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: | 04-30-2018 |
ITEM 1. REPORTS TO STOCKHOLDERS.
SEMIANNUAL REPORT | |
APRIL 30, 2018 | |
AC Alternatives® Income Fund |
Investor Class (ALNNX) |
I Class (ALNIX) |
Y Class (ALYNX) |
A Class (ALNAX) |
C Class (ALNHX) |
R Class (ALNRX) |
R6 Class (ALNDX) |
Table of Contents |
Any opinions expressed in this report reflect those of the author as of the date of the report, and do not necessarily represent the opinions of American Century Investments® or any other person in the American Century Investments organization. Any such opinions are subject to change at any time based upon market or other conditions and American Century Investments disclaims any responsibility to update such opinions. These opinions may not be relied upon as investment advice and, because investment decisions made by American Century Investments funds are based on numerous factors, may not be relied upon as an indication of trading intent on behalf of any American Century Investments fund. Security examples are used for representational purposes only and are not intended as recommendations to purchase or sell securities. Performance information for comparative indices and securities is provided to American Century Investments by third party vendors. To the best of American Century Investments’ knowledge, such information is accurate at the time of printing.
President’s Letter |
Jonathan Thomas
Dear Investor:
Thank you for reviewing this semiannual report for the six months ended April 30, 2018. It provides a market overview (below), followed by a schedule of fund investments and other financial information. For additional commentary and information on fund performance, plus other investment insights, we encourage you to visit our website, americancentury.com.
Volatility’s Return Restrains Rally
From rally to retreat, global financial markets experienced two distinct performance patterns during the six-month period. For the first three months, improving global growth, positive corporate earnings results, generally muted inflation, and rising, though still relatively low, interest rates supported equity market gains. U.S. stocks were notably strong, with the S&P 500 Index returning more than 10% for the three months ended January 31, 2018. U.S. Treasury yields edged higher, and interest-rate-sensitive assets, including U.S. fixed-income securities and real estate investment trusts (REITs), generated more-modest gains. Meanwhile, accommodative central bank policy continued to fuel gains among non-U.S. developed markets bonds, while a weaker U.S. dollar largely aided emerging markets bonds.
The backdrop changed swiftly and sharply in early February. U.S. stocks plunged after the U.S. Department of Labor announced wages grew at their fastest year-over-year pace in nine years. This news, coupled with other positive economic data and rising inflation expectations, pushed interest rates higher and triggered fears that the Federal Reserve (the Fed) would ramp up its rate-hike campaign. In addition, President Trump announced a tariff strategy that sparked fears of a global trade war. Volatility subsided somewhat by the end of the reporting period, as economic and inflation data and the Fed’s rate-hike strategy were generally aligned with investor expectations. Although returns for most global asset classes declined for the three months ended April 30, 2018, earlier gains were sufficient to keep results positive for the entire six-month period.
With economic growth improving, inflationary pressures mounting, Treasury yields rising, and volatility resurfacing, investors likely will face new opportunities and challenges in the months ahead. We believe this scenario warrants a disciplined, diversified, and risk-aware approach, using professionally managed portfolios in pursuit of investment goals. We appreciate your continued trust and confidence in us.
Sincerely,
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
2
Fund Characteristics |
APRIL 30, 2018 | |
Types of Investments in Portfolio | % of net assets |
Asset-Backed Securities | 18.4% |
Bank Loan Obligations | 14.7% |
Common Stocks | 14.2% |
Corporate Bonds | 12.7% |
Collateralized Loan Obligations | 10.5% |
Commercial Mortgage-Backed Securities | 7.4% |
Exchange-Traded Funds | 6.7% |
Exchange-Traded Notes | 5.0% |
Preferred Stocks | 2.2% |
Collateralized Mortgage Obligations | 2.0% |
Convertible Bonds | 0.2% |
Corporate Bonds Sold Short | (0.1)% |
Temporary Cash Investments | 7.5% |
Other Assets and Liabilities | (1.4)% |
3
Shareholder Fee Example |
Fund shareholders may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption/exchange fees; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in your fund and to compare these costs with the ongoing cost of investing in other mutual funds.
The example is based on an investment of $1,000 made at the beginning of the period and held for the entire period from November 1, 2017 to April 30, 2018.
Actual Expenses
The table provides information about actual account values and actual expenses for each class. You may use the information, together with the amount you invested, to estimate the expenses that you paid over the period. First, identify the share class you own. Then simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
If you hold Investor Class shares of any American Century Investments fund, or I Class shares of the American Century Diversified Bond Fund, in an American Century Investments account (i.e., not a financial intermediary or retirement plan account), American Century Investments may charge you a $12.50 semiannual account maintenance fee if the value of those shares is less than $10,000. We will redeem shares automatically in one of your accounts to pay the $12.50 fee. In determining your total eligible investment amount, we will include your investments in all personal accounts (including American Century Investments Brokerage accounts) registered under your Social Security number. Personal accounts include individual accounts, joint accounts, UGMA/UTMA accounts, personal trusts, Coverdell Education Savings Accounts and IRAs (including traditional, Roth, Rollover, SEP-, SARSEP- and SIMPLE-IRAs), and certain other retirement accounts. If you have only business, business retirement, employer-sponsored or American Century Investments Brokerage accounts, you are currently not subject to this fee. If you are subject to the Account Maintenance Fee, your account value could be reduced by the fee amount.
Hypothetical Example for Comparison Purposes
The table also provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio of each class of your fund and an assumed rate of return of 5% per year before expenses, which is not the actual return of a fund’s share class. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) or redemption/exchange fees. Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
4
Beginning Account Value 11/1/17 | Ending Account Value 4/30/18 | Expenses Paid During Period(1) 11/1/17 - 4/30/18 | Annualized Expense Ratio(1) | |
Actual | ||||
Investor Class | $1,000 | $1,008.10 | $9.56 | 1.92% |
I Class | $1,000 | $1,010.10 | $8.57 | 1.72% |
Y Class | $1,000 | $1,009.90 | $7.82 | 1.57% |
A Class | $1,000 | $1,006.80 | $10.80 | 2.17% |
C Class | $1,000 | $1,003.10 | $14.50 | 2.92% |
R Class | $1,000 | $1,006.60 | $12.04 | 2.42% |
R6 Class | $1,000 | $1,009.80 | $7.82 | 1.57% |
Hypothetical | ||||
Investor Class | $1,000 | $1,015.27 | $9.59 | 1.92% |
I Class | $1,000 | $1,016.27 | $8.60 | 1.72% |
Y Class | $1,000 | $1,017.01 | $7.85 | 1.57% |
A Class | $1,000 | $1,014.03 | $10.84 | 2.17% |
C Class | $1,000 | $1,010.32 | $14.56 | 2.92% |
R Class | $1,000 | $1,012.79 | $12.08 | 2.42% |
R6 Class | $1,000 | $1,017.01 | $7.85 | 1.57% |
(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. Annualized expense ratio reflects actual expenses, including any applicable fee waivers or expense reimbursements and excluding any acquired fund fees and expenses. |
5
Schedule of Investments |
APRIL 30, 2018 (UNAUDITED)
Principal Amount/ Shares | Value | ||||||
ASSET-BACKED SECURITIES(1) — 18.4% | |||||||
AmeriCredit Automobile Receivables, Series 2015-4, Class D, 3.72%, 12/8/21 | $ | 80,000 | $ | 80,762 | |||
Avant Loans Funding Trust, Series 2016-C, Class B, 4.92%, 11/16/20(2) | 142,176 | 142,771 | |||||
Avant Loans Funding Trust, Series 2017-B, Class C, 4.99%, 11/15/23(2) | 500,000 | 504,111 | |||||
Avis Budget Rental Car Funding AESOP LLC, Series 2017-2A, Class C, 4.17%, 3/20/24(2) | 500,000 | 490,942 | |||||
Bear Stearns Asset Backed Securities Trust, Series 2007-2, Class A2, VRN, 2.22%, 5/25/18, resets monthly off the 1-month LIBOR plus 0.32% | 181,471 | 181,270 | |||||
CAL Funding II Ltd., Series 2012-1A, Class A SEQ, 3.47%, 10/25/27(2) | 794,250 | 787,532 | |||||
CAL Funding II Ltd., Series 2013-1A, Class A SEQ, 3.35%, 3/27/28(2) | 226,167 | 223,978 | |||||
CarMax Auto Owner Trust, Series 2017-1, Class D, 3.43%, 7/17/23 | 750,000 | 746,159 | |||||
CarMax Auto Owner Trust, Series 2018-2, Class D, 3.99%, 4/15/25 | 800,000 | 799,018 | |||||
CFG Investments Ltd., Series 2017-1, Class A SEQ, 7.87%, 11/15/26(2) | 1,000,000 | 1,039,922 | |||||
CFG Investments Ltd., Series 2017-1, Class B, 9.42%, 11/15/26(2) | 1,000,000 | 1,031,660 | |||||
CLI Funding LLC, Series 2018-1A, Class A SEQ, 4.03%, 4/18/43(2)(3) | 770,000 | 770,870 | |||||
CLI Funding V LLC, Series 2013-2A, SEQ, 3.22%, 6/18/28(2) | 271,916 | 268,262 | |||||
CLI Funding V LLC, Series 2014-1A, Class A SEQ, 3.29%, 6/18/29(2) | 865,044 | 852,263 | |||||
CLI Funding V LLC, Series 2014-2A, Class A SEQ, 3.38%, 10/18/29(2) | 381,012 | 375,289 | |||||
CLI Funding VI LLC, Series 2017-1A, Class A SEQ, 3.62%, 5/18/42(2) | 448,467 | 442,007 | |||||
Coinstar Funding LLC Series, Series 2017-1A, Class A2 SEQ, 5.22%, 4/25/47(2) | 495,000 | 505,990 | |||||
CPS Auto Receivables Trust, Series 2014-C, Class D, 4.83%, 8/17/20(2) | 250,000 | 250,862 | |||||
CPS Auto Receivables Trust, Series 2015-C, Class C SEQ, 3.42%, 8/16/21(2) | 370,000 | 370,817 | |||||
CPS Auto Receivables Trust, Series 2015-C, Class D SEQ, 4.63%, 8/16/21(2) | 207,000 | 210,051 | |||||
CPS Auto Trust, Series 2016-D, Class D SEQ, 4.53%, 1/17/23(2) | 750,000 | 760,298 | |||||
Cronos Containers Program I Ltd., Series 2013-1A, Class A SEQ, 3.08%, 4/18/28(2) | 632,500 | 622,568 | |||||
Drive Auto Receivables Trust, Series 2015-AA, Class D, 4.12%, 7/15/22(2) | 250,000 | 251,982 | |||||
DT Auto Owner Trust, Series 2014-3A, Class D, 4.47%, 11/15/21(2) | 637,542 | 642,072 | |||||
DT Auto Owner Trust, Series 2015-2A, Class D, 4.25%, 2/15/22(2) | 380,000 | 383,236 |
6
Principal Amount/ Shares | Value | ||||||
DT Auto Owner Trust, Series 2016-1A, Class D, 4.66%, 12/15/22(2) | $ | 1,000,000 | $ | 1,013,632 | |||
DT Auto Owner Trust, Series 2016-3A, Class D, 4.52%, 6/15/23(2) | 400,000 | 405,136 | |||||
Element Rail Leasing II LLC, Series 2015-1A, Class A2 SEQ, 3.59%, 2/19/45(2) | 750,000 | 744,046 | |||||
Exeter Automobile Receivables Trust, Series 2015-1A, Class C, 4.10%, 12/15/20(2) | 1,210,000 | 1,218,759 | |||||
Exeter Automobile Receivables Trust, Series 2015-1A, Class D, 5.83%, 12/15/21(2) | 1,000,000 | 1,022,657 | |||||
Global SC Finance II SRL, Series 2013-1A, Class A SEQ, 2.98%, 4/17/28(2) | 175,000 | 172,242 | |||||
Global SC Finance II SRL, Series 2013-2A, Class A SEQ, 3.67%, 11/17/28(2) | 549,667 | 546,641 | |||||
Global SC Finance II SRL, Series 2014-1A, Class A1 SEQ, 3.19%, 7/17/29(2) | 869,375 | 854,841 | |||||
Global SC Finance II SRL, Series 2014-1A, Class A2 SEQ, 3.09%, 7/17/29(2) | 871,875 | 852,579 | |||||
Global SC Finance IV Ltd., Series 2017-1A, Class A SEQ, 3.85%, 4/15/37(2) | 910,871 | 905,604 | |||||
HERO Funding Trust, Series 2016-4A, Class A2 SEQ, 4.29%, 9/20/47(2) | 704,271 | 719,149 | |||||
HERO Funding Trust, Series 2017-2A, Class A2 SEQ, 4.07%, 9/20/48(2) | 434,169 | 439,657 | |||||
Hertz Vehicle Financing II LP, Series 2016-1A, Class B, 3.72%, 3/25/20(2) | 166,000 | 166,613 | |||||
Hertz Vehicle Financing II LP, Series 2016-2A, Class B, 3.94%, 3/25/22(2) | 262,800 | 263,299 | |||||
Hertz Vehicle Financing II LP, Series 2016-2A, Class C, 4.99%, 3/25/22(2) | 370,000 | 373,837 | |||||
Hertz Vehicle Financing II LP, Series 2017-2A, Class B, 4.20%, 10/25/23(2) | 1,475,000 | 1,484,869 | |||||
Hertz Vehicle Financing II LP, Series 2017-2A, Class C, 5.31%, 10/25/23(2) | 250,000 | 255,411 | |||||
Hertz Vehicle Financing II LP, Series 2018-1A, Class B, 3.60%, 2/25/24(2) | 1,000,000 | 981,853 | |||||
Invitation Homes Trust, Series 2018-SFR2, Class D, VRN, 3.35%, 6/17/18, resets monthly off the 1-month LIBOR plus 1.45%(2)(3) | 1,000,000 | 1,002,077 | |||||
Invitation Homes Trust, Series 2018-SFR2, Class E, VRN, 3.90%, 6/17/18, resets monthly off the 1-month LIBOR plus 2.00%(2)(3) | 1,000,000 | 1,005,144 | |||||
Kabbage Asset Securitization LLC, Series 2017-1, Class A SEQ, 4.57%, 3/15/22(2) | 1,500,000 | 1,522,346 | |||||
Marlette Funding Trust, Series 2017-1A, Class A SEQ, 2.83%, 3/15/24(2) | 544,017 | 543,778 | |||||
Marlette Funding Trust, Series 2017-2A, Class C, 4.58%, 7/15/24(2) | 1,000,000 | 1,013,622 | |||||
Marlette Funding Trust, Series 2017-3A, Class C, 4.01%, 12/15/24(2) | 500,000 | 500,808 | |||||
Marlette Funding Trust, Series 2017-3A, Class B, 3.01%, 12/15/24(2) | 1,000,000 | 989,421 | |||||
OneMain Financial Issuance Trust, Series 2015-1A, Class C, 5.12%, 3/18/26(2) | 981,000 | 1,000,838 | |||||
OneMain Financial Issuance Trust, Series 2015-2A, Class A SEQ, 2.57%, 7/18/25(2) | 98,671 | 98,748 |
7
Principal Amount/ Shares | Value | ||||||
OneMain Financial Issuance Trust, Series 2016-2A, Class A SEQ, 4.10%, 3/20/28(2) | $ | 587,088 | $ | 591,498 | |||
OneMain Financial Issuance Trust, Series 2016-2A, Class B, 5.94%, 3/20/28(2) | 1,000,000 | 1,035,031 | |||||
OneMain Financial Issuance Trust, Series 2016-3A, Class A SEQ, 3.83%, 6/18/31(2) | 475,000 | 476,427 | |||||
OneMain Financial Issuance Trust, Series 2017-1A, Class D, 4.52%, 9/14/32(2) | 2,500,000 | 2,461,482 | |||||
OneMain Financial Issuance Trust, Series 2018-2A, Class A SEQ, 3.57%, 3/14/33(2) | 675,000 | 671,921 | |||||
Santander Drive Auto Receivables Trust, Series 2016-1, Class D, 4.02%, 4/15/22 | 500,000 | 507,340 | |||||
Sierra Timeshare Receivables Funding LLC, Series 2014-2A, Class B, VRN, 2.40%, 5/20/18(2)(4) | 67,131 | 66,854 | |||||
Skopos Auto Receivables Trust, Series 2015-2A, Class B, 5.71%, 2/15/21(2) | 665,431 | 670,562 | |||||
Springleaf Funding Trust, Series 2015-AA, Class A SEQ, 3.16%, 11/15/24(2) | 477,560 | 477,486 | |||||
Springleaf Funding Trust, Series 2015-AA, Class B, 3.62%, 11/15/24(2) | 130,000 | 129,652 | |||||
TAL Advantage V LLC, Series 2014-1A, Class A SEQ, 3.51%, 2/22/39(2) | 457,917 | 454,614 | |||||
TAL Advantage V LLC, Series 2014-3A, Class A SEQ, 3.27%, 11/21/39(2) | 197,500 | 194,284 | |||||
Textainer Marine Containers V Ltd., Series 2017-1A, Class A SEQ, 3.72%, 5/20/42(2) | 637,093 | 630,961 | |||||
Triton Container Finance IV LLC, Series 2017-2A, Class A SEQ, 3.62%, 8/20/42(2) | 940,380 | 927,285 | |||||
Triton Container Finance VI LLC, Series 2017-1A, Class A SEQ, 3.52%, 6/20/42(2) | 735,842 | 724,658 | |||||
Vantage Data Centers Issuer LLC, Series 2018-1A, Class A2 SEQ, 4.07%, 2/16/43(2) | 1,497,500 | 1,496,922 | |||||
Vertical Bridge CC LLC, Series 2016-2A, Class A SEQ, 5.19%, 10/15/46(2) | 984,061 | 995,874 | |||||
VOLT LIX LLC, Series 2017-NPL6, Class A1 SEQ, VRN, 3.25%, 5/25/20(2)(5) | 600,012 | 597,771 | |||||
VOLT LVII LLC, Series 2017-NPL4, Class A1 SEQ, VRN, 3.375%, 4/25/20(2)(5) | 460,036 | 459,760 | |||||
TOTAL ASSET-BACKED SECURITIES (Cost $46,362,640) | 46,402,681 | ||||||
BANK LOAN OBLIGATIONS(6) — 14.7% | |||||||
Advertising — 0.1% | |||||||
Polyconcept Investments B.V., USD 2016 Term Loan B, 5.65%, 8/16/23, resets monthly off the 1-month LIBOR plus 3.75% | 299,520 | 302,515 | |||||
Aerospace and Defense — 0.8% | |||||||
Accudyne Industries, LLC, 2017 Term Loan, 5.15%, 8/18/24, resets monthly off the 1-month LIBOR plus 3.25% | 175,456 | 176,832 | |||||
DAE Aviation Holdings, Inc., 1st Lien Term Loan, 5.65%, 7/7/22, resets monthly off the 1-month LIBOR plus 3.75% | 773,476 | 781,149 | |||||
Jazz Acquisition, Inc., 1st Lien Term Loan, 5.80%, 6/19/21, resets quarterly off the 3-month LIBOR plus 3.50% | 244,777 | 239,678 | |||||
Sequa Mezzanine Holdings L.L.C., 1st Lien Term Loan, 7.07%, 11/28/21, resets quarterly off the 3-month LIBOR plus 5.00% | 507,068 | 514,463 | |||||
TransDigm, Inc., 2017 Extended Term Loan F, 5.05%, 6/9/23, resets quarterly off the 3-month LIBOR plus 2.75% | 98,997 | 99,537 |
8
Principal Amount/ Shares | Value | ||||||
TransDigm, Inc., 2017 Extended Term Loan F, 4.65%, 6/9/23, resets monthly off the 1-month LIBOR plus 2.75% | $ | 189,039 | $ | 190,071 | |||
2,001,730 | |||||||
Chemicals — 0.2% | |||||||
Ascend Performance Materials Operations LLC, Term Loan B, 7.15%, 8/12/22, resets monthly off the 1-month LIBOR plus 5.25% | 366,164 | 368,453 | |||||
Commercial Services and Supplies — 0.5% | |||||||
Pre-Paid Legal Services, Inc., 2018 1st Lien Term Loan, 4/17/25(7) | 133,060 | 134,536 | |||||
Prime Security Services Borrower, LLC, 2016 1st Lien Term Loan, 4.65%, 5/2/22, resets monthly off the 1-month LIBOR plus 2.75% | 349,541 | 352,162 | |||||
Sedgwick Claims Management Services, Inc., 1st Lien Term Loan, 4.65%, 3/1/21, resets monthly off the 1-month LIBOR plus 2.75% | 465,626 | 466,596 | |||||
Sterling Infosystems, Inc., 1st Lien Term Loan, 5.40%, 6/20/22, resets monthly off the 1-month LIBOR plus 3.50% | 43,306 | 43,468 | |||||
Syniverse Holdings, Inc., 2018 1st Lien Term Loan, 6.90%, 3/9/23, resets monthly off the 1-month LIBOR plus 5.00% | 64,730 | 65,522 | |||||
TNS, Inc., 1st Lien Term Loan, 5.91%, 8/14/22, resets monthly off the 1-month LIBOR plus 4.00% | 2,785 | 2,804 | |||||
TNS, Inc., 1st Lien Term Loan, 5.91%, 8/14/22, resets monthly off the 1-month LIBOR plus 4.00% | 244,427 | 246,108 | |||||
1,311,196 | |||||||
Communications — 0.8% | |||||||
GTT Communications, Inc., 2017 Add on Term Loan B, 5.19%, 1/9/24, resets monthly off the 1-month LIBOR plus 3.25% | 298,489 | 299,048 | |||||
MH Sub I, LLC, 2017 1st Lien Term Loan, 5.65%, 9/13/24, resets monthly off the 1-month LIBOR plus 3.75% | 766,639 | 767,754 | |||||
Parexel International Corporation, Term Loan B, 4.65%, 9/27/24, resets monthly off the 1-month LIBOR plus 2.75% | 545,184 | 547,657 | |||||
Windstream Services, LLC, Repriced Term Loan B6, 5.90%, 3/29/21, resets monthly off the 1-month LIBOR plus 4.00% | 346,302 | 332,162 | |||||
1,946,621 | |||||||
Communications Equipment — 0.4% | |||||||
Masergy Communications, 2017 1st Lien Term Loan, 5.55%, 12/15/23, resets quarterly off the 3-month LIBOR plus 3.25% | 281,122 | 282,703 | |||||
Polycom, Inc., 1st Lien Term Loan, 7.15%, 9/27/23, resets monthly off the 1-month LIBOR plus 5.25% | 161,274 | 162,827 | |||||
Polycom, Inc., 1st Lien Term Loan, 7.15%, 9/27/23, resets monthly off the 1-month LIBOR plus 5.25% | 112,935 | 114,022 | |||||
Radiate Holdco, LLC, 1st Lien Term Loan, 4.90%, 2/1/24, resets monthly off the 1-month LIBOR plus 3.00% | 486,601 | 482,231 | |||||
1,041,783 | |||||||
Construction and Engineering — 0.2% | |||||||
KBR, Inc., 2018 Term Loan B, 3/28/25(7) | 194,444 | 196,146 | |||||
SRS Distribution Inc., 2015 Term Loan B, 5.15%, 8/25/22, resets monthly off the 1-month LIBOR plus 3.25% | 176,064 | 177,143 | |||||
SRS Distribution Inc., 2015 Term Loan B, 5.55%, 8/25/22, resets quarterly off the 3-month LIBOR plus 3.25% | 125,333 | 126,100 | |||||
499,389 |
9
Principal Amount/ Shares | Value | ||||||
Construction Materials — 0.3% | |||||||
Caelus Energy Alaska O3, LLC, 2nd Lien Term Loan, 9.68%, 4/15/20, resets quarterly off the 3-month LIBOR plus 7.50% | $ | 176,969 | $ | 159,383 | |||
CPG International Inc., 2017 Term Loan, 5.59%, 5/3/24, resets quarterly off the 3-month LIBOR plus 3.75% | 340,188 | 343,431 | |||||
Pisces Midco, Inc., 2018 Term Loan, 6.09%, 4/12/25, resets quarterly off the 3-month LIBOR plus 3.75% | 243,991 | 246,660 | |||||
749,474 | |||||||
Consumer Discretionary — 0.4% | |||||||
National Vision, Inc., 2017 Repriced Term Loan, 4.65%, 11/20/24, resets monthly off the 1-month LIBOR plus 2.75% | 416,588 | 420,668 | |||||
NPC International, Inc., 1st Lien Term Loan, 5.40%, 4/19/24, resets monthly off the 1-month LIBOR plus 3.50% | 108,564 | 110,056 | |||||
William Morris Endeavor Entertainment, LLC, 1st Lien Term Loan, 5.16%, 5/6/21, resets monthly off the 1-month LIBOR plus 3.25% | 503,070 | 507,346 | |||||
William Morris Endeavor Entertainment, LLC, 1st Lien Term Loan, 5.16%, 5/6/21, resets monthly off the 1-month LIBOR plus 3.25% | 45,924 | 46,315 | |||||
1,084,385 | |||||||
Consumer Finance† | |||||||
ASP MCS Acquisition Corp., Term Loan B, 6.65%, 5/18/24, resets monthly off the 1-month LIBOR plus 4.75% | 75,245 | 76,186 | |||||
Consumer, Cyclical — 0.3% | |||||||
CH Hold Corp., 1st Lien Term Loan, 4.90%, 2/1/24, resets monthly off the 1-month LIBOR plus 3.00% | 77,663 | 78,294 | |||||
Financiere Dry Mix Solutions S.A.S., EUR 1st Lien Term Loan, 3.50%, 3/8/24, resets quarterly off the 3-month Euribor plus 3.50% | EUR | 40,325 | 48,946 | ||||
Financiere Dry Mix Solutions S.A.S., EUR 1st Lien Term Loan, 3.50%, 3/8/24, resets quarterly off the 3-month Euribor plus 3.50% | EUR | 98,795 | 119,917 | ||||
Financiere Dry Mix Solutions S.A.S., EUR 1st Lien Term Loan, 3.50%, 3/8/24, resets quarterly off the 3-month Euribor plus 3.50% | EUR | 35,284 | 42,827 | ||||
Hayward Industries, Inc., 1st Lien Term Loan, 5.40%, 8/5/24, resets monthly off the 1-month LIBOR plus 3.50% | $ | 497,500 | 501,234 | ||||
791,218 | |||||||
Consumer, Non-cyclical — 0.1% | |||||||
Concentra Inc., 2018 1st Lien Term Loan, 4.53%, 6/1/22, resets quarterly off the 3-month LIBOR plus 2.75% | 131,746 | 133,063 | |||||
Moran Foods LLC, Term Loan, 7.90%, 12/5/23, resets monthly off the 1-month LIBOR plus 6.00% | 130,939 | 113,983 | |||||
247,046 | |||||||
Containers and Packaging — 0.4% | |||||||
Berlin Packaging LLC, 2017 Term Loan B, 5.00%, 10/1/21, resets weekly off the 1-week LIBOR plus 3.25% | 92,042 | 92,381 | |||||
Berlin Packaging LLC, 2017 Term Loan B, 5.14%, 10/1/21, resets monthly off the 1-month LIBOR plus 3.25% | 117,796 | 118,230 | |||||
Berlin Packaging LLC, 2017 Term Loan B, 5.00%, 10/1/21, resets weekly off the 1-week LIBOR plus 3.25% | 38,246 | 38,386 | |||||
BWAY Holding Company, 2017 Term Loan B, 5.59%, 4/3/24, resets quarterly off the 3-month LIBOR plus 3.25% | 620,173 | 624,604 | |||||
BWAY Holding Company, 2017 Term Loan B, 5.27%, 4/3/24, resets bi-monthly off the 2-month LIBOR plus 3.25% | 1,566 | 1,577 |
10
Principal Amount/ Shares | Value | ||||||
Flex Acquisition Company, Inc., 1st Lien Term Loan, 5.31%, 12/29/23, resets quarterly off the 3-month LIBOR plus 3.00% | $ | 152,704 | $ | 153,694 | |||
1,028,872 | |||||||
Diversified Financial Services — 0.1% | |||||||
AqGen Ascensus, Inc., 2017 Repriced Term Loan, 5.80%, 12/5/22, resets quarterly off the 3-month LIBOR plus 3.50% | 135,767 | 137,294 | |||||
Travelport Finance (Luxembourg) S.a.r.l., 2018 Term Loan B, 4.40%, 3/17/25, resets quarterly off the 3-month LIBOR plus 2.50% | 183,969 | 184,870 | |||||
322,164 | |||||||
Diversified Telecommunication Services — 0.7% | |||||||
CenturyLink, Inc., 2017 Term Loan B, 4.65%, 1/31/25, resets monthly off the 1-month LIBOR plus 2.75% | 470,702 | 464,375 | |||||
Frontier Communications Corp., 2017 Term Loan B1, 5.66%, 6/15/24, resets monthly off the 1-month LIBOR plus 3.75% | 248,747 | 246,221 | |||||
Hargray Communications Group, Inc., 2017 Term Loan B, 4.90%, 5/16/24, resets monthly off the 1-month LIBOR plus 3.00% | 461,121 | 463,426 | |||||
Intelsat Jackson Holdings S.A., 2017 Term Loan B4, 6.46%, 1/2/24, resets quarterly off the 3-month LIBOR plus 4.50% | 99,619 | 103,526 | |||||
Intelsat Jackson Holdings S.A., 2017 Term Loan B5, 6.625%, 1/2/24 | 326,455 | 333,433 | |||||
Telesat Canada, 2018 Term Loan B, 4.41%, 11/17/23, resets quarterly off the 3-month LIBOR plus 2.50% | 197,798 | 199,066 | |||||
1,810,047 | |||||||
Energy — 0.1% | |||||||
BCP Renaissance Parent LLC, 2017 Term Loan B, 6.36%, 10/31/24, resets quarterly off the 3-month LIBOR plus 4.00% | 72,573 | 73,026 | |||||
Oxbow Carbon LLC, 2017 1st Lien Term Loan B, 5.65%, 1/4/23, resets monthly off the 1-month LIBOR plus 3.75% | 43,943 | 44,547 | |||||
Traverse Midstream Partners LLC, 2017 Term Loan, 5.85%, 9/27/24, resets quarterly off the 3-month LIBOR plus 4.00% | 40,662 | 40,948 | |||||
158,521 | |||||||
Energy Equipment and Services — 0.3% | |||||||
Murray Energy Corporation, Term Loan B2, 9.55%, 4/16/20, resets quarterly off the 3-month LIBOR plus 7.25% | 879,194 | 780,399 | |||||
Engineering and Construction† | |||||||
TRC Companies, Inc., Term Loan, 5.40%, 6/21/24, resets monthly off the 1-month LIBOR plus 3.50% | 94,760 | 95,708 | |||||
Equity Real Estate Investment Trusts (REITs) — 0.1% | |||||||
Communications Sales & Leasing, Inc., 2017 Term Loan B, 4.90%, 10/24/22, resets monthly off the 1-month LIBOR plus 3.00% | 219,780 | 212,454 | |||||
Financial Services — 0.2% | |||||||
Asurion LLC, 2017 Term Loan B4, 4.65%, 8/4/22, resets monthly off the 1-month LIBOR plus 2.75% | 240,891 | 242,811 | |||||
Asurion LLC, 2018 Term Loan B6, 4.65%, 11/3/23, resets monthly off the 1-month LIBOR plus 2.75% | 239,934 | 241,922 | |||||
484,733 | |||||||
Food Products† | |||||||
CHG PPC Parent LLC, 2018 Term Loan B, 4.65%, 3/31/25, resets monthly off the 1-month LIBOR plus 2.75% | 81,186 | 81,694 |
11
Principal Amount/ Shares | Value | ||||||
Health Care Providers and Services — 0.6% | |||||||
BioClinica, Inc., 1st Lien Term Loan, 6.625%, 10/20/23, resets quarterly off the 3-month LIBOR plus 4.25% | $ | 15,666 | $ | 15,353 | |||
BioClinica, Inc., 1st Lien Term Loan, 6.625%, 10/20/23, resets quarterly off the 3-month LIBOR plus 4.25% | 202,082 | 198,040 | |||||
BioClinica, Inc., 1st Lien Term Loan, 6.625%, 10/20/23, resets quarterly off the 3-month LIBOR plus 4.25% | 62,666 | 61,413 | |||||
BioClinica, Inc., 1st Lien Term Loan, 6.625%, 10/20/23, resets quarterly off the 3-month LIBOR plus 4.25% | 31,333 | 30,706 | |||||
BioClinica, Inc., 1st Lien Term Loan, 6.625%, 10/20/23, resets quarterly off the 3-month LIBOR plus 4.25% | 791 | 776 | |||||
Change Healthcare Holdings, Inc., 2017 Term Loan B, 4.65%, 3/1/24, resets monthly off the 1-month LIBOR plus 2.75% | 32,036 | 32,199 | |||||
Change Healthcare Holdings, Inc., 2017 Term Loan B, 4.65%, 3/1/24, resets monthly off the 1-month LIBOR plus 2.75% | 81,843 | 82,258 | |||||
Change Healthcare Holdings, Inc., 2017 Term Loan B, 4.65%, 3/1/24, resets monthly off the 1-month LIBOR plus 2.75% | 43,567 | 43,789 | |||||
Change Healthcare Holdings, Inc., 2017 Term Loan B, 4.65%, 3/1/24, resets monthly off the 1-month LIBOR plus 2.75% | 23,089 | 23,206 | |||||
Jaguar Holding Company II, 2018 Term Loan, 4.40%, 8/18/22, resets monthly off the 1-month LIBOR plus 2.50% | 319,353 | 321,476 | |||||
Jaguar Holding Company II, 2018 Term Loan, 4.80%, 8/18/22, resets quarterly off the 3-month LIBOR plus 2.50% | 351,964 | 354,302 | |||||
nThrive, Inc., 2016 1st Lien Term Loan, 6.40%, 10/20/22, resets monthly off the 1-month LIBOR plus 4.50% | 243,171 | 244,843 | |||||
Team Health Holdings, Inc., 1st Lien Term Loan, 4.65%, 2/6/24, resets monthly off the 1-month LIBOR plus 2.75% | 94,291 | 91,580 | |||||
Tecomet Inc., 2017 Repriced Term Loan, 5.28%, 5/1/24, resets quarterly off the 3-month LIBOR plus 3.50% | 92,722 | 93,649 | |||||
Tecomet Inc., 2017 Repriced Term Loan, 7.25%, 5/1/24, resets quarterly off the Prime rate plus 2.50% | 234 | 236 | |||||
1,593,826 | |||||||
Hotels, Restaurants and Leisure — 0.2% | |||||||
1011778 B.C. Unlimited Liability Company, Term Loan B3, 4.15%, 2/16/24, resets monthly off the 1-month LIBOR plus 2.25% | 111,129 | 111,579 | |||||
1011778 B.C. Unlimited Liability Company, Term Loan B3, 4.15%, 2/16/24, resets monthly off the 1-month LIBOR plus 2.25% | 71,741 | 72,031 | |||||
Aramark Services, Inc., 2017 Term Loan B1, 3.90%, 3/11/25, resets monthly off the 1-month LIBOR plus 2.00% | 146,247 | 147,458 | |||||
Scientific Games International, Inc., 2018 Term Loan B5, 4.74%, 8/14/24, resets bi-monthly off the 2-month LIBOR plus 2.75% | 131,665 | 132,621 | |||||
Scientific Games International, Inc., 2018 Term Loan B5, 4.65%, 8/14/24, resets monthly off the 1-month LIBOR plus 2.75% | 31,213 | 31,440 | |||||
495,129 | |||||||
Industrial — 0.2% | |||||||
Compass Power Generation LLC, 2017 Term Loan B, 6.05%, 12/20/24, resets quarterly off the 3-month LIBOR plus 3.75% | 128,586 | 130,353 |
12
Principal Amount/ Shares | Value | ||||||
EXC Holdings III Corp., EUR 2017 1st Lien Term Loan, 3.50%, 12/2/24, resets quarterly off the 3-month Euribor plus 3.50% | EUR | 19,922 | $ | 24,193 | |||
EXC Holdings III Corp., USD 2017 1st Lien Term Loan, 5.16%, 12/2/24, resets semi-annually off the 6-month LIBOR plus 3.50% | $ | 137,982 | 139,074 | ||||
SIG Combibloc PurchaseCo Sarl, 2017 EUR Term Loan, 3.25%, 3/13/22, resets monthly off the 1-month Euribor plus 3.25% | EUR | 83,450 | 101,201 | ||||
394,821 | |||||||
Industrial Conglomerates — 0.3% | |||||||
American Tire Distributors Holdings, Inc., 2015 Term Loan, 6.24%, 9/1/21, resets bi-monthly off the 2-month LIBOR plus 4.25% | $ | 410,873 | 360,262 | ||||
Gates Global LLC, 2017 USD Repriced Term Loan B, 5.05%, 4/1/24, resets quarterly off the 3-month LIBOR plus 2.75% | 495,633 | 499,231 | |||||
859,493 | |||||||
Insurance — 0.1% | |||||||
Alliant Holdings I, Inc., 2015 Term Loan B, 5.15%, 8/12/22, resets monthly off the 1-month LIBOR plus 3.25% | 177,512 | 178,843 | |||||
Genworth Financial, Inc., Term Loan, 6.40%, 2/22/23, resets monthly off the 1-month LIBOR plus 4.50% | 43,475 | 44,290 | |||||
223,133 | |||||||
Internet Software and Services — 0.4% | |||||||
Ancestry.com Operations Inc., 2017 1st Lien Term Loan, 5.15%, 10/19/23, resets monthly off the 1-month LIBOR plus 3.25% | 691,888 | 697,402 | |||||
Rackspace Hosting, Inc., 2017 Incremental 1st Lien Term Loan, 4.79%, 11/3/23, resets quarterly off the 3-month LIBOR plus 3.00% | 354,628 | 354,210 | |||||
1,051,612 | |||||||
IT Services — 0.5% | |||||||
Altran Technologies S.A., EUR 1st Lien Term Loan, 3.25%, 3/20/25, resets bi-monthly off the 2-month Euribor plus 3.25% | EUR | 153,561 | 186,783 | ||||
First Data Corporation, 2022 USD Term Loan, 4.15%, 7/8/22, resets monthly off the 1-month LIBOR plus 2.25% | $ | 437,500 | 439,552 | ||||
First Data Corporation, 2024 USD Term Loan, 4.15%, 4/26/24, resets monthly off the 1-month LIBOR plus 2.25% | 322,908 | 324,407 | |||||
Netsmart Technologies, Inc., 2016 Term Loan C1, 6.40%, 4/19/23, resets monthly off the 1-month LIBOR plus 4.50% | 350,769 | 354,715 | |||||
1,305,457 | |||||||
Life Sciences Tools and Services — 0.1% | |||||||
INC Research, LLC, 2017 Term Loan B, 4.15%, 8/1/24, resets monthly off the 1-month LIBOR plus 2.25% | 66,317 | 66,649 | |||||
INC Research, LLC, 2017 Term Loan B, 4.15%, 8/1/24, resets monthly off the 1-month LIBOR plus 2.25% | 108,242 | 108,783 | |||||
INC Research, LLC, 2017 Term Loan B, 4.15%, 8/1/24, resets monthly off the 1-month LIBOR plus 2.25% | 15,245 | 15,322 | |||||
INC Research, LLC, 2017 Term Loan B, 4.15%, 8/1/24, resets monthly off the 1-month LIBOR plus 2.25% | 5,188 | 5,214 | |||||
195,968 | |||||||
Machinery — 0.3% | |||||||
Circor International, Inc., 2017 1st Lien Term Loan, 5.39%, 12/11/24, resets monthly off the 1-month LIBOR plus 3.50% | 176,055 | 177,046 |
13
Principal Amount/ Shares | Value | ||||||
DXP Enterprises, Inc., 2017 Term Loan B, 7.40%, 8/29/23, resets monthly off the 1-month LIBOR plus 5.50% | $ | 66,819 | $ | 67,112 | |||
Filtration Group Corporation, 2018 EUR Term Loan, 3.50%, 2/27/25, resets quarterly off the 3-month Euribor plus 3.50% | EUR | 209,906 | 253,799 | ||||
Titan Acquisition Limited, 2018 Term Loan B, 5.06%, 3/28/25, resets bi-monthly off the 2-month LIBOR plus 3.00% | $ | 353,079 | 353,962 | ||||
851,919 | |||||||
Media — 1.2% | |||||||
Acosta Holdco, Inc., 2015 Term Loan, 5.15%, 9/26/21, resets monthly off the 1-month LIBOR plus 3.25% | 129,348 | 106,153 | |||||
Advantage Sales & Marketing, Inc., 2014 1st Lien Term Loan, 5.15%, 7/23/21, resets monthly off the 1-month LIBOR plus 3.25% | 272,172 | 261,432 | |||||
Advantage Sales & Marketing, Inc., 2014 1st Lien Term Loan, 5.15%, 7/23/21, resets monthly off the 1-month LIBOR plus 3.25% | 707 | 476 | |||||
Checkout Holding Corp., 1st Lien Term Loan, 5.40%, 4/9/21, resets monthly off the 1-month LIBOR plus 3.50% | 350,549 | 220,320 | |||||
Checkout Holding Corp., 2nd Lien Term Loan, 8.65%, 4/11/22, resets monthly off the 1-month LIBOR plus 6.75% | 38,034 | 8,006 | |||||
CSC Holdings, LLC, 2017 1st Lien Term Loan, 4.15%, 7/17/25, resets monthly off the 1-month LIBOR plus 2.25% | 194,596 | 194,328 | |||||
Emerald Expositions Holding, Inc., 2017 Term Loan B, 4.65%, 5/22/24, resets monthly off the 1-month LIBOR plus 2.75% | 498,744 | 504,876 | |||||
Getty Images, Inc., Term Loan B, 5.80%, 10/18/19, resets quarterly off the 3-month LIBOR plus 3.50% | 177,959 | 169,462 | |||||
GTT Communications, Inc., 2018 EUR Term Loan, 4/26/25(7) | EUR | 372,184 | 448,325 | ||||
PSAV Holdings LLC, 2018 1st Lien Term Loan, 5.14%, 3/1/25, resets monthly off the 1-month LIBOR plus 3.25% | $ | 38,437 | 38,551 | ||||
PSAV Holdings LLC, 2018 1st Lien Term Loan, 5.26%, 3/1/25, resets quarterly off the 3-month LIBOR plus 3.25% | 46,508 | 46,647 | |||||
Unitymedia Finance LLC, Term Loan B, 4.15%, 9/30/25, resets monthly off the 1-month LIBOR plus 2.25% | 189,923 | 189,912 | |||||
Unitymedia Hessen GmbH & Co. KG, EUR Term Loan C, 2.75%, 1/15/27, resets semi-annually off the 6-month Euribor plus 2.75% | EUR | 98,508 | 119,342 | ||||
Virgin Media Bristol LLC, 2017 USD Term Loan, 4.40%, 1/15/26, resets monthly off the 1-month LIBOR plus 2.50% | $ | 193,885 | 194,996 | ||||
Ziggo Secured Finance BV, EUR Term Loan F, 3.00%, 4/15/25, resets semi-annually off the 6-month Euribor plus 3.00% | EUR | 370,632 | 448,005 | ||||
2,950,831 | |||||||
Metals and Mining — 0.4% | |||||||
TurboCombustor Technology, Inc, New Term Loan B, 6.80%, 12/2/20, resets quarterly off the 3-month LIBOR plus 4.50% | $ | 299,452 | 291,591 | ||||
WireCo WorldGroup, Inc., 1st Lien Term Loan, 7.48%, 9/30/23, resets quarterly off the 3-month LIBOR plus 5.50% | 756,018 | 763,344 | |||||
1,054,935 | |||||||
Oil, Gas and Consumable Fuels — 0.2% | |||||||
Talos Production LLC, 2nd Lien Bridge Term Loan, 11.00%, 4/3/22 | 500,000 | 482,500 | |||||
Ultra Resources, Inc., 1st Lien Term Loan, 4/12/24(7) | 119,165 | 111,978 | |||||
594,478 |
14
Principal Amount/ Shares | Value | ||||||
Personal Products — 0.2% | |||||||
KIK Custom Products, Inc., 2015 Term Loan B, 5.88%, 5/15/23, resets weekly off the 1-week LIBOR plus 4.00% | $ | 91,710 | $ | 92,806 | |||
KIK Custom Products, Inc., 2015 Term Loan B, 5.88%, 5/15/23, resets weekly off the 1-week LIBOR plus 4.00% | 163,419 | 165,373 | |||||
KIK Custom Products, Inc., 2015 Term Loan B, 5.88%, 5/15/23, resets weekly off the 1-week LIBOR plus 4.00% | 113,715 | 115,075 | |||||
373,254 | |||||||
Pharmaceuticals — 0.4% | |||||||
Packaging Coordinators Midco, Inc., 1st Lien Term Loan, 6.06%, 6/30/23, resets bi-monthly off the 2-month LIBOR plus 4.00% | 432,338 | 436,662 | |||||
U.S. Anesthesia Partners, Inc., 2017 Term Loan, 4.90%, 6/23/24, resets monthly off the 1-month LIBOR plus 3.00% | 663,285 | 667,500 | |||||
1,104,162 | |||||||
Real Estate Management and Development† | |||||||
Capital Automotive L.P., 2017 2nd Lien Term Loan, 7.91%, 3/24/25, resets monthly off the 1-month LIBOR plus 6.00% | 46,559 | 47,257 | |||||
Retail — 0.1% | |||||||
IRB Holding Corp., 1st Lien Term Loan, 5.13%, 2/5/25, resets monthly off the 1-month LIBOR plus 3.25% | 71,748 | 72,634 | |||||
IRB Holding Corp., 1st Lien Term Loan, 5.25%, 2/5/25, resets bi-monthly off the 2-month LIBOR plus 3.25% | 89,686 | 90,793 | |||||
163,427 | |||||||
Software — 2.1% | |||||||
Autodata, Inc., 1st Lien Term Loan, 5.15%, 12/13/24, resets monthly off the 1-month LIBOR plus 3.25% | 112,813 | 113,518 | |||||
DigiCert, Inc., 2017 Term Loan B1, 6.65%, 10/31/24, resets monthly off the 1-month LIBOR plus 4.75% | 135,004 | 135,616 | |||||
Epicor Software Corporation, 1st Lien Term Loan, 5.16%, 6/1/22, resets monthly off the 1-month LIBOR plus 3.25% | 260,191 | 261,938 | |||||
Eze Castle Software Inc., 2017 1st Lien Term Loan, 4.90%, 4/6/20, resets monthly off the 1-month LIBOR plus 3.00% | 310,607 | 313,002 | |||||
Eze Castle Software Inc., 2017 1st Lien Term Loan, 5.30%, 4/6/20, resets quarterly off the 3-month LIBOR plus 3.00% | 186,800 | 188,240 | |||||
Intralinks, Inc., 1st Lien Term Loan, 5.91%, 11/11/24, resets monthly off the 1-month LIBOR plus 4.00% | 175,699 | 177,163 | |||||
Kronos Incorporated, 2017 Term Loan B, 4.88%, 11/1/23, resets quarterly off the 3-month LIBOR plus 3.00% | 500,000 | 504,928 | |||||
Press Ganey Holdings, Inc., 2018 1st Lien Term Loan, 4.65%, 10/21/23, resets monthly off the 1-month LIBOR plus 2.75% | 407,315 | 410,573 | |||||
Project Alpha Intermediate Holding, Inc., 2017 Term Loan B, 5.99%, 4/26/24, resets semi-annually off the 6-month LIBOR plus 3.50% | 275,047 | 274,817 | |||||
Quest Software US Holdings Inc., 2017 Term Loan B, 7.86%, 10/31/22, resets quarterly off the 3-month LIBOR plus 5.50% | 54,598 | 55,024 | |||||
Quest Software US Holdings Inc., 2017 Term Loan B, 7.86%, 10/31/22, resets quarterly off the 3-month LIBOR plus 5.50% | 146,400 | 147,544 | |||||
Quest Software US Holdings Inc., 2017 Term Loan B, 7.86%, 10/31/22, resets quarterly off the 3-month LIBOR plus 5.50% | 131,088 | 132,112 | |||||
Quest Software US Holdings Inc., 2017 Term Loan B, 7.86%, 10/31/22, resets quarterly off the 3-month LIBOR plus 5.50% | 47,372 | 47,742 |
15
Principal Amount/ Shares | Value | ||||||
Quest Software US Holdings Inc., 2017 Term Loan B, 7.86%, 10/31/22, resets quarterly off the 3-month LIBOR plus 5.50% | $ | 39,800 | $ | 40,111 | |||
RP Crown Parent, LLC, 2018 Repriced Term Loan B, 5.11%, 10/12/23, resets quarterly off the 3-month LIBOR plus 2.75% | 370,931 | 374,060 | |||||
Salient CRGT, Inc., 2017 Term Loan, 7.65%, 2/25/22, resets monthly off the 1-month LIBOR plus 5.75% | 107,629 | 109,244 | |||||
SolarWinds Holdings, Inc., 2018 Term Loan B, 4.90%, 2/5/24, resets monthly off the 1-month LIBOR plus 3.00% | 597,321 | 601,675 | |||||
Sophia, L.P., 2017 Term Loan B, 5.55%, 9/30/22, resets quarterly off the 3-month LIBOR plus 3.25% | 743,415 | 747,783 | |||||
STG-Fairway Acquisitions, Inc., 2015 1st Lien Term Loan, 7.15%, 6/30/22, resets quarterly off the 3-month LIBOR plus 5.25% | 460,340 | 460,342 | |||||
Weld North Education, LLC, Term Loan B, 6.09%, 2/7/25, resets quarterly off the 3-month LIBOR plus 4.25% | 108,288 | 109,032 | |||||
5,204,464 | |||||||
Specialty Retail — 0.2% | |||||||
Harbor Freight Tools USA, Inc., 2018 Term Loan B, 4.40%, 8/18/23, resets monthly off the 1-month LIBOR plus 2.50% | 342,196 | 344,121 | |||||
Petco Animal Supplies, Inc., 2017 Term Loan B, 5.61%, 1/26/23, resets quarterly off the 3-month LIBOR plus 3.25% | 45,707 | 31,506 | |||||
375,627 | |||||||
Technology Hardware, Storage and Peripherals — 0.3% | |||||||
Dell Inc., 2017 Term Loan A2, 3.66%, 9/7/21, resets monthly off the 1-month LIBOR plus 1.75% | 95,032 | 95,261 | |||||
Optiv Security, Inc., 1st Lien Term Loan, 5.125%, 2/1/24, resets monthly off the 1-month LIBOR plus 3.25% | 143,032 | 138,920 | |||||
Tempo Acquisition LLC, Term Loan, 4.90%, 5/1/24, resets monthly off the 1-month LIBOR plus 3.00% | 537,784 | 541,538 | |||||
775,719 | |||||||
Textiles, Apparel and Luxury Goods — 0.1% | |||||||
Ascena Retail Group, Inc., 2015 Term Loan B, 6.44%, 8/21/22, resets monthly off the 1-month LIBOR plus 4.50% | 318,420 | 278,458 | |||||
Transportation and Logistics — 0.1% | |||||||
Silk Bidco AS, EUR Term Loan B, 4.00%, 2/7/25, resets semi-annually off the 6-month Euribor plus 4.00% | EUR | 96,125 | 116,453 | ||||
Transportation Infrastructure — 0.1% | |||||||
Commercial Barge Line Company, 2015 1st Lien Term Loan, 11/12/20(7) | $ | 415,423 | 243,725 | ||||
Utilities — 0.2% | |||||||
Gamma Infrastructure III B.V., EUR 1st Lien Term Loan B, 3.50%, 12/28/24, resets quarterly off the 3-month Euribor plus 3.50% | EUR | 163,587 | 198,454 | ||||
Research Now Group, Inc., 2017 1st Lien Term Loan, 7.86%, 12/20/24, resets quarterly off the 3-month LIBOR plus 5.50% | $ | 294,808 | 289,280 | ||||
487,734 | |||||||
Wireless Telecommunication Services — 0.4% | |||||||
Sprint Communications, Inc., 1st Lien Term Loan B, 4.44%, 2/2/24, resets monthly off the 1-month LIBOR plus 2.50% | 268,093 | 269,224 | |||||
WP CPP Holdings, LLC, 2018 Term Loan, 4/24/25(7) | 206,601 | 207,892 |
16
Principal Amount/ Shares | Value | ||||||
WP CPP Holdings, LLC, Term Loan B3, 5.27%, 12/28/19, resets monthly off the 1-month LIBOR plus 3.50% | $ | 497,375 | $ | 501,571 | |||
978,687 | |||||||
TOTAL BANK LOAN OBLIGATIONS (Cost $37,023,656) | 37,115,157 | ||||||
COMMON STOCKS — 14.2% | |||||||
Aerospace and Defense — 0.2% | |||||||
United Technologies Corp. | 3,590 | 431,338 | |||||
Automobiles — 0.4% | |||||||
General Motors Co. | 28,040 | 1,030,190 | |||||
Biotechnology — 0.4% | |||||||
AbbVie, Inc. | 3,450 | 333,097 | |||||
Amgen, Inc. | 1,920 | 335,002 | |||||
Gilead Sciences, Inc. | 4,620 | 333,703 | |||||
1,001,802 | |||||||
Chemicals — 0.4% | |||||||
RPM International, Inc. | 21,090 | 1,018,647 | |||||
Commercial Services and Supplies — 0.1% | |||||||
KAR Auction Services, Inc. | 6,250 | 324,937 | |||||
Communications Equipment — 0.4% | |||||||
Cisco Systems, Inc. | 23,400 | 1,036,386 | |||||
Consumer Discretionary† | |||||||
CHC Group LLC (Ordinary Membership Interest)(8) | 1,954 | 14,166 | |||||
Containers and Packaging — 0.5% | |||||||
Packaging Corp. of America | 2,910 | 336,658 | |||||
Sonoco Products Co. | 19,650 | 1,009,224 | |||||
1,345,882 | |||||||
Distributors — 0.4% | |||||||
Genuine Parts Co. | 11,400 | 1,006,848 | |||||
Electric Utilities — 0.4% | |||||||
Alliant Energy Corp. | 23,040 | 989,568 | |||||
Electrical Equipment — 0.4% | |||||||
Hubbell, Inc. | 9,630 | 1,000,172 | |||||
Equity Real Estate Investment Trusts (REITs) — 4.2% | |||||||
AIMS AMP Capital Industrial REIT | 373,169 | 399,107 | |||||
Automotive Properties Real Estate Investment Trust | 27,418 | 224,221 | |||||
CapitaLand Retail China Trust | 405,300 | 478,321 | |||||
Centuria Industrial REIT | 81,431 | 153,835 | |||||
Charter Hall Retail REIT | 115,101 | 341,851 | |||||
Chesapeake Lodging Trust | 9,733 | 287,513 | |||||
Colony NorthStar, Inc., Class A | 63,588 | 388,523 | |||||
DDR Corp. | 42,720 | 309,720 | |||||
Dream Global Real Estate Investment Trust | 20,914 | 222,994 | |||||
Dream Industrial Real Estate Investment Trust | 31,939 | 250,497 | |||||
Folkestone Education Trust | 98,401 | 211,494 | |||||
Fortune Real Estate Investment Trust | 480,000 | 568,370 | |||||
Frasers Logistics & Industrial Trust | 358,100 | 283,858 |
17
Principal Amount/ Shares | Value | ||||||
HCP, Inc. | 13,200 | $ | 308,352 | ||||
Intervest Offices & Warehouses NV | 13,720 | 393,774 | |||||
Invesco Office J-Reit, Inc. | 3,277 | 416,992 | |||||
Kimco Realty Corp. | 23,685 | 343,669 | |||||
Kite Realty Group Trust | 31,867 | 469,082 | |||||
Kiwi Property Group Ltd. | 403,242 | 388,061 | |||||
Mercialys SA | 13,025 | 249,092 | |||||
MGM Growth Properties LLC, Class A | 11,800 | 330,046 | |||||
NSI NV | 6,186 | 265,745 | |||||
Park Hotels & Resorts, Inc. | 16,857 | 485,144 | |||||
Sabra Health Care REIT, Inc. | 29,747 | 544,668 | |||||
Slate Retail REIT | 34,849 | 335,475 | |||||
STAG Industrial, Inc. | 15,129 | 371,720 | |||||
Star Asia Investment Corp. | 391 | 376,065 | |||||
Sunlight Real Estate Investment Trust | 624,500 | 423,090 | |||||
Vicinity Centres | 212,325 | 389,335 | |||||
Wereldhave NV | 11,300 | 452,703 | |||||
10,663,317 | |||||||
Food and Staples Retailing — 0.1% | |||||||
Sysco Corp. | 5,340 | 333,964 | |||||
Food Products — 0.5% | |||||||
Hershey Co. (The) | 10,520 | 967,209 | |||||
Pinnacle Foods, Inc. | 5,690 | 343,676 | |||||
1,310,885 | |||||||
Gas Utilities — 0.5% | |||||||
New Jersey Resources Corp. | 23,970 | 991,159 | |||||
UGI Corp. | 6,850 | 331,472 | |||||
1,322,631 | |||||||
Health Care Equipment and Supplies — 0.1% | |||||||
Medtronic plc | 4,140 | 331,738 | |||||
Health Care Providers and Services — 0.2% | |||||||
Cardinal Health, Inc. | 5,370 | 344,593 | |||||
Hotels, Restaurants and Leisure — 0.3% | |||||||
Carnival Corp. | 11,930 | 752,306 | |||||
Household Durables — 0.5% | |||||||
Garmin Ltd. | 17,060 | 1,000,910 | |||||
Whirlpool Corp. | 2,090 | 323,846 | |||||
1,324,756 | |||||||
Industrial Conglomerates — 0.1% | |||||||
Toshiba Corp.(8) | 126,137 | 337,370 | |||||
Machinery — 0.3% | |||||||
Cummins, Inc. | 2,060 | 329,312 | |||||
PACCAR, Inc. | 5,350 | 340,634 | |||||
669,946 | |||||||
Mortgage Real Estate Investment Trusts (REITs) — 0.8% | |||||||
Apollo Commercial Real Estate Finance, Inc. | 15,400 | 277,508 | |||||
Granite Point Mortgage Trust, Inc. | 24,667 | 410,459 |
18
Principal Amount/ Shares | Value | ||||||
MFA Financial, Inc. | 37,600 | $ | 282,752 | ||||
Starwood Property Trust, Inc. | 22,191 | 465,123 | |||||
TPG RE Finance Trust, Inc. | 21,149 | 418,539 | |||||
1,854,381 | |||||||
Multi-Utilities — 0.8% | |||||||
DTE Energy Co. | 9,260 | 976,004 | |||||
Public Service Enterprise Group, Inc. | 18,870 | 984,070 | |||||
1,960,074 | |||||||
Oil, Gas and Consumable Fuels — 0.9% | |||||||
Phillips 66 | 9,400 | 1,046,314 | |||||
Valero Energy Corp. | 9,590 | 1,063,819 | |||||
2,110,133 | |||||||
Pharmaceuticals — 0.5% | |||||||
Eli Lilly & Co. | 4,100 | 332,387 | |||||
Johnson & Johnson | 7,860 | 994,211 | |||||
1,326,598 | |||||||
Real Estate Investment Trusts (REITs) — 0.1% | |||||||
New South Resources Ltd. | 249,410 | 300,048 | |||||
Real Estate Management and Development — 0.1% | |||||||
VICI Properties, Inc. | 14,967 | 272,100 | |||||
Semiconductors and Semiconductor Equipment — 0.3% | |||||||
Broadcom, Inc. | 1,440 | 330,365 | |||||
Texas Instruments, Inc. | 3,260 | 330,662 | |||||
661,027 | |||||||
Specialty Retail — 0.1% | |||||||
Penske Automotive Group, Inc. | 7,310 | 329,681 | |||||
Technology Hardware, Storage and Peripherals — 0.1% | |||||||
HP, Inc. | 15,770 | 338,897 | |||||
Trading Companies and Distributors — 0.1% | |||||||
Aircastle Ltd. | 6,330 | 124,068 | |||||
TOTAL COMMON STOCKS (Cost $36,272,456) | 35,868,449 | ||||||
CORPORATE BONDS — 12.7% | |||||||
Aerospace and Defense — 0.2% | |||||||
BBA US Holdings, Inc., 5.375%, 5/1/26(2) | $ | 49,000 | 49,396 | ||||
Pioneer Holdings LLC / Pioneer Finance Corp., 9.00%, 11/1/22(2) | 327,000 | 337,627 | |||||
387,023 | |||||||
Air Freight and Logistics — 0.3% | |||||||
XPO Logistics, Inc., 6.50%, 6/15/22(2) | 750,000 | 777,187 | |||||
Airlines — 0.4% | |||||||
Intrepid Aviation Group Holdings LLC / Intrepid Finance Co., 6.875%, 2/15/19(2) | 445,000 | 440,550 | |||||
United Continental Holdings, Inc., 5.00%, 2/1/24 | 522,000 | 520,695 | |||||
961,245 | |||||||
Auto Components — 0.1% | |||||||
Allison Transmission, Inc., 5.00%, 10/1/24(2) | 156,000 | 153,613 |
19
Principal Amount/ Shares | Value | ||||||
Automobiles — 0.1% | |||||||
Tesla, Inc., 5.30%, 8/15/25(2) | $ | 344,000 | $ | 305,730 | |||
Commercial Services and Supplies — 0.8% | |||||||
APTIM Corp., 7.75%, 6/15/25(2) | 388,000 | 340,470 | |||||
Iron Mountain, Inc., 5.25%, 3/15/28(2) | 240,000 | 227,100 | |||||
KAR Auction Services, Inc., 5.125%, 6/1/25(2) | 440,000 | 427,900 | |||||
Live Nation Entertainment, Inc., 4.875%, 11/1/24(2) | 350,000 | 343,437 | |||||
Midas Intermediate Holdco II LLC / Midas Intermediate Holdco II Finance, Inc., 7.875%, 10/1/22(2) | 170,000 | 169,575 | |||||
Prime Security Services Borrower LLC / Prime Finance, Inc., 9.25%, 5/15/23(2) | 318,000 | 342,248 | |||||
Ritchie Bros Auctioneers, Inc., 5.375%, 1/15/25(2) | 114,000 | 113,715 | |||||
ServiceMaster Co. LLC (The), 5.125%, 11/15/24(2) | 120,000 | 117,180 | |||||
2,081,625 | |||||||
Communications Equipment — 0.5% | |||||||
CB Escrow Corp., 8.00%, 10/15/25(2) | 179,000 | 170,945 | |||||
ViaSat, Inc., 5.625%, 9/15/25(2) | 212,000 | 203,520 | |||||
Zayo Group LLC / Zayo Capital, Inc., 6.00%, 4/1/23 | 272,000 | 281,167 | |||||
Zayo Group LLC / Zayo Capital, Inc., 6.375%, 5/15/25 | 573,000 | 595,318 | |||||
Zayo Group LLC / Zayo Capital, Inc., 5.75%, 1/15/27(2) | 32,000 | 31,840 | |||||
1,282,790 | |||||||
Construction and Engineering — 0.4% | |||||||
AECOM, 5.125%, 3/15/27 | 760,000 | 732,222 | |||||
New Enterprise Stone & Lime Co., Inc., 6.25%, 3/15/26(2) | 212,000 | 215,180 | |||||
SBA Communications Corp., 4.875%, 7/15/22 | 126,000 | 126,630 | |||||
1,074,032 | |||||||
Construction Materials — 0.5% | |||||||
American Woodmark Corp., 4.875%, 3/15/26(2) | 169,000 | 163,507 | |||||
CPG Merger Sub LLC, 8.00%, 10/1/21(2) | 518,000 | 533,540 | |||||
Summit Materials LLC / Summit Materials Finance Corp., 5.125%, 6/1/25(2) | 556,000 | 540,710 | |||||
1,237,757 | |||||||
Consumer Finance — 0.1% | |||||||
Park Aerospace Holdings Ltd., 5.25%, 8/15/22(2) | 102,000 | 101,745 | |||||
Park Aerospace Holdings Ltd., 5.50%, 2/15/24(2) | 69,000 | 67,189 | |||||
168,934 | |||||||
Consumer Staples — 0.4% | |||||||
Kronos Acquisition Holdings, Inc., 9.00%, 8/15/23(2) | 323,000 | 309,273 | |||||
Sabre GLBL, Inc., 5.375%, 4/15/23(2) | 292,000 | 296,292 | |||||
Sabre GLBL, Inc., 5.25%, 11/15/23(2) | 303,000 | 307,166 | |||||
912,731 | |||||||
Containers and Packaging — 1.0% | |||||||
Ardagh Packaging Finance plc / Ardagh Holdings USA, Inc., 6.00%, 2/15/25(2) | 750,000 | 760,312 | |||||
Ball Corp., 4.875%, 3/15/26 | 166,000 | 166,000 | |||||
Berry Global, Inc., 5.125%, 7/15/23 | 100,000 | 101,000 | |||||
Berry Global, Inc., 4.50%, 2/15/26(2) | 279,000 | 267,143 | |||||
BWAY Holding Co., 7.25%, 4/15/25(2) | 395,000 | 406,732 |
20
Principal Amount/ Shares | Value | ||||||
Multi-Color Corp., 4.875%, 11/1/25(2) | $ | 450,000 | $ | 420,750 | |||
Silgan Holdings, Inc., 3.25%, 3/15/25 | EUR | 105,000 | 129,923 | ||||
W/S Packaging Holdings, Inc., 9.00%, 4/15/23(2) | $ | 250,000 | 256,250 | ||||
2,508,110 | |||||||
Diversified Consumer Services† | |||||||
Service Corp. International, 4.625%, 12/15/27 | 86,000 | 84,306 | |||||
Diversified Financial Services — 0.2% | |||||||
Intrum Justitia AB, 3.125%, 7/15/24(2) | EUR | 195,000 | 232,225 | ||||
Travelport Corporate Finance plc, 6.00%, 3/15/26(2) | $ | 277,000 | 283,925 | ||||
516,150 | |||||||
Diversified Telecommunication Services — 0.5% | |||||||
Intelsat Jackson Holdings SA, 9.50%, 9/30/22(2) | 462,000 | 530,145 | |||||
Iridium Communications, Inc., 10.25%, 4/15/23(2) | 84,000 | 87,780 | |||||
Level 3 Financing, Inc., 5.625%, 2/1/23 | 600,000 | 609,000 | |||||
1,226,925 | |||||||
Electronic Equipment, Instruments and Components — 0.1% | |||||||
WESCO Distribution, Inc., 5.375%, 6/15/24 | 263,000 | 266,616 | |||||
Energy Equipment and Services† | |||||||
Nabors Industries, Inc., 5.75%, 2/1/25(2) | 106,000 | 100,568 | |||||
Equity Real Estate Investment Trusts (REITs) — 0.1% | |||||||
MGM Growth Properties Operating Partnership LP / MGP Finance Co-Issuer, Inc., 4.50%, 9/1/26 | 66,000 | 62,641 | |||||
SBA Communications Corp., 4.875%, 9/1/24 | 212,000 | 204,315 | |||||
266,956 | |||||||
Food Products — 0.4% | |||||||
Lamb Weston Holdings, Inc., 4.625%, 11/1/24(2) | 99,000 | 98,629 | |||||
Lamb Weston Holdings, Inc., 4.875%, 11/1/26(2) | 156,000 | 155,025 | |||||
Pinnacle Foods Finance LLC / Pinnacle Foods Finance Corp., 4.875%, 5/1/21 | 400,000 | 402,500 | |||||
Post Holdings, Inc., 5.00%, 8/15/26(2) | 485,000 | 455,900 | |||||
1,112,054 | |||||||
Health Care Equipment and Supplies — 0.2% | |||||||
MEDNAX, Inc., 5.25%, 12/1/23(2) | 492,000 | 489,540 | |||||
Health Care Providers and Services — 0.4% | |||||||
Acadia Healthcare Co., Inc., 5.625%, 2/15/23 | 159,000 | 161,433 | |||||
HCA, Inc., 5.375%, 2/1/25 | 644,000 | 642,390 | |||||
HCA, Inc., 4.50%, 2/15/27 | 175,000 | 167,562 | |||||
971,385 | |||||||
Hotels, Restaurants and Leisure — 0.7% | |||||||
1011778 BC ULC / New Red Finance, Inc., 5.00%, 10/15/25(2) | 228,000 | 220,519 | |||||
Aramark Services, Inc., 5.00%, 2/1/28(2) | 139,000 | 135,582 | |||||
Hilton Domestic Operating Co., Inc., 5.125%, 5/1/26(2) | 313,000 | 314,565 | |||||
IRB Holding Corp., 6.75%, 2/15/26(2) | 183,000 | 177,053 | |||||
KFC Holding Co. / Pizza Hut Holdings LLC / Taco Bell of America LLC, 5.00%, 6/1/24(2) | 20,000 | 19,975 | |||||
KFC Holding Co. / Pizza Hut Holdings LLC / Taco Bell of America LLC, 5.25%, 6/1/26(2) | 347,000 | 349,603 | |||||
Scientific Games International, Inc., 5.00%, 10/15/25(2) | 61,000 | 59,075 |
21
Principal Amount/ Shares | Value | ||||||
Scientific Games International, Inc., 3.375%, 2/15/26(2) | EUR | 111,000 | $ | 130,372 | |||
Six Flags Entertainment Corp., 4.875%, 7/31/24(2) | $ | 384,000 | 375,360 | ||||
1,782,104 | |||||||
Industrial† | |||||||
Pisces Midco, Inc., 8.00%, 4/15/26(2) | 100,000 | 100,530 | |||||
Industrial Conglomerates — 0.3% | |||||||
Core & Main LP, 6.125%, 8/15/25(2) | 219,000 | 215,715 | |||||
Gates Global LLC / Gates Global Co., 6.00%, 7/15/22(2) | 406,000 | 411,116 | |||||
RBS Global, Inc. / Rexnord LLC, 4.875%, 12/15/25(2) | 194,000 | 187,695 | |||||
814,526 | |||||||
Insurance — 0.1% | |||||||
Genworth Holdings, Inc., 4.90%, 8/15/23 | 239,000 | 191,200 | |||||
Genworth Holdings, Inc., 4.80%, 2/15/24 | 67,000 | 53,265 | |||||
244,465 | |||||||
Internet Software and Services — 0.2% | |||||||
Netflix, Inc., 5.875%, 11/15/28(2) | 407,000 | 408,017 | |||||
Leisure Products — 0.1% | |||||||
Mattel, Inc., 6.75%, 12/31/25(2) | 250,000 | 244,025 | |||||
Machinery — 0.3% | |||||||
SPX FLOW, Inc., 5.875%, 8/15/26(2) | 138,000 | 141,450 | |||||
Titan Acquisition Ltd. / Titan Co-Borrower LLC, 7.75%, 4/15/26(2) | 469,000 | 468,414 | |||||
TriMas Corp., 4.875%, 10/15/25(2) | 156,000 | 150,442 | |||||
Welbilt, Inc., 9.50%, 2/15/24 | 40,000 | 44,600 | |||||
804,906 | |||||||
Media — 1.5% | |||||||
CBS Radio, Inc., 7.25%, 11/1/24(2) | 269,000 | 274,380 | |||||
CCO Holdings LLC / CCO Holdings Capital Corp., 5.75%, 1/15/24 | 387,000 | 391,605 | |||||
CCO Holdings LLC / CCO Holdings Capital Corp., 5.75%, 2/15/26(2) | 476,000 | 473,620 | |||||
CCO Holdings LLC / CCO Holdings Capital Corp., 5.125%, 5/1/27(2) | 111,000 | 104,281 | |||||
CCO Holdings LLC / CCO Holdings Capital Corp., 5.00%, 2/1/28(2) | 119,000 | 110,477 | |||||
Cequel Communications Holdings I LLC / Cequel Capital Corp., 7.50%, 4/1/28(2) | 332,000 | 338,225 | |||||
CSC Holdings LLC, 5.375%, 2/1/28(2) | 287,000 | 269,063 | |||||
GTT Communications, Inc., 7.875%, 12/31/24(2) | 480,000 | 492,000 | |||||
Lamar Media Corp., 5.75%, 2/1/26 | 381,000 | 394,097 | |||||
National CineMedia LLC, 5.75%, 8/15/26 | 390,000 | 358,800 | |||||
Sirius XM Radio, Inc., 5.00%, 8/1/27(2) | 219,000 | 209,829 | |||||
Unison Ground Lease Funding LLC, 6.27%, 3/15/43(2) | 171,000 | 170,192 | |||||
WMG Acquisition Corp., 5.50%, 4/15/26(2) | 219,000 | 220,643 | |||||
3,807,212 | |||||||
Metals and Mining — 0.1% | |||||||
Compass Minerals International, Inc., 4.875%, 7/15/24(2) | 198,000 | 191,565 | |||||
Multiline Retail† | |||||||
JC Penney Corp., Inc., 8.625%, 3/15/25(2) | 43,000 | 39,963 |
22
Principal Amount/ Shares | Value | ||||||
Oil, Gas and Consumable Fuels — 1.2% | |||||||
Extraction Oil & Gas, Inc., 5.625%, 2/1/26(2) | $ | 279,000 | $ | 270,979 | |||
Gulfport Energy Corp., 6.00%, 10/15/24 | 445,000 | 424,975 | |||||
Murray Energy Corp., 11.25%, 4/15/21(2) | 255,000 | 112,200 | |||||
Parsley Energy LLC / Parsley Finance Corp., 5.375%, 1/15/25(2) | 309,000 | 311,317 | |||||
Parsley Energy LLC / Parsley Finance Corp., 5.625%, 10/15/27(2) | 125,000 | 126,875 | |||||
Range Resources Corp., 5.00%, 3/15/23 | 415,000 | 401,305 | |||||
Resolute Energy Corp., 8.50%, 5/1/20 | 11,000 | 11,028 | |||||
Resolute Energy Corp., 8.50%, 5/1/20(2) | 91,000 | 91,228 | |||||
SM Energy Co., 5.00%, 1/15/24 | 84,000 | 80,430 | |||||
SM Energy Co., 5.625%, 6/1/25 | 344,000 | 335,400 | |||||
SRC Energy, Inc., 6.25%, 12/1/25(2) | 421,000 | 427,315 | |||||
Ultra Resources, Inc., 7.125%, 4/15/25(2) | 125,000 | 83,984 | |||||
WildHorse Resource Development Corp., 6.875%, 2/1/25 | 250,000 | 255,000 | |||||
WildHorse Resource Development Corp., 6.875%, 2/1/25(2) | 202,000 | 206,040 | |||||
3,138,076 | |||||||
Pharmaceuticals — 0.1% | |||||||
Charles River Laboratories International, Inc., 5.50%, 4/1/26(2) | 133,000 | 135,620 | |||||
Software — 0.2% | |||||||
CDK Global, Inc., 4.875%, 6/1/27 | 256,000 | 247,040 | |||||
Sophia LP / Sophia Finance, Inc., 9.00%, 9/30/23(2) | 194,000 | 205,155 | |||||
452,195 | |||||||
Specialty Retail — 0.5% | |||||||
Ashtead Capital, Inc., 4.125%, 8/15/25(2) | 215,000 | 204,519 | |||||
Beacon Roofing Supply, Inc., 4.875%, 11/1/25(2) | 219,000 | 208,050 | |||||
Sally Holdings LLC / Sally Capital, Inc., 5.625%, 12/1/25 | 377,000 | 370,402 | |||||
United Rentals North America, Inc., 5.875%, 9/15/26 | 77,000 | 80,561 | |||||
United Rentals North America, Inc., 5.50%, 5/15/27 | 296,000 | 296,000 | |||||
1,159,532 | |||||||
Technology Hardware, Storage and Peripherals† | |||||||
Dell International LLC / EMC Corp., 6.02%, 6/15/26(2) | 105,000 | 111,376 | |||||
Textiles, Apparel and Luxury Goods — 0.1% | |||||||
PVH Corp., 3.125%, 12/15/27(2) | EUR | 213,000 | 255,266 | ||||
Transportation and Logistics — 0.1% | |||||||
Avolon Holdings Funding Ltd., 5.50%, 1/15/23(2) | $ | 66,000 | 66,000 | ||||
Wabash National Corp., 5.50%, 10/1/25(2) | 135,000 | 131,963 | |||||
197,963 | |||||||
Wireless Telecommunication Services — 0.5% | |||||||
Sprint Corp., 7.875%, 9/15/23 | 365,000 | 392,375 | |||||
T-Mobile USA, Inc., 6.00%, 4/15/24 | 150,000 | 157,455 | |||||
T-Mobile USA, Inc., 6.375%, 3/1/25 | 262,000 | 275,755 | |||||
T-Mobile USA, Inc., 6.50%, 1/15/26 | 398,000 | 423,870 | |||||
1,249,455 | |||||||
TOTAL CORPORATE BONDS (Cost $32,594,499) | 32,022,073 |
23
Principal Amount/ Shares | Value | ||||||
COLLATERALIZED LOAN OBLIGATIONS(1) — 10.5% | |||||||
AMMC CLO XII Ltd., Series 2013-12A, Class ER, VRN, 7.99%, 5/10/18, resets quarterly off the 3-month LIBOR plus 6.18%(2) | $ | 1,000,000 | $ | 1,006,271 | |||
Ares XLI Clo Ltd., Series 2016-41A, Class D, VRN, 6.55%, 7/16/18, resets quarterly off the 3-month LIBOR plus 4.20%(2) | 1,000,000 | 1,015,664 | |||||
Ares XXXVII CLO Ltd., Series 2015-4A, Class CR, VRN, 5.00%, 7/16/18, resets quarterly off the 3-month LIBOR plus 2.65%(2) | 750,000 | 750,070 | |||||
Atrium XII, Series 12A, Class DR, VRN, 5.16%, 7/23/18, resets quarterly off the 3-month LIBOR plus 2.80%(2) | 1,000,000 | 1,002,696 | |||||
Bluemountain CLO Ltd., Series 2016-3A, Class C, VRN, 4.24%, 5/15/18, resets quarterly off the 3-month LIBOR plus 2.40% | 800,000 | 803,989 | |||||
Carlyle Global Market Strategies CLO Ltd., Series 2014-1A, Class DR, VRN, 4.94%, 7/17/18, resets quarterly off the 3-month LIBOR plus 2.60%(2) | 1,000,000 | 1,003,312 | |||||
CIFC Funding Ltd., Series 2016-1A, Class D, VRN, 6.36%, 7/23/18, resets quarterly off the 3-month LIBOR plus 4.00%(2) | 1,000,000 | 1,013,967 | |||||
Covenant Credit Partners CLO II Ltd., Series 2014-2A, Class D, VRN, 6.00%, 7/17/18, resets quarterly off the 3-month LIBOR plus 3.65%(2) | 1,000,000 | 1,004,106 | |||||
Garrison Funding Ltd., Series 2015-1A, Class CR, VRN, 5.84%, 5/25/18, resets quarterly off the 3-month LIBOR plus 3.90%(2) | 1,000,000 | 1,007,188 | |||||
Jamestown CLO IV Ltd., Series 2014-4A, Class CR, VRN, 5.00%, 7/16/18, resets quarterly off the 3-month LIBOR plus 2.65%(2) | 1,000,000 | 1,001,283 | |||||
JMP Credit Advisors CLO IIIR Ltd., Series 2014-1RA, Class D, VRN, 4.32%, 7/17/18, resets quarterly off the 3-month LIBOR plus 2.60%(2) | 1,000,000 | 1,000,668 | |||||
Magnetite XIV Ltd., Series 2015-14X, Class E, VRN, 7.61%, 7/18/18, resets quarterly off the 3-month LIBOR plus 5.25% | 500,000 | 499,109 | |||||
Nelder Grove CLO Ltd., Series 2014-1A, Class D1R, VRN, 6.08%, 5/29/18, resets quarterly off the 3-month LIBOR plus 4.10%(2) | 1,000,000 | 999,853 | |||||
Northwoods Capital XVI Ltd., Series 2017-16A, Class D, VRN, 4.57%, 5/15/18, resets quarterly off the 3-month LIBOR plus 3.15%(2) | 1,000,000 | 1,002,269 | |||||
OHA Credit Partners IX Ltd., Series 2013-9A, Class E, VRN, 7.36%, 7/20/18, resets quarterly off the 3-month LIBOR plus 5.00%(2) | 1,250,000 | 1,255,718 | |||||
OZLM Funding II Ltd., Series 2012-2A, Class CR, VRN, 6.36%, 7/30/18, resets quarterly off the 3-month LIBOR plus 4.00%(2) | 500,000 | 501,939 | |||||
Shackleton CLO, Series 2014-6A, Class D, VRN, 5.95%, 7/17/18, resets quarterly off the 3-month LIBOR plus 3.60%(2) | 750,000 | 753,294 | |||||
Sound Harbor Loan Fund Ltd., Series 2014-1A, Class CR, VRN, 6.26%, 7/30/18, resets quarterly off the 3-month LIBOR plus 3.90%(2) | 1,500,000 | 1,505,597 | |||||
Sound Point CLO Ltd., Series 2014-1A, Class D, VRN, 5.76%, 7/18/18, resets quarterly off the 3-month LIBOR plus 3.40%(2) | 300,000 | 300,959 | |||||
SOUND POINT CLO XVII, Series 2017-3A, Class D, VRN, 8.86%, 7/20/18, resets quarterly off the 3-month LIBOR plus 6.50%(2) | 250,000 | 253,549 |
24
Principal Amount/ Shares | Value | ||||||
TICP CLO II-2 Ltd., Series 2018-IIA, Class C, VRN, 5.45%, 10/22/18, resets quarterly off the 3-month LIBOR plus 2.95%(2) | $ | 1,000,000 | $ | 996,250 | |||
TICP CLO Ltd., Series 2016-6A, Class D, VRN, 6.55%, 7/16/18, resets quarterly off the 3-month LIBOR plus 4.20%(2) | 1,000,000 | 1,011,286 | |||||
TICP CLO X Ltd., Series 2018-10A, Class D, VRN, 5.15%, 10/22/18, resets quarterly off the 3-month LIBOR plus 2.80%(2) | 1,000,000 | 1,002,120 | |||||
Venture XVI CLO Ltd., Series 2014-16A, Class DRR, VRN, 4.86%, 7/16/18, resets quarterly off the 3-month LIBOR plus 2.51%(2) | 1,000,000 | 980,348 | |||||
Venture XVIII CLO Ltd., Series 2014-18A, Class DR, VRN, 5.45%, 7/16/18, resets quarterly off the 3-month LIBOR plus 3.10%(2) | 1,000,000 | 1,000,229 | |||||
Vibrant CLO III Ltd., Series 2015-3A, Class C, VRN, 6.01%, 7/20/18, resets quarterly off the 3-month LIBOR plus 3.65%(2) | 1,250,000 | 1,254,877 | |||||
Voya CLO Ltd., Series 2014-4A, Class D, VRN, 7.85%, 7/16/18, resets quarterly off the 3-month LIBOR plus 5.50%(2) | 1,100,000 | 1,104,009 | |||||
WhiteHorse VII Ltd., Series 2013-1A, Class B1L, VRN, 5.64%, 5/24/18, resets quarterly off the 3-month LIBOR plus 3.70%(2) | 1,500,000 | 1,505,527 | |||||
TOTAL COLLATERALIZED LOAN OBLIGATIONS (Cost $26,322,845) | 26,536,147 | ||||||
COMMERCIAL MORTGAGE-BACKED SECURITIES(1) — 7.4% | |||||||
280 Park Avenue Mortgage Trust, Series 2017-280P, Class F, VRN, 4.72%, 5/15/18, resets monthly off the 1-month LIBOR plus 2.83%(2) | 1,000,000 | 998,706 | |||||
BX Trust, Series 2017-SLCT, Class E, VRN, 5.05%, 5/15/18, resets monthly off the 1-month LIBOR plus 3.15%(2) | 2,000,000 | 2,013,761 | |||||
BX Trust, Series 2017-SLCT, Class F, VRN, 6.15%, 5/15/18, resets monthly off the 1-month LIBOR plus 4.25%(2) | 1,000,000 | 1,009,387 | |||||
CGDB Commercial Mortgage Trust, Series 2017-BIO, Class E, VRN, 4.40%, 5/15/18, resets monthly off the 1-month LIBOR plus 2.50%(2) | 1,000,000 | 1,005,155 | |||||
CHT Mortgage Trust, Series 2017-CSMO, Class F, VRN, 5.64%, 5/15/18, resets monthly off the 1-month LIBOR plus 3.74%(2) | 1,000,000 | 1,010,994 | |||||
Citigroup Commercial Mortgage Trust, Series 2008-C7, Class A1A, VRN, 6.25%, 5/1/18(4) | 32,709 | 32,673 | |||||
GS Mortgage Securities Corp. Trust, Series 2017-500K, Class F, VRN, 3.70%, 5/15/18, resets monthly off the 1-month LIBOR plus 1.80%(2) | 1,000,000 | 1,003,914 | |||||
GS Mortgage Securities Trust, Series 2013-GC12, Class D, VRN, 4.58%, 5/1/18(2)(4) | 1,500,000 | 1,303,779 | |||||
Hyatt Hotel Portfolio Trust, Series 2017-HYT2, Class D, VRN, 3.75%, 5/15/18, resets monthly off the 1-month LIBOR plus 1.85%(2) | 1,000,000 | 1,004,264 | |||||
JPMorgan Chase Commercial Mortgage Securities Trust, Series 2014-BXH, Class E, VRN, 5.65%, 5/15/18, resets monthly off the 1-month LIBOR plus 3.75%(2) | 260,208 | 257,737 | |||||
JPMorgan Chase Commercial Mortgage Securities Trust, Series 2014-CBM, Class E, VRN, 5.75%, 5/15/18, resets monthly off the 1-month LIBOR plus 3.85%(2) | 300,000 | 300,597 |
25
Principal Amount/ Shares | Value | ||||||
JPMorgan Chase Commercial Mortgage Securities Trust, Series 2014-PHH, Class E, VRN, 5.45%, 5/15/18, resets monthly off the 1-month LIBOR plus 3.55%(2) | $ | 1,000,000 | $ | 1,001,673 | |||
JPMorgan Chase Commercial Mortgage Securities Trust, Series 2016-WPT, Class D, VRN, 5.65%, 5/15/18, resets monthly off the 1-month LIBOR plus 3.75%(2) | 1,000,000 | 1,005,788 | |||||
JPMorgan Chase Commercial Mortgage Securities Trust, Series 2018-BCON, Class D, VRN, 3.88%, 5/1/18(2)(4) | 1,000,000 | 981,612 | |||||
Lone Star Portfolio Trust, Series 2015-LSP, Class E, VRN, 7.50%, 5/15/18, resets monthly off the 1-month LIBOR plus 5.60%(2) | 1,194,512 | 1,204,965 | |||||
Morgan Stanley Capital I, Inc., Series 2017-JWDR, Class E, VRN, 4.95%, 5/15/18, resets monthly off the 1-month LIBOR plus 3.05%(2) | 2,500,000 | 2,516,796 | |||||
Palisades Center Trust, Series 2016-PLSD, Class D, 4.74%, 4/13/33(2) | 1,000,000 | 985,726 | |||||
WFRBS Commercial Mortgage Trust, Series 2014-C19, Class D, 4.23%, 3/15/47(2) | 1,000,000 | 864,169 | |||||
TOTAL COMMERCIAL MORTGAGE-BACKED SECURITIES (Cost $18,465,457) | 18,501,696 | ||||||
EXCHANGE-TRADED FUNDS — 6.7% | |||||||
iShares Global Financials ETF | 101,976 | 7,066,937 | |||||
iShares International Select Dividend ETF | 156,118 | 5,309,573 | |||||
iShares Mortgage Real Estate ETF | 60,738 | 2,587,439 | |||||
Utilities Select Sector SPDR Fund | 38,752 | 1,998,053 | |||||
TOTAL EXCHANGE-TRADED FUNDS (Cost $15,011,473) | 16,962,002 | ||||||
EXCHANGE-TRADED NOTES — 5.0% | |||||||
ETRACS Alerian MLP Infrastructure Index ETN | 208,725 | 4,660,829 | |||||
JPMorgan Alerian MLP Index ETN | 300,418 | 7,798,852 | |||||
TOTAL EXCHANGE-TRADED NOTES (Cost $14,181,071) | 12,459,681 | ||||||
PREFERRED STOCKS — 2.2% | |||||||
Equity Real Estate Investment Trusts (REITs) — 2.2% | |||||||
American Homes 4 Rent, 6.50% | 6,144 | 155,689 | |||||
American Homes 4 Rent, 6.35% | 6,048 | 150,111 | |||||
Ashford Hospitality Trust, Inc., 7.375% | 4,101 | 93,421 | |||||
Cedar Realty Trust, Inc., 6.50% | 6,700 | 131,588 | |||||
Colony NorthStar, Inc., 8.50% | 4,136 | 103,772 | |||||
Colony NorthStar, Inc., 8.75% | 6,038 | 153,244 | |||||
Colony NorthStar, Inc., 7.125% | 6,576 | 151,248 | |||||
Colony NorthStar, Inc., 7.125% | 3,124 | 71,914 | |||||
DDR Corp., 6.50% | 6,419 | 143,786 | |||||
DDR Corp., 6.25% | 6,441 | 140,092 | |||||
Digital Realty Trust, Inc., 6.35% | 5,191 | 133,928 | |||||
Digital Realty Trust, Inc., 7.375% | 5,103 | 132,729 | |||||
Digital Realty Trust, Inc., 5.875% | 4,765 | 118,649 | |||||
Digital Realty Trust, Inc., 6.625% | 3,200 | 83,840 | |||||
Digital Realty Trust, Inc., 5.25% | 3,000 | 69,990 | |||||
GGP, Inc., 6.375% | 6,321 | 154,865 | |||||
Gladstone Commercial Corp., 7.00% | 4,493 | 112,325 | |||||
Hersha Hospitality Trust, 6.875% | 4,877 | 117,097 | |||||
Hersha Hospitality Trust, 6.50% | 2,927 | 68,258 |
26
Principal Amount/ Shares | Value | ||||||
Hersha Hospitality Trust, 6.50% | 2,877 | $ | 66,315 | ||||
Kimco Realty Corp., 5.625% | 5,319 | 118,773 | |||||
Kimco Realty Corp., 5.50% | 5,363 | 117,718 | |||||
Kimco Realty Corp., 6.00% | 1,165 | 28,088 | |||||
LaSalle Hotel Properties, 6.375% | 2,900 | 71,166 | |||||
LaSalle Hotel Properties, 6.30% | 6,400 | 155,008 | |||||
Monmouth Real Estate Investment Corp., 6.125% | 6,489 | 155,671 | |||||
National Retail Properties, Inc., 5.70% | 2,955 | 70,447 | |||||
National Retail Properties, Inc., 5.20% | 5,407 | 122,360 | |||||
Pebblebrook Hotel Trust, 6.50% | 6,295 | 154,165 | |||||
Pebblebrook Hotel Trust, 6.375% | 3,200 | 78,928 | |||||
Pennsylvania Real Estate Investment Trust, 7.375% | 4,716 | 102,762 | |||||
Pennsylvania Real Estate Investment Trust, 7.20% | 6,172 | 129,735 | |||||
PS Business Parks, Inc., 5.20% | 6,483 | 145,543 | |||||
PS Business Parks, Inc., 5.70% | 2,900 | 70,615 | |||||
PS Business Parks, Inc., 5.75% | 2,758 | 67,985 | |||||
PS Business Parks, Inc., 5.25% | 5,544 | 127,124 | |||||
Public Storage, 4.90% | 4,798 | 109,442 | |||||
Public Storage, 4.95% | 4,820 | 111,294 | |||||
Public Storage, 5.125% | 2,900 | 71,688 | |||||
Public Storage, 5.40% | 4,599 | 114,055 | |||||
Public Storage, 5.20% | 2,999 | 70,387 | |||||
Rexford Industrial Realty, Inc., 5.875% | 6,501 | 154,139 | |||||
Rexford Industrial Realty, Inc., 5.875% | 4,700 | 109,698 | |||||
Sabra Health Care REIT, Inc., 7.125% | 2,947 | 74,205 | |||||
Sunstone Hotel Investors, Inc., 6.95% | 6,055 | 151,981 | |||||
Taubman Centers, Inc., 6.25% | 4,208 | 100,024 | |||||
VEREIT, Inc., 6.70% | 2,907 | 73,169 | |||||
Vornado Realty Trust, 5.40% | 6,396 | 145,189 | |||||
Vornado Realty Trust, 5.70% | 4,747 | 113,453 | |||||
Washington Prime Group, Inc., 6.875% | 2,530 | 50,094 | |||||
TOTAL PREFERRED STOCKS (Cost $5,929,069) | 5,517,767 | ||||||
COLLATERALIZED MORTGAGE OBLIGATIONS(1) — 2.0% | |||||||
Private Sponsor Collateralized Mortgage Obligation — 0.4% | |||||||
Bear Stearns Asset Backed Securities I Trust, Series 2004-AC6, Class A2, VRN, 2.30%, 5/25/18, resets monthly off the 1-month LIBOR plus 0.40% | $ | 1,115,146 | 981,324 | ||||
U.S. Government Agency Collateralized Mortgage Obligations — 1.6% | |||||||
FNMA, Series 2016-C05, Class 2M2, VRN, 6.35%, 5/25/18, resets monthly off the 1-month LIBOR plus 4.45% | 1,500,000 | 1,689,259 | |||||
FNMA, Series 2016-C06, Class 1M2, VRN, 6.15%, 5/25/18, resets monthly off the 1-month LIBOR plus 4.25% | 1,000,000 | 1,139,259 | |||||
GNMA, Series 2012-87, IO, VRN, 0.46%, 5/1/18(4) | 4,863,638 | 118,618 | |||||
GNMA, Series 2012-99, IO, SEQ, VRN, 0.52%, 5/1/18(4) | 4,266,210 | 138,683 | |||||
GNMA, Series 2014-126, IO, SEQ, VRN, 0.74%, 5/1/18(4) | 4,635,321 | 246,834 | |||||
GNMA, Series 2014-126, IO, SEQ, VRN, 0.96%, 5/1/18(4) | 5,705,010 | 354,453 |
27
Principal Amount/ Shares | Value | ||||||
GNMA, Series 2015-85, IO, VRN, 0.61%, 5/1/18(4) | $ | 6,489,098 | $ | 294,957 | |||
3,982,063 | |||||||
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (Cost $5,254,222) | 4,963,387 | ||||||
CONVERTIBLE BONDS — 0.2% | |||||||
Energy Equipment and Services — 0.1% | |||||||
CHC Group LLC / CHC Finance Ltd., 0.00%, 10/1/20 (Acquired 3/13/17, Cost $82,540)(9)(10) | 114,377 | 126,386 | |||||
Oil, Gas and Consumable Fuels — 0.1% | |||||||
Whiting Petroleum Corp., 1.25%, 4/1/20 | 245,000 | 234,589 | |||||
TOTAL CONVERTIBLE BONDS (Cost $312,432) | 360,975 | ||||||
TEMPORARY CASH INVESTMENTS — 7.5% | |||||||
State Street Institutional U.S. Government Money Market Fund, Premier Class (Cost $18,972,811) | 18,972,811 | 18,972,811 | |||||
TOTAL INVESTMENT SECURITIES BEFORE SECURITIES SOLD SHORT — 101.5% (Cost $256,702,631) | 255,682,826 | ||||||
CORPORATE BONDS SOLD SHORT — (0.1)% | |||||||
Equity Real Estate Investment Trusts (REITs) — (0.1)% | |||||||
CBL & Associates LP, 5.25%, 12/1/23 (Proceeds $198,920) | $ | (198,000 | ) | (165,760 | ) | ||
OTHER ASSETS AND LIABILITIES — (1.4)% | (3,651,150 | ) | |||||
TOTAL NET ASSETS — 100.0% | $ | 251,865,916 |
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS | ||||||||||
Currency Purchased | Currency Sold | Counterparty | Settlement Date | Unrealized Appreciation (Depreciation) | ||||||
USD | 2,886,567 | EUR | 2,330,000 | State Street Bank & Trust Co. | 5/18/18 | $ | 69,869 |
FUTURES CONTRACTS SOLD | |||||||||||
Reference Entity | Contracts | Expiration Date | Notional Amount | Underlying Contract Value | Unrealized Appreciation (Depreciation) | ||||||
S&P 500 E-Mini | 67 | June 2018 | USD | 3,350 | $ | 8,867,450 | $ | 333,097 |
28
NOTES TO SCHEDULE OF INVESTMENTS | ||
EUR | - | Euro |
Euribor | - | Euro Interbank Offered Rate |
FNMA | - | Federal National Mortgage Association |
GNMA | - | Government National Mortgage Association |
IO | - | Interest Only |
LIBOR | - | London Interbank Offered Rate |
resets | - | The frequency with which a security's coupon changes, based on current market conditions or an underlying index. |
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 $109,373,396, which represented 43.4% of total net assets. Of these securities, 0.7% of total 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) | The interest rate resets periodically based on the weighted average coupons of the underlying mortgage-related or asset-backed obligations. |
(5) | Coupon rate adjusts periodically based upon a predetermined schedule. Interest reset date is indicated. Rate shown is effective at the period end. |
(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) | Non-income producing. |
(9) | Security is a zero-coupon bond. Zero-coupon securities are issued at a substantial discount from their value at maturity. |
(10) | 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 $126,386, which represented 0.1% of total net assets. |
See Notes to Financial Statements.
29
Statement of Assets and Liabilities |
APRIL 30, 2018 (UNAUDITED) | |||
Assets | |||
Investment securities, at value (cost of $256,702,631) | $ | 255,682,826 | |
Cash | 28,459 | ||
Deposits with broker for futures contracts | 417,688 | ||
Deposits with broker for securities sold short | 1,002,032 | ||
Deposits with broker for swap agreements | 108,408 | ||
Receivable for investments sold | 16,980,750 | ||
Receivable for capital shares sold | 437,351 | ||
Receivable for variation margin on futures contracts | 69,440 | ||
Unrealized appreciation on forward foreign currency exchange contracts | 69,869 | ||
Interest and dividends receivable | 1,004,549 | ||
275,801,372 | |||
Liabilities | |||
Securities sold short, at value (proceeds of $198,920) | 165,760 | ||
Foreign currency overdraft payable, at value (cost of $187,429) | 201,927 | ||
Payable for investments purchased | 22,892,147 | ||
Payable for capital shares redeemed | 282,965 | ||
Accrued management fees | 372,752 | ||
Distribution and service fees payable | 15,574 | ||
Interest expense payable on securities sold short | 4,331 | ||
23,935,456 | |||
Net Assets | $ | 251,865,916 | |
Net Assets Consist of: | |||
Capital (par value and paid-in surplus) | $ | 250,117,050 | |
Undistributed net investment income | 797,534 | ||
Undistributed net realized gain | 1,556,758 | ||
Net unrealized depreciation | (605,426 | ) | |
$ | 251,865,916 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | ||||
Investor Class, $0.01 Par Value | $113,565,678 | 11,666,697 | $9.73 | |||
I Class, $0.01 Par Value | $110,647,562 | 11,363,532 | $9.74 | |||
Y Class, $0.01 Par Value | $400,046 | 41,081 | $9.74 | |||
A Class, $0.01 Par Value | $11,135,201 | 1,144,121 | $9.73* | |||
C Class, $0.01 Par Value | $16,103,520 | 1,663,354 | $9.68 | |||
R Class, $0.01 Par Value | $8,853 | 911 | $9.72 | |||
R6 Class, $0.01 Par Value | $5,056 | 519 | $9.74 |
*Maximum offering price $10.32 (net asset value divided by 0.9425).
See Notes to Financial Statements.
30
Statement of Operations |
FOR THE SIX MONTHS ENDED APRIL 30, 2018 (UNAUDITED) | |||
Investment Income (Loss) | |||
Income: | |||
Interest | $ | 4,371,248 | |
Dividends (net of foreign taxes withheld of $30,679) | 1,746,273 | ||
6,117,521 | |||
Expenses: | |||
Management fees | 2,422,045 | ||
Distribution and service fees: | |||
A Class | 13,499 | ||
C Class | 82,025 | ||
R Class | 291 | ||
Directors' fees and expenses | 2,293 | ||
Interest expense on securities sold short | 10,499 | ||
Other expenses | 1,936 | ||
2,532,588 | |||
Fees waived(1) | (110,738 | ) | |
2,421,850 | |||
Net investment income (loss) | 3,695,671 | ||
Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investment transactions | 2,413,832 | ||
Securities sold short transactions | (22,957 | ) | |
Forward foreign currency exchange contract transactions | (26,633 | ) | |
Futures contract transactions | (248,154 | ) | |
Swap agreement transactions | 51,694 | ||
Foreign currency translation transactions | (14,078 | ) | |
2,153,704 | |||
Change in net unrealized appreciation (depreciation) on: | |||
Investments | (4,334,189 | ) | |
Securities sold short | 32,582 | ||
Forward foreign currency exchange contracts | 54,543 | ||
Futures contracts | 609,410 | ||
Swap agreements | (37,788 | ) | |
Translation of assets and liabilities in foreign currencies | (21,894 | ) | |
(3,697,336 | ) | ||
Net realized and unrealized gain (loss) | (1,543,632 | ) | |
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 2,152,039 |
(1) | Amount consists of $51,268, $47,285, $59, $4,738, $7,174, $47 and $167 for Investor Class, I Class, |
Y Class, A Class, C Class, R Class and R6 Class, respectively.
See Notes to Financial Statements.
31
Statement of Changes in Net Assets |
SIX MONTHS ENDED APRIL 30, 2018 (UNAUDITED) AND YEAR ENDED OCTOBER 31, 2017 | ||||||
Increase (Decrease) in Net Assets | April 30, 2018 | October 31, 2017 | ||||
Operations | ||||||
Net investment income (loss) | $ | 3,695,671 | $ | 4,611,793 | ||
Net realized gain (loss) | 2,153,704 | 2,163,403 | ||||
Change in net unrealized appreciation (depreciation) | (3,697,336 | ) | 3,190,445 | |||
Net increase (decrease) in net assets resulting from operations | 2,152,039 | 9,965,641 | ||||
Distributions to Shareholders | ||||||
From net investment income: | ||||||
Investor Class | (1,749,130 | ) | (2,069,991 | ) | ||
I Class | (1,736,210 | ) | (1,441,260 | ) | ||
Y Class | (1,430 | ) | (68 | ) | ||
A Class | (141,699 | ) | (379,667 | ) | ||
C Class | (161,574 | ) | (169,405 | ) | ||
R Class | (77 | ) | (19,673 | ) | ||
R6 Class | (84 | ) | (83,364 | ) | ||
From net realized gains: | ||||||
Investor Class | (28,796 | ) | — | |||
I Class | (26,383 | ) | — | |||
Y Class | (1 | ) | — | |||
A Class | (2,451 | ) | — | |||
C Class | (3,926 | ) | — | |||
R Class | (1 | ) | — | |||
R6 Class | (1 | ) | — | |||
Decrease in net assets from distributions | (3,851,763 | ) | (4,163,428 | ) | ||
Capital Share Transactions | ||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | (23,560,952 | ) | 184,197,316 | |||
Net increase (decrease) in net assets | (25,260,676 | ) | 189,999,529 | |||
Net Assets | ||||||
Beginning of period | 277,126,592 | 87,127,063 | ||||
End of period | $ | 251,865,916 | $ | 277,126,592 | ||
Undistributed net investment income | $ | 797,534 | $ | 892,067 |
See Notes to Financial Statements.
32
Notes to Financial Statements |
APRIL 30, 2018 (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, 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, convertible bonds 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 at the settlement price 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.
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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 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
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assets at the custodian bank or with a broker for collateral requirements on short sales, futures contracts, options contracts, forward commitments, swap agreements and certain forward foreign currency exchange contracts.
Income Tax Status — It is the fund’s policy to distribute substantially all net investment income and net realized gains to shareholders and to otherwise qualify as a regulated investment company under provisions of the Internal Revenue Code. Accordingly, no provision has been made for income taxes. The fund files U.S. federal, state, local and non-U.S. tax returns as applicable. The fund's tax returns are subject to examination by the relevant taxing authority until expiration of the applicable statute of limitations, which is generally three years from the date of filing but can be longer in certain jurisdictions. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination and for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Multiple Class — All shares of the fund represent an equal pro rata interest in the net assets of the class to which such shares belong, and have identical voting, dividend, liquidation and other rights and the same terms and conditions, except for class specific expenses and exclusive rights to vote on matters affecting only individual classes. Income, non-class specific expenses, and realized and unrealized capital gains and losses of the fund are allocated to each class of shares based on their relative net assets.
Distributions to Shareholders — Distributions from net investment income, if any, are generally declared and paid quarterly. Distributions from net realized gains, if any, are generally declared and paid annually.
Indemnifications — Under the corporation’s organizational documents, its officers and directors are indemnified against certain liabilities arising out of the performance of their duties to the fund. In addition, in the normal course of business, the fund enters into contracts that provide general indemnifications. The maximum exposure under these arrangements is unknown as this would involve future claims that may be made against a fund. The risk of material loss from such claims is considered by management to be remote.
3. Fees and Transactions with Related Parties
Certain officers and directors of the corporation are also officers and/or directors of American Century Companies, Inc. (ACC). The corporation’s investment advisor, ACIM, the corporation's distributor, American Century Investment Services, Inc. (ACIS), and the corporation’s transfer agent, American Century Services, LLC, are wholly owned, directly or indirectly, by ACC. ACIM has engaged Perella Weinberg Partners Capital Management LP (PWP) as a subadvisor for the fund. PWP assists the investment advisor in 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, Bain Capital Credit, LP, Good Hill Partners LP and Timbercreek Investment Management (U.S.) 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.
Management Fees — The corporation has entered into a management agreement with ACIM, under which ACIM provides the fund with investment advisory and management services in exchange for a single, unified management fee (the fee) per class. The agreement provides that all expenses of managing and operating the fund, except distribution and service fees, expenses on securities sold short, brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), and extraordinary expenses, will be paid by ACIM. The fee is computed and accrued daily based on each class's daily net assets and paid monthly in arrears. The difference in the fee among the classes is a result of their separate arrangements for non-Rule 12b-1 shareholder services. It is not the result of any difference in advisory or custodial fees or other expenses related to the management of the fund’s assets, which do not vary by class. From November 1, 2017 through March 15, 2018, the investment advisor agreed to waive 0.08% of the fund’s management fee. Effective March 16, 2018, the investment advisor agreed to waive 0.11% of the fund's management fee. The investment advisor expects this waiver to continue until May 31, 2019 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, 2018 are as follows:
Annual Management Fee | Effective Annual Management Fee After Waiver | |
Investor Class | 2.00% | 1.91% |
I Class | 1.80% | 1.71% |
Y Class | 1.65% | 1.56% |
A Class | 2.00% | 1.91% |
C Class | 2.00% | 1.91% |
R Class | 2.00% | 1.91% |
R6 Class | 1.65% | 1.56% |
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, 2018 are detailed in the Statement of Operations.
Directors' Fees and Expenses — The Board of Directors is responsible for overseeing the investment advisor’s management and operations of the fund. The directors receive detailed information about the fund and its investment advisor regularly throughout the year, and meet at least quarterly with management of the investment advisor to review reports about fund operations. The fund’s officers do not receive compensation from the fund.
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, 2018 totaled $104,892,486, none of which were 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, 2018 totaled $116,839,294, of which $5,580,104 represented U.S. Treasury and Government Agency obligations.
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5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended April 30, 2018 | Year ended October 31, 2017(1) | |||||||||
Shares | Amount | Shares | Amount | |||||||
Investor Class/Shares Authorized | 85,000,000 | 85,000,000 | ||||||||
Sold | 3,313,451 | $ | 32,470,010 | 21,278,884 | $ | 205,803,534 | ||||
Issued in reinvestment of distributions | 180,706 | 1,764,120 | 213,104 | 2,062,883 | ||||||
Redeemed | (4,749,561 | ) | (46,576,568 | ) | (12,942,093 | ) | (125,895,056 | ) | ||
(1,255,404 | ) | (12,342,438 | ) | 8,549,895 | 81,971,361 | |||||
I Class/Shares Authorized | 80,000,000 | 80,000,000 | ||||||||
Sold | 3,239,636 | 31,779,002 | 13,030,700 | 127,074,687 | ||||||
Issued in reinvestment of distributions | 180,580 | 1,762,593 | 148,092 | 1,441,260 | ||||||
Redeemed | (3,732,252 | ) | (36,612,892 | ) | (2,253,142 | ) | (22,017,262 | ) | ||
(312,036 | ) | (3,071,297 | ) | 10,925,650 | 106,498,685 | |||||
Y Class/Shares Authorized | 50,000,000 | 50,000,000 | ||||||||
Sold | 40,420 | 395,033 | 516 | 5,001 | ||||||
Issued in reinvestment of distributions | 147 | 1,431 | 7 | 68 | ||||||
Redeemed | (9 | ) | (83 | ) | — | — | ||||
40,558 | 396,381 | 523 | 5,069 | |||||||
A Class/Shares Authorized | 35,000,000 | 35,000,000 | ||||||||
Sold | 440,715 | 4,304,846 | 3,793,956 | 36,555,230 | ||||||
Issued in reinvestment of distributions | 14,678 | 143,273 | 38,810 | 374,267 | ||||||
Redeemed | (690,504 | ) | (6,750,145 | ) | (4,598,086 | ) | (44,713,379 | ) | ||
(235,111 | ) | (2,302,026 | ) | (765,320 | ) | (7,783,882 | ) | |||
C Class/Shares Authorized | 35,000,000 | 35,000,000 | ||||||||
Sold | 273,136 | 2,658,186 | 1,440,556 | 13,860,944 | ||||||
Issued in reinvestment of distributions | 16,547 | 160,941 | 17,181 | 165,765 | ||||||
Redeemed | (545,243 | ) | (5,304,915 | ) | (825,437 | ) | (7,985,144 | ) | ||
(255,560 | ) | (2,485,788 | ) | 632,300 | 6,041,565 | |||||
R Class/Shares Authorized | 20,000,000 | 20,000,000 | ||||||||
Sold | 519 | 5,135 | 482 | 4,947 | ||||||
Issued in reinvestment of distributions | 8 | 78 | 2,044 | 19,673 | ||||||
Redeemed | (80,401 | ) | (785,517 | ) | (128,452 | ) | (1,249,609 | ) | ||
(79,874 | ) | (780,304 | ) | (125,926 | ) | (1,224,989 | ) | |||
R6 Class/Shares Authorized | 30,000,000 | 30,000,000 | ||||||||
Sold | 510 | 5,000 | — | — | ||||||
Issued in reinvestment of distributions | 9 | 85 | 8,636 | 83,364 | ||||||
Redeemed | (304,206 | ) | (2,980,565 | ) | (142,727 | ) | (1,393,857 | ) | ||
(303,687 | ) | (2,975,480 | ) | (134,091 | ) | (1,310,493 | ) | |||
Net increase (decrease) | (2,401,114 | ) | $ | (23,560,952 | ) | 19,083,031 | $ | 184,197,316 |
(1) | April 10, 2017 (commencement of sale) through October 31, 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. |
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• | 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 | ||||||||
Asset-Backed Securities | — | $ | 46,402,681 | — | ||||
Bank Loan Obligations | — | 37,115,157 | — | |||||
Common Stocks | $ | 28,391,985 | 7,476,464 | — | ||||
Corporate Bonds | — | 32,022,073 | — | |||||
Collateralized Loan Obligations | — | 26,536,147 | — | |||||
Commercial Mortgage-Backed Securities | — | 18,501,696 | — | |||||
Exchange-Traded Funds | 16,962,002 | — | — | |||||
Exchange-Traded Notes | 12,459,681 | — | — | |||||
Preferred Stocks | 5,517,767 | — | — | |||||
Collateralized Mortgage Obligations | — | 4,963,387 | — | |||||
Convertible Bonds | — | 360,975 | — | |||||
Temporary Cash Investments | 18,972,811 | — | — | |||||
$ | 82,304,246 | $ | 173,378,580 | — | ||||
Other Financial Instruments | ||||||||
Futures Contracts | $ | 333,097 | — | — | ||||
Forward Foreign Currency Exchange Contracts | — | $ | 69,869 | — | ||||
$ | 333,097 | $ | 69,869 | — | ||||
Liabilities | ||||||||
Securities Sold Short | ||||||||
Corporate Bonds | — | $ | 165,760 | — |
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
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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 $1,052,000.
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 held during the period was 120 purchased 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 notional exposure to these equity price risk derivative instruments held during the period was $251,500 futures contracts purchased and $78,058 futures contracts sold.
Foreign Currency Risk — The fund is subject to foreign currency exchange rate risk in the normal course of pursuing its investment objectives. The value of foreign investments held by a fund may be significantly affected by changes in foreign currency exchange rates. The dollar value of a foreign security generally decreases when the value of the dollar rises against the foreign currency in which the security is denominated and tends to increase when the value of the dollar declines against such foreign currency. A fund may enter into forward foreign currency exchange contracts to reduce a fund's exposure to foreign currency exchange rate fluctuations or to gain exposure to the fluctuations in the value of foreign currencies. The net U.S. dollar value of foreign currency underlying all contractual commitments held by a fund and the resulting unrealized appreciation or depreciation are determined daily. Realized gain or loss is recorded upon the termination of the contract. Net realized and unrealized gains or losses occurring during the holding period of forward foreign currency exchange contracts are a component of net realized gain (loss) on forward foreign currency exchange contract transactions and change in net unrealized appreciation (depreciation) on forward foreign currency exchange contracts, respectively. A fund bears the risk of an unfavorable change in the foreign currency exchange rate underlying the forward contract. Additionally, losses, up to the fair value, may arise if the counterparties do not perform under the contract terms. The fund's average U.S. dollar exposure to foreign currency risk derivative instruments held during the period was $1,840,879.
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
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value and is recorded as unrealized gains and losses. A fund recognizes a realized gain or loss when the futures contract is closed or expires. Net realized and unrealized gains or losses occurring during the holding period of futures contracts are a component of net realized gain (loss) on futures contract transactions and change in net unrealized appreciation (depreciation) on futures contracts, respectively. One of the risks of entering into futures contracts is the possibility that the change in value of the contract may not correlate with the changes in value of the underlying securities. The fund's average notional exposure to interest rate risk derivative instruments held during the period was $1,000,000 futures contracts sold.
Value of Derivative Instruments as of April 30, 2018
Asset Derivatives | Liability Derivatives | ||||||
Type of Risk Exposure | Location on Statement of Assets and Liabilities | Value | Location on Statement of Assets and Liabilities | Value | |||
Equity Price Risk | Receivable for variation margin on futures contracts* | $ | 69,440 | Payable for variation margin on futures contracts* | — | ||
Foreign Currency Risk | Unrealized appreciation on forward foreign currency exchange contracts | 69,869 | Unrealized depreciation on forward foreign currency exchange contracts | — | |||
$ | 139,309 | — |
* 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, 2018
Net Realized Gain (Loss) | Change in Net Unrealized Appreciation (Depreciation) | |||||||
Type of Risk Exposure | Location on Statement of Operations | Value | Location on Statement of Operations | Value | ||||
Credit Risk | Net realized gain (loss) on swap agreement transactions | $ | 51,694 | Change in net unrealized appreciation (depreciation) on swap agreements | $ | (37,788 | ) | |
Equity Price Risk | Net realized gain (loss) on futures contract transactions | (248,661 | ) | Change in net unrealized appreciation (depreciation) on futures contracts | 609,410 | |||
Equity Price Risk | Net realized gain (loss) on investment transactions | (32,452 | ) | Change in net unrealized appreciation (depreciation) on investments | 23,104 | |||
Foreign Currency Risk | Net realized gain (loss) on forward foreign currency exchange contract transactions | (26,633 | ) | Change in net unrealized appreciation (depreciation) on forward foreign currency exchange contracts | 54,543 | |||
Interest Rate Risk | Net realized gain (loss) on futures contract transactions | 507 | Change in net unrealized appreciation (depreciation) on futures contracts | — | ||||
$ | (255,545 | ) | $ | 649,269 |
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’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.
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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 | $ | 256,711,258 | |
Gross tax appreciation of investments | $ | 4,261,776 | |
Gross tax depreciation of investments | (5,290,208 | ) | |
Net tax appreciation (depreciation) of investments | (1,028,432 | ) | |
Gross tax appreciation on securities sold short | 33,160 | ||
Gross tax depreciation on securities sold short | — | ||
Net tax appreciation (depreciation) | $ | (995,272 | ) |
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, 2017, the fund had accumulated short-term capital losses of $(806,273) and accumulated long-term capital losses of $(51,662), 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. As a result of a shift in ownership of the fund, the utilization of current capital loss carryovers are limited. Any remaining accumulated gains after application of this limitation will be distributed to shareholders. Future capital loss carryover utilization in any given year may be subject to Internal Revenue Code limitations.
41
10. Recently Issued Accounting Standards
In March 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No.2017-08, “Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20), Premium Amortization on Purchased Callable Debt Securities” (ASU 2017-08). ASU 2017-08 amends the amortization period for certain purchased callable debt securities held at a premium, shortening such period to the earliest call date. The amendments are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Management is currently evaluating the impact that adopting ASU 2017-08 will have on the financial statements.
42
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(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 | |||||||||||||||||
2018(4) | $9.80 | 0.14 | (0.06) | 0.08 | (0.15) | —(5) | (0.15) | $9.73 | 0.81% | 1.92%(6) | 2.01%(6) | 2.91%(6) | 2.82%(6) | 45% | $113,566 | ||
2017 | $9.48 | 0.22 | 0.29 | 0.51 | (0.19) | — | (0.19) | $9.80 | 5.45% | 1.94% | 2.02% | 2.33% | 2.25% | 65% | $126,656 | ||
2016 | $9.61 | 0.24 | 0.04 | 0.28 | (0.41) | — | (0.41) | $9.48 | 3.03% | 2.00% | 2.01% | 2.57% | 2.56% | 98% | $41,447 | ||
2015(7) | $10.00 | 0.10 | (0.49) | (0.39) | — | — | — | $9.61 | (3.90)% | 2.00%(6) | 2.00%(6) | 2.55%(6) | 2.55%(6) | 23% | $21,898 | ||
I Class | |||||||||||||||||
2018(4) | $9.80 | 0.15 | (0.05) | 0.10 | (0.16) | —(5) | (0.16) | $9.74 | 1.01% | 1.72%(6) | 1.81%(6) | 3.11%(6) | 3.02%(6) | 45% | $110,648 | ||
2017 | $9.48 | 0.27 | 0.26 | 0.53 | (0.21) | — | (0.21) | $9.80 | 5.66% | 1.74% | 1.82% | 2.53% | 2.45% | 65% | $114,472 | ||
2016 | $9.61 | 0.26 | 0.05 | 0.31 | (0.44) | — | (0.44) | $9.48 | 3.19% | 1.80% | 1.81% | 2.77% | 2.76% | 98% | $7,111 | ||
2015(7) | $10.00 | 0.11 | (0.50) | (0.39) | — | — | — | $9.61 | (3.80)% | 1.80%(6) | 1.80%(6) | 2.75%(6) | 2.75%(6) | 23% | $5,769 | ||
Y Class | |||||||||||||||||
2018(4) | $9.81 | 0.16 | (0.07) | 0.09 | (0.16) | —(5) | (0.16) | $9.74 | 0.99% | 1.57%(6) | 1.66%(6) | 3.26%(6) | 3.17%(6) | 45% | $400 | ||
2017(8) | $9.69 | 0.15 | 0.10 | 0.25 | (0.13) | — | (0.13) | $9.81 | 2.61% | 1.59%(6) | 1.67%(6) | 2.80%(6) | 2.72%(6) | 65%(9) | $5 |
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(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) | |||
A Class | |||||||||||||||||
2018(4) | $9.80 | 0.13 | (0.07) | 0.06 | (0.13) | —(5) | (0.13) | $9.73 | 0.68% | 2.17%(6) | 2.26%(6) | 2.66%(6) | 2.57%(6) | 45% | $11,135 | ||
2017 | $9.48 | 0.18 | 0.31 | 0.49 | (0.17) | — | (0.17) | $9.80 | 5.19% | 2.19% | 2.27% | 2.08% | 2.00% | 65% | $13,515 | ||
2016 | $9.60 | 0.22 | 0.04 | 0.26 | (0.38) | — | (0.38) | $9.48 | 2.80% | 2.25% | 2.26% | 2.32% | 2.31% | 98% | $20,328 | ||
2015(7) | $10.00 | 0.09 | (0.49) | (0.40) | — | — | — | $9.60 | (4.00)% | 2.25%(6) | 2.25%(6) | 2.30%(6) | 2.30%(6) | 23% | $9,673 | ||
C Class | |||||||||||||||||
2018(4) | $9.75 | 0.09 | (0.06) | 0.03 | (0.10) | —(5) | (0.10) | $9.68 | 0.31% | 2.92%(6) | 3.01%(6) | 1.91%(6) | 1.82%(6) | 45% | $16,104 | ||
2017 | $9.43 | 0.12 | 0.30 | 0.42 | (0.10) | — | (0.10) | $9.75 | 4.42% | 2.94% | 3.02% | 1.33% | 1.25% | 65% | $18,705 | ||
2016 | $9.57 | 0.14 | 0.05 | 0.19 | (0.33) | — | (0.33) | $9.43 | 2.03% | 3.00% | 3.01% | 1.57% | 1.56% | 98% | $12,129 | ||
2015(7) | $10.00 | 0.06 | (0.49) | (0.43) | — | — | — | $9.57 | (4.30)% | 3.00%(6) | 3.00%(6) | 1.55%(6) | 1.55%(6) | 23% | $9,687 | ||
R Class | |||||||||||||||||
2018(4) | $9.78 | 0.09 | (0.03) | 0.06 | (0.12) | —(5) | (0.12) | $9.72 | 0.66% | 2.42%(6) | 2.51%(6) | 2.41%(6) | 2.32%(6) | 45% | $9 | ||
2017 | $9.46 | 0.16 | 0.30 | 0.46 | (0.14) | — | (0.14) | $9.78 | 4.93% | 2.44% | 2.52% | 1.83% | 1.75% | 65% | $790 | ||
2016 | $9.59 | 0.19 | 0.04 | 0.23 | (0.36) | — | (0.36) | $9.46 | 2.50% | 2.50% | 2.51% | 2.07% | 2.06% | 98% | $1,956 | ||
2015(7) | $10.00 | 0.08 | (0.49) | (0.41) | — | — | — | $9.59 | (4.10)% | 2.50%(6) | 2.50%(6) | 2.05%(6) | 2.05%(6) | 23% | $1,917 |
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(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) | |||
R6 Class | |||||||||||||||||
2018(4) | $9.81 | 0.13 | (0.04) | 0.09 | (0.16) | —(5) | (0.16) | $9.74 | 0.98% | 1.57%(6) | 1.66%(6) | 3.26%(6) | 3.17%(6) | 45% | $5 | ||
2017 | $9.48 | 0.25 | 0.31 | 0.56 | (0.23) | — | (0.23) | $9.81 | 5.93% | 1.59% | 1.67% | 2.68% | 2.60% | 65% | $2,983 | ||
2016 | $9.62 | 0.27 | 0.04 | 0.31 | (0.45) | — | (0.45) | $9.48 | 3.39% | 1.65% | 1.66% | 2.92% | 2.91% | 98% | $4,157 | ||
2015(7) | $10.00 | 0.12 | (0.50) | (0.38) | — | — | — | $9.62 | (3.80)% | 1.65%(6) | 1.65%(6) | 2.90%(6) | 2.90%(6) | 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, 2018 (unaudited). |
(5) | Per-share amount was less than $0.005. |
(6) | Annualized. |
(7) | May 29, 2015 (fund inception) through October 31, 2015. |
(8) | April 10, 2017 (commencement of sale) through October 31, 2017. |
(9) | Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended October 31, 2017. |
See Notes to Financial Statements.
Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain retirement accounts are subject to federal income tax withholding, unless you elect not to have withholding apply*. Tax will be withheld on the total amount withdrawn even though you may be receiving amounts that are not subject to withholding, such as nondeductible contributions. In such case, excess amounts of withholding could occur. You may adjust your withholding election so that a greater or lesser amount will be withheld.
If you don’t want us to withhold on this amount, you must notify us to not withhold the federal income tax. You may notify us in writing or in certain situations by telephone or through other electronic means. For systematic withdrawals, your withholding election will remain in effect until revoked or changed by filing a new election. You have the right to revoke your election at any time and change your withholding percentage for future distributions.
Remember, even if you elect not to have income tax withheld, you are liable for paying income tax on the taxable portion of your withdrawal. If you elect not to have income tax withheld or you don’t have enough income tax withheld, you may be responsible for payment of estimated tax. You may incur penalties under the estimated tax rules if your withholding and estimated tax payments are not sufficient. You can reduce or defer the income tax on a distribution by directly or indirectly rolling such distribution over to another IRA or eligible plan. You should consult your tax advisor for additional information.
State tax will be withheld if, at the time of your distribution, your address is within one of the mandatory withholding states and you have federal income tax withheld (or as otherwise required by state law). State taxes will be withheld from your distribution in accordance with the respective state rules.
*Some 403(b), 457 and qualified retirement plan distributions may be subject to 20% mandatory withholding, as they are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
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.
46
Notes |
47
Notes |
48
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. | ||
©2018 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-92370 1806 |
SEMIANNUAL REPORT | |
APRIL 30, 2018 | |
AC Alternatives® Long Short Fund |
Investor Class (ALEVX) |
I Class (ALEJX) |
Y Class (ALYEX) |
A Class (ALEQX) |
C Class (ALEHX) |
R Class (ALEWX) |
R6 Class (ALEDX) |
Table of Contents |
Any opinions expressed in this report reflect those of the author as of the date of the report, and do not necessarily represent the opinions of American Century Investments® or any other person in the American Century Investments organization. Any such opinions are subject to change at any time based upon market or other conditions and American Century Investments disclaims any responsibility to update such opinions. These opinions may not be relied upon as investment advice and, because investment decisions made by American Century Investments funds are based on numerous factors, may not be relied upon as an indication of trading intent on behalf of any American Century Investments fund. Security examples are used for representational purposes only and are not intended as recommendations to purchase or sell securities. Performance information for comparative indices and securities is provided to American Century Investments by third party vendors. To the best of American Century Investments’ knowledge, such information is accurate at the time of printing.
President’s Letter |
Jonathan Thomas
Dear Investor:
Thank you for reviewing this semiannual report for the six months ended April 30, 2018. It provides a market overview (below), followed by a schedule of fund investments and other financial information. For additional commentary and information on fund performance, plus other investment insights, we encourage you to visit our website, americancentury.com.
Volatility’s Return Restrains Rally
From rally to retreat, global financial markets experienced two distinct performance patterns during the six-month period. For the first three months, improving global growth, positive corporate earnings results, generally muted inflation, and rising, though still relatively low, interest rates supported equity market gains. U.S. stocks were notably strong, with the S&P 500 Index returning more than 10% for the three months ended January 31, 2018. U.S. Treasury yields edged higher, and interest-rate-sensitive assets, including U.S. fixed-income securities and real estate investment trusts (REITs), generated more-modest gains. Meanwhile, accommodative central bank policy continued to fuel gains among non-U.S. developed markets bonds, while a weaker U.S. dollar largely aided emerging markets bonds.
The backdrop changed swiftly and sharply in early February. U.S. stocks plunged after the U.S. Department of Labor announced wages grew at their fastest year-over-year pace in nine years. This news, coupled with other positive economic data and rising inflation expectations, pushed interest rates higher and triggered fears that the Federal Reserve (the Fed) would ramp up its rate-hike campaign. In addition, President Trump announced a tariff strategy that sparked fears of a global trade war. Volatility subsided somewhat by the end of the reporting period, as economic and inflation data and the Fed’s rate-hike strategy were generally aligned with investor expectations. Although returns for most global asset classes declined for the three months ended April 30, 2018, earlier gains were sufficient to keep results positive for the entire six-month period.
With economic growth improving, inflationary pressures mounting, Treasury yields rising, and volatility resurfacing, investors likely will face new opportunities and challenges in the months ahead. We believe this scenario warrants a disciplined, diversified, and risk-aware approach, using professionally managed portfolios in pursuit of investment goals. We appreciate your continued trust and confidence in us.
Sincerely,
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
2
Fund Characteristics |
APRIL 30, 2018 | |
Types of Investments in Portfolio | % of net assets |
Common Stocks | 73.1% |
Exchange-Traded Funds Sold Short | (10.3)% |
Common Stocks Sold Short | (8.6)% |
Temporary Cash Investments | 17.8% |
Other Assets and Liabilities | 28.0%* |
*Amount relates primarily to deposits with broker for securities sold short.
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, 2017 to April 30, 2018.
Actual Expenses
The table provides information about actual account values and actual expenses for each class. You may use the information, together with the amount you invested, to estimate the expenses that you paid over the period. First, identify the share class you own. Then simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
If you hold Investor Class shares of any American Century Investments fund, or I Class shares of the American Century Diversified Bond Fund, in an American Century Investments account (i.e., not a financial intermediary or retirement plan account), American Century Investments may charge you a $12.50 semiannual account maintenance fee if the value of those shares is less than $10,000. We will redeem shares automatically in one of your accounts to pay the $12.50 fee. In determining your total eligible investment amount, we will include your investments in all personal accounts (including American Century Investments Brokerage accounts) registered under your Social Security number. Personal accounts include individual accounts, joint accounts, UGMA/UTMA accounts, personal trusts, Coverdell Education Savings Accounts and IRAs (including traditional, Roth, Rollover, SEP-, SARSEP- and SIMPLE-IRAs), and certain other retirement accounts. If you have only business, business retirement, employer-sponsored or American Century Investments Brokerage accounts, you are currently not subject to this fee. If you are subject to the Account Maintenance Fee, your account value could be reduced by the fee amount.
Hypothetical Example for Comparison Purposes
The table also provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio of each class of your fund and an assumed rate of return of 5% per year before expenses, which is not the actual return of a fund’s share class. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) or redemption/exchange fees. Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
4
Beginning Account Value 11/1/17 | Ending Account Value 4/30/18 | Expenses Paid During Period(1) 11/1/17 - 4/30/18 | Annualized Expense Ratio(1) | |
Actual | ||||
Investor Class | $1,000 | $987.60 | $12.86 | 2.61% |
I Class | $1,000 | $988.50 | $11.88 | 2.41% |
Y Class | $1,000 | $989.40 | $11.15 | 2.26% |
A Class | $1,000 | $985.70 | $14.08 | 2.86% |
C Class | $1,000 | $982.70 | $17.75 | 3.61% |
R Class | $1,000 | $985.60 | $15.31 | 3.11% |
R6 Class | $1,000 | $989.40 | $11.15 | 2.26% |
Hypothetical | ||||
Investor Class | $1,000 | $1,011.85 | $13.02 | 2.61% |
I Class | $1,000 | $1,012.84 | $12.03 | 2.41% |
Y Class | $1,000 | $1,013.59 | $11.28 | 2.26% |
A Class | $1,000 | $1,010.61 | $14.26 | 2.86% |
C Class | $1,000 | $1,006.89 | $17.96 | 3.61% |
R Class | $1,000 | $1,009.37 | $15.49 | 3.11% |
R6 Class | $1,000 | $1,013.59 | $11.28 | 2.26% |
(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. Annualized expense ratio reflects actual expenses, including any applicable fee waivers or expense reimbursements and excluding any acquired fund fees and expenses. |
5
Schedule of Investments |
APRIL 30, 2018 (UNAUDITED)
Shares | Value | ||||
COMMON STOCKS — 73.1% | |||||
Automobiles — 1.3% | |||||
Volkswagen AG Preference Shares | 1,810 | $ | 374,824 | ||
Banks — 1.8% | |||||
ABN AMRO Group NV CVA | 8,886 | 275,550 | |||
ING Groep NV | 6,001 | 100,678 | |||
KBC Group NV | 1,684 | 146,742 | |||
522,970 | |||||
Chemicals — 0.8% | |||||
BASF SE | 1,123 | 116,670 | |||
Koninklijke DSM NV | 1,043 | 107,628 | |||
224,298 | |||||
Communications Equipment — 2.0% | |||||
ARRIS International plc(2) | 9,660 | 260,820 | |||
Cisco Systems, Inc. | 2,000 | 88,580 | |||
CommScope Holding Co., Inc.(2) | 900 | 34,398 | |||
Lumentum Holdings, Inc.(2) | 100 | 5,045 | |||
Telefonaktiebolaget LM Ericsson, B Shares | 23,572 | 178,758 | |||
567,601 | |||||
Diversified Telecommunication Services — 0.1% | |||||
Ooma, Inc.(2) | 2,825 | 30,086 | |||
Electrical Equipment — 1.0% | |||||
ABB Ltd. | 12,861 | 299,638 | |||
Electronic Equipment, Instruments and Components — 0.6% | |||||
Hexagon AB, B Shares | 1,972 | 113,555 | |||
Orbotech Ltd.(2) | 1,200 | 70,104 | |||
183,659 | |||||
Food Products — 0.4% | |||||
Nestle SA | 1,395 | 107,846 | |||
Health Care Equipment and Supplies — 1.3% | |||||
Koninklijke Philips NV | 8,955 | 378,032 | |||
Industrial Conglomerates — 0.4% | |||||
Rheinmetall AG | 831 | 108,697 | |||
Insurance — 2.1% | |||||
Allianz SE | 1,619 | 383,001 | |||
Swiss Life Holding AG(2) | 309 | 108,149 | |||
Zurich Insurance Group AG | 339 | 108,138 | |||
599,288 | |||||
Internet and Direct Marketing Retail — 0.1% | |||||
JD.com, Inc. ADR(2) | 900 | 32,859 | |||
Internet Software and Services — 6.8% | |||||
Alphabet, Inc., Class A(2)(3) | 440 | 448,175 | |||
Alphabet, Inc., Class C(2)(3) | 510 | 518,838 | |||
Cornerstone OnDemand, Inc.(2) | 1,600 | 70,608 | |||
DocuSign, Inc.(2) | 433 | 16,727 | |||
eBay, Inc.(2)(3) | 9,100 | 344,708 | |||
Facebook, Inc., Class A(2)(3) | 1,800 | 309,600 |
6
Shares | Value | ||||
GoDaddy, Inc., Class A(2) | 1,300 | $ | 83,928 | ||
LogMeIn, Inc. | 1,360 | 149,872 | |||
Okta, Inc.(2) | 422 | 18,066 | |||
1,960,522 | |||||
IT Services — 3.9% | |||||
DXC Technology Co. | 1,724 | 177,675 | |||
Euronet Worldwide, Inc.(2) | 1,600 | 124,976 | |||
Fidelity National Information Services, Inc. | 700 | 66,479 | |||
Pagseguro Digital Ltd., Class A(2) | 7,725 | 256,702 | |||
Visa, Inc., Class A(3) | 4,000 | 507,520 | |||
1,133,352 | |||||
Machinery — 1.9% | |||||
Alfa Laval AB | 3,740 | 92,797 | |||
Sandvik AB | 15,173 | 258,129 | |||
SKF AB, B Shares | 9,681 | 196,845 | |||
547,771 | |||||
Media — 0.5% | |||||
Time Warner, Inc. | 900 | 85,320 | |||
Twenty-First Century Fox, Inc., Class A | 1,400 | 51,184 | |||
136,504 | |||||
Multi-Utilities — 0.4% | |||||
E.ON SE | 10,067 | 110,088 | |||
Real Estate Management and Development — 0.4% | |||||
Vonovia SE | 2,204 | 110,532 | |||
Semiconductors and Semiconductor Equipment — 26.5% | |||||
Advanced Energy Industries, Inc.(2) | 400 | 23,820 | |||
Applied Materials, Inc. | 10,600 | 526,502 | |||
Broadcom, Inc. | 4,200 | 963,564 | |||
Cavium, Inc.(2)(3) | 3,535 | 265,160 | |||
Cypress Semiconductor Corp. | 7,256 | 105,792 | |||
Infineon Technologies AG | 2,432 | 62,287 | |||
Inphi Corp.(2) | 7,015 | 200,489 | |||
Integrated Device Technology, Inc.(2)(3) | 12,026 | 334,684 | |||
Lam Research Corp.(3) | 6,923 | 1,281,170 | |||
Lattice Semiconductor Corp.(2) | 36,400 | 197,288 | |||
Marvell Technology Group Ltd. | 15,400 | 308,924 | |||
Maxim Integrated Products, Inc. | 3,924 | 213,858 | |||
Microchip Technology, Inc.(3) | 5,200 | 435,032 | |||
Micron Technology, Inc.(2)(3) | 24,100 | 1,108,118 | |||
ON Semiconductor Corp.(2)(3) | 7,451 | 164,518 | |||
Qorvo, Inc.(2) | 6,075 | 409,455 | |||
STMicroelectronics NV | 15,106 | 329,342 | |||
Synaptics, Inc.(2)(3) | 8,767 | 381,540 | |||
Teradyne, Inc.(3) | 10,185 | 331,522 | |||
7,643,065 | |||||
Software — 11.0% | |||||
Adobe Systems, Inc.(2) | 300 | 66,480 | |||
Fortinet, Inc.(2)(3) | 5,044 | 279,236 | |||
Microsoft Corp.(3) | 2,500 | 233,800 | |||
Nuance Communications, Inc.(2) | 33,500 | 493,120 | |||
Oracle Corp. (New York) | 9,100 | 415,597 |
7
Shares | Value | ||||
SailPoint Technologies Holding, Inc.(2) | 1,680 | $ | 40,471 | ||
salesforce.com, Inc.(2)(3) | 1,600 | 193,584 | |||
SAP SE | 3,467 | 386,426 | |||
Splunk, Inc.(2) | 780 | 80,067 | |||
Synopsys, Inc.(2) | 6,806 | 581,981 | |||
Temenos Group AG(2) | 625 | 78,477 | |||
TiVo Corp.(3) | 15,359 | 217,330 | |||
Verint Systems, Inc.(2)(3) | 2,500 | 105,250 | |||
3,171,819 | |||||
Technology Hardware, Storage and Peripherals — 7.4% | |||||
Apple, Inc.(3) | 4,900 | 809,774 | |||
Electronics For Imaging, Inc.(2)(3) | 9,569 | 265,061 | |||
NetApp, Inc. | 1,400 | 93,212 | |||
Western Digital Corp.(3) | 6,100 | 480,619 | |||
Xerox Corp.(3) | 15,100 | 474,895 | |||
2,123,561 | |||||
Textiles, Apparel and Luxury Goods — 1.9% | |||||
adidas AG | 442 | 108,680 | |||
Cie Financiere Richemont SA | 2,309 | 219,280 | |||
Moncler SpA | 1,813 | 81,786 | |||
Pandora A/S | 1,347 | 149,685 | |||
559,431 | |||||
Tobacco — 0.5% | |||||
Swedish Match AB | 2,983 | 133,327 | |||
TOTAL COMMON STOCKS (Cost $17,625,314) | 21,059,770 | ||||
TEMPORARY CASH INVESTMENTS — 17.8% | |||||
State Street Institutional U.S. Government Money Market Fund, Premier Class (Cost $5,129,733) | 5,129,733 | 5,129,733 | |||
TOTAL INVESTMENT SECURITIES BEFORE SECURITIES SOLD SHORT — 90.9% (Cost $22,755,047) | 26,189,503 | ||||
SECURITIES SOLD SHORT — (18.9)% | |||||
EXCHANGE-TRADED FUNDS SOLD SHORT — (10.3)% | |||||
Technology Select Sector SPDR Fund (Proceeds $2,039,963) | (45,400 | ) | (2,971,884 | ) | |
COMMON STOCKS SOLD SHORT — (8.6)% | |||||
Automobiles — (1.6)% | |||||
Tesla, Inc. | (1,575 | ) | (462,892 | ) | |
Biotechnology — (1.5)% | |||||
Intrexon Corp. | (23,300 | ) | (423,594 | ) | |
Health Care Equipment and Supplies — (1.9)% | |||||
Abaxis, Inc. | (4,300 | ) | (286,251 | ) | |
Nevro Corp. | (2,700 | ) | (241,272 | ) | |
(527,523 | ) | ||||
Internet and Direct Marketing Retail — (0.9)% | |||||
Netflix, Inc. | (850 | ) | (265,591 | ) | |
Pharmaceuticals — (1.0)% | |||||
Canopy Growth Corp. | (12,492 | ) | (292,951 | ) |
8
Shares | Value | ||||
Software — (1.7)% | |||||
Snap, Inc., Class A | (33,900 | ) | $ | (485,787 | ) |
TOTAL COMMON STOCKS SOLD SHORT (Proceeds $2,152,819) | (2,458,338 | ) | |||
TOTAL SECURITIES SOLD SHORT (Proceeds $4,192,782) | (5,430,222 | ) | |||
OTHER ASSETS AND LIABILITIES(1) — 28.0% | 8,039,728 | ||||
TOTAL NET ASSETS — 100.0% | $ | 28,799,009 |
WRITTEN OPTIONS CONTRACTS | |||||||||||||||
Reference Entity | Contracts | Type | Exercise Price | Expiration Date | Underlying Notional Amount | Premiums Received | Value | ||||||||
Micron Technology, Inc. | 22 | Call | $ | 80.00 | 1/18/19 | $ | 101,156 | $ | (11,155 | ) | $ | (1,606 | ) | ||
Microsoft Corp. | 9 | Put | $ | 77.50 | 1/18/19 | $ | 84,168 | (2,934 | ) | (1,886 | ) | ||||
Microsoft Corp. | 9 | Call | $ | 115.00 | 1/18/19 | $ | 84,168 | (1,390 | ) | (1,246 | ) | ||||
Tesla, Inc. | 34 | Put | $ | 50.00 | 1/18/19 | $ | 999,260 | (6,457 | ) | (4,828 | ) | ||||
Tesla, Inc. | 16 | Put | $ | 100.00 | 1/18/19 | $ | 470,240 | (8,464 | ) | (6,760 | ) | ||||
$ | (30,400 | ) | $ | (16,326 | ) |
FUTURES CONTRACTS SOLD | |||||||||||
Reference Entity | Contracts | Expiration Date | Notional Amount | Underlying Contract Value | Unrealized Appreciation (Depreciation) | ||||||
Amsterdam Exchange Index | 2 | May 2018 | EUR | 400 | $ | 267,097 | $ | (5,076 | ) | ||
Cotation Assistée en Continu 40 Index | 13 | May 2018 | EUR | 130 | 859,195 | (26,114 | ) | ||||
Deutscher Aktienindex Index | 1 | June 2018 | EUR | 25 | 380,726 | (7,670 | ) | ||||
EURO STOXX 50 Index | 51 | June 2018 | EUR | 510 | 2,139,552 | (66,941 | ) | ||||
FTSE 100 Index | 4 | June 2018 | GBP | 40 | 410,807 | (18,178 | ) | ||||
OMX Stockholm 30 Index | 13 | May 2018 | SEK | 1,300 | 232,338 | (386 | ) | ||||
$ | 4,289,715 | $ | (124,365 | ) |
9
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS | ||||||||||
Currency Purchased | Currency Sold | Counterparty | Settlement Date | Unrealized Appreciation (Depreciation) | ||||||
CHF | 639,000 | USD | 660,670 | State Street Bank and Trust | 5/16/18 | $ | (15,183 | ) | ||
CHF | 298,000 | USD | 303,164 | State Street Bank and Trust | 7/18/18 | (427 | ) | |||
CHF | 213,000 | USD | 225,892 | State Street Bank and Trust | 5/15/19 | (3,160 | ) | |||
CHF | 913,000 | USD | 960,037 | State Street Bank and Trust | 5/15/19 | (5,319 | ) | |||
USD | 481,178 | CHF | 462,000 | State Street Bank and Trust | 5/16/18 | 14,488 | ||||
USD | 184,468 | CHF | 177,000 | State Street Bank and Trust | 5/16/18 | 5,671 | ||||
USD | 932,822 | CHF | 913,000 | State Street Bank and Trust | 7/18/18 | 5,310 | ||||
USD | 310,389 | CHF | 305,000 | State Street Bank and Trust | 7/18/18 | 541 | ||||
USD | 683,727 | CHF | 639,000 | State Street Bank and Trust | 5/15/19 | 15,529 | ||||
USD | 519,446 | CHF | 487,000 | State Street Bank and Trust | 5/15/19 | 10,194 | ||||
DKK | 135,000 | USD | 22,896 | State Street Bank and Trust | 5/15/19 | (273 | ) | |||
DKK | 936,000 | USD | 158,008 | State Street Bank and Trust | 5/15/19 | (1,159 | ) | |||
USD | 153,764 | DKK | 936,000 | State Street Bank and Trust | 7/18/18 | 1,137 | ||||
USD | 183,397 | DKK | 1,071,000 | State Street Bank and Trust | 5/15/19 | 3,925 | ||||
EUR | 3,357,000 | USD | 4,155,966 | State Street Bank and Trust | 5/16/18 | (98,327 | ) | |||
EUR | 379,000 | USD | 460,947 | State Street Bank and Trust | 7/18/18 | (558 | ) | |||
EUR | 214,000 | USD | 272,799 | State Street Bank and Trust | 5/15/19 | (5,945 | ) | |||
EUR | 148,000 | USD | 187,833 | State Street Bank and Trust | 5/15/19 | (3,279 | ) | |||
EUR | 1,379,000 | USD | 1,739,960 | State Street Bank and Trust | 5/15/19 | (20,373 | ) | |||
EUR | 1,616,000 | USD | 2,030,221 | State Street Bank and Trust | 5/15/19 | (15,100 | ) | |||
USD | 352,117 | EUR | 285,000 | State Street Bank and Trust | 5/16/18 | 7,635 | ||||
USD | 3,796,422 | EUR | 3,072,000 | State Street Bank and Trust | 5/16/18 | 83,266 | ||||
USD | 1,977,338 | EUR | 1,616,000 | State Street Bank and Trust | 7/18/18 | 14,308 | ||||
USD | 314,204 | EUR | 258,000 | State Street Bank and Trust | 7/18/18 | 800 | ||||
USD | 4,286,973 | EUR | 3,357,000 | State Street Bank and Trust | 5/15/19 | 100,858 | ||||
GBP | 57,000 | USD | 81,182 | State Street Bank and Trust | 5/16/18 | (2,662 | ) | |||
GBP | 86,000 | USD | 122,475 | State Street Bank and Trust | 5/16/18 | (4,006 | ) | |||
USD | 67,372 | GBP | 48,000 | State Street Bank and Trust | 5/16/18 | 1,250 | ||||
NOK | 2,279,000 | USD | 294,258 | State Street Bank and Trust | 5/16/18 | (10,053 | ) | |||
NOK | 625,000 | USD | 78,442 | State Street Bank and Trust | 7/18/18 | (314 | ) | |||
NOK | 31,000 | USD | 3,882 | State Street Bank and Trust | 7/18/18 | (7 | ) | |||
NOK | 1,062,000 | USD | 138,184 | State Street Bank and Trust | 5/15/19 | (3,787 | ) | |||
NOK | 561,000 | USD | 72,200 | State Street Bank and Trust | 5/15/19 | (1,205 | ) | |||
NOK | 656,000 | USD | 84,045 | State Street Bank and Trust | 5/15/19 | (1,028 | ) | |||
USD | 293,064 | NOK | 2,279,000 | State Street Bank and Trust | 5/16/18 | 8,859 | ||||
USD | 83,017 | NOK | 656,000 | State Street Bank and Trust | 7/18/18 | 1,014 | ||||
USD | 298,499 | NOK | 2,279,000 | State Street Bank and Trust | 5/15/19 | 10,088 | ||||
SEK | 5,821,000 | USD | 694,589 | State Street Bank and Trust | 5/16/18 | (29,205 | ) | |||
SEK | 1,048,000 | USD | 128,591 | State Street Bank and Trust | 5/15/19 | (5,045 | ) | |||
SEK | 2,200,000 | USD | 266,883 | State Street Bank and Trust | 5/15/19 | (7,530 | ) | |||
SEK | 2,573,000 | USD | 310,142 | State Street Bank and Trust | 5/15/19 | (6,817 | ) | |||
USD | 693,767 | SEK | 5,821,000 | State Street Bank and Trust | 5/16/18 | 28,384 | ||||
USD | 302,297 | SEK | 2,573,000 | State Street Bank and Trust | 7/18/18 | 6,701 | ||||
USD | 418,840 | SEK | 3,604,000 | State Street Bank and Trust | 7/18/18 | 4,798 | ||||
USD | 194,900 | SEK | 1,696,000 | State Street Bank and Trust | 7/18/18 | 57 | ||||
USD | 716,079 | SEK | 5,821,000 | State Street Bank and Trust | 5/15/19 | 29,853 | ||||
$ | 113,904 |
10
TOTAL RETURN SWAP AGREEMENTS* | |||||||||
Counterparty | Units | Reference Entity | Notional Amount | Value** | |||||
Purchased | |||||||||
Morgan Stanley Capital Services LLC | 4,076 | Accor SA | EUR | 185,500 | $ | 6,200 | |||
Morgan Stanley Capital Services LLC | 6,513 | ACS Actividades de Construccion y Servicios SA | EUR | 223,068 | 4,425 | ||||
Morgan Stanley Capital Services LLC | 486 | Aeroports de Paris | EUR | 80,823 | 9,083 | ||||
Morgan Stanley Capital Services LLC | 940 | Airbus SE | EUR | 87,258 | 4,733 | ||||
Morgan Stanley Capital Services LLC | 3,806 | AXA SA | EUR | 82,216 | 9,501 | ||||
Morgan Stanley Capital Services LLC | 314,489 | Banco Comercial Portugues SA | EUR | 86,363 | 633 | ||||
Morgan Stanley Capital Services LLC | 10,271 | Bankinter SA | EUR | 93,145 | (5,179 | ) | |||
Morgan Stanley Capital Services LLC | 966 | BNP Paribas SA | EUR | 58,425 | 3,890 | ||||
Morgan Stanley Capital Services LLC | 4,496 | Bouygues SA | EUR | 184,332 | 5,684 | ||||
Morgan Stanley Capital Services LLC | 4,202 | Carnival plc | GBP | 192,708 | 6,146 | ||||
Morgan Stanley Capital Services LLC | 3,090 | CRH plc | EUR | 85,691 | 6,178 | ||||
Morgan Stanley Capital Services LLC | 3,093 | CRH plc | GBP | 75,871 | 5,177 | ||||
Morgan Stanley Capital Services LLC | 2,269 | Eiffage | EUR | 207,112 | 19,362 | ||||
Morgan Stanley Capital Services LLC | 795 | Essilor International Cie Generale d'Optique SA | EUR | 87,139 | 2,953 | ||||
Morgan Stanley Capital Services LLC | 273 | Eurofins Scientific SE | EUR | 126,926 | (6,479 | ) | |||
Morgan Stanley Capital Services LLC | 1,972 | Euronext NV | EUR | 112,099 | 5,725 | ||||
Morgan Stanley Capital Services LLC | 197 | Kering | EUR | 75,992 | 21,869 | ||||
Morgan Stanley Capital Services LLC | 1,240 | L'Oreal | EUR | 235,743 | 12,279 | ||||
Morgan Stanley Capital Services LLC | 1,119 | LVMH Moet Hennessy Louis Vuitton SE | EUR | 314,509 | 9,684 | ||||
Morgan Stanley Capital Services LLC | 6,495 | Mondi plc | GBP | 126,225 | 6,947 | ||||
Morgan Stanley Capital Services LLC | 17,319 | Ocado Group plc | GBP | 91,278 | 1,423 | ||||
Morgan Stanley Capital Services LLC | 3,993 | Schneider Electric SE | EUR | 298,726 | (66 | ) | |||
Morgan Stanley Capital Services LLC | 5,631 | Smith & Nephew plc | GBP | 71,688 | 12,826 | ||||
Morgan Stanley Capital Services LLC | 4,859 | Smurfit Kappa Group plc | EUR | 175,674 | (6,279 | ) | |||
Morgan Stanley Capital Services LLC | 5,398 | TechnipFMC plc | EUR | 146,298 | 245 | ||||
Morgan Stanley Capital Services LLC | 1,828 | Ubisoft Entertainment | EUR | 125,724 | 22,387 | ||||
Morgan Stanley Capital Services LLC | 1,072 | Vinci SA | EUR | 86,919 | 2,071 | ||||
Morgan Stanley Capital Services LLC | 2,941 | Weir Group plc (The) | GBP | 64,060 | (1,973 | ) | |||
Morgan Stanley Capital Services LLC | 1,821 | Whitbread plc | GBP | 76,233 | 2,228 | ||||
$ | 161,673 |
* | 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. |
** Amount represents value and unrealized appreciation (depreciation).
11
NOTES TO SCHEDULE OF INVESTMENTS | ||
ADR | - | American Depositary Receipt |
CHF | - | Swiss Franc |
CVA | - | Certificaten Van Aandelen |
DKK | - | Danish Krone |
EUR | - | Euro |
GBP | - | British Pound |
NOK | - | Norwegian Krone |
SEK | - | Swedish Krona |
USD | - | United States Dollar |
(1) | Amount relates primarily to deposits with broker for securities sold short. |
(2) | Non-income producing. |
(3) | 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 $4,256,116. |
See Notes to Financial Statements.
12
Statement of Assets and Liabilities |
APRIL 30, 2018 (UNAUDITED) | |||
Assets | |||
Investment securities, at value (cost of $22,755,047) | $ | 26,189,503 | |
Cash | 41,404 | ||
Foreign currency holdings, at value (cost of $150,611) | 150,831 | ||
Deposits with broker for securities sold short | 5,708,998 | ||
Deposits with broker for swap agreements | 1,050,000 | ||
Deposits with broker for futures contracts | 312,058 | ||
Receivable for investments sold | 975,105 | ||
Receivable for capital shares sold | 162 | ||
Unrealized appreciation on forward foreign currency exchange contracts | 354,666 | ||
Swap agreements, at value | 181,649 | ||
Dividends and interest receivable | 60,029 | ||
35,024,405 | |||
Liabilities | |||
Securities sold short, at value (proceeds of $4,192,782) | 5,430,222 | ||
Written options, at value (premiums received $30,400) | 16,326 | ||
Payable for investments purchased | 415,500 | ||
Payable for variation margin on futures contracts | 10,881 | ||
Unrealized depreciation on forward foreign currency exchange contracts | 240,762 | ||
Swap agreements, at value | 19,976 | ||
Accrued management fees | 79,870 | ||
Distribution and service fees payable | 9,445 | ||
Dividend expense payable on securities sold short | 2,414 | ||
6,225,396 | |||
Net Assets | $ | 28,799,009 | |
Net Assets Consist of: | |||
Capital (par value and paid-in surplus) | $ | 24,725,753 | |
Accumulated net investment loss | (654,212 | ) | |
Undistributed net realized gain | 2,327,274 | ||
Net unrealized appreciation | 2,400,194 | ||
$ | 28,799,009 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | ||||
Investor Class, $0.01 Par Value | $11,789,981 | 1,091,626 | $10.80 | |||
I Class, $0.01 Par Value | $3,708,001 | 341,704 | $10.85 | |||
Y Class, $0.01 Par Value | $5,303 | 487 | $10.89 | |||
A Class, $0.01 Par Value | $5,571,695 | 519,144 | $10.73* | |||
C Class, $0.01 Par Value | $5,466,830 | 518,510 | $10.54 | |||
R Class, $0.01 Par Value | $1,125,606 | 105,477 | $10.67 | |||
R6 Class, $0.01 Par Value | $1,131,593 | 103,909 | $10.89 |
*Maximum offering price $11.38 (net asset value divided by 0.9425).
See Notes to Financial Statements.
13
Statement of Operations |
FOR THE SIX MONTHS ENDED APRIL 30, 2018 (UNAUDITED) | |||
Investment Income (Loss) | |||
Income: | |||
Dividends (net of foreign taxes withheld of $14,834) | $ | 221,277 | |
Interest | 137,295 | ||
358,572 | |||
Expenses: | |||
Dividend expense on securities sold short | 54,624 | ||
Fees and charges on borrowings for securities sold short | 55,135 | ||
Management fees | 566,626 | ||
Distribution and service fees: | |||
A Class | 11,216 | ||
C Class | 44,121 | ||
R Class | 4,489 | ||
Directors' fees and expenses | 430 | ||
Other expenses | 1,309 | ||
737,950 | |||
Fees waived(1) | (60,425 | ) | |
677,525 | |||
Net investment income (loss) | (318,953 | ) | |
Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investment transactions | 2,256,585 | ||
Securities sold short transactions | 672,068 | ||
Forward foreign currency exchange contract transactions | (12,592 | ) | |
Futures contract transactions | 45,507 | ||
Swap agreement transactions | 43,758 | ||
Written options contract transactions | 4,721 | ||
Foreign currency translation transactions | (120,672 | ) | |
2,889,375 | |||
Change in net unrealized appreciation (depreciation) on: | |||
Investments | (3,407,293 | ) | |
Securities sold short | 378,467 | ||
Forward foreign currency exchange contracts | (58,988 | ) | |
Futures contracts | 38,736 | ||
Swap agreements | 3,652 | ||
Written options contracts | 14,074 | ||
Translation of assets and liabilities in foreign currencies | 39,245 | ||
(2,992,107 | ) | ||
Net realized and unrealized gain (loss) | (102,732 | ) | |
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | (421,685 | ) |
(1) | Amount consists of $23,244, $7,190, $7, $11,216, $11,030, $2,245 and $5,493 for the Investor Class, |
I Class, Y Class, A Class, C Class, R Class and R6 Class, respectively.
See Notes to Financial Statements.
14
Statement of Changes in Net Assets |
SIX MONTHS ENDED APRIL 30, 2018 (UNAUDITED) AND YEAR ENDED OCTOBER 31, 2017 | ||||||
Increase (Decrease) in Net Assets | April 30, 2018 | October 31, 2017 | ||||
Operations | ||||||
Net investment income (loss) | $ | (318,953 | ) | $ | (864,828 | ) |
Net realized gain (loss) | 2,889,375 | 3,008,710 | ||||
Change in net unrealized appreciation (depreciation) | (2,992,107 | ) | 3,717,529 | |||
Net increase (decrease) in net assets resulting from operations | (421,685 | ) | 5,861,411 | |||
Distributions to Shareholders | ||||||
From net realized gains: | ||||||
Investor Class | (551,994 | ) | — | |||
I Class | (171,279 | ) | — | |||
Y Class | (158 | ) | — | |||
A Class | (270,366 | ) | — | |||
C Class | (270,074 | ) | — | |||
R Class | (54,352 | ) | — | |||
R6 Class | (131,832 | ) | — | |||
Decrease in net assets from distributions | (1,450,055 | ) | — | |||
Capital Share Transactions | ||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | (18,233,721 | ) | (9,837,674 | ) | ||
Net increase (decrease) in net assets | (20,105,461 | ) | (3,976,263 | ) | ||
Net Assets | ||||||
Beginning of period | 48,904,470 | 52,880,733 | ||||
End of period | $ | 28,799,009 | $ | 48,904,470 | ||
Accumulated net investment loss | $ | (654,212 | ) | $ | (335,259 | ) |
See Notes to Financial Statements.
15
Notes to Financial Statements |
APRIL 30, 2018 (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, 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 at the settlement price 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.
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
16
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 collateral requirements on short sales, futures contracts, options contracts, forward commitments, swap agreements and certain foreign currency exchange contracts.
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
17
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 consultant for the fund. PWP provides ACIM with information regarding its views
with respect to current and potential managers for the fund, views on portfolio allocation and alternative
investment strategies, and general market insights. PWP will not have investment discretion with respect to
the fund and will not provide advisory services to the fund. The fund’s subadvisors at the period end were Sirios Capital Management, L.P., Three Bridges Capital, LP and Columbia Management Investment Advisers, LLC. ACIM determines the percentage of the fund’s portfolio allocated to each subadvisor 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 owns 97% of the shares of the fund. Related parties do not invest in the fund for the purpose of exercising management or control.
Management Fees — The corporation has entered into a management agreement with ACIM, under which ACIM provides the fund with investment advisory and management services in exchange for a single, unified management fee (the fee) per class. The agreement provides that all expenses of managing and operating the fund, except distribution and service fees, expenses on securities sold short, brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), and extraordinary expenses, will be paid by ACIM. The fee is computed and accrued daily based on each class's daily net assets and paid monthly in arrears. The difference in the fee among the classes is a result of their separate arrangements for non-Rule 12b-1 shareholder services. It is not the result of any difference in advisory or custodial fees or other expenses related to the management of the fund’s assets, which do not vary by class. During the period ended April 30, 2018, the investment advisor agreed to waive 0.25% of the fund's management fee. The investment advisor expects this waiver to continue until February 28, 2019 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, 2018 are as follows:
Annual Management Fee | Effective Annual Management Fee After Waiver | |
Investor Class | 2.40% | 2.15% |
I Class | 2.20% | 1.95% |
Y Class | 2.05% | 1.80% |
A Class | 2.40% | 2.15% |
C Class | 2.40% | 2.15% |
R Class | 2.40% | 2.15% |
R6 Class | 2.05% | 1.80% |
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%.
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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, 2018 are detailed in the Statement of Operations.
Directors' Fees and Expenses — The Board of Directors is responsible for overseeing the investment advisor’s management and operations of the fund. The directors receive detailed information about the fund and its investment advisor regularly throughout the year, and meet at least quarterly with management of the investment advisor to review reports about fund operations. The fund’s officers do not receive compensation from the fund.
4. Investment Transactions
Purchases and sales of investment securities and securities sold short, excluding short-term investments, for the period ended April 30, 2018 were $56,808,616 and $67,589,860, respectively.
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended April 30, 2018 | Year ended October 31, 2017(1) | |||||||||
Shares | Amount | Shares | Amount | |||||||
Investor Class/Shares Authorized | 70,000,000 | 70,000,000 | ||||||||
Sold | 41,639 | $ | 460,744 | 91,226 | $ | 970,471 | ||||
Issued in reinvestment of distributions | 50,549 | 551,994 | — | — | ||||||
Redeemed | (662,503 | ) | (7,244,745 | ) | (436,994 | ) | (4,695,341 | ) | ||
(570,315 | ) | (6,232,007 | ) | (345,768 | ) | (3,724,870 | ) | |||
I Class/Shares Authorized | 40,000,000 | 40,000,000 | ||||||||
Sold | 2,299 | 26,138 | — | — | ||||||
Issued in reinvestment of distributions | 15,627 | 171,279 | — | — | ||||||
Redeemed | (189,957 | ) | (2,085,728 | ) | (114,744 | ) | (1,237,526 | ) | ||
(172,031 | ) | (1,888,311 | ) | (114,744 | ) | (1,237,526 | ) | |||
Y Class/Shares Authorized | 50,000,000 | 50,000,000 | ||||||||
Sold | — | — | 473 | 5,000 | ||||||
Issued in reinvestment of distributions | 14 | 158 | — | — | ||||||
14 | 158 | 473 | 5,000 | |||||||
A Class/Shares Authorized | 35,000,000 | 35,000,000 | ||||||||
Issued in reinvestment of distributions | 24,896 | 270,366 | — | — | ||||||
Redeemed | (316,689 | ) | (3,441,855 | ) | (191,064 | ) | (2,045,472 | ) | ||
(291,793 | ) | (3,171,489 | ) | (191,064 | ) | (2,045,472 | ) | |||
C Class/Shares Authorized | 35,000,000 | 35,000,000 | ||||||||
Issued in reinvestment of distributions | 25,240 | 270,074 | — | — | ||||||
Redeemed | (316,789 | ) | (3,381,125 | ) | (190,764 | ) | (2,019,027 | ) | ||
(291,549 | ) | (3,111,051 | ) | (190,764 | ) | (2,019,027 | ) | |||
R Class/Shares Authorized | 20,000,000 | 20,000,000 | ||||||||
Sold | 1,487 | 16,385 | 476 | 5,059 | ||||||
Issued in reinvestment of distributions | 5,028 | 54,352 | — | — | ||||||
Redeemed | (63,690 | ) | (687,872 | ) | (38,197 | ) | (407,398 | ) | ||
(57,175 | ) | (617,135 | ) | (37,721 | ) | (402,339 | ) | |||
R6 Class/Shares Authorized | 30,000,000 | 30,000,000 | ||||||||
Issued in reinvestment of distributions | 11,985 | 131,832 | — | — | ||||||
Redeemed | (303,494 | ) | (3,345,718 | ) | (38,260 | ) | (413,440 | ) | ||
(291,509 | ) | (3,213,886 | ) | (38,260 | ) | (413,440 | ) | |||
Net increase (decrease) | (1,674,358 | ) | $ | (18,233,721 | ) | (917,848 | ) | $ | (9,837,674 | ) |
(1) | April 10, 2017 (commencement of sale) through October 31, 2017 for the Y Class. |
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6. Fair Value Measurements
The fund’s investments valuation process is based on several considerations and may use multiple inputs to determine the fair value of the investments held by the fund. In conformity with accounting principles generally accepted in the United States of America, the inputs used to determine a valuation are classified into three broad levels.
• | Level 1 valuation inputs consist of unadjusted quoted prices in an active market for identical investments. |
• | Level 2 valuation inputs consist of direct or indirect observable market data (including quoted prices for comparable investments, evaluations of subsequent market events, interest rates, prepayment speeds, credit risk, etc.). These inputs also consist of quoted prices for identical investments initially expressed in local currencies that are adjusted through translation into U.S. dollars. |
• | Level 3 valuation inputs consist of unobservable data (including a fund’s own assumptions). |
The level classification is based on the lowest level input that is significant to the fair valuation measurement. The valuation inputs are not necessarily an indication of the risks associated with investing in these securities or other financial instruments. 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 | ||||||||
Automobiles | — | $ | 374,824 | — | ||||
Banks | — | 522,970 | — | |||||
Chemicals | — | 224,298 | — | |||||
Communications Equipment | $ | 388,843 | 178,758 | — | ||||
Electrical Equipment | — | 299,638 | — | |||||
Electronic Equipment, Instruments and Components | 70,104 | 113,555 | — | |||||
Food Products | — | 107,846 | — | |||||
Health Care Equipment and Supplies | — | 378,032 | — | |||||
Industrial Conglomerates | — | 108,697 | — | |||||
Insurance | — | 599,288 | — | |||||
Machinery | — | 547,771 | — | |||||
Multi-Utilities | — | 110,088 | — | |||||
Real Estate Management and Development | — | 110,532 | — | |||||
Semiconductors and Semiconductor Equipment | 7,251,436 | 391,629 | — | |||||
Software | 2,706,916 | 464,903 | — | |||||
Textiles, Apparel and Luxury Goods | — | 559,431 | — | |||||
Tobacco | — | 133,327 | — | |||||
Other Industries | 5,416,884 | — | — | |||||
Temporary Cash Investments | 5,129,733 | — | — | |||||
$ | 20,963,916 | $ | 5,225,587 | — | ||||
Other Financial Instruments | ||||||||
Swap Agreements | — | $ | 181,649 | — | ||||
Forward Foreign Currency Exchange Contracts | — | 354,666 | — | |||||
— | $ | 536,315 | — |
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Level 1 | Level 2 | Level 3 | ||||||
Liabilities | ||||||||
Securities Sold Short | ||||||||
Exchange-Traded Funds | $ | 2,971,884 | — | — | ||||
Common Stocks | ||||||||
Pharmaceuticals | — | $ | 292,951 | — | ||||
Other Industries | 2,165,387 | — | — | |||||
$ | 5,137,271 | $ | 292,951 | — | ||||
Other Financial Instruments | ||||||||
Futures Contracts | — | $ | 124,365 | — | ||||
Swap Agreements | — | 19,976 | — | |||||
Forward Foreign Currency Exchange Contracts | — | 240,762 | — | |||||
Written Options Contracts | $ | 16,326 | — | — | ||||
$ | 16,326 | $ | 385,103 | — |
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 27 purchased options contracts and 57 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 notional exposure to these equity price risk derivative instruments held during the period was $436 futures contracts purchased and $1,729 futures contracts sold.
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
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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 421,737.
Foreign Currency Risk — The fund is subject to foreign currency exchange rate risk in the normal course of pursuing its investment objectives. The value of foreign investments held by a fund may be significantly affected by changes in foreign currency exchange rates. The dollar value of a foreign security generally decreases when the value of the dollar rises against the foreign currency in which the security is denominated and tends to increase when the value of the dollar declines against such foreign currency. A fund may enter into forward foreign currency exchange contracts to reduce a fund's exposure to foreign currency exchange rate fluctuations or to gain exposure to the fluctuations in the value of foreign currencies. The net U.S. dollar value of foreign currency underlying all contractual commitments held by a fund and the resulting unrealized appreciation or depreciation are determined daily. Realized gain or loss is recorded upon the termination of the contract. Net realized and unrealized gains or losses occurring during the holding period of forward foreign currency exchange contracts are a component of net realized gain (loss) on forward foreign currency exchange contract transactions and change in net unrealized appreciation (depreciation) on forward foreign currency exchange contracts, respectively. A fund bears the risk of an unfavorable change in the foreign currency exchange rate underlying the forward contract. Additionally, losses, up to the fair value, may arise if the counterparties do not perform under the contract terms. The fund's average U.S. dollar exposure to foreign currency risk derivative instruments held during the period was $14,268,460.
Value of Derivative Instruments as of April 30, 2018
Asset Derivatives | Liability Derivatives | |||||||
Type of Risk Exposure | Location on Statement of Assets and Liabilities | Value | Location on Statement of Assets and Liabilities | Value | ||||
Equity Price Risk | Receivable for variation margin on futures contracts* | — | Payable for variation margin on futures contracts* | $ | 10,881 | |||
Equity Price Risk | Swap agreements | $ | 181,649 | Swap agreements | 19,976 | |||
Equity Price Risk | Written options | — | Written options | 16,326 | ||||
Foreign Currency Risk | Unrealized appreciation on forward foreign currency exchange contracts | 354,666 | Unrealized depreciation on forward foreign currency exchange contracts | 240,762 | ||||
$ | 536,315 | $ | 287,945 |
* | 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, 2018
Net Realized Gain (Loss) | Change in Net Unrealized Appreciation (Depreciation) | |||||||
Type of Risk Exposure | Location on Statement of Operations | Value | Location on Statement of Operations | Value | ||||
Equity Price Risk | Net realized gain (loss) on futures contract transactions | $ | 45,507 | Change in net unrealized appreciation (depreciation) on futures contracts | $ | 38,736 | ||
Equity Price Risk | Net realized gain (loss) on investment transactions | (12,434 | ) | Change in net unrealized appreciation (depreciation) on investments | — | |||
Equity Price Risk | Net realized gain (loss) on written options contract transactions | 4,721 | Change in net unrealized appreciation (depreciation) on written options contracts | 14,074 | ||||
Equity Price Risk | Net realized gain (loss) on swap agreement transactions | 43,758 | Change in net unrealized appreciation (depreciation) on swap agreements | 3,652 | ||||
Foreign Currency Risk | Net realized gain (loss) on forward foreign currency exchange contract transactions | (12,592 | ) | Change in net unrealized appreciation (depreciation) on forward foreign currency exchange contracts | (58,988 | ) | ||
$ | 68,960 | $ | (2,526 | ) |
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Counterparty Risk — The fund is subject to counterparty risk, or the risk that an institution will fail to perform its obligations to the fund. The investment advisor attempts to minimize counterparty risk prior to entering into transactions by performing extensive reviews of the creditworthiness of all potential counterparties. The fund may also enter into agreements that provide provisions for legally enforceable master netting arrangements to manage the credit risk between counterparties related to forward foreign currency exchange contracts and/or over-the-counter swap agreements. A master netting arrangement provides for the net settlement of multiple contracts with a single counterparty through a single payment in the event of default or termination of any one contract. To mitigate counterparty risk, the fund may receive assets or be required to pledge assets at the custodian bank or with a broker as designated under prescribed collateral provisions.
The fund does not offset assets and liabilities subject to master netting arrangements on the Statement of Assets and Liabilities for financial reporting purposes. The fund’s asset derivatives and liability derivatives that are subject to legally enforceable offsetting arrangements as of period end were as follows:
Counterparty | Gross Amount on Statement of Assets and Liabilities | Amount Eligible for Offset | Collateral | Net Exposure* | |||||||
Assets | |||||||||||
State Street Bank and Trust | $ | 354,666 | $ | (240,762 | ) | — | $ | 113,904 | |||
Morgan Stanley Capital Services LLC | 181,649 | (19,976 | ) | — | 161,673 | ||||||
$ | 536,315 | $ | (260,738 | ) | — | $ | 275,577 | ||||
Liabilities | |||||||||||
State Street Bank and Trust | $ | 240,762 | $ | (240,762 | ) | — | — | ||||
Morgan Stanley Capital Services LLC | 19,976 | (19,976 | ) | — | — | ||||||
$ | 260,738 | $ | (260,738 | ) | — | — |
* The net exposure represents the amount receivable from the counterparty or amount payable to the counterparty in the event of default or termination.
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.
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.
23
As of period end, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $ | 22,821,362 | |
Gross tax appreciation of investments | $ | 3,891,786 | |
Gross tax depreciation of investments | (523,645 | ) | |
Net tax appreciation (depreciation) of investments | 3,368,141 | ||
Gross tax appreciation on securities sold short | 19,258 | ||
Gross tax depreciation on securities sold short | (1,281,704 | ) | |
Net tax appreciation (depreciation) of investments | $ | 2,105,695 |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales.
10. Subsequent Events
On May 30, 2018, the Board of Directors approved a plan of liquidation for the fund. The liquidation date is
expected to be July 30, 2018.
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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: | Distributions From: | Ratio to Average Net Assets of: | ||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Operating Expenses (before expense waiver) | Operating Expenses (excluding expenses on securities sold short) | Net Investment Income (Loss) | Net Investment Income (Loss) (before expense waiver) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
Investor Class | ||||||||||||||||||
2018(4) | $11.27 | (0.06) | (0.08) | (0.14) | — | (0.33) | (0.33) | $10.80 | (1.24)% | 2.61%(5) | 2.86%(5) | 2.16%(5) | (1.13)%(5) | (1.38)%(5) | 165% | $11,790 | ||
2017 | $10.05 | (0.15) | 1.37 | 1.22 | — | — | — | $11.27 | 12.14% | 2.78% | 2.81% | 2.39% | (1.45)% | (1.48)% | 314% | $18,729 | ||
2016 | $10.11 | (0.15) | 0.17 | 0.02 | (0.08) | — | (0.08) | $10.05 | 0.18% | 3.14% | 3.14% | 2.42% | (1.55)% | (1.55)% | 410% | $20,168 | ||
2015(6) | $10.00 | (0.01) | 0.12 | 0.11 | — | — | — | $10.11 | 1.10% | 2.75%(5) | 2.75%(5) | 2.40%(5) | (2.28)%(5) | (2.28)%(5) | 81% | $20,227 | ||
I Class | ||||||||||||||||||
2018(4) | $11.31 | (0.05) | (0.08) | (0.13) | — | (0.33) | (0.33) | $10.85 | (1.15)% | 2.41%(5) | 2.66%(5) | 1.96%(5) | (0.93)%(5) | (1.18)%(5) | 165% | $3,708 | ||
2017 | $10.06 | (0.13) | 1.38 | 1.25 | — | — | — | $11.31 | 12.43% | 2.58% | 2.61% | 2.19% | (1.25)% | (1.28)% | 314% | $5,810 | ||
2016 | $10.11 | (0.13) | 0.16 | 0.03 | (0.08) | — | (0.08) | $10.06 | 0.22% | 2.94% | 2.94% | 2.22% | (1.35)% | (1.35)% | 410% | $6,324 | ||
2015(6) | $10.00 | (0.01) | 0.12 | 0.11 | — | — | — | $10.11 | 1.20% | 2.55%(5) | 2.55%(5) | 2.20%(5) | (2.08)%(5) | (2.08)%(5) | 81% | $6,068 | ||
Y Class | ||||||||||||||||||
2018(4) | $11.34 | (0.04) | (0.08) | (0.12) | — | (0.33) | (0.33) | $10.89 | (1.06)% | 2.26%(5) | 2.51%(5) | 1.81%(5) | (0.78)%(5) | (1.03)%(5) | 165% | $5 | ||
2017(7) | $10.58 | (0.06) | 0.82 | 0.76 | — | — | — | $11.34 | 7.18% | 2.32%(5) | 2.38%(5) | 2.01%(5) | (1.07)%(5) | (1.13)%(5) | 314%(3) | $5 |
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) | Operating Expenses (excluding expenses on securities sold short) | Net Investment Income (Loss) | Net Investment Income (Loss) (before expense waiver) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
A Class | ||||||||||||||||||
2018(4) | $11.22 | (0.08) | (0.08) | (0.16) | — | (0.33) | (0.33) | $10.73 | (1.43)% | 2.86%(5) | 3.11%(5) | 2.41%(5) | (1.38)%(5) | (1.63)%(5) | 165% | $5,572 | ||
2017 | $10.02 | (0.18) | 1.38 | 1.20 | — | — | — | $11.22 | 11.98% | 3.03% | 3.06% | 2.64% | (1.70)% | (1.73)% | 314% | $9,097 | ||
2016 | $10.11 | (0.18) | 0.16 | (0.02) | (0.07) | — | (0.07) | $10.02 | (0.17)% | 3.39% | 3.39% | 2.67% | (1.80)% | (1.80)% | 410% | $10,044 | ||
2015(6) | $10.00 | (0.01) | 0.12 | 0.11 | — | — | — | $10.11 | 1.10% | 3.00%(5) | 3.00%(5) | 2.65%(5) | (2.53)%(5) | (2.53)%(5) | 81% | $10,112 | ||
C Class | ||||||||||||||||||
2018(4) | $11.06 | (0.11) | (0.08) | (0.19) | — | (0.33) | (0.33) | $10.54 | (1.73)% | 3.61%(5) | 3.86%(5) | 3.16%(5) | (2.13)%(5) | (2.38)%(5) | 165% | $5,467 | ||
2017 | $9.96 | (0.26) | 1.36 | 1.10 | — | — | — | $11.06 | 11.04% | 3.78% | 3.81% | 3.39% | (2.45)% | (2.48)% | 314% | $8,962 | ||
2016 | $10.11 | (0.25) | 0.16 | (0.09) | (0.06) | — | (0.06) | $9.96 | (0.92)% | 4.14% | 4.14% | 3.42% | (2.55)% | (2.55)% | 410% | $9,969 | ||
2015(6) | $10.00 | (0.01) | 0.12 | 0.11 | — | — | — | $10.11 | 1.10% | 3.75%(5) | 3.75%(5) | 3.40%(5) | (3.28)%(5) | (3.28)%(5) | 81% | $10,109 | ||
R Class | ||||||||||||||||||
2018(4) | $11.17 | (0.09) | (0.08) | (0.17) | — | (0.33) | (0.33) | $10.67 | (1.44)% | 3.11%(5) | 3.36%(5) | 2.66%(5) | (1.63)%(5) | (1.88)%(5) | 165% | $1,126 | ||
2017 | $10.00 | (0.20) | 1.37 | 1.17 | — | — | — | $11.17 | 11.60% | 3.28% | 3.31% | 2.89% | (1.95)% | (1.98)% | 314% | $1,816 | ||
2016 | $10.11 | (0.20) | 0.16 | (0.04) | (0.07) | — | (0.07) | $10.00 | (0.42)% | 3.64% | 3.64% | 2.92% | (2.05)% | (2.05)% | 410% | $2,004 | ||
2015(6) | $10.00 | (0.01) | 0.12 | 0.11 | — | — | — | $10.11 | 1.10% | 3.25%(5) | 3.25%(5) | 2.90%(5) | (2.78)%(5) | (2.78)%(5) | 81% | $2,022 | ||
R6 Class | ||||||||||||||||||
2018(4) | $11.34 | (0.04) | (0.08) | (0.12) | — | (0.33) | (0.33) | $10.89 | (1.06)% | 2.26%(5) | 2.51%(5) | 1.81%(5) | (0.78)%(5) | (1.03)%(5) | 165% | $1,132 | ||
2017 | $10.08 | (0.12) | 1.38 | 1.26 | — | — | — | $11.34 | 12.50% | 2.43% | 2.46% | 2.04% | (1.10)% | (1.13)% | 314% | $4,485 | ||
2016 | $10.11 | (0.11) | 0.16 | 0.05 | (0.08) | — | (0.08) | $10.08 | 0.45% | 2.79% | 2.79% | 2.07% | (1.20)% | (1.20)% | 410% | $4,370 | ||
2015(6) | $10.00 | (0.01) | 0.12 | 0.11 | — | — | — | $10.11 | 1.20% | 2.40%(5) | 2.40%(5) | 2.05%(5) | (1.93)%(5) | (1.93)%(5) | 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) | Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended October 31, 2017. |
(4) | Six months ended April 30, 2018 (unaudited). |
(5) | Annualized. |
(6) | October 15, 2015 (fund inception) through October 31, 2015. |
(7) | April 10, 2017 (commencement of sale) through October 31, 2017. |
See Notes to Financial Statements.
Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain retirement accounts are subject to federal income tax withholding, unless you elect not to have withholding apply*. Tax will be withheld on the total amount withdrawn even though you may be receiving amounts that are not subject to withholding, such as nondeductible contributions. In such case, excess amounts of withholding could occur. You may adjust your withholding election so that a greater or lesser amount will be withheld.
If you don’t want us to withhold on this amount, you must notify us to not withhold the federal income tax. You may notify us in writing or in certain situations by telephone or through other electronic means. For systematic withdrawals, your withholding election will remain in effect until revoked or changed by filing a new election. You have the right to revoke your election at any time and change your withholding percentage for future distributions.
Remember, even if you elect not to have income tax withheld, you are liable for paying income tax on the taxable portion of your withdrawal. If you elect not to have income tax withheld or you don’t have enough income tax withheld, you may be responsible for payment of estimated tax. You may incur penalties under the estimated tax rules if your withholding and estimated tax payments are not sufficient. You can reduce or defer the income tax on a distribution by directly or indirectly rolling such distribution over to another IRA or eligible plan. You should consult your tax advisor for additional information.
State tax will be withheld if, at the time of your distribution, your address is within one of the mandatory withholding states and you have federal income tax withheld (or as otherwise required by state law). State taxes will be withheld from your distribution in accordance with the respective state rules.
*Some 403(b), 457 and qualified retirement plan distributions may be subject to 20% mandatory withholding, as they are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
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.
28
Contact Us | americancentury.com | |
Automated Information Line | 1-800-345-8765 | |
Investor Services Representative | 1-800-345-2021 or 816-531-5575 | |
Investors Using Advisors | 1-800-378-9878 | |
Business, Not-For-Profit, Employer-Sponsored Retirement Plans | 1-800-345-3533 | |
Banks and Trust Companies, Broker-Dealers, Financial Professionals, Insurance Companies | 1-800-345-6488 | |
Telecommunications Relay Service for the Deaf | 711 | |
American Century 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. | ||
©2018 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-92369 1806 |
Semiannual Report | |
April 30, 2018 | |
Global Real Estate Fund | |
Investor Class (ARYVX) | |
I Class (ARYNX) | |
Y Class (ARYYX) | |
A Class (ARYMX) | |
C Class (ARYTX) | |
R Class (ARYWX) | |
R5 Class (ARYGX) | |
R6 Class (ARYDX) |
Table of Contents |
Any opinions expressed in this report reflect those of the author as of the date of the report, and do not necessarily represent the opinions of American Century Investments® or any other person in the American Century Investments organization. Any such opinions are subject to change at any time based upon market or other conditions and American Century Investments disclaims any responsibility to update such opinions. These opinions may not be relied upon as investment advice and, because investment decisions made by American Century Investments funds are based on numerous factors, may not be relied upon as an indication of trading intent on behalf of any American Century Investments fund. Security examples are used for representational purposes only and are not intended as recommendations to purchase or sell securities. Performance information for comparative indices and securities is provided to American Century Investments by third party vendors. To the best of American Century Investments’ knowledge, such information is accurate at the time of printing.
President’s Letter |
Jonathan Thomas
Dear Investor:
Thank you for reviewing this semiannual report for the six months ended April 30, 2018. It provides a market overview (below), followed by a schedule of fund investments and other financial information. For additional commentary and information on fund performance, plus other investment insights, we encourage you to visit our website, americancentury.com.
Volatility’s Return Restrains Rally
From rally to retreat, global financial markets experienced two distinct performance patterns during the six-month period. For the first three months, improving global growth, positive corporate earnings results, generally muted inflation, and rising, though still relatively low, interest rates supported equity market gains. U.S. stocks were notably strong, with the S&P 500 Index returning more than 10% for the three months ended January 31, 2018. U.S. Treasury yields edged higher, and interest-rate-sensitive assets, including U.S. fixed-income securities and real estate investment trusts (REITs), generated more-modest gains. Meanwhile, accommodative central bank policy continued to fuel gains among non-U.S. developed markets bonds, while a weaker U.S. dollar largely aided emerging markets bonds.
The backdrop changed swiftly and sharply in early February. U.S. stocks plunged after the U.S. Department of Labor announced wages grew at their fastest year-over-year pace in nine years. This news, coupled with other positive economic data and rising inflation expectations, pushed interest rates higher and triggered fears that the Federal Reserve (the Fed) would ramp up its rate-hike campaign. In addition, President Trump announced a tariff strategy that sparked fears of a global trade war. Volatility subsided somewhat by the end of the reporting period, as economic and inflation data and the Fed’s rate-hike strategy were generally aligned with investor expectations. Although returns for most global asset classes declined for the three months ended April 30, 2018, earlier gains were sufficient to keep results positive for the entire six-month period.
With economic growth improving, inflationary pressures mounting, Treasury yields rising, and volatility resurfacing, investors likely will face new opportunities and challenges in the months ahead. We believe this scenario warrants a disciplined, diversified, and risk-aware approach, using professionally managed portfolios in pursuit of investment goals. We appreciate your continued trust and confidence in us.
Sincerely,
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
2
Fund Characteristics |
APRIL 30, 2018 | |
Top Ten Holdings | % of net assets |
Prologis, Inc. | 3.8% |
Alexandria Real Estate Equities, Inc. | 3.3% |
Sumitomo Realty & Development Co. Ltd. | 2.9% |
Segro plc | 2.8% |
Extra Space Storage, Inc. | 2.8% |
Vonovia SE | 2.8% |
Host Hotels & Resorts, Inc. | 2.7% |
Invitation Homes, Inc. | 2.7% |
Sun Communities, Inc. | 2.5% |
Gecina SA | 2.5% |
Types of Investments in Portfolio | % of net assets |
Foreign Common Stocks | 53.8% |
Domestic Common Stocks | 45.2% |
Total Common Stocks | 99.0% |
Temporary Cash Investments | 1.3% |
Other Assets and Liabilities | (0.3)% |
Investments by Country | % of net assets |
United States | 45.2% |
Japan | 10.8% |
Hong Kong | 8.2% |
China | 6.1% |
United Kingdom | 5.9% |
Australia | 4.2% |
Germany | 4.0% |
France | 3.1% |
Singapore | 3.1% |
Canada | 2.5% |
Other Countries | 5.9% |
Cash and Equivalents* | 1.0% |
*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, 2017 to April 30, 2018.
Actual Expenses
The table provides information about actual account values and actual expenses for each class. You may use the information, together with the amount you invested, to estimate the expenses that you paid over the period. First, identify the share class you own. Then simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
If you hold Investor Class shares of any American Century Investments fund, or I Class shares of the American Century Diversified Bond Fund, in an American Century Investments account (i.e., not a financial intermediary or retirement plan account), American Century Investments may charge you a $12.50 semiannual account maintenance fee if the value of those shares is less than $10,000. We will redeem shares automatically in one of your accounts to pay the $12.50 fee. In determining your total eligible investment amount, we will include your investments in all personal accounts (including American Century Investments Brokerage accounts) registered under your Social Security number. Personal accounts include individual accounts, joint accounts, UGMA/UTMA accounts, personal trusts, Coverdell Education Savings Accounts and IRAs (including traditional, Roth, Rollover, SEP-, SARSEP- and SIMPLE-IRAs), and certain other retirement accounts. If you have only business, business retirement, employer-sponsored or American Century Investments Brokerage accounts, you are currently not subject to this fee. If you are subject to the Account Maintenance Fee, your account value could be reduced by the fee amount.
Hypothetical Example for Comparison Purposes
The table also provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio of each class of your fund and an assumed rate of return of 5% per year before expenses, which is not the actual return of a fund’s share class. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) or redemption/exchange fees. Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
4
Beginning Account Value 11/1/17 | Ending Account Value 4/30/18 | Expenses Paid During Period(1) 11/1/17 - 4/30/18 | Annualized Expense Ratio(1) | |
Actual | ||||
Investor Class | $1,000 | $1,030.00 | $5.59 | 1.11% |
I Class | $1,000 | $1,031.20 | $4.58 | 0.91% |
Y Class | $1,000 | $1,032.70 | $3.83 | 0.76% |
A Class | $1,000 | $1,028.20 | $6.84 | 1.36% |
C Class | $1,000 | $1,024.70 | $10.59 | 2.11% |
R Class | $1,000 | $1,027.30 | $8.09 | 1.61% |
R5 Class | $1,000 | $1,031.50 | $4.58 | 0.91% |
R6 Class | $1,000 | $1,031.90 | $3.83 | 0.76% |
Hypothetical | ||||
Investor Class | $1,000 | $1,019.29 | $5.56 | 1.11% |
I Class | $1,000 | $1,020.28 | $4.56 | 0.91% |
Y Class | $1,000 | $1,021.03 | $3.81 | 0.76% |
A Class | $1,000 | $1,018.05 | $6.81 | 1.36% |
C Class | $1,000 | $1,014.33 | $10.54 | 2.11% |
R Class | $1,000 | $1,016.81 | $8.05 | 1.61% |
R5 Class | $1,000 | $1,020.28 | $4.56 | 0.91% |
R6 Class | $1,000 | $1,021.03 | $3.81 | 0.76% |
(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. Annualized expense ratio reflects actual expenses, including any applicable fee waivers or expense reimbursements and excluding any acquired fund fees and expenses. |
5
Schedule of Investments |
APRIL 30, 2018 (UNAUDITED)
Shares | Value | ||||
COMMON STOCKS — 99.0% | |||||
Australia — 4.2% | |||||
Charter Hall Group | 272,372 | $ | 1,205,466 | ||
Goodman Group | 279,168 | 1,902,223 | |||
Scentre Group | 120,660 | 365,179 | |||
3,472,868 | |||||
Belgium — 0.4% | |||||
VGP NV | 4,356 | 337,290 | |||
Brazil — 0.6% | |||||
Iguatemi Empresa de Shopping Centers SA | 47,500 | 486,091 | |||
Canada — 2.5% | |||||
Allied Properties Real Estate Investment Trust | 28,313 | 914,696 | |||
Brookfield Asset Management, Inc., Class A | 17,091 | 677,410 | |||
Tricon Capital Group, Inc. | 53,677 | 420,570 | |||
2,012,676 | |||||
China — 6.1% | |||||
China Lodging Group Ltd. ADR | 2,054 | 286,862 | |||
China Resources Land Ltd. | 264,000 | 990,964 | |||
China Vanke Co. Ltd., H Shares | 69,600 | 288,727 | |||
CIFI Holdings Group Co. Ltd. | 568,000 | 446,700 | |||
Country Garden Holdings Co. Ltd. | 491,000 | 1,000,340 | |||
KWG Property Holding Ltd. | 312,500 | 420,655 | |||
Longfor Properties Co. Ltd. | 294,500 | 880,085 | |||
Shimao Property Holdings Ltd. | 240,500 | 636,295 | |||
4,950,628 | |||||
France — 3.1% | |||||
Gecina SA | 11,728 | 2,026,851 | |||
Nexity SA | 8,458 | 527,110 | |||
2,553,961 | |||||
Germany — 4.0% | |||||
Aroundtown SA | 131,312 | 1,050,029 | |||
Vonovia SE | 45,088 | 2,261,192 | |||
3,311,221 | |||||
Hong Kong — 8.2% | |||||
CK Asset Holdings Ltd. | 124,000 | 1,068,965 | |||
Link REIT | 207,000 | 1,828,889 | |||
New World Development Co. Ltd. | 457,000 | 670,852 | |||
Sun Hung Kai Properties Ltd. | 85,000 | 1,364,529 | |||
Wharf Real Estate Investment Co. Ltd. | 135,000 | 1,013,431 | |||
Wynn Macau Ltd. | 206,800 | 764,102 | |||
6,710,768 | |||||
India — 0.3% | |||||
Godrej Properties Ltd.(1) | 19,966 | 239,943 | |||
Japan — 10.8% | |||||
GLP J-Reit | 1,071 | 1,148,948 | |||
Invesco Office J-Reit, Inc. | 4,444 | 565,490 | |||
Japan Hotel REIT Investment Corp. | 2,292 | 1,734,706 |
6
Shares | Value | ||||
Mitsui Fudosan Co. Ltd. | 74,400 | $ | 1,907,572 | ||
Orix JREIT, Inc. | 714 | 1,093,064 | |||
Sumitomo Realty & Development Co. Ltd. | 60,000 | 2,379,166 | |||
8,828,946 | |||||
Mexico — 0.6% | |||||
Fibra Uno Administracion SA de CV | 311,088 | 515,152 | |||
Netherlands — 1.2% | |||||
InterXion Holding NV(1) | 14,866 | 966,587 | |||
Singapore — 3.1% | |||||
CapitaLand Commercial Trust | 391,100 | 535,349 | |||
CapitaLand Ltd. | 223,500 | 630,300 | |||
City Developments Ltd. | 57,300 | 545,899 | |||
UOL Group Ltd. | 120,400 | 795,004 | |||
2,506,552 | |||||
Spain — 1.9% | |||||
Hispania Activos Inmobiliarios SOCIMI SA | 20,285 | 430,249 | |||
Inmobiliaria Colonial Socimi SA | 63,727 | 740,675 | |||
Neinor Homes SA(1) | 21,279 | 410,712 | |||
1,581,636 | |||||
Thailand — 0.9% | |||||
Central Pattana PCL | 280,900 | 716,430 | |||
United Kingdom — 5.9% | |||||
Safestore Holdings plc | 155,844 | 1,171,842 | |||
Segro plc | 261,356 | 2,320,812 | |||
UNITE Group plc (The) | 118,264 | 1,355,158 | |||
4,847,812 | |||||
United States — 45.2% | |||||
Agree Realty Corp. | 12,329 | 602,641 | |||
Alexandria Real Estate Equities, Inc. | 21,344 | 2,658,822 | |||
Camden Property Trust | 12,549 | 1,071,685 | |||
CyrusOne, Inc. | 12,729 | 682,147 | |||
Duke Realty Corp. | 45,117 | 1,222,671 | |||
Equinix, Inc. | 2,960 | 1,245,538 | |||
Essex Property Trust, Inc. | 8,162 | 1,956,350 | |||
Extra Space Storage, Inc. | 25,486 | 2,283,291 | |||
GGP, Inc. | 34,903 | 697,711 | |||
HCP, Inc. | 51,332 | 1,199,115 | |||
Healthcare Realty Trust, Inc. | 35,751 | 994,950 | |||
Hilton Worldwide Holdings, Inc. | 12,676 | 999,376 | |||
Host Hotels & Resorts, Inc. | 113,886 | 2,227,610 | |||
Invitation Homes, Inc. | 94,823 | 2,194,204 | |||
Park Hotels & Resorts, Inc. | 48,741 | 1,402,766 | |||
Prologis, Inc. | 48,095 | 3,121,846 | |||
Rayonier, Inc. | 45,180 | 1,680,244 | |||
Regency Centers Corp. | 11,476 | 675,363 | |||
Sabra Health Care REIT, Inc. | 41,654 | 762,685 | |||
SBA Communications Corp.(1) | 6,322 | 1,012,974 | |||
Simon Property Group, Inc. | 8,562 | 1,338,583 | |||
Starwood Property Trust, Inc. | 31,209 | 654,141 | |||
STORE Capital Corp. | 40,005 | 1,009,326 | |||
Sun Communities, Inc. | 21,949 | 2,059,914 |
7
Shares | Value | ||||
UDR, Inc. | 41,717 | $ | 1,508,070 | ||
Weyerhaeuser Co. | 45,640 | 1,678,639 | |||
36,940,662 | |||||
TOTAL COMMON STOCKS (Cost $71,739,050) | 80,979,223 | ||||
TEMPORARY CASH INVESTMENTS — 1.3% | |||||
Repurchase Agreement, BMO Capital Markets Corp., (collateralized by various U.S. Treasury obligations, 0.875% - 3.75%, 7/31/18 - 8/15/43, valued at $595,058), in a joint trading account at 1.46%, dated 4/30/18, due 5/1/18 (Delivery value $582,541) | 582,517 | ||||
Repurchase Agreement, Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 2.00%, 11/25/26, valued at $496,782), at 0.74%, dated 4/30/18, due 5/1/18 (Delivery value $485,010) | 485,000 | ||||
State Street Institutional U.S. Government Money Market Fund, Premier Class | 999 | 999 | |||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $1,068,516) | 1,068,516 | ||||
TOTAL INVESTMENT SECURITIES — 100.3% (Cost $72,807,566) | 82,047,739 | ||||
OTHER ASSETS AND LIABILITIES — (0.3)% | (248,119 | ) | |||
TOTAL NET ASSETS — 100.0% | $ | 81,799,620 |
SECTOR ALLOCATION | ||
(as a % of net assets) | ||
Diversified | 30.8 | % |
Residential | 20.5 | % |
Industrial | 12.3 | % |
Retail | 9.4 | % |
Office | 9.1 | % |
Lodging/Resorts | 9.1 | % |
Self Storage | 4.2 | % |
Health Care | 3.6 | % |
Cash and Equivalents* | 1.0 | % |
*Includes temporary cash investments and other assets and liabilities.
NOTES TO SCHEDULE OF INVESTMENTS | ||
ADR | - | American Depositary Receipt |
(1) | Non-income producing. |
See Notes to Financial Statements.
8
Statement of Assets and Liabilities |
APRIL 30, 2018 (UNAUDITED) | |||
Assets | |||
Investment securities, at value (cost of $72,807,566) | $ | 82,047,739 | |
Foreign currency holdings, at value (cost of $11) | 11 | ||
Receivable for investments sold | 1,543,539 | ||
Receivable for capital shares sold | 104,205 | ||
Dividends and interest receivable | 182,769 | ||
Other assets | 333 | ||
83,878,596 | |||
Liabilities | |||
Payable for investments purchased | 1,835,947 | ||
Payable for capital shares redeemed | 167,427 | ||
Accrued management fees | 72,516 | ||
Distribution and service fees payable | 3,086 | ||
2,078,976 | |||
Net Assets | $ | 81,799,620 | |
Net Assets Consist of: | |||
Capital (par value and paid-in surplus) | $ | 76,096,013 | |
Distributions in excess of net investment income | (1,135,688 | ) | |
Accumulated net realized loss | (2,396,826 | ) | |
Net unrealized appreciation | 9,236,121 | ||
$ | 81,799,620 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | ||||
Investor Class, $0.01 Par Value | $67,007,814 | 5,701,147 | $11.75 | |||
I Class, $0.01 Par Value | $7,525,805 | 640,396 | $11.75 | |||
Y Class, $0.01 Par Value | $469,812 | 39,965 | $11.76 | |||
A Class, $0.01 Par Value | $2,516,353 | 214,093 | $11.75* | |||
C Class, $0.01 Par Value | $3,049,817 | 259,747 | $11.74 | |||
R Class, $0.01 Par Value | $164,765 | 14,010 | $11.76 | |||
R5 Class, $0.01 Par Value | $5,490 | 467 | $11.76 | |||
R6 Class, $0.01 Par Value | $1,059,764 | 90,200 | $11.75 |
*Maximum offering price $12.47 (net asset value divided by 0.9425).
See Notes to Financial Statements.
9
Statement of Operations |
FOR THE SIX MONTHS ENDED APRIL 30, 2018 (UNAUDITED) | |||
Investment Income (Loss) | |||
Income: | |||
Dividends (net of foreign taxes withheld of $53,977) | $ | 1,073,616 | |
Interest | 2,867 | ||
1,076,483 | |||
Expenses: | |||
Management fees | 485,302 | ||
Distribution and service fees: | |||
A Class | 3,345 | ||
C Class | 16,093 | ||
R Class | 362 | ||
Directors' fees and expenses | 678 | ||
Other expenses | 104 | ||
505,884 | |||
Fees waived(1) | (37,079 | ) | |
468,805 | |||
Net investment income (loss) | 607,678 | ||
Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investment transactions | 1,268,686 | ||
Foreign currency translation transactions | (6,085 | ) | |
1,262,601 | |||
Change in net unrealized appreciation (depreciation) on: | |||
Investments | 616,870 | ||
Translation of assets and liabilities in foreign currencies | (2,194 | ) | |
614,676 | |||
Net realized and unrealized gain (loss) | 1,877,277 | ||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 2,484,955 |
(1) | Amount consists of $30,618, $3,277, $58, $1,204, $1,448, $65, $2 and $407 for Investor Class, I Class, Y Class, A Class, C Class, R Class, R5 Class and R6 Class, respectively. |
See Notes to Financial Statements.
10
Statement of Changes in Net Assets |
SIX MONTHS ENDED APRIL 30, 2018 (UNAUDITED) AND YEAR ENDED OCTOBER 31, 2017 | ||||||
Increase (Decrease) in Net Assets | April 30, 2018 | October 31, 2017 | ||||
Operations | ||||||
Net investment income (loss) | $ | 607,678 | $ | 1,929,527 | ||
Net realized gain (loss) | 1,262,601 | 272,372 | ||||
Change in net unrealized appreciation (depreciation) | 614,676 | 4,157,610 | ||||
Net increase (decrease) in net assets resulting from operations | 2,484,955 | 6,359,509 | ||||
Distributions to Shareholders | ||||||
From net investment income: | ||||||
Investor Class | (2,338,576 | ) | (2,730,807 | ) | ||
I Class | (245,001 | ) | (110,990 | ) | ||
Y Class | (196 | ) | — | |||
A Class | (87,066 | ) | (635,362 | ) | ||
C Class | (77,272 | ) | (231,702 | ) | ||
R Class | (3,174 | ) | (3,707 | ) | ||
R5 Class | (190 | ) | — | |||
R6 Class | (33,507 | ) | (410,259 | ) | ||
Decrease in net assets from distributions | (2,784,982 | ) | (4,122,827 | ) | ||
Capital Share Transactions | ||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | (1,003,925 | ) | (21,733,173 | ) | ||
Net increase (decrease) in net assets | (1,303,952 | ) | (19,496,491 | ) | ||
Net Assets | ||||||
Beginning of period | 83,103,572 | 102,600,063 | ||||
End of period | $ | 81,799,620 | $ | 83,103,572 | ||
Undistributed (distributions in excess of) net investment income | $ | (1,135,688 | ) | $ | 1,041,616 |
See Notes to Financial Statements.
11
Notes to Financial Statements |
APRIL 30, 2018 (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, 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 domestic and foreign markets, as evidenced by the U.S. market or such other indicators that the Board of
12
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 non-Rule 12b-1 shareholder services. It is not the result of any difference in advisory or custodial fees or other expenses related to the management of the fund’s assets, which do not vary by class. During the period ended April 30, 2018, the investment advisor agreed to waive 0.09% of the fund's management fee. The investment advisor expects this waiver to continue until February 28, 2019 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, 2018 are as follows:
Annual Management Fee | Effective Annual Management Fee After Waiver | |
Investor Class | 1.20% | 1.11% |
I Class | 1.00% | 0.91% |
Y Class | 0.85% | 0.76% |
A Class | 1.20% | 1.11% |
C Class | 1.20% | 1.11% |
R Class | 1.20% | 1.11% |
R5 Class | 1.00% | 0.91% |
R6 Class | 0.85% | 0.76% |
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, 2018 are detailed in the Statement of Operations.
Directors' Fees and Expenses — The Board of Directors is responsible for overseeing the investment advisor’s management and operations of the fund. The directors receive detailed information about the fund and its investment advisor regularly throughout the year, and meet at least quarterly with management of the investment advisor to review reports about fund operations. The fund’s officers do not receive compensation from the fund.
Interfund Transactions — The fund may enter into security transactions with other American Century Investments funds and other client accounts of the investment advisor, in accordance with the 1940 Act rules and procedures adopted by the Board of Directors. The rules and procedures require, among other things, that these transactions be effected at the independent current market price of the security. During the period, the interfund purchases and sales were $273,553 and $138,164, respectively. The effect of interfund transactions on the Statement of Operations was $6,788 in net realized gain (loss) on investment transactions.
14
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the period ended April 30, 2018 were $70,211,626 and $73,498,148, respectively.
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended April 30, 2018 | Year ended October 31, 2017(1) | |||||||||
Shares | Amount | Shares | Amount | |||||||
Investor Class/Shares Authorized | 50,000,000 | 50,000,000 | ||||||||
Sold | 553,159 | $ | 6,500,957 | 2,891,989 | $ | 32,362,428 | ||||
Issued in reinvestment of distributions | 198,026 | 2,326,804 | 229,869 | 2,448,105 | ||||||
Redeemed | (882,482 | ) | (10,337,042 | ) | (3,208,650 | ) | (35,760,233 | ) | ||
(131,297 | ) | (1,509,281 | ) | (86,792 | ) | (949,700 | ) | |||
I Class/Shares Authorized | 20,000,000 | 20,000,000 | ||||||||
Sold | 177,963 | 2,048,791 | 600,381 | 6,863,154 | ||||||
Issued in reinvestment of distributions | 19,220 | 225,640 | 9,939 | 105,753 | ||||||
Redeemed | (130,970 | ) | (1,529,937 | ) | (282,616 | ) | (3,283,159 | ) | ||
66,213 | 744,494 | 327,704 | 3,685,748 | |||||||
Y Class/Shares Authorized | 50,000,000 | 50,000,000 | ||||||||
Sold | 39,498 | 456,878 | 451 | 5,000 | ||||||
Issued in reinvestment of distributions | 16 | 196 | — | — | ||||||
39,514 | 457,074 | 451 | 5,000 | |||||||
A Class/Shares Authorized | 15,000,000 | 15,000,000 | ||||||||
Sold | 13,026 | 155,578 | 148,553 | 1,645,456 | ||||||
Issued in reinvestment of distributions | 7,096 | 83,451 | 58,376 | 622,286 | ||||||
Redeemed | (50,558 | ) | (599,135 | ) | (1,417,987 | ) | (15,744,410 | ) | ||
(30,436 | ) | (360,106 | ) | (1,211,058 | ) | (13,476,668 | ) | |||
C Class/Shares Authorized | 10,000,000 | 10,000,000 | ||||||||
Sold | 4,467 | 51,705 | 19,750 | 216,122 | ||||||
Issued in reinvestment of distributions | 5,756 | 67,809 | 16,027 | 171,167 | ||||||
Redeemed | (57,938 | ) | (683,793 | ) | (368,067 | ) | (4,144,957 | ) | ||
(47,715 | ) | (564,279 | ) | (332,290 | ) | (3,757,668 | ) | |||
R Class/Shares Authorized | 10,000,000 | 10,000,000 | ||||||||
Sold | 8,877 | 104,588 | 4,374 | 49,218 | ||||||
Issued in reinvestment of distributions | 269 | 3,174 | 347 | 3,707 | ||||||
Redeemed | (5,472 | ) | (65,230 | ) | (3,662 | ) | (42,403 | ) | ||
3,674 | 42,532 | 1,059 | 10,522 | |||||||
R5 Class/Shares Authorized | 50,000,000 | 50,000,000 | ||||||||
Sold | — | — | 450 | 5,000 | ||||||
Issued in reinvestment of distributions | 17 | 190 | — | — | ||||||
17 | 190 | 450 | 5,000 | |||||||
R6 Class/Shares Authorized | 20,000,000 | 20,000,000 | ||||||||
Sold | 23,090 | 270,859 | 152,392 | 1,691,898 | ||||||
Issued in reinvestment of distributions | 2,857 | 33,507 | 38,594 | 410,259 | ||||||
Redeemed | (9,960 | ) | (118,915 | ) | (808,666 | ) | (9,357,564 | ) | ||
15,987 | 185,451 | (617,680 | ) | (7,255,407 | ) | |||||
Net increase (decrease) | (84,043 | ) | $ | (1,003,925 | ) | (1,918,156 | ) | $ | (21,733,173 | ) |
(1) | April 10, 2017 (commencement of sale) through October 31, 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 | ||||||||
China | $ | 286,862 | $ | 4,663,766 | — | |||
Netherlands | 966,587 | — | — | |||||
United States | 36,940,662 | — | — | |||||
Other Countries | — | 38,121,346 | — | |||||
Temporary Cash Investments | 999 | 1,067,517 | — | |||||
$ | 38,195,110 | $ | 43,852,629 | — |
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 | $ | 75,001,544 | |
Gross tax appreciation of investments | $ | 7,611,040 | |
Gross tax depreciation of investments | (564,845 | ) | |
Net tax appreciation (depreciation) of investments | $ | 7,046,195 |
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, 2017, the fund had accumulated short-term capital losses of $(2,757,925), 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.
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 | |||||||||||||||||
2018(3) | $11.80 | 0.09 | 0.26 | 0.35 | (0.40) | — | (0.40) | $11.75 | 3.00% | 1.11%(4) | 1.20%(4) | 1.50%(4) | 1.41%(4) | 85% | $67,008 | ||
2017 | $11.45 | 0.25 | 0.58 | 0.83 | (0.48) | — | (0.48) | $11.80 | 7.71% | 1.13% | 1.21% | 2.22% | 2.14% | 201% | $68,825 | ||
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 | ||
I Class | |||||||||||||||||
2018(3) | $11.81 | 0.10 | 0.27 | 0.37 | (0.43) | — | (0.43) | $11.75 | 3.12% | 0.91%(4) | 1.00%(4) | 1.70%(4) | 1.61%(4) | 85% | $7,526 | ||
2017 | $11.47 | 0.25 | 0.59 | 0.84 | (0.50) | — | (0.50) | $11.81 | 7.83% | 0.93% | 1.01% | 2.42% | 2.34% | 201% | $6,782 | ||
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 | ||
Y Class | |||||||||||||||||
2018(3) | $11.81 | 0.11 | 0.27 | 0.38 | (0.43) | — | (0.43) | $11.76 | 3.27% | 0.76%(4) | 0.85%(4) | 1.85%(4) | 1.76%(4) | 85% | $470 | ||
2017(5) | $11.09 | 0.13 | 0.59 | 0.72 | — | — | — | $11.81 | 6.49% | 0.78%(4) | 0.86%(4) | 1.99%(4) | 1.91%(4) | 201%(6) | $5 |
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) | |||
A Class | |||||||||||||||||
2018(3) | $11.79 | 0.07 | 0.26 | 0.33 | (0.37) | — | (0.37) | $11.75 | 2.82% | 1.36%(4) | 1.45%(4) | 1.25%(4) | 1.16%(4) | 85% | $2,516 | ||
2017 | $11.44 | 0.24 | 0.56 | 0.80 | (0.45) | — | (0.45) | $11.79 | 7.44% | 1.38% | 1.46% | 1.97% | 1.89% | 201% | $2,882 | ||
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 | ||
C Class | |||||||||||||||||
2018(3) | $11.73 | 0.03 | 0.26 | 0.29 | (0.28) | — | (0.28) | $11.74 | 2.47% | 2.11%(4) | 2.20%(4) | 0.50%(4) | 0.41%(4) | 85% | $3,050 | ||
2017 | $11.38 | 0.14 | 0.58 | 0.72 | (0.37) | — | (0.37) | $11.73 | 6.65% | 2.13% | 2.21% | 1.22% | 1.14% | 201% | $3,606 | ||
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 | —(7) | 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 |
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 | |||||||||||||||||
2018(3) | $11.78 | 0.06 | 0.26 | 0.32 | (0.34) | — | (0.34) | $11.76 | 2.73% | 1.61%(4) | 1.70%(4) | 1.00%(4) | 0.91%(4) | 85% | $165 | ||
2017 | $11.43 | 0.18 | 0.60 | 0.78 | (0.43) | — | (0.43) | $11.78 | 7.17% | 1.63% | 1.71% | 1.72% | 1.64% | 201% | $122 | ||
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 | ||
R5 Class | |||||||||||||||||
2018(3) | $11.81 | 0.10 | 0.27 | 0.37 | (0.42) | — | (0.42) | $11.76 | 3.15% | 0.91%(4) | 1.00%(4) | 1.70%(4) | 1.61%(4) | 85% | $5 | ||
2017(5) | $11.10 | 0.12 | 0.59 | 0.71 | — | — | — | $11.81 | 6.40% | 0.93%(4) | 1.01%(4) | 1.84%(4) | 1.76%(4) | 201%(6) | $5 | ||
R6 Class | |||||||||||||||||
2018(3) | $11.82 | 0.11 | 0.27 | 0.38 | (0.45) | — | (0.45) | $11.75 | 3.19% | 0.76%(4) | 0.85%(4) | 1.85%(4) | 1.76%(4) | 85% | $1,060 | ||
2017 | $11.47 | 0.31 | 0.56 | 0.87 | (0.52) | — | (0.52) | $11.82 | 8.09% | 0.78% | 0.86% | 2.57% | 2.49% | 201% | $877 | ||
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(8) | $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%(9) | $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, 2018 (unaudited). |
(4) | Annualized. |
(5) | April 10, 2017 (commencement of sale) through October 31, 2017. |
(6) | Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended October 31, 2017. |
(7) | Per-share amount was less than $0.005. |
(8) | July 26, 2013 (commencement of sale) through October 31, 2013. |
(9) | 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 retirement accounts are subject to federal income tax withholding, unless you elect not to have withholding apply*. Tax will be withheld on the total amount withdrawn even though you may be receiving amounts that are not subject to withholding, such as nondeductible contributions. In such case, excess amounts of withholding could occur. You may adjust your withholding election so that a greater or lesser amount will be withheld.
If you don’t want us to withhold on this amount, you must notify us to not withhold the federal income tax. You may notify us in writing or in certain situations by telephone or through other electronic means. For systematic withdrawals, your withholding election will remain in effect until revoked or changed by filing a new election. You have the right to revoke your election at any time and change your withholding percentage for future distributions.
Remember, even if you elect not to have income tax withheld, you are liable for paying income tax on the taxable portion of your withdrawal. If you elect not to have income tax withheld or you don’t have enough income tax withheld, you may be responsible for payment of estimated tax. You may incur penalties under the estimated tax rules if your withholding and estimated tax payments are not sufficient. You can reduce or defer the income tax on a distribution by directly or indirectly rolling such distribution over to another IRA or eligible plan. You should consult your tax advisor for additional information.
State tax will be withheld if, at the time of your distribution, your address is within one of the mandatory withholding states and you have federal income tax withheld (or as otherwise required by state law). State taxes will be withheld from your distribution in accordance with the respective state rules.
*Some 403(b), 457 and qualified retirement plan distributions may be subject to 20% mandatory withholding, as they are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
A description of the policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund is available without charge, upon request, by calling 1-800-345-2021. It is also available on the "About Us" page of American Century Investments’ website at americancentury.com and on the Securities and Exchange Commission’s website at sec.gov. Information regarding how the investment advisor voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the "About Us" page at americancentury.com. It is also available at sec.gov.
Quarterly Portfolio Disclosure
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-Q. The fund’s Forms N-Q are available on the SEC’s website at sec.gov, and may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The fund also makes its complete schedule of portfolio holdings for the most recent quarter of its fiscal year available on its website at americancentury.com and, upon request, by calling 1-800-345-2021.
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. | ||
©2018 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-92368 1806 |
Semiannual Report | |
April 30, 2018 | |
NT Global Real Estate Fund | |
Investor Class (ANREX) | |
G Class (ANRHX) |
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, 2018 | |
Top Ten Holdings | % of net assets |
Prologis, Inc. | 3.8% |
Alexandria Real Estate Equities, Inc. | 3.3% |
Sumitomo Realty & Development Co. Ltd. | 2.9% |
Segro plc | 2.8% |
Extra Space Storage, Inc. | 2.8% |
Vonovia SE | 2.8% |
Host Hotels & Resorts, Inc. | 2.7% |
Invitation Homes, Inc. | 2.7% |
Sun Communities, Inc. | 2.5% |
Gecina SA | 2.5% |
Types of Investments in Portfolio | % of net assets |
Foreign Common Stocks | 53.9% |
Domestic Common Stocks | 45.3% |
Total Common Stocks | 99.2% |
Temporary Cash Investments | 1.5% |
Other Assets and Liabilities | (0.7)% |
Investments by Country | % of net assets |
United States | 45.3% |
Japan | 10.8% |
Hong Kong | 8.2% |
China | 6.0% |
United Kingdom | 6.0% |
Australia | 4.2% |
Germany | 4.1% |
France | 3.1% |
Singapore | 3.1% |
Canada | 2.5% |
Other Countries | 5.9% |
Cash and Equivalents* | 0.8% |
*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, 2017 to April 30, 2018.
Actual Expenses
The table provides information about actual account values and actual expenses for each class. You may use the information, together with the amount you invested, to estimate the expenses that you paid over the period. First, identify the share class you own. Then simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The table also provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio of each class of your fund and an assumed rate of return of 5% per year before expenses, which is not the actual return of a fund’s share class. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) or redemption/exchange fees. Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Beginning Account Value 11/1/17 | Ending Account Value 4/30/18 | Expenses Paid During Period(1) 11/1/17 - 4/30/18 | Annualized Expense Ratio(1) | |
Actual | ||||
Investor Class | $1,000 | $1,028.80 | $5.58 | 1.11% |
G Class | $1,000 | $1,034.90 | $0.00 | 0.00%(2) |
Hypothetical | ||||
Investor Class | $1,000 | $1,019.29 | $5.56 | 1.11% |
G Class | $1,000 | $1,024.80 | $0.00 | 0.00%(2) |
(1) | Expenses are equal to the class's annualized expense ratio listed in the table above, multiplied by the average account value over the period, multiplied by 181, the number of days in the most recent fiscal half-year, divided by 365, to reflect the one-half year period. Annualized expense ratio reflects actual expenses, including any applicable fee waivers or expense reimbursements and excluding any acquired fund fees and expenses. |
(2) | Other expenses, which include directors' fees and expenses, did not exceed 0.005%. |
3
Schedule of Investments |
APRIL 30, 2018 (UNAUDITED)
Shares | Value | ||||
COMMON STOCKS — 99.2% | |||||
Australia — 4.2% | |||||
Charter Hall Group | 1,414,915 | $ | 6,262,139 | ||
Goodman Group | 1,450,218 | 9,881,639 | |||
Scentre Group | 617,958 | 1,870,260 | |||
18,014,038 | |||||
Belgium — 0.4% | |||||
VGP NV | 22,054 | 1,707,668 | |||
Brazil — 0.6% | |||||
Iguatemi Empresa de Shopping Centers SA | 243,700 | 2,493,904 | |||
Canada — 2.5% | |||||
Allied Properties Real Estate Investment Trust | 145,004 | 4,684,579 | |||
Brookfield Asset Management, Inc., Class A | 89,015 | 3,528,154 | |||
Tricon Capital Group, Inc. | 278,533 | 2,182,361 | |||
10,395,094 | |||||
China — 6.0% | |||||
China Lodging Group Ltd. ADR | 10,658 | 1,488,496 | |||
China Resources Land Ltd. | 1,354,000 | 5,082,444 | |||
China Vanke Co. Ltd., H Shares | 361,500 | 1,499,637 | |||
CIFI Holdings Group Co. Ltd. | 2,950,000 | 2,320,008 | |||
Country Garden Holdings Co. Ltd. | 2,542,000 | 5,178,951 | |||
KWG Property Holding Ltd. | 1,623,000 | 2,184,717 | |||
Longfor Properties Co. Ltd. | 1,508,000 | 4,506,514 | |||
Shimao Property Holdings Ltd. | 1,245,000 | 3,293,916 | |||
25,554,683 | |||||
France — 3.1% | |||||
Gecina SA | 61,147 | 10,567,519 | |||
Nexity SA | 44,052 | 2,745,361 | |||
13,312,880 | |||||
Germany — 4.1% | |||||
Aroundtown SA | 681,999 | 5,453,567 | |||
Vonovia SE | 234,223 | 11,746,433 | |||
17,200,000 | |||||
Hong Kong — 8.2% | |||||
CK Asset Holdings Ltd. | 642,500 | 5,538,791 | |||
Link REIT | 1,075,000 | 9,497,855 | |||
New World Development Co. Ltd. | 2,366,000 | 3,473,161 | |||
Sun Hung Kai Properties Ltd. | 440,000 | 7,063,444 | |||
Wharf Real Estate Investment Co. Ltd. | 693,000 | 5,202,278 | |||
Wynn Macau Ltd. | 1,076,800 | 3,978,652 | |||
34,754,181 | |||||
India — 0.3% | |||||
Godrej Properties Ltd.(1) | 104,172 | 1,251,894 | |||
Japan — 10.8% | |||||
GLP J-Reit | 5,566 | 5,971,098 | |||
Invesco Office J-Reit, Inc. | 23,096 | 2,938,921 | |||
Japan Hotel REIT Investment Corp. | 11,912 | 9,015,630 |
4
Shares | Value | ||||
Mitsui Fudosan Co. Ltd. | 386,700 | $ | 9,914,757 | ||
Orix JREIT, Inc. | 3,711 | 5,681,175 | |||
Sumitomo Realty & Development Co. Ltd. | 311,000 | 12,332,008 | |||
45,853,589 | |||||
Mexico — 0.6% | |||||
Fibra Uno Administracion SA de CV | 1,595,664 | 2,642,369 | |||
Netherlands — 1.2% | |||||
InterXion Holding NV(1) | 76,136 | 4,950,363 | |||
Singapore — 3.1% | |||||
CapitaLand Commercial Trust | 2,012,100 | 2,754,220 | |||
CapitaLand Ltd. | 1,156,800 | 3,262,330 | |||
City Developments Ltd. | 296,600 | 2,825,719 | |||
UOL Group Ltd. | 619,500 | 4,090,572 | |||
12,932,841 | |||||
Spain — 1.9% | |||||
Hispania Activos Inmobiliarios SOCIMI SA | 105,650 | 2,240,858 | |||
Inmobiliaria Colonial Socimi SA | 331,908 | 3,857,642 | |||
Neinor Homes SA(1) | 109,223 | 2,108,142 | |||
8,206,642 | |||||
Thailand — 0.9% | |||||
Central Pattana PCL | 1,436,300 | 3,663,257 | |||
United Kingdom — 6.0% | |||||
Safestore Holdings plc | 811,678 | 6,103,271 | |||
Segro plc | 1,357,689 | 12,056,127 | |||
UNITE Group plc (The) | 615,951 | 7,058,034 | |||
25,217,432 | |||||
United States — 45.3% | |||||
Agree Realty Corp. | 63,377 | 3,097,868 | |||
Alexandria Real Estate Equities, Inc. | 111,006 | 13,828,017 | |||
Camden Property Trust | 65,083 | 5,558,088 | |||
CyrusOne, Inc. | 66,201 | 3,547,712 | |||
Duke Realty Corp. | 234,644 | 6,358,852 | |||
Equinix, Inc. | 15,377 | 6,470,488 | |||
Essex Property Trust, Inc. | 42,510 | 10,189,222 | |||
Extra Space Storage, Inc. | 132,394 | 11,861,178 | |||
GGP, Inc. | 179,418 | 3,586,566 | |||
HCP, Inc. | 266,775 | 6,231,864 | |||
Healthcare Realty Trust, Inc. | 185,719 | 5,168,560 | |||
Hilton Worldwide Holdings, Inc. | 65,891 | 5,194,846 | |||
Host Hotels & Resorts, Inc. | 593,775 | 11,614,239 | |||
Invitation Homes, Inc. | 493,155 | 11,411,607 | |||
Park Hotels & Resorts, Inc. | 254,124 | 7,313,689 | |||
Prologis, Inc. | 250,132 | 16,236,068 | |||
Rayonier, Inc. | 234,700 | 8,728,493 | |||
Regency Centers Corp. | 59,210 | 3,484,509 | |||
Sabra Health Care REIT, Inc. | 216,478 | 3,963,712 | |||
SBA Communications Corp.(1) | 32,927 | 5,275,893 | |||
Simon Property Group, Inc. | 44,478 | 6,953,691 | |||
Starwood Property Trust, Inc. | 161,820 | 3,391,747 | |||
STORE Capital Corp. | 208,577 | 5,262,398 | |||
Sun Communities, Inc. | 114,152 | 10,713,165 |
5
Shares | Value | ||||
UDR, Inc. | 215,871 | $ | 7,803,737 | ||
Weyerhaeuser Co. | 237,090 | 8,720,170 | |||
191,966,379 | |||||
TOTAL COMMON STOCKS (Cost $375,644,657) | 420,117,214 | ||||
TEMPORARY CASH INVESTMENTS — 1.5% | |||||
Repurchase Agreement, BMO Capital Markets Corp., (collateralized by various U.S. Treasury obligations, 0.875% - 3.75%, 7/31/18 - 8/15/43, valued at $3,547,233), in a joint trading account at 1.46%, dated 4/30/18, due 5/1/18 (Delivery value $3,472,613) | 3,472,472 | ||||
Repurchase Agreement, Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 2.125%, 5/15/25, valued at $2,953,591), at 0.74%, dated 4/30/18, due 5/1/18 (Delivery value $2,894,059) | 2,894,000 | ||||
State Street Institutional U.S. Government Money Market Fund, Premier Class | 3,122 | 3,122 | |||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $6,369,594) | 6,369,594 | ||||
TOTAL INVESTMENT SECURITIES — 100.7% (Cost $382,014,251) | 426,486,808 | ||||
OTHER ASSETS AND LIABILITIES — (0.7)% | (2,806,135 | ) | |||
TOTAL NET ASSETS — 100.0% | $ | 423,680,673 |
SECTOR ALLOCATION | ||
(as a % of net assets) | ||
Diversified | 30.8 | % |
Residential | 20.5 | % |
Industrial | 12.3 | % |
Retail | 9.5 | % |
Lodging/Resorts | 9.1 | % |
Office | 9.1 | % |
Self Storage | 4.3 | % |
Health Care | 3.6 | % |
Cash and Equivalents* | 0.8 | % |
*Includes temporary cash investments and other assets and liabilities.
NOTES TO SCHEDULE OF INVESTMENTS | ||
ADR | - | American Depositary Receipt |
(1) | Non-income producing. |
See Notes to Financial Statements.
6
Statement of Assets and Liabilities |
APRIL 30, 2018 (UNAUDITED) | |||
Assets | |||
Investment securities, at value (cost of $382,014,251) | $ | 426,486,808 | |
Receivable for investments sold | 7,993,722 | ||
Dividends and interest receivable | 962,467 | ||
435,442,997 | |||
Liabilities | |||
Foreign currency overdraft payable, at value (cost of $87) | 87 | ||
Payable for investments purchased | 9,589,925 | ||
Payable for capital shares redeemed | 2,067,429 | ||
Accrued management fees | 103,254 | ||
Accrued foreign taxes | 1,629 | ||
11,762,324 | |||
Net Assets | $ | 423,680,673 | |
Net Assets Consist of: | |||
Capital (par value and paid-in surplus) | $ | 424,530,947 | |
Distributions in excess of net investment income | (4,264,468 | ) | |
Accumulated net realized loss | (41,038,120 | ) | |
Net unrealized appreciation | 44,452,314 | ||
$ | 423,680,673 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | ||||
Investor Class, $0.01 Par Value | $114,697,283 | 11,774,132 | $9.74 | |||
G Class, $0.01 Par Value | $308,983,390 | 31,605,911 | $9.78 |
See Notes to Financial Statements.
7
Statement of Operations |
FOR THE SIX MONTHS ENDED APRIL 30, 2018 (UNAUDITED) | |||
Investment Income (Loss) | |||
Income: | |||
Dividends (net of foreign taxes withheld of $276,660) | $ | 5,506,348 | |
Interest | 19,082 | ||
5,525,430 | |||
Expenses: | |||
Management fees | 1,999,738 | ||
Directors' fees and expenses | 3,705 | ||
Other expenses | 6,725 | ||
2,010,168 | |||
Fees waived(1) | (1,379,775 | ) | |
630,393 | |||
Net investment income (loss) | 4,895,037 | ||
Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investment transactions | 2,942,753 | ||
Foreign currency translation transactions | (28,810 | ) | |
2,913,943 | |||
Change in net unrealized appreciation (depreciation) on: | |||
Investments (includes (increase) decrease in accrued foreign taxes of $(1,629)) | 6,356,530 | ||
Translation of assets and liabilities in foreign currencies | (10,002 | ) | |
6,346,528 | |||
Net realized and unrealized gain (loss) | 9,260,471 | ||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 14,155,508 |
(1) | Amount consists of $50,268 and $1,329,507 for Investor Class and G Class, respectively. |
See Notes to Financial Statements.
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Statement of Changes in Net Assets |
SIX MONTHS ENDED APRIL 30, 2018 (UNAUDITED) AND YEAR ENDED OCTOBER 31, 2017 | ||||||
Increase (Decrease) in Net Assets | April 30, 2018 | October 31, 2017 | ||||
Operations | ||||||
Net investment income (loss) | $ | 4,895,037 | $ | 10,114,235 | ||
Net realized gain (loss) | 2,913,943 | (3,635,057 | ) | |||
Change in net unrealized appreciation (depreciation) | 6,346,528 | 27,252,018 | ||||
Net increase (decrease) in net assets resulting from operations | 14,155,508 | 33,731,196 | ||||
Distributions to Shareholders | ||||||
From net investment income: | ||||||
Investor Class | (3,692,279 | ) | (4,532,618 | ) | ||
R6 Class | — | (1,286,466 | ) | |||
G Class | (12,293,326 | ) | (11,286,980 | ) | ||
Decrease in net assets from distributions | (15,985,605 | ) | (17,106,064 | ) | ||
Capital Share Transactions | ||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | (10,029,598 | ) | 28,710,763 | |||
Net increase (decrease) in net assets | (11,859,695 | ) | 45,335,895 | |||
Net Assets | ||||||
Beginning of period | 435,540,368 | 390,204,473 | ||||
End of period | $ | 423,680,673 | $ | 435,540,368 | ||
Undistributed (distributions in excess of) net investment income | $ | (4,264,468 | ) | $ | 6,826,100 |
See Notes to Financial Statements.
9
Notes to Financial Statements |
APRIL 30, 2018 (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 or the Bloomberg Industry Classification Standard for the tobacco industry. The fund offers the Investor Class and G Class. On July 31, 2017, all outstanding R6 Class shares were converted to G Class shares and the fund discontinued offering the 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 Directors, or its delegate, deems appropriate. If significant fluctuations in foreign markets are identified, the
10
fund may apply a model-derived factor to the closing price of equity securities traded on foreign securities exchanges. The factor is based on observable market data as provided by an independent pricing service.
Security Transactions — Security transactions are accounted for as of the trade date. Net realized gains and losses are determined on the identified cost basis, which is also used for federal income tax purposes. Certain countries impose taxes on realized gains on the sale of securities registered in their country. The fund records the foreign tax expense, if any, on an accrual basis. The foreign tax expense on realized gains and unrealized appreciation reduces the net realized gain (loss) on investment transactions and net unrealized appreciation (depreciation) on investments, respectively.
Investment Income — Dividend income less foreign taxes withheld, if any, is recorded as of the ex-dividend date. Distributions received on securities that represent a return of capital or long-term capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The fund may estimate the components of distributions received that may be considered nontaxable distributions or long-term capital gain distributions for income tax purposes. Interest income is recorded on the accrual basis and includes accretion of discounts and amortization of premiums.
Foreign Currency Translations — All assets and liabilities initially expressed in foreign currencies are translated into U.S. dollars at prevailing exchange rates at period end. The fund may enter into spot foreign currency exchange contracts to facilitate transactions denominated in a foreign currency. Purchases and sales of investment securities, dividend and interest income, spot foreign currency exchange contracts, and expenses are translated at the rates of exchange prevailing on the respective dates of such transactions. Net realized and unrealized foreign currency exchange gains or losses related to investment securities are a component of net realized gain (loss) on investment transactions and change in net unrealized appreciation (depreciation) on investments, respectively.
Repurchase Agreements — The fund may enter into repurchase agreements with institutions that American Century Investment Management, Inc. (ACIM) (the investment advisor) has determined are creditworthy pursuant to criteria adopted by the Board of Directors. The fund requires that the collateral, represented by securities, received in a repurchase transaction be transferred to the custodian in a manner sufficient to enable the fund to obtain those securities in the event of a default under the repurchase agreement. ACIM monitors, on a daily basis, the securities transferred to ensure the value, including accrued interest, of the securities under each repurchase agreement is equal to or greater than amounts owed to the fund under each repurchase agreement.
Joint Trading Account — Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the fund, along with certain other funds in the American Century Investments family of funds, may transfer uninvested cash balances into a joint trading account. These balances are invested in one or more repurchase agreements that are collateralized by U.S. Treasury or Agency obligations.
Income Tax Status — It is the fund’s policy to distribute substantially all net investment income and net realized gains to shareholders and to otherwise qualify as a regulated investment company under provisions of the Internal Revenue Code. Accordingly, no provision has been made for income taxes. The fund files U.S. federal, state, local and non-U.S. tax returns as applicable. The fund's tax returns are subject to examination by the relevant taxing authority until expiration of the applicable statute of limitations, which is generally three years from the date of filing but can be longer in certain jurisdictions. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination and for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Multiple Class — All shares of the fund represent an equal pro rata interest in the net assets of the class to which such shares belong, and have identical voting, dividend, liquidation and other rights and the same terms and conditions, except for class specific expenses and exclusive rights to vote on matters affecting only individual classes. Income, non-class specific expenses, and realized and unrealized capital gains and losses of the fund are allocated to each class of shares based on their relative net assets.
Distributions to Shareholders — Distributions from net investment income and net realized gains, if any, are generally declared and paid annually.
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
11
maximum exposure under these arrangements is unknown as this would involve future claims that may be made against a fund. The risk of material loss from such claims is considered by management to be remote.
3. Fees and Transactions with Related Parties
Certain officers and directors of the corporation are also officers and/or directors of American Century Companies, Inc. (ACC). The corporation’s investment advisor, ACIM, the corporation's distributor, American Century Investment Services, Inc., and the corporation’s transfer agent, American Century Services, LLC, are wholly owned, directly or indirectly, by ACC. Various funds issued by American Century Asset Allocation Portfolios, Inc. own, in aggregate, 100% of the shares of the fund. Related parties do not invest in the fund for the purpose of exercising management or control.
Management Fees —The corporation has entered into a management agreement with ACIM, under which ACIM provides the fund with investment advisory and management services in exchange for a single, unified management fee (the fee) per class. The agreement provides that all expenses of managing and operating the fund, except distribution and service fees, brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), and extraordinary expenses, will be paid by ACIM. The fee is computed and accrued daily based on each class's daily net assets and paid monthly in arrears. The difference in the fee among the classes is a result of their separate arrangements for non-Rule 12b-1 shareholder services, which may be provided indirectly through another American Century Investments mutual fund. It is not the result of any difference in advisory or custodial fees or other expenses related to the management of the fund’s assets, which do not vary by class. During the period ended April 30, 2018, the investment advisor agreed to waive 0.09% of the fund's management fee. The investment advisor expects this waiver to continue until February 28, 2019 and cannot terminate it prior to such date without the approval of the Board of Directors. The investment advisor agreed to waive the G Class’s management fee in its entirety. The investment advisor expects this waiver to remain in effect permanently and cannot terminate it without the approval of the Board of Directors.
The annual management fee and the effective annual management fee after waiver for each class for the period ended April 30, 2018 are as follows:
Annual Management Fee | Effective Annual Management Fee After Waiver | |
Investor Class | 1.20% | 1.11% |
G Class | 0.85% | 0.00% |
Directors' Fees and Expenses — The Board of Directors is responsible for overseeing the investment advisor’s management and operations of the fund. The directors receive detailed information about the fund and its investment advisor regularly throughout the year, and meet at least quarterly with management of the investment advisor to review reports about fund operations. The fund’s officers do not receive compensation from the fund.
Interfund Transactions — The fund may enter into security transactions with other American Century Investments funds and other client accounts of the investment advisor, in accordance with the 1940 Act rules and procedures adopted by the Board of Directors. The rules and procedures require, among other things, that these transactions be effected at the independent current market price of the security. During the period, the interfund purchases and sales were $3,024,207 and $722,285, respectively. The effect of interfund transactions on the Statement of Operations was $35,660 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, 2018 were $375,645,430 and $392,410,737, respectively.
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5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended April 30, 2018 | Year ended October 31, 2017 | |||||||||
Shares | Amount | Shares | Amount | |||||||
Investor Class/Shares Authorized | 90,000,000 | 90,000,000 | ||||||||
Sold | 609,405 | $ | 5,985,751 | 1,424,775 | $ | 12,844,944 | ||||
Issued in reinvestment of distributions | 379,084 | 3,692,279 | 512,740 | 4,532,618 | ||||||
Redeemed | (317,988 | ) | (3,153,869 | ) | (1,599,826 | ) | (14,600,064 | ) | ||
670,501 | 6,524,161 | 337,689 | 2,777,498 | |||||||
R6 Class/Shares Authorized | N/A | N/A | ||||||||
Sold | 1,321,902 | 12,086,691 | ||||||||
Issued in reinvestment of distributions | 145,528 | 1,286,466 | ||||||||
Redeemed | (4,144,860 | ) | (39,871,707 | ) | ||||||
(2,677,430 | ) | (26,498,550 | ) | |||||||
G Class/Shares Authorized | 200,000,000 | 200,000,000 | ||||||||
Sold | 1,024,006 | 10,029,862 | 6,472,163 | 61,145,332 | ||||||
Issued in reinvestment of distributions | 1,262,148 | 12,293,326 | 1,276,808 | 11,286,980 | ||||||
Redeemed | (3,943,632 | ) | (38,876,947 | ) | (2,126,720 | ) | (20,000,497 | ) | ||
(1,657,478 | ) | (16,553,759 | ) | 5,622,251 | 52,431,815 | |||||
Net increase (decrease) | (986,977 | ) | $ | (10,029,598 | ) | 3,282,510 | $ | 28,710,763 |
6. Fair Value Measurements
The fund’s investments valuation process is based on several considerations and may use multiple inputs to determine the fair value of the investments held by the fund. In conformity with accounting principles generally accepted in the United States of America, the inputs used to determine a valuation are classified into three broad levels.
• | Level 1 valuation inputs consist of unadjusted quoted prices in an active market for identical investments. |
• | Level 2 valuation inputs consist of direct or indirect observable market data (including quoted prices for comparable investments, evaluations of subsequent market events, interest rates, prepayment speeds, credit risk, etc.). These inputs also consist of quoted prices for identical investments initially expressed in local currencies that are adjusted through translation into U.S. dollars. |
• | Level 3 valuation inputs consist of unobservable data (including a fund’s own assumptions). |
The level classification is based on the lowest level input that is significant to the fair valuation measurement. The valuation inputs are not necessarily an indication of the risks associated with investing in these securities or other financial instruments. There were no significant transfers between levels during the period.
The following is a summary of the level classifications as of period end. The Schedule of Investments provides additional information on the fund’s portfolio holdings.
Level 1 | Level 2 | Level 3 | ||||||
Assets | ||||||||
Investment Securities | ||||||||
Common Stocks | ||||||||
China | $ | 1,488,496 | $ | 24,066,187 | — | |||
Netherlands | 4,950,363 | — | — | |||||
United States | 191,966,379 | — | — | |||||
Other Countries | — | 197,645,789 | — | |||||
Temporary Cash Investments | 3,122 | 6,366,472 | — | |||||
$ | 198,408,360 | $ | 228,078,448 | — |
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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 | $ | 394,076,875 | |
Gross tax appreciation of investments | $ | 35,659,672 | |
Gross tax depreciation of investments | (3,249,739 | ) | |
Net tax appreciation (depreciation) of investments | $ | 32,409,933 |
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, 2017, the fund had accumulated short-term capital losses of $(39,009,332), 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.
14
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 | |||||||||||||||
2018(3) | $9.79 | 0.07 | 0.21 | 0.28 | (0.33) | $9.74 | 2.88% | 1.11%(4) | 1.20%(4) | 1.49%(4) | 1.40%(4) | 88% | $114,697 | ||
2017 | $9.49 | 0.20 | 0.48 | 0.68 | (0.38) | $9.79 | 7.55% | 1.13% | 1.21% | 2.09% | 2.01% | 211% | $108,683 | ||
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 | ||
G Class | |||||||||||||||
2018(3) | $9.83 | 0.13 | 0.21 | 0.34 | (0.39) | $9.78 | 3.49% | 0.00%(4)(6) | 0.85%(4) | 2.60%(4) | 1.75%(4) | 88% | $308,983 | ||
2017 | $9.50 | 0.24 | 0.48 | 0.72 | (0.39) | $9.83 | 8.09% | 0.66% | 0.97% | 2.56% | 2.25% | 211% | $326,857 | ||
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 |
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, 2018 (unaudited). |
(4) | Annualized. |
(5) | March 19, 2015 (fund inception) through October 31, 2015. |
(6) | Ratio was less than 0.005%. |
See Notes to Financial Statements.
Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain retirement accounts are subject to federal income tax withholding, unless you elect not to have withholding apply*. Tax will be withheld on the total amount withdrawn even though you may be receiving amounts that are not subject to withholding, such as nondeductible contributions. In such case, excess amounts of withholding could occur. You may adjust your withholding election so that a greater or lesser amount will be withheld.
If you don’t want us to withhold on this amount, you must notify us to not withhold the federal income tax. You may notify us in writing or in certain situations by telephone or through other electronic means. For systematic withdrawals, your withholding election will remain in effect until revoked or changed by filing a new election. You have the right to revoke your election at any time and change your withholding percentage for future distributions.
Remember, even if you elect not to have income tax withheld, you are liable for paying income tax on the taxable portion of your withdrawal. If you elect not to have income tax withheld or you don’t have enough income tax withheld, you may be responsible for payment of estimated tax. You may incur penalties under the estimated tax rules if your withholding and estimated tax payments are not sufficient. You can reduce or defer the income tax on a distribution by directly or indirectly rolling such distribution over to another IRA or eligible plan. You should consult your tax advisor for additional information.
State tax will be withheld if, at the time of your distribution, your address is within one of the mandatory withholding states and you have federal income tax withheld (or as otherwise required by state law). State taxes will be withheld from your distribution in accordance with the respective state rules.
*Some 403(b), 457 and qualified retirement plan distributions may be subject to 20% mandatory withholding, as they are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
A description of the policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund is available without charge, upon request, by calling 1-800-345-2021. It is also available on the "About Us" page of American Century Investments’ website at americancentury.com and on the Securities and Exchange Commission’s website at sec.gov. Information regarding how the investment advisor voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the "About Us" page at americancentury.com. It is also available at sec.gov.
Quarterly Portfolio Disclosure
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-Q. The fund’s Forms N-Q are available on the SEC’s website at sec.gov, and may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The fund also makes its complete schedule of portfolio holdings for the most recent quarter of its fiscal year available on its website at americancentury.com and, upon request, by calling 1-800-345-2021.
17
Notes |
18
Notes |
19
Notes |
20
Contact Us | americancentury.com | |
Automated Information Line | 1-800-345-8765 | |
Investor Services Representative | 1-800-345-2021 or 816-531-5575 | |
Investors Using Advisors | 1-800-378-9878 | |
Business, Not-For-Profit, Employer-Sponsored Retirement Plans | 1-800-345-3533 | |
Banks and Trust Companies, Broker-Dealers, Financial Professionals, Insurance Companies | 1-800-345-6488 | |
Telecommunications Relay Service for the Deaf | 711 | |
American Century 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. | ||
©2018 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-92376 1806 |
Semiannual Report | |
April 30, 2018 | |
Real Estate Fund | |
Investor Class (REACX) | |
I Class (REAIX) | |
Y Class (ARYEX) | |
A Class (AREEX) | |
C Class (ARYCX) | |
R Class (AREWX) | |
R5 Class (ARREX) | |
R6 Class (AREDX) |
Table of Contents |
Any opinions expressed in this report reflect those of the author as of the date of the report, and do not necessarily represent the opinions of American Century Investments® or any other person in the American Century Investments organization. Any such opinions are subject to change at any time based upon market or other conditions and American Century Investments disclaims any responsibility to update such opinions. These opinions may not be relied upon as investment advice and, because investment decisions made by American Century Investments funds are based on numerous factors, may not be relied upon as an indication of trading intent on behalf of any American Century Investments fund. Security examples are used for representational purposes only and are not intended as recommendations to purchase or sell securities. Performance information for comparative indices and securities is provided to American Century Investments by third party vendors. To the best of American Century Investments’ knowledge, such information is accurate at the time of printing.
President’s Letter |
Jonathan Thomas
Dear Investor:
Thank you for reviewing this semiannual report for the six months ended April 30, 2018. It provides a market overview (below), followed by a schedule of fund investments and other financial information. For additional commentary and information on fund performance, plus other investment insights, we encourage you to visit our website, americancentury.com.
Volatility’s Return Restrains Rally
From rally to retreat, global financial markets experienced two distinct performance patterns during the six-month period. For the first three months, improving global growth, positive corporate earnings results, generally muted inflation, and rising, though still relatively low, interest rates supported equity market gains. U.S. stocks were notably strong, with the S&P 500 Index returning more than 10% for the three months ended January 31, 2018. U.S. Treasury yields edged higher, and interest-rate-sensitive assets, including U.S. fixed-income securities and real estate investment trusts (REITs), generated more-modest gains. Meanwhile, accommodative central bank policy continued to fuel gains among non-U.S. developed markets bonds, while a weaker U.S. dollar largely aided emerging markets bonds.
The backdrop changed swiftly and sharply in early February. U.S. stocks plunged after the U.S. Department of Labor announced wages grew at their fastest year-over-year pace in nine years. This news, coupled with other positive economic data and rising inflation expectations, pushed interest rates higher and triggered fears that the Federal Reserve (the Fed) would ramp up its rate-hike campaign. In addition, President Trump announced a tariff strategy that sparked fears of a global trade war. Volatility subsided somewhat by the end of the reporting period, as economic and inflation data and the Fed’s rate-hike strategy were generally aligned with investor expectations. Although returns for most global asset classes declined for the three months ended April 30, 2018, earlier gains were sufficient to keep results positive for the entire six-month period.
With economic growth improving, inflationary pressures mounting, Treasury yields rising, and volatility resurfacing, investors likely will face new opportunities and challenges in the months ahead. We believe this scenario warrants a disciplined, diversified, and risk-aware approach, using professionally managed portfolios in pursuit of investment goals. We appreciate your continued trust and confidence in us.
Sincerely,
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
2
Fund Characteristics |
APRIL 30, 2018 | |
Top Ten Holdings | % of net assets |
Prologis, Inc. | 6.1% |
Equinix, Inc. | 5.0% |
Simon Property Group, Inc. | 5.0% |
Essex Property Trust, Inc. | 4.1% |
Host Hotels & Resorts, Inc. | 4.1% |
Alexandria Real Estate Equities, Inc. | 4.0% |
Invitation Homes, Inc. | 3.6% |
Sun Communities, Inc. | 3.6% |
Public Storage | 3.5% |
UDR, Inc. | 3.4% |
Sector Allocation | % of net assets |
Residential | 19.4% |
Diversified | 17.6% |
Retail | 17.6% |
Industrial | 10.4% |
Office | 9.6% |
Lodging/Resorts | 9.5% |
Health Care | 8.9% |
Self Storage | 6.3% |
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 | 0.9% |
Other Assets and Liabilities | (0.2)% |
3
Shareholder Fee Example |
Fund shareholders may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption/exchange fees; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in your fund and to compare these costs with the ongoing cost of investing in other mutual funds.
The example is based on an investment of $1,000 made at the beginning of the period and held for the entire period from November 1, 2017 to April 30, 2018.
Actual Expenses
The table provides information about actual account values and actual expenses for each class. You may use the information, together with the amount you invested, to estimate the expenses that you paid over the period. First, identify the share class you own. Then simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
If you hold Investor Class shares of any American Century Investments fund, or I Class shares of the American Century Diversified Bond Fund, in an American Century Investments account (i.e., not a financial intermediary or retirement plan account), American Century Investments may charge you a $12.50 semiannual account maintenance fee if the value of those shares is less than $10,000. We will redeem shares automatically in one of your accounts to pay the $12.50 fee. In determining your total eligible investment amount, we will include your investments in all personal accounts (including American Century Investments Brokerage accounts) registered under your Social Security number. Personal accounts include individual accounts, joint accounts, UGMA/UTMA accounts, personal trusts, Coverdell Education Savings Accounts and IRAs (including traditional, Roth, Rollover, SEP-, SARSEP- and SIMPLE-IRAs), and certain other retirement accounts. If you have only business, business retirement, employer-sponsored or American Century Investments Brokerage accounts, you are currently not subject to this fee. If you are subject to the Account Maintenance Fee, your account value could be reduced by the fee amount.
Hypothetical Example for Comparison Purposes
The table also provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio of each class of your fund and an assumed rate of return of 5% per year before expenses, which is not the actual return of a fund’s share class. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) or redemption/exchange fees. Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
4
Beginning Account Value 11/1/17 | Ending Account Value 4/30/18 | Expenses Paid During Period(1) 11/1/17 - 4/30/18 | Annualized Expense Ratio(1) | |
Actual | ||||
Investor Class | $1,000 | $968.40 | $5.61 | 1.15% |
I Class | $1,000 | $969.40 | $4.64 | 0.95% |
Y Class | $1,000 | $969.80 | $3.91 | 0.80% |
A Class | $1,000 | $966.80 | $6.83 | 1.40% |
C Class | $1,000 | $963.30 | $10.47 | 2.15% |
R Class | $1,000 | $965.70 | $8.04 | 1.65% |
R5 Class | $1,000 | $969.10 | $4.64 | 0.95% |
R6 Class | $1,000 | $969.80 | $3.91 | 0.80% |
Hypothetical | ||||
Investor Class | $1,000 | $1,019.09 | $5.76 | 1.15% |
I Class | $1,000 | $1,020.08 | $4.76 | 0.95% |
Y Class | $1,000 | $1,020.83 | $4.01 | 0.80% |
A Class | $1,000 | $1,017.85 | $7.00 | 1.40% |
C Class | $1,000 | $1,014.13 | $10.74 | 2.15% |
R Class | $1,000 | $1,016.61 | $8.25 | 1.65% |
R5 Class | $1,000 | $1,020.08 | $4.76 | 0.95% |
R6 Class | $1,000 | $1,020.83 | $4.01 | 0.80% |
(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. Annualized expense ratio reflects actual expenses, including any applicable fee waivers or expense reimbursements and excluding any acquired fund fees and expenses. |
5
Schedule of Investments |
APRIL 30, 2018 (UNAUDITED)
Shares | Value | ||||
COMMON STOCKS — 99.3% | |||||
Diversified — 17.6% | |||||
Blackstone Group LP (The) | 147,990 | $ | 4,580,290 | ||
CyrusOne, Inc. | 203,405 | 10,900,474 | |||
Digital Realty Trust, Inc. | 228,786 | 24,180,392 | |||
Equinix, Inc. | 117,926 | 49,622,082 | |||
InterXion Holding NV(1) | 194,347 | 12,636,442 | |||
JBG SMITH Properties | 257,384 | 9,489,748 | |||
Rayonier, Inc. | 546,302 | 20,316,971 | |||
SBA Communications Corp.(1) | 76,204 | 12,210,167 | |||
Starwood Property Trust, Inc. | 463,728 | 9,719,739 | |||
Weyerhaeuser Co. | 551,879 | 20,298,110 | |||
173,954,415 | |||||
Health Care — 8.9% | |||||
HCP, Inc. | 1,191,700 | 27,838,112 | |||
Healthcare Realty Trust, Inc. | 589,083 | 16,394,180 | |||
Healthcare Trust of America, Inc., Class A | 604,377 | 15,103,381 | |||
Sabra Health Care REIT, Inc. | 790,786 | 14,479,292 | |||
Welltower, Inc. | 273,147 | 14,596,976 | |||
88,411,941 | |||||
Industrial — 10.4% | |||||
Duke Realty Corp. | 964,953 | 26,150,226 | |||
First Industrial Realty Trust, Inc. | 501,757 | 15,609,660 | |||
Prologis, Inc. | 932,652 | 60,538,442 | |||
102,298,328 | |||||
Lodging/Resorts — 9.5% | |||||
Hilton Worldwide Holdings, Inc. | 153,914 | 12,134,579 | |||
Host Hotels & Resorts, Inc. | 2,055,380 | 40,203,233 | |||
Park Hotels & Resorts, Inc. | 1,042,882 | 30,014,144 | |||
Sunstone Hotel Investors, Inc. | 712,148 | 11,109,509 | |||
93,461,465 | |||||
Office — 9.6% | |||||
Alexandria Real Estate Equities, Inc. | 319,008 | 39,738,826 | |||
Boston Properties, Inc. | 243,507 | 29,564,185 | |||
Columbia Property Trust, Inc. | 589,453 | 12,590,716 | |||
Douglas Emmett, Inc. | 340,444 | 12,688,348 | |||
94,582,075 | |||||
Residential — 19.4% | |||||
Camden Property Trust | 279,347 | 23,856,234 | |||
Essex Property Trust, Inc. | 170,027 | 40,753,771 | |||
Invitation Homes, Inc. | 1,546,526 | 35,786,612 | |||
Mid-America Apartment Communities, Inc. | 244,302 | 22,343,861 | |||
Sun Communities, Inc. | 380,648 | 35,723,815 | |||
UDR, Inc. | 915,585 | 33,098,398 | |||
191,562,691 | |||||
Retail — 17.6% | |||||
Agree Realty Corp. | 342,107 | 16,722,190 |
6
Shares | Value | ||||
GGP, Inc. | 726,545 | $ | 14,523,635 | ||
Regency Centers Corp. | 400,012 | 23,540,706 | |||
Retail Properties of America, Inc., Class A | 1,515,112 | 17,484,393 | |||
Simon Property Group, Inc. | 316,834 | 49,533,828 | |||
Spirit Realty Capital, Inc. | 1,985,267 | 15,981,399 | |||
STORE Capital Corp. | 1,145,627 | 28,904,169 | |||
Taubman Centers, Inc. | 31,780 | 1,779,044 | |||
Urban Edge Properties | 263,413 | 5,418,405 | |||
173,887,769 | |||||
Self Storage — 6.3% | |||||
Extra Space Storage, Inc. | 317,124 | 28,411,139 | |||
Public Storage | 170,067 | 34,316,119 | |||
62,727,258 | |||||
TOTAL COMMON STOCKS (Cost $852,344,046) | 980,885,942 | ||||
TEMPORARY CASH INVESTMENTS — 0.9% | |||||
Repurchase Agreement, BMO Capital Markets Corp., (collateralized by various U.S. Treasury obligations, 0.875% - 3.75%, 7/31/18 - 8/15/43, valued at $4,771,103), in a joint trading account at 1.46%, dated 4/30/18, due 5/1/18 (Delivery value $4,670,737) | 4,670,548 | ||||
Repurchase Agreement, Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 2.125%, 5/15/25, valued at $3,974,881), at 0.74%, dated 4/30/18, due 5/1/18 (Delivery value $3,893,080) | 3,893,000 | ||||
State Street Institutional U.S. Government Money Market Fund, Premier Class | 76,499 | 76,499 | |||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $8,640,047) | 8,640,047 | ||||
TOTAL INVESTMENT SECURITIES — 100.2% (Cost $860,984,093) | 989,525,989 | ||||
OTHER ASSETS AND LIABILITIES — (0.2)% | (1,822,680 | ) | |||
TOTAL NET ASSETS — 100.0% | $ | 987,703,309 |
NOTES TO SCHEDULE OF INVESTMENTS |
(1) | Non-income producing. |
See Notes to Financial Statements.
7
Statement of Assets and Liabilities |
APRIL 30, 2018 (UNAUDITED) | |||
Assets | |||
Investment securities, at value (cost of $860,984,093) | $ | 989,525,989 | |
Receivable for investments sold | 14,693,844 | ||
Receivable for capital shares sold | 420,558 | ||
Dividends and interest receivable | 35,506 | ||
1,004,675,897 | |||
Liabilities | |||
Payable for investments purchased | 13,906,872 | ||
Payable for capital shares redeemed | 2,188,503 | ||
Accrued management fees | 854,601 | ||
Distribution and service fees payable | 22,612 | ||
16,972,588 | |||
Net Assets | $ | 987,703,309 | |
Net Assets Consist of: | |||
Capital (par value and paid-in surplus) | $ | 870,728,394 | |
Undistributed net investment income | 2,689,431 | ||
Accumulated net realized loss | (14,256,412 | ) | |
Net unrealized appreciation | 128,541,896 | ||
$ | 987,703,309 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | ||||
Investor Class, $0.01 Par Value | $601,452,589 | 22,804,307 | $26.37 | |||
I Class, $0.01 Par Value | $125,238,791 | 4,735,788 | $26.45 | |||
Y Class, $0.01 Par Value | $4,865 | 184 | $26.44 | |||
A Class, $0.01 Par Value | $60,044,202 | 2,279,609 | $26.34* | |||
C Class, $0.01 Par Value | $7,811,680 | 304,520 | $25.65 | |||
R Class, $0.01 Par Value | $8,730,300 | 333,875 | $26.15 | |||
R5 Class, $0.01 Par Value | $4,867 | 184 | $26.45 | |||
R6 Class, $0.01 Par Value | $184,416,015 | 6,975,284 | $26.44 |
*Maximum offering price $27.95 (net asset value divided by 0.9425).
See Notes to Financial Statements.
8
Statement of Operations |
FOR THE SIX MONTHS ENDED APRIL 30, 2018 (UNAUDITED) | |||
Investment Income (Loss) | |||
Income: | |||
Dividends | $ | 15,599,113 | |
Interest | 29,793 | ||
15,628,906 | |||
Expenses: | |||
Management fees | 5,534,379 | ||
Distribution and service fees: | |||
A Class | 86,179 | ||
C Class | 44,679 | ||
R Class | 24,068 | ||
Directors' fees and expenses | 8,517 | ||
Other expenses | 884 | ||
5,698,706 | |||
Net investment income (loss) | 9,930,200 | ||
Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on investment transactions | 8,080,984 | ||
Change in net unrealized appreciation (depreciation) on investments | (51,489,413 | ) | |
Net realized and unrealized gain (loss) | (43,408,429 | ) | |
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | (33,478,229 | ) |
See Notes to Financial Statements.
9
Statement of Changes in Net Assets |
SIX MONTHS ENDED APRIL 30, 2018 (UNAUDITED) AND YEAR ENDED OCTOBER 31, 2017 | ||||||
Increase (Decrease) in Net Assets | April 30, 2018 | October 31, 2017 | ||||
Operations | ||||||
Net investment income (loss) | $ | 9,930,200 | $ | 28,933,196 | ||
Net realized gain (loss) | 8,080,984 | 47,543,556 | ||||
Change in net unrealized appreciation (depreciation) | (51,489,413) | (32,253,565) | ||||
Net increase (decrease) in net assets resulting from operations | (33,478,229) | 44,223,187 | ||||
Distributions to Shareholders | ||||||
From net investment income: | ||||||
Investor Class | (5,548,931) | (11,194,822) | ||||
I Class | (1,300,624) | (2,580,690) | ||||
Y Class | (52) | (9 | ) | |||
A Class | (506,478) | (1,641,012) | ||||
C Class | (41,210) | (139,917) | ||||
R Class | (57,604) | (162,465) | ||||
R5 Class | (48) | (6 | ) | |||
R6 Class | (1,932,538) | (2,753,194 | ) | |||
From net realized gains: | ||||||
Investor Class | (29,297,604) | (74,289,411 | ) | |||
I Class | (6,478,548) | (14,907,349 | ) | |||
Y Class | (218) | — | ||||
A Class | (3,240,185) | (12,052,353 | ) | |||
C Class | (437,130) | (1,254,529 | ) | |||
R Class | (453,757) | (1,257,208 | ) | |||
R5 Class | (218) | — | ||||
R6 Class | (7,496,534) | (13,883,131 | ) | |||
Decrease in net assets from distributions | (56,791,679) | (136,116,096) | ||||
Capital Share Transactions | ||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | (58,069,096 | ) | (203,411,457) | |||
Net increase (decrease) in net assets | (148,339,004) | (295,304,366) | ||||
Net Assets | ||||||
Beginning of period | 1,136,042,313 | 1,431,346,679 | ||||
End of period | $ | 987,703,309 | $ | 1,136,042,313 | ||
Undistributed net investment income | $ | 2,689,431 | $ | 2,146,716 |
See Notes to Financial Statements.
10
Notes to Financial Statements |
APRIL 30, 2018 (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, 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 exchanges. The factor is based on observable market data as provided by an independent pricing service.
11
Security Transactions — Security transactions are accounted for as of the trade date. Net realized gains and losses are determined on the identified cost basis, which is also used for federal income tax purposes.
Investment Income — Dividend income less foreign taxes withheld, if any, is recorded as of the ex-dividend date. Distributions received on securities that represent a return of capital or long-term capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The fund may estimate the components of distributions received that may be considered nontaxable distributions or long-term capital gain distributions for income tax purposes. Interest income is recorded on the accrual basis and includes accretion of discounts and amortization of premiums.
Repurchase Agreements — The fund may enter into repurchase agreements with institutions that American Century Investment Management, Inc. (ACIM) (the investment advisor) has determined are creditworthy pursuant to criteria adopted by the Board of Directors. The fund requires that the collateral, represented by securities, received in a repurchase transaction be transferred to the custodian in a manner sufficient to enable the fund to obtain those securities in the event of a default under the repurchase agreement. ACIM monitors, on a daily basis, the securities transferred to ensure the value, including accrued interest, of the securities under each repurchase agreement is equal to or greater than amounts owed to the fund under each repurchase agreement.
Joint Trading Account — Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the fund, along with certain other funds in the American Century Investments family of funds, may transfer uninvested cash balances into a joint trading account. These balances are invested in one or more repurchase agreements that are collateralized by U.S. Treasury or Agency obligations.
Income Tax Status — It is the fund’s policy to distribute substantially all net investment income and net realized gains to shareholders and to otherwise qualify as a regulated investment company under provisions of the Internal Revenue Code. Accordingly, no provision has been made for income taxes. The fund files U.S. federal, state, local and non-U.S. tax returns as applicable. The fund's tax returns are subject to examination by the relevant taxing authority until expiration of the applicable statute of limitations, which is generally three years from the date of filing but can be longer in certain jurisdictions. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination and for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Multiple Class — All shares of the fund represent an equal pro rata interest in the net assets of the class to which such shares belong, and have identical voting, dividend, liquidation and other rights and the same terms and conditions, except for class specific expenses and exclusive rights to vote on matters affecting only individual classes. Income, non-class specific expenses, and realized and unrealized capital gains and losses of the fund are allocated to each class of shares based on their relative net assets.
Distributions to Shareholders — Distributions from net investment income, if any, are generally declared and paid quarterly. Distributions from net realized gains, if any, are generally declared and paid annually.
Indemnifications — Under the corporation’s organizational documents, its officers and directors are indemnified against certain liabilities arising out of the performance of their duties to the fund. In addition, in the normal course of business, the fund enters into contracts that provide general indemnifications. The maximum exposure under these arrangements is unknown as this would involve future claims that may be made against a fund. The risk of material loss from such claims is considered by management to be remote.
3. Fees and Transactions with Related Parties
Certain officers and directors of the corporation are also officers and/or directors of American Century Companies, Inc. (ACC). The corporation’s investment advisor, ACIM, the corporation's distributor, American Century Investment Services, Inc. (ACIS), and the corporation’s transfer agent, American Century Services, LLC, are wholly owned, directly or indirectly, by ACC.
Management Fees — The corporation has entered into a management agreement with ACIM, under which ACIM provides the fund with investment advisory and management services in exchange for a single, unified management fee (the fee) per class. The agreement provides that all expenses of managing and operating the fund, except distribution and service fees, brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), and extraordinary expenses, will be paid by ACIM. The fee is computed and accrued daily based on each class's daily net assets and paid monthly in arrears. The
12
difference in the fee among the classes is a result of their separate arrangements for non-Rule 12b-1 shareholder services. It is not the result of any difference in advisory or custodial fees or other expenses related to the management of the fund’s assets, which do not vary by class. The rate of the fee is determined by applying a fee rate calculation formula. This formula takes into account the fund’s assets as well as certain assets, if any, of other clients of the investment advisor outside the American Century Investments family of funds (such as subadvised funds and separate accounts) that use very similar investment teams and strategies (strategy assets).
The management fee schedule range and the effective annual management fee for each class for the period ended April 30, 2018 are as follows:
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, 2018 are detailed in the Statement of Operations.
Directors' Fees and Expenses — The Board of Directors is responsible for overseeing the investment advisor’s management and operations of the fund. The directors receive detailed information about the fund and its investment advisor regularly throughout the year, and meet at least quarterly with management of the investment advisor to review reports about fund operations. The fund’s officers do not receive compensation from the fund.
Interfund Transactions — The fund may enter into security transactions with other American Century Investments funds and other client accounts of the investment advisor, in accordance with the 1940 Act rules and procedures adopted by the Board of Directors. The rules and procedures require, among other things, that these transactions be effected at the independent current market price of the security. During the period, the interfund purchases and sales were $3,023,244 and $499,867, respectively. The effect of interfund transactions on the Statement of Operations was $(65,265) 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, 2018 were $760,302,889 and $858,943,489, respectively.
13
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended April 30, 2018 | Year ended October 31, 2017(1) | |||||||||
Shares | Amount | Shares | Amount | |||||||
Investor Class/Shares Authorized | 170,000,000 | 170,000,000 | ||||||||
Sold | 1,456,003 | $ | 39,489,740 | 5,233,070 | $ | 149,322,773 | ||||
Issued in reinvestment of distributions | 1,237,626 | 34,359,603 | 2,958,555 | 83,694,334 | ||||||
Redeemed | (4,099,032 | ) | (111,453,980 | ) | (13,626,337 | ) | (389,676,379 | ) | ||
(1,405,403 | ) | (37,604,637 | ) | (5,434,712 | ) | (156,659,272 | ) | |||
I Class/Shares Authorized | 60,000,000 | 60,000,000 | ||||||||
Sold | 685,471 | 18,584,243 | 2,286,891 | 65,508,340 | ||||||
Issued in reinvestment of distributions | 218,628 | 6,088,429 | 500,344 | 14,194,159 | ||||||
Redeemed | (1,967,611 | ) | (55,180,189 | ) | (2,941,986 | ) | (84,743,525 | ) | ||
(1,063,512 | ) | (30,507,517 | ) | (154,751 | ) | (5,041,026 | ) | |||
Y Class/Shares Authorized | 50,000,000 | 50,000,000 | ||||||||
Sold | — | — | 174 | 5,000 | ||||||
Issued in reinvestment of distributions | 9 | 270 | 1 | 9 | ||||||
9 | 270 | 175 | 5,009 | |||||||
A Class/Shares Authorized | 50,000,000 | 50,000,000 | ||||||||
Sold | 223,744 | 6,058,847 | 845,845 | 24,134,668 | ||||||
Issued in reinvestment of distributions | 121,095 | 3,359,504 | 455,114 | 12,873,186 | ||||||
Redeemed | (822,129 | ) | (22,385,960 | ) | (3,537,557 | ) | (100,816,548 | ) | ||
(477,290 | ) | (12,967,609 | ) | (2,236,598 | ) | (63,808,694 | ) | |||
C Class/Shares Authorized | 10,000,000 | 10,000,000 | ||||||||
Sold | 6,724 | 179,438 | 39,423 | 1,106,180 | ||||||
Issued in reinvestment of distributions | 14,891 | 403,228 | 38,816 | 1,077,347 | ||||||
Redeemed | (75,241 | ) | (1,960,800 | ) | (249,754 | ) | (7,075,071 | ) | ||
(53,626 | ) | (1,378,134 | ) | (171,515 | ) | (4,891,544 | ) | |||
R Class/Shares Authorized | 10,000,000 | 10,000,000 | ||||||||
Sold | 78,339 | 2,103,365 | 213,899 | 6,099,275 | ||||||
Issued in reinvestment of distributions | 15,449 | 425,586 | 39,553 | 1,113,092 | ||||||
Redeemed | (161,796 | ) | (4,433,729 | ) | (477,119 | ) | (13,883,883 | ) | ||
(68,008 | ) | (1,904,778 | ) | (223,667 | ) | (6,671,516 | ) | |||
R5 Class/Shares Authorized | 50,000,000 | 50,000,000 | ||||||||
Sold | — | — | 173 | 5,000 | ||||||
Issued in reinvestment of distributions | 10 | 266 | 1 | 6 | ||||||
10 | 266 | 174 | 5,006 | |||||||
R6 Class/Shares Authorized | 50,000,000 | 50,000,000 | ||||||||
Sold | 1,612,948 | 44,482,503 | 2,275,262 | 66,033,837 | ||||||
Issued in reinvestment of distributions | 339,513 | 9,429,072 | 586,520 | 16,636,325 | ||||||
Redeemed | (1,003,590 | ) | (27,618,532 | ) | (1,707,874 | ) | (49,019,582 | ) | ||
948,871 | 26,293,043 | 1,153,908 | 33,650,580 | |||||||
Net increase (decrease) | (2,118,949 | ) | $ | (58,069,096 | ) | (7,066,986 | ) | $ | (203,411,457 | ) |
(1) | April 10, 2017 (commencement of sale) through October 31, 2017 for the Y Class and R5 Class. |
14
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 | $ | 980,885,942 | — | — | ||||
Temporary Cash Investments | 76,499 | $ | 8,563,548 | — | ||||
$ | 980,962,441 | $ | 8,563,548 | — |
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 | $ | 883,660,488 | |
Gross tax appreciation of investments | $ | 120,286,900 | |
Gross tax depreciation of investments | (14,421,399 | ) | |
Net tax appreciation (depreciation) of investments | $ | 105,865,501 |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales.
15
Financial Highlights |
For a Share Outstanding Throughout the Years Ended 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 | |||||||||||||||
2018(3) | $28.71 | 0.25 | (1.10) | (0.85) | (0.24) | (1.25) | (1.49) | $26.37 | (3.16)% | 1.15%(4) | 1.85%(4) | 72% | $601,453 | ||
2017 | $30.69 | 0.64 | 0.35 | 0.99 | (0.36) | (2.61) | (2.97) | $28.71 | 3.47% | 1.15% | 2.21% | 145% | $695,132 | ||
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 | ||
I Class | |||||||||||||||
2018(3) | $28.79 | 0.28 | (1.11) | (0.83) | (0.26) | (1.25) | (1.51) | $26.45 | (3.06)% | 0.95%(4) | 2.05%(4) | 72% | $125,239 | ||
2017 | $30.77 | 0.69 | 0.36 | 1.05 | (0.42) | (2.61) | (3.03) | $28.79 | 3.67% | 0.95% | 2.41% | 145% | $166,938 | ||
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 | ||
Y Class | |||||||||||||||
2018(3) | $28.78 | 0.29 | (1.10) | (0.81) | (0.28) | (1.25) | (1.53) | $26.44 | (3.02)% | 0.80%(4) | 2.20%(4) | 72% | $5 | ||
2017(5) | $28.68 | 0.27 | (0.12) | 0.15 | (0.05) | — | (0.05) | $28.78 | 0.54% | 0.80%(4) | 1.70%(4) | 145%(6) | $5 |
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) | |||
A Class | |||||||||||||||
2018(3) | $28.68 | 0.22 | (1.11) | (0.89) | (0.20) | (1.25) | (1.45) | $26.34 | (3.32)% | 1.40%(4) | 1.60%(4) | 72% | $60,044 | ||
2017 | $30.70 | 0.59 | 0.33 | 0.92 | (0.33) | (2.61) | (2.94) | $28.68 | 3.23% | 1.40% | 1.96% | 145% | $79,060 | ||
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 | ||
C Class | |||||||||||||||
2018(3) | $27.99 | 0.11 | (1.07) | (0.96) | (0.13) | (1.25) | (1.38) | $25.65 | (3.67)% | 2.15%(4) | 0.85%(4) | 72% | $7,812 | ||
2017 | $30.18 | 0.37 | 0.32 | 0.69 | (0.27) | (2.61) | (2.88) | $27.99 | 2.46% | 2.15% | 1.21% | 145% | $10,025 | ||
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 | ||
R Class | |||||||||||||||
2018(3) | $28.48 | 0.18 | (1.09) | (0.91) | (0.17) | (1.25) | (1.42) | $26.15 | (3.43)% | 1.65%(4) | 1.35%(4) | 72% | $8,730 | ||
2017 | $30.55 | 0.55 | 0.30 | 0.85 | (0.31) | (2.61) | (2.92) | $28.48 | 3.00% | 1.65% | 1.71% | 145% | $11,445 | ||
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 |
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) | |||
R5 Class | |||||||||||||||
2018(3) | $28.79 | 0.27 | (1.10) | (0.83) | (0.26) | (1.25) | (1.51) | $26.45 | (3.09)% | 0.95%(4) | 2.05%(4) | 72% | $5 | ||
2017(5) | $28.69 | 0.25 | (0.11) | 0.14 | (0.04) | — | (0.04) | $28.79 | 0.47% | 0.95%(4) | 1.55%(4) | 145%(6) | $5 | ||
R6 Class | |||||||||||||||
2018(3) | $28.78 | 0.29 | (1.10) | (0.81) | (0.28) | (1.25) | (1.53) | $26.44 | (3.02)% | 0.80%(4) | 2.20%(4) | 72% | $184,416 | ||
2017 | $30.76 | 0.72 | 0.37 | 1.09 | (0.46) | (2.61) | (3.07) | $28.78 | 3.86% | 0.80% | 2.56% | 145% | $173,431 | ||
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(7) | $25.22 | 0.07 | (0.53) | (0.46) | (0.15) | — | (0.15) | $24.61 | (1.77)% | 0.79%(4) | 1.04%(4) | 170%(8) | $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, 2018 (unaudited). |
(4) | Annualized. |
(5) | April 10, 2017 (commencement of sale) through October 31, 2017. |
(6) | Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended October 31, 2017. |
(7) | July 26, 2013 (commencement of sale) through October 31, 2013. |
(8) | 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 retirement accounts are subject to federal income tax withholding, unless you elect not to have withholding apply*. Tax will be withheld on the total amount withdrawn even though you may be receiving amounts that are not subject to withholding, such as nondeductible contributions. In such case, excess amounts of withholding could occur. You may adjust your withholding election so that a greater or lesser amount will be withheld.
If you don’t want us to withhold on this amount, you must notify us to not withhold the federal income tax. You may notify us in writing or in certain situations by telephone or through other electronic means. For systematic withdrawals, your withholding election will remain in effect until revoked or changed by filing a new election. You have the right to revoke your election at any time and change your withholding percentage for future distributions.
Remember, even if you elect not to have income tax withheld, you are liable for paying income tax on the taxable portion of your withdrawal. If you elect not to have income tax withheld or you don’t have enough income tax withheld, you may be responsible for payment of estimated tax. You may incur penalties under the estimated tax rules if your withholding and estimated tax payments are not sufficient. You can reduce or defer the income tax on a distribution by directly or indirectly rolling such distribution over to another IRA or eligible plan. You should consult your tax advisor for additional information.
State tax will be withheld if, at the time of your distribution, your address is within one of the mandatory withholding states and you have federal income tax withheld (or as otherwise required by state law). State taxes will be withheld from your distribution in accordance with the respective state rules.
*Some 403(b), 457 and qualified retirement plan distributions may be subject to 20% mandatory withholding, as they are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
A description of the policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund is available without charge, upon request, by calling 1-800-345-2021. It is also available on the "About Us" page of American Century Investments’ website at americancentury.com and on the Securities and Exchange Commission’s website at sec.gov. Information regarding how the investment advisor voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the "About Us" page at americancentury.com. It is also available at sec.gov.
Quarterly Portfolio Disclosure
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-Q. The fund’s Forms N-Q are available on the SEC’s website at sec.gov, and may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The fund also makes its complete schedule of portfolio holdings for the most recent quarter of its fiscal year available on its website at americancentury.com and, upon request, by calling 1-800-345-2021.
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. | ||
©2018 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-92367 1806 |
ITEM 2. CODE OF ETHICS.
Not applicable for semiannual report filings.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable for semiannual report filings.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable for semiannual report filings.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. INVESTMENTS.
(a) | The schedule of investments is included as part of the report to stockholders filed under Item 1 of this Form. |
(b) | Not applicable. |
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
During the reporting period, there were no material changes to the procedures by which shareholders may recommend nominees to the registrant’s board.
ITEM 11. CONTROLS AND PROCEDURES.
(a) | The registrant's principal executive officer and principal financial officer have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) are effective based on their evaluation of these controls and procedures as of a date within 90 days of the filing date of this report. |
(b) | There were no changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant's internal control over financial reporting. |
ITEM 12. DISCLOSURE OF SECURITIES LENDING ACTIVITIES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 13. EXHIBITS.
(a)(1) | Not applicable for semiannual report filings. |
(a)(2) | Separate certifications by the registrant’s principal executive officer and principal financial officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 and Rule 30a-2(a) under the Investment Company Act of 1940, are filed and attached hereto as EX-99.CERT. |
(a)(3) | Not applicable. |
(a)(4) | Not applicable. |
(b) | A certification by the registrant’s chief executive officer and chief financial officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, is furnished and attached hereto as EX- 99.906CERT. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Registrant: | American Century Capital Portfolios, Inc. | ||
By: | /s/ Jonathan S. Thomas | ||
Name: | Jonathan S. Thomas | ||
Title: | President | ||
Date: | June 27, 2018 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By: | /s/ Jonathan S. Thomas | |
Name: | Jonathan S. Thomas | |
Title: | President | |
(principal executive officer) | ||
Date: | June 27, 2018 |
By: | /s/ C. Jean Wade | |
Name: | C. Jean Wade | |
Title: | Vice President, Treasurer, and | |
Chief Financial Officer | ||
(principal financial officer) | ||
Date: | June 27, 2018 |