AMERICAN CENTURY MUTUAL FUNDS, INC.
PROSPECTUS SUPPLEMENT
Benham Cash Reserve
Investor Class * Advisor Class
SUPPLEMENT DATED FEBRUARY 1, 1998
Prospectus dated March 1, 1997
THE TABLE FOUND ON PAGE 4 OF THE INVESTOR CLASS PROSPECTUS IS DELETED AND
REPLACED IN ITS ENTIRETY WITH THE FOLLOWING:
Cash Reserve
SHAREHOLDER TRANSACTION EXPENSES:
Maximum Sales Load Imposed on Purchases ......................... none
Maximum Sales Load Imposed on Reinvested Dividends .............. none
Deferred Sales Load ............................................. none
Redemption Fee(1) ............................................... none
Exchange Fee .................................................... none
ANNUAL OPERATING EXPENSES:
(as a percentage of net assets)
Management Fees(2) .............................................. 0.50%
12b-1 Fees ...................................................... none
Other Expenses(3) ............................................... 0.00%
Total Fund Operating Expenses(2) ................................ 0.50%
EXAMPLE:
You would pay the following expenses on a $1,000 1 year $6
investment, assuming a 5% annual return and 3 years 19
redemption at the end of each time period: 5 years 33
10 years 75
(1) Redemption proceeds sent by wire are subject to a $10 processing charge.
(2) Effective February 1, 1998, the manager has voluntarily agreed to
temporarily waive 0.10% of the management fee for the fund until May 31,
1998. On June 1, 1998, the annual unified management fee and total fund
operating expenses will revert to 0.60%.
(3) Other expenses, which include the fees and expenses (including legal
counsel fees) of those directors who are not "interested persons" as
defined in the Investment Company Act, were less than .01 of 1% of average
net assets for the most recent fiscal year.
THE TABLE FOUND ON PAGE 4 OF THE ADVISOR CLASS PROSPECTUS IS DELETED AND
REPLACED IN ITS ENTIRETY WITH THE FOLLOWING:
Cash Reserve
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 OPERATING EXPENSES:
(as a percentage of net assets)
Management Fees(1) .............................................. 0.25%
12b-1 Fees(2) ................................................... 0.50%
Other Expenses(3) ............................................... 0.00%
Total Fund Operating Expenses(1) ................................ 0.75%
EXAMPLE:
You would pay the following expenses on a $1,000 1 year $9
investment, assuming a 5% annual return and 3 years 27
redemption at the end of each time period: 5 years 47
10 years 105
(1) Effective February 1, 1998, the manager has voluntarily agreed to
temporarily waive 0.10% of the management fee for the fund until May 31,
1998. On June 1, 1998, the annual unified management fee will revert to
0.35% and total fund operating expenses will revert to 0.85%.
(2) The 12b-1 fee is designed to permit investors to purchase Advisor Class
shares through broker-dealers, banks, insurance companies and other
financial intermediaries. A portion of the fee is used to compensate them
for ongoing recordkeeping and administrative services that would otherwise
be performed by an affiliate of the manager, and a portion is used to
compensate them for distribution and other shareholder services. See
"Service and Distribution Fees," page 14.
(3) Other expenses, which include the fees and expenses (including legal
counsel fees) of those directors who are not "interested persons" as
defined in the Investment Company Act, were less than 0.01 of 1% of average
net assets for the most recent fiscal year
THE FOLLOWING DISCLOSURE REPLACES THE PARAGRAPH UNDER THE HEADING "PORTFOLIO
LENDING" FOUND ON PAGE 7 OF EACH PROSPECTUS.
In order to realize additional income, the fund may lend its portfolio
securities. Such loans may not exceed one-third of the fund's net assets valued
at market except (i) through the purchase of debt securities in accordance with
its investment objective, policies and limitations, or (ii) by engaging in
repurchase agreements with respect to portfolio securities.
THE FOLLOWING DISCLOSURE SHOULD BE INSERTED AFTER THE SECTION "RULE 144A
SECURITIES" FOUND ON PAGE 8 OF THE INVESTOR AND ADVISOR CLASS PROSPECTUSES.
INVESTMENTS IN COMPANIES WITH LIMITED OPERATING HISTORY
The fund may invest in the securities of issuers with limited operating
history. The manager considers an issuer to have a limited operating history if
that issuer has a record of less than three years of continuous operation.
Investments in securities of issuers with limited operating history may
involve greater risks than investments in securities of more mature issuers. By
their nature, such issuers present limited operating history and financial
information upon which the manager may base its investment decision on behalf of
the fund. In addition, financial and other information regarding such issuers,
when available, may be incomplete or inaccurate.
Cash Reserve will not invest more than 5% of its total assets in the
securities of issuers with less than a three-year operating history. The manager
will consider periods of capital formation, incubation, consolidation, and
research and development in determining whether a particular issuer has a record
of three years of continuous operation.
THE FOLLOWING DISCLOSURE SHOULD BE INSERTED AS THE SECOND PARAGRAPH UNDER THE
HEADING "AMERICAN CENTURY INVESTMENTS" FOUND ON PAGE 10 OF THE INVESTOR CLASS
PROSPECTUS AND AS THE LAST PARAGRAPH UNDER THE HEADING "HOW TO PURCHASE AND SELL
AMERICAN CENTURY FUNDS" FOUND ON PAGE 10 OF THE ADVISOR CLASS PROSPECTUS.
To reduce expenses and demonstrate respect for our environment, we have
initiated a project through which we will eliminate duplicate copies of most
financial reports and prospectuses to most households and deliver account
statements to most households in a single envelope, even if they have more than
one account. If additional copies of financial reports and prospectuses or
separate mailing of account statements are desired, please call us.
THE FOLLOWING DISCLOSURE IS ADDED ON PAGE 16 OF THE INVESTOR CLASS PROSPECTUS
AND PAGE 11 OF THE ADVISOR CLASS PROSPECTUS, FOLLOWING THE LAST PARAGRAPH UNDER
THE HEADING "WHEN SHARE PRICE IS DETERMINED."
We have contractual relationships with certain financial intermediaries in
which such intermediaries represent that they have systems to track the time at
which investment orders are received and to segregate orders received at
different times. Based on these representations, the fund has authorized such
intermediaries and their designees to accept purchase and redemption orders on
the fund's behalf up to the applicable cut-off time. The fund will be deemed to
have received such orders upon acceptance by the duly authorized intermediary,
and such orders will be priced at the fund's net asset value next determined
after acceptance on the fund's behalf by such intermediary.
THE SECOND PARAGRAPH UNDER THE HEADING "INVESTMENT MANAGEMENT," FOUND ON PAGE 17
OF THE INVESTOR CLASS PROSPECTUS AND PAGE 12 OF THE ADVISOR CLASS PROSPECTUS IS
DELETED.
THE FOLLOWING DISCLOSURE REPLACES THE FIFTH AND SIXTH PARAGRAPHS UNDER THE
HEADING "INVESTMENT MANAGEMENT" FOUND ON PAGE 18 OF THE INVESTOR CLASS
PROSPECTUS AND PAGE 13 OF THE ADVISOR CLASS PROSPECTUS.
DENISE TABACCO, Portfolio Manager, joined American Century in 1988, becoming
a member of its portfolio department in 1991. In 1995 she assumed her current
position as a Portfolio Manager.
JOHN F. WALSH, Portfolio Manager, joined American Century in February 1996
as an Investment Analyst, a position he held until May 1997. At that time he was
promoted to Portfolio Manager. Prior to joining American Century, Mr. Walsh
served as an Assistant Vice President and Analyst at First Interstate Bank, Los
Angeles, California, from July 1993 to January 1996. Prior to that he served as
an Analyst at The Long-Term Credit Bank of Japan, Los Angeles, California.
THE DISCLOSURE SET FORTH BELOW REPLACES THE EIGHTH PARAGRAPH UNDER THE HEADING
"INVESTMENT MANAGEMENT" FOUND ON PAGE 18 OF THE INVESTOR CLASS PROSPECTUS.
For the services provided to the fund, the manager receives an annual fee of
0.60% of the average net assets of the fund. Effective February 1, 1998, the
manager voluntarily waived 0.10% of the management fee for the fund until May
31, 1998. On June 1, 1998, the annual unified management fee will revert to
0.60%.
THE DISCLOSURE SET FORTH BELOW REPLACES THE EIGHTH PARAGRAPH UNDER THE HEADING
"INVESTMENT MANAGEMENT" FOUND ON PAGE 13 OF THE ADVISOR CLASS PROSPECTUS.
For the services provided to the fund, the manager receives an annual fee of
0.35% of the average net assets of the fund. Effective February 1, 1998, the
manager voluntarily waived 0.10% of the management fee for the fund until May
31, 1998. On June 1, 1998, the annual unified management fee will revert to
0.35%.
THE FOLLOWING DISCLOSURE IS ADDED FOLLOWING THE LAST PARAGRAPH UNDER THE HEADING
"TRANSFER AND ADMINISTRATIVE SERVICES" FOUND ON PAGE 18 OF THE INVESTOR CLASS
PROSPECTUS AND PAGE 13 OF THE ADVISOR CLASS PROSPECTUS.
Pursuant to a Sub-Administration Agreement with the manager, Funds
Distributor, Inc. (FDI) serves as the Co-Administrator for the fund. FDI is
responsible for (i) providing certain officers of the fund and (ii) reviewing
and filing marketing and sales literature on behalf of the fund. The fees and
expenses of FDI are paid by the manager.
THE FOLLOWING DISCLOSURE REPLACES THE PARAGRAPH UNDER THE HEADING "DISTRIBUTION
OF FUND SHARES" FOUND ON PAGE 19 OF THE INVESTOR CLASS PROSPECTUS AND PAGE 13 OF
THE ADVISOR CLASS PROSPECTUS.
The fund's shares are distributed by FDI, a registered broker-dealer. FDI is
a wholly-owned indirect subsidiary of Boston Institutional Group, Inc. FDI's
principal business address is 60 State Street, Suite 1300, Boston, Massachusetts
02109.
Investors may open accounts with American Century only through the
distributor. All purchase transactions in the fund offered by this Prospectus
are processed by the transfer agent, which is authorized to accept any
instructions relating to fund accounts. All purchase orders must be accepted by
the distributor. All fees and expenses of FDI in acting as distributor for the
fund are paid by the manager.
[american century logo]
American
Century(reg.sm)
P.O. Box 419200
Kansas City, Missouri
64141-6200
1-800-345-2021 or 816-531-5575
SH-SPL-11581 9802
