N-14
Initial Statement
As filed with the Securities and Exchange Commission on June 29, 2001
Registration Nos. 33-65170 and 811-7822
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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM N-14
REGISTRATION UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. _____ [ ]
Post-Effective Amendment No. _____ [ ]
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AMERICAN CENTURY INVESTMENT TRUST
(Exact Name of Registrant as Specified in Charter)
4500 Main Street
P.O. Box 419200
Kansas City, MO 64141-6200
(Address of Principal Executive Offices)
Registrant's Telephone Number, including Area Code: 816-531-5575
Charles A. Etherington
Vice President and Associate General Counsel
4500 Main Street, P.O. Box 419200, Kansas City, MO 64141-6200
(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering: As soon as practicable after this
Registration Statement becomes effective under the Securities Act of 1933.
Calculation of Registration Fee under the Securities Act of 1933: No filing fee
is required because an indefinite number of shares have previously been
registered on Form N-1A (Registration Nos. 33-65170 and 811-7822) pursuant to
Rule 24f-2 under the Investment Company Act of 1940. The Registrant is filing as
an exhibit to this Registration Statement an opinion related to the legality of
shares being issued in connection with this Registration Statement. Pursuant to
Rule 429, this Registration Statement relates to the aforesaid Registration
Statement on Form N-1A.
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission acting pursuant to said section 8(a),
may determine.
American Century Investments
4500 Main Street
P.O. Box 419200
Kansas City, Missouri 64141-6200
American Century Investments
4500 Main Street
Kansas City, Missouri 64111
August ____, 2001
Dear American Century Shareholder:
I am writing to ask for your support of an important proposal affecting
your fund. The proposal will be voted on at an upcoming Special Meeting of
shareholders to be held on Friday, November 16, 2001. Please take a few minutes
to read the enclosed materials, complete and sign the proxy voting card and mail
it back to us.
As a shareholder of American Century Premium Bond Fund ("Premium Bond"),
American Century Bond Fund ("Bond"), or American Century Intermediate-Term Bond
Fund ("Intermediate-Term Bond"), you are being asked to approve the combination
of your fund with a new fund called the American Century Diversified Bond Fund
("Diversified Bond").
The reason for the combination is twofold. First, the reorganization will
combine funds with substantially similar investment objectives and strategies.
Investors can select one, general-purpose bond fund rather than decide between
three substantially similar bond funds.
Second, management believes it will be more efficient to have the funds'
portfolio management team focus on a single, larger portfolio of assets than
to continue managing three very similar, smaller portfolios.
The Board of Directors of your fund has unanimously voted in favor of this
reorganization and believes the combination is in your fund's and your best
interests. We encourage you to vote "FOR" the reorganization. The enclosed
materials give more detailed information about the proposed reorganization and
the reasons why we recommend you vote for it.
Please don't put these materials aside thinking that you will return to
them at another time. If shareholders don't return their proxies, additional
expenses must be incurred to pay for follow-up mailings and phone calls. PLEASE
TAKE A FEW MINUTES TO REVIEW THE ENCLOSED MATERIALS AND SIGN AND RETURN YOUR
PROXY CARD TODAY. If you have any questions or need any help in voting your
shares, please call us at 1-800-331-8331. For business, not-for-profit, and
employer-sponsored retirement accounts, please call 1-800-345-3533, ext. 5004.
To more efficiently handle this proxy solicitation, we have hired Alamo
Direct to act as our proxy solicitor. They might be calling you during the
solicitation process to ensure that you do not have questions or concerns about
the voting process and to assist you with your vote.
Thank you for your time in considering this important proposal. We believe
the reorganization will enable us to better serve your needs. Thank you for
investing with American Century and for your continued support.
Sincerely,
/s/ William M. Lyons
William M. Lyons
President
IMPORTANT INFORMATION YOU SHOULD CONSIDER
The following Q&A is a brief summary of some of the issues that may be
important to you. It may not contain all of the information or topics that you
think are important and, as a result, is qualified in its entirety by the more
detailed information contained elsewhere in this document, or incorporated into
this document. Please read all the enclosed proxy materials before voting.
PLEASE REMEMBER TO VOTE YOUR SHARES AS SOON AS POSSIBLE. If enough shareholders
return their proxy cards soon, additional costs for follow-up mailings and phone
calls may be avoided.
Q. What is the purpose of the upcoming meeting?
A. The Board of Directors of Premium Bond, Bond, and Intermediate-Term Bond has
recommended combining these funds into a new fund called Diversified Bond. This
combination requires approval of shareholders of Premium Bond, Bond, and
Intermediate-Term Bond. The Special Meeting will be held on Friday, November 16,
2001 at 10:00 a.m. (Central time) at American Century Tower I, 4500 Main Street,
Kansas City, Missouri. Shareholders of record as of the close of business on
August 10, 2001 are eligible to vote.
Q. Why is the reorganization being proposed?
A. The reorganization seeks to improve operational and investment management
efficiencies by combining funds with identical investment objectives and
substantially similar investment policies, approaches, procedures and portfolio
securities. Combining these similar funds will permit the portfolio management
team to focus its resources on a single, larger fund, rather than divide its
time between three smaller funds. Combining these funds will also help
eliminate customer confusion regarding which bond fund to choose.
Q. How will the reorganization be accomplished?
A. Shareholders of Premium Bond, Bond, and Intermediate-Term Bond are being
asked to approve the combination of their respective fund with Diversified Bond
pursuant to the Agreement and Plan of Reorganization described on page __. The
reorganization will take the form of a transfer of assets by Premium Bond, Bond,
and Intermediate-Term Bond in exchange for shares of Diversified Bond. Premium
Bond, Bond, and Intermediate-Term Bond will each then make a liquidating
distribution of the Diversified Bond shares received in the exchange to their
respective shareholders.
Q. What will shareholders get if the reorganization is approved?
A. As a result of the liquidating distribution of Premium Bond, Bond, and
Intermediate-Term Bond, you will receive shares of Diversified Bond in an amount
equal to the value of your Premium Bond, Bond, or Intermediate-Term Bond shares
on the date the combination takes place (probably December 3, 2001). The total
dollar value of your account after the reorganization will be the same as the
total dollar value of your account before the reorganization. However, because
the net asset value (price per share) of Diversified Bond may be different from
the net asset value of Premium Bond, Bond, and Intermediate-Term Bond, you may
receive a different number of shares in Diversified Bond than you have in
Premium Bond, Bond, or Intermediate-Term Bond.
Q. Why did the Board of Directors approve the reorganization?
A. After reviewing many factors, your Board of Directors unanimously determined
that the reorganization was in the best interests of Premium Bond, Bond,
Intermediate-Term Bond, and their respective shareholders. Some of the factors
considered include:
* Premium Bond, Bond, and Intermediate-Term Bond have substantially
similar investment policies, approaches, procedures and portfolio
securities. Combining these funds into a new fund that will have
substantially similar investment policies, approaches, procedures
and portfolio securities will increase operational and investment
management efficiencies.
* The total expense ratio for Premium Bond shareholders will not
change.
* The total expense ratio for Investor Class Bond shareholders is
expected to go from 0.75% to 0.65%.
* The total expense ratio for Investor Class Intermediate-Term Bond
shareholders is expected to go from 0.80% to 0.65%.
Q. Will the exchange for shares of Diversified Bond cause shareholders to
realize income or capital gains for tax purposes?
A. No. The exchange of shares in the reorganization will be tax-free. We will
obtain a tax opinion confirming that the reorganization will not be a taxable
event for you for federal income tax purposes. Your tax basis and holding
period for your shares will be unchanged.
Q. How does the total expense ratio of Diversified Bond compare to that of
Premium Bond?
A. In order to maintain a comparable total expense ratio, shareholders of
Premium Bond will receive Institutional Class shares of Diversified Bond in the
exchange. Diversified Bond will waive its standard Institutional Class minimum
account balance requirement for Premium Bond shareholders, provided that they
maintain the $100,000 minimum account balance in Diversified Bond that they were
required to maintain in Premium Bond. The total expense ratio of Premium Bond
is 0.45%, and the expected total expense ratio of Diversified Bond after the
reorganization is 0.45%.
Diversified Bond's management fee is in many ways similar to the management
fee of Premium Bond. Under this "all-inclusive" management fee structure,
Diversified Bond will pay a single management fee in exchange for which,
the manager is responsible for paying all of the costs associated with
providing or procuring all services for Diversified Bond except taxes,
interest, brokerage commissions, the fees and expenses of outside trustees,
and extraordinary items.
Q. How does the total expense ratio of Bond compare to that of Diversified Bond?
A. Investor Class shareholders of Bond will receive Investor Class shares of
Diversified Bond in the exchange. The total expense ratio of the Investor Class
of Bond is 0.80%, and the expected total expense ratio of the Investor Class of
Diversified Bond after the reorganization is 0.65%.
Advisor Class shareholders of Bond will receive Advisor Class shares of
Diversified Bond in the exchange. The total expense ratio of the Advisor
Class of Bond is 1.05%, and the expected total expense ratio of the Advisor
Class of Diversified Bond after the reorganization is 0.90%.
Diversified Bond's management fee is in many ways similar to the management
fee of Bond. Under this "all-inclusive" management fee structure,
Diversified Bond will pay a single management fee in exchange for which,
the manager is responsible for paying all of the costs associated with
providing or procuring all services for Diversified Bond except taxes,
interest, brokerage commissions, the fees and expenses of outside trustees,
and extraordinary items.
Q. How does the total expense ratio of Intermediate-Term Bond compare to that of
Diversified Bond?
A. Investor Class shareholders of Intermediate-Term Bond will receive Investor
Class shares of Diversified Bond in the exchange. The total expense ratio of the
Investor Class of Intermediate-Term Bond is 0.75%, and the expected total
expense ratio of the Investor Class of Diversified Bond after the reorganization
is 0.65%.
Advisor Class shareholders of Intermediate-Term Bond will receive Advisor
Class shares of Diversified Bond in the exchange. The total expense ratio
of the Advisor Class of Intermediate-Term Bond is 1.00%, and the expected
total expense ratio of the Advisor Class of Diversified Bond after the
reorganization is 0.90%.
Diversified Bond's management fee is in many ways similar to the management
fee of Bond. Under this "all-inclusive" management fee structure,
Diversified Bond will pay a single management fee in exchange for which,
the manager is responsible for paying all of the costs associated with
providing or procuring all services for Diversified Bond except taxes,
interest, brokerage commissions, the fees and expenses of outside trustees,
and extraordinary items.
Q. How do the risks of Diversified Bond compare to those of Premium Bond, Bond
and Intermediate-Term Bond?
A. Each of the funds invests in quality debt securities, including corporate
bonds and notes, government securities and securities backed by mortgages or
other assets, and each of the funds may invest up to 15% of its assets in debt
securities ranked in the fifth highest credit quality category.
Because the funds invest in a substantially similar portfolio of securities
and utilize substantially similar investment techniques, the primary
difference in risk between the funds is a difference in interest rate risk.
Funds with longer weighted average maturities generally have a higher
potential for income, but they also are more sensitive to interest rate
changes. Each fund's share value will decline when interest rates rise, but
the share value of the fund with the longer weighted average maturity
generally will decline further.
Premium Bond's weighted average maturity is 3.5 years or longer;
Intermediate-Term Bond's weighted average maturity is between 3 and 10
years; and Bond's weighted average maturity is between 8 and 20 years.
Diversified Bond will maintain a weighted average maturity of 3.5 years or
longer, making its interest rate risk comparable to that of Premium Bond
and Intermediate-Term Bond. Because Diversified Bond's weighted average
maturity is generally shorter than that of Bond, its interest rate risk is
generally lower.
Q. If shareholders send their proxies in now as requested, can they change their
vote later?
A. Yes! A proxy can be revoked at any time by writing to us, by sending us
another proxy, or by attending the meeting and voting in person. EVEN IF YOU
PLAN TO ATTEND THE MEETING TO VOTE IN PERSON, WE ASK THAT YOU RETURN THE
ENCLOSED PROXY. DOING SO WILL HELP US ACHIEVE A QUORUM FOR THE MEETING.
Q. How do shareholders vote their shares?
A. We've made it easy for you. You can vote online, by mail or by fax. To vote
by mail, complete, sign and send us the enclosed proxy voting card in the
enclosed postage-paid envelope. To vote online, access the website listed on
your proxy card (you will need the control number that appears on the right-hand
side of your proxy card). To vote by fax, send your fax to the toll-free number
listed on your proxy card.
Your shares will be voted EXACTLY as you tell us. If you simply sign the
enclosed proxy card and return it, we will follow the recommendation of
your Board of Directors and vote it "FOR" the reorganization. You also may
vote in person at the meeting on Friday, November 16, 2001.
Q. When and how will the combination take place?
A. Subject to receiving shareholder approval, the reorganization is scheduled to
take place on December 3, 2001. After the funds have calculated the value of
their assets and liabilities on November 30, 2001, Premium Bond, Bond, and
Intermediate-Term Bond will transfer their assets and liabilities to Diversified
Bond in exchange for the appropriate number of Diversified Bond shares. Premium
Bond, Bond, and Intermediate-Term Bond will then make liquidating distributions
of the Diversified Bond shares pro rata to their respective shareholders
according to the value of each such shareholder's account immediately prior to
the transfer of assets. THE VALUE OF YOUR ACCOUNT WILL NOT CHANGE AS A RESULT OF
THIS REORGANIZATION.
Q. Who will manage Diversified Bond after the reorganization?
A. American Century Investment Management, Inc. will manage the assets of
Diversified Bond after the reorganization. Jeffrey L. Houston, Vice President
and Senior Portfolio Manager, will lead the investment management team that will
manage Diversified Bond after the reorganization. Mr. Houston also leads the
teams that manage Premium Bond, Bond, and Intermediate-Term Bond.
Q. How will the distribution, purchase and redemption procedures and exchange
rights change as a result of the reorganization?
A. They won't. Diversified Bond has the same distribution, purchase and exchange
policies and procedures as Premium Bond, Bond, and Intermediate-Term Bond.
Q. Where can shareholders get more information about the funds?
A. A copy of the Diversified Bond Prospectus accompanies this proxy statement.
In addition, the Manager's Discussion and Analysis of Fund Performance portion
of Premium Bond's most recent Annual Report to Shareholders is included in this
document as Appendix II. We have included this discussion from the Premium Bond
Annual Report because Diversified Bond will inherit the performance information
of Premium Bond in the reorganization. If you would like a copy of the Premium
Bond, Bond, or Intermediate-Term Bond Prospectuses or Statements of Additional
Information or most recent annual or semiannual reports, please call one of our
Investor Services Representatives at 1-800-331-8331.
AMERICAN CENTURY PREMIUM RESERVES, INC.
and
AMERICAN CENTURY MUTUAL FUNDS, INC.
American Century Investments
4500 Main Street
P. O. Box 419200
Kansas City, Missouri 64141-6200
(800) 331-8331
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To be held on Friday, November 16, 2001
NOTICE IS HEREBY GIVEN THAT a Special Meeting of the shareholders of the
American Century Premium Bond Fund ("Premium Bond"), a portfolio of American
Century Premium Reserves, Inc., and the shareholders of the American Century
Bond Fund ("Bond") and the American Century Intermediate-Term Bond Fund
("Intermediate-Term Bond"), each a portfolio of American Century Mutual Funds,
Inc., will be held at American Century Tower I, 4500 Main Street, Kansas City,
Missouri on Friday, November 16, 2001 at 10:00 a.m. (Central time) for the
following purposes:
ITEM 1. To consider and act upon a proposal to approve an Agreement
and Plan of Reorganization and the transactions contemplated thereby,
including:
(a) the transfer of substantially all of the assets and liabilities of
Premium Bond, Bond, and Intermediate-Term Bond to the American
Century Diversified Bond Fund, an investment portfolio of American
Century Investment Trust ("Diversified Bond") in exchange for shares
in Diversified Bond; and
(b) the distribution of Diversified Bond's shares to the shareholders of
Premium Bond, Bond, and Intermediate-Term Bond according to their
interests.
ITEM 2. To transact such other business as may properly come before
the Special Meeting or any adjournment(s) thereof.
The proposed reorganization, the Agreement and Plan of Reorganization and
related matters are described in the attached Combined Prospectus/Proxy
Statement.
Shareholders of record as of the close of business on August 10, 2001, are
entitled to notice of, and to vote at, the Special Meeting or any adjournment(s)
thereof.
Please execute and return promptly in the enclosed envelope the accompanying
proxy card, which is being solicited by the Board of Directors of American
Century Premium Reserves, Inc. and the Board of Directors of American Century
Mutual Funds, Inc. Please return your proxy card even if you are planning to
attend the Special Meeting. This is important to ensure a quorum at the Special
Meeting. Proxies may be revoked at any time before they are exercised by
submitting a written notice of revocation, a subsequently executed proxy, or by
attending the meeting and voting in person.
/s/David C. Tucker
David C. Tucker
Senior Vice President
________________, 2001
COMBINED PROSPECTUS/PROXY STATEMENT
of
AMERICAN CENTURY PREMIUM RESERVES, INC.
and
AMERICAN CENTURY MUTUAL FUNDS, INC.
________________, 2001
This Combined Prospectus/Proxy Statement is furnished in connection with
the solicitation of votes by the Board of Directors of American Century Premium
Reserves, Inc. on behalf of its Premium Bond Fund ("Premium Bond"), and by the
Board of Directors of American Century Mutual Funds, Inc. on behalf of its Bond
Fund ("Bond") and its Intermediate-Term Bond Fund ("Intermediate-Term Bond") in
connection with a Special Meeting of Shareholders to be held on Friday, November
16, 2001.
At the Special Meeting, shareholders of Premium Bond, Bond, and
Intermediate-Term Bond are being asked to approve the combination of their
respective fund into the American Century Diversified Bond Fund, a series of
American Century Investment Trust ("Diversified Bond").
The funds are similarly managed diversified, open-end mutual funds that
invest in a substantially similar mix of fixed income securities. The purpose of
the reorganization is to streamline American Century's fixed-income lineup and
to achieve management and operational efficiencies. Combining these similar
funds as described further in this Combined Prospectus/Proxy Statement will help
achieve this objective. Each fund has shares registered with the Securities and
Exchange Commission.
This Combined Prospectus/Proxy Statement constitutes the Proxy Statement of
your fund for the Special Meeting of Shareholders and a prospectus for the
Diversified Bond shares that are to be issued to you in connection with the
reorganization. It is intended to give you the information you need to consider
and vote on the proposed reorganization. You should retain this document for
future reference. A Statement of Additional Information about Diversified Bond,
dated August 20, 2001, is incorporated into this document by reference. A copy
of the Statement of Additional Information may be obtained without charge upon
request by calling us at 1-800-331-8331 or writing to us at American Century
Investments, 4500 Main Street, P. O. Box 419200, Kansas City, Missouri
64141-6200.
The principal executive offices of Premium Bond, Bond, Intermediate-Term
Bond, and Diversified Bond are located at American Century Investments, 4500
Main Street, P. O. Box 419200, Kansas City, Missouri 64141-6200. The funds'
telephone number is 1-800-331-8331.
The information contained in this Combined Prospectus/Proxy Statement is
required by rules of the Securities and Exchange Commission, and some of it is
highly technical. If you have any questions about these materials or how to vote
your shares, please call us at 1-800-331-8331. For business, not-for-profit,
and employer-sponsored retirement accounts, please call 1-800-345-3533, ext.
5004.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities or determined if this
Combined Prospectus/Proxy Statement is accurate or complete. Any representation
to the contrary is a criminal offense.
No person has been authorized to give any information or to make any
representations other than those contained in this Combined Prospectus/Proxy
Statement and in the materials expressly incorporated herein by reference. If
given or made, such other information or representations must not be relied upon
as having been authorized by Premium Bond, Bond, Intermediate-Term Bond,
Diversified Bond, or anyone affiliated with American Century Investments.
PLEASE NOTE THAT THE SPECIAL MEETING OF SHAREHOLDERS WILL BE A BUSINESS
MEETING ONLY AND IS NOT A SHAREHOLDER SEMINAR.
TABLE OF CONTENTS
IMPORTANT INFORMATION YOU SHOULD CONSIDER
COMPARISON OF CERTAIN INFORMATION REGARDING THE FUNDS
RISK FACTORS
TRANSACTION AND OPERATING EXPENSE INFORMATION
ADDITIONAL INFORMATION ABOUT THE PROPOSED TRANSACTION
Summary of Plan of Reorganization
Description of the Securities of Diversified Bond
Reasons Supporting the Reorganization
Federal Income Tax Consequences
Capitalization
INFORMATION ABOUT THE FUNDS
Diversified Bond
Premium Bond
Bond
Intermediate-Term Bond
Fundamental Investment Restrictions
INFORMATION RELATING TO VOTING MATTERS
General Information
Voting and Revocation of Proxies
Record Date
Quorum
Shareholder Vote Required
Cost of Proxy Solicitation
Certain Shareholders
Appraisal Rights
Annual Meetings
ADDITIONAL INFORMATION
LITIGATION
FINANCIAL STATEMENTS
OTHER BUSINESS
SHAREHOLDER INQUIRIES
MANAGEMENT'S DISCUSSION
COMPARISON OF CERTAIN INFORMATION
REGARDING THE FUNDS
The following chart is provided to show a comparison of certain key
attributes of Premium Bond with Diversified Bond. For additional information
about the funds, see the section titled "Information About the Funds" starting
at page ___ below.
Premium Bond Diversified Bond
Type of Fund
Investment Objective Same as Diversified Bond Seeks a high level of income by
investing primarily in non-money
market debt securities
Investment Policies Same as Diversified Bond Invests primarily in high- and
medium-grade, non-money market
debt securities payable in
U.S. or foreign currencies,
which may include corporate
bonds and notes, government
securities, and securities
backed by mortgages or
other assets.
Weighted Average Same as Diversified Bond 3.5 years or longer
Portfolio Maturity
Credit Quality Same as Diversified Bond High- and medium-grade
Total Expense Ratio 0.45% Investor Class 0.65%
Advisor Class 0.90%
Institutional Class 0.45%
Distribution Policy Same as Diversified Bond Distributions from net income are
paid monthly. Distributions of
capital gains are paid annually.
Purchases and Exchanges Same as Diversified Bond See pages 9-12 of the Investor and
Institutional Class Prospectuses
and pages 9-10 of the Advisor Class
Prospectus
Redemption Policies Same as Diversified Bond See pages 9-12 of the Investor and
Institutional Class Prospectuses
and pages 9-11 of the Advisor Class
Prospectus
Investment Advisor American Century Investment ACIM
Management, Inc. ("ACIM")
Transfer Agent American Century Services ACSC
Corporation ("ACSC")
Distributor American Century Investment ACIS
Services, Inc. ("ACIS")
Custodians J.P. Morgan Chase and Co. J.P. Morgan Chase and Co.
and Commerce Bank, N.A. and Commerce Bank, N.A.
Independent Auditors Deloitte & Touche LLP PricewaterhouseCoopers LLP
COMPARISON OF CERTAIN INFORMATION
REGARDING THE FUNDS
The following chart is provided to show a comparison of certain key
attributes of Bond with Diversified Bond. For additional information about the
funds, see the section titled "Information About the Funds" starting at page ___
below.
Bond Diversified Bond
Type of Fund
Investment Objective Seeks income from investments Seeks a high level of income by
in corporate bonds and other investing primarily in non-money
debt obligations. market debt securities
Investment Policies Invests primarily in quality Invests primarily in high- and
debt securities, and may invest medium-grade, non-money market
up to 15% of net assets in debt securities payable in U.S.
securities rated in the fifth or foreign currencies, which may
highest credit quality category. include corporate bonds and notes,
government securities, and
securities backed by mortgages or
other assets.
Weighted Average 8 - 20 years 3.5 years or longer
Portfolio Maturity
Credit Quality AAA - BB High- and medium-grade
Total Expense Ratio Investor Class 0.80% Investor Class 0.65%
Advisor Class 1.05% Advisor Class 0.90%
Institutional Class 0.45%
Distribution Policy Same as Diversified Bond Distributions from net income are
paid monthly. Distributions of
capital gains are paid annually.
Purchases and Exchanges Same as Diversified Bond See pages 9-12 of the Investor and
Institutional Class Prospectuses
and pages 9-10 of the Advisor Class
Prospectus
Redemption Policies Same as Diversified Bond See pages 9-12 of the Investor and
Institutional Class Prospectuses
and pages 9-11 of the Advisor Class
Prospectus
Investment Advisor Same as Diversified Bond American Century Investment
Management, Inc. ("ACIM")
Transfer Agent Same as Diversified Bond American Century Services
Corporation ("ACSC")
Distributor Same as Diversified Bond American Century Investment
Services, Inc. ("ACIS")
Custodians Same as Diversified Bond J.P. Morgan Chase and Co.
and Commerce Bank, N.A.
Independent Auditors Deloitte & Touche LLP PricewaterhouseCoopers LLP
COMPARISON OF CERTAIN INFORMATION
REGARDING THE FUNDS
The following chart is provided to show a comparison of certain key
attributes of Intermediate-Term Bond with Diversified Bond. For additional
information about the funds, see the section titled "Information About the
Funds" starting at page ___ below.
Intermediate-Term Bond Diversified Bond
Type of Fund
Investment Objective Seeks income from investments Seeks a high level of income by
in corporate bonds and other investing primarily in non-money
debt obligations. market debt securities
Investment Policies Invests primarily in quality Invests primarily in high- and
debt securities, and may invest medium-grade, non-money market debt
up to 15% of net assets in securities payable in U.S. or foreign
securities rated in the fifth currencies, which may include
highest credit quality category. corporate bonds and notes, government
securities, and securities backed by
mortgages or other assets.
Weighted Average 3 - 10 years 3.5 years or longer
Portfolio Maturity
Credit Quality AAA - BB High- and medium-grade
Total Expense Ratio Investor Class 0.75% Investor Class 0.65%
Advisor Class 1.00% Advisor Class 0.90%
Institutional Class 0.45%
Distribution Policy Same as Diversified Bond Distributions from net income are
paid monthly. Distributions of
capital gains are paid annually.
Purchases and Exchanges Same as Diversified Bond See pages 9-12 of the Investor and
Institutional Class Prospectuses
and pages 9-10 of the Advisor Class
Prospectus
Redemption Policies Same as Diversified Bond See pages 9-12 of the Investor and
Institutional Class Prospectuses
and pages 9-11 of the Advisor Class
Prospectus
Investment Advisor Same as Diversified Bond American Century Investment
Management, Inc. ("ACIM")
Transfer Agent Same as Diversified Bond American Century Services
Corporation ("ACSC")
Distributor Same as Diversified Bond American Century Investment
Services, Inc. ("ACIS")
Custodians Same as Diversified Bond J.P. Morgan Chase and Co. and
Commerce Bank, N.A.
Independent Auditors Deloitte & Touche LLP PricewaterhouseCoopers LLP
PRIMARY FEDERAL INCOME TAX CONSEQUENCES
The exchange of Premium Bond, Bond, or Intermediate-Term Bond shares for
Diversified Bond shares in the reorganization will be tax-free to shareholders
of Premium Bond, Bond, Intermediate-Term Bond and Diversified Bond. We will
obtain a tax opinion confirming that the reorganization will not be a taxable
event for shareholders for federal income tax purposes. A shareholder's
aggregate tax basis and holding period for Diversified Bond shares received in
the reorganization will be identical to the aggregate tax basis and holding
period for the Premium Bond, Bond, or Intermediate-Term Bond shares exchanged
in the transaction. The tax consequences of the reorganization are described
in more detail on page of this Combined Prospectus/Proxy Statement.
RISK FACTORS
Your Board of Directors does not believe that the reorganization exposes
shareholders of Diversified Bond to any new or different risks than they are
exposed to as shareholders of Premium Bond, Bond, or Intermediate-Term Bond. For
a discussion of the various investment policies, approaches and procedures of
Diversified Bond, and the risks associated therewith, please see the
accompanying Prospectus beginning at page 4.
TRANSACTION AND OPERATING EXPENSE INFORMATION
The information below compares various shareholder transaction and annual
fund operating expenses of Premium Bond as of its most recent fiscal year end
(March 31, 2001) and Bond and Intermediate-Term Bond. After the reorganization,
the expense levels of the surviving fund will be the same as those shown for
Diversified Bond.
INVESTOR CLASS
ANNUAL OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
Management Distribution and Other Total Annual Fund
Fee Service (12b-1) Fees Expenses(1) Operating Expenses
Premium Bond 0.45% None 0.00% 0.45%
Intermediate-Term Bond 0.75% None 0.00% 0.75%
Bond 0.80% None 0.00% 0.80%
(1) Other expenses, which include the fees and expenses of the funds'
independent directors and their legal counsel, as well as interest, were
less than 0.005% for the most recent fiscal year.
Example
The examples in the table below are intended to help you compare the costs of
investing in a fund with the costs of investing in other mutual funds. Assuming
you . . .
* invest $10,000 in the fund
* redeem all of your shares at the end of the periods shown below
* earn a 5% return each year
* incur the same operating expenses as shown above
. . . your cost of investing in the fund would be:
1 year 3 years 5 years 10 years
Premium Bond $46 $144 $252 $566
Intermediate-Term Bond $76 $239 $416 $928
Bond $82 $255 $443 $987
CALLOUTS
[graphic of hand pointing index finger]
Use this example to compare the costs of investing in other funds. Of course,
your actual costs may be higher or lower.
ADVISOR CLASS
ANNUAL OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
Management Distribution and Other Total Annual Fund
Fee Service (12b-1) Fees (1) Expenses(2) Operating Expenses
Intermediate-Term Bond 0.50% 0.50% 0.00% 1.00%
Bond 0.55% 0.50% 0.00% 1.05%
(1) The 12b-1 fee is designed to permit investors to purchase Advisor Class
shares through broker-dealers, banks, insurance companies and other
financial intermediaries. A portion of the fee is used to compensate them
for ongoing recordkeeping and administrative services that would otherwise
be performed by an affiliate of the advisor, and a portion is used to
compensate them for distribution and other shareholder services. For more
information, see Service and Distribution Fees, page 15.
(2) Other expenses, which include the fees and expenses of the funds'
independent directors and their legal counsel, as well as interest, were
less than 0.005% for the most recent fiscal year.
Example
The examples in the table below are intended to help you compare the costs of
investing in a fund with the costs of investing in other mutual funds. Assuming
you . . .
* invest $10,000 in the fund
* redeem all of your shares at the end of the periods shown below
* earn a 5% return each year
* incur the same operating expenses as shown above
. . . your cost of investing in the fund would be:
1 year 3 years 5 years 10 years
Intermediate-Term Bond $102 $318 $551 $1,219
Bond $107 $333 $577 $1,277
CALLOUTS
[graphic of hand pointing index finger]
When purchasing through a financial intermediary you may be charged a fee.
[graphic of hand pointing index finger]
Use this example to compare the costs of investing in other funds. Of course,
your actual costs may be higher or lower.
Diversified Bond Investor Class
ANNUAL OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
Management Distribution and Other Total Annual Fund
Fee(1) Service (12b-1) Fees Expenses(2) Operating Expenses
Diversified Bond 0.65% None 0.00% 0.65%
(1) The fund has a stepped fee schedule. As a result, the fund's management fee
rate generally decreases as fund assets increase.
(2) Other expenses, which include the fees and expenses of the fund's
independent directors and their legal counsel, as well as interest, are
expected to be less than 0.005% for the current fiscal year.
Example
The examples in the table below are intended to help you compare the costs of
investing in a fund with the costs of investing in other mutual funds. Assuming
you . . .
* invest $10,000 in the fund
* redeem all of your shares at the end of the periods shown below
* earn a 5% return each year
* incur the same operating expenses as shown above
. . . your cost of investing in the fund would be:
1 year 3 years 5 years 10 years
Diversified Bond $66 $208 $362 $809
CALLOUT
[graphic of hand pointing index finger]
Use this example to compare the costs of investing in other funds. Of course,
your actual costs may be higher or lower.
Diversified Bond Advisor Class
ANNUAL OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
Management Distribution and Other Total Annual Fund
Fee(1) Service (12b-1) Fees Expenses(2) Operating Expenses
Diversified Bond 0.40% 0.50% 0.00% 0.90%
(1) The fund has a stepped fee schedule. As a result, the fund's management fee
rate generally decreases as fund assets increase.
(2) Other expenses, which include the fees and expenses of the fund's
independent directors and their legal counsel, as well as interest, are
expected to be less than 0.005% for the current fiscal year.
Example
The examples in the table below are intended to help you compare the costs of
investing in a fund with the costs of investing in other mutual funds. Assuming
you . . .
* invest $10,000 in the fund
* redeem all of your shares at the end of the periods shown below
* earn a 5% return each year
* incur the same operating expenses as shown above
. . . your cost of investing in the fund would be:
1 year 3 years 5 years 10 years
Diversified Bond $92 $286 $497 $1,104
CALLOUT
[graphic of hand pointing index finger]
Use this example to compare the costs of investing in other funds. Of course,
your actual costs may be higher or lower.
Diversified Bond Institutional Class
ANNUAL OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
Management Distribution and Other Total Annual Fund
Fee(1) Service (12b-1) Fees Expenses(2) Operating Expenses
Diversified Bond 0.45% None 0.00% 0.45%
(1) The fund has a stepped fee schedule. As a result, the fund's management fee
rate generally decreases as fund assets increase.
(2) Other expenses, which include the fees and expenses of the fund's
independent directors and their legal counsel, as well as interest, are
expected to be less than 0.005% for the current fiscal year.
Example
The examples in the table below are intended to help you compare the costs of
investing in a fund with the costs of investing in other mutual funds. Assuming
you . . .
* invest $10,000 in the fund
* redeem all of your shares at the end of the periods shown below
* earn a 5% return each year
* incur the same operating expenses as shown above
. . . your cost of investing in the fund would be:
1 year 3 years 5 years 10 years
Diversified Bond $46 $144 $252 $566
CALLOUT
[graphic of hand pointing index finger]
Use this example to compare the costs of investing in other funds. Of course,
your actual costs may be higher or lower.
ADDITIONAL INFORMATION ABOUT THE PROPOSED TRANSACTION
SUMMARY OF PLAN OF REORGANIZATION
Subject to receipt of shareholder approval, the reorganization will be
carried out pursuant to the terms of the Agreement and Plan of Reorganization
between the funds. Consummation of the reorganization is contingent upon
approval by the shareholders of Premium Bond, Bond, and Intermediate-Term Bond.
The following is a brief summary of some of the important terms of that
Agreement.
EFFECTIVE TIME OF THE REORGANIZATION. The Agreement requires that the
exchange of assets for stock take place after the close of business on one
business day but before (or as of) the opening of business on the next business
day (the "Effective Time"). It is currently anticipated that the reorganization
will take place after the close of business on November 30, 2001, but before (or
as of) the opening of business on December 3, 2001. However, the Agreement gives
the officers of the funds the flexibility to choose another date.
EXCHANGE OF ASSETS. After the close of business on November 30, 2001 each
fund will determine the value of its assets and liabilities in the same manner
as described on page 13 in the Diversified Bond Investor or Institutional Class
Prospectus and on page 12 in the Advisor Class Prospectus. The assets
and liabilities of each of Premium Bond, Bond, and Intermediate-Term Bond will
then be transferred to Diversified Bond in exchange for that number of full and
fractional shares (rounded to the third decimal place) that have the same
aggregate net asset value as the value of the net assets received in the
exchange from each fund.
LIQUIDATING DISTRIBUTIONS AND TERMINATION. Immediately after the exchange
of their assets for the Diversified Bond shares, Premium Bond, Bond, and
Intermediate-Term Bond will each distribute pro rata all of the shares received
in the exchange to their respective shareholders of record at the Effective
Time. All of the outstanding shares of Premium Bond, Bond, and Intermediate-Term
Bond will be redeemed and canceled and their stock books closed. As a result,
Premium Bond shareholders, Bond shareholders, and Intermediate-Term Bond
shareholders will become shareholders of Diversified Bond.
SHAREHOLDER APPROVAL. Consummation of the reorganization requires and is
contingent upon the approval of Premium Bond, Bond, and Intermediate-Term Bond
shareholders.
REPRESENTATIONS AND WARRANTIES. The Agreement contains representations and
warranties made by Premium Bond, Bond, and Intermediate-Term Bond to Diversified
Bond concerning each fund's respective formation and existence under applicable
state law, each fund's respective power to consummate the reorganization, each
fund's respective qualification as a "regulated investment company" under
applicable tax law, the registration of each fund's shares under federal law and
other matters that are customary in a reorganization of this type. The
representations and warranties terminate at the Effective Time.
CONDITIONS TO CLOSING. The Agreement contains conditions to closing the
proposed reorganization that benefit each fund. The conditions to closing the
reorganization include (i) that Premium Bond, Bond, and Intermediate-Term Bond
shareholders approve the proposed reorganization, (ii) that all representations
of the funds be true in all material respects, (iii) receipt of the tax opinion
described on page __ below under the caption "Federal Income Tax Consequences,"
and (iv) such other matters as are customary in a reorganization of this type.
TERMINATION OF AGREEMENT. The Agreement may be terminated by a fund as a
result of a failure by another fund to meet one of its conditions to closing, or
by mutual consent.
GOVERNING LAW. The Agreement states that it is to be interpreted under
Massachusetts law, the state of organization of Diversified Bond.
DESCRIPTION OF THE SECURITIES OF DIVERSIFIED BOND
Diversified Bond is a series of shares offered by American Century
Investment Trust. Each series is commonly referred to as a mutual fund. The
assets belonging to each series of shares are held separately by the custodian.
American Century Investment Trust is a Massachusetts business trust, which
means its activities are overseen by a Board of Trustees rather than a Board of
Directors. The function of the Board of Trustees is the same as the function of
a Board of Directors.
Diversified Bond currently offers three classes of shares, the Investor
Class, the Advisor Class, and the Institutional Class, although it may offer
additional classes in the future. The Investor Class of shares of Diversified
Bond has no up-front charges, commissions or 12b-1 fees. The Advisor and
Institutional Classes are made available to institutional shareholders or
through financial intermediaries that do not require the same level of
shareholder and administrative services from the advisor as Investor Class
shareholders. As a result, the advisor is able to charge these classes a lower
unified management fee. In addition to the management fee, however, the Advisor
Class shares are subject to a 0.50% 12b-1 fee to pay for shareholder services
and distribution costs.
Your Board of Directors believes there are no material differences between
the rights of a Premium Bond, Bond, or Intermediate-Term Bond shareholder and
the rights of a Diversified Bond shareholder. Each share, irrespective of series
or class of a series, is entitled to one vote for each dollar of net asset value
applicable to such share on all questions, except for those matters that must be
voted on separately by the series or class of a series affected. Matters
affecting only one class of a series are voted upon only by that series or
class.
Shares have non-cumulative voting rights, which means that the holders of
more than 50% of the votes cast in an election of trustees can elect all of the
trustees if they choose to do so, and in such event the holders of the remaining
votes will not be able to elect any person or persons to the Board of Trustees.
Unless required by the Investment Company Act of 1940, it is not necessary
for Diversified Bond to hold annual meetings of shareholders. As a result,
shareholders may not vote each year on the election of trustees or the
appointment of auditors. However, pursuant to each fund's bylaws, the holders of
at least 10% of the votes entitled to be cast may request the fund to hold a
special meeting of shareholders.
REASONS SUPPORTING THE REORGANIZATION
The Reorganization is part of a broader restructuring program proposed by
American Century Investment Management, Inc. ("ACIM") to respond to changing
industry conditions and investor needs and desires in the fixed-income area. The
mutual fund industry has grown dramatically over the last ten years. During this
period of rapid growth, investment managers have expanded the range of
fixed-income fund offerings that they make available to investors in an effort
to meet and anticipate the growing and changing needs and desires of an
increasingly large and dynamic group of investors. The family of no-load funds
advised by ACIM has followed this pattern. With this expansion, however, has
come increased complexity and competition among fixed-income mutual funds, as
well as increased confusion among investors.
As a result, ACIM has sought ways to restructure and streamline the
management and operations of the funds it advises. ACIM believes and has advised
the Board of Trustees that the consolidation of certain ACIM-advised funds would
benefit fund shareholders. ACIM has, therefore, proposed the consolidation of a
number of no-load ACIM-advised funds that ACIM believes have similar or
compatible investment objectives and policies. In many cases, the proposed
consolidations are designed to eliminate the substantial overlap in current
offerings by the American Century family of funds. Consolidation plans are
proposed for other American Century funds that have not gathered enough assets
to operate efficiently and, therefore, face the risk of closure and resulting
tax liability for many shareholders. ACIM believes that these consolidations
may help to enhance investment performance and increase efficiency of
operations.
ACIM recommended to the Board of Directors that, among other reasons,
because the current market demand for bond funds is generally weak and Premium
Bond, Bond, and Intermediate-Term Bond are managed very similarly, the funds
should be combined to establish a larger fund that has substantially similar
investment policies. As part of its analysis, the Board of Directors recognized
that a large fund may be able to realize certain potential cost savings that
could benefit the shareholders of the funds if the Reorganization is completed.
The Reorganization was also recommended to combine similar funds in an effort
to eliminate duplication of expenses and internal competition. The Board of
Directors reviewed the expense ratios of each fund and the projected expenses of
the combined fund; the comparative investment performance of the funds; the
compatibility of the investment objectives, policies, restrictions and
investments of the funds; the benefits that may result to ACIM and its
affiliates if the Reorganization is consummated; and the tax consequences of the
Reorganization. The Board of Directors also noted that the same portfolio
management team manages both funds. During the course of its deliberations, the
Board of Directors noted that the expenses of the Reorganization will be borne
by ACIM.
The Board of Directors concluded that the Reorganization is in the best
interests of the shareholders of Premium Bond, Bond, and Intermediate-Term Bond,
and that no dilution of value would result to the shareholders of the funds from
the Reorganization. The Board of Directors, including those who are not
"interested persons" (as defined in the 1940 Act), approved the Plan and
recommended that shareholders of Premium Bond, Bond, and Intermediate-Term Bond
vote to approve the Reorganization.
FOR THE REASONS DISCUSSED ABOVE, THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE
FOR THE PLAN.
FEDERAL INCOME TAX CONSEQUENCES
Consummation of the reorganization is subject to the condition that we
receive a tax opinion to the effect that for federal income tax purposes (i) no
gain or loss will be recognized by you, Premium Bond, Bond, Intermediate-Term
Bond, or Diversified Bond, (ii) your basis in the Diversified Bond shares that
you receive will be the same in the aggregate as your basis in the Premium Bond,
Bond, or Intermediate-Term Bond shares held by you immediately prior to the
reorganization, and (iii) your holding period for the Diversified Bond shares
will include your holding period for your Premium Bond, Bond, or
Intermediate-Term Bond shares.
We have not sought a tax ruling from the Internal Revenue Service, but are
relying upon the tax opinion referred to above. That opinion is not binding on
the IRS and does not preclude it from taking a contrary position. The opinion
does not cover state or local taxes and you should consult your own advisers
concerning the potential tax consequences.
The Agreement and Plan of Reorganization provides that Premium Bond, Bond,
and Intermediate-Term Bond each will declare and pay dividends prior to the
reorganization which, together with all previous dividends, are intended to have
the effect of distributing to their respective shareholders all undistributed
ordinary income and net realized capital gains earned up to and including the
Effective Time of the reorganization. The distributions are necessary to ensure
that the reorganization will not create adverse tax consequences for Premium
Bond, Bond, or Intermediate-Term Bond. The distributions generally will be
taxable to shareholders to the extent ordinary income and capital gains
distributions are taxable to such shareholders.
CAPITALIZATION
Diversified Bond
Premium Bond Intermediate-Term Bond Bond Pro Forma Combining
Investor Class
Net Assets $140,497,492 $39,823,009 $117,627,887 $157,450,896
Shares Outstanding 13,886,669 3,970,883 12,509,875 15,555,413
Net Asset Value Per Share $10.12 $10.03 $9.40 $10.12
Advisor Class
Net Assets N/A $3,603,795 $4,588,872 $8,192,667
Shares Outstanding N/A 359,346 488,032 809,460
Net Asset Value Per Share N/A $10.03 $9.40 $10.12
Institutional Class
Net Assets N/A N/A N/A $140,497,492
Shares Outstanding N/A N/A N/A 13,886,669
Net Asset Value Per Share N/A N/A N/A $10.12
INFORMATION ABOUT THE FUNDS
Complete information about Diversified Bond, Premium Bond, Bond, and
Intermediate-Term Bond is contained in their Prospectuses. The Diversified Bond
Prospectus is included with this Prospectus/Proxy Statement. A copy of the
Premium Bond, Bond, and Intermediate-Term Bond Prospectuses may be obtained by
calling us at 1-800-331-8331. The content of the Diversified Bond, Premium
Bond, Bond, and Intermediate-Term Bond Prospectuses is incorporated into this
document by reference. Below is a list of types of information about the funds
and the pages in the Prospectuses where the information can be found.
INFORMATION ABOUT THE CAN BE FOUND ON THE
FOLLOWING ITEMS FOLLOWING PAGES
- --------------------------------- ------------------------------------------------------------------------------------
Premium Diversified Diversified Diversified
Bond Bond Bond Bond
Investor Institutional Investor Advisor
Class Class Class Class
An Overview of the Funds 2 2 2 2
Fees and Expenses 4 3 3 3
Objectives, Strategies and Risks 5-6 4 4 4
Management 9-10 7-8 7-8 7-8
Investing with American Century 11-14 9-12 9-12 9-11
Share Price and Distributions 15 13 13 12
Taxes 17 14-15 14-15 13-14
Multiple Class Information N/A 16 16 15
Financial Highlights 19, 22 N/A N/A N/A
INFORMATION ABOUT THE CAN BE FOUND ON THE
FOLLOWING ITEMS FOLLOWING PAGES
- --------------------------------- ------------------------------------------------------------------------------------
Diversified Diversified Diversified
Bond Bond Bond Bond Bond
Investor Advisor Investor Advisor Institutional
Class Class Class Class Class
An Overview of the Funds 2 2 2 2 2
Fees and Expenses 4 4 3 3 3
Objectives, Strategies and Risks 5 5 4 4 4
Management 8-9 8-9 7-8 7-8 7-8
Investing with American Century 10-13 10-11 9-12 9-12 9-11
Share Price and Distributions 14 12 13 13 12
Taxes 15-16 13-14 14-15 14-15 13-14
Multiple Class Information 17 15 16 16 15
Financial Highlights 18, 21 16, 19 N/A N/A N/A
INFORMATION ABOUT THE CAN BE FOUND ON THE
FOLLOWING ITEMS FOLLOWING PAGES
- --------------------------------- ------------------------------------------------------------------------------------
Intermediate-Term Intermediate-Term Diversified Diversified Diversified
Bond Bond Bond Bond Bond
Investor Advisor Investor Advisor Institutional
Class Class Class Class Class
An Overview of the Funds 2 2 2 2 2
Fees and Expenses 4 4 3 3 3
Objectives, Strategies and Risks 5 5 4 4 4
Management 8-9 8-9 7-8 7-8 7-8
Investing with American Century 10-13 10-11 9-12 9-12 9-11
Share Price and Distributions 14 12 13 13 12
Taxes 15-16 13-14 14-15 14-15 13-14
Multiple Class Information 17 15 16 16 15
Financial Highlights 18, 20 16, 18 N/A N/A N/A
FUNDAMENTAL INVESTMENT POLICIES
Fundamental investment policies contained in the Diversified Bond Statement
of Additional Information and the investment objectives of the fund may not be
changed without shareholder approval. The Board of Trustees may change any other
policies and investment strategies.
INFORMATION RELATING TO VOTING MATTERS
GENERAL INFORMATION
This Combined Prospectus/Proxy Statement is being furnished in connection
with the solicitation of proxies by the Board of Directors of Premium Bond,
Bond, and Intermediate-Term Bond. Proxies may be solicited by officers and
employees of the investment advisor of the funds, their affiliates and
employees. American Century Investment Management, Inc. has hired Alamo Direct
to act as proxy solicitor for the reorganization. It is anticipated that the
solicitation of proxies will be primarily by mail, telephone, facsimile or other
electronic means, or personal interview. Authorizations to execute proxies may
be obtained by telephonic or electronically transmitted instructions in
accordance with procedures designed to authenticate the shareholder's identity
and to confirm that the shareholder has received the Combined Prospectus/Proxy
Statement and proxy card. If you have any questions regarding voting your shares
or the proxy, please call us at 1-800-331-8331. For business, not-for-profit,
and employer-sponsored retirement accounts, please call 1-800-345-3533, ext.
5004.
VOTING AND REVOCATION OF PROXIES
The fastest and most convenient way to vote your shares is to complete,
sign and mail the enclosed proxy voting card to us in the enclosed envelope.
If you have access to the Internet, you can vote online, by accessing the
website listed on the proxy card (you will need the control number that appears
on the right-hand side of your proxy card). In addition, you may vote by faxing
both sides of the completed proxy card to the toll-free number listed on the
proxy card. Your prompt response will help us obtain a quorum for the meeting
and avoid the cost of additional proxy solicitation efforts. If you return your
proxy to us, we will vote it EXACTLY as you tell us. If you simply sign the
card and return it, we will follow the recommendation of the Board of
Directors and vote "FOR" the reorganization.
Any shareholder giving a proxy may revoke it at any time before it is
exercised by submitting a written notice of revocation, or a subsequently
executed proxy, or by attending the meeting and voting in person.
RECORD DATE
Only Premium Bond, Bond, and Intermediate-Term Bond shareholders of record
at the close of business on August 10, 2001 will be entitled to vote at the
meeting. The number of outstanding votes entitled to vote at the meeting or any
adjournment of the meeting as of the close of business on July 20, 2001 is:
Premium Bond Bond Intermediate-Term Bond
Because the record date is August 10, 2001, the total number of votes at
the meeting may be different.
QUORUM
A quorum is the number of shareholders legally required to be at a meeting
in order to conduct business. The quorum for the Special Shareholders Meeting is
50% of the outstanding shares of Bond and 50% of the outstanding shares of
Intermediate-Term Bond entitled to vote at the meeting, and 33 1/3% of the
outstanding shares of Premium Bond entitled to vote at the meeting. Shares may
be represented in person or by proxy. Proxies properly executed and marked with
a negative vote or an abstention will be considered to be present at the meeting
for purposes of determining the existence of a quorum for the transaction of
business. If a quorum is not present at the meeting, or if a quorum is present
at the meeting but sufficient votes are not received to approve the Agreement
and Plan of Reorganization, the persons named as proxies may propose one or more
adjournments of the meeting to permit further solicitation of proxies. Any such
adjournment will require the affirmative vote of a majority of those shares
affected by the adjournment that are represented at the meeting in person or by
proxy. If a quorum is not present, the persons named as proxies will vote those
proxies for which they are required to vote FOR the Agreement and Plan of
Reorganization in favor of such adjournments, and will vote those proxies for
which they are required to vote AGAINST such proposals against any such
adjournments.
SHAREHOLDER VOTE REQUIRED
The Agreement and Plan of Reorganization must be approved by the holders of
a majority of the outstanding votes of each class of Premium Bond, Bond, and
Intermediate-Term Bond present at the meeting in person or by proxy in
accordance with the provisions of each fund's Articles of Incorporation and the
requirements of the Investment Company Act of 1940. The term "majority of the
outstanding shares" means more than 50% of its outstanding shares present at the
meeting in person or by proxy.
In tallying shareholder votes, abstentions and broker non-votes (i.e.,
proxies sent in by brokers and other nominees that cannot be voted on a proposal
because instructions have not been received from the beneficial owners) will be
counted for purposes of determining whether or not a quorum is present for
purposes of convening the meeting. Abstentions and broker non-votes will,
however, be considered to be a vote against the Agreement and Plan of
Reorganization.
Approval of the reorganization by shareholders of Diversified Bond is not
being solicited because their approval is not legally required.
COST OF PROXY SOLICITATION
The cost of the proxy solicitation and shareholder meeting will be borne by
American Century Investment Management, Inc. and NOT by the shareholders of the
funds.
CERTAIN SHAREHOLDERS
The following tables list, as of July 20, 2001, the names, addresses and
percentage of ownership of each person who owned of record or is known by either
fund to own beneficially 5% or more of any class of Premium Bond, Bond,
Intermediate-Term Bond, or Diversified Bond. The percentage of shares to be
owned after consummation of the reorganization is based upon their holdings and
the outstanding shares of the funds on July 20, 2001. Beneficial ownership
information is not required to be disclosed to the funds, so to the extent that
information is provided below, it is done so using the best information that the
funds have been provided.
NUMBER OF PERCENT OF PERCENT OWNED AFTER
SHAREHOLDER NAME AND ADDRESS SHARES OWNED OWNERSHIP REORGANIZATION
- ----------------------------- ------------- ----------- ---------------------
- ----------------------------- ------------- ----------- ---------------------
- ----------------------------- ------------- ----------- ---------------------
At July 20, 2001, the directors and officers of the issuers of Premium
Bond, Bond, or Intermediate-Term Bond, as a group, owned less than 1% of the
outstanding shares of Premium Bond, Bond, or Intermediate-Term Bond,
respectively. At July 20, 2001, the trustees and officers of the issuer of
Diversified Bond, as a group, owned less than 1% of the outstanding shares of
Diversified Bond.
APPRAISAL RIGHTS
Shareholders of Premium Bond, Bond, and Intermediate-Term Bond are not
entitled to any rights of share appraisal under the funds' respective Articles
of Incorporation, or under the laws of the State of Maryland or Delaware.
Shareholders have, however, the right to redeem their Premium Bond, Bond,
and Intermediate-Term Bond shares until the reorganization. Thereafter,
shareholders may redeem the Diversified Bond shares they received in the
reorganization at Diversified Bond's net asset value as determined in accordance
with its then-current prospectus.
ANNUAL MEETINGS
Diversified Bond does not intend to hold annual meetings of shareholders.
Shareholders of Diversified Bond have the right to call a special meeting of
shareholders and such meeting will be called when requested in writing by the
shareholders of record of 10% or more of the fund's votes. To the extent
required by law, American Century Investment Trust will assist in shareholder
communications on such matters.
Premium Bond, Bond, and Intermediate-Term Bond do not intend to hold an
annual meeting of shareholders this year for the election of directors or the
ratification of the appointment of auditors.
ADDITIONAL INFORMATION
Information about Premium Bond is incorporated into this document by
reference from its Prospectus and Statement of Additional Information, each
dated August 1, 2001, information about Bond and Intermediate-Term Bond is
incorporated into this document by reference from their Prospectus dated March
1, 2001 and Statement of Additional Information dated May 1, 2001, and
information about Diversified Bond is incorporated into this document by
reference from its Prospectus and Statement of Additional Information, each
dated August 20, 2001. A copy of the Diversified Bond Prospectus accompanies
this document, and a copy of the fund's Statement of Additional Information may
be obtained without charge by calling one of our Investor Services
Representatives at 1-800-331-8331. You may also obtain copies of the Premium
Bond, Bond, and Intermediate-Term Bond Prospectuses and Statements of Additional
Information without charge by calling us at 1-800-331-8331.
Reports and other information filed by Premium Bond, Bond,
Intermediate-Term Bond, and Diversified Bond may be inspected and copied at the
Public Reference Facilities maintained by the SEC at 450 Fifth Street, N.W.,
Washington, D.C. 20549, and copies of such materials may be obtained by mail
from the Public Reference Branch, Office of Consumer Affairs and Information
Services, Securities and Exchange Commission, Washington, D.C. 20549, at
prescribed rates. This information may also be obtained from the EDGAR database
at www.sec.gov, or by email request at publicinfo@sec.gov.
LITIGATION
Premium Bond, Bond, Intermediate-Term Bond and Diversified Bond are not
involved in any litigation or proceeding.
OTHER BUSINESS
The Board of Directors is not aware of any other business to be brought
before the meeting. However, if any other matters come before the meeting, it is
the directors' intention that proxies that do not contain specific restrictions
to the contrary will be voted on such matters in accordance with the judgment of
the persons named in the enclosed form of proxy.
SHAREHOLDER INQUIRIES
Shareholder inquiries may be addressed to us at the address or telephone
number set forth on the cover page of this Combined Prospectus/Proxy Statement.
SHAREHOLDERS ARE REQUESTED TO DATE AND SIGN EACH ENCLOSED PROXY AND RETURN
IT IN THE ENCLOSED ENVELOPE. PLEASE RETURN YOUR PROXY CARD EVEN IF YOU ARE
PLANNING TO ATTEND THE MEETING. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED
STATES.
MANAGEMENT'S DISCUSSION
OF FUND PERFORMANCE
PREMIUM BOND
Provided that the reorganization is approved by shareholders, Diversified
Bond will inherit the performance history of Premium Bond. Accordingly, the
following are excerpts of management's discussion of fund performance from the
Premium Bond Annual Report dated March 31, 2001. For a complete copy of the
Premium Bond report, please call us at 1-800-331-8331.
REPORT HIGHLIGHTS
* Very favorable conditions in the U.S. bond market propelled Premium
Bond, its benchmark, and its peer group to exceptional returns.
* As you'd expect during a powerful bond rally, the fund's yield fell,
but it was still competitive.
* The main difference between the performance of Premium Bond and its
benchmark was fund expenses.
* Relatively low fund expenses, plus a relatively smaller weighting in
corporate securities compared with the other funds in its Lipper category,
helped Premium Bond outperform the average return of the category.
* Reflecting the composition of the U.S. bond market and Premium Bond's
benchmark, the fund's largest weighting for much of the year was in
mortgage-backed securities.
* The portfolio's largest overweight compared with its benchmark was in
corporates, and the biggest underweight was in Treasurys.
* Given current economic conditions and the bond market outlook, our
sector valuation preferences suggest heavier weightings incorporates and
mortgages and lighter in Treasurys.
PREMIUM BOND(1)
Total Returns: AS OF 3/31/01
6 Months 7.37%(2)
1 Year 12.03%
30-Day SEC Yield: 5.75%
Net Assets: $140.5 Million
Inception Date: 4/1/93
Ticker Symbol:
(1) Investor Class.
(2) Not annualized.
OUR MESSAGE TO YOU
[Photo of James E. Stowers, Jr. and James E. Stowers III]
Economic and financial market conditions have changed dramatically since
our last annual report to you. A year ago, a booming economy, inflation fears,
and rising interest rates had created a difficult environment for U.S. bonds.
By contrast, conditions became almost ideal for investment-grade bonds
during the year ended March 31, 2001. Higher interest rates a year ago slowed
the economy dramatically, particularly the technology and manufacturing
sectors. Bonds rallied strongly as stock prices and interest rates fell.
The rally boosted Premium Bond to its highest fiscal year total return
since the fund's inception in 1993. The fund's investment team reviews economic
and market conditions as well as the fund's strategy and performance below.
The sudden change in the financial climate also reminded investors about
the value of diversification. Risk reduction was easy to ignore during the
extended stock rally from 1995 to 2000 but last year reminded everyone that
downturns still occur. Investors who are sensitive to overall portfolio
volatility should keep some fixed-income securities in their portfolios to
absorb the shocks that changing economic conditions can bring.
Turning to corporate matters, we're proud to announce that for the second
consecutive year, American Century's fund performance reports, like this one,
earned the Communications Seal from DALBAR, Inc., an independent financial
services research firm. The Seal recognizes communications excellence in the
industry.
What's more, American Century made Fortune Magazine's list of the "100
Best Companies to Work for in America" for the second year in a row. This is
important for us because we think it demonstrates our commitment to attract and
retain the best people to serve our shareholders. We believe that ultimately our
success, and that of our investors, is based on the quality of our "intellectual
capital" - the collective wisdom of our investment and service professionals.
As always, we appreciate your continued confidence in American Century.
Sincerely,
James E. Stowers, Jr. James E. Stowers III
Chairman of the Board and Founder Co-Chairman of the Board
PERFORMANCE & PORTFOLIO INFORMATION
AVERAGE ANNUAL RETURNS
6 MONTHS(1) 1 YEAR 3 YEARS 5 YEARS LIFE OF FUND
TOTAL RETURNS AS OF
MARCH 31, 2001( (1))
Premium Bond 7.37% 12.03% 6.31% 6.91% 6.40%
Lehman Aggregate Bond Index 7.37% 12.53% 6.88% 7.48%(3) 6.92%
A-Rated Corporate Debt Funds(2)
Average Return 6.87% 10.77% 5.35% 6.38% 6.16%(3)
Fund's Ranking (--) 31 out of 180 22 out of 145 32 out of 116 21 out of 65(3)
The fund's inception date was 4/1/93.
(1) Returns for periods less than one year are not annualized.
(2) According to Lipper, Inc., an independent mutual fund ranking service.
(3) Since 4/30/93, the date nearest the fund's inception for which return data
are available.
(4) According to Lipper Analytical Services.
YIELD AS OF MARCH 31, 2001 PORTFOLIO AT A GLANCE
30-Day SEC Yield 5.75% 3/31/01 3/31/00
Number of Securities 127 133
Weighted Average
Maturity 8.8 yrs 8.5 yrs
Average Duration 4.6 yrs 4.9 yrs
Expense Ratio 0.45% 0.45%
MANAGEMENT Q&A
An interview with Jeff Houston, a portfolio manager on the Premium Bond fund
investment team.
HOW DID THE FUND PERFORM DURING THE YEAR ENDED MARCH 31, 2001?
Very favorable conditions in the U.S. bond market propelled Premium Bond
and its peer group (180 A-Rated Corporate Debt Funds tracked by Lipper Inc.) to
exceptional returns.
The fund returned 12.03% and the peer group's average gain was 10.77%.
Premium Bond's benchmark - the Lehman Brothers Aggregate Bond Index - rose
12.53%.
By contrast, as of March 31, 2001, Premium Bond's average annual return
since its April 1, 1993, inception was 6.40%, the peer group average's was
6.16%, and the benchmark's was 6.92%.
HOW DID THE FUND'S YIELD COMPARE?
As you'd expect during a powerful bond rally, the yield fell but it was
still competitive. As of March 31, 2001, the fund'' 30-day SEC yield was 5.75%,
compared with 5.98% for the Lehman Brothers index and the 5.28% average yield of
Premium Bond's Lipper category.
PREMIUM BOND TRACKED THE PERFORMANCE OF ITS BENCHMARK PRETTY CLOSELY. WAS THE
DIFFERENCE MAINLY FUND EXPENSES?
That's right. If you add 0.45% (the fund's expense ratio) to the fund's
one-year return and yield as of March 31, 2001, you pretty much close the gap.
However, Premium Bond's fund expenses are much lower than the average of
the fund's Lipper category (1.07% as of March 31, 2001). That's helped the fund
consistently beat the category's average return and rank in the top third.
WHEN YOU COMPARE THE FUND WITH ITS BENCHMARK AND LIPPER CATEGORY, WHAT ELSE
STANDS OUT?
Premium Bond's similarity to its benchmark and its difference from the
funds in its category. The funds in the Lipper category tend to favor corporate
securities. By contrast, for much of Premium Bond's fiscal year, the fund and
the Lehman Brothers index favored fixed-rate mortgage-backed securities, about
35% in each case as of March 31, 2001 (including the fund's commercial
mortgage-backed securities, which are listed as part of the asset-backed
securities holdings in this report). Premium Bond's and the index's corporate
weightings as of March 31, 2001, were decidedly smaller - 29% and 22%
respectively.
That worked out well because for much of the fiscal year, corporates
underperformed. Supply and demand imbalances and negative perceptions of
corporate financial health hurt the sector.
WHY WERE THE FUND AND THE BENCHMARK WEIGHTED MOST HEAVILY IN MORTGAGE-BACKED
SECURITIES (MBS)?
MBS represented the largest sector (in terms of market value) of the
taxable investment-grade U.S. bond market. The Lehman Brothers Aggregate Bond
Index mirrors the composition and performance of that market, as the S&P 500
does for U.S. stocks. We chose the Lehman index to be the benchmark for Premium
Bond because we wanted the fund to mirror the market.
But Premium Bond isn't an index fund - its sector weightings don't have to
match the benchmark's. Our investment approach is to look for the best values
and yields, overweighting sectors that appear attractive and underweighting
those that aren't.
As of March 31, 2001, the largest sectors in the benchmark were MBS (35%),
Treasurys (25%), corporates (22%), and government agencys (11%). The fund's
biggest under and overweights among these sectors were Treasurys (under, at 18%)
and corporates (over, at 29%).
WHY WAS PREMIUM BOND SO UNDERWEIGHT IN TREASURYS? DON'T THEY PERFORM WELL DURING
ECONOMIC DOWNTURNS?
Treasurys often rally in anticipation of worsening economic conditions, not
during the downturn itself. Just look at 2000 - most of the Fed's interest rate
cuts were priced into the market well before the rate cuts actually began.
Similarly, longer-maturity Treasury prices and yields often anticipate
Economic recoveries well before they're fully underway. That's why longer-term
Treasurys have underperformed in 2001 - their yields are already rising in
anticipation of stronger economic growth and a greater threat of inflation by
next year.
WHAT'S YOUR OUTLOOK FOR THE U.S. ECONOMY AND BOND MARKET?
Some interesting events transpired in April as we were preparing this
report - the Federal Reserve cut short-term interest rates for the fourth time
this year, the U.S. stock market rallied, and economic data seemed to indicate
that the manufacturing sector (hit worse by this economic downturn) was showing
signs of recovery.
However, given weakening global economic conditions and the financial
difficulties still plaguing corporate America, we think the Fed will cut
interest rates at least one more time by June 30 to stimulate growth.
Expectations of another cut and the economic rebound it might trigger caused the
Treasury yield curve to steepen further in April. That bodes better for
corporates and other non-Treasury "spread" product than it does for
long-maturity Treasurys.
SO YOUR OVERWEIGHTS AND UNDERWEIGHTS AS OF MARCH 31, 2001, ALREADY TOOK YOUR
OUTLOOK INTO ACCOUNT?
That's right. We wanted to be overweight in spread product in anticipation
of getting more income return for the remainder of this year rather than bond
price appreciation. But we don't want to be too overweight in corporates
because financial conditions are still somewhat unstable. And we don't want to
overweight MBS because of the prepayment risk - low interest rates have
triggered a mortgage refinancing wave that's causing MBS to effectively mature
early and prepay investors.
To address these risks, we've focused on big, defensive, and easily
tradable names in the corporate market, and used high-rated commercial MBS to
reduce our exposure to rising prepayments. And in response to inflation
concerns, we'll still selectively hold Treasury inflation-indexed securities
(TIIS).
TYPES OF INVESTMENTS IN THE PORTFOLIO (AS OF MARCH 31, 2001)
MORTGAGE-BACKED SECURITIES 29%
CORPORATE BONDS 29%
U.S. TREASURY SECURITIES 18%
ASSET-BACKED SECURITIES 13%
GOVERNMENT AGENCY SECURITIES 10%
OTHER 1%
PORTFOLIO COMPOSITION BY SECURITY TYPE (AS OF SEPTEMBER 30, 2000)
MORTGAGE-BACKED SECURITIES 35%
CORPORATE BONDS 34%
U.S. TREASURY SECURITIES 11%
ASSET-BACKED SECURITIES 11%
GOVERNMENT AGENCY SECURITIES 7%
OTHER 2%
AMERICAN CENTURY MUTUAL FUNDS, INC.
American Century Investments
4500 Main Street
P.O. Box 419200
Kansas City, Missouri 64141-6200
1-800-331-8331
AMERICAN CENTURY INVESTMENT TRUST
American Century Investments
4500 Main Street
P.O. Box 419200
Kansas City, Missouri 64141-6200
1-800-331-8331
Statement of Additional Information
2001 Special Meeting of Shareholders of American Century Mutual Funds, Inc.
This Statement of Additional Information is not a prospectus but should be
read in conjunction with the Combined Proxy Statement/Prospectus dated , 2001
for the Special Meeting of Shareholders to be held on November 16, 2001. Copies
of the Combined Proxy Statement/Prospectus may be obtained at no charge by
calling 1-800-331-8331.
Unless otherwise indicated, capitalized terms used herein and not otherwise
defined have the same meanings as are given to them in the Combined Proxy
Statement/Prospectus.
Further information about Diversified Bond is contained in and incorporated
herein by reference to its Statement of Additional Information dated August 20,
2001. As a new fund, Diversified Bond did not have financial information as of
the fiscal year end.
Further information about Intermediate-Term Bond is contained in and
incorporated herein by reference to its Statement of Additional Information
dated May 1, 2001. The audited financial statements and related independent
accountant's report for Intermediate-Term Bond contained in the Annual Report
dated October 31, 2000 are incorporated herein by reference. No other parts of
the Annual Report are incorporated by reference herein.
Further information about Bond is contained in and incorporated herein by
reference to its Statement of Additional Information dated May 1, 2001. The
audited financial statements and related independent accountant's report for
Bond contained in the Annual Report dated October 31, 2000 are incorporated
herein by reference. No other parts of the Annual Report are incorporated by
reference herein.
Further information about Premium Bond is contained in and incorporated
herein by reference to its Statement of Additional Information dated August 1,
2001. The audited financial statements and related independent accountant's
report for Premium Bond contained in the Annual Report dated March 31, 20001
are incorporated herein by reference. No other parts of the Annual Report are
incorporated by reference herein.
The date of this Statement of Additional Information is ____________.
TABLE OF CONTENTS
General Information
Pro Forma Financial Statements
GENERAL INFORMATION
The shareholders of Intermediate-Term Bond, Bond, and Premium Bond are
being asked to approve or disapprove an Agreement and Plan of Reorganization
(the "Reorganization Agreement") dated as of , 2001 between American Century
Mutual Funds, Inc., American Century Premium Reserves, Inc. and American Century
Investment Trust and the transactions contemplated thereby. The Reorganization
Agreement contemplates the transfer of substantially all of the assets and
liabilities of Intermediate-Term Bond, Bond, and Premium Bond to Diversified
Bond in exchange for full and fractional shares representing interests in
Diversified Bond. The shares issued by Diversified Bond will have an aggregate
net asset value equal to the aggregate net asset value of the shares of
Intermediate-Term Bond, Bond, and Premium Bond, respectively, that are
outstanding immediately before the effective time of the Reorganization.
Following the exchange, Intermediate-Term Bond, Bond, and Premium Bond will
each make a liquidating distribution to its shareholders of the Diversified Bond
shares received in the exchange. Each shareholder owning shares of
Intermediate-Term Bond, Bond or Premium Bond at the Effective Time of the
reorganization will receive shares of Diversified Bond of equal value, plus the
right to receive any unpaid dividends that were declared before the Effective
Time of the Reorganization on the Intermediate-Term Bond, Bond, or Premium Bond
shares exchanged.
The Special Meeting of Shareholders to consider the Reorganization
Agreement and the related transactions will be held at 10:00 a.m. Central time
on November 16, 2001 at American Century Tower I, 4500 Main Street, Kansas City,
Missouri. For further information about the transaction, see the Combined Proxy
Statement/Prospectus.
Pro Forma Combining
American Century Intermediate-Term Bond Fund
American Century Bond Fund
Premium Bond Fund and
American Century Diversified Bond Fund
Premium Bond ("Fund 1") / Intermediate-Term Bond ("Fund 2") / Bond ("Fund 3")
PROFORMA COMBINED SCHEDULE OF INVESTMENTS
(Unaudited) \
Proforma
Fund 1 Fund 2 Fund 3 Combined
Principal Principal Principal Principal
Amount Amount Amount Amount Security Description
- ----------------------------------------------------------------------------------------------------
CORPORATE BONDS - 33.6%
BANKS - 1.6%
$ 500,000 $ 250,000 $ 750,000 $ 1,500,000 Bank of America Corp.,
7.400%, 1/15/11
1,100,000 500,000 1,500,000 3,100,000 Citigroup Inc., 7.250%,
10/01/10
COMPUTER HARDWARE & BUSINESS MACHINES - 0.1%
- - 455,000 455,000 International Business
Machines Corp., 7.125%,
12/01/96
DEFENSE/AEROSPACE - 1.8%
700,000 350,000 1,500,000 2,550,000 Alliant Energy Resources
Inc., 7.375%, 11/09/09
750,000 400,000 1,500,000 2,650,000 Raytheon Company,
8.200%, 3/01/06
DEPARTMENT STORES - 0.1%
- 200,000 - 200,000 Sears, Roebuck & Co. Inc.
MTN, 8.290%, 6/10/02
DRUGS - 0.4%
1,100,000 - - 1,100,000 Cardinal Health Inc.,
6.750%, 2/15/11
ELECTRICAL EQUIPMENT - 0.4%
200,000 300,000 - 500,000 Anixter International Inc.,
8.000%, 9/15/03
500,000 300,000 - 800,000 Yorkshire Power Finance,
Series B, 6.150%, 2/25/03
ELECTRICAL UTILITY - 4.1%
1,000,000 450,000 1,500,000 2,950,000 Cilcorp, Inc., 8.700%,
10/15/09
1,300,000 - - 1,300,000 Dominion Resources Inc.,
6.000%, 1/31/03
1,000,000 400,000 1,100,000 2,500,000 Dynegy Holdings Inc.,
6.875%, 4/01/11
- 300,000 - 300,000 Georgia Power Company,
Series F, 5.75%, 1/31/2003
2,000,000 - - 2,000,000 Progress Energy Inc.,
7.100%, 3/01/11
1,400,000 400,000 1,200,000 3,000,000 Wisconsin Energy Corp.,
6.500%, 4/01/11
ENERGY RESERVES & PRODUCTION - 2.2%
1,500,000 500,000 1,500,000 3,500,000 Duke Energy Field
Services, 7.875%, 8/16/10
1,000,000 350,000 1,250,000 2,600,000 El Paso Corp. MTN,
8.050%, 10/15/30
FINANCIAL SERVICES - 3.7%
1,000,000 500,000 1,200,000 2,700,000 Associates Corp., N.A.,
6.000%, 7/15/05
1,500,000 400,000 800,000 2,700,000 Ford Motor Credit Co.,
6.875%, 2/01/06
1,000,000 300,000 1,500,000 2,800,000 Ford Motor Credit Co.,
7.500%, 3/15/05
1,000,000 350,000 1,300,000 2,650,000 Household Finance Corp.,
6.500%, 1/24/06
FOOD & BEVERAGE - 0.7%
1,000,000 200,000 1,000,000 2,200,000 Kellogg Co., 7.450%,
4/01/31 (Acquired 3/26/01,
Combined Cost $2,210,252)(1)
FOREST PRODUCTS & PAPER - 0.3%
500,000 250,000 - 750,000 Abitibi-Consolidated Inc.,
8.550%, 8/01/10
GAS & WATER UTILITIES - 1.7%
500,000 - - 500,000 Columbia Energy Group,
6.800%, 11/28/05
- - 2,000,000 2,000,000 Columbia Energy Group,
7.420%, 11/28/15
1,000,000 300,000 1,100,000 2,400,000 KeySpan Corporation,
7.250%, 11/15/05
GROCERY STORES - 1.6%
750,000 300,000 1,000,000 2,050,000 Kroger Co., 7.650%, 04/15/07
1,300,000 300,000 1,200,000 2,800,000 Safeway Inc., 6.150%, 03/01/06
HOTELS - 1.1%
750,000 500,000 2,000,000 3,250,000 MGM Mirage, 8.500%, 09/15/10
09/15/10
INDUSTRIAL PARTS - 0.2%
750,000 - - 750,000 Caterpillar Financial Services
Corp., 5.900%, 09/10/02
INDUSTRIAL SERVICES - 1.1%
1,550,000 500,000 1,250,000 3,300,000 Tyco International Group
S.A., 6.375%, 2/15/06
INFORMATION SERVICES - 0.6%
750,000 290,000 1,000,000 2,040,000 KPNQwest B.V., 8.125%,
06/01/09
LIFE & HEALTH INSURANCE - 1.3%
- - 1,000,000 1,000,000 Delphi Financial Group,
Inc., 9.310%, 3/25/27
- - 3,000,000 3,000,000 Lincoln National Corp.,
9.125%, 10/01/04
MEDIA - 2.1%
1,000,000 350,000 1,100,000 2,450,000 Comcast Cable Communications,
8.375%, 05/01/07
- - 2,000,000 2,000,000 CSC Holdings Inc.,
7.250%, 7/15/08
1,300,000 500,000 - 1,800,000 CSC Holdings Inc.,
7.625%, 7/15/18
MOTOR VEHICLES & PARTS - 0.1%
350,000 - - 350,000 General Motors Corp.,
7.000%, 6/15/03
OIL SERVICES - 1.7%
1,250,000 400,000 1,300,000 2,950,000 Anderson Exploration Ltd.,
6.750%, 3/15/11
1,000,000 300,000 1,000,000 2,300,000 TransOcean Sedco Forex,
6.625%, 4/15/11 (Acquired
3/30/01, Combined Cost $2,287,971)(1)(2)
RAILROADS - 0.7%
500,000 200,000 600,000 1,300,000 Burlington Northern Santa
Fe Corp., 6.750%, 3/15/29
1,000,000 - - 1,000,000 Norfolk Southern Corp.,
6.950%, 5/01/02
REAL ESTATE INVESTMENT TRUST - 1.7%
1,000,000 300,000 1,000,000 2,300,000 EOP Operating LP,
6.750%, 2/15/08
- - 3,000,000 3,000,000 Spieker Properties, Inc.
MTN, 7.580%, 12/17/01
SECURITIES & ASSET MANAGEMENT - 2.0%
1,000,000 350,000 - 1,350,000 AXA Financial Inc.,
7.750%, 8/01/10
2,000,000 600,000 2,000,000 4,600,000 Merrill Lynch & Co., Inc.,
7.250%, 7/26/02
TELEPHONE - 1.4%
1,500,000 500,000 2,000,000 4,000,000 Qwest Capital Funding
Inc., 7.750%, 8/15/06
(Acquired 8/17/00, Combined Cost
$3,996,120)(1)
WIRELESS TELECOMMUNICATIONS - 0.9%
1,350,000 350,000 1,000,000 2,700,000 AT&T Wireless Services
Inc., 7.875%, 3/01/11
(Acquired 3/1/01-3/22/01,
Combined Cost $2,710,514)(1)
TOTAL CORPORATE BONDS (Combined Cost $99,632,666)
MORTGAGE-BACKED SECURITIES(3) - 22.8%
638,352 - - 638,352 FHLMC Pool #C00553,
7.000%, 9/01/27
736,397 220,920 - 957,317 FHLMC Pool #C00578,
6.500%, 1/01/28
873,206 - 2,619,619 3,492,825 FHLMC Pool #C00731,
6.500%, 3/01/29
3,979,071 - - 3,979,071 FHLMC Pool #C038971,
6.500%, 6/01/29
731,031 438,618 1,462,062 2,631,711 FHLMC Pool #C30060,
7.500%, 8/01/29
916,519 - - 916,519 FHLMC Pool #C30257,
7.000%, 8/01/29
- - 5,727,385 5,727,385 FHLMC Pool #C40679,
7.000%, 7/01/30
82,633 - - 82,633 FHLMC Pool #D75034,
8.500%, 10/01/26
- 328,071 - 328,071 FHLMC Pool #E00279,
6.500%, 2/01/09
806,084 - - 806,084 FHLMC Pool #E00724,
7.000%, 6/01/14
581,918 - - 581,918 FHLMC Pool #E68523,
6.500%, 12/01/12
- - 3,096,186 3,096,186 FHLMC Pool #E68681,
6.000%, 1/01/13
440,039 440,039 FHLMC Pool #E73566,
7.000%, 11/01/13
- 160,788 - 160,788 FHLMC Pool #G00907,
7.000%, 2/01/28
- - 2,628,797 2,628,797 FNMA Pool #250452,
6.500%, 1/01/26
608,672 260,859 2,608,593 3,478,125 FNMA Pool #252211,
6.000%, 1/01/29
426,256 - - 426,256 FNMA Pool #252212,
6.500%, 1/01/29
1,023,874 - - 1,023,874 FNMA Pool #252213,
6.000%, 1/01/14
699,635 - - 699,635 FNMA Pool #272894,
6.000%, 2/01/09
1,389,412 463,137 - 1,852,549 FNMA Pool #323980,
6.000%, 4/01/14
578,796 - - 578,796 FNMA Pool #405425,
7.000%, 12/01/27
1,097,914 - - 1,097,914 FNMA Pool #406904,
7.500%, 4/01/28
- 229,297 - 229,297 FNMA Pool #411821,
7.000%, 1/01/28
1,191,364 - - 1,191,364 FNMA Pool #412562,
6.500%, 1/01/28
493,956 164,652 - 658,608 FNMA Pool #413812,
6.500%, 1/01/28
1,282,057 - - 1,282,057 FNMA Pool #426069,
7.000%, 5/01/28
155,168 - - 155,168 FNMA Pool #426130,
6.000%, 5/01/13
649,323 - - 649,323 FNMA Pool #426773,
6.000%, 7/01/13
- 258,879 - 258,879 FNMA Pool #427913,
6.000%, 5/01/13
- 284,845 - 284,845 FNMA Pool #431837,
7.000%, 6/01/28
872,615 - - 872,615 FNMA Pool #437421,
6.000%, 9/01/28
256,794 256,794 - 513,588 FNMA Pool #450619,
6.000%, 12/01/28
- - 1,351,442 1,351,442 FNMA Pool #453124,
6.000%, 12/01/13
451,673 - - 451,673 FNMA Pool #453956,
6.000%, 12/01/28
- - 2,466,421 2,466,421 FNMA Pool #484698,
6.000%, 2/01/14
908,813 454,406 - 1,363,219 FNMA Pool #492315,
6.500%, 4/01/29
- - 1,259,413 1,259,413 FNMA Pool #503915,
7.000%, 7/01/29
- - 437,879 437,879 FNMA Pool #504748,
7.000%, 7/01/29
803,797 281,329 1,205,696 2,290,822 FNMA Pool #506995,
7.500%, 7/01/29
922,385 461,192 - 1,383,577 FNMA Pool #537234,
7.000%, 5/01/30
2,686,252 1,111,554 2,315,735 6,113,541 FNMA Pool #542599,
7.500%, 8/01/30
- 256,740 - 256,740 GNMA Pool #002202,
7.000%, 4/20/26
330,862 - - 330,862 GNMA Pool #230356,
7.500%, 8/20/17
814,070 - - 814,070 GNMA Pool #313107,
7.000%, 11/15/22
12,689 - - 12,689 GNMA Pool #407141,
9.250%, 2/15/25
29,254 - - 29,254 GNMA Pool #407254,
9.250%, 3/15/25
122,540 - - 122,540 GNMA Pool #408099,
8.750%, 3/15/25
538,008 - - 538,008 GNMA Pool #423061,
8.000%, 6/15/27
359,214 - - 359,214 GNMA Pool #423986,
8.000%, 8/15/26
68,726 - - 68,726 GNMA Pool #432437,
7.500%, 4/15/27
409,258 342,995 - 752,253 GNMA Pool #436277,
6.500%, 3/15/28
173,232 - - 173,232 GNMA Pool #443782,
7.500%, 11/15/27
454,520 - - 454,520 GNMA Pool #447692,
7.500%, 5/15/27
26,982 - - 26,982 GNMA Pool #455126,
6.500%, 5/15/28
379,600 135,572 - 515,172 GNMA Pool #458862,
7.500%, 2/15/28
1,748,880 - - 1,748,880 GNMA Pool #458887,
6.500%, 5/15/28
65,543 - - 65,543 GNMA Pool #461011,
7.500%, 11/15/27
422,918 - - 422,918 GNMA Pool #463891,
6.500%, 5/15/28
490,356 210,152 - 700,508 GNMA Pool #467626,
7.000%, 2/15/28
885,869 281,868 - 1,167,737 GNMA Pool #469811,
7.000%, 12/15/28
661,409 - - 661,409 GNMA Pool #471859,
7.000%, 4/15/28
- 437,806 - 437,806 GNMA Pool #509502,
8.000%, 12/15/29
390,509 195,255 - 585,764 GNMA Pool #780412,
7.500%, 8/15/26
TOTAL MORTGAGE-BACKED SECURITIES (Combined Cost $68,307,724)
U.S. TREASURY SECURITIES - 20.0%
8,700,000 2,050,000 5,425,000 16,175,000 STRIPS - PRINCIPAL,
5.970%, 11/15/27(4)
- 650,000 2,200,000 2,850,000 U.S. Treasury Bonds,
5.00%, 2/15/2011
1,500,000 550,000 3,500,000 5,550,000 U.S. Treasury Bonds,
6.375%, 8/16/27
- 300,000 - 300,000 U.S. Treasury Bonds,
6.500%, 11/15/26
2,500,000 250,000 - 2,750,000 U.S. Treasury Bonds,
8.000%, 11/15/21
- 600,000 - 600,000 U.S. Treasury Bonds,
9.125%, 5/15/18
4,022,600 502,825 1,407,910 5,900,000 U.S. Treasury Inflation
Indexed Bonds, 3.500%, 01/15/11
- 1,000,000 - 1,000,000 U.S. Treasury Notes,
4.625%, 2/28/03
1,700,000 - - 1,700,000 U.S. Treasury Notes,
5.125%, 12/31/02
- 1,000,000 - 1,000,000 U.S. Treasury Notes,
5.500%, 1/31/03
1,000,000 - - 1,000,000 U.S. Treasury Notes,
5.500%, 2/15/08
- - 1,500,000 1,500,000 U.S. Treasury Notes,
5.625%, 5/15/01
5,800,000 1,950,000 10,600,000 18,350,000 U.S. Treasury Notes,
5.750%, 11/15/05
- 350,000 1,350,000 1,700,000 U.S. Treasury Notes,
6.625%, 5/15/07
5,500,000 1,700,000 2,000,000 9,200,000 U.S. Treasury Notes,
6.750%, 5/15/05
- 300,000 - 300,000 U.S. Treasury Notes,
7.875%, 11/15/04
TOTAL U.S. TREASURY SECURITIES (Combined Cost $59,890,633)
ASSET-BACKED SECURITIES(3) - 7.5%
800,000 - - 800,000 AmeriCredit Automobile
Receivables Trust, Series
1999 D, Class A3 SEQ,
7.020%, 12/05/05
1,000,000 - 1,500,000 2,500,000 BMW Vehicle Owner Trust,
Series 1999 A, Class A3
SEQ, 6.410%, 4/25/03
995,039 - - 995,039 Case Equipment Loan
Trust, Series 1998 B, Class
A4 SEQ, 5.920%, 10/15/05
1,000,000 - - 1,000,000 CIT RV Trust, Series 1997
A, Class A6 SEQ, 6.350%,
04/15/11
750,000 - - 750,000 CIT RV Trust, Series 1998
A, Class A4 SEQ, 6.090%,
02/15/12
1,300,000 300,000 - 1,600,000 Countrywide Asset-Backed
Certificates, Series 2001-1,
Class AF3, 6.100%, 8/25/26
1,000,000 350,000 1,000,000 2,350,000 Delta Air Lines Inc., Series
2000-1, Class A1, 7.380%,
05/18/10
- 300,000 1,000,000 1,300,000 Detroit Edison
Securitization Funding LLC,
Series 2001-1, Class A4
SEQ, 6.190%, 3/01/13
636,999 297,266 1,698,665 2,632,930 Nationslink Funding Corp.,
Series 1998-2, Class A1
SEQ, 6.000%, 11/20/07
1,250,000 - - 1,250,000 Nationslink Funding Corp.,
Series 1999-1, Class A2
SEQ, 6.320%, 11/20/08
1,250,000 250,000 1,000,000 2,500,000 PSE&G Transition Funding
LLC, Series 2001-1, Class
A5 SEQ, 6.450%, 3/15/13
2,000,000 500,000 2,000,000 4,500,000 Residential Asset Securities
Corp., Series 1999 KS3,
Cl AI2, 7.080%, 09/25/20
TOTAL ASSET-BACKED SECURITIES (Combined Cost $22,177,789)
U.S. GOVERNMENT AGENCY SECURITIES - 5.6%
2,000,000 - - 2,000,000 FHLMC, 5.250%, 2/15/04
1,000,000 - - 1,000,000 FHLMC, 5.750%, 4/15/08
1,000,000 - - 1,000,000 FNMA MTN, 5.740%, 01/21/09
500,000 - - 500,000 FNMA MTN, 7.000%, 02/20/07
1,100,000 - - 1,100,000 FNMA, 5.250%, 1/15/09
2,000,000 200,000 200,000 2,400,000 FNMA, 6.625%, 11/15/10
3,000,000 2,000,000 - 5,000,000 FNMA, 7.125%, 2/15/05
2,750,000 300,000 - 3,050,000 FNMA, Series B, 7.250%,
01/15/10
TOTAL U.S. GOVERNMENT AGENCY SECURITIES (Combined Cost $16,376,603)
COLLATERALIZED MORTGAGE OBLIGATIONS(3) - 5.1%
1,250,000 400,000 1,500,000 3,150,000 Chase Commercial
Mortgage Securities Corp.,
Series 1999 2, Class A2
SEQ, 7.200%, 11/15/09
840,115 420,058 - 1,260,173 First Union-Lehman
Brothers Commercial Mortgage,
Series 1998 C2, Class A1 SEQ,
6.280%, 06/18/07
1,000,000 350,000 1,500,000 2,850,000 First Union- Lehman
Brothers-Bank of America
Series 1998 C2, Class A2
SEQ, 6.560%, 11/18/08
- - 314,983 314,983 FNMA REMIC, Series 1989-35,
Class G, 9.500%, 07/25/19
1,000,000 500,000 - 1,500,000 FNMA REMIC, Series
1997-58, Class PB PAC,
6.500%, 6/18/24
1,000,000 600,000 2,400,000 4,000,000 GMAC Commercial
Mortgage Securities Inc.,
Series 1999 C1, Class A2
SEQ, 6.180%, 5/15/33
258,442 - - 258,442 Money Store (The) Home Equity
Trust, Series 1994 B, Class
A4 SEQ, 7.600%, 07/15/21
1,000,000 - - 1,000,000 Money Store (The) Home Equity
Trust, Series 1997 C, Class
AF6 SEQ, 6.670%, 02/15/25
297,140 237,712 - 534,852 United Companies
Financial Corp., Home
Equity Loan, Series 1996
D1, Class A5, 6.920%, 10/15/18
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (Combined Cost $14,797,275)
FORWARD COMMITMENTS - 4.6%
5,000,000 300,000 6,000,000 14,000,000 FHLMC, 6.500%, settlement
05/14/01
(Combined Cost $13,899,374)
SOVEREIGN GOVERNMENTS AND AGENCIES - 0.2%
500,000 - - 500,000 Hydro Quebec, 8.050%, 07/07/24
(Combined Cost $539,201)
TEMPORARY CASH INVESTMENTS - 1.3%
1,800,000 1,500,000 300,000 3,600,000 SLMA Discount Notes,
5.130%, 4/02/01(5)
(Combined Cost $3,599,492)
TOTAL INVESTMENT SECURITIES (Combined Cost $299,220,757) - 100.0%
Percentages indicated are based on combined investment
securities of $305,954,518.
Premium Bond ("Fund 1") / Intermediate-Term Bond ("Fund 2") / Bond ("Fund 3")
PROFORMA COMBINED SCHEDULE OF INVESTMENTS
(Unaudited) March 31, 2001
Proforma
Fund 1 Fund 2 Fund 3 Combined
Market Market Market Market
Security Description Value Value Value Value
- --------------------------------------------------------------------------------------------
Bank of America Corp., $ 525,992 $ 262,996 $ 788,988 $ 1,577,976
7.400%, 1/15/11
Citigroup Inc., 7.250%, 1,159,574 527,079 1,581,237 3,267,890
10/01/10
------------- ------------- ------------- -------------
1,685,566 790,075 2,370,225 4,845,866
------------- ------------- ------------- -------------
International Business - - 427,721 427,721
Machines Corp., 7.125%,
12/01/96
------------- ------------- ------------- -------------
Alliant Energy Resources 721,584 360,792 1,546,251 2,628,627
Inc., 7.375%, 11/09/09
Raytheon Company, 796,783 424,951 1,593,565 2,815,299
8.200%, 3/01/06
------------- ------------- ------------- -------------
1,518,367 785,743 3,139,816 5,443,926
------------- ------------- ------------- -------------
Sears, Roebuck & Co. Inc. - 206,024 - 206,024
MTN, 8.290%, 6/10/02
------------- ------------- ------------- -------------
Cardinal Health Inc., 1,142,868 - - 1,142,868
6.750%, 2/15/11
------------- ------------- ------------- -------------
Anixter International Inc., 206,141 309,211 - 515,352
8.000%, 9/15/03
Yorkshire Power Finance, 500,234 300,141 - 800,375
Series B, 6.150%, 2/25/03
------------- ------------- ------------- -------------
706,375 609,352 - 1,315,727
------------- ------------- ------------- -------------
Cilcorp, Inc., 8.700%, 1,077,922 485,064 1,616,883 3,179,869
10/15/09
Dominion Resources Inc., 1,309,775 - - 1,309,775
6.000%, 1/31/03
Dynegy Holdings Inc., 994,661 397,864 1,094,127 2,486,652
6.875%, 4/01/11
Georgia Power Company, - 302,396 - 302,396
Series F, 5.75%, 1/31/2003
Progress Energy Inc., 2,068,653 - - 2,068,653
7.100%, 3/01/11
Wisconsin Energy Corp., 1,394,449 398,414 1,195,242 2,988,105
6.500%, 4/01/11
------------- ------------- ------------- -------------
6,845,460 1,583,738 3,906,252 12,335,450
------------- ------------- ------------- -------------
Duke Energy Field 1,609,833 536,611 1,609,833 3,756,277
Services, 7.875%, 8/16/10
El Paso Corp. MTN, 1,068,548 373,992 1,335,685 2,778,225
8.050%, 10/15/30
------------- ------------- ------------- -------------
2,678,381 910,603 2,945,518 6,534,502
------------- ------------- ------------- -------------
Associates Corp., N.A., 1,007,756 503,877 1,209,308 2,720,941
6.000%, 7/15/05
Ford Motor Credit Co., 1,539,847 410,626 821,252 2,771,725
6.875%, 2/01/06
Ford Motor Credit Co., 1,047,147 314,144 1,570,720 2,932,011
7.500%, 3/15/05
Household Finance Corp., 1,020,411 357,144 1,326,534 2,704,089
6.500%, 1/24/06
------------- ------------- ------------- -------------
4,615,161 1,585,791 4,927,814 11,128,766
------------- ------------- ------------- -------------
Kellogg Co., 7.450%, 1,005,698 201,140 1,005,698 2,212,536
4/01/31 (Acquired 3/26/01,
Combined Cost $2,210,252)(1)
------------- ------------- ------------- -------------
Abitibi-Consolidated Inc., 532,988 266,494 - 799,482
8.550%, 8/01/10
------------- ------------- ------------- -------------
Columbia Energy Group, 512,394 - - 512,394
6.800%, 11/28/05
Columbia Energy Group, - - 2,012,058 2,012,058
7.420%, 11/28/15
------------- ------------- ------------- -------------
KeySpan Corporation, 1,061,506 318,452 1,167,656 2,547,614
7.250%, 11/15/05
------------- ------------- ------------- -------------
1,573,900 318,452 3,179,714 5,072,066
------------- ------------- ------------- -------------
Kroger Co., 7.650%, 04/15/07 797,681 319,073 1,063,575 2,180,329
Safeway Inc., 6.150%, 03/01/06 1,310,149 302,342 1,209,368 2,821,859
------------- ------------- ------------- -------------
2,107,830 621,415 2,272,943 5,002,188
------------- ------------- ------------- -------------
MGM Mirage, 8.500%, 09/15/10 784,020 522,680 2,090,720 3,397,420
09/15/10
------------- ------------- ------------- -------------
Caterpillar Financial Services 758,454 - - 758,454
Corp., 5.900%, 09/10/02
------------- ------------- ------------- -------------
Tyco International Group 1,566,715 505,392 1,263,480 3,335,587
S.A., 6.375%, 2/15/06
------------- ------------- ------------- -------------
KPNQwest B.V., 8.125%, 656,250 253,750 875,000 1,785,000
06/01/09
------------- ------------- ------------- -------------
Delphi Financial Group, - - 768,774 768,774
Inc., 9.310%, 3/25/27
Lincoln National Corp., - - 3,329,727 3,329,727
9.125%, 10/01/04
------------- ------------- ------------- -------------
- - 4,098,501 4,098,501
------------- ------------- ------------- -------------
Comcast Cable Communications, 1,098,139 384,349 1,207,953 2,690,441
8.375%, 05/01/07
CSC Holdings Inc., - - 1,956,190 1,956,190
7.250%, 7/15/08
CSC Holdings Inc., 1,175,863 452,255 - 1,628,118
7.625%, 7/15/18
------------- ------------- ------------- -------------
2,274,002 836,604 3,164,143 6,274,749
------------- ------------- ------------- -------------
General Motors Corp., 361,425 - - 361,425
7.000%, 6/15/03
------------- ------------- ------------- -------------
Anderson Exploration Ltd., 1,248,469 399,510 1,298,408 2,946,387
6.750%, 3/15/11
TransOcean Sedco Forex, 1,000,690 300,207 1,000,690 2,301,587
6.625%, 4/15/11 (Acquired
3/30/01, Combined Cost $2,287,971)(1)(2)
------------- ------------- ------------- -------------
2,249,159 699,717 2,299,098 5,247,974
------------- ------------- ------------- -------------
Burlington Northern Santa 463,991 185,596 556,789 1,206,376
Fe Corp., 6.750%, 3/15/29
Norfolk Southern Corp., 1,016,360 - - 1,016,360
6.950%, 5/01/02
------------- ------------- ------------- -------------
1,480,351 185,596 556,789 2,222,736
------------- ------------- ------------- -------------
EOP Operating LP, 999,245 299,774 999,245 2,298,264
6.750%, 2/15/08
Spieker Properties, Inc. - - 3,048,861 3,048,861
MTN, 7.580%, 12/17/01
------------- ------------- ------------- -------------
999,245 299,774 4,048,106 5,347,125
------------- ------------- ------------- -------------
AXA Financial Inc., 1,100,247 385,086 - 1,485,333
7.750%, 8/01/10
Merrill Lynch & Co., Inc., 2,058,632 617,590 2,058,632 4,734,854
7.250%, 7/26/02
------------- ------------- ------------- -------------
3,158,879 1,002,676 2,058,632 6,220,187
------------- ------------- ------------- -------------
Qwest Capital Funding 1,584,200 528,067 2,112,268 4,224,535
Inc., 7.750%, 8/15/06
(Acquired 8/17/00, Combined Cost
$3,996,120)(1)
------------- ------------- ------------- -------------
AT&T Wireless Services 1,363,554 353,514 1,010,040 2,727,108
Inc., 7.875%, 3/01/11
(Acquired 3/1/01-3/22/01,
Combined Cost $2,710,514)(1)
------------- ------------- ------------- -------------
41,648,848 13,066,597 47,752,478 102,467,923
------------- ------------- ------------- -------------
FHLMC Pool #C00553, 648,116 - - 648,116
7.000%, 9/01/27
FHLMC Pool #C00578, 736,822 221,903 - 958,725
6.500%, 1/01/28
FHLMC Pool #C00731, 874,610 - 2,621,261 3,495,871
6.500%, 3/01/29
FHLMC Pool #C038971, 3,972,609 - - 3,972,609
6.500%, 6/01/29
FHLMC Pool #C30060, 748,676 449,205 1,497,351 2,695,232
7.500%, 8/01/29
FHLMC Pool #C30257, 928,857 - - 928,857
7.000%, 8/01/29
FHLMC Pool #C40679, - - 5,803,330 5,803,330
7.000%, 7/01/30
FHLMC Pool #D75034, 86,405 - - 86,405
8.500%, 10/01/26
FHLMC Pool #E00279, - 335,560 - 335,560
6.500%, 2/01/09
FHLMC Pool #E00724, 825,258 - - 825,258
7.000%, 6/01/14
FHLMC Pool #E68523, 592,146 - - 592,146
6.500%, 12/01/12
FHLMC Pool #E68681, - - 3,102,667 3,102,667
6.000%, 1/01/13
FHLMC Pool #E73566, 450,871 - - 450,871
7.000%, 11/01/13
FHLMC Pool #G00907, - 163,247 - 163,247
7.000%, 2/01/28
FNMA Pool #250452, - - 2,634,796 2,634,796
6.500%, 1/01/26
FNMA Pool #252211, 594,976 254,990 2,549,897 3,399,863
6.000%, 1/01/29
FNMA Pool #252212, 426,001 - - 426,001
6.500%, 1/01/29
FNMA Pool #252213, 1,025,781 - - 1,025,781
6.000%, 1/01/14
FNMA Pool #272894, 706,368 - - 706,368
6.000%, 2/01/09
FNMA Pool #323980, 1,391,999 463,999 - 1,855,998
6.000%, 4/01/14
FNMA Pool #405425, 586,859 - - 586,859
7.000%, 12/01/27
FNMA Pool #406904, 1,125,822 - - 1,125,822
7.500%, 4/01/28
FNMA Pool #411821, - 232,491 - 232,491
7.000%, 1/01/28
FNMA Pool #412562, 1,191,364 - - 1,191,364
6.500%, 1/01/28
FNMA Pool #413812, 493,956 164,652 - 658,608
6.500%, 1/01/28
FNMA Pool #426069, 1,298,917 - - 1,298,917
7.000%, 5/01/28
FNMA Pool #426130, 155,456 - - 155,456
6.000%, 5/01/13
FNMA Pool #426773, 650,533 - - 650,533
6.000%, 7/01/13
FNMA Pool #427913, - 259,757 - 259,757
6.000%, 5/01/13
FNMA Pool #431837, - 288,591 - 288,591
7.000%, 6/01/28
FNMA Pool #437421, 852,980 - - 852,980
6.000%, 9/01/28
FNMA Pool #450619, 251,016 251,016 - 502,032
6.000%, 12/01/28
FNMA Pool #453124, - - 1,353,959 1,353,959
6.000%, 12/01/13
FNMA Pool #453956, 441,510 - - 441,510
6.000%, 12/01/28
FNMA Pool #484698, - - 2,471,014 2,471,014
6.000%, 2/01/14
FNMA Pool #492315, 906,773 453,386 - 1,360,159
6.500%, 4/01/29
FNMA Pool #503915, - - 1,275,681 1,275,681
7.000%, 7/01/29
FNMA Pool #504748, - - 443,638 443,638
7.000%, 7/01/29
FNMA Pool #506995, 822,507 287,878 1,233,761 2,344,146
7.500%, 7/01/29
FNMA Pool #537234, 933,759 466,879 - 1,400,638
7.000%, 5/01/30
FNMA Pool #542599, 2,747,888 1,137,059 2,368,870 6,253,817
7.500%, 8/01/30
GNMA Pool #002202, - 260,697 - 260,697
7.000%, 4/20/26
GNMA Pool #230356, 341,651 - - 341,651
7.500%, 8/20/17
GNMA Pool #313107, 830,937 - - 830,937
7.000%, 11/15/22
GNMA Pool #407141, 13,367 - - 13,367
9.250%, 2/15/25
GNMA Pool #407254, 30,818 - - 30,818
9.250%, 3/15/25
GNMA Pool #408099, 126,549 - - 126,549
8.750%, 3/15/25
GNMA Pool #423061, 557,003 - - 557,003
8.000%, 6/15/27
GNMA Pool #423986, 372,027 - - 372,027
8.000%, 8/15/26
GNMA Pool #432437, 70,575 - - 70,575
7.500%, 4/15/27
GNMA Pool #436277, 409,699 343,365 - 753,064
6.500%, 3/15/28
GNMA Pool #443782, 177,892 - - 177,892
7.500%, 11/15/27
GNMA Pool #447692, 466,748 - - 466,748
7.500%, 5/15/27
GNMA Pool #455126, 27,011 - - 27,011
6.500%, 5/15/28
GNMA Pool #458862, 389,698 139,178 - 528,876
7.500%, 2/15/28
GNMA Pool #458887, 1,750,763 - - 1,750,763
6.500%, 5/15/28
GNMA Pool #461011, 67,307 - - 67,307
7.500%, 11/15/27
GNMA Pool #463891, 423,373 - - 423,373
6.500%, 5/15/28
GNMA Pool #467626, 498,401 213,600 - 712,001
7.000%, 2/15/28
GNMA Pool #469811, 900,403 286,492 - 1,186,895
7.000%, 12/15/28
GNMA Pool #471859, 672,260 - - 672,260
7.000%, 4/15/28
GNMA Pool #509502, - 452,725 - 452,725
8.000%, 12/15/29
GNMA Pool #780412, 401,297 200,648 - 601,945
7.500%, 8/15/26
------------- ------------- ------------- -------------
34,996,614 7,327,318 27,356,225 69,680,157
------------- ------------- ------------- -------------
STRIPS - PRINCIPAL, 1,904,050 448,655 1,187,296 3,540,001
5.970%, 11/15/27(4)
U.S. Treasury Bonds, - 653,758 2,212,720 2,866,478
5.00%, 2/15/2011
U.S. Treasury Bonds, 1,652,714 605,995 3,856,332 6,115,041
6.375%, 8/16/27
U.S. Treasury Bonds, - 335,132 - 335,132
6.500%, 11/15/26
U.S. Treasury Bonds, 3,225,000 322,500 - 3,547,500
8.000%, 11/15/21
U.S. Treasury Bonds, - 835,782 - 835,782
9.125%, 5/15/18
U.S. Treasury Inflation 4,091,740 511,468 1,432,109 6,035,317
Indexed Bonds, 3.500%, 01/15/11
U.S. Treasury Notes, - 1,007,266 - 1,007,266
4.625%, 2/28/03
U.S. Treasury Notes, 1,725,099 - - 1,725,099
5.125%, 12/31/02
U.S. Treasury Notes, - 1,021,869 - 1,021,869
5.500%, 1/31/03
U.S. Treasury Notes, 1,037,457 - - 1,037,457
5.500%, 2/15/08
U.S. Treasury Notes, - - 1,502,345 1,502,345
5.625%, 5/15/01
U.S. Treasury Notes, 6,083,660 2,045,368 11,118,413 19,247,441
5.750%, 11/15/05
U.S. Treasury Notes, - 383,760 1,480,216 1,863,976
6.625%, 5/15/07
U.S. Treasury Notes, 5,946,765 1,838,091 2,162,460 9,947,316
6.750%, 5/15/05
U.S. Treasury Notes, - 333,035 - 333,035
7.875%, 11/15/04
------------- ------------- ------------- -------------
25,666,485 10,342,679 24,951,891 60,961,055
------------- ------------- ------------- -------------
AmeriCredit Automobile 829,975 - - 829,975
Receivables Trust, Series
1999 D, Class A3 SEQ,
7.020%, 12/05/05
BMW Vehicle Owner Trust, 1,007,800 - 1,511,700 2,519,500
Series 1999 A, Class A3
SEQ, 6.410%, 4/25/03
Case Equipment Loan 1,001,647 - - 1,001,647
Trust, Series 1998 B, Class
A4 SEQ, 5.920%, 10/15/05
CIT RV Trust, Series 1997 1,024,874 - - 1,024,874
A, Class A6 SEQ, 6.350%,
04/15/11
CIT RV Trust, Series 1998 768,541 - - 768,541
A, Class A4 SEQ, 6.090%,
02/15/12
Countrywide Asset-Backed 1,314,429 303,330 - 1,617,759
Certificates, Series 2001-1,
Class AF3, 6.100%, 8/25/26
Delta Air Lines Inc., Series 1,062,945 372,031 1,062,945 2,497,921
2000-1, Class A1, 7.380%,
05/18/10
Detroit Edison - 301,885 1,006,282 1,308,167
Securitization Funding LLC,
Series 2001-1, Class A4
SEQ, 6.190%, 3/01/13
Nationslink Funding Corp., 643,527 300,312 1,716,071 2,659,910
Series 1998-2, Class A1
SEQ, 6.000%, 11/20/07
Nationslink Funding Corp., 1,263,288 - - 1,263,288
Series 1999-1, Class A2
SEQ, 6.320%, 11/20/08
PSE&G Transition Funding 1,281,895 256,379 1,025,516 2,563,790
LLC, Series 2001-1, Class
A5 SEQ, 6.450%, 3/15/13
Residential Asset Securities 2,030,207 507,552 2,030,208 4,567,967
Corp., Series 1999 KS3,
Cl AI2, 7.080%, 09/25/20
------------- ------------- ------------- -------------
12,229,128 2,041,489 8,352,722 22,623,339
------------- ------------- ------------- -------------
FHLMC, 5.250%, 2/15/04 2,025,360 - - 2,025,360
FHLMC, 5.750%, 4/15/08 1,014,584 - - 1,014,584
FNMA MTN, 5.740%, 01/21/09 992,029 - - 992,029
FNMA MTN, 7.000%, 02/20/07 510,848 - - 510,848
FNMA, 5.250%, 1/15/09 1,076,106 - - 1,076,106
FNMA, 6.625%, 11/15/10 2,129,670 212,967 212,967 2,555,604
FNMA, 7.125%, 2/15/05 3,207,807 2,138,538 - 5,346,345
FNMA, Series B, 7.250%, 3,039,410 331,573 - 3,370,983
01/15/10
------------- ------------- ------------- -------------
13,995,814 2,683,078 212,967 16,891,859
------------- ------------- ------------- -------------
Chase Commercial 1,321,969 423,030 1,586,363 3,331,362
Mortgage Securities Corp.,
Series 1999 2, Class A2
SEQ, 7.200%, 11/15/09
First Union-Lehman 857,718 428,859 - 1,286,577
Brothers Commercial Mortgage,
Series 1998 C2, Class A1 SEQ,
6.280%, 06/18/07
First Union-Lehman 1,026,151 359,153 1,539,226 2,924,530
Brothers-Bank of America,
Series 1998 C2, Class A2
SEQ, 6.560%, 11/18/08
FNMA REMIC, Series 1989-35, - - 338,753 338,753
Class G, 9.500%, 07/25/19
FNMA REMIC, Series 1,013,975 506,988 - 1,520,963
1997-58, Class PB PAC,
6.500%, 6/18/24
GMAC Commercial 999,051 599,430 2,397,723 3,996,204
Mortgage Securities Inc.,
Series 1999 C1, Class A2
SEQ, 6.180%, 5/15/33
Money Store (The) Home Equity 261,440 - - 261,440
Trust, Series 1994 B, Class
A4 SEQ, 7.600%, 07/15/21
Money Store (The) Home Equity 1,022,083 - - 1,022,083
Trust, Series 1997 C, Class
AF6 SEQ, 6.670%, 02/15/25
United Companies 299,533 239,627 - 539,160
Financial Corp., Home
Equity Loan, Series 1996
D1, Class A5, 6.920%, 10/15/18
------------- ------------- ------------- -------------
6,801,920 2,557,087 5,862,065 15,221,072
------------- ------------- ------------- -------------
FHLMC, 6.500%, settlement 4,976,560 2,985,937 5,971,873 13,934,370
05/14/01
------------- ------------- ------------- -------------
Hydro Quebec, 8.050%, 07/07/24 574,763 - - 574,763
------------- ------------- ------------- -------------
SLMA Discount Notes, 1,800,000 1,500,000 300,000 3,600,000
5.130%, 4/02/01(5)
------------- ------------- ------------- -------------
$142,690,132 $ 42,504,185 $120,760,221 $305,954,538
============= ============= ============= =============
FHLMC = Federal Home Loan Mortgage Corporation
FNMA = Federal National Mortgage Association
GNMA = Government National Mortgage Association
MTN = Medium Term Note
REMIC = Real Estate Mortgage Investment Conduit
SEQ = Sequential Payer
SLMA = Student Loan Marketing Association
STRIPS = Separate Trading of Registered Interest &
Principal of Securities
(1) Security was purchased under Rule 144A of the
Securities Act of 1933 or is a private
placement and, unless registered under the Act or
exempted from registration, may only be sold to qualified
institutional investors. The aggregate value of
restricted securities at March 31, 2001, was $11,465,764,
which represented 3.7% of combined net assets.
(2) Security, or a portion thereof, has been segregated
at the custodian bank for Forward Commitments.
(3) Final maturity indicated. Expected remaining maturity
used for purposes of calculating the weighted
average portfolio maturity.
(4) Security is a zero-coupon bond. The yield to maturity
at purchase is indicated. Zero coupon securities are purchased
at a substantial discount from their value at maturity.
(5) Rate indicated is the yield to maturity at purchase.
See notes to financial statements.
Premium Bond
Intermediate-Term Bond
Bond
Pro Forma Combining Statement of Assets and Liabilities
MARCH 31, 2001 (UNAUDITED)
Pro Forma
Premium Intermediate- Combining
Bond Term Bond Bond Adjustments (Note 1)
- --------------------------------------------------------------------------------------------------------------
ASSETS
Investment securities, at value
(identified cost of $139,640,824,
$41,455,164, $118,124,769 and
$299,220,757 respectively) $142,690,132 $42,504,185 $120,760,221 $305,954,538
Cash - 331,944 - 331,944
Receivable for investments sold 4,973,828 3,402,825 7,642,706 16,019,359
Receivable for capital
shares sold - 14,560 3,423 17,983
Interest receivable 1,533,549 491,130 1,529,878 3,554,557
------------- ------------ ------------- -------------- -------------
149,197,509 46,744,644 129,936,228 0 325,878,381
------------- ------------ ------------- -------------- -------------
LIABILITIES
Disbursements in excess of
demand deposit cash 2,622,918 - 652,919 3,275,837
Payable for investments purchased 5,970,569 3,283,909 6,965,729 16,220,207
Accrued management fees 53,084 25,800 80,524 (717) (a) 158,691
Distribution fees payable - 715 931 1,646
Service fees payable - 715 931 1,646
Dividends payable 53,266 6,641 18,273 717 (a) 78,897
Payable for directors'
fees and expenses 107 38 100 0 245
Accrued expenses and
other liabilities 73 22 62 157
------------- ------------ ------------- -------------- -------------
8,700,017 3,317,840 7,719,469 0 19,737,326
------------- ------------ ------------- -------------- -------------
Net Assets $140,497,492 $43,426,804 $122,216,759 $0 $306,141,055
============= ============ ============= ============== =============
NET ASSETS CONSIST OF:
Capital (par value and
paid-in surplus) $138,806,438 $43,198,099 $123,729,663 305,734,200
Accumulated net realized
loss on investment transactions (1,358,254) (820,316) (4,148,356) (6,326,926)
Net unrealized appreciation
on investments (Note 3) 3,049,308 1,049,021 2,635,452 6,733,781
------------- ------------ ------------- -------------- -------------
$140,497,492 $43,426,804 $122,216,759 $0 $306,141,055
============= ============ ============= ============== =============
Investor Class
Net assets $140,497,492 $39,823,009 $117,627,887 ($140,497,492) $157,450,896
Shares outstanding 13,886,669 3,970,883 12,509,875 (14,812,014)(b) 15,555,413
Net asset value per share $10.12 $10.03 $9.40 $10.12
Advisor Class
Net assets N/A $3,603,795 $4,588,872 $8,192,667
Shares outstanding N/A 359,346 488,032 (37,918) (b) 809,460
Net asset value per share N/A $10.03 $9.40 $10.12
Institutional Class
Net assets N/A N/A N/A $140,497,492 $140,497,492
Shares outstanding N/A N/A N/A 13,886,669 (b) 13,886,669
Net asset value per share N/A N/A N/A $10.12 $10.12
(a) Adjustment to restate the management fee accrual because of a
step fee schedule.
(b) Adjustment to reflect the issuance of Premium Bond shares in
exchange for shares of Intermediate-Term Bond and Bond, specific
to each class. The Premium Bond Investor Class shares were exchanged
for Institutional shares.
Pro Forma Combining Statement of Operations
YEAR ENDED MARCH 31, 2001 (UNAUDITED)
Pro Forma
Premium Intermediate- Combining
Bond Term Bond Bond Adjustments (Note 1)
- --------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
Income:
Interest $7,599,685 $2,349,189 $7,984,422 $17,933,296
------------- ------------ ------------- -------------- -------------
Expenses:
Management fees 504,776 250,435 899,643 (232,282) (a) 1,422,572
Distribution fees - Advisor Class - 7,779 10,352 18,131
Service fees - Advisor Class - 7,779 10,352 18,131
Directors' fees and expenses 696 272 800 - 1,768
------------- ------------ ------------- -------------- -------------
505,472 266,265 921,147 (232,282) 1,460,602
------------- ------------ ------------- -------------- -------------
Net investment income 7,094,213 2,082,924 7,063,275 232,282 16,472,694
------------- ------------ ------------- -------------- -------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (NOTE 3)
Net realized gain (loss) on
investment transactions 227,059 (181,299) (1,012,170) (966,410)
Change in net unrealized
appreciation on investments 5,580,256 1,216,129 3,701,662 10,498,047
------------- ------------ ------------- -------------- -------------
Net realized and unrealized
gain on investments 5,807,315 1,034,830 2,689,492 - 9,531,637
------------- ------------ ------------- -------------- -------------
Net Increase in Net Assets
Resulting from Operations $12,901,528 $3,117,754 $9,752,767 $232,282 $26,004,331
(a) Adjustment to restate the management fee savings
because of a stepped fee schedule.
Notes to Pro Forma Financial Statements (unaudited)
1. BASIS OF COMBINATION--The unaudited Pro Forma Combining Schedule of
Investments, Pro Forma Combining Statement of Assets and Liabilities and Pro
Forma Combining Statement of Operations reflect the accounts of
Intermediate-Term Bond, Bond and Premium Bond at and for the year ended
March 31, 2001.
The pro forma statements give effect to the proposed transfer of the assets
and stated liabilities of the non-surviving funds, Intermediate-Term Bond and
Bond, in exchange for shares of the surviving fund, for purposes of
maintaining the financial statements and performance, Premium Bond. The
merged fund will be reorganized as a fund issued by American Century
Investment Trust in the name of the Diversified Bond Fund.
In accordance with generally accepted accounting principles, the historical
cost of investment securities will be carried forward to the surviving fund
and the results of operations for pre-combination periods for the surviving
fund will not be restated. The pro forma statements do not reflect the
expenses of either fund in carrying out its obligation under the Agreement
and Plan of Reorganization. Under the terms of the Plan of Reorganization,
the combination of the funds will be treated as a tax-free business
combination and accordingly will be accounted for by a method of accounting
for tax-free mergers of investment companies (sometimes referred to as the
pooling without restatement method).
The Pro Forma Combining Schedule of Investments, Statement of Assets and
Liabilities and Statement of Operations should be read in conjunction with
the historical financial statements of the funds included or incorporated by
reference in the Statement of Additional Information.
2. PORTFOLIO VALUATION--Securities are valued through valuations obtained from
a commercial pricing service or at the mean of the most recent bid and asked
prices. When valuations are not readily available, securities are valued at
fair value as determined in accordance with procedures adopted by the Board
of Trustees.
3. CAPITAL SHARES--The pro forma net asset value per share assumes the issuance
of shares of the surviving financial fund that would have been issued at
March 31, 2001, in connection with the proposed reorganization. The number
of shares assumed to be issued is equal to the net asset value of shares of
the non-surviving financial fund, as of March 31, 2001, divided by the net
asset value per share of the shares of the surviving financial fund as of
March 31, 2001. The pro forma total number of shares outstanding for the
combined fund consists of the following at March 31, 2001:
Additional Shares
Combined Total Outstanding Shares of Assumed Issued
Fund Shares Surviving Fund in Reorganization
Diversified Bond
Investor 15,555,413 0 15,555,413
Advisor 809,460 0 809,460
Institutional 13,886,668 13,886,668(1) 0
Total Fund 30,251,541
(1) Premium Bond Investor Class shares were exchanged for Institutional
Class shares.
4. INVESTMENTS--At March 31, 2001, the funds had the following net capital loss
carryforwards available to offset future capital gains. To the extent that
those carryforward losses are used to offset capital gains, it is probable
that any gains so offset will not be distributed.
Fund Net Capital Loss Carryforward
Premium Bond $1,321,497
Intermediate-Term Bond $ 820,693
Bond $4,136,247
AMERICAN CENTURY INVESTMENT TRUST
PART C OTHER INFORMATION
Item 15. Indemnification.
As stated in Article VII, Section 3 of the Declaration of Trust,
incorporated herein by reference to Exhibit 1 to the Registration
Statement, "The Trustees shall be entitled and empowered to the
fullest extent permitted by law to purchase insurance for and to
provide by resolution or in the Bylaws for indemnification out of
Trust assets for liability and for all expenses reasonably incurred or
paid or expected to be paid by a Trustee or officer in connection with
any claim, action, suit, or proceeding in which he or she becomes
involved by virtue of his or her capacity or former capacity with the
Trust. The provisions, including any exceptions and limitations
concerning indemnification, may be set forth in detail in the Bylaws
or in a resolution adopted by the Board of Trustees."
Registrant hereby incorporates by reference, as though set forth fully
herein, Article II, Section 16 of the Registrant's Amended and
Restated Bylaws, dated March 9, 1998, appearing as Exhibit b2 to
Post-Effective Amendment No. 23 to the Registration Statement of
American Century Municipal Trust on March 26, 1998, File No. 2-91229.
The Registrant has purchased an insurance policy insuring its officers
and directors against certain liabilities which such officers and
directors may incur while acting in such capacities and providing
reimbursement to the Registrant for sums which it may be permitted or
required to pay to its officers and directors by way of
indemnification against such liabilities, subject in either case to
clauses respecting deductibility and participation.
Item 16. Exhibits (all exhibits not filed herewith are being incorporated
herein by reference).
(1) (a) Amended and Restated Declaration of Trust, restated March 1, 1998
and amended March 1, 1999 (filed electronically as Exhibit a to
Post-Effective Amendment No. 7 to the Registration Statement on April
1, 1999, File No. 33-65170).
(b) Amendment No. 1 to the Declaration of Trust dated March 6, 2001
(filed electronically as Exhibit a2 to Post-Effective Amendment No. 12
to the Registration Statement on April 19, 2001, File No. 33-65170).
(c) Amendment No. 2 to the Declaration of Trust (to be filed by
amendment).
(2) Amended and Restated Bylaws dated March 9, 1998 (filed electronically
as Exhibit b2 to Post-Effective Amendment No. 23 to the Registration
Statement of American Century Municipal Trust on March 26, 1998, File
No. 2-91229).
(3) Not applicable.
(4) Agreement and Plan of Reorganization is included herein.
(5) Not applicable.
(6) (a) Investor Class Management Agreement between American Century
Investment Trust and American Century Investment Management, Inc.,
dated August 1, 1997 (filed electronically as Exhibit 5 to
Post-Effective Amendment No. 33 to the Registration Statement of
American Century Government Income Trust on July 31, 1997, File No.
2-99222).
(b) Amendment to the Investor Class Management Agreement between
American Century Investment Trust and American Century Investment
Management, Inc., dated March 31, 1998 (filed electronically as
Exhibit 5b to Post-Effective Amendment No. 23 to the Registration
Statement of American Century Municipal Trust on March 26, 1998, File
No. 2-91229).
(c) Amendment to the Investor Class Management Agreement between
American Century Investment Trust and American Century Investment
Management, Inc., dated July 1, 1998 (filed electronically as Exhibit
d3 to Post-Effective Amendment No. 39 to the Registration Statement of
American Century Government Income Trust on July 28, 1999, File No.
2-99222).
(d) Amendment No. 1 to the Investor Class Management Agreement between
American Century Investment Trust and American Century Investment
Management, Inc., dated September 16, 2000 (filed electronically as
Exhibit d4 to Post-Effective Amendment No. 30 to the Registration
Statement of American Century California Tax-Free and Municipal Funds
on December 29, 2000, File No. 2-82734).
(e) Amendment No. 2 to the Investor Class Management Agreement between
American Century Investment Trust and American Century Investment
Management, Inc. (to be filed by amendment).
(f) Advisor Class Management Agreement between American Century
Investment Trust and American Century Investment Management, Inc.,
dated August 1, 1997 and amended as of June 1, 1998 (filed
electronically as Exhibit d3 to Post-Effective Amendment No. 9 to the
Registration Statement of the Registrant on June 30, 1999, File No.
33-65170).
(g) Amendment No. 1 to the Advisor Class Management Agreement between
American Century Investment Trust and American Century Investment
Management, Inc. (filed electronically as Exhibit d6 to Post-Effective
Amendment No. 36 to the Registration Statement of American Century
Target Maturities Trust on April 18, 2001, File No. 2-94608).
(h) Amendment No. 2 to the Advisor Class Management Agreement between
American Century Investment Trust and American Century Investment
Management, Inc. dated August 1, 2001 (to be filed by amendment).
(i) C Class Management Agreement between American Century Target
Maturities Trust, American Century California Tax-Free and Municipal
Funds, American Century Government Income Trust, American Century
Investment Trust, American Century Quantitative Equity Funds, American
Century Municipal Trust and American Century Investment Management
Inc., dated September 16, 2000 (filed electronically as Exhibit d6 to
Post-Effective Amendment No. 35 to the Registration Statement of
American Century Target Maturities Trust on April 17, 2001, File No.
2-94608).
(j) Amendment No. 1 to the C Class Management Agreement between
American Century Target Maturities Trust, American Century California
Tax-Free and Municipal Funds, American Century Government Income
Trust, American Century Investment Trust, American Century
Quantitative Equity Funds, American Century Municipal Trust and
American Century Investment Management, Inc. dated August 1, 2001 (to
be filed by amendment).
(k) Institutional Class Management Agreement between American Century
Quantitative Equity Funds and American Century Investment Management,
Inc., dated August 1, 1997 (filed electronically as an exhibit to
Post-Effective Amendment No. 20 to the Registration Statement of
American Century Quantitative Equity Funds on August 29, 1997, File
No. 33-19589).
(l) Amendment to Institutional Class Management Agreement between
American Century Quantitative Equity Funds and American Century
Investment Management, Inc., dated July 1, 1998 (filed electronically
as Exhibit d6 to Post-Effective Amendment No. 27 to the Registration
Statement of American Century Quantitative Equity Funds on April 27,
2000, File No. 33-19589).
(m) Amendment No. 1 to the Institutional Class Management Agreement
between American Century Quantitative Equity Funds, American Century
Investment Trust and American Century Investment Management, Inc.
dated August 1, 2001 (to be filed by amendment).
(7) (a) Distribution Agreement between American Century Investment Trust
and American Century Investment Services, Inc., dated March 13, 2000
(filed electronically as Exhibit e7 to Post-Effective Amendment No. 17
to the Registration Statement of American Century World Mutual Funds,
Inc. on March 30, 2000, File No. 33-39242).
(b) Amendment No. 1 to the Distribution Agreement between American
Century Investment Trust and American Century Investment Services,
Inc., dated June 1, 2000 (filed electronically as Exhibit e9 to
Post-Effective Amendment No. 19 to the Registration Statement of
American Century World Mutual Funds, Inc., on May 24, 2000, File No.
33-39242).
(c) Amendment No. 2 to the Distribution Agreement between American
Century Investment Trust and American Century Investment Services,
Inc., dated November 20, 2000 (filed electronically as Exhibit e10 to
Post-Effective Amendment No. 29 to the Registration Statement of
American Century Variable Portfolios, Inc. on December 1, 2000, File
No. 33-14567).
(d) Amendment No. 3 to the Distribution Agreement between American
Century Investment Trust and American Century Investment Services,
Inc., dated March 1, 2001 (filed electronically as Exhibit e4 to
Post-Effective Amendment No. 35 to the Registration Statement of
American Century Target Maturities Trust on April 17, 2001, File No.
2-94608).
(e) Amendment No. 4 to the Distribution Agreement between American
Century Investment Trust and American Century Investment Services,
Inc., dated April 30, 2001 (filed electronically as Exhibit e5 to
Post-Effective Amendment No. 35 to the Registration Statement of
American Century Target Maturities Trust on April 17, 2001, File No.
2-94608).
(f) Amendment No. 5 to the Distribution Agreement between American
Century Investment Trust and American Century Investment Services,
Inc. (to be filed by amendment).
(g) Amendment No. 6 to the Distribution Agreement between American
Century Investment Trust and American Century Investment Services,
Inc. (to be filed by amendment).
(8) Not applicable.
(9) (a) Master Agreement by and between Commerce Bank N.A. and Twentieth
Century Services, Inc., dated January 22, 1997 (filed electronically
as Exhibit B8e to Post-Effective Amendment No. 76 to the Registration
Statement of American Century Mutual Funds, Inc., on February 28,
1997, File No. 2-14213).
(b) Global Custody Agreement between American Century Investments and
The Chase Manhattan Bank, dated August 9, 1996 (filed electronically
as Exhibit B8 to Post-Effective Amendment No. 31 to the Registration
Statement of the American Century Government Income Trust on February
7, 1997, File No. 2-99222).
(c) Amendment to Global Custody Agreement between American Century
Investments and The Chase Manhattan Bank, dated December 9, 2000
(filed electronically as Exhibit g2 to Pre-Effective Amendment No. 2
to the Registration Statement of American Century Variable Portfolios
II, Inc., on January 9, 2001, File No. 333-46922).
(10) (a) Master Distribution and Shareholder Services Plan of American
Century Government Income Trust, American Century Investment Trust,
American Century International Bond Fund, American Century Target
Maturities Trust and American Century Quantitative Equity Funds
(Advisor Class) dated August 1, 1997, (filed electronically as Exhibit
m1 to Post-Effective Amendment No. 32 to the Registration Statement of
American Century Target Maturities Trust, filed on January 31, 2000,
File No. 2-94608).
(b) Amendment to Master Distribution and Shareholder Services
Plan of American Century Government Income Trust, American Century
Investment Trust, American Century International Bond Fund, American
Century Target Maturities Trust and American Century Quantitative
Equity Funds (Advisor Class) dated June 29, 1998 (filed electronically
as Exhibit m2 to Post-Effective Amendment No. 32 to the Registration
Statement of American Century Target Maturities Trust, filed on
January 31, 2000, File No. 2-94608).
(c) Amendment No. 2 to Master Distribution and Shareholder Services
Plan of American Century Government Income Trust, American Century
Investment Trust, American Century International Bond Fund, American
Century Target Maturities Trust and American Century Quantitative
Equity Funds (Advisor Class) (to be filed by amendment).
(d) Master Distribution and Individual Shareholder Services Plan of
American Century Government Income Trust, American Century Investment
Trust, American Century California Tax-Free and Municipal Funds,
American Century Municipal Trust, American Century Target Maturities
Trust and American Century Quantitative Equity Funds (C Class) dated
September 16, 2000 (filed electronically as Exhibit m3 to
Post-Effective Amendment No. 35 to the Registration Statement of
American Century Target Maturities Trust on April 17, 2001, File No.
2-94608).
(e) Amendment No. 1 to Master Distribution and Individual Shareholder
Services Plan of American Century Government Income Trust, American
Century Investment Trust, American Century California Tax-Free and
Municipal Funds, American Century Municipal Trust, American Century
Target Maturities Trust and American Century Quantitative Equity Funds
(C Class) dated August 1, 2001 (to be filed by amendment).
(f) Amended and Restated Multiple Class Plan of American Century
California Tax-Free and Municipal Funds, American Century Government
Income Trust, American Century International Bond Funds, American
Century Investment Trust, American Century Municipal Trust, American
Century Target Maturities Trust and American Century Quantitative
Equity Funds, dated November 20, 2000 (filed electronically as Exhibit
n to Post-Effective Amendment No. 35 to the Registration Statement of
American Century Target Maturities Trust on April 17, 2001, File No.
2-94608).
(g) Amendment No. 1 to the Amended and Restated Multiple Class Plan of
American Century California Tax-Free and Municipal Funds, American
Century Government Income Trust, American Century International Bond
Funds, American Century Investment Trust, American Century Municipal
Trust, American Century Target Maturities Trust and American Century
Quantitative Equity Funds dated August 1, 2001 (to be filed by
amendment).
(11) Opinion and Consent of Counsel as to the legality of the securities
being registered (filed electronically as Exhibit i to Post-Effective
Amendment No. 7 to the Registration Statement of the Registrant on May
7, 1999, File No. 33-65170).
(12) Opinion and Consent of Counsel as to the tax matters and consequences
to shareholders is included herein.
(13) (a) Transfer Agency Agreement between American Century Investment
Trust and American Century Services Corporation, dated August 1, 1997
(filed electronically as Exhibit 9 to Post-Effective Amendment No. 33
to the Registration Statement of American Century Government Income
Trust on July 31, 1997, File No. 2-99222).
(b) Amendment to the Transfer Agency Agreement between American
Century Investment Trust and American Century Services Corporation,
dated March 9, 1998 (filed electronically as Exhibit B9b to
Post-Effective Amendment No. 23 to the Registration Statement of
American Century Municipal Trust on March 26, 1998, File No. 2-91229).
(c) Amendment No. 1 to the Transfer Agency Agreement between American
Century Investment Trust and American Century Services Corporation,
dated June 29, 1998 (filed electronically as Exhibit B9b to
Post-Effective Amendment No. 23 to the Registration Statement of
American Century Quantitative Equity Funds on June 29, 1998, File No.
33-19589).
(d) Amendment No. 2 to the Transfer Agency Agreement between American
Century Investment Trust and American Century Services Corporation,
dated November 20, 2000 (filed electronically as Exhibit h4 to
Post-Effective Amendment No. 30 to the Registration Statement of
American Century California Tax-Free and Municipal Funds on December
29, 2000, File No. 2-82734).
(e) Amendment No. 3 to the Transfer Agency Agreement between American
Century Investment Trust and American Century Services Corporation
dated August 1, 2001 (to be filed by amendment).
(f) Credit Agreement between American Century Funds and The Chase
Manhattan Bank, as Administrative Agent, dated as of December 19, 2000
(filed electronically as Exhibit h5 to Post-Effective Amendment No. 33
to the Registration Statement of American Century Target Maturities
Trust on January 31, 2001, File No. 2-94608).
(14) (a) Consent of PricewaterhouseCoopers LLP (to be filed by amendment).
(b) Consent of KPMG Peat Marwick, LLP, independent auditors (filed
electronically as Exhibit b11 to Post-Effective Amendment No. 5 to the
Registration Statement of the Registrant on June 27, 1997, File No.
33-65170).
(15) Not applicable.
(16) Power of Attorney, dated September 16, 2000 (filed electronically
as Exhibit j3 to Post-Effective Amendment No. 11 to the Registration
Statement of the Registrant on February 22, 2001, File No. 33-65170).
(17) (a) Form of proxy is filed herein.
(b) Diversified Bond (Investor, Advisor and Institutional
Class)Prospectuses dated August 8, 2001 (filed electronically as part
of Post-Effective Amendment No. 12 to the Registration Statement of
the Registrant on May 25, 2001, File No. 33-65170).
(c) Statement of Additional Information dated August 8, 2001 (filed
electronically as part of Post-Effective Amendment No. 12 to the
Registration Statement of the Registrant on May 25, 2001, File No.
33-65170).
(d) Premium Bond Prospectus dated August 1, 2001 (filed electronically
as part of Post-Effective Amendment No. 12 to the Registration
Statement of American Century Premium Reserves, Inc. on July 31, 2001,
File No. 33-57430).
(e) Statement of Additional Information dated August 1, 2001 (filed
electronically as part of Post-Effective Amendment No. 12 to the
Registration Statement of American Century Premium Reserves, Inc. on
July 31, 2001, File No. 33-57430).
(f) Premium Bond Annual Report (filed electronically on May 31, 2001).
(g) Intermediate-Term Bond and Bond (Investor and Advisor Class)
Prospectuses dated March 1, 2001 (filed electronically as part of
Post-Effective Amendment No. 92 to the Registration Statement of
American Century Mutual Funds, Inc. on February 28, 2001, File No.
2-14213).
(h) Statement of Additional Information dated May 1, 2001 (filed
electronically as part of Post-Effective Amendment No. 93 to the
Registration Statement of American Century Mutual Funds, Inc. on April
20, 2001, File No. 2-14213).
(i) Intermediate-Term Bond and Bond Annual Report (filed
electronically on December 29, 2000).
Item 17. Undertakings.
Not applicable.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Kansas City, State of Missouri on the
29th day of June, 2001.
AMERICAN CENTURY INVESTMENT TRUST (Registrant)
By: /*/William M. Lyons
William M. Lyons
President and Principal Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
has been signed below by the following persons in the capacities and on the
dates indicated.
*William M. Lyons President and June 29, 2001
- --------------------------------- Principal Executive
William M. Lyons Officer
*Maryanne Roepke Senior Vice President, June 29, 2001
- --------------------------------- Treasurer and Chief
Maryanne Roepke Accounting Officer
*James E. Stowers III Director and June 29, 2001
- --------------------------------- Chairman of the Board
James E. Stowers III
*Albert A. Eisenstat Director June 29, 2001
- ---------------------------------
Albert A. Eisenstat
*Ronald J. Gilson Director June 29, 2001
- ---------------------------------
Ronald J. Gilson
*Myron S. Scholes Director June 29, 2001
- ---------------------------------
Myron S. Scholes
*Kenneth E. Scott Director June 29, 2001
- ---------------------------------
Kenneth E. Scott
*Jeanne D. Wohlers Director June 29, 2001
- ---------------------------------
Jeanne D. Wohlers
/s/Janet A. Nash
*by Janet A. Nash, Attorney in Fact (pursuant to a Power of Attorney dated
September 16, 2000).
