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 | 811-07820 | |||||
AMERICAN CENTURY CAPITAL PORTFOLIOS, 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: | 10-31 | |||||
Date of reporting period: | 04-30-2017 |
ITEM 1. REPORTS TO STOCKHOLDERS.
SEMIANNUAL REPORT | |
APRIL 30, 2017 | |
AC Alternatives® Income Fund
Table of Contents |
Any opinions expressed in this report reflect those of the author as of the date of the report, and do not necessarily represent the opinions of American Century Investments® or any other person in the American Century Investments organization. Any such opinions are subject to change at any time based upon market or other conditions and American Century Investments disclaims any responsibility to update such opinions. These opinions may not be relied upon as investment advice and, because investment decisions made by American Century Investments funds are based on numerous factors, may not be relied upon as an indication of trading intent on behalf of any American Century Investments fund. Security examples are used for representational purposes only and are not intended as recommendations to purchase or sell securities. Performance information for comparative indices and securities is provided to American Century Investments by third party vendors. To the best of American Century Investments’ knowledge, such information is accurate at the time of printing.
President’s Letter |
Jonathan Thomas
Dear Investor:
Thank you for reviewing this semiannual report for the period ended April 30, 2017. It provides a market overview (below), followed by a schedule of fund investments and other financial information. For additional commentary and information on fund performance, plus other investment insights, we encourage you to visit our website, americancentury.com.
“Trump Trade” Triggered Surges in U.S. Stock Prices and Treasury Yields
Especially in the U.S., the signature events of the six-month period were Donald Trump’s victory in the U.S. presidential election in November and the resulting “Trump Trade.” President Trump’s aggressive pro-growth fiscal policy agenda triggered risk-on rallies in higher-risk assets such as stocks and high-yield corporate bonds that produced double-digit gains for many broad U.S. and global/non-U.S. equity indices. For example, the S&P 500 Index and the MSCI EAFE Index gained 13.32% and 11.47%, respectively. In the U.S., growth and small-cap equity indices generally outperformed their value and large-cap counterparts.
The Trump Trade and improving global economic conditions also drove government bond yields higher, and boosted the value of the U.S. dollar against other currencies. This caused most bond indices to decline during the period, except those representing emerging market and corporate debt, which benefited from investors’ continuing search for more yield than what’s available in government bonds. Also, higher-yielding and corporate bonds are perceived as less price change-sensitive to rising interest rates.
Yields rose for short- and long-maturity U.S. Treasuries as the Federal Reserve raised its interest rate target twice during the reporting period, and suggested that it might raise rates again and start gradually reducing its balance sheet by the end of 2017. These factors, plus rising inflation, could trigger more bouts of U.S. bond market volatility. Meanwhile, the Trump Trade could prove to be double-edged—its momentum faded as health care and tax reform enactment faced delays. This, along with ongoing questions about the Trump administration’s practices, policies, and alliances, could impede further risk-on sentiment. In this unsettled environment, we believe in remaining focused on investment goals, using disciplined, actively managed, risk-aware strategies. We appreciate your continued trust in us.
Sincerely,
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
2
Fund Characteristics |
APRIL 30, 2017 | |
Types of Investments in Portfolio | % of net assets |
Asset-Backed Securities | 15.0% |
Common Stocks | 14.4% |
Bank Loan Obligations | 10.7% |
Collateralized Loan Obligations | 10.2% |
Corporate Bonds | 10.2% |
Exchange-Traded Funds | 6.9% |
Commercial Mortgage-Backed Securities | 6.5% |
Exchange-Traded Notes | 5.0% |
Collateralized Mortgage Obligations | 3.6% |
U.S. Treasury Securities | 2.5% |
Purchased Options Contracts | —* |
Corporate Bonds Sold Short | (0.1)% |
Temporary Cash Investments | 14.4% |
Other Assets and Liabilities | 0.7% |
*Category is less than 0.05% of total net assets.
3
Shareholder Fee Example |
Fund shareholders may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption/exchange fees; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in your fund and to compare these costs with the ongoing cost of investing in other mutual funds.
The example is based on an investment of $1,000 made at the beginning of the period and held for the entire period from November 1, 2016 to April 30, 2017 (except as noted).
Actual Expenses
The table provides information about actual account values and actual expenses for each class. You may use the information, together with the amount you invested, to estimate the expenses that you paid over the period. First, identify the share class you own. Then simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
If you hold Investor Class shares of any American Century Investments fund, or I Class shares of the American Century Diversified Bond Fund, in an American Century Investments account (i.e., not a financial intermediary or retirement plan account), American Century Investments may charge you a $12.50 semiannual account maintenance fee if the value of those shares is less than $10,000. We will redeem shares automatically in one of your accounts to pay the $12.50 fee. In determining your total eligible investment amount, we will include your investments in all personal accounts (including American Century Investments Brokerage accounts) registered under your Social Security number. Personal accounts include individual accounts, joint accounts, UGMA/UTMA accounts, personal trusts, Coverdell Education Savings Accounts and IRAs (including traditional, Roth, Rollover, SEP-, SARSEP- and SIMPLE-IRAs), and certain other retirement accounts. If you have only business, business retirement, employer-sponsored or American Century Investments Brokerage accounts, you are currently not subject to this fee. If you are subject to the Account Maintenance Fee, your account value could be reduced by the fee amount.
Hypothetical Example for Comparison Purposes
The table also provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio of each class of your fund and an assumed rate of return of 5% per year before expenses, which is not the actual return of a fund’s share class. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) or redemption/exchange fees. Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
4
Beginning Account Value 11/1/16 | Ending Account Value 4/30/17 | Expenses Paid During Period(1) 11/1/16 - 4/30/17 | Annualized Expense Ratio(1) | |
Actual | ||||
Investor Class (after waiver) | $1,000 | $1,034.60 | $9.74 | 1.93% |
Investor Class (before waiver) | $1,000 | $1,034.60(2) | $10.14 | 2.01% |
I Class (after waiver) | $1,000 | $1,035.60 | $8.73 | 1.73% |
I Class (before waiver) | $1,000 | $1,035.60(2) | $9.14 | 1.81% |
Y Class (after waiver) | $1,000 | $1,004.10(3) | $0.91(4) | 1.58% |
Y Class (before waiver) | $1,000 | $1,004.10(2)(3) | $0.96(4) | 1.66% |
A Class (after waiver) | $1,000 | $1,033.30 | $10.99 | 2.18% |
A Class (before waiver) | $1,000 | $1,033.30(2) | $11.39 | 2.26% |
C Class (after waiver) | $1,000 | $1,029.60 | $14.74 | 2.93% |
C Class (before waiver) | $1,000 | $1,029.60(2) | $15.15 | 3.01% |
R Class (after waiver) | $1,000 | $1,032.10 | $12.24 | 2.43% |
R Class (before waiver) | $1,000 | $1,032.10(2) | $12.65 | 2.51% |
R6 Class (after waiver) | $1,000 | $1,036.40 | $7.98 | 1.58% |
R6 Class (before waiver) | $1,000 | $1,036.40(2) | $8.38 | 1.66% |
Hypothetical | ||||
Investor Class (after waiver) | $1,000 | $1,015.22 | $9.64 | 1.93% |
Investor Class (before waiver) | $1,000 | $1,014.83 | $10.04 | 2.01% |
I Class (after waiver) | $1,000 | $1,016.22 | $8.65 | 1.73% |
I Class (before waiver) | $1,000 | $1,015.82 | $9.05 | 1.81% |
Y Class (after waiver) | $1,000 | $1,016.96(5) | $7.90(5) | 1.58% |
Y Class (before waiver) | $1,000 | $1,016.56(5) | $8.30(5) | 1.66% |
A Class (after waiver) | $1,000 | $1,013.98 | $10.89 | 2.18% |
A Class (before waiver) | $1,000 | $1,013.59 | $11.28 | 2.26% |
C Class (after waiver) | $1,000 | $1,010.27 | $14.60 | 2.93% |
C Class (before waiver) | $1,000 | $1,009.87 | $15.00 | 3.01% |
R Class (after waiver) | $1,000 | $1,012.74 | $12.13 | 2.43% |
R Class (before waiver) | $1,000 | $1,012.35 | $12.52 | 2.51% |
R6 Class (after waiver) | $1,000 | $1,016.96 | $7.90 | 1.58% |
R6 Class (before waiver) | $1,000 | $1,016.56 | $8.30 | 1.66% |
(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 181, the number of days in the most recent fiscal half-year, divided by 365, to reflect the one-half year period. |
(2) | Ending account value assumes the return earned after waiver and would have been lower if a portion of the fees had not been waived. |
(3) | Ending account value based on actual return from April 10, 2017 (commencement of sale) through April 30, 2017. |
(4) | 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 21, the number of days in the period from April 10, 2017 (commencement of sale) through April 30, 2017, divided by 365, to reflect the period. Had the class been available for the full period, the expenses paid during the period would have been higher. |
(5) | Ending account value and expenses paid during the period assumes the class had been available throughout the entire period and are calculated using the class’s annualized expense ratio listed in the table above. |
5
Schedule of Investments |
APRIL 30, 2017 (UNAUDITED)
Principal Amount/ Shares | Value | ||||||
ASSET-BACKED SECURITIES(1) — 15.0% | |||||||
AmeriCredit Acceptance Receivables Trust, Series 2017-1, Class D, 3.54%, 3/13/23(2) | $ | 500,000 | $ | 499,842 | |||
AmeriCredit Automobile Receivables Trust, Series 2013-4, Class D, 3.31%, 10/8/19 | 365,000 | 369,419 | |||||
AmeriCredit Automobile Receivables Trust, Series 2015-4, Class D, 3.72%, 12/8/21 | 80,000 | 81,902 | |||||
AmeriCredit Automobile Receivables Trust, Series 2016-3, Class D, 2.71%, 9/8/22 | 1,350,000 | 1,337,479 | |||||
Bear Stearns Asset Backed Securities Trust, Series 2007-2, Class A2, VRN, 1.31%, 5/25/17 | 216,237 | 212,930 | |||||
CAL Funding II Ltd., Series 2012-1A, Class A SEQ, 3.47%, 10/25/27(2) | 970,750 | 969,243 | |||||
CAL Funding II Ltd., Series 2013-1A, Class A SEQ, 3.35%, 3/27/28(2) | 272,167 | 266,487 | |||||
CarMax Auto Owner Trust, Series 2015-4, Class D, 3.00%, 5/16/22 | 300,000 | 300,828 | |||||
CarMax Auto Owner Trust, Series 2017-1, Class D, 3.43%, 7/17/23 | 750,000 | 754,284 | |||||
CLI Funding V LLC, Series 2013-2A, Class NOTE SEQ, 3.22%, 6/18/28(2) | 328,227 | 317,910 | |||||
CLI Funding V LLC, Series 2014-1A, Class A SEQ, 3.29%, 6/18/29(2) | 1,010,144 | 990,603 | |||||
CLI Funding V LLC, Series 2014-2A, Class A SEQ, 3.38%, 10/18/29(2) | 446,727 | 440,082 | |||||
CPS Auto Receivables Trust, Series 2013-A, Class E, 6.41%, 6/15/20(2) | 53,813 | 54,192 | |||||
CPS Auto Receivables Trust, Series 2014-C, Class D, 4.83%, 8/17/20(2) | 250,000 | 252,462 | |||||
CPS Auto Receivables Trust, Series 2015-C, Class C SEQ, 3.42%, 8/16/21(2) | 370,000 | 374,267 | |||||
CPS Auto Receivables Trust, Series 2015-C, Class D SEQ, 4.63%, 8/16/21(2) | 207,000 | 211,562 | |||||
CPS Auto Receivables Trust, Series 2016-A, Class E, 7.65%, 12/15/21(2) | 250,000 | 265,142 | |||||
CPS Auto Trust, Series 2016-D, Class D SEQ, 4.53%, 1/17/23(2) | 750,000 | 763,853 | |||||
CPS Auto Trust, Series 2017-A, Class D, 4.61%, 12/15/22(2) | 500,000 | 516,791 | |||||
Dell Equipment Finance Trust, Series 2015-1, Class D, 2.84%, 9/22/20(2) | 600,000 | 600,878 | |||||
Drive Auto Receivables Trust, Series 2015-AA, Class D, 4.12%, 7/15/22(2) | 550,000 | 559,551 | |||||
Drive Auto Receivables Trust, Series 2015-CA, Class D, 4.20%, 9/15/21(2) | 300,000 | 305,601 | |||||
DT Auto Owner Trust, Series 2015-2A, Class D, 4.25%, 2/15/22(2) | 380,000 | 388,714 | |||||
DT Auto Owner Trust, Series 2016-2A, Class C, 3.67%, 1/18/22(2) | 295,000 | 299,087 | |||||
DT Auto Owner Trust, Series 2016-3A, Class D, 4.52%, 6/15/23(2) | 400,000 | 408,369 | |||||
DT Auto Owner Trust, Series 2017-1A, Class D, 3.55%, 11/15/22(2) | 1,000,000 | 1,000,962 |
6
Principal Amount/ Shares | Value | ||||||
Exeter Automobile Receivables Trust, Series 2015-1A, Class C, 4.10%, 12/15/20(2) | $ | 1,210,000 | $ | 1,238,040 | |||
Exeter Automobile Receivables Trust, Series 2015-2A, Class A SEQ, 1.54%, 11/15/19(2) | 54,658 | 54,633 | |||||
Exeter Automobile Receivables Trust, Series 2015-2A, Class D, 5.79%, 5/16/22(2) | 275,000 | 276,349 | |||||
Exeter Automobile Receivables Trust, Series 2015-3A, Class C, 4.83%, 8/16/21(2) | 800,000 | 828,248 | |||||
Flagship Credit Auto Trust, Series 2014-2, Class B, 2.84%, 11/16/20(2) | 357,000 | 359,532 | |||||
Flagship Credit Auto Trust, Series 2014-2, Class C, 3.95%, 12/15/20(2) | 132,000 | 133,684 | |||||
Flagship Credit Auto Trust, Series 2015-1, Class C, 3.76%, 6/15/21(2) | 250,000 | 252,215 | |||||
Flagship Credit Auto Trust, Series 2015-2, Class C, 4.08%, 12/15/21(2) | 800,000 | 812,032 | |||||
Flagship Credit Auto Trust, Series 2016-2, Class C, 6.22%, 9/15/22(2) | 640,000 | 690,703 | |||||
Global SC Finance II SRL, Series 2013-1A, Class A SEQ, 2.98%, 4/17/28(2) | 210,000 | 205,212 | |||||
Global SC Finance II SRL, Series 2013-2A, Class A SEQ, 3.67%, 11/17/28(2) | 649,667 | 645,183 | |||||
Global SC Finance II SRL, Series 2014-1A, Class A1, 3.19%, 7/17/29(2) | 1,008,475 | 986,808 | |||||
Global SC Finance II SRL, Series 2014-1A, Class A2, 3.09%, 7/17/29(2) | 1,012,750 | 987,634 | |||||
Global SC Finance IV Ltd., Series 2017-1A, Class A SEQ, 3.85%, 4/15/37(2) | 1,000,000 | 996,250 | |||||
HERO Funding Trust, Series 2016-4A, Class A2 SEQ, 4.29%, 9/20/47(2) | 844,141 | 876,851 | |||||
Kabbage Asset Securitization LLC, Series 2017-1, Class A SEQ, 4.57%, 3/15/22(2) | 1,500,000 | 1,529,451 | |||||
Marlette Funding Trust, Series 2017-1A, Class A SEQ, 2.83%, 3/15/24(2) | 1,500,000 | 1,502,770 | |||||
OneMain Financial Issuance Trust, Series 2015-2A, Class A SEQ, 2.57%, 7/18/25(2) | 450,000 | 451,339 | |||||
OneMain Financial Issuance Trust, Series 2016-2A, Class A SEQ, 4.10%, 3/20/28(2) | 685,000 | 702,208 | |||||
OneMain Financial Issuance Trust, Series 2016-2A, Class B, 5.94%, 3/20/28(2) | 1,000,000 | 1,049,519 | |||||
OneMain Financial Issuance Trust, Series 2016-3A, Class A SEQ, 3.83%, 6/18/31(2) | 475,000 | 488,840 | |||||
Progreso Receivables Funding IV LLC, Series 2015-B, Class A, 3.00%, 7/28/20(2) | 450,000 | 450,270 | |||||
Santander Drive Auto Receivables Trust, Series 2016-1, Class D, 4.02%, 4/15/22 | 500,000 | 516,360 | |||||
Sierra Timeshare Receivables Funding LLC, Series 2013-1A, Class B, 2.39%, 11/20/29(2) | 281,688 | 281,766 | |||||
Sierra Timeshare Receivables Funding LLC, Series 2014-2A, Class B, 2.40%, 6/20/31(2) | 110,683 | 110,612 | |||||
Springleaf Funding Trust, Series 2015-AA, Class A SEQ, 3.16%, 11/15/24(2) | 600,000 | 606,870 | |||||
Springleaf Funding Trust, Series 2015-AA, Class B, 3.62%, 11/15/24(2) | 130,000 | 130,280 | |||||
TAL Advantage V LLC, Series 2014-1A, Class A, 3.51%, 2/22/39(2) | 536,417 | 529,617 |
7
Principal Amount/ Shares | Value | ||||||
TAL Advantage V LLC, Series 2014-3A, Class A SEQ, 3.27%, 11/21/39(2) | $ | 227,500 | $ | 223,709 | |||
Vertical Bridge CC LLC, Series 2016-2A, Class A SEQ, 5.19%, 10/15/46(2) | 497,187 | 491,245 | |||||
VOLT LVII LLC, Series 2017-NPL4, Class A1, 3.34%, 4/25/47(2)(3) | 1,000,000 | 1,000,000 | |||||
VOLT XLIV LLC, Series 2016-NPL4, Class A1 SEQ, VRN, 4.25%, 5/25/17(2) | 1,110,706 | 1,123,988 | |||||
TOTAL ASSET-BACKED SECURITIES (Cost $32,854,380) | 33,074,658 | ||||||
COMMON STOCKS — 14.4% | |||||||
Air Freight and Logistics — 0.5% | |||||||
CH Robinson Worldwide, Inc.(4) | 14,509 | 1,054,804 | |||||
Automobiles — 0.6% | |||||||
General Motors Co. | 39,363 | 1,363,534 | |||||
Beverages — 0.7% | |||||||
PepsiCo, Inc. | 13,157 | 1,490,425 | |||||
Biotechnology — 1.1% | |||||||
AbbVie, Inc. | 22,624 | 1,491,827 | |||||
Amgen, Inc.(4) | 2,717 | 443,740 | |||||
Gilead Sciences, Inc. | 6,928 | 474,914 | |||||
2,410,481 | |||||||
Commercial Services and Supplies — 0.6% | |||||||
KAR Auction Services, Inc. | 30,988 | 1,351,697 | |||||
Communications Equipment — 0.7% | |||||||
Cisco Systems, Inc. | 44,321 | 1,510,017 | |||||
Containers and Packaging — 0.8% | |||||||
Packaging Corp. of America | 4,864 | 480,466 | |||||
Sonoco Products Co. | 25,708 | 1,344,785 | |||||
1,825,251 | |||||||
Distributors — 0.2% | |||||||
Genuine Parts Co. | 4,745 | 436,635 | |||||
Electrical Equipment — 0.6% | |||||||
Hubbell, Inc. | 11,376 | 1,286,967 | |||||
Food and Staples Retailing — 0.7% | |||||||
Sysco Corp. | 26,930 | 1,423,789 | |||||
Food Products — 0.3% | |||||||
Bunge Ltd. | 6,833 | 540,012 | |||||
Health Care Equipment and Supplies — 0.6% | |||||||
Abbott Laboratories(4) | 32,553 | 1,420,613 | |||||
Health Care Providers and Services — 0.3% | |||||||
Cardinal Health, Inc.(4) | 7,652 | 555,459 | |||||
Hotels, Restaurants and Leisure — 0.2% | |||||||
Carnival Corp. | 8,411 | 519,547 | |||||
Household Durables — 0.2% | |||||||
Whirlpool Corp. | 2,681 | 497,808 | |||||
Leisure Products — 0.2% | |||||||
Polaris Industries, Inc. | 5,481 | 467,310 |
8
Principal Amount/ Shares | Value | ||||||
Machinery — 0.9% | |||||||
Cummins, Inc. | 3,191 | $ | 481,650 | ||||
PACCAR, Inc.(4) | 20,725 | 1,382,979 | |||||
1,864,629 | |||||||
Metals and Mining — 0.7% | |||||||
Nucor Corp.(4) | 24,545 | 1,505,345 | |||||
Multiline Retail — 0.2% | |||||||
Target Corp. | 9,502 | 530,687 | |||||
Oil, Gas and Consumable Fuels — 0.2% | |||||||
Marathon Petroleum Corp.(4) | 9,811 | 499,772 | |||||
Pharmaceuticals — 0.9% | |||||||
Bristol-Myers Squibb Co. | 8,921 | 500,022 | |||||
Johnson & Johnson | 12,326 | 1,521,891 | |||||
2,021,913 | |||||||
Road and Rail — 0.2% | |||||||
Union Pacific Corp. | 4,366 | 488,817 | |||||
Semiconductors and Semiconductor Equipment — 1.3% | |||||||
Intel Corp. | 37,726 | 1,363,795 | |||||
KLA-Tencor Corp. | 15,980 | 1,569,556 | |||||
2,933,351 | |||||||
Software — 0.6% | |||||||
Microsoft Corp. | 19,397 | 1,327,919 | |||||
Specialty Retail — 0.6% | |||||||
American Eagle Outfitters, Inc. | 30,963 | 436,269 | |||||
Penske Automotive Group, Inc. | 8,814 | 420,516 | |||||
Williams-Sonoma, Inc. | 10,024 | 541,797 | |||||
1,398,582 | |||||||
Textiles, Apparel and Luxury Goods — 0.5% | |||||||
Coach, Inc. | 12,505 | 492,572 | |||||
VF Corp. | 9,467 | 517,182 | |||||
1,009,754 | |||||||
Transportation Infrastructure† | |||||||
CHC Group LLC (Ordinary Membership Interest)(5) | 1,954 | 24,425 | |||||
TOTAL COMMON STOCKS (Cost $30,523,272) | 31,759,543 | ||||||
BANK LOAN OBLIGATIONS(6) — 10.7% | |||||||
Aerospace and Defense — 0.7% | |||||||
DAE Aviation Holdings, Inc., 1st Lien Term Loan, 5.25%, 7/7/22 | $ | 464,060 | 465,916 | ||||
Jazz Acquisition, Inc., 1st Lien Term Loan, 4.65%, 6/19/21 | 52,550 | 51,252 | |||||
Sequa Corporation, 1st Lien Term Loan, 11/26/21(7) | 271,003 | 274,221 | |||||
Sequa Corporation, 2nd Lien Term Loan, 4/13/22(7) | 89,620 | 91,300 | |||||
TransDigm, Inc., 2016 Extended Term Loan F, 3.99%, 6/9/23 | 249,372 | 249,372 | |||||
TransDigm, Inc., Term Loan D, 4.14%, 6/4/21 | 398,209 | 399,454 | |||||
1,531,515 | |||||||
Airlines — 0.1% | |||||||
American Airlines, Inc., 2016 USD Term Loan B, 3.49%, 12/14/23 | 250,000 | 250,645 |
9
Principal Amount/ Shares | Value | ||||||
Building Products — 0.1% | |||||||
Allied Universal Holdco LLC, 2015 Term Loan, 4.79%, 7/28/22 | $ | 35,314 | $ | 35,535 | |||
Jeld-Wen Inc., 2017 Term Loan B, 4.15%, 7/1/22 | 262,898 | 266,102 | |||||
301,637 | |||||||
Chemicals — 0.1% | |||||||
Ascend Performance Materials Operations LLC, Term Loan B, 6.65%, 8/12/22 | 219,016 | 221,480 | |||||
Commercial Services and Supplies — 0.4% | |||||||
Advanced Disposal Services Inc., Term Loan B3, 3.70%, 11/10/23 | 507,355 | 512,200 | |||||
Prime Security Services Borrower, LLC, 2016 1st Lien Term Loan, 4.25%, 5/2/22 | 66,974 | 67,764 | |||||
Sedgwick Claims Management Services, Inc., 1st Lien Term Loan, 3/1/21(7) | 249,357 | 249,794 | |||||
Sterling Infosystems, Inc., 1st Lien Term Loan B, 5.40%, 6/20/22 | 103,453 | 104,358 | |||||
USAGM HoldCo LLC, 2016 Incremental Delayed Draw Term Loan, 5.49%, 7/28/22 | 4,290 | 4,317 | |||||
938,433 | |||||||
Communications Equipment — 0.2% | |||||||
Polycom, Inc., 1st Lien Term Loan, 6.25%, 9/27/23 | 337,644 | 341,970 | |||||
Radiate Holdco, LLC, 1st Lien Term Loan, 3.99%, 2/1/24 | 71,113 | 71,465 | |||||
413,435 | |||||||
Construction and Engineering — 0.1% | |||||||
SRS Distribution Inc., 2015 Term Loan B, 5.25%, 8/25/22 | 84,622 | 85,856 | |||||
Construction Materials — 0.2% | |||||||
Caelus Energy Alaska O3, LLC, 2nd Lien Term Loan, 8.75%, 4/15/20 | 176,969 | 157,650 | |||||
CPG International Inc., New Term Loan, 4.90%, 9/30/20 | 244,772 | 246,379 | |||||
404,029 | |||||||
Consumer Discretionary — 0.6% | |||||||
National Vision, Inc., 1st Lien Term Loan, 4.00%, 3/12/21 | 595,165 | 596,281 | |||||
NPC International, Inc., 1st Lien Term Loan, 3/17/24(7) | 104,832 | 105,913 | |||||
William Morris Endeavor Entertainment, LLC, 1st Lien Term Loan, 4.25%, 5/6/21 | 612,403 | 617,378 | |||||
1,319,572 | |||||||
Consumer Staples† | |||||||
Sabre GLBL Inc., Term Loan B, 3.74%, 2/22/24 | 24,201 | 24,481 | |||||
Containers and Packaging — 0.3% | |||||||
Berry Plastics Group, Inc., Term Loan J, 3.52%, 1/19/24 | 58,018 | 58,426 | |||||
BWAY Holding Company, 2017 Term Loan B, 4.23%, 4/3/24 | 500,000 | 497,632 | |||||
Flex Acquisition Company, Inc., 1st Lien Term Loan, 4.40%, 12/29/23 | 87,413 | 87,932 | |||||
643,990 | |||||||
Distributors — 0.1% | |||||||
Spin Holdco Inc., New Term Loan B, 4.27%, 11/14/19 | 111,927 | 112,219 | |||||
Diversified Financial Services — 0.3% | |||||||
Ascensus, Inc., 2017 Term Loan, 5.02%, 12/3/22 | 124,451 | 125,618 | |||||
Hub International Limited, Term Loan B, 4.03%, 10/2/20 | 312,500 | 314,590 |
10
Principal Amount/ Shares | Value | ||||||
Opal Acquisition, Inc., Term Loan B, 5.15%, 11/27/20 | $ | 93,687 | $ | 88,534 | |||
UFC Holdings, LLC, 1st Lien Term Loan, 4.25%, 8/18/23 | 134,792 | 135,792 | |||||
664,534 | |||||||
Diversified Telecommunication Services — 0.2% | |||||||
Hargray Communications Group, Inc., 2017 Term Loan B, 3/22/24(7) | 90,236 | 90,552 | |||||
Inmar Holdings, Inc., 2017 1st Lien Term Loan B, 4/21/24(7) | 92,953 | 92,547 | |||||
Intelsat Jackson Holdings S.A., Term Loan B2, 3.89%, 6/30/19 | 117,301 | 116,028 | |||||
Telesat Canada, Term Loan B4, 4.15%, 11/17/23 | 79,064 | 79,834 | |||||
378,961 | |||||||
Electronic Equipment, Instruments and Components — 0.2% | |||||||
Excelitas Technologies Corp., 1st Lien Term Loan, 6.15%, 10/31/20 | 500,831 | 501,039 | |||||
Energy — 0.1% | |||||||
Granite Acquisition Inc., Term Loan B, 5.15%, 12/19/21 | 285,912 | 288,950 | |||||
Granite Acquisition Inc., Term Loan C, 5.15%, 12/19/21 | 12,870 | 13,006 | |||||
301,956 | |||||||
Energy Equipment and Services — 0.2% | |||||||
Murray Energy Corporation, Term Loan B2, 8.40%, 4/16/20 | 518,312 | 497,867 | |||||
Equity Real Estate Investment Trusts (REITs)† | |||||||
Communications Sales & Leasing, Inc., 2017 Term Loan B, 4.00%, 10/24/22 | 48,738 | 48,685 | |||||
Health Care Providers and Services — 1.1% | |||||||
BioClinica, Inc., 1st Lien Term Loan, 5.375%, 10/20/23 | 55,016 | 55,498 | |||||
Change Healthcare Holdings, Inc., 2017 Term Loan B, 3.75%, 3/1/24 | 274,570 | 275,738 | |||||
Endo Luxembourg Finance Company I S.a r.l., 2017 Term Loan B, 4/5/24(7) | 313,087 | 315,983 | |||||
HCA Inc., Term Loan B8, 3.24%, 2/15/24 | 7,820 | 7,904 | |||||
inVentiv Health, Inc., 2016 Term Loan B, 4.80%, 11/9/23 | 623,207 | 627,579 | |||||
Jaguar Holding Company II, 2015 Term Loan B, 4.33%, 8/18/22 | 427,582 | 430,406 | |||||
National Mentor Holdings, Inc., Term Loan B, 4.40%, 1/31/21 | 249,357 | 251,462 | |||||
nThrive, Inc., 2016 1st Lien Term Loan, 5.66%, 10/22/22 | 152,269 | 153,982 | |||||
Team Health Holdings, Inc., 1st Lien Term Loan, 3.75%, 2/6/24 | 95,244 | 94,574 | |||||
Tecomet Inc., 2017 Term Loan B, 4/13/24(7) | 93,658 | 94,360 | |||||
2,307,486 | |||||||
Health Care Technology† | |||||||
Press Ganey Holdings, Inc., 1st Lien Term Loan, 4.25%, 10/21/23 | 62,344 | 62,480 | |||||
Hotels, Restaurants and Leisure — 0.2% | |||||||
1011778 B.C. Unlimited Liability Company, Term Loan B3, 3.31%, 2/16/24 | 87,318 | 87,471 | |||||
CityCenter Holdings, LLC, 2017 Term Loan B, 3.49%, 4/18/24 | 147,823 | 148,230 | |||||
Hilton Worldwide Finance, LLC, Term Loan B2, 2.99%, 10/25/23 | 102,746 | 103,709 | |||||
Scientific Games International, Inc., 2017 Term Loan B3, 4.99%, 10/1/21 | 44,919 | 45,646 |
11
Principal Amount/ Shares | Value | ||||||
Yum! Brands Inc., 1st Lien Term Loan B, 2.99%, 6/16/23 | $ | 66,120 | $ | 66,595 | |||
451,651 | |||||||
Household Durables — 0.1% | |||||||
Wilsonart LLC, 2016 Term Loan, 4.65%, 12/19/23 | 249,375 | 251,452 | |||||
Industrial Conglomerates — 0.2% | |||||||
American Builders & Contractors Supply Co., Inc., Term Loan B, 3.74%, 10/31/23 | 161,818 | 163,020 | |||||
Avolon TLB Borrower 1 (Luxembourg) S.a.r.l., Term Loan B2, 3.74%, 3/20/22 | 123,750 | 125,739 | |||||
Polyconcept Investments B.V., USD 2016 Term Loan B, 6.25%, 8/10/23 | 149,250 | 150,183 | |||||
438,942 | |||||||
Insurance — 0.4% | |||||||
Alliant Holdings I, Inc., 2015 Term Loan B, 4.42%, 8/12/22 | 565,606 | 567,987 | |||||
Flying Fortress Inc., New Term Loan, 3.40%, 4/30/20 | 250,000 | 252,566 | |||||
820,553 | |||||||
Internet Software and Services — 0.6% | |||||||
Ancestry.com Operations Inc., 2017 1st Lien Term Loan, 4.25%, 10/19/23 | 564,453 | 570,273 | |||||
MH Sub I, LLC, 1st Lien Term Loan, 4.75%, 7/8/21 | 242,464 | 245,041 | |||||
Rackspace Hosting, Inc., 1st Lien Term Loan, 4.53%, 11/3/23 | 472,865 | 476,818 | |||||
1,292,132 | |||||||
IT Services — 0.5% | |||||||
Alion Science and Technology Corporation, 2015 Term Loan B, 5.50%, 8/19/21 | 48,831 | 48,964 | |||||
CDW LLC, 2016 Term Loan B, 3.15%, 8/17/23 | 87,280 | 87,959 | |||||
First Data Corporation, 2017 Term Loan, 3.99%, 4/26/24 | 349,873 | 350,441 | |||||
Netsmart Technologies, Inc., 2016 Term Loan C1, 5.65%, 4/19/23 | 305,070 | 307,739 | |||||
Travelport Finance (Luxembourg) S.a.r.l., 2017 Term Loan B, 4.29%, 9/2/21 | 234,321 | 236,434 | |||||
WEX Inc., Term Loan B, 4.49%, 7/1/23 | 95,631 | 96,834 | |||||
1,128,371 | |||||||
Machinery — 0.2% | |||||||
Husky Injection Molding Systems Ltd., 1st Lien Term Loan, 4.25%, 6/30/21 | 379,124 | 381,774 | |||||
Rexnord LLC, 2016 Term Loan B, 3.89%, 8/21/23 | 66,816 | 67,132 | |||||
448,906 | |||||||
Media — 1.1% | |||||||
Advantage Sales & Marketing, Inc., 2014 1st Lien Term Loan, 4.25%, 7/23/21 | 248,724 | 243,439 | |||||
CDS U.S. Intermediate Holdings, Inc., 1st Lien Term Loan, 5.15%, 7/8/22 | 209,672 | 211,813 | |||||
Checkout Holding Corp., 1st Lien Term Loan, 4.50%, 4/9/21 | 401,039 | 368,956 | |||||
Checkout Holding Corp., 2nd Lien Term Loan, 7.75%, 4/11/22 | 50,000 | 38,125 | |||||
Colorado Buyer Inc, 2nd Lien Term Loan, 3/28/25(7) | 134,409 | 135,305 | |||||
Colorado Buyer Inc, Term Loan B, 3/28/24(7) | 96,278 | 96,964 | |||||
CSC Holdings, LLC, 2017 1st Lien Term Loan, 3.24%, 7/15/25 | 196,561 | 196,790 |
12
Principal Amount/ Shares | Value | ||||||
GTT Communications, Inc., 2017 Term Loan B, 5.00%, 1/9/24 | $ | 26,855 | $ | 27,207 | |||
Learfield Communications, Inc., 2016 1st Lien Term Loan, 4.25%, 12/1/23 | 114,573 | 115,647 | |||||
Live Nation Entertainment, Inc., Term Loan B2, 3.50%, 10/31/23 | 13,425 | 13,565 | |||||
National CineMedia, LLC, Refi Term Loan, 3.75%, 11/26/19 | 250,000 | 252,500 | |||||
Regal Cinemas Corporation, Reprice Term Loan, 3.49%, 4/1/22 | 249,375 | 252,357 | |||||
Virgin Media Bristol LLC, USD Term Loan I, 3.74%, 1/31/25 | 125,000 | 125,632 | |||||
Ziggo Secured Finance BV, EUR Term Loan F, 3.00%, 4/15/25 | EUR | 370,632 | 404,676 | ||||
2,482,976 | |||||||
Metals and Mining — 0.2% | |||||||
TurboCombustor Technology, Inc, New Term Loan B, 5.65%, 12/2/20 | $ | 125,718 | 117,389 | ||||
WireCo WorldGroup, Inc., 1st Lien Term Loan, 6.50%, 9/30/23 | 317,975 | 321,155 | |||||
438,544 | |||||||
Multiline Retail† | |||||||
J.C. Penney Corporation, Inc., 2016 Term Loan B, 5.30%, 6/23/23 | 58,179 | 58,180 | |||||
Oil, Gas and Consumable Fuels — 0.2% | |||||||
Talos Production LLC, 2nd Lien Bridge Term Loan, 11.00%, 4/3/22 | 500,000 | 467,500 | |||||
Personal Products — 0.1% | |||||||
KIK Custom Products, Inc., 2015 Term Loan B, 5.65%, 8/26/22 | 178,184 | 180,367 | |||||
Pharmaceuticals† | |||||||
Packaging Coordinators Midco, Inc., 1st Lien Term Loan, 5.15%, 6/30/23 | 61,108 | 61,318 | |||||
Real Estate Management and Development — 0.1% | |||||||
Capital Automotive L.P., 2017 1st Lien Term Loan, 4.00%, 3/24/24 | 54,889 | 55,425 | |||||
Capital Automotive L.P., 2017 2nd Lien Term Loan, 7.00%, 3/24/25 | 46,619 | 47,755 | |||||
103,180 | |||||||
Semiconductors and Semiconductor Equipment† | |||||||
Cavium, Inc., 2017 Term Loan B, 3.24%, 8/16/22 | 44,387 | 44,526 | |||||
Software — 0.7% | |||||||
Epicor Software Corporation, 1st Lien Term Loan, 4.75%, 6/1/22 | 49,159 | 49,189 | |||||
Epicor Software Corporation, 2016 Term Loan, 5.00%, 6/1/22 | 54,542 | 54,622 | |||||
Quest Software US Holdings Inc., Term Loan B, 7.00%, 10/31/22 | 87,291 | 88,927 | |||||
RP Crown Parent, LLC, 2016 Term Loan B, 4.50%, 10/12/23 | 124,688 | 125,895 | |||||
SolarWinds Holdings, Inc., 2017 Term Loan, 4.50%, 2/5/23 | 603,354 | 607,376 | |||||
Sophia, L.P., 2017 Term Loan B, 4.40%, 9/30/22 | 507,215 | 507,088 |
13
Principal Amount/ Shares | Value | ||||||
STG-Fairway Acquisitions, Inc., 2015 1st Lien Term Loan, 6.40%, 6/30/22 | $ | 149,564 | $ | 132,364 | |||
1,565,461 | |||||||
Specialty Retail — 0.2% | |||||||
Harbor Freight Tools USA, Inc., 2016 Term Loan B, 4.24%, 8/19/23 | 97,416 | 97,307 | |||||
Petco Animal Supplies, Inc., 2017 Term Loan B, 4.17%, 1/26/23 | 422,942 | 384,482 | |||||
481,789 | |||||||
Technology Hardware, Storage and Peripherals — 0.5% | |||||||
Dell Inc., 2017 Term Loan B, 3.50%, 9/7/23 | 204,341 | 205,344 | |||||
Dell Inc., Term Loan A2, 3.25%, 9/7/21 | 98,734 | 99,006 | |||||
Misys Europe SA, USD 1st Lien Term Loan, 4/27/24(7) | 151,313 | 152,543 | |||||
Optiv Security, Inc., 1st Lien Term Loan, 4.25%, 2/1/24 | 151,388 | 151,419 | |||||
Project Alpha Intermediate Holding, Inc., 2017 Term Loan B, 4/18/24(7) | 101,137 | 100,821 | |||||
Salient CRGT, Inc., 2017 Term Loan, 6.75%, 2/25/22 | 114,695 | 113,548 | |||||
Tempo Acquisition LLC, Term Loan, 3/15/24(7) | 316,376 | 316,613 | |||||
1,139,294 | |||||||
Textiles, Apparel and Luxury Goods — 0.1% | |||||||
Ascena Retail Group, Inc., 2015 Term Loan B, 5.50%, 8/21/22 | 120,113 | 108,890 | |||||
Wireless Telecommunication Services — 0.3% | |||||||
LTS Buyer LLC, 1st Lien Term Loan, 4.40%, 4/13/20 | 427,152 | 429,593 | |||||
Sprint Communications, Inc., 1st Lien Term Loan B, 3.50%, 2/2/24 | 144,856 | 145,196 | |||||
574,789 | |||||||
TOTAL BANK LOAN OBLIGATIONS (Cost $23,352,375) | 23,549,121 | ||||||
COLLATERALIZED LOAN OBLIGATIONS(1) — 10.2% | |||||||
Ares Enhanced Loan Investment Strategy IR Ltd., Series 2013-IRAR, Class D, VRN, 6.04%, 7/24/17(2) | 850,000 | 838,832 | |||||
Catamaran Collateralized Loan Obligations Ltd., Series 2012-1A, Class E, VRN, 6.77%, 6/20/17(2) | 1,000,000 | 995,714 | |||||
CIFC Funding Ltd., Series 2014-3A, Class E, VRN, 5.90%, 7/24/17(2) | 500,000 | 477,038 | |||||
CIFC Funding Ltd., Series 2016-1A, Class D, VRN, 5.16%, 7/21/17(2) | 1,000,000 | 1,015,413 | |||||
Covenant Credit Partners Collateralized Loan Obligations II Ltd., Series 2014-2A, Class D, VRN, 4.81%, 7/17/17(2) | 1,000,000 | 997,583 | |||||
Galaxy XVI Collateralized Loan Obligations Ltd., Series 2013-16A, Class E, VRN, 5.54%, 5/16/17(2) | 814,944 | 782,918 | |||||
Golub Capital Partners Collateralized Loan Obligations Ltd., Series 2015-22A, Class C, VRN, 5.20%, 5/22/17(2) | 300,000 | 301,410 | |||||
Nelder Grove Collateralized Loan Obligations Ltd., Series 2014-1A, Class D1R, VRN, 5.10%, 5/30/17(2) | 1,000,000 | 1,005,489 | |||||
Neuberger Berman Collateralized Loan Obligations XVI Ltd., Series 2014-16A, Class D, VRN, 4.51%, 7/17/17(2) | 1,000,000 | 1,003,475 | |||||
Northwoods Capital IX Ltd., Series 2012-9A, Class E, VRN, 6.26%, 7/18/17(2) | 621,000 | 620,424 | |||||
Northwoods Capital X Ltd., Series 2013-10A, Class D, VRN, 4.63%, 8/4/17(2) | 1,000,000 | 1,000,140 |
14
Principal Amount/ Shares | Value | ||||||
Northwoods Capital X Ltd., Series 2013-10A, Class DR, VRN, 4.67%, 8/4/17(2)(3) | $ | 1,000,000 | $ | 1,000,000 | |||
OZLM Funding II Ltd., Series 2012-2A, Class CR, VRN, 5.04%, 7/31/17(2) | 500,000 | 504,403 | |||||
OZLM VI Ltd., Series 2014-6A, Class D, VRN, 5.91%, 7/17/17(2) | 535,000 | 520,486 | |||||
OZLM VIII Ltd., Series 2014-8A, Class C, VRN, 4.66%, 7/17/17(2) | 1,000,000 | 1,008,904 | |||||
Pinnacle Park Collateralized Loan Obligations Ltd., Series 2014-1A, Class E, VRN, 6.11%, 7/17/17(2) | 520,000 | 499,811 | |||||
Shackleton Collateralized Loan Obligations, Series 2014-6A, Class D, VRN, 4.62%, 7/17/17(2) | 750,000 | 741,089 | |||||
Shackleton Collateralized Loan Obligations Ltd., Series 2013-4A, Class E, VRN, 6.02%, 7/13/17(2) | 1,300,000 | 1,249,798 | |||||
Sound Harbor Loan Fund Ltd., Series 2014-1A, Class CR, VRN, 5.07%, 7/31/17(2)(3) | 1,000,000 | 1,000,000 | |||||
Sound Point Collateralized Loan Obligations V Ltd., Series 2014-1A, Class D, VRN, 4.56%, 7/18/17(2) | 300,000 | 302,665 | |||||
TICP Collateralized Loan Obligations VI Ltd., Series 2016-6A, Class D, VRN, 5.08%, 7/17/17(2) | 1,000,000 | 1,016,080 | |||||
Venture XIV Collateralized Loan Obligations Ltd., Series 2013-14A, Class D, VRN, 4.80%, 5/30/17(2) | 300,000 | 302,656 | |||||
Venture XVI Collateralized Loan Obligations Ltd., Series 2014-16A, Class B1L, VRN, 4.61%, 7/17/17(2) | 1,000,000 | 1,000,334 | |||||
Vibrant Collateralized Loan Obligations III Ltd., Series 2015-3A, Class C, VRN, 4.68%, 7/20/17(2) | 1,000,000 | 1,003,994 | |||||
Voya Collateralized Loan Obligations Ltd., Series 2013-1A, Class C, VRN, 4.66%, 7/17/17(2) | 750,000 | 755,598 | |||||
Voya Collateralized Loan Obligations Ltd., Series 2014-4A, Class D, VRN, 6.66%, 7/14/17(2) | 1,100,000 | 1,089,131 | |||||
WhiteHorse VII Ltd., Series 2013-1A, Class B1L, VRN, 4.75%, 5/24/17(2) | 1,500,000 | 1,508,905 | |||||
TOTAL COLLATERALIZED LOAN OBLIGATIONS (Cost $22,088,570) | 22,542,290 | ||||||
CORPORATE BONDS — 10.2% | |||||||
Aerospace and Defense† | |||||||
StandardAero Aviation Holdings, Inc., 10.00%, 7/15/23(2) | 88,000 | 96,580 | |||||
Airlines — 0.3% | |||||||
Intrepid Aviation Group Holdings LLC / Intrepid Finance Co., 6.875%, 2/15/19(2) | 500,000 | 480,000 | |||||
United Continental Holdings, Inc., 5.00%, 2/1/24 | 122,000 | 123,220 | |||||
VistaJet Malta Finance plc / VistaJet Co. Finance LLC, 7.75%, 6/1/20(2) | 20,000 | 16,350 | |||||
619,570 | |||||||
Auto Components — 0.1% | |||||||
Allison Transmission, Inc., 5.00%, 10/1/24(2) | 184,000 | 187,910 | |||||
Goodyear Tire & Rubber Co. (The), 5.125%, 11/15/23 | 106,000 | 111,775 | |||||
Goodyear Tire & Rubber Co. (The), 5.00%, 5/31/26 | 20,000 | 20,575 | |||||
320,260 | |||||||
Chemicals — 0.2% | |||||||
TPC Group, Inc., 8.75%, 12/15/20(2) | 545,000 | 509,575 | |||||
Commercial Services and Supplies — 0.3% | |||||||
ADT Corp. (The), 3.50%, 7/15/22 | 133,000 | 129,342 |
15
Principal Amount/ Shares | Value | ||||||
Live Nation Entertainment, Inc., 4.875%, 11/1/24(2) | $ | 57,000 | $ | 57,570 | |||
Prime Security Services Borrower LLC / Prime Finance, Inc., 9.25%, 5/15/23(2) | 142,000 | 155,490 | |||||
Ritchie Bros Auctioneers, Inc., 5.375%, 1/15/25(2) | 114,000 | 117,990 | |||||
ServiceMaster Co. LLC (The), 5.125%, 11/15/24(2) | 120,000 | 124,200 | |||||
584,592 | |||||||
Communications Equipment — 0.2% | |||||||
Zayo Group LLC / Zayo Capital, Inc., 6.00%, 4/1/23 | 272,000 | 290,360 | |||||
Zayo Group LLC / Zayo Capital, Inc., 6.375%, 5/15/25 | 135,000 | 146,475 | |||||
Zayo Group LLC / Zayo Capital, Inc., 5.75%, 1/15/27(2) | 32,000 | 34,040 | |||||
470,875 | |||||||
Construction and Engineering — 0.4% | |||||||
AECOM, 5.125%, 3/15/27(2) | 510,000 | 511,861 | |||||
SBA Communications Corp., 4.875%, 7/15/22 | 126,000 | 130,095 | |||||
SBA Communications Corp., 4.875%, 9/1/24(2) | 212,000 | 214,385 | |||||
856,341 | |||||||
Construction Materials — 0.2% | |||||||
CPG Merger Sub LLC, 8.00%, 10/1/21(2) | 87,000 | 91,785 | |||||
Eagle Materials, Inc., 4.50%, 8/1/26 | 125,000 | 125,000 | |||||
Standard Industries, Inc., 6.00%, 10/15/25(2) | 44,000 | 47,190 | |||||
Standard Industries, Inc., 5.00%, 2/15/27(2) | 39,000 | 39,488 | |||||
USG Corp., 5.50%, 3/1/25(2) | 68,000 | 71,655 | |||||
375,118 | |||||||
Consumer Finance — 0.3% | |||||||
GLP Capital LP / GLP Financing II, Inc., 4.375%, 4/15/21 | 23,000 | 24,150 | |||||
GLP Capital LP / GLP Financing II, Inc., 5.375%, 4/15/26 | 115,000 | 121,612 | |||||
Park Aerospace Holdings Ltd., 5.25%, 8/15/22(2) | 387,000 | 410,220 | |||||
Park Aerospace Holdings Ltd., 5.50%, 2/15/24(2) | 69,000 | 73,140 | |||||
629,122 | |||||||
Consumer Staples — 0.2% | |||||||
Kronos Acquisition Holdings, Inc., 9.00%, 8/15/23(2) | 120,000 | 122,100 | |||||
Sabre GLBL, Inc., 5.375%, 4/15/23(2) | 73,000 | 76,285 | |||||
Sabre GLBL, Inc., 5.25%, 11/15/23(2) | 303,000 | 315,120 | |||||
513,505 | |||||||
Containers and Packaging — 0.4% | |||||||
Ball Corp., 5.25%, 7/1/25 | 77,000 | 83,449 | |||||
Berry Plastics Corp., 5.50%, 5/15/22 | 89,000 | 93,116 | |||||
Berry Plastics Corp., 6.00%, 10/15/22 | 3,000 | 3,199 | |||||
Berry Plastics Corp., 5.125%, 7/15/23 | 100,000 | 104,345 | |||||
BWAY Holding Co., 5.50%, 4/15/24(2) | 190,000 | 192,613 | |||||
BWAY Holding Co., 7.25%, 4/15/25(2) | 145,000 | 145,181 | |||||
Crown Americas LLC / Crown Americas Capital Corp. V, 4.25%, 9/30/26(2) | 26,000 | 25,545 | |||||
Sealed Air Corp., 5.125%, 12/1/24(2) | 126,000 | 132,615 | |||||
Silgan Holdings, Inc., 3.25%, 3/15/25(2) | EUR | 105,000 | 115,814 | ||||
895,877 |
16
Principal Amount/ Shares | Value | ||||||
Diversified Financial Services† | |||||||
Ally Financial, Inc., 4.125%, 2/13/22 | $ | 33,000 | $ | 33,289 | |||
Ally Financial, Inc., 5.125%, 9/30/24 | 20,000 | 20,475 | |||||
53,764 | |||||||
Diversified Telecommunication Services — 0.8% | |||||||
Inmarsat Finance plc, 4.875%, 5/15/22(2) | 310,000 | 313,100 | |||||
Intelsat Jackson Holdings SA, 7.25%, 10/15/20 | 125,000 | 117,650 | |||||
Intelsat Jackson Holdings SA, 9.50%, 9/30/22(2) | 462,000 | 546,315 | |||||
Level 3 Financing, Inc., 5.625%, 2/1/23 | 600,000 | 624,000 | |||||
Telesat Canada / Telesat LLC, 8.875%, 11/15/24(2) | 166,000 | 183,015 | |||||
1,784,080 | |||||||
Electronic Equipment, Instruments and Components — 0.1% | |||||||
WESCO Distribution, Inc., 5.375%, 6/15/24 | 263,000 | 271,548 | |||||
Energy Equipment and Services — 0.1% | |||||||
CHC Group LLC / CHC Finance Ltd., (Acquired 3/13/17, Cost $70,835), 0.00%, 10/1/20(8)(9) | 114,377 | 183,003 | |||||
Equity Real Estate Investment Trusts (REITs)† | |||||||
MGM Growth Properties Operating Partnership LP / MGP Finance Co-Issuer, Inc., 4.50%, 9/1/26 | 66,000 | 66,083 | |||||
Food Products — 0.4% | |||||||
Lamb Weston Holdings, Inc., 4.625%, 11/1/24(2) | 99,000 | 102,465 | |||||
Lamb Weston Holdings, Inc., 4.875%, 11/1/26(2) | 31,000 | 32,046 | |||||
Pinnacle Foods Finance LLC / Pinnacle Foods Finance Corp., 4.875%, 5/1/21(4) | 400,000 | 411,000 | |||||
Post Holdings, Inc., 5.00%, 8/15/26(2) | 141,000 | 140,648 | |||||
TreeHouse Foods, Inc., 6.00%, 2/15/24(2) | 84,000 | 89,880 | |||||
776,039 | |||||||
Health Care Equipment and Supplies — 0.2% | |||||||
MEDNAX, Inc., 5.25%, 12/1/23(2) | 492,000 | 504,300 | |||||
Health Care Providers and Services — 0.6% | |||||||
Covenant Surgical Partners, Inc., 8.75%, 8/1/19(2) | 400,000 | 390,000 | |||||
Envision Healthcare Corp., 6.25%, 12/1/24(2) | 70,000 | 73,850 | |||||
HCA, Inc., 5.375%, 2/1/25 | 644,000 | 672,175 | |||||
HCA, Inc., 4.50%, 2/15/27 | 175,000 | 177,098 | |||||
1,313,123 | |||||||
Hotels, Restaurants and Leisure — 1.2% | |||||||
1011778 BC ULC / New Red Finance, Inc., 4.625%, 1/15/22(2) | 600,000 | 619,680 | |||||
AdvancePierre Foods Holdings, Inc., 5.50%, 12/15/24(2) | 376,000 | 420,180 | |||||
Aramark Services, Inc., 5.125%, 1/15/24 | 301,000 | 318,307 | |||||
Cedar Fair LP / Canada's Wonderland Co. / Magnum Management Corp., 5.375%, 6/1/24 | 56,000 | 58,240 | |||||
Hilton Domestic Operating Co., Inc., 4.25%, 9/1/24(2) | 135,000 | 136,350 | |||||
Hilton Worldwide Finance LLC / Hilton Worldwide Finance Corp., 4.625%, 4/1/25(2) | 248,000 | 255,440 | |||||
Hilton Worldwide Finance LLC / Hilton Worldwide Finance Corp., 4.875%, 4/1/27(2) | 149,000 | 153,098 | |||||
KFC Holding Co. / Pizza Hut Holdings LLC / Taco Bell of America LLC, 5.00%, 6/1/24(2) | 20,000 | 20,700 |
17
Principal Amount/ Shares | Value | ||||||
KFC Holding Co. / Pizza Hut Holdings LLC / Taco Bell of America LLC, 5.25%, 6/1/26(2) | $ | 347,000 | $ | 356,542 | |||
Six Flags Entertainment Corp., 4.875%, 7/31/24(2) | 384,000 | 388,320 | |||||
2,726,857 | |||||||
Household Durables — 0.1% | |||||||
Lennar Corp., 4.875%, 12/15/23 | 63,000 | 65,441 | |||||
Tempur Sealy International, Inc., 5.50%, 6/15/26 | 61,000 | 60,848 | |||||
Toll Brothers Finance Corp., 5.625%, 1/15/24 | 63,000 | 67,804 | |||||
194,093 | |||||||
Industrial Conglomerates — 0.1% | |||||||
Gates Global LLC / Gates Global Co., 6.00%, 7/15/22(2) | 253,000 | 255,530 | |||||
Insurance — 0.3% | |||||||
Aircastle Ltd., 5.50%, 2/15/22 | 375,000 | 407,962 | |||||
Aircastle Ltd., 4.125%, 5/1/24 | 241,000 | 245,700 | |||||
653,662 | |||||||
Machinery — 0.3% | |||||||
Huntington Ingalls Industries, Inc., 5.00%, 12/15/21(2) | 29,000 | 30,160 | |||||
Huntington Ingalls Industries, Inc., 5.00%, 11/15/25(2) | 102,000 | 107,865 | |||||
Oshkosh Corp., 5.375%, 3/1/25 | 340,000 | 356,150 | |||||
Welbilt, Inc., 9.50%, 2/15/24 | 40,000 | 46,400 | |||||
540,575 | |||||||
Media — 1.4% | |||||||
CCO Holdings LLC / CCO Holdings Capital Corp., 5.75%, 1/15/24 | 387,000 | 408,285 | |||||
CCO Holdings LLC / CCO Holdings Capital Corp., 5.75%, 2/15/26(2) | 476,000 | 506,788 | |||||
CCO Holdings LLC / CCO Holdings Capital Corp., 5.125%, 5/1/27(2) | 111,000 | 113,498 | |||||
GTT Escrow Corp., 7.875%, 12/31/24(2) | 130,000 | 135,850 | |||||
Lamar Media Corp., 5.75%, 2/1/26 | 381,000 | 416,242 | |||||
National CineMedia LLC, 6.00%, 4/15/22 | 250,000 | 258,125 | |||||
National CineMedia LLC, 5.75%, 8/15/26 | 233,000 | 238,825 | |||||
Nielsen Finance LLC / Nielsen Finance Co., 5.00%, 4/15/22(2) | 537,000 | 554,117 | |||||
Regal Entertainment Group, 5.75%, 6/15/23 | 113,000 | 119,497 | |||||
Regal Entertainment Group, 5.75%, 2/1/25 | 65,000 | 67,925 | |||||
Sirius XM Radio, Inc., 6.00%, 7/15/24(2) | 44,000 | 47,190 | |||||
Sirius XM Radio, Inc., 5.375%, 7/15/26(2) | 15,000 | 15,394 | |||||
Unison Ground Lease Funding LLC, 6.27%, 3/15/43(2) | 171,000 | 159,243 | |||||
3,040,979 | |||||||
Metals and Mining — 0.1% | |||||||
Compass Minerals International, Inc., 4.875%, 7/15/24(2) | 198,000 | 194,535 | |||||
Multiline Retail† | |||||||
JC Penney Corp., Inc., 5.875%, 7/1/23(2) | 37,000 | 37,463 | |||||
Oil, Gas and Consumable Fuels — 1.0% | |||||||
Alta Mesa Holdings LP / Alta Mesa Finance Services Corp., 7.875%, 12/15/24(2) | 503,000 | 530,665 | |||||
Diamondback Energy, Inc., 4.75%, 11/1/24(2) | 511,000 | 514,832 | |||||
Gulfport Energy Corp., 6.00%, 10/15/24(2) | 570,000 | 564,300 |
18
Principal Amount/ Shares | Value | ||||||
Parsley Energy LLC / Parsley Finance Corp., 5.375%, 1/15/25(2) | $ | 309,000 | $ | 313,635 | |||
Range Resources Corp., 5.00%, 3/15/23(2) | 290,000 | 288,188 | |||||
2,211,620 | |||||||
Pharmaceuticals† | |||||||
Valeant Pharmaceuticals International, Inc., 4.50%, 5/15/23 | EUR | 100,000 | 76,740 | ||||
Software — 0.1% | |||||||
Rackspace Hosting, Inc., 8.625%, 11/15/24(2) | $ | 63,000 | 66,859 | ||||
Sophia LP / Sophia Finance, Inc., 9.00%, 9/30/23(2) | 194,000 | 204,762 | |||||
271,621 | |||||||
Specialty Retail — 0.3% | |||||||
Sally Holdings LLC / Sally Capital, Inc., 5.625%, 12/1/25 | 377,000 | 391,137 | |||||
United Rentals North America, Inc., 5.875%, 9/15/26 | 77,000 | 81,524 | |||||
United Rentals North America, Inc., 5.50%, 5/15/27 | 77,000 | 79,406 | |||||
552,067 | |||||||
Technology Hardware, Storage and Peripherals — 0.1% | |||||||
Dell International LLC / EMC Corp., 6.02%, 6/15/26(2) | 105,000 | 115,858 | |||||
Textiles, Apparel and Luxury Goods — 0.1% | |||||||
Hanesbrands, Inc., 4.875%, 5/15/26(2) | 100,000 | 100,000 | |||||
Wireless Telecommunication Services — 0.3% | |||||||
T-Mobile USA, Inc., 6.00%, 4/15/24 | 150,000 | 162,900 | |||||
T-Mobile USA, Inc., 6.375%, 3/1/25 | 12,000 | 13,144 | |||||
T-Mobile USA, Inc., 6.50%, 1/15/26 | 398,000 | 442,277 | |||||
618,321 | |||||||
TOTAL CORPORATE BONDS (Cost $21,913,156) | 22,413,276 | ||||||
EXCHANGE-TRADED FUNDS — 6.9% | |||||||
iShares Global Financials ETF | 71,572 | 4,378,059 | |||||
iShares International Select Dividend ETF | 216,440 | 6,884,957 | |||||
iShares U.S. Preferred Stock ETF | 61,408 | 2,395,526 | |||||
PowerShares Preferred Portfolio ETF | 100,174 | 1,497,601 | |||||
TOTAL EXCHANGE-TRADED FUNDS (Cost $14,210,142) | 15,156,143 | ||||||
COMMERCIAL MORTGAGE-BACKED SECURITIES(1) — 6.5% | |||||||
CDGJ Commercial Mortgage Trust, Series 2014-BXCH, Class DPB, VRN, 4.84%, 5/15/17(2) | $ | 212,500 | 214,476 | ||||
CDGJ Commercial Mortgage Trust, Series 2014-BXCH, Class EPA, VRN, 5.24%, 5/15/17(2) | 889,196 | 897,798 | |||||
CFCRE Commercial Mortgage Trust, Series 2011-C1, Class D, VRN, 6.28%, 5/1/17(2) | 1,000,000 | 1,016,937 | |||||
Citigroup Commercial Mortgage Trust, Series 2008-C7, Class A1A, VRN, 6.25%, 5/1/17 | 434,291 | 437,913 | |||||
COBALT CMBS Commercial Mortgage Trust, Series 2007-C3, Class A1A, VRN, 5.99%, 5/1/17 | 187,249 | 187,459 | |||||
Cosmopolitan Hotel Trust, Series 2016-CSMO, Class D, VRN, 4.49%, 5/15/17(2) | 1,000,000 | 1,016,511 | |||||
Credit Suisse Commercial Mortgage Trust, Series 2008-C1, Class A3, VRN, 6.51%, 5/1/17 | 129,229 | 130,360 | |||||
CSMC Trust, Series 2015-DEAL, Class D, VRN, 4.09%, 5/15/17(2) | 1,000,000 | 1,006,012 |
19
Principal Amount/ Shares | Value | ||||||
CSMC Trust, Series 2015-DEAL, Class E, VRN, 4.99%, 5/15/17(2) | $ | 1,000,000 | $ | 1,008,835 | |||
EQTY Mortgage Trust, Series 2014-INNS, Class E, VRN, 4.44%, 5/8/17(2) | 1,000,000 | 1,003,806 | |||||
GE Commercial Mortgage Corp., Series 2007-C1, Class A1A, VRN, 5.48%, 5/1/17 | 92,794 | 92,726 | |||||
Hyatt Hotel Portfolio Trust, Series 2015-HYT, Class E, VRN, 4.79%, 5/15/17(2) | 1,000,000 | 1,006,415 | |||||
JPMorgan Chase Commercial Mortgage Securities Corp., Series 2016-WPT, Class D, VRN, 4.74%, 5/15/17(2) | 1,000,000 | 1,017,984 | |||||
JPMorgan Chase Commercial Mortgage Securities Trust, Series 2013-C10, Class D, VRN, 4.29%, 5/1/17 | 1,000,000 | 911,562 | |||||
JPMorgan Chase Commercial Mortgage Securities Trust, Series 2014-BXH, Class E, VRN, 4.74%, 5/15/17(2) | 300,000 | 291,698 | |||||
JPMorgan Chase Commercial Mortgage Securities Trust, Series 2014-CBM, Class E, VRN, 4.84%, 5/15/17(2) | 300,000 | 302,247 | |||||
JPMorgan Chase Commercial Mortgage Securities Trust, Series 2014-INN, Class E, VRN, 4.59%, 5/15/17(2) | 1,000,000 | 1,001,617 | |||||
JPMorgan Chase Commercial Mortgage Securities Trust, Series 2014-PHH, Class E, VRN, 4.29%, 5/15/17(2) | 1,000,000 | 1,000,540 | |||||
LB Commercial Mortgage Trust, Series 2007-C3, Class A1A, VRN, 6.16%, 5/11/17 | 134,815 | 135,262 | |||||
Lone Star Portfolio Trust, Series 2015-LSP, Class E, VRN, 6.59%, 5/15/17(2) | 1,194,512 | 1,218,490 | |||||
Morgan Stanley Capital I Trust, Series 2007-HQ13, Class A3 SEQ, 5.57%, 12/15/44 | 441,583 | 445,348 | |||||
TOTAL COMMERCIAL MORTGAGE-BACKED SECURITIES (Cost $14,247,836) | 14,343,996 | ||||||
EXCHANGE-TRADED NOTES — 5.0% | |||||||
ETRACS Alerian MLP Infrastructure Index ETN | 148,532 | 4,182,661 | |||||
JPMorgan Alerian MLP Index ETN | 211,518 | 6,736,848 | |||||
TOTAL EXCHANGE-TRADED NOTES (Cost $10,748,264) | 10,919,509 | ||||||
COLLATERALIZED MORTGAGE OBLIGATIONS(1) — 3.6% | |||||||
Private Sponsor Collateralized Mortgage Obligations — 2.0% | |||||||
Banc of America Merrill Lynch, Series 2016 ASHF , Class E, VRN, 7.74%, 5/15/17(2) | $ | 1,000,000 | 1,029,851 | ||||
Bear Stearns Asset Backed Securities I Trust, Series 2004-AC6, Class A2, VRN, 1.39%, 5/25/17 | 1,286,538 | 1,111,327 | |||||
Credit Suisse Mortgage Trust, Series 2015-SAND, Class E, VRN, 4.85%, 5/15/17(2) | 300,000 | 304,229 | |||||
Credit Suisse Mortgage Trust, Series 2015-SAND, Class F, VRN, 5.70%, 5/15/17(2) | 1,000,000 | 1,015,208 | |||||
First Horizon Alternative Mortgage Securities Trust, Series 2004-FA2, Class 1A1 SEQ, 6.00%, 1/25/35 | 885,627 | 872,436 | |||||
4,333,051 | |||||||
U.S. Government Agency Collateralized Mortgage Obligations — 1.6% | |||||||
FNMA, Series 2016-C05, Class 2M2, VRN, 5.44%, 5/25/17 | 1,000,000 | 1,092,259 | |||||
FNMA, Series 2016-C06, Class 1M2, VRN, 5.24%, 5/25/17 | 1,000,000 | 1,088,079 | |||||
GNMA, Series 2012-87, IO, VRN, 0.59%, 5/1/17 | 5,979,267 | 193,962 | |||||
GNMA, Series 2012-99, IO, SEQ, VRN, 0.56%, 5/1/17 | 4,640,859 | 184,689 | |||||
GNMA, Series 2014-126, IO, SEQ, VRN, 0.75%, 5/1/17 | 5,300,122 | 297,885 | |||||
GNMA, Series 2014-126, IO, SEQ, VRN, 0.98%, 5/1/17 | 6,523,227 | 417,501 |
20
Principal Amount/ Shares | Value | ||||||
GNMA, Series 2015-85, IO, VRN, 0.63%, 5/1/17 | $ | 6,789,042 | $ | 339,474 | |||
3,613,849 | |||||||
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (Cost $8,168,957) | 7,946,900 | ||||||
U.S. TREASURY SECURITIES — 2.5% | |||||||
U.S. Treasury Notes, 1.625%, 5/15/26 | 3,765,000 | 3,568,294 | |||||
U.S. Treasury Notes, 2.00%, 11/15/26 | 2,100,000 | 2,049,552 | |||||
TOTAL U.S. TREASURY SECURITIES (Cost $5,700,533) | 5,617,846 | ||||||
PURCHASED OPTIONS CONTRACTS† | |||||||
iShares Russell 2000 ETF Trust, Put $132.00, Expires July 2017 | 21 | 3,895 | |||||
iShares Russell 2000 ETF Trust, Put $129.00, Expires September 2017 | 10 | 2,395 | |||||
SPDR S&P 500 ETF Trust, Call $236.00, Expires May 2017 | 17 | 5,882 | |||||
SPDR S&P 500 ETF Trust, Call $238.00, Expires May 2017 | 62 | 6,014 | |||||
SPDR S&P 500 ETF Trust, Put $235.00, Expires May 2017 | 34 | 391 | |||||
SPDR S&P 500 ETF Trust, Put $235.00, Expires May 2017 | 17 | 1,623 | |||||
SPDR S&P 500 ETF Trust, Put $238.00, Expires May 2017 | 62 | 4,774 | |||||
SPDR S&P 500 ETF Trust, Put $195.00, Expires June 2017 | 3 | 41 | |||||
SPDR S&P 500 ETF Trust, Put $224.00, Expires June 2017 | 11 | 858 | |||||
SPDR S&P 500 ETF Trust, Put $212.00, Expires September 2017 | 18 | 3,096 | |||||
TOTAL PURCHASED OPTIONS CONTRACTS (Cost $52,005) | 28,969 | ||||||
TEMPORARY CASH INVESTMENTS — 14.4% | |||||||
State Street Institutional U.S. Government Money Market Fund, Premier Class (Cost $31,821,937) | 31,821,937 | 31,821,937 | |||||
TOTAL INVESTMENT SECURITIES BEFORE SECURITIES SOLD SHORT — 99.4% (Cost $215,681,427) | 219,174,188 | ||||||
CORPORATE BONDS SOLD SHORT — (0.1)% | |||||||
Automobiles — (0.1)% | |||||||
Fiat Chrysler Automobiles NV, 4.50%, 4/15/20 | $ | (73,000 | ) | (75,464 | ) | ||
Chemicals† | |||||||
Tronox Finance LLC, 144A, 7.50%, 3/15/22 | (60,000 | ) | (63,000 | ) | |||
TOTAL CORPORATE BONDS SOLD SHORT (Proceeds $127,626) | (138,464 | ) | |||||
OTHER ASSETS AND LIABILITIES — 0.7% | 1,380,551 | ||||||
TOTAL NET ASSETS — 100.0% | $ | 220,416,275 |
WRITTEN OPTIONS CONTRACTS | ||||||||||
Reference Entity | Contracts | Type | Exercise Price | Expiration Date | Premiums Received | Value | ||||
iShares iBoxx $ High Yield Corporate Bond ETF | 231 | Put | $84.00 | June 2017 | $ | 18,932 | $ | (3,812 | ) | |
iShares iBoxx $ High Yield Corporate Bond ETF | 462 | Call | $87.00 | June 2017 | 42,483 | (53,130 | ) | |||
$ | 61,415 | $ | (56,942 | ) |
21
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS | ||||||||||
Currency Purchased | Currency Sold | Counterparty | Settlement Date | Unrealized Appreciation (Depreciation) | ||||||
USD | 600,673 | EUR | 560,000 | State Street Bank & Trust Co. | 5/19/17 | $ | (9,804 | ) |
FUTURES CONTRACTS | ||||||||
Contracts Purchased | Expiration Date | Underlying Face Amount at Value | Unrealized Appreciation (Depreciation) | |||||
220 | CBOE Volatility Index (VIX) | June 2017 | $ | 2,887,500 | $ | (282,321 | ) | |
Contracts Sold | Expiration Date | Underlying Face Amount at Value | Unrealized Appreciation (Depreciation) | |||||
212 | CBOE Volatility Index (VIX) | July 2017 | $ | 2,968,000 | $ | 207,608 | ||
37 | Euro-Bund 10-Year Bonds | June 2017 | 6,520,396 | (35,117 | ) | |||
36 | S&P 500 E-Mini | June 2017 | 4,284,900 | (21,687 | ) | |||
$ | 13,773,296 | $ | 150,804 |
CENTRALLY CLEARED CREDIT DEFAULT SWAP AGREEMENTS | ||||||||||||||
Reference Entity | Notional Amount | Buy/Sell* Protection | Interest Rate | Termination Date | Implied Credit Spread** | Unrealized Appreciation (Depreciation) | Value | |||||||
Markit CDX North America High Yield Index Series 28 | $ | 2,250,000 | Sell | 5.00% | 6/20/22 | 3.28% | $ | 33,713 | $ | 184,178 | ||||
Markit iTraxx Europe Crossover Series 27 | EUR | 73,000 | Sell | 5.00% | 6/20/22 | 2.66% | 1,973 | 9,130 | ||||||
$ | 35,686 | $ | 193,308 |
* | The maximum potential amount the fund could be required to deliver as a seller of credit protection if a credit event occurs as defined under the terms of the agreement is the notional amount. The maximum potential amount may be partially offset by any recovery values of the reference entities and upfront payments received upon entering into the agreement. |
** | Implied credit spreads for centrally cleared credit default swap agreements are linked to the weighted average spread across the underlying reference entities included in a particular index. Implied credit spreads serve as an indication of the seller's performance risk related to the likelihood of a credit event occurring as defined in the agreement. Implied credit spreads are used to determine the value of swap agreements and reflect the cost of buying/selling protection, which may include upfront payments made/received upon entering the agreement. Therefore, higher spreads would indicate a greater likelihood that a seller will be obligated to perform under the contract terms. Increasing values, in absolute terms and relative to notional amounts, are also indicative of greater performance risk. |
22
NOTES TO SCHEDULE OF INVESTMENTS | ||
CDX | - | Credit Derivatives Indexes |
EUR | - | Euro |
FNMA | - | Federal National Mortgage Association |
GNMA | - | Government National Mortgage Association |
IO | - | Interest Only |
SEQ | - | Sequential Payer |
USD | - | United States Dollar |
VRN | - | Variable Rate Note. Interest reset date is indicated. Rate shown is effective at the period end. |
† | Category is less than 0.05% of total net assets. |
(1) | Final maturity date indicated, unless otherwise noted. |
(2) | Security was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration, normally to qualified institutional investors. The aggregate value of these securities at the period end was $80,343,763, which represented 36.5% of total net assets. Of these securities, 0.7% of total net assets were deemed illiquid under policies approved by the Board of Directors. |
(3) | When-issued security. The issue price and yield are fixed on the date of the commitment, but payment and delivery are scheduled for a future date. |
(4) | Security, or a portion thereof, has been pledged at the custodian bank or with a broker for collateral requirements on options contracts and/or securities sold short. At the period end, the aggregate value of securities pledged was $6,913,985. |
(5) | Non-income producing. |
(6) | The interest rate on a bank loan obligation adjusts periodically based on a predetermined schedule. Rate shown is effective at period end. The maturity date on a bank loan obligation may be less than indicated as a result of contractual or optional prepayments. These prepayments cannot be predicted with certainty. Final maturity date is indicated. |
(7) | The interest rate will be determined upon settlement of the bank loan obligation after period end. |
(8) | Security is a zero-coupon bond. Zero-coupon securities are issued at a substantial discount from their |
value at maturity.
(9) | Restricted security that may not be offered for public sale without being registered with the Securities and Exchange Commission and/or may be subject to resale, redemption or transferability restrictions. The aggregate value of these securities at the period end was $183,003, which represented 0.1% of total net assets. |
See Notes to Financial Statements.
23
Statement of Assets and Liabilities |
APRIL 30, 2017 (UNAUDITED) | |||
Assets | |||
Investment securities, at value (cost of $215,681,427) | $ | 219,174,188 | |
Foreign currency holdings, at value (cost of $8,943) | 7,294 | ||
Deposits for securities sold short and derivative instruments | 746,710 | ||
Receivable for investments sold | 6,623,393 | ||
Receivable for capital shares sold | 2,440,424 | ||
Receivable for variation margin on futures contracts | 35,177 | ||
Receivable for variation margin on swap agreements | 1,047 | ||
Interest and dividends receivable | 752,404 | ||
229,780,637 | |||
Liabilities | |||
Securities sold short, at value (proceeds of $127,626) | 138,464 | ||
Disbursements in excess of demand deposit cash | 3,529 | ||
Written options contracts, at value (premiums of $61,415) | 56,942 | ||
Payable for investments purchased | 8,157,505 | ||
Payable for capital shares redeemed | 637,238 | ||
Unrealized depreciation on forward foreign currency exchange contracts | 9,804 | ||
Accrued management fees | 332,838 | ||
Distribution and service fees payable | 27,254 | ||
Interest expense payable on securities sold short | 721 | ||
Fees and charges payable on borrowings for securities sold short | 67 | ||
9,364,362 | |||
Net Assets | $ | 220,416,275 | |
Net Assets Consist of: | |||
Capital (par value and paid-in surplus) | $ | 218,638,856 | |
Undistributed net investment income | 515,187 | ||
Accumulated net realized loss | (2,118,548 | ) | |
Net unrealized appreciation | 3,380,780 | ||
$ | 220,416,275 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | ||||
Investor Class, $0.01 Par Value | $128,521,274 | 13,210,420 | $9.73 | |||
I Class, $0.01 Par Value | $15,243,746 | 1,566,273 | $9.73 | |||
Y Class, $0.01 Par Value | $5,022 | 516 | $9.73 | |||
A Class, $0.01 Par Value | $49,058,614 | 5,042,526 | $9.73* | |||
C Class, $0.01 Par Value | $21,260,756 | 2,197,276 | $9.68 | |||
R Class, $0.01 Par Value | $2,018,970 | 207,923 | $9.71 | |||
R6 Class, $0.01 Par Value | $4,307,893 | 442,585 | $9.73 |
*Maximum offering price $10.32 (net asset value divided by 0.9425).
See Notes to Financial Statements.
24
Statement of Operations |
FOR THE SIX MONTHS ENDED APRIL 30, 2017 (UNAUDITED) | |||
Investment Income (Loss) | |||
Income: | |||
Interest (net of foreign taxes withheld of $589) | $ | 2,354,652 | |
Dividends | 759,953 | ||
3,114,605 | |||
Expenses: | |||
Management fees | 1,589,507 | ||
Distribution and service fees: | |||
A Class | 42,157 | ||
C Class | 82,092 | ||
R Class | 4,923 | ||
Directors' fees and expenses | 2,136 | ||
Interest expense on securities sold short | 4,133 | ||
Fees and charges on borrowings for securities sold short | 145 | ||
Other expenses | 2,683 | ||
1,727,776 | |||
Fees waived(1) | (64,332 | ) | |
1,663,444 | |||
Net investment income (loss) | 1,451,161 | ||
Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investment transactions | 375,552 | ||
Securities sold short transactions | (938 | ) | |
Futures contract transactions | (125,489 | ) | |
Swap agreement transactions | 82,445 | ||
Written options contract transactions | 57,428 | ||
Foreign currency transactions | 21,912 | ||
410,910 | |||
Change in net unrealized appreciation (depreciation) on: | |||
Investments | 3,710,799 | ||
Securities sold short | (8,207 | ) | |
Futures contracts | (214,617 | ) | |
Swap agreements | 37,755 | ||
Written options contracts | (43,081 | ) | |
Translation of assets and liabilities in foreign currencies | (3,334 | ) | |
3,479,315 | |||
Net realized and unrealized gain (loss) | 3,890,225 | ||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 5,341,386 |
(1) | Amount consists of $37,232, $4,577, $13,490, $6,567, $788 and $1,678 for the Investor Class, I Class, A Class, C Class, R Class and R6 Class, respectively. The waiver amount for the Y Class was less than $0.50. |
See Notes to Financial Statements.
25
Statement of Changes in Net Assets |
SIX MONTHS ENDED APRIL 30, 2017 (UNAUDITED) AND YEAR ENDED OCTOBER 31, 2016 | ||||||
Increase (Decrease) in Net Assets | April 30, 2017 | October 31, 2016 | ||||
Operations | ||||||
Net investment income (loss) | $ | 1,451,161 | $ | 1,305,762 | ||
Net realized gain (loss) | 410,910 | (1,958,927 | ) | |||
Change in net unrealized appreciation (depreciation) | 3,479,315 | 2,235,948 | ||||
Net increase (decrease) in net assets resulting from operations | 5,341,386 | 1,582,783 | ||||
Distributions to Shareholders | ||||||
From net investment income: | ||||||
Investor Class | (781,488 | ) | (978,526 | ) | ||
I Class | (103,576 | ) | (234,250 | ) | ||
A Class | (225,586 | ) | (386,150 | ) | ||
C Class | (47,773 | ) | (297,352 | ) | ||
R Class | (10,887 | ) | (60,792 | ) | ||
R6 Class | (41,034 | ) | (77,674 | ) | ||
Decrease in net assets from distributions | (1,210,344 | ) | (2,034,744 | ) | ||
Capital Share Transactions | ||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | 129,158,170 | 36,711,052 | ||||
Net increase (decrease) in net assets | 133,289,212 | 36,259,091 | ||||
Net Assets | ||||||
Beginning of period | 87,127,063 | 50,867,972 | ||||
End of period | $ | 220,416,275 | $ | 87,127,063 | ||
Undistributed net investment income | $ | 515,187 | $ | 274,370 |
See Notes to Financial Statements.
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Notes to Financial Statements |
APRIL 30, 2017 (UNAUDITED)
1. Organization
American Century Capital Portfolios, Inc. (the corporation) is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company and is organized as a Maryland corporation. AC Alternatives Income Fund (the fund) is one fund in a series issued by the corporation. The fund’s investment objective is to seek to provide diverse sources of income.
The fund offers the Investor Class, I Class (formerly Institutional Class), Y 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. Sale of the Y Class commenced on April 10, 2017.
2. Significant Accounting Policies
The following is a summary of significant accounting policies consistently followed by the fund in preparation of its financial statements. The fund is an investment company and follows accounting and reporting guidance in accordance with accounting principles generally accepted in the United States of America. This may require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from these estimates. Management evaluated the impact of events or transactions occurring through the date the financial statements were issued that would merit recognition or disclosure.
Investment Valuations — The fund determines the fair value of its investments and computes its net asset value per share at the close of regular trading (usually 4 p.m. Eastern time) on the New York Stock Exchange (NYSE) on each day the NYSE is open. The Board of Directors has adopted valuation policies and procedures to guide the investment advisor in the fund’s investment valuation process and to provide methodologies for the oversight of the fund’s pricing function.
Fixed income securities are valued at the evaluated mean as provided by independent pricing services or at the mean of the most recent bid and asked prices as provided by investment dealers. Corporate bonds, U.S. Treasury and Government Agency securities and bank loan obligations are valued using market models that consider trade data, quotations from dealers and active market makers, relevant yield curve and spread data, creditworthiness, trade data or market information on comparable securities, and other relevant security specific information. Mortgage-related and asset-backed securities are valued based on models that consider trade data, prepayment and default projections, benchmark yield and spread data and estimated cash flows of each tranche of the issuer. Collateralized loan obligations are valued based on discounted cash flow models that consider trade and economic data, prepayment assumptions and default projections. Fixed income securities initially expressed in local currencies are translated into U.S. dollars at the mean of the appropriate currency exchange rate at the close of the NYSE as provided by an independent pricing service.
Exchange-traded notes and equity securities that are listed or traded on a domestic securities exchange are valued at the last reported sales price or at the official closing price as provided by the exchange. Equity securities traded on foreign securities exchanges are generally valued at the closing price of such securities on the exchange where primarily traded or at the close of the NYSE, if that is earlier. If no last sales price is reported, or if local convention or regulation so provides, the mean of the latest bid and asked prices may be used. Securities traded over-the-counter are valued at the mean of the latest bid and asked prices, the last sales price, or the official closing price. Equity securities initially expressed in local currencies are translated into U.S. dollars at the mean of the appropriate currency exchange rate at the close of the NYSE as provided by an independent pricing service.
Open-end management investment companies are valued at the reported net asset value per share. Exchange-traded futures and options contracts are valued based on quoted prices as provided by the appropriate exchange. Swap agreements are valued at an evaluated mean as provided by independent pricing services or independent brokers. Forward foreign currency exchange contracts are valued at the mean of the appropriate forward exchange rate at the close of the NYSE as provided by an independent pricing service. Investments initially expressed in local currencies are translated into U.S. dollars at the mean of the appropriate currency exchange rate at the close of the NYSE as provided by an independent pricing service.
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If the fund determines that the market price for an investment is not readily available or the valuation methods mentioned above do not reflect an investment’s fair value, such investment is valued as determined in good faith by the Board of Directors or its delegate, in accordance with policies and procedures adopted by the Board of Directors. In its determination of fair value, the fund may review several factors including, but not limited to, market information regarding the specific investment or comparable investments and correlation with other investment types, futures indices or general market indicators. Circumstances that may cause the fund to use these procedures to value an investment include, but are not limited to: an investment has been declared in default or is distressed; trading in a security has been suspended during the trading day or a security is not actively trading on its principal exchange; prices received from a regular pricing source are deemed unreliable; or there is a foreign market holiday and no trading occurred.
The fund monitors for significant events occurring after the close of an investment’s primary exchange but before the fund’s net asset value per share is determined. Significant events may include, but are not limited to: corporate announcements and transactions; governmental action and political unrest that could impact a specific investment or an investment sector; or armed conflicts, natural disasters and similar events that could affect investments in a specific country or region. The fund also monitors for significant fluctuations between domestic and foreign markets, as evidenced by the U.S. market or such other indicators that the Board of Directors, or its delegate, deems appropriate. If significant fluctuations in foreign markets are identified, the fund may apply a model-derived factor to the closing price of equity securities traded on foreign securities exchanges. The factor is based on observable market data as provided by an independent pricing service.
Security Transactions — Security transactions are accounted for as of the trade date. Net realized gains and losses are determined on the identified cost basis, which is also used for federal income tax purposes.
Investment Income — Interest income less foreign taxes withheld, if any, is recorded on the accrual basis and includes paydown gain (loss) and accretion of discounts and amortization of premiums. Inflation adjustments related to inflation-linked debt securities are reflected as interest income. 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.
Securities Sold Short — The fund enters into short sales, which is selling securities it does not own, as part of its normal investment activities. Upon selling a security short, the fund will segregate cash, cash equivalents or other appropriate liquid securities in at least an amount equal to the current market value of the securities sold short until the fund replaces the borrowed security. Interest earned on segregated cash for securities sold short is reflected as interest income. The fund is required to pay any dividends or interest due on securities sold short. Such dividends and interest are recorded as an expense. The fund may pay fees or charges on the assets borrowed for securities sold short. These fees are calculated daily based upon the value of each security sold short and a rate that is dependent on the availability of such security. If the market price of a security increases after the fund borrows the security, the fund may suffer a loss when it replaces the borrowed security at the higher price. Any loss will be increased by the amount of compensation, interest or dividends, and transaction costs the fund must pay to the lender of the borrowed security. Liabilities for securities sold short are valued daily and changes in value are recorded as change in net unrealized appreciation (depreciation) on securities sold short. The fund records realized gain (loss) on a security sold short when it is terminated by the fund and includes as a component of net realized gain (loss) on securities sold short transactions.
Foreign Currency Translations — All assets and liabilities initially expressed in foreign currencies are translated into U.S. dollars at prevailing exchange rates at period end. The fund may enter into spot foreign currency exchange contracts to facilitate transactions denominated in a foreign currency. Purchases and sales of investment securities, dividend and interest income, spot foreign currency exchange contracts, and expenses are translated at the rates of exchange prevailing on the respective dates of such transactions. Net realized and unrealized foreign currency exchange gains or losses related to investment securities are a component of net realized gain (loss) on investment transactions and change in net unrealized appreciation (depreciation) on investments, respectively.
Segregated Assets — In accordance with the 1940 Act, the fund segregates assets on its books and records to cover certain types of investments, including, but not limited to, short sales, futures contracts, options contracts, forward commitments, when-issued securities, swap agreements and certain forward foreign currency exchange contracts. American Century Investment Management, Inc. (ACIM) (the investment advisor) monitors, on a daily basis, the securities segregated to ensure the fund designates a sufficient amount of liquid assets, marked-to-market daily. The fund may also receive assets or be required to pledge
28
assets at the custodian bank or with a broker for margin requirements on short sales, futures contracts, options contracts, forward commitments and swap agreements.
Income Tax Status — It is the fund’s policy to distribute substantially all net investment income and net realized gains to shareholders and to otherwise qualify as a regulated investment company under provisions of the Internal Revenue Code. Accordingly, no provision has been made for income taxes. The fund files U.S. federal, state, local and non-U.S. tax returns as applicable. The fund's tax returns are subject to examination by the relevant taxing authority until expiration of the applicable statute of limitations, which is generally three years from the date of filing but can be longer in certain jurisdictions. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination and for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Multiple Class — All shares of the fund represent an equal pro rata interest in the net assets of the class to which such shares belong, and have identical voting, dividend, liquidation and other rights and the same terms and conditions, except for class specific expenses and exclusive rights to vote on matters affecting only individual classes. Income, non-class specific expenses, and realized and unrealized capital gains and losses of the fund are allocated to each class of shares based on their relative net assets.
Distributions to Shareholders — Distributions from net investment income, if any, are generally declared and paid quarterly, but may be paid less frequently. Distributions from net realized gains, if any, are generally declared and paid annually.
Indemnifications — Under the corporation’s organizational documents, its officers and directors are indemnified against certain liabilities arising out of the performance of their duties to the fund. In addition, in the normal course of business, the fund enters into contracts that provide general indemnifications. The maximum exposure under these arrangements is unknown as this would involve future claims that may be made against a fund. The risk of material loss from such claims is considered by management to be remote.
3. Fees and Transactions with Related Parties
Certain officers and directors of the corporation are also officers and/or directors of American Century Companies, Inc. (ACC). The corporation’s investment advisor, ACIM, the corporation's distributor, American Century Investment Services, Inc. (ACIS), and the corporation’s transfer agent, American Century Services, LLC, are wholly owned, directly or indirectly, by ACC. ACIM has engaged Perella Weinberg Partners Capital Management LP (PWP) as a subadvisor for the fund. PWP is responsible for making recommendations with respect to hiring, terminating, or replacing the fund’s underlying subadvisors. The fund’s underlying subadvisors at the period end were ArrowMark Colorado Holdings LLC (formerly Arrowpoint Asset Management, LLC), Bain Capital Credit, LP, and Good Hill Partners LP. PWP determines the percentage of the fund’s portfolio allocated to each subadvisor, including PWP, in order to seek to achieve the fund’s investment objective. ACIM is responsible for entering into subadvisory agreements and overseeing the activities of each of the subadvisors including monitoring compliance with fund objectives, strategies and restrictions. ACIM pays all costs associated with retaining the subadvisors of the fund. ACIM and the fund’s subadvisors own 20% of the shares of the fund.
Management Fees — The corporation has entered into a management agreement with ACIM, under which ACIM provides the fund with investment advisory and management services in exchange for a single, unified management fee (the fee) per class. The agreement provides that all expenses of managing and operating the fund, except distribution and service fees, expenses on securities sold short, brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), and extraordinary expenses, will be paid by ACIM. The fee is computed and accrued daily based on each class's daily net assets and paid monthly in arrears. The difference in the fee among the classes is a result of their separate arrangements for 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. During the period ended April 30, 2017, the investment advisor agreed to waive 0.08% of the fund's management fee. The investment advisor expects this waiver to continue until April 9, 2018 and cannot terminate it prior to such date without the approval of the Board of Directors.
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The annual management fee and the effective annual management fee after waiver for each class for the period ended April 30, 2017 are as follows:
Annual Management Fee | Effective Annual Management Fee After Waiver | |
Investor Class | 2.00% | 1.92% |
I Class | 1.80% | 1.72% |
Y Class | 1.65% | 1.57% |
A Class | 2.00% | 1.92% |
C Class | 2.00% | 1.92% |
R Class | 2.00% | 1.92% |
R6 Class | 1.65% | 1.57% |
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 April 30, 2017 are detailed in the Statement of Operations.
Directors' Fees and Expenses — The Board of Directors is responsible for overseeing the investment advisor’s management and operations of the fund. The directors receive detailed information about the fund and its investment advisor regularly throughout the year, and meet at least quarterly with management of the investment advisor to review reports about fund operations. The fund’s officers do not receive compensation from the fund.
Acquired Fund Fees and Expenses — The fund may invest in mutual funds, exchange-traded funds, and business development companies (the acquired funds). The fund will indirectly realize its pro rata share of the fees and expenses of the acquired funds in which it invests. These indirect fees and expenses are not paid out of the fund's assets but are reflected in the return realized by the fund on its investment in the acquired funds.
4. Investment Transactions
Purchases of investment securities and securities sold short, excluding short-term investments, for the period ended April 30, 2017 totaled $145,648,631, of which $6,360,547 represented U.S. Treasury and Government Agency obligations.
Sales of investment securities and securities sold short, excluding short-term investments, for the period ended April 30, 2017 totaled $31,381,927, of which $991,406 represented U.S. Treasury and Government Agency obligations.
Transactions in written options contracts during the period ended April 30, 2017 were as follows:
Outstanding, Beginning of Period | Written | Closed | Exercised | Expired | Outstanding, End of Period | ||||||||||||
Number of Contracts | 1,044 | 693 | — | (276 | ) | (768 | ) | 693 | |||||||||
Premiums Received | $ | 86,868 | $ | 61,415 | — | $ | (29,440 | ) | $ | (57,428 | ) | $ | 61,415 |
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5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended April 30, 2017(1) | Year ended October 31, 2016 | |||||||||
Shares | Amount | Shares | Amount | |||||||
Investor Class/Shares Authorized | 80,000,000 | 100,000,000 | ||||||||
Sold | 11,393,915 | $ | 109,403,777 | 3,292,955 | $ | 31,071,814 | ||||
Issued in reinvestment of distributions | 81,398 | 779,536 | 104,730 | 976,510 | ||||||
Redeemed | (2,637,099 | ) | (25,484,248 | ) | (1,304,988 | ) | (12,393,227 | ) | ||
8,838,214 | 84,699,065 | 2,092,697 | 19,655,097 | |||||||
I Class/Shares Authorized | 50,000,000 | 80,000,000 | ||||||||
Sold | 848,625 | 8,147,775 | 223,611 | 2,118,179 | ||||||
Issued in reinvestment of distributions | 10,816 | 103,576 | 25,141 | 234,250 | ||||||
Redeemed | (43,086 | ) | (415,537 | ) | (98,834 | ) | (946,715 | ) | ||
816,355 | 7,835,814 | 149,918 | 1,405,714 | |||||||
Y Class/Shares Authorized | 50,000,000 | N/A | ||||||||
Sold | 516 | 5,000 | ||||||||
A Class/Shares Authorized | 35,000,000 | 40,000,000 | ||||||||
Sold | 3,094,692 | 29,745,241 | 1,296,924 | 12,305,538 | ||||||
Issued in reinvestment of distributions | 23,292 | 223,161 | 41,367 | 385,742 | ||||||
Redeemed | (220,010 | ) | (2,117,342 | ) | (201,729 | ) | (1,924,374 | ) | ||
2,897,974 | 27,851,060 | 1,136,562 | 10,766,906 | |||||||
C Class/Shares Authorized | 35,000,000 | 40,000,000 | ||||||||
Sold | 923,339 | 8,836,119 | 407,147 | 3,836,114 | ||||||
Issued in reinvestment of distributions | 4,955 | 47,201 | 31,818 | 295,025 | ||||||
Redeemed | (17,632 | ) | (168,708 | ) | (164,912 | ) | (1,564,736 | ) | ||
910,662 | 8,714,612 | 274,053 | 2,566,403 | |||||||
R Class/Shares Authorized | 20,000,000 | 20,000,000 | ||||||||
Sold | 168 | 1,607 | 33,029 | 312,786 | ||||||
Issued in reinvestment of distributions | 1,139 | 10,887 | 6,535 | 60,792 | ||||||
Redeemed | (95 | ) | (909 | ) | (32,853 | ) | (313,388 | ) | ||
1,212 | 11,585 | 6,711 | 60,190 | |||||||
R6 Class/Shares Authorized | 30,000,000 | 30,000,000 | ||||||||
Sold | — | — | 262,927 | 2,495,176 | ||||||
Issued in reinvestment of distributions | 4,288 | 41,034 | 8,336 | 77,674 | ||||||
Redeemed | — | — | (32,966 | ) | (316,108 | ) | ||||
4,288 | 41,034 | 238,297 | 2,256,742 | |||||||
Net increase (decrease) | 13,469,221 | $ | 129,158,170 | 3,898,238 | $ | 36,711,052 |
(1) | April 10, 2017 (commencement of sale) through April 30, 2017 for the Y Class. |
6. Fair Value Measurements
The fund’s investments valuation process is based on several considerations and may use multiple inputs to determine the fair value of the investments held by the fund. In conformity with accounting principles generally accepted in the United States of America, the inputs used to determine a valuation are classified into three broad levels.
• | Level 1 valuation inputs consist of unadjusted quoted prices in an active market for identical investments. |
• | Level 2 valuation inputs consist of direct or indirect observable market data (including quoted prices for comparable investments, evaluations of subsequent market events, interest rates, prepayment speeds, credit risk, etc.). These inputs also consist of quoted prices for identical investments initially expressed in local currencies that are adjusted through translation into U.S. dollars. |
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• | Level 3 valuation inputs consist of unobservable data (including a fund’s own assumptions). |
The level classification is based on the lowest level input that is significant to the fair valuation measurement. The valuation inputs are not necessarily an indication of the risks associated with investing in these securities or other financial instruments. There were no significant transfers between levels during the period.
The following is a summary of the level classifications as of period end. The Schedule of Investments provides additional information on the fund’s portfolio holdings.
Level 1 | Level 2 | Level 3 | ||||||
Assets | ||||||||
Investment Securities | ||||||||
Asset-Backed Securities | — | $ | 33,074,658 | — | ||||
Common Stocks | $ | 31,735,118 | 24,425 | — | ||||
Bank Loan Obligations | — | 23,549,121 | — | |||||
Collateralized Loan Obligations | — | 22,542,290 | — | |||||
Corporate Bonds | — | 22,413,276 | — | |||||
Exchange-Traded Funds | 15,156,143 | — | — | |||||
Commercial Mortgage-Backed Securities | — | 14,343,996 | — | |||||
Exchange-Traded Notes | 10,919,509 | — | — | |||||
Collateralized Mortgage Obligations | — | 7,946,900 | — | |||||
U.S. Treasury Securities | — | 5,617,846 | — | |||||
Purchased Options Contracts | 28,969 | — | — | |||||
Temporary Cash Investments | 31,821,937 | — | — | |||||
$ | 89,661,676 | $ | 129,512,512 | — | ||||
Other Financial Instruments | ||||||||
Futures Contracts | $ | 207,608 | — | — | ||||
Swap Agreements | — | $ | 193,308 | — | ||||
$ | 207,608 | $ | 193,308 | — | ||||
Liabilities | ||||||||
Securities Sold Short | ||||||||
Corporate Bonds | — | $ | 138,464 | — | ||||
Other Financial Instruments | ||||||||
Futures Contracts | $ | 304,008 | $ | 35,117 | — | |||
Forward Foreign Currency Exchange Contracts | — | 9,804 | — | |||||
Written Options Contracts | 56,942 | — | — | |||||
$ | 360,950 | $ | 44,921 | — |
7. Derivative Instruments
Credit Risk — The fund is subject to credit risk in the normal course of pursuing its investment objectives. The value of a bond generally declines as the credit quality of its issuer declines. Credit default swap agreements enable a fund to buy/sell protection against a credit event of a specific issuer or index. A fund may attempt to enhance returns by selling protection or attempt to mitigate credit risk by buying protection. The buyer/seller of credit protection against a security or basket of securities may pay/receive an up-front or periodic payment to compensate for/against potential default events. Changes in value, including the periodic amounts of interest to be paid or received on swap agreements, are recorded as unrealized appreciation (depreciation) on swap agreements. Upon entering into a centrally cleared swap, a fund is required to deposit cash or securities (initial margin) with a financial intermediary in an amount equal to a certain percentage of the notional amount. Subsequent payments (variation margin) are made or received daily, in cash, by a fund. The variation margin is equal to the daily change in the value and is a component of unrealized gains and losses. Realized gain or loss is recorded upon receipt or payment of a periodic settlement or termination of swap agreements. Net realized and unrealized gains or losses occurring during the holding period of swap agreements are a component of net realized gain (loss) on swap agreement transactions and change in net unrealized appreciation (depreciation) on swap agreements, respectively. The risks of entering into swap
32
agreements include the possible lack of liquidity, failure of the counterparty to meet its obligations, and that there may be unfavorable changes in the underlying investments or instruments. The fund's average notional amount held during the period was $3,813,404.
Equity Price Risk — The fund is subject to equity price risk in the normal course of pursuing its investment objectives. A fund may enter into futures contracts or option contracts based on an equity index or specific security in order to manage its exposure to changes in market conditions. The risks of entering into equity price risk derivative instruments include the possible lack of liquidity, failure of the counterparty to meet its obligations, and that there may be unfavorable changes in the underlying investments or instruments.
A fund may purchase or write an option contract to protect against declines in market value on the underlying index or security. A purchased option contract provides the fund a right, but not an obligation, to buy (call) or sell (put) an equity-related asset at a specified exercise price within a certain period or on a specific date. A written option contract holds the corresponding obligation to sell (call writing) or buy (put writing) the underlying equity-related asset if the purchaser exercises the option contract. The buyer pays the seller an initial purchase price (premium) for this right. Option contracts purchased by a fund are accounted for in the same manner as marketable portfolio securities. The premium received by a fund for option contracts written is recorded as a liability and valued daily. The proceeds from securities sold through the exercise of option contracts are decreased by the premium paid to purchase the option contracts. A fund may recognize a realized gain or loss when the option contract is closed, exercised or expires. Net realized and unrealized gains or losses occurring during the holding period of purchased options contracts are a component of net realized gain (loss) on investment transactions and change in net unrealized appreciation (depreciation) on investments, respectively. Net realized and unrealized gains or losses occurring during the holding period of written options contracts are a component of net realized gain (loss) on written options contract transactions and change in net unrealized appreciation (depreciation) on written options contracts, respectively. The fund’s average exposure to these equity price risk derivative instruments during the period was 173 purchased options contracts and 539 written options contracts.
A fund may purchase futures contracts to gain exposure to increases in market value or sell futures contracts to protect against a decline in market value. Upon entering into a futures contract, a fund is required to deposit either cash or securities in an amount equal to a certain percentage of the contract value (initial margin). Subsequent payments (variation margin) are made or received daily, in cash, by a fund. The variation margin is equal to the daily change in the contract value and is recorded as unrealized gains and losses. A fund recognizes a realized gain or loss when the contract is closed or expires. Net realized and unrealized gains or
losses occurring during the holding period of futures contracts are a component of net realized gain (loss) on futures contract transactions and change in net unrealized appreciation (depreciation) on futures contracts, respectively. The fund's average exposure to these equity price risk derivative instruments during the period was 300 futures contracts.
Foreign Currency Risk — The fund is subject to foreign currency exchange rate risk in the normal course of
pursuing its investment objectives. The value of foreign investments held by a fund may be significantly
affected by changes in foreign currency exchange rates. The dollar value of a foreign security generally
decreases when the value of the dollar rises against the foreign currency in which the security is denominated
and tends to increase when the value of the dollar declines against such foreign currency. A fund may enter
into forward foreign currency exchange contracts to reduce a fund's exposure to foreign currency exchange
rate fluctuations or to gain exposure to the fluctuations in the value of foreign currencies. The net U.S. dollar
value of foreign currency underlying all contractual commitments held by a fund and the resulting unrealized
appreciation or depreciation are determined daily. Realized gain or loss is recorded upon the termination of
the contract. Net realized and unrealized gains or losses occurring during the holding period of forward foreign
currency exchange contracts are a component of net realized gain (loss) on foreign currency transactions and
change in net unrealized appreciation (depreciation) on translation of assets and liabilities in foreign
currencies, respectively. A fund bears the risk of an unfavorable change in the foreign currency exchange rate
underlying the forward contract. Additionally, losses, up to the fair value, may arise if the counterparties do not
perform under the contract terms. The fund's average U.S. dollar exposure to foreign currency risk derivative
instruments held during the period was $1,007,195.
Interest Rate Risk — The fund is subject to interest rate risk in the normal course of pursuing its investment objectives. The value of bonds generally declines as interest rates rise. A fund may enter into futures contracts based on a bond index or a specific underlying security. A fund may purchase futures contracts to gain exposure to increases in market value or sell futures contracts to protect against a decline in market value. Upon entering into a futures contract, a fund will segregate cash, cash equivalents or other appropriate liquid securities on its records in amounts sufficient to meet requirements. Subsequent payments (variation margin) are made or received daily, in cash, by a fund. The variation margin is equal to the daily change in the contract
33
value and is recorded as unrealized gains and losses. A fund recognizes a realized gain or loss when the futures contract is closed or expires. Net realized and unrealized gains or losses occurring during the holding period of futures contracts are a component of net realized gain (loss) on futures contract transactions and change in net unrealized appreciation (depreciation) on futures contracts, respectively. One of the risks of entering into futures contracts is the possibility that the change in value of the contract may not correlate with the changes in value of the underlying securities. The fund's average exposure to interest rate risk derivative instruments held during the period was 35 contracts.
Value of Derivative Instruments as of April 30, 2017
Asset Derivatives | Liability Derivatives | |||||||
Type of Risk Exposure | Location on Statement of Assets and Liabilities | Value | Location on Statement of Assets and Liabilities | Value | ||||
Credit Risk | Receivable for variation margin on swap agreements* | $ | 1,047 | Payable for variation margin on swap agreements* | — | |||
Equity Price Risk | Investment securities | 28,969 | Investment securities | — | ||||
Equity Price Risk | Receivable for variation margin on futures contracts * | 25,980 | Payable for variation margin on futures contracts * | — | ||||
Equity Price Risk | Written options contracts | — | Written options contracts | $ | 56,942 | |||
Foreign Currency Risk | Unrealized appreciation on forward foreign currency exchange contracts | — | Unrealized depreciation on forward foreign currency exchange contracts | 9,804 | ||||
Interest Rate Risk | Receivable for variation margin on futures contracts* | 9,197 | Payable for variation margin on futures contracts* | — | ||||
$ | 65,193 | $ | 66,746 |
* Included in the unrealized appreciation (depreciation) on centrally cleared credit default swap agreements or futures contracts, as applicable, as reported in the Schedule of Investments.
Effect of Derivative Instruments on the Statement of Operations for the Six Months Ended April 30, 2017
Net Realized Gain (Loss) | Change in Net Unrealized Appreciation (Depreciation) | |||||||
Type of Risk Exposure | Location on Statement of Operations | Value | Location on Statement of Operations | Value | ||||
Credit Risk | Net realized gain (loss) on swap agreement transactions | $ | 82,445 | Change in net unrealized appreciation (depreciation) on swap agreements | $ | 37,755 | ||
Equity Price Risk | Net realized gain (loss) on futures contract transactions | (120,269 | ) | Change in net unrealized appreciation (depreciation) on futures contracts | (120,662 | ) | ||
Equity Price Risk | Net realized gain (loss) on investment transactions | (51,371 | ) | Change in net unrealized appreciation (depreciation) on investments | (4,220 | ) | ||
Equity Price Risk | Net realized gain (loss) on written options contract transactions | 57,428 | Change in net unrealized appreciation (depreciation) on written options contracts | (43,081 | ) | |||
Foreign Currency Risk | Net realized gain (loss) on foreign currency transactions | (6,283 | ) | Change in net unrealized appreciation (depreciation) on translation of assets and liabilities in foreign currencies | (7,693 | ) | ||
Interest Rate Risk | Net realized gain (loss) on futures contract transactions | (5,220 | ) | Change in net unrealized appreciation (depreciation) on futures contracts | (93,955 | ) | ||
$ | (43,270 | ) | $ | (231,856 | ) |
8. Risk Factors
ACIM utilizes multiple subadvisors to manage the fund’s assets, each employing its own particular investment strategy. Multi-manager strategies can increase the fund's portfolio turnover rate, which could result in higher levels of realized capital gains or losses, higher brokerage commissions and other transaction costs.
34
The fund’s investments in secured and unsecured participations in bank loan obligations and assignments of such loans may create substantial risk. The market for bank loans may not be highly liquid and the fund may have difficulty selling them. The fund’s bank loan investments typically will result in the fund having a contractual relationship only with the lender, not with the borrower. In connection with purchasing loan participations, the fund generally will have no right to enforce compliance by borrowers with loan terms nor any set off rights, and the fund may not benefit directly from any posted collateral. As a result, the fund may be subject to the credit risk of both the borrower and the lender selling the participation.
The fund may invest in collateralized debt obligations, collateralized loan obligations and other related instruments. Collateralized debt obligations are subject to credit, interest rate, valuation, and prepayment and extension risks. These securities also are subject to risk of default on the underlying asset, particularly during periods of economic downturn.
The fund may invest in foreign securities, which are generally riskier than U.S. securities. As a result the fund may be subject to foreign risk, meaning that political events (such as civil unrest, national elections and imposition of exchange controls), social and economic events (such as labor strikes and rising inflation), and natural disasters occurring in a country where the fund invests could cause the fund’s investments in that country to experience losses. For these and other reasons, securities of foreign issuers may be less liquid and more volatile. Investing in securities of companies located in emerging market countries generally is riskier than investing in securities of companies located in foreign developed countries.
Issuers of high-yield securities (also known as “junk bonds”) are more vulnerable to real or perceived economic changes (such as an economic downturn or a prolonged period of rising interest rates), political changes or adverse developments specific to an issuer. These factors may be more likely to cause an issuer of low quality bonds to default on its obligations.
The fund may also be subject to liquidity risk. During periods of market turbulence or unusually low trading activity, in order to meet redemptions it may be necessary for the fund to sell securities at prices that could have an adverse effect on the fund’s share price.
Mortgage-related and other asset-backed securities are subject to additional risks including prepayment and extension risk. Mortgage-backed securities offered by non-governmental issuers are subject to specific risks, such as the failure of private insurers to meet their obligations and unexpectedly high rates of default on the mortgages backing the securities. Other asset-backed securities are subject to risks similar to those associated with mortgage-backed securities, as well as risks associated with the nature and servicing of the assets underlying the securities. Asset-backed securities may not have the benefit of a security interest in
collateral comparable to that of mortgage assets, resulting in additional credit risk.
9. Federal Tax Information
The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
As of period end, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $ | 215,727,368 | |
Gross tax appreciation of investments | $ | 4,509,214 | |
Gross tax depreciation of investments | (1,062,394 | ) | |
Net tax appreciation (depreciation) of investments | $ | 3,446,820 | |
Net tax appreciation (depreciation) on securities sold short | (10,838 | ) | |
Net tax appreciation (depreciation) | $ | 3,435,982 |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales.
As of October 31, 2016, the fund had accumulated short-term capital losses of $(2,277,603) and accumulated long-term capital losses of $(137,267), which represent net capital loss carryovers that may be used to offset future realized capital gains for federal income tax purposes. The capital loss carryovers may be carried forward for an unlimited period. Future capital loss carryover utilization in any given year may be subject to Internal Revenue Code limitations.
35
10. Recently Issued Accounting Guidance
In October 2016, the Securities and Exchange Commission adopted new rules and forms as well as amendments to its rules and forms to modernize the reporting and disclosure of information by registered investment companies. The amendments to Regulation S-X will require standardized, enhanced disclosure about derivatives in investment company financial statements, as well as other provisions. Compliance with the amendments is effective on August 1, 2017. Management is currently evaluating the impact that adopting the amendments will have on the financial statement disclosures.
36
Financial Highlights |
For a Share Outstanding Throughout the Years Ended October 31 (except as noted) | |||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||
Income From Investment Operations: | Ratio to Average Net Assets of: | ||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Distributions From Net Investment Income | Net Asset Value, End of Period | Total Return(2) | Operating Expenses(3) | Operating Expenses (before expense waiver)(3) | Net Investment Income (Loss) | Net Investment Income (Loss) (before expense waiver) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
Investor Class | |||||||||||||||
2017(4) | $9.48 | 0.09 | 0.24 | 0.33 | (0.08) | $9.73 | 3.46% | 1.93%(5) | 2.01%(5) | 1.94%(5) | 1.86%(5) | 23% | $128,521 | ||
2016 | $9.61 | 0.24 | 0.04 | 0.28 | (0.41) | $9.48 | 3.03% | 2.00% | 2.01% | 2.57% | 2.56% | 98% | $41,447 | ||
2015(6) | $10.00 | 0.10 | (0.49) | (0.39) | — | $9.61 | (3.90)% | 2.00%(5) | 2.00%(5) | 2.55%(5) | 2.55%(5) | 23% | $21,898 | ||
I Class(7) | |||||||||||||||
2017(4) | $9.48 | 0.10 | 0.24 | 0.34 | (0.09) | $9.73 | 3.56% | 1.73%(5) | 1.81%(5) | 2.14%(5) | 2.06%(5) | 23% | $15,244 | ||
2016 | $9.61 | 0.26 | 0.05 | 0.31 | (0.44) | $9.48 | 3.19% | 1.80% | 1.81% | 2.77% | 2.76% | 98% | $7,111 | ||
2015(6) | $10.00 | 0.11 | (0.50) | (0.39) | — | $9.61 | (3.80)% | 1.80%(5) | 1.80%(5) | 2.75%(5) | 2.75%(5) | 23% | $5,769 | ||
Y Class | |||||||||||||||
2017(8) | $9.69 | 0.01 | 0.03 | 0.04 | — | $9.73 | 0.41% | 1.58%(5) | 1.66%(5) | 1.61%(5) | 1.53%(5) | 23%(9) | $5 | ||
A Class | |||||||||||||||
2017(4) | $9.48 | 0.08 | 0.23 | 0.31 | (0.06) | $9.73 | 3.33% | 2.18%(5) | 2.26%(5) | 1.69%(5) | 1.61%(5) | 23% | $49,059 | ||
2016 | $9.60 | 0.22 | 0.04 | 0.26 | (0.38) | $9.48 | 2.80% | 2.25% | 2.26% | 2.32% | 2.31% | 98% | $20,328 | ||
2015(6) | $10.00 | 0.09 | (0.49) | (0.40) | — | $9.60 | (4.00)% | 2.25%(5) | 2.25%(5) | 2.30%(5) | 2.30%(5) | 23% | $9,673 |
For a Share Outstanding Throughout the Years Ended October 31 (except as noted) | |||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||
Income From Investment Operations: | Ratio to Average Net Assets of: | ||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Distributions From Net Investment Income | Net Asset Value, End of Period | Total Return(2) | Operating Expenses(3) | Operating Expenses (before expense waiver)(3) | Net Investment Income (Loss) | Net Investment Income (Loss) (before expense waiver) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
C Class | |||||||||||||||
2017(4) | $9.43 | 0.04 | 0.24 | 0.28 | (0.03) | $9.68 | 2.96% | 2.93%(5) | 3.01%(5) | 0.94%(5) | 0.86%(5) | 23% | $21,261 | ||
2016 | $9.57 | 0.14 | 0.05 | 0.19 | (0.33) | $9.43 | 2.03% | 3.00% | 3.01% | 1.57% | 1.56% | 98% | $12,129 | ||
2015(6) | $10.00 | 0.06 | (0.49) | (0.43) | — | $9.57 | (4.30)% | 3.00%(5) | 3.00%(5) | 1.55%(5) | 1.55%(5) | 23% | $9,687 | ||
R Class | |||||||||||||||
2017(4) | $9.46 | 0.07 | 0.23 | 0.30 | (0.05) | $9.71 | 3.21% | 2.43%(5) | 2.51%(5) | 1.44%(5) | 1.36%(5) | 23% | $2,019 | ||
2016 | $9.59 | 0.19 | 0.04 | 0.23 | (0.36) | $9.46 | 2.50% | 2.50% | 2.51% | 2.07% | 2.06% | 98% | $1,956 | ||
2015(6) | $10.00 | 0.08 | (0.49) | (0.41) | — | $9.59 | (4.10)% | 2.50%(5) | 2.50%(5) | 2.05%(5) | 2.05%(5) | 23% | $1,917 | ||
R6 Class | |||||||||||||||
2017(4) | $9.48 | 0.11 | 0.23 | 0.34 | (0.09) | $9.73 | 3.64% | 1.58%(5) | 1.66%(5) | 2.29%(5) | 2.21%(5) | 23% | $4,308 | ||
2016 | $9.62 | 0.27 | 0.04 | 0.31 | (0.45) | $9.48 | 3.39% | 1.65% | 1.66% | 2.92% | 2.91% | 98% | $4,157 | ||
2015(6) | $10.00 | 0.12 | (0.50) | (0.38) | — | $9.62 | (3.80)% | 1.65%(5) | 1.65%(5) | 2.90%(5) | 2.90%(5) | 23% | $1,924 |
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) | Ratio of operating expenses to average net assets does not include any fees and expenses of the acquired funds. |
(4) | Six months ended April 30, 2017 (unaudited). |
(5) | Annualized. |
(6) | May 29, 2015 (fund inception) through October 31, 2015. |
(7) | Prior to April 10, 2017, the I Class was referred to as the Institutional Class. |
(8) | April 10, 2017 (commencement of sale) through April 30, 2017 (unaudited). |
(9) | Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the six months ended April 30, 2017. |
See Notes to Financial Statements.
Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain IRAs are subject to federal income tax withholding, unless you elect not to have withholding apply. Tax will be withheld on the total amount withdrawn even though you may be receiving amounts that are not subject to withholding, such as nondeductible contributions. In such case, excess amounts of withholding could occur. You may adjust your withholding election so that a greater or lesser amount will be withheld.
If you don’t want us to withhold on this amount, you must notify us to not withhold the federal income tax. You may notify us in writing or in certain situations by telephone or through other electronic means. For systematic withdrawals, your withholding election will remain in effect until revoked or changed by filing a new election. You have the right to revoke your election at any time.
Remember, even if you elect not to have income tax withheld, you are liable for paying income tax on the taxable portion of your withdrawal. If you elect not to have income tax withheld or you don’t have enough income tax withheld, you may be responsible for payment of estimated tax. You may incur penalties under the estimated tax rules if your withholding and estimated tax payments are not sufficient. You can reduce or defer the income tax on a distribution by directly or indirectly rolling such distribution over to another IRA or eligible plan. You should consult your tax advisor for additional information.
State tax will be withheld if, at the time of your distribution, your address is within one of the mandatory withholding states and you have federal income tax withheld (or as otherwise required by state law). State taxes will be withheld from your distribution in accordance with the respective state rules.
Distributions you receive from 403(b), 457 and qualified plans are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
A description of the policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund is available without charge, upon request, by calling 1-800-345-2021. It is also available on the "About Us" page of American Century Investments’ website at americancentury.com and on the Securities and Exchange Commission’s website at sec.gov. Information regarding how the investment advisor voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the "About Us" page at americancentury.com. It is also available at sec.gov.
Quarterly Portfolio Disclosure
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-Q. The fund’s Forms N-Q are available on the SEC’s website at sec.gov, and may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The fund also makes its complete schedule of portfolio holdings for the most recent quarter of its fiscal year available on its website at americancentury.com and, upon request, by calling 1-800-345-2021.
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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 Capital Portfolios, Inc. | ||
Investment Advisor: American Century Investment Management, Inc. Kansas City, Missouri | ||
This report and the statements it contains are submitted for the general information of our shareholders. The report is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus. | ||
©2017 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-92370 1706 |
SEMIANNUAL REPORT | |
APRIL 30, 2017 | |
AC Alternatives® Long Short Fund
Table of Contents |
Any opinions expressed in this report reflect those of the author as of the date of the report, and do not necessarily represent the opinions of American Century Investments® or any other person in the American Century Investments organization. Any such opinions are subject to change at any time based upon market or other conditions and American Century Investments disclaims any responsibility to update such opinions. These opinions may not be relied upon as investment advice and, because investment decisions made by American Century Investments funds are based on numerous factors, may not be relied upon as an indication of trading intent on behalf of any American Century Investments fund. Security examples are used for representational purposes only and are not intended as recommendations to purchase or sell securities. Performance information for comparative indices and securities is provided to American Century Investments by third party vendors. To the best of American Century Investments’ knowledge, such information is accurate at the time of printing.
President’s Letter |
Jonathan Thomas
Dear Investor:
Thank you for reviewing this semiannual report for the period ended April 30, 2017. It provides a market overview (below), followed by a schedule of fund investments and other financial information. For additional commentary and information on fund performance, plus other investment insights, we encourage you to visit our website, americancentury.com.
“Trump Trade” Triggered Surges in U.S. Stock Prices and Treasury Yields
Especially in the U.S., the signature events of the six-month period were Donald Trump’s victory in the U.S. presidential election in November and the resulting “Trump Trade.” President Trump’s aggressive pro-growth fiscal policy agenda triggered risk-on rallies in higher-risk assets such as stocks and high-yield corporate bonds that produced double-digit gains for many broad U.S. and global/non-U.S. equity indices. For example, the S&P 500 Index and the MSCI EAFE Index gained 13.32% and 11.47%, respectively. In the U.S., growth and small-cap equity indices generally outperformed their value and large-cap counterparts.
The Trump Trade and improving global economic conditions also drove government bond yields higher, and boosted the value of the U.S. dollar against other currencies. This caused most bond indices to decline during the period, except those representing emerging market and corporate debt, which benefited from investors’ continuing search for more yield than what’s available in government bonds. Also, higher-yielding and corporate bonds are perceived as less price change-sensitive to rising interest rates.
Yields rose for short- and long-maturity U.S. Treasuries as the Federal Reserve raised its interest rate target twice during the reporting period, and suggested that it might raise rates again and start gradually reducing its balance sheet by the end of 2017. These factors, plus rising inflation, could trigger more bouts of U.S. bond market volatility. Meanwhile, the Trump Trade could prove to be double-edged—its momentum faded as health care and tax reform enactment faced delays. This, along with ongoing questions about the Trump administration’s practices, policies, and alliances, could impede further risk-on sentiment. In this unsettled environment, we believe in remaining focused on investment goals, using disciplined, actively managed, risk-aware strategies. We appreciate your continued trust in us.
Sincerely,
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
2
Fund Characteristics |
APRIL 30, 2017 | |
Types of Investments in Portfolio | % of net assets |
Common Stocks | 76.7% |
Participatory Notes | 2.8% |
Exchange-Traded Funds | 2.6% |
Exchange-Traded Funds Sold Short | (13.1)% |
Common Stocks Sold Short | (8.5)% |
Temporary Cash Investments | 13.5% |
Other Assets and Liabilities | 26.0%* |
*Amount relates primarily to deposits for securities sold short and derivative instruments.
3
Shareholder Fee Example |
Fund shareholders may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption/exchange fees; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in your fund and to compare these costs with the ongoing cost of investing in other mutual funds.
The example is based on an investment of $1,000 made at the beginning of the period and held for the entire period from November 1, 2016 to April 30, 2017 (except as noted).
Actual Expenses
The table provides information about actual account values and actual expenses for each class. You may use the information, together with the amount you invested, to estimate the expenses that you paid over the period. First, identify the share class you own. Then simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
If you hold Investor Class shares of any American Century Investments fund, or I Class shares of the American Century Diversified Bond Fund, in an American Century Investments account (i.e., not a financial intermediary or retirement plan account), American Century Investments may charge you a $12.50 semiannual account maintenance fee if the value of those shares is less than $10,000. We will redeem shares automatically in one of your accounts to pay the $12.50 fee. In determining your total eligible investment amount, we will include your investments in all personal accounts (including American Century Investments Brokerage accounts) registered under your Social Security number. Personal accounts include individual accounts, joint accounts, UGMA/UTMA accounts, personal trusts, Coverdell Education Savings Accounts and IRAs (including traditional, Roth, Rollover, SEP-, SARSEP- and SIMPLE-IRAs), and certain other retirement accounts. If you have only business, business retirement, employer-sponsored or American Century Investments Brokerage accounts, you are currently not subject to this fee. If you are subject to the Account Maintenance Fee, your account value could be reduced by the fee amount.
Hypothetical Example for Comparison Purposes
The table also provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio of each class of your fund and an assumed rate of return of 5% per year before expenses, which is not the actual return of a fund’s share class. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) or redemption/exchange fees. Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
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Beginning Account Value 11/1/16 | Ending Account Value 4/30/17 | Expenses Paid During Period(1) 11/1/16 - 4/30/17 | Annualized Expense Ratio(1) | |
Actual | ||||
Investor Class | $1,000 | $1,056.70 | $14.58 | 2.86% |
I Class | $1,000 | $1,058.60 | $13.58 | 2.66% |
Y Class | $1,000 | $1,008.50(2) | $1.26(3) | 2.18% |
A Class | $1,000 | $1,055.90 | $15.85 | 3.11% |
C Class | $1,000 | $1,052.20 | $19.64 | 3.86% |
R Class | $1,000 | $1,055.00 | $17.12 | 3.36% |
R6 Class | $1,000 | $1,058.50 | $12.81 | 2.51% |
Hypothetical | ||||
Investor Class | $1,000 | $1,010.61 | $14.26 | 2.86% |
I Class | $1,000 | $1,011.60 | $13.27 | 2.66% |
Y Class | $1,000 | $1,013.98(4) | $10.89(4) | 2.18% |
A Class | $1,000 | $1,009.37 | $15.49 | 3.11% |
C Class | $1,000 | $1,005.65 | $19.20 | 3.86% |
R Class | $1,000 | $1,008.13 | $16.73 | 3.36% |
R6 Class | $1,000 | $1,012.35 | $12.52 | 2.51% |
(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 181, the number of days in the most recent fiscal half-year, divided by 365, to reflect the one-half year period. |
(2) | Ending account value based on actual return from April 10, 2017 (commencement of sale) through April 30, 2017. |
(3) | Expenses are equal to the class's annualized expense ratio listed in the table above, multiplied by the average account value over the period, multiplied by 21, the number of days in the period from April 10, 2017 (commencement of sale) through April 30, 2017, divided by 365, to reflect the period. Had the class been available for the full period, the expenses paid during the period would have been higher. |
(4) | Ending account value and expenses paid during the period assumes the class had been available throughout the entire period and are calculated using the class’s annualized expense ratio listed in the table above. |
5
Schedule of Investments |
APRIL 30, 2017 (UNAUDITED)
Shares | Value | ||||
COMMON STOCKS — 76.7% | |||||
Aerospace and Defense — 1.0% | |||||
Airbus SE | 6,087 | $ | 492,187 | ||
Arconic, Inc. | 92 | 2,514 | |||
General Dynamics Corp.(1) | 44 | 8,527 | |||
L3 Technologies, Inc.(1) | 19 | 3,264 | |||
Northrop Grumman Corp.(1) | 29 | 7,133 | |||
Textron, Inc.(1) | 47 | 2,193 | |||
United Technologies Corp. | 172 | 20,466 | |||
536,284 | |||||
Air Freight and Logistics — 1.1% | |||||
FedEx Corp.(1) | 3,302 | 626,389 | |||
Auto Components† | |||||
Adient plc | 10 | 735 | |||
Goodyear Tire & Rubber Co. (The)(1) | 56 | 2,029 | |||
2,764 | |||||
Automobiles — 0.6% | |||||
Daimler AG | 4,287 | 319,416 | |||
Ford Motor Co.(1) | 804 | 9,222 | |||
General Motors Co.(1) | 330 | 11,431 | |||
340,069 | |||||
Banks — 6.6% | |||||
ABN AMRO Group NV CVA | 14,392 | 377,821 | |||
Banco Comercial Portugues SA R Shares(2) | 307,954 | 68,701 | |||
Banco Macro SA ADR(1) | 1,511 | 129,523 | |||
Bank of America Corp. | 27,071 | 631,837 | |||
Bank of the Ozarks, Inc. | 1,327 | 62,993 | |||
BB&T Corp. | 163 | 7,038 | |||
BBVA Banco Frances SA ADR(1) | 4,028 | 73,712 | |||
CIT Group, Inc. | 36 | 1,667 | |||
Citigroup, Inc.(1) | 630 | 37,246 | |||
Citizens Financial Group, Inc.(1) | 66 | 2,423 | |||
Comerica, Inc.(1) | 37 | 2,616 | |||
Erste Group Bank AG | 2,067 | 73,897 | |||
Fifth Third Bancorp(1) | 169 | 4,129 | |||
First Republic Bank(1) | 31 | 2,866 | |||
Grupo Financiero Galicia SA ADR(1) | 3,529 | 137,878 | |||
Huntington Bancshares, Inc.(1) | 169 | 2,173 | |||
ING Groep NV | 25,265 | 411,304 | |||
JPMorgan Chase & Co. | 6,586 | 572,982 | |||
KBC Group NV | 3,521 | 254,212 | |||
KeyCorp(1) | 178 | 3,247 | |||
M&T Bank Corp.(1) | 33 | 5,129 | |||
PNC Financial Services Group, Inc. (The)(1) | 109 | 13,053 | |||
Regions Financial Corp.(1) | 5,211 | 71,651 | |||
Signature Bank(1)(2) | 1,494 | 206,844 | |||
SunTrust Banks, Inc.(1) | 108 | 6,135 |
6
Shares | Value | ||||
U.S. Bancorp | 349 | $ | 17,897 | ||
Wells Fargo & Co.(1) | 8,725 | 469,754 | |||
Western Alliance Bancorp(2) | 1,365 | 65,383 | |||
3,714,111 | |||||
Beverages — 1.0% | |||||
Constellation Brands, Inc., Class A(1) | 906 | 156,321 | |||
Molson Coors Brewing Co., Class B(1) | 4,181 | 400,916 | |||
557,237 | |||||
Biotechnology — 0.1% | |||||
Celgene Corp.(2) | 683 | 84,726 | |||
Building Products† | |||||
Johnson Controls International plc | 89 | 3,700 | |||
Capital Markets — 1.8% | |||||
Affiliated Managers Group, Inc.(1) | 4,175 | 691,338 | |||
Bank of New York Mellon Corp. (The)(1) | 208 | 9,788 | |||
BlackRock, Inc. | 19 | 7,307 | |||
Charles Schwab Corp. (The)(1) | 71 | 2,758 | |||
CME Group, Inc. | 68 | 7,901 | |||
E*TRADE Financial Corp.(1)(2) | 61 | 2,108 | |||
Franklin Resources, Inc.(1) | 81 | 3,492 | |||
Goldman Sachs Group, Inc. (The)(1) | 91 | 20,366 | |||
Intercontinental Exchange, Inc.(1) | 1,685 | 101,437 | |||
Invesco Ltd. | 79 | 2,602 | |||
Morgan Stanley(1) | 324 | 14,052 | |||
Northern Trust Corp.(1) | 49 | 4,410 | |||
OM Asset Management plc | 8,328 | 129,584 | |||
Raymond James Financial, Inc.(1) | 29 | 2,161 | |||
State Street Corp.(1) | 85 | 7,131 | |||
Thomson Reuters Corp. | 71 | 3,226 | |||
1,009,661 | |||||
Chemicals — 3.5% | |||||
Akzo Nobel NV | 4,291 | 375,244 | |||
Celanese Corp., Series A(1) | 31 | 2,698 | |||
Dow Chemical Co. (The)(1) | 201 | 12,623 | |||
E.I. du Pont de Nemours & Co.(1) | 102 | 8,134 | |||
Eastman Chemical Co.(1) | 24 | 1,914 | |||
Ingevity Corp.(2) | 9 | 569 | |||
Lanxess AG | 3,865 | 279,132 | |||
Mosaic Co. (The)(1) | 75 | 2,020 | |||
PPG Industries, Inc. | 1,171 | 128,623 | |||
Sherwin-Williams Co. (The)(1) | 3,413 | 1,142,263 | |||
Valvoline, Inc. | 1,197 | 26,633 | |||
1,979,853 | |||||
Commercial Services and Supplies — 0.6% | |||||
ISS A/S | 6,092 | 252,664 | |||
KAR Auction Services, Inc. | 1,434 | 62,551 | |||
Republic Services, Inc.(1) | 51 | 3,213 | |||
Waste Management, Inc. | 89 | 6,477 | |||
324,905 | |||||
Communications Equipment — 1.4% | |||||
Arista Networks, Inc.(1)(2) | 1,164 | 162,541 |
7
Shares | Value | ||||
ARRIS International plc(2) | 6,700 | $ | 174,133 | ||
Cisco Systems, Inc.(1) | 1,065 | 36,284 | |||
Harris Corp.(1) | 22 | 2,462 | |||
Juniper Networks, Inc.(1) | 7,897 | 237,463 | |||
Oclaro, Inc.(2) | 6,394 | 51,216 | |||
Palo Alto Networks, Inc.(2) | 1,177 | 129,411 | |||
793,510 | |||||
Construction and Engineering — 0.6% | |||||
FLSmidth & Co. A/S | 4,166 | 250,573 | |||
Skanska AB, B Shares | 3,460 | 82,776 | |||
333,349 | |||||
Construction Materials — 0.6% | |||||
Martin Marietta Materials, Inc.(1) | 12 | 2,642 | |||
Vulcan Materials Co.(1) | 2,795 | 337,860 | |||
340,502 | |||||
Consumer Finance — 0.1% | |||||
Ally Financial, Inc. | 95 | 1,881 | |||
American Express Co.(1) | 148 | 11,729 | |||
Capital One Financial Corp.(1) | 116 | 9,324 | |||
Discover Financial Services(1) | 94 | 5,884 | |||
28,818 | |||||
Containers and Packaging† | |||||
WestRock Co. | 49 | 2,624 | |||
Diversified Financial Services — 0.2% | |||||
Berkshire Hathaway, Inc., Class B(2) | 542 | 89,544 | |||
Voya Financial, Inc. | 47 | 1,757 | |||
91,301 | |||||
Diversified Telecommunication Services — 0.7% | |||||
AT&T, Inc. | 1,086 | 43,038 | |||
Cellnex Telecom SA | 11,351 | 200,616 | |||
CenturyLink, Inc.(1) | 120 | 3,080 | |||
Level 3 Communications, Inc.(1)(2) | 56 | 3,403 | |||
Ooma, Inc.(2) | 2,525 | 30,174 | |||
Telecom Argentina SA ADR | 4,745 | 107,522 | |||
Verizon Communications, Inc. | 62 | 2,846 | |||
390,679 | |||||
Electric Utilities — 0.5% | |||||
American Electric Power Co., Inc. | 106 | 7,190 | |||
Duke Energy Corp.(1) | 150 | 12,375 | |||
Edison International(1) | 72 | 5,758 | |||
Entergy Corp.(1) | 40 | 3,050 | |||
Eversource Energy(1) | 69 | 4,099 | |||
Exelon Corp.(1) | 187 | 6,476 | |||
FirstEnergy Corp.(1) | 90 | 2,695 | |||
Pampa Energia SA ADR(2) | 3,888 | 212,051 | |||
PG&E Corp.(1) | 104 | 6,973 | |||
PPL Corp.(1) | 143 | 5,450 | |||
Southern Co. (The)(1) | 195 | 9,711 | |||
Xcel Energy, Inc. | 108 | 4,865 | |||
280,693 |
8
Shares | Value | ||||
Electrical Equipment — 0.8% | |||||
ABB Ltd. | 17,170 | $ | 420,363 | ||
Eaton Corp. plc | 98 | 7,413 | |||
Emerson Electric Co.(1) | 45 | 2,712 | |||
430,488 | |||||
Electronic Equipment, Instruments and Components — 0.5% | |||||
Corning, Inc.(1) | 260 | 7,501 | |||
Flex Ltd.(2) | 17,212 | 266,098 | |||
273,599 | |||||
Energy Equipment and Services — 0.9% | |||||
Baker Hughes, Inc. | 90 | 5,343 | |||
Halliburton Co.(1) | 1,663 | 76,298 | |||
Nabors Industries Ltd. | 10,390 | 107,433 | |||
National Oilwell Varco, Inc.(1) | 82 | 2,868 | |||
Precision Drilling Corp.(2) | 15,371 | 61,144 | |||
SBM Offshore NV | 9,392 | 154,739 | |||
Schlumberger Ltd. | 266 | 19,309 | |||
TechnipFMC plc(2) | 2,406 | 72,493 | |||
Weatherford International plc(2) | 163 | 940 | |||
500,567 | |||||
Equity Real Estate Investment Trusts (REITs) — 0.1% | |||||
AvalonBay Communities, Inc. | 29 | 5,505 | |||
Equity Residential(1) | 77 | 4,973 | |||
Essex Property Trust, Inc.(1) | 14 | 3,422 | |||
GGP, Inc.(1) | 122 | 2,636 | |||
HCP, Inc.(1) | 98 | 3,072 | |||
Host Hotels & Resorts, Inc.(1) | 163 | 2,926 | |||
Kimco Realty Corp.(1) | 87 | 1,765 | |||
Macerich Co. (The)(1) | 32 | 1,998 | |||
Prologis, Inc.(1) | 111 | 6,039 | |||
Quality Care Properties, Inc.(2) | 20 | 347 | |||
Realty Income Corp.(1) | 51 | 2,976 | |||
SL Green Realty Corp.(1) | 20 | 2,099 | |||
UDR, Inc. | 55 | 2,054 | |||
Ventas, Inc. | 71 | 4,545 | |||
Vornado Realty Trust | 40 | 3,850 | |||
Welltower, Inc. | 42 | 3,000 | |||
Weyerhaeuser Co. | 94 | 3,184 | |||
54,391 | |||||
Food and Staples Retailing — 0.1% | |||||
CVS Health Corp. | 18 | 1,484 | |||
Sysco Corp. | 86 | 4,547 | |||
Wal-Mart Stores, Inc. | 318 | 23,907 | |||
Walgreens Boots Alliance, Inc. | 150 | 12,981 | |||
42,919 | |||||
Food Products — 1.2% | |||||
Adecoagro SA(2) | 8,752 | 97,060 | |||
Archer-Daniels-Midland Co. | 135 | 6,176 | |||
Bunge Ltd. | 31 | 2,450 | |||
Conagra Brands, Inc.(1) | 76 | 2,947 | |||
J.M. Smucker Co. (The)(1) | 27 | 3,422 |
9
Shares | Value | ||||
Lamb Weston Holdings, Inc. | 27 | $ | 1,127 | ||
Mondelez International, Inc., Class A(1) | 343 | 15,445 | |||
Nestle SA | 6,721 | 517,754 | |||
Tyson Foods, Inc., Class A | 58 | 3,727 | |||
650,108 | |||||
Health Care Equipment and Supplies — 2.6% | |||||
Abbott Laboratories | 331 | 14,445 | |||
Alere, Inc.(2) | 2,200 | 108,174 | |||
Baxter International, Inc. | 41 | 2,283 | |||
Becton Dickinson and Co.(1) | 3,336 | 623,732 | |||
Boston Scientific Corp.(2) | 2,308 | 60,885 | |||
C.R. Bard, Inc. | 1,238 | 380,660 | |||
Danaher Corp.(1) | 101 | 8,416 | |||
Getinge AB, B Shares | 10,522 | 205,634 | |||
Medtronic plc | 297 | 24,678 | |||
Stryker Corp.(1) | 36 | 4,909 | |||
Zimmer Biomet Holdings, Inc. | 34 | 4,068 | |||
1,437,884 | |||||
Health Care Providers and Services — 1.5% | |||||
Aetna, Inc. | 56 | 7,564 | |||
Anthem, Inc. | 45 | 8,005 | |||
DaVita, Inc.(1)(2) | 28 | 1,932 | |||
Express Scripts Holding Co.(1)(2) | 24 | 1,472 | |||
HCA Holdings, Inc.(1)(2) | 61 | 5,137 | |||
Laboratory Corp. of America Holdings(1)(2) | 14 | 1,962 | |||
Quest Diagnostics, Inc.(1) | 31 | 3,271 | |||
UnitedHealth Group, Inc.(1) | 3,391 | 593,018 | |||
Universal Health Services, Inc., Class B | 2,001 | 241,641 | |||
864,002 | |||||
Hotels, Restaurants and Leisure — 1.0% | |||||
Arcos Dorados Holdings, Inc., Class A(1)(2) | 30,399 | 249,272 | |||
Carnival Corp.(1) | 91 | 5,621 | |||
Dunkin' Brands Group, Inc. | 2,316 | 129,372 | |||
McDonald's Corp.(1) | 1,367 | 191,284 | |||
MGM Resorts International(1) | 89 | 2,733 | |||
Royal Caribbean Cruises Ltd. | 37 | 3,944 | |||
582,226 | |||||
Household Durables — 1.5% | |||||
D.R. Horton, Inc. | 5,824 | 191,551 | |||
Sony Corp. | 19,594 | 660,721 | |||
Whirlpool Corp. | 15 | 2,785 | |||
855,057 | |||||
Household Products — 0.8% | |||||
Colgate-Palmolive Co.(1) | 25 | 1,801 | |||
Henkel AG & Co. KGaA Preference Shares | 1,701 | 231,612 | |||
Kimberly-Clark Corp.(1) | 16 | 2,076 | |||
Procter & Gamble Co. (The) | 485 | 42,355 | |||
Svenska Cellulosa AB SCA, B Shares | 4,670 | 154,695 | |||
432,539 | |||||
Industrial Conglomerates — 1.2% | |||||
General Electric Co.(1) | 2,130 | 61,749 |
10
Shares | Value | ||||
Rheinmetall AG | 3,428 | $ | 314,599 | ||
Roper Technologies, Inc.(1) | 13 | 2,843 | |||
Siemens AG | 1,876 | 268,928 | |||
648,119 | |||||
Insurance — 1.0% | |||||
Aflac, Inc. | 91 | 6,814 | |||
Alleghany Corp.(2) | 6 | 3,664 | |||
Allianz SE | 2,203 | 419,472 | |||
Allstate Corp. (The) | 87 | 7,072 | |||
American International Group, Inc. | 277 | 16,872 | |||
Arch Capital Group Ltd.(2) | 28 | 2,715 | |||
Chubb Ltd. | 99 | 13,588 | |||
Cincinnati Financial Corp.(1) | 34 | 2,451 | |||
Everest Re Group Ltd. | 10 | 2,517 | |||
FNF Group(1) | 59 | 2,416 | |||
Hartford Financial Services Group, Inc. (The)(1) | 90 | 4,353 | |||
Lincoln National Corp.(1) | 53 | 3,494 | |||
Loews Corp.(1) | 66 | 3,077 | |||
Markel Corp.(1)(2) | 3 | 2,909 | |||
Marsh & McLennan Cos., Inc.(1) | 47 | 3,484 | |||
MetLife, Inc.(1) | 198 | 10,259 | |||
Principal Financial Group, Inc.(1) | 61 | 3,973 | |||
Progressive Corp. (The)(1) | 122 | 4,846 | |||
Prudential Financial, Inc.(1) | 94 | 10,061 | |||
Torchmark Corp. | 29 | 2,225 | |||
Travelers Cos., Inc. (The) | 67 | 8,151 | |||
Unum Group | 52 | 2,409 | |||
XL Group Ltd. | 66 | 2,762 | |||
539,584 | |||||
Internet and Direct Marketing Retail — 0.6% | |||||
JD.com, Inc. ADR(2) | 7,151 | 250,785 | |||
Priceline Group, Inc. (The)(2) | 40 | 73,873 | |||
324,658 | |||||
Internet Software and Services — 5.6% | |||||
Alibaba Group Holding Ltd. ADR(2) | 4,825 | 557,288 | |||
Alphabet, Inc., Class A(1)(2) | 420 | 388,298 | |||
Alphabet, Inc., Class C(2) | 1,026 | 929,515 | |||
eBay, Inc.(2) | 4,200 | 140,322 | |||
Facebook, Inc., Class A(2) | 1,400 | 210,350 | |||
GoDaddy, Inc., Class A(2) | 400 | 15,568 | |||
MercadoLibre, Inc.(1) | 970 | 222,043 | |||
Okta, Inc.(2) | 522 | 13,598 | |||
Yahoo!, Inc.(1)(2) | 13,943 | 672,192 | |||
3,149,174 | |||||
IT Services — 2.4% | |||||
Amdocs Ltd. | 32 | 1,960 | |||
Automatic Data Processing, Inc. | 20 | 2,090 | |||
Cognizant Technology Solutions Corp., Class A(1)(2) | 5,878 | 354,032 | |||
Conduent, Inc.(2) | 47 | 766 | |||
Convergys Corp. | 2,020 | 45,470 | |||
CSRA, Inc. | 3,849 | 111,929 |
11
Shares | Value | ||||
DXC Technology Co.(2) | 1,985 | $ | 149,550 | ||
Euronet Worldwide, Inc.(2) | 800 | 66,096 | |||
Fidelity National Information Services, Inc. | 733 | 61,711 | |||
International Business Machines Corp.(1) | 85 | 13,625 | |||
Leidos Holdings, Inc. | 134 | 7,056 | |||
Travelport Worldwide Ltd. | 9,498 | 125,089 | |||
Visa, Inc., Class A(1) | 4,600 | 419,612 | |||
1,358,986 | |||||
Leisure Products† | |||||
Mattel, Inc.(1) | 71 | 1,592 | |||
Life Sciences Tools and Services† | |||||
Agilent Technologies, Inc. | 68 | 3,743 | |||
Thermo Fisher Scientific, Inc. | 56 | 9,259 | |||
13,002 | |||||
Machinery — 0.5% | |||||
Caterpillar, Inc.(1) | 106 | 10,840 | |||
Deere & Co.(1) | 59 | 6,585 | |||
Dover Corp.(1) | 33 | 2,603 | |||
Fortive Corp. | 51 | 3,226 | |||
Ingersoll-Rand plc | 52 | 4,615 | |||
Parker-Hannifin Corp.(1) | 16 | 2,573 | |||
Pentair plc | 38 | 2,451 | |||
Sandvik AB | 14,698 | 235,970 | |||
Stanley Black & Decker, Inc.(1) | 30 | 4,084 | |||
272,947 | |||||
Media — 1.7% | |||||
Altice NV(2) | 8,242 | 204,743 | |||
Comcast Corp., Class A(1) | 2,187 | 85,709 | |||
DISH Network Corp., Class A(2) | 2,155 | 138,868 | |||
Liberty Media Corp.-Liberty Braves, Class C(2) | 9 | 221 | |||
Liberty Media Corp.-Liberty Formula One, Class C(2) | 13 | 455 | |||
Liberty Media Corp.-Liberty SiriusXM, Class C(2) | 43 | 1,634 | |||
Time Warner, Inc. | 4,477 | 444,432 | |||
Twenty-First Century Fox, Inc., Class A | 82 | 2,504 | |||
Viacom, Inc., Class B | 600 | 25,536 | |||
World Wrestling Entertainment, Inc., Class A | 1,403 | 30,066 | |||
934,168 | |||||
Metals and Mining — 0.3% | |||||
Alcoa Corp. | 31 | 1,046 | |||
APERAM SA | 1,072 | 53,972 | |||
Freeport-McMoRan, Inc.(1)(2) | 248 | 3,162 | |||
Newmont Mining Corp.(1) | 115 | 3,888 | |||
Nucor Corp.(1) | 66 | 4,048 | |||
Salzgitter AG | 2,313 | 79,303 | |||
145,419 | |||||
Mortgage Real Estate Investment Trusts (REITs)† | |||||
Annaly Capital Management, Inc. | 201 | 2,374 | |||
Multi-Utilities — 0.1% | |||||
Ameren Corp. | 52 | 2,844 | |||
CenterPoint Energy, Inc.(1) | 92 | 2,625 | |||
CMS Energy Corp. | 60 | 2,724 |
12
Shares | Value | ||||
Consolidated Edison, Inc.(1) | 62 | $ | 4,915 | ||
Dominion Resources, Inc.(1) | 122 | 9,446 | |||
DTE Energy Co.(1) | 40 | 4,184 | |||
Public Service Enterprise Group, Inc.(1) | 111 | 4,890 | |||
SCANA Corp.(1) | 31 | 2,056 | |||
Sempra Energy | 52 | 5,877 | |||
WEC Energy Group, Inc. | 68 | 4,115 | |||
43,676 | |||||
Multiline Retail† | |||||
Kohl's Corp.(1) | 43 | 1,678 | |||
Target Corp.(1) | 129 | 7,205 | |||
8,883 | |||||
Oil, Gas and Consumable Fuels — 2.7% | |||||
Anadarko Petroleum Corp. | 110 | 6,272 | |||
Apache Corp. | 82 | 3,988 | |||
California Resources Corp.(2) | 3 | 35 | |||
Cheniere Energy, Inc.(1)(2) | 51 | 2,313 | |||
Chevron Corp. | 396 | 42,253 | |||
Cimarex Energy Co.(1) | 20 | 2,334 | |||
Concho Resources, Inc.(1)(2) | 29 | 3,673 | |||
ConocoPhillips(1) | 2,175 | 104,204 | |||
Devon Energy Corp.(1) | 7,865 | 310,589 | |||
Enbridge, Inc. | 140 | 5,803 | |||
EOG Resources, Inc.(1) | 107 | 9,897 | |||
EQT Corp. | 34 | 1,977 | |||
Exxon Mobil Corp.(1) | 891 | 72,750 | |||
Hess Corp. | 55 | 2,686 | |||
HollyFrontier Corp.(1) | 34 | 957 | |||
Kinder Morgan, Inc.(1) | 377 | 7,778 | |||
Marathon Oil Corp.(1) | 145 | 2,156 | |||
Marathon Petroleum Corp.(1) | 103 | 5,247 | |||
Noble Energy, Inc.(1) | 91 | 2,942 | |||
Occidental Petroleum Corp. | 163 | 10,031 | |||
Parsley Energy, Inc., Class A(1)(2) | 26,985 | 803,883 | |||
Phillips 66(1) | 115 | 9,149 | |||
Pioneer Natural Resources Co.(1) | 32 | 5,536 | |||
Tesoro Corp. | 27 | 2,152 | |||
Valero Energy Corp. | 106 | 6,849 | |||
YPF SA ADR(1) | 4,370 | 112,877 | |||
1,538,331 | |||||
Personal Products — 0.5% | |||||
Coty, Inc., Class A | 335 | 5,980 | |||
Estee Lauder Cos., Inc. (The), Class A | 662 | 57,687 | |||
Unilever NV CVA | 4,506 | 236,314 | |||
299,981 | |||||
Pharmaceuticals — 0.3% | |||||
Allergan plc | 45 | 10,974 | |||
Endo International plc(2) | 31 | 352 | |||
Johnson & Johnson(1) | 508 | 62,723 | |||
Merck & Co., Inc.(1) | 525 | 32,723 | |||
Perrigo Co. plc | 25 | 1,849 |
13
Shares | Value | ||||
Pfizer, Inc. | 1,294 | $ | 43,892 | ||
152,513 | |||||
Professional Services — 0.2% | |||||
Adecco Group AG | 1,646 | 122,251 | |||
Real Estate Management and Development — 0.6% | |||||
Vonovia SE | 9,073 | 328,469 | |||
Road and Rail — 0.4% | |||||
CSX Corp. | 150 | 7,626 | |||
Kansas City Southern | 24 | 2,162 | |||
Norfolk Southern Corp.(1) | 62 | 7,284 | |||
Union Pacific Corp. | 2,102 | 235,340 | |||
252,412 | |||||
Semiconductors and Semiconductor Equipment — 13.0% | |||||
Advanced Energy Industries, Inc.(1)(2) | 106 | 7,823 | |||
Advanced Micro Devices, Inc.(2) | 23,319 | 310,143 | |||
Applied Materials, Inc. | 7,604 | 308,798 | |||
Broadcom Ltd.(1) | 5,213 | 1,151,083 | |||
Cavium, Inc.(1)(2) | 4,070 | 280,219 | |||
Infineon Technologies AG | 13,198 | 273,155 | |||
Inphi Corp.(2) | 2,300 | 95,266 | |||
Integrated Device Technology, Inc.(2) | 9,600 | 230,304 | |||
Intel Corp.(1) | 905 | 32,716 | |||
Lam Research Corp. | 8,713 | 1,262,078 | |||
Lattice Semiconductor Corp.(2) | 35,200 | 241,472 | |||
Maxim Integrated Products, Inc.(1) | 9,029 | 398,630 | |||
Mellanox Technologies Ltd.(2) | 2,000 | 94,400 | |||
Microchip Technology, Inc. | 1,800 | 136,044 | |||
Micron Technology, Inc.(1)(2) | 13,900 | 384,613 | |||
NVIDIA Corp.(1) | 113 | 11,786 | |||
NXP Semiconductors NV(2) | 2,900 | 306,675 | |||
ON Semiconductor Corp.(1)(2) | 11,751 | 166,629 | |||
Qorvo, Inc.(1)(2) | 8,875 | 603,766 | |||
QUALCOMM, Inc. | 321 | 17,251 | |||
Skyworks Solutions, Inc.(1) | 1,700 | 169,558 | |||
Synaptics, Inc.(1)(2) | 7,400 | 405,298 | |||
Teradyne, Inc. | 12,122 | 427,543 | |||
Xilinx, Inc. | 42 | 2,651 | |||
7,317,901 | |||||
Software — 7.1% | |||||
Activision Blizzard, Inc. | 102 | 5,329 | |||
Adobe Systems, Inc.(2) | 200 | 26,748 | |||
CA, Inc. | 65 | 2,134 | |||
Check Point Software Technologies Ltd.(2) | 1,400 | 145,614 | |||
CyberArk Software Ltd.(2) | 1,245 | 65,873 | |||
Dell Technologies, Inc., Class V(2) | 43 | 2,886 | |||
Fortinet, Inc.(1)(2) | 5,100 | 198,900 | |||
Microsoft Corp. | 2,543 | 174,094 | |||
Nuance Communications, Inc.(2) | 37,586 | 672,414 | |||
Oracle Corp. (New York)(1) | 8,963 | 402,976 | |||
PTC, Inc.(2) | 4,455 | 240,793 | |||
salesforce.com, Inc.(2) | 6,665 | 573,990 |
14
Shares | Value | ||||
Software AG | 5,129 | $ | 225,715 | ||
Splunk, Inc.(2) | 1,200 | 77,172 | |||
Symantec Corp. | 142 | 4,491 | |||
Synopsys, Inc.(1)(2) | 7,237 | 533,367 | |||
Tableau Software, Inc., Class A(2) | 800 | 42,944 | |||
TiVo Corp.(1) | 14,259 | 281,615 | |||
Verint Systems, Inc.(1)(2) | 4,972 | 195,400 | |||
VMware, Inc., Class A(1)(2) | 814 | 76,614 | |||
Zynga, Inc., Class A(2) | 11,200 | 32,368 | |||
3,981,437 | |||||
Specialty Retail — 0.6% | |||||
Best Buy Co., Inc. | 66 | 3,420 | |||
CarMax, Inc.(2) | 2,660 | 155,610 | |||
Home Depot, Inc. (The) | 1,233 | 192,471 | |||
Staples, Inc. | 143 | 1,397 | |||
352,898 | |||||
Technology Hardware, Storage and Peripherals — 4.7% | |||||
Apple, Inc.(1) | 5,500 | 790,075 | |||
CPI Card Group, Inc. | 6,600 | 23,760 | |||
Electronics For Imaging, Inc.(1)(2) | 4,123 | 188,751 | |||
Hewlett Packard Enterprise Co.(1) | 7,481 | 139,371 | |||
HP, Inc. | 375 | 7,057 | |||
NetApp, Inc.(1) | 12,447 | 496,013 | |||
Western Digital Corp.(1) | 10,281 | 915,729 | |||
Xerox Corp. | 14,229 | 102,307 | |||
2,663,063 | |||||
Textiles, Apparel and Luxury Goods — 1.3% | |||||
Cie Financiere Richemont SA | 5,017 | 419,260 | |||
PVH Corp.(1) | 18 | 1,818 | |||
Swatch Group AG (The) | 812 | 325,045 | |||
746,123 | |||||
Tobacco† | |||||
Philip Morris International, Inc. | 163 | 18,067 | |||
Water Utilities† | |||||
American Water Works Co., Inc. | 39 | 3,111 | |||
Wireless Telecommunication Services — 0.5% | |||||
T-Mobile US, Inc.(2) | 60 | 4,036 | |||
VEON Ltd. ADR | 70,780 | 292,322 | |||
296,358 | |||||
TOTAL COMMON STOCKS (Cost $37,151,005) | 43,080,452 | ||||
PARTICIPATORY NOTES — 2.8% | |||||
Banks — 1.5% | |||||
Alinma Bank (HSBC Bank plc), 1/22/18(3) | 214,475 | 820,945 | |||
Materials — 1.3% | |||||
Saudi Basic Industries Corp. (Merrill Lynch International & Co. C.V.), 2/12/20(3) | 29,190 | 746,924 | |||
TOTAL PARTICIPATORY NOTES (Cost $1,505,910) | 1,567,869 | ||||
EXCHANGE-TRADED FUNDS — 2.6% | |||||
iShares Global Financials ETF (Cost $1,273,063) | 24,310 | 1,487,043 |
15
Shares | Value | ||||
TEMPORARY CASH INVESTMENTS — 13.5% | |||||
State Street Institutional U.S. Government Money Market Fund, Premier Class (Cost $7,580,604) | 7,580,604 | $ | 7,580,604 | ||
TOTAL INVESTMENT SECURITIES BEFORE SECURITIES SOLD SHORT — 95.6% (Cost $47,510,582) | 53,715,968 | ||||
SECURITIES SOLD SHORT — (21.6)% | |||||
EXCHANGE-TRADED FUNDS SOLD SHORT — (13.1)% | |||||
Consumer Discretionary Select Sector SPDR Fund | (2,545 | ) | (229,203 | ) | |
Consumer Staples Select Sector SPDR Fund | (4,590 | ) | (253,276 | ) | |
Health Care Select Sector SPDR Fund | (1,844 | ) | (139,222 | ) | |
Industrial Select Sector SPDR Fund | (2,515 | ) | (166,845 | ) | |
iShares Russell 1000 Growth ETF | (20,619 | ) | (2,398,608 | ) | |
SPDR S&P 500 ETF Trust | (3,987 | ) | (949,225 | ) | |
Technology Select Sector SPDR Fund | (54,387 | ) | (2,957,565 | ) | |
VanEck Vectors Semiconductor ETF | (3,075 | ) | (245,078 | ) | |
TOTAL EXCHANGE-TRADED FUNDS SOLD SHORT (Proceeds $6,357,895) | (7,339,022 | ) | |||
COMMON STOCKS SOLD SHORT — (8.5)% | |||||
Aerospace and Defense — (0.1)% | |||||
Boeing Co. (The) | (394 | ) | (72,823 | ) | |
Automobiles — (0.7)% | |||||
Tesla, Inc. | (1,200 | ) | (376,884 | ) | |
Biotechnology — (0.2)% | |||||
Intrexon Corp. | (6,400 | ) | (133,376 | ) | |
Capital Markets — (0.7)% | |||||
Moody's Corp. | (900 | ) | (106,488 | ) | |
T Rowe Price Group, Inc. | (3,840 | ) | (272,218 | ) | |
(378,706 | ) | ||||
Diversified Telecommunication Services — (0.4)% | |||||
Zayo Group Holdings, Inc. | (6,500 | ) | (227,955 | ) | |
Electronic Equipment, Instruments and Components — (0.3)% | |||||
Knowles Corp. | (6,200 | ) | (109,926 | ) | |
Trimble, Inc. | (2,600 | ) | (92,118 | ) | |
(202,044 | ) | ||||
Equity Real Estate Investment Trusts (REITs) — (0.2)% | |||||
Host Hotels & Resorts, Inc. | (5,961 | ) | (107,000 | ) | |
Food and Staples Retailing — (0.5)% | |||||
Wal-Mart Stores, Inc. | (4,106 | ) | (308,689 | ) | |
Health Care Equipment and Supplies — (0.4)% | |||||
Masimo Corp. | (2,000 | ) | (205,480 | ) | |
Hotels, Restaurants and Leisure — (0.6)% | |||||
Chipotle Mexican Grill, Inc. | (666 | ) | (315,997 | ) | |
Household Durables — (0.5)% | |||||
Electrolux AB | (2,389 | ) | (70,964 | ) | |
Lennar Corp., Class A | (3,845 | ) | (194,172 | ) | |
(265,136 | ) | ||||
Internet Software and Services — (0.3)% | |||||
MercadoLibre, Inc. | (729 | ) | (166,875 | ) | |
IT Services — (1.1)% | |||||
Accenture plc, Class A | (1,655 | ) | (200,751 | ) | |
International Business Machines Corp. | (2,500 | ) | (400,725 | ) | |
(601,476 | ) |
16
Shares | Value | ||||
Multiline Retail — (0.2)% | |||||
Kohl's Corp. | (2,794 | ) | $ | (109,050 | ) |
Semiconductors and Semiconductor Equipment — (0.6)% | |||||
Intel Corp. | (9,329 | ) | (337,243 | ) | |
Software — (0.8)% | |||||
Ultimate Software Group, Inc. (The) | (800 | ) | (162,136 | ) | |
Workday, Inc., Class A | (3,303 | ) | (288,682 | ) | |
(450,818 | ) | ||||
Specialty Retail — (0.2)% | |||||
Gap, Inc. (The) | (4,579 | ) | (119,970 | ) | |
Textiles, Apparel and Luxury Goods — (0.5)% | |||||
NIKE, Inc., Class B | (1,681 | ) | (93,144 | ) | |
Swatch Group AG (The) | (486 | ) | (194,547 | ) | |
(287,691 | ) | ||||
Trading Companies and Distributors — (0.2)% | |||||
W.W. Grainger, Inc. | (551 | ) | (106,178 | ) | |
TOTAL COMMON STOCKS SOLD SHORT (Proceeds $4,399,640) | (4,773,391 | ) | |||
TOTAL SECURITIES SOLD SHORT (Proceeds $10,757,535) | (12,112,413 | ) | |||
OTHER ASSETS AND LIABILITIES(4) — 26.0% | 14,571,372 | ||||
TOTAL NET ASSETS — 100.0% | $ | 56,174,927 |
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS | ||||||||||
Currency Purchased | Currency Sold | Counterparty | Settlement Date | Unrealized Appreciation (Depreciation) | ||||||
USD | 25,370 | CAD | 34,000 | Morgan Stanley | 6/21/17 | $ | 444 | |||
USD | 19,304 | CAD | 26,000 | Morgan Stanley | 6/21/17 | 243 | ||||
USD | 10,396 | CAD | 14,000 | Morgan Stanley | 6/21/17 | 133 | ||||
USD | 8,076 | CAD | 11,000 | Morgan Stanley | 6/21/17 | 12 | ||||
CHF | 601,000 | USD | 605,163 | State Street Bank & Trust Co. | 5/17/17 | (638 | ) | |||
CHF | 69,000 | USD | 70,032 | Morgan Stanley | 6/21/17 | (475 | ) | |||
CHF | 9,000 | USD | 9,135 | Morgan Stanley | 6/21/17 | (62 | ) | |||
CHF | 11,000 | USD | 11,231 | Morgan Stanley | 6/21/17 | (142 | ) | |||
CHF | 24,000 | USD | 24,385 | Morgan Stanley | 6/21/17 | (191 | ) | |||
CHF | 10,000 | USD | 10,111 | Morgan Stanley | 6/21/17 | (30 | ) | |||
CHF | 6,000 | USD | 6,058 | Morgan Stanley | 6/21/17 | (10 | ) | |||
CHF | 15,000 | USD | 15,136 | Morgan Stanley | 6/21/17 | (15 | ) | |||
CHF | 7,000 | USD | 7,058 | Morgan Stanley | 6/21/17 | (1 | ) | |||
CHF | 31,000 | USD | 31,130 | Morgan Stanley | 6/21/17 | 120 | ||||
CHF | 7,000 | USD | 6,987 | Morgan Stanley | 6/21/17 | 69 | ||||
CHF | 11,000 | USD | 10,957 | Morgan Stanley | 6/21/17 | 132 | ||||
CHF | 14,000 | USD | 13,978 | Morgan Stanley | 6/21/17 | 135 | ||||
USD | 1,257,205 | CHF | 1,264,000 | State Street Bank & Trust Co. | 5/17/17 | (14,208 | ) | |||
USD | 159,339 | CHF | 160,000 | State Street Bank & Trust Co. | 5/17/17 | (1,600 | ) | |||
USD | 777,672 | CHF | 775,000 | State Street Bank & Trust Co. | 5/17/17 | (1,873 | ) | |||
USD | 90,578 | CHF | 90,000 | State Street Bank & Trust Co. | 5/17/17 | 50 | ||||
USD | 328,505 | CHF | 330,000 | Morgan Stanley | 6/21/17 | (4,159 | ) | |||
USD | 6,051 | CHF | 6,000 | Morgan Stanley | 6/21/17 | 3 | ||||
DKK | 1,406,000 | USD | 205,762 | State Street Bank & Trust Co. | 5/17/17 | 302 |
17
Currency Purchased | Currency Sold | Counterparty | Settlement Date | Unrealized Appreciation (Depreciation) | ||||||
DKK | 1,264,000 | USD | 182,482 | State Street Bank & Trust Co. | 5/17/17 | $ | 2,770 | |||
USD | 869,479 | DKK | 6,089,000 | State Street Bank & Trust Co. | 5/17/17 | (22,925 | ) | |||
EUR | 57,000 | USD | 61,030 | State Street Bank & Trust Co. | 5/17/17 | 1,102 | ||||
EUR | 178,000 | USD | 193,449 | State Street Bank & Trust Co. | 5/17/17 | 577 | ||||
EUR | 228,000 | USD | 248,186 | State Street Bank & Trust Co. | 5/17/17 | 342 | ||||
EUR | 108,000 | USD | 116,071 | State Street Bank & Trust Co. | 5/17/17 | 1,652 | ||||
EUR | 13,000 | USD | 13,963 | Morgan Stanley | 6/21/17 | 233 | ||||
USD | 2,755,671 | EUR | 2,595,000 | State Street Bank & Trust Co. | 5/17/17 | (72,964 | ) | |||
USD | 902,547 | EUR | 849,000 | State Street Bank & Trust Co. | 5/17/17 | (22,891 | ) | |||
USD | 141,694 | EUR | 132,000 | State Street Bank & Trust Co. | 5/17/17 | (2,190 | ) | |||
USD | 207,152 | EUR | 190,000 | State Street Bank & Trust Co. | 5/17/17 | 46 | ||||
USD | 502,806 | EUR | 469,000 | Morgan Stanley | 6/21/17 | (9,335 | ) | |||
USD | 14,039 | EUR | 13,000 | Morgan Stanley | 6/21/17 | (157 | ) | |||
USD | 12,936 | EUR | 12,000 | Morgan Stanley | 6/21/17 | (168 | ) | |||
USD | 86,845 | EUR | 80,000 | Morgan Stanley | 6/21/17 | (514 | ) | |||
USD | 27,063 | EUR | 25,000 | Morgan Stanley | 6/21/17 | (237 | ) | |||
USD | 9,716 | EUR | 9,000 | Morgan Stanley | 6/21/17 | (112 | ) | |||
USD | 31,099 | EUR | 29,000 | Morgan Stanley | 6/21/17 | (569 | ) | |||
USD | 30,977 | EUR | 29,000 | Morgan Stanley | 6/21/17 | (691 | ) | |||
USD | 21,531 | EUR | 20,000 | Morgan Stanley | 6/21/17 | (308 | ) | |||
USD | 144,618 | EUR | 133,000 | Morgan Stanley | 6/21/17 | (616 | ) | |||
USD | 133,778 | EUR | 122,000 | Morgan Stanley | 6/21/17 | 556 | ||||
USD | 127,824 | EUR | 117,000 | Morgan Stanley | 6/21/17 | 62 | ||||
GBP | 110,000 | USD | 137,554 | State Street Bank & Trust Co. | 5/17/17 | 4,973 | ||||
USD | 38,807 | GBP | 31,000 | State Street Bank & Trust Co. | 5/17/17 | (1,359 | ) | |||
JPY | 15,634,411 | USD | 141,423 | Morgan Stanley | 6/21/17 | (897 | ) | |||
USD | 137,252 | JPY | 15,634,411 | Morgan Stanley | 6/21/17 | (3,274 | ) | |||
SEK | 4,242,000 | USD | 472,641 | State Street Bank & Trust Co. | 5/17/17 | 6,623 | ||||
SEK | 4,856,000 | USD | 537,824 | State Street Bank & Trust Co. | 5/17/17 | 10,810 | ||||
SEK | 579,000 | USD | 64,606 | Morgan Stanley | 6/21/17 | 930 | ||||
USD | 1,315,491 | SEK | 11,838,000 | State Street Bank & Trust Co. | 5/17/17 | (21,974 | ) | |||
USD | 235,497 | SEK | 2,078,000 | State Street Bank & Trust Co. | 5/17/17 | 723 | ||||
USD | 60,538 | SEK | 536,000 | State Street Bank & Trust Co. | 5/17/17 | (20 | ) | |||
$ | (151,563 | ) |
FUTURES CONTRACTS | ||||||||
Contracts Sold | Expiration Date | Underlying Face Amount at Value | Unrealized Appreciation (Depreciation) | |||||
3 | Amsterdam Exchange Index | May 2017 | $ | 337,672 | $ | (3,383 | ) | |
13 | Cotation Assistée en Continu 40 Index | May 2017 | 738,491 | (30,320 | ) | |||
2 | Deutscher Aktienindex Index | June 2017 | 679,042 | (23,584 | ) | |||
115 | Euro STOXX 50 Index | June 2017 | 4,394,453 | (187,005 | ) | |||
9 | FTSE 100 Index | June 2017 | 835,209 | 9,468 | ||||
9 | OMX Stockholm 30 Index | May 2017 | 164,407 | (1,093 | ) | |||
39 | S&P 500 E-Mini | June 2017 | 4,641,975 | (23,494 | ) | |||
$ | 11,791,249 | $ | (259,411 | ) |
18
TOTAL RETURN SWAP AGREEMENTS* | |||||||||
Counterparty | Units | Reference Entity | Notional Amount | Value | |||||
Purchased | |||||||||
Credit Suisse Capital LLC | 13,339 | Credit Suisse Activist Index** | USD | 1,335,384 | $ | 115,791 | |||
Morgan Stanley Capital Services LLC | 1,990 | Air Liquide SA | EUR | 220,908 | (886 | ) | |||
Morgan Stanley Capital Services LLC | 4,364 | ACS Actividades de Construccion y Servicios SA | EUR | 147,580 | 1,009 | ||||
Morgan Stanley Capital Services LLC | 970 | Arkema SA | EUR | 87,919 | 6,928 | ||||
Morgan Stanley Capital Services LLC | 5,282 | Carnival plc | GBP | 241,652 | 12,996 | ||||
Morgan Stanley Capital Services LLC | 27,492 | Credit Agricole SA | EUR | 329,673 | 49,643 | ||||
Morgan Stanley Capital Services LLC | 3,215 | CRH plc | EUR | 107,936 | (342 | ) | |||
Morgan Stanley Capital Services LLC | 3,215 | CRH plc | GBP | 90,863 | (301 | ) | |||
Morgan Stanley Capital Services LLC | 11,544 | Diageo plc | GBP | 263,126 | (4,998 | ) | |||
Morgan Stanley Capital Services LLC | 2,788 | Eiffage | EUR | 217,537 | (809 | ) | |||
Morgan Stanley Capital Services LLC | 176 | Eurofins Scientific SE | EUR | 79,963 | (429 | ) | |||
Morgan Stanley Capital Services LLC | 20,585 | Hitachi Ltd. | JPY | 11,045,649 | 15,306 | ||||
Morgan Stanley Capital Services LLC | 5,420 | Intercontinental Hotels Group plc | GBP | 208,426 | 17,513 | ||||
Morgan Stanley Capital Services LLC | 41,837 | ITV plc | GBP | 86,259 | 15,624 | ||||
Morgan Stanley Capital Services LLC | 10,750 | John Wood Group plc | GBP | 83,431 | (1,166 | ) | |||
Morgan Stanley Capital Services LLC | 1,072 | Kering | EUR | 304,526 | 557 | ||||
Morgan Stanley Capital Services LLC | 4,843 | Komatsu Ltd. | JPY | 11,533,195 | 26,596 | ||||
Morgan Stanley Capital Services LLC | 351,611 | Lloyds Banking Group plc | GBP | 242,526 | 1,022 | ||||
Morgan Stanley Capital Services LLC | 1,554 | LVMH Moet Hennessy Louis Vuitton SE | EUR | 323,213 | 31,322 | ||||
Morgan Stanley Capital Services LLC | 25,091 | Mitsubishi Heavy Industries Ltd. | JPY | 11,706,942 | (3,615 | ) | |||
Morgan Stanley Capital Services LLC | 5,948 | Mondi plc | GBP | 112,537 | 10,790 | ||||
Morgan Stanley Capital Services LLC | 40,922 | Natixis | EUR | 231,942 | 32,040 | ||||
Morgan Stanley Capital Services LLC | 2,486 | Pernod Ricard SA | EUR | 285,750 | (263 | ) | |||
Morgan Stanley Capital Services LLC | 1,914 | Safran SA | EUR | 146,911 | (1,535 | ) | |||
Morgan Stanley Capital Services LLC | 4,134 | Schneider Electric SE | EUR | 289,486 | 11,131 | ||||
Morgan Stanley Capital Services LLC | 2,947 | Smith & Nephew plc | GBP | 35,573 | 3,785 | ||||
Morgan Stanley Capital Services LLC | 4,443 | Smurfit Kappa Group plc | EUR | 112,690 | (1,271 | ) | |||
Morgan Stanley Capital Services LLC | 4,443 | Smurfit Kappa Group plc | GBP | 96,055 | (2,828 | ) | |||
Morgan Stanley Capital Services LLC | 2,526 | Sodexo SA | EUR | 287,797 | 7,602 | ||||
Morgan Stanley Capital Services LLC | 16,181 | Taisei Corp. | JPY | 12,365,478 | 13,291 | ||||
Morgan Stanley Capital Services LLC | 3,221 | Vinci SA | EUR | 219,891 | 34,476 | ||||
Morgan Stanley Capital Services LLC | 5,050 | Wolseley plc | GBP | 246,668 | 1,204 | ||||
$ | 390,183 |
* | The fund will pay or receive a floating rate as determined by the counterparty in accordance with guidelines outlined in the Master Confirmation Agreement. The floating rate and termination date adjust periodically and cannot be predicted with certainty. |
** The Credit Suisse Activist Index is constructed to gain exposure to U.S. stocks with high ownership from 29 custom activist investors. The index consists of 25 stocks with high ownership (as filed on Form 13F with the Securities and Exchange Commission) subject to constraints on risk, liquidity and the size of activist exposure relative to firm value.
19
NOTES TO SCHEDULE OF INVESTMENTS | ||
ADR | - | American Depositary Receipt |
CAD | - | Canadian Dollar |
CHF | - | Swiss Franc |
CVA | - | Certificaten Van Aandelen |
DKK | - | Danish Krone |
EUR | - | Euro |
GBP | - | British Pound |
JPY | - | Japanese Yen |
SEK | - | Swedish Krona |
USD | - | United States Dollar |
† | Category is less than 0.05% of total net assets. |
(1) | Security, or a portion thereof, has been pledged at the custodian bank or with a broker for collateral requirements on securities sold short. At the period end, the aggregate value of securities pledged was $7,128,847. |
(2) | Non-income producing. |
(3) | Security was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration, normally to qualified institutional investors. The aggregate value of these securities at the period end was $1,567,869, which represented 2.8% of total net assets. |
(4) | Amount relates primarily to deposits for securities sold short and derivative instruments. |
See Notes to Financial Statements.
20
Statement of Assets and Liabilities |
APRIL 30, 2017 (UNAUDITED) | |||
Assets | |||
Investment securities, at value (cost of $47,510,582) | $ | 53,715,968 | |
Cash | 379,749 | ||
Deposits for securities sold short and derivative instruments | 14,081,534 | ||
Receivable for investments sold | 3,051,190 | ||
Receivable for variation margin on futures contracts | 2,700 | ||
Unrealized appreciation on forward foreign currency exchange contracts | 33,042 | ||
Swap agreements, at value | 408,626 | ||
Dividends and interest receivable | 84,776 | ||
71,757,585 | |||
Liabilities | |||
Securities sold short, at value (proceeds of $10,757,535) | 12,112,413 | ||
Foreign currency overdraft payable, at value (cost of $175,416) | 170,674 | ||
Payable for investments purchased | 2,975,573 | ||
Unrealized depreciation on forward foreign currency exchange contracts | 184,605 | ||
Swap agreements, at value | 18,443 | ||
Accrued management fees | 107,227 | ||
Distribution and service fees payable | 11,567 | ||
Dividend expense payable on securities sold short | 2,156 | ||
15,582,658 | |||
Net Assets | $ | 56,174,927 | |
Net Assets Consist of: | |||
Capital (par value and paid-in surplus) | $ | 53,110,714 | |
Accumulated net investment loss | (1,034,588 | ) | |
Accumulated net realized loss | (717,631 | ) | |
Net unrealized appreciation | 4,816,432 | ||
$ | 56,174,927 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | ||||
Investor Class, $0.01 Par Value | $21,636,889 | 2,037,121 | $10.62 | |||
I Class, $0.01 Par Value | $6,693,382 | 628,479 | $10.65 | |||
Y Class, $0.01 Par Value | $5,045 | 473 | $10.67 | |||
A Class, $0.01 Par Value | $10,606,965 | 1,002,001 | $10.59* | |||
C Class, $0.01 Par Value | $10,488,728 | 1,000,823 | $10.48 | |||
R Class, $0.01 Par Value | $2,115,707 | 200,533 | $10.55 | |||
R6 Class, $0.01 Par Value | $4,628,211 | 433,678 | $10.67 |
*Maximum offering price $11.24 (net asset value divided by 0.9425).
See Notes to Financial Statements.
21
Statement of Operations |
FOR THE SIX MONTHS ENDED APRIL 30, 2017 (UNAUDITED) | |||
Investment Income (Loss) | |||
Income: | |||
Dividends (net of foreign taxes withheld of $17,256) | $ | 349,701 | |
Interest | 35,387 | ||
385,088 | |||
Expenses: | |||
Dividend expense on securities sold short | 111,288 | ||
Fees and charges on borrowings for securities sold short | 8,838 | ||
Management fees | 634,274 | ||
Distribution and service fees: | |||
A Class | 12,805 | ||
C Class | 50,743 | ||
R Class | 5,109 | ||
Directors' fees and expenses | 773 | ||
Other expenses | 5,912 | ||
829,742 | |||
Net investment income (loss) | (444,654 | ) | |
Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investment transactions | 1,144,097 | ||
Securities sold short transactions | (125,777 | ) | |
Futures contract transactions | (1,531,845 | ) | |
Swap agreement transactions | 534,779 | ||
Written options contract transactions | 9,459 | ||
Foreign currency transactions | 252,911 | ||
283,624 | |||
Change in net unrealized appreciation (depreciation) on: | |||
Investments | 4,354,412 | ||
Securities sold short | (1,242,146 | ) | |
Futures contracts | (181,640 | ) | |
Swap agreements | 430,657 | ||
Written options contracts | 2,135 | ||
Translation of assets and liabilities in foreign currencies | (221,758 | ) | |
3,141,660 | |||
Net realized and unrealized gain (loss) | 3,425,284 | ||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 2,980,630 |
See Notes to Financial Statements.
22
Statement of Changes in Net Assets |
SIX MONTHS ENDED APRIL 30, 2017 (UNAUDITED) AND YEAR ENDED OCTOBER 31, 2016 | ||||||
Increase (Decrease) in Net Assets | April 30, 2017 | October 31, 2016 | ||||
Operations | ||||||
Net investment income (loss) | $ | (444,654 | ) | $ | (837,360 | ) |
Net realized gain (loss) | 283,624 | (460,490 | ) | |||
Change in net unrealized appreciation (depreciation) | 3,141,660 | 1,012,673 | ||||
Net increase (decrease) in net assets resulting from operations | 2,980,630 | (285,177 | ) | |||
Distributions to Shareholders | ||||||
From net investment income: | ||||||
Investor Class | — | (154,800 | ) | |||
I Class | — | (48,900 | ) | |||
A Class | — | (72,200 | ) | |||
C Class | — | (56,500 | ) | |||
R Class | — | (13,400 | ) | |||
R6 Class | — | (16,940 | ) | |||
Decrease in net assets from distributions | — | (362,740 | ) | |||
Capital Share Transactions | ||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | 313,564 | 2,967,529 | ||||
Net increase (decrease) in net assets | 3,294,194 | 2,319,612 | ||||
Net Assets | ||||||
Beginning of period | 52,880,733 | 50,561,121 | ||||
End of period | $ | 56,174,927 | $ | 52,880,733 | ||
Accumulated net investment loss | $ | (1,034,588 | ) | $ | (589,934 | ) |
See Notes to Financial Statements.
23
Notes to Financial Statements |
APRIL 30, 2017 (UNAUDITED)
1. Organization
American Century Capital Portfolios, Inc. (the corporation) is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company and is organized as a Maryland corporation. AC Alternatives Long Short Fund (the fund) is one fund in a series issued by the corporation. The fund’s investment objective is to seek to provide capital appreciation.
The fund offers the Investor Class, I Class (formerly Institutional Class), Y 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. Sale of the Y Class commenced on April 10, 2017.
2. Significant Accounting Policies
The following is a summary of significant accounting policies consistently followed by the fund in preparation of its financial statements. The fund is an investment company and follows accounting and reporting guidance in accordance with accounting principles generally accepted in the United States of America. This may require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from these estimates. Management evaluated the impact of events or transactions occurring through the date the financial statements were issued that would merit recognition or disclosure.
Investment Valuations — The fund determines the fair value of its investments and computes its net asset value per share at the close of regular trading (usually 4 p.m. Eastern time) on the New York Stock Exchange (NYSE) on each day the NYSE is open. The Board of Directors has adopted valuation policies and procedures to guide the investment advisor in the fund’s investment valuation process and to provide methodologies for the oversight of the fund’s pricing function.
Equity securities that are listed or traded on a domestic securities exchange are valued at the last reported sales price or at the official closing price as provided by the exchange. Participatory notes and equity securities traded on foreign securities exchanges are generally valued at the closing price of such securities on the exchange where primarily traded or at the close of the NYSE, if that is earlier. If no last sales price is reported, or if local convention or regulation so provides, the mean of the latest bid and asked prices may be used. Securities traded over-the-counter are valued at the mean of the latest bid and asked prices, the last sales price, or the official closing price. Equity securities initially expressed in local currencies are translated into U.S. dollars at the mean of the appropriate currency exchange rate at the close of the NYSE as provided by an independent pricing service.
Open-end management investment companies are valued at the reported net asset value per share. Exchange-traded futures and options contracts are valued based on quoted prices as provided by the appropriate exchange. Swap agreements are valued at an evaluated mean as provided by independent pricing services or at the closing price of the reference entity on the exchange where primarily traded. Forward foreign currency exchange contracts are valued at the mean of the appropriate forward exchange rate at the close of the NYSE as provided by an independent pricing service. Investments initially expressed in local currencies are translated into U.S. dollars at the mean of the appropriate currency exchange rate at the close of the NYSE as provided by an independent pricing service.
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.
24
The fund monitors for significant events occurring after the close of an investment’s primary exchange but before the fund’s net asset value per share is determined. Significant events may include, but are not limited to: corporate announcements and transactions; governmental action and political unrest that could impact a specific investment or an investment sector; or armed conflicts, natural disasters and similar events that could affect investments in a specific country or region. The fund also monitors for significant fluctuations between domestic and foreign markets, as evidenced by the U.S. market or such other indicators that the Board of Directors, or its delegate, deems appropriate. If significant fluctuations in foreign markets are identified, the fund may apply a model-derived factor to the closing price of equity securities traded on foreign securities exchanges. The factor is based on observable market data as provided by an independent pricing service.
Security Transactions — Security transactions are accounted for as of the trade date. Net realized gains and losses are determined on the identified cost basis, which is also used for federal income tax purposes.
Investment Income — Dividend income less foreign taxes withheld, if any, is recorded as of the ex-dividend date. Distributions received on securities that represent a return of capital or long-term capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The fund may estimate the components of distributions received that may be considered nontaxable distributions or long-term capital gain distributions for income tax purposes. Interest income is recorded on the accrual basis and includes accretion of discounts and amortization of premiums.
Securities Sold Short — The fund enters into short sales, which is selling securities it does not own, as part of its normal investment activities. Upon selling a security short, the fund will segregate cash, cash equivalents or other appropriate liquid securities in at least an amount equal to the current market value of the securities sold short until the fund replaces the borrowed security. Interest earned on segregated cash for securities sold short is reflected as interest income. The fund is required to pay any dividends or interest due on securities sold short. Such dividends and interest are recorded as an expense. The fund may pay fees or charges on the assets borrowed for securities sold short. These fees are calculated daily based upon the value of each security sold short and a rate that is dependent on the availability of such security. If the market price of a security increases after the fund borrows the security, the fund may suffer a loss when it replaces the borrowed security at the higher price. Any loss will be increased by the amount of compensation, interest or dividends, and transaction costs the fund must pay to the lender of the borrowed security. Liabilities for securities sold short are valued daily and changes in value are recorded as change in net unrealized appreciation (depreciation) on securities sold short. The fund records realized gain (loss) on a security sold short when it is terminated by the fund and includes as a component of net realized gain (loss) on securities sold short transactions.
Foreign Currency Translations — All assets and liabilities initially expressed in foreign currencies are translated into U.S. dollars at prevailing exchange rates at period end. The fund may enter into spot foreign currency exchange contracts to facilitate transactions denominated in a foreign currency. Purchases and sales of investment securities, dividend and interest income, spot foreign currency exchange contracts, and expenses are translated at the rates of exchange prevailing on the respective dates of such transactions. Net realized and unrealized foreign currency exchange gains or losses related to investment securities are a component of net realized gain (loss) on investment transactions and change in net unrealized appreciation (depreciation) on investments, respectively. Net realized and unrealized foreign currency exchange gains or losses related to securities sold short are a component of net realized gain (loss) on securities sold short transactions and change in net unrealized appreciation (depreciation) on securities sold short, respectively.
Segregated Assets — In accordance with the 1940 Act, the fund segregates assets on its books and records to cover certain types of investments, including, but not limited to, short sales, futures contracts, options contracts, forward commitments, when-issued securities, swap agreements and certain forward foreign currency exchange contracts. American Century Investment Management, Inc. (ACIM) (the investment advisor) monitors, on a daily basis, the securities segregated to ensure the fund designates a sufficient amount of liquid assets, marked-to-market daily. The fund may also receive assets or be required to pledge assets at the custodian bank or with a broker for margin requirements on short sales, futures contracts, options contracts, forward commitments and swap agreements.
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
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are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination and for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Multiple Class — All shares of the fund represent an equal pro rata interest in the net assets of the class to which such shares belong, and have identical voting, dividend, liquidation and other rights and the same terms and conditions, except for class specific expenses and exclusive rights to vote on matters affecting only individual classes. Income, non-class specific expenses, and realized and unrealized capital gains and losses of the fund are allocated to each class of shares based on their relative net assets.
Distributions to Shareholders — Distributions from net investment income and net realized gains, if any, are generally declared and paid annually.
Indemnifications — Under the corporation’s organizational documents, its officers and directors are indemnified against certain liabilities arising out of the performance of their duties to the fund. In addition, in the normal course of business, the fund enters into contracts that provide general indemnifications. The maximum exposure under these arrangements is unknown as this would involve future claims that may be made against a fund. The risk of material loss from such claims is considered by management to be remote.
3. Fees and Transactions with Related Parties
Certain officers and directors of the corporation are also officers and/or directors of American Century Companies, Inc. (ACC). The corporation’s investment advisor, ACIM, the corporation's distributor, American Century Investment Services, Inc. (ACIS), and the corporation’s transfer agent, American Century Services, LLC, are wholly owned, directly or indirectly, by ACC. ACIM has engaged Perella Weinberg Partners Capital Management LP (PWP) as a subadvisor for the fund. PWP is responsible for making recommendations with respect to hiring, terminating, or replacing the fund’s underlying subadvisors. The fund’s underlying
subadvisors at the period end were Passport Capital, LLC, Sirios Capital Management, L.P., Three Bridges Capital, LP and Columbia Management Investment Advisers, LLC. PWP determines the percentage of the fund’s portfolio allocated to each subadvisor, including PWP, in order to seek to achieve the fund’s investment objective. ACIM is responsible for entering into subadvisory agreements and overseeing the activities of each of the subadvisors including monitoring compliance with fund objectives, strategies and restrictions. ACIM pays all costs associated with retaining the subadvisors of the fund. ACIM and the fund’s subadvisors own 99% of the shares of the fund. Related parties do not invest in the fund for the purpose of exercising management or control.
Management Fees — The corporation has entered into a management agreement with ACIM, under which ACIM provides the fund with investment advisory and management services in exchange for a single, unified management fee (the fee) per class. The agreement provides that all expenses of managing and operating the fund, except distribution and service fees, expenses on securities sold short, brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), and extraordinary expenses, will be paid by ACIM. The fee is computed and accrued daily based on each class's daily net assets and paid monthly in arrears. The difference in the fee among the classes is a result of their separate arrangements for 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 | R6 Class |
2.40% | 2.20% | 2.05% | 2.40% | 2.40% | 2.40% | 2.05% |
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 April 30, 2017 are detailed in the Statement of Operations.
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Directors' Fees and Expenses — The Board of Directors is responsible for overseeing the investment advisor’s management and operations of the fund. The directors receive detailed information about the fund and its investment advisor regularly throughout the year, and meet at least quarterly with management of the investment advisor to review reports about fund operations. The fund’s officers do not receive compensation from the fund.
Other Expenses — The fund’s other expenses may include interest charges, clearing exchange fees, proxy
solicitation expenses, filing fees for foreign tax reclaims and other miscellaneous expenses. The impact of
other expenses to the ratio of operating expenses to average net assets was 0.02% for the period ended
April 30, 2017.
Acquired Fund Fees and Expenses — The fund may invest in mutual funds, exchange-traded funds, and business development companies (the acquired funds). The fund will indirectly realize its pro rata share of the fees and expenses of the acquired funds in which it invests. These indirect fees and expenses are not paid out of the fund's assets but are reflected in the return realized by the fund on its investment in the acquired funds.
4. Investment Transactions
Purchases and sales of investment securities and securities sold short, excluding short-term investments, for the period ended April 30, 2017 were $70,801,588 and $70,769,931, respectively.
Transactions in written options contracts during the period ended April 30, 2017 were as follows:
Outstanding, Beginning of Period | Written | Closed | Expired | Outstanding, End of Period | ||||||||||
Number of Contracts | 23 | 385 | (21 | ) | (387 | ) | — | |||||||
Premiums Received | $ | 5,935 | $ | 18,538 | $ | (5,455 | ) | $ | (19,018 | ) | — |
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5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended April 30, 2017(1) | Year ended October 31, 2016 | |||||||||
Shares | Amount | Shares | Amount | |||||||
Investor Class/Shares Authorized | 70,000,000 | 100,000,000 | ||||||||
Sold | 37,563 | $ | 392,621 | 307,292 | $ | 3,097,087 | ||||
Issued in reinvestment of distributions | — | — | 15,573 | 154,800 | ||||||
Redeemed | (8,151 | ) | (85,715 | ) | (315,156 | ) | (3,088,835 | ) | ||
29,412 | 306,906 | 7,709 | 163,052 | |||||||
I Class/Shares Authorized | 40,000,000 | 80,000,000 | ||||||||
Sold | — | — | 117,993 | 1,192,010 | ||||||
Issued in reinvestment of distributions | — | — | 4,920 | 48,900 | ||||||
Redeemed | — | — | (94,434 | ) | (926,468 | ) | ||||
— | — | 28,479 | 314,442 | |||||||
Y Class/Shares Authorized | 50,000,000 | N/A | ||||||||
Sold | 473 | 5,000 | ||||||||
A Class/Shares Authorized | 35,000,000 | 40,000,000 | ||||||||
Sold | — | — | 151,981 | 1,528,938 | ||||||
Issued in reinvestment of distributions | — | — | 7,264 | 72,200 | ||||||
Redeemed | — | — | (157,244 | ) | (1,539,558 | ) | ||||
— | — | 2,001 | 61,580 | |||||||
C Class/Shares Authorized | 35,000,000 | 40,000,000 | ||||||||
Sold | — | — | 152,137 | 1,521,364 | ||||||
Issued in reinvestment of distributions | — | — | 5,684 | 56,500 | ||||||
Redeemed | — | — | (156,998 | ) | (1,532,468 | ) | ||||
— | — | 823 | 45,396 | |||||||
R Class/Shares Authorized | 20,000,000 | 20,000,000 | ||||||||
Sold | 163 | 1,688 | 30,458 | 305,788 | ||||||
Issued in reinvestment of distributions | — | — | 1,348 | 13,400 | ||||||
Redeemed | (3 | ) | (30 | ) | (31,433 | ) | (307,440 | ) | ||
160 | 1,658 | 373 | 11,748 | |||||||
R6 Class/Shares Authorized | 30,000,000 | 30,000,000 | ||||||||
Sold | — | — | 263,462 | 2,663,605 | ||||||
Issued in reinvestment of distributions | — | — | 1,704 | 16,940 | ||||||
Redeemed | — | — | (31,488 | ) | (309,234 | ) | ||||
— | — | 233,678 | 2,371,311 | |||||||
Net increase (decrease) | 30,045 | $ | 313,564 | 273,063 | $ | 2,967,529 |
(1) | April 10, 2017 (commencement of sale) through April 30, 2017 for the Y Class. |
6. Fair Value Measurements
The fund’s investments valuation process is based on several considerations and may use multiple inputs to determine the fair value of the investments held by the fund. In conformity with accounting principles generally accepted in the United States of America, the inputs used to determine a valuation are classified into three broad levels.
• | Level 1 valuation inputs consist of unadjusted quoted prices in an active market for identical investments. |
• | Level 2 valuation inputs consist of direct or indirect observable market data (including quoted prices for comparable investments, evaluations of subsequent market events, interest rates, prepayment speeds, credit risk, etc.). These inputs also consist of quoted prices for identical investments initially expressed in local currencies that are adjusted through translation into U.S. dollars. |
• | Level 3 valuation inputs consist of unobservable data (including a fund’s own assumptions). |
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The level classification is based on the lowest level input that is significant to the fair valuation measurement. The valuation inputs are not necessarily an indication of the risks associated with investing in these securities or other financial instruments. There were no significant transfers between levels during the period.
The following is a summary of the level classifications as of period end. The Schedule of Investments provides additional information on the fund’s portfolio holdings.
Level 1 | Level 2 | Level 3 | ||||||
Assets | ||||||||
Investment Securities | ||||||||
Common Stocks | ||||||||
Aerospace and Defense | $ | 44,097 | $ | 492,187 | — | |||
Automobiles | 20,653 | 319,416 | — | |||||
Banks | 2,528,176 | 1,185,935 | — | |||||
Chemicals | 1,325,477 | 654,376 | — | |||||
Commercial Services and Supplies | 72,241 | 252,664 | — | |||||
Construction and Engineering | — | 333,349 | — | |||||
Diversified Telecommunication Services | 190,063 | 200,616 | — | |||||
Electrical Equipment | 10,125 | 420,363 | — | |||||
Energy Equipment and Services | 284,684 | 215,883 | — | |||||
Food Products | 132,354 | 517,754 | — | |||||
Health Care Equipment and Supplies | 1,232,250 | 205,634 | — | |||||
Household Durables | 194,336 | 660,721 | — | |||||
Household Products | 46,232 | 386,307 | — | |||||
Industrial Conglomerates | 64,592 | 583,527 | — | |||||
Insurance | 120,112 | 419,472 | — | |||||
Machinery | 36,977 | 235,970 | — | |||||
Media | 729,425 | 204,743 | — | |||||
Metals and Mining | 12,144 | 133,275 | — | |||||
Personal Products | 63,667 | 236,314 | — | |||||
Professional Services | — | 122,251 | — | |||||
Real Estate Management and Development | — | 328,469 | — | |||||
Semiconductors and Semiconductor Equipment | 7,044,746 | 273,155 | — | |||||
Software | 3,755,722 | 225,715 | — | |||||
Textiles, Apparel and Luxury Goods | 1,818 | 744,305 | — | |||||
Other Industries | 15,818,160 | — | — | |||||
Participatory Notes | — | 1,567,869 | — | |||||
Exchange-Traded Funds | 1,487,043 | — | — | |||||
Temporary Cash Investments | 7,580,604 | — | — | |||||
$ | 42,795,698 | $ | 10,920,270 | — | ||||
Other Financial Instruments | ||||||||
Futures Contracts | — | $ | 9,468 | — | ||||
Swap Agreements | — | 408,626 | — | |||||
Forward Foreign Currency Exchange Contracts | — | 33,042 | — | |||||
— | $ | 451,136 | — |
Liabilities | ||||||||
Securities Sold Short | ||||||||
Exchange-Traded Funds | $ | 7,339,022 | — | — | ||||
Common Stocks | ||||||||
Household Durables | 194,172 | $ | 70,964 | |||||
Textiles, Apparel and Luxury Goods | 93,144 | 194,547 | — | |||||
Other Industries | 4,220,564 | — | — | |||||
$ | 11,846,902 | $ | 265,511 | — | ||||
Other Financial Instruments | ||||||||
Futures Contracts | $ | 23,494 | $ | 245,385 | — | |||
Swap Agreements | — | 18,443 | — | |||||
Forward Foreign Currency Exchange Contracts | — | 184,605 | — | |||||
$ | 23,494 | $ | 448,433 | — |
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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, total return swap agreements or options contracts based on an equity index or specific security in order to manage its exposure to changes in market conditions. The risks of entering into equity price risk derivative instruments include the possible lack of liquidity, failure of the counterparty to meet its obligations, and that there may be unfavorable changes in the underlying investments or instruments.
A fund may purchase or write an option contract to protect against declines in market value on the underlying index or security. A purchased option contract provides the fund a right, but not an obligation, to buy (call) or sell (put) an equity-related asset at a specified exercise price within a certain period or on a specific date. A written option contract holds the corresponding obligation to sell (call writing) or buy (put writing) the underlying equity-related asset if the purchaser exercises the option contract. The buyer pays the seller an initial purchase price (premium) for this right. Option contracts purchased by a fund are accounted for in the same manner as marketable portfolio securities. The premium received by a fund for option contracts written is recorded as a liability and valued daily. The proceeds from securities sold through the exercise of option contracts are decreased by the premium paid to purchase the option contracts. A fund may recognize a realized gain or loss when the option contract is closed, exercised or expires. Net realized and unrealized gains or losses occurring during the holding period of purchased options contracts are a component of net realized gain (loss) on investment transactions and change in net unrealized appreciation (depreciation) on investments, respectively. Net realized and unrealized gains or losses occurring during the holding period of written options contracts are a component of net realized gain (loss) on written options contract transactions and change in net unrealized appreciation (depreciation) on written options contracts, respectively. The fund’s average exposure to these equity price risk derivative instruments during the period was 400 purchased options contracts and 206 written options contracts.
A fund may purchase futures contracts to gain exposure to increases in market value or sell futures contracts to protect against a decline in market value. Upon entering into a futures contract, a fund is required to deposit either cash or securities in an amount equal to a certain percentage of the contract value (initial margin). Subsequent payments (variation margin) are made or received daily, in cash, by a fund. The variation margin is equal to the daily change in the contract value and is recorded as unrealized gains and losses. A fund recognizes a realized gain or loss when the contract is closed or expires. Net realized and unrealized gains or
losses occurring during the holding period of futures contracts are a component of net realized gain (loss) on futures contract transactions and change in net unrealized appreciation (depreciation) on futures contracts, respectively. The fund's average exposure to these equity price risk derivative instruments during the period was 204 futures contracts.
A fund may enter into total return swap agreements in order to attempt to obtain or preserve a particular return or spread at a lower cost than obtaining a return or spread through purchases and/or sales of instruments in other markets or gain exposure to certain markets in the most economical way possible. A fund will segregate cash, cash equivalents or other appropriate liquid securities on its records in amounts sufficient to meet requirements. Changes in value, including the periodic amounts of interest to be paid or received on swap agreements, are recorded as unrealized appreciation (depreciation) on swap agreements. Realized gain or loss is recorded upon receipt or payment of a periodic settlement or termination of swap agreements. Net realized and unrealized gains or losses occurring during the holding period of swap agreements are a component of net realized gain (loss) on swap agreement transactions and change in net unrealized appreciation (depreciation) on swap agreements, respectively. The fund's average swap agreement units held during the period was 437,787.
Foreign Currency Risk — The fund is subject to foreign currency exchange rate risk in the normal course of pursuing its investment objectives. The value of foreign investments held by a fund may be significantly affected by changes in foreign currency exchange rates. The dollar value of a foreign security generally decreases when the value of the dollar rises against the foreign currency in which the security is denominated and tends to increase when the value of the dollar declines against such foreign currency. A fund may enter into forward foreign currency exchange contracts to reduce a fund's exposure to foreign currency exchange rate fluctuations or to gain exposure to the fluctuations in the value of foreign currencies. The net U.S. dollar value of foreign currency underlying all contractual commitments held by a fund and the resulting unrealized appreciation or depreciation are determined daily. Realized gain or loss is recorded upon the termination of the contract. Net realized and unrealized gains or losses occurring during the holding period of forward foreign currency exchange contracts are a component of net realized gain (loss) on foreign currency transactions and change in net unrealized appreciation (depreciation) on translation of assets and liabilities in foreign currencies, respectively. A fund bears the risk of an unfavorable change in the foreign currency exchange rate
30
underlying the forward contract. Additionally, losses, up to the fair value, may arise if the counterparties do not perform under the contract terms. The fund's average U.S. dollar exposure to foreign currency risk derivative instruments held during the period was $10,738,433.
Value of Derivative Instruments as of April 30, 2017
Asset Derivatives | Liability Derivatives | |||||||
Type of Risk Exposure | Location on Statement of Assets and Liabilities | Value | Location on Statement of Assets and Liabilities | Value | ||||
Equity Price Risk | Receivable for variation margin on futures contracts* | $ | 2,700 | Payable for variation margin on futures contracts* | — | |||
Equity Price Risk | Swap agreements | 408,626 | Swap agreements | $ | 18,443 | |||
Foreign Currency Risk | Unrealized appreciation on forward foreign currency exchange contracts | 33,042 | Unrealized depreciation on forward foreign currency exchange contracts | 184,605 | ||||
$ | 444,368 | $ | 203,048 |
* | Included in the unrealized appreciation (depreciation) on futures contracts as reported in the Schedule of Investments. |
Effect of Derivative Instruments on the Statement of Operations for the Six Months Ended April 30, 2017
Net Realized Gain (Loss) | Change in Net Unrealized Appreciation (Depreciation) | |||||||
Type of Risk Exposure | Location on Statement of Operations | Value | Location on Statement of Operations | Value | ||||
Equity Price Risk | Net realized gain (loss) on investment transactions | $ | (209,938 | ) | Change in net unrealized appreciation (depreciation) on investments | — | ||
Equity Price Risk | Net realized gain (loss) on futures contract transactions | (1,531,845 | ) | Change in net unrealized appreciation (depreciation) on futures contracts | $ | (181,640 | ) | |
Equity Price Risk | Net realized gain (loss) on written options contract transactions | 9,459 | Change in net unrealized appreciation (depreciation) on written options contracts | 2,135 | ||||
Equity Price Risk | Net realized gain (loss) on swap agreement transactions | 534,779 | Change in net unrealized appreciation (depreciation) on swap agreements | 430,657 | ||||
Foreign Currency Risk | Net realized gain (loss) on foreign currency transactions | 308,835 | Change in net unrealized appreciation (depreciation) on translation of assets and liabilities in foreign currencies | (209,497 | ) | |||
$ | (888,710 | ) | $ | 41,655 |
8. Risk Factors
ACIM utilizes multiple subadvisors to manage the fund’s assets, each employing its own particular investment strategy. Multi-manager strategies can increase the fund's portfolio turnover rate, which could result in higher levels of realized capital gains or losses, higher brokerage commissions and other transaction costs.
The fund may invest in foreign securities, which are generally riskier than U.S. securities. As a result the fund may be subject to foreign risk, meaning that political events (such as civil unrest, national elections and imposition of exchange controls), social and economic events (such as labor strikes and rising inflation), and natural disasters occurring in a country where the fund invests could cause the fund’s investments in that country to experience losses. For these and other reasons, securities of foreign issuers may be less liquid and more volatile. Investing in securities of companies located in emerging market countries generally is riskier than investing in securities of companies located in foreign developed countries.
The fund is subject to short sales risk. If the market price of a security increases after the fund borrows the security to sell short, the fund will suffer a loss when it replaces the borrowed security at the higher price. Any loss will be increased by the amount of compensation, interest or dividends, and transaction costs the fund must pay to a lender of the security.
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9. Federal Tax Information
The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
As of period end, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $ | 47,651,358 | |
Gross tax appreciation of investments | $ | 6,483,503 | |
Gross tax depreciation of investments | (418,893 | ) | |
Net tax appreciation (depreciation) of investments | 6,064,610 | ||
Net tax appreciation (depreciation) on securities sold short | (1,380,995 | ) | |
Net tax appreciation (depreciation) | $ | 4,683,615 |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales.
As of October 31, 2016, the fund had accumulated short-term capital losses of $(453,428) and accumulated long-term capital losses of $(152,833), which represent net capital loss carryovers that may be used to offset future realized capital gains for federal income tax purposes. The capital loss carryovers may be carried forward for an unlimited period. Future capital loss carryover utilization in any given year may be subject to Internal Revenue Code limitations.
As of October 31, 2016, the fund had late-year ordinary loss deferrals of $(576,473), which represent certain qualified losses that the fund has elected to treat as having been incurred in the following fiscal year for federal income tax purposes.
10. Recently Issued Accounting Guidance
In October 2016, the Securities and Exchange Commission adopted new rules and forms as well as amendments to its rules and forms to modernize the reporting and disclosure of information by registered investment companies. The amendments to Regulation S-X will require standardized, enhanced disclosure about derivatives in investment company financial statements, as well as other provisions. Compliance with the amendments is effective on August 1, 2017. Management is currently evaluating the impact that adopting the amendments will have on the financial statement disclosures.
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Financial Highlights |
For a Share Outstanding Throughout the Years Ended October 31 (except as noted) | ||||||||||||||
Per-Share Data | Ratios and Supplemental Data | |||||||||||||
Income From Investment Operations: | Ratio to Average Net Assets of: | |||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Distributions From Net Investment Income | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Operating Expenses (excluding expenses on securities sold short) | Net Investment Income (Loss) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
Investor Class | ||||||||||||||
2017(3) | $10.05 | (0.07) | 0.64 | 0.57 | — | $10.62 | 5.67% | 2.86%(4) | 2.42%(4) | (1.44)%(4) | 162% | $21,637 | ||
2016 | $10.11 | (0.15) | 0.17 | 0.02 | (0.08) | $10.05 | 0.18% | 3.14% | 2.42% | (1.55)% | 410% | $20,168 | ||
2015(5) | $10.00 | (0.01) | 0.12 | 0.11 | — | $10.11 | 1.10% | 2.75%(4) | 2.40%(4) | (2.28)%(4) | 81% | $20,227 | ||
I Class(6) | ||||||||||||||
2017(3) | $10.06 | (0.06) | 0.65 | 0.59 | — | $10.65 | 5.86% | 2.66%(4) | 2.22%(4) | (1.24)%(4) | 162% | $6,693 | ||
2016 | $10.11 | (0.13) | 0.16 | 0.03 | (0.08) | $10.06 | 0.22% | 2.94% | 2.22% | (1.35)% | 410% | $6,324 | ||
2015(5) | $10.00 | (0.01) | 0.12 | 0.11 | — | $10.11 | 1.20% | 2.55%(4) | 2.20%(4) | (2.08)%(4) | 81% | $6,068 | ||
Y Class | ||||||||||||||
2017(7) | $10.58 | —(8) | 0.09 | 0.09 | — | $10.67 | 0.85% | 2.18%(4) | 2.07%(4) | (0.53)%(4) | 162%(9) | $5 | ||
A Class | ||||||||||||||
2017(3) | $10.02 | (0.09) | 0.66 | 0.57 | — | $10.59 | 5.59% | 3.11%(4) | 2.67%(4) | (1.69)%(4) | 162% | $10,607 | ||
2016 | $10.11 | (0.18) | 0.16 | (0.02) | (0.07) | $10.02 | (0.17)% | 3.39% | 2.67% | (1.80)% | 410% | $10,044 | ||
2015(5) | $10.00 | (0.01) | 0.12 | 0.11 | — | $10.11 | 1.10% | 3.00%(4) | 2.65%(4) | (2.53)%(4) | 81% | $10,112 | ||
C Class | ||||||||||||||
2017(3) | $9.96 | (0.12) | 0.64 | 0.52 | — | $10.48 | 5.22% | 3.86%(4) | 3.42%(4) | (2.44)%(4) | 162% | $10,489 | ||
2016 | $10.11 | (0.25) | 0.16 | (0.09) | (0.06) | $9.96 | (0.92)% | 4.14% | 3.42% | (2.55)% | 410% | $9,969 | ||
2015(5) | $10.00 | (0.01) | 0.12 | 0.11 | — | $10.11 | 1.10% | 3.75%(4) | 3.40%(4) | (3.28)%(4) | 81% | $10,109 |
For a Share Outstanding Throughout the Years Ended October 31 (except as noted) | ||||||||||||||
Per-Share Data | Ratios and Supplemental Data | |||||||||||||
Income From Investment Operations: | Ratio to Average Net Assets of: | |||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Distributions From Net Investment Income | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Operating Expenses (excluding expenses on securities sold short) | Net Investment Income (Loss) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
R Class | ||||||||||||||
2017(3) | $10.00 | (0.10) | 0.65 | 0.55 | — | $10.55 | 5.50% | 3.36%(4) | 2.92%(4) | (1.94)%(4) | 162% | $2,116 | ||
2016 | $10.11 | (0.20) | 0.16 | (0.04) | (0.07) | $10.00 | (0.42)% | 3.64% | 2.92% | (2.05)% | 410% | $2,004 | ||
2015(5) | $10.00 | (0.01) | 0.12 | 0.11 | — | $10.11 | 1.10% | 3.25%(4) | 2.90%(4) | (2.78)%(4) | 81% | $2,022 | ||
R6 Class | ||||||||||||||
2017(3) | $10.08 | (0.06) | 0.65 | 0.59 | — | $10.67 | 5.85% | 2.51%(4) | 2.07%(4) | (1.09)%(4) | 162% | $4,628 | ||
2016 | $10.11 | (0.11) | 0.16 | 0.05 | (0.08) | $10.08 | 0.45% | 2.79% | 2.07% | (1.20)% | 410% | $4,370 | ||
2015(5) | $10.00 | (0.01) | 0.12 | 0.11 | — | $10.11 | 1.20% | 2.40%(4) | 2.05%(4) | (1.93)%(4) | 81% | $2,023 |
Notes to Financial Highlights |
(1) | Computed using average shares outstanding throughout the period. |
(2) | Total returns are calculated based on the net asset value of the last business day and do not reflect applicable sales charges, if any. Total returns for periods less than one year are not annualized. |
(3) | Six months ended April 30, 2017 (unaudited). |
(4) | Annualized. |
(5) | October 15, 2015 (fund inception) through October 31, 2015. |
(6) | Prior to April 10, 2017, the I Class was referred to as the Institutional Class. |
(7) | April 10, 2017 (commencement of sale) through April 30, 2017 (unaudited). |
(8) | Per share amount was less than $0.005. |
(9) | Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the six months ended April 30, 2017. |
See Notes to Financial Statements.
Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain IRAs are subject to federal income tax withholding, unless you elect not to have withholding apply. Tax will be withheld on the total amount withdrawn even though you may be receiving amounts that are not subject to withholding, such as nondeductible contributions. In such case, excess amounts of withholding could occur. You may adjust your withholding election so that a greater or lesser amount will be withheld.
If you don’t want us to withhold on this amount, you must notify us to not withhold the federal income tax. You may notify us in writing or in certain situations by telephone or through other electronic means. For systematic withdrawals, your withholding election will remain in effect until revoked or changed by filing a new election. You have the right to revoke your election at any time.
Remember, even if you elect not to have income tax withheld, you are liable for paying income tax on the taxable portion of your withdrawal. If you elect not to have income tax withheld or you don’t have enough income tax withheld, you may be responsible for payment of estimated tax. You may incur penalties under the estimated tax rules if your withholding and estimated tax payments are not sufficient. You can reduce or defer the income tax on a distribution by directly or indirectly rolling such distribution over to another IRA or eligible plan. You should consult your tax advisor for additional information.
State tax will be withheld if, at the time of your distribution, your address is within one of the mandatory withholding states and you have federal income tax withheld (or as otherwise required by state law). State taxes will be withheld from your distribution in accordance with the respective state rules.
Distributions you receive from 403(b), 457 and qualified plans are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
A description of the policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund is available without charge, upon request, by calling 1-800-345-2021. It is also available on the "About Us" page of American Century Investments’ website at americancentury.com and on the Securities and Exchange Commission’s website at sec.gov. Information regarding how the investment advisor voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the "About Us" page at americancentury.com. It is also available at sec.gov.
Quarterly Portfolio Disclosure
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-Q. The fund’s Forms N-Q are available on the SEC’s website at sec.gov, and may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The fund also makes its complete schedule of portfolio holdings for the most recent quarter of its fiscal year available on its website at americancentury.com and, upon request, by calling 1-800-345-2021.
35
Notes |
36
Contact Us | americancentury.com | |
Automated Information Line | 1-800-345-8765 | |
Investor Services Representative | 1-800-345-2021 or 816-531-5575 | |
Investors Using Advisors | 1-800-378-9878 | |
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Telecommunications Relay Service for the Deaf | 711 | |
American Century Capital Portfolios, Inc. | ||
Investment Advisor: American Century Investment Management, Inc. Kansas City, Missouri | ||
This report and the statements it contains are submitted for the general information of our shareholders. The report is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus. | ||
©2017 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-92369 1706 |
Semiannual Report | |
April 30, 2017 | |
Global Real Estate Fund |
Table of Contents |
Any opinions expressed in this report reflect those of the author as of the date of the report, and do not necessarily represent the opinions of American Century Investments® or any other person in the American Century Investments organization. Any such opinions are subject to change at any time based upon market or other conditions and American Century Investments disclaims any responsibility to update such opinions. These opinions may not be relied upon as investment advice and, because investment decisions made by American Century Investments funds are based on numerous factors, may not be relied upon as an indication of trading intent on behalf of any American Century Investments fund. Security examples are used for representational purposes only and are not intended as recommendations to purchase or sell securities. Performance information for comparative indices and securities is provided to American Century Investments by third party vendors. To the best of American Century Investments’ knowledge, such information is accurate at the time of printing.
President’s Letter |
Jonathan Thomas
Dear Investor:
Thank you for reviewing this semiannual report for the period ended April 30, 2017. It provides a market overview (below), followed by a schedule of fund investments and other financial information. For additional commentary and information on fund performance, plus other investment insights, we encourage you to visit our website, americancentury.com.
“Trump Trade” Triggered Surges in U.S. Stock Prices and Treasury Yields
Especially in the U.S., the signature events of the six-month period were Donald Trump’s victory in the U.S. presidential election in November and the resulting “Trump Trade.” President Trump’s aggressive pro-growth fiscal policy agenda triggered risk-on rallies in higher-risk assets such as stocks and high-yield corporate bonds that produced double-digit gains for many broad U.S. and global/non-U.S. equity indices. For example, the S&P 500 Index and the MSCI EAFE Index gained 13.32% and 11.47%, respectively. In the U.S., growth and small-cap equity indices generally outperformed their value and large-cap counterparts.
The Trump Trade and improving global economic conditions also drove government bond yields higher, and boosted the value of the U.S. dollar against other currencies. This caused most bond indices to decline during the period, except those representing emerging market and corporate debt, which benefited from investors’ continuing search for more yield than what’s available in government bonds. Also, higher-yielding and corporate bonds are perceived as less price change-sensitive to rising interest rates.
Yields rose for short- and long-maturity U.S. Treasuries as the Federal Reserve raised its interest rate target twice during the reporting period, and suggested that it might raise rates again and start gradually reducing its balance sheet by the end of 2017. These factors, plus rising inflation, could trigger more bouts of U.S. bond market volatility. Meanwhile, the Trump Trade could prove to be double-edged—its momentum faded as health care and tax reform enactment faced delays. This, along with ongoing questions about the Trump administration’s practices, policies, and alliances, could impede further risk-on sentiment. In this unsettled environment, we believe in remaining focused on investment goals, using disciplined, actively managed, risk-aware strategies. We appreciate your continued trust in us.
Sincerely,
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
2
Fund Characteristics |
APRIL 30, 2017 | |
Top Ten Holdings | % of net assets |
Simon Property Group, Inc. | 4.6% |
AvalonBay Communities, Inc. | 3.5% |
Prologis, Inc. | 3.3% |
Welltower, Inc. | 2.9% |
Realty Income Corp. | 2.9% |
Alexandria Real Estate Equities, Inc. | 2.7% |
Segro plc | 2.5% |
Deutsche Wohnen AG | 2.5% |
Mitsubishi Estate Co. Ltd. | 2.5% |
Unibail-Rodamco SE | 2.4% |
Types of Investments in Portfolio | % of net assets |
Domestic Common Stocks | 49.4% |
Foreign Common Stocks | 49.4% |
Total Common Stocks | 98.8% |
Temporary Cash Investments | 0.4% |
Other Assets and Liabilities | 0.8% |
Investments by Country | % of net assets |
United States | 49.4% |
Japan | 9.9% |
Hong Kong | 7.6% |
United Kingdom | 5.8% |
Australia | 5.3% |
China | 4.1% |
France | 4.0% |
Singapore | 3.1% |
Germany | 2.7% |
Canada | 2.6% |
Other Countries | 4.3% |
Cash and Equivalents* | 1.2% |
*Includes temporary cash investments and other assets and liabilities. |
3
Shareholder Fee Example |
Fund shareholders may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption/exchange fees; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in your fund and to compare these costs with the ongoing cost of investing in other mutual funds.
The example is based on an investment of $1,000 made at the beginning of the period and held for the entire period from November 1, 2016 to April 30, 2017 (except as noted).
Actual Expenses
The table provides information about actual account values and actual expenses for each class. You may use the information, together with the amount you invested, to estimate the expenses that you paid over the period. First, identify the share class you own. Then simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
If you hold Investor Class shares of any American Century Investments fund, or I Class shares of the American Century Diversified Bond Fund, in an American Century Investments account (i.e., not a financial intermediary or retirement plan account), American Century Investments may charge you a $12.50 semiannual account maintenance fee if the value of those shares is less than $10,000. We will redeem shares automatically in one of your accounts to pay the $12.50 fee. In determining your total eligible investment amount, we will include your investments in all personal accounts (including American Century Investments Brokerage accounts) registered under your Social Security number. Personal accounts include individual accounts, joint accounts, UGMA/UTMA accounts, personal trusts, Coverdell Education Savings Accounts and IRAs (including traditional, Roth, Rollover, SEP-, SARSEP- and SIMPLE-IRAs), and certain other retirement accounts. If you have only business, business retirement, employer-sponsored or American Century Investments Brokerage accounts, you are currently not subject to this fee. If you are subject to the Account Maintenance Fee, your account value could be reduced by the fee amount.
Hypothetical Example for Comparison Purposes
The table also provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio of each class of your fund and an assumed rate of return of 5% per year before expenses, which is not the actual return of a fund’s share class. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) or redemption/exchange fees. Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
4
Beginning Account Value 11/1/16 | Ending Account Value 4/30/17 | Expenses Paid During Period(1) 11/1/16 - 4/30/17 | Annualized Expense Ratio(1) | |
Actual | ||||
Investor Class (after waiver) | $1,000 | $1,009.60 | $5.58 | 1.12% |
Investor Class (before waiver) | $1,000 | $1,009.60(2) | $5.98 | 1.20% |
I Class (after waiver) | $1,000 | $1,009.90 | $4.58 | 0.92% |
I Class (before waiver) | $1,000 | $1,009.90(2) | $4.98 | 1.00% |
Y Class (after waiver) | $1,000 | $996.40(3) | $0.44(4) | 0.77% |
Y Class (before waiver) | $1,000 | $996.40(2)(3) | $0.49(4) | 0.85% |
A Class (after waiver) | $1,000 | $1,007.90 | $6.82 | 1.37% |
A Class (before waiver) | $1,000 | $1,007.90(2) | $7.22 | 1.45% |
C Class (after waiver) | $1,000 | $1,004.60 | $10.54 | 2.12% |
C Class (before waiver) | $1,000 | $1,004.60(2) | $10.93 | 2.20% |
R Class (after waiver) | $1,000 | $1,007.10 | $8.06 | 1.62% |
R Class (before waiver) | $1,000 | $1,007.10(2) | $8.46 | 1.70% |
R5 Class (after waiver) | $1,000 | $996.40(3) | $0.53(4) | 0.92% |
R5 Class (before waiver) | $1,000 | $996.40(2)(3) | $0.57(4) | 1.00% |
R6 Class (after waiver) | $1,000 | $1,011.40 | $3.84 | 0.77% |
R6 Class (before waiver) | $1,000 | $1,011.40(2) | $4.24 | 0.85% |
Hypothetical | ||||
Investor Class (after waiver) | $1,000 | $1,019.24 | $5.61 | 1.12% |
Investor Class (before waiver) | $1,000 | $1,018.84 | $6.01 | 1.20% |
I Class (after waiver) | $1,000 | $1,020.23 | $4.61 | 0.92% |
I Class (before waiver) | $1,000 | $1,019.84 | $5.01 | 1.00% |
Y Class (after waiver) | $1,000 | $1,020.98(5) | $3.86(5) | 0.77% |
Y Class (before waiver) | $1,000 | $1,020.58(5) | $4.26(5) | 0.85% |
A Class (after waiver) | $1,000 | $1,018.00 | $6.85 | 1.37% |
A Class (before waiver) | $1,000 | $1,017.60 | $7.25 | 1.45% |
C Class (after waiver) | $1,000 | $1,014.28 | $10.59 | 2.12% |
C Class (before waiver) | $1,000 | $1,013.89 | $10.99 | 2.20% |
R Class (after waiver) | $1,000 | $1,016.76 | $8.10 | 1.62% |
R Class (before waiver) | $1,000 | $1,016.36 | $8.50 | 1.70% |
R5 Class (after waiver) | $1,000 | $1,020.23(5) | $4.61(5) | 0.92% |
R5 Class (before waiver) | $1,000 | $1,019.84(5) | $5.01(5) | 1.00% |
R6 Class (after waiver) | $1,000 | $1,020.98 | $3.86 | 0.77% |
R6 Class (before waiver) | $1,000 | $1,020.58 | $4.26 | 0.85% |
(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 181, the number of days in the most recent fiscal half-year, divided by 365, to reflect the one-half year period. |
(2) | Ending account value assumes the return earned after waiver and would have been lower if a portion of the fees had not been waived. |
(3) | Ending account value based on actual return from April 10, 2017 (commencement of sale) through April 30, 2017. |
(4) | 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 21, the number of days in the period from April 10, 2017 (commencement of sale) through April 30, 2017, divided by 365, to reflect the period. Had the class been available for the full period, the expenses paid during the period would have been higher. |
(5) | Ending account value and expenses paid during the period assumes the class had been available throughout the entire period and are calculated using the class’s annualized expense ratio listed in the table above. |
5
Schedule of Investments |
APRIL 30, 2017 (UNAUDITED)
Shares | Value | ||||
COMMON STOCKS — 98.8% | |||||
Australia — 5.3% | |||||
Charter Hall Group | 142,174 | $ | 603,628 | ||
Dexus Property Group | 167,306 | 1,277,843 | |||
Goodman Group | 240,598 | 1,461,096 | |||
Scentre Group | 214,072 | 690,880 | |||
Westfield Corp. | 63,242 | 429,989 | |||
4,463,436 | |||||
Brazil — 0.9% | |||||
Iguatemi Empresa de Shopping Centers SA | 68,100 | 710,383 | |||
Canada — 2.6% | |||||
Brookfield Asset Management, Inc., Class A | 18,859 | 697,136 | |||
Chartwell Retirement Residences | 35,683 | 406,222 | |||
H&R Real Estate Investment Trust | 27,132 | 460,333 | |||
Pure Industrial Real Estate Trust | 125,210 | 598,968 | |||
2,162,659 | |||||
China — 4.1% | |||||
China Overseas Land & Investment Ltd. | 114,000 | 331,227 | |||
China Resources Land Ltd. | 344,888 | 957,733 | |||
Country Garden Holdings Co. | 841,000 | 800,093 | |||
Guangzhou R&F Properties Co. Ltd. | 252,800 | 425,756 | |||
KWG Property Holding Ltd. | 278,500 | 210,530 | |||
Longfor Properties Co. Ltd. | 379,500 | 657,679 | |||
3,383,018 | |||||
Finland — 0.7% | |||||
Sponda Oyj | 125,957 | 555,954 | |||
France — 4.0% | |||||
Gecina SA | 9,374 | 1,333,569 | |||
Unibail-Rodamco SE | 8,071 | 1,982,098 | |||
3,315,667 | |||||
Germany — 2.7% | |||||
Deutsche Wohnen AG | 61,839 | 2,114,468 | |||
TLG Immobilien AG | 6,493 | 131,378 | |||
2,245,846 | |||||
Hong Kong — 7.6% | |||||
Cheung Kong Property Holdings Ltd. | 133,000 | 954,110 | |||
Hang Lung Properties Ltd. | 271,000 | 710,742 | |||
Hongkong Land Holdings Ltd. | 124,000 | 956,040 | |||
Link REIT | 185,000 | 1,330,713 | |||
Sun Hung Kai Properties Ltd. | 90,000 | 1,350,286 | |||
Wharf Holdings Ltd. (The) | 119,000 | 1,016,610 | |||
6,318,501 | |||||
Indonesia — 0.3% | |||||
Bumi Serpong Damai Tbk PT | 2,143,600 | 287,872 | |||
Japan — 9.9% | |||||
Activia Properties, Inc. | 212 | 1,009,841 | |||
Daiwa House REIT Investment Corp. | 455 | 1,150,204 |
6
Shares | Value | ||||
Hulic Co. Ltd. | 56,000 | $ | 527,473 | ||
Hulic Reit, Inc. | 659 | 1,058,183 | |||
Mitsubishi Estate Co. Ltd. | 107,000 | 2,044,494 | |||
Nippon Building Fund, Inc. | 122 | 648,989 | |||
Orix JREIT, Inc. | 395 | 626,472 | |||
Sumitomo Realty & Development Co. Ltd. | 43,000 | 1,159,525 | |||
8,225,181 | |||||
Philippines — 0.8% | |||||
Ayala Land, Inc. | 961,000 | 678,884 | |||
Singapore — 3.1% | |||||
Ascendas Real Estate Investment Trust | 419,500 | 768,651 | |||
CapitaLand Ltd. | 251,000 | 675,489 | |||
City Developments Ltd. | 78,300 | 604,700 | |||
Global Logistic Properties Ltd. | 266,500 | 549,347 | |||
2,598,187 | |||||
Spain — 1.2% | |||||
Inmobiliaria Colonial SA | 129,958 | 1,007,789 | |||
Sweden — 0.4% | |||||
Hufvudstaden AB, A Shares | 22,680 | 355,411 | |||
United Kingdom — 5.8% | |||||
British Land Co. plc (The) | 88,799 | 755,056 | |||
Derwent London plc | 12,473 | 475,604 | |||
Safestore Holdings plc | 172,150 | 903,023 | |||
Segro plc | 337,236 | 2,121,478 | |||
UNITE Group plc (The) | 74,499 | 624,297 | |||
4,879,458 | |||||
United States — 49.4% | |||||
Alexandria Real Estate Equities, Inc. | 20,019 | 2,252,338 | |||
American Homes 4 Rent | 25,000 | 576,250 | |||
American Tower Corp. | 3,459 | 435,626 | |||
Apartment Investment & Management Co., Class A | 41,252 | 1,804,363 | |||
AvalonBay Communities, Inc. | 15,310 | 2,906,450 | |||
Boston Properties, Inc. | 11,536 | 1,460,458 | |||
Colony Starwood Homes | 50,939 | 1,760,961 | |||
CyrusOne, Inc. | 15,102 | 825,173 | |||
Digital Realty Trust, Inc. | 11,485 | 1,318,937 | |||
Duke Realty Corp. | 35,197 | 976,013 | |||
Equinix, Inc. | 2,200 | 918,940 | |||
Essex Property Trust, Inc. | 4,401 | 1,075,912 | |||
Extra Space Storage, Inc. | 20,029 | 1,512,790 | |||
GGP, Inc. | 71,318 | 1,541,182 | |||
Hilton Worldwide Holdings, Inc. | 15,480 | 912,856 | |||
Hudson Pacific Properties, Inc. | 42,366 | 1,455,696 | |||
Paramount Group, Inc. | 67,002 | 1,098,833 | |||
Physicians Realty Trust | 41,553 | 816,101 | |||
Prologis, Inc. | 50,319 | 2,737,857 | |||
Public Storage | 3,361 | 703,726 | |||
Rayonier, Inc. | 14,999 | 423,272 | |||
Realty Income Corp. | 41,198 | 2,403,903 | |||
Regency Centers Corp. | 21,528 | 1,360,139 | |||
Simon Property Group, Inc. | 23,064 | 3,811,557 |
7
Shares | Value | ||||
Starwood Property Trust, Inc. | 31,812 | $ | 721,814 | ||
Sunstone Hotel Investors, Inc. | 56,940 | 847,837 | |||
Urban Edge Properties | 25,850 | 659,175 | |||
Ventas, Inc. | 23,035 | 1,474,470 | |||
Welltower, Inc. | 34,172 | 2,441,248 | |||
41,233,877 | |||||
TOTAL COMMON STOCKS (Cost $77,258,009) | 82,422,123 | ||||
TEMPORARY CASH INVESTMENTS — 0.4% | |||||
Repurchase Agreement, BMO Capital Markets Corp., (collateralized by various U.S. Treasury obligations, 0.75% - 2.875%, 6/30/17 - 5/15/43, valued at $136,493), in a joint trading account at 0.68%, dated 4/28/17, due 5/1/17 (Delivery value $133,856) | 133,848 | ||||
Repurchase Agreement, Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 3.00%, 5/15/45, valued at $137,569), at 0.22%, dated 4/28/17, due 5/1/17 (Delivery value $133,002) | 133,000 | ||||
State Street Institutional U.S. Government Money Market Fund, Premier Class | 7,407 | 7,407 | |||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $274,255) | 274,255 | ||||
TOTAL INVESTMENT SECURITIES — 99.2% (Cost $77,532,264) | 82,696,378 | ||||
OTHER ASSETS AND LIABILITIES — 0.8% | 705,087 | ||||
TOTAL NET ASSETS — 100.0% | $ | 83,401,465 |
SUB-INDUSTRY ALLOCATION | ||
(as a % of net assets) | ||
Retail REITs | 17.9 | % |
Office REITs | 11.0 | % |
Residential REITs | 10.5 | % |
Industrial REITs | 10.4 | % |
Diversified Real Estate Activities | 9.9 | % |
Specialized REITs | 8.4 | % |
Real Estate Operating Companies | 8.4 | % |
Diversified REITs | 6.8 | % |
Health Care REITs | 5.7 | % |
Real Estate Development | 5.5 | % |
Hotels, Resorts and Cruise Lines | 1.1 | % |
Hotel and Resort REITs | 1.0 | % |
Mortgage REITs | 0.9 | % |
Asset Management and Custody Banks | 0.8 | % |
Health Care Facilities | 0.5 | % |
Cash and Equivalents* | 1.2 | % |
*Includes temporary cash investments and other assets and liabilities.
See Notes to Financial Statements.
8
Statement of Assets and Liabilities |
APRIL 30, 2017 (UNAUDITED) | |||
Assets | |||
Investment securities, at value (cost of $77,532,264) | $ | 82,696,378 | |
Foreign currency holdings, at value (cost of $21,679) | 21,945 | ||
Receivable for investments sold | 2,350,560 | ||
Receivable for capital shares sold | 77,468 | ||
Dividends and interest receivable | 141,802 | ||
Other assets | 347 | ||
85,288,500 | |||
Liabilities | |||
Payable for investments purchased | 1,605,123 | ||
Payable for capital shares redeemed | 198,755 | ||
Accrued management fees | 75,327 | ||
Distribution and service fees payable | 7,830 | ||
1,887,035 | |||
Net Assets | $ | 83,401,465 | |
Net Assets Consist of: | |||
Capital (par value and paid-in surplus) | $ | 83,187,036 | |
Distributions in excess of net investment income | (543,041 | ) | |
Accumulated net realized loss | (4,407,746 | ) | |
Net unrealized appreciation | 5,165,216 | ||
$ | 83,401,465 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | ||||
Investor Class, $0.01 Par Value | $53,287,298 | 4,819,399 | $11.06 | |||
I Class, $0.01 Par Value | $2,734,425 | 247,321 | $11.06 | |||
Y Class, $0.01 Par Value | $4,982 | 451 | $11.05 | |||
A Class, $0.01 Par Value | $13,630,997 | 1,232,790 | $11.06* | |||
C Class, $0.01 Par Value | $5,737,512 | 519,512 | $11.04 | |||
R Class, $0.01 Par Value | $118,822 | 10,739 | $11.06 | |||
R5 Class, $0.01 Par Value | $4,977 | 450 | $11.06 | |||
R6 Class, $0.01 Par Value | $7,882,452 | 713,092 | $11.05 |
*Maximum offering price $11.73 (net asset value divided by 0.9425).
See Notes to Financial Statements.
9
Statement of Operations |
FOR THE SIX MONTHS ENDED APRIL 30, 2017 (UNAUDITED) | |||
Investment Income (Loss) | |||
Income: | |||
Dividends (net of foreign taxes withheld of $59,268) | $ | 1,704,861 | |
Interest | 848 | ||
1,705,709 | |||
Expenses: | |||
Management fees | 525,624 | ||
Distribution and service fees: | |||
A Class | 18,660 | ||
C Class | 32,552 | ||
R Class | 263 | ||
Directors' fees and expenses | 1,319 | ||
Other expenses | 1,448 | ||
579,866 | |||
Fees waived(1) | (36,160 | ) | |
543,706 | |||
Net investment income (loss) | 1,162,003 | ||
Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investment transactions | (1,271,768 | ) | |
Foreign currency transactions | (21,312 | ) | |
(1,293,080 | ) | ||
Change in net unrealized appreciation (depreciation) on: | |||
Investments | 696,311 | ||
Translation of assets and liabilities in foreign currencies | 5,070 | ||
701,381 | |||
Net realized and unrealized gain (loss) | (591,699 | ) | |
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 570,304 |
(1) | Amount consists of $23,259, $1,041, $5,971, $2,604, $42 and $3,243 for the Investor Class, I Class, A Class, C Class, R Class and R6 Class, respectively. The waiver amounts for the Y Class and R5 Class were less than $0.50. |
See Notes to Financial Statements.
10
Statement of Changes in Net Assets |
SIX MONTHS ENDED APRIL 30, 2017 (UNAUDITED) AND YEAR ENDED OCTOBER 31, 2016 | ||||||
Increase (Decrease) in Net Assets | April 30, 2017 | October 31, 2016 | ||||
Operations | ||||||
Net investment income (loss) | $ | 1,162,003 | $ | 1,353,012 | ||
Net realized gain (loss) | (1,293,080 | ) | 4,148,310 | |||
Change in net unrealized appreciation (depreciation) | 701,381 | (4,132,844 | ) | |||
Net increase (decrease) in net assets resulting from operations | 570,304 | 1,368,478 | ||||
Distributions to Shareholders | ||||||
From net investment income: | ||||||
Investor Class | (2,730,807 | ) | (2,084,369 | ) | ||
I Class | (110,990 | ) | (129,457 | ) | ||
A Class | (635,362 | ) | (553,119 | ) | ||
C Class | (231,702 | ) | (140,545 | ) | ||
R Class | (3,707 | ) | (5,959 | ) | ||
R6 Class | (410,259 | ) | (310,389 | ) | ||
Decrease in net assets from distributions | (4,122,827 | ) | (3,223,838 | ) | ||
Capital Share Transactions | ||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | (15,646,075 | ) | (8,501,328 | ) | ||
Net increase (decrease) in net assets | (19,198,598 | ) | (10,356,688 | ) | ||
Net Assets | ||||||
Beginning of period | 102,600,063 | 112,956,751 | ||||
End of period | $ | 83,401,465 | $ | 102,600,063 | ||
Undistributed (distributions in excess of) net investment income | $ | (543,041 | ) | $ | 2,417,783 |
See Notes to Financial Statements.
11
Notes to Financial Statements |
APRIL 30, 2017 (UNAUDITED)
1. Organization
American Century Capital Portfolios, 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 Real Estate Fund (the fund) is one fund in a series issued by the corporation. The fund’s investment objective is to seek high total investment return through a combination of capital appreciation and current income.
The fund offers the Investor Class, I Class (formerly Institutional 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. Sale of the Y Class and R5 Class commenced on April 10, 2017.
2. Significant Accounting Policies
The following is a summary of significant accounting policies consistently followed by the fund in preparation of its financial statements. The fund is an investment company and follows accounting and reporting guidance in accordance with accounting principles generally accepted in the United States of America. This may require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from these estimates. Management evaluated the impact of events or transactions occurring through the date the financial statements were issued that would merit recognition or disclosure.
Investment Valuations — The fund determines the fair value of its investments and computes its net asset value per share at the close of regular trading (usually 4 p.m. Eastern time) on the New York Stock Exchange (NYSE) on each day the NYSE is open. The Board of Directors has adopted valuation policies and procedures to guide the investment advisor in the fund’s investment valuation process and to provide methodologies for the oversight of the fund’s pricing function.
Equity securities that are listed or traded on a domestic securities exchange are valued at the last reported sales price or at the official closing price as provided by the exchange. Equity securities traded on foreign securities exchanges are generally valued at the closing price of such securities on the exchange where primarily traded or at the close of the NYSE, if that is earlier. If no last sales price is reported, or if local convention or regulation so provides, the mean of the latest bid and asked prices may be used. Securities traded over-the-counter are valued at the mean of the latest bid and asked prices, the last sales price, or the official closing price. Equity securities initially expressed in local currencies are translated into U.S. dollars at the mean of the appropriate currency exchange rate at the close of the NYSE as provided by an independent pricing service.
Open-end management investment companies are valued at the reported net asset value per share. Repurchase agreements are valued at cost, which approximates fair value.
If the fund determines that the market price for an investment is not readily available or the valuation methods mentioned above do not reflect an investment’s fair value, such investment is valued as determined in good faith by the Board of Directors or its delegate, in accordance with policies and procedures adopted by the Board of Directors. In its determination of fair value, the fund may review several factors including, but not limited to, market information regarding the specific investment or comparable investments and correlation with other investment types, futures indices or general market indicators. Circumstances that may cause the fund to use these procedures to value an investment include, but are not limited to: an investment has been declared in default or is distressed; trading in a security has been suspended during the trading day or a security is not actively trading on its principal exchange; prices received from a regular pricing source are deemed unreliable; or there is a foreign market holiday and no trading occurred.
The fund monitors for significant events occurring after the close of an investment’s primary exchange but before the fund’s net asset value per share is determined. Significant events may include, but are not limited to: corporate announcements and transactions; governmental action and political unrest that could impact a specific investment or an investment sector; or armed conflicts, natural disasters and similar events that could affect investments in a specific country or region. The fund also monitors for significant fluctuations between
12
domestic and foreign markets, as evidenced by the U.S. market or such other indicators that the Board of Directors, or its delegate, deems appropriate. If significant fluctuations in foreign markets are identified, the fund may apply a model-derived factor to the closing price of equity securities traded on foreign securities exchanges. The factor is based on observable market data as provided by an independent pricing service.
Security Transactions — Security transactions are accounted for as of the trade date. Net realized gains and losses are determined on the identified cost basis, which is also used for federal income tax purposes.
Investment Income — Dividend income less foreign taxes withheld, if any, is recorded as of the ex-dividend date. Distributions received on securities that represent a return of capital or long-term capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The fund may estimate the components of distributions received that may be considered nontaxable distributions or long-term capital gain distributions for income tax purposes. Interest income is recorded on the accrual basis and includes accretion of discounts and amortization of premiums.
Foreign Currency Translations — All assets and liabilities initially expressed in foreign currencies are translated into U.S. dollars at prevailing exchange rates at period end. The fund may enter into spot foreign currency exchange contracts to facilitate transactions denominated in a foreign currency. Purchases and sales of investment securities, dividend and interest income, spot foreign currency exchange contracts, and expenses are translated at the rates of exchange prevailing on the respective dates of such transactions. Net realized and unrealized foreign currency exchange gains or losses related to investment securities are a component of net realized gain (loss) on investment transactions and change in net unrealized appreciation (depreciation) on investments, respectively.
Repurchase Agreements — The fund may enter into repurchase agreements with institutions that American Century Investment Management, Inc. (ACIM) (the investment advisor) has determined are creditworthy pursuant to criteria adopted by the Board of Directors. The fund requires that the collateral, represented by securities, received in a repurchase transaction be transferred to the custodian in a manner sufficient to enable the fund to obtain those securities in the event of a default under the repurchase agreement. ACIM monitors, on a daily basis, the securities transferred to ensure the value, including accrued interest, of the securities under each repurchase agreement is equal to or greater than amounts owed to the fund under each repurchase agreement.
Joint Trading Account — Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the fund, along with certain other funds in the American Century Investments family of funds, may transfer uninvested cash balances into a joint trading account. These balances are invested in one or more repurchase agreements that are collateralized by U.S. Treasury or Agency obligations.
Income Tax Status — It is the fund’s policy to distribute substantially all net investment income and net realized gains to shareholders and to otherwise qualify as a regulated investment company under provisions of the Internal Revenue Code. Accordingly, no provision has been made for income taxes. The fund files U.S. federal, state, local and non-U.S. tax returns as applicable. The fund's tax returns are subject to examination by the relevant taxing authority until expiration of the applicable statute of limitations, which is generally three years from the date of filing but can be longer in certain jurisdictions. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination and for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Multiple Class — All shares of the fund represent an equal pro rata interest in the net assets of the class to which such shares belong, and have identical voting, dividend, liquidation and other rights and the same terms and conditions, except for class specific expenses and exclusive rights to vote on matters affecting only individual classes. Income, non-class specific expenses, and realized and unrealized capital gains and losses of the fund are allocated to each class of shares based on their relative net assets.
Distributions to Shareholders — Distributions from net investment income and net realized gains, if any, are generally declared and paid annually.
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.
13
3. Fees and Transactions with Related Parties
Certain officers and directors of the corporation are also officers and/or directors of American Century Companies, Inc. (ACC). The corporation’s investment advisor, ACIM, the corporation's distributor, American Century Investment Services, Inc. (ACIS), and the corporation’s transfer agent, American Century Services, LLC, are wholly owned, directly or indirectly, by ACC.
Management Fees — The corporation has entered into a management agreement with ACIM, under which ACIM provides the fund with investment advisory and management services in exchange for a single, unified management fee (the fee) per class. The agreement provides that all expenses of managing and operating the fund, except distribution and service fees, brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), and extraordinary expenses, will be paid by ACIM. The fee is computed and accrued daily based on each class's daily net assets and paid monthly in arrears. The difference in the fee among the classes is a result of their separate arrangements for 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. During the period ended April 30, 2017, the investment advisor agreed to waive 0.08% of the fund's management fee. The investment advisor expects this waiver to continue until April 9, 2018 and cannot terminate it prior to such date without the approval of the Board of Directors.
The annual management fee and the effective annual management fee after waiver for each class for the period ended April 30, 2017 are as follows:
Class | Annual Management Fee | Effective Annual Management Fee After Waiver |
Investor Class | 1.20% | 1.12% |
I Class | 1.00% | 0.92% |
Y Class | 0.85% | 0.77% |
A Class | 1.20% | 1.12% |
C Class | 1.20% | 1.12% |
R Class | 1.20% | 1.12% |
R5 Class | 1.00% | 0.92% |
R6 Class | 0.85% | 0.77% |
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 April 30, 2017 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 $130,968 and $492,067, respectively. The effect of interfund transactions on the Statement of Operations was $39,827 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 April 30, 2017 were $101,767,945 and $120,316,114, respectively.
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5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended April 30, 2017(1) | Year ended October 31, 2016 | |||||||||
Shares | Amount | Shares | Amount | |||||||
Investor Class/Shares Authorized | 50,000,000 | 50,000,000 | ||||||||
Sold | 704,628 | $ | 7,720,304 | 2,296,594 | $ | 26,402,642 | ||||
Issued in reinvestment of distributions | 229,869 | 2,448,105 | 160,768 | 1,789,344 | ||||||
Redeemed | (2,034,334 | ) | (22,291,025 | ) | (2,801,145 | ) | (31,882,630 | ) | ||
(1,099,837 | ) | (12,122,616 | ) | (343,783 | ) | (3,690,644 | ) | |||
I Class/Shares Authorized | 20,000,000 | 20,000,000 | ||||||||
Sold | 65,044 | 720,039 | 110,455 | 1,284,019 | ||||||
Issued in reinvestment of distributions | 9,939 | 105,753 | 11,297 | 125,737 | ||||||
Redeemed | (74,141 | ) | (823,074 | ) | (247,167 | ) | (2,855,718 | ) | ||
842 | 2,718 | (125,415 | ) | (1,445,962 | ) | |||||
Y Class/Shares Authorized | 50,000,000 | N/A | ||||||||
Sold | 451 | 5,000 | ||||||||
A Class/Shares Authorized | 15,000,000 | 15,000,000 | ||||||||
Sold | 123,568 | 1,353,235 | 326,874 | 3,746,570 | ||||||
Issued in reinvestment of distributions | 58,376 | 622,286 | 48,559 | 540,949 | ||||||
Redeemed | (404,741 | ) | (4,433,524 | ) | (753,271 | ) | (8,692,908 | ) | ||
(222,797 | ) | (2,458,003 | ) | (377,838 | ) | (4,405,389 | ) | |||
C Class/Shares Authorized | 10,000,000 | 10,000,000 | ||||||||
Sold | 17,886 | 194,676 | 76,087 | 889,900 | ||||||
Issued in reinvestment of distributions | 16,027 | 171,167 | 9,381 | 104,697 | ||||||
Redeemed | (154,153 | ) | (1,689,728 | ) | (69,033 | ) | (788,880 | ) | ||
(120,240 | ) | (1,323,885 | ) | 16,435 | 205,717 | |||||
R Class/Shares Authorized | 10,000,000 | 10,000,000 | ||||||||
Sold | 2,467 | 27,223 | 4,495 | 51,350 | ||||||
Issued in reinvestment of distributions | 347 | 3,707 | 534 | 5,959 | ||||||
Redeemed | (1,352 | ) | (14,957 | ) | (16,923 | ) | (189,151 | ) | ||
1,462 | 15,973 | (11,894 | ) | (131,842 | ) | |||||
R5 Class/Shares Authorized | 50,000,000 | N/A | ||||||||
Sold | 450 | 5,000 | ||||||||
R6 Class/Shares Authorized | 20,000,000 | 20,000,000 | ||||||||
Sold | 123,350 | 1,354,625 | 400,300 | 4,693,987 | ||||||
Issued in reinvestment of distributions | 38,594 | 410,259 | 27,913 | 310,389 | ||||||
Redeemed | (140,745 | ) | (1,535,146 | ) | (350,240 | ) | (4,037,584 | ) | ||
21,199 | 229,738 | 77,973 | 966,792 | |||||||
Net increase (decrease) | (1,418,470 | ) | $ | (15,646,075 | ) | (764,522 | ) | $ | (8,501,328 | ) |
(1) | April 10, 2017 (commencement of sale) through April 30, 2017 for the Y Class and R5 Class. |
15
6. Fair Value Measurements
The fund’s investments valuation process is based on several considerations and may use multiple inputs to determine the fair value of the investments held by the fund. In conformity with accounting principles generally accepted in the United States of America, the inputs used to determine a valuation are classified into three broad levels.
• | Level 1 valuation inputs consist of unadjusted quoted prices in an active market for identical investments. |
• | Level 2 valuation inputs consist of direct or indirect observable market data (including quoted prices for comparable investments, evaluations of subsequent market events, interest rates, prepayment speeds, credit risk, etc.). These inputs also consist of quoted prices for identical investments initially expressed in local currencies that are adjusted through translation into U.S. dollars. |
• | Level 3 valuation inputs consist of unobservable data (including a fund’s own assumptions). |
The level classification is based on the lowest level input that is significant to the fair valuation measurement. The valuation inputs are not necessarily an indication of the risks associated with investing in these securities or other financial instruments. There were no significant transfers between levels during the period.
The following is a summary of the level classifications as of period end. The Schedule of Investments provides additional information on the fund’s portfolio holdings.
Level 1 | Level 2 | Level 3 | ||||||
Assets | ||||||||
Investment Securities | ||||||||
Common Stocks | ||||||||
United States | $ | 41,233,877 | — | — | ||||
Other Countries | — | $ | 41,188,246 | — | ||||
Temporary Cash Investments | 7,407 | 266,848 | — | |||||
$ | 41,241,284 | $ | 41,455,094 | — |
7. Risk Factors
The fund concentrates its investments in a narrow segment of the total market. Because of this, the fund is subject to certain additional risks as compared to investing in a more diversified portfolio of investments. The fund may be subject to certain risks similar to those associated with direct investment in real estate including but not limited to: local or regional economic conditions, changes in zoning laws, changes in property values, property tax increases, overbuilding, increased competition, environmental contamination, natural disasters, and interest rate risk.
There are certain risks involved in investing in foreign securities. These risks include those resulting from future adverse political, social and economic developments, fluctuations in currency exchange rates, the possible imposition of exchange controls, and other foreign laws or restrictions. Investing in emerging markets may accentuate these risks.
The fund’s investment process may result in high portfolio turnover, which could mean high transaction costs, affecting both performance and capital gains tax liabilities to investors.
16
8. Federal Tax Information
The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
As of period end, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $ | 79,735,569 | |
Gross tax appreciation of investments | $ | 4,177,696 | |
Gross tax depreciation of investments | (1,216,887 | ) | |
Net tax appreciation (depreciation) of investments | $ | 2,960,809 |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the realization to ordinary income for tax purposes of unrealized gains on investments in passive foreign investment companies.
As of October 31, 2016, the fund had accumulated short-term capital losses of $(2,139,940), which represent net capital loss carryovers that may be used to offset future realized capital gains for federal income tax purposes. The capital loss carryovers may be carried forward for an unlimited period. Future capital loss carryover utilization in any given year may be subject to Internal Revenue Code limitations.
9. Recently Issued Accounting Guidance
In October 2016, the Securities and Exchange Commission adopted new rules and forms as well as amendments to its rules and forms to modernize the reporting and disclosure of information by registered investment companies. The amendments to Regulation S-X will require standardized, enhanced disclosure about derivatives in investment company financial statements, as well as other provisions. Compliance with the amendments is effective on August 1, 2017. Management is currently evaluating the impact that adopting the amendments will have on the financial statement disclosures.
17
Financial Highlights |
For a Share Outstanding Throughout the Years Ended October 31 (except as noted) | |||||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||||
Income From Investment Operations: | Distributions From: | Ratio to Average Net Assets of: | |||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | 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 | |||||||||||||||||
2017(3) | $11.45 | 0.14 | (0.05) | 0.09 | (0.48) | — | (0.48) | $11.06 | 0.96% | 1.12%(4) | 1.20%(4) | 2.65%(4) | 2.57%(4) | 113% | $53,287 | ||
2016 | $11.62 | 0.15 | 0.01 | 0.16 | (0.33) | — | (0.33) | $11.45 | 1.50% | 1.16% | 1.21% | 1.31% | 1.26% | 250% | $67,798 | ||
2015 | $12.03 | 0.17 | 0.02 | 0.19 | (0.45) | (0.15) | (0.60) | $11.62 | 1.70% | 1.20% | 1.21% | 1.39% | 1.38% | 248% | $72,769 | ||
2014 | $11.54 | 0.13 | 0.88 | 1.01 | (0.37) | (0.15) | (0.52) | $12.03 | 9.29% | 1.20% | 1.20% | 1.15% | 1.15% | 275% | $69,207 | ||
2013 | $10.90 | 0.13 | 1.12 | 1.25 | (0.36) | (0.25) | (0.61) | $11.54 | 11.99% | 1.20% | 1.20% | 1.15% | 1.15% | 392% | $43,927 | ||
2012(5) | $9.75 | 0.07 | 1.08 | 1.15 | — | — | — | $10.90 | 11.68% | 1.20%(4) | 1.20%(4) | 1.15%(4) | 1.15%(4) | 264% | $23,143 | ||
2012(6) | $10.00 | 0.14 | (0.32)(7) | (0.18) | (0.07) | — | (0.07) | $9.75 | (1.57)% | 1.21%(4) | 1.21%(4) | 1.63%(4) | 1.63%(4) | 462% | $7,322 | ||
I Class(8) | |||||||||||||||||
2017(3) | $11.47 | 0.15 | (0.06) | 0.09 | (0.50) | — | (0.50) | $11.06 | 0.99% | 0.92%(4) | 1.00%(4) | 2.85%(4) | 2.77%(4) | 113% | $2,734 | ||
2016 | $11.63 | 0.18 | 0.02 | 0.20 | (0.36) | — | (0.36) | $11.47 | 1.79% | 0.96% | 1.01% | 1.51% | 1.46% | 250% | $2,826 | ||
2015 | $12.05 | 0.19 | 0.02 | 0.21 | (0.48) | (0.15) | (0.63) | $11.63 | 1.83% | 1.00% | 1.01% | 1.59% | 1.58% | 248% | $4,325 | ||
2014 | $11.56 | 0.15 | 0.88 | 1.03 | (0.39) | (0.15) | (0.54) | $12.05 | 9.50% | 1.00% | 1.00% | 1.35% | 1.35% | 275% | $8,848 | ||
2013 | $10.91 | 0.15 | 1.13 | 1.28 | (0.38) | (0.25) | (0.63) | $11.56 | 12.30% | 1.00% | 1.00% | 1.35% | 1.35% | 392% | $7,916 | ||
2012(5) | $9.75 | 0.08 | 1.08 | 1.16 | — | — | — | $10.91 | 11.90% | 1.00%(4) | 1.00%(4) | 1.35%(4) | 1.35%(4) | 264% | $2,711 | ||
2012(6) | $10.00 | 0.17 | (0.33)(7) | (0.16) | (0.09) | — | (0.09) | $9.75 | (1.47)% | 1.01%(4) | 1.01%(4) | 1.83%(4) | 1.83%(4) | 462% | $1,210 |
For a Share Outstanding Throughout the Years Ended October 31 (except as noted) | |||||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||||
Income From Investment Operations: | Distributions From: | Ratio to Average Net Assets of: | |||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | 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) | |||
Y Class | |||||||||||||||||
2017(9) | $11.09 | —(11) | (0.04) | (0.04) | — | — | — | $11.05 | (0.36)% | 0.77%(4) | 0.85%(4) | 0.78%(4) | 0.70%(4) | 113%(10) | $5 | ||
A Class | |||||||||||||||||
2017(3) | $11.44 | 0.13 | (0.06) | 0.07 | (0.45) | — | (0.45) | $11.06 | 0.79% | 1.37%(4) | 1.45%(4) | 2.40%(4) | 2.32%(4) | 113% | $13,631 | ||
2016 | $11.60 | 0.12 | 0.03 | 0.15 | (0.31) | — | (0.31) | $11.44 | 1.33% | 1.41% | 1.46% | 1.06% | 1.01% | 250% | $16,651 | ||
2015 | $12.02 | 0.13 | 0.02 | 0.15 | (0.42) | (0.15) | (0.57) | $11.60 | 1.35% | 1.45% | 1.46% | 1.14% | 1.13% | 248% | $21,275 | ||
2014 | $11.53 | 0.11 | 0.87 | 0.98 | (0.34) | (0.15) | (0.49) | $12.02 | 9.02% | 1.45% | 1.45% | 0.90% | 0.90% | 275% | $16,601 | ||
2013 | $10.89 | 0.10 | 1.12 | 1.22 | (0.33) | (0.25) | (0.58) | $11.53 | 11.72% | 1.45% | 1.45% | 0.90% | 0.90% | 392% | $18,926 | ||
2012(5) | $9.76 | 0.06 | 1.07 | 1.13 | — | — | — | $10.89 | 11.58% | 1.45%(4) | 1.45%(4) | 0.90%(4) | 0.90%(4) | 264% | $2,460 | ||
2012(6) | $10.00 | 0.12 | (0.31)(7) | (0.19) | (0.05) | — | (0.05) | $9.76 | (1.82)% | 1.46%(4) | 1.46%(4) | 1.38%(4) | 1.38%(4) | 462% | $700 | ||
C Class | |||||||||||||||||
2017(3) | $11.38 | 0.09 | (0.06) | 0.03 | (0.37) | — | (0.37) | $11.04 | 0.46% | 2.12%(4) | 2.20%(4) | 1.65%(4) | 1.57%(4) | 113% | $5,738 | ||
2016 | $11.55 | 0.03 | 0.02 | 0.05 | (0.22) | — | (0.22) | $11.38 | 0.47% | 2.16% | 2.21% | 0.31% | 0.26% | 250% | $7,282 | ||
2015 | $11.96 | 0.05 | 0.02 | 0.07 | (0.33) | (0.15) | (0.48) | $11.55 | 0.73% | 2.20% | 2.21% | 0.39% | 0.38% | 248% | $7,197 | ||
2014 | $11.47 | 0.02 | 0.88 | 0.90 | (0.26) | (0.15) | (0.41) | $11.96 | 8.12% | 2.20% | 2.20% | 0.15% | 0.15% | 275% | $5,428 | ||
2013 | $10.83 | —(11) | 1.14 | 1.14 | (0.25) | (0.25) | (0.50) | $11.47 | 10.94% | 2.20% | 2.20% | 0.15% | 0.15% | 392% | $2,614 | ||
2012(5) | $9.75 | 0.02 | 1.06 | 1.08 | — | — | — | $10.83 | 11.08% | 2.20%(4) | 2.20%(4) | 0.15%(4) | 0.15%(4) | 264% | $610 | ||
2012(6) | $10.00 | 0.05 | (0.30)(7) | (0.25) | — | — | — | $9.75 | (2.50)% | 2.21%(4) | 2.21%(4) | 0.63%(4) | 0.63%(4) | 462% | $394 |
For a Share Outstanding Throughout the Years Ended October 31 (except as noted) | |||||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||||
Income From Investment Operations: | Distributions From: | Ratio to Average Net Assets of: | |||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Operating Expenses (before expense waiver) | Net Investment Income (Loss) | Net Investment Income (Loss) (before expense waiver) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
R Class | |||||||||||||||||
2017(3) | $11.43 | 0.11 | (0.05) | 0.06 | (0.43) | — | (0.43) | $11.06 | 0.71% | 1.62%(4) | 1.70%(4) | 2.15%(4) | 2.07%(4) | 113% | $119 | ||
2016 | $11.59 | 0.10 | 0.02 | 0.12 | (0.28) | — | (0.28) | $11.43 | 1.07% | 1.66% | 1.71% | 0.81% | 0.76% | 250% | $106 | ||
2015 | $12.01 | 0.11 | 0.01 | 0.12 | (0.39) | (0.15) | (0.54) | $11.59 | 1.08% | 1.70% | 1.71% | 0.89% | 0.88% | 248% | $245 | ||
2014 | $11.52 | 0.08 | 0.87 | 0.95 | (0.31) | (0.15) | (0.46) | $12.01 | 8.74% | 1.70% | 1.70% | 0.65% | 0.65% | 275% | $382 | ||
2013 | $10.87 | 0.08 | 1.12 | 1.20 | (0.30) | (0.25) | (0.55) | $11.52 | 11.55% | 1.70% | 1.70% | 0.65% | 0.65% | 392% | $489 | ||
2012(5) | $9.76 | 0.05 | 1.06 | 1.11 | — | — | — | $10.87 | 11.37% | 1.70%(4) | 1.70%(4) | 0.65%(4) | 0.65%(4) | 264% | $439 | ||
2012(6) | $10.00 | 0.09 | (0.30)(7) | (0.21) | (0.03) | — | (0.03) | $9.76 | (2.07)% | 1.71%(4) | 1.71%(4) | 1.13%(4) | 1.13%(4) | 462% | $393 | ||
R5 Class | |||||||||||||||||
2017(9) | $11.10 | —(11) | (0.04) | (0.04) | — | — | — | $11.06 | (0.36)% | 0.92%(4) | 1.00%(4) | 0.63%(4) | 0.55%(4) | 113%(10) | $5 | ||
R6 Class | |||||||||||||||||
2017(3) | $11.47 | 0.16 | (0.06) | 0.10 | (0.52) | — | (0.52) | $11.05 | 1.14% | 0.77%(4) | 0.85%(4) | 3.00%(4) | 2.92%(4) | 113% | $7,882 | ||
2016 | $11.64 | 0.19 | 0.01 | 0.20 | (0.37) | — | (0.37) | $11.47 | 1.86% | 0.81% | 0.86% | 1.66% | 1.61% | 250% | $7,938 | ||
2015 | $12.06 | 0.18 | 0.04 | 0.22 | (0.49) | (0.15) | (0.64) | $11.64 | 1.99% | 0.85% | 0.86% | 1.74% | 1.73% | 248% | $7,145 | ||
2014 | $11.57 | 0.17 | 0.88 | 1.05 | (0.41) | (0.15) | (0.56) | $12.06 | 9.67% | 0.85% | 0.85% | 1.50% | 1.50% | 275% | $28 | ||
2013(12) | $11.18 | 0.03 | 0.36 | 0.39 | — | — | — | $11.57 | 3.49% | 0.85%(4) | 0.85%(4) | 1.07%(4) | 1.07%(4) | 392%(13) | $26 |
Notes to Financial Highlights |
(1) | Computed using average shares outstanding throughout the period. |
(2) | Total returns are calculated based on the net asset value of the last business day and do not reflect applicable sales charges, if any. Total returns for periods less than one year are not annualized. |
(3) | Six months ended April 30, 2017 (unaudited). |
(4) | Annualized. |
(5) | April 1, 2012 through October 31, 2012. The fund's fiscal year end was changed from March 31 to October 31, resulting in a seven-month annual reporting period. |
(6) | April 29, 2011 (fund inception) through March 31, 2012. |
(7) | Per-share amount was not in accord with the net realized and unrealized gain (loss) for the period because of the timing of transactions in shares of the fund and the amount and timing of per-share net realized and unrealized gain (loss) on such shares. |
(8) | Prior to April 10, 2017, the I Class was referred to as the Institutional Class. |
(9) | April 10, 2017 (commencement of sale) through April 30, 2017 (unaudited). |
(10) | Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the six months ended April 30, 2017. |
(11) | Per-share amount was less than $0.005. |
(12) | July 26, 2013 (commencement of sale) through October 31, 2013. |
(13) | Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended October 31, 2013. |
See Notes to Financial Statements.
Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain IRAs are subject to federal income tax withholding, unless you elect not to have withholding apply. Tax will be withheld on the total amount withdrawn even though you may be receiving amounts that are not subject to withholding, such as nondeductible contributions. In such case, excess amounts of withholding could occur. You may adjust your withholding election so that a greater or lesser amount will be withheld.
If you don’t want us to withhold on this amount, you must notify us to not withhold the federal income tax. You may notify us in writing or in certain situations by telephone or through other electronic means. For systematic withdrawals, your withholding election will remain in effect until revoked or changed by filing a new election. You have the right to revoke your election at any time.
Remember, even if you elect not to have income tax withheld, you are liable for paying income tax on the taxable portion of your withdrawal. If you elect not to have income tax withheld or you don’t have enough income tax withheld, you may be responsible for payment of estimated tax. You may incur penalties under the estimated tax rules if your withholding and estimated tax payments are not sufficient. You can reduce or defer the income tax on a distribution by directly or indirectly rolling such distribution over to another IRA or eligible plan. You should consult your tax advisor for additional information.
State tax will be withheld if, at the time of your distribution, your address is within one of the mandatory withholding states and you have federal income tax withheld (or as otherwise required by state law). State taxes will be withheld from your distribution in accordance with the respective state rules.
Distributions you receive from 403(b), 457 and qualified plans are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
A description of the policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund is available without charge, upon request, by calling 1-800-345-2021. It is also available on the "About Us" page of American Century Investments’ website at americancentury.com and on the Securities and Exchange Commission’s website at sec.gov. Information regarding how the investment advisor voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the "About Us" page at americancentury.com. It is also available at sec.gov.
Quarterly Portfolio Disclosure
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-Q. The fund’s Forms N-Q are available on the SEC’s website at sec.gov, and may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The fund also makes its complete schedule of portfolio holdings for the most recent quarter of its fiscal year available on its website at americancentury.com and, upon request, by calling 1-800-345-2021.
22
Notes |
23
Notes |
24
Contact Us | americancentury.com | |
Automated Information Line | 1-800-345-8765 | |
Investor Services Representative | 1-800-345-2021 or 816-531-5575 | |
Investors Using Advisors | 1-800-378-9878 | |
Business, Not-For-Profit, Employer-Sponsored Retirement Plans | 1-800-345-3533 | |
Banks and Trust Companies, Broker-Dealers, Financial Professionals, Insurance Companies | 1-800-345-6488 | |
Telecommunications Relay Service for the Deaf | 711 | |
American Century Capital Portfolios, Inc. | ||
Investment Advisor: American Century Investment Management, Inc. Kansas City, Missouri | ||
This report and the statements it contains are submitted for the general information of our shareholders. The report is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus. | ||
©2017 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-92368 1706 |
Semiannual Report | |
April 30, 2017 | |
NT Global Real Estate Fund |
Table of Contents |
Any opinions expressed in this report reflect those of the author as of the date of the report, and do not necessarily represent the opinions of American Century Investments® or any other person in the American Century Investments organization. Any such opinions are subject to change at any time based upon market or other conditions and American Century Investments disclaims any responsibility to update such opinions. These opinions may not be relied upon as investment advice and, because investment decisions made by American Century Investments funds are based on numerous factors, may not be relied upon as an indication of trading intent on behalf of any American Century Investments fund. Security examples are used for representational purposes only and are not intended as recommendations to purchase or sell securities. Performance information for comparative indices and securities is provided to American Century Investments by third party vendors. To the best of American Century Investments’ knowledge, such information is accurate at the time of printing.
Fund Characteristics |
APRIL 30, 2017 | |
Top Ten Holdings | % of net assets |
Simon Property Group, Inc. | 4.5% |
AvalonBay Communities, Inc. | 3.5% |
Prologis, Inc. | 3.3% |
Welltower, Inc. | 2.9% |
Realty Income Corp. | 2.9% |
Alexandria Real Estate Equities, Inc. | 2.7% |
Segro plc | 2.5% |
Deutsche Wohnen AG | 2.5% |
Mitsubishi Estate Co. Ltd. | 2.4% |
Unibail-Rodamco SE | 2.4% |
Types of Investments in Portfolio | % of net assets |
Domestic Common Stocks | 49.2% |
Foreign Common Stocks | 48.6% |
Total Common Stocks | 97.8% |
Temporary Cash Investments | 1.2% |
Other Assets and Liabilities | 1.0% |
Investments by Country | % of net assets |
United States | 49.2% |
Japan | 9.7% |
Hong Kong | 7.5% |
United Kingdom | 5.8% |
Australia | 5.3% |
China | 4.0% |
France | 3.9% |
Singapore | 3.0% |
Germany | 2.7% |
Canada | 2.5% |
Other Countries | 4.2% |
Cash and Equivalents* | 2.2% |
*Includes temporary cash investments and other assets and liabilities. |
2
Shareholder Fee Example |
Fund shareholders may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption/exchange fees; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in your fund and to compare these costs with the ongoing cost of investing in other mutual funds.
The example is based on an investment of $1,000 made at the beginning of the period and held for the entire period from November 1, 2016 to April 30, 2017.
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.
3
Beginning Account Value 11/1/16 | Ending Account Value 4/30/17 | Expenses Paid During Period(1) 11/1/16 - 4/30/17 | Annualized Expense Ratio(1) | |
Actual | ||||
Investor Class (after waiver) | $1,000 | $1,007.40 | $5.57 | 1.12% |
Investor Class (before waiver) | $1,000 | $1,007.40(2) | $5.97 | 1.20% |
Institutional Class (after waiver) | $1,000 | $1,009.50 | $4.58 | 0.92% |
Institutional Class (before waiver) | $1,000 | $1,009.50(2) | $4.98 | 1.00% |
R6 Class (after waiver) | $1,000 | $1,009.90 | $3.84 | 0.77% |
R6 Class (before waiver) | $1,000 | $1,009.90(2) | $4.24 | 0.85% |
Hypothetical | ||||
Investor Class (after waiver) | $1,000 | $1,019.24 | $5.61 | 1.12% |
Investor Class (before waiver) | $1,000 | $1,018.84 | $6.01 | 1.20% |
Institutional Class (after waiver) | $1,000 | $1,020.23 | $4.61 | 0.92% |
Institutional Class (before waiver) | $1,000 | $1,019.84 | $5.01 | 1.00% |
R6 Class (after waiver) | $1,000 | $1,020.98 | $3.86 | 0.77% |
R6 Class (before waiver) | $1,000 | $1,020.58 | $4.26 | 0.85% |
(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 181, the number of days in the most recent fiscal half-year, divided by 365, to reflect the one-half year period. |
(2) | Ending account value assumes the return earned after waiver and would have been lower if a portion of the fees had not been waived. |
4
Schedule of Investments |
APRIL 30, 2017 (UNAUDITED)
Shares | Value | ||||
COMMON STOCKS — 97.8% | |||||
Australia — 5.3% | |||||
Charter Hall Group | 687,852 | $ | 2,920,411 | ||
Dexus Property Group | 809,444 | 6,182,340 | |||
Goodman Group | 1,164,038 | 7,068,933 | |||
Scentre Group | 1,035,702 | 3,342,550 | |||
Westfield Corp. | 308,273 | 2,095,980 | |||
21,610,214 | |||||
Brazil — 0.8% | |||||
Iguatemi Empresa de Shopping Centers SA | 330,200 | 3,444,471 | |||
Canada — 2.5% | |||||
Brookfield Asset Management, Inc., Class A | 90,794 | 3,356,262 | |||
Chartwell Retirement Residences | 171,059 | 1,947,370 | |||
H&R Real Estate Investment Trust | 131,330 | 2,228,199 | |||
Pure Industrial Real Estate Trust | 606,066 | 2,899,242 | |||
10,431,073 | |||||
China — 4.0% | |||||
China Overseas Land & Investment Ltd. | 552,000 | 1,603,836 | |||
China Resources Land Ltd. | 1,670,000 | 4,637,487 | |||
Country Garden Holdings Co. | 4,071,000 | 3,872,981 | |||
Guangzhou R&F Properties Co. Ltd. | 1,220,400 | 2,055,351 | |||
KWG Property Holding Ltd. | 1,344,500 | 1,016,367 | |||
Longfor Properties Co. Ltd. | 1,837,500 | 3,184,416 | |||
16,370,438 | |||||
Finland — 0.7% | |||||
Sponda Oyj | 611,949 | 2,701,046 | |||
France — 3.9% | |||||
Gecina SA | 45,839 | 6,521,173 | |||
Unibail-Rodamco SE | 39,415 | 9,679,639 | |||
16,200,812 | |||||
Germany — 2.7% | |||||
Deutsche Wohnen AG | 302,881 | 10,356,445 | |||
TLG Immobilien AG | 31,722 | 641,855 | |||
10,998,300 | |||||
Hong Kong — 7.5% | |||||
Cheung Kong Property Holdings Ltd. | 644,500 | 4,623,487 | |||
Hang Lung Properties Ltd. | 1,318,000 | 3,456,672 | |||
Hongkong Land Holdings Ltd. | 600,700 | 4,631,397 | |||
Link REIT | 899,000 | 6,466,545 | |||
Sun Hung Kai Properties Ltd. | 436,000 | 6,541,387 | |||
Wharf Holdings Ltd. (The) | 575,000 | 4,912,192 | |||
30,631,680 | |||||
Indonesia — 0.3% | |||||
Bumi Serpong Damai Tbk PT | 10,306,400 | 1,384,084 | |||
Japan — 9.7% | |||||
Activia Properties, Inc. | 1,025 | 4,882,485 | |||
Daiwa House REIT Investment Corp. | 2,203 | 5,569,010 |
5
Shares | Value | ||||
Hulic Co. Ltd. | 271,200 | $ | 2,554,474 | ||
Hulic Reit, Inc. | 3,186 | 5,115,891 | |||
Mitsubishi Estate Co. Ltd. | 519,000 | 9,916,753 | |||
Nippon Building Fund, Inc. | 591 | 3,143,871 | |||
Orix JREIT, Inc. | 1,912 | 3,032,443 | |||
Sumitomo Realty & Development Co. Ltd. | 209,000 | 5,635,829 | |||
39,850,756 | |||||
Philippines — 0.8% | |||||
Ayala Land, Inc. | 4,541,500 | 3,208,275 | |||
Singapore — 3.0% | |||||
Ascendas Real Estate Investment Trust | 2,010,800 | 3,684,392 | |||
CapitaLand Ltd. | 1,201,700 | 3,234,006 | |||
City Developments Ltd. | 375,700 | 2,901,480 | |||
Global Logistic Properties Ltd. | 1,259,400 | 2,596,051 | |||
12,415,929 | |||||
Spain — 1.2% | |||||
Inmobiliaria Colonial SA | 637,221 | 4,941,473 | |||
Sweden — 0.4% | |||||
Hufvudstaden AB, A Shares | 110,065 | 1,724,794 | |||
United Kingdom — 5.8% | |||||
British Land Co. plc (The) | 433,797 | 3,688,568 | |||
Derwent London plc | 60,933 | 2,323,416 | |||
Safestore Holdings plc | 840,912 | 4,411,052 | |||
Segro plc | 1,658,771 | 10,434,968 | |||
UNITE Group plc (The) | 363,895 | 3,049,418 | |||
23,907,422 | |||||
United States — 49.2% | |||||
Alexandria Real Estate Equities, Inc. | 98,158 | 11,043,757 | |||
American Homes 4 Rent | 122,742 | 2,829,203 | |||
American Tower Corp. | 16,924 | 2,131,409 | |||
Apartment Investment & Management Co., Class A | 201,542 | 8,815,447 | |||
AvalonBay Communities, Inc. | 74,799 | 14,199,842 | |||
Boston Properties, Inc. | 56,683 | 7,176,068 | |||
Colony Starwood Homes | 249,221 | 8,615,570 | |||
CyrusOne, Inc. | 73,687 | 4,026,258 | |||
Digital Realty Trust, Inc. | 56,616 | 6,501,781 | |||
Duke Realty Corp. | 173,640 | 4,815,037 | |||
Equinix, Inc. | 10,677 | 4,459,783 | |||
Essex Property Trust, Inc. | 21,625 | 5,286,664 | |||
Extra Space Storage, Inc. | 97,797 | 7,386,607 | |||
GGP, Inc. | 348,249 | 7,525,661 | |||
Hilton Worldwide Holdings, Inc. | 75,571 | 4,456,422 | |||
Hudson Pacific Properties, Inc. | 207,754 | 7,138,427 | |||
Paramount Group, Inc. | 329,335 | 5,401,094 | |||
Physicians Realty Trust | 202,852 | 3,984,013 | |||
Prologis, Inc. | 245,373 | 13,350,745 | |||
Public Storage | 16,665 | 3,489,318 | |||
Rayonier, Inc. | 72,655 | 2,050,324 | |||
Realty Income Corp. | 202,193 | 11,797,962 | |||
Regency Centers Corp. | 105,140 | 6,642,745 | |||
Simon Property Group, Inc. | 112,751 | 18,633,230 |
6
Shares | Value | ||||
Starwood Property Trust, Inc. | 155,477 | $ | 3,527,773 | ||
Sunstone Hotel Investors, Inc. | 278,978 | 4,153,982 | |||
Urban Edge Properties | 126,482 | 3,225,291 | |||
Ventas, Inc. | 111,960 | 7,166,560 | |||
Welltower, Inc. | 167,308 | 11,952,484 | |||
201,783,457 | |||||
TOTAL COMMON STOCKS (Cost $381,613,539) | 401,604,224 | ||||
TEMPORARY CASH INVESTMENTS — 1.2% | |||||
Repurchase Agreement, BMO Capital Markets Corp., (collateralized by various U.S. Treasury obligations, 0.75% - 2.875%, 6/30/17 - 5/15/43, valued at $2,440,975), in a joint trading account at 0.68%, dated 4/28/17, due 5/1/17 (Delivery value $2,393,793) | 2,393,657 | ||||
Repurchase Agreement, Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 3.00%, 5/15/45, valued at $2,445,672), at 0.22%, dated 4/28/17, due 5/1/17 (Delivery value $2,395,044) | 2,395,000 | ||||
State Street Institutional U.S. Government Money Market Fund, Premier Class | 1,896 | 1,896 | |||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $4,790,553) | 4,790,553 | ||||
TOTAL INVESTMENT SECURITIES — 99.0% (Cost $386,404,092) | 406,394,777 | ||||
OTHER ASSETS AND LIABILITIES — 1.0% | 4,115,878 | ||||
TOTAL NET ASSETS — 100.0% | $ | 410,510,655 |
SUB-INDUSTRY ALLOCATION | ||
(as a % of net assets) | ||
Retail REITs | 17.7 | % |
Office REITs | 11.0 | % |
Residential REITs | 10.4 | % |
Industrial REITs | 10.4 | % |
Diversified Real Estate Activities | 9.8 | % |
Specialized REITs | 8.5 | % |
Real Estate Operating Companies | 8.1 | % |
Diversified REITs | 6.6 | % |
Health Care REITs | 5.6 | % |
Real Estate Development | 5.4 | % |
Hotels, Resorts and Cruise Lines | 1.1 | % |
Hotel and Resort REITs | 1.0 | % |
Mortgage REITs | 0.9 | % |
Asset Management and Custody Banks | 0.8 | % |
Health Care Facilities | 0.5 | % |
Cash and Equivalents* | 2.2 | % |
*Includes temporary cash investments and other assets and liabilities.
See Notes to Financial Statements.
7
Statement of Assets and Liabilities |
APRIL 30, 2017 (UNAUDITED) | |||
Assets | |||
Investment securities, at value (cost of $386,404,092) | $ | 406,394,777 | |
Foreign currency holdings, at value (cost of $193,357) | 194,325 | ||
Receivable for investments sold | 11,345,666 | ||
Receivable for capital shares sold | 132,104 | ||
Dividends and interest receivable | 699,912 | ||
418,766,784 | |||
Liabilities | |||
Payable for investments purchased | 7,929,721 | ||
Accrued management fees | 326,408 | ||
8,256,129 | |||
Net Assets | $ | 410,510,655 | |
Net Assets Consist of: | |||
Capital (par value and paid-in surplus) | $ | 438,322,715 | |
Distributions in excess of net investment income | (1,089,398 | ) | |
Accumulated net realized loss | (46,718,364 | ) | |
Net unrealized appreciation | 19,995,702 | ||
$ | 410,510,655 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | ||||
Investor Class, $0.01 Par Value | $101,717,284 | 11,091,824 | $9.17 | |||
Institutional Class, $0.01 Par Value | $275,776,749 | 30,057,274 | $9.18 | |||
R6 Class, $0.01 Par Value | $33,016,622 | 3,597,135 | $9.18 |
See Notes to Financial Statements.
8
Statement of Operations |
FOR THE SIX MONTHS ENDED APRIL 30, 2017 (UNAUDITED) | |||
Investment Income (Loss) | |||
Income: | |||
Dividends (net of foreign taxes withheld of $266,887) | $ | 7,172,616 | |
Interest | 7,818 | ||
7,180,434 | |||
Expenses: | |||
Management fees | 2,091,616 | ||
Directors' fees and expenses | 5,740 | ||
Other expenses | 4,713 | ||
2,102,069 | |||
Fees waived(1) | (160,570 | ) | |
1,941,499 | |||
Net investment income (loss) | 5,238,935 | ||
Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investment transactions | (9,337,858 | ) | |
Foreign currency transactions | (103,698 | ) | |
(9,441,556 | ) | ||
Change in net unrealized appreciation (depreciation) on: | |||
Investments | 9,130,242 | ||
Translation of assets and liabilities in foreign currencies | 11,692 | ||
9,141,934 | |||
Net realized and unrealized gain (loss) | (299,622 | ) | |
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 4,939,313 |
(1) | Amount consists of $42,644, $106,128 and $11,798 for the Investor Class, Institutional Class and R6 Class, respectively. |
See Notes to Financial Statements.
9
Statement of Changes in Net Assets |
SIX MONTHS ENDED APRIL 30, 2017 (UNAUDITED) AND YEAR ENDED OCTOBER 31, 2016 | ||||||
Increase (Decrease) in Net Assets | April 30, 2017 | October 31, 2016 | ||||
Operations | ||||||
Net investment income (loss) | $ | 5,238,935 | $ | 5,564,570 | ||
Net realized gain (loss) | (9,441,556 | ) | 684,912 | |||
Change in net unrealized appreciation (depreciation) | 9,141,934 | 1,963,174 | ||||
Net increase (decrease) in net assets resulting from operations | 4,939,313 | 8,212,656 | ||||
Distributions to Shareholders | ||||||
From net investment income: | ||||||
Investor Class | (4,532,618 | ) | (3,011,060 | ) | ||
Institutional Class | (11,286,980 | ) | (6,093,250 | ) | ||
R6 Class | (1,286,466 | ) | (379,807 | ) | ||
Decrease in net assets from distributions | (17,106,064 | ) | (9,484,117 | ) | ||
Capital Share Transactions | ||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | 32,472,933 | 45,378,066 | ||||
Net increase (decrease) in net assets | 20,306,182 | 44,106,605 | ||||
Net Assets | ||||||
Beginning of period | 390,204,473 | 346,097,868 | ||||
End of period | $ | 410,510,655 | $ | 390,204,473 | ||
Undistributed (distributions in excess of) net investment income | $ | (1,089,398 | ) | $ | 10,777,731 |
See Notes to Financial Statements.
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Notes to Financial Statements |
APRIL 30, 2017 (UNAUDITED)
1. Organization
American Century Capital Portfolios, 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 Global Real Estate Fund (the fund) is one fund in a series issued by the corporation. The fund’s investment objective is to seek high total investment return through a combination of capital appreciation and current income. The fund is not permitted to invest in securities issued by companies assigned the Global Industry Classification Standard for the tobacco industry. The fund offers the Investor Class, Institutional Class and R6 Class.
2. Significant Accounting Policies
The following is a summary of significant accounting policies consistently followed by the fund in preparation of its financial statements. The fund is an investment company and follows accounting and reporting guidance in accordance with accounting principles generally accepted in the United States of America. This may require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from these estimates. Management evaluated the impact of events or transactions occurring through the date the financial statements were issued that would merit recognition or disclosure.
Investment Valuations — The fund determines the fair value of its investments and computes its net asset value per share at the close of regular trading (usually 4 p.m. Eastern time) on the New York Stock Exchange (NYSE) on each day the NYSE is open. The Board of Directors has adopted valuation policies and procedures to guide the investment advisor in the fund’s investment valuation process and to provide methodologies for the oversight of the fund’s pricing function.
Equity securities that are listed or traded on a domestic securities exchange are valued at the last reported sales price or at the official closing price as provided by the exchange. Equity securities traded on foreign securities exchanges are generally valued at the closing price of such securities on the exchange where primarily traded or at the close of the NYSE, if that is earlier. If no last sales price is reported, or if local convention or regulation so provides, the mean of the latest bid and asked prices may be used. Securities traded over-the-counter are valued at the mean of the latest bid and asked prices, the last sales price, or the official closing price. Equity securities initially expressed in local currencies are translated into U.S. dollars at the mean of the appropriate currency exchange rate at the close of the NYSE as provided by an independent pricing service.
Open-end management investment companies are valued at the reported net asset value per share. Repurchase agreements are valued at cost, which approximates fair value.
If the fund determines that the market price for an investment is not readily available or the valuation methods mentioned above do not reflect an investment’s fair value, such investment is valued as determined in good faith by the Board of Directors or its delegate, in accordance with policies and procedures adopted by the Board of Directors. In its determination of fair value, the fund may review several factors including, but not limited to, market information regarding the specific investment or comparable investments and correlation with other investment types, futures indices or general market indicators. Circumstances that may cause the fund to use these procedures to value an investment include, but are not limited to: an investment has been declared in default or is distressed; trading in a security has been suspended during the trading day or a security is not actively trading on its principal exchange; prices received from a regular pricing source are deemed unreliable; or there is a foreign market holiday and no trading occurred.
The fund monitors for significant events occurring after the close of an investment’s primary exchange but before the fund’s net asset value per share is determined. Significant events may include, but are not limited to: corporate announcements and transactions; governmental action and political unrest that could impact a specific investment or an investment sector; or armed conflicts, natural disasters and similar events that could affect investments in a specific country or region. The fund also monitors for significant fluctuations between domestic and foreign markets, as evidenced by the U.S. market or such other indicators that the Board of
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Directors, or its delegate, deems appropriate. If significant fluctuations in foreign markets are identified, the fund may apply a model-derived factor to the closing price of equity securities traded on foreign securities exchanges. The factor is based on observable market data as provided by an independent pricing service.
Security Transactions — Security transactions are accounted for as of the trade date. Net realized gains and losses are determined on the identified cost basis, which is also used for federal income tax purposes.
Investment Income — Dividend income less foreign taxes withheld, if any, is recorded as of the ex-dividend date. Distributions received on securities that represent a return of capital or long-term capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The fund may estimate the components of distributions received that may be considered nontaxable distributions or long-term capital gain distributions for income tax purposes. Interest income is recorded on the accrual basis and includes accretion of discounts and amortization of premiums.
Foreign Currency Translations — All assets and liabilities initially expressed in foreign currencies are translated into U.S. dollars at prevailing exchange rates at period end. The fund may enter into spot foreign currency exchange contracts to facilitate transactions denominated in a foreign currency. Purchases and sales of investment securities, dividend and interest income, spot foreign currency exchange contracts, and expenses are translated at the rates of exchange prevailing on the respective dates of such transactions. Net realized and unrealized foreign currency exchange gains or losses related to investment securities are a component of net realized gain (loss) on investment transactions and change in net unrealized appreciation (depreciation) on investments, respectively.
Repurchase Agreements — The fund may enter into repurchase agreements with institutions that American Century Investment Management, Inc. (ACIM) (the investment advisor) has determined are creditworthy pursuant to criteria adopted by the Board of Directors. The fund requires that the collateral, represented by securities, received in a repurchase transaction be transferred to the custodian in a manner sufficient to enable the fund to obtain those securities in the event of a default under the repurchase agreement. ACIM monitors, on a daily basis, the securities transferred to ensure the value, including accrued interest, of the securities under each repurchase agreement is equal to or greater than amounts owed to the fund under each repurchase agreement.
Joint Trading Account — Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the fund, along with certain other funds in the American Century Investments family of funds, may transfer uninvested cash balances into a joint trading account. These balances are invested in one or more repurchase agreements that are collateralized by U.S. Treasury or Agency obligations.
Income Tax Status — It is the fund’s policy to distribute substantially all net investment income and net realized gains to shareholders and to otherwise qualify as a regulated investment company under provisions of the Internal Revenue Code. Accordingly, no provision has been made for income taxes. The fund files U.S. federal, state, local and non-U.S. tax returns as applicable. The fund's tax returns are subject to examination by the relevant taxing authority until expiration of the applicable statute of limitations, which is generally three years from the date of filing but can be longer in certain jurisdictions. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination and for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Multiple Class — All shares of the fund represent an equal pro rata interest in the net assets of the class to which such shares belong, and have identical voting, dividend, liquidation and other rights and the same terms and conditions, except for class specific expenses and exclusive rights to vote on matters affecting only individual classes. Income, non-class specific expenses, and realized and unrealized capital gains and losses of the fund are allocated to each class of shares based on their relative net assets.
Distributions to Shareholders — Distributions from net investment income and net realized gains, if any, are generally declared and paid annually.
Indemnifications — Under the corporation’s organizational documents, its officers and directors are indemnified against certain liabilities arising out of the performance of their duties to the fund. In addition, in the normal course of business, the fund enters into contracts that provide general indemnifications. The maximum exposure under these arrangements is unknown as this would involve future claims that may be made against a fund. The risk of material loss from such claims is considered by management to be remote.
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3. Fees and Transactions with Related Parties
Certain officers and directors of the corporation are also officers and/or directors of American Century Companies, Inc. (ACC). The corporation’s investment advisor, ACIM, the corporation's distributor, American Century Investment Services, Inc., and the corporation’s transfer agent, American Century Services, LLC, are wholly owned, directly or indirectly, by ACC. Various funds issued by American Century Asset Allocation Portfolios, Inc. own, in aggregate, 100% of the shares of the fund. Related parties do not invest in the fund for the purpose of exercising management or control.
Management Fees —The corporation has entered into a management agreement with ACIM, under which ACIM provides the fund with investment advisory and management services in exchange for a single, unified management fee (the fee) per class. The agreement provides that all expenses of managing and operating the fund, except distribution and service fees, brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), and extraordinary expenses, will be paid by ACIM. The fee is computed and accrued daily based on each class's daily net assets and paid monthly in arrears. The difference in the fee among the classes is a result of their separate arrangements for 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. During the period ended April 30, 2017, the investment advisor agreed to waive 0.08% of the fund's management fee. The investment advisor expects this waiver to continue until February 28, 2018 and cannot terminate it prior to such date without the approval of the Board of Directors.
The annual management fee and the effective annual management fee after waiver for each class for the period ended April 30, 2017 are as follows:
Class | Annual Management Fee | Effective Annual Management Fee After Waiver |
Investor Class | 1.20% | 1.12% |
Institutional Class | 1.00% | 0.92% |
R6 Class | 0.85% | 0.77% |
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 $583,511 and $2,086,956, respectively. The effect of interfund transactions on the Statement of Operations was $175,224 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 April 30, 2017 were $508,524,765 and $489,920,189, respectively.
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5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended April 30, 2017 | Year ended October 31, 2016 | |||||||||
Shares | Amount | Shares | Amount | |||||||
Investor Class/Shares Authorized | 80,000,000 | 70,000,000 | ||||||||
Sold | 1,412,968 | $ | 12,736,583 | 4,449,284 | $ | 42,555,373 | ||||
Issued in reinvestment of distributions | 512,740 | 4,532,618 | 331,980 | 3,011,060 | ||||||
Redeemed | (1,599,826 | ) | (14,600,064 | ) | (3,634,715 | ) | (34,804,654 | ) | ||
325,882 | 2,669,137 | 1,146,549 | 10,761,779 | |||||||
Institutional Class/Shares Authorized | 175,000,000 | 160,000,000 | ||||||||
Sold | 2,071,937 | 18,720,297 | 4,226,547 | 39,182,288 | ||||||
Issued in reinvestment of distributions | 1,276,808 | 11,286,980 | 671,803 | 6,093,250 | ||||||
Redeemed | (932,609 | ) | (8,513,789 | ) | (2,373,559 | ) | (22,922,977 | ) | ||
2,416,136 | 21,493,488 | 2,524,791 | 22,352,561 | |||||||
R6 Class/Shares Authorized | 20,000,000 | 20,000,000 | ||||||||
Sold | 1,020,097 | 9,261,633 | 1,364,259 | 12,978,918 | ||||||
Issued in reinvestment of distributions | 145,528 | 1,286,466 | 41,921 | 379,807 | ||||||
Redeemed | (245,920 | ) | (2,237,791 | ) | (112,101 | ) | (1,094,999 | ) | ||
919,705 | 8,310,308 | 1,294,079 | 12,263,726 | |||||||
Net increase (decrease) | 3,661,723 | $ | 32,472,933 | 4,965,419 | $ | 45,378,066 |
6. Fair Value Measurements
The fund’s investments valuation process is based on several considerations and may use multiple inputs to determine the fair value of the investments held by the fund. In conformity with accounting principles generally accepted in the United States of America, the inputs used to determine a valuation are classified into three broad levels.
• | Level 1 valuation inputs consist of unadjusted quoted prices in an active market for identical investments. |
• | Level 2 valuation inputs consist of direct or indirect observable market data (including quoted prices for comparable investments, evaluations of subsequent market events, interest rates, prepayment speeds, credit risk, etc.). These inputs also consist of quoted prices for identical investments initially expressed in local currencies that are adjusted through translation into U.S. dollars. |
• | Level 3 valuation inputs consist of unobservable data (including a fund’s own assumptions). |
The level classification is based on the lowest level input that is significant to the fair valuation measurement. The valuation inputs are not necessarily an indication of the risks associated with investing in these securities or other financial instruments. There were no significant transfers between levels during the period.
The following is a summary of the level classifications as of period end. The Schedule of Investments provides additional information on the fund’s portfolio holdings.
Level 1 | Level 2 | Level 3 | ||||||
Assets | ||||||||
Investment Securities | ||||||||
Common Stocks | ||||||||
United States | $ | 201,783,457 | — | — | ||||
Other Countries | — | $ | 199,820,767 | — | ||||
Temporary Cash Investments | 1,896 | 4,788,657 | — | |||||
$ | 201,785,353 | $ | 204,609,424 | — |
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7. Risk Factors
The fund concentrates its investments in a narrow segment of the total market. Because of this, the fund is subject to certain additional risks as compared to investing in a more diversified portfolio of investments. The fund may be subject to certain risks similar to those associated with direct investment in real estate including but not limited to: local or regional economic conditions, changes in zoning laws, changes in property values, property tax increases, overbuilding, increased competition, environmental contamination, natural disasters, and interest rate risk.
There are certain risks involved in investing in foreign securities. These risks include those resulting from future adverse political, social and economic developments, fluctuations in currency exchange rates, the possible imposition of exchange controls, and other foreign laws or restrictions. Investing in emerging markets may accentuate these risks.
The fund’s investment process may result in high portfolio turnover, which could mean high transaction costs, affecting both performance and capital gains tax liabilities to investors.
8. Federal Tax Information
The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
As of period end, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $ | 395,603,403 | |
Gross tax appreciation of investments | $ | 18,528,732 | |
Gross tax depreciation of investments | (7,737,358 | ) | |
Net tax appreciation (depreciation) of investments | $ | 10,791,374 |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the realization to ordinary income for tax purposes of unrealized gains on investments in passive foreign investment companies.
As of October 31, 2016, the fund had accumulated short-term capital losses of $(32,610,303), which represent net capital loss carryovers that may be used to offset future realized capital gains for federal income tax purposes. The capital loss carryovers may be carried forward for an unlimited period. Future capital loss carryover utilization in any given year may be subject to Internal Revenue Code limitations.
9. Recently Issued Accounting Guidance
In October 2016, the Securities and Exchange Commission adopted new rules and forms as well as amendments to its rules and forms to modernize the reporting and disclosure of information by registered investment companies. The amendments to Regulation S-X will require standardized, enhanced disclosure about derivatives in investment company financial statements, as well as other provisions. Compliance with the amendments is effective on August 1, 2017. Management is currently evaluating the impact that adopting the amendments will have on the financial statement disclosures.
15
Financial Highlights |
For a Share Outstanding Throughout the Years Ended October 31 (except as noted) | |||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||
Income From Investment Operations: | Ratio to Average Net Assets of: | ||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Distributions From Net Investment Income | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Operating Expenses (before expense waiver) | Net Investment Income (Loss) | Net Investment Income (Loss) (before expense waiver) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
Investor Class | |||||||||||||||
2017(3) | $9.49 | 0.11 | (0.05) | 0.06 | (0.38) | $9.17 | 0.74% | 1.12%(4) | 1.20%(4) | 2.45%(4) | 2.37%(4) | 123% | $101,717 | ||
2016 | $9.57 | 0.13 | 0.01 | 0.14 | (0.22) | $9.49 | 1.58% | 1.16% | 1.21% | 1.30% | 1.25% | 264% | $102,125 | ||
2015(5) | $10.00 | 0.09 | (0.52) | (0.43) | — | $9.57 | (4.30)% | 1.19%(4) | 1.20%(4) | 1.50%(4) | 1.49%(4) | 151% | $92,086 | ||
Institutional Class | |||||||||||||||
2017(3) | $9.50 | 0.12 | (0.05) | 0.07 | (0.39) | $9.18 | 0.95% | 0.92%(4) | 1.00%(4) | 2.65%(4) | 2.57%(4) | 123% | $275,777 | ||
2016 | $9.59 | 0.14 | 0.01 | 0.15 | (0.24) | $9.50 | 1.74% | 0.96% | 1.01% | 1.50% | 1.45% | 264% | $262,612 | ||
2015(5) | $10.00 | 0.10 | (0.51) | (0.41) | — | $9.59 | (4.20)% | 0.99%(4) | 1.00%(4) | 1.70%(4) | 1.69%(4) | 151% | $240,740 | ||
R6 Class | |||||||||||||||
2017(3) | $9.51 | 0.13 | (0.05) | 0.08 | (0.41) | $9.18 | 0.99% | 0.77%(4) | 0.85%(4) | 2.80%(4) | 2.72%(4) | 123% | $33,017 | ||
2016 | $9.59 | 0.15 | 0.02 | 0.17 | (0.25) | $9.51 | 1.86% | 0.81% | 0.86% | 1.65% | 1.60% | 264% | $25,467 | ||
2015(5) | $10.00 | 0.11 | (0.52) | (0.41) | — | $9.59 | (4.10)% | 0.84%(4) | 0.85%(4) | 1.85%(4) | 1.84%(4) | 151% | $13,271 |
Notes to Financial Highlights |
(1) | Computed using average shares outstanding throughout the period. |
(2) | Total returns are calculated based on the net asset value of the last business day. Total returns for periods less than one year are not annualized. |
(3) | Six months ended April 30, 2017 (unaudited). |
(4) | Annualized. |
(5) | March 19, 2015 (fund inception) through October 31, 2015. |
See Notes to Financial Statements.
Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain IRAs are subject to federal income tax withholding, unless you elect not to have withholding apply. Tax will be withheld on the total amount withdrawn even though you may be receiving amounts that are not subject to withholding, such as nondeductible contributions. In such case, excess amounts of withholding could occur. You may adjust your withholding election so that a greater or lesser amount will be withheld.
If you don’t want us to withhold on this amount, you must notify us to not withhold the federal income tax. You may notify us in writing or in certain situations by telephone or through other electronic means. For systematic withdrawals, your withholding election will remain in effect until revoked or changed by filing a new election. You have the right to revoke your election at any time.
Remember, even if you elect not to have income tax withheld, you are liable for paying income tax on the taxable portion of your withdrawal. If you elect not to have income tax withheld or you don’t have enough income tax withheld, you may be responsible for payment of estimated tax. You may incur penalties under the estimated tax rules if your withholding and estimated tax payments are not sufficient. You can reduce or defer the income tax on a distribution by directly or indirectly rolling such distribution over to another IRA or eligible plan. You should consult your tax advisor for additional information.
State tax will be withheld if, at the time of your distribution, your address is within one of the mandatory withholding states and you have federal income tax withheld (or as otherwise required by state law). State taxes will be withheld from your distribution in accordance with the respective state rules.
Distributions you receive from 403(b), 457 and qualified plans are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
A description of the policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund is available without charge, upon request, by calling 1-800-345-2021. It is also available on the "About Us" page of American Century Investments’ website at americancentury.com and on the Securities and Exchange Commission’s website at sec.gov. Information regarding how the investment advisor voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the "About Us" page at americancentury.com. It is also available at sec.gov.
Quarterly Portfolio Disclosure
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-Q. The fund’s Forms N-Q are available on the SEC’s website at sec.gov, and may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The fund also makes its complete schedule of portfolio holdings for the most recent quarter of its fiscal year available on its website at americancentury.com and, upon request, by calling 1-800-345-2021.
18
Notes |
19
Notes |
20
Contact Us | americancentury.com | |
Automated Information Line | 1-800-345-8765 | |
Investor Services Representative | 1-800-345-2021 or 816-531-5575 | |
Investors Using Advisors | 1-800-378-9878 | |
Business, Not-For-Profit, Employer-Sponsored Retirement Plans | 1-800-345-3533 | |
Banks and Trust Companies, Broker-Dealers, Financial Professionals, Insurance Companies | 1-800-345-6488 | |
Telecommunications Relay Service for the Deaf | 711 | |
American Century Capital Portfolios, Inc. | ||
Investment Advisor: American Century Investment Management, Inc. Kansas City, Missouri | ||
This report and the statements it contains are submitted for the general information of our shareholders. The report is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus. | ||
©2017 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-92376 1706 |
Semiannual Report | |
April 30, 2017 | |
Real Estate Fund |
Table of Contents |
Any opinions expressed in this report reflect those of the author as of the date of the report, and do not necessarily represent the opinions of American Century Investments® or any other person in the American Century Investments organization. Any such opinions are subject to change at any time based upon market or other conditions and American Century Investments disclaims any responsibility to update such opinions. These opinions may not be relied upon as investment advice and, because investment decisions made by American Century Investments funds are based on numerous factors, may not be relied upon as an indication of trading intent on behalf of any American Century Investments fund. Security examples are used for representational purposes only and are not intended as recommendations to purchase or sell securities. Performance information for comparative indices and securities is provided to American Century Investments by third party vendors. To the best of American Century Investments’ knowledge, such information is accurate at the time of printing.
President’s Letter |
Jonathan Thomas
Dear Investor:
Thank you for reviewing this semiannual report for the period ended April 30, 2017. It provides a market overview (below), followed by a schedule of fund investments and other financial information. For additional commentary and information on fund performance, plus other investment insights, we encourage you to visit our website, americancentury.com.
“Trump Trade” Triggered Surges in U.S. Stock Prices and Treasury Yields
Especially in the U.S., the signature events of the six-month period were Donald Trump’s victory in the U.S. presidential election in November and the resulting “Trump Trade.” President Trump’s aggressive pro-growth fiscal policy agenda triggered risk-on rallies in higher-risk assets such as stocks and high-yield corporate bonds that produced double-digit gains for many broad U.S. and global/non-U.S. equity indices. For example, the S&P 500 Index and the MSCI EAFE Index gained 13.32% and 11.47%, respectively. In the U.S., growth and small-cap equity indices generally outperformed their value and large-cap counterparts.
The Trump Trade and improving global economic conditions also drove government bond yields higher, and boosted the value of the U.S. dollar against other currencies. This caused most bond indices to decline during the period, except those representing emerging market and corporate debt, which benefited from investors’ continuing search for more yield than what’s available in government bonds. Also, higher-yielding and corporate bonds are perceived as less price change-sensitive to rising interest rates.
Yields rose for short- and long-maturity U.S. Treasuries as the Federal Reserve raised its interest rate target twice during the reporting period, and suggested that it might raise rates again and start gradually reducing its balance sheet by the end of 2017. These factors, plus rising inflation, could trigger more bouts of U.S. bond market volatility. Meanwhile, the Trump Trade could prove to be double-edged—its momentum faded as health care and tax reform enactment faced delays. This, along with ongoing questions about the Trump administration’s practices, policies, and alliances, could impede further risk-on sentiment. In this unsettled environment, we believe in remaining focused on investment goals, using disciplined, actively managed, risk-aware strategies. We appreciate your continued trust in us.
Sincerely,
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
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Fund Characteristics |
APRIL 30, 2017 | |
Top Ten Holdings | % of net assets |
Simon Property Group, Inc. | 8.0% |
Equinix, Inc. | 5.3% |
AvalonBay Communities, Inc. | 5.3% |
Prologis, Inc. | 5.1% |
Welltower, Inc. | 4.6% |
Ventas, Inc. | 3.6% |
Boston Properties, Inc. | 3.3% |
Public Storage | 3.2% |
Alexandria Real Estate Equities, Inc. | 3.2% |
Essex Property Trust, Inc. | 3.2% |
Sub-Industry Allocation | % of net assets |
Retail REITs | 20.8% |
Specialized REITs | 17.5% |
Residential REITs | 17.0% |
Office REITs | 12.4% |
Health Care REITs | 11.6% |
Industrial REITs | 8.1% |
Hotel and Resort REITs | 5.5% |
Diversified REITs | 4.3% |
Hotels, Resorts and Cruise Lines | 1.1% |
Mortgage REITs | 1.0% |
Cash and Equivalents* | 0.7% |
*Includes temporary cash investments and other assets and liabilities. | |
Types of Investments in Portfolio | % of net assets |
Common Stocks | 99.3% |
Temporary Cash Investments | 0.7% |
Other Assets and Liabilities | —** |
**Category is less than 0.05% of total net assets.
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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 November 1, 2016 to April 30, 2017 (except as noted).
Actual Expenses
The table provides information about actual account values and actual expenses for each class. You may use the information, together with the amount you invested, to estimate the expenses that you paid over the period. First, identify the share class you own. Then simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
If you hold Investor Class shares of any American Century Investments fund, or I Class shares of the American Century Diversified Bond Fund, in an American Century Investments account (i.e., not a financial intermediary or retirement plan account), American Century Investments may charge you a $12.50 semiannual account maintenance fee if the value of those shares is less than $10,000. We will redeem shares automatically in one of your accounts to pay the $12.50 fee. In determining your total eligible investment amount, we will include your investments in all personal accounts (including American Century Investments Brokerage accounts) registered under your Social Security number. Personal accounts include individual accounts, joint accounts, UGMA/UTMA accounts, personal trusts, Coverdell Education Savings Accounts and IRAs (including traditional, Roth, Rollover, SEP-, SARSEP- and SIMPLE-IRAs), and certain other retirement accounts. If you have only business, business retirement, employer-sponsored or American Century Investments Brokerage accounts, you are currently not subject to this fee. If you are subject to the Account Maintenance Fee, your account value could be reduced by the fee amount.
Hypothetical Example for Comparison Purposes
The table also provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio of each class of your fund and an assumed rate of return of 5% per year before expenses, which is not the actual return of a fund’s share class. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) or redemption/exchange fees. Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
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Beginning Account Value 11/1/16 | Ending Account Value 4/30/17 | Expenses Paid During Period(1) 11/1/16 - 4/30/17 | Annualized Expense Ratio(1) | |
Actual | ||||
Investor Class | $1,000 | $1,013.80 | $5.69 | 1.14% |
I Class | $1,000 | $1,014.80 | $4.70 | 0.94% |
Y Class | $1,000 | $983.30(2) | $0.45(3) | 0.79% |
A Class | $1,000 | $1,012.50 | $6.94 | 1.39% |
C Class | $1,000 | $1,008.90 | $10.66 | 2.14% |
R Class | $1,000 | $1,011.50 | $8.18 | 1.64% |
R5 Class | $1,000 | $983.30(2) | $0.54(3) | 0.94% |
R6 Class | $1,000 | $1,015.50 | $3.95 | 0.79% |
Hypothetical | ||||
Investor Class | $1,000 | $1,019.14 | $5.71 | 1.14% |
I Class | $1,000 | $1,020.13 | $4.71 | 0.94% |
Y Class | $1,000 | $1,020.88(4) | $3.96(4) | 0.79% |
A Class | $1,000 | $1,017.90 | $6.95 | 1.39% |
C Class | $1,000 | $1,014.18 | $10.69 | 2.14% |
R Class | $1,000 | $1,016.66 | $8.20 | 1.64% |
R5 Class | $1,000 | $1,020.13(4) | $4.71(4) | 0.94% |
R6 Class | $1,000 | $1,020.88 | $3.96 | 0.79% |
(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 181, the number of days in the most recent fiscal half-year, divided by 365, to reflect the one-half year period. |
(2) | Ending account value based on actual return from April 10, 2017 (commencement of sale) through April 30, 2017. |
(3) | Expenses are equal to the class's annualized expense ratio listed in the table above, multiplied by the average account value over the period, multiplied by 21, the number of days in the period from April 10, 2017 (commencement of sale) through April 30, 2017, divided by 365, to reflect the period. Had the class been available for the full period, the expenses paid during the period would have been higher. |
(4) | Ending account value and expenses paid during the period assumes the class had been available throughout the entire period and are calculated using the class’s annualized expense ratio listed in the table above. |
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Schedule of Investments |
APRIL 30, 2017 (UNAUDITED)
Shares | Value | ||||
COMMON STOCKS — 99.3% | |||||
Diversified REITs — 4.3% | |||||
Empire State Realty Trust, Inc. | 992,287 | $ | 20,639,570 | ||
Spirit Realty Capital, Inc. | 1,657,200 | 15,610,824 | |||
STORE Capital Corp. | 802,647 | 19,255,501 | |||
55,505,895 | |||||
Health Care REITs — 11.6% | |||||
Healthcare Trust of America, Inc., Class A | 548,713 | 17,498,457 | |||
Physicians Realty Trust | 1,395,537 | 27,408,347 | |||
Ventas, Inc. | 716,692 | 45,875,455 | |||
Welltower, Inc. | 828,478 | 59,186,468 | |||
149,968,727 | |||||
Hotel and Resort REITs — 5.5% | |||||
Host Hotels & Resorts, Inc. | 1,507,841 | 27,065,746 | |||
MGM Growth Properties LLC, Class A | 625,810 | 17,910,682 | |||
Ryman Hospitality Properties, Inc. | 175,902 | 11,219,030 | |||
Sunstone Hotel Investors, Inc. | 947,282 | 14,105,029 | |||
70,300,487 | |||||
Hotels, Resorts and Cruise Lines — 1.1% | |||||
Hilton Worldwide Holdings, Inc. | 234,799 | 13,846,097 | |||
Industrial REITs — 8.1% | |||||
Duke Realty Corp. | 1,042,672 | 28,913,295 | |||
Prologis, Inc. | 1,197,506 | 65,156,301 | |||
STAG Industrial, Inc. | 393,179 | 10,364,198 | |||
104,433,794 | |||||
Mortgage REITs — 1.0% | |||||
Starwood Property Trust, Inc. | 585,437 | 13,283,566 | |||
Office REITs — 12.4% | |||||
Alexandria Real Estate Equities, Inc. | 367,169 | 41,310,184 | |||
Boston Properties, Inc. | 336,758 | 42,633,563 | |||
Corporate Office Properties Trust | 555,575 | 18,189,525 | |||
Hudson Pacific Properties, Inc. | 983,474 | 33,792,167 | |||
Mack-Cali Realty Corp. | 72,155 | 1,951,793 | |||
Paramount Group, Inc. | 1,333,991 | 21,877,452 | |||
159,754,684 | |||||
Residential REITs — 17.0% | |||||
American Homes 4 Rent | 674,747 | 15,552,918 | |||
Apartment Investment & Management Co., Class A | 814,267 | 35,616,039 | |||
AvalonBay Communities, Inc. | 359,079 | 68,167,558 | |||
Colony Starwood Homes | 799,747 | 27,647,254 | |||
Essex Property Trust, Inc. | 165,907 | 40,559,284 | |||
Mid-America Apartment Communities, Inc. | 253,024 | 25,102,511 | |||
UDR, Inc. | 166,345 | 6,211,322 | |||
218,856,886 | |||||
Retail REITs — 20.8% | |||||
Agree Realty Corp. | 205,695 | 9,972,094 | |||
Brixmor Property Group, Inc. | 359,858 | 7,107,195 |
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Shares | Value | ||||
DDR Corp. | 497,342 | $ | 5,376,267 | ||
Federal Realty Investment Trust | 147,344 | 19,285,856 | |||
GGP, Inc. | 1,868,943 | 40,387,858 | |||
Realty Income Corp. | 672,796 | 39,257,647 | |||
Regency Centers Corp. | 404,409 | 25,550,561 | |||
Simon Property Group, Inc. | 619,756 | 102,420,877 | |||
Urban Edge Properties | 720,349 | 18,368,899 | |||
267,727,254 | |||||
Specialized REITs — 17.5% | |||||
American Tower Corp. | 54,058 | 6,808,065 | |||
CoreCivic, Inc. | 375,032 | 12,919,852 | |||
CyrusOne, Inc. | 410,597 | 22,435,020 | |||
Digital Realty Trust, Inc. | 309,179 | 35,506,116 | |||
Equinix, Inc. | 164,078 | 68,535,381 | |||
Extra Space Storage, Inc. | 402,507 | 30,401,354 | |||
Public Storage | 198,043 | 41,466,243 | |||
Rayonier, Inc. | 233,384 | 6,586,096 | |||
224,658,127 | |||||
TOTAL COMMON STOCKS (Cost $1,085,405,769) | 1,278,335,517 | ||||
TEMPORARY CASH INVESTMENTS — 0.7% | |||||
Repurchase Agreement, BMO Capital Markets Corp., (collateralized by various U.S. Treasury obligations, 0.75% - 2.875%, 6/30/17 - 5/15/43, valued at $4,531,660), in a joint trading account at 0.68%, dated 4/28/17, due 5/1/17 (Delivery value $4,444,066) | 4,443,814 | ||||
Repurchase Agreement, Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 3.00%, 11/15/44, valued at $4,535,491), at 0.22%, dated 4/28/17, due 5/1/17 (Delivery value $4,446,082) | 4,446,000 | ||||
State Street Institutional U.S. Government Money Market Fund, Premier Class | 3,829 | 3,829 | |||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $8,893,643) | 8,893,643 | ||||
TOTAL INVESTMENT SECURITIES — 100.0% (Cost $1,094,299,412) | 1,287,229,160 | ||||
OTHER ASSETS AND LIABILITIES† | (19,354 | ) | |||
TOTAL NET ASSETS — 100.0% | $ | 1,287,209,806 |
NOTES TO SCHEDULE OF INVESTMENTS |
† | Category is less than 0.05% of total net assets. |
See Notes to Financial Statements.
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Statement of Assets and Liabilities |
APRIL 30, 2017 (UNAUDITED) | |||
Assets | |||
Investment securities, at value (cost of $1,094,299,412) | $ | 1,287,229,160 | |
Receivable for investments sold | 39,050,473 | ||
Receivable for capital shares sold | 763,800 | ||
Dividends and interest receivable | 362,829 | ||
1,327,406,262 | |||
Liabilities | |||
Payable for investments purchased | 37,816,306 | ||
Payable for capital shares redeemed | 1,178,326 | ||
Accrued management fees | 1,158,716 | ||
Distribution and service fees payable | 43,108 | ||
40,196,456 | |||
Net Assets | $ | 1,287,209,806 | |
Net Assets Consist of: | |||
Capital (par value and paid-in surplus) | $ | 1,104,553,515 | |
Undistributed net investment income | 1,925,253 | ||
Accumulated net realized loss | (12,198,710 | ) | |
Net unrealized appreciation | 192,929,748 | ||
$ | 1,287,209,806 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | ||||
Investor Class, $0.01 Par Value | $801,153,943 | 28,472,660 | $28.14 | |||
I Class, $0.01 Par Value | $164,548,245 | 5,833,148 | $28.21 | |||
Y Class, $0.01 Par Value | $4,907 | 174 | $28.20 | |||
A Class, $0.01 Par Value | $127,378,432 | 4,528,482 | $28.13* | |||
C Class, $0.01 Par Value | $12,172,575 | 441,652 | $27.56 | |||
R Class, $0.01 Par Value | $12,907,429 | 461,477 | $27.97 | |||
R5 Class, $0.01 Par Value | $4,909 | 174 | $28.21 | |||
R6 Class, $0.01 Par Value | $169,039,366 | 5,993,980 | $28.20 |
*Maximum offering price $29.85 (net asset value divided by 0.9425).
See Notes to Financial Statements.
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Statement of Operations |
FOR THE SIX MONTHS ENDED APRIL 30, 2017 (UNAUDITED) | |||
Investment Income (Loss) | |||
Income: | |||
Dividends | $ | 27,031,613 | |
Interest | 10,063 | ||
27,041,676 | |||
Expenses: | |||
Management fees | 7,194,114 | ||
Distribution and service fees: | |||
A Class | 171,693 | ||
C Class | 68,723 | ||
R Class | 37,873 | ||
Directors' fees and expenses | 19,527 | ||
Other expenses | 599 | ||
7,492,529 | |||
Net investment income (loss) | 19,549,147 | ||
Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on investment transactions | 18,592,413 | ||
Change in net unrealized appreciation (depreciation) on investments | (19,355,126 | ) | |
Net realized and unrealized gain (loss) | (762,713 | ) | |
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 18,786,434 |
See Notes to Financial Statements.
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Statement of Changes in Net Assets |
SIX MONTHS ENDED APRIL 30, 2017 (UNAUDITED) AND YEAR ENDED OCTOBER 31, 2016 | ||||||
Increase (Decrease) in Net Assets | April 30, 2017 | October 31, 2016 | ||||
Operations | ||||||
Net investment income (loss) | $ | 19,549,147 | $ | 20,217,260 | ||
Net realized gain (loss) | 18,592,413 | 286,060,761 | ||||
Change in net unrealized appreciation (depreciation) | (19,355,126) | (216,694,822) | ||||
Net increase (decrease) in net assets resulting from operations | 18,786,434 | 89,583,199 | ||||
Distributions to Shareholders | ||||||
From net investment income: | ||||||
Investor Class | (10,952,125) | (25,017,182) | ||||
I Class | (2,336,206) | (4,951,723) | ||||
A Class | (1,641,012) | (4,192,021) | ||||
C Class | (139,917) | (301,538) | ||||
R Class | (162,465) | (362,169) | ||||
R6 Class | (2,392,169) | (5,556,657 | ) | |||
From net realized gains: | ||||||
Investor Class | (74,289,411) | — | ||||
I Class | (14,907,349) | — | ||||
A Class | (12,052,353) | — | ||||
C Class | (1,254,529) | — | ||||
R Class | (1,257,208) | — | ||||
R6 Class | (13,883,131) | — | ||||
Decrease in net assets from distributions | (135,267,875) | (40,381,290) | ||||
Capital Share Transactions | ||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | (27,655,432 | ) | (85,497,715) | |||
Net increase (decrease) in net assets | (144,136,873) | (36,295,806) | ||||
Net Assets | ||||||
Beginning of period | 1,431,346,679 | 1,467,642,485 | ||||
End of period | $ | 1,287,209,806 | $ | 1,431,346,679 | ||
Undistributed net investment income | $ | 1,925,253 | — |
See Notes to Financial Statements.
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Notes to Financial Statements |
APRIL 30, 2017 (UNAUDITED)
1. Organization
American Century Capital Portfolios, 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. Real Estate Fund (the fund) is one fund in a series issued by the corporation. The fund’s investment objective is to seek high total investment return through a combination of capital appreciation and current income.
The fund offers the Investor Class, I Class (formerly Institutional 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. Sale of the Y Class and R5 Class commenced on April 10, 2017.
2. Significant Accounting Policies
The following is a summary of significant accounting policies consistently followed by the fund in preparation of its financial statements. The fund is an investment company and follows accounting and reporting guidance in accordance with accounting principles generally accepted in the United States of America. This may require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from these estimates. Management evaluated the impact of events or transactions occurring through the date the financial statements were issued that would merit recognition or disclosure.
Investment Valuations — The fund determines the fair value of its investments and computes its net asset value per share at the close of regular trading (usually 4 p.m. Eastern time) on the New York Stock Exchange (NYSE) on each day the NYSE is open. The Board of Directors has adopted valuation policies and procedures to guide the investment advisor in the fund’s investment valuation process and to provide methodologies for the oversight of the fund’s pricing function.
Equity securities that are listed or traded on a domestic securities exchange are valued at the last reported sales price or at the official closing price as provided by the exchange. Equity securities traded on foreign securities exchanges are generally valued at the closing price of such securities on the exchange where primarily traded or at the close of the NYSE, if that is earlier. If no last sales price is reported, or if local convention or regulation so provides, the mean of the latest bid and asked prices may be used. Securities traded over-the-counter are valued at the mean of the latest bid and asked prices, the last sales price, or the official closing price.
Open-end management investment companies are valued at the reported net asset value per share. Repurchase agreements are valued at cost, which approximates fair value.
If the fund determines that the market price for an investment is not readily available or the valuation methods mentioned above do not reflect an investment’s fair value, such investment is valued as determined in good faith by the Board of Directors or its delegate, in accordance with policies and procedures adopted by the Board of Directors. In its determination of fair value, the fund may review several factors including, but not limited to, market information regarding the specific investment or comparable investments and correlation with other investment types, futures indices or general market indicators. Circumstances that may cause the fund to use these procedures to value an investment include, but are not limited to: an investment has been declared in default or is distressed; trading in a security has been suspended during the trading day or a security is not actively trading on its principal exchange; prices received from a regular pricing source are deemed unreliable; or there is a foreign market holiday and no trading occurred.
The fund monitors for significant events occurring after the close of an investment’s primary exchange but before the fund’s net asset value per share is determined. Significant events may include, but are not limited to: corporate announcements and transactions; governmental action and political unrest that could impact a specific investment or an investment sector; or armed conflicts, natural disasters and similar events that could affect investments in a specific country or region. The fund also monitors for significant fluctuations between domestic and foreign markets, as evidenced by the U.S. market or such other indicators that the Board of Directors, or its delegate, deems appropriate. If significant fluctuations in foreign markets are identified, the fund may apply a model-derived factor to the closing price of equity securities traded on foreign securities
11
exchanges. The factor is based on observable market data as provided by an independent pricing service.
Security Transactions — Security transactions are accounted for as of the trade date. Net realized gains and losses are determined on the identified cost basis, which is also used for federal income tax purposes.
Investment Income — Dividend income less foreign taxes withheld, if any, is recorded as of the ex-dividend date. Distributions received on securities that represent a return of capital or long-term capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The fund may estimate the components of distributions received that may be considered nontaxable distributions or long-term capital gain distributions for income tax purposes. Interest income is recorded on the accrual basis and includes accretion of discounts and amortization of premiums.
Repurchase Agreements — The fund may enter into repurchase agreements with institutions that American Century Investment Management, Inc. (ACIM) (the investment advisor) has determined are creditworthy pursuant to criteria adopted by the Board of Directors. The fund requires that the collateral, represented by securities, received in a repurchase transaction be transferred to the custodian in a manner sufficient to enable the fund to obtain those securities in the event of a default under the repurchase agreement. ACIM monitors, on a daily basis, the securities transferred to ensure the value, including accrued interest, of the securities under each repurchase agreement is equal to or greater than amounts owed to the fund under each repurchase agreement.
Joint Trading Account — Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the fund, along with certain other funds in the American Century Investments family of funds, may transfer uninvested cash balances into a joint trading account. These balances are invested in one or more repurchase agreements that are collateralized by U.S. Treasury or Agency obligations.
Income Tax Status — It is the fund’s policy to distribute substantially all net investment income and net realized gains to shareholders and to otherwise qualify as a regulated investment company under provisions of the Internal Revenue Code. Accordingly, no provision has been made for income taxes. The fund files U.S. federal, state, local and non-U.S. tax returns as applicable. The fund's tax returns are subject to examination by the relevant taxing authority until expiration of the applicable statute of limitations, which is generally three years from the date of filing but can be longer in certain jurisdictions. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination and for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Multiple Class — All shares of the fund represent an equal pro rata interest in the net assets of the class to which such shares belong, and have identical voting, dividend, liquidation and other rights and the same terms and conditions, except for class specific expenses and exclusive rights to vote on matters affecting only individual classes. Income, non-class specific expenses, and realized and unrealized capital gains and losses of the fund are allocated to each class of shares based on their relative net assets.
Distributions to Shareholders — Distributions from net investment income, if any, are generally declared and paid quarterly. Distributions from net realized gains, if any, are generally declared and paid annually. The fund may elect to treat a portion of its payment to a redeeming shareholder, which represents the pro rata share of undistributed net investment income and net realized gains, as a distribution for federal income tax purposes (tax equalization).
Indemnifications — Under the corporation’s organizational documents, its officers and directors are indemnified against certain liabilities arising out of the performance of their duties to the fund. In addition, in the normal course of business, the fund enters into contracts that provide general indemnifications. The maximum exposure under these arrangements is unknown as this would involve future claims that may be made against a fund. The risk of material loss from such claims is considered by management to be remote.
3. Fees and Transactions with Related Parties
Certain officers and directors of the corporation are also officers and/or directors of American Century Companies, Inc. (ACC). The corporation’s investment advisor, ACIM, the corporation's distributor, American Century Investment Services, Inc. (ACIS), and the corporation’s transfer agent, American Century Services, LLC, are wholly owned, directly or indirectly, by ACC.
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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 all expenses of managing and operating the fund, except distribution and service fees, brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), and extraordinary expenses, will be paid by ACIM. The fee is computed and accrued daily based on each class's daily net assets and paid monthly in arrears. The difference in the fee among the classes is a result of their separate arrangements for 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 April 30, 2017 are as follows:
Class | Management Fee Schedule Range | Effective Annual Management Fee |
Investor Class | 1.00% to 1.20% | 1.14% |
I Class | 0.80% to 1.00% | 0.94% |
Y Class | 0.65% to 0.85% | 0.79% |
A Class | 1.00% to 1.20% | 1.14% |
C Class | 1.00% to 1.20% | 1.14% |
R Class | 1.00% to 1.20% | 1.14% |
R5 Class | 0.80% to 1.00% | 0.94% |
R6 Class | 0.65% to 0.85% | 0.79% |
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 April 30, 2017 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 $6,348,326 and $6,322,775, respectively. The effect of interfund transactions on the Statement of Operations was $(463,350) 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 April 30, 2017 were $1,152,142,430 and $1,295,581,210, respectively.
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5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended April 30, 2017(1) | Year ended October 31, 2016 | |||||||||
Shares | Amount | Shares | Amount | |||||||
Investor Class/Shares Authorized | 200,000,000 | 200,000,000 | ||||||||
Sold | 2,555,360 | $ | 73,445,337 | 6,600,409 | $ | 203,734,155 | ||||
Issued in reinvestment of distributions | 2,950,310 | 83,455,616 | 801,932 | 24,487,641 | ||||||
Redeemed | (6,677,432 | ) | (192,372,136 | ) | (8,943,608 | ) | (273,782,326 | ) | ||
(1,171,762 | ) | (35,471,183 | ) | (1,541,267 | ) | (45,560,530 | ) | |||
I Class/Shares Authorized | 50,000,000 | 50,000,000 | ||||||||
Sold | 689,909 | 19,871,066 | 2,612,248 | 80,355,114 | ||||||
Issued in reinvestment of distributions | 493,503 | 13,995,611 | 128,724 | 3,946,238 | ||||||
Redeemed | (1,304,315 | ) | (37,576,537 | ) | (2,153,818 | ) | (65,277,333 | ) | ||
(120,903 | ) | (3,709,860 | ) | 587,154 | 19,024,019 | |||||
Y Class/Shares Authorized | 50,000,000 | N/A | ||||||||
Sold | 174 | 5,000 | ||||||||
A Class/Shares Authorized | 50,000,000 | 50,000,000 | ||||||||
Sold | 614,209 | 17,508,356 | 1,453,998 | 44,776,351 | ||||||
Issued in reinvestment of distributions | 455,114 | 12,873,186 | 131,244 | 3,999,428 | ||||||
Redeemed | (1,534,338 | ) | (44,119,423 | ) | (2,514,089 | ) | (77,540,716 | ) | ||
(465,015 | ) | (13,737,881 | ) | (928,847 | ) | (28,764,937 | ) | |||
C Class/Shares Authorized | 10,000,000 | 10,000,000 | ||||||||
Sold | 34,383 | 965,927 | 88,016 | 2,682,880 | ||||||
Issued in reinvestment of distributions | 38,816 | 1,077,347 | 7,948 | 237,193 | ||||||
Redeemed | (161,208 | ) | (4,590,739 | ) | (163,187 | ) | (4,908,151 | ) | ||
(88,009 | ) | (2,547,465 | ) | (67,223 | ) | (1,988,078 | ) | |||
R Class/Shares Authorized | 10,000,000 | 10,000,000 | ||||||||
Sold | 113,759 | 3,265,065 | 362,221 | 11,151,106 | ||||||
Issued in reinvestment of distributions | 39,553 | 1,113,092 | 10,014 | 304,389 | ||||||
Redeemed | (317,385 | ) | (9,371,043 | ) | (235,935 | ) | (7,298,352 | ) | ||
(164,073 | ) | (4,992,886 | ) | 136,300 | 4,157,143 | |||||
R5 Class/Shares Authorized | 50,000,000 | N/A | ||||||||
Sold | 174 | 5,000 | ||||||||
R6 Class/Shares Authorized | 50,000,000 | 50,000,000 | ||||||||
Sold | 1,540,130 | 44,995,450 | 1,937,793 | 60,134,562 | ||||||
Issued in reinvestment of distributions | 574,077 | 16,275,300 | 181,289 | 5,556,657 | ||||||
Redeemed | (992,732 | ) | (28,476,907 | ) | (3,103,149 | ) | (98,056,551 | ) | ||
1,121,475 | 32,793,843 | (984,067 | ) | (32,365,332 | ) | |||||
Net increase (decrease) | (887,939) | $ | (27,655,432 | ) | (2,797,950 | ) | $ | (85,497,715 | ) |
(1) | April 10, 2017 (commencement of sale) through April 30, 2017 for the Y Class and R5 Class. |
6. Fair Value Measurements
The fund’s investments valuation process is based on several considerations and may use multiple inputs to determine the fair value of the investments held by the fund. In conformity with accounting principles generally accepted in the United States of America, the inputs used to determine a valuation are classified into three broad levels.
• | Level 1 valuation inputs consist of unadjusted quoted prices in an active market for identical investments. |
• | Level 2 valuation inputs consist of direct or indirect observable market data (including quoted prices for |
14
comparable investments, evaluations of subsequent market events, interest rates, prepayment speeds, credit risk, etc.). These inputs also consist of quoted prices for identical investments initially expressed in local currencies that are adjusted through translation into U.S. dollars.
• | Level 3 valuation inputs consist of unobservable data (including a fund’s own assumptions). |
The level classification is based on the lowest level input that is significant to the fair valuation measurement. The valuation inputs are not necessarily an indication of the risks associated with investing in these securities or other financial instruments. There were no significant transfers between levels during the period.
The following is a summary of the level classifications as of period end. The Schedule of Investments provides additional information on the fund’s portfolio holdings.
Level 1 | Level 2 | Level 3 | ||||||
Assets | ||||||||
Investment Securities | ||||||||
Common Stocks | $ | 1,278,335,517 | — | — | ||||
Temporary Cash Investments | 3,829 | $ | 8,889,814 | — | ||||
$ | 1,278,339,346 | $ | 8,889,814 | — |
7. Risk Factors
The fund concentrates its investments in a narrow segment of the total market. Because of this, the fund is subject to certain additional risks as compared to investing in a more diversified portfolio of investments. The fund may be subject to certain risks similar to those associated with direct investment in real estate including but not limited to: local or regional economic conditions, changes in zoning laws, changes in property values, property tax increases, overbuilding, increased competition, environmental contamination, natural disasters, and interest rate risk.
The fund’s investment process may result in high portfolio turnover, which could mean high transaction costs, affecting both performance and capital gains tax liabilities to investors.
8. Federal Tax Information
The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
As of period end, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $ | 1,118,737,793 | |
Gross tax appreciation of investments | $ | 180,173,117 | |
Gross tax depreciation of investments | (11,681,750 | ) | |
Net tax appreciation (depreciation) of investments | $ | 168,491,367 |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales.
9. Recently Issued Accounting Guidance
In October 2016, the Securities and Exchange Commission adopted new rules and forms as well as amendments to its rules and forms to modernize the reporting and disclosure of information by registered investment companies. The amendments to Regulation S-X will require standardized, enhanced disclosure about derivatives in investment company financial statements, as well as other provisions. Compliance with the amendments is effective on August 1, 2017. Management is currently evaluating the impact that adopting the amendments will have on the financial statement disclosures.
15
Financial Highlights |
For a Share Outstanding Throughout the Years Ended October 31 (except as noted) | |||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||
Income From Investment Operations: | Distributions From: | Ratio to Average Net Assets of: | |||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Net Investment Income (Loss) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
Investor Class | |||||||||||||||
2017(3) | $30.69 | 0.41 | —(9) | 0.41 | (0.35) | (2.61) | (2.96) | $28.14 | 1.38% | 1.14%(4) | 2.88%(4) | 85% | $801,154 | ||
2016 | $29.69 | 0.41 | 1.41 | 1.82 | (0.82) | — | (0.82) | $30.69 | 6.19% | 1.14% | 1.32% | 149% | $909,921 | ||
2015 | $28.69 | 0.42 | 1.13 | 1.55 | (0.55) | — | (0.55) | $29.69 | 5.51% | 1.14% | 1.42% | 140% | $925,934 | ||
2014 | $24.56 | 0.30 | 4.29 | 4.59 | (0.46) | — | (0.46) | $28.69 | 18.89% | 1.14% | 1.16% | 127% | $1,025,749 | ||
2013 | $23.05 | 0.36 | 1.70 | 2.06 | (0.55) | — | (0.55) | $24.56 | 9.04% | 1.14% | 1.48% | 170% | $847,977 | ||
2012(5) | $22.35 | 0.09 | 0.66 | 0.75 | (0.05) | — | (0.05) | $23.05 | 3.38% | 1.15%(4) | 0.64%(4) | 86% | $759,303 | ||
2012 | $19.58 | 0.17 | 2.87 | 3.04 | (0.27) | — | (0.27) | $22.35 | 15.62% | 1.16% | 0.83% | 168% | $696,245 | ||
I Class(6) | |||||||||||||||
2017(3) | $30.77 | 0.44 | (0.01) | 0.43 | (0.38) | (2.61) | (2.99) | $28.21 | 1.48% | 0.94%(4) | 3.08%(4) | 85% | $164,548 | ||
2016 | $29.76 | 0.46 | 1.43 | 1.89 | (0.88) | — | (0.88) | $30.77 | 6.40% | 0.94% | 1.52% | 149% | $183,181 | ||
2015 | $28.75 | 0.51 | 1.11 | 1.62 | (0.61) | — | (0.61) | $29.76 | 5.70% | 0.94% | 1.62% | 140% | $159,721 | ||
2014 | $24.61 | 0.35 | 4.30 | 4.65 | (0.51) | — | (0.51) | $28.75 | 19.17% | 0.94% | 1.36% | 127% | $387,099 | ||
2013 | $23.10 | 0.41 | 1.70 | 2.11 | (0.60) | — | (0.60) | $24.61 | 9.23% | 0.94% | 1.68% | 170% | $413,623 | ||
2012(5) | $22.40 | 0.11 | 0.67 | 0.78 | (0.08) | — | (0.08) | $23.10 | 3.47% | 0.95%(4) | 0.84%(4) | 86% | $324,283 | ||
2012 | $19.62 | 0.21 | 2.87 | 3.08 | (0.30) | — | (0.30) | $22.40 | 15.86% | 0.96% | 1.03% | 168% | $290,557 |
For a Share Outstanding Throughout the Years Ended October 31 (except as noted) | |||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||
Income From Investment Operations: | Distributions From: | Ratio to Average Net Assets of: | |||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Net Investment Income (Loss) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
Y Class | |||||||||||||||
2017(7) | $28.68 | 0.01 | (0.49) | (0.48) | — | — | — | $28.20 | (1.67)% | 0.79%(4) | 0.34%(4) | 85%(8) | $5 | ||
A Class | |||||||||||||||
2017(3) | $30.70 | 0.37 | —(9) | 0.37 | (0.33) | (2.61) | (2.94) | $28.13 | 1.25% | 1.39%(4) | 2.63%(4) | 85% | $127,378 | ||
2016 | $29.69 | 0.34 | 1.41 | 1.75 | (0.74) | — | (0.74) | $30.70 | 5.92% | 1.39% | 1.07% | 149% | $153,281 | ||
2015 | $28.69 | 0.34 | 1.14 | 1.48 | (0.48) | — | (0.48) | $29.69 | 5.24% | 1.39% | 1.17% | 140% | $175,833 | ||
2014 | $24.55 | 0.24 | 4.30 | 4.54 | (0.40) | — | (0.40) | $28.69 | 18.59% | 1.39% | 0.91% | 127% | $175,133 | ||
2013 | $23.05 | 0.30 | 1.69 | 1.99 | (0.49) | — | (0.49) | $24.55 | 8.77% | 1.39% | 1.23% | 170% | $201,660 | ||
2012(5) | $22.35 | 0.05 | 0.67 | 0.72 | (0.02) | — | (0.02) | $23.05 | 3.21% | 1.40%(4) | 0.39%(4) | 86% | $166,497 | ||
2012 | $19.60 | 0.11 | 2.87 | 2.98 | (0.23) | — | (0.23) | $22.35 | 15.33% | 1.41% | 0.58% | 168% | $151,198 | ||
C Class | |||||||||||||||
2017(3) | $30.18 | 0.28 | (0.02) | 0.26 | (0.27) | (2.61) | (2.88) | $27.56 | 0.89% | 2.14%(4) | 1.88%(4) | 85% | $12,173 | ||
2016 | $29.22 | 0.11 | 1.37 | 1.48 | (0.52) | — | (0.52) | $30.18 | 5.10% | 2.14% | 0.32% | 149% | $15,986 | ||
2015 | $28.25 | 0.12 | 1.13 | 1.25 | (0.28) | — | (0.28) | $29.22 | 4.47% | 2.14% | 0.42% | 140% | $17,439 | ||
2014 | $24.18 | 0.04 | 4.23 | 4.27 | (0.20) | — | (0.20) | $28.25 | 17.74% | 2.14% | 0.16% | 127% | $16,972 | ||
2013 | $22.72 | 0.12 | 1.67 | 1.79 | (0.33) | — | (0.33) | $24.18 | 7.93% | 2.14% | 0.48% | 170% | $17,057 | ||
2012(5) | $22.11 | (0.05) | 0.66 | 0.61 | — | — | — | $22.72 | 2.76% | 2.15%(4) | (0.36)%(4) | 86% | $5,622 | ||
2012 | $19.48 | (0.02) | 2.82 | 2.80 | (0.17) | — | (0.17) | $22.11 | 14.44% | 2.16% | (0.17)% | 168% | $2,574 |
For a Share Outstanding Throughout the Years Ended October 31 (except as noted) | |||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||
Income From Investment Operations: | Distributions From: | Ratio to Average Net Assets of: | |||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Net Investment Income (Loss) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
R Class | |||||||||||||||
2017(3) | $30.55 | 0.38 | (0.04) | 0.34 | (0.31) | (2.61) | (2.92) | $27.97 | 1.15% | 1.64%(4) | 2.38%(4) | 85% | $12,907 | ||
2016 | $29.55 | 0.23 | 1.43 | 1.66 | (0.66) | — | (0.66) | $30.55 | 5.64% | 1.64% | 0.82% | 149% | $19,112 | ||
2015 | $28.55 | 0.26 | 1.15 | 1.41 | (0.41) | — | (0.41) | $29.55 | 4.97% | 1.64% | 0.92% | 140% | $14,458 | ||
2014 | $24.44 | 0.16 | 4.28 | 4.44 | (0.33) | — | (0.33) | $28.55 | 18.30% | 1.64% | 0.66% | 127% | $8,743 | ||
2013 | $22.95 | 0.24 | 1.68 | 1.92 | (0.43) | — | (0.43) | $24.44 | 8.50% | 1.64% | 0.98% | 170% | $5,866 | ||
2012(5) | $22.27 | 0.02 | 0.66 | 0.68 | —(9) | — | —(9) | $22.95 | 3.06% | 1.65%(4) | 0.14%(4) | 86% | $3,466 | ||
2012 | $19.55 | 0.08 | 2.84 | 2.92 | (0.20) | — | (0.20) | $22.27 | 15.01% | 1.66% | 0.33% | 168% | $2,224 | ||
R5 Class | |||||||||||||||
2017(7) | $28.69 | —(9) | (0.48) | (0.48) | — | — | — | $28.21 | (1.67)% | 0.94%(4) | 0.19%(4) | 85%(8) | $5 | ||
R6 Class | |||||||||||||||
2017(3) | $30.76 | 0.46 | (0.01) | 0.45 | (0.40) | (2.61) | (3.01) | $28.20 | 1.55% | 0.79%(4) | 3.23%(4) | 85% | $169,039 | ||
2016 | $29.75 | 0.51 | 1.43 | 1.94 | (0.93) | — | (0.93) | $30.76 | 6.57% | 0.79% | 1.67% | 149% | $149,866 | ||
2015 | $28.74 | 0.49 | 1.17 | 1.66 | (0.65) | — | (0.65) | $29.75 | 5.86% | 0.79% | 1.77% | 140% | $174,257 | ||
2014 | $24.61 | 0.33 | 4.35 | 4.68 | (0.55) | — | (0.55) | $28.74 | 19.31% | 0.79% | 1.51% | 127% | $29,151 | ||
2013(10) | $25.22 | 0.07 | (0.53) | (0.46) | (0.15) | — | (0.15) | $24.61 | (1.77)% | 0.79%(4) | 1.04%(4) | 170%(11) | $1,377 |
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 and do not reflect applicable sales charges, if any. Total returns for periods less than one year are not annualized. |
(3) | Six months ended April 30, 2017 (unaudited). |
(4) | Annualized. |
(5) | April 1, 2012 through October 31, 2012. The fund's fiscal year end was changed from March 31 to October 31, resulting in a seven-month annual reporting period. For the years before October 31, 2012, the fund's fiscal year end was March 31. |
(6) | Prior to April 10, 2017, the I Class was referred to as the Institutional Class. |
(7) | April 10, 2017 (commencement of sale) through April 30, 2017 (unaudited). |
(8) | Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the six months ended April 30, 2017. |
(9) | Per-share amount was less than $0.005. |
(10) | July 26, 2013 (commencement of sale) through October 31, 2013. |
(11) | Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended October 31, 2013. |
See Notes to Financial Statements.
Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain IRAs are subject to federal income tax withholding, unless you elect not to have withholding apply. Tax will be withheld on the total amount withdrawn even though you may be receiving amounts that are not subject to withholding, such as nondeductible contributions. In such case, excess amounts of withholding could occur. You may adjust your withholding election so that a greater or lesser amount will be withheld.
If you don’t want us to withhold on this amount, you must notify us to not withhold the federal income tax. You may notify us in writing or in certain situations by telephone or through other electronic means. For systematic withdrawals, your withholding election will remain in effect until revoked or changed by filing a new election. You have the right to revoke your election at any time.
Remember, even if you elect not to have income tax withheld, you are liable for paying income tax on the taxable portion of your withdrawal. If you elect not to have income tax withheld or you don’t have enough income tax withheld, you may be responsible for payment of estimated tax. You may incur penalties under the estimated tax rules if your withholding and estimated tax payments are not sufficient. You can reduce or defer the income tax on a distribution by directly or indirectly rolling such distribution over to another IRA or eligible plan. You should consult your tax advisor for additional information.
State tax will be withheld if, at the time of your distribution, your address is within one of the mandatory withholding states and you have federal income tax withheld (or as otherwise required by state law). State taxes will be withheld from your distribution in accordance with the respective state rules.
Distributions you receive from 403(b), 457 and qualified plans are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
A description of the policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund is available without charge, upon request, by calling 1-800-345-2021. It is also available on the "About Us" page of American Century Investments’ website at americancentury.com and on the Securities and Exchange Commission’s website at sec.gov. Information regarding how the investment advisor voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the "About Us" page at americancentury.com. It is also available at sec.gov.
Quarterly Portfolio Disclosure
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-Q. The fund’s Forms N-Q are available on the SEC’s website at sec.gov, and may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The fund also makes its complete schedule of portfolio holdings for the most recent quarter of its fiscal year available on its website at americancentury.com and, upon request, by calling 1-800-345-2021.
20
Contact Us | americancentury.com | |
Automated Information Line | 1-800-345-8765 | |
Investor Services Representative | 1-800-345-2021 or 816-531-5575 | |
Investors Using Advisors | 1-800-378-9878 | |
Business, Not-For-Profit, Employer-Sponsored Retirement Plans | 1-800-345-3533 | |
Banks and Trust Companies, Broker-Dealers, Financial Professionals, Insurance Companies | 1-800-345-6488 | |
Telecommunications Relay Service for the Deaf | 711 | |
American Century Capital Portfolios, Inc. | ||
Investment Advisor: American Century Investment Management, Inc. Kansas City, Missouri | ||
This report and the statements it contains are submitted for the general information of our shareholders. The report is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus. | ||
©2017 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-92367 1706 |
ITEM 2. CODE OF ETHICS.
Not applicable for semiannual report filings.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable for semiannual report filings.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable for semiannual report filings.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. INVESTMENTS.
(a) | The schedule of investments is included as part of the report to stockholders filed under Item 1 of this Form. |
(b) | Not applicable. |
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
During the reporting period, there were no material changes to the procedures by which shareholders may recommend nominees to the registrant’s board.
ITEM 11. CONTROLS AND PROCEDURES.
(a) | The registrant's principal executive officer and principal financial officer have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) are |
effective based on their evaluation of these controls and procedures as of a date within 90 days of the filing date of this report.
(b) | There were no changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the registrant's second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant's internal control over financial reporting. |
ITEM 12. EXHIBITS.
(a)(1) | Not applicable for semiannual report filings. |
(a)(2) | Separate certifications by the registrant’s principal executive officer and principal financial officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 and Rule 30a-2(a) under the Investment Company Act of 1940, are filed and attached hereto as EX-99.CERT. |
(a)(3) | Not applicable. |
(b) | A certification by the registrant’s chief executive officer and chief financial officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, is furnished and attached hereto as EX- 99.906CERT. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Registrant: | American Century Capital Portfolios, Inc. | ||
By: | /s/ Jonathan S. Thomas | ||
Name: | Jonathan S. Thomas | ||
Title: | President | ||
Date: | June 27, 2017 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By: | /s/ Jonathan S. Thomas | |
Name: | Jonathan S. Thomas | |
Title: | President | |
(principal executive officer) | ||
Date: | June 27, 2017 |
By: | /s/ C. Jean Wade | |
Name: | C. Jean Wade | |
Title: | Vice President, Treasurer, and | |
Chief Financial Officer | ||
(principal financial officer) | ||
Date: | June 27, 2017 |