As filed with the Securities and Exchange Commission on November 25, 1998
1933 Act File No. 33-64872; 1940 Act File No. 811-7820
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933 __X__
Pre-Effective Amendment No. ______
Post-Effective Amendment No. __13__ __X__
REGISTRATION STATEMENT
UNDER THE INVESTMENT COMPANY ACT OF 1940 __X__
Amendment No. __13__
(Check appropriate box or boxes.)
AMERICAN CENTURY CAPITAL PORTFOLIOS, INC.
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(Exact Name of Registrant as Specified in Charter)
American Century Tower, 4500 Main Street, Kansas City, MO 64111
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code (816) 531-5575
Patrick A. Looby, Esq.
American Century Tower, 4500 Main Street, Kansas City, MO 64111
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(Name and address of Agent for Service)
Approximate Date of Proposed Public Offering: January 29, 1999
It is proposed that this filing will become effective (check appropriate box)
_____ immediately upon filing pursuant to paragraph (b) of Rule 485
__X__ on December 30, 1998 pursuant to paragraph (b) of Rule 485
_____ 60 days after filing pursuant to paragraph (a) of Rule 485
_____ on (date) pursuant to paragraph (a) of Rule 485
_____ 75 days after filing pursuant to paragraph (a)(2) of Rule 485
_____ on (date) pursuant to paragraph (a)(2) of Rule 485
The Registrant has registered an indefinite number or amount of securities under
the Securities Act of 1933 pursuant to Rule 24f-2. The Rule 24f-2 notice for the
fiscal year ended March 31, 1998, was filed on June 12, 1998.
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<PAGE>
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CROSS REFERENCE SHEET
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N-1A Item No. Location
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PART A
Item 1. Cover Page Cover Page
Item 2. Synopsis Transaction and Operating
Expense Table
Item 3. Condensed Financial Not Applicable
Information
Item 4. General Description Investment Policies of
Registrant the Fund; Other Investment
Practices, Their Characteristics
and Risks; Performance
Advertising; Distributions;
Further Information About
American Century
Item 5. Management of the Management
Fund
Item 6. Capital Stock and Further Information About
Other Securities American Century
Item 7. Purchase of Securities How to Open An Account;
Being Offered How to Exchange From One
Account to Another;
Share Price; Distributions
Item 8. Redemption How to Redeem Shares;
Signature Guarantee
Item 9. Pending Legal Not Applicable
Proceedings
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PART B
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Item 10. Cover Page Cover Page
Item 11. Table of Contents Table of Contents
Item 12. General Information Not Applicable
Item 13. Investment Objectives Investment Objective of
and Policies the Fund; Fundamental
Policies of the Funds;
Investment Restrictions;
Foreign Securities; Futures
Contracts; Cash Management;
An Explanation of Fixed Income
Securities Ratings;
Portfolio Lending;
Portfolio Turnover
Item 14. Management of the Officers and Directors;
Registrant Management;
Custodians
Item 15. Control Persons Capital Stock
and Principal
Holders of Securities
Item 16. Investment Advisory Management;
and Other Services Custodians
Item 17. Brokerage Allocation Brokerage;
Performance Advertising
Item 18. Capital Stock and Capital Stock;
Other Securities Multiple Class Structure
Item 19. Purchase, Redemption Not Applicable
and Pricing of
Securities Being
Offered
Item 20. Tax Status Not Applicable
Item 21. Underwriters Not Applicable
Item 22. Calculation of Yield Performance Advertising
Quotations of Money
Market Funds
Item 23. Financial Statements Not Applicable
<PAGE>
PROSPECTUS
[american century logo[reg.sm])
American
Century
DECEMBER 30, 1998
AMERICAN CENTURY GROUP
Equity Index Fund
INVESTOR CLASS
AMERICAN CENTURY INVESTMENTS
FAMILY OF FUNDS
American Century Investments offers you nearly 70 fund choices covering stocks,
bonds, money markets, specialty investments and blended portfolios. To help you
find the funds that may meet your investment needs, American Century funds have
been divided into three groups based on investment style and objectives. These
groups, which appear below, are designed to help simplify your fund decisions.
American Century Investments
Benham Group American Century Group Twentieth Century Group
MONEY MARKET FUNDS ASSET ALLOCATION & GROWTH FUNDS
GOVERNMENT BOND FUNDS BALANCED FUNDS INTERNATIONAL FUNDS
DIVERSIFIED BOND FUNDS CONSERVATIVE EQUITY FUNDS
MUNICIPAL BOND FUNDS SPECIALTY FUNDS
Equity Index Fund
PROSPECTUS
December 30, 1998
Equity Index Fund
INVESTOR CLASS
AMERICAN CENTURY CAPITAL PORTFOLIOS, INC.
American Century Capital Portfolios, Inc. is a part of American Century
Investments, a family of funds that includes nearly 70 no-load mutual funds
covering a variety of investment opportunities. One fund from our American
Century Group that invests primarily in equity securities is described in this
Prospectus. Its investment objective is listed on page 2 of this Prospectus. The
other funds are described in separate prospectuses.
Through its Investor Class of shares, American Century offers investors a full
line of no-load funds, investments that have no sales charges or commissions.
This Prospectus gives you information about the fund that you should know before
investing. Please read this Prospectus carefully and retain it for future
reference. Additional information is included in the Statement of Additional
Information dated December 30, 1998, and filed with the Securities and Exchange
Commission. It is incorporated into this Prospectus by reference. To obtain a
copy without charge, call or write:
American Century Investments
4500 Main Street o P.O. Box 419200
Kansas City, Missouri 64141-6200 o 1-800-345-2021
International calls: 816-531-5575
Telecommunications Device for the Deaf:
1-800-634-4113 o In Missouri: 816-444-3485
www.americancentury.com
Additional information, including this Prospectus and the Statement of
Additional Information, may be obtained by accessing the Web site maintained by
the SEC (www.sec.gov).
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Investment Objective of the Fund
AMERICAN CENTURY EQUITY INDEX FUND
The investment objective of Equity Index Fund is long-term capital growth. The
fund seeks to achieve this objective by matching, as closely as possible, the
investment results of the Standard & Poor's 500 Composite Price Index (the "S&P
500 Index").
There is no assurance that the fund will achieve its investment objective.
NO PERSON IS AUTHORIZED BY THE FUND TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS OR IN OTHER PRINTED
OR WRITTEN MATERIAL ISSUED BY OR ON BEHALF OF THE FUND, AND YOU SHOULD NOT RELY
ON ANY OTHER INFORMATION OR REPRESENTATION.
TABLE OF CONTENTS
Investment Objective of the Fund
Transaction And Operating Expense Table
Information Regarding the Fund
Investment Policies of the Fund
S&P 500 Index
Equity Securities
Cash Management
Other Investment Practices, Their Characteristics and Risks
Non-Diversified Company
Futures Contracts
Portfolio Turnover
Repurchase Agreements
Derivative Securities
Performance Information
How to Invest with American Century Investments
American Century Investments
Investing in American Century
How to Open an Account
By Mail
By Wire
By Exchange
In Person
Subsequent Investments
By Mail
By Telephone
By Online Access
By Wire
In Person
Automatic Investment Plan
How to Exchange from One Account to Another
By Mail
By Telephone
By Online Access
How to Redeem Shares
By Mail
By Telephone
By Check-A-Month
Other Automatic Redemptions
Redemption Proceeds
By Check
By Wire and ACH
Special Requirements for Large Redemptions
Redemption of Shares in Low-Balance Accounts
Signature Guarantee
Special Shareholder Services
Automated Information Line
Online Account Access
Open Order Service
Tax-Qualified Retirement Plans
Important Policies Regarding Your Investments
Reports to Shareholders
Employer-Sponsored Retirement Plans and Institutional Accounts
Additional Information You Should Know
Share Price
When Share Price Is Determined
How Share Price Is Determined
Where to Find Information About Share Price
Distributions
Taxes
Tax-Deferred Accounts
Taxable Accounts
Management
Investment Management
Code of Ethics
Transfer and Administrative Services
Year 2000 Issues
Distribution of Fund Shares
Further Information About American Century
Transaction And Operating Expense Table
SHAREHOLDER TRANSACTION EXPENSES:
Maximum Sales Load Imposed on Purchases .......................... none
Maximum Sales Load Imposed on Reinvested Dividends ............... none
Deferred Sales Load .............................................. none
Redemption Fee(1) ................................................ none
Exchange Fee ..................................................... none
ANNUAL FUND OPERATING EXPENSES:
(as a percentage of net assets)
Management Fees(2) ...............................................0.49%
12b-1 Fees ....................................................... none
Other Expenses(3) ................................................0.00%
Total Fund Operating Expenses ....................................0.49%
EXAMPLE
You would pay the following expenses 1 year $ 5
on a $1,000 investment, assuming a 5% 3 year 16
annual return and redemption at the 5 years 27
end of each time period: 10 years 62
(1) Redemption proceeds sent by wire are subject to a $10 processing fee.
(2) A portion of the management fee may be paid by the fund's manager to
unaffiliated third parties who provide recordkeeping and administrative
services that would otherwise be performed by an affiliate of the manager.
See "Management--Transfer and Administrative Services," page __.
(3) Other expenses, which include the fees and expenses (including legal
counsel fees) of those directors who are not "interested persons" as
defined in the Investment Company Act, are expected to be less than 0.01 of
1% of average net assets for the current fiscal year.
The purpose of this table is to help you understand the various costs and
expenses that you, as a shareholder, will bear directly or indirectly in
connection with an investment in the class of shares of the fund offered by this
Prospectus. The example set forth above assumes reinvestment of all dividends
and distributions and uses a 5% annual rate of return as required by SEC
regulations.
Neither the 5% rate of return nor the expenses shown above should be considered
indications of past or future returns and expenses. Actual returns and expenses
may be greater or less than those shown.
The shares offered by this Prospectus are Investor Class shares and have no
up-front or deferred sales charges, commissions or 12b-1 fees. The fund offers
one other class of shares to investors primarily to institutional investors. The
difference in the fee structures among 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 manager for core investment
advisory services. Accordingly, the core investment advisory expenses do not
vary by class. A difference in total fees will result in different performance
for the other classes. For additional information about the classes, see
"Further Information About American Century," Page ____.
Information Regarding the fund
Investment Policies of the Fund
The fund has adopted certain investment restrictions that are set forth in the
Statement of Additional Information. Those restrictions, as well as the
investment objective of the fund identified on page 2 of this Prospectus, and
any other investment policies designated as "fundamental" in this Prospectus or
in the Statement of Additional Information, cannot be changed without
shareholder approval. The fund has implemented additional investment policies
and practices to guide their activities in the pursuit of its investment
objective. These policies and practices, which are described throughout this
Prospectus, are not designated as fundamental policies and may be changed
without shareholder approval.
S&P 500 Index
Equity Index Fund seeks to match the investment results of the S&P 500 Index.
The S&P 500 Index is composed of 500 selected common stocks, most of which are
listed on the New York Stock Exchange. Standard & Poor's, a division of The
McGraw-Hill Companies, Inc. (the "Index Sponsor"), chooses the stocks to be
included in the S&P 500 Index solely on a statistical basis. The weightings of
stocks in the S&P 500 Index are based on each stock's relative total market
capitalization. Because of this weighting, the fund expects that the 50 largest
companies will comprise a large proportion of the S&P 500 Index. The advisor
generally will select stocks for the fund's portfolio in order of their
weightings in the S&P 500 Index beginning with the heaviest weighted stocks. The
fund attempts to be fully invested at all times in the stocks that comprise the
S&P 500 Index and stock index futures as described below and, in any event, at
least 80% of the fund's total assets will be so invested. With respect to the
fund's assets invested in the stocks in the S&P 500 Index, the percentage of
such assets invested in each stock is expected to be approximately the same as
the percentage it represents in the S&P 500 Index.
"Standard & Poor's(R)," "Standard & Poor's 500," "S&P 500(R)"and "S&P(R)" are
trademarks of the Index Sponsor, and have been licensed for use by the fund.
The fund is managed by determining which stocks are to be purchased or sold to
match, to the extent feasible, the investment characteristics of the S&P 500
Index. The fund will attempt to achieve a high correlation between the
performance of its portfolio and that of the S&P 500 Index, in both rising and
falling markets without taking into account expenses.
The fund's ability to correlate its performance with that of the S&P 500 Index,
however, may be affected by, among other things, changes in securities markets,
the manner in which the total return of the S&P 500 Index is calculated, the
size of the fund's portfolio, the amount of cash or cash equivalents held in the
fund's portfolio, and the timing, frequency and size of shareholder purchases
and redemptions. The fund will use cash flows from shareholder purchase and
redemption activity to maintain, to the extent feasible, the similarity of its
portfolio to the securities comprising the S&P 500 Index.
Inclusion of a security in the S&P 500 Index in no way implies an opinion by the
Index Sponsor as to its attractiveness as an investment. In the future, subject
to the approval of the fund's shareholders, the fund may select a different
index if such a standard of comparison is deemed to be more representative of
the performance of the securities the fund seeks to match. The fund is not
sponsored, endorsed, sold or promoted by the Index Sponsor.
Equity Securities
Equity securities fluctuate in value, based on many factors, including ones that
are not related to the value of the individual issuers of the equity securities.
These fluctuations in value can be large. Investors must be prepared to accept
the risk that the fund's share price may fluctuate and that they may lose money
as a result.
Cash Management
When the fund has cash reserves, the fund may invest in money market instruments
consisting of U.S. Government securities, time deposits, certificates of
deposit, bankers' acceptances, high-grade commercial paper, and repurchase
agreements. In addition, the fund may invest up to 5% of its total assets in any
money market fund, including those advised by the advisor or subadvisor.
Other Investment Practices, Their Characteristics and Risks
For additional information, see "Investment Restrictions" in the Statement of
Additional Information.
Non-Diversified Company
The fund is a "non-diversified" investment company. This means that the
proportion of the fund's assets that may be invested in the securities of a
single issuer is not limited by the Investment Company Act of 1940 (the
"Investment Company Act"). A "diversified" investment company is required by the
Investment Company Act generally, with respect to 75% of its total assets, to
invest not more than 5% of such assets in the securities of a single issuer.
Depending upon the composition of the S&P 500 Index, a relatively high
percentage of the fund's assets may be invested in the securities of a limited
number of issuers, some of which may be within the same economic sector.
Consequently, the fund's portfolio may be more sensitive to changes in the
market value of a single issuer or industry.
However, to meet Federal tax requirements, at the close of each quarter the fund
may not have more than 25% of its total assets invested in any one issuer and,
with respect to 50% of total assets, not more than 5% of its total assets
invested in any one issuer.
Futures Contracts
The fund may invest in stock index futures in anticipation of taking a market
position when available cash balances do not permit an economically efficient
trade in the cash market. A futures contract is an agreement to take or make
delivery of an amount of cash based on the difference between the value of the
index at the beginning and at the end of the contract period.
Rather than actually purchasing the specific financial assets, or the securities
of a market index, the manager may purchase a futures contract, which reflects
the value of such underlying securities. For example, S&P 500 futures reflect
the value of the underlying companies that comprise the S&P 500 Index. If the
aggregate market value of the underlying index securities increases or decreases
during the contract period, the value of the S&P 500 futures can be expected to
reflect such increase or decrease. As a result, the manager is able to expose to
the equity markets cash that is maintained by the fund to meet anticipated
redemptions or held for future investment opportunities. Because futures
generally settle within a day from the date they are closed out (compared with
three days for the types of equity securities primarily invested in by the fund)
the manager believes that this use of futures allows the fund to effectively be
fully invested in equity securities while maintaining the liquidity needed by
the fund.
When the fund enters into a futures contract, it must make deposit of
securities, known as "initial margin," as partial security for its performance
under the contract. As the value of the underlying financial assets fluctuates,
the parties to the contract are required to make additional margin payments,
known as "variation margin," to cover any additional obligation it may have
under the contract. Assets set aside by the fund as initial or variation margin
may not be disposed of so long as the fund maintains the contract.
The fund may not purchase leveraged futures. The fund will deposit in a
segregated account with its custodian bank appropriate securities in an amount
equal to the fluctuating market value of the index futures contracts it has
purchased, less any margin deposited on its position. The fund will invest only
in exchange-traded futures.
Portfolio Turnover
Investment decisions to purchase and sell securities are based on the
anticipated contribution of the security in question to the fund's investment
objectives. Because the fund is managed to match the performance of an index, it
is not expected that the fund will have a high portfolio turnover rate. The
manager believes, however, that the rate of portfolio turnover is irrelevant
when it determines a change is in order to achieve those objectives and,
accordingly, the annual portfolio turnover rate cannot be anticipated.
Higher turnover would generate correspondingly greater brokerage commissions
that the fund pays directly. Higher portfolio turnover also may increase the
likelihood of realized capital gains, if any, distributed by the fund. See
"Taxes," page 16.
Repurchase Agreements
The fund may invest in repurchase agreements when such transactions present an
attractive short-term return on cash that is not otherwise committed to the
purchase of securities pursuant to the fund's investment policies.
A repurchase agreement occurs when, at the time the fund purchases an
interest-bearing obligation, the seller (a bank or a broker-dealer registered
under the Securities Exchange Act of 1934) agrees to repurchase it on a
specified date in the future at an agreed-upon price. The repurchase price
reflects an agreed-upon interest rate during the time the fund's money is
invested in the security.
Since the security purchased constitutes security for the repurchase obligation,
a repurchase agreement can be considered a loan collateralized by the security
purchased. The fund's risk is the ability of the seller to pay the agreed-upon
repurchase price on the repurchase date. If the seller defaults, the fund may
incur costs in disposing of the collateral, which would reduce the amount
realized thereon. If the seller seeks relief under the bankruptcy laws, the
disposition of the collateral may be delayed or limited. To the extent the value
of the security decreases, the fund could experience a loss.
The fund will limit repurchase agreement transactions to securities issued by
the U.S. government, its agencies and instrumentalities, and will enter into
such transactions only with those banks and securities dealers who are deemed
creditworthy pursuant to criteria adopted by the fund's Board of Directors.
Derivative Securities
To the extent permitted by its investment objective and policies, the fund may
invest in securities that are commonly referred to as "derivative" securities.
Generally, a derivative is a financial arrangement the value of which is based
on, or "derived" from, a traditional security, asset, or market index. Certain
derivative securities are more accurately described as "index/structured"
securities. Index/structured securities are derivative securities whose value or
performance is linked to other equity securities (such as depositary receipts),
currencies, interest rates, indices or other financial indicators (reference
indices).
Some "derivatives" such as mortgage-related and other asset-backed securities
are in many respects like any other investment, although they may be more
volatile or less liquid than more traditional debt securities.
There are many different types of derivatives and many different ways to use
them. Futures and options are commonly used for traditional hedging purposes to
attempt to protect the fund from exposure to changing interest rates, securities
prices, or currency exchange rates and for cash management purposes as a
low-cost method of gaining exposure to a particular securities market without
investing directly in those securities.
The return on a derivative security may increase or decrease, depending upon
changes in the reference index or instrument to which it relates.
There is a range of risks associated with derivative investments, including but
not limited to:
* the risk that the underlying security, interest rate, market index or other
financial asset will not move in the direction the portfolio manager
anticipates;
* the possibility that there will be no liquid secondary market, or the
possibility that price fluctuation limits will be imposed by the relevant
exchange, either of which may make it difficult or impossible to close out
a position when desired;
* the risk that adverse price movements in an instrument will result in a
loss substantially greater than the fund's initial investment; and
* the risk that the counterparty will fail to perform its obligations.
The Board of Directors has approved the manager's policy regarding investments
in derivative securities. That policy specifies factors that must be considered
in connection with a purchase of derivative securities. The policy also
establishes a committee that must review certain proposed purchases before the
purchases can be made. The manager will report on fund activity in derivative
securities to the Board of Directors as necessary. In addition, the Board will
review the manager's policy for investments in derivative securities annually.
Performance Information
From time to time, the fund may advertise performance data. Fund performance may
be shown by presenting one or more performance measurements, including
cumulative total return or average annual total return. Performance data may be
quoted separately for the Investor Class and for the other classes, if any are
established in the future.
Cumulative total return data is computed by considering all elements of return,
including reinvestment of dividends and capital gains distributions, over a
stated period of time. Average annual total return is determined by computing
the annual compound return over a stated period of time that would have produced
the fund's cumulative total return over the same period if the fund's
performance had remained constant throughout.
The fund also may include in advertisements data comparing performance with the
performance of non-related investment media, published editorial comments and
performance rankings compiled by independent organizations such as Lipper
Analytical Services and publications that monitor the performance of mutual
funds. Performance information may be quoted numerically or may be presented in
a table, graph or other illustration. In addition, fund performance may be
compared to well-known indices of market performance including the S&P 500
Index. Fund performance also may be compared, on a relative basis, to other
funds in our fund family. This relative comparison, which may be based upon
historical fund performance or historical or expected volatility or other fund
characteristics, may be presented numerically, graphically or in text. Fund
performance also may be combined or blended with other funds in our fund family,
and that combined or blended performance may be compared to the same indices to
which individual funds may be compared.
All performance information advertised by the fund is historical in nature and
is not intended to represent or guarantee future results. The value of fund
shares when redeemed may be more or less than their original cost.
How to Invest with American Century Investments
American Century Investments
The fund offered by this Prospectus is a part of the American Century
Investments family of mutual funds. Our family provides a full range of
investment opportunities, from the aggressive equity growth funds in our
Twentieth Century Group, to the fixed income funds in our Benham Group, to the
moderate risk and specialty funds in our American Century Group. Please call
1-800-345-2021 for a brochure or prospectuses for the other funds in the
American Century Investments family.
To reduce expenses and demonstrate respect for our environment, we have
initiated a project through which we will eliminate duplicate copies of most
financial reports and prospectuses to most households and deliver account
statements to most households in a single envelope, even if they have more than
one account. If you would like additional copies of financial reports and
prospectuses or separate mailing of account statements, please call us.
Investing in American Century
The following sections explain how to invest in American Century funds,
including purchases, redemptions, exchanges and special services. You will find
more detail about doing business with us by referring to the Investor Services
Guide that you will receive when you open an account.
If you own or are considering purchasing fund shares through an
employer-sponsored retirement plan or through a bank, broker-dealer or other
financial intermediary, the following sections, as well as the information
contained in our Investor Services Guide, may not apply to you. Please read
"Employer-Sponsored Retirement Plans and Institutional Accounts," page 14.
How to Open an Account
To open an account, you must complete and sign an application, furnishing your
taxpayer identification number. (You must also certify whether you are subject
to withholding for failing to report income to the IRS.) Investments received
without a certified taxpayer identification number will be returned.
The minimum investment for the fund is $10,000.
The minimum investment requirements may be different for some types of
retirement accounts. Call one of our Investor Services Representatives for
information on our retirement plans, which are available for individual
investors or for those investing through their employers.
Please note: If you register your account as belonging to multiple owners (e.g.,
as joint tenants), you must provide us with specific authorization on your
application in order for us to accept written or telephone instructions from a
single owner. Otherwise, all owners will have to agree to any transactions that
involve the account (whether the transaction request is in writing or over the
telephone).
You may invest in the following ways:
By Mail
Send a completed application and check or money order payable in U.S. dollars to
American Century Investments.
By Wire
You may make your initial investment by wiring funds. To do so, call us or mail
a completed application and provide your bank with the following information:
Receiving Bank And Routing Number:
Commerce Bank, N.A. (101000019)
Beneficiary (BNF):
American Century Services Corporation
4500 Main St., Kansas City, Missouri 64111
Beneficiary Account Number (BNF ACCT):
2804918
Reference For Beneficiary (RFB):
American Century account number into which you are investing. If more than one,
leave blank and see Bank To Bank Information below.
Originator To Beneficiary (OBI):
Name and address of owner of account into which you are investing.
Bank To Bank Information
(BBI Or Free Form Text):
Taxpayer identification or Social Security number.
If more than one account, account numbers and amount to be invested in each
account.
Current tax year, previous tax year or rollover designation if an IRA.
Specify whether traditional IRA, Roth IRA, Education IRA, SEP-IRA,
SARSEP-IRA, SIMPLE Employer or SIMPLE Employee.
By Exchange
Call 1-800-345-2021 from 7 a.m. to 7 p.m. Central time to get information on
opening an account by exchanging from another American Century account. See page
10 for more information on exchanges.
In Person
If you prefer to work with a representative in person, please visit one of our
Investor Centers, located at:
4500 Main Street
Kansas City, Missouri 64111
4917 Town Center Drive
Leawood, Kansas 66211
1665 Charleston Road
Mountain View, California 94043
2000 S. Colorado Blvd.
Denver, Colorado 80222
Subsequent Investments
Subsequent investments may be made by an automatic bank, payroll or government
direct deposit (see "Automatic Investment Plan," this page) or by any of the
methods below. The minimum investment requirement for subsequent investments is
$250 for checks submitted without the investment slip portion of a previous
statement or confirmation and $50 for all other types of subsequent investments.
By Mail
When making subsequent investments, enclose your check with the investment slip
portion of a previous statement or confirmation. If the investment slip is not
available, indicate your name, address and account number on your check or a
separate piece of paper. (Please be aware that the investment minimum for
subsequent investments is higher without an investment slip.)
By Telephone
Upon completion of your application and once your account is open, you may make
investments by telephone. You may call an Investor Services Representative or
use our Automated Information Line.
By Online Access
Upon completion of your application and once your account is open, you may make
investments online.
By Wire
You may make subsequent investments by wire. Follow the wire transfer
instructions on page 9 and indicate your account number.
In Person
You may make subsequent investments in person at one of our Investor Centers.
The locations of our Investor Centers are listed on this page.
Automatic Investment Plan
By completing the application and electing to make investments automatically, we
will draw on your bank account regularly. Such investments must be at least the
equivalent of $50 per month. You also may choose an automatic payroll or
government direct deposit. If you are establishing a new account, check the
appropriate box under "Automatic Investments" on your application to receive
more information. If you would like to add a direct deposit to an existing
account, please call an Investor Services Representative.
How to Exchange from One Account to Another
As long as you meet any minimum investment requirements, you may exchange your
fund shares to our other funds up to six times per year per account. An exchange
request will be processed as of the same day it is received, if it is received
before the fund's net asset values are calculated, which is one hour prior to
the close of the New York Stock Exchange for funds issued by American Century
Target Maturities Trust and at the close of the Exchange for all of our other
funds. See "When Share Price Is Determined," page 15.
For any single exchange, the shares of each fund being acquired must have a
value of at least $100. However, we will allow investors to set up an Automatic
Exchange Plan between any two funds in the amount of at least $50 per month. See
our Investor Services Guide for further information about exchanges.
If, in any 90-day period, the total of your exchanges and your redemptions from
any one account exceeds the lesser of $250,000 or 1% of the fund's assets,
further exchanges will be subject to special requirements to comply with our
policy on large redemptions. See "Special Requirements for Large Redemptions,"
page 11.
By Mail
You may direct us in writing to exchange your shares from one American Century
account to another. For additional information, please see our Investor Services
Guide.
By Telephone
You can make exchanges over the telephone (either with an Investor Services
Representative or using our Automated Information Line--see page 12) upon
completion and receipt of your application or by calling us at 1-800-345-2021 to
get the appropriate form.
By Online Access
You can make exchanges online. This service is established upon completion and
receipt of your application or by calling us at 1-800-345-2021 to get the
appropriate form.
How to Redeem Shares
We will redeem or "buy back" your shares at any time. Redemptions will be made
at the next net asset value determined after a complete redemption request is
received.
Please note that a request to redeem shares in an IRA or 403(b) plan must be
accompanied by an executed IRS Form W4-P and a reason for withdrawal as
specified by the IRS.
By Mail
Your written instructions to redeem shares may be made either by a redemption
form, which we will send you upon request, or by a letter to us. Certain
redemptions may require a signature guarantee. Please see "Signature Guarantee,"
page 12.
By Telephone
Upon completion of your application and once your account is open, you may
redeem your shares by calling an Investor Services Representative.
By Check-A-Month
If you have at least a $10,000 balance in your account, you may redeem shares by
Check-A-Month. A Check-A-Month plan automatically redeems enough shares each
month to provide you with a check in an amount you choose (minimum $50). To set
up a Check-A-Month plan, please call and request our Check-A-Month brochure.
Other Automatic Redemptions
If you have at least a $10,000 balance in your account, you may elect to make
redemptions automatically by authorizing us to send funds to you or to your
account at a bank or other financial institution. To set up automatic
redemptions, call an Investor Services Representative.
Redemption Proceeds
Please note that shortly after a purchase of shares is made by check or
electronic draft (also known as an ACH draft) from your bank, we may wait up to
15 days or longer to send redemption proceeds (to allow your purchase funds to
clear). No interest is paid on the redemption proceeds after the redemption is
processed but before your redemption proceeds are sent.
Redemption proceeds may be sent to you in one of the following ways:
By Check
Ordinarily, all redemption checks will be made payable to the registered owner
of the shares and will be mailed only to the address of record. For more
information, please refer to our Investor Services Guide.
By Wire and ACH
You may authorize us to transmit redemption proceeds by wire or ACH. These
services will be effective 15 days after we receive the authorization.
Your bank will usually receive wired funds within 48 hours of transmission.
Funds transferred by ACH may be received up to seven days after transmission.
Wired funds are subject to a $10 fee to cover bank wire charges, which is
deducted from redemption proceeds. Once the funds are transmitted, the time of
receipt and the funds' availability are not under our control.
Special Requirements for Large Redemptions
We have elected to be governed by Rule 18f-1 under the Investment Company Act,
which obligates the fund to make certain redemptions in cash. This requirement
to pay redemptions in cash applies to situations where one shareholder redeems,
during any 90-day period, up to the lesser of $250,000 or 1% of the assets of
the fund. Although redemptions in excess of this limitation will also normally
be paid in cash, we reserve the right under unusual circumstances to honor these
redemptions by making payment in whole or in part in readily marketable
securities (a "redemption-in-kind").
If payment is made in securities, the securities, selected by the fund, will be
valued in the same manner as they are in computing the fund's net asset value
and will be provided without prior notice.
If you expect to make a large redemption and would like to avoid any possibility
of being paid in securities, you may do so by providing 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. Receipt of your
instruction 15 days prior to the transaction provides the fund with sufficient
time to raise the cash in an orderly manner to pay the redemption and thereby
minimizes the effect of the redemption on the fund and its remaining
shareholders.
Despite the fund's right to redeem fund shares through a redemption-in-kind, we
do not expect to exercise this option unless the fund has an unusually low level
of cash to meet redemptions and/or is experiencing unusually strong demands for
its cash. Such a demand might be caused, for example, by extreme market
conditions that result in an abnormally high level of redemption requests
concentrated in a short period of time. Absent these or similar circumstances,
we expect redemptions in excess of $250,000 to be paid in cash in any fund with
assets of more than $50 million if total redemptions from any one account in any
90-day period do not exceed one-half of 1% of the total assets of the fund.
Redemption of Shares in Low-Balance Accounts
Whenever the shares held in an account have a value of less than the required
minimum, a letter will be sent advising you to bring the value of the shares
held in the account up to the minimum. See "How to Open An Account," page 9. If
action is not taken within 90 days of the letter's date, the shares held in the
account will be redeemed and the proceeds from the redemption will be sent by
check to your address of record. We reserve the right to increase the investment
minimums.
Signature Guarantee
To protect your accounts from fraud, some transactions will require a signature
guarantee. You can obtain a signature guarantee from a bank or trust company,
credit union, broker-dealer, securities exchange or association, clearing agency
or savings association, as defined by federal law.
For a more in-depth explanation of our signature guarantee policy, or if you
live outside the United States and would like to know how to obtain a signature
guarantee, please consult our Investor Services Guide.
We reserve the right to require a signature guarantee on any transaction, or to
change this policy at any time.
Special Shareholder Services
We offer several services to make your account easier to manage. These are
listed on the account application. You will find more information about each of
these services in our Investor Services Guide.
Our special shareholder services include:
Automated Information Line
We offer an Automated Information Line, 24 hours a day, seven days a week, at
1-800-345-8765. By calling the Automated Information Line, you may listen to
fund prices, yields and total return figures. You may also use the Automated
Information Line to make investments into your accounts (if we have your bank
information on file) and obtain your share balance, value and most recent
transactions. You also may exchange shares from one fund to another via the
Automated Information Line. Redemption instructions cannot be given via the
Automated Information Line.
Online Account Access
You may contact us 24 hours a day, seven days a week, at www.americancentury.com
to access daily share prices, receive updates on major market indices and view
historical performance of the fund. You can use your personal access code and
Social Security number to view your account balance and account activity, make
subsequent investments from your bank account or exchange shares from one fund
to another.
Open Order Service
Through our open order service, you may designate a price at which to buy shares
of a variable-priced fund by exchange from one of our money market funds, or a
price at which to sell shares of a variable-priced fund by exchange to one of
our money market funds. The designated purchase price must be equal to or lower,
or the designated sale price equal to or higher, than the variable-priced fund's
net asset value at the time the order is placed. If the designated price is met
within 90 calendar days, we will execute your exchange order automatically at
that price (or better). Open orders not executed within 90 days will be
canceled.
If the fund you have selected deducts a distribution from its share price, your
order price will be adjusted accordingly so the distribution does not
inadvertently trigger an open order transaction on your behalf. If you close or
re-register the account from which the shares are to be redeemed, your open
order will be canceled.
Because of their time-sensitive nature, open order transactions are accepted
only by telephone or in person. These transactions are subject to exchange
limitations described in each fund's prospectus, except that orders and
cancellations received before 2 p.m. Central time are effective the same day,
and orders or cancellations received after 2 p.m. Central time are effective the
next business day.
Tax-Qualified Retirement Plans
The fund is available for your tax-deferred retirement plan. Call or write us
and request the appropriate forms for:
Individual Retirement Accounts (IRAs);
403(b) plans for employees of public school systems and non-profit
organizations; or
Profit sharing plans and pension plans for corporations and other
employers.
If your IRA and 403(b) accounts do not total $10,000, each account is subject to
an annual $10 fee, up to a total of $30 per year.
You can also transfer your tax-deferred plan to us from another company or
custodian. Call or write us for a Request to Transfer form.
Important Policies Regarding Your Investments
Every account is subject to policies that could affect your investment. Please
refer to the Investor Services Guide for further information about the policies
discussed below, as well as further detail about the services we offer.
(1) We reserve the right for any reason to suspend the offering of shares for a
period of time, or to reject any specific purchase order (including
purchases by exchange). Additionally, purchases may be refused if, in the
opinion of the manager, they are of a size that would disrupt the
management of the fund.
(2) We reserve the right to make changes to any stated investment requirements,
including those that relate to purchases, transfers and redemptions. In
addition, we also may alter, add to or terminate any investor services and
privileges. Any changes may affect all shareholders or only certain series
or classes of shareholders.
(3) Shares being acquired must be qualified for sale in your state of
residence.
(4) Transactions requesting a specific price and date, other than open orders,
will be refused. Once you have mailed or otherwise transmitted your
transaction instructions to us, they may not be modified or canceled.
(5) If a transaction request is made by a corporation, partnership, trust,
fiduciary, agent or unincorporated association, we will require evidence
satisfactory to us of the authority of the individual making the request.
(6) We have established procedures designed to assure the authenticity of
instructions received by telephone. These procedures include requesting
personal identification from callers, recording telephone calls, and
providing written confirmations of telephone transactions. These procedures
are designed to protect shareholders from unauthorized or fraudulent
instructions. If we do not employ reasonable procedures to confirm the
genuineness of instructions, then we may be liable for losses due to
unauthorized or fraudulent instructions. The company, its transfer agent
and manager will not be responsible for any loss due to instructions they
reasonably believe are genuine.
(7) All signatures should be exactly as the name appears in the registration.
If the owner's name appears in the registration as Mary Elizabeth Jones,
she should sign that way and not as Mary E. Jones.
(8) Unusual stock market conditions have in the past resulted in an increase in
the number of shareholder telephone calls. If you experience difficulty in
reaching us during such periods, you may send your transaction instructions
by mail, express mail or courier service, or you may visit one of our
Investor Centers. You also may use our Automated Information Line if you
have requested and received an access code and are not attempting to redeem
shares.
(9) If you fail to provide us with the correct certified taxpayer
identification number, we may reduce any redemption proceeds by $50 to
cover the penalty the IRS will impose on us for failure to report your
correct taxpayer identification number on information reports.
(10) We will perform special inquiries on shareholder accounts. A research fee
of $15 per hour may be applied.
Reports to Shareholders
At the end of each calendar quarter, we will send you a consolidated statement
that summarizes all of your American Century holdings, as well as an individual
statement for each fund you own that reflects all year-to-date activity in your
account. You may request a statement of your account activity at any time.
With the exception of most automatic transactions, each time you invest, redeem,
transfer or exchange shares, we will send you a confirmation of the transaction.
See the Investor Services Guide for more detail.
Carefully review all the information relating to transactions on your statements
and confirmations to ensure that your instructions were acted on properly.
Please notify us immediately in writing if there is an error. If you fail to
provide notification of an error with reasonable promptness, i.e., within 30
days of non-automatic transactions or within 30 days of the date of your
consolidated quarterly statement, in the case of automatic transactions, we will
deem you to have ratified the transaction.
No later than January 31 of each year, we will send you reports that you may use
in completing your U.S. income tax return. See the Investor Services Guide for
more information.
Each year, we will send you an annual and a semiannual report relating to your
fund, each of which is incorporated herein by reference. The annual report
includes audited financial statements and a list of portfolio securities as of
the fiscal year end. The semiannual report includes unaudited financial
statements for the first six months of the fiscal year, as well as a list of
portfolio securities at the end of the period. You also will receive an updated
prospectus at least once each year. Please read these materials carefully, as
they will help you understand your fund.
Employer-Sponsored Retirement Plans and Institutional Accounts
Information contained in our Investor Services Guide pertains to shareholders
who invest directly with American Century rather than through an
employer-sponsored retirement plan or through a financial intermediary.
If you own or are considering purchasing fund shares through an
employer-sponsored retirement plan, your ability to purchase shares of the fund,
exchange them for shares of other American Century funds, and redeem them will
depend on the terms of your plan.
If you own or are considering purchasing fund shares through a bank,
broker-dealer, insurance company or other financial intermediary, your ability
to purchase, exchange and redeem shares will depend on your agreement with, and
the policies of, such financial intermediary.
You may reach one of our Institutional Service Representatives by calling
1-800-345-3533 to request information about our funds and services, to obtain a
current prospectus or to get answers to any questions about our funds that you
are unable to obtain through your plan administrator or financial intermediary.
Additional Information You Should Know
Share Price
When Share Price Is Determined
The price of your shares is also referred to as their net asset value. Net asset
value is determined by calculating the total value of the fund's assets,
deducting total liabilities and dividing the result by the number of shares
outstanding. For all American Century funds, except funds issued by American
Century Target Maturities Trust, net asset value is determined as of the close
of regular trading on the New York Stock Exchange on each day that the Exchange
is open, usually 3 p.m. Central time. The net asset values for Target Maturities
funds are determined one hour prior to the close of the Exchange.
Investments and requests to redeem or exchange shares will receive the share
price next determined after receipt by us of the investment, redemption or
exchange request. For example, investments and requests to redeem or exchange
shares received by us or one of our agents or designees before the time as of
which the net asset value of the fund is determined, are effective on, and will
receive the price determined, that day. Investment, redemption and exchange
requests received thereafter are effective on, and receive the price determined
as of the close of the Exchange on the next day the Exchange is open.
Investments are considered received only when payment is received by us. Wired
funds are considered received on the day they are deposited in our bank account
if they are deposited before the time as of which the net asset value of the
fund is determined.
Investments by telephone pursuant to your prior authorization to us to draw on
your bank account are considered received at the time of your telephone call.
Investment and transaction instructions received by us on any business day by
mail prior to the time as of which the net asset value of the fund is
determined, will receive that day's price. Investments and instructions received
after that time will receive the price determined on the next business day.
If you invest in fund shares through an employer-sponsored retirement plan or
other financial intermediary, it is the responsibility of your plan recordkeeper
or financial intermediary to transmit your purchase, exchange and redemption
requests to the fund's transfer agent prior to the applicable cut-off time for
receiving orders and to make payment for any purchase transactions in accordance
with the fund's procedures or any contractual arrangements with the fund or the
fund's distributor in order for you to receive that day's price.
We have contractual relationships with certain financial intermediaries in which
such intermediaries represent that they have systems to track the time at which
investment orders are received and to segregate orders received at different
times. Based on these representations, the fund has authorized such
intermediaries and their designees to accept purchase and redemption orders on
the fund's behalf up to the applicable cut-off time. The fund will be deemed to
have received such orders upon acceptance by the duly authorized intermediary,
and such orders will be priced at the fund's net asset values next determined
after acceptance on the fund's behalf by such intermediary.
How Share Price Is Determined
The valuation of assets for determining net asset value may be summarized as
follows:
The portfolio securities of the fund, except as otherwise noted, listed or
traded on a domestic securities exchange are valued at the last sale price on
that exchange. Portfolio securities primarily traded on foreign securities
exchanges generally are valued at the preceding closing values of such
securities on the exchange where primarily traded. If no sale is reported, or if
local convention or regulation so provides, the mean of the latest bid and asked
prices is used. Depending on local convention or regulation, securities traded
over-the-counter are priced at the mean of the latest bid and asked prices, or
at the last sale price. When market quotations are not readily available,
securities and other assets are valued at fair value as determined in accordance
with procedures adopted by the Board of Directors.
Debt securities not traded on a principal securities exchange are valued through
valuations obtained from a commercial pricing service or at the most recent mean
of the bid and asked prices provided by investment dealers in accordance with
procedures established by the Board of Directors.
The value of an exchange-traded foreign security is determined in its national
currency as of the close of trading on the foreign exchange on which it is
traded or as of the close of business on the New York Stock Exchange, if that is
earlier. That value is then exchanged to dollars at the prevailing foreign
exchange rate.
Trading in securities on European and Far Eastern securities exchanges and
over-the-counter markets is normally completed at various times before the close
of business on each day that the New York Stock Exchange is open. If an event
were to occur after the value of a security was established but before the net
asset value per share was determined that was likely to materially change the
net asset value, then that security would be valued at fair value as determined
in accordance with procedures adopted by the Board of Directors.
Trading of these securities in foreign markets may not take place on every New
York Stock Exchange business day. In addition, trading may take place in various
foreign markets on Saturdays or on other days when the New York Stock Exchange
is not open and on which the fund's net asset value is not calculated.
Therefore, such calculation does not take place contemporaneously with the
determination of the prices of many of the portfolio securities used in such
calculation and the value of the fund's portfolio may be affected on days when
shares of the fund may not be purchased or redeemed.
Where to Find Information About Share Price
The net asset values of the Investor Class of the fund is published in leading
newspapers daily. The net asset value may be obtained by calling us or by
accessing our Web site (www.americancentury.com).
Distributions
Distributions from net investment income are declared and paid quarterly.
Distributions from net realized securities gains, if any, generally are declared
and paid annually, usually in December, but the fund may make distributions on a
more frequent basis to comply with the distribution requirements of the Internal
Revenue Code, in all events in a manner consistent with the provisions of the
Investment Company Act.
Participants in employer-sponsored retirement or savings plans must reinvest all
distributions. For shareholders investing through taxable accounts,
distributions will be reinvested unless you elect to receive them in cash.
Distributions of less than $10 generally will be reinvested. Distributions made
shortly after a purchase by check or ACH may be held up to 15 days. You may
elect to have distributions on shares held in certain IRAs and 403(b) plans paid
in cash only if you are at least 59 1/2 years old or permanently and totally
disabled. Distribution checks normally are mailed within seven days after the
record date. Please consult our Investor Services Guide for further information
regarding your distribution options.
A distribution on shares of the fund does not increase the value of your shares
or your total return. At any given time the value of your shares includes the
undistributed net gains, if any, realized by the fund on the sale of portfolio
securities, and undistributed dividends and interest received, less fund
expenses.
Because such gains and dividends are included in the price of your shares, when
they are distributed the price of your shares is reduced by the amount of the
distribution. If you buy your shares through a taxable account just before the
distribution, you will pay the full price for your shares, and then receive a
portion of the purchase price back as a taxable distribution. See "Taxes," this
page.
Taxes
The fund has elected to be taxed under Subchapter M of the Internal Revenue
Code, which means that to the extent its income is distributed to shareholders,
it pays no income tax.
Tax-Deferred Accounts
If fund shares are purchased through tax-deferred accounts, such as a qualified
employer-sponsored retirement or savings plan, income and capital gains
distributions paid by the fund generally will not be subject to current
taxation, but will accumulate in your account under the plan on a tax-deferred
basis.
Employer-sponsored retirement and savings plans are governed by complex tax
rules. If you elect to participate in your employer's plan, consult your plan
administrator, your plan's summary plan description, or a professional tax
advisor regarding the tax consequences of participation in the plan,
contributions to, and withdrawals or distributions from the plan.
Taxable Accounts
If fund shares are purchased through taxable accounts, distributions of net
investment income and net short-term capital gains are taxable to you as
ordinary income. The dividends from net income may qualify for the 70%
dividends-received deduction for corporations to the extent that the fund held
shares receiving the dividend for more than 45 days. Distributions from gains on
assets held longer than 12 months are taxable as long-term gains regardless of
the length of time you have held the shares. However, you should note that any
loss realized upon the sale or redemption of shares held for six months or less
will be treated as a long-term capital loss to the extent of any distribution of
long-term capital gain to you with respect to such shares.
Dividends and interest received by the fund on foreign securities may give rise
to withholding and other taxes imposed by foreign countries. Tax conventions
between certain countries and the United States may reduce or eliminate such
taxes. Foreign countries generally do not impose taxes on capital gains in
respect of investments by non-resident investors. The foreign taxes paid by the
fund will reduce its dividends.
Distributions are taxable to you regardless of whether they are taken in cash or
reinvested, even if the value of your shares is below your cost. If you purchase
shares shortly before a distribution, you must pay income taxes on the
distribution, even though the value of your investment (plus cash received, if
any) will not have increased. In addition, the share price at the time you
purchase shares may include unrealized gains in the securities held in the
investment portfolio of the fund. If these portfolio securities are subsequently
sold and the gains are realized, they will, to the extent not offset by capital
losses, be paid to you as a distribution of capital gains and will be taxable to
you as short-term or long-term capital gains.
In January of the year following the distribution, if you own shares in a
taxable account, you will receive a Form 1099-DIV notifying you of the status of
your distributions for federal income tax purposes.
Distributions also may be subject to state and local taxes, even if all or a
substantial part of such distributions are derived from interest on U.S.
government obligations which, if you received them directly, would be exempt
from state income tax. However, most but not all states allow this tax exemption
to pass through to fund shareholders when a fund pays distributions to its
shareholders. You should consult your tax advisor about the tax status of such
distributions in your own state.
If you have not complied with certain provisions of the Internal Revenue Code
and Regulations, we are required by federal law to withhold and remit to the IRS
31% of reportable payments (which may include dividends, capital gains
distributions and redemptions). Those regulations require you to certify that
the Social Security number or tax identification number you provide is correct
and that you are not subject to 31% withholding for previous under-reporting to
the IRS. You will be asked to make the appropriate certification on your
application. Payments reported by us that omit your Social Security number or
tax identification number will subject us to a penalty of $50, which will be
charged against your account if you fail to provide the certification by the
time the report is filed. This charge is not refundable.
Redemption of shares of the fund (including redemptions made in an exchange
transaction) will be a taxable transaction for federal income tax purposes and
shareholders generally will recognize a gain or loss in an amount equal to the
difference between the basis of the shares and the amount received. Assuming
that shareholders hold such shares as a capital asset, the gain or loss will be
a capital gain or loss and generally will be considered long-term, if
shareholders have held such shares for a period of more than 12 months. 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, resulting in a
postponement of the recognition of such loss for federal income tax purposes.
In addition to the federal income tax consequences described above relating to
an investment in the fund, there may be other federal, state or local tax
considerations that depend upon the circumstances of each particular investor.
Prospective shareholders are therefore urged to consult their tax advisors with
respect to the effect of this investment on their own specific situations.
Management
Investment Management
Under the laws of the State of Maryland, the Board of Directors is responsible
for managing the business and affairs of the fund. Acting pursuant to an
investment management agreement entered into with the fund, American Century
Investment Management, Inc. serves as the manager of the fund. Its principal
place of business is American Century Tower, 4500 Main Street, Kansas City,
Missouri 64111. The manager has been providing investment advisory services to
investment companies and institutional clients since it was founded in 1958.
Barclays Global Investors, N.A., acting pursuant to a subadvisory agreement
among it, American Century Investment Management, Inc. and the fund, makes the
day-to-day investment decisions for the fund in accordance with the fund's
investment objective, policies and restrictions under the supervision of the
manager and the Board of Directors.
The activities of the manager are subject only to directions of the fund's Board
of Directors. The manager pays all the expenses of the fund except brokerage,
taxes, interest, fees and expenses of the non-interested person directors
(including counsel fees) and extraordinary expenses.
For the services provided to the Investor Class of the fund, the manager
receives an annual fee of 0.49% of the average net assets of the fund.
For subadvisory services, the manager pays the subadvisor an annual fee of 0.05%
of the average net assets of the fund.
On the first business day of each month, the fund pays a management fee to the
manager for the previous month at the specified rate. The fee for the previous
month is calculated by multiplying the applicable fee for the fund by the
aggregate average daily closing value of the fund's net assets during the
previous month, and further multiplying that product by a fraction, the
numerator of which is the number of days in the previous month and the
denominator of which is 365 (366 in leap years).
Code of Ethics
The fund and the manager have adopted a Code of Ethics that restricts personal
investing practices by employees of the manager and its affiliates. Among other
provisions, the Code of Ethics requires that employees with access to
information about the purchase or sale of securities in the fund's portfolios
obtain preclearance before executing personal trades. With respect to Portfolio
Managers and other investment personnel, the Code of Ethics prohibits
acquisition of securities in an initial public offering, as well as profits
derived from the purchase and sale of the same security within 60 calendar days.
These provisions are designed to ensure that the interests of fund shareholders
come before the interests of the people who manage those funds.
Transfer and Administrative Services
American Century Services Corporation, American Century Tower, 4500 Main Street,
Kansas City, Missouri 64111 acts as transfer agent and dividend-paying agent for
the fund. It provides facilities, equipment and personnel to the fund, and is
paid for such services by the manager.
Certain recordkeeping and administrative services that would otherwise be
performed by the transfer agent may be performed by an insurance company or
other entity providing similar services for various retirement plans using
shares of the fund as a funding medium, by broker-dealers and financial advisors
for their customers investing in shares of American Century or by sponsors of
multi mutual fund no- or low-transaction fee programs. The manager or an
affiliate may enter into contracts to pay them for such recordkeeping and
administrative services out of its unified management fee.
Although there is no sales charge levied by the fund, transactions in shares of
the fund may be executed by brokers or investment advisors who charge a
transaction-based fee or other fee for their services. Such charges may vary
among broker-dealers and financial advisors, but in all cases will be retained
by the broker-dealer or financial advisor and not remitted to the fund or the
manager. You should be aware of the fact that these transactions may be made
directly with American Century without incurring such fees.
From time to time, special services may be offered to shareholders who maintain
higher share balances in our family of funds. These services may include the
waiver of minimum investment requirements, expedited confirmation of shareholder
transactions, newsletters and a team of personal representatives. Any expenses
associated with these special services will be paid by the manager.
The manager and transfer agent are both wholly owned by American Century
Companies, Inc., which is controlled by James E. Stowers Jr., Chairman of the
fund's Board of Directors.
Pursuant to a Sub-Administration Agreement with the manager, Funds Distributor,
Inc. (FDI) serves as the Co-Administrator for the fund. FDI is responsible for
(i) providing certain officers of the fund and (ii) reviewing and filing
marketing and sales literature on behalf of the fund. The fees and expenses of
FDI are paid by the manager out of its unified fee.
Year 2000 Issues
Many of the world's computer systems currently cannot properly recognize or
process date-sensitive information relating to the Year 2000 and beyond. Because
this may impact the computer systems of various American Century-affiliated and
external service providers for the fund, American Century formally initiated a
Year 2000 readiness project in July 1997. It involves a team of information
technology professionals assisted by outside consultants and guided by a
senior-level steering committee. The team's goal is to assess the impact of the
Year 2000 on American Century's systems, renovate or replace noncompliant
critical systems and test those systems. In addition, the team has been working
to gather information about the Year 2000 efforts of the fund's other major
service providers. Although American Century believes its critical systems will
function properly in the Year 2000, this is not guaranteed. If the efforts of
American Century or its external service providers are not successful, the
fund's business, particularly its ability to provide shareholder services, may
be hampered.
In addition, the issuers of securities the fund owns could have Year 2000
computer problems. These problems could negatively affect the value of their
securities, which, in turn, could impact the fund's performance. The manager has
established a process to gather publicly available information about the Year
2000 readiness of these issuers. However, this process may not uncover all
relevant information, and the information gathered may not be complete and
accurate. Moreover, an issuer's Year 2000 readiness is only one of many factors
the manager may consider when making investment decisions, and other factors may
receive greater weight.
Distribution of Fund Shares
The fund's shares are distributed by FDI, a registered broker-dealer. FDI is a
wholly-owned indirect subsidiary of Boston Institutional Group, Inc. FDI's
principal business address is 60 State Street, Suite 1300, Boston, Massachusetts
02109. The Investor Class of shares does not pay any commissions or sales loads
to the distributor or to any other broker-dealers or financial intermediaries in
connection with the distribution of fund shares.
Investors may open accounts with American Century only through the distributor.
All purchase transactions in the fund offered by this Prospectus are processed
by the transfer agent, which is authorized to accept any instructions relating
to fund accounts. All purchase orders must be accepted by the distributor. All
fees and expenses of FDI in acting as distributor for the fund are paid by the
manager.
Further Information About American Century
American Century Capital Portfolios, Inc., (the "Corporation"), the issuer of
the fund, was organized as a Maryland corporation on June 14, 1993.
The corporation is an open-end management investment company whose shares were
first offered for sale September 1, 1993. Its business and affairs are managed
by its officers under the direction of its Board of Directors.
The principal office of the fund is American Century Tower, 4500 Main Street,
P.O. Box 419200, Kansas City, Missouri 64141-6200. All inquiries may be made by
mail to that address, or by telephone to 1-800-345-2021 (international calls:
816-531-5575).
American Century Capital Portfolios, Inc. currently issues five series of $0.01
par value shares. Each series is commonly referred to as a fund. The assets
belonging to each series of shares are held separately by the custodian.
American Century offers two classes of shares of the fund. The shares offered by
this Prospectus are Investor Class shares and have no up-front charges,
commissions or 12b-1 fees.
The other class of shares is primarily offered to institutional investors or
through institutional distribution channels, such as employer-sponsored
retirement plans through banks, broker-dealers, insurance companies or other
financial intermediaries. The other class has different fees, expenses, and/or
minimum investment requirements than the Investor Class. The difference in the
fee structures among 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 manager 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 1-800-345-3533 or contact a sales representative or financial intermediary
who offers those classes of shares.
Except as described below, all classes of shares of the fund will have identical
voting, dividend, liquidation and other rights, preferences, terms and
conditions. The only differences among the Corporation's various 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.
Each share, irrespective of series or class, is entitled to one vote for each
dollar of net asset value applicable to such share on all questions, except for
those matters that must be voted on separately by the series or class of shares
affected. Matters affecting only one series or class are voted upon only by that
series or class.
Shares have non-cumulative voting rights, which means that the holders of more
than 50% of the votes cast in an election of directors can elect all of the
directors if they choose to do so, and in such event the holders of the
remaining votes will not be able to elect any person or persons to the Board of
Directors.
Unless required by the Investment Company Act, it will not be necessary for the
fund to hold annual meetings of shareholders. As a result, shareholders may not
vote each year on the election of directors or the appointment of auditors.
However, pursuant to the fund's by-laws, the holders of shares representing at
least 10% of the votes entitled to be cast may request the fund to hold a
special meeting of shareholders. We will assist in the communication with other
shareholders.
We reserve the right to change any of our policies, practices and procedures
described in this Prospectus, including the Statement of Additional Information,
without shareholder approval except in those instances where shareholder
approval is expressly required.
P.O. Box 419200
Kansas City, Missouri
64141-6200
Investor Services:
1-800-345-2021 OR 816-531-5575
Automated Information Line:
1-800-345-8765
Telecommunications Device for the Deaf:
1-800-634-4113 OR 816-444-3485
FAX: 816-340-7962
www.americancentury.com
[american century logo[reg.sm])
American
Century
<PAGE>
PROSPECTUS
[american century logo[reg.sm])
American
Century
DECEMBER 30, 1998
AMERICAN CENTURY GROUP
Equity Index Fund
INSTITUTIONAL CLASS
AMERICAN CENTURY INVESTMENTS
FAMILY OF FUNDS
American Century Investments offers you nearly 70 fund choices covering stocks,
bonds, money markets, specialty investments and blended portfolios. To help you
find the funds that may meet your investment needs, American Century funds have
been divided into three groups based on investment style and objectives. These
groups, which appear below, are designed to help simplify your fund decisions.
American Century Investments
Benham Group American Century Group Twentieth Century Group
MONEY MARKET FUNDS ASSET ALLOCATION & GROWTH FUNDS
GOVERNMENT BOND FUNDS BALANCED FUNDS INTERNATIONAL FUNDS
DIVERSIFIED BOND FUNDS CONSERVATIVE EQUITY FUNDS
MUNICIPAL BOND FUNDS SPECIALTY FUNDS
Equity Index Fund
PROSPECTUS
December 30, 1998
Equity Index Fund
INSTITUTIONAL CLASS
AMERICAN CENTURY CAPITAL PORTFOLIOS, INC.
American Century Capital Portfolios, Inc. is a part of American Century
Investments, a family of funds that includes nearly 70 no-load mutual funds
covering a variety of investment opportunities. One fund from our American
Century Group that invests primarily in equity securities is described in this
Prospectus. Its investment objective is listed on page 2 of this Prospectus. The
other funds are described in separate prospectuses.
The fund's shares offered in this Prospectus (the Institutional Class shares)
are sold at their net asset value with no sales charges or commissions. The
Institutional Class shares are made available for purchase by large
institutional shareholders, such as bank trust departments, corporations,
endowments, foundations and financial advisors that meet the fund's minimum
investment requirements. Institutional Class shares are not available for
purchase by insurance companies or participant-directed employer-sponsored
retirement plans.
This Prospectus gives you information about the fund that you should know before
investing. Please read this Prospectus carefully and retain it for future
reference. Additional information is included in the Statement of Additional
Information dated December 30, 1998, and filed with the Securities and Exchange
Commission. It is incorporated into this Prospectus by reference. To obtain a
copy without charge, call or write:
American Century Investments
4500 Main Street o P.O. Box 419385
Kansas City, Missouri 64141-6385 o 1-800-345-3533
International calls: 816-531-5575
Telecommunications Device for the Deaf:
1-800-345-1833 o In Missouri: 816-444-3038
www.americancentury.com
Additional information, including this Prospectus and the Statement of
Additional Information, may be obtained by accessing the Web site maintained by
the SEC (www.sec.gov).
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Investment Objective of the Fund
AMERICAN CENTURY EQUITY INDEX FUND
The investment objective of Equity Index Fund is long-term capital growth. The
fund seeks to achieve this objective by matching, as closely as possible, the
investment results of the Standard & Poor's 500 Composite Price Index (the "S&P
500 Index").
There is no assurance that the fund will achieve its investment objective.
NO PERSON IS AUTHORIZED BY THE FUND TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS OR IN OTHER PRINTED
OR WRITTEN MATERIAL ISSUED BY OR ON BEHALF OF THE FUND, AND YOU SHOULD NOT RELY
ON ANY OTHER INFORMATION OR REPRESENTATION.
TABLE OF CONTENTS
Investment Objective of the Fund
Transaction And Operating Expense Table
Information Regarding the Fund
Investment Policies of the Fund
S&P 500 Index
Equity Securities
Cash Management
Other Investment Practices, Their Characteristics and Risks
Non-Diversified Company
Futures Contracts
Portfolio Turnover
Repurchase Agreements
Derivative Securities
Performance Information
How to Invest with American Century Investments
American Century Investments
Investing in American Century
How to Open an Account
By Mail
By Wire
By Exchange
In Person
Subsequent Investments
By Mail
By Telephone
By Wire
In Person
Automatic Investment Plan
Minimum Investment
How to Exchange from One Account to Another
By Mail
By Telephone
How to Redeem Shares
By Mail
By Telephone
By Check-A-Month
Other Automatic Redemptions
Redemption Proceeds
By Check
By Wire and ACH
Special Requirements for Large Redemptions
Signature Guarantee
Special Shareholder Services
Open Order Service
Tax-Qualified Retirement Plans
Important Policies Regarding Your Investments
Reports to Shareholders
Customers of Banks, Broker-Dealers and Other Financial Intermediaries
Additional Information You Should Know
Share Price
When Share Price Is Determined
How Share Price Is Determined
Where to Find Information About Share Price
Distributions
Taxes
Tax-Deferred Accounts
Taxable Accounts
Management
Investment Management
Code of Ethics
Transfer and Administrative Services
Year 2000 Issues
Distribution of Fund Shares
Further Information About American Century
Transaction And Operating Expense Table
SHAREHOLDER TRANSACTION EXPENSES:
Maximum Sales Load Imposed on Purchases .......................... none
Maximum Sales Load Imposed on Reinvested Dividends ............... none
Deferred Sales Load .............................................. none
Redemption Fee ................................................... none
Exchange Fee ..................................................... none
ANNUAL FUND OPERATING EXPENSES:
(as a percentage of net assets)
Management Fees...................................................0.29%
12b-1 Fees ....................................................... none
Other Expenses(1) ................................................0.00%
Total Fund Operating Expenses ....................................0.29%
EXAMPLE
You would pay the following expenses 1 year $ 3
on a $1,000 investment, assuming a 5% 3 year 9
annual return and redemption at the 5 years 16
end of each time period: 10 years 37
(1) Other expenses, which include the fees and expenses (including legal
counsel fees) of those directors who are not "interested persons" as
defined in the Investment Company Act, are expected to be less than 0.01 of
1% of average net assets for the current fiscal year.
The purpose of this table is to help you understand the various costs and
expenses that you, as a shareholder, will bear directly or indirectly in
connection with an investment in the class of shares of the fund offered by this
Prospectus. The example set forth above assumes reinvestment of all dividends
and distributions and uses a 5% annual rate of return as required by SEC
regulations.
Neither the 5% rate of return nor the expenses shown above should be considered
indications of past or future returns and expenses. Actual returns and expenses
may be greater or less than those shown.
The shares offered by this Prospectus are Institutional Class shares and have no
up-front or deferred sales charges, commissions or 12b-1 fees. The fund offers
one other class of shares which is primarily made available to retail investors.
The other class has a different fee structure than the Institutional Class. The
difference in the fee structures among the classes is the result of their
difference in the fee structures among 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 manager for core investment
advisory services. Accordingly, the core investment advisory expenses do not
vary by class. A difference in fees will result in different performance for
those classes. For additional information about the various classes, see
"Further Information About American Century," page ____.
Information Regarding the fund
Investment Policies of the Fund
The fund has adopted certain investment restrictions that are set forth in the
Statement of Additional Information. Those restrictions, as well as the
investment objective of the fund identified on page 2 of this Prospectus, and
any other investment policies designated as "fundamental" in this Prospectus or
in the Statement of Additional Information, cannot be changed without
shareholder approval. The fund has implemented additional investment policies
and practices to guide their activities in the pursuit of its investment
objective. These policies and practices, which are described throughout this
Prospectus, are not designated as fundamental policies and may be changed
without shareholder approval.
S&P 500 Index
Equity Index Fund seeks to match the investment results of the S&P 500 Index.
The S&P 500 Index is composed of 500 selected common stocks, most of which are
listed on the New York Stock Exchange. Standard & Poor's, a division of The
McGraw-Hill Companies, Inc. (the "Index Sponsor"), chooses the stocks to be
included in the S&P 500 Index solely on a statistical basis. The weightings of
stocks in the S&P 500 Index are based on each stock's relative total market
capitalization. Because of this weighting, the fund expects that the 50 largest
companies will comprise a large proportion of the S&P 500 Index. The advisor
generally will select stocks for the fund's portfolio in order of their
weightings in the S&P 500 Index beginning with the heaviest weighted stocks. The
fund attempts to be fully invested at all times in the stocks that comprise the
S&P 500 Index and stock index futures as described below and, in any event, at
least 80% of the fund's total assets will be so invested. With respect to the
fund's assets invested in the stocks in the S&P 500 Index, the percentage of
such assets invested in each stock is expected to be approximately the same as
the percentage it represents in the S&P 500 Index.
"Standard & Poor's(R)," "Standard & Poor's 500," "S&P 500(R)"and "S&P(R)" are
trademarks of the Index Sponsor, and have been licensed for use by the fund.
The fund is managed by determining which stocks are to be purchased or sold to
match, to the extent feasible, the investment characteristics of the S&P 500
Index. The fund will attempt to achieve a high correlation between the
performance of its portfolio and that of the S&P 500 Index, in both rising and
falling markets without taking into account expenses.
The fund's ability to correlate its performance with that of the S&P 500 Index,
however, may be affected by, among other things, changes in securities markets,
the manner in which the total return of the S&P 500 Index is calculated, the
size of the fund's portfolio, the amount of cash or cash equivalents held in the
fund's portfolio, and the timing, frequency and size of shareholder purchases
and redemptions. The fund will use cash flows from shareholder purchase and
redemption activity to maintain, to the extent feasible, the similarity of its
portfolio to the securities comprising the S&P 500 Index.
Inclusion of a security in the S&P 500 Index in no way implies an opinion by the
Index Sponsor as to its attractiveness as an investment. In the future, subject
to the approval of the fund's shareholders, the fund may select a different
index if such a standard of comparison is deemed to be more representative of
the performance of the securities the fund seeks to match. The fund is not
sponsored, endorsed, sold or promoted by the Index Sponsor.
Equity Securities
Equity securities fluctuate in value, based on many factors, including ones that
are not related to the value of the individual issuers of the equity securities.
These fluctuations in value can be large. Investors must be prepared to accept
the risk that the fund's share price may fluctuate and that they may lose money
as a result.
Cash Management
When the fund has cash reserves, the fund may invest in money market instruments
consisting of U.S. Government securities, time deposits, certificates of
deposit, bankers' acceptances, high-grade commercial paper, and repurchase
agreements. In addition, the fund may invest up to 5% of its total assets in any
money market fund, including those advised by the advisor or subadvisor.
Other Investment Practices, Their Characteristics and Risks
For additional information, see "Investment Restrictions" in the Statement of
Additional Information.
Non-Diversified Company
The fund is a "non-diversified" investment company. This means that the
proportion of the fund's assets that may be invested in the securities of a
single issuer is not limited by the Investment Company Act of 1940 (the
"Investment Company Act"). A "diversified" investment company is required by the
Investment Company Act generally, with respect to 75% of its total assets, to
invest not more than 5% of such assets in the securities of a single issuer.
Depending upon the composition of the S&P 500 Index, a relatively high
percentage of the fund's assets may be invested in the securities of a limited
number of issuers, some of which may be within the same economic sector.
Consequently, the fund's portfolio may be more sensitive to changes in the
market value of a single issuer or industry.
However, to meet Federal tax requirements, at the close of each quarter the fund
may not have more than 25% of its total assets invested in any one issuer and,
with respect to 50% of total assets, not more than 5% of its total assets
invested in any one issuer.
Futures Contracts
The fund may invest in stock index futures in anticipation of taking a market
position when available cash balances do not permit an economically efficient
trade in the cash market. A futures contract is an agreement to take or make
delivery of an amount of cash based on the difference between the value of the
index at the beginning and at the end of the contract period.
Rather than actually purchasing the specific financial assets, or the securities
of a market index, the manager may purchase a futures contract, which reflects
the value of such underlying securities. For example, S&P 500 futures reflect
the value of the underlying companies that comprise the S&P 500 Index. If the
aggregate market value of the underlying index securities increases or decreases
during the contract period, the value of the S&P 500 futures can be expected to
reflect such increase or decrease. As a result, the manager is able to expose to
the equity markets cash that is maintained by the fund to meet anticipated
redemptions or held for future investment opportunities. Because futures
generally settle within a day from the date they are closed out (compared with
three days for the types of equity securities primarily invested in by the fund)
the manager believes that this use of futures allows the fund to effectively be
fully invested in equity securities while maintaining the liquidity needed by
the fund.
When the fund enters into a futures contract, it must make deposit of
securities, known as "initial margin," as partial security for its performance
under the contract. As the value of the underlying financial assets fluctuates,
the parties to the contract are required to make additional margin payments,
known as "variation margin," to cover any additional obligation it may have
under the contract. Assets set aside by the fund as initial or variation margin
may not be disposed of so long as the fund maintains the contract.
The fund may not purchase leveraged futures. The fund will deposit in a
segregated account with its custodian bank appropriate securities in an amount
equal to the fluctuating market value of the index futures contracts it has
purchased, less any margin deposited on its position. The fund will invest only
in exchange-traded futures.
Portfolio Turnover
Investment decisions to purchase and sell securities are based on the
anticipated contribution of the security in question to the fund's investment
objectives. Because the fund is managed to match the performance of an index, it
is not expected that the fund will have a high portfolio turnover rate. The
manager believes, however, that the rate of portfolio turnover is irrelevant
when it determines a change is in order to achieve those objectives and,
accordingly, the annual portfolio turnover rate cannot be anticipated.
Higher turnover would generate correspondingly greater brokerage commissions
that the fund pays directly. Higher portfolio turnover also may increase the
likelihood of realized capital gains, if any, distributed by the fund. See
"Taxes," page 16.
Repurchase Agreements
The fund may invest in repurchase agreements when such transactions present an
attractive short-term return on cash that is not otherwise committed to the
purchase of securities pursuant to the fund's investment policies.
A repurchase agreement occurs when, at the time the fund purchases an
interest-bearing obligation, the seller (a bank or a broker-dealer registered
under the Securities Exchange Act of 1934) agrees to repurchase it on a
specified date in the future at an agreed-upon price. The repurchase price
reflects an agreed-upon interest rate during the time the fund's money is
invested in the security.
Since the security purchased constitutes security for the repurchase obligation,
a repurchase agreement can be considered a loan collateralized by the security
purchased. The fund's risk is the ability of the seller to pay the agreed-upon
repurchase price on the repurchase date. If the seller defaults, the fund may
incur costs in disposing of the collateral, which would reduce the amount
realized thereon. If the seller seeks relief under the bankruptcy laws, the
disposition of the collateral may be delayed or limited. To the extent the value
of the security decreases, the fund could experience a loss.
The fund will limit repurchase agreement transactions to securities issued by
the U.S. government, its agencies and instrumentalities, and will enter into
such transactions only with those banks and securities dealers who are deemed
creditworthy pursuant to criteria adopted by the fund's Board of Directors.
Derivative Securities
To the extent permitted by its investment objective and policies, the fund may
invest in securities that are commonly referred to as "derivative" securities.
Generally, a derivative is a financial arrangement the value of which is based
on, or "derived" from, a traditional security, asset, or market index. Certain
derivative securities are more accurately described as "index/structured"
securities. Index/structured securities are derivative securities whose value or
performance is linked to other equity securities (such as depositary receipts),
currencies, interest rates, indices or other financial indicators (reference
indices).
Some "derivatives" such as mortgage-related and other asset-backed securities
are in many respects like any other investment, although they may be more
volatile or less liquid than more traditional debt securities.
There are many different types of derivatives and many different ways to use
them. Futures and options are commonly used for traditional hedging purposes to
attempt to protect the fund from exposure to changing interest rates, securities
prices, or currency exchange rates and for cash management purposes as a
low-cost method of gaining exposure to a particular securities market without
investing directly in those securities.
The return on a derivative security may increase or decrease, depending upon
changes in the reference index or instrument to which it relates.
There is a range of risks associated with derivative investments, including but
not limited to:
* the risk that the underlying security, interest rate, market index or other
financial asset will not move in the direction the portfolio manager
anticipates;
* the possibility that there will be no liquid secondary market, or the
possibility that price fluctuation limits will be imposed by the relevant
exchange, either of which may make it difficult or impossible to close out
a position when desired;
* the risk that adverse price movements in an instrument will result in a
loss substantially greater than the fund's initial investment; and
* the risk that the counterparty will fail to perform its obligations.
The Board of Directors has approved the manager's policy regarding investments
in derivative securities. That policy specifies factors that must be considered
in connection with a purchase of derivative securities. The policy also
establishes a committee that must review certain proposed purchases before the
purchases can be made. The manager will report on fund activity in derivative
securities to the Board of Directors as necessary. In addition, the Board will
review the manager's policy for investments in derivative securities annually.
Performance Information
From time to time, the fund may advertise performance data. Fund performance may
be shown by presenting one or more performance measurements, including
cumulative total return or average annual total return. Performance data may be
quoted separately for the Investor Class and for the other classes, if any are
established in the future.
Cumulative total return data is computed by considering all elements of return,
including reinvestment of dividends and capital gains distributions, over a
stated period of time. Average annual total return is determined by computing
the annual compound return over a stated period of time that would have produced
the fund's cumulative total return over the same period if the fund's
performance had remained constant throughout.
The fund also may include in advertisements data comparing performance with the
performance of non-related investment media, published editorial comments and
performance rankings compiled by independent organizations such as Lipper
Analytical Services and publications that monitor the performance of mutual
funds. Performance information may be quoted numerically or may be presented in
a table, graph or other illustration. In addition, fund performance may be
compared to well-known indices of market performance including the S&P 500
Index. Fund performance also may be compared, on a relative basis, to other
funds in our fund family. This relative comparison, which may be based upon
historical fund performance or historical or expected volatility or other fund
characteristics, may be presented numerically, graphically or in text. Fund
performance also may be combined or blended with other funds in our fund family,
and that combined or blended performance may be compared to the same indices to
which individual funds may be compared.
All performance information advertised by the fund is historical in nature and
is not intended to represent or guarantee future results. The value of fund
shares when redeemed may be more or less than their original cost.
How to Invest with American Century Investments
American Century Investments
The fund offered by this Prospectus is a part of the American Century
Investments family of mutual funds. Our family provides a full range of
investment opportunities, from the aggressive equity growth funds in our
Twentieth Century Group, to the fixed income funds in our Benham Group, to the
moderate risk and specialty funds in our American Century Group. Please call
1-800-345-3533 for a brochure or prospectuses for the other funds in the
American Century Investments family.
To reduce expenses and demonstrate respect for our environment, we have
initiated a project through which we will eliminate duplicate copies of most
financial reports and prospectuses to most households and deliver account
statements to most households in a single envelope, even if they have more than
one account. If you would like additional copies of financial reports and
prospectuses or separate mailing of account statements, please call us.
Investing in American Century
The following sections explain how to invest in American Century funds,
including purchases, redemptions, exchanges and special services. You will find
more detail about doing business with us by referring to the Investor Services
Guide that you will receive when you open an account.
If you own or are considering purchasing fund shares through an
employer-sponsored retirement plan or through a bank, broker-dealer or other
financial intermediary, the following sections, as well as the information
contained in our Investor Services Guide, may not apply to you. Please read
"Minimum Investment," page _____, and "Customers of Banks, Broker-Dealers and
Other Financial Intermediaries," page _____.
How to Open an Account
To open an account, you must complete and sign an application, furnishing your
taxpayer identification number. (You must also certify whether you are subject
to withholding for failing to report income to the IRS.) Investments received
without a certified taxpayer identification number will be returned.
You may invest in the following ways:
By Mail
Send a completed application and check or money order payable in U.S. dollars to
American Century Investments.
By Wire
You may make your initial investment by wiring funds. To do so, call us or mail
a completed application and provide your bank with the following information:
Receiving Bank And Routing Number:
Commerce Bank, N.A. (101000019)
Beneficiary (BNF):
American Century Services Corporation
4500 Main St., Kansas City, Missouri 64111
Beneficiary Account Number (BNF ACCT):
2804918
Reference For Beneficiary (RFB):
American Century account number into which you are investing. If more than one,
leave blank and see Bank To Bank Information below.
Originator To Beneficiary (OBI):
Name and address of owner of account into which you are investing.
Bank To Bank Information
(BBI Or Free Form Text):
Taxpayer identification or Social Security number.
If more than one account, account numbers and amount to be invested in each
account.
Current tax year, previous tax year or rollover designation if an IRA.
Specify whether traditional IRA, Roth IRA, Education IRA, SEP-IRA,
SARSEP-IRA, SIMPLE Employer or SIMPLE Employee.
By Exchange
Call 1-800-345-3533 from 7 a.m. to 7 p.m. Central time to get information on
opening an account by exchanging from another American Century account. See page
10 for more information on exchanges.
In Person
If you prefer to work with a representative in person, please visit one of our
Investor Centers, located at:
4500 Main Street
Kansas City, Missouri 64111
4917 Town Center Drive
Leawood, Kansas 66211
1665 Charleston Road
Mountain View, California 94043
2000 S. Colorado Blvd.
Denver, Colorado 80222
Subsequent Investments
Subsequent investments may be made by an automatic bank, payroll or government
direct deposit (see "Automatic Investment Plan," this page) or by any of the
methods below. The minimum investment requirement for subsequent investments is
$250 for checks submitted without the investment slip portion of a previous
statement or confirmation and $50 for all other types of subsequent investments.
By Mail
When making subsequent investments, enclose your check with the investment slip
portion of a previous statement or confirmation. If the investment slip is not
available, indicate your name, address and account number on your check or a
separate piece of paper. (Please be aware that the investment minimum for
subsequent investments is higher without an investment slip.)
By Telephone
Upon completion of your application and once your account is open, you may make
investments by telephone. You may call an Institutional Service Representative
or use our Automated Information Line.
By Wire
You may make subsequent investments by wire. Follow the wire transfer
instructions on page 9 and indicate your account number.
In Person
You may make subsequent investments in person at one of our Investor Centers.
The locations of our Investor Centers are listed on this page.
Automatic Investment Plan
By completing the application and electing to make investments automatically, we
will draw on your bank account regularly. Such investments must be at least the
equivalent of $50 per month. You also may choose an automatic payroll or
government direct deposit. If you are establishing a new account, check the
appropriate box under "Automatic Investments" on your application to receive
more information. If you would like to add a direct deposit to an existing
account, please call an Investor Services Representative.
Minimum Investment
The minimum investment is $5 million ($3 million for endowments and
foundations). If you invest with us through a bank, broker-dealer or other
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). 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 shares.
How to Exchange from One Account to Another
As long as you meet any minimum investment requirements, you may exchange your
fund shares to our other funds up to six times per year per account. An exchange
request will be processed as of the same day it is received, if it is received
before the fund's net asset values are calculated, which is one hour prior to
the close of the New York Stock Exchange for funds issued by American Century
Target Maturities Trust and at the close of the Exchange for all of our other
funds. See "When Share Price Is Determined," page 15.
For any single exchange, the shares of each fund being acquired must have a
value of at least $100. However, we will allow investors to set up an Automatic
Exchange Plan between any two funds in the amount of at least $50 per month. See
our Investor Services Guide for further information about exchanges.
If, in any 90-day period, the total of your exchanges and your redemptions from
any one account exceeds the lesser of $250,000 or 1% of the fund's assets,
further exchanges will be subject to special requirements to comply with our
policy on large redemptions. See "Special Requirements for Large Redemptions,"
page 11.
By Mail
You may direct us in writing to exchange your shares from one American Century
account to another. For additional information, please see our Investor Services
Guide.
By Telephone
You can make exchanges over the telephone upon completion and receipt of your
application or by calling us at 1-800-345-3533 to get the appropriate form.
How to Redeem Shares
We will redeem or "buy back" your shares at any time. Redemptions will be made
at the next net asset value determined after a complete redemption request is
received.
Please note that a request to redeem shares in an IRA or 403(b) plan must be
accompanied by an executed IRS Form W4-P and a reason for withdrawal as
specified by the IRS.
By Mail
Your written instructions to redeem shares may be made either by a redemption
form, which we will send you upon request, or by a letter to us. Certain
redemptions may require a signature guarantee. Please see "Signature Guarantee,"
page 12.
By Telephone
Upon completion of your application and once your account is open, you may
redeem your shares by calling an Institutional Service Representative.
By Check-A-Month
You may redeem shares by Check-A-Month. A Check-A-Month plan automatically
redeems enough shares each month to provide you with a check in an amount you
choose (minimum $50). To set up a Check-A-Month plan, please call and request
our Check-A-Month brochure.
Other Automatic Redemptions
You may elect to make redemptions automatically by authorizing us to send funds
to you or to your account at a bank or other financial institution. To set up
automatic redemptions, call an Institutional Service Representative.
Redemption Proceeds
Please note that shortly after a purchase of shares is made by check or
electronic draft (also known as an ACH draft) from your bank, we may wait up to
15 days or longer to send redemption proceeds (to allow your purchase funds to
clear). No interest is paid on the redemption proceeds after the redemption is
processed but before your redemption proceeds are sent.
Redemption proceeds may be sent to you in one of the following ways:
By Check
Ordinarily, all redemption checks will be made payable to the registered owner
of the shares and will be mailed only to the address of record. For more
information, please refer to our Investor Services Guide.
By Wire and ACH
You may authorize us to transmit redemption proceeds by wire or ACH. These
services will be effective 15 days after we receive the authorization.
Your bank will usually receive wired funds within 48 hours of transmission.
Funds transferred by ACH may be received up to seven days after transmission.
Once the funds are transmitted, the time of receipt and the funds' availability
are not under our control.
Special Requirements for Large Redemptions
We have elected to be governed by Rule 18f-1 under the Investment Company Act,
which obligates the fund to make certain redemptions in cash. This requirement
to pay redemptions in cash applies to situations where one shareholder redeems,
during any 90-day period, up to the lesser of $250,000 or 1% of the assets of
the fund. Although redemptions in excess of this limitation will also normally
be paid in cash, we reserve the right under unusual circumstances to honor these
redemptions by making payment in whole or in part in readily marketable
securities (a "redemption-in-kind").
If payment is made in securities, the securities, selected by the fund, will be
valued in the same manner as they are in computing the fund's net asset value
and will be provided without prior notice.
If you expect to make a large redemption and would like to avoid any possibility
of being paid in securities, you may do so by providing 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. Receipt of your
instruction 15 days prior to the transaction provides the fund with sufficient
time to raise the cash in an orderly manner to pay the redemption and thereby
minimizes the effect of the redemption on the fund and its remaining
shareholders.
Despite the fund's right to redeem fund shares through a redemption-in-kind, we
do not expect to exercise this option unless the fund has an unusually low level
of cash to meet redemptions and/or is experiencing unusually strong demands for
its cash. Such a demand might be caused, for example, by extreme market
conditions that result in an abnormally high level of redemption requests
concentrated in a short period of time. Absent these or similar circumstances,
we expect redemptions in excess of $250,000 to be paid in cash in any fund with
assets of more than $50 million if total redemptions from any one account in any
90-day period do not exceed one-half of 1% of the total assets of the fund.
Signature Guarantee
To protect your accounts from fraud, some transactions will require a signature
guarantee. You can obtain a signature guarantee from a bank or trust company,
credit union, broker-dealer, securities exchange or association, clearing agency
or savings association, as defined by federal law.
For a more in-depth explanation of our signature guarantee policy, or if you
live outside the United States and would like to know how to obtain a signature
guarantee, please consult our Investor Services Guide.
We reserve the right to require a signature guarantee on any transaction, or to
change this policy at any time.
Special Shareholder Services
We offer several services to make your account easier to manage. These are
listed on the account application. You will find more information about each of
these services in our Investor Services Guide.
Our special shareholder services include:
Open Order Service
Through our open order service, you may designate a price at which to buy shares
of a variable-priced fund by exchange from one of our money market funds, or a
price at which to sell shares of a variable-priced fund by exchange to one of
our money market funds. The designated purchase price must be equal to or lower,
or the designated sale price equal to or higher, than the variable-priced fund's
net asset value at the time the order is placed. If the designated price is met
within 90 calendar days, we will execute your exchange order automatically at
that price (or better). Open orders not executed within 90 days will be
canceled.
If the fund you have selected deducts a distribution from its share price, your
order price will be adjusted accordingly so the distribution does not
inadvertently trigger an open order transaction on your behalf. If you close or
re-register the account from which the shares are to be redeemed, your open
order will be canceled.
Because of their time-sensitive nature, open order transactions are accepted
only by telephone or in person. These transactions are subject to exchange
limitations described in each fund's prospectus, except that orders and
cancellations received before 2 p.m. Central time are effective the same day,
and orders or cancellations received after 2 p.m. Central time are effective the
next business day.
Tax-Qualified Retirement Plans
The fund is available for your tax-deferred retirement plan. Call or write us
and request the appropriate forms for:
Individual Retirement Accounts (IRAs);
403(b) plans for employees of public school systems and non-profit
organizations; or
Profit sharing plans and pension plans for corporations and other
employers.
You can also transfer your tax-deferred plan to us from another company or
custodian. Call or write us for a Request to Transfer form.
Important Policies Regarding Your Investments
Every account is subject to policies that could affect your investment. Please
refer to the Investor Services Guide for further information about the policies
discussed below, as well as further detail about the services we offer.
(1) We reserve the right for any reason to suspend the offering of shares for a
period of time, or to reject any specific purchase order (including
purchases by exchange). Additionally, purchases may be refused if, in the
opinion of the manager, they are of a size that would disrupt the
management of the fund.
(2) We reserve the right to make changes to any stated investment requirements,
including those that relate to purchases, transfers and redemptions. In
addition, we also may alter, add to or terminate any investor services and
privileges. Any changes may affect all shareholders or only certain series
or classes of shareholders.
(3) Shares being acquired must be qualified for sale in your state of
residence.
(4) Transactions requesting a specific price and date, other than open orders,
will be refused. Once you have mailed or otherwise transmitted your
transaction instructions to us, they may not be modified or canceled.
(5) If a transaction request is made by a corporation, partnership, trust,
fiduciary, agent or unincorporated association, we will require evidence
satisfactory to us of the authority of the individual making the request.
(6) We have established procedures designed to assure the authenticity of
instructions received by telephone. These procedures include requesting
personal identification from callers, recording telephone calls, and
providing written confirmations of telephone transactions. These procedures
are designed to protect shareholders from unauthorized or fraudulent
instructions. If we do not employ reasonable procedures to confirm the
genuineness of instructions, then we may be liable for losses due to
unauthorized or fraudulent instructions. The company, its transfer agent
and manager will not be responsible for any loss due to instructions they
reasonably believe are genuine.
(7) All signatures should be exactly as the name appears in the registration.
If the owner's name appears in the registration as Mary Elizabeth Jones,
she should sign that way and not as Mary E. Jones.
(8) Unusual stock market conditions have in the past resulted in an increase in
the number of shareholder telephone calls. If you experience difficulty in
reaching us during such periods, you may send your transaction instructions
by mail, express mail or courier service, or you may visit one of our
Investor Centers. You also may use our Automated Information Line if you
have requested and received an access code and are not attempting to redeem
shares.
(9) If you fail to provide us with the correct certified taxpayer
identification number, we may reduce any redemption proceeds by $50 to
cover the penalty the IRS will impose on us for failure to report your
correct taxpayer identification number on information reports.
(10) We will perform special inquiries on shareholder accounts. A research fee
of $15 per hour may be applied.
Reports to Shareholders
At the end of each calendar quarter, we will send you a consolidated statement
that summarizes all of your American Century holdings, as well as an individual
statement for each fund you own that reflects all year-to-date activity in your
account. You may request a statement of your account activity at any time.
With the exception of most automatic transactions, each time you invest, redeem,
transfer or exchange shares, we will send you a confirmation of the transaction.
See the Investor Services Guide for more detail.
Carefully review all the information relating to transactions on your statements
and confirmations to ensure that your instructions were acted on properly.
Please notify us immediately in writing if there is an error. If you fail to
provide notification of an error with reasonable promptness, i.e., within 30
days of non-automatic transactions or within 30 days of the date of your
consolidated quarterly statement, in the case of automatic transactions, we will
deem you to have ratified the transaction.
No later than January 31 of each year, we will send you reports that you may use
in completing your U.S. income tax return. See the Investor Services Guide for
more information.
Each year, we will send you an annual and a semiannual report relating to your
fund, each of which is incorporated herein by reference. The annual report
includes audited financial statements and a list of portfolio securities as of
the fiscal year end. The semiannual report includes unaudited financial
statements for the first six months of the fiscal year, as well as a list of
portfolio securities at the end of the period. You also will receive an updated
prospectus at least once each year. Please read these materials carefully, as
they will help you understand your fund.
Customers of Banks, Broker-Dealers and Other Financial Intermediaries
Information contained in our Investor Services Guide pertains to shareholders
who invest directly with American Century rather than through a bank,
broker-dealer or other financial intermediary.
If you own or are considering purchasing fund shares through a
bank, broker-dealer or other financial intermediary, your ability to purchase,
exchange and redeem shares will depend on your agreement with, and the policies
of, such financial intermediary.
You may reach one of our Institutional Service Representatives by calling
1-800-345-3533 to request information about our funds and services, to obtain a
current prospectus or to get answers to any questions about our funds that you
are unable to obtain through your plan administrator or financial intermediary.
Additional Information You Should Know
Share Price
When Share Price Is Determined
The price of your shares is also referred to as their net asset value. Net asset
value is determined by calculating the total value of the fund's assets,
deducting total liabilities and dividing the result by the number of shares
outstanding. For all American Century funds, except funds issued by American
Century Target Maturities Trust, net asset value is determined as of the close
of regular trading on the New York Stock Exchange on each day that the Exchange
is open, usually 3 p.m. Central time. The net asset values for Target Maturities
funds are determined one hour prior to the close of the Exchange.
Investments and requests to redeem or exchange shares will receive the share
price next determined after receipt by us of the investment, redemption or
exchange request. For example, investments and requests to redeem or exchange
shares received by us or one of our agents or designees before the time as of
which the net asset value of the fund is determined, are effective on, and will
receive the price determined, that day. Investment, redemption and exchange
requests received thereafter are effective on, and receive the price determined
as of the close of the Exchange on the next day the Exchange is open.
Investments are considered received only when payment is received by us. Wired
funds are considered received on the day they are deposited in our bank account
if they are deposited before the time as of which the net asset value of the
fund is determined.
Investments by telephone pursuant to your prior authorization to us to draw on
your bank account are considered received at the time of your telephone call.
Investment and transaction instructions received by us on any business day by
mail prior to the time as of which the net asset value of the fund is
determined, will receive that day's price. Investments and instructions received
after that time will receive the price determined on the next business day.
If you invest in fund shares through a bank, financial advisor or other
financial intermediary, it is the responsibility of your financial intermediary
to transmit your purchase, exchange and redemption requests to the fund's
transfer agent prior to the applicable cut-off time for receiving orders and to
make payment for any purchase transactions in accordance with the fund's
procedures or any contractual arrangements with the fund or the fund's
distributor in order for you to receive that day's price.
We have contractual relationships with certain financial intermediaries in which
such intermediaries represent that they have systems to track the time at which
investment orders are received and to segregate orders received at different
times. Based on these representations, the fund has authorized such
intermediaries and their designees to accept purchase and redemption orders on
the fund's behalf up to the applicable cut-off time. The fund will be deemed to
have received such orders upon acceptance by the duly authorized intermediary,
and such orders will be priced at the fund's net asset values next determined
after acceptance on the fund's behalf by such intermediary.
How Share Price Is Determined
The valuation of assets for determining net asset value may be summarized as
follows:
The portfolio securities of the fund, except as otherwise noted, listed or
traded on a domestic securities exchange are valued at the last sale price on
that exchange. Portfolio securities primarily traded on foreign securities
exchanges generally are valued at the preceding closing values of such
securities on the exchange where primarily traded. If no sale is reported, or if
local convention or regulation so provides, the mean of the latest bid and asked
prices is used. Depending on local convention or regulation, securities traded
over-the-counter are priced at the mean of the latest bid and asked prices, or
at the last sale price. When market quotations are not readily available,
securities and other assets are valued at fair value as determined in accordance
with procedures adopted by the Board of Directors.
Debt securities not traded on a principal securities exchange are valued through
valuations obtained from a commercial pricing service or at the most recent mean
of the bid and asked prices provided by investment dealers in accordance with
procedures established by the Board of Directors.
The value of an exchange-traded foreign security is determined in its national
currency as of the close of trading on the foreign exchange on which it is
traded or as of the close of business on the New York Stock Exchange, if that is
earlier. That value is then exchanged to dollars at the prevailing foreign
exchange rate.
Trading in securities on European and Far Eastern securities exchanges and
over-the-counter markets is normally completed at various times before the close
of business on each day that the New York Stock Exchange is open. If an event
were to occur after the value of a security was established but before the net
asset value per share was determined that was likely to materially change the
net asset value, then that security would be valued at fair value as determined
in accordance with procedures adopted by the Board of Directors.
Trading of these securities in foreign markets may not take place on every New
York Stock Exchange business day. In addition, trading may take place in various
foreign markets on Saturdays or on other days when the New York Stock Exchange
is not open and on which the fund's net asset value is not calculated.
Therefore, such calculation does not take place contemporaneously with the
determination of the prices of many of the portfolio securities used in such
calculation and the value of the fund's portfolio may be affected on days when
shares of the fund may not be purchased or redeemed.
Where to Find Information About Share Price
The net asset values of the Investor Class of the fund offered by this
Prospectus is published in leading newspapers daily. The net asset value of the
Institutional Class may be obtained by calling us.
Distributions
Distributions from net investment income are declared and paid quarterly.
Distributions from net realized securities gains, if any, generally are declared
and paid annually, usually in December, but the fund may make distributions on a
more frequent basis to comply with the distribution requirements of the Internal
Revenue Code, in all events in a manner consistent with the provisions of the
Investment Company Act.
For shareholders investing through taxable accounts, distributions will be
reinvested unless you elect to receive them in cash. Distributions of less than
$10 generally will be reinvested. Distributions made shortly after a purchase by
check or ACH may be held up to 15 days. You may elect to have distributions on
shares held in certain IRAs and 403(b) plans paid in cash only if you are at
least 59 1/2 years old or permanently and totally disabled. Distribution checks
normally are mailed within seven days after the record date. Please consult our
Investor Services Guide for further information regarding your distribution
options.
A distribution on shares of the fund does not increase the value of your shares
or your total return. At any given time the value of your shares includes the
undistributed net gains, if any, realized by the fund on the sale of portfolio
securities, and undistributed dividends and interest received, less fund
expenses.
Because such gains and dividends are included in the price of your shares, when
they are distributed the price of your shares is reduced by the amount of the
distribution. If you buy your shares through a taxable account just before the
distribution, you will pay the full price for your shares, and then receive a
portion of the purchase price back as a taxable distribution. See "Taxes," this
page.
Taxes
The fund has elected to be taxed under Subchapter M of the Internal Revenue
Code, which means that to the extent its income is distributed to shareholders,
it pays no income tax.
Tax-Deferred Accounts
If fund shares are purchased through tax-deferred accounts, such as a qualified
employer-sponsored retirement or savings plan (excluding participant-directed
employer-sponsored retirement plans, which are ineligible to invest in
Institutional Class shares), income and capital gains distributions paid by the
fund generally will not be subject to current taxation, but will accumulate in
your account under the plan on a tax-deferred basis.
Taxable Accounts
If fund shares are purchased through taxable accounts, distributions of net
investment income and net short-term capital gains are taxable to you as
ordinary income. The dividends from net income may qualify for the 70%
dividends-received deduction for corporations to the extent that the fund held
shares receiving the dividend for more than 45 days. Distributions from gains on
assets held longer than 12 months are taxable as long-term gains regardless of
the length of time you have held the shares. However, you should note that any
loss realized upon the sale or redemption of shares held for six months or less
will be treated as a long-term capital loss to the extent of any distribution of
long-term capital gain to you with respect to such shares.
Dividends and interest received by the fund on foreign securities may give rise
to withholding and other taxes imposed by foreign countries. Tax conventions
between certain countries and the United States may reduce or eliminate such
taxes. Foreign countries generally do not impose taxes on capital gains in
respect of investments by non-resident investors. The foreign taxes paid by the
fund will reduce its dividends.
Distributions are taxable to you regardless of whether they are taken in cash or
reinvested, even if the value of your shares is below your cost. If you purchase
shares shortly before a distribution, you must pay income taxes on the
distribution, even though the value of your investment (plus cash received, if
any) will not have increased. In addition, the share price at the time you
purchase shares may include unrealized gains in the securities held in the
investment portfolio of the fund. If these portfolio securities are subsequently
sold and the gains are realized, they will, to the extent not offset by capital
losses, be paid to you as a distribution of capital gains and will be taxable to
you as short-term or long-term capital gains.
In January of the year following the distribution, if you own shares in a
taxable account, you will receive a Form 1099-DIV notifying you of the status of
your distributions for federal income tax purposes.
Distributions also may be subject to state and local taxes, even if all or a
substantial part of such distributions are derived from interest on U.S.
government obligations which, if you received them directly, would be exempt
from state income tax. However, most but not all states allow this tax exemption
to pass through to fund shareholders when a fund pays distributions to its
shareholders. You should consult your tax advisor about the tax status of such
distributions in your own state.
If you have not complied with certain provisions of the Internal Revenue Code
and Regulations, we are required by federal law to withhold and remit to the IRS
31% of reportable payments (which may include dividends, capital gains
distributions and redemptions). Those regulations require you to certify that
the Social Security number or tax identification number you provide is correct
and that you are not subject to 31% withholding for previous under-reporting to
the IRS. You will be asked to make the appropriate certification on your
application. Payments reported by us that omit your Social Security number or
tax identification number will subject us to a penalty of $50, which will be
charged against your account if you fail to provide the certification by the
time the report is filed. This charge is not refundable.
Redemption of shares of the fund (including redemptions made in an exchange
transaction) will be a taxable transaction for federal income tax purposes and
shareholders generally will recognize a gain or loss in an amount equal to the
difference between the basis of the shares and the amount received. Assuming
that shareholders hold such shares as a capital asset, the gain or loss will be
a capital gain or loss and generally will be considered long-term, if
shareholders have held such shares for a period of more than 12 months. 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, resulting in a
postponement of the recognition of such loss for federal income tax purposes.
In addition to the federal income tax consequences described above relating to
an investment in the fund, there may be other federal, state or local tax
considerations that depend upon the circumstances of each particular investor.
Prospective shareholders are therefore urged to consult their tax advisors with
respect to the effect of this investment on their own specific situations.
Management
Investment Management
Under the laws of the State of Maryland, the Board of Directors is responsible
for managing the business and affairs of the fund. Acting pursuant to an
investment management agreement entered into with the fund, American Century
Investment Management, Inc. serves as the manager of the fund. Its principal
place of business is American Century Tower, 4500 Main Street, Kansas City,
Missouri 64111. The manager has been providing investment advisory services to
investment companies and institutional clients since it was founded in 1958.
Barclays Global Investors, N.A., acting pursuant to a subadvisory agreement
among it, American Century Investment Management, Inc. and the fund, makes the
day-to-day investment decisions for the fund in accordance with the fund's
investment objective, policies and restrictions under the supervision of the
manager and the Board of Directors.
The activities of the manager are subject only to directions of the fund's Board
of Directors. The manager pays all the expenses of the fund except brokerage,
taxes, interest, fees and expenses of the non-interested person directors
(including counsel fees) and extraordinary expenses.
For the services provided to the Institutional Class of the fund, the manager
receives an annual fee of 0.29% of the average net assets of the fund.
For subadvisory services, the manager pays the subadvisor an annual fee of 0.05%
of the average net assets of the fund.
On the first business day of each month, the fund pays a management fee to the
manager for the previous month at the specified rate. The fee for the previous
month is calculated by multiplying the applicable fee for the fund by the
aggregate average daily closing value of the fund's net assets during the
previous month, and further multiplying that product by a fraction, the
numerator of which is the number of days in the previous month and the
denominator of which is 365 (366 in leap years).
Code of Ethics
The fund and the manager have adopted a Code of Ethics that restricts personal
investing practices by employees of the manager and its affiliates. Among other
provisions, the Code of Ethics requires that employees with access to
information about the purchase or sale of securities in the fund's portfolios
obtain preclearance before executing personal trades. With respect to Portfolio
Managers and other investment personnel, the Code of Ethics prohibits
acquisition of securities in an initial public offering, as well as profits
derived from the purchase and sale of the same security within 60 calendar days.
These provisions are designed to ensure that the interests of fund shareholders
come before the interests of the people who manage those funds.
Transfer and Administrative Services
American Century Services Corporation, American Century Tower, 4500 Main Street,
Kansas City, Missouri 64111 acts as transfer agent and dividend-paying agent for
the fund. It provides facilities, equipment and personnel to the fund, and is
paid for such services by the manager.
Certain recordkeeping and administrative services that would otherwise be
performed by the transfer agent may be performed by an insurance company or
other entity providing similar services for various retirement plans using
shares of the fund as a funding medium, by broker-dealers and financial advisors
for their customers investing in shares of American Century or by sponsors of
multi mutual fund no- or low-transaction fee programs. The manager or an
affiliate may enter into contracts to pay them for such recordkeeping and
administrative services out of its unified management fee.
Although there is no sales charge levied by the fund, transactions in shares of
the fund may be executed by brokers or investment advisors who charge a
transaction-based fee or other fee for their services. Such charges may vary
among broker-dealers and financial advisors, but in all cases will be retained
by the broker-dealer or financial advisor and not remitted to the fund or the
manager. You should be aware of the fact that these transactions may be made
directly with American Century without incurring such fees.
From time to time, special services may be offered to shareholders who maintain
higher share balances in our family of funds. These services may include the
waiver of minimum investment requirements, expedited confirmation of shareholder
transactions, newsletters and a team of personal representatives. Any expenses
associated with these special services will be paid by the manager.
The manager and transfer agent are both wholly owned by American Century
Companies, Inc., which is controlled by James E. Stowers Jr., Chairman of the
fund's Board of Directors.
Pursuant to a Sub-Administration Agreement with the manager, Funds Distributor,
Inc. (FDI) serves as the Co-Administrator for the fund. FDI is responsible for
(i) providing certain officers of the fund and (ii) reviewing and filing
marketing and sales literature on behalf of the fund. The fees and expenses of
FDI are paid by the manager out of its unified fee.
Year 2000 Issues
Many of the world's computer systems currently cannot properly recognize or
process date-sensitive information relating to the Year 2000 and beyond. Because
this may impact the computer systems of various American Century-affiliated and
external service providers for the fund, American Century formally initiated a
Year 2000 readiness project in July 1997. It involves a team of information
technology professionals assisted by outside consultants and guided by a
senior-level steering committee. The team's goal is to assess the impact of the
Year 2000 on American Century's systems, renovate or replace noncompliant
critical systems and test those systems. In addition, the team has been working
to gather information about the Year 2000 efforts of the fund's other major
service providers. Although American Century believes its critical systems will
function properly in the Year 2000, this is not guaranteed. If the efforts of
American Century or its external service providers are not successful, the
fund's business, particularly its ability to provide shareholder services, may
be hampered.
In addition, the issuers of securities the fund owns could have Year 2000
computer problems. These problems could negatively affect the value of their
securities, which, in turn, could impact the fund's performance. The manager has
established a process to gather publicly available information about the Year
2000 readiness of these issuers. However, this process may not uncover all
relevant information, and the information gathered may not be complete and
accurate. Moreover, an issuer's Year 2000 readiness is only one of many factors
the manager may consider when making investment decisions, and other factors may
receive greater weight.
Distribution of Fund Shares
The fund's shares are distributed by FDI, a registered broker-dealer. FDI is a
wholly-owned indirect subsidiary of Boston Institutional Group, Inc. FDI's
principal business address is 60 State Street, Suite 1300, Boston, Massachusetts
02109. The Investor Class of shares does not pay any commissions or sales loads
to the distributor or to any other broker-dealers or financial intermediaries in
connection with the distribution of fund shares.
Investors may open accounts with American Century only through the distributor.
All purchase transactions in the fund offered by this Prospectus are processed
by the transfer agent, which is authorized to accept any instructions relating
to fund accounts. All purchase orders must be accepted by the distributor. All
fees and expenses of FDI in acting as distributor for the fund are paid by the
manager.
Further Information About American Century
American Century Capital Portfolios, Inc., (the "Corporation"), the issuer of
the fund, was organized as a Maryland corporation on June 14, 1993.
The corporation is an open-end management investment company whose shares were
first offered for sale September 1, 1993. Its business and affairs are managed
by its officers under the direction of its Board of Directors.
The principal office of the fund is American Century Tower, 4500 Main Street,
P.O. Box 419200, Kansas City, Missouri 64141-6200. All inquiries may be made by
mail to that address, or by telephone to 1-800-345-2021 (international calls:
816-531-5575).
American Century Capital Portfolios, Inc. currently issues five series of $0.01
par value shares. Each series is commonly referred to as a fund. The assets
belonging to each series of shares are held separately by the custodian.
American Century offers two classes of shares of the fund: an Investor Class and
an Institutional Class. The shares offered by this Prospectus are Institutional
Class shares and have no up-front charges, commissions or 12b-1 fees.
The Investor Class is primarily made available to retail investors. The other
class has different fees, expenses, and/or minimum investment requirements than
the Advisor Class. The difference in the fee structures among 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 manager 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 Investor Class of shares, call one of our
Investor Services Representatives at 1-800-345-2021.
Except as described below, all classes of shares of the fund will have identical
voting, dividend, liquidation and other rights, preferences, terms and
conditions. The only differences among the Corporation's various 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.
Each share, irrespective of series or class, is entitled to one vote for each
dollar of net asset value applicable to such share on all questions, except for
those matters that must be voted on separately by the series or class of shares
affected. Matters affecting only one series or class are voted upon only by that
series or class.
Shares have non-cumulative voting rights, which means that the holders of more
than 50% of the votes cast in an election of directors can elect all of the
directors if they choose to do so, and in such event the holders of the
remaining votes will not be able to elect any person or persons to the Board of
Directors.
Unless required by the Investment Company Act, it will not be necessary for the
fund to hold annual meetings of shareholders. As a result, shareholders may not
vote each year on the election of directors or the appointment of auditors.
However, pursuant to the fund's by-laws, the holders of shares representing at
least 10% of the votes entitled to be cast may request the fund to hold a
special meeting of shareholders. We will assist in the communication with other
shareholders.
We reserve the right to change any of our policies, practices and procedures
described in this Prospectus, including the Statement of Additional Information,
without shareholder approval except in those instances where shareholder
approval is expressly required.
P.O. Box 419385
Kansas City, Missouri
64141-6385
Institutional Services:
1-800-345-3533 OR 816-531-5575
Telecommunications Device for the Deaf:
1-800-345-1833 OR 816-444-3038
FAX: 816-340-4655
www.americancentury.com
[american century logo[reg.sm])
American
Century
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
[american century logo[reg.sm])
American
Century
DECEMBER 30, 1998
AMERICAN CENTURY
GROUP
Equity Index Fund
STATEMENT OF ADDITIONAL INFORMATION
December 30, 1998
AMERICAN CENTURY EQUITY INDEX FUND
a series of
AMERICAN CENTURY CAPITAL PORTFOLIOS, INC.
This Statement is not a prospectus but should be read in conjunction with the
current Prospectus of American Century Equity Index Fund, a series of American
Century Capital Portfolios, Inc. dated December 30, 1998. Please retain this
document for future reference. To obtain a prospectus, call American Century at
1-800-345-2021 (international calls: 816-531-5575), or write to P.O. Box 419200,
Kansas City, Missouri 64141-6200, or access our Web site
(www.americancentury.com).
TABLE OF CONTENTS
Investment Objective of The Fund
Investment Restrictions
Foreign Securities
Futures Contracts
Cash Management
An Explanation of Fixed Income Securities Ratings
Portfolio Lending
Portfolio Turnover
Officers and Directors
Management
Custodians
Independent Auditors
Capital Stock
Multiple Class Structure
Brokerage
Performance Advertising
Redemptions In Kind
Holidays
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
Investment Objectives of The Fund
The investment objective of the fund is described on page 2 of its prospectus.
In seeking to achieve its objective, the fund must conform to certain policies,
some of which are designated in the Prospectus or in this Statement of
Additional Information as "fundamental" and cannot be changed without
shareholder approval.
Investment Restrictions
Additional fundamental policies that may be changed only with shareholder
approval provide as follows:
(1) The fund shall not issue senior securities, except as permitted under the
Investment Company Act of 1940.
(2) The fund shall not borrow money, except that the fund may borrow money for
temporary or emergency purposes (not for leveraging or investment) in an
amount not exceeding 33 1/3% of the fund's total assets (including the
amount borrowed) less liabilities (other than borrowings).
(3) The fund shall not lend any security or make any other loan if, as a
result, more than 33 1/3% of the fund's total assets would be lent to other
parties, except, (i) through the purchase of debt securities in accordance
with its investment objective, policies and limitations, or (ii) by
engaging in repurchase agreements with respect to portfolio securities.
(4) The fund shall not purchase or sell real estate unless acquired as a result
of ownership of securities or other instruments. This policy shall not
prevent the fund from investment in securities or other instruments backed
by real estate or securities of companies that deal in real estate or are
engaged in the real estate business.
(5) The fund shall not act as an underwriter of securities issued by others,
except to the extent that the fund may be considered an underwriter within
the meaning of the Securities Act of 1933 in the disposition of restricted
securities.
(6) The fund shall not purchase or sell physical commodities unless acquired as
a result of ownership of securities or other instruments; provided that
this limitation shall not prohibit the fund from purchasing or selling
options and futures contracts or from investing in securities or other
instruments backed by physical commodities.
(7) The fund shall not invest for purposes of exercising control over
management.
(8) The fund shall not concentrate its investments in securities of issuers in
a particular industry (other than securities issued or guaranteed by the
U.S. government or any of its agencies or instrumentalities), except to the
extent that the S&P 500 index is also concentrated in securities of issuers
in a particular industry.
In addition, the fund has adopted the following non-fundamental investment
restrictions:
(1) As an operating policy, the fund shall not purchase additional investment
securities at any time during which outstanding borrowings exceed 5% of the
total assets of the fund.
(2) As an operating policy, the fund may not purchase any security or enter
into a repurchase agreement if, as a result, more than 15% of its net
assets (10% for money market funds) would be invested in repurchase
agreements not entitling the holder to payment of principal and interest
within seven days and in securities that are illiquid by virtue of legal or
contractual restrictions on resale or the absence of a readily available
market.
(3) As an operating policy, the fund shall not sell securities short, unless it
owns or has the right to obtain securities equivalent in kind and amount to
the securities sold short, and provided that transaction in futures
contracts and options are not deemed to constitute selling securities
short.
(4) As an operating policy, the fund shall not purchase securities on margin,
except that the fund may obtain such short-term credits as are necessary
for the clearance of transactions, and provided that margin payments in
connection with futures contracts and options on futures contracts shall
not constitute purchasing securities on margin.
The Investment Company Act imposes certain additional restrictions upon
acquisition by the fund of securities issued by insurance companies, brokers,
dealers, underwriters or investment advisors, and upon transactions with
affiliated persons as therein defined. It also defines and forbids the creation
of cross and circular ownership. Neither the Securities and Exchange Commission
nor any other agency of the federal government or state agency participates in
or supervises the management of the fund or its investment practices or
policies.
Foreign Securities
The fund may invest a small percentage of its assets in the securities of
foreign issuers. The manager defines "foreign issuer" as an issuer of securities
that is domiciled outside the United States, derives at least 50% of its total
revenue from production or sales outside of the United States, and/or whose
principal trading market is outside the United States. The principal business
activities of such issuers will be located in developed countries.
The fund may make such investments either directly in foreign securities or
indirectly by purchasing depositary receipts for foreign securities. Depositary
receipts or depositary shares or similar instruments (collectively "depositary
receipts") are securities that are listed on exchanges or quoted in the domestic
over-the-counter markets in one country but represent shares of issuers
domiciled in another country. Direct investments in foreign securities may be
made either on foreign securities exchanges or in the over-the-counter markets.
Subject to its investment objective and policies, the fund may invest in common
stocks, convertible securities, preferred stocks, bonds, notes and other debt
securities of foreign issuers, and debt securities of foreign governments and
their agencies. The fund will limit its purchase of debt securities to
investment-grade obligations.
Investments in foreign securities may present certain risks, including those
resulting from fluctuations in currency exchange rates, future political and
economic developments, clearance and settlement risk, reduced availability of
public information concerning issuers, and the lack of uniform accounting,
auditing, financial reporting standards and practices and requirements
comparable to those applicable to domestic issuers.
Futures Contracts
As described in the Prospectus, the fund may enter into futures contracts.
Unlike when the fund purchases securities, no purchase price for the underlying
securities is paid by the fund at the time it purchases a futures contract. When
a futures contract is entered into, both the buyer and seller of the contract
are required to deposit with a futures commission merchant ("FCM") cash or
high-grade debt securities in an amount equal to a percentage of the contract's
value, as set by the exchange on which the contract is traded. This amount is
known as "initial margin" and is held by the fund's custodian for the benefit of
the FCM in the event of any default by the fund in the payment of any future
obligations.
The value of the futures contract is adjusted daily to reflect the fluctuation
of the value of the underlying securities that comprise the index. This is a
process known as marking the contract to market. If the value of a party's
position declines, that party is required to make additional "variation margin"
payments to the FCM to settle the change in value. The party that has a gain may
be entitled to receive all or a portion of this amount. The FCM may have access
to the fund's margin account only under specified conditions of default.
The fund maintains from time to time a percentage of its assets in cash or
high-grade liquid securities to provide for redemptions or to hold for future
investment in securities consistent with the fund's investment objectives. The
fund may enter into index futures contracts as an efficient means to expose the
fund's cash position to the domestic equity market. The manager believes that
the purchase of futures contracts is an efficient means to effectively be fully
invested in equity securities.
The fund intends to comply with guidelines of eligibility for exclusion from the
definition of the term "commodity pool operator" adopted by the Commodity
Futures Trading Commission and the National Futures Association, which regulate
trading in the futures markets. To do so, the aggregate initial margin required
to establish such positions may not exceed 5% of the fair market value of the
fund's net assets, after taking into account unrealized profits and unrealized
losses on any contracts it has entered into.
The principal risks generally associated with the use of futures include but are
not limited to:
* the possible absence of a liquid secondary market for any particular
instrument will make it difficult or impossible to close out a position
when desired (liquidity risk);
* the risk that the counter party to the contract will fail to perform its
obligations or the risk of bankruptcy of the FCM holding margin deposits
(counter party risk);
* the risk that the index of securities to which the futures contract relates
will go down in value (market risk); and
* adverse price movements in the underlying index can result in losses
substantially greater than the value of the fund's investment in that
instrument because only a fraction of a contract's value is required to be
deposited as initial margin (leverage risk); provided, however, that the
fund may not purchase leveraged futures, so there is no leverage risk
involved in the fund's use of futures.
A liquid secondary market is necessary to close out a contract. The fund may
seek to manage liquidity risk by investing only in exchange-traded futures.
Exchange-traded index futures pose less risk that there will not be a liquid
secondary market than privately negotiated instruments. Through their clearing
corporations, the futures exchanges guarantee the performance of the contracts.
Futures contracts are generally settled within a day from the date they are
closed out, as compared to three days for most types of equity securities. As a
result, futures contracts can provide more liquidity than an investment in the
actual underlying securities. Nevertheless, there is no assurance that a liquid
secondary market will exist for any particular futures contract at any
particular time. Liquidity may also be influenced by an exchange-imposed daily
price fluctuation limit, which halts trading if a contract's price moves up or
down more than the established limit on any given day. On volatile trading days
when the price fluctuation limit is reached, it may be impossible for the fund
to enter into new positions or close out existing positions. If the secondary
market for a futures contract is not liquid because of price fluctuation limits
or otherwise, the fund may not be able to promptly liquidate unfavorable futures
positions and potentially could be required to continue to hold a futures
position until liquidity in the market is re-established. As a result, such
fund's access to other assets held to cover its futures positions also could be
impaired until liquidity in the market is re-established.
The fund manages counter-party risk by investing in exchange-traded index
futures. In the event of the bankruptcy of the FCM that holds margin on behalf
of the fund, that fund may be entitled to the return of margin owed to such fund
only in proportion to the amount received by the FCM's other customers. The
manager will attempt to minimize the risk by monitoring the creditworthiness of
the FCMs with which the fund does business.
The prices of futures contracts depend primarily on the value of their
underlying instruments. As a result, the movement in market price of index
futures contracts will reflect the movement in the aggregate market price of the
entire portfolio of securities comprising the index. The fund's investment in
futures contracts may not correlate precisely with the performance of the fund's
other equity investments. However, the manager believes that an investment in
index futures will more closely reflect the investment performance of the fund
than an investment in U.S. government or other highly liquid, short-term debt
securities, which is where the cash position of the fund would otherwise be
invested.
The policy of the fund is to invest in equity securities. There may be times
when the manager deems it advantageous to the fund not to invest excess cash in
index futures, but such decision will generally not be the result of an active
effort to use futures to time or anticipate market movements in general.
Cash Management
Corporate Obligations
Commercial paper is issued by large corporations to raise cash. The maximum
maturity for commercial paper is 270 days, although most commercial paper is
issued with maturities of 60 days or less. Commercial paper is offered at a
discount with its full face value paid at maturity.
Although commercial paper rates generally fluctuate with the value of the London
Interbank Offered Rate (LIBOR), Treasury bills, bankers' acceptances, and
certificates of deposit, they are also influenced by (1) the issuer's size and
credit rating and (2) the commercial paper maturity date.
Smaller or lower-rated corporations may tap the commercial paper market through
asset-backed commercial paper programs. In a typical program, a special purpose
corporation (a SPC), created and/or serviced by a bank, uses the proceeds from
an issuance of commercial paper to purchase receivables from one or more
corporations (sellers). The sellers transfer their interest in the cash flow
from the receivables to the SPC, and this cash is used to pay interest and repay
principal on the commercial paper. Letters of credit may be available to cover
the risk that the cash flow from the receivables will not be sufficient to cover
the maturing commercial paper.
Bank Obligations
Negotiable certificates of deposit (CDs) evidence a bank's obligation to repay
money deposited with it for a specified period of time.
Bankers' acceptances are used to finance foreign commercial trade. Issued by a
bank with an importer's name on them, these instruments allow the importer to
back up its own pledge to pay for imported goods with a bank's obligation to
cover the transaction if the importer fails to do so.
Bank notes are senior unsecured promissory notes issued in the United States by
domestic commercial banks.
The bank obligations the fund may buy generally are not insured by the FDIC or
any other insurer.
Government Obligations
U.S. Treasury securities differ from one another in their interest rates,
maturities, and issuance and interest payment schedules. Treasury bills have
initial maturities of one year or less; Treasury notes, two to ten years; and
Treasury bonds, more than ten years.
A number of U.S. government agencies and government-sponsored organizations
issue debt securities. These agencies generally are created by Congress to
fulfill a specific need, such as providing credit for home buyers or farmers.
Among these agencies are the Federal Home Loan Banks, the Federal Farm Credit
System, the Student Loan Marketing Association, and the Resolution Funding
Corporation.
Some obligations issued or guaranteed by U.S. government agencies or
instrumentalities are supported by the full faith and credit of the U.S.
government; others are supported by the right of the issuer to borrow from the
Treasury; others are supported by the U.S. government's discretionary authority
to purchase certain obligations of the agency or instrumentality, and others are
supported only by the credit of the issuing agency or instrumentality.
Supranational organizations (generally, multilateral lending institutions, or
MLIs) are created by governments to promote economic reconstruction and
development. An MLI's creditworthiness is based not only on its own financial
performance, but on the willingness and ability of member governments to support
its lending activities.
While maintaining strict financial controls to ensure liquidity and strong
creditworthiness, MLIs finance their operations in the same manner as any other
financial institution, with a combination of short- and long-term debt
obligations. Short-term debt is usually issued in the form of short-term
discount notes and commercial paper.
An Explanation of Fixed Income Securities Ratings
As described in the Prospectus, the fund may invest in fixed income securities.
The fund may invest only in investment-grade obligations. Fixed income
securities ratings provide the manager with a current assessment of the credit
rating of an issuer with respect to a specific fixed income security.
The following summarizes the ratings used by Standard & Poor's Corporation for
bonds:
AAA - This is the highest rating assigned by S&P to a debt obligation and
indicates an extremely strong capacity to pay interest and repay principal.
AA - Debt rated AA is considered to have a very strong capacity to pay interest
and repay principal and differs from AAA issues only to a small degree.
A - Debt rated A has a strong capacity to pay interest and repay principal,
although it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher-rated categories.
BBB - Debt rated BBB is regarded as having an adequate capacity to pay interest
and repay principal. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category than in higher-rated categories.
BB - Debt rated BB has less near-term vulnerability to default than other
speculative issues. However, it faces major ongoing uncertainties or exposure to
adverse business, financial or economic conditions, which could lead to
inadequate capacity to meet timely interest and principal payments. The BB
rating category is also used for debt subordinated to senior debt that is
assigned an actual or implied BBB- rating.
B - Debt rated B has a greater vulnerability to default but currently has the
capacity to meet interest payments and principal repayments. Adverse business,
financial or economic conditions will likely impair capacity or willingness to
pay interest and repay principal. The B rating category is also used for debt
subordinated to senior debt that is assigned an actual or implied BB or BB-
rating.
CCC - Debt rated CCC has a currently identifiable vulnerability to default and
is dependent upon favorable business, financial and economic conditions to meet
timely payment of interest and repayment of principal. In the event of adverse
business, financial or economic conditions, it is not likely to have the
capacity to pay interest and repay principal. The CCC rating category is also
used for debt subordinated to senior debt that is assigned an actual or implied
B or B- rating.
CC - The rating CC typically is applied to debt subordinated to senior debt that
is assigned an actual or implied CCC rating.
C - The rating C typically is applied to debt subordinated to senior debt that
is assigned an actual or implied CCC- debt rating. The C rating may be used to
cover a situation where a bankruptcy petition has been filed, but debt service
payments are continued.
CI - The rating CI is reserved for income bonds on which no interest is being
paid.
D - Debt rated D is in payment default. The D rating category is used when
interest payments or principal payments are not made on the date due even if the
applicable grace period has not expired, unless S&P believes that such payments
will be made during such grace period. The D rating also will be used upon the
filing of a bankruptcy petition if debt service payments are jeopardized.
To provide more detailed indications of credit quality, the ratings from AA to
CCC may be modified by the addition of a plus or minus sign to show relative
standing within these major rating categories.
The following summarizes the ratings used by Moody's Investors Service, Inc. for
bonds:
Aaa - Bonds that are rated Aaa are judged to be of the best quality. They carry
the smallest degree of investment risk and are generally referred to as "gilt
edge." Interest payments are protected by a large or exceptionally stable margin
and principal is secure. While the various protective elements are likely to
change, such changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.
Aa - Bonds that are rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as high-grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large as in Aaa securities, or fluctuation of protective elements
may be of greater amplitude, or there may be other elements present that make
the long-term risk appear somewhat larger than the Aaa securities.
A - Bonds that are rated A possess many favorable investment attributes and are
to be considered as upper-medium-grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present that
suggest a susceptibility to impairment some time in the future.
Baa - Bonds that are rated Baa are considered as medium-grade obligations (i.e.,
they are neither highly protected nor poorly secured). Interest payments and
principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and, in
fact, have speculative characteristics as well.
Ba - Bonds that are rated Ba are judged to have speculative elements; their
future cannot be considered as well assured. Often the protection of interest
and principal payments may be very moderate and thereby not well safeguarded
during both good and bad times in the future. Uncertainty of position
characterizes bonds in this class.
B - Bonds that are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
Caa - Bonds that are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.
Ca - Bonds that are rated Ca represent obligations that are speculative in a
high degree. Such issues are often in default or have other marked shortcomings.
C - Bonds that are rated C are the lowest-rated class of bonds, and issues so
rated can be regarded as having extremely poor prospects of ever attaining any
real investment standing.
Moody's applies numerical modifiers 1, 2 and 3 in each generic rating category
from Aa through B. The modifier 1 indicates that the bond being rated ranks in
the higher end of its generic rating category; the modifier 2 indicates a
mid-range ranking; and the modifier 3 indicates a ranking in the lower end of
that generic rating category.
Portfolio Lending
In order to realize additional income, the fund may lend its portfolio
securities. Such loans may not exceed one-third of the fund's net assets valued
at market except (i) through the purchase of debt securities in accordance with
its investment objective, policies and limitations, or (ii) by engaging in
repurchase agreements with respect to portfolio securities.
Portfolio Turnover
The fund will not generally trade in securities for short-term profits, but,
when circumstances warrant, securities may be purchased and sold without regard
to the length of time the security has been held. Accordingly, the fund's rate
of portfolio turnover at times may be substantial.
The fund intends to purchase a given security whenever the manager believes it
will contribute to the stated objective of the fund, even if the same security
has only recently been sold. In selling a given security, the manager keeps in
mind that profits from sales of securities are taxed to shareholders. Subject to
this consideration, the fund will sell a given security regardless of how long
it has been held in the portfolio and whether the sale is at a gain or at a
loss, if the manager believes that the security is not fulfilling its purpose.
The manager may reach this conclusion because, among other things, it did not
live up to the manager's expectations, or because it may be replaced with
another security holding greater promise, or because it has reached its optimum
potential, or because of a change in the circumstances of a particular company
or industry or in general economic conditions, or because of some combination of
such reasons.
When a general decline in security prices is anticipated, the fund may decrease
or eliminate entirely its equity position and increase its cash position, and
when a rise in price levels is anticipated, the fund may increase its equity
position and decrease its cash position. However, the fund will, under most
circumstances, be essentially fully invested in equity securities and equity
equivalents.
Since investment decisions are based on the anticipated contribution of the
security in question to the fund's objectives, the manager believes that the
rate of portfolio turnover is irrelevant when it believes a change is in order
to achieve those objectives. As a result, the fund's annual portfolio turnover
rate cannot be anticipated and may be comparatively high. This disclosure
regarding portfolio turnover is a statement of fundamental policy and may be
changed only by a vote of the shareholders.
Since the manager does not take portfolio turnover rate into account in making
investment decisions, (1) the manager has no intention of accomplishing any
particular rate of portfolio turnover, whether high or low, and (2) the
portfolio turnover rates in the past should not be considered as a
representation of the rates that will be attained in the future.
Officers and Directors
The principal officers and directors ofAmerican Century Capital Portfolios, Inc.
(the "Corporation"), their ages (listed in parentheses), their principal
business experience during the past five years, and their affiliations with the
fund's manager, American Century Investment Management, Inc. and its transfer
agent, American Century Services Corporation, are listed below. The address at
which each director and officer below may be contacted is American Century
Tower, 4500 Main Street, Kansas City, Missouri 64111. All persons named as
officers of the Corporation also serve in similar capacities for other funds
advised by the manager. Those directors that are "interested persons" as defined
in the Investment Company Act of 1940 are indicated by an asterisk(*).
James E. Stowers Jr.* (74), Chairman of the Board and Director; Chairman of the
Board, Director and controlling shareholder of American Century Companies, Inc.,
parent corporation of American Century Investment Management, Inc. and American
Century Services Corporation; Chairman of the Board and Director of American
Century Investment Management, Inc. and American Century Services Corporation;
father of James E. Stowers III.
James E. Stowers III* (39), Director; Chief Executive Officer and Director,
American Century Companies, Inc., American Century Investment Management, Inc.
and American Century Services Corporation.
Thomas A. Brown (58), Director; Director of Plains States Development, Applied
Industrial Technologies, Inc., a corporation engaged in the sale of bearings and
power transmission products.
Robert W. Doering, M.D. (66), Director; retired, formerly general surgeon.
Andrea C. Hall, Ph.D. (53), Director; Senior Vice President and Associate
Director, Midwest Research Institute.
D.D. (Del) Hock (63), Director; retired, formerly Chairman, Public Service
Company of Colorado; Director, Service Tech, Inc., Hathaway Corporation, and J.
D. Edwards & Company.
Donald H. Pratt (60), Vice Chairman of the Board and Director; President and
Director, Butler Manufacturing Company.
Lloyd T. Silver Jr. (70), Director; Consultant, and retired Chairman of LSC,
Inc.
M. Jeannine Strandjord (52), Director; Senior Vice President and Treasurer,
Sprint Corporation; Director, DST Systems, Inc.
George A. Rio (43), President; Executive Vice President and Director of Client
Services, Funds Distributor, Inc. (FDI). Prior to joining FDI, Mr. Ingram served
as Senior Vice President and Senior Key Account Manager for Putnam Mutual Funds
(from June 1995 to March 1998). Before that he served as Director Business
Development for First Data Corporation (May 1994 to June 1995) and Senior Vice
President and Manager of Client Services and Director of Internal Audit at The
Boston Company, Inc. (September 1983 to May 1994).
Maryanne Roepke, CPA (42), Vice President, Treasurer, and Principal Accounting
Officer; Senior Vice President, American Century Services Corporation.
Patrick A. Looby (39), Vice President; Vice President, American Century Services
Corporation.
Christopher J. Kelley (33), Vice President; Vice President and Associate General
Counsel of FDI. Prior to joining FDI, Mr. Kelley served as Assistant Counsel at
Forum Financial Group (from April 1994 to July 1996) and before that as a
compliance officer for Putnam Investments (from 1992 to 1994).
Mary A. Nelson (34), Vice President; Vice President and Manager of Treasury
Services and Administration of FDI. Prior to joining FDI, Ms. Nelson was
Assistant Vice President and Client Manager for The Boston Company, Inc. (from
1989 to 1994).
Merele A. May (35), Controller; Vice President, American Century Services
Corporation.
John Zindel, CPA (31), Tax Officer; Vice President and Director of Taxation,
American Century Services Corporation (1996); Tax Manager, Price Waterhouse LLP
(from 1989 to 1996).
The Board of Directors has established four standing committees, the Executive
Committee, the Audit Committee, the Compliance Committee and the Nominating
Committee.
Messrs. Stowers Jr. (chair), Stowers III, and Pratt constitute the Executive
Committee of the Board of Directors. The committee performs the functions of the
Board of Directors between meetings of the Board, subject to the limitations on
its power set out in the Maryland General Corporation Law, and except for
matters required by the Investment Company Act to be acted upon by the full
Board.
Ms. Strandjord (chair), Dr. Doering and Mr. Hock constitute the Audit Committee.
The functions of the Audit Committee include recommending the engagement of the
fund's independent accountants, reviewing the arrangements for and scope of the
annual audit, reviewing comments made by the independent accountants with
respect to the internal controls and the considerations given or the connective
action taken by management, and reviewing nonaudit services provided by the
independent accountants.
Messrs. Brown (chair), Pratt, Silver and Dr. Hall constitute the Compliance
Committee. The functions of the Compliance Committee include reviewing the
results of the fund's compliance testing program, reviewing quarterly reports
from the manager to the Board regarding various compliance matters and
monitoring the implementation of the fund's Code of Ethics, including violations
thereof.
The Nominating Committee has as its principal role consideration and
recommendation of individuals for nomination as directors. The names of
potential director candidates are drawn from a number of sources, including
recommendations from members of the Board, management and shareholders. This
committee also reviews and makes recommendations to the Board with respect to
the composition of Board committees and other Board-related matters, including
its organization, size, composition, responsibilities, functions and
compensation. The members of the nominating committee are Messrs. Pratt (chair),
Hock and Stowers III.
The Directors of the corporation also serve as Directors for other funds advised
by the manager. Each Director who is not an "interested person" as defined in
the Investment Company Act receives for service as a member of the Board of six
of such companies an annual director's fee of $48,000, a fee of $1,000 per
regular Board meeting attended, $500 per special Board meeting and committee
meeting attended, and $250 per telephone meeting. In addition, those Directors
who are not "interested persons" who serve as chair of a committee of the Board
of Directors receive an additional $2,000 for such services. These fees and
expenses are divided among the six investment companies based upon their
relative net assets. Under the terms of the management agreement with the
manager, the fund is responsible for paying such fees and expenses.
Set forth below is the aggregate compensation paid for the periods indicated by
the Corporation and by the American Century family of funds as a whole to each
Director who is not an "interested person" as defined in the Investment Company
Act.
Aggregate Total Compensation from
Compensation the American Century
Director from the corporation1 Family of Funds2
Thomas A. Brown $3,144 $60,000
Robert W. Doering, M.D. 3,022 49,500
Andrea C. Hall, Ph.D.3 1,302 8,833
D.D. (Del) Hock 3,021 49,500
Linsley L. Lungaard 1,791 42,333
Donald H. Pratt 3,144 60,000
Lloyd T. Silver Jr. 3,021 49,000
M. Jeannine Strandjord 3,072 43,833
1 Includes compensation actually paid by the corporation during the fiscal
year ended March 31, 1998.
2 Includes compensation paid by the thirteen investment company members of
the American Century family of funds for the calendar year ended December
31, 1997
3 Dr. Hall replaced Mr. Lundgaard as a director effective November 1, 1997.
Those Directors who are "interested persons," as defined in the Investment
Company Act, receive no fee as such for serving as a Director. The salaries of
such individuals, who also are officers of the fund, are paid by the manager.
Management
A description of the responsibilities and method of compensation of the fund's
manager, American Century Investment Management, Inc., appears in each
Prospectus under the caption "Management."
The management agreement shall continue in effect until the earlier of the
expiration of two years from the date of its execution or until the first
meeting of shareholders following such execution and for as long thereafter as
its continuance is specifically approved at least annually by (i) the fund's
Board of Directors or by the vote of a majority of outstanding votes (as defined
in the Investment Company Act) and (ii) by the vote of a majority of the
Directors who are not parties to the agreement or interested persons of the
manager, cast in person at a meeting called for the purpose of voting on such
approval.
The management agreement provides that it may be terminated at any time without
payment of any penalty by the fund's Board of Directors, or by a vote of the
fund's shareholders, on 60 days' written notice to the manager and that it shall
be automatically terminated if it is assigned.
The management agreement provides that the manager shall not be liable to the
fund or its shareholders for anything other than willful misfeasance, bad faith,
gross negligence or reckless disregard of its obligations and duties.
The management agreement also provides that the manager and its officers,
directors and employees may engage in other business, devote time and attention
to any other business whether of a similar or dissimilar nature, and render
services to others.
The management agreement between the fund and the manager contemplates the
retention of a subadvisor by the manager.
Certain investments may be appropriate for the fund and also for other clients
advised by the manager. Investment decisions for the fund and other clients are
made with a view to achieving their respective investment objectives after
consideration of such factors as their current holdings, availability of cash
for investment, and the size of their investment generally. A particular
security may be bought or sold for only one client, or in different amounts and
at different times for more than one but less than all clients. In addition,
purchases or sales of the same security may be made for two or more clients on
the same date. Such transactions will be allocated among clients in a manner
believed by the manager to be equitable to each. In some cases this procedure
could have an adverse effect on the price or amount of the securities purchased
or sold by the fund.
The manager may aggregate purchase and sale orders of the fund with purchase and
sale orders of its other clients when the manager believes that such aggregation
provides the best execution for the fund. The fund's Board of Directors has
approved the policy of the manager with respect to the aggregation of portfolio
transactions. Where portfolio transactions have been aggregated, the fund
participates at the average share price for all transactions in that security on
a given day and share transaction costs on a pro rata basis. The manager will
not aggregate portfolio transactions of the fund unless it believes such
aggregation is consistent with its duty to seek best execution on behalf of the
fund and the terms of the management agreement. The manager receives no
additional compensation or remuneration as a result of such aggregation.
In addition to managing the fund the manager is also acting as an investment
adviser to eleven institutional accounts and to twelve registered investment
companies: American Century Mutual Funds, Inc., American Century Premium
Reserves, Inc., American Century World Mutual Funds, Inc., American Century
Strategic Asset Allocations, Inc., American Century Variable Portfolios, Inc.,
American Century Municipal Trust, American Century Quantitative Equity Funds,
American Century International Bond Funds, American Century Investment Trust,
American Century Government Income Trust, American Century Target Maturities
Trust, and American Century California Tax-Free and Municipal Funds.
American Century Services Corporation provides physical facilities, including
computer hardware and software and personnel, for the day-to-day administration
of the fund and the manager pays American Century Services Corporation for such
services.
As stated in each Prospectus, all of the stock of American Century Investment
Management, Inc. and American Century Services Corporation is owned by American
Century Companies, Inc.
Custodians
Chase Manhattan Bank, 770 Broadway, 10th Floor, New York, New York 10003-9598,
and Commerce Bank, N.A., 1000 Walnut, Kansas City, Missouri 64105, each serves
as custodian of the assets of the fund. The custodians take no part in
determining the investment policies of the fund or in deciding which securities
are purchased or sold by the fund. The fund, however, may invest in certain
obligations of the custodians and may purchase or sell certain securities from
or to the custodians.
Independent Auditors
Deloitte & Touche LLP, 1010 Grand Avenue, Suite 400, Kansas City, Missouri 64106
are the independent auditors of the fund. As the independent auditors of the
fund, Deloitte & Touche LLP will provide services including (1) audit of the
annual financial statements, (2) assistance and consultation in connection with
SEC filings and (3) review of the annual federal income tax return filed for
each fund by American Century.
Capital Stock
The Corporation's capital stock is described in the Prospectus under the heading
"Further Information About American Century."
The Corporation currently has five series of shares outstanding. The fund
currently issues two classes of shares, the Investor Class and Institutional
Class. The other four funds are further divided into three or more classes. See
"Multiple Class Structure," this page. The Corporation may in the future issue
one or more additional series or classes of shares without a vote of the
shareholders. The assets belonging to each series or class of shares are held
separately by the custodian and the shares of each series or class represent a
beneficial interest in the principal, earnings and profits (or losses) of
investment and other assets held for that series or class. Your rights as a
shareholder are the same for all series or classes of securities unless
otherwise stated. Within their respective series or class, all shares will have
equal redemption rights. Each share, when issued, is fully paid and
non-assessable. Each share, irrespective of series or class, is entitled to one
vote for each dollar of net asset value represented by such share on all
questions.
In the event of complete liquidation or dissolution of the fund, shareholders of
each series or class of shares will be entitled to receive, pro rata, all of the
assets less the liabilities of that series or class.
Multiple Class Structure
The fund's Board of Directors has adopted a multiple class plan (the "Multiclass
Plan") pursuant to Rule 18f-3 adopted by the SEC. Pursuant to such plan, the
fund may issue up to four classes of shares: an Investor Class, an Institutional
Class, a Service Class and an Advisor Class. Currently, the fund issues only an
Investor Class of shares.
The Investor Class is made available to investors directly, without any load or
commission, for a single management fee. The Institutional, Service and Advisor
Classes are made available to institutional shareholders or through financial
intermediaries that do not require the same level of shareholder and
administrative services from the manager as Investor Class shareholders. As a
result, the manager is able to charge these classes a lower management fee. In
addition to the management fee, however, Service Class shares are subject to a
Shareholder Services Plan, and the Advisor Class shares are subject to a Master
Distribution and Shareholder Services Plan. Both plans have been adopted by the
fund's Board of Directors and initial shareholder in accordance with Rule 12b-1
adopted by the SEC under the Investment Company Act.
Taxes
Taxation of Debt Instruments
For Federal income tax purposes, debt securities purchased by the fund may be
treated as having original issue discount. Original issue discount can generally
be defined as the excess of the stated redemption price at maturity of a debt
obligation over the issue price. Original issue discount is treated as interest
earned by the fund for Federal income tax purposes, whether or not any income is
actually received, and therefore is subject to the distribution requirements of
the Code. However, original issue discount with respect to tax-exempt
obligations generally will be excluded from the fund's taxable income. Original
issue discount with respect to tax-exempt securities is accrued and added to the
adjusted tax basis of such securities for purposes of determining gain or loss
upon sale or at maturity. Generally, the amount of original issue discount for
any period is determined on the basis of a constant yield to maturity which
takes into account the compounding of accrued interest. Under section 1286 of
the Code, an investment in a stripped bond or stripped coupon will result in
original issue discount.
The fund may purchase debt securities at a discount which exceeds the original
issue price plus previously accrued original issue discount remaining on the
securities, at the time of purchase. This additional discount represents market
discount for income tax purposes. Generally, market discount is accrued on a
daily basis.
The fund may purchase debt securities at a premium, i.e., at a purchase price in
excess of face amount. With respect to tax-exempt securities, the premium must
be amortized to the maturity date but no deduction is allowed for the premium
amortization. Instead, the amortized bond premium will reduce the fund's
adjusted tax basis in the securities. For taxable securities, the premium may be
amortized if the fund so elects. The amortized premium on taxable securities is
allowed as a deduction, and, generally for securities issued after September 27,
1985, must be amortized under an economic accrual method.
Foreign Holders
A foreign holder is a person or entity that, for U.S. Federal income tax
purposes, is a nonresident alien individual, a foreign corporation, a foreign
partnership, or a non-resident fiduciary of a foreign estate or trust. If a
distribution of the fund's taxable income (without regard to its net capital
gain) to a foreign holder is not effectively connected with a U.S. trade of
business carried on by the investor, such distribution will be subject to
withholding tax at a 30% rate or such lower rate as may be specified by an
applicable income tax treaty. In addition, distributions from the fund will
generally be subject to information reporting.
The tax consequences to a foreign holder entitled to claim the benefits of an
applicable tax treaty may be different from those described herein. Foreign
holders should consult their own tax advisers to determine whether investment in
the fund is appropriate.
Brokerage
Under the management agreement between the fund and the manager, the manager has
the responsibility of selecting brokers to execute portfolio transactions. The
fund's policy is to secure the most favorable prices and execution of orders on
its portfolio transactions. So long as that policy is met, the manager may take
into consideration the factors discussed below when selecting brokers. The
manager has delegated responsibility for selecting brokers to execute portfolio
transactions to the subadvisor under the terms of the Investment Subadvisory
Agreement.
The manager or the subadvisor, as the case may be, receives statistical and
other information and services without cost from brokers and dealers. The
manager or the subadvisor evaluates such information and services, together with
all other information that it may have, in supervising and managing the
investments of the fund. Because such information and services may vary in
amount, quality and reliability, their influence in selecting brokers varies
from none to very substantial. The manager and the subadvisor propose to
continue to place some of the fund's brokerage business with one or more brokers
who provide information and services. Such information and services provided to
the manager and the subadvisor will be in addition to and not in lieu of the
services required to be performed for the fund by the manager and subadvisor.
Neither the manager nor the subadvisor utilizes brokers who provide such
information and services for the purpose of reducing the expense of providing
required services to the fund.
The brokerage commissions paid by the fund may exceed those that another broker
might have charged for effecting the same transactions because of the value of
the brokerage and/or research services provided by the broker. Research services
furnished by brokers through whom the fund effects securities transactions may
be used by the manager in servicing all of its accounts, and not all such
services may be used by the manager in managing the portfolios of the fund.
The staff of the SEC has expressed the view that the best price and execution of
over-the-counter transactions in portfolio securities may be secured by dealing
directly with principal market makers, thereby avoiding the payment of
compensation to another broker. In certain situations, the officers of the fund,
the manager and the subadvisor believe that the facilities, expert personnel and
technological systems of a broker enable the fund to secure as good a net price
by dealing with a broker instead of a principal market maker, even after payment
of the compensation to the broker. The fund normally places its over-the-counter
transactions with principal market makers but also may deal on a brokerage basis
when utilizing electronic trading networks or as circumstances warrant.
On occasions when the manager deems the purchase or sale of a security to be in
the best interests of the fund as well as other fiduciary accounts, the manager
or the subadvisor may aggregate the security to be sold or purchased for the
fund with those to be sold or purchased for other accounts in order to obtain
the best net price and most favorable execution. In such event, the allocation
will be made by the manager or the subadvisor in the manner considered to be
most equitable and consistent with its fiduciary obligations to all such
fiduciary accounts, including the fund.
Performance Advertising
Fund Performance
Individual fund performance may be compared to various indices, including the
Standard & Poor's 500 Index. Fund performance also may be compared to the
rankings prepared by Lipper Analytical Services, Inc.
Average annual total return is calculated by determining each fund's cumulative
total return for the stated period and then computing the annual compound return
that would produce the cumulative total return if the fund's performance had
been constant over that period. Cumulative total return includes all elements of
return, including reinvestment of dividends and capital gains distributions.
Annualization of the fund's return assumes that the partial year performance
will be constant throughout the period. Actual return through the period may be
greater or less than the annualized data.
The fund also may elect to advertise cumulative total return and average annual
total return, computed as described above, over periods of time other than one,
five and 10 years and cumulative total return over various time periods.
Additional Performance Comparisons
Investors may judge the performance of the fund by comparing its performance to
the performance of other mutual funds or mutual fund portfolios with comparable
investment objectives and policies through various mutual fund or market indices
such as the those prepared by Dow Jones & Co., Inc., Standard & Poor's
Corporation, Shearson Lehman Brothers, Inc. and to data prepared by Lipper
Analytical Services, Inc., Morningstar, Inc. and the Consumer Price Index.
Comparisons may also be made to indices or data published in Money, Forbes,
Barron's, The Wall Street Journal, The New York Times, Business Week, Pensions
and Investments, USA Today, Realty Stock Review, Changing Times, Institutional
Investor and other similar publications or services. In addition to performance
information, general information about the fund that appears in a publication
such as those mentioned above or in the applicable prospectus under the heading
"Performance Advertising" may be included in advertisements and in reports to
shareholders.
Permissible Advertising Information
From time to time, the fund may, in addition to any other permissible
information, include the following types of information in advertisements,
supplemental sales literature and reports to shareholders: (1) discussions of
general economic or financial principles (such as the effects of compounding and
the benefits of dollar-cost averaging); (2) discussions of general economic
trends; (3) presentations of statistical data to supplement such discussions;
(4) descriptions of past or anticipated portfolio holdings for the fund; (5)
descriptions of investment strategies for the fund; (6) descriptions or
comparisons of various savings and investment products (including, but not
limited to, qualified retirement plans and individual stocks and bonds), which
may or may not include the fund; (7) comparisons of investment products
(including the fund) with relevant market or industry indices or other
appropriate benchmarks; (8) discussions of fund rankings or ratings by
recognized rating organizations; and (9) testimonials describing the experience
of persons that have invested in the fund. The fund may also include
calculations, such as hypothetical compounding examples, which describe
hypothetical investment results in such communications. Such performance
examples will be based on an express set of assumptions and are not indicative
of the performance of the fund.
Multiple Class Performance Advertising
Pursuant to the Multiple Class Plan, the fund may issue additional classes of
existing funds or introduce new funds with multiple classes available for
purchase. To the extent a new class is added to the fund, the manager may, in
compliance with SEC and NASD rules, regulations and guidelines, market the new
class of shares using the historical performance information of the original
class of shares. When quoting performance information for the new class of
shares for periods prior to the first full quarter after inception, the original
class' performance will be restated to reflect the expenses of the new class.
For periods after the first full quarter after inception, actual performance of
the new class will be used.
Redemptions In Kind
The fund's policy with regard to large redemptions is described in detail in the
Prospectus under the heading "Special Requirements for Large Redemptions."
The fund has elected to be governed by Rule 18f-1 under the Investment Company
Act, pursuant to which the fund is obligated to redeem shares solely in cash up
to the lesser of $250,000 or 1% of the net asset value of the fund during any
90-day period for any one shareholder. Should redemptions by any shareholder
exceed such limitation, the fund will have the option of redeeming the excess in
cash or in kind. If shares are redeemed in kind, the redeeming shareholder might
incur brokerage costs in converting the assets to cash. The securities delivered
will be selected at the sole discretion of the manager. Such securities will not
necessarily be representative of the entire portfolio and may be securities that
the manager regards as least desirable. The method of valuing securities used to
make redemptions in kind will be the same as the method of valuing portfolio
securities described in each prospectus under the heading "HOW SHARE PRICE IS
DETERMINED," and such valuation will be made as of the same time the redemption
price is determined.
Holidays
The fund does not determine the net asset value of its shares on days when the
New York Stock Exchange is closed. Currently, the Exchange is closed on
Saturdays and Sundays and on holidays, namely New Year's Day, Martin Luther King
Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving and Christmas.
P.O. Box 419200
Kansas City, Missouri
64141-6200
Investor Services:
1-800-345-2021 OR 816-531-5575
Automated Information Line:
1-800-345-8765
Telecommunications Device for the Deaf:
1-800-634-4113 OR 816-444-3485
FAX: 816-340-7962
www.americancentury.com
[american century logo[reg.sm])
American
Century
<PAGE>
PART C OTHER INFORMATION
ITEM 24. Financial Statements and Exhibits
(i) Financial Statements filed in Part A of Registration Statement:
1. None.
(ii) Financial Statements filed in Part B of the Registration
Statement.
1. None.
(b) Exhibits (all exhibits not filed herein are being incorporated
herein by reference).
1. (a) Articles of Incorporation of Twentieth Century Capital
Portfolios, Inc., dated June 11, 1993 (filed
electronically as an exhibit to Post-Effective
Amendment No. 5 on Form N-1A on July 31, 1996, File No.
33-64872).
(b) Articles Supplementary of Twentieth Century Capital
Portfolios, Inc., dated March 11, 1996 (filed
electronically as an exhibit to Post-Effective
Amendment No. 5 on Form N-1A on July 31, 1996, File No.
33-64872).
(c) Articles of Amendment of Twentieth Century Capital
Portfolios, Inc., dated December 2, 1996 (filed
electronically as an exhibit to Post-Effective
Amendment No. 7 on Form N-1A on March 3, 1997, File No.
33-64872).
(d) Articles Supplementary of American Century Capital
Portfolios, Inc., dated December 2, 1996 (filed
electronically as an exhibit to Post-Effective
Amendment No. 7 on Form N-1A on March 3, 1997, File No.
33-64872).
(e) Articles Supplementary of American Century Capital
Portfolios, Inc. dated April 30, 1997 (filed
electronically as an exhibit to Post-Effective
Amendment No. 8 on Form N-1A on May 21, 1997, File No.
33-64872).
(f) Certificate of Correction of Articles Supplementary of
American Century Capital Portfolios, Inc. dated May 15,
1997 (filed electronically as an exhibit to
Post-Effective Amendment No. 8 on Form N-1A on May 21,
1997, File No. 33-64872).
(g) Articles Supplementary of American Century Capital
Portfolios, Inc. dated December 19, 1997 (filed
electronically as an exhibit to Post-Effective
Amendment No. 9 on Form N-1A on February 17, 1998).
(h) Articles Supplementary of American Century Capital
Portfolios, Inc. dated June 1, 1998 (filed
electronically as an exhibit to Post-Effective
Amendment No. 11 on Form N-1A on June 26, 1998).
(i) Articles Supplementary of American Century Capital
Portfolios, Inc. dated January 29, 1999 (filed herewith
as EX-99.B1i).
2. (a) By-Laws of Twentieth Century Capital Portfolios, Inc.
(filed electronically as an exhibit to Post-Effective
Amendment No. 5 on Form N-1A on July 31, 1996, File No.
33-64872).
(b) Amendment to By-Laws of American Century Capital
Portfolios, Inc. (filed electronically as an exhibit to
Post-Effective Amendment No. 9 on Form N-1A on February
17, 1998).
3. Voting Trust Agreements - None.
4. Instruments Defining Rights of Shareholders - None.
5. (a) Management Agreement dated as of August 1, 1997,
between American Century Capital Portfolios, Inc. and
American Century Investment Management, Inc. (filed
electronically as an exhibit to Post-Effective
Amendment No. 9 on Form N-1A on February 17, 1998).
(b) Subadvisory Agreement by and between American Century
Capital Portfolios, Inc., American Century Investment
Management, Inc. and RREEF America, L.L.C., dated
January 27, 1998 (filed electronically as an exhibit to
Post-Effective Amendment No. 9 on Form N-1A on February
17, 1998).
(c) Addendum to Management Agreement dated July 30, 1998,
between American Century Capital Portfolios, Inc. and
American Century Investment Management, Inc. (filed
electronically as an exhibit to Post-Effective
Amendment No. 11 on Form N-1A of the Registrant on June
26, 1998).
(d) Subadvisory Agreement between Barclays Global
Investors, N.A. and American Century Investment
Management, Inc. dated January 29, 1999 (to be filed by
amendment).
(e) Addendum to Management Agreement dated January 29, 1999
(filed herewith as EX-99.B5e).
6. (a) Distribution Agreement between American Century Capital
Portfolios, Inc. and Funds Distributor, Inc., dated
January 15, 1998 (filed electronically as Exhibit B6 to
Post-Effective Amendment No. 28 on form N-1A of
American Century Target Maturities Trust, File No.
2-94608).
(b) Amendment No. 1 to the Distribution Agreement between
American Century Capital Portfolios, Inc. and Funds
Distributor, Inc. dated June 1, 1998 (filed
electronically as an exhibit to Post-Effective
Amendment No. 11 on Form N-1A of the Registrant on June
26, 1998).
(c) Amendment No. 2 to the Distribution Agreement between
American Century Capital Portfolios, Inc. and Funds
Distributor, Inc. dated November 13, 1998 (filed
electronically as an exhibit to Post-Effective
Amendment No. 12 to the Registration Statement of
American Century World Mutual Funds, Inc. on November
13, 1998, File No. 33-39242).
(d) Amendment No. 3 to the Distribution Agreement between
American Century Capital Portfolios, Inc. and Funds
Distributor, Inc. dated January 29, 1999 (filed
herewith as EX-99.B6d).
7. Bonus and Profit Sharing Plan, Etc. - None.
8. (a) Master Agreement by and between Twentieth Century
Services, Inc. and Commerce Bank, N.A. dated January
22, 1997 (filed as a part of Post-Effective Amendment
No. 76 to the Registration Statement on Form N-1A of
American Century Mutual Funds, Inc., File No. 2-14213,
filed February 28, 1997 and incorporated herein by
reference).
(b) Global Custody Agreement between The Chase Manhattan
Bank and the Twentieth Century and Benham Funds, dated
August 9, 1996 (filed as a part of Post-Effective
Amendment No. 31 to the Registration Statement on Form
N-1A of American Century Government Income Trust, File
No. 2-99222, filed February 7, 1997).
9. (a) Transfer Agency Agreement, dated as of August 1, 1993,
by and between Twentieth Century Capital Portfolios,
Inc. and Twentieth Century Services, Inc. (filed
electronically as an exhibit to Post-Effective
Amendment No. 5 on Form N-1A of the Registrant on July
31, 1996, File No. 33-64872).
(b) License Agreement between American Century Investment
Management, Inc. and Standard & Poor's, a division of
The McGraw-Hill Companies, Inc., dated January 29, 1999
(to be filed by amendment).
10. Opinion and consent of Counsel (filed herewith as
EX-99.B10).
12. Annual Reports - None.
13. Agreements for Initial Capital, Etc. - None.
14. Model Retirement Plans (filed as Exhibits 14(a)-(d) to
Pre-Effective Amendment No. 2 to the Registration Statement
on Form N-1A of Twentieth Century World Investors, Inc.,
File No. 33-39242, filed on May 6, 1991).
15. (a) Master Distribution and Shareholder Services Plan of
Twentieth Century Capital Portfolios, Inc., Twentieth
Century Investors, Inc., Twentieth Century Strategic
Asset Allocations, Inc. and Twentieth Century World
Investors, Inc. (Advisor Class) dated September 3, 1996
(filed electronically as an Exhibit to Post-Effective
Amendment No. 9 on Form N-1A of the Registrant,
File No. 33-64872).
(b) Amendment No. 1 to Master Distribution and Shareholder
Services Plan of American Century Capital Portfolios,
Inc., American Century Mutual Funds, Inc., American
Century Strategic Asset Allocations, Inc. and American
Century World Mutual Funds, Inc.(Advisor Class) dated
June 13, 1997 (filed electronically as an exhibit to
Post-Effective Amendment No. 77 on Form N-1A of
American Century Mutual Funds on July 17, 1997).
(c) Amendment No. 2 to Master Distribution and Shareholder
Services Plan of American Century Capital Portfolios,
Inc., American Century Mutual Funds, Inc., American
Century Strategic Asset Allocations, Inc. and American
Century World Mutual Funds, Inc. (Advisor Class) dated
September 30, 1997 (filed electronically as an exhibit
to Post-Effective Amendment No. 78 on Form N-1A of
American Century Mutual Funds on February 26, 1998).
(d) Shareholder Services Plan of Twentieth Century Capital
Portfolios, Inc., Twentieth Century Investors, Inc.,
Twentieth Century Strategic Asset Allocations, Inc. and
Twentieth Century World Investors, Inc. (Service Class)
dated September 3, 1996 (filed electronically as an
Exhibit to Post-Effective Amendment No. 9 on Form N-1A
of the Registrant, File No. 33-64872).
(e) Amendment No. 3 to Master Distribution and Shareholder
Services Plan of American Century Capital Portfolios,
Inc., American Century Mutual Funds, Inc., American
Century Strategic Asset Allocations, Inc. and American
Century World Mutual Funds, Inc. (Advisor Class) dated
June 30, 1998 (filed electronically as an exhibit to
Post-Effective Amendment No. 11 on Form N-1A of the
Registrant on June 26, 1998).
(f) Amendment No. 4 to Master Distribution and Shareholder
Services Plan of American Century Capital Portfolios,
Inc., American Century Mutual Funds, Inc., American
Century Strategic Asset Allocations, Inc. and American
Century World Mutual Funds, Inc. (Advisor Class) dated
November 13, 1998 (filed electronically as an exhibit
to Post-Effective Amendment No. 12 to the Registration
Statement of American Century World Mutual Funds, Inc.
on November 13, 1998, File No. 33-39242).
16. Schedule of Computation for Performance Advertising
Quotations - None.
17. Power of Attorney (filed electronically as an exhibit to
Post-Effective Amendment No. 12 on Form N-1A of the
Registrant, on June 26, 1998).
18. (a) Multiple Class Plan of Twentieth Century Capital
Portfolios, Inc., Twentieth Century Investors, Inc.,
Twentieth Century Strategic Asset Allocations, Inc. and
Twentieth Century World Investors, Inc. dated September
3, 1996 (filed electronically as an exhibit to
Post-Effective Amendment No. 9 on Form N-1A of the
Registrant, File No. 33-64872).
(b) Amendment No. 1 to Multiple Class Plan of American
Century Capital Portfolios, Inc., American Century
Mutual Funds, Inc., American Century Strategic Asset
Allocations, Inc. and American Century World Mutual
Funds, Inc. dated June 13, 1997 (filed electronically
as an exhibit to Post-Effective Amendment No. 77 on
Form N-1A of American Century Mutual Funds, Inc. on
July 17, 1997).
(c) Amendment No. 2 to Multiple Class Plan of American
Century Capital Portfolios, Inc., American Century
Mutual Funds, Inc., American Century Strategic Asset
Allocations, Inc. and American Century World Mutual
Funds, Inc. dated September 30, 1997 (filed
electronically as an exhibit to Post-Effective
Amendment No. 78 on Form N-1A of American Century
Mutual Funds, Inc. on February 26, 1998).
(d) Amendment No. 3 to Multiple Class Plan of American
Century Capital Portfolios, Inc., American Century
Mutual Funds, Inc., American Century Strategic Asset
Allocations, Inc. and American Century World Mutual
Funds, Inc. dated June 30, 1998 (filed electronically
as an exhibit to Post-Effective Amendment No. 11 on
Form N-1A of the Registrant on June 26, 1998).
(e) Amendment No. 4 to Multiple Class Plan of American
Century Capital Portfolios, Inc., American Century
Mutual Funds, Inc., American Century Strategic Asset
Allocations, Inc. and American Century World Mutual
Funds, Inc. dated November 13, 1998 (filed
electronically as an exhibit to Post-Effective
Amendment No. 12 to the Registration Statement of
American Century World Mutual Funds, Inc. on November
13, 1998, File No. 33-39242).
(f) Amendment No. 5 to Multiple Class Plan of American
Century Capital Portfolios, Inc., American Century
Mutual Funds, Inc., American Century Strategic Asset
Allocations, Inc. and American Century World Mutual
Funds, Inc. dated January 29, 1999 (filed herewith as
EX-99.B18d).
27. Financial Data Schedule for American Century Equity Index
Fund (EX-27.1).
ITEM 25. Persons Controlled by or Under Common Control with Registrant - None.
ITEM 26. Number of Holders of Securities - The Equity Index Fund has no holders
of Securities.
ITEM 27. Indemnification.
The Registrant is a Maryland corporation. Section 2-418 of the
Maryland General Corporation Law allows a Maryland corporation to
indemnify its officers, directors, employees and agents to the extent
provided in such statute.
Article XIII of the Registrant's Articles of Incorporation, Exibit 1,
requires the indemnification of the Registrant's directors and
officers to the extent permitted by Section 2-418 of the Maryland
General Corporation Law, the Investment Company Act of 1940 and all
other applicable laws.
The Registrant has purchased an insurance policy insuring its officers
and directors against certain liabilities which such officers and
directors may incur while acting in such capacities and providing
reimbursement to the Registrant for sums which it may be permitted or
required to pay to its officers and directors by way of
indemnification against such liabilities, subject in either case to
clauses respecting deductibility and participation.
ITEM 28. Business and Other Connections of Investment Advisor.
American Century Investment Management, Inc., the investment advisor,
is engaged in the business of managing investments for registered
investment companies, deferred compensation plans and other
institutional investors.
ITEM 29. Principal Underwriters
(a) Funds Distributor, Inc. (the "Distributor") acts as principal
underwriter for the following investment companies.
American Century California Tax-Free and Municipal Funds
American Century Capital Portfolios, Inc.
American Century Government Income Trust
American Century International Bond Funds
American Century Investment Trust
American Century Municipal Trust
American Century Mutual Funds, Inc.
American Century Premium Reserves, Inc.
American Century Quantitative Equity Funds
American Century Strategic Asset Allocations, Inc.
American Century Target Maturities Trust
American Century Variable Portfolios, Inc.
American Century World Mutual Funds, Inc.
BJB Investment Funds
The Brinson Funds
Dresdner RCM Capital Funds, Inc.
Dresdner RCM Equity Funds, Inc.
Founders Funds, Inc.
Harris Insight Funds Trust
HT Insight Funds, Inc. d/b/a Harris Insight Funds
J.P. Morgan Institutional Funds
J.P. Morgan Funds
JPM Series Trust
JPM Series Trust II
LaSalle Partners Funds, Inc.
Merrimac Series
Monetta Fund, Inc.
Monetta Trust
The Montgomery Funds I
The Montgomery Funds II
The Munder Framlington Funds Trust
The Munder Funds Trust
The Munder Funds, Inc.
National Investors Cash Management Fund, Inc.
Orbitex Group of Funds
SG Cowen Funds, Inc.
SG Cowen Income + Growth Fund, Inc.
SG Cowen Standby Reserve Fund, Inc.
SG Cowen Standby Tax-Exempt Reserve Fund, Inc.
SG Cowen Series Funds, Inc.
St. Clair Funds, Inc.
The Skyline Funds
Waterhouse Investors Family of Funds, Inc.
WEBS Index Fund, Inc.
The Distributor is registered with the Securities and Exchange
Commission as a broker-dealer and is a member of the National
Association of Securities Dealers. The Distributor is located at 60
State Street, Suite 1300, Boston, Massachusetts 02109. The Distributor
is an indirect wholly-owned subsidiary of Boston Institutional Group,
Inc., a holding company all of whose outstanding shares are owned by
key employees.
(b) The following is a list of the executive officers, directors and
partners of the Distributor:
<TABLE>
Name and Principal Business Positions and Offices with Positions and Offices with
Address* Underwriter Registrant
<S> <C> <C>
Marie E. Connolly Director, President and Chief none
Executive Officer
George A. Rio Executive Vice President President, Principal Executive
and Principal Financial Officer
Donald R. Roberson Executive Vice President none
William S. Nichols Executive Vice President none
Michael S. Petrucelli Senior Vice President none
Joseph F. Tower, III Director, Senior Vice President, none
Treasurer and Chief Financial
Officer
Paula R. David Senior Vice President none
Allen B. Closser Senior Vice President none
Bernard A. Whalen Senior Vice President none
William J. Nutt Director none
- --------------------
* All addresses are 60 State Street, Suite 1300, Boston, Massachusetts 02109
</TABLE>
(c) Not applicable.
ITEM 30. Location of Accounts and Records.
All accounts, books and other documents required to be maintained by
Section 31(a) of the 1940 Act, and the rules promulgated thereunder,
are in the possession of Registrant, American Century Services
Corporation and American Century Investment Management, Inc., all
located at 4500 Main Street, Kansas City, Missouri 64111.
ITEM 31. Management Services - None.
ITEM 32. Undertakings.
(a) Not applicable.
(b) Not applicable.
(c) The Registrant hereby undertakes to furnish each person to whom a
prospectus is delivered with a copy of the Registrant's latest
annual report to shareholders, upon request and without charge.
(d) The Registrant hereby undertakes that it will, if requested to do
so by the holders of at least 10% of the Registrant's outstanding
votes, call a meeting of shareholders for the purpose of voting
upon the question of the removal of a director and to assist in
communication with other shareholders as required by Section
16(c).
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it has duly caused
this Post-Effective Amendment No. 13 to its Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of
Kansas City, State of Missouri on the 25th day of November, 1998.
American Century Capital Portfolios, Inc.
(Registrant)
By: /s/Charles A. Etherington
Charles A. Etherington, Vice President
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 13 has been signed below by the following persons
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
*George A. Rio President, Principal Executive November 25, 1998
- ------------------------- and Principal Financial Officer
George A. Rio.
*Maryanne Roepke Vice President and Treasurer November 25, 1998
- -------------------------
Maryanne Roepke
*James E. Stowers, Jr. Director November 25, 1998
- -------------------------
James E. Stowers, Jr.
*James E. Stowers III Director November 25, 1998
- -------------------------
James E. Stowers, III
*Thomas A. Brown Director November 25, 1998
- -------------------------
Thomas A. Brown
*Robert W. Doering, M.D. Director November 25, 1998
- -------------------------
Robert W. Doering, M.D.
*Andrea C. Hall, Ph.D. Director November 25, 1998
- -------------------------
Andrea C. Hall, Ph.D.
*D. D. (Del) Hock Director November 25, 1998
- -------------------------
D. D. (Del) Hock
*Donald H. Pratt Director November 25, 1998
- -------------------------
Donald H. Pratt
*Lloyd T. Silver, Jr. Director November 25, 1998
- -------------------------
Lloyd T. Silver, Jr.
*M. Jeannine Strandjord Director November 25, 1998
- -------------------------
M. Jeannine Strandjord
*By /s/Charles A. Etherington
Charles A. Etherington
Attorney-in-Fact
</TABLE>
EXHIBIT INDEX
EXHIBIT DESCRIPTION OF DOCUMENT
NUMBER
EX-99.B1a Articles of Incorporation of Twentieth Century Capital
Portfolios, Inc. (filed electronically as Exhibit 1a to
Post-Effective Amendment No. 5 on Form N-1A, filed on July 31,
1996, and incorporated herein by reference).
EX-99.B1b Articles Supplementary of Twentieth Century Capital Portfolios,
Inc. (filed electronically as Exhibit 1b to Post-Effective
Amendment No. 5 on Form N-1A, filed on July 31, 1996, and
incorporated herein by reference).
EX-99.B1c Articles of Amendment of Twentieth Century Capital Portfolios,
Inc., dated December 2, 1996 (filed electronically as Exhibit B1c
to Post-Effective Amendment No. 7 on Form N-1A, filed on March 3,
1997, and incorporated herein by reference).
EX-99.B1d Articles Supplementary of American Century Capital Portfolios,
Inc., dated December 2, 1996 (filed electronically as Exhibit B1d
to Post-Effective Amendment No. 7 on Form N-1A, filed on March 3,
1997, and incorporated herein by reference).
EX-99.B1e Articles Supplementary of American Century Captial Portfolios,
Inc. dated April 30, 1997 (filed electronically as Exhibit B1e to
Post-Effective Amendment No. 8 on Form N-1A, filed on May 21,
1997, and incorporated herein by reference).
EX-99.B1f Certificate of Correction to Articles Supplementary of American
Century Capital Portfolios, Inc. dated May 15, 1997 (filed
electronically as Exhibit B1f to Post-Effective Amendment No. 8
on Form N-1A, filed on May 21, 1997, and incorporated herein by
reference).
EX-99.B1g Articles Supplementary of American Century Capital Portfolios,
Inc. dated December 19, 1997 (filed electronically as Exhibit B1g
to Post-Effective Amendment No. 9 on Form N-1A, filed February
17, 1998, and incorporated herein by reference).
EX-99.B1h Articles Supplementary of American Century Capital Portfolios,
Inc. dated June 1, 1998 (filed electronically as Exhibit B1h to
Post-Effective Amendment No. 11 on Form N-1A, filed June 26,
1998, and incorporated herein by reference).
EX-99.B1i Articles Supplementary of American Century Capital Portfolios,
Inc. dated January 29, 1999 is included herein.
EX-99.B2a By-Laws of Twentieth Century Capital Portfolios, Inc. (filed
electronically as Exhibit 2 to Post-Effective Amendment No. 5 on
Form N-1A, filed on July 31, 1996, and incorporated herein by
reference).
EX-99.B2b Amendment to By-Laws of American Century Capital Portfolios, Inc.
(filed electronically as Exhibit B2b to Post-Effective Amendment
No. 9 on Form N-1A, filed February 17, 1998, and incorporated
herein by reference).
EX-99.B5a Management Agreement, dated as of August 1, 1997, between
American Century Capital Portfolios, Inc. and American Century
Investment Management, Inc. (filed electronically as Exhibit B5a
to Post-Effective Amendment No. 9 on Form N-1A, filed February
17, 1998, and incorporated herein by reference).
EX-99.B5b Investment Subadvisory Agreement by and among American Century
Capital Portfolios, Inc., American Century Investment Management,
Inc. and RREEF America L.L.C., dated January 27, 1998 (filed
electronically as Exhibit B5b to Post-Effective Amendment No. 9
on Form N-1A, filed February 17, 1998, and incorporated herein by
reference).
EX-99.B5c Addendum to Management Agreement dated July 30, 1998, between
American Century Capital Portfolios, Inc. and American Century
Investment Management, Inc. (filed electronically as Exhibit B5c
to Post-Effective Amendment No. 11 on Form N-1A, filed June 26,
1998, and incorporated herein by reference).
EX-99.B5d Subadvisory Agreement between Barclays Global Investors, N.A. and
American Century Investment Management, Inc. dated January 29,
1999 (to be filed by amendment).
EX-99.B5e Addendum to Management Agreement dated January 29, 1999, between
American Century Capital Portfolios, Inc. and American Century
Investment Management, Inc. is included herein.
EX-99.B6a Distribution Agreement between American Century Capital
Portfolios, Inc. and Funds Distributor, Inc. dated January 15,
1998 (filed electronically as Exhibit 6 to Post-Effective
Amendment No. 28 on Form N-1A of American Century Target
Maturities Trust, filed on January 30, 1998, and incorporated
herein by reference).
EX-99.B6b Amendment No. 1 to Distribution Agreement between American
Century Capital Portfolios, Inc. and Funds Distributor, Inc.
dated June 1, 1998 (filed electronically as Exhibit B6b to
Post-Effective Amendment No. 11 on Form N-1A, filed June 26,
1998, and incorporated herein by reference).
EX-99.B6c Amendment No. 2 to Distribution Agreement between American
Century Capital Portfolios, Inc. and Funds Distributor, Inc.
dated November 13, 1998 (filed as a part of Post-Effective
Amendment No. 12 to the Registration Statement on Form N-1A of
American Century World Mutual Funds, Inc., File No. 33-39242,
filed November 13, 1998, and incorporated herein by reference).
EX-99.B6d Amendment No. 3 to Distribution Agreement between American
Century Capital Portfolios, Inc. and Funds Distributor, Inc.
dated January 29, 1999, is included herein.
EX-99.B8a Master Agreement by and between Twentieth Century Services, Inc.
and Commerce Bank, N.A. dated January 22, 1997 (filed
electronically as Exhibit 8(b) to Post-Effective Amendment No. 76
to the Registration Statement on Form N-1A of American Century
Mutual Funds, Inc., File No. 2-14213, filed February 28, 1997 and
incorporated herein by reference).
EX-99.B8b Global Custody Agreement between The Chase Manhattan Bank and the
Twentieth Century and Benham Funds, dated August 9, 1996 (filed
electronically as Exhibit B8 to Post-Effective Amendment No. 31
to the Registration Statement on Form N-1A of American Century
Government Income Trust, File No. 2-99222, filed February 7,
1997, and incorporated herein by reference).
EX-99.B9a Transfer Agency Agreement dated as of August 1, 1993, by and
between Twentieth Century Capital Portfolios, Inc. and Twentieth
Century Services, Inc. (filed electronically as Exhibit 9 to
Post-Effective Amendment No. 5 on Form N-1A, filed July 31, 1996,
and incorporated herein by reference).
EX-99.B9b License Agreement between American Century Investment Management,
Inc. and Standard & Poor's, a division of The McGraw-Hill
Companies, Inc., dated January 29, 1999 (to be filed by
amendment).
EX-99.B10 Opinion and Consent of David H. Reinmiller, Esq.
EX-99.B14 Model Retirement Plans (filed as Exhibits 14(a), 14(b), 14(c) and
14(d) to Pre-Effective Amendment No. 2 to the Registration
Statement and incorporated herein by reference).
EX-99.B15a Master Distribution and Shareholder Services Plan of Twentieth
Century Capital Portfolios, Inc., Twentieth Century Investors,
Inc., Twentieth Century Strategic Asset Allocations, Inc. and
Twentieth Century World Investors, Inc. (Advisor Class) dated
September 3, 1996 (filed electronically as a part of
Post-Effective Amendment No. 9 on Form N-1A of the Registrant,
Commission File No. 33-64872, filed February 17, 1998, and
incorporated herein by reference).
EX-99.B15b Amendment No. 1 to Master Distribution and Shareholder Services
Plan of American Century Capital Portfolios, Inc., American
Century Mutual Funds, Inc., American Century Strategic Asset
Allocations, Inc. and American Century World Mutual Funds, Inc.
(Advisor Class) dated June 13, 1997 (filed electronically as a
part of Post-Effective Amendment No. 77 to the Registration
Statement on Form N-1A of American Century Mutual Funds, Inc.,
Commission File No. 2-14213, filed on July 17, 1997, and
incorporated herein by reference).
EX-99.B15c Amendment No. 2 to Master Distribution and Shareholder Services
Plan of American Century Capital Portfolios, Inc., American
Century Mutual Funds, Inc., American Century Strategic Asset
Allocations, Inc. and American Century World Mutual Funds, Inc.
(Advisor Class) dated September 30, 1997 (filed electronically as
a part of Post-Effective Amendment No. 78 to the Registration
Statement on Form N-1A of American Century Mutual Funds, Inc.,
Commission File No. 2-14213, filed on February 26, 1998, and
incorporated herein by reference).
EX-99.B15d Shareholder Services Plan of Twentieth Century Capital
Portfolios, Inc., Twentieth Century Investors, Inc., Twentieth
Century Strategic Asset Allocations, Inc. and Twentieth Century
World Investors, Inc. (Service Class) dated September 3, 1996
(filed electronically as a part of Post-Effective Amendment No. 9
on Form N-1A of the Registrant, Commission File No. 33-64872,
filed February 17, 1998, and incorporated herein by reference).
EX-99.B15e Amendment No. 3 to Master Distribution and Shareholder Services
Plan of American Century Capital Portfolios, Inc., American
Century Mutual Funds, Inc., American Century Strategic Asset
Allocations, Inc. and American Century World Mutual Funds, Inc.
(Advisor Class) dated June 30, 1998 (filed electronically as
Exhibit B15e to Post-Effective Amendment No. 11 on Form N-1A,
filed June 26, 1998, and incorporated herein by reference).
EX-99.B15f Amendment No. 4 to Master Distribution and Shareholder Services
Plan of American Century Capital Portfolios, Inc., American
Century Mutual Funds, Inc., American Century Strategic Asset
Allocations, Inc. and American Century World Mutual Funds, Inc.
(Advisor Class) dated November 13, 1998 (filed electronically as
an exhibit to Post-Effective Amendment No. 12 to the Registration
Statement of American Century World Mutual Funds, Inc., on
November 13, 1998, File No. 33-39242, and incorporated herein by
reference).
EX-99.B17 Power of Attorney dated July 25, 1998 (filed as a part of
Post-Effective Amendment No. 12 to the Registration Statement on
Form N-1A of the Registrant, filed September 14, 1998 and
incorporated herein by reference).
EX-99.B18a Multiple Class Plan of Twentieth Century Capital Portfolios,
Inc., Twentieth Century Investors, Inc., Twentieth Century
Strategic Asset Allocations, Inc. and Twentieth Century World
Investors, Inc. dated September 3, 1996 (filed electronically as
a part of Post-Effective Amendment No. 9 on Form N-1A of the
Registrant, Commission File No. 33-64872, filed February 17,
1998, and incorporated herein by reference).
EX-99.B18b Amendment No. 1 to Multiple Class Plan of American Century
Capital Portfolios, Inc., American Century Mutual Funds, Inc.,
American Century Strategic Asset Allocations, Inc. and American
Century World Mutual Funds, Inc. dated June 13, 1997 (filed
electronically as a part of Post-Effective Amendment No. 77 to
the Registration Statement on Form N-1A of American Century
Mutual Funds, Inc., Commission File No. 2-14213, filed on July
17, 1997, and incorporated herein by reference).
EX-99.B18c Amendment No. 2 to Multiple Class Plan of American Century
Capital Portfolios, Inc., American Century Mutual Funds, Inc.,
American Century Strategic Asset Allocations, Inc. and American
Century World Mutual Funds, Inc. dated September 30, 1997 (filed
electronically as a part of Post-Effective Amendment No. 78 to
the Registration Statement on Form N-1A of American Century
Mutual Funds, Inc., Commission File No. 2-14213, filed on
February 26, 1998, and incorporated herein by reference).
EX-99.B18d Amendment No. 3 to Multiple Class Plan of American Century
Capital Portfolios, Inc., American Century Mutual Funds, Inc.,
American Century Strategic Asset Allocations, Inc. and American
Century World Mutual Funds, Inc. dated June 30, 1998 (filed
electronically as Exhibit B18d to Post-Effective Amendment No. 11
on Form N-1A, filed June 26, 1998, and incorporated herein by
reference).
EX-99.B18e Amendment No. 4 to Multiple Class Plan of American Century
Capital Portfolios, Inc., American Century Mutual Funds, Inc.,
American Century Strategic Asset Allocations, Inc. and American
Century World Mutual Funds, Inc. dated November 13, 1998 (filed
electronically as an exhibit to Post-Effective Amendment No. 12
to the Registration Statement of American Century World Mutual
Funds, Inc. on November 13, 1998, File No. 33-39242, and
incorporated herein by reference).
EX-99.B18f Amendment No. 5 to Multiple Class Plan of American Century
Capital Portfolios, Inc., American Century Mutual Funds, Inc.,
American Century Strategic Asset Allocations, Inc. and American
Century World Mutual Funds, Inc. dated January 29, 1999, is
included herein.
EX-27.1 Financial Data Schedule for American Century Equity Index Fund.
AMERICAN CENTURY CAPITAL PORTFOLIOS, INC.
ARTICLES SUPPLEMENTARY
AMERICAN CENTURY CAPITAL PORTFOLIOS, INC., a Maryland corporation whose
principal Maryland office is located in Baltimore, Maryland (the "Corporation"),
hereby certifies to the State Department of Assessments and Taxation of Maryland
that:
FIRST: Pursuant to authority expressly vested in the Board of Directors
by Article FIFTH and Article SEVENTH of the Articles of Incorporation of the
Corporation, the Board of Directors of the Corporation has duly established a
new series of shares titled American Century Equity Index Fund (hereinafter
referred to as a "Series") for the Corporation's stock and has allocated
Seventy-five Hundred Million (75,000,000) shares of the One Billion One Hundred
Million (1,100,000,000) shares of authorized capital stock of the Corporation,
par value One Cent ($0.01) per share, for an aggregate par value of Seven
Hundred Fifty Thousand Dollars ($750,000) to the new Series. As a result of the
action taken by the Board of Directors referenced in Article FIRST of these
Articles Supplementary, the five (5) Series of stock of the Corporation and the
number of shares and aggregate par value of each is as follows:
Series Number of Shares Aggregate Par Value
American Century Value Fund 625,000,000 $6,250,000
American Century Equity Income Fund 200,000,000 $2,000,000
American Century Real Estate Fund 100,000,000 $1,000,000
American Century Small Cap Value 100,000,000 $1,000,000
Fund
American Century Equity Index Fund 75,000,000 $ 750,000
The par value of each share of stock in each Series is One Cent ($0.01) per
share.
SECOND: Pursuant to authority expressly vested in the Board of
Directors by Article FIFTH and Article SEVENTH of the Articles of Incorporation,
the Board of Directors of the Corporation (a) has duly established two (2)
classes of shares (each hereinafter referred to as a "Class") for the new Series
of the capital stock of the Corporation and (b) has allocated the shares
designated to the new Series in Article FIRST above among the Classes of shares.
As a result of the action taken by the Board of Directors, the Classes of shares
of the five (5) Series of stock of the Corporation and the number of shares and
aggregate par value of each is as follows:
<TABLE>
Number of Shares Aggregate
Series Name Class Name as Allocated Par Value
----------- ---------- ------------ ---------
<S> <C> <C> <C>
American Century Value Fund Investor 500,000,000 $5,000,000
Institutional 50,000,000 500,000
Service 0 0
Advisor 75,000,000 750,000
American Century Equity Income Fund Investor 125,000,000 $1,250,000
Institutional 25,000,000 250,000
Service 0 0
Advisor 50,000,000 500,000
American Century Real Estate Fund Investor 50,000,000 $ 500,000
Institutional 25,000,000 250,000
Advisor 25,000,000 250,000
American Century Small Cap Value Fund Investor 50,000,000 $ 500,000
Institutional 25,000,000 250,000
Advisor 25,000,000 250,000
American Century Equity Index Fund Investor 50,000,000 $ 500,000
Institutional 25,000,000 250,000
</TABLE>
THIRD: Except as otherwise provided by the express provisions of these
Articles Supplementary, nothing herein shall limit, by inference or otherwise,
the discretionary right of the Board of Directors to serialize, classify or
reclassify and issue any unissued shares of any Series or Class or any unissued
shares that have not been allocated to a Series or Class, and to fix or alter
all terms thereof, to the full extent provided by the Articles of Incorporation
of the Corporation.
FOURTH: A description of the series and classes of shares, including
the preferences, conversion and other rights, voting powers, restrictions,
limitations as to dividends, qualifications, and terms and conditions for
redemption is set forth in the Articles of Incorporation of the Corporation and
is not changed by these Articles Supplementary, except with respect to the
creation and/or designation of the various Series.
FIFTH: The Board of Directors of the Corporation duly adopted
resolutions dividing into Series the authorized capital stock of the Corporation
and allocating shares to each Series as set forth in these Articles
Supplementary.
SIXTH: The Board of Directors of the Corporation duly adopted
resolutions establishing a new Series and allocating shares to the Series, as
set forth in Article FIRST, and dividing the Series of capital stock of the
Corporation into Classes as set forth in Article SECOND.
IN WITNESS WHEREOF, AMERICAN CENTURY CAPITAL PORTFOLIOS, INC. has
caused these Articles Supplementary to be signed and acknowledged in its name
and on its behalf by its Vice President and its corporate seal to be hereunto
affixed and attested to by its Assistant Secretary on this 29th day of January,
1999.
AMERICAN CENTURY CAPITAL
ATTEST: PORTFOLIOS, INC.
/s/ David H. Reinmiller By: /s/ Patrick A. Looby
Name: David H. Reinmiller Name: Patrick A. Looby
Title: Assistant Secretary Title: Vice President
THE UNDERSIGNED Vice President of AMERICAN CENTURY CAPITAL PORTFOLIOS,
INC., who executed on behalf of said Corporation the foregoing Articles
Supplementary to the Charter, of which this certificate is made a part, hereby
acknowledges, in the name of and on behalf of said Corporation, the foregoing
Articles Supplementary to the Charter to be the corporate act of said
Corporation, and further certifies that, to the best of his knowledge,
information and belief, the matters and facts set forth therein with respect to
the approval thereof are true in all material respects under the penalties of
perjury.
Dated: January 29, 1999. /s/ Patrick A. Looby
Patrick A. Looby, Vice President
ADDENDUM TO MANAGEMENT AGREEMENT
This Addendum, dated as of January 29, 1999, supplements the Management
Agreement (the "Agreement") dated as of August 1, 1997, by and between American
Century Capital Portfolios, Inc., ("ACCP") and American Century Investment
Management, Inc. ("ACIM").
IN CONSIDERATION of the mutual promises and conditions herein
contained, the parties agree as follows (all capitalized terms used herein and
not otherwise defined having the meaning given them in the Agreement):
1. ACIM shall manage the following series (the "New Series") of shares
to be issued by ACCP, and for such management shall receive the Applicable Fee
set forth below:
Name of Series Applicable Fee
-------------- --------------
American Century Equity Index Fund Investor Class - 0.49%
Institutional Class- 0.29%
2. ACIM shall manage the New Series in accordance with the terms and
conditions specified in the Agreement for its existing management
responsibilities.
IN WITNESS WHEREOF, the parties have caused this Addendum to the
Agreement to be executed by their respective duly authorized officers as of the
day and year first above written.
Attest: AMERICAN CENTURY
CAPITAL PORTFOLIOS, INC.
/s/ David H. Reinmiller /s/ Patrick A. Looby
David H. Reinmiller Patrick A. Looby
Assistant Secretary Vice President
Attest: AMERICAN CENTURY INVESTMENT
MANAGEMENT, INC.
/s/ David H. Reinmiller /s/ William M. Lyons
David H. Reinmiller William M. Lyons
Assistant Secretary Executive Vice President
AMENDMENT NO. 3 TO DISTRIBUTION AGREEMENT
THIS AMENDMENT NO. 3 TO DISTRIBUTION AGREEMENT is made as of the 29th
of January, 1999, by and between each of the open end management investment
companies listed on Schedule A, attached hereto, as of the dates noted on such
Schedule A, together with all other open end management investment companies
subsequently established and made subject to this Agreement in accordance with
Section 16 (the "Issuers") and Funds Distributor, Inc. ("Distributor").
Capitalized terms not otherwise defined herein shall have the meaning ascribed
to them in the Distribution Agreement.
RECITALS
WHEREAS, the Issuers and Distributor are parties to a certain
Distribution Agreement dated January 15, 1998, amended June 1, 1998 and December
1, 1998 (the "Distribution Agreement"); and
WHEREAS, American Century Capital Portfolios, Inc. has added a series,
American Century Equity Index Fund; and
WHEREAS, the parties desire to amend the Distribution Agreement to add
the new series.
NOW, THEREFORE, in consideration of the mutual promises set forth
herein, the parties hereto agree as follows:
1. The new series is hereby added as a party to the Distribution
Agreement.
2. Schedules A, B, C, D and E to Distribution Agreement are hereby
amended by deleting the text thereof in their entirety and inserting in lieu
therefor the Schedules A, B, C, D and E attached hereto.
3. After the date hereof, all references to the Distribution Agreement
shall be deemed to mean the Distribution Agreement, as amended by Amendment No.
1, Amendment 2 and this Amendment No. 3.
4. In the event of a conflict between the terms of this Amendment No.
3, Amendment No. 2, Amendment No. 1 and the Distribution Agreement, it is the
intention of the parties that the terms of this Amendment No. 3 shall control
and the Distribution Agreement shall be interpreted on that basis. To the extent
the provisions of the Distribution Agreement, Amendment No. 1 and Amendment No.
2 have not been amended by this Amendment No. 3, the parties hereby confirm and
ratify the Distribution Agreement.
5. This Amendment No. 3 may be executed in two or more counterparts,
each of which shall be an original and all of which together shall constitute
one instrument.
IN WITNESS WHEREOF, the undersigned have executed this Amendment No. 3
as of the date first above written.
FUNDS DISTRIBUTOR, INC.
By: /s/ Marie E. Connolly
Name: Marie E. Connolly
Title: President and CEO
AMERICAN CENTURY CALIFORNIA TAX-FREE AND MUNICIPAL FUNDS
AMERICAN CENTURY CAPITAL PORTFOLIOS, INC.
AMERICAN CENTURY GOVERNMENT INCOME TRUST
AMERICAN CENTURY INTERNATIONAL BOND FUNDS
AMERICAN CENTURY INVESTMENT TRUST
AMERICAN CENTURY MUNICIPAL TRUST
AMERICAN CENTURY MUTUAL FUNDS, INC.
AMERICAN CENTURY PREMIUM RESERVES, INC.
AMERICAN CENTURY QUANTITATIVE EQUITY FUNDS
AMERICAN CENTURY STRATEGIC ASSET ALLOCATIONS, INC.
AMERICAN CENTURY TARGET MATURITIES TRUST
AMERICAN CENTURY VARIABLE PORTFOLIOS, INC.
AMERICAN CENTURY WORLD MUTUAL FUNDS, INC.
By: /s/ Patrick A. Looby
Patrick A. Looby
Vice President of each of the Issuers
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE A
Companies and Funds Covered by this Distribution Agreement
Fund Date of Agreement
- ---- -----------------
<S> <C>
AMERICAN CENTURY CALIFORNIA TAX-FREE AND MUNICIPAL FUNDS
0 Benham California Municipal Money Market Fund January 15, 1998
0 Benham California High-Yield Municipal Fund January 15, 1998
0 Benham California Tax-Free Money Market Fund January 15, 1998
0 Benham California Limited Term Tax-Free Fund January 15, 1998
0 Benham California Intermediate-Term Tax-Free Fund January 15, 1998
0 Benham California Long-Term Tax-Free Fund January 15, 1998
0 Benham California Insured Tax-Free Fund January 15, 1998
AMERICAN CENTURY CAPITAL PORTFOLIOS, INC.
0 American Century Equity Income Fund January 15, 1998
0 American Century Real Estate Fund January 15, 1998
0 American Century Value Fund January 15, 1998
0 American Century Small Cap Value Fund July 30, 1998
0 American Century Equity Index Fund January 29, 1998
AMERICAN CENTURY GOVERNMENT INCOME TRUST
0 Benham Short-Term Treasury Fund January 15, 1998
0 Benham Intermediate-Term Treasury Fund January 15, 1998
0 Benham Long-Term Treasury Fund January 15, 1998
0 Benham Government Agency Money Market Fund January 15, 1998
0 Benham Short-Term Government Fund January 15, 1998
0 Benham GNMA Fund January 15, 1998
0 Benham Inflation-Adjusted Treasury Fund January 15, 1998
0 Benham Capital Preservation Fund January 15, 1998
AMERICAN CENTURY INTERNATIONAL BOND FUNDS
0 Benham International Bond Fund January 15, 1998
AMERICAN CENTURY INVESTMENT TRUST
0 Benham Prime Money Market Fund January 15, 1998
AMERICAN CENTURY MUNICIPAL TRUST
0 Benham Arizona Intermediate-Term Municipal Fund January 15, 1998
0 Benham Florida Municipal Money Market Fund January 15, 1998
0 Benham Florida Intermediate-Term Municipal Fund January 15, 1998
0 Benham Tax-Free Money Market Fund January 15, 1998
0 Benham Intermediate-Term Tax-Free Fund January 15, 1998
0 Benham Long-Term Tax-Free Fund January 15, 1998
0 Benham Limited-Term Tax-Free Fund January 15, 1998
0 Benham High-Yield Municipal Fund March 31, 1998
AMERICAN CENTURY MUTUAL FUNDS, INC.
0 American Century Balanced Fund January 15, 1998
0 Twentieth Century Growth Fund January 15, 1998
0 Twentieth Century Heritage Fund January 15, 1998
0 Benham Intermediate-Term Bond Fund January 15, 1998
0 Benham Limited-Term Bond Fund January 15, 1998
0 Benham Bond Fund January 15, 1998
0 Twentieth Century Select Fund January 15, 1998
0 Twentieth Century Ultra Fund January 15, 1998
0 Twentieth Century Vista Fund January 15, 1998
0 Twentieth Century Giftrust January 15, 1998
0 Twentieth Century New Opportunities Fund January 15, 1998
0 Benham High Yield Fund January 15, 1998
AMERICAN CENTURY PREMIUM RESERVES, INC.
0 Benham Premium Government Reserve Fund January 15, 1998
0 Benham Premium Capital Reserve Fund January 15, 1998
0 Benham Premium Managed Bond Fund January 15, 1998
AMERICAN CENTURY QUANTITATIVE EQUITY FUNDS
0 American Century Equity Growth Fund January 15, 1998
0 American Century Income & Growth Fund January 15, 1998
0 American Century Global Gold Fund January 15, 1998
0 American Century Global Natural Resources Fund January 15, 1998
0 American Century Utilities Fund January 15, 1998
0 American Century Small Cap Quantitative Fund July 30, 1998
AMERICAN CENTURY STRATEGIC ASSET ALLOCATIONS, INC.
0 American Century Strategic Allocation: Aggressive January 15, 1998
0 American Century Strategic Allocation: Conservative January 15, 1998
0 American Century Strategic Allocation: Moderate January 15, 1998
AMERICAN CENTURY TARGET MATURITIES TRUST
0 Benham Target Maturities Trust: 2000 January 15, 1998
0 Benham Target Maturities Trust: 2005 January 15, 1998
0 Benham Target Maturities Trust: 2010 January 15, 1998
0 Benham Target Maturities Trust: 2015 January 15, 1998
0 Benham Target Maturities Trust: 2020 January 15, 1998
0 Benham Target Maturities Trust: 2025 January 15, 1998
AMERICAN CENTURY VARIABLE PORTFOLIOS, INC.
0 American Century VP Advantage January 15, 1998
0 American Century VP Balanced January 15, 1998
0 American Century VP Capital Appreciation January 15, 1998
0 American Century VP International January 15, 1998
0 American Century VP Income & Growth January 15, 1998
0 American Century VP Value January 15, 1998
AMERICAN CENTURY WORLD MUTUAL FUNDS, INC.
0 Twentieth Century Emerging Markets Fund January 15, 1998
0 Twentieth Century International Growth Fund January 15, 1998
0 Twentieth Century International Discovery Fund January 15, 1998
0 Twentieth Century Global Growth Fund December 1, 1998
<PAGE>
SCHEDULE B
Investor Class Funds
Fund Date of Agreement
- ---- -----------------
AMERICAN CENTURY CALIFORNIA TAX-FREE AND MUNICIPAL FUNDS
0 Benham California Municipal Money Market Fund January 15, 1998
0 Benham California High-Yield Municipal Fund January 15, 1998
0 Benham California Tax-Free Money Market Fund January 15, 1998
0 Benham California Limited Term Tax-Free Fund January 15, 1998
0 Benham California Intermediate-Term Tax-Free Fund January 15, 1998
0 Benham California Long-Term Tax-Free Fund January 15, 1998
0 Benham California Insured Tax-Free Fund January 15, 1998
AMERICAN CENTURY CAPITAL PORTFOLIOS, INC.
0 American Century Equity Income Fund1 January 15, 1998
0 American Century Real Estate Fund1 January 15, 1998
0 American Century Value Fund1 January 15, 1998
0 American Century Small Cap Value Fund July 30, 1998
0 American Century Equity Index Fund1 January 29, 1999
AMERICAN CENTURY GOVERNMENT INCOME TRUST
0 Benham Short-Term Treasury Fund1 January 15, 1998
0 Benham Intermediate-Term Treasury Fund1 January 15, 1998
0 Benham Long-Term Treasury Fund1 January 15, 1998
0 Benham Government Agency Money Market Fund1 January 15, 1998
0 Benham Short-Term Government Fund1 January 15, 1998
0 Benham GNMA Fund1 January 15, 1998
0 Benham Inflation-Adjusted Treasury Fund1 January 15, 1998
0 Benham Capital Preservation Fund January 15, 1998
AMERICAN CENTURY INTERNATIONAL BOND FUNDS
0 Benham International Bond Fund1 January 15, 1998
AMERICAN CENTURY INVESTMENT TRUST
0 Benham Prime Money Market Fund1 June 1, 1998
AMERICAN CENTURY MUNICIPAL TRUST
0 Benham Arizona Intermediate-Term Municipal Fund January 15, 1998
0 Benham Florida Municipal Money Market Fund January 15, 1998
0 Benham Florida Intermediate-Term Municipal Fund January 15, 1998
0 Benham Tax-Free Money Market Fund January 15, 1998
0 Benham Intermediate-Term Tax-Free Fund January 15, 1998
0 Benham Long-Term Tax-Free Fund January 15, 1998
0 Benham Limited-Term Tax-Free Fund January 15, 1998
0 Benham High-Yield Municipal Fund March 31, 1998
0 AMERICAN CENTURY MUTUAL FUNDS, INC.
0 American Century Balanced Fund1 January 15, 1998
0 Twentieth Century Growth Fund1 January 15, 1998
0 Twentieth Century Heritage Fund1 January 15, 1998
0 Benham Intermediate-Term Bond Fund1 January 15, 1998
0 Benham Limited-Term Bond Fund1 January 15, 1998
0 Benham Bond Fund1 January 15, 1998
0 Twentieth Century Select Fund1 January 15, 1998
0 Twentieth Century Ultra Fund1 January 15, 1998
0 Twentieth Century Vista Fund1 January 15, 1998
0 Twentieth Century Giftrust January 15, 1998
0 Twentieth Century New Opportunities Fund January 15, 1998
0 Benham High Yield Fund January 15, 1998
AMERICAN CENTURY PREMIUM RESERVES, INC.
0 Benham Premium Government Reserve Fund January 15, 1998
0 Benham Premium Capital Reserve Fund January 15, 1998
0 Benham Premium Bond Fund January 15, 1998
AMERICAN CENTURY QUANTITATIVE EQUITY FUNDS
0 American Century Equity Growth Fund1 January 15, 1998
0 American Century Income & Growth Fund1 January 15, 1998
0 American Century Global Gold Fund1 January 15, 1998
0 American Century Global Natural Resources Fund1 January 15, 1998
0 American Century Utilities Fund1 January 15, 1998
0 American Century Small Cap Quantitative Fund1 July 30, 1998
AMERICAN CENTURY STRATEGIC ASSET ALLOCATIONS, INC.
0 American Century Strategic Allocation: Aggressive1 January 15, 1998
0 American Century Strategic Allocation: Conservative January 15, 1998
0 American Century Strategic Allocation: Moderate1 January 15, 1998
AMERICAN CENTURY TARGET MATURITIES TRUST
0 Benham Target Maturities Trust: 20001 January 15, 1998
0 Benham Target Maturities Trust: 20051 January 15, 1998
0 Benham Target Maturities Trust: 20101 January 15, 1998
0 Benham Target Maturities Trust: 20151 January 15, 1998
0 Benham Target Maturities Trust: 20201 January 15, 1998
0 Benham Target Maturities Trust: 20251 January 15, 1998
AMERICAN CENTURY VARIABLE PORTFOLIOS, INC.
0 American Century VP Advantage January 15, 1998
0 American Century VP Balanced January 15, 1998
0 American Century VP Capital Appreciation January 15, 1998
0 American Century VP International January 15, 1998
0 American Century VP Income & Growth January 15, 1998
0 American Century VP Value January 15, 1998
AMERICAN CENTURY WORLD MUTUAL FUNDS, INC.
0 Twentieth Century Emerging Markets Fund1 January 15, 1998
0 Twentieth Century International Growth Fund1 January 15, 1998
0 Twentieth Century International Discovery Fund1 January 15, 1998
0 Twentieth Century Global Growth Fund1 December 1, 1998
- ----------
(1) Multiple Classes of Shares
<PAGE>
SCHEDULE C
Institutional Class Funds
Fund Date of Agreement
- ---- -----------------
AMERICAN CENTURY CAPITAL PORTFOLIOS, INC.
0 American Century Equity Income Fund January 15, 1998
0 American Century Real Estate Fund January 15, 1998
0 American Century Value Fund January 15, 1998
0 American Century Small Cap Value Fund July 30, 1998
0 American Century Equity Index Fund January 29, 1999
AMERICAN CENTURY MUTUAL FUNDS, INC.
0 American Century Balanced Fund January 15, 1998
0 Twentieth Century Growth Fund January 15, 1998
0 Twentieth Century Heritage Fund January 15, 1998
0 Twentieth Century Select Fund January 15, 1998
0 Twentieth Century Ultra Fund January 15, 1998
0 Twentieth Century Vista Fund January 15, 1998
AMERICAN CENTURY QUANTITATIVE EQUITY FUNDS
0 American Century Equity Growth Fund January 15, 1998
0 American Century Income & Growth Fund January 15, 1998
0 American Century Small Cap Quantitative Fund July 30, 1998
AMERICAN CENTURY WORLD MUTUAL FUNDS, INC.
0 Twentieth Century Emerging Markets Fund January 15, 1998
0 Twentieth Century International Growth Fund January 15, 1998
0 Twentieth Century International Discovery Fund January 15, 1998
0 Twentieth Century Global Growth Fund December 1, 1998
<PAGE>
SCHEDULE D
Service Class Funds
Fund Date of Agreement
- ---- -----------------
AMERICAN CENTURY CAPITAL PORTFOLIOS, INC.
0 American Century Equity Income Fund January 15, 1998
0 American Century Real Estate Fund January 15, 1998
0 American Century Value Fund January 15, 1998
AMERICAN CENTURY MUTUAL FUNDS, INC.
0 American Century Balanced Fund January 15, 1998
0 Twentieth Century Growth Fund January 15, 1998
0 Twentieth Century Heritage Fund January 15, 1998
0 Benham Intermediate-Term Bond Fund January 15, 1998
0 Benham Limited-Term Bond Fund January 15, 1998
0 Benham Bond Fund January 15, 1998
0 Twentieth Century Select Fund January 15, 1998
0 Twentieth Century Ultra Fund January 15, 1998
0 Twentieth Century Vista Fund January 15, 1998
AMERICAN CENTURY STRATEGIC ASSET ALLOCATIONS, INC.
0 American Century Strategic Allocation: Aggressive January 15, 1998
0 American Century Strategic Allocation: Conservative January 15, 1998
0 American Century Strategic Allocation: Moderate January 15, 1998
AMERICAN CENTURY WORLD MUTUAL FUNDS, INC.
0 Twentieth Century Emerging Markets Fund January 15, 1998
0 Twentieth Century International Growth Fund January 15, 1998
0 Twentieth Century International Discovery Fund January 15, 1998
<PAGE>
SCHEDULE E
Advisor Class Funds
Fund Date of Agreement
- ---- -----------------
AMERICAN CENTURY CAPITAL PORTFOLIOS, INC.
0 American Century Equity Income Fund January 15, 1998
0 American Century Value Fund January 15, 1998
0 American Century Real Estate Fund January 15, 1998
0 American Century Small Cap Value Fund July 30, 1998
AMERICAN CENTURY GOVERNMENT INCOME TRUST
0 Benham Short-Term Treasury Fund January 15, 1998
0 Benham Intermediate-Term Treasury Fund January 15, 1998
0 Benham Long-Term Treasury Fund January 15, 1998
0 Benham Government Agency Money Market Fund January 15, 1998
0 Benham Short-Term Government Fund January 15, 1998
0 Benham GNMA Fund January 15, 1998
0 Benham Inflation-Adjusted Treasury Fund January 15, 1998
AMERICAN CENTURY INTERNATIONAL BOND FUNDS
0 Benham International Bond Fund January 15, 1998
AMERICAN CENTURY MUTUAL FUNDS, INC.
0 American Century Balanced Fund January 15, 1998
0 Twentieth Century Growth Fund January 15, 1998
0 Twentieth Century Heritage Fund January 15, 1998
0 Benham Intermediate-Term Bond Fund January 15, 1998
0 Benham Limited-Term Bond Fund January 15, 1998
0 Benham Bond Fund January 15, 1998
0 Twentieth Century Select Fund January 15, 1998
0 Twentieth Century Ultra Fund January 15, 1998
0 Twentieth Century Vista Fund January 15, 1998
0 Benham High Yield Fund January 15, 1998
AMERICAN CENTURY QUANTITATIVE EQUITY FUNDS
0 American Century Equity Growth Fund January 15, 1998
0 American Century Income & Growth Fund January 15, 1998
0 American Century Global Gold Fund January 15, 1998
0 American Century Global Natural Resources Fund January 15, 1998
0 American Century Utilities Fund January 15, 1998
0 American Century Small Cap Quantitative Fund July 30, 1998
AMERICAN CENTURY STRATEGIC ASSET ALLOCATIONS, INC.
0 American Century Strategic Allocation: Aggressive January 15, 1998
0 American Century Strategic Allocation: Conservative January 15, 1998
0 American Century Strategic Allocation: Moderate January 15, 1998
AMERICAN CENTURY TARGET MATURITIES TRUST
0 Benham Target Maturities Trust: 2000 January 15, 1998
0 Benham Target Maturities Trust: 2005 January 15, 1998
0 Benham Target Maturities Trust: 2010 January 15, 1998
0 Benham Target Maturities Trust: 2015 January 15, 1998
0 Benham Target Maturities Trust: 2020 January 15, 1998
0 Benham Target Maturities Trust: 2025 January 15, 1998
AMERICAN CENTURY WORLD MUTUAL FUNDS, INC.
0 Twentieth Century Emerging Markets Fund January 15, 1998
0 Twentieth Century International Growth Fund January 15, 1998
0 Twentieth Century International Discovery Fund January 15, 1998
0 Twentieth Century Global Growth Fund December 1, 1998
AMERICAN CENTURY INVESTMENT TRUST
0 Benham Prime Money Market Fund June 1, 1998
</TABLE>
DAVID H. REINMILLER
Attorney At Law
4500 Main Street, P.O. Box 418210
Kansas City, Missouri 64141-9210
Telephone (816)340-4046
Telecopier (816)340-4964
November 25, 1998
American Century Capital Portfolios, Inc.
American Century Tower
4500 Main Street
Kansas City, Missouri 64111
Ladies and Gentlemen:
As counsel to American Century Capital Portfolios, Inc., I am generally
familiar with its affairs. Based upon this familiarity, and upon the examination
of such documents as I have deemed relevant, it is my opinion that the shares of
the Corporation described in Post-Effective Amendment No. 13 to its Registration
Statement on Form N-1A to be filed with the Securities and Exchange Commission
on November 25, 1998, will, when issued, be validly issued, fully paid and
nonassessable.
For the record, it should be stated that I am an officer and employee of
American Century Services Corporation, an affiliated corporation of American
Century Investment Management, Inc., the investment adviser of American Century
Capital Portfolios, Inc.
I hereby consent to the use of this opinion as an exhibit to Post-Effective
Amendment No. 13.
Very truly yours,
/s/David H. Reinmiller
David H. Reinmiller
AMENDMENT NO. 5 TO MULTIPLE CLASS PLAN
OF
AMERICAN CENTURY CAPITAL PORTFOLIOS, INC.
AMERICAN CENTURY MUTUAL FUNDS, INC.
AMERICAN CENTURY STRATEGIC ASSET ALLOCATIONS, INC.
AMERICAN CENTURY WORLD MUTUAL FUNDS, INC.
THIS AMENDMENT NO. 5 TO MULTIPLE CLASS PLAN is made as of the 29th day
of January, 1999, by each of the above named corporations (the "Issuers").
Capitalized terms not otherwise defined herein shall have the meaning ascribed
to them in the Multiple Class Plan.
RECITALS
WHEREAS, the Issuers are parties to a certain Multiple Class Plan dated
as of May 31, 1996, as amended by that certain Amendment No. 4 dated as of
November 13, 1998, (the "Plan"); and
WHEREAS, American Century Capital Portfolios, Inc., has added a series,
American Century Equity Index Fund (the "Fund"), offering multiple classes; and
WHEREAS, the parties desire to amend the Plan to adopt the Plan on
behalf of the Fund.
NOW, THEREFORE, in consideration of the mutual promises set forth
herein, the parties hereto agree as follows:
1. American Century Capital Portfolios, Inc. hereby adopts the Plan on
behalf of the Fund, in accordance with Rule 18f-3 under the 1940 Act and on the
terms and conditions contained in the Plan.
2. Schedule A to the Plan is hereby amended by deleting the text
thereof in its entirety and inserting in lieu therefor the Schedule A attached
hereto.
3. After the date hereof, all references to the Plan shall be deemed to
mean the Multiple Class Plan, as amended by Amendment No. 5.
5. In the event of a conflict between the terms of this Amendment No.5
and the Plan, it is the intention of the parties that the terms of this
Amendment No. 5 shall control and the Plan shall be interpreted on that basis.
To the extent the provisions of the Plan have not been amended by this Amendment
No. 5, the parties hereby confirm and ratify the Plan.
6. This Amendment No. 5 may be executed in two or more counterparts,
each of which shall be an original and all of which together shall constitute
one instrument.
IN WITNESS WHEREOF, the undersigned have executed this Amendment No. 5
as of the date first above written.
AMERICAN CENTURY CAPITAL PORTFOLIOS, INC.
AMERICAN CENTURY MUTUAL FUNDS, INC.
AMERICAN CENTURY STRATEGIC ASSET
ALLOCATIONS, INC.
AMERICAN CENTURY WORLD MUTUAL FUNDS, INC.
BY: /s/ Patrick A. Looby
Patrick A. Looby
Vice President of each of the Issuers
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE A
Companies and Funds Covered by this Multiclass Plan
- --------------------------------------------------------------- ------------ -------------------- -------------- -------------------
Investor Institutional Services Advisor
Fund Class Class Class Class
- --------------------------------------------------------------- ------------ -------------------- -------------- -------------------
<S> <C> <C> <C> <C>
AMERICAN CENTURY CAPITAL PORTFOLIOS, INC.
American Century Equity Income Fund Yes Yes Yes Yes
American Century Value Fund Yes Yes Yes Yes
American Century Real Estate Fund Yes Yes No Yes
American Century Small Cap Value Fund Yes Yes No Yes
American Century Equity Index Fund Yes Yes No No
- --------------------------------------------------------------- ------------ -------------------- -------------- -------------------
AMERICAN CENTURY MUTUAL FUNDS, INC.
American Century Balanced Fund Yes Yes Yes Yes
Twentieth Century Growth Fund Yes Yes Yes Yes
Twentieth Century Heritage Fund Yes Yes Yes Yes
Benham Intermediate-Term Bond Fund Yes No Yes Yes
Benham Limited-Term Bond Fund Yes No Yes Yes
Benham Bond Fund Yes No Yes Yes
Twentieth Century Select Fund Yes Yes Yes Yes
Twentieth Century Ultra Fund Yes Yes Yes Yes
Twentieth Century Vista Fund Yes Yes Yes Yes
Twentieth Century Giftrust Yes No No No
Twentieth Century New Opportunities Fund Yes No No No
Benham High-Yield Fund Yes No No Yes
- --------------------------------------------------------------- ------------ -------------------- -------------- -------------------
AMERICAN CENTURY STRATEGIC ASSET ALLOCATIONS, INC.
American Century Strategic Allocation: Aggressive Yes No Yes Yes
American Century Strategic Allocation: Conservative Yes No Yes Yes
American Century Strategic Allocation: Moderate Yes No Yes Yes
- --------------------------------------------------------------- ------------ -------------------- -------------- -------------------
AMERICAN CENTURY WORLD MUTUAL FUNDS, INC.
Twentieth Century International Growth Fund Yes Yes Yes Yes
Twentieth Century International Discovery Fund Yes Yes Yes Yes
Twentieth Century Emerging Markets Fund Yes Yes Yes Yes
Twentieth Century Global Growth Fund Yes Yes No Yes
- --------------------------------------------------------------- ------------ -------------------- -------------- -------------------
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF AMERICAN CENTURY CAPITAL PORTFOLIOS, INC. AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH REPORT. INFORMATION PRESENTED IS A TOTAL OF ALL
CLASSES, EXCEPT WHERE SUCH PRESENTATION IS NOT POSSIBLE(SUCH AS PER SHARE DATA).
IN THOSE CASES, ONLY THE INVESTOR CLASS INFORMATION IS PRESENTED.
</LEGEND>
<CIK> 0000908186
<NAME> AMERICAN CENTURY CAPITAL PORTFOLIOS, INC.
<SERIES>
<NUMBER> 1
<NAME> AMERICAN CENTURY EQUITY INDEX FUND
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-END> MAR-31-1998
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 0
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 0
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 0
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 0
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0.00
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0.00
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0.00
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
