Statement of Additional Information
[company logo]
American
Century(sm)
SEPTEMBER 3, 1996
Revised January 1, 1997
Benham
Group(R)
Prime Money Market
[front cover]
STATEMENT OF ADDITIONAL INFORMATION
SEPTEMBER 3, 1996
REVISED JANUARY 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 September 3, 1996 revised January 1, 1997. The
Fund's annual report for the fiscal year ended February 29, 1996 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 Advisory Services.............................12
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 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 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 all securities subject to a repurchase agreement and
holding them in an 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 its investment advisor.
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
COMMITMENTS 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 risks of price and
yield fluctuations. While the Fund will make commitments on a when-issued or
forward commitment basis 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 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 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
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 an 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
institutional 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 repurchase agreements
not entitling the holder to payment of principal and interest within seven
days and in securities that are illiquid by virtue of legal or contractual
restrictions on resale or the absence of a readily available market.
(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 29, 1996, 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 29, 1996, the Fund
held securities issued by the following brokers or dealers in the following
aggregate amounts: Merrill Lynch, $25,000,000 and Morgan Stanley Group,
$19,000,000.
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),
Presidents` Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day, and Christmas Day (observed). Although the Fund expects the
same holiday schedule to be observed in the future, the Exchange may modify its
holiday schedule at any time.
8 American Century Investments
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 29, 1996, the Fund's yield and effective
yield are indicated in the following table.
Effective
Yield Yield
- ------------------------------------------------------------------------
Prime 4.97% 5.09%
- ------------------------------------------------------------------------
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 compounded 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
Statement of Additional Information 9
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.
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.
10 American Century Investments
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 as 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, NY
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 bank include
(i) settling portfolio purchases and sales, (ii) reporting failed trades, (iii)
identifying and collecting portfolio income, and (iv) providing safekeeping of
securities. The custodian takes 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 (i) audit of annual financial statements and (ii) preparation
of annual federal income tax returns filed on behalf of the Fund.
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 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
Statement of Additional Information 11
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 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 President, Chief
Executive Officer and Director of ACC, 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); Executive Vice President,
Chief Operating Officer, General Counsel and Secretary of the Manager, 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 from the Fund for the Fund's fiscal year ended February 29, 1996, as
well as the compensation received for serving as a Director or Trustee of all
other funds advised by the Manager.
As of July 31, 1996, the Fund's trustees and officers, as a group, owned less
than 1% of the Fund's total shares outstanding.
INVESTMENT ADVISORY SERVICES
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
12 American Century Investments
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 29, 1996, February 28, 1995 and February 28, 1994 are indicated
in the following table. Fee amounts are net of amounts reimbursed or recouped.
Fiscal Investment Reimbursed
Year Ended Advisory Fees Paid (Recouped)
- ------------------------------------------------------------------------
1996 $2,316,045 $1,839,833
1995 $0 $2,708,338
1994* $0 $55,479
- ------------------------------------------------------------------------
* From November 17, 1993 (commencement of operations) to February 28, 1994.
<TABLE>
<CAPTION>
TRUSTEE COMPENSATION FOR THE FISCAL YEAR ENDED FEBRUARY 29, 1996
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 $428 Not Applicable Not Applicable $20,000
Ronald J. Gilson $6,579 Not Applicable Not Applicable $69,583
Myron S. Scholes $9,122 Not Applicable Not Applicable $68,625
Kenneth E. Scott $9,150 Not Applicable Not Applicable $75,898
Ezra Solomon $8,764 Not Applicable Not Applicable $68,875
Isaac Stein $9,198 Not Applicable Not Applicable $69,625
Jeanne D. Wohlers $9,103 Not Applicable Not Applicable $71,125
- ------------------------------------------------------------------------------------------------------------------
* Interested Trustees receive no compensation for their services as such.
** American Century family of funds includes nearly 70 no-load mutual funds.
</TABLE>
Statement of Additional Information 13
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 $1,975,550 in transfer agent fees and $1,319,915 in administrative
fees for the fiscal year ended February 29, 1996.
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
offered by this Prospectus. 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. After May 31, 1998, the expense limit will be
subject to annual renewal in June.
The Expense Limitation Agreement provides that the Manager may recover amounts
(representing expenses in excess of the contractual limit) 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.
The Manager absorbed $1,839,833 of the Fund's expenses for the fiscal year ended
February 29, 1996.
VOLUNTARY EXPENSE REIMBURSEMENT AGREEMENT. As a supplement to the Expense
Limitation Agreement, 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 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.
14 American Century Investments
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 July 31, 1996, 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.
Statement of Additional Information 15
Notes
16 American Century Investments
Notes
American Century Investments 17
P.O. Box 419200
Kansas City, Missouri
64141-6200
Person-to-person assistance:
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 816-753-1865
Fax: 816-340-7962
Internet: www.americancentury.com
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American
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