AMERICAN CENTURY MUTUAL FUNDS
AMERICAN CENTURY WORLD MUTUAL FUNDS
PROSPECTUS SUPPLEMENT
Twentieth Century Growth o Twentieth Century Select o Twentieth Century Ultra
o Twentieth Century Vista o Twentieth Century Heritage o Twentieth Century New
Opportunities o American Century Balanced o Benham Cash Reserve o Twentieth
Century Giftrust o Benham Bond o Benham Limited-Term Bond o Benham
Intermediate-Term Bond o Twentieth Century International Growth o Twentieth
Century International Discovery
SUPPLEMENT DATED MAY 16, 1997
Prospectus dated March 1, 1997, for American Century Mutual Funds
Prospectus dated April 1, 1997, for American Century World Mutual Funds
ANNUAL MEETING OF SHAREHOLDERS
The Board of Trustees has requested that the following matters be submitted to
shareholders of the funds for approval at the Annual Meeting of Shareholders to
be held on July 30, 1997:
1. To elect a Board of Directors of nine members;
2. To vote on the approval of a Management Agreement with American Century
Investment Management, Inc.;
3. To ratify the selection of Deloitte & Touche LLP as independent auditors;
4. To approve the adoption of standardized fundamental investment limitations;
5. To approve the amendment of a fundamental investment policy of the
Twentieth Century Heritage Fund; and
6. To transact such other business which may come before the meeting, although
we are not aware of any other items to be considered.
The record date for the meeting is May 16, 1997. If you own shares of the funds
as of the close of business on that date, you will be entitled to vote at the
meeting. Proxy materials containing more information about these proposals are
expected to be first sent to shareholders on June 2, 1997. If approved by
shareholders, the Management Agreement in Proposal 2 and the amendments to the
funds` fundamental investment limitations would become effective on August 1,
1997.
FURTHER INFORMATION ABOUT PROPOSAL 2
The proposed Management Agreement is only slightly different from the current
Management Agreement. First, the proposed Management Agreement will reduce the
fee for the Benham Cash Reserve Fund and change the fee schedule for the
Twentieth Century International Growth and Twentieth Century International
Discovery Funds to reflect voluntary fee waivers by ACIM which have been in
effect since August 1, 1996. The proposed Management Agreement does not change
fees payable by the remaining funds. The proposed Management Agreement also
formalizes an agreement between the funds and ACIM with respect to the fund
names.
FURTHER INFORMATION ABOUT PROPOSAL 4
Currently the funds have fundamental investment restrictions which vary between
funds and those of other funds in the American Century family. The funds also
have investment restrictions which reflect legal and other requirements which
are no longer applicable to the funds. In the interests of efficiency in fund
management and compliance, the fund management has analyzed the fundamental
investment limitations and policies of the funds in an effort to formulate a
standard set of policies for all funds which reflect current industry practice
and will allow the funds to respond to changes in regulatory and industry
practice without the expense and delay of a shareholder vote. It should be noted
that the adoption of the proposed changes is not expected to substantially
affect the way the funds are managed.
FURTHER INFORMATION ABOUT PROPOSAL 5
Shareholders are considering a proposal to increase, from 20% to 40%, the
percentage of fund assets that can be invested in nondividend-paying companies.
Management and the Directors believe that this proposal will allow the fund to
own a broader variety of investments while retaining its primary concentration
on firms paying cash dividends.
P.O. Box 419200 [american century logo]
Kansas City, Missouri American
64141-6200 Century(sm)
1-800-345-2021 or 816-531-5575
SH-SPL-8784 9705
<PAGE>
AMERICAN CENTURY CAPITAL PORTFOLIOS
AMERICAN CENTURY PREMIUM RESERVES
PROSPECTUS SUPPLEMENT
American Century Equity Income
American Century Value
Benham Premium Bond
Benham Premium Government Reserve
Benham Premium Capital Reserve
SUPPLEMENT DATED MAY 16, 1997
Prospectuses dated September 3, 1996 (revised January 1, 1997)
ANNUAL MEETING OF SHAREHOLDERS
The Board of Trustees has requested that the following matters be submitted to
shareholders of the Funds for approval at the Annual Meeting of Shareholders to
be held on July 30, 1997:
1. To elect a Board of Directors of nine members;
2. To vote on the approval of a Management Agreement with American Century
Investment Management, Inc.;
3. To ratify the selection of Deloitte & Touche LLP as independent auditors;
4. To approve the adoption of standardized fundamental investment limitations;
and
6. To transact such other business which may come before the meeting, although
we are not aware of any other items to be considered.
Proposal 5 does not apply to the funds offered by these Prospectuses. The record
date for the meeting is May 16, 1997. If you own shares of the funds as of the
close of business on that date, you will be entitled to vote at the meeting.
Proxy materials containing more information about these proposals are expected
to be first sent to shareholders on June 2, 1997. If approved by shareholders,
the Management Agreement in Proposal 2 and the amendments to the funds'
fundamental investment limitations would become effective on August 1, 1997.
FURTHER INFORMATION ABOUT PROPOSAL 2
While the Proposed Management Agreement is slightly different from the current
Management Agreement, it does not change fees payable by the funds offered by
this Prospectus. The only substantive change with respect to the funds offered
by this Prospectus is that the Management Agreement formalizes an agreement
between the funds and ACIM with respect to the fund names.
FURTHER INFORMATION ABOUT PROPOSAL 4
Currently the funds have fundamental investment restrictions which vary between
funds and those of other funds in the American Century family. The funds also
have investment restrictions which reflect legal and other requirements which
are no longer applicable to the funds. In the interests of efficiency in fund
management and compliance, the fund management has analyzed the fundamental
investment limitations and policies of the funds in an effort to formulate a
standard set of policies for all funds which reflect current industry practice
and will allow the funds to respond to changes in regulatory and industry
practice without the expense and delay of a shareholder vote. It should be noted
that the adoption of the proposed changes is not expected to substantially
affect the way the funds are managed.
P.O. Box 419200 [american century logo]
Kansas City, Missouri American
64141-6200 Century(sm)
1-800-345-2021 or 816-531-5575
SH-SPL-8785 9705
<PAGE>
AMERICAN CENTURY STRATEGIC ASSET ALLOCATIONS
PROSPECTUS SUPPLEMENT
American Century Strategic Allocation: Conservative
American Century Strategic Allocation: Moderate
American Century Strategic Allocation: Aggressive
SUPPLEMENT DATED MAY 16, 1997
Prospectus dated April 1, 1997
ANNUAL MEETING OF SHAREHOLDERS
The Board of Trustees has requested that the following matters be submitted to
shareholders of the funds for approval at the Annual Meeting of Shareholders to
be held on July 30, 1997:
1. To elect a Board of Directors of nine members;
2. To vote on the approval of a Management Agreement with American Century
Investment Management, Inc.;
3. To ratify the selection of Deloitte & Touche LLP as independent auditors;
4. To approve the adoption of standardized fundamental investment limitations;
and
6. To transact such other business which may come before the meeting, although
we are not aware of any other items to be considered.
Proposal 5 does not apply to the funds offered by this Prospectus. The record
date for the meeting is May 16, 1997. If you own shares of the funds as of the
close of business on that date, you will be entitled to vote at the meeting.
Proxy materials containing more information about these proposals are expected
to be first sent to shareholders on June 2, 1997. If approved by shareholders,
the Management Agreement in Proposal 2 and the amendments to the funds'
fundamental investment limitations would become effective on August 1, 1997.
FURTHER INFORMATION ABOUT PROPOSAL 2
While the proposed Management Agreement is slightly different from the current
Management Agreement, it does not change fees payable by the funds offered by
this Prospectus. The only substantive change with respect to the funds offered
by this Prospectus is that the Management Agreement formalizes an agreement
between the funds and ACIM with respect to the fund names.
FURTHER INFORMATION ABOUT PROPOSAL 4
Currently the funds have fundamental investment restrictions which vary between
funds and those of other funds in the American Century family. The funds also
have investment restrictions which reflect legal and other requirements which
are no longer applicable to the funds. In the interests of efficiency in fund
management and compliance, the fund management has analyzed the fundamental
investment limitations and policies of the funds in an effort to formulate a
standard set of policies for all funds which reflect current industry practice
and will allow the funds to respond to changes in regulatory and industry
practice without the expense and delay of a shareholder vote. It should be noted
that the adoption of the proposed changes is not expected to substantially
affect the way the funds are managed.
P.O. Box 419200 [american century logo]
Kansas City, Missouri American
64141-6200 Century(sm)
1-800-345-2021 or 816-531-5575
SH-SPL-8786 9705
<PAGE>
AMERICAN CENTURY MUTUAL FUNDS
PROSPECTUS SUPPLEMENT
Short-Term Government
Intermediate-Term Government
SUPPLEMENT DATED May 16, 1997
Prospectus dated September 3, 1996
Revised January 1, 1997
The Board of Directors of the funds offered by this Prospectus has unanimously
agreed to enter into an Agreement and Plan of Reorganization with the American
Century Government Income Trust. The Agreement provides for the consolidation of
these funds with other American Century funds that have similar investment
objectives and policies. The Short-Term Government Fund would transfer its
assets to the Adjustable Rate Government Securities Fund and the
Intermediate-Term Government Fund would transfer its assets to the
Intermediate-Term Treasury Fund. Although the Adjustable Rate Government
Securities Fund (the ARM Fund) sounds like it may be somewhat different than the
Short-Term Government Fund, the ARM Fund must change its name and investment
policies to match those of the Short-Term Government Fund as a condition to that
reorganization. The proposed consolidation of funds will not decrease the dollar
value of any shareholder's account. The fund combinations are contingent upon
shareholder approval.
The Board of Directors has requested that the Agreement be submitted to
shareholders for approval at a Special Meeting of Shareholders to be held on
July 30, 1997. The record date for the meeting is May 16, 1997. If you own
shares of the Short-Term Government Fund or the Intermediate-Term Government
Fund as of the close of business on that date, you will be entitled to vote on
the reorganization at that meeting. Proxy materials containing more information
about the proposed reorganizations are expected to be first sent to shareholders
on June 2, 1997. If the reorganization is approved, it is expected to occur on
September 2, 1997. A decision regarding an investment in these funds should be
made in light of these proposed reorganizations.
[american century logo]
American
Century(sm)
P.O. Box 419200 o Kansas City, Missouri 64141-6200
Person-to-person assistance:
1-800-345-2021 ext. 4001 or 816-531-5575
www.americancentury.com
American Century Investment Services, Inc.
(C) 1997 American Century Services Corporation
SH-SPL-8437 9705
<PAGE>
AMERICAN CENTURY MANAGER FUNDS
PROSPECTUS SUPPLEMENT
Capital Manager
SUPPLEMENT DATED May 16, 1997
Prospectus dated April 1, 1997
The Board of Trustees of Capital Manager has unanimously agreed to enter into an
Agreement and Plan of Reorganization with the American Century Strategic Asset
Allocations, Inc. The Agreement provides for the consolidation of this fund with
another American Century fund, the Strategic Allocation: Conservative Fund, a
fund which has similar investment objectives and policies. The proposed
consolidation will not decrease the dollar value of any shareholder's account.
The fund combination is contingent upon shareholder approval.
The Board of Trustees has requested that the Agreement be submitted to
shareholders for approval at a Special Meeting of Shareholders to be held on
July 30, 1997. The record date for the meeting is May 16, 1997. If you own
shares of Capital Manager as of the close of business on that date, you will be
entitled to vote on the reorganization at that meeting. Proxy materials
containing more information about the proposed reorganization are expected to be
first sent to shareholders on June 2, 1997. If the reorganization is approved,
it is expected to occur on September 2, 1997. A decision regarding an investment
in the fund should be made in light of this proposed reorganization.
[american century logo]
American
Century(sm)
P.O. Box 419200 o Kansas City, Missouri 64141-6200
Person-to-person assistance:
1-800-345-2021or 816-531-5575
www.americancentury.com
American Century Investment Services, Inc.
(C) 1997 American Century Services Corporation
SH-SPL-8438 9705
<PAGE>
AMERICAN CENTURY INTERNATIONAL BOND FUNDS
PROSPECTUS SUPPLEMENT
European Government Bond
SUPPLEMENT DATED MAY 16, 1997
Prospectus dated May 1, 1997
SPECIAL MEETING OF SHAREHOLDERS
The Board of Trustees has requested that the following matters be submitted to
shareholders of European Government Bond for approval at a Special Meeting of
Shareholders to be held on July 30, 1997, to consider the following proposals:
1. To ratify the selection of Coopers & Lybrand LLP as the independent
auditors of the Fund for its current fiscal year;
2. To vote on the approval of a Management Agreement with American Century
Investment Management, Inc.;
3. To approve the adoption of standardized investment limitations by amending
or eliminating certain of the Fund's current fundamental investment
limitations;
4. To vote on the approval of a Subadvisory Agreement with J.P. Morgan
Investment Management Inc.;
6. To vote on the approval of amendments to the Fund's fundamental investment
objective; and
7. To transact such other business which may come before the meeting, although
we are not aware of any other items to be considered.
Proposal 5 does not apply to the fund offered by this Prospectus. The record
date for the meeting is May 16, 1997. If you own shares of the Fund as of the
close of business on that date, you will be entitled to vote at the meeting.
Proxy materials containing more information about these proposals are expected
to be first sent to shareholders on June 2, 1997. If approved by shareholders,
the Management Agreement in Proposal 2, the amendments to the Fund's fundamental
investment limitations in Proposal 3 and the Subadvisory Agreement in Proposal 4
would each become effective on August 1, 1997. Proposal 6, the proposed changes
to the Fund's investment objective, would become effective on October 1, 1997.
FURTHER INFORMATION ABOUT PROPOSAL 2
The proposed Management Agreement with American Century Investment Management,
Inc. ("ACIM") is substantially different from the Fund's current Advisory
Agreement with Benham Management Corporation ("BMC"). The most important change
is a difference in the way management fees are calculated under the proposed
agreement. Rather than paying separate investment advisory fees, transfer agency
fees, and operating costs, it is proposed that the Fund pays one "unified" fee
which would cover not just the investment advisory fee, but nearly all expenses
of the Fund. The expenses covered under the unified fee would include fees for
administrative services, transfer agency services, custodian fees, printing and
mailing costs for shareholder materials and shareholder meeting expenses, all of
which are charged to the Fund under the current arrangements with BMC. While the
fees paid under the proposed Management Agreement are not directly comparable to
those of the Fund's current agreements with its service providers, the effect of
the proposed Management Agreement would have been a net decrease in total
expenses paid by all of the American Century funds as a group if the proposed
Management Agreement had been in effect during the 12 months ended December 31,
1996. If the proposed Management Agreement had been in effect during such
period, the total expense ratio of the Fund would have been higher. However, the
total expense ratio of the Fund under the proposed Management Agreement is lower
than the maximum total expense ratio payable under the current Advisory
Agreement.
If the proposed Management Agreement is approved, the investment management of
the Fund will not change in any way. Certain employees of ACIM currently provide
investment management services to the Funds through an arrangement with BMC by
which certain employees of BMC also provide investment management services to
funds managed by ACIM. If the proposed Management Agreement is approved, ACIM
intends to consolidate the investment management capabilities of the two
advisors in ACIM. The same investment teams that currently manage the Fund will
continue under the proposed Management Agreement with ACIM.
The table below depicts the effect of the proposed Management Agreement on the
Fund for the 12 month period ended December 31, 1996:
After Expense Reimbursements
- ----------------------------------------------------------------------
Management Fee Other Expenses Total Expenses
Current Proposed Current Proposed Current Proposed
- ----------------------------------------------------------------------
0.43% 0.85% 0.41% 0.02% 0.84% 0.87%
- ----------------------------------------------------------------------
Absent the effect of voluntary fee waivers and contractual expense limitations,
the management fee, other expenses and total expenses of European Government
Bond under the current Advisory Agreement would have been, respectively: 0.43%,
0.46% and 0.89%.
FURTHER INFORMATION ABOUT PROPOSAL 3
Currently the Fund has fundamental investment restrictions which vary from the
funds within the American Century family of mutual funds. The Fund also has
investment restrictions which reflect legal and other requirements which are no
longer applicable to the Fund. In the interests of efficiency in Fund management
and compliance, we have analyzed the fundamental investment limitations and
policies in an effort to formulate a standard set of policies for all American
Century funds which reflect current industry practice and will allow the Fund to
respond to changes in regulatory and industry practice without the expense and
delay of a shareholder vote. It should be noted that the adoption of the
proposed changes is not expected to substantially affect the way the Fund is
managed.
FURTHER INFORMATION ABOUT PROPOSAL 4
J.P. Morgan Investment Management, Inc. ("JPMIM") is the Subadvisor European
Government Bond and has served as such since its inception. If Proposal 2 is
approved, a replacement Subadvisory Agreement with JPMIM will be necessary to
permit JPMIM to continue in its role as Subadvisor. The proposed Subadvisory
Agreement between JPMIM and ACIM is designed to continue JPMIM's appointment as
Subadvisor with no substantive changes. This proposal, if approved, would not
result in a fee increase.
FURTHER INFORMATION ABOUT PROPOSAL 6
Changes in the markets in which European Government Bond invests have made
changes advisable for the Fund to effectively pursue its investment objective.
The amendment would allow the Fund to broaden its investment universe to include
high quality foreign debt securities (rated "AA" or the equivalent) from all
countries (except the United States) that satisfy its credit quality standards.
This is a response to changes in the market for European government debt
securities, particularly the prospect of currency unification in Europe.
The change would substantially transform the Fund into an international bond
fund. If the Proposal is approved, the Fund would change its name to "Benham
International Bond Fund" on October 1, 1997, and begin to invest in accordance
with the new investment objective.
P.O. Box 419200 [american century logo]
Kansas City, Missouri American
64141-6200 Century(sm)
1-800-345-2021 or 816-531-5575
SH-SPL-8736 9705
<PAGE>
AMERICAN CENTURY MUTUAL FUNDS
PROSPECTUS SUPPLEMENT
Limited-Term Tax-Exempt
Intermediate-Term Tax-Exempt
Long-Term Tax-Exempt
SUPPLEMENT DATED MAY 16, 1997
Prospectus dated March 1, 1997
The Board of Directors of the funds offered by this Prospectus has unanimously
agreed to enter into an Agreement and Plan of Reorganization with the American
Century Government Income Trust. The Agreement provides for the consolidation of
these funds with other American Century funds that have similar investment
objectives and policies. The Limited-Term Tax-Exempt Fund would transfer its
assets to the Limited-Term Tax-Free Fund. The Intermediate-Term Tax-Exempt Fund
would transfer its assets to the Intermediate-Term Tax-Free Fund and the
Long-Term Tax-Exempt Fund would transfer its assets to the Long-Term Tax-Free
Fund. The proposed consolidation of funds will not decrease the dollar value of
any shareholder's account. The fund combinations are contingent upon shareholder
approval.
The Board of Directors has requested that the Agreement be submitted to
shareholders for approval at a Special Meeting of Shareholders to be held on
July 30, 1997. The record date for the meeting is May 16, 1997. If you own
shares of the Limited-Term Tax-Exempt Fund, Intermediate-Term Tax-Exempt Fund or
Long-Term Tax Exempt Fund as of the close of business on that date, you will be
entitled to vote on the reorganization at that meeting. Proxy materials
containing more information about the proposed reorganizations are expected to
be first sent to shareholders on June 2, 1997. If the reorganization is
approved, it is expected to occur on September 2, 1997. A decision regarding an
investment in these funds should be made in light of these proposed
reorganizations.
[american century logo]
American
Century(sm)
P.O. Box 419200 o Kansas City, Missouri 64141-6200
Person-to-person assistance:
1-800-345-2021 or 816-531-5575
www.americancentury.com
American Century Investment Services, Inc.
(C) 1997 American Century Services Corporation
SH-SPL-8436 9705
