TWENTIETH CENTURY INVESTORS, INC.
SUPPLEMENT TO EQUITY FUNDS PROSPECTUS
Supplement dated January 2, 1996
Prospectus dated March 1, 1995
- --------------------------------------------------------------------------------
The disclosure set forth below replaces the first paragraph on page 2 of
the Equity Funds Prospectus:
SELECT INVESTORS AND HERITAGE INVESTORS seek capital growth. The funds
intend to pursue their investment objectives by investing primarily in common
stocks of companies that are considered by management to have
better-than-average prospects for appreciation. As a matter of fundamental
policy, 80% of the assets of Select Investors and of Heritage Investors must be
invested in securities of companies that have a record of paying dividends or
have committed themselves to the payment of regular dividends, or otherwise
produce income.
The following paragraph replaces the first paragraph under the heading
"Select Investors, Heritage Investors" on page 8 of the Equity Funds Prospectus:
Securities of companies chosen for Select Investors and Heritage Investors
are chosen primarily for their growth potential. Additionally, as a matter of
fundamental policy, 80% of the assets of Select Investors and of Heritage
Investors must be invested in securities of companies that have a record of
paying dividends or have committed themselves to the payment of regular
dividends or otherwise produce income. The remaining 20% of fund assets may be
invested in any otherwise permissible securities that the manager believes will
contribute to the funds' stated investment objectives. The income payments of
equity securities chosen are only a secondary consideration; therefore, the
income return that Select and Heritage provide may not be significant.
Otherwise, Select and Heritage follow the same investment techniques described
below for Growth, Ultra and Vista.
The following paragraph replaces the third paragraph under the heading
"Select Investors, Heritage Investors" on page 8 of the Equity Funds Prospectus:
Because of its size, and because it invests primarily in securities that
pay dividends or are committed to the payment of dividends, Select may be
expected to be the least volatile of the common stock funds described in this
prospectus.
The following paragraph replaces the second paragraph under the heading
"Giftrust Investors" on page 9 of the Equity Funds Prospectus:
A Giftrust is a unique way to give a gift to a child or any individual. You
cannot establish or make investments in a Giftrust for yourself or your spouse,
nor can a Giftrust be established that designates anyone other than an
individual (such as a corporation, partnership or other profit or nonprofit
organization) as a beneficiary. To open a Giftrust account, call or write for a
Giftrust information kit. The minimum initial investment in Giftrust is $500.
The following paragraph is added immediately after the fourth paragraph
under the heading "Giftrust Investors" on page 9 of the Equity Funds Prospectus:
A $10 fee will be charged against each Giftrust account for which a tax
return is filed. (See "A Tax Note About Giftrust," page 28.) Additionally, a
$100 administrative fee will be charged against each maturing Giftrust account
to help cover the costs incurred as a result of the Giftrust reaching maturity.
<PAGE>
The following paragraph is added immediately after the first paragraph
under the heading "Twentieth Century Family of Funds" on page 15 of the Equity
Funds Prospectus:
The Twentieth Century family of mutual funds now also includes the 35 funds
offered by The Benham Group as a result of the acquisition of Benham Management
Corporation ("BMC"), investment manager of The Benham Group, by Twentieth
Century Companies, Inc. The Benham Group offers several funds with investment
objectives similar to the Twentieth Century funds, but with different fee
structures. You may also wish to consider the funds of The Benham Group for your
investment needs. For a prospectus and more information about those funds,
please call 1-800-331-8331.
The disclosure set forth below replaces the first two paragraphs under the
heading "Reports to Shareholders" found on page 24 of the Equity Funds
Prospectus:
At the end of each quarter, Twentieth Century will send you a consolidated
statement that summarizes all of your Twentieth Century holdings. At the same
time, you will also receive an individual statement for each Twentieth Century
fund you own with complete year-to-date information on activity in your account.
You may at any time also request a statement of your account activity be sent to
you.
With the exception of the automatic transactions noted below, each time you
invest, redeem, transfer or convert shares, Twentieth Century will send you a
confirmation of the transaction. Effective October 1, 1995, automatic monthly
investment purchases and 403(b) purchases (other than transfers), and effective
November 1, 1995, conversions made in a Convert-A-Month program, purchases made
by direct deposit and transfers made in a Transfer-A-Month program, will no
longer be confirmed immediately, but rather will be confirmed on your next
consolidated quarterly statement. Please carefully review all information in
your confirmation or consolidated statement relating to transactions to ensure
that your instructions have been acted on properly. Please notify Twentieth
Century in writing if there is an error. If you fail to provide notification of
an error within 30 days of non-automatic transactions (or within 30 days of the
date of your consolidated quarterly statement, in the case of the automatic
transactions noted above) you will be deemed to have ratified the transaction.
The disclosure set forth below replaces the second paragraph under the
heading "A Tax Note About Giftrust" on page 28 of the Equity Funds Prospectus:
The income of a Giftrust is exempt from federal income tax until it exceeds
$100; the trustee of the Giftrust files federal income tax returns and pays the
income tax out of the assets of the trust. A $10 fee will be charged against a
Giftrust account in each year that the trustee files a tax return on behalf of
the Giftrust. The distribution to the beneficiary at the maturity of the
Giftrust may be subject to the throwback rules under the Internal Revenue Code.
The throwback rules may create additional tax liability for a beneficiary who is
age 21 or older at the time the Giftrust matures. More than one trust for the
same beneficiary may be subject to the provisions of the Internal Revenue Code
with respect to multiple trusts.
The disclosure set forth below modifies the section "Management" beginning
on page 28 of the Equity Funds Prospectus. A new subheading titled "Investment
Management" is hereby added immediately below the heading "Management" on page
28. The following paragraph is added after the first paragraph on page 29:
In June 1995, Twentieth Century Companies, Inc. ("TCC"), the parent of
Investors Research, acquired Benham Management International, Inc. In the
acquisition, Benham Management Corporation ("BMC"), the investment adviser to
the Benham Group of Mutual Funds, became a wholly owned subsidiary of TCC.
Certain employees of BMC will be providing investment management services to
Twentieth Century funds, while certain Twentieth Century employees will be
providing investment management services to Benham funds.
2
<PAGE>
The first two paragraphs appearing on page 30 of the Equity Funds Prospectus are
hereby deleted. In addition, the following two paragraphs replace the sixth
paragraph appearing on page 30:
CODE OF ETHICS
Twentieth Century and Investors Research have adopted a Code of Ethics (the
"Code") that restricts personal investing practices by employees of Investors
Research and its affiliates. Among other provisions, the Code requires that
employees with access to information about the purchase or sale of securities in
the funds' portfolios obtain preclearance before executing personal trades. With
respect to portfolio managers and other investment personnel, the Code prohibits
acquisition of securities in an initial public offering, as well as profits
derived from the purchase and sale of the same security within 60 calendar days.
These provisions are designed to ensure that the interests of fund shareholders
come before the interests of the people who manage those funds.
TRANSFER AND ADMINISTRATIVE SERVICES
Twentieth Century Services, Inc., 4500 Main Street, Kansas City, Missouri
64111, acts as transfer, administrative services and dividend-paying agent for
Twentieth Century. It provides facilities, equipment and personnel to Twentieth
Century, and is paid for such services by Investors Research. Certain
record-keeping services that would otherwise be performed by Twentieth Century
Services, Inc., may be performed by an insurance company or other entity
providing similar services for various retirement plans using shares of
Twentieth Century as a funding medium or by broker-dealers for their customers
investing in shares of Twentieth Century. Investors Research may elect to enter
into a contract to pay them for such services.
P.O. Box 419200
Kansas City, Missouri [company
SH-SPL-4156 64141-6200 logo]
9601 1-800-345-2021 or 816-531-5575
3
<PAGE>
Twentieth Century
Investors, Inc.
Equity Funds Prospectus
MARCH 1,
1995
Revised June 1, 1995
- --------------------------------------------------------------------------------
Twentieth Century Investors, Inc., a member of the Twentieth Century family
of funds, offers 16 no-load mutual funds covering a variety of investment
opportunities. Seven of the funds invest primarily in equity securities and are
described in this prospectus. Their investment objectives are listed on the
inside cover of this prospectus. The nine funds that invest primarily in fixed
income or debt securities are described in a separate prospectus.
NO-LOAD MUTUAL FUNDS
Twentieth Century's funds are "no-load" investments, which means there are
no sales charges or commissions. Twentieth Century has no 12b-1 plan or other
deferred sales charges. There is no minimum investment requirement for any of
the funds described in this prospectus except Giftrust Investors. However, if
the value of the shares held in any one fund account is less than $2,500 ($1,000
for UGMA/UTMA accounts), you must establish a $50 or greater automatic monthly
investment in each such account. (See "Automatic Monthly Investments," page 16
and "Automatic Redemption of Shares," page 22.)
This prospectus gives you information about Twentieth Century that you
should know before investing. You should read this prospectus carefully and
retain it for future reference. Additional information is included in the
statement of additional information dated March 1, 1995, and filed with the
Securities and Exchange Commission. It is incorporated in this prospectus by
reference. To obtain a copy without charge, call or write:
Twentieth Century Investors, Inc.
4500 Main Street o P.O. Box 419200
Kansas City, MO 64141-6200
1-800-345-2021
Local and international calls:
816-531-5575
Telecommunications device for the deaf:
1-800-634-4113
In Missouri:
816-753-1865
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE>
INVESTMENT OBJECTIVES OF THE FUNDS
- --------------------------------------------------------------------------------
Equity Funds
SELECT Investors
HERITAGE Investors
seek capital growth. The funds intend to pursue their investment objectives
by investing primarily in common stocks of companies that are considered by
management to have better-than-average prospects for appreciation. As a
matter of fundamental policy, such companies must have a record of paying or
have committed themselves to the payment of regular dividends.
GROWTH INVESTORS
ULTRA INVESTORS
VISTA INVESTORS
GIFTRUST INVESTORS
seek capital growth. The funds intend to pursue their investment objectives
by investing primarily in common stocks that are considered by management to
have better-than-average prospects for appreciation.
Balanced Fund
BALANCED Investors
seeks capital growth and current income. It is management's intention to
maintain approximately 60% of the fund's assets in common stocks that are
considered by management to have better-than-average prospects for
appreciation and the balance in bonds and other fixed income securities.
There is no assurance that the funds will achieve their respective investment
objectives.
- --------------------------------------------------------------------------------
NO PERSON IS AUTHORIZED BY TWENTIETH CENTURY TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS OR IN OTHER PRINTED
OR WRITTEN MATERIAL ISSUED BY THE COMPANY, AND YOU SHOULD NOT RELY ON ANY OTHER
INFORMATION OR REPRESENTATION.
2
<PAGE>
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
Transaction and Operating
Expense Table ......................................4
Financial Highlights................................5
INFORMATION REGARDING THE FUNDS
Information About Investment
Policies of the Funds............................8
Equity Funds.....................................8
Select and Heritage Investors.................8
Growth, Ultra and
Vista Investors...............................8
Giftrust Investors............................9
Balanced Fund....................................9
Balanced Investors............................9
Other Investment Practices.........................10
Foreign Securities..............................10
Forward Currency
Exchange Contracts...........................10
Portfolio Turnover..............................11
Repurchase Agreements...........................11
Derivative Securities...........................12
Portfolio Lending...............................13
When-Issued Securities..........................13
Rule 144A Securities............................13
Short Sales.....................................14
Performance Advertising............................14
HOW TO INVEST WITH TWENTIETH CENTURY
Twentieth Century
Family of Funds..................................15
Investing in
Twentieth Century................................15
By Mail..........................................15
By Telephone.....................................15
By Wire..........................................15
Automatic Monthly Investments....................16
Additional Information
About Investments................................16
Tax Identification Number........................16
Certificates.....................................16
Special Shareholder Services.......................17
How to Convert Your Investment
From One Twentieth Century Fund
to Another ......................................17
By Telephone.....................................17
By Mail .........................................17
Additional Information
About Conversions................................18
How to Redeem Shares...............................18
By Telephone.....................................19
By Mail .........................................19
By Check-A-Month.................................19
Signature Guarantee..............................20
Redemption Proceeds................................20
By Mail..........................................20
By Wire and Electronic
Funds Transfer...................................21
Special Requirements for
Large Redemptions................................21
Automatic Redemption of Shares...................22
Additional Information
About Redemptions................................22
Telephone Services.................................22
Investors Line...................................22
Automated Information Line.......................23
How to Change Your
Address of Record...............................23
Tax-Qualified
Retirement Plans................................23
How to Transfer an
Investment to a
Twentieth Century
Retirement Plan.................................23
College Investment Program.........................23
How to Transfer Your Shares
to Another Person................................24
Reports to Shareholders............................24
ADDITIONAL INFORMATION YOU SHOULD KNOW
Share Price........................................25
When Share Price Is Determined..................25
How Share Price Is Determined...................25
Where to Find Information
About Share Price............................26
Distributions..................................... 26
Equity Funds....................................26
Balanced Fund...................................26
General Information About
Distributions.................................26
Taxes..............................................27
A Tax Note About Giftrust.......................28
Management.........................................28
Further Information
About Twentieth Century.........................30
3
<PAGE>
TRANSACTION AND OPERATING EXPENSE TABLE
- --------------------------------------------------------------------------------
Applicable to
Select, Heritage,
Growth, Ultra,
Vista, Giftrust,
and Balanced
SHAREHOLDER TRANSACTION EXPENSES -----------------
Maximum Sales Load Imposed on Purchases none
Maximum Sales Load Imposed on Reinvested Dividends none
Deferred Sales Load none
Redemption Fee* none
Exchange Fee none
ANNUAL FUND OPERATING EXPENSES
(as a percentage of net assets):
Management Fees 1.00%
12b-1 Fees none
Other Expenses** 0.00%
Total Fund Operating Expenses 1.00%
Example
You would pay the following expenses on a $1,000 1 year $ 10
investment, assuming (1) a 5% annual return 3 years 32
and (2) redemption at the end of each time period: 5 years 55
10 years 122
The purpose of the table is to help you understand the various costs and
expenses that you, as a shareholder, will bear directly or indirectly in
connection with an investment in shares of the Twentieth Century funds offered
by this prospectus. The example set forth above assumes reinvestment of all
dividends and distributions and uses a 5% annual rate of return as required by
Securities and Exchange Commission regulations.
NEITHER THE 5% RATE OF RETURN NOR THE EXPENSES SHOWN ABOVE SHOULD BE
CONSIDERED INDICATIONS OF PAST OR FUTURE RETURNS AND EXPENSES. ACTUAL RETURNS
AND EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
* Redemption proceeds sent by wire are subject to a $10 processing fee.
** Other expenses, the fees and expenses of those directors who are not
"interested persons" as defined in the Investment Company Act, were 0.0014
of 1% of average net assets for the most recent fiscal year.
4
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout the period)
- ------------------------------------------------------------------------------------------------------------------------------------
The Financial Highlights for each of the periods presented (except as noted) have been audited by Baird, Kurtz & Dobson,
independent certified public accountants, whose report thereon appears in the corporation's annual report which is incorporated by
reference into the statement of additional information. The annual report contains additional performance information and will be
made available upon request and without charge.
INCOME FROM
INVESTMENT OPERATIONS DISTRIBUTIONS
------------------------------------------ ---------------------------------------------------------
Net Realized Distributions Distributions
and from Net in Excess of
Net Asset Net Unrealized Total Dividends Realized Net Realized
Value, Investment Gains from from Net Gains on Gains on
Beginning Income (Losses) on Investment Investment Security Security Total
of Period (Loss) Securities Operations Income Transactions Transactions Distributions
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Select Investors
Year Ended Oct. 31,
1985 $22.35 $ .56 $ 4.04 $4.60 $(.465) -- -- $ (.465)
1986 26.48 .43 9.01 9.44 (.515) -- -- (.515)
1987 35.40 .33 .80 1.13 (.380) $(3.462) -- (3.842)
1988 32.69 .64 1.37 2.01 (.481) (6.367) -- (6.848)
1989 27.85 1.10 7.74 8.84 (.707) -- -- (.707)
1990 35.98 .62 (1.29) (.67) (1.116) -- -- (1.116)
1991 34.19 .63 8.17 8.80 (.652) (1.551) -- (2.203)
1992 40.79 .53 .34 .87 (.653) (1.823) -- (2.476)
1993 39.18 .46 7.94 8.40 (.495) (1.313) $(.016) (1.824)
1994 45.76 .40 (3.59) (3.19) (.432) (4.466) -- (4.898)
Heritage Investors
Nov. 10, 1987 (inception)
through Oct. 31,
1988 $ 5.00 $.06 $1.16 $1.22 $(.013) -- -- $(.013)
Year Ended Oct. 31,
1989 6.21 .08 1.93 2.01 (.066) -- -- (.066)
1990 8.15 .10 (.94) (.84) (.065) $(.691) -- (.756)
1991 6.55 .11 2.04 2.15 (.110) -- -- (.110)
1992 8.59 .10 .72 .82 (.113) -- -- (.113)
1993 9.30 .07 2.43 2.50 (.093) (.679) -- (.772)
1994 11.03 .07 (.21) (.14) (.068) (.500) $(.006) (.574)
Growth Investors
Year Ended Oct. 31,
1985 $ 12.29 $ .17 $ 1.85 $ 2.02 $(.153) -- -- $ (.153)
1986 14.16 .12 5.37 5.49 (.182) -- -- (.182)
1987 19.47 .01 1.30 1.31 (.086) $(5.076) -- (5.162)
1988 15.62 .30 .13 .43 (.046) (3.460) -- (3.506)
1989 12.54 .08 5.14 5.22 (.320) -- -- (.320)
1990 17.44 .09 (2.05) (1.96) (.079) (.592) -- (.671)
1991 14.81 .04 8.47 8.51 (.111) (.891) -- (1.002)
1992 22.32 (.02) 1.35 1.33 (.013) -- -- (.013)
1993 23.64 .06 1.94 2.00 -- (.353) $(.013) (.366)
1994 25.27 .06 .48 .54 (.056) (2.764) (.002) (2.822)
(table continued below)
RATIOS/SUPPLEMENTAL DATA
---------------------------------------------------------
(table continued) Ratio of Net Net
Ratio of Investment Assets,
Net Asset Operating Income End of
Value, Expenses (Loss) to Portfolio Period
End of Total to Average Average Turnover (in
Period Return(1) Net Assets Net Assets Rate thousands)
Select Investors
Year Ended Oct. 31,
1985 $26.48 20.96% 1.01% 2.5% 119% $1,142,911
1986 35.40 36.13% 1.01% 1.6% 85% 1,978,449
1987 32.69 3.47% 1.00% 1.1% 123% 2,416,527
1988 27.85 7.31% 1.00% 2.2% 140% 2,366,730
1989 35.98 32.59% 1.00% 3.4% 93% 2,720,968
1990 34.19 (2.03%) 1.00% 1.8% 83% 2,953,030
1991 40.79 27.05% 1.00% 1.7% 84% 4,163,105
1992 39.18 1.76% 1.00% 1.4% 95% 4,534,264
1993 45.76 22.20% 1.00% 1.1% 82% 5,159,963
1994 37.67 (7.37%) 1.00% 1.0% 126% 4,277,843
Heritage Investors
Nov. 10, 1987 (inception)
through Oct. 31,
1988 $ 6.21 25.75% 1.00%(2) 1.4%(2) 130%(2) $ 55,389
Year Ended Oct. 31,
1989 8.15 32.65% 1.00% 1.3% 159% 116,880
1990 6.55 (11.62%) 1.00% 1.6% 127% 198,999
1991 8.59 33.25% 1.00% 1.5% 146% 268,891
1992 9.30 9.65% 1.00% 1.1% 119% 368,651
1993 11.03 28.64% 1.00% .7% 116% 701,504
1994 10.32 (1.13%) 1.00% .7% 136% 896,763
Growth Investors
Year Ended Oct. 31,
1985 $14.16 16.64% 1.01% 1.3% 116% $ 759,874
1986 19.47 39.09% 1.01% .6% 105% 964,742
1987 15.62 9.32% 1.00% .2% 114% 1,187,933
1988 12.54 3.18% 1.00% 2.4% 143% 1,228,587
1989 17.44 42.74% 1.00% .5% 98% 1,596,571
1990 14.81 (11.72%) 1.00% .6% 118% 1,696,667
1991 22.32 60.64% 1.00% .2% 69% 3,193,381
1992 23.64 5.96% 1.00% (.1%) 53% 4,471,882
1993 25.27 8.48% 1.00% .2% 94% 4,641,187
1994 22.99 2.66% 1.00% .3% 100% 4,363,476
(1) Actual total return for period indicated.
(2) Annualized.
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS (CONTINUED)
- ------------------------------------------------------------------------------------------------------------------------------------
INCOME FROM
INVESTMENT OPERATIONS DISTRIBUTIONS
--------------------------------------- ---------------------------------------------------------
Net Realized Distributions Distributions
and from Net in Excess of
Net Asset Net Unrealized Total Dividends Realized Net Realized
Value, Investment Gains from from Net Gains on Gains on
Beginning Income (Losses) on Investment Investment Security Security Total
of Period (Loss) Securities Operations Income Transactions Transactions Distributions
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Ultra Investors
Year Ended Oct. 31,
1985 $ 6.57 $ .01 $ .55 $ .56 -- -- -- --
1986 7.13 .00 1.94 1.94 $(.010) -- -- $ (.010)
1987 9.06 (.07) (.22) (.29) (.007) -- -- (.007)
1988 8.76 (.02) 1.38 1.36 -- $(3.258) -- (3.258)
1989 6.86 .19 2.58 2.77 -- -- -- --
1990 9.63 (.03) (.73) (.76) (.196) (.947) -- (1.143)
1991 7.73 (.03) 7.86 7.83 -- (.028) -- (.028)
1992 15.53 (.05) (.02) (.07) -- -- -- --
1993 15.46 (.09) 6.24 6.15 -- -- -- --
1994 21.61 (.03) (.42) (.45) -- -- -- --
Vista Investors
Year Ended Oct. 31,
1985 $ 4.43 $(.01) $ .27 $.26 $(.009) -- -- $ (.009)
1986 4.68 (.02) 2.22 2.20 -- -- -- --
1987 6.88 (.05) (.45) (.50) -- $ (.651) -- (.651)
1988 5.73 .01 .63 .64 -- (.462) -- (.462)
1989 5.91 (.03) 2.87 2.84 (.012) -- -- (.012)
1990 8.74 (.01) (1.76) (1.77) -- (.693) -- (.693)
1991 6.28 (.02) 4.27 4.25 -- -- -- --
1992 10.53 (.04) .52 .48 -- -- -- --
1993 11.01 (.07) 1.95 1.88 -- (.641) $(.006) (.647)
1994 12.24 (.08) .45 .37 -- (1.663) (.012) (1.675)
Giftrust Investors
Year Ended Oct. 31,
1985 $ 4.23 $(.02) $ 1.56 $1.54 $(.022) -- -- $ (.022)
1986 5.75 (.03) 2.65 2.62 -- $ (.179) -- (.179)
1987 8.19 (.04) (.23) (.27) -- (1.250) -- (1.250)
1988 6.67 (.01) 1.04 1.03 -- (.856) -- (.856)
1989 6.84 (.04) 3.35 3.31 -- (.206) -- (.206)
1990 9.94 (.05) (1.72) (1.77) -- (.924) -- (.924)
1991 7.25 (.06) 5.77 5.71 -- (.025) -- (.025)
1992 12.94 (.08) 1.41 1.33 -- (.697) -- (.697)
1993 13.57 (.09) 7.18 7.09 -- (1.425) $(.007) (1.432)
1994 19.23 (.10) 3.28 3.18 -- (1.911) -- (1.911)
(table continued below)
RATIOS/SUPPLEMENTAL DATA
----------------------------------------------------
(table continued) Ratio of Net Net
Ratio of Investment Assets,
Net Asset Operating Income End of
Value, Expenses (Loss) to Portfolio Period
End of Total to Average Average Turnover (in
Period Return(1) Net Assets Net Assets Rate thousands)
Ultra Investors
Year Ended Oct. 31,
1985 $ 7.13 8.52% 1.01% .1% 100% $ 385,614
1986 9.06 27.22% 1.01% -- 99% 314,462
1987 8.76 (3.23%) 1.00% (.5%) 137% 235,865
1988 6.86 19.52% 1.00% (.3%) 140% 258,320
1989 9.63 40.37% 1.00% 2.2% 132% 346,593
1990 7.73 9.02% 1.00% (.3%) 141% 330,005
1991 15.53 101.51% 1.00% (.5%) 42% 2,147,654
1992 15.46 (.45%) 1.00% (.4%) 59% 4,275,200
1993 21.61 39.78% 1.00% (.6%) 53% 8,037,417
1994 21.16 (2.08%) 1.00% (.1%) 78% 10,344,273
Vista Investors
Year Ended Oct. 31,
1985 $ 4.68 5.84% 1.01% (.2%) 174% $ 99,371
1986 6.88 47.00% 1.01% (.3%) 121% 159,889
1987 5.73 (7.70%) 1.00% (.7%) 123% 187,272
1988 5.91 11.41% 1.00% .2% 145% 206,434
1989 8.74 48.19% 1.00% (.4%) 125% 263,876
1990 6.28 (22.17%) 1.00% (.1%) 103% 340,621
1991 10.53 67.67% 1.00% (.3%) 92% 622,140
1992 11.01 4.55% 1.00% (.4%) 87% 829,678
1993 12.24 17.71% 1.00% (.6%) 133% 847,470
1994 10.94 4.16% 1.00% (.8%) 111% 792,343
Giftrust Investors
Year Ended Oct. 31,
1985 $ 5.75 36.64% 1.01% (.3%) 134% $ 3,475
1986 8.19 46.67% 1.01% (.4%) 123% 7,127
1987 6.67 (4.00%) 1.00% (.5%) 130% 9,560
1988 6.84 16.28% 1.00% (.1%) 157% 13,167
1989 9.94 49.81% 1.00% (.5%) 160% 22,541
1990 7.25 (19.77%) 1.00% (.6%) 137% 25,296
1991 12.94 79.04% 1.00% (.6%) 143% 54,963
1992 13.57 10.32% 1.00% (.7%) 134% 77,518
1993 19.23 55.84% 1.00% (.7%) 143% 153,997
1994 20.50 18.75% 1.00% (.7%) 115% 265,601
(1) Actual total return for period indicated.
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS (CONTINUED)
- ------------------------------------------------------------------------------------------------------------------------------------
INCOME FROM
INVESTMENT OPERATIONS DISTRIBUTIONS
--------------------------------------- --------------------------------------------------------
Net Realized Distributions Distributions
and from Net in Excess of
Net Asset Net Unrealized Total Dividends Realized Net Realized
Value, Investment Gains from from Net Gains on Gains on
Beginning Income (Losses) on Investment Investment Security Security Total
of Period (Loss) Securities Operations Income Transactions Transactions Distributions
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balanced Investors
Oct. 20, 1988 (inception)
through Oct. 31,
1988 $10.22 $.01 $(.10) $(.09) -- -- -- --
Year Ended Oct. 31,
1989 10.13 .37 1.71 2.08 $(.372) -- -- $(.372)
1990 11.84 .41 (.62) (.21) (.417) $(.320) -- (.737)
1991 10.89 .38 4.22 4.60 (.384) -- -- (.384)
1992 15.11 .33 (.23) .10 (.322) -- -- (.322)
1993 14.89 .38 1.62 2.00 (.375) -- -- (.375)
1994 16.52 .42 (.58) (.16) (.416) -- -- (.416)
(table continued below)
RATIOS/SUPPLEMENTAL DATA
-----------------------------------------------------
(table continued) Ratio of Net Net
Ratio of Investment Assets,
Net Asset Operating Income End of
Value, Expenses (Loss) to Portfolio Period
End of Total to Average Average Turnover (in
Period Return(1) Net Assets Net Assets Rate thousands)
Balanced Investors
Oct. 20, 1988 (inception)
through Oct. 31,
1988 $10.13 (.88%) 1.00%(2) 4.4%(2) 99%(2) $ 2,786
Year Ended Oct. 31,
1989 11.84 20.94% 1.00% 4.2% 171% 30,156
1990 10.89 (2.10%) 1.00% 3.8% 104% 66,407
1991 15.11 42.92% 1.00% 3.1% 116% 254,884
1992 14.89 .63% 1.00% 2.4% 100% 654,123
1993 16.52 13.64% 1.00% 2.4% 95% 705,698
1994 15.94 (.93%) 1.00% 2.7% 94%(3) 703,866
(1) Actual total return for period indicated.
(2) Annualized.
(3) The portfolio turnover rate of the equity and fixed income components of
the portfolio was 109% and 66%, respectively.
</TABLE>
7
<PAGE>
INFORMATION REGARDING THE FUNDS
- --------------------------------------------------------------------------------
INFORMATION ABOUT INVESTMENT
POLICIES OF THE FUNDS
Twentieth Century has adopted certain investment restrictions applicable
to the funds that are set forth in the statement of additional information.
Those restrictions, as well as the investment objectives of the funds
identified on the inside front cover page of this prospectus, and any other
investment policies designated as "fundamental" in this prospectus or in the
statement of additional information, cannot be changed without shareholder
approval. The funds have implemented additional investment policies and
practices to guide their activities in the pursuit of their respective
investment objectives. These policies and practices, which are described
throughout this prospectus, are not designated as fundamental policies and
may be changed without shareholder approval.
The descriptions that follow are designed to help you choose the fund
that best fits your investment objectives. You may want to pursue more than
one objective by investing in more than one of these funds.
EQUITY FUNDS
All of Twentieth Century's equity funds and the equity portion of the
portfolio of Balanced Investors seek capital growth by investing in
securities, primarily common stocks, that meet certain fundamental and
technical standards of selection and have, in the opinion of Twentieth
Century's management, better-than-average potential for appreciation. So long
as a sufficient number of such securities are available, Twentieth Century
intends to stay fully invested in these securities regardless of the movement
of stock prices generally. In most circumstances, the funds' actual level of
cash and cash equivalents will fluctuate between 0% and 10% of total assets
with 90% to 100% of its assets committed to equity and equity equivalent
investments. The funds may purchase securities only of companies that have a
record of at least three years continuous operation.
SELECT INVESTORS, HERITAGE INVESTORS
Securities of companies chosen for Select and Heritage Investors are
chosen primarily for their growth potential. Additionally, as a matter of
fundamental policy the companies must have a record of paying, or must have
committed themselves to the payment of regular dividends. Their income
payments are only a secondary consideration; therefore, the income return
that Select and Heritage provide may not be significant. Otherwise, Select
and Heritage follow the same investment techniques described below for
Growth, Ultra and Vista.
Since Select is one of the largest of Twentieth Century's funds and
Heritage is substantially smaller, Select will invest in shares of larger
companies with larger share trading volume, and Heritage will tend to invest
in smaller companies with smaller share trading volume. However, the two
funds are not mutually exclusive, and a given security may be owned by both
funds. For the reasons stated below under the caption "Growth, Ultra and
Vista Investors," it should be expected that Heritage will be more volatile
and subject to greater short-term risk and long-term opportunity than Select.
Because of its size, and because it can invest only in securities that
pay dividends or are committed to the payment of dividends, Select may be
expected to be the least volatile of the common stock funds described in this
prospectus.
GROWTH INVESTORS, ULTRA INVESTORS,
VISTA INVESTORS
Management selects, for the portfolios of Growth, Ultra and Vista,
securities of companies whose earnings and revenue trends meet management's
standards of selection. They then determine to which of the three funds the
selected securities would most contribute.
Large, established companies are generally allocated to Growth.
Medium-sized and smaller companies are allocated to Ultra and Vista. As of
February 1, 1995, the size of the companies (as reflected by their
capitalizations) held by the funds is as follows:
8
<PAGE>
Median Capitalization
of Companies Held
- --------------------------------------------------------------------------------
Growth Investors $ 7,658,739,000
Ultra Investors $ 1,946,368,000
Vista Investors $ 623,861,000
- --------------------------------------------------------------------------------
The median capitalization of the companies in a given fund may change
over time. In addition, the criteria outlined above are not mutually
exclusive, and a given security may be owned by more than one of the funds.
The size of the fund and of its portfolio companies tends to give each
fund its own characteristics of volatility and risk. These differences come
about because developments such as new or improved products or methods, which
would be relatively insignificant to a large portfolio company, may have a
substantial impact on the earnings and revenues of a small company and create
a greater demand and a higher value for its shares. However, a new product
failure which could readily be absorbed by a large portfolio company can
cause a rapid decline in the value of the shares of a smaller company. Hence,
it could be expected that funds investing in smaller companies would be more
volatile than funds investing in larger companies.
GIFTRUST INVESTORS
Giftrust Investors is the smallest of the common stock funds described
in this prospectus and may be considered the most volatile. Selection of
securities for the portfolio of Giftrust is discussed under "Equity Funds,"
page 8.
A Giftrust investment is a unique way to give a gift to a child, a
charity or any individual or organization. (You may not establish or make
investments in a Giftrust for yourself or your spouse.) To open a Giftrust
account, call or write for a Giftrust Information Kit. The minimum initial
investment in Giftrust is $250.
The shares in a Giftrust are held in trust by an independent trustee
until the maturity date you specify. The duration of the trust may be as long
as you wish, but must be at least 10 years from the time you make the first
investment in the Giftrust or until the recipient reaches the age of
majority, whichever is later. The recipient will then receive the shares in
the account. The Giftrust is irrevocable. Before the maturity date you
specify, neither you nor the beneficiary may amend the terms of the trust in
any way. Additional investments may be made in amounts of $50 or more at any
time without affecting the maturity date.
At the maturity of the Giftrust, the beneficiary may continue to own the
Giftrust shares but, except for reinvestment of distributions, may not make
additional Giftrust investments.
The tax laws applicable to trusts in general are quite complex. You
should consider consulting your tax adviser before opening a Giftrust
account. (For information on Giftrusts and taxes, see "A Tax Note About
Giftrust," page 28.)
BALANCED FUND
BALANCED INVESTORS
Balanced Investors seeks capital growth and current income. Selection of
securities for the equity portion of its portfolio is discussed under "Equity
Funds," page 8.
Since a portion of the fund's portfolio will be invested in fixed income
securities, the opportunity for capital appreciation may be expected to be
less than the other funds described in this prospectus.
Management intends to maintain approximately 40% of the fund's assets in
fixed income securities with a minimum of 25% of that amount in fixed income
senior securities. The fixed income securities in the fund will be chosen
based on their level of income production and price stability. The fund may
invest in a diversified portfolio of debt and other fixed-rate securities
payable in United States currency. These may include obligations of the
United States government, its agencies and instrumentalities; corporate
securities (bonds, notes, preferreds and convertible issues), and sovereign
government, municipal, mortgage-backed and other asset-backed securities.
There are no maturity restrictions on the fixed income securities in
which the fund
9
<PAGE>
invests. Under normal market conditions the weighted average portfolio
maturity will be in the three- to 10-year range. Management will actively
manage the portfolio, adjusting the weighted average portfolio maturity in
response to expected changes in interest rates. During periods of rising
interest rates, a shorter weighted average maturity may be adopted in order
to reduce the effect of bond price declines on the fund's net asset value.
When interest rates are falling and bond prices rising, a longer weighted
average portfolio maturity may be adopted.
It is management's intention to invest the fund's fixed income holdings
in high-grade securities. At least 80% of fixed income assets will be
invested in securities which at the time of purchase are rated within the
three highest categories by a nationally recognized statistical rating
organization [at least A by Moody's Investors Service, Inc. (Moody's) or
Standard & Poor's Corp. (S&P)].
The remaining portion of the fixed income assets may be invested in
issues in the fourth highest category (Baa by Moody's or BBB by S&P), or, if
not rated, are of equivalent investment quality as determined by the
management and which, in the opinion of management, can contribute
meaningfully to the fund's results without compromising its objectives. Such
issues might include a lower-rated issue where research suggests the
likelihood of a rating increase; or a convertible issue of a company deemed
attractive by the equity management team. According to Moody's, bonds rated
Baa are medium-grade and possess some speculative characteristics. A BBB
rating by S&P indicates S&P's belief that a security exhibits a satisfactory
degree of safety and capacity for repayment, but is more vulnerable to
adverse economic conditions or changing circumstances. (See, "An Explanation
of Fixed Income Securities Ratings" in the statement of additional
information.)
OTHER INVESTMENT PRACTICES
For additional information, see "Investment Restrictions Applicable to
All Series of Shares" in the statement of additional information.
FOREIGN SECURITIES
Each of Twentieth Century's funds described in this prospectus may
invest an unlimited amount of its assets in the securities of foreign
issuers, primarily from developed markets, when these securities meet its
standards of selection. The funds may make such investments either directly
in foreign securities, or by purchasing Depositary Receipts ("DRs") for
foreign securities. DRs are securities listed on exchanges or quoted in the
over-the-counter market in one country but represent the shares of issuers
domiciled in other countries. DRs may be sponsored or unsponsored. Direct
investments in foreign securities may be made either on foreign securities
exchanges or in the over-the-counter markets.
Subject to their individual investment objectives and policies, the
funds may invest in common stocks, convertible securities, preferred stocks,
bonds, notes and other debt securities of foreign issuers, and debt
securities of foreign governments and their agencies. The funds will limit
their purchase of debt securities to investment grade obligations.
Investments in foreign securities may present certain risks, including
those resulting from fluctuations in currency exchange rates, future
political and economic developments, reduced availability of public
information concerning issuers, and the fact that foreign issuers are not
generally subject to uniform accounting, auditing and financial reporting
standards or to other regulatory practices and requirements comparable to
those applicable to domestic issuers.
FORWARD CURRENCY
EXCHANGE CONTRACTS
Some of the foreign securities held by the funds may be denominated in
foreign currencies. Other securities, such as DRs, may be denominated in U.S.
dollars, but have a value that is dependent on the performance of a foreign
security, as valued in the currency of its home coun-
10
<PAGE>
try. As a result, the value of the funds' portfolios may be affected by
changes in the exchange rates between foreign currencies and the dollar, as
well as by changes in the market values of the securities themselves. The
performance of foreign currencies relative to the dollar may be a factor in
the overall performance of the funds.
To protect against adverse movements in ex-change rates between
currencies, the funds may, for hedging purposes only, enter into forward
currency exchange contracts. A forward currency exchange contract obligates
the fund to purchase or sell a specific currency at a future date at a
specific price.
A fund may elect to enter into a forward currency exchange contract with
respect to a specific purchase or sale of a security, or with respect to the
fund's portfolio positions generally.
By entering into a forward currency exchange contract with respect to
the specific purchase or sale of a security denominated in a foreign
currency, a fund can "lock in" an exchange rate between the trade and
settlement dates for that purchase or sale. This practice is sometimes
referred to as "transaction hedging." Each fund may enter into transaction
hedging contracts with respect to all or a substantial portion of its foreign
securities trades.
When the manager believes that a particular currency may decline in
value compared to the dollar, a fund may enter into forward currency exchange
contracts to sell the value of some or all of the fund's portfolio securities
either denominated in, or whose value is tied to, that currency. This
practice is sometimes referred to as "portfolio hedging." A fund may not
enter into a portfolio hedging transaction where it would be obligated to
deliver an amount of foreign currency in excess of the aggregate value of its
portfolio securities or other assets denominated in, or whose value is tied
to, that currency.
Each fund will make use of the portfolio hedging to the extent deemed
appropriate by the manager. However, it is anticipated that a fund will enter
into portfolio hedges much less frequently than transaction hedges.
If a fund enters into a forward contract, the fund, when required, will
instruct its custodian bank to segregate cash or liquid high-grade securities
in a separate account in an amount sufficient to cover its obligation under
the contract. Those assets will be valued at market daily, and if the value
of the segregated securities declines, additional cash or securities will be
added so that the value of the account is not less than the amount of the
fund's commitment. At any given time, no more than 10% of a fund's assets
will be committed to a segregated account in connection with portfolio
hedging transactions.
Predicting the relative future values of currencies is very difficult,
and there is no assurance that any attempt to protect a fund against adverse
currency movements through the use of forward currency exchange contracts
will be successful. In addition, the use of forward currency exchange
contracts tends to limit the potential gains that might result from a
positive change in the relationships between the foreign currency and the
U.S. dollar.
PORTFOLIO TURNOVER
The total portfolio turnover rates of the funds are shown in the
Financial Highlights table on pages 5, 6 and 7 of this prospectus.
Investment decisions to purchase and sell securities are based on the
anticipated contribution of the security in question to a fund's objectives.
The rate of portfolio turnover is irrelevant when management believes a
change is in order to achieve those objectives and accordingly, the annual
portfolio turnover rate cannot be anticipated.
The portfolio turnover of each fund may be higher than other mutual
funds with similar investment objectives. Higher turnover would generate
correspondingly greater brokerage commissions, which is a cost that each fund
pays directly. Portfolio turnover may also affect the character of capital
gains, if any, realized and distributed by a fund since short-term capital
gains are taxable as ordinary income.
REPURCHASE AGREEMENTS
Each fund may invest in repurchase agreements when such transactions
present an attractive short-term return on cash that is not
11
<PAGE>
otherwise committed to the purchase of securities pursuant to the investment
policies of that fund.
A repurchase agreement occurs when, at the time the fund purchases an
interest-bearing obligation, the seller (a bank or a broker-dealer registered
under the Securities Exchange Act of 1934) agrees to repurchase it on a
specified date in the future at an agreed-upon price. The repurchase price
reflects an agreed-upon interest rate during the time the fund's money is
invested in the security.
Since the security purchased constitutes security for the repurchase
obligation, a repurchase agreement can be considered a loan collateralized by
the security purchased. The fund's risk is the ability of the seller to pay
the agreed-upon repurchase price on the repurchase date. If the seller
defaults, the fund may incur costs in disposing of the collateral, which
would reduce the amount realized thereon. If the seller seeks relief under
the bankruptcy laws, the disposition of the collateral may be delayed or
limited. To the extent the value of the security decreases, the fund could
experience a loss.
The funds will limit repurchase agreement transactions to securities
issued by the United States government, its agencies and instrumentalities,
and will enter into such transactions with those banks and securities
dealers who are deemed creditworthy pursuant to criteria adopted by the
funds' board of directors.
No fund will invest more than 15% of its assets in repurchase agreements
maturing in more than seven days.
DERIVATIVE SECURITIES
To the extent permitted by its investment objectives and policies, each
of the funds may invest in securities that are commonly referred to as
"derivative" securities. Certain derivative securities are more accurately
described as "index/structured securities." Index/structured securities are
derivative securities whose value or performance is linked to other equity
securities (such as DRs), currencies, interest rates, indexes or other
financial indicators ("reference indexes"). No fund may invest in an
index/structured security unless the reference index or the instrument to
which it relates is an eligible investment for the fund. For example, a bond
whose interest rate was indexed to the return on two-year treasury securities
would be a permissible investment for Balanced Investors (assuming it met the
other requirements for the fund), while a bond whose return was indexed to
the price of oil would not be a permissible investment.
The return, interest rate or, unlike most fixed income securities, the
principal amount payable at maturity of an index/structured security may be
increased or decreased, depending upon changes in the reference index.
Index/structured securities may be positively or negatively indexed. That
means that an increase in the reference index may produce an increase or
decrease in the return, interest rate or value at maturity of the security.
No purchases will be made of index/structured securities having
"leverage" characteristics. This means that no investments will be made in
securities whose change in return, interest rate or value at maturity is a
multiple of the change in the reference index. With regard to Balanced
Investors, in no event will an index/structured security be purchased if its
addition to Balanced Investors' fixed income portfolio would cause the
expected interest rate characteristics of its fixed income portfolio to fall
outside the expected interest rate characteristics of a fund having the same
permissible weighted average portfolio maturity range that does not invest in
index/structured securities.
Because their performance is tied to a reference index, a fund investing
in index/structured securities, in addition to being exposed to the credit
risk of the issuer of the security, will also bear the market risk of changes
in the reference index.
The board of directors has approved management's policy regarding
investments in derivative securities. That policy specifies factors that must
be considered in connection with a purchase of derivative securities. The
policy also establishes a committee that must review certain proposed
purchases before the purchases
12
<PAGE>
can be made. Management will report on fund activity in derivative securities
to the board of directors as necessary. In addition, the board will review
management's policy for investments in derivative securities annually.
PORTFOLIO LENDING
In order to realize additional income, each fund may lend its portfolio
securities to persons not affiliated with it and who are deemed to be
creditworthy. Such loans must be secured continuously by cash collateral
maintained on a current basis in an amount at least equal to the market value
of the securities loaned, or by irrevocable letters of credit. During the
existence of the loan, the fund must continue to receive the equivalent of
the interest and dividends paid by the issuer on the securities loaned and
interest on the investment of the collateral. The fund must have the right to
call the loan and obtain the securities loaned at any time on five days'
notice, including the right to call the loan to enable the fund to vote the
securities. Such loans may not exceed one-third of the fund's net assets
taken at market. Interest on loaned securities may not exceed 10% of the
annual gross income of the fund (without offset for realized capital gains).
The portfolio lending policy described in this paragraph is a fundamental
policy that may be changed only by a vote of a majority of Twentieth
Century's shareholders.
Twentieth Century is indemnified against loss on the loans by United
States Trust Company of New York.
WHEN-ISSUED SECURITIES
Each of the funds may sometimes purchase new issues of securities on a
when-issued basis without limit when, in the opinion of the manager, such
purchases will further the investment objectives of the fund. The price of
when-issued securities is established at the time commitment to purchase is
made. Delivery of and payment for these securities typically occur 15 to 45
days after the commitment to purchase. Market rates of interest on debt
securities at the time of delivery may be higher or lower than those
contracted for on the when-issued security. Accordingly, the value of such
security may decline prior to delivery, which could result in a loss to the
fund. A separate account for each fund consisting of cash or high-quality
liquid debt securities in an amount at least equal to the when-issued
commitments will be established and maintained with the custodian. No income
will accrue to the fund prior to delivery. RULE 144A SECURITIES
RULE 144A SECURITIES
Each fund will not invest more than 15% of its assets in illiquid
securities (securities that may not be sold within seven days at
approximately the price used in determining the net asset value of fund
shares), including restricted securities. Although securities which may be
resold only to qualified institutional buyers in accordance with the
provisions of Rule 144A under the Securities Act of 1933 are considered
"restricted securities," each fund may purchase Rule 144A securities without
regard to the 15% limitation described above when those securities present an
attractive investment opportunity and otherwise meet Twentieth Century's
criteria of selection.
With respect to securities eligible for resale under Rule 144A, the
staff of the Securities and Exchange Commission has taken the position that
the liquidity of such securities in the portfolio of a fund offering
redeemable securities is a question of fact for the board of directors to
determine, such determination to be based upon a consideration of the readily
available trading markets and the review of any contractual restrictions.
Accordingly, the board of directors is responsible for developing and
establishing the guidelines and procedures for determining the liquidity of
Rule 144A securities. As allowed by Rule 144A, the board of directors of
Twentieth Century has delegated the day-to-day function of determining the
liquidity of Rule 144A securities to the manager. The board retains the
responsibility to monitor the implementation of the guidelines and procedures
it has adopted.
Since the secondary market for such securi-
13
<PAGE>
ties is limited to certain institutional investors, the liquidity of such
securities may be limited accordingly and a fund may from time to time hold a
Rule 144A security that is illiquid. In such an event, Twentieth Century will
consider appropriate remedies to minimize the effect on the fund's liquidity.
SHORT SALES
Twentieth Century's funds described in this prospectus may engage in
short sales if, at the time of the short sale, the fund owns or has the right
to acquire an equal amount of the security being sold short at no additional
cost. These transactions allow a fund to hedge against price fluctuations by
locking in a sale price for securities it does not wish to sell immediately.
A fund may make a short sale when it wants to sell the security it owns
at a current attractive price, but also wishes to defer recognition of gain
or loss for federal income tax purposes and for purposes of satisfying
certain tests applicable to regulated investment companies under the Internal
Revenue Code.
PERFORMANCE ADVERTISING
From time to time, Twentieth Century may advertise performance data.
Fund performance may be shown by presenting one or more performance
measurements, including cumulative total return or average annual total
return and, with respect to the balanced fund, yield.
Cumulative total return data is computed by considering all elements of
return, including reinvestment of dividends and capital gains distributions,
over a stated period of time. Average annual total return is determined by
computing the annual compound return over a stated period of time that would
have produced a fund's cumulative total return over the same period if the
fund's performance had remained constant throughout.
A quotation of yield reflects a fund's income over a stated period
expressed as a percentage of the fund's share price.
With respect to Balanced Investors, yield is calculated by adding over a
30-day (or one-month) period all interest and dividend income (net of fund
expenses) calculated on each day's market values, dividing this sum by the
average number of fund shares outstanding during the period, and expressing
the result as a percentage of the fund's share price on the last day of the
30-day (or one-month) period. The percentage is then annualized. Capital
gains and losses are not included in the calculation.
Yields are calculated according to accounting methods that are
standardized in accordance with SEC rules for all stock and bond funds.
Because yield accounting methods differ from the methods used for other
accounting purposes, the fund's yield may not equal the income paid on your
shares or the income reported in the fund's financial statements.
The funds may also include in advertisements data comparing performance
with the performance of non-related investment media, published editorial
comments and performance rankings compiled by independent organizations (such
as Lipper Analytical Services or Donoghue's Money Fund Report) and
publications that monitor the performance of mutual funds. Performance
information may be quoted numerically or may be presented in a table, graph
or other illustration. In addition, fund performance may be compared to
well-known indices of market performance including the Standard & Poor's
(S&P) 500 Index and the Dow Jones Industrial Average. Fund performance may
also be compared to other funds in the Twentieth Century family. It may also
be combined or blended with other funds in the Twentieth Century family, and
that combined or blended performance may be compared to the same indices to
which individual funds may be compared.
All performance information advertised by the funds is historical in
nature and is not intended to represent or guarantee future results. The
value of fund shares when redeemed may be more or less than their original
cost.
14
<PAGE>
HOW TO INVEST WITH TWENTIETH CENTURY
- --------------------------------------------------------------------------------
TWENTIETH CENTURY FAMILY OF FUNDS
In addition to the 16 funds offered by Twentieth Century Investors,
Inc., the Twentieth Century family of funds also includes funds offered by
Twentieth Century World Investors, Inc., Twentieth Century Premium Reserves,
Inc. and Twentieth Century Capital Portfolios, Inc. Please call the Investors
Line for a prospectus and additional information about the other funds in the
Twentieth Century family of funds.
INVESTING IN TWENTIETH CENTURY
You may make an initial investment in any amount you choose in any of
the funds offered by this prospectus except Giftrust. (The minimum initial
investment in Giftrust is $250.) SUBSEQUENT INVESTMENTS TO PURCHASE
ADDITIONAL SHARES IN ANY ONE FUND ACCOUNT MUST BE IN AN AMOUNT OF $50 OR
MORE.* You may diversify your investments by choosing a combination of the
funds for your investment program. (See "Information About Investment
Policies of the Funds," page 8.)
While there is no minimum investment requirement except as noted above,
if you have one or more accounts in any fund except Giftrust with a share
value of less than $2,500 [$1,000 for Uniform Gifts/Transfers to Minors Act
("UGMA/UTMA") accounts], you must establish an automatic monthly investment
to purchase additional shares in each such fund account in an amount of $50
or more.** (See "Automatic Monthly Investments," page 16 and "Automatic
Redemption of Shares," page 22.)
* THIS REQUIREMENT DOES NOT APPLY TO 403(B) ACCOUNTS AND OTHER TYPES OF
TAX-DEFERRED RETIREMENT PLAN ACCOUNTS.
** THIS REQUIREMENT DOES NOT APPLY TO INDIVIDUAL RETIREMENT ACCOUNTS, 403(B)
ACCOUNTS AND OTHER TYPES OF TAX-DEFERRED RETIREMENT PLAN ACCOUNTS.
You may invest in the following ways:
BY MAIL
Send your application and check or money order to Twentieth Century.
Checks must be payable in U.S. dollars.
ADDITIONAL INVESTMENTS. When making additional investments by mail,
please enclose your check with the return remittance portion of the
confirmation of your previous investment, if available. If the remittance
slip is not available, indicate on your check or a separate piece of paper
your name, address and account number.
Orders to purchase shares are effective on the day Twentieth Century
receives your check or money order. (See "When Share Price is Determined,"
page 25.)
BY TELEPHONE
Once your account is open, you may make investments by telephone if you
have elected the service authorizing Twentieth Century to draw on your bank
account when you call with instructions. Investments made by phone are
effective at the time of your call. (See "When Share Price Is Determined,"
page 25.)
BY WIRE
You may make your initial or subsequent investments in Twentieth Century
by wiring funds. To do so:
(1) Instruct your bank to wire funds to the Boatmen's First National Bank
of Kansas City, Missouri, ABA routing number 101000035.
(2) BE SURE TO SPECIFY ON THE WIRE:
(A) TWENTIETH CENTURY INVESTORS, INC.
(B) THE FUND YOU ARE BUYING AND ACCOUNT NUMBER (IF YOU HAVE ONE).
(C) YOUR NAME.
(D) YOUR CITY AND STATE.
(E) YOUR TAXPAYER IDENTIFICATION NUMBER.
15
<PAGE>
Wired funds are considered received on the day they are deposited in
Twentieth Century's account if they are deposited before the close of
business on the New York Stock Exchange, usually 3 p.m. Central time. (See
"When Share Price Is Determined," page 25.)
AUTOMATIC MONTHLY INVESTMENTS
Once your account is open, you may make investments automatically by
electing the service authorizing Twentieth Century to draw on your bank
account. SUCH INVESTMENTS MUST BE IN AMOUNTS OF NOT LESS THAN $50 IN ANY ONE
ACCOUNT. You should inquire at your bank whether it will honor a
preauthorized electronic draft. Contact Twentieth Century if your bank cannot
accept electronic drafts or if it requires additional documentation.
You may change the date or amount of your monthly investment anytime by
letter or telephone call to Twentieth Century at least five business days
before the change is to become effective.
ADDITIONAL INFORMATION
ABOUT INVESTMENTS
TWENTIETH CENTURY CANNOT ACCEPT INVESTMENTS SPECIFYING A CERTAIN PRICE,
DATE OR NUMBER OF SHARES AND WILL RETURN THESE INVESTMENTS.
Once you have mailed or otherwise trans-mitted your investment
instruction to Twentieth Century, it may not be modified or cancelled.
Each fund reserves the right to suspend the offering of shares for a
period of time, and each fund reserves the right to reject any specific
purchase order including purchases by exchange or conversion. Additionally,
purchases may be refused if, in the opinion of the manager, they are of a
size that would disrupt the management of the funds.
Twentieth Century intends, upon 60 days' prior notice, to involuntarily
redeem shares in any account that does not meet the minimum value or
automatic monthly investment requirements applicable to such account.
Twentieth Century reserves the right to change the amount of these minimums
from time to time or waive them in whole or in part for certain classes of
investors. (See "Automatic Monthly Investments," this page and "Automatic
Redemption of Shares," page 22.)
Transactions in shares of the funds may be executed by brokers or
investment advisers who charge a fee for their services. You should be aware
of the fact that these transactions may be made directly with Twentieth
Century without incurring such fees.
TAX IDENTIFICATION NUMBER
You must furnish Twentieth Century with your tax identification number
and state whether or not you are subject to withholding for prior
under-reporting, certified under penalties of perjury as prescribed by the
Internal Revenue Code and Regulations. Unless previously furnished,
investments received without such certifications will be returned.
Instructions to convert or transfer shares held in established accounts will
be refused unless the certifications have been provided, and redemption of
such shares will be subject to federal tax withholding at the rate of 31%. In
addition, redemption proceeds will be reduced by $50 to reimburse Twentieth
Century for the penalty that the IRS will impose on the company for failure
to report your tax identification number on information reports. Please avoid
these penalties by correctly furnishing your tax identification number.
CERTIFICATES
At your written request, Twentieth Century will issue negotiable stock
certificates. Unless your shares are purchased with wired funds, a
certificate will not be issued until 15 days have elapsed from the time of
purchase, or Twentieth Century has satisfactory proof of payment, such as a
copy of your cancelled check. Negotiable certificates
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will not be issued for fund shares held in accounts that do not meet the
minimum account value requirement for that fund.
SPECIAL SHAREHOLDER SERVICES
You may establish one or more special services designed to provide an
easy way to do business with Twentieth Century. By electing these services on
your application or by completing the appropriate forms, you may authorize:
o Investments by phone.
o Automatic Monthly Investments.
o Conversions and redemptions by phone.
o Conversions and redemptions in writing signed by any one registered owner.
o Redemptions without a signature guarantee.
o Transmission of redemption proceeds by wire or electronic funds transfer.
An election to establish any of the above services, except Automatic
Monthly Investments, will also apply to all existing and future accounts in
the Twentieth Century family of funds listed under the same social security
number or employer identification number.
With regard to the service which enables you to convert and redeem by
phone or in writing signed by only one registered owner and with respect to
redemptions, without a signature guarantee, Twentieth Century, its transfer
agent and investment adviser will not be responsible for any loss for
instructions that they reasonably believe are genuine. Twentieth Century
intends to employ reasonable procedures to confirm that instructions received
by Twentieth Century for your account in fact are genuine. Such procedures
will include requiring personal information to verify the identity of
callers, providing written confirmations of telephone transactions, and
recording telephone calls. If Twentieth Century does not employ reasonable
procedures to confirm the genuineness of instructions, then Twentieth Century
may be liable for losses due to unauthorized or fraudulent instructions.
HOW TO CONVERT YOUR
INVESTMENT FROM ONE TWENTIETH
CENTURY FUND TO ANOTHER
Subject to any applicable minimum initial investment requirements, you
may exchange ("convert") your shares to shares of any of the other funds
(except Giftrust Investors) in the Twentieth Century family of funds. Please
call the Investors Line for a prospectus and additional information about the
other funds in the Twentieth Century family of funds.
Except as noted below, conversions from any one fund account are limited
to four times in any one calendar year. In addition, the shares being
converted and the shares of each fund being acquired must have a current
value of at least $500 and otherwise meet the minimum investment requirement,
if any, of the fund being acquired. If you would like to convert your shares,
please call the Investors Line for a prospectus and additional information
about the other funds in the Twentieth Century family of funds. (See
"Additional Information About Conversions," page 18.)
Shares of the funds (except Giftrust Investors) may be received in
exchange for shares of any series issued by the other members of the
Twentieth Century family of funds.
THE CONVERSION PRIVILEGE IS NOT DESIGNED TO AFFORD SHAREHOLDERS A WAY TO
PLAY SHORT-TERM SWINGS IN THE MARKET. TWENTIETH CENTURY IS NOT SUITABLE FOR
THAT PURPOSE.
BY TELEPHONE
You may convert your shares by phone if you have authorized Twentieth
Century to accept telephone instructions. (Before calling, read "Additional
Information About Conversions," page 18.)
BY MAIL
You may direct Twentieth Century in writing to convert your shares.
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If you have authorized Twentieth Century to accept written instructions
from any one registered owner, and if the shares are owned by two or more
persons, only one signature is required on your written conversion request.
Otherwise, the request should be signed by each person in whose name the
shares are registered. All signatures should be exactly as the name appears
in the registration; for example, if an owner's name is registered as John
Robert Jones, he should sign that way and not as John R. Jones.
(Before writing, read "Additional Information About Conversions," on
this page.)
ADDITIONAL INFORMATION
ABOUT CONVERSIONS
(1) IN A CONVERSION FROM ONE ACCOUNT TO ANOTHER ACCOUNT, THE SHARES BEING
SOLD AND THE NEW SHARES BEING PURCHASED MUST HAVE A CURRENT VALUE OF AT
LEAST $500 AND YOU MUST MEET ANY INVESTMENT MINIMUM IMPOSED BY THE FUND
BEING ACQUIRED.
(2) CONVERSIONS FROM ANY ONE FUND ACCOUNT ARE LIMITED TO FOUR TIMES IN ANY
ONE CALENDAR YEAR except for the conversion of shares pursuant to an
automatic monthly conversion. [This limitation will not apply to
automatic Twentieth Century College Investment Program conversions or
to shares held in 403(b) accounts and certain pooled accounts owned by
institutional investors.]
(3) The shares being acquired must be qualified for sale in your state of
residence.
(4) If the shares are represented by a negotiable stock certificate, the
certificate must be returned before the conversion can be effected.
(5) ONCE YOU HAVE TELEPHONED OR MAILED YOUR CONVERSION REQUEST, IT IS
IRREVOCABLE AND MAY NOT BE MODIFIED OR CANCELLED.
(6) If, in any 90-day period, the total of your conversions and your
redemptions from any one account in the equity funds or the balanced
fund exceeds the lesser of $250,000 or 1% of such fund's assets,
further conversions will be subject to special requirements to comply
with Twentieth Century's policy on large redemptions. (See "Special
Requirements for Large Redemptions," page 21.)
(7) For the purposes of processing conversions, the value of the shares
surrendered and the value of the shares acquired are the net asset
values of such shares next computed after receipt of your conversion
order.
(8) Shares MAY NOT be converted unless you have furnished Twentieth Century
with your tax identification number, certified as prescribed by the
Internal Revenue Code and Regulations. (See "Tax Identification
Number," page 16.)
(9) Conversion of shares is, for federal income tax purposes, a sale of the
shares, on which you may realize a taxable gain or loss.
(10) If the request is made by a corporation, partnership, trust, fiduciary,
agent or unincorporated association, Twentieth Century will require
evidence satisfactory to it of the authority of the individual signing
the request.
(11) Shares of Giftrust Investors may be con-verted only AFTER the Giftrust
matures because the trust is irrevocable and may not be changed in any
way prior to its maturity.
HOW TO REDEEM SHARES
Twentieth Century will buy back ("redeem") your shares at any time at
the net asset value next determined after receipt of a redemption request in
good order. (Before redeeming, please read "Special Requirements for Large
Redemptions," page 21, "Additional Information About Redemptions," page 22
and "When Share Price Is Determined," page 25.)
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Your redemption proceeds may be delayed if you have owned your shares
less than 15 days. (See "Redemption Proceeds," page 20.)
ALL REQUESTS TO REDEEM SHARES, THE PROCEEDS OF WHICH ARE TO BE PAID BY
CHECK, MADE WITHIN 30 DAYS OF OUR RECEIPT OF AN ADDRESS CHANGE (INCLUDING
REQUESTS TO REDEEM THAT ACCOMPANY AN ADDRESS CHANGE) MUST BE IN WRITING.
ADDITIONALLY, THE REQUEST MUST BE SIGNED BY EACH PERSON IN WHOSE NAME THE
SHARES ARE OWNED, AND ALL SIGNATURES MUST BE GUARANTEED. (See "Signature
Guarantee," page 20 and "How to Change Your Address of Record," page 23.)
BY TELEPHONE
If you have authorized Twentieth Century to accept telephone
instructions, you may redeem your shares by telephone. ONCE MADE, YOUR
TELEPHONE REQUEST MAY NOT BE MODIFIED OR CANCELLED.
If you call before the close of the New York Stock Exchange, usually 3
p.m. Central time, you will receive that day's closing price.
(Before calling, read "Additional Information About Redemptions," page
22.)
BY MAIL
Your written instructions to redeem shares may be in any one of the
following forms:
o A redemption form, available from Twentieth Century.
o A letter to Twentieth Century.
o An assignment form or stock power.
o An endorsement on the back of your negotiable stock certificate, if you
have one.
ONCE MAILED TO TWENTIETH CENTURY, THE REDEMPTION REQUEST IS IRREVOCABLE
AND MAY NOT BE MODIFIED OR CANCELLED.
If you have authorized Twentieth Century to accept written instructions
from any one registered owner without a signature guarantee, only one
signature is required on your written redemption request and it need not be
guaranteed.
If you have NOT elected this special service, all signatures must be
guaranteed. (See "Signature Guarantee," page 20.) The request must be signed
by each person in whose name the shares are registered; for example, in the
case of joint ownership, each owner must sign.
All signatures should be exactly as the name appears in the
registration. If the owner's name appears in the registration as Mary
Elizabeth Jones, she should sign that way and not as Mary E. Jones.
(Before writing, see "Additional Information About Redemptions," page
22.)
BY CHECK-A-MONTH
Twentieth Century's Check-A-Month plan automatically redeems enough
shares each month to provide you with a check for a minimum of $25. To set up
a Check-A-Month plan, call Twentieth Century for instructions.
Shares will be redeemed on the 20th day of each month or the next
business day, and your check will be mailed the next day. If your monthly
checks exceed the dividends, interest and capital appreciation on your
shares, the payments will deplete your investment.
Amounts paid to you by Check-A-Month are not a return on your
investment. They are derived from the redemption of shares in your account,
and you must report on your income tax return gains or losses that you
realize.
You may specify a Check-A-Month when you make your first investment. If
you order a Check-A-Month thereafter, then, as in any redemption, the request
for a Check-A-Month or any increase in amount must be signed by all owners
with their signatures guaranteed unless Twentieth Century has been authorized
to accept instructions from any one owner, by telephone or in writing without
a signature guarantee.
You may request that the Check-A-Month be sent to an address other than
the address of
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record at the time of your first investment. Thereafter, a request to send a
Check-A-Month to an address other than the address of record must be signed
by all owners, with their signatures guaranteed.
Twentieth Century may terminate the Check- A-Month at any time, upon
notice to you, and you likewise may terminate it or change the amount of the
Check-A-Month, by notice to Twentieth Century in writing or by telephone.
Termination or change will become effective within five business days
following receipt of your instruction.
Your Check-A-Month plan may begin anytime after you have owned your
shares for 15 days.
SIGNATURE GUARANTEE
When a signature guarantee is required, each signature MUST be
guaranteed by a domestic bank or trust company, credit union, broker, dealer,
national securities exchange,
registered securities association, clearing agency or savings association as
defined by federal law. The institution providing the guarantee must use a
signature guarantee ink stamp or medallion which states "Signature(s)
Guaranteed" and be signed in the name of the guarantor by an authorized
person with that person's title and the date. Twentieth Century may reject a
signature guarantee if the guarantor is not a member of or participant in a
signature guarantee program.
Shareholders living abroad may acknowledge their signatures before a
U.S. consular officer. Military personnel in foreign countries may
acknowledge their signatures before officers authorized to take
acknowledgements; e.g., legal officers and adjutants.
Twentieth Century may waive the signature guarantee on a redemption of
$5,000 or less if it is able to verify the signatures of all registered
owners from its account records. Twentieth Century reserves the right to
amend or discontinue this waiver policy at any time and, with regard to a
particular redemption transaction, to require a signature guarantee at its
discretion.
REDEMPTION PROCEEDS
Redemption proceeds may be sent to you:
BY MAIL
If your redemption check is mailed, it is usually mailed on the second
business day after receipt of your redemption request, but not later than
seven days afterwards. When a redemption occurs shortly after a recent
purchase made by check, Twentieth Century may hold the redemption proceeds
beyond seven days but only until the purchase check clears, which may take up
to 15 days or more. No interest is paid on the redemption proceeds after the
redemption and before the check is mailed. IF YOU ANTICIPATE REDEMPTIONS SOON
AFTER YOU PURCHASE YOUR SHARES, YOU ARE ADVISED TO WIRE FUNDS TO AVOID DELAY.
Except for a direct transfer of proceeds from an IRA or 403(b) to a
custodian of another IRA or 403(b), and as noted below, all checks will be
made payable to the registered owner of the shares and will be mailed only to
the ADDRESS OF RECORD.
If you would like a redemption check made payable to someone other than
the registered owner of the shares and/or mailed to an address other than the
address of record, your request to redeem must (1) be made in writing; (2)
include an instruction to make the check payable to someone other than the
registered owner of the shares and/or mail it to an address other than the
address of record; and (3) be signed by all registered owners with their
signatures guaranteed. (See "Signature Guarantee," on this page.) Redemptions
from UGMA/UTMA accounts and from certain types of retirement accounts, such
as IRA, 403(b) and qualified retirement plan accounts, will not be eligible
for this special service. If you would like to use this special service but
are not certain that a redemption from your account is eligible, please call
Twentieth Century prior to submitting your request. (See "Telephone
Services," page 22.)
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BY WIRE AND ELECTRONIC
FUNDS TRANSFER
You may authorize Twentieth Century to transmit redemption proceeds by
wire or electronic funds transfer. These services will be effective 30 days
after Twentieth Century receives the authorization.
Proceeds from the redemption of shares will normally be transmitted on
the first business day, but not later than the seventh day, following the
date of redemption.
Your bank usually will receive wired funds the day they are transmitted
or the next day. Electronically transferred funds will ordinarily be received
within one to seven days after transmission. Once the funds are transmitted,
the time of receipt and the availability of the funds are not within
Twentieth Century's control. Wired funds are subject to a charge of $10 to
cover bank wire charges, which is deducted from redemption proceeds.
If your bank account changes, you must send a new "voided" check,
preprinted with your bank registration, with written instructions, including
tax identification number. The change will be effective 30 days after receipt
by Twentieth Century.
Redemption proceeds will be transmitted by wire or electronic funds
transfer only after Twentieth Century is satisfied that checks that paid for
the shares have cleared, i.e., after 15 days have elapsed from the time of
purchase, or you have furnished Twentieth Century with satisfactory proof
that the check has been paid, such as a copy of the cancelled check. No
interest is paid on the redemption proceeds after the redemption and before
the funds are transmitted. IF YOU ANTICIPATE REDEMPTIONS WITHIN 15 DAYS AFTER
YOU PURCHASE SHARES, YOU ARE ADVISED TO WIRE FUNDS TO PAY FOR YOUR PURCHASES
TO AVOID DELAY.
SPECIAL REQUIREMENTS FOR
LARGE REDEMPTIONS
Twentieth Century has elected to be governed by Rule 18f-1 under the
Investment Company Act, which obligates each fund to redeem shares in cash,
with respect to any one shareholder during any 90-day period, up to the
lesser of $250,000 or 1% of the assets of the fund. Although redemptions in
excess of this limitation will also normally be paid in cash, Twentieth
Century reserves the right to honor these redemptions by making payment in
whole or in part in readily marketable securities (a "redemption-in-kind").
If payment is made in securities, the securities will be selected by the
fund, will be valued in the same manner as they are in computing the fund's
net asset value and will be provided to you in lieu of cash without prior
notice.
If you expect to make a large redemption and would like to avoid any
possibility of being paid in securities, you may do so by providing Twentieth
Century with an unconditional instruction to redeem at least 15 days prior to
the date on which the redemption transaction is to occur. The instruction
must specify the dollar amount or number of shares to be redeemed and the
date of the transaction. Receipt of your instruction 15 days prior to the
transaction provides the fund with sufficient time to raise the cash in an
orderly manner to pay the redemption and thereby minimizes the effect of the
redemption on the fund and its remaining shareholders.
Despite its right to redeem fund shares through a redemption-in-kind,
Twentieth Century does not expect to exercise this option unless a fund has
an unusually low level of cash to meet redemptions and/or is experiencing
unusually strong demands for its cash. Such a demand might be caused, for
example, by extreme market conditions that result in an abnormally high level
of redemption requests concentrated in a short period of time. Absent these
or similar circumstances, Twentieth Century expects redemptions in excess of
$250,000 to be paid in cash in any fund with assets of more than $50 million
if total redemptions from any one account in any 90-day period do not exceed
one-half of 1% of the total assets of the fund.
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AUTOMATIC REDEMPTION OF SHARES
If at any time you have a fund account (other than Giftrust) that falls
into either of the following categories:
(i) you invested the required minimum initial investment amount for the
fund, currently $2,500 ($1,000 for UGMA/UTMA accounts), but due to
conversions or redemptions you have made, the account now has a value of
less than the minimum initial investment amount; or
(ii) you have not invested the minimum initial investment amount, and a
$50 or greater automatic monthly investment to purchase additional
shares does not exist for the account;
a notification will be sent advising you of the need to either make an
investment to bring the value of the shares held in the account up to the
minimum initial investment amount or to establish a $50 or greater automatic
monthly investment to purchase additional shares. If the investment is not
made or the automatic monthly investment is not established within 60 days
from the date of notification, the shares held in the fund account will be
redeemed and the proceeds from the redemption will be sent by check to your
address of record.
The automatic redemption of shares will not apply to Giftrust Investors,
College Investment Program accounts in the rebalancing phase, Indivi-dual
Retirement Accounts, 403(b) accounts and other types of tax-deferred
retirement plan accounts. In addition, Twentieth Century reserves the right
to modify its policies regarding the automatic redemption of shares, or to
waive such policies in whole or in part for certain classes of investors.
ADDITIONAL INFORMATION
ABOUT REDEMPTIONS
If you experience difficulty in making a telephone redemption during
periods of drastic economic or market changes, your redemption request may be
made by regular or express mail. It will be implemented at the net asset
value next determined after your request has been received by Twentieth
Century in good order. Twentieth Century reserves the right to revise or
terminate the telephone redemption privilege at any time.
REDEMPTIONS SPECIFYING A CERTAIN DATE OR PRICE CANNOT BE ACCEPTED AND
WILL BE RETURNED.
If the shares are represented by a negotiable stock certificate, the
certificate must be returned before the redemption can be effected.
ALL REDEMPTIONS ARE MADE AND THE PRICE IS DETERMINED ON THE DAY WHEN ALL
DOCUMENTATION, PROPERLY COMPLETED, IS RECEIVED BY TWENTIETH CENTURY. (See
"When Share Price Is Determined," page 25.)
Until a Giftrust matures, only the independent trustee, as the legal
owner of the shares, may redeem them. The ability of the beneficiary to
compel the trustee to redeem the shares is subject to the terms of the
Giftrust.
If a request to redeem is made by a corporation, partnership, trust,
fiduciary, agent, or unincorporated association, Twentieth Century will
require evidence satisfactory to it of the authority of the individual
signing the request. Please call or write Twentieth Century for further
information.
A request to redeem shares in an IRA or 403(b) plan must be accompanied
by an IRS Form W-4P and a reason for withdrawal as specified by the IRS.
TELEPHONE SERVICES
INVESTORS LINE
You may reach a Twentieth Century Customer Service Representative by
calling our Investors Line at 1-800-345-2021. On our Investors Line you may
request information about our funds and a current prospectus, speak with a
Customer Service Representative about your account, or get answers to any
questions that you may have about the funds and the services we offer. In
addition, if you have authorized telephone transactions in your account, you
may have a Customer Service Representative help you with investment,
conversion and redemption transactions.
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UNUSUAL STOCK MARKET CONDITIONS HAVE IN THE PAST RESULTED IN AN INCREASE
IN THE NUMBER OF SHAREHOLDER TELEPHONE CALLS. IF YOU EXPERIENCE DIFFICULTY IN
REACHING TWENTIETH CENTURY ON THE INVESTORS LINE DURING SUCH PERIODS, YOU
SHOULD CONSIDER SENDING YOUR TRANSACTION INSTRUCTIONS BY MAIL, EXPRESS MAIL
OR COURIER SERVICE OR USING OUR AUTOMATED INFORMATION LINE, IF YOU HAVE
REQUESTED AND RECEIVED AN ACCESS CODE AND ARE NOT ATTEMPTING TO REDEEM
SHARES.
AUTOMATED INFORMATION LINE
In addition to reaching us on our Investors Line, you may also reach us
by telephone on our Automated Information Line, 24 hours a day, seven days a
week, at 1-800-345-8765. By calling the Automated Information Line, you may
listen to fund prices, yields and total return figures. You may also obtain
an access code that will allow you to use the Automated Information Line to
make investment and conversion transactions in your accounts and obtain your
share balance, value and most recent transaction. REDEMPTION TRANSACTIONS
CANNOT BE MADE ON THE AUTOMATED INFORMATION LINE. Please call our Investors
Line at 1-800-345-2021 for more information on how to obtain an access code
for our Automated Information Line.
HOW TO CHANGE YOUR ADDRESS OF RECORD
You may notify Twentieth Century of changes in your address of record
either by writing us or calling our Investors Line. Because your address of
record impacts every piece of information we send to you, you are urged to
notify us promptly of any change of address. TO PROTECT YOU AND TWENTIETH
CENTURY, ALL REQUESTS TO REDEEM SHARES, THE PROCEEDS OF WHICH ARE TO BE PAID
BY CHECK, MADE WITHIN 30 DAYS OF OUR RECEIPT OF AN ADDRESS CHANGE (INCLUDING
REQUESTS TO REDEEM THAT ACCOMPANY AN ADDRESS CHANGE) MUST BE MADE IN WRITING,
SIGNED BY EACH PERSON IN WHOSE NAME THE SHARES ARE OWNED, AND ALL SIGNATURES
MUST BE GUARANTEED. (See "Signature Guarantee," page 20.)
TAX-QUALIFIED RETIREMENT PLANS
Twentieth Century's funds are available for your tax-deferred retirement
plan. Call or write Twentieth Century and request the appropriate forms for:
o Individual Retirement Accounts (IRAs).
o 403(b) plans for employees of public school systems and non-profit
organizations.
o Profit sharing plans and pension plans for corporations and other
employers.
HOW TO TRANSFER AN INVESTMENT
TO A TWENTIETH CENTURY
RETIREMENT PLAN
It is easy to transfer your tax-deferred plan to Twentieth Century from
another company or custodian. Call or write Twentieth Century for a Request
to Transfer form.
If you direct Twentieth Century to transfer funds from an existing
non-retirement Twentieth Century account into a retirement account, the
shares in your non-retirement account will be redeemed. The redemption
proceeds will be invested in your Twentieth Century IRA or other
tax-qualified retirement plan. The redemption is a taxable event resulting in
a taxable gain or loss.
COLLEGE INVESTMENT PROGRAM
Through this special service, you can sys-tematically invest for a
child's college education. You may make automatic monthly investments in any
amount you choose (minimum of $50) in shares of Select Investors. As the
child nears college age, or another age you select, Twentieth Century will
automatically begin reallocating a predetermined percentage of your
investment
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from shares of Select Investors to shares of our money market fund, Cash
Reserve. (See Twentieth Century's Fixed Income Funds Prospectus.) The
percentage of your investment that will be reallocated is based on the number
of years over which you want the reallocation to occur. Call Twentieth
Century for additional information about this service.
HOW TO TRANSFER YOUR SHARES
TO ANOTHER PERSON
You may transfer ownership of your shares to another person or
organization by written instructions to Twentieth Century, SIGNED BY ALL
OWNERS AND WITH SIGNATURES GUARANTEED AS DESCRIBED UNDER "SIGNATURE
GUARANTEE," PAGE 20. IF THE SHARES ARE REPRESENTED BY A NEGOTIABLE STOCK
CERTIFICATE, THE CERTIFICATE MUST BE RETURNED WITH YOUR TRANSFER
INSTRUCTIONS.
REPORTS TO SHAREHOLDERS
In January of each year, Twentieth Century will send shareholders in the
common stock funds a cumulative statement of their account showing all
transactions since the beginning of the previous year. Shareholders in the
balanced fund will receive such statements, including dividend information,
at the end of each calendar quarter. You may request a statement of your
account activity at any time.
Each time you invest, redeem, transfer or convert shares, Twentieth
Century will send you a confirmation of the transaction. Carefully review all
the information relating to the transaction to ensure that your instruction
was acted on properly. Please notify Twentieth Century immediately in writing
if there is an error. If you fail to provide notification of an error within
30 days of the transaction, you will be deemed to have ratified the
transaction.
No later than January 31 of each year, Twentieth Century will send you
the following reports, which you may use in completing your U.S. income tax
return:
Form 1099-DIV Reports taxable distributions during the preceding year.
(If you did not receive taxable distributions in the
previous year, you will not receive a 1099-DIV.)
Form 1099-B Reports proceeds paid on redemptions during the preceding
year.
Form 1099-R Reports distributions from IRAs and 403(b) plans during
the preceding year.
At such time as prescribed by law, Twentieth Century will send you a
Form 5498, which reports contributions to your IRA for the previous calendar
year.
In December of each year, Twentieth Century will send you an annual
report that includes audited financial statements for the fiscal year ending
the preceding October 31 and a list of securities in its portfolios on that
date. In June of each year, Twentieth Century will send you a semiannual
report that includes unaudited financial statements for the six months ending
the preceding April 30, as well as a list of securities in its portfolios on
that date. Twentieth Century does not publish interim lists of portfolio
securities.
Twentieth Century usually prepares a new prospectus on March 1 of each
year. You will receive a current prospectus with the confirmation of your
first investment after that date.
Each year that an annual meeting is held you will receive a notice of
the annual meeting of shareholders (and of special meetings, if any) and a
proxy statement.
BECAUSE TWENTIETH CENTURY NEEDS YOUR VOTE TO CONDUCT ITS ANNUAL MEETING
OF SHAREHOLDERS, YOU ARE URGED TO RETURN YOUR PROXY.
IT IS IMPORTANT THAT YOU NOTIFY TWENTIETH CENTURY PROMPTLY OF ANY CHANGE
OF ADDRESS. (See "How to Change Your Address of Record," page 23.)
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ADDITIONAL INFORMATION YOU SHOULD KNOW
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SHARE PRICE
WHEN SHARE PRICE IS DETERMINED
The price of your shares is their net asset value next determined after
receipt of your instruction to purchase, convert or redeem. Net asset value
is determined by calculating the total value of a fund's assets, deducting
total liabilities and dividing the result by the number of shares
outstanding. Net asset value is determined on each day that the New York
Stock Exchange is open.
Investments and requests to redeem shares will receive the share price
next determined after receipt by Twentieth Century of the investment or
redemption request. For example, investments and requests to redeem shares
received by Twentieth Century before the close of business on the New York
Stock Exchange are effective on, and will receive the price determined, that
day as of the close of the Exchange. Redemption requests received thereafter
are effective on, and receive the price determined as of the close of the
Exchange on, the next day the Exchange is open.
Investments are considered received only when your check or wired funds
are received by Twentieth Century. Wired funds are considered received on the
day they are deposited in Twentieth Century's bank account if they are
deposited before the close of business on the Exchange, usually 3 p.m.
Central time.
Investments by telephone pursuant to your prior authorization to
Twentieth Century to draw on your bank account are considered received at the
time of your telephone call.
Investment and transaction instructions received by Twentieth Century on
any business day by mail at its office prior to the close of business on the
Exchange, usually 3 p.m. Central time, will receive that day's price.
Investments and instructions received after that time, will receive the price
determined on the next business day.
HOW SHARE PRICE IS DETERMINED
The valuation of assets for determining net asset value may be
summarized as follows:
The portfolio securities of each fund, except as otherwise noted, listed
or traded on a domestic securities exchange are valued at the last sale price
on that exchange. If no sale is reported, the mean of the latest bid and
asked price is used. Portfolio securities primarily traded on foreign
securities exchanges are generally valued at the preceding closing values of
such securities on the exchange where primarily traded. If no sale is
reported, or if local convention or regulation so provides, the mean of the
latest bid and asked prices is used. Depending on local convention or
regulation, securities traded over-the-counter are priced at the mean of the
latest bid and asked prices, or at the last sale price. When market
quotations are not readily available, securities and other assets are valued
at fair value as determined in good faith by the board of directors.
Debt securities not traded on a principal securities exchange are valued
through valuations obtained from a commercial pricing service or at the most
recent mean of the bid and asked prices provided by investment dealers in
accordance with procedures established by the board of directors.
Pursuant to a determination by Twentieth Century's board of directors
that such value represents fair value, debt securities with maturities of 60
days or less are valued at amortized cost. When a security is valued at
amortized cost, it is valued at its cost when purchased, and thereafter by
assuming a constant amortization to maturity of any discount or premium,
regardless of the impact of fluctuating interest rates on the market value of
the instrument.
The value of an exchange-traded foreign security is determined in its
national currency as of the close of trading on the foreign exchange on which
it is traded or as of the close of business on the New York Stock Exchange,
usually 3 p.m. Central time, if that is earlier. That value is then converted
to dollars at the prevailing foreign exchange rate.
25
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Trading in securities on European and Far Eastern securities exchanges
and over-the-counter markets is normally completed at various times before
the close of business on each day that the New York Stock Exchange is open.
If an event were to occur after the value of a security was established but
before the net asset value per share was determined that was likely to
materially change the net asset value, then that security would be valued at
fair value as determined by the board of directors. Trading of these
securities in foreign markets may not take place on every New York Stock
Exchange business day. In addition, trading may take place in various foreign
markets on Saturdays or on other days when the New York Stock Exchange is not
open and on which a fund's net asset value is not calculated. Therefore, such
calculation does not take place contemporaneously with the determination of
the prices of many of the portfolio securities used in such calculation and
the value of a fund's portfolio may be affected on days when shares of the
fund may not be purchased or redeemed.
WHERE TO FIND INFORMATION
ABOUT SHARE PRICE
The net asset values of Twentieth Century's funds are published in
leading newspapers daily. The net asset values may also be obtained by
calling Twentieth Century. (See "Telephone Services," page 22.)
DISTRIBUTIONS
In general, distributions from net investment income and net realized
securities gains, if any, are declared and paid once a year, but the funds
may make distributions on a more frequent basis to comply with the
distribution requirements of the Internal Revenue Code, in all events in a
manner consistent with the provisions of the Investment Company Act.
EQUITY FUNDS
Distributions from investment income and from net profits realized on
the sale of securities, if any, will be declared annually on or before
December 31.
THE OBJECTIVE OF THESE FUNDS IS CAPITAL APPRECIATION AND NOT THE
PRODUCTION OF DIS-TRIBUTIONS. YOU MAY MEASURE THE SUCCESS OF YOUR INVESTMENT
BY THE VALUE OF YOUR INVESTMENT AT ANY GIVEN TIME AND NOT BY THE
DISTRIBUTIONS YOU RECEIVE.
BALANCED FUND
Distributions from investment income will be paid quarterly in March,
June, September and December. Distributions from net profits realized on the
sale of securities, if any, will be paid annually on or before December 31.
GENERAL INFORMATION
ABOUT DISTRIBUTIONS
Distributions will be reinvested unless you elect to receive them in
cash. Distributions of less than $10 and distributions on shares purchased
within the last 15 days, however, will not be paid in cash and will be
reinvested. You may elect to have distributions on shares held in Individual
Retirement Accounts and 403(b) plans paid in cash only if you are 59 1/2
years old or permanently and totally disabled. Distributions on shares of
Giftrust accounts will not be paid in cash and will be reinvested.
Distribution checks normally are mailed within seven days after the record
date.
The board of directors may elect not to distribute capital gains in
whole or in part to take advantage of loss carryovers.
A distribution on shares of a fund does not increase the value of your
shares or your total return. At any given time the value of your shares
includes the undistributed net gains, if any, realized by the fund on the
sale of portfolio securities, and undistributed dividends and interest
received, less fund expenses.
26
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Because such gains and dividends are included in the value of your
shares, when they are distributed the value of your shares is reduced by the
amount of the distribution. If you buy your shares just before the
distribution, you will pay the full price for your shares, and then receive a
portion of the purchase price back as a taxable distribution. (See "Taxes,"
on this page.)
If your distribution is reinvested in additional shares, the
distribution has no effect on the value of your investment; while you own
more shares, the value of each share has been reduced by the amount of the
distribution. Likewise, if you take your distribution in cash, the value of
your shares after the record date plus the cash received is equal to the
value of the shares before the record date. For example, if your shares
immediately before the distribution have a value of $10, including $2 in
dividends and capital gains realized by the fund during the year, and if the
$2 is distributed, the value will decline to $8. If the $2 is reinvested at
$8 per share, you will receive .250 shares, so that, after the distribution,
you will have 1.250 shares at $8 per share, or $10, the same as before.
TAXES
Twentieth Century has elected to be taxed under Subchapter M of the
Internal Revenue Code, which means that to the extent its income is
distributed to shareholders it pays no income tax.
Distributions of net investment income and net short-term capital gains
are taxable to you as ordinary income. Distributions from net long-term
capital gains are taxable as long-term capital gains regardless of the length
of time you have held the shares on which such distributions are paid.
However, you should note that any loss realized upon the sale or redemption
of shares held for six months or less will be treated as a long-term capital
loss to the extent of any distribution of long-term capital gain to you with
respect to such shares.
Dividends and interest received by a fund on foreign securities may give
rise to withholding and other taxes imposed by foreign countries. Tax
conventions between certain countries and the United States may reduce or
eliminate such taxes. Foreign countries generally do not impose taxes on
capital gains in respect of investments by non-resident investors. The
foreign taxes paid by a fund will reduce its dividends.
If more than 50% of the value of a fund's total assets at the end of
each quarter of its fiscal year consists of securities of foreign
corporations, the fund may qualify for and make an election with the Internal
Revenue Service with respect to such fiscal year so that fund shareholders
may be able to claim a foreign tax credit in lieu of a deduction for foreign
income taxes paid by the fund. If such an election is made, the foreign taxes
paid by the fund will be treated as income received by you.
If a fund purchases the securities of certain foreign investment funds
or trusts called passive foreign investment companies, capital gains on the
sale of such holdings will be deemed to be ordinary income regardless of how
long the fund holds its investment. The fund may also be subject to corporate
income tax and an interest charge on certain dividends and capital gains
earned from these investments, regardless of whether such income and gains
are distributed to shareholders. In the alternative, the fund may elect to
recognize cumulative gains on such investments as of the last day of its
fiscal year and distribute it to shareholders.
Distributions are taxable to you regardless of whether they are taken in
cash or reinvested, even if the value of your shares is below your cost. If
you purchase shares shortly before a distribution, you must pay income taxes
on the distribution, even though the value of your investment (plus cash
received, if any) remains the same. In addition, the share price at the time
you purchase shares may include unrealized gains in the securities held in
the investment portfolio of the fund. If these portfolio securities are
subsequently sold and the gains are realized, they will,
27
<PAGE>
to the extent not offset by capital losses, be paid to you as a distribution
of capital gains and will be taxable to you as short-term or long-term
capital gains. (See "General Information About Distributions," on page 26.)
In January of the year following the distribution, Twentieth Century
will send you a Form 1099-DIV notifying you of the status of your
distributions for federal income tax purposes.
Distributions may also be subject to state and local taxes, even if all
or a substantial part of such distributions are derived from interest on U.S.
government obligations which, if you received them directly, would be exempt
from state income tax. However, most but not all states allow this tax
exemption to pass through to fund shareholders when a fund pays distributions
to its shareholders. You should consult your tax adviser about the tax status
of such distributions in your own state.
If you have not complied with certain provisions of the Internal Revenue
Code and Regulations, Twentieth Century is required by federal law to
withhold and remit to the IRS 31% of reportable payments (which may include
dividends, capital gains distributions and redemptions). Those regulations
require you to certify that the social security number or tax identification
number you provide is correct and that you are not subject to 31% withholding
for previous under-reporting to the IRS. You will be asked to make the
appropriate certification on your application. PAYMENTS REPORTED BY TWENTIETH
CENTURY THAT OMIT YOUR SOCIAL SECURITY NUMBER OR TAX IDENTIFICATION NUMBER
WILL SUBJECT TWENTIETH CENTURY TO A PENALTY OF $50, WHICH WILL BE CHARGED
AGAINST YOUR ACCOUNT IF YOU FAIL TO PROVIDE THE CERTIFICATION BY THE TIME THE
REPORT IS FILED, AND IS NOT REFUNDABLE. (See "Tax Identification Number,"
page 16.)
Redemption of shares of a fund will be a taxable transaction for federal
income tax purposes and shareholders will generally recognize gain or loss in
an amount equal to the difference between the basis of the shares and the
amount received. Assuming that shareholders hold such shares as a capital
asset, the gain or loss will be a capital gain or loss and will generally be
long term if shareholders have held such shares for a period of more than one
year. If a loss is realized on the redemption of fund shares, the
reinvestment in additional fund shares within 30 days before or after the
redemption may be subject to the "wash sale" rules of the Code, resulting in
a postponement of the recognition of such loss for federal income tax
purposes.
A TAX NOTE ABOUT GIFTRUST
Because it is a gift of a future interest, an investment in a Giftrust
does not qualify for the annual gift tax exclusion of $10,000. If you give a
Giftrust, you must file a United States Gift Tax Return. If you make
additional investments in subsequent years, a Gift Tax Return must be filed
for each year's gift. No gift tax is payable until your cumulative gifts
exceed the exemption equivalent of $600,000. The gift is applied against the
exemption equivalent that would otherwise be available in the future.
The income of the Giftrust is exempt from federal income tax until it
exceeds $100; the trustee of the Giftrust files federal and Missouri income
tax returns and pays the income tax out of the assets of the trust. The
distribution to the beneficiary at the maturity of the Giftrust may be
subject to the throwback rules under the Internal Revenue Code. The throwback
rules may create additional tax liability for a beneficiary who is age 21 or
older at the time the Giftrust matures. More than one trust for the same
beneficiary may be subject to the provisions of the Internal Revenue Code
with respect to multiple trusts.
The tax laws applicable to trusts in general are quite complex. You
should consider consulting your tax adviser before opening a Giftrust
account.
MANAGEMENT
Under the laws of the State of Maryland, the board of directors is
responsible for managing the business and affairs of Twentieth Century.
28
<PAGE>
Acting pursuant to an investment advisory agreement entered into with
Twentieth Century, Investors Research Corporation ("Investors Research")
serves as the investment manager of Twentieth Century. Its principal place of
business is Twentieth Century Tower, 4500 Main Street, Kansas City, Missouri
64111. Investors Research has been providing investment advisory services to
Twentieth Century since it was founded in 1958.
Investors Research supervises and manages the investment portfolios of
Twentieth Century and directs the purchase and sale of its investment
securities. Investors Research utilizes teams of portfolio managers,
assistant portfolio managers and analysts acting together to manage the
assets of the funds. The teams meet regularly to review portfolio holdings
and to discuss purchase and sale activity. The teams adjust holdings in the
funds' portfolios as they deem appropriate in pursuit of the funds'
investment objectives. Individual portfolio manager members of the team may
also adjust portfolio holdings of the funds as necessary between team
meetings.
The portfolio manager members of the teams managing the funds described
in this prospectus and their work experience for the last five years are as
follows:
James E. Stowers III, President and Portfolio Manager, joined Twentieth
Century in 1981. He is a member of the teams that manage Growth Investors,
Ultra Investors, Vista Investors and Giftrust Investors.
Robert C. Puff Jr., Executive Vice President and Chief Investment
Officer, has been a Portfolio Manager since joining Twentieth Century in
1983. In his position as Chief Investment Officer, Mr. Puff oversees the
investment activities of all of the teams that manage Twentieth Century
funds.
Charles M. Duboc, Senior Vice President and Portfolio Manager, joined
Twentieth Century in August 1985, and served as Fixed Income Portfolio
Manager from that time until April 1993. In April 1993, Mr. Duboc joined
Twentieth Century's equity investment efforts. He is a member of the team
that manages Select Investors, Heritage Investors and the equity portion of
Balanced Investors.
Christopher K. Boyd, Vice President and Portfolio Manager, joined
Twentieth Century in March 1988 as an Investment Analyst, a position he held
until December 1990. At that time he was promoted to Assistant Portfolio
Manager, and then was promoted to Portfolio Manager in December 1992. He is a
member of the team that manages Growth Investors and Ultra Investors.
Glenn A. Fogle, Vice President and Portfolio Manager, joined Twentieth
Century in September 1990 as an Investment Analyst, a position he held until
March 1993. At that time he was promoted to Portfolio Manager. He is a member
of the team that manages Vista Investors and Giftrust Investors. Prior to
September 1990, Mr. Fogle served as a consultant to Pexco, Inc.
Derek Felske, Vice President and Portfolio Manager, joined Twentieth
Century in September 1993 as a Portfolio Manager. He is a member of the team
that manages Growth Investors and Ultra Investors. Prior to joining Twentieth
Century, Mr. Felske served as a member of the portfolio management team of
RCM Capital Management, a San Francisco, California-based investment
management firm, a position he held from May 1991 to September 1993. From
September 1989 to May 1991, Mr. Felske attended the University of
Pennsylvania-Wharton School of Business, where he obtained an MBA in finance.
Nancy B. Prial, Vice President and Portfolio Manager, joined Twentieth
Century in February 1994 as a Portfolio Manager. She is a member of the team
that manages Select Investors, Heritage Investors and the equity portion of
Balanced Investors. For more than four years prior to joining Twentieth
Century, Ms. Prial served as Senior Vice President and Portfolio Manager at
Frontier Capital Management Company, Boston, Massachusetts.
Norman E. Hoops, Senior Vice President and Fixed Income Portfolio
Manager, joined
29
<PAGE>
Twentieth Century as Vice President and Portfolio Manager in November 1989.
In April 1993, he became Senior Vice President. He is a member of the team
that manages Limited-Term Bond, Intermediate-Term Bond, Long-Term Bond and
the fixed income portion of Balanced Investors.
Robert V. Gahagan, Vice President and Portfolio Manager, has worked for
Twentieth Century since May 1983. He became a Portfolio Manager in December
1991. Prior to that he served as Assistant Portfolio Manager. He is a member
of the team that manages Cash Reserve, U.S. Governments Short-Term and U.S.
Governments Intermediate-Term.
Laurie S. Kirby, Vice President and Portfolio Manager, has worked for
Twentieth Century since March 1987. She became a Portfolio Manager in
December 1991. Prior to that she served as Assistant Portfolio Manager. She
is a member of the team that manages Tax-Exempt Short-Term, Tax-Exempt
Intermediate-Term and Tax-Exempt Long-Term.
The activities of Investors Research are subject only to directions of
Twentieth Century's board of directors. Investors Research pays all the
expenses of Twentieth Century except brokerage, taxes, interest, fees and
expenses of the non-interested person directors (including counsel fees) and
extraordinary expenses.
For the services provided to Twentieth Century, Investors Research
receives an annual fee of 1% of the average net assets of each series of
shares offered by this prospectus. On the first business day of each month,
each series of shares pays a management fee to the manager for the previous
month at the rate specified. The fee for the previous month is calculated by
multiplying the applicable fee for such series by the aggregate average daily
closing value of the series' net assets during the previous month, and
further multiplying that product by a fraction, the numerator of which is the
number of days in the previous month and the denominator of which is 365 (366
in leap years).
The management fees paid by the funds to Investors Research may be
higher than that paid by many investment companies. However, most if not all
of such companies also pay in addition certain of their own expenses, while
virtually all of Twentieth Century's expenses except as specified above are
paid by Investors Research.
Twentieth Century Services, Inc., 4500 Main Street, Kansas City,
Missouri 64111, acts as transfer agent and dividend-paying agent for
Twentieth Century. It provides facilities, equipment and personnel to
Twentieth Century, and is paid for such services by Investors Research.
Certain record-keeping services that would otherwise be performed by
Twentieth Century Services, Inc., may be performed by an insurance company or
other entity providing similar services for various retirement plans using
shares of Twentieth Century as a funding medium or by broker dealers for
their customers investing in shares of Twentieth Century. Investors Research
may elect to enter into a contract to pay them for such services.
From time to time, special services may be offered to shareholders who
maintain higher share balances in the funds. These services may include the
waiver of minimum investment requirements, expedited confirmation of
shareholder transactions, newsletters and a team of personal representatives.
Any expenses associated with these special services will be paid by Investors
Research.
Investors Research and Twentieth Century Services, Inc. are both wholly
owned by Twentieth Century Companies, Inc. James E. Stowers Jr., chairman of
the board of Twentieth Century Investors, controls Twentieth Century
Companies by virtue of his ownership of a majority of its common stock.
FURTHER INFORMATION
ABOUT TWENTIETH CENTURY
Twentieth Century Investors, Inc. was organized as a Maryland
corporation on July 2, 1990. The corporation commenced operations on February
28, 1991, the date it merged with
30
<PAGE>
Twentieth Century Investors, Inc., a Delaware corporation which had been in
business since October 1958. Pursuant to the terms of the Agreement and Plan
of Merger dated July 27, 1990, the Maryland corporation was the surviving
entity and continued the business of the Delaware corporation with the same
officers and directors, the same shareholders and the same investment
objectives, policies and restrictions.
Twentieth Century is a diversified, open-end management investment
company whose shares are presently held by more than 1.5 million
shareholders. Its business and affairs are managed by its officers under the
direction of its board of directors.
The principal office of Twentieth Century is Twentieth Century Tower,
4500 Main Street, P.O. Box 419200, Kansas City, Missouri 64141-6200. All
inquiries may be made by mail to that address, or by phone to 1-800-345-2021.
(For local Kansas City area or international callers: 816-531-5575.)
Twentieth Century issues 16 series of $.01 par value shares. The assets
belonging to each series of shares are held separately by the custodian, and
in effect each series is a separate fund.
Each share, irrespective of series, is entitled to one vote for each
dollar of net asset value applicable to such share on all questions, except
for those matters which must be voted on separately by the series of shares
affected. Matters affecting only one series are voted upon only by that
series.
Shares have non-cumulative voting rights, which means that the holders
of more than 50% of the shares voting for the election of directors can elect
all of the directors if they choose to do so, and in such event the holders
of the remaining less-than-50% of the shares will not be able to elect any
person or persons to the board of directors.
Unless required by the Investment Company Act, it will not be necessary
for Twentieth Century to hold annual meetings of shareholders. As a result,
shareholders may not vote each year on the election of directors or the
appointment of auditors. However, pursuant to Twentieth Century's by-laws,
the holders of shares representing at least 10% of the votes entitled to be
cast may request Twentieth Century to hold a special meeting of shareholders.
Twentieth Century will assist in the communication with other shareholders.
TWENTIETH CENTURY RESERVES THE RIGHT TO CHANGE ANY OF ITS POLICIES,
PRACTICES AND PROCEDURES DESCRIBED IN THIS PROSPECTUS, INCLUDING THE
STATEMENT OF ADDITIONAL INFORMATION, WITHOUT SHAREHOLDER APPROVAL EXCEPT IN
THOSE INSTANCES WHERE SHAREHOLDER APPROVAL IS EXPRESSLY REQUIRED.
31
<PAGE>
Twentieth Century
Investors, Inc.
Equity Funds Prospectus
March 1, 1995
Revised June 1, 1995
[company logo]
- ------------------------------
P.O. Box 419200
- ------------------------------
Kansas City, Missouri
- ------------------------------
64141-6200
- ------------------------------
1-800-345-2021 or 816-531-5575
- ------------------------------
[company logo]
- --------------------------------------------------------------------------------
SH-BKT-3130
9505
(C) 1995 Twentieth Century Services, Inc. Recycled
<PAGE>
TWENTIETH CENTURY INVESTORS, INC.
SUPPLEMENT TO INSTITUTIONAL PROSPECTUS
Supplement dated January 2, 1996
Prospectus dated March 1, 1995
- --------------------------------------------------------------------------------
The disclosure set forth below replaces the first paragraph on page 2 of
the Institutional Prospectus:
SELECT INVESTORS AND HERITAGE INVESTORS seek capital growth. The funds
intend to pursue their investment objectives by investing primarily in common
stocks of companies that are considered by management to have
better-than-average prospects for appreciation. As a matter of fundamental
policy, 80% of the assets of Select Investors and of Heritage Investors must be
invested in securities of companies that have a record of paying dividends or
have committed themselves to the payment of regular dividends, or otherwise
produce income.
The following paragraph replaces the first paragraph under the heading
"Select Investors, Heritage Investors" on page 9 of the Institutional
Prospectus:
Securities of companies chosen for Select Investors and Heritage Investors
are chosen primarily for their growth potential. Additionally, as a matter of
fundamental policy, 80% of the assets of Select Investors and of Heritage
Investors must be invested in securities of companies that have a record of
paying dividends or have committed themselves to the payment of regular
dividends or otherwise produce income. The remaining 20% of fund assets may be
invested in any otherwise permissible securities that the manager believes will
contribute to the funds' stated investment objectives. The income payments of
equity securities chosen are only a secondary consideration; therefore, the
income return that Select and Heritage provide may not be significant.
Otherwise, Select and Heritage follow the same investment techniques described
below for Growth, Ultra and Vista.
The following paragraph replaces the third paragraph under the heading
"Select Investors, Heritage Investors" on page 9 of the Institutional
Prospectus:
Because of its size, and because it invests primarily in securities that
pay dividends or are committed to the payment of dividends, Select may be
expected to be the least volatile of the common stock funds described in this
prospectus.
The disclosure set forth below modifies the section "Management" beginning
on page 24 of the Institutional Prospectus. A new subheading titled "Investment
Management" is hereby added immediately below the heading "Management" on page
24. The following paragraph is added after the first paragraph on page 25.
In June 1995, Twentieth Century Companies, Inc. ("TCC"), the parent of
Investors Research, acquired Benham Management International, Inc. In the
acquisition, Benham Management Corporation ("BMC"), the investment adviser to
the Benham Group of Mutual Funds, became a wholly owned subsidiary of TCC.
Certain employees of BMC will be providing investment management services to
Twentieth Century funds, while certain Twentieth Century employees will be
providing investment management services to Benham funds.
<PAGE>
The following two paragraphs are added after the first paragraph on page 26
of the Institutional Prospectus.
DAVID W. SCHROEDER joined Benham in 1990. He currently maintains principal
management responsibility for nine Benham funds. Mr. Schroeder is a member of
the team that manages U.S. Governments Short-Term and U.S. Governments
Intermediate-Term.
AMY O'DONNELL joined Benham in 1987, becoming a member of its portfolio
department in 1988. In 1992 she assumed her current position as a portfolio
manager of three Benham funds. She is a member of the team that manages Cash
Reserve.
The following two paragraphs replace the sixth paragraph appearing on page
26 of the Institutional Prospectus.
CODE OF ETHICS
Twentieth Century and Investors Research have adopted a Code of Ethics (the
"Code") that restricts personal investing practices by employees of Investors
Research and its affiliates. Among other provisions, the Code requires that
employees with access to information about the purchase or sale of securities in
the funds' portfolios obtain preclearance before executing personal trades. With
respect to portfolio managers and other investment personnel, the Code prohibits
acquisition of securities in an initial public offering, as well as profits
derived from the purchase and sale of the same security within 60 calendar days.
These provisions are designed to ensure that the interests of fund shareholders
come before the interests of the people who manage those funds.
TRANSFER AND ADMINISTRATIVE SERVICES
Twentieth Century Services, Inc., 4500 Main Street, Kansas City, Missouri
64111, acts as transfer, administrative services and dividend-paying agent for
Twentieth Century. It provides facilities, equipment and personnel to Twentieth
Century, and is paid for such services by Investors Research. Certain
record-keeping services that would otherwise be performed by Twentieth Century
Services, Inc., may be performed by an insurance company or other entity
providing similar services for various retirement plans using shares of
Twentieth Century as a funding medium or by broker-dealers for their customers
investing in shares of Twentieth Century. Investors Research may elect to enter
into a contract to pay them for such services.
P.O. Box 419385
Kansas City, Missouri [company
IN-SPL-4169 64141-6385 logo]
9601 1-800-345-3533 or 816-531-5575
<PAGE>
Twentieth Century
Investors, Inc.
Institutional Prospectus
MARCH 1,
1995
Revised June 1, 1995
- --------------------------------------------------------------------------------
Twentieth Century Investors, Inc., a member of the Twentieth Century
family of funds, offers 16 no-load mutual funds covering a variety of
investment opportunities. Twelve of the funds are described in this
prospectus. The investment objectives of the funds are listed on the inside
cover of the prospectus.
NO-LOAD MUTUAL FUNDS
Twentieth Century's funds are "no-load" investments, which means there are
no sales charges or commissions. Twentieth Century has no 12b-1 plan or other
deferred sales charges.
This prospectus is intended for participants in employer-sponsored
retirement or savings plans. One or more of the funds described herein is
available as an investment option in your employer's plan. There is no minimum
investment requirement for plan participants. Other prospectuses containing
information on the funds offered by Twentieth Century and information on how
to open personal and other types of investment accounts are available by
calling Twentieth Century at the number shown at right.
This prospectus gives you information about Twentieth Century that you
should know before investing. You should read this prospectus carefully and
retain it for future reference. Additional information is included in the
statement of additional information dated March 1, 1995, and filed with the
Securities and Exchange Commission. It is incorporated in this prospectus by
reference. To obtain a copy without charge, call or write:
Twentieth Century Investors, Inc.
4500 Main Street o P.O. Box 419385
Kansas City, MO 64141-6385
1-800-345-3533
Local and international calls:
816-531-5575
Telecommunications device for the deaf:
1-800-345-1833
In Missouri: 816-753-0700
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE>
INVESTMENT OBJECTIVES OF THE FUNDS
- --------------------------------------------------------------------------------
EQUITY FUNDS
SELECT INVESTORS
HERITAGE INVESTORS
seek capital growth. The funds intend to pursue their investment objectives by
investing primarily in common stocks of companies that are considered by
management to have better-than-average prospects for appreciation. As a matter
of fundamental policy, such companies must have a record of paying or have
committed themselves to the payment of regular dividends.
GROWTH INVESTORS
ULTRA INVESTORS
VISTA INVESTORS
seek capital growth. The funds intend to pursue their investment objectives by
investing primarily in common stocks that are considered by management to have
better-than-average prospects for appreciation.
BALANCED FUND
BALANCED INVESTORS
seeks capital growth and current income. It is management's intention to
maintain approximately 60% of the fund's assets in common stocks that are
considered by management to have better-than-average prospects for
appreciation and the balance in bonds and other fixed income securities.
FIXED INCOME FUNDS
CASH RESERVE
is a money market fund which seeks to obtain maximum current income consistent
with the preservation of principal and maintenance of liquidity. The fund
intends to pursue its investment objective by investing substantially all of
its assets in a portfolio of money market instruments and maintaining a
weighted average maturity of not more than 90 days.
An investment in Cash Reserve is neither insured nor guaranteed by the
U.S. government and there can be no assurance that the fund will be able to
maintain a stable net asset value per share.
U.S. GOVERNMENTS SHORT-TERM
seeks income. The fund intends to pursue its investment objective by investing
in securities of the United States government and its agencies and maintaining
a weighted average maturity of three years or less.
U.S. GOVERNMENTS INTERMEDIATE-TERM
seeks a competitive level of income. The fund intends to pursue its investment
objective by investing in securities of the United States government and its
agencies and maintaining a weighted average maturity of three to 10 years.
LIMITED-TERM BOND
seeks income. The fund intends to pursue its investment objective by investing
in bonds and other debt obligations and maintaining a weighted average
maturity of five years or less.
INTERMEDIATE-TERM BOND
seeks a competitive level of income. The fund intends to pursue its investment
objective by investing in bonds and other debt obligations and maintaining a
weighted average maturity of three to 10 years.
LONG-TERM BOND
seeks a high level of income. The fund intends to pursue its investment
objective by investing in bonds and other debt obligations and maintaining a
weighted average maturity of 10 years or greater.
There is no assurance that the funds will achieve their respective objectives.
- --------------------------------------------------------------------------------
NO PERSON IS AUTHORIZED BY TWENTIETH CENTURY INVESTORS, INC. TO GIVE ANY
INFORMATION OR MAKE ANY REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS OR IN OTHER PRINTED OR WRITTEN MATERIAL ISSUED BY THE COMPANY, AND
YOU SHOULD NOT RELY ON ANY OTHER INFORMATION OR REPRESENTATION.
2
<PAGE>
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
Transaction and Operating Expense Table........................4
Financial Highlights...........................................5
INFORMATION REGARDING THE FUNDS
INFORMATION ABOUT INVESTMENT
POLICIES OF THE FUNDS.......................................9
Equity Funds................................................9
Select and Heritage Investors............................9
Growth, Ultra and Vista Investors........................9
Balanced Fund..............................................10
Balanced Investors......................................10
Fixed Income Funds.........................................11
Cash Reserve............................................11
U.S. Governments Short-Term.............................11
U.S. Governments Intermediate-Term......................11
Limited-Term Bond.......................................12
Intermediate-Term Bond..................................12
Long-Term Bond..........................................12
FUNDAMENTALS OF
FIXED INCOME INVESTING.....................................13
OTHER INVESTMENT PRACTICES....................................15
Portfolio Turnover.........................................15
Repurchase Agreements......................................15
Derivative Securities......................................15
Portfolio Lending..........................................16
Foreign Securities.........................................16
Forward Currency Exchange Contracts........................17
When-Issued Securities.....................................18
Rule 144A Securities.......................................18
Interest Rate Futures Contracts and
Options Thereon.........................................18
Short Sales................................................19
PERFORMANCE ADVERTISING.......................................19
HOW TO INVEST WITH TWENTIETH CENTURY
TWENTIETH CENTURY FAMILY OF FUNDS.............................21
INVESTING IN TWENTIETH CENTURY................................21
HOW TO CONVERT YOUR INVESTMENT
FROM ONE TWENTIETH CENTURY
FUND TO ANOTHER............................................21
HOW TO REDEEM SHARES..........................................21
Special Requirements for
Large Equity Fund Redemptions...........................21
TELEPHONE SERVICES............................................22
Investors Line.............................................22
Automated Information Line.................................22
ADDITIONAL INFORMATION YOU SHOULD KNOW
SHARE PRICE...................................................23
When Share Price Is Determined.............................23
How Share Price Is Determined..............................23
Where to Find Information
About Share Price.......................................24
DISTRIBUTIONS.................................................24
Equity Funds...............................................24
Balanced Fund..............................................24
Fixed Income Funds.........................................24
TAXES.........................................................24
MANAGEMENT....................................................24
FURTHER INFORMATION
ABOUT TWENTIETH CENTURY....................................26
3
<PAGE>
<TABLE>
<CAPTION>
TRANSACTION AND OPERATING EXPENSE TABLE
- -----------------------------------------------------------------------------------------------------
Intermediate- Cash Reserve,
Select, Term Bond, U.S. Governments
Heritage, U.S. Short-Term
Growth, Ultra, Governments and
Vista and Long-Term Intermediate- Limited-Term
Balanced Bond Term Bond
<S> <C> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed
on Purchases none none none none
Maximum Sales Load Imposed
on Reinvested Dividends none none none none
Deferred Sales Load none none none none
Redemption Fee none none none none
Exchange Fee none none none none
ANNUAL FUND OPERATING EXPENSES
(as a percentage of net assets)
Management Fees 1.00% .80% .75% .70%
12b-1 Fees none none none none
Other Expenses* 0.00% 0.00% 0.00% 0.00%
Total Fund Operating Expenses 1.00% .80% .75% .70%
Example
You would pay the
following expenses
on a $1,000 investment, 1 year $ 10 $ 8 $ 8 $ 7
assuming (1) a 5% annual 3 years 32 26 24 22
return and (2) redemption 5 years 55 44 42 39
at the end of
each time period: 10 years 122 99 93 87
</TABLE>
The purpose of the table is to help you understand the various costs and
expenses that you, as a shareholder, will bear directly or indirectly in
connection with an investment in the shares of Twentieth Century offered by this
prospectus. The example set forth above assumes reinvestment of all dividends
and distributions and uses a 5% annual rate of return as required by Securities
and Exchange Commission regulations.
NEITHER THE 5% RATE OF RETURN NOR THE EXPENSES SHOWN ABOVE SHOULD BE
CONSIDERED INDICATIONS OF PAST OR FUTURE RETURNS AND EXPENSES. ACTUAL RETURNS
AND EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
*Other expenses, the fees and expenses of those directors who are not
"interested persons" as defined in the Investment Company Act, were 0.0014 of
1% of average net assets for the most recent fiscal year.
4
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout the period)
- ------------------------------------------------------------------------------------------------------------------------------------
The Financial Highlights for each of the periods presented (except as noted) have been audited by Baird, Kurtz & Dobson,
independent certified public accountants, whose report thereon appears in the corporation's annual report which is incorporated by
reference into the statement of additional information. The annual report contains additional performance information and will be
available upon request and without charge.
INCOME FROM
INVESTMENT OPERATIONS DISTRIBUTIONS
----------------------------------------- ---------------------------------------------------------
Net Realized Distributions Distributions
and from Net in Excess of
Net Asset Net Unrealized Total Dividends Realized Net Realized
Value, Investment Gains from from Net Gains on Gains on
Beginning Income (Losses) on Investment Investment Security Security Total
of Period (Loss) Securities Operations Income Transactions Transactions Distributions
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Select Investors
Year Ended Oct. 31,
1985 $22.35 $ .56 $ 4.04 $ 4.60 $(.465) -- -- $ (.465)
1986 26.48 .43 9.01 9.44 (.515) -- -- (.515)
1987 35.40 .33 .80 1.13 (.380) $(3.462) -- (3.842)
1988 32.69 .64 1.37 2.01 (.481) (6.367) -- (6.848)
1989 27.85 1.10 7.74 8.84 (.707) -- -- (.707)
1990 35.98 .62 (1.29) (.67) (1.116) -- -- (1.116)
1991 34.19 .63 8.17 8.80 (.652) (1.551) -- (2.203)
1992 40.79 .53 .34 .87 (.653) (1.823) -- (2.476)
1993 39.18 .46 7.94 8.40 (.495) (1.313) $(.016) (1.824)
1994 45.76 .40 (3.59) (3.19) (.432) (4.466) -- (4.898)
Heritage Investors
Nov. 10, 1987 (inception)
through Oct. 31,
1988 $ 5.00 $.06 $1.16 $1.22 $(.013) -- -- $(.013)
Year Ended Oct. 31,
1989 6.21 .08 1.93 2.01 (.066) -- -- (.066)
1990 8.15 .10 (.94) (.84) (.065) $(.691) -- (.756)
1991 6.55 .11 2.04 2.15 (.110) -- -- (.110)
1992 8.59 .10 .72 .82 (.113) -- -- (.113)
1993 9.30 .07 2.43 2.50 (.093) (.679) -- (.772)
1994 11.03 .07 (.21) (.14) (.068) (.500) $(.006) (.574)
Growth Investors
Year Ended Oct. 31,
1985 $ 12.29 $ .17 $ 1.85 $ 2.02 $(.153) -- -- $ (.153)
1986 14.16 .12 5.37 5.49 (.182) -- -- (.182)
1987 19.47 .01 1.30 1.31 (.086) $(5.076) -- (5.162)
1988 15.62 .30 .13 .43 (.046) (3.460) -- (3.506)
1989 12.54 .08 5.14 5.22 (.320) -- -- (.320)
1990 17.44 .09 (2.05) (1.96) (.079) (.592) -- (.671)
1991 14.81 .04 8.47 8.51 (.111) (.891) -- (1.002)
1992 22.32 (.02) 1.35 1.33 (.013) -- -- (.013)
1993 23.64 .06 1.94 2.00 -- (.353) $(.013) (.366)
1994 25.27 .06 .48 .54 (.056) (2.764) (.002) (2.822)
(table continued below)
(table continued)
RATIOS/SUPPLEMENTAL DATA
-------------------------------------------------------
Ratio of Net Net
Ratio of Investment Assets,
Net Asset Operating Income End of
Value, Expenses (Loss) to Portfolio Period
End of Total to Average Average Turnover (in
Period Return(1) Net Assets Net Assets Rate thousands)
Select Investors
Year Ended Oct. 31,
1985 $26.48 20.96% 1.01% 2.5% 119% $1,142,911
1986 35.40 36.13% 1.01% 1.6% 85% 1,978,449
1987 32.69 3.47% 1.00% 1.1% 123% 2,416,527
1988 27.85 7.31% 1.00% 2.2% 140% 2,366,730
1989 35.98 32.59% 1.00% 3.4% 93% 2,720,968
1990 34.19 (2.03%) 1.00% 1.8% 83% 2,953,030
1991 40.79 27.05% 1.00% 1.7% 84% 4,163,105
1992 39.18 1.76% 1.00% 1.4% 95% 4,534,264
1993 45.76 22.20% 1.00% 1.1% 82% 5,159,963
1994 37.67 (7.37%) 1.00% 1.0% 126% 4,277,843
Heritage Investors
Nov. 10, 1987 (inception)
through Oct. 31,
1988 $ 6.21 25.75% 1.00%(2) 1.4%(2) 130%(2) $ 55,389
Year Ended Oct. 31,
1989 8.15 32.65% 1.00% 1.3% 159% 116,880
1990 6.55 (11.62%) 1.00% 1.6% 127% 198,999
1991 8.59 33.25% 1.00% 1.5% 146% 268,891
1992 9.30 9.65% 1.00% 1.1% 119% 368,651
1993 11.03 28.64% 1.00% .7% 116% 701,504
1994 10.32 (1.13%) 1.00% .7% 136% 896,763
Growth Investors
Year Ended Oct. 31,
1985 $14.16 16.64% 1.01% 1.3% 116% $ 759,874
1986 19.47 39.09% 1.01% .6% 105% 964,742
1987 15.62 9.32% 1.00% .2% 114% 1,187,933
1988 12.54 3.18% 1.00% 2.4% 143% 1,228,587
1989 17.44 42.74% 1.00% .5% 98% 1,596,571
1990 14.81 (11.72%) 1.00% .6% 118% 1,696,667
1991 22.32 60.64% 1.00% .2% 69% 3,193,381
1992 23.64 5.96% 1.00% (.1%) 53% 4,471,882
1993 25.27 8.48% 1.00% .2% 94% 4,641,187
1994 22.99 2.66% 1.00% .3% 100% 4,363,476
</TABLE>
(1) Actual total return for period indicated.
(2) Annualized.
5
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS (CONTINUED)
- ------------------------------------------------------------------------------------------------------------------------------------
INCOME FROM
INVESTMENT OPERATIONS DISTRIBUTIONS
--------------------------------------- ---------------------------------------------------------
Net Realized Distributions Distributions
and from Net in Excess of
Net Asset Net Unrealized Total Dividends Realized Net Realized
Value, Investment Gains from from Net Gains on Gains on
Beginning Income (Losses) on Investment Investment Security Security Total
of Period (Loss) Securities Operations Income Transactions Transactions Distributions
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Ultra Investors
Year Ended Oct. 31,
1985 $ 6.57 $ .01 $ .55 $ .56 -- -- -- --
1986 7.13 .00 1.94 1.94 $(.010) -- -- $ (.010)
1987 9.06 (.07) (.22) (.29) (.007) -- -- (.007)
1988 8.76 (.02) 1.38 1.36 -- $(3.258) -- (3.258)
1989 6.86 .19 2.58 2.77 -- -- -- --
1990 9.63 (.03) (.73) (.76) (.196) (.947) -- (1.143)
1991 7.73 (.03) 7.86 7.83 -- (.028) -- (.028)
1992 15.53 (.05) (.02) (.07) -- -- -- --
1993 15.46 (.09) 6.24 6.15 -- -- -- --
1994 21.61 (.03) (.42) (.45) -- -- -- --
Vista Investors
Year Ended Oct. 31,
1985 $ 4.43 $(.01) $ .27 $.26 $(.009) -- -- $ (.009)
1986 4.68 (.02) 2.22 2.20 -- -- -- --
1987 6.88 (.05) (.45) (.50) -- $(.651) -- (.651)
1988 5.73 .01 .63 .64 -- (.462) -- (.462)
1989 5.91 (.03) 2.87 2.84 (.012) -- -- (.012)
1990 8.74 (.01) (1.76) (1.77) -- (.693) -- (.693)
1991 6.28 (.02) 4.27 4.25 -- -- -- --
1992 10.53 (.04) .52 .48 -- -- -- --
1993 11.01 (.07) 1.95 1.88 -- (.641) $(.006) (.647)
1994 12.24 (.08) .45 .37 -- 1.663) (.012) (1.675)
Balanced Investors
Oct. 20, 1988 (inception)
through Oct. 31,
1988 $10.22 $.01 $(.10) $(.09) -- -- -- --
Year Ended Oct. 31,
1989 10.13 .37 1.71 2.08 $(.372) -- -- $(.372)
1990 11.84 .41 (.62) (.21) (.417) $(.320) -- (.737)
1991 10.89 .38 4.22 4.60 (.384) -- -- (.384)
1992 15.11 .33 (.23) .10 (.322) -- -- (.322)
1993 14.89 .38 1.62 2.00 (.375) -- -- (.375)
1994 16.52 .42 (.58) (.16) (.416) -- -- (.416)
(table continued below)
(table continued)
RATIOS/SUPPLEMENTAL DATA
------------------------------------------------------
Ratio of Net Net
Ratio of Investment Assets,
Net Asset Operating Income End of
Value, Expenses (Loss) to Portfolio Period
End of Total to Average Average Turnover (in
Period Return(1) Net Assets Net Assets Rate thousands)
Ultra Investors
Year Ended Oct. 31,
1985 $ 7.13 8.52% 1.01% .1% 100% $ 385,614
1986 9.06 27.22% 1.01% -- 99% 314,462
1987 8.76 (3.23%) 1.00% (.5%) 137% 235,865
1988 6.86 19.52% 1.00% (.3%) 140% 258,320
1989 9.63 40.37% 1.00% 2.2% 132% 346,593
1990 7.73 (9.02%) 1.00% (.3%) 141% 330,005
1991 15.53 101.51% 1.00% (.5%) 42% 2,147,654
1992 15.46 (.45%) 1.00% (.4%) 59% 4,275,200
1993 21.61 39.78% 1.00% (.6%) 53% 8,037,417
1994 21.16 (2.08%) 1.00% (.1%) 78% 10,344,273
Vista Investors
Year Ended Oct. 31,
1985 $ 4.68 5.84% 1.01% (.2%) 174% $ 99,371
1986 6.88 47.00% 1.01% (.3%) 121% 159,889
1987 5.73 (7.70%) 1.00% (.7%) 123% 187,272
1988 5.91 11.41% 1.00% .2% 145% 206,434
1989 8.74 48.19% 1.00% (.4%) 125% 263,876
1990 6.28 (22.17%) 1.00% (.1%) 103% 340,621
1991 10.53 67.67% 1.00% (.3%) 92% 622,140
1992 11.01 4.55% 1.00% (.4%) 87% 829,678
1993 12.24 17.71% 1.00% (.6%) 133% 847,470
1994 10.94 4.16% 1.00% (.8%) 111% 792,343
Balanced Investors
Oct. 20, 1988 (inception)
through Oct. 31,
1988 $10.13 (.88%) 1.00%(2) 4.4%(2) 99%(2) $ 2,786
Year Ended Oct. 31,
1989 11.84 20.94% 1.00% 4.2% 171% 30,156
1990 10.89 (2.10%) 1.00% 3.8% 104% 66,407
1991 15.11 42.92% 1.00% 3.1% 116% 254,884
1992 14.89 .63% 1.00% 2.4% 100% 654,123
1993 16.52 13.64% 1.00% 2.4% 95% 705,698
1994 15.94 (.93%) 1.00% 2.7% 94%(3) 703,866
(1) Actual total return for period indicated.
(2) Annualized.
(3) The portfolio turnover rate of the equity and fixed income components of
the portfolio was 109% and 66%, respectively.
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS (CONTINUED)
- ------------------------------------------------------------------------------------------------------------------------------------
INCOME FROM
INVESTMENT OPERATIONS DISTRIBUTIONS
---------------------------------------- ---------------------------------------------------------
Net Realized Distributions Distributions
and from Net in Excess of
Net Asset Net Unrealized Total Dividends Realized Net Realized
Value, Investment Gains from from Net Gains on Gains on
Beginning Income (Losses) on Investment Investment Security Security Total
of Period (Loss) Securities Operations Income Transactions Transactions Distributions
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Cash Reserve(4)
Mar. 1, 1985 (inception)
through Oct. 31,
1985 $1.00 $.05 $.002 $.05 $(.048) $(.002) -- $(.050)
Year Ended Oct. 31,
1986 1.00 .06 .001 .06 (.062) (.001) -- (.063)
1987 1.00 .06 -- .06 (.056) -- -- (.056)
1988 1.00 .07 -- .07 (.065) -- -- (.065)
1989 1.00 .08 -- .08 (.083) -- -- (.083)
1990 1.00 .07 -- .07 (.074) -- -- (.074)
1991 1.00 .06 -- .06 (.058) -- -- (.058)
1992 1.00 .04 -- .04 (.037) -- -- (.037)
1993 1.00 .02 -- .02 (.023) -- -- (.023)
1994 1.00 .03 -- .03 (.032) -- -- (.032)
U.S. Governments
Short-Term(5)
Year Ended Oct. 31,
1985 $ 9.68 $1.00 $ .27 $1.27 $(.997) -- -- $(.997)
1986 9.95 .87 .27 1.14 (.871) $(.056) -- (.927)
1987 10.16 .79 (.49) .30 (.792) (.122) -- (.914)
1988 9.55 .81 (.13) .68 (.816) -- -- (.816)
1989 9.42 .84 (.10) .74 (.843) -- -- (.843)
1990 9.32 .79 (.24) .55 (.789) -- -- (.789)
1991 9.08 .63 .33 .96 (.635) -- -- (.635)
1992 9.41 .44 .20 .64 (.441) -- -- (.441)
1993 9.61 .36 (.26) .10 (.036) -- -- (.036)
1994 9.67 .40 (.40) -- (.402) -- -- (.402)
U.S. Governments
Intermediate-Term
Mar. 1, 1994
(inception) through
Oct. 31, 1994 $10.00 $.34 $(.45) $ (.11) $(.343) -- -- $(.343)
RATIOS/SUPPLEMENTAL DATA
----------------------------------------------------
Ratio of Net Net
Ratio of Investment Assets,
Net Asset Operating Income End of
Value, Expenses (Loss) to Portfolio Period
End of Total to Average Average Turnover (in
Period Return(1) Net Assets Net Assets Rate thousands)
Cash Reserve(4)
Mar. 1, 1985 (inception)
through Oct. 31,
1985 $1.00 7.60%(2) 1.01%(2) 7.00%(2) -- $26,528
Year Ended Oct. 31,
1986 1.00 6.46% 1.01% 5.83% -- 134,958
1987 1.00 5.75% 1.00% 5.80% -- 447,917
1988 1.00 6.73% 1.00% 6.52% -- 488,781
1989 1.00 8.66% 1.00% 8.35% -- 639,115
1990 1.00 7.67% 1.00% 7.40% -- 953,687
1991 1.00 5.95% .97%(3) 5.75% -- 1,236,309
1992 1.00 3.74% .98%(3) 3.62% -- 1,487,961
1993 1.00 2.30% 1.00% 2.30% -- 1,256,012
1994 1.00 3.21% .80% 3.18% -- 1,298,982
U.S. Governments
Short-Term(5)
Year Ended Oct. 31,
1985 $ 9.95 13.68% 1.01% 10.10% 573% $ 98,847
1986 10.16 11.89% 1.01% 8.54% 464% 254,714
1987 9.55 3.14% 1.00% 8.10% 468% 335,601
1988 9.41 7.44% 1.00% 8.60% 578% 440,380
1989 9.32 8.36% 1.00% 9.10% 567% 443,475
1990 9.08 6.28% 1.00% 8.64% 620% 455,536
1991 9.41 10.99% .99%(3) 6.88% 779% 534,515
1992 9.61 6.85% .99%(3) 4.62% 391% 569,430
1993 9.67 4.45% 1.00% 3.73% 413% 511,981
1994 9.27 .07% .81% 4.17% 470% 396,753
U.S. Governments
Intermediate-Term
Mar. 1, 1994
(inception) through
Oct. 31, 1994 $9.55 (1.01%) .75%(2) 5.43%(2) 205% $6,280
(1) Actual total return for period indicated, unless otherwise noted.
(2) Annualized.
(3) Expenses are shown net of management fees waived by Investors Research Corporation for low-balance account fees collected
during period.
(4) The data presented has been restated to give effect to a 100 shares for 1 stock split in the form of a stock dividend that
occurred on November 13, 1993.
(5) The data presented has been restated to give effect to a 10 shares for 1 stock split in the form of a stock dividend that
occurred on November 13, 1993.
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS (CONTINUED)
- ------------------------------------------------------------------------------------------------------------------------------------
INCOME FROM
INVESTMENT OPERATIONS DISTRIBUTIONS
-------------------------------------- ---------------------------------------------------------
Net Realized Distributions Distributions
and from Net in Excess of
Net Asset Net Unrealized Total Dividends Realized Net Realized
Value, Investment Gains from from Net Gains on Gains on
Beginning Income (Losses) on Investment Investment Security Security Total
of Period (Loss) Securities Operations Income Transactions Transactions Distributions
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Limited-Term Bond
Mar. 1, 1994
(inception) through
Oct. 31, 1994 $10.00 $.31 $(.32) $(.01) $(.312) -- -- $(.312)
Intermediate-Term Bond
Mar. 1, 1994
(inception) through
Oct. 31, 1994 $10.00 $.34 $(.47) $(.13) $(.337) -- -- $(.337)
Long-Term Bond(4)
Mar. 2, 1987 (inception)
through Oct. 31,
1987 $10.00 $ .48 $ (1.05) $(.57) $(.475) -- -- $(.475)
Year Ended Oct. 31,
1988 8.96 .84 .23 1.07 (.836) -- -- (.836)
1989 9.18 .82 .36 1.18 (.819) -- -- (.819)
1990 9.54 .80 (.64) .16 (.796) $(.006) -- (.802)
1991 8.90 .75 .66 1.41 (.746) -- -- (.746)
1992 9.56 .63 .35 .98 (.622) -- -- (.622)
1993 9.92 .66 1.88 2.54 (.662) (1.587) -- (2.249)
1994 10.21 .58 (1.12) (.54) (.576) (.186) -- (.762)
(table continued below)
(table continued)
RATIOS/SUPPLEMENTAL DATA
----------------------------------------------------
Ratio of Net Net
Ratio of Investment Assets,
Net Asset Operating Income End of
Value, Expenses (Loss) to Portfolio Period
End of Total to Average Average Turnover (in
Period Return(1) Net Assets Net Assets Rate thousands)
Limited-Term Bond
Mar. 1, 1994
(inception) through
Oct. 31, 1994 $9.68 (.08%) 70%(2) 4.79%(2) 48% $4,375
Intermediate-Term Bond
Mar. 1, 1994
(inception) through
Oct. 31, 1994 $9.53 (1.24%) .75%(2) 5.23%(2) 48% $4,262
Long-Term Bond(4)
Mar. 2, 1987 (inception)
through Oct. 31,
1987 $8.96 (8.63%)(2) 1.00%(2) 8.10%(2) 146%(2) $9,403
Year Ended Oct. 31,
1988 9.19 12.31% 1.00% 9.15% 280% 25,788
1989 9.54 13.51% 1.00% 8.83% 216% 62,302
1990 8.90 1.93% 1.00% 8.81% 98% 77,270
1991 9.56 16.44% .96%(3) 8.06% 219% 114,342
1992 9.92 10.40% .98%(3) 6.30% 186% 154,031
1993 10.21 11.81% 1.00% 6.54% 113% 172,120
1994 8.91 (5.47%) .88% 6.07% 78% 121,012
(1) Actual total return for period indicated, unless otherwise noted.
(2) Annualized.
(3) Expenses are shown net of management fees waived by Investors Research Corporation for low-balance account fees collected
during period.
(4) The data presented has been restated to give effect to a 10 shares for 1 stock split in the form of a stock dividend that
occurred on November 13, 1993.
</TABLE>
8
<PAGE>
INFORMATION REGARDING THE FUNDS
- --------------------------------------------------------------------------------
INFORMATION ABOUT INVESTMENT
POLICIES OF THE FUNDS
Twentieth Century has adopted certain investment restrictions applicable
to the funds that are set forth in the statement of additional information.
Those restrictions, as well as the investment objectives of the funds,
identified on the inside front cover page of this prospectus, and any other
investment policies designated as "fundamental" in this prospectus or in the
statement of additional information, cannot be changed without shareholder
approval. The funds have implemented additional investment policies and
practices to guide their activities in the pursuit of their respective
investment objectives. These policies and practices, which are described
throughout this prospectus, are not designated as fundamental policies and may
be changed without shareholder approval.
The descriptions that follow are designed
to help you choose the fund that best fits your investment objectives. You may
want to pursue more than one objective by investing in more than one of these
funds.
EQUITY FUNDS
All of Twentieth Century's equity funds and the equity portion of the
portfolio of Balanced Investors seek capital growth by investing in
securities, primarily common stocks, that meet certain fundamental and
technical standards of selection and have, in the opinion of Twentieth
Century's management, better-than-average potential for appreciation. So long
as a sufficient number of such securities is available, Twentieth Century
intends to stay fully invested in these securities regardless of the movement
of stock prices generally. In most circumstances, the funds' actual level of
cash and cash equivalents will fluctuate between 0% and 10% of total assets
with 90% to 100% of its assets committed to equity and equity equivalent
investments. The funds may purchase securities only of companies that have a
record of at least three years continuous operation.
SELECT INVESTORS
HERITAGE INVESTORS
Securities of companies chosen for Select and Heritage Investors are
chosen primarily for their growth potential. Additionally, as a matter of
fundamental policy, the companies must have a record of paying, or must have
committed themselves to the payment of, regular dividends. Their income
payments are only a secondary consideration; therefore, the income return that
Select and Heritage provide may not be significant. Other-wise, Select and
Heritage follow the same investment techniques described below for Growth,
Ultra and Vista.
Since Select is one of the largest of Twentieth Century's funds and
Heritage is substantially smaller, Select will invest in shares of larger
companies with larger share trading volume, and Heritage will tend to invest
in smaller companies with smaller share trading volume. However, the two funds
are not mutually exclusive, and a given security may be owned by both funds.
For the reasons stated below under the caption "Growth, Ultra and Vista
Investors," it should be expected that Heritage will be more volatile and
subject to greater short-term risk and long-term opportunity than Select.
Because of its size, and because it can invest only in securities that
pay dividends or are committed to the payment of dividends, Select may be
expected to be the least volatile of the common stock funds described in this
prospectus.
GROWTH INVESTORS
ULTRA INVESTORS
VISTA INVESTORS
Management selects, for the portfolios of Growth, Ultra and Vista,
securities of companies whose earnings and revenue trends meet management's
standards of selection. They then determine to which of the three funds the
selected securities would most contribute.
Large, established companies are generally allocated to Growth.
Medium-sized and smaller
9
<PAGE>
companies are allocated to Ultra and Vista. As of February 1, 1995, the size
of the companies (as reflected by their capitalizations) held by the funds is
as follows:
Median Capitalization
of Companies Held
================================================================================
Growth Investors $7,658,739,000
Ultra Investors $1,946,368,000
Vista Investors $ 623,861,000
================================================================================
The median capitalization of the companies in a given fund may change
over time. In addition, the criteria outlined above are not mutually
exclusive, and a given security may be owned by more than one of the funds.
The size of the fund and of its portfolio companies tends to give each
fund its own characteristics of volatility and risk. These differences come
about because developments such as new or improved products or methods, which
would be relatively insignificant to a large portfolio company, may have a
substantial impact on the earnings and revenues of a small company and create
a greater demand and a higher value forits shares. However, a new product
failure which could readily be absorbed by a large portfolio company can cause
a rapid decline in the value of the shares of a smaller company. Hence, it
could be expected that funds investing in smaller companies would be more
volatile than funds investing in larger companies.
BALANCED FUND
BALANCED INVESTORS
Balanced Investors seeks capital growth and current income. Selection of
securities for the equity portion of its portfolio is discussed under "Equity
Funds," page 9.
Since a portion of the fund's portfolio will be invested in fixed income
securities, the opportunity for capital appreciation may be expected to be
less than with Twentieth Century's funds that invest primarily in common
stocks.
Management intends to maintain approximately 40% of the fund's assets in
fixed income securities with a minimum of 25% of that amount in fixed income
senior securities. The fixed income securities in the fund will be chosen
based on their level of income production and price stability. The fund may
invest in a diversified portfolio of debt and other fixed-rate securities
payable in United States currency. These may include obligations of the United
States government, its agencies and instrumentalities; corporate securities
(bonds, notes, preferreds and convertible issues), and sovereign government,
municipal, mortgage-backed and other asset-backed securities.
There are no maturity restrictions on the fixed income securities in
which the fund invests. Under normal market conditions the weighted average
portfolio maturity will be in the three- to 10-year range. The management will
actively manage the portfolio, adjusting the weighted average portfolio
maturity in response to expected interest rates. During periods of rising
interest rates, a shorter weighted average maturity may be adopted in order to
reduce the effect of bond price declines on the fund's net asset value. When
interest rates are falling and bond prices rising, a longer weighted average
portfolio maturity may be adopted.
It is management's intention to invest the fund's fixed income holdings
in high-grade securities. At least 80% of fixed income assets will be invested
in securities which at the time of purchase are rated within the three highest
categories by a nationally recognized statistical rating organization [at
least A by Moody's Investors Service, Inc. (Moody's) or Standard & Poor's
Corp.
(S&P)].
The remaining portion of the fixed income assets may be invested in
issues in the fourth highest category (Baa by Moody's or BBB by S&P), or, if
not rated, are of equivalent investment quality as determined by the
management and which, in the opinion of management, can contribute
meaningfully to the fund's results without compromising its objectives. Such
issues might include a lower-rated issue where research suggests the
likelihood of a rating
10
<PAGE>
increase; or a convertible issue of a company deemed attractive by the equity
management team. According to Moody's, bonds rated Baa are medium-grade and
possess some speculative characteristics. A BBB rating by S&P indicates S&P's
belief that a security exhibits a satisfactory degree of safety and capacity
for repayment, but is more vulnerable to adverse economic conditions or
changing circumstances. (See "Fundamentals of Fixed Income Investing," page 13
and "An Explanation of Fixed Income Securities Ratings" in the statement of
additional information.)
FIXED INCOME FUNDS
For an explanation of the securities ratings referred to in the
discussion of our fixed income funds, see "An Explanation of Fixed Income
Securities Ratings" in the statement of additional information.
CASH RESERVE
Cash Reserve seeks to obtain a level of current income consistent with
preservation of capital and maintenance of liquidity. Cash Reserve is designed
for investors who want income and no fluctuation in their principal.
Cash Reserve expects, but cannot guarantee, that it will maintain a
constant share price of $1.00. The fund follows industry-standard guidelines
on the quality and maturity of its investments, purchasing only securities
having remaining maturities of not more than 13 months and by maintaining a
weighted average portfolio maturity of not more than 90 days.
Cash Reserve invests substantially all of its assets in a diversified
portfolio of U.S. dollar denominated high-quality money market instruments,
consisting of:
(1) Securities issued or guaranteed by the U.S.
government and its agencies and instrumentalities. (For a description of
such securities, see "U.S. Governments Short-Term," on this page.)
(2) Commercial Paper.
(3) Certificates of Deposit and Euro Dollar Certificates of Deposit.
(4) Bankers' Acceptances.
(5) Short-term notes, bonds, debentures, or other debt instruments.
(6) Repurchase agreements.
These classes of securities may be held in any proportion, and such
proportion may vary as market conditions change.
All portfolio holdings are limited to those which at the time of purchase
have a short-term rating of A-1 by S&P or P-1 by Moody's, or if they have no
short-term rating are issued or guaranteed by an entity having a long-term
rating of at least AA by S&P or Aa by Moody's.
U.S. GOVERNMENTS SHORT-TERM
U.S. GOVERNMENTS INTERMEDIATE-TERM
These funds seek to provide a competitive level of income and limited
price volatility by investing in securities of the United States government
and its agencies.
The two funds differ in the weighted average maturities of their
portfolios and accordingly in their degree of risk and level of income.
Generally, the longer the weighted average maturity of a fund's portfolio, the
higher the yield and the greater the price volatility.
U.S. Governments Short-Term will maintain a weighted average portfolio
maturity of three years or less. The fund is designed for investors who can
accept some fluctuation in principal in order to earn a higher level of
current income than is generally available from money market securities, but
who do not want as much price volatility as is inherent in longer-term
securities.
U.S. Governments Intermediate-Term will maintain a weighted average
portfolio maturity of three to 10 years. The fund is designed for investors
seeking a higher level of current income than is generally available from
shorter-term government securities and who are willing to accept a greater
degree of price fluctuation.
11
<PAGE>
The market value of the securities in which U.S. Governments Short-Term
and U.S. Governments Intermediate-Term invest will fluctuate, and accordingly,
the value of your shares will vary from day to day. (See "Fundamentals of
Fixed Income Investing," page 13.)
Both funds may invest in (1) direct obligations of the United States,
such as Treasury bills, notes and bonds, which are supported by the full faith
and credit of the United States, and (2) obligations (including
mortgage-related securities) issued or guaranteed by agencies and
instrumentalities of the United States government that are established under
an act of Congress. The securities of some of these agencies and
instrumentalities, such as the Government National Mortgage Association, are
guaranteed as to principal and interest by the U.S. Treasury, and other
securities are supported by the right of the issuer, such as the Federal Home
Loan Banks, to borrow from the Treasury. Other obligations, including those
issued by the Federal National Mortgage Association and the Federal Home Loan
Mortgage Corporation, are supported only by the credit of the instrumentality.
Mortgage-related securities in which the funds may invest include
collateralized mortgage obligations ("CMOs") issued by a United States agency
or instrumentality. A CMO is a debt security that is collateralized by a
portfolio or pool of mortgages or mortgage-backed securities. The issuer's
obligation to make interest and principal payments is secured by the
underlying pool or portfolio of mortgages or securities.
The market value of mortgage-related securities, even those in which the
underlying pool of mortgage loans is guaranteed as to the payment of principal
and interest by the United States government, is not insured. When interest
rates rise, the market value of those securities may decrease in the same
manner as other debt, but when interest rates decline, their market value may
not increase as much as other debt instruments because of the prepayment
feature inherent in the underlying mortgages. If such securities are purchased
at a premium, the fund will suffer a loss if the obligation is prepaid.
Prepayments will be reinvested at prevailing rates, which may be less than the
rate paid by the prepaid obligation.
For the purpose of determining the weighted average portfolio maturity of
the funds, management shall consider the maturity of a mortgage-related
security to be the remaining expected average life of the security. The
average life of such securities is likely to be substantially less than the
original maturity as a result of prepayments of principal on the underlying
mortgages, especially in a declining interest rate environment. In determining
the remaining expected average life, management makes assumptions regarding
prepayments on underlying mortgages. In a rising interest rate environment,
those prepayments generally decrease, and may decrease below the rate of
prepayment assumed by management when purchasing those securities. Such
slowdown may cause the remaining maturity of those securities to lengthen,
which will increase the relative volatility of those securities and, hence,
the fund holding the securities. (See "Fundamentals of Fixed Income
Investing," page 13.)
LIMITED-TERM BOND
INTERMEDIATE-TERM BOND
LONG-TERM BOND
These funds seek to provide investors with income through investments in
bonds and other debt instruments.
The three funds differ in the weighted average maturities of their
portfolios and accordingly in their degree of risk and level of income.
Generally, the longer the weighted average maturity, the higher the yield and
the greater the price volatility.
Limited-Term Bond will invest primarily in investment grade corporate
securities and other debt instruments and will maintain, under normal market
conditions, a weighted average maturity of five years or less. The fund is
designed for investors seeking a competitive level of current income with
limited price volatility.
Intermediate-Term Bond will invest primarily in investment grade
corporate securities and other
12
<PAGE>
debt instruments and will maintain, under normal market conditions, a weighted
average maturity of three to 10 years. The fund is designed for investors
seeking a higher level of current income than is generally available from
shorter-term corporate and government securities and who are willing to accept
a greater degree of price fluctuation.
Long-Term Bond will invest primarily in investment grade corporate bonds
and other debt instruments and will, under normal market conditions, maintain
a weighted average portfolio maturity of 10 years or greater. The fund is
designed for investors whose primary goal is a level of current income higher
than is generally provided by money market or short- and intermediate-term
securities and who can accept the generally greater price volatility
associated with longer-term bonds.
The value of the shares of all three of these funds will vary from day to
day. (See "Fundamentals of Fixed Income Investing," on this page.)
Under normal market conditions, each fund will maintain at least 65% of
the value of its total assets in investment grade bonds and other debt
instruments. Under normal market conditions, each of the funds may invest up
to 35% of its assets, and for temporary defensive purposes up to 100% of its
assets, in short-term money market instruments.
Management will actively manage the portfolios, adjusting the weighted
average portfolio maturities as necessary in response to expected changes in
interest rates. During periods of rising interest rates, the weighted average
maturity of a fund may be moved to the shorter end of its maturity range in
order to reduce the effect of bond price declines on the fund's net asset
value. When interest rates are falling and bond prices rising, the weighted
average portfolio maturity may be moved toward the longer end of its maturity
range.
To achieve their objectives, the funds will invest in diversified
portfolios of high- and medium-grade debt securities payable in United States
currency. The funds will invest in securities which at the time of purchase
are rated by a nationally recognized statistical rating organization or, if
not rated, are of equivalent investment quality as determined by the
management, as follows: short-term notes within the two highest categories
(for example, at least MIG-2 by Moody's or SP-2 by S&P); corporate, sovereign
government, and municipal bonds within the four highest categories (for
example, at least Baa by Moody's or BBB by S&P); securities of the United
States government and its agencies and instrumentalities (see the U.S.
Governments funds, page 11); other types of securities rated at least P-2 by
Moody's or A-2 by S&P. According to Moody's, bonds rated Baa are medium-grade
and possess some speculative characteristics. A BBB rating by S&P indicates
S&P's belief that a security exhibits a satisfactory degree of safety and
capacity for repayment, but is more vulnerable to adverse economic conditions
or changing circumstances.
As noted, each fund may invest up to 35% of its assets, and for temporary
defensive purposes as determined by the manager, up to 100% of its assets in
short-term money market instruments. Those instruments may include:
(1) Securities issued or guaranteed by the U.S. government and its agencies
and instrumentalities;
(2) Commercial Paper;
(3) Certificates of Deposit and Euro Dollar Certificates of Deposit;
(4) Bankers' Acceptances;
(5) Short-term notes, bonds, debentures, or other debt instruments;
(6) Repurchase agreements;
and must meet the rating standards set out above. To the extent a fund assumes
a defensive position, the weighted average maturity of its portfolio may not
fall within the ranges stated above for the fund.
FUNDAMENTALS OF
FIXED INCOME INVESTING
Over time, the level of interest rates available in the marketplace
changes. As prevailing rates fall, the prices of bonds and other securities
that trade on a yield basis rise. On the other hand, when prevailing interest
rates rise, bond prices fall.
13
<PAGE>
[bar graph]
Years to Maturity
U.S. Governments Short-Term
Likely Maturities of Individual Holdings 8 years
Expected Weighted Average Portfolio Maturity Range 6 months to 4 years
U.S. Governments Intermediate-Term
Likely Maturities of Individual Holdings 20 years
Expected Weighted Average Portfolio Maturity Range 4 to 10 years
Cash Reserve
Likely Maturities of Individual Holdings 1 year
Expected Weighted Average Portfolio Maturity Range 0 to 6 months
Limited-Term Bond
Likely Maturities of Individual Holdings 8 years
Expected Weighted Average Portfolio Maturity Range 6 months to 5 years
Intermediate-Term Bond
Likely Maturities of Individual Holdings 20 years
Expected Weighted Average Portfolio Maturity Range 4 to 10 years
Long-Term Bond
Likely Maturities of Individual Holdings 30 years
Expected Weighted Average Portfolio Maturity Range 10 to 20 years
- --------------------------------------------------------------------------------
[bar graph]
Authorized Quality Ranges
U.S. Governments Short-Term AAA
U.S. Governments Intermediate-Term AAA
Cash Reserve AA to AAA
A-1
P-1
MIG-1
SP-1
Limited-Term Bond BBB to AAA
A-1 to A-2
P-1 to P-2
MIG-1 to MIG-2
SP-1 to SP-2
Intermediate-Term Bond BBB to AAA
A-1 to A-2
P-1 to P-2
MIG-1 to MIG-2
SP-1 to SP-2
Long-Term Bond BBB to AAA
A-1 to A-2
P-1 to P-2
MIG-1 to MIG-2
SP-1 to SP-2
- --------------------------------------------------------------------------------
[line graph}
Historical Yields
[Data points for line graph showing historical yields for 30-Year Treasury Bonds
and 3-Month Treasury Bills for the period 1/1/90 to 1/1/95]
3-Month Treasury Bills
Qtr. ended Yield
3/90 8.04%
6/90 7.99%
9/90 7.35%
12/90 6.64%
3/91 5.93%
6/91 5.69%
9/91 5.25%
12/91 3.96%
3/92 4.14%
6/92 3.65%
9/92 2.74%
12/92 3.14%
3/93 2.96%
6/93 3.08%
9/93 2.98%
12/93 3.06%
3/94 3.55%
6/94 4.22%
9/94 4.77%
12/94 5.69%
30-Year Treasury Bonds
Qtr. ended Yield
3/90 8.63%
6/90 8.40%
9/90 8.95%
12/90 8.25%
3/91 8.25%
6/91 8.41%
9/91 7.81%
12/91 7.40%
3/92 7.96%
6/92 7.78%
9/92 7.38%
12/92 7.40%
3/93 6.93%
6/93 6.67%
9/93 6.02%
12/93 6.35%
3/94 7.09%
6/94 7.61%
9/94 7.82%
12/94 7.88%
- --------------------------------------------------------------------------------
BOND PRICE VOLATILITY
For a given change in interest rates, longer
maturity bonds experience a greater change in price,
as shown below:
Price of a 7% Price of same
coupon bond bond if its Percent
Years to now trading yield increases change
Maturity to yield 7% to 8% in price
--------------------------------------------------
1 year $100.00 $99.06 (0.94%)
3 years 100.00 97.38 (2.62%)
10 years 100.00 93.20 (6.80%)
30 years 100.00 88.69 (11.31%)
- --------------------------------------------------------------------------------
Generally, the longer the maturity of a debt security, the higher its
yield and the greater its price volatility. Conversely, the shorter the
maturity, the lower the yield but the greater the price stability.
These factors operating in the marketplace have a similar impact on bond
portfolios. A change in the level of interest rates causes the net asset value
per share of any bond fund, except money market funds, to change. If sustained
over time, it would also have the impact of raising or lowering the yield of
the fund.
In addition to the risk arising from fluctuating interest rate levels,
debt securities are subject to credit risk. When a security is purchased, its
anticipated yield is dependent on the timely payment by the borrower of each
interest and principal installment. Credit analysis and resultant bond ratings
take into account the relative likelihood that such timely payment will occur.
As a result, lower-rated bonds tend to sell at higher yield levels than
top-rated bonds of similar maturity. In addition, as economic, political and
business developments unfold, lower-quality bonds, which possess lower levels
of protection with regard to timely payment, usually exhibit more price
fluctuation than do higher-quality bonds of like maturity.
The investment practices of Twentieth Century's fixed income funds and
the fixed income portion of the balanced fund take into account these
relationships. The maturity and asset quality of each fund have implications
for the degree of price volatility and the yield level to be expected from
each.
14
<PAGE>
OTHER INVESTMENT PRACTICES
For additional information, see "Investment Restrictions Applicable to
All Series of Shares" in the statement of additional information.
PORTFOLIO TURNOVER
The total portfolio turnover rates of the funds, except Cash Reserve, are
shown in the Financial Highlights table on pages 5 to 8 of this prospectus.
With respect to each series of shares, investment decisions to purchase
and sell securities are based on the anticipated contribution of the security
in question to the particular fund's objectives. The rate of portfolio
turnover is irrelevant when management believes a change is in order to
achieve those objectives and accordingly, the annual portfolio turnover rate
cannot be anticipated.
The portfolio turnover of each fund may be higher than other mutual funds
with similar investment objectives. A high turnover rate involves
correspondingly higher transaction costs that are borne directly by a fund. It
may also affect the character of capital gains, if any, realized and
distributed by a fund since short-term capital gains are taxable as ordinary
income.
REPURCHASE AGREEMENTS
Each fund may invest in repurchase agreements when such transactions
present an attractive short-term return on cash that is not otherwise
committed to the purchase of securities pursuant to the investment policies of
that fund.
A repurchase agreement occurs when, at the time the fund purchases an
interest-bearing obligation, the seller (a bank or a broker-dealer registered
under the Securities Exchange Act of 1934) agrees to repurchase it on a
specified date in the future at an agreed-upon price. The repurchase price
reflects an agreed-upon interest rate during the time the fund's money is
invested in the security.
Since the security purchased constitutes security for the repurchase
obligation, a repurchase agreement can be considered a loan collaterized by
the security purchased. The fund's risk is the ability of the seller to pay
the agreed-upon repurchase price on the repurchase date. If the seller
defaults, the fund may incur costs in disposing of the collateral, which would
reduce the amount realized thereon. If the seller seeks relief under the
bankruptcy laws, the disposition of the collateral may be delayed or limited.
To the extent the value of the security decreases, the fund could experience a
loss.
The funds will limit repurchase agreement transactions to securities
issued by the United States government, its agencies and instrumentalities,
and will enter into such transactions with those banks and securities dealers
who are deemed creditworthy pursuant to criteria adopted by the funds' board
of directors.
Each of the funds may invest in repurchase agreements with respect to any
security in which that fund is authorized to invest, even if the remaining
maturity of the underlying security would make that security ineligible for
purchase by such fund. No fund will invest more than 15% (10% in the case of
Cash Reserve) of its assets in repurchase agreements maturing in more than
seven days.
DERIVATIVE SECURITIES
To the extent permitted by its investment objectives and policies, each
of the funds may invest in securities that are commonly referred to as
"derivative" securities. Certain derivative securities are more accurately
described as "index/structured" securities. Index/structured securities are
derivative securities whose value or performance is linked to other equity
securities (such as Depositary Receipts, discussed under "Foreign Securities,"
page 16), currencies, interest rates, indexes or other financial indicators
("reference indexes"). No fund may invest in an index/structured security
unless the reference index or the instrument to which it relates is an
eligible investment for the fund. For example, a bond whose interest rate was
indexed to the return on two-year treasury securities would be a permissible
investment (assuming it met the other
15
<PAGE>
requirements for a fund), while a bond whose return was indexed to the price
of oil would not be a permissible investment.
The return, interest rate or, unlike most fixed income securities, the
principal amount payable at maturity of an index/structured security may be
increased or decreased, depending upon changes in the reference index.
Index/structured securities may be positively or negatively indexed. That
means that an increase in the reference index may produce an increase or
decrease in the return, interest rate or value at maturity of the security.
No purchases will be made of index/structured securities having
"leverage" characteristics. This means that no investments will be made in
securities whose change in return, interest rate or value at maturity is a
multiple of the change in the reference index. In no event will an
index/structured security be purchased if its addition to a fixed income
fund's portfolio, or to the fixed income portion of Balanced Investors, would
cause the expected interest rate characteristics of such fund to fall outside
the expected interest rate characteristics of a fund having the same
permissible weighted average portfolio maturity range that does not invest in
index/structured securities.
Because their performance is tied to a reference index, a fund investing
in index/structured securities, in addition to being exposed to the credit
risk of the issuer of the security, will also bear the market risk of changes
in the reference index.
The board of directors has approved management's policy regarding
investments in derivative securities. That policy specifies factors that must
be considered in connection with the purchase of derivative securities. The
policy also establishes a committee that must review certain proposed
purchases before the purchases can be made. Management will report on fund
activity in derivative securities to the board of directors as necessary. In
addition, the board will review management's policy for investments in
derivative securities annually.
PORTFOLIO LENDING
In order to realize additional income, each fund may lend its portfolio
securities to persons not affiliated with it and who are deemed to be
creditworthy. Such loans must be secured continuously by cash collateral
maintained on a current basis in an amount at least equal to the market value
of the securities loaned, or by irrevocable letters of credit. During the
existence of the loan, the fund must continue to receive the equivalent of the
interest and dividends paid by the issuer on the securities loaned and
interest on the investment of the collateral. The fund must have the right to
call the loan and obtain the securities loaned at any time on five days'
notice, including, if applicable, the right to call the loan to enable
Twentieth Century to vote the securities. Such loans may not exceed one-third
of the fund's net assets taken at market. Interest on loaned securities may
not exceed 10% of the annual gross income of the fund (without offset for
realized capital gains). The portfolio lending policy described in this
paragraph is a fundamental policy that may be changed only by a vote of
Twentieth Century's shareholders.
Twentieth Century is indemnified against loss on the loans by United
States Trust Company of New York.
FOREIGN SECURITIES
Each of Twentieth Century's funds offered by this prospectus, except U.S.
Governments Short-Term and U.S. Governments Intermediate-Term may invest an
unlimited amount of its assets in the securities of foreign issuers, primarily
from developed markets, when these securities meet its standards of selection.
The funds may make such investments either directly in, or by purchasing
Depositary Receipts ("DRs") for foreign securities. DRs are listed on an
exchange or quoted in the over-the-counter market in one country but represent
the shares of issuers domiciled in other countries. DRs may be sponsored or
unsponsored. Direct investments in foreign securities may be made either on
foreign securities exchanges or in the over-the-counter markets.
Subject to their individual investment objectives and policies, the funds
may invest in common stocks, convertible securities, preferred stocks, bonds,
16
<PAGE>
notes and other debt securities of foreign issuers, and debt securities of
foreign governments and their agencies. The funds will limit their purchase of
debt securities to investment grade obligations.
Investments in foreign securities may present certain risks, including
those resulting from fluctuations in currency exchange rates, future political
and economic developments, reduced availability of public information
concerning issuers, and the fact that foreign issuers are not generally
subject to uniform accounting, auditing and financial reporting standards or
to other regulatory practices and requirements comparable to those applicable
to domestic issuers.
FORWARD CURRENCY
EXCHANGE CONTRACTS
Some of the foreign securities held by the funds may be denominated in
foreign currencies. Other securities, such as DRs, may be denominated in U.S.
dollars, but have a value that is dependent on the performance of a foreign
security, as valued in the currency of its home country. As a result, the
value of the funds' portfolios may be affected by changes in the exchange
rates between foreign currencies and the dollar, as well as by changes in the
market values of the securities themselves. The performance of foreign
currencies relative to the dollar may be a factor in the overall performance
of the funds.
To protect against adverse movements in exchange rates between
currencies, the funds may, for hedging purposes only, enter into forward
currency exchange contracts. A forward currency exchange contract obligates
the fund to purchase or sell a specific currency at a future date at a
specific price.
A fund may elect to enter into a forward currency exchange contract with
respect to a specific purchase or sale of a security, or with respect to the
fund's portfolio positions generally.
By entering into a forward currency exchange contract with respect to the
specific purchase or sale of a security denominated in a foreign currency, a
fund can "lock in" an exchange rate between the trade and settlement dates for
that purchase or sale. This practice is sometimes referred to as "transaction
hedging." Each fund may enter into transaction hedging contracts with respect
to all or a substantial portion of its foreign securities trades.
When the manager believes that a particular currency may decline in value
compared to the dollar, a fund may enter into forward currency exchange
contracts to sell the value of some or all of the fund's portfolio securities
either denominated in, or whose value is tied to, that currency. This practice
is sometimes referred to as "portfolio hedging." A fund may not enter into a
portfolio hedging transaction where it would be obligated to deliver an amount
of foreign currency in excess of the aggregate value of its portfolio
securities or other assets denominated in, or whose value is tied to, that
currency.
Each fund will make use of the portfolio hedging to the extent deemed
appropriate by the manager. However, it is anticipated that a fund will enter
into portfolio hedges much less frequently than transaction hedges.
If a fund enters into a forward contract, the fund, when required, will
instruct its custodian bank to segregate cash or liquid high-grade securities
in a separate account in an amount sufficient to cover its obligation under the
contract. Those assets will be valued at market daily, and if the value of the
segregated securities declines, additional cash or securities will be added so
that the value of the account is not less than the amount of the fund's
commitment. At any given time, no more than 10% of a fund's assets will be
committed to a segregated account in connection with portfolio hedging
transactions.
Predicting the relative future values of currencies is very difficult,
and there is no assurance that any attempt to protect a fund against adverse
currency movements through the use of forward currency exchange contracts will
be successful. In addition, the use of forward currency exchange contracts
tends to limit the potential gains that might result from a positive change in
the relationships between the foreign currency and the U.S. dollar.
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WHEN-ISSUED SECURITIES
Each of the funds may sometimes purchase new issues of securities on a
when-issued basis without limit when, in the opinion of the manager, such
purchases will further the investment objectives of the fund. The price of
when-issued securities is established at the time commitment to purchase is
made. Delivery of and payment for these securities typically occur 15 to 45
days after the commitment to purchase. Market rates of interest on debt
securities at the time of delivery may be higher or lower than those
contracted for on the when-issued security. Accordingly, the value of such
security may decline prior to delivery, which could result in a loss to the
fund. A separate account for each fund consisting of cash or high-quality
liquid debt securities in an amount at least equal to the when-issued
commitments will be established and maintained with the custodian. No income
will accrue to the fund prior to delivery.
RULE 144A SECURITIES
Cash Reserve will not invest more than 10% of its assets, while each of
the other funds will not invest more than 15% of its assets in illiquid
securities (securities that may not be sold within seven days at approximately
the price used in determining the net asset value of fund shares), including
restricted securities. Although securities which may be resold only to
qualified institutional buyers in accordance with the provisions of Rule 144A
under the Securities Act of 1933 are considered "restricted securities," each
fund may purchase Rule 144A securities without regard to the percentage limits
described above when those securities present an attractive investment
opportunity and otherwise meet Twentieth Century's criteria of selection.
With respect to securities eligible for resale under Rule 144A, the staff
of the Securities and Exchange Commission has taken the position that the
liquidity of such securities in the portfolio of a fund offering redeemable
securities is a question of fact for the board of directors to determine, such
determination to be based upon a consideration of the readily available
trading markets and the review of any contractual restrictions. Accordingly,
the board of directors is responsible for developing and establishing the
guidelines and procedures for determining the liquidity of Rule 144A
securities. As allowed by Rule 144A, the board of directors of Twentieth
Century has delegated the day-to-day function of determining the liquidity of
Rule 144A securities to the manager. The board retains the responsibility to
monitor the implementation of the guidelines and procedures it has adopted.
Since the secondary market for such securities is limited to certain
institutional investors, the liquidity of such securities may be limited
accordingly and a fund may from time to time hold a Rule 144A security that is
illiquid. In such an event, Twentieth Century will consider appropriate
remedies to minimize the effect on the fund's liquidity.
INTEREST RATE FUTURES CONTRACTS
AND OPTIONS THEREON
The corporate bond funds may buy and sell interest rate futures contracts
relating to debt securities ("debt futures," i.e., futures relating to debt
securities, and "bond index futures," i.e., futures relating to indexes on
types or groups of bonds) and write and buy put and call options relating to
interest rate futures contracts.
For options sold, a fund will segregate cash or high-quality debt
securities equal to the value of securities underlying the option unless the
option is otherwise covered.
A fund will deposit in a segregated account with its custodian bank
high-quality debt obligations maturing in one year or less, or cash, in an
amount equal to the fluctuating market value of long futures contracts it has
purchased, less any margin deposited on its long position. It may hold cash or
acquire such debt obligations for the purpose of making these deposits.
A fund will purchase or sell futures contracts and options thereon only
for the purpose of hedging against changes in the market value of its
portfolio securities or changes in the market value of securities that it may
wish to include in its
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portfolio. A fund will enter into future and option transactions only to the
extent that the sum of the amount of margin deposits on its existing futures
positions and premiums paid for related options do not exceed 5% of its
assets.
Since futures contracts and options thereon can replicate movements in
the cash markets for the securities in which a fund invests without the large
cash investments required for dealing in such markets, they may subject a fund
to greater and more volatile risks than might otherwise be the case. The
principal risks related to the use of such instruments are (1) the offsetting
correlation between movements in the market price of the portfolio investments
(held or intended) being hedged and in the price of the futures contract or
option may be imperfect; (2) possible lack of a liquid secondary market for
closing out futures or option positions; (3) the need for additional portfolio
management skills and techniques; and (4) losses due to unanticipated market
price movements. For a hedge to be completely effective, the price change of
the hedging instrument should equal the price change of the securities being
hedged. Such equal price changes are not always possible because the
investment underlying the hedging instrument may not be the same investment
that is being hedged.
Management will attempt to create a closely correlated hedge but hedging
activity may not be completely successful in eliminating market value
fluctuation. The ordinary spreads between prices in the cash and futures
markets, due to the differences in the natures of those markets, are subject
to distortion. Due to the possibility of distortion, a correct forecast of
general interest rate trends by the management may still not result in a
successful transaction. Management may be incorrect in its expectations as to
the extent of various interest rate movements or the time span within which
the movements take place. (See the statement of additional information for
further information about these instruments and their risks.)
SHORT SALES
Twentieth Century's funds described in this prospectus may engage in
short sales if, at the time of the short sale, the fund owns or has the right
to acquire an equal amount of the security being sold short at no additional
cost. These transactions allow a fund to hedge against price fluctuations by
locking in a sale price for securities it does not wish to sell immediately.
A fund may make a short sale when it wants to sell the security it owns
at a current attractive price, but also wishes to defer recognition of gain or
loss for federal income tax purposes and for purposes of satisfying certain
tests applicable to regulated investment companies under the Internal Revenue
Code.
PERFORMANCE ADVERTISING
From time to time, Twentieth Century may advertise performance data. Fund
performance may be shown by presenting one or more performance measurements,
including cumulative total return or average annual total return and, with
respect to the fixed income funds and the balanced fund, yield and effective
yield.
Cumulative total return data is computed by considering all elements of
return, including reinvestment of dividends and capital gains distributions,
over a stated period of time. Average annual total return is determined by
computing the annual compound return over a stated period of time that would
have produced a fund's cumulative total return over the same period if the
fund's performance had remained constant throughout.
A quotation of yield reflects a fund's income over a stated period
expressed as a percentage of the fund's share price. In the case of Cash
Reserve, yield is calculated by measuring the income generated by an
investment in the fund over a seven-day period (net of fund expenses). This
income is then "annualized." That is, the amount of income generated by the
investment over the seven-day period is assumed to be generated over each
similar period each week throughout a full year and is shown as a percentage
of the investment. The "effective yield" is calculated in a similar manner
but, when annualized,
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the income earned by the investment is assumed to be reinvested. The effective
yield will be slightly higher than the yield because of the compounding effect
of the assumed reinvestment.
With respect to Twentieth Century's other fixed income funds and Balanced
Investors, yield is calculated by adding over a 30-day (or one-month) period
all interest and dividend income (net of fund expenses) calculated on each
day's market values, dividing this sum by the average number of fund shares
outstanding during the period, and expressing the result as a percentage of
the fund's share price on the last day of the 30-day (or one-month) period.
The percentage is then annualized. Capital gains and losses are not included
in the calculation.
Yields are calculated according to accounting methods that are
standardized in accordance with SEC rules for all stock and bond funds.
Because yield accounting methods differ from the methods used for other
accounting purposes, the fund's yield may not equal the income paid on your
shares or the income reported in the fund's financial statements.
The funds may also include in advertisements data comparing performance
with the performance of non-related investment media, published editorial
comments and performance rankings compiled by independent organizations (such
as Lipper Analytical Services or Donoghue's Money Fund Report) and
publications that monitor the performance of mutual funds. Performance
information may be quoted numerically or may be presented in a table, graph or
other illustration. In addition, fund performance may be compared to
well-known indices of market performance, including the Standard & Poor's
(S&P) 500 Index, the Dow Jones Industrial Average, Donoghue's Money Fund
Average and the Bank Rate Monitor National Index of 2 1/2-year CD rates. Fund
performance may also be compared to other funds in the Twentieth Century
family. It may also be combined or blended with other funds in the Twentieth
Century family, and that combined or blended performance may be compared to
the same indices to which individual funds may be compared.
All performance information advertised by the funds is historical in
nature and is not intended to represent or guarantee future results. The value
of fund shares when redeemed may be more or less than their original cost.
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HOW TO INVEST WITH TWENTIETH CENTURY
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TWENTIETH CENTURY FAMILY OF FUNDS
In addition to the 16 funds offered by Twentieth Century Investors, Inc.,
the Twentieth Century family of funds also includes funds offered by Twentieth
Century World Investors, Inc., Twentieth Century Premium Reserves, Inc. and
Twentieth Century Capital Portfolios, Inc. Please call the Investors Line for
a prospectus and additional information about the other funds in the Twentieth
Century family of funds.
INVESTING IN TWENTIETH CENTURY
One or more of the funds offered by this prospectus is available as an
investment option in your employer-sponsored retirement or savings plan. All
orders to purchase shares must be made through your employer. The
administrator of your plan or your employee benefits office can provide you
with information on how to participate in your plan and how to select a
Twentieth Century fund as an investment option.
If you have questions about a fund, see "Information About Investment
Policies of the Funds," page 9, or call Twentieth Century's Investors Line at
1-800-345-3533.
Orders to purchase shares are effective on the day Twentieth Century
receives payment. (See "When Share Price is Determined," page 23.)
Twentieth Century may discontinue offering shares generally in the funds
or in any particular state without notice to shareholders.
HOW TO CONVERT YOUR
INVESTMENT FROM ONE TWENTIETH
CENTURY FUND TO ANOTHER
Your plan may permit you to exchange ("convert") your investment from the
shares of a fund to shares of another fund. See your plan administrator or
employee benefits office for details on the rules in your plan governing
conversions, or call Twentieth Century's Investors Line at 1-800-345-3533.
Conversions will be accepted by Twentieth Century only as permitted by your
plan.
Conversions are made at the respective net asset values, next computed
after receipt of the conversion instruction by Twentieth Century. If in any
90-day period, the total of the conversions and redemptions from any one plan
participant's accounts in the equity funds or the balanced fund exceeds the
lesser of $250,000 or 1% of a fund's assets, further conversions will be
subject to special requirements to comply with Twentieth Century's policy on
large equity fund redemptions. (See "Special Requirements for Large Equity
Fund Redemptions," on this page.)
HOW TO REDEEM SHARES
Subject to any restrictions imposed by your employer's plan, you can sell
("redeem") your shares through the plan at their net asset value. Your plan
administrator, trustee, or other designated person must provide Twentieth
Century with redemption instructions. The shares will be redeemed at the net
asset value next computed after receipt of the instructions in good order.
(See, "When Share Price Is Determined," page 23.) If you have any questions
about how to redeem, contact your plan administrator or your employee benefits
office.
SPECIAL REQUIREMENTS FOR
LARGE EQUITY FUND REDEMPTIONS
Twentieth Century has elected to be governed by Rule 18f-1 under the
Investment Company Act, which obligates each fund to redeem shares in cash,
with respect to any one participant account during any 90-day period, up to
the lesser of $250,000 or 1% of the assets of the fund. Although redemptions
in excess of this limitation will also normally be paid in cash, Twentieth
Century reserves the right to honor these redemptions by making payment in
whole or in part in readily
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marketable securities (a "redemption-in-kind"). If payment is made in
securities, the securities will be selected by the fund, will be valued in the
same manner as they are in computing the fund's net asset value and will be
provided to the redeeming plan participant in lieu of cash without prior
notice.
If you expect to make a large redemption and would like to avoid any
possibility of being paid in securities, you may do so by providing Twentieth
Century with an unconditional instruction to redeem at least 15 days prior to
the date on which the redemption transaction is to occur. The instruction must
specify the dollar amount or number of shares to be redeemed and the date of
the transaction. Receipt of your instruction 15 days prior to the transaction
provides the fund with sufficient time to raise the cash in an orderly manner
to pay the redemption and thereby minimizes the effect of the redemption on
the fund and its remaining shareholders.
Despite its right to redeem fund shares through a redemption-in-kind,
Twentieth Century does not expect to exercise this option unless a fund has an
unusually low level of cash to meet redemptions and/or is experiencing
unusually strong demands for its cash. Such a demand might be caused, for
example, by extreme market conditions that result in an abnormally high level
of redemption requests concentrated in a short period of time. Absent these or
similar circumstances, Twentieth Century expects redemptions in excess of
$250,000 to be paid in cash in any fund with assets of more than $50 million
if total redemptions from any one account in any 90-day period do not exceed
one-half of 1% of the total assets of the fund.
The special policies with respect to large redemptions described above
apply only to the equity funds and the balanced fund. Redemptions from the
fixed income funds will be paid in cash regardless of the redemption amount.
TELEPHONE SERVICES
INVESTORS LINE
You may reach a Twentieth Century Customer Service Representative by
calling our Investors Line at 1-800-345-3533. On our Investors Line you may
request information about our funds and a current prospectus, or get answers
to any questions that you may have about the funds and the services we offer.
AUTOMATED INFORMATION LINE
In addition to reaching us on our Investors Line, you may also reach us
by telephone on our Automated Information Line, 24 hours a day, seven days a
week, at 1-800-345-8765. By calling the Automated Information Line you may
listen to fund prices, yields and total return figures.
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ADDITIONAL INFORMATION YOU SHOULD KNOW
- --------------------------------------------------------------------------------
SHARE PRICE
WHEN SHARE PRICE IS DETERMINED
The price of your shares is their net asset value next determined after
receipt of your instruction to purchase, convert or redeem. Net asset value is
determined by calculating the total value of a fund's assets, deducting total
liabilities and dividing the result by the number of shares outstanding. Net
asset value is determined on each day that the New York Stock Exchange is
open.
Investments and requests to redeem shares will receive the share price
next determined after receipt by Twentieth Century or its authorized agent of
the investment or redemption request. For example, investments and requests to
redeem shares received by Twentieth Century or its authorized agent before the
close of business on the New York Stock Exchange, usually 3 p.m. Central time,
are effective on, and will receive the price determined, that day as of the
close of the Exchange. Redemption requests received thereafter are effective
on, and receive the price determined as of the close of the Exchange on, the
next day the Exchange is open.
HOW SHARE PRICE IS DETERMINED
The valuation of assets for determining net asset value may be summarized
as follows:
The portfolio securities of each fund, except as otherwise noted, listed
or traded on a domestic securities exchange are valued at the last sale price
on that exchange. If no sale is reported, the mean of the latest bid and asked
price is used. Portfolio securities primarily traded on foreign securities
exchanges are generally valued at the preceding closing values of such
securities on the exchange where primarily traded. If no sale is reported, or
if local convention or regulation so provides, the mean of the latest bid and
asked prices is used. Depending on local convention or regulation, securities
traded over-the-counter are priced at the mean of the latest bid and asked
prices, or at the last sale price. When market quotations are not readily
available, securities and other assets are valued at fair value as determined
in good faith by the board of directors.
Debt securities not traded on a principal securities exchange are valued
through valuations obtained from a commercial pricing service or at the most
recent mean of the bid and asked prices provided by investment dealers in
accordance with procedures established by the board of directors.
Pursuant to a determination by Twentieth Century's board of directors
that such value represents fair value, debt securities with maturities of 60
days or less are valued at amortized cost. When a security is valued at
amortized cost, it is valued at its cost when purchased, and thereafter by
assuming a constant amortization to maturity of any discount or premium,
regardless of the impact of fluctuating interest rates on the market value of
the instrument.
The value of an exchange-traded foreign security is determined in its
national currency as of the close of trading on the foreign exchange on which
it is traded or as of the close of business on the New York Stock Exchange,
usually 3 p.m. Central time, if that is earlier. That value is then converted
to dollars at the prevailing foreign exchange rate.
Trading in securities on European and Far Eastern securities exchanges
and over-the-counter markets is normally completed at various times before the
close of business on each day that the New York Stock Exchange is open. If an
event were to occur after the value of a security was established but before
the net asset value per share was determined that was likely to materially
change the net asset value, then that security would be valued at fair value
as determined by the board of directors. Trading of these securities in
foreign markets may not take place on every New York Stock Exchange business
day. In addition, trading may take place in various foreign markets on
Saturdays or on other days when the New York Stock Exchange is not open and on
which a fund's net asset value is not calculated. Therefore, such calculation
does not take place contemporaneously with the determination of the prices of
many of the portfolio securities used in such calculation and the value of a
fund's portfolio may be affected on days when shares of the fund may not be
purchased or redeemed.
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WHERE TO FIND INFORMATION
ABOUT SHARE PRICE
The net asset values of Twentieth Century's funds are published in
leading newspapers daily. The yield of Cash Reserve is published weekly in
leading financial publications and daily in many local newspapers. The net
asset values, as well as yield information on all of Twentieth Century's fixed
income funds, may be obtained by calling Twentieth Century. (See "Telephone
Services," page 22.)
DISTRIBUTIONS
In general, distributions from net investment income and net realized
securities gains, if any, generally are declared and paid once a year, but the
funds may make distributions on a more frequent basis to comply with the
distribution requirements of the Internal Revenue Code, in all events in a
manner consistent with the provisions of the Investment Company Act.
EQUITY FUNDS
Distributions from investment income and from net profits realized on the
sale of securities, if any, will be declared annually on or before December
31.
THE OBJECTIVE OF THESE FUNDS IS CAPITAL APPRECIATION AND NOT THE
PRODUCTION OF DISTRIBUTIONS. YOU MAY MEASURE THE SUCCESS OF YOUR INVESTMENT BY
THE VALUE OF YOUR INVESTMENT AT ANY GIVEN TIME AND NOT BY THE DISTRIBUTIONS
YOU RECEIVE.
BALANCED FUND
Distributions from investment income will be paid quarterly in March,
June, September and December. Distributions from net profits realized on the
sale of securities, if any, will be paid annually on or before December 31.
FIXED INCOME FUNDS
At the close of each day, including Saturdays, Sundays and holidays, net
income of the fixed income funds is determined and declared as a distribution.
The distribution will be paid monthly on the last Friday of each month.
You will begin to participate in the distributions the day AFTER your
purchase is effective. (See "When Share Price is Determined," page 23.) If you
redeem shares, you will receive the distribution declared for the day of the
redemption.
Any net realized capital gains of the fixed income funds other than Cash
Reserve will be distributed at least annually on or before December 31.
Realized gains on securities in the Cash Reserve portfolio may be paid with
the daily dividend. Otherwise, they will be distributed annually after
October 31 and before December 31.
TAXES
Twentieth Century has elected to be taxed under Subchapter M of the
Internal Revenue Code, which means that because Twentieth Century distributes
all of its income, it pays no income taxes.
If you choose to use one or more of Twentieth Century's funds as an
investment option in your employer-sponsored retirement or savings plan,
income and capital gains distributions paid by the funds will generally not be
subject to current taxation, but will accumulate in your account under the
plan on a tax-deferred basis.
Employer-sponsored retirement and savings plans are governed by complex
tax rules. If you elect to participate in your employer's plan, consult your
plan administrator, your plan's summary plan description, or a professional
tax adviser regarding the tax consequences of participation in the plan,
contributions to, and withdrawals or distributions from the plan.
MANAGEMENT
Under the laws of the State of Maryland, the board of directors is
responsible for managing the business and affairs of Twentieth Century. Acting
pursuant to an investment advisory agreement entered into with Twentieth
Century, Investors
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Research Corporation ("Investors Research") serves as the investment manager
of Twentieth Century. Its principal place of business is Twentieth Century
Tower, 4500 Main Street, Kansas City, Missouri 64111. Investors Research has
been providing investment advisory services to Twentieth Century since it was
founded in 1958.
Investors Research supervises and manages the investment portfolios of
Twentieth Century and directs the purchase and sale of its investment
securities. Investors Research utilizes teams of portfolio managers, assistant
portfolio managers and analysts acting together to manage the assets of the
funds. The teams meet regularly to review portfolio holdings and to discuss
purchase and sale activity. The teams adjust holdings in the funds' portfolios
as they deem appropriate in pursuit of the funds' investment objectives.
Individual portfolio manager members of the team may also adjust portfolio
holdings of the funds as necessary between team meetings.
The portfolio manager members of the teams managing the funds described
in this prospectus and their work experience for the last five years are as
follows:
James E. Stowers III, President and Portfolio Manager, joined Twentieth
Century in 1981. He is a member of the teams that manage Growth Investors,
Ultra Investors and Vista Investors.
Robert C. Puff Jr., Executive Vice President and Chief Investment
Officer, has been a Portfolio Manager since joining Twentieth Century in 1983.
In his position as Chief Investment Officer, Mr. Puff oversees the investment
activities of all of the teams that manage Twentieth Century funds.
Charles M. Duboc, Senior Vice President and Portfolio Manager, joined
Twentieth Century in August 1985, and served as Fixed Income Portfolio Manager
from that time until April 1993. In April 1993, Mr. Duboc joined Twentieth
Century's equity investment efforts. He is a member of the team that manages
Select Investors, Heritage Investors and the equity portion of Balanced
Investors.
Christopher K. Boyd, Vice President and Portfolio Manager, joined
Twentieth Century in March 1988 as an Investment Analyst, a position he held
until December 1990. At that time he was promoted to Assistant Portfolio
Manager, and then was promoted to Portfolio Manager in December 1992. He is a
member of the team that manages Growth Investors and Ultra Investors.
Glenn A. Fogle, Vice President and Portfolio Manager, joined Twentieth
Century in September 1990 as an Investment Analyst, a position he held until
March 1993. At that time he was promoted to Portfolio Manager. He is a member
of the team that manages Vista Investors. Prior to September 1990, Mr. Fogle
served as a consultant to Pexco, Inc.
Derek Felske, Vice President and Portfolio Manager, joined Twentieth
Century in September 1993 as a Portfolio Manager. He is a member of the team
that manages Growth Investors and Ultra Investors. Prior to joining Twentieth
Century, Mr. Felske served as a member of the portfolio management team of RCM
Capital Management, a San Francisco, California-based investment management
firm, a position he held from May 1991 to September 1993. From September 1989
to May 1991, Mr. Felske attended the University of Pennsylvania-Wharton School
of Business, where he obtained an MBA in finance.
Nancy B. Prial, Vice President and Portfolio Manager, joined Twentieth
Century in February 1994 as a Portfolio Manager. She is a member of the team
that manages Select Investors, Heritage Investors and the equity portion of
Balanced Investors. For more than four years prior to joining Twentieth
Century, Ms. Prial served as Senior Vice President and Portfolio Manager at
Frontier Capital Management Company, Boston, Massachusetts.
Norman E. Hoops, Senior Vice President and Fixed Income Portfolio
Manager, joined Twentieth Century as Vice President and Portfolio Manager in
November 1989. In April 1993, he became Senior Vice President. He is a member
of the team that manages Limited-Term Bond, Intermediate-Term Bond, Long-Term
Bond and the fixed income portion of Balanced Investors.
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Robert V. Gahagan, Vice President and Portfolio Manager, has worked for
Twentieth Century since May 1983. He became a Portfolio Manager in December
1991. Prior to that he served as Assistant Portfolio Manager. He is a member
of the team that manages Cash Reserve, U.S. Governments Short-Term and U.S.
Governments Intermediate-Term.
The activities of Investors Research are subject only to directions of
Twentieth Century's board of directors. Investors Research pays all the
expenses of Twentieth Century except brokerage, taxes, interest, fees and
expenses of the non-interested person directors (including counsel fees) and
extraordinary expenses.
For the services provided to Twentieth Century, Investors Research
receives an annual fee at the following rates:
o 1% of the average net assets of Select, Heritage, Growth, Ultra, Vista
and Balanced;
o .80 of 1% of Long-Term Bond;
o .75 of 1% of the average net assets of U.S. Governments Intermediate-Term
and Intermediate-Term Bond; and
o .70 of 1% of the average net assets of Limited-Term Bond, Cash Reserve
and U.S. Governments Short-Term.
On the first business day of each month, each series of shares pays a
management fee to the manager for the previous month at the rate specified.
The fee for the previous month is calculated by multiplying the applicable fee
for such series by the aggregate average daily closing value of the series'
net assets during the previous month, and further multiplying that product by
a fraction, the numerator of which is the number of days in the previous month
and the denominator of which is 365 (366 in leap years).
The management fees paid by the funds to Investors Research may be higher
than that paid by many investment companies. However, most if not all of such
companies also pay in addition certain of their own expenses, while virtually
all of Twentieth Century's expenses except as specified above are paid by
Investors Research.
Twentieth Century Services, Inc., 4500 Main Street, Kansas City, Missouri
64111, acts as transfer agent and dividend paying agent for Twentieth Century.
It provides facilities, equipment and personnel to Twentieth Century, and is
paid for such services by Investors Research. Certain recordkeeping services
that would otherwise be performed by Twentieth Century Services, Inc. may be
performed by an insurance company or other entity providing similar services
for various retirement plans using shares of Twentieth Century as a funding
medium or by broker dealers for their customers investing in shares of
Twentieth Century. Investors Research may elect to enter into a contract to
pay them for such services.
From time to time, special services may be offered to shareholders who
maintain higher share balances in the funds. These services may include the
waiver of minimum investment requirements, expedited confirmation of
shareholder transactions, newsletters and a team of personal representatives.
Any expenses associated with these special services will be paid by Investors
Research.
Investors Research and Twentieth Century Services, Inc. are both wholly
owned by Twentieth Century Companies, Inc. James E. Stowers Jr., chairman of
the board of Twentieth Century Investors, controls Twentieth Century Companies
by virtue of his ownership of a majority of its common stock.
FURTHER INFORMATION
ABOUT TWENTIETH CENTURY
Twentieth Century Investors, Inc. was organized as a Maryland corporation
on July 2, 1990. The corporation commenced operations on February 28, 1991,
the date it merged with Twentieth Century Investors, Inc., a Delaware
corporation which had been in business since October 1958. Pursuant to the
terms of the Agreement and Plan of Merger dated July 27, 1990, the Maryland
corporation was the surviving
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entity and continued the business of the Delaware corporation with the same
officers and directors, the same shareholders and the same investment
objectives, policies and restrictions.
Twentieth Century is a diversified, open-end management investment
company whose shares are presently held by more than 1.5 million shareholders.
Its business and affairs are managed by its officers under the direction of
its board of directors.
The principal office of Twentieth Century is Twentieth Century Tower,
4500 Main Street, P.O. Box 419200, Kansas City, Missouri 64141-6200. All
inquiries may be made by mail to that address, or by phone to 1-800-345-3533.
(For local Kansas City area or international callers: 816-531-5575.)
Twentieth Century issues 16 series of $.01 par value shares. The assets
belonging to each series of shares are held separately by the custodian, and
in effect each series is a separate fund.
Each share, irrespective of series, is entitled to one vote for each
dollar of net asset value applicable to such share on all questions, except
those matters which must be voted on separately by the series of shares
affected. Matters affecting only one series are voted upon only by that
series.
Shares have non-cumulative voting rights, which means that the holders of
more than 50% of the shares voting for the election of directors can elect all
of the directors if they choose to do so, and in such event the holders of the
remaining less-than-50% of the shares will not be able to elect any person or
persons to the board of directors.
Unless required by the Investment Company Act, it will not be necessary
for Twentieth Century to hold annual meetings of shareholders. As a result,
shareholders may not vote each year on the election of directors or the
appointment of auditors. However, pursuant to Twentieth Century's bylaws, the
holders of shares representing at least 10% of the votes entitled to be cast
may request Twentieth Century to hold a special meeting of shareholders.
Twentieth Century will assist in the communication with other shareholders.
TWENTIETH CENTURY RESERVES THE RIGHT TO CHANGE ANY OF ITS POLICIES,
PRACTICES AND PROCEDURES DESCRIBED IN THIS PROSPECTUS, INCLUDING THE STATEMENT
OF ADDITIONAL INFORMATION, WITHOUT SHAREHOLDER APPROVAL EXCEPT IN THOSE
INSTANCES WHERE SHAREHOLDER APPROVAL IS EXPRESSLY REQUIRED.
27
<PAGE>
Twentieth Century
Investors, Inc.
Institutional Prospectus
March 1, 1995
Revised June 1, 1995
[company logo]
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P.O. Box 419385
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Kansas City, Missouri
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64141-6385
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1-800-345-3533 or 816-531-5575
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[company logo]
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IN-BKT-3131
9505
(C) 1995 Twentieth Century Services, Inc. Recycled
