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) | |||||||||||||||||||
JOHN PAK 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: | 03-31 | |||||||||||||||||||
Date of reporting period: | 03-31-2024 |
ITEM 1. REPORTS TO STOCKHOLDERS.
(a) Provided under separate cover.
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Annual Report | |||||
March 31, 2024 | |||||
Equity Income Fund | |||||
Investor Class (TWEIX) | |||||
I Class (ACIIX) | |||||
Y Class (AEIYX) | |||||
A Class (TWEAX) | |||||
C Class (AEYIX) | |||||
R Class (AEURX) | |||||
R5 Class (AEIUX) | |||||
R6 Class (AEUDX) | |||||
G Class (AEIMX) |
The Securities and Exchange Commission (SEC) adopted new rules that will require annual and semiannual reports to transition to a new format known as a Tailored Shareholder Report beginning in July 2024. The amendments will require the transmission of a concise report highlighting key fund information to investors. The detailed financial statements will remain available on our website, will be delivered to investors free of charge upon request, and will continue to be filed with the SEC.
Table of Contents |
President’s Letter | |||||
Performance | |||||
Portfolio Commentary | |||||
Fund Characteristics | |||||
Shareholder Fee Example | |||||
Schedule of Investments | |||||
Statement of Assets and Liabilities | |||||
Statement of Operations | |||||
Statement of Changes in Net Assets | |||||
Notes to Financial Statements | |||||
Financial Highlights | |||||
Report of Independent Registered Public Accounting Firm | |||||
Management | |||||
Liquidity Risk Management Program | |||||
Additional Information |
Any opinions expressed in this report reflect those of the author as of the date of the report, and do not necessarily represent the opinions of American Century Investments® or any other person in the American Century Investments organization. Any such opinions are subject to change at any time based upon market or other conditions and American Century Investments disclaims any responsibility to update such opinions. These opinions may not be relied upon as investment advice and, because investment decisions made by American Century Investments funds are based on numerous factors, may not be relied upon as an indication of trading intent on behalf of any American Century Investments fund. Security examples are used for representational purposes only and are not intended as recommendations to purchase or sell securities. Performance information for comparative indices and securities is provided to American Century Investments by third party vendors. To the best of American Century Investments’ knowledge, such information is accurate at the time of printing.
President’s Letter |
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Dear Investor:
Thank you for reviewing this annual report for the period ending March 31, 2024. Annual reports help convey important information about fund returns, including market factors that affected performance. For additional investment insights, please visit americancentury.com.
Stocks Surged While Bonds Delivered Modest Gains
Soaring U.S. Treasury yields weighed on bond returns for the first six months of the reporting period. Meanwhile, inflation slowed but remained well above the Federal Reserve’s (Fed’s) target, lending conditions tightened, and recession risk rose. This fueled expectations for a shift in Fed policy, which, along with better-than-expected earnings, helped U.S. stocks deliver modest gains.
The Fed lifted rates in May, paused in June and hiked again in July to a range of 5.25% to 5.5%, a 22-year high. The Fed left rates unchanged in September but warned that persistent above-target inflation may require more tightening. This news pushed Treasury yields to multiyear highs in October and sent stocks tumbling. By November, inflation showed signs of moderating, and the Fed held rates steady again, reviving investor enthusiasm. Then, in December, Fed policymakers expressed more confidence about the inflation outlook and forecasted three rate cuts for 2024. Against this backdrop, recession fears eased, Treasury yields declined, and stocks and bonds ended 2023 on a strong note.
Despite the Fed’s continued pause, yields reversed course again in early 2024 amid a steady stream of better-than-expected economic data and persistent inflation. But the bond market’s late-2023 rally helped the Bloomberg U.S. Aggregate Bond Index maintain a gain of 1.70% for the 12-month period. Most stock indices continued to rally into 2024, buoyed by solid corporate earnings and expectations for Fed rate cuts. The S&P 500 Index returned 29.88% for the 12-month period, and growth stocks generally outperformed value stocks.
Remaining Diligent in Uncertain Times
We expect market volatility to linger as investors navigate a complex environment of persistent inflation, still-tight financial conditions, political uncertainty and slowing growth. In addition, the Israel-Hamas war and other tensions in the Middle East complicate the global backdrop and represent additional considerations for our investment teams.
Our firm has a long history of helping clients weather unpredictable and volatile markets, and we’re determined to meet today’s challenges. Thank you for your trust and confidence in American Century Investments.
With appreciation and respect,
![image48a16a.jpg](https://capedge.com/proxy/N-CSR/0000908186-24-000015/image48a16a.jpg)
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
2
Performance |
Total Returns as of March 31, 2024 | ||||||||||||||||||||
Average Annual Returns | ||||||||||||||||||||
Ticker Symbol | 1 year | 5 years | 10 years | Since Inception | Inception Date | |||||||||||||||
Investor Class | TWEIX | 9.09% | 7.08% | 8.21% | — | 8/1/94 | ||||||||||||||
Russell 3000 Value Index | — | 20.18% | 10.18% | 8.86% | — | — | ||||||||||||||
I Class | ACIIX | 9.29% | 7.28% | 8.42% | — | 7/8/98 | ||||||||||||||
Y Class | AEIYX | 9.44% | 7.46% | — | 7.53% | 4/10/17 | ||||||||||||||
A Class | TWEAX | 3/7/97 | ||||||||||||||||||
No sales charge | 8.82% | 6.81% | 7.94% | — | ||||||||||||||||
With sales charge | 2.56% | 5.55% | 7.30% | — | ||||||||||||||||
C Class | AEYIX | 8.00% | 6.01% | 7.14% | — | 7/13/01 | ||||||||||||||
R Class | AEURX | 8.46% | 6.53% | 7.67% | — | 8/29/03 | ||||||||||||||
R5 Class | AEIUX | 9.30% | 7.27% | — | 7.35% | 4/10/17 | ||||||||||||||
R6 Class | AEUDX | 9.44% | 7.43% | 8.58% | — | 7/26/13 | ||||||||||||||
G Class | AEIMX | 10.06% | — | — | 7.50% | 8/1/19 |
Average annual returns since inception are presented when ten years of performance history is not available.
G Class returns would have been lower if a portion of the fees had not been waived.
C Class shares will automatically convert to A Class shares after being held for approximately eight years. C Class average annual returns do not reflect this conversion.
Sales charges include initial sales charges and contingent deferred sales charges (CDSCs), as applicable. A Class shares have a 5.75% maximum initial sales charge and may be subject to a maximum CDSC of 1.00%. C Class shares redeemed within 12 months of purchase are subject to a maximum CDSC of 1.00%. The SEC requires that mutual funds provide performance information net of maximum sales charges in all cases where charges could be applied.
Data presented reflect past performance. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance shown. Total returns for periods less than one year are not annualized. Investment return and principal value will fluctuate, and redemption value may be more or less than original cost. Data assumes reinvestment of dividends and capital gains, and none of the charts reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. To obtain performance data current to the most recent month end, please call 1-800-345-2021 or visit americancentury.com. For additional information about the fund, please consult the prospectus.
3
Growth of $10,000 Over 10 Years | ||
$10,000 investment made March 31, 2014 | ||
Performance for other share classes will vary due to differences in fee structure. |
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Value on March 31, 2024 | |||||
Investor Class — $22,013 | |||||
Russell 3000 Value Index — $23,374 | |||||
Total Annual Fund Operating Expenses | ||||||||||||||||||||||||||
Investor Class | I Class | Y Class | A Class | C Class | R Class | R5 Class | R6 Class | G Class | ||||||||||||||||||
0.93% | 0.73% | 0.58% | 1.18% | 1.93% | 1.43% | 0.73% | 0.58% | 0.58% |
The total annual fund operating expenses shown is as stated in the fund’s prospectus current as of the date of this report. The prospectus may vary from the expense ratio shown elsewhere in this report because it is based on a different time period, includes acquired fund fees and expenses, and, if applicable, does not include fee waivers or expense reimbursements.
Data presented reflect past performance. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance shown. Total returns for periods less than one year are not annualized. Investment return and principal value will fluctuate, and redemption value may be more or less than original cost. Data assumes reinvestment of dividends and capital gains, and none of the charts reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. To obtain performance data current to the most recent month end, please call 1-800-345-2021 or visit americancentury.com. For additional information about the fund, please consult the prospectus.
4
Portfolio Commentary |
Portfolio Managers: Brian Woglom, Paul Howanitz, Kevin Toney and Michael Liss
Performance Summary
Equity Income returned 9.09%* for the fiscal year ended March 31, 2024, underperforming the Russell 3000 Value Index, which returned 20.18%. The fund’s return reflects operating expenses, while the index’s return does not.
Security selection in the financials and industrials sectors, in particular, pressured relative performance. In contrast, selection in materials and an underweight to real estate boosted returns.
The portfolio buys forward foreign currency contracts for hedging purposes to help protect the fund against adverse currency movements due to holding foreign securities and to isolate stock selection as the primary driver of performance. The fund benefited from the currency hedges due to the strength of the U.S. dollar.
Financials and Industrials Detracted
Our security selection in the financials sector hurt relative performance. While overweight allocations to banks and capital markets supported returns, the lack of investment in select benchmark holdings from these industries, including Wells Fargo & Co., produced a negative impact. The portfolio’s lack of exposure to the common stock of conglomerate Berkshire Hathaway also weighed on relative performance. Berkshire Hathaway’s shares benefited from the company’s solid quarterly earnings, driven by the stronger pricing power of its insurance businesses. Because the common stock of Berkshire Hathaway does not pay a dividend, the portfolio owns synthetic securities in the name. These securities provide a yield but have limited upside.
Security selection in the industrials sector hindered results, particularly in the aerospace and defense industry. During the period, aerospace and defense company, RTX, noted a production issue and its shares moved lower. We think this is a transitory event, and the movement in the stock was overdone.
Not owning Meta Platforms detracted. Shares of this technology conglomerate continued to benefit from cost-cutting efforts and the company’s investments in artificial intelligence. We do not own the stock because we think its risk/reward profile is less attractive relative to other names.
Utility stock, ONE Gas, detracted from performance. Cost inflation and debt refinancing at higher interest rates led ONE Gas to issue 2024 guidance that was below Street expectations. While these pressures will likely impact short-term earnings, we believe the company’s long-term earnings power remains intact.
Materials and Real Estate Contributed
Security selection in the materials sector boosted relative performance. Packaging Corp. of America was a contributor. This packaging and logistics company reported strong quarterly results during the period, with improved year-over-year shipments of containerboard. We think this suggests that the worst of the inventory destocking issue may be over.
An underweight allocation to the real estate sector benefited performance. The real estate sector underperformed most sectors during the period, and so the portfolio’s underweight position in real estate relative to the benchmark aided performance. Not owning several benchmark stocks across several types of real estate investment trusts gave results a boost.
*All fund returns referenced in this commentary are for Investor Class shares. Performance for other share classes will vary due to differences in fee structure; when Investor Class performance exceeds that of the fund’s benchmark, other share classes may not. See page 3 for returns for all share classes.
5
Not owning Pfizer contributed. Lack of exposure to this pharmaceutical company aided relative results. Pfizer’s shares underperformed during the period after a drug trial for its obesity treatment drug failed to show positive outcomes. The company also lowered its guidance due to reduced expectations for its COVID-19 franchise.
A position in The Allstate Corp. added value. This insurance company recently improved its profitability after implementing policy increases, particularly for its automobile insurance policies. Allstate also benefited from a more benign natural catastrophe environment.
6
Fund Characteristics |
MARCH 31, 2024 | |||||
Types of Investments in Portfolio | % of net assets | ||||
Common Stocks | 82.6% | ||||
Preferred Stocks | 8.4% | ||||
Convertible Bonds | 3.5% | ||||
Equity-Linked Notes | 2.5% | ||||
Convertible Preferred Stocks | 0.9% | ||||
Short-Term Investments | 2.5% | ||||
Other Assets and Liabilities | (0.4)% | ||||
Top Five Industries | % of net assets | ||||
Banks | 9.3% | ||||
Health Care Equipment and Supplies | 8.7% | ||||
Capital Markets | 7.9% | ||||
Pharmaceuticals | 7.9% | ||||
Oil, Gas and Consumable Fuels | 6.4% |
7
Shareholder Fee Example |
Fund shareholders may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption/exchange fees; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in your fund and to compare these costs with the ongoing cost of investing in other mutual funds.
The example is based on an investment of $1,000 made at the beginning of the period and held for the entire period from October 1, 2023 to March 31, 2024.
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 mutual fund, or I Class shares of the American Century Diversified Bond Fund, in an American Century Investments account (i.e., not through a financial intermediary or employer-sponsored retirement plan account), American Century Investments may charge you a $25 annual account maintenance fee if the value of those shares is less than $10,000. We will redeem shares automatically in one of your accounts to pay the $25 fee. In determining your total eligible investment amount, we will include your investments in all personal accounts (including American Century Investments brokerage accounts) registered under your Social Security number. Personal accounts include individual accounts, joint accounts, UGMA/UTMA accounts, personal trusts, Coverdell Education Savings Accounts and IRAs (including traditional, Roth, Rollover, SEP-, SARSEP- and SIMPLE-IRAs), and certain other retirement accounts. If you have only business, business retirement, employer-sponsored or American Century Investments brokerage accounts, you are currently not subject to this fee. If you are subject to the account maintenance fee, your account value could be reduced by the fee amount.
Hypothetical Example for Comparison Purposes
The table also provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio of each class of your fund and an assumed rate of return of 5% per year before expenses, which is not the actual return of a fund’s share class. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) or redemption/exchange fees. Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
8
Beginning Account Value 10/1/23 | Ending Account Value 3/31/24 | Expenses Paid During Period(1) 10/1/23 - 3/31/24 | Annualized Expense Ratio(1) | |||||||||||
Actual | ||||||||||||||
Investor Class | $1,000 | $1,112.10 | $4.91 | 0.93% | ||||||||||
I Class | $1,000 | $1,113.10 | $3.86 | 0.73% | ||||||||||
Y Class | $1,000 | $1,115.00 | $3.07 | 0.58% | ||||||||||
A Class | $1,000 | $1,112.10 | $6.23 | 1.18% | ||||||||||
C Class | $1,000 | $1,107.90 | $10.17 | 1.93% | ||||||||||
R Class | $1,000 | $1,110.00 | $7.54 | 1.43% | ||||||||||
R5 Class | $1,000 | $1,113.20 | $3.86 | 0.73% | ||||||||||
R6 Class | $1,000 | $1,113.80 | $3.07 | 0.58% | ||||||||||
G Class | $1,000 | $1,116.90 | $0.05 | 0.01% | ||||||||||
Hypothetical | ||||||||||||||
Investor Class | $1,000 | $1,020.35 | $4.70 | 0.93% | ||||||||||
I Class | $1,000 | $1,021.35 | $3.69 | 0.73% | ||||||||||
Y Class | $1,000 | $1,022.10 | $2.93 | 0.58% | ||||||||||
A Class | $1,000 | $1,019.10 | $5.96 | 1.18% | ||||||||||
C Class | $1,000 | $1,015.35 | $9.72 | 1.93% | ||||||||||
R Class | $1,000 | $1,017.85 | $7.21 | 1.43% | ||||||||||
R5 Class | $1,000 | $1,021.35 | $3.69 | 0.73% | ||||||||||
R6 Class | $1,000 | $1,022.10 | $2.93 | 0.58% | ||||||||||
G Class | $1,000 | $1,024.95 | $0.05 | 0.01% |
(1)Expenses are equal to the class's annualized expense ratio listed in the table above, multiplied by the average account value over the period, multiplied by 183, the number of days in the most recent fiscal half-year, divided by 366, to reflect the one-half year period. Annualized expense ratio reflects actual expenses, including any applicable fee waivers or expense reimbursements and excluding any acquired fund fees and expenses.
9
Schedule of Investments |
MARCH 31, 2024
Shares/Principal Amount | Value | |||||||
COMMON STOCKS — 82.6% | ||||||||
Aerospace and Defense — 2.1% | ||||||||
RTX Corp. | 1,775,653 | $ | 173,179,437 | |||||
Air Freight and Logistics — 1.5% | ||||||||
United Parcel Service, Inc., Class B | 831,771 | 123,626,124 | ||||||
Banks — 3.9% | ||||||||
Capitol Federal Financial, Inc. | 4,516,896 | 26,920,700 | ||||||
Commerce Bancshares, Inc. | 639,759 | 34,035,179 | ||||||
JPMorgan Chase & Co. | 750,540 | 150,333,162 | ||||||
PNC Financial Services Group, Inc. | 307,902 | 49,756,963 | ||||||
Truist Financial Corp. | 675,553 | 26,333,056 | ||||||
U.S. Bancorp | 744,284 | 33,269,495 | ||||||
320,648,555 | ||||||||
Beverages — 1.5% | ||||||||
PepsiCo, Inc. | 704,879 | 123,360,874 | ||||||
Building Products — 0.2% | ||||||||
Assa Abloy AB, Class B | 624,379 | 17,918,616 | ||||||
Capital Markets — 4.6% | ||||||||
AllianceBernstein Holding LP | 1,417,304 | 49,237,141 | ||||||
Bank of New York Mellon Corp. | 851,906 | 49,086,824 | ||||||
BlackRock, Inc. | 79,003 | 65,864,801 | ||||||
Charles Schwab Corp. | 1,114,293 | 80,607,956 | ||||||
Northern Trust Corp. | 463,807 | 41,241,718 | ||||||
T Rowe Price Group, Inc. | 746,226 | 90,979,874 | ||||||
377,018,314 | ||||||||
Chemicals — 2.0% | ||||||||
Akzo Nobel NV | 540,898 | 40,414,523 | ||||||
Linde PLC | 258,811 | 120,171,123 | ||||||
160,585,646 | ||||||||
Commercial Services and Supplies — 1.0% | ||||||||
Republic Services, Inc. | 426,045 | 81,562,055 | ||||||
Communications Equipment — 1.2% | ||||||||
Cisco Systems, Inc. | 2,024,982 | 101,066,852 | ||||||
Construction Materials — 0.7% | ||||||||
CRH PLC | 689,093 | 59,441,162 | ||||||
Consumer Staples Distribution & Retail — 1.6% | ||||||||
Koninklijke Ahold Delhaize NV | 1,729,949 | 51,763,150 | ||||||
Walmart, Inc. | 1,314,494 | 79,093,104 | ||||||
130,856,254 | ||||||||
Containers and Packaging — 1.8% | ||||||||
Amcor PLC | 4,722,961 | 44,915,359 | ||||||
Packaging Corp. of America | 539,969 | 102,475,317 | ||||||
147,390,676 | ||||||||
Diversified Telecommunication Services — 1.8% | ||||||||
Verizon Communications, Inc. | 3,567,277 | 149,682,943 | ||||||
Electric Utilities — 2.5% | ||||||||
Duke Energy Corp. | 1,288,258 | 124,587,431 | ||||||
Eversource Energy | 1,323,168 | 79,085,751 | ||||||
203,673,182 |
10
Shares/Principal Amount | Value | |||||||
Electrical Equipment — 0.4% | ||||||||
Legrand SA | 338,412 | $ | 35,836,718 | |||||
Electronic Equipment, Instruments and Components — 2.0% | ||||||||
Corning, Inc. | 2,834,163 | 93,414,013 | ||||||
TE Connectivity Ltd. | 503,584 | 73,140,540 | ||||||
166,554,553 | ||||||||
Energy Equipment and Services — 0.5% | ||||||||
Baker Hughes Co. | 1,234,607 | 41,359,334 | ||||||
Food Products — 3.1% | ||||||||
Hershey Co. | 504,589 | 98,142,560 | ||||||
Mondelez International, Inc., Class A | 2,231,440 | 156,200,800 | ||||||
254,343,360 | ||||||||
Gas Utilities — 4.8% | ||||||||
Atmos Energy Corp. | 1,135,212 | 134,942,650 | ||||||
ONE Gas, Inc. | 2,114,666 | 136,459,397 | ||||||
Spire, Inc. | 2,006,626 | 123,146,638 | ||||||
394,548,685 | ||||||||
Ground Transportation — 2.3% | ||||||||
Norfolk Southern Corp. | 752,879 | 191,886,271 | ||||||
Health Care Equipment and Supplies — 8.0% | ||||||||
Becton Dickinson & Co. | 791,078 | 195,752,251 | ||||||
Medtronic PLC | 4,775,689 | 416,201,296 | ||||||
Zimmer Biomet Holdings, Inc. | 347,816 | 45,904,756 | ||||||
657,858,303 | ||||||||
Health Care Providers and Services — 2.0% | ||||||||
Quest Diagnostics, Inc. | 766,231 | 101,993,009 | ||||||
UnitedHealth Group, Inc. | 127,956 | 63,299,833 | ||||||
165,292,842 | ||||||||
Household Products — 5.3% | ||||||||
Colgate-Palmolive Co. | 2,384,430 | 214,717,921 | ||||||
Kimberly-Clark Corp. | 1,354,754 | 175,237,430 | ||||||
Procter & Gamble Co. | 298,787 | 48,478,191 | ||||||
438,433,542 | ||||||||
Insurance — 4.7% | ||||||||
Aflac, Inc. | 480,926 | 41,292,306 | ||||||
Allstate Corp. | 601,951 | 104,143,543 | ||||||
Chubb Ltd. | 220,784 | 57,211,758 | ||||||
Marsh & McLennan Cos., Inc. | 594,068 | 122,366,127 | ||||||
Reinsurance Group of America, Inc. | 321,824 | 62,073,413 | ||||||
387,087,147 | ||||||||
Media — 0.6% | ||||||||
Omnicom Group, Inc. | 510,629 | 49,408,462 | ||||||
Oil, Gas and Consumable Fuels — 6.4% | ||||||||
Chevron Corp. | 439,805 | 69,374,841 | ||||||
Enterprise Products Partners LP | 6,502,200 | 189,734,196 | ||||||
Exxon Mobil Corp. | 1,691,267 | 196,592,876 | ||||||
TotalEnergies SE | 1,059,922 | 72,911,377 | ||||||
528,613,290 |
11
Shares/Principal Amount | Value | |||||||
Personal Care Products — 3.5% | ||||||||
Kenvue, Inc. | 6,659,283 | $ | 142,908,213 | |||||
Unilever PLC | 2,936,446 | 147,460,263 | ||||||
290,368,476 | ||||||||
Pharmaceuticals — 7.9% | ||||||||
Johnson & Johnson | 2,757,268 | 436,172,225 | ||||||
Roche Holding AG | 634,191 | 161,920,927 | ||||||
Sanofi SA, ADR | 991,970 | 48,209,742 | ||||||
646,302,894 | ||||||||
Professional Services — 1.6% | ||||||||
Automatic Data Processing, Inc. | 540,381 | 134,954,751 | ||||||
Semiconductors and Semiconductor Equipment — 0.9% | ||||||||
Texas Instruments, Inc. | 411,133 | 71,623,480 | ||||||
Specialized REITs — 1.6% | ||||||||
American Tower Corp. | 354,913 | 70,127,260 | ||||||
Public Storage | 213,459 | 61,915,917 | ||||||
132,043,177 | ||||||||
Trading Companies and Distributors — 0.6% | ||||||||
Bunzl PLC | 1,236,494 | 47,577,315 | ||||||
TOTAL COMMON STOCKS (Cost $5,150,008,620) | 6,804,103,290 | |||||||
PREFERRED STOCKS — 8.4% | ||||||||
Banks — 5.1% | ||||||||
Bank of America Corp., 6.30% | 65,240,000 | 65,624,851 | ||||||
JPMorgan Chase & Co., 4.60% | 70,254,000 | 69,243,305 | ||||||
JPMorgan Chase & Co., 5.00% | 60,416,000 | 60,256,411 | ||||||
M&T Bank Corp., Series E, 9.18% | 23,961,000 | 24,065,662 | ||||||
M&T Bank Corp., Series F, 5.125% | 36,239,000 | 32,215,025 | ||||||
Truist Financial Corp., 4.95%(1) | 135,293,000 | 133,071,962 | ||||||
Truist Financial Corp., 5.10% | 39,647,000 | 37,079,429 | ||||||
421,556,645 | ||||||||
Capital Markets — 3.3% | ||||||||
Bank of New York Mellon Corp., 4.70% | 86,419,000 | 85,013,248 | ||||||
Charles Schwab Corp., 4.00% | 57,379,000 | 53,754,001 | ||||||
Charles Schwab Corp., 5.375%(1) | 123,663,000 | 123,116,298 | ||||||
Goldman Sachs Group, Inc., Series Q, 5.50% | 10,396,000 | 10,346,056 | ||||||
272,229,603 | ||||||||
TOTAL PREFERRED STOCKS (Cost $697,698,817) | 693,786,248 | |||||||
CONVERTIBLE BONDS — 3.5% | ||||||||
Health Care Equipment and Supplies — 0.7% | ||||||||
Envista Holdings Corp., 1.75%, 8/15/28(2) | $ | 60,698,000 | 53,603,921 | |||||
Hotels, Restaurants and Leisure — 0.9% | ||||||||
Cracker Barrel Old Country Store, Inc., 0.625%, 6/15/26 | 86,201,000 | 76,107,759 | ||||||
Passenger Airlines — 0.5% | ||||||||
Southwest Airlines Co., 1.25%, 5/1/25(1) | 40,502,000 | 41,139,907 | ||||||
Semiconductors and Semiconductor Equipment — 1.4% | ||||||||
Microchip Technology, Inc., 0.125%, 11/15/24(1) | 108,242,000 | 115,385,972 | ||||||
TOTAL CONVERTIBLE BONDS (Cost $300,395,498) | 286,237,559 |
12
Shares/Principal Amount | Value | |||||||
EQUITY-LINKED NOTES — 2.5% | ||||||||
Automobile Components — 0.4% | ||||||||
JPMorgan Chase Bank NA, (convertible into Aptiv PLC), 13.42%, 5/21/24(2) | $ | 176,641 | $ | 13,980,249 | ||||
UBS AG, (convertible into BorgWagner, Inc.), 10.10%, 8/13/24(2) | 441,447 | 14,125,446 | ||||||
28,105,695 | ||||||||
Building Products — 0.5% | ||||||||
JPMorgan Chase Bank NA, (convertible into Johnson Controls International PLC), 11.05%, 5/3/24(2) | 378,116 | 19,264,812 | ||||||
Royal Bank of Canada, (convertible into Masco Corp.), 9.60%, 4/24/24(2) | 374,191 | 19,194,813 | ||||||
38,459,625 | ||||||||
Chemicals — 0.2% | ||||||||
Goldman Sachs International, (convertible into Linde PLC, Class B), 4.63%, 7/25/24(2) | 47,605 | 19,584,973 | ||||||
Electrical Equipment — 0.2% | ||||||||
Citigroup Global Markets Holdings, Inc., (convertible into Rockwell Automation, Inc.), 6.88%, 8/5/24(2) | 60,572 | 15,826,195 | ||||||
Financial Services — 0.2% | ||||||||
Goldman Sachs International, (convertible into Berkshire Hathaway, Inc., Class B), 4.25%, 6/25/24(2) | 42,585 | 15,854,463 | ||||||
Machinery — 0.2% | ||||||||
JPMorgan Chase Bank NA, (convertible into Deere & Co.), 11.51%, 5/3/24(2) | 50,732 | 19,035,098 | ||||||
Professional Services — 0.2% | ||||||||
UBS AG, (convertible into Automatic Data Processing, Inc.), 5.65%, 7/26/24(2) | 80,827 | 19,394,736 | ||||||
Semiconductors and Semiconductor Equipment — 0.2% | ||||||||
UBS AG, (convertible into Teradyne, Inc.), 13.05%, 4/24/24(2) | 211,306 | 18,474,051 | ||||||
Textiles, Apparel and Luxury Goods — 0.4% | ||||||||
Goldman Sachs International, (convertible into Nike, Inc., Class B), 10.30%, 8/20/24(2) | 179,570 | 18,199,195 | ||||||
UBS AG, (convertible into Nike, Inc., Class B), 7.60%, 9/25/24(2) | 146,152 | 13,587,923 | ||||||
31,787,118 | ||||||||
TOTAL EQUITY-LINKED NOTES (Cost $204,124,853) | 206,521,954 | |||||||
CONVERTIBLE PREFERRED STOCKS — 0.9% | ||||||||
Banks — 0.3% | ||||||||
Bank of America Corp., 7.25% | 17,436 | 20,859,897 | ||||||
Electric Utilities — 0.6% | ||||||||
NextEra Energy, Inc., 6.93%, 9/1/25(1) | 1,306,314 | 51,710,439 | ||||||
TOTAL CONVERTIBLE PREFERRED STOCKS (Cost $86,220,882) | 72,570,336 | |||||||
SHORT-TERM INVESTMENTS — 2.5% | ||||||||
Discount Notes(3) — 0.2% | ||||||||
Federal Home Loan Bank Discount Notes, 5.29%, 4/1/24 | $ | 17,335,000 | 17,325,042 | |||||
Money Market Funds — 0.7% | ||||||||
State Street Institutional U.S. Government Money Market Fund, Premier Class | 132,448 | 132,448 | ||||||
State Street Navigator Securities Lending Government Money Market Portfolio(4) | 58,098,331 | 58,098,331 | ||||||
58,230,779 |
13
Shares/Principal Amount | Value | |||||||
Repurchase Agreements — 1.6% | ||||||||
BMO Capital Markets Corp., (collateralized by various U.S. Treasury obligations, 4.625%, 9/15/26, valued at $5,847,896), in a joint trading account at 5.28%, dated 3/28/24, due 4/1/24 (Delivery value $5,735,235) | $ | 5,731,872 | ||||||
Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 0.125% - 3.875%, 3/31/27 - 2/15/51, valued at $106,635,952), at 5.30%, dated 3/28/24, due 4/1/24 (Delivery value $104,606,565) | 104,545,000 | |||||||
TD Securities (USA) LLC, (collateralized by various U.S. Treasury obligations, 0.375% - 4.00%, 11/30/25 - 10/31/2029, valued at $23,631,824), at 5.30%, dated 3/28/24, due 4/1/24 (Delivery value $23,178,642) | 23,165,000 | |||||||
133,441,872 | ||||||||
TOTAL SHORT-TERM INVESTMENTS (Cost $209,007,651) | 208,997,693 | |||||||
TOTAL INVESTMENT SECURITIES — 100.4% (Cost $6,647,456,321) | 8,272,217,080 | |||||||
OTHER ASSETS AND LIABILITIES — (0.4)% | (31,207,603) | |||||||
TOTAL NET ASSETS — 100.0% | $ | 8,241,009,477 |
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS | ||||||||||||||||||||
Currency Purchased | Currency Sold | Counterparty | Settlement Date | Unrealized Appreciation (Depreciation) | ||||||||||||||||
USD | 136,614,635 | CHF | 121,315,982 | UBS AG | 6/28/24 | $ | 806,601 | |||||||||||||
USD | 111,245,987 | EUR | 102,304,756 | Bank of America N.A. | 6/28/24 | 487,791 | ||||||||||||||
USD | 111,217,117 | EUR | 102,304,756 | JPMorgan Chase Bank N.A. | 6/28/24 | 458,920 | ||||||||||||||
USD | 111,276,627 | EUR | 102,304,756 | Morgan Stanley | 6/28/24 | 518,431 | ||||||||||||||
USD | 40,710,898 | GBP | 32,171,719 | Morgan Stanley | 6/28/24 | 87,139 | ||||||||||||||
SEK | 4,656,425 | USD | 442,116 | UBS AG | 6/28/24 | (5,547) | ||||||||||||||
SEK | 11,364,967 | USD | 1,078,833 | UBS AG | 6/28/24 | (13,293) | ||||||||||||||
USD | 17,268,587 | SEK | 181,394,415 | UBS AG | 6/28/24 | 261,683 | ||||||||||||||
$ | 2,601,725 |
14
NOTES TO SCHEDULE OF INVESTMENTS | ||||||||
ADR | – | American Depositary Receipt | ||||||
CHF | – | Swiss Franc | ||||||
EUR | – | Euro | ||||||
GBP | – | British Pound | ||||||
SEK | – | Swedish Krona | ||||||
USD | – | United States Dollar |
(1)Security, or a portion thereof, is on loan. At the period end, the aggregate value of securities on loan was $74,369,394. The amount of securities on loan indicated may not correspond with the securities on loan identified because securities with pending sales are in the process of recall from the brokers.
(2)Security was purchased pursuant to Rule 144A or Section 4(2) 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 $260,125,875, which represented 3.2% of total net assets.
(3)The rate indicated is the yield to maturity at purchase for non-interest bearing securities. For interest bearing securities, the stated coupon rate is shown.
(4)Investment of cash collateral from securities on loan. At the period end, the aggregate value of the collateral held by the fund was $75,155,537, which includes securities collateral of $17,057,206.
See Notes to Financial Statements.
15
Statement of Assets and Liabilities |
MARCH 31, 2024 | |||||
Assets | |||||
Investment securities, at value (cost of $6,589,357,990) — including $74,369,394 of securities on loan | $ | 8,214,118,749 | |||
Investment made with cash collateral received for securities on loan, at value (cost of $58,098,331) | 58,098,331 | ||||
Total investment securities, at value (cost of $6,647,456,321) | 8,272,217,080 | ||||
Cash | 1,729,765 | ||||
Foreign currency holdings, at value (cost of $8,990) | 8,766 | ||||
Receivable for investments sold | 18,358,683 | ||||
Receivable for capital shares sold | 2,612,409 | ||||
Unrealized appreciation on forward foreign currency exchange contracts | 2,620,565 | ||||
Dividends and interest receivable | 32,357,874 | ||||
Securities lending receivable | 83,326 | ||||
8,329,988,468 | |||||
Liabilities | |||||
Payable for collateral received for securities on loan | 58,098,331 | ||||
Payable for investments purchased | 824,044 | ||||
Payable for capital shares redeemed | 24,178,922 | ||||
Unrealized depreciation on forward foreign currency exchange contracts | 18,840 | ||||
Accrued management fees | 5,569,905 | ||||
Distribution and service fees payable | 288,949 | ||||
88,978,991 | |||||
Net Assets | $ | 8,241,009,477 | |||
Net Assets Consist of: | |||||
Capital (par value and paid-in surplus) | $ | 6,472,149,158 | |||
Distributable earnings (loss) | 1,768,860,319 | ||||
$ | 8,241,009,477 |
Net Assets | Shares Outstanding | Net Asset Value Per Share* | |||||||||
Investor Class, $0.01 Par Value | $3,163,228,325 | 357,835,132 | $8.84 | ||||||||
I Class, $0.01 Par Value | $2,874,672,703 | 324,676,481 | $8.85 | ||||||||
Y Class, $0.01 Par Value | $728,298,694 | 82,132,175 | $8.87 | ||||||||
A Class, $0.01 Par Value | $693,134,345 | 78,422,412 | $8.84 | ||||||||
C Class, $0.01 Par Value | $154,212,666 | 17,447,384 | $8.84 | ||||||||
R Class, $0.01 Par Value | $33,185,597 | 3,773,872 | $8.79 | ||||||||
R5 Class, $0.01 Par Value | $76,698,865 | 8,673,913 | $8.84 | ||||||||
R6 Class, $0.01 Par Value | $517,571,272 | 58,387,259 | $8.86 | ||||||||
G Class, $0.01 Par Value | $7,010 | 790 | $8.87 |
*Maximum offering price per share was equal to the net asset value per share for all share classes, except A Class, for which the maximum offering price per share was $9.38 (net asset value divided by 0.9425). A contingent deferred sales charge may be imposed on redemptions of A Class and C Class.
See Notes to Financial Statements.
16
Statement of Operations |
YEAR ENDED MARCH 31, 2024 | |||||
Investment Income (Loss) | |||||
Income: | |||||
Dividends (including $9,582,598 from affiliates and net of foreign taxes withheld of $3,947,236) | $ | 228,162,910 | |||
Interest | 74,923,002 | ||||
Securities lending, net | 3,045,474 | ||||
306,131,386 | |||||
Expenses: | |||||
Management fees | 71,933,101 | ||||
Distribution and service fees: | |||||
A Class | 1,774,397 | ||||
C Class | 1,759,474 | ||||
R Class | 180,805 | ||||
Directors' fees and expenses | 303,688 | ||||
Other expenses | 147,334 | ||||
76,098,799 | |||||
Fees waived - G Class | (37) | ||||
76,098,762 | |||||
Net investment income (loss) | 230,032,624 | ||||
Realized and Unrealized Gain (Loss) | |||||
Net realized gain (loss) on: | |||||
Investment transactions (including $(29,624,367) from affiliates) | 549,679,705 | ||||
Forward foreign currency exchange contract transactions | 5,937,853 | ||||
Written options contract transactions | 2,683,546 | ||||
Foreign currency translation transactions | (242,120) | ||||
558,058,984 | |||||
Change in net unrealized appreciation (depreciation) on: | |||||
Investments (including $686,717 from affiliates) | (56,316,264) | ||||
Forward foreign currency exchange contracts | 7,309,822 | ||||
Written options contracts | (347,224) | ||||
Translation of assets and liabilities in foreign currencies | 36,853 | ||||
(49,316,813) | |||||
Net realized and unrealized gain (loss) | 508,742,171 | ||||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 738,774,795 |
See Notes to Financial Statements.
17
Statement of Changes in Net Assets |
YEARS ENDED MARCH 31, 2024 AND MARCH 31, 2023 | ||||||||
Increase (Decrease) in Net Assets | March 31, 2024 | March 31, 2023 | ||||||
Operations | ||||||||
Net investment income (loss) | $ | 230,032,624 | $ | 249,534,711 | ||||
Net realized gain (loss) | 558,058,984 | 434,649,209 | ||||||
Change in net unrealized appreciation (depreciation) | (49,316,813) | (1,068,377,967) | ||||||
Net increase (decrease) in net assets resulting from operations | 738,774,795 | (384,194,047) | ||||||
Distributions to Shareholders | ||||||||
From earnings: | ||||||||
Investor Class | (250,699,152) | (310,571,931) | ||||||
I Class | (247,879,833) | (377,999,062) | ||||||
Y Class | (55,557,299) | (20,583,258) | ||||||
A Class | (51,738,587) | (62,428,465) | ||||||
C Class | (11,107,411) | (16,563,683) | ||||||
R Class | (2,438,735) | (3,252,890) | ||||||
R5 Class | (5,500,025) | (5,326,994) | ||||||
R6 Class | (47,469,659) | (73,084,105) | ||||||
G Class | (559) | (575) | ||||||
Decrease in net assets from distributions | (672,391,260) | (869,810,963) | ||||||
Capital Share Transactions | ||||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | (1,833,210,330) | (384,538,047) | ||||||
Net increase (decrease) in net assets | (1,766,826,795) | (1,638,543,057) | ||||||
Net Assets | ||||||||
Beginning of period | 10,007,836,272 | 11,646,379,329 | ||||||
End of period | $ | 8,241,009,477 | $ | 10,007,836,272 |
See Notes to Financial Statements.
18
Notes to Financial Statements |
MARCH 31, 2024
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. Equity Income Fund (the fund) is one fund in a series issued by the corporation. The fund’s investment objective is to seek current income. Capital appreciation is a secondary objective.
The fund offers the Investor Class, I Class, Y Class, A Class, C Class, R Class, R5 Class, R6 Class and G Class. The A Class may incur an initial sales charge. The A Class and C Class may be subject to a contingent deferred sales charge.
2. Significant Accounting Policies
The following is a summary of significant accounting policies consistently followed by the fund in preparation of its financial statements. The fund is an investment company and follows accounting and reporting guidance in accordance with accounting principles generally accepted in the United States of America. This may require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from these estimates. Management evaluated the impact of events or transactions occurring through the date the financial statements were issued that would merit recognition or disclosure.
Investment Valuations — The fund determines the fair value of its investments and computes its net asset value (NAV) per share at the close of regular trading (usually 4 p.m. Eastern time) on the New York Stock Exchange (NYSE) on each day the NYSE is open. The value of investments of the fund is determined by American Century Investment Management, Inc. (ACIM) (the investment advisor), as the valuation designee, pursuant to its valuation policies and procedures. The Board of Directors oversees the valuation designee and reviews its valuation policies and procedures at least annually.
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.
Fixed income securities are valued at the evaluated mean as provided by independent pricing services or at the mean of the most recent bid and asked prices as provided by investment dealers. Corporate bonds, U.S. Treasury and Government Agency securities and convertible bonds 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.
Hybrid 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. Preferred stocks and convertible preferred stocks with perpetual maturities 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.
Open-end management investment companies are valued at the reported NAV per share. Equity-linked notes are valued at the mean using market models that consider quotations from dealer and active market makers. Repurchase agreements are valued at cost, which approximates fair value. Exchange-traded options contracts are valued at a mean as provided by independent pricing services. 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.
19
If the valuation designee determines that the market price for a portfolio security is not readily available or is believed by the valuation designee to be unreliable, such security is valued at fair value as determined in good faith by the valuation designee, in accordance with its policies and procedures. Circumstances that may cause the fund to determine that market quotations are not available or reliable include, but are not limited to: when there is a significant event subsequent to the market quotation; trading in a security has been halted during the trading day; or trading in a security is insufficient or did not take place due to a closure or holiday.
The valuation designee monitors for significant events occurring after the close of an investment’s primary exchange but before the fund’s NAV per share is determined. Significant events may include, but are not limited to: corporate announcements and transactions; regulatory news, 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 valuation designee also monitors for significant fluctuations between domestic and foreign markets, as evidenced by the U.S. market or such other indicators that it deems appropriate. The valuation designee 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.
Foreign Currency Translations — All assets and liabilities, including investment securities and other financial instruments, initially expressed in foreign currencies are translated into U.S. dollars each day at the mean of the appropriate currency exchange rate at the close of the NYSE as provided by an independent pricing service. 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.
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. For convertible bonds, the premiums attributable only to the debt instrument are amortized. Securities lending income is net of fees and rebates earned by the lending agent for its services.
Equity-Linked Debt and Linked-Equity Securities — The fund may invest in hybrid equity securities, which usually convert into common stock at a date predetermined by the issuer. These securities generally offer a higher yield than that of the common stock to which the security is linked. These instruments are issued by a company other than the one to which the security is linked and carry the credit of the issuer, not that of the underlying common stock. The securities’ appreciation is limited based on a predetermined final cap price at the date of the conversion. Risks of investing in these securities include, but are not limited to, a set time to capture the yield advantage, limited appreciation potential, decline in value of the underlying stock, and failure of the issuer to make interest payments or to deliver common stock at maturity.
Repurchase Agreements — The fund may enter into repurchase agreements with institutions that ACIM has determined are creditworthy pursuant to criteria adopted by the Board of Directors. The fund requires that the collateral, represented by securities, received in a repurchase transaction be transferred to the custodian in a manner sufficient to enable the fund to obtain those securities in the event of a default under the repurchase agreement. ACIM monitors, on a daily basis, the securities transferred to ensure the value, including accrued interest, of the securities under each repurchase agreement is equal to or greater than amounts owed to the fund under each repurchase agreement.
Joint Trading Account — Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the fund, along with certain other funds in the American Century Investments family of funds, may transfer uninvested cash balances into a joint trading account. These balances are invested in one or more repurchase agreements that are collateralized by U.S. Treasury or Agency obligations.
20
Income Tax Status — It is the fund's policy to distribute substantially all net investment income and net realized gains to shareholders and to otherwise qualify as a regulated investment company under provisions of the Internal Revenue Code. Accordingly, no provision has been made for income taxes. The fund files U.S. federal, state, local and non-U.S. tax returns as applicable. The fund's tax returns are subject to examination by the relevant taxing authority until expiration of the applicable statute of limitations, which is generally three years from the date of filing but can be longer in certain jurisdictions. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination and for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Multiple Class — All shares of the fund represent an equal pro rata interest in the net assets of the class to which such shares belong, and have identical voting, dividend, liquidation and other rights and the same terms and conditions, except for class specific expenses and exclusive rights to vote on matters affecting only individual classes. Income, non-class specific expenses, and realized and unrealized capital gains and losses of the fund are allocated to each class of shares based on their relative net assets.
Distributions to Shareholders — Distributions from net investment income, if any, are generally declared and paid quarterly. Distributions from net realized gains, if any, are generally declared and paid annually. The fund may elect to treat a portion of its payment to a redeeming shareholder, which represents the pro rata share of undistributed net investment income and net realized gains, as a distribution for federal income tax purposes (tax equalization).
Indemnifications — Under the corporation’s organizational documents, its officers and directors are indemnified against certain liabilities arising out of the performance of their duties to the fund. In addition, in the normal course of business, the fund enters into contracts that provide general indemnifications. The maximum exposure under these arrangements is unknown as this would involve future claims that may be made against a fund. The risk of material loss from such claims is considered by management to be remote.
Securities Lending — Securities are lent to qualified financial institutions and brokers. State Street Bank & Trust Co. serves as securities lending agent to the fund pursuant to a Securities Lending Agreement. The lending of securities exposes the fund to risks such as: the borrowers may fail to return the loaned securities, the borrowers may not be able to provide additional collateral, the fund may experience delays in recovery of the loaned securities or delays in access to collateral, or the fund may experience losses related to the investment collateral. To minimize certain risks, loan counterparties pledge collateral in the form of cash and/or securities. The lending agent has agreed to indemnify the fund in the case of default of any securities borrowed. Cash collateral received is invested in the State Street Navigator Securities Lending Government Money Market Portfolio, a money market mutual fund registered under the 1940 Act. The loans may also be secured by U.S. government securities in an amount at least equal to the market value of the securities loaned, plus accrued interest and dividends, determined on a daily basis and adjusted accordingly. By lending securities, the fund seeks to increase its net investment income through the receipt of interest and fees. Such income is reflected separately within the Statement of Operations. The value of loaned securities and related collateral outstanding at period end, if any, are shown on a gross basis within the Schedule of Investments and Statement of Assets and Liabilities.
The following table reflects a breakdown of transactions accounted for as secured borrowings, the gross obligation by the type of collateral pledged, and the remaining contractual maturity of those transactions as of March 31, 2024.
Remaining Contractual Maturity of Agreements | |||||||||||||||||
Overnight and Continuous | <30 days | Between 30 & 90 days | >90 days | Total | |||||||||||||
Securities Lending Transactions(1) | |||||||||||||||||
Convertible Bonds | $ | 13,583,254 | — | — | — | $ | 13,583,254 | ||||||||||
Convertible Preferred Stocks | 36,773,779 | — | — | — | 36,773,779 | ||||||||||||
Preferred Stocks | 7,741,298 | — | — | — | 7,741,298 | ||||||||||||
Total Borrowings | $ | 58,098,331 | — | — | — | $ | 58,098,331 | ||||||||||
Gross amount of recognized liabilities for securities lending transactions | $ | 58,098,331 |
(1)Amount represents the payable for cash collateral received for securities on loan. This will generally be in the Overnight and Continuous column as the securities are typically callable on demand.
21
3. Fees and Transactions with Related Parties
Certain officers and directors of the corporation are also officers and/or directors of American Century Companies, Inc. (ACC). The corporation's investment advisor, ACIM, the corporation's distributor, American Century Investment Services, Inc. (ACIS), and the corporation's transfer agent, American Century Services, LLC, are wholly owned, directly or indirectly, by ACC.
Management Fees — The corporation has entered into a management agreement with ACIM, under which ACIM provides the fund with investment advisory and management services in exchange for a single, unified management fee (the fee) per class. The agreement provides that ACIM will pay all expenses of managing and operating the fund, except brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), extraordinary expenses, and expenses incurred in connection with the provision of shareholder services and distribution services under a plan adopted pursuant to Rule 12b-1 under the 1940 Act. The fee is computed and accrued daily based on each class's daily net assets and paid monthly in arrears. The difference in the fee among the classes is a result of their separate arrangements for non-Rule 12b-1 shareholder services. It is not the result of any difference in advisory or custodial fees or other expenses related to the management of the fund's assets, which do not vary by class. The rate of the fee is determined by applying a fee rate calculation formula. This formula takes into account the fund's assets as well as certain assets, if any, of other clients of the investment advisor outside the American Century Investments family of funds (such as subadvised funds and separate accounts), as well as exchange-traded funds managed by the investment advisor, that use very similar investment teams and strategies (strategy assets). 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 management fee schedule range and the effective annual management fee for each class for the period ended March 31, 2024 are as follows:
Management Fee Schedule Range | Effective Annual Management Fee | |||||||
Investor Class | 0.80% to 1.00% | 0.92% | ||||||
I Class | 0.60% to 0.80% | 0.72% | ||||||
Y Class | 0.45% to 0.65% | 0.57% | ||||||
A Class | 0.80% to 1.00% | 0.92% | ||||||
C Class | 0.80% to 1.00% | 0.92% | ||||||
R Class | 0.80% to 1.00% | 0.92% | ||||||
R5 Class | 0.60% to 0.80% | 0.72% | ||||||
R6 Class | 0.45% to 0.65% | 0.57% | ||||||
G Class | 0.45% to 0.65% | 0.00%(1) |
(1)Effective annual management fee before waiver was 0.57%.
Distribution and Service Fees — The Board of Directors has adopted a separate Master Distribution and Individual Shareholder Services Plan for each of the A Class, C Class and R Class (collectively the plans), pursuant to Rule 12b-1 of the 1940 Act. The plans provide that the A Class will pay ACIS an annual distribution and service fee of 0.25%. The plans provide that the C Class will pay ACIS an annual distribution and service fee of 1.00%, of which 0.25% is paid for individual shareholder services and 0.75% is paid for distribution services. The plans provide that the R Class will pay ACIS an annual distribution and service fee of 0.50%. The fees are computed and accrued daily based on each class’s daily net assets and paid monthly in arrears. The fees are used to pay financial intermediaries for distribution and individual shareholder services. Fees incurred under the plans during the period ended March 31, 2024 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.
Other Expenses — A fund’s other expenses may include interest charges, clearing exchange fees, proxy solicitation expenses, fees associated with the recovery of foreign tax reclaims and other miscellaneous expenses.
22
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 $709,386 and $3,956,744, respectively. The effect of interfund transactions on the Statement of Operations was $434,912 in net realized gain (loss) on investment transactions.
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments and in kind transactions, for the period ended March 31, 2024 were $1,496,877,260 and $3,370,587,420, respectively.
For the period ended March 31, 2024, the fund incurred net realized gains of $16,641,766 from redemptions in kind. A redemption in kind occurs when a fund delivers securities from its portfolio in lieu of cash as payment to a redeeming shareholder.
23
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Year ended March 31, 2024 | Year ended March 31, 2023 | |||||||||||||
Shares | Amount | Shares | Amount | |||||||||||
Investor Class/Shares Authorized | 3,900,000,000 | 3,900,000,000 | ||||||||||||
Sold | 18,955,729 | $ | 163,909,659 | 28,747,919 | $ | 264,128,611 | ||||||||
Issued in reinvestment of distributions | 28,700,446 | 243,373,527 | 34,321,374 | 301,750,127 | ||||||||||
Redeemed | (104,795,858) | (906,031,633) | (73,189,590) | (668,637,245) | ||||||||||
(57,139,683) | (498,748,447) | (10,120,297) | (102,758,507) | |||||||||||
I Class/Shares Authorized | 4,500,000,000 | 4,500,000,000 | ||||||||||||
Sold | 47,889,769 | 415,705,414 | 87,993,965 | 804,477,327 | ||||||||||
Issued in reinvestment of distributions | 27,710,528 | 235,475,850 | 40,885,907 | 359,903,834 | ||||||||||
Redeemed | (237,115,092) | (2,062,569,467) | (140,189,168) | (1,280,211,740) | ||||||||||
(161,514,795) | (1,411,388,203) | (11,309,296) | (115,830,579) | |||||||||||
Y Class/Shares Authorized | 750,000,000 | 200,000,000 | ||||||||||||
Sold | 66,159,767 | 583,026,132 | 3,533,151 | 32,599,997 | ||||||||||
Issued in reinvestment of distributions | 6,449,853 | 54,867,272 | 2,235,584 | 19,721,230 | ||||||||||
Redeemed | (16,341,446) | (141,589,646) | (7,824,058) | (71,897,428) | ||||||||||
56,268,174 | 496,303,758 | (2,055,323) | (19,576,201) | |||||||||||
A Class/Shares Authorized | 900,000,000 | 920,000,000 | ||||||||||||
Sold | 8,314,264 | 71,825,649 | 10,291,287 | 94,176,513 | ||||||||||
Issued in reinvestment of distributions | 5,747,696 | 48,703,043 | 6,621,291 | 58,207,626 | ||||||||||
Redeemed | (20,964,591) | (181,286,352) | (18,656,364) | (169,693,705) | ||||||||||
(6,902,631) | (60,757,660) | (1,743,786) | (17,309,566) | |||||||||||
C Class/Shares Authorized | 250,000,000 | 275,000,000 | ||||||||||||
Sold | 1,022,634 | 8,898,988 | 1,787,336 | 16,420,882 | ||||||||||
Issued in reinvestment of distributions | 1,266,293 | 10,710,156 | 1,802,032 | 15,837,408 | ||||||||||
Redeemed | (8,184,016) | (70,832,254) | (7,916,820) | (72,119,278) | ||||||||||
(5,895,089) | (51,223,110) | (4,327,452) | (39,860,988) | |||||||||||
R Class/Shares Authorized | 55,000,000 | 60,000,000 | ||||||||||||
Sold | 555,739 | 4,817,247 | 567,081 | 5,158,279 | ||||||||||
Issued in reinvestment of distributions | 289,178 | 2,438,681 | 371,752 | 3,252,874 | ||||||||||
Redeemed | (1,719,914) | (14,719,829) | (1,163,434) | (10,591,388) | ||||||||||
(874,997) | (7,463,901) | (224,601) | (2,180,235) | |||||||||||
R5 Class/Shares Authorized | 80,000,000 | 80,000,000 | ||||||||||||
Sold | 1,302,660 | 11,333,404 | 1,004,015 | 9,132,981 | ||||||||||
Issued in reinvestment of distributions | 648,556 | 5,500,025 | 605,940 | 5,326,994 | ||||||||||
Redeemed | (619,933) | (5,364,883) | (972,211) | (8,869,421) | ||||||||||
1,331,283 | 11,468,546 | 637,744 | 5,590,554 | |||||||||||
R6 Class/Shares Authorized | 800,000,000 | 800,000,000 | ||||||||||||
Sold | 7,712,976 | 66,933,588 | 20,354,605 | 186,771,660 | ||||||||||
Issued in reinvestment of distributions | 5,579,544 | 47,469,659 | 8,292,491 | 73,084,105 | ||||||||||
Redeemed | (48,647,767) | (425,805,119) | (38,237,774) | (352,468,865) | ||||||||||
(35,355,247) | (311,401,872) | (9,590,678) | (92,613,100) | |||||||||||
G Class/Shares Authorized | 20,000,000 | 20,000,000 | ||||||||||||
Issued in reinvestment of distributions | 66 | 559 | 65 | 575 | ||||||||||
Net increase (decrease) | (210,082,919) | $ | (1,833,210,330) | (38,733,624) | $ | (384,538,047) |
24
6. Affiliated Company Transactions
If a fund's holding represents ownership of 5% or more of the voting securities of a company, the company is affiliated as defined in the 1940 Act. A summary of transactions for each company which is or was an affiliate at or during the period ended March 31, 2024 follows (amounts in thousands):
Company | Beginning Value | Purchase Cost | Sales Cost | Change in Net Unrealized Appreciation (Depreciation) | Ending Value | Ending Shares | Net Realized Gain (Loss) | Income | ||||||||||||||||||
Capitol Federal Financial, Inc.(1) | $ | 53,006 | — | $ | 39,587 | $ | 13,502 | (1) | (1) | $ | (18,761) | $ | 2,469 | |||||||||||||
Spire, Inc.(1) | 194,479 | — | 58,518 | (12,815) | (1) | (1) | (10,863) | 7,114 | ||||||||||||||||||
$ | 247,485 | — | $ | 98,105 | $ | 687 | $ | (29,624) | $ | 9,583 |
(1)Company was not an affiliate at March 31, 2024.
7. 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.
25
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 | |||||||||||
Building Products | — | $ | 17,918,616 | — | |||||||
Chemicals | $ | 120,171,123 | 40,414,523 | — | |||||||
Consumer Staples Distribution & Retail | 79,093,104 | 51,763,150 | — | ||||||||
Electrical Equipment | — | 35,836,718 | — | ||||||||
Oil, Gas and Consumable Fuels | 455,701,913 | 72,911,377 | — | ||||||||
Personal Care Products | 142,908,213 | 147,460,263 | — | ||||||||
Pharmaceuticals | 484,381,967 | 161,920,927 | — | ||||||||
Trading Companies and Distributors | — | 47,577,315 | — | ||||||||
Other Industries | 4,946,044,081 | — | — | ||||||||
Preferred Stocks | — | 693,786,248 | — | ||||||||
Convertible Bonds | — | 286,237,559 | — | ||||||||
Equity-Linked Notes | — | 206,521,954 | — | ||||||||
Convertible Preferred Stocks | — | 72,570,336 | — | ||||||||
Short-Term Investments | 58,230,779 | 150,766,914 | — | ||||||||
$ | 6,286,531,180 | $ | 1,985,685,900 | — | |||||||
Other Financial Instruments | |||||||||||
Forward Foreign Currency Exchange Contracts | — | $ | 2,620,565 | — | |||||||
Liabilities | |||||||||||
Other Financial Instruments | |||||||||||
Forward Foreign Currency Exchange Contracts | — | $ | 18,840 | — |
8. 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 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 will segregate cash, cash equivalents or other appropriate liquid securities on its records in amounts sufficient to meet requirements. 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 equity price risk derivative instruments held during the period was 2,026 written options contracts.
26
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. A fund will segregate cash, cash equivalents or other appropriate liquid securities on its records in amounts sufficient to meet requirements. 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 settlement 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 $794,084,516.
Value of Derivative Instruments as of March 31, 2024
Asset Derivatives | Liability Derivatives | |||||||||||||
Type of Risk Exposure | Location on Statement of Assets and Liabilities | Value | Location on Statement of Assets and Liabilities | Value | ||||||||||
Foreign Currency Risk | Unrealized appreciation on forward foreign currency exchange contracts | $ | 2,620,565 | Unrealized depreciation on forward foreign currency exchange contracts | $ | 18,840 |
Effect of Derivative Instruments on the Statement of Operations for the Year Ended March 31, 2024
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 written options contract transactions | $ | 2,683,546 | Change in net unrealized appreciation (depreciation) on written options contracts | $ | (347,224) | ||||||||
Foreign Currency Risk | Net realized gain (loss) on forward foreign currency exchange contract transactions | 5,937,853 | Change in net unrealized appreciation (depreciation) on forward foreign currency exchange contracts | 7,309,822 | ||||||||||
$ | 8,621,399 | $ | 6,962,598 |
9. Risk Factors
The value of the fund’s shares will go up and down, sometimes rapidly or unpredictably, based on the performance of the securities owned by the fund and other factors generally affecting the securities market. Market risks, including political, regulatory, economic and social developments, can affect the value of the fund’s investments. Natural disasters, public health emergencies, war, terrorism and other unforeseeable events may lead to increased market volatility and may have adverse long-term effects on world economies and markets generally.
There are certain risks involved in investing in foreign securities. These risks include those resulting from political events (such as civil unrest, national elections and imposition of exchange controls), social and economic events (such as labor strikes and rising inflation), and natural disasters. Securities of foreign issuers may be less liquid and more volatile. Investing a significant portion of assets in one country or region may accentuate these risks.
27
10. Federal Tax Information
The tax character of distributions paid during the years ended March 31, 2024 and March 31, 2023 were as follows:
2024 | 2023 | |||||||
Distributions Paid From | ||||||||
Ordinary income | $ | 233,644,136 | $ | 334,595,885 | ||||
Long-term capital gains | $ | 438,747,124 | $ | 535,215,078 |
The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
As of period end, the federal tax cost of investments and the components of distributable earnings on a tax-basis were as follows:
Federal tax cost of investments | $ | 6,669,824,690 | |||
Gross tax appreciation of investments | $ | 1,767,551,938 | |||
Gross tax depreciation of investments | (165,159,548) | ||||
Net tax appreciation (depreciation) of investments | 1,602,392,390 | ||||
Net tax appreciation (depreciation) on derivatives and translation of assets and liabilities in foreign currencies | 130,029 | ||||
Net tax appreciation (depreciation) | $ | 1,602,522,419 | |||
Undistributed ordinary income | $ | 21,423,401 | |||
Accumulated long-term gains | $ | 144,914,499 |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales and the timing and recognition of partnership income.
28
Financial Highlights |
For a Share Outstanding Throughout the Years Ended March 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 | |||||||||||||||||||||||||||||||||||||||||||||||
2024 | $8.76 | 0.21 | 0.54 | 0.75 | (0.21) | (0.46) | (0.67) | $8.84 | 9.09% | 0.93% | 0.93% | 2.46% | 2.46% | 17% | $3,163,228 | ||||||||||||||||||||||||||||||||
2023 | $9.86 | 0.21 | (0.53) | (0.32) | (0.21) | (0.57) | (0.78) | $8.76 | (3.22)% | 0.92% | 0.92% | 2.29% | 2.29% | 29% | $3,635,179 | ||||||||||||||||||||||||||||||||
2022 | $9.45 | 0.18 | 0.91 | 1.09 | (0.19) | (0.49) | (0.68) | $9.86 | 11.74% | 0.93% | 0.93% | 1.83% | 1.83% | 24% | $4,191,544 | ||||||||||||||||||||||||||||||||
2021 | $7.14 | 0.17 | 2.33 | 2.50 | (0.19) | — | (0.19) | $9.45 | 35.30% | 0.91% | 0.91% | 2.10% | 2.10% | 52% | $4,211,554 | ||||||||||||||||||||||||||||||||
2020 | $8.69 | 0.18 | (1.07) | (0.89) | (0.19) | (0.47) | (0.66) | $7.14 | (11.81)% | 0.91% | 0.91% | 2.07% | 2.07% | 85% | $3,660,808 | ||||||||||||||||||||||||||||||||
I Class | |||||||||||||||||||||||||||||||||||||||||||||||
2024 | $8.77 | 0.24 | 0.53 | 0.77 | (0.23) | (0.46) | (0.69) | $8.85 | 9.29% | 0.73% | 0.73% | 2.66% | 2.66% | 17% | $2,874,673 | ||||||||||||||||||||||||||||||||
2023 | $9.87 | 0.23 | (0.53) | (0.30) | (0.23) | (0.57) | (0.80) | $8.77 | (3.03)% | 0.72% | 0.72% | 2.49% | 2.49% | 29% | $4,265,425 | ||||||||||||||||||||||||||||||||
2022 | $9.47 | 0.20 | 0.90 | 1.10 | (0.21) | (0.49) | (0.70) | $9.87 | 11.83% | 0.73% | 0.73% | 2.03% | 2.03% | 24% | $4,912,267 | ||||||||||||||||||||||||||||||||
2021 | $7.15 | 0.20 | 2.32 | 2.52 | (0.20) | — | (0.20) | $9.47 | 35.67% | 0.71% | 0.71% | 2.30% | 2.30% | 52% | $5,167,202 | ||||||||||||||||||||||||||||||||
2020 | $8.70 | 0.21 | (1.08) | (0.87) | (0.21) | (0.47) | (0.68) | $7.15 | (11.62)% | 0.71% | 0.71% | 2.27% | 2.27% | 85% | $4,157,382 |
For a Share Outstanding Throughout the Years Ended March 31 (except as noted) | |||||||||||||||||||||||||||||||||||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||||||||||||||||||||||||||||||||||
Income From Investment Operations*: | Distributions From: | Ratio to Average Net Assets of†: | |||||||||||||||||||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Operating Expenses (before expense waiver) | Net Investment Income (Loss) | Net Investment Income (Loss) (before expense waiver) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||||||||||||||||||||||||||||||||
Y Class | |||||||||||||||||||||||||||||||||||||||||||||||
2024 | $8.79 | 0.24 | 0.55 | 0.79 | (0.25) | (0.46) | (0.71) | $8.87 | 9.44% | 0.58% | 0.58% | 2.81% | 2.81% | 17% | $728,299 | ||||||||||||||||||||||||||||||||
2023 | $9.89 | 0.24 | (0.53) | (0.29) | (0.24) | (0.57) | (0.81) | $8.79 | (2.87)% | 0.57% | 0.57% | 2.64% | 2.64% | 29% | $227,227 | ||||||||||||||||||||||||||||||||
2022 | $9.48 | 0.22 | 0.90 | 1.12 | (0.22) | (0.49) | (0.71) | $9.89 | 12.10% | 0.58% | 0.58% | 2.18% | 2.18% | 24% | $276,001 | ||||||||||||||||||||||||||||||||
2021 | $7.16 | 0.21 | 2.33 | 2.54 | (0.22) | — | (0.22) | $9.48 | 35.83% | 0.56% | 0.56% | 2.45% | 2.45% | 52% | $281,614 | ||||||||||||||||||||||||||||||||
2020 | $8.71 | 0.22 | (1.08) | (0.86) | (0.22) | (0.47) | (0.69) | $7.16 | (11.48)% | 0.56% | 0.56% | 2.42% | 2.42% | 85% | $222,844 | ||||||||||||||||||||||||||||||||
A Class | |||||||||||||||||||||||||||||||||||||||||||||||
2024 | $8.76 | 0.20 | 0.53 | 0.73 | (0.19) | (0.46) | (0.65) | $8.84 | 8.82% | 1.18% | 1.18% | 2.21% | 2.21% | 17% | $693,134 | ||||||||||||||||||||||||||||||||
2023 | $9.86 | 0.19 | (0.53) | (0.34) | (0.19) | (0.57) | (0.76) | $8.76 | (3.46)% | 1.17% | 1.17% | 2.04% | 2.04% | 29% | $747,365 | ||||||||||||||||||||||||||||||||
2022 | $9.45 | 0.16 | 0.90 | 1.06 | (0.16) | (0.49) | (0.65) | $9.86 | 11.46% | 1.18% | 1.18% | 1.58% | 1.58% | 24% | $858,437 | ||||||||||||||||||||||||||||||||
2021 | $7.14 | 0.16 | 2.31 | 2.47 | (0.16) | — | (0.16) | $9.45 | 34.95% | 1.16% | 1.16% | 1.85% | 1.85% | 52% | $869,137 | ||||||||||||||||||||||||||||||||
2020 | $8.69 | 0.16 | (1.07) | (0.91) | (0.17) | (0.47) | (0.64) | $7.14 | (12.02)% | 1.16% | 1.16% | 1.82% | 1.82% | 85% | $698,473 | ||||||||||||||||||||||||||||||||
C Class | |||||||||||||||||||||||||||||||||||||||||||||||
2024 | $8.76 | 0.13 | 0.54 | 0.67 | (0.13) | (0.46) | (0.59) | $8.84 | 8.00% | 1.93% | 1.93% | 1.46% | 1.46% | 17% | $154,213 | ||||||||||||||||||||||||||||||||
2023 | $9.86 | 0.12 | (0.53) | (0.41) | (0.12) | (0.57) | (0.69) | $8.76 | (4.17)% | 1.92% | 1.92% | 1.29% | 1.29% | 29% | $204,407 | ||||||||||||||||||||||||||||||||
2022 | $9.45 | 0.08 | 0.91 | 0.99 | (0.09) | (0.49) | (0.58) | $9.86 | 10.63% | 1.93% | 1.93% | 0.83% | 0.83% | 24% | $272,764 | ||||||||||||||||||||||||||||||||
2021 | $7.14 | 0.09 | 2.32 | 2.41 | (0.10) | — | (0.10) | $9.45 | 33.90% | 1.91% | 1.91% | 1.10% | 1.10% | 52% | $303,205 | ||||||||||||||||||||||||||||||||
2020 | $8.69 | 0.10 | (1.08) | (0.98) | (0.10) | (0.47) | (0.57) | $7.14 | (12.66)% | 1.91% | 1.91% | 1.07% | 1.07% | 85% | $394,129 |
For a Share Outstanding Throughout the Years Ended March 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 | |||||||||||||||||||||||||||||||||||||||||||||||
2024 | $8.72 | 0.17 | 0.53 | 0.70 | (0.17) | (0.46) | (0.63) | $8.79 | 8.46% | 1.43% | 1.43% | 1.96% | 1.96% | 17% | $33,186 | ||||||||||||||||||||||||||||||||
2023 | $9.82 | 0.16 | (0.53) | (0.37) | (0.16) | (0.57) | (0.73) | $8.72 | (3.71)% | 1.42% | 1.42% | 1.79% | 1.79% | 29% | $40,525 | ||||||||||||||||||||||||||||||||
2022 | $9.41 | 0.13 | 0.91 | 1.04 | (0.14) | (0.49) | (0.63) | $9.82 | 11.23% | 1.43% | 1.43% | 1.33% | 1.33% | 24% | $47,839 | ||||||||||||||||||||||||||||||||
2021 | $7.11 | 0.14 | 2.30 | 2.44 | (0.14) | — | (0.14) | $9.41 | 34.60% | 1.41% | 1.41% | 1.60% | 1.60% | 52% | $57,032 | ||||||||||||||||||||||||||||||||
2020 | $8.66 | 0.14 | (1.07) | (0.93) | (0.15) | (0.47) | (0.62) | $7.11 | (12.28)% | 1.41% | 1.41% | 1.57% | 1.57% | 85% | $56,388 | ||||||||||||||||||||||||||||||||
R5 Class | |||||||||||||||||||||||||||||||||||||||||||||||
2024 | $8.76 | 0.24 | 0.53 | 0.77 | (0.23) | (0.46) | (0.69) | $8.84 | 9.30% | 0.73% | 0.73% | 2.66% | 2.66% | 17% | $76,699 | ||||||||||||||||||||||||||||||||
2023 | $9.86 | 0.23 | (0.53) | (0.30) | (0.23) | (0.57) | (0.80) | $8.76 | (3.03)% | 0.72% | 0.72% | 2.49% | 2.49% | 29% | $64,341 | ||||||||||||||||||||||||||||||||
2022 | $9.46 | 0.20 | 0.90 | 1.10 | (0.21) | (0.49) | (0.70) | $9.86 | 11.84% | 0.73% | 0.73% | 2.03% | 2.03% | 24% | $66,131 | ||||||||||||||||||||||||||||||||
2021 | $7.14 | 0.19 | 2.33 | 2.52 | (0.20) | — | (0.20) | $9.46 | 35.72% | 0.71% | 0.71% | 2.30% | 2.30% | 52% | $62,610 | ||||||||||||||||||||||||||||||||
2020 | $8.70 | 0.21 | (1.09) | (0.88) | (0.21) | (0.47) | (0.68) | $7.14 | (11.74)% | 0.71% | 0.71% | 2.27% | 2.27% | 85% | $912 | ||||||||||||||||||||||||||||||||
R6 Class | |||||||||||||||||||||||||||||||||||||||||||||||
2024 | $8.78 | 0.25 | 0.54 | 0.79 | (0.25) | (0.46) | (0.71) | $8.86 | 9.44% | 0.58% | 0.58% | 2.81% | 2.81% | 17% | $517,571 | ||||||||||||||||||||||||||||||||
2023 | $9.88 | 0.24 | (0.53) | (0.29) | (0.24) | (0.57) | (0.81) | $8.78 | (2.88)% | 0.57% | 0.57% | 2.64% | 2.64% | 29% | $823,361 | ||||||||||||||||||||||||||||||||
2022 | $9.47 | 0.22 | 0.90 | 1.12 | (0.22) | (0.49) | (0.71) | $9.88 | 12.10% | 0.58% | 0.58% | 2.18% | 2.18% | 24% | $1,021,389 | ||||||||||||||||||||||||||||||||
2021 | $7.16 | 0.21 | 2.32 | 2.53 | (0.22) | — | (0.22) | $9.47 | 35.68% | 0.56% | 0.56% | 2.45% | 2.45% | 52% | $1,040,730 | ||||||||||||||||||||||||||||||||
2020 | $8.71 | 0.22 | (1.08) | (0.86) | (0.22) | (0.47) | (0.69) | $7.16 | (11.48)% | 0.56% | 0.56% | 2.42% | 2.42% | 85% | $820,173 |
For a Share Outstanding Throughout the Years Ended March 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) | |||||||||||||||||||||||||||||||||
G Class | |||||||||||||||||||||||||||||||||||||||||||||||
2024 | $8.79 | 0.29 | 0.55 | 0.84 | (0.30) | (0.46) | (0.76) | $8.87 | 10.06% | 0.01% | 0.58% | 3.38% | 2.81% | 17% | $7 | ||||||||||||||||||||||||||||||||
2023 | $9.89 | 0.29 | (0.53) | (0.24) | (0.29) | (0.57) | (0.86) | $8.79 | (2.34)% | 0.01% | 0.57% | 3.20% | 2.64% | 29% | $6 | ||||||||||||||||||||||||||||||||
2022 | $9.48 | 0.26 | 0.92 | 1.18 | (0.28) | (0.49) | (0.77) | $9.89 | 12.72% | 0.03% | 0.58% | 2.73% | 2.18% | 24% | $7 | ||||||||||||||||||||||||||||||||
2021 | $7.16 | 0.27 | 2.32 | 2.59 | (0.27) | — | (0.27) | $9.48 | 36.61% | 0.00% | 0.56% | 3.01% | 2.45% | 52% | $6 | ||||||||||||||||||||||||||||||||
2020(3) | $9.06 | 0.18 | (1.43) | (1.25) | (0.18) | (0.47) | (0.65) | $7.16 | (15.32)% | 0.00% | 0.56% | 3.02% | 2.46% | 85%(4) | $4 |
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)August 1, 2019 (commencement of sale) through March 31, 2020.
(4)Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended March 31, 2020.
*The amount shown for a share outstanding throughout the period may not correlate with the Statement(s) of Operations or precisely reflect the class expense differentials due to the timing of transactions in shares of a fund in relation to income earned and/or fluctuations in the fair value of a fund's investments.
†Ratios for periods less than one year are annualized. Zero balances may reflect amounts less than 0.005%.
See Notes to Financial Statements.
Report of Independent Registered Public Accounting Firm |
To the shareholders of the Equity Income Fund and the Board of Directors of American Century Capital Portfolios, Inc.
Opinion on the Financial Statements and Financial Highlights
We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of Equity Income Fund (the “Fund”), one of the funds constituting the American Century Capital Portfolios, Inc., as of March 31, 2024, the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Fund as of March 31, 2024, and the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on the Fund’s financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. Our procedures included confirmation of securities owned as of March 31, 2024, by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
/s/ Deloitte & Touche LLP
Kansas City, Missouri
May 16, 2024
We have served as the auditor of one or more American Century investment companies since 1997.
33
Management |
The Board of Directors
The individuals listed below serve as directors of the funds. Each director will continue to serve in this capacity until death, retirement, resignation or removal from office. The board has adopted a mandatory retirement age for directors who are not “interested persons,” as that term is defined in the Investment Company Act (independent directors). Independent directors shall retire on December 31 of the year in which they reach their 75th birthday.
Jonathan S. Thomas is an “interested person” because he currently serves as President and Chief Executive Officer of American Century Companies, Inc. (ACC), the parent company of American Century Investment Management, Inc. (ACIM or the advisor). The other directors (more than three-fourths of the total number) are independent. They are not employees, directors or officers of, and have no financial interest in, ACC or any of its wholly owned, direct or indirect, subsidiaries, including ACIM, American Century Investment Services, Inc. (ACIS) and American Century Services, LLC (ACS), and they do not have any other affiliations, positions or relationships that would cause them to be considered “interested persons” under the Investment Company Act. The directors serve in this capacity for seven (in the case of Jonathan S. Thomas, 16; and Thomas W. Bunn, 8) registered investment companies in the American Century Investments family of funds.
The following table presents additional information about the directors. The mailing address for each director is 4500 Main Street, Kansas City, Missouri 64111.
Name (Year of Birth) | Position(s) Held with Funds | Length of Time Served | Principal Occupation(s) During Past 5 Years | Number of American Century Portfolios Overseen by Director | Other Directorships Held During Past 5 Years | ||||||||||||
Independent Directors | |||||||||||||||||
Brian Bulatao (1964) | Director | Since 2022 | Chief Administrative Officer, Activision Blizzard, Inc. (2021 to present); Under Secretary of State for Management, U.S. Department of State (2018 to 2021) | 64 | None | ||||||||||||
Thomas W. Bunn (1953) | Director | Since 2017 | Retired | 119 | None | ||||||||||||
Chris H. Cheesman (1962) | Director | Since 2019 | Retired | 64 | Alleghany Corporation (2021 to 2022) | ||||||||||||
Barry Fink (1955) | Director | Since 2012 (independent since 2016) | Retired | 64 | None | ||||||||||||
Rajesh K. Gupta (1960) | Director | Since 2019 | Partner Emeritus, SeaCrest Investment Management and SeaCrest Wealth Management (2019 to present) | 64 | None |
34
Name (Year of Birth) | Position(s) Held with Funds | Length of Time Served | Principal Occupation(s) During Past 5 Years | Number of American Century Portfolios Overseen by Director | Other Directorships Held During Past 5 Years | ||||||||||||
Independent Directors | |||||||||||||||||
Lynn M. Jenkins (1963) | Director | Since 2019 | Senior Policy Advisor, Capital Hill Policy Group (2020 to present); Consultant, LJ Strategies (2019 to 2023) | 64 | MGP Ingredients, Inc. (2019 to 2021) | ||||||||||||
Jan M. Lewis (1957) | Director and Board Chair | Since 2011 (Board Chair since 2022) | Retired | 64 | None | ||||||||||||
Gary C. Meltzer (1963) | Director | Since 2022 | Advisor, Pontoro (2021 to present); Executive Advisor, Consultant and Investor, Harris Ariel Advisory LLC (2020 to present); Managing Partner, PricewaterhouseCoopers LLP (1985 to 2020) | 64 | ExcelFin Acquisition Corp., Apollo Realty Income Solutions, Inc. | ||||||||||||
Interested Director | |||||||||||||||||
Jonathan S. Thomas (1963) | Director | Since 2007 | President and Chief Executive Officer, ACC (2007 to present). Also serves as Chief Executive Officer, ACS; Director, ACC and other ACC subsidiaries | 150 | None |
The Statement of Additional Information has additional information about the fund's directors and is available without charge, upon request, by calling 1-800-345-2021.
35
Officers
The following table presents certain information about the executive officers of the funds. Each officer serves as an officer for 16 investment companies in the American Century family of funds. No officer is compensated for his or her service as an officer of the funds. The listed officers are interested persons of the funds and are appointed or re-appointed on an annual basis. The mailing address for each officer listed below is 4500 Main Street, Kansas City, Missouri 64111.
Name (Year of Birth) | Offices with the Funds | Principal Occupation(s) During the Past Five Years | ||||||
Patrick Bannigan (1965) | President since 2019 | Executive Vice President and Director, ACC (2012 to present); Chief Financial Officer, Chief Accounting Officer and Treasurer, ACC (2015 to present); Also serves as President, ACS; Vice President, ACIM; Chief Financial Officer, Chief Accounting Officer and/or Director, ACIM, ACS and other ACC subsidiaries | ||||||
R. Wes Campbell (1974) | Chief Financial Officer and Treasurer since 2018; Vice President since 2023 | Vice President, ACS (2020 to present); Investment Operations and Investment Accounting, ACS (2000 to present) | ||||||
Amy D. Shelton (1964) | Chief Compliance Officer and Vice President since 2014 | Chief Compliance Officer, American Century funds, (2014 to present); Chief Compliance Officer, ACIM (2014 to present); Chief Compliance Officer, ACIS (2009 to present). Also serves as Vice President, ACIS | ||||||
John Pak (1968) | General Counsel and Senior Vice President since 2021 | General Counsel and Senior Vice President, ACC (2021 to present); Also serves as General Counsel and Senior Vice President, ACIM, ACS and ACIS. Chief Legal Officer of Investment and Wealth Management, The Bank of New York Mellon (2014 to 2021) | ||||||
Cihan Kasikara (1974) | Vice President since 2023 | Senior Vice President, ACS (2022 to present); Treasurer, ACS (2023 to present); Vice President, ACS (2020 to 2022); Vice President, Franklin Templeton (2015 to 2020) | ||||||
Kathleen Gunja Nelson (1976) | Vice President since 2023 | Vice President, ACS (2017 to present) | ||||||
Ward D. Stauffer (1960) | Secretary since 2005 | Attorney, ACC (2003 to present) |
36
Liquidity Risk Management Program |
The Fund has adopted a liquidity risk management program (the “program”). The Fund’s Board of Directors (the "Board") has designated American Century Investment Management, Inc. (“ACIM”) as the administrator of the program. Personnel of ACIM or its affiliates, including members of ACIM’s Investment Oversight Committee who are members of ACIM’s Investment Management and Global Analytics departments, conduct the day-to-day operation of the program pursuant to the program.
Under the program, ACIM manages the Fund’s liquidity risk, which is the risk that the Fund could not meet shareholder redemption requests without significant dilution of remaining shareholders’ interests in the Fund. This risk is managed by monitoring the degree of liquidity of the Fund’s investments, limiting the amount of the Fund’s illiquid investments, and utilizing various risk management tools and facilities available to the Fund for meeting shareholder redemptions, among other means. ACIM’s process of determining the degree of liquidity of certain investments held by the Fund is supported by a third-party liquidity assessment vendor.
The Board reviewed a report prepared by ACIM regarding the operation and effectiveness of the program for the period January 1, 2023 through December 31, 2023. No significant liquidity events impacting the Fund were noted in the report. In addition, ACIM provided its assessment that the program had been effective in managing the Fund’s liquidity risk.
37
Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain retirement accounts are subject to federal income tax withholding at the IRS default rate of 10%.* 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.
You may elect a different withholding rate, or request zero withholding, by submitting an acceptable IRS Form W-4R election with your distribution request. You may notify us of your W-4R election by telephone, on our distribution forms, on IRS Form W-4R, or through other acceptable electronic means. If your withholding election is for an automatic withdrawal plan, you have the right to revoke your election at any time and any election you make will remain in effect until revoked by filing a new election.
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 according to state regulations if, at the time of your distribution, your tax residency is within one of the mandatory withholding states.
*Some 403(b), 457 and qualified retirement plan distributions may be subject to 20% mandatory withholding, as they are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
A description of the policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund is available without charge, upon request, by calling 1-800-345-2021. It is also available on American Century Investments’ website at americancentury.com/proxy and on the Securities and Exchange Commission’s website at sec.gov. Information regarding how the investment advisor voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on americancentury.com/proxy. It is also available at sec.gov.
Quarterly Portfolio Disclosure
The fund files its complete schedule of portfolio holdings with the Securities and Exchange
Commission (SEC) for the first and third quarters of each fiscal year as an exhibit to its reports on
Form N-PORT. These portfolio holdings are available on the fund's website at
americancentury.com and, upon request, by calling 1-800-345-2021. The fund’s Form N-PORT
reports are available on the SEC’s website at sec.gov.
38
Other Tax Information
The following information is provided pursuant to provisions of the Internal Revenue Code.
The fund hereby designates up to the maximum amount allowable as qualified dividend income for the fiscal year ended March 31, 2024.
For corporate taxpayers, the fund hereby designates $176,775,349 or up to the maximum amount allowable, of ordinary income distributions paid during the fiscal year ended March 31, 2024 as qualified for the corporate dividends received deduction.
The fund hereby designates $8,186,852 as qualified short-term capital gain distributions for purposes of Internal Revenue Code Section 871 for the fiscal year ended March 31, 2024.
The fund hereby designates $480,403,467, or up to the maximum amount allowable, as long-term capital gain distributions (20% rate gain distributions) for the fiscal year ended March 31, 2024.
The fund utilized earnings and profits of $62,970,581 distributed to shareholders on redemption of shares as part of the dividends paid deduction (tax equalization).
39
Notes |
40
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Contact Us | americancentury.com | |||||||
Automated Information Line | 1-800-345-8765 | |||||||
Investor Services Representative | 1-800-345-2021 or 816-531-5575 | |||||||
Investors Using Advisors | 1-800-378-9878 | |||||||
Business, Not-For-Profit, Employer-Sponsored Retirement Plans | 1-800-345-3533 | |||||||
Banks and Trust Companies, Broker-Dealers, Financial Professionals, Insurance Companies | 1-800-345-6488 | |||||||
Telecommunications Relay Service for the Deaf | 711 | |||||||
American Century 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. | ||||||||
©2024 American Century Proprietary Holdings, Inc. All rights reserved. CL-ANN-92268 2405 |
![image22.jpg](https://capedge.com/proxy/N-CSR/0000908186-24-000015/image22.jpg)
Annual Report | |||||
March 31, 2024 | |||||
Focused Large Cap Value Fund | |||||
Investor Class (ALVIX) | |||||
I Class (ALVSX) | |||||
A Class (ALPAX) | |||||
C Class (ALPCX) | |||||
R Class (ALVRX) | |||||
R5 Class (ALVGX) | |||||
R6 Class (ALVDX) | |||||
G Class (ACFLX) |
The Securities and Exchange Commission (SEC) adopted new rules that will require annual and semiannual reports to transition to a new format known as a Tailored Shareholder Report beginning in July 2024. The amendments will require the transmission of a concise report highlighting key fund information to investors. The detailed financial statements will remain available on our website, will be delivered to investors free of charge upon request, and will continue to be filed with the SEC.
Table of Contents |
President’s Letter | |||||
Performance | |||||
Portfolio Commentary | |||||
Fund Characteristics | |||||
Shareholder Fee Example | |||||
Schedule of Investments | |||||
Statement of Assets and Liabilities | |||||
Statement of Operations | |||||
Statement of Changes in Net Assets | |||||
Notes to Financial Statements | |||||
Financial Highlights | |||||
Report of Independent Registered Public Accounting Firm | |||||
Management | |||||
Liquidity Risk Management Program | |||||
Additional Information |
Any opinions expressed in this report reflect those of the author as of the date of the report, and do not necessarily represent the opinions of American Century Investments® or any other person in the American Century Investments organization. Any such opinions are subject to change at any time based upon market or other conditions and American Century Investments disclaims any responsibility to update such opinions. These opinions may not be relied upon as investment advice and, because investment decisions made by American Century Investments funds are based on numerous factors, may not be relied upon as an indication of trading intent on behalf of any American Century Investments fund. Security examples are used for representational purposes only and are not intended as recommendations to purchase or sell securities. Performance information for comparative indices and securities is provided to American Century Investments by third party vendors. To the best of American Century Investments’ knowledge, such information is accurate at the time of printing.
President’s Letter |
![image23.jpg](https://capedge.com/proxy/N-CSR/0000908186-24-000015/image23.jpg)
Dear Investor:
Thank you for reviewing this annual report for the period ending March 31, 2024. Annual reports help convey important information about fund returns, including market factors that affected performance. For additional investment insights, please visit americancentury.com.
Stocks Surged While Bonds Delivered Modest Gains
Soaring U.S. Treasury yields weighed on bond returns for the first six months of the reporting period. Meanwhile, inflation slowed but remained well above the Federal Reserve’s (Fed’s) target, lending conditions tightened, and recession risk rose. This fueled expectations for a shift in Fed policy, which, along with better-than-expected earnings, helped U.S. stocks deliver modest gains.
The Fed lifted rates in May, paused in June and hiked again in July to a range of 5.25% to 5.5%, a 22-year high. The Fed left rates unchanged in September but warned that persistent above-target inflation may require more tightening. This news pushed Treasury yields to multiyear highs in October and sent stocks tumbling. By November, inflation showed signs of moderating, and the Fed held rates steady again, reviving investor enthusiasm. Then, in December, Fed policymakers expressed more confidence about the inflation outlook and forecasted three rate cuts for 2024. Against this backdrop, recession fears eased, Treasury yields declined, and stocks and bonds ended 2023 on a strong note.
Despite the Fed’s continued pause, yields reversed course again in early 2024 amid a steady stream of better-than-expected economic data and persistent inflation. But the bond market’s late-2023 rally helped the Bloomberg U.S. Aggregate Bond Index maintain a gain of 1.70% for the 12-month period. Most stock indices continued to rally into 2024, buoyed by solid corporate earnings and expectations for Fed rate cuts. The S&P 500 Index returned 29.88% for the 12-month period, and growth stocks generally outperformed value stocks.
Remaining Diligent in Uncertain Times
We expect market volatility to linger as investors navigate a complex environment of persistent inflation, still-tight financial conditions, political uncertainty and slowing growth. In addition, the Israel-Hamas war and other tensions in the Middle East complicate the global backdrop and represent additional considerations for our investment teams.
Our firm has a long history of helping clients weather unpredictable and volatile markets, and we’re determined to meet today’s challenges. Thank you for your trust and confidence in American Century Investments.
With appreciation and respect,
![image48a16a.jpg](https://capedge.com/proxy/N-CSR/0000908186-24-000015/image48a16a.jpg)
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
2
Performance |
Total Returns as of March 31, 2024 | ||||||||||||||||||||
Average Annual Returns | ||||||||||||||||||||
Ticker Symbol | 1 year | 5 years | 10 years | Since Inception | Inception Date | |||||||||||||||
Investor Class | ALVIX | 13.22% | 9.72% | 8.32% | — | 7/30/99 | ||||||||||||||
Russell 1000 Value Index | — | 20.27% | 10.32% | 9.01% | — | — | ||||||||||||||
I Class | ALVSX | 13.54% | 9.95% | 8.54% | — | 8/10/01 | ||||||||||||||
A Class | ALPAX | 10/26/00 | ||||||||||||||||||
No sales charge | 12.93% | 9.44% | 8.05% | — | ||||||||||||||||
With sales charge | 6.44% | 8.16% | 7.41% | — | ||||||||||||||||
C Class | ALPCX | 12.20% | 8.64% | 7.26% | — | 11/7/01 | ||||||||||||||
R Class | ALVRX | 12.74% | 9.18% | 7.80% | — | 8/29/03 | ||||||||||||||
R5 Class | ALVGX | 13.41% | 9.94% | — | 8.60% | 4/10/17 | ||||||||||||||
R6 Class | ALVDX | 13.60% | 10.09% | 8.70% | — | 7/26/13 | ||||||||||||||
G Class | ACFLX | 14.13% | — | — | 8.81% | 3/15/22 |
Average annual returns since inception are presented when ten years of performance history is not available.
G Class returns would have been lower if a portion of the fees had not been waived.
C Class shares will automatically convert to A Class shares after being held for approximately eight years. C Class average annual returns do not reflect this conversion.
Sales charges include initial sales charges and contingent deferred sales charges (CDSCs), as applicable. A Class shares have a 5.75% maximum initial sales charge and may be subject to a maximum CDSC of 1.00%. C Class shares redeemed within 12 months of purchase are subject to a maximum CDSC of 1.00%. The SEC requires that mutual funds provide performance information net of maximum sales charges in all cases where charges could be applied.
Data presented reflect past performance. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance shown. Total returns for periods less than one year are not annualized. Investment return and principal value will fluctuate, and redemption value may be more or less than original cost. Data assumes reinvestment of dividends and capital gains, and none of the charts reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. To obtain performance data current to the most recent month end, please call 1-800-345-2021 or visit americancentury.com. For additional information about the fund, please consult the prospectus.
3
Growth of $10,000 Over 10 Years | ||
$10,000 investment made March 31, 2014 |
Performance for other share classes will vary due to differences in fee structure.
![chart-5312d58ca7e14a08884a.jpg](https://capedge.com/proxy/N-CSR/0000908186-24-000015/chart-5312d58ca7e14a08884a.jpg)
Value on March 31, 2024 | |||||
Investor Class — $22,243 | |||||
Russell 1000 Value Index — $23,696 | |||||
Total Annual Fund Operating Expenses | |||||||||||||||||||||||
Investor Class | I Class | A Class | C Class | R Class | R5 Class | R6 Class | G Class | ||||||||||||||||
0.84% | 0.64% | 1.09% | 1.84% | 1.34% | 0.64% | 0.49% | 0.49% |
The total annual fund operating expenses shown is as stated in the fund’s prospectus current as of the date of this report. The prospectus may vary from the expense ratio shown elsewhere in this report because it is based on a different time period, includes acquired fund fees and expenses, and, if applicable, does not include fee waivers or expense reimbursements.
Data presented reflect past performance. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance shown. Total returns for periods less than one year are not annualized. Investment return and principal value will fluctuate, and redemption value may be more or less than original cost. Data assumes reinvestment of dividends and capital gains, and none of the charts reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. To obtain performance data current to the most recent month end, please call 1-800-345-2021 or visit americancentury.com. For additional information about the fund, please consult the prospectus.
4
Portfolio Commentary |
Portfolio Managers: Brian Woglom, Adam Krenn, Kevin Toney, Michael Liss and Philip Sundell
Performance Summary
Focused Large Cap Value returned 13.22%* for the fiscal year ended March 31, 2024, compared with the 20.27% return of its benchmark, the Russell 1000 Value Index.
Focused Large Cap Value advanced during the fiscal year but underperformed its benchmark, the Russell 1000 Value Index. Allocation and stock selection overall, in the industrials and health care sectors, in particular, detracted from relative performance. Selection in financials and materials contributed to relative results.
Industrials and Health Care Detracted
Security selection in the industrials sector hindered relative performance. An underweight allocation, including no exposure to select benchmark holdings, had a negative impact on performance, as did overweight positions in RTX, an aerospace and defense company, and United Parcel Service, the parcel carrier.
An overweight allocation and security selection in the health care sector pressured results. Selection in the health care providers and services industry, including overweight positions in Quest Diagnostics, a clinical laboratory company, and Henry Schein, a dental and medical equipment distributor, limited performance. Roche Holding, the Switzerland-based pharmaceutical company, also underperformed.
Lack of exposure to technology conglomerate Meta Platforms detracted from relative results. Meta’s shares continued to benefit from cost-cutting efforts and the company’s investments in artificial intelligence. We do not own the stock because we think its risk/reward profile is less attractive relative to other names.
Stock Selection in Financials and Materials Contributed
Security selection in the financials sector helped relative performance, particularly in the insurance industry as The Allstate Corp. and Reinsurance Group of America emerged as top contributors to the portfolio. Allstate recently improved its profitability after implementing policy increases, particularly for its automobile insurance policies, while Reinsurance Group recently reported quarterly earnings that beat investors’ expectations.
In the materials sector, security selection benefited returns. An underweight allocation, including no exposure to the chemicals and metals and mining industries, was also beneficial.
Lack of exposure to pharmaceutical company Pfizer aided relative results. Pfizer’s shares recently underperformed after a drug trial for its obesity treatment drug failed to show positive outcomes. The company also lowered its guidance due to reduced expectations for its COVID-19 franchise.
*All fund returns referenced in this commentary are for Investor Class shares. Performance for other share classes will vary due to differences in fee structure; when Investor Class performance exceeds that of the fund’s benchmark, other share classes may not. See page 3 for returns for all share classes.
5
Fund Characteristics |
MARCH 31, 2024 | |||||
Types of Investments in Portfolio | % of net assets | ||||
Common Stocks | 97.9% | ||||
Short-Term Investments | 2.1% | ||||
Other Assets and Liabilities | 0.0% | ||||
Top Five Industries | % of net assets | ||||
Health Care Equipment and Supplies | 11.7% | ||||
Pharmaceuticals | 8.9% | ||||
Oil, Gas and Consumable Fuels | 7.6% | ||||
Insurance | 6.2% | ||||
Household Products | 6.0% |
6
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 October 1, 2023 to March 31, 2024.
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 mutual fund, or I Class shares of the American Century Diversified Bond Fund, in an American Century Investments account (i.e., not through a financial intermediary or employer-sponsored retirement plan account), American Century Investments may charge you a $25 annual account maintenance fee if the value of those shares is less than $10,000. We will redeem shares automatically in one of your accounts to pay the $25 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.
7
Beginning Account Value 10/1/23 | Ending Account Value 3/31/24 | Expenses Paid During Period(1) 10/1/23 - 3/31/24 | Annualized Expense Ratio(1) | |||||||||||
Actual | ||||||||||||||
Investor Class | $1,000 | $1,144.20 | $4.50 | 0.84% | ||||||||||
I Class | $1,000 | $1,146.30 | $3.43 | 0.64% | ||||||||||
A Class | $1,000 | $1,144.00 | $5.84 | 1.09% | ||||||||||
C Class | $1,000 | $1,139.60 | $9.84 | 1.84% | ||||||||||
R Class | $1,000 | $1,142.30 | $7.18 | 1.34% | ||||||||||
R5 Class | $1,000 | $1,146.30 | $3.43 | 0.64% | ||||||||||
R6 Class | $1,000 | $1,147.30 | $2.63 | 0.49% | ||||||||||
G Class | $1,000 | $1,148.60 | $0.05 | 0.01% | ||||||||||
Hypothetical | ||||||||||||||
Investor Class | $1,000 | $1,020.80 | $4.24 | 0.84% | ||||||||||
I Class | $1,000 | $1,021.80 | $3.23 | 0.64% | ||||||||||
A Class | $1,000 | $1,019.55 | $5.50 | 1.09% | ||||||||||
C Class | $1,000 | $1,015.80 | $9.27 | 1.84% | ||||||||||
R Class | $1,000 | $1,018.30 | $6.76 | 1.34% | ||||||||||
R5 Class | $1,000 | $1,021.80 | $3.23 | 0.64% | ||||||||||
R6 Class | $1,000 | $1,022.55 | $2.48 | 0.49% | ||||||||||
G Class | $1,000 | $1,024.95 | $0.05 | 0.01% |
(1)Expenses are equal to the class's annualized expense ratio listed in the table above, multiplied by the average account value over the period, multiplied by 183, the number of days in the most recent fiscal half-year, divided by 366, to reflect the one-half year period. Annualized expense ratio reflects actual expenses, including any applicable fee waivers or expense reimbursements and excluding any acquired fund fees and expenses.
8
Schedule of Investments |
MARCH 31, 2024
Shares | Value | |||||||
COMMON STOCKS — 97.9% | ||||||||
Aerospace and Defense — 2.1% | ||||||||
RTX Corp. | 750,389 | $ | 73,185,439 | |||||
Air Freight and Logistics — 3.4% | ||||||||
United Parcel Service, Inc., Class B | 783,521 | 116,454,726 | ||||||
Banks — 5.4% | ||||||||
JPMorgan Chase & Co. | 487,419 | 97,630,026 | ||||||
Truist Financial Corp. | 2,284,305 | 89,042,209 | ||||||
186,672,235 | ||||||||
Beverages — 1.5% | ||||||||
Heineken NV | 548,609 | 52,890,067 | ||||||
Capital Markets — 5.0% | ||||||||
Bank of New York Mellon Corp. | 1,264,729 | 72,873,685 | ||||||
BlackRock, Inc. | 50,843 | 42,387,809 | ||||||
Charles Schwab Corp. | 760,355 | 55,004,081 | ||||||
170,265,575 | ||||||||
Communications Equipment — 3.2% | ||||||||
Cisco Systems, Inc. | 850,689 | 42,457,888 | ||||||
F5, Inc.(1) | 352,013 | 66,738,145 | ||||||
109,196,033 | ||||||||
Containers and Packaging — 3.3% | ||||||||
Packaging Corp. of America | 232,505 | 44,124,799 | ||||||
Sonoco Products Co. | 1,181,045 | 68,311,643 | ||||||
112,436,442 | ||||||||
Diversified Telecommunication Services — 1.8% | ||||||||
Verizon Communications, Inc. | 1,457,279 | 61,147,427 | ||||||
Electric Utilities — 4.2% | ||||||||
Duke Energy Corp. | 1,470,345 | 142,197,065 | ||||||
Electronic Equipment, Instruments and Components — 1.5% | ||||||||
TE Connectivity Ltd. | 362,211 | 52,607,526 | ||||||
Entertainment — 1.0% | ||||||||
Walt Disney Co. | 285,830 | 34,974,159 | ||||||
Financial Services — 2.0% | ||||||||
Berkshire Hathaway, Inc., Class B(1) | 162,934 | 68,517,006 | ||||||
Food Products — 3.7% | ||||||||
Conagra Brands, Inc. | 2,044,528 | 60,599,810 | ||||||
Mondelez International, Inc., Class A | 960,893 | 67,262,510 | ||||||
127,862,320 | ||||||||
Gas Utilities — 2.6% | ||||||||
Atmos Energy Corp. | 748,606 | 88,986,795 | ||||||
Ground Transportation — 3.5% | ||||||||
Norfolk Southern Corp. | 465,008 | 118,516,589 | ||||||
Health Care Equipment and Supplies — 11.7% | ||||||||
Becton Dickinson & Co. | 263,186 | 65,125,376 | ||||||
Medtronic PLC | 2,209,971 | 192,598,972 | ||||||
Zimmer Biomet Holdings, Inc. | 1,095,648 | 144,603,623 | ||||||
402,327,971 |
9
Shares | Value | |||||||
Health Care Providers and Services — 5.1% | ||||||||
Henry Schein, Inc.(1) | 1,147,517 | $ | 86,660,484 | |||||
Quest Diagnostics, Inc. | 671,041 | 89,322,267 | ||||||
175,982,751 | ||||||||
Household Products — 6.0% | ||||||||
Colgate-Palmolive Co. | 1,276,599 | 114,957,740 | ||||||
Kimberly-Clark Corp. | 688,680 | 89,080,758 | ||||||
204,038,498 | ||||||||
Insurance — 6.2% | ||||||||
Allstate Corp. | 426,901 | 73,858,142 | ||||||
Marsh & McLennan Cos., Inc. | 205,255 | 42,278,425 | ||||||
Reinsurance Group of America, Inc. | 507,043 | 97,798,454 | ||||||
213,935,021 | ||||||||
Oil, Gas and Consumable Fuels — 7.6% | ||||||||
Enterprise Products Partners LP | 2,707,473 | 79,004,062 | ||||||
Exxon Mobil Corp. | 703,723 | 81,800,761 | ||||||
TotalEnergies SE, ADR | 1,472,442 | 101,348,183 | ||||||
262,153,006 | ||||||||
Personal Care Products — 5.7% | ||||||||
Kenvue, Inc. | 3,553,915 | 76,267,016 | ||||||
Unilever PLC, ADR | 2,397,899 | 120,350,551 | ||||||
196,617,567 | ||||||||
Pharmaceuticals — 8.9% | ||||||||
Johnson & Johnson | 1,519,467 | 240,364,484 | ||||||
Roche Holding AG | 254,028 | 64,858,141 | ||||||
305,222,625 | ||||||||
Semiconductors and Semiconductor Equipment — 1.5% | ||||||||
Analog Devices, Inc. | 264,187 | 52,253,547 | ||||||
Specialized REITs — 1.0% | ||||||||
Public Storage | 118,209 | 34,287,702 | ||||||
TOTAL COMMON STOCKS (Cost $2,836,760,918) | 3,362,728,092 | |||||||
SHORT-TERM INVESTMENTS — 2.1% | ||||||||
Repurchase Agreements — 2.1% | ||||||||
BMO Capital Markets Corp., (collateralized by various U.S. Treasury obligations, 4.625%, 9/15/26, valued at $3,110,892), in a joint trading account at 5.28%, dated 3/28/24, due 4/1/24 (Delivery value $3,050,960) | 3,049,171 | |||||||
Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 2.50%, 3/31/27, valued at $56,726,348), at 5.30%, dated 3/28/24, due 4/1/24 (Delivery value $55,646,750) | 55,614,000 | |||||||
TD Securities (USA) LLC, (collateralized by various U.S. Treasury obligations, 0.50% - 2.25%, 2/28/25 - 8/31/27, valued at $12,571,380), at 5.30%, dated 3/28/24, due 4/1/24 (Delivery value $12,330,257) | 12,323,000 | |||||||
TOTAL SHORT-TERM INVESTMENTS (Cost $70,986,171) | 70,986,171 | |||||||
TOTAL INVESTMENT SECURITIES — 100.0% (Cost $2,907,747,089) | 3,433,714,263 | |||||||
OTHER ASSETS AND LIABILITIES — 0.0% | (143,092) | |||||||
TOTAL NET ASSETS — 100.0% | $ | 3,433,571,171 |
10
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS | ||||||||||||||||||||
Currency Purchased | Currency Sold | Counterparty | Settlement Date | Unrealized Appreciation (Depreciation) | ||||||||||||||||
USD | 54,721,594 | CHF | 48,593,651 | UBS AG | 6/28/24 | $ | 323,087 | |||||||||||||
USD | 42,675,213 | EUR | 39,245,256 | Bank of America N.A. | 6/28/24 | 187,122 | ||||||||||||||
USD | 42,664,138 | EUR | 39,245,256 | JPMorgan Chase Bank N.A. | 6/28/24 | 176,047 | ||||||||||||||
USD | 3,446,734 | EUR | 3,181,179 | JPMorgan Chase Bank N.A. | 6/28/24 | 2,695 | ||||||||||||||
USD | 42,686,967 | EUR | 39,245,256 | Morgan Stanley | 6/28/24 | 198,876 | ||||||||||||||
USD | 100,835,963 | GBP | 79,685,452 | Morgan Stanley | 6/28/24 | 215,834 | ||||||||||||||
$ | 1,103,661 |
NOTES TO SCHEDULE OF INVESTMENTS | ||||||||
ADR | – | American Depositary Receipt | ||||||
CHF | – | Swiss Franc | ||||||
EUR | – | Euro | ||||||
GBP | – | British Pound | ||||||
USD | – | United States Dollar |
(1)Non-income producing.
See Notes to Financial Statements.
11
Statement of Assets and Liabilities |
MARCH 31, 2024 | |||||
Assets | |||||
Investment securities, at value (cost of $2,907,747,089) | $ | 3,433,714,263 | |||
Cash | 101,230 | ||||
Receivable for investments sold | 335,038 | ||||
Receivable for capital shares sold | 70,461 | ||||
Unrealized appreciation on forward foreign currency exchange contracts | 1,103,661 | ||||
Dividends and interest receivable | 8,354,580 | ||||
3,443,679,233 | |||||
Liabilities | |||||
Payable for investments purchased | 2,381,773 | ||||
Payable for capital shares redeemed | 7,125,033 | ||||
Accrued management fees | 442,647 | ||||
Distribution and service fees payable | 9,745 | ||||
Accrued other expenses | 148,864 | ||||
10,108,062 | |||||
Net Assets | $ | 3,433,571,171 | |||
Net Assets Consist of: | |||||
Capital (par value and paid-in surplus) | $ | 2,852,786,126 | |||
Distributable earnings (loss) | 580,785,045 | ||||
$ | 3,433,571,171 |
Net Assets | Shares Outstanding | Net Asset Value Per Share* | |||||||||
Investor Class, $0.01 Par Value | $542,359,288 | 51,435,616 | $10.54 | ||||||||
I Class, $0.01 Par Value | $35,437,475 | 3,356,461 | $10.56 | ||||||||
A Class, $0.01 Par Value | $31,370,809 | 2,976,380 | $10.54 | ||||||||
C Class, $0.01 Par Value | $883,867 | 83,807 | $10.55 | ||||||||
R Class, $0.01 Par Value | $5,968,547 | 565,331 | $10.56 | ||||||||
R5 Class, $0.01 Par Value | $8,893 | 842 | $10.56 | ||||||||
R6 Class, $0.01 Par Value | $64,685,478 | 6,130,917 | $10.55 | ||||||||
G Class, $0.01 Par Value | $2,752,856,814 | 260,577,771 | $10.56 |
*Maximum offering price per share was equal to the net asset value per share for all share classes, except A Class, for which the maximum offering price per share was $11.18 (net asset value divided by 0.9425). A contingent deferred sales charge may be imposed on redemptions of A Class and C Class.
See Notes to Financial Statements.
12
Statement of Operations |
YEAR ENDED MARCH 31, 2024 | |||||
Investment Income (Loss) | |||||
Income: | |||||
Dividends (net of foreign taxes withheld of $1,423,653) | $ | 85,738,430 | |||
Interest | 4,371,295 | ||||
90,109,725 | |||||
Expenses: | |||||
Management fees | 17,257,083 | ||||
Distribution and service fees: | |||||
A Class | 75,433 | ||||
C Class | 10,168 | ||||
R Class | 30,707 | ||||
Directors' fees and expenses | 105,300 | ||||
Other expenses | 267,642 | ||||
17,746,333 | |||||
Fees waived - G Class | (11,804,747) | ||||
5,941,586 | |||||
Net investment income (loss) | 84,168,139 | ||||
Realized and Unrealized Gain (Loss) | |||||
Net realized gain (loss) on: | |||||
Investment transactions | 124,199,209 | ||||
Forward foreign currency exchange contract transactions | (569,776) | ||||
Foreign currency translation transactions | (60,303) | ||||
123,569,130 | |||||
Change in net unrealized appreciation (depreciation) on: | |||||
Investments | 214,544,960 | ||||
Forward foreign currency exchange contracts | 3,069,175 | ||||
Translation of assets and liabilities in foreign currencies | 10,122 | ||||
217,624,257 | |||||
Net realized and unrealized gain (loss) | 341,193,387 | ||||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 425,361,526 |
See Notes to Financial Statements.
13
Statement of Changes in Net Assets |
YEARS ENDED MARCH 31, 2024 AND MARCH 31, 2023 | ||||||||
Increase (Decrease) in Net Assets | March 31, 2024 | March 31, 2023 | ||||||
Operations | ||||||||
Net investment income (loss) | $ | 84,168,139 | $ | 83,248,917 | ||||
Net realized gain (loss) | 123,569,130 | 155,296,912 | ||||||
Change in net unrealized appreciation (depreciation) | 217,624,257 | (231,506,682) | ||||||
Net increase (decrease) in net assets resulting from operations | 425,361,526 | 7,039,147 | ||||||
Distributions to Shareholders | ||||||||
From earnings: | ||||||||
Investor Class | (19,826,172) | (38,327,833) | ||||||
I Class | (1,277,498) | (2,716,287) | ||||||
A Class | (1,025,756) | (1,991,093) | ||||||
C Class | (26,298) | (62,895) | ||||||
R Class | (189,556) | (362,128) | ||||||
R5 Class | (318) | (523) | ||||||
R6 Class | (2,743,885) | (12,670,353) | ||||||
G Class | (113,132,105) | (175,533,919) | ||||||
Decrease in net assets from distributions | (138,221,588) | (231,665,031) | ||||||
Capital Share Transactions | ||||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | (5,796,773) | (237,481,293) | ||||||
Net increase (decrease) in net assets | 281,343,165 | (462,107,177) | ||||||
Net Assets | ||||||||
Beginning of period | 3,152,228,006 | 3,614,335,183 | ||||||
End of period | $ | 3,433,571,171 | $ | 3,152,228,006 |
See Notes to Financial Statements.
14
Notes to Financial Statements |
MARCH 31, 2024
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. Focused Large Cap Value Fund (the fund) is one fund in a series issued by the corporation. The fund’s investment objective is to seek long-term capital growth. Income is a secondary objective.
The fund offers the Investor Class, I Class, A Class, C Class, R Class, R5 Class, R6 Class and G Class. The A Class may incur an initial sales charge. The A Class and C Class may be subject to a contingent deferred sales charge.
2. Significant Accounting Policies
The following is a summary of significant accounting policies consistently followed by the fund in preparation of its financial statements. The fund is an investment company and follows accounting and reporting guidance in accordance with accounting principles generally accepted in the United States of America. This may require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from these estimates. Management evaluated the impact of events or transactions occurring through the date the financial statements were issued that would merit recognition or disclosure.
Investment Valuations — The fund determines the fair value of its investments and computes its net asset value (NAV) per share at the close of regular trading (usually 4 p.m. Eastern time) on the New York Stock Exchange (NYSE) on each day the NYSE is open. The value of investments of the fund is determined by American Century Investment Management, Inc. (ACIM) (the investment advisor), as the valuation designee, pursuant to its valuation policies and procedures. The Board of Directors oversees the valuation designee and reviews its valuation policies and procedures at least annually.
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 NAV per share. Repurchase agreements are valued at cost, which approximates fair value. 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.
If the valuation designee determines that the market price for a portfolio security is not readily available or is believed by the valuation designee to be unreliable, such security is valued at fair value as determined in good faith by the valuation designee, in accordance with its policies and procedures. Circumstances that may cause the fund to determine that market quotations are not available or reliable include, but are not limited to: when there is a significant event subsequent to the market quotation; trading in a security has been halted during the trading day; or trading in a security is insufficient or did not take place due to a closure or holiday.
The valuation designee monitors for significant events occurring after the close of an investment’s primary exchange but before the fund’s NAV per share is determined. Significant events may include, but are not limited to: corporate announcements and transactions; regulatory news, 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 valuation designee also monitors for significant fluctuations between domestic and foreign markets, as evidenced by the U.S. market or such other indicators that it deems appropriate. The valuation designee may apply a model-derived factor to the closing price of equity securities traded on foreign securities exchanges. The factor is based on observable market data as provided by an independent pricing service.
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Foreign Currency Translations — All assets and liabilities, including investment securities and other financial instruments, initially expressed in foreign currencies are translated into U.S. dollars each day at the mean of the appropriate currency exchange rate at the close of the NYSE as provided by an independent pricing service. 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.
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 ACIM has determined are creditworthy pursuant to criteria adopted by the Board of Directors. The fund requires that the collateral, represented by securities, received in a repurchase transaction be transferred to the custodian in a manner sufficient to enable the fund to obtain those securities in the event of a default under the repurchase agreement. ACIM monitors, on a daily basis, the securities transferred to ensure the value, including accrued interest, of the securities under each repurchase agreement is equal to or greater than amounts owed to the fund under each repurchase agreement.
Joint Trading Account — Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the fund, along with certain other funds in the American Century Investments family of funds, may transfer uninvested cash balances into a joint trading account. These balances are invested in one or more repurchase agreements that are collateralized by U.S. Treasury or Agency obligations.
Income Tax Status — It is the fund's policy to distribute substantially all net investment income and net realized gains to shareholders and to otherwise qualify as a regulated investment company under provisions of the Internal Revenue Code. Accordingly, no provision has been made for income taxes. The fund files U.S. federal, state, local and non-U.S. tax returns as applicable. The fund's tax returns are subject to examination by the relevant taxing authority until expiration of the applicable statute of limitations, which is generally three years from the date of filing but can be longer in certain jurisdictions. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination and for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Multiple Class — All shares of the fund represent an equal pro rata interest in the net assets of the class to which such shares belong, and have identical voting, dividend, liquidation and other rights and the same terms and conditions, except for class specific expenses and exclusive rights to vote on matters affecting only individual classes. Income, non-class specific expenses, and realized and unrealized capital gains and losses of the fund are allocated to each class of shares based on their relative net assets.
Distributions to Shareholders — Distributions from net investment income, 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.
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3. Fees and Transactions with Related Parties
Certain officers and directors of the corporation are also officers and/or directors of American Century Companies, Inc. (ACC). The corporation's investment advisor, ACIM, the corporation's distributor, American Century Investment Services, Inc. (ACIS), and the corporation's transfer agent, American Century Services, LLC, are wholly owned, directly or indirectly, by ACC. Various funds issued by American Century Asset Allocation Portfolios, Inc. own, in aggregate, 50% of the shares of the fund. Related parties do not invest in the fund for the purpose of exercising management or control.
Management Fees — The corporation has entered into a management agreement with ACIM, under which ACIM provides the fund with investment advisory and management services in exchange for a single, unified management fee (the fee) per class. The agreement provides that ACIM will pay all expenses of managing and operating the fund, except brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), extraordinary expenses, and expenses incurred in connection with the provision of shareholder services and distribution services under a plan adopted pursuant to Rule 12b-1 under the 1940 Act. The fee is computed and accrued daily based on each class's daily net assets and paid monthly in arrears. The difference in the fee among the classes is a result of their separate arrangements for non-Rule 12b-1 shareholder services. It is not the result of any difference in advisory or custodial fees or other expenses related to the management of the fund's assets, which do not vary by class. The 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), as well as exchange-traded funds managed by the investment advisor, that use very similar investment teams and strategies (strategy assets). 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 management fee schedule range and the effective annual management fee for each class for the period ended March 31, 2024 are as follows:
Management Fee Schedule Range | Effective Annual Management Fee | |||||||
Investor Class | 0.70% to 0.90% | 0.83% | ||||||
I Class | 0.50% to 0.70% | 0.63% | ||||||
A Class | 0.70% to 0.90% | 0.83% | ||||||
C Class | 0.70% to 0.90% | 0.83% | ||||||
R Class | 0.70% to 0.90% | 0.83% | ||||||
R5 Class | 0.50% to 0.70% | 0.63% | ||||||
R6 Class | 0.35% to 0.55% | 0.48% | ||||||
G Class | 0.35% to 0.55% | 0.00%(1) |
(1)Effective annual management fee before waiver was 0.48%.
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 March 31, 2024 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.
Other Expenses — A fund’s other expenses may include interest charges, clearing exchange fees, proxy solicitation expenses, fees associated with the recovery of foreign tax reclaims and other miscellaneous expenses.
17
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 $664,362 and $3,299,689, respectively. The effect of interfund transactions on the Statement of Operations was $(9,732) 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 March 31, 2024 were $1,397,071,650 and $1,471,112,584, respectively.
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5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Year ended March 31, 2024 | Year ended March 31, 2023 | |||||||||||||
Shares | Amount | Shares | Amount | |||||||||||
Investor Class/Shares Authorized | 550,000,000 | 450,000,000 | ||||||||||||
Sold | 1,096,007 | $ | 10,788,252 | 3,451,206 | $ | 34,184,846 | ||||||||
Issued in reinvestment of distributions | 1,982,008 | 19,607,124 | 3,924,017 | 37,917,689 | ||||||||||
Redeemed | (11,784,076) | (115,540,495) | (6,561,325) | (65,104,444) | ||||||||||
(8,706,061) | (85,145,119) | 813,898 | 6,998,091 | |||||||||||
I Class/Shares Authorized | 40,000,000 | 40,000,000 | ||||||||||||
Sold | 765,514 | 7,526,700 | 1,763,695 | 17,533,084 | ||||||||||
Issued in reinvestment of distributions | 121,446 | 1,203,425 | 266,688 | 2,580,465 | ||||||||||
Redeemed | (1,230,738) | (12,045,583) | (2,056,974) | (20,239,098) | ||||||||||
(343,778) | (3,315,458) | (26,591) | (125,549) | |||||||||||
A Class/Shares Authorized | 30,000,000 | 30,000,000 | ||||||||||||
Sold | 526,188 | 5,109,849 | 613,956 | 6,071,000 | ||||||||||
Issued in reinvestment of distributions | 93,008 | 920,091 | 184,811 | 1,786,572 | ||||||||||
Redeemed | (885,286) | (8,688,280) | (779,204) | (7,649,167) | ||||||||||
(266,090) | (2,658,340) | 19,563 | 208,405 | |||||||||||
C Class/Shares Authorized | 20,000,000 | 20,000,000 | ||||||||||||
Sold | 7,355 | 72,087 | 69,102 | 670,411 | ||||||||||
Issued in reinvestment of distributions | 2,514 | 24,873 | 6,024 | 58,405 | ||||||||||
Redeemed | (38,664) | (378,972) | (56,641) | (542,026) | ||||||||||
(28,795) | (282,012) | 18,485 | 186,790 | |||||||||||
R Class/Shares Authorized | 20,000,000 | 20,000,000 | ||||||||||||
Sold | 153,303 | 1,504,161 | 237,386 | 2,333,631 | ||||||||||
Issued in reinvestment of distributions | 18,018 | 178,489 | 35,619 | 344,977 | ||||||||||
Redeemed | (262,313) | (2,511,287) | (126,948) | (1,231,738) | ||||||||||
(90,992) | (828,637) | 146,057 | 1,446,870 | |||||||||||
R5 Class/Shares Authorized | 20,000,000 | 20,000,000 | ||||||||||||
Issued in reinvestment of distributions | 32 | 318 | 54 | 523 | ||||||||||
R6 Class/Shares Authorized | 150,000,000 | 150,000,000 | ||||||||||||
Sold | 1,986,969 | 19,454,873 | 5,099,217 | 50,393,354 | ||||||||||
Issued in reinvestment of distributions | 274,458 | 2,716,453 | 1,306,863 | 12,626,998 | ||||||||||
Redeemed | (11,368,487) | (111,058,438) | (7,687,775) | (75,070,659) | ||||||||||
(9,107,060) | (88,887,112) | (1,281,695) | (12,050,307) | |||||||||||
G Class/Shares Authorized | 2,000,000,000 | 1,800,000,000 | ||||||||||||
Sold | 39,109,080 | 386,569,733 | 15,924,302 | 154,075,038 | ||||||||||
Issued in reinvestment of distributions | 11,406,586 | 113,132,105 | 18,173,029 | 175,533,919 | ||||||||||
Redeemed | (32,700,422) | (324,382,251) | (56,812,843) | (563,755,073) | ||||||||||
17,815,244 | 175,319,587 | (22,715,512) | (234,146,116) | |||||||||||
Net increase (decrease) | (727,500) | $ | (5,796,773) | (23,025,741) | $ | (237,481,293) |
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6. Fair Value Measurements
The fund's investments valuation process is based on several considerations and may use multiple inputs to determine the fair value of the investments held by the fund. In conformity with accounting principles generally accepted in the United States of America, the inputs used to determine a valuation are classified into three broad levels.
•Level 1 valuation inputs consist of unadjusted quoted prices in an active market for identical investments.
•Level 2 valuation inputs consist of direct or indirect observable market data (including quoted prices for comparable investments, evaluations of subsequent market events, interest rates, prepayment speeds, credit risk, etc.). These inputs also consist of quoted prices for identical investments initially expressed in local currencies that are adjusted through translation into U.S. dollars.
•Level 3 valuation inputs consist of unobservable data (including a fund’s own assumptions).
The level classification is based on the lowest level input that is significant to the fair valuation measurement. The valuation inputs are not necessarily an indication of the risks associated with investing in these securities or other financial instruments.
The following is a summary of the level classifications as of period end. The Schedule of Investments provides additional information on the fund's portfolio holdings.
Level 1 | Level 2 | Level 3 | |||||||||
Assets | |||||||||||
Investment Securities | |||||||||||
Common Stocks | $ | 3,244,979,884 | $ | 117,748,208 | — | ||||||
Short-Term Investments | — | 70,986,171 | — | ||||||||
$ | 3,244,979,884 | $ | 188,734,379 | — | |||||||
Other Financial Instruments | |||||||||||
Forward Foreign Currency Exchange Contracts | — | $ | 1,103,661 | — |
7. Derivative Instruments
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. A fund will segregate cash, cash equivalents or other appropriate liquid securities on its records in amounts sufficient to meet requirements. 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 settlement 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 $315,768,750.
The value of foreign currency risk derivative instruments as of March 31, 2024, is disclosed on the Statement of Assets and Liabilities as an asset of $1,103,661 in unrealized appreciation on forward foreign currency exchange contracts. For the year ended March 31, 2024, the effect of foreign currency risk derivative instruments on the Statement of Operations was $(569,776) in net realized gain (loss) on forward foreign currency exchange contract transactions and $3,069,175 in change in net unrealized appreciation (depreciation) on forward foreign currency exchange contracts.
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8. Risk Factors
The value of the fund’s shares will go up and down, sometimes rapidly or unpredictably, based on the performance of the securities owned by the fund and other factors generally affecting the securities market. Market risks, including political, regulatory, economic and social developments, can affect the value of the fund’s investments. Natural disasters, public health emergencies, war, terrorism and other unforeseeable events may lead to increased market volatility and may have adverse long-term effects on world economies and markets generally.
There are certain risks involved in investing in foreign securities. These risks include those resulting from political events (such as civil unrest, national elections and imposition of exchange controls), social and economic events (such as labor strikes and rising inflation), and natural disasters. Securities of foreign issuers may be less liquid and more volatile. Investing a significant portion of assets in one country or region may accentuate these risks.
9. Federal Tax Information
The tax character of distributions paid during the years ended March 31, 2024 and March 31, 2023 were as follows:
2024 | 2023 | |||||||
Distributions Paid From | ||||||||
Ordinary income | $ | 101,050,041 | $ | 96,269,988 | ||||
Long-term capital gains | $ | 37,171,547 | $ | 135,395,043 |
The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
As of period end, the federal tax cost of investments and the components of distributable earnings on a tax-basis were as follows:
Federal tax cost of investments | $ | 2,944,223,706 | |||
Gross tax appreciation of investments | $ | 521,834,127 | |||
Gross tax depreciation of investments | (32,343,570) | ||||
Net tax appreciation (depreciation) of investments | 489,490,557 | ||||
Net tax appreciation (depreciation) on derivatives and translation of assets and liabilities in foreign currencies | 601 | ||||
Net tax appreciation (depreciation) | $ | 489,491,158 | |||
Undistributed ordinary income | $ | 16,545,926 | |||
Accumulated long-term gains | $ | 74,747,961 |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales.
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Financial Highlights |
For a Share Outstanding Throughout the Years Ended March 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 | |||||||||||||||||||||||||||||||||||||||||||||||
2024 | $9.66 | 0.20 | 1.05 | 1.25 | (0.20) | (0.17) | (0.37) | $10.54 | 13.22% | 0.84% | 0.84% | 2.00% | 2.00% | 45% | $542,359 | ||||||||||||||||||||||||||||||||
2023 | $10.35 | 0.19 | (0.22) | (0.03) | (0.18) | (0.48) | (0.66) | $9.66 | (0.18)% | 0.84% | 0.84% | 1.91% | 1.91% | 47% | $581,007 | ||||||||||||||||||||||||||||||||
2022 | $11.80 | 0.19 | 1.11 | 1.30 | (0.20) | (2.55) | (2.75) | $10.35 | 11.82% | 0.83% | 0.83% | 1.59% | 1.59% | 42% | $613,873 | ||||||||||||||||||||||||||||||||
2021 | $8.24 | 0.19 | 3.62 | 3.81 | (0.19) | (0.06) | (0.25) | $11.80 | 46.64% | 0.83% | 0.83% | 1.90% | 1.90% | 112% | $645,489 | ||||||||||||||||||||||||||||||||
2020 | $9.85 | 0.18 | (1.52) | (1.34) | (0.18) | (0.09) | (0.27) | $8.24 | (14.21)% | 0.84% | 0.84% | 1.72% | 1.72% | 72% | $456,382 | ||||||||||||||||||||||||||||||||
I Class | |||||||||||||||||||||||||||||||||||||||||||||||
2024 | $9.67 | 0.22 | 1.06 | 1.28 | (0.22) | (0.17) | (0.39) | $10.56 | 13.54% | 0.64% | 0.64% | 2.20% | 2.20% | 45% | $35,437 | ||||||||||||||||||||||||||||||||
2023 | $10.36 | 0.21 | (0.22) | (0.01) | (0.20) | (0.48) | (0.68) | $9.67 | 0.02% | 0.64% | 0.64% | 2.11% | 2.11% | 47% | $35,789 | ||||||||||||||||||||||||||||||||
2022 | $11.81 | 0.22 | 1.10 | 1.32 | (0.22) | (2.55) | (2.77) | $10.36 | 12.03% | 0.63% | 0.63% | 1.79% | 1.79% | 42% | $38,604 | ||||||||||||||||||||||||||||||||
2021 | $8.24 | 0.22 | 3.62 | 3.84 | (0.21) | (0.06) | (0.27) | $11.81 | 47.06% | 0.63% | 0.63% | 2.10% | 2.10% | 112% | $42,273 | ||||||||||||||||||||||||||||||||
2020 | $9.86 | 0.20 | (1.53) | (1.33) | (0.20) | (0.09) | (0.29) | $8.24 | (14.13)% | 0.64% | 0.64% | 1.92% | 1.92% | 72% | $20,080 |
For a Share Outstanding Throughout the Years Ended March 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 | |||||||||||||||||||||||||||||||||||||||||||||||
2024 | $9.66 | 0.17 | 1.05 | 1.22 | (0.17) | (0.17) | (0.34) | $10.54 | 12.93% | 1.09% | 1.09% | 1.75% | 1.75% | 45% | $31,371 | ||||||||||||||||||||||||||||||||
2023 | $10.34 | 0.16 | (0.20) | (0.04) | (0.16) | (0.48) | (0.64) | $9.66 | (0.32)% | 1.09% | 1.09% | 1.66% | 1.66% | 47% | $31,310 | ||||||||||||||||||||||||||||||||
2022 | $11.80 | 0.17 | 1.09 | 1.26 | (0.17) | (2.55) | (2.72) | $10.34 | 11.44% | 1.08% | 1.08% | 1.34% | 1.34% | 42% | $33,334 | ||||||||||||||||||||||||||||||||
2021 | $8.23 | 0.17 | 3.62 | 3.79 | (0.16) | (0.06) | (0.22) | $11.80 | 46.44% | 1.08% | 1.08% | 1.65% | 1.65% | 112% | $34,806 | ||||||||||||||||||||||||||||||||
2020 | $9.85 | 0.15 | (1.53) | (1.38) | (0.15) | (0.09) | (0.24) | $8.23 | (14.52)% | 1.09% | 1.09% | 1.47% | 1.47% | 72% | $26,342 | ||||||||||||||||||||||||||||||||
C Class | |||||||||||||||||||||||||||||||||||||||||||||||
2024 | $9.66 | 0.10 | 1.06 | 1.16 | (0.10) | (0.17) | (0.27) | $10.55 | 12.20% | 1.84% | 1.84% | 1.00% | 1.00% | 45% | $884 | ||||||||||||||||||||||||||||||||
2023 | $10.35 | 0.09 | (0.21) | (0.12) | (0.09) | (0.48) | (0.57) | $9.66 | (1.17)% | 1.84% | 1.84% | 0.91% | 0.91% | 47% | $1,088 | ||||||||||||||||||||||||||||||||
2022 | $11.80 | 0.07 | 1.11 | 1.18 | (0.08) | (2.55) | (2.63) | $10.35 | 10.69% | 1.83% | 1.83% | 0.59% | 0.59% | 42% | $974 | ||||||||||||||||||||||||||||||||
2021 | $8.23 | 0.09 | 3.62 | 3.71 | (0.08) | (0.06) | (0.14) | $11.80 | 45.31% | 1.83% | 1.83% | 0.90% | 0.90% | 112% | $1,358 | ||||||||||||||||||||||||||||||||
2020 | $9.85 | 0.07 | (1.52) | (1.45) | (0.08) | (0.09) | (0.17) | $8.23 | (15.14)% | 1.84% | 1.84% | 0.72% | 0.72% | 72% | $2,324 | ||||||||||||||||||||||||||||||||
R Class | |||||||||||||||||||||||||||||||||||||||||||||||
2024 | $9.67 | 0.14 | 1.07 | 1.21 | (0.15) | (0.17) | (0.32) | $10.56 | 12.74% | 1.34% | 1.34% | 1.50% | 1.50% | 45% | $5,969 | ||||||||||||||||||||||||||||||||
2023 | $10.36 | 0.14 | (0.22) | (0.08) | (0.13) | (0.48) | (0.61) | $9.67 | (0.67)% | 1.34% | 1.34% | 1.41% | 1.41% | 47% | $6,348 | ||||||||||||||||||||||||||||||||
2022 | $11.81 | 0.14 | 1.10 | 1.24 | (0.14) | (2.55) | (2.69) | $10.36 | 11.24% | 1.33% | 1.33% | 1.09% | 1.09% | 42% | $5,286 | ||||||||||||||||||||||||||||||||
2021 | $8.24 | 0.14 | 3.62 | 3.76 | (0.13) | (0.06) | (0.19) | $11.81 | 46.00% | 1.33% | 1.33% | 1.40% | 1.40% | 112% | $4,006 | ||||||||||||||||||||||||||||||||
2020 | $9.86 | 0.13 | (1.53) | (1.40) | (0.13) | (0.09) | (0.22) | $8.24 | (14.71)% | 1.34% | 1.34% | 1.22% | 1.22% | 72% | $2,762 |
For a Share Outstanding Throughout the Years Ended March 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) | |||||||||||||||||||||||||||||||||
R5 Class | |||||||||||||||||||||||||||||||||||||||||||||||
2024 | $9.68 | 0.21 | 1.06 | 1.27 | (0.22) | (0.17) | (0.39) | $10.56 | 13.41% | 0.64% | 0.64% | 2.20% | 2.20% | 45% | $9 | ||||||||||||||||||||||||||||||||
2023 | $10.36 | 0.21 | (0.21) | — | (0.20) | (0.48) | (0.68) | $9.68 | 0.13% | 0.64% | 0.64% | 2.11% | 2.11% | 47% | $8 | ||||||||||||||||||||||||||||||||
2022 | $11.81 | 0.22 | 1.10 | 1.32 | (0.22) | (2.55) | (2.77) | $10.36 | 12.01% | 0.63% | 0.63% | 1.79% | 1.79% | 42% | $8 | ||||||||||||||||||||||||||||||||
2021 | $8.24 | 0.21 | 3.63 | 3.84 | (0.21) | (0.06) | (0.27) | $11.81 | 47.06% | 0.63% | 0.63% | 2.10% | 2.10% | 112% | $7 | ||||||||||||||||||||||||||||||||
2020 | $9.86 | 0.20 | (1.53) | (1.33) | (0.20) | (0.09) | (0.29) | $8.24 | (14.13)% | 0.64% | 0.64% | 1.92% | 1.92% | 72% | $5 | ||||||||||||||||||||||||||||||||
R6 Class | |||||||||||||||||||||||||||||||||||||||||||||||
2024 | $9.67 | 0.23 | 1.05 | 1.28 | (0.23) | (0.17) | (0.40) | $10.55 | 13.60% | 0.49% | 0.49% | 2.35% | 2.35% | 45% | $64,685 | ||||||||||||||||||||||||||||||||
2023 | $10.35 | 0.22 | (0.20) | 0.02 | (0.22) | (0.48) | (0.70) | $9.67 | 0.27% | 0.49% | 0.49% | 2.26% | 2.26% | 47% | $147,303 | ||||||||||||||||||||||||||||||||
2022 | $11.81 | 0.24 | 1.09 | 1.33 | (0.24) | (2.55) | (2.79) | $10.35 | 12.10% | 0.48% | 0.48% | 1.94% | 1.94% | 42% | $171,044 | ||||||||||||||||||||||||||||||||
2021 | $8.24 | 0.23 | 3.62 | 3.85 | (0.22) | (0.06) | (0.28) | $11.81 | 47.29% | 0.48% | 0.48% | 2.25% | 2.25% | 112% | $195,898 | ||||||||||||||||||||||||||||||||
2020 | $9.86 | 0.21 | (1.52) | (1.31) | (0.22) | (0.09) | (0.31) | $8.24 | (14.01)% | 0.49% | 0.49% | 2.07% | 2.07% | 72% | $119,911 | ||||||||||||||||||||||||||||||||
G Class | |||||||||||||||||||||||||||||||||||||||||||||||
2024 | $9.68 | 0.28 | 1.05 | 1.33 | (0.28) | (0.17) | (0.45) | $10.56 | 14.13% | 0.01% | 0.49% | 2.83% | 2.35% | 45% | $2,752,857 | ||||||||||||||||||||||||||||||||
2023 | $10.36 | 0.27 | (0.21) | 0.06 | (0.26) | (0.48) | (0.74) | $9.68 | 0.75% | 0.01% | 0.49% | 2.74% | 2.26% | 47% | $2,349,375 | ||||||||||||||||||||||||||||||||
2022(3) | $10.59 | 0.01 | 0.34 | 0.35 | (0.03) | (0.55) | (0.58) | $10.36 | 3.38% | 0.00% | 0.47% | 1.68% | 1.21% | 42%(4) | $2,751,213 |
Notes to Financial Highlights |
(1)Computed using average shares outstanding throughout the period.
(2)Total returns are calculated based on the net asset value of the last business day and do not reflect applicable sales charges, if any. Total returns for periods less than one year are not annualized.
(3)March 15, 2022 (commencement of sale) through March 31, 2022.
(4)Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended March 31, 2022.
*The amount shown for a share outstanding throughout the period may not correlate with the Statement(s) of Operations or precisely reflect the class expense differentials due to the timing of transactions in shares of a fund in relation to income earned and/or fluctuations in the fair value of a fund's investments.
† Ratios for periods less than one year are annualized. Zero balances may reflect amounts less than 0.005%.
See Notes to Financial Statements.
Report of Independent Registered Public Accounting Firm |
To the shareholders of the Focused Large Cap Value Fund and the Board of Directors of American Century Capital Portfolios, Inc.
Opinion on the Financial Statements and Financial Highlights
We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of Focused Large Cap Value Fund (the “Fund”), one of the funds constituting the American Century Capital Portfolios, Inc., as of March 31, 2024, the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Fund as of March 31, 2024, and the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on the Fund’s financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. Our procedures included confirmation of securities owned as of March 31, 2024, by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
/s/ Deloitte & Touche LLP
Kansas City, Missouri
May 16, 2024
We have served as the auditor of one or more American Century investment companies since 1997.
26
Management |
The Board of Directors
The individuals listed below serve as directors of the funds. Each director will continue to serve in this capacity until death, retirement, resignation or removal from office. The board has adopted a mandatory retirement age for directors who are not “interested persons,” as that term is defined in the Investment Company Act (independent directors). Independent directors shall retire on December 31 of the year in which they reach their 75th birthday.
Jonathan S. Thomas is an “interested person” because he currently serves as President and Chief Executive Officer of American Century Companies, Inc. (ACC), the parent company of American Century Investment Management, Inc. (ACIM or the advisor). The other directors (more than three-fourths of the total number) are independent. They are not employees, directors or officers of, and have no financial interest in, ACC or any of its wholly owned, direct or indirect, subsidiaries, including ACIM, American Century Investment Services, Inc. (ACIS) and American Century Services, LLC (ACS), and they do not have any other affiliations, positions or relationships that would cause them to be considered “interested persons” under the Investment Company Act. The directors serve in this capacity for seven (in the case of Jonathan S. Thomas, 16; and Thomas W. Bunn, 8) registered investment companies in the American Century Investments family of funds.
The following table presents additional information about the directors. The mailing address for each director is 4500 Main Street, Kansas City, Missouri 64111.
Name (Year of Birth) | Position(s) Held with Funds | Length of Time Served | Principal Occupation(s) During Past 5 Years | Number of American Century Portfolios Overseen by Director | Other Directorships Held During Past 5 Years | ||||||||||||
Independent Directors | |||||||||||||||||
Brian Bulatao (1964) | Director | Since 2022 | Chief Administrative Officer, Activision Blizzard, Inc. (2021 to present); Under Secretary of State for Management, U.S. Department of State (2018 to 2021) | 64 | None | ||||||||||||
Thomas W. Bunn (1953) | Director | Since 2017 | Retired | 119 | None | ||||||||||||
Chris H. Cheesman (1962) | Director | Since 2019 | Retired | 64 | Alleghany Corporation (2021 to 2022) | ||||||||||||
Barry Fink (1955) | Director | Since 2012 (independent since 2016) | Retired | 64 | None | ||||||||||||
Rajesh K. Gupta (1960) | Director | Since 2019 | Partner Emeritus, SeaCrest Investment Management and SeaCrest Wealth Management (2019 to present) | 64 | None |
27
Name (Year of Birth) | Position(s) Held with Funds | Length of Time Served | Principal Occupation(s) During Past 5 Years | Number of American Century Portfolios Overseen by Director | Other Directorships Held During Past 5 Years | ||||||||||||
Independent Directors | |||||||||||||||||
Lynn M. Jenkins (1963) | Director | Since 2019 | Senior Policy Advisor, Capital Hill Policy Group (2020 to present); Consultant, LJ Strategies (2019 to 2023) | 64 | MGP Ingredients, Inc. (2019 to 2021) | ||||||||||||
Jan M. Lewis (1957) | Director and Board Chair | Since 2011 (Board Chair since 2022) | Retired | 64 | None | ||||||||||||
Gary C. Meltzer (1963) | Director | Since 2022 | Advisor, Pontoro (2021 to present); Executive Advisor, Consultant and Investor, Harris Ariel Advisory LLC (2020 to present); Managing Partner, PricewaterhouseCoopers LLP (1985 to 2020) | 64 | ExcelFin Acquisition Corp., Apollo Realty Income Solutions, Inc. | ||||||||||||
Interested Director | |||||||||||||||||
Jonathan S. Thomas (1963) | Director | Since 2007 | President and Chief Executive Officer, ACC (2007 to present). Also serves as Chief Executive Officer, ACS; Director, ACC and other ACC subsidiaries | 150 | None |
The Statement of Additional Information has additional information about the fund's directors and is available without charge, upon request, by calling 1-800-345-2021.
28
Officers
The following table presents certain information about the executive officers of the funds. Each officer serves as an officer for 16 investment companies in the American Century family of funds. No officer is compensated for his or her service as an officer of the funds. The listed officers are interested persons of the funds and are appointed or re-appointed on an annual basis. The mailing address for each officer listed below is 4500 Main Street, Kansas City, Missouri 64111.
Name (Year of Birth) | Offices with the Funds | Principal Occupation(s) During the Past Five Years | ||||||
Patrick Bannigan (1965) | President since 2019 | Executive Vice President and Director, ACC (2012 to present); Chief Financial Officer, Chief Accounting Officer and Treasurer, ACC (2015 to present); Also serves as President, ACS; Vice President, ACIM; Chief Financial Officer, Chief Accounting Officer and/or Director, ACIM, ACS and other ACC subsidiaries | ||||||
R. Wes Campbell (1974) | Chief Financial Officer and Treasurer since 2018; Vice President since 2023 | Vice President, ACS (2020 to present); Investment Operations and Investment Accounting, ACS (2000 to present) | ||||||
Amy D. Shelton (1964) | Chief Compliance Officer and Vice President since 2014 | Chief Compliance Officer, American Century funds, (2014 to present); Chief Compliance Officer, ACIM (2014 to present); Chief Compliance Officer, ACIS (2009 to present). Also serves as Vice President, ACIS | ||||||
John Pak (1968) | General Counsel and Senior Vice President since 2021 | General Counsel and Senior Vice President, ACC (2021 to present); Also serves as General Counsel and Senior Vice President, ACIM, ACS and ACIS. Chief Legal Officer of Investment and Wealth Management, The Bank of New York Mellon (2014 to 2021) | ||||||
Cihan Kasikara (1974) | Vice President since 2023 | Senior Vice President, ACS (2022 to present); Treasurer, ACS (2023 to present); Vice President, ACS (2020 to 2022); Vice President, Franklin Templeton (2015 to 2020) | ||||||
Kathleen Gunja Nelson (1976) | Vice President since 2023 | Vice President, ACS (2017 to present) | ||||||
Ward D. Stauffer (1960) | Secretary since 2005 | Attorney, ACC (2003 to present) |
29
Liquidity Risk Management Program |
The Fund has adopted a liquidity risk management program (the “program”). The Fund’s Board of Directors (the "Board") has designated American Century Investment Management, Inc. (“ACIM”) as the administrator of the program. Personnel of ACIM or its affiliates, including members of ACIM’s Investment Oversight Committee who are members of ACIM’s Investment Management and Global Analytics departments, conduct the day-to-day operation of the program pursuant to the program.
Under the program, ACIM manages the Fund’s liquidity risk, which is the risk that the Fund could not meet shareholder redemption requests without significant dilution of remaining shareholders’ interests in the Fund. This risk is managed by monitoring the degree of liquidity of the Fund’s investments, limiting the amount of the Fund’s illiquid investments, and utilizing various risk management tools and facilities available to the Fund for meeting shareholder redemptions, among other means. ACIM’s process of determining the degree of liquidity of certain investments held by the Fund is supported by a third-party liquidity assessment vendor.
The Board reviewed a report prepared by ACIM regarding the operation and effectiveness of the program for the period January 1, 2023 through December 31, 2023. No significant liquidity events impacting the Fund were noted in the report. In addition, ACIM provided its assessment that the program had been effective in managing the Fund’s liquidity risk.
30
Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain retirement accounts are subject to federal income tax withholding at the IRS default rate of 10%.* 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.
You may elect a different withholding rate, or request zero withholding, by submitting an acceptable IRS Form W-4R election with your distribution request. You may notify us of your W-4R election by telephone, on our distribution forms, on IRS Form W-4R, or through other acceptable electronic means. If your withholding election is for an automatic withdrawal plan, you have the right to revoke your election at any time and any election you make will remain in effect until revoked by filing a new election.
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 according to state regulations if, at the time of your distribution, your tax residency is within one of the mandatory withholding states.
*Some 403(b), 457 and qualified retirement plan distributions may be subject to 20% mandatory withholding, as they are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
A description of the policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund is available without charge, upon request, by calling 1-800-345-2021. It is also available on American Century Investments’ website at americancentury.com/proxy and on the Securities and Exchange Commission’s website at sec.gov. Information regarding how the investment advisor voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on americancentury.com/proxy. It is also available at sec.gov.
Quarterly Portfolio Disclosure
The fund files its complete schedule of portfolio holdings with the Securities and Exchange
Commission (SEC) for the first and third quarters of each fiscal year as an exhibit to its reports on
Form N-PORT. These portfolio holdings are available on the fund's website at
americancentury.com and, upon request, by calling 1-800-345-2021. The fund’s Form N-PORT
reports are available on the SEC’s website at sec.gov.
31
Other Tax Information
The following information is provided pursuant to provisions of the Internal Revenue Code.
The fund hereby designates up to the maximum amount allowable as qualified dividend income for the fiscal year ended March 31, 2024.
For corporate taxpayers, the fund hereby designates $63,563,388, or up to the maximum amount allowable, of ordinary income distributions paid during the fiscal year ended March 31, 2024 as qualified for the corporate dividends received deduction.
The fund hereby designates $17,601,538 as qualified short-term capital gain distributions for purposes of Internal Revenue Code Section 871 for the fiscal year ended March 31, 2024.
The fund hereby designates $37,171,547, or up to the maximum amount allowable, as long-term capital gain distributions (20% rate gain distributions) for the fiscal year ended March 31, 2024.
32
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Contact Us | americancentury.com | |||||||
Automated Information Line | 1-800-345-8765 | |||||||
Investor Services Representative | 1-800-345-2021 or 816-531-5575 | |||||||
Investors Using Advisors | 1-800-378-9878 | |||||||
Business, Not-For-Profit, Employer-Sponsored Retirement Plans | 1-800-345-3533 | |||||||
Banks and Trust Companies, Broker-Dealers, Financial Professionals, Insurance Companies | 1-800-345-6488 | |||||||
Telecommunications Relay Service for the Deaf | 711 | |||||||
American Century 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. | ||||||||
©2024 American Century Proprietary Holdings, Inc. All rights reserved. CL-ANN-92269 2405 |
![image22.jpg](https://capedge.com/proxy/N-CSR/0000908186-24-000015/image22.jpg)
Annual Report | |||||
March 31, 2024 | |||||
Mid Cap Value Fund | |||||
Investor Class (ACMVX) | |||||
I Class (AVUAX) | |||||
Y Class (AMVYX) | |||||
A Class (ACLAX) | |||||
C Class (ACCLX) | |||||
R Class (AMVRX) | |||||
R5 Class (AMVGX) | |||||
R6 Class (AMDVX) | |||||
G Class (ACIPX) |
The Securities and Exchange Commission (SEC) adopted new rules that will require annual and semiannual reports to transition to a new format known as a Tailored Shareholder Report beginning in July 2024. The amendments will require the transmission of a concise report highlighting key fund information to investors. The detailed financial statements will remain available on our website, will be delivered to investors free of charge upon request, and will continue to be filed with the SEC.
Table of Contents |
President’s Letter | |||||
Performance | |||||
Portfolio Commentary | |||||
Fund Characteristics | |||||
Shareholder Fee Example | |||||
Schedule of Investments | |||||
Statement of Assets and Liabilities | |||||
Statement of Operations | |||||
Statement of Changes in Net Assets | |||||
Notes to Financial Statements | |||||
Financial Highlights | |||||
Report of Independent Registered Public Accounting Firm | |||||
Management | |||||
Liquidity Risk Management Program | |||||
Additional Information |
Any opinions expressed in this report reflect those of the author as of the date of the report, and do not necessarily represent the opinions of American Century Investments® or any other person in the American Century Investments organization. Any such opinions are subject to change at any time based upon market or other conditions and American Century Investments disclaims any responsibility to update such opinions. These opinions may not be relied upon as investment advice and, because investment decisions made by American Century Investments funds are based on numerous factors, may not be relied upon as an indication of trading intent on behalf of any American Century Investments fund. Security examples are used for representational purposes only and are not intended as recommendations to purchase or sell securities. Performance information for comparative indices and securities is provided to American Century Investments by third party vendors. To the best of American Century Investments’ knowledge, such information is accurate at the time of printing.
President’s Letter |
![image23.jpg](https://capedge.com/proxy/N-CSR/0000908186-24-000015/image23.jpg)
Dear Investor:
Thank you for reviewing this annual report for the period ending March 31, 2024. Annual reports help convey important information about fund returns, including market factors that affected performance. For additional investment insights, please visit americancentury.com.
Stocks Surged While Bonds Delivered Modest Gains
Soaring U.S. Treasury yields weighed on bond returns for the first six months of the reporting period. Meanwhile, inflation slowed but remained well above the Federal Reserve’s (Fed’s) target, lending conditions tightened, and recession risk rose. This fueled expectations for a shift in Fed policy, which, along with better-than-expected earnings, helped U.S. stocks deliver modest gains.
The Fed lifted rates in May, paused in June and hiked again in July to a range of 5.25% to 5.5%, a 22-year high. The Fed left rates unchanged in September but warned that persistent above-target inflation may require more tightening. This news pushed Treasury yields to multiyear highs in October and sent stocks tumbling. By November, inflation showed signs of moderating, and the Fed held rates steady again, reviving investor enthusiasm. Then, in December, Fed policymakers expressed more confidence about the inflation outlook and forecasted three rate cuts for 2024. Against this backdrop, recession fears eased, Treasury yields declined, and stocks and bonds ended 2023 on a strong note.
Despite the Fed’s continued pause, yields reversed course again in early 2024 amid a steady stream of better-than-expected economic data and persistent inflation. But the bond market’s late-2023 rally helped the Bloomberg U.S. Aggregate Bond Index maintain a gain of 1.70% for the 12-month period. Most stock indices continued to rally into 2024, buoyed by solid corporate earnings and expectations for Fed rate cuts. The S&P 500 Index returned 29.88% for the 12-month period, and growth stocks generally outperformed value stocks.
Remaining Diligent in Uncertain Times
We expect market volatility to linger as investors navigate a complex environment of persistent inflation, still-tight financial conditions, political uncertainty and slowing growth. In addition, the Israel-Hamas war and other tensions in the Middle East complicate the global backdrop and represent additional considerations for our investment teams.
Our firm has a long history of helping clients weather unpredictable and volatile markets, and we’re determined to meet today’s challenges. Thank you for your trust and confidence in American Century Investments.
With appreciation and respect,
![image48a16a.jpg](https://capedge.com/proxy/N-CSR/0000908186-24-000015/image48a16a.jpg)
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
2
Performance |
Total Returns as of March 31, 2024 | ||||||||||||||||||||
Average Annual Returns | ||||||||||||||||||||
Ticker Symbol | 1 year | 5 years | 10 years | Since Inception | Inception Date | |||||||||||||||
Investor Class | ACMVX | 9.79% | 9.30% | 8.78% | — | 3/31/04 | ||||||||||||||
Russell Midcap Value Index | — | 20.40% | 9.94% | 8.57% | — | — | ||||||||||||||
I Class | AVUAX | 10.00% | 9.51% | 9.00% | — | 8/2/04 | ||||||||||||||
Y Class | AMVYX | 10.16% | 9.68% | — | 7.92% | 4/10/17 | ||||||||||||||
A Class | ACLAX | 1/13/05 | ||||||||||||||||||
No sales charge | 9.55% | 9.02% | 8.51% | — | ||||||||||||||||
With sales charge | 3.25% | 7.74% | 7.87% | — | ||||||||||||||||
C Class | ACCLX | 8.75% | 8.22% | 7.70% | — | 3/1/10 | ||||||||||||||
R Class | AMVRX | 9.24% | 8.74% | 8.24% | — | 7/29/05 | ||||||||||||||
R5 Class | AMVGX | 10.06% | 9.52% | — | 7.76% | 4/10/17 | ||||||||||||||
R6 Class | AMDVX | 10.24% | 9.69% | 9.17% | — | 7/26/13 | ||||||||||||||
G Class | ACIPX | 10.84% | — | — | 6.11% | 3/15/22 |
Average annual returns since inception are presented when ten years of performance history is not available.
Fund returns would have been lower if a portion of the fees had not been waived.
C Class shares will automatically convert to A Class shares after being held for approximately eight years. C Class average annual returns do not reflect this conversion.
Sales charges include initial sales charges and contingent deferred sales charges (CDSCs), as applicable. A Class shares have a 5.75% maximum initial sales charge and may be subject to a maximum CDSC of 1.00%. C Class shares redeemed within 12 months of purchase are subject to a maximum CDSC of 1.00%. The SEC requires that mutual funds provide performance information net of maximum sales charges in all cases where charges could be applied.
Data presented reflect past performance. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance shown. Total returns for periods less than one year are not annualized. Investment return and principal value will fluctuate, and redemption value may be more or less than original cost. Data assumes reinvestment of dividends and capital gains, and none of the charts reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. To obtain performance data current to the most recent month end, please call 1-800-345-2021 or visit americancentury.com. For additional information about the fund, please consult the prospectus.
3
Growth of $10,000 Over 10 Years | ||
$10,000 investment made March 31, 2014 | ||
Performance for other share classes will vary due to differences in fee structure. |
![chart-659ffe5a782640368b8a.jpg](https://capedge.com/proxy/N-CSR/0000908186-24-000015/chart-659ffe5a782640368b8a.jpg)
Value on March 31, 2024 | |||||
Investor Class — $23,199 | |||||
Russell Midcap Value Index — $22,753 | |||||
Ending value of Investor Class would have been lower if a portion of the fees had not been waived.
Total Annual Fund Operating Expenses | ||||||||||||||||||||||||||
Investor Class | I Class | Y Class | A Class | C Class | R Class | R5 Class | R6 Class | G Class | ||||||||||||||||||
0.98% | 0.78% | 0.63% | 1.23% | 1.98% | 1.48% | 0.78% | 0.63% | 0.63% |
The total annual fund operating expenses shown is as stated in the fund’s prospectus current as of the date of this report. The prospectus may vary from the expense ratio shown elsewhere in this report because it is based on a different time period, includes acquired fund fees and expenses, and, if applicable, does not include fee waivers or expense reimbursements.
Data presented reflect past performance. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance shown. Total returns for periods less than one year are not annualized. Investment return and principal value will fluctuate, and redemption value may be more or less than original cost. Data assumes reinvestment of dividends and capital gains, and none of the charts reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. To obtain performance data current to the most recent month end, please call 1-800-345-2021 or visit americancentury.com. For additional information about the fund, please consult the prospectus.
4
Portfolio Commentary |
Portfolio Managers: Kevin Toney, Brian Woglom, Michael Liss and Nathan Rawlins
Performance Summary
Mid Cap Value returned 9.79%* for the fiscal year ended March 31, 2024, compared with the 20.40% return of its benchmark, the Russell Midcap Value Index. The fund’s return reflects operating expenses, while the index’s return does not.
Mid Cap Value advanced in the fiscal year but underperformed its benchmark, the Russell Midcap Value Index. Security selection and allocation in the consumer staples and consumer discretionary sectors detracted from relative performance. Meanwhile, our underweight allocations to the information technology and materials sectors were slightly additive to relative returns.
Consumer Staples and Consumer Discretionary Detracted
Security selection and an overweight in the consumer staples sector negatively impacted performance. Selection and an overweight in the food products industry detracted, with Conagra Brands underperforming. Shares of this packaged-food producer were pressured as investors shifted toward less defensive sectors during the period. Selection and an overweight in the consumer staples distribution and retail industry also hindered performance, with Koninklijke Ahold Delhaize trailing. This grocery company reported slightly weaker-than-expected quarterly earnings and reduced its full-year earnings guidance accordingly.
Security selection and an underweight in the consumer discretionary sector limited relative results. An underweight in the specialty retail industry, along with a position in Advance Auto Parts, detracted. Shares of this automotive replacement parts retailer underperformed due to a quarterly earnings miss and guidance reduction. We exited the position because we no longer favored its risk/reward profile. Our position in BorgWarner weighed on returns as the automotive supplier’s shares were pressured by concerns about electric vehicle product demand.
Underweights in Information Technology and Materials Contributed
An underweight in the information technology sector, the semiconductors and semiconductor equipment industry, in particular, supported relative performance. A lack of exposure to select benchmark holdings also had a positive impact.
In materials, an underweight to the sector, namely an underweight to chemicals and no exposure to metals and mining, benefited returns.
The Allstate Corp. contributed. This insurance company recently improved its profitability after implementing policy increases, particularly for its automobile insurance policies. Allstate also benefited from a more benign natural catastrophe environment.
Oshkosh contributed. This is a manufacturer of specialty vehicles for construction, defense and municipal end markets. Oshkosh’s shares outperformed, driven by strong financial results, easing supply chain constraints and strong shorter-cycle orders.
*All fund returns referenced in this commentary are for Investor Class shares. Performance for other share classes will vary due to differences in fee structure; when Investor Class performance exceeds that of the fund’s benchmark, other share classes may not. See page 3 for returns for all share classes.
5
Fund Characteristics |
MARCH 31, 2024 | |||||
Types of Investments in Portfolio | % of net assets | ||||
Common Stocks | 99.1% | ||||
Short-Term Investments | 0.9% | ||||
Other Assets and Liabilities | 0.0% | ||||
Top Five Industries | % of net assets | ||||
Health Care Providers and Services | 8.7% | ||||
Health Care Equipment and Supplies | 6.5% | ||||
Capital Markets | 6.4% | ||||
Electric Utilities | 6.3% | ||||
Insurance | 6.1% |
6
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 October 1, 2023 to March 31, 2024.
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 mutual fund, or I Class shares of the American Century Diversified Bond Fund, in an American Century Investments account (i.e., not through a financial intermediary or employer-sponsored retirement plan account), American Century Investments may charge you a $25 annual account maintenance fee if the value of those shares is less than $10,000. We will redeem shares automatically in one of your accounts to pay the $25 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.
7
Beginning Account Value 10/1/23 | Ending Account Value 3/31/24 | Expenses Paid During Period(1) 10/1/23 - 3/31/24 | Annualized Expense Ratio(1) | |||||||||||
Actual | ||||||||||||||
Investor Class | $1,000 | $1,156.50 | $5.23 | 0.97% | ||||||||||
I Class | $1,000 | $1,158.20 | $4.15 | 0.77% | ||||||||||
Y Class | $1,000 | $1,159.00 | $3.35 | 0.62% | ||||||||||
A Class | $1,000 | $1,155.60 | $6.57 | 1.22% | ||||||||||
C Class | $1,000 | $1,151.90 | $10.60 | 1.97% | ||||||||||
R Class | $1,000 | $1,154.10 | $7.92 | 1.47% | ||||||||||
R5 Class | $1,000 | $1,158.10 | $4.15 | 0.77% | ||||||||||
R6 Class | $1,000 | $1,159.10 | $3.35 | 0.62% | ||||||||||
G Class | $1,000 | $1,162.60 | $0.00 | 0.00%(2) | ||||||||||
Hypothetical | ||||||||||||||
Investor Class | $1,000 | $1,020.15 | $4.90 | 0.97% | ||||||||||
I Class | $1,000 | $1,021.15 | $3.89 | 0.77% | ||||||||||
Y Class | $1,000 | $1,021.90 | $3.13 | 0.62% | ||||||||||
A Class | $1,000 | $1,018.90 | $6.16 | 1.22% | ||||||||||
C Class | $1,000 | $1,015.15 | $9.92 | 1.97% | ||||||||||
R Class | $1,000 | $1,017.65 | $7.41 | 1.47% | ||||||||||
R5 Class | $1,000 | $1,021.15 | $3.89 | 0.77% | ||||||||||
R6 Class | $1,000 | $1,021.90 | $3.13 | 0.62% | ||||||||||
G Class | $1,000 | $1,025.00 | $0.00 | 0.00%(2) |
(1)Expenses are equal to the class's annualized expense ratio listed in the table above, multiplied by the average account value over the period, multiplied by 183, the number of days in the most recent fiscal half-year, divided by 366, to reflect the one-half year period. Annualized expense ratio reflects actual expenses, including any applicable fee waivers or expense reimbursements and excluding any acquired fund fees and expenses.
(2)Other expenses did not exceed 0.005%.
8
Schedule of Investments |
MARCH 31, 2024
Shares | Value | |||||||
COMMON STOCKS — 99.1% | ||||||||
Aerospace and Defense — 1.1% | ||||||||
General Dynamics Corp. | 125,793 | $ | 35,535,265 | |||||
Huntington Ingalls Industries, Inc. | 206,381 | 60,153,870 | ||||||
95,689,135 | ||||||||
Automobile Components — 1.9% | ||||||||
Aptiv PLC(1) | 846,053 | 67,388,121 | ||||||
BorgWarner, Inc. | 2,191,151 | 76,120,586 | ||||||
Cie Generale des Etablissements Michelin SCA | 813,030 | 31,158,037 | ||||||
174,666,744 | ||||||||
Banks — 4.4% | ||||||||
Commerce Bancshares, Inc. | 1,488,708 | 79,199,266 | ||||||
First Hawaiian, Inc. | 2,043,428 | 44,873,679 | ||||||
PNC Financial Services Group, Inc. | 299,305 | 48,367,688 | ||||||
Truist Financial Corp. | 3,401,250 | 132,580,725 | ||||||
U.S. Bancorp | 891,045 | 39,829,711 | ||||||
Westamerica BanCorp | 929,430 | 45,430,538 | ||||||
390,281,607 | ||||||||
Beverages — 1.3% | ||||||||
Heineken NV | 715,513 | 68,980,878 | ||||||
Pernod Ricard SA | 282,577 | 45,744,705 | ||||||
114,725,583 | ||||||||
Building Products — 1.5% | ||||||||
Cie de Saint-Gobain SA | 868,315 | 67,393,141 | ||||||
Johnson Controls International PLC | 1,071,748 | 70,006,580 | ||||||
137,399,721 | ||||||||
Capital Markets — 6.4% | ||||||||
AllianceBernstein Holding LP | 751,814 | 26,118,018 | ||||||
Ameriprise Financial, Inc. | 110,595 | 48,489,272 | ||||||
Bank of New York Mellon Corp. | 3,304,039 | 190,378,727 | ||||||
Northern Trust Corp. | 2,181,868 | 194,011,703 | ||||||
T Rowe Price Group, Inc. | 911,020 | 111,071,558 | ||||||
570,069,278 | ||||||||
Chemicals — 1.1% | ||||||||
Akzo Nobel NV | 1,318,526 | 98,516,909 | ||||||
Commercial Services and Supplies — 0.6% | ||||||||
Republic Services, Inc. | 274,100 | 52,473,704 | ||||||
Communications Equipment — 2.0% | ||||||||
F5, Inc.(1) | 588,977 | 111,664,149 | ||||||
Juniper Networks, Inc. | 1,761,148 | 65,268,145 | ||||||
176,932,294 | ||||||||
Construction and Engineering — 1.2% | ||||||||
Vinci SA | 818,069 | 104,981,627 | ||||||
Consumer Staples Distribution & Retail — 3.3% | ||||||||
Dollar Tree, Inc.(1) | 950,492 | 126,558,010 | ||||||
Koninklijke Ahold Delhaize NV | 5,594,520 | 167,397,985 | ||||||
293,955,995 |
9
Shares | Value | |||||||
Containers and Packaging — 2.6% | ||||||||
Amcor PLC | 6,679,162 | $ | 63,518,831 | |||||
Packaging Corp. of America | 537,779 | 102,059,698 | ||||||
Sonoco Products Co. | 1,234,827 | 71,422,394 | ||||||
237,000,923 | ||||||||
Diversified Telecommunication Services — 0.7% | ||||||||
BCE, Inc. | 1,929,983 | 65,584,229 | ||||||
Electric Utilities — 6.3% | ||||||||
Duke Energy Corp. | 1,434,947 | 138,773,724 | ||||||
Edison International | 2,057,520 | 145,528,390 | ||||||
Evergy, Inc. | 1,845,640 | 98,520,263 | ||||||
Eversource Energy | 1,563,355 | 93,441,728 | ||||||
Pinnacle West Capital Corp. | 1,163,490 | 86,947,608 | ||||||
563,211,713 | ||||||||
Electrical Equipment — 1.8% | ||||||||
Atkore, Inc. | 135,013 | 25,701,075 | ||||||
Emerson Electric Co. | 1,179,812 | 133,814,277 | ||||||
159,515,352 | ||||||||
Electronic Equipment, Instruments and Components — 0.9% | ||||||||
TE Connectivity Ltd. | 587,156 | 85,278,537 | ||||||
Energy Equipment and Services — 1.1% | ||||||||
Baker Hughes Co. | 2,884,700 | 96,637,450 | ||||||
Entertainment — 0.3% | ||||||||
Electronic Arts, Inc. | 235,384 | 31,228,395 | ||||||
Food Products — 3.6% | ||||||||
Conagra Brands, Inc. | 7,286,845 | 215,982,086 | ||||||
General Mills, Inc. | 1,531,403 | 107,152,268 | ||||||
323,134,354 | ||||||||
Gas Utilities — 1.8% | ||||||||
ONE Gas, Inc. | 890,262 | 57,448,607 | ||||||
Spire, Inc. | 1,670,003 | 102,488,084 | ||||||
159,936,691 | ||||||||
Ground Transportation — 1.9% | ||||||||
Heartland Express, Inc. | 2,481,365 | 29,627,498 | ||||||
Norfolk Southern Corp. | 565,185 | 144,048,701 | ||||||
173,676,199 | ||||||||
Health Care Equipment and Supplies — 6.5% | ||||||||
Becton Dickinson & Co. | 271,524 | 67,188,614 | ||||||
Dentsply Sirona, Inc. | 1,610,476 | 53,451,698 | ||||||
Envista Holdings Corp.(1) | 2,588,607 | 55,344,418 | ||||||
GE HealthCare Technologies, Inc. | 608,414 | 55,310,917 | ||||||
Hologic, Inc.(1) | 1,030,244 | 80,317,822 | ||||||
Zimmer Biomet Holdings, Inc. | 2,075,156 | 273,879,089 | ||||||
585,492,558 | ||||||||
Health Care Providers and Services — 8.7% | ||||||||
Cardinal Health, Inc. | 887,598 | 99,322,216 | ||||||
Cencora, Inc. | 143,031 | 34,755,103 | ||||||
Centene Corp.(1) | 814,548 | 63,925,727 | ||||||
Henry Schein, Inc.(1) | 2,358,513 | 178,114,902 | ||||||
Laboratory Corp. of America Holdings | 415,991 | 90,877,394 | ||||||
Quest Diagnostics, Inc. | 1,329,277 | 176,940,061 | ||||||
Universal Health Services, Inc., Class B | 730,799 | 133,341,586 | ||||||
777,276,989 |
10
Shares | Value | |||||||
Health Care REITs — 1.2% | ||||||||
Healthpeak Properties, Inc. | 5,640,887 | $ | 105,766,631 | |||||
Hotels, Restaurants and Leisure — 0.9% | ||||||||
Darden Restaurants, Inc. | 292,639 | 48,914,609 | ||||||
Sodexo SA | 363,435 | 31,154,825 | ||||||
80,069,434 | ||||||||
Household Durables — 0.6% | ||||||||
Mohawk Industries, Inc.(1) | 447,844 | 58,618,301 | ||||||
Household Products — 2.8% | ||||||||
Henkel AG & Co. KGaA, Preference Shares | 911,469 | 73,260,237 | ||||||
Kimberly-Clark Corp. | 1,382,082 | 178,772,307 | ||||||
252,032,544 | ||||||||
Insurance — 6.1% | ||||||||
Aflac, Inc. | 660,480 | 56,708,813 | ||||||
Allstate Corp. | 898,106 | 155,381,319 | ||||||
Hanover Insurance Group, Inc. | 539,908 | 73,519,272 | ||||||
Reinsurance Group of America, Inc. | 652,966 | 125,944,082 | ||||||
Willis Towers Watson PLC | 504,714 | 138,796,350 | ||||||
550,349,836 | ||||||||
IT Services — 1.6% | ||||||||
Amdocs Ltd. | 1,171,679 | 105,884,631 | ||||||
Cognizant Technology Solutions Corp., Class A | 566,342 | 41,507,205 | ||||||
147,391,836 | ||||||||
Machinery — 2.2% | ||||||||
Cummins, Inc. | 153,334 | 45,179,863 | ||||||
Dover Corp. | 149,975 | 26,574,070 | ||||||
Oshkosh Corp. | 668,887 | 83,416,898 | ||||||
Timken Co. | 512,640 | 44,820,115 | ||||||
199,990,946 | ||||||||
Media — 2.1% | ||||||||
Fox Corp., Class B | 1,877,497 | 53,733,964 | ||||||
Interpublic Group of Cos., Inc. | 3,376,128 | 110,163,057 | ||||||
Omnicom Group, Inc. | 208,688 | 20,192,651 | ||||||
184,089,672 | ||||||||
Multi-Utilities — 3.5% | ||||||||
CMS Energy Corp. | 1,387,593 | 83,727,361 | ||||||
Northwestern Energy Group, Inc. | 2,796,632 | 142,432,468 | ||||||
WEC Energy Group, Inc. | 1,017,024 | 83,518,011 | ||||||
309,677,840 | ||||||||
Oil, Gas and Consumable Fuels — 4.6% | ||||||||
Coterra Energy, Inc. | 1,669,714 | 46,551,626 | ||||||
Enterprise Products Partners LP | 6,257,341 | 182,589,211 | ||||||
EQT Corp. | 1,966,811 | 72,909,684 | ||||||
Occidental Petroleum Corp. | 1,681,886 | 109,305,771 | ||||||
411,356,292 | ||||||||
Passenger Airlines — 1.2% | ||||||||
Southwest Airlines Co. | 3,621,926 | 105,724,020 | ||||||
Personal Care Products — 1.1% | ||||||||
Kenvue, Inc. | 4,605,702 | 98,838,365 | ||||||
Residential REITs — 1.2% | ||||||||
Equity Residential | 1,029,856 | 64,994,212 | ||||||
Essex Property Trust, Inc. | 170,952 | 41,850,759 | ||||||
106,844,971 |
11
Shares | Value | |||||||
Retail REITs — 2.6% | ||||||||
Realty Income Corp. | 2,568,053 | $ | 138,931,667 | |||||
Regency Centers Corp. | 1,525,733 | 92,398,391 | ||||||
231,330,058 | ||||||||
Semiconductors and Semiconductor Equipment — 0.8% | ||||||||
Teradyne, Inc. | 624,784 | 70,494,379 | ||||||
Specialized REITs — 1.7% | ||||||||
Public Storage | 328,176 | 95,190,730 | ||||||
VICI Properties, Inc. | 1,833,858 | 54,630,630 | ||||||
149,821,360 | ||||||||
Technology Hardware, Storage and Peripherals — 1.1% | ||||||||
HP, Inc. | 3,146,675 | 95,092,519 | ||||||
Trading Companies and Distributors — 2.8% | ||||||||
Beacon Roofing Supply, Inc.(1) | 967,174 | 94,802,396 | ||||||
Bunzl PLC | 2,236,228 | 86,044,675 | ||||||
MSC Industrial Direct Co., Inc., Class A | 707,908 | 68,695,392 | ||||||
249,542,463 | ||||||||
TOTAL COMMON STOCKS (Cost $7,701,529,439) | 8,874,697,454 | |||||||
SHORT-TERM INVESTMENTS — 0.9% | ||||||||
Money Market Funds — 0.0% | ||||||||
State Street Institutional U.S. Government Money Market Fund, Premier Class | 206,559 | 206,559 | ||||||
Repurchase Agreements — 0.9% | ||||||||
BMO Capital Markets Corp., (collateralized by various U.S. Treasury obligations, 4.625%, 9/15/26, valued at $3,321,583), in a joint trading account at 5.28%, dated 3/28/24, due 4/1/24 (Delivery value $3,257,592) | 3,255,682 | |||||||
Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 2.50%, 3/31/27, valued at $60,568,700), at 5.30%, dated 3/28/24, due 4/1/24 (Delivery value $59,415,969) | 59,381,000 | |||||||
TD Securities (USA) LLC, (collateralized by various U.S. Treasury obligations, 0.50% - 3.00%, 7/15/25 - 4/30/27, valued at $13,422,159), at 5.30%, dated 3/28/24, due 4/1/24 (Delivery value $13,164,748) | 13,157,000 | |||||||
75,793,682 | ||||||||
TOTAL SHORT-TERM INVESTMENTS (Cost $76,000,241) | 76,000,241 | |||||||
TOTAL INVESTMENT SECURITIES — 100.0% (Cost $7,777,529,680) | 8,950,697,695 | |||||||
OTHER ASSETS AND LIABILITIES — 0.0% | 3,065,623 | |||||||
TOTAL NET ASSETS — 100.0% | $ | 8,953,763,318 |
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS | ||||||||||||||||||||
Currency Purchased | Currency Sold | Counterparty | Settlement Date | Unrealized Appreciation (Depreciation) | ||||||||||||||||
USD | 55,924,476 | CAD | 75,872,457 | Goldman Sachs & Co. | 6/28/24 | $ | (158,626) | |||||||||||||
USD | 190,768,951 | EUR | 175,436,180 | Bank of America N.A. | 6/28/24 | 836,483 | ||||||||||||||
USD | 14,263,026 | EUR | 13,135,598 | Bank of America N.A. | 6/28/24 | 42,034 | ||||||||||||||
USD | 190,719,444 | EUR | 175,436,181 | JPMorgan Chase Bank N.A. | 6/28/24 | 786,975 | ||||||||||||||
USD | 190,821,495 | EUR | 175,436,180 | Morgan Stanley | 6/28/24 | 889,026 | ||||||||||||||
USD | 72,872,070 | GBP | 57,587,032 | Morgan Stanley | 6/28/24 | 155,978 | ||||||||||||||
$ | 2,551,870 |
12
NOTES TO SCHEDULE OF INVESTMENTS | ||||||||
CAD | – | Canadian Dollar | ||||||
EUR | – | Euro | ||||||
GBP | – | British Pound | ||||||
USD | – | United States Dollar |
(1)Non-income producing.
See Notes to Financial Statements.
13
Statement of Assets and Liabilities |
MARCH 31, 2024 | |||||
Assets | |||||
Investment securities, at value (cost of $7,777,529,680) | $ | 8,950,697,695 | |||
Cash | 3,641,996 | ||||
Receivable for investments sold | 19,021,427 | ||||
Receivable for capital shares sold | 3,371,590 | ||||
Unrealized appreciation on forward foreign currency exchange contracts | 2,710,496 | ||||
Dividends and interest receivable | 17,661,535 | ||||
Securities lending receivable | 29,462 | ||||
8,997,134,201 | |||||
Liabilities | |||||
Payable for investments purchased | 30,226,599 | ||||
Payable for capital shares redeemed | 8,157,711 | ||||
Unrealized depreciation on forward foreign currency exchange contracts | 158,626 | ||||
Accrued management fees | 4,717,683 | ||||
Distribution and service fees payable | 97,280 | ||||
Accrued other expenses | 12,984 | ||||
43,370,883 | |||||
Net Assets | $ | 8,953,763,318 | |||
Net Assets Consist of: | |||||
Capital (par value and paid-in surplus) | $ | 7,764,634,816 | |||
Distributable earnings (loss) | 1,189,128,502 | ||||
$ | 8,953,763,318 |
Net Assets | Shares Outstanding | Net Asset Value Per Share* | |||||||||
Investor Class, $0.01 Par Value | $1,750,410,099 | 107,773,967 | $16.24 | ||||||||
I Class, $0.01 Par Value | $1,804,558,813 | 110,971,581 | $16.26 | ||||||||
Y Class, $0.01 Par Value | $226,760,688 | 13,935,846 | $16.27 | ||||||||
A Class, $0.01 Par Value | $211,866,660 | 13,082,994 | $16.19 | ||||||||
C Class, $0.01 Par Value | $18,982,029 | 1,193,434 | $15.91 | ||||||||
R Class, $0.01 Par Value | $90,210,883 | 5,594,627 | $16.12 | ||||||||
R5 Class, $0.01 Par Value | $24,671,450 | 1,516,380 | $16.27 | ||||||||
R6 Class, $0.01 Par Value | $3,417,540,759 | 210,202,822 | $16.26 | ||||||||
G Class, $0.01 Par Value | $1,408,761,937 | 86,561,609 | $16.27 |
*Maximum offering price per share was equal to the net asset value per share for all share classes, except A Class, for which the maximum offering price per share was $17.18 (net asset value divided by 0.9425). A contingent deferred sales charge may be imposed on redemptions of A Class and C Class.
See Notes to Financial Statements.
14
Statement of Operations |
YEAR ENDED MARCH 31, 2024 | |||||
Investment Income (Loss) | |||||
Income: | |||||
Dividends (including $7,252,656 from affiliates and net of foreign taxes withheld of $4,147,903) | $ | 240,390,663 | |||
Interest | 9,047,257 | ||||
Securities lending, net | 703,498 | ||||
250,141,418 | |||||
Expenses: | |||||
Management fees | 66,315,209 | ||||
Distribution and service fees: | |||||
A Class | 537,799 | ||||
C Class | 218,208 | ||||
R Class | 455,146 | ||||
Directors' fees and expenses | 299,322 | ||||
Other expenses | 17,337 | ||||
67,843,021 | |||||
Fees waived - G Class | (8,070,334) | ||||
59,772,687 | |||||
Net investment income (loss) | 190,368,731 | ||||
Realized and Unrealized Gain (Loss) | |||||
Net realized gain (loss) on: | |||||
Investment transactions (including $(25,966,635) from affiliates) | 283,699,994 | ||||
Forward foreign currency exchange contract transactions | 5,757,068 | ||||
Foreign currency translation transactions | (33,870) | ||||
289,423,192 | |||||
Change in net unrealized appreciation (depreciation) on: | |||||
Investments (including $(11,690,293) from affiliates) | 342,428,541 | ||||
Forward foreign currency exchange contracts | 8,710,116 | ||||
Translation of assets and liabilities in foreign currencies | (8,549) | ||||
351,130,108 | |||||
Net realized and unrealized gain (loss) | 640,553,300 | ||||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 830,922,031 |
See Notes to Financial Statements.
15
Statement of Changes in Net Assets |
YEARS ENDED MARCH 31, 2024 AND MARCH 31, 2023 | ||||||||
Increase (Decrease) in Net Assets | March 31, 2024 | March 31, 2023 | ||||||
Operations | ||||||||
Net investment income (loss) | $ | 190,368,731 | $ | 188,003,985 | ||||
Net realized gain (loss) | 289,423,192 | 714,246,576 | ||||||
Change in net unrealized appreciation (depreciation) | 351,130,108 | (1,131,798,074) | ||||||
Net increase (decrease) in net assets resulting from operations | 830,922,031 | (229,547,513) | ||||||
Distributions to Shareholders | ||||||||
From earnings: | ||||||||
Investor Class | (99,673,599) | (163,533,056) | ||||||
I Class | (90,820,613) | (132,402,340) | ||||||
Y Class | (11,381,356) | (13,302,433) | ||||||
A Class | (10,515,332) | (17,324,396) | ||||||
C Class | (877,632) | (2,079,138) | ||||||
R Class | (4,310,184) | (7,033,716) | ||||||
R5 Class | (1,426,409) | (3,342,554) | ||||||
R6 Class | (191,402,739) | (277,728,457) | ||||||
G Class | (80,117,091) | (108,624,508) | ||||||
Decrease in net assets from distributions | (490,524,955) | (725,370,598) | ||||||
Capital Share Transactions | ||||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | (782,532,595) | 370,300,610 | ||||||
Net increase (decrease) in net assets | (442,135,519) | (584,617,501) | ||||||
Net Assets | ||||||||
Beginning of period | 9,395,898,837 | 9,980,516,338 | ||||||
End of period | $ | 8,953,763,318 | $ | 9,395,898,837 |
See Notes to Financial Statements.
16
Notes to Financial Statements |
MARCH 31, 2024
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. Mid Cap Value Fund (the fund) is one fund in a series issued by the corporation. The fund’s investment objective is to seek long-term capital growth. Income is a secondary objective.
The fund offers the Investor Class, I Class, Y Class, A Class, C Class, R Class, R5 Class, R6 Class and G Class. The A Class may incur an initial sales charge. The A Class and C Class may be subject to a contingent deferred sales charge.
2. Significant Accounting Policies
The following is a summary of significant accounting policies consistently followed by the fund in preparation of its financial statements. The fund is an investment company and follows accounting and reporting guidance in accordance with accounting principles generally accepted in the United States of America. This may require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from these estimates. Management evaluated the impact of events or transactions occurring through the date the financial statements were issued that would merit recognition or disclosure.
Investment Valuations — The fund determines the fair value of its investments and computes its net asset value (NAV) per share at the close of regular trading (usually 4 p.m. Eastern time) on the New York Stock Exchange (NYSE) on each day the NYSE is open. The value of investments of the fund is determined by American Century Investment Management, Inc. (ACIM) (the investment advisor), as the valuation designee, pursuant to its valuation policies and procedures. The Board of Directors oversees the valuation designee and reviews its valuation policies and procedures at least annually.
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.
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. U.S. Treasury and Government Agency securities 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.
Open-end management investment companies are valued at the reported NAV per share. Repurchase agreements are valued at cost, which approximates fair value. 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.
If the valuation designee determines that the market price for a portfolio security is not readily available or is believed by the valuation designee to be unreliable, such security is valued at fair value as determined in good faith by the valuation designee, in accordance with its policies and procedures. Circumstances that may cause the fund to determine that market quotations are not available or reliable include, but are not limited to: when there is a significant event subsequent to the market quotation; trading in a security has been halted during the trading day; or trading in a security is insufficient or did not take place due to a closure or holiday.
17
The valuation designee monitors for significant events occurring after the close of an investment’s primary exchange but before the fund’s NAV per share is determined. Significant events may include, but are not limited to: corporate announcements and transactions; regulatory news, 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 valuation designee also monitors for significant fluctuations between domestic and foreign markets, as evidenced by the U.S. market or such other indicators that it deems appropriate. The valuation designee 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.
Foreign Currency Translations — All assets and liabilities, including investment securities and other financial instruments, initially expressed in foreign currencies are translated into U.S. dollars each day at the mean of the appropriate currency exchange rate at the close of the NYSE as provided by an independent pricing service. 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.
Security Transactions — Security transactions are accounted for as of the trade date. Net realized gains and losses are determined on the identified cost basis, which is also used for federal income tax purposes.
Investment Income — Dividend income less foreign taxes withheld, if any, is recorded as of the ex-dividend date. Distributions received on securities that represent a return of capital or long-term capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The fund may estimate the components of distributions received that may be considered nontaxable distributions or long-term capital gain distributions for income tax purposes. Interest income is recorded on the accrual basis and includes accretion of discounts and amortization of premiums. Securities lending income is net of fees and rebates earned by the lending agent for its services.
Repurchase Agreements — The fund may enter into repurchase agreements with institutions that ACIM has determined are creditworthy pursuant to criteria adopted by the Board of Directors. The fund requires that the collateral, represented by securities, received in a repurchase transaction be transferred to the custodian in a manner sufficient to enable the fund to obtain those securities in the event of a default under the repurchase agreement. ACIM monitors, on a daily basis, the securities transferred to ensure the value, including accrued interest, of the securities under each repurchase agreement is equal to or greater than amounts owed to the fund under each repurchase agreement.
Joint Trading Account — Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the fund, along with certain other funds in the American Century Investments family of funds, may transfer uninvested cash balances into a joint trading account. These balances are invested in one or more repurchase agreements that are collateralized by U.S. Treasury or Agency obligations.
Income Tax Status — It is the fund's policy to distribute substantially all net investment income and net realized gains to shareholders and to otherwise qualify as a regulated investment company under provisions of the Internal Revenue Code. Accordingly, no provision has been made for income taxes. The fund files U.S. federal, state, local and non-U.S. tax returns as applicable. The fund's tax returns are subject to examination by the relevant taxing authority until expiration of the applicable statute of limitations, which is generally three years from the date of filing but can be longer in certain jurisdictions. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination and for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Multiple Class — All shares of the fund represent an equal pro rata interest in the net assets of the class to which such shares belong, and have identical voting, dividend, liquidation and other rights and the same terms and conditions, except for class specific expenses and exclusive rights to vote on matters affecting only individual classes. Income, non-class specific expenses, and realized and unrealized capital gains and losses of the fund are allocated to each class of shares based on their relative net assets.
18
Distributions to Shareholders — Distributions from net investment income, if any, are generally declared and paid quarterly. Distributions from net realized gains, if any, are generally declared and paid annually. The fund may elect to treat a portion of its payment to a redeeming shareholder, which represents the pro rata share of undistributed net investment income and net realized gains, as a distribution for federal income tax purposes (tax equalization).
Indemnifications — Under the corporation’s organizational documents, its officers and directors are indemnified against certain liabilities arising out of the performance of their duties to the fund. In addition, in the normal course of business, the fund enters into contracts that provide general indemnifications. The maximum exposure under these arrangements is unknown as this would involve future claims that may be made against a fund. The risk of material loss from such claims is considered by management to be remote.
Securities Lending — Securities are lent to qualified financial institutions and brokers. State Street Bank & Trust Co. serves as securities lending agent to the fund pursuant to a Securities Lending Agreement. The lending of securities exposes the fund to risks such as: the borrowers may fail to return the loaned securities, the borrowers may not be able to provide additional collateral, the fund may experience delays in recovery of the loaned securities or delays in access to collateral, or the fund may experience losses related to the investment collateral. To minimize certain risks, loan counterparties pledge collateral in the form of cash and/or securities. The lending agent has agreed to indemnify the fund in the case of default of any securities borrowed. Cash collateral received is invested in the State Street Navigator Securities Lending Government Money Market Portfolio, a money market mutual fund registered under the 1940 Act. The loans may also be secured by U.S. government securities in an amount at least equal to the market value of the securities loaned, plus accrued interest and dividends, determined on a daily basis and adjusted accordingly. By lending securities, the fund seeks to increase its net investment income through the receipt of interest and fees. Such income is reflected separately within the Statement of Operations. The value of loaned securities and related collateral outstanding at period end, if any, are shown on a gross basis within the Schedule of Investments and Statement of Assets and Liabilities.
3. Fees and Transactions with Related Parties
Certain officers and directors of the corporation are also officers and/or directors of American Century Companies, Inc. (ACC). The corporation's investment advisor, ACIM, the corporation's distributor, American Century Investment Services, Inc. (ACIS), and the corporation's transfer agent, American Century Services, LLC, are wholly owned, directly or indirectly, by ACC. Various funds issued by American Century Asset Allocation Portfolios, Inc. own, in aggregate, 10% of the shares of the fund.
Management Fees — The corporation has entered into a management agreement with ACIM, under which ACIM provides the fund with investment advisory and management services in exchange for a single, unified management fee (the fee) per class. The agreement provides that ACIM will pay all expenses of managing and operating the fund, except brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), extraordinary expenses, and expenses incurred in connection with the provision of shareholder services and distribution services under a plan adopted pursuant to Rule 12b-1 under the 1940 Act. The fee is computed and accrued daily based on each class's daily net assets and paid monthly in arrears. The difference in the fee among the classes is a result of their separate arrangements for non-Rule 12b-1 shareholder services. It is not the result of any difference in advisory or custodial fees or other expenses related to the management of the fund's assets, which do not vary by class. The 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), as well as exchange-traded funds managed by the investment advisor, that use very similar investment teams and strategies (strategy assets). 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.
19
The management fee schedule range and the effective annual management fee for each class for the period ended March 31, 2024 are as follows:
Management Fee Schedule Range | Effective Annual Management Fee | |||||||
Investor Class | 0.95% to 0.97% | 0.97% | ||||||
I Class | 0.75% to 0.77% | 0.77% | ||||||
Y Class | 0.60% to 0.62% | 0.62% | ||||||
A Class | 0.95% to 0.97% | 0.97% | ||||||
C Class | 0.95% to 0.97% | 0.97% | ||||||
R Class | 0.95% to 0.97% | 0.97% | ||||||
R5 Class | 0.75% to 0.77% | 0.77% | ||||||
R6 Class | 0.60% to 0.62% | 0.62% | ||||||
G Class | 0.60% to 0.62% | 0.00%(1) |
(1)Effective annual management fee before waiver was 0.62%.
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 March 31, 2024 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.
Other Expenses — A fund’s other expenses may include interest charges, clearing exchange fees, proxy solicitation expenses, fees associated with the recovery of foreign tax reclaims and other miscellaneous expenses.
Interfund Transactions — The fund may enter into security transactions with other American Century Investments funds and other client accounts of the investment advisor, in accordance with the 1940 Act rules and procedures adopted by the Board of Directors. The rules and procedures require, among other things, that these transactions be effected at the independent current market price of the security. During the period, the interfund purchases and sales were $1,649,322 and $2,182,800, respectively. The effect of interfund transactions on the Statement of Operations was $25,278 in net realized gain (loss) on investment transactions.
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments and in kind transactions, for the period ended March 31, 2024 were $4,788,660,235 and $5,648,687,291, respectively.
For the period ended March 31, 2024, the fund incurred net realized gains of $6,953,801 from redemptions in kind. A redemption in kind occurs when a fund delivers securities from its portfolio in lieu of cash as payment to a redeeming shareholder.
20
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Year ended March 31, 2024 | Year ended March 31, 2023 | |||||||||||||
Shares | Amount | Shares | Amount | |||||||||||
Investor Class/Shares Authorized | 1,150,000,000 | 1,100,000,000 | ||||||||||||
Sold | 10,123,997 | $ | 156,450,282 | 21,818,393 | $ | 355,780,320 | ||||||||
Issued in reinvestment of distributions | 6,287,347 | 97,239,737 | 10,330,219 | 159,831,389 | ||||||||||
Redeemed | (46,604,468) | (713,108,547) | (28,629,576) | (460,474,594) | ||||||||||
(30,193,124) | (459,418,528) | 3,519,036 | 55,137,115 | |||||||||||
I Class/Shares Authorized | 1,060,000,000 | 1,060,000,000 | ||||||||||||
Sold | 35,463,763 | 547,004,369 | 34,585,466 | 553,921,267 | ||||||||||
Issued in reinvestment of distributions | 5,494,621 | 85,093,612 | 8,070,921 | 125,019,353 | ||||||||||
Redeemed | (44,030,541) | (678,121,934) | (29,938,431) | (482,746,841) | ||||||||||
(3,072,157) | (46,023,953) | 12,717,956 | 196,193,779 | |||||||||||
Y Class/Shares Authorized | 100,000,000 | 80,000,000 | ||||||||||||
Sold | 4,307,579 | 66,903,187 | 1,597,527 | 25,593,863 | ||||||||||
Issued in reinvestment of distributions | 555,761 | 8,615,841 | 845,403 | 13,097,260 | ||||||||||
Redeemed | (1,697,898) | (26,232,672) | (2,777,722) | (44,536,640) | ||||||||||
3,165,442 | 49,286,356 | (334,792) | (5,845,517) | |||||||||||
A Class/Shares Authorized | 165,000,000 | 165,000,000 | ||||||||||||
Sold | 2,614,884 | 40,103,485 | 4,278,604 | 68,600,837 | ||||||||||
Issued in reinvestment of distributions | 570,887 | 8,807,885 | 942,859 | 14,552,674 | ||||||||||
Redeemed | (5,068,382) | (77,785,481) | (7,830,830) | (127,784,808) | ||||||||||
(1,882,611) | (28,874,111) | (2,609,367) | (44,631,297) | |||||||||||
C Class/Shares Authorized | 20,000,000 | 20,000,000 | ||||||||||||
Sold | 108,063 | 1,635,500 | 217,753 | 3,433,599 | ||||||||||
Issued in reinvestment of distributions | 56,399 | 855,154 | 134,021 | 2,034,861 | ||||||||||
Redeemed | (774,816) | (11,698,118) | (846,455) | (13,393,499) | ||||||||||
(610,354) | (9,207,464) | (494,681) | (7,925,039) | |||||||||||
R Class/Shares Authorized | 60,000,000 | 50,000,000 | ||||||||||||
Sold | 773,487 | 11,836,582 | 1,455,170 | 23,600,630 | ||||||||||
Issued in reinvestment of distributions | 280,360 | 4,308,714 | 457,380 | 7,033,684 | ||||||||||
Redeemed | (1,630,083) | (24,794,040) | (1,402,574) | (22,405,750) | ||||||||||
(576,236) | (8,648,744) | 509,976 | 8,228,564 | |||||||||||
R5 Class/Shares Authorized | 25,000,000 | 25,000,000 | ||||||||||||
Sold | 343,877 | 5,349,260 | 748,302 | 12,185,993 | ||||||||||
Issued in reinvestment of distributions | 91,220 | 1,413,552 | 214,738 | 3,326,913 | ||||||||||
Redeemed | (937,323) | (14,593,573) | (1,632,216) | (25,872,916) | ||||||||||
(502,226) | (7,830,761) | (669,176) | (10,360,010) | |||||||||||
R6 Class/Shares Authorized | 2,000,000,000 | 2,000,000,000 | ||||||||||||
Sold | 39,109,166 | 604,984,551 | 61,849,513 | 991,987,137 | ||||||||||
Issued in reinvestment of distributions | 11,978,546 | 185,411,845 | 17,395,448 | 269,283,605 | ||||||||||
Redeemed | (75,048,878) | (1,154,619,812) | (52,483,143) | (844,848,766) | ||||||||||
(23,961,166) | (364,223,416) | 26,761,818 | 416,421,976 | |||||||||||
G Class/Shares Authorized | 850,000,000 | 850,000,000 | ||||||||||||
Sold | 13,321,060 | 205,127,807 | 6,113,268 | 96,438,643 | ||||||||||
Issued in reinvestment of distributions | 5,172,836 | 80,117,091 | 7,015,615 | 108,624,508 | ||||||||||
Redeemed | (12,337,847) | (192,836,872) | (26,789,545) | (441,982,112) | ||||||||||
6,156,049 | 92,408,026 | (13,660,662) | (236,918,961) | |||||||||||
Net increase (decrease) | (51,476,383) | $ | (782,532,595) | 25,740,108 | $ | 370,300,610 |
21
6. Affiliated Company Transactions
If a fund's holding represents ownership of 5% or more of the voting securities of a company, the company is affiliated as defined in the 1940 Act. A summary of transactions for each company which is or was an affiliate at or during the period ended March 31, 2024 follows (amounts in thousands):
Company | Beginning Value | Purchase Cost | Sales Cost | Change in Net Unrealized Appreciation (Depreciation) | Ending Value | Ending Shares | Net Realized Gain (Loss) | Income | ||||||||||||||||||
Heartland Express, Inc.(1) | $ | 65,126 | — | $ | 31,663 | $ | (3,836) | (1) | (1) | $ | (10,772) | $ | 296 | |||||||||||||
Spire, Inc.(1) | 185,263 | $ | 4,801 | 79,722 | (7,854) | (1) | (1) | (15,195) | 6,957 | |||||||||||||||||
$ | 250,389 | $ | 4,801 | $ | 111,385 | $ | (11,690) | $ | (25,967) | $ | 7,253 |
(1)Company was not an affiliate at March 31, 2024.
7. 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.
22
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 | |||||||||||
Automobile Components | $ | 143,508,707 | $ | 31,158,037 | — | ||||||
Beverages | — | 114,725,583 | — | ||||||||
Building Products | 70,006,580 | 67,393,141 | — | ||||||||
Chemicals | — | 98,516,909 | — | ||||||||
Construction and Engineering | — | 104,981,627 | — | ||||||||
Consumer Staples Distribution & Retail | 126,558,010 | 167,397,985 | — | ||||||||
Diversified Telecommunication Services | — | 65,584,229 | — | ||||||||
Hotels, Restaurants and Leisure | 48,914,609 | 31,154,825 | — | ||||||||
Household Products | 178,772,307 | 73,260,237 | — | ||||||||
Trading Companies and Distributors | 163,497,788 | 86,044,675 | — | ||||||||
Other Industries | 7,303,222,205 | — | — | ||||||||
Short-Term Investments | 206,559 | 75,793,682 | — | ||||||||
$ | 8,034,686,765 | $ | 916,010,930 | — | |||||||
Other Financial Instruments | |||||||||||
Forward Foreign Currency Exchange Contracts | — | $ | 2,710,496 | — | |||||||
Liabilities | |||||||||||
Other Financial Instruments | |||||||||||
Forward Foreign Currency Exchange Contracts | — | $ | 158,626 | — |
8. Derivative Instruments
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. A fund will segregate cash, cash equivalents or other appropriate liquid securities on its records in amounts sufficient to meet requirements. 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 settlement 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 $787,186,574.
The value of foreign currency risk derivative instruments as of March 31, 2024, is disclosed on the Statement of Assets and Liabilities as an asset of $2,710,496 in unrealized appreciation on forward foreign currency exchange contracts and a liability of $158,626 in unrealized depreciation on forward foreign currency exchange contracts. For the year ended March 31, 2024, the effect of foreign currency risk derivative instruments on the Statement of Operations was $5,757,068 in net realized gain (loss) on forward foreign currency exchange contract transactions and $8,710,116 in change in net unrealized appreciation (depreciation) on forward foreign currency exchange contracts.
23
9. Risk Factors
The value of the fund’s shares will go up and down, sometimes rapidly or unpredictably, based on the performance of the securities owned by the fund and other factors generally affecting the securities market. Market risks, including political, regulatory, economic and social developments, can affect the value of the fund’s investments. Natural disasters, public health emergencies, war, terrorism and other unforeseeable events may lead to increased market volatility and may have adverse long-term effects on world economies and markets generally.
There are certain risks involved in investing in foreign securities. These risks include those resulting from political events (such as civil unrest, national elections and imposition of exchange controls), social and economic events (such as labor strikes and rising inflation), and natural disasters. Securities of foreign issuers may be less liquid and more volatile. Investing a significant portion of assets in one country or region may accentuate these risks.
10. Federal Tax Information
The tax character of distributions paid during the years ended March 31, 2024 and March 31, 2023 were as follows:
2024 | 2023 | |||||||
Distributions Paid From | ||||||||
Ordinary income | $ | 261,962,639 | $ | 208,055,357 | ||||
Long-term capital gains | $ | 228,562,316 | $ | 517,315,241 |
The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
As of period end, the federal tax cost of investments and the components of distributable earnings on a tax-basis were as follows:
Federal tax cost of investments | $ | 7,864,439,822 | |||
Gross tax appreciation of investments | $ | 1,370,638,136 | |||
Gross tax depreciation of investments | (284,380,263) | ||||
Net tax appreciation (depreciation) of investments | 1,086,257,873 | ||||
Net tax appreciation (depreciation) on derivatives and translation of assets and liabilities in foreign currencies | (10,178) | ||||
Net tax appreciation (depreciation) | $ | 1,086,247,695 | |||
Undistributed ordinary income | $ | 31,309,028 | |||
Accumulated long-term gains | $ | 71,571,779 |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales.
24
Financial Highlights |
For a Share Outstanding Throughout the Years Ended March 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 | |||||||||||||||||||||||||||||||||||||||||||||||
2024 | $15.59 | 0.28 | 1.20 | 1.48 | (0.28) | (0.55) | (0.83) | $16.24 | 9.79% | 0.98% | 0.98% | 1.81% | 1.81% | 54% | $1,750,410 | ||||||||||||||||||||||||||||||||
2023 | $17.30 | 0.28 | (0.75) | (0.47) | (0.28) | (0.96) | (1.24) | $15.59 | (2.58)% | 0.98% | 0.98% | 1.70% | 1.70% | 64% | $2,150,798 | ||||||||||||||||||||||||||||||||
2022 | $19.03 | 0.26 | 1.95 | 2.21 | (0.25) | (3.69) | (3.94) | $17.30 | 12.48% | 0.97% | 0.97% | 1.33% | 1.33% | 50% | $2,325,957 | ||||||||||||||||||||||||||||||||
2021 | $12.35 | 0.22 | 6.78 | 7.00 | (0.23) | (0.09) | (0.32) | $19.03 | 57.22% | 0.97% | 0.97% | 1.43% | 1.43% | 65% | $2,519,909 | ||||||||||||||||||||||||||||||||
2020 | $15.19 | 0.24 | (2.85) | (2.61) | (0.23) | — | (0.23) | $12.35 | (17.52)% | 0.98% | 0.99% | 1.56% | 1.55% | 55% | $1,885,286 | ||||||||||||||||||||||||||||||||
I Class | |||||||||||||||||||||||||||||||||||||||||||||||
2024 | $15.61 | 0.31 | 1.20 | 1.51 | (0.31) | (0.55) | (0.86) | $16.26 | 10.00% | 0.78% | 0.78% | 2.01% | 2.01% | 54% | $1,804,559 | ||||||||||||||||||||||||||||||||
2023 | $17.32 | 0.31 | (0.75) | (0.44) | (0.31) | (0.96) | (1.27) | $15.61 | (2.38)% | 0.78% | 0.78% | 1.90% | 1.90% | 64% | $1,779,890 | ||||||||||||||||||||||||||||||||
2022 | $19.04 | 0.29 | 1.96 | 2.25 | (0.28) | (3.69) | (3.97) | $17.32 | 12.75% | 0.77% | 0.77% | 1.53% | 1.53% | 50% | $1,754,741 | ||||||||||||||||||||||||||||||||
2021 | $12.36 | 0.25 | 6.79 | 7.04 | (0.27) | (0.09) | (0.36) | $19.04 | 57.50% | 0.77% | 0.77% | 1.63% | 1.63% | 65% | $1,778,956 | ||||||||||||||||||||||||||||||||
2020 | $15.21 | 0.28 | (2.87) | (2.59) | (0.26) | — | (0.26) | $12.36 | (17.40)% | 0.78% | 0.79% | 1.76% | 1.75% | 55% | $1,866,460 |
For a Share Outstanding Throughout the Years Ended March 31 (except as noted) | |||||||||||||||||||||||||||||||||||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||||||||||||||||||||||||||||||||||
Income From Investment Operations*: | Distributions From: | Ratio to Average Net Assets of†: | |||||||||||||||||||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Operating Expenses (before expense waiver) | Net Investment Income (Loss) | Net Investment Income (Loss) (before expense waiver) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||||||||||||||||||||||||||||||||
Y Class | |||||||||||||||||||||||||||||||||||||||||||||||
2024 | $15.62 | 0.33 | 1.20 | 1.53 | (0.33) | (0.55) | (0.88) | $16.27 | 10.16% | 0.63% | 0.63% | 2.16% | 2.16% | 54% | $226,761 | ||||||||||||||||||||||||||||||||
2023 | $17.33 | 0.33 | (0.75) | (0.42) | (0.33) | (0.96) | (1.29) | $15.62 | (2.23)% | 0.63% | 0.63% | 2.05% | 2.05% | 64% | $168,200 | ||||||||||||||||||||||||||||||||
2022 | $19.05 | 0.32 | 1.96 | 2.28 | (0.31) | (3.69) | (4.00) | $17.33 | 12.91% | 0.62% | 0.62% | 1.68% | 1.68% | 50% | $192,430 | ||||||||||||||||||||||||||||||||
2021 | $12.36 | 0.28 | 6.79 | 7.07 | (0.29) | (0.09) | (0.38) | $19.05 | 57.69% | 0.62% | 0.62% | 1.78% | 1.78% | 65% | $180,923 | ||||||||||||||||||||||||||||||||
2020 | $15.21 | 0.32 | (2.89) | (2.57) | (0.28) | — | (0.28) | $12.36 | (17.22)% | 0.63% | 0.64% | 1.91% | 1.90% | 55% | $97,541 | ||||||||||||||||||||||||||||||||
A Class | |||||||||||||||||||||||||||||||||||||||||||||||
2024 | $15.55 | 0.24 | 1.19 | 1.43 | (0.24) | (0.55) | (0.79) | $16.19 | 9.55% | 1.23% | 1.23% | 1.56% | 1.56% | 54% | $211,867 | ||||||||||||||||||||||||||||||||
2023 | $17.26 | 0.23 | (0.74) | (0.51) | (0.24) | (0.96) | (1.20) | $15.55 | (2.89)% | 1.23% | 1.23% | 1.45% | 1.45% | 64% | $232,651 | ||||||||||||||||||||||||||||||||
2022 | $18.99 | 0.21 | 1.95 | 2.16 | (0.20) | (3.69) | (3.89) | $17.26 | 12.23% | 1.22% | 1.22% | 1.08% | 1.08% | 50% | $303,260 | ||||||||||||||||||||||||||||||||
2021 | $12.32 | 0.19 | 6.76 | 6.95 | (0.19) | (0.09) | (0.28) | $18.99 | 56.87% | 1.22% | 1.22% | 1.18% | 1.18% | 65% | $323,669 | ||||||||||||||||||||||||||||||||
2020 | $15.16 | 0.20 | (2.85) | (2.65) | (0.19) | — | (0.19) | $12.32 | (17.76)% | 1.23% | 1.24% | 1.31% | 1.30% | 55% | $221,284 | ||||||||||||||||||||||||||||||||
C Class | |||||||||||||||||||||||||||||||||||||||||||||||
2024 | $15.28 | 0.12 | 1.18 | 1.30 | (0.12) | (0.55) | (0.67) | $15.91 | 8.75% | 1.98% | 1.98% | 0.81% | 0.81% | 54% | $18,982 | ||||||||||||||||||||||||||||||||
2023 | $16.98 | 0.11 | (0.72) | (0.61) | (0.13) | (0.96) | (1.09) | $15.28 | (3.53)% | 1.98% | 1.98% | 0.70% | 0.70% | 64% | $27,561 | ||||||||||||||||||||||||||||||||
2022 | $18.75 | 0.06 | 1.93 | 1.99 | (0.07) | (3.69) | (3.76) | $16.98 | 11.37% | 1.97% | 1.97% | 0.33% | 0.33% | 50% | $39,037 | ||||||||||||||||||||||||||||||||
2021 | $12.17 | 0.07 | 6.67 | 6.74 | (0.07) | (0.09) | (0.16) | $18.75 | 55.65% | 1.97% | 1.97% | 0.43% | 0.43% | 65% | $51,558 | ||||||||||||||||||||||||||||||||
2020 | $14.98 | 0.08 | (2.81) | (2.73) | (0.08) | — | (0.08) | $12.17 | (18.37)% | 1.98% | 1.99% | 0.56% | 0.55% | 55% | $58,796 |
For a Share Outstanding Throughout the Years Ended March 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 | |||||||||||||||||||||||||||||||||||||||||||||||
2024 | $15.48 | 0.20 | 1.19 | 1.39 | (0.20) | (0.55) | (0.75) | $16.12 | 9.24% | 1.48% | 1.48% | 1.31% | 1.31% | 54% | $90,211 | ||||||||||||||||||||||||||||||||
2023 | $17.19 | 0.19 | (0.74) | (0.55) | (0.20) | (0.96) | (1.16) | $15.48 | (3.08)% | 1.48% | 1.48% | 1.20% | 1.20% | 64% | $95,536 | ||||||||||||||||||||||||||||||||
2022 | $18.93 | 0.16 | 1.94 | 2.10 | (0.15) | (3.69) | (3.84) | $17.19 | 11.92% | 1.47% | 1.47% | 0.83% | 0.83% | 50% | $97,311 | ||||||||||||||||||||||||||||||||
2021 | $12.28 | 0.15 | 6.74 | 6.89 | (0.15) | (0.09) | (0.24) | $18.93 | 56.48% | 1.47% | 1.47% | 0.93% | 0.93% | 65% | $97,590 | ||||||||||||||||||||||||||||||||
2020 | $15.12 | 0.17 | (2.86) | (2.69) | (0.15) | — | (0.15) | $12.28 | (18.00)% | 1.48% | 1.49% | 1.06% | 1.05% | 55% | $67,874 | ||||||||||||||||||||||||||||||||
R5 Class | |||||||||||||||||||||||||||||||||||||||||||||||
2024 | $15.61 | 0.31 | 1.21 | 1.52 | (0.31) | (0.55) | (0.86) | $16.27 | 10.06% | 0.78% | 0.78% | 2.01% | 2.01% | 54% | $24,671 | ||||||||||||||||||||||||||||||||
2023 | $17.32 | 0.31 | (0.75) | (0.44) | (0.31) | (0.96) | (1.27) | $15.61 | (2.39)% | 0.78% | 0.78% | 1.90% | 1.90% | 64% | $31,521 | ||||||||||||||||||||||||||||||||
2022 | $19.05 | 0.29 | 1.95 | 2.24 | (0.28) | (3.69) | (3.97) | $17.32 | 12.68% | 0.77% | 0.77% | 1.53% | 1.53% | 50% | $46,565 | ||||||||||||||||||||||||||||||||
2021 | $12.36 | 0.25 | 6.80 | 7.05 | (0.27) | (0.09) | (0.36) | $19.05 | 57.58% | 0.77% | 0.77% | 1.63% | 1.63% | 65% | $59,132 | ||||||||||||||||||||||||||||||||
2020 | $15.21 | 0.28 | (2.87) | (2.59) | (0.26) | — | (0.26) | $12.36 | (17.40)% | 0.78% | 0.79% | 1.76% | 1.75% | 55% | $59,766 | ||||||||||||||||||||||||||||||||
R6 Class | |||||||||||||||||||||||||||||||||||||||||||||||
2024 | $15.60 | 0.33 | 1.21 | 1.54 | (0.33) | (0.55) | (0.88) | $16.26 | 10.24% | 0.63% | 0.63% | 2.16% | 2.16% | 54% | $3,417,541 | ||||||||||||||||||||||||||||||||
2023 | $17.32 | 0.33 | (0.76) | (0.43) | (0.33) | (0.96) | (1.29) | $15.60 | (2.30)% | 0.63% | 0.63% | 2.05% | 2.05% | 64% | $3,653,940 | ||||||||||||||||||||||||||||||||
2022 | $19.04 | 0.32 | 1.96 | 2.28 | (0.31) | (3.69) | (4.00) | $17.32 | 12.92% | 0.62% | 0.62% | 1.68% | 1.68% | 50% | $3,591,180 | ||||||||||||||||||||||||||||||||
2021 | $12.36 | 0.28 | 6.78 | 7.06 | (0.29) | (0.09) | (0.38) | $19.04 | 57.74% | 0.62% | 0.62% | 1.78% | 1.78% | 65% | $3,494,909 | ||||||||||||||||||||||||||||||||
2020 | $15.20 | 0.31 | (2.87) | (2.56) | (0.28) | — | (0.28) | $12.36 | (17.23)% | 0.63% | 0.64% | 1.91% | 1.90% | 55% | $2,068,136 |
For a Share Outstanding Throughout the Years Ended March 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) | |||||||||||||||||||||||||||||||||
G Class | |||||||||||||||||||||||||||||||||||||||||||||||
2024 | $15.62 | 0.43 | 1.20 | 1.63 | (0.43) | (0.55) | (0.98) | $16.27 | 10.84% | 0.01% | 0.63% | 2.78% | 2.16% | 54% | $1,408,762 | ||||||||||||||||||||||||||||||||
2023 | $17.33 | 0.43 | (0.75) | (0.32) | (0.43) | (0.96) | (1.39) | $15.62 | (1.63)% | 0.01% | 0.63% | 2.67% | 2.05% | 64% | $1,255,802 | ||||||||||||||||||||||||||||||||
2022(3) | $17.81 | 0.02 | 0.61 | 0.63 | (0.03) | (1.08) | (1.11) | $17.33 | 3.55% | 0.00% | 0.62% | 2.11% | 1.49% | 50%(4) | $1,630,035 |
Notes to Financial Highlights |
(1)Computed using average shares outstanding throughout the period.
(2)Total returns are calculated based on the net asset value of the last business day and do not reflect applicable sales charges, if any. Total returns for periods less than one year are not annualized.
(3)March 15, 2022 (commencement of sale) through March 31, 2022.
(4)Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended March 31, 2022.
*The amount shown for a share outstanding throughout the period may not correlate with the Statement(s) of Operations or precisely reflect the class expense differentials due to the timing of transactions in shares of a fund in relation to income earned and/or fluctuations in the fair value of a fund's investments.
†Ratios for periods less than one year are annualized. Zero balances may reflect amounts less than 0.005%.
See Notes to Financial Statements.
Report of Independent Registered Public Accounting Firm |
To the shareholders of the Mid Cap Value Fund and the Board of Directors of American Century Capital Portfolios, Inc.
Opinion on the Financial Statements and Financial Highlights
We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of Mid Cap Value Fund (the “Fund”), one of the funds constituting the American Century Capital Portfolios, Inc., as of March 31, 2024, the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Fund as of March 31, 2024, and the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on the Fund’s financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. Our procedures included confirmation of securities owned as of March 31, 2024, by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
/s/ Deloitte & Touche LLP
Kansas City, Missouri
May 16, 2024
We have served as the auditor of one or more American Century investment companies since 1997.
29
Management |
The Board of Directors
The individuals listed below serve as directors of the funds. Each director will continue to serve in this capacity until death, retirement, resignation or removal from office. The board has adopted a mandatory retirement age for directors who are not “interested persons,” as that term is defined in the Investment Company Act (independent directors). Independent directors shall retire on December 31 of the year in which they reach their 75th birthday.
Jonathan S. Thomas is an “interested person” because he currently serves as President and Chief Executive Officer of American Century Companies, Inc. (ACC), the parent company of American Century Investment Management, Inc. (ACIM or the advisor). The other directors (more than three-fourths of the total number) are independent. They are not employees, directors or officers of, and have no financial interest in, ACC or any of its wholly owned, direct or indirect, subsidiaries, including ACIM, American Century Investment Services, Inc. (ACIS) and American Century Services, LLC (ACS), and they do not have any other affiliations, positions or relationships that would cause them to be considered “interested persons” under the Investment Company Act. The directors serve in this capacity for seven (in the case of Jonathan S. Thomas, 16; and Thomas W. Bunn, 8) registered investment companies in the American Century Investments family of funds.
The following table presents additional information about the directors. The mailing address for each director is 4500 Main Street, Kansas City, Missouri 64111.
Name (Year of Birth) | Position(s) Held with Funds | Length of Time Served | Principal Occupation(s) During Past 5 Years | Number of American Century Portfolios Overseen by Director | Other Directorships Held During Past 5 Years | ||||||||||||
Independent Directors | |||||||||||||||||
Brian Bulatao (1964) | Director | Since 2022 | Chief Administrative Officer, Activision Blizzard, Inc. (2021 to present); Under Secretary of State for Management, U.S. Department of State (2018 to 2021) | 64 | None | ||||||||||||
Thomas W. Bunn (1953) | Director | Since 2017 | Retired | 119 | None | ||||||||||||
Chris H. Cheesman (1962) | Director | Since 2019 | Retired | 64 | Alleghany Corporation (2021 to 2022) | ||||||||||||
Barry Fink (1955) | Director | Since 2012 (independent since 2016) | Retired | 64 | None | ||||||||||||
Rajesh K. Gupta (1960) | Director | Since 2019 | Partner Emeritus, SeaCrest Investment Management and SeaCrest Wealth Management (2019 to present) | 64 | None |
30
Name (Year of Birth) | Position(s) Held with Funds | Length of Time Served | Principal Occupation(s) During Past 5 Years | Number of American Century Portfolios Overseen by Director | Other Directorships Held During Past 5 Years | ||||||||||||
Independent Directors | |||||||||||||||||
Lynn M. Jenkins (1963) | Director | Since 2019 | Senior Policy Advisor, Capital Hill Policy Group (2020 to present); Consultant, LJ Strategies (2019 to 2023) | 64 | MGP Ingredients, Inc. (2019 to 2021) | ||||||||||||
Jan M. Lewis (1957) | Director and Board Chair | Since 2011 (Board Chair since 2022) | Retired | 64 | None | ||||||||||||
Gary C. Meltzer (1963) | Director | Since 2022 | Advisor, Pontoro (2021 to present); Executive Advisor, Consultant and Investor, Harris Ariel Advisory LLC (2020 to present); Managing Partner, PricewaterhouseCoopers LLP (1985 to 2020) | 64 | ExcelFin Acquisition Corp., Apollo Realty Income Solutions, Inc. | ||||||||||||
Interested Director | |||||||||||||||||
Jonathan S. Thomas (1963) | Director | Since 2007 | President and Chief Executive Officer, ACC (2007 to present). Also serves as Chief Executive Officer, ACS; Director, ACC and other ACC subsidiaries | 150 | None |
The Statement of Additional Information has additional information about the fund's directors and is available without charge, upon request, by calling 1-800-345-2021.
31
Officers
The following table presents certain information about the executive officers of the funds. Each officer serves as an officer for 16 investment companies in the American Century family of funds. No officer is compensated for his or her service as an officer of the funds. The listed officers are interested persons of the funds and are appointed or re-appointed on an annual basis. The mailing address for each officer listed below is 4500 Main Street, Kansas City, Missouri 64111.
Name (Year of Birth) | Offices with the Funds | Principal Occupation(s) During the Past Five Years | ||||||
Patrick Bannigan (1965) | President since 2019 | Executive Vice President and Director, ACC (2012 to present); Chief Financial Officer, Chief Accounting Officer and Treasurer, ACC (2015 to present); Also serves as President, ACS; Vice President, ACIM; Chief Financial Officer, Chief Accounting Officer and/or Director, ACIM, ACS and other ACC subsidiaries | ||||||
R. Wes Campbell (1974) | Chief Financial Officer and Treasurer since 2018; Vice President since 2023 | Vice President, ACS (2020 to present); Investment Operations and Investment Accounting, ACS (2000 to present) | ||||||
Amy D. Shelton (1964) | Chief Compliance Officer and Vice President since 2014 | Chief Compliance Officer, American Century funds, (2014 to present); Chief Compliance Officer, ACIM (2014 to present); Chief Compliance Officer, ACIS (2009 to present). Also serves as Vice President, ACIS | ||||||
John Pak (1968) | General Counsel and Senior Vice President since 2021 | General Counsel and Senior Vice President, ACC (2021 to present); Also serves as General Counsel and Senior Vice President, ACIM, ACS and ACIS. Chief Legal Officer of Investment and Wealth Management, The Bank of New York Mellon (2014 to 2021) | ||||||
Cihan Kasikara (1974) | Vice President since 2023 | Senior Vice President, ACS (2022 to present); Treasurer, ACS (2023 to present); Vice President, ACS (2020 to 2022); Vice President, Franklin Templeton (2015 to 2020) | ||||||
Kathleen Gunja Nelson (1976) | Vice President since 2023 | Vice President, ACS (2017 to present) | ||||||
Ward D. Stauffer (1960) | Secretary since 2005 | Attorney, ACC (2003 to present) |
32
Liquidity Risk Management Program |
The Fund has adopted a liquidity risk management program (the “program”). The Fund’s Board of Directors (the "Board") has designated American Century Investment Management, Inc. (“ACIM”) as the administrator of the program. Personnel of ACIM or its affiliates, including members of ACIM’s Investment Oversight Committee who are members of ACIM’s Investment Management and Global Analytics departments, conduct the day-to-day operation of the program pursuant to the program.
Under the program, ACIM manages the Fund’s liquidity risk, which is the risk that the Fund could not meet shareholder redemption requests without significant dilution of remaining shareholders’ interests in the Fund. This risk is managed by monitoring the degree of liquidity of the Fund’s investments, limiting the amount of the Fund’s illiquid investments, and utilizing various risk management tools and facilities available to the Fund for meeting shareholder redemptions, among other means. ACIM’s process of determining the degree of liquidity of certain investments held by the Fund is supported by a third-party liquidity assessment vendor.
The Board reviewed a report prepared by ACIM regarding the operation and effectiveness of the program for the period January 1, 2023 through December 31, 2023. No significant liquidity events impacting the Fund were noted in the report. In addition, ACIM provided its assessment that the program had been effective in managing the Fund’s liquidity risk.
33
Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain retirement accounts are subject to federal income tax withholding at the IRS default rate of 10%.* 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.
You may elect a different withholding rate, or request zero withholding, by submitting an acceptable IRS Form W-4R election with your distribution request. You may notify us of your W-4R election by telephone, on our distribution forms, on IRS Form W-4R, or through other acceptable electronic means. If your withholding election is for an automatic withdrawal plan, you have the right to revoke your election at any time and any election you make will remain in effect until revoked by filing a new election.
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 according to state regulations if, at the time of your distribution, your tax residency is within one of the mandatory withholding states.
*Some 403(b), 457 and qualified retirement plan distributions may be subject to 20% mandatory withholding, as they are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
A description of the policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund is available without charge, upon request, by calling 1-800-345-2021. It is also available on American Century Investments’ website at americancentury.com/proxy and on the Securities and Exchange Commission’s website at sec.gov. Information regarding how the investment advisor voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on americancentury.com/proxy. It is also available at sec.gov.
Quarterly Portfolio Disclosure
The fund files its complete schedule of portfolio holdings with the Securities and Exchange
Commission (SEC) for the first and third quarters of each fiscal year as an exhibit to its reports on
Form N-PORT. These portfolio holdings are available on the fund's website at
americancentury.com and, upon request, by calling 1-800-345-2021. The fund’s Form N-PORT
reports are available on the SEC’s website at sec.gov.
34
Other Tax Information
The following information is provided pursuant to provisions of the Internal Revenue Code.
The fund hereby designates up to the maximum amount allowable as qualified dividend income for the fiscal year ended March 31, 2024.
For corporate taxpayers, the fund hereby designates $171,355,027, or up to the maximum amount allowable, of ordinary income distributions paid during the fiscal year ended March 31, 2024 as qualified for the corporate dividends received deduction.
The fund hereby designates $236,539,533, or up to the maximum amount allowable, as long-term capital gain distributions (20% rate gain distributions) for the fiscal year ended March 31, 2024.
The fund hereby designates $76,928,227 as qualified short-term capital gain distributions for purposes of Internal Revenue Code Section 871 for the fiscal year ended March 31, 2024.
The fund utilized earnings and profits of $17,981,621 distributed to shareholders on redemption of shares as part of the dividends paid deduction (tax equalization).
35
Notes |
36
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Contact Us | americancentury.com | |||||||
Automated Information Line | 1-800-345-8765 | |||||||
Investor Services Representative | 1-800-345-2021 or 816-531-5575 | |||||||
Investors Using Advisors | 1-800-378-9878 | |||||||
Business, Not-For-Profit, Employer-Sponsored Retirement Plans | 1-800-345-3533 | |||||||
Banks and Trust Companies, Broker-Dealers, Financial Professionals, Insurance Companies | 1-800-345-6488 | |||||||
Telecommunications Relay Service for the Deaf | 711 | |||||||
American Century Capital Portfolios, Inc. | ||||||||
Investment Advisor: American Century Investment Management, Inc. Kansas City, Missouri | ||||||||
This report and the statements it contains are submitted for the general information of our shareholders. The report is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus. | ||||||||
©2024 American Century Proprietary Holdings, Inc. All rights reserved. CL-ANN-92271 2405 |
![image22.jpg](https://capedge.com/proxy/N-CSR/0000908186-24-000015/image22.jpg)
Annual Report | |||||
March 31, 2024 | |||||
Small Cap Dividend Fund | |||||
Investor Class (AMAEX) | |||||
I Class (AMAFX) | |||||
A Class (AMAHX) | |||||
R Class (AMAJX) | |||||
R6 Class (AMAKX) | |||||
G Class (AMALX) |
The Securities and Exchange Commission (SEC) adopted new rules that will require annual and semiannual reports to transition to a new format known as a Tailored Shareholder Report beginning in July 2024. The amendments will require the transmission of a concise report highlighting key fund information to investors. The detailed financial statements will remain available on our website, will be delivered to investors free of charge upon request, and will continue to be filed with the SEC.
Table of Contents |
President’s Letter | |||||
Performance | |||||
Portfolio Commentary | |||||
Fund Characteristics | |||||
Shareholder Fee Example | |||||
Schedule of Investments | |||||
Statement of Assets and Liabilities | |||||
Statement of Operations | |||||
Statement of Changes in Net Assets | |||||
Notes to Financial Statements | |||||
Financial Highlights | |||||
Report of Independent Registered Public Accounting Firm | |||||
Management | |||||
Liquidity Risk Management Program | |||||
Additional Information |
Any opinions expressed in this report reflect those of the author as of the date of the report, and do not necessarily represent the opinions of American Century Investments® or any other person in the American Century Investments organization. Any such opinions are subject to change at any time based upon market or other conditions and American Century Investments disclaims any responsibility to update such opinions. These opinions may not be relied upon as investment advice and, because investment decisions made by American Century Investments funds are based on numerous factors, may not be relied upon as an indication of trading intent on behalf of any American Century Investments fund. Security examples are used for representational purposes only and are not intended as recommendations to purchase or sell securities. Performance information for comparative indices and securities is provided to American Century Investments by third party vendors. To the best of American Century Investments’ knowledge, such information is accurate at the time of printing.
President’s Letter |
![image23.jpg](https://capedge.com/proxy/N-CSR/0000908186-24-000015/image23.jpg)
Dear Investor:
Thank you for reviewing this annual report for the period ending March 31, 2024. Annual reports help convey important information about fund returns, including market factors that affected performance. For additional investment insights, please visit americancentury.com.
Stocks Surged While Bonds Delivered Modest Gains
Soaring U.S. Treasury yields weighed on bond returns for the first six months of the reporting period. Meanwhile, inflation slowed but remained well above the Federal Reserve’s (Fed’s) target, lending conditions tightened, and recession risk rose. This fueled expectations for a shift in Fed policy, which, along with better-than-expected earnings, helped U.S. stocks deliver modest gains.
The Fed lifted rates in May, paused in June and hiked again in July to a range of 5.25% to 5.5%, a 22-year high. The Fed left rates unchanged in September but warned that persistent above-target inflation may require more tightening. This news pushed Treasury yields to multiyear highs in October and sent stocks tumbling. By November, inflation showed signs of moderating, and the Fed held rates steady again, reviving investor enthusiasm. Then, in December, Fed policymakers expressed more confidence about the inflation outlook and forecasted three rate cuts for 2024. Against this backdrop, recession fears eased, Treasury yields declined, and stocks and bonds ended 2023 on a strong note.
Despite the Fed’s continued pause, yields reversed course again in early 2024 amid a steady stream of better-than-expected economic data and persistent inflation. But the bond market’s late-2023 rally helped the Bloomberg U.S. Aggregate Bond Index maintain a gain of 1.70% for the 12-month period. Most stock indices continued to rally into 2024, buoyed by solid corporate earnings and expectations for Fed rate cuts. The S&P 500 Index returned 29.88% for the 12-month period, and growth stocks generally outperformed value stocks.
Remaining Diligent in Uncertain Times
We expect market volatility to linger as investors navigate a complex environment of persistent inflation, still-tight financial conditions, political uncertainty and slowing growth. In addition, the Israel-Hamas war and other tensions in the Middle East complicate the global backdrop and represent additional considerations for our investment teams.
Our firm has a long history of helping clients weather unpredictable and volatile markets, and we’re determined to meet today’s challenges. Thank you for your trust and confidence in American Century Investments.
With appreciation and respect,
![image48a16a.jpg](https://capedge.com/proxy/N-CSR/0000908186-24-000015/image48a16a.jpg)
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
2
Performance |
Total Returns as of March 31, 2024 | ||||||||||||||||||||
Average Annual Returns | ||||||||||||||||||||
Ticker Symbol | 1 year | Since Inception | Inception Date | |||||||||||||||||
Investor Class | AMAEX | 13.27% | 3.53% | 4/5/22 | ||||||||||||||||
Russell 2000 Value Index | — | 18.75% | 2.47% | — | ||||||||||||||||
I Class | AMAFX | 13.60% | 3.79% | 4/5/22 | ||||||||||||||||
A Class | AMAHX | |||||||||||||||||||
No sales charge | 12.99% | 3.28% | 4/5/22 | |||||||||||||||||
With sales charge | 6.49% | 0.25% | 4/5/22 | |||||||||||||||||
R Class | AMAJX | 12.83% | 3.09% | 4/5/22 | ||||||||||||||||
R6 Class | AMAKX | 13.77% | 3.94% | 4/5/22 | ||||||||||||||||
G Class | AMALX | 14.49% | 4.69% | 4/5/22 |
G Class returns would have been lower if a portion of the fees had not been waived.
Sales charges include initial sales charges and contingent deferred sales charges (CDSCs), as applicable. A Class shares have a 5.75% maximum initial sales charge and may be subject to a maximum CDSC of 1.00%. The SEC requires that mutual funds provide performance information net of maximum sales charges in all cases where charges could be applied.
Data presented reflect past performance. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance shown. Total returns for periods less than one year are not annualized. Investment return and principal value will fluctuate, and redemption value may be more or less than original cost. Data assumes reinvestment of dividends and capital gains, and none of the charts reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. To obtain performance data current to the most recent month end, please call 1-800-345-2021 or visit americancentury.com. For additional information about the fund, please consult the prospectus.
3
Growth of $10,000 Over Life of Class | ||
$10,000 investment made April 5, 2022 | ||
Performance for other share classes will vary due to differences in fee structure. |
![chart-71dcb0a7c71a40f0a87a.jpg](https://capedge.com/proxy/N-CSR/0000908186-24-000015/chart-71dcb0a7c71a40f0a87a.jpg)
Value on March 31, 2024 | |||||
Investor Class — $10,715 | |||||
Russell 2000 Value Index — $10,497 | |||||
Total Annual Fund Operating Expenses | |||||||||||||||||
Investor Class | I Class | A Class | R Class | R6 Class | G Class | ||||||||||||
1.10% | 0.90% | 1.35% | 1.60% | 0.75% | 0.75% |
The total annual fund operating expenses shown is as stated in the fund’s prospectus current as of the date of this report. The prospectus may vary from the expense ratio shown elsewhere in this report because it is based on a different time period, includes acquired fund fees and expenses, and, if applicable, does not include fee waivers or expense reimbursements.
Data presented reflect past performance. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance shown. Total returns for periods less than one year are not annualized. Investment return and principal value will fluctuate, and redemption value may be more or less than original cost. Data assumes reinvestment of dividends and capital gains, and none of the charts reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. To obtain performance data current to the most recent month end, please call 1-800-345-2021 or visit americancentury.com. For additional information about the fund, please consult the prospectus.
4
Portfolio Commentary |
Portfolio Managers: Jeff John and Ryan Cope
Performance Summary
Small Cap Dividend returned 13.27%* for the 12-month period ended March 31, 2024. The fund’s benchmark, the Russell 2000 Value Index, returned 18.75% for the same time period. The fund’s return reflects operating expenses, while the index’s return does not.
Performance versus the benchmark was hampered primarily by poor security selection in the communication services, energy and health care sectors. On the other hand, selections in the consumer staples and utilities sectors and underweights in utilities and real estate sectors added to performance.
Communication Services, Energy and Health Care Detracted
Unfavorable stock selection was the primary contributor to the fund’s underperformance. In the communication services sector, Entravision Communications, a media company that serves Hispanic markets, was the leading detractor. Meta Platforms said it would no longer partner with the company for Facebook’s advertising efforts. Shares of Cable One, a broadband provider that is not in the benchmark, declined steadily through the period as competition from rivals intensified.
In the energy sector, two positions that are not in the benchmark detracted. Enviva, a biomass producer, was the primary driver of underperformance. Shares declined as earnings fell materially short of investor expectations and the company terminated its dividend in an effort to preserve capital. We exited our position in Enviva by the end of the period. Also, TXO Partners, a master limited partnership that owns low-decline, conventional-producing oil and gas assets in the Permian and San Juan basins, underperformed along with the broader energy sector.
In the health care sector, performance suffered primarily as a result of exposure to Embecta. This maker of pen needles and syringes for diabetics declined on concerns about the potential effect of new weight-loss drugs on revenues.
Consumer Staples, Utilities and Real Estate Contributed
In the consumer staples sector, stock selection was the primary driver. Shares of Spectrum Brands Holdings, a household goods company, gained on the sale of the hardware and home improvement business and from a plan to use proceeds to pay down debt and buy back shares. WK Kellogg, which was spun off from Kellogg’s late in 2023, also contributed. Shares benefited from improving profit margins and from guidance that exceeded Street estimates.
In utilities, stock selection drove results, but an underweight to this lagging sector also added to performance. A lack of exposure to two gas utilities was a leading driver. Brookfield Infrastructure reported weaker-than-expected financial results, while for ONE Gas, cost inflation and debt refinancing at higher interest rates led to guidance for 2024 that was below Street expectations. In real estate, an underweight was the primary driver, while selection decisions in the hotel and resort REITs industry and the health care REITs industry also contributed.
*All fund returns referenced in this commentary are for Investor Class shares. Performance for other share classes will vary due to differences in fee structure; when Investor Class performance exceeds that of the fund’s benchmark, other share classes may not. See page 3 for returns for all share classes.
5
Fund Characteristics |
MARCH 31, 2024 | |||||
Types of Investments in Portfolio | % of net assets | ||||
Common Stocks | 96.5% | ||||
Preferred Stocks | 1.2% | ||||
Convertible Bonds | 0.1% | ||||
Short-Term Investments | 2.5% | ||||
Other Assets and Liabilities | (0.3)% | ||||
Top Five Industries | % of net assets | ||||
Banks | 20.1% | ||||
Machinery | 7.7% | ||||
Oil, Gas and Consumable Fuels | 6.7% | ||||
Financial Services | 5.8% | ||||
Insurance | 4.9% |
6
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 October 1, 2023 to March 31, 2024.
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 mutual fund, or I Class shares of the American Century Diversified Bond Fund, in an American Century Investments account (i.e., not through a financial intermediary or employer-sponsored retirement plan account), American Century Investments may charge you a $25 annual account maintenance fee if the value of those shares is less than $10,000. We will redeem shares automatically in one of your accounts to pay the $25 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.
7
Beginning Account Value 10/1/23 | Ending Account Value 3/31/24 | Expenses Paid During Period(1) 10/1/23 - 3/31/24 | Annualized Expense Ratio(1) | |||||||||||
Actual | ||||||||||||||
Investor Class | $1,000 | $1,170.60 | $5.97 | 1.10% | ||||||||||
I Class | $1,000 | $1,172.90 | $4.89 | 0.90% | ||||||||||
A Class | $1,000 | $1,169.10 | $7.32 | 1.35% | ||||||||||
R Class | $1,000 | $1,169.00 | $8.68 | 1.60% | ||||||||||
R6 Class | $1,000 | $1,173.70 | $4.08 | 0.75% | ||||||||||
G Class | $1,000 | $1,178.00 | $0.00 | 0.00%(2) | ||||||||||
Hypothetical | ||||||||||||||
Investor Class | $1,000 | $1,019.50 | $5.55 | 1.10% | ||||||||||
I Class | $1,000 | $1,020.50 | $4.55 | 0.90% | ||||||||||
A Class | $1,000 | $1,018.25 | $6.81 | 1.35% | ||||||||||
R Class | $1,000 | $1,017.00 | $8.07 | 1.60% | ||||||||||
R6 Class | $1,000 | $1,021.25 | $3.79 | 0.75% | ||||||||||
G Class | $1,000 | $1,025.00 | $0.00 | 0.00%(2) |
(1)Expenses are equal to the class's annualized expense ratio listed in the table above, multiplied by the average account value over the period, multiplied by 183, the number of days in the most recent fiscal half-year, divided by 366, to reflect the one-half year period. Annualized expense ratio reflects actual expenses, including any applicable fee waivers or expense reimbursements and excluding any acquired fund fees and expenses.
(2)Other expenses did not exceed 0.005%.
8
Schedule of Investments |
MARCH 31, 2024
Shares/Principal Amount | Value | ||||||||||
COMMON STOCKS — 96.5% | |||||||||||
Aerospace and Defense — 1.5% | |||||||||||
Leonardo DRS, Inc.(1) | 1,600 | $ | 35,344 | ||||||||
Park Aerospace Corp. | 5,489 | 91,282 | |||||||||
126,626 | |||||||||||
Banks — 20.1% | |||||||||||
City Holding Co. | 316 | 32,934 | |||||||||
Columbia Banking System, Inc. | 7,697 | 148,937 | |||||||||
CVB Financial Corp. | 6,822 | 121,704 | |||||||||
Financial Institutions, Inc. | 1,880 | 35,382 | |||||||||
First Interstate BancSystem, Inc., Class A | 4,502 | 122,499 | |||||||||
First Merchants Corp. | 1,000 | 34,900 | |||||||||
FNB Corp. | 13,674 | 192,803 | |||||||||
Home BancShares, Inc. | 7,569 | 185,970 | |||||||||
Old National Bancorp | 7,694 | 133,953 | |||||||||
Pacific Premier Bancorp, Inc. | 4,986 | 119,664 | |||||||||
Popular, Inc. | 2,184 | 192,389 | |||||||||
Provident Financial Services, Inc. | 2,667 | 38,858 | |||||||||
United Bankshares, Inc. | 3,626 | 129,775 | |||||||||
Valley National Bancorp | 3,689 | 29,364 | |||||||||
Webster Financial Corp. | 3,797 | 192,774 | |||||||||
1,711,906 | |||||||||||
Building Products — 2.9% | |||||||||||
Fortune Brands Innovations, Inc. | 751 | 63,587 | |||||||||
Tecnoglass, Inc. | 3,535 | 183,926 | |||||||||
247,513 | |||||||||||
Capital Markets — 2.0% | |||||||||||
Carlyle Group, Inc. | 1,199 | 56,245 | |||||||||
Patria Investments Ltd., Class A | 7,891 | 117,102 | |||||||||
173,347 | |||||||||||
Chemicals — 1.6% | |||||||||||
Avient Corp. | 2,360 | 102,424 | |||||||||
Mativ Holdings, Inc. | 1,733 | 32,494 | |||||||||
134,918 | |||||||||||
Commercial Services and Supplies — 1.9% | |||||||||||
Brink's Co. | 1,715 | 158,432 | |||||||||
Construction and Engineering — 1.0% | |||||||||||
Shimmick Corp.(1) | 14,265 | 82,166 | |||||||||
Containers and Packaging — 4.4% | |||||||||||
Graphic Packaging Holding Co. | 8,630 | 251,823 | |||||||||
Sonoco Products Co. | 2,097 | 121,291 | |||||||||
373,114 | |||||||||||
Diversified Consumer Services — 0.6% | |||||||||||
H&R Block, Inc. | 1,016 | 49,896 | |||||||||
Electric Utilities — 1.2% | |||||||||||
ALLETE, Inc. | 1,727 | 102,998 |
9
Shares/Principal Amount | Value | ||||||||||
Electronic Equipment, Instruments and Components — 3.4% | |||||||||||
Avnet, Inc. | 3,035 | $ | 150,475 | ||||||||
Vishay Intertechnology, Inc. | 6,234 | 141,387 | |||||||||
291,862 | |||||||||||
Energy Equipment and Services — 2.6% | |||||||||||
ChampionX Corp. | 6,258 | 224,600 | |||||||||
Financial Services — 4.6% | |||||||||||
Compass Diversified Holdings | 5,524 | 132,963 | |||||||||
Enact Holdings, Inc. | 1,786 | 55,687 | |||||||||
EVERTEC, Inc. | 5,112 | 203,969 | |||||||||
392,619 | |||||||||||
Food Products — 0.8% | |||||||||||
WK Kellogg Co. | 3,493 | 65,668 | |||||||||
Gas Utilities — 1.1% | |||||||||||
Southwest Gas Holdings, Inc. | 1,213 | 92,346 | |||||||||
Health Care Equipment and Supplies — 1.7% | |||||||||||
Embecta Corp. | 7,542 | 100,082 | |||||||||
Utah Medical Products, Inc. | 606 | 43,093 | |||||||||
143,175 | |||||||||||
Health Care Providers and Services — 1.1% | |||||||||||
Patterson Cos., Inc. | 3,438 | 95,061 | |||||||||
Health Care REITs — 1.8% | |||||||||||
American Healthcare REIT, Inc. | 3,703 | 54,619 | |||||||||
CareTrust REIT, Inc. | 4,028 | 98,163 | |||||||||
152,782 | |||||||||||
Hotel & Resort REITs — 1.2% | |||||||||||
Ryman Hospitality Properties, Inc. | 871 | 100,696 | |||||||||
Hotels, Restaurants and Leisure — 0.7% | |||||||||||
Red Rock Resorts, Inc., Class A | 1,006 | 60,179 | |||||||||
Household Products — 2.0% | |||||||||||
Spectrum Brands Holdings, Inc. | 1,930 | 171,789 | |||||||||
Industrial REITs — 1.3% | |||||||||||
Terreno Realty Corp. | 1,697 | 112,681 | |||||||||
Insurance — 4.9% | |||||||||||
Axis Capital Holdings Ltd. | 3,158 | 205,333 | |||||||||
Fidelis Insurance Holdings Ltd. | 2,873 | 55,966 | |||||||||
Hamilton Insurance Group Ltd., Class B(1) | 1,816 | 25,297 | |||||||||
RenaissanceRe Holdings Ltd. | 559 | 131,382 | |||||||||
417,978 | |||||||||||
Leisure Products — 1.8% | |||||||||||
Brunswick Corp. | 880 | 84,938 | |||||||||
Polaris, Inc. | 720 | 72,086 | |||||||||
157,024 | |||||||||||
Machinery — 7.7% | |||||||||||
Atmus Filtration Technologies, Inc.(1) | 5,330 | 171,893 | |||||||||
Hurco Cos., Inc. | 740 | 14,918 | |||||||||
IMI PLC | 2,856 | 65,427 | |||||||||
Kennametal, Inc. | 3,704 | 92,378 | |||||||||
Luxfer Holdings PLC | 12,631 | 130,984 | |||||||||
Timken Co. | 2,056 | 179,756 | |||||||||
655,356 |
10
Shares/Principal Amount | Value | ||||||||||
Media — 3.4% | |||||||||||
Cable One, Inc. | 290 | $ | 122,708 | ||||||||
Entravision Communications Corp., Class A | 26,756 | 43,880 | |||||||||
John Wiley & Sons, Inc., Class A | 3,109 | 118,546 | |||||||||
285,134 | |||||||||||
Multi-Utilities — 0.7% | |||||||||||
Northwestern Energy Group, Inc. | 1,224 | 62,338 | |||||||||
Oil, Gas and Consumable Fuels — 6.7% | |||||||||||
Chord Energy Corp. | 728 | 129,759 | |||||||||
Hess Midstream LP, Class A | 4,040 | 145,965 | |||||||||
Mach Natural Resources LP | 5,423 | 104,664 | |||||||||
TXO Partners LP | 10,428 | 187,182 | |||||||||
567,570 | |||||||||||
Professional Services — 1.8% | |||||||||||
Public Policy Holding Co., Inc. | 35,615 | 51,023 | |||||||||
Science Applications International Corp. | 757 | 98,705 | |||||||||
149,728 | |||||||||||
Residential REITs — 0.9% | |||||||||||
UMH Properties, Inc. | 4,913 | 79,787 | |||||||||
Retail REITs — 0.4% | |||||||||||
Kite Realty Group Trust | 1,590 | 34,471 | |||||||||
Semiconductors and Semiconductor Equipment — 1.6% | |||||||||||
Kulicke & Soffa Industries, Inc. | 2,686 | 135,133 | |||||||||
Specialty Retail — 1.4% | |||||||||||
Penske Automotive Group, Inc. | 746 | 120,844 | |||||||||
Textiles, Apparel and Luxury Goods — 2.7% | |||||||||||
Ralph Lauren Corp. | 316 | 59,332 | |||||||||
Tapestry, Inc. | 3,629 | 172,305 | |||||||||
231,637 | |||||||||||
Tobacco — 0.9% | |||||||||||
Turning Point Brands, Inc. | 2,479 | 72,635 | |||||||||
Trading Companies and Distributors — 2.1% | |||||||||||
Applied Industrial Technologies, Inc. | 611 | 120,703 | |||||||||
Karat Packaging, Inc. | 1,954 | 55,904 | |||||||||
176,607 | |||||||||||
TOTAL COMMON STOCKS (Cost $7,263,903) | 8,210,616 | ||||||||||
PREFERRED STOCKS — 1.2% | |||||||||||
Financial Services — 1.2% | |||||||||||
Compass Diversified Holdings, 7.875% (Cost $93,349) | 3,848 | 96,970 | |||||||||
CONVERTIBLE BONDS — 0.1% | |||||||||||
Building Products — 0.1% | |||||||||||
DIRTT Environmental Solutions, 6.00%, 1/31/26 (Cost $13,406) | CAD | 19,000 | 9,805 | ||||||||
SHORT-TERM INVESTMENTS — 2.5% | |||||||||||
Money Market Funds — 2.5% | |||||||||||
State Street Institutional U.S. Government Money Market Fund, Premier Class (Cost $210,828) | 210,828 | 210,828 | |||||||||
TOTAL INVESTMENT SECURITIES — 100.3% (Cost $7,581,486) | 8,528,219 | ||||||||||
OTHER ASSETS AND LIABILITIES — (0.3)% | (21,825) | ||||||||||
TOTAL NET ASSETS — 100.0% | $ | 8,506,394 |
11
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS | ||||||||||||||||||||
Currency Purchased | Currency Sold | Counterparty | Settlement Date | Unrealized Appreciation (Depreciation) | ||||||||||||||||
USD | 98,110 | GBP | 77,531 | Morgan Stanley | 6/28/24 | $ | 210 |
NOTES TO SCHEDULE OF INVESTMENTS | ||||||||
CAD | – | Canadian Dollar | ||||||
GBP | – | British Pound | ||||||
USD | – | United States Dollar |
(1)Non-income producing.
See Notes to Financial Statements.
12
Statement of Assets and Liabilities |
MARCH 31, 2024 | |||||
Assets | |||||
Investment securities, at value (cost of $7,581,486) | $ | 8,528,219 | |||
Cash | 2,854 | ||||
Receivable for capital shares sold | 391 | ||||
Unrealized appreciation on forward foreign currency exchange contracts | 210 | ||||
Dividends and interest receivable | 12,892 | ||||
Securities lending receivable | 1,994 | ||||
8,546,560 | |||||
Liabilities | |||||
Payable for investments purchased | 31,448 | ||||
Payable for capital shares redeemed | 1,995 | ||||
Accrued management fees | 6,632 | ||||
Distribution and service fees payable | 91 | ||||
40,166 | |||||
Net Assets | $ | 8,506,394 | |||
Net Assets Consist of: | |||||
Capital (par value and paid-in surplus) | $ | 7,646,865 | |||
Distributable earnings (loss) | 859,529 | ||||
$ | 8,506,394 |
Net Assets | Shares Outstanding | Net Asset Value Per Share* | |||||||||
Investor Class, $0.01 Par Value | $3,784,926 | 370,235 | $10.22 | ||||||||
I Class, $0.01 Par Value | $4,334,091 | 423,698 | $10.23 | ||||||||
A Class, $0.01 Par Value | $114,709 | 11,219 | $10.22 | ||||||||
R Class, $0.01 Par Value | $162,429 | 15,884 | $10.23 | ||||||||
R6 Class, $0.01 Par Value | $82,848 | 8,102 | $10.23 | ||||||||
G Class, $0.01 Par Value | $27,391 | 2,677 | $10.23 |
*Maximum offering price per share was equal to the net asset value per share for all share classes, except A Class, for which the maximum offering price per share was $10.84 (net asset value divided by 0.9425). A contingent deferred sales charge may be imposed on redemptions of A Class.
See Notes to Financial Statements.
13
Statement of Operations |
YEAR ENDED MARCH 31, 2024 | |||||
Investment Income (Loss) | |||||
Income: | |||||
Dividends (net of foreign taxes withheld of $468) | $ | 203,040 | |||
Interest | 10,128 | ||||
Securities lending, net | 4,083 | ||||
217,251 | |||||
Expenses: | |||||
Management fees | 64,529 | ||||
Distribution and service fees: | |||||
A Class | 118 | ||||
R Class | 705 | ||||
Directors' fees and expenses | 219 | ||||
Other expenses | 3,287 | ||||
68,858 | |||||
Fees waived - G Class | (181) | ||||
68,677 | |||||
Net investment income (loss) | 148,574 | ||||
Realized and Unrealized Gain (Loss) | |||||
Net realized gain (loss) on: | |||||
Investment transactions | (29,697) | ||||
Forward foreign currency exchange contract transactions | (943) | ||||
Foreign currency translation transactions | (88) | ||||
(30,728) | |||||
Change in net unrealized appreciation (depreciation) on: | |||||
Investments | 956,198 | ||||
Forward foreign currency exchange contracts | 488 | ||||
Translation of assets and liabilities in foreign currencies | 2 | ||||
956,688 | |||||
Net realized and unrealized gain (loss) | 925,960 | ||||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 1,074,534 |
See Notes to Financial Statements.
14
Statement of Changes in Net Assets |
YEAR ENDED MARCH 31, 2024 AND PERIOD ENDED MARCH 31, 2023 | ||||||||
Increase (Decrease) in Net Assets | March 31, 2024 | March 31, 2023(1) | ||||||
Operations | ||||||||
Net investment income (loss) | $ | 148,574 | $ | 46,746 | ||||
Net realized gain (loss) | (30,728) | (62,272) | ||||||
Change in net unrealized appreciation (depreciation) | 956,688 | (9,746) | ||||||
Net increase (decrease) in net assets resulting from operations | 1,074,534 | (25,272) | ||||||
Distributions to Shareholders | ||||||||
From earnings: | ||||||||
Investor Class | (58,593) | (47,865) | ||||||
I Class | (73,583) | (730) | ||||||
A Class | (706) | (588) | ||||||
R Class | (2,091) | (1,361) | ||||||
R6 Class | (1,344) | (1,030) | ||||||
G Class | (756) | (886) | ||||||
Decrease in net assets from distributions | (137,073) | (52,460) | ||||||
Capital Share Transactions | ||||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | 1,338,031 | 6,308,634 | ||||||
Net increase (decrease) in net assets | 2,275,492 | 6,230,902 | ||||||
Net Assets | ||||||||
Beginning of period | 6,230,902 | — | ||||||
End of period | $ | 8,506,394 | $ | 6,230,902 |
(1)April 5, 2022 (fund inception) through March 31, 2023.
See Notes to Financial Statements.
15
Notes to Financial Statements |
MARCH 31, 2024
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. Small Cap Dividend Fund (the fund) is one fund in a series issued by the corporation. The fund’s investment objective is to seek long-term capital growth. Income is a secondary objective.
The fund offers the Investor Class, I Class, A Class, R Class, R6 Class and G Class. The A Class may incur an initial sales charge and may be subject to a contingent deferred sales charge. All classes of the fund commenced sale on April 5, 2022, the fund's inception date.
2. Significant Accounting Policies
The following is a summary of significant accounting policies consistently followed by the fund in preparation of its financial statements. The fund is an investment company and follows accounting and reporting guidance in accordance with accounting principles generally accepted in the United States of America. This may require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from these estimates. Management evaluated the impact of events or transactions occurring through the date the financial statements were issued that would merit recognition or disclosure.
Investment Valuations — The fund determines the fair value of its investments and computes its net asset value (NAV) per share at the close of regular trading (usually 4 p.m. Eastern time) on the New York Stock Exchange (NYSE) on each day the NYSE is open. The value of investments of the fund is determined by American Century Investment Management, Inc. (ACIM) (the investment advisor), as the valuation designee, pursuant to its valuation policies and procedures. The Board of Directors oversees the valuation designee and reviews its valuation policies and procedures at least annually.
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.
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. Convertible bonds 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.
Hybrid 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. Preferred stocks and convertible preferred stocks with perpetual maturities 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.
Open-end management investment companies are valued at the reported NAV per share. Repurchase agreements are valued at cost, which approximates fair value. 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.
16
If the valuation designee determines that the market price for a portfolio security is not readily available or is believed by the valuation designee to be unreliable, such security is valued at fair value as determined in good faith by the valuation designee, in accordance with its policies and procedures. Circumstances that may cause the fund to determine that market quotations are not available or reliable include, but are not limited to: when there is a significant event subsequent to the market quotation; trading in a security has been halted during the trading day; or trading in a security is insufficient or did not take place due to a closure or holiday.
The valuation designee monitors for significant events occurring after the close of an investment’s primary exchange but before the fund’s NAV per share is determined. Significant events may include, but are not limited to: corporate announcements and transactions; regulatory news, 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 valuation designee also monitors for significant fluctuations between domestic and foreign markets, as evidenced by the U.S. market or such other indicators that it deems appropriate. The valuation designee 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.
Foreign Currency Translations — All assets and liabilities, including investment securities and other financial instruments, initially expressed in foreign currencies are translated into U.S. dollars each day at the mean of the appropriate currency exchange rate at the close of the NYSE as provided by an independent pricing service. 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.
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. For convertible bonds, the premiums attributable only to the debt instrument are amortized. Securities lending income is net of fees and rebates earned by the lending agent for its services.
Repurchase Agreements — The fund may enter into repurchase agreements with institutions that ACIM has determined are creditworthy pursuant to criteria adopted by the Board of Directors. The fund requires that the collateral, represented by securities, received in a repurchase transaction be transferred to the custodian in a manner sufficient to enable the fund to obtain those securities in the event of a default under the repurchase agreement. ACIM monitors, on a daily basis, the securities transferred to ensure the value, including accrued interest, of the securities under each repurchase agreement is equal to or greater than amounts owed to the fund under each repurchase agreement.
Joint Trading Account — Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the fund, along with certain other funds in the American Century Investments family of funds, may transfer uninvested cash balances into a joint trading account. These balances are invested in one or more repurchase agreements that are collateralized by U.S. Treasury or Agency obligations.
Income Tax Status — It is the fund's policy to distribute substantially all net investment income and net realized gains to shareholders and to otherwise qualify as a regulated investment company under provisions of the Internal Revenue Code. Accordingly, no provision has been made for income taxes. The fund files U.S. federal, state, local and non-U.S. tax returns as applicable. The fund's tax returns are subject to examination by the relevant taxing authority until expiration of the applicable statute of limitations, which is generally three years from the date of filing but can be longer in certain jurisdictions. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination and for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
17
Multiple Class — All shares of the fund represent an equal pro rata interest in the net assets of the class to which such shares belong, and have identical voting, dividend, liquidation and other rights and the same terms and conditions, except for class specific expenses and exclusive rights to vote on matters affecting only individual classes. Income, non-class specific expenses, and realized and unrealized capital gains and losses of the fund are allocated to each class of shares based on their relative net assets.
Distributions to Shareholders — Distributions from net investment income, 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.
Securities Lending — Securities are lent to qualified financial institutions and brokers. State Street Bank & Trust Co. serves as securities lending agent to the fund pursuant to a Securities Lending Agreement. The lending of securities exposes the fund to risks such as: the borrowers may fail to return the loaned securities, the borrowers may not be able to provide additional collateral, the fund may experience delays in recovery of the loaned securities or delays in access to collateral, or the fund may experience losses related to the investment collateral. To minimize certain risks, loan counterparties pledge collateral in the form of cash and/or securities. The lending agent has agreed to indemnify the fund in the case of default of any securities borrowed. Cash collateral received is invested in the State Street Navigator Securities Lending Government Money Market Portfolio, a money market mutual fund registered under the 1940 Act. The loans may also be secured by U.S. government securities in an amount at least equal to the market value of the securities loaned, plus accrued interest and dividends, determined on a daily basis and adjusted accordingly. By lending securities, the fund seeks to increase its net investment income through the receipt of interest and fees. Such income is reflected separately within the Statement of Operations. The value of loaned securities and related collateral outstanding at period end, if any, are shown on a gross basis within the Schedule of Investments and Statement of Assets and Liabilities.
3. Fees and Transactions with Related Parties
Certain officers and directors of the corporation are also officers and/or directors of American Century Companies, Inc. (ACC). The corporation's investment advisor, ACIM, the corporation's distributor, American Century Investment Services, Inc. (ACIS), and the corporation's transfer agent, American Century Services, LLC, are wholly owned, directly or indirectly, by ACC. ACIM owns 13% of the shares of the fund.
Management Fees — The corporation has entered into a management agreement with ACIM, under which ACIM provides the fund with investment advisory and management services in exchange for a single, unified management fee (the fee) per class. The agreement provides that ACIM will pay all expenses of managing and operating the fund, except brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), extraordinary expenses, and expenses incurred in connection with the provision of shareholder services and distribution services under a plan adopted pursuant to Rule 12b-1 under the 1940 Act. The fee is computed and accrued daily based on each class's daily net assets and paid monthly in arrears. The difference in the fee among the classes is a result of their separate arrangements for non-Rule 12b-1 shareholder services. It is not the result of any difference in advisory or custodial fees or other expenses related to the management of the fund’s assets, which do not vary by class. The investment advisor agreed to waive the G Class's management fee in its entirety. The investment advisor expects this waiver to remain in effect permanently and cannot terminate it without the approval of the Board of Directors.
The annual management fee for each class is as follows:
Investor Class | I Class | A Class | R Class | R6 Class | G Class | ||||||||||||
1.09% | 0.89% | 1.09% | 1.09% | 0.74% | 0.00%(1) |
(1)Annual management fee before waiver was 0.74%.
18
Distribution and Service Fees — The Board of Directors has adopted a separate Master Distribution and Individual Shareholder Services Plan for each of the A Class and R Class (collectively the plans), pursuant to Rule 12b-1 of the 1940 Act. The plans provide that the A Class will pay ACIS an annual distribution and service fee of 0.25%. The plans provide that the R Class will pay ACIS an annual distribution and service fee of 0.50%. The fees are computed and accrued daily based on each class’s daily net assets and paid monthly in arrears. The fees are used to pay financial intermediaries for distribution and individual shareholder services. Fees incurred under the plans during the period ended March 31, 2024 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.
Other Expenses — A fund’s other expenses may include interest charges, clearing exchange fees, proxy solicitation expenses, fees associated with the recovery of foreign tax reclaims and other miscellaneous expenses.
Interfund Transactions — The fund may enter into security transactions with other American Century Investments funds and other client accounts of the investment advisor, in accordance with the 1940 Act rules and procedures adopted by the Board of Directors. The rules and procedures require, among other things, that these transactions be effected at the independent current market price of the security. There were no interfund transactions during the period.
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the period ended March 31, 2024 were $8,014,883 and $6,761,157, respectively.
19
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Year ended March 31, 2024 | Period ended March 31, 2023(1) | |||||||||||||
Shares | Amount | Shares | Amount | |||||||||||
Investor Class/Shares Authorized | 20,000,000 | 20,000,000 | ||||||||||||
Sold | 169,707 | $ | 1,591,850 | 351,045 | $ | 3,386,267 | ||||||||
Issued in reinvestment of distributions | 6,099 | 57,844 | 5,220 | 47,546 | ||||||||||
Redeemed | (88,474) | (826,367) | (73,362) | (675,248) | ||||||||||
87,332 | 823,327 | 282,903 | 2,758,565 | |||||||||||
I Class/Shares Authorized | 20,000,000 | 20,000,000 | ||||||||||||
Sold | 424,424 | 3,997,389 | 371,699 | 3,331,728 | ||||||||||
Issued in reinvestment of distributions | 7,776 | 73,583 | 80 | 730 | ||||||||||
Redeemed | (379,981) | (3,695,719) | (300) | (2,760) | ||||||||||
52,219 | 375,253 | 371,479 | 3,329,698 | |||||||||||
A Class/Shares Authorized | 20,000,000 | 20,000,000 | ||||||||||||
Sold | 8,581 | 78,274 | 2,500 | 25,000 | ||||||||||
Issued in reinvestment of distributions | 73 | 706 | 65 | 588 | ||||||||||
8,654 | 78,980 | 2,565 | 25,588 | |||||||||||
R Class/Shares Authorized | 20,000,000 | 20,000,000 | ||||||||||||
Sold | 14,785 | 139,244 | 19,540 | 187,164 | ||||||||||
Issued in reinvestment of distributions | 221 | 2,091 | 149 | 1,361 | ||||||||||
Redeemed | (12,567) | (116,182) | (6,244) | (58,335) | ||||||||||
2,439 | 25,153 | 13,445 | 130,190 | |||||||||||
R6 Class/Shares Authorized | 20,000,000 | 20,000,000 | ||||||||||||
Sold | 6,506 | 57,320 | 3,935 | 38,710 | ||||||||||
Issued in reinvestment of distributions | 140 | 1,344 | 113 | 1,030 | ||||||||||
Redeemed | (2,471) | (24,102) | (121) | (1,033) | ||||||||||
4,175 | 34,562 | 3,927 | 38,707 | |||||||||||
G Class/Shares Authorized | 20,000,000 | 20,000,000 | ||||||||||||
Sold | — | — | 2,500 | 25,000 | ||||||||||
Issued in reinvestment of distributions | 80 | 756 | 97 | 886 | ||||||||||
80 | 756 | 2,597 | 25,886 | |||||||||||
Net increase (decrease) | 154,899 | $ | 1,338,031 | 676,916 | $ | 6,308,634 |
(1)April 5, 2022 (fund inception) through March 31, 2023.
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.
20
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 | $ | 8,094,166 | $ | 116,450 | — | ||||||
Preferred Stocks | 96,970 | — | — | ||||||||
Convertible Bonds | — | 9,805 | — | ||||||||
Short-Term Investments | 210,828 | — | — | ||||||||
$ | 8,401,964 | $ | 126,255 | — | |||||||
Other Financial Instruments | |||||||||||
Forward Foreign Currency Exchange Contracts | — | $ | 210 | — |
7. Derivative Instruments
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. A fund will segregate cash, cash equivalents or other appropriate liquid securities on its records in amounts sufficient to meet requirements. 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 settlement 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 $94,578.
The value of foreign currency risk derivative instruments as of March 31, 2024, is disclosed on the Statement of Assets and Liabilities as an asset of $210 in unrealized appreciation on forward foreign currency exchange contracts. For the year ended March 31, 2024, the effect of foreign currency risk derivative instruments on the Statement of Operations was $(943) in net realized gain (loss) on forward foreign currency exchange contract transactions and $488 in change in net unrealized appreciation (depreciation) on forward foreign currency exchange contracts.
8. Risk Factors
The value of the fund’s shares will go up and down, sometimes rapidly or unpredictably, based on the performance of the securities owned by the fund and other factors generally affecting the securities market. Market risks, including political, regulatory, economic and social developments, can affect the value of the fund’s investments. Natural disasters, public health emergencies, war, terrorism and other unforeseeable events may lead to increased market volatility and may have adverse long-term effects on world economies and markets generally.
The fund invests in common stocks of small companies. Because of this, the fund may be subject to greater risk and market fluctuations than a fund investing in larger, more established companies.
The fund's investment process may result in high portfolio turnover, which could mean high transaction costs, affecting both performance and capital gains tax liabilities to investors.
21
9. Federal Tax Information
The tax character of distributions paid during the year ended March 31, 2024 and the period ended April 5, 2022 (fund inception) through March 31, 2023 were as follows:
2024 | 2023 | |||||||
Distributions Paid From | ||||||||
Ordinary income | $ | 137,073 | $ | 52,460 | ||||
Long-term capital gains | — | — |
The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
As of period end, the federal tax cost of investments and the components of distributable earnings on a tax-basis were as follows:
Federal tax cost of investments | $ | 7,734,976 | |||
Gross tax appreciation of investments | $ | 1,080,531 | |||
Gross tax depreciation of investments | (287,288) | ||||
Net tax appreciation (depreciation) of investments | 793,243 | ||||
Net tax appreciation (depreciation) on derivatives and translation of assets and liabilities in foreign currencies | (1) | ||||
Net tax appreciation (depreciation) | $ | 793,242 | |||
Undistributed ordinary income | $ | 66,287 |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales.
22
Financial Highlights |
For a Share Outstanding Throughout the Years Ended March 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 | |||||||||||||||||||||||||||||||||||||||||||||||
2024 | $9.20 | 0.20 | 1.00 | 1.20 | (0.18) | — | (0.18) | $10.22 | 13.27% | 1.14% | 1.14% | 2.17% | 2.17% | 102% | $3,785 | ||||||||||||||||||||||||||||||||
2023(3) | $10.00 | 0.23 | (0.78) | (0.55) | (0.20) | (0.05) | (0.25) | $9.20 | (5.40)% | 1.10% | 1.10% | 2.52% | 2.52% | 54% | $2,604 | ||||||||||||||||||||||||||||||||
I Class | |||||||||||||||||||||||||||||||||||||||||||||||
2024 | $9.21 | 0.22 | 1.00 | 1.22 | (0.20) | — | (0.20) | $10.23 | 13.60% | 0.94% | 0.94% | 2.37% | 2.37% | 102% | $4,334 | ||||||||||||||||||||||||||||||||
2023(3) | $10.00 | 0.46 | (0.98) | (0.52) | (0.22) | (0.05) | (0.27) | $9.21 | (5.22)% | 0.90% | 0.90% | 2.72% | 2.72% | 54% | $3,420 | ||||||||||||||||||||||||||||||||
A Class | |||||||||||||||||||||||||||||||||||||||||||||||
2024 | $9.20 | 0.20 | 0.98 | 1.18 | (0.16) | — | (0.16) | $10.22 | 12.99% | 1.39% | 1.39% | 1.92% | 1.92% | 102% | $115 | ||||||||||||||||||||||||||||||||
2023(3) | $10.00 | 0.19 | (0.76) | (0.57) | (0.18) | (0.05) | (0.23) | $9.20 | (5.62)% | 1.35% | 1.35% | 2.27% | 2.27% | 54% | $24 | ||||||||||||||||||||||||||||||||
R Class | |||||||||||||||||||||||||||||||||||||||||||||||
2024 | $9.20 | 0.16 | 1.01 | 1.17 | (0.14) | — | (0.14) | $10.23 | 12.83% | 1.64% | 1.64% | 1.67% | 1.67% | 102% | $162 | ||||||||||||||||||||||||||||||||
2023(3) | $10.00 | 0.20 | (0.79) | (0.59) | (0.16) | (0.05) | (0.21) | $9.20 | (5.85)% | 1.60% | 1.60% | 2.02% | 2.02% | 54% | $124 | ||||||||||||||||||||||||||||||||
R6 Class | |||||||||||||||||||||||||||||||||||||||||||||||
2024 | $9.21 | 0.24 | 1.00 | 1.24 | (0.22) | — | (0.22) | $10.23 | 13.77% | 0.79% | 0.79% | 2.52% | 2.52% | 102% | $83 | ||||||||||||||||||||||||||||||||
2023(3) | $10.00 | 0.25 | (0.76) | (0.51) | (0.23) | (0.05) | (0.28) | $9.21 | (5.08)% | 0.75% | 0.75% | 2.87% | 2.87% | 54% | $36 |
For a Share Outstanding Throughout the Years Ended March 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) | |||||||||||||||||||||||||||||||||
G Class | |||||||||||||||||||||||||||||||||||||||||||||||
2024 | $9.21 | 0.31 | 1.00 | 1.31 | (0.29) | — | (0.29) | $10.23 | 14.49% | 0.05% | 0.79% | 3.26% | 2.52% | 102% | $27 | ||||||||||||||||||||||||||||||||
2023(3) | $10.00 | 0.31 | (0.75) | (0.44) | (0.30) | (0.05) | (0.35) | $9.21 | (4.31)% | 0.01% | 0.75% | 3.61% | 2.87% | 54% | $24 |
Notes to Financial Highlights |
(1)Computed using average shares outstanding throughout the period.
(2)Total returns are calculated based on the net asset value of the last business day and do not reflect applicable sales charges, if any. Total returns for periods less than one year are not annualized.
(3)April 5, 2022 (fund inception) through March 31, 2023.
*The amount shown for a share outstanding throughout the period may not correlate with the Statement(s) of Operations or precisely reflect the class expense differentials due to the timing of transactions in shares of a fund in relation to income earned and/or fluctuations in the fair value of a fund's investments.
†Ratios for periods less than one year are annualized. Zero balances may reflect amounts less than 0.005%.
See Notes to Financial Statements.
Report of Independent Registered Public Accounting Firm |
To the shareholders of the Small Cap Dividend Fund and the Board of Directors of American Century Capital Portfolios, Inc.
Opinion on the Financial Statements and Financial Highlights
We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of Small Cap Dividend Fund (the “Fund”), one of the funds constituting the American Century Capital Portfolios, Inc., as of March 31, 2024, the related statement of operations for the year then ended, the statements of changes in net assets and the financial highlights for the year ended March 31, 2024, and for the period from April 5, 2022 (fund inception) through March 31, 2023, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Fund as of March 31, 2024, and the results of its operations for the year then ended, and the changes in its net assets and the financial highlights for the year ended March 31, 2024, and for the period from April 5, 2022 (fund inception) through March 31, 2023, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on the Fund’s financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. Our procedures included confirmation of securities owned as of March 31, 2024, by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
/s/ Deloitte & Touche LLP
Kansas City, Missouri
May 16, 2024
We have served as the auditor of one or more American Century investment companies since 1997.
25
Management |
The Board of Directors
The individuals listed below serve as directors of the funds. Each director will continue to serve in this capacity until death, retirement, resignation or removal from office. The board has adopted a mandatory retirement age for directors who are not “interested persons,” as that term is defined in the Investment Company Act (independent directors). Independent directors shall retire on December 31 of the year in which they reach their 75th birthday.
Jonathan S. Thomas is an “interested person” because he currently serves as President and Chief Executive Officer of American Century Companies, Inc. (ACC), the parent company of American Century Investment Management, Inc. (ACIM or the advisor). The other directors (more than three-fourths of the total number) are independent. They are not employees, directors or officers of, and have no financial interest in, ACC or any of its wholly owned, direct or indirect, subsidiaries, including ACIM, American Century Investment Services, Inc. (ACIS) and American Century Services, LLC (ACS), and they do not have any other affiliations, positions or relationships that would cause them to be considered “interested persons” under the Investment Company Act. The directors serve in this capacity for seven (in the case of Jonathan S. Thomas, 16; and Thomas W. Bunn, 8) registered investment companies in the American Century Investments family of funds.
The following table presents additional information about the directors. The mailing address for each director is 4500 Main Street, Kansas City, Missouri 64111.
Name (Year of Birth) | Position(s) Held with Funds | Length of Time Served | Principal Occupation(s) During Past 5 Years | Number of American Century Portfolios Overseen by Director | Other Directorships Held During Past 5 Years | ||||||||||||
Independent Directors | |||||||||||||||||
Brian Bulatao (1964) | Director | Since 2022 | Chief Administrative Officer, Activision Blizzard, Inc. (2021 to present); Under Secretary of State for Management, U.S. Department of State (2018 to 2021) | 64 | None | ||||||||||||
Thomas W. Bunn (1953) | Director | Since 2017 | Retired | 119 | None | ||||||||||||
Chris H. Cheesman (1962) | Director | Since 2019 | Retired | 64 | Alleghany Corporation (2021 to 2022) | ||||||||||||
Barry Fink (1955) | Director | Since 2012 (independent since 2016) | Retired | 64 | None | ||||||||||||
Rajesh K. Gupta (1960) | Director | Since 2019 | Partner Emeritus, SeaCrest Investment Management and SeaCrest Wealth Management (2019 to present) | 64 | None |
26
Name (Year of Birth) | Position(s) Held with Funds | Length of Time Served | Principal Occupation(s) During Past 5 Years | Number of American Century Portfolios Overseen by Director | Other Directorships Held During Past 5 Years | ||||||||||||
Independent Directors | |||||||||||||||||
Lynn M. Jenkins (1963) | Director | Since 2019 | Senior Policy Advisor, Capital Hill Policy Group (2020 to present); Consultant, LJ Strategies (2019 to 2023) | 64 | MGP Ingredients, Inc. (2019 to 2021) | ||||||||||||
Jan M. Lewis (1957) | Director and Board Chair | Since 2011 (Board Chair since 2022) | Retired | 64 | None | ||||||||||||
Gary C. Meltzer (1963) | Director | Since 2022 | Advisor, Pontoro (2021 to present); Executive Advisor, Consultant and Investor, Harris Ariel Advisory LLC (2020 to present); Managing Partner, PricewaterhouseCoopers LLP (1985 to 2020) | 64 | ExcelFin Acquisition Corp., Apollo Realty Income Solutions, Inc. | ||||||||||||
Interested Director | |||||||||||||||||
Jonathan S. Thomas (1963) | Director | Since 2007 | President and Chief Executive Officer, ACC (2007 to present). Also serves as Chief Executive Officer, ACS; Director, ACC and other ACC subsidiaries | 150 | None |
The Statement of Additional Information has additional information about the fund's directors and is available without charge, upon request, by calling 1-800-345-2021.
27
Officers
The following table presents certain information about the executive officers of the funds. Each officer serves as an officer for 16 investment companies in the American Century family of funds. No officer is compensated for his or her service as an officer of the funds. The listed officers are interested persons of the funds and are appointed or re-appointed on an annual basis. The mailing address for each officer listed below is 4500 Main Street, Kansas City, Missouri 64111.
Name (Year of Birth) | Offices with the Funds | Principal Occupation(s) During the Past Five Years | ||||||
Patrick Bannigan (1965) | President since 2019 | Executive Vice President and Director, ACC (2012 to present); Chief Financial Officer, Chief Accounting Officer and Treasurer, ACC (2015 to present); Also serves as President, ACS; Vice President, ACIM; Chief Financial Officer, Chief Accounting Officer and/or Director, ACIM, ACS and other ACC subsidiaries | ||||||
R. Wes Campbell (1974) | Chief Financial Officer and Treasurer since 2018; Vice President since 2023 | Vice President, ACS (2020 to present); Investment Operations and Investment Accounting, ACS (2000 to present) | ||||||
Amy D. Shelton (1964) | Chief Compliance Officer and Vice President since 2014 | Chief Compliance Officer, American Century funds, (2014 to present); Chief Compliance Officer, ACIM (2014 to present); Chief Compliance Officer, ACIS (2009 to present). Also serves as Vice President, ACIS | ||||||
John Pak (1968) | General Counsel and Senior Vice President since 2021 | General Counsel and Senior Vice President, ACC (2021 to present); Also serves as General Counsel and Senior Vice President, ACIM, ACS and ACIS. Chief Legal Officer of Investment and Wealth Management, The Bank of New York Mellon (2014 to 2021) | ||||||
Cihan Kasikara (1974) | Vice President since 2023 | Senior Vice President, ACS (2022 to present); Treasurer, ACS (2023 to present); Vice President, ACS (2020 to 2022); Vice President, Franklin Templeton (2015 to 2020) | ||||||
Kathleen Gunja Nelson (1976) | Vice President since 2023 | Vice President, ACS (2017 to present) | ||||||
Ward D. Stauffer (1960) | Secretary since 2005 | Attorney, ACC (2003 to present) |
28
Liquidity Risk Management Program |
The Fund has adopted a liquidity risk management program (the “program”). The Fund’s Board of Directors (the "Board") has designated American Century Investment Management, Inc. (“ACIM”) as the administrator of the program. Personnel of ACIM or its affiliates, including members of ACIM’s Investment Oversight Committee who are members of ACIM’s Investment Management and Global Analytics departments, conduct the day-to-day operation of the program pursuant to the program.
Under the program, ACIM manages the Fund’s liquidity risk, which is the risk that the Fund could not meet shareholder redemption requests without significant dilution of remaining shareholders’ interests in the Fund. This risk is managed by monitoring the degree of liquidity of the Fund’s investments, limiting the amount of the Fund’s illiquid investments, and utilizing various risk management tools and facilities available to the Fund for meeting shareholder redemptions, among other means. ACIM’s process of determining the degree of liquidity of certain investments held by the Fund is supported by a third-party liquidity assessment vendor.
The Board reviewed a report prepared by ACIM regarding the operation and effectiveness of the program for the period January 1, 2023 through December 31, 2023. No significant liquidity events impacting the Fund were noted in the report. In addition, ACIM provided its assessment that the program had been effective in managing the Fund’s liquidity risk.
29
Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain retirement accounts are subject to federal income tax withholding at the IRS default rate of 10%.* 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.
You may elect a different withholding rate, or request zero withholding, by submitting an acceptable IRS Form W-4R election with your distribution request. You may notify us of your W-4R election by telephone, on our distribution forms, on IRS Form W-4R, or through other acceptable electronic means. If your withholding election is for an automatic withdrawal plan, you have the right to revoke your election at any time and any election you make will remain in effect until revoked by filing a new election.
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 according to state regulations if, at the time of your distribution, your tax residency is within one of the mandatory withholding states.
*Some 403(b), 457 and qualified retirement plan distributions may be subject to 20% mandatory withholding, as they are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
A description of the policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund is available without charge, upon request, by calling 1-800-345-2021. It is also available on American Century Investments’ website at americancentury.com/proxy and on the Securities and Exchange Commission’s website at sec.gov. Information regarding how the investment advisor voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on americancentury.com/proxy. It is also available at sec.gov.
Quarterly Portfolio Disclosure
The fund files its complete schedule of portfolio holdings with the Securities and Exchange
Commission (SEC) for the first and third quarters of each fiscal year as an exhibit to its reports on
Form N-PORT. These portfolio holdings are available on the fund's website at
americancentury.com and, upon request, by calling 1-800-345-2021. The fund’s Form N-PORT
reports are available on the SEC’s website at sec.gov.
30
Other Tax Information
The following information is provided pursuant to provisions of the Internal Revenue Code.
The fund hereby designates up to the maximum amount allowable as qualified dividend income for the fiscal year ended March 31, 2024.
For corporate taxpayers, the fund hereby designates $137,073, or up to the maximum amount allowable, of ordinary income distributions paid during the fiscal year ended March 31, 2024 as qualified for the corporate dividends received deduction.
31
Notes |
32
![]() | ||||||||
Contact Us | americancentury.com | |||||||
Automated Information Line | 1-800-345-8765 | |||||||
Investor Services Representative | 1-800-345-2021 or 816-531-5575 | |||||||
Investors Using Advisors | 1-800-378-9878 | |||||||
Business, Not-For-Profit, Employer-Sponsored Retirement Plans | 1-800-345-3533 | |||||||
Banks and Trust Companies, Broker-Dealers, Financial Professionals, Insurance Companies | 1-800-345-6488 | |||||||
Telecommunications Relay Service for the Deaf | 711 | |||||||
American Century 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. | ||||||||
©2024 American Century Proprietary Holdings, Inc. All rights reserved. CL-ANN-97903 2405 |
![image22.jpg](https://capedge.com/proxy/N-CSR/0000908186-24-000015/image22.jpg)
Annual Report | |||||
March 31, 2024 | |||||
Small Cap Value Fund | |||||
Investor Class (ASVIX) | |||||
I Class (ACVIX) | |||||
Y Class (ASVYX) | |||||
A Class (ACSCX) | |||||
C Class (ASVNX) | |||||
R Class (ASVRX) | |||||
R5 Class (ASVGX) | |||||
R6 Class (ASVDX) | |||||
G Class (ASVHX) |
The Securities and Exchange Commission (SEC) adopted new rules that will require annual and semiannual reports to transition to a new format known as a Tailored Shareholder Report beginning in July 2024. The amendments will require the transmission of a concise report highlighting key fund information to investors. The detailed financial statements will remain available on our website, will be delivered to investors free of charge upon request, and will continue to be filed with the SEC.
Table of Contents |
President’s Letter | |||||
Performance | |||||
Portfolio Commentary | |||||
Fund Characteristics | |||||
Shareholder Fee Example | |||||
Schedule of Investments | |||||
Statement of Assets and Liabilities | |||||
Statement of Operations | |||||
Statement of Changes in Net Assets | |||||
Notes to Financial Statements | |||||
Financial Highlights | |||||
Report of Independent Registered Public Accounting Firm | |||||
Management | |||||
Liquidity Risk Management Program | |||||
Additional Information |
Any opinions expressed in this report reflect those of the author as of the date of the report, and do not necessarily represent the opinions of American Century Investments® or any other person in the American Century Investments organization. Any such opinions are subject to change at any time based upon market or other conditions and American Century Investments disclaims any responsibility to update such opinions. These opinions may not be relied upon as investment advice and, because investment decisions made by American Century Investments funds are based on numerous factors, may not be relied upon as an indication of trading intent on behalf of any American Century Investments fund. Security examples are used for representational purposes only and are not intended as recommendations to purchase or sell securities. Performance information for comparative indices and securities is provided to American Century Investments by third party vendors. To the best of American Century Investments’ knowledge, such information is accurate at the time of printing.
President’s Letter |
![image23.jpg](https://capedge.com/proxy/N-CSR/0000908186-24-000015/image23.jpg)
Dear Investor:
Thank you for reviewing this annual report for the period ending March 31, 2024. Annual reports help convey important information about fund returns, including market factors that affected performance. For additional investment insights, please visit americancentury.com.
Stocks Surged While Bonds Delivered Modest Gains
Soaring U.S. Treasury yields weighed on bond returns for the first six months of the reporting period. Meanwhile, inflation slowed but remained well above the Federal Reserve’s (Fed’s) target, lending conditions tightened, and recession risk rose. This fueled expectations for a shift in Fed policy, which, along with better-than-expected earnings, helped U.S. stocks deliver modest gains.
The Fed lifted rates in May, paused in June and hiked again in July to a range of 5.25% to 5.5%, a 22-year high. The Fed left rates unchanged in September but warned that persistent above-target inflation may require more tightening. This news pushed Treasury yields to multiyear highs in October and sent stocks tumbling. By November, inflation showed signs of moderating, and the Fed held rates steady again, reviving investor enthusiasm. Then, in December, Fed policymakers expressed more confidence about the inflation outlook and forecasted three rate cuts for 2024. Against this backdrop, recession fears eased, Treasury yields declined, and stocks and bonds ended 2023 on a strong note.
Despite the Fed’s continued pause, yields reversed course again in early 2024 amid a steady stream of better-than-expected economic data and persistent inflation. But the bond market’s late-2023 rally helped the Bloomberg U.S. Aggregate Bond Index maintain a gain of 1.70% for the 12-month period. Most stock indices continued to rally into 2024, buoyed by solid corporate earnings and expectations for Fed rate cuts. The S&P 500 Index returned 29.88% for the 12-month period, and growth stocks generally outperformed value stocks.
Remaining Diligent in Uncertain Times
We expect market volatility to linger as investors navigate a complex environment of persistent inflation, still-tight financial conditions, political uncertainty and slowing growth. In addition, the Israel-Hamas war and other tensions in the Middle East complicate the global backdrop and represent additional considerations for our investment teams.
Our firm has a long history of helping clients weather unpredictable and volatile markets, and we’re determined to meet today’s challenges. Thank you for your trust and confidence in American Century Investments.
With appreciation and respect,
![image48a16a.jpg](https://capedge.com/proxy/N-CSR/0000908186-24-000015/image48a16a.jpg)
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
2
Performance |
Total Returns as of March 31, 2024 | ||||||||||||||||||||
Average Annual Returns | ||||||||||||||||||||
Ticker Symbol | 1 year | 5 years | 10 years | Since Inception | Inception Date | |||||||||||||||
Investor Class | ASVIX | 18.72% | 12.34% | 9.08% | — | 7/31/98 | ||||||||||||||
Russell 2000 Value Index | — | 18.75% | 8.17% | 6.87% | — | — | ||||||||||||||
I Class | ACVIX | 18.93% | 12.56% | 9.29% | — | 10/26/98 | ||||||||||||||
Y Class | ASVYX | 19.19% | 12.74% | — | 9.65% | 4/10/17 | ||||||||||||||
A Class | ACSCX | 12/31/99 | ||||||||||||||||||
No sales charge | 18.49% | 12.06% | 8.81% | — | ||||||||||||||||
With sales charge | 11.68% | 10.74% | 8.17% | — | ||||||||||||||||
C Class | ASVNX | 17.54% | 11.24% | 8.00% | — | 3/1/10 | ||||||||||||||
R Class | ASVRX | 18.14% | 11.78% | 8.54% | — | 3/1/10 | ||||||||||||||
R5 Class | ASVGX | 18.91% | 12.55% | — | 9.48% | 4/10/17 | ||||||||||||||
R6 Class | ASVDX | 19.21% | 12.76% | 9.47% | — | 7/26/13 | ||||||||||||||
G Class | ASVHX | 20.01% | — | — | 13.29% | 4/1/19 |
Average annual returns since inception are presented when ten years of performance history is not available.
G Class returns would have been lower if a portion of the fees had not been waived.
C Class shares will automatically convert to A Class shares after being held for approximately eight years. C Class average annual returns do not reflect this conversion.
Sales charges include initial sales charges and contingent deferred sales charges (CDSCs), as applicable. A Class shares have a 5.75% maximum initial sales charge and may be subject to a maximum CDSC of 1.00%. C Class shares redeemed within 12 months of purchase are subject to a maximum CDSC of 1.00%. The SEC requires that mutual funds provide performance information net of maximum sales charges in all cases where charges could be applied.
Data presented reflect past performance. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance shown. Total returns for periods less than one year are not annualized. Investment return and principal value will fluctuate, and redemption value may be more or less than original cost. Data assumes reinvestment of dividends and capital gains, and none of the charts reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. To obtain performance data current to the most recent month end, please call 1-800-345-2021 or visit americancentury.com. For additional information about the fund, please consult the prospectus.
3
Growth of $10,000 Over 10 Years | ||
$10,000 investment made March 31, 2014 | ||
Performance for other share classes will vary due to differences in fee structure. |
![chart-a75077b4f46c4510acba.jpg](https://capedge.com/proxy/N-CSR/0000908186-24-000015/chart-a75077b4f46c4510acba.jpg)
Value on March 31, 2024 | |||||
Investor Class — $23,841 | |||||
Russell 2000 Value Index — $19,438 | |||||
Total Annual Fund Operating Expenses | ||||||||||||||||||||||||||
Investor Class | I Class | Y Class | A Class | C Class | R Class | R5 Class | R6 Class | G Class | ||||||||||||||||||
1.09% | 0.89% | 0.74% | 1.34% | 2.09% | 1.59% | 0.89% | 0.74% | 0.74% |
The total annual fund operating expenses shown is as stated in the fund’s prospectus current as of the date of this report. The prospectus may vary from the expense ratio shown elsewhere in this report because it is based on a different time period, includes acquired fund fees and expenses, and, if applicable, does not include fee waivers or expense reimbursements.
Data presented reflect past performance. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance shown. Total returns for periods less than one year are not annualized. Investment return and principal value will fluctuate, and redemption value may be more or less than original cost. Data assumes reinvestment of dividends and capital gains, and none of the charts reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. To obtain performance data current to the most recent month end, please call 1-800-345-2021 or visit americancentury.com. For additional information about the fund, please consult the prospectus.
4
Portfolio Commentary |
Portfolio Managers: Jeff John and Ryan Cope
Performance Summary
Small Cap Value returned 18.72%* for the 12-month period ended March 31, 2024. The fund’s benchmark, the Russell 2000 Value Index, returned 18.75% for the same time period. The fund’s return reflects operating expenses, while the index’s return does not.
Performance versus the benchmark was hindered primarily by unfavorable stock selection in the consumer discretionary sector. Poor choices in the communication services and health care sectors also detracted from relative results. On the other hand, an underweight in the utilities sector and strong security selection in the industrials sector were beneficial.
Consumer Discretionary and Communication Services Detracted
Unfavorable stock selection was the primary contributor to the fund’s underperformance, and positions in the consumer discretionary sector were the leading detractors. In the household durables industry, a position in Skyline Champion, a maker of modular homes, was the primary hindrance as shares declined through most of the period on slower sales and profit growth following a period of outsized performance. A lack of exposure to homebuilders Taylor Morrison Home, KB Home, M/I Homes and Meritage Homes also hurt performance. These shares performed well as investors began to anticipate that mortgage rates could begin to decline.
In communication services, shares of Cable One, a broadband provider that is not in the benchmark, declined throughout the period as competition from rivals intensified. Entravision Communications, a media company that serves Hispanic markets, also detracted. Meta Platforms said it would no longer partner with the company for Facebook’s advertising efforts.
Selections in the health care sector were a drag on performance as well. In the health care equipment and supplies industry, shares of Embecta, a maker of pen needles and syringes for diabetics, declined on concerns about the potential effect of new weight-loss drugs on revenues. The fund’s position in Envista Holdings, which makes dental products, also detracted. The company experienced weakness, especially in the North American market, for adult orthodontics and implants, leading management to lower guidance.
Utilities and Industrials Contributed
In the utilities sector, our underweight allocation was advantageous, especially in electric utilities. Favorable selections in the gas utilities industry also contributed. A lack of exposure to Brookfield Infrastructure was especially beneficial.
In the industrials sector, favorable selections drove returns, and an overweight allocation also helped relative returns. In the trading companies and distributors industry, positions in Beacon Roofing Supply and GMS were the leading contributors. New homes sales and housing starts generally surprised to the upside through much of 2023, driving multiple expansion for these housing-related stocks. The Brink’s Co. also contributed. Shares of this international provider of cash and valuables in-transit services and advanced cash and ATM solutions benefited from its continued shift toward faster-growing and more profitable services.
*All fund returns referenced in this commentary are for Investor Class shares. Performance for other share classes will vary due to differences in fee structure; when Investor Class performance exceeds that of the fund’s benchmark, other share classes may not. See page 3 for returns for all share classes.
5
Fund Characteristics |
MARCH 31, 2024 | |||||
Types of Investments in Portfolio | % of net assets | ||||
Common Stocks | 99.1% | ||||
Short-Term Investments | 1.9% | ||||
Other Assets and Liabilities | (1.0)% | ||||
Top Five Industries | % of net assets | ||||
Banks | 20.7% | ||||
Oil, Gas and Consumable Fuels | 6.9% | ||||
Financial Services | 6.7% | ||||
Machinery | 5.6% | ||||
Trading Companies and Distributors | 4.1% |
6
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 October 1, 2023 to March 31, 2024.
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 mutual fund, or I Class shares of the American Century Diversified Bond Fund, in an American Century Investments account (i.e., not through a financial intermediary or employer-sponsored retirement plan account), American Century Investments may charge you a $25 annual account maintenance fee if the value of those shares is less than $10,000. We will redeem shares automatically in one of your accounts to pay the $25 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.
7
Beginning Account Value 10/1/23 | Ending Account Value 3/31/24 | Expenses Paid During Period(1) 10/1/23 - 3/31/24 | Annualized Expense Ratio(1) | |||||||||||
Actual | ||||||||||||||
Investor Class | $1,000 | $1,200.30 | $6.00 | 1.09% | ||||||||||
I Class | $1,000 | $1,201.00 | $4.90 | 0.89% | ||||||||||
Y Class | $1,000 | $1,201.40 | $4.07 | 0.74% | ||||||||||
A Class | $1,000 | $1,198.30 | $7.36 | 1.34% | ||||||||||
C Class | $1,000 | $1,194.70 | $11.47 | 2.09% | ||||||||||
R Class | $1,000 | $1,197.70 | $8.74 | 1.59% | ||||||||||
R5 Class | $1,000 | $1,200.80 | $4.90 | 0.89% | ||||||||||
R6 Class | $1,000 | $1,203.00 | $4.08 | 0.74% | ||||||||||
G Class | $1,000 | $1,206.60 | $0.00 | 0.00%(2) | ||||||||||
Hypothetical | ||||||||||||||
Investor Class | $1,000 | $1,019.55 | $5.50 | 1.09% | ||||||||||
I Class | $1,000 | $1,020.55 | $4.50 | 0.89% | ||||||||||
Y Class | $1,000 | $1,021.30 | $3.74 | 0.74% | ||||||||||
A Class | $1,000 | $1,018.30 | $6.76 | 1.34% | ||||||||||
C Class | $1,000 | $1,014.55 | $10.53 | 2.09% | ||||||||||
R Class | $1,000 | $1,017.05 | $8.02 | 1.59% | ||||||||||
R5 Class | $1,000 | $1,020.55 | $4.50 | 0.89% | ||||||||||
R6 Class | $1,000 | $1,021.30 | $3.74 | 0.74% | ||||||||||
G Class | $1,000 | $1,025.00 | $0.00 | 0.00%(2) |
(1)Expenses are equal to the class's annualized expense ratio listed in the table above, multiplied by the average account value over the period, multiplied by 183, the number of days in the most recent fiscal half-year, divided by 366, to reflect the one-half year period. Annualized expense ratio reflects actual expenses, including any applicable fee waivers or expense reimbursements and excluding any acquired fund fees and expenses.
(2)Other expenses did not exceed 0.005%.
8
Schedule of Investments |
MARCH 31, 2024
Shares | Value | |||||||
COMMON STOCKS — 99.1% | ||||||||
Banks — 20.7% | ||||||||
Ameris Bancorp | 1,440,000 | $ | 69,667,200 | |||||
Axos Financial, Inc.(1) | 275,000 | 14,861,000 | ||||||
Banc of California, Inc. | 1,785,000 | 27,149,850 | ||||||
BankUnited, Inc. | 850,000 | 23,800,000 | ||||||
Columbia Banking System, Inc. | 3,510,000 | 67,918,500 | ||||||
CVB Financial Corp. | 4,250,000 | 75,820,000 | ||||||
First BanCorp | 3,730,000 | 65,424,200 | ||||||
First Interstate BancSystem, Inc., Class A | 1,950,000 | 53,059,500 | ||||||
First Merchants Corp. | 720,000 | 25,128,000 | ||||||
FNB Corp. | 9,780,000 | 137,898,000 | ||||||
Home BancShares, Inc. | 4,265,000 | 104,791,050 | ||||||
Old National Bancorp | 8,650,000 | 150,596,500 | ||||||
Origin Bancorp, Inc. | 120,000 | 3,748,800 | ||||||
Pacific Premier Bancorp, Inc. | 2,210,000 | 53,040,000 | ||||||
Popular, Inc. | 490,000 | 43,164,100 | ||||||
Provident Financial Services, Inc. | 992,500 | 14,460,725 | ||||||
SouthState Corp. | 1,305,000 | 110,964,150 | ||||||
UMB Financial Corp. | 862,789 | 75,054,015 | ||||||
Valley National Bancorp | 4,450,000 | 35,422,000 | ||||||
Webster Financial Corp. | 1,800,000 | 91,386,000 | ||||||
1,243,353,590 | ||||||||
Building Products — 1.5% | ||||||||
DIRTT Environmental Solutions(1) | 7,107,428 | 3,511,069 | ||||||
Tecnoglass, Inc.(2) | 1,605,000 | 83,508,150 | ||||||
87,019,219 | ||||||||
Capital Markets — 0.3% | ||||||||
Patria Investments Ltd., Class A | 1,330,000 | 19,737,200 | ||||||
Chemicals — 1.5% | ||||||||
Ingevity Corp.(1) | 540,000 | 25,758,000 | ||||||
Minerals Technologies, Inc. | 885,000 | 66,622,800 | ||||||
92,380,800 | ||||||||
Commercial Services and Supplies — 3.3% | ||||||||
Brink's Co. | 1,265,703 | 116,925,643 | ||||||
Deluxe Corp.(3) | 2,220,000 | 45,709,800 | ||||||
Loomis AB | 1,150,000 | 32,098,166 | ||||||
194,733,609 | ||||||||
Containers and Packaging — 3.6% | ||||||||
Graphic Packaging Holding Co. | 5,745,000 | 167,639,100 | ||||||
Pactiv Evergreen, Inc. | 3,363,719 | 48,168,456 | ||||||
215,807,556 | ||||||||
Electric Utilities — 0.6% | ||||||||
ALLETE, Inc. | 610,000 | 36,380,400 | ||||||
Electrical Equipment — 0.6% | ||||||||
Sensata Technologies Holding PLC | 995,000 | 36,556,300 |
9
Shares | Value | |||||||
Electronic Equipment, Instruments and Components — 4.0% | ||||||||
Avnet, Inc. | 2,115,000 | $ | 104,861,700 | |||||
Belden, Inc. | 460,000 | 42,600,600 | ||||||
Coherent Corp.(1) | 1,475,000 | 89,414,500 | ||||||
236,876,800 | ||||||||
Energy Equipment and Services — 4.0% | ||||||||
Cactus, Inc., Class A | 1,790,000 | 89,661,100 | ||||||
ChampionX Corp. | 4,230,000 | 151,814,700 | ||||||
241,475,800 | ||||||||
Financial Services — 6.7% | ||||||||
A-Mark Precious Metals, Inc.(3) | 1,455,000 | 44,653,950 | ||||||
Compass Diversified Holdings(3) | 4,430,000 | 106,630,100 | ||||||
Enact Holdings, Inc. | 275,000 | 8,574,500 | ||||||
Euronet Worldwide, Inc.(1) | 830,000 | 91,241,900 | ||||||
EVERTEC, Inc.(3) | 3,280,000 | 130,872,000 | ||||||
Repay Holdings Corp.(1) | 1,935,000 | 21,285,000 | ||||||
403,257,450 | ||||||||
Gas Utilities — 1.0% | ||||||||
Southwest Gas Holdings, Inc. | 795,000 | 60,523,350 | ||||||
Health Care Equipment and Supplies — 1.9% | ||||||||
Embecta Corp. | 2,515,486 | 33,380,499 | ||||||
Enovis Corp.(1) | 650,000 | 40,592,500 | ||||||
Envista Holdings Corp.(1) | 1,785,000 | 38,163,300 | ||||||
112,136,299 | ||||||||
Health Care Providers and Services — 0.3% | ||||||||
AMN Healthcare Services, Inc.(1) | 290,000 | 18,127,900 | ||||||
Health Care REITs — 1.1% | ||||||||
CareTrust REIT, Inc. | 2,710,000 | 66,042,700 | ||||||
Hotel & Resort REITs — 1.2% | ||||||||
Ryman Hospitality Properties, Inc. | 635,000 | 73,412,350 | ||||||
Hotels, Restaurants and Leisure — 2.9% | ||||||||
Accel Entertainment, Inc.(1) | 2,665,000 | 31,420,350 | ||||||
Boyd Gaming Corp. | 640,000 | 43,084,800 | ||||||
Dave & Buster's Entertainment, Inc.(1) | 895,742 | 56,073,449 | ||||||
Everi Holdings, Inc.(1) | 3,730,000 | 37,486,500 | ||||||
Red Robin Gourmet Burgers, Inc.(1)(2) | 645,000 | 4,940,700 | ||||||
173,005,799 | ||||||||
Household Durables — 2.0% | ||||||||
Cavco Industries, Inc.(1) | 70,000 | 27,934,200 | ||||||
Skyline Champion Corp.(1) | 1,115,000 | 94,786,150 | ||||||
122,720,350 | ||||||||
Household Products — 1.6% | ||||||||
Spectrum Brands Holdings, Inc. | 1,060,000 | 94,350,600 | ||||||
Industrial REITs — 1.3% | ||||||||
Terreno Realty Corp. | 1,192,555 | 79,185,652 | ||||||
Insurance — 2.9% | ||||||||
Axis Capital Holdings Ltd. | 1,920,000 | 124,838,400 | ||||||
Fidelis Insurance Holdings Ltd.(2) | 1,515,000 | 29,512,200 | ||||||
Hamilton Insurance Group Ltd., Class B(1) | 1,435,000 | 19,989,550 | ||||||
174,340,150 |
10
Shares | Value | |||||||
Leisure Products — 3.0% | ||||||||
BRP, Inc. | 600,000 | $ | 40,260,000 | |||||
Brunswick Corp. | 860,000 | 83,007,200 | ||||||
Malibu Boats, Inc., Class A(1) | 585,000 | 25,318,800 | ||||||
Solo Brands, Inc., Class A(1)(2) | 4,200,000 | 9,114,000 | ||||||
Topgolf Callaway Brands Corp.(1) | 1,505,000 | 24,335,850 | ||||||
182,035,850 | ||||||||
Machinery — 5.6% | ||||||||
Atmus Filtration Technologies, Inc.(1) | 1,430,000 | 46,117,500 | ||||||
Gates Industrial Corp. PLC(1) | 5,755,000 | 101,921,050 | ||||||
Hillman Solutions Corp.(1) | 4,825,000 | 51,338,000 | ||||||
Luxfer Holdings PLC | 498,496 | 5,169,404 | ||||||
Timken Co. | 1,495,000 | 130,707,850 | ||||||
335,253,804 | ||||||||
Media — 1.7% | ||||||||
Cable One, Inc. | 190,000 | 80,394,700 | ||||||
Entravision Communications Corp., Class A(3) | 7,955,000 | 13,046,200 | ||||||
Townsquare Media, Inc., Class A | 549,416 | 6,032,588 | ||||||
99,473,488 | ||||||||
Oil, Gas and Consumable Fuels — 6.9% | ||||||||
Chord Energy Corp. | 530,000 | 94,467,200 | ||||||
Mach Natural Resources LP | 1,460,000 | 28,178,000 | ||||||
Magnolia Oil & Gas Corp., Class A(2) | 4,650,000 | 120,667,500 | ||||||
Northern Oil & Gas, Inc. | 2,785,000 | 110,508,800 | ||||||
Permian Resources Corp. | 3,300,000 | 58,278,000 | ||||||
412,099,500 | ||||||||
Personal Care Products — 1.6% | ||||||||
Edgewell Personal Care Co.(3) | 2,530,000 | 97,759,200 | ||||||
Professional Services — 3.5% | ||||||||
Barrett Business Services, Inc. | 140,000 | 17,740,800 | ||||||
IBEX Holdings Ltd.(1)(3) | 970,794 | 14,979,351 | ||||||
Korn Ferry | 1,280,000 | 84,172,800 | ||||||
NV5 Global, Inc.(1) | 320,000 | 31,363,200 | ||||||
Science Applications International Corp. | 275,000 | 35,857,250 | ||||||
Verra Mobility Corp.(1) | 935,000 | 23,346,950 | ||||||
207,460,351 | ||||||||
Residential REITs — 0.6% | ||||||||
UMH Properties, Inc. | 2,335,000 | 37,920,400 | ||||||
Semiconductors and Semiconductor Equipment — 2.7% | ||||||||
Axcelis Technologies, Inc.(1) | 265,000 | 29,552,800 | ||||||
Cohu, Inc.(1) | 960,000 | 31,996,800 | ||||||
Kulicke & Soffa Industries, Inc. | 1,700,000 | 85,527,000 | ||||||
MKS Instruments, Inc. | 110,000 | 14,630,000 | ||||||
161,706,600 | ||||||||
Software — 1.7% | ||||||||
Teradata Corp.(1) | 2,680,000 | 103,635,600 | ||||||
Specialty Retail — 2.3% | ||||||||
MarineMax, Inc.(1)(3) | 1,765,000 | 58,703,900 | ||||||
OneWater Marine, Inc., Class A(1)(3) | 1,330,000 | 37,439,500 | ||||||
Penske Automotive Group, Inc. | 255,000 | 41,307,450 | ||||||
137,450,850 | ||||||||
Textiles, Apparel and Luxury Goods — 2.0% | ||||||||
Tapestry, Inc. | 2,520,000 | 119,649,600 |
11
Shares | Value | |||||||
Tobacco — 0.4% | ||||||||
Turning Point Brands, Inc. | 815,000 | $ | 23,879,500 | |||||
Trading Companies and Distributors — 4.1% | ||||||||
Beacon Roofing Supply, Inc.(1) | 1,075,000 | 105,371,500 | ||||||
DXP Enterprises, Inc.(1) | 565,000 | 30,357,450 | ||||||
GMS, Inc.(1) | 888,293 | 86,466,441 | ||||||
Karat Packaging, Inc. | 150,000 | 4,291,500 | ||||||
Titan Machinery, Inc.(1) | 815,000 | 20,220,150 | ||||||
246,707,041 | ||||||||
TOTAL COMMON STOCKS (Cost $4,717,580,438) | 5,946,455,658 | |||||||
SHORT-TERM INVESTMENTS — 1.9% | ||||||||
Money Market Funds — 1.3% | ||||||||
State Street Institutional U.S. Government Money Market Fund, Premier Class | 94,757 | 94,757 | ||||||
State Street Navigator Securities Lending Government Money Market Portfolio(4) | 77,766,455 | 77,766,455 | ||||||
77,861,212 | ||||||||
Repurchase Agreements — 0.6% | ||||||||
BMO Capital Markets Corp., (collateralized by various U.S. Treasury obligations, 4.625%, 9/15/26, valued at $1,514,288), in a joint trading account at 5.28%, dated 3/28/24, due 4/1/24 (Delivery value $1,485,115) | 1,484,244 | |||||||
Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 2.50%, 3/31/27, valued at $27,612,461), at 5.30%, dated 3/28/24, due 4/1/24 (Delivery value $27,086,942) | 27,071,000 | |||||||
TD Securities (USA) LLC, (collateralized by various U.S. Treasury obligations, 0.875% - 2.375%, 9/30/26 - 11/15/31, valued at $6,118,906), at 5.30%, dated 3/28/24, due 4/1/24 (Delivery value $6,001,532) | 5,998,000 | |||||||
34,553,244 | ||||||||
TOTAL SHORT-TERM INVESTMENTS (Cost $112,414,456) | 112,414,456 | |||||||
TOTAL INVESTMENT SECURITIES — 101.0% (Cost $4,829,994,894) | 6,058,870,114 | |||||||
OTHER ASSETS AND LIABILITIES — (1.0)% | (61,113,582) | |||||||
TOTAL NET ASSETS — 100.0% | $ | 5,997,756,532 |
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS | ||||||||||||||||||||
Currency Purchased | Currency Sold | Counterparty | Settlement Date | Unrealized Appreciation (Depreciation) | ||||||||||||||||
USD | 27,954,362 | SEK | 293,641,000 | UBS AG | 6/28/24 | $ | 423,612 |
12
NOTES TO SCHEDULE OF INVESTMENTS | ||||||||
SEK | – | Swedish Krona | ||||||
USD | – | United States Dollar |
(1)Non-income producing.
(2)Security, or a portion thereof, is on loan. At the period end, the aggregate value of securities on loan was $78,483,456. The amount of securities on loan indicated may not correspond with the securities on loan identified because securities with pending sales are in the process of recall from the brokers.
(3)Affiliated Company: the fund’s holding represents ownership of 5% or more of the voting securities of the company; therefore, the company is affiliated as defined in the Investment Company Act of 1940.
(4)Investment of cash collateral from securities on loan. At the period end, the aggregate value of the collateral held by the fund was $80,205,860, which includes securities collateral of $2,439,405.
See Notes to Financial Statements.
13
Statement of Assets and Liabilities |
MARCH 31, 2024 | |||||
Assets | |||||
Investment securities - unaffiliated, at value (cost of $4,262,291,970) — including $78,483,456 of securities on loan | $ | 5,431,309,658 | |||
Investment securities - affiliated, at value (cost of $489,936,469) | 549,794,001 | ||||
Investment made with cash collateral received for securities on loan, at value (cost of $77,766,455) | 77,766,455 | ||||
Total investment securities, at value (cost of $4,829,994,894) | 6,058,870,114 | ||||
Cash | 909,531 | ||||
Receivable for investments sold | 15,913,949 | ||||
Receivable for capital shares sold | 5,597,163 | ||||
Unrealized appreciation on forward foreign currency exchange contracts | 423,612 | ||||
Dividends and interest receivable | 7,553,030 | ||||
Securities lending receivable | 557,193 | ||||
6,089,824,592 | |||||
Liabilities | |||||
Payable for collateral received for securities on loan | 77,766,455 | ||||
Payable for investments purchased | 5,502,470 | ||||
Payable for capital shares redeemed | 4,985,997 | ||||
Accrued management fees | 3,774,802 | ||||
Distribution and service fees payable | 38,336 | ||||
92,068,060 | |||||
Net Assets | $ | 5,997,756,532 | |||
Net Assets Consist of: | |||||
Capital (par value and paid-in surplus) | $ | 4,856,732,868 | |||
Distributable earnings (loss) | 1,141,023,664 | ||||
$ | 5,997,756,532 |
Net Assets | Shares Outstanding | Net Asset Value Per Share* | |||||||||
Investor Class, $0.01 Par Value | $750,408,359 | 69,086,253 | $10.86 | ||||||||
I Class, $0.01 Par Value | $2,065,440,056 | 187,723,483 | $11.00 | ||||||||
Y Class, $0.01 Par Value | $64,578,686 | 5,858,953 | $11.02 | ||||||||
A Class, $0.01 Par Value | $88,474,198 | 8,269,310 | $10.70 | ||||||||
C Class, $0.01 Par Value | $21,116,817 | 2,148,114 | $9.83 | ||||||||
R Class, $0.01 Par Value | $7,103,825 | 670,412 | $10.60 | ||||||||
R5 Class, $0.01 Par Value | $10,710,387 | 972,552 | $11.01 | ||||||||
R6 Class, $0.01 Par Value | $2,479,758,497 | 225,324,169 | $11.01 | ||||||||
G Class, $0.01 Par Value | $510,165,707 | 46,226,244 | $11.04 |
*Maximum offering price per share was equal to the net asset value per share for all share classes, except A Class, for which the maximum offering price per share was $11.35 (net asset value divided by 0.9425). A contingent deferred sales charge may be imposed on redemptions of A Class and C Class.
See Notes to Financial Statements.
14
Statement of Operations |
YEAR ENDED MARCH 31, 2024 | |||||
Investment Income (Loss) | |||||
Income: | |||||
Dividends (including $13,304,090 from affiliates and net of foreign taxes withheld of $595,981) | $ | 115,356,620 | |||
Interest | 2,207,514 | ||||
Securities lending, net | 1,007,872 | ||||
118,572,006 | |||||
Expenses: | |||||
Management fees | 45,606,091 | ||||
Distribution and service fees: | |||||
A Class | 211,974 | ||||
C Class | 201,980 | ||||
R Class | 33,957 | ||||
Directors' fees and expenses | 177,385 | ||||
Other expenses | 12,702 | ||||
46,244,089 | |||||
Fees waived - G Class | (2,677,906) | ||||
43,566,183 | |||||
Net investment income (loss) | 75,005,823 | ||||
Realized and Unrealized Gain (Loss) | |||||
Net realized gain (loss) on: | |||||
Investment transactions (including $(2,009,785) from affiliates) | 57,013,539 | ||||
Forward foreign currency exchange contract transactions | 754,108 | ||||
Foreign currency translation transactions | (99,908) | ||||
57,667,739 | |||||
Change in net unrealized appreciation (depreciation) on: | |||||
Investments (including $29,048,695 from affiliates) | 831,387,655 | ||||
Forward foreign currency exchange contracts | 413,212 | ||||
Translation of assets and liabilities in foreign currencies | (148) | ||||
831,800,719 | |||||
Net realized and unrealized gain (loss) | 889,468,458 | ||||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 964,474,281 |
See Notes to Financial Statements.
15
Statement of Changes in Net Assets |
YEARS ENDED MARCH 31, 2024 AND MARCH 31, 2023 | ||||||||
Increase (Decrease) in Net Assets | March 31, 2024 | March 31, 2023 | ||||||
Operations | ||||||||
Net investment income (loss) | $ | 75,005,823 | $ | 55,026,532 | ||||
Net realized gain (loss) | 57,667,739 | (55,622,843) | ||||||
Change in net unrealized appreciation (depreciation) | 831,800,719 | (479,251,802) | ||||||
Net increase (decrease) in net assets resulting from operations | 964,474,281 | (479,848,113) | ||||||
Distributions to Shareholders | ||||||||
From earnings: | ||||||||
Investor Class | (7,887,176) | (29,896,742) | ||||||
I Class | (23,391,385) | (70,126,881) | ||||||
Y Class | (860,028) | (2,671,405) | ||||||
A Class | (662,429) | (2,894,436) | ||||||
C Class | (16,721) | (640,169) | ||||||
R Class | (36,279) | (207,698) | ||||||
R5 Class | (151,011) | (499,693) | ||||||
R6 Class | (29,602,557) | (70,027,970) | ||||||
G Class | (8,168,336) | (12,849,969) | ||||||
Decrease in net assets from distributions | (70,775,922) | (189,814,963) | ||||||
Capital Share Transactions | ||||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | (239,884,392) | (176,532,473) | ||||||
Net increase (decrease) in net assets | 653,813,967 | (846,195,549) | ||||||
Net Assets | ||||||||
Beginning of period | 5,343,942,565 | 6,190,138,114 | ||||||
End of period | $ | 5,997,756,532 | $ | 5,343,942,565 |
See Notes to Financial Statements.
16
Notes to Financial Statements |
MARCH 31, 2024
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. Small Cap Value Fund (the fund) is one fund in a series issued by the corporation. The fund’s investment objective is to seek long-term capital growth. Income is a secondary objective.
The fund offers the Investor Class, I Class, Y Class, A Class, C Class, R Class, R5 Class, R6 Class and G Class. The A Class may incur an initial sales charge. The A Class and C Class may be subject to a contingent deferred sales charge.
2. Significant Accounting Policies
The following is a summary of significant accounting policies consistently followed by the fund in preparation of its financial statements. The fund is an investment company and follows accounting and reporting guidance in accordance with accounting principles generally accepted in the United States of America. This may require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from these estimates. Management evaluated the impact of events or transactions occurring through the date the financial statements were issued that would merit recognition or disclosure.
Investment Valuations — The fund determines the fair value of its investments and computes its net asset value (NAV) per share at the close of regular trading (usually 4 p.m. Eastern time) on the New York Stock Exchange (NYSE) on each day the NYSE is open. The value of investments of the fund is determined by American Century Investment Management, Inc. (ACIM) (the investment advisor), as the valuation designee, pursuant to its valuation policies and procedures. The Board of Directors oversees the valuation designee and reviews its valuation policies and procedures at least annually.
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 NAV per share. Repurchase agreements are valued at cost, which approximates fair value. 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.
If the valuation designee determines that the market price for a portfolio security is not readily available or is believed by the valuation designee to be unreliable, such security is valued at fair value as determined in good faith by the valuation designee, in accordance with its policies and procedures. Circumstances that may cause the fund to determine that market quotations are not available or reliable include, but are not limited to: when there is a significant event subsequent to the market quotation; trading in a security has been halted during the trading day; or trading in a security is insufficient or did not take place due to a closure or holiday.
The valuation designee monitors for significant events occurring after the close of an investment’s primary exchange but before the fund’s NAV per share is determined. Significant events may include, but are not limited to: corporate announcements and transactions; regulatory news, 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 valuation designee also monitors for significant fluctuations between domestic and foreign markets, as evidenced by the U.S. market or such other indicators that it deems appropriate. The valuation designee 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.
17
Foreign Currency Translations — All assets and liabilities, including investment securities and other financial instruments, initially expressed in foreign currencies are translated into U.S. dollars each day at the mean of the appropriate currency exchange rate at the close of the NYSE as provided by an independent pricing service. 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.
Security Transactions — Security transactions are accounted for as of the trade date. Net realized gains and losses are determined on the identified cost basis, which is also used for federal income tax purposes.
Investment Income — Dividend income less foreign taxes withheld, if any, is recorded as of the ex-dividend date. Distributions received on securities that represent a return of capital or long-term capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The fund may estimate the components of distributions received that may be considered nontaxable distributions or long-term capital gain distributions for income tax purposes. Interest income is recorded on the accrual basis and includes accretion of discounts and amortization of premiums. Securities lending income is net of fees and rebates earned by the lending agent for its services.
Repurchase Agreements — The fund may enter into repurchase agreements with institutions that ACIM has determined are creditworthy pursuant to criteria adopted by the Board of Directors. The fund requires that the collateral, represented by securities, received in a repurchase transaction be transferred to the custodian in a manner sufficient to enable the fund to obtain those securities in the event of a default under the repurchase agreement. ACIM monitors, on a daily basis, the securities transferred to ensure the value, including accrued interest, of the securities under each repurchase agreement is equal to or greater than amounts owed to the fund under each repurchase agreement.
Joint Trading Account — Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the fund, along with certain other funds in the American Century Investments family of funds, may transfer uninvested cash balances into a joint trading account. These balances are invested in one or more repurchase agreements that are collateralized by U.S. Treasury or Agency obligations.
Income Tax Status — It is the fund's policy to distribute substantially all net investment income and net realized gains to shareholders and to otherwise qualify as a regulated investment company under provisions of the Internal Revenue Code. Accordingly, no provision has been made for income taxes. The fund files U.S. federal, state, local and non-U.S. tax returns as applicable. The fund's tax returns are subject to examination by the relevant taxing authority until expiration of the applicable statute of limitations, which is generally three years from the date of filing but can be longer in certain jurisdictions. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination and for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Multiple Class — All shares of the fund represent an equal pro rata interest in the net assets of the class to which such shares belong, and have identical voting, dividend, liquidation and other rights and the same terms and conditions, except for class specific expenses and exclusive rights to vote on matters affecting only individual classes. Income, non-class specific expenses, and realized and unrealized capital gains and losses of the fund are allocated to each class of shares based on their relative net assets.
Distributions to Shareholders — Distributions from net investment income, 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.
18
Securities Lending — Securities are lent to qualified financial institutions and brokers. State Street Bank & Trust Co. serves as securities lending agent to the fund pursuant to a Securities Lending Agreement. The lending of securities exposes the fund to risks such as: the borrowers may fail to return the loaned securities, the borrowers may not be able to provide additional collateral, the fund may experience delays in recovery of the loaned securities or delays in access to collateral, or the fund may experience losses related to the investment collateral. To minimize certain risks, loan counterparties pledge collateral in the form of cash and/or securities. The lending agent has agreed to indemnify the fund in the case of default of any securities borrowed. Cash collateral received is invested in the State Street Navigator Securities Lending Government Money Market Portfolio, a money market mutual fund registered under the 1940 Act. The loans may also be secured by U.S. government securities in an amount at least equal to the market value of the securities loaned, plus accrued interest and dividends, determined on a daily basis and adjusted accordingly. By lending securities, the fund seeks to increase its net investment income through the receipt of interest and fees. Such income is reflected separately within the Statement of Operations. The value of loaned securities and related collateral outstanding at period end, if any, are shown on a gross basis within the Schedule of Investments and Statement of Assets and Liabilities.
The following table reflects a breakdown of transactions accounted for as secured borrowings, the gross obligation by the type of collateral pledged, and the remaining contractual maturity of those transactions as of March 31, 2024.
Remaining Contractual Maturity of Agreements | |||||||||||||||||
Overnight and Continuous | <30 days | Between 30 & 90 days | >90 days | Total | |||||||||||||
Securities Lending Transactions(1) | |||||||||||||||||
Common Stocks | $ | 77,766,455 | — | — | — | $ | 77,766,455 | ||||||||||
Gross amount of recognized liabilities for securities lending transactions | $ | 77,766,455 |
(1)Amount represents the payable for cash collateral received for securities on loan. This will generally be in the Overnight and Continuous column as the securities are typically callable on demand.
3. Fees and Transactions with Related Parties
Certain officers and directors of the corporation are also officers and/or directors of American Century Companies, Inc. (ACC). The corporation's investment advisor, ACIM, the corporation's distributor, American Century Investment Services, Inc. (ACIS), and the corporation's transfer agent, American Century Services, LLC, are wholly owned, directly or indirectly, by ACC.
Management Fees — The corporation has entered into a management agreement with ACIM, under which ACIM provides the fund with investment advisory and management services in exchange for a single, unified management fee (the fee) per class. The agreement provides that ACIM will pay all expenses of managing and operating the fund, except brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), extraordinary expenses, and expenses incurred in connection with the provision of shareholder services and distribution services under a plan adopted pursuant to Rule 12b-1 under the 1940 Act. The fee is computed and accrued daily based on each class's daily net assets and paid monthly in arrears. The difference in the fee among the classes is a result of their separate arrangements for non-Rule 12b-1 shareholder services. It is not the result of any difference in advisory or custodial fees or other expenses related to the management of the fund's assets, which do not vary by class. The rate of the fee is determined by applying a fee rate calculation formula. This formula takes into account the fund's assets as well as certain assets, if any, of other clients of the investment advisor outside the American Century Investments family of funds (such as subadvised funds and separate accounts), as well as exchange-traded funds managed by the investment advisor, that use very similar investment teams and strategies (strategy assets). 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.
19
The management fee schedule range and the effective annual management fee for each class for the period ended March 31, 2024 are as follows:
Management Fee Schedule Range | Effective Annual Management Fee | |||||||
Investor Class | 1.00% to 1.25% | 1.09% | ||||||
I Class | 0.80% to 1.05% | 0.89% | ||||||
Y Class | 0.65% to 0.90% | 0.74% | ||||||
A Class | 1.00% to 1.25% | 1.09% | ||||||
C Class | 1.00% to 1.25% | 1.09% | ||||||
R Class | 1.00% to 1.25% | 1.09% | ||||||
R5 Class | 0.80% to 1.05% | 0.89% | ||||||
R6 Class | 0.65% to 0.90% | 0.74% | ||||||
G Class | 0.65% to 0.90% | 0.00%(1) |
(1)Effective annual management fee before waiver was 0.74%.
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 March 31, 2024 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.
Other Expenses — A fund’s other expenses may include interest charges, clearing exchange fees, proxy solicitation expenses, fees associated with the recovery of foreign tax reclaims and other miscellaneous expenses.
Interfund Transactions — The fund may enter into security transactions with other American Century Investments funds and other client accounts of the investment advisor, in accordance with the 1940 Act rules and procedures adopted by the Board of Directors. The rules and procedures require, among other things, that these transactions be effected at the independent current market price of the security. There were no interfund transactions during the period.
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the period ended March 31, 2024 were $2,459,729,464 and $2,693,891,406, respectively.
20
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Year ended March 31, 2024 | Year ended March 31, 2023 | |||||||||||||
Shares | Amount | Shares | Amount | |||||||||||
Investor Class/Shares Authorized | 700,000,000 | 700,000,000 | ||||||||||||
Sold | 6,545,672 | $ | 62,442,337 | 14,251,588 | $ | 137,881,169 | ||||||||
Issued in reinvestment of distributions | 778,873 | 7,615,437 | 3,212,283 | 29,038,526 | ||||||||||
Redeemed | (32,334,631) | (306,746,865) | (29,908,807) | (285,710,982) | ||||||||||
(25,010,086) | (236,689,091) | (12,444,936) | (118,791,287) | |||||||||||
I Class/Shares Authorized | 1,660,000,000 | 1,555,000,000 | ||||||||||||
Sold | 46,469,978 | 450,847,825 | 51,322,647 | 499,388,644 | ||||||||||
Issued in reinvestment of distributions | 2,076,624 | 20,622,912 | 6,754,334 | 61,867,774 | ||||||||||
Redeemed | (72,703,445) | (699,798,725) | (101,851,127) | (1,000,065,274) | ||||||||||
(24,156,843) | (228,327,988) | (43,774,146) | (438,808,856) | |||||||||||
Y Class/Shares Authorized | 70,000,000 | 60,000,000 | ||||||||||||
Sold | 1,587,409 | 15,635,659 | 1,590,739 | 15,556,177 | ||||||||||
Issued in reinvestment of distributions | 52,064 | 518,059 | 162,372 | 1,489,213 | ||||||||||
Redeemed | (2,952,325) | (28,775,617) | (4,686,713) | (44,958,358) | ||||||||||
(1,312,852) | (12,621,899) | (2,933,602) | (27,912,968) | |||||||||||
A Class/Shares Authorized | 80,000,000 | 80,000,000 | ||||||||||||
Sold | 1,471,768 | 13,734,679 | 1,898,157 | 17,855,235 | ||||||||||
Issued in reinvestment of distributions | 62,235 | 599,514 | 297,099 | 2,646,312 | ||||||||||
Redeemed | (3,076,512) | (28,844,914) | (3,472,058) | (32,852,281) | ||||||||||
(1,542,509) | (14,510,721) | (1,276,802) | (12,350,734) | |||||||||||
C Class/Shares Authorized | 25,000,000 | 25,000,000 | ||||||||||||
Sold | 215,433 | 1,863,576 | 231,550 | 2,002,426 | ||||||||||
Issued in reinvestment of distributions | 1,535 | 13,292 | 64,257 | 526,295 | ||||||||||
Redeemed | (611,260) | (5,274,564) | (530,913) | (4,567,703) | ||||||||||
(394,292) | (3,397,696) | (235,106) | (2,038,982) | |||||||||||
R Class/Shares Authorized | 20,000,000 | 20,000,000 | ||||||||||||
Sold | 182,149 | 1,697,228 | 205,984 | 1,925,307 | ||||||||||
Issued in reinvestment of distributions | 3,818 | 36,270 | 23,535 | 207,698 | ||||||||||
Redeemed | (293,876) | (2,630,725) | (171,010) | (1,582,378) | ||||||||||
(107,909) | (897,227) | 58,509 | 550,627 | |||||||||||
R5 Class/Shares Authorized | 20,000,000 | 20,000,000 | ||||||||||||
Sold | 437,167 | 4,100,968 | 813,486 | 7,845,594 | ||||||||||
Issued in reinvestment of distributions | 15,340 | 151,011 | 54,500 | 499,693 | ||||||||||
Redeemed | (1,013,865) | (9,420,852) | (724,082) | (7,080,246) | ||||||||||
(561,358) | (5,168,873) | 143,904 | 1,265,041 | |||||||||||
R6 Class/Shares Authorized | 1,755,000,000 | 1,750,000,000 | ||||||||||||
Sold | 65,988,501 | 642,204,796 | 75,168,927 | 733,702,437 | ||||||||||
Issued in reinvestment of distributions | 2,881,936 | 28,664,729 | 7,423,893 | 68,007,755 | ||||||||||
Redeemed | (56,402,984) | (545,078,737) | (38,706,063) | (372,848,209) | ||||||||||
12,467,453 | 125,790,788 | 43,886,757 | 428,861,983 | |||||||||||
G Class/Shares Authorized | 300,000,000 | 300,000,000 | ||||||||||||
Sold | 18,664,291 | 181,600,536 | 2,239,981 | 21,138,275 | ||||||||||
Issued in reinvestment of distributions | 811,379 | 8,168,336 | 1,399,058 | 12,849,969 | ||||||||||
Redeemed | (5,233,175) | (53,830,557) | (4,173,625) | (41,295,541) | ||||||||||
14,242,495 | 135,938,315 | (534,586) | (7,307,297) | |||||||||||
Net increase (decrease) | (26,375,901) | $ | (239,884,392) | (17,110,008) | $ | (176,532,473) |
21
6. Affiliated Company Transactions
If a fund's holding represents ownership of 5% or more of the voting securities of a company, the company is affiliated as defined in the 1940 Act. A summary of transactions for each company which is or was an affiliate at or during the period ended March 31, 2024 follows (amounts in thousands):
Company | Beginning Value | Purchase Cost | Sales Cost | Change in Net Unrealized Appreciation (Depreciation) | Ending Value | Ending Shares | Net Realized Gain (Loss) | Income | ||||||||||||||||||
A-Mark Precious Metals, Inc. | $ | 46,604 | $ | 8,122 | $ | 4,972 | $ | (5,100) | $ | 44,654 | 1,455 | $ | 507 | $ | 2,325 | |||||||||||
Compass Diversified Holdings | 88,722 | — | 5,674 | 23,582 | 106,630 | 4,430 | (743) | 4,601 | ||||||||||||||||||
Deluxe Corp. | 36,585 | 2,312 | 8,432 | 15,245 | 45,710 | 2,220 | (4,605) | 2,727 | ||||||||||||||||||
DXP Enterprises, Inc.(1)(2) | 23,703 | 5,362 | 10,688 | 11,980 | (2) | (2) | 6,460 | — | ||||||||||||||||||
Edgewell Personal Care Co. | 100,535 | 16,274 | 10,389 | (8,661) | 97,759 | 2,530 | 1,222 | 1,414 | ||||||||||||||||||
Entravision Communications Corp., Class A | 46,808 | 1,263 | 236 | (34,789) | 13,046 | 7,955 | (16) | 1,591 | ||||||||||||||||||
EVERTEC, Inc. | 111,375 | 4,248 | 5,496 | 20,745 | 130,872 | 3,280 | (589) | 646 | ||||||||||||||||||
IBEX Holdings Ltd.(1) | 17,812 | 5,141 | 1,233 | (6,741) | 14,979 | 971 | (184) | — | ||||||||||||||||||
MarineMax, Inc.(1) | 49,594 | 6,042 | 7,499 | 10,567 | 58,704 | 1,765 | (1,943) | — | ||||||||||||||||||
OneWater Marine, Inc., Class A(1) | 40,277 | — | 5,058 | 2,221 | 37,440 | 1,330 | (2,119) | — | ||||||||||||||||||
$ | 562,015 | $ | 48,764 | $ | 59,677 | $ | 29,049 | $ | 549,794 | 25,936 | $ | (2,010) | $ | 13,304 |
(1)Non-income producing.
(2)Company was not an affiliate at March 31, 2024.
7. 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.
22
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 | $ | 5,914,357,492 | $ | 32,098,166 | — | ||||||
Short-Term Investments | 77,861,212 | 34,553,244 | — | ||||||||
$ | 5,992,218,704 | $ | 66,651,410 | — | |||||||
Other Financial Instruments | |||||||||||
Forward Foreign Currency Exchange Contracts | — | $ | 423,612 | — |
8. Derivative Instruments
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. A fund will segregate cash, cash equivalents or other appropriate liquid securities on its records in amounts sufficient to meet requirements. 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 settlement 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 $31,865,519.
The value of foreign currency risk derivative instruments as of March 31, 2024, is disclosed on the Statement of Assets and Liabilities as an asset of $423,612 in unrealized appreciation on forward foreign currency exchange contracts. For the year ended March 31, 2024, the effect of foreign currency risk derivative instruments on the Statement of Operations was $754,108 in net realized gain (loss) on forward foreign currency exchange contract transactions and $413,212 in change in net unrealized appreciation (depreciation) on forward foreign currency exchange contracts.
9. Risk Factors
The value of the fund’s shares will go up and down, sometimes rapidly or unpredictably, based on the performance of the securities owned by the fund and other factors generally affecting the securities market. Market risks, including political, regulatory, economic and social developments, can affect the value of the fund’s investments. Natural disasters, public health emergencies, war, terrorism and other unforeseeable events may lead to increased market volatility and may have adverse long-term effects on world economies and markets generally.
The fund invests in common stocks of small companies. Because of this, the fund may be subject to greater risk and market fluctuations than a fund investing in larger, more established companies.
23
10. Federal Tax Information
The tax character of distributions paid during the years ended March 31, 2024 and March 31, 2023 were as follows:
2024 | 2023 | |||||||
Distributions Paid From | ||||||||
Ordinary income | $ | 70,775,922 | $ | 78,893,563 | ||||
Long-term capital gains | — | $ | 110,921,400 |
The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
As of period end, the federal tax cost of investments and the components of distributable earnings on a tax-basis were as follows:
Federal tax cost of investments | $ | 4,958,606,400 | |||
Gross tax appreciation of investments | $ | 1,342,948,471 | |||
Gross tax depreciation of investments | (242,684,757) | ||||
Net tax appreciation (depreciation) of investments | 1,100,263,714 | ||||
Net tax appreciation (depreciation) on derivatives and translation of assets and liabilities in foreign currencies | — | ||||
Net tax appreciation (depreciation) | $ | 1,100,263,714 | |||
Undistributed ordinary income | $ | 4,534,359 | |||
Accumulated long-term gains | $ | 36,225,591 |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales.
24
Financial Highlights |
For a Share Outstanding Throughout the Years Ended March 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 | |||||||||||||||||||||||||||||||||||||||||||||||
2024 | $9.24 | 0.10 | 1.62 | 1.72 | (0.10) | — | (0.10) | $10.86 | 18.72% | 1.09% | 1.09% | 1.12% | 1.12% | 46% | $750,408 | ||||||||||||||||||||||||||||||||
2023 | $10.40 | 0.07 | (0.92) | (0.85) | (0.06) | (0.25) | (0.31) | $9.24 | (8.04)% | 1.09% | 1.09% | 0.74% | 0.74% | 44% | $869,441 | ||||||||||||||||||||||||||||||||
2022 | $10.74 | 0.04 | 0.45 | 0.49 | (0.06) | (0.77) | (0.83) | $10.40 | 4.45% | 1.09% | 1.09% | 0.35% | 0.35% | 43% | $1,107,942 | ||||||||||||||||||||||||||||||||
2021 | $5.20 | 0.03 | 5.55 | 5.58 | (0.04) | — | (0.04) | $10.74 | 107.63% | 1.19% | 1.19% | 0.46% | 0.46% | 72% | $958,579 | ||||||||||||||||||||||||||||||||
2020 | $7.05 | 0.05 | (1.71) | (1.66) | (0.04) | (0.15) | (0.19) | $5.20 | (24.44)% | 1.25% | 1.25% | 0.71% | 0.71% | 71% | $439,030 | ||||||||||||||||||||||||||||||||
I Class | |||||||||||||||||||||||||||||||||||||||||||||||
2024 | $9.36 | 0.13 | 1.63 | 1.76 | (0.12) | — | (0.12) | $11.00 | 18.93% | 0.89% | 0.89% | 1.32% | 1.32% | 46% | $2,065,440 | ||||||||||||||||||||||||||||||||
2023 | $10.53 | 0.09 | (0.93) | (0.84) | (0.08) | (0.25) | (0.33) | $9.36 | (7.86)% | 0.89% | 0.89% | 0.94% | 0.94% | 44% | $1,982,752 | ||||||||||||||||||||||||||||||||
2022 | $10.86 | 0.06 | 0.46 | 0.52 | (0.08) | (0.77) | (0.85) | $10.53 | 4.70% | 0.89% | 0.89% | 0.55% | 0.55% | 43% | $2,691,383 | ||||||||||||||||||||||||||||||||
2021 | $5.26 | 0.05 | 5.61 | 5.66 | (0.06) | — | (0.06) | $10.86 | 108.04% | 0.99% | 0.99% | 0.66% | 0.66% | 72% | $2,049,527 | ||||||||||||||||||||||||||||||||
2020 | $7.13 | 0.07 | (1.74) | (1.67) | (0.05) | (0.15) | (0.20) | $5.26 | (24.30)% | 1.05% | 1.05% | 0.91% | 0.91% | 71% | $407,147 |
For a Share Outstanding Throughout the Years Ended March 31 (except as noted) | |||||||||||||||||||||||||||||||||||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||||||||||||||||||||||||||||||||||
Income From Investment Operations*: | Distributions From: | Ratio to Average Net Assets of†: | |||||||||||||||||||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Operating Expenses (before expense waiver) | Net Investment Income (Loss) | Net Investment Income (Loss) (before expense waiver) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||||||||||||||||||||||||||||||||
Y Class | |||||||||||||||||||||||||||||||||||||||||||||||
2024 | $9.37 | 0.14 | 1.64 | 1.78 | (0.13) | — | (0.13) | $11.02 | 19.19% | 0.74% | 0.74% | 1.47% | 1.47% | 46% | $64,579 | ||||||||||||||||||||||||||||||||
2023 | $10.54 | 0.10 | (0.92) | (0.82) | (0.10) | (0.25) | (0.35) | $9.37 | (7.72)% | 0.74% | 0.74% | 1.09% | 1.09% | 44% | $67,231 | ||||||||||||||||||||||||||||||||
2022 | $10.88 | 0.08 | 0.45 | 0.53 | (0.10) | (0.77) | (0.87) | $10.54 | 4.75% | 0.74% | 0.74% | 0.70% | 0.70% | 43% | $106,557 | ||||||||||||||||||||||||||||||||
2021 | $5.27 | 0.06 | 5.62 | 5.68 | (0.07) | — | (0.07) | $10.88 | 108.41% | 0.84% | 0.84% | 0.81% | 0.81% | 72% | $66,827 | ||||||||||||||||||||||||||||||||
2020 | $7.14 | 0.09 | (1.75) | (1.66) | (0.06) | (0.15) | (0.21) | $5.27 | (24.15)% | 0.90% | 0.90% | 1.06% | 1.06% | 71% | $24,079 | ||||||||||||||||||||||||||||||||
A Class | |||||||||||||||||||||||||||||||||||||||||||||||
2024 | $9.10 | 0.08 | 1.59 | 1.67 | (0.07) | — | (0.07) | $10.70 | 18.49% | 1.34% | 1.34% | 0.87% | 0.87% | 46% | $88,474 | ||||||||||||||||||||||||||||||||
2023 | $10.25 | 0.05 | (0.91) | (0.86) | (0.04) | (0.25) | (0.29) | $9.10 | (8.30)% | 1.34% | 1.34% | 0.49% | 0.49% | 44% | $89,315 | ||||||||||||||||||||||||||||||||
2022 | $10.60 | 0.01 | 0.45 | 0.46 | (0.04) | (0.77) | (0.81) | $10.25 | 4.20% | 1.34% | 1.34% | 0.10% | 0.10% | 43% | $113,658 | ||||||||||||||||||||||||||||||||
2021 | $5.13 | 0.02 | 5.47 | 5.49 | (0.02) | — | (0.02) | $10.60 | 107.16% | 1.44% | 1.44% | 0.21% | 0.21% | 72% | $94,533 | ||||||||||||||||||||||||||||||||
2020 | $6.96 | 0.03 | (1.69) | (1.66) | (0.02) | (0.15) | (0.17) | $5.13 | (24.66)% | 1.50% | 1.50% | 0.46% | 0.46% | 71% | $48,260 | ||||||||||||||||||||||||||||||||
C Class | |||||||||||||||||||||||||||||||||||||||||||||||
2024 | $8.37 | 0.01 | 1.46 | 1.47 | (0.01) | — | (0.01) | $9.83 | 17.54% | 2.09% | 2.09% | 0.12% | 0.12% | 46% | $21,117 | ||||||||||||||||||||||||||||||||
2023 | $9.48 | (0.02) | (0.84) | (0.86) | —(3) | (0.25) | (0.25) | $8.37 | (8.99)% | 2.09% | 2.09% | (0.26)% | (0.26)% | 44% | $21,277 | ||||||||||||||||||||||||||||||||
2022 | $9.90 | (0.06) | 0.42 | 0.36 | (0.01) | (0.77) | (0.78) | $9.48 | 3.49% | 2.09% | 2.09% | (0.65)% | (0.65)% | 43% | $26,317 | ||||||||||||||||||||||||||||||||
2021 | $4.82 | (0.04) | 5.12 | 5.08 | — | — | — | $9.90 | 105.39% | 2.19% | 2.19% | (0.54)% | (0.54)% | 72% | $15,448 | ||||||||||||||||||||||||||||||||
2020 | $6.57 | (0.02) | (1.58) | (1.60) | — | (0.15) | (0.15) | $4.82 | (25.11)% | 2.25% | 2.25% | (0.29)% | (0.29)% | 71% | $2,556 |
For a Share Outstanding Throughout the Years Ended March 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 | |||||||||||||||||||||||||||||||||||||||||||||||
2024 | $9.02 | 0.06 | 1.57 | 1.63 | (0.05) | — | (0.05) | $10.60 | 18.14% | 1.59% | 1.59% | 0.62% | 0.62% | 46% | $7,104 | ||||||||||||||||||||||||||||||||
2023 | $10.16 | 0.02 | (0.89) | (0.87) | (0.02) | (0.25) | (0.27) | $9.02 | (8.44)% | 1.59% | 1.59% | 0.24% | 0.24% | 44% | $7,017 | ||||||||||||||||||||||||||||||||
2022 | $10.53 | (0.02) | 0.44 | 0.42 | (0.02) | (0.77) | (0.79) | $10.16 | 3.87% | 1.59% | 1.59% | (0.15)% | (0.15)% | 43% | $7,314 | ||||||||||||||||||||||||||||||||
2021 | $5.10 | —(3) | 5.43 | 5.43 | —(3) | — | —(3) | $10.53 | 106.61% | 1.69% | 1.69% | (0.04)% | (0.04)% | 72% | $5,120 | ||||||||||||||||||||||||||||||||
2020 | $6.92 | 0.01 | (1.68) | (1.67) | —(3) | (0.15) | (0.15) | $5.10 | (24.80)% | 1.75% | 1.75% | 0.21% | 0.21% | 71% | $2,299 | ||||||||||||||||||||||||||||||||
R5 Class | |||||||||||||||||||||||||||||||||||||||||||||||
2024 | $9.37 | 0.13 | 1.63 | 1.76 | (0.12) | — | (0.12) | $11.01 | 18.91% | 0.89% | 0.89% | 1.32% | 1.32% | 46% | $10,710 | ||||||||||||||||||||||||||||||||
2023 | $10.54 | 0.09 | (0.93) | (0.84) | (0.08) | (0.25) | (0.33) | $9.37 | (7.85)% | 0.89% | 0.89% | 0.94% | 0.94% | 44% | $14,369 | ||||||||||||||||||||||||||||||||
2022 | $10.87 | 0.06 | 0.46 | 0.52 | (0.08) | (0.77) | (0.85) | $10.54 | 4.70% | 0.89% | 0.89% | 0.55% | 0.55% | 43% | $14,646 | ||||||||||||||||||||||||||||||||
2021 | $5.26 | 0.05 | 5.62 | 5.67 | (0.06) | — | (0.06) | $10.87 | 108.23% | 0.99% | 0.99% | 0.66% | 0.66% | 72% | $9,870 | ||||||||||||||||||||||||||||||||
2020 | $7.14 | 0.06 | (1.74) | (1.68) | (0.05) | (0.15) | (0.20) | $5.26 | (24.41)% | 1.05% | 1.05% | 0.91% | 0.91% | 71% | $3,373 | ||||||||||||||||||||||||||||||||
R6 Class | |||||||||||||||||||||||||||||||||||||||||||||||
2024 | $9.36 | 0.14 | 1.64 | 1.78 | (0.13) | — | (0.13) | $11.01 | 19.21% | 0.74% | 0.74% | 1.47% | 1.47% | 46% | $2,479,758 | ||||||||||||||||||||||||||||||||
2023 | $10.53 | 0.11 | (0.93) | (0.82) | (0.10) | (0.25) | (0.35) | $9.36 | (7.73)% | 0.74% | 0.74% | 1.09% | 1.09% | 44% | $1,992,368 | ||||||||||||||||||||||||||||||||
2022 | $10.86 | 0.08 | 0.46 | 0.54 | (0.10) | (0.77) | (0.87) | $10.53 | 4.86% | 0.74% | 0.74% | 0.70% | 0.70% | 43% | $1,779,113 | ||||||||||||||||||||||||||||||||
2021 | $5.26 | 0.06 | 5.61 | 5.67 | (0.07) | — | (0.07) | $10.86 | 108.42% | 0.84% | 0.84% | 0.81% | 0.81% | 72% | $943,344 | ||||||||||||||||||||||||||||||||
2020 | $7.13 | 0.08 | (1.74) | (1.66) | (0.06) | (0.15) | (0.21) | $5.26 | (24.19)% | 0.90% | 0.90% | 1.06% | 1.06% | 71% | $290,444 |
For a Share Outstanding Throughout the Years Ended March 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) | |||||||||||||||||||||||||||||||||
G Class | |||||||||||||||||||||||||||||||||||||||||||||||
2024 | $9.39 | 0.22 | 1.64 | 1.86 | (0.21) | — | (0.21) | $11.04 | 20.01% | 0.00% | 0.74% | 2.21% | 1.47% | 46% | $510,166 | ||||||||||||||||||||||||||||||||
2023 | $10.55 | 0.18 | (0.93) | (0.75) | (0.16) | (0.25) | (0.41) | $9.39 | (7.04)% | 0.01% | 0.74% | 1.82% | 1.09% | 44% | $300,172 | ||||||||||||||||||||||||||||||||
2022 | $10.89 | 0.16 | 0.45 | 0.61 | (0.18) | (0.77) | (0.95) | $10.55 | 5.62% | 0.00% | 0.74% | 1.44% | 0.70% | 43% | $343,209 | ||||||||||||||||||||||||||||||||
2021 | $5.29 | 0.12 | 5.63 | 5.75 | (0.15) | — | (0.15) | $10.89 | 110.06% | 0.00% | 0.84% | 1.65% | 0.81% | 72% | $359,758 | ||||||||||||||||||||||||||||||||
2020 | $7.25 | 0.15 | (1.85) | (1.70) | (0.11) | (0.15) | (0.26) | $5.29 | (24.58)% | 0.00% | 0.90% | 1.96% | 1.06% | 71% | $139,749 |
Notes to Financial Highlights |
(1)Computed using average shares outstanding throughout the period.
(2)Total returns are calculated based on the net asset value of the last business day and do not reflect applicable sales charges, if any. Total returns for periods less than one year are not annualized.
(3)Per-share amount was less than $0.005.
*The amount shown for a share outstanding throughout the period may not correlate with the Statement(s) of Operations or precisely reflect the class expense differentials due to the timing of transactions in shares of a fund in relation to income earned and/or fluctuations in the fair value of a fund's investments.
† Ratios for periods less than one year are annualized. Zero balances may reflect amounts less than 0.005%.
See Notes to Financial Statements.
Report of Independent Registered Public Accounting Firm |
To the shareholders of the Small Cap Value Fund and the Board of Directors of American Century Capital Portfolios, Inc.
Opinion on the Financial Statements and Financial Highlights
We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of Small Cap Value Fund (the “Fund”), one of the funds constituting the American Century Capital Portfolios, Inc., as of March 31, 2024, the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Fund as of March 31, 2024, and the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on the Fund’s financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. Our procedures included confirmation of securities owned as of March 31, 2024, by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
/s/ Deloitte & Touche LLP
Kansas City, Missouri
May 16, 2024
We have served as the auditor of one or more American Century investment companies since 1997.
29
Management |
The Board of Directors
The individuals listed below serve as directors of the funds. Each director will continue to serve in this capacity until death, retirement, resignation or removal from office. The board has adopted a mandatory retirement age for directors who are not “interested persons,” as that term is defined in the Investment Company Act (independent directors). Independent directors shall retire on December 31 of the year in which they reach their 75th birthday.
Jonathan S. Thomas is an “interested person” because he currently serves as President and Chief Executive Officer of American Century Companies, Inc. (ACC), the parent company of American Century Investment Management, Inc. (ACIM or the advisor). The other directors (more than three-fourths of the total number) are independent. They are not employees, directors or officers of, and have no financial interest in, ACC or any of its wholly owned, direct or indirect, subsidiaries, including ACIM, American Century Investment Services, Inc. (ACIS) and American Century Services, LLC (ACS), and they do not have any other affiliations, positions or relationships that would cause them to be considered “interested persons” under the Investment Company Act. The directors serve in this capacity for seven (in the case of Jonathan S. Thomas, 16; and Thomas W. Bunn, 8) registered investment companies in the American Century Investments family of funds.
The following table presents additional information about the directors. The mailing address for each director is 4500 Main Street, Kansas City, Missouri 64111.
Name (Year of Birth) | Position(s) Held with Funds | Length of Time Served | Principal Occupation(s) During Past 5 Years | Number of American Century Portfolios Overseen by Director | Other Directorships Held During Past 5 Years | ||||||||||||
Independent Directors | |||||||||||||||||
Brian Bulatao (1964) | Director | Since 2022 | Chief Administrative Officer, Activision Blizzard, Inc. (2021 to present); Under Secretary of State for Management, U.S. Department of State (2018 to 2021) | 64 | None | ||||||||||||
Thomas W. Bunn (1953) | Director | Since 2017 | Retired | 119 | None | ||||||||||||
Chris H. Cheesman (1962) | Director | Since 2019 | Retired | 64 | Alleghany Corporation (2021 to 2022) | ||||||||||||
Barry Fink (1955) | Director | Since 2012 (independent since 2016) | Retired | 64 | None | ||||||||||||
Rajesh K. Gupta (1960) | Director | Since 2019 | Partner Emeritus, SeaCrest Investment Management and SeaCrest Wealth Management (2019 to present) | 64 | None |
30
Name (Year of Birth) | Position(s) Held with Funds | Length of Time Served | Principal Occupation(s) During Past 5 Years | Number of American Century Portfolios Overseen by Director | Other Directorships Held During Past 5 Years | ||||||||||||
Independent Directors | |||||||||||||||||
Lynn M. Jenkins (1963) | Director | Since 2019 | Senior Policy Advisor, Capital Hill Policy Group (2020 to present); Consultant, LJ Strategies (2019 to 2023) | 64 | MGP Ingredients, Inc. (2019 to 2021) | ||||||||||||
Jan M. Lewis (1957) | Director and Board Chair | Since 2011 (Board Chair since 2022) | Retired | 64 | None | ||||||||||||
Gary C. Meltzer (1963) | Director | Since 2022 | Advisor, Pontoro (2021 to present); Executive Advisor, Consultant and Investor, Harris Ariel Advisory LLC (2020 to present); Managing Partner, PricewaterhouseCoopers LLP (1985 to 2020) | 64 | ExcelFin Acquisition Corp., Apollo Realty Income Solutions, Inc. | ||||||||||||
Interested Director | |||||||||||||||||
Jonathan S. Thomas (1963) | Director | Since 2007 | President and Chief Executive Officer, ACC (2007 to present). Also serves as Chief Executive Officer, ACS; Director, ACC and other ACC subsidiaries | 150 | None |
The Statement of Additional Information has additional information about the fund's directors and is available without charge, upon request, by calling 1-800-345-2021.
31
Officers
The following table presents certain information about the executive officers of the funds. Each officer serves as an officer for 16 investment companies in the American Century family of funds. No officer is compensated for his or her service as an officer of the funds. The listed officers are interested persons of the funds and are appointed or re-appointed on an annual basis. The mailing address for each officer listed below is 4500 Main Street, Kansas City, Missouri 64111.
Name (Year of Birth) | Offices with the Funds | Principal Occupation(s) During the Past Five Years | ||||||
Patrick Bannigan (1965) | President since 2019 | Executive Vice President and Director, ACC (2012 to present); Chief Financial Officer, Chief Accounting Officer and Treasurer, ACC (2015 to present); Also serves as President, ACS; Vice President, ACIM; Chief Financial Officer, Chief Accounting Officer and/or Director, ACIM, ACS and other ACC subsidiaries | ||||||
R. Wes Campbell (1974) | Chief Financial Officer and Treasurer since 2018; Vice President since 2023 | Vice President, ACS (2020 to present); Investment Operations and Investment Accounting, ACS (2000 to present) | ||||||
Amy D. Shelton (1964) | Chief Compliance Officer and Vice President since 2014 | Chief Compliance Officer, American Century funds, (2014 to present); Chief Compliance Officer, ACIM (2014 to present); Chief Compliance Officer, ACIS (2009 to present). Also serves as Vice President, ACIS | ||||||
John Pak (1968) | General Counsel and Senior Vice President since 2021 | General Counsel and Senior Vice President, ACC (2021 to present); Also serves as General Counsel and Senior Vice President, ACIM, ACS and ACIS. Chief Legal Officer of Investment and Wealth Management, The Bank of New York Mellon (2014 to 2021) | ||||||
Cihan Kasikara (1974) | Vice President since 2023 | Senior Vice President, ACS (2022 to present); Treasurer, ACS (2023 to present); Vice President, ACS (2020 to 2022); Vice President, Franklin Templeton (2015 to 2020) | ||||||
Kathleen Gunja Nelson (1976) | Vice President since 2023 | Vice President, ACS (2017 to present) | ||||||
Ward D. Stauffer (1960) | Secretary since 2005 | Attorney, ACC (2003 to present) |
32
Liquidity Risk Management Program |
The Fund has adopted a liquidity risk management program (the “program”). The Fund’s Board of Directors (the "Board") has designated American Century Investment Management, Inc. (“ACIM”) as the administrator of the program. Personnel of ACIM or its affiliates, including members of ACIM’s Investment Oversight Committee who are members of ACIM’s Investment Management and Global Analytics departments, conduct the day-to-day operation of the program pursuant to the program.
Under the program, ACIM manages the Fund’s liquidity risk, which is the risk that the Fund could not meet shareholder redemption requests without significant dilution of remaining shareholders’ interests in the Fund. This risk is managed by monitoring the degree of liquidity of the Fund’s investments, limiting the amount of the Fund’s illiquid investments, and utilizing various risk management tools and facilities available to the Fund for meeting shareholder redemptions, among other means. ACIM’s process of determining the degree of liquidity of certain investments held by the Fund is supported by a third-party liquidity assessment vendor.
The Board reviewed a report prepared by ACIM regarding the operation and effectiveness of the program for the period January 1, 2023 through December 31, 2023. No significant liquidity events impacting the Fund were noted in the report. In addition, ACIM provided its assessment that the program had been effective in managing the Fund’s liquidity risk.
33
Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain retirement accounts are subject to federal income tax withholding at the IRS default rate of 10%.* 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.
You may elect a different withholding rate, or request zero withholding, by submitting an acceptable IRS Form W-4R election with your distribution request. You may notify us of your W-4R election by telephone, on our distribution forms, on IRS Form W-4R, or through other acceptable electronic means. If your withholding election is for an automatic withdrawal plan, you have the right to revoke your election at any time and any election you make will remain in effect until revoked by filing a new election.
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 according to state regulations if, at the time of your distribution, your tax residency is within one of the mandatory withholding states.
*Some 403(b), 457 and qualified retirement plan distributions may be subject to 20% mandatory withholding, as they are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
A description of the policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund is available without charge, upon request, by calling 1-800-345-2021. It is also available on American Century Investments’ website at americancentury.com/proxy and on the Securities and Exchange Commission’s website at sec.gov. Information regarding how the investment advisor voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on americancentury.com/proxy. It is also available at sec.gov.
Quarterly Portfolio Disclosure
The fund files its complete schedule of portfolio holdings with the Securities and Exchange
Commission (SEC) for the first and third quarters of each fiscal year as an exhibit to its reports on
Form N-PORT. These portfolio holdings are available on the fund's website at
americancentury.com and, upon request, by calling 1-800-345-2021. The fund’s Form N-PORT
reports are available on the SEC’s website at sec.gov.
34
Other Tax Information
The following information is provided pursuant to provisions of the Internal Revenue Code.
The fund hereby designates up to the maximum amount allowable as qualified dividend income for the fiscal year ended March 31, 2024.
For corporate taxpayers, the fund hereby designates $70,775,922, or up to the maximum amount allowable, of ordinary income distributions paid during the fiscal year ended March 31, 2024 as qualified for the corporate dividends received deduction.
35
Notes |
36
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Contact Us | americancentury.com | |||||||
Automated Information Line | 1-800-345-8765 | |||||||
Investor Services Representative | 1-800-345-2021 or 816-531-5575 | |||||||
Investors Using Advisors | 1-800-378-9878 | |||||||
Business, Not-For-Profit, Employer-Sponsored Retirement Plans | 1-800-345-3533 | |||||||
Banks and Trust Companies, Broker-Dealers, Financial Professionals, Insurance Companies | 1-800-345-6488 | |||||||
Telecommunications Relay Service for the Deaf | 711 | |||||||
American Century Capital Portfolios, Inc. | ||||||||
Investment Advisor: American Century Investment Management, Inc. Kansas City, Missouri | ||||||||
This report and the statements it contains are submitted for the general information of our shareholders. The report is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus. | ||||||||
©2024 American Century Proprietary Holdings, Inc. All rights reserved. CL-ANN-92272 2405 |
![image22.jpg](https://capedge.com/proxy/N-CSR/0000908186-24-000015/image22.jpg)
Annual Report | |||||
March 31, 2024 | |||||
Value Fund | |||||
Investor Class (TWVLX) | |||||
I Class (AVLIX) | |||||
Y Class (AVUYX) | |||||
A Class (TWADX) | |||||
C Class (ACLCX) | |||||
R Class (AVURX) | |||||
R5 Class (AVUGX) | |||||
R6 Class (AVUDX) |
The Securities and Exchange Commission (SEC) adopted new rules that will require annual and semiannual reports to transition to a new format known as a Tailored Shareholder Report beginning in July 2024. The amendments will require the transmission of a concise report highlighting key fund information to investors. The detailed financial statements will remain available on our website, will be delivered to investors free of charge upon request, and will continue to be filed with the SEC.
Table of Contents |
President’s Letter | |||||
Performance | |||||
Portfolio Commentary | |||||
Fund Characteristics | |||||
Shareholder Fee Example | |||||
Schedule of Investments | |||||
Statement of Assets and Liabilities | |||||
Statement of Operations | |||||
Statement of Changes in Net Assets | |||||
Notes to Financial Statements | |||||
Financial Highlights | |||||
Report of Independent Registered Public Accounting Firm | |||||
Management | |||||
Liquidity Risk Management Program | |||||
Additional Information |
Any opinions expressed in this report reflect those of the author as of the date of the report, and do not necessarily represent the opinions of American Century Investments® or any other person in the American Century Investments organization. Any such opinions are subject to change at any time based upon market or other conditions and American Century Investments disclaims any responsibility to update such opinions. These opinions may not be relied upon as investment advice and, because investment decisions made by American Century Investments funds are based on numerous factors, may not be relied upon as an indication of trading intent on behalf of any American Century Investments fund. Security examples are used for representational purposes only and are not intended as recommendations to purchase or sell securities. Performance information for comparative indices and securities is provided to American Century Investments by third party vendors. To the best of American Century Investments’ knowledge, such information is accurate at the time of printing.
President’s Letter |
![image23.jpg](https://capedge.com/proxy/N-CSR/0000908186-24-000015/image23.jpg)
Dear Investor:
Thank you for reviewing this annual report for the period ending March 31, 2024. Annual reports help convey important information about fund returns, including market factors that affected performance. For additional investment insights, please visit americancentury.com.
Stocks Surged While Bonds Delivered Modest Gains
Soaring U.S. Treasury yields weighed on bond returns for the first six months of the reporting period. Meanwhile, inflation slowed but remained well above the Federal Reserve’s (Fed’s) target, lending conditions tightened, and recession risk rose. This fueled expectations for a shift in Fed policy, which, along with better-than-expected earnings, helped U.S. stocks deliver modest gains.
The Fed lifted rates in May, paused in June and hiked again in July to a range of 5.25% to 5.5%, a 22-year high. The Fed left rates unchanged in September but warned that persistent above-target inflation may require more tightening. This news pushed Treasury yields to multiyear highs in October and sent stocks tumbling. By November, inflation showed signs of moderating, and the Fed held rates steady again, reviving investor enthusiasm. Then, in December, Fed policymakers expressed more confidence about the inflation outlook and forecasted three rate cuts for 2024. Against this backdrop, recession fears eased, Treasury yields declined, and stocks and bonds ended 2023 on a strong note.
Despite the Fed’s continued pause, yields reversed course again in early 2024 amid a steady stream of better-than-expected economic data and persistent inflation. But the bond market’s late-2023 rally helped the Bloomberg U.S. Aggregate Bond Index maintain a gain of 1.70% for the 12-month period. Most stock indices continued to rally into 2024, buoyed by solid corporate earnings and expectations for Fed rate cuts. The S&P 500 Index returned 29.88% for the 12-month period, and growth stocks generally outperformed value stocks.
Remaining Diligent in Uncertain Times
We expect market volatility to linger as investors navigate a complex environment of persistent inflation, still-tight financial conditions, political uncertainty and slowing growth. In addition, the Israel-Hamas war and other tensions in the Middle East complicate the global backdrop and represent additional considerations for our investment teams.
Our firm has a long history of helping clients weather unpredictable and volatile markets, and we’re determined to meet today’s challenges. Thank you for your trust and confidence in American Century Investments.
With appreciation and respect,
![image48a16a.jpg](https://capedge.com/proxy/N-CSR/0000908186-24-000015/image48a16a.jpg)
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
2
Performance |
Total Returns as of March 31, 2024 | ||||||||||||||||||||
Average Annual Returns | ||||||||||||||||||||
Ticker Symbol | 1 year | 5 years | 10 years | Since Inception | Inception Date | |||||||||||||||
Investor Class | TWVLX | 14.62% | 10.45% | 8.55% | — | 9/1/93 | ||||||||||||||
Russell 1000 Value Index | — | 20.27% | 10.32% | 9.01% | — | — | ||||||||||||||
I Class | AVLIX | 14.95% | 10.67% | 8.77% | — | 7/31/97 | ||||||||||||||
Y Class | AVUYX | 15.12% | 10.83% | — | 8.91% | 4/10/17 | ||||||||||||||
A Class | TWADX | 10/2/96 | ||||||||||||||||||
No sales charge | 14.51% | 10.19% | 8.29% | — | ||||||||||||||||
With sales charge | 7.92% | 8.90% | 7.65% | — | ||||||||||||||||
C Class | ACLCX | 13.59% | 9.36% | 7.46% | — | 6/4/01 | ||||||||||||||
R Class | AVURX | 14.06% | 9.88% | 8.00% | — | 7/29/05 | ||||||||||||||
R5 Class | AVUGX | 14.81% | 10.65% | — | 8.74% | 4/10/17 | ||||||||||||||
R6 Class | AVUDX | 15.12% | 10.83% | 8.93% | — | 7/26/13 |
Average annual returns since inception are presented when ten years of performance history is not available. Fund returns would have been lower if a portion of the fees had not been waived.
C Class shares will automatically convert to A Class shares after being held for approximately eight years. C Class average annual returns do not reflect this conversion.
Sales charges include initial sales charges and contingent deferred sales charges (CDSCs), as applicable. A Class shares have a 5.75% maximum initial sales charge and may be subject to a maximum CDSC of 1.00%. C Class shares redeemed within 12 months of purchase are subject to a maximum CDSC of 1.00%. The SEC requires that mutual funds provide performance information net of maximum sales charges in all cases where charges could be applied.
Data presented reflect past performance. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance shown. Total returns for periods less than one year are not annualized. Investment return and principal value will fluctuate, and redemption value may be more or less than original cost. Data assumes reinvestment of dividends and capital gains, and none of the charts reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. To obtain performance data current to the most recent month end, please call 1-800-345-2021 or visit americancentury.com. For additional information about the fund, please consult the prospectus.
3
Growth of $10,000 Over 10 Years | ||
$10,000 investment made March 31, 2014 | ||
Performance for other share classes will vary due to differences in fee structure. |
![chart-63b978fa2bf74900b40a.jpg](https://capedge.com/proxy/N-CSR/0000908186-24-000015/chart-63b978fa2bf74900b40a.jpg)
Value on March 31, 2024 | |||||
Investor Class — $22,707 | |||||
Russell 1000 Value Index — $23,696 | |||||
Ending value of Investor Class would have been lower if a portion of the fees had not been waived.
Total Annual Fund Operating Expenses | |||||||||||||||||||||||
Investor Class | I Class | Y Class | A Class | C Class | R Class | R5 Class | R6 Class | ||||||||||||||||
1.02% | 0.82% | 0.67% | 1.27% | 2.02% | 1.52% | 0.82% | 0.67% |
The total annual fund operating expenses shown is as stated in the fund’s prospectus current as of the date of this report. The prospectus may vary from the expense ratio shown elsewhere in this report because it is based on a different time period, includes acquired fund fees and expenses, and, if applicable, does not include fee waivers or expense reimbursements.
Data presented reflect past performance. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance shown. Total returns for periods less than one year are not annualized. Investment return and principal value will fluctuate, and redemption value may be more or less than original cost. Data assumes reinvestment of dividends and capital gains, and none of the charts reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. To obtain performance data current to the most recent month end, please call 1-800-345-2021 or visit americancentury.com. For additional information about the fund, please consult the prospectus.
4
Portfolio Commentary |
Portfolio Managers: Michael Liss, David Byrns, Philip Sundell, Kevin Toney and Brian Woglom
Performance Summary
Value returned 14.62%* for the fiscal year ended March 31, 2024, compared with the 20.27% return of its benchmark, the Russell 1000 Value Index. The fund’s return reflects operating expenses, while the index’s return does not.
Value’s underperformance relative to the benchmark was led by stock selections and allocations in both the industrials and communication services sectors. Meanwhile, stock decisions and allocations in financials and utilities benefited performance.
Industrials and Communication Services Detracted
Our choice of investments in the industrials sector hindered performance. Heartland Express was a notable detractor. During the period, shares of this trucking company underperformed, driven by a weak freight market and inflation pressure from driver pay. These headwinds weighed on revenues and margins. An underweight to the sector, including no exposure to key benchmark holdings, also pressured returns.
Communication services weighed on results. A lack of investment in Meta Platforms and other benchmark holdings detracted from relative performance. An overweight position in AT&T also negatively impacted performance as U.S. telecommunications companies were pressured by fears that Amazon may be entering the wireless market. AT&T’s shares were also pressured by disappointing financial results.
Advance Auto Parts was a detractor. Shares of this automotive replacement parts retailer underperformed due to a quarterly earnings miss and guidance reduction. We exited the position as we no longer favored its risk/reward profile.
Financials and Utilities Contributed
Selection and the choice to be overweight in financials, particularly in the banking industry, gave the fund’s performance a boost. Overweight positions in several names in the banking and insurance industries aided relative performance. The Allstate Corp. was a top contributor as the insurance company recently improved its profitability after implementing policy increases, particularly for its automobile insurance policies. Meanwhile, U.S. Bancorp, along with other banks, benefited from reduced interest rate risk and credit risk.
Utilities buoyed results. Security selection and an underweight to the utilities sector benefited relative returns. Utilities in general underperformed during the period, and the portfolio’s lack of exposure to select benchmark names, including NextEra Energy, had a positive impact on overall performance.
Elsewhere, Cardinal Health contributed. During the period, shares of this health care company outperformed on solid quarterly results and a strong long-term outlook for its two businesses. Much-needed clarity on the outlines of an opioid litigation settlement also supported shares. We exited the position after it significantly outperformed and used the proceeds to fund positions in companies that we believe offered more favorable risk/reward profiles.
*All fund returns referenced in this commentary are for Investor Class shares. Fund returns would have been
lower if a portion of the fees had not been waived. Performance for other share classes will vary due to differences in fee structure; when Investor Class performance exceeds that of the index, other share classes may not. See page 3 for returns for all share classes.
5
Fund Characteristics |
MARCH 31, 2024 | |||||
Types of Investments in Portfolio | % of net assets | ||||
Common Stocks | 97.5% | ||||
Short-Term Investments | 2.0% | ||||
Other Assets and Liabilities | 0.5% | ||||
Top Five Industries | % of net assets | ||||
Banks | 10.3% | ||||
Pharmaceuticals | 8.5% | ||||
Oil, Gas and Consumable Fuels | 7.4% | ||||
Capital Markets | 5.4% | ||||
Health Care Equipment and Supplies | 5.4% |
6
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 October 1, 2023 to March 31, 2024.
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 mutual fund, or I Class shares of the American Century Diversified Bond Fund, in an American Century Investments account (i.e., not through a financial intermediary or employer-sponsored retirement plan account), American Century Investments may charge you a $25 annual account maintenance fee if the value of those shares is less than $10,000. We will redeem shares automatically in one of your accounts to pay the $25 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.
7
Beginning Account Value 10/1/23 | Ending Account Value 3/31/24 | Expenses Paid During Period(1) 10/1/23 - 3/31/24 | Annualized Expense Ratio(1) | |||||||||||
Actual | ||||||||||||||
Investor Class | $1,000 | $1,161.10 | $5.40 | 1.00% | ||||||||||
I Class | $1,000 | $1,163.20 | $4.33 | 0.80% | ||||||||||
Y Class | $1,000 | $1,164.10 | $3.52 | 0.65% | ||||||||||
A Class | $1,000 | $1,159.90 | $6.75 | 1.25% | ||||||||||
C Class | $1,000 | $1,155.50 | $10.78 | 2.00% | ||||||||||
R Class | $1,000 | $1,156.90 | $8.09 | 1.50% | ||||||||||
R5 Class | $1,000 | $1,161.80 | $4.32 | 0.80% | ||||||||||
R6 Class | $1,000 | $1,162.60 | $3.51 | 0.65% | ||||||||||
Hypothetical | ||||||||||||||
Investor Class | $1,000 | $1,020.00 | $5.05 | 1.00% | ||||||||||
I Class | $1,000 | $1,021.00 | $4.04 | 0.80% | ||||||||||
Y Class | $1,000 | $1,021.75 | $3.29 | 0.65% | ||||||||||
A Class | $1,000 | $1,018.75 | $6.31 | 1.25% | ||||||||||
C Class | $1,000 | $1,015.00 | $10.08 | 2.00% | ||||||||||
R Class | $1,000 | $1,017.50 | $7.57 | 1.50% | ||||||||||
R5 Class | $1,000 | $1,021.00 | $4.04 | 0.80% | ||||||||||
R6 Class | $1,000 | $1,021.75 | $3.29 | 0.65% |
(1)Expenses are equal to the class's annualized expense ratio listed in the table above, multiplied by the average account value over the period, multiplied by 183, the number of days in the most recent fiscal half-year, divided by 366, to reflect the one-half year period. Annualized expense ratio reflects actual expenses, including any applicable fee waivers or expense reimbursements and excluding any acquired fund fees and expenses.
8
Schedule of Investments |
MARCH 31, 2024
Shares | Value | |||||||
COMMON STOCKS — 97.5% | ||||||||
Aerospace and Defense — 1.9% | ||||||||
L3Harris Technologies, Inc. | 61,510 | $ | 13,107,781 | |||||
RTX Corp. | 291,350 | 28,415,365 | ||||||
41,523,146 | ||||||||
Air Freight and Logistics — 1.3% | ||||||||
United Parcel Service, Inc., Class B | 197,350 | 29,332,130 | ||||||
Automobile Components — 1.4% | ||||||||
Aptiv PLC(1) | 183,380 | 14,606,217 | ||||||
BorgWarner, Inc. | 476,412 | 16,550,553 | ||||||
31,156,770 | ||||||||
Automobiles — 0.8% | ||||||||
General Motors Co. | 421,854 | 19,131,079 | ||||||
Banks — 10.3% | ||||||||
Bank of America Corp. | 1,503,870 | 57,026,750 | ||||||
JPMorgan Chase & Co. | 323,471 | 64,791,241 | ||||||
PNC Financial Services Group, Inc. | 108,180 | 17,481,888 | ||||||
Truist Financial Corp. | 659,465 | 25,705,946 | ||||||
U.S. Bancorp | 1,121,405 | 50,126,804 | ||||||
Wells Fargo & Co. | 249,298 | 14,449,312 | ||||||
229,581,941 | ||||||||
Beverages — 2.1% | ||||||||
Anheuser-Busch InBev SA | 129,515 | 7,884,093 | ||||||
Heineken Holding NV | 98,280 | 7,931,584 | ||||||
Heineken NV | 149,170 | 14,381,119 | ||||||
Pernod Ricard SA | 107,030 | 17,326,448 | ||||||
47,523,244 | ||||||||
Building Products — 0.5% | ||||||||
Cie de Saint-Gobain SA | 144,450 | 11,211,299 | ||||||
Capital Markets — 5.4% | ||||||||
Bank of New York Mellon Corp. | 668,970 | 38,546,051 | ||||||
BlackRock, Inc. | 15,570 | 12,980,709 | ||||||
Charles Schwab Corp. | 261,800 | 18,938,612 | ||||||
Invesco Ltd. | 1,130,636 | 18,757,251 | ||||||
Northern Trust Corp. | 215,352 | 19,149,100 | ||||||
State Street Corp. | 164,850 | 12,746,202 | ||||||
121,117,925 | ||||||||
Chemicals — 0.5% | ||||||||
Akzo Nobel NV | 149,620 | 11,179,226 | ||||||
Communications Equipment — 3.4% | ||||||||
Cisco Systems, Inc. | 1,061,644 | 52,986,652 | ||||||
F5, Inc.(1) | 118,027 | 22,376,739 | ||||||
75,363,391 | ||||||||
Consumer Staples Distribution & Retail — 2.5% | ||||||||
Dollar Tree, Inc.(1) | 180,030 | 23,970,995 | ||||||
Koninklijke Ahold Delhaize NV | 1,036,915 | 31,026,340 | ||||||
54,997,335 | ||||||||
Containers and Packaging — 0.7% | ||||||||
Packaging Corp. of America | 85,100 | 16,150,278 |
9
Shares | Value | |||||||
Diversified Telecommunication Services — 3.6% | ||||||||
AT&T, Inc. | 1,805,396 | $ | 31,774,970 | |||||
Verizon Communications, Inc. | 1,149,362 | 48,227,229 | ||||||
80,002,199 | ||||||||
Electric Utilities — 3.2% | ||||||||
Duke Energy Corp. | 231,710 | 22,408,674 | ||||||
Edison International | 317,110 | 22,429,190 | ||||||
Evergy, Inc. | 266,760 | 14,239,649 | ||||||
Eversource Energy | 196,250 | 11,729,863 | ||||||
70,807,376 | ||||||||
Electrical Equipment — 1.4% | ||||||||
Emerson Electric Co. | 165,653 | 18,788,363 | ||||||
Signify NV | 379,330 | 11,677,475 | ||||||
30,465,838 | ||||||||
Energy Equipment and Services — 1.9% | ||||||||
Baker Hughes Co. | 703,948 | 23,582,258 | ||||||
Schlumberger NV | 326,276 | 17,883,188 | ||||||
41,465,446 | ||||||||
Entertainment — 1.3% | ||||||||
Walt Disney Co. | 244,850 | 29,959,846 | ||||||
Financial Services — 4.0% | ||||||||
Berkshire Hathaway, Inc., Class A(1) | 129 | 81,842,760 | ||||||
Berkshire Hathaway, Inc., Class B(1) | 17,675 | 7,432,691 | ||||||
89,275,451 | ||||||||
Food Products — 3.3% | ||||||||
Conagra Brands, Inc. | 1,072,818 | 31,798,326 | ||||||
Danone SA | 174,820 | 11,301,207 | ||||||
JDE Peet's NV | 391,458 | 8,222,575 | ||||||
Mondelez International, Inc., Class A | 311,511 | 21,805,770 | ||||||
73,127,878 | ||||||||
Gas Utilities — 1.0% | ||||||||
Atmos Energy Corp. | 87,264 | 10,373,071 | ||||||
ONE Gas, Inc. | 179,560 | 11,587,007 | ||||||
21,960,078 | ||||||||
Ground Transportation — 0.7% | ||||||||
Heartland Express, Inc. | 1,304,159 | 15,571,658 | ||||||
Health Care Equipment and Supplies — 5.4% | ||||||||
GE HealthCare Technologies, Inc. | 100,856 | 9,168,819 | ||||||
Medtronic PLC | 802,810 | 69,964,892 | ||||||
Zimmer Biomet Holdings, Inc. | 314,247 | 41,474,319 | ||||||
120,608,030 | ||||||||
Health Care Providers and Services — 3.9% | ||||||||
CVS Health Corp. | 381,940 | 30,463,534 | ||||||
Henry Schein, Inc.(1) | 226,000 | 17,067,520 | ||||||
Laboratory Corp. of America Holdings | 93,040 | 20,325,518 | ||||||
Universal Health Services, Inc., Class B | 105,260 | 19,205,740 | ||||||
87,062,312 | ||||||||
Health Care REITs — 0.7% | ||||||||
Healthpeak Properties, Inc. | 789,610 | 14,805,187 | ||||||
Hotels, Restaurants and Leisure — 0.5% | ||||||||
Sodexo SA | 131,170 | 11,244,317 | ||||||
Household Durables — 0.6% | ||||||||
Mohawk Industries, Inc.(1) | 100,940 | 13,212,037 |
10
Shares | Value | |||||||
Household Products — 1.7% | ||||||||
Colgate-Palmolive Co. | 148,880 | $ | 13,406,644 | |||||
Kimberly-Clark Corp. | 187,450 | 24,246,657 | ||||||
37,653,301 | ||||||||
Industrial Conglomerates — 1.2% | ||||||||
General Electric Co. | 75,048 | 13,173,175 | ||||||
Siemens AG | 75,360 | 14,389,153 | ||||||
27,562,328 | ||||||||
Insurance — 2.2% | ||||||||
Allstate Corp. | 133,810 | 23,150,468 | ||||||
Reinsurance Group of America, Inc. | 71,726 | 13,834,511 | ||||||
Willis Towers Watson PLC | 40,970 | 11,266,750 | ||||||
48,251,729 | ||||||||
Leisure Products — 0.4% | ||||||||
Mattel, Inc.(1) | 474,832 | 9,406,422 | ||||||
Machinery — 1.4% | ||||||||
Dover Corp. | 18,800 | 3,331,172 | ||||||
IMI PLC | 704,036 | 16,128,601 | ||||||
Oshkosh Corp. | 102,070 | 12,729,150 | ||||||
32,188,923 | ||||||||
Media — 0.6% | ||||||||
Interpublic Group of Cos., Inc. | 390,060 | 12,727,658 | ||||||
Metals and Mining — 0.6% | ||||||||
BHP Group Ltd. | 457,725 | 13,234,636 | ||||||
Multi-Utilities — 1.0% | ||||||||
WEC Energy Group, Inc. | 273,340 | 22,446,681 | ||||||
Oil, Gas and Consumable Fuels — 7.4% | ||||||||
Chevron Corp. | 215,414 | 33,979,404 | ||||||
ConocoPhillips | 137,643 | 17,519,201 | ||||||
Exxon Mobil Corp. | 473,740 | 55,067,538 | ||||||
Occidental Petroleum Corp. | 232,290 | 15,096,527 | ||||||
Shell PLC | 667,315 | 22,141,159 | ||||||
TotalEnergies SE | 319,364 | 21,968,852 | ||||||
165,772,681 | ||||||||
Paper and Forest Products — 0.5% | ||||||||
Mondi PLC | 694,419 | 12,231,010 | ||||||
Passenger Airlines — 0.9% | ||||||||
Southwest Airlines Co. | 659,730 | 19,257,519 | ||||||
Personal Care Products — 2.3% | ||||||||
Kenvue, Inc. | 866,103 | 18,586,570 | ||||||
Unilever PLC | 671,610 | 33,726,412 | ||||||
52,312,982 | ||||||||
Pharmaceuticals — 8.5% | ||||||||
Bristol-Myers Squibb Co. | 358,273 | 19,429,145 | ||||||
Johnson & Johnson | 426,157 | 67,413,776 | ||||||
Merck & Co., Inc. | 174,842 | 23,070,402 | ||||||
Pfizer, Inc. | 1,385,933 | 38,459,641 | ||||||
Roche Holding AG | 89,750 | 22,914,868 | ||||||
Sanofi SA | 195,980 | 19,065,801 | ||||||
190,353,633 | ||||||||
Residential REITs — 0.5% | ||||||||
Equity Residential | 167,780 | 10,588,596 |
11
Shares | Value | |||||||
Retail REITs — 1.7% | ||||||||
Agree Realty Corp. | 241,340 | $ | 13,785,341 | |||||
Realty Income Corp. | 199,850 | 10,811,885 | ||||||
Regency Centers Corp. | 232,130 | 14,057,793 | ||||||
38,655,019 | ||||||||
Semiconductors and Semiconductor Equipment — 2.6% | ||||||||
Intel Corp. | 679,112 | 29,996,377 | ||||||
QUALCOMM, Inc. | 125,314 | 21,215,660 | ||||||
Teradyne, Inc. | 55,470 | 6,258,680 | ||||||
57,470,717 | ||||||||
Software — 0.6% | ||||||||
Oracle Corp. | 99,929 | 12,552,082 | ||||||
Technology Hardware, Storage and Peripherals — 0.4% | ||||||||
HP, Inc. | 304,115 | 9,190,355 | ||||||
Trading Companies and Distributors — 0.7% | ||||||||
MSC Industrial Direct Co., Inc., Class A | 158,149 | 15,346,779 | ||||||
TOTAL COMMON STOCKS (Cost $1,553,964,552) | 2,175,038,468 | |||||||
SHORT-TERM INVESTMENTS — 2.0% | ||||||||
Money Market Funds — 0.0% | ||||||||
State Street Institutional U.S. Government Money Market Fund, Premier Class | 122,215 | 122,215 | ||||||
Repurchase Agreements — 2.0% | ||||||||
BMO Capital Markets Corp., (collateralized by various U.S. Treasury obligations, 4.625%, 9/15/26, valued at $1,914,748), in a joint trading account at 5.28%, dated 3/28/24, due 4/1/24 (Delivery value $1,877,860) | 1,876,759 | |||||||
Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 2.25% - 2.50%, 3/31/27 - 8/15/27, valued at $34,915,679), at 5.30%, dated 3/28/24, due 4/1/24 (Delivery value $34,251,158) | 34,231,000 | |||||||
TD Securities (USA) LLC, (collateralized by various U.S. Treasury obligations, 1.875% - 2.875%, 4/30/25 - 2/28/29, valued at $7,736,862), at 5.30%, dated 3/28/24, due 4/1/24 (Delivery value $7,588,466) | 7,584,000 | |||||||
43,691,759 | ||||||||
TOTAL SHORT-TERM INVESTMENTS (Cost $43,813,974) | 43,813,974 | |||||||
TOTAL INVESTMENT SECURITIES — 99.5% (Cost $1,597,778,526) | 2,218,852,442 | |||||||
OTHER ASSETS AND LIABILITIES — 0.5% | 10,643,552 | |||||||
TOTAL NET ASSETS — 100.0% | $ | 2,229,495,994 |
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS | ||||||||||||||||||||
Currency Purchased | Currency Sold | Counterparty | Settlement Date | Unrealized Appreciation (Depreciation) | ||||||||||||||||
USD | 9,920,833 | AUD | 15,156,419 | Bank of America N.A. | 6/28/24 | $ | 20,430 | |||||||||||||
USD | 17,059,015 | CHF | 15,148,678 | UBS AG | 6/28/24 | 100,720 | ||||||||||||||
USD | 57,635,582 | EUR | 53,003,208 | Bank of America N.A. | 6/28/24 | 252,720 | ||||||||||||||
USD | 57,620,625 | EUR | 53,003,208 | JPMorgan Chase Bank N.A. | 6/28/24 | 237,763 | ||||||||||||||
USD | 57,651,457 | EUR | 53,003,208 | Morgan Stanley | 6/28/24 | 268,595 | ||||||||||||||
GBP | 1,042,659 | USD | 1,316,994 | Morgan Stanley | 6/28/24 | (411) | ||||||||||||||
USD | 39,384,254 | GBP | 31,123,341 | Morgan Stanley | 6/28/24 | 84,300 | ||||||||||||||
$ | 964,117 |
12
NOTES TO SCHEDULE OF INVESTMENTS | ||||||||
AUD | – | Australian Dollar | ||||||
CHF | – | Swiss Franc | ||||||
EUR | – | Euro | ||||||
GBP | – | British Pound | ||||||
USD | – | United States Dollar |
(1)Non-income producing.
See Notes to Financial Statements.
13
Statement of Assets and Liabilities |
MARCH 31, 2024 | |||||
Assets | |||||
Investment securities, at value (cost of $1,597,778,526) | $ | 2,218,852,442 | |||
Cash | 512,331 | ||||
Foreign currency holdings, at value (cost of $327,354) | 326,978 | ||||
Receivable for investments sold | 14,511,334 | ||||
Receivable for capital shares sold | 363,066 | ||||
Unrealized appreciation on forward foreign currency exchange contracts | 964,528 | ||||
Dividends and interest receivable | 4,413,725 | ||||
2,239,944,404 | |||||
Liabilities | |||||
Payable for investments purchased | 6,212,232 | ||||
Payable for capital shares redeemed | 2,369,056 | ||||
Unrealized depreciation on forward foreign currency exchange contracts | 411 | ||||
Accrued management fees | 1,666,369 | ||||
Distribution and service fees payable | 115,711 | ||||
Accrued other expenses | 84,631 | ||||
10,448,410 | |||||
Net Assets | $ | 2,229,495,994 | |||
Net Assets Consist of: | |||||
Capital (par value and paid-in surplus) | $ | 1,595,808,658 | |||
Distributable earnings (loss) | 633,687,336 | ||||
$ | 2,229,495,994 |
Net Assets | Shares Outstanding | Net Asset Value Per Share* | |||||||||
Investor Class, $0.01 Par Value | $1,194,844,612 | 144,298,605 | $8.28 | ||||||||
I Class, $0.01 Par Value | $510,614,481 | 61,475,942 | $8.31 | ||||||||
Y Class, $0.01 Par Value | $124,611,727 | 14,999,553 | $8.31 | ||||||||
A Class, $0.01 Par Value | $59,682,451 | 7,220,656 | $8.27 | ||||||||
C Class, $0.01 Par Value | $6,145,428 | 763,271 | $8.05 | ||||||||
R Class, $0.01 Par Value | $237,549,087 | 28,707,203 | $8.27 | ||||||||
R5 Class, $0.01 Par Value | $3,050,616 | 367,427 | $8.30 | ||||||||
R6 Class, $0.01 Par Value | $92,997,592 | 11,192,342 | $8.31 |
*Maximum offering price per share was equal to the net asset value per share for all share classes, except A Class, for which the maximum offering price per share was $8.77 (net asset value divided by 0.9425). A contingent deferred sales charge may be imposed on redemptions of A Class and C Class.
See Notes to Financial Statements.
14
Statement of Operations |
YEAR ENDED MARCH 31, 2024 | |||||
Investment Income (Loss) | |||||
Income: | |||||
Dividends (net of foreign taxes withheld of $1,279,592) | $ | 64,931,578 | |||
Interest | 2,297,286 | ||||
Securities lending, net | 74,726 | ||||
67,303,590 | |||||
Expenses: | |||||
Management fees | 19,473,097 | ||||
Distribution and service fees: | |||||
A Class | 140,600 | ||||
C Class | 70,731 | ||||
R Class | 1,136,269 | ||||
Directors' fees and expenses | 69,900 | ||||
Other expenses | 221,683 | ||||
21,112,280 | |||||
Fees waived(1) | (209,551) | ||||
20,902,729 | |||||
Net investment income (loss) | 46,400,861 | ||||
Realized and Unrealized Gain (Loss) | |||||
Net realized gain (loss) on: | |||||
Investment transactions | 136,908,113 | ||||
Forward foreign currency exchange contract transactions | 2,357,635 | ||||
Foreign currency translation transactions | (107,465) | ||||
139,158,283 | |||||
Change in net unrealized appreciation (depreciation) on: | |||||
Investments | 103,324,344 | ||||
Forward foreign currency exchange contracts | 2,604,069 | ||||
Translation of assets and liabilities in foreign currencies | (6,226) | ||||
105,922,187 | |||||
Net realized and unrealized gain (loss) | 245,080,470 | ||||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 291,481,331 |
(1)Amount consists of $113,666, $46,379, $11,904, $5,634, $654, $22,545, $265 and $8,504 for Investor Class, I Class, Y Class, A Class, C Class, R Class, R5 Class and R6 Class, respectively.
See Notes to Financial Statements.
15
Statement of Changes in Net Assets |
YEARS ENDED MARCH 31, 2024 AND MARCH 31, 2023 | ||||||||
Increase (Decrease) in Net Assets | March 31, 2024 | March 31, 2023 | ||||||
Operations | ||||||||
Net investment income (loss) | $ | 46,400,861 | $ | 42,841,096 | ||||
Net realized gain (loss) | 139,158,283 | 156,694,311 | ||||||
Change in net unrealized appreciation (depreciation) | 105,922,187 | (260,333,557) | ||||||
Net increase (decrease) in net assets resulting from operations | 291,481,331 | (60,798,150) | ||||||
Distributions to Shareholders | ||||||||
From earnings: | ||||||||
Investor Class | (82,926,021) | (163,229,349) | ||||||
I Class | (34,686,451) | (61,548,378) | ||||||
Y Class | (9,293,573) | (14,921,885) | ||||||
A Class | (3,989,784) | (8,034,893) | ||||||
C Class | (421,937) | (1,150,070) | ||||||
R Class | (15,297,131) | (29,966,055) | ||||||
R5 Class | (199,167) | (350,956) | ||||||
R6 Class | (6,514,811) | (11,600,026) | ||||||
Decrease in net assets from distributions | (153,328,875) | (290,801,612) | ||||||
Capital Share Transactions | ||||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | (46,240,566) | 87,088,979 | ||||||
Net increase (decrease) in net assets | 91,911,890 | (264,510,783) | ||||||
Net Assets | ||||||||
Beginning of period | 2,137,584,104 | 2,402,094,887 | ||||||
End of period | $ | 2,229,495,994 | $ | 2,137,584,104 |
See Notes to Financial Statements.
16
Notes to Financial Statements |
MARCH 31, 2024
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. Value Fund (the fund) is one fund in a series issued by the corporation. The fund’s investment objective is to seek long-term capital growth. Income is a secondary objective.
The fund offers the Investor Class, I Class, Y Class, A Class, C Class, R Class, R5 Class and R6 Class. The A Class may incur an initial sales charge. The A Class and C Class may be subject to a contingent deferred sales charge.
2. Significant Accounting Policies
The following is a summary of significant accounting policies consistently followed by the fund in preparation of its financial statements. The fund is an investment company and follows accounting and reporting guidance in accordance with accounting principles generally accepted in the United States of America. This may require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from these estimates. Management evaluated the impact of events or transactions occurring through the date the financial statements were issued that would merit recognition or disclosure.
Investment Valuations — The fund determines the fair value of its investments and computes its net asset value (NAV) per share at the close of regular trading (usually 4 p.m. Eastern time) on the New York Stock Exchange (NYSE) on each day the NYSE is open. The value of investments of the fund is determined by American Century Investment Management, Inc. (ACIM) (the investment advisor), as the valuation designee, pursuant to its valuation policies and procedures. The Board of Directors oversees the valuation designee and reviews its valuation policies and procedures at least annually.
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 NAV per share. Repurchase agreements are valued at cost, which approximates fair value. 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.
If the valuation designee determines that the market price for a portfolio security is not readily available or is believed by the valuation designee to be unreliable, such security is valued at fair value as determined in good faith by the valuation designee, in accordance with its policies and procedures. Circumstances that may cause the fund to determine that market quotations are not available or reliable include, but are not limited to: when there is a significant event subsequent to the market quotation; trading in a security has been halted during the trading day; or trading in a security is insufficient or did not take place due to a closure or holiday.
The valuation designee monitors for significant events occurring after the close of an investment’s primary exchange but before the fund’s NAV per share is determined. Significant events may include, but are not limited to: corporate announcements and transactions; regulatory news, 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 valuation designee also monitors for significant fluctuations between domestic and foreign markets, as evidenced by the U.S. market or such other indicators that it deems appropriate. The valuation designee 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.
17
Foreign Currency Translations — All assets and liabilities, including investment securities and other financial instruments, initially expressed in foreign currencies are translated into U.S. dollars each day at the mean of the appropriate currency exchange rate at the close of the NYSE as provided by an independent pricing service. 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.
Security Transactions — Security transactions are accounted for as of the trade date. Net realized gains and losses are determined on the identified cost basis, which is also used for federal income tax purposes.
Investment Income — Dividend income less foreign taxes withheld, if any, is recorded as of the ex-dividend date. Distributions received on securities that represent a return of capital or long-term capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The fund may estimate the components of distributions received that may be considered nontaxable distributions or long-term capital gain distributions for income tax purposes. Interest income is recorded on the accrual basis and includes accretion of discounts and amortization of premiums. Securities lending income is net of fees and rebates earned by the lending agent for its services.
Repurchase Agreements — The fund may enter into repurchase agreements with institutions that ACIM has determined are creditworthy pursuant to criteria adopted by the Board of Directors. The fund requires that the collateral, represented by securities, received in a repurchase transaction be transferred to the custodian in a manner sufficient to enable the fund to obtain those securities in the event of a default under the repurchase agreement. ACIM monitors, on a daily basis, the securities transferred to ensure the value, including accrued interest, of the securities under each repurchase agreement is equal to or greater than amounts owed to the fund under each repurchase agreement.
Joint Trading Account — Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the fund, along with certain other funds in the American Century Investments family of funds, may transfer uninvested cash balances into a joint trading account. These balances are invested in one or more repurchase agreements that are collateralized by U.S. Treasury or Agency obligations.
Income Tax Status — It is the fund's policy to distribute substantially all net investment income and net realized gains to shareholders and to otherwise qualify as a regulated investment company under provisions of the Internal Revenue Code. Accordingly, no provision has been made for income taxes. The fund files U.S. federal, state, local and non-U.S. tax returns as applicable. The fund's tax returns are subject to examination by the relevant taxing authority until expiration of the applicable statute of limitations, which is generally three years from the date of filing but can be longer in certain jurisdictions. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination and for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Multiple Class — All shares of the fund represent an equal pro rata interest in the net assets of the class to which such shares belong, and have identical voting, dividend, liquidation and other rights and the same terms and conditions, except for class specific expenses and exclusive rights to vote on matters affecting only individual classes. Income, non-class specific expenses, and realized and unrealized capital gains and losses of the fund are allocated to each class of shares based on their relative net assets.
Distributions to Shareholders — Distributions from net investment income, 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.
18
Securities Lending — Securities are lent to qualified financial institutions and brokers. State Street Bank & Trust Co. serves as securities lending agent to the fund pursuant to a Securities Lending Agreement. The lending of securities exposes the fund to risks such as: the borrowers may fail to return the loaned securities, the borrowers may not be able to provide additional collateral, the fund may experience delays in recovery of the loaned securities or delays in access to collateral, or the fund may experience losses related to the investment collateral. To minimize certain risks, loan counterparties pledge collateral in the form of cash and/or securities. The lending agent has agreed to indemnify the fund in the case of default of any securities borrowed. Cash collateral received is invested in the State Street Navigator Securities Lending Government Money Market Portfolio, a money market mutual fund registered under the 1940 Act. The loans may also be secured by U.S. government securities in an amount at least equal to the market value of the securities loaned, plus accrued interest and dividends, determined on a daily basis and adjusted accordingly. By lending securities, the fund seeks to increase its net investment income through the receipt of interest and fees. Such income is reflected separately within the Statement of Operations. The value of loaned securities and related collateral outstanding at period end, if any, are shown on a gross basis within the Schedule of Investments and Statement of Assets and Liabilities.
3. Fees and Transactions with Related Parties
Certain officers and directors of the corporation are also officers and/or directors of American Century Companies, Inc. (ACC). The corporation's investment advisor, ACIM, the corporation's distributor, American Century Investment Services, Inc. (ACIS), and the corporation's transfer agent, American Century Services, LLC, are wholly owned, directly or indirectly, by ACC.
Management Fees — The corporation has entered into a management agreement with ACIM, under which ACIM provides the fund with investment advisory and management services in exchange for a single, unified management fee (the fee) per class. The agreement provides that ACIM will pay all expenses of managing and operating the fund, except brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), extraordinary expenses, and expenses incurred in connection with the provision of shareholder services and distribution services under a plan adopted pursuant to Rule 12b-1 under the 1940 Act. The fee is computed and accrued daily based on each class's daily net assets and paid monthly in arrears. The difference in the fee among the classes is a result of their separate arrangements for non-Rule 12b-1 shareholder services. It is not the result of any difference in advisory or custodial fees or other expenses related to the management of the fund's assets, which do not vary by class. 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), as well as exchange-traded funds managed by the investment advisor, that use very similar investment teams and strategies (strategy assets). Effective August 1, 2023, the investment advisor agreed to waive 0.015% of the fund's management fee. The investment advisor expects this waiver to continue until July 31, 2024 and cannot terminate it prior to such date without the approval of the Board of Directors.
The management fee schedule range and the effective annual management fee for each class for the period ended March 31, 2024 are as follows:
Effective Annual Management Fee | |||||||||||
Management Fee Schedule Range | Before Waiver | After Waiver | |||||||||
Investor Class | 0.85% to 1.00% | 1.00% | 0.99% | ||||||||
I Class | 0.65% to 0.80% | 0.80% | 0.79% | ||||||||
Y Class | 0.50% to 0.65% | 0.65% | 0.64% | ||||||||
A Class | 0.85% to 1.00% | 1.00% | 0.99% | ||||||||
C Class | 0.85% to 1.00% | 1.00% | 0.99% | ||||||||
R Class | 0.85% to 1.00% | 1.00% | 0.99% | ||||||||
R5 Class | 0.65% to 0.80% | 0.80% | 0.79% | ||||||||
R6 Class | 0.50% to 0.65% | 0.65% | 0.64% |
19
Distribution and Service Fees — The Board of Directors has adopted a separate Master Distribution and Individual Shareholder Services Plan for each of the A Class, C Class and R Class (collectively the plans), pursuant to Rule 12b-1 of the 1940 Act. The plans provide that the A Class will pay ACIS an annual distribution and service fee of 0.25%. The plans provide that the C Class will pay ACIS an annual distribution and service fee of 1.00%, of which 0.25% is paid for individual shareholder services and 0.75% is paid for distribution services. The plans provide that the R Class will pay ACIS an annual distribution and service fee of 0.50%. The fees are computed and accrued daily based on each class’s daily net assets and paid monthly in arrears. The fees are used to pay financial intermediaries for distribution and individual shareholder services. Fees incurred under the plans during the period ended March 31, 2024 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.
Other Expenses — A fund’s other expenses may include interest charges, clearing exchange fees, proxy solicitation expenses, fees associated with the recovery of foreign tax reclaims and other miscellaneous expenses.
Interfund Transactions — The fund may enter into security transactions with other American Century Investments funds and other client accounts of the investment advisor, in accordance with the 1940 Act rules and procedures adopted by the Board of Directors. The rules and procedures require, among other things, that these transactions be effected at the independent current market price of the security. During the period, the interfund purchases and sales were $1,328,752 and $15,588, respectively. The effect of interfund transactions on the Statement of Operations was $809 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 March 31, 2024 were $716,634,021 and $881,735,516, respectively.
20
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Year ended March 31, 2024 | Year ended March 31, 2023 | |||||||||||||
Shares | Amount | Shares | Amount | |||||||||||
Investor Class/Shares Authorized | 1,350,000,000 | 1,350,000,000 | ||||||||||||
Sold | 5,242,097 | $ | 41,001,349 | 10,745,631 | $ | 91,169,369 | ||||||||
Issued in reinvestment of distributions | 10,169,781 | 79,572,664 | 20,174,667 | 156,844,553 | ||||||||||
Redeemed | (24,790,535) | (192,806,520) | (20,195,051) | (167,915,882) | ||||||||||
(9,378,657) | (72,232,507) | 10,725,247 | 80,098,040 | |||||||||||
I Class/Shares Authorized | 600,000,000 | 600,000,000 | ||||||||||||
Sold | 7,387,049 | 57,802,245 | 6,120,526 | 50,880,844 | ||||||||||
Issued in reinvestment of distributions | 4,391,112 | 34,452,515 | 7,829,154 | 61,050,338 | ||||||||||
Redeemed | (8,691,773) | (68,530,520) | (12,231,446) | (104,231,464) | ||||||||||
3,086,388 | 23,724,240 | 1,718,234 | 7,699,718 | |||||||||||
Y Class/Shares Authorized | 130,000,000 | 130,000,000 | ||||||||||||
Sold | 4,888,200 | 38,257,817 | 3,273,398 | 26,648,390 | ||||||||||
Issued in reinvestment of distributions | 1,062,523 | 8,337,867 | 1,712,806 | 13,357,592 | ||||||||||
Redeemed | (5,027,130) | (39,562,602) | (4,927,994) | (40,656,012) | ||||||||||
923,593 | 7,033,082 | 58,210 | (650,030) | |||||||||||
A Class/Shares Authorized | 60,000,000 | 60,000,000 | ||||||||||||
Sold | 1,175,483 | 9,093,958 | 987,536 | 8,288,338 | ||||||||||
Issued in reinvestment of distributions | 484,240 | 3,783,183 | 948,819 | 7,357,420 | ||||||||||
Redeemed | (1,570,300) | (12,274,387) | (2,445,657) | (20,410,746) | ||||||||||
89,423 | 602,754 | (509,302) | (4,764,988) | |||||||||||
C Class/Shares Authorized | 20,000,000 | 20,000,000 | ||||||||||||
Sold | 22,787 | 171,545 | 201,859 | 1,680,412 | ||||||||||
Issued in reinvestment of distributions | 54,394 | 413,877 | 149,033 | 1,127,402 | ||||||||||
Redeemed | (466,493) | (3,537,226) | (302,952) | (2,491,424) | ||||||||||
(389,312) | (2,951,804) | 47,940 | 316,390 | |||||||||||
R Class/Shares Authorized | 325,000,000 | 325,000,000 | ||||||||||||
Sold | 1,616,610 | 12,638,959 | 1,057,020 | 8,832,488 | ||||||||||
Issued in reinvestment of distributions | 1,955,733 | 15,295,419 | 3,861,761 | 29,966,055 | ||||||||||
Redeemed | (4,554,992) | (35,368,982) | (3,025,877) | (25,568,330) | ||||||||||
(982,649) | (7,434,604) | 1,892,904 | 13,230,213 | |||||||||||
R5 Class/Shares Authorized | 20,000,000 | 20,000,000 | ||||||||||||
Sold | 51,257 | 402,205 | 32,262 | 268,580 | ||||||||||
Issued in reinvestment of distributions | 25,382 | 199,167 | 45,080 | 350,956 | ||||||||||
Redeemed | (50,723) | (397,957) | (21,048) | (177,366) | ||||||||||
25,916 | 203,415 | 56,294 | 442,170 | |||||||||||
R6 Class/Shares Authorized | 120,000,000 | 120,000,000 | ||||||||||||
Sold | 2,034,745 | 16,018,790 | 2,922,287 | 24,312,297 | ||||||||||
Issued in reinvestment of distributions | 793,381 | 6,225,985 | 1,462,449 | 11,408,553 | ||||||||||
Redeemed | (2,216,100) | (17,429,917) | (5,455,685) | (45,003,384) | ||||||||||
612,026 | 4,814,858 | (1,070,949) | (9,282,534) | |||||||||||
Net increase (decrease) | (6,013,272) | $ | (46,240,566) | 12,918,578 | $ | 87,088,979 |
21
6. Fair Value Measurements
The fund's investments valuation process is based on several considerations and may use multiple inputs to determine the fair value of the investments held by the fund. In conformity with accounting principles generally accepted in the United States of America, the inputs used to determine a valuation are classified into three broad levels.
•Level 1 valuation inputs consist of unadjusted quoted prices in an active market for identical investments.
•Level 2 valuation inputs consist of direct or indirect observable market data (including quoted prices for comparable investments, evaluations of subsequent market events, interest rates, prepayment speeds, credit risk, etc.). These inputs also consist of quoted prices for identical investments initially expressed in local currencies that are adjusted through translation into U.S. dollars.
•Level 3 valuation inputs consist of unobservable data (including a fund’s own assumptions).
The level classification is based on the lowest level input that is significant to the fair valuation measurement. The valuation inputs are not necessarily an indication of the risks associated with investing in these securities or other financial instruments.
The following is a summary of the level classifications as of period end. The Schedule of Investments provides additional information on the fund's portfolio holdings.
Level 1 | Level 2 | Level 3 | |||||||||
Assets | |||||||||||
Investment Securities | |||||||||||
Common Stocks | |||||||||||
Beverages | — | $ | 47,523,244 | — | |||||||
Building Products | — | 11,211,299 | — | ||||||||
Chemicals | — | 11,179,226 | — | ||||||||
Consumer Staples Distribution & Retail | $ | 23,970,995 | 31,026,340 | — | |||||||
Electrical Equipment | 18,788,363 | 11,677,475 | — | ||||||||
Food Products | 53,604,096 | 19,523,782 | — | ||||||||
Hotels, Restaurants and Leisure | — | 11,244,317 | — | ||||||||
Industrial Conglomerates | 13,173,175 | 14,389,153 | — | ||||||||
Machinery | 16,060,322 | 16,128,601 | — | ||||||||
Metals and Mining | — | 13,234,636 | — | ||||||||
Oil, Gas and Consumable Fuels | 121,662,670 | 44,110,011 | — | ||||||||
Paper and Forest Products | — | 12,231,010 | — | ||||||||
Personal Care Products | 18,586,570 | 33,726,412 | — | ||||||||
Pharmaceuticals | 148,372,964 | 41,980,669 | — | ||||||||
Other Industries | 1,441,633,138 | — | — | ||||||||
Short-Term Investments | 122,215 | 43,691,759 | — | ||||||||
$ | 1,855,974,508 | $ | 362,877,934 | — | |||||||
Other Financial Instruments | |||||||||||
Forward Foreign Currency Exchange Contracts | — | $ | 964,528 | — | |||||||
Liabilities | |||||||||||
Other Financial Instruments | |||||||||||
Forward Foreign Currency Exchange Contracts | — | $ | 411 | — |
22
7. Derivative Instruments
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. A fund will segregate cash, cash equivalents or other appropriate liquid securities on its records in amounts sufficient to meet requirements. 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 settlement 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 $241,283,367.
The value of foreign currency risk derivative instruments as of March 31, 2024, is disclosed on the Statement of Assets and Liabilities as an asset of $964,528 in unrealized appreciation on forward foreign currency exchange contracts and a liability of $411 in unrealized depreciation on forward foreign currency exchange contracts. For the year ended March 31, 2024, the effect of foreign currency risk derivative instruments on the Statement of Operations was $2,357,635 in net realized gain (loss) on forward foreign currency exchange contract transactions and $2,604,069 in change in net unrealized appreciation (depreciation) on forward foreign currency exchange contracts.
8. Risk Factors
The value of the fund’s shares will go up and down, sometimes rapidly or unpredictably, based on the performance of the securities owned by the fund and other factors generally affecting the securities market. Market risks, including political, regulatory, economic and social developments, can affect the value of the fund’s investments. Natural disasters, public health emergencies, war, terrorism and other unforeseeable events may lead to increased market volatility and may have adverse long-term effects on world economies and markets generally.
There are certain risks involved in investing in foreign securities. These risks include those resulting from political events (such as civil unrest, national elections and imposition of exchange controls), social and economic events (such as labor strikes and rising inflation), and natural disasters. Securities of foreign issuers may be less liquid and more volatile. Investing a significant portion of assets in one country or region may accentuate these risks.
9. Federal Tax Information
The tax character of distributions paid during the years ended March 31, 2024 and March 31, 2023 were as follows:
2024 | 2023 | |||||||
Distributions Paid From | ||||||||
Ordinary income | $ | 57,068,069 | $ | 73,081,399 | ||||
Long-term capital gains | $ | 96,260,806 | $ | 217,720,213 |
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 federal tax cost of investments and the components of distributable earnings on a tax-basis were as follows:
Federal tax cost of investments | $ | 1,657,453,099 | |||
Gross tax appreciation of investments | $ | 605,972,735 | |||
Gross tax depreciation of investments | (44,573,392) | ||||
Net tax appreciation (depreciation) of investments | 561,399,343 | ||||
Net tax appreciation (depreciation) on derivatives and translation of assets and liabilities in foreign currencies | (33,595) | ||||
Net tax appreciation (depreciation) | $ | 561,365,748 | |||
Undistributed ordinary income | $ | 6,143,211 | |||
Accumulated long-term gains | $ | 66,178,377 |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales.
24
Financial Highlights |
For a Share Outstanding Throughout the Years Ended March 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 | |||||||||||||||||||||||||||||||||||||||||||||||
2024 | $7.77 | 0.17 | 0.92 | 1.09 | (0.17) | (0.41) | (0.58) | $8.28 | 14.62% | 1.01% | 1.02% | 2.18% | 2.17% | 35% | $1,194,845 | ||||||||||||||||||||||||||||||||
2023 | $9.16 | 0.16 | (0.38) | (0.22) | (0.16) | (1.01) | (1.17) | $7.77 | (2.23)% | 1.02% | 1.02% | 1.95% | 1.95% | 42% | $1,193,571 | ||||||||||||||||||||||||||||||||
2022 | $9.32 | 0.14 | 0.94 | 1.08 | (0.15) | (1.09) | (1.24) | $9.16 | 12.26% | 1.01% | 1.01% | 1.52% | 1.52% | 41% | $1,309,198 | ||||||||||||||||||||||||||||||||
2021 | $5.92 | 0.14 | 3.55 | 3.69 | (0.15) | (0.14) | (0.29) | $9.32 | 63.17% | 1.00% | 1.00% | 1.88% | 1.88% | 53% | $1,550,992 | ||||||||||||||||||||||||||||||||
2020 | $8.10 | 0.15 | (1.60) | (1.45) | (0.14) | (0.59) | (0.73) | $5.92 | (19.92)% | 1.00% | 1.00% | 1.90% | 1.90% | 46% | $1,373,039 | ||||||||||||||||||||||||||||||||
I Class | |||||||||||||||||||||||||||||||||||||||||||||||
2024 | $7.79 | 0.19 | 0.93 | 1.12 | (0.19) | (0.41) | (0.60) | $8.31 | 14.95% | 0.81% | 0.82% | 2.38% | 2.37% | 35% | $510,614 | ||||||||||||||||||||||||||||||||
2023 | $9.18 | 0.18 | (0.39) | (0.21) | (0.17) | (1.01) | (1.18) | $7.79 | (2.03)% | 0.82% | 0.82% | 2.15% | 2.15% | 42% | $454,802 | ||||||||||||||||||||||||||||||||
2022 | $9.34 | 0.16 | 0.94 | 1.10 | (0.17) | (1.09) | (1.26) | $9.18 | 12.44% | 0.81% | 0.81% | 1.72% | 1.72% | 41% | $520,321 | ||||||||||||||||||||||||||||||||
2021 | $5.94 | 0.16 | 3.54 | 3.70 | (0.16) | (0.14) | (0.30) | $9.34 | 63.29% | 0.80% | 0.80% | 2.08% | 2.08% | 53% | $529,024 | ||||||||||||||||||||||||||||||||
2020 | $8.12 | 0.17 | (1.60) | (1.43) | (0.16) | (0.59) | (0.75) | $5.94 | (19.71)% | 0.80% | 0.80% | 2.10% | 2.10% | 46% | $152,349 |
For a Share Outstanding Throughout the Years Ended March 31 (except as noted) | |||||||||||||||||||||||||||||||||||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||||||||||||||||||||||||||||||||||
Income From Investment Operations*: | Distributions From: | Ratio to Average Net Assets of†: | |||||||||||||||||||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Operating Expenses (before expense waiver) | Net Investment Income (Loss) | Net Investment Income (Loss) (before expense waiver) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||||||||||||||||||||||||||||||||
Y Class | |||||||||||||||||||||||||||||||||||||||||||||||
2024 | $7.79 | 0.20 | 0.93 | 1.13 | (0.20) | (0.41) | (0.61) | $8.31 | 15.12% | 0.66% | 0.67% | 2.53% | 2.52% | 35% | $124,612 | ||||||||||||||||||||||||||||||||
2023 | $9.18 | 0.19 | (0.38) | (0.19) | (0.19) | (1.01) | (1.20) | $7.79 | (1.89)% | 0.67% | 0.67% | 2.30% | 2.30% | 42% | $109,655 | ||||||||||||||||||||||||||||||||
2022 | $9.34 | 0.18 | 0.93 | 1.11 | (0.18) | (1.09) | (1.27) | $9.18 | 12.61% | 0.66% | 0.66% | 1.87% | 1.87% | 41% | $128,721 | ||||||||||||||||||||||||||||||||
2021 | $5.94 | 0.17 | 3.55 | 3.72 | (0.18) | (0.14) | (0.32) | $9.34 | 63.54% | 0.65% | 0.65% | 2.23% | 2.23% | 53% | $120,607 | ||||||||||||||||||||||||||||||||
2020 | $8.12 | 0.18 | (1.60) | (1.42) | (0.17) | (0.59) | (0.76) | $5.94 | (19.60)% | 0.65% | 0.65% | 2.25% | 2.25% | 46% | $44,963 | ||||||||||||||||||||||||||||||||
A Class | |||||||||||||||||||||||||||||||||||||||||||||||
2024 | $7.75 | 0.15 | 0.93 | 1.08 | (0.15) | (0.41) | (0.56) | $8.27 | 14.51% | 1.26% | 1.27% | 1.93% | 1.92% | 35% | $59,682 | ||||||||||||||||||||||||||||||||
2023 | $9.15 | 0.14 | (0.39) | (0.25) | (0.14) | (1.01) | (1.15) | $7.75 | (2.58)% | 1.27% | 1.27% | 1.70% | 1.70% | 42% | $55,295 | ||||||||||||||||||||||||||||||||
2022 | $9.31 | 0.12 | 0.93 | 1.05 | (0.12) | (1.09) | (1.21) | $9.15 | 12.00% | 1.26% | 1.26% | 1.27% | 1.27% | 41% | $69,880 | ||||||||||||||||||||||||||||||||
2021 | $5.92 | 0.12 | 3.54 | 3.66 | (0.13) | (0.14) | (0.27) | $9.31 | 62.58% | 1.25% | 1.25% | 1.63% | 1.63% | 53% | $66,639 | ||||||||||||||||||||||||||||||||
2020 | $8.09 | 0.13 | (1.59) | (1.46) | (0.12) | (0.59) | (0.71) | $5.92 | (20.01)% | 1.25% | 1.25% | 1.65% | 1.65% | 46% | $49,497 | ||||||||||||||||||||||||||||||||
C Class | |||||||||||||||||||||||||||||||||||||||||||||||
2024 | $7.56 | 0.09 | 0.90 | 0.99 | (0.09) | (0.41) | (0.50) | $8.05 | 13.59% | 2.01% | 2.02% | 1.18% | 1.17% | 35% | $6,145 | ||||||||||||||||||||||||||||||||
2023 | $8.95 | 0.08 | (0.38) | (0.30) | (0.08) | (1.01) | (1.09) | $7.56 | (3.28)% | 2.02% | 2.02% | 0.95% | 0.95% | 42% | $8,718 | ||||||||||||||||||||||||||||||||
2022 | $9.13 | 0.05 | 0.91 | 0.96 | (0.05) | (1.09) | (1.14) | $8.95 | 11.15% | 2.01% | 2.01% | 0.52% | 0.52% | 41% | $9,886 | ||||||||||||||||||||||||||||||||
2021 | $5.81 | 0.07 | 3.46 | 3.53 | (0.07) | (0.14) | (0.21) | $9.13 | 61.27% | 2.00% | 2.00% | 0.88% | 0.88% | 53% | $9,212 | ||||||||||||||||||||||||||||||||
2020 | $7.95 | 0.07 | (1.56) | (1.49) | (0.06) | (0.59) | (0.65) | $5.81 | (20.58)% | 2.00% | 2.00% | 0.90% | 0.90% | 46% | $10,340 |
For a Share Outstanding Throughout the Years Ended March 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 | |||||||||||||||||||||||||||||||||||||||||||||||
2024 | $7.76 | 0.13 | 0.92 | 1.05 | (0.13) | (0.41) | (0.54) | $8.27 | 14.06% | 1.51% | 1.52% | 1.68% | 1.67% | 35% | $237,549 | ||||||||||||||||||||||||||||||||
2023 | $9.15 | 0.12 | (0.38) | (0.26) | (0.12) | (1.01) | (1.13) | $7.76 | (2.72)% | 1.52% | 1.52% | 1.45% | 1.45% | 42% | $230,445 | ||||||||||||||||||||||||||||||||
2022 | $9.31 | 0.10 | 0.93 | 1.03 | (0.10) | (1.09) | (1.19) | $9.15 | 11.70% | 1.51% | 1.51% | 1.02% | 1.02% | 41% | $254,460 | ||||||||||||||||||||||||||||||||
2021 | $5.92 | 0.10 | 3.54 | 3.64 | (0.11) | (0.14) | (0.25) | $9.31 | 62.15% | 1.50% | 1.50% | 1.38% | 1.38% | 53% | $237,129 | ||||||||||||||||||||||||||||||||
2020 | $8.10 | 0.11 | (1.60) | (1.49) | (0.10) | (0.59) | (0.69) | $5.92 | (20.31)% | 1.50% | 1.50% | 1.40% | 1.40% | 46% | $146,876 | ||||||||||||||||||||||||||||||||
R5 Class | |||||||||||||||||||||||||||||||||||||||||||||||
2024 | $7.79 | 0.19 | 0.92 | 1.11 | (0.19) | (0.41) | (0.60) | $8.30 | 14.81% | 0.81% | 0.82% | 2.38% | 2.37% | 35% | $3,051 | ||||||||||||||||||||||||||||||||
2023 | $9.18 | 0.18 | (0.39) | (0.21) | (0.17) | (1.01) | (1.18) | $7.79 | (2.01)% | 0.82% | 0.82% | 2.15% | 2.15% | 42% | $2,659 | ||||||||||||||||||||||||||||||||
2022 | $9.34 | 0.16 | 0.94 | 1.10 | (0.17) | (1.09) | (1.26) | $9.18 | 12.45% | 0.81% | 0.81% | 1.72% | 1.72% | 41% | $2,618 | ||||||||||||||||||||||||||||||||
2021 | $5.94 | 0.16 | 3.54 | 3.70 | (0.16) | (0.14) | (0.30) | $9.34 | 63.29% | 0.80% | 0.80% | 2.08% | 2.08% | 53% | $2,281 | ||||||||||||||||||||||||||||||||
2020 | $8.12 | 0.17 | (1.60) | (1.43) | (0.16) | (0.59) | (0.75) | $5.94 | (19.71)% | 0.80% | 0.80% | 2.10% | 2.10% | 46% | $1,324 | ||||||||||||||||||||||||||||||||
R6 Class | |||||||||||||||||||||||||||||||||||||||||||||||
2024 | $7.79 | 0.20 | 0.93 | 1.13 | (0.20) | (0.41) | (0.61) | $8.31 | 15.12% | 0.66% | 0.67% | 2.53% | 2.52% | 35% | $92,998 | ||||||||||||||||||||||||||||||||
2023 | $9.18 | 0.19 | (0.38) | (0.19) | (0.19) | (1.01) | (1.20) | $7.79 | (1.89)% | 0.67% | 0.67% | 2.30% | 2.30% | 42% | $82,438 | ||||||||||||||||||||||||||||||||
2022 | $9.34 | 0.18 | 0.93 | 1.11 | (0.18) | (1.09) | (1.27) | $9.18 | 12.61% | 0.66% | 0.66% | 1.87% | 1.87% | 41% | $107,011 | ||||||||||||||||||||||||||||||||
2021 | $5.94 | 0.17 | 3.55 | 3.72 | (0.18) | (0.14) | (0.32) | $9.34 | 63.54% | 0.65% | 0.65% | 2.23% | 2.23% | 53% | $93,724 | ||||||||||||||||||||||||||||||||
2020 | $8.12 | 0.18 | (1.60) | (1.42) | (0.17) | (0.59) | (0.76) | $5.94 | (19.59)% | 0.65% | 0.65% | 2.25% | 2.25% | 46% | $120,598 |
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.
*The amount shown for a share outstanding throughout the period may not correlate with the Statement(s) of Operations or precisely reflect the class expense differentials due to the timing of transactions in shares of a fund in relation to income earned and/or fluctuations in the fair value of a fund's investments.
†Ratios for periods less than one year are annualized. Zero balances may reflect amounts less than 0.005%.
See Notes to Financial Statements.
Report of Independent Registered Public Accounting Firm |
To the shareholders of the Value Fund and the Board of Directors of American Century Capital Portfolios, Inc.
Opinion on the Financial Statements and Financial Highlights
We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of Value Fund (the “Fund”), one of the funds constituting the American Century Capital Portfolios, Inc., as of March 31, 2024, the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Fund as of March 31, 2024, and the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on the Fund’s financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. Our procedures included confirmation of securities owned as of March 31, 2024, by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
/s/ Deloitte & Touche LLP
Kansas City, Missouri
May 16, 2024
We have served as the auditor of one or more American Century investment companies since 1997.
29
Management |
The Board of Directors
The individuals listed below serve as directors of the funds. Each director will continue to serve in this capacity until death, retirement, resignation or removal from office. The board has adopted a mandatory retirement age for directors who are not “interested persons,” as that term is defined in the Investment Company Act (independent directors). Independent directors shall retire on December 31 of the year in which they reach their 75th birthday.
Jonathan S. Thomas is an “interested person” because he currently serves as President and Chief Executive Officer of American Century Companies, Inc. (ACC), the parent company of American Century Investment Management, Inc. (ACIM or the advisor). The other directors (more than three-fourths of the total number) are independent. They are not employees, directors or officers of, and have no financial interest in, ACC or any of its wholly owned, direct or indirect, subsidiaries, including ACIM, American Century Investment Services, Inc. (ACIS) and American Century Services, LLC (ACS), and they do not have any other affiliations, positions or relationships that would cause them to be considered “interested persons” under the Investment Company Act. The directors serve in this capacity for seven (in the case of Jonathan S. Thomas, 16; and Thomas W. Bunn, 8) registered investment companies in the American Century Investments family of funds.
The following table presents additional information about the directors. The mailing address for each director is 4500 Main Street, Kansas City, Missouri 64111.
Name (Year of Birth) | Position(s) Held with Funds | Length of Time Served | Principal Occupation(s) During Past 5 Years | Number of American Century Portfolios Overseen by Director | Other Directorships Held During Past 5 Years | ||||||||||||
Independent Directors | |||||||||||||||||
Brian Bulatao (1964) | Director | Since 2022 | Chief Administrative Officer, Activision Blizzard, Inc. (2021 to present); Under Secretary of State for Management, U.S. Department of State (2018 to 2021) | 64 | None | ||||||||||||
Thomas W. Bunn (1953) | Director | Since 2017 | Retired | 119 | None | ||||||||||||
Chris H. Cheesman (1962) | Director | Since 2019 | Retired | 64 | Alleghany Corporation (2021 to 2022) | ||||||||||||
Barry Fink (1955) | Director | Since 2012 (independent since 2016) | Retired | 64 | None | ||||||||||||
Rajesh K. Gupta (1960) | Director | Since 2019 | Partner Emeritus, SeaCrest Investment Management and SeaCrest Wealth Management (2019 to present) | 64 | None |
30
Name (Year of Birth) | Position(s) Held with Funds | Length of Time Served | Principal Occupation(s) During Past 5 Years | Number of American Century Portfolios Overseen by Director | Other Directorships Held During Past 5 Years | ||||||||||||
Independent Directors | |||||||||||||||||
Lynn M. Jenkins (1963) | Director | Since 2019 | Senior Policy Advisor, Capital Hill Policy Group (2020 to present); Consultant, LJ Strategies (2019 to 2023) | 64 | MGP Ingredients, Inc. (2019 to 2021) | ||||||||||||
Jan M. Lewis (1957) | Director and Board Chair | Since 2011 (Board Chair since 2022) | Retired | 64 | None | ||||||||||||
Gary C. Meltzer (1963) | Director | Since 2022 | Advisor, Pontoro (2021 to present); Executive Advisor, Consultant and Investor, Harris Ariel Advisory LLC (2020 to present); Managing Partner, PricewaterhouseCoopers LLP (1985 to 2020) | 64 | ExcelFin Acquisition Corp., Apollo Realty Income Solutions, Inc. | ||||||||||||
Interested Director | |||||||||||||||||
Jonathan S. Thomas (1963) | Director | Since 2007 | President and Chief Executive Officer, ACC (2007 to present). Also serves as Chief Executive Officer, ACS; Director, ACC and other ACC subsidiaries | 150 | None |
The Statement of Additional Information has additional information about the fund's directors and is available without charge, upon request, by calling 1-800-345-2021.
31
Officers
The following table presents certain information about the executive officers of the funds. Each officer serves as an officer for 16 investment companies in the American Century family of funds. No officer is compensated for his or her service as an officer of the funds. The listed officers are interested persons of the funds and are appointed or re-appointed on an annual basis. The mailing address for each officer listed below is 4500 Main Street, Kansas City, Missouri 64111.
Name (Year of Birth) | Offices with the Funds | Principal Occupation(s) During the Past Five Years | ||||||
Patrick Bannigan (1965) | President since 2019 | Executive Vice President and Director, ACC (2012 to present); Chief Financial Officer, Chief Accounting Officer and Treasurer, ACC (2015 to present); Also serves as President, ACS; Vice President, ACIM; Chief Financial Officer, Chief Accounting Officer and/or Director, ACIM, ACS and other ACC subsidiaries | ||||||
R. Wes Campbell (1974) | Chief Financial Officer and Treasurer since 2018; Vice President since 2023 | Vice President, ACS (2020 to present); Investment Operations and Investment Accounting, ACS (2000 to present) | ||||||
Amy D. Shelton (1964) | Chief Compliance Officer and Vice President since 2014 | Chief Compliance Officer, American Century funds, (2014 to present); Chief Compliance Officer, ACIM (2014 to present); Chief Compliance Officer, ACIS (2009 to present). Also serves as Vice President, ACIS | ||||||
John Pak (1968) | General Counsel and Senior Vice President since 2021 | General Counsel and Senior Vice President, ACC (2021 to present); Also serves as General Counsel and Senior Vice President, ACIM, ACS and ACIS. Chief Legal Officer of Investment and Wealth Management, The Bank of New York Mellon (2014 to 2021) | ||||||
Cihan Kasikara (1974) | Vice President since 2023 | Senior Vice President, ACS (2022 to present); Treasurer, ACS (2023 to present); Vice President, ACS (2020 to 2022); Vice President, Franklin Templeton (2015 to 2020) | ||||||
Kathleen Gunja Nelson (1976) | Vice President since 2023 | Vice President, ACS (2017 to present) | ||||||
Ward D. Stauffer (1960) | Secretary since 2005 | Attorney, ACC (2003 to present) |
32
Liquidity Risk Management Program |
The Fund has adopted a liquidity risk management program (the “program”). The Fund’s Board of Directors (the "Board") has designated American Century Investment Management, Inc. (“ACIM”) as the administrator of the program. Personnel of ACIM or its affiliates, including members of ACIM’s Investment Oversight Committee who are members of ACIM’s Investment Management and Global Analytics departments, conduct the day-to-day operation of the program pursuant to the program.
Under the program, ACIM manages the Fund’s liquidity risk, which is the risk that the Fund could not meet shareholder redemption requests without significant dilution of remaining shareholders’ interests in the Fund. This risk is managed by monitoring the degree of liquidity of the Fund’s investments, limiting the amount of the Fund’s illiquid investments, and utilizing various risk management tools and facilities available to the Fund for meeting shareholder redemptions, among other means. ACIM’s process of determining the degree of liquidity of certain investments held by the Fund is supported by a third-party liquidity assessment vendor.
The Board reviewed a report prepared by ACIM regarding the operation and effectiveness of the program for the period January 1, 2023 through December 31, 2023. No significant liquidity events impacting the Fund were noted in the report. In addition, ACIM provided its assessment that the program had been effective in managing the Fund’s liquidity risk.
33
Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain retirement accounts are subject to federal income tax withholding at the IRS default rate of 10%.* 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.
You may elect a different withholding rate, or request zero withholding, by submitting an acceptable IRS Form W-4R election with your distribution request. You may notify us of your W-4R election by telephone, on our distribution forms, on IRS Form W-4R, or through other acceptable electronic means. If your withholding election is for an automatic withdrawal plan, you have the right to revoke your election at any time and any election you make will remain in effect until revoked by filing a new election.
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 according to state regulations if, at the time of your distribution, your tax residency is within one of the mandatory withholding states.
*Some 403(b), 457 and qualified retirement plan distributions may be subject to 20% mandatory withholding, as they are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
A description of the policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund is available without charge, upon request, by calling 1-800-345-2021. It is also available on American Century Investments’ website at americancentury.com/proxy and on the Securities and Exchange Commission’s website at sec.gov. Information regarding how the investment advisor voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on americancentury.com/proxy. It is also available at sec.gov.
Quarterly Portfolio Disclosure
The fund files its complete schedule of portfolio holdings with the Securities and Exchange
Commission (SEC) for the first and third quarters of each fiscal year as an exhibit to its reports on
Form N-PORT. These portfolio holdings are available on the fund's website at
americancentury.com and, upon request, by calling 1-800-345-2021. The fund’s Form N-PORT
reports are available on the SEC’s website at sec.gov.
34
Other Tax Information
The following information is provided pursuant to provisions of the Internal Revenue Code.
The fund hereby designates up to the maximum amount allowable as qualified dividend income for the fiscal year ended March 31, 2024.
For corporate taxpayers, the fund hereby designates $45,148,516, or up to the maximum amount allowable, of ordinary income distributions paid during the fiscal year ended March 31, 2024 as qualified for the corporate dividends received deduction.
The fund hereby designates $10,712,980 as qualified short-term capital gain distributions for purposes of Internal Revenue Code Section 871 for the fiscal year ended March 31, 2024.
The fund hereby designates $96,260,806 or up to the maximum amount allowable, as long-term capital gain distributions (20% rate gain distributions) for the fiscal year ended March 31, 2024.
35
Notes |
36
![]() | ||||||||
Contact Us | americancentury.com | |||||||
Automated Information Line | 1-800-345-8765 | |||||||
Investor Services Representative | 1-800-345-2021 or 816-531-5575 | |||||||
Investors Using Advisors | 1-800-378-9878 | |||||||
Business, Not-For-Profit, Employer-Sponsored Retirement Plans | 1-800-345-3533 | |||||||
Banks and Trust Companies, Broker-Dealers, Financial Professionals, Insurance Companies | 1-800-345-6488 | |||||||
Telecommunications Relay Service for the Deaf | 711 | |||||||
American Century 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. | ||||||||
©2024 American Century Proprietary Holdings, Inc. All rights reserved. CL-ANN-92273 2405 |
(b) None.
ITEM 2. CODE OF ETHICS.
(a) The registrant has adopted a Code of Ethics for Senior Financial Officers that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer, and persons performing similar functions.
(b) No response required.
(c) None.
(d) None.
(e) Not applicable.
(f) The registrant’s Code of Ethics for Senior Financial Officers was filed as Exhibit 12 (a)(1) to American Century Asset Allocation Portfolios, Inc.’s Annual Certified Shareholder Report on Form N-CSR, File No. 811-21591, on September 29, 2005, and is incorporated herein by reference.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
(a)(1) The registrant’s board has determined that the registrant has at least one audit committee financial expert serving on its audit committee.
(a)(2) Chris H. Cheesman, Lynn M. Jenkins, Barry Fink and Gary Meltzer are the registrant’s designated audit committee financial experts. They are “independent” as defined in Item 3 of Form N-CSR.
(a)(3) Not applicable.
(b) No response required.
(c) No response required.
(d) No response required.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) Audit Fees.
The aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for the audit of the registrant’s annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years were as follows:
FY 2023: $121,305
FY 2024: $126,710
(b) Audit-Related Fees.
The aggregate fees billed in each of the last two fiscal years for assurance and related services by the principal accountant that are reasonably related to the performance of the audit of the registrant’s financial statements and are not reported under paragraph (a) of this Item were as follows:
For services rendered to the registrant:
FY 2023: $0
FY 2024: $0
Fees required to be approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X (relating to certain engagements for non-audit services with the registrant’s investment adviser and its affiliates):
FY 2023: $0
FY 2024: $0
(c) Tax Fees.
The aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning were as follows:
For services rendered to the registrant:
FY 2023: $0
FY 2024: $0
Fees required to be approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X (relating to certain engagements for non-audit services with the registrant’s investment adviser and its affiliates):
FY 2023: $0
FY 2024: $0
(d) All Other Fees.
The aggregate fees billed in each of the last two fiscal years for products and services provided by the principal accountant, other than the services reported in paragraphs (a) through (c) of this Item were as follows:
For services rendered to the registrant:
FY 2023: $0
FY 2024: $0
Fees required to be approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X (relating to certain engagements for non-audit services with the registrant’s investment adviser and its affiliates):
FY 2023: $0
FY 2024: $0
(e)(1) In accordance with paragraph (c)(7)(i)(A) of Rule 2-01 of Regulation S-X, before the accountant is engaged by the registrant to render audit or non-audit services, the engagement is approved by the registrant’s audit committee. Pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X, the registrant’s audit committee also pre-approves its accountant’s engagements for non-audit services with the registrant’s investment adviser, its parent company, and any entity controlled by, or under common control with the investment adviser that provides ongoing services to the registrant, if the engagement relates directly to the operations and financial reporting of the registrant.
(e)(2) All services described in each of paragraphs (b) through (d) of this Item were pre-approved before the engagement by the registrant’s audit committee pursuant to paragraph (c)(7)(i)(A) of Rule 2-01 of Regulation S-X. Consequently, none of such services were required to be approved by the audit committee pursuant to paragraph (c)(7)(i)(C).
(f) The percentage of hours expended on the principal accountant’s engagement to audit the registrant’s financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant’s full-time, permanent employees was less than 50%.
(g) The aggregate non-audit fees billed by the registrant’s accountant for services rendered to the registrant, and rendered to the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant for each of the last two fiscal years of the registrant were as follows:
FY 2023: $98,325
FY 2024: $343,325
(h) The registrant’s investment adviser and accountant have notified the registrant’s audit committee of all non-audit services that were rendered by the registrant’s accountant to the registrant’s investment adviser, its parent company, and any entity controlled by, or under common control with the investment adviser that provides services to the registrant, which services were not required to be pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X. The notification provided to the registrant’s audit committee included sufficient details regarding such services to allow the registrant’s audit committee to consider the continuing independence of its principal accountant.
(i) Not applicable.
(j) Not applicable.
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 18. RECOVERY OF ERRONEOUSLY AWARDED COMPENSATION.
(a) Not applicable.
(b) Not applicable.
ITEM 19. EXHIBITS.
(a)(1) Registrant’s Code of Ethics for Senior Financial Officers, which is the subject of the disclosure required by Item 2 of Form N-CSR, was filed as Exhibit 12(a)(1) to American Century Asset Allocation Portfolios, Inc.’s Certified Shareholder Report on Form N-CSR, File No. 811-21591, on September 29, 2005.
(a)(2) Not applicable.
(a)(3) 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)(4) Not applicable.
(a)(5) 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/ Patrick Bannigan | ||||||||||
Name: | Patrick Bannigan | ||||||||||
Title: | President | ||||||||||
Date: | May 30, 2024 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By: | /s/ Patrick Bannigan | |||||||
Name: | Patrick Bannigan | |||||||
Title: | President | |||||||
(principal executive officer) | ||||||||
Date: | May 30, 2024 |
By: | /s/ R. Wes Campbell | |||||||
Name: | R. Wes Campbell | |||||||
Title: | Treasurer and | |||||||
Chief Financial Officer | ||||||||
(principal financial officer) | ||||||||
Date: | May 30, 2024 |