SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
-----
File No. 33-65170:
Pre-Effective Amendment No.____
Post-Effective Amendment No._5_
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
-----
File No. 811-7822:
Amendment No._6_
AMERICAN CENTURY INVESTMENT TRUST
(Exact Name of Registrant as Specified in Charter)
4500 Main Street, Kansas City, MO 64111
(Address of Principal Executive Offices)
Registrant's Telephone Number, including Area Code: (816) 531-5575
Douglas A. Paul
Vice President, Secretary
and General Counsel
1665 Charleston Road, Mountain View, CA 94043
(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering: Immediately, upon effectiveness
(first offered 11/17/93)
It is proposed that this filing become effective:
_____ immediately upon filing pursuant to paragraph (b) of Rule 485
__X__ on July 1, 1997 pursuant to paragraph (b) of Rule 485
_____ 60 days after filing pursuant to paragraph (a) of Rule 485
_____ on (date) pursuant to paragraph (a)(1) 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
- --------------------------------------------------------------------------------
Registrant has elected to register an indefinite number of shares of beneficial
interest under the Securities Act of 1933 pursuant to Rule 24f-2 under the
Investment Company Act of 1940. On April 11, 1997, the Registrant filed a Rule
24f-2 Notice on Form 24f-2 with respect to its fiscal year ended February 28,
1997.
<PAGE>
AMERICAN CENTURY INVESTMENT TRUST
1933 Act Post-Effective Amendment No. 5
1940 Act Amendment No. 6
FORM N-1A
CROSS-REFERENCE SHEET
PART A: PROSPECTUS
ITEM PROSPECTUS CAPTION
1 Cover Page
2 Transaction and Operating Expense Table
3 Financial Highlights, Performance Advertising
4 Management, Further Information About American Century, Investment
Objective of the Fund, Investment Policies of the Fund, Risk Factors
and Investment Techniques, Other Investment Practices, Their
Characteristics and Risks
5 Management
5A Not Applicable
6 Further Information About American Century, How to Redeem Shares,
Cover Page, Distributions, Taxes
7 Cover Page, Distribution of Fund Shares, How to Open an Account, Share
Price, Transfer and Administrative Services
8 How to Redeem Shares, Transfer and Administrative Services
9 Not Applicable
PART B: STATEMENT OF ADDITIONAL INFORMATION
ITEM STATEMENT OF ADDITIONAL INFORMATION CAPTION
10 Cover Page
11 Table of Contents
12 Not Applicable
13 Investment Policies and Techniques, Investment Restrictions, Portfolio
Transactions
14 Trustees and Officers
15 Additional Purchase and Redemption Information, Trustees and Officers
16 Investment Management, Transfer and Administrative Services, Expense
Limitation Agreement, About the Trust
17 Portfolio Transactions
18 About the Trust
19 Additional Purchase and Redemption Information, Valuation of Portfolio
Securities
20 Taxes
21 Additional Purchase and Redemption Information
22 Performance
23 Cover Page
<PAGE>
PROSPECTUS
[american century logo]
American
Century(sm)
JULY 1, 1997
BENHAM
GROUP(R)
Prime Money Market
[front cover]
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(R) American Century Group Twentieth Century(R) Group
MONEY MARKET FUNDS ASSET ALLOCATION &
GOVERNMENT BOND FUNDS BALANCED FUNDS GROWTH FUNDS
DIVERSIFIED BOND FUNDS CONSERVATIVE EQUITY FUNDS INTERNATIONAL FUNDS
MUNICIPAL BOND FUNDS SPECIALTY FUNDS
Prime Money
Market
PROSPECTUS
JULY 1, 1997
PRIME MONEY MARKET
AMERICAN CENTURY INVESTMENT TRUST
American Century Investment Trust 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 of the money market funds
from our Benham Group, American Century--Benham Prime Money Market Fund (the
"Fund"), is described in this Prospectus. Its investment objective is listed on
page 2 of the Prospectus. The other funds are described in separate
prospectuses.
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 July 1, 1997, and filed with the Securities and Exchange
Commission ("SEC"). 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
Internet: 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).
INVESTMENTS IN THE FUND ARE NOT INSURED, NOR ARE THEY GUARANTEED BY THE
U.S. GOVERNMENT OR ANY OTHER AGENCY. THERE IS NO ASSURANCE THAT THE FUND WILL
BE ABLE TO MAINTAIN A $1.00 SHARE PRICE.
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.
Prospectus 1
INVESTMENT OBJECTIVE OF THE FUND
AMERICAN CENTURY-BENHAM
PRIME MONEY MARKET FUND
The Fund's investment objective is to seek the highest level of current
income consistent with preservation of capital.
The Fund buys high-quality, U.S. dollar-denominated money market
instruments and other short-term obligations of banks, governments and
corporations.
INVESTMENTS IN THE FUND ARE NOT INSURED NOR ARE THEY GUARANTEED BY THE
U.S. GOVERNMENT OR ANY OTHER AGENCY. THERE IS NO ASSURANCE THAT THE FUND WILL
BE ABLE TO MAINTAIN A $1.00 SHARE PRICE.
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.
2 Investment Objective American Century Investments
TABLE OF CONTENTS
Investment Objective of the Fund...............................................2
Transaction and Operating Expense Table........................................4
Financial Highlights...........................................................5
INFORMATION REGARDING THE FUND
Investment Policies of the Fund................................................6
Investment Objective........................................................6
Eligible Investments........................................................6
Portfolio Investment Quality and
Maturity Criteria........................................................6
Diversification.............................................................7
Industry Concentration......................................................7
Risk Factors and Investment Techniques.........................................7
Corporate Obligations.......................................................7
Bank Obligations............................................................8
Government Obligations......................................................8
Variable and Floating-Rate Instruments......................................8
Rule 144A Securities........................................................9
U.S. Dollar-Denominated Foreign Securities..................................9
Other Investment Practices, Their Characteristics
and Risks...................................................................9
Repurchase Agreements.......................................................9
When-Issued and Forward Commitment
Agreements...............................................................9
Borrowing..................................................................10
Other Techniques..............................................................10
Performance Advertising.......................................................10
HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS
American Century Investments..................................................11
Investing in American Century.................................................11
How to Open an Account........................................................11
By Mail..................................................................11
By Wire..................................................................11
By Exchange..............................................................12
In Person................................................................12
Subsequent Investments.....................................................12
By Mail..................................................................12
By Telephone.............................................................12
By Online Access.........................................................12
By Wire..................................................................12
In Person................................................................12
Automatic Investment Plan..................................................12
How to Exchange from One Account to Another ..................................12
By Mail .................................................................13
By Telephone.............................................................13
By Online Access.........................................................13
How to Redeem Shares..........................................................13
By Mail..................................................................13
By Telephone ............................................................13
By Check-A-Month.........................................................13
Other Automatic Redemptions..............................................13
Redemption Proceeds........................................................13
By Check.................................................................13
By Wire and ACH..........................................................13
Redemption of Shares in Low-Balance Accounts...............................14
Signature Guarantee...........................................................14
Special Shareholder Services..................................................14
Automated Information Line...............................................14
Online Account Access....................................................14
CheckWriting.............................................................14
Tax-Qualified Retirement Plans...........................................15
Important Policies Regarding Your Investments.................................15
Reports to Shareholders.......................................................16
Employer-Sponsored Retirement Plans and
Institutional Accounts.....................................................16
ADDITIONAL INFORMATION YOU SHOULD KNOW
Share Price...................................................................17
When Share Price Is Determined.............................................17
How Share Price Is Determined..............................................17
Where to Find Yield Information ...........................................18
Distributions.................................................................18
Taxes.........................................................................18
Tax-Deferred Accounts......................................................18
Taxable Accounts...........................................................18
Management....................................................................19
Investment Management......................................................19
Code of Ethics.............................................................19
Transfer and Administrative Services.......................................20
Special Meeting of Shareholders............................................20
Distribution of Fund Shares...................................................21
Expenses......................................................................21
Further Information About American Century....................................22
Prospectus Table of Contents 3
TRANSACTION AND OPERATING EXPENSE TABLE
Prime Money Market
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:(2)
(as a percentage of average net assets)
Management Fees (net of expense limitation)....................... .18%
12b-1 Fees........................................................ none
Other Expenses.................................................... .32%
Total Fund Operating Expenses (net of expense limitation)......... .50%
EXAMPLE:
You would pay the following expenses on a 1 year $ 5
$1,000 investment, assuming a 5% annual return and 3 years 16
redemption at the end of each time period: 5 years 28
10 years 63
(1) Redemption proceeds sent by wire are subject to a $10 processing fee.
(2) Benham Management Corporation (the "Manager") has agreed to limit the
Fund's total operating expenses to a specified percentage of the Fund's
average daily net assets. The agreement provides that the Manager may
recover amounts absorbed on behalf of the Fund during the preceding 11
months if, and to the extent that, for any given month, Fund expenses
were less than the expense limit in effect at that time. The current
expense limitation for the Fund is .50%. This expense limitation expires
on May 31, 1998. If the expense limitation was not in effect, the Fund's
Management Fee, Other Expenses and Total Fund Operating Expenses would be
as follows, respectively: .31%, .32% and .63%. On July 30, 1997,
shareholders of the Fund will consider a new Management Agreement which
would change the Fund's Management Fees, Other Expenses and Total Fund
Operating Expenses. See "Special Meeting of Shareholders" on page 20 for
more information.
The Fund pays the Manager advisory fees equal to an annualized percentage
of the Fund's average daily net assets. Other expenses include administrative
and transfer agent fees paid to American Century Services Corporation.
The purpose of the above 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 shares of the Fund. 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.
4 Transaction and Operating Expense Table American Century Investments
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
PRIME MONEY MARKET
The Financial Highlights for each of the periods presented have been
audited by KPMG Peat Marwick LLP, independent auditors, whose report thereon
appears in the Fund's annual report, which is incorporated by reference into the
Statement of Additional Information. The semiannual and annual reports contain
additional performance information and will be made available upon request and
without charge. The information presented is for a share outstanding throughout
the years ended February 28, except as noted.
1997 1996(1) 1995 1994(2)
PER-SHARE DATA
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period............................ $1.00 $1.00 $1.00 $1.00
---------- ---------- ---------- ----------
Income from Investment Operations
Net Investment Income........................................ 0.05 0.06 0.05 0.01
---------- ---------- ---------- ----------
Distributions
From Net Investment Income................................... (0.05) (0.06) (0.05) (0.01)
---------- ---------- ---------- ----------
Net Asset Value, End of Period.................................. $1.00 $1.00 $1.00 $1.00
========== ========== ========== ==========
TOTAL RETURN(3).............................................. 5.04% 5.60% 4.93% 0.96%
RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses to Average Net Assets(4)......... 0.50% 0.48% 0.04% -
Ratio of Operating Expenses to Average Net Assets
(Before Expense Waiver)(4)................................. 0.63% 0.62% 0.71% 1.49%(5)
Ratio of Net Investment Income to Average Net Assets......... 4.92% 5.43% 5.28% 3.35%(5)
Ratio of Net Investment Income to Average Net Assets
(Before Expense Waiver).................................... 4.79% 5.29% 4.61% 1.86%(5)
Net Assets, End of Period (in thousands)..................... $1,211,990 $1,270,653 $1,509,863 $75,168
(1) Year Ended February 29, 1996.
(2) November 17, 1993 (inception) through February 28, 1994.
(3) Total return assumes reinvestment of dividends. Total return for periods
less than one year are not annualized.
(4) The ratios for periods subsequent to February 28, 1995, include expenses
paid through expense offset arrangements.
(5) Annualized.
</TABLE>
Prospectus Financial Highlights 5
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 its 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.
For an explanation of the securities ratings referred to in the following
discussion, see "Other Information" in the Statement of Additional Information.
INVESTMENT OBJECTIVE
The Fund's investment objective is to seek the highest level of current
income consistent with preservation of capital. The Fund seeks to maintain a
$1.00 share price, although there is no guarantee it will be able to do so.
Shares of the Fund are neither insured nor guaranteed by the U.S. government. As
with any mutual fund, there is no guarantee that the Fund will achieve its
investment objective.
ELIGIBLE INVESTMENTS
The Fund buys high-quality ("first-tier"), U.S. dollar-denominated money
market instruments and other short-term obligations of banks, governments, and
corporations. Some of the Fund's possible investments are listed in the
following table. The obligations referenced in the table and the risks
associated with investing in them are described in the section titled "Risk
Factors and Investment Techniques," which begins on page 7.
- -----------------------------------------------------------------------------
ISSUERS TYPES OF OBLIGATIONS
- -----------------------------------------------------------------------------
Domestic and foreign financial Negotiable certificates
of institutions (e.g., banks, broker- deposit, bankers' acceptances,
dealers, insurance companies, bank notes, and commercial
leasing and financing corporations) paper (including floating-rate
agency securities)
- -----------------------------------------------------------------------------
Domestic and foreign Commercial paper and short-
nonfinancial corporations term corporate debt obligations
(including fixed- and
variable-rate notes and
bonds)
- -----------------------------------------------------------------------------
U.S. government and its U.S. Treasury bills, notes,
agencies and instrumentalities bonds, and U.S. government
agency obligations (including
floating-rate agency securities)
- -----------------------------------------------------------------------------
Foreign governments Commercial paper and
and their agencies and discount notes
instrumentalities
- -----------------------------------------------------------------------------
PORTFOLIO INVESTMENT QUALITY
AND MATURITY CRITERIA
The Manager follows regulatory guidelines on quality and maturity for the
Fund's investments, which are designed to help maintain a stable $1.00 share
price. In particular, the Fund:
(1) Buys only U.S. dollar-denominated obligations with remaining maturities of
13 months or less (and variable- and floating-rate obligations with demand
features that effectively shorten their maturities to 13 months or less);
(2) Maintains a dollar-weighted average portfolio maturity of 90 days or less;
(3) Restricts its investments to high-quality obligations determined by the
Manager to present minimal credit risks, pursuant to guidelines established
by the Board of Trustees.
To be considered high-quality, an obligation must be one of the following:
6 Information Regarding the Fund American Century Investments
(1) A U.S. government obligation;
(2) Rated (or issued by an issuer rated with respect to a class of short-term
debt obligations) within the two highest rating categories for short-term
debt obligations by at least two nationally recognized statistical rating
organizations ("rating agencies") (or one if only one has rated the
obligation);
(3) An unrated obligation judged by the Manager, pursuant to guidelines
established by the Board of Trustees, to be of comparable quality.
The Fund intends to buy only obligations which are designated as first-tier
securities as defined by the SEC; that is, securities with the highest rating.
The acquisition of securities that are unrated or rated by only one rating
agency must be approved or ratified by the Board of Trustees.
DIVERSIFICATION
In order to reduce investment risks, the Manager is required by law to
diversify the Fund's investment portfolio. As a general rule, the Manager may
not invest more than 5% of the Fund's total assets in securities issued by a
single institution. In addition, the Fund must also limit its investments in
securities subject to puts of a single institution.
This policy does not apply to U.S. government securities, in which the
Fund may invest without limitation. See the Statement of Additional
Information for a more detailed description.
INDUSTRY CONCENTRATION
Under normal market conditions, 25% or more of the Fund's total assets are
invested in obligations of issuers in the financial services industry. This
industry concentration reflects that of the markets in which the Fund invests.
More than half of the markets' commercial paper is issued by companies or
organizations in the financial services industry.
For temporary defensive purposes, less than 25% of the Fund's total assets
may be invested in obligations of issuers in the financial services industry.
The Manager will not invest more than 25% of the Fund's total assets in any
other industry.
RISK FACTORS AND INVESTMENT TECHNIQUES
The Fund may be appropriate for investors who seek to (1) earn income at
current money market rates while preserving their investments; (2) use the Fund
as part of a long-term, balanced investment portfolio consisting of money market
instruments, bonds, and stocks; or (3) use the Fund to place investment monies
as part of a dollar-cost averaging investment program.
Because the Fund emphasizes stability, it will not generate as much income
as a bond fund. No single fund constitutes a balanced investment plan.
Corporations and governments address their short-term borrowing and
cash-flow management needs in a highly liquid, worldwide financial market called
the "money market." The following is a brief description of the types of money
market instruments the Fund may buy.
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.
Prospectus Information Regarding the Fund 7
The Fund may purchase corporate notes and bonds with remaining maturities
of 13 months or less in the secondary market provided that each of these
securities has characteristics consistent with regulatory requirements for money
market funds.
BANK OBLIGATIONS
Negotiable certificates of deposit (CDs) evidence a bank's obligation to
repay money deposited with it for a specified period of time. The table below
identifies the types of CDs the Fund may buy.
- -----------------------------------------------------------------------------
CD TYPE ISSUER
- -----------------------------------------------------------------------------
Domestic Domestic offices of U.S.
banks
- -----------------------------------------------------------------------------
Yankee U.S. branches of foreign
banks
- -----------------------------------------------------------------------------
Eurodollar Issued in London by U.S.,
Canadian, European, and
Japanese banks
- -----------------------------------------------------------------------------
Schedule B Canadian subsidiaries of
non-Canadian banks
- -----------------------------------------------------------------------------
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 U.S. 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 "MLI"s) 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.
VARIABLE AND FLOATING-RATE INSTRUMENTS
Variable- and floating-rate instruments are issued by corporations,
financial institutions, and government agencies and instrumentalities.
Floating-rate instruments have interest rates that change whenever there is
a change in a designated base rate, whereas variable-rate instruments provide
for specified periodic interest rate adjustments. The interest rate on variable-
and floating-rate instruments is ordinarily determined by reference to (or is a
percentage of) an objective standard, such as the Federal Funds effective rate,
the 90-day U.S. Treasury bill rate, or LIBOR.
Although the Fund typically limits its investments to securities with
remaining maturities of 13 months or less, it may invest in variable- and
floating-rate instruments that have nominal (or stated) maturities in excess of
13 months, provided that such instruments (1) have demand features consistent
with regulatory requirements for money market funds, or (2)
8 Information Regarding the Fund American Century Investments
are securities issued by the U.S. government or a U.S. government agency that
meet certain regulatory requirements for money market funds.
RULE 144A SECURITIES
The Funds may, from time to time, purchase Rule 144A securities when they
present attractive investment opportunities that otherwise meet the Fund's
criteria for selection. Rule 144A securities are securities that are privately
placed with and traded among qualified institutional buyers rather than the
general public. Although Rule 144A securities are considered "restricted
securities," they are not necessarily illiquid.
With respect to securities eligible for resale under Rule 144A, the staff
of the SEC has taken the position that the liquidity of such securities in the
portfolio of a fund offering redeemable securities is a question of fact for the
Board of Trustees to determine, such determination to be based upon a
consideration of the readily available trading markets and the review of any
contractual restrictions. The staff also acknowledges that while the Board
retains ultimate responsibility, it may delegate this function to the Manager.
Accordingly, the Board of Trustees has established guidelines and procedures for
determining the liquidity of Rule 144A securities and has delegated the
day-to-day function of determining the liquidity of Rule 144A securities to the
Manager. The Board retains the responsibility to monitor the implementation of
the guidelines and procedures it has adopted.
Since the secondary market for such securities is limited to certain
qualified institutional investors, the liquidity of such securities may be
limited accordingly and the Fund may, from time to time, hold a Rule 144A
security that is illiquid. In such an event, the Fund's Manager will consider
appropriate remedies to minimize the effect on its liquidity. The Fund may not
invest more than 10% of its net assets in illiquid securities (securities that
may not be sold within seven days at approximately the price used in determining
the net asset value of Fund shares).
U.S. DOLLAR-DENOMINATED FOREIGN SECURITIES
The Fund invests exclusively in U.S. dollar-denominated instruments, some
of which may be issued by foreign entities as described in the table on page 6.
Consequently, the Fund may be subject to risks different than those incurred by
a fund that invests only in debt obligations of domestic issuers.
Currently, the only securities held outside the United States in which the
Fund expects to invest are EuroCDs, which are held in England. As a result, the
Fund's exposure to these foreign investment risks is expected to be lower than
funds which invest more broadly in securities held outside the United States.
Regulatory limits specified in the section titled "Portfolio Investment Quality
and Maturity Criteria" on page 6 apply equally to securities of foreign and
domestic issuers.
OTHER INVESTMENT PRACTICES, THEIR CHARACTERISTICS
AND RISKS
For additional information regarding the investment practices of the Fund,
see the Fund's Statement of Additional Information.
REPURCHASE AGREEMENTS
The Fund may enter into repurchase agreements, collateralized by U.S.
government securities, with banks or broker-dealers that are deemed to present
minimum credit risk. A repurchase agreement involves the purchase of a security
and a simultaneous agreement to sell the security back to the seller at a higher
price. At the direction of the Board of Trustees, the Manager has established
procedures to minimize potential losses due to credit risk. Delays or losses
could result if the other party to the agreement defaults or becomes bankrupt.
WHEN-ISSUED AND FORWARD COMMITMENT
AGREEMENTS
The Fund may sometimes purchase new issues of securities on a when-issued
or forward commitment basis when, in the opinion of the Manager, such purchases
will further the investment objective of the Fund. The price of when-issued
securities is established at the time the commitment to purchase is made.
Delivery of and payment for these securities typically occurs 1 to 7 days after
the commitment to purchase. Market rates of interest on debt securities at the
time of delivery may be higher or lower than those contracted for on the
when-issued security. Accordingly, the value of the security may decline prior
to delivery, which could result in a loss to the Fund. A separate account for
the Fund consisting of
Prospectus Information Regarding the Fund 9
cash or appropriate liquid securities in an amount at least equal to the
when-issued commitments will be established and maintained with the custodian.
No income will accrue to the Fund prior to delivery.
BORROWING
The Fund may borrow money only for temporary or emergency purposes.
Borrowings are not expected to exceed 5% of the Fund's total assets.
OTHER TECHNIQUES
The Manager may buy other types of securities or employ other portfolio
management techniques on behalf of the Fund including reverse repurchase
agreements. When SEC guidelines require it to do so, the Fund will set aside
cash or appropriate liquid assets in a segregated account to cover the Fund's
obligations.
PERFORMANCE ADVERTISING
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, yield and
effective yield.
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 a fund's cumulative total return over the same period if the
fund's performance had remained constant throughout.
A quotation of yield reflects the Fund's income over a stated period
expressed as a percentage of its share price. Yield is calculated by measuring
the income generated by an investment in the Fund over a seven-day period (net
of Fund expenses). This income is then annualized, that is, the amount of income
generated by the investment over the seven-day period is assumed to be generated
over each similar period each week throughout a full year and is shown as a
percentage of the investment. The effective yield is calculated in a similar
manner but, when annualized, the income earned by the investment is assumed to
be reinvested. The effective yield will be slightly higher than the yield
because of the compounding effect on the assumed reinvestment.
Yields are calculated according to accounting methods that are standardized
in accordance with SEC rules. Because yield accounting methods differ from the
methods used for other accounting purposes, a Fund's yield may not equal the
income paid on its shares or the income reported in the Fund's financial
statements.
The Fund may also 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 or IBC's Money Fund Report) 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 IBC's Money Fund Average and Bank Rate Monitor
National Index of 21/2-year CD rates. Fund performance may also be compared, on
a relative basis, to the other funds in our fund family. This relative
comparison, which may be based upon historical or expected fund performance,
volatility or other fund characteristics, may be presented numerically,
graphically or in text. Fund performance may also 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.
10 Information Regarding the Fund American Century Investments
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.
INVESTING IN AMERICAN CENTURY
The following section explains 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 16.
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 is $2,500 ($1,000 for IRA accounts).
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:
o RECEIVING BANK AND ROUTING NUMBER:
Commerce Bank, N.A. (101000019)
o BENEFICIARY (BNF):
American Century Services Corporation
4500 Main St., Kansas City, Missouri 64111
o BENEFICIARY ACCOUNT NUMBER (BNF ACCT):
2804918
o 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.
o ORIGINATOR TO BENEFICIARY (OBI):
Name and address of owner of account into which you are investing.
o BANK TO BANK INFORMATION
(BBI OR FREE FORM TEXT):
o Taxpayer identification or Social Security number
o If more than one account, account numbers and amount to be invested in
each account.
Prospectus How to Invest with American Century Investments 11
o Current tax year, previous tax year or rollover designation if an IRA.
Specify whether 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
this page 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" on this page) or by
any of the methods below. The minimum investment requirement for subsequent
investments: $250 for checks submitted without the investment slip portion of a
previous statement or confirmation, $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
Once your account is open, you may make investments by telephone if you
have authorized us (by choosing "Full Services" on your application) to draw on
your bank account. You may call an Investor Services Representative or use our
Automated Information Line.
BY ONLINE ACCESS
Once your account is open, you may make investments online if you have
authorized us (by choosing "Full Services" on your application) to draw on your
bank account.
BY WIRE
You may make subsequent investments by wire. Follow the wire transfer
instructions on page 11 and indicate your account number.
IN PERSON
You may make subsequent investments in person at one of our Investor
Centers. The locations of our four Investor Centers are listed on this page.
AUTOMATIC INVESTMENT PLAN
You may elect on your application to make investments automatically by
authorizing us to 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 one of our Investor Services Representatives.
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. An exchange request will be processed as of
the same day it is received if it is received before the funds' 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 17.
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
12 How to Invest with American Century Investments American Century Investments
in the amount of at least $50 per month. See our Investor Services Guide for
further information about exchanges.
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 14) if you have
authorized us to accept telephone instructions. You can authorize this by
selecting "Full Services" on your application or by calling us at 1-800-345-2021
to get the appropriate form.
BY ONLINE ACCESS
You can make exchanges online if you have authorized us to accept
instructions over the Internet. You can authorize this by selecting "Full
Services" on 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 to you upon request, or by a letter to us.
Certain redemptions may require a signature guarantee. Please see "Signature
Guarantee" on page 14.
BY TELEPHONE
If you have authorized us to accept telephone instructions, you may redeem
your shares by calling an Investor Services 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 directly to you or to your account at a bank or other financial
institution. To set up automatic redemptions, call one of our Investor Services
Representatives.
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.
Prospectus How to Invest with American Century Investments 13
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 of the necessity to bring
the value of the shares held in the account up to the minimum. If action is not
taken within 90 days of the letter's date, the shares held in the account will
be redeemed and 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. Which transactions will require a signature guarantee will
depend on which service options you elect when you open your account. For
example, if you choose "In Writing Only," a signature guarantee will be required
when:
o redeeming more than $25,000; or
o establishing or increasing a Check-A-Month or automatic transfer on
an existing account.
You may 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 service options to make your account easier to manage.
These are listed on the account application. Please make note of these options
and elect the ones that are appropriate for you. Be aware that the "Full
Services" option offers you the most flexibility. You will find more information
about each of these service options 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. If you have authorized us to accept telephone instructions, 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 your funds' daily share prices, receive
updates on major market indices and view historical performance of your funds.
If you select "Full Services" on your application, you can use your personal
access code and Social Security number to view your account balances and account
activity, make subsequent investments from your bank account or exchange shares
from one fund to another.
CHECKWRITING
We offer CheckWriting as a service option for your account. CheckWriting
allows you to redeem shares in your account by writing a draft ("check") against
your account balance. (Shares held in certificate form may not be redeemed by
check.) There is no limit on the number of checks you can write, but each one
must be for at least $100.
When you write a check, you will continue to receive dividends on all
shares until your check is presented for payment to our clearing bank. If you
redeem all shares in your account by check, any accrued distributions on the
redeemed shares will be paid to you in cash on the next monthly distribution
date.
If you want to add CheckWriting to an existing account that offers
CheckWriting, contact us by telephone or mail for an appropriate form. For a new
account, you may elect CheckWriting on your purchase application by choosing the
"Full Services" option. CheckWriting is not available for any account held in an
IRA or 403(b) plan.
CheckWriting redemptions may only be made on checks provided by us.
Currently, there is no charge for checks or for the CheckWriting service.
14 How to Invest with American Century Investments American Century Investments
We will return checks drawn on insufficient funds or on funds from
investments made by means other than by wire within the previous 15 days.
Neither the company nor our clearing bank will be liable for any loss or
expenses associated with returned checks. Your account may be assessed a $15
service charge for checks drawn on insufficient funds.
A stop payment may be ordered on a check written against your account. We
will use reasonable efforts to stop a payment, but we cannot guarantee that we
will be able to do so. If we are successful in fulfilling a stop-payment order,
your account may be assessed a $15 fee.
TAX-QUALIFIED RETIREMENT PLANS
The Fund is available for your tax-deferred retirement plan. Call or write
us and request the appropriate forms for:
o Individual Retirement Accounts (IRAs);
o 403(b) plans for employees of public school systems and non-profit
organizations; or
o 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 may also 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 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 investment advisor 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 may also 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
Prospectus How to Invest with American Century Investments 15
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 and transactions by
CheckWriting, each time you invest, redeem, transfer or exchange shares, we will
send you a confirmation of the transaction. Transactions initiated by
CheckWriting will be confirmed on a monthly basis. 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 31st 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.
16 How to Invest with American Century Investments American Century Investments
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 each day that the New York Stock Exchange is open, usually
3 p.m. Central time. 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 or redemption
or exchange request. For example, investments and requests to redeem or exchange
shares of a fund received by us or one of our agents 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 arrangement with the
Fund or the Fund's distributor in order for you to receive that day's price.
HOW SHARE PRICE IS DETERMINED
The valuation of assets for determining net asset value may be summarized
as follows:
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 are generally valued at the preceding closing values of such
securities on the exchange where primarily traded. 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 Trustees.
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 Trustees.
Pursuant to a determination by the Fund's Board of Trustees and Rule 2a-7
under the Investment Company Act of 1940 (the "1940 Act"), portfolio securities
of the Fund are valued at amortized cost. When a security is valued at amortized
cost, it is valued at its cost when purchased, and thereafter by assuming a
constant amortization to maturity of any discount or premium, regardless of the
impact of fluctuating interest rates on the market value of the instrument.
Prospectus Additional Information You Should Know 17
WHERE TO FIND YIELD INFORMATION
The yield of the Fund is published weekly in leading financial publications
and daily in many local newspapers. Yield information may also be obtained by
calling us or by accessing our Web site at www.americancentury.com.
DISTRIBUTIONS
At the close of each day, including Saturdays, Sundays and holidays,
dividends are declared and credited (i.e., available for redemption) daily and
distributed monthly on the last Friday of each month.
You will begin to participate in the distributions the day AFTER your
purchase is effective. See "When Share Price is Determined" on page 17. If you
redeem shares, you will receive the distribution declared for the day of the
redemption. If all shares are redeemed (other than by CheckWriting), the
distribution on the redeemed shares will be included with your redemption
proceeds.
The Fund does not expect to realize any long-term capital gains and,
accordingly, does not expect to make any capital gains distributions.
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 Individual Retirement Accounts 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.
TAXES
The Fund has elected to be taxed as a regulated investment company under
Subchapter M of the Internal Revenue Code, which means that to the extent its
income is distributed to shareholders, it pays no income taxes.
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 will generally 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, except as described below. The dividends from net income of the
Fund do not qualify for the 70% dividends-received deduction for corporations
since they are derived from interest income.
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 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 may also be subject to state and local taxes, even if all or
a substantial part of such distribution 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 the 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, we are required by federal
18 Additional Information You Should Know American Century Investments
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.
MANAGEMENT
INVESTMENT MANAGEMENT
American Century-Benham Prime Money Market Fund (formerly known as Benham
Prime Money Market Fund) is a diversified, open-end series of American Century
Investment Trust (the "Trust") that was organized as a Massachusetts business
trust on June 16, 1993 (formerly known as Benham Investment Trust). Under the
laws of the Commonwealth of Massachusetts, the Board of Trustees is responsible
for managing the business and affairs of the Trust.
Acting pursuant to an investment advisory agreement entered into with the
Trust, Benham Management Corporation (the "Manager") serves as the investment
advisor of the Fund. Its principal place of business is 1665 Charleston Road,
Mountain View, California 94043. The Manager has been providing investment
advisory services to investment companies and other clients since 1971.
In June 1995, American Century Companies, Inc. ("ACC") acquired Benham
Management International, Inc., the then-parent company of the Manager. ACC is
the parent company of American Century Investment Management, Inc. ("ACIM"),
which provides investment management services to many of the funds in the
American Century family of funds. In the acquisition, the Manager became a
wholly-owned subsidiary of ACC. Certain employees of the Manager provide
investment management services to funds managed by ACIM, while certain ACIM
employees provide investment management services to funds advised by the
Manager.
The Manager supervises and manages the investment portfolio of the Fund and
directs the purchase and sale of its investment securities. It utilizes a team
of portfolio managers, assistant portfolio managers and analysts acting together
to manage the assets of the Fund. The team meets regularly to review portfolio
holdings and to discuss purchase and sale activity. The team adjusts holdings in
the Fund's portfolio as it deems appropriate in pursuit of the Fund's investment
objective. Individual portfolio manager members of the team may also adjust
portfolio holdings of the Fund as necessary between team meetings.
The portfolio manager members of the team managing the Fund and their work
experience for the last five years are as follows:
AMY O'DONNELL, Portfolio Manager, has been primarily responsible for the
day-to-day management of the Fund since its inception in November of 1993. Ms.
O'Donnell joined American Century in 1987 as a Research Analyst, and was
promoted to her present position in 1992.
ROBERT V. GAHAGAN, Vice President and Portfolio Manager, is a member of
the team that manages the Fund. Mr. Gahagan has a B.A. and M.B.A. from the
University of Missouri in Kansas City and has over 12 years of investment
experience. He joined American Century in 1983 and manages several other
American Century funds.
The activities of the Manager are subject only to direction of the Board of
Trustees. For the services provided to the Fund, the Manager receives an annual
fee which cannot exceed 0.50% of average daily net assets. The Manager's fee
drops to a marginal rate of 0.19% of average daily net assets as the Trust's
assets increase. Currently, however, the Fund is the sole series of the Trust.
As a result, the fee rate is effectively applied to the Fund's average daily net
assets.
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 invest-
Prospectus Additional Information You Should Know 19
ment 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 the Fund shareholders come before the interests of
the people who manage the Fund.
TRANSFER AND ADMINISTRATIVE SERVICES
American Century Services Corporation, 4500 Main Street, Kansas City,
Missouri, 64111, (the "transfer agent") 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 Fund. For
administrative services, the Fund pays the transfer agent a monthly fee equal to
its pro rata share of the dollar amount derived from applying the average daily
net assets of all of the funds advised by the Manager. The administrative fee
rate ranges from 0.11% to 0.08% of average daily net assets, dropping as assets
advised by the Manager increase. For transfer agent services, the Fund pays the
transfer agent a monthly fee for each shareholder account maintained and for
each shareholder transaction executed during that month.
The Fund charges no sales commissions, or "loads," of any kind. However,
investors who do not choose to purchase or sell Fund shares directly from the
transfer agent may purchase or sell Fund shares through registered
broker-dealers and other qualified service providers, who may charge investors
fees for their services. These broker-dealers and service providers generally
provide shareholder, administrative and/or accounting services which would
otherwise be provided by the transfer agent. To accommodate these investors, the
Manager and its affiliates have entered into agreements with some broker-dealers
and service providers to provide these services. Fees for such services are
borne normally by the Fund at the rates normally paid to the transfer agent,
which would otherwise provide the services. Any distribution expenses associated
with these arrangements are borne by the Manager.
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
or its affiliates.
The Manager and the transfer agent are both wholly owned by ACC. James E.
Stowers Jr., Chairman of the Board of Directors of ACC, controls ACC by virtue
of his ownership of a majority of its common stock.
SPECIAL MEETING OF SHAREHOLDERS
The Board of Trustees has requested that the following matters be submitted
to shareholders of Prime Money Market for approval at a Special Meeting of
Shareholders to be held on July 30, 1997, to consider the following proposals:
1. To ratify the selection of Coopers & Lybrand LLP as the independent
auditors for the Fund for its current fiscal year;
2. To vote on the approval of a Management Agreement with American Century
Investment Management, Inc.;
3. To approve the adoption of standardized investment limitations by
amending or eliminating certain of the Fund's current fundamental
investment limitations; and
7. To transact such other business which may come before the meeting, although
we are not aware of any other items to be considered.
Proposals 4, 5 and 6 do not apply to the Fund offered by this Prospectus.
The record date for the meeting is May 16, 1997. If you owned shares of the Fund
as of the close of business on that date, you will be entitled to vote at the
meeting. Proxy materials containing more information about these proposals were
first sent to shareholders on June 2, 1997. If approved by shareholders, the
Management Agreement in Proposal 2 and the amendments to the Fund's fundamental
investment limitations would become effective on August 1, 1997.
FURTHER INFORMATION ABOUT PROPOSAL 2
The proposed Management Agreement with American Century Investment
Management, Inc. ("ACIM") is substantially different from the Fund's
20 Additional Information You Should Know American Century Investments
current Advisory Agreement with Benham Management Corporation ("BMC"). The most
important change is a difference in the way management fees are calculated under
the proposed agreement. Rather than paying separate investment advisory fees,
transfer agency fees, and operating costs, it is proposed that the Fund pays one
"unified" fee which would cover not just the investment advisory fee, but nearly
all expenses of the Fund. The expenses covered under the unified fee would
include fees for administrative services, transfer agency services, custodian
fees, printing and mailing costs for shareholder materials and shareholder
meeting expenses, all of which are charged to the Fund under the current
arrangements with BMC. While the fees paid under the proposed Management
Agreement are not directly comparable to those of the Fund's current agreements
with its service providers, the effect of the proposed Management Agreement
would have been a net decrease in total expenses paid by all of the American
Century funds as a group if the proposed Management Agreement had been in effect
during 12 months ended December 31, 1996. However, if the proposed Management
Agreement had been in effect during such period, the total expense ratios of
some funds may have been higher. In no case is the proposed management fee of
any fund higher than the maximum total expense ratio payable under the current
Advisory Agreement.
If the proposed Management Agreement is approved, the investment management
of the Fund will not change in any way. Certain employees of ACIM currently
provide investment management services to the Fund through an arrangement with
BMC by which certain employees of BMC also provide investment services to funds
managed by ACIM. If the proposed Management Agreement is approved, ACIM intends
to consolidate the investment management capabilities of the two advisors in
ACIM. The same investment teams that currently manage the Fund will continue
under the proposed Management Agreement with ACIM.
The following table depicts the effect of the proposed Management Agreement
on the Fund for the 12 month period ended December 31, 1996:
After Expense Reimbursements
- -----------------------------------------------------------------------------
Management Fee Other Expenses Total Expenses*
Current Proposed Current Proposed Current Proposed
- -----------------------------------------------------------------------------
0.18% 0.49% 0.32% 0.01% 0.50% 0.50%
- -----------------------------------------------------------------------------
* Absent the effect of voluntary fee waivers and contractual expense
limitations, the management fee, other expenses and total expenses of Prime
Money Market under the current arrangements would have been, respectively;
0.31%, 0.31% and 0.62%. Under the proposed Management Agreement they would
have been 0.59%, 0.01% and 0.60%.
FURTHER INFORMATION ABOUT PROPOSAL 3
Currently the Fund has fundamental investment restrictions which vary from
the funds within the American Century family of mutual funds. The Fund also has
investment restrictions which reflect legal and other requirements which are no
longer applicable to the Fund. In the interests of efficiency in Fund management
and compliance, we have analyzed the fundamental investment limitations and
policies in an effort to formulate a standard set of policies for all American
Century funds which reflect current industry practice and will allow the Fund to
respond to changes in regulatory and industry practice without the expense and
delay of a shareholder vote. It should be noted that the adoption of the
proposed changes is not expected to substantially affect the way the Fund is
managed.
DISTRIBUTION OF FUND SHARES
The Fund's shares are distributed by American Century Investment Services,
Inc. (the "Distributor"), a registered broker-dealer and an affiliate of the
Manager. The Manager pays all expenses for promoting and distributing the Fund
shares. The Fund does not pay any commissions or other fees to the Distributor
or to any other broker-dealers or financial intermediaries in connection with
the distribution of Fund shares.
EXPENSES
The Fund pays certain operating expenses directly, including, but not
limited to: custodian, audit, and legal fees; fees of the independent Trustees;
costs of printing and mailing prospectuses, statements of additional
information, proxy statements, notices, and reports to shareholders; insurance
expenses; and costs of registering the Fund's shares for sale under
Prospectus Additional Information You Should Know 21
federal and state securities laws. See the Statement of Additional Information
for a more detailed discussion of independent Trustee compensation.
FURTHER INFORMATION ABOUT AMERICAN CENTURY
The Trust is an open-end management investment company. Its business and
affairs are managed by its officers under the direction of its Board of
Trustees.
The principal office of the Trust 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).
The Fund is the sole series of the Trust which issues shares with no par
value. Additional series of the Trust may be created in the future. In the event
that such other series are created, the assets belonging to each series of
shares will be held separately by the custodian and in effect each series will
be a separate fund.
Each share is entitled to one vote for each dollar of net asset value
applicable to such share on all questions, except those matters which must be
voted on separately by the series of shares affected. Matters affecting only one
Fund are voted upon only by that Fund.
Shares have non-cumulative voting rights, which means that the holders of
more than 50% of the votes cast in an election of Trustees can elect all of the
Trustees 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 Trustees.
Unless required by the 1940 Act, it will not be necessary for the Trust to
hold annual meetings of shareholders. As a result, shareholders may not vote
each year on the election of members of the Board of Trustees or the appointment
of auditors. However, pursuant to the Trust's by-laws, the holders of shares
representing at least 10% of the votes entitled to be cast may request that the
Trust hold a special meeting of shareholders. We will assist in the
communication with other shareholders.
WE RESERVE THE RIGHT TO CHANGE ANY OF THE 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.
THIS PROSPECTUS CONSTITUTES AN OFFER TO SELL SECURITIES OF THE FUND ONLY IN
THOSE STATES WHERE THE FUND'S SHARES HAVE BEEN REGISTERED OR OTHERWISE QUALIFIED
FOR SALE. THE FUND WILL NOT ACCEPT APPLICATIONS FROM PERSONS RESIDING IN STATES
WHERE THE FUND'S SHARES ARE NOT REGISTERED.
22 Additional Information You Should Know American Century Investments
NOTES
Notes 23
NOTES
24 Notes
NOTES
Notes 25
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
Internet: www.americancentury.com
[american century logo]
American
Century(sm)
9706 [recycled logo]
SH-BKT-8750 Recycled
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
JULY 1, 1997
[american century logo]
American
Century(sm)
BENHAM
GROUP(R)
Prime Money Market
[front cover]
STATEMENT OF ADDITIONAL INFORMATION
JULY 1, 1997
AMERICAN CENTURY INVESTMENT TRUST
This Statement is not a prospectus but should be read in conjunction with
the Fund's current Prospectus, dated July 1, 1997. The Fund's annual report for
the fiscal year ended February 28, 1997, is incorporated herein by reference.
Please retain this document for future reference. To obtain the Prospectus, call
American Century Investments toll-free at 1-800-345-2021 (international calls:
816-531-5575), or write P.O. Box 419200, Kansas City, Missouri 64141-6200.
TABLE OF CONTENTS
Investment Policies and Techniques....................................2
Investment Restrictions...............................................6
Portfolio Transactions................................................8
Valuation of Portfolio Securities.....................................8
Performance...........................................................9
Taxes................................................................10
About the Trust......................................................11
Trustees and Officers................................................11
Investment Management................................................13
Transfer and Administrative Services.................................14
Distribution of Fund Shares..........................................14
Direct Fund Expenses.................................................14
Expense Limitation Agreement.........................................14
Additional Purchase and Redemption Information.......................15
Other Information....................................................15
Statement of Additional Information 1
INVESTMENT POLICIES AND TECHNIQUES
The following paragraphs provide a more detailed description of the
securities and investment practices identified in the Prospectus. Unless
otherwise noted, the policies described in this Statement of Additional
Information are not fundamental and may be changed by the board of trustees.
PORTFOLIO DIVERSIFICATION
In order to reduce investment risks, Benham Management Corporation (the
"Manager"), is required by law to broadly diversify the Fund's investment
portfolio. As a general rule, the Manager may not invest more than 5% of the
Fund's total assets in securities issued by, or subject to puts of, a single
institution. However, there are three exceptions to this policy, as follows:
(1) The Fund may invest without limitation in U.S. government securities.
(2) The Fund may invest more than 5% of its total assets in the first-tier
securities of a single issuer for up to three business days, provided that
it does so with respect to just one issuer at a time.
(3) This diversification policy does not apply to unconditional puts if no more
than 10% of the Fund's total assets are invested in securities issued or
guaranteed by the issuer of the unconditional put. (An unconditional put is
a put or demand feature that can be readily exercised by the Fund in the
event of a default on the underlying obligation on no more than 30 days'
notice.)
COMMERCIAL PAPER
Commercial paper ("CP") is issued by utility, financial, and industrial
companies and supranational organizations. Nationally recognized statistical
rating organizations ("rating agencies") assign ratings to CP issuers indicating
the agencies' assessment of credit risk. Investment grade CP ratings assigned by
four rating agencies are provided in the following table.
Moody's Standard Fitch
Investors & Poor's Duff & Investors
Service, Inc. Corporation Phelps, Inc. Service, Inc.
- --------------------------------------------------------------------------------
Highest Ratings Prime-1 A-1/A-1+ D-1/D-1+ F-1/F-1+
Prime-2 A-2 D-2 F-2
Prime-3 A-3 D-3 F-3
- --------------------------------------------------------------------------------
If an obligation has been assigned different ratings by multiple rating
agencies, at least two rating agencies must have assigned their highest rating
as indicated above in order for the Manager to determine that the obligation is
eligible for purchase by the Fund or, if unrated, the obligation must be
determined to be of comparable quality by the Manager.
Some examples of CP and CP issuers are provided in the following
paragraphs.
Domestic CP is issued by U.S. industrial and finance companies, utility
companies, thrifts, and bank holding companies. Foreign CP is issued by non-U.S.
industrial and finance companies and financial institutions. Domestic and
foreign corporate issuers occasionally have the underlying support of a
well-known, highly rated commercial bank or insurance company. Bank support is
provided in the form of a letter of credit (a "LOC") or irrevocable revolving
credit commitment (an "IRC"). Insurance support is provided in the form of a
surety bond.
Bank Holding Company CP is issued by the holding companies of many
well-known domestic banks, including Citicorp, J.P. Morgan & Company
Incorporated, and First Union National Bank. Bank holding company CP may be
issued by the parent of a money center or regional bank.
Thrift CP is issued by major federal or state-chartered savings and loan
associations and savings banks.
Schedule B Bank CP is short-term, U.S. dollar-denominated CP issued by
Canadian subsidiaries of non-Canadian banks (Schedule B banks). Whether issued
as commercial paper, a certificate of deposit, or a promissory note, each
instrument issued by a Schedule B bank ranks equally with any other deposit
obligation. Paper issued by Schedule B banks provides an investor with the
comfort and reduced risk of a direct and unconditional parental guarantee.
Schedule B instruments generally offer higher rates than the short-term
instruments of the parent bank or holding company.
REPURCHASE AGREEMENTS
In a repurchase agreement (a "repo"), the Fund buys a security at one price
and simultaneously agrees to sell it back to the seller at an agreed upon price
on a specified date (usually within seven days from the date of purchase) or on
demand. The repurchase price exceeds the purchase price by an amount
2 American Century Investments
that reflects an agreed-upon rate of return and that is unrelated to the
interest rate on the underlying security. Delays or losses could result if the
other party to the agreement defaults or becomes bankrupt.
The Manager attempts to minimize the risks associated with repurchase
agreements by adhering to the following criteria:
(1) Limiting the securities acquired and held by the Fund under repurchase
agreements to U.S. government securities;
(2) Entering into repurchase agreements only with primary dealers in U.S.
government securities (including bank affiliates) that are deemed to be
creditworthy under guidelines established by a nationally recognized
statistical rating organization (a "rating agency") and approved by the
Board of Trustees;
(3) Monitoring the creditworthiness of all firms involved in repurchase
agreement transactions;
(4) Requiring the seller to establish and maintain collateral equal to 102% of
the agreed upon resale price, provided, however, that the board of trustees
may determine that a broker-dealer's credit standing is sufficient to allow
collateral to fall to as low as 101% of the agreed upon resale price before
the broker-dealer deposits additional securities with the Fund's custodian;
(5) Investing no more than 10% of the Fund's net assets in repurchase
agreements that mature in more than seven days; and
(6) Taking delivery of securities subject to repurchase agreements and holding
them in a segregated account at the Fund's custodian bank.
The Fund has received permission from the Securities and Exchange
Commission (SEC) to participate in joint repurchase agreements collateralized by
U.S. government securities with other mutual funds advised by the Manager or its
affiliates. Joint repos are expected to increase the income the Fund can earn
from repo transactions without increasing the risks associated with these
transactions.
Under the Investment Company Act of 1940 (the "1940 Act"), repurchase
agreements are considered to be loans.
REVERSE REPURCHASE AGREEMENTS
In a reverse repurchase agreement, the Fund transfers possession of (or
sells) securities to another party, such as a bank or broker-dealer, for cash
and agrees to later repay cash plus interest for the return (or repurchase) of
the same securities. To collateralize the transaction, the value of the
securities transferred is slightly greater than the amount of cash the Fund
receives in exchange for the securities.
If the purchaser reneged on the agreement and failed to return the
securities, the Fund might suffer a loss. The Fund's loss could be even greater
if the market value of the securities transferred increased in the meantime. To
protect against these risks, the Fund will enter into reverse repurchase
agreements only with parties whose creditworthiness is determined to be
satisfactory by the Manager. While a reverse repurchase agreement is
outstanding, the Fund will maintain sufficient liquid assets in a segregated
custodial account to cover its obligation under the agreement.
TAXABLE MUNICIPAL OBLIGATIONS
Taxable municipal obligations are state and local obligations whose
interest payments are subject to federal income tax because of the degree of
non-government involvement in the transaction or because federal tax code
limitations on the issuance of tax-exempt bonds that benefit private entities
have been exceeded. Some typical examples of taxable municipal obligations
include industrial revenue bonds and economic development bonds issued by state
or local governments to aid private enterprise. The interest on a taxable
municipal bond is often exempt from state taxation in the issuing state. The
Fund may purchase taxable municipal obligations although it does not currently
intend to do so.
TIME DEPOSITS
Time deposits are non-negotiable bank deposits maintained for up to seven
days at a stated interest rate. These instruments may be withdrawn on demand,
although early withdrawals may be subject to penalties.
WHEN-ISSUED SECURITIES, FORWARD COMMITMENT
AGREEMENTS AND ROLL TRANSACTIONS
The Fund may engage in securities transactions on a when-issued or forward
commitment basis, in which the transaction price and yield are each fixed at the
time the commitment is made, but payment and delivery occur at a future date
(typically 1 to 7 days later).
Statement of Additional Information 3
When purchasing securities on a when-issued or forward commitment basis,
the Fund assumes the rights and risks of ownership, including the risk of price
and yield fluctuations. Although the Fund will make commitments to purchase or
sell securities with the intention of actually receiving or delivering them, it
may sell the securities before the settlement date if doing so is deemed
advisable as a matter of investment strategy.
In purchasing securities on a when-issued or forward commitment basis, the
Fund will establish and maintain until the settlement date a segregated account
consisting of cash, cash equivalents, or other high-quality liquid debt
securities in an amount sufficient to meet the purchase price. When the time
comes to pay for when-issued securities, the Fund will meet its obligations with
available cash, through the sale of securities, or, although it would not
normally expect to do so, by selling the when-issued securities themselves
(which may have a market value greater or less than the Fund's payment
obligation). Selling securities to meet when-issued or forward commitment
obligations may generate capital gains or losses.
The Fund may sell a security and at the same time make a commitment to
purchase the same or a comparable security at a future date and specified price.
Conversely, the Fund may purchase a security and at the same time make a
commitment to sell the same or a comparable security at a future date and
specified price. These types of transactions are executed simultaneously in what
are known as "dollar-rolls", "cash and carry" or financing transactions. For
example, a broker-dealer may seek to purchase a particular security that the
Fund owns. The Fund will sell that security to the broker-dealer and
simultaneously enter into a forward commitment agreement to buy it back at a
future date. This type of transaction generates income for the Fund if the
dealer is willing to execute the transaction at a favorable price in order to
acquire a specific security.
There is a risk that the party with whom the Fund enters into a forward
commitment agreement will not uphold its commitment, which could cause the Fund
to miss a favorable price or yield opportunity or to suffer a loss. To minimize
this risk, the Manager limits when-issued and forward commitment transactions
(including roll transactions) to 30% of the Fund's net assets. In addition, no
more than 10% of the Fund's net assets may be committed to transactions in which
the settlement date occurs more than 30 days after the trade date. The Fund will
establish a segregated account as described above to meet all payment
obligations arising as a result of these types of transactions.
INTEREST RATE RESETS ON VARIABLE- AND
FLOATING-RATE INSTRUMENTS
The interest rate on variable- and floating-rate instruments is ordinarily
determined by reference to (or is a percentage of) an objective standard. There
are two types of indexes that provide the basis for interest rate
adjustments--those based on market rates and those based on a calculated measure
such as a cost-of-funds index. Commonly used indexes include the three-month
Treasury bill rate, the Federal Funds effective rate (the "Fed Funds rate"), or
the one-month or three-month London Interbank Offered Rate (LIBOR), each of
which is highly correlated with changes in market interest rates.
Three-month Treasury bill rates are calculated by the Federal Reserve Bank
of New York based on weekly auction averages.
LIBOR is the rate at which banks in London offer Eurodollars in trades
between banks. LIBOR has become a key rate in the U.S. domestic money market
because it is perceived to reflect the true global cost of money.
The Fed Funds rate is the overnight rate at which banks lend funds to each
other, usually as unsecured loans from regional banks to money center banks. The
Fed Funds rate is the average dollar-weighted rate of overnight funds. It is
reported with a one-day lag (Monday's rate is reported Tuesday morning) and may
be found in reports issued by various financial information services.
The Manager may invest in instruments whose interest rate adjustments are
based on new indexes as these indexes become available.
Variable-rate demand instruments include master demand notes. These
obligations permit the Fund to invest amounts that may change daily without
penalty under direct arrangements between the Fund and the issuer.
The issuer normally has a corresponding right, after a given period and
on a specified number of days
4 American Century Investments
notice, to prepay the outstanding principal amount of the obligation plus
accrued interest. Although there is no secondary market for master demand notes,
these instruments are repayable by the borrower at par plus accrued interest on
seven days' notice.
Variable- and floating-rate demand instruments frequently are not rated.
The Fund may invest in these unrated instruments if the Manager determines, at
the time of investment, that they are of a quality comparable to other
obligations the Fund buys.
LOAN PARTICIPATIONS
Although the Fund does not currently intend to do so, it may buy loan
participations, which represent interests in the cash flow generated by
commercial loans. Each loan participation requires three parties: a participant
(or investor), a lending bank, and a borrower. The investor purchases a share in
a loan originated by a lending bank, and this participation entitles the
investor to a percentage of the principal and interest payments made by the
borrower.
Loan participations are attractive because they typically offer higher
yields than other money market instruments. However, along with these higher
yields come certain risks, not least of which is the risk that the borrower will
be unable to repay the loan. Generally, since the lending bank does not
guarantee payment, the investor is directly exposed to risk of default by the
borrower. Secondly, the investor is not a direct creditor of the borrower. The
participation represents an interest in assets owned by the lending bank. If the
lending bank becomes insolvent, the investor could be considered an unsecured
creditor of the bank instead of the holder of a participating interest in a
loan. Because of these risks, the Manager must carefully consider the
creditworthiness of both the borrower and the lender.
Another concern is liquidity. Because there is no established secondary
market for loan participations, the Fund's ability to sell them for cash is
limited. Some participation agreements place limitations on the investor's right
to resell the loan participation, even when a buyer can be found. To alleviate
these liquidity concerns, the Fund generally limits its investments in loan
participations to those with terms of 7 days or less, although it may invest in
loan participations with terms of up to 30 days.
SECURITIES LENDING
The Fund may lend its portfolio securities to banks and broker-dealers to
earn additional income. If a borrower defaulted on a securities loan, the Fund
could experience delays in recovering loaned securities; or if the value of the
loaned securities increased over the value of the collateral, the Fund could
suffer a loss. To minimize the risk of default on securities loans, the Manager
adheres to the following guidelines prescribed by the Board of Trustees:
(1) TYPE AND AMOUNT OF COLLATERAL. At the time a loan is made, the Fund must
receive, from or on behalf of a borrower, collateral consisting of any
combination of cash and full faith and credit U.S. government securities
equal to not less than 102% of the market value of the securities loaned.
Cash collateral received by the Fund in connection with loans of portfolio
securities may be commingled by the Fund's custodian with other cash and
marketable securities, provided that the loan agreement expressly allows
such commingling.
(2) Additions to Collateral. Collateral must be marked to market daily, and the
borrower must agree to add collateral to the extent necessary to maintain
the 102% level specified in guideline (1) above. The borrower must deposit
additional collateral no later than the business day following the business
day on which a collateral deficiency occurs or collateral appears to be
inadequate.
(3) TERMINATION OF LOAN. The Fund must have the option to terminate any loan of
a portfolio security at any time and recover its securities (from the
borrower) within the normal settlement period for the types of securities
loaned following the receipt of the termination notice.
(4) REASONABLE RETURN ON LOAN. The borrower must agree that the Fund (i) will
receive all dividends, interest, or other distributions on loaned
securities and (ii) will be paid a reasonable return on such loans either
in the form of a loan fee or premium, or from the retention by the Fund of
part or all of the earnings and profits realized from investment of cash
collateral in full faith and credit U.S. government securities.
Statement of Additional Information 5
(5) LIMITATIONS ON PERCENTAGE OF FUND ASSETS ON LOAN. The Fund's loans may not
exceed 33 1/3% of its total assets.
(6) CREDIT ANALYSIS. As part of the regular monitoring procedures set forth by
the board of trustees that the Manager follows to evaluate banks and
broker-dealers in connection with, for example, repurchase agreements and
municipal securities credit issues, the Manager will analyze and monitor
the creditworthiness of all borrowers with whom portfolio lending
arrangements are proposed or made.
ILLIQUID SECURITIES
Illiquid securities are investments that cannot be sold or disposed of in
the ordinary course of business at approximately the prices at which they are
valued. Pursuant to guidelines established by the board of trustees, the Manager
determines the liquidity of the Fund's investments, and through reports from the
Manager, the Board of Trustees monitors trading activity in illiquid securities.
In determining the liquidity of the Fund's investments, the Manager may
consider various factors including (i) the frequency of trades and quotations,
(ii) the number of dealers and prospective purchasers in the marketplace, (iii)
dealer undertakings to make a market, (iv) the nature of the security (including
any demand or tender features), and (v) the marketplace for trades.
In the absence of market quotations, illiquid securities are valued for
purposes of monitoring amortized cost valuation at fair market value as
determined in good faith by a committee appointed by the board of trustees. If
through a change in values, net assets, or other circumstances, more than 10% of
the Fund's net assets were invested in illiquid securities, the Manager would
take appropriate steps to protect the Fund's liquidity.
RESTRICTED SECURITIES
Restricted securities generally can be sold (i) in privately negotiated
transactions, (ii) pursuant to an exemption from registration under the
Securities Act of 1933, or (iii) in a registered public offering. Where
registration is required, the Fund may be obligated to pay all or part of the
registration expense, and a considerable period may elapse between the time it
decides to seek registration and the time it is permitted to sell a security
under an effective registration statement. If during such a period adverse
market conditions were to develop, the Fund might obtain a less favorable price
than prevailed when it decided to seek registration of the security.
Rule 144A under the Securities Act permits a broader institutional trading
market for securities otherwise subject to restriction on resale to the general
public. Rule 144A establishes a "safe harbor" from the registration requirements
of the Securities Act for resales of certain securities to qualified
institutional buyers. Investing in Rule 144A securities could increase the level
of fund illiquidity to the extent that qualified institutional buyers become,
for a time, uninterested in purchasing these securities.
The Fund may also invest in CP issued in reliance on the "private
placement" exemption from registration under Section 4(2) of the Securities Act
of 1933 (Section 4(2) paper). Section 4(2) paper is restricted as to disposition
under the federal securities laws and generally is sold to institutional
investors such as the Fund who agree that they are purchasing the paper for
investment and not with a view to public distribution. Any resale by the
purchaser must be in an exempt transaction. Section 4(2) paper normally is
resold to other instit-utional investors like the Fund through or with the
assistance of the issuer or investment dealers who make a market in the Section
4(2) paper, thus providing liquidity. The Manager may consider Section 4(2)
paper that meets certain conditions to be liquid, pursuant to procedures
approved by the board of trustees. Section 4(2) paper that is not determined to
be liquid pursuant to these procedures will be included within the 10%
limitation on illiquid securities. The Manager monitors the liquidity of the
Fund's investments in Section 4(2) paper on a continuing basis.
INVESTMENT RESTRICTIONS
The Fund's investment restrictions set forth below are fundamental and may
not be changed without approval of a majority of the votes of shareholders of
the Fund as determined in accordance with the 1940 Act.
THE FUND MAY NOT:
(1) Purchase, with respect to 75% of its total assets, the securities of any
issuer (other than securities issued or guaranteed by the U.S. government
or
6 American Century Investments
any of its agencies or instrumentalities) if, as a result, (i) more than 5%
of the Fund's total assets would be invested in the securities of that
issuer, or (ii) the Fund would hold more than 10% of the outstanding voting
securities of that issuer.
(2) Issue senior securities except as permitted under the 1940 Act and except
to the extent that notes evidencing temporary borrowings or the purchase of
securities on a when-issued or delayed-delivery basis might be deemed
senior securities.
(3) Borrow money, except that the Fund may (i) borrow money for temporary or
emergency purposes (not for leveraging or investment) and (ii) engage in
reverse repurchase agreements and forward commitment transactions for any
purpose, provided that (i) and (ii) in combination do not exceed 33 1/3% of
the Fund's total assets (including the amount borrowed) less liabilities
(other than borrowings). Any borrowings that exceed this amount will be
reduced within three days (not including Sundays and holidays) to the
extent necessary to comply with the 33 1/3% limitation.
(4) Underwrite securities issued by others, except to the extent that the Fund
may be considered an underwriter in the disposition of restricted
securities within the meaning of the Securities Act of 1933.
(5) Purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the Fund's total
assets would be invested in the securities of companies whose principal
business activities are in the same industry, except that the Fund will
invest more than 25% of its total assets in the financial services
industry.
(6) Purchase or sell real estate unless acquired as a result of ownership of
securities or other instruments (but this shall not prevent the Fund from
investing in securities or other instruments backed by real estate or
securities of companies engaged in the real estate business).
(7) Purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments.
(8) Lend any security or make any other loan if, as a result, more than 33 1/3%
of its total assets would be lent to other parties, but this limitation
does not apply to purchases of debt securities or to repurchase agreements.
The Fund is also subject to the following restrictions that are not
fundamental and may therefore be changed by the board of trustees without
shareholder approval.
THE FUND MAY NOT:
(a) Purchase a security (other than a security issued or guaranteed by the U.S.
government or any of its agencies or instrumentalities) if, as a result,
more than 5% of its total assets would be invested in the securities of a
single issuer, provided that the Fund may invest up to 25% of its total
assets in the first-tier securities of a single issuer for up to three
business days.
(b) Sell securities short unless it owns or has the right to obtain at no added
cost securities equivalent in kind and amount to the securities sold short
and provided that transactions in futures contracts and options are not
deemed to constitute selling securities short.
(c) 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 will not constitute purchasing securities on
margin.
(d) Purchase any security while borrowings representing more than 5% of its
total assets are outstanding.
(e) Purchase any security or enter into a repurchase agreement if, as a result,
more than 10% of its net assets would be invested in repur-chase 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.
(f) Invest in securities of real estate investment trusts that are not readily
marketable or invest in securities of real estate limited partnerships that
are not listed on the New York Stock Exchange (the "Exchange") or the
American
Statement of Additional Information 7
Stock Exchange or traded on the NASDAQ National Market System.
(g) Purchase securities of other investment companies except in the open market
where no commission except the ordinary broker's commission is paid, or
purchase or retain securities issued by other open-end investment companies
except as permitted pursuant to exemptive orders issued by the SEC. These
limitations do not apply to securities received as dividends, through
offers of exchange, or as a result of a reorganization, consolidation, or
merger.
(h) Purchase the securities of any issuer (other than securities issued or
guaranteed by domestic or foreign governments or political subdivisions
thereof) if, as a result, more than 5% of its total assets would be
invested in the securities of business enterprises that, including
predecessors, have a record of less than three years of continuous
operation.
(i) Purchase warrants.
(j) Invest in oil, gas, or other mineral exploration or development programs or
leases.
(k) Purchase the securities of any issuer if those officers and trustees of the
Trust and those officers and directors of the Manager who individually own
more than 1/2 of 1% of the securities of such issuer together own more than
5% of such issuer's securities.
(l) Purchase the voting securities of any issuer.
(m) Purchase or sell futures contracts or put or call options. This limitation
does not apply to options attached to, or acquired or traded together with,
their underlying securities and does not apply to securities that
incorporate features similar to options or futures contracts.
(n) Lend assets other than securities to other parties.
PORTFOLIO TRANSACTIONS
The Fund's assets are invested by the Manager in a manner consistent with
the Fund's investment objective, policies, and restrictions and with any
instructions the board of trustees may issue from time to time. Within this
framework, the Manager is responsible for making all determinations as to the
purchase and sale of portfolio securities and for taking all steps necessary to
implement securities transactions on behalf of the Fund. In placing orders for
the purchase and sale of portfolio securities, the Manager will use its best
efforts to obtain the best possible price and execution and will otherwise place
orders with broker-dealers subject to and in accordance with any instructions
the board of trustees may issue from time to time. The Manager will select
broker-dealers to execute portfolio transactions on behalf of the Fund solely on
the basis of best price and execution.
Securities in which the Fund invests generally are traded in the
over-the-counter market through broker-dealers. A broker-dealer is a securities
firm or bank that makes a market for securities by offering to buy at one price
and sell at a slightly higher price. The difference between the prices is known
as a spread. The Manager transacts in round lots ($1 million to $10 million or
more) on behalf of the Fund whenever possible. Because commissions are not
charged for money market transactions, the Fund's transaction costs consist
solely of custodian charges and dealer mark-ups. The Fund may hold its portfolio
securities to maturity or may sell or swap them for other securities, depending
upon the level and slope of, and anticipated changes in, the yield curve.
The Fund acquired, during the fiscal year ended February 28, 1997,
securities issued by its regular brokers or dealers (as defined in Rule 10b-1
under the 1940 Act) and/or their parent corporations. As of February 28, 1997,
the Fund held securities issued by the following brokers or dealers in the
following aggregate amounts: Merrill Lynch, $20,000,000, Morgan Stanley Group,
$30,000,000, Goldman Sachs Group, $26,000,000 and BT Securities Corporation,
$20,000,000.
VALUATION OF PORTFOLIO SECURITIES
The Fund's net asset value per share ("NAV") is calculated as of the close
of business of the New York Stock Exchange (the "Exchange") usually at 3:00 p.m.
Central time each day the Exchange is open for business. The Exchange has
designated the following holiday closings for 1997: New Year's Day (observed),
Martin Luther King Jr. Day, Presidents` Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day, and Christmas Day (observed).
Although the Fund expects the same holiday schedule
8 American Century Investments
to be observed in the future, the Exchange may modify its holiday schedule at
any time.
The Manager typically completes its trading on behalf of the Fund in
various markets before the Exchange closes for the day. Securities held by the
Fund are valued at amortized cost. This method involves valuing an instrument at
its cost and thereafter assuming a constant amortization to maturity of any
discount or premium paid at the time of purchase. Although this method provides
certainty in valuation, it generally disregards the effect of fluctuating
interest rates on an instrument's market value. Consequently, the instrument's
amortized cost value may be higher or lower than its market value, and this
discrepancy may be reflected in the Fund's yield. During periods of declining
interest rates, for example, the daily yield on Fund shares computed as
described above may be higher than that of a fund with identical investments
priced at market value. The converse would apply in a period of rising interest
rates.
The amortized cost valuation method is permitted in accordance with Rule
2a-7 under the 1940 Act. Under the Rule, a fund holding itself out as a money
market fund must adhere to certain quality and maturity criteria, which are
described in the Prospectus.
The trustees have established procedures designed to stabilize the Fund's
NAV at $1.00 per share to the extent reasonably possible. These procedures
require the Trust's chief financial officer to notify the trustees immediately
if, at any time, the Fund's weighted average maturity exceeds 90 days, or its
NAV, as determined by using available market quotations, deviates from its
amortized cost per share by .25% or more. If such deviation exceeds .40%, a
meeting of the board of trustees' audit committee will be called to consider
what actions, if any, should be taken. If such deviation exceeds .50%, the
Trust's chief financial officer is instructed to adjust daily dividend
distributions immediately to the extent necessary to reduce the deviation to
.50% or lower and to call a meeting of the board of trustees to consider further
action.
Actions the board of Trustees may consider under these circumstances
include but are not limited to (i) selling portfolio securities prior to
maturity, (ii) withholding dividends or distributions from capital, (iii)
authorizing a one-time dividend adjustment, (iv) discounting share purchases and
initiating redemptions in kind, or (v) valuing portfolio securities at market
value for purposes of calculating NAV. Actions which the Manager may consider in
the event that a negative deviation exceeds .50% include (i) waiving current or
past investment advisory or transfer agent fees and (ii) contributing capital
sufficient to raise the Fund's market-based net asset value per share to $0.995
or higher.
PERFORMANCE
The Fund's yield and total return may be quoted in advertising and sales
literature. Yield and total return will vary. Past performance should not be
considered an indication of future results.
Yield quotations for the Fund are based on the change in the value of a
hypothetical investment (excluding realized gains and losses from the sale of
securities and unrealized appreciation and depreciation of securities) over a
seven-day period (base period) and stated as a percentage of the investment at
the start of the base period (base-period return). The base-period return is
then annualized by multiplying it by 365/7 with the resulting yield figure
carried to at least the nearest hundredth of one percent.
Calculations of effective yield begin with the same base-period return used
to calculate yield, but the return is then annualized to reflect weekly
compounding according to the following formula:
Effective Yield = [(Base-Period Return + 1)365/7] - 1
For the seven-day period ended February 28, 1997, the Fund's yield and
effective yield are indicated in the following table.
7-Day
7-Day Effective
Yield Yield
- -----------------------------------------
Prime 4.94% 5.06%
- -----------------------------------------
Total returns quoted in advertising and sales literature reflect all
aspects of the Fund's return, including the effect of reinvesting dividends and
capital gain distributions (if any) and any change in the Fund's NAV during the
period.
Average annual total returns are calculated by determining the growth or
decline in value of a hypothetical historical investment in the Fund during a
stated period and then calculating the annually com-
Statement of Additional Information 9
pounded percentage rate that would have produced the same result if the rate of
growth or decline in value had been constant throughout the period. For example,
a cumulative total return of 100% over 10 years would produce an average annual
return of 7.18%, which is the steady annual rate that would equal 100% growth on
a compounded basis in 10 years. While average annual total returns are a
convenient means of comparing investment alternatives, investors should realize
that the Fund's performance is not constant over time, but changes from year to
year, and that average annual total returns represent averaged figures as
opposed to actual year-to-year performance.
Average annual total returns for periods of less than one year are
calculated by determining the Fund's total return for the period, extending that
return for a full year (assuming that performance remains constant throughout
the year), and quoting the result as an annual return. Because the Fund's return
may not remain constant over the course of a year, these performance figures
should be viewed as strictly hypothetical.
In addition to average annual total returns, the Fund may quote unaveraged
or cumulative total returns reflecting the simple change in value of an
investment over a stated period. Average annual and cumulative total returns may
be quoted as a percentage or as a dollar amount and may be calculated for a
single investment, a series of investments, or a series of redemptions over any
time period.
The Fund's performance may be compared with the performance of other mutual
funds tracked by mutual fund rating services or with other indexes of market
performance. This may include comparisons with funds that, unlike American
Century funds, are sold with a sales charge or deferred sales charge. Sources of
economic data that may be used for such comparisons may include, but are not
limited to, U.S. Treasury bill, note, and bond yields, money market fund yields,
U.S. government debt and percentage held by foreigners, the U.S. money supply,
net free reserves, and yields on current-coupon GNMAs (source: Board of
Governors of the Federal Reserve System); the federal funds and discount rates
(source: Federal Reserve Bank of New York); yield curves for U.S. Treasury
securities and AA/AAA-rated corporate securities (source: Bloomberg Financial
Markets); yield curves for AAA-rated tax-free municipal securities (source:
Telerate); yield curves for foreign government securities (sources: Bloomberg
Financial Markets and Data Resources, Inc.); total returns on foreign bonds
(source: J.P. Morgan Securities Inc.); various U.S. and foreign government
reports; the junk bond market (source: Data Resources, Inc.); the CRB Futures
Index (source: Commodity Index Report); the price of gold (sources: London
a.m./p.m. fixing and New York Comex Spot Price); rankings of any mutual fund or
mutual fund category tracked by Lipper Analytical Services, Inc. or Morningstar,
Inc.; mutual fund rankings published in major nationally distributed
periodicals; data provided by the Investment Company Institute; Ibbotson
Associates, Stocks, Bonds, Bills, and Inflation; major indexes of stock market
performance; and indexes and historical data supplied by major securities
brokerage or investment advisory firms. The Fund may also utilize reprints from
newspapers and magazines furnished by third parties to illustrate historical
performance.
The Fund's shares are sold without a sales charge (or "load"). No-load
funds offer an advantage to investors when compared to load funds with
comparable investment objectives and strategies.
The Manager may obtain Fund ratings from one or more rating agencies and
may publish these ratings in advertisements and sales literature.
TAXES
FEDERAL INCOME TAX
The Fund intends to qualify each year as a "regulated investment company"
under Subchapter M of the Internal Revenue Code of 1986, as amended, (the "Code"
). To qualify as a regulated investment company and avoid being subject to
federal and state income taxes at the Fund level, the Fund must distribute
within each calendar year as well as each fiscal year substantially all of its
net investment income and net realized capital gains (if any) to shareholders.
In addition to federal income taxes, shareholders may be subject to state and
local taxes on their distributions from the Fund.
The information above is only a summary of some of the tax considerations
generally affecting the Fund and its shareholders. No attempt has been made to
discuss individual tax consequences.
10 American Century Investments
An investor considering an investment in the Fund should consult with his
or her tax advisors to determine whether the Fund is a suitable investment.
ABOUT THE TRUST
American Century Investment Trust (the "Trust") is a registered open-end
management investment company that was organized as a Massachusetts business
trust on June 16, 1993. The Trust was formerly known as Benham Investment Trust.
Currently American Century-Benham Prime Money Market Fund (formerly known as
Benham Prime Money Market Fund) is the only series of the Trust, although the
trustees are authorized to create additional series at their discretion.
The Declaration of Trust permits the Board of trustees to issue an
unlimited number of full and fractional shares of beneficial interest without
par value, which may be issued in series (or funds). Shares issued are fully
paid and nonassessable and have no preemptive, conversion, or similar rights.
If additional series were created by the board of trustees, each series
would vote separately on matters affecting that series exclusively. Voting
rights are not cumulative, so that investors holding more than 50% of the
Trust's (i.e., all series') outstanding shares may be able to elect a board of
trustees. The Trust instituted dollar-based voting, meaning that the number of
votes you are entitled to is based upon the dollar amount of your investment.
The election of trustees is determined by the votes received from all Trust
shareholders without regard to whether a majority of shares of any one series
voted in favor of a particular nominee or all nominees as a group.
Each shareholder has rights to dividends and distributions declared by the
Fund and to the net assets of the Fund upon its liquidation or dissolution
proportionate to his or her share ownership interest in the Fund.
Shareholders of a Massachusetts business trust could, under certain
circumstances, be held personally liable for its obligations. However, the
Declaration of Trust contains an express disclaimer of shareholder liability for
acts or obligations of the Trust. The Declaration of Trust also provides for
indemnification and reimbursement of expenses of any shareholder held personally
liable for obligations of the Trust. The Declaration of Trust provides that the
Trust will, upon request, assume the defense of any claim made against any
shareholder for any act or obligation of the Trust and satisfy any judgment
thereon. The Declaration of Trust further provides that the Trust may maintain
appropriate insurance (for example, fidelity, bonding, and errors and omissions
insurance) for the protection of the Trust, its shareholders, trustees,
officers, employees, and agents to cover possible tort and other liabilities.
Thus, the risk of a shareholder incurring financial loss as a result of
shareholder liability is limited to circumstances in which both inadequate
insurance exists and the Trust is unable to meet its obligations.
CUSTODIAN BANK: Chase Manhattan Bank, 4 Chase Metrotech Center, Brooklyn,
New York 11245 and Commerce Bank N.A., 1000 Walnut, Kansas City, Missouri 64106
serve as custodians of the Fund's assets. Services provided by the custodian
banks include (i) settling portfolio purchases and sales, (ii) reporting failed
trades, (iii) identifying and col-lecting portfolio income, and (iv) providing
safekeeping of securities. The custodians take no part in determining the Fund's
investment policies or in determining which securities are sold or purchased by
the Fund.
INDEPENDENT AUDITORS: KPMG Peat Marwick LLP, 1000 Walnut, Suite 1600,
Kansas City, Missouri 64106, serves as the Trust's independent auditors and
provides services including the audit of the annual financial statements.
For the current fiscal year, which started on March 1, 1997, the Trustees
of the Fund have selected Coopers & Lybrand LLP to serve as independent auditors
of the Fund. The address of Coopers & Lybrand LLP is City Center Square, 1100
Main Street, Suite 900, Kansas City, Missouri 64105-2140.
TRUSTEES AND OFFICERS
The Trust's activities are overseen by a board of trustees, including six
independent trustees. The individuals listed below whose names are marked by an
asterisk (*) are "interested persons" of the Trust (as defined in the 1940 Act)
by virtue of, among other considerations, their affiliation with either the
Trust; the Trust's investment advisor, Benham Management Corporation; the
Trust's agent for transfer and administrative services, American Century
Services
Statement of Additional Information 11
Corporation (ACS); the Trust's distribution agent, American Century Investment
Services, Inc.; their parent corporation, American Century Companies, Inc. (ACC)
or ACC`s subsidiaries; or other funds advised by the Manager. Each Trustee
listed below serves as a Trustee or Director of other funds advised by the
Manager. Unless otherwise noted, dates in parentheses indicate the dates the
trustee or officer began his or her service in a particular capacity. The
trustees' and officers' address with the exception of Mr. Stowers III and Ms.
Roepke is 1665 Charleston Road, Mountain View, California 94043. The address of
Mr. Stowers III and Ms. Roepke is American Century Tower, 4500 Main Street,
Kansas City, Missouri 64111.
TRUSTEES
*JAMES M. BENHAM, Chairman of the Board of Trustees (1993), President and
Chief Executive Officer (1996). Mr. Benham is also President and Chairman of the
Board of the Manager (1971); and a member of the Board of Governors of the
Investment Company Institute (1988). Mr. Benham has been in the securities
business since 1963, and he frequently comments through the media on economic
conditions, investment strategies, and the securities markets.
ALBERT A. EISENSTAT, independent Trustee (1995). Mr. Eisenstat is an
independent Director of each of Commercial Metals Co. (1982), Sungard Data
Systems (1991) and Business Objects S/A (1994). Previously, he served as Vice
President of Corporate Development and Corporate Secretary of Apple Computer and
served on its Board of Directors (1985 to 1993).
RONALD J. GILSON, independent trustee (1995). Mr. Gilson is the Charles J.
Meyers Professor of Law and Business at Stanford Law School (1979) and the Mark
and Eva Stern Professor of Law and Business at Columbia University School of Law
(1992); counsel to Marron, Reid & Sheehy (a San Francisco law firm, 1984).
MYRON S. SCHOLES, independent trustee (1993). Mr. Scholes is a principal of
Long-Term Capital Management (1993). He is also Frank E. Buck Professor of
Finance at the Stanford Graduate School of Business (1983) and a director of
Dimensional Fund Advisors (1982) and the Smith Breeden Family of Funds (1992).
From August 1991 to June 1993, Mr. Scholes was a managing director of Salomon
Brothers Inc. (securities brokerage).
KENNETH E. SCOTT, independent trustee (1993). Mr. Scott is Ralph M. Parsons
Professor of Law and Business at Stanford Law School (1972) and a director of
RCM Capital Funds, Inc. (June 1994).
ISAAC STEIN, independent Trustee (1993). Mr. Stein is former Chairman of
the Board (1990 to 1992) and Chief Executive Officer (1991 to 1992) of Esprit de
Corp. (clothing manufacturer). He is a member of the Board of Raychem
Corporation (electrical equipment, 1993), President of Waverley Associates, Inc.
(private investment firm, 1983), and a Director of ALZA Corporation
(pharmaceuticals, 1987). He is also a Trustee of Stanford University (1994) and
Chairman of Stanford Health Services (hospital, 1994).
*JAMES E. STOWERS III, Trustee (1995). Mr. Stowers III is Chief Executive
Officer and Director of ACC; President, Chief Executive Officer and Director of
ACS and ACIS.
JEANNE D. WOHLERS, independent Trustee (1993). Ms. Wohlers is a private
investor and an independent Director and Partner of Windy Hill Productions, LP.
Previously, she served as Vice President and Chief Financial Officer of Sybase,
Inc. (software company, 1988 to 1992).
OFFICERS
*JAMES M. BENHAM, President and Chief Executive Officer (1996).
*WILLIAM M. LYONS, Executive Vice President (1996); President, Chief
Operating Officer and General Counsel of ACC; Executive Vice President, Chief
Operating Officer and General Counsel of ASC and ACIS; Assistant Secretary of
ACC; Secretary of ACS and ACIS.
*DOUGLAS A. PAUL, Secretary (1993), Vice President (1993), and General
Counsel (1993); Secretary and Vice President of the funds advised by the
Manager.
*C. JEAN WADE, Controller (1996).
*MARYANNE ROEPKE, CPA, Chief Financial Officer and Treasurer (1995); Vice
President and Assistant Treasurer of ACS.
The table on the next page summarizes the compensation that the trustees
received for the Fund's fiscal year ended February 28, 1997, as well as the
compensation received for serving as a director or trustee of all other funds
advised by the Manager.
As of May 31, 1997, the Fund's Trustees and officers, as a group, owned
less than 1% of the Fund's total shares outstanding.
12 American Century Investments
INVESTMENT MANAGEMENT
The Fund has an investment advisory agreement with the Manager dated June
1, 1995, that was approved by the Fund's shareholders on May 31, 1995.
The Manager is a California corporation and became a wholly owned
subsidiary of ACC on June 1, 1995. The Manager has served as investment advisor
to the Fund since the Fund`s inception. ACC is a holding company that owns all
of the stock of the operating companies that provide the investment management,
transfer agency, shareholder service, and other services for the American
Century funds. James E. Stowers, Jr. controls ACC by virtue of his ownership of
a majority of its common stock. The Manager has been a registered investment
advisor since 1971.
The Fund`s agreement with the Manager continues for an initial period of
two years and thereafter from year-to-year provided that, after the initial two
year period, it is approved at least annually by vote of a majority of the votes
of shareholders of the Fund`s or by a vote of a majority of the Fund`s trustees,
including a majority of those trustees who are neither parties to the agreement
nor interested persons of any such party, cast in person at a meeting called for
the purpose of voting on such approval.
The investment advisory agreement is terminable on 60 days' written notice,
either by the Fund or by the Manager, to the other party and terminates
automatically in the event of its assignment.
Pursuant to the investment advisory agreement, the Manager provides the
Fund with investment advice and portfolio management services in accordance with
the Fund's investment objective, policies, and restrictions. The agreement also
provides that the Manager will determine what securities will be purchased and
sold by the Fund and assist the Trust's officers in carrying out decisions made
by the board of trustees.
For these services, the Fund pays the Manager a monthly investment advisory
fee equal to its pro rata share of the dollar amount derived from applying the
Trust's average daily net assets to the following investment advisory fee
schedule:
.50% of the first $100 million;
.45% of the next $100 million;
.40% of the next $100 million;
.35% of the next $100 million;
.30% of the next $100 million;
.25% of the next $1 billion;
.24% of the next $1 billion;
.23% of the next $1 billion;
.22% of the next $1 billion;
.21% of the next $1 billion;
.20% of the next $1 billion; and
.19% of average daily net assets over $6.5 billion.
Investment advisory fees paid by the fund to the Manager for the fiscal
years ended February 28, 1997, February 29, 1996, and February 28, 1995, are
<TABLE>
<CAPTION>
TRUSTEE COMPENSATION FOR THE FISCAL YEAR ENDED February 28, 1997
Aggregate Pension or Retirement Estimated Total Compensation
Name of Compensation Benefits Accrued As Part Annual Benefits From Fund and Fund
Trustee* From The Fund of Fund Expenses Upon Retirement Complex** Paid to Trustees
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Albert A. Eisenstat $9,024 Not Applicable Not Applicable $72,250
Ronald J. Gilson $8,607 Not Applicable Not Applicable $68,000
Myron S. Scholes $8,154 Not Applicable Not Applicable $63,500
Kenneth E. Scott $9,584 Not Applicable Not Applicable $78,000
Ezra Solomon*** $8,414 Not Applicable Not Applicable $36,417
Isaac Stein $8,704 Not Applicable Not Applicable $69,000
Jeanne D. Wohlers $9,487 Not Applicable Not Applicable $77,000
- --------------------------------------------------------------------------------------------------------------------------
* Interested Trustees receive no compensation for their services as such.
** American Century family of funds includes nearly 70 no-load mutual funds.
*** Retired
</TABLE>
Statement of Additional Information 13
indicated in the following table. Fee amounts are net of amounts reimbursed or
recouped.
Fiscal Investment Reimbursed
Year Ended Advisory Fees Paid (Recouped)
- ------------------------------------------------------
1997 $2,265,360 $1,584,981
1996 $2,316,045 $1,839,833
1995 $0 $2,708,338
- ------------------------------------------------------
Commencement of operations was November 17, 1993.
TRANSFER AND ADMINISTRATIVE SERVICES
American Century Services Corporation, 4500 Main Street, Kansas City,
Missouri 64111 (ACS) acts as transfer, administrative services and dividend
paying agent for the Fund. ACS provides facilities, equipment and personnel to
the Fund and is paid for such services by the Fund. For administrative services,
each Fund pays ACS a monthly fee equal to its pro rata share of the dollar
amount derived from applying the average daily net assets of all of the Funds
advised by the Manager to the following administrative fee rate schedule:
Group Assets Administrative Fee Rate
- -------------------------------------------------
up to $4.5 billion .11%
up to $6 billion .10
up to $9 billion .09
over $9 billion .08
- -------------------------------------------------
For transfer agent services, the Fund pays ACS a monthly fee of $1.3958 for
each shareholder account maintained and $1.35 for each shareholder transaction
executed during the month.
The Fund paid $1,844,608 and $1,975,550 in transfer agent fees and
$1,188,257 and $1,319,915 in administrative fees for the fiscal years ended
February 28, 1997, and February 29, 1996, respectively.
Due to the expense limitation agreements described below, the Fund paid no
transfer agent or administrative fees for the fiscal year ended February 28,
1995, or for the period from November 17, 1993 (commencement of operations),
through February 28, 1994.
DISTRIBUTION OF FUND SHARES
The Fund's shares are distributed by American Century Investment Services,
Inc. (the "Distributor"), a registered broker-dealer and an affiliate of the
Manager. The Manager pays all expenses for promoting and distributing the Fund's
shares. The Fund does not pay any commissions or other fees to the Distributor
or to any other broker-dealers or financial intermediaries in connection with
the distribution of Fund shares.
DIRECT FUND EXPENSES
The Fund pays certain operating expenses that are not assumed by the
Manager or ACS. These include fees and expenses of the independent Trustees;
custodian, audit, tax preparation, and pricing fees; fees of outside counsel and
counsel employed directly by the Trust; costs of printing and mailing
prospectuses, statements of additional information, proxy statements, notices,
confirmations, and reports to shareholders; fees for registering the Fund's
shares under federal and state securities laws; brokerage fees and commissions
(if any); trade association dues; costs of fidelity and liability insurance
policies covering the Fund; costs for incoming WATS lines maintained to receive
and handle shareholder inquiries; and organizational costs.
EXPENSE LIMITATION AGREEMENT
Under an Expense Limitation Agreement between the Fund and the Manager, the
Manager is obligated to limit the Fund's expenses to .50% of average daily net
assets through May 31, 1998.
The Expense Limitation Agreement provides that the Manager may recover
amounts (representing expenses in excess of the limitation) reimbursed to the
Fund during the preceding 11 months if, and to the extent that, for any given
month, the Fund's expenses were less than the lower of the contractual or
voluntary expense limitation in effect at that time.
VOLUNTARY EXPENSE REIMBURSEMENT AGREEMENT. As a supplement to the Expense
Limitation Agree-ment, the Manager voluntarily reimbursed the Fund for all
expenses through December 31, 1994. On January 1, 1995, the Fund began paying
expenses equal to an additional .10% of average daily net assets
14 American Century Investments
and continued to do so each subsequent month until the expense limit was reached
on May 1, 1995. Voluntary expense reimbursements are not eligible for recovery
by the Manager.
For the fiscal year ended February 28, 1995, and for the period November
17, 1993 (commencement of operations), through February 28, 1994, the Manager
reimbursed the Fund for $5,451,506 and $164,816 of the Fund's expenses,
respectively.
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION
The Fund's shares are continuously offered at net asset value. Share
certificates are issued (without charge) only when requested in writing.
Certificates are not issued for fractional shares. Dividend and voting rights
are not affected by the issuance of certificates.
As of May 31, 1997, to the Fund`s knowledge, no shareholder was the record
holder or beneficial owner of 5% or more of the Fund`s total shares outstanding.
American Century may reject or limit the amount of an investment to prevent
any one shareholder or affiliated group from controlling the Trust or its
series; to avoid jeopardizing a series' tax status; or whenever, in management's
opinion, such rejection or limitation is in the Trust's or a series' best
interest.
ACS charges neither fees nor commissions on the purchase and sale of fund
shares. However, ACS may charge fees for special services requested by a
shareholder or necessitated by acts or omissions of a shareholder. For example,
ACS may charge a fee for processing dishonored investment checks or stop-payment
requests. See the Investor Services Guide for more information.
When it is in the best interest of the Fund and its shareholders (for
example, to deter abusive market timing transactions), the Fund may honor
redemption requests in kind, normally by delivering portfolio securities in lieu
of cash. Securities delivered as redemptions in kind will be valued by the same
method used to value securities in determining the Fund's NAV. Shareholders who
receive securities may realize a capital gain or loss for tax purposes, incur
costs in handling or disposing of the securities, or encounter other
inconveniences.
Share purchases and redemptions are governed by California law.
OTHER INFORMATION
The Fund's investment advisor has been continuously registered with the SEC
under the Investment Advisers Act of 1940 since December 14, 1971. The Trust has
filed a registration statement under the Securities Act of 1933 and the 1940 Act
with respect to the shares offered. These registrations do not imply approval or
supervision of the Trust or the advisor by the SEC.
For further information, please refer to the registration statement and
exhibits on file with the SEC in Washington, DC. These documents are available
upon payment of a reproduction fee. Statements in the Prospectus and in this
Statement of Additional Information concerning the contents of contracts or
other documents, copies of which are filed as exhibits to the registration
statement, are qualified by reference to such contracts or documents.
SECURITIES RATINGS
Securities rating descriptions provided under this heading are excerpted
from publications of Moody's Investors Service, Inc. and Standard & Poor's
Corporation.
DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC.'S
BOND RATINGS:
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 constitute 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 long-term risks appear somewhat larger than in 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,
Statement of Additional Information 15
but elements may be present that suggest a susceptibility to impairment sometime
in the future.
Baa: Bonds that are rated "Baa" are considered 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 a 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 limited.
Caa: Bonds that are rated "Caa" are of poor standing. Such issues may be in
default, or there may be elements of danger present with respect to principal or
interest.
Ca: Bonds that are rated "Ca" represent obligations that are speculative to
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.
NOTE: MOODY'S MAY APPLY THE NUMERICAL MODIFIER "1" FOR MUNICIPALLY BACKED
BONDS AND MODIFIERS "1," "2," AND "3" FOR CORPORATE-BACKED MUNICIPAL BONDS. THE
MODIFIER "1" INDICATES THAT THE SECURITY RANKS IN THE HIGHER END OF ITS GENERIC
RATING CATEGORY; THE MODIFIER "2" INDICATES A MID-RANGE RANKING, AND THE
MODIFIER "3" INDICATES THAT THE ISSUE RANKS IN THE LOWER END OF ITS GENERIC
RATING CATEGORY.
DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC.'S RATINGS OF NOTES AND
VARIABLE-RATE DEMAND OBLIGATIONS:
Moody's ratings for state and municipal short-term obligations are
designated Moody's Investment Grade or MIG. Such ratings recognize the
differences between short-term credit and long-term risk. Short-term ratings on
issues with demand features (variable-rate demand obligations) are
differentiated by the use of the VMIG symbol to reflect such characteristics as
payment upon periodic demand rather than on fixed maturity dates and payments
relying on external liquidity.
MIG 1/VMIG 1: This designation denotes best quality. There is strong
protection present through established cash flows, superior liquidity support,
or demonstrated broad-based access to the market for refinancing.
MIG 2/VMIG 2: This denotes high quality. Margins of protection are ample,
although not as large as in the preceding group.
DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC.'S
COMMERCIAL PAPER RATINGS:
Moody's commercial paper ratings are opinions of the ability of issuers to
punctually repay those promissory obligations that have an original maturity not
exceeding nine months. Moody's makes no representation that such obligations are
exempt from registration under the Securities Act of 1933, nor does it represent
that any specific note is a valid obligation of a rated issuer or issued in
conformity with any applicable law. The following designations, all judged to be
investment grade, indicate the relative repayment ability of rated issuers of
securities in which the Funds may invest.
PRIME 1: Issuers rated "Prime 1" (or supporting institutions) have a
superior ability for repayment of senior short-term promissory obligations.
PRIME 2: Issuers rated "Prime 2" (or supporting institutions) have a strong
ability for repayment of senior short-term promissory obligations.
DESCRIPTION OF STANDARD & POOR'S CORPORATION'S RATINGS FOR BONDS:
INVESTMENT GRADE
AAA: Debt rated "AAA" has the highest rating assigned by Standard & Poor's.
Capacity to pay interest and repay principal is extremely strong.
AA: Debt rated "AA" has a very strong capacity to pay interest and repay
principal and differs from the highest-rated issues only in a small degree.
16 American Century Investments
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.
SPECULATIVE
BB, B, CCC, CC: Debt rated in these categories is regarded as having
predominantly speculative characteristics with respect to capacity to pay
interest and repay principal. While such debt will likely have some quality and
protective characteristics, these are outweighed by large uncertainties or major
risk exposures to adverse conditions.
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 that 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" debt rating.
C: The "C" rating is typically 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 "CI" rating is reserved for income bonds on which no interest is
being paid.
D: Debt rated "D" is in default, and payment of interest and/or repayment
of principal is in arrears.
PLUS (+) OR MINUS (-): The ratings from "AA" to "CCC" may be modified by
the addition of a plus or minus sign to show relative standing within the major
rating categories.
DESCRIPTION OF STANDARD & POOR'S CORPORATION'S RATINGS FOR INVESTMENT GRADE
NOTES AND SHORT-TERM DEMAND OBLIGATIONS:
SP-1: Issues carrying this designation have a very strong or strong
capacity to pay principal and interest. Those issues determined to possess
overwhelming safety characteristics will be given a plus (+) designation.
SP-2: Issues carrying this designation have a satisfactory capacity to pay
principal and interest.
DESCRIPTION OF STANDARD & POOR'S CORPORATION'S RATINGS FOR DEMAND OBLIGATIONS
AND COMMERCIAL PAPER:
A Standard & Poor's commercial paper rating is a current assessment of the
likelihood of timely payment of debt having an original maturity of no more than
365 days. The two rating categories for securities in which the Funds may invest
are as follows:
A-1: This highest category indicates that the degree of safety regarding
timely payment is strong. Those issues determined to possess extremely strong
safety characteristics are denoted with a plus (+) designation.
A-2: Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as high as for
issues designated "A-1."
Statement of Additional Information 17
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
Internet: www.americancentury.com
[american century logo]
American
Century(sm)
9701
SH-BKT-8751
<PAGE>
AMERICAN CENTURY INVESTMENT TRUST
1933 Act Post-Effective Amendment No. 5
1940 Act Amendment No. 6
- --------------------------------------------------------------------------------
PART C OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) FINANCIAL STATEMENTS. Audited financial statements for American Century
- Benham Prime Money Market Fund for the fiscal year ended February 28,
1997, are filed herein as included in the Fund's Statement of
Additional Information by reference to the Annual Report dated February
28, 1997, filed on April 23, 1997 (Accession # 0000908406-97-000003).
(b) EXHIBITS.
(1) (a)Amended and Restated Declaration of Trust, dated June 16, 1993
and amended May 31, 1995, is incorporated herein by reference to
Exhibit 1 of Post-Effective Amendment No. 3 filed on April 24,
1996 (Accession # 0000908406-96-000004).
(b)Amendment to the Declaration of Trust dated October 21, 1996
is included herein.
(2) Amended and Restated Bylaws, dated May 17, 1995, are incorporated
herein by reference to Exhibit 2 of Post-Effective Amendment No.
3 filed on April 24, 1996 (Accession # 0000908406-96-000004).
(3) Not applicable.
(4) Specimen copy of American Century - Benham Prime Money Market
Fund's share certificate is incorporated herein by reference to
Exhibit 4 of the Trust's Registration Statement filed on June 28,
1993.
(5) Investment Advisory Agreement between American Century Investment
Trust and Benham Management Corporation, dated June 1, 1995, is
incorporated herein by reference to Exhibit 5 of Post-Effective
Amendment No. 3 filed on April 24, 1996 (Accession #
0000908406-96-000004).
(6) Distribution Agreement between American Century Investment Trust
and American Century Investment Services, Inc. dated as of
September 3, 1996, is incorporated herein by reference to Exhibit
6 of Post-Effective Amendment No. 30 to the Registration
Statement of the American Century Government Income Trust filed
on November 25, 1996 (Accession # 773674-96-000009).
(7) Not applicable.
(8) Custodian Agreement between American Century Investment Trust and
The Chase Manhattan Bank, dated August 9, 1996, is incorporated
herein by reference to Exhibit 8 to Post-Effective Amendment No.
31 of American Century Government Income Trust filed on February
7, 1997 (Accession #773674-97-000002).
(9) Administrative Services and Transfer Agency Agreement between
American Century Investment Trust and American Century Services
Corporation dated as of September 3, 1996, is incorporated herein
by reference to Exhibit 9 of Post-Effective Amendment No. 30 to
the Registration Statement of the American Century Government
Income Trust filed on November 25, 1996 (Accession #
773674-96-000009).
(10) Opinion and consent of counsel as to the legality of the
securities being registered, dated April 11, 1997 is incorporated
herein by reference to Rule 24f-2 Notice filed on April 11, 1997
(Accession # 908406-97-000002).
(11) Consent of KPMG Peat Marwick LLP, independent auditors, is
included herein.
(12) Not applicable.
(13) Letter of Understanding relating to initial capital, dated
October 4, 1993 is incorporated herein by reference to Exhibit 13
of Pre-Effective Amendment No. 1 filed on October 6, 1993.
(14) (a)American Century Individual Retirement Account Plan, including
all instructions and other relevant documents, dated February
1992, is incorporated herein by reference to Exhibit 14(a) of the
Trust's Registration Statement filed on June 28, 1993.
(b)American Century Pension/Profit Sharing Plan, including all
instructions and other relevant documents, dated February 1992,
is incorporated herein by reference to Exhibit 14(b) of the
Trust's Registration Statement filed on June 28, 1993.
(15) Not applicable.
(16) Schedule for computation of each performance quotation provided
in response to Item 22 is included herein.
(17) Power of Attorney dated February 28, 1997, is included herein.
Item 25. Persons Controlled by or Under Common Control with Registrant.
Not applicable.
Item 26. Number of Holders of Securities.
As of April 30, 1997, American Century - Benham Prime Money Market Fund (the
sole operating series of American Century Investment Trust) had 52,651
shareholders of record.
Item 27. Indemnification.
As stated in Article VII, Section 3 of the Declaration of Trust, incorporated
herein by reference to Exhibit 1 to the Registration Statement, "The Trustees
shall be entitled and empowered to the fullest extent permitted by law to
purchase insurance for and to provide by resolution or in the Bylaws for
indemnification out of Trust assets for liability and for all expenses
reasonably incurred or paid or expected to be paid by a Trustee or officer in
connection with any claim, action, suit, or proceeding in which he or she
becomes involved by virtue of his or her capacity or former capacity with the
Trust. The provisions, including any exceptions and limitations concerning
indemnification, may be set forth in detail in the Bylaws or in a resolution
adopted by the Board of Trustees."
Registrant hereby incorporates by reference, as though set forth fully herein,
Article VI of the Registrant's Bylaws, amended on May 17, 1995, appearing as
Exhibit 2 of Post-Effective Amendment No. 3 filed on April 24, 1996 (Accession #
908406-96-000004).
Item 28. Business and Other Connections of Investment Advisor.
The Registrant's investment advisor, Benham Management Corporation, provides
investment advisory services for various collective investment vehicles and
institutional clients and serves as investment advisor to a number of open-end
investment companies.
Item 29. Principal Underwriters.
The Registrant's distribution agent, American Century Investment Services, Inc.,
is distribution agent to American Century Capital Preservation Fund, Inc.,
American Century Capital Preservation Fund II, Inc., American Century California
Tax-Free and Municipal Funds, American Century Government Income Trust, American
Century Municipal Trust, American Century Target Maturities Trust, American
Century Quantitative Equity Funds, American Century International Bond Funds,
American Century Investment Trust, American Century Manager Funds, American
Century Variable Portfolios, Inc., American Century Capital Portfolios, Inc.,
American Century Mutual Funds, Inc., American Century Premium Reserves, Inc.,
American Century Strategic Asset Allocations, Inc. and American Century World
Mutual Funds, Inc. The information required with respect to each director,
officer or partner of American Century Investment Services, Inc. is incorporated
herein by reference to American Century Investment Services, Inc. Form B-D filed
on November 21, 1985 (SEC File No. 8-35220; Firm CRD No. 17437).
Item 30. Location of Accounts and Records.
Benham Management Corporation, the Registrant's investment advisor, maintains
its principal office at 1665 Charleston Road, Mountain View, CA 94043. The
Registrant and its agent for transfer and administrative services, American
Century Services Corporation, maintains their principal office at 4500 Main St.,
Kansas City, MO 64111. American Century Services Corporation maintains physical
possession of each account, book, or other document, and shareholder records as
required by ss.31(a) of the 1940 Act and rules thereunder. The computer and data
base for shareholder records are located at Central Computer Facility, 401 North
Broad Street, Sixth Floor, Philadelphia, PA 19108.
Item 31. Management Services.
Not applicable.
Item 32. Undertakings.
Registrant 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.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant has duly caused this Post-Effective
Amendment No. 5/Amendment No. 6 to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Mountain View, and State of
California, on the 27th day of June, 1997. I hereby certify that this Amendment
meets the requirements for immediate effectiveness pursuant to Rule 485(b).
AMERICAN CENTURY INVESTMENT TRUST
By: /s/ Douglas A. Paul
Douglas A. Paul
Vice President, Secretary, and General Counsel
Pursuant to the requirements of the Securities Act of 1933, this Post-Effective
Amendment No. 5/Amendment No. 6 has been signed below by the following persons
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Date
<S> <C> <C>
* Chairman of the Board of Trustees, June 27, 1997
- --------------------------------- President, and
James M. Benham Chief Executive Officer
* Trustee June 27, 1997
- ---------------------------------
Albert A. Eisenstat
* Trustee June 27, 1997
- ---------------------------------
Ronald J. Gilson
* Trustee June 27, 1997
- ---------------------------------
Myron S. Scholes
* Trustee June 27, 1997
- ---------------------------------
Kenneth E. Scott
* Trustee June 27, 1997
- ---------------------------------
Isaac Stein
* Trustee June 27, 1997
- ---------------------------------
James E. Stowers III
* Trustee June 27, 1997
- ---------------------------------
Jeanne D. Wohlers
* Chief Financial Officer, Treasurer June 27, 1997
- ---------------------------------
Maryanne Roepke
</TABLE>
/s/ Douglas A. Paul
*by Douglas A. Paul, Attorney in Fact (pursuant to a Power of Attorney dated
February 28, 1997).
EXHIBIT DESCRIPTION
EX-99.B1a Amended and Restated Declaration of Trust, dated June 16, 1993 and
amended May 31, 1995, is incorporated herein by reference to Exhibit
1 of Post-Effective Amendment No. 3 filed on April 24, 1996
(Accession # 0000908406-96-000004).
EX-99.B1b Amendment to the Declaration of Trust dated October 21, 1996 is
included herein.
EX-99.B2 Amended and Restated Bylaws, dated May 17, 1995, are incorporated
herein by reference to Exhibit 2 of Post-Effective Amendment No. 3
filed on April 24, 1996 (Accession # 0000908406-96-000004).
EX-99.B4 Specimen copy of American Century - Prime Money Market Fund's share
certificate is incorporated herein by reference to Exhibit 4 of the
Trust's Registration Statement filed on June 28, 1993.
EX-99.B5 Investment Advisory Agreement between American Century Investment
Trust and Benham Management Corporation, dated June 1, 1995, is
incorporated herein by reference to Exhibit 5 of Post-Effective
Amendment No. 3 filed on April 24, 1996 (Accession #
0000908406-96-000004).
EX-99.B6 Distribution Agreement between American Century Investment Trust and
American Century Investment Services, Inc. dated as of September 3,
1996, is incorporated herein by reference to Exhibit 6 of
Post-Effective Amendment No. 30 to the Registration Statement of the
American Century Government Income Trust filed on November 25, 1996
(Accession # 773674-96-000009).
EX-99.B8 Custodian Agreement between American Century Investment Trust and
The Chase Manhattan Bank, dated August 9, 1996, is incorporated
herein by reference to Exhibit 8 to Post-Effective Amendment No. 31
of American Century Government Income Trust filed on February 7,
1997 (Accession #773674-97-000002).
EX-99.B9 Administrative Services and Transfer Agency Agreement between
American Century Investment Trust and American Century Services
Corporation dated as of September 3, 1996, is incorporated herein by
reference to Exhibit 9 of Post-Effective Amendment No. 30 to the
Registration Statement of the American Century Government Income
Trust filed on November 25, 1996 (Accession # 773674-96-000009).
EX-99.B10 Opinion and consent of counsel as to the legality of the securities
being registered, dated April 11, 1997 is incorporated herein by
reference to Rule 24f-2 Notice filed on April 11, 1997 (Accession #
908406-97-000002).
EX-99.B11 Consent of KPMG Peat Marwick LLP, independent auditors, is included
herein.
EX-99.B13 Letter of Understanding relating to initial capital, dated October
4, 1993 is incorporated herein by reference to Exhibit 13 of
Pre-Effective Amendment No. 1 filed on October 6, 1993.
EX-99.B14 a) American Century Individual Retirement Account Plan, including
all instructions and other relevant documents, dated February 1992,
is incorporated herein by reference to Exhibit 14(a) of the Trust's
Registration Statement filed on June 28, 1993.
b) American Century Pension/Profit Sharing Plan, including all
instructions and other relevant documents, dated February 1992, is
incorporated herein by reference to Exhibit 14(b) of the Trust's
Registration Statement filed on June 28, 1993.
EX-99.B16 Schedule for computation of each performance quotation provided in
response to Item 22 is included herein.
EX-99.B17 Power of Attorney dated February 28, 1997 is included herein.
EX-27.4 Financial Data Schedule.
AMENDMENT
TO THE
DECLARATION OF TRUST
OF
BENHAM INVESTMENT TRUST
October 21, 1996
WHEREAS, Section 1 of Article I of the Declaration of Trust provides
that the Trustees may designate a new name for the Trust, or any Series, to be
effective upon execution by a majority of the Trustees of an instrument setting
forth the new names;
WHEREAS, the Trustees have determined that it is appropriate and in the
interests of the Trust to change the name of the Trust and its Series as set
forth below;
RESOLVED, that the Trust shall henceforth be known as the "American
Century Investment Trust";
RESOLVED FURTHER, that the existing Series be renamed as follows (new
language appears in boldface type, deleted language is struck through):
<TABLE>
<S> <C>
Former Name New Name
- ------------------------------------------------------------ --------------------------------------------------------
- ------------------------------------------------------------ --------------------------------------------------------
Benham Prime Money Market Fund American Century - Benham Prime Money Market Fund
- ------------------------------------------------------------ --------------------------------------------------------
</TABLE>
<TABLE>
Trustees of the Benham Investment Trust
<S> <C> <C> <C>
/s/ James M. Benham 10/21/96 /s/ Ezra Solomon 10/21/96
- ---------------------------------------- ------------- ---------------------------------------- --------
James M. Benham* Date Ezra Solomon* Date
/s/ Albert A. Eisenstat 10/21/96 /s/ Isaac Stein 10/21/96
- ---------------------------------------- ------------- ---------------------------------------- --------
Albert A. Eisenstat* Date Isaac Stein* Date
/s/ Ronald J. Gilson 10/21/96 /s/ James E. Stowers III 10/21/96
- ---------------------------------------- ------------- ---------------------------------------- --------
Ronald J. Gilson* Date James E. Stowers III* Date
/s/ Myron S. Scholes 10/21/96 /s/ Jeanne D. Wohlers 10/21/96
- ---------------------------------------- ------------- ---------------------------------------- --------
Myron S. Scholes* Date Jeanne D. Wohlers* Date
/s/ Kenneth E. Scott 10/21/96
- ---------------------------------------- -------------
Kenneth E. Scott* Date
*By: /s/Douglas A. Paul Date: October 21, 1996
------------------
Douglas A. Paul, Esq.
Pursuant to Power of Attorney dated March 4, 1996
</TABLE>
Consent of Independent Auditors
The Board of Trustees and Shareholders
American Century Investment Trust:
We consent to the inclusion in American Century Investment Trust's
Post-Effective Amendment No. 5 to the Registration Statement No. 33-65170 on
Form N-1A under the Securities Act of 1933 and Amendment No. 6 to the
Registration Statement No. 811-7822 filed on Form N-1A under the Investment
Company Act of 1940 of our report dated April 4, 1997 on the financial
statements and financial highlights of the American Century-Benham Prime Money
Market Fund (the sole fund comprising the American Century Investment Trust) for
the periods indicated therein, which report has been incorporated by reference
into the Statement of Additional Information of American Century Investment
Trust. We also consent to the reference to our firm under the heading "Financial
Highlights" in the Prospectus and under the heading "About the Trust" in the
Statement of Additional Information which is incorporated by reference in the
Prospectus.
/s/KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Kansas City, Missouri
June 27, 1997
AMERICAN CENTURY - BENHAM PRIME MONEY MARKET FUND
YIELD CALCULATION
FEBRUARY 28, 1997
Effective Yield: = [(Base Period Return + 1) 365/7 ] - 1
Base Period Return = 0.0009473
7 Day Effective Yield = 5.06%
Yield = I/B X 365/7
Y = Yield
I = total income of hypothetical account over the seven day
period
B = beginning account value
I = 0.00094725
B = $1.00
7 Day Current Yield = 4.94%
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, AMERICAN CENTURY
INVESTMENT TRUST, hereinafter called the "Trust" and certain trustees and
officers of the Trust, do hereby constitute and appoint James M. Benham, James
E. Stowers, III, William M. Lyons, Douglas A. Paul, and Patrick A. Looby, and
each of them individually, their true and lawful attorneys and agents to take
any and all action and execute any and all instruments which said attorneys and
agents may deem necessary or advisable to enable the Trust to comply with the
Securities Act of 1933 and/or the Investment Company Act of 1940, as amended,
and any rules regulations, orders, or other requirements of the United States
Securities and Exchange Commission thereunder, in connection with the
registration under the Securities Act of 1933 and/or the Investment Company Act
of 1940, as amended, including specifically, but without limitation of the
foregoing, power and authority to sign the name of the Trust in its behalf and
to affix its seal, and to sign the names of each of such trustees and officers
in their capacities as indicated, to any amendment or supplement to the
Registration Statement filed with the Securities and Exchange Commission under
the Securities Act of 1933 and/or the Investment Company Act of 1940, as
amended, and to any instruments or documents filed or to be filed as a part of
or in connection with such Registration Statement; the Registration Statement on
Form N-14 and any amendments or supplements thereto to be filed with the
Securities and Exchange Commission under the Securities Act of 1933 and/or the
Investment Company Act of 1940, as amended, and to any instruments or documents
filed or to be filed as part of or in connection with such Registration
Statement; and each of the undersigned hereby ratifies and confirms all that
said attorneys and agents shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the Trust has caused this Power to be executed by
its duly authorized officers on this the 28th day of February, 1997.
AMERICAN CENTURY INVESTMENT TRUST
(A Massachusetts Business Trust)
By: /s/James M. Benham
James M. Benham, President
SIGNATURE AND TITLE
/s/James M. Benham /s/Issac Stein
James M. Benham Isaac Stein
Chairman Director
/s/Albert A. Eisenstat /s/Jeanne D. Wohlers
Albert A. Eisenstat Jeanne D. Wohlers
Director Director
/s/Ronald J. Gilson /s/James E. Stowers, III
Ronald J. Gilson James E. Stowers, III
Director Director
/s/Myron S. Scholes /s/Maryanne Roepke
Myron S. Scholes Maryanne Roepke
Director Treasurer
/s/Kenneth E. Scott
Kenneth E. Scott
Director Attest:
By: /s/Douglas A. Paul, Secretary
Douglas A. Paul, Secretary
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 1
<NAME> AMERICAN CENTURY-BENHAM PRIME MONEY MARKET FUND
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> FEB-28-1997
<PERIOD-END> FEB-28-1997
<INVESTMENTS-AT-COST> 1,158,215,011
<INVESTMENTS-AT-VALUE> 1,158,215,011
<RECEIVABLES> 46,631,318
<ASSETS-OTHER> 12,239,249
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,217,085,578
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 5,095,255
<TOTAL-LIABILITIES> 5,095,255
<SENIOR-EQUITY> 1,212,268,858
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 1,212,268,858
<SHARES-COMMON-PRIOR> 1,270,653,403
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (278,535)
<NET-ASSETS> 1,211,990,323
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 6,201,870
<NET-INVESTMENT-INCOME> 61,135,898
<REALIZED-GAINS-CURRENT> (278,535)
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 60,857,363
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 61,135,898
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,722,837,328
<NUMBER-OF-SHARES-REDEEMED> 1,839,630,699
<SHARES-REINVESTED> 58,408,826
<NET-CHANGE-IN-ASSETS> (58,384,545)
<ACCUMULATED-NII-PRIOR> 0
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<GROSS-ADVISORY-FEES> 3,850,341
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 7,803,705
<AVERAGE-NET-ASSETS> 1,243,416,419
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> 0.05
<PER-SHARE-GAIN-APPREC> 0.00
<PER-SHARE-DIVIDEND> 0.05
<PER-SHARE-DISTRIBUTIONS> 0.00
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<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> 0.50
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
