[front cover]
AMERICAN CENTURY
Fund Profile
[photo of woman sitting on bench, photo of hand holding pencil]
Target 2000 Fund * Target 2005 Fund
Target 2010 Fund * Target 2015 Fund
Target 2020 Fund * Target 2025 Fund
This profile summarizes key information about the funds that is included in the
funds' Prospectus. The funds' Prospectus includes additional information about
the funds, including a more detailed description of the risks associated with
investing in the funds, that you may want to consider before you invest.
You may obtain the Prospectus and other information about the funds at no cost
by calling us at 1-800-345-2021, accessing our Web site or visiting one of our
Investor Centers. See the back cover for additional telephone numbers and our
address.
July 27, 2000
Investor Class
[american century logo (reg.sm)]
American Century
TARGET 2000 FUND * TARGET 2005 FUND
TARGET 2010 FUND * TARGET 2015 FUND
TARGET 2020 FUND * TARGET 2025 FUND
1. WHAT ARE THE FUNDS' INVESTMENT OBJECTIVES?
These funds seek the highest return consistent with investment in U.S.
Treasury securities.
2. WHAT ARE THE FUNDS' INVESTMENT STRATEGIES?
The funds invest primarily in zero-coupon U.S. Treasury securities. Each
fund is designed to provide an investment experience that is similar to a
direct investment in a zero-coupon U.S. Treasury security.
Each fund is managed to mature in the year identified in its name;
therefore, each fund's weighted average maturity is different. Funds with
longer weighted average maturities have the most volatile share prices. For
example, Target 2025 has the longest weighted average maturity, and its
share price will fluctuate the most.
U.S. Treasury bonds have the traditional design of debt securities.
Interest is paid periodically until maturity, when the principal is repaid.
Zero-coupon Treasury securities, however, do not make any periodic interest
payments. Instead, all of the interest and principal is paid when the
securities mature.
Zero-coupon Treasury securities are created by separating a traditional
Treasury bond's interest and principal payment obligation. Each payment
obligation becomes a separate zero-coupon Treasury security. These
securities are created by financial institutions (like a dealer), the U.S.
Treasury and other agencies of the federal government. The important
characteristic is that the final maturity value of a zero-coupon Treasury
security is supported by U.S. Treasury securities.
Zero-coupon Treasury securities are beneficial for investors who wish to
invest for a fixed period of time at a selected rate. When an investor
purchases a traditional bond, it is paid periodic interest at a
predetermined rate. This interest payment must be reinvested elsewhere.
However, the investor may not be able to reinvest this interest payment in
an investment that has a return similar to a traditional bond. This is
called reinvestment risk. Because zero-coupon securities do not pay interest
periodically, investors in zero-coupon securities are not exposed to
reinvestment risk.
If you invest in a fund, reinvest all distributions and hold your shares
until the fund is liquidated, your investment experience should be similar
to that of an investment in a zero-coupon U.S. Treasury security with the
same term to maturity as the fund. Each fund is managed to provide an
investment return and maturity value that will not differ substantially from
the anticipated growth rate (AGR) and anticipated value at maturity (AVM)
calculated on the day the shares were purchased.
A fund's AGR is an estimate of the annualized rate of growth that an
investor may expect from the purchase date to the fund's weighted average
maturity date.
The AVM is an estimate of a fund's net asset value as of the fund's weighted
average maturity date. It is based on the maturity values of the fund's
zero-coupon Treasury securities.
The advisor calculates each fund's AGR and AVM every business day. AGR and
AVM calculations assume, among other factors, that the fund's operating
expenses (as a percentage of the fund's assets) and composition of
securities held by each fund remain constant for the life of the fund. While
many factors can influence each fund's daily AGR and AVM, they tend to
fluctuate within narrow ranges.
When a fund reaches its maturity year
* The fund managers may begin buying traditional Treasury securities
consistent with the fund's investment objective and pending maturity.
* As the fund's zero-coupon Treasury securities mature, its proceeds will
be invested in Treasury bills.
* Each fund will be liquidated shortly after the conclusion of its target
maturity year.
Additional information about the funds' investments is available in their
annual and semiannual reports. In these
Target Funds American Century Investments
reports you will find a discussion of the market conditions and investment
strategies that significantly affected the funds' performance during the
most recent fiscal period. You may get these reports at no cost by calling
us.
3. WHAT ARE THE SIGNIFICANT RISKS OF INVESTING IN THE FUNDS?
* The funds have different weighted average maturities. Because of this,
each fund will respond differently to changes in interest rates. Funds with
longer weighted average maturities are more sensitive to interest rate
changes. When interest rates rise, the funds' share values will decline, but
the share values of the funds with longer weighted average maturities
generally will decline further. This interest rate sensitivity is greater in
the funds than for traditional Treasury funds. If you sell your shares when
their value is less than the price you paid, you will lose money.
* While we recommend that shareholders hold their investment in the funds
until the fund is liquidated, we do not restrict your (or any other
shareholders') ability to redeem shares. When a fund's shareholders redeem
their shares before the target maturity year, unanticipated capital gains or
losses may result. The fund will distribute these capital gains and losses
to all shareholders.
* The funds are designed to provide an investment that
is similar to investing in a zero-coupon U.S. Treasury security that
matures in the year identified in its name. The fund managers adhere to
investment policies that are designed to ensure that this happens. However,
a precise forecast of a fund's final maturity value and yield to maturity
are not possible.
* An investment in the funds is not a bank deposit, and it is not insured
or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any
other government agency.
In summary, the funds are intended for investors who seek the highest return
consistent with U.S. Treasury securities and who are willing to accept the
risks associated with the funds' investment strategy.
FUND PERFORMANCE
The following bar chart shows the performance of the funds' Investor Class
shares for each of the last 10 calendar years or for each full calendar year
in the life of the fund if less than 10 years. The bar chart indicates the
volatility of the funds' historical returns from year to year. The bar chart
and the performance information below are not intended to indicate how the
funds will perform in the future.
[data shown in bar chart]
Calendar Year-By-Year Returns(1)
1999 1998 1997 1996 1995 1994 1993 1992 1991 1990
Target 2000 2.90% 7.36% 7.05% 1.99% 20.74% -6.89% 15.46% 8.47% 20.66% 6.31%
Target 2005 -5.80% 12.87% 11.63% -1.24% 32.65% -8.90% 21.56% 9.56% 21.47% 3.58%
Target 2010 -11.79% 15.07% 16.75% -3.54% 42.09% -11.56% 26.28% 9.78% 21.06% 0.27%
Target 2015 -14.57% 14.60% 22.92% -6.03% 52.72% -14.08% 30.51% 7.77% 22.47% -3.38%
Target 2020 -18.35% 16.49% 28.62% -8.42% 61.34% -17.66% 35.62% 8.33% 17.36% -4.50%
Target 2025 -20.70% 21.81% 30.11% N/A N/A N/A N/A N/A N/A N/A
(1) As of June 30, 2000, the end of the most recent calendar quarter,
the funds' year-to-date returns were as follows: Target 2000
2.76%; Target 2005 4.65%; Target 2010 8.36%; Target 2015 11.26%;
Target 2020 13.63%; and Target 2025 16.58%.
Target Funds Fund Profile
The highest and lowest quarterly returns for the period reflected in the bar
chart are:
Highest Lowest
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Target 2000 9.79% (4Q 1990) -4.93% (1Q 1994)
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Target 2005 12.69% (4Q 1990) -7.65% (1Q 1990)
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Target 2010 15.87% (2Q 1995) -10.88% (1Q 1990)
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Target 2015 18.47% (4Q 1990) -13.82% (1Q 1996)
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Target 2020 21.44% (2Q 1995) -16.61% (1Q 1996)
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Target 2025 18.81% (1Q 2000) -10.19% (1Q 1997)
The following table shows the average annual total returns of the funds'
Investor Class shares for the periods indicated. The benchmarks are
unmanaged indices that have no operating costs and are included in the
table for performance comparison. For current performance information,
including yields, please call us or access our Web site.
1 YEAR 5 YEARS 10 YEARS LIFE OF FUND(1)
AVERAGE ANNUAL TOTAL RETURNS (PERIOD ENDED JUNE 30, 2000)
Target 2000 4.79% 5.58% 8.47% 11.27%
11/15/2000 Maturity
STRIPS Issue(2) 5.29% 6.08% 8.90% 12.51%(3)
Merrill Lynch Long-Term
Treasury Index 6.64% 7.40% 9.53% 11.21%(3)
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Target 2005 3.68% 6.19% 9.81% 12.82%
11/15/2005 Maturity
STRIPS Issue(2) 2.85% 6.39% 9.92% 14.19%(3)
Merrill Lynch Long-Term
Treasury Index 6.64% 7.40% 9.53% 11.21%(3)
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Target 2010 4.26% 7.18% 10.63% 14.01%
11/15/2010 Maturity
STRIPS Issue(2) 6.33% 8.12% 11.02% 15.48%(3)
Merrill Lynch Long-Term
Treasury Index 6.64% 7.40% 9.53% 11.21%(3)
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Target 2015 5.82% 8.41% 11.45% 9.89%
11/15/2015 Maturity
STRIPS Issue(2) 9.10% 9.48% 12.15% 10.36%(4)
Merrill Lynch Long-Term
Treasury Index 6.64% 7.40% 9.53% 8.97%(4)
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Target 2020 6.64% 9.20% 11.64% 10.24%
11/15/2020 Maturity
STRIPS Issue(2) 11.27% 10.64% 12.33% 10.38%
Merrill Lynch Long-Term
Treasury Index 6.64% 7.40% 9.53% 9.06%
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Target 2025 8.12% N/A N/A 8.86%
11/15/2025 Maturity
STRIPS Issue(2) 9.50% N/A N/A 9.84%(5)
Merrill Lynch Long-Term
Treasury Index 6.64% N/A N/A 7.27%(5)
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(1) The inception dates are: Target 2000, Target 2005 and Target 2010:
March 25, 1985; Target 2015: September 1, 1986; Target 2020: December
29, 1989; and Target 2025: February 15, 1996.
(2) Each Target fund is designed to perform like a zero-coupon security
with the same term to maturity as the fund. The STRIPS issues listed in
this table are U.S. Treasury zero-coupon securities with similar
maturity dates as the respective fund. The STRIPS issues are not
indices, but are important benchmarks of the Target funds' performance.
(3) Since March 31, 1985, the date closest to the fund's inception for
which data are available.
(4) Since September 30, 1986, the date closest to the fund's inception
for which data are available.
(5) Since February 29, 1996, the date closest to the fund's inception
for which data are available.
Target Funds American Century Investments
4. WHAT ARE THE FUNDS' FEES AND EXPENSES?
There are no sales loads, fees or other charges
* to buy fund shares directly from American Century
* to reinvest dividends in additional shares
* to exchange into the Investor Class shares of other American Century
funds
* to redeem your shares
The following table describes the fees and expenses you will pay if you buy
and hold shares of the funds.
ANNUAL FUND OPERATING EXPENSES
(EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
Management Fee 0.59%(1)
Distribution and Service (12b-1) Fees None
Other Expenses 0.00%(2)
Total Annual Fund Operating Expenses 0.59%
(1) Based on expenses incurred during the funds' most recent fiscal
year. The funds have a stepped fee schedule. As a result, the funds'
management fee rates generally decrease as fund assets increase.
(2) Other expenses, which include the fees and expenses of the funds'
independent trustees and their legal counsel, as well as interest,
were less than 0.005% for the most recent fiscal year.
EXAMPLE
Assuming you . . .
* invest $10,000 in the fund
* redeem all of your shares at the end of the periods shown below
* earn a 5% return each year
* incur the same operating expenses as shown above
. . . your cost of investing in the fund would be:
1 year 3 years 5 years 10 years
$60 $189 $329 $736
Of course, actual costs may be higher or lower. Use this example
to compare the costs of investing in other funds.
5. WHO ARE THE FUNDS' INVESTMENT ADVISOR AND PORTFOLIO MANAGERS?
American Century Investment Management, Inc. provides investment advisory
and management services for the funds. American Century uses teams of
portfolio managers, assistant portfolio managers and analysts working
together to manage its mutual funds. Identified below are the portfolio
managers for the team:
DAVID SCHROEDER, Senior Vice President and Senior Portfolio Manager, has
been a member of the team that manages the Target funds since joining
American Century in July 1990. He has a bachelor of arts from Pomona
College.
JEREMY FLETCHER, Portfolio Manager, has been a member of the team that
manages the Target funds since August 1997. He joined American Century in
October 1991 as an Investor Relations Representative. He has bachelor's
degrees in economics and mathematics from Claremont McKenna College.
6. HOW DO I BUY FUND SHARES?
American Century offers several ways to purchase shares
* Complete and return an application along with an investment check payable
to American Century Investments
* If you already have an American Century account, call us or access our
Web site to exchange shares from another American Century fund
* Call us and send your investment by bank wire transfer
Your initial investment must be at least $2,500 ($1,000 for traditional and
Roth IRAs). If your redemption activity causes the value of your account to
fall below this account minimum, your shares may be redeemed involuntarily.
7. HOW DO I SELL FUND SHARES?
You may sell all or part of your fund shares on any business day by writing
or calling us. You also may exchange your shares in a fund for shares in
nearly 70 other mutual funds offered by American Century. Depending on the
options you select when you open your account, some restrictions may apply.
For your protection, some redemption requests require a signature
guarantee.
Target Funds Fund Profile
8. HOW ARE FUND DISTRIBUTIONS MADE AND TAXED?
The funds each pay distributions of substantially all of their income (and
capital gains, if necessary) in December of each year. Distributions are
reinvested automatically in additional shares unless you choose another
option.
At the same time that a fund's annual distributions are made, the Board of
Trustees declares a reverse share split for each fund that exactly offsets
the distributions. This allows the fund's share price to behave like the
price of an equivalent zero-coupon Treasury security. Those shareholders who
reinvest all distributions will own exactly the same number of shares of the
fund as they did before the distributions.
9. WHAT SERVICES ARE AVAILABLE?
American Century offers several ways to make it easier for you to manage
your account, such as
* telephone transactions
* wire and electronic funds transfers
* 24-hour Automated Information Line transactions
* 24-hour online account access and transactions
You will find more information about these choices in Your Guide to American
Century Services, which you may request by calling us, accessing our Web
site or visiting one of our Investor Centers.
Information contained in the services guide pertains to shareholders who
invest directly with American Century rather than through an
employer-sponsored retirement plan or financial intermediary.
If you own or are considering purchasing fund shares through an
employer-sponsored retirement plan or financial intermediary, your ability
to purchase shares of the fund, exchange them for shares of other American
Century funds, and redeem them will depend on the terms of your plan or
financial intermediary. If you have questions about investing in an
employer-sponsored retirement plan or through a financial intermediary,
call a Service Representative at 1-800-345-3533.
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AMERICAN CENTURY INVESTMENTS
P.O. BOX 419200
KANSAS CITY, MISSOURI 64141-6200
INVESTOR RELATIONS
1-800-345-2021 or 816-531-5575
AUTOMATED INFORMATION LINE
1-800-345-8765
FAX
816-340-7962
TELECOMMUNICATIONS DEVICE FOR THE DEAF
1-800-634-4113 or 816-444-3485
BUSINESS, NOT-FOR-PROFIT AND
EMPLOYER-SPONSORED RETIREMENT PLANS
1-800-345-3533
Visit our Web site at WWW.AMERICANCENTURY.COM
SH-PRF-21124 0007 Funds Distributor, Inc. and
American Century Investment Services, Inc., Distributors
