish central banks in developed markets, modest inflation, improving economic and corporate earnings data, and progress on U.S.-China trade policy helped boost global growth outlooks. Against this backdrop, riskier assets generally remained in favor.
However, beginning in late February, the COVID-19 outbreak rapidly spread worldwide, halting most economic activity and triggering a deep global recession. Global stocks sold off sharply amid a widespread flight to safety. Quick and aggressive action from the Federal Reserve and other central banks and federal governments helped stabilize and restore confidence in the financial markets. By summer, declining coronavirus infection and death rates in many regions and the reopening of economies were positive influences. By the end of November, most data suggested economies were recovering. But at the same time, COVID-19 infection rates were rising in the U.S. and Europe, prompting new lockdown measures that threatened the economic recovery.
Overall, global stocks overcame the effects of the early 2020 sell-off to deliver solid gains for the 12-month period. Emerging markets stocks rallied and outperformed developed markets stocks, while growth stocks significantly outpaced value stocks worldwide.
Science Helps Steer the Return to Normal
The return to pre-pandemic life will take time and patience, but we are confident we will get there. The first COVID-19 vaccine is now approved and in limited distribution, and medical professionals continue to develop better treatment protocols. Until the vaccine is widely available, investors likely will face periods of outbreak-related disruptions, economic uncertainty and heightened market volatility. These influences can be unsettling, but they tend to be temporary.
We appreciate your confidence in us during these extraordinary times. Our firm has a long history of helping clients weather unpredictable markets, and we’re confident we will continue to meet today’s challenges.
Sincerely,
![image231.jpg](https://capedge.com/proxy/N-CSR/0000872825-21-000006/image231.jpg)
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
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Performance |
Total Returns as of November 30, 2020 | |||||||||||||||||
Average Annual Returns | |||||||||||||||||
Ticker Symbol | 1 year | 5 years | 10 years | Inception Date | |||||||||||||
Investor Class | AIOIX | 28.52% | 10.96% | 9.97% | 6/1/01 | ||||||||||||
MSCI ACWI ex-U.S. Small Cap Growth Index | — | 21.09% | 9.49% | 7.20% | — | ||||||||||||
I Class | ACIOX | 28.84% | 11.17% | 10.17% | 1/9/03 | ||||||||||||
A Class | AIVOX | 3/1/10 | |||||||||||||||
No sales charge | 28.28% | 10.68% | 9.70% | ||||||||||||||
With sales charge | 20.95% | 9.38% | 9.06% | ||||||||||||||
C Class | AIOCX | 27.26% | 9.85% | 8.87% | 3/1/10 | ||||||||||||
R Class | AIORX | 27.96% | 10.40% | 9.41% | 3/1/10 |
Fund returns would have been lower if a portion of the fees had not been waived.
Sales charges include initial sales charges and contingent deferred sales charges (CDSCs), as applicable. A Class shares have a 5.75% maximum initial sales charge and may be subject to a maximum CDSC of 1.00%. C Class shares redeemed within 12 months of purchase are subject to a maximum CDSC of 1.00%. The SEC requires that mutual funds provide performance information net of maximum sales charges in all cases where charges could be applied.
Data presented reflect past performance. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance shown. Total returns for periods less than one year are not annualized. Investment return and principal value will fluctuate, and redemption value may be more or less than original cost. Data assumes reinvestment of dividends and capital gains, and none of the charts reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. To obtain performance data current to the most recent month end, please call 1-800-345-2021 or visit americancentury.com. For additional information about the fund, please consult the prospectus.
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Growth of $10,000 Over 10 Years | ||
$10,000 investment made November 30, 2010 | ||
Performance for other share classes will vary due to differences in fee structure. |
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Value on November 30, 2020 | |||||
Investor Class — $25,884 | |||||
MSCI ACWI ex-U.S. Small Cap Growth Index — $20,059 | |||||
Ending value of Investor Class would have been lower if a portion of the fees had not been waived.
Total Annual Fund Operating Expenses | ||||||||||||||
Investor Class | I Class | A Class | C Class | R Class | ||||||||||
1.43% | 1.23% | 1.68% | 2.43% | 1.93% |
The total annual fund operating expenses shown is as stated in the fund’s prospectus current as of the date of this report. The prospectus may vary from the expense ratio shown elsewhere in this report because it is based on a different time period, includes acquired fund fees and expenses, and, if applicable, does not include fee waivers or expense reimbursements.
Data presented reflect past performance. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance shown. Total returns for periods less than one year are not annualized. Investment return and principal value will fluctuate, and redemption value may be more or less than original cost. Data assumes reinvestment of dividends and capital gains, and none of the charts reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. To obtain performance data current to the most recent month end, please call 1-800-345-2021 or visit americancentury.com. For additional information about the fund, please consult the prospectus.
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Portfolio Commentary |
Portfolio Managers: Trevor Gurwich, Federico Laffan and Pratik Patel
Performance Summary
International Opportunities returned 28.52%* for the fiscal year ended November 30, 2020. By comparison, the MSCI ACWI ex-U.S. Small Cap Growth Index (the fund’s benchmark) returned 21.09%.
Non-U.S. small-cap stocks delivered strong positive performance for the 12-month period, despite heightened volatility. The period started out on a positive note, as healthy earnings and hopes for a U.S.-China trade deal pushed stocks higher in the fourth quarter of 2019. Stocks then suffered a sharp and rapid sell-off in the first quarter of 2020, as efforts to contain the COVID-19 pandemic led to economic disruptions and lockdown orders. Unprecedented monetary and fiscal stimulus stabilized asset markets and set the stage for a second-quarter market rebound, as many countries started to reopen their economies. Stock gains extended into the third quarter, aided by resilient economic growth and better-than-expected corporate earnings. Progress toward a COVID-19 vaccine helped stocks end the 12-month period on a strong note, even though a second wave of the virus led to new lockdowns, especially in Europe. Small-cap stocks outperformed large caps over the 12-month period, while growth stocks outperformed value. Stock selection, especially in information technology and consumer discretionary, lifted relative performance. The fund’s positioning in the energy sector and its stock selection in the real estate sector detracted from relative performance. From a geographic standpoint, stock selection in Japan contributed, while stock selection in Norway detracted.
Information Technology Holdings Supported Outperformance
Stock selection in information technology was a strong driver of relative performance, as a number of holdings benefited from secular changes that accelerated due to COVID-19. Sinch, a top sector contributor, provides cloud communications solutions that supported virtual connectivity during the pandemic. Sinch also expanded its business reach through its acquisitions of Wavy, a leading business messaging provider in Latin America, and ACL Mobile, a cloud services provider in India.
South Korea-based life sciences company Seegene, another prominent contributor, developed a time-efficient COVID-19 diagnostic test that was in high demand as the virus spread worldwide. Meal delivery services company HelloFresh was also a notable performer, as pandemic-related lockdown orders fueled demand for the delivered meal kits. In both cases, we exited our positions after a period of strong stock performance, and we used the proceeds to invest in other companies we believed offered more attractive risk/reward potential. Several China-based holdings were also strong contributors, notably A-Living Smart City Services. This property management services company benefited from an economic rebound as China emerged from its coronavirus lockdowns. It also reported strong fiscal year results and a positive outlook. We sold the stock after this period of outperformance, taking our profits.
Pandemic Economic Disruptions Pressured Several Investments
The pandemic created economic headwinds for other holdings. Residential homebuilder Bellway was a prominent detractor, as lockdowns disrupted construction activity in the U.K. The virus also delayed urban redevelopment projects in China, dampening revenue growth for China-based urban property developer Times China Holdings, another detractor. We exited both positions due to uncertain earnings outlooks.
*All fund returns referenced in this commentary are for Investor Class shares. Performance for other share classes will vary due to differences in fee structure; when Investor Class performance exceeds that of the fund’s benchmark, other share classes may not. See page 3 for returns for all share classes.
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WNS Holdings, another detractor, is a global provider of business process management services. It faced short-term uncertainty due to its exposure to leisure and hospitality, two industries hard hit by the pandemic. Our concerns about a potential decline in near-term billings led us to sell the position. We also liquidated our holdings in Indonesia-based Bank BTPN Syariah, a notable detractor that faced heightened economic uncertainty and credit risk due to the pandemic.
Outlook
We believe our portfolio is well positioned, supported by a broad array of stocks with strong company-specific drivers. We own names benefiting from secular changes created by COVID-19, as well as investments that may benefit from an economic recovery and a potential return to normal activity in 2021. Our search for companies with the potential for accelerating earnings led us to increase our weighting in industrials, a sector exposed to economic recovery. As a result, the sector ended the period as a large relative overweight.
Information technology and consumer discretionary remain prominent overweights. Information technology investments include a broad range of holdings in IT services, software and semiconductors. We have also found opportunities supported by growth in e-commerce, cloud computing, software as a service and 5G network build-out. We added to our weighting in consumer discretionary, launching investments in companies we believe are inflecting positively and have sustainable earnings growth potential. The fund is underweight in health care and real estate, sectors where we have found fewer compelling investments.
From a regional standpoint, our bottom-up stock selection has led to an overweight in Europe, although we lightened our regional exposure somewhat during the period. The fund is underweight in Asia, including Japan. It is slightly underweight in the emerging markets, but holds a modest overweight in China due to investment opportunities we have identified there.
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Fund Characteristics |
NOVEMBER 30, 2020 | |||||
Top Ten Holdings | % of net assets | ||||
China Yongda Automobiles Services Holdings Ltd. | 1.6% | ||||
Seven Group Holdings Ltd. | 1.5% | ||||
flatexDEGIRO AG | 1.5% | ||||
Metso Outotec Oyj | 1.5% | ||||
SOITEC | 1.4% | ||||
BHG Group AB | 1.3% | ||||
Samhallsbyggnadsbolaget i Norden AB | 1.3% | ||||
Kingsoft Cloud Holdings Ltd., ADR | 1.2% | ||||
Zeon Corp. | 1.2% | ||||
Kornit Digital Ltd. | 1.2% | ||||
Types of Investments in Portfolio | % of net assets | ||||
Common Stocks | 98.8% | ||||
Temporary Cash Investments | 1.1% | ||||
Temporary Cash Investments - Securities Lending Collateral | 0.9% | ||||
Other Assets and Liabilities | (0.8)% | ||||
Investments by Country | % of net assets | ||||
Japan | 17.1% | ||||
United Kingdom | 11.3% | ||||
Sweden | 9.4% | ||||
Canada | 8.4% | ||||
Taiwan | 7.2% | ||||
Australia | 5.5% | ||||
Germany | 4.7% | ||||
China | 4.5% | ||||
South Korea | 3.9% | ||||
Switzerland | 3.4% | ||||
Brazil | 3.3% | ||||
Netherlands | 3.1% | ||||
Israel | 2.8% | ||||
Denmark | 2.8% | ||||
Hong Kong | 2.5% | ||||
Finland | 2.4% | ||||
France | 2.2% | ||||
Other Countries | 4.3% | ||||
Cash and Equivalents* | 1.2% |
*Includes temporary cash investments, temporary cash investments - securities lending collateral and other assets and liabilities.
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Shareholder Fee Example |
Fund shareholders may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption/exchange fees; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in your fund and to compare these costs with the ongoing cost of investing in other mutual funds.
The example is based on an investment of $1,000 made at the beginning of the period and held for the entire period from June 1, 2020 to November 30, 2020.
Actual Expenses
The table provides information about actual account values and actual expenses for each class. You may use the information, together with the amount you invested, to estimate the expenses that you paid over the period. First, identify the share class you own. Then simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
If you hold Investor Class shares of any American Century Investments fund, or I Class shares of the American Century Diversified Bond Fund, in an American Century Investments account (i.e., not through a financial intermediary or employer-sponsored retirement plan account), American Century Investments may charge you a $25.00 annual 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 $25.00 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.
8
Beginning Account Value 6/1/20 | Ending Account Value 11/30/20 | Expenses Paid During Period(1) 6/1/20 - 11/30/20 | Annualized Expense Ratio(1) | |||||||||||
Actual | ||||||||||||||
Investor Class | $1,000 | $1,265.90 | $7.93 | 1.40% | ||||||||||
I Class | $1,000 | $1,266.70 | $6.80 | 1.20% | ||||||||||
A Class | $1,000 | $1,264.00 | $9.34 | 1.65% | ||||||||||
C Class | $1,000 | $1,258.20 | $13.55 | 2.40% | ||||||||||
R Class | $1,000 | $1,262.70 | $10.75 | 1.90% | ||||||||||
Hypothetical | ||||||||||||||
Investor Class | $1,000 | $1,018.00 | $7.06 | 1.40% | ||||||||||
I Class | $1,000 | $1,019.00 | $6.06 | 1.20% | ||||||||||
A Class | $1,000 | $1,016.75 | $8.32 | 1.65% | ||||||||||
C Class | $1,000 | $1,013.00 | $12.08 | 2.40% | ||||||||||
R Class | $1,000 | $1,015.50 | $9.57 | 1.90% |
(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. Annualized expense ratio reflects actual expenses, including any applicable fee waivers or expense reimbursements and excluding any acquired fund fees and expenses.
9
Schedule of Investments |
NOVEMBER 30, 2020
Shares | Value | |||||||
COMMON STOCKS — 98.8% | ||||||||
Australia — 5.5% | ||||||||
Breville Group Ltd. | 183,781 | $ | 3,252,277 | |||||
carsales.com Ltd. | 207,850 | 3,103,048 | ||||||
Gold Road Resources Ltd.(1) | 41,303 | 36,528 | ||||||
Kogan.com Ltd. | 371,882 | 4,483,108 | ||||||
NEXTDC Ltd.(1) | 941,499 | 7,784,357 | ||||||
Redbubble Ltd.(1) | 978,360 | 3,739,829 | ||||||
Seven Group Holdings Ltd.(2) | 631,321 | 10,207,468 | ||||||
Temple & Webster Group Ltd.(1)(2) | 542,830 | 3,925,689 | ||||||
36,532,304 | ||||||||
Belgium — 0.3% | ||||||||
Warehouses De Pauw, CVA | 68,185 | 2,315,354 | ||||||
Brazil — 3.3% | ||||||||
Duratex SA | 1,097,100 | 3,899,053 | ||||||
Locaweb Servicos de Internet SA(1) | 340,600 | 4,194,083 | ||||||
Pet Center Comercio e Participacoes SA(1) | 1,216,048 | 4,274,123 | ||||||
Randon SA Implementos e Participacoes, Preference Shares | 2,261,300 | 6,162,500 | ||||||
TOTVS SA | 651,600 | 3,332,557 | ||||||
21,862,316 | ||||||||
Canada — 8.4% | ||||||||
Alamos Gold, Inc., Class A, (New York) | 437,105 | 3,614,858 | ||||||
BRP, Inc. | 102,227 | 5,831,985 | ||||||
CAE, Inc. | 286,632 | 6,934,610 | ||||||
Canada Goose Holdings, Inc.(1) | 93,731 | 3,117,149 | ||||||
Descartes Systems Group, Inc. (The)(1) | 73,813 | 4,376,946 | ||||||
Element Fleet Management Corp. | 682,321 | 6,940,372 | ||||||
FirstService Corp. | 41,016 | 5,593,866 | ||||||
Innergex Renewable Energy, Inc. | 215,962 | 4,273,676 | ||||||
Kinaxis, Inc.(1) | 23,780 | 3,585,036 | ||||||
Nuvei Corp.(1) | 96,303 | 4,526,241 | ||||||
TFI International, Inc. | 150,270 | 7,625,158 | ||||||
56,419,897 | ||||||||
China — 4.5% | ||||||||
China Lesso Group Holdings Ltd. | 2,766,000 | 4,944,922 | ||||||
China Yongda Automobiles Services Holdings Ltd. | 6,312,000 | 10,806,223 | ||||||
GDS Holdings Ltd., ADR(1) | 36,774 | 3,310,763 | ||||||
Kingsoft Cloud Holdings Ltd., ADR(1)(2) | 204,258 | 8,217,299 | ||||||
Times Neighborhood Holdings Ltd. | 2,883,000 | 2,866,568 | ||||||
30,145,775 | ||||||||
Denmark — 2.8% | ||||||||
ALK-Abello A/S(1) | 18,198 | 6,451,475 | ||||||
Netcompany Group A/S(1) | 76,251 | 7,082,210 | ||||||
Royal Unibrew A/S | 49,572 | 5,192,098 | ||||||
18,725,783 | ||||||||
Finland — 2.4% | ||||||||
Huhtamaki Oyj | 125,323 | 6,289,959 | ||||||
Metso Outotec Oyj | 1,096,210 | 9,787,829 | ||||||
16,077,788 |
10
Shares | Value | |||||||
France — 2.2% | ||||||||
APERAM SA | 43,259 | $ | 1,647,044 | |||||
Elis SA(1) | 242,750 | 3,962,427 | ||||||
SOITEC(1) | 51,936 | 9,048,544 | ||||||
14,658,015 | ||||||||
Germany — 4.7% | ||||||||
CompuGroup Medical SE & Co. KgaA | 48,103 | 4,776,803 | ||||||
flatexDEGIRO AG(1) | 148,528 | 9,917,091 | ||||||
Gerresheimer AG | 45,056 | 5,246,446 | ||||||
Sixt SE(1) | 50,454 | 5,783,094 | ||||||
Stroeer SE & Co. KGaA | 62,352 | 5,582,648 | ||||||
31,306,082 | ||||||||
Hong Kong — 2.5% | ||||||||
Man Wah Holdings Ltd. | 3,706,000 | 6,839,443 | ||||||
Melco International Development Ltd. | 1,659,000 | 3,139,484 | ||||||
Minth Group Ltd. | 1,296,000 | 6,451,438 | ||||||
16,430,365 | ||||||||
Israel — 2.8% | ||||||||
Inmode Ltd.(1) | 147,075 | 6,335,991 | ||||||
Kornit Digital Ltd.(1) | 95,682 | 8,072,690 | ||||||
Nova Measuring Instruments Ltd.(1) | 68,292 | 4,407,566 | ||||||
18,816,247 | ||||||||
Japan — 17.1% | ||||||||
Anritsu Corp. | 276,400 | 6,313,460 | ||||||
BASE, Inc.(1) | 37,300 | 3,427,995 | ||||||
Cosmos Pharmaceutical Corp. | 13,200 | 2,276,941 | ||||||
en-japan, Inc. | 129,700 | 4,008,468 | ||||||
Harmonic Drive Systems, Inc. | 43,300 | 3,458,123 | ||||||
Hennge KK(1) | 37,200 | 2,505,292 | ||||||
IR Japan Holdings Ltd. | 27,500 | 4,394,021 | ||||||
Japan Steel Works Ltd. (The) | 214,600 | 5,201,028 | ||||||
JMDC, Inc.(1) | 87,900 | 4,468,630 | ||||||
Kakaku.com, Inc. | 154,600 | 4,319,545 | ||||||
Kobe Bussan Co. Ltd. | 121,600 | 4,244,879 | ||||||
Mabuchi Motor Co. Ltd. | 129,500 | 5,784,745 | ||||||
Menicon Co. Ltd. | 66,800 | 4,154,503 | ||||||
Mercari, Inc.(1) | 112,900 | 5,179,277 | ||||||
Nabtesco Corp. | 186,300 | 7,644,866 | ||||||
Nihon Kohden Corp. | 94,500 | 2,994,277 | ||||||
Nippon Gas Co. Ltd. | 151,700 | 7,632,956 | ||||||
Open House Co. Ltd. | 191,000 | 7,566,466 | ||||||
Rakus Co. Ltd. | 158,800 | 3,710,984 | ||||||
SHIFT, Inc.(1) | 42,800 | 6,355,388 | ||||||
SHO-BOND Holdings Co. Ltd. | 128,800 | 6,414,954 | ||||||
UT Group Co. Ltd.(1) | 140,400 | 4,431,965 | ||||||
Zeon Corp. | 655,000 | 8,106,996 | ||||||
114,595,759 | ||||||||
Netherlands — 3.1% | ||||||||
Alfen Beheer BV(1) | 55,784 | 4,530,339 | ||||||
ASM International NV | 34,630 | 6,097,473 | ||||||
Basic-Fit NV(1)(2) | 145,947 | 5,302,300 |
11
Shares | Value | |||||||
IMCD NV | 38,605 | $ | 4,824,307 | |||||
20,754,419 | ||||||||
Norway — 1.8% | ||||||||
Bakkafrost P/F(1) | 78,102 | 4,876,341 | ||||||
LINK Mobility Group Holding ASA(1) | 578,055 | 3,248,997 | ||||||
NEL ASA(1) | 1,547,856 | 4,257,105 | ||||||
12,382,443 | ||||||||
Panama — 0.7% | ||||||||
Copa Holdings SA, Class A | 57,669 | 4,596,219 | ||||||
Poland — 0.9% | ||||||||
Dino Polska SA(1) | 86,054 | 5,769,663 | ||||||
South Korea — 3.9% | ||||||||
Cosmax, Inc. | 17,682 | 1,525,929 | ||||||
Douzone Bizon Co. Ltd. | 34,261 | 3,276,748 | ||||||
Hugel, Inc.(1) | 33,565 | 5,969,289 | ||||||
Mando Corp. | 97,454 | 4,290,644 | ||||||
SK Materials Co. Ltd. | 30,066 | 7,068,408 | ||||||
Zinus, Inc. | 44,071 | 4,121,735 | ||||||
26,252,753 | ||||||||
Sweden — 9.4% | ||||||||
AddTech AB, B Shares | 496,996 | 6,247,009 | ||||||
BHG Group AB(1) | 473,193 | 8,671,613 | ||||||
Embracer Group AB(1) | 191,903 | 3,890,163 | ||||||
Lifco AB, B Shares | 67,294 | 5,496,596 | ||||||
Lindab International AB | 254,567 | 4,423,195 | ||||||
MIPS AB | 36,137 | 1,812,403 | ||||||
Nordic Entertainment Group AB, B Shares(1) | 93,364 | 4,643,400 | ||||||
Samhallsbyggnadsbolaget i Norden AB(2) | 2,503,795 | 8,494,447 | ||||||
Sinch AB(1) | 57,365 | 7,511,192 | ||||||
Stillfront Group AB(1) | 69,683 | 7,998,583 | ||||||
Trelleborg AB, B Shares(1) | 194,984 | 4,025,302 | ||||||
63,213,903 | ||||||||
Switzerland — 3.4% | ||||||||
Cembra Money Bank AG | 52,696 | 6,099,453 | ||||||
SIG Combibloc Group AG(1) | 302,360 | 6,956,409 | ||||||
Tecan Group AG | 8,106 | 3,556,412 | ||||||
Zur Rose Group AG(1) | 21,140 | 6,340,569 | ||||||
22,952,843 | ||||||||
Taiwan — 7.2% | ||||||||
Accton Technology Corp. | 753,000 | 6,325,386 | ||||||
Airtac International Group | 232,000 | 6,765,668 | ||||||
Alchip Technologies Ltd. | 261,000 | 6,131,330 | ||||||
ASPEED Technology, Inc. | 66,000 | 3,271,321 | ||||||
Chailease Holding Co. Ltd. | 1,125,297 | 6,166,617 | ||||||
Genius Electronic Optical Co. Ltd. | 250,000 | 5,596,956 | ||||||
LandMark Optoelectronics Corp. | 335,000 | 3,247,478 | ||||||
Merida Industry Co. Ltd. | 560,000 | 4,917,385 | ||||||
Nien Made Enterprise Co. Ltd. | 488,000 | 5,768,746 | ||||||
48,190,887 | ||||||||
Thailand — 0.6% | ||||||||
Sri Trang Gloves Thailand PCL | 1,514,500 | 3,808,413 |
12
Shares | Value | |||||||
United Kingdom — 11.3% | ||||||||
ASOS plc(1) | 97,016 | $ | 5,983,875 | |||||
boohoo Group plc(1) | 807,856 | 3,392,162 | ||||||
Electrocomponents plc | 729,685 | 7,849,854 | ||||||
Endava plc, ADR(1) | 107,700 | 6,762,483 | ||||||
Fevertree Drinks plc | 125,624 | 3,868,714 | ||||||
Future plc | 244,731 | 5,531,665 | ||||||
Games Workshop Group plc | 36,684 | 4,812,001 | ||||||
HomeServe plc | 281,932 | 3,918,691 | ||||||
Howden Joinery Group plc(1) | 544,844 | 4,569,451 | ||||||
Intermediate Capital Group plc | 346,968 | 7,544,446 | ||||||
IWG plc(1) | 904,603 | 3,880,672 | ||||||
JD Sports Fashion plc | 332,739 | 3,450,646 | ||||||
JET2 plc | 239,803 | 4,470,140 | ||||||
Weir Group plc (The)(1) | 314,416 | 6,995,914 | ||||||
WH Smith plc | 135,084 | 2,542,979 | ||||||
75,573,693 | ||||||||
TOTAL COMMON STOCKS (Cost $486,649,485) | 661,380,921 | |||||||
TEMPORARY CASH INVESTMENTS — 1.1% | ||||||||
Repurchase Agreement, BMO Capital Markets Corp., (collateralized by various U.S. Treasury obligations, 0.625% - 1.375%, 1/31/25 - 5/15/30, valued at $3,648,079), in a joint trading account at 0.06%, dated 11/30/20, due 12/1/20 (Delivery value $3,573,209) | 3,573,203 | |||||||
Repurchase Agreement, Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 0.625%, 5/15/30, valued at $4,097,406), at 0.07%, dated 11/30/20, due 12/1/20 (Delivery value $4,017,008) | 4,017,000 | |||||||
State Street Institutional U.S. Government Money Market Fund, Premier Class | 189 | 189 | ||||||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $7,590,392) | 7,590,392 | |||||||
TEMPORARY CASH INVESTMENTS - SECURITIES LENDING COLLATERAL(3) — 0.9% | ||||||||
State Street Navigator Securities Lending Government Money Market Portfolio (Cost $5,961,758) | 5,961,758 | 5,961,758 | ||||||
TOTAL INVESTMENT SECURITIES — 100.8% (Cost $500,201,635) | 674,933,071 | |||||||
OTHER ASSETS AND LIABILITIES — (0.8)% | (5,371,375) | |||||||
TOTAL NET ASSETS — 100.0% | $ | 669,561,696 |
13
MARKET SECTOR DIVERSIFICATION | |||||
(as a % of net assets) | |||||
Industrials | 27.0 | % | |||
Information Technology | 20.1 | % | |||
Consumer Discretionary | 17.5 | % | |||
Health Care | 7.1 | % | |||
Materials | 5.6 | % | |||
Financials | 5.4 | % | |||
Communication Services | 5.2 | % | |||
Consumer Staples | 5.1 | % | |||
Real Estate | 4.1 | % | |||
Utilities | 1.7 | % | |||
Cash and Equivalents* | 1.2 | % |
*Includes temporary cash investments, temporary cash investments - securities lending collateral and other assets and liabilities.
NOTES TO SCHEDULE OF INVESTMENTS | ||||||||
ADR | - | American Depositary Receipt | ||||||
CVA | - | Certificaten Van Aandelen |
(1)Non-income producing.
(2)Security, or a portion thereof, is on loan. At the period end, the aggregate value of securities on loan was $23,787,391. The amount of securities on loan indicated may not correspond with the securities on loan identified because securities with pending sales are in the process of recall from the brokers.
(3)Investment of cash collateral from securities on loan. At the period end, the aggregate value of the collateral held by the fund was $25,205,791, which includes securities collateral of $19,244,033.
See Notes to Financial Statements.
14
Statement of Assets and Liabilities |
NOVEMBER 30, 2020 | |||||
Assets | |||||
Investment securities, at value (cost of $494,239,877) — including $23,787,391 of securities on loan | $ | 668,971,313 | |||
Investment made with cash collateral received for securities on loan, at value (cost of $5,961,758) | 5,961,758 | ||||
Total investment securities, at value (cost of $500,201,635) | 674,933,071 | ||||
Receivable for investments sold | 2,763,090 | ||||
Receivable for capital shares sold | 243,016 | ||||
Dividends and interest receivable | 1,425,356 | ||||
Securities lending receivable | 75,006 | ||||
Other assets | 150,887 | ||||
679,590,426 | |||||
Liabilities | |||||
Payable for collateral received for securities on loan | 5,961,758 | ||||
Payable for investments purchased | 1,613,038 | ||||
Payable for capital shares redeemed | 1,692,172 | ||||
Accrued management fees | 711,279 | ||||
Distribution and service fees payable | 2,783 | ||||
Accrued other expenses | 47,700 | ||||
10,028,730 | |||||
Net Assets | $ | 669,561,696 | |||
Net Assets Consist of: | |||||
Capital (par value and paid-in surplus) | $ | 484,375,669 | |||
Distributable earnings | 185,186,027 | ||||
$ | 669,561,696 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | |||||||||
Investor Class, $0.01 Par Value | $565,150,473 | 43,640,868 | $12.95 | ||||||||
I Class, $0.01 Par Value | $94,818,449 | 7,235,466 | $13.10 | ||||||||
A Class, $0.01 Par Value | $7,213,676 | 562,424 | $12.83* | ||||||||
C Class, $0.01 Par Value | $980,780 | 80,177 | $12.23 | ||||||||
R Class, $0.01 Par Value | $1,398,318 | 110,217 | $12.69 |
*Maximum offering price $13.61 (net asset value divided by 0.9425).
See Notes to Financial Statements.
15
Statement of Operations |
YEAR ENDED NOVEMBER 30, 2020 | |||||
Investment Income (Loss) | |||||
Income: | |||||
Dividends (net of foreign taxes withheld of $568,194) | $ | 6,672,508 | |||
Securities lending, net | 681,410 | ||||
Interest | 19,918 | ||||
7,373,836 | |||||
Expenses: | |||||
Management fees | 7,828,508 | ||||
Distribution and service fees: | |||||
A Class | 14,901 | ||||
C Class | 9,999 | ||||
R Class | 6,993 | ||||
Directors' fees and expenses | 18,182 | ||||
Other expenses | 74,862 | ||||
7,953,445 | |||||
Net investment income (loss) | (579,609) | ||||
Realized and Unrealized Gain (Loss) | |||||
Net realized gain (loss) on: | |||||
Investment transactions | 64,372,749 | ||||
Foreign currency translation transactions | (449,341) | ||||
63,923,408 | |||||
Change in net unrealized appreciation (depreciation) on: | |||||
Investments | 83,118,939 | ||||
Translation of assets and liabilities in foreign currencies | 59,040 | ||||
83,177,979 | |||||
Net realized and unrealized gain (loss) | 147,101,387 | ||||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 146,521,778 |
See Notes to Financial Statements.
16
Statement of Changes in Net Assets |
YEARS ENDED NOVEMBER 30, 2020 AND NOVEMBER 30, 2019 | ||||||||
Increase (Decrease) in Net Assets | November 30, 2020 | November 30, 2019 | ||||||
Operations | ||||||||
Net investment income (loss) | $ | (579,609) | $ | 1,280,885 | ||||
Net realized gain (loss) | 63,923,408 | (21,239,172) | ||||||
Change in net unrealized appreciation (depreciation) | 83,177,979 | 73,447,110 | ||||||
Net increase (decrease) in net assets resulting from operations | 146,521,778 | 53,488,823 | ||||||
Distributions to Shareholders | ||||||||
From earnings: | ||||||||
Investor Class | (4,749,297) | (4,040,078) | ||||||
I Class | (906,124) | (1,741,335) | ||||||
A Class | (42,373) | (235,473) | ||||||
C Class | — | (37,726) | ||||||
R Class | (8,828) | (37,055) | ||||||
Decrease in net assets from distributions | (5,706,622) | (6,091,667) | ||||||
Capital Share Transactions | ||||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | (58,197,577) | 344,439,095 | ||||||
Net increase (decrease) in net assets | 82,617,579 | 391,836,251 | ||||||
Net Assets | ||||||||
Beginning of period | 586,944,117 | 195,107,866 | ||||||
End of period | $ | 669,561,696 | $ | 586,944,117 |
See Notes to Financial Statements.
17
Notes to Financial Statements |
NOVEMBER 30, 2020
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, I Class, A Class, C Class and R Class. The A Class may incur an initial sales charge. The A Class and C Class may be subject to a contingent deferred sales charge.
2. Significant Accounting Policies
The following is a summary of significant accounting policies consistently followed by the fund in preparation of its financial statements. The fund is an investment company and follows accounting and reporting guidance in accordance with accounting principles generally accepted in the United States of America. This may require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from these estimates. Management evaluated the impact of events or transactions occurring through the date the financial statements were issued that would merit recognition or disclosure.
Investment Valuations — The fund determines the fair value of its investments and computes its net asset value (NAV) 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 NAV 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.
18
The fund monitors for significant events occurring after the close of an investment’s primary exchange but before the fund’s NAV 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. 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. Securities lending income is net of fees and rebates earned by the lending agent for its services.
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.
Segregated Assets — In accordance with the 1940 Act, the fund segregates assets on its books and records to cover certain types of investment securities and other financial instruments. ACIM monitors, on a daily basis, the securities segregated to ensure the fund designates a sufficient amount of liquid assets, marked-to-market daily. The fund may also receive assets or be required to pledge assets at the custodian bank or with a broker for collateral requirements.
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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 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.
Securities Lending — Securities are lent to qualified financial institutions and brokers. State Street Bank & Trust Co. serves as securities lending agent to the fund pursuant to a Securities Lending Agreement. The lending of securities exposes the fund to risks such as: the borrowers may fail to return the loaned securities, the borrowers may not be able to provide additional collateral, the fund may experience delays in recovery of the loaned securities or delays in access to collateral, or the fund may experience losses related to the investment collateral. To minimize certain risks, loan counterparties pledge collateral in the form of cash and/or securities. The lending agent has agreed to indemnify the fund in the case of default of any securities borrowed. Cash collateral received is invested in the State Street Navigator Securities Lending Government Money Market Portfolio, a money market mutual fund registered under the 1940 Act. The loans may also be secured by U.S. government securities in an amount at least equal to the market value of the securities loaned, plus accrued interest and dividends, determined on a daily basis and adjusted accordingly. By lending securities, the fund seeks to increase its net investment income through the receipt of interest and fees. Such income is reflected separately within the Statement of Operations. The value of loaned securities and related collateral outstanding at period end, if any, are shown on a gross basis within the Schedule of Investments and Statement of Assets and Liabilities.
The following table reflects a breakdown of transactions accounted for as secured borrowings, the gross obligation by the type of collateral pledged, and the remaining contractual maturity of those transactions as of November 30, 2020.
Remaining Contractual Maturity of Agreements | |||||||||||||||||
Overnight and Continuous | <30 days | Between 30 & 90 days | >90 days | Total | |||||||||||||
Securities Lending Transactions(1) | |||||||||||||||||
Common Stocks | $ | 5,961,758 | — | — | — | $ | 5,961,758 | ||||||||||
Gross amount of recognized liabilities for securities lending transactions | $ | 5,961,758 |
(1)Amount represents the payable for cash collateral received for securities on loan. This will generally be in the Overnight and Continuous column as the securities are typically callable on demand.
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.
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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 ACIM will pay all expenses of managing and operating the fund, except brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), extraordinary expenses, and expenses incurred in connection with the provision of shareholder services and distribution services under a plan adopted pursuant to Rule 12b-1 under the 1940 Act. The fee is computed and accrued daily based on each class's daily net assets and paid monthly in arrears. The difference in the fee among the classes is a result of their separate arrangements for non-Rule 12b-1 shareholder services. It is not the result of any difference in advisory or custodial fees or other expenses related to the management of the fund’s assets, which do not vary by class. The rate of the fee is determined by applying a fee rate calculation formula. This formula takes into account the fund’s assets as well as certain assets, if any, of other clients of the investment advisor outside the American Century Investments family of funds (such as subadvised funds and separate accounts) that use very similar investment teams and strategies (strategy assets).
The management fee schedule range and the effective annual management fee for each class for the period ended November 30, 2020 are as follows:
Management Fee Schedule Range | Effective Annual Management Fee | |||||||
Investor Class | 1.200% to 1.550% | 1.38% | ||||||
I Class | 1.000% to 1.350% | 1.18% | ||||||
A Class | 1.200% to 1.550% | 1.38% | ||||||
C Class | 1.200% to 1.550% | 1.38% | ||||||
R Class | 1.200% to 1.550% | 1.38% |
Distribution and Service Fees — The Board of Directors has adopted a separate Master Distribution and Individual Shareholder Services Plan for each of the A Class, C Class and R Class (collectively the plans), pursuant to Rule 12b-1 of the 1940 Act. The plans provide that the A Class will pay ACIS an annual distribution and service fee of 0.25%. The plans provide that the C Class will pay ACIS an annual distribution and service fee of 1.00%, of which 0.25% is paid for individual shareholder services and 0.75% is paid for distribution services. The plans provide that the R Class will pay ACIS an annual distribution and service fee of 0.50%. The fees are computed and accrued daily based on each class’s daily net assets and paid monthly in arrears. The fees are used to pay financial intermediaries for distribution and individual shareholder services. Fees incurred under the plans during the period ended November 30, 2020 are detailed in the Statement of Operations.
Directors' Fees and Expenses — The Board of Directors is responsible for overseeing the investment advisor’s management and operations of the fund. The directors receive detailed information about the fund and its investment advisor regularly throughout the year, and meet at least quarterly with management of the investment advisor to review reports about fund operations. The fund’s officers do not receive compensation from the fund.
Interfund Transactions — The fund may enter into security transactions with other American Century Investments funds and other client accounts of the investment advisor, in accordance with the 1940 Act rules and procedures adopted by the Board of Directors. The rules and procedures require, among other things, that these transactions be effected at the independent current market price of the security. During the period, the interfund purchases were $1,439,950 and there were no interfund sales.
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the period ended November 30, 2020 were $750,660,838 and $820,441,860, respectively.
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5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Year ended November 30, 2020 | Year ended November 30, 2019 | |||||||||||||
Shares | Amount | Shares | Amount | |||||||||||
Investor Class/Shares Authorized | 670,000,000 | 670,000,000 | ||||||||||||
Sold | 2,429,434 | $ | 26,155,762 | 1,797,671 | $ | 16,830,632 | ||||||||
Issued in connection with reorganization (Note 9) | — | — | 40,955,922 | 383,355,227 | ||||||||||
Issued in reinvestment of distributions | 424,410 | 4,426,599 | 451,144 | 3,798,635 | ||||||||||
Redeemed | (8,317,924) | (84,020,321) | (8,147,671) | (76,163,088) | ||||||||||
(5,464,080) | (53,437,960) | 35,057,066 | 327,821,406 | |||||||||||
I Class/Shares Authorized | 95,000,000 | 95,000,000 | ||||||||||||
Sold | 2,092,097 | 23,001,037 | 5,139,468 | 48,841,767 | ||||||||||
Issued in connection with reorganization (Note 9) | — | — | 421,079 | 3,982,794 | ||||||||||
Issued in reinvestment of distributions | 83,972 | 885,061 | 199,378 | 1,694,714 | ||||||||||
Redeemed | (2,578,345) | (27,119,055) | (3,762,721) | (35,422,411) | ||||||||||
(402,276) | (3,232,957) | 1,997,204 | 19,096,864 | |||||||||||
A Class/Shares Authorized | 40,000,000 | 40,000,000 | ||||||||||||
Sold | 106,306 | 1,177,267 | 158,713 | 1,467,674 | ||||||||||
Issued in connection with reorganization (Note 9) | — | — | 177,679 | 1,649,159 | ||||||||||
Issued in reinvestment of distributions | 4,036 | 41,817 | 27,875 | 233,036 | ||||||||||
Redeemed | (150,485) | (1,530,563) | (641,483) | (5,872,162) | ||||||||||
(40,143) | (311,479) | (277,216) | (2,522,293) | |||||||||||
C Class/Shares Authorized | 30,000,000 | 30,000,000 | ||||||||||||
Sold | 11,523 | 126,662 | 3,889 | 34,345 | ||||||||||
Issued in connection with reorganization (Note 9) | — | — | 51,598 | 459,815 | ||||||||||
Issued in reinvestment of distributions | — | — | 4,318 | 34,674 | ||||||||||
Redeemed | (39,923) | (427,777) | (110,458) | (984,176) | ||||||||||
(28,400) | (301,115) | (50,653) | (455,342) | |||||||||||
R Class/Shares Authorized | 30,000,000 | 30,000,000 | ||||||||||||
Sold | 51,608 | 543,660 | 70,350 | 647,214 | ||||||||||
Issued in connection with reorganization (Note 9) | — | — | 15,327 | 140,954 | ||||||||||
Issued in reinvestment of distributions | 859 | 8,819 | 4,470 | 37,055 | ||||||||||
Redeemed | (139,258) | (1,466,545) | (35,273) | (326,763) | ||||||||||
(86,791) | (914,066) | 54,874 | 498,460 | |||||||||||
Net increase (decrease) | (6,021,690) | $ | (58,197,577) | 36,781,275 | $ | 344,439,095 |
6. Fair Value Measurements
The fund’s investments valuation process is based on several considerations and may use multiple inputs to determine the fair value of the investments held by the fund. In conformity with accounting principles generally accepted in the United States of America, the inputs used to determine a valuation are classified into three broad levels.
•Level 1 valuation inputs consist of unadjusted quoted prices in an active market for identical investments.
•Level 2 valuation inputs consist of direct or indirect observable market data (including quoted prices for comparable investments, evaluations of subsequent market events, interest rates, prepayment speeds, credit risk, etc.). These inputs also consist of quoted prices for identical investments initially expressed in local currencies that are adjusted through translation into U.S. dollars.
•Level 3 valuation inputs consist of unobservable data (including a fund’s own assumptions).
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The level classification is based on the lowest level input that is significant to the fair valuation measurement. The valuation inputs are not necessarily an indication of the risks associated with investing in these securities or other financial instruments.
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 | $ | 3,614,858 | $ | 52,805,039 | — | ||||||
China | 11,528,062 | 18,617,713 | — | ||||||||
Israel | 18,816,247 | — | — | ||||||||
Panama | 4,596,219 | — | — | ||||||||
United Kingdom | 6,762,483 | 68,811,210 | — | ||||||||
Other Countries | — | 475,829,090 | — | ||||||||
Temporary Cash Investments | 189 | 7,590,203 | — | ||||||||
Temporary Cash Investments - Securities Lending Collateral | 5,961,758 | — | — | ||||||||
$ | 51,279,816 | $ | 623,653,255 | — |
7. Risk Factors
The value of the fund’s shares will go up and down, sometimes rapidly or unpredictably, based on the performance of the securities owned by the fund and other factors generally affecting the securities market. Market risks, including political, regulatory, economic and social developments, can affect the value of the fund’s investments. Natural disasters, public health emergencies, terrorism and other unforeseeable events may lead to increased market volatility and may have adverse long-term effects on world economies and markets generally.
There are certain risks involved in investing in foreign securities. These risks include those resulting from political events (such as civil unrest, national elections and imposition of exchange controls), social and economic events (such as labor strikes and rising inflation), and natural disasters. Securities of foreign issuers may be less liquid and more volatile. Investing in emerging markets or a significant portion of assets in one country or region 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
On December 22, 2020, the fund declared and paid a per-share distribution from net realized gains to shareholders of record on December 21, 2020 of $0.4285 for the Investor Class, I Class, A Class, C Class and R Class.
The tax character of distributions paid during the years ended November 30, 2020 and November 30, 2019 were as follows:
2020 | 2019 | |||||||
Distributions Paid From | ||||||||
Ordinary income | $ | 5,367,829 | $ | 1,154,494 | ||||
Long-term capital gains | $ | 338,793 | $ | 4,937,173 |
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The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
As of period end, the federal tax cost of investments and the components of distributable earnings on a tax-basis were as follows:
Federal tax cost of investments | $ | 511,103,146 | |||
Gross tax appreciation of investments | $ | 168,527,130 | |||
Gross tax depreciation of investments | (4,697,205) | ||||
Net tax appreciation (depreciation) of investments | 163,829,925 | ||||
Net tax appreciation (depreciation) on translation of assets and liabilities in foreign currencies | (47,665) | ||||
Net tax appreciation (depreciation) | $ | 163,782,260 | |||
Undistributed ordinary income | — | ||||
Accumulated long-term gains | $ | 21,904,938 | |||
Late-year ordinary loss deferral | $ | (501,171) |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales.
Loss deferrals 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.
9. Reorganization
On December 4, 2018, the Board of Directors approved an agreement and plan of reorganization (the reorganization), whereby the net assets of International Discovery Fund, one fund in a series issued by the corporation, were transferred to International Opportunities Fund in exchange for shares of International Opportunities Fund. The purpose of the transaction was to combine two funds with substantially similar investment objectives and strategies. The financial statements and performance history of International Opportunities Fund survived after the reorganization. The reorganization was effective at the close of the NYSE on March 22, 2019.
The reorganization was accomplished by a tax-free exchange of shares. On March 22, 2019, International Discovery Fund exchanged its shares for shares of International Opportunities Fund as follows:
Original Fund/Class | Shares Exchanged | New Fund/Class | Shares Received | ||||||||
International Discovery Fund – Investor Class | 28,522,874 | International Opportunities Fund – Investor Class | 40,955,922 | ||||||||
International Discovery Fund – I Class | 292,253 | International Opportunities Fund – I Class | 421,079 | ||||||||
International Discovery Fund – A Class | 126,350 | International Opportunities Fund – A Class | 177,679 | ||||||||
International Discovery Fund – C Class | 36,343 | International Opportunities Fund – C Class | 51,598 | ||||||||
International Discovery Fund – R Class | 10,698 | International Opportunities Fund – R Class | 15,327 |
The net assets of International Discovery Fund and International Opportunities Fund immediately before the reorganization were $389,587,949 and $193,535,172, respectively. International Discovery Fund's unrealized appreciation of $8,083,173 was combined with that of International Opportunities Fund. Immediately after the reorganization, the combined net assets were $583,123,121.
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Assuming the reorganization had been completed on December 1, 2018, the beginning of the annual reporting period, the pro forma results of operations for the period ended November 30, 2019 are as follows:
Net investment income (loss) | $ | 234,506 | |||
Net realized and unrealized gain (loss) | 73,557,788 | ||||
Net increase (decrease) in net assets resulting from operations | $ | 73,792,294 |
Because the combined investment portfolios have been managed as a single integrated portfolio since the reorganization was completed, it is not practicable to separate the amounts of revenue and earnings of International Discovery Fund that have been included in the fund’s Statement of Operations since March 22, 2019.
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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 | |||||||||||||||||||||||||||||||||||||||||||||||
2020 | $10.17 | (0.01) | 2.89 | 2.88 | (0.10) | — | (0.10) | $12.95 | 28.52% | 1.40% | 1.40% | (0.12)% | (0.12)% | 131% | $565,150 | ||||||||||||||||||||||||||||||||
2019 | $9.33 | 0.01 | 1.13 | 1.14 | (0.05) | (0.25) | (0.30) | $10.17 | 12.88% | 1.46% | 1.46% | 0.23% | 0.23% | 124% | $499,296 | ||||||||||||||||||||||||||||||||
2018 | $11.94 | 0.01 | (1.51) | (1.50) | (0.06) | (1.05) | (1.11) | $9.33 | (13.98)% | 1.48% | 1.62% | 0.07% | (0.07)% | 140% | $131,043 | ||||||||||||||||||||||||||||||||
2017 | $8.49 | (0.01) | 3.46 | 3.45 | —(3) | — | —(3) | $11.94 | 40.69% | 1.53% | 1.73% | (0.11)% | (0.31)% | 124% | $163,540 | ||||||||||||||||||||||||||||||||
2016 | $9.08 | (0.01) | (0.36) | (0.37) | (0.08) | (0.14) | (0.22) | $8.49 | (4.14)% | 1.54% | 1.74% | (0.07)% | (0.27)% | 130% | $108,184 | ||||||||||||||||||||||||||||||||
I Class | |||||||||||||||||||||||||||||||||||||||||||||||
2020 | $10.29 | 0.01 | 2.92 | 2.93 | (0.12) | — | (0.12) | $13.10 | 28.84% | 1.20% | 1.20% | 0.08% | 0.08% | 131% | $94,818 | ||||||||||||||||||||||||||||||||
2019 | $9.44 | 0.03 | 1.14 | 1.17 | (0.07) | (0.25) | (0.32) | $10.29 | 13.06% | 1.26% | 1.26% | 0.43% | 0.43% | 124% | $78,575 | ||||||||||||||||||||||||||||||||
2018 | $12.07 | 0.04 | (1.54) | (1.50) | (0.08) | (1.05) | (1.13) | $9.44 | (13.81)% | 1.28% | 1.42% | 0.27% | 0.13% | 140% | $53,224 | ||||||||||||||||||||||||||||||||
2017 | $8.58 | 0.02 | 3.49 | 3.51 | (0.02) | — | (0.02) | $12.07 | 41.01% | 1.33% | 1.53% | 0.09% | (0.11)% | 124% | $10,529 | ||||||||||||||||||||||||||||||||
2016 | $9.18 | 0.01 | (0.38) | (0.37) | (0.09) | (0.14) | (0.23) | $8.58 | (4.05)% | 1.34% | 1.54% | 0.13% | (0.07)% | 130% | $6,674 |
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 | |||||||||||||||||||||||||||||||||||||||||||||||
2020 | $10.07 | (0.04) | 2.87 | 2.83 | (0.07) | — | (0.07) | $12.83 | 28.28% | 1.65% | 1.65% | (0.37)% | (0.37)% | 131% | $7,214 | ||||||||||||||||||||||||||||||||
2019 | $9.24 | (0.02) | 1.13 | 1.11 | (0.03) | (0.25) | (0.28) | $10.07 | 12.60% | 1.71% | 1.71% | (0.02)% | (0.02)% | 124% | $6,067 | ||||||||||||||||||||||||||||||||
2018 | $11.84 | (0.02) | (1.50) | (1.52) | (0.03) | (1.05) | (1.08) | $9.24 | (14.25)% | 1.73% | 1.87% | (0.18)% | (0.32)% | 140% | $8,131 | ||||||||||||||||||||||||||||||||
2017 | $8.43 | (0.03) | 3.44 | 3.41 | — | — | — | $11.84 | 40.45% | 1.78% | 1.98% | (0.36)% | (0.56)% | 124% | $12,855 | ||||||||||||||||||||||||||||||||
2016 | $9.03 | (0.03) | (0.37) | (0.40) | (0.06) | (0.14) | (0.20) | $8.43 | (4.47)% | 1.79% | 1.99% | (0.32)% | (0.52)% | 130% | $14,156 | ||||||||||||||||||||||||||||||||
C Class | |||||||||||||||||||||||||||||||||||||||||||||||
2020 | $9.61 | (0.11) | 2.73 | 2.62 | — | — | — | $12.23 | 27.26% | 2.40% | 2.40% | (1.12)% | (1.12)% | 131% | $981 | ||||||||||||||||||||||||||||||||
2019 | $8.86 | (0.07) | 1.07 | 1.00 | — | (0.25) | (0.25) | $9.61 | 11.77% | 2.46% | 2.46% | (0.77)% | (0.77)% | 124% | $1,044 | ||||||||||||||||||||||||||||||||
2018 | $11.44 | (0.10) | (1.43) | (1.53) | — | (1.05) | (1.05) | $8.86 | (14.93)% | 2.48% | 2.62% | (0.93)% | (1.07)% | 140% | $1,411 | ||||||||||||||||||||||||||||||||
2017 | $8.21 | (0.11) | 3.34 | 3.23 | — | — | — | $11.44 | 39.46% | 2.53% | 2.73% | (1.11)% | (1.31)% | 124% | $2,453 | ||||||||||||||||||||||||||||||||
2016 | $8.81 | (0.09) | (0.36) | (0.45) | (0.01) | (0.14) | (0.15) | $8.21 | (5.17)% | 2.54% | 2.74% | (1.07)% | (1.27)% | 130% | $1,579 | ||||||||||||||||||||||||||||||||
R Class | |||||||||||||||||||||||||||||||||||||||||||||||
2020 | $9.96 | (0.07) | 2.84 | 2.77 | (0.04) | — | (0.04) | $12.69 | 27.96% | 1.90% | 1.90% | (0.62)% | (0.62)% | 131% | $1,398 | ||||||||||||||||||||||||||||||||
2019 | $9.14 | (0.04) | 1.12 | 1.08 | (0.01) | (0.25) | (0.26) | $9.96 | 12.33% | 1.96% | 1.96% | (0.27)% | (0.27)% | 124% | $1,962 | ||||||||||||||||||||||||||||||||
2018 | $11.72 | (0.05) | (1.48) | (1.53) | —(3) | (1.05) | (1.05) | $9.14 | (14.46)% | 1.98% | 2.12% | (0.43)% | (0.57)% | 140% | $1,300 | ||||||||||||||||||||||||||||||||
2017 | $8.37 | (0.06) | 3.41 | 3.35 | — | — | — | $11.72 | 40.02% | 2.03% | 2.23% | (0.61)% | (0.81)% | 124% | $939 | ||||||||||||||||||||||||||||||||
2016 | $8.97 | (0.05) | (0.37) | (0.42) | (0.04) | (0.14) | (0.18) | $8.37 | (4.69)% | 2.04% | 2.24% | (0.57)% | (0.77)% | 130% | $658 |
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) Per-share amount was less than $0.005.
See Notes to Financial Statements.
Report of Independent Registered Public Accounting Firm |
To the Shareholders and the Board of Directors of American Century World Mutual Funds, Inc.:
Opinion on the Financial Statements and Financial Highlights
We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of International Opportunities Fund (the “Fund”), one of the funds constituting the American Century World Mutual Funds, Inc., as of November 30, 2020, the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of International Opportunities Fund of the American Century World Mutual Funds, Inc. as of November 30, 2020, and the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on the Fund’s financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. Our procedures included confirmation of securities owned as of November 30, 2020, by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
DELOITTE & TOUCHE LLP
Kansas City, Missouri
January 19, 2021
We have served as the auditor of one or more American Century investment companies since 1997.
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Management |
The Board of Directors
The individuals listed below serve as directors of the funds. Each director will continue to serve in this capacity until death, retirement, resignation or removal from office. The board has adopted a mandatory retirement age for directors who are not “interested persons,” as that term is defined in the Investment Company Act (independent directors). Independent directors shall retire by December 31 of the year in which they reach their 75th birthday.
Mr. Thomas is an “interested person” because he currently serves as President and Chief Executive Officer of American Century Companies, Inc. (ACC), the parent company of American Century Investment Management, Inc. (ACIM or the advisor). The other directors (more than three-fourths of the total number) are independent. They are not employees, directors or officers of, and have no financial interest in, ACC or any of its wholly owned, direct or indirect, subsidiaries, including ACIM, American Century Investment Services, Inc. (ACIS) and American Century Services, LLC (ACS), and they do not have any other affiliations, positions or relationships that would cause them to be considered “interested persons” under the Investment Company Act. The directors serve in this capacity for seven (in the case of Jonathan S. Thomas, 16; and Stephen E. Yates, 8) registered investment companies in the American Century Investments family of funds.
The following table presents additional information about the directors. The mailing address for each director is 4500 Main Street, Kansas City, Missouri 64111.
Name (Year of Birth) | Position(s) Held with Funds | Length of Time Served | Principal Occupation(s) During Past 5 Years | Number of American Century Portfolios Overseen by Director | Other Directorships Held During Past 5 Years | ||||||||||||
Independent Directors | |||||||||||||||||
Thomas W. Bunn (1953) | Director | Since 2017 | Retired | 62 | SquareTwo Financial; Barings (formerly Babson Capital Funds Trust) (2013 to 2016) | ||||||||||||
Chris H. Cheesman (1962) | Director | Since 2019 | Retired. Senior Vice President & Chief Audit Executive, AllianceBernstein (1999 to 2018) | 62 | None | ||||||||||||
Barry Fink (1955) | Director | Since 2012 (independent since 2016) | Retired | 62 | None | ||||||||||||
Rajesh K. Gupta (1960) | Director | Since 2019 | Partner Emeritus, SeaCrest Investment Management and SeaCrest Wealth Management (2019 to Present); Chief Executive Officer and Chief Investment Officer, SeaCrest Investment Management (2006 to 2019); Chief Executive Officer and Chief Investment Officer, SeaCrest Wealth Management (2008 to 2019) | 62 | None |
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Name (Year of Birth) | Position(s) Held with Funds | Length of Time Served | Principal Occupation(s) During Past 5 Years | Number of American Century Portfolios Overseen by Director | Other Directorships Held During Past 5 Years | ||||||||||||
Independent Directors | |||||||||||||||||
Lynn Jenkins (1963) | Director | Since 2019 | Consultant, LJ Strategies (2019 to present); United States Representative, U.S. House of Representatives (2009 to 2018) | 62 | MGP Ingredients, Inc. | ||||||||||||
Jan M. Lewis (1957) | Director | Since 2011 | Retired | 62 | None | ||||||||||||
John R. Whitten (1946) | Director | Since 2008 | Retired | 62 | Onto Innovation Inc. (2019 to 2020); Rudolph Technologies, Inc. (2006 to 2019) | ||||||||||||
Stephen E. Yates (1948) | Director and Chairman of the Board | Since 2012 (Chairman since 2018) | Retired | 87 | None | ||||||||||||
Interested Director | |||||||||||||||||
Jonathan S. Thomas (1963) | Director | Since 2007 | President and Chief Executive Officer, ACC (2007 to present). Also serves as Chief Executive Officer, ACS; Executive Vice President, ACIM; Director, ACC, ACIM and other ACC subsidiaries | 125 | None |
The Statement of Additional Information has additional information about the fund's directors and is available without charge, upon request, by calling 1-800-345-2021.
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Officers
The following table presents certain information about the executive officers of the funds. Each officer serves as an officer for each of the 16 (in the case of Robert J. Leach, 15) investment companies in the American Century family of funds. No officer is compensated for his or her service as an officer of the funds. The listed officers are interested persons of the funds and are appointed or re-appointed on an annual basis. The mailing address for each officer listed below is 4500 Main Street, Kansas City, Missouri 64111.
Name (Year of Birth) | Offices with the Funds | Principal Occupation(s) During the Past Five Years | ||||||
Patrick Bannigan (1965) | President since 2019 | Executive Vice President and Director, ACC (2012 to present); Chief Financial Officer, Chief Accounting Officer and Treasurer, ACC (2015 to present). Also serves as President, ACS; Vice President, ACIM; Chief Financial Officer, Chief Accounting Officer and/or Director, ACIM, ACS and other ACC subsidiaries | ||||||
R. Wes Campbell (1974) | Chief Financial Officer and Treasurer since 2018 | Vice President, ACS, (2020 to present); Investment Operations and Investment Accounting, ACS (2000 to present) | ||||||
Amy D. Shelton (1964) | Chief Compliance Officer and Vice President since 2014 | Chief Compliance Officer, American Century funds, (2014 to present); Chief Compliance Officer, ACIM (2014 to present); Chief Compliance Officer, ACIS (2009 to present). Also serves as Vice President, ACIS | ||||||
Charles A. Etherington (1957) | General Counsel since 2007 and Senior Vice President since 2006 | Attorney, ACC (1994 to present); Vice President, ACC (2005 to present); General Counsel, ACC (2007 to present). Also serves as General Counsel, ACIM, ACS, ACIS and other ACC subsidiaries; and Senior Vice President, ACIM and ACS | ||||||
C. Jean Wade (1964) | Vice President since 2012 | Senior Vice President, ACS (2017 to present); Vice President, ACS (2000 to 2017) | ||||||
Robert J. Leach (1966) | Vice President since 2006 | Vice President, ACS (2000 to present) | ||||||
David H. Reinmiller (1963) | Vice President since 2000 | Attorney, ACC (1994 to present). Also serves as Vice President, ACIM and ACS | ||||||
Ward D. Stauffer (1960) | Secretary since 2005 | Attorney, ACC (2003 to present) |
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Approval of Management Agreement |
At a meeting held on June 24, 2020, the Fund’s Board of Directors (the "Board") unanimously approved the renewal of the 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, contracts for investment advisory services are required to be reviewed, evaluated, and approved by a majority of a fund’s directors (the “Directors”), including a majority of the independent Directors, each year.
Prior to its consideration of the renewal of the management agreement, the Directors requested and reviewed extensive data and information compiled by the Advisor and certain independent providers of evaluation data concerning the Fund and the services provided to the Fund by the Advisor. This review was in addition to the oversight and evaluation undertaken by the Board and its committees on a continual basis and the information received was supplemental to the extensive information that the Board and its committees receive and consider throughout the year.
In connection with its consideration of the renewal of the management agreement, the Board’s review and evaluation of the services provided by the Advisor included, but was not limited to, the following:
•the nature, extent, and quality of investment management, shareholder services, and other services provided and to be provided to the Fund;
•the wide range of other programs and services provided and to be provided to the Fund and its shareholders on a routine and non-routine basis;
•the Fund’s investment performance, including data comparing the Fund's performance to appropriate benchmarks and/or a peer group of other mutual funds with similar investment objectives and strategies;
•the cost of owning the Fund compared to the cost of owning similar funds;
•the compliance policies, procedures, and regulatory experience of the Advisor and the Fund's service providers;
•the Advisor’s strategic plans;
•the Advisor’s business continuity plans and specifically its response to the COVID-19 pandemic;
•financial data showing the cost of services provided to the Fund, the profitability of the Fund to the Advisor, and the overall profitability of the Advisor;
•possible economies of scale associated with the Advisor’s management of the Fund and other accounts;
•services provided and charges to the Advisor's other investment management clients;
•acquired fund fees and expenses;
•payments and practices in connection with financial intermediaries holding shares of the Fund and the services provided by intermediaries in connection therewith; and
•possible collateral benefits to the Advisor from the management of the Fund.
The Board held two meetings to consider the renewal. The independent Directors also met in private session three times to review and discuss the information provided in response to their request. The independent Directors held active discussions with the Advisor regarding the renewal of the management agreement, requesting supplemental information, and reviewing information provided by the Advisor in response thereto. The independent Directors had the benefit of the advice of their independent counsel throughout the process.
Factors Considered
The Directors considered all of the information provided by the Advisor, the independent data providers, and 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
33
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. In deciding to renew the management agreement, the Board based its decision on a number of factors, including without limitation the following:
Nature, Extent and Quality of Services — Generally. Under the management agreement, the Advisor is responsible for providing or arranging for all services necessary for the operation of the Fund. The Board noted that the Advisor provides or arranges at its own expense a wide variety of services including without limitation the following:
•constructing and designing the Fund
•portfolio research and security selection
•initial capitalization/funding
•securities trading
•Fund administration
•custody of Fund assets
•daily valuation of the Fund’s portfolio
•shareholder servicing and transfer agency, including shareholder confirmations, recordkeeping, and communications
•legal services (except the independent Directors’ counsel)
•regulatory and portfolio compliance
•financial reporting
•marketing and distribution (except amounts paid by the Fund under Rule 12b-1 plans)
The Board noted that many of these services have expanded over time in terms of both quantity and complexity in response to shareholder demands, competition in the industry, changing distribution channels, and the changing regulatory environment.
Investment Management Services. The nature of the investment management services provided to the Fund is quite complex and allows Fund shareholders access to professional money management, instant diversification of their investments within an asset class, the opportunity to easily diversify among asset classes by investing in or exchanging among various American Century Investments funds, and liquidity. In evaluating investment performance, the Board expects the Advisor to manage the Fund in accordance with its investment objectives and approved strategies. Further, the Directors recognize that the Advisor has an obligation to monitor trading activities, and in particular to seek the best execution of fund trades, and to evaluate the use of and payment for research. In providing these services, the Advisor utilizes teams of investment professionals (portfolio managers, analysts, research assistants, and securities traders) who require extensive information technology, research, training, compliance, and other systems to conduct their business. The Board, directly and through its Fund Performance Review Committee, provides oversight of the investment performance process. It regularly reviews investment performance information for the Fund, together with comparative information for appropriate benchmarks and/or peer groups of similarly-managed funds, over different time horizons. The Directors also review investment performance information during the management agreement renewal process. If performance concerns are identified, the Fund receives special reviews until performance improves, during which the Board discusses with the Advisor the reasons for such results (e.g., market conditions, security selection) and any efforts being undertaken to improve performance. The Fund’s performance was above its benchmark for the one-, three-, five-, and ten-year periods reviewed by the Board. The Board found the investment management services provided by the Advisor to the Fund to be satisfactory and consistent with the management agreement.
Shareholder and Other Services. Under the management agreement, the Advisor provides the Fund with a comprehensive package of transfer agency, shareholder, and other services. The Board, directly and through its various committees, regularly reviews reports and evaluations of such services at its regular meetings. These reports include, but are not limited to, information
34
regarding the operational efficiency and accuracy of the shareholder and transfer agency services provided, staffing levels, shareholder satisfaction, technology support (including cyber security), new products and services offered to Fund shareholders, securities trading activities, portfolio valuation services, auditing services, and legal and operational compliance activities. The Board found the services provided by the Advisor to the Fund under the management agreement to be competitive and of high quality.
COVID-19 Response. During 2020, much of the world experienced unprecedented change and challenges from the impacts of the rapidly evolving, worldwide spread of the COVID-19 virus. The Board evaluated the Advisor’s response to the COVID-19 pandemic and its impact on service to the Fund. The Board found that Fund shareholders have continued to receive the Advisor’s investment management and other services without disruption, and Advisor personnel have demonstrated great resiliency in providing those services. The Board, directly and through its Audit Committee, continues to monitor the impact of the pandemic and the response of each of the Fund’s service providers.
Costs of Services and Profitability. The Advisor provides detailed information concerning its cost of providing various services to the Fund, its profitability in managing the Fund (pre- and post-distribution), its overall profitability, and its financial condition. The Directors have reviewed with the Advisor the methodology used to prepare this financial information. This information is considered in evaluating the Advisor’s financial condition, its ability to continue to provide services under the management agreement, and the reasonableness of the current management fee. The Board concluded that the Advisor’s profits were reasonable in light of the services provided to the Fund.
Ethics. The Board generally considers the Advisor’s commitment to providing quality services to shareholders and to conducting its business ethically. They noted that the Advisor’s practices generally meet or exceed industry best practices.
Economies of Scale. The Board also reviewed information provided by the Advisor regarding the possible existence of economies of scale in connection with the management of the Fund. The Board concluded that economies of scale are difficult to measure and predict with precision, especially on a fund-by-fund basis. The Board concluded that the Advisor is appropriately sharing economies of scale, to the extent they exist, through its competitive fee structure, offering competitive fees from fund inception, and through reinvestment in its business, infrastructure, investment capabilities and initiatives to provide shareholders additional content and services. The Board also noted that economies of scale are shared with the Fund and its shareholders through management fee breakpoints that serve to reduce the effective management fee as the assets of the Fund grow.
Comparison to Other Funds’ Fees. The management agreement provides that the Fund pays the Advisor a single, all-inclusive (or unified) management fee for providing all services necessary for the management and operation of the Fund, other than brokerage expenses, expenses attributable to short sales, taxes, interest, extraordinary expenses, fees and expenses of the Fund’s independent Directors (including their independent legal counsel), and expenses incurred in connection with the provision of shareholder services and distribution services under a plan adopted pursuant to Rule 12b-1 under the Investment Company Act. 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 any applicable Rule 12b-1 distribution fees, all other components of the total fees charged by these other funds may be increased without shareholder approval. The Board believes the unified fee structure is a benefit to Fund shareholders because it clearly discloses to shareholders the cost of owning Fund shares, and, since 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
35
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 comparing the Fund’s unified fee to the total expense ratios of its peers. The unified fee charged to shareholders of the Fund was above the median of the total expense ratios of the Fund’s peer expense universe and was within the range of its peer expense group. The Board concluded that the management fee paid by the Fund to the Advisor under the management agreement is reasonable in light of the services provided to the Fund.
Comparison to Fees and Services Provided to Other Clients of the Advisor. The Board also requested and received information from the Advisor concerning the nature of the services, fees, costs, and profitability of its advisory services to advisory clients other than the Fund. They observed that these varying types of client accounts require different services and involve different regulatory and entrepreneurial risks than the management of the Fund. The Board analyzed this information and concluded that the fees charged and services provided to the Fund were reasonable by comparison.
Payments to Intermediaries. The Directors also requested and received a description of payments made to intermediaries by the Fund and the Advisor and services provided in response thereto. These payments include various payments made by the Fund or the Advisor to different types of intermediaries and recordkeepers for distribution and service activities provided for the Fund. The Directors reviewed such information and received representations from the Advisor that all such payments by the Fund were made pursuant to the Fund's Rule 12b-1 Plan and that all such payments by the Advisor were made from the Advisor’s resources and reasonable profits. The Board found such payments to be reasonable in scope and purpose.
Collateral or “Fall-Out” Benefits Derived by the Advisor. The Board considered the possible existence of collateral benefits the Advisor may receive as a result of its relationship with the Fund. They concluded that the Advisor’s primary business is managing mutual funds and it generally does not use fund or shareholder information to generate profits in other lines of business, and therefore does not derive any significant collateral benefits from them. To the extent there are potential collateral benefits, the board has been advised and has taken this into consideration in its review of the management contract with the Fund. The Board noted that additional assets from other clients may offer the Advisor some benefit from increased leverage with service providers and counterparties. Additionally, the Advisor may receive proprietary research from broker-dealers that execute fund portfolio transactions, which the Board concluded is likely to benefit other clients of the Advisor, as well as Fund shareholders. The Board also determined that the Advisor is able to provide investment management services to certain clients other than the Fund, at least in part, due to its existing infrastructure built to serve the fund complex. The Board concluded that appropriate allocation methodologies had been employed to assign resources and the cost of those resources to these other clients and, where expressly provided, these other client assets may be included with the assets of the Fund to determine breakpoints in the management fee schedule.
Existing Relationship. The Board also considered whether there was any reason for not continuing the existing arrangement with the Advisor. In this regard, the Board was mindful of the potential disruptions of the Fund’s operations and various risks, uncertainties, and other effects that could occur as a result of a decision not to continue such relationship. In particular, the Board recognized that most shareholders have invested in the Fund on the strength of the Advisor’s industry standing and reputation and in the expectation that the Advisor will have a continuing role in providing advisory services to the Fund.
36
Conclusion of the Directors. As a result of this process, the Board, including all of the independent Directors, taking into account all of the factors discussed above and the information provided by the Advisor and others in connection with its review and throughout the year, determined that the management fee is fair and reasonable in light of the services provided and that the investment management agreement between the Fund and the Advisor should be renewed.
37
Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain retirement accounts are subject to federal income tax withholding, unless you elect not to have withholding apply*. Tax will be withheld on the total amount withdrawn even though you may be receiving amounts that are not subject to withholding, such as nondeductible contributions. In such case, excess amounts of withholding could occur. You may adjust your withholding election so that a greater or lesser amount will be withheld.
If you don’t want us to withhold on this amount, you must notify us to not withhold the federal income tax. You may notify us in writing or in certain situations by telephone or through other electronic means. For systematic withdrawals, your withholding election will remain in effect until revoked or changed by filing a new election. You have the right to revoke your election at any time and change your withholding percentage for future distributions.
Remember, even if you elect not to have income tax withheld, you are liable for paying income tax on the taxable portion of your withdrawal. If you elect not to have income tax withheld or you don’t have enough income tax withheld, you may be responsible for payment of estimated tax. You may incur penalties under the estimated tax rules if your withholding and estimated tax payments are not sufficient. You can reduce or defer the income tax on a distribution by directly or indirectly rolling such distribution over to another IRA or eligible plan. You should consult your tax advisor for additional information.
State tax will be withheld if, at the time of your distribution, your address is within one of the mandatory withholding states and you have federal income tax withheld (or as otherwise required by state law). State taxes will be withheld from your distribution in accordance with the respective state rules.
*Some 403(b), 457 and qualified retirement plan distributions may be subject to 20% mandatory withholding, as they are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
A description of the policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund is available without charge, upon request, by calling 1-800-345-2021. It is also available on American Century Investments’ website at americancentury.com/proxy 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 americancentury.com/proxy. 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 as an exhibit to its reports on
Form N-PORT. The fund’s Form N-PORT reports are available on the SEC’s website at sec.gov.
The fund also makes its complete schedule of portfolio holdings for the most recent quarter of its
fiscal year available on its website at americancentury.com and, upon request, by calling
1-800-345-2021.
38
Other Tax Information
The following information is provided pursuant to provisions of the Internal Revenue Code.
The fund hereby designates up to the maximum amount allowable as qualified dividend income for the fiscal year ended November 30, 2020.
The fund hereby designates $338,793, or up to the maximum amount allowable, as long-term capital gain distributions (20% rate gain distributions) for the fiscal year ended November 30, 2020.
For the fiscal year ended November 30, 2020, the fund intends to pass through to shareholders
foreign source income of $6,688,539 and foreign taxes paid of $273,815, or up to the maximum
amount allowable, as a foreign tax credit. Foreign source income and foreign tax expense per
outstanding share on November 30, 2020 are $0.1295 and $0.0053, respectively.
39
Notes |
40
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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. | ||||||||
©2021 American Century Proprietary Holdings, Inc. All rights reserved. CL-ANN-91032 2101 |
![image171.jpg](https://capedge.com/proxy/N-CSR/0000872825-21-000006/image171.jpg)
Annual Report | |||||
November 30, 2020 | |||||
International Value Fund | |||||
Investor Class (ACEVX) | |||||
I Class (ACVUX) | |||||
A Class (MEQAX) | |||||
C Class (ACCOX) | |||||
R Class (ACVRX) | |||||
R6 Class (ACVDX) |
Table of Contents |
President’s Letter | |||||
Performance | |||||
Portfolio Commentary | |||||
Fund Characteristics | |||||
Shareholder Fee Example | |||||
Schedule of Investments | |||||
Statement of Assets and Liabilities | |||||
Statement of Operations | |||||
Statement of Changes in Net Assets | |||||
Notes to Financial Statements | |||||
Financial Highlights | |||||
Report of Independent Registered Public Accounting Firm | |||||
Management | |||||
Approval of Management Agreement | |||||
Additional Information |
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 |
![image141.jpg](https://capedge.com/proxy/N-CSR/0000872825-21-000006/image141.jpg)
Dear Investor:
Thank you for reviewing this annual report for the period ended November 30, 2020. Annual reports help convey important information about fund returns, including market factors that affected performance. For additional investment insights, please visit americancentury.com.
Stocks Recovered from Pandemic-Fueled Sell-Off
In late 2019, broad market sentiment was generally upbeat. Dovish central banks in developed markets, modest inflation, improving economic and corporate earnings data, and progress on U.S.-China trade policy helped boost global growth outlooks. Against this backdrop, riskier assets generally remained in favor.
However, beginning in late February, the COVID-19 outbreak rapidly spread worldwide, halting most economic activity and triggering a deep global recession. Global stocks sold off sharply amid a widespread flight to safety. Quick and aggressive action from the Federal Reserve and other central banks and federal governments helped stabilize and restore confidence in the financial markets. By summer, declining coronavirus infection and death rates in many regions and the reopening of economies were positive influences. By the end of November, most data suggested economies were recovering. But at the same time, COVID-19 infection rates were rising in the U.S. and Europe, prompting new lockdown measures that threatened the economic recovery.
Overall, global stocks overcame the effects of the early 2020 sell-off to deliver solid gains for the 12-month period. Emerging markets stocks rallied and outperformed developed markets stocks, while growth stocks significantly outpaced value stocks worldwide.
Science Helps Steer the Return to Normal
The return to pre-pandemic life will take time and patience, but we are confident we will get there. The first COVID-19 vaccine is now approved and in limited distribution, and medical professionals continue to develop better treatment protocols. Until the vaccine is widely available, investors likely will face periods of outbreak-related disruptions, economic uncertainty and heightened market volatility. These influences can be unsettling, but they tend to be temporary.
We appreciate your confidence in us during these extraordinary times. Our firm has a long history of helping clients weather unpredictable markets, and we’re confident we will continue to meet today’s challenges.
Sincerely,
![image231.jpg](https://capedge.com/proxy/N-CSR/0000872825-21-000006/image231.jpg)
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
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Performance |
Total Returns as of November 30, 2020 | ||||||||||||||||||||
Average Annual Returns | ||||||||||||||||||||
Ticker Symbol | 1 year | 5 years | 10 years | Since Inception | Inception Date | |||||||||||||||
Investor Class | ACEVX | 6.69% | 2.99% | 4.05% | — | 4/3/06 | ||||||||||||||
MSCI EAFE Value Index | — | -3.35% | 2.90% | 3.75% | — | — | ||||||||||||||
I Class | ACVUX | 6.93% | 3.18% | 4.27% | — | 4/3/06 | ||||||||||||||
A Class | MEQAX | 3/31/97 | ||||||||||||||||||
No sales charge | 6.32% | 2.72% | 3.79% | — | ||||||||||||||||
With sales charge | 0.25% | 1.51% | 3.19% | — | ||||||||||||||||
C Class | ACCOX | 5.65% | 1.96% | 3.03% | — | 4/3/06 | ||||||||||||||
R Class | ACVRX | 6.16% | 2.48% | 3.54% | — | 4/3/06 | ||||||||||||||
R6 Class | ACVDX | 7.08% | 3.34% | — | 2.54% | 7/26/13 |
Average annual returns since inception are presented when ten years of performance history is not available.
Fund returns would have been lower if a portion of the fees had not been waived.
Sales charges include initial sales charges and contingent deferred sales charges (CDSCs), as applicable. A Class shares have a 5.75% maximum initial sales charge and may be subject to a maximum CDSC of 1.00%. C Class shares redeemed within 12 months of purchase are subject to a maximum CDSC of 1.00%. The SEC requires that mutual funds provide performance information net of maximum sales charges in all cases where charges could be applied.
Data presented reflect past performance. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance shown. Total returns for periods less than one year are not annualized. Investment return and principal value will fluctuate, and redemption value may be more or less than original cost. Data assumes reinvestment of dividends and capital gains, and none of the charts reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. To obtain performance data current to the most recent month end, please call 1-800-345-2021 or visit americancentury.com. For additional information about the fund, please consult the prospectus.
3
Growth of $10,000 Over 10 Years | ||
$10,000 investment made November 30, 2010 | ||
Performance for other share classes will vary due to differences in fee structure. |
![chart-71019b47a728436da851.jpg](https://capedge.com/proxy/N-CSR/0000872825-21-000006/chart-71019b47a728436da851.jpg)
Value on November 30, 2020 | |||||
Investor Class — $14,883 | |||||
MSCI EAFE Value Index — $14,456 | |||||
Ending value of Investor Class would have been lower if a portion of the fees had not been waived.
Total Annual Fund Operating Expenses | |||||||||||||||||
Investor Class | I Class | A Class | C Class | R Class | R6 Class | ||||||||||||
1.16% | 0.96% | 1.41% | 2.16% | 1.66% | 0.81% |
The total annual fund operating expenses shown is as stated in the fund’s prospectus current as of the date of this report. The prospectus may vary from the expense ratio shown elsewhere in this report because it is based on a different time period, includes acquired fund fees and expenses, and, if applicable, does not include fee waivers or expense reimbursements.
Data presented reflect past performance. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance shown. Total returns for periods less than one year are not annualized. Investment return and principal value will fluctuate, and redemption value may be more or less than original cost. Data assumes reinvestment of dividends and capital gains, and none of the charts reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. To obtain performance data current to the most recent month end, please call 1-800-345-2021 or visit americancentury.com. For additional information about the fund, please consult the prospectus.
4
Portfolio Commentary |
Portfolio Managers: Yulin Long and Tsuyoshi Ozaki
In March 2020, portfolio manager Tsuyoshi Ozaki replaced Elizabeth Xie on the fund’s management team.
Performance Summary
International Value rose 6.69%* for the fiscal year ended November 30, 2020, compared with the -3.35% return of its benchmark, the MSCI EAFE Value Index. Fund results reflect operating expenses, while benchmark returns do not.
Global stock markets declined sharply in early 2020 amid significant volatility as the coronavirus pandemic led to severe global economic disruptions. Global economic activity grinded to a halt as countries closed borders, restricted travel and instituted social distancing protocols. Additionally, a price war between Saudi Arabia and Russia drove oil prices to record lows, further straining global financial markets. Following unprecedented fiscal and monetary stimulus by governments and global central banks to support economic activity, financial markets began to recover. Despite historic declines in gross domestic product in most global regions during the second quarter of 2020, optimism surrounding COVID-19 vaccine trials and better-than-expected economic earnings data supported equity markets during much of the second half of the reporting period. Nevertheless, international value-oriented stocks ended the reporting period with declines as a second wave of the coronavirus spread globally. In that environment, performance of international equities varied widely by region and style with European stocks trailing Japanese equities and value equities underperforming growth stocks.
Our stock selection process incorporates factors of valuation, quality, growth and sentiment, while minimizing unintended risks among industries and other risk characteristics. Security selection in the financials sector contributed the most to the fund’s relative returns. Stock choices in the consumer discretionary, industrials and communication services sectors also benefited performance. Conversely, positioning in the energy sector detracted fractionally from relative returns.
Geographically, stock choices within Japan and the U.K. contributed the most to relative returns. In contrast, security selection in Norway and positioning in Ireland weighed modestly on the fund’s results.
Financials and Consumer Discretionary Stocks Drive Contribution
Diversified financial companies led outperformance in the financials sector. Sweden-based Kinnevik was among the top sector and fund contributors to relative performance. The investment company, with a primary focus on digital consumer businesses, benefited from changing consumer behavior during the pandemic. Kinnevik reported strong financial results as consumers increasingly turned to online platforms for activities like shopping and health care services. Limited exposure to banks also helped relative performance as returns of many banks were constrained by lower demand for financial products and increased loan default provisions during the pandemic’s economic uncertainty.
*All fund returns referenced in this commentary are for Investor Class shares. Returns would have been lower if a portion of the fees had not been waived. Performance for other share classes will vary due to differences in fee structure; when Investor Class performance exceeds that of the fund’s benchmark, other share classes may not. See page 3 for returns for all share classes.
5
In the consumer discretionary sector, auto components manufacturers were key drivers of outperformance. An overweight position in France-based automotive supplier Valeo was a leading driver of the sector’s relative gains. The company’s stock price advanced amid improving economic activity and a resumption of vehicle manufacturing in China following the lifting of coronavirus lockdowns. Denmark-based jewelry maker Pandora also supported the sector’s returns, rising on strong online sales despite limited foot traffic at its stores.
A number of stocks in the industrials and communication services sectors also supported the fund’s outperformance. In industrials, Kone Oyj, a Finland-based engineering company, advanced on recovering demand for elevators and escalators in China, along with signs of resiliency in some residential construction markets. Several Japan-based stocks drove relative gains in the communication services sector, including entertainment company Nintendo, which benefited from higher purchases of video games and gaming consoles by consumers staying at home. Wireless telecommunication services provider NTT DOCOMO advanced amid expectations of 5G service rollouts. We ultimately exited the position.
Australia-based Fortescue Metals Group also contributed prominently to relative performance. The metals and mining company posted record shipments and profits as China’s economic recovery and ongoing supply disruptions in Brazil drove iron ore prices sharply higher.
Energy Sector Detracted Fractionally From Relative Results
Positioning in the energy sector, particularly in the energy equipment and services industry, detracted modestly from the fund’s relative returns. Overweight exposure to Italy-based Tenaris, a company that provides pipes and services to the energy industry, held back performance. The company’s stock price fell as sales decreased due to sharply lower global oil drilling activity. Elsewhere in the sector, U.K.-based Royal Dutch Shell and Norway-based Aker BP also declined along with the price of crude oil amid weakening demand due to the pandemic. We maintain exposure to Royal Dutch Shell based on strong valuation and quality factors, but exited our position in Aker BP.
Underweight exposure to Australia-based BHP Group also weighed on relative returns. The diversified mining company’s stock advanced amid higher prices and demand for industrial metals like iron ore and copper as economic activity in China, the world’s largest metals consumer, resumed. An overweight position in Spain-based bank Banco Bilbao Vizcaya Argentaria, which posted sharp coronavirus-related losses amid falling interest rates and rising nonperforming loans, also held back gains. Nevertheless, the stock’s valuation factors remain very attractive.
Portfolio Positioning
As we approach 2021, global economies continue to grapple with uncertainty surrounding the coronavirus pandemic. We believe our disciplined investment approach is particularly beneficial during periods of likely volatility, and we adhere to our process regardless of the market environment. We believe that this allows us to take advantage of opportunities presented by market inefficiencies. We employ a structured, disciplined investment approach for both stock selection and portfolio construction. We incorporate measures of valuation, quality, growth and sentiment into our stock selection process with the aim of producing consistent long-term performance. We seek to maintain balanced exposure to our fundamentally based, multidimensional drivers of stock returns, applying bottom-up research and analysis on individual stocks to determine positioning. As a result of this approach and our risk-control process, which seeks to limit active risk at the country, sector and industry level, we will have only modest overweights/underweights at any given time. As of November 30, 2020, the fund’s largest overweight positions are in the financials and consumer discretionary sectors. The fund’s largest underweights are in the consumer staples and real estate sectors. Geographically, the fund is overweight in Europe, notably in Spain, the Netherlands, France and Sweden, and underweight in Asia Pacific, particularly to Japan.
6
Fund Characteristics |
NOVEMBER 30, 2020 | |||||
Top Ten Holdings | % of net assets | ||||
TOTAL SE | 2.3% | ||||
Novartis AG | 2.0% | ||||
GlaxoSmithKline plc | 1.7% | ||||
Zurich Insurance Group AG | 1.7% | ||||
Royal Dutch Shell plc, B Shares | 1.6% | ||||
Iberdrola SA | 1.6% | ||||
Rio Tinto plc | 1.5% | ||||
Bayerische Motoren Werke AG | 1.5% | ||||
BNP Paribas SA | 1.4% | ||||
Allianz SE | 1.3% | ||||
Types of Investments in Portfolio | % of net assets | ||||
Common Stocks | 97.3% | ||||
Rights | —* | ||||
Warrant | —* | ||||
Total Equity Exposure | 97.3% | ||||
Temporary Cash Investments | 2.0% | ||||
Temporary Cash Investments - Securities Lending Collateral | 0.4% | ||||
Other Assets and Liabilities | 0.3% | ||||
*Category is less than 0.05% of total net assets. | |||||
Investments by Country | % of net assets | ||||
United Kingdom | 18.0% | ||||
Japan | 17.3% | ||||
France | 12.1% | ||||
Germany | 11.8% | ||||
Australia | 7.8% | ||||
Switzerland | 6.4% | ||||
Spain | 5.0% | ||||
Sweden | 3.6% | ||||
Italy | 3.5% | ||||
Singapore | 2.9% | ||||
Netherlands | 2.8% | ||||
Other Countries | 6.1% | ||||
Cash and Equivalents* | 2.7% |
*Includes temporary cash investments, temporary cash investments - securities lending collateral and other assets and liabilities.
7
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 June 1, 2020 to November 30, 2020.
Actual Expenses
The table provides information about actual account values and actual expenses for each class. You may use the information, together with the amount you invested, to estimate the expenses that you paid over the period. First, identify the share class you own. Then simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
If you hold Investor Class shares of any American Century Investments fund, or I Class shares of the American Century Diversified Bond Fund, in an American Century Investments account (i.e., not through a financial intermediary or employer-sponsored retirement plan account), American Century Investments may charge you a $25.00 annual 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 $25.00 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.
8
Beginning Account Value 6/1/20 | Ending Account Value 11/30/20 | Expenses Paid During Period(1) 6/1/20 - 11/30/20 | Annualized Expense Ratio(1) | |||||||||||
Actual | ||||||||||||||
Investor Class | $1,000 | $1,197.50 | $6.37 | 1.16% | ||||||||||
I Class | $1,000 | $1,197.90 | $5.27 | 0.96% | ||||||||||
A Class | $1,000 | $1,194.50 | $7.74 | 1.41% | ||||||||||
C Class | $1,000 | $1,192.10 | $11.84 | 2.16% | ||||||||||
R Class | $1,000 | $1,195.40 | $9.11 | 1.66% | ||||||||||
R6 Class | $1,000 | $1,199.70 | $4.45 | 0.81% | ||||||||||
Hypothetical | ||||||||||||||
Investor Class | $1,000 | $1,019.20 | $5.86 | 1.16% | ||||||||||
I Class | $1,000 | $1,020.20 | $4.85 | 0.96% | ||||||||||
A Class | $1,000 | $1,017.95 | $7.11 | 1.41% | ||||||||||
C Class | $1,000 | $1,014.20 | $10.88 | 2.16% | ||||||||||
R Class | $1,000 | $1,016.70 | $8.37 | 1.66% | ||||||||||
R6 Class | $1,000 | $1,020.95 | $4.09 | 0.81% |
(1)Expenses are equal to the class's annualized expense ratio listed in the table above, multiplied by the average account value over the period, multiplied by 183, the number of days in the most recent fiscal half-year, divided by 366, to reflect the one-half year period. Annualized expense ratio reflects actual expenses, including any applicable fee waivers or expense reimbursements and excluding any acquired fund fees and expenses.
9
Schedule of Investments |
NOVEMBER 30, 2020
Shares | Value | |||||||
COMMON STOCKS — 97.3% | ||||||||
Australia — 7.8% | ||||||||
Aristocrat Leisure Ltd. | 19,447 | $ | 458,061 | |||||
Australia & New Zealand Banking Group Ltd. | 27,005 | 449,179 | ||||||
BHP Group Ltd. | 15,687 | 435,603 | ||||||
BlueScope Steel Ltd. | 19,085 | 239,757 | ||||||
Commonwealth Bank of Australia | 6,171 | 358,420 | ||||||
Fortescue Metals Group Ltd. | 49,925 | 668,454 | ||||||
Magellan Financial Group Ltd. | 3,631 | 157,862 | ||||||
National Australia Bank Ltd. | 9,905 | 166,573 | ||||||
Santos Ltd. | 42,344 | 188,828 | ||||||
Wesfarmers Ltd. | 8,987 | 326,377 | ||||||
Westpac Banking Corp. | 11,193 | 164,788 | ||||||
Woodside Petroleum Ltd. | 23,841 | 387,553 | ||||||
4,001,455 | ||||||||
Austria — 0.7% | ||||||||
Raiffeisen Bank International AG | 10,564 | 200,307 | ||||||
voestalpine AG | 5,626 | 180,259 | ||||||
380,566 | ||||||||
Belgium — 1.4% | ||||||||
Ageas SA/NV | 7,143 | 350,278 | ||||||
Anheuser-Busch InBev SA | 2,916 | 194,526 | ||||||
KBC Group NV(1) | 2,471 | 171,507 | ||||||
716,311 | ||||||||
Denmark — 0.9% | ||||||||
AP Moller - Maersk A/S, A Shares | 110 | 207,729 | ||||||
Pandora A/S | 2,772 | 276,671 | ||||||
484,400 | ||||||||
Finland — 1.0% | ||||||||
Fortum Oyj | 4,327 | 98,997 | ||||||
Kone Oyj, B Shares | 4,714 | 394,832 | ||||||
493,829 | ||||||||
France — 12.1% | ||||||||
BNP Paribas SA(1) | 13,737 | 700,058 | ||||||
Bouygues SA | 4,867 | 193,255 | ||||||
CNP Assurances(1) | 10,724 | 170,087 | ||||||
Covivio | 1,569 | 127,776 | ||||||
Eiffage SA(1) | 2,942 | 287,159 | ||||||
Hermes International | 275 | 267,413 | ||||||
L'Oreal SA | 673 | 245,656 | ||||||
Legrand SA | 3,149 | 265,778 | ||||||
Peugeot SA(1) | 16,680 | 391,151 | ||||||
Publicis Groupe SA | 12,279 | 556,224 | ||||||
Safran SA(1) | 2,148 | 311,966 | ||||||
Sanofi | 4,168 | 419,376 | ||||||
Schneider Electric SE | 2,786 | 386,485 | ||||||
Societe Generale SA(1) | 12,248 | 242,182 | ||||||
TOTAL SE | 28,248 | 1,197,528 |
10
Shares | Value | |||||||
Valeo SA | 10,916 | $ | 421,246 | |||||
Vinci SA | 701 | 71,213 | ||||||
6,254,553 | ||||||||
Germany — 11.8% | ||||||||
adidas AG(1) | 382 | 121,643 | ||||||
Allianz SE | 2,910 | 686,170 | ||||||
Aroundtown SA(1) | 23,776 | 164,825 | ||||||
BASF SE | 4,249 | 310,839 | ||||||
Bayer AG | 1,746 | 100,453 | ||||||
Bayerische Motoren Werke AG | 8,677 | 755,464 | ||||||
Brenntag AG | 7,485 | 571,617 | ||||||
Commerzbank AG(1) | 20,120 | 124,868 | ||||||
Continental AG | 3,859 | 525,040 | ||||||
Daimler AG | 9,527 | 641,175 | ||||||
Deutsche Boerse AG | 824 | 137,369 | ||||||
Deutsche Post AG | 3,604 | 173,931 | ||||||
Deutsche Telekom AG | 3,416 | 61,526 | ||||||
Hannover Rueck SE | 708 | 118,505 | ||||||
HeidelbergCement AG | 3,037 | 215,771 | ||||||
Muenchener Rueckversicherungs-Gesellschaft AG | 2,189 | 609,931 | ||||||
Siemens AG | 3,986 | 531,683 | ||||||
Siemens Energy AG(1) | 1,993 | 59,362 | ||||||
Telefonica Deutschland Holding AG | 61,035 | 168,341 | ||||||
6,078,513 | ||||||||
Hong Kong — 1.5% | ||||||||
BOC Hong Kong Holdings Ltd. | 96,000 | 313,394 | ||||||
Hang Seng Bank Ltd. | 17,100 | 297,758 | ||||||
Sands China Ltd. | 18,800 | 77,077 | ||||||
Techtronic Industries Co. Ltd. | 6,500 | 83,479 | ||||||
771,708 | ||||||||
Israel — 0.3% | ||||||||
Israel Discount Bank Ltd., A Shares | 48,984 | 165,142 | ||||||
Italy — 3.5% | ||||||||
Enel SpA | 51,364 | 512,001 | ||||||
Eni SpA | 20,625 | 202,697 | ||||||
Ferrari NV | 1,527 | 323,670 | ||||||
FinecoBank Banca Fineco SpA(1) | 5,234 | 81,719 | ||||||
Moncler SpA(1) | 4,179 | 203,872 | ||||||
Tenaris SA | 62,864 | 485,257 | ||||||
1,809,216 | ||||||||
Japan — 17.3% | ||||||||
Advantest Corp. | 2,000 | 139,264 | ||||||
Brother Industries Ltd. | 13,300 | 252,850 | ||||||
Central Japan Railway Co. | 700 | 89,632 | ||||||
Denso Corp. | 7,900 | 370,811 | ||||||
FANUC Corp. | 500 | 120,635 | ||||||
Fast Retailing Co. Ltd. | 200 | 163,747 | ||||||
Hino Motors Ltd. | 25,800 | 221,933 | ||||||
Honda Motor Co. Ltd. | 2,600 | 71,584 | ||||||
Hoya Corp. | 1,100 | 146,597 | ||||||
ITOCHU Corp. | 10,600 | 280,280 | ||||||
KDDI Corp. | 17,300 | 496,047 |
11
Shares | Value | |||||||
Komatsu Ltd. | 3,000 | $ | 73,059 | |||||
LIXIL Group Corp. | 18,700 | 448,723 | ||||||
Mitsubishi Corp. | 5,100 | 118,226 | ||||||
Mitsubishi Electric Corp. | 10,300 | 151,455 | ||||||
Mitsubishi UFJ Financial Group, Inc. | 19,800 | 84,479 | ||||||
Mitsui & Co. Ltd. | 7,500 | 127,026 | ||||||
Nintendo Co. Ltd. | 400 | 227,226 | ||||||
Nippon Yusen KK | 11,000 | 238,030 | ||||||
Obayashi Corp. | 28,500 | 251,481 | ||||||
ORIX Corp. | 34,700 | 511,247 | ||||||
Otsuka Holdings Co. Ltd. | 2,400 | 97,008 | ||||||
Panasonic Corp. | 17,400 | 184,367 | ||||||
Recruit Holdings Co. Ltd. | 11,200 | 469,343 | ||||||
Renesas Electronics Corp.(1) | 30,500 | 271,717 | ||||||
Sekisui House Ltd. | 20,500 | 367,116 | ||||||
Shin-Etsu Chemical Co. Ltd. | 2,400 | 391,746 | ||||||
Shizuoka Bank Ltd. (The) | 9,500 | 67,496 | ||||||
Softbank Corp. | 23,000 | 283,181 | ||||||
SoftBank Group Corp. | 2,100 | 146,580 | ||||||
Sony Corp. | 5,400 | 502,131 | ||||||
Sumitomo Mitsui Financial Group, Inc. | 12,800 | 370,748 | ||||||
Tokyo Electron Ltd. | 900 | 306,298 | ||||||
Toyota Industries Corp. | 3,100 | 222,640 | ||||||
Toyota Motor Corp. | 9,800 | 655,031 | ||||||
8,919,734 | ||||||||
Netherlands — 2.8% | ||||||||
ING Groep NV(1) | 26,683 | 259,335 | ||||||
Koninklijke Ahold Delhaize NV | 8,119 | 232,055 | ||||||
Koninklijke DSM NV | 87 | 14,254 | ||||||
NN Group NV | 9,137 | 370,181 | ||||||
Randstad NV(1) | 9,362 | 579,060 | ||||||
1,454,885 | ||||||||
Singapore — 2.9% | ||||||||
DBS Group Holdings Ltd. | 26,613 | 493,450 | ||||||
Oversea-Chinese Banking Corp. Ltd.(2) | 70,472 | 524,366 | ||||||
United Overseas Bank Ltd. | 27,400 | 455,538 | ||||||
1,473,354 | ||||||||
Spain — 5.0% | ||||||||
ACS Actividades de Construccion y Servicios SA | 3,484 | 109,738 | ||||||
Banco Bilbao Vizcaya Argentaria SA | 87,526 | 407,290 | ||||||
Banco Santander SA(1) | 50,749 | 145,734 | ||||||
CaixaBank SA | 105,260 | 268,605 | ||||||
Enagas SA | 3,835 | 93,263 | ||||||
Endesa SA | 12,085 | 345,177 | ||||||
Iberdrola SA | 58,667 | 799,475 | ||||||
Industria de Diseno Textil SA(2) | 5,862 | 194,230 | ||||||
Mapfre SA | 50,674 | 96,657 | ||||||
Telefonica SA | 20,150 | 88,092 | ||||||
2,548,261 | ||||||||
Sweden — 3.6% | ||||||||
Atlas Copco AB, A Shares(2) | 501 | 25,274 | ||||||
Hennes & Mauritz AB, B Shares(1) | 4,407 | 93,056 |
12
Shares | Value | |||||||
Industrivarden AB, C Shares(1) | 12,458 | $ | 379,555 | |||||
Investor AB, B Shares | 7,586 | 524,073 | ||||||
Kinnevik AB, Class B | 5,859 | 291,133 | ||||||
Lundin Energy AB | 8,461 | 202,175 | ||||||
Sandvik AB(1) | 14,455 | 324,586 | ||||||
1,839,852 | ||||||||
Switzerland — 6.4% | ||||||||
Cie Financiere Richemont SA | 969 | 80,213 | ||||||
Geberit AG | 470 | 282,462 | ||||||
Kuehne + Nagel International AG | 2,810 | 635,035 | ||||||
Novartis AG | 11,107 | 1,007,348 | ||||||
Partners Group Holding AG | 298 | 317,508 | ||||||
UBS Group AG | 9,016 | 127,685 | ||||||
Zurich Insurance Group AG | 2,109 | 854,911 | ||||||
3,305,162 | ||||||||
Taiwan — 0.3% | ||||||||
Taiwan Semiconductor Manufacturing Co. Ltd., ADR | 1,559 | 151,254 | ||||||
United Kingdom — 18.0% | ||||||||
3i Group plc | 22,162 | 315,684 | ||||||
Admiral Group plc | 12,855 | 489,176 | ||||||
Aviva plc | 109,400 | 467,515 | ||||||
BAE Systems plc | 21,400 | 143,918 | ||||||
Barclays plc(1) | 205,377 | 367,399 | ||||||
BHP Group plc | 24,191 | 548,609 | ||||||
BP plc | 125,286 | 409,884 | ||||||
Direct Line Insurance Group plc | 55,667 | 219,212 | ||||||
Evraz plc | 115,500 | 595,280 | ||||||
Ferguson plc | 3,972 | 444,937 | ||||||
GlaxoSmithKline plc | 48,790 | 892,785 | ||||||
HSBC Holdings plc | 64,134 | 331,046 | ||||||
ITV plc(1) | 199,956 | 251,055 | ||||||
Legal & General Group plc | 138,920 | 467,007 | ||||||
Lloyds Banking Group plc(1) | 609,208 | 288,558 | ||||||
M&G plc | 101,518 | 253,251 | ||||||
Next plc | 5,207 | 454,005 | ||||||
Rio Tinto plc | 11,977 | 776,061 | ||||||
Royal Dutch Shell plc, B Shares | 50,007 | 813,943 | ||||||
St. James's Place plc | 6,190 | 84,018 | ||||||
Standard Life Aberdeen plc | 86,448 | 311,702 | ||||||
Vodafone Group plc | 215,845 | 355,068 | ||||||
9,280,113 | ||||||||
TOTAL COMMON STOCKS (Cost $45,900,124) | 50,128,308 | |||||||
RIGHTS† | ||||||||
Spain† | ||||||||
Banco Santander SA(1) (Cost $5,014) | 50,749 | 6,338 | ||||||
WARRANTS† | ||||||||
Switzerland† | ||||||||
Cie Financiere Richemont SA(1) (Cost $—) | 1,938 | 384 |
13
Shares | Value | |||||||
TEMPORARY CASH INVESTMENTS — 2.0% | ||||||||
Repurchase Agreement, BMO Capital Markets Corp., (collateralized by various U.S. Treasury obligations, 0.625% - 1.375%, 1/31/25 - 5/15/30, valued at $494,896), in a joint trading account at 0.06%, dated 11/30/20, due 12/1/20 (Delivery value $484,739) | $ | 484,738 | ||||||
Repurchase Agreement, Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 0.625%, 5/15/30, valued at $555,917), at 0.07%, dated 11/30/20, due 12/1/20 (Delivery value $545,001) | 545,000 | |||||||
State Street Institutional U.S. Government Money Market Fund, Premier Class | 26 | 26 | ||||||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $1,029,764) | 1,029,764 | |||||||
TEMPORARY CASH INVESTMENTS - SECURITIES LENDING COLLATERAL(3) — 0.4% | ||||||||
State Street Navigator Securities Lending Government Money Market Portfolio (Cost $210,380) | 210,380 | 210,380 | ||||||
TOTAL INVESTMENT SECURITIES — 99.7% (Cost $47,145,282) | 51,375,174 | |||||||
OTHER ASSETS AND LIABILITIES — 0.3% | 132,733 | |||||||
TOTAL NET ASSETS — 100.0% | $ | 51,507,907 |
FUTURES CONTRACTS PURCHASED | ||||||||||||||
Reference Entity | Contracts | Expiration Date | Notional Amount | Unrealized Appreciation (Depreciation)^ | ||||||||||
MSCI EAFE Index | 5 | December 2020 | $ | 508,250 | $ | 40,092 |
^Amount represents value and unrealized appreciation (depreciation).
MARKET SECTOR DIVERSIFICATION | |||||
(as a % of net assets) | |||||
Financials | 30.7% | ||||
Industrials | 16.7% | ||||
Consumer Discretionary | 15.8% | ||||
Materials | 8.4% | ||||
Energy | 7.6% | ||||
Health Care | 5.2% | ||||
Communication Services | 5.2% | ||||
Utilities | 3.6% | ||||
Information Technology | 2.2% | ||||
Consumer Staples | 1.4% | ||||
Real Estate | 0.5% | ||||
Cash and Equivalents* | 2.7% |
*Includes temporary cash investments, temporary cash investments - securities lending collateral and other assets and liabilities.
14
NOTES TO SCHEDULE OF INVESTMENTS | ||||||||
ADR | - | American Depositary Receipt |
† Category is less than 0.05% of total net assets.
(1)Non-income producing.
(2)Security, or a portion thereof, is on loan. At the period end, the aggregate value of securities on loan was $206,203. The amount of securities on loan indicated may not correspond with the securities on loan identified because securities with pending sales are in the process of recall from the brokers.
(3)Investment of cash collateral from securities on loan. At the period end, the aggregate value of the collateral held by the fund was $217,531, which includes securities collateral of $7,151.
See Notes to Financial Statements.
15
Statement of Assets and Liabilities |
NOVEMBER 30, 2020 | |||||
Assets | |||||
Investment securities, at value (cost of $46,934,902) — including $206,203 of securities on loan | $ | 51,164,794 | |||
Investment made with cash collateral received for securities on loan, at value (cost of $210,380) | 210,380 | ||||
Total investment securities, at value (cost of $47,145,282) | 51,375,174 | ||||
Foreign currency holdings, at value (cost of $4,334) | 4,335 | ||||
Deposits with broker for futures contracts | 39,600 | ||||
Receivable for investments sold | 49,863 | ||||
Receivable for capital shares sold | 57,986 | ||||
Dividends and interest receivable | 276,782 | ||||
Securities lending receivable | 188 | ||||
51,803,928 | |||||
Liabilities | |||||
Payable for collateral received for securities on loan | 210,380 | ||||
Payable for capital shares redeemed | 31,280 | ||||
Payable for variation margin on futures contracts | 12,675 | ||||
Accrued management fees | 39,379 | ||||
Distribution and service fees payable | 2,307 | ||||
296,021 | |||||
Net Assets | $ | 51,507,907 | |||
Net Assets Consist of: | |||||
Capital (par value and paid-in surplus) | $ | 54,910,099 | |||
Distributable earnings | (3,402,192) | ||||
$ | 51,507,907 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | |||||||||
Investor Class, $0.01 Par Value | $12,633,001 | 1,615,289 | $7.82 | ||||||||
I Class, $0.01 Par Value | $29,898,203 | 3,828,411 | $7.81 | ||||||||
A Class, $0.01 Par Value | $6,175,716 | 785,329 | $7.86* | ||||||||
C Class, $0.01 Par Value | $926,045 | 118,436 | $7.82 | ||||||||
R Class, $0.01 Par Value | $847,982 | 108,335 | $7.83 | ||||||||
R6 Class, $0.01 Par Value | $1,026,960 | 131,489 | $7.81 |
*Maximum offering price $8.34 (net asset value divided by 0.9425).
See Notes to Financial Statements.
16
Statement of Operations |
YEAR ENDED NOVEMBER 30, 2020 | |||||
Investment Income (Loss) | |||||
Income: | |||||
Dividends (net of foreign taxes withheld of $120,366) | $ | 1,484,814 | |||
Securities lending, net | 7,429 | ||||
Interest | 2,969 | ||||
1,495,212 | |||||
Expenses: | |||||
Management fees | 484,326 | ||||
Distribution and service fees: | |||||
A Class | 14,400 | ||||
C Class | 10,192 | ||||
R Class | 3,575 | ||||
Directors' fees and expenses | 1,407 | ||||
Other expenses | 612 | ||||
514,512 | |||||
Fees waived(1) | (2,887) | ||||
511,625 | |||||
Net investment income (loss) | 983,587 | ||||
Realized and Unrealized Gain (Loss) | |||||
Net realized gain (loss) on: | |||||
Investment transactions | (1,245,984) | ||||
Futures contract transactions | 40,126 | ||||
Foreign currency translation transactions | (3,063) | ||||
(1,208,921) | |||||
Change in net unrealized appreciation (depreciation) on: | |||||
Investments | 3,464,458 | ||||
Futures contracts | 40,092 | ||||
Translation of assets and liabilities in foreign currencies | 16,487 | ||||
3,521,037 | |||||
Net realized and unrealized gain (loss) | 2,312,116 | ||||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 3,295,703 |
(1)Amount consists of $734, $1,331, $386, $72, $46 and $318 for Investor Class, I Class, A Class, C Class, R Class and R6 Class, respectively.
See Notes to Financial Statements.
17
Statement of Changes in Net Assets |
YEARS ENDED NOVEMBER 30, 2020 AND NOVEMBER 30, 2019 | ||||||||
Increase (Decrease) in Net Assets | November 30, 2020 | November 30, 2019 | ||||||
Operations | ||||||||
Net investment income (loss) | $ | 983,587 | $ | 1,307,907 | ||||
Net realized gain (loss) | (1,208,921) | (3,173,890) | ||||||
Change in net unrealized appreciation (depreciation) | 3,521,037 | 3,143,711 | ||||||
Net increase (decrease) in net assets resulting from operations | 3,295,703 | 1,277,728 | ||||||
Distributions to Shareholders | ||||||||
From earnings: | ||||||||
Investor Class | (330,222) | (403,529) | ||||||
I Class | (669,104) | (357,536) | ||||||
A Class | (164,627) | (258,329) | ||||||
C Class | (17,023) | (49,480) | ||||||
R Class | (14,529) | (19,023) | ||||||
R6 Class | (218,419) | (577,763) | ||||||
Decrease in net assets from distributions | (1,413,924) | (1,665,660) | ||||||
Capital Share Transactions | ||||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | 6,489,456 | (1,950,464) | ||||||
Net increase (decrease) in net assets | 8,371,235 | (2,338,396) | ||||||
Net Assets | ||||||||
Beginning of period | 43,136,672 | 45,475,068 | ||||||
End of period | $ | 51,507,907 | $ | 43,136,672 |
See Notes to Financial Statements.
18
Notes to Financial Statements |
NOVEMBER 30, 2020
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, I Class, A Class, C Class, R Class and 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.
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 (NAV) 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 NAV per share. Repurchase agreements are valued at cost, which approximates fair value. Exchange-traded futures contracts are valued at the settlement price as provided by the appropriate exchange.
If the fund determines that the market price for an investment is not readily available or the valuation methods mentioned above do not reflect an investment’s fair value, such investment is valued as determined in good faith by the Board of Directors or its delegate, in accordance with policies and procedures adopted by the Board of Directors. In its determination of fair value, the fund may review several factors including, but not limited to, market information regarding the specific investment or comparable investments and correlation with other investment types, futures indices or general market indicators. Circumstances that may cause the fund to use these procedures to value an investment include, but are not limited to: an investment has been declared in default or is distressed; trading in a security has been suspended during the trading day or a security is not actively trading on its principal exchange; prices received from a regular pricing source are deemed unreliable; or there is a foreign market holiday and no trading occurred.
19
The fund monitors for significant events occurring after the close of an investment’s primary exchange but before the fund’s NAV 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. 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. Securities lending income is net of fees and rebates earned by the lending agent for its services.
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.
Segregated Assets — In accordance with the 1940 Act, the fund segregates assets on its books and records to cover certain types of investment securities and other financial instruments. ACIM monitors, on a daily basis, the securities segregated to ensure the fund designates a sufficient amount of liquid assets, marked-to-market daily. The fund may also receive assets or be required to pledge assets at the custodian bank or with a broker for collateral requirements.
Income Tax Status — It is the fund’s policy to distribute substantially all net investment income and net realized gains to shareholders and to otherwise qualify as a regulated investment company under provisions of the Internal Revenue Code. Accordingly, no provision has been made for income taxes. The fund files U.S. federal, state, local and non-U.S. tax returns as applicable. The fund's tax returns are subject to examination by the relevant taxing authority until expiration of the applicable statute of limitations, which is generally three years from the date of filing but can be longer in certain jurisdictions. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination and for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
20
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 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.
Securities Lending — Securities are lent to qualified financial institutions and brokers. State Street Bank & Trust Co. serves as securities lending agent to the fund pursuant to a Securities Lending Agreement. The lending of securities exposes the fund to risks such as: the borrowers may fail to return the loaned securities, the borrowers may not be able to provide additional collateral, the fund may experience delays in recovery of the loaned securities or delays in access to collateral, or the fund may experience losses related to the investment collateral. To minimize certain risks, loan counterparties pledge collateral in the form of cash and/or securities. The lending agent has agreed to indemnify the fund in the case of default of any securities borrowed. Cash collateral received is invested in the State Street Navigator Securities Lending Government Money Market Portfolio, a money market mutual fund registered under the 1940 Act. The loans may also be secured by U.S. government securities in an amount at least equal to the market value of the securities loaned, plus accrued interest and dividends, determined on a daily basis and adjusted accordingly. By lending securities, the fund seeks to increase its net investment income through the receipt of interest and fees. Such income is reflected separately within the Statement of Operations. The value of loaned securities and related collateral outstanding at period end, if any, are shown on a gross basis within the Schedule of Investments and Statement of Assets and Liabilities.
The following table reflects a breakdown of transactions accounted for as secured borrowings, the gross obligation by the type of collateral pledged, and the remaining contractual maturity of those transactions as of November 30, 2020.
Remaining Contractual Maturity of Agreements | |||||||||||||||||
Overnight and Continuous | <30 days | Between 30 & 90 days | >90 days | Total | |||||||||||||
Securities Lending Transactions(1) | |||||||||||||||||
Common Stocks | $ | 210,380 | — | — | — | $ | 210,380 | ||||||||||
Gross amount of recognized liabilities for securities lending transactions | $ | 210,380 |
(1)Amount represents the payable for cash collateral received for securities on loan. This will generally be in the Overnight and Continuous column as the securities are typically callable on demand.
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.
21
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 ACIM will pay all expenses of managing and operating the fund, except brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), extraordinary expenses, and expenses incurred in connection with the provision of shareholder services and distribution services under a plan adopted pursuant to Rule 12b-1 under the 1940 Act. The fee is computed and accrued daily based on each class's daily net assets and paid monthly in arrears. The difference in the fee among the classes is a result of their separate arrangements for non-Rule 12b-1 shareholder services. It is not the result of any difference in advisory or custodial fees or other expenses related to the management of the fund’s assets, which do not vary by class. From December 1, 2019 through July 31, 2020, the rate of the fee was determined by applying a fee rate calculation formula. This formula took into account the fund’s assets as well as certain assets, if any, of other clients of the investment advisor outside the American Century Investments family of funds (such as subadvised funds and separate accounts) that use very similar investment teams and strategies (strategy assets). The strategy assets of the fund also included the assets of NT International Value Fund, one fund in a series issued by the corporation. The annual management fee schedule ranged from 1.100% to 1.300% for the Investor Class, A Class, C Class and R Class. The annual management fee schedule ranged from 0.900% to 1.100% for the I Class and 0.750% to 0.950% for the R6 Class. From December 1, 2019 through July 31, 2020, the investment advisor agreed to waive 0.01% of the fund’s management fee. Effective August 1, 2020, the stepped annual management fee schedule and the waiver were terminated. The annual management fee is 1.10% for the Investor Class, A Class, C Class and R Class, 0.90% for the I Class and 0.75% for the R6 Class.
The effective annual management fee before and after waiver for each class for the period ended November 30, 2020 are as follows:
Effective Annual Management Fee | ||||||||
Before Waiver | After Waiver | |||||||
Investor Class | 1.22% | 1.21% | ||||||
I Class | 1.02% | 1.01% | ||||||
A Class | 1.22% | 1.21% | ||||||
C Class | 1.22% | 1.21% | ||||||
R Class | 1.22% | 1.21% | ||||||
R6 Class | 0.87% | 0.86% |
Distribution and Service Fees — The Board of Directors has adopted a separate Master Distribution and Individual Shareholder Services Plan for each of the A Class, C Class and R Class (collectively the plans), pursuant to Rule 12b-1 of the 1940 Act. The plans provide that the A Class will pay ACIS an annual distribution and service fee of 0.25%. The plans provide that the C Class will pay ACIS an annual distribution and service fee of 1.00%, of which 0.25% is paid for individual shareholder services and 0.75% is paid for distribution services. The plans provide that the R Class will pay ACIS an annual distribution and service fee of 0.50%. The fees are computed and accrued daily based on each class’s daily net assets and paid monthly in arrears. The fees are used to pay financial intermediaries for distribution and individual shareholder services. Fees incurred under the plans during the period ended November 30, 2020 are detailed in the Statement of Operations.
Directors' Fees and Expenses — The Board of Directors is responsible for overseeing the investment advisor’s management and operations of the fund. The directors receive detailed information about the fund and its investment advisor regularly throughout the year, and meet at least quarterly with management of the investment advisor to review reports about fund operations. The fund’s officers do not receive compensation from the fund.
Interfund Transactions — The fund may enter into security transactions with other American Century Investments funds and other client accounts of the investment advisor, in accordance with the 1940 Act rules and procedures adopted by the Board of Directors. The rules and procedures require, among other things, that these transactions be effected at the independent current market price of the security. During the period, the interfund purchases were $198,745 and there were no interfund sales.
22
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the period ended November 30, 2020 were $45,366,550 and $39,431,549, respectively.
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Year ended November 30, 2020 | Year ended November 30, 2019 | |||||||||||||
Shares | Amount | Shares | Amount | |||||||||||
Investor Class/Shares Authorized | 40,000,000 | 40,000,000 | ||||||||||||
Sold | 1,009,982 | $ | 7,521,588 | 150,004 | $ | 1,109,245 | ||||||||
Issued in reinvestment of distributions | 46,745 | 321,514 | 53,047 | 390,556 | ||||||||||
Redeemed | (648,246) | (4,522,731) | (441,896) | (3,294,374) | ||||||||||
408,481 | 3,320,371 | (238,845) | (1,794,573) | |||||||||||
I Class/Shares Authorized | 40,000,000 | 40,000,000 | ||||||||||||
Sold | 1,655,973 | 11,355,643 | 1,802,912 | 13,322,365 | ||||||||||
Issued in reinvestment of distributions | 96,273 | 669,104 | 48,412 | 357,536 | ||||||||||
Redeemed | (430,511) | (3,029,441) | (320,303) | (2,383,740) | ||||||||||
1,321,735 | 8,995,306 | 1,531,021 | 11,296,161 | |||||||||||
A Class/Shares Authorized | 30,000,000 | 30,000,000 | ||||||||||||
Sold | 43,931 | 312,511 | 29,026 | 218,600 | ||||||||||
Issued in reinvestment of distributions | 23,249 | 164,079 | 34,759 | 257,913 | ||||||||||
Redeemed | (141,618) | (1,033,880) | (206,057) | (1,544,282) | ||||||||||
(74,438) | (557,290) | (142,272) | (1,067,769) | |||||||||||
C Class/Shares Authorized | 30,000,000 | 30,000,000 | ||||||||||||
Sold | 7,452 | 55,084 | 11,743 | 88,541 | ||||||||||
Issued in reinvestment of distributions | 2,374 | 16,902 | 6,595 | 48,966 | ||||||||||
Redeemed | (77,824) | (542,937) | (126,994) | (941,805) | ||||||||||
(67,998) | (470,951) | (108,656) | (804,298) | |||||||||||
R Class/Shares Authorized | 30,000,000 | 30,000,000 | ||||||||||||
Sold | 49,675 | 350,364 | 15,219 | 112,965 | ||||||||||
Issued in reinvestment of distributions | 2,089 | 14,495 | 2,572 | 18,972 | ||||||||||
Redeemed | (19,547) | (127,277) | (30,281) | (231,260) | ||||||||||
32,217 | 237,582 | (12,490) | (99,323) | |||||||||||
R6 Class/Shares Authorized | 45,000,000 | 45,000,000 | ||||||||||||
Sold | 363,258 | 2,504,184 | 510,546 | 3,776,617 | ||||||||||
Issued in reinvestment of distributions | 31,120 | 218,419 | 79,224 | 577,763 | ||||||||||
Redeemed | (1,122,203) | (7,758,165) | (1,891,164) | (13,835,042) | ||||||||||
(727,825) | (5,035,562) | (1,301,394) | (9,480,662) | |||||||||||
Net increase (decrease) | 892,172 | $ | 6,489,456 | (272,636) | $ | (1,950,464) |
23
6. Fair Value Measurements
The fund’s investments valuation process is based on several considerations and may use multiple inputs to determine the fair value of the investments held by the fund. In conformity with accounting principles generally accepted in the United States of America, the inputs used to determine a valuation are classified into three broad levels.
•Level 1 valuation inputs consist of unadjusted quoted prices in an active market for identical investments.
•Level 2 valuation inputs consist of direct or indirect observable market data (including quoted prices for comparable investments, evaluations of subsequent market events, interest rates, prepayment speeds, credit risk, etc.). These inputs also consist of quoted prices for identical investments initially expressed in local currencies that are adjusted through translation into U.S. dollars.
•Level 3 valuation inputs consist of unobservable data (including a fund’s own assumptions).
The level classification is based on the lowest level input that is significant to the fair valuation measurement. The valuation inputs are not necessarily an indication of the risks associated with investing in these securities or other financial instruments.
The following is a summary of the level classifications as of period end. The Schedule of Investments provides additional information on the fund’s portfolio holdings.
Level 1 | Level 2 | Level 3 | |||||||||
Assets | |||||||||||
Investment Securities | |||||||||||
Common Stocks | $ | 151,254 | $ | 49,977,054 | — | ||||||
Rights | — | 6,338 | — | ||||||||
Warrants | — | 384 | — | ||||||||
Temporary Cash Investments | 26 | 1,029,738 | — | ||||||||
Temporary Cash Investments - Securities Lending Collateral | 210,380 | — | — | ||||||||
$ | 361,660 | $ | 51,013,514 | — | |||||||
Other Financial Instruments | |||||||||||
Futures Contracts | $ | 40,092 | — | — |
7. Derivative Instruments
Equity Price Risk — The fund is subject to equity price risk in the normal course of pursuing its investment objectives. A fund may enter into futures contracts based on an equity index in order to manage its exposure to changes in market conditions. A fund may purchase futures contracts to gain exposure to increases in market value or sell futures contracts to protect against a decline in market value. Upon entering into a futures contract, a fund is required to deposit either cash or securities in an amount equal to a certain percentage of the contract value (initial margin). Subsequent payments (variation margin) are made or received daily, in cash, by a fund. The variation margin is equal to the daily change in the contract value and is recorded as unrealized gains and losses. A fund recognizes a realized gain or loss when the contract is closed or expires. Net realized and unrealized gains or losses occurring during the holding period of futures contracts are a component of net realized gain (loss) on futures contract transactions and change in net unrealized appreciation (depreciation) on futures contracts, respectively. One of the risks of entering into futures contracts is the possibility that the change in value of the contract may not correlate with the changes in value of the underlying securities. The fund's average notional exposure to equity price risk derivative instruments held during the period was $580,528 futures contracts purchased.
The value of equity price risk derivative instruments as of November 30, 2020, is disclosed on the Statement of Assets and Liabilities as a liability of $12,675 in payable for variation margin on futures contracts.* For the year ended November 30, 2020, the effect of equity price risk derivative instruments on the Statement of Operations was $40,126 in net realized gain (loss) on futures contract transactions and $40,092 in change in net unrealized appreciation (depreciation) on futures contracts.
* Included in the unrealized appreciation (depreciation) on futures contracts as reported in the Schedule of Investments.
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8. Risk Factors
The value of the fund’s shares will go up and down, sometimes rapidly or unpredictably, based on the performance of the securities owned by the fund and other factors generally affecting the securities market. Market risks, including political, regulatory, economic and social developments, can affect the value of the fund’s investments. Natural disasters, public health emergencies, terrorism and other unforeseeable events may lead to increased market volatility and may have adverse long-term effects on world economies and markets generally.
There are certain risks involved in investing in foreign securities. These risks include those resulting from political events (such as civil unrest, national elections and imposition of exchange controls), social and economic events (such as labor strikes and rising inflation), and natural disasters. Securities of foreign issuers may be less liquid and more volatile. Investing in emerging markets or a significant portion of assets in one country or region 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.
9. Federal Tax Information
The tax character of distributions paid during the years ended November 30, 2020 and November 30, 2019 were as follows:
2020 | 2019 | |||||||
Distributions Paid From | ||||||||
Ordinary income | $ | 1,413,924 | $ | 1,665,660 | ||||
Long-term capital gains | — | — |
The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
As of period end, the federal tax cost of investments and the components of distributable earnings on a tax-basis were as follows:
Federal tax cost of investments | $ | 47,662,856 | |||
Gross tax appreciation of investments | $ | 6,171,574 | |||
Gross tax depreciation of investments | (2,459,256) | ||||
Net tax appreciation (depreciation) of investments | 3,712,318 | ||||
Net tax appreciation (depreciation) on derivatives and translation of assets and liabilities in foreign currencies | 9,710 | ||||
Net tax appreciation (depreciation) | $ | 3,722,028 | |||
Undistributed ordinary income | $ | 1,318,680 | |||
Accumulated short-term capital losses | $ | (5,086,545) | |||
Accumulated long-term capital losses | $ | (3,356,355) |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the realization to ordinary income for tax purposes of unrealized gains on investments in passive foreign investment companies.
Accumulated capital losses 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.
25
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 | |||||||||||||||||||||||||||||||||||||||||
2020 | $7.57 | 0.15 | 0.33 | 0.48 | (0.23) | $7.82 | 6.69% | 1.21% | 1.22% | 2.16% | 2.15% | 91% | $12,633 | ||||||||||||||||||||||||||||
2019 | $7.61 | 0.23 | 0.02 | 0.25 | (0.29) | $7.57 | 3.41% | 1.34% | 1.34% | 3.13% | 3.13% | 87% | $9,136 | ||||||||||||||||||||||||||||
2018 | $8.96 | 0.21 | (1.27) | (1.06) | (0.29) | $7.61 | (12.25)% | 1.30% | 1.30% | 2.56% | 2.56% | 80% | $11,008 | ||||||||||||||||||||||||||||
2017 | $7.40 | 0.21 | 1.51 | 1.72 | (0.16) | $8.96 | 23.59% | 1.30% | 1.30% | 2.47% | 2.47% | 101% | $14,398 | ||||||||||||||||||||||||||||
2016 | $7.83 | 0.20 | (0.45) | (0.25) | (0.18) | $7.40 | (3.15)% | 1.31% | 1.31% | 2.86% | 2.86% | 76% | $13,810 | ||||||||||||||||||||||||||||
I Class | |||||||||||||||||||||||||||||||||||||||||
2020 | $7.57 | 0.16 | 0.33 | 0.49 | (0.25) | $7.81 | 6.93% | 1.01% | 1.02% | 2.36% | 2.35% | 91% | $29,898 | ||||||||||||||||||||||||||||
2019 | $7.62 | 0.25 | 0.01 | 0.26 | (0.31) | $7.57 | 3.53% | 1.14% | 1.14% | 3.33% | 3.33% | 87% | $18,981 | ||||||||||||||||||||||||||||
2018 | $8.97 | 0.22 | (1.26) | (1.04) | (0.31) | $7.62 | (12.05)% | 1.10% | 1.10% | 2.76% | 2.76% | 80% | $7,434 | ||||||||||||||||||||||||||||
2017 | $7.41 | 0.23 | 1.51 | 1.74 | (0.18) | $8.97 | 23.86% | 1.10% | 1.10% | 2.67% | 2.67% | 101% | $4,173 | ||||||||||||||||||||||||||||
2016 | $7.84 | 0.22 | (0.45) | (0.23) | (0.20) | $7.41 | (2.99)% | 1.11% | 1.11% | 3.06% | 3.06% | 76% | $7,300 |
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 | |||||||||||||||||||||||||||||||||||||||||
2020 | $7.60 | 0.13 | 0.33 | 0.46 | (0.20) | $7.86 | 6.32% | 1.46% | 1.47% | 1.91% | 1.90% | 91% | $6,176 | ||||||||||||||||||||||||||||
2019 | $7.64 | 0.22 | 0.01 | 0.23 | (0.27) | $7.60 | 3.08% | 1.59% | 1.59% | 2.88% | 2.88% | 87% | $6,532 | ||||||||||||||||||||||||||||
2018 | $8.99 | 0.19 | (1.27) | (1.08) | (0.27) | $7.64 | (12.43)% | 1.55% | 1.55% | 2.31% | 2.31% | 80% | $7,651 | ||||||||||||||||||||||||||||
2017 | $7.41 | 0.17 | 1.55 | 1.72 | (0.14) | $8.99 | 23.45% | 1.55% | 1.55% | 2.22% | 2.22% | 101% | $9,857 | ||||||||||||||||||||||||||||
2016 | $7.85 | 0.18 | (0.45) | (0.27) | (0.17) | $7.41 | (3.46)% | 1.56% | 1.56% | 2.61% | 2.61% | 76% | $11,029 | ||||||||||||||||||||||||||||
C Class | |||||||||||||||||||||||||||||||||||||||||
2020 | $7.51 | 0.07 | 0.34 | 0.41 | (0.10) | $7.82 | 5.65% | 2.21% | 2.22% | 1.16% | 1.15% | 91% | $926 | ||||||||||||||||||||||||||||
2019 | $7.54 | 0.16 | 0.01 | 0.17 | (0.20) | $7.51 | 2.29% | 2.34% | 2.34% | 2.13% | 2.13% | 87% | $1,400 | ||||||||||||||||||||||||||||
2018 | $8.87 | 0.13 | (1.26) | (1.13) | (0.20) | $7.54 | (13.04)% | 2.30% | 2.30% | 1.56% | 1.56% | 80% | $2,224 | ||||||||||||||||||||||||||||
2017 | $7.33 | 0.12 | 1.51 | 1.63 | (0.09) | $8.87 | 22.41% | 2.30% | 2.30% | 1.47% | 1.47% | 101% | $4,225 | ||||||||||||||||||||||||||||
2016 | $7.78 | 0.13 | (0.46) | (0.33) | (0.12) | $7.33 | (4.21)% | 2.31% | 2.31% | 1.86% | 1.86% | 76% | $3,774 | ||||||||||||||||||||||||||||
R Class | |||||||||||||||||||||||||||||||||||||||||
2020 | $7.55 | 0.12 | 0.33 | 0.45 | (0.17) | $7.83 | 6.16% | 1.71% | 1.72% | 1.66% | 1.65% | 91% | $848 | ||||||||||||||||||||||||||||
2019 | $7.58 | 0.19 | 0.02 | 0.21 | (0.24) | $7.55 | 2.91% | 1.84% | 1.84% | 2.63% | 2.63% | 87% | $575 | ||||||||||||||||||||||||||||
2018 | $8.93 | 0.18 | (1.29) | (1.11) | (0.24) | $7.58 | (12.74)% | 1.80% | 1.80% | 2.06% | 2.06% | 80% | $672 | ||||||||||||||||||||||||||||
2017 | $7.36 | 0.16 | 1.52 | 1.68 | (0.11) | $8.93 | 23.09% | 1.80% | 1.80% | 1.97% | 1.97% | 101% | $537 | ||||||||||||||||||||||||||||
2016 | $7.80 | 0.18 | (0.47) | (0.29) | (0.15) | $7.36 | (3.68)% | 1.81% | 1.81% | 2.36% | 2.36% | 76% | $448 |
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) | |||||||||||||||||||||||||||||
R6 Class | |||||||||||||||||||||||||||||||||||||||||
2020 | $7.58 | 0.18 | 0.32 | 0.50 | (0.27) | $7.81 | 7.08% | 0.86% | 0.87% | 2.51% | 2.50% | 91% | $1,027 | ||||||||||||||||||||||||||||
2019 | $7.63 | 0.26 | 0.01 | 0.27 | (0.32) | $7.58 | 3.72% | 0.99% | 0.99% | 3.48% | 3.48% | 87% | $6,513 | ||||||||||||||||||||||||||||
2018 | $8.98 | 0.26 | (1.29) | (1.03) | (0.32) | $7.63 | (11.91)% | 0.95% | 0.95% | 2.91% | 2.91% | 80% | $16,485 | ||||||||||||||||||||||||||||
2017 | $7.42 | 0.23 | 1.52 | 1.75 | (0.19) | $8.98 | 24.06% | 0.95% | 0.95% | 2.82% | 2.82% | 101% | $46,833 | ||||||||||||||||||||||||||||
2016 | $7.85 | 0.23 | (0.45) | (0.22) | (0.21) | $7.42 | (2.87)% | 0.96% | 0.96% | 3.21% | 3.21% | 76% | $23,378 |
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.
See Notes to Financial Statements.
Report of Independent Registered Public Accounting Firm |
To the Shareholders and the Board of Directors of American Century World Mutual Funds, Inc.:
Opinion on the Financial Statements and Financial Highlights
We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of International Value Fund (the “Fund”), one of the funds constituting the American Century World Mutual Funds, Inc., as of November 30, 2020, the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of International Value Fund of the American Century World Mutual Funds, Inc. as of November 30, 2020, and the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on the Fund’s financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. Our procedures included confirmation of securities owned as of November 30, 2020, by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
DELOITTE & TOUCHE LLP
Kansas City, Missouri
January 19, 2021
We have served as the auditor of one or more American Century investment companies since 1997.
29
Management |
The Board of Directors
The individuals listed below serve as directors of the funds. Each director will continue to serve in this capacity until death, retirement, resignation or removal from office. The board has adopted a mandatory retirement age for directors who are not “interested persons,” as that term is defined in the Investment Company Act (independent directors). Independent directors shall retire by December 31 of the year in which they reach their 75th birthday.
Mr. Thomas is an “interested person” because he currently serves as President and Chief Executive Officer of American Century Companies, Inc. (ACC), the parent company of American Century Investment Management, Inc. (ACIM or the advisor). The other directors (more than three-fourths of the total number) are independent. They are not employees, directors or officers of, and have no financial interest in, ACC or any of its wholly owned, direct or indirect, subsidiaries, including ACIM, American Century Investment Services, Inc. (ACIS) and American Century Services, LLC (ACS), and they do not have any other affiliations, positions or relationships that would cause them to be considered “interested persons” under the Investment Company Act. The directors serve in this capacity for seven (in the case of Jonathan S. Thomas, 16; and Stephen E. Yates, 8) registered investment companies in the American Century Investments family of funds.
The following table presents additional information about the directors. The mailing address for each director is 4500 Main Street, Kansas City, Missouri 64111.
Name (Year of Birth) | Position(s) Held with Funds | Length of Time Served | Principal Occupation(s) During Past 5 Years | Number of American Century Portfolios Overseen by Director | Other Directorships Held During Past 5 Years | ||||||||||||
Independent Directors | |||||||||||||||||
Thomas W. Bunn (1953) | Director | Since 2017 | Retired | 62 | SquareTwo Financial; Barings (formerly Babson Capital Funds Trust) (2013 to 2016) | ||||||||||||
Chris H. Cheesman (1962) | Director | Since 2019 | Retired. Senior Vice President & Chief Audit Executive, AllianceBernstein (1999 to 2018) | 62 | None | ||||||||||||
Barry Fink (1955) | Director | Since 2012 (independent since 2016) | Retired | 62 | None | ||||||||||||
Rajesh K. Gupta (1960) | Director | Since 2019 | Partner Emeritus, SeaCrest Investment Management and SeaCrest Wealth Management (2019 to Present); Chief Executive Officer and Chief Investment Officer, SeaCrest Investment Management (2006 to 2019); Chief Executive Officer and Chief Investment Officer, SeaCrest Wealth Management (2008 to 2019) | 62 | None |
30
Name (Year of Birth) | Position(s) Held with Funds | Length of Time Served | Principal Occupation(s) During Past 5 Years | Number of American Century Portfolios Overseen by Director | Other Directorships Held During Past 5 Years | ||||||||||||
Independent Directors | |||||||||||||||||
Lynn Jenkins (1963) | Director | Since 2019 | Consultant, LJ Strategies (2019 to present); United States Representative, U.S. House of Representatives (2009 to 2018) | 62 | MGP Ingredients, Inc. | ||||||||||||
Jan M. Lewis (1957) | Director | Since 2011 | Retired | 62 | None | ||||||||||||
John R. Whitten (1946) | Director | Since 2008 | Retired | 62 | Onto Innovation Inc. (2019 to 2020); Rudolph Technologies, Inc. (2006 to 2019) | ||||||||||||
Stephen E. Yates (1948) | Director and Chairman of the Board | Since 2012 (Chairman since 2018) | Retired | 87 | None | ||||||||||||
Interested Director | |||||||||||||||||
Jonathan S. Thomas (1963) | Director | Since 2007 | President and Chief Executive Officer, ACC (2007 to present). Also serves as Chief Executive Officer, ACS; Executive Vice President, ACIM; Director, ACC, ACIM and other ACC subsidiaries | 125 | None |
The Statement of Additional Information has additional information about the fund's directors and is available without charge, upon request, by calling 1-800-345-2021.
31
Officers
The following table presents certain information about the executive officers of the funds. Each officer serves as an officer for each of the 16 (in the case of Robert J. Leach, 15) investment companies in the American Century family of funds. No officer is compensated for his or her service as an officer of the funds. The listed officers are interested persons of the funds and are appointed or re-appointed on an annual basis. The mailing address for each officer listed below is 4500 Main Street, Kansas City, Missouri 64111.
Name (Year of Birth) | Offices with the Funds | Principal Occupation(s) During the Past Five Years | ||||||
Patrick Bannigan (1965) | President since 2019 | Executive Vice President and Director, ACC (2012 to present); Chief Financial Officer, Chief Accounting Officer and Treasurer, ACC (2015 to present). Also serves as President, ACS; Vice President, ACIM; Chief Financial Officer, Chief Accounting Officer and/or Director, ACIM, ACS and other ACC subsidiaries | ||||||
R. Wes Campbell (1974) | Chief Financial Officer and Treasurer since 2018 | Vice President, ACS, (2020 to present); Investment Operations and Investment Accounting, ACS (2000 to present) | ||||||
Amy D. Shelton (1964) | Chief Compliance Officer and Vice President since 2014 | Chief Compliance Officer, American Century funds, (2014 to present); Chief Compliance Officer, ACIM (2014 to present); Chief Compliance Officer, ACIS (2009 to present). Also serves as Vice President, ACIS | ||||||
Charles A. Etherington (1957) | General Counsel since 2007 and Senior Vice President since 2006 | Attorney, ACC (1994 to present); Vice President, ACC (2005 to present); General Counsel, ACC (2007 to present). Also serves as General Counsel, ACIM, ACS, ACIS and other ACC subsidiaries; and Senior Vice President, ACIM and ACS | ||||||
C. Jean Wade (1964) | Vice President since 2012 | Senior Vice President, ACS (2017 to present); Vice President, ACS (2000 to 2017) | ||||||
Robert J. Leach (1966) | Vice President since 2006 | Vice President, ACS (2000 to present) | ||||||
David H. Reinmiller (1963) | Vice President since 2000 | Attorney, ACC (1994 to present). Also serves as Vice President, ACIM and ACS | ||||||
Ward D. Stauffer (1960) | Secretary since 2005 | Attorney, ACC (2003 to present) |
32
Approval of Management Agreement |
At a meeting held on June 24, 2020, the Fund’s Board of Directors (the "Board") unanimously approved the renewal of the 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, contracts for investment advisory services are required to be reviewed, evaluated, and approved by a majority of a fund’s directors (the “Directors”), including a majority of the independent Directors, each year.
Prior to its consideration of the renewal of the management agreement, the Directors requested and reviewed extensive data and information compiled by the Advisor and certain independent providers of evaluation data concerning the Fund and the services provided to the Fund by the Advisor. This review was in addition to the oversight and evaluation undertaken by the Board and its committees on a continual basis and the information received was supplemental to the extensive information that the Board and its committees receive and consider throughout the year.
In connection with its consideration of the renewal of the management agreement, the Board’s review and evaluation of the services provided by the Advisor included, but was not limited to, the following:
•the nature, extent, and quality of investment management, shareholder services, and other services provided and to be provided to the Fund;
•the wide range of other programs and services provided and to be provided to the Fund and its shareholders on a routine and non-routine basis;
•the Fund’s investment performance, including data comparing the Fund's performance to appropriate benchmarks and/or a peer group of other mutual funds with similar investment objectives and strategies;
•the cost of owning the Fund compared to the cost of owning similar funds;
•the compliance policies, procedures, and regulatory experience of the Advisor and the Fund's service providers;
•the Advisor’s strategic plans;
•the Advisor’s business continuity plans and specifically its response to the COVID-19 pandemic;
•financial data showing the cost of services provided to the Fund, the profitability of the Fund to the Advisor, and the overall profitability of the Advisor;
•possible economies of scale associated with the Advisor’s management of the Fund and other accounts;
•services provided and charges to the Advisor's other investment management clients;
•acquired fund fees and expenses;
•payments and practices in connection with financial intermediaries holding shares of the Fund and the services provided by intermediaries in connection therewith; and
•possible collateral benefits to the Advisor from the management of the Fund.
The Board held two meetings to consider the renewal. The independent Directors also met in private session three times to review and discuss the information provided in response to their request. The independent Directors held active discussions with the Advisor regarding the renewal of the management agreement, requesting supplemental information, and reviewing information provided by the Advisor in response thereto. The independent Directors had the benefit of the advice of their independent counsel throughout the process.
Factors Considered
The Directors considered all of the information provided by the Advisor, the independent data providers, and 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
33
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. In deciding to renew the management agreement, the Board based its decision on a number of factors, including without limitation the following:
Nature, Extent and Quality of Services — Generally. Under the management agreement, the Advisor is responsible for providing or arranging for all services necessary for the operation of the Fund. The Board noted that the Advisor provides or arranges at its own expense a wide variety of services including without limitation the following:
•constructing and designing the Fund
•portfolio research and security selection
•initial capitalization/funding
•securities trading
•Fund administration
•custody of Fund assets
•daily valuation of the Fund’s portfolio
•shareholder servicing and transfer agency, including shareholder confirmations, recordkeeping, and communications
•legal services (except the independent Directors’ counsel)
•regulatory and portfolio compliance
•financial reporting
•marketing and distribution (except amounts paid by the Fund under Rule 12b-1 plans)
The Board noted that many of these services have expanded over time in terms of both quantity and complexity in response to shareholder demands, competition in the industry, changing distribution channels, and the changing regulatory environment.
Investment Management Services. The nature of the investment management services provided to the Fund is quite complex and allows Fund shareholders access to professional money management, instant diversification of their investments within an asset class, the opportunity to easily diversify among asset classes by investing in or exchanging among various American Century Investments funds, and liquidity. In evaluating investment performance, the Board expects the Advisor to manage the Fund in accordance with its investment objectives and approved strategies. Further, the Directors recognize that the Advisor has an obligation to monitor trading activities, and in particular to seek the best execution of fund trades, and to evaluate the use of and payment for research. In providing these services, the Advisor utilizes teams of investment professionals (portfolio managers, analysts, research assistants, and securities traders) who require extensive information technology, research, training, compliance, and other systems to conduct their business. The Board, directly and through its Fund Performance Review Committee, provides oversight of the investment performance process. It regularly reviews investment performance information for the Fund, together with comparative information for appropriate benchmarks and/or peer groups of similarly-managed funds, over different time horizons. The Directors also review investment performance information during the management agreement renewal process. If performance concerns are identified, the Fund receives special reviews until performance improves, during which the Board discusses with the Advisor the reasons for such results (e.g., market conditions, security selection) and any efforts being undertaken to improve performance. The Fund’s performance was above its benchmark for the ten-year period and below its benchmark for the one-, three-, and five-year periods reviewed by the Board. The Board discussed the Fund's performance with the Advisor, including steps being taken to address underperformance, and was satisfied with the efforts being undertaken by the Advisor. The Board found the investment management services provided by the Advisor to the Fund to be satisfactory and consistent with the management agreement.
Shareholder and Other Services. Under the management agreement, the Advisor provides the Fund with a comprehensive package of transfer agency, shareholder, and other services. The
34
Board, directly and through its various committees, regularly reviews reports and evaluations of such services at its regular meetings. These reports include, but are not limited to, information regarding the operational efficiency and accuracy of the shareholder and transfer agency services provided, staffing levels, shareholder satisfaction, technology support (including cyber security), new products and services offered to Fund shareholders, securities trading activities, portfolio valuation services, auditing services, and legal and operational compliance activities. The Board found the services provided by the Advisor to the Fund under the management agreement to be competitive and of high quality.
COVID-19 Response. During 2020, much of the world experienced unprecedented change and challenges from the impacts of the rapidly evolving, worldwide spread of the COVID-19 virus. The Board evaluated the Advisor’s response to the COVID-19 pandemic and its impact on service to the Fund. The Board found that Fund shareholders have continued to receive the Advisor’s investment management and other services without disruption, and Advisor personnel have demonstrated great resiliency in providing those services. The Board, directly and through its Audit Committee, continues to monitor the impact of the pandemic and the response of each of the Fund’s service providers.
Costs of Services and Profitability. The Advisor provides detailed information concerning its cost of providing various services to the Fund, its profitability in managing the Fund (pre- and post-distribution), its overall profitability, and its financial condition. The Directors have reviewed with the Advisor the methodology used to prepare this financial information. This information is considered in evaluating the Advisor’s financial condition, its ability to continue to provide services under the management agreement, and the reasonableness of the current management fee. The Board concluded that the Advisor’s profits were reasonable in light of the services provided to the Fund.
Ethics. The Board generally considers the Advisor’s commitment to providing quality services to shareholders and to conducting its business ethically. They noted that the Advisor’s practices generally meet or exceed industry best practices.
Economies of Scale. The Board also reviewed information provided by the Advisor regarding the possible existence of economies of scale in connection with the management of the Fund. The Board concluded that economies of scale are difficult to measure and predict with precision, especially on a fund-by-fund basis. The Board concluded that the Advisor is appropriately sharing economies of scale, to the extent they exist, through its competitive fee structure, offering competitive fees from fund inception, and through reinvestment in its business, infrastructure, investment capabilities and initiatives to provide shareholders additional content and services.
Comparison to Other Funds’ Fees. The management agreement provides that the Fund pays the Advisor a single, all-inclusive (or unified) management fee for providing all services necessary for the management and operation of the Fund, other than brokerage expenses, expenses attributable to short sales, taxes, interest, extraordinary expenses, fees and expenses of the Fund’s independent Directors (including their independent legal counsel), and expenses incurred in connection with the provision of shareholder services and distribution services under a plan adopted pursuant to Rule 12b-1 under the Investment Company Act. 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 any applicable Rule 12b-1 distribution fees, all other components of the total fees charged by these other funds may be increased without shareholder approval. The Board believes the unified fee structure is a benefit to Fund shareholders because it clearly discloses to shareholders the cost of owning Fund shares, and, since 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
35
involves reviewing certain evaluative data compiled by an independent provider comparing the Fund’s unified fee to the total expense ratios of its peers. The unified fee charged to shareholders of the Fund was above the median of the total expense ratios of the Fund’s peer expense universe and was within the range of its peer expense group.The Board and the Advisor agreed to a permanent change to the Fund's fee schedule that should have the effect of lowering the Fund's annual unified management fee by approximately 0.19% to 1.10%, beginning August 1, 2020. The Board concluded that the management fee paid by the Fund to the Advisor under the management agreement is reasonable in light of the services provided to the Fund.
Comparison to Fees and Services Provided to Other Clients of the Advisor. The Board also requested and received information from the Advisor concerning the nature of the services, fees, costs, and profitability of its advisory services to advisory clients other than the Fund. They observed that these varying types of client accounts require different services and involve different regulatory and entrepreneurial risks than the management of the Fund. The Board analyzed this information and concluded that the fees charged and services provided to the Fund were reasonable by comparison.
Payments to Intermediaries. The Directors also requested and received a description of payments made to intermediaries by the Fund and the Advisor and services provided in response thereto. These payments include various payments made by the Fund or the Advisor to different types of intermediaries and recordkeepers for distribution and service activities provided for the Fund. The Directors reviewed such information and received representations from the Advisor that all such payments by the Fund were made pursuant to the Fund's Rule 12b-1 Plan and that all such payments by the Advisor were made from the Advisor’s resources and reasonable profits. The Board found such payments to be reasonable in scope and purpose.
Collateral or “Fall-Out” Benefits Derived by the Advisor. The Board considered the possible existence of collateral benefits the Advisor may receive as a result of its relationship with the Fund. They concluded that the Advisor’s primary business is managing mutual funds and it generally does not use fund or shareholder information to generate profits in other lines of business, and therefore does not derive any significant collateral benefits from them. To the extent there are potential collateral benefits, the board has been advised and has taken this into consideration in its review of the management contract with the Fund. The Board noted that additional assets from other clients may offer the Advisor some benefit from increased leverage with service providers and counterparties. Additionally, the Advisor may receive proprietary research from broker-dealers that execute fund portfolio transactions, which the Board concluded is likely to benefit other clients of the Advisor, as well as Fund shareholders. The Board also determined that the Advisor is able to provide investment management services to certain clients other than the Fund, at least in part, due to its existing infrastructure built to serve the fund complex. The Board concluded that appropriate allocation methodologies had been employed to assign resources and the cost of those resources to these other clients.
Existing Relationship. The Board also considered whether there was any reason for not continuing the existing arrangement with the Advisor. In this regard, the Board was mindful of the potential disruptions of the Fund’s operations and various risks, uncertainties, and other effects that could occur as a result of a decision not to continue such relationship. In particular, the Board recognized that most shareholders have invested in the Fund on the strength of the Advisor’s industry standing and reputation and in the expectation that the Advisor will have a continuing role in providing advisory services to the Fund.
Conclusion of the Directors. As a result of this process, the Board, including all of the independent Directors, taking into account all of the factors discussed above and the information provided by the Advisor and others in connection with its review and throughout the year, determined that the management fee is fair and reasonable in light of the services provided and that the investment management agreement between the Fund and the Advisor should be renewed.
36
Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain retirement accounts are subject to federal income tax withholding, unless you elect not to have withholding apply*. Tax will be withheld on the total amount withdrawn even though you may be receiving amounts that are not subject to withholding, such as nondeductible contributions. In such case, excess amounts of withholding could occur. You may adjust your withholding election so that a greater or lesser amount will be withheld.
If you don’t want us to withhold on this amount, you must notify us to not withhold the federal income tax. You may notify us in writing or in certain situations by telephone or through other electronic means. For systematic withdrawals, your withholding election will remain in effect until revoked or changed by filing a new election. You have the right to revoke your election at any time and change your withholding percentage for future distributions.
Remember, even if you elect not to have income tax withheld, you are liable for paying income tax on the taxable portion of your withdrawal. If you elect not to have income tax withheld or you don’t have enough income tax withheld, you may be responsible for payment of estimated tax. You may incur penalties under the estimated tax rules if your withholding and estimated tax payments are not sufficient. You can reduce or defer the income tax on a distribution by directly or indirectly rolling such distribution over to another IRA or eligible plan. You should consult your tax advisor for additional information.
State tax will be withheld if, at the time of your distribution, your address is within one of the mandatory withholding states and you have federal income tax withheld (or as otherwise required by state law). State taxes will be withheld from your distribution in accordance with the respective state rules.
*Some 403(b), 457 and qualified retirement plan distributions may be subject to 20% mandatory withholding, as they are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
A description of the policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund is available without charge, upon request, by calling 1-800-345-2021. It is also available on American Century Investments’ website at americancentury.com/proxy 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 americancentury.com/proxy. 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 as an exhibit to its reports on
Form N-PORT. The fund’s Form N-PORT reports are available on the SEC’s website at sec.gov.
The fund also makes its complete schedule of portfolio holdings for the most recent quarter of its
fiscal year available on its website at americancentury.com and, upon request, by calling
1-800-345-2021.
37
Other Tax Information
The following information is provided pursuant to provisions of the Internal Revenue Code.
The fund hereby designates up to the maximum amount allowable as qualified dividend income for the fiscal year ended November 30, 2020.
For the fiscal year ended November 30, 2020, the fund intends to pass through to shareholders foreign source income of $1,559,896 and foreign taxes paid of $108,473, or up to the maximum amount allowable, as a foreign tax credit. Foreign source income and foreign tax expense per outstanding share on November 30, 2020 are $0.2368 and $0.0165, respectively.
38
Notes |
39
Notes |
40
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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. | ||||||||
©2021 American Century Proprietary Holdings, Inc. All rights reserved. CL-ANN-91029 2101 |
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Annual Report | |||||
November 30, 2020 | |||||
Non-U.S. Intrinsic Value Fund | |||||
Investor Class (ANTUX) | |||||
I Class (ANVHX) | |||||
A Class (ANVLX) | |||||
R Class (ANVRX) | |||||
R6 Class (ANVMX) | |||||
G Class (ANTGX) |
Table of Contents |
President’s Letter | |||||
Performance | |||||
Portfolio Commentary | |||||
Fund Characteristics | |||||
Shareholder Fee Example | |||||
Schedule of Investments | |||||
Statement of Assets and Liabilities | |||||
Statement of Operations | |||||
Statement of Changes in Net Assets | |||||
Notes to Financial Statements | |||||
Financial Highlights | |||||
Report of Independent Registered Public Accounting Firm | |||||
Management | |||||
Approval of Management Agreement | |||||
Additional Information |
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 |
![image141.jpg](https://capedge.com/proxy/N-CSR/0000872825-21-000006/image141.jpg)
Dear Investor:
Thank you for reviewing this annual report for the period ended November 30, 2020. Annual reports help convey important information about fund returns, including market factors that affected performance. For additional investment insights, please visit americancentury.com.
Stocks Recovered from Pandemic-Fueled Sell-Off
In late 2019, broad market sentiment was generally upbeat. Dovish central banks in developed markets, modest inflation, improving economic and corporate earnings data, and progress on U.S.-China trade policy helped boost global growth outlooks. Against this backdrop, riskier assets generally remained in favor.
However, beginning in late February, the COVID-19 outbreak rapidly spread worldwide, halting most economic activity and triggering a deep global recession. Global stocks sold off sharply amid a widespread flight to safety. Quick and aggressive action from the Federal Reserve and other central banks and federal governments helped stabilize and restore confidence in the financial markets. By summer, declining coronavirus infection and death rates in many regions and the reopening of economies were positive influences. By the end of November, most data suggested economies were recovering. But at the same time, COVID-19 infection rates were rising in the U.S. and Europe, prompting new lockdown measures that threatened the economic recovery.
Overall, global stocks overcame the effects of the early 2020 sell-off to deliver solid gains for the 12-month period. Emerging markets stocks rallied and outperformed developed markets stocks, while growth stocks significantly outpaced value stocks worldwide.
Science Helps Steer the Return to Normal
The return to pre-pandemic life will take time and patience, but we are confident we will get there. The first COVID-19 vaccine is now approved and in limited distribution, and medical professionals continue to develop better treatment protocols. Until the vaccine is widely available, investors likely will face periods of outbreak-related disruptions, economic uncertainty and heightened market volatility. These influences can be unsettling, but they tend to be temporary.
We appreciate your confidence in us during these extraordinary times. Our firm has a long history of helping clients weather unpredictable markets, and we’re confident we will continue to meet today’s challenges.
Sincerely,
![image231.jpg](https://capedge.com/proxy/N-CSR/0000872825-21-000006/image231.jpg)
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
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Performance |
Total Returns as of November 30, 2020 | ||||||||||||||
Average Annual Returns | ||||||||||||||
Ticker Symbol | 1 year | Since Inception | Inception Date | |||||||||||
Investor Class | ANTUX | -11.75% | -3.04% | 12/6/18 | ||||||||||
MSCI ACWI ex-U.S. Index | — | 9.52% | 11.85% | — | ||||||||||
I Class | ANVHX | — | -10.29% | 12/3/19 | ||||||||||
A Class | ANVLX | 12/3/19 | ||||||||||||
No sales charge | — | -10.62% | ||||||||||||
With sales charge | — | -15.77% | ||||||||||||
R Class | ANVRX | — | -10.93% | 12/3/19 | ||||||||||
R6 Class | ANVMX | — | -10.12% | 12/3/19 | ||||||||||
G Class | ANTGX | -10.58% | -1.74% | 12/6/18 |
G Class returns would have been lower if a portion of the fees had not been waived.
Sales charges include initial sales charges and contingent deferred sales charges (CDSCs), as applicable. A Class shares have a 5.75% maximum initial sales charge and may be subject to a maximum CDSC of 1.00%. The SEC requires that mutual funds provide performance information net of maximum sales charges in all cases where charges could be applied.
Data presented reflect past performance. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance shown. Total returns for periods less than one year are not annualized. Investment return and principal value will fluctuate, and redemption value may be more or less than original cost. Data assumes reinvestment of dividends and capital gains, and none of the charts reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. To obtain performance data current to the most recent month end, please call 1-800-345-2021 or visit americancentury.com. For additional information about the fund, please consult the prospectus.
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Growth of $10,000 Over Life of Class | ||
$10,000 investment made December 6, 2018 | ||
Performance for other share classes will vary due to differences in fee structure. |
![chart-08a0ae8bac4e45eb98f1.jpg](https://capedge.com/proxy/N-CSR/0000872825-21-000006/chart-08a0ae8bac4e45eb98f1.jpg)
Value on November 30, 2020 | |||||
Investor Class — $9,406 | |||||
MSCI ACWI ex-U.S. Index — $12,491 | |||||
Total Annual Fund Operating Expenses | |||||||||||||||||
Investor Class | I Class | A Class | R Class | R6 Class | G Class | ||||||||||||
1.31% | 1.11% | 1.56% | 1.81% | 0.96% | 0.96% |
The total annual fund operating expenses shown is as stated in the fund’s prospectus current as of the date of this report. The prospectus may vary from the expense ratio shown elsewhere in this report because it is based on a different time period, includes acquired fund fees and expenses, and, if applicable, does not include fee waivers or expense reimbursements.
Data presented reflect past performance. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance shown. Total returns for periods less than one year are not annualized. Investment return and principal value will fluctuate, and redemption value may be more or less than original cost. Data assumes reinvestment of dividends and capital gains, and none of the charts reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. To obtain performance data current to the most recent month end, please call 1-800-345-2021 or visit americancentury.com. For additional information about the fund, please consult the prospectus.
4
Portfolio Commentary |
Portfolio Managers: Alvin Polit and Jonathan Veiga
Performance Summary
Non-U.S. Intrinsic Value declined -11.75%* for the 12 months ended November 30, 2020. The fund’s benchmark, the MSCI ACWI ex-U.S. Index, rose 9.52% for the same time period. The fund’s return reflects operating expenses, while the index’s return does not.
Over the trailing 12-month period, value-oriented stocks underperformed growth-oriented stocks by a significant margin. This acted as a headwind for our deep value approach. The COVID-19 pandemic also negatively impacted many of our holdings, particularly in the information technology, energy and industrials sectors. Our underweight in the information technology sector and overweight in the energy sector relative to the fund’s benchmark also detracted from relative results. On the other hand, several of our top-performing holdings were in the consumer discretionary sector. More specifically, we held several automobile manufacturers and a home improvement retailer that outperformed.
Information Technology, Energy and Industrials Detracted
In the information technology sector, Capita was a notable detractor. This U.K.-based outsourced services provider experienced a decline in volumes due to Brexit uncertainty and the economic downturn created by the COVID-19 pandemic.
As the pandemic took hold in the spring, the energy sector was hit hard as containment efforts led to a sharp decline in global demand for petroleum products. Although the price of oil rose in November on positive vaccine news, the fund’s overweight in energy as well as some of our energy holdings weighed on relative performance for the 12-month period. Saras, a refiner based in Italy, was a key detractor. Its shares declined as plummeting demand for oil and refined products pressured refining margins. Italy-based Eni, an integrated exploration and production company, was another top detractor. Weakness in oil prices led to a decline in Eni’s profitability and a dividend cut.
Other notable detractors were in the industrials sector, including Babcock International Group, a U.K.-based outsource services provider that specializes in defense and emergency services. Babcock’s profit was negatively impacted by COVID-19, as the pandemic led to additional costs and limited access to customer sites. Our position in AerCap Holdings also pressured relative fund returns. This Netherlands-based aircraft leasing company underperformed as COVID-19 caused airline companies, AerCap’s customers, to drastically reduce flight capacity. The global pandemic threatened AerCap’s business, which is dependent on lease financing and the survival of its customers. We exited the position in AerCap due to the increased risk of impairment to our intrinsic value.
Strength in Consumer Discretionary Holdings
Several of the portfolio’s key contributors were in the automobiles industry, including Germany-based Daimler. Following a period of depressed demand for automobiles due to the pandemic, Daimler and other automobile manufacturers outperformed after automobile sales showed signs of recovery. In addition, Germany and other European governments pledged to support the industry with attractive customer incentives. Daimler also settled U.S. emission charges, eliminating the
legal and financial risks the company had been facing. Another key contributor within the consumer discretionary sector was Kingfisher, a U.K.-based home improvement retailer. Despite the pandemic, Kingfisher reported solid earnings results due to strong demand and cost-cutting.
*All fund returns referenced in this commentary are for Investor Class shares. Performance for other share classes will vary due to differences in fee structure; when Investor Class performance exceeds that of the fund’s benchmark, other share classes may not. See page 3 for returns for all share classes.
5
While overall investment selection within the financials sector weighed on relative results, UBS Group was a top individual contributor. News of promising COVID-19 vaccine developments buoyed shares of many companies in the financials sector, including this Switzerland-based financial services company. UBS also benefited from better-than-expected earnings, due in part to strength in its investment banking and wealth management divisions.
Publicis Groupe, a holding in the communication services sector, was another notable contributor. Shares of this France-based multinational advertising and public relations company rose on hopes for a return to normal economic activity following positive COVID-19 vaccine news. Furthermore, the company was able to retain existing clients and win new clients, demonstrating its resilience during the pandemic.
Portfolio Positioning
The portfolio continues to invest in companies where we believe the fundamentals are not being fully reflected by the market. Our process is conducted purely on a bottom-up basis, but broad themes have emerged.
As of November 30, 2020, the financials sector represents a large portion of the portfolio, comprised primarily of large, higher-quality Europe- and Japan-based banks that we believe offer very attractive valuations. Many of our bank holdings have the flexibility to increase lending due to strong capital levels and low loan-to-deposit ratios, reinforcing our view that industry dynamics favor larger banks. The portfolio is also overweight in energy. We prefer low-cost producers with strong balance sheets that should be able to withstand a protracted downturn in oil prices.
Conversely, we ended the period with a notable underweight in the information technology sector. We focus on companies poised to provide earnings sustainability over long time periods. Many technology companies are prone to obsolescence risk and short product life cycles, which led to our underweight in the sector. The portfolio is also underweight in consumer staples and industrials and has no exposure to materials. Our bottom-up process has led us to more compelling valuations elsewhere.
On a regional basis, we ended the period with an overweight in Europe and an underweight in emerging markets relative to the benchmark. Within Europe, some of our largest country overweights include France and the U.K., where we have identified compelling value opportunities across sectors. While we are underweight in emerging markets overall, our bottom-up investment approach has led us to attractively valued holdings in some emerging markets countries, particularly Russia, South Korea and Mexico.
In November 2020, President Donald Trump signed Executive Order 13959 banning U.S. investment firms from investing in certain Chinese military companies. The executive order is effective on January 11, 2021, and investors must divest from positions by November 11, 2021. Based on its interpretation of guidance currently available from the U.S. Department of the Treasury and the Treasury's Office of Foreign Assets Control, we believe that as of January 11, 2021, the fund will have no known ownership in its portfolio of Chinese military companies identified by Treasury as prohibited under the executive order. In addition, controls have been put in place to restrict the future purchase of prohibited securities. Guidance related to the application of the executive order is evolving. We will continue to monitor developments and consider appropriate action if additional securities are identified by the Treasury.
According to our metrics, the portfolio remains attractive on both an absolute and relative value basis, and on average, the companies we own have more conservative capital structures than the index. We believe these characteristics provide strong upside potential with less downside risk. Furthermore, the prolonged outperformance of growth stocks relative to value stocks has resulted in a wide valuation differential, creating what we believe is a compelling case for value.
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Fund Characteristics |
NOVEMBER 30, 2020 | |||||
Top Ten Holdings | % of net assets | ||||
Sanofi* | 4.7% | ||||
GlaxoSmithKline plc | 4.7% | ||||
Daimler AG | 4.6% | ||||
BNP Paribas SA | 3.9% | ||||
Credit Suisse Group AG | 3.9% | ||||
Barclays plc | 3.7% | ||||
TOTAL SE | 3.3% | ||||
Takeda Pharmaceutical Co. Ltd. | 3.1% | ||||
Mitsubishi UFJ Financial Group, Inc. | 3.0% | ||||
Surgutneftegas PJSC, Preference Shares | 2.9% | ||||
*Includes shares traded on all exchanges. | |||||
Types of Investments in Portfolio | % of net assets | ||||
Common Stocks | 95.0% | ||||
Exchange-Traded Funds | 2.8% | ||||
Total Equity Exposure | 97.8% | ||||
Temporary Cash Investments | 1.6% | ||||
Other Assets and Liabilities | 0.6% | ||||
Investments by Country | % of net assets | ||||
Japan | 18.5% | ||||
United Kingdom | 17.1% | ||||
France | 16.4% | ||||
Germany | 8.8% | ||||
China | 6.7% | ||||
Switzerland | 6.6% | ||||
South Korea | 4.8% | ||||
Russia | 4.6% | ||||
Italy | 3.5% | ||||
Netherlands | 2.7% | ||||
Mexico | 2.0% | ||||
Other Countries | 3.3% | ||||
Exchange-Traded Funds | 2.8% | ||||
Cash and Equivalents* | 2.2% |
*Includes temporary cash investments and other assets and liabilities.
7
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 June 1, 2020 to November 30, 2020.
Actual Expenses
The table provides information about actual account values and actual expenses for each class. You may use the information, together with the amount you invested, to estimate the expenses that you paid over the period. First, identify the share class you own. Then simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
If you hold Investor Class shares of any American Century Investments fund, or I Class shares of the American Century Diversified Bond Fund, in an American Century Investments account (i.e., not through a financial intermediary or employer-sponsored retirement plan account), American Century Investments may charge you a $25.00 annual 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 $25.00 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.
8
Beginning Account Value 6/1/20 | Ending Account Value 11/30/20 | Expenses Paid During Period(1) 6/1/20 - 11/30/20 | Annualized Expense Ratio(1) | |||||||||||
Actual | ||||||||||||||
Investor Class | $1,000 | $1,208.60 | $7.18 | 1.30% | ||||||||||
I Class | $1,000 | $1,210.00 | $6.08 | 1.10% | ||||||||||
A Class | $1,000 | $1,207.50 | $8.55 | 1.55% | ||||||||||
R Class | $1,000 | $1,205.10 | $9.92 | 1.80% | ||||||||||
R6 Class | $1,000 | $1,210.60 | $5.25 | 0.95% | ||||||||||
G Class | $1,000 | $1,217.90 | $0.00 | 0.00%(2) | ||||||||||
Hypothetical | ||||||||||||||
Investor Class | $1,000 | $1,018.50 | $6.56 | 1.30% | ||||||||||
I Class | $1,000 | $1,019.50 | $5.55 | 1.10% | ||||||||||
A Class | $1,000 | $1,017.25 | $7.82 | 1.55% | ||||||||||
R Class | $1,000 | $1,016.00 | $9.07 | 1.80% | ||||||||||
R6 Class | $1,000 | $1,020.25 | $4.80 | 0.95% | ||||||||||
G Class | $1,000 | $1,025.00 | $0.00 | 0.00%(2) |
(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. Annualized expense ratio reflects actual expenses, including any applicable fee waivers or expense reimbursements and excluding any acquired fund fees and expenses.
(2)Other expenses, which include directors' fees and expenses, did not exceed 0.005%.
9
Schedule of Investments |
NOVEMBER 30, 2020
Shares | Value | |||||||
COMMON STOCKS — 95.0% | ||||||||
Belgium — 0.6% | ||||||||
Ontex Group NV(1) | 278,589 | $ | 3,401,830 | |||||
Brazil — 0.9% | ||||||||
Banco Bradesco SA | 1,274,660 | 5,186,767 | ||||||
China — 6.7% | ||||||||
Baidu, Inc., ADR(1) | 61,629 | 8,565,815 | ||||||
China Mobile Ltd. | 916,000 | 5,453,240 | ||||||
CNOOC Ltd. | 13,715,000 | 13,500,809 | ||||||
CNOOC Ltd., ADR | 10,941 | 1,080,205 | ||||||
PetroChina Co. Ltd., H Shares | 30,098,000 | 9,518,980 | ||||||
38,119,049 | ||||||||
France — 16.4% | ||||||||
Atos SE(1) | 74,883 | 6,843,300 | ||||||
BNP Paribas SA(1) | 436,552 | 22,247,350 | ||||||
Publicis Groupe SA | 285,725 | 12,942,993 | ||||||
Sanofi | 219,002 | 22,035,573 | ||||||
Sanofi, ADR | 97,027 | 4,870,755 | ||||||
Societe Generale SA(1) | 320,241 | 6,332,175 | ||||||
TOTAL SE | 439,631 | 18,637,438 | ||||||
93,909,584 | ||||||||
Germany — 8.8% | ||||||||
Bayerische Motoren Werke AG | 154,101 | 13,416,815 | ||||||
Commerzbank AG(1) | 1,696,335 | 10,527,709 | ||||||
Daimler AG | 393,325 | 26,471,110 | ||||||
50,415,634 | ||||||||
Italy — 3.5% | ||||||||
Eni SpA | 1,282,208 | 12,601,191 | ||||||
Saras SpA(1) | 5,933,294 | 3,784,718 | ||||||
UniCredit SpA(1) | 353,191 | 3,632,868 | ||||||
20,018,777 | ||||||||
Japan — 18.5% | ||||||||
Alfresa Holdings Corp. | 422,600 | 8,407,592 | ||||||
Haseko Corp. | 445,900 | 4,798,929 | ||||||
Hazama Ando Corp. | 380,800 | 2,496,653 | ||||||
Mitsubishi UFJ Financial Group, Inc. | 3,995,200 | 17,046,045 | ||||||
Mizuho Financial Group, Inc. | 1,073,100 | 13,634,501 | ||||||
Nippon Television Holdings, Inc. | 718,500 | 7,857,040 | ||||||
Nissan Motor Co. Ltd.(1) | 2,941,600 | 13,756,045 | ||||||
Sumitomo Mitsui Financial Group, Inc. | 398,800 | 11,551,118 | ||||||
Takeda Pharmaceutical Co. Ltd. | 504,800 | 17,977,884 | ||||||
Token Corp. | 35,300 | 2,724,273 | ||||||
TV Asahi Holdings Corp. | 200,708 | 3,218,574 | ||||||
Yamazen Corp. | 214,300 | 2,041,602 | ||||||
105,510,256 | ||||||||
Mexico — 2.0% | ||||||||
Fibra Uno Administracion SA de CV | 11,319,326 | 11,296,783 |
10
Shares | Value | |||||||
Netherlands — 2.7% | ||||||||
Aegon NV | 1,794,357 | $ | 6,695,928 | |||||
Randstad NV(1) | 85,739 | 5,303,140 | ||||||
Signify NV(1) | 87,032 | 3,690,335 | ||||||
15,689,403 | ||||||||
Russia — 4.6% | ||||||||
Gazprom PJSC, ADR | 134,989 | 625,339 | ||||||
Gazprom PJSC | 3,784,312 | 9,032,028 | ||||||
Surgutneftegas PJSC, Preference Shares | 32,059,275 | 16,659,738 | ||||||
26,317,105 | ||||||||
South Korea — 4.8% | ||||||||
Hyundai Mobis Co. Ltd. | 72,213 | 15,974,295 | ||||||
Hyundai Motor Co. | 69,492 | 11,445,269 | ||||||
27,419,564 | ||||||||
Spain — 1.8% | ||||||||
Atresmedia Corp. de Medios de Comunicacion SA(1) | 603,250 | 2,143,658 | ||||||
Banco Bilbao Vizcaya Argentaria SA | 1,692,296 | 7,874,864 | ||||||
10,018,522 | ||||||||
Switzerland — 6.6% | ||||||||
Credit Suisse Group AG | 1,775,030 | 22,219,075 | ||||||
UBS Group AG | 1,073,318 | 15,200,397 | ||||||
37,419,472 | ||||||||
United Kingdom — 17.1% | ||||||||
Babcock International Group plc(1) | 2,741,809 | 12,366,876 | ||||||
Barclays plc(1) | 11,839,179 | 21,179,135 | ||||||
BT Group plc | 1,991,772 | 3,104,991 | ||||||
Capita plc(1) | 4,878,466 | 2,780,272 | ||||||
GlaxoSmithKline plc | 1,453,801 | 26,602,423 | ||||||
Kingfisher plc(1) | 3,149,660 | 11,466,312 | ||||||
Standard Chartered plc (London)(1) | 767,001 | 4,655,936 | ||||||
WPP plc | 1,587,495 | 15,403,042 | ||||||
97,558,987 | ||||||||
TOTAL COMMON STOCKS (Cost $524,168,889) | 542,281,733 | |||||||
EXCHANGE-TRADED FUNDS — 2.8% | ||||||||
iShares MSCI EAFE Value ETF (Cost $14,938,177) | 350,055 | 16,029,019 | ||||||
TEMPORARY CASH INVESTMENTS — 1.6% | ||||||||
Repurchase Agreement, BMO Capital Markets Corp., (collateralized by various U.S. Treasury obligations, 0.625% - 1.375%, 1/31/25 - 5/15/30, valued at $4,373,924), in a joint trading account at 0.06%, dated 11/30/20, due 12/1/20 (Delivery value $4,284,158) | 4,284,151 | |||||||
Repurchase Agreement, Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 2.75%, 4/30/23, valued at $4,912,389), at 0.07%, dated 11/30/20, due 12/1/20 (Delivery value $4,816,009) | 4,816,000 | |||||||
State Street Institutional U.S. Government Money Market Fund, Premier Class | 226 | 226 | ||||||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $9,100,377) | 9,100,377 | |||||||
TOTAL INVESTMENT SECURITIES — 99.4% (Cost $548,207,443) | 567,411,129 | |||||||
OTHER ASSETS AND LIABILITIES — 0.6% | 3,345,460 | |||||||
TOTAL NET ASSETS — 100.0% | $ | 570,756,589 |
11
MARKET SECTOR DIVERSIFICATION | |||||
(as a % of net assets) | |||||
Financials | 29.4 | % | |||
Consumer Discretionary | 17.5 | % | |||
Energy | 15.1 | % | |||
Health Care | 13.9 | % | |||
Communication Services | 10.3 | % | |||
Industrials | 4.5 | % | |||
Real Estate | 2.0 | % | |||
Information Technology | 1.7 | % | |||
Consumer Staples | 0.6 | % | |||
Exchange-Traded Funds | 2.8 | % | |||
Cash and Equivalents* | 2.2 | % |
*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.
12
Statement of Assets and Liabilities |
NOVEMBER 30, 2020 | |||||
Assets | |||||
Investment securities, at value (cost of $548,207,443) | $ | 567,411,129 | |||
Receivable for investments sold | 879,863 | ||||
Receivable for capital shares sold | 587 | ||||
Dividends and interest receivable | 3,424,834 | ||||
571,716,413 | |||||
Liabilities | |||||
Payable for capital shares redeemed | 850,425 | ||||
Accrued management fees | 109,399 | ||||
959,824 | |||||
Net Assets | $ | 570,756,589 | |||
Net Assets Consist of: | |||||
Capital (par value and paid-in surplus) | $ | 566,662,946 | |||
Distributable earnings | 4,093,643 | ||||
$ | 570,756,589 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | |||||||||
Investor Class, $0.01 Par Value | $107,655,308 | 11,987,180 | $8.98 | ||||||||
I Class, $0.01 Par Value | $4,488 | 499 | $8.99 | ||||||||
A Class, $0.01 Par Value | $4,469 | 499 | $8.96* | ||||||||
R Class, $0.01 Par Value | $6,477 | 725 | $8.93 | ||||||||
R6 Class, $0.01 Par Value | $4,495 | 492 | $9.14 | ||||||||
G Class, $0.01 Par Value | $463,081,352 | 50,844,612 | $9.11 |
*Maximum offering price $9.51 (net asset value divided by 0.9425).
See Notes to Financial Statements.
13
Statement of Operations |
YEAR ENDED NOVEMBER 30, 2020 | |||||
Investment Income (Loss) | |||||
Income: | |||||
Dividends (net of foreign taxes withheld of $1,303,178) | $ | 11,134,682 | |||
Interest | 28,699 | ||||
11,163,381 | |||||
Expenses: | |||||
Management fees | 3,970,665 | ||||
Distribution and service fees: | |||||
A Class | 11 | ||||
R Class | 27 | ||||
Directors' fees and expenses | 11,586 | ||||
Other expenses | 9,508 | ||||
3,991,797 | |||||
Fees waived - G Class | (2,774,660) | ||||
1,217,137 | |||||
Net investment income (loss) | 9,946,244 | ||||
Realized and Unrealized Gain (Loss) | |||||
Net realized gain (loss) on: | |||||
Investment transactions | (22,046,123) | ||||
Foreign currency translation transactions | 32,408 | ||||
(22,013,715) | |||||
Change in net unrealized appreciation (depreciation) on: | |||||
Investments | 11,167,207 | ||||
Translation of assets and liabilities in foreign currencies | 116,637 | ||||
11,283,844 | |||||
Net realized and unrealized gain (loss) | (10,729,871) | ||||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | (783,627) |
See Notes to Financial Statements.
14
Statement of Changes in Net Assets |
YEAR ENDED NOVEMBER 30, 2020 AND PERIOD ENDED NOVEMBER 30, 2019 | ||||||||
Increase (Decrease) in Net Assets | November 30, 2020 | November 30, 2019(1) | ||||||
Operations | ||||||||
Net investment income (loss) | $ | 9,946,244 | $ | 14,444,042 | ||||
Net realized gain (loss) | (22,013,715) | 3,810,075 | ||||||
Change in net unrealized appreciation (depreciation) | 11,283,844 | 8,016,669 | ||||||
Net increase (decrease) in net assets resulting from operations | (783,627) | 26,270,786 | ||||||
Distributions to Shareholders | ||||||||
From earnings: | ||||||||
Investor Class | (4,358,940) | (491,729) | ||||||
I Class | (218) | — | ||||||
A Class | (216) | — | ||||||
R Class | (215) | — | ||||||
R6 Class | (215) | — | ||||||
G Class | (14,604,585) | (949,592) | ||||||
Decrease in net assets from distributions | (18,964,389) | (1,441,321) | ||||||
Capital Share Transactions | ||||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | 224,041,779 | 341,633,361 | ||||||
Net increase (decrease) in net assets | 204,293,763 | 366,462,826 | ||||||
Net Assets | ||||||||
Beginning of period | 366,462,826 | — | ||||||
End of period | $ | 570,756,589 | $ | 366,462,826 |
(1)December 6, 2018 (fund inception) through November 30, 2019.
See Notes to Financial Statements.
15
Notes to Financial Statements |
NOVEMBER 30, 2020
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. Non-U.S. Intrinsic Value Fund (the fund) is one fund in a series issued by the corporation. The fund’s investment objective is to seek capital appreciation.
The fund offers the Investor Class, I Class, A Class, R Class, R6 Class and G Class. The A Class may incur an initial sales charge and may be subject to a contingent deferred sales charge. Sale of the Investor Class and G Class commenced on December 6, 2018, the fund's inception date. Sale of the I Class, A Class, R Class and R6 Class commenced on December 3, 2019.
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 (NAV) 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 NAV 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.
16
The fund monitors for significant events occurring after the close of an investment’s primary exchange but before the fund’s NAV 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. 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.
17
Indemnifications — Under the corporation’s organizational documents, its officers and directors are indemnified against certain liabilities arising out of the performance of their duties to the fund. In addition, in the normal course of business, the fund enters into contracts that provide general indemnifications. The maximum exposure under these arrangements is unknown as this would involve future claims that may be made against a fund. The risk of material loss from such claims is considered by management to be remote.
3. Fees and Transactions with Related Parties
Certain officers and directors of the corporation are also officers and/or directors of American Century Companies, Inc. (ACC). The corporation’s investment advisor, ACIM, the corporation's distributor, American Century Investment Services, Inc. (ACIS), and the corporation’s transfer agent, American Century Services, LLC, are wholly owned, directly or indirectly, by ACC. Various funds issued by American Century Asset Allocation Portfolios, Inc. own, in aggregate, 62% 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 ACIM will pay all expenses of managing and operating the fund, except brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), extraordinary expenses, and expenses incurred in connection with the provision of shareholder services and distribution services under a plan adopted pursuant to Rule 12b-1 under the 1940 Act. The fee is computed and accrued daily based on each class's daily net assets and paid monthly in arrears. The difference in the fee among the classes is a result of their separate arrangements for non-Rule 12b-1 shareholder services. It is not the result of any difference in advisory or custodial fees or other expenses related to the management of the fund’s assets, which do not vary by class. The investment advisor agreed to waive the G Class’s management fee in its entirety. The investment advisor expects this waiver to remain in effect permanently and cannot terminate it without the approval of the Board of Directors.
The annual management fee for each class is as follows:
Investor Class | I Class | A Class | R Class | R6 Class | G Class | ||||||||||||
1.30% | 1.10% | 1.30% | 1.30% | 0.95% | 0.00%(1) |
(1)Annual management fee before waiver was 0.95%.
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 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 R Class will pay ACIS an annual distribution and service fee of 0.50%. The fees are computed and accrued daily based on each class’s daily net assets and paid monthly in arrears. The fees are used to pay financial intermediaries for distribution and individual shareholder services. Fees incurred under the plans during the period ended November 30, 2020 are detailed in the Statement of Operations.
Directors' Fees and Expenses — The Board of Directors is responsible for overseeing the investment advisor’s management and operations of the fund. The directors receive detailed information about the fund and its investment advisor regularly throughout the year, and meet at least quarterly with management of the investment advisor to review reports about fund operations. The fund’s officers do not receive compensation from the fund.
Interfund Transactions — The fund may enter into security transactions with other American Century Investments funds and other client accounts of the investment advisor, in accordance with the 1940 Act rules and procedures adopted by the Board of Directors. The rules and procedures require, among other things, that these transactions be effected at the independent current market price of the security. There were no interfund transactions during the period.
18
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments and in kind transactions, for the period ended November 30, 2020 were $311,220,076 and $253,195,805, respectively.
On August 5, 2020, the fund received investment securities valued at $156,198,883 from a purchase in kind from other products managed by the fund's investment advisor. A purchase in kind occurs when a fund receives securities into its portfolio in lieu of cash as payment from a purchasing shareholder.
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Year ended November 30, 2020(1) | Period ended November 30, 2019(2) | |||||||||||||
Shares | Amount | Shares | Amount | |||||||||||
Investor Class/Shares Authorized | 130,000,000 | 130,000,000 | ||||||||||||
Sold | 2,498,370 | $ | 19,418,404 | 11,270,260 | $ | 112,661,064 | ||||||||
Issued in reinvestment of distributions | 409,675 | 4,358,940 | 51,009 | 491,729 | ||||||||||
Redeemed | (523,717) | (5,171,299) | (1,718,417) | (16,249,420) | ||||||||||
2,384,328 | 18,606,045 | 9,602,852 | 96,903,373 | |||||||||||
I Class/Shares Authorized | 50,000,000 | N/A | ||||||||||||
Sold | 479 | 5,000 | ||||||||||||
Issued in reinvestment of distributions | 20 | 218 | ||||||||||||
499 | 5,218 | |||||||||||||
A Class/Shares Authorized | 50,000,000 | N/A | ||||||||||||
Sold | 479 | 5,000 | ||||||||||||
Issued in reinvestment of distributions | 20 | 216 | ||||||||||||
499 | 5,216 | |||||||||||||
R Class/Shares Authorized | 50,000,000 | N/A | ||||||||||||
Sold | 1,287 | 11,285 | ||||||||||||
Issued in reinvestment of distributions | 20 | 215 | ||||||||||||
Redeemed | (582) | (4,568) | ||||||||||||
725 | 6,932 | |||||||||||||
R6 Class/Shares Authorized | 60,000,000 | N/A | ||||||||||||
Sold | 472 | 5,000 | ||||||||||||
Issued in reinvestment of distributions | 20 | 215 | ||||||||||||
492 | 5,215 | |||||||||||||
G Class/Shares Authorized | 340,000,000 | 340,000,000 | ||||||||||||
Sold | 31,175,888 | 251,690,777 | 29,283,091 | 292,987,696 | ||||||||||
Issued in reinvestment of distributions | 1,371,323 | 14,604,585 | 98,301 | 949,592 | ||||||||||
Redeemed | (6,283,725) | (60,882,209) | (4,800,266) | (49,207,300) | ||||||||||
26,263,486 | 205,413,153 | 24,581,126 | 244,729,988 | |||||||||||
Net increase (decrease) | 28,650,029 | $ | 224,041,779 | 34,183,978 | $ | 341,633,361 |
(1)December 3, 2019 (commencement of sale) through November 30, 2020 for I Class, A Class, R Class and R6 Class.
(2)December 6, 2018 (fund inception) through November 30, 2019.
19
6. Fair Value Measurements
The fund’s investments valuation process is based on several considerations and may use multiple inputs to determine the fair value of the investments held by the fund. In conformity with accounting principles generally accepted in the United States of America, the inputs used to determine a valuation are classified into three broad levels.
•Level 1 valuation inputs consist of unadjusted quoted prices in an active market for identical investments.
•Level 2 valuation inputs consist of direct or indirect observable market data (including quoted prices for comparable investments, evaluations of subsequent market events, interest rates, prepayment speeds, credit risk, etc.). These inputs also consist of quoted prices for identical investments initially expressed in local currencies that are adjusted through translation into U.S. dollars.
•Level 3 valuation inputs consist of unobservable data (including a fund’s own assumptions).
The level classification is based on the lowest level input that is significant to the fair valuation measurement. The valuation inputs are not necessarily an indication of the risks associated with investing in these securities or other financial instruments.
The following is a summary of the level classifications as of period end. The Schedule of Investments provides additional information on the fund’s portfolio holdings.
Level 1 | Level 2 | Level 3 | |||||||||
Assets | |||||||||||
Investment Securities | |||||||||||
Common Stocks | $ | 14,516,775 | $ | 527,764,958 | — | ||||||
Exchange-Traded Funds | 16,029,019 | — | — | ||||||||
Temporary Cash Investments | 226 | 9,100,151 | — | ||||||||
$ | 30,546,020 | $ | 536,865,109 | — |
7. Risk Factors
The value of the fund’s shares will go up and down, sometimes rapidly or unpredictably, based on the performance of the securities owned by the fund and other factors generally affecting the securities market. Market risks, including political, regulatory, economic and social developments, can affect the value of the fund’s investments. Natural disasters, public health emergencies, terrorism and other unforeseeable events may lead to increased market volatility and may have adverse long-term effects on world economies and markets generally.
There are certain risks involved in investing in foreign securities. These risks include those resulting from political events (such as civil unrest, national elections and imposition of exchange controls), social and economic events (such as labor strikes and rising inflation), and natural disasters. Securities of foreign issuers may be less liquid and more volatile. Investing in emerging markets or a significant portion of assets in one country or region 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 is owned by a relatively small number of shareholders, and in the event such shareholders redeem, the ongoing operations of the fund may be at risk.
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8. Federal Tax Information
On December 22, 2020, the fund declared and paid the following per-share distributions from net investment income to shareholders of record on December 21, 2020:
Investor Class | I Class | A Class | R Class | R6 Class | G Class | ||||||||||||
$0.1215 | $0.1398 | $0.0986 | $0.0757 | $0.1535 | $0.2404 |
The tax character of distributions paid during the year ended November 30, 2020 and the period December 6, 2018 (fund inception) through November 30, 2019 were as follows:
2020 | 2019 | |||||||
Distributions Paid From | ||||||||
Ordinary income | $ | 18,964,389 | $ | 1,441,321 | ||||
Long-term capital gains | — | — |
The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
As of period end, the federal tax cost of investments and the components of distributable earnings on a tax-basis were as follows:
Federal tax cost of investments | $ | 558,222,877 | |||
Gross tax appreciation of investments | $ | 51,148,734 | |||
Gross tax depreciation of investments | (41,960,482) | ||||
Net tax appreciation (depreciation) of investments | 9,188,252 | ||||
Net tax appreciation (depreciation) on translation of assets and liabilities in foreign currencies | 96,827 | ||||
Net tax appreciation (depreciation) | $ | 9,285,079 | |||
Undistributed ordinary income | $ | 13,054,961 | |||
Accumulated long-term capital losses | $ | (18,246,397) |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales.
Accumulated capital losses 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.
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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 | |||||||||||||||||||||||||||||||||||||||||
2020 | $10.61 | 0.13 | (1.31) | (1.18) | (0.32) | (0.13) | (0.45) | $8.98 | (11.75) | % | 1.31 | % | 1.60 | % | 68 | % | $107,655 | ||||||||||||||||||||||||
2019(3) | $10.00 | 0.31 | 0.34 | 0.65 | (0.04) | — | (0.04) | $10.61 | 6.59 | % | 1.31%(4) | 3.04%(4) | 85 | % | $101,934 | ||||||||||||||||||||||||||
I Class | |||||||||||||||||||||||||||||||||||||||||
2020(5) | $10.45 | 0.15 | (1.16) | (1.01) | (0.32) | (0.13) | (0.45) | $8.99 | (10.29) | % | 1.11%(4) | 1.80%(4) | 68%(6) | $4 | |||||||||||||||||||||||||||
A Class | |||||||||||||||||||||||||||||||||||||||||
2020(5) | $10.45 | 0.11 | (1.15) | (1.04) | (0.32) | (0.13) | (0.45) | $8.96 | (10.62) | % | 1.56%(4) | 1.35%(4) | 68%(6) | $4 | |||||||||||||||||||||||||||
R Class | |||||||||||||||||||||||||||||||||||||||||
2020(5) | $10.45 | 0.09 | (1.16) | (1.07) | (0.32) | (0.13) | (0.45) | $8.93 | (10.93) | % | 1.81%(4) | 1.10%(4) | 68%(6) | $6 | |||||||||||||||||||||||||||
R6 Class | |||||||||||||||||||||||||||||||||||||||||
2020(5) | $10.60 | 0.16 | (1.16) | (1.00) | (0.33) | (0.13) | (0.46) | $9.14 | (10.12) | % | 0.96%(4) | 1.95%(4) | 68%(6) | $4 | |||||||||||||||||||||||||||
G Class | |||||||||||||||||||||||||||||||||||||||||
2020 | $10.76 | 0.24 | (1.29) | (1.05) | (0.47) | (0.13) | (0.60) | $9.11 | (10.58) | % | 0.01%(7) | 2.90%(7) | 68 | % | $463,081 | ||||||||||||||||||||||||||
2019(3) | $10.00 | 0.43 | 0.37 | 0.80 | (0.04) | — | (0.04) | $10.76 | 8.00 | % | 0.01%(4)(8) | 4.34%(4)(8) | 85 | % | $264,529 |
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)December 6, 2018 (fund inception) through November 30, 2019.
(4)Annualized.
(5)December 3, 2019 (commencement of sale) through November 30, 2020.
(6)Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended November 30, 2020.
(7)The ratio of operating expenses to average net assets before expense waiver and the ratio of net investment income (loss) to average net assets before expense waiver was 0.96% and 1.95%, respectively.
(8)The annualized ratio of operating expenses to average net assets before expense waiver and the annualized ratio of net investment income (loss) to average net assets before expense waiver was 0.96% and 3.39%, respectively.
See Notes to Financial Statements.
Report of Independent Registered Public Accounting Firm |
To the Shareholders and the Board of Directors of American Century World Mutual Funds, Inc.:
Opinion on the Financial Statements and Financial Highlights
We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of Non-U.S. Intrinsic Value Fund (the “Fund”), one of the funds constituting the American Century World Mutual Funds, Inc., as of November 30, 2020, the related statement of operations for the year then ended, the statements of changes in net assets and the financial highlights for the year ended November 30, 2020 and for the period December 6, 2018 (fund inception) through November 30, 2019, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of Non-U.S. Intrinsic Value Fund of the American Century World Mutual Funds, Inc. as of November 30, 2020, and the results of its operations for the year then ended and the changes in its net assets, and the financial highlights for the year ended November 30, 2020 and for the period December 6, 2018 (fund inception) through November 30, 2019, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on the Fund’s financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. Our procedures included confirmation of securities owned as of November 30, 2020, by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
DELOITTE & TOUCHE LLP
Kansas City, Missouri
January 19, 2021
We have served as the auditor of one or more American Century investment companies since 1997.
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Management |
The Board of Directors
The individuals listed below serve as directors of the funds. Each director will continue to serve in this capacity until death, retirement, resignation or removal from office. The board has adopted a mandatory retirement age for directors who are not “interested persons,” as that term is defined in the Investment Company Act (independent directors). Independent directors shall retire by December 31 of the year in which they reach their 75th birthday.
Mr. Thomas is an “interested person” because he currently serves as President and Chief Executive Officer of American Century Companies, Inc. (ACC), the parent company of American Century Investment Management, Inc. (ACIM or the advisor). The other directors (more than three-fourths of the total number) are independent. They are not employees, directors or officers of, and have no financial interest in, ACC or any of its wholly owned, direct or indirect, subsidiaries, including ACIM, American Century Investment Services, Inc. (ACIS) and American Century Services, LLC (ACS), and they do not have any other affiliations, positions or relationships that would cause them to be considered “interested persons” under the Investment Company Act. The directors serve in this capacity for seven (in the case of Jonathan S. Thomas, 16; and Stephen E. Yates, 8) registered investment companies in the American Century Investments family of funds.
The following table presents additional information about the directors. The mailing address for each director is 4500 Main Street, Kansas City, Missouri 64111.
Name (Year of Birth) | Position(s) Held with Funds | Length of Time Served | Principal Occupation(s) During Past 5 Years | Number of American Century Portfolios Overseen by Director | Other Directorships Held During Past 5 Years | ||||||||||||
Independent Directors | |||||||||||||||||
Thomas W. Bunn (1953) | Director | Since 2017 | Retired | 62 | SquareTwo Financial; Barings (formerly Babson Capital Funds Trust) (2013 to 2016) | ||||||||||||
Chris H. Cheesman (1962) | Director | Since 2019 | Retired. Senior Vice President & Chief Audit Executive, AllianceBernstein (1999 to 2018) | 62 | None | ||||||||||||
Barry Fink (1955) | Director | Since 2012 (independent since 2016) | Retired | 62 | None | ||||||||||||
Rajesh K. Gupta (1960) | Director | Since 2019 | Partner Emeritus, SeaCrest Investment Management and SeaCrest Wealth Management (2019 to Present); Chief Executive Officer and Chief Investment Officer, SeaCrest Investment Management (2006 to 2019); Chief Executive Officer and Chief Investment Officer, SeaCrest Wealth Management (2008 to 2019) | 62 | None |
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Name (Year of Birth) | Position(s) Held with Funds | Length of Time Served | Principal Occupation(s) During Past 5 Years | Number of American Century Portfolios Overseen by Director | Other Directorships Held During Past 5 Years | ||||||||||||
Independent Directors | |||||||||||||||||
Lynn Jenkins (1963) | Director | Since 2019 | Consultant, LJ Strategies (2019 to present); United States Representative, U.S. House of Representatives (2009 to 2018) | 62 | MGP Ingredients, Inc. | ||||||||||||
Jan M. Lewis (1957) | Director | Since 2011 | Retired | 62 | None | ||||||||||||
John R. Whitten (1946) | Director | Since 2008 | Retired | 62 | Onto Innovation Inc. (2019 to 2020); Rudolph Technologies, Inc. (2006 to 2019) | ||||||||||||
Stephen E. Yates (1948) | Director and Chairman of the Board | Since 2012 (Chairman since 2018) | Retired | 87 | None | ||||||||||||
Interested Director | |||||||||||||||||
Jonathan S. Thomas (1963) | Director | Since 2007 | President and Chief Executive Officer, ACC (2007 to present). Also serves as Chief Executive Officer, ACS; Executive Vice President, ACIM; Director, ACC, ACIM and other ACC subsidiaries | 125 | None |
The Statement of Additional Information has additional information about the fund's directors and is available without charge, upon request, by calling 1-800-345-2021.
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Officers
The following table presents certain information about the executive officers of the funds. Each officer serves as an officer for each of the 16 (in the case of Robert J. Leach, 15) investment companies in the American Century family of funds. No officer is compensated for his or her service as an officer of the funds. The listed officers are interested persons of the funds and are appointed or re-appointed on an annual basis. The mailing address for each officer listed below is 4500 Main Street, Kansas City, Missouri 64111.
Name (Year of Birth) | Offices with the Funds | Principal Occupation(s) During the Past Five Years | ||||||
Patrick Bannigan (1965) | President since 2019 | Executive Vice President and Director, ACC (2012 to present); Chief Financial Officer, Chief Accounting Officer and Treasurer, ACC (2015 to present). Also serves as President, ACS; Vice President, ACIM; Chief Financial Officer, Chief Accounting Officer and/or Director, ACIM, ACS and other ACC subsidiaries | ||||||
R. Wes Campbell (1974) | Chief Financial Officer and Treasurer since 2018 | Vice President, ACS, (2020 to present); Investment Operations and Investment Accounting, ACS (2000 to present) | ||||||
Amy D. Shelton (1964) | Chief Compliance Officer and Vice President since 2014 | Chief Compliance Officer, American Century funds, (2014 to present); Chief Compliance Officer, ACIM (2014 to present); Chief Compliance Officer, ACIS (2009 to present). Also serves as Vice President, ACIS | ||||||
Charles A. Etherington (1957) | General Counsel since 2007 and Senior Vice President since 2006 | Attorney, ACC (1994 to present); Vice President, ACC (2005 to present); General Counsel, ACC (2007 to present). Also serves as General Counsel, ACIM, ACS, ACIS and other ACC subsidiaries; and Senior Vice President, ACIM and ACS | ||||||
C. Jean Wade (1964) | Vice President since 2012 | Senior Vice President, ACS (2017 to present); Vice President, ACS (2000 to 2017) | ||||||
Robert J. Leach (1966) | Vice President since 2006 | Vice President, ACS (2000 to present) | ||||||
David H. Reinmiller (1963) | Vice President since 2000 | Attorney, ACC (1994 to present). Also serves as Vice President, ACIM and ACS | ||||||
Ward D. Stauffer (1960) | Secretary since 2005 | Attorney, ACC (2003 to present) |
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Approval of Management Agreement |
At a meeting held on June 24, 2020, the Fund’s Board of Directors (the "Board") unanimously approved the renewal of the 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, contracts for investment advisory services are required to be reviewed, evaluated, and approved by a majority of a fund’s directors (the “Directors”), including a majority of the independent Directors, each year.
Prior to its consideration of the renewal of the management agreement, the Directors requested and reviewed extensive data and information compiled by the Advisor and certain independent providers of evaluation data concerning the Fund and the services provided to the Fund by the Advisor. This review was in addition to the oversight and evaluation undertaken by the Board and its committees on a continual basis and the information received was supplemental to the extensive information that the Board and its committees receive and consider throughout the year.
In connection with its consideration of the renewal of the management agreement, the Board’s review and evaluation of the services provided by the Advisor included, but was not limited to, the following:
•the nature, extent, and quality of investment management, shareholder services, and other services provided and to be provided to the Fund;
•the wide range of other programs and services provided and to be provided to the Fund and its shareholders on a routine and non-routine basis;
•the Fund’s investment performance, including data comparing the Fund's performance to appropriate benchmarks and/or a peer group of other mutual funds with similar investment objectives and strategies;
•the cost of owning the Fund compared to the cost of owning similar funds;
•the compliance policies, procedures, and regulatory experience of the Advisor and the Fund's service providers;
•the Advisor’s strategic plans;
•the Advisor’s business continuity plans and specifically its response to the COVID-19 pandemic;
•financial data showing the cost of services provided to the Fund, the profitability of the Fund to the Advisor, and the overall profitability of the Advisor;
•possible economies of scale associated with the Advisor’s management of the Fund and other accounts;
•services provided and charges to the Advisor's other investment management clients;
•acquired fund fees and expenses;
•payments and practices in connection with financial intermediaries holding shares of the Fund and the services provided by intermediaries in connection therewith; and
•possible collateral benefits to the Advisor from the management of the Fund.
The Board held two meetings to consider the renewal. The independent Directors also met in private session three times to review and discuss the information provided in response to their request. The independent Directors held active discussions with the Advisor regarding the renewal of the management agreement, requesting supplemental information, and reviewing information provided by the Advisor in response thereto. The independent Directors had the benefit of the advice of their independent counsel throughout the process.
Factors Considered
The Directors considered all of the information provided by the Advisor, the independent data providers, and 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
28
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. In deciding to renew the management agreement, the Board based its decision on a number of factors, including without limitation the following:
Nature, Extent and Quality of Services — Generally. Under the management agreement, the Advisor is responsible for providing or arranging for all services necessary for the operation of the Fund. The Board noted that the Advisor provides or arranges at its own expense a wide variety of services including without limitation the following:
•constructing and designing the Fund
•portfolio research and security selection
•initial capitalization/funding
•securities trading
•Fund administration
•custody of Fund assets
•daily valuation of the Fund’s portfolio
•shareholder servicing and transfer agency, including shareholder confirmations, recordkeeping, and communications
•legal services (except the independent Directors’ counsel)
•regulatory and portfolio compliance
•financial reporting
•marketing and distribution (except amounts paid by the Fund under Rule 12b-1 plans)
The Board noted that many of these services have expanded over time in terms of both quantity and complexity in response to shareholder demands, competition in the industry, changing distribution channels, and the changing regulatory environment.
Investment Management Services. The nature of the investment management services provided to the Fund is quite complex and allows Fund shareholders access to professional money management, instant diversification of their investments within an asset class, the opportunity to easily diversify among asset classes by investing in or exchanging among various American Century Investments funds, and liquidity. In evaluating investment performance, the Board expects the Advisor to manage the Fund in accordance with its investment objectives and approved strategies. Further, the Directors recognize that the Advisor has an obligation to monitor trading activities, and in particular to seek the best execution of fund trades, and to evaluate the use of and payment for research. In providing these services, the Advisor utilizes teams of investment professionals (portfolio managers, analysts, research assistants, and securities traders) who require extensive information technology, research, training, compliance, and other systems to conduct their business. The Board, directly and through its Fund Performance Review Committee, provides oversight of the investment performance process. It regularly reviews investment performance information for the Fund, together with comparative information for appropriate benchmarks and/or peer groups of similarly-managed funds, over different time horizons. The Directors also review investment performance information during the management agreement renewal process. If performance concerns are identified, the Fund receives special reviews until performance improves, during which the Board discusses with the Advisor the reasons for such results (e.g., market conditions, security selection) and any efforts being undertaken to improve performance. The Fund’s performance was above its benchmark for the one-year period reviewed by the Board. The Board found the investment management services provided by the Advisor to the Fund to be satisfactory and consistent with the management agreement.
Shareholder and Other Services. Under the management agreement, the Advisor provides the Fund with a comprehensive package of transfer agency, shareholder, and other services. The Board, directly and through its various committees, regularly reviews reports and evaluations of such services at its regular meetings. These reports include, but are not limited to, information regarding the operational efficiency and accuracy of the shareholder and transfer agency services
29
provided, staffing levels, shareholder satisfaction, technology support (including cyber security), new products and services offered to Fund shareholders, securities trading activities, portfolio valuation services, auditing services, and legal and operational compliance activities. The Board found the services provided by the Advisor to the Fund under the management agreement to be competitive and of high quality.
COVID-19 Response. During 2020, much of the world experienced unprecedented change and challenges from the impacts of the rapidly evolving, worldwide spread of the COVID-19 virus. The Board evaluated the Advisor’s response to the COVID-19 pandemic and its impact on service to the Fund. The Board found that Fund shareholders have continued to receive the Advisor’s investment management and other services without disruption, and Advisor personnel have demonstrated great resiliency in providing those services. The Board, directly and through its Audit Committee, continues to monitor the impact of the pandemic and the response of each of the Fund’s service providers.
Costs of Services and Profitability. The Advisor provides detailed information concerning its cost of providing various services to the Fund, its profitability in managing the Fund (pre- and post-distribution), its overall profitability, and its financial condition. The Directors have reviewed with the Advisor the methodology used to prepare this financial information. This information is considered in evaluating the Advisor’s financial condition, its ability to continue to provide services under the management agreement, and the reasonableness of the current management fee. The Board concluded that the Advisor’s profits were reasonable in light of the services provided to the Fund.
Ethics. The Board generally considers the Advisor’s commitment to providing quality services to shareholders and to conducting its business ethically. They noted that the Advisor’s practices generally meet or exceed industry best practices.
Economies of Scale. The Board also reviewed information provided by the Advisor regarding the possible existence of economies of scale in connection with the management of the Fund. The Board concluded that economies of scale are difficult to measure and predict with precision, especially on a fund-by-fund basis. The Board concluded that the Advisor is appropriately sharing economies of scale, to the extent they exist, through its competitive fee structure, offering competitive fees from fund inception, and through reinvestment in its business, infrastructure, investment capabilities and initiatives to provide shareholders additional content and services.
Comparison to Other Funds’ Fees. The management agreement provides that the Fund pays the Advisor a single, all-inclusive (or unified) management fee for providing all services necessary for the management and operation of the Fund, other than brokerage expenses, expenses attributable to short sales, taxes, interest, extraordinary expenses, fees and expenses of the Fund’s independent Directors (including their independent legal counsel), and expenses incurred in connection with the provision of shareholder services and distribution services under a plan adopted pursuant to Rule 12b-1 under the Investment Company Act. 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 any applicable Rule 12b-1 distribution fees, all other components of the total fees charged by these other funds may be increased without shareholder approval. The Board believes the unified fee structure is a benefit to Fund shareholders because it clearly discloses to shareholders the cost of owning Fund shares, and, since 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 comparing the Fund’s unified fee to the total expense ratios of its peers. The unified fee charged to shareholders of the Fund was above the median of the total expense ratios of the Fund’s peer expense universe
30
and was within the range of its peer expense group. The Board concluded that the management fee paid by the Fund to the Advisor under the management agreement is reasonable in light of the services provided to the Fund.
Comparison to Fees and Services Provided to Other Clients of the Advisor. The Board also requested and received information from the Advisor concerning the nature of the services, fees, costs, and profitability of its advisory services to advisory clients other than the Fund. They observed that these varying types of client accounts require different services and involve different regulatory and entrepreneurial risks than the management of the Fund. The Board analyzed this information and concluded that the fees charged and services provided to the Fund were reasonable by comparison.
Payments to Intermediaries. The Directors also requested and received a description of payments made to intermediaries by the Fund and the Advisor and services provided in response thereto. These payments include various payments made by the Fund or the Advisor to different types of intermediaries and recordkeepers for distribution and service activities provided for the Fund. The Directors reviewed such information and received representations from the Advisor that all such payments by the Fund were made pursuant to the Fund's Rule 12b-1 Plan and that all such payments by the Advisor were made from the Advisor’s resources and reasonable profits. The Board found such payments to be reasonable in scope and purpose.
Collateral or “Fall-Out” Benefits Derived by the Advisor. The Board considered the possible existence of collateral benefits the Advisor may receive as a result of its relationship with the Fund. They concluded that the Advisor’s primary business is managing mutual funds and it generally does not use fund or shareholder information to generate profits in other lines of business, and therefore does not derive any significant collateral benefits from them. To the extent there are potential collateral benefits, the board has been advised and has taken this into consideration in its review of the management contract with the Fund. The Board noted that additional assets from other clients may offer the Advisor some benefit from increased leverage with service providers and counterparties. Additionally, the Advisor may receive proprietary research from broker-dealers that execute fund portfolio transactions, which the Board concluded is likely to benefit other clients of the Advisor, as well as Fund shareholders. The Board also determined that the Advisor is able to provide investment management services to certain clients other than the Fund, at least in part, due to its existing infrastructure built to serve the fund complex. The Board concluded that appropriate allocation methodologies had been employed to assign resources and the cost of those resources to these other clients.
Existing Relationship. The Board also considered whether there was any reason for not continuing the existing arrangement with the Advisor. In this regard, the Board was mindful of the potential disruptions of the Fund’s operations and various risks, uncertainties, and other effects that could occur as a result of a decision not to continue such relationship. In particular, the Board recognized that most shareholders have invested in the Fund on the strength of the Advisor’s industry standing and reputation and in the expectation that the Advisor will have a continuing role in providing advisory services to the Fund.
Conclusion of the Directors. As a result of this process, the Board, including all of the independent Directors, taking into account all of the factors discussed above and the information provided by the Advisor and others in connection with its review and throughout the year, determined that the management fee is fair and reasonable in light of the services provided and that the investment management agreement between the Fund and the Advisor should be renewed.
31
Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain retirement accounts are subject to federal income tax withholding, unless you elect not to have withholding apply*. Tax will be withheld on the total amount withdrawn even though you may be receiving amounts that are not subject to withholding, such as nondeductible contributions. In such case, excess amounts of withholding could occur. You may adjust your withholding election so that a greater or lesser amount will be withheld.
If you don’t want us to withhold on this amount, you must notify us to not withhold the federal income tax. You may notify us in writing or in certain situations by telephone or through other electronic means. For systematic withdrawals, your withholding election will remain in effect until revoked or changed by filing a new election. You have the right to revoke your election at any time and change your withholding percentage for future distributions.
Remember, even if you elect not to have income tax withheld, you are liable for paying income tax on the taxable portion of your withdrawal. If you elect not to have income tax withheld or you don’t have enough income tax withheld, you may be responsible for payment of estimated tax. You may incur penalties under the estimated tax rules if your withholding and estimated tax payments are not sufficient. You can reduce or defer the income tax on a distribution by directly or indirectly rolling such distribution over to another IRA or eligible plan. You should consult your tax advisor for additional information.
State tax will be withheld if, at the time of your distribution, your address is within one of the mandatory withholding states and you have federal income tax withheld (or as otherwise required by state law). State taxes will be withheld from your distribution in accordance with the respective state rules.
*Some 403(b), 457 and qualified retirement plan distributions may be subject to 20% mandatory withholding, as they are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
A description of the policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund is available without charge, upon request, by calling 1-800-345-2021. It is also available on American Century Investments’ website at americancentury.com/proxy 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 americancentury.com/proxy. 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 as an exhibit to its reports on
Form N-PORT. The fund’s Form N-PORT reports are available on the SEC’s website at sec.gov.
The fund also makes its complete schedule of portfolio holdings for the most recent quarter of its
fiscal year available on its website at americancentury.com and, upon request, by calling
1-800-345-2021.
32
Other Tax Information
The following information is provided pursuant to provisions of the Internal Revenue Code.
The fund hereby designates up to the maximum amount allowable as qualified dividend income for the fiscal year ended November 30, 2020.
The fund hereby designates $4,462,455 as qualified short-term capital gain distributions for purposes of Internal Revenue Code Section 871 for the fiscal year ended November 30, 2020.
For the fiscal year ended November 30, 2020, the fund intends to pass through to shareholders foreign source income of $12,180,513 and foreign taxes paid of $1,250,509, or up to the maximum amount allowable, as a foreign tax credit. Foreign source income and foreign tax expense per
outstanding share on November 30, 2020 are $0.1939 and $0.0199, respectively.
33
Notes |
34
Notes |
35
Notes |
36
Notes |
37
Notes |
38
Notes |
39
Notes |
40
![]() | ||||||||
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. | ||||||||
©2021 American Century Proprietary Holdings, Inc. All rights reserved. CL-ANN-95207 2101 |
![image171.jpg](https://capedge.com/proxy/N-CSR/0000872825-21-000006/image171.jpg)
Annual Report | |||||
November 30, 2020 | |||||
NT Emerging Markets Fund | |||||
G Class (ACLKX) |
Table of Contents |
Performance | |||||
Portfolio Commentary | |||||
Fund Characteristics | |||||
Shareholder Fee Example | |||||
Schedule of Investments | |||||
Statement of Assets and Liabilities | |||||
Statement of Operations | |||||
Statement of Changes in Net Assets | |||||
Notes to Financial Statements | |||||
Financial Highlights | |||||
Report of Independent Registered Public Accounting Firm | |||||
Management | |||||
Approval of Management Agreement | |||||
Additional Information |
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.
Performance |
Total Returns as of November 30, 2020 | |||||||||||||||||
Average Annual Returns | |||||||||||||||||
Ticker Symbol | 1 year | 5 years | 10 years | Inception Date | |||||||||||||
G Class | ACLKX | 24.62% | 12.77% | 5.80% | 5/12/06 | ||||||||||||
MSCI Emerging Markets Index | — | 18.43% | 10.71% | 3.60% | — |
Fund returns would have been lower if a portion of the fees had not been waived.
Growth of $10,000 Over 10 Years | ||
$10,000 investment made November 30, 2010 | ||
![chart-e75b1a80578e46c19581.jpg](https://capedge.com/proxy/N-CSR/0000872825-21-000006/chart-e75b1a80578e46c19581.jpg)
Value on November 30, 2020 | |||||
G Class — $17,577 | |||||
MSCI Emerging Markets Index — $14,253 | |||||
Ending value of G Class would have been lower if a portion of the fees had not been waived.
Total Annual Fund Operating Expenses | |||||
G Class | 0.91% |
The total annual fund operating expenses shown is as stated in the fund’s prospectus current as of the date of this report. The prospectus may vary from the expense ratio shown elsewhere in this report because it is based on a different time period, includes acquired fund fees and expenses, and, if applicable, does not include fee waivers or expense reimbursements.
Data presented reflect past performance. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance shown. Total returns for periods less than one year are not annualized. Investment return and principal value will fluctuate, and redemption value may be more or less than original cost. Data assumes reinvestment of dividends and capital gains, and none of the charts reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. To obtain performance data current to the most recent month end, please call 1-800-345-2021 or visit americancentury.com. For additional information about the fund, please consult the prospectus.
2
Portfolio Commentary |
Portfolio Managers: Patricia Ribeiro and Sherwin Soo
NT Emerging Markets returned 24.62%* for the 12 months ended November 30, 2020. The fund’s benchmark, the MSCI Emerging Markets Index, returned 18.43% for the same period.
The fund outperformed its benchmark during the period, driven primarily by a combination of an overweight, relative to the benchmark, for most of the year in information technology and positive stock selection in the sector. Stock selection in communication services also added value, along with an underweight to energy. Conversely, stock selection in consumer discretionary had a significant negative relative impact. Regionally, stock selection in China and Malaysia were key drivers of relative outperformance, while stock choices in South Korea weighed on returns.
Information Technology Holdings Contributed
Holdings in the information technology sector were the primary drivers of the fund’s outperformance over the 12-month period. Notable contributors included overweight positions in China-based solar glass manufacturer Xinyi Solar Holdings, China-based data center operator GDS Holdings and Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s largest chipmaker.
Xinyi Solar’s stock price appreciated as the company continued to benefit from rapidly rising prices as supply did not meet a dramatic rise in demand, driving sales volumes higher amid lower costs for raw materials and production. China’s decarbonization efforts to address climate change underpinned Xinyi Solar’s growth. GDS continued to benefit from ongoing digitization efforts by industries in China, supporting strong demand for data centers. The company’s successful capital raise to pursue projects and capacity expansion also bolstered the stock. Shares of TSMC rallied sharply with the expansion of its addressable market. We believe high-performance computing, artificial intelligence and demand for 5G-related technology will likely continue to be key growth drivers for TSMC.
In the communication services sector, another substantial relative contributor, China-based social media and gaming giant Tencent Holdings and Russia-based search engine and online services provider Yandex drove the fund’s outperformance. Tencent’s shares continued to rally amid strong revenue growth and expectations for robust earnings and increased monetization of Tencent’s user base. Reduced social activity bolstered Tencent’s online gaming franchise. We remain constructive on Tencent’s rich game pipeline and multiple revenue streams, including cloud, financial technology and advertisements, amid an ongoing recovery in advertising. Yandex continued to gain market share across multiple businesses, including advertising, ride-sharing, e-commerce and food delivery.
Notable individual contributors included Top Glove, the Malaysia-based rubber glovemaker, and Country Garden Services Holdings, the China-based property service provider. Top Glove’s shares advanced as a surge in demand from COVID-19 drove a severe demand/supply mismatch that supported aggressive price increases. As the pandemic lingers, prices are expected to keep rising as customers continue to scramble for gloves amid the shortage. Country Garden beat earnings estimates, driven by revenue growth in value-added services and improved margins. The company continued to gain market share and enhance efficiencies through cost savings measures.
Consumer Discretionary Sector Detracted
Within consumer discretionary, lack of exposure to several China-based benchmark constituents that performed well during the period weighed on the fund’s relative return. These included food delivery, group buying and consumer review platform Meituan (formerly Meituan Dianping) and automobile manufacturer NIO. Brazil-based residential real estate firm Cyrela Brazil Realty, a holding classified as a household durables stock, also weighed on returns. Shares declined amid
expectations for a prolonged disruption from COVID-19 restrictions, and we exited our position during the first half of 2020.
*Fund returns would have been lower if a portion of the fees had not been waived.
3
Health care also weighed on relative results, driven by an underweight to the sector and a position in NMC Health, a U.K.-listed diversified health care and medical services provider in the Middle East, which we exited in May 2020. NMC’s shares were impacted by concerns surrounding the company’s financial health, and we exited the position given the lack of visibility.
Outlook
While each of the emerging markets (EM) has responded differently to COVID-19 and may face different challenges, we continue to believe the long-term case for EM stocks remains strong. We believe EM economies will likely benefit from the recovery in global demand and that the extension of highly accommodative monetary policies in prominent global markets will likely continue to push capital flows into EM.
The change in the U.S. administration is likely to reduce uncertainty and lower volatility, given the potential reduction in geopolitical risk that has, at times, weighed on EM equities. In our view, as COVID-19 vaccines roll out, the U.S. is likely to de-escalate tensions with China, which could help improve commodity prices and weaken the U.S. dollar, all positives for EM equities in 2021.
The acceleration of existing trends, aided by the pandemic, continues to drive growth in areas related to information technology. E-commerce and logistics are benefiting amid increasing adoption of online purchasing, including within previously underutilized areas such as groceries. Also, 5G network rollout and the smartphone replacement cycle support growth. We believe COVID-19 may permanently alter consumer behavior, further accelerating these trends.
The information technology (IT) sector remains a prominent overweight for the fund. We are positioned in a variety of businesses, including producers of electric vehicle batteries and solar glass. The consumer discretionary sector also remains an important overweight, particularly education holdings such as China-based TAL Education Group and New Oriental Education & Technology Group.
China continues to be a prominent position in the portfolio. Holdings include positions in IT and the online economy (media, entertainment and e-commerce). We also own names in distance learning and structural growth areas such as the 5G build-out. In our view, IT and communication services will likely continue to benefit from the COVID-19-related structural changes occurring across sectors.
4
Fund Characteristics |
NOVEMBER 30, 2020 | |||||
Top Ten Holdings | % of net assets | ||||
Taiwan Semiconductor Manufacturing Co. Ltd. | 8.7% | ||||
Tencent Holdings Ltd. | 7.5% | ||||
Alibaba Group Holding Ltd. ADR | 7.0% | ||||
Samsung Electronics Co. Ltd. | 5.7% | ||||
Naspers Ltd., N Shares | 2.7% | ||||
HDFC Bank Ltd. | 2.4% | ||||
Chailease Holding Co. Ltd. | 1.9% | ||||
Xinyi Solar Holdings Ltd. | 1.7% | ||||
Vale SA ADR | 1.7% | ||||
Samsung Electro-Mechanics Co. Ltd. | 1.6% | ||||
Types of Investments in Portfolio | % of net assets | ||||
Common Stocks | 99.3% | ||||
Temporary Cash Investments | 0.8% | ||||
Other Assets and Liabilities | (0.1)% | ||||
Investments by Country | % of net assets | ||||
China | 38.5% | ||||
South Korea | 15.8% | ||||
Taiwan | 13.9% | ||||
Brazil | 7.7% | ||||
India | 7.7% | ||||
South Africa | 4.0% | ||||
Russia | 3.2% | ||||
Mexico | 2.1% | ||||
Other Countries | 6.4% | ||||
Cash and Equivalents* | 0.7% |
*Includes temporary cash investments and other assets and liabilities.
5
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 June 1, 2020 to November 30, 2020.
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 6/1/20 | Ending Account Value 11/30/20 | Expenses Paid During Period(1) 6/1/20 - 11/30/20 | Annualized Expense Ratio(1) | |||||||||||
Actual | ||||||||||||||
G Class | $1,000 | $1,348.50 | $0.06 | 0.01% | ||||||||||
Hypothetical | ||||||||||||||
G Class | $1,000 | $1,024.95 | $0.05 | 0.01% |
(1)Expenses are equal to the class's annualized expense ratio listed in the table above, multiplied by the average account value over the period, multiplied by 183, the number of days in the most recent fiscal half-year, divided by 366, to reflect the one-half year period. Annualized expense ratio reflects actual expenses, including any applicable fee waivers or expense reimbursements and excluding any acquired fund fees and expenses.
6
Schedule of Investments |
NOVEMBER 30, 2020
Shares | Value | |||||||
COMMON STOCKS — 99.3% | ||||||||
Argentina — 1.0% | ||||||||
Globant SA(1) | 40,481 | $ | 7,637,955 | |||||
Brazil — 7.7% | ||||||||
B3 SA - Brasil Bolsa Balcao | 833,900 | 8,736,851 | ||||||
Locaweb Servicos de Internet SA(1) | 384,200 | 4,730,965 | ||||||
Magazine Luiza SA | 1,889,952 | 8,247,859 | ||||||
Raia Drogasil SA | 1,347,000 | 6,552,212 | ||||||
TOTVS SA | 817,000 | 4,178,482 | ||||||
Vale SA, ADR | 860,637 | 12,530,875 | ||||||
WEG SA | 828,000 | 11,480,166 | ||||||
56,457,410 | ||||||||
China — 38.5% | ||||||||
A-Living Smart City Services Co., Ltd., H Shares | 993,250 | 4,192,865 | ||||||
Alibaba Group Holding Ltd., ADR(1) | 193,950 | 51,078,672 | ||||||
Anhui Conch Cement Co. Ltd., H Shares | 571,000 | 3,640,791 | ||||||
China Construction Bank Corp., H Shares | 14,030,000 | 10,791,745 | ||||||
China Education Group Holdings Ltd. | 2,204,000 | 4,399,321 | ||||||
China Gas Holdings Ltd. | 1,312,600 | 4,785,842 | ||||||
China Tourism Group Duty Free Corp. Ltd., A Shares | 240,587 | 7,073,367 | ||||||
CIFI Holdings Group Co. Ltd. | 10,733,557 | 9,238,096 | ||||||
CNOOC Ltd. | 6,689,000 | 6,584,536 | ||||||
Country Garden Services Holdings Co. Ltd. | 919,000 | 5,152,526 | ||||||
GDS Holdings Ltd., ADR(1) | 117,077 | 10,540,442 | ||||||
Geely Automobile Holdings Ltd. | 2,611,000 | 7,279,135 | ||||||
Industrial & Commercial Bank of China Ltd., H Shares | 11,814,095 | 7,358,887 | ||||||
JD.com, Inc., ADR(1) | 111,885 | 9,549,385 | ||||||
Kweichow Moutai Co. Ltd., A Shares | 25,900 | 6,729,236 | ||||||
Li Ning Co. Ltd. | 1,007,000 | 5,475,949 | ||||||
Luxshare Precision Industry Co. Ltd., A Shares | 1,350,360 | 10,648,815 | ||||||
New Oriental Education & Technology Group, Inc., ADR(1) | 39,598 | 6,527,730 | ||||||
Nine Dragons Paper Holdings Ltd. | 3,493,000 | 4,561,554 | ||||||
Ping An Insurance Group Co. of China Ltd., H Shares | 766,000 | 8,972,384 | ||||||
Sany Heavy Industry Co. Ltd., A Shares | 1,426,800 | 6,653,205 | ||||||
Shenzhou International Group Holdings Ltd. | 264,000 | 4,350,030 | ||||||
TAL Education Group, ADR(1) | 84,771 | 5,939,056 | ||||||
Tencent Holdings Ltd. | 754,500 | 54,920,738 | ||||||
Wuxi Biologics, Inc.(1) | 888,000 | 8,829,749 | ||||||
Xinyi Solar Holdings Ltd. | 7,002,932 | 12,621,724 | ||||||
Zhongji Innolight Co. Ltd., A Shares | 471,508 | 3,513,377 | ||||||
281,409,157 | ||||||||
Hungary — 1.2% | ||||||||
OTP Bank Nyrt(1) | 218,931 | 8,658,246 | ||||||
India — 7.7% | ||||||||
Asian Paints Ltd. | 225,708 | 6,713,064 | ||||||
Bajaj Finance Ltd. | 88,725 | 5,821,539 | ||||||
Bata India Ltd. | 170,708 | 3,622,985 | ||||||
HDFC Bank Ltd.(1) | 922,865 | 17,798,601 |
7
Shares | Value | |||||||
Indraprastha Gas Ltd. | 541,155 | $ | 3,605,764 | |||||
Jubilant Foodworks Ltd. | 194,532 | 6,561,070 | ||||||
Nestle India Ltd. | 23,461 | 5,664,840 | ||||||
Tata Consultancy Services Ltd. | 170,333 | 6,160,399 | ||||||
55,948,262 | ||||||||
Indonesia — 1.4% | ||||||||
Bank Rakyat Indonesia Persero Tbk PT | 19,626,100 | 5,662,652 | ||||||
Telekomunikasi Indonesia Persero Tbk PT | 20,115,900 | 4,603,351 | ||||||
10,266,003 | ||||||||
Malaysia — 0.5% | ||||||||
Top Glove Corp. Bhd | 2,122,400 | 3,707,514 | ||||||
Mexico — 2.1% | ||||||||
Cemex SAB de CV, ADR | 2,368,863 | 10,896,770 | ||||||
Wal-Mart de Mexico SAB de CV | 1,668,062 | 4,390,885 | ||||||
15,287,655 | ||||||||
Philippines — 0.6% | ||||||||
Ayala Land, Inc. | 6,006,780 | 4,747,503 | ||||||
Russia — 3.2% | ||||||||
Novatek PJSC, GDR | 35,217 | 5,463,446 | ||||||
Sberbank of Russia PJSC, ADR (London) | 430,096 | 5,696,721 | ||||||
Yandex NV, A Shares(1) | 172,438 | 11,891,324 | ||||||
23,051,491 | ||||||||
South Africa — 4.0% | ||||||||
Capitec Bank Holdings Ltd.(1) | 68,760 | 5,742,125 | ||||||
Kumba Iron Ore Ltd. | 123,802 | 4,194,817 | ||||||
Naspers Ltd., N Shares(2) | 96,203 | 19,372,176 | ||||||
29,309,118 | ||||||||
South Korea — 15.8% | ||||||||
CJ Logistics Corp.(1) | 55,403 | 8,296,050 | ||||||
Cosmax, Inc. | 35,804 | 3,089,830 | ||||||
Hotel Shilla Co. Ltd. | 54,160 | 3,925,645 | ||||||
Hyundai Motor Co. | 59,165 | 9,744,422 | ||||||
LG Household & Health Care Ltd. | 2,658 | 3,637,734 | ||||||
Mando Corp. | 171,882 | 7,567,513 | ||||||
NAVER Corp. | 32,349 | 8,135,431 | ||||||
Orion Corp./Republic of Korea | 29,748 | 3,208,428 | ||||||
Samsung Biologics Co. Ltd.(1) | 6,125 | 4,387,139 | ||||||
Samsung Electro-Mechanics Co. Ltd. | 84,597 | 11,962,728 | ||||||
Samsung Electronics Co. Ltd. | 690,570 | 41,717,576 | ||||||
Samsung SDI Co. Ltd. | 19,915 | 9,625,371 | ||||||
115,297,867 | ||||||||
Taiwan — 13.9% | ||||||||
ASPEED Technology, Inc. | 91,000 | 4,510,457 | ||||||
Chailease Holding Co. Ltd. | 2,530,819 | 13,868,865 | ||||||
Giant Manufacturing Co. Ltd. | 408,000 | 4,048,454 | ||||||
Largan Precision Co. Ltd. | 36,000 | 4,058,268 | ||||||
Merida Industry Co. Ltd. | 505,000 | 4,434,428 | ||||||
President Chain Store Corp. | 358,000 | 3,255,099 | ||||||
Taiwan Semiconductor Manufacturing Co. Ltd. | 3,768,774 | 63,655,032 | ||||||
Win Semiconductors Corp. | 329,000 | 3,873,192 | ||||||
101,703,795 | ||||||||
Thailand — 1.0% | ||||||||
CP ALL PCL(1) | 1,725,700 | 3,431,451 |
8
Shares | Value | |||||||
Muangthai Capital PCL(1) | 2,030,300 | $ | 3,596,234 | |||||
7,027,685 | ||||||||
Turkey — 0.7% | ||||||||
BIM Birlesik Magazalar AS | 580,196 | 5,185,614 | ||||||
TOTAL COMMON STOCKS (Cost $495,670,067) | 725,695,275 | |||||||
TEMPORARY CASH INVESTMENTS — 0.8% | ||||||||
Repurchase Agreement, BMO Capital Markets Corp., (collateralized by various U.S. Treasury obligations, 0.625% - 1.375%, 1/31/25 - 5/15/30, valued at $2,870,434), in a joint trading account at 0.06%, dated 11/30/20, due 12/1/20 (Delivery value $2,811,524) | 2,811,519 | |||||||
Repurchase Agreement, Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 0.625%, 4/15/23, valued at $3,224,290), at 0.07%, dated 11/30/20, due 12/1/20 (Delivery value $3,161,006) | 3,161,000 | |||||||
State Street Institutional U.S. Government Money Market Fund, Premier Class | 149 | 149 | ||||||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $5,972,668) | 5,972,668 | |||||||
TOTAL INVESTMENT SECURITIES — 100.1% (Cost $501,642,735) | 731,667,943 | |||||||
OTHER ASSETS AND LIABILITIES — (0.1)% | (919,417) | |||||||
TOTAL NET ASSETS — 100.0% | $ | 730,748,526 |
MARKET SECTOR DIVERSIFICATION | |||||
(as a % of net assets) | |||||
Information Technology | 27.3 | % | |||
Consumer Discretionary | 23.1 | % | |||
Financials | 14.1 | % | |||
Communication Services | 10.8 | % | |||
Consumer Staples | 6.2 | % | |||
Materials | 5.8 | % | |||
Industrials | 4.9 | % | |||
Health Care | 2.3 | % | |||
Real Estate | 1.9 | % | |||
Energy | 1.7 | % | |||
Utilities | 1.2 | % | |||
Cash and Equivalents* | 0.7 | % |
*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.
(2)Security, or a portion thereof, is on loan. At the period end, the aggregate value of securities on loan was $16,083,036. The amount of securities on loan indicated may not correspond with the securities on loan identified because securities with pending sales are in the process of recall from the brokers. At period end, the aggregate value of the collateral held by the fund was $17,488,029, all of which is securities collateral.
See Notes to Financial Statements.
9
Statement of Assets and Liabilities |
NOVEMBER 30, 2020 | |||||
Assets | |||||
Investment securities, at value (cost of $501,642,735) — including $16,083,036 of securities on loan | $ | 731,667,943 | |||
Foreign currency holdings, at value (cost of $31,134) | 30,636 | ||||
Receivable for capital shares sold | 43 | ||||
Dividends and interest receivable | 22,573 | ||||
Securities lending receivable | 521 | ||||
Other assets | 12,590 | ||||
731,734,306 | |||||
Liabilities | |||||
Accrued foreign taxes | 985,780 | ||||
Net Assets | $ | 730,748,526 | |||
G Class Capital Shares, $0.01 Par Value | |||||
Shares authorized | 510,000,000 | ||||
Shares outstanding | 52,289,813 | ||||
Net Asset Value Per Share | $ | 13.97 | |||
Net Assets Consist of: | |||||
Capital (par value and paid-in surplus) | $ | 512,444,469 | |||
Distributable earnings | 218,304,057 | ||||
$ | 730,748,526 |
See Notes to Financial Statements.
10
Statement of Operations |
YEAR ENDED NOVEMBER 30, 2020 | |||||
Investment Income (Loss) | |||||
Income: | |||||
Dividends (net of foreign taxes withheld of $882,551) | $ | 7,352,522 | |||
Interest (net of foreign taxes withheld of $1,329) | 21,813 | ||||
Securities lending, net | 20,736 | ||||
7,395,071 | |||||
Expenses: | |||||
Management fees | 4,380,557 | ||||
Directors' fees and expenses | 14,744 | ||||
Other expenses | 65,874 | ||||
4,461,175 | |||||
Fees waived | (4,380,557) | ||||
80,618 | |||||
Net investment income (loss) | 7,314,453 | ||||
Realized and Unrealized Gain (Loss) | |||||
Net realized gain (loss) on: | |||||
Investment transactions (net of foreign tax expenses paid (refunded) of $(17,456)) | 5,081,992 | ||||
Foreign currency translation transactions | (17,338) | ||||
5,064,654 | |||||
Change in net unrealized appreciation (depreciation) on: | |||||
Investments (includes (increase) decrease in accrued foreign taxes of $(985,780)) | 117,279,166 | ||||
Translation of assets and liabilities in foreign currencies | 6,310 | ||||
117,285,476 | |||||
Net realized and unrealized gain (loss) | 122,350,130 | ||||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 129,664,583 |
See Notes to Financial Statements.
11
Statement of Changes in Net Assets |
YEARS ENDED NOVEMBER 30, 2020 AND NOVEMBER 30, 2019 | ||||||||
Increase (Decrease) in Net Assets | November 30, 2020 | November 30, 2019 | ||||||
Operations | ||||||||
Net investment income (loss) | $ | 7,314,453 | $ | 12,147,378 | ||||
Net realized gain (loss) | 5,064,654 | (20,069,885) | ||||||
Change in net unrealized appreciation (depreciation) | 117,285,476 | 60,255,917 | ||||||
Net increase (decrease) in net assets resulting from operations | 129,664,583 | 52,333,410 | ||||||
Distributions to Shareholders | ||||||||
From earnings | (12,202,414) | (36,104,267) | ||||||
Capital Share Transactions | ||||||||
Proceeds from shares sold | 344,526,986 | 100,536,971 | ||||||
Proceeds from reinvestment of distributions | 12,202,414 | 36,104,267 | ||||||
Payments for shares redeemed | (175,438,606) | (123,853,000) | ||||||
Net increase (decrease) in net assets from capital share transactions | 181,290,794 | 12,788,238 | ||||||
Net increase (decrease) in net assets | 298,752,963 | 29,017,381 | ||||||
Net Assets | ||||||||
Beginning of period | 431,995,563 | 402,978,182 | ||||||
End of period | $ | 730,748,526 | $ | 431,995,563 | ||||
Transactions in Shares of the Fund | ||||||||
Sold | 27,860,321 | 9,172,751 | ||||||
Issued in reinvestment of distributions | 1,032,353 | 3,643,216 | ||||||
Redeemed | (14,097,357) | (11,328,492) | ||||||
Net increase (decrease) in shares of the fund | 14,795,317 | 1,487,475 |
See Notes to Financial Statements.
12
Notes to Financial Statements |
NOVEMBER 30, 2020
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 or the Bloomberg Industry Classification Standard for the tobacco industry. The fund offers the G Class.
2. Significant Accounting Policies
The following is a summary of significant accounting policies consistently followed by the fund in preparation of its financial statements. The fund is an investment company and follows accounting and reporting guidance in accordance with accounting principles generally accepted in the United States of America. This may require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from these estimates. Management evaluated the impact of events or transactions occurring through the date the financial statements were issued that would merit recognition or disclosure.
Investment Valuations — The fund determines the fair value of its investments and computes its net asset value (NAV) 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 NAV 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 NAV 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. The fund may apply a model-derived factor to the closing price of equity securities traded on foreign securities exchanges. The factor is based on observable market data as provided by an independent pricing service.
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Security Transactions — Security transactions are accounted for as of the trade date. Net realized gains and losses are determined on the identified cost basis, which is also used for federal income tax purposes. 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 less foreign taxes withheld, if any, is recorded on the accrual basis and includes accretion of discounts and amortization of premiums. Securities lending income is net of fees and rebates earned by the lending agent for its securities.
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.
Segregated Assets — In accordance with the 1940 Act, the fund segregates assets on its books and records to cover certain types of investment securities and other financial instruments. ACIM monitors, on a daily basis, the securities segregated to ensure the fund designates a sufficient amount of liquid assets, marked-to-market daily. The fund may also receive assets or be required to pledge assets at the custodian bank or with a broker for collateral requirements.
Income Tax Status — It is the fund’s policy to distribute substantially all net investment income and net realized gains to shareholders and to otherwise qualify as a regulated investment company under provisions of the Internal Revenue Code. Accordingly, no provision has been made for income taxes. The fund files U.S. federal, state, local and non-U.S. tax returns as applicable. The fund's tax returns are subject to examination by the relevant taxing authority until expiration of the applicable statute of limitations, which is generally three years from the date of filing but can be longer in certain jurisdictions. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination and for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Distributions to Shareholders — Distributions from net investment income 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.
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Indemnifications — Under the corporation’s organizational documents, its officers and directors are indemnified against certain liabilities arising out of the performance of their duties to the fund. In addition, in the normal course of business, the fund enters into contracts that provide general indemnifications. The maximum exposure under these arrangements is unknown as this would involve future claims that may be made against a fund. The risk of material loss from such claims is considered by management to be remote.
Securities Lending — Securities are lent to qualified financial institutions and brokers. State Street Bank & Trust Co. serves as securities lending agent to the fund pursuant to a Securities Lending Agreement. The lending of securities exposes the fund to risks such as: the borrowers may fail to return the loaned securities, the borrowers may not be able to provide additional collateral, the fund may experience delays in recovery of the loaned securities or delays in access to collateral, or the fund may experience losses related to the investment collateral. To minimize certain risks, loan counterparties pledge collateral in the form of cash and/or securities. The lending agent has agreed to indemnify the fund in the case of default of any securities borrowed. Cash collateral received is invested in the State Street Navigator Securities Lending Government Money Market Portfolio, a money market mutual fund registered under the 1940 Act. The loans may also be secured by U.S. government securities in an amount at least equal to the market value of the securities loaned, plus accrued interest and dividends, determined on a daily basis and adjusted accordingly. By lending securities, the fund seeks to increase its net investment income through the receipt of interest and fees. Such income is reflected separately within the Statement of Operations. The value of loaned securities and related collateral outstanding at period end, if any, are shown on a gross basis within the Schedule of Investments and Statement of Assets and Liabilities.
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, 54% of the shares of the fund. Related parties do not invest in the fund for the purpose of exercising management or control.
Management Fees — The corporation has entered into a management agreement with ACIM, under which ACIM provides the fund with investment advisory and management services in exchange for a single, unified management fee (the fee). The agreement provides that ACIM will pay all expenses of managing and operating the fund, except brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), and extraordinary expenses. The fee is computed and accrued daily based on the daily net assets of the fund and paid monthly in arrears. The annual management fee is 0.90%. The investment advisor agreed to waive the fund's management fee in its entirety. The investment advisor expects this waiver to remain in effect permanently and cannot terminate it without the approval of the Board of Directors. The annual management fee for the period ended November 30, 2020 was 0.00% after waiver.
Directors' Fees and Expenses — The Board of Directors is responsible for overseeing the investment advisor’s management and operations of the fund. The directors receive detailed information about the fund and its investment advisor regularly throughout the year, and meet at least quarterly with management of the investment advisor to review reports about fund operations. The fund’s officers do not receive compensation from the fund.
Interfund Transactions — The fund may enter into security transactions with other American Century Investments funds and other client accounts of the investment advisor, in accordance with the 1940 Act rules and procedures adopted by the Board of Directors. The rules and procedures require, among other things, that these transactions be effected at the independent current market price of the security. During the period, the interfund sales were $14,707 and there were no interfund purchases. The effect of interfund transactions on the Statement of Operations was $4,734 in net realized gain (loss) on investment transactions.
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments and in kind transactions, for the period ended November 30, 2020 were $310,846,942 and $295,123,597, respectively.
On August 13, 2020, the fund received investment securities valued at $167,670,525 from a purchase in kind from other products managed by the fund’s investment advisor. A purchase in kind occurs when a fund receives securities into its portfolio in lieu of cash as payment from a purchasing shareholder.
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5. Fair Value Measurements
The fund’s investments valuation process is based on several considerations and may use multiple inputs to determine the fair value of the investments held by the fund. In conformity with accounting principles generally accepted in the United States of America, the inputs used to determine a valuation are classified into three broad levels.
•Level 1 valuation inputs consist of unadjusted quoted prices in an active market for identical investments.
•Level 2 valuation inputs consist of direct or indirect observable market data (including quoted prices for comparable investments, evaluations of subsequent market events, interest rates, prepayment speeds, credit risk, etc.). These inputs also consist of quoted prices for identical investments initially expressed in local currencies that are adjusted through translation into U.S. dollars.
•Level 3 valuation inputs consist of unobservable data (including a fund’s own assumptions).
The level classification is based on the lowest level input that is significant to the fair valuation measurement. The valuation inputs are not necessarily an indication of the risks associated with investing in these securities or other financial instruments.
The following is a summary of the level classifications as of period end. The Schedule of Investments provides additional information on the fund’s portfolio holdings.
Level 1 | Level 2 | Level 3 | |||||||||
Assets | |||||||||||
Investment Securities | |||||||||||
Common Stocks | |||||||||||
Argentina | $ | 7,637,955 | — | — | |||||||
Brazil | 12,530,875 | $ | 43,926,535 | — | |||||||
China | 83,635,285 | 197,773,872 | — | ||||||||
Mexico | 10,896,770 | 4,390,885 | — | ||||||||
Russia | 11,891,324 | 11,160,167 | — | ||||||||
Other Countries | — | 341,851,607 | — | ||||||||
Temporary Cash Investments | 149 | 5,972,519 | — | ||||||||
$ | 126,592,358 | $ | 605,075,585 | — |
6. Risk Factors
The value of the fund’s shares will go up and down, sometimes rapidly or unpredictably, based on the performance of the securities owned by the fund and other factors generally affecting the securities market. Market risks, including political, regulatory, economic and social developments, can affect the value of the fund’s investments. Natural disasters, public health emergencies, terrorism and other unforeseeable events may lead to increased market volatility and may have adverse long-term effects on world economies and markets generally.
There are certain risks involved in investing in foreign securities. These risks include those resulting from political events (such as civil unrest, national elections and imposition of exchange controls), social and economic events (such as labor strikes and rising inflation), and natural disasters. Securities of foreign issuers may be less liquid and more volatile. Investing in emerging markets or a significant portion of assets in one country or region may accentuate these risks.
The fund is owned by a relatively small number of shareholders, and in the event such shareholders redeem, the ongoing operations of the fund may be at risk.
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7. Federal Tax Information
On December 22, 2020, the fund declared and paid per-share distributions of $0.2535 from net investment income to shareholders of record on December 21, 2020.
The tax character of distributions paid during the years ended November 30, 2020 and November 30, 2019 were as follows:
2020 | 2019 | |||||||
Distributions Paid From | ||||||||
Ordinary income | $ | 12,202,414 | $ | 5,981,675 | ||||
Long-term capital gains | — | $ | 30,122,592 |
The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
As of period end, the federal tax cost of investments and the components of distributable earnings on a tax-basis were as follows:
Federal tax cost of investments | $ | 509,280,043 | |||
Gross tax appreciation of investments | $ | 228,900,884 | |||
Gross tax depreciation of investments | (6,512,984) | ||||
Net tax appreciation (depreciation) of investments | 222,387,900 | ||||
Net tax appreciation (depreciation) on translation of assets and liabilities in foreign currencies | (993,209) | ||||
Net tax appreciation (depreciation) | $ | 221,394,691 | |||
Undistributed ordinary income | $ | 12,749,681 | |||
Accumulated short-term capital losses | $ | (15,840,315) |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the realization to ordinary income for tax purposes of unrealized gains on investments in passive foreign investment companies.
Accumulated capital losses 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.
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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) | |||||||||||||||||||||||||||||||||
G Class | |||||||||||||||||||||||||||||||||||||||||||||||
2020 | $11.52 | 0.18 | 2.60 | 2.78 | (0.33) | — | (0.33) | $13.97 | 24.62% | 0.02% | 0.92% | 1.50% | 0.60% | 61% | $730,749 | ||||||||||||||||||||||||||||||||
2019 | $11.19 | 0.31 | 0.94 | 1.25 | (0.15) | (0.77) | (0.92) | $11.52 | 12.54% | 0.01% | 0.91% | 2.80% | 1.90% | 50% | $431,996 | ||||||||||||||||||||||||||||||||
2018 | $14.54 | 0.23 | (2.00) | (1.77) | (0.14) | (1.44) | (1.58) | $11.19 | (13.75)% | 0.01% | 0.95% | 1.78% | 0.84% | 66% | $402,978 | ||||||||||||||||||||||||||||||||
2017 | $10.27 | 0.09 | 4.26 | 4.35 | (0.08) | — | (0.08) | $14.54 | 42.75% | 0.69% | 1.25% | 0.74% | 0.18% | 56% | $481,494 | ||||||||||||||||||||||||||||||||
2016 | $9.75 | 0.05 | 0.50 | 0.55 | (0.03) | — | (0.03) | $10.27 | 5.68% | 1.18% | 1.18% | 0.53% | 0.53% | 75% | $394,433 |
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.
See Notes to Financial Statements.
Report of Independent Registered Public Accounting Firm |
To the Shareholders and the Board of Directors of American Century World Mutual Funds, Inc.:
Opinion on the Financial Statements and Financial Highlights
We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of NT Emerging Markets Fund (the “Fund”), one of the funds constituting the American Century World Mutual Funds, Inc., as of November 30, 2020, the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of NT Emerging Markets Fund of the American Century World Mutual Funds, Inc. as of November 30, 2020, and the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on the Fund’s financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. Our procedures included confirmation of securities owned as of November 30, 2020, by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
DELOITTE & TOUCHE LLP
Kansas City, Missouri
January 19, 2021
We have served as the auditor of one or more American Century investment companies since 1997.
19
Management |
The Board of Directors
The individuals listed below serve as directors of the funds. Each director will continue to serve in this capacity until death, retirement, resignation or removal from office. The board has adopted a mandatory retirement age for directors who are not “interested persons,” as that term is defined in the Investment Company Act (independent directors). Independent directors shall retire by December 31 of the year in which they reach their 75th birthday.
Mr. Thomas is an “interested person” because he currently serves as President and Chief Executive Officer of American Century Companies, Inc. (ACC), the parent company of American Century Investment Management, Inc. (ACIM or the advisor). The other directors (more than three-fourths of the total number) are independent. They are not employees, directors or officers of, and have no financial interest in, ACC or any of its wholly owned, direct or indirect, subsidiaries, including ACIM, American Century Investment Services, Inc. (ACIS) and American Century Services, LLC (ACS), and they do not have any other affiliations, positions or relationships that would cause them to be considered “interested persons” under the Investment Company Act. The directors serve in this capacity for seven (in the case of Jonathan S. Thomas, 16; and Stephen E. Yates, 8) registered investment companies in the American Century Investments family of funds.
The following table presents additional information about the directors. The mailing address for each director is 4500 Main Street, Kansas City, Missouri 64111.
Name (Year of Birth) | Position(s) Held with Funds | Length of Time Served | Principal Occupation(s) During Past 5 Years | Number of American Century Portfolios Overseen by Director | Other Directorships Held During Past 5 Years | ||||||||||||
Independent Directors | |||||||||||||||||
Thomas W. Bunn (1953) | Director | Since 2017 | Retired | 62 | SquareTwo Financial; Barings (formerly Babson Capital Funds Trust) (2013 to 2016) | ||||||||||||
Chris H. Cheesman (1962) | Director | Since 2019 | Retired. Senior Vice President & Chief Audit Executive, AllianceBernstein (1999 to 2018) | 62 | None | ||||||||||||
Barry Fink (1955) | Director | Since 2012 (independent since 2016) | Retired | 62 | None | ||||||||||||
Rajesh K. Gupta (1960) | Director | Since 2019 | Partner Emeritus, SeaCrest Investment Management and SeaCrest Wealth Management (2019 to Present); Chief Executive Officer and Chief Investment Officer, SeaCrest Investment Management (2006 to 2019); Chief Executive Officer and Chief Investment Officer, SeaCrest Wealth Management (2008 to 2019) | 62 | None |
20
Name (Year of Birth) | Position(s) Held with Funds | Length of Time Served | Principal Occupation(s) During Past 5 Years | Number of American Century Portfolios Overseen by Director | Other Directorships Held During Past 5 Years | ||||||||||||
Independent Directors | |||||||||||||||||
Lynn Jenkins (1963) | Director | Since 2019 | Consultant, LJ Strategies (2019 to present); United States Representative, U.S. House of Representatives (2009 to 2018) | 62 | MGP Ingredients, Inc. | ||||||||||||
Jan M. Lewis (1957) | Director | Since 2011 | Retired | 62 | None | ||||||||||||
John R. Whitten (1946) | Director | Since 2008 | Retired | 62 | Onto Innovation Inc. (2019 to 2020); Rudolph Technologies, Inc. (2006 to 2019) | ||||||||||||
Stephen E. Yates (1948) | Director and Chairman of the Board | Since 2012 (Chairman since 2018) | Retired | 87 | None | ||||||||||||
Interested Director | |||||||||||||||||
Jonathan S. Thomas (1963) | Director | Since 2007 | President and Chief Executive Officer, ACC (2007 to present). Also serves as Chief Executive Officer, ACS; Executive Vice President, ACIM; Director, ACC, ACIM and other ACC subsidiaries | 125 | None |
The Statement of Additional Information has additional information about the fund's directors and is available without charge, upon request, by calling 1-800-345-2021.
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Officers
The following table presents certain information about the executive officers of the funds. Each officer serves as an officer for each of the 16 (in the case of Robert J. Leach, 15) investment companies in the American Century family of funds. No officer is compensated for his or her service as an officer of the funds. The listed officers are interested persons of the funds and are appointed or re-appointed on an annual basis. The mailing address for each officer listed below is 4500 Main Street, Kansas City, Missouri 64111.
Name (Year of Birth) | Offices with the Funds | Principal Occupation(s) During the Past Five Years | ||||||
Patrick Bannigan (1965) | President since 2019 | Executive Vice President and Director, ACC (2012 to present); Chief Financial Officer, Chief Accounting Officer and Treasurer, ACC (2015 to present). Also serves as President, ACS; Vice President, ACIM; Chief Financial Officer, Chief Accounting Officer and/or Director, ACIM, ACS and other ACC subsidiaries | ||||||
R. Wes Campbell (1974) | Chief Financial Officer and Treasurer since 2018 | Vice President, ACS, (2020 to present); Investment Operations and Investment Accounting, ACS (2000 to present) | ||||||
Amy D. Shelton (1964) | Chief Compliance Officer and Vice President since 2014 | Chief Compliance Officer, American Century funds, (2014 to present); Chief Compliance Officer, ACIM (2014 to present); Chief Compliance Officer, ACIS (2009 to present). Also serves as Vice President, ACIS | ||||||
Charles A. Etherington (1957) | General Counsel since 2007 and Senior Vice President since 2006 | Attorney, ACC (1994 to present); Vice President, ACC (2005 to present); General Counsel, ACC (2007 to present). Also serves as General Counsel, ACIM, ACS, ACIS and other ACC subsidiaries; and Senior Vice President, ACIM and ACS | ||||||
C. Jean Wade (1964) | Vice President since 2012 | Senior Vice President, ACS (2017 to present); Vice President, ACS (2000 to 2017) | ||||||
Robert J. Leach (1966) | Vice President since 2006 | Vice President, ACS (2000 to present) | ||||||
David H. Reinmiller (1963) | Vice President since 2000 | Attorney, ACC (1994 to present). Also serves as Vice President, ACIM and ACS | ||||||
Ward D. Stauffer (1960) | Secretary since 2005 | Attorney, ACC (2003 to present) |
22
Approval of Management Agreement |
At a meeting held on June 24, 2020, the Fund’s Board of Directors (the "Board") unanimously approved the renewal of the 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, contracts for investment advisory services are required to be reviewed, evaluated, and approved by a majority of a fund’s directors (the “Directors”), including a majority of the independent Directors, each year.
Prior to its consideration of the renewal of the management agreement, the Directors requested and reviewed extensive data and information compiled by the Advisor and certain independent providers of evaluation data concerning the Fund and the services provided to the Fund by the Advisor. This review was in addition to the oversight and evaluation undertaken by the Board and its committees on a continual basis and the information received was supplemental to the extensive information that the Board and its committees receive and consider throughout the year.
In connection with its consideration of the renewal of the management agreement, the Board’s review and evaluation of the services provided by the Advisor included, but was not limited to, the following:
•the nature, extent, and quality of investment management, shareholder services, and other services provided and to be provided to the Fund;
•the wide range of other programs and services provided and to be provided to the Fund and its shareholders on a routine and non-routine basis;
•the Fund’s investment performance, including data comparing the Fund's performance to appropriate benchmarks and/or a peer group of other mutual funds with similar investment objectives and strategies;
•the cost of owning the Fund compared to the cost of owning similar funds;
•the compliance policies, procedures, and regulatory experience of the Advisor and the Fund's service providers;
•the Advisor’s strategic plans;
•the Advisor’s business continuity plans and specifically its response to the COVID-19 pandemic;
•financial data showing the cost of services provided to the Fund, the profitability of the Fund to the Advisor, and the overall profitability of the Advisor;
•possible economies of scale associated with the Advisor’s management of the Fund and other accounts;
•services provided and charges to the Advisor's other investment management clients;
•acquired fund fees and expenses;
•payments and practices in connection with financial intermediaries holding shares of the Fund and the services provided by intermediaries in connection therewith; and
•possible collateral benefits to the Advisor from the management of the Fund.
The Board held two meetings to consider the renewal. The independent Directors also met in private session three times to review and discuss the information provided in response to their request. The independent Directors held active discussions with the Advisor regarding the renewal of the management agreement, requesting supplemental information, and reviewing information provided by the Advisor in response thereto. The independent Directors had the benefit of the advice of their independent counsel throughout the process.
Factors Considered
The Directors considered all of the information provided by the Advisor, the independent data providers, and 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
23
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. In deciding to renew the management agreement, the Board based its decision on a number of factors, including without limitation the following:
Nature, Extent and Quality of Services — Generally. Under the management agreement, the Advisor is responsible for providing or arranging for all services necessary for the operation of the Fund. The Board noted that the Advisor provides or arranges at its own expense a wide variety of services including without limitation the following:
•constructing and designing the Fund
•portfolio research and security selection
•initial capitalization/funding
•securities trading
•Fund administration
•custody of Fund assets
•daily valuation of the Fund’s portfolio
•shareholder servicing and transfer agency, including shareholder confirmations, recordkeeping, and communications
•legal services (except the independent Directors’ counsel)
•regulatory and portfolio compliance
•financial reporting
•marketing and distribution (except amounts paid by the Fund under Rule 12b-1 plans)
The Board noted that many of these services have expanded over time in terms of both quantity and complexity in response to shareholder demands, competition in the industry, changing distribution channels, and the changing regulatory environment.
Investment Management Services. The nature of the investment management services provided to the Fund is quite complex and allows Fund shareholders access to professional money management, instant diversification of their investments within an asset class, the opportunity to easily diversify among asset classes by investing in or exchanging among various American Century Investments funds, and liquidity. In evaluating investment performance, the Board expects the Advisor to manage the Fund in accordance with its investment objectives and approved strategies. Further, the Directors recognize that the Advisor has an obligation to monitor trading activities, and in particular to seek the best execution of fund trades, and to evaluate the use of and payment for research. In providing these services, the Advisor utilizes teams of investment professionals (portfolio managers, analysts, research assistants, and securities traders) who require extensive information technology, research, training, compliance, and other systems to conduct their business. The Board, directly and through its Fund Performance Review Committee, provides oversight of the investment performance process. It regularly reviews investment performance information for the Fund, together with comparative information for appropriate benchmarks and/or peer groups of similarly-managed funds, over different time horizons. The Directors also review investment performance information during the management agreement renewal process. If performance concerns are identified, the Fund receives special reviews until performance improves, during which the Board discusses with the Advisor the reasons for such results (e.g., market conditions, security selection) and any efforts being undertaken to improve performance. The Fund’s performance was above its benchmark for the one-, three-, five-, and ten-year periods reviewed by the Board. The Board found the investment management services provided by the Advisor to the Fund to be satisfactory and consistent with the management agreement.
Shareholder and Other Services. Under the management agreement, the Advisor provides the Fund with a comprehensive package of transfer agency, shareholder, and other services. The Board, directly and through its various committees, regularly reviews reports and evaluations of such services at its regular meetings. These reports include, but are not limited to, information
24
regarding the operational efficiency and accuracy of the shareholder and transfer agency services provided, staffing levels, shareholder satisfaction, technology support (including cyber security), new products and services offered to Fund shareholders, securities trading activities, portfolio valuation services, auditing services, and legal and operational compliance activities. The Board found the services provided by the Advisor to the Fund under the management agreement to be competitive and of high quality.
COVID-19 Response. During 2020, much of the world experienced unprecedented change and challenges from the impacts of the rapidly evolving, worldwide spread of the COVID-19 virus. The Board evaluated the Advisor’s response to the COVID-19 pandemic and its impact on service to the Fund. The Board found that Fund shareholders have continued to receive the Advisor’s investment management and other services without disruption, and Advisor personnel have demonstrated great resiliency in providing those services. The Board, directly and through its Audit Committee, continues to monitor the impact of the pandemic and the response of each of the Fund’s service providers.
Costs of Services and Profitability. The Advisor provides detailed information concerning its cost of providing various services to the Fund, its profitability in managing the Fund (pre- and post-distribution), its overall profitability, and its financial condition. The Directors have reviewed with the Advisor the methodology used to prepare this financial information. This information is considered in evaluating the Advisor’s financial condition, its ability to continue to provide services under the management agreement, and the reasonableness of the current management fee. The Board concluded that the Advisor’s profits were reasonable in light of the services provided to the Fund.
Ethics. The Board generally considers the Advisor’s commitment to providing quality services to shareholders and to conducting its business ethically. They noted that the Advisor’s practices generally meet or exceed industry best practices.
Economies of Scale. The Board also reviewed information provided by the Advisor regarding the possible existence of economies of scale in connection with the management of the Fund. The Board concluded that economies of scale are difficult to measure and predict with precision, especially on a fund-by-fund basis. The Board concluded that the Advisor is appropriately sharing economies of scale, to the extent they exist, through its competitive fee structure, offering competitive fees from fund inception, and through reinvestment in its business, infrastructure, investment capabilities and initiatives to provide shareholders additional content and services.
Comparison to Other Funds’ Fees. The management agreement provides that the Fund pays the Advisor a single, all-inclusive (or unified) management fee for providing all services necessary for the management and operation of the Fund, other than brokerage expenses, expenses attributable to short sales, taxes, interest, extraordinary expenses, fees and expenses of the Fund’s independent Directors (including their independent legal counsel), and expenses incurred in connection with the provision of shareholder services and distribution services under a plan adopted pursuant to Rule 12b-1 under the Investment Company Act. 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 any applicable Rule 12b-1 distribution fees, all other components of the total fees charged by these other funds may be increased without shareholder approval. The Board believes the unified fee structure is a benefit to Fund shareholders because it clearly discloses to shareholders the cost of owning Fund shares, and, since 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 comparing the Fund’s unified fee to the total expense ratios of its peers. The unified fee charged to shareholders
25
of the Fund was below the median of the total expense ratios of the Fund’s peer expense universe. The Board concluded that the management fee paid by the Fund to the Advisor under the management agreement is reasonable in light of the services provided to the Fund.
Comparison to Fees and Services Provided to Other Clients of the Advisor. The Board also requested and received information from the Advisor concerning the nature of the services, fees, costs, and profitability of its advisory services to advisory clients other than the Fund. They observed that these varying types of client accounts require different services and involve different regulatory and entrepreneurial risks than the management of the Fund. The Board analyzed this information and concluded that the fees charged and services provided to the Fund were reasonable by comparison.
Payments to Intermediaries. The Directors also requested and received a description of payments made to intermediaries by the Fund and the Advisor and services provided in response thereto. These payments include various payments made by the Fund or the Advisor to different types of intermediaries and recordkeepers for distribution and service activities provided for the Fund. The Directors reviewed such information and received representations from the Advisor that all such payments by the Fund were made pursuant to the Fund's Rule 12b-1 Plan and that all such payments by the Advisor were made from the Advisor’s resources and reasonable profits. The Board found such payments to be reasonable in scope and purpose.
Collateral or “Fall-Out” Benefits Derived by the Advisor. The Board considered the possible existence of collateral benefits the Advisor may receive as a result of its relationship with the Fund. They concluded that the Advisor’s primary business is managing mutual funds and it generally does not use fund or shareholder information to generate profits in other lines of business, and therefore does not derive any significant collateral benefits from them. To the extent there are potential collateral benefits, the board has been advised and has taken this into consideration in its review of the management contract with the Fund. The Board noted that additional assets from other clients may offer the Advisor some benefit from increased leverage with service providers and counterparties. Additionally, the Advisor may receive proprietary research from broker-dealers that execute fund portfolio transactions, which the Board concluded is likely to benefit other clients of the Advisor, as well as Fund shareholders. The Board also determined that the Advisor is able to provide investment management services to certain clients other than the Fund, at least in part, due to its existing infrastructure built to serve the fund complex. The Board concluded that appropriate allocation methodologies had been employed to assign resources and the cost of those resources to these other clients.
Existing Relationship. The Board also considered whether there was any reason for not continuing the existing arrangement with the Advisor. In this regard, the Board was mindful of the potential disruptions of the Fund’s operations and various risks, uncertainties, and other effects that could occur as a result of a decision not to continue such relationship. In particular, the Board recognized that most shareholders have invested in the Fund on the strength of the Advisor’s industry standing and reputation and in the expectation that the Advisor will have a continuing role in providing advisory services to the Fund.
Conclusion of the Directors. As a result of this process, the Board, including all of the independent Directors, taking into account all of the factors discussed above and the information provided by the Advisor and others in connection with its review and throughout the year, determined that the management fee is fair and reasonable in light of the services provided and that the investment management agreement between the Fund and the Advisor should be renewed.
26
Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain retirement accounts are subject to federal income tax withholding, unless you elect not to have withholding apply*. Tax will be withheld on the total amount withdrawn even though you may be receiving amounts that are not subject to withholding, such as nondeductible contributions. In such case, excess amounts of withholding could occur. You may adjust your withholding election so that a greater or lesser amount will be withheld.
If you don’t want us to withhold on this amount, you must notify us to not withhold the federal income tax. You may notify us in writing or in certain situations by telephone or through other electronic means. For systematic withdrawals, your withholding election will remain in effect until revoked or changed by filing a new election. You have the right to revoke your election at any time and change your withholding percentage for future distributions.
Remember, even if you elect not to have income tax withheld, you are liable for paying income tax on the taxable portion of your withdrawal. If you elect not to have income tax withheld or you don’t have enough income tax withheld, you may be responsible for payment of estimated tax. You may incur penalties under the estimated tax rules if your withholding and estimated tax payments are not sufficient. You can reduce or defer the income tax on a distribution by directly or indirectly rolling such distribution over to another IRA or eligible plan. You should consult your tax advisor for additional information.
State tax will be withheld if, at the time of your distribution, your address is within one of the mandatory withholding states and you have federal income tax withheld (or as otherwise required by state law). State taxes will be withheld from your distribution in accordance with the respective state rules.
*Some 403(b), 457 and qualified retirement plan distributions may be subject to 20% mandatory withholding, as they are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
A description of the policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund is available without charge, upon request, by calling 1-800-345-2021. It is also available on American Century Investments’ website at americancentury.com/proxy 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 americancentury.com/proxy. 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 as an exhibit to its reports on
Form N-PORT. The fund’s Form N-PORT reports are available on the SEC’s website at sec.gov.
The fund also makes its complete schedule of portfolio holdings for the most recent quarter of its
fiscal year available on its website at americancentury.com and, upon request, by calling
1-800-345-2021.
27
Other Tax Information
The following information is provided pursuant to provisions of the Internal Revenue Code.
The fund hereby designates up to the maximum amount allowable as qualified dividend income for
the fiscal year ended November 30, 2020.
For the fiscal year ended November 30, 2020, the fund intends to pass through to shareholders
foreign source income of $8,235,073 and foreign taxes paid of $831,457, or up to the maximum
amount allowable, as a foreign tax credit. Foreign source income and foreign tax expense per
outstanding share on November 30, 2020 are $0.1575 and $0.0159, respectively.
28
Notes |
29
Notes |
30
Notes |
31
Notes |
32
![]() | ||||||||
Contact Us | americancentury.com | |||||||
Automated Information Line | 1-800-345-8765 | |||||||
Investor Services Representative | 1-800-345-2021 or 816-531-5575 | |||||||
Investors Using Advisors | 1-800-378-9878 | |||||||
Business, Not-For-Profit, Employer-Sponsored Retirement Plans | 1-800-345-3533 | |||||||
Banks and Trust Companies, Broker-Dealers, Financial Professionals, Insurance Companies | 1-800-345-6488 | |||||||
Telecommunications Relay Service for the Deaf | 711 | |||||||
American Century 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. | ||||||||
©2021 American Century Proprietary Holdings, Inc. All rights reserved. CL-ANN-91023 2101 |
![image171.jpg](https://capedge.com/proxy/N-CSR/0000872825-21-000006/image171.jpg)
Annual Report | |||||
November 30, 2020 | |||||
NT International Growth Fund | |||||
G Class (ACLNX) |
Table of Contents |
Performance | |||||
Portfolio Commentary | |||||
Fund Characteristics | |||||
Shareholder Fee Example | |||||
Schedule of Investments | |||||
Statement of Assets and Liabilities | |||||
Statement of Operations | |||||
Statement of Changes in Net Assets | |||||
Notes to Financial Statements | |||||
Financial Highlights | |||||
Report of Independent Registered Public Accounting Firm | |||||
Management | |||||
Approval of Management Agreement | |||||
Additional Information |
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.
Performance |
Total Returns as of November 30, 2020 | |||||||||||||||||
Average Annual Returns | |||||||||||||||||
Ticker Symbol | 1 year | 5 years | 10 years | Inception Date | |||||||||||||
G Class | ACLNX | 26.30% | 10.77% | 8.68% | 5/12/06 | ||||||||||||
MSCI EAFE Index | — | 6.37% | 6.18% | 5.85% | — | ||||||||||||
MSCI EAFE Growth Index | — | 16.01% | 9.28% | 7.81% | — |
Fund returns would have been lower if a portion of the fees had not been waived.
Growth of $10,000 Over 10 Years | ||
$10,000 investment made November 30, 2010 | ||
![chart-9dff897c50984bd68d01.jpg](https://capedge.com/proxy/N-CSR/0000872825-21-000006/chart-9dff897c50984bd68d01.jpg)
Value on November 30, 2020 | |||||
G Class — $22,997 | |||||
MSCI EAFE Index — $17,659 | |||||
MSCI EAFE Growth Index — $21,217 | |||||
Ending value of G Class would have been lower if a portion of the fees had not been waived.
Total Annual Fund Operating Expenses | |||||
G Class | 0.84% |
The total annual fund operating expenses shown is as stated in the fund’s prospectus current as of the date of this report. The prospectus may vary from the expense ratio shown elsewhere in this report because it is based on a different time period, includes acquired fund fees and expenses, and, if applicable, does not include fee waivers or expense reimbursements.
Data presented reflect past performance. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance shown. Total returns for periods less than one year are not annualized. Investment return and principal value will fluctuate, and redemption value may be more or less than original cost. Data assumes reinvestment of dividends and capital gains, and none of the charts reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. To obtain performance data current to the most recent month end, please call 1-800-345-2021 or visit americancentury.com. For additional information about the fund, please consult the prospectus.
2
Portfolio Commentary |
Portfolio Managers: Raj Gandhi and Jim Zhao
Performance Summary
NT International Growth returned 26.30%* for the fiscal year ended November 30, 2020, outperforming its benchmark, the MSCI EAFE Index, which returned 6.37%.
Stock selection across a broad range of sectors propelled the fund’s outperformance, including information technology, financials, consumer discretionary, energy and industrials, while consumer staples holdings detracted modestly. From a geographic perspective, Japan-based holdings benefited returns as did stock selection in the U.K. and positioning in China.
The COVID-19 pandemic precipitated a health and economic crisis that plunged non-U.S. equities into bear market territory in the first quarter of 2020 as global supply chains were disrupted and lockdowns brought global demand to a halt. Our focus on firms with sustainable growth tied to company-specific structural or secular drivers rather than those levered to the economic cycle helped the portfolio weather the downturn. Stocks roared back amid record amounts of fiscal and monetary stimulus and earnings results that exceeded overly pessimistic expectations. Volatility persisted in the second half of the year, albeit less extreme, as the global economy recovered amid concerns about a second wave of the pandemic and the U.S. elections. Toward the end of the reporting period, progress on multiple coronavirus vaccines fueled investor optimism over the potential for a return to more normal economic activity in 2021 and drove strong gains among non-U.S. equities.
Stock Selection Key to Outperformance
A diverse array of information technology holdings fueled the fund’s outperformance. Payment processor Adyen gained on strong earnings amid the acceleration of beneficial trends, such as the shift from cash to card payments and rise of online shopping. Shopify’s stock also advanced on new customer growth and pandemic-driven e-commerce trends as its online store platform and services helped merchants quickly adapt to selling online. Data center operator GDS Holdings benefited from demand for increased capacity with the ongoing rise of cloud computing and the accelerated need for remote access to work, school and entertainment. Semiconductor manufacturer Infineon Technologies experienced sharp earnings acceleration driven by recovery in automobile manufacturing and the shift to electric and hybrid vehicles.
Among financials, our disciplined selection process resulted in an underweight position relative to the benchmark in banks, which proved beneficial as low interest rates constrained banks’ earnings and hampered stock performance. Portfolio holding London Stock Exchange Group benefited from synergies related to the Refinitiv acquisition and the shift in its business model to subscription-based data services.
Online apparel retailer ASOS, one the fund’s top individual performers, drove a large portion of the consumer discretionary contribution. The stock advanced sharply propelled by strong reported results. ASOS benefited from improved consumer spending trends and the ongoing shift to online shopping. Sales increased amid higher demand, and profitability improved with a lower rate of returned orders.
*Fund returns would have been lower if a portion of the fees had not been waived.
3
Our focus on sustainable earnings growth kept us away from most traditional oil and gas energy stocks. However, our selective investment in Neste, a leading producer of renewable diesel and jet fuel, ranked among the top individual contributors to performance. The stock advanced on strong growth in demand for renewable diesel. Neste’s proprietary technology allows for a variety of inputs, including animal waste, and results in transportation fuel that produces 90% less carbon dioxide emissions than traditional diesel.
Among industrials, MonotaRO, the largest online distributor of industrial components in Japan, benefited from an acceleration in new customer acquisition as companies transitioned to online at a faster pace due to the pandemic. The firm posted double-digit revenue growth at a time when overall industrial activity in Japan declined.
Notable individual contributors also included Lonza Group, a contract manufacturer of drugs and specialty ingredients for the pharmaceuticals and biotechnology industries. The company reported strong results driven by continued demand for outsourced manufacturing services by pharmaceuticals and biotechnology firms. In addition, the stock reacted positively to Lonza’s deal to manufacture the majority of Moderna’s COVID-19 vaccine.
On the downside, Melrose Industries detracted from the fund’s performance. The turnaround specialist’s stock fell on significant weakness in the automotive and aerospace markets. A highly leveraged balance sheet raised potential liquidity concerns, and extreme end-market demand pressures reduced prospects for near-term earnings growth from synergies related to its acquisition of GKN. We sold the stock.
Portfolio Positioning
We remain committed to our disciplined, bottom-up process of identifying companies exhibiting accelerating, sustainable growth. This year has been volatile and one where we have had multiple pivots in our outlook due to COVID-19. While uncertainties remain over the current surge in coronavirus cases and additional lockdowns, we believe the efficacy and delivery of vaccines is a game-changer along with other factors that weighed on sentiment simultaneously moving away, such as the U.S. election. We think the distribution of the vaccine coupled with the massive amounts of fiscal and monetary stimulus could lead to a strong, synchronized global earnings recovery that is not fully reflected in analysts’ expectations. We continue to maintain exposure to companies benefiting from strong secular trends such as renewable energy and 5G that could accelerate with improved economic activity. However, our view of where earnings growth will demonstrate the strongest acceleration has changed since earlier in the year. We have added several names that should benefit from an acceleration in cyclical activity as the economy reopens. Information technology remains the fund’s largest overweight and is broadly diversified with exposure to different end markets, including 5G, automobiles, factory automation and digital solutions. Our bottom-up stock selection continues to lead to an underweight in consumer staples.
Europe remains the fund’s largest regional exposure. The European Union’s 750 billion euro recovery plan represented a first-of-its-kind undertaking that could mean improved coordination of fiscal measures, central bank policy and debt across member states. In our view, such coordination, if successful, could potentially help Europe outperform other developed markets. We remain underweight to Japan and Asia in general.
4
Fund Characteristics |
NOVEMBER 30, 2020 | |||||
Top Ten Holdings | % of net assets | ||||
Murata Manufacturing Co. Ltd. | 2.2% | ||||
LVMH Moet Hennessy Louis Vuitton SE | 2.1% | ||||
AstraZeneca plc | 1.9% | ||||
Infineon Technologies AG | 1.9% | ||||
ASML Holding NV | 1.9% | ||||
CSL Ltd. | 1.8% | ||||
Schneider Electric SE | 1.8% | ||||
AIA Group Ltd. | 1.8% | ||||
Iberdrola SA | 1.7% | ||||
Keyence Corp. | 1.7% | ||||
Types of Investments in Portfolio | % of net assets | ||||
Common Stocks | 97.4% | ||||
Temporary Cash Investments | 2.4% | ||||
Temporary Cash Investments - Securities Lending Collateral | 3.1% | ||||
Other Assets and Liabilities | (2.9)% | ||||
Investments by Country | % of net assets | ||||
France | 16.2% | ||||
Japan | 15.0% | ||||
United Kingdom | 9.5% | ||||
Switzerland | 7.2% | ||||
Germany | 6.6% | ||||
Denmark | 5.3% | ||||
Spain | 4.8% | ||||
Netherlands | 4.6% | ||||
Sweden | 4.0% | ||||
Canada | 3.7% | ||||
China | 3.4% | ||||
Hong Kong | 3.2% | ||||
Ireland | 2.9% | ||||
Australia | 2.4% | ||||
Other Countries | 8.6% | ||||
Cash and Equivalents* | 2.6% |
*Includes temporary cash investments, temporary cash investments - securities lending collateral and other assets and liabilities.
5
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 June 1, 2020 to November 30, 2020.
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 6/1/20 | Ending Account Value 11/30/20 | Expenses Paid During Period(1) 6/1/20 - 11/30/20 | Annualized Expense Ratio(1) | |||||||||||
Actual | ||||||||||||||
G Class | $1,000 | $1,284.90 | $0.06 | 0.01% | ||||||||||
Hypothetical | ||||||||||||||
G Class | $1,000 | $1,024.95 | $0.05 | 0.01% |
(1)Expenses are equal to the class's annualized expense ratio listed in the table above, multiplied by the average account value over the period, multiplied by 183, the number of days in the most recent fiscal half-year, divided by 366, to reflect the one-half year period. Annualized expense ratio reflects actual expenses, including any applicable fee waivers or expense reimbursements and excluding any acquired fund fees and expenses.
6
Schedule of Investments |
NOVEMBER 30, 2020
Shares | Value | |||||||
COMMON STOCKS — 97.4% | ||||||||
Australia — 2.4% | ||||||||
Atlassian Corp. plc, Class A(1) | 36,690 | $ | 8,257,084 | |||||
CSL Ltd. | 112,040 | 24,473,212 | ||||||
32,730,296 | ||||||||
Belgium — 1.6% | ||||||||
KBC Group NV(1) | 316,630 | 21,976,609 | ||||||
Brazil — 1.1% | ||||||||
Magazine Luiza SA | 2,264,396 | 9,881,954 | ||||||
XP, Inc., Class A(1) | 123,282 | 5,055,795 | ||||||
14,937,749 | ||||||||
Canada — 3.7% | ||||||||
Alimentation Couche-Tard, Inc., B Shares | 224,380 | 7,451,690 | ||||||
Canada Goose Holdings, Inc.(1)(2) | 261,250 | 8,688,217 | ||||||
Canadian Pacific Railway Ltd. | 43,130 | 13,933,975 | ||||||
Element Fleet Management Corp. | 1,313,150 | 13,356,981 | ||||||
Shopify, Inc., Class A(1) | 5,950 | 6,403,890 | ||||||
49,834,753 | ||||||||
China — 3.4% | ||||||||
Alibaba Group Holding Ltd., ADR(1) | 30,370 | 7,998,243 | ||||||
ANTA Sports Products Ltd. | 398,000 | 5,430,127 | ||||||
GDS Holdings Ltd., ADR(1) | 95,770 | 8,622,173 | ||||||
Huazhu Group Ltd., ADR | 196,340 | 9,773,805 | ||||||
Tencent Holdings Ltd. | 178,700 | 13,007,735 | ||||||
44,832,083 | ||||||||
Denmark — 5.3% | ||||||||
Carlsberg A/S, B Shares | 102,320 | 15,184,865 | ||||||
DSV Panalpina A/S | 103,540 | 16,299,531 | ||||||
Novo Nordisk A/S, B Shares | 267,000 | 17,932,170 | ||||||
Orsted A/S | 50,580 | 9,131,173 | ||||||
Vestas Wind Systems A/S | 61,930 | 12,566,825 | ||||||
71,114,564 | ||||||||
Finland — 1.5% | ||||||||
Neste Oyj | 293,310 | 19,554,847 | ||||||
France — 16.2% | ||||||||
Air Liquide SA | 119,120 | 19,504,795 | ||||||
Arkema SA | 119,680 | 13,917,074 | ||||||
Capgemini SE | 120,420 | 16,642,407 | ||||||
Dassault Systemes SE | 62,100 | 11,451,076 | ||||||
Edenred | 329,426 | 18,786,880 | ||||||
Iliad SA | 40,450 | 8,200,034 | ||||||
LVMH Moet Hennessy Louis Vuitton SE | 48,080 | 27,585,812 | ||||||
Peugeot SA(1) | 518,220 | 12,152,412 | ||||||
Safran SA(1) | 123,040 | 17,869,764 | ||||||
Schneider Electric SE | 172,320 | 23,904,893 | ||||||
Teleperformance | 52,190 | 17,345,458 | ||||||
Valeo SA | 573,230 | 22,120,822 |
7
Shares | Value | |||||||
Vivendi SA | 247,680 | $ | 7,440,791 | |||||
216,922,218 | ||||||||
Germany — 6.6% | ||||||||
adidas AG(1) | 15,670 | 4,989,908 | ||||||
Daimler AG | 170,520 | 11,476,142 | ||||||
Infineon Technologies AG | 729,362 | 25,637,912 | ||||||
Knorr-Bremse AG | 135,662 | 17,345,375 | ||||||
Muenchener Rueckversicherungs-Gesellschaft AG | 42,960 | 11,970,141 | ||||||
Puma SE(1) | 172,930 | 17,176,126 | ||||||
88,595,604 | ||||||||
Hong Kong — 3.2% | ||||||||
AIA Group Ltd. | 2,146,800 | 23,449,595 | ||||||
Sands China Ltd. | 1,450,000 | 5,944,773 | ||||||
Techtronic Industries Co. Ltd. | 1,022,000 | 13,125,451 | ||||||
42,519,819 | ||||||||
India — 1.2% | ||||||||
HDFC Bank Ltd.(1) | 850,370 | 16,400,445 | ||||||
Indonesia — 0.6% | ||||||||
Bank Central Asia Tbk PT | 3,666,700 | 8,033,571 | ||||||
Ireland — 2.9% | ||||||||
ICON plc(1) | 45,680 | 8,902,119 | ||||||
Kerry Group plc, A Shares | 92,850 | 12,982,373 | ||||||
Ryanair Holdings plc, ADR(1) | 156,670 | 16,257,646 | ||||||
38,142,138 | ||||||||
Italy — 1.0% | ||||||||
Ferrari NV | 63,490 | 13,457,631 | ||||||
Japan — 15.0% | ||||||||
Daifuku Co. Ltd. | 73,100 | 8,471,750 | ||||||
FANUC Corp. | 26,600 | 6,417,788 | ||||||
Hoya Corp. | 128,300 | 17,098,548 | ||||||
Keyence Corp. | 44,900 | 22,820,943 | ||||||
Kobe Bussan Co. Ltd. | 243,400 | 8,496,739 | ||||||
MonotaRO Co. Ltd. | 241,700 | 14,734,486 | ||||||
Murata Manufacturing Co. Ltd. | 328,900 | 28,844,258 | ||||||
Obic Co. Ltd. | 62,000 | 13,953,956 | ||||||
Olympus Corp. | 519,900 | 11,288,813 | ||||||
Pan Pacific International Holdings Corp. | 529,700 | 12,546,819 | ||||||
Recruit Holdings Co. Ltd. | 520,600 | 21,816,086 | ||||||
Sony Corp. | 164,400 | 15,287,109 | ||||||
Terumo Corp. | 373,300 | 14,769,600 | ||||||
Workman Co. Ltd. | 45,700 | 4,061,420 | ||||||
200,608,315 | ||||||||
Netherlands — 4.6% | ||||||||
Adyen NV(1) | 10,484 | 19,998,642 | ||||||
ASML Holding NV | 58,500 | 25,333,167 | ||||||
Just Eat Takeaway.com NV(1)(2) | 53,650 | 5,687,780 | ||||||
Koninklijke DSM NV | 60,814 | 9,963,694 | ||||||
60,983,283 | ||||||||
Singapore — 0.5% | ||||||||
Sea Ltd., ADR(1) | 37,990 | 6,852,256 | ||||||
Spain — 4.8% | ||||||||
Amadeus IT Group SA | 247,761 | 16,874,849 |
8
Shares | Value | |||||||
CaixaBank SA | 2,081,040 | $ | 5,310,444 | |||||
Cellnex Telecom SA | 293,835 | 18,506,036 | ||||||
Iberdrola SA | 1,704,938 | 23,233,770 | ||||||
63,925,099 | ||||||||
Sweden — 4.0% | ||||||||
Atlas Copco AB, A Shares(2) | 256,780 | 12,953,651 | ||||||
Hexagon AB, B Shares(1)(2) | 260,020 | 21,527,816 | ||||||
Telefonaktiebolaget LM Ericsson, B Shares | 1,569,110 | 19,143,338 | ||||||
53,624,805 | ||||||||
Switzerland — 7.2% | ||||||||
Lonza Group AG | 33,280 | 20,836,001 | ||||||
Nestle SA | 178,856 | 19,958,190 | ||||||
Novartis AG | 133,570 | 12,114,118 | ||||||
Partners Group Holding AG | 13,700 | 14,596,826 | ||||||
Sika AG | 63,686 | 16,226,371 | ||||||
Zurich Insurance Group AG | 32,560 | 13,198,631 | ||||||
96,930,137 | ||||||||
Taiwan — 1.1% | ||||||||
Taiwan Semiconductor Manufacturing Co. Ltd. | 897,000 | 15,150,435 | ||||||
United Kingdom — 9.5% | ||||||||
Ashtead Group plc | 250,580 | 10,597,166 | ||||||
ASOS plc(1) | 253,286 | 15,622,492 | ||||||
Associated British Foods plc | 140,720 | 3,966,046 | ||||||
AstraZeneca plc | 247,170 | 25,896,959 | ||||||
Carnival plc | 448,650 | 7,903,062 | ||||||
Ferguson plc | 94,060 | 10,536,442 | ||||||
Halma plc | 214,620 | 6,330,651 | ||||||
London Stock Exchange Group plc | 163,930 | 17,688,372 | ||||||
Ocado Group plc(1) | 153,408 | 4,513,865 | ||||||
Reckitt Benckiser Group plc | 79,270 | 6,960,287 | ||||||
Whitbread plc(1) | 418,410 | 16,941,815 | ||||||
126,957,157 | ||||||||
TOTAL COMMON STOCKS (Cost $928,134,166) | 1,304,083,814 | |||||||
TEMPORARY CASH INVESTMENTS — 2.4% | ||||||||
Repurchase Agreement, BMO Capital Markets Corp., (collateralized by various U.S. Treasury obligations, 0.625% - 1.375%, 1/31/25 - 5/15/30, valued at $15,496,676), in a joint trading account at 0.06%, dated 11/30/20, due 12/1/20 (Delivery value $15,178,636) | 15,178,610 | |||||||
Repurchase Agreement, Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 1.75%, 5/15/23, valued at $17,408,370), at 0.07%, dated 11/30/20, due 12/1/20 (Delivery value $17,067,033) | 17,067,000 | |||||||
State Street Institutional U.S. Government Money Market Fund, Premier Class | 802 | 802 | ||||||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $32,246,412) | 32,246,412 | |||||||
TEMPORARY CASH INVESTMENTS - SECURITIES LENDING COLLATERAL(3) — 3.1% | ||||||||
State Street Navigator Securities Lending Government Money Market Portfolio (Cost $41,160,957) | 41,160,957 | 41,160,957 | ||||||
TOTAL INVESTMENT SECURITIES — 102.9% (Cost $1,001,541,535) | 1,377,491,183 | |||||||
OTHER ASSETS AND LIABILITIES — (2.9)% | (38,484,911) | |||||||
TOTAL NET ASSETS — 100.0% | $ | 1,339,006,272 |
9
MARKET SECTOR DIVERSIFICATION | |||||
(as a % of net assets) | |||||
Information Technology | 21.5 | % | |||
Consumer Discretionary | 17.6 | % | |||
Industrials | 17.4 | % | |||
Health Care | 11.5 | % | |||
Financials | 11.3 | % | |||
Consumer Staples | 5.6 | % | |||
Materials | 4.5 | % | |||
Communication Services | 4.1 | % | |||
Utilities | 2.4 | % | |||
Energy | 1.5 | % | |||
Cash and Equivalents* | 2.6 | % |
*Includes temporary cash investments, temporary cash investments - securities lending collateral and other assets and liabilities.
NOTES TO SCHEDULE OF INVESTMENTS | ||||||||
ADR | - | American Depositary Receipt |
(1)Non-income producing.
(2)Security, or a portion thereof, is on loan. At the period end, the aggregate value of securities on loan was $44,087,297. The amount of securities on loan indicated may not correspond with the securities on loan identified because securities with pending sales are in the process of recall from the brokers.
(3)Investment of cash collateral from securities on loan. At the period end, the aggregate value of the collateral held by the fund was $46,435,931, which includes securities collateral of $5,274,974.
See Notes to Financial Statements.
10
Statement of Assets and Liabilities |
NOVEMBER 30, 2020 | |||||
Assets | |||||
Investment securities, at value (cost of $960,380,578) — including $44,087,297 of securities on loan | $ | 1,336,330,226 | |||
Investment made with cash collateral received for securities on loan, at value (cost of $41,160,957) | 41,160,957 | ||||
Total investment securities, at value (cost of $1,001,541,535) | 1,377,491,183 | ||||
Foreign currency holdings, at value (cost of $218,385) | 217,642 | ||||
Receivable for investments sold | 1,754,661 | ||||
Receivable for capital shares sold | 94 | ||||
Dividends and interest receivable | 1,991,618 | ||||
Securities lending receivable | 116,147 | ||||
Other assets | 11,101 | ||||
1,381,582,446 | |||||
Liabilities | |||||
Payable for collateral received for securities on loan | 41,160,957 | ||||
Payable for investments purchased | 624,971 | ||||
Accrued foreign taxes | 769,636 | ||||
Accrued other expenses | 20,610 | ||||
42,576,174 | |||||
Net Assets | $ | 1,339,006,272 | |||
G Class Capital Shares, $0.01 Par Value | |||||
Shares authorized | 1,000,000,000 | ||||
Shares outstanding | 95,779,481 | ||||
Net Asset Value Per Share | $ | 13.98 | |||
Net Assets Consist of: | |||||
Capital (par value and paid-in surplus) | $ | 924,747,553 | |||
Distributable earnings | 414,258,719 | ||||
$ | 1,339,006,272 |
See Notes to Financial Statements.
11
Statement of Operations |
YEAR ENDED NOVEMBER 30, 2020 | |||||
Investment Income (Loss) | |||||
Income: | |||||
Dividends (net of foreign taxes withheld of $1,238,935) | $ | 10,043,071 | |||
Securities lending, net | 248,257 | ||||
Interest (net of foreign taxes withheld of $50) | 24,230 | ||||
10,315,558 | |||||
Expenses: | |||||
Management fees | 7,373,182 | ||||
Directors' fees and expenses | 27,584 | ||||
Other expenses | 79,706 | ||||
7,480,472 | |||||
Fees waived | (7,373,182) | ||||
107,290 | |||||
Net investment income (loss) | 10,208,268 | ||||
Realized and Unrealized Gain (Loss) | |||||
Net realized gain (loss) on: | |||||
Investment transactions (net of foreign tax expenses paid (refunded) of $29,662) | 33,833,270 | ||||
Foreign currency translation transactions | (61,961) | ||||
33,771,309 | |||||
Change in net unrealized appreciation (depreciation) on: | |||||
Investments (includes (increase) decrease in accrued foreign taxes of $(641,998)) | 186,471,382 | ||||
Translation of assets and liabilities in foreign currencies | 127,381 | ||||
186,598,763 | |||||
Net realized and unrealized gain (loss) | 220,370,072 | ||||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 230,578,340 |
See Notes to Financial Statements.
12
Statement of Changes in Net Assets |
YEARS ENDED NOVEMBER 30, 2020 AND NOVEMBER 30, 2019 | ||||||||
Increase (Decrease) in Net Assets | November 30, 2020 | November 30, 2019 | ||||||
Operations | ||||||||
Net investment income (loss) | $ | 10,208,268 | $ | 13,195,921 | ||||
Net realized gain (loss) | 33,771,309 | 17,160,913 | ||||||
Change in net unrealized appreciation (depreciation) | 186,598,763 | 107,590,800 | ||||||
Net increase (decrease) in net assets resulting from operations | 230,578,340 | 137,947,634 | ||||||
Distributions to Shareholders | ||||||||
From earnings | (21,446,973) | (108,218,409) | ||||||
Capital Share Transactions | ||||||||
Proceeds from shares sold | 592,376,460 | 25,530,950 | ||||||
Proceeds from reinvestment of distributions | 21,446,973 | 108,218,409 | ||||||
Payments for shares redeemed | (311,099,401) | (232,567,170) | ||||||
Net increase (decrease) in net assets from capital share transactions | 302,724,032 | (98,817,811) | ||||||
Net increase (decrease) in net assets | 511,855,399 | (69,088,586) | ||||||
Net Assets | ||||||||
Beginning of period | 827,150,873 | 896,239,459 | ||||||
End of period | $ | 1,339,006,272 | $ | 827,150,873 | ||||
Transactions in Shares of the Fund | ||||||||
Sold | 47,489,240 | 2,530,857 | ||||||
Issued in reinvestment of distributions | 1,918,957 | 11,892,133 | ||||||
Redeemed | (26,379,155) | (22,184,342) | ||||||
Net increase (decrease) in shares of the fund | 23,029,042 | (7,761,352) |
See Notes to Financial Statements.
13
Notes to Financial Statements |
NOVEMBER 30, 2020
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 or the Bloomberg Industry Classification Standard for the tobacco industry. The fund offers the G Class.
2. Significant Accounting Policies
The following is a summary of significant accounting policies consistently followed by the fund in preparation of its financial statements. The fund is an investment company and follows accounting and reporting guidance in accordance with accounting principles generally accepted in the United States of America. This may require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from these estimates. Management evaluated the impact of events or transactions occurring through the date the financial statements were issued that would merit recognition or disclosure.
Investment Valuations — The fund determines the fair value of its investments and computes its net asset value (NAV) 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 NAV 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 NAV 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. The fund may apply a model-derived factor to the closing price of equity securities traded on foreign securities exchanges. The factor is based on observable market data as provided by an independent pricing service.
14
Security Transactions — Security transactions are accounted for as of the trade date. Net realized gains and losses are determined on the identified cost basis, which is also used for federal income tax purposes. 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 less foreign taxes withheld, if any, is recorded on the accrual basis and includes accretion of discounts and amortization of premiums. Securities lending income is net of fees and rebates earned by the lending agent for its services.
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.
Segregated Assets — In accordance with the 1940 Act, the fund segregates assets on its books and records to cover certain types of investment securities and other financial instruments. ACIM monitors, on a daily basis, the securities segregated to ensure the fund designates a sufficient amount of liquid assets, marked-to-market daily. The fund may also receive assets or be required to pledge assets at the custodian bank or with a broker for collateral requirements.
Income Tax Status — It is the fund’s policy to distribute substantially all net investment income and net realized gains to shareholders and to otherwise qualify as a regulated investment company under provisions of the Internal Revenue Code. Accordingly, no provision has been made for income taxes. The fund files U.S. federal, state, local and non-U.S. tax returns as applicable. The fund's tax returns are subject to examination by the relevant taxing authority until expiration of the applicable statute of limitations, which is generally three years from the date of filing but can be longer in certain jurisdictions. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination and for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Distributions to Shareholders — Distributions from net investment income 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).
15
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.
Securities Lending — Securities are lent to qualified financial institutions and brokers. State Street Bank & Trust Co. serves as securities lending agent to the fund pursuant to a Securities Lending Agreement. The lending of securities exposes the fund to risks such as: the borrowers may fail to return the loaned securities, the borrowers may not be able to provide additional collateral, the fund may experience delays in recovery of the loaned securities or delays in access to collateral, or the fund may experience losses related to the investment collateral. To minimize certain risks, loan counterparties pledge collateral in the form of cash and/or securities. The lending agent has agreed to indemnify the fund in the case of default of any securities borrowed. Cash collateral received is invested in the State Street Navigator Securities Lending Government Money Market Portfolio, a money market mutual fund registered under the 1940 Act. The loans may also be secured by U.S. government securities in an amount at least equal to the market value of the securities loaned, plus accrued interest and dividends, determined on a daily basis and adjusted accordingly. By lending securities, the fund seeks to increase its net investment income through the receipt of interest and fees. Such income is reflected separately within the Statement of Operations. The value of loaned securities and related collateral outstanding at period end, if any, are shown on a gross basis within the Schedule of Investments and Statement of Assets and Liabilities.
The following table reflects a breakdown of transactions accounted for as secured borrowings, the gross obligation by the type of collateral pledged, and the remaining contractual maturity of those transactions as of November 30, 2020.
Remaining Contractual Maturity of Agreements | |||||||||||||||||
Overnight and Continuous | <30 days | Between 30 & 90 days | >90 days | Total | |||||||||||||
Securities Lending Transactions(1) | |||||||||||||||||
Common Stocks | $ | 41,160,957 | — | — | — | $ | 41,160,957 | ||||||||||
Gross amount of recognized liabilities for securities lending transactions | $ | 41,160,957 |
(1)Amount represents the payable for cash collateral received for securities on loan. This will generally be in the Overnight and Continuous column as the securities are typically callable on demand.
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, 57% of the shares of the fund. Related parties do not invest in the fund for the purpose of exercising management or control.
Management Fees —The corporation has entered into a management agreement with ACIM, under which ACIM provides the fund with investment advisory and management services in exchange for a single, unified management fee (the fee). The agreement provides that ACIM will pay all expenses of managing and operating the fund, except brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), and extraordinary expenses. The fee is computed and accrued daily based on the daily net assets of the fund 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 use very similar investment teams and 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 management fee schedule ranges from 0.700% to 1.150%. The investment advisor agreed to waive the fund’s management fee in its entirety. The investment advisor expects this waiver to remain in effect permanently and cannot terminate it without the approval of the Board of Directors. The effective annual management fee for the period ended November 30, 2020 was 0.82% before waiver and 0.00% after waiver.
16
Directors' Fees and Expenses — The Board of Directors is responsible for overseeing the investment advisor’s management and operations of the fund. The directors receive detailed information about the fund and its investment advisor regularly throughout the year, and meet at least quarterly with management of the investment advisor to review reports about fund operations. The fund’s officers do not receive compensation from the fund.
Interfund Transactions — The fund may enter into security transactions with other American Century Investments funds and other client accounts of the investment advisor, in accordance with the 1940 Act rules and procedures adopted by the Board of Directors. The rules and procedures require, among other things, that these transactions be effected at the independent current market price of the security. During the period, the interfund sales were $158,906 and there were no interfund purchases. The effect of interfund transactions on the Statement of Operations was $73,842 in net realized gain (loss) on investment transactions.
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments and in kind transactions, for the period ended November 30, 2020 were $496,651,041 and $757,972,887, respectively.
On August 13, 2020, the fund received investment securities valued at $521,708,580 from a purchase in kind from other products managed by the fund's investment advisor. A purchase in kind occurs when a fund receives securities into its portfolio in lieu of cash as payment from a purchasing shareholder.
5. Fair Value Measurements
The fund’s investments valuation process is based on several considerations and may use multiple inputs to determine the fair value of the investments held by the fund. In conformity with accounting principles generally accepted in the United States of America, the inputs used to determine a valuation are classified into three broad levels.
•Level 1 valuation inputs consist of unadjusted quoted prices in an active market for identical investments.
•Level 2 valuation inputs consist of direct or indirect observable market data (including quoted prices for comparable investments, evaluations of subsequent market events, interest rates, prepayment speeds, credit risk, etc.). These inputs also consist of quoted prices for identical investments initially expressed in local currencies that are adjusted through translation into U.S. dollars.
•Level 3 valuation inputs consist of unobservable data (including a fund’s own assumptions).
The level classification is based on the lowest level input that is significant to the fair valuation measurement. The valuation inputs are not necessarily an indication of the risks associated with investing in these securities or other financial instruments.
The following is a summary of the level classifications as of period end. The Schedule of Investments provides additional information on the fund’s portfolio holdings.
Level 1 | Level 2 | Level 3 | |||||||||
Assets | |||||||||||
Investment Securities | |||||||||||
Common Stocks | |||||||||||
Australia | $ | 8,257,084 | $ | 24,473,212 | — | ||||||
Brazil | 5,055,795 | 9,881,954 | — | ||||||||
China | 26,394,221 | 18,437,862 | — | ||||||||
Ireland | 25,159,765 | 12,982,373 | — | ||||||||
Singapore | 6,852,256 | — | — | ||||||||
Other Countries | — | 1,166,589,292 | |||||||||
Temporary Cash Investments | 802 | 32,245,610 | |||||||||
Temporary Cash Investments - Securities Lending Collateral | 41,160,957 | — | — | ||||||||
$ | 112,880,880 | $ | 1,264,610,303 | — |
17
6. Risk Factors
The value of the fund’s shares will go up and down, sometimes rapidly or unpredictably, based on the performance of the securities owned by the fund and other factors generally affecting the securities market. Market risks, including political, regulatory, economic and social developments, can affect the value of the fund’s investments. Natural disasters, public health emergencies, terrorism and other unforeseeable events may lead to increased market volatility and may have adverse long-term effects on world economies and markets generally.
There are certain risks involved in investing in foreign securities. These risks include those resulting from political events (such as civil unrest, national elections and imposition of exchange controls), social and economic events (such as labor strikes and rising inflation), and natural disasters. Securities of foreign issuers may be less liquid and more volatile. Investing in emerging markets or a significant portion of assets in one country or region may accentuate these risks.
The fund is owned by a relatively small number of shareholders, and in the event such shareholders redeem, the ongoing operations of the fund may be at risk.
7. Federal Tax Information
On December 22, 2020, the fund declared and paid per-share distributions of $0.3536 and $0.1008 from net realized gains and net investment income, respectively to shareholders of record on December 21, 2020.
The tax character of distributions paid during the years ended November 30, 2020 and November 30, 2019 were as follows:
2020 | 2019 | |||||||
Distributions Paid From | ||||||||
Ordinary income | $ | 12,393,282 | $ | 16,694,228 | ||||
Long-term capital gains | $ | 9,053,691 | $ | 91,524,181 |
The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
As of period end, the federal tax cost of investments and the components of distributable earnings on a tax-basis were as follows:
Federal tax cost of investments | $ | 1,005,683,296 | |||
Gross tax appreciation of investments | $ | 374,251,982 | |||
Gross tax depreciation of investments | (2,444,095) | ||||
Net tax appreciation (depreciation) of investments | 371,807,887 | ||||
Net tax appreciation (depreciation) on translation of assets and liabilities in foreign currencies | (682,029) | ||||
Net tax appreciation (depreciation) | $ | 371,125,858 | |||
Undistributed ordinary income | $ | 9,568,015 | |||
Accumulated long-term gains | $ | 33,564,846 |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales.
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Financial Highlights |
For a Share Outstanding Throughout the Years Ended 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) | |||||||||||||||||||||||||||||||||
G Class | |||||||||||||||||||||||||||||||||||||||||||||||
2020 | $11.37 | 0.13 | 2.78 | 2.91 | (0.17) | (0.13) | (0.30) | $13.98 | 26.30% | 0.01% | 0.83% | 1.13% | 0.31% | 55% | $1,339,006 | ||||||||||||||||||||||||||||||||
2019 | $11.13 | 0.17 | 1.50 | 1.67 | (0.22) | (1.21) | (1.43) | $11.37 | 18.27% | 0.01% | 0.84% | 1.60% | 0.77% | 70% | $827,151 | ||||||||||||||||||||||||||||||||
2018 | $12.57 | 0.22 | (1.09) | (0.87) | (0.20) | (0.37) | (0.57) | $11.13 | (7.35)% | 0.01% | 0.82% | 1.75% | 0.94% | 71% | $896,239 | ||||||||||||||||||||||||||||||||
2017 | $9.61 | 0.14 | 2.91 | 3.05 | (0.09) | — | (0.09) | $12.57 | 32.02% | 0.61% | 0.91% | 1.26% | 0.96% | 57% | $1,039,845 | ||||||||||||||||||||||||||||||||
2016 | $10.95 | 0.10 | (1.02) | (0.92) | (0.08) | (0.34) | (0.42) | $9.61 | (8.69)% | 0.98% | 0.98% | 0.98% | 0.98% | 69% | $845,423 |
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.
See Notes to Financial Statements.
Report of Independent Registered Public Accounting Firm |
To the Shareholders and the Board of Directors of American Century World Mutual Funds, Inc.:
Opinion on the Financial Statements and Financial Highlights
We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of NT International Growth Fund (the “Fund”), one of the funds constituting the American Century World Mutual Funds, Inc., as of November 30, 2020, the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of NT International Growth Fund of the American Century World Mutual Funds, Inc. as of November 30, 2020, and the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on the Fund’s financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. Our procedures included confirmation of securities owned as of November 30, 2020, by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
DELOITTE & TOUCHE LLP
Kansas City, Missouri
January 19, 2021
We have served as the auditor of one or more American Century investment companies since 1997.
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Management |
The Board of Directors
The individuals listed below serve as directors of the funds. Each director will continue to serve in this capacity until death, retirement, resignation or removal from office. The board has adopted a mandatory retirement age for directors who are not “interested persons,” as that term is defined in the Investment Company Act (independent directors). Independent directors shall retire by December 31 of the year in which they reach their 75th birthday.
Mr. Thomas is an “interested person” because he currently serves as President and Chief Executive Officer of American Century Companies, Inc. (ACC), the parent company of American Century Investment Management, Inc. (ACIM or the advisor). The other directors (more than three-fourths of the total number) are independent. They are not employees, directors or officers of, and have no financial interest in, ACC or any of its wholly owned, direct or indirect, subsidiaries, including ACIM, American Century Investment Services, Inc. (ACIS) and American Century Services, LLC (ACS), and they do not have any other affiliations, positions or relationships that would cause them to be considered “interested persons” under the Investment Company Act. The directors serve in this capacity for seven (in the case of Jonathan S. Thomas, 16; and Stephen E. Yates, 8) registered investment companies in the American Century Investments family of funds.
The following table presents additional information about the directors. The mailing address for each director is 4500 Main Street, Kansas City, Missouri 64111.
Name (Year of Birth) | Position(s) Held with Funds | Length of Time Served | Principal Occupation(s) During Past 5 Years | Number of American Century Portfolios Overseen by Director | Other Directorships Held During Past 5 Years | ||||||||||||
Independent Directors | |||||||||||||||||
Thomas W. Bunn (1953) | Director | Since 2017 | Retired | 62 | SquareTwo Financial; Barings (formerly Babson Capital Funds Trust) (2013 to 2016) | ||||||||||||
Chris H. Cheesman (1962) | Director | Since 2019 | Retired. Senior Vice President & Chief Audit Executive, AllianceBernstein (1999 to 2018) | 62 | None | ||||||||||||
Barry Fink (1955) | Director | Since 2012 (independent since 2016) | Retired | 62 | None | ||||||||||||
Rajesh K. Gupta (1960) | Director | Since 2019 | Partner Emeritus, SeaCrest Investment Management and SeaCrest Wealth Management (2019 to Present); Chief Executive Officer and Chief Investment Officer, SeaCrest Investment Management (2006 to 2019); Chief Executive Officer and Chief Investment Officer, SeaCrest Wealth Management (2008 to 2019) | 62 | None |
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Name (Year of Birth) | Position(s) Held with Funds | Length of Time Served | Principal Occupation(s) During Past 5 Years | Number of American Century Portfolios Overseen by Director | Other Directorships Held During Past 5 Years | ||||||||||||
Independent Directors | |||||||||||||||||
Lynn Jenkins (1963) | Director | Since 2019 | Consultant, LJ Strategies (2019 to present); United States Representative, U.S. House of Representatives (2009 to 2018) | 62 | MGP Ingredients, Inc. | ||||||||||||
Jan M. Lewis (1957) | Director | Since 2011 | Retired | 62 | None | ||||||||||||
John R. Whitten (1946) | Director | Since 2008 | Retired | 62 | Onto Innovation Inc. (2019 to 2020); Rudolph Technologies, Inc. (2006 to 2019) | ||||||||||||
Stephen E. Yates (1948) | Director and Chairman of the Board | Since 2012 (Chairman since 2018) | Retired | 87 | None | ||||||||||||
Interested Director | |||||||||||||||||
Jonathan S. Thomas (1963) | Director | Since 2007 | President and Chief Executive Officer, ACC (2007 to present). Also serves as Chief Executive Officer, ACS; Executive Vice President, ACIM; Director, ACC, ACIM and other ACC subsidiaries | 125 | None |
The Statement of Additional Information has additional information about the fund's directors and is available without charge, upon request, by calling 1-800-345-2021.
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Officers
The following table presents certain information about the executive officers of the funds. Each officer serves as an officer for each of the 16 (in the case of Robert J. Leach, 15) investment companies in the American Century family of funds. No officer is compensated for his or her service as an officer of the funds. The listed officers are interested persons of the funds and are appointed or re-appointed on an annual basis. The mailing address for each officer listed below is 4500 Main Street, Kansas City, Missouri 64111.
Name (Year of Birth) | Offices with the Funds | Principal Occupation(s) During the Past Five Years | ||||||
Patrick Bannigan (1965) | President since 2019 | Executive Vice President and Director, ACC (2012 to present); Chief Financial Officer, Chief Accounting Officer and Treasurer, ACC (2015 to present). Also serves as President, ACS; Vice President, ACIM; Chief Financial Officer, Chief Accounting Officer and/or Director, ACIM, ACS and other ACC subsidiaries | ||||||
R. Wes Campbell (1974) | Chief Financial Officer and Treasurer since 2018 | Vice President, ACS, (2020 to present); Investment Operations and Investment Accounting, ACS (2000 to present) | ||||||
Amy D. Shelton (1964) | Chief Compliance Officer and Vice President since 2014 | Chief Compliance Officer, American Century funds, (2014 to present); Chief Compliance Officer, ACIM (2014 to present); Chief Compliance Officer, ACIS (2009 to present). Also serves as Vice President, ACIS | ||||||
Charles A. Etherington (1957) | General Counsel since 2007 and Senior Vice President since 2006 | Attorney, ACC (1994 to present); Vice President, ACC (2005 to present); General Counsel, ACC (2007 to present). Also serves as General Counsel, ACIM, ACS, ACIS and other ACC subsidiaries; and Senior Vice President, ACIM and ACS | ||||||
C. Jean Wade (1964) | Vice President since 2012 | Senior Vice President, ACS (2017 to present); Vice President, ACS (2000 to 2017) | ||||||
Robert J. Leach (1966) | Vice President since 2006 | Vice President, ACS (2000 to present) | ||||||
David H. Reinmiller (1963) | Vice President since 2000 | Attorney, ACC (1994 to present). Also serves as Vice President, ACIM and ACS | ||||||
Ward D. Stauffer (1960) | Secretary since 2005 | Attorney, ACC (2003 to present) |
23
Approval of Management Agreement |
At a meeting held on June 24, 2020, the Fund’s Board of Directors (the "Board") unanimously approved the renewal of the 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, contracts for investment advisory services are required to be reviewed, evaluated, and approved by a majority of a fund’s directors (the “Directors”), including a majority of the independent Directors, each year.
Prior to its consideration of the renewal of the management agreement, the Directors requested and reviewed extensive data and information compiled by the Advisor and certain independent providers of evaluation data concerning the Fund and the services provided to the Fund by the Advisor. This review was in addition to the oversight and evaluation undertaken by the Board and its committees on a continual basis and the information received was supplemental to the extensive information that the Board and its committees receive and consider throughout the year.
In connection with its consideration of the renewal of the management agreement, the Board’s review and evaluation of the services provided by the Advisor included, but was not limited to, the following:
•the nature, extent, and quality of investment management, shareholder services, and other services provided and to be provided to the Fund;
•the wide range of other programs and services provided and to be provided to the Fund and its shareholders on a routine and non-routine basis;
•the Fund’s investment performance, including data comparing the Fund's performance to appropriate benchmarks and/or a peer group of other mutual funds with similar investment objectives and strategies;
•the cost of owning the Fund compared to the cost of owning similar funds;
•the compliance policies, procedures, and regulatory experience of the Advisor and the Fund's service providers;
•the Advisor’s strategic plans;
•the Advisor’s business continuity plans and specifically its response to the COVID-19 pandemic;
•financial data showing the cost of services provided to the Fund, the profitability of the Fund to the Advisor, and the overall profitability of the Advisor;
•possible economies of scale associated with the Advisor’s management of the Fund and other accounts;
•services provided and charges to the Advisor's other investment management clients;
•acquired fund fees and expenses;
•payments and practices in connection with financial intermediaries holding shares of the Fund and the services provided by intermediaries in connection therewith; and
•possible collateral benefits to the Advisor from the management of the Fund.
The Board held two meetings to consider the renewal. The independent Directors also met in private session three times to review and discuss the information provided in response to their request. The independent Directors held active discussions with the Advisor regarding the renewal of the management agreement, requesting supplemental information, and reviewing information provided by the Advisor in response thereto. The independent Directors had the benefit of the advice of their independent counsel throughout the process.
Factors Considered
The Directors considered all of the information provided by the Advisor, the independent data providers, and 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
24
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. In deciding to renew the management agreement, the Board based its decision on a number of factors, including without limitation the following:
Nature, Extent and Quality of Services — Generally. Under the management agreement, the Advisor is responsible for providing or arranging for all services necessary for the operation of the Fund. The Board noted that the Advisor provides or arranges at its own expense a wide variety of services including without limitation the following:
•constructing and designing the Fund
•portfolio research and security selection
•initial capitalization/funding
•securities trading
•Fund administration
•custody of Fund assets
•daily valuation of the Fund’s portfolio
•shareholder servicing and transfer agency, including shareholder confirmations, recordkeeping, and communications
•legal services (except the independent Directors’ counsel)
•regulatory and portfolio compliance
•financial reporting
•marketing and distribution (except amounts paid by the Fund under Rule 12b-1 plans)
The Board noted that many of these services have expanded over time in terms of both quantity and complexity in response to shareholder demands, competition in the industry, changing distribution channels, and the changing regulatory environment.
Investment Management Services. The nature of the investment management services provided to the Fund is quite complex and allows Fund shareholders access to professional money management, instant diversification of their investments within an asset class, the opportunity to easily diversify among asset classes by investing in or exchanging among various American Century Investments funds, and liquidity. In evaluating investment performance, the Board expects the Advisor to manage the Fund in accordance with its investment objectives and approved strategies. Further, the Directors recognize that the Advisor has an obligation to monitor trading activities, and in particular to seek the best execution of fund trades, and to evaluate the use of and payment for research. In providing these services, the Advisor utilizes teams of investment professionals (portfolio managers, analysts, research assistants, and securities traders) who require extensive information technology, research, training, compliance, and other systems to conduct their business. The Board, directly and through its Fund Performance Review Committee, provides oversight of the investment performance process. It regularly reviews investment performance information for the Fund, together with comparative information for appropriate benchmarks and/or peer groups of similarly-managed funds, over different time horizons. The Directors also review investment performance information during the management agreement renewal process. If performance concerns are identified, the Fund receives special reviews until performance improves, during which the Board discusses with the Advisor the reasons for such results (e.g., market conditions, security selection) and any efforts being undertaken to improve performance. The Fund’s performance was above its benchmark for the one-, three-, five-, and ten-year periods reviewed by the Board. The Board found the investment management services provided by the Advisor to the Fund to be satisfactory and consistent with the management agreement.
Shareholder and Other Services. Under the management agreement, the Advisor provides the Fund with a comprehensive package of transfer agency, shareholder, and other services. The Board, directly and through its various committees, regularly reviews reports and evaluations of such services at its regular meetings. These reports include, but are not limited to, information
25
regarding the operational efficiency and accuracy of the shareholder and transfer agency services provided, staffing levels, shareholder satisfaction, technology support (including cyber security), new products and services offered to Fund shareholders, securities trading activities, portfolio valuation services, auditing services, and legal and operational compliance activities. The Board found the services provided by the Advisor to the Fund under the management agreement to be competitive and of high quality.
COVID-19 Response. During 2020, much of the world experienced unprecedented change and challenges from the impacts of the rapidly evolving, worldwide spread of the COVID-19 virus. The Board evaluated the Advisor’s response to the COVID-19 pandemic and its impact on service to the Fund. The Board found that Fund shareholders have continued to receive the Advisor’s investment management and other services without disruption, and Advisor personnel have demonstrated great resiliency in providing those services. The Board, directly and through its Audit Committee, continues to monitor the impact of the pandemic and the response of each of the Fund’s service providers.
Costs of Services and Profitability. The Advisor provides detailed information concerning its cost of providing various services to the Fund, its profitability in managing the Fund (pre- and post-distribution), its overall profitability, and its financial condition. The Directors have reviewed with the Advisor the methodology used to prepare this financial information. This information is considered in evaluating the Advisor’s financial condition, its ability to continue to provide services under the management agreement, and the reasonableness of the current management fee. The Board concluded that the Advisor’s profits were reasonable in light of the services provided to the Fund.
Ethics. The Board generally considers the Advisor’s commitment to providing quality services to shareholders and to conducting its business ethically. They noted that the Advisor’s practices generally meet or exceed industry best practices.
Economies of Scale. The Board also reviewed information provided by the Advisor regarding the possible existence of economies of scale in connection with the management of the Fund. The Board concluded that economies of scale are difficult to measure and predict with precision, especially on a fund-by-fund basis. The Board concluded that the Advisor is appropriately sharing economies of scale, to the extent they exist, through its competitive fee structure, offering competitive fees from fund inception, and through reinvestment in its business, infrastructure, investment capabilities and initiatives to provide shareholders additional content and services. The Board also noted that economies of scale are shared with the Fund and its shareholders through management fee breakpoints that serve to reduce the effective management fee as the assets of the Fund grow.
Comparison to Other Funds’ Fees. The management agreement provides that the Fund pays the Advisor a single, all-inclusive (or unified) management fee for providing all services necessary for the management and operation of the Fund, other than brokerage expenses, expenses attributable to short sales, taxes, interest, extraordinary expenses, fees and expenses of the Fund’s independent Directors (including their independent legal counsel), and expenses incurred in connection with the provision of shareholder services and distribution services under a plan adopted pursuant to Rule 12b-1 under the Investment Company Act. 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 any applicable Rule 12b-1 distribution fees, all other components of the total fees charged by these other funds may be increased without shareholder approval. The Board believes the unified fee structure is a benefit to Fund shareholders because it clearly discloses to shareholders the cost of owning Fund shares, and, since 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
26
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 comparing the Fund’s unified fee to the total expense ratios of its peers. The unified fee charged to shareholders of the Fund was below the median of the total expense ratios of the Fund’s peer expense universe. The Board concluded that the management fee paid by the Fund to the Advisor under the management agreement is reasonable in light of the services provided to the Fund.
Comparison to Fees and Services Provided to Other Clients of the Advisor. The Board also requested and received information from the Advisor concerning the nature of the services, fees, costs, and profitability of its advisory services to advisory clients other than the Fund. They observed that these varying types of client accounts require different services and involve different regulatory and entrepreneurial risks than the management of the Fund. The Board analyzed this information and concluded that the fees charged and services provided to the Fund were reasonable by comparison.
Payments to Intermediaries. The Directors also requested and received a description of payments made to intermediaries by the Fund and the Advisor and services provided in response thereto. These payments include various payments made by the Fund or the Advisor to different types of intermediaries and recordkeepers for distribution and service activities provided for the Fund. The Directors reviewed such information and received representations from the Advisor that all such payments by the Fund were made pursuant to the Fund's Rule 12b-1 Plan and that all such payments by the Advisor were made from the Advisor’s resources and reasonable profits. The Board found such payments to be reasonable in scope and purpose.
Collateral or “Fall-Out” Benefits Derived by the Advisor. The Board considered the possible existence of collateral benefits the Advisor may receive as a result of its relationship with the Fund. They concluded that the Advisor’s primary business is managing mutual funds and it generally does not use fund or shareholder information to generate profits in other lines of business, and therefore does not derive any significant collateral benefits from them. To the extent there are potential collateral benefits, the board has been advised and has taken this into consideration in its review of the management contract with the Fund. The Board noted that additional assets from other clients may offer the Advisor some benefit from increased leverage with service providers and counterparties. Additionally, the Advisor may receive proprietary research from broker-dealers that execute fund portfolio transactions, which the Board concluded is likely to benefit other clients of the Advisor, as well as Fund shareholders. The Board also determined that the Advisor is able to provide investment management services to certain clients other than the Fund, at least in part, due to its existing infrastructure built to serve the fund complex. The Board concluded that appropriate allocation methodologies had been employed to assign resources and the cost of those resources to these other clients and, where expressly provided, these other client assets may be included with the assets of the Fund to determine breakpoints in the management fee schedule.
Existing Relationship. The Board also considered whether there was any reason for not continuing the existing arrangement with the Advisor. In this regard, the Board was mindful of the potential disruptions of the Fund’s operations and various risks, uncertainties, and other effects that could occur as a result of a decision not to continue such relationship. In particular, the Board recognized that most shareholders have invested in the Fund on the strength of the Advisor’s industry standing and reputation and in the expectation that the Advisor will have a continuing role in providing advisory services to the Fund.
Conclusion of the Directors. As a result of this process, the Board, including all of the independent Directors, taking into account all of the factors discussed above and the information provided by the Advisor and others in connection with its review and throughout the year, determined that the management fee is fair and reasonable in light of the services provided and that the investment management agreement between the Fund and the Advisor should be renewed.
27
Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain retirement accounts are subject to federal income tax withholding, unless you elect not to have withholding apply*. Tax will be withheld on the total amount withdrawn even though you may be receiving amounts that are not subject to withholding, such as nondeductible contributions. In such case, excess amounts of withholding could occur. You may adjust your withholding election so that a greater or lesser amount will be withheld.
If you don’t want us to withhold on this amount, you must notify us to not withhold the federal income tax. You may notify us in writing or in certain situations by telephone or through other electronic means. For systematic withdrawals, your withholding election will remain in effect until revoked or changed by filing a new election. You have the right to revoke your election at any time and change your withholding percentage for future distributions.
Remember, even if you elect not to have income tax withheld, you are liable for paying income tax on the taxable portion of your withdrawal. If you elect not to have income tax withheld or you don’t have enough income tax withheld, you may be responsible for payment of estimated tax. You may incur penalties under the estimated tax rules if your withholding and estimated tax payments are not sufficient. You can reduce or defer the income tax on a distribution by directly or indirectly rolling such distribution over to another IRA or eligible plan. You should consult your tax advisor for additional information.
State tax will be withheld if, at the time of your distribution, your address is within one of the mandatory withholding states and you have federal income tax withheld (or as otherwise required by state law). State taxes will be withheld from your distribution in accordance with the respective state rules.
*Some 403(b), 457 and qualified retirement plan distributions may be subject to 20% mandatory withholding, as they are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
A description of the policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund is available without charge, upon request, by calling 1-800-345-2021. It is also available on American Century Investments’ website at americancentury.com/proxy 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 americancentury.com/proxy. 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 as an exhibit to its reports on
Form N-PORT. The fund’s Form N-PORT reports are available on the SEC’s website at sec.gov.
The fund also makes its complete schedule of portfolio holdings for the most recent quarter of its
fiscal year available on its website at americancentury.com and, upon request, by calling
1-800-345-2021.
28
Other Tax Information
The following information is provided pursuant to provisions of the Internal Revenue Code.
The fund hereby designates up to the maximum amount allowable as qualified dividend income for the fiscal year ended November 30, 2020.
The fund hereby designates $10,756,986, or up to the maximum amount allowable, as long-term capital gain distributions (20% rate gain distributions) for the fiscal year ended November 30, 2020.
For the fiscal year ended November 30, 2020, the fund intends to pass through to shareholders foreign source income of $11,192,767 and foreign taxes paid of $1,090,869, or up to the maximum amount allowable, as a foreign tax credit. Foreign source income and foreign tax expense per
outstanding share on November 30, 2020 are $0.1169 and $0.0114, respectively.
The fund utilized earnings and profits of $2,245,971 distributed to shareholders on redemption of shares as part of the dividends paid deduction (tax equalization).
29
Notes |
30
Notes |
31
Notes |
32
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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. | ||||||||
©2021 American Century Proprietary Holdings, Inc. All rights reserved. CL-ANN-91024 2101 |
![image171.jpg](https://capedge.com/proxy/N-CSR/0000872825-21-000006/image171.jpg)
Annual Report | |||||
November 30, 2020 | |||||
NT International Small-Mid Cap Fund | |||||
Investor Class (ANTSX) | |||||
G Class (ANTMX) |
Table of Contents |
Performance | |||||
Portfolio Commentary | |||||
Fund Characteristics | |||||
Shareholder Fee Example | |||||
Schedule of Investments | |||||
Statement of Assets and Liabilities | |||||
Statement of Operations | |||||
Statement of Changes in Net Assets | |||||
Notes to Financial Statements | |||||
Financial Highlights | |||||
Report of Independent Registered Public Accounting Firm | |||||
Management | |||||
Approval of Management Agreement | |||||
Additional Information |
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.
Performance |
Total Returns as of November 30, 2020 | |||||||||||||||||
Average Annual Returns | |||||||||||||||||
Ticker Symbol | 1 year | 5 years | Since Inception | Inception Date | |||||||||||||
Investor Class | ANTSX | 26.24% | 9.58% | 8.87% | 3/19/15 | ||||||||||||
MSCI EAFE Small Cap Index | — | 9.76% | 8.11% | 7.81% | — | ||||||||||||
G Class | ANTMX | 28.03% | 10.73% | 9.88% | 3/19/15 |
Fund returns would have been lower if a portion of the fees had not been waived.
Growth of $10,000 Over Life of Class | ||
$10,000 investment made March 19, 2015 | ||
Performance for other share classes will vary due to differences in fee structure. |
![chart-34361f0d36d043adba51.jpg](https://capedge.com/proxy/N-CSR/0000872825-21-000006/chart-34361f0d36d043adba51.jpg)
Value on November 30, 2020 | |||||
Investor Class — $16,238 | |||||
MSCI EAFE Small Cap Index — $15,362 | |||||
Ending value of Investor Class would have been lower if a portion of the fees had not been waived.
Total Annual Fund Operating Expenses | |||||
Investor Class | G Class | ||||
1.48% | 1.13% |
The total annual fund operating expenses shown is as stated in the fund’s prospectus current as of the date of this report. The prospectus may vary from the expense ratio shown elsewhere in this report because it is based on a different time period, includes acquired fund fees and expenses, and, if applicable, does not include fee waivers or expense reimbursements.
Data presented reflect past performance. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance shown. Total returns for periods less than one year are not annualized. Investment return and principal value will fluctuate, and redemption value may be more or less than original cost. Data assumes reinvestment of dividends and capital gains, and none of the charts reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. To obtain performance data current to the most recent month end, please call 1-800-345-2021 or visit americancentury.com. For additional information about the fund, please consult the prospectus.
2
Portfolio Commentary |
Portfolio Managers: Trevor Gurwich, Federico Laffan and Pratik Patel
Performance Summary
NT International Small-Mid Cap returned 28.03%* for the 12 months ended November 30, 2020, outperforming the MSCI EAFE Small Cap Index, which returned 9.76% for the same period.
Non-U.S. small- and mid-cap stocks rose over the 12-month period, proving resilient despite a sharp sell-off in the first quarter of 2020. This sell-off was triggered by the global COVID-19 pandemic, which disrupted travel and led to lockdown measures that severely curtailed economic activity. Central banks responded to this crisis with unprecedented monetary stimulus, and many governments announced fiscal spending increases. These measures reassured investors and set the stage for a strong equity market rebound in the second quarter, especially as countries started to ease lockdowns. The market extended these gains through the third quarter, even though a second wave of the virus led to new lockdown orders in the late fall, especially in Europe. News of progress toward several COVID-19 vaccines raised hopes for a return to normal activity in 2021, and this helped the stocks end the period with solid gains.
Stock selection, especially in information technology and industrials, drove the fund’s strong relative outperformance over the 12-month period. An overweight in energy detracted from relative performance, as weaker global demand weighed on fuel prices. From a geographic standpoint, stock selection in Japan contributed, while stock selection and an underweight in Norway detracted from relative performance.
Software Testing Company and Cloud Computing Provider were Top Contributors
Information technology holdings were strong positive contributors to relative performance, supported by growing demand for high-quality connectivity and digital solutions during the pandemic. Standout contributors included SHIFT, a provider of software testing services benefiting from robust business trends in key end markets. TeamViewer, another contributor, provides cloud-based enterprise solutions that allow workers to collaborate from remote locations. The company saw increased demand for its service, as the pandemic drove more people to work from home.
Meal delivery services company HelloFresh was another notable performer, as pandemic-related lockdowns fueled demand for its gourmet delivered meal kits. We exited the position after a period of outperformance, as we found other opportunities with the potential for more earnings acceleration in 2021. Kobe Bussan was another prominent contributor. This supermarket franchise operator in Japan reported healthy growth trends, supported by store openings and market share expansion opportunities. The company’s franchise mode enabled it to open stores quickly by leveraging its store development and staff hiring capabilities. It was also resilient despite pandemic-related economic headwinds.
Housing-Related Investments in the U.K. Faced Pandemic Pressures
Several of our holdings faced near-term headwinds due to the pandemic and the related economic disruptions. U.K.-based residential homebuilder Bellway was a notable detractor, as lockdown orders curtailed construction activity and dampened its revenue growth. The UNITE Group, another detractor, develops and owns student housing in the U.K. The stock fell sharply after the company
reduced its revenue forecast, as the virus shifted learning online and reduced demand for student
*All fund returns referenced in this commentary are for G Class shares. G Class returns would have been lower if a portion of the fees had not been waived. Performance for other share classes will vary due to differences in fee structure; when G Class exceeds that of the fund’s benchmark, other share classes may not. See page 2 for returns for all share classes.
3
housing, especially from international students. We liquidated our investment in the company given its uncertain earnings outlook.
Orix JREIT was also a detractor. This real estate investment trust owns office property, primarily in Tokyo, Japan. It faced headwinds from weaker employment growth in Japan, as well as from the move toward more remote working arrangements due to the pandemic. We sold the position, as we sought out investments we believed offered more attractive risk/reward profiles.
Outlook
The fund continues to invest in non-U.S. small- and mid-cap companies we believe are demonstrating accelerating and sustainable growth. Our stock selection process continues to drive our sector and country allocations. We increased our weighting in industrials, moving to a sizable overweight, as we added investments that may benefit from an economic recovery and a potential return to normal activity in 2021.
We also have sought out companies benefiting from secular changes created by COVID-19. The fund remains overweight in consumer discretionary and information technology. We increased exposure to consumer discretionary as we favored companies with sustainable earnings growth. In information technology, we own companies capitalizing on the growth in e-commerce, cloud computing, software as a service and the 5G network build-out. We reduced our weighting in information technology somewhat during the 12-month period, however, as we took profits on stocks that have outperformed in recent quarters. We also reduced exposure to consumer staples and energy, moving to relative underweights, as we found fewer compelling investment opportunities. Stock selection also led to underweights in real estate, financials and materials.
From a country and regional standpoint, our bottom-up process led to an overweight in Canada. Stock selection led to a reduced weighting in Europe, which ended the period as a regional underweight. The fund is also underweight in Asia, reflecting the mix of investment opportunities we have found there.
4
Fund Characteristics |
NOVEMBER 30, 2020 | |||||
Top Ten Holdings | % of net assets | ||||
Metso Outotec Oyj | 1.6% | ||||
Seven Group Holdings Ltd. | 1.6% | ||||
flatexDEGIRO AG | 1.5% | ||||
Nippon Gas Co. Ltd. | 1.5% | ||||
Open House Co. Ltd. | 1.5% | ||||
SOITEC | 1.5% | ||||
Electrocomponents plc | 1.4% | ||||
Mapletree Industrial Trust | 1.3% | ||||
Element Fleet Management Corp. | 1.3% | ||||
Sushiro Global Holdings Ltd. | 1.3% | ||||
Types of Investments in Portfolio | % of net assets | ||||
Common Stocks | 99.3% | ||||
Temporary Cash Investments | 0.4% | ||||
Temporary Cash Investments - Securities Lending Collateral | 1.3% | ||||
Other Assets and Liabilities | (1.0)% | ||||
Investments by Country | % of net assets | ||||
Japan | 25.9% | ||||
United Kingdom | 14.2% | ||||
Sweden | 10.6% | ||||
Canada | 10.5% | ||||
Germany | 5.9% | ||||
Australia | 5.4% | ||||
Switzerland | 3.8% | ||||
Israel | 3.5% | ||||
Denmark | 3.1% | ||||
Netherlands | 2.8% | ||||
Hong Kong | 2.7% | ||||
Finland | 2.6% | ||||
France | 2.3% | ||||
Other Countries | 6.0% | ||||
Cash and Equivalents* | 0.7% |
*Includes temporary cash investments, temporary cash investments - securities lending collateral and other assets and liabilities.
5
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 June 1, 2020 to November 30, 2020.
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 6/1/20 | Ending Account Value 11/30/20 | Expenses Paid During Period(1) 6/1/20 - 11/30/20 | Annualized Expense Ratio(1) | |||||||||||
Actual | ||||||||||||||
Investor Class | $1,000 | $1,274.90 | $8.36 | 1.47% | ||||||||||
G Class | $1,000 | $1,283.40 | $0.06 | 0.01% | ||||||||||
Hypothetical | ||||||||||||||
Investor Class | $1,000 | $1,017.65 | $7.41 | 1.47% | ||||||||||
G Class | $1,000 | $1,024.95 | $0.05 | 0.01% |
(1)Expenses are equal to the class's annualized expense ratio listed in the table above, multiplied by the average account value over the period, multiplied by 183, the number of days in the most recent fiscal half-year, divided by 366, to reflect the one-half year period. Annualized expense ratio reflects actual expenses, including any applicable fee waivers or expense reimbursements and excluding any acquired fund fees and expenses.
6
Schedule of Investments |
NOVEMBER 30, 2020
Shares | Value | |||||||
COMMON STOCKS — 99.3% | ||||||||
Australia — 5.4% | ||||||||
Breville Group Ltd. | 135,725 | $ | 2,401,855 | |||||
carsales.com Ltd. | 154,057 | 2,299,958 | ||||||
Magellan Financial Group Ltd. | 49,420 | 2,148,593 | ||||||
NEXTDC Ltd.(1) | 702,149 | 5,805,400 | ||||||
OZ Minerals Ltd. | 278,736 | 3,340,999 | ||||||
Redbubble Ltd.(1)(2) | 764,205 | 2,921,211 | ||||||
Seven Group Holdings Ltd.(2) | 481,854 | 7,790,822 | ||||||
26,708,838 | ||||||||
Belgium — 0.9% | ||||||||
Warehouses De Pauw, CVA | 126,102 | 4,282,038 | ||||||
Canada — 10.5% | ||||||||
BRP, Inc. | 72,417 | 4,131,343 | ||||||
CAE, Inc. | 218,330 | 5,282,150 | ||||||
Canada Goose Holdings, Inc.(1)(2) | 69,558 | 2,313,244 | ||||||
Colliers International Group, Inc. | 71,681 | 6,393,722 | ||||||
Descartes Systems Group, Inc. (The)(1) | 70,724 | 4,193,775 | ||||||
Element Fleet Management Corp. | 640,844 | 6,518,480 | ||||||
FirstService Corp. | 28,746 | 3,920,452 | ||||||
Innergex Renewable Energy, Inc. | 220,678 | 4,367,001 | ||||||
Jamieson Wellness, Inc. | 90,440 | 2,505,607 | ||||||
Kinaxis, Inc.(1) | 18,555 | 2,797,323 | ||||||
Nuvei Corp.(1) | 77,495 | 3,642,265 | ||||||
TFI International, Inc. | 121,828 | 6,181,925 | ||||||
52,247,287 | ||||||||
Denmark — 3.1% | ||||||||
ALK-Abello A/S(1) | 13,751 | 4,874,944 | ||||||
Netcompany Group A/S(1) | 56,823 | 5,277,734 | ||||||
Pandora A/S | 12,728 | 1,270,370 | ||||||
Royal Unibrew A/S | 36,969 | 3,872,078 | ||||||
15,295,126 | ||||||||
Finland — 2.6% | ||||||||
Huhtamaki Oyj | 95,849 | 4,810,659 | ||||||
Metso Outotec Oyj | 887,954 | 7,928,355 | ||||||
12,739,014 | ||||||||
France — 2.3% | ||||||||
APERAM SA | 31,218 | 1,188,595 | ||||||
Elis SA(1) | 181,692 | 2,965,773 | ||||||
SOITEC(1) | 41,271 | 7,190,435 | ||||||
11,344,803 | ||||||||
Germany — 5.9% | ||||||||
CompuGroup Medical SE & Co. KgaA | 42,331 | 4,203,622 | ||||||
flatexDEGIRO AG(1) | 113,141 | 7,554,331 | ||||||
Gerresheimer AG | 37,913 | 4,414,695 | ||||||
Hypoport SE(1) | 4,673 | 2,454,890 | ||||||
Sixt SE(1) | 36,048 | 4,131,862 | ||||||
Stroeer SE & Co. KGaA | 45,646 | 4,086,886 |
7
Shares | Value | |||||||
TeamViewer AG(1) | 52,616 | $ | 2,504,784 | |||||
29,351,070 | ||||||||
Hong Kong — 2.7% | ||||||||
Man Wah Holdings Ltd. | 2,684,000 | 4,953,336 | ||||||
Melco International Development Ltd. | 1,255,000 | 2,374,956 | ||||||
Minth Group Ltd. | 1,200,000 | 5,973,554 | ||||||
13,301,846 | ||||||||
Israel — 3.5% | ||||||||
Inmode Ltd.(1) | 127,481 | 5,491,881 | ||||||
Kornit Digital Ltd.(1) | 74,337 | 6,271,813 | ||||||
Nova Measuring Instruments Ltd.(1) | 84,081 | 5,426,588 | ||||||
17,190,282 | ||||||||
Italy — 1.1% | ||||||||
FinecoBank Banca Fineco SpA(1) | 193,078 | 3,014,551 | ||||||
MARR SpA(1) | 125,373 | 2,337,354 | ||||||
5,351,905 | ||||||||
Japan — 25.9% | ||||||||
Anritsu Corp. | 219,600 | 5,016,048 | ||||||
ASKUL Corp. | 128,500 | 5,125,485 | ||||||
BASE, Inc.(1) | 28,100 | 2,582,484 | ||||||
CKD Corp. | 171,000 | 3,650,712 | ||||||
Cosmos Pharmaceutical Corp. | 7,600 | 1,310,966 | ||||||
en-japan, Inc. | 97,200 | 3,004,033 | ||||||
Harmonic Drive Systems, Inc. | 32,500 | 2,595,589 | ||||||
Hennge KK(1) | 36,500 | 2,458,150 | ||||||
IR Japan Holdings Ltd. | 22,100 | 3,531,195 | ||||||
Japan Elevator Service Holdings Co. Ltd. | 108,100 | 5,042,829 | ||||||
Japan Steel Works Ltd. (The) | 165,900 | 4,020,739 | ||||||
Kakaku.com, Inc. | 130,300 | 3,640,600 | ||||||
Kobe Bussan Co. Ltd. | 98,600 | 3,441,982 | ||||||
Mabuchi Motor Co. Ltd. | 97,900 | 4,373,178 | ||||||
Menicon Co. Ltd. | 38,200 | 2,375,779 | ||||||
Mercari, Inc.(1) | 93,900 | 4,307,654 | ||||||
Nabtesco Corp. | 152,000 | 6,237,357 | ||||||
Nihon Kohden Corp. | 102,700 | 3,254,098 | ||||||
Nihon Unisys Ltd. | 139,900 | 5,181,021 | ||||||
Nippon Gas Co. Ltd. | 149,100 | 7,502,134 | ||||||
Nissan Chemical Corp. | 39,900 | 2,374,656 | ||||||
Open House Co. Ltd. | 186,100 | 7,372,352 | ||||||
Park24 Co. Ltd.(1) | 65,100 | 962,932 | ||||||
Rakus Co. Ltd. | 119,400 | 2,790,249 | ||||||
Ryohin Keikaku Co. Ltd. | 278,900 | 5,707,173 | ||||||
SHIFT, Inc.(1) | 32,100 | 4,766,541 | ||||||
SHO-BOND Holdings Co. Ltd. | 115,000 | 5,727,637 | ||||||
Sushiro Global Holdings Ltd. | 201,800 | 6,425,256 | ||||||
UT Group Co. Ltd.(1) | 118,900 | 3,753,281 | ||||||
Zenkoku Hosho Co. Ltd. | 80,100 | 3,643,270 | ||||||
Zeon Corp. | 487,800 | 6,037,546 | ||||||
128,212,926 | ||||||||
Netherlands — 2.8% | ||||||||
ASM International NV | 14,599 | 2,570,517 | ||||||
Basic-Fit NV(1)(2) | 107,436 | 3,903,184 | ||||||
Corbion NV | 72,146 | 3,727,366 |
8
Shares | Value | |||||||
IMCD NV | 28,219 | $ | 3,526,411 | |||||
13,727,478 | ||||||||
Norway — 1.9% | ||||||||
Bakkafrost P/F(1) | 67,353 | 4,205,221 | ||||||
LINK Mobility Group Holding ASA(1) | 423,628 | 2,381,030 | ||||||
NEL ASA(1) | 1,077,747 | 2,964,153 | ||||||
9,550,404 | ||||||||
Singapore — 1.3% | ||||||||
Mapletree Industrial Trust | 2,978,400 | 6,529,975 | ||||||
Spain — 0.8% | ||||||||
Laboratorios Farmaceuticos Rovi SA | 79,150 | 3,816,767 | ||||||
Sweden — 10.6% | ||||||||
AddTech AB, B Shares | 239,185 | 3,006,444 | ||||||
Beijer Ref AB | 75,383 | 2,588,760 | ||||||
BHG Group AB(1) | 337,977 | 6,193,680 | ||||||
Bilia AB, A Shares(1) | 303,582 | 3,404,803 | ||||||
Embracer Group AB(1) | 141,461 | 2,867,628 | ||||||
Fastighets AB Balder, B Shares(1) | 88,288 | 4,415,760 | ||||||
Lifco AB, B Shares | 48,361 | 3,950,142 | ||||||
Lindab International AB | 187,955 | 3,265,787 | ||||||
MIPS AB | 26,834 | 1,345,823 | ||||||
Nordic Entertainment Group AB, B Shares(1) | 69,629 | 3,462,954 | ||||||
Samhallsbyggnadsbolaget i Norden AB(2) | 1,799,397 | 6,104,686 | ||||||
Sinch AB(1) | 22,631 | 2,963,232 | ||||||
Stillfront Group AB(1) | 51,395 | 5,899,390 | ||||||
Trelleborg AB, B Shares(1) | 145,408 | 3,001,842 | ||||||
52,470,931 | ||||||||
Switzerland — 3.8% | ||||||||
Cembra Money Bank AG | 55,069 | 6,374,123 | ||||||
SIG Combibloc Group AG(1) | 259,401 | 5,968,050 | ||||||
Tecan Group AG | 6,010 | 2,636,816 | ||||||
Zur Rose Group AG(1) | 13,070 | 3,920,115 | ||||||
18,899,104 | ||||||||
United Kingdom — 14.2% | ||||||||
ASOS plc(1) | 76,100 | 4,693,791 | ||||||
Bellway plc | 89,145 | 3,379,208 | ||||||
boohoo Group plc(1) | 637,131 | 2,675,293 | ||||||
Diploma plc | 160,013 | 4,532,824 | ||||||
Electrocomponents plc | 622,953 | 6,701,645 | ||||||
Endava plc, ADR(1) | 54,508 | 3,422,557 | ||||||
Fevertree Drinks plc | 90,466 | 2,785,989 | ||||||
Future plc | 196,543 | 4,442,469 | ||||||
Games Workshop Group plc | 46,515 | 6,101,576 | ||||||
Grafton Group plc(1) | 221,162 | 2,509,680 | ||||||
HomeServe plc | 214,088 | 2,975,699 | ||||||
Howden Joinery Group plc(1) | 406,142 | 3,406,197 | ||||||
Intermediate Capital Group plc | 265,555 | 5,774,208 | ||||||
IWG plc(1) | 764,288 | 3,278,732 | ||||||
JD Sports Fashion plc | 344,714 | 3,574,832 | ||||||
JET2 plc | 176,678 | 3,293,435 | ||||||
Weir Group plc (The)(1) | 231,812 | 5,157,934 |
9
Shares | Value | |||||||
WH Smith plc | 100,272 | $ | 1,887,637 | |||||
70,593,706 | ||||||||
TOTAL COMMON STOCKS (Cost $372,113,528) | 491,613,500 | |||||||
TEMPORARY CASH INVESTMENTS — 0.4% | ||||||||
Repurchase Agreement, BMO Capital Markets Corp., (collateralized by various U.S. Treasury obligations, 0.625% - 1.375%, 1/31/25 - 5/15/30, valued at $900,708), in a joint trading account at 0.06%, dated 11/30/20, due 12/1/20 (Delivery value $882,222) | 882,221 | |||||||
Repurchase Agreement, Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 0.625%, 5/15/30, valued at $1,009,873), at 0.07%, dated 11/30/20, due 12/1/20 (Delivery value $990,002) | 990,000 | |||||||
State Street Institutional U.S. Government Money Market Fund, Premier Class | 46 | 46 | ||||||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $1,872,267) | 1,872,267 | |||||||
TEMPORARY CASH INVESTMENTS - SECURITIES LENDING COLLATERAL(3) — 1.3% | ||||||||
State Street Navigator Securities Lending Government Money Market Portfolio (Cost $6,279,870) | 6,279,870 | 6,279,870 | ||||||
TOTAL INVESTMENT SECURITIES — 101.0% (Cost $380,265,665) | 499,765,637 | |||||||
OTHER ASSETS AND LIABILITIES — (1.0)% | (4,798,718) | |||||||
TOTAL NET ASSETS — 100.0% | $ | 494,966,919 |
MARKET SECTOR DIVERSIFICATION | |||||
(as a % of net assets) | |||||
Industrials | 27.1 | % | |||
Consumer Discretionary | 17.0 | % | |||
Information Technology | 14.4 | % | |||
Real Estate | 8.6 | % | |||
Financials | 7.5 | % | |||
Health Care | 6.4 | % | |||
Materials | 5.6 | % | |||
Communication Services | 5.3 | % | |||
Consumer Staples | 5.0 | % | |||
Utilities | 2.4 | % | |||
Cash and Equivalents* | 0.7 | % |
*Includes temporary cash investments, temporary cash investments - securities lending collateral and other assets and liabilities.
NOTES TO SCHEDULE OF INVESTMENTS | ||||||||
ADR | - | American Depositary Receipt | ||||||
CVA | - | Certificaten Van Aandelen |
(1)Non-income producing.
(2)Security, or a portion thereof, is on loan. At the period end, the aggregate value of securities on loan was $16,331,044. The amount of securities on loan indicated may not correspond with the securities on loan identified because securities with pending sales are in the process of recall from the brokers.
(3)Investment of cash collateral from securities on loan. At the period end, the aggregate value of the collateral held by the fund was $17,312,532, which includes securities collateral of $11,032,662.
See Notes to Financial Statements.
10
Statement of Assets and Liabilities |
NOVEMBER 30, 2020 | |||||
Assets | |||||
Investment securities, at value (cost of $373,985,795) — including $16,331,044 of securities on loan | $ | 493,485,767 | |||
Investment made with cash collateral received for securities on loan, at value (cost of $6,279,870) | 6,279,870 | ||||
Total investment securities, at value (cost of $380,265,665) | 499,765,637 | ||||
Receivable for investments sold | 2,702,760 | ||||
Dividends and interest receivable | 934,462 | ||||
Securities lending receivable | 56,150 | ||||
503,459,009 | |||||
Liabilities | |||||
Payable for collateral received for securities on loan | 6,279,870 | ||||
Payable for investments purchased | 2,096,474 | ||||
Accrued management fees | 115,746 | ||||
8,492,090 | |||||
Net Assets | $ | 494,966,919 | |||
Net Assets Consist of: | |||||
Capital (par value and paid-in surplus) | $ | 367,738,754 | |||
Distributable earnings | 127,228,165 | ||||
$ | 494,966,919 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | |||||||||
Investor Class, $0.01 Par Value | $97,900,606 | 7,436,824 | $13.16 | ||||||||
G Class, $0.01 Par Value | $397,066,313 | 29,720,653 | $13.36 |
See Notes to Financial Statements.
11
Statement of Operations |
YEAR ENDED NOVEMBER 30, 2020 | |||||
Investment Income (Loss) | |||||
Income: | |||||
Dividends (net of foreign taxes withheld of $366,550) | $ | 3,863,641 | |||
Securities lending, net | 495,483 | ||||
Interest | 11,716 | ||||
4,370,840 | |||||
Expenses: | |||||
Management fees | 4,332,708 | ||||
Directors' fees and expenses | 11,066 | ||||
Other expenses | 31,589 | ||||
4,375,363 | |||||
Fees waived(1) | (3,010,900) | ||||
1,364,463 | |||||
Net investment income (loss) | 3,006,377 | ||||
Realized and Unrealized Gain (Loss) | |||||
Net realized gain (loss) on: | |||||
Investment transactions | 32,386,288 | ||||
Foreign currency translation transactions | 18,135 | ||||
32,404,423 | |||||
Change in net unrealized appreciation (depreciation) on: | |||||
Investments | 67,711,600 | ||||
Translation of assets and liabilities in foreign currencies | 31,763 | ||||
67,743,363 | |||||
Net realized and unrealized gain (loss) | 100,147,786 | ||||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 103,154,163 |
(1)Amount consists of $13,173 and $2,997,727 for Investor Class and G Class, respectively.
See Notes to Financial Statements.
12
Statement of Changes in Net Assets |
YEARS ENDED NOVEMBER 30, 2020 AND NOVEMBER 30, 2019 | ||||||||
Increase (Decrease) in Net Assets | November 30, 2020 | November 30, 2019 | ||||||
Operations | ||||||||
Net investment income (loss) | $ | 3,006,377 | $ | 3,918,676 | ||||
Net realized gain (loss) | 32,404,423 | (18,276,654) | ||||||
Change in net unrealized appreciation (depreciation) | 67,743,363 | 63,120,925 | ||||||
Net increase (decrease) in net assets resulting from operations | 103,154,163 | 48,762,947 | ||||||
Distributions to Shareholders | ||||||||
From earnings: | ||||||||
Investor Class | (1,580,340) | (10,045,152) | ||||||
G Class | (7,505,757) | (28,156,452) | ||||||
Decrease in net assets from distributions | (9,086,097) | (38,201,604) | ||||||
Capital Share Transactions | ||||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | 67,784,056 | 116,453,710 | ||||||
Net increase (decrease) in net assets | 161,852,122 | 127,015,053 | ||||||
Net Assets | ||||||||
Beginning of period | 333,114,797 | 206,099,744 | ||||||
End of period | $ | 494,966,919 | $ | 333,114,797 |
See Notes to Financial Statements.
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Notes to Financial Statements |
NOVEMBER 30, 2020
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 or the Bloomberg Industry Classification Standard for the tobacco industry. The fund offers the Investor Class and G Class.
2. Significant Accounting Policies
The following is a summary of significant accounting policies consistently followed by the fund in preparation of its financial statements. The fund is an investment company and follows accounting and reporting guidance in accordance with accounting principles generally accepted in the United States of America. This may require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from these estimates. Management evaluated the impact of events or transactions occurring through the date the financial statements were issued that would merit recognition or disclosure.
Investment Valuations — The fund determines the fair value of its investments and computes its net asset value (NAV) 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 NAV 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 NAV 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. The fund may apply a model-derived factor to the closing price of equity securities traded on foreign securities exchanges. The factor is based on observable market data as provided by an independent pricing service.
14
Security Transactions — Security transactions are accounted for as of the trade date. Net realized gains and losses are determined on the identified cost basis, which is also used for federal income tax purposes.
Investment Income — Dividend income less foreign taxes withheld, if any, is recorded as of the ex-dividend date. Distributions received on securities that represent a return of capital or long-term capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The fund may estimate the components of distributions received that may be considered nontaxable distributions or long-term capital gain distributions for income tax purposes. Interest income is recorded on the accrual basis and includes accretion of discounts and amortization of premiums. Securities lending income is net of fees and rebates earned by the lending agent for its services.
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.
Segregated Assets — In accordance with the 1940 Act, the fund segregates assets on its books and records to cover certain types of investment securities and other financial instruments. ACIM monitors, on a daily basis, the securities segregated to ensure the fund designates a sufficient amount of liquid assets, marked-to-market daily. The fund may also receive assets or be required to pledge assets at the custodian bank or with a broker for collateral requirements.
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.
15
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.
Securities Lending — Securities are lent to qualified financial institutions and brokers. State Street Bank & Trust Co. serves as securities lending agent to the fund pursuant to a Securities Lending Agreement. The lending of securities exposes the fund to risks such as: the borrowers may fail to return the loaned securities, the borrowers may not be able to provide additional collateral, the fund may experience delays in recovery of the loaned securities or delays in access to collateral, or the fund may experience losses related to the investment collateral. To minimize certain risks, loan counterparties pledge collateral in the form of cash and/or securities. The lending agent has agreed to indemnify the fund in the case of default of any securities borrowed. Cash collateral received is invested in the State Street Navigator Securities Lending Government Money Market Portfolio, a money market mutual fund registered under the 1940 Act. The loans may also be secured by U.S. government securities in an amount at least equal to the market value of the securities loaned, plus accrued interest and dividends, determined on a daily basis and adjusted accordingly. By lending securities, the fund seeks to increase its net investment income through the receipt of interest and fees. Such income is reflected separately within the Statement of Operations. The value of loaned securities and related collateral outstanding at period end, if any, are shown on a gross basis within the Schedule of Investments and Statement of Assets and Liabilities.
The following table reflects a breakdown of transactions accounted for as secured borrowings, the gross obligation by the type of collateral pledged, and the remaining contractual maturity of those transactions as of November 30, 2020.
Remaining Contractual Maturity of Agreements | |||||||||||||||||
Overnight and Continuous | <30 days | Between 30 & 90 days | >90 days | Total | |||||||||||||
Securities Lending Transactions(1) | |||||||||||||||||
Common Stocks | $ | 6,279,870 | — | — | — | $ | 6,279,870 | ||||||||||
Gross amount of recognized liabilities for securities lending transactions | $ | 6,279,870 |
(1)Amount represents the payable for cash collateral received for securities on loan. This will generally be in the Overnight and Continuous column as the securities are typically callable on demand.
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, 64% 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 ACIM will pay all expenses of managing and operating the fund, except brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), and extraordinary expenses. The fee is computed and accrued daily based on each class's daily net assets and paid monthly in arrears. The difference in the fee among the classes is a result of their separate arrangements for non-Rule 12b-1 shareholder services, which may be provided indirectly through another American Century Investments mutual fund. It is not the result of any difference in advisory or custodial fees or other expenses related to the management of the fund’s assets, which do not vary by class. Effective August 1, 2020, the investment advisor agreed to waive 0.04% of the fund's management fee. The investment advisor expects this waiver to continue until July 31, 2021 and cannot terminate it prior to such date without the approval of the Board of Directors. The investment advisor agreed to waive the G Class’s management fee in its entirety. The investment advisor expects this waiver to remain in effect permanently and cannot terminate it without the approval of the Board of Directors.
16
The annual management fee and the effective annual management fee after waiver for each class for the period ended November 30, 2020 are as follows:
Annual Management Fee | Effective Annual Management Fee After Waiver | |||||||
Investor Class | 1.47% | 1.46% | ||||||
G Class | 1.12% | 0.00% |
Directors' Fees and Expenses — The Board of Directors is responsible for overseeing the investment advisor’s management and operations of the fund. The directors receive detailed information about the fund and its investment advisor regularly throughout the year, and meet at least quarterly with management of the investment advisor to review reports about fund operations. The fund’s officers do not receive compensation from the fund.
Interfund Transactions — The fund may enter into security transactions with other American Century Investments funds and other client accounts of the investment advisor, in accordance with the 1940 Act rules and procedures adopted by the Board of Directors. The rules and procedures require, among other things, that these transactions be effected at the independent current market price of the security. During the period, the interfund purchases and sales were $8,412 and $489,696, respectively. The effect of interfund transactions on the Statement of Operations was $77,438 in net realized gain (loss) on investment transactions.
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments and in kind transactions, for the period ended November 30, 2020 were $471,440,272 and $580,721,409, respectively.
On August 13, 2020, the fund received investment securities valued at $168,074,676 from a purchase in kind from other products managed by the fund’s investment advisor. A purchase in kind occurs when a fund receives securities into its portfolio in lieu of cash as payment from a purchasing shareholder.
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Year ended November 30, 2020 | Year ended November 30, 2019 | |||||||||||||
Shares | Amount | Shares | Amount | |||||||||||
Investor Class/Shares Authorized | 120,000,000 | 120,000,000 | ||||||||||||
Sold | 492,052 | $ | 3,938,077 | 3,003,767 | $ | 30,525,147 | ||||||||
Issued in reinvestment of distributions | 147,695 | 1,580,340 | 1,151,967 | 10,045,152 | ||||||||||
Redeemed | (2,059,298) | (23,788,410) | (1,553,046) | (15,182,636) | ||||||||||
(1,419,551) | (18,269,993) | 2,602,688 | 25,387,663 | |||||||||||
G Class/Shares Authorized | 300,000,000 | 300,000,000 | ||||||||||||
Sold | 16,319,664 | 188,246,740 | 10,187,019 | 105,277,042 | ||||||||||
Issued in reinvestment of distributions | 700,818 | 7,505,757 | 3,225,252 | 28,156,452 | ||||||||||
Redeemed | (9,513,355) | (109,698,448) | (4,265,651) | (42,367,447) | ||||||||||
7,507,127 | 86,054,049 | 9,146,620 | 91,066,047 | |||||||||||
Net increase (decrease) | 6,087,576 | $ | 67,784,056 | 11,749,308 | $ | 116,453,710 |
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.
17
•Level 2 valuation inputs consist of direct or indirect observable market data (including quoted prices for comparable investments, evaluations of subsequent market events, interest rates, prepayment speeds, credit risk, etc.). These inputs also consist of quoted prices for identical investments initially expressed in local currencies that are adjusted through translation into U.S. dollars.
•Level 3 valuation inputs consist of unobservable data (including a fund’s own assumptions).
The level classification is based on the lowest level input that is significant to the fair valuation measurement. The valuation inputs are not necessarily an indication of the risks associated with investing in these securities or other financial instruments.
The following is a summary of the level classifications as of period end. The Schedule of Investments provides additional information on the fund’s portfolio holdings.
Level 1 | Level 2 | Level 3 | |||||||||
Assets | |||||||||||
Investment Securities | |||||||||||
Common Stocks | $ | 20,612,839 | $ | 471,000,661 | — | ||||||
Temporary Cash Investments | 46 | 1,872,221 | — | ||||||||
Temporary Cash Investments - Securities Lending Collateral | 6,279,870 | — | — | ||||||||
$ | 26,892,755 | $ | 472,872,882 | — |
7. Risk Factors
The value of the fund’s shares will go up and down, sometimes rapidly or unpredictably, based on the performance of the securities owned by the fund and other factors generally affecting the securities market. Market risks, including political, regulatory, economic and social developments, can affect the value of the fund’s investments. Natural disasters, public health emergencies, terrorism and other unforeseeable events may lead to increased market volatility and may have adverse long-term effects on world economies and markets generally.
The fund is owned by a relatively small number of shareholders, and in the event such shareholders redeem, the ongoing operations of the fund may be at risk.
There are certain risks involved in investing in foreign securities. These risks include those resulting from political events (such as civil unrest, national elections and imposition of exchange controls), social and economic events (such as labor strikes and rising inflation), and natural disasters. Securities of foreign issuers may be less liquid and more volatile. Investing a significant portion of assets in one country or region 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
On December 22, 2020, the fund declared and paid a per-share distribution from net realized gains to shareholders of record on December 21, 2020 of $0.4308 for the Investor Class and G Class.
On December 22, 2020, the fund declared and paid the following per-share distributions from net investment income to shareholders of record on December 21, 2020:
Investor Class | G Class | ||||
$0.0000 | $0.1039 |
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The tax character of distributions paid during the years ended November 30, 2020 and November 30, 2019 were as follows:
2020 | 2019 | |||||||
Distributions Paid From | ||||||||
Ordinary income | $ | 9,086,097 | $ | 7,333,981 | ||||
Long-term capital gains | — | $ | 30,867,623 |
The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
As of period end, the federal tax cost of investments and the components of distributable earnings on a tax-basis were as follows:
Federal tax cost of investments | $ | 391,171,675 | |||
Gross tax appreciation of investments | $ | 110,405,756 | |||
Gross tax depreciation of investments | (1,811,794) | ||||
Net tax appreciation (depreciation) of investments | 108,593,962 | ||||
Net tax appreciation (depreciation) on translation of assets and liabilities in foreign currencies | 23,032 | ||||
Net tax appreciation (depreciation) | $ | 108,616,994 | |||
Undistributed ordinary income | $ | 3,020,282 | |||
Accumulated long-term gains | $ | 15,590,889 |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales.
\
19
Financial Highlights |
For a Share Outstanding Throughout the Years Ended 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 | |||||||||||||||||||||||||||||||||||||||||||||||
2020 | $10.61 | (0.03) | 2.76 | 2.73 | (0.18) | — | (0.18) | $13.16 | 26.24% | 1.47% | 1.48% | (0.25)% | (0.26)% | 131% | $97,901 | ||||||||||||||||||||||||||||||||
2019 | $10.56 | 0.01 | 1.14 | 1.15 | (0.04) | (1.06) | (1.10) | $10.61 | 13.13% | 1.48% | 1.48% | 0.14% | 0.14% | 133% | $93,941 | ||||||||||||||||||||||||||||||||
2018 | $13.16 | 0.01 | (1.73) | (1.72) | (0.11) | (0.77) | (0.88) | $10.56 | (14.20)% | 1.47% | 1.47% | 0.09% | 0.09% | 140% | $66,042 | ||||||||||||||||||||||||||||||||
2017 | $9.88 | (0.01) | 3.29 | 3.28 | — | — | — | $13.16 | 33.20% | 1.48% | 1.48% | (0.10)% | (0.10)% | 122% | $76,484 | ||||||||||||||||||||||||||||||||
2016 | $10.29 | (0.01) | (0.33) | (0.34) | (0.07) | — | (0.07) | $9.88 | (3.12)% | 1.47% | 1.47% | (0.07)% | (0.07)% | 138% | $62,162 | ||||||||||||||||||||||||||||||||
G Class | |||||||||||||||||||||||||||||||||||||||||||||||
2020 | $10.77 | 0.13 | 2.80 | 2.93 | (0.34) | — | (0.34) | $13.36 | 28.03% | 0.01% | 1.13% | 1.21% | 0.09% | 131% | $397,066 | ||||||||||||||||||||||||||||||||
2019 | $10.72 | 0.16 | 1.13 | 1.29 | (0.18) | (1.06) | (1.24) | $10.77 | 14.77% | 0.01% | 1.13% | 1.61% | 0.49% | 133% | $239,174 | ||||||||||||||||||||||||||||||||
2018 | $13.25 | 0.20 | (1.76) | (1.56) | (0.20) | (0.77) | (0.97) | $10.72 | (12.95)% | 0.00%(3) | 1.12% | 1.56% | 0.44% | 140% | $140,057 | ||||||||||||||||||||||||||||||||
2017 | $9.89 | 0.06 | 3.32 | 3.38 | (0.02) | — | (0.02) | $13.25 | 34.20% | 0.80% | 1.22% | 0.58% | 0.16% | 122% | $172,954 | ||||||||||||||||||||||||||||||||
2016 | $10.30 | 0.01 | (0.33) | (0.32) | (0.09) | — | (0.09) | $9.89 | (2.97)% | 1.27% | 1.27% | 0.13% | 0.13% | 138% | $135,377 |
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)Ratio was less than 0.005%.
See Notes to Financial Statements.
Report of Independent Registered Public Accounting Firm |
To the Shareholders and the Board of Directors of American Century World Mutual Funds, Inc.:
Opinion on the Financial Statements and Financial Highlights
We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of NT International Small-Mid Cap Fund (the “Fund”), one of the funds constituting the American Century World Mutual Funds, Inc., as of November 30, 2020, the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of NT International Small-Mid Cap Fund of the American Century World Mutual Funds, Inc. as of November 30, 2020, and the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on the Fund’s financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. Our procedures included confirmation of securities owned as of November 30, 2020, by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
DELOITTE & TOUCHE LLP
Kansas City, Missouri
January 19, 2021
We have served as the auditor of one or more American Century investment companies since 1997.
22
Management |
The Board of Directors
The individuals listed below serve as directors of the funds. Each director will continue to serve in this capacity until death, retirement, resignation or removal from office. The board has adopted a mandatory retirement age for directors who are not “interested persons,” as that term is defined in the Investment Company Act (independent directors). Independent directors shall retire by December 31 of the year in which they reach their 75th birthday.
Mr. Thomas is an “interested person” because he currently serves as President and Chief Executive Officer of American Century Companies, Inc. (ACC), the parent company of American Century Investment Management, Inc. (ACIM or the advisor). The other directors (more than three-fourths of the total number) are independent. They are not employees, directors or officers of, and have no financial interest in, ACC or any of its wholly owned, direct or indirect, subsidiaries, including ACIM, American Century Investment Services, Inc. (ACIS) and American Century Services, LLC (ACS), and they do not have any other affiliations, positions or relationships that would cause them to be considered “interested persons” under the Investment Company Act. The directors serve in this capacity for seven (in the case of Jonathan S. Thomas, 16; and Stephen E. Yates, 8) registered investment companies in the American Century Investments family of funds.
The following table presents additional information about the directors. The mailing address for each director is 4500 Main Street, Kansas City, Missouri 64111.
Name (Year of Birth) | Position(s) Held with Funds | Length of Time Served | Principal Occupation(s) During Past 5 Years | Number of American Century Portfolios Overseen by Director | Other Directorships Held During Past 5 Years | ||||||||||||
Independent Directors | |||||||||||||||||
Thomas W. Bunn (1953) | Director | Since 2017 | Retired | 62 | SquareTwo Financial; Barings (formerly Babson Capital Funds Trust) (2013 to 2016) | ||||||||||||
Chris H. Cheesman (1962) | Director | Since 2019 | Retired. Senior Vice President & Chief Audit Executive, AllianceBernstein (1999 to 2018) | 62 | None | ||||||||||||
Barry Fink (1955) | Director | Since 2012 (independent since 2016) | Retired | 62 | None | ||||||||||||
Rajesh K. Gupta (1960) | Director | Since 2019 | Partner Emeritus, SeaCrest Investment Management and SeaCrest Wealth Management (2019 to Present); Chief Executive Officer and Chief Investment Officer, SeaCrest Investment Management (2006 to 2019); Chief Executive Officer and Chief Investment Officer, SeaCrest Wealth Management (2008 to 2019) | 62 | None |
23
Name (Year of Birth) | Position(s) Held with Funds | Length of Time Served | Principal Occupation(s) During Past 5 Years | Number of American Century Portfolios Overseen by Director | Other Directorships Held During Past 5 Years | ||||||||||||
Independent Directors | |||||||||||||||||
Lynn Jenkins (1963) | Director | Since 2019 | Consultant, LJ Strategies (2019 to present); United States Representative, U.S. House of Representatives (2009 to 2018) | 62 | MGP Ingredients, Inc. | ||||||||||||
Jan M. Lewis (1957) | Director | Since 2011 | Retired | 62 | None | ||||||||||||
John R. Whitten (1946) | Director | Since 2008 | Retired | 62 | Onto Innovation Inc. (2019 to 2020); Rudolph Technologies, Inc. (2006 to 2019) | ||||||||||||
Stephen E. Yates (1948) | Director and Chairman of the Board | Since 2012 (Chairman since 2018) | Retired | 87 | None | ||||||||||||
Interested Director | |||||||||||||||||
Jonathan S. Thomas (1963) | Director | Since 2007 | President and Chief Executive Officer, ACC (2007 to present). Also serves as Chief Executive Officer, ACS; Executive Vice President, ACIM; Director, ACC, ACIM and other ACC subsidiaries | 125 | None |
The Statement of Additional Information has additional information about the fund's directors and is available without charge, upon request, by calling 1-800-345-2021.
24
Officers
The following table presents certain information about the executive officers of the funds. Each officer serves as an officer for each of the 16 (in the case of Robert J. Leach, 15) investment companies in the American Century family of funds. No officer is compensated for his or her service as an officer of the funds. The listed officers are interested persons of the funds and are appointed or re-appointed on an annual basis. The mailing address for each officer listed below is 4500 Main Street, Kansas City, Missouri 64111.
Name (Year of Birth) | Offices with the Funds | Principal Occupation(s) During the Past Five Years | ||||||
Patrick Bannigan (1965) | President since 2019 | Executive Vice President and Director, ACC (2012 to present); Chief Financial Officer, Chief Accounting Officer and Treasurer, ACC (2015 to present). Also serves as President, ACS; Vice President, ACIM; Chief Financial Officer, Chief Accounting Officer and/or Director, ACIM, ACS and other ACC subsidiaries | ||||||
R. Wes Campbell (1974) | Chief Financial Officer and Treasurer since 2018 | Vice President, ACS, (2020 to present); Investment Operations and Investment Accounting, ACS (2000 to present) | ||||||
Amy D. Shelton (1964) | Chief Compliance Officer and Vice President since 2014 | Chief Compliance Officer, American Century funds, (2014 to present); Chief Compliance Officer, ACIM (2014 to present); Chief Compliance Officer, ACIS (2009 to present). Also serves as Vice President, ACIS | ||||||
Charles A. Etherington (1957) | General Counsel since 2007 and Senior Vice President since 2006 | Attorney, ACC (1994 to present); Vice President, ACC (2005 to present); General Counsel, ACC (2007 to present). Also serves as General Counsel, ACIM, ACS, ACIS and other ACC subsidiaries; and Senior Vice President, ACIM and ACS | ||||||
C. Jean Wade (1964) | Vice President since 2012 | Senior Vice President, ACS (2017 to present); Vice President, ACS (2000 to 2017) | ||||||
Robert J. Leach (1966) | Vice President since 2006 | Vice President, ACS (2000 to present) | ||||||
David H. Reinmiller (1963) | Vice President since 2000 | Attorney, ACC (1994 to present). Also serves as Vice President, ACIM and ACS | ||||||
Ward D. Stauffer (1960) | Secretary since 2005 | Attorney, ACC (2003 to present) |
25
Approval of Management Agreement |
At a meeting held on June 24, 2020, the Fund’s Board of Directors (the "Board") unanimously approved the renewal of the 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, contracts for investment advisory services are required to be reviewed, evaluated, and approved by a majority of a fund’s directors (the “Directors”), including a majority of the independent Directors, each year.
Prior to its consideration of the renewal of the management agreement, the Directors requested and reviewed extensive data and information compiled by the Advisor and certain independent providers of evaluation data concerning the Fund and the services provided to the Fund by the Advisor. This review was in addition to the oversight and evaluation undertaken by the Board and its committees on a continual basis and the information received was supplemental to the extensive information that the Board and its committees receive and consider throughout the year.
In connection with its consideration of the renewal of the management agreement, the Board’s review and evaluation of the services provided by the Advisor included, but was not limited to, the following:
•the nature, extent, and quality of investment management, shareholder services, and other services provided and to be provided to the Fund;
•the wide range of other programs and services provided and to be provided to the Fund and its shareholders on a routine and non-routine basis;
•the Fund’s investment performance, including data comparing the Fund's performance to appropriate benchmarks and/or a peer group of other mutual funds with similar investment objectives and strategies;
•the cost of owning the Fund compared to the cost of owning similar funds;
•the compliance policies, procedures, and regulatory experience of the Advisor and the Fund's service providers;
•the Advisor’s strategic plans;
•the Advisor’s business continuity plans and specifically its response to the COVID-19 pandemic;
•financial data showing the cost of services provided to the Fund, the profitability of the Fund to the Advisor, and the overall profitability of the Advisor;
•possible economies of scale associated with the Advisor’s management of the Fund and other accounts;
•services provided and charges to the Advisor's other investment management clients;
•acquired fund fees and expenses;
•payments and practices in connection with financial intermediaries holding shares of the Fund and the services provided by intermediaries in connection therewith; and
•possible collateral benefits to the Advisor from the management of the Fund.
The Board held two meetings to consider the renewal. The independent Directors also met in private session three times to review and discuss the information provided in response to their request. The independent Directors held active discussions with the Advisor regarding the renewal of the management agreement, requesting supplemental information, and reviewing information provided by the Advisor in response thereto. The independent Directors had the benefit of the advice of their independent counsel throughout the process.
Factors Considered
The Directors considered all of the information provided by the Advisor, the independent data providers, and 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
26
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. In deciding to renew the management agreement, the Board based its decision on a number of factors, including without limitation the following:
Nature, Extent and Quality of Services — Generally. Under the management agreement, the Advisor is responsible for providing or arranging for all services necessary for the operation of the Fund. The Board noted that the Advisor provides or arranges at its own expense a wide variety of services including without limitation the following:
•constructing and designing the Fund
•portfolio research and security selection
•initial capitalization/funding
•securities trading
•Fund administration
•custody of Fund assets
•daily valuation of the Fund’s portfolio
•shareholder servicing and transfer agency, including shareholder confirmations, recordkeeping, and communications
•legal services (except the independent Directors’ counsel)
•regulatory and portfolio compliance
•financial reporting
•marketing and distribution (except amounts paid by the Fund under Rule 12b-1 plans)
The Board noted that many of these services have expanded over time in terms of both quantity and complexity in response to shareholder demands, competition in the industry, changing distribution channels, and the changing regulatory environment.
Investment Management Services. The nature of the investment management services provided to the Fund is quite complex and allows Fund shareholders access to professional money management, instant diversification of their investments within an asset class, the opportunity to easily diversify among asset classes by investing in or exchanging among various American Century Investments funds, and liquidity. In evaluating investment performance, the Board expects the Advisor to manage the Fund in accordance with its investment objectives and approved strategies. Further, the Directors recognize that the Advisor has an obligation to monitor trading activities, and in particular to seek the best execution of fund trades, and to evaluate the use of and payment for research. In providing these services, the Advisor utilizes teams of investment professionals (portfolio managers, analysts, research assistants, and securities traders) who require extensive information technology, research, training, compliance, and other systems to conduct their business. The Board, directly and through its Fund Performance Review Committee, provides oversight of the investment performance process. It regularly reviews investment performance information for the Fund, together with comparative information for appropriate benchmarks and/or peer groups of similarly-managed funds, over different time horizons. The Directors also review investment performance information during the management agreement renewal process. If performance concerns are identified, the Fund receives special reviews until performance improves, during which the Board discusses with the Advisor the reasons for such results (e.g., market conditions, security selection) and any efforts being undertaken to improve performance. The Fund’s performance was above its benchmark for the one- and three-year periods reviewed by the Board. The Board found the investment management services provided by the Advisor to the Fund to be satisfactory and consistent with the management agreement.
Shareholder and Other Services. Under the management agreement, the Advisor provides the Fund with a comprehensive package of transfer agency, shareholder, and other services. The Board, directly and through its various committees, regularly reviews reports and evaluations of such services at its regular meetings. These reports include, but are not limited to, information regarding the operational efficiency and accuracy of the shareholder and transfer agency services
27
provided, staffing levels, shareholder satisfaction, technology support (including cyber security), new products and services offered to Fund shareholders, securities trading activities, portfolio valuation services, auditing services, and legal and operational compliance activities. The Board found the services provided by the Advisor to the Fund under the management agreement to be competitive and of high quality.
COVID-19 Response. During 2020, much of the world experienced unprecedented change and challenges from the impacts of the rapidly evolving, worldwide spread of the COVID-19 virus. The Board evaluated the Advisor’s response to the COVID-19 pandemic and its impact on service to the Fund. The Board found that Fund shareholders have continued to receive the Advisor’s investment management and other services without disruption, and Advisor personnel have demonstrated great resiliency in providing those services. The Board, directly and through its Audit Committee, continues to monitor the impact of the pandemic and the response of each of the Fund’s service providers.
Costs of Services and Profitability. The Advisor provides detailed information concerning its cost of providing various services to the Fund, its profitability in managing the Fund (pre- and post-distribution), its overall profitability, and its financial condition. The Directors have reviewed with the Advisor the methodology used to prepare this financial information. This information is considered in evaluating the Advisor’s financial condition, its ability to continue to provide services under the management agreement, and the reasonableness of the current management fee. The Board concluded that the Advisor’s profits were reasonable in light of the services provided to the Fund.
Ethics. The Board generally considers the Advisor’s commitment to providing quality services to shareholders and to conducting its business ethically. They noted that the Advisor’s practices generally meet or exceed industry best practices.
Economies of Scale. The Board also reviewed information provided by the Advisor regarding the possible existence of economies of scale in connection with the management of the Fund. The Board concluded that economies of scale are difficult to measure and predict with precision, especially on a fund-by-fund basis. The Board concluded that the Advisor is appropriately sharing economies of scale, to the extent they exist, through its competitive fee structure, offering competitive fees from fund inception, and through reinvestment in its business, infrastructure, investment capabilities and initiatives to provide shareholders additional content and services.
Comparison to Other Funds’ Fees. The management agreement provides that the Fund pays the Advisor a single, all-inclusive (or unified) management fee for providing all services necessary for the management and operation of the Fund, other than brokerage expenses, expenses attributable to short sales, taxes, interest, extraordinary expenses, fees and expenses of the Fund’s independent Directors (including their independent legal counsel), and expenses incurred in connection with the provision of shareholder services and distribution services under a plan adopted pursuant to Rule 12b-1 under the Investment Company Act. 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 any applicable Rule 12b-1 distribution fees, all other components of the total fees charged by these other funds may be increased without shareholder approval. The Board believes the unified fee structure is a benefit to Fund shareholders because it clearly discloses to shareholders the cost of owning Fund shares, and, since 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 comparing the Fund’s unified fee to the total expense ratios of its peers. The unified fee charged to shareholders of the Fund was above the median of the total expense ratios of the Fund’s peer expense universe
28
and was within the range of its peer expense group. The Board and the Advisor agreed to a temporary reduction of the Fund's annual unified management fee of 0.04% (e.g., the Investor Class unified fee will be reduced from 1.47% to 1.43%) for at least one year, beginning August 1, 2020. The Board concluded that the management fee paid by the Fund to the Advisor under the management agreement is reasonable in light of the services provided to the Fund.
Comparison to Fees and Services Provided to Other Clients of the Advisor. The Board also requested and received information from the Advisor concerning the nature of the services, fees, costs, and profitability of its advisory services to advisory clients other than the Fund. They observed that these varying types of client accounts require different services and involve different regulatory and entrepreneurial risks than the management of the Fund. The Board analyzed this information and concluded that the fees charged and services provided to the Fund were reasonable by comparison.
Payments to Intermediaries. The Directors also requested and received a description of payments made to intermediaries by the Fund and the Advisor and services provided in response thereto. These payments include various payments made by the Fund or the Advisor to different types of intermediaries and recordkeepers for distribution and service activities provided for the Fund. The Directors reviewed such information and received representations from the Advisor that all such payments by the Fund were made pursuant to the Fund's Rule 12b-1 Plan and that all such payments by the Advisor were made from the Advisor’s resources and reasonable profits. The Board found such payments to be reasonable in scope and purpose.
Collateral or “Fall-Out” Benefits Derived by the Advisor. The Board considered the possible existence of collateral benefits the Advisor may receive as a result of its relationship with the Fund. They concluded that the Advisor’s primary business is managing mutual funds and it generally does not use fund or shareholder information to generate profits in other lines of business, and therefore does not derive any significant collateral benefits from them. To the extent there are potential collateral benefits, the board has been advised and has taken this into consideration in its review of the management contract with the Fund. The Board noted that additional assets from other clients may offer the Advisor some benefit from increased leverage with service providers and counterparties. Additionally, the Advisor may receive proprietary research from broker-dealers that execute fund portfolio transactions, which the Board concluded is likely to benefit other clients of the Advisor, as well as Fund shareholders. The Board also determined that the Advisor is able to provide investment management services to certain clients other than the Fund, at least in part, due to its existing infrastructure built to serve the fund complex. The Board concluded that appropriate allocation methodologies had been employed to assign resources and the cost of those resources to these other clients.
Existing Relationship. The Board also considered whether there was any reason for not continuing the existing arrangement with the Advisor. In this regard, the Board was mindful of the potential disruptions of the Fund’s operations and various risks, uncertainties, and other effects that could occur as a result of a decision not to continue such relationship. In particular, the Board recognized that most shareholders have invested in the Fund on the strength of the Advisor’s industry standing and reputation and in the expectation that the Advisor will have a continuing role in providing advisory services to the Fund.
Conclusion of the Directors. As a result of this process, the Board, including all of the independent Directors, taking into account all of the factors discussed above and the information provided by the Advisor and others in connection with its review and throughout the year, determined that the management fee is fair and reasonable in light of the services provided and that the investment management agreement between the Fund and the Advisor should be renewed.
29
Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain retirement accounts are subject to federal income tax withholding, unless you elect not to have withholding apply*. Tax will be withheld on the total amount withdrawn even though you may be receiving amounts that are not subject to withholding, such as nondeductible contributions. In such case, excess amounts of withholding could occur. You may adjust your withholding election so that a greater or lesser amount will be withheld.
If you don’t want us to withhold on this amount, you must notify us to not withhold the federal income tax. You may notify us in writing or in certain situations by telephone or through other electronic means. For systematic withdrawals, your withholding election will remain in effect until revoked or changed by filing a new election. You have the right to revoke your election at any time and change your withholding percentage for future distributions.
Remember, even if you elect not to have income tax withheld, you are liable for paying income tax on the taxable portion of your withdrawal. If you elect not to have income tax withheld or you don’t have enough income tax withheld, you may be responsible for payment of estimated tax. You may incur penalties under the estimated tax rules if your withholding and estimated tax payments are not sufficient. You can reduce or defer the income tax on a distribution by directly or indirectly rolling such distribution over to another IRA or eligible plan. You should consult your tax advisor for additional information.
State tax will be withheld if, at the time of your distribution, your address is within one of the mandatory withholding states and you have federal income tax withheld (or as otherwise required by state law). State taxes will be withheld from your distribution in accordance with the respective state rules.
*Some 403(b), 457 and qualified retirement plan distributions may be subject to 20% mandatory withholding, as they are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
A description of the policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund is available without charge, upon request, by calling 1-800-345-2021. It is also available on American Century Investments’ website at americancentury.com/proxy 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 americancentury.com/proxy. 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 as an exhibit to its reports on
Form N-PORT. The fund’s Form N-PORT reports are available on the SEC’s website at sec.gov.
The fund also makes its complete schedule of portfolio holdings for the most recent quarter of its
fiscal year available on its website at americancentury.com and, upon request, by calling
1-800-345-2021.
30
Other Tax Information
The following information is provided pursuant to provisions of the Internal Revenue Code.
The fund hereby designates up to the maximum amount allowable as qualified dividend income for the fiscal year ended November 30, 2020.
For the fiscal year ended November 30, 2020, the fund intends to pass through to shareholders foreign source income of $4,230,191 and foreign taxes paid of $335,361, or up to the maximum amount allowable, as a foreign tax credit. Foreign source income and foreign tax expense per outstanding share on November 30, 2020 are $0.1138 and $0.0090, respectively.
31
Notes |
32
33
![]() | ||||||||
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. | ||||||||
©2021 American Century Proprietary Holdings, Inc. All rights reserved. CL-ANN-91025 2101 |
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![image171.jpg](https://capedge.com/proxy/N-CSR/0000872825-21-000006/image171.jpg)
Annual Report | |||||
November 30, 2020 | |||||
NT International Value Fund | |||||
Investor Class (ANTVX) | |||||
G Class (ANTYX) |
Table of Contents |
Performance | |||||
Portfolio Commentary | |||||
Fund Characteristics | |||||
Shareholder Fee Example | |||||
Schedule of Investments | |||||
Statement of Assets and Liabilities | |||||
Statement of Operations | |||||
Statement of Changes in Net Assets | |||||
Notes to Financial Statements | |||||
Financial Highlights | |||||
Report of Independent Registered Public Accounting Firm | |||||
Management | |||||
Approval of Management Agreement | |||||
Additional Information |
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.
Performance |
Total Returns as of November 30, 2020 | |||||||||||||||||
Average Annual Returns | |||||||||||||||||
Ticker Symbol | 1 year | 5 years | Since Inception | Inception Date | |||||||||||||
Investor Class | ANTVX | 6.47% | 3.11% | 1.31% | 3/19/15 | ||||||||||||
MSCI EAFE Value Index | — | -3.35% | 2.90% | 1.22% | — | ||||||||||||
G Class | ANTYX | 7.82% | 4.05% | 2.14% | 3/19/15 |
Fund returns would have been lower if a portion of the fees had not been waived.
Growth of $10,000 Over Life of Class | ||
$10,000 investment made March 19, 2015 | ||
Performance for other share classes will vary due to differences in fee structure. |
![chart-3d322c3d02e04e61a1a1.jpg](https://capedge.com/proxy/N-CSR/0000872825-21-000006/chart-3d322c3d02e04e61a1a1.jpg)
Value on November 30, 2020 | |||||
Investor Class — $10,770 | |||||
MSCI EAFE Value Index — $10,717 | |||||
Ending value of Investor Class would have been lower if a portion of the fees had not been waived.
Total Annual Fund Operating Expenses | |||||
Investor Class | G Class | ||||
1.11% | 0.76% |
The total annual fund operating expenses shown is as stated in the fund’s prospectus current as of the date of this report. The prospectus may vary from the expense ratio shown elsewhere in this report because it is based on a different time period, includes acquired fund fees and expenses, and, if applicable, does not include fee waivers or expense reimbursements.
Data presented reflect past performance. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance shown. Total returns for periods less than one year are not annualized. Investment return and principal value will fluctuate, and redemption value may be more or less than original cost. Data assumes reinvestment of dividends and capital gains, and none of the charts reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. To obtain performance data current to the most recent month end, please call 1-800-345-2021 or visit americancentury.com. For additional information about the fund, please consult the prospectus.
2
Portfolio Commentary |
Portfolio Managers: Yulin Long and Tsuyoshi Ozaki
In March 2020, portfolio manager Tsuyoshi Ozaki replaced Elizabeth Xie on the fund’s management team.
Performance Summary
NT International Value rose 7.82%* for the fiscal year ended November 30, 2020, compared with the -3.35% return of its benchmark, the MSCI EAFE Value Index. Fund results reflect operating expenses, while benchmark returns do not.
Global stock markets declined sharply in early 2020 amid significant volatility as the coronavirus pandemic led to severe global economic disruptions. Global economic activity grinded to a halt as countries closed borders, restricted travel and instituted social distancing protocols. Additionally, a price war between Saudi Arabia and Russia drove oil prices to record lows, further straining global financial markets. Following unprecedented fiscal and monetary stimulus by governments and global central banks to support economic activity, financial markets began to recover. Despite historic declines in gross domestic product in most global regions during the second quarter of 2020, optimism surrounding COVID-19 vaccine trials and better-than-expected economic earnings data supported equity markets during much of the second half of the reporting period. Nevertheless, international value-oriented stocks ended the reporting period with declines as a second wave of the coronavirus spread globally. In that environment, performance of international equities varied widely by region and style with European stocks trailing Japanese equities and value equities underperforming growth stocks.
Our stock selection process incorporates factors of valuation, quality, growth and sentiment, while minimizing unintended risks among industries and other risk characteristics. Security selection in the financials sector contributed the most to the fund’s relative returns. Stock choices in the consumer discretionary, communication services and industrials sectors also benefited performance. Conversely, stocks in the energy sector detracted fractionally from relative returns.
Geographically, stock choices within Japan and the U.K. contributed the most to relative returns. In contrast, security selection in Norway weighed modestly on the fund’s results.
Financials and Consumer Discretionary Stocks Drive Contribution
Diversified financial companies led outperformance in the financials sector. Sweden-based Kinnevik was among the top sector and fund contributors to relative performance. The investment company, with a primary focus on digital consumer businesses, benefited from changing consumer behavior during the pandemic. Kinnevik reported strong financial results as consumers increasingly turned to online platforms for activities like shopping and health care services. Limited exposure to banks also helped relative performance as returns of many banks were constrained by lower demand for financial products and increased loan default provisions during the pandemic’s economic uncertainty.
*All fund returns referenced in this commentary are for G Class shares. G Class returns would have been lower if a portion of the fees had not been waived. Performance for other share classes will vary due to differences in fee structure; when G Class performance exceeds that of the fund’s benchmark, other share classes may not. See page 2 for returns for all share classes.
3
In the consumer discretionary sector, auto components manufacturers were key drivers of outperformance. An overweight position in France-based automotive supplier Valeo was a leading driver of the sector’s relative gains. The company’s stock price advanced amid improving economic activity and a resumption of vehicle manufacturing in China following the lifting of coronavirus lockdowns. Relative contribution also came from Japan-based furniture chain Nitori Holdings, which rose following a successful merger bid for home improvement retailer Shimachu, as well as from Denmark-based jewelry maker Pandora, whose strong online sales offset limited foot traffic at its stores. We subsequently liquidated our position in Nitori.
A number of stocks in the communication services and industrials sectors also supported the fund’s outperformance. Several Japan-based stocks drove relative gains in the communication services sector, including entertainment company Nintendo, which benefited from higher purchases of video games and gaming consoles by consumers staying at home. Wireless telecommunication services provider NTT DOCOMO advanced amid expectations of 5G service rollouts. We ultimately exited the position. In industrials, Kone Oyj, a Finland-based engineering company, advanced on recovering demand for elevators and escalators in China, along with signs of resiliency in some residential construction markets.
Australia-based Fortescue Metals Group also contributed prominently to relative performance. The metals and mining company posted record shipments and profits as China’s economic recovery and ongoing supply disruptions in Brazil drove iron ore prices sharply higher.
Energy Sector Detracted Fractionally From Relative Results
Significant exposure to a number of stocks in the energy sector detracted modestly from the fund’s relative returns. In the oil, gas and consumable fuels industry, U.K.-based Royal Dutch Shell and Norway-based Aker BP declined along with the price of crude oil amid weakening demand due to the pandemic. We maintain exposure to Royal Dutch Shell based on strong valuation and quality factors, but exited our position in Aker BP.
Underweight exposure to Australia-based BHP Group also weighed on relative returns. The diversified mining company’s stock advanced amid higher prices and demand for industrial metals like iron ore and copper as economic activity in China, the world’s largest metals consumer, resumed. An overweight position in Spain-based bank Banco Bilbao Vizcaya Argentaria, which posted sharp coronavirus-related losses amid falling interest rates and rising nonperforming loans, also held back gains. Nevertheless, the stock’s valuation factors remain very attractive.
Portfolio Positioning
As we approach 2021, global economies continue to grapple with uncertainty surrounding the coronavirus pandemic. We believe our disciplined investment approach is particularly beneficial during periods of likely volatility, and we adhere to our process regardless of the market environment. We believe that this allows us to take advantage of opportunities presented by market inefficiencies. We employ a structured, disciplined investment approach for both stock selection and portfolio construction. We incorporate measures of valuation, quality, growth and sentiment into our stock selection process with the aim of producing consistent long-term performance. We seek to maintain balanced exposure to our fundamentally based, multidimensional drivers of stock returns, applying bottom-up research and analysis on individual stocks to determine positioning. As a result of this approach and our risk-control process, which seeks to limit active risk at the country, sector and industry level, we will have only modest overweights/underweights at any given time. As of November 30, 2020, the fund’s largest overweight positions are in the financials and consumer discretionary sectors. The fund’s largest underweights are in the consumer staples and real estate sectors. Geographically, the fund is overweight in Europe, notably in Spain, the Netherlands, France and Sweden, and underweight in Asia Pacific, particularly to Japan.
4
Fund Characteristics |
NOVEMBER 30, 2020 | |||||
Top Ten Holdings | % of net assets | ||||
TOTAL SE | 2.3% | ||||
Novartis AG | 2.0% | ||||
GlaxoSmithKline plc | 1.8% | ||||
Zurich Insurance Group AG | 1.7% | ||||
Royal Dutch Shell plc, B Shares | 1.6% | ||||
Iberdrola SA | 1.6% | ||||
Rio Tinto plc | 1.5% | ||||
Bayerische Motoren Werke AG | 1.5% | ||||
BNP Paribas SA | 1.4% | ||||
Allianz SE | 1.4% | ||||
Types of Investments in Portfolio | % of net assets | ||||
Common Stocks | 99.1% | ||||
Rights | —* | ||||
Warrants | —* | ||||
Total Equity Exposure | 99.1% | ||||
Temporary Cash Investments | 0.4% | ||||
Temporary Cash Investments - Securities Lending Collateral | 0.4% | ||||
Other Assets and Liabilities | 0.1% | ||||
*Category is less than 0.05% of total net assets. | |||||
Investments by Country | % of net assets | ||||
United Kingdom | 18.2% | ||||
Japan | 17.7% | ||||
France | 12.4% | ||||
Germany | 12.1% | ||||
Australia | 7.9% | ||||
Switzerland | 6.5% | ||||
Spain | 5.0% | ||||
Sweden | 3.6% | ||||
Italy | 3.5% | ||||
Singapore | 2.9% | ||||
Netherlands | 2.9% | ||||
Other Countries | 6.4% | ||||
Cash and Equivalents* | 0.9% |
*Includes temporary cash investments, temporary cash investments - securities lending collateral and other assets and liabilities.
5
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 June 1, 2020 to November 30, 2020.
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 6/1/20 | Ending Account Value 11/30/20 | Expenses Paid During Period(1) 6/1/20 - 11/30/20 | Annualized Expense Ratio(1) | |||||||||||
Actual | ||||||||||||||
Investor Class | $1,000 | $1,197.70 | $6.37 | 1.16% | ||||||||||
G Class | $1,000 | $1,204.30 | $0.00 | 0.00%(2) | ||||||||||
Hypothetical | ||||||||||||||
Investor Class | $1,000 | $1,019.20 | $5.86 | 1.16% | ||||||||||
G Class | $1,000 | $1,025.00 | $0.00 | 0.00%(2) |
(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. Annualized expense ratio reflects actual expenses, including any applicable fee waivers or expense reimbursements and excluding any acquired fund fees and expenses.
(2)Other expenses, which include directors' fees and expenses, did not exceed 0.005%.
6
Schedule of Investments |
NOVEMBER 30, 2020
Shares | Value | |||||||
COMMON STOCKS — 99.1% | ||||||||
Australia — 7.9% | ||||||||
Aristocrat Leisure Ltd. | 462,646 | $ | 10,897,316 | |||||
Australia & New Zealand Banking Group Ltd. | 631,748 | 10,507,970 | ||||||
BHP Group Ltd. | 376,647 | 10,458,891 | ||||||
BlueScope Steel Ltd. | 430,900 | 5,413,213 | ||||||
Commonwealth Bank of Australia | 148,246 | 8,610,324 | ||||||
Fortescue Metals Group Ltd. | 1,187,722 | 15,902,613 | ||||||
Magellan Financial Group Ltd. | 86,382 | 3,755,559 | ||||||
National Australia Bank Ltd. | 245,547 | 4,129,382 | ||||||
Santos Ltd. | 994,678 | 4,435,642 | ||||||
Wesfarmers Ltd. | 213,802 | 7,764,561 | ||||||
Westpac Banking Corp. | 277,477 | 4,085,120 | ||||||
Woodside Petroleum Ltd. | 560,035 | 9,103,790 | ||||||
95,064,381 | ||||||||
Austria — 0.7% | ||||||||
Raiffeisen Bank International AG | 248,153 | 4,705,293 | ||||||
voestalpine AG | 122,104 | 3,912,266 | ||||||
8,617,559 | ||||||||
Belgium — 1.5% | ||||||||
Ageas SA/NV | 171,597 | 8,414,751 | ||||||
Anheuser-Busch InBev SA | 73,947 | 4,933,006 | ||||||
KBC Group NV(1) | 59,360 | 4,120,050 | ||||||
17,467,807 | ||||||||
Denmark — 1.0% | ||||||||
AP Moller - Maersk A/S, A Shares | 2,617 | 4,942,063 | ||||||
Pandora A/S | 64,847 | 6,472,321 | ||||||
11,414,384 | ||||||||
Finland — 1.0% | ||||||||
Fortum Oyj | 103,948 | 2,378,210 | ||||||
Kone Oyj, B Shares | 112,147 | 9,393,136 | ||||||
11,771,346 | ||||||||
France — 12.4% | ||||||||
BNP Paribas SA(1) | 326,806 | 16,654,528 | ||||||
Bouygues SA | 116,920 | 4,642,577 | ||||||
CNP Assurances(1) | 250,875 | 3,978,988 | ||||||
Covivio | 38,896 | 3,167,619 | ||||||
Eiffage SA(1) | 70,676 | 6,898,441 | ||||||
Hermes International | 6,543 | 6,362,474 | ||||||
L'Oreal SA | 17,067 | 6,229,743 | ||||||
Legrand SA | 79,855 | 6,739,833 | ||||||
Peugeot SA(1) | 390,208 | 9,150,493 | ||||||
Publicis Groupe SA | 292,119 | 13,232,634 | ||||||
Safran SA(1) | 51,601 | 7,494,292 | ||||||
Sanofi | 99,157 | 9,976,992 | ||||||
Schneider Electric SE | 68,495 | 9,501,890 | ||||||
Societe Generale SA(1) | 287,711 | 5,688,954 | ||||||
TOTAL SE | 663,099 | 28,110,999 |
7
Shares | Value | |||||||
Valeo SA | 255,366 | $ | 9,854,518 | |||||
Vinci SA | 16,677 | 1,694,178 | ||||||
149,379,153 | ||||||||
Germany — 12.1% | ||||||||
adidas AG(1) | 9,088 | 2,893,955 | ||||||
Allianz SE | 69,229 | 16,324,006 | ||||||
Aroundtown SA(1) | 472,299 | 3,274,168 | ||||||
BASF SE | 107,751 | 7,882,599 | ||||||
Bayer AG | 41,944 | 2,413,184 | ||||||
Bayerische Motoren Werke AG | 206,427 | 17,972,582 | ||||||
Brenntag AG | 178,068 | 13,598,766 | ||||||
Commerzbank AG(1) | 472,300 | 2,931,165 | ||||||
Continental AG | 91,807 | 12,490,891 | ||||||
Daimler AG | 226,649 | 15,253,672 | ||||||
Deutsche Boerse AG | 20,897 | 3,483,740 | ||||||
Deutsche Post AG | 85,740 | 4,137,859 | ||||||
Deutsche Telekom AG | 81,267 | 1,463,714 | ||||||
Hannover Rueck SE | 17,403 | 2,912,923 | ||||||
HeidelbergCement AG | 77,015 | 5,471,709 | ||||||
Muenchener Rueckversicherungs-Gesellschaft AG | 52,077 | 14,510,452 | ||||||
Siemens AG | 95,756 | 12,772,654 | ||||||
Siemens Energy AG(1) | 47,878 | 1,426,060 | ||||||
Telefonica Deutschland Holding AG | 1,452,030 | 4,004,855 | ||||||
145,218,954 | ||||||||
Hong Kong — 1.6% | ||||||||
BOC Hong Kong Holdings Ltd. | 2,433,500 | 7,944,208 | ||||||
Hang Seng Bank Ltd. | 400,200 | 6,968,595 | ||||||
Sands China Ltd. | 477,200 | 1,956,445 | ||||||
Techtronic Industries Co. Ltd. | 154,000 | 1,977,808 | ||||||
18,847,056 | ||||||||
Israel — 0.3% | ||||||||
Israel Discount Bank Ltd., A Shares | 1,165,335 | 3,928,743 | ||||||
Italy — 3.5% | ||||||||
Enel SpA | 1,146,841 | 11,431,808 | ||||||
Eni SpA | 484,155 | 4,758,143 | ||||||
Ferrari NV | 36,328 | 7,700,249 | ||||||
FinecoBank Banca Fineco SpA(1) | 124,517 | 1,944,100 | ||||||
Moncler SpA(1) | 99,419 | 4,850,134 | ||||||
Tenaris SA | 1,495,543 | 11,544,343 | ||||||
42,228,777 | ||||||||
Japan — 17.7% | ||||||||
Advantest Corp. | 47,400 | 3,300,548 | ||||||
Brother Industries Ltd. | 311,200 | 5,916,311 | ||||||
Central Japan Railway Co. | 16,600 | 2,125,566 | ||||||
Denso Corp. | 188,100 | 8,829,048 | ||||||
FANUC Corp. | 11,800 | 2,846,989 | ||||||
Fast Retailing Co. Ltd. | 4,600 | 3,766,173 | ||||||
Hino Motors Ltd. | 605,600 | 5,209,413 | ||||||
Honda Motor Co. Ltd. | 62,100 | 1,709,749 | ||||||
Hoya Corp. | 27,700 | 3,691,581 | ||||||
ITOCHU Corp. | 268,700 | 7,104,828 | ||||||
KDDI Corp. | 406,400 | 11,652,798 |
8
Shares | Value | |||||||
Komatsu Ltd. | 72,000 | $ | 1,753,427 | |||||
LIXIL Group Corp. | 444,700 | 10,670,959 | ||||||
Mitsubishi Corp. | 121,500 | 2,816,569 | ||||||
Mitsubishi Electric Corp. | 247,200 | 3,634,924 | ||||||
Mitsubishi UFJ Financial Group, Inc. | 471,200 | 2,010,437 | ||||||
Mitsui & Co. Ltd. | 178,600 | 3,024,913 | ||||||
Nintendo Co. Ltd. | 9,400 | 5,339,822 | ||||||
Nippon Yusen KK | 261,500 | 5,658,617 | ||||||
Obayashi Corp. | 678,200 | 5,984,376 | ||||||
ORIX Corp. | 825,600 | 12,163,836 | ||||||
Otsuka Holdings Co. Ltd. | 57,000 | 2,303,947 | ||||||
Panasonic Corp. | 413,900 | 4,385,591 | ||||||
Recruit Holdings Co. Ltd. | 266,600 | 11,172,049 | ||||||
Renesas Electronics Corp.(1) | 725,700 | 6,465,071 | ||||||
Sekisui House Ltd. | 487,900 | 8,737,352 | ||||||
Shin-Etsu Chemical Co. Ltd. | 57,000 | 9,303,974 | ||||||
Shizuoka Bank Ltd. (The) | 228,100 | 1,620,613 | ||||||
Softbank Corp. | 547,000 | 6,734,775 | ||||||
SoftBank Group Corp. | 50,000 | 3,490,010 | ||||||
Sony Corp. | 128,400 | 11,939,566 | ||||||
Sumitomo Mitsui Financial Group, Inc. | 307,600 | 8,909,539 | ||||||
Tokyo Electron Ltd. | 21,700 | 7,385,195 | ||||||
Toyota Industries Corp. | 78,400 | 5,630,638 | ||||||
Toyota Motor Corp. | 233,300 | 15,593,736 | ||||||
212,882,940 | ||||||||
Netherlands — 2.9% | ||||||||
ING Groep NV(1) | 641,006 | 6,230,007 | ||||||
Koninklijke Ahold Delhaize NV | 190,719 | 5,451,081 | ||||||
Koninklijke DSM NV | 2,181 | 357,332 | ||||||
NN Group NV | 217,370 | 8,806,644 | ||||||
Randstad NV(1) | 222,723 | 13,775,892 | ||||||
34,620,956 | ||||||||
Singapore — 2.9% | ||||||||
DBS Group Holdings Ltd. | 639,003 | 11,848,205 | ||||||
Oversea-Chinese Banking Corp. Ltd.(2) | 1,676,682 | 12,475,793 | ||||||
United Overseas Bank Ltd. | 651,700 | 10,834,823 | ||||||
35,158,821 | ||||||||
Spain — 5.0% | ||||||||
ACS Actividades de Construccion y Servicios SA | 84,115 | 2,649,422 | ||||||
Banco Bilbao Vizcaya Argentaria SA | 2,056,022 | 9,567,413 | ||||||
Banco Santander SA(1) | 1,187,209 | 3,409,266 | ||||||
CaixaBank SA | 2,528,661 | 6,452,693 | ||||||
Enagas SA | 92,592 | 2,251,730 | ||||||
Endesa SA | 282,714 | 8,074,992 | ||||||
Iberdrola SA | 1,395,695 | 19,019,611 | ||||||
Industria de Diseno Textil SA(2) | 140,822 | 4,665,956 | ||||||
Mapfre SA | 1,217,341 | 2,322,003 | ||||||
Telefonica SA | 495,946 | 2,168,187 | ||||||
60,581,273 | ||||||||
Sweden — 3.6% | ||||||||
Atlas Copco AB, A Shares(2) | 12,035 | 607,124 | ||||||
Hennes & Mauritz AB, B Shares(1) | 106,400 | 2,246,705 |
9
Shares | Value | |||||||
Industrivarden AB, C Shares(1) | 291,440 | $ | 8,879,234 | |||||
Investor AB, B Shares | 180,472 | 12,467,769 | ||||||
Kinnevik AB, Class B | 140,751 | 6,993,896 | ||||||
Lundin Energy AB | 198,752 | 4,749,170 | ||||||
Sandvik AB(1) | 347,253 | 7,797,535 | ||||||
43,741,433 | ||||||||
Switzerland — 6.5% | ||||||||
Cie Financiere Richemont SA | 23,278 | 1,926,927 | ||||||
Geberit AG | 11,040 | 6,634,840 | ||||||
Kuehne + Nagel International AG | 66,850 | 15,107,507 | ||||||
Novartis AG | 264,237 | 23,964,948 | ||||||
Partners Group Holding AG | 7,090 | 7,554,124 | ||||||
UBS Group AG | 217,458 | 3,079,654 | ||||||
Zurich Insurance Group AG | 50,173 | 20,338,296 | ||||||
78,606,296 | ||||||||
Taiwan — 0.3% | ||||||||
Taiwan Semiconductor Manufacturing Co. Ltd., ADR | 37,089 | 3,598,375 | ||||||
United Kingdom — 18.2% | ||||||||
3i Group plc | 532,398 | 7,583,682 | ||||||
Admiral Group plc | 305,822 | 11,637,556 | ||||||
Aviva plc | 2,602,639 | 11,122,245 | ||||||
BAE Systems plc | 417,711 | 2,809,167 | ||||||
Barclays plc(1) | 4,824,391 | 8,630,364 | ||||||
BHP Group plc | 575,507 | 13,051,476 | ||||||
BP plc | 2,780,164 | 9,095,551 | ||||||
Direct Line Insurance Group plc | 1,337,288 | 5,266,125 | ||||||
Evraz plc | 2,747,759 | 14,161,796 | ||||||
Ferguson plc | 94,494 | 10,585,058 | ||||||
GlaxoSmithKline plc | 1,160,719 | 21,239,453 | ||||||
HSBC Holdings plc | 1,525,756 | 7,875,622 | ||||||
ITV plc(1) | 4,458,391 | 5,597,746 | ||||||
Legal & General Group plc | 3,304,923 | 11,110,141 | ||||||
Lloyds Banking Group plc(1) | 14,310,549 | 6,778,339 | ||||||
M&G plc | 2,441,552 | 6,090,797 | ||||||
Next plc | 123,876 | 10,800,899 | ||||||
Rio Tinto plc | 284,934 | 18,462,573 | ||||||
Royal Dutch Shell plc, B Shares | 1,174,685 | 19,119,857 | ||||||
St. James's Place plc | 147,260 | 1,998,780 | ||||||
Standard Life Aberdeen plc | 2,186,521 | 7,883,859 | ||||||
Vodafone Group plc | 5,252,275 | 8,640,059 | ||||||
219,541,145 | ||||||||
TOTAL COMMON STOCKS (Cost $1,042,406,405) | 1,192,669,399 | |||||||
RIGHTS† | ||||||||
Spain† | ||||||||
Banco Santander SA(1) (Cost $115,498) | 1,187,209 | 148,273 | ||||||
WARRANTS† | ||||||||
Switzerland† | ||||||||
Cie Financiere Richemont SA(1) (Cost $—) | 46,556 | 9,222 |
10
Shares | Value | |||||||
TEMPORARY CASH INVESTMENTS — 0.4% | ||||||||
Repurchase Agreement, BMO Capital Markets Corp., (collateralized by various U.S. Treasury obligations, 0.625% - 1.375%, 1/31/25 - 5/15/30, valued at $2,366,490), in a joint trading account at 0.06%, dated 11/30/20, due 12/1/20 (Delivery value $2,317,922) | $ | 2,317,918 | ||||||
Repurchase Agreement, Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 0.625% - 2.500%, 3/31/23 - 4/15/23, valued at $2,658,195), at 0.07%, dated 11/30/20, due 12/1/20 (Delivery value $2,606,005) | 2,606,000 | |||||||
State Street Institutional U.S. Government Money Market Fund, Premier Class | 122 | 122 | ||||||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $4,924,040) | 4,924,040 | |||||||
TEMPORARY CASH INVESTMENTS - SECURITIES LENDING COLLATERAL(3) — 0.4% | ||||||||
State Street Navigator Securities Lending Government Money Market Portfolio (Cost $5,055,789) | 5,055,789 | 5,055,789 | ||||||
TOTAL INVESTMENT SECURITIES — 99.9% (Cost $1,052,501,732) | 1,202,806,723 | |||||||
OTHER ASSETS AND LIABILITIES — 0.1% | 1,515,868 | |||||||
TOTAL NET ASSETS — 100.0% | $ | 1,204,322,591 |
MARKET SECTOR DIVERSIFICATION | |||||
(as a % of net assets) | |||||
Financials | 31.0 | % | |||
Industrials | 17.3 | % | |||
Consumer Discretionary | 16.1 | % | |||
Materials | 8.8 | % | |||
Energy | 7.7 | % | |||
Health Care | 5.3 | % | |||
Communication Services | 5.2 | % | |||
Utilities | 3.5 | % | |||
Information Technology | 2.2 | % | |||
Consumer Staples | 1.4 | % | |||
Real Estate | 0.6 | % | |||
Cash and Equivalents* | 0.9 | % |
*Includes temporary cash investments, temporary cash investments - securities lending collateral and other assets and liabilities.
NOTES TO SCHEDULE OF INVESTMENTS | ||||||||
ADR | - | American Depositary Receipt |
†Category is less than 0.05% of total net assets.
(1)Non-income producing.
(2)Security, or a portion thereof, is on loan. At the period end, the aggregate value of securities on loan was $4,958,272. The amount of securities on loan indicated may not correspond with the securities on loan identified because securities with pending sales are in the process of recall from the brokers.
(3)Investment of cash collateral from securities on loan. At the period end, the aggregate value of the collateral held by the fund was $5,230,690, which includes securities collateral of $174,901.
See Notes to Financial Statements.
11
Statement of Assets and Liabilities |
NOVEMBER 30, 2020 | |||||
Assets | |||||
Investment securities, at value (cost of $1,047,445,943) — including $4,958,272 of securities on loan | $ | 1,197,750,934 | |||
Investment made with cash collateral received for securities on loan, at value (cost of $5,055,789) | 5,055,789 | ||||
Total investment securities, at value (cost of $1,052,501,732) | 1,202,806,723 | ||||
Foreign currency holdings, at value (cost of $153,004) | 152,881 | ||||
Receivable for investments sold | 1,261,569 | ||||
Receivable for capital shares sold | 337 | ||||
Dividends and interest receivable | 5,790,421 | ||||
Securities lending receivable | 4,522 | ||||
1,210,016,453 | |||||
Liabilities | |||||
Payable for collateral received for securities on loan | 5,055,789 | ||||
Payable for capital shares redeemed | 495,603 | ||||
Accrued management fees | 142,470 | ||||
5,693,862 | |||||
Net Assets | $ | 1,204,322,591 | |||
Net Assets Consist of: | |||||
Capital (par value and paid-in surplus) | $ | 1,179,007,210 | |||
Distributable earnings | 25,315,381 | ||||
$ | 1,204,322,591 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | |||||||||
Investor Class, $0.01 Par Value | $158,100,219 | 16,948,432 | $9.33 | ||||||||
G Class, $0.01 Par Value | $1,046,222,372 | 110,911,043 | $9.43 |
See Notes to Financial Statements.
12
Statement of Operations |
YEAR ENDED NOVEMBER 30, 2020 | |||||
Investment Income (Loss) | |||||
Income: | |||||
Dividends (net of foreign taxes withheld of $2,069,749) | $ | 29,074,171 | |||
Securities lending, net | 125,619 | ||||
Interest | 36,176 | ||||
29,235,966 | |||||
Expenses: | |||||
Management fees | 7,924,864 | ||||
Directors' fees and expenses | 27,583 | ||||
Other expenses | 50,095 | ||||
8,002,542 | |||||
Fees waived(1) | (6,012,891) | ||||
1,989,651 | |||||
Net investment income (loss) | 27,246,315 | ||||
Realized and Unrealized Gain (Loss) | |||||
Net realized gain (loss) on: | |||||
Investment transactions | (42,329,419) | ||||
Futures contract transactions | 6,322,107 | ||||
Foreign currency translation transactions | (158,863) | ||||
(36,166,175) | |||||
Change in net unrealized appreciation (depreciation) on: | |||||
Investments | 111,311,074 | ||||
Translation of assets and liabilities in foreign currencies | 264,651 | ||||
111,575,725 | |||||
Net realized and unrealized gain (loss) | 75,409,550 | ||||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 102,655,865 |
(1)Amount consists of $10,471 and $6,002,420 for Investor Class and G Class, respectively.
See Notes to Financial Statements.
13
Statement of Changes in Net Assets |
YEARS ENDED NOVEMBER 30, 2020 AND NOVEMBER 30, 2019 | ||||||||
Increase (Decrease) in Net Assets | November 30, 2020 | November 30, 2019 | ||||||
Operations | ||||||||
Net investment income (loss) | $ | 27,246,315 | $ | 34,108,636 | ||||
Net realized gain (loss) | (36,166,175) | (57,902,807) | ||||||
Change in net unrealized appreciation (depreciation) | 111,575,725 | 59,906,873 | ||||||
Net increase (decrease) in net assets resulting from operations | 102,655,865 | 36,112,702 | ||||||
Distributions to Shareholders | ||||||||
From earnings: | ||||||||
Investor Class | (6,226,904) | (4,559,475) | ||||||
G Class | (29,641,753) | (25,029,348) | ||||||
Decrease in net assets from distributions | (35,868,657) | (29,588,823) | ||||||
Capital Share Transactions | ||||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | 315,024,875 | (19,624,059) | ||||||
Net increase (decrease) in net assets | 381,812,083 | (13,100,180) | ||||||
Net Assets | ||||||||
Beginning of period | 822,510,508 | 835,610,688 | ||||||
End of period | $ | 1,204,322,591 | $ | 822,510,508 |
See Notes to Financial Statements.
14
Notes to Financial Statements |
NOVEMBER 30, 2020
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 or the Bloomberg Industry Classification Standard for the tobacco industry. The fund offers the Investor Class and G Class.
2. Significant Accounting Policies
The following is a summary of significant accounting policies consistently followed by the fund in preparation of its financial statements. The fund is an investment company and follows accounting and reporting guidance in accordance with accounting principles generally accepted in the United States of America. This may require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from these estimates. Management evaluated the impact of events or transactions occurring through the date the financial statements were issued that would merit recognition or disclosure.
Investment Valuations — The fund determines the fair value of its investments and computes its net asset value (NAV) 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 NAV per share. Repurchase agreements are valued at cost, which approximates fair value. Exchange-traded futures contracts are valued at the settlement price as provided by the appropriate exchange.
If the fund determines that the market price for an investment is not readily available or the valuation methods mentioned above do not reflect an investment’s fair value, such investment is valued as determined in good faith by the Board of Directors or its delegate, in accordance with policies and procedures adopted by the Board of Directors. In its determination of fair value, the fund may review several factors including, but not limited to, market information regarding the specific investment or comparable investments and correlation with other investment types, futures indices or general market indicators. Circumstances that may cause the fund to use these procedures to value an investment include, but are not limited to: an investment has been declared in default or is distressed; trading in a security has been suspended during the trading day or a security is not actively trading on its principal exchange; prices received from a regular pricing source are deemed unreliable; or there is a foreign market holiday and no trading occurred.
15
The fund monitors for significant events occurring after the close of an investment’s primary exchange but before the fund’s NAV 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. 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. Securities lending income is net of fees and rebates earned by the lending agent for its services.
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.
Segregated Assets — In accordance with the 1940 Act, the fund segregates assets on its books and records to cover certain types of investment securities and other financial instruments. ACIM monitors, on a daily basis, the securities segregated to ensure the fund designates a sufficient amount of liquid assets, marked-to-market daily. The fund may also receive assets or be required to pledge assets at the custodian bank or with a broker for collateral requirements.
Income Tax Status — It is the fund’s policy to distribute substantially all net investment income and net realized gains to shareholders and to otherwise qualify as a regulated investment company under provisions of the Internal Revenue Code. Accordingly, no provision has been made for income taxes. The fund files U.S. federal, state, local and non-U.S. tax returns as applicable. The fund's tax returns are subject to examination by the relevant taxing authority until expiration of the applicable statute of limitations, which is generally three years from the date of filing but can be longer in certain jurisdictions. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination and for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
16
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 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.
Securities Lending — Securities are lent to qualified financial institutions and brokers. State Street Bank & Trust Co. serves as securities lending agent to the fund pursuant to a Securities Lending Agreement. The lending of securities exposes the fund to risks such as: the borrowers may fail to return the loaned securities, the borrowers may not be able to provide additional collateral, the fund may experience delays in recovery of the loaned securities or delays in access to collateral, or the fund may experience losses related to the investment collateral. To minimize certain risks, loan counterparties pledge collateral in the form of cash and/or securities. The lending agent has agreed to indemnify the fund in the case of default of any securities borrowed. Cash collateral received is invested in the State Street Navigator Securities Lending Government Money Market Portfolio, a money market mutual fund registered under the 1940 Act. The loans may also be secured by U.S. government securities in an amount at least equal to the market value of the securities loaned, plus accrued interest and dividends, determined on a daily basis and adjusted accordingly. By lending securities, the fund seeks to increase its net investment income through the receipt of interest and fees. Such income is reflected separately within the Statement of Operations. The value of loaned securities and related collateral outstanding at period end, if any, are shown on a gross basis within the Schedule of Investments and Statement of Assets and Liabilities.
The following table reflects a breakdown of transactions accounted for as secured borrowings, the gross obligation by the type of collateral pledged, and the remaining contractual maturity of those transactions as of November 30, 2020.
Remaining Contractual Maturity of Agreements | |||||||||||||||||
Overnight and Continuous | <30 days | Between 30 & 90 days | >90 days | Total | |||||||||||||
Securities Lending Transactions(1) | |||||||||||||||||
Common Stocks | $ | 5,055,789 | — | — | — | $ | 5,055,789 | ||||||||||
Gross amount of recognized liabilities for securities lending transactions | $ | 5,055,789 |
(1)Amount represents the payable for cash collateral received for securities on loan. This will generally be in the Overnight and Continuous column as the securities are typically callable on demand.
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, 64% of the shares of the fund. Related parties do not invest in the fund for the purpose of exercising management or control.
17
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 ACIM will pay all expenses of managing and operating the fund, except brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), and extraordinary expenses. The fee is computed and accrued daily based on each class's daily net assets and paid monthly in arrears. The difference in the fee among the classes is a result of their separate arrangements for non-Rule 12b-1 shareholder services, which may be provided indirectly through another American Century Investments mutual fund. It is not the result of any difference in advisory or custodial fees or other expenses related to the management of the fund’s assets, which do not vary by class. From December 1, 2019 through July 31, 2020, the rate of the fee was determined by applying a fee rate calculation formula. This formula took into account the fund’s assets as well as certain assets, if any, of other clients of the investment advisor outside the American Century Investments family of funds (such as subadvised funds and separate accounts) that use very similar investment teams and strategies (strategy assets). The strategy assets of the fund also included the assets of International Value Fund, one fund in a series issued by the corporation. The annual management fee schedule ranged from 1.100% to 1.300% for the Investor Class and 0.750% to 0.950% for the G Class. From December 1, 2019 through July 31, 2020, the investment advisor agreed to waive 0.01% of the fund’s management fee. Effective August 1, 2020, the stepped annual management fee schedule and the waiver were terminated. The annual management fee is 1.10% for the Investor Class and 0.75% for the G Class. The investment advisor agreed to waive the G Class’s management fee in its entirety. The investment advisor expects this waiver to remain in effect permanently and cannot terminate it without the approval of the Board of Directors.
The effective annual management fee before and after waiver for each class for the period ended November 30, 2020 are as follows:
Effective Annual Management Fee | ||||||||
Before Waiver | After Waiver | |||||||
Investor Class | 1.20% | 1.19% | ||||||
G Class | 0.85% | 0.00% |
Directors' Fees and Expenses — The Board of Directors is responsible for overseeing the investment advisor’s management and operations of the fund. The directors receive detailed information about the fund and its investment advisor regularly throughout the year, and meet at least quarterly with management of the investment advisor to review reports about fund operations. The fund’s officers do not receive compensation from the fund.
Interfund Transactions — The fund may enter into security transactions with other American Century Investments funds and other client accounts of the investment advisor, in accordance with the 1940 Act rules and procedures adopted by the Board of Directors. The rules and procedures require, among other things, that these transactions be effected at the independent current market price of the security. During the period, the interfund purchases were $1,996,974 and there were no interfund sales.
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments and in kind transactions, for the period ended November 30, 2020 were $846,926,342 and $899,007,709, respectively.
On July 29, 2020, the fund received investment securities valued at $369,090,818 from a purchase in kind from other products managed by the fund's investment advisor. A purchase in kind occurs when a fund receives securities into its portfolio in lieu of cash as payment from a purchasing shareholder.
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5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Year ended November 30, 2020 | Year ended November 30, 2019 | |||||||||||||
Shares | Amount | Shares | Amount | |||||||||||
Investor Class/Shares Authorized | 250,000,000 | 250,000,000 | ||||||||||||
Sold | 1,623,638 | $ | 12,336,149 | 3,625,256 | $ | 31,701,431 | ||||||||
Issued in reinvestment of distributions | 688,817 | 6,226,904 | 546,700 | 4,559,475 | ||||||||||
Redeemed | (5,402,505) | (46,685,537) | (8,488,820) | (74,209,312) | ||||||||||
(3,090,050) | (28,122,484) | (4,316,864) | (37,948,406) | |||||||||||
G Class/Shares Authorized | 925,000,000 | 925,000,000 | ||||||||||||
Sold | 56,753,068 | 478,176,161 | 19,857,993 | 175,964,884 | ||||||||||
Issued in reinvestment of distributions | 3,282,586 | 29,641,753 | 3,004,724 | 25,029,348 | ||||||||||
Redeemed | (19,089,694) | (164,670,555) | (20,562,049) | (182,669,885) | ||||||||||
40,945,960 | 343,147,359 | 2,300,668 | 18,324,347 | |||||||||||
Net increase (decrease) | 37,855,910 | $ | 315,024,875 | (2,016,196) | $ | (19,624,059) |
6. Fair Value Measurements
The fund’s investments valuation process is based on several considerations and may use multiple inputs to determine the fair value of the investments held by the fund. In conformity with accounting principles generally accepted in the United States of America, the inputs used to determine a valuation are classified into three broad levels.
•Level 1 valuation inputs consist of unadjusted quoted prices in an active market for identical investments.
•Level 2 valuation inputs consist of direct or indirect observable market data (including quoted prices for comparable investments, evaluations of subsequent market events, interest rates, prepayment speeds, credit risk, etc.). These inputs also consist of quoted prices for identical investments initially expressed in local currencies that are adjusted through translation into U.S. dollars.
•Level 3 valuation inputs consist of unobservable data (including a fund’s own assumptions).
The level classification is based on the lowest level input that is significant to the fair valuation measurement. The valuation inputs are not necessarily an indication of the risks associated with investing in these securities or other financial instruments.
The following is a summary of the level classifications as of period end. The Schedule of Investments provides additional information on the fund’s portfolio holdings.
Level 1 | Level 2 | Level 3 | |||||||||
Assets | |||||||||||
Investment Securities | |||||||||||
Common Stocks | $ | 3,598,375 | $ | 1,189,071,024 | — | ||||||
Rights | — | 148,273 | — | ||||||||
Warrants | — | 9,222 | — | ||||||||
Temporary Cash Investments | 122 | 4,923,918 | — | ||||||||
Temporary Cash Investments - Securities Lending Collateral | 5,055,789 | — | — | ||||||||
$ | 8,654,286 | $ | 1,194,152,437 | — |
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7. Derivative Instruments
Equity Price Risk — The fund is subject to equity price risk in the normal course of pursuing its investment objectives. A fund may enter into futures contracts based on an equity index in order to manage its exposure to changes in market conditions. A fund may purchase futures contracts to gain exposure to increases in market value or sell futures contracts to protect against a decline in market value. Upon entering into a futures contract, a fund is required to deposit either cash or securities in an amount equal to a certain percentage of the contract value (initial margin). Subsequent payments (variation margin) are made or received daily, in cash, by a fund. The variation margin is equal to the daily change in the contract value and is recorded as unrealized gains and losses. A fund recognizes a realized gain or loss when the contract is closed or expires. Net realized and unrealized gains or losses occurring during the holding period of futures contracts are a component of net realized gain (loss) on futures contract transactions and change in net unrealized appreciation (depreciation) on futures contracts, respectively. One of the risks of entering into futures contracts is the possibility that the change in value of the contract may not correlate with the changes in value of the underlying securities. The fund's average notional exposure to equity price risk derivative instruments held during the period was $22,138,024 futures contracts purchased.
At period end, the fund did not have any derivative instruments disclosed on the Statement of Assets and Liabilities. For the year ended November 30, 2020, the effect of equity price risk derivative instruments on the Statement of Operations was $6,322,107 in net realized gain (loss) on futures contract transactions.
8. Risk Factors
The value of the fund’s shares will go up and down, sometimes rapidly or unpredictably, based on the performance of the securities owned by the fund and other factors generally affecting the securities market. Market risks, including political, regulatory, economic and social developments, can affect the value of the fund’s investments. Natural disasters, public health emergencies, terrorism and other unforeseeable events may lead to increased market volatility and may have adverse long-term effects on world economies and markets generally.
There are certain risks involved in investing in foreign securities. These risks include those resulting from political events (such as civil unrest, national elections and imposition of exchange controls), social and economic events (such as labor strikes and rising inflation), and natural disasters. Securities of foreign issuers may be less liquid and more volatile. Investing in emerging markets or a significant portion of assets in one country or region 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 is owned by a relatively small number of shareholders, and in the event such shareholders redeem, the ongoing operations of the fund may be at risk.
The fund’s investment process may result in high portfolio turnover, which could mean high transaction costs, affecting both performance and capital gains tax liabilities to investors.
9. Federal Tax Information
On December 22, 2020, the fund declared and paid the following per-share distributions from net investment income to shareholders of record on December 21, 2020:
Investor Class | G Class | ||||
$0.1831 | $0.2985 |
The tax character of distributions paid during the years ended November 30, 2020 and November 30, 2019 were as follows:
2020 | 2019 | |||||||
Distributions Paid From | ||||||||
Ordinary income | $ | 35,868,657 | $ | 29,588,823 | ||||
Long-term capital gains | — | — |
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The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
As of period end, the federal tax cost of investments and the components of distributable earnings on a tax-basis were as follows:
Federal tax cost of investments | $ | 1,086,343,615 | |||
Gross tax appreciation of investments | $ | 138,535,716 | |||
Gross tax depreciation of investments | (22,072,608) | ||||
Net tax appreciation (depreciation) of investments | 116,463,108 | ||||
Net tax appreciation (depreciation) on derivatives and translation of assets and liabilities in foreign currencies | 186,928 | ||||
Net tax appreciation (depreciation) | $ | 116,650,036 | |||
Undistributed ordinary income | $ | 33,969,367 | |||
Accumulated short-term capital losses | $ | (82,084,795) | |||
Accumulated long-term capital losses | $ | (43,219,227) |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales.
Accumulated capital losses 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.
21
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 | |||||||||||||||||||||||||||||||||||||||||
2020 | $9.06 | 0.17 | 0.41 | 0.58 | (0.31) | $9.33 | 6.47% | 1.20% | 1.21% | 2.19% | 2.18% | 100% | $158,100 | ||||||||||||||||||||||||||||
2019 | $9.00 | 0.28 | 0.02 | 0.30 | (0.24) | $9.06 | 3.56% | 1.29% | 1.29% | 3.20% | 3.20% | 82% | $181,458 | ||||||||||||||||||||||||||||
2018 | $10.53 | 0.25 | (1.47) | (1.22) | (0.31) | $9.00 | (11.95)% | 1.29% | 1.29% | 2.48% | 2.48% | 76% | $219,273 | ||||||||||||||||||||||||||||
2017 | $8.73 | 0.24 | 1.83 | 2.07 | (0.27) | $10.53 | 24.32% | 1.29% | 1.29% | 2.44% | 2.44% | 79% | $242,242 | ||||||||||||||||||||||||||||
2016 | $9.24 | 0.25 | (0.56) | (0.31) | (0.20) | $8.73 | (3.42)% | 1.30% | 1.30% | 2.88% | 2.88% | 81% | $201,138 | ||||||||||||||||||||||||||||
G Class | |||||||||||||||||||||||||||||||||||||||||
2020 | $9.16 | 0.28 | 0.42 | 0.70 | (0.43) | $9.43 | 7.82% | 0.01% | 0.86% | 3.38% | 2.53% | 100% | $1,046,222 | ||||||||||||||||||||||||||||
2019 | $9.11 | 0.40 | —(3) | 0.40 | (0.35) | $9.16 | 4.77% | 0.00%(4) | 0.94% | 4.49% | 3.55% | 82% | $641,053 | ||||||||||||||||||||||||||||
2018 | $10.59 | 0.38 | (1.48) | (1.10) | (0.38) | $9.11 | (10.79)% | 0.01% | 0.94% | 3.76% | 2.83% | 76% | $616,338 | ||||||||||||||||||||||||||||
2017 | $8.75 | 0.29 | 1.84 | 2.13 | (0.29) | $10.59 | 24.99% | 0.69% | 1.04% | 3.04% | 2.69% | 79% | $710,717 | ||||||||||||||||||||||||||||
2016 | $9.25 | 0.26 | (0.55) | (0.29) | (0.21) | $8.75 | (3.16)% | 1.10% | 1.10% | 3.08% | 3.08% | 81% | $586,173 |
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)Per-share amount was less than $0.005.
(4)Ratio was less than 0.005%.
See Notes to Financial Statements.
Report of Independent Registered Public Accounting Firm |
To the Shareholders and the Board of Directors of American Century World Mutual Funds, Inc.:
Opinion on the Financial Statements and Financial Highlights
We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of NT International Value Fund (the “Fund”), one of the funds constituting the American Century World Mutual Funds, Inc., as of November 30, 2020, the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of NT International Value Fund of the American Century World Mutual Funds, Inc. as of November 30, 2020, and the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on the Fund’s financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. Our procedures included confirmation of securities owned as of November 30, 2020, by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
DELOITTE & TOUCHE LLP
Kansas City, Missouri
January 19, 2021
We have served as the auditor of one or more American Century investment companies since 1997.
23
Management |
The Board of Directors
The individuals listed below serve as directors of the funds. Each director will continue to serve in this capacity until death, retirement, resignation or removal from office. The board has adopted a mandatory retirement age for directors who are not “interested persons,” as that term is defined in the Investment Company Act (independent directors). Independent directors shall retire by December 31 of the year in which they reach their 75th birthday.
Mr. Thomas is an “interested person” because he currently serves as President and Chief Executive Officer of American Century Companies, Inc. (ACC), the parent company of American Century Investment Management, Inc. (ACIM or the advisor). The other directors (more than three-fourths of the total number) are independent. They are not employees, directors or officers of, and have no financial interest in, ACC or any of its wholly owned, direct or indirect, subsidiaries, including ACIM, American Century Investment Services, Inc. (ACIS) and American Century Services, LLC (ACS), and they do not have any other affiliations, positions or relationships that would cause them to be considered “interested persons” under the Investment Company Act. The directors serve in this capacity for seven (in the case of Jonathan S. Thomas, 16; and Stephen E. Yates, 8) registered investment companies in the American Century Investments family of funds.
The following table presents additional information about the directors. The mailing address for each director is 4500 Main Street, Kansas City, Missouri 64111.
Name (Year of Birth) | Position(s) Held with Funds | Length of Time Served | Principal Occupation(s) During Past 5 Years | Number of American Century Portfolios Overseen by Director | Other Directorships Held During Past 5 Years | ||||||||||||
Independent Directors | |||||||||||||||||
Thomas W. Bunn (1953) | Director | Since 2017 | Retired | 62 | SquareTwo Financial; Barings (formerly Babson Capital Funds Trust) (2013 to 2016) | ||||||||||||
Chris H. Cheesman (1962) | Director | Since 2019 | Retired. Senior Vice President & Chief Audit Executive, AllianceBernstein (1999 to 2018) | 62 | None | ||||||||||||
Barry Fink (1955) | Director | Since 2012 (independent since 2016) | Retired | 62 | None | ||||||||||||
Rajesh K. Gupta (1960) | Director | Since 2019 | Partner Emeritus, SeaCrest Investment Management and SeaCrest Wealth Management (2019 to Present); Chief Executive Officer and Chief Investment Officer, SeaCrest Investment Management (2006 to 2019); Chief Executive Officer and Chief Investment Officer, SeaCrest Wealth Management (2008 to 2019) | 62 | None |
24
Name (Year of Birth) | Position(s) Held with Funds | Length of Time Served | Principal Occupation(s) During Past 5 Years | Number of American Century Portfolios Overseen by Director | Other Directorships Held During Past 5 Years | ||||||||||||
Independent Directors | |||||||||||||||||
Lynn Jenkins (1963) | Director | Since 2019 | Consultant, LJ Strategies (2019 to present); United States Representative, U.S. House of Representatives (2009 to 2018) | 62 | MGP Ingredients, Inc. | ||||||||||||
Jan M. Lewis (1957) | Director | Since 2011 | Retired | 62 | None | ||||||||||||
John R. Whitten (1946) | Director | Since 2008 | Retired | 62 | Onto Innovation Inc. (2019 to 2020); Rudolph Technologies, Inc. (2006 to 2019) | ||||||||||||
Stephen E. Yates (1948) | Director and Chairman of the Board | Since 2012 (Chairman since 2018) | Retired | 87 | None | ||||||||||||
Interested Director | |||||||||||||||||
Jonathan S. Thomas (1963) | Director | Since 2007 | President and Chief Executive Officer, ACC (2007 to present). Also serves as Chief Executive Officer, ACS; Executive Vice President, ACIM; Director, ACC, ACIM and other ACC subsidiaries | 125 | None |
The Statement of Additional Information has additional information about the fund's directors and is available without charge, upon request, by calling 1-800-345-2021.
25
Officers
The following table presents certain information about the executive officers of the funds. Each officer serves as an officer for each of the 16 (in the case of Robert J. Leach, 15) investment companies in the American Century family of funds. No officer is compensated for his or her service as an officer of the funds. The listed officers are interested persons of the funds and are appointed or re-appointed on an annual basis. The mailing address for each officer listed below is 4500 Main Street, Kansas City, Missouri 64111.
Name (Year of Birth) | Offices with the Funds | Principal Occupation(s) During the Past Five Years | ||||||
Patrick Bannigan (1965) | President since 2019 | Executive Vice President and Director, ACC (2012 to present); Chief Financial Officer, Chief Accounting Officer and Treasurer, ACC (2015 to present). Also serves as President, ACS; Vice President, ACIM; Chief Financial Officer, Chief Accounting Officer and/or Director, ACIM, ACS and other ACC subsidiaries | ||||||
R. Wes Campbell (1974) | Chief Financial Officer and Treasurer since 2018 | Vice President, ACS, (2020 to present); Investment Operations and Investment Accounting, ACS (2000 to present) | ||||||
Amy D. Shelton (1964) | Chief Compliance Officer and Vice President since 2014 | Chief Compliance Officer, American Century funds, (2014 to present); Chief Compliance Officer, ACIM (2014 to present); Chief Compliance Officer, ACIS (2009 to present). Also serves as Vice President, ACIS | ||||||
Charles A. Etherington (1957) | General Counsel since 2007 and Senior Vice President since 2006 | Attorney, ACC (1994 to present); Vice President, ACC (2005 to present); General Counsel, ACC (2007 to present). Also serves as General Counsel, ACIM, ACS, ACIS and other ACC subsidiaries; and Senior Vice President, ACIM and ACS | ||||||
C. Jean Wade (1964) | Vice President since 2012 | Senior Vice President, ACS (2017 to present); Vice President, ACS (2000 to 2017) | ||||||
Robert J. Leach (1966) | Vice President since 2006 | Vice President, ACS (2000 to present) | ||||||
David H. Reinmiller (1963) | Vice President since 2000 | Attorney, ACC (1994 to present). Also serves as Vice President, ACIM and ACS | ||||||
Ward D. Stauffer (1960) | Secretary since 2005 | Attorney, ACC (2003 to present) |
26
Approval of Management Agreement |
At a meeting held on June 24, 2020, the Fund’s Board of Directors (the "Board") unanimously approved the renewal of the 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, contracts for investment advisory services are required to be reviewed, evaluated, and approved by a majority of a fund’s directors (the “Directors”), including a majority of the independent Directors, each year.
Prior to its consideration of the renewal of the management agreement, the Directors requested and reviewed extensive data and information compiled by the Advisor and certain independent providers of evaluation data concerning the Fund and the services provided to the Fund by the Advisor. This review was in addition to the oversight and evaluation undertaken by the Board and its committees on a continual basis and the information received was supplemental to the extensive information that the Board and its committees receive and consider throughout the year.
In connection with its consideration of the renewal of the management agreement, the Board’s review and evaluation of the services provided by the Advisor included, but was not limited to, the following:
•the nature, extent, and quality of investment management, shareholder services, and other services provided and to be provided to the Fund;
•the wide range of other programs and services provided and to be provided to the Fund and its shareholders on a routine and non-routine basis;
•the Fund’s investment performance, including data comparing the Fund's performance to appropriate benchmarks and/or a peer group of other mutual funds with similar investment objectives and strategies;
•the cost of owning the Fund compared to the cost of owning similar funds;
•the compliance policies, procedures, and regulatory experience of the Advisor and the Fund's service providers;
•the Advisor’s strategic plans;
•the Advisor’s business continuity plans and specifically its response to the COVID-19 pandemic;
•financial data showing the cost of services provided to the Fund, the profitability of the Fund to the Advisor, and the overall profitability of the Advisor;
•possible economies of scale associated with the Advisor’s management of the Fund and other accounts;
•services provided and charges to the Advisor's other investment management clients;
•acquired fund fees and expenses;
•payments and practices in connection with financial intermediaries holding shares of the Fund and the services provided by intermediaries in connection therewith; and
•possible collateral benefits to the Advisor from the management of the Fund.
The Board held two meetings to consider the renewal. The independent Directors also met in private session three times to review and discuss the information provided in response to their request. The independent Directors held active discussions with the Advisor regarding the renewal of the management agreement, requesting supplemental information, and reviewing information provided by the Advisor in response thereto. The independent Directors had the benefit of the advice of their independent counsel throughout the process.
Factors Considered
The Directors considered all of the information provided by the Advisor, the independent data providers, and 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
27
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. In deciding to renew the management agreement, the Board based its decision on a number of factors, including without limitation the following:
Nature, Extent and Quality of Services — Generally. Under the management agreement, the Advisor is responsible for providing or arranging for all services necessary for the operation of the Fund. The Board noted that the Advisor provides or arranges at its own expense a wide variety of services including without limitation the following:
•constructing and designing the Fund
•portfolio research and security selection
•initial capitalization/funding
•securities trading
•Fund administration
•custody of Fund assets
•daily valuation of the Fund’s portfolio
•shareholder servicing and transfer agency, including shareholder confirmations, recordkeeping, and communications
•legal services (except the independent Directors’ counsel)
•regulatory and portfolio compliance
•financial reporting
•marketing and distribution (except amounts paid by the Fund under Rule 12b-1 plans)
The Board noted that many of these services have expanded over time in terms of both quantity and complexity in response to shareholder demands, competition in the industry, changing distribution channels, and the changing regulatory environment.
Investment Management Services. The nature of the investment management services provided to the Fund is quite complex and allows Fund shareholders access to professional money management, instant diversification of their investments within an asset class, the opportunity to easily diversify among asset classes by investing in or exchanging among various American Century Investments funds, and liquidity. In evaluating investment performance, the Board expects the Advisor to manage the Fund in accordance with its investment objectives and approved strategies. Further, the Directors recognize that the Advisor has an obligation to monitor trading activities, and in particular to seek the best execution of fund trades, and to evaluate the use of and payment for research. In providing these services, the Advisor utilizes teams of investment professionals (portfolio managers, analysts, research assistants, and securities traders) who require extensive information technology, research, training, compliance, and other systems to conduct their business. The Board, directly and through its Fund Performance Review Committee, provides oversight of the investment performance process. It regularly reviews investment performance information for the Fund, together with comparative information for appropriate benchmarks and/or peer groups of similarly-managed funds, over different time horizons. The Directors also review investment performance information during the management agreement renewal process. If performance concerns are identified, the Fund receives special reviews until performance improves, during which the Board discusses with the Advisor the reasons for such results (e.g., market conditions, security selection) and any efforts being undertaken to improve performance. The Fund’s performance was below its benchmark for the one-year period reviewed by the Board.The Board discussed the Fund's performance with the Advisor, including steps being taken to address underperformance, and was satisfied with the efforts being undertaken by the Advisor. The Board found the investment management services provided by the Advisor to the Fund to be satisfactory and consistent with the management agreement.
Shareholder and Other Services. Under the management agreement, the Advisor provides the Fund with a comprehensive package of transfer agency, shareholder, and other services. The Board, directly and through its various committees, regularly reviews reports and evaluations of
28
such services at its regular meetings. These reports include, but are not limited to, information regarding the operational efficiency and accuracy of the shareholder and transfer agency services provided, staffing levels, shareholder satisfaction, technology support (including cyber security), new products and services offered to Fund shareholders, securities trading activities, portfolio valuation services, auditing services, and legal and operational compliance activities. The Board found the services provided by the Advisor to the Fund under the management agreement to be competitive and of high quality.
COVID-19 Response. During 2020, much of the world experienced unprecedented change and challenges from the impacts of the rapidly evolving, worldwide spread of the COVID-19 virus. The Board evaluated the Advisor’s response to the COVID-19 pandemic and its impact on service to the Fund. The Board found that Fund shareholders have continued to receive the Advisor’s investment management and other services without disruption, and Advisor personnel have demonstrated great resiliency in providing those services. The Board, directly and through its Audit Committee, continues to monitor the impact of the pandemic and the response of each of the Fund’s service providers.
Costs of Services and Profitability. The Advisor provides detailed information concerning its cost of providing various services to the Fund, its profitability in managing the Fund (pre- and post-distribution), its overall profitability, and its financial condition. The Directors have reviewed with the Advisor the methodology used to prepare this financial information. This information is considered in evaluating the Advisor’s financial condition, its ability to continue to provide services under the management agreement, and the reasonableness of the current management fee. The Board concluded that the Advisor’s profits were reasonable in light of the services provided to the Fund.
Ethics. The Board generally considers the Advisor’s commitment to providing quality services to shareholders and to conducting its business ethically. They noted that the Advisor’s practices generally meet or exceed industry best practices.
Economies of Scale. The Board also reviewed information provided by the Advisor regarding the possible existence of economies of scale in connection with the management of the Fund. The Board concluded that economies of scale are difficult to measure and predict with precision, especially on a fund-by-fund basis. The Board concluded that the Advisor is appropriately sharing economies of scale, to the extent they exist, through its competitive fee structure, offering competitive fees from fund inception, and through reinvestment in its business, infrastructure, investment capabilities and initiatives to provide shareholders additional content and services.
Comparison to Other Funds’ Fees. The management agreement provides that the Fund pays the Advisor a single, all-inclusive (or unified) management fee for providing all services necessary for the management and operation of the Fund, other than brokerage expenses, expenses attributable to short sales, taxes, interest, extraordinary expenses, fees and expenses of the Fund’s independent Directors (including their independent legal counsel), and expenses incurred in connection with the provision of shareholder services and distribution services under a plan adopted pursuant to Rule 12b-1 under the Investment Company Act. 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 any applicable Rule 12b-1 distribution fees, all other components of the total fees charged by these other funds may be increased without shareholder approval. The Board believes the unified fee structure is a benefit to Fund shareholders because it clearly discloses to shareholders the cost of owning Fund shares, and, since 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 comparing the
29
Fund’s unified fee to the total expense ratios of its peers. The unified fee charged to shareholders of the Fund was above the median of the total expense ratios of the Fund’s peer expense universe and was within the range of its peer expense group. The Board and the Advisor agreed to a permanent change to the Fund's fee schedule that should have the effect of lowering the Fund's annual unified management fee by approximately 0.19% to 1.10%, beginning August 1, 2020. The Board concluded that the management fee paid by the Fund to the Advisor under the management agreement is reasonable in light of the services provided to the Fund.
Comparison to Fees and Services Provided to Other Clients of the Advisor. The Board also requested and received information from the Advisor concerning the nature of the services, fees, costs, and profitability of its advisory services to advisory clients other than the Fund. They observed that these varying types of client accounts require different services and involve different regulatory and entrepreneurial risks than the management of the Fund. The Board analyzed this information and concluded that the fees charged and services provided to the Fund were reasonable by comparison.
Payments to Intermediaries. The Directors also requested and received a description of payments made to intermediaries by the Fund and the Advisor and services provided in response thereto. These payments include various payments made by the Fund or the Advisor to different types of intermediaries and recordkeepers for distribution and service activities provided for the Fund. The Directors reviewed such information and received representations from the Advisor that all such payments by the Fund were made pursuant to the Fund's Rule 12b-1 Plan and that all such payments by the Advisor were made from the Advisor’s resources and reasonable profits. The Board found such payments to be reasonable in scope and purpose.
Collateral or “Fall-Out” Benefits Derived by the Advisor. The Board considered the possible existence of collateral benefits the Advisor may receive as a result of its relationship with the Fund. They concluded that the Advisor’s primary business is managing mutual funds and it generally does not use fund or shareholder information to generate profits in other lines of business, and therefore does not derive any significant collateral benefits from them. To the extent there are potential collateral benefits, the board has been advised and has taken this into consideration in its review of the management contract with the Fund. The Board noted that additional assets from other clients may offer the Advisor some benefit from increased leverage with service providers and counterparties. Additionally, the Advisor may receive proprietary research from broker-dealers that execute fund portfolio transactions, which the Board concluded is likely to benefit other clients of the Advisor, as well as Fund shareholders. The Board also determined that the Advisor is able to provide investment management services to certain clients other than the Fund, at least in part, due to its existing infrastructure built to serve the fund complex. The Board concluded that appropriate allocation methodologies had been employed to assign resources and the cost of those resources to these other clients.
Existing Relationship. The Board also considered whether there was any reason for not continuing the existing arrangement with the Advisor. In this regard, the Board was mindful of the potential disruptions of the Fund’s operations and various risks, uncertainties, and other effects that could occur as a result of a decision not to continue such relationship. In particular, the Board recognized that most shareholders have invested in the Fund on the strength of the Advisor’s industry standing and reputation and in the expectation that the Advisor will have a continuing role in providing advisory services to the Fund.
Conclusion of the Directors. As a result of this process, the Board, including all of the independent Directors, taking into account all of the factors discussed above and the information provided by the Advisor and others in connection with its review and throughout the year, determined that the management fee is fair and reasonable in light of the services provided and that the investment management agreement between the Fund and the Advisor should be renewed.
30
Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain retirement accounts are subject to federal income tax withholding, unless you elect not to have withholding apply*. Tax will be withheld on the total amount withdrawn even though you may be receiving amounts that are not subject to withholding, such as nondeductible contributions. In such case, excess amounts of withholding could occur. You may adjust your withholding election so that a greater or lesser amount will be withheld.
If you don’t want us to withhold on this amount, you must notify us to not withhold the federal income tax. You may notify us in writing or in certain situations by telephone or through other electronic means. For systematic withdrawals, your withholding election will remain in effect until revoked or changed by filing a new election. You have the right to revoke your election at any time and change your withholding percentage for future distributions.
Remember, even if you elect not to have income tax withheld, you are liable for paying income tax on the taxable portion of your withdrawal. If you elect not to have income tax withheld or you don’t have enough income tax withheld, you may be responsible for payment of estimated tax. You may incur penalties under the estimated tax rules if your withholding and estimated tax payments are not sufficient. You can reduce or defer the income tax on a distribution by directly or indirectly rolling such distribution over to another IRA or eligible plan. You should consult your tax advisor for additional information.
State tax will be withheld if, at the time of your distribution, your address is within one of the mandatory withholding states and you have federal income tax withheld (or as otherwise required by state law). State taxes will be withheld from your distribution in accordance with the respective state rules.
*Some 403(b), 457 and qualified retirement plan distributions may be subject to 20% mandatory withholding, as they are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
A description of the policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund is available without charge, upon request, by calling 1-800-345-2021. It is also available on American Century Investments’ website at americancentury.com/proxy 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 americancentury.com/proxy. 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 as an exhibit to its reports on
Form N-PORT. The fund’s Form N-PORT reports are available on the SEC’s website at sec.gov.
The fund also makes its complete schedule of portfolio holdings for the most recent quarter of its
fiscal year available on its website at americancentury.com and, upon request, by calling
1-800-345-2021.
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Other Tax Information
The following information is provided pursuant to provisions of the Internal Revenue Code.
The fund hereby designates up to the maximum amount allowable as qualified dividend income for the fiscal year ended November 30, 2020.
For the fiscal year ended November 30, 2020, the fund intends to pass through to shareholders foreign source income of $30,790,676 and foreign taxes paid of $1,817,155, or up to the maximum amount allowable, as a foreign tax credit. Foreign source income and foreign tax expense per outstanding share on November 30, 2020 are $0.2408 and $0.0142, respectively.
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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. | ||||||||
©2021 American Century Proprietary Holdings, Inc. All rights reserved. CL-ANN-91026 2101 |
(b) None.
ITEM 2. CODE OF ETHICS.
(a) The registrant has adopted a Code of Ethics for Senior Financial Officers that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer, and persons performing similar functions.
(b) No response required.
(c) None.
(d) None.
(e) Not applicable.
(f) The registrant’s Code of Ethics for Senior Financial Officers was filed as Exhibit 12 (a)(1) to American Century Asset Allocation Portfolios, Inc.’s Annual Certified Shareholder Report on Form N-CSR, File No. 811-21591, on September 29, 2005, and is incorporated herein by reference.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
(a)(1) The registrant’s board has determined that the registrant has at least one audit committee financial expert serving on its audit committee.
(a)(2) John R. Whitten, Thomas Bunn, Chris H. Cheesman and Lynn M. Jenkins are the registrant’s designated audit committee financial experts. They are “independent” as defined in Item 3 of Form N-CSR.
(a)(3) Not applicable.
(b) No response required.
(c) No response required.
(d) No response required.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) Audit Fees.
The aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for the audit of the registrant’s annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years were as follows:
FY 2019: $298,990
FY 2020: $312,460
(b) Audit-Related Fees.
The aggregate fees billed in each of the last two fiscal years for assurance and related services by the principal accountant that are reasonably related to the performance of the audit of the registrant’s financial statements and are not reported under paragraph (a) of this Item were as follows:
For services rendered to the registrant:
FY 2019: $0
FY 2020: $0
Fees required to be approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X (relating to certain engagements for non-audit services with the registrant’s investment adviser and its affiliates):
FY 2019: $0
FY 2020: $0
(c) Tax Fees.
The aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning were as follows:
For services rendered to the registrant:
FY 2019: $0
FY 2020: $0
Fees required to be approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X (relating to certain engagements for non-audit services with the registrant’s investment adviser and its affiliates):
FY 2019: $0
FY 2020: $0
(d) All Other Fees.
The aggregate fees billed in each of the last two fiscal years for products and services provided by the principal accountant, other than the services reported in paragraphs (a) through (c) of this Item were as follows:
For services rendered to the registrant:
FY 2019: $0
FY 2020: $0
Fees required to be approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X (relating to certain engagements for non-audit services with the registrant’s investment adviser and its affiliates):
FY 2019: $0
FY 2020: $0
(e)(1) In accordance with paragraph (c)(7)(i)(A) of Rule 2-01 of Regulation S-X, before the accountant is engaged by the registrant to render audit or non-audit services, the engagement is approved by the registrant’s audit committee. Pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X, the registrant’s audit committee also pre-approves its accountant’s engagements for non-audit services with the registrant’s investment adviser, its parent company, and any entity controlled by, or under common control with the investment adviser that provides ongoing services to the registrant, if the engagement relates directly to the operations and financial reporting of the registrant.
(e)(2) All services described in each of paragraphs (b) through (d) of this Item were pre-approved before the engagement by the registrant’s audit committee pursuant to paragraph (c)(7)(i)(A) of Rule 2-01 of Regulation S-X. Consequently, none of such services were required to be approved by the audit committee pursuant to paragraph (c)(7)(i)(C).
(f) The percentage of hours expended on the principal accountant’s engagement to audit the registrant’s financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant’s full-time, permanent employees was less than 50%.
(g) The aggregate non-audit fees billed by the registrant’s accountant for services rendered to the registrant, and rendered to the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant for each of the last two fiscal years of the registrant were as follows:
FY 2019: $119,500
FY 2020: $0
(h) The registrant’s investment adviser and accountant have notified the registrant’s audit committee of all non-audit services that were rendered by the registrant’s accountant to the registrant’s investment adviser, its parent company, and any entity controlled by, or under common control with the investment adviser that provides services to the registrant, which services were not required to be pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X. The notification provided to the registrant’s audit committee included sufficient details regarding such services to allow the registrant’s audit committee to consider the continuing independence of its principal accountant.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. INVESTMENTS.
(a) The schedule of investments is included as part of the report to stockholders filed under Item 1 of this Form.
(b) Not applicable.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
During the reporting period, there were no material changes to the procedures by which shareholders may recommend nominees to the registrant’s board.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive officer and principal financial officer have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) are effective based on their evaluation of these controls and procedures as of a date within 90 days of the filing date of this report.
(b) There were no changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant's internal control over financial reporting.
ITEM 12. DISCLOSURE OF SECURITIES LENDING ACTIVITIES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 13. EXHIBITS.
(a)(1) Registrant’s Code of Ethics for Senior Financial Officers, which is the subject of the disclosure required by Item 2 of Form N-CSR, was filed as Exhibit 12(a)(1) to American Century Asset Allocation Portfolios, Inc.’s Certified Shareholder Report on Form N-CSR, File No. 811-21591, on September 29, 2005.
(a)(2) Separate certifications by the registrant’s principal executive officer and principal financial officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 and Rule 30a-2(a) under the Investment Company Act of 1940, are filed and attached hereto as EX-99.CERT.
(a)(3) Not applicable.
(a)(4) Not applicable.
(b) A certification by the registrant’s chief executive officer and chief financial officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, is furnished and attached hereto as EX-99.906CERT.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Registrant: | American Century World Mutual Funds, Inc. | |||||||||||||
By: | /s/ Patrick Bannigan | |||||||||||||
Name: | Patrick Bannigan | |||||||||||||
Title: | President | |||||||||||||
Date: | January 27, 2021 |
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/ Patrick Bannigan | ||||||||||
Name: | Patrick Bannigan | ||||||||||
Title: | President | ||||||||||
(principal executive officer) | |||||||||||
Date: | January 27, 2021 |
By: | /s/ R. Wes Campbell | ||||||||||
Name: | R. Wes Campbell | ||||||||||
Title: | Treasurer and | ||||||||||
Chief Financial Officer | |||||||||||
(principal financial officer) | |||||||||||
Date: | January 27, 2021 |