Your
AMERICAN CENTURY
prospectus
Life Sciences Fund
Technology Fund
MAY 25, 2000
REVISED AUGUST 7, 2000
INVESTOR CLASS
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES OR DETERMINED IF THIS PROSPECTUS IS ACCURATE OR COMPLETE. ANYONE WHO
TELLS YOU OTHERWISE IS COMMITTING A CRIME.
Funds Distributor, Inc. and
American Century
Investment Services, Inc.,
Distributors
[american century logo and text logo (reg. sm)]
American
Century
[left magin]
[american century logo and text logo (reg. sm)]
American
Century
American Century
Investments
P.O. Box 419200
Kansas City, MO
64141-6200
Dear Investor,
Planning and maintaining your investment portfolio is a big job. However, an
easy-to-understand Prospectus can make your work a lot less daunting. We hope
you'll find this Prospectus easy to understand, and more importantly, that it
gives you confidence in the investment decisions you have made or are soon to
make.
As you begin to read through this Prospectus, take a look at the table of
contents to understand how it is organized. The first three sections take a
close-up look at the funds.
An Overview of the Funds - Learn about fund goals, strategies and risks, and
who may or may not want to invest.
Fees and Expenses - Find out about fund management fees and other expenses
associated with investing.
Objectives, Strategies and Risks - Take a more detailed look at the principal
investment objectives, strategies and risks presented in the Overview of the
Funds section.
As you continue to read, the Management section will acquaint you with the
fund management teams, and Investing with American Century gives an overview
about how to invest and manage your account.
Share Price and Distributions and Taxes wrap up the Prospectus with important
financial information you'll need to make an informed decision.
Naturally, you may have questions about investing after you read through the
Prospectus. Our Web site, www.americancentury.com, offers information that could
answer many of your questions. Or, an Investor Relations Representative will be
happy to help weekdays, 7 a.m. to 7 p.m. and Saturdays, 9 a.m. to 2 p.m. Central
time. Give us a call at 1-800-345-2021.
Sincerely,
/signature Mark Killen/
Mark Killen
Senior Vice President
American Century Investment Services, Inc.
TABLE OF CONTENTS
An Overview of the Funds .................................................. 2
Fees and Expenses ......................................................... 4
Objectives, Strategies and Risks .......................................... 5
Life Sciences Fund ................................................... 5
Technology Fund ...................................................... 8
Management ................................................................ 11
Investing with American Century ........................................... 13
Share Price and Distributions ............................................. 17
Taxes ..................................................................... 18
Multiple Class Information ................................................ 20
[left margin]
Throughout this book you'll find definitions of key investment terms and
phrases. When you see a word printed in BLUE ITALICS, look for its definition in
the left margin.
[graphic of pointing finger]
This symbol highlights special information and helpful tips.
American Century Investments
AN OVERVIEW OF THE FUNDS
WHAT IS THE FUNDS' INVESTMENT OBJECTIVE?
These funds seek capital growth.
WHAT ARE THE FUNDS' PRIMARY INVESTMENT STRATEGIES AND PRINCIPAL RISKS?
LIFE SCIENCES - The fund managers look for stocks of growing U.S. and foreign
companies that engage in the business of providing products and services that
help promote personal health and wellness.
TECHNOLOGY - The fund managers look for stocks of growing U.S. and foreign
companies with business operations in the technology and
telecommunications-related sectors. These companies include those that the fund
managers believe will benefit significantly from advances or improvements in
technology.
The investment strategy of these funds is based on the belief that, over the
long term, stocks of companies with earnings and revenue growth have a
greater-than-average chance to increase in value over time. A more detailed
description of American Century's growth investment style and the funds'
investment strategies and risks begins on page 5 for Life Sciences and page 8
for Technology.
The funds' principal risks include
* MARKET RISK - The value of a fund's shares will go up and down based on the
performance of the companies whose securities it owns and other factors
generally affecting the securities market.
* PRICE VOLATILITY - The value of a fund's shares may fluctuate significantly
in the short term.
* CONCENTRATION (LIFE SCIENCES) - Life Sciences will focus on the medical and
healthcare industry and related industry groups. Because of this, companies
in the fund's portfolio may react similarly to market developments, such as
government regulation, subsidies, or technological advancements. As a result,
the fund's net asset values may be more volatile than those of less
concentrated funds.
* CONCENTRATION (TECHNOLOGY) - Technology will focus on the technology and
telecommunications industries and related industry groups. Because of this,
companies in the fund's portfolio may react similarly to market developments.
As a result, the fund's net asset values may be more volatile than those of
less concentrated funds.
* PRINCIPAL LOSS - As with all mutual funds, if you sell your shares when their
value is less than the price you paid, you will lose money.
WHO MAY WANT TO INVEST IN THE FUNDS?
The funds may be a good investment if you are
* seeking long-term capital growth potential from your investment
* seeking diversification of your investment portfolio through investment in
life sciences-related companies (Life Sciences)
* seeking diversification of your investment portfolio through investment in
technology and telecommunications-related companies (Technology)
* comfortable with the risks associated with investing in U.S. and foreign
securities
* comfortable with the risks associated with investing in life sciences-related
(Life Sciences) or technology and telecommunications-related (Technology)
companies
* comfortable with the funds' short-term price volatility
* investing through an IRA or other tax-advantaged retirement plan
[left margin]
[graphic of pointing finger]
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.
2 American Century Investments 1-800-345-2021
WHO MAY NOT WANT TO INVEST IN THE FUNDS?
The funds may not be a good investment if you are
* seeking current income from your investment
* investing for a short period of time
* uncomfortable with the risks associated with these funds
* uncomfortable with short-term volatility in the value of your investment
FUND PERFORMANCE HISTORY
As new funds, neither Life Sciences nor Technology has performance history as of
the date of this Prospectus.
[left margin]
[graphic of pointing finger]
For current performance information, please call us at 1-800-345-2021 or visit
American Century's Web site at www.americancentury.com.
www.americancentury.com American Century Investments 3
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.
<TABLE>
ANNUAL OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
Management Distribution and Other Total Annual Fund
Fee(1) Service (12b-1) Fees Expenses(2) Operating Expenses
------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Life Sciences Fund 1.50% None 0.00% 1.50%
------------------------------------------------------------------------------------------
Technology Fund 1.50% None 0.00% 1.50%
</TABLE>
(1) The funds have stepped fee schedules. 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 directors and their legal counsel as well as interest, are
expected to be less than 0.005% for the current fiscal year.
EXAMPLE
The examples in the table below are intended to help you compare the costs of
investing in a fund with the costs of investing in other mutual funds. Assuming
you . . .
* invest $10,000 in the fund
* redeem all of your shares at the end of the periods shown below
* earn a 5% return each year
* incur the same operating expenses as shown above
. . . your cost of investing in the fund would be:
1 year 3 years
--------------------------------------------------------------------------------
Life Sciences Fund $152 $472
--------------------------------------------------------------------------------
Technology Fund $152 $472
[left margin]
[graphic of pointing finger]
Use this example to compare the costs of investing in other funds. Of course,
your actual costs may be higher or lower.
4 American Century Investments 1-800-345-2021
OBJECTIVES, STRATEGIES AND RISKS
LIFE SCIENCES FUND
WHAT IS THE FUND'S INVESTMENT OBJECTIVE?
This fund seeks capital growth.
HOW DOES THE FUND PURSUE ITS INVESTMENT OBJECTIVE?
The fund managers will typically look for stocks of growing companies in the
life sciences sector. To achieve its objective, the fund invests primarily in
companies that engage in the business of providing products and services that
help promote health and wellness. Life science companies generally own, operate
or support health care facilities (including, among others, hospitals,
outpatient surgery facilities, dialysis centers, dental centers and physical
therapy centers), design, manufacture or sell pharmaceuticals,
bio-pharmaceuticals, medical research facilities, and medical devices and
supplies; or may provide biotechnology needed to improve agriculture,
aquaculture, forestry, chemicals, household products and cosmetics/personal care
products, environmental cleanup, food processing and forensic medicine. The fund
may invest in U.S. and foreign companies of any size.
Sometimes a company will engage in multiple lines of business. We will generally
consider a company to be in the life sciences if
* at least 50% of its gross income or net assets come from activities in the
sector;
* at least 50% of its assets are devoted to producing revenues from the sector;
or
* based on other information we obtain, we determine that its primary business
should be categorized within the sector.
The fund managers look for stocks of companies they believe will increase in
value over time, using a growth investment strategy. This strategy looks for
companies with earnings and revenues that are not only growing, but growing at a
successively faster, or accelerating pace. This strategy is based on the premise
that, over the long term, the stocks of companies with accelerating earnings and
revenues have a greater-than-average chance to increase in value.
The managers use a bottom-up approach to select stocks for the fund. That means
they first look for strong, growing companies to invest in, rather than simply
buying any company in a growing industry or sector. Using American Century's
extensive computer database, the managers track financial information for
thousands of companies to identify trends in the companies' earnings and
revenues. This information is used to help the fund managers select and hold
stocks of companies they believe will be able to sustain accelerating growth and
to sell stocks of companies whose growth begins to slow down.
In addition to locating strong companies with earnings and revenue growth, the
fund managers review and may invest in companies that experience a change in
their business that will stimulate future revenue and earnings acceleration and
lead to positive investor perception. The change typically is the result of key
events including: entry into a new market, a new product, patent or license, or
the presentation of clinical data showing efficacy for a new drug or medical
device. The fund managers also believe that it is important to diversify the
fund's holdings across geographical regions and different countries. For this
reason, the fund managers also consider the prospects for relative economic
growth among countries or regions, economic and political conditions, expected
inflation rates, currency exchange fluctuations and tax considerations when
making investments.
The fund managers do not attempt to time the market. Instead, under normal
market conditions, they intend to keep the fund essentially fully invested in
stocks regardless of the movement of stock prices generally.
[left margin]
[graphic of pointing finger]
Accelerating growth is shown, for example, by growth that is faster this quarter
than last or faster this year than the year before.
www.americancentury.com American Century Investments 5
WHAT ARE THE PRINCIPAL RISKS OF INVESTING IN THE FUND?
The value of the fund's shares depends on the value of the stocks and other
securities it owns. The value of the individual securities the fund owns will go
up and down depending on the performance of the companies that issued them,
general market and economic conditions, and investor confidence.
The fund will focus its investments among companies in the life sciences sector.
Because those investments are concentrated in a comparatively narrow segment of
the total market, the fund's investments are not as diversified as many other
mutual funds. Because of this, companies in the fund's portfolio may react
similarly to market developments, such as government regulation, subsidies, or
technological advancements. This means that the fund's net asset values may be
more volatile than those of less concentrated funds. As a result, the value of
an investment in the fund may rise or fall rapidly.
In addition, the fund is nondiversified. This means that the fund's managers may
choose to invest in a relatively small number of securities. If so, a price
change in any one of these securities may have a greater impact on the fund's
share price than would be the case if the fund were diversified. Although the
fund's managers expect it will ordinarily invest in enough securities to qualify
as a diversified fund, its nondiversified status gives them more flexibility to
invest heavily in the most attractive companies identified by the fund's
methodology.
Many faster-growing life sciences companies have limited operating histories and
their potential profitability may be dependent on regulatory approval of their
products. Many of these companies' activities are funded or subsidized by
government grants or other funding, which may be reduced or withdrawn. Changes
in government regulation also can have an impact on a company's profitability
and/or stock price. Continuing technological advances may mean rapid
obsolescence of key products and services. These business uncertainties may
increase the volatility of the prices for these companies' securities.
In addition to publicly traded securities, the fund may invest up to 15% in
privately placed securities. These securities may be considered illiquid if they
cannot be sold in seven days at approximately the price at which the fund is
valuing them. Privately placed securities are valued by the manager pursuant to
procedures established by the fund's Board of Directors.
The fund managers may buy a large amount of a company's stock quickly and may
dispose of it quickly if it no longer meets their investment criteria. While the
managers believe this strategy provides substantial appreciation potential over
the long term, in the short term it can create a significant amount of portfolio
turnover and share price volatility. This portfolio turnover and share price
volatility can be greater than that of the average stock fund. Higher portfolio
turnover leads to higher brokerage costs, which are borne by the fund. Portfolio
turnover also may affect the character of capital gains realized and distributed
by the fund, if any, since short-term capital gains are taxable as ordinary
income.
Market performance tends to be cyclical, and in the various cycles, certain
investment styles may fall in and out of favor. If the market is not favoring
the style used by the fund's management team, the fund's gains may not be as big
as, or its losses may be bigger than, other equity funds using different
investment styles.
As with all funds, your shares may be worth more or less at any given time than
the price you paid for them. If you sell your shares when the value is less than
the price you paid, you will lose money.
6 American Century Investments 1-800-345-2021
The fund may invest in companies regardless of size, which means it may invest
in smaller U.S. and foreign companies. Investing in smaller companies generally
presents unique risks. Smaller companies may have limited resources, trade less
frequently and have less publicly available information. They also may be more
sensitive to changing political and economic conditions. These factors may cause
investments in smaller companies to experience more price volatility.
The fund may invest in securities of foreign companies. Foreign investment
involves additional risks, including fluctuations in currency exchange rates,
less stable political and economic structures, reduced availability of public
information, and lack of uniform financial reporting and regulatory practices
similar to those that apply in the United States. These factors make investing
in foreign securities generally riskier than investing in U.S. securities.
Because the fund managers intend to invest the fund's assets primarily in U.S.
securities, the risks associated with foreign investments are not considered to
be principal risks of investing in the fund. To the extent the fund invests in
foreign securities, the overall risk of the fund, however, could be affected.
These and other risks of investing in the fund are described in the fund's
Statement of Additional Information.
WHAT KINDS OF SECURITIES DOES THE FUND BUY?
The fund will generally purchase equity securities of both U.S. and foreign
companies. The fund can purchase other types of securities as well, such as
domestic and foreign preferred stocks, convertible debt securities,
equity-equivalent securities, nonleveraged futures and options, notes, bonds and
other debt securities of companies, and obligations of domestic or foreign
governments and their agencies.
Although not a primary investment strategy of the fund, the fund may, as a
temporary defensive measure, invest all or a substantial portion of its assets
in cash or high-quality, short-term debt securities in the event of exceptional
market or economic conditions. To the extent the fund assumes a defensive
position, it will not be pursuing its objective of capital growth.
When the managers believe it is prudent or if they are unable to find securities
that satisfy the fund's primary investment strategy, the fund may invest a
portion of its assets in convertible debt securities, foreign securities,
short-term securities, equity-equivalent securities, nonleveraged stock index
futures contracts and other similar securities. Stock index futures contracts, a
type of derivative security, can help the fund's cash assets remain liquid while
performing more like stocks. The fund has a policy governing stock index futures
and similar derivative securities to help manage the risk of these types of
investments. For example, the managers cannot leverage the fund's assets by
investing in a derivative security. A complete description of the derivatives
policy is included in the Statement of Additional Information.
www.americancentury.com American Century Investments 7
OBJECTIVES, STRATEGIES AND RISKS
TECHNOLOGY FUND
WHAT IS THE FUND'S INVESTMENT OBJECTIVE?
This fund seeks capital growth.
HOW DOES THE FUND PURSUE ITS INVESTMENT OBJECTIVE?
The fund managers will typically look for stocks of growing companies in the
technology and telecommunications-related sector. To achieve its objective, the
fund invests primarily in companies that the fund managers believe are
principally engaged in offering, using or developing products, processes or
services that provide or will benefit significantly from technological
advancements or improvements. The fund managers consider technology and
telecommunications-related industries to include, among others, computers
(including software, products and electronic components), semiconductors,
networking, internet and on-line service providers, office automation,
telecommunications, telecommunications equipment, environmental services, media
and information services, electronics and defense and aerospace. The fund will
invest in U.S. and foreign companies of any size.
Sometimes a company will engage in multiple lines of business. We will generally
consider a company to be in the technology and telecommunications-related sector
if
* at least 50% of its gross income or net assets come from activities in the
sector;
* at least 50% of its assets are devoted to producing revenues from the sector;
or
* based on other information we obtain, we determine that its primary business
should be categorized within the sector.
The fund managers look for stocks of companies they believe will increase in
value over time, using a growth investment strategy. This strategy looks for
companies with earnings and revenues that are not only growing, but growing at a
successively faster, or accelerating pace. This strategy is based on the premise
that, over the long term, the stocks of companies with accelerating earnings and
revenues have a greater-than-average chance to increase in value.
The managers use a bottom-up approach to select stocks for the fund. That means
they first look for strong, growing companies to invest in, rather than simply
buying any company in a growing industry or sector. Using American Century's
extensive computer database, the managers track financial information for
thousands of companies to identify trends in the companies' earnings and
revenues. This information is used to help the fund managers select and hold
stocks of companies they believe will be able to sustain accelerating growth and
to sell stocks of companies whose growth begins to slow down.
In addition to locating strong companies with earnings and revenue growth, the
fund managers review and may invest in companies that experience a change in
their business that will stimulate future revenue and earnings acceleration and
lead to positive investor perception. The change typically is the result of key
events including: entry into a new market, a new product, patent or license. The
fund managers also believe that it can benefit by diversifying the fund's
holdings across geographical regions and different countries. For this reason,
the fund managers also consider the prospects for relative economic growth among
countries or regions, economic and political conditions, expected inflation
rates, currency exchange fluctuations and tax considerations when making
investments.
The fund managers do not attempt to time the market. Instead, under normal
market conditions, they intend to keep the fund essentially fully invested in
stocks regardless of the movement of stock prices generally.
[left margin]
[graphic of pointing finger]
Accelerating growth is shown, for example, by growth that is faster this quarter
than last or faster this year than the year before.
8 American Century Investments 1-800-345-2021
WHAT ARE THE PRINCIPAL RISKS OF INVESTING IN THE FUND?
The value of the fund's shares depends on the value of the stocks and other
securities it owns. The value of the individual securities a fund owns will go
up and down depending on the performance of the companies that issued them,
general market and economic conditions, and investor confidence.
The fund will focus its investments among companies in the technology and
telecommunications-related sector. Because those investments are concentrated in
a comparatively narrow segment of the total market, the fund's investments are
not as diversified as many other mutual funds. Because of this, companies in the
fund's portfolio may react similarly to market developments, such as government
regulation, subsidies, or technological advancements. This means that the fund's
net asset values may be more volatile than those of less concentrated funds. As
a result, the value of an investment in the fund may rise or fall rapidly.
In addition, the fund is nondiversified. This means that the fund's managers may
choose to invest in a relatively small number of securities. If so, a price
change in any one of these securities may have a greater impact on the fund's
share price than would be the case if the fund were diversified. Although the
fund's managers expect it will ordinarily invest in enough securities to qualify
as a diversified fund, its nondiversified status gives them more flexibility to
invest heavily in the most attractive companies identified by the fund's
methodology.
Many faster-growing technology and telecommunications-related companies have
limited operating histories. Continuing technological advances may mean rapid
obsolescence of key products and services. These business uncertainties may
increase the volatility of the prices for these companies' securities.
In addition to publicly traded securities, the fund may invest up to 15% in
privately placed securities. These securities may be considered illiquid if they
cannot be sold in seven days at approximately the price the fund is valuing
them. Privately placed securities are valued by the manager pursuant to
procedures established by the fund's Board of Directors.
The fund managers may buy a large amount of a company's stock quickly, and may
dispose of it quickly if it no longer meets their investment criteria. While the
managers believe this strategy provides substantial appreciation potential over
the long term, in the short term it can create a significant amount of portfolio
turnover and share price volatility. This portfolio turnover and share price
volatility can be greater than that of the average stock fund. Higher portfolio
turnover leads to higher brokerage costs, which are borne by the fund. Portfolio
turnover also may affect the character of capital gains realized and distributed
by the fund, if any, since short-term capital gains are taxable as ordinary
income.
Market performance tends to be cyclical, and in the various cycles, certain
investment styles may fall in and out of favor. If the market is not favoring
the style used by the fund's management team, the fund's gains may not be as big
as, or its losses may be bigger than, other equity funds using different
investment styles.
As with all funds, your shares may be worth more or less at any given time than
the price you paid for them. If you sell your shares when the value is less than
the price you paid, you will lose money.
The fund may invest in companies regardless of size, which means it may invest
in smaller U.S. and foreign companies. Investing in smaller companies generally
presents unique risks. Smaller companies may have limited resources, trade less
frequently and have less publicly available information. They also may be more
sensitive to changing political and economic conditions. These factors may cause
investments in smaller companies to experience more price volatility.
www.americancentury.com American Century Investments 9
The fund may invest in securities of foreign companies. Foreign investment
involves additional risks, including fluctuations in currency exchange rates,
less stable political and economic structures, reduced availability of public
information, and lack of uniform financial reporting and regulatory practices
similar to those that apply in the United States. These factors make investing
in foreign securities generally riskier than investing in U.S. securities.
Because the fund managers intend to invest the fund's assets primarily in U.S.
securities, the risks associated with foreign investments are not considered to
be principal risks of investing in the fund. To the extent the fund invests in
foreign securities, the overall risk of the fund, however, could be affected.
These and other risks of investing in the fund are described in the fund's
Statement of Additional Information.
WHAT KINDS OF SECURITIES DOES THE FUND BUY?
The fund will generally purchase equity securities of both U.S. and foreign
companies. The fund can purchase other types of securities as well, such as
domestic and foreign preferred stocks, convertible debt securities,
equity-equivalent securities, nonleveraged futures and options, notes, bonds and
other debt securities of companies, and obligations of domestic or foreign
governments and their agencies.
Although not a primary investment strategy of the fund, the fund may, as a
temporary defensive measure, invest all or a substantial portion of its assets
in cash or high-quality, short-term debt securities in the event of exceptional
market or economic conditions. To the extent the fund assumes a defensive
position, it will not be pursuing its objective of capital growth.
When the managers believe it is prudent or if they are unable to find securities
that satisfy the fund's primary investment strategy, the fund may invest a
portion of its assets in convertible debt securities, foreign securities,
short-term securities, equity-equivalent securities, nonleveraged stock index
futures contracts and other similar securities. Stock index futures contracts, a
type of derivative security, can help the fund's cash assets remain liquid while
performing more like stocks. The fund has a policy governing stock index futures
and similar derivative securities to help manage the risk of these types of
investments. For example, the managers cannot leverage the fund's assets by
investing in a derivative security. A complete description of the derivatives
policy is included in the Statement of Additional Information.
10 American Century Investments 1-800-345-2021
MANAGEMENT
WHO MANAGES THE FUNDS?
The Board of Directors, investment advisor and fund management team play key
roles in the management of the funds.
THE BOARD OF DIRECTORS
The Board of Directors oversees the management of the funds and meets at least
quarterly to review reports about fund operations. Although the Board of
Directors does not manage the funds, it has hired an investment advisor to do
so. More than two-thirds of the directors are independent of the funds' advisor;
that is, they are not employed by and have no financial interest in the advisor
THE INVESTMENT ADVISOR
The funds' investment advisor is American Century Investment Management, Inc.
The advisor has been managing mutual funds since 1958 and is headquartered at
4500 Main Street, Kansas City, Missouri 64111.
The advisor is responsible for managing the investment portfolio of the funds
and directing the purchase and sale of their investment securities. The advisor
also arranges for transfer agency, custody and all other services necessary for
the funds to operate.
For the services it provides to the funds, the advisor receives a unified
management fee based on a percentage of the average net assets of each class of
shares of the funds. The amount of the management fee for a fund is calculated
on a class-by-class basis daily and paid monthly. Life Sciences will pay the
advisor a unified management fee for the Investor Class of shares of 1.50% of
the first $1 billion of average net assets and 1.30% of the average net assets
over $1 billion. Technology will pay the advisor a unified management fee for
the Investor Class of shares of 1.50% of the first $1 billion of average net
assets and 1.30% of the average net assets over $1 billion.
Out of that fee, the advisor pays all expenses of managing and operating the
funds except brokerage expenses, taxes, interest, fees and expenses of the
independent directors (including legal counsel fees), and extraordinary
expenses. A portion of the management fee may be paid by the funds' advisor to
unaffiliated third parties who provide recordkeeping and administrative services
that would otherwise be performed by an affiliate of the advisor.
www.americancentury.com American Century Investments 11
THE FUND MANAGEMENT TEAMS
The advisor uses teams of portfolio managers, assistant portfolio managers and
analysts to manage the funds. The teams meet regularly to review portfolio
holdings and discuss purchase and sale activity. Team members buy and sell
securities for the funds as they see fit, guided by the funds' investment
objectives and strategies.
The portfolio managers on the investment teams are identified below:
Life Sciences
ARNOLD K. DOUVILLE
Mr. Douville, Vice President and Portfolio Manager, has been a member of the
team that manages the Life Sciences Fund since its inception in June 2000, and
has been a member of the team that manages Vista (another American Century
equity fund) since joining American Century in November 1997. Before joining
American Century, he served as Senior Portfolio Manager for Munder Capital
Management from September 1989 to October 1997. He has a bachelor's degree in
economics from the U.S. Air Force Academy and an MBA in finance, statistics and
economics from the University of Chicago.
CHRISTY TURNER
Ms. Turner, Portfolio Manager, has been a member of the team that manages the
Life Sciences Fund since its inception in June 2000. Prior to that, she worked
for four years as an investment analyst for the health care sector for other
American Century equity funds, including Ultra, Select, New Opportunities and
Giftrust. Before joining American Century in 1996, she worked as an investment
analyst for First Chicago Investment Management Company and as an audit manager
for KPMG Peat Marwick. She has a bachelor's degree in business administration in
accounting from the University of Central Florida and an MBA in finance from the
University of North Carolina. She is a Chartered Financial Analyst.
Technology
CHRISTOPHER K. BOYD
Mr. Boyd, Vice President and Senior Portfolio Manager, has been a member of the
team that manages the Technology Fund since its inception in June 2000, and has
been a member of the team that manages Giftrust and New Opportunities since
rejoining American Century in January 1998. With the exception of 1997, he has
been with American Century since March 1988 and served as a Portfolio Manager
since December 1992. During 1997, he was in private practice as an investment
advisor. He has a bachelor of science from the University of Kansas and an MBA
from Dartmouth College. He is a Chartered Financial Analyst.
DOUGLAS C. DAY
Mr. Day, Portfolio Manager, has been a member of the team that manages the
Technology Fund since its inception in June 2000. Prior to that, he worked for
three and one-half years as an investment analyst for other American Century
equity funds, including Ultra and Select. Before joining American Century in
October 1996, he worked as an equity research analyst for Salomon Brothers from
May 1995 to October 1996. He has a bachelor's degree in economics from Emory
University.
FUNDAMENTAL INVESTMENT POLICIES
Fundamental investment policies contained in the Statement of Additional
Information and the investment objectives of the funds may not be changed
without shareholder approval. The Board of Directors may change any other
policies and investment strategies.
[left margin]
[graphic of pointing finger]
CODE OF ETHICS
American Century has a Code of Ethics designed to ensure that the interests of
fund shareholders come before the interests of the people who manage the funds.
Among other provisions, the Code of Ethics prohibits portfolio managers and
other investment personnel from buying securities in an initial public offering
or profiting from the purchase and sale of the same security within 60 calendar
days. In addition, the Code of Ethics requires portfolio managers and other
employees with access to information about the purchase or sale of securities by
the funds to obtain approval before executing permitted personal trades.
12 American Century Investments 1-800-345-2021
INVESTING WITH AMERICAN CENTURY
SERVICES AUTOMATICALLY AVAILABLE TO YOU
You automatically will have access to the services listed below when you open
your account. If you do not want these services, see Conducting Business in
Writing below.
CONDUCTING BUSINESS IN WRITING
If you prefer to conduct business in writing only, you can indicate this on the
account application. If you choose this option, you must provide written
instructions to invest, exchange and redeem. All account owners must sign
transaction instructions (with signatures guaranteed for redemptions in excess
of $100,000). If you want to add services later, you can complete an Investor
Service Options form.
WAYS TO MANAGE YOUR ACCOUNT
--------------------------------------------------------------------------------
BY TELEPHONE
Investor Relations
1-800-345-2021
Business, Not-For-Profit and
Employer-Sponsored
Retirement Plans
1-800-345-3533
Automated Information Line
1-800-345-8765
[graphic of telephone]
OPEN AN ACCOUNT
If you are a current investor, you can open an account by exchanging shares from
another American Century account.
EXCHANGE SHARES
Call or use our Automated Information Line if you have authorized us to accept
telephone instructions.
MAKE ADDITIONAL INVESTMENTS
Call or use our Automated Information Line if you have authorized us to invest
from your bank account.
SELL SHARES
Call a Service Representative.
--------------------------------------------------------------------------------
ONLINE
www.americancentury.com
OPEN AN ACCOUNT
If you are a current investor, you can open an account by exchanging shares from
another American Century account.
EXCHANGE SHARES
Exchange shares from another American Century account.
MAKE ADDITIONAL INVESTMENTS
Make an additional investment into an established American Century account if
you have authorized us to invest from your bank account.
SELL SHARES
Not available.
--------------------------------------------------------------------------------
BY MAIL OR FAX
P.O. Box 419200
Kansas City, MO 64141-6200
Fax
816-340-7962
OPEN AN ACCOUNT
Send a signed, completed application and check or money order payable to
American Century Investments.
EXCHANGE SHARES
Send written instructions to exchange your shares from one American Century
account to another.
MAKE ADDITIONAL INVESTMENTS
Send your check or money order for at least $50 with an investment slip or $250
without an investment slip. If you don't have an investment slip, include your
name, address and account number on your check or money order.
SELL SHARES
Send written instructions or a redemption form to sell shares. Call a Service
Representative to request a form.
www.americancentury.com American Century Investments 13
A NOTE ABOUT MAILINGS TO SHAREHOLDERS
To reduce expenses and demonstrate respect for our environment, we will deliver
a single copy of most financial reports and prospectuses to investors who share
an address, even if the accounts are registered under different names. If you
would like to receive separate mailings, please call us and we will begin
individual delivery within 30 days. If you'd like to reduce mailbox clutter even
more, visit www.americancentury.com and sign up to receive these documents by
email. In most cases, we also will deliver account statements for all the
investors in a household in a single envelope.
YOUR GUIDE TO SERVICES AND POLICIES
When you open an account, you will receive a services guide, which explains the
services available to you and the policies of the funds and the transfer agent.
--------------------------------------------------------------------------------
AUTOMATICALLY
OPEN AN ACCOUNT
Not available.
EXCHANGE SHARES
Send written instructions to set up an automatic exchange of your shares from
one American Century account to another.
MAKE ADDITIONAL INVESTMENTS
With the automatic investment privilege, you can purchase shares on a regular
basis. You must invest at least $600 per year per account.
SELL SHARES
If you have at least $10,000 in your account, you may sell shares automatically
by establishing Check-A-Month or Automatic Redemption plans.
--------------------------------------------------------------------------------
BY WIRE
[graphic of pointing finger]
Please remember that if you request redemptions by wire, $10 will be deducted
from the amount redeemed. Your bank also may charge a fee.
OPEN AN ACCOUNT
Call to set up your account or mail a completed application to the address
provided in the "By mail" section. Give your bank the following information to
wire money.
* Our bank information:
Commerce Bank N.A.
Routing No. 101000019
Account No. 2804918
* The fund name
* Your American Century account number* * Your name * The contribution year (for
IRAs only) * For additional investments only
MAKE ADDITIONAL INVESTMENTS
Follow the wire instructions.
SELL SHARES
You can receive redemption proceeds by wire or electronic transfer.
EXCHANGE SHARES
Not available.
--------------------------------------------------------------------------------
IN PERSON
If you prefer to handle your transactions in person, visit one of our Investor
Centers and a representative can help you open an account, make additional
investments, and sell or exchange shares.
4500 Main St. 4917 Town Center Drive
Kansas City, Missouri Leawood, Kansas
8 a.m. to 5:30 p.m., Monday - Friday 8 a.m. to 6 p.m., Monday -- Friday
8 a.m. to noon, Saturday
1665 Charleston Road 9445 East County Line Road, Suite A
Mountain View, California Englewood, Colorado
8 a.m. to 5 p.m., Monday - Friday 8 a.m. to 6 p.m., Monday - Friday
8 a.m. to noon, Saturday
14 American Century Investments 1-800-345-2021
MINIMUM INITIAL INVESTMENT AMOUNTS
To open an account, the minimum investments are:
--------------------------------------------------------------------------------
(Individual or Joint) $2,500
--------------------------------------------------------------------------------
Traditional IRA $1,000
--------------------------------------------------------------------------------
Roth IRA $1,000
--------------------------------------------------------------------------------
Education IRA $500
--------------------------------------------------------------------------------
UGMA/UTMA $2,500
--------------------------------------------------------------------------------
403(b) $1,000(1)
--------------------------------------------------------------------------------
Qualified Retirement Plans $2,500(2)
(1) American Century will waive the minimum if: (A) you contribute at least $50
a month in each fund you select or, (B) your plan contribution is less than
$50 a month and is invested in one fund.
(2) The minimum investment requirements may be different for some types of
retirement plans.
REDEMPTION OF SHARES IN LOW-BALANCE ACCOUNTS
If your redemption activity causes your account balance to fall below the
minimum initial investment amount, we will notify you and give you 90 days to
meet the minimum. If you do not meet the deadline, American Century will redeem
the shares in the account and send the proceeds to your address of record.
MODIFYING OR CANCELING AN INVESTMENT
Investment instructions are irrevocable. That means that once you have mailed or
otherwise transmitted your investment instruction, you may not modify or cancel
it. Each fund reserves the right to suspend the offering of shares for a period
of time, and it reserves the right to reject any specific purchase order
(including purchases by exchange or conversion). Additionally, we may refuse a
purchase if, in our judgment, it is of a size that would disrupt the management
of a fund.
ABUSIVE TRADING PRACTICES
We do not permit market timing or other abusive trading practices in our funds.
Excessive, short-term (market timing) or other abusive trading practices may
disrupt portfolio management strategies and harm fund performance. To minimize
harm to the fund and its shareholders, we reserve the right to reject any
purchase order (including exchanges) from any investor we believe has a history
of abusive trading or whose trading, in our judgment, has been or may be
disruptive to a fund. In making this judgment, we may consider trading done in
multiple accounts under common ownership or control. We also reserve the right
to delay delivery of your redemption proceeds--up to seven days--or to honor
certain redemptions with securities, rather than cash, as described in the next
section.
SPECIAL REQUIREMENTS FOR LARGE REDEMPTIONS
If, during any 90-day period, you redeem fund shares worth more than $250,000
(or 1% of the assets of the fund if that percentage is less than $250,000), we
reserve the right to pay part or all of the redemption proceeds in excess of
this amount in readily marketable securities instead of in cash. These
securities would be selected from the fund's portfolio by the fund managers. A
payment in securities can help the fund's remaining shareholders avoid tax
liabilities that they might otherwise have incurred had the fund sold securities
prematurely to pay the entire redemption amount in cash.
[left margin]
[graphic of pointing finger]
A redemption is the sale of all or a portion of the shares in an account,
including as part of an exchange to another American Century account.
www.americancentury.com American Century Investments 15
We will value these securities in the same manner as we do in computing the
fund's net asset value. We may provide these securities in lieu of cash without
prior notice.
Also, if payment is made in securities, a shareholder may have to pay brokerage
or other transaction costs to convert the securities to cash.
If your redemption would exceed this limit and you would like to avoid being
paid in securities, please provide us 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. This minimizes the effect of the
redemption on the fund and its remaining investors.
INVESTING THROUGH FINANCIAL INTERMEDIARIES
If you do business with us through a financial intermediary or a retirement
plan, your ability to purchase, exchange and redeem shares will depend on the
policies of that entity. Some policy differences may include
* minimum investment requirements
* exchange policies
* fund choices
* cutoff time for investments
Please contact your financial intermediary or plan sponsor for a complete
description of its policies.
Certain financial intermediaries perform recordkeeping and administrative
services for their clients that would otherwise be performed by American
Century's transfer agent. In some circumstances, American Century will pay the
service provider a fee for performing those services.
Although fund share transactions may be made directly with American Century at
no charge, you also may purchase, redeem and exchange fund shares through
financial intermediaries that charge a transaction-based or other fee for their
services. Those charges are retained by the intermediary and are not shared with
American Century or the funds.
American Century has contracts with certain financial intermediaries requiring
them to track the time investment orders are received and to comply with
procedures relating to the transmission of orders. The funds have authorized
these intermediaries to accept orders on each fund's behalf up to the time at
which the net asset value is determined. If those orders are transmitted to
American Century and paid for in accordance with the contract, they will be
priced at the net asset value next determined after your request is received in
the form required by the intermediary on each fund's behalf.
[left margin]
[graphic of pointing finger]
Financial intermediaries include banks, broker-dealers, insurance companies and
investment advisors.
16 American Century Investments 1-800-345-2021
SHARE PRICE AND DISTRIBUTIONS
SHARE PRICE
American Century determines the NET ASSET VALUE (NAV) of each fund as of the
close of regular trading on the New York Stock Exchange (usually 4 p.m. Eastern
time) on each day the Exchange is open. On days when the Exchange is not open
(including certain U.S. holidays), we do not calculate the NAV. The NAV of a
fund share is the current value of the fund's assets, minus any liabilities,
divided by the number of fund shares outstanding.
If current market prices of securities owned by a fund are not readily
available, the advisor may determine their fair value in accordance with
procedures adopted by the fund's Board. Trading of securities in foreign markets
may not take place every day the Exchange is open. Also, trading in some foreign
markets and on some electronic trading networks may take place on weekends or
holidays when a fund's NAV is not calculated. So, the value of a fund's
portfolio may be affected on days when you can't purchase or redeem shares of
the fund.
We will price your purchase, exchange or redemption at the NAV next determined
after we receive your transaction request in good order.
DISTRIBUTIONS
Federal tax laws require each fund to make distributions to its shareholders in
order to qualify as a "regulated investment company." Qualification as a
regulated investment company means the funds will not be subject to state or
federal income tax on amounts distributed. The distributions generally consist
of dividends and interest received, as well as CAPITAL GAINS realized on the
sale of investment securities. Each fund generally pays distributions from net
income, if any, once a year in December. Distributions from realized capital
gains are paid twice a year, usually in March and December. A fund may make more
frequent distributions, if necessary, to comply with Internal Revenue Code
provisions.
You will participate in fund distributions, when they are declared, starting the
day after your purchase is effective. For example, if you purchase shares on a
day that a distribution is declared, you will not receive that distribution. If
you redeem shares, you will receive any distribution declared on the day you
redeem. If you redeem all shares, we will include any such distributions
received with your redemption proceeds.
Participants in employer-sponsored retirement or savings plans must reinvest all
distributions. For shareholders investing through taxable accounts, we will
reinvest distributions unless you elect to receive them in cash. Please consult
your services guide for further information regarding distributions and your
distribution options.
[left margin]
The NET ASSET VALUE, or NAV, of a fund is the price of the fund's shares.
CAPITAL GAINS are increases in the values of capital assets, such as stock, from
the time the assets are purchased.
www.americancentury.com American Century Investments 17
TAXES
The tax consequences of owning shares of the funds will vary depending on
whether you own them through a taxable or tax-deferred account. Tax consequences
result from distributions by the funds of dividend and interest income they have
received or capital gains they have generated through their investment
activities. Tax consequences also result from sales of fund shares by investors
after the net asset value has increased or decreased.
Tax-Deferred Accounts
If you purchase fund shares through a tax-deferred account, such as an IRA or a
qualified employer-sponsored retirement or savings plan, income and capital
gains distributions usually will not be subject to current taxation, but will
accumulate in your account under the plan on a tax-deferred basis. Likewise,
moving from one fund to another fund within a plan or tax-deferred account
generally will not cause you to be taxed. For information about the tax
consequences of making purchases or withdrawals through a tax-deferred account,
please consult your plan administrator, your summary plan description or a
professional tax advisor.
Taxable Accounts
If you own fund shares through a taxable account, distributions by the funds and
your sales of fund shares may cause you to be taxed on your investment.
If you invest through a taxable account, you may be able to claim a foreign tax
credit for any foreign income taxes paid by the funds. In order to qualify for
this tax credit, certain requirements must be satisfied. Please consult the
Statement of Additional Information for a more complete discussion of the tax
consequences of owning shares of the funds.
Taxability of Distributions
Fund distributions may consist of income earned by the funds from sources such
as dividends and interest, or capital gains generated from the sale of fund
investments. Distributions of income are taxed as ordinary income. Distributions
of capital gains are classified either as short term or long term and are taxed
as follows:
<TABLE>
Type of Distribution Tax Rate for 15% Bracket Tax Rate for 28% Bracket or Above
---------------------------------------------------------------------------------------
(Short-term capital gains) Ordinary income rate Ordinary income rate
---------------------------------------------------------------------------------------
<S> <C> <C>
Long-term capital gains 10% 20%
</TABLE>
The tax status of any distributions of capital gains is determined by how long
the funds held the underlying security that was sold, not by how long you have
been invested in the funds, or whether you reinvest your distributions in
additional shares or take them in cash. American Century will inform you of the
tax status of fund distributions for each calendar year in an annual tax mailing
(Form 1099-DIV).
Distributions also may be subject to state and local taxes. Because everyone's
tax situation is unique, you may want to consult your tax professional about
federal, state and local tax consequences.
[left margin]
[graphic of pointing finger]
BUYING A DIVIDEND
Purchasing fund shares in a taxable account shortly before a distribution is
sometimes known as buying a dividend. In taxable accounts, you must pay income
taxes on the distribution whether you reinvest the distribution or take it in
cash. In addition, you will have to pay taxes on the distribution whether the
value of your investment decreased, increased or remained the same after you
bought the fund shares.
The risk in buying a dividend is that the fund's portfolio may build up taxable
gains throughout the period covered by a distribution, as securities are sold at
a profit. The funds distribute those gains to you, after subtracting any losses,
even if you did not own the shares when the gains occurred.
If you buy a dividend, you incur the full tax liability of the distribution
period, but you may not enjoy the full benefit of the gains realized in the
fund's portfolio.
18 American Century Investments 1-800-345-2021
Taxes on Transactions
Your redemptions--including exchanges to other American Century funds--are
subject to capital gains tax. The table above can provide a general guide for
your potential tax liability when selling or exchanging fund shares. Short-term
capital gains are gains on fund shares you held for 12 months or less. Long-term
capital gains are gains on fund shares you held for more than 12 months. If your
shares decrease in value, their sale or exchange will result in a long-term or
short-term capital loss. However, you should note that 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 those shares. 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
Internal Revenue Code. This may result in a postponement of the recognition of
such loss for federal income tax purposes.
If you have not certified to us that your Social Security number or tax
identification number is correct and that you are not subject to 31%
withholding, we are required to withhold and remit 31% of dividends, capital
gains distributions and redemptions to the IRS.
www.americancentury.com American Century Investments 19
MULTIPLE CLASS INFORMATION
American Century offers three classes of the funds: Investor Class,
Institutional Class and Advisor Class. The shares offered by this Prospectus are
Investor Class shares and have no up-front or deferred charges, commissions, or
12b-1 fees.
American Century offers the other classes of shares primarily through
employer-sponsored retirement plans or through institutions like banks,
broker-dealers and insurance companies. The other classes have different fees,
expenses and/or minimum investment requirements from the Investor Class. The
difference in the fee structures between the classes is the result of their
separate arrangements for shareholder and distribution services and not the
result of any difference in amounts charged by the advisor for core investment
advisory services. Accordingly, the core investment advisory expenses do not
vary by class. Different fees and expenses will affect performance. For
additional information concerning Advisor or Institutional Class shares, call us
at 1-800-345-3533. You also can contact a sales representative or financial
intermediary who offers those classes of shares.
Except as described below, all classes of shares of a fund have identical
voting, dividend, liquidation and other rights, preferences, terms and
conditions. The only differences between the classes are (a) each class may be
subject to different expenses specific to that class; (b) each class has a
different identifying designation or name; (c) each class has exclusive voting
rights with respect to matters solely affecting such class; (d) each class may
have different exchange privileges; and (e) the Institutional Class may provide
for automatic conversion from that class into shares of the Investor Class of
the same fund.
20 American Century Investments 1-800-345-2021
NOTES
www.americancentury.com American Century Investments 21
MORE INFORMATION ABOUT THE FUNDS IS CONTAINED IN THESE DOCUMENTS
Annual and Semiannual Reports
These reports contain more information about the funds' investments and the
market conditions and investment strategies that significantly affected the
funds' performance during the most recent fiscal period.
Statement of Additional Information (SAI)
The SAI contains a more detailed, legal description of the funds' operations,
investment restrictions, policies and practices. The SAI is incorporated by
reference into this Prospectus. This means that it is legally part of this
Prospectus, even if you don't request a copy.
You may obtain a free copy of the SAI or annual and semiannual reports, and ask
questions about the funds or your accounts, by contacting American Century at
the address or telephone numbers listed below.
You also can get information about the funds (including the SAI) from the
Securities and Exchange Commission (SEC). The SEC charges a duplicating fee to
provide copies of this information.
In person SEC Public Reference Room
Washington, D.C.
Call 202-942-8090 for
location and hours.
On the Internet * EDGAR database at www.sec.gov
* By email request at [email protected]
By mail SEC Public Reference Section
Washington, D.C. 20549-0102
Investment Company Act File No. 811-6247
[american century logo and text logo (reg. sm)]
American
Century
AMERICAN CENTURY INVESTMENTS
P.O. Box 419200
Kansas City, Missouri 64141-6200
1-800-345-2021 or 816-531-5575
0008
SH-PRS-21726
<PAGE>
Your
AMERICAN CENTURY
prospectus
Life Sciences Fund
Technology Fund
MAY 25, 2000
REVISED AUGUST 7, 2000
ADVISOR CLASS
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES OR DETERMINED IF THIS PROSPECTUS IS ACCURATE OR COMPLETE. ANYONE WHO
TELLS YOU OTHERWISE IS COMMITTING A CRIME.
Funds Distributor, Inc. and
American Century
Investment Services, Inc.,
Distributors
[american century logo and text logo (reg. sm)]
American
Century
Dear Investor,
Planning and maintaining your investment portfolio is a big job. However, an
easy-to-understand Prospectus can make your work a lot less daunting. We hope
you'll find this Prospectus easy to understand, and more importantly, that it
gives you confidence in the investment decisions you have made or are soon to
make.
As you begin to read through this Prospectus, take a look at the table of
contents to understand how it is organized. The first three sections take a
close-up look at the funds.
An Overview of the Funds - Learn about fund goals, strategies and risks, and
who may or may not want to invest.
Fees and Expenses - Find out about fund management fees and other expenses
associated with investing.
Objectives, Strategies and Risks - Take a more detailed look at the principal
investment objectives, strategies and risks presented in the Overview of the
Funds section.
As you continue to read, the Management section will acquaint you with the
fund management teams, and Investing with American Century gives an overview
about how to invest and manage your account.
Share Price and Distributions and Taxes wrap up the Prospectus with important
financial information you'll need to make an informed decision.
Naturally, you may have questions about investing after you read through the
Prospectus. Our Web site, www.americancentury.com, offers information that could
answer many of your questions. Or, a Service Representative will be happy to
help weekdays, 8 a.m. to 5:30 p.m. Central time. Give us a call at
1-800-345-3533.
Sincerely,
/signature Mark Killen/
Mark Killen
Senior Vice President
American Century Investment Services, Inc.
[left margin]
[american century logo and text logo (reg. sm)]
American
Century
American Century
Investments
P.O. Box 419385
Kansas City, MO
64141-6385
TABLE OF CONTENTS
An Overview of the Funds .................................................. 2
Fees and Expenses ......................................................... 4
Objectives, Strategies and Risks .......................................... 5
Life Sciences Fund ................................................... 5
Technology Fund ...................................................... 8
Management ................................................................ 11
Investing with American Century ........................................... 13
Share Price and Distributions ............................................. 15
Taxes ..................................................................... 16
Multiple Class Information ................................................ 18
[left margin]
Throughout this book you'll find efinitions of key investment terms and phrases.
When you see a word printed in BLUE ITALICS, look for its definition in the left
margin.
[graphic of pointing finger]
This symbol highlights special information and helpful tips.
American Century Investments
AN OVERVIEW OF THE FUNDS
WHAT IS THE FUNDS' INVESTMENT OBJECTIVE?
These funds seek capital growth.
WHAT ARE THE FUNDS' PRIMARY INVESTMENT STRATEGIES AND PRINCIPAL RISKS?
LIFE SCIENCES - The fund managers look for stocks of growing U.S. and foreign
companies that engage in the business of providing products and services that
help promote personal health and wellness.
TECHNOLOGY - The fund managers look for stocks of growing U.S. and foreign
companies with business operations in the technology and
telecommunications-related sectors. These companies include those that the fund
managers believe will benefit significantly from advances or improvements in
technology.
The investment strategy of these funds is based on the belief that, over the
long term, stocks of companies with earnings and revenue growth have a
greater-than-average chance to increase in value over time. A more detailed
description of American Century's growth investment style and the funds'
investment strategies and risks begins on page 5 for Life Sciences and page 8
for Technology.
The funds' principal risks include
* MARKET RISK - The value of a fund's shares will go up and down based on the
performance of the companies whose securities it owns and other factors
generally affecting the securities market.
* PRICE VOLATILITY - The value of a fund's shares may fluctuate significantly
in the short term.
* CONCENTRATION (LIFE SCIENCES) - Life Sciences will focus on the medical and
healthcare industry and related industry groups. Because of this, companies
in the fund's portfolio may react similarly to market developments, such as
government regulation, subsidies, or technological advancements. As a result,
the fund's net asset values may be more volatile than those of less
concentrated funds.
* CONCENTRATION (TECHNOLOGY) - Technology will focus on the technology and
telecommunications industries and related industry groups. Because of this,
companies in the fund's portfolio may react similarly to market developments.
As a result, the fund's net asset values may be more volatile than those of
less concentrated funds.
* PRINCIPAL LOSS - As with all mutual funds, if you sell your shares when their
value is less than the price you paid, you will lose money.
WHO MAY WANT TO INVEST IN THE FUNDS?
The funds may be a good investment if you are
* seeking long-term capital growth potential from your investment
* seeking diversification of your investment portfolio through investment in
life sciences-related companies (Life Sciences)
* seeking diversification of your investment portfolio through investment in
technology and telecommunications-related companies (Technology)
* comfortable with the risks associated with investing in U.S. and foreign
securities
* comfortable with the risks associated with investing in life sciences-related
(Life Sciences) or technology and telecommunications-related (Technology)
companies
* comfortable with the funds' short-term price volatility
* investing through an IRA or other tax-advantaged retirement plan
[left margin]
[graphic of pointing finger]
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.
2 American Century Investments 1-800-345-3533
WHO MAY NOT WANT TO INVEST IN THE FUNDS?
The funds may not be a good investment if you are
* seeking current income from your investment
* investing for a short period of time
* uncomfortable with the risks associated with these funds
* uncomfortable with short-term volatility in the value of your investment
FUND PERFORMANCE HISTORY
As new funds, neither Life Sciences nor Technology has performance history as of
the date of this Prospectus.
[left margin]
[graphic of pointing finger]
For current performance information, please call us at 1-800-345-3533 or visit
American Century's Web site at www.americancentury.com.
www.americancentury.com American Century Investments 3
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 Advisor 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.
<TABLE>
<CAPTION>
ANNUAL OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
Management Distribution and Other Total Annual Fund
Fee(1) Service (12b-1) Fees(2) Expenses(3) Operating Expenses
-----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Life Sciences Fund 1.25% 0.50% 0.00% 1.75%
-----------------------------------------------------------------------------------------------
Technology Fund 1.25% 0.50% 0.00% 1.75%
</TABLE>
(1) The funds have stepped fee schedules. As a result, the funds' management fee
rates generally decrease as fund assets increase.
(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 advisor, and a portion is used to
compensate them for distribution and other shareholder services. For more
information, see Service and Distribution Fees, page 18.
(3) Other expenses, which include the fees and expenses of the funds'
independent directors and their legal counsel as well as interest, are
expected to be less than 0.005% for the current fiscal year.
EXAMPLE
The examples in the table below are intended to help you compare the costs of
investing in a fund with the costs of investing in other mutual funds. Assuming
you . . .
* invest $10,000 in the fund
* redeem all of your shares at the end of the periods shown below
* earn a 5% return each year
* incur the same operating expenses as shown above
. . . your cost of investing in the fund would be:
1 year 3 years
--------------------------------------------------------------------------------
Life Sciences Fund $177 $548
--------------------------------------------------------------------------------
Technology Fund $177 $548
[left margin]
[graphic of pointing finger]
When purchasing through a financial intermediary you may be charged a fee.
[graphic of pointing finger]
Use this example to compare the costs of investing in other funds. Of course,
your actual costs may be higher or lower.
4 American Century Investments 1-800-345-3533
OBJECTIVES, STRATEGIES AND RISKS
LIFE SCIENCES FUND
WHAT IS THE FUND'S INVESTMENT OBJECTIVE?
This fund seeks capital growth.
HOW DOES THE FUND PURSUE ITS INVESTMENT OBJECTIVE?
The fund managers will typically look for stocks of growing companies in the
life sciences sector. To achieve its objective, the fund invests primarily in
companies that engage in the business of providing products and services that
help promote health and wellness. Life science companies generally own, operate
or support health care facilities (including, among others, hospitals,
outpatient surgery facilities, dialysis centers, dental centers and physical
therapy centers), design, manufacture or sell pharmaceuticals,
bio-pharmaceuticals, medical research facilities, and medical devices and
supplies; or may provide biotechnology needed to improve agriculture,
aquaculture, forestry, chemicals, household products and cosmetics/personal care
products, environmental cleanup, food processing and forensic medicine. The fund
may invest in U.S. and foreign companies of any size.
Sometimes a company will engage in multiple lines of business. We will generally
consider a company to be in the life sciences if
* at least 50% of its gross income or net assets come from activities in the
sector;
* at least 50% of its assets are devoted to producing revenues from the sector;
or
* based on other information we obtain, we determine that its primary business
should be categorized within the sector.
The fund managers look for stocks of companies they believe will increase in
value over time, using a growth investment strategy. This strategy looks for
companies with earnings and revenues that are not only growing, but growing at a
successively faster, or accelerating pace. This strategy is based on the premise
that, over the long term, the stocks of companies with accelerating earnings and
revenues have a greater-than-average chance to increase in value.
The managers use a bottom-up approach to select stocks for the fund. That means
they first look for strong, growing companies to invest in, rather than simply
buying any company in a growing industry or sector. Using American Century's
extensive computer database, the managers track financial information for
thousands of companies to identify trends in the companies' earnings and
revenues. This information is used to help the fund managers select and hold
stocks of companies they believe will be able to sustain accelerating growth and
to sell stocks of companies whose growth begins to slow down.
In addition to locating strong companies with earnings and revenue growth, the
fund managers review and may invest in companies that experience a change in
their business that will stimulate future revenue and earnings acceleration and
lead to positive investor perception. The change typically is the result of key
events including: entry into a new market, a new product, patent or license, or
the presentation of clinical data showing efficacy for a new drug or medical
device. The fund managers also believe that it is important to diversify the
fund's holdings across geographical regions and different countries. For this
reason, the fund managers also consider the prospects for relative economic
growth among countries or regions, economic and political conditions, expected
inflation rates, currency exchange fluctuations and tax considerations when
making investments.
The fund managers do not attempt to time the market. Instead, under normal
market conditions, they intend to keep the fund essentially fully invested in
stocks regardless of the movement of stock prices generally.
[left margin]
[graphic of pointing finger]
Accelerating growth is shown, for example, by growth that is faster this quarter
than last or faster this year than the year before.
www.americancentury.com American Century Investments 5
WHAT ARE THE PRINCIPAL RISKS OF INVESTING IN THE FUND?
The value of the fund's shares depends on the value of the stocks and other
securities it owns. The value of the individual securities the fund owns will go
up and down depending on the performance of the companies that issued them,
general market and economic conditions, and investor confidence.
The fund will focus its investments among companies in the life sciences sector.
Because those investments are concentrated in a comparatively narrow segment of
the total market, the fund's investments are not as diversified as many other
mutual funds. Because of this, companies in the fund's portfolio may react
similarly to market developments, such as government regulation, subsidies, or
technological advancements. This means that the fund's net asset values may be
more volatile than those of less concentrated funds. As a result, the value of
an investment in the fund may rise or fall rapidly.
In addition, the fund is nondiversified. This means that the fund's managers may
choose to invest in a relatively small number of securities. If so, a price
change in any one of these securities may have a greater impact on the fund's
share price than would be the case if the fund were diversified. Although the
fund's managers expect it will ordinarily invest in enough securities to qualify
as a diversified fund, its nondiversified status gives them more flexibility to
invest heavily in the most attractive companies identified by the fund's
methodology.
Many faster-growing life sciences companies have limited operating histories and
their potential profitability may be dependent on regulatory approval of their
products. Many of these companies' activities are funded or subsidized by
government grants or other funding, which may be reduced or withdrawn. Changes
in government regulation also can have an impact on a company's profitability
and/or stock price. Continuing technological advances may mean rapid
obsolescence of key products and services. These business uncertainties may
increase the volatility of the prices for these companies' securities.
In addition to publicly traded securities, the fund may invest up to 15% in
privately placed securities. These securities may be considered illiquid if they
cannot be sold in seven days at approximately the price at which the fund is
valuing them. Privately placed securities are valued by the manager pursuant to
procedures established by the fund's Board of Directors.
The fund managers may buy a large amount of a company's stock quickly and may
dispose of it quickly if it no longer meets their investment criteria. While the
managers believe this strategy provides substantial appreciation potential over
the long term, in the short term it can create a significant amount of portfolio
turnover and share price volatility. This portfolio turnover and share price
volatility can be greater than that of the average stock fund. Higher portfolio
turnover leads to higher brokerage costs, which are borne by the fund. Portfolio
turnover also may affect the character of capital gains realized and distributed
by the fund, if any, since short-term capital gains are taxable as ordinary
income.
Market performance tends to be cyclical, and in the various cycles, certain
investment styles may fall in and out of favor. If the market is not favoring
the style used by the fund's management team, the fund's gains may not be as big
as, or its losses may be bigger than, other equity funds using different
investment styles.
As with all funds, your shares may be worth more or less at any given time than
the price you paid for them. If you sell your shares when the value is less than
the price you paid, you will lose money.
6 American Century Investments 1-800-345-3533
The fund may invest in companies regardless of size, which means it may invest
in smaller U.S. and foreign companies. Investing in smaller companies generally
presents unique risks. Smaller companies may have limited resources, trade less
frequently and have less publicly available information. They also may be more
sensitive to changing political and economic conditions. These factors may cause
investments in smaller companies to experience more price volatility.
The fund may invest in securities of foreign companies. Foreign investment
involves additional risks, including fluctuations in currency exchange rates,
less stable political and economic structures, reduced availability of public
information, and lack of uniform financial reporting and regulatory practices
similar to those that apply in the United States. These factors make investing
in foreign securities generally riskier than investing in U.S. securities.
Because the fund managers intend to invest the fund's assets primarily in U.S.
securities, the risks associated with foreign investments are not considered to
be principal risks of investing in the fund. To the extent the fund invests in
foreign securities, the overall risk of the fund, however, could be affected.
These and other risks of investing in the fund are described in the fund's
Statement of Additional Information.
WHAT KINDS OF SECURITIES DOES THE FUND BUY?
The fund will generally purchase equity securities of both U.S. and foreign
companies. The fund can purchase other types of securities as well, such as
domestic and foreign preferred stocks, convertible debt securities,
equity-equivalent securities, nonleveraged futures and options, notes, bonds and
other debt securities of companies, and obligations of domestic or foreign
governments and their agencies.
Although not a primary investment strategy of the fund, the fund may, as a
temporary defensive measure, invest all or a substantial portion of its assets
in cash or high-quality, short-term debt securities in the event of exceptional
market or economic conditions. To the extent the fund assumes a defensive
position, it will not be pursuing its objective of capital growth.
When the managers believe it is prudent or if they are unable to find securities
that satisfy the fund's primary investment strategy, the fund may invest a
portion of its assets in convertible debt securities, foreign securities,
short-term securities, equity-equivalent securities, nonleveraged stock index
futures contracts and other similar securities. Stock index futures contracts, a
type of derivative security, can help the fund's cash assets remain liquid while
performing more like stocks. The fund has a policy governing stock index futures
and similar derivative securities to help manage the risk of these types of
investments. For example, the managers cannot leverage the fund's assets by
investing in a derivative security. A complete description of the derivatives
policy is included in the Statement of Additional Information.
www.americancentury.com American Century Investments 7
OBJECTIVES, STRATEGIES AND RISKS
TECHNOLOGY FUND
WHAT IS THE FUND'S INVESTMENT OBJECTIVE?
This fund seeks capital growth.
HOW DOES THE FUND PURSUE ITS INVESTMENT OBJECTIVE?
The fund managers will typically look for stocks of growing companies in the
technology and telecommunications-related sector. To achieve its objective, the
fund invests primarily in companies that the fund managers believe are
principally engaged in offering, using or developing products, processes or
services that provide or will benefit significantly from technological
advancements or improvements. The fund managers consider technology and
telecommunications-related industries to include, among others, computers
(including software, products and electronic components), semiconductors,
networking, internet and on-line service providers, office automation,
telecommunications, telecommunications equipment, environmental services, media
and information services, electronics and defense and aerospace. The fund will
invest in U.S. and foreign companies of any size.
Sometimes a company will engage in multiple lines of business. We will generally
consider a company to be in the technology and telecommunication-related sector
if
* at least 50% of its gross income or net assets come from activities in the
sector;
* at least 50% of its assets are devoted to producing revenues from the sector;
or
* based on other information we obtain, we determine that its primary business
should be categorized within the sector.
The fund managers look for stocks of companies they believe will increase in
value over time, using a growth investment strategy. This strategy looks for
companies with earnings and revenues that are not only growing, but growing at a
successively faster, or accelerating pace. This strategy is based on the premise
that, over the long term, the stocks of companies with accelerating earnings and
revenues have a greater-than-average chance to increase in value.
The managers use a bottom-up approach to select stocks for the fund. That means
they first look for strong, growing companies to invest in, rather than simply
buying any company in a growing industry or sector. Using American Century's
extensive computer database, the managers track financial information for
thousands of companies to identify trends in the companies' earnings and
revenues. This information is used to help the fund managers select and hold
stocks of companies they believe will be able to sustain accelerating growth and
to sell stocks of companies whose growth begins to slow down.
In addition to locating strong companies with earnings and revenue growth, the
fund managers review and may invest in companies that experience a change in
their business that will stimulate future revenue and earnings acceleration and
lead to positive investor perception. The change typically is the result of key
events including: entry into a new market, a new product, patent or license. The
fund managers also believe that it can benefit by diversifying the fund's
holdings across geographical regions and different countries. For this reason,
the fund managers also consider the prospects for relative economic growth among
countries or regions, economic and political conditions, expected inflation
rates, currency exchange fluctuations and tax considerations when making
investments.
The fund managers do not attempt to time the market. Instead, under normal
market conditions, they intend to keep the fund essentially fully invested in
stocks regardless of the movement of stock prices generally.
[left margin]
[graphic of pointing finger]
Accelerating growth is shown, for example, by growth that is faster this quarter
than last or faster this year than the year before.
8 American Century Investments 1-800-345-3533
WHAT ARE THE PRINCIPAL RISKS OF INVESTING IN THE FUND?
The value of the fund's shares depends on the value of the stocks and other
securities it owns. The value of the individual securities a fund owns will go
up and down depending on the performance of the companies that issued them,
general market and economic conditions, and investor confidence.
The fund will focus its investments among companies in the technology and
telecommunications-related sector. Because those investments are concentrated in
a comparatively narrow segment of the total market, the fund's investments are
not as diversified as many other mutual funds. Because of this, companies in the
fund's portfolio may react similarly to market developments, such as government
regulation, subsidies, or technological advancements. This means that the fund's
net asset values may be more volatile than those of less concentrated funds. As
a result, the value of an investment in the fund may rise or fall rapidly.
In addition, the fund is nondiversified. This means that the fund's managers may
choose to invest in a relatively small number of securities. If so, a price
change in any one of these securities may have a greater impact on the fund's
share price than would be the case if the fund were diversified. Although the
fund's managers expect it will ordinarily invest in enough securities to qualify
as a diversified fund, its nondiversified status gives them more flexibility to
invest heavily in the most attractive companies identified by the fund's
methodology.
Many faster-growing technology and telecommunication-related companies have
limited operating histories. Continuing technological advances may mean rapid
obsolescence of key products and services. These business uncertainties may
increase the volatility of the prices for these companies' securities.
In addition to publicly traded securities, the fund may invest up to 15% in
privately placed securities. These securities may be considered illiquid if they
cannot be sold in seven days at approximately the price the fund is valuing
them. Privately placed securities are valued by the manager pursuant to
procedures established by the fund's Board of Directors.
The fund managers may buy a large amount of a company's stock quickly, and may
dispose of it quickly if it no longer meets their investment criteria. While the
managers believe this strategy provides substantial appreciation potential over
the long term, in the short term it can create a significant amount of portfolio
turnover and share price volatility. This portfolio turnover and share price
volatility can be greater than that of the average stock fund. Higher portfolio
turnover leads to higher brokerage costs, which are borne by the fund. Portfolio
turnover also may affect the character of capital gains realized and distributed
by the fund, if any, since short-term capital gains are taxable as ordinary
income.
Market performance tends to be cyclical, and in the various cycles, certain
investment styles may fall in and out of favor. If the market is not favoring
the style used by the fund's management team, the fund's gains may not be as big
as, or its losses may be bigger than, other equity funds using different
investment styles.
As with all funds, your shares may be worth more or less at any given time than
the price you paid for them. If you sell your shares when the value is less than
the price you paid, you will lose money.
The fund may invest in companies regardless of size, which means it may invest
in smaller U.S. and foreign companies. Investing in smaller companies generally
presents unique risks. Smaller companies may have limited resources, trade less
frequently and have less publicly available information. They also may be more
sensitive to changing political and economic conditions. These factors may cause
investments in smaller companies to experience more price volatility.
www.americancentury.com American Century Investments 9
The fund may invest in securities of foreign companies. Foreign investment
involves additional risks, including fluctuations in currency exchange rates,
less stable political and economic structures, reduced availability of public
information, and lack of uniform financial reporting and regulatory practices
similar to those that apply in the United States. These factors make investing
in foreign securities generally riskier than investing in U.S. securities.
Because the fund managers intend to invest the fund's assets primarily in U.S.
securities, the risks associated with foreign investments are not considered to
be principal risks of investing in the fund. To the extent the fund invests in
foreign securities, the overall risk of the fund, however, could be affected.
These and other risks of investing in the fund are described in the fund's
Statement of Additional Information.
WHAT KINDS OF SECURITIES DOES THE FUND BUY?
The fund will generally purchase equity securities of both U.S. and foreign
companies. The fund can purchase other types of securities as well, such as
domestic and foreign preferred stocks, convertible debt securities,
equity-equivalent securities, nonleveraged futures and options, notes, bonds and
other debt securities of companies, and obligations of domestic or foreign
governments and their agencies.
Although not a primary investment strategy of the fund, the fund may, as a
temporary defensive measure, invest all or a substantial portion of its assets
in cash or high-quality, short-term debt securities in the event of exceptional
market or economic conditions. To the extent the fund assumes a defensive
position, it will not be pursuing its objective of capital growth.
When the managers believe it is prudent or if they are unable to find securities
that satisfy the fund's primary investment strategy, the fund may invest a
portion of its assets in convertible debt securities, foreign securities,
short-term securities, equity-equivalent securities, nonleveraged stock index
futures contracts and other similar securities. Stock index futures contracts, a
type of derivative security, can help the fund's cash assets remain liquid while
performing more like stocks. The fund has a policy governing stock index futures
and similar derivative securities to help manage the risk of these types of
investments. For example, the managers cannot leverage the fund's assets by
investing in a derivative security. A complete description of the derivatives
policy is included in the Statement of Additional Information.
10 American Century Investments 1-800-345-3533
MANAGEMENT
WHO MANAGES THE FUNDS?
The Board of Directors, investment advisor and fund management team play key
roles in the management of the funds.
THE BOARD OF DIRECTORS
The Board of Directors oversees the management of the funds and meets at least
quarterly to review reports about fund operations. Although the Board of
Directors does not manage the funds, it has hired an investment advisor to do
so. More than two-thirds of the directors are independent of the funds' advisor;
that is, they are not employed by and have no financial interest in the advisor.
THE INVESTMENT ADVISOR
The funds' investment advisor is American Century Investment Management, Inc.
The advisor has been managing mutual funds since 1958 and is headquartered at
4500 Main Street, Kansas City, Missouri 64111.
The advisor is responsible for managing the investment portfolio of the funds
and directing the purchase and sale of their investment securities. The advisor
also arranges for transfer agency, custody and all other services necessary for
the funds to operate.
For the services it provides to the funds, the advisor receives a unified
management fee based on a percentage of the average net assets of each class of
shares of the funds. The amount of the management fee for a fund is calculated
on a class-by-class basis daily and paid monthly. Life Sciences will pay the
advisor a unified management fee for the Advisor Class of shares of 1.25% of the
first $1 billion of average net assets and 1.05% of the average net assets over
$1 billion. Technology will pay the advisor a unified management fee for the
Advisor Class of shares of 1.25% of the first $1 billion of average net assets
and 1.05% of the average net assets over $1 billion.
Out of that fee, the advisor pays all expenses of managing and operating the
funds except brokerage expenses, taxes, interest, fees and expenses of the
independent directors (including legal counsel fees), and extraordinary
expenses.
www.americancentury.com American Century Investments 11
THE FUND MANAGEMENT TEAMS
The advisor uses teams of portfolio managers, assistant portfolio managers and
analysts to manage the funds. The teams meet regularly to review portfolio
holdings and discuss purchase and sale activity. Team members buy and sell
securities for the funds as they see fit, guided by the funds' investment
objectives and strategies.
The portfolio managers on the investment teams are identified below:
Life Sciences
ARNOLD K. DOUVILLE
Mr. Douville, Vice President and Portfolio Manager, has been a member of the
team that manages the Life Sciences Fund since its inception in June 2000, and
has been a member of the team that manages Vista (another American Century
equity fund) since joining American Century in November 1997. Before joining
American Century, he served as Senior Portfolio Manager for Munder Capital
Management from September 1989 to October 1997. He has a bachelor's degree in
economics from the U.S. Air Force Academy and an MBA in finance, statistics and
economics from the University of Chicago.
CHRISTY TURNER
Ms. Turner, Portfolio Manager, has been a member of the team that manages the
Life Sciences Fund since its inception in June 2000. Prior to that, she worked
for four years as an investment analyst for the health care sector for other
American Century equity funds, including Ultra, Select, New Opportunities and
Giftrust. Before joining American Century in 1996, she worked as an investment
analyst for First Chicago Investment Management Company and as an audit manager
for KPMG Peat Marwick. She has a bachelor's degree in business administration in
accounting from the University of Central Florida and an MBA in finance from the
University of North Carolina. She is a Chartered Financial Analyst.
Technology
CHRISTOPHER K. BOYD
Mr. Boyd, Vice President and Senior Portfolio Manager, has been a member of the
team that manages the Technology Fund since its inception in June 2000, and has
been a member of the team that manages Giftrust and New Opportunities since
rejoining American Century in January 1998. With the exception of 1997, he has
been with American Century since March 1988 and served as a Portfolio Manager
since December 1992. During 1997, he was in private practice as an investment
advisor. He has a bachelor of science from the University of Kansas and an MBA
from Dartmouth College. He is a Chartered Financial Analyst.
DOUGLAS C. DAY
Mr. Day, Portfolio Manager, has been a member of the team that manages the
Technology Fund since its inception in June 2000. Prior to that, he worked for
three and one-half years as an investment analyst for other American Century
equity funds, including Ultra and Select. Before joining American Century in
October 1996, he worked as an equity research analyst for Salomon Brothers from
May 1995 to October 1996. He has a bachelor's degree in economics from Emory
University.
FUNDAMENTAL INVESTMENT POLICIES
Fundamental investment policies contained in the Statement of Additional
Information and the investment objectives of the funds may not be changed
without shareholder approval. The Board of Directors may change any other
policies and investment strategies.
[left margin]
[graphic of pointing finger]
CODE OF ETHICS
American Century has a Code of Ethics designed to ensure that the interests of
fund shareholders come before the interests of the people who manage the funds.
Among other provisions, the Code of Ethics prohibits portfolio managers and
other investment personnel from buying securities in an initial public offering
or profiting from the purchase and sale of the same security within 60 calendar
days. In addition, the Code of Ethics requires portfolio managers and other
employees with access to information about the purchase or sale of securities by
the funds to obtain approval before executing permitted personal trades.
12 American Century Investments 1-800-345-3533
INVESTING WITH AMERICAN CENTURY
ELIGIBILITY FOR ADVISOR CLASS SHARES
The Advisor Class shares are intended for purchase by participants in
employer-sponsored retirement or savings plans and for persons purchasing shares
through broker-dealers, banks, insurance companies, and other financial
intermediaries that provide various administrative and distribution services.
INVESTING THROUGH FINANCIAL INTERMEDIARIES
If you do business with us through a financial intermediary or a retirement
plan, your ability to purchase, exchange and redeem shares will depend on the
policies of that entity. Some policy differences may include
* minimum investment requirements
* exchange policies
* fund choices
* cutofftime for investments
Please contact your financial intermediary or plan sponsor for a complete
description of its policies.
Certain financial intermediaries perform recordkeeping and administrative
services for their clients that would otherwise be performed by American
Century's transfer agent. In some circumstances, American Century will pay the
service provider a fee for performing those services.
Although fund share transactions may be made directly with American Century at
no charge, you also may purchase, redeem and exchange fund shares through
financial intermediaries that charge a transaction-based or other fee for their
services. Those charges are retained by the intermediary and are not shared with
American Century or the funds.
American Century has contracts with certain financial intermediaries requiring
them to track the time investment orders are received and to comply with
procedures relating to the transmission of orders. The funds have authorized
these intermediaries to accept orders on each fund's behalf up to the time at
which the net asset value is determined. If those orders are transmitted to
American Century and paid for in accordance with the contract, they will be
priced at the net asset value next determined after your request is received in
the form required by the intermediary on each fund's behalf.
[left margin]
[graphic of pointing finger]
Financial intermediaries include banks, broker-dealers, insurance companies and
investment advisors.
www.americancentury.com American Century Investments 13
MODIFYING OR CANCELING AN INVESTMENT
Investment instructions are irrevocable. That means that once you have mailed or
otherwise transmitted your investment instruction, you may not modify or cancel
it. Each fund reserves the right to suspend the offering of shares for a period
of time, and it reserves the right to reject any specific purchase order
(including purchases by exchange or conversion). Additionally, we may refuse a
purchase if, in our judgment, it is of a size that would disrupt the management
of a fund.
ABUSIVE TRADING PRACTICES
We do not permit market timing or other abusive trading practices in our funds.
Excessive, short-term (market timing) or other abusive trading practices may
disrupt portfolio management strategies and harm fund performance. To minimize
harm to the fund and its shareholders, we reserve the right to reject any
purchase order (including exchanges) from any investor we believe has a history
of abusive trading or whose trading, in our judgment, has been or may be
disruptive to a fund. In making this judgment, we may consider trading done in
multiple accounts under common ownership or control. We also reserve the right
to delay delivery of your redemption proceeds--up to seven days--or to honor
certain redemptions with securities, rather than cash, as described in the next
section.
SPECIAL REQUIREMENTS FOR LARGE REDEMPTIONS
If, during any 90-day period, you redeem fund shares worth more than $250,000
(or 1% of the assets of the fund if that percentage is less than $250,000), we
reserve the right to pay part or all of the redemption proceeds in excess of
this amount in readily marketable securities instead of in cash. These
securities would be selected from the fund's portfolio by the fund managers. A
payment in securities can help the fund's remaining shareholders avoid tax
liabilities that they might otherwise have incurred had the fund sold securities
prematurely to pay the entire redemption amount in cash.
We will value these securities in the same manner as we do in computing the
fund's net asset value. We may provide these securities in lieu of cash without
prior notice.
Also, if payment is made in securities, a shareholder may have to pay brokerage
or other transaction costs to convert the securities to cash.
If your redemption would exceed this limit and you would like to avoid being
paid in securities, please provide us 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. This minimizes the effect of the
redemption on the fund and its remaining investors.
14 American Century Investments 1-800-345-3533
SHARE PRICE AND DISTRIBUTIONS
SHARE PRICE
American Century determines the NET ASSET VALUE (NAV) of each fund as of the
close of regular trading on the New York Stock Exchange (usually 4 p.m. Eastern
time) on each day the Exchange is open. On days when the Exchange is not open
(including certain U.S. holidays), we do not calculate the NAV. The NAV of a
fund share is the current value of the fund's assets, minus any liabilities,
divided by the number of fund shares outstanding.
If current market prices of securities owned by a fund are not readily
available, the advisor may determine their fair value in accordance with
procedures adopted by the fund's Board. Trading of securities in foreign markets
may not take place every day the Exchange is open. Also, trading in some foreign
markets and on some electronic trading networks may take place on weekends or
holidays when a fund's NAV is not calculated. So, the value of a fund's
portfolio may be affected on days when you can't purchase or redeem shares of
the fund.
We will price your purchase, exchange or redemption at the NAV next determined
after we receive your transaction request in good order.
DISTRIBUTIONS
Federal tax laws require each fund to make distributions to its shareholders in
order to qualify as a "regulated investment company." Qualification as a
regulated investment company means the funds will not be subject to state or
federal income tax on amounts distributed. The distributions generally consist
of dividends and interest received, as well as CAPITAL GAINS realized on the
sale of investment securities. Each fund generally pays distributions from net
income, if any, once a year in December. Distributions from realized capital
gains are paid twice a year, usually in March and December. A fund may make more
frequent distributions, if necessary, to comply with Internal Revenue Code
provisions.
You will participate in fund distributions, when they are declared, starting the
day after your purchase is effective. For example, if you purchase shares on a
day that a distribution is declared, you will not receive that distribution. If
you redeem shares, you will receive any distribution declared on the day you
redeem. If you redeem all shares, we will include any such distributions
received with your redemption proceeds.
Participants in employer-sponsored retirement or savings plans must reinvest all
distributions. For shareholders investing through taxable accounts, we will
reinvest distributions unless you elect to receive them in cash. Please consult
your services guide for further information regarding distributions and your
distribution options.
[left margin]
The NET ASSET VALUE, or NAV, of a fund is the price of the fund's shares.
CAPITAL GAINS are increases in the values of capital assets, such as stock, from
the time the assets are purchased.
www.americancentury.com American Century Investments 15
TAXES
The tax consequences of owning shares of the funds will vary depending on
whether you own them through a taxable or tax-deferred account. Tax consequences
result from distributions by the funds of dividend and interest income they have
received or capital gains they have generated through their investment
activities. Tax consequences also result from sales of fund shares by investors
after the net asset value has increased or decreased.
Tax-Deferred Accounts
If you purchase fund shares through a tax-deferred account, such as an IRA or a
qualified employer-sponsored retirement or savings plan, income and capital
gains distributions usually will not be subject to current taxation, but will
accumulate in your account under the plan on a tax-deferred basis. Likewise,
moving from one fund to another fund within a plan or tax-deferred account
generally will not cause you to be taxed. For information about the tax
consequences of making purchases or withdrawals through a tax-deferred account,
please consult your plan administrator, your summary plan description or a
professional tax advisor.
Taxable Accounts
If you own fund shares through a taxable account, distributions by the funds and
your sales of fund shares may cause you to be taxed on your investment.
If you invest through a taxable account, you may be able to claim a foreign tax
credit for any foreign income taxes paid by the funds. In order to qualify for
this tax credit, certain requirements must be satisfied. Please consult the
Statement of Additional Information for a more complete discussion of the tax
consequences of owning shares of the funds.
Taxability of Distributions
Fund distributions may consist of income earned by the funds from sources such
as dividends and interest, or capital gains generated from the sale of fund
investments. Distributions of income are taxed as ordinary income. Distributions
of capital gains are classified either as short term or long term and are taxed
as follows:
<TABLE>
Type of Distribution Tax Rate for 15% Bracket Tax Rate for 28% Bracket or Above
--------------------------------------------------------------------------------------
Short-term capital gains Ordinary income rate Ordinary income rate
--------------------------------------------------------------------------------------
<S> <C> <C>
Long-term capital gains 10% 20%
</TABLE>
The tax status of any distributions of capital gains is determined by how long
the funds held the underlying security that was sold, not by how long you have
been invested in the funds, or whether you reinvest your distributions in
additional shares or take them in cash. American Century will inform you of the
tax status of fund distributions for each calendar year in an annual tax mailing
(Form 1099-DIV).
Distributions also may be subject to state and local taxes. Because everyone's
tax situation is unique, you may want to consult your tax professional about
federal, state and local tax consequences.
[left margin]
[graphic of pointing finger]
BUYING A DIVIDEND
Purchasing fund shares in a taxable account shortly before a distribution is
sometimes known as buying a dividend. In taxable accounts, you must pay income
taxes on the distribution whether you reinvest the distribution or take it in
cash. In addition, you will have to pay taxes on the distribution whether the
value of your investment decreased, increased or remained the same after you
bought the fund shares.
The risk in buying a dividend is that the fund's portfolio may build up taxable
gains throughout the period covered by a distribution, as securities are sold at
a profit. The funds distribute those gains to you, after subtracting any losses,
even if you did not own the shares when the gains occurred.
If you buy a dividend, you incur the full tax liability of the distribution
period, but you may not enjoy the full benefit of the gains realized in the
fund's portfolio.
16 American Century Investments 1-800-345-3533
Taxes on Transactions
Your redemptions--including exchanges to other American Century funds--are
subject to capital gains tax. The table above can provide a general guide for
your potential tax liability when selling or exchanging fund shares. Short-term
capital gains are gains on fund shares you held for 12 months or less. Long-term
capital gains are gains on fund shares you held for more than 12 months. If your
shares decrease in value, their sale or exchange will result in a long-term or
short-term capital loss. However, you should note that 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 those shares. 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
Internal Revenue Code. This may result in a postponement of the recognition of
such loss for federal income tax purposes.
If you have not certified to us that your Social Security number or tax
identification number is correct and that you are not subject to 31%
withholding, we are required to withhold and remit 31% of dividends, capital
gains distributions and redemptions to the IRS.
www.americancentury.com American Century Investments 17
MULTIPLE CLASS INFORMATION
American Century offers three classes of the funds: Investor Class,
Institutional Class and Advisor Class. The shares offered by this Prospectus are
Advisor Class shares and are offered primarily through employer-sponsored
retirement plans, or through institutions like banks, broker-dealers and
insurance companies.
The other classes have different fees, expenses and/or minimum investment
requirements from the Advisor Class. The difference in the fee structures
between the classes is the result of their separate arrangements for shareholder
and distribution services and not the result of any difference in amounts
charged by the advisor for core investment advisory services. Accordingly, the
core investment advisory expenses do not vary by class. Different fees and
expenses will affect performance. For additional information concerning the
other classes of shares not offered by this Prospectus, call us at
* 1-800-345-2021 for Investor Class shares
* 1-800-345-3533 for Institutional Class shares
You also can contact a sales representative or financial intermediary who offers
those classes of shares.
Except as described below, all classes of shares of the funds have identical
voting, dividend, liquidation and other rights, preferences, terms and
conditions. The only differences between the classes are (a) each class may be
subject to different expenses specific to that class; (b) each class has a
different identifying designation or name; (c) each class has exclusive voting
rights with respect to matters solely affecting such class; (d) each class may
have different exchange privileges; and (e) the Institutional Class may provide
for automatic conversion from that class into shares of the Investor Class of
the same fund.
Service and Distribution Fees
Investment Company Act Rule 12b-1 permits mutual funds that adopt a written plan
to pay certain expenses associated with the distribution of their shares out of
fund assets. The funds' Advisor Class shares have a 12b-1 Plan. Under the Plan,
the funds' Advisor Class pays an annual fee of 0.50% of Advisor Class average
net assets, half for certain shareholder and administrative services and half
for distribution services. The advisor, as paying agent for the funds, pays all
or a portion of such fees to the banks, broker-dealers and insurance companies
that make such shares available. Because these fees are paid out of a fund's
assets on an ongoing basis, over time these fees will increase the cost of your
investment and may cost you more than paying other types of sales charges. For
additional information about the Plan and its terms, see Multiple Class
Structure - Master Distribution and Shareholder Services Plan in the Statement
of Additional Information.
18 American Century Investments 1-800-345-3533
NOTES
www.americancentury.com American Century Investments 19
NOTES
20 American Century Investments 1-800-345-3533
NOTES
www.americancentury.com American Century Investments 21
MORE INFORMATION ABOUT THE FUNDS IS CONTAINED IN THESE DOCUMENTS
Annual and Semiannual Reports
These reports contain more information about the funds' investments and the
market conditions and investment strategies that significantly affected the
funds' performance during the most recent fiscal period.
Statement of Additional Information (SAI)
The SAI contains a more detailed, legal description of the funds' operations,
investment restrictions, policies and practices. The SAI is incorporated by
reference into this Prospectus. This means that it is legally part of this
Prospectus, even if you don't request a copy.
You may obtain a free copy of the SAI or annual and semiannual reports, and ask
questions about the funds or your accounts, by contacting American Century at
the address or telephone numbers listed below.
You also can get information about the funds (including the SAI) from the
Securities and Exchange Commission (SEC). The SEC charges a duplicating fee to
provide copies of this information.
In person SEC Public Reference Room
Washington, D.C.
Call 202-942-8090 for
location and hours.
On the Internet * EDGAR database at www.sec.gov
* By email request at [email protected]
By mail SEC Public Reference Section
Washington, D.C. 20549-0102
Investment Company Act File No. 811-6247
[american century logo and text logo (reg. sm)]
American
Century
AMERICAN CENTURY INVESTMENTS
P.O. Box 419385
Kansas City, Missouri 64141-6385
1-800-345-3533 or 816-531-5575
0008
SH-PRS-21727
<PAGE>
Your
AMERICAN CENTURY
prospectus
Life Sciences Fund
Technology Fund
MAY 25, 2000
REVISED AUGUST 7, 2000
INSTITUTIONAL CLASS
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES OR DETERMINED IF THIS PROSPECTUS IS ACCURATE OR COMPLETE. ANYONE WHO
TELLS YOU OTHERWISE IS COMMITTING A CRIME.
Funds Distributor, Inc. and
American Century
Investment Services, Inc.,
Distributors
[american century logo and text logo (reg. sm)]
American
Century
Dear Investor,
Planning and maintaining your investment portfolio is a big job. However, an
easy-to-understand Prospectus can make your work a lot less daunting. We hope
you'll find this Prospectus easy to understand, and more importantly, that it
gives you confidence in the investment decisions you have made or are soon to
make.
As you begin to read through this Prospectus, take a look at the table of
contents to understand how it is organized. The first three sections take a
close-up look at the funds.
An Overview of the Funds - Learn about fund goals, strategies and risks, and
who may or may not want to invest.
Fees and Expenses - Find out about fund management fees and other expenses
associated with investing.
Objectives, Strategies and Risks - Take a more detailed look at the principal
investment objectives, strategies and risks presented in the Overview of the
Funds section.
As you continue to read, the Management section will acquaint you with the
fund management teams, and Investing with American Century gives an overview
about how to invest and manage your account.
Share Price and Distributions and Taxes wrap up the Prospectus with important
financial information you'll need to make an informed decision.
Naturally, you may have questions about investing after you read through the
Prospectus. Our Web site, www.americancentury.com, offers information that could
answer many of your questions. Or, a Service Representative will be happy to
help weekdays, 8 a.m. to 5:30 p.m. Central time. Give us a call at
1-800-345-3533.
Sincerely,
/signature Mark Killen/
Mark Killen
Senior Vice President
American Century Investment Services, Inc.
[left margin]
[american century logo and text logo (reg. sm)]
American
Century
American Century
Investments
P.O. Box 419385
Kansas City, MO
64141-6385
TABLE OF CONTENTS
An Overview of the Funds .................................................. 2
Fees and Expenses ......................................................... 4
Objectives, Strategies and Risks .......................................... 5
Life Sciences Fund ................................................... 5
Technology Fund ...................................................... 8
Management ................................................................ 11
Investing with American Century ........................................... 13
Share Price and Distributions ............................................. 17
Taxes ..................................................................... 18
Multiple Class Information ................................................ 20
[left margin]
Throughout this book you'll find definitions of key investment terms and
phrases. When you see a word printed in BLUE ITALICS, look for its definition in
the left margin.
[graphic of pointing finger]
This symbol highlights special information and helpful tips.
American Century Investments
AN OVERVIEW OF THE FUNDS
WHAT IS THE FUNDS' INVESTMENT OBJECTIVE?
These funds seek capital growth.
WHAT ARE THE FUNDS' PRIMARY INVESTMENT STRATEGIES AND PRINCIPAL RISKS?
LIFE SCIENCES - The fund managers look for stocks of growing U.S. and foreign
companies that engage in the business of providing products and services that
help promote personal health and wellness.
TECHNOLOGY - The fund managers look for stocks of growing U.S. and foreign
companies with business operations in the technology and
telecommunications-related sectors. These companies include those that the fund
managers believe will benefit significantly from advances or improvements in
technology.
The investment strategy of these funds is based on the belief that, over the
long term, stocks of companies with earnings and revenue growth have a
greater-than-average chance to increase in value over time. A more detailed
description of American Century's growth investment style and the funds'
investment strategies and risks begins on page 5 for Life Sciences and page 8
for Technology.
The funds' principal risks include
* MARKET RISK - The value of a fund's shares will go up and down based on the
performance of the companies whose securities it owns and other factors
generally affecting the securities market.
* PRICE VOLATILITY - The value of a fund's shares may fluctuate significantly
in the short term.
* CONCENTRATION (LIFE SCIENCES) - Life Sciences will focus on the medical and
healthcare industry and related industry groups. Because of this, companies
in the fund's portfolio may react similarly to market developments, such as
government regulation, subsidies, or technological advancements. As a result,
the fund's net asset values may be more volatile than those of less
concentrated funds.
* CONCENTRATION (TECHNOLOGY) - Technology will focus on the technology and
telecommunications industries and related industry groups. Because of this,
companies in the fund's portfolio may react similarly to market developments.
As a result, the fund's net asset values may be more volatile than those of
less concentrated funds.
* PRINCIPAL LOSS - As with all mutual funds, if you sell your shares when their
value is less than the price you paid, you will lose money.
WHO MAY WANT TO INVEST IN THE FUNDS?
The funds may be a good investment if you are
* seeking long-term capital growth potential from your investment
* seeking diversification of your investment portfolio through investment in
life sciences-related companies (Life Sciences)
* seeking diversification of your investment portfolio through investment in
technology and telecommunications-related companies (Technology)
* comfortable with the risks associated with investing in U.S. and foreign
securities
* comfortable with the risks associated with investing in life sciences-related
(Life Sciences) or technology and telecommunications-related (Technology)
companies
* comfortable with the funds' short-term price volatility
* investing through an IRA or other tax-advantaged retirement plan
[left margin]
[graphic of pointing finger]
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.
2 American Century Investments 1-800-345-3533
WHO MAY NOT WANT TO INVEST IN THE FUNDS?
The funds may not be a good investment if you are
* seeking current income from your investment
* investing for a short period of time
* uncomfortable with the risks associated with these funds
* uncomfortable with short-term volatility in the value of your investment
FUND PERFORMANCE HISTORY
As new funds, neither Life Sciences nor Technology has performance history as of
the date of this Prospectus.
[left margin]
[graphic of pointing finger]
For current performance information, please call us at 1-800-345-3533 or visit
American Century's Web site at www.americancentury.com.
www.americancentury.com American Century Investments 3
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 Institutional 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.
<TABLE>
<CAPTION>
ANNUAL OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
Management Distribution and Other Total Annual Fund
Fee(1) Service (12b-1) Fees Expenses(2) Operating Expenses
-------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Life Sciences Fund 1.30% None 0.00% 1.30%
-------------------------------------------------------------------------------------------
Technology Fund 1.30% None 0.00% 1.30%
</TABLE>
(1) The funds have stepped fee schedules. 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 directors and their legal counsel as well as interest, are
expected to be less than 0.005% for the current fiscal year.
EXAMPLE
The examples in the table below are intended to help you compare the costs of
investing in a fund with the costs of investing in other mutual funds. Assuming
you . . .
* invest $10,000 in the fund
* redeem all of your shares at the end of the periods shown below
* earn a 5% return each year
* incur the same operating expenses as shown above
. . . your cost of investing in the fund would be:
1 year 3 years
--------------------------------------------------------------------------------
Life Sciences Fund $132 $410
--------------------------------------------------------------------------------
Technology Fund $132 $410
[left margin]
[graphic of pointing finger]
When purchasing through a financial intermediary you may be charged a fee.
[graphic of pointing finger]
Use this example to compare the costs of investing in other funds. Of course,
your actual costs may be higher or lower.
4 American Century Investments 1-800-345-3533
OBJECTIVES, STRATEGIES AND RISKS
LIFE SCIENCES FUND
WHAT IS THE FUND'S INVESTMENT OBJECTIVE?
This fund seeks capital growth.
HOW DOES THE FUND PURSUE ITS INVESTMENT OBJECTIVE?
The fund managers will typically look for stocks of growing companies in the
life sciences sector. To achieve its objective, the fund invests primarily in
companies that engage in the business of providing products and services that
help promote health and wellness. Life science companies generally own, operate
or support health care facilities (including, among others, hospitals,
outpatient surgery facilities, dialysis centers, dental centers and physical
therapy centers), design, manufacture or sell pharmaceuticals,
bio-pharmaceuticals, medical research facilities, and medical devices and
supplies; or may provide biotechnology needed to improve agriculture,
aquaculture, forestry, chemicals, household products and cosmetics/personal care
products, environmental cleanup, food processing and forensic medicine. The fund
may invest in U.S. and foreign companies of any size.
Sometimes a company will engage in multiple lines of business. We will generally
consider a company to be in the life sciences if
* at least 50% of its gross income or net assets come from activities in the
sector;
* at least 50% of its assets are devoted to producing revenues from the sector;
or
* based on other information we obtain, we determine that its primary business
should be categorized within the sector.
The fund managers look for stocks of companies they believe will increase in
value over time, using a growth investment strategy. This strategy looks for
companies with earnings and revenues that are not only growing, but growing at a
successively faster, or accelerating pace. This strategy is based on the premise
that, over the long term, the stocks of companies with accelerating earnings and
revenues have a greater-than-average chance to increase in value.
The managers use a bottom-up approach to select stocks for the fund. That means
they first look for strong, growing companies to invest in, rather than simply
buying any company in a growing industry or sector. Using American Century's
extensive computer database, the managers track financial information for
thousands of companies to identify trends in the companies' earnings and
revenues. This information is used to help the fund managers select and hold
stocks of companies they believe will be able to sustain accelerating growth and
to sell stocks of companies whose growth begins to slow down.
In addition to locating strong companies with earnings and revenue growth, the
fund managers review and may invest in companies that experience a change in
their business that will stimulate future revenue and earnings acceleration and
lead to positive investor perception. The change typically is the result of key
events including: entry into a new market, a new product, patent or license, or
the presentation of clinical data showing efficacy for a new drug or medical
device. The fund managers also believe that it is important to diversify the
fund's holdings across geographical regions and different countries. For this
reason, the fund managers also consider the prospects for relative economic
growth among countries or regions, economic and political conditions, expected
inflation rates, currency exchange fluctuations and tax considerations when
making investments.
The fund managers do not attempt to time the market. Instead, under normal
market conditions, they intend to keep the fund essentially fully invested in
stocks regardless of the movement of stock prices generally.
[left margin]
[graphic of pointing finger]
Accelerating growth is shown, for example, by growth that is faster this quarter
than last or faster this year than the year before.
www.americancentury.com American Century Investments 5
WHAT ARE THE PRINCIPAL RISKS OF INVESTING IN THE FUND?
The value of the fund's shares depends on the value of the stocks and other
securities it owns. The value of the individual securities the fund owns will go
up and down depending on the performance of the companies that issued them,
general market and economic conditions, and investor confidence.
The fund will focus its investments among companies in the life sciences sector.
Because those investments are concentrated in a comparatively narrow segment of
the total market, the fund's investments are not as diversified as many other
mutual funds. Because of this, companies in the fund's portfolio may react
similarly to market developments, such as government regulation, subsidies, or
technological advancements. This means that the fund's net asset values may be
more volatile than those of less concentrated funds. As a result, the value of
an investment in the fund may rise or fall rapidly.
In addition, the fund is nondiversified. This means that the fund's managers may
choose to invest in a relatively small number of securities. If so, a price
change in any one of these securities may have a greater impact on the fund's
share price than would be the case if the fund were diversified. Although the
fund's managers expect it will ordinarily invest in enough securities to qualify
as a diversified fund, its nondiversified status gives them more flexibility to
invest heavily in the most attractive companies identified by the fund's
methodology.
Many faster-growing life sciences companies have limited operating histories and
their potential profitability may be dependent on regulatory approval of their
products. Many of these companies' activities are funded or subsidized by
government grants or other funding, which may be reduced or withdrawn. Changes
in government regulation also can have an impact on a company's profitability
and/or stock price. Continuing technological advances may mean rapid
obsolescence of key products and services. These business uncertainties may
increase the volatility of the prices for these companies' securities.
In addition to publicly traded securities, the fund may invest up to 15% in
privately placed securities. These securities may be considered illiquid if they
cannot be sold in seven days at approximately the price at which the fund is
valuing them. Privately placed securities are valued by the manager pursuant to
procedures established by the fund's Board of Directors.
The fund managers may buy a large amount of a company's stock quickly and may
dispose of it quickly if it no longer meets their investment criteria. While the
managers believe this strategy provides substantial appreciation potential over
the long term, in the short term it can create a significant amount of portfolio
turnover and share price volatility. This portfolio turnover and share price
volatility can be greater than that of the average stock fund. Higher portfolio
turnover leads to higher brokerage costs, which are borne by the fund. Portfolio
turnover also may affect the character of capital gains realized and distributed
by the fund, if any, since short-term capital gains are taxable as ordinary
income.
Market performance tends to be cyclical, and in the various cycles, certain
investment styles may fall in and out of favor. If the market is not favoring
the style used by the fund's management team, the fund's gains may not be as big
as, or its losses may be bigger than, other equity funds using different
investment styles.
As with all funds, your shares may be worth more or less at any given time than
the price you paid for them. If you sell your shares when the value is less than
the price you paid, you will lose money.
6 American Century Investments 1-800-345-3533
The fund may invest in companies regardless of size, which means it may invest
in smaller U.S. and foreign companies. Investing in smaller companies generally
presents unique risks. Smaller companies may have limited resources, trade less
frequently and have less publicly available information. They also may be more
sensitive to changing political and economic conditions. These factors may cause
investments in smaller companies to experience more price volatility.
The fund may invest in securities of foreign companies. Foreign investment
involves additional risks, including fluctuations in currency exchange rates,
less stable political and economic structures, reduced availability of public
information, and lack of uniform financial reporting and regulatory practices
similar to those that apply in the United States. These factors make investing
in foreign securities generally riskier than investing in U.S. securities.
Because the fund managers intend to invest the fund's assets primarily in U.S.
securities, the risks associated with foreign investments are not considered to
be principal risks of investing in the fund. To the extent the fund invests in
foreign securities, the overall risk of the fund, however, could be affected.
These and other risks of investing in the fund are described in the fund's
Statement of Additional Information.
WHAT KINDS OF SECURITIES DOES THE FUND BUY?
The fund will generally purchase equity securities of both U.S. and foreign
companies. The fund can purchase other types of securities as well, such as
domestic and foreign preferred stocks, convertible debt securities,
equity-equivalent securities, nonleveraged futures and options, notes, bonds and
other debt securities of companies, and obligations of domestic or foreign
governments and their agencies.
Although not a primary investment strategy of the fund, the fund may, as a
temporary defensive measure, invest all or a substantial portion of its assets
in cash or high-quality, short-term debt securities in the event of exceptional
market or economic conditions. To the extent the fund assumes a defensive
position, it will not be pursuing its objective of capital growth.
When the managers believe it is prudent or if they are unable to find securities
that satisfy the fund's primary investment strategy, the fund may invest a
portion of its assets in convertible debt securities, foreign securities,
short-term securities, equity-equivalent securities, nonleveraged stock index
futures contracts and other similar securities. Stock index futures contracts, a
type of derivative security, can help the fund's cash assets remain liquid while
performing more like stocks. The fund has a policy governing stock index futures
and similar derivative securities to help manage the risk of these types of
investments. For example, the managers cannot leverage the fund's assets by
investing in a derivative security. A complete description of the derivatives
policy is included in the Statement of Additional Information.
www.americancentury.com American Century Investments 7
OBJECTIVES, STRATEGIES AND RISKS
TECHNOLOGY FUND
WHAT IS THE FUND'S INVESTMENT OBJECTIVE?
This fund seeks capital growth.
HOW DOES THE FUND PURSUE ITS INVESTMENT OBJECTIVE?
The fund managers will typically look for stocks of growing companies in the
technology and telecommunications-related sector. To achieve its objective, the
fund invests primarily in companies that the fund managers believe are
principally engaged in offering, using or developing products, processes or
services that provide or will benefit significantly from technological
advancements or improvements. The fund managers consider technology and
telecommunications-related industries to include, among others, computers
(including software, products and electronic components), semiconductors,
networking, internet and on-line service providers, office automation,
telecommunications, telecommunications equipment, environmental services, media
and information services, electronics and defense and aerospace. The fund will
invest in U.S. and foreign companies of any size.
Sometimes a company will engage in multiple lines of business. We will generally
consider a company to be in the technology and telecommunications-related sector
if
* at least 50% of its gross income or net assets come from activities in the
sector;
* at least 50% of its assets are devoted to producing revenues from the sector;
or
* based on other information we obtain, we determine that its primary business
should be categorized within the sector.
The fund managers look for stocks of companies they believe will increase in
value over time, using a growth investment strategy. This strategy looks for
companies with earnings and revenues that are not only growing, but growing at a
successively faster, or accelerating pace. This strategy is based on the premise
that, over the long term, the stocks of companies with accelerating earnings and
revenues have a greater-than-average chance to increase in value.
The managers use a bottom-up approach to select stocks for the fund. That means
they first look for strong, growing companies to invest in, rather than simply
buying any company in a growing industry or sector. Using American Century's
extensive computer database, the managers track financial information for
thousands of companies to identify trends in the companies' earnings and
revenues. This information is used to help the fund managers select and hold
stocks of companies they believe will be able to sustain accelerating growth and
to sell stocks of companies whose growth begins to slow down.
In addition to locating strong companies with earnings and revenue growth, the
fund managers review and may invest in companies that experience a change in
their business that will stimulate future revenue and earnings acceleration and
lead to positive investor perception. The change typically is the result of key
events including: entry into a new market, a new product, patent or license. The
fund managers also believe that it can benefit by diversifying the fund's
holdings across geographical regions and different countries. For this reason,
the fund managers also consider the prospects for relative economic growth among
countries or regions, economic and political conditions, expected inflation
rates, currency exchange fluctuations and tax considerations when making
investments.
The fund managers do not attempt to time the market. Instead, under normal
market conditions, they intend to keep the fund essentially fully invested in
stocks regardless of the movement of stock prices generally.
[left margin]
[graphic of pointing finger]
Accelerating growth is shown, for example, by growth that is faster this quarter
than last or faster this year than the year before.
8 American Century Investments 1-800-345-3533
WHAT ARE THE PRINCIPAL RISKS OF INVESTING IN THE FUND?
The value of the fund's shares depends on the value of the stocks and other
securities it owns. The value of the individual securities a fund owns will go
up and down depending on the performance of the companies that issued them,
general market and economic conditions, and investor confidence.
The fund will focus its investments among companies in the technology and
telecommunications-related sector. Because those investments are concentrated in
a comparatively narrow segment of the total market, the fund's investments are
not as diversified as many other mutual funds. Because of this, companies in the
fund's portfolio may react similarly to market developments, such as government
regulation, subsidies, or technological advancements. This means that the fund's
net asset values may be more volatile than those of less concentrated funds. As
a result, the value of an investment in the fund may rise or fall rapidly.
In addition, the fund is nondiversified. This means that the fund's managers may
choose to invest in a relatively small number of securities. If so, a price
change in any one of these securities may have a greater impact on the fund's
share price than would be the case if the fund were diversified. Although the
fund's managers expect it will ordinarily invest in enough securities to qualify
as a diversified fund, its nondiversified status gives them more flexibility to
invest heavily in the most attractive companies identified by the fund's
methodology.
Many faster-growing technology and telecommunications-related companies have
limited operating histories. Continuing technological advances may mean rapid
obsolescence of key products and services. These business uncertainties may
increase the volatility of the prices for these companies' securities.
In addition to publicly traded securities, the fund may invest up to 15% in
privately placed securities. These securities may be considered illiquid if they
cannot be sold in seven days at approximately the price the fund is valuing
them. Privately placed securities are valued by the manager pursuant to
procedures established by the fund's Board of Directors.
The fund managers may buy a large amount of a company's stock quickly, and may
dispose of it quickly if it no longer meets their investment criteria. While the
managers believe this strategy provides substantial appreciation potential over
the long term, in the short term it can create a significant amount of portfolio
turnover and share price volatility. This portfolio turnover and share price
volatility can be greater than that of the average stock fund. Higher portfolio
turnover leads to higher brokerage costs, which are borne by the fund. Portfolio
turnover also may affect the character of capital gains realized and distributed
by the fund, if any, since short-term capital gains are taxable as ordinary
income.
Market performance tends to be cyclical, and in the various cycles, certain
investment styles may fall in and out of favor. If the market is not favoring
the style used by the fund's management team, the fund's gains may not be as big
as, or its losses may be bigger than, other equity funds using different
investment styles.
As with all funds, your shares may be worth more or less at any given time than
the price you paid for them. If you sell your shares when the value is less than
the price you paid, you will lose money.
The fund may invest in companies regardless of size, which means it may invest
in smaller U.S. and foreign companies. Investing in smaller companies generally
presents unique risks. Smaller companies may have limited resources, trade less
frequently and have less publicly available information. They also may be more
sensitive to changing political and economic conditions. These factors may cause
investments in smaller companies to experience more price volatility.
www.americancentury.com American Century Investments 9
The fund may invest in securities of foreign companies. Foreign investment
involves additional risks, including fluctuations in currency exchange rates,
less stable political and economic structures, reduced availability of public
information, and lack of uniform financial reporting and regulatory practices
similar to those that apply in the United States. These factors make investing
in foreign securities generally riskier than investing in U.S. securities.
Because the fund managers intend to invest the fund's assets primarily in U.S.
securities, the risks associated with foreign investments are not considered to
be principal risks of investing in the fund. To the extent the fund invests in
foreign securities, the overall risk of the fund, however, could be affected.
These and other risks of investing in the fund are described in the fund's
Statement of Additional Information.
WHAT KINDS OF SECURITIES DOES THE FUND BUY?
The fund will generally purchase equity securities of both U.S. and foreign
companies. The fund can purchase other types of securities as well, such as
domestic and foreign preferred stocks, convertible debt securities,
equity-equivalent securities, nonleveraged futures and options, notes, bonds and
other debt securities of companies, and obligations of domestic or foreign
governments and their agencies.
Although not a primary investment strategy of the fund, the fund may, as a
temporary defensive measure, invest all or a substantial portion of its assets
in cash or high-quality, short-term debt securities in the event of exceptional
market or economic conditions. To the extent the fund assumes a defensive
position, it will not be pursuing its objective of capital growth.
When the managers believe it is prudent or if they are unable to find securities
that satisfy the fund's primary investment strategy, the fund may invest a
portion of its assets in convertible debt securities, foreign securities,
short-term securities, equity-equivalent securities, nonleveraged stock index
futures contracts and other similar securities. Stock index futures contracts, a
type of derivative security, can help the fund's cash assets remain liquid while
performing more like stocks. The fund has a policy governing stock index futures
and similar derivative securities to help manage the risk of these types of
investments. For example, the managers cannot leverage the fund's assets by
investing in a derivative security. A complete description of the derivatives
policy is included in the Statement of Additional Information.
10 American Century Investments 1-800-345-3533
MANAGEMENT
WHO MANAGES THE FUNDS?
The Board of Directors, investment advisor and fund management team play key
roles in the management of the funds.
THE BOARD OF DIRECTORS
The Board of Directors oversees the management of the funds and meets at least
quarterly to review reports about fund operations. Although the Board of
Directors does not manage the funds, it has hired an investment advisor to do
so. More than two-thirds of the directors are independent of the funds' advisor;
that is, they are not employed by and have no financial interest in the advisor
THE INVESTMENT ADVISOR
The funds' investment advisor is American Century Investment Management, Inc.
The advisor has been managing mutual funds since 1958 and is headquartered at
4500 Main Street, Kansas City, Missouri 64111.
The advisor is responsible for managing the investment portfolio of the funds
and directing the purchase and sale of their investment securities. The advisor
also arranges for transfer agency, custody and all other services necessary for
the funds to operate.
For the services it provides to the funds, the advisor receives a unified
management fee based on a percentage of the average net assets of each class of
shares of the funds. The amount of the management fee for a fund is calculated
on a class-by-class basis daily and paid monthly. Life Sciences will pay the
advisor a unified management fee for the Institutional Class of shares of 1.30%
of the first $1 billion of average net assets and 1.10% of the average net
assets over $1 billion. Technology will pay the advisor a unified management fee
for the Institutional Class of shares of 1.30% of the first $1 billion of
average net assets and 1.10% of the average net assets over $1 billion.
Out of that fee, the advisor pays all expenses of managing and operating the
funds except brokerage expenses, taxes, interest, fees and expenses of the
independent directors (including legal counsel fees), and extraordinary
expenses. A portion of the management fee may be paid by the funds' advisor to
unaffiliated third parties who provide recordkeeping and administrative services
that would otherwise be performed by an affiliate of the advisor.
www.americancentury.com American Century Investments 11
THE FUND MANAGEMENT TEAMS
The advisor uses teams of portfolio managers, assistant portfolio managers and
analysts to manage the funds. The teams meet regularly to review portfolio
holdings and discuss purchase and sale activity. Team members buy and sell
securities for the funds as they see fit, guided by the funds' investment
objectives and strategies.
The portfolio managers on the investment teams are identified below:
LIFE SCIENCES
ARNOLD K. DOUVILLE
Mr. Douville, Vice President and Portfolio Manager, has been a member of the
team that manages the Life Sciences Fund since its inception in June 2000, and
has been a member of the team that manages Vista (another American Century
equity fund) since joining American Century in November 1997. Before joining
American Century, he served as Senior Portfolio Manager for Munder Capital
Management from September 1989 to October 1997. He has a bachelor's degree in
economics from the U.S. Air Force Academy and an MBA in finance, statistics and
economics from the University of Chicago.
CHRISTY TURNER
Ms. Turner, Portfolio Manager, has been a member of the team that manages the
Life Sciences Fund since its inception in June 2000. Prior to that, she worked
for four years as an investment analyst for the health care sector for other
American Century equity funds, including Ultra, Select, New Opportunities and
Giftrust. Before joining American Century in 1996, she worked as an investment
analyst for First Chicago Investment Management Company and as an audit manager
for KPMG Peat Marwick. She has a bachelor's degree in business administration in
accounting from the University of Central Florida and an MBA in finance from the
University of North Carolina. She is a Chartered Financial Analyst.
TECHNOLOGY
CHRISTOPHER K. BOYD
Mr. Boyd, Vice President and Senior Portfolio Manager, has been a member of the
team that manages the Technology Fund since its inception in June 2000, and has
been a member of the team that manages Giftrust and New Opportunities since
rejoining American Century in January 1998. With the exception of 1997, he has
been with American Century since March 1988 and served as a Portfolio Manager
since December 1992. During 1997, he was in private practice as an investment
advisor. He has a bachelor of science from the University of Kansas and an MBA
from Dartmouth College. He is a Chartered Financial Analyst.
DOUGLAS C. DAY
Mr. Day, Portfolio Manager, has been a member of the team that manages the
Technology Fund since its inception in June 2000. Prior to that, he worked for
three and one-half years as an investment analyst for other American Century
equity funds, including Ultra and Select. Before joining American Century in
October 1996, he worked as an equity research analyst for Salomon Brothers from
May 1995 to October 1996. He has a bachelor's degree in economics from Emory
University.
FUNDAMENTAL INVESTMENT POLICIES
Fundamental investment policies contained in the Statement of Additional
Information and the investment objectives of the funds may not be changed
without shareholder approval. The Board of Directors may change any other
policies and investment strategies.
[left margin]
[graphic of pointing finger]
CODE OF ETHICS
American Century has a Code of Ethics designed to ensure that the interests of
fund shareholders come before the interests of the people who manage the funds.
Among other provisions, the Code of Ethics prohibits portfolio managers and
other investment personnel from buying securities in an initial public offering
or profiting from the purchase and sale of the same security within 60 calendar
days. In addition, the Code of Ethics requires portfolio managers and other
employees with access to information about the purchase or sale of securities by
the funds to obtain approval before executing permitted personal trades.
12 American Century Investments 1-800-345-3533
INVESTING WITH AMERICAN CENTURY
ELIGIBILITY FOR INSTITUTIONAL CLASS SHARES
The Institutional Class shares are made available for purchase by large
institutional shareholders, such as bank trust departments, corporations,
retirement plans, endowments, foundations and financial advisors that meet the
funds' minimum investment requirements. Institutional Class shares are not
available for purchase by insurance companies for variable annuity and variable
life products.
MINIMUM INITIAL INVESTMENT AMOUNTS
The minimum investment is $5 million ($3 million for endowments and foundations)
per fund. If you invest with us through a financial intermediary, the minimum
investment requirement may be met by aggregating the investments of various
clients of your financial intermediary. The minimum investment requirement may
be waived if you or your financial intermediary, if applicable, has an aggregate
investment in our family of funds of $10 million or more ($5 million for
endowments and foundations). In addition, financial intermediaries or plan
recordkeepers may require retirement plans to meet certain additional
requirements, such as plan size or a minimum level of assets per participant, in
order to be eligible to purchase Institutional Class shares.
REDEMPTION OF SHARES IN LOW-BALANCE ACCOUNTS
If your balance or the balance of your financial intermediary, if applicable,
falls below the minimum investment requirements due to redemptions or exchanges,
we reserve the right to convert your shares to Investor Class shares of the same
fund. The Investor Class shares have a unified management fee that is 0.20%
higher than the Institutional Class.
SERVICES AUTOMATICALLY AVAILABLE TO YOU
You automatically will have access to the services listed on the following page
when you open your account. If you do not want these services, see Conducting
Business in Writing below.
CONDUCTING BUSINESS IN WRITING
If you prefer to conduct business in writing only, you can indicate this on the
account application. If you choose this option, you must provide written
instructions to invest, exchange and redeem. All account owners must sign
transaction instructions (with signatures guaranteed for redemptions in excess
of $100,000). If you want to add services later, you can complete an Investor
Service Options form.
[left margin]
[graphic of pointing finger]
A redemption is the sale of all or a portion of the shares in an account,
including as part of an exchange to another American Century account.
www.americancentury.com American Century Investments 13
WAYS TO MANAGE YOUR ACCOUNT
--------------------------------------------------------------------------------
BY TELEPHONE
Service Representative
1-800-345-3533
OPEN AN ACCOUNT
If you are a current investor, you can open an account by exchanging shares from
another American Century account.
EXCHANGE SHARES
Call or use our Automated Information Line if you have authorized us to accept
telephone instructions.
MAKE ADDITIONAL INVESTMENTS
Call if you have authorized us to invest from your bank account.
SELL SHARES
Call a Service Representative.
--------------------------------------------------------------------------------
BY MAIL OR FAX
P.O. Box 419385
Kansas City, MO 64141-6385
Fax
816-340-4655
OPEN AN ACCOUNT
Send a signed, completed application and check or money order payable to
American Century Investments.
EXCHANGE SHARES
Send written instructions to exchange your shares from one American Century
account to another.
MAKE ADDITIONAL INVESTMENTS
Send your check or money order for at least $50 with an investment slip or $250
without an investment slip. If you don't have an investment slip, include your
name, address and account number on your check or money order.
SELL SHARES
Send written instructions or a redemption form to sell shares. Call a Service
Representative to request a form.
--------------------------------------------------------------------------------
AUTOMATICALLY
OPEN AN ACCOUNT
Not available.
EXCHANGE SHARES
Send written instructions to set up an automatic exchange of your shares from
one American Century account to another.
MAKE ADDITIONAL INVESTMENTS
With the automatic investment privilege, you can purchase shares on a regular
basis. You must invest at least $600 per year per account.
SELL SHARES
If you have at least $10,000 in your account, you may sell shares automatically
by establishing Check-A-Month or Automatic Redemption plans.
--------------------------------------------------------------------------------
BY WIRE
[graphic of pointing finger]
Please remember that if you request redemptions by wire, $10 will be deducted
from the amount redeemed. Your bank also may charge a fee.
OPEN AN ACCOUNT
Call to set up your account or mail a completed application to the address
provided in the "By mail" section. Give your bank the following information to
wire money.
* Our bank information
Commerce Bank N.A.
Routing No. 101000019
Account No. 2804918
* The fund name
* Your American Century account number*
* Your name
* The contribution year (for IRAs only)
* For additional investments only
MAKE ADDITIONAL INVESTMENTS
Follow the wire instructions.
SELL SHARES
You can receive redemption proceeds by wire or electronic transfer.
EXCHANGE SHARES
Not available.
14 American Century Investments 1-800-345-3533
MODIFYING OR CANCELING AN INVESTMENT
Investment instructions are irrevocable. That means that once you have mailed or
otherwise transmitted your investment instruction, you may not modify or cancel
it. Each fund reserves the right to suspend the offering of shares for a period
of time, and it reserves the right to reject any specific purchase order
(including purchases by exchange or conversion). Additionally, we may refuse a
purchase if, in our judgment, it is of a size that would disrupt the management
of a fund.
ABUSIVE TRADING PRACTICES
We do not permit market timing or other abusive trading practices in our funds.
Excessive, short-term (market timing) or other abusive trading practices may
disrupt portfolio management strategies and harm fund performance. To minimize
harm to the fund and its shareholders, we reserve the right to reject any
purchase order (including exchanges) from any investor we believe has a history
of abusive trading or whose trading, in our judgment, has been or may be
disruptive to a fund. In making this judgment, we may consider trading done in
multiple accounts under common ownership or control. We also reserve the right
to delay delivery of your redemption proceeds--up to seven days--or to honor
certain redemptions with securities, rather than cash, as described in the next
section.
SPECIAL REQUIREMENTS FOR LARGE REDEMPTIONS
If, during any 90-day period, you redeem fund shares worth more than $250,000
(or 1% of the assets of the fund if that percentage is less than $250,000), we
reserve the right to pay part or all of the redemption proceeds in excess of
this amount in readily marketable securities instead of in cash. These
securities would be selected from the fund's portfolio by the fund managers. A
payment in securities can help the fund's remaining shareholders avoid tax
liabilities that they might otherwise have incurred had the fund sold securities
prematurely to pay the entire redemption amount in cash.
We will value these securities in the same manner as we do in computing the
fund's net asset value. We may provide these securities in lieu of cash without
prior notice.
Also, if payment is made in securities, a shareholder may have to pay brokerage
or other transaction costs to convert the securities to cash.
If your redemption would exceed this limit and you would like to avoid being
paid in securities, please provide us 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. This minimizes the effect of the
redemption on the fund and its remaining investors.
www.americancentury.com American Century Investments 15
INVESTING THROUGH FINANCIAL INTERMEDIARIES
If you do business with us through a financial intermediary or a retirement
plan, your ability to purchase, exchange and redeem shares will depend on the
policies of that entity. Some policy differences may include
* minimum investment requirements
* exchange policies
* fund choices
* cutoff time for investments
Please contact your financial intermediary or plan sponsor for a complete
description of its policies.
Certain financial intermediaries perform recordkeeping and administrative
services for their clients that would otherwise be performed by American
Century's transfer agent. In some circumstances, American Century will pay the
service provider a fee for performing those services.
Although fund share transactions may be made directly with American Century at
no charge, you also may purchase, redeem and exchange fund shares through
financial intermediaries that charge a transaction-based or other fee for their
services. Those charges are retained by the intermediary and are not shared with
American Century or the funds.
American Century has contracts with certain financial intermediaries requiring
them to track the time investment orders are received and to comply with
procedures relating to the transmission of orders. The funds have authorized
these intermediaries to accept orders on each fund's behalf up to the time at
which the net asset value is determined. If those orders are transmitted to
American Century and paid for in accordance with the contract, they will be
priced at the net asset value next determined after your request is received in
the form required by the intermediary on each fund's behalf.
[left margin]
[graphic of pointing finger]
Financial intermediaries include banks, broker-dealers, insurance companies and
investment advisors.
16 American Century Investments 1-800-345-3533
SHARE PRICE AND DISTRIBUTIONS
SHARE PRICE
American Century determines the NET ASSET VALUE (NAV) of each fund as of the
close of regular trading on the New York Stock Exchange (usually 4 p.m. Eastern
time) on each day the Exchange is open. On days when the Exchange is not open
(including certain U.S. holidays), we do not calculate the NAV. The NAV of a
fund share is the current value of the fund's assets, minus any liabilities,
divided by the number of fund shares outstanding.
If current market prices of securities owned by a fund are not readily
available, the advisor may determine their fair value in accordance with
procedures adopted by the fund's Board. Trading of securities in foreign markets
may not take place every day the Exchange is open. Also, trading in some foreign
markets and on some electronic trading networks may take place on weekends or
holidays when a fund's NAV is not calculated. So, the value of a fund's
portfolio may be affected on days when you can't purchase or redeem shares of
the fund.
We will price your purchase, exchange or redemption at the NAV next determined
after we receive your transaction request in good order.
DISTRIBUTIONS
Federal tax laws require each fund to make distributions to its shareholders in
order to qualify as a "regulated investment company." Qualification as a
regulated investment company means the funds will not be subject to state or
federal income tax on amounts distributed. The distributions generally consist
of dividends and interest received, as well as CAPITAL GAINS realized on the
sale of investment securities. Each fund generally pays distributions from net
income, if any, once a year in December. Distributions from realized capital
gains are paid twice a year, usually in March and December. A fund may make more
frequent distributions, if necessary, to comply with Internal Revenue Code
provisions.
You will participate in fund distributions, when they are declared, starting the
day after your purchase is effective. For example, if you purchase shares on a
day that a distribution is declared, you will not receive that distribution. If
you redeem shares, you will receive any distribution declared on the day you
redeem. If you redeem all shares, we will include any such distributions
received with your redemption proceeds.
Participants in employer-sponsored retirement or savings plans must reinvest all
distributions. For shareholders investing through taxable accounts, we will
reinvest distributions unless you elect to receive them in cash. Please consult
your services guide for further information regarding distributions and your
distribution options.
[left margin]
The NET ASSET VALUE, or NAV, of a fund is the price of the fund's shares.
CAPITAL GAINS are increases in the values of capital assets, such as stock, from
the time the assets are purchased.
www.americancentury.com American Century Investments 17
TAXES
The tax consequences of owning shares of the funds will vary depending on
whether you own them through a taxable or tax-deferred account. Tax consequences
result from distributions by the funds of dividend and interest income they have
received or capital gains they have generated through their investment
activities. Tax consequences also result from sales of fund shares by investors
after the net asset value has increased or decreased.
Tax-Deferred Accounts
If you purchase fund shares through a tax-deferred account, such as an IRA or a
qualified employer-sponsored retirement or savings plan, income and capital
gains distributions usually will not be subject to current taxation, but will
accumulate in your account under the plan on a tax-deferred basis. Likewise,
moving from one fund to another fund within a plan or tax-deferred account
generally will not cause you to be taxed. For information about the tax
consequences of making purchases or withdrawals through a tax-deferred account,
please consult your plan administrator, your summary plan description or a
professional tax advisor.
Taxable Accounts
If you own fund shares through a taxable account, distributions by the funds and
your sales of fund shares may cause you to be taxed on your investment.
If you invest through a taxable account, you may be able to claim a foreign tax
credit for any foreign income taxes paid by the funds. In order to qualify for
this tax credit, certain requirements must be satisfied. Please consult the
Statement of Additional Information for a more complete discussion of the tax
consequences of owning shares of the funds.
Taxability of Distributions
Fund distributions may consist of income earned by the funds from sources such
as dividends and interest, or capital gains generated from the sale of fund
investments. Distributions of income are taxed as ordinary income. Distributions
of capital gains are classified either as short term or long term and are taxed
as follows:
<TABLE>
Type of Distribution Tax Rate for 15% Bracket Tax Rate for 28% Bracket or Above
---------------------------------------------------------------------------------------
Short-term capital gains Ordinary income rate Ordinary income rate
---------------------------------------------------------------------------------------
<S> <C> <C>
Long-term capital gains 10% 20%
</TABLE>
The tax status of any distributions of capital gains is determined by how long
the funds held the underlying security that was sold, not by how long you have
been invested in the funds, or whether you reinvest your distributions in
additional shares or take them in cash. American Century will inform you of the
tax status of fund distributions for each calendar year in an annual tax mailing
(Form 1099-DIV).
Distributions also may be subject to state and local taxes. Because everyone's
tax situation is unique, you may want to consult your tax professional about
federal, state and local tax consequences.
[left margin]
[graphic of pointing finger]
BUYING A DIVIDEND
Purchasing fund shares in a taxable account shortly before a distribution is
sometimes known as buying a dividend. In taxable accounts, you must pay income
taxes on the distribution whether you reinvest the distribution or take it in
cash. In addition, you will have to pay taxes on the distribution whether the
value of your investment decreased, increased or remained the same after you
bought the fund shares.
The risk in buying a dividend is that the fund's portfolio may build up taxable
gains throughout the period covered by a distribution, as securities are sold at
a profit. The funds distribute those gains to you, after subtracting any losses,
even if you did not own the shares when the gains occurred.
If you buy a dividend, you incur the full tax liability of the distribution
period, but you may not enjoy the full benefit of the gains realized in the
fund's portfolio.
18 American Century Investments 1-800-345-3533
Taxes on Transactions
Your redemptions--including exchanges to other American Century funds--are
subject to capital gains tax. The table above can provide a general guide for
your potential tax liability when selling or exchanging fund shares. Short-term
capital gains are gains on fund shares you held for 12 months or less. Long-term
capital gains are gains on fund shares you held for more than 12 months. If your
shares decrease in value, their sale or exchange will result in a long-term or
short-term capital loss. However, you should note that 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 those shares. 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
Internal Revenue Code. This may result in a postponement of the recognition of
such loss for federal income tax purposes.
If you have not certified to us that your Social Security number or tax
identification number is correct and that you are not subject to 31%
withholding, we are required to withhold and remit 31% of dividends, capital
gains distributions and redemptions to the IRS.
www.americancentury.com American Century Investments 19
MULTIPLE CLASS INFORMATION
American Century offers three classes of the funds: Investor Class,
Institutional Class and Advisor Class. The shares offered by this Prospectus are
Institutional Class shares and are offered primarily through employer-sponsored
retirement plans, or through institutions like banks, broker-dealers and
insurance companies.
The other classes have different fees, expenses and/or minimum investment
requirements from the Institutional Class. The difference in the fee structures
between the classes is the result of their separate arrangements for shareholder
and distribution services and not the result of any difference in amounts
charged by the advisor for core investment advisory services. Accordingly, the
core investment advisory expenses do not vary by class. Different fees and
expenses will affect performance. For additional information concerning the
other classes of shares not offered by this Prospectus, call us at
* 1-800-345-2021 for Investor Class shares
* 1-800-345-3533 for Advisor Class shares
You also can contact a sales representative or financial intermediary who offers
those classes of shares.
Except as described below, all classes of shares of a fund have identical
voting, dividend, liquidation and other rights, preferences, terms and
conditions. The only differences between the classes are (a) each class may be
subject to different expenses specific to that class; (b) each class has a
different identifying designation or name; (c) each class has exclusive voting
rights with respect to matters solely affecting such class; (d) each class may
have different exchange privileges; and (e) the Institutional Class may provide
for automatic conversion from that class into shares of the Investor Class of
the same fund.
20 American Century Investments 1-800-345-3533
NOTES
www.americancentury.com American Century Investments 21
MORE INFORMATION ABOUT THE FUNDS IS CONTAINED IN THESE DOCUMENTS
Annual and Semiannual Reports
These reports contain more information about the funds' investments and the
market conditions and investment strategies that significantly affected the
funds' performance during the most recent fiscal period.
Statement of Additional Information (SAI)
The SAI contains a more detailed, legal description of the funds' operations,
investment restrictions, policies and practices. The SAI is incorporated by
reference into this Prospectus. This means that it is legally part of this
Prospectus, even if you don't request a copy.
You may obtain a free copy of the SAI or annual and semiannual reports, and ask
questions about the funds or your accounts, by contacting American Century at
the address or telephone numbers listed below.
You also can get information about the funds (including the SAI) from the
Securities and Exchange Commission (SEC). The SEC charges a duplicating fee to
provide copies of this information.
In person SEC Public Reference Room
Washington, D.C.
Call 202-942-8090 for
location and hours.
On the Internet * EDGAR database at www.sec.gov
* By email request at [email protected]
By mail SEC Public Reference Section
Washington, D.C. 20549-0102
Investment Company Act File No. 811-6247
[american century logo and text logo (reg. sm)]
American
Century
AMERICAN CENTURY INVESTMENTS
P.O. Box 419385
Kansas City, Missouri 64141-6385
1-800-345-3533 or 816-531-5575
0008
SH-PRS-21728