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._6_
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
-----
File No. 811-7822:
Amendment No._7_
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 June 1, 1998 pursuant to paragraph (b) of Rule 485
_____ 60 days after filing pursuant to paragraph (a) of Rule 485
_____ on (date) pursuant to paragraph (a)(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
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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 23, 1998, the Registrant filed a Rule
24f-2 Notice on Form 24f-2 with respect to its fiscal year ended February 28,
1998.
<PAGE>
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CROSS REFERENCE SHEET
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N-1A Item No. Location
------------- --------
PART A
Item 1. Cover Page Cover Page
Item 2. Synopsis Transaction and Operating
Expense Table
Item 3. Condensed Financial Financial Highlights
Information
Item 4. General Description Investment Policies of
Registrant the Funds; Risk Factors;
Other Investment
Practices, Their Characteristics
and Risks; Performance
Advertising; Distribution
of Fund Shares; Further
Information About
American Century
Item 5. Management of the Management
Fund
Item 6. Capital Stock and Further Information About
Other Securities American Century, How to Redeem Shares,
Cover Page, Distributions, Taxes
Item 7. Purchase of Securities How to Open An Account;
Being Offered How to Exchange From One
Account to Another;
Share Price; Distributions;
Item 8. Redemption How to Redeem Shares;
Signature Guarantee
Item 9. Pending Legal N/A
Proceedings
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PART B
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Item 10. Cover Page Cover Page
Item 11. Table of Contents Table of Contents
Item 12. General Information N/A
Item 13. Investment Objectives Investment Policies and Techniques;
and Policies Investment Restrictions;
Portfolio Transactions
Item 14. Management of the Officers and Trustees
Registrant
Item 15. Control Persons Additional Purchase and Redemption
and Principal Information
Holders of Securities
Item 16. Investment Advisory Management;
and Other Services Custodians
Item 17. Brokerage Allocation Brokerage;
Performance Advertising
Item 18. Capital Stock and Capital Stock;
Other Securities Multiple Class Structure
Item 19. Purchase, Redemption N/A
and Pricing of
Securities Being
Offered
Item 20. Tax Status N/A
Item 21. Underwriters Additional Purchase and Redemption
Information
Item 22. Calculation of Yield Performance Advertising
Quotations of Money
Market Funds
Item 23. Financial Statements Financial Statements
<PAGE>
PROSPECTUS
[american century logo(reg. sm)]
American
Century(reg.tm)
JUNE 1, 1998
BENHAM
GROUP(reg.tm)
Prime Money Market
INVESTOR CLASS
AMERICAN CENTURY INVESTMENTS
FAMILY OF FUNDS
American Century Investments offers you nearly 70 fund choices covering
stocks, bonds, money markets, specialty investments and blended portfolios. To
help you find the funds that may meet your investment needs, American Century
funds have been divided into three groups based on investment style and
objectives. These groups, which appear below, are designed to help simplify your
fund decisions.
AMERICAN CENTURY INVESTMENTS
- -------------------------------------------------------------------------------
Benham American Century Twentieth Century
Group Group Group
- -------------------------------------------------------------------------------
MONEY MARKET FUNDS ASSET ALLOCATION & GROWTH FUNDS
GOVERNMENT BOND FUNDS BALANCED FUNDS INTERNATIONAL FUNDS
DIVERSIFIED BOND FUNDS CONSERVATIVE EQUITY FUNDS
MUNICIPAL BOND FUNDS SPECIALTY FUNDS
- -------------------------------------------------------------------------------
Prime Money
Market
PROSPECTUS
JUNE 1, 1998
Prime Money Market
INVESTOR CLASS
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 is described in this Prospectus. Its investment objective is listed
on page 2 of the Prospectus. The other funds are described in separate
prospectuses.
Through its Investor Class of shares, American Century offers investors a
full line of no-load funds, investments that have no sales charges or
commissions.
This Prospectus gives you information about the fund that you should know
before investing. Please read this Prospectus carefully and retain it for future
reference. Additional information is included in the Statement of Additional
Information dated June 1, 1998, 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 * P.O. Box 419200
Kansas City, Missouri 64141-6200 * 1-800-345-2021
International calls: 816-531-5575
Telecommunications Device for the Deaf:
1-800-634-4113 * In Missouri: 816-444-3485
www.americancentury.com
Additional information, including this Prospectus and the Statement of
Additional Information, may be obtained by accessing the Web site maintained by
the SEC (www.sec.gov).
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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 the 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
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 ...................................................... 7
Government Obligations ................................................ 8
Variable and Floating-Rate Instruments ................................ 8
Rule 144A Securities .................................................. 8
U.S. Dollar-Denominated Foreign Securities ............................ 9
Other Investment Practices, Their Characteristics
and Risks ............................................................... 9
Repurchase Agreements ................................................. 9
When-Issued Securities ................................................ 9
Borrowing ............................................................. 9
Other Techniques ...................................................... 9
Performance Advertising ................................................... 9
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 ........................................................ 20
Transfer and Administrative Services .................................. 20
Year 2000 Issues ...................................................... 21
Distribution of Fund Shares ............................................... 21
Further Information About American Century ................................ 21
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:
(as a percentage of average net assets)
Management Fees(2) ................................................. 0.60%
12b-1 Fees ......................................................... none
Other Expenses(3) .................................................. 0.00%
Total Fund Operating Expenses (net of expense limitation) .......... 0.60%
EXAMPLE:
You would pay the following expenses on a 1 year $ 6
$1,000 investment, assuming a 5% annual return and 3 years 19
redemption at the end of each time period: 5 years 33
10 years 75
(1) Redemption proceeds sent by wire are subject to a $10 processing fee.
(2) A portion of the management fee may be paid by the manager to unaffiliated
third parties who provide recordkeeping and administrative services that
would otherwise be performed by an affiliate of the manager. See
"Management-Transfer and Administrative Services," page 20.
(3) Other Expenses, which includes the fees and expenses (including legal
counsel fees) of those trustees who are not "interested persons" as defined
in the Investment Company Act of 1940 (the Investment Company Act), are
expected to be less than 0.01 of 1% of the average net assets for the
current fiscal year.
The purpose of this table is to help you understand the various costs and
expenses that you, as a shareholder, will bear directly or indirectly in
connection with an investment in the class of shares of the fund offered by this
Prospectus. The example set forth above assumes reinvestment of all dividends
and distributions and uses a 5% annual rate of return as required by SEC
regulations.
NEITHER THE 5% RATE OF RETURN NOR THE EXPENSES SHOWN ABOVE SHOULD BE
CONSIDERED INDICATIONS OF PAST OR FUTURE RETURNS AND EXPENSES. ACTUAL RETURNS
AND EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
The shares offered by this Prospectus are Investor Class shares and have no
up-front or deferred sales charges, commissions, or 12b-1 fees. The fund offers
one other class of shares, primarily to institutional investors, that has a
different fee structure than the Investor Class. The difference in the fee
structures among the classes is the result of their separate arrangements for
shareholder and distribution services and not the result of any difference in
amounts charged by the manager for core investment advisory services.
Accordingly, the core investment advisory expenses do not vary by class. A
difference in fees will result in different performance for the other class. For
additional information about the various classes, see "Further Information About
American Century," page 21.
4 TRANSACTION AND OPERATING EXPENSE TABLE AMERICAN CENTURY INVESTMENTS
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
PRIME MONEY MARKET
The Financial Highlights for the fiscal year ended February 28, 1998, have
been audited by Coopers & Lybrand L.L.P., independent accountants, whose report
thereon appears in the fund's annual report, which is incorporated by reference
into the Statement of Additional Information. The Financial Highlights for the
periods ended on or before February 28, 1997, have been audited by other
independent accountants. The annual report contains 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.
1998 1997 1996(1) 1995 1994(2)
PER-SHARE DATA
Net Asset Value,
<S> <C> <C> <C> <C> <C>
Beginning of Period ................. $1.00 $1.00 $1.00 $1.00 $1.00
-------- -------- -------- -------- --------
Income From
Investment Operations
Net Investment Income ............. 0.05 0.05 0.06 0.05 0.01
-------- -------- -------- -------- --------
Distributions
From Net
Investment Income ................. (0.05) (0.05) (0.06) (0.05) (0.01)
-------- -------- -------- -------- --------
Net Asset Value, End of Period ...... $1.00 $1.00 $1.00 $1.00 $1.00
======== ======== ======== ======== ========
TOTAL RETURN(3) ................... 5.29% 5.04% 5.60% 4.93% 0.96%
RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses
to Average Net Assets ............... 0.50% 0.50% 0.48% 0.04% -
Ratio of Operating Expenses
to Average Net Assets
(Before Expense Waiver) ............. 0.63% 0.63% 0.62% 0.71% 1.49%(4)
Ratio of Net Investment Income
to Average Net Assets ............... 5.17% 4.92% 5.43% 5.28% 3.35%(4)
Ratio of Net Investment Income
to Average Net Assets
(Before Expense Waiver) ............. 5.04% 4.79% 5.29% 4.61% 1.86%(4)
Net Assets, End of Period
(in thousands) ......................$1,417,311 $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, if any. Total returns for
periods less than one year are not annualized.
(4) 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 an explanation of fixed income securities ratings under "Other
Information" in the Statement of Additional Information.
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 paper (including floating-rate
corporations) agency securities)
- --------------------------------------------------------------------------------
Domestic and foreign Commercial paper and short-
nonfinancial corporations term corporate debt obligations
(including fixed- and
variable-rate notes and
bonds)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Issuers Types of Obligations
- --------------------------------------------------------------------------------
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:
(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 that are designated as first-tier
securities as defined by the SEC; that is, securities with the highest rating.
6 INFORMATION REGARDING THE FUND AMERICAN CENTURY INVESTMENTS
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.
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
- --------------------------------------------------------------------------------
PROSPECTUS INFORMATION REGARDING THE FUND 7
Bankers' acceptances are used to finance foreign commercial trade. Issued by
a bank with an importer's name on them, these instruments allow the importer to
back up its own pledge to pay for imported goods with a bank's obligation to
cover the transaction if the importer fails to do so.
Bank notes are senior unsecured promissory notes issued in the United States
by domestic commercial banks.
The bank obligations the fund may buy generally are not insured by the FDIC
or any other insurer.
GOVERNMENT OBLIGATIONS
U.S. Treasury securities differ from one another in their interest rates,
maturities, and issuance and interest payment schedules. Treasury bills have
initial maturities of one year or less; Treasury notes, two to ten years; and
Treasury bonds, more than ten years.
A number of U.S. government agencies and government-sponsored organizations
issue debt securities. These agencies generally are created by Congress to
fulfill a specific need, such as providing credit for home buyers or farmers.
Among these agencies are the Federal Home Loan Banks, the Federal Farm Credit
System, the Student Loan Marketing Association, and the Resolution Funding
Corporation.
Some obligations issued or guaranteed by U.S. government agencies or
instrumentalities are supported by the full faith and credit of the U.S.
government; others are supported by the right of the issuer to borrow from the
Treasury; others are supported by the U.S. government's discretionary authority
to purchase certain obligations of the agency or instrumentality, and others are
supported only by the credit of the issuing agency or instrumentality.
Supranational organizations (generally, multilateral lending institutions,
or MLIs) are created by governments to promote economic reconstruction and
development. An MLI's creditworthiness is based not only on its own financial
performance, but on the willingness and ability of member governments to support
its lending activities.
While maintaining strict financial controls to ensure liquidity and strong
creditworthiness, MLIs finance their operations in the same manner as any other
financial institution, with a combination of short- and long-term debt
obligations. Short-term debt is usually issued in the form of short-term
discount notes and commercial paper.
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) 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 fund 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 investors 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 has established guidelines and
8 INFORMATION REGARDING THE FUND AMERICAN CENTURY INVESTMENTS
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 a 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 such fund's liquidity. No fund may invest
more than 10% of its 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 that 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, see "Investment Restrictions" in the 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 SECURITIES
The fund may sometimes purchase new issues of securities on a when-issued
basis 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 occur 15 to 45 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 such security may decline prior
to delivery, which could result in a loss to the fund. A separate account for
each fund consisting of cash or appropriate liquid assets 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 a 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. Performance data may be quoted separately for the Investor Class and for
the other class.
PROSPECTUS INFORMATION REGARDING THE FUND 9
Cumulative total return data is computed by considering all elements of
return, including reinvestment of dividends and capital gains distributions,
over a stated period of time. Average annual total return is determined by
computing the annual compound return over a stated period of time that would
have produced the fund's cumulative total return over the same period if the
fund's performance had remained constant throughout.
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 for all stock and bond funds. 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 also may include in advertisements data comparing its 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 2 (1)/(2) year CD rates. Fund performance also may be
compared, on a relative basis, to other funds in our fund family. This relative
comparison, which may be based upon historical fund performance or historical or
expected volatility or other fund characteristics, may be presented numerically,
graphically or in text. Fund performance also may be combined or blended with
other funds in our fund family, and that combined or blended performance may be
compared to the same indices to which individual funds may be compared.
All performance information advertised by the fund is historical in nature
and is not intended to represent or guarantee future results. The value of fund
shares when redeemed may be more or less than their original cost.
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.
To reduce expenses and demonstrate respect for our environment, we have
initiated a project through which we will eliminate duplicate copies of most
financial reports and prospectuses to most households and deliver account
statements to most households in a single envelope, even if they have more than
one account. If you would like additional copies of financial reports and
prospectuses or separate mailing of account statements, please call us.
INVESTING IN AMERICAN CENTURY
The following sections explain how to invest in American Century funds,
including purchases, redemptions, exchanges and special services. You will find
more detail about doing business with us by referring to the Investor Services
Guide that you will receive when you open an account.
If you own or are considering purchasing fund shares through an
employer-sponsored retirement plan or through a bank, broker-dealer or other
financial intermediary, the following sections, as well as the information
contained in our Investor Services Guide, may not apply to you. Please read
"Employer-Sponsored Retirement Plans and Institutional Accounts," page 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:
* RECEIVING BANK AND ROUTING NUMBER:
Commerce Bank, N.A. (101000019)
* BENEFICIARY (BNF):
American Century Services Corporation
4500 Main St., Kansas City, Missouri 64111
* BENEFICIARY ACCOUNT NUMBER (BNF ACCT):
2804918
* REFERENCE FOR BENEFICIARY (RFB):
American Century account number into which you are investing. If more than
one, leave blank and see Bank to Bank Information below.
PROSPECTUS HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS 11
* ORIGINATOR TO BENEFICIARY (OBI):
Name and address of owner of account into which you are investing.
* BANK TO BANK INFORMATION
(BBI OR FREE FORM TEXT):
* Taxpayer identification or Social Security
number.
* If more than one account, account numbers and amount to be invested in
each account.
* Current tax year, previous tax year or rollover designation if an IRA.
Specify whether traditional IRA, Roth IRA, Education IRA, SEP-IRA,
SARSEP-IRA, SIMPLE Employer or SIMPLE Employee.
BY EXCHANGE
Call 1-800-345-2021 from 7 a.m. to 7 p.m. Central time to get information on
opening an account by exchanging from another American Century account. See 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," this page) or by any
of the methods below. The minimum investment requirement for subsequent
investments is $250 for checks submitted without the investment slip portion of
a previous statement or confirmation and $50 for all other types of subsequent
investments.
BY MAIL
When making subsequent investments, enclose your check with the investment
slip portion of a previous statement or confirmation. If the investment slip is
not available, indicate your name, address and account number on your check or a
separate piece of paper. (Please be aware that the investment minimum for
subsequent investments is higher without an investment slip.)
BY TELEPHONE
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 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 an Investor Services Representative.
HOW TO EXCHANGE FROM ONE ACCOUNT TO ANOTHER
As long as you meet any minimum investment requirements, you may exchange
your fund shares to our other funds up to six times per year per account. An
exchange request will be processed as of the same
12 HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS AMERICAN CENTURY INVESTMENTS
day it is received, if it is received before the fund's net asset values are
calculated, which is one hour prior to the close of the New York Stock Exchange
for funds issued by American Century Target Maturities Trust and at the close of
the Exchange for all of our other funds. See "When Share Price Is Determined,"
page 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 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 you upon request, or by a letter to us.
Certain redemptions may require a signature guarantee. Please see "Signature
Guarantee," 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 to you or to your account at a bank or other financial institution. To set
up automatic redemptions, call an Investor Services Representative.
REDEMPTION PROCEEDS
Please note that shortly after a purchase of shares is made by check or
electronic draft (also known as an ACH draft) from your bank, we may wait up to
15 days or longer to send redemption proceeds (to allow your purchase funds to
clear). No interest is paid on the redemption proceeds after the redemption is
processed but before your redemption proceeds are sent.
Redemption proceeds may be sent to you in one of the following ways:
BY CHECK
Ordinarily, all redemption checks will be made payable to the registered
owner of the shares and will be mailed only to the address of record. For more
information, please refer to our Investor Services Guide.
BY WIRE AND ACH
You may authorize us to transmit redemption proceeds by wire or ACH. These
services will be effective 15 days after we receive the authorization.
PROSPECTUS HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS 13
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.
REDEMPTION OF SHARES IN LOW-BALANCE ACCOUNTS
Whenever the shares held in an account have a value of less than the
required minimum, a letter will be sent advising you to bring the value of the
shares held in the account up to the minimum. If action is not taken within 90
days of the letter's date, the shares held in the account will be redeemed and
the proceeds from the redemption will be sent by check to your address of
record. We reserve the right to increase the investment minimums.
SIGNATURE GUARANTEE
To protect your accounts from fraud, some transactions will require a
signature guarantee. 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 is required
when:
* redeeming more than $25,000; or
* establishing or increasing a Check-A-Month or automatic transfer on an
existing account.
You can obtain a signature guarantee from a bank or trust company, credit
union, broker-dealer, securities exchange or association, clearing agency or
savings association, as defined by federal law.
For a more in-depth explanation of our signature guarantee policy, or if you
live outside the United States and would like to know how to obtain a signature
guarantee, please consult our Investor Services Guide.
We reserve the right to require a signature guarantee on any transaction, or
to change this policy at any time.
SPECIAL SHAREHOLDER SERVICES
We offer several 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 daily share prices, receive updates on major
market indices and view historical performance of the fund. If you select "Full
Services" on your application, you can use your personal access code and Social
Security number to view your account balance and account activity, make
subsequent investments from your bank account or exchange shares from one fund
to another.
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.
14 HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS AMERICAN CENTURY INVESTMENTS
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.
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
Each fund is available for your tax-deferred retirement plan. Call or write
us and request the appropriate forms for:
* Individual Retirement Accounts (IRAs);
* 403(b) plans for employees of public school
systems and non-profit organizations; or
* Profit sharing plans and pension plans for
corporations and other employers.
If your IRA and 403(b) accounts do not total $10,000, each account is
subject to an annual $10 fee, up to a total of $30 per year.
You also can transfer your tax-deferred plan to us from another company or
custodian. Call or write us for a Request to Transfer form.
IMPORTANT POLICIES REGARDING YOUR INVESTMENTS
Every account is subject to policies that could affect your investment.
Please refer to the Investor Services Guide for further information about the
policies discussed below, as well as further detail about the services we offer.
(1) We reserve the right for any reason to suspend the offering of shares
for a period of time, or to reject any specific purchase order
(including purchases by exchange). Additionally, purchases may be
refused if, in the opinion of the manager, they are of a size that
would disrupt the management of the fund.
(2) We reserve the right to make changes to any stated investment
requirements, including those that relate to purchases, transfers and
redemptions. In addition, we also may alter, add to or terminate any
investor services and privileges. Any changes may affect all
shareholders or only certain series or classes of shareholders.
(3) Shares being acquired must be qualified for sale in your state of
residence.
(4) Transactions requesting a specific price and date, other than open
orders, will be refused. Once you have mailed or otherwise transmitted
your transaction instructions to us, they may not be modified or
canceled.
(5) If a transaction request is made by a corporation, partnership, trust,
fiduciary, agent or unincorporated association, we will require
evidence satisfactory to us of the authority of the individual making
the request.
(6) We have established procedures designed to assure the authenticity of
instructions received by telephone. These procedures include requesting
personal identification from callers, recording telephone calls, and
providing written confirmations of telephone transactions. These
procedures are designed to protect shareholders from unauthorized or
fraudulent instructions. If we do not employ reasonable procedures to
confirm the genuineness of instructions, then we may be liable for
losses due to unauthorized or fraudulent instructions. The company, its
transfer agent and manager will not be responsible for any loss due to
instructions they reasonably believe are genuine.
(7) All signatures should be exactly as the name appears in the
registration. If the owner's name appears in the registration as Mary
Elizabeth Jones, she should sign that way and not as Mary E. Jones.
PROSPECTUS HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS 15
(8) Unusual stock market conditions have in the past resulted in an
increase in the number of shareholder telephone calls. If you
experience difficulty in reaching us during such periods, you may send
your transaction instructions by mail, express mail or courier service,
or you may visit one of our Investor Centers. You also may use our
Automated Information Line if you have requested and received an access
code and are not attempting to redeem shares.
(9) If you fail to provide us with the correct certified taxpayer
identification number, we may reduce any redemption proceeds by $50 to
cover the penalty the IRS will impose on us for failure to report your
correct taxpayer identification number on information reports.
(10) We will perform special inquiries on shareholder accounts. A research
fee of $15 per hour may be applied.
REPORTS TO SHAREHOLDERS
At the end of each calendar quarter, we will send you a consolidated
statement that summarizes all of your American Century holdings, as well as an
individual statement for each fund you own that reflects all year-to-date
activity in your account. You may request a statement of your account activity
at any time.
With the exception of most automatic transactions, each time you invest,
redeem, transfer or exchange shares, we will send you a confirmation of the
transaction. See the Investor Services Guide for more detail.
Carefully review all the information relating to transactions on your
statements and confirmations to ensure that your instructions were acted on
properly. Please notify us immediately in writing if there is an error. If you
fail to provide notification of an error with reasonable promptness, i.e.,
within 30 days of non-automatic transactions or within 30 days of the date of
your consolidated quarterly statement, in the case of automatic transactions, we
will deem you to have ratified the transaction.
No later than January 31 of each year, we will send you reports that you may
use in completing your U.S. income tax return. See the Investor Services Guide
for more information.
Each year, we will send you an annual and a semiannual report relating to
your fund, each of which is incorporated herein by reference. The annual report
includes audited financial statements and a list of portfolio securities as of
the fiscal year end. The semiannual report includes unaudited financial
statements for the first six months of the fiscal year, as well as a list of
portfolio securities at the end of the period. You also will receive an updated
prospectus at least once each year. Please read these materials carefully, as
they will help you understand your fund.
EMPLOYER-SPONSORED RETIREMENT PLANS AND
INSTITUTIONAL ACCOUNTS
Information contained in our Investor Services Guide pertains to
shareholders who invest directly with American Century rather than through an
employer-sponsored retirement plan or through a financial intermediary.
If you own or are considering purchasing fund shares through an
employer-sponsored retirement plan, your ability to purchase shares of the
funds, 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 a 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. The net asset values for Target Maturities funds are
determined one hour prior to the close of the Exchange.
Investments and requests to redeem or exchange shares will receive the share
price next determined after receipt by us of the investment, redemption or
exchange request. For example, investments and requests to redeem or exchange
shares received by us or one of our agents or designees before the time as of
which the net asset value of the fund is determined, are effective on, and will
receive the price determined, that day. Investment, redemption and exchange
requests received thereafter are effective on, and receive the price determined
as of, the close of the Exchange on the next day the Exchange is open.
Investments are considered received only when payment is received by us.
Wired funds are considered received on the day they are deposited in our bank
account if they are deposited before the time as of which the net asset value of
the fund is determined.
Investments by telephone pursuant to your prior authorization to us to draw
on your bank account are considered received at the time of your telephone call.
Investment and transaction instructions received by us on any business day
by mail prior to the time as of which the net asset value of the fund is
determined, will receive that day's price. Investments and instructions received
after that time will receive the price determined on the next business day.
If you invest in fund shares through an employer-sponsored retirement plan
or other financial intermediary, it is the responsibility of your plan
recordkeeper or financial intermediary to transmit your purchase, exchange and
redemption requests to the fund's transfer agent prior to the applicable cut-off
time for receiving orders and to make payment for any purchase transactions in
accordance with the fund's procedures or any contractual arrangements with the
fund or the fund's distributor in order for you to receive that day's price.
We have contractual relationships with certain financial intermediaries in
which such intermediaries represent that they have systems to track the time at
which investment orders are received and to segregate orders received at
different times. Based on these representations, the fund has authorized such
intermediaries and their designees to accept purchase and redemption orders on
the fund's behalf up to the applicable cut-off time. The fund will be deemed to
have received such orders upon acceptance by the duly authorized intermediary,
and such orders will be priced at the fund's net asset value next determined
after acceptance on the fund's behalf by such intermediary.
HOW SHARE PRICE IS DETERMINED
The valuation of assets for determining net asset value may be summarized as
follows:
The portfolio securities of the fund, except as otherwise noted, listed or
traded on a domestic securities exchange are valued at the last sale price on
that exchange. Portfolio securities primarily traded on foreign securities
exchanges generally are valued at the preceding closing values of such
securities on the exchange where primarily traded. If no sale is reported, or if
local convention or regulation so provides, the mean of the latest bid and asked
prices is used. Depending on local convention or regulation, securities traded
over-the-counter are priced at the mean of the latest bid and asked prices, or
at the last sale price. When market quotations are not readily available,
securities and other assets are valued at fair
PROSPECTUS ADDITIONAL INFORMATION YOU SHOULD KNOW 17
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, 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.
WHERE TO FIND YIELD INFORMATION
The yield of the Investor Class 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 certain IRAs and 403(b) plans paid
in cash only if you are at least 59 (1)/(2) years old or permanently and totally
disabled. Distribution checks normally are mailed within seven days after the
record date. Please consult our Investor Services Guide for further information
regarding your distribution options.
TAXES
Each fund has elected to be taxed under Subchapter M of the Internal Revenue
Code, which means that to the extent its income is distributed to shareholders,
it pays no income tax.
TAX-DEFERRED ACCOUNTS
If fund shares are purchased through tax-deferred accounts, such as a
qualified employer-sponsored retirement or savings plan, income and capital
gains distributions paid by the fund 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 may
qualify for the 70% dividends received deduction for corporations to the extent
that the fund held shares receiving the dividend for more than 45 days.
Distributions from gains on assets held longer than 12 months but no more than
18 months (28% rate gain) and/or assets held longer than 18 months (20% rate
gain) are taxable as long-term gains regardless of the length of time you have
held the shares. However, you should note that any loss realized upon the sale
or redemption of shares held for six months or less will be treated as a
long-term capital loss to the extent of any distribution
18 ADDITIONAL INFORMATION YOU SHOULD KNOW AMERICAN CENTURY INVESTMENTS
of long-term capital gain (28% or 20% rate gain) to you with respect to such
shares.
Distributions are taxable to you regardless of whether they are taken in
cash or reinvested, even if the value of your shares is below your cost. If you
purchase shares shortly before a distribution, you must pay income taxes on the
distribution, even though the value of your investment (plus cash received, if
any) will not have increased. In addition, the share price at the time you
purchase shares may include unrealized gains in the securities held in the
investment portfolio of the fund. If these portfolio securities are subsequently
sold and the gains are realized, they will, to the extent not offset by capital
losses, be paid to you as a distribution of capital gains and will be taxable to
you as short-term or long-term capital gains (28% and/or 20% rate gain).
In January of the year following the distribution, if you own shares in a
taxable account, you will receive a Form 1099-DIV notifying you of the status of
your distributions for federal income tax purposes.
Distributions also may be subject to state and local taxes, even if all or a
substantial part of such distributions are derived from interest on U.S.
government obligations which, if you received them directly, would be exempt
from state income tax. However, most but not all states allow this tax exemption
to pass through to fund shareholders when a fund pays distributions to its
shareholders. You should consult your tax advisor about the tax status of such
distributions in your own state.
If you have not complied with certain provisions of the Internal Revenue
Code and Regulations, we are required by federal law to withhold and remit to
the IRS 31% of reportable payments (which may include dividends, capital gains
distributions and redemptions). Those regulations require you to certify that
the Social Security number or tax identification number you provide is correct
and that you are not subject to 31% withholding for previous under-reporting to
the IRS. You will be asked to make the appropriate certification on your
application. Payments reported by us that omit your Social Security number or
tax identification number will subject us to a penalty of $50, which will be
charged against your account if you fail to provide the certification by the
time the report is filed. This charge is not refundable.
In addition to the federal income tax consequences described above relating
to an investment in a fund, there may be other federal, state or local tax
considerations that depend upon the circumstances of each particular investor.
Prospective shareholders are therefore urged to consult their tax advisors with
respect to the effect of this investment on their own specific situations.
MANAGEMENT
INVESTMENT MANAGEMENT
The fund is the sole series of the American Century Investment Trust (the
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 management agreement entered into with the
fund, American Century Investment Management, Inc., serves as the investment
manager of the fund. Its principal place of business is American Century Tower,
4500 Main Street, Kansas City, Missouri 64111. The manager has been providing
investment advisory services to investment companies and institutional clients
since it was founded in 1958.
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 described in
this Prospectus and their work experience for the last five years are as
follows:
DENISE TABACCO, Portfolio Manager, joined American Century in 1988, becoming
a member of its portfolio department in 1991. In 1995 she assumed her current
position as a Portfolio Manager.
JOHN F. WALSH, Portfolio Manager, joined American Century in February 1996
as an Investment Analyst, a position he held until May 1997. At that time he was
PROSPECTUS ADDITIONAL INFORMATION YOU SHOULD KNOW 19
promoted to Portfolio Manager. Prior to joining American Century, Mr. Walsh
served as an Assistant Vice President and Analyst at First Interstate Bank, Los
Angeles, California, from July 1993 to January 1996. Prior to that he served as
an Analyst at The Long-Term Credit Bank of Japan, Los Angeles, California.
The activities of the manager are subject only to directions of the fund's
Board of Trustees. The manager pays all the expenses of the fund except
brokerage, taxes, interest, fees and expenses of the non-interested person
trustees (including counsel fees) and extraordinary expenses.
For the services provided to the fund, the manager receives a monthly fee
based on a percentage of the average net assets of the fund. The annual rate at
which this fee is assessed is determined monthly in a two-step process: First, a
fee rate schedule is applied to the assets of all of the funds in a fund's
investment category which are managed by the manager (the Investment Category
Fee). The three investment categories are: Money Market Funds, Bond Funds and
Equity Funds. Second, a separate fee rate schedule is applied to the assets of
all of the funds managed by the manager (the Complex Fee). The Investment
Category Fee and the Complex Fee are then added to determine the unified
management fee payable by the fund to the manager. Currently, the Investment
Category Fee for the fund is an annual rate of 0.30% of the average net assets
of the fund. The Complex Fee is currently an annual rate of 0.30% of the average
net assets of the fund. Further information about the calculation of the annual
management fee is contained in the Statement of Additional Information.
On the first business day of each month, the fund pays a management fee to
the manager for the previous month at the specified rate. The fee for the
previous month is calculated by multiplying the applicable fee for the fund by
the aggregate average daily closing value of the fund's net assets during the
previous month, and further multiplying that product by a fraction, the
numerator of which is the number of days in the previous month and the
denominator of which is 365 (366 in leap years).
CODE OF ETHICS
The fund and the manager have adopted a Code of Ethics that restricts
personal investing practices by employees of the manager and its affiliates.
Among other provisions, the Code of Ethics requires that employees with access
to information about the purchase or sale of securities in the fund's portfolios
obtain preclearance before executing personal trades. With respect to Portfolio
Managers and other investment personnel, the Code of Ethics prohibits
acquisition of securities in an initial public offering, as well as profits
derived from the purchase and sale of the same security within 60 calendar days.
These provisions are designed to ensure that the interests of fund shareholders
come before the interests of the people who manage those funds.
TRANSFER AND ADMINISTRATIVE SERVICES
American Century Services Corporation, American Century Tower, 4500 Main
Street, Kansas City, Missouri 64111, acts as transfer agent and dividend-paying
agent for the fund. It provides facilities, equipment and personnel to the fund,
and is paid for such services by the manager.
Although there is no sales charge levied by the fund, transactions in shares
of the fund may be executed by brokers or investment advisors who charge a
transaction-based fee or other fee for their services. Such charges may vary
among broker-dealers and financial advisors, but in all cases will be retained
by the broker-dealer or financial advisor and not remitted to the fund or the
manager. You should be aware of the fact that these transactions may be made
directly with American Century without incurring such fees.
From time to time, special services may be offered to shareholders who
maintain higher share balances in our family of funds. These services may
include the waiver of minimum investment requirements, expedited confirmation of
shareholder transactions, newsletters and a team of personal representatives.
Any expenses associated with these special services will be paid by the manager
or its affiliates.
The manager and the transfer agent are both wholly owned by American Century
Companies, Inc. (ACC). James E. Stowers Jr., Chairman of the Board of
20 ADDITIONAL INFORMATION YOU SHOULD KNOW AMERICAN CENTURY INVESTMENTS
Directors of ACC, controls ACC by virtue of his ownership of a majority of its
common stock.
Pursuant to a Sub-Administration Agreement with the manager, Funds
Distributor Inc. (FDI) serves as the Co-Administrator for the funds. FDI is
responsible for (i) providing certain officers of the funds and (ii) reviewing
and filing marketing and sales literature on behalf of the funds. The fees and
expenses of FDI are paid by the manager.
YEAR 2000 ISSUES
Many of the world's computer systems currently cannot properly recognize or
process date-sensitive information relating to the Year 2000 and beyond. The
fund and the manager depend upon the computer systems of various service
providers, including the transfer agent, for their day-to-day operations.
Inadequate remediation of the Year 2000 problem by these service providers and
others with whom they interact could have an adverse effect on the fund's
operations, including pricing, securities trading and settlement, and the
provision of shareholder services.
The transfer agent, in cooperation with the manager, has assembled a team of
information technology professionals who are taking steps to address Year 2000
issues with respect to its own computers and to obtain satisfactory assurances
that comparable steps are being taken by the fund's and the manager's other
major service providers and vendors. The key phases of the remediation plan
include: an inventory of all internal systems, vendor products and services and
data providers (substantially completed in 1997); an assessment of all systems
for date reliance and the impact of the century rollover on each (substantially
completed with respect to critical systems in early 1998); and the renovation
and testing of affected systems (targeted for completion with respect to
critical systems by the end of 1998). The manager will pay for the remediation
effort with revenues from its management fee, so that the fund will not directly
bear any of the cost.
In light of these remediation efforts, the fund does not anticipate a
material adverse impact on its business, operations or financial condition
relating to Year 2000 issues. However, there can be no assurance that the
remediation plan will be sufficient and timely or that interaction with other
noncomplying computer systems will not have a material adverse effect on the
fund's business, operations or financial condition.
In addition, companies in which the fund invests may have Year 2000 computer
problems. The value of their securities could go down if they do not fix their
problems in time or if fixing them is very expensive. Before making an
investment decision about a company, the manager asks it about its Year 2000
readiness. However, the manager cannot be sure that the information it receives
is complete and accurate, and there is no guarantee that portfolio companies'
Year 2000 problems will not hurt the fund's performance.
DISTRIBUTION OF FUND SHARES
The fund's shares are distributed by FDI, a registered broker-dealer. FDI is
a wholly-owned indirect subsidiary of Boston Institutional Group, Inc. FDI's
principal business address is 60 State Street, Suite 1300, Boston, Massachusetts
02109. The Investor Class of shares does not pay any commissions or sales loads
to the distributor or to any other broker-dealers or financial intermediaries in
connection with the distribution of fund shares.
Investors may open accounts with American Century only through the
distributor. All purchase transactions in the fund offered by this Prospectus
are processed by the transfer agent, which is authorized to accept any
instructions relating to fund accounts. All purchase orders must be accepted by
the distributor. All fees and expenses of FDI in acting as distributor for the
fund are paid by the manager.
FURTHER INFORMATION ABOUT AMERICAN CENTURY
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 fund is American Century Tower, 4500 Main
Street, P.O. Box 419200, Kansas City, Missouri 64141-6200. All inquiries may be
made by mail to that address, or by telephone to 1-800-345-2021 (international
calls: 816-531-5575).
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
PROSPECTUS ADDITIONAL INFORMATION YOU SHOULD KNOW 21
by the custodian and in effect each series will be a separate fund.
American Century offers two classes of the fund offered by this Prospectus:
an Investor Class and an Advisor Class. The shares offered by this Prospectus
are Investor Class shares and have no up-front charges, commissions, or 12b-1
fees.
The other class of shares is primarily offered to institutional investors or
through institutional distribution channels, such as employer-sponsored
retirement plans or through banks, broker-dealers, insurance companies or other
financial intermediaries. The other class has different fees, expenses, and/or
minimum investment requirements than the Investor Class. The difference in the
fee structures among the classes is the result of their separate arrangements
for shareholder and distribution services and not the result of any difference
in amounts charged by the manager for core investment advisory services.
Accordingly, the core investment advisory expenses do not vary by class.
Different fees and expenses will affect performance. For additional information
concerning the other classes of shares not offered by this Prospectus, call us
at 1-800-345-3533 or contact a sales representative or financial intermediary
who offers those classes of shares.
Except as described below, all classes of shares of a fund have identical
voting, dividend, liquidation and other rights, preferences, terms and
conditions. The only differences among the various classes are (a) each class
may be subject to different expenses specific to that class, (b) each class has
a different identifying designation or name, (c) each class has exclusive voting
rights with respect to matters solely affecting such class and (d) each class
may have different exchange privileges.
Each share, irrespective of series or class, is entitled to one vote for
each dollar of net asset value applicable to such share on all questions, except
for those matters that must be voted on separately by the series or class of
shares affected. Matters affecting only one series or class are voted upon only
by that series or class.
Shares have non-cumulative voting rights, which means that the holders of
more than 50% of the votes cast in an election of 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 Investment Company 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 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 the Trust to hold a
special meeting of shareholders. We will assist in the communication with other
shareholders.
WE RESERVE THE RIGHT TO CHANGE ANY OF OUR POLICIES, PRACTICES AND PROCEDURES
DESCRIBED IN THIS PROSPECTUS, INCLUDING THE STATEMENT OF ADDITIONAL INFORMATION,
WITHOUT SHAREHOLDER APPROVAL EXCEPT IN THOSE INSTANCES WHERE SHAREHOLDER
APPROVAL IS EXPRESSLY REQUIRED.
22 ADDITIONAL INFORMATION YOU SHOULD KNOW AMERICAN CENTURY INVESTMENTS
NOTES
PROSPECTUS NOTES 23
NOTES
24 NOTES
NOTES
PROSPECTUS 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
www.americancentury.com
[american century logo(reg. sm)]
American
Century(reg.tm)
9806 [recycled logo]
SH-BKT-12370 Recycled
<PAGE>
PROSPECTUS
[american century logo(reg. sm)]
American
Century(reg.tm)
JUNE 1, 1998
BENHAM
GROUP(reg.tm)
Prime Money Market
ADVISOR CLASS
AMERICAN CENTURY INVESTMENTS
FAMILY OF FUNDS
American Century Investments offers you nearly 70 fund choices covering
stocks, bonds, money markets, specialty investments and blended portfolios. To
help you find the funds that may meet your investment needs, American Century
funds have been divided into three groups based on investment style and
objectives. These groups, which appear below, are designed to help simplify your
fund decisions.
AMERICAN CENTURY INVESTMENTS
- -------------------------------------------------------------------------------
Benham American Century Twentieth Century
Group Group Group
- -------------------------------------------------------------------------------
MONEY MARKET FUNDS ASSET ALLOCATION & GROWTH FUNDS
GOVERNMENT BOND FUNDS BALANCED FUNDS INTERNATIONAL FUNDS
DIVERSIFIED BOND FUNDS CONSERVATIVE EQUITY FUNDS
MUNICIPAL BOND FUNDS SPECIALTY FUNDS
- -------------------------------------------------------------------------------
Prime Money
Market
PROSPECTUS
JUNE 1, 1998
Prime Money Market
ADVISOR CLASS
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 and low-load mutual funds
covering a variety of investment opportunities. One of the money market funds
from our Benham Group is described in this Prospectus. Its investment objective
is listed on page 2 of this Prospectus. The other funds are described in
separate prospectuses.
The fund's shares offered in this Prospectus (the Advisor Class shares) are
sold at their net asset value with no sales charges or commissions. The Advisor
Class shares are subject to Rule 12b-1 shareholder services and distribution
fees as described in this Prospectus.
The Advisor Class shares are intended for purchase by participants in
employer-sponsored retirement or savings plans and for persons purchasing shares
through broker-dealers, banks, insurance companies and other financial
intermediaries that provide various administrative and distribution services.
AMERICAN CENTURY INVESTMENTS
4500 Main Street * P.O. Box 419385
Kansas City, Missouri 64141-6385 * 1-800-345-3533
International calls: 816-531-5575
Telecommunications Device for the Deaf:
1-800-345-1833 * In Missouri: 816-444-3038
www.americancentury.com
Additional information, including this Prospectus and the Statement of
Additional Information, may be obtained by accessing the Web site maintained by
the SEC (www.sec.gov).
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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 the 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
Performance Information of Other Class .................................... 5
INFORMATION REGARDING THE FUND
Investment Policies of the Fund ........................................... 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 ...................................................... 7
Government Obligations ................................................ 8
Variable and Floating-Rate Instruments ................................ 8
Rule 144A Securities .................................................. 8
U.S. Dollar-Denominated Foreign Securities ............................ 9
Other Investment Practices, Their Characteristics
and Risks ............................................................... 9
Repurchase Agreements ................................................. 9
When-Issued Securities ................................................ 9
Borrowing ............................................................. 9
Other Techniques ...................................................... 9
Performance Advertising ................................................... 9
HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS
American Century Investments .............................................. 11
How to Purchase and Sell
American Century Funds .................................................. 11
How to Exchange from one American
Century Fund to Another ................................................. 11
How to Redeem Shares ...................................................... 11
Telephone Services ........................................................ 11
Investors Line ........................................................ 11
ADDITIONAL INFORMATION YOU SHOULD KNOW
Share Price ............................................................... 12
When Share Price Is Determined ........................................ 12
How Share Price Is Determined ......................................... 12
Where to Find Yield Information ....................................... 13
Distributions ............................................................. 13
Taxes ..................................................................... 13
Tax-Deferred Accounts ................................................. 13
Taxable Accounts ...................................................... 13
Management ................................................................ 14
Investment Management ................................................. 14
Code of Ethics ........................................................ 15
Transfer and Administrative Services .................................. 15
Year 2000 Issues ...................................................... 16
Distribution of Fund Shares ............................................... 16
Service and Distribution Fees ......................................... 16
Further Information About American Century ................................ 17
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 .................................................. none
Exchange Fee .................................................... none
ANNUAL FUND OPERATING EXPENSES:
(as a percentage of average net assets)
Management Fees(1) .............................................. 0.35%
12b-1 Fees(2) ................................................... 0.50%
Other Expenses(3) ............................................... 0.00%
Total Fund Operating Expenses (net of expense limitation) ....... 0.85%
EXAMPLE:
You would pay the following expenses on a 1 year $ 9
$1,000 investment, assuming a 5% annual return and 3 years 27
redemption at the end of each time period: 5 years 47
10 years 105
(1) A portion of the management fee may be paid by the manager to unaffiliated
third parties who provide recordkeeping and administrative services that
would otherwise be performed by an affiliate of the manager. See
"Management-Transfer and Administrative Services," page 15.
(2) The 12b-1 fee is designed to permit investors to purchase Advisor Class
shares through broker-dealers, banks, insurance companies and other
financial intermediaries. A portion of the fee is used to compensate them
for ongoing recordkeeping and administrative services that would otherwise
be performed by an affiliate of the manager, and a portion is used to
compensate them for distribution and other shareholder services. See
"Service and Distribution Fees," page 16.
(3) Other Expenses, which includes the fees and expenses (including legal
counsel fees) of those trustees who are not "interested persons" as defined
in the Investment Company Act of 1940 (the Investment Company Act), are
expected to be less than 0.01 of 1% of the average net assets for the
current fiscal year.
The purpose of this table is to help you understand the various costs and
expenses that you, as a shareholder, will bear directly or indirectly in
connection with an investment in the class of shares of the fund offered by this
Prospectus. The example set forth above assumes reinvestment of all dividends
and distributions and uses a 5% annual rate of return as required by SEC
regulations.
NEITHER THE 5% RATE OF RETURN NOR THE EXPENSES SHOWN ABOVE SHOULD BE
CONSIDERED INDICATIONS OF PAST OR FUTURE RETURNS AND EXPENSES. ACTUAL RETURNS
AND EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
The shares offered by this Prospectus are Advisor Class shares. The funds
offer one other class of shares, which is primarily made available to retail
investors. This other class has a different fee structure than the Advisor
Class. The difference in the fee structures among the classes is the result of
their separate arrangements for shareholder and distribution services and not
the result of any difference in amounts charged by the manager for core
investment advisory services. Accordingly, the core investment advisory expenses
do not vary by class. A difference in fees will result in different performance
for the other class. For additional information about the various classes, see
"Further Information About American Century," page 17.
4 TRANSACTION AND OPERATING EXPENSE TABLE AMERICAN CENTURY INVESTMENTS
<TABLE>
<CAPTION>
PERFORMANCE INFORMATION OF OTHER CLASS
PRIME MONEY MARKET
The Advisor Class of the fund was established June 1, 1998; therefore no
shares had been issued prior to the fund's prior fiscal year end. The financial
information in this table regarding selected per share data for the fund
reflects the performance of the fund's Investor Class of shares, which has a
total expense ratio that is 0.25% lower than the Advisor Class. Had the Advisor
Class been in existence for the fund for the time periods presented, the fund's
performance information would be lower as a result of the higher expense.
The performance information for the year ended February 28, 1998, has been
audited by Coopers & Lybrand, L.L.P., independent accountants, whose report
thereon appears in the fund's annual report, which is incorporated by reference
into the Statement of Additional Information. The performance information for
the periods ended on or before February 28, 1997, has been audited by other
independent accountants. The annual report contains 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.
1998 1997 1996(1) 1995 1994(2)
PER-SHARE DATA
Net Asset Value,
<S> <C> <C> <C> <C> <C>
Beginning of Period ............... $1.00 $1.00 $1.00 $1.00 $1.00
-------- -------- -------- -------- --------
Income From
Investment Operations
Net Investment Income ........... 0.05 0.05 0.06 0.05 0.01
-------- -------- -------- -------- --------
Distributions
From Net
Investment Income ............... (0.05) (0.05) (0.06) (0.05) (0.01)
-------- -------- -------- -------- --------
Net Asset Value,
End of Period ..................... $1.00 $1.00 $1.00 $1.00 $1.00
======== ======== ======== ======== ========
TOTAL RETURN(3) ................. 5.29% 5.04% 5.60% 4.93% 0.96%
RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses
to Average Net Assets ............. 0.50% 0.50% 0.48% 0.04% -
Ratio of Operating Expenses
to Average Net Assets
(Before Expense Waiver) ........... 0.63% 0.63% 0.62% 0.71% 1.49%(4)
Ratio of Net Investment Income
to Average Net Assets ............. 5.17% 4.92% 5.43% 5.28% 3.35%(4)
Ratio of Net Investment Income
to Average Net Assets
(Before Expense Waiver) ........... 5.04% 4.79% 5.29% 4.61% 1.86%(4)
Net Assets, End of Period
(in thousands) .................... $1,417,311 $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, if any. Total returns for
periods less than one year are not annualized.
(4) Annualized.
</TABLE>
PROSPECTUS PERFORMANCE INFORMATION OF OTHER CLASS 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 an explanation of fixed income securities ratings under "Other
Information" in the Statement of Additional Information.
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 paper (including floating-rate
corporations) agency securities)
- --------------------------------------------------------------------------------
Domestic and foreign Commercial paper and short-
nonfinancial corporations term corporate debt obligations
(including fixed- and
variable-rate notes and
bonds)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Issuers Types of Obligations
- --------------------------------------------------------------------------------
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:
(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 that are designated as first-tier
securities as defined by the SEC; that is, securities with the highest rating.
6 INFORMATION REGARDING THE FUND AMERICAN CENTURY INVESTMENTS
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.
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
- --------------------------------------------------------------------------------
PROSPECTUS INFORMATION REGARDING THE FUND 7
Bankers' acceptances are used to finance foreign commercial trade. Issued by
a bank with an importer's name on them, these instruments allow the importer to
back up its own pledge to pay for imported goods with a bank's obligation to
cover the transaction if the importer fails to do so.
Bank notes are senior unsecured promissory notes issued in the United States
by domestic commercial banks.
The bank obligations the fund may buy generally are not insured by the FDIC
or any other insurer.
GOVERNMENT OBLIGATIONS
U.S. Treasury securities differ from one another in their interest rates,
maturities, and issuance and interest payment schedules. Treasury bills have
initial maturities of one year or less; Treasury notes, two to ten years; and
Treasury bonds, more than ten years.
A number of U.S. government agencies and government-sponsored organizations
issue debt securities. These agencies generally are created by Congress to
fulfill a specific need, such as providing credit for home buyers or farmers.
Among these agencies are the Federal Home Loan Banks, the Federal Farm Credit
System, the Student Loan Marketing Association, and the Resolution Funding
Corporation.
Some obligations issued or guaranteed by U.S. government agencies or
instrumentalities are supported by the full faith and credit of the U.S.
government; others are supported by the right of the issuer to borrow from the
Treasury; others are supported by the U.S. government's discretionary authority
to purchase certain obligations of the agency or instrumentality, and others are
supported only by the credit of the issuing agency or instrumentality.
Supranational organizations (generally, multilateral lending institutions,
or MLIs) are created by governments to promote economic reconstruction and
development. An MLI's creditworthiness is based not only on its own financial
performance, but on the willingness and ability of member governments to support
its lending activities.
While maintaining strict financial controls to ensure liquidity and strong
creditworthiness, MLIs finance their operations in the same manner as any other
financial institution, with a combination of short- and long-term debt
obligations. Short-term debt is usually issued in the form of short-term
discount notes and commercial paper.
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) 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 fund 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 investors 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.
8 INFORMATION REGARDING THE FUND AMERICAN CENTURY INVESTMENTS
Accordingly, the Board 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 a 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 such fund's liquidity. No fund may invest
more than 10% of its 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 that 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, see "Investment Restrictions" in the 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 SECURITIES
The fund may sometimes purchase new issues of securities on a when-issued
basis 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 occur 15 to 45 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 such security may decline prior
to delivery, which could result in a loss to the fund. A separate account for
each fund consisting of cash or appropriate liquid assets 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 a 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. Performance data may be quoted separately for the Advisor Class and for
the other class.
PROSPECTUS INFORMATION REGARDING THE FUND 9
Cumulative total return data is computed by considering all elements of
return, including reinvestment of dividends and capital gains distributions,
over a stated period of time. Average annual total return is determined by
computing the annual compound return over a stated period of time that would
have produced the fund's cumulative total return over the same period if the
fund's performance had remained constant throughout.
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 for all stock and bond funds. 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 also may include in advertisements data comparing its 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 2 (1)/(2) year CD rates. Fund performance also may be
compared, on a relative basis, to other funds in our fund family. This relative
comparison, which may be based upon historical fund performance or historical or
expected volatility or other fund characteristics, may be presented numerically,
graphically or in text. Fund performance also may be combined or blended with
other funds in our fund family, and that combined or blended performance may be
compared to the same indices to which individual funds may be compared.
All performance information advertised by the fund is historical in nature
and is not intended to represent or guarantee future results. The value of fund
shares when redeemed may be more or less than their original cost.
10 INFORMATION REGARDING THE FUND AMERICAN CENTURY INVESTMENTS
HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS
AMERICAN CENTURY INVESTMENTS
The following sections explain how to purchase, exchange and redeem Advisor
Class shares of the funds offered by this Prospectus.
To reduce expenses and demonstrate respect for our environment, we have
initiated a project through which we will eliminate duplicate copies of most
financial reports and prospectuses to most households and deliver account
statements to most households in a single envelope, even if they have more than
one account. If you would like additional copies of financial reports and
prospectuses or separate mailing of account statements, please call us.
HOW TO PURCHASE AND SELL
AMERICAN CENTURY FUNDS
The fund offered by this Prospectus is available as an investment option
under your employer-sponsored retirement or savings plan or through or in
connection with a program, product or service offered by a financial
intermediary, such as a bank, broker-dealer or insurance company. Since all
records of your share ownership are maintained by your plan sponsor, plan
recordkeeper, or other financial intermediary, all orders to purchase, exchange
and redeem shares must be made through your employer or other financial
intermediary, as applicable.
If you are purchasing through a retirement or savings plan, the
administrator of your plan or your employee benefits office can provide you with
information on how to participate in your plan and how to select American
Century funds as an investment option.
If you are purchasing through a financial intermediary, you should contact
your service representative at the financial intermediary for information about
how to select American Century funds.
If you have questions about a fund, see "Investment Policies of the Fund,"
page 6, or call one of our Institutional Service Representatives at
1-800-345-3533.
Orders to purchase shares are effective on the day we receive payment. See
"When Share Price Is Determined," page 12.
We may discontinue offering shares generally in the fund (including any
class of shares of a fund) or in any particular state without notice to
shareholders.
HOW TO EXCHANGE FROM ONE AMERICAN
CENTURY FUND TO ANOTHER
Your plan or program may permit you to exchange your investment in the
shares of a fund for shares of another fund in our family. See your plan
administrator, employee benefits office or financial intermediary for details on
the rules in your plan governing exchanges.
HOW TO REDEEM SHARES
Subject to any restrictions imposed by your employer's plan or financial
intermediary's program, you can sell ("redeem") your shares at their net asset
value through the plan or financial intermediary. Your plan administrator,
trustee, financial intermediary or other designated person must provide us with
redemption instructions. The shares will be redeemed at the net asset value next
computed after receipt of the instructions in good order. See "When Share Price
Is Determined," page 12. If you have any questions about how to redeem, contact
your plan administrator, employee benefits office, or service representative at
your financial intermediary, as applicable.
TELEPHONE SERVICES
INVESTORS LINE
To request information about our funds and a current prospectus, or get
answers to any questions that you may have about the funds and the services we
offer, call one of our Institutional Service Representatives at 1-800-345-3533.
PROSPECTUS HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS 11
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 a 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. The net asset values for Target Maturities funds are
determined one hour prior to the close of the Exchange.
Investments and requests to redeem or exchange shares will receive the share
price next determined after receipt by us of the investment, redemption or
exchange request. For example, investments and requests to redeem or exchange
shares received by us or one of our agents or designees before the time as of
which the net asset value of the fund is determined, are effective on, and will
receive the price determined, that day. Investment, redemption and exchange
requests received thereafter are effective on, and receive the price determined
as of, the close of the Exchange on the next day the Exchange is open.
Investments are considered received only when payment is received by us.
Wired funds are considered received on the day they are deposited in our bank
account if they are deposited before the time as of which the net asset value of
the fund is determined.
Investments by telephone pursuant to your prior authorization to us to draw
on your bank account are considered received at the time of your telephone call.
Investment and transaction instructions received by us on any business day
by mail prior to the time as of which the net asset value of the fund is
determined, will receive that day's price. Investments and instructions received
after that time will receive the price determined on the next business day.
If you invest in fund shares through an employer-sponsored retirement plan
or other financial intermediary, it is the responsibility of your plan
recordkeeper or financial intermediary to transmit your purchase, exchange and
redemption requests to the fund's transfer agent prior to the applicable cut-off
time for receiving orders and to make payment for any purchase transactions in
accordance with the fund's procedures or any contractual arrangements with the
fund or the fund's distributor in order for you to receive that day's price.
We have contractual relationships with certain financial intermediaries in
which such intermediaries represent that they have systems to track the time at
which investment orders are received and to segregate orders received at
different times. Based on these representations, the fund has authorized such
intermediaries and their designees to accept purchase and redemption orders on
the fund's behalf up to the applicable cut-off time. The fund will be deemed to
have received such orders upon acceptance by the duly authorized intermediary,
and such orders will be priced at the fund's net asset value next determined
after acceptance on the fund's behalf by such intermediary.
HOW SHARE PRICE IS DETERMINED
The valuation of assets for determining net asset value may be summarized as
follows:
The portfolio securities of the fund, except as otherwise noted, listed or
traded on a domestic securities exchange are valued at the last sale price on
that exchange. Portfolio securities primarily traded on foreign securities
exchanges generally are valued at the preceding closing values of such
securities on the exchange where primarily traded. If no sale is reported, or if
local convention or regulation so provides, the mean of the latest bid and asked
prices is used. Depending on local convention or regulation, securities traded
over-the-counter are priced at the mean of the latest bid and asked prices, or
at the last sale price. When market quotations are not readily available,
securities and other assets are valued at fair
12 ADDITIONAL INFORMATION YOU SHOULD KNOW AMERICAN CENTURY INVESTMENTS
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, 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.
WHERE TO FIND YIELD INFORMATION
The yield of the Investor Class of the fund is published weekly in leading
financial publications and daily in many local newspapers. Because the total
expense ratio for the Advisor Class shares is 0.25% higher than the Investor
Class shares, the yield will be lower than the Investor Class. Yield information
of the Advisor Class may be obtained by calling us.
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 12. 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 certain IRAs and 403(b) plans paid
in cash only if you are at least 59 (1)/(2) years old or permanently and totally
disabled. Distribution checks normally are mailed within seven days after the
record date. Please consult our Investor Services Guide for further information
regarding your distribution options.
TAXES
The fund has elected to be taxed under Subchapter M of the Internal Revenue
Code, which means that to the extent its income is distributed to shareholders,
it pays no income tax.
TAX-DEFERRED ACCOUNTS
If fund shares are purchased through tax-deferred accounts, such as a
qualified employer-sponsored retirement or savings plan, income and capital
gains distributions paid by the fund 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 may
qualify for the 70% dividends received deduction for corporations to the extent
that the fund held shares receiving the dividend for more than 45 days.
Distributions from gains on assets held longer than 12 months but no more than
18 months (28% rate gain) and/or assets held longer than 18 months (20% rate
gain) are taxable as long-term gains regardless of the length of time you have
held the shares. However, you should note that any loss realized upon the sale
or redemption of
PROSPECTUS ADDITIONAL INFORMATION YOU SHOULD KNOW 13
shares held for six months or less will be treated as a long-term capital loss
to the extent of any distribution of long-term capital gain (28% or 20% rate
gain) to you with respect to such shares.
Distributions are taxable to you regardless of whether they are taken in
cash or reinvested, even if the value of your shares is below your cost. If you
purchase shares shortly before a distribution, you must pay income taxes on the
distribution, even though the value of your investment (plus cash received, if
any) will not have increased. In addition, the share price at the time you
purchase shares may include unrealized gains in the securities held in the
investment portfolio of the fund. If these portfolio securities are subsequently
sold and the gains are realized, they will, to the extent not offset by capital
losses, be paid to you as a distribution of capital gains and will be taxable to
you as short-term or long-term capital gains (28% and/or 20% rate gain).
In January of the year following the distribution, if you own shares in a
taxable account, you will receive a Form 1099-DIV notifying you of the status of
your distributions for federal income tax purposes.
Distributions also may be subject to state and local taxes, even if all or a
substantial part of such distributions are derived from interest on U.S.
government obligations which, if you received them directly, would be exempt
from state income tax. However, most but not all states allow this tax exemption
to pass through to fund shareholders when a fund pays distributions to its
shareholders. You should consult your tax advisor about the tax status of such
distributions in your own state.
If you have not complied with certain provisions of the Internal Revenue
Code and Regulations, we or your financial intermediary are required by federal
law to withhold and remit to the IRS 31% of reportable payments (which may
include dividends, capital gains distributions and redemptions). Those
regulations require you to certify that the Social Security number or tax
identification number you provide is correct and that you are not subject to 31%
withholding for previous under-reporting to the IRS. You will be asked to make
the appropriate certification on your application. Payments reported by us that
omit your Social Security number or tax identification number will subject us to
a penalty of $50, which will be charged against your account if you fail to
provide the certification by the time the report is filed. This charge is not
refundable.
In addition to the federal income tax consequences described above relating
to an investment in a fund, there may be other federal, state or local tax
considerations that depend upon the circumstances of each particular investor.
Prospective shareholders are therefore urged to consult their tax advisors with
respect to the effect of this investment on their own specific situations.
MANAGEMENT
INVESTMENT MANAGEMENT
The fund is the sole series of the American Century Investment Trust (the
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 management agreement entered into with the
fund, American Century Investment Management, Inc. serves as the investment
manager of the fund. Its principal place of business is American Century Tower,
4500 Main Street, Kansas City, Missouri 64111. The manager has been providing
investment advisory services to investment companies and institutional clients
since it was founded in 1958.
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 described in
this Prospectus and their work experience for the last five years are as
follows:
DENISE TABACCO, Portfolio Manager, joined American Century in 1988, becoming
a member of its portfolio department in 1991. In 1995 she assumed her current
position as a Portfolio Manager.
14 ADDITIONAL INFORMATION YOU SHOULD KNOW AMERICAN CENTURY INVESTMENTS
JOHN F. WALSH, Portfolio Manager, joined American Century in February 1996
as an Investment Analyst, a position he held until May 1997. At that time he was
promoted to Portfolio Manager. Prior to joining American Century, Mr. Walsh
served as an Assistant Vice President and Analyst at First Interstate Bank, Los
Angeles, California, from July 1993 to January 1996. Prior to that he served as
an Analyst at The Long-Term Credit Bank of Japan, Los Angeles, California.
The activities of the manager are subject only to directions of the fund's
Board of Trustees. The manager pays all the expenses of the fund except
brokerage, taxes, interest, fees and expenses of the non-interested person
trustees (including counsel fees) and extraordinary expenses.
For the services provided to the fund, the manager receives a monthly fee
based on a percentage of the average net assets of the fund. The annual rate at
which this fee is assessed is determined monthly in a two-step process. First, a
fee rate schedule is applied to the assets of all of the funds in a fund's
investment category which are managed by the manager (the Investment Category
Fee). The three investment categories are: Money Market Funds, Bond Funds and
Equity Funds. Second, a separate fee rate schedule is applied to the assets of
all of the funds managed by the manager (the Complex Fee). The Investment
Category Fee and the Complex Fee are then added to determine the unified
management fee payable by the fund to the manager. Currently, the Investment
Category Fee for the fund is an annual rate of 0.30% of the average net assets
of the fund. The Complex Fee for the Advisor Class is currently an annual rate
of 0.05% of the average net assets of the fund. Further information about the
calculation of the annual management fee is contained in the Statement of
Additional Information.
On the first business day of each month, the fund pays a management fee to
the manager for the previous month at the specified rate. The fee for the
previous month is calculated by multiplying the applicable fee for the fund by
the aggregate average daily closing value of the fund's net assets during the
previous month, and further multiplying that product by a fraction, the
numerator of which is the number of days in the previous month and the
denominator of which is 365 (366 in leap years).
CODE OF ETHICS
The fund and the manager have adopted a Code of Ethics that restricts
personal investing practices by employees of the manager and its affiliates.
Among other provisions, the Code of Ethics requires that employees with access
to information about the purchase or sale of securities in the fund's portfolios
obtain preclearance before executing personal trades. With respect to Portfolio
Managers and other investment personnel, the Code of Ethics prohibits
acquisition of securities in an initial public offering, as well as profits
derived from the purchase and sale of the same security within 60 calendar days.
These provisions are designed to ensure that the interests of fund shareholders
come before the interests of the people who manage those funds.
TRANSFER AND ADMINISTRATIVE SERVICES
American Century Services Corporation, American Century Tower, 4500 Main
Street, Kansas City, Missouri 64111, acts as transfer agent and dividend-paying
agent for the fund. It provides facilities, equipment and personnel to the fund,
and is paid for such services by the manager.
Although there is no sales charge levied by the fund, transactions in shares
of the fund may be executed by brokers or investment advisors who charge a
transaction-based fee or other fee for their services. Such charges may vary
among broker-dealers and financial advisors, but in all cases will be retained
by the broker-dealer or financial advisor and not remitted to the fund or the
manager. You should be aware of the fact that these transactions may be made
directly with American Century without incurring such fees.
From time to time, special services may be offered to shareholders who
maintain higher share balances in our family of funds. These services may
include the waiver of minimum investment requirements, expedited confirmation of
shareholder transactions, newsletters and a team of personal representatives.
Any expenses associated with these special services will be paid by the manager
or its affiliates.
The manager and the transfer agent are both wholly owned by American Century
Companies, Inc. (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.
PROSPECTUS ADDITIONAL INFORMATION YOU SHOULD KNOW 15
Pursuant to a Sub-Administration Agreement with the manager, Funds
Distributor Inc. (FDI) serves as the Co-Administrator for the funds. FDI is
responsible for (i) providing certain officers of the funds and (ii) reviewing
and filing marketing and sales literature on behalf of the funds. The fees and
expenses of FDI are paid by the manager.
YEAR 2000 ISSUES
Many of the world's computer systems currently cannot properly recognize or
process date-sensitive information relating to the Year 2000 and beyond. The
fund and the manager depend upon the computer systems of various service
providers, including the transfer agent, for their day-to-day operations.
Inadequate remediation of the Year 2000 problem by these service providers and
others with whom they interact could have an adverse effect on the fund's
operations, including pricing, securities trading and settlement, and the
provision of shareholder services.
The transfer agent, in cooperation with the manager, has assembled a team of
information technology professionals who are taking steps to address Year 2000
issues with respect to its own computers and to obtain satisfactory assurances
that comparable steps are being taken by the fund's and the manager's other
major service providers and vendors. The key phases of the remediation plan
include: an inventory of all internal systems, vendor products and services and
data providers (substantially completed in 1997); an assessment of all systems
for date reliance and the impact of the century rollover on each (substantially
completed with respect to critical systems in early 1998); and the renovation
and testing of affected systems (targeted for completion with respect to
critical systems by the end of 1998). The manager will pay for the remediation
effort with revenues from its management fee, so that the fund will not directly
bear any of the cost.
In light of these remediation efforts, the fund does not anticipate a
material adverse impact on its business, operations or financial condition
relating to Year 2000 issues. However, there can be no assurance that the
remediation plan will be sufficient and timely or that interaction with other
noncomplying computer systems will not have a material adverse effect on the
fund's business, operations or financial condition.
In addition, companies in which the fund invests may have Year 2000 computer
problems. The value of their securities could go down if they do not fix their
problems in time or if fixing them is very expensive. Before making an
investment decision about a company, the manager asks it about its Year 2000
readiness. However, the manager cannot be sure that the information it receives
is complete and accurate, and there is no guarantee that portfolio companies'
Year 2000 problems will not hurt the fund's performance.
DISTRIBUTION OF FUND SHARES
The fund's shares are distributed by FDI, a registered broker-dealer. FDI is
a wholly-owned, indirect subsidiary of Boston Institutional Group, Inc. FDI's
principal business address is 60 State Street, Suite 1300, Boston, Massachusetts
02109. As agent for the fund and the manager, the distributor enters into
contracts with various banks, broker-dealers, insurance companies and other
financial intermediaries with respect to the sale of the fund's shares and/or
the use of the fund's shares in various financial services. The manager (or an
affiliate) pays all expenses incurred in promoting sales of, and distributing,
the Advisor Class and in securing such services out of the Rule 12b-1 fees
described in the section that follows.
Investors may open accounts with American Century only through the
distributor. All purchase transactions in the fund offered by this Prospectus
are processed by the transfer agent, which is authorized to accept any
instructions relating to fund accounts. All purchase orders must be accepted by
the distributor. All fees and expenses of FDI in acting as distributor for the
fund are paid by the manager.
SERVICE AND DISTRIBUTION FEES
Rule 12b-1 adopted by the SEC under the Investment Company Act permits
investment companies that adopt a written plan to pay certain expenses
associated with the distribution of their shares. Pursuant to that rule, the
funds' Board of Trustees and the initial shareholder of the funds' Advisor Class
shares have approved and entered into a Master Distribution and Shareholder
Services Plan (the "Plan") with the distributor. Pursuant to the Plan, the fund
pays a shareholder services fee and a distribution fee, each equal to 0.25% (for
a total of 0.50%) per annum of the average daily net assets of the shares of the
fund's Advisor Class. The shareholder services fee
16 ADDITIONAL INFORMATION YOU SHOULD KNOW AMERICAN CENTURY INVESTMENTS
is paid for the purpose of paying the costs of securing certain shareholder and
administrative services, and the distribution fee is paid for the purpose of
paying the costs of providing various distribution services. All or a portion of
such fees are paid by the manager, as paying agent for the fund, to the banks,
broker-dealers, insurance companies or other financial intermediaries through
which such shares are made available.
The Plan has been adopted and will be administered in accordance with the
requirements of Rule 12b-1 under the Investment Company Act. For additional
information about the Plan and its terms, see "Multiple Class Structure - Master
Distribution and Shareholder Services Plan" in the Statement of Additional
Information. Fees paid pursuant to the Plan may be paid for shareholder services
and the maintenance of accounts and therefore may constitute "service fees" for
purposes of applicable rules of the National Association of Securities Dealers.
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 fund is American Century Tower, 4500 Main
Street, P.O. Box 419385, Kansas City, Missouri 64141-6385. All inquiries may be
made by mail to that address, or by telephone to 1-800-345-3533 (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.
American Century offers two classes of the fund offered by this Prospectus:
an Investor Class and an Advisor Class. The shares offered by this Prospectus
are Advisor Class shares.
The Investor Class is primarily made available to retail investors. The
other class has different fees, expenses, and/or minimum investment requirements
than the Advisor Class. The difference in the fee structures among the classes
is the result of their separate arrangements for shareholder and distribution
services and not the result of any difference in amounts charged by the manager
for core investment advisory services. Accordingly, the core investment advisory
expenses do not vary by class. Different fees and expenses will affect
performance. For additional information concerning the Investor Class of shares,
call one of our Investor Services Representatives at 1-800-345-2021.
Except as described below, all classes of shares of a fund have identical
voting, dividend, liquidation and other rights, preferences, terms and
conditions. The only differences among the various classes are (a) each class
may be subject to different expenses specific to that class, (b) each class has
a different identifying designation or name, (c) each class has exclusive voting
rights with respect to matters solely affecting such class and (d) each class
may have different exchange privileges.
Each share, irrespective of series or class, is entitled to one vote for
each dollar of net asset value applicable to such share on all questions, except
for those matters that must be voted on separately by the series or class of
shares affected. Matters affecting only one series or class are voted upon only
by that series or class.
Shares have non-cumulative voting rights, which means that the holders of
more than 50% of the votes cast in an election of 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 Investment Company 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 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 the Trust to hold a
special meeting of shareholders. We will assist in the communication with other
shareholders.
WE RESERVE THE RIGHT TO CHANGE ANY OF OUR POLICIES, PRACTICES AND PROCEDURES
DESCRIBED IN THIS PROSPECTUS, INCLUDING THE STATEMENT OF ADDITIONAL INFORMATION,
WITHOUT SHAREHOLDER APPROVAL EXCEPT IN THOSE INSTANCES WHERE SHAREHOLDER
APPROVAL IS EXPRESSLY REQUIRED.
PROSPECTUS ADDITIONAL INFORMATION YOU SHOULD KNOW 17
P.O. BOX 419385
KANSAS CITY, MISSOURI
64141-6385
INSTITUTIONAL SERVICES:
1-800-345-3533 OR 816-531-5575
AUTOMATED INFORMATION LINE:
1-800-345-8765
TELECOMMUNICATIONS DEVICE FOR THE DEAF:
1-800-345-1833 OR 816-444-3038
FAX: 816-340-4655
www.americancentury.com
[american century logo(reg. sm)]
American
Century(reg.tm)
9806 [recycled logo]
SH-BKT-12371 Recycled
<PAGE>
PROSPECTUS
[american century logo(reg. sm)]
American
Century(reg.tm)
Brokerage
JUNE 1, 1998
BENHAM
GROUP(reg.tm)
Prime Money Market
INVESTOR CLASS
AMERICAN CENTURY INVESTMENTS
FAMILY OF FUNDS
American Century Investments offers you nearly 70 fund choices covering
stocks, bonds, money markets, specialty investments and blended portfolios. To
help you find the funds that may meet your investment needs, American Century
funds have been divided into three groups based on investment style and
objectives. These groups, which appear below, are designed to help simplify your
fund decisions.
AMERICAN CENTURY INVESTMENTS
- -------------------------------------------------------------------------------
Benham American Century Twentieth Century
Group Group Group
- -------------------------------------------------------------------------------
MONEY MARKET FUNDS ASSET ALLOCATION & GROWTH FUNDS
GOVERNMENT BOND FUNDS BALANCED FUNDS INTERNATIONAL FUNDS
DIVERSIFIED BOND FUNDS CONSERVATIVE EQUITY FUNDS
MUNICIPAL BOND FUNDS SPECIALTY FUNDS
- -------------------------------------------------------------------------------
Prime Money
Market
PROSPECTUS
JUNE 1, 1998
Prime Money Market
INVESTOR CLASS
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 is described in this Prospectus. Its investment objective is listed
on page 2 of the Prospectus. The other funds are described in separate
prospectuses.
Through its Investor Class of shares, American Century offers investors a
full line of no-load funds, investments that have no sales charges or
commissions.
This Prospectus gives you information about the fund that you should know
before investing. Please read this Prospectus carefully and retain it for future
reference. Additional information is included in the Statement of Additional
Information dated June 1, 1998, 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 * P.O. Box 419200
Kansas City, Missouri 64141-6200 * 1-800-345-2021
International calls: 816-531-5575
Telecommunications Device for the Deaf:
1-800-634-4113 * In Missouri: 816-444-3485
www.americancentury.com
Additional information, including this Prospectus and the Statement of
Additional Information, may be obtained by accessing the Web site maintained by
the SEC (www.sec.gov).
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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 the 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
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 ...................................................... 7
Government Obligations ................................................ 8
Variable and Floating-Rate Instruments ................................ 8
Rule 144A Securities .................................................. 8
U.S. Dollar-Denominated Foreign Securities ............................ 9
Other Investment Practices, Their Characteristics
and Risks ............................................................... 9
Repurchase Agreements ................................................. 9
When-Issued Securities ................................................ 9
Borrowing ............................................................. 9
Other Techniques ...................................................... 9
Performance Advertising ................................................... 9
HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS
How to Purchase and Sell
American Century Funds .................................................. 11
How to Exchange from one American
Century Fund to Another ................................................. 11
How to Redeem Shares ...................................................... 11
Telephone Services ........................................................ 11
Investors Line ........................................................ 11
ADDITIONAL INFORMATION YOU SHOULD KNOW
Share Price ............................................................... 12
When Share Price Is Determined ........................................ 12
How Share Price Is Determined ......................................... 12
Where to Find Yield Information ....................................... 13
Distributions ............................................................. 13
Taxes ..................................................................... 13
Tax-Deferred Accounts ................................................. 13
Taxable Accounts ...................................................... 13
Management ................................................................ 14
Investment Management ................................................. 14
Code of Ethics ........................................................ 15
Transfer and Administrative Services .................................. 15
Year 2000 Issues ...................................................... 16
Distribution of Fund Shares ............................................... 16
Further Information About American Century ................................ 16
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:
(as a percentage of average net assets)
Management Fees(2) ............................................... 0.60%
12b-1 Fees ....................................................... none
Other Expenses(3) ................................................ 0.00%
Total Fund Operating Expenses (net of expense limitation) ........ 0.60%
EXAMPLE:
You would pay the following expenses on a 1 year $ 6
$1,000 investment, assuming a 5% annual return and 3 years 19
redemption at the end of each time period: 5 years 33
10 years 75
(1) Redemption proceeds sent by wire are subject to a $10 processing fee.
(2) A portion of the management fee may be paid by the manager to unaffiliated
third parties who provide recordkeeping and administrative services that
would otherwise be performed by an affiliate of the manager. See
"Management-Transfer and Administrative Services," page 15.
(3) Other Expenses, which includes the fees and expenses (including legal
counsel fees) of those trustees who are not "interested persons" as defined
in the Investment Company Act of 1940 (the Investment Company Act), are
expected to be less than 0.01 of 1% of the average net assets for the
current fiscal year.
The purpose of this table is to help you understand the various costs and
expenses that you, as a shareholder, will bear directly or indirectly in
connection with an investment in the class of shares of the fund offered by this
Prospectus. The example set forth above assumes reinvestment of all dividends
and distributions and uses a 5% annual rate of return as required by SEC
regulations.
NEITHER THE 5% RATE OF RETURN NOR THE EXPENSES SHOWN ABOVE SHOULD BE
CONSIDERED INDICATIONS OF PAST OR FUTURE RETURNS AND EXPENSES. ACTUAL RETURNS
AND EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
The shares offered by this Prospectus are Investor Class shares and have no
up-front or deferred sales charges, commissions, or 12b-1 fees. The fund offers
one other class of shares, primarily to institutional investors, that has a
different fee structure than the Investor Class. The difference in the fee
structures between the classes is the result of their separate arrangements for
shareholder and distribution services and not the result of any difference in
amounts charged by the manager for core investment advisory services.
Accordingly, the core investment advisory expenses do not vary by class. A
difference in fees will result in different performance for the other class. For
additional information about the other class, see "Further Information About
American Century," page 16.
4 TRANSACTION AND OPERATING EXPENSE TABLE AMERICAN CENTURY INVESTMENTS
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
PRIME MONEY MARKET
The Financial Highlights for the year ended February 28, 1998, have been
audited by Coopers & Lybrand, L.L.P., independent accountants, whose report
thereon appears in the fund's annual report, which is incorporated by reference
into the Statement of Additional Information. The Financial Highlights for the
periods ended on or before February 28, 1997, have been audited by other
independent accountants. The annual report contains 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.
1998 1997 1996(1) 1995 1994(2)
PER-SHARE DATA
Net Asset Value,
<S> <C> <C> <C> <C> <C>
Beginning of Period ............... $1.00 $1.00 $1.00 $1.00 $1.00
-------- -------- -------- -------- --------
Income from
Investment Operations
Net Investment Income ........... 0.05 0.05 0.06 0.05 0.01
-------- -------- -------- -------- --------
Distributions
From Net
Investment Income ............... (0.05) (0.05) (0.06) (0.05) (0.01)
-------- -------- -------- -------- --------
Net Asset Value,
End of Period ..................... $1.00 $1.00 $1.00 $1.00 $1.00
======== ======== ======== ======== ========
TOTAL RETURN(3) ................. 5.29% 5.04% 5.60% 4.93% 0.96%
RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses
to Average Net Assets ............. 0.50% 0.50% 0.48% 0.04% -
Ratio of Operating Expenses
to Average Net Assets
(Before Expense Waiver) ........... 0.63% 0.63% 0.62% 0.71% 1.49%(4)
Ratio of Net Investment Income
to Average Net Assets ............. 5.17% 4.92% 5.43% 5.28% 3.35%(4)
Ratio of Net Investment Income
to Average Net Assets
(Before Expense Waiver) ........... 5.04% 4.79% 5.29% 4.61% 1.86%(4)
Net Assets, End of Period
(in thousands) .................... $1,417,311 $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, if any. Total returns for
periods less than one year are not annualized.
(4) 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 an explanation of fixed income securities ratings under "Other
Information" in the Statement of Additional Information.
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 paper (including floating-rate
corporations) agency securities)
- --------------------------------------------------------------------------------
Domestic and foreign Commercial paper and short-
nonfinancial corporations term corporate debt obligations
(including fixed- and
variable-rate notes and
bonds)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Issuers Types of Obligations
- --------------------------------------------------------------------------------
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:
(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 that are designated as first-tier
securities as defined by the SEC; that is, securities with the highest rating.
6 INFORMATION REGARDING THE FUND AMERICAN CENTURY INVESTMENTS
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.
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
- --------------------------------------------------------------------------------
PROSPECTUS INFORMATION REGARDING THE FUND 7
Bankers' acceptances are used to finance foreign commercial trade. Issued by
a bank with an importer's name on them, these instruments allow the importer to
back up its own pledge to pay for imported goods with a bank's obligation to
cover the transaction if the importer fails to do so.
Bank notes are senior unsecured promissory notes issued in the United States
by domestic commercial banks.
The bank obligations the fund may buy generally are not insured by the FDIC
or any other insurer.
GOVERNMENT OBLIGATIONS
U.S. Treasury securities differ from one another in their interest rates,
maturities, and issuance and interest payment schedules. Treasury bills have
initial maturities of one year or less; Treasury notes, two to ten years; and
Treasury bonds, more than ten years.
A number of U.S. government agencies and government-sponsored organizations
issue debt securities. These agencies generally are created by Congress to
fulfill a specific need, such as providing credit for home buyers or farmers.
Among these agencies are the Federal Home Loan Banks, the Federal Farm Credit
System, the Student Loan Marketing Association, and the Resolution Funding
Corporation.
Some obligations issued or guaranteed by U.S. government agencies or
instrumentalities are supported by the full faith and credit of the U.S.
government; others are supported by the right of the issuer to borrow from the
Treasury; others are supported by the U.S. government's discretionary authority
to purchase certain obligations of the agency or instrumentality, and others are
supported only by the credit of the issuing agency or instrumentality.
Supranational organizations (generally, multilateral lending institutions,
or MLIs) are created by governments to promote economic reconstruction and
development. An MLI's creditworthiness is based not only on its own financial
performance, but on the willingness and ability of member governments to support
its lending activities.
While maintaining strict financial controls to ensure liquidity and strong
creditworthiness, MLIs finance their operations in the same manner as any other
financial institution, with a combination of short- and long-term debt
obligations. Short-term debt is usually issued in the form of short-term
discount notes and commercial paper.
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) 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 fund 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 investors 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.
8 INFORMATION REGARDING THE FUND AMERICAN CENTURY INVESTMENTS
Accordingly, the Board 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 a 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 such fund's liquidity. No fund may invest
more than 10% of its 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 that 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, see "Investment Restrictions" in the 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 SECURITIES
The fund may sometimes purchase new issues of securities on a when-issued
basis or forward commitment basis when, in the opinion of the manager, such
purchases will further the investment objectives 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 occur 15 to 45 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 such security may decline prior
to delivery, which could result in a loss to the fund. A separate account for
each fund consisting of cash or appropriate liquid assets 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 a 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. Performance data may be quoted separately for the Investor Class and for
the other class.
PROSPECTUS INFORMATION REGARDING THE FUND 9
Cumulative total return data is computed by considering all elements of
return, including reinvestment of dividends and capital gains distributions,
over a stated period of time. Average annual total return is determined by
computing the annual compound return over a stated period of time that would
have produced the fund's cumulative total return over the same period if the
fund's performance had remained constant throughout.
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 for all stock and bond funds. 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 also may include in advertisements data comparing performance with
the performance of non-related investment media, published editorial comments
and performance rankings compiled by independent organizations such as Lipper
Analytical Services 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 2
(1)/(2) year CD rates. Fund performance also may be compared, on a relative
basis, to other funds in our fund family. This relative comparison, which may be
based upon historical fund performance or historical or expected volatility or
other fund characteristics, may be presented numerically, graphically or in
text. Fund performance also may be combined or blended with other funds in our
fund family, and that combined or blended performance may be compared to the
same indices to which individual funds may be compared.
All performance information advertised by the fund is historical in nature
and is not intended to represent or guarantee future results. The value of fund
shares when redeemed may be more or less than their original cost.
10 INFORMATION REGARDING THE FUND AMERICAN CENTURY INVESTMENTS
HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS
The following section explains how to purchase, exchange and redeem the
Investor Class shares of the fund offered by this Prospectus through American
Century Brokerage Access AccountsSM and Standard Account.
To reduce expenses and demonstrate respect for our environment, we have
initiated a project through which we will eliminate duplicate copies of most
financial reports and prospectuses to most households and deliver account
statements to most households in a single envelope, even if they have more than
one account. If you would like additional copies of financial reports and
prospectuses or separate mailing of account statements, please call us.
HOW TO PURCHASE AND SELL AMERICAN CENTURY
FUNDS
The fund offered by this Prospectus is available as an investment option in
connection with a program, product or service offered by American Century
Brokerage. Since all records of your share ownership are maintained by American
Century Brokerage, all orders to purchase, exchange and redeem shares must be
made through American Century Brokerage.
You should contact a Brokerage Associate at 1-888-345-2071 for information
about how to select American Century funds.
If you have questions about a fund, see "Investment Policies of the Fund,"
page 6, or call one of our Investor Service Representatives at 1-800-345-2021.
Orders to purchase shares are effective on the day we receive payment. See
"When Share Price Is Determined," page 12.
We may discontinue offering shares generally in the funds (including any
class of shares of a fund) or in any particular state without notice to
shareholders.
HOW TO EXCHANGE FROM ONE AMERICAN CENTURY
FUND TO ANOTHER
Your American Century Brokerage account permits you to exchange your
investment in the shares of a fund for shares of another fund in our family.
Contact American Century Brokerage at 1-888-345-2071 for details on the rules in
your plan governing exchanges.
HOW TO REDEEM SHARES
Subject to any restrictions imposed by American Century Brokerage, you can
sell ("redeem") your shares at their net asset value through American Century
Brokerage. American Century Brokerage will provide us with redemption
instructions. The shares will be redeemed at the net asset value next computed
after receipt of the instructions in good order. See "When Share Price Is
Determined," page 12. If you have any questions about how to redeem, contact an
American Century Brokerage Associate.
TELEPHONE SERVICES
INVESTORS LINE
To request information about our funds and a current prospectus, or get
answers to any questions that you may have about the funds and the services we
offer, call one of our Investor Services Representatives at 1-800-345-2021.
PROSPECTUS HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS 11
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 a 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. The net asset values for Target Maturities funds are
determined one hour prior to the close of the Exchange.
Investments and requests to redeem or exchange shares will receive the share
price next determined after receipt by us of the investment, redemption or
exchange request. For example, investments and requests to redeem or exchange
shares received by us or one of our agents or designees before the time as of
which the net asset value of the fund is determined, are effective on, and will
receive the price determined, that day. Investment, redemption and exchange
requests received thereafter are effective on, and receive the price determined
as of, the close of the Exchange on the next day the Exchange is open.
Investments are considered received only when payment is received by us.
Wired funds are considered received on the day they are deposited in our bank
account if they are deposited before the time as of which the net asset value of
the fund is determined.
Investments by telephone pursuant to your prior authorization to us to draw
on your bank account are considered received at the time of your telephone call.
Investment and transaction instructions received by us on any business day
by mail prior to the time as of which the net asset value of the fund is
determined, will receive that day's price. Investments and instructions received
after that time will receive the price determined on the next business day.
If you invest in fund shares through an employer-sponsored retirement plan
or other financial intermediary, it is the responsibility of your plan
recordkeeper or financial intermediary to transmit your purchase, exchange and
redemption requests to the fund's transfer agent prior to the applicable cut-off
time for receiving orders and to make payment for any purchase transactions in
accordance with the fund's procedures or any contractual arrangements with the
fund or the fund's distributor in order for you to receive that day's price.
We have contractual relationships with certain financial intermediaries in
which such intermediaries represent that they have systems to track the time at
which investment orders are received and to segregate orders received at
different times. Based on these representations, the fund has authorized such
intermediaries and their designees to accept purchase and redemption orders on
the fund's behalf up to the applicable cut-off time. The fund will be deemed to
have received such orders upon acceptance by the duly authorized intermediary,
and such orders will be priced at the fund's net asset value next determined
after acceptance on the fund's behalf by such intermediary.
HOW SHARE PRICE IS DETERMINED
The valuation of assets for determining net asset value may be summarized as
follows:
The portfolio securities of the fund, except as otherwise noted, listed or
traded on a domestic securities exchange are valued at the last sale price on
that exchange. Portfolio securities primarily traded on foreign securities
exchanges generally are valued at the preceding closing values of such
securities on the exchange where primarily traded. If no sale is reported, or if
local convention or regulation so provides, the mean of the latest bid and asked
prices is used. Depending on local convention or regulation, securities traded
over-the-counter are priced at the mean of the latest bid and asked prices, or
at the last sale price. When market quotations are not readily available,
securities and other assets are valued at fair value as determined in accordance
with procedures adopted by the Board of Trustees.
12 ADDITIONAL INFORMATION YOU SHOULD KNOW AMERICAN CENTURY INVESTMENTS
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, 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.
WHERE TO FIND YIELD INFORMATION
The yield of the Investor Class 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 12. 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 certain IRAs and 403(b) plans paid
in cash only if you are at least 59 (1)/(2) years old or permanently and totally
disabled. Distribution checks normally are mailed within seven days after the
record date. Please consult our Investor Services Guide for further information
regarding your distribution options.
TAXES
The fund has elected to be taxed under Subchapter M of the Internal Revenue
Code, which means that to the extent its income is distributed to shareholders,
it pays no income tax.
TAX-DEFERRED ACCOUNTS
If fund shares are purchased through tax-deferred accounts, such as a
qualified employer-sponsored retirement or savings plan, income and capital
gains distributions paid by the fund 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 may
qualify for the 70% dividends received deduction for corporations to the extent
that the fund held shares receiving the dividend for more than 45 days.
Distributions from gains on assets held longer than 12 months but no more than
18 months (28% rate gain) and/or assets held longer than 18 months (20% rate
gain) are taxable as long-term gains regardless of the length of time you have
held the shares. However, you should note that any loss realized upon the sale
or redemption of shares held for six months or less will be treated as a
long-term capital loss to the extent of any distribution of long-term capital
gain (28% or 20% rate gain) to you with respect to such shares.
PROSPECTUS ADDITIONAL INFORMATION YOU SHOULD KNOW 13
Distributions are taxable to you regardless of whether they are taken in
cash or reinvested, even if the value of your shares is below your cost. If you
purchase shares shortly before a distribution, you must pay income taxes on the
distribution, even though the value of your investment (plus cash received, if
any) will not have increased. In addition, the share price at the time you
purchase shares may include unrealized gains in the securities held in the
investment portfolio of the fund. If these portfolio securities are subsequently
sold and the gains are realized, they will, to the extent not offset by capital
losses, be paid to you as a distribution of capital gains and will be taxable to
you as short-term or long-term capital gains (28% and/or 20% rate gain).
In January of the year following the distribution, if you own shares in a
taxable account, you will receive a Form 1099-DIV notifying you of the status of
your distributions for federal income tax purposes.
Distributions also may be subject to state and local taxes, even if all or a
substantial part of such distributions are derived from interest on U.S.
government obligations which, if you received them directly, would be exempt
from state income tax. However, most but not all states allow this tax exemption
to pass through to fund shareholders when a fund pays distributions to its
shareholders. You should consult your tax advisor about the tax status of such
distributions in your own state.
If you have not complied with certain provisions of the Internal Revenue
Code and Regulations, we are required by federal law to withhold and remit to
the IRS 31% of reportable payments (which may include dividends, capital gains
distributions and redemptions). Those regulations require you to certify that
the Social Security number or tax identification number you provide is correct
and that you are not subject to 31% withholding for previous under-reporting to
the IRS. You will be asked to make the appropriate certification on your
application. Payments reported by us that omit your Social Security number or
tax identification number will subject us to a penalty of $50, which will be
charged against your account if you fail to provide the certification by the
time the report is filed. This charge is not refundable.
In addition to the federal income tax consequences described above relating
to an investment in a fund, there may be other federal, state or local tax
considerations that depend upon the circumstances of each particular investor.
Prospective shareholders are therefore urged to consult their tax advisors with
respect to the effect of this investment on their own specific situations.
MANAGEMENT
INVESTMENT MANAGEMENT
The fund is the sole series of the American Century Investment Trust (the
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 management agreement entered into with the
fund, American Century Investment Management, Inc. serves as the investment
manager of the fund. Its principal place of business is American Century Tower,
4500 Main Street, Kansas City, Missouri 64111. The manager has been providing
investment advisory services to investment companies and institutional clients
since it was founded in 1958.
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 described in
this Prospectus and their work experience for the last five years are as
follows:
DENISE TABACCO, Portfolio Manager, joined American Century in 1988, becoming
a member of its portfolio department in 1991. In 1995 she assumed her current
position as a Portfolio Manager.
JOHN F. WALSH, Portfolio Manager, joined American Century in February 1996
as an Investment Analyst, a position he held until May 1997. At that time he was
promoted to Portfolio Manager. Prior to joining American Century, Mr. Walsh
served as an Assistant
14 ADDITIONAL INFORMATION YOU SHOULD KNOW AMERICAN CENTURY INVESTMENTS
Vice President and Analyst at First Interstate Bank, Los Angeles, California,
from July 1993 to January 1996. Prior to that he served as an Analyst at The
Long-Term Credit Bank of Japan, Los Angeles, California.
The activities of the manager are subject only to directions of the fund's
Board of Trustees. The manager pays all the expenses of the fund except
brokerage, taxes, interest, fees and expenses of the non-interested person
trustees (including counsel fees) and extraordinary expenses.
For the services provided to the fund, the manager receives a monthly fee
based on a percentage of the average net assets of the fund. The annual rate at
which this fee is assessed is determined monthly in a two-step process: First, a
fee rate schedule is applied to the assets of all of the funds in a fund's
investment category which are managed by the manager (the Investment Category
Fee). The three investment categories are: Money Market Funds, Bond Funds and
Equity Funds. Second, a separate fee rate schedule is applied to the assets of
all of the funds managed by the manager (the Complex Fee). The Investment
Category Fee and the Complex Fee are then added to determine the unified
management fee payable by the fund to the manager. Currently, the Investment
Category Fee for the fund is an annual rate of 0.30% of the average net assets
of the fund. The Complex Fee for the Advisor Class is currently an annual rate
of 0.30% of the average net assets of the fund. Further information about the
calculation of the annual management fee is contained in the Statement of
Additional Information.
On the first business day of each month, the fund pays a management fee to
the manager for the previous month at the specified rate. The fee for the
previous month is calculated by multiplying the applicable fee for the fund by
the aggregate average daily closing value of the fund's net assets during the
previous month, and further multiplying that product by a fraction, the
numerator of which is the number of days in the previous month and the
denominator of which is 365 (366 in leap years).
CODE OF ETHICS
The fund and the manager have adopted a Code of Ethics that restricts
personal investing practices by employees of the manager and its affiliates.
Among other provisions, the Code of Ethics requires that employees with access
to information about the purchase or sale of securities in the fund's portfolios
obtain preclearance before executing personal trades. With respect to Portfolio
Managers and other investment personnel, the Code of Ethics prohibits
acquisition of securities in an initial public offering, as well as profits
derived from the purchase and sale of the same security within 60 calendar days.
These provisions are designed to ensure that the interests of fund shareholders
come before the interests of the people who manage those funds.
TRANSFER AND ADMINISTRATIVE SERVICES
American Century Services Corporation, American Century Tower, 4500 Main
Street, Kansas City, Missouri 64111, acts as transfer agent and dividend-paying
agent for the fund. It provides facilities, equipment and personnel to the fund,
and is paid for such services by the manager.
Although there is no sales charge levied by the fund, transactions in shares
of the fund may be executed by brokers or investment advisors who charge a
transaction-based fee or other fee for their services. Such charges may vary
among broker-dealers and financial advisors, but in all cases will be retained
by the broker-dealer or financial advisor and not remitted to the fund or the
manager. You should be aware of the fact that these transactions may be made
directly with American Century without incurring such fees.
From time to time, special services may be offered to shareholders who
maintain higher share balances in our family of funds. These services may
include the waiver of minimum investment requirements, expedited confirmation of
shareholder transactions, newsletters and a team of personal representatives.
Any expenses associated with these special services will be paid by the manager
or its affiliates.
The manager and the transfer agent are both wholly owned by American Century
Companies, Inc. (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.
Pursuant to a Sub-Administration Agreement with the manager, Funds
Distributor Inc. (FDI) serves as
PROSPECTUS ADDITIONAL INFORMATION YOU SHOULD KNOW 15
the co-administrator for the fund. FDI is responsible for (i) providing certain
officers of the fund and (ii) reviewing and filing marketing and sales
literature on behalf of the fund. The fees and expenses of FDI are paid by the
manager.
YEAR 2000 ISSUES
Many of the world's computer systems currently cannot properly recognize or
process date-sensitive information relating to the Year 2000 and beyond. The
fund and the manager depend upon the computer systems of various service
providers, including the transfer agent, for their day-to-day operations.
Inadequate remediation of the Year 2000 problem by these service providers and
others with whom they interact could have an adverse effect on the fund's
operations, including pricing, securities trading and settlement, and the
provision of shareholder services.
The transfer agent, in cooperation with the manager, has assembled a team of
information technology professionals who are taking steps to address Year 2000
issues with respect to its own computers and to obtain satisfactory assurances
that comparable steps are being taken by the fund's and the manager's other
major service providers and vendors. The key phases of the remediation plan
include: an inventory of all internal systems, vendor products and services and
data providers (substantially completed in 1997); an assessment of all systems
for date reliance and the impact of the century rollover on each (substantially
completed with respect to critical systems in early 1998); and the renovation
and testing of affected systems (targeted for completion with respect to
critical systems by the end of 1998). The manager will pay for the remediation
effort with revenues from its management fee, so that the fund will not directly
bear any of the cost.
In light of these remediation efforts, the fund does not anticipate a
material adverse impact on its business, operations or financial condition
relating to Year 2000 issues. However, there can be no assurance that the
remediation plan will be sufficient and timely or that interaction with other
noncomplying computer systems will not have a material adverse effect on the
fund's business, operations or financial condition.
In addition, companies in which the fund invests may have Year 2000 computer
problems. The value of their securities could go down if they do not fix their
problems in time or if fixing them is very expensive. Before making an
investment decision about a company, the manager asks it about its Year 2000
readiness. However, the manager cannot be sure that the information it receives
is complete and accurate, and there is no guarantee that portfolio companies'
Year 2000 problems will not hurt the fund's performance.
DISTRIBUTION OF FUND SHARES
The fund's shares are distributed by FDI, a registered broker-dealer. FDI is
a wholly-owned indirect subsidiary of Boston Institutional Group, Inc. FDI's
principal business address is 60 State Street, Suite 1300, Boston, Massachusetts
02109. The Investor Class of shares does not pay any commissions or sales loads
to the distributor or to any other broker-dealers or financial intermediaries in
connection with the distribution of fund shares.
Investors may open accounts with American Century only through the
distributor. All purchase transactions in the fund offered by this Prospectus
are processed by the transfer agent, which is authorized to accept any
instructions relating to fund accounts. All purchase orders must be accepted by
the distributor. All fees and expenses of FDI in acting as distributor for the
fund are paid by the manager.
FURTHER INFORMATION ABOUT AMERICAN CENTURY
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 fund is American Century Tower, 4500 Main
Street, P.O. Box 419200, Kansas City, Missouri 64141-6200. All inquiries may be
made by mail to that address, or by telephone to 1-800-345-2021 (international
calls: 816-531-5575).
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.
American Century offers two classes of the fund offered by this Prospectus:
an Investor Class and an Advisor Class. The shares offered by this Prospectus
16 ADDITIONAL INFORMATION YOU SHOULD KNOW AMERICAN CENTURY INVESTMENTS
are Investor Class shares and have no up-front charges, commissions, or
12b-1 fees.
The other class of shares is primarily offered to institutional investors or
through institutional distribution channels, such as employer-sponsored
retirement plans or through banks, broker-dealers, insurance companies or other
financial intermediaries. The other class has different fees, expenses, and/or
minimum investment requirements than the Investor Class. The difference in the
fee structures between the classes is the result of their separate arrangements
for shareholder and distribution services and not the result of any difference
in amounts charged by the manager for core investment advisory services.
Accordingly, the core investment advisory expenses do not vary by class.
Different fees and expenses will affect performance. For additional information
concerning the other class of shares not offered by this Prospectus, call us at
1-800-345-3533 or contact a sales representative or financial intermediary who
offers this class of shares.
Except as described below, all classes of shares of a fund have identical
voting, dividend, liquidation and other rights, preferences, terms and
conditions. The only differences between the classes are (a) each class may be
subject to different expenses specific to that class, (b) each class has a
different identifying designation or name, (c) each class has exclusive voting
rights with respect to matters solely affecting such class and (d) each class
may have different exchange privileges.
Each share, irrespective of series or class, is entitled to one vote for
each dollar of net asset value applicable to such share on all questions, except
for those matters that must be voted on separately by the series or class of
shares affected. Matters affecting only one series or class are voted upon only
by that series or class.
Shares have non-cumulative voting rights, which means that the holders of
more than 50% of the votes cast in an election of 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 Investment Company 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 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 the Trust to hold a
special meeting of shareholders. We will assist in the communication with other
shareholders.
WE RESERVE THE RIGHT TO CHANGE ANY OF OUR POLICIES, PRACTICES AND PROCEDURES
DESCRIBED IN THIS PROSPECTUS, INCLUDING THE STATEMENT OF ADDITIONAL INFORMATION,
WITHOUT SHAREHOLDER APPROVAL EXCEPT IN THOSE INSTANCES WHERE SHAREHOLDER
APPROVAL IS EXPRESSLY REQUIRED.
PROSPECTUS ADDITIONAL INFORMATION YOU SHOULD KNOW 17
TO CONTACT AMERICAN CENTURY BROKERAGE, INC.:
P.O. BOX 419146
KANSAS CITY, MISSOURI
64141-6146
BROKERAGE ASSOCIATE:
1-888-345-2071
TELESELECT AUTOMATED INFORMATION AND TRADING LINE:
1-888-345-2091
www.americancentury.com
TO CONTACT THE FUND:
P.O. BOX 419200
KANSAS CITY, MISSOURI
64141-6200
INVESTOR SERVICES:
1-800-345-2021 OR 816-531-5575
AUTOMATED INFORMATION LINE:
1-800-345-8765
TELECOMMUNICATIONS DEVICE FOR THE DEAF:
1-800-634-4113 OR 816-444-3485
FAX: 816-340-7962
www.americancentury.com
[american century logo(reg. sm)]
American
Century(reg.tm)
Brokerage
9806 [recycled logo]
BK-BKT-12450 Recycled
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
[american century logo(reg. sm)]
American
Century(reg.tm)
JUNE 1, 1998
BENHAM
GROUP(reg.tm)
Prime Money Market
STATEMENT OF ADDITIONAL INFORMATION
JUNE 1, 1998
AMERICAN CENTURY INVESTMENT TRUST
This Statement is not a prospectus but should be read in conjunction with the
fund's current Prospectus, dated June 1, 1998. The fund's annual report for the
fiscal year ended February 28, 1998, 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 .................................................... 7
Valuation of Portfolio Securities ......................................... 7
Performance Advertising ................................................... 8
Taxes ..................................................................... 9
About the Trust ........................................................... 9
Custodians ................................................................ 10
Independent Accountants ................................................... 10
Multiple Class Structure .................................................. 10
Trustees and Officers ..................................................... 12
Management ................................................................ 14
Distribution of Fund Shares ............................................... 16
Additional Purchase and Redemption Information ............................ 17
Other Information ......................................................... 17
Financial Statements ...................................................... 19
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.
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 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.
American Century Investment Management, Inc. (the manager) attempts to
minimize the risks associated with repurchase agreements by adhering to written
guidelines that govern repurchase agreements. These guidelines strictly govern
(i) the type of securities that may be acquired and held under repurchase
agreements; (ii) collateral requirements for sellers under repurchase
agreements; (iii) the amount of the fund's net assets that may be committed to
repurchase agreements that mature in more than seven days; and (iv) the manner
in which the fund must take delivery of securities subject to repurchase
agreements. Moreover, the Board of Trustees reviews and approves, on a quarterly
basis, the creditworthiness of brokers, dealers and banks with whom the fund may
enter into repurchase agreements. The fund may enter into a repurchase agreement
only with an entity that appears on a list
2 AMERICAN CENTURY INVESTMENTS
of those that have been approved by the Board as sufficiently creditworthy.
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 Investment Company 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 segregate appropriate securities 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).
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 segregate until the settlement date appropriate securities consistent
with SEC regulations. When the time comes to pay for the 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 taxable 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
STATEMENT OF ADDITIONAL INFORMATION 3
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.
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 indices 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 indices 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 indices as these indices 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 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
4 AMERICAN CENTURY INVESTMENTS
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 earn additional income. If a
borrower defaulted on a securities loan, the fund could experience delays in
recovering securities it loaned; 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
guidelines prescribed by the Board of Trustees governing lending of securities.
These guidelines strictly govern (i) the type and amount of collateral that must
be received by the fund; (ii) the circumstances under which additions to that
collateral must be made by borrowers; (iii) the return received by the fund on
the loaned securities; (iv) the limitations on the percentage of fund assets on
loan; and (v) the credit standards applied in evaluating potential borrowers of
portfolio securities. In addition, the guidelines require that the fund have the
option to terminate any loan of a portfolio security at any time and set
requirements for recovery of securities from borrowers.
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.
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 also may 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
STATEMENT OF ADDITIONAL INFORMATION 5
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 are set forth below. These investment
restrictions are fundamental and may not be changed without approval of "a
majority of the outstanding votes of shareholders" of the fund, as determined in
accordance with the Investment Company Act.
AS A FUNDAMENTAL POLICY, THE FUND SHALL NOT:
1) issue senior securities, except as permitted under the Investment
Company Act of 1940.
2) borrow money, except that the fund may
borrow money for temporary or emergency purposes (not for leveraging or
investment) in an amount not exceeding 33 (1)/(3)% of the fund's total
assets (including the amount borrowed) less liabilities (other than
borrowings).
3) lend any security or make any other loan if, as
a result, more than 33 (1)/(3)% of the fund's total assets would be
lent to other parties, except, (i) through the purchase of debt
securities in accordance with its investment objective, policies and
limitations, or (ii) by engaging in repurchase agreements with respect
to portfolio securities.
4) purchase or sell real estate unless acquired as a result of ownership
of securities or other instruments. This policy shall not prevent the
fund from investment in securities or other instruments backed by real
estate or securities of companies that deal in real estate or are
engaged in the real estate business.
5) concentrate its investments in securities of issuers in a particular
industry (other than securities issued or guaranteed by the U.S.
government or any of its agencies or instrumentalities), except that
the fund will invest more than 25% of its total assets in the financial
services industry.
6) act as an underwriter of securities issued by others, except to the
extent that the fund may be considered an underwriter within the
meaning of the Securities Act of 1933 in the disposition of restricted
securities.
7) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments; provided that this
limitation shall not prohibit the fund from purchasing or selling
options and futures contracts or from investing in securities or other
instruments backed by physical commodities.
8) invest for purposes of exercising control over management.
In addition, the fund is subject to the following additional investment
restrictions which are not fundamental and may be changed by the Board of
Trustees.
AS AN OPERATING POLICY, THE FUND:
a) shall not purchase additional investment securities at any time during
which outstanding borrowings exceed 5% of the total assets of the fund.
b) shall not purchase or sell futures contracts 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.
c) shall not 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.
d) shall not sell securities short, unless it owns or has the right to
obtain securities equivalent in kind and amount to the securities sold
short, and provided that transactions in futures contracts and options
are not deemed to constitute selling securities short.
e) shall not purchase securities on margin, except that the fund may
obtain such short-term credits as are necessary for the clearance of
transactions, and provided that margin payments in connection with
futures contracts and options on futures contracts shall not constitute
purchasing securities on margin.
6 AMERICAN CENTURY INVESTMENTS
For purposes of the investment restriction (5), relating to concentration,
the fund shall not purchase any securities which would cause 25% or more of the
value of the fund's total assets at the time of purchase to be invested in the
securities of one or more issuers conducting their principal business activities
in the same industry, provided that (i) there is no limitation with respect to
obligations issued or guaranteed by the U.S. government, any state, territory or
possession of the United States, the District of Columbia or any of their
authorities, agencies, instrumentalities or political subdivisions and
repurchase agreements secured by such instruments, (ii) wholly-owned finance
companies will be considered to be in the industries of their parents if their
activities are primarily related to financing the activities of the parents,
(iii) utilities will be divided according to their services, for example, gas,
gas transmission, electric and gas, electric and telephone will each be
considered a separate industry, and (iv) personal credit and business credit
businesses will be considered separate industries.
Unless otherwise indicated, percentage limitations included in the
restrictions apply at the time the fund enters into a transaction. Accordingly,
any later increase or decrease beyond the specified limitation resulting from a
change in the fund's new assets will not be considered in determining whether it
has complied with its investment restrictions.
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. Since 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, 1998,
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, 1998,
the fund held securities issued by the following brokers or dealers in the
following aggregate amounts: Merrill Lynch, $44,436,373, Morgan Stanley Dean
Witter, $50,332,075, Goldman Sachs Group, $36,604,707, Bear Stearns Co.,
$9,889,283 and Credit Suisse First Boston, $39,623,977.
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 p.m. Central
time each day the Exchange is open for business. The Exchange has designated the
following holiday closings for 1998: 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 to be observed in the future, the Exchange may
modify its holiday schedule at any time.
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
STATEMENT OF ADDITIONAL INFORMATION 7
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 fund operates pursuant to Investment Company Act Rule 2a-7, which
permits valuation of portfolio securities on the basis of amortized cost. As
required by the Rule, the Board of Trustees has adopted procedures designed to
stabilize, to the extent reasonably possible, the fund's price per share as
computed for the purposes of sales and redemptions at $1.00. While the
day-to-day operation of the fund has been delegated to the manager, the quality
requirements established by the procedures limit investments to certain
instruments that the Board of Trustees has determined present minimal credit
risks and that have been rated in one of the two highest rating categories as
determined by a rating agency or, in the case of unrated securities, of
comparable quality. The procedures require review of the fund's portfolio
holdings at such intervals as are reasonable in light of current market
conditions to determine whether the fund's net asset value calculated by using
available market quotations deviates from the per-share value based on amortized
cost. The procedures also prescribe the action to be taken if such deviations
should occur.
PERFORMANCE ADVERTISING
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 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, 1998, the fund's yield and
effective yield are indicated in the following table.
7-Day
7-Day Effective
Yield Yield
- --------------------------------------------------------------------------------
Prime Money Market 5.17% 5.30%
- --------------------------------------------------------------------------------
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 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.
8 AMERICAN CENTURY INVESTMENTS
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 indices 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 indices of stock market
performance; and indices and historical data supplied by major securities
brokerage or investment advisory firms. The fund also may 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.
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.
STATEMENT OF ADDITIONAL INFORMATION 9
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.
CUSTODIANS
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 collecting 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 ACCOUNTANTS
Coopers & Lybrand L.L.P., City Center Square, 1100 Main Street, Suite 900,
Kansas City, Missouri 64105-2140, serves as the Trust's independent accountants
and provides services including the audit of the annual financial statements.
MULTIPLE CLASS STRUCTURE
The fund's Board of Trustees has adopted a multiple class plan (the Multiple
Class Plan) pursuant to Rule 18f-3 adopted by the SEC. Pursuant to such plan,
the fund may issue up to two classes of shares: an Investor Class and an Advisor
Class.
The Investor Class is made available to investors directly without any load
or commission, for a single unified management fee. The Advisor Class is made
available to institutional shareholders or through financial intermediaries that
do not require the same level of shareholder and administrative services from
the manager as Investor Class shareholders. As a result, the manager is able to
charge this class a lower unified management fee. In addition to the unified
management fee, however, the Advisor Class shares are subject to a Master
Distribution and Shareholder Services Plan (described on page 11). Both plans
have been adopted by the fund's Board of Trustees and initial shareholder in
accordance with Rule 12b-1 adopted by the SEC under the Investment Company Act.
RULE 12B-1
Rule 12b-1 permits an investment company to pay expenses associated with the
distribution of its shares in accordance with a plan adopted by the investment
company's Board of Trustees and approved by its shareholders. Pursuant to such
rule, the Board of Trustees and initial shareholder of the fund's Advisor Class
have approved and entered into a Master Distribution and Shareholder Services
Plan, with respect to the Advisor Class (the Plan). The Plan is described below.
In adopting the Plan, the Board of Trustees
10 AMERICAN CENTURY INVESTMENTS
(including a majority of Trustees who are not "interested persons" of the fund
[as defined in the Investment Company Act], hereafter referred to as the
"independent Trustees") determined that there was a reasonable likelihood that
the Plans would benefit the fund and the shareholders of the affected class.
Pursuant to Rule 12b-1, information with respect to revenues and expenses under
the Plan is presented to the Board of Trustees quarterly for its consideration
in connection with its deliberations as to the continuance of the Plan.
Continuance of the Plan must be approved by the Board of Trustees (including a
majority of the independent Trustees) annually. The Plan may be amended by a
vote of the Board of Trustees (including a majority of the independent Trustees)
, except that the Plan may not be amended to materially increase the amount to
be spent for distribution without majority approval of the shareholders of the
affected class. The Plan terminates automatically in the event of an assignment
and may be terminated upon a vote of a majority of the independent Trustees or
by vote of a majority of the outstanding voting securities of the affected
class.
All fees paid under the Plan will be made in accordance with Section 26 of
the Rules of Fair Practice of the National Association of Securities Dealers.
MASTER DISTRIBUTION AND SHAREHOLDER SERVICES PLAN
As described in the Prospectuses, the fund's Advisor Class of shares is also
made available to participants in employer-sponsored retirement or savings plans
and to persons purchasing through financial intermediaries, such as banks,
broker-dealers and insurance companies. The distributor enters into contracts
with various banks, broker-dealers, insurance companies and other financial
intermediaries with respect to the sale of the fund's shares and/or the use of
the fund's shares in various investment products or in connection with various
financial services.
Certain recordkeeping and administrative services that are provided by the
fund's transfer agent for the Investor Class shareholders may be performed by a
plan sponsor (or its agents) or by a financial intermediary for shareholders in
the Advisor Class. In addition to such services, the financial intermediaries
provide various distribution services.
To enable the fund's shares to be made available through such plans and
financial intermediaries, and to compensate them for such services, the fund's
manager has reduced its unified management fee by 0.25% per annum with respect
to the Advisor Class shares and the fund's Board of Trustees has adopted a
Master Distribution and Shareholder Services Plan (the Distribution Plan).
Pursuant to such Plan, the Advisor Class shares pay a fee of 0.50% annually of
the aggregate average daily assets of the fund's Advisor Class shares, 0.25% of
which is paid for Shareholder Services (as described below) and 0.25% of which
is paid for distribution services.
The manager and the fund's distributor, Funds Distributor, Inc. (the
distributor) enter into contracts with each financial intermediary for the
provision of certain shareholder services and utilizes the shareholder services
fees received under the Plan to pay for such services. Payments may be made for
a variety of shareholder services, including, but are not limited to, (a)
receiving, aggregating and processing purchase, exchange and redemption requests
from beneficial owners (including contract owners of insurance products that
utilize the fund as underlying investment media) of shares and placing purchase,
exchange and redemption orders with the distributor; (b) providing shareholders
with a service that invests the assets of their accounts in shares pursuant to
specific or pre-authorized instructions; (c) processing dividend payments from a
fund on behalf of shareholders and assisting shareholders in changing dividend
options, account designations and addresses; (d) providing and maintaining
elective services such as check writing and wire transfer services; (e) acting
as shareholder of record and nominee for beneficial owners; (f) maintaining
account records for shareholders and/or other beneficial owners; (g) issuing
confirmations of transactions; (h) providing subaccounting with respect to
shares beneficially owned by customers of third parties or providing the
information to a fund as necessary for such subaccounting; (i) preparing and
forwarding shareholder communications from the fund (such as proxies,
shareholder reports, annual and semi-annual financial statements and dividend,
distribution and tax notices) to shareholders and/or other beneficial owners;
(j) providing other similar administrative and sub-transfer agency
STATEMENT OF ADDITIONAL INFORMATION 11
services; and (k) paying "service fees" for the provision of personal,
continuing services to investors, as contemplated by the Rules of Fair Practice
of the NASD (collectively referred to as "shareholder services"). Shareholder
services do not include those activities and expenses that are primarily
intended to result in the sale of additional shares of the fund.
Distribution services include any activity undertaken or expense incurred
that is primarily intended to result in the sale of Advisor Class shares, which
services may include but are not limited to, (a) the payment of sales
commissions, ongoing commissions and other payments to brokers, dealers,
financial institutions or others who sell Advisor Class shares pursuant to
selling agreements; (b) compensation to registered representatives or other
employees of distributor who engage in or support distribution of the fund's
Advisor Class shares; (c) compensation to, and expenses (including overhead and
telephone expenses) of, distributor; (d) the printing of prospectuses,
statements of additional information and reports for other than existing
shareholders; (e) the preparation, printing and distribution of sales literature
and advertising materials provided to the fund's shareholders and prospective
shareholders; (f) receiving and answering correspondence from prospective
shareholders, including distributing prospectuses, statements of additional
information, and shareholder reports; (g) the providing of facilities to answer
questions from prospective investors about fund shares; (h) complying with
federal and state securities laws pertaining to the sale of fund shares; (i)
assisting investors in completing application forms and selecting dividend and
other account options; (j) the providing of other reasonable assistance in
connection with the distribution of fund shares; (k) the organizing and
conducting of sales seminars and payments in the form of transactional
compensation or promotional incentives; (l) profit on the foregoing; (m) the
payment of "service fees" for the provision of personal, continuing services to
investors, as contemplated by the Rules of Fair Practice of the NASD and (n)
such other distribution and services activities as the manager determines may be
paid for by the fund pursuant to the terms of this Agreement and in accordance
with Rule 12b-1 of the Investment Company Act.
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 Investment
Company Act) by virtue of, among other considerations, their affiliation with
either the Trust; the Trust's manager; the Trust's agent for transfer and
administrative services, American Century Services Corporation (ACS); the
Trust's distribution agent, Funds Distributor, Inc. (FDI); 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 Messrs. Lyons, Looby, Zindel and Stowers III, and Ms.
Roepke and Ms. Wade, is 1665 Charleston Road, Mountain View, California 94043.
The address of Messrs. Lyons, Looby, Zindel and Stowers III, and Ms. Roepke and
Ms. Wade, is American Century Tower, 4500 Main Street, Kansas City, Missouri
64111.
TRUSTEES
ALBERT A. EISENSTAT (67), independent Trustee (1995). Mr. Eisenstat is
currently the general partner of Discovery Ventures (1996), a venture capital
firm. He also 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 (51), 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). He is counsel to Marron, Reid & Sheehy (a San Francisco law firm,
1984).
*WILLIAM M. LYONS (42), Trustee (1998). Mr. Lyons is President, Chief
Operating Officer and General Counsel of ACC; Executive Vice President and
12 AMERICAN CENTURY INVESTMENTS
General Counsel of ACS and ACIS; Assistant Secretary of ACC; and Secretary of
ACS and ACIS.
MYRON S. SCHOLES (56), independent Trustee (1993). Mr. Scholes was awarded
the 1997 Nobel Memorial Prize in Economic Sciences for his role in the
development of the Black-Scholes option pricing model. Mr. Scholes is a
principal of Long-Term Capital Management (1993). He is also the 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 (69), independent Trustee (1993). Mr. Scott is the Ralph M.
Parsons Professor of Law and Business at Stanford Law School (1972) and a
Director of RCM Capital Funds, Inc. (1994).
ISAAC STEIN (51), 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 (39), 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 (53), 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
*RICHARD W. INGRAM (42), President (1998); Executive Vice President and
Director of Client Services and Treasury Administration of FDI. Mr. Ingram
joined FDI in 1995. Prior to joining FDI, Mr. Ingram served as Vice President
and Division Manager of First Data Investor Services Group, Inc. (from March
1994 to November 1995), and before that as Vice President, Assistant Treasurer
and Tax Director - Mutual Funds of The Boston Company, Inc. (from 1989 to 1994).
*DOUGLAS A. PAUL (51), Secretary (1993), Vice President (1993), and General
Counsel (1993); Secretary and Vice President of the funds advised by the
Manager.
*MARYANNE ROEPKE (42), CPA, Chief Financial Officer and Treasurer (1995);
Senior Vice President and Assistant Treasurer of ACS.
*CHRISTOPHER J. KELLEY (33), Vice President (1998); Vice President and
Associate General Counsel of FDI. Mr. Kelley joined FDI in 1996. Prior to
joining FDI, Mr. Kelley served as Assistant Counsel at Forum Financial Group
(from April 1994 to July 1996), and before that as a compliance officer for
Putnam Investments (from 1992 to 1994).
*MARY A. NELSON (34), Vice President (1998); Vice President and Manager of
Treasury Services and Administration of FDI. Ms. Nelson joined FDI in 1995.
Prior to joining FDI, Ms. Nelson served as Assistant Vice President and Client
Manager for The Boston Company, Inc. (from 1989 to 1994).
*PATRICK A. LOOBY (39), Vice President and Assistant Secretary (1998); Vice
President of ACS.
*JON ZINDEL (30), Tax Officer (1997); Director of Taxation (1996); Vice
President of ACS (1998); Tax Manager, Price Waterhouse LLP (1989).
*C. JEAN WADE (34), Controller (1996).
The table on the next page summarizes the compensation that the trustees
received for the fund's fiscal year ended February 28, 1998, 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, 1998, the fund's trustees and officers, as a group, owned less
than 1% of the fund's total shares outstanding.
STATEMENT OF ADDITIONAL INFORMATION 13
TRUSTEE COMPENSATION FOR THE FISCAL YEAR ENDED FEBRUARY 28, 1998
Total Compensation
Aggregate From the
Name of Compensation American Century
Trustee* From The Fund Family of Funds**
- ----------------------------------------------------------------------------
Albert A. Eisenstat $1,357 $60,000
Ronald J. Gilson $9,095 $68,000
Myron S. Scholes $1,242 $58,750
Kenneth E. Scott $8,916 $66,000
Ezra Solomon*** $X,XXX $XX,XXX
Isaac Stein $8,569 $62,500
Jeanne D. Wohlers $1,562 $62,500
- ----------------------------------------------------------------------------
* Interested Trustees receive no compensation for their services as such.
** Includes compensation paid by the 15 investment company members of the
American Century family of funds.
*** Retired December, 1996.
The trust has adopted the American Century Mutual Funds Deferred
Compensation Plan for Non-Interested Directors or Trustees. Under the Plan, the
non-interested person trustees may defer receipt of all or part of the fees to
be paid to them for serving as trustees of the corporation.
Under the Plan, all deferred fees are credited to an account established in
the name of the trustees. The amounts credited to the account then increase or
decrease, as the case may be, in accordance with the performance of one or more
of the American Century funds that are selected by the director. The account
balance continues to fluctuate in accordance with the performance of the
selected fund or funds until final payment of all amounts credited to the
account. Trustees are allowed to change their designation of mutual funds from
time to time.
No deferred fees are payable until such time as a trustee resigns, retires
or otherwise ceases to be a member of the Board of Trustees. Trustees may
receive deferred fee account balances either in a lump sum payment or in
substantially equal installment payments to be made over a period not to exceed
10 years. Upon the death of a trustee, all remaining deferred fee account
balances are paid to the trustee's beneficiary or, if none, to the trustee's
estate.
The Plan is an unfunded plan and, accordingly, American Century has no
obligation to segregate assets to secure or fund the deferred fees. The rights
of the trustees to receive their deferred fee account balances are the same as
the rights of a general unsecured creditor of the corporation. The Plan may be
terminated at any time by the administrative committee of the Plan. If
terminated, all deferred fee account balances will be paid in a lump sum.
No deferred fees were paid to any trustee under the Plan during the fiscal
year ended February 28, 1998.
Those trustees who are "interested persons," as defined in the Investment
Company Act, receive no fee as such for serving as a trustee. The salaries of
such individuals, who also are officers of the fund, are paid by the manager.
MANAGEMENT
The fund has an investment management agreement with the manager dated
August 1, 1997. This agreement was approved by the shareholders of the fund on
July 30, 1997.
For the services provided to the fund, the manager receives a monthly fee
based on a percentage of the average net assets of the fund. The annual rate at
which this fee is assessed is determined monthly in a two-step process: First, a
fee rate schedule is applied to the assets of all of the money market funds
managed by the manager (the Investment Category Fee). The three investment
categories are: Money Market Funds, Bond Funds and Equity Funds. Second, a
separate fee rate schedule is applied to the assets of all of the funds managed
by the manager (the Complex Fee). The Investment Category Fee and the Complex
Fee are then added to determine the unified management fee payable by the fund
to the manager.
The schedule by which the Investment Category Fee is determined is as
follows:
Category Assets Fee Rate
- --------------------------------------------------------------------------------
First $1 billion 0.3700%
Next $1 billion 0.3270%
Next $3 billion 0.2860%
Next $5 billion 0.2690%
Next $15 billion 0.2580%
Next $25 billion 0.2575%
Thereafter 0.2570%
- --------------------------------------------------------------------------------
14 AMERICAN CENTURY INVESTMENTS
The Complex Fee Schedule is as follows:
Complex Assets Fee Rate
- --------------------------------------------------------------------------------
First $2.5 billion 0.3100%
Next $7.5 billion 0.3000%
Next $15.0 billion 0.2985%
Next $25.0 billion 0.2970%
Next $50.0 billion 0.2960%
Next $100.0 billion 0.2950%
Next $100.0 billion 0.2940%
Next $200.0 billion 0.2930%
Next $250.0 billion 0.2920%
Next $500.0 billion 0.2910%
Thereafter 0.2900%
- --------------------------------------------------------------------------------
The Advisor Class Complex Fee Schedule is as follows:
Complex Assets Fee Rate
- --------------------------------------------------------------------------------
First $2.5 billion 0.0600%
Next $7.5 billion 0.0500%
Next $15.0 billion 0.0485%
Next $25.0 billion 0.0470%
Next $50.0 billion 0.0460%
Next $100.0 billion 0.0450%
Next $100.0 billion 0.0440%
Next $200.0 billion 0.0430%
Next $250.0 billion 0.0420%
Next $500.0 billion 0.0410%
Thereafter 0.0400%
- --------------------------------------------------------------------------------
On the first business day of each month, the fund pays a management fee to
the manager for the previous month at the specified rate. The fee for the
previous month is calculated by multiplying the applicable fee for the fund by
the aggregate average daily closing value of the fund's net assets during the
previous month by a fraction, the numerator of which is the number of days in
the previous month and the denominator of which is 365 (366 in leap years).
The management agreement shall continue in effect until the earlier of the
expiration of two years from the date of its execution or until the first
meeting of shareholders following such execution and for as long thereafter as
its continuance is specifically approved at least annually by (i) the fund's
Board of Trustees, or by the vote of a majority of outstanding votes (as defined
in the Investment Company Act) and (ii) by the vote of a majority of the
Trustees of the fund who are not parties to the agreement or interested persons
of the manager, cast in person at a meeting called for the purpose of voting on
such approval.
The management agreement provides that it may be terminated at any time
without payment of any penalty by the fund's Board of Trustees, or by a vote of
a majority of the fund's shareholders, on 60 days' written notice to the
manager, and that it shall be automatically terminated if it is assigned.
The management agreement provides that the manager shall not be liable to
the fund or its shareholders for anything other than willful misfeasance, bad
faith, gross negligence or reckless disregard of its obligations and duties.
The management agreement also provides that the manager and its officers,
trustees and employees may engage in other business, devote time and attention
to any other business whether of a similar or dissimilar nature, and render
services to others.
Certain investments may be appropriate for the fund and also for other
clients advised by the manager. Investment decisions for the fund and other
clients are made with a view to achieving their respective investment objectives
after consideration of such factors as their current holdings, availability of
cash for investment, and the size of their investment generally. A particular
security may be bought or sold for only one client or series, or in different
amounts and at different times for more than one but less than all clients or
series. In addition, purchases or sales of the same security may be made for two
or more clients or series on the same date. Such transactions will be allocated
among clients in a manner believed by the manager to be equitable to each. In
some cases this procedure could have an adverse effect on the price or amount of
the securities purchased or sold by the fund.
The manager may aggregate purchase and sale orders of the fund with purchase
and sale orders of its other clients when the manager believes that such
aggregation provides the best execution for the fund. The fund's Board of
Trustees has approved the policy of the manager with respect to the aggregation
of portfolio transactions. Where portfolio transactions have been aggregated,
the fund participates at the average share price for all transactions in that
security on a given day and share transaction costs on a pro
STATEMENT OF ADDITIONAL INFORMATION 15
rata basis. The manager will not aggregate portfolio transactions of the fund
unless it believes such aggregation is consistent with its duty to seek best
execution on behalf of the fund and the terms of the management agreement. The
manager receives no additional compensation or remuneration as a result of such
aggregation.
In addition to managing the fund, the manager also acts as an investment
advisor to 12 institutional accounts and to the following registered investment
companies: American Century Mutual Funds, Inc., American Century World Mutual
Funds, Inc., American Century Premium Reserves, Inc., American Century Variable
Portfolios, Inc. and American Century Capital Portfolios, Inc., American Century
Strategic Asset Allocations, Inc., American Century Municipal Trust, American
Century Government Income Trust, American Century Target Maturities Trust,
American Century California Tax-Free and Municipal Funds, American Century
Quantitative Equity Funds and American Century International Bond Funds.
Prior to August 1, 1997, Benham Management Corporation, a wholly-owned
subsidiary of ACC, served as the investment advisor to the fund. In late 1997,
Benham Management Corporation was merged into the manager.
The investment advisory fees paid by the fund to the manager (and its
affiliate Benham Management Corporation) for the fiscal years ended February 28,
1998, February 28, 1997, and February 29, 1996, are indicated on the following
table.
INVESTMENT ADVISORY FEES
Fiscal Investment
Year Ended Advisory Fees Paid Reimbursed
- --------------------------------------------------------------------------------
1998(1) $1,551,500(2) $785,248
1997 $2,265,360(3) $1,584,981
1996 $2,316,045(3) $1,839,833
- --------------------------------------------------------------------------------
(1) From March 1, 1997 through July 31, 1997.
(2) Gross of reimbursements.
(3) Net of reimbursements.
UNIFIED MANAGEMENT FEES*
Fiscal Unified Management Amount
Year Ended Fees Paid Waived
- --------------------------------------------------------------------------------
1998(1) $4,730,735(2) $805,481
- --------------------------------------------------------------------------------
(1) From August 1, 1997 through February 28, 1998.
(2) Gross of reimbursements.
TRANSFER AND ADMINISTRATIVE SERVICES
American Century Services Corporation, 4500 Main Street, Kansas City,
Missouri 64111, acts as transfer agent and dividend paying agent for the fund.
It provides physical facilities, including computer hardware and software and
personnel, for the day-to-day administration of the fund and of the manager. The
manager pays American Century Services Corporation for such services.
Prior to August 1, 1997, the fund paid American Century Services Corporation
directly for its services as transfer agent and administrative services agent.
Transfer agent and administrative agent fees paid by the fund for the fiscal
years ended February 28, 1998, February 28, 1997, and February 29, 1996, are
indicated in the following table.
Fiscal Transfer Administrative
Year Ended Agent Fees Agent Fees
- --------------------------------------------------------------------------------
1998 $765,989 $476,721
1997 $1,844,608 $1,188,257
1996 $1,975,550 $1,319,915
- --------------------------------------------------------------------------------
Due to the expense limitation agreements made under its prior investment
advisory agreement with Benham Management Corporation, 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 Funds Distributor, Inc. 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.
16 AMERICAN CENTURY INVESTMENTS
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 March 31, 1998, 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.
OTHER INFORMATION
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, 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.
STATEMENT OF ADDITIONAL INFORMATION 17
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.
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
18 AMERICAN CENTURY INVESTMENTS
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."
FINANCIAL STATEMENTS
The financial statements of the funds, including the Statements of Assets
and Liabilities and the Statements of Operations for the fiscal year ended
February 28, 1998, and the Statements of Changes in Net Assets for the fiscal
years ended February 28, 1997, and 1998, are included in the Annual Report to
shareholders for the fiscal year ended February 28, 1998. The report on the
financial highlights for the fiscal years 1994, 1995, 1996 and 1997 are included
in the Annual Report to shareholders for the fiscal year ended February 28,
1997. Each such Annual Report is incorporated herein by reference. You may
receive copies of the reports without charge upon request to American Century at
the address and phone number shown on the cover of this Statement of Additional
Information.
STATEMENT OF ADDITIONAL INFORMATION 19
P.O. BOX 419200
KANSAS CITY, MISSOURI
64141-6200
INVESTOR SERVICES:
1-800-345-2021 or 816-531-5575
AUTOMATED INFORMATION LINE:
1-800-345-8765
TELECOMMUNICATIONS DEVICE FOR THE DEAF:
1-800-634-4113 or 816-444-3485
FAX: 816-340-7962
www.americancentury.com
[american century logo(reg. sm)]
American
Century(reg.tm)
9806 [recycled logo]
SH-BKT-12446 Recycled
<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.
(i) Financial Statements filed in Part A of Registration Statement:
1. Financial Highlights
2. Financial Highlights for the fiscal years ended February 28,
1997, February 29, 1996, February 28, 1995 and February 28, 1994
are covered by the Independent Accountants Report dated February
24, 1997 which is incorporated by reference to the Registrant's
Annual Report dated February 28, 1997.
(ii) Financial Statements filed in Part B of the Registration Statement
(each of the following financial statements is contained in the
Registrant's Annual Reports dated February 28, 1998, which are
incorporated by reference in Part B of this Registration Statement):
1. Statement of Assets and Liabilities at February 28, 1998.
2. Statement of Operations for the year ended February 28, 1998.
3. Statement of Changes in Net Assets for the years ended February
28, 1998 and 1997.
4. Notes to Financial Statements as of February 28, 1998.
5. Schedule of Investments as of February 28, 1998.
6. Independent Accountants' Report dated April 7, 1998.
(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.
(c) Amendment to Declaration of Trust dated May 1, 1998 is
included herein.
(2) Amended and Restated Bylaws dated March 9, 1998 are included
herein.
(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) (a) Investor Class Investment Management Agreement between
American Century Investment Trust and American Century Investment
Management, Inc., dated August 1, 1997 is incorporated by
reference to Exhibit 5 of Post-Effective Amendment #33 to the
Registration Statement of American Century Government Income
Trust, filed July 31, 1997 (Accession #773674-97-000014).
(b) Advisor Class Investment Management Agreement between
American Century Investment Trust and American Century Investment
Management, Inc., dated August 1, 1997 and amended as of June 1,
1998 is included herein.
(6) Distribution Agreement between American Century Investment Trust
and Funds Distributor, Inc. dated January 15, 1998 in
incorporated herein by reference to Exhibit 6 of Post-Effective
Amendment No. 28 on Form N1-A of American Century Target
Maturities Trust (File No. 2-94608).
(7) Not applicable.
(8) Custodian Agreement between American Century 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) Transfer Agency Agreement between American Century Investment
Trust and American Century Services Corporation, dated August 1,
1997, is incorporated herein by reference to Exhibit 9 of
Post-Effective Amendment #33 to the Registration Statement for
American Century Government Income Trust, filed on July 31, 1997
(Accession #773674-97-000014).
(10) Opinion and Consent of Counsel as to the legality of the
securities being registered dated April 23, 1998, is incorporated
herein by reference to Rule 24f-2 Notice filed on April 23, 1998
(Accession #908406-98-000003).
(11) (a) Consent of Coopers & Lybrand L.L.P. (filed herewith as
EX-99.B11a).
(b) Consent of KPMG Peat Marwick LLP, independent auditors (filed
herewith as EX-99.B11b).
(12) (a) Annual Report of the Registrant dated February 28, 1998
(filed electronically on April 24, 1998, File No. 33-65170).
(b) Annual Report of the Registrant dated February 28, 1997
(filed electronically on April 23, 1997, File No. 33-65170).
(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 January 15, 1998 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, 1998, American Century - Benham Prime Money Market Fund (the
sole operating series of American Century Investment Trust) had 54,875
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).
The Registrant has purchased an insurance policy insuring its officers and
directors against certain liabilities which such officers and directors may
incur while acting in such capacities and providing reimbursement to the
Registrant for sums which it may be permitted or required to pay to its officers
and directors by way of indemnification against such liabilities, subject in
either case to clauses respecting deductibility and participation.
Item 28. Business and Other Connections of Investment Advisor.
American Century Investment Management, Inc., the investment manager to each of
the Registrant's Funds, is engaged in the business of managing investments for
deferred compensation plans and other institutional investors.
Item 29. Principal Underwriters.
(a) Funds Distributor, Inc. (the "Distributor") acts as principal underwriter
for the following investment companies.
American Century California Tax-Free and Municipal Funds
American Century Capital Portfolios, Inc.
American Century Government Income Trust
American Century International Bond Funds
American Century Investment Trust
American Century Municipal Trust
American Century Mutual Funds, Inc.
American Century Premium Reserves, Inc.
American Century Quantitative Equity Funds
American Century Strategic Asset Allocations, Inc.
American Century Target Maturities Trust
American Century Variable Portfolios, Inc.
American Century World Mutual Funds, Inc.
BJB Investment Funds
The Brinson Funds
Dresdner RCM Capital Funds, Inc.
Dresdner RCM Equity Funds, Inc.
Harris Insight Funds Trust
HT Insight Funds, Inc. d/b/a Harris Insight Funds
J.P. Morgan Institutional Funds
J.P. Morgan Funds
The JPM Series Trust
The JPM Series Trust II
LaSalle Partners Funds, Inc.
Monetta Fund, Inc.
Monetta Trust
The Montgomery Funds
The Montgomery Funds II
The Munder Framlington Funds Trust
The Munder Funds Trust
The Munder Funds, Inc.
Orbitex Group of Funds
St. Clair Funds, Inc.
The Skyline Funds
Waterhouse Investors Family of Funds, Inc.
WEBS Index Fund, Inc.
The Distributor is registered with the Securities and Exchange Commission
as a broker-dealer and is a member of the National Association of
Securities Dealers. The Distributor is located at 60 State Street, Suite
1300, Boston, Massachusetts 02109. The Distributor is an indirect
wholly-owned subsidiary of Boston Institutional Group, Inc., a holding
company all of whose outstanding shares are owned by key employees.
(b) The following is a list of the executive officers, directors and partners of
the Distributor:
<TABLE>
Name and Principal Business Positions and Offices with Positions and Offices with
Address* Underwriter Registrant
<S> <C> <C>
Marie E. Connolly Director, President and Chief none
Executive Officer
Richard W. Ingram Executive Vice President President, Principal Executive
and Principal Financial Officer
Donald R. Roberson Executive Vice President none
William S. Nichols Executive Vice President none
Michael S. Petrucelli Senior Vice President none
Joseph F. Tower, III Director, Senior Vice President, none
Treasurer and Chief Financial
Officer
Paula R. David Senior Vice President none
Allen B. Closser Senior Vice President none
Bernard A. Whalen Senior Vice President none
William J. Nutt Director none
- --------------------
* All addresses are 60 State Street, Suite 1300, Boston, Massachusetts 02109
</TABLE>
(c) Not applicable.
Item 30. Location of Accounts and Records.
American Century Investment Management, Inc., 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.
Item 31. Management Services.
Not applicable.
Item 32. Undertakings.
a. Not Applicable.
b. Not Applicable.
c. Registrant hereby undertakes to furnish each person to whom a prospectus is
delivered a copy of Registrant's latest annual report to shareholders, upon
request and without charge.
d. Registrant hereby undertakes that it will, if requested to do so by the
holders of at least 10% of the Registrant's outstanding shares, call a
meeting of shareholders for the purpose of voting upon the question of the
removal of a director and to assist in communication with other
shareholders as required by Section 16(c).
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant has duly caused this Post-Effective
Amendment No. 6/Amendment No. 7 to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Mountain View, and State of
California, on the 29th day of May, 1998. I hereby certify that this Amendment
meets the requirements for immediate effectiveness pursuant to Rule 485(b).
AMERICAN CENTURY INVESTMENT TRUST
By: /s/ Patrick A. Looby
Patrick A. Looby
Vice President
Pursuant to the requirements of the Securities Act of 1933, this Post-Effective
Amendment No. 6/Amendment No. 7 has been signed below by the following persons
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Date
<S> <C> <C>
*Richard W. Ingram President, Principal May 12, 1998
- --------------------------------- Executive and Principal
Richard W. Ingram Financial Officer
*Maryanne Roepke Vice President, Treasurer May 12, 1998
- --------------------------------- and Principal Accounting
Maryanne Roepke Officer
*Albert A. Eisenstat Director May 12, 1998
- ---------------------------------
Albert A. Eisenstat
*Ronald J. Gilson Director May 12, 1998
- ---------------------------------
Ronald J. Gilson
*William M. Lyons Director May 12, 1998
- ---------------------------------
William M. Lyons
*Myron S. Scholes Director May 12, 1998
- ---------------------------------
Myron S. Scholes
*Kenneth E. Scott Director May 12, 1998
- ---------------------------------
Kenneth E. Scott
*Isaac Stein Director May 12, 1998
- ---------------------------------
Isaac Stein
*James E. Stowers III Director May 12, 1998
- ---------------------------------
James E. Stowers III
*Jeanne D. Wohlers Director May 12, 1998
- ---------------------------------
Jeanne D. Wohlers
</TABLE>
*By /s/ Patrick A. Looby
Patrick A. Looby
Attorney-in-Fact
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
incorporated herein by reference to Exhibit 1 of Post-Effective
Amendment No. 5 filed on June 27, 1997.
EX-99.B1c Amendment to the Declaration of Trust dated May 1, 1998 is included
herein.
EX-99.B2 Amended and Restated Bylaws, dated March 9, 1998, are included
herein.
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.B5a Investment Advisory Agreement between American Century Investment
Trust and American Century Investment Management, Inc., dated August
1, 1997, is incorporated herein by reference to Exhibit 5 of
Post-Effective Amendment No. 33 to the Registration Statement of
American Century Government Income Trust, filed on July 31, 1997
(Accession # 0000773674-97-000014).
EX-99.B5b Advisor Class Investment Management Agreement between American
Century Investment Trust and American Century Investment Management,
Inc., dated August 1, 1997 and amended as of June 1, 1998 is
included herein.
EX-99.B6 Distribution Agreement between American Century Investment Trust and
Funds Distributor, Inc. dated January 15, 1998 is incorporated
herein by reference to Exhibit 6 of Post-Effective Amendment No. 28
on Form N1-A of American Century Target Maturities Trust (File No.
2-94608).
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 August 1, 1997, is incorporated herein by
reference to Exhibit 9 of Post-Effective Amendment No. 33 to the
Registration Statement of the American Century Government Income
Trust filed on July 31, 1997 (Accession # 773674-97-000014).
EX-99.B10 Opinion and consent of counsel as to the legality of the securities
being registered, dated April 23, 1998 is incorporated herein by
reference to Rule 24f-2 Notice filed on April 23, 1998 (Accession #
908406-98-000003).
EX-99.B11a Consent of Coopers & Lybrand L.L.P., independent accountants, is
included herein.
EX-99.B11b Consent of KPMG Peat Marwick LLP, independent auditors, is included
herein.
EX-99.B12a Annual Report of the Registrant dated February 28, 1998 (filed April
24, 1998, File No. 33-65170).
EX-99.B12b Annual Report of the Registrant dated February 28, 1997 (filed April
23, 1997).
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 January 15, 1998 is included herein.
EX-27.4 FDS - Benham Prime Money Market Fund.
AMENDMENT NO. 2
TO THE
DECLARATION OF TRUST
OF
AMERICAN CENTURY INVESTMENT TRUST
Effective May 1, 1998
WHEREAS, Section 5(a) of Article III of the Declaration of Trust
provides that the Trustees may establish and designate a new Series of Shares or
class of a 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 establish a new class of Series of Shares to be
designated as "American Century - Benham Prime Money Market Fund--Advisor
Class";
RESOLVED, that Article III, Section 8 of the Declaration of Trust for
the American Century Government Income Trust is hereby amended as follows:
Section 8. Trustees' Establishment and Designation of Series.
--------------------------------------------------------------
The Board of Trustees hereby establishes and designates American
Century--Benham Prime Money Market Fund as Series of the Trust with the
relative rights and preferences as described in Section 6 of Article
III. The fund shall further be divided into two classes: Investor Class
and Advisor Class, and have such rights and preferences as indicated
for such classes in the Multiple Class Plan.
RESOLVED FURTHER, that the assets and liabilities of the Trust shall be
allocated among the series of the Trust as set forth in Article III, Section 6
of the Declaration of Trust.
<TABLE>
Trustees of the Benham Government Income Trust
<S> <C> <C> <C>
/s/ Albert A. Eisenstat 5/1/98 /s/ Kenneth E. Scott 5/1/98
- ---------------------------------------- ------------- ---------------------------------------- ------
Albert A. Eisenstat* Date Kenneth E. Scott* Date
/s/ Ronald J. Gilson 5/1/98 /s/ Isaac Stein 5/1/98
- ---------------------------------------- ------------- ---------------------------------------- ------
Ronald J. Gilson* Date Isaac Stein* Date
/s/ William M. Lyons 5/1/98 /s/ James E. Stowers III 5/1/98
- ---------------------------------------- ------------- ---------------------------------------- ------
William M. Lyons* James E. Stowers III* Date
/s/ Myron S. Scholes 5/1/98 /s/ Jeanne D. Wohlers 5/1/98
- ---------------------------------------- ------------- ---------------------------------------- ------
Myron S. Scholes* Date Jeanne D. Wohlers* Date
*By: /s/Douglas A. Paul Date: May 1, 1998
-------------------------------------------------------------------------
Douglas A. Paul, Esq.
Pursuant to Power of Attorney dated January 15, 1998
</TABLE>
AMERICAN CENTURY CALIFORNIA TAX-FREE AND MUNICIPAL FUNDS
AMERICAN CENTURY GOVERNMENT INCOME TRUST
AMERICAN CENTURY INTERNATIONAL BOND FUNDS
AMERICAN CENTURY INVESTMENT TRUST
AMERICAN CENTURY MUNICIPAL TRUST
AMERICAN CENTURY TARGET MATURITIES TRUST
Bylaws
as amended March 9, 1998
Table of Contents
ARTICLE I Offices..............................................................1
Section 1. Principal Office..............................................1
Section 2. Other Offices.................................................1
ARTICLE II Meetings of Shareholders............................................1
Section 1. Place of Meetings.............................................1
Section 2. Call of Meeting...............................................1
Section 3. Notice of Shareholders' Meeting...............................1
Section 4. Manner of Giving Notice; Affidavit of Notice..................2
Section 5. Adjourned Meeting; Notice.....................................2
Section 6. Voting........................................................3
Section 7. Waiver of Notice By Consent of Absent Shareholders............3
Section 8. Shareholder Action By Written Consent Without A Meeting.......3
Section 9. Record Date for Shareholder Notice, Voting and Giving
Consents......................................................4
Section 10. Proxies.......................................................4
Section 11. Inspectors of Election........................................5
ARTICLE III Trustees...........................................................5
Section 1. Powers........................................................5
Section 2. Number And Qualification Of Trustees..........................5
Section 3. Vacancies.....................................................6
Section 4. Place of Meetings and Meetings by Telephone...................6
Section 5. Regular Meetings..............................................6
Section 6. Special Meetings..............................................6
Section 7. Quorum........................................................7
Section 8. Waiver of Notice..............................................7
Section 9. Adjournment...................................................7
Section 10. Notice of Adjournment.........................................7
Section 11. Action Without A Meeting......................................7
Section 12. Fees and Compensation of Trustees.............................8
ARTICLE IV Committees..........................................................8
Section 1. Committees of Trustees........................................8
Section 2. Meetings and Action of Committees.............................8
ARTICLE V Officers.............................................................9
Section 1. Officers......................................................9
Section 2. Election of Officers..........................................9
Section 3. Subordinate Officers..........................................9
Section 4. Removal and Resignation of Officers...........................9
Section 5. Vacancies In Offices..........................................9
Section 6. Chairman of the Board........................................10
Section 7. President....................................................10
Section 8. Vice Presidents..............................................10
Section 9. Secretary....................................................10
Section 10. Chief Financial Officer......................................11
ARTICLE VI Indemnification of Trustees, Officers, Employees and
Other Agents.................................................11
Section 1. Agents, Proceedings and Expenses.............................11
Section 2. Actions Other Than By Trust..................................11
Section 3. Actions By The Trust.........................................12
Section 4. Exclusion of Indemnification.................................12
Section 5. Successful Defense By Agent..................................12
Section 6. Required Approval............................................12
Section 7. Advance of Expenses..........................................13
Section 8. Other Contractual Rights.....................................13
Section 9. Limitations..................................................13
Section 10. Insurance....................................................13
Section 11. Fiduciaries of Employee Benefit Plan.........................14
ARTICLE VII Records and Reports...............................................14
Section 1. Maintenance and Inspection of Share Register.................14
Section 2. Maintenance and Inspection of Bylaws.........................14
Section 3. Maintenance and Inspection of Other Records..................14
Section 4. Inspection by Trustees.......................................14
Section 5. Financial Statements.........................................15
ARTICLE VIII General Matters..................................................15
Section 1. Checks, Drafts, Evidence of Indebtedness.....................15
Section 2. Contracts and Instruments; How Executed......................15
Section 3. Certificates for Shares......................................15
Section 4. Lost Certificates............................................16
Section 5. Representation of Shares of Other Entities...................16
ARTICLE IX Amendments.........................................................16
Section 1. Amendment by Shareholders....................................16
Section 2. Amendment By Trustees........................................16
<PAGE>
AMERICAN CENTURY CALIFORNIA TAX-FREE AND MUNICIPAL FUNDS
AMERICAN CENTURY GOVERNMENT INCOME TRUST
AMERICAN CENTURY INTERNATIONAL BOND FUNDS
AMERICAN CENTURY INVESTMENT TRUST
AMERICAN CENTURY MUNICIPAL TRUST
AMERICAN CENTURY TARGET MATURITIES TRUST
Bylaws
as amended March 9, 1998
ARTICLE I
Offices
Section 1. Principal Office
The Board of Trustees shall fix the location of the principal executive office
of the Trust at any place within or outside The Commonwealth of Massachusetts.
Section 2. Other Offices
The Board of Trustees may at any time establish branch or subordinate offices at
any place or places where the trust intends to do business.
ARTICLE II
Meetings of Shareholders
Section 1. Place of Meetings
Meetings of shareholders shall be held at any place within or outside The
Commonwealth of Massachusetts designated by the Board of Trustees. In the
absence of any such designation, shareholders' meetings shall be held at the
principal executive office of the Trust.
Section 2. Call of Meeting
A meeting of the shareholders may be called at any time by the Board of Trustees
or by the chairman of the Board or by the president.
Section 3. Notice of Shareholders' Meeting
All notices of meetings of shareholders shall be sent or otherwise given in
accordance with Section 4 of this Article II not less than ten (10) nor more
than seventy-five (75) days before the date of the meeting. The notice shall
specify (i) the place, date and hour of the meeting, and (ii) the general nature
of the business to be transacted. The notice of any meeting at which trustees
are to be elected also shall include the name of any nominee or nominees whom at
the time of the notice are intended to be presented for election.
If action is proposed to be taken at any meeting for approval of (i) a contract
or transaction in which a trustee has a direct or indirect financial interest,
(ii) an amendment of the Declaration of Trust, (iii) a reorganization of the
Trust, or (iv) a voluntary dissolution of the Trust, the notice shall also state
the general nature of that proposal.
Section 4. Manner of Giving Notice; Affidavit of Notice
Notice of any meeting of shareholders shall be given either personally or by
first-class mail or telegraphic or other written communication, charges prepaid,
addressed to the shareholder at the address of that shareholder appearing on the
books of the Trust or its transfer agent or given by the shareholder to the
Trust for the purpose of notice. If no such address appears on the Trust's books
or is given, notice shall be deemed to have been given if sent to that
shareholder by first-class mail or telegraphic or other written communication to
the Trust's principal executive office, or if published at least once in a
newspaper of general circulation in the county where that office is located.
Notice shall be deemed to have been given at the time when delivered personally
or deposited in the mail or sent by telegram or other means of written
communication.
If any notice addressed to a shareholder at the address of that shareholder
appearing on the books of the Trust is returned to the Trust by the United
States Postal Service marked to indicate that the Postal Service is unable to
deliver the notice to the shareholder at the address, all future notices or
reports shall be deemed to have been duly given without further mailing if these
shall be available to the shareholder on written demand of the shareholder at
the principal executive office of the Trust for a period of one year from the
date of the giving of the notice.
An affidavit of the mailing or other means of giving any notice of any
shareholder's meeting shall be executed by the secretary, assistant secretary or
any transfer agent of the Trust giving the notice and shall be filed and
maintained in the minute book of the Trust.
Section 5. Adjourned Meeting; Notice
Any shareholder's meeting, whether or not a quorum is present, may be adjourned
from time to time by the vote of the majority of the shares represented at that
meeting, either in person or by proxy.
When any meeting of shareholders is adjourned to another time or place, notice
need not be given of the adjourned meeting at which the adjournment is taken,
unless a new record date of the adjourned meeting is fixed or unless the
adjournment is for more than sixty (60) days from the date set for the original
meeting, in which case the Board of Trustees shall set a new record date. Where
required, notice of any such adjourned meeting shall be given to each
shareholder of record entitled to vote at the adjourned meeting in accordance
with the provisions of Section 3 and 4 of this Article II. At any adjourned
meeting, the Trust may transact any business which might have been transacted at
the original meeting.
Section 6. Voting
The shareholders entitled to vote at any meeting of shareholders shall be
determined in accordance with the provisions of the Declaration of Trust, as in
effect at such time. The shareholders' vote may be by voice vote or by ballot,
provided, however, that any election for trustees must be by ballot if demanded
by any shareholder before the voting has begun. On any matter other than
elections of trustees, any shareholder may vote part of the shares in favor of
the proposal and refrain from voting the remaining shares or vote them against
the proposal, but if the shareholder fails to specify the number of shares which
the shareholder is voting affirmatively, it will be conclusively presumed that
the shareholder's approving vote is with respect to the total shares that the
shareholder is entitled to vote on such proposal.
Section 7. Waiver of Notice By Consent of Absent Shareholders
The transactions of the meeting of shareholders, however called and noticed and
wherever held, shall be as valid as though had at a meeting duly held after
regular call and notice if a quorum be present either in person or by proxy and
if either before or after the meeting, each person entitled to vote who was not
present in person or by proxy signs a written waiver of notice or a consent to a
holding of the meeting or an approval of the minutes. The waiver of notice or
consent need not specify either the business to be transacted or the purpose of
any meeting of shareholders.
Attendance by a person at a meeting shall also constitute a waiver of notice of
that meeting, except when the person objects at the beginning of the meeting to
the transaction of any business because the meeting is not lawfully called or
convened and except that attendance at a meeting is not a waiver of any right to
object to the consideration of matters not included in the notice of the meeting
if that objection is expressly made at the beginning of the meeting.
Section 8. Shareholder Action By Written Consent Without A Meeting
Any action which may be taken at any meeting of shareholders may be taken
without a meeting and without prior notice if a consent in writing setting forth
the action so taken is signed by the holders of outstanding shares having not
less than the minimum number of votes that would be necessary to authorize or
take that action at a meeting at which all shares entitled to vote on that
action were present and voted. All such consents shall be filed with the
Secretary of the Trust and shall be maintained in the Trust's records. Any
shareholder giving a written consent or the shareholder's proxy holders or a
transferee of the shares or a personal representative of the shareholder or
their respective proxy holders may revoke the consent by a writing received by
the Secretary of the Trust before written consents of the number of shares
required to authorize the proposed action have been filed with the Secretary.
If the consents of all shareholders entitled to vote have not been solicited in
writing and if the unanimous written consent of all such shareholders shall not
have been received, the Secretary shall give prompt notice of the action
approved by the shareholders without a meeting. This notice shall be given in
the manner specified in Section 4 of this Article II. In the case of approval of
(i) contracts or transactions in which a trustee has a direct or indirect
financial interest, (ii) indemnification of agents of the Trust, and (iii) a
reorganization of the Trust, the notice shall be given at least ten (10) days
before the consummation of any action authorized by that approval.
Section 9. Record Date for Shareholder Notice, Voting and Giving Consents
For purposes of determining the shareholders entitled to notice of any meeting
or to vote or entitled to give consent to action without a meeting, the Board of
Trustees may fix in advance a record date which shall not be more than
seventy-five (75) days nor less than ten (10) days before the date of any such
meeting as provided in the Declaration of Trust.
If the Board of Trustees does not so fix a record date:
(a) The record date for determining shareholders entitled to notice of or
to vote at a meeting of shareholders shall be at the close of business
on the business day next preceding the day on which notice is given or
if notice is waived, at the close of business on the business day next
preceding the day on which the meeting is held.
(b) The record date for determining shareholders entitled to give consent
to action in writing without a meeting, (i) when no prior action by the
Board of Trustees has been taken, shall be the day on which the first
written consent is given, or (ii) when prior action of the Board of
Trustees has been taken, shall be at the close of business on the day
on which the Board of Trustees adopt the resolution relating to that
action or the seventy-fifth day before the date of such other action,
whichever is later.
Section 10. Proxies
Every person entitled to vote for trustees or on any other matter shall have the
right to do so either in person or by one or more agents authorized by a written
proxy signed by the person and filed with the Secretary of the Trust. A proxy
shall be deemed signed if the shareholder's name is placed on the proxy (whether
by manual signature, typewriting, telegraphic transmission or otherwise) by the
shareholder or the shareholder's attorney-in-fact. A validly executed proxy
which does not state that it is irrevocable shall continue in full force and
effect unless (i) revoked by the person executing it before the vote pursuant to
that proxy by a writing delivered to the Trust stating that the proxy is revoked
or by a subsequent proxy executed by or attendance at the meeting and voting in
person by the person executing that proxy; or (ii) written notice of the death
or incapacity of the maker of that proxy is received by the Trust before the
vote pursuant to that proxy is counted; provided however, that no proxy shall be
valid after the expiration of eleven (11) months from the date of the proxy
unless otherwise provided in the proxy. The revocability of a proxy that states
on its face that it is irrevocable shall be governed by the provisions of the
California General Corporation Law.
Section 11. Inspectors of Election
Before any meeting of shareholders, the Board of Trustees may appoint any
persons other than nominees for office to act as inspectors of election at the
meeting or its adjournment. If no inspectors of election are so appointed, the
chairman of the meeting may and on the request of any shareholder or a
shareholder's proxy shall, appoint inspectors of election at the meeting. The
number of inspectors shall be either one (1) or three (3). If inspectors are
appointed at a meeting on the request of one or more shareholders or proxies,
the holders of a majority of shares or their proxies present at the meeting
shall determine whether one (1) or three (3) inspectors are to be appointed. If
any person appointed as inspector fails to appear or fails or refuses to act,
the chairman of the meeting may and on the request of any shareholder or a
shareholder's proxy, shall appoint a person to fill the vacancy.
These inspectors shall:
(a) Determine the number of shares outstanding and the voting power of
each, the shares represented at the meeting, the existence of a quorum
and the authenticity, validity and effect of proxies;
(b) Receive votes, ballots or consents;
(c) Hear and determine all challenges and questions in any way arising in
connection with the right to vote;
(d) Count and tabulate all votes or consents;
(e) Determine when the polls shall close;
(f) Determine the result; and
(g) Do any other acts that may be proper to conduct the election or vote
with fairness to all shareholders.
ARTICLE III
Trustees
Section 1. Powers
Subject to the applicable provisions of the Declaration of Trust and these
Bylaws relating to action required to be approved by the shareholders or by the
outstanding shares, the business and affairs of the Trust shall be managed and
all powers shall be exercised by or under the direction of the Board of
Trustees.
Section 2. Number And Qualification Of Trustees
The authorized number of trustees shall be not less than 7 nor more than 11
until changed by a duly adopted amendment to the Declaration of Trust and these
Bylaws. The selection and nomination of disinterested directors is committed
solely to the discretion of a Nominating Committee consisting of all sitting
disinterested directors except where the remaining director or directors are
interested persons.
Section 3. Vacancies
Vacancies in the Board of Trustees may be filled by a majority of the remaining
trustees, though less than a quorum, or by a sole remaining trustee, unless the
Board of Trustees calls a meeting of shareholders for the purposes of electing
trustees. In the event that at any time less than a majority of the trustees
holding office at that time were so elected by the holders of the outstanding
voting securities of the Trust, the Board of Trustees shall forthwith cause to
be held as promptly as possible, and in any event within sixty (60) days, a
meeting of such holders for the purpose of electing trustees to fill any
existing vacancies in the Board of Trustees, unless such period is extended by
order of the United States Securities and Exchange Commission.
Section 4. Place of Meetings and Meetings by Telephone
All meetings of the Board of Trustees may be held at any place within or outside
The Commonwealth of Massachusetts that has been designated from time to time by
resolution of the Board. In the absence of such a designation, regular meetings
shall be held at the principal executive office of the Trust. Any meeting,
regular or special, may be held by conference telephone or similar communication
equipment, so long as all trustees participating in the meeting can hear one
another and all such trustees shall be deemed to be present in person at the
meeting; provided that, in accordance with the provisions of the Investment
Company Act of 1940, the Board may not transact by such a meeting any business
which involves the entering into, or the approval, performance, or renewal of
any contract or agreement, whereby a person undertakes regularly to serve or act
as the Fund's Investment Advisor or principal underwriter.
Section 5. Regular Meetings
Regular meetings of the Board of Trustees shall be held without call at such
time as shall from time to time be fixed by the Board of Trustees. Such regular
meetings may be held without notice.
Section 6. Special Meetings
Special meetings of the Board of Trustees for any purpose or purposes may be
called at any time by the chairman of the board or the president or any vice
president or the secretary or any two (2) trustees.
Notice of the time and place of special meetings shall be delivered personally
or by telephone to each trustee or sent by first-class mail or telegram, charges
prepaid, addressed to each trustee at that trustee's address as it is shown on
the records of the Trust. In case the notice is mailed, it shall be deposited in
the United States mail at least four (4) days before the time of the holding of
the meeting. In case the notice is delivered personally or by telephone or to
the telegraph company, it shall be given at least forty-eight (48) hours before
the time of the holding of the meeting. Any oral notice given personally or by
telephone may be communicated either to the trustee or to a person at the office
of the trustee who the person giving the notice has reason to believe will
promptly communicate it to the trustee. The notice need not specify the purpose
of the meeting or the place if the meeting is to be held at the principal
executive office of the Trust.
Section 7. Quorum
A majority of the authorized number of trustees shall constitute a quorum for
the transaction of business, except to adjourn as provided in Section 10 of this
Article III. Every act or decision done or made by a majority of the trustees
present at a meeting duly held at which a quorum is present shall be regarded as
the act of the Board of Trustees, subject to the provisions of the Declaration
of Trust. A meeting at which a quorum is initially present may continue to
transact business notwithstanding the withdrawal of trustees if any action taken
is approved by at least a majority of the required quorum for that meeting.
Section 8. Waiver of Notice
Notice of any meeting need not be given to any trustee who either before or
after the meeting signs a written waiver of notice, a consent to holding the
meeting or an approval of the minutes. The waiver of notice of consent need not
specify the purpose of the meeting. All such waivers, consents and approvals
shall be filed with the records of the Trust or made a part of the minutes of
the meeting. Notice of a meeting shall also be deemed given to any trustee who
attends the meeting without protesting before or at its commencement the lack of
notice to that trustee.
Section 9. Adjournment
A majority of the trustees present, whether or not constituting a quorum, may
adjourn any meeting to another time and place.
Section 10. Notice of Adjournment
Notice of the time and place of holding an adjourned meeting need not be given
unless the meeting is adjourned for more than forty-eight (48) hours, in which
case notice of the time and place shall be given before the time of the
adjourned meeting in the manner specified in Section 6 of this Article III to
the trustees who were present at the time of the adjournment.
Section 11. Action Without A Meeting
Any action required or permitted to be taken by the Board of Trustees may be
taken without a meeting if a majority of the members of the Board of Trustees
shall individually or collectively consent in writing to that action; provided
that, in accordance with the Investment Company Act of 1940, such written
consent does not approve the entering into, or the renewal or performance of any
contract or agreement, whereby a person undertakes regularly to serve or act as
the Fund's Investment Advisor or principal underwriter. Any other action by
written consent shall have the same force and effect as a majority vote of the
Board of Trustees. Written consents shall be filed with the minutes of the
proceedings of the Board of Trustees.
Section 12. Fees and Compensation of Trustees
Trustees and members of committees may receive such compensation, if any, for
their services and such reimbursement of expenses as may be fixed or determined
by resolution of the Board of Trustees. This Section 12 shall not be construed
to preclude any trustee from serving the Trust in any other capacity as an
officer, agent, employee or otherwise and receiving compensation for those
services.
ARTICLE IV
Committees
Section 1. Committees of Trustees
The Board of Trustees may by resolution adopted by a majority of the authorized
number of trustees designate one or more committees, each consisting of two (2)
or more trustees, to serve at the pleasure of the Board. The Board may designate
one or more trustees as alternate members of any committee who may replace any
absent member at any meeting of the committee. Any committee to the extent
provided in the resolution of the Board, shall have the authority of the Board,
except with respect to:
(a) the approval of any action which under applicable law also requires
shareholders' approval or approval of the outstanding shares, or
requires approval by a majority of the entire Board or certain members
of said Board;
(b) the filling of vacancies on the Board of Trustees or in any committee;
(c) the fixing of compensation of the trustees for serving on the Board of
Trustees or on any committee;
(d) the amendment or repeal of the Declaration of Trust or of the Bylaws or
the adoption of new Bylaws;
(e) the amendment or repeal of any resolution of the Board of Trustees
which by its express terms is not so amendable or repealable;
(f) a distribution to the shareholders of the Trust, except at a rate or in
a periodic amount or within a designated range determined by the Board
of Trustees; or
(g) the appointment of any other committees of the Board of Trustees or the
members of these committees.
Section 2. Meetings and Action of Committees
Meetings and action of committees shall be governed by and held and taken in
accordance with the provisions of Article III of these Bylaws, with such changes
in the context thereof as are necessary to substitute the committee and its
members for the Board of Trustees and its members, except that the time of
regular meetings of committees may be determined either by resolution of the
Board of Trustees or by resolution of the committee. Special meetings of
committees may also be called by resolution of the Board of Trustees, and notice
of special meetings of committees shall also be given to all alternate members
who shall have the right to attend all meetings of the committee. The Board of
Trustees may adopt rules for the government of any committee not inconsistent
with the provisions of these Bylaws.
ARTICLE V
Officers
Section 1. Officers
The officers of the Trust shall be a President, a Secretary and a Treasurer. The
Trust may also have, at the discretion of the Board of Trustees, one or more
Vice Presidents, one or more Assistant Secretaries, one or more Assistant
Treasurers, and such other officers as may be appointed in accordance with the
provisions of Section 3 of this Article V. Any number of offices may be held by
the same person.
Section 2. Election of Officers
The officers of the Trust, except such officers as may be appointed in
accordance with the provisions of Section 3 or Section 5 of this Article V,
shall be chosen by the Board of Trustees, and each shall serve at the pleasure
of the Board of Trustees, subject to the rights, if any, of an officer under any
contract of employment.
Section 3. Subordinate Officers
The Board of Trustees may appoint and may empower the president to appoint such
other officers as the business of the Trust may require, each of whom shall hold
office for such period, have such authority and perform such duties as are
provided in these Bylaws or as the Board of Trustees may from time to time
determine.
Section 4. Removal and Resignation of Officers
Subject to the rights, if any, of an officer under any contract of employment,
any officer may be removed, either with or without cause, by the Board of
Trustees at any regular or special meeting of the Board of Trustees or except in
the case of an officer upon whom such power of removal may be conferred by the
Board of Trustees.
Any officer may resign at any time by giving written notice to the Trust. Any
resignation shall take effect at the date of the receipt of that notice or at
any later time specified in that notice; and unless otherwise specified in that
notice, the acceptance of the resignation shall not be necessary to make it
effective. Any resignation is without prejudice to the rights, if any, o the
Trust under any contract to which the officer is a party.
Section 5. Vacancies In Offices
A vacancy in any office because of death, resignation, removal, disqualification
or other cause shall be filled in the manner prescribed in these Bylaws for
regular appointment to that office.
Section 6. Chairman of the Board
The Chairman of the Board shall, if present, preside at meetings of the Board of
Trustees and exercise and perform such other powers and duties as may be from
time to time assigned to him by the Board of Trustees or prescribed by the
Bylaws.
Section 7. President
Subject to such supervisory powers, if any, as may be given by the Board of
Trustees to the Chairman of the Board, the President shall be the principal
executive officer and the principal operating officer of the Trust and shall,
subject to control of the Board of Trustees, have general supervision, direction
and control of the business and the officers of the Trust. He shall preside at
all shareholder meetings and, in the absence of the Chairman of the Board or if
there be none, at all meetings of the Board of Trustees. He shall have the
general powers and duties of management usually vested in the office of
President of a corporation and shall have such other powers and duties as may be
prescribed by the Board of Trustees or these Bylaws.
Section 8. Vice Presidents
In the absence or disability of the president, the vice presidents, if any, in
order of their rank as fixed by the Board of Trustees or if not ranked, a vice
president designated by the Board of Trustees, shall perform all the duties of
the president and when so acting shall have all powers of and be subject to all
the restrictions upon the president. The vice presidents shall have such other
powers and perform such other duties as from time to time may be prescribed for
them respectively by the Board of Trustees or by these Bylaws and the president
or the chairman of the board.
Section 9. Secretary
The secretary shall keep or cause to be kept at the principal executive office
of the Trust or such other place as the Board of Trustees may direct a book of
minutes of all meetings and actions of trustees, committees of trustees and
shareholders with the time and place of holding, whether regular or special, and
if special, how authorized, the notice given, the names of those present at
trustees' meetings or committee meetings, the number of shares present or
represented at shareholders' meetings and the proceedings.
The secretary shall keep or cause to be kept at the principal executive office
of the Trust or at the office of the Trust's transfer agent or registrar, as
determined by resolution of the Board of Trustees, a share register or a
duplicate share register showing the names of all shareholders and their
addresses, the number and classes of shares held by each, the number and date of
certificates issued for the same and the number and date of cancellation of
every certificate surrendered for cancellation.
The secretary shall give or cause to be given notice of all meetings of the
shareholders and the Board of Trustees required by these Bylaws or by applicable
law to be given and shall have such other powers and perform such other duties
as may be prescribed by the Board of Trustees or by these Bylaws.
Section 10. Chief Financial Officer
The chief financial officer shall be the principal financial and accounting
officer of the Trust and shall keep and maintain or cause to be kept and
maintained adequate and correct books and records of accounts of the properties
and business transactions of the Trust, including accounts of its assets,
liabilities, receipts, disbursements, gains, losses, capital, retained earnings
and shares. The books of account shall at all reasonable times be open to
inspection by any trustee.
The chief financial officer shall deposit all monies and other valuables in the
name and to the credit of the Trust with such depositories as may be designated
by the Board of Trustees. He shall disburse the funds of the Trust as may be
ordered by the Board of Trustees, shall render to the president and trustees,
whenever they request it, an account of all of his transactions as chief
financial officer and of the financial condition of the Trust and shall have
other powers and perform such other duties as may be prescribed by the Board of
Trustees or these Bylaws.
ARTICLE VI
Indemnification of Trustees, Officers, Employees and Other Agents
Section 1. Agents, Proceedings and Expenses
For the purpose of this Article, "agent" means any person who is or was a
trustee, officer, employee or other agent of this Trust or is or was serving at
the request of this Trust as a trustee, director, officer, employee or agent of
another foreign or domestic corporation, partnership, joint venture, trust or
other enterprise or was a trustee, director, officer, employee or agent of a
foreign or domestic corporation which was a predecessor of another enterprise at
the request of such predecessor entity; "proceding" means any threatened,
pending or completed actin or proceeding, whether civil, criminal,
administrative or investigative; and "expenses" includes without limitation
attorney's fees and any expenses of establishing a right to indemnification
under this Article.
Section 2. Actions Other Than By Trust
This Trust shall indemnify any person who was or is a party or is threatened to
be made a party to any proceeding (other than an action by or in the right of
this Trust) by reason of the fact that such person is or was an agent of this
Trust, against expenses, judgments, fines, settlements and other amounts
actually and reasonably incurred in connection with such proceeding if that
person acted in good faith and in a manner that person reasonably believed to be
in the best interests of this Trust and in the case of a criminal proceeding,
had no reasonable cause to believe the conduct of that person was unlawful. The
termination of any proceeding by judgment, order, settlement, conviction or upon
a plea of nolo contendere or its equivalent shall not of itself create a
presumption that the person did not act in good faith and in a manner which the
person reasonably believed to be in the best interests of this Trust or that the
person had reasonable cause to believe that the person's conduct was unlawful.
Section 3. Actions By The Trust
This Trust shall indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action by or in the
right of this Trust to procure a judgment in its favor by reason of the fact
that that person is or was an agent of this Trust, against expenses actually and
reasonably incurred by that person in connection with the defense or settlement
of that action if that person acted in good faith, in a manner that person
believed to be in the best interests of this Trust and with such care, including
reasonable inquiry, as an ordinarily prudent person in a like position would use
under similar circumstances.
Section 4. Exclusion of Indemnification
Notwithstanding any provision to the contrary contained herein, there shall be
no right to indemnification for any liability arising by reason of willful
misfeasance, bad faith, gross negligence, or the reckless disregard of the
duties involved in the conduct of the agent's office with this Trust.
No indemnification shall be made under Sections 2 or 3 of this Article:
(a) In respect of any claim, issue or matter as to which that person shall
have been adjudged to be liable in the performance of that person's
duty to this Trust, unless and only to the extent that the court in
which that action was brought shall determine upon application that in
view of all the circumstances of the case, that person was not liable
by reason of the disabling conduct set forth in the preceding paragraph
and is fairly and reasonably entitled to indemnity for the expenses
which the court shall determine; or
(b) Of amounts paid in settling or otherwise disposing of a threatened or
pending action, with or without court approval, or of expenses incurred
in defending a threatened or pending action which is settled or
otherwise disposed of without court approval, unless the required
approval set forth in Section 6 of this Article is obtained.
Section 5. Successful Defense By Agent
To the extent that an agent of this Trust has been successful on the merits in
defense of any proceeding referred to in Sections 2 or 3 of this Article or in
defense of any claim, issue or matter therein, before the court or other body
before whom the proceeding was brought, the agent shall be indemnified against
expenses actually and reasonably incurred by the agent in connection therewith,
provided that the Board of Trustees, including a majority who are disinterested,
non-party trustees, also determines that based upon a review of the facts, the
agent was not liable by reason of the disabling conduct referred to in Section 4
of this Article.
Section 6. Required Approval
Except as provided in Section 5 of this Article, any indemnification under this
Article shall be made by this Trust only if authorized in the specific case on a
determination that indemnification of the agent is proper in the circumstances
because the agent has met the applicable standard of conduct set forth in
Sections 2 or 3 of this Article and is not prohibited from indemnification
because of the disabling conduct set forth in Section 4 of this Article, by:
(a) A majority vote of a quorum consisting of trustees who are not parties
to the proceeding and are not interested persons of the trust (as
defined in the Investment Company Act of 1940); or
(b) A written opinion by an independent legal counsel.
Section 7. Advance of Expenses
Expenses incurred in defending any proceeding may be advanced by this Trust
before the final disposition of the proceeding on receipt of an undertaking by
or on behalf of the agent to repay the amount of the advance unless it shall be
determined ultimately that the agent is entitled to be indemnified as authorized
in this Article, provided the agent provides a security for his undertaking, or
a majority of a quorum of the disinterested, non-party trustees, or an
independent legal counsel in a written opinion, determine that based on review
of readily available facts, there is reason to believe that said agent
ultimately will be found entitled to indemnification.
Section 8. Other Contractual Rights
Nothing contained in this Article shall affect any right to indemnification to
which persons other than trustees and officers of this Trust or any subsidiary
hereof may be entitled by contract or otherwise.
Section 9. Limitations
No indemnification or advance shall be made under this Article, except as
provided in Sections 5 or 6 in any circumstances where it appears:
(a) That it would be inconsistent with a provision of the Declaration of
Trust, a resolution of the shareholders or an agreement in effect at
the time of accrual of the alleged cause of action asserted in the
proceeding in which the expenses were incurred or other amounts were
paid which prohibits or otherwise limits indemnification; or
(b) That it would be inconsistent with any condition expressly imposed by a
court in approving a settlement.
Section 10. Insurance
Upon and in the event of a determination by the Board of Trustees of this Trust
to purchase such insurance, this trust shall purchase and maintain insurance on
behalf of any agent of this Trust against any liability asserted against or
incurred by the agent in such capacity or arising out of the agent's status as
such, but only to the extent that this Trust would have the power to indemnify
the agent against that liability under the provisions of this Article.
Section 11. Fiduciaries of Employee Benefit Plan
This Article does not apply to any proceeding against any trustee, investment
manager or other fiduciary of an employee benefit plan in that person's capacity
as such, even though that person may also be an agent of this Trust as defined
in Section 1 of this Article. Nothing contained in this Article shall limit any
right to indemnification to which such a trustee, investment manager or other
fiduciary may be entitled by contract or otherwise which shall be enforceable to
the extent permitted by applicable law other than this Article.
ARTICLE VII
Records and Reports
Section 1. Maintenance and Inspection of Share Register
This Trust shall keep at its principal executive office or at the office of its
transfer agent or registrar, if either be appointed and as determined by
resolution of the Board of Trustees, a record of its shareholders, giving the
names and addresses of all shareholders and the number and series of shares held
by each shareholder.
Section 2. Maintenance and Inspection of Bylaws
The Trust shall keep at is principal executive office the original or a copy of
these Bylaws as amended to date, which shall be open to inspection by the
shareholders at all reasonable times during office hours.
Section 3. Maintenance and Inspection of Other Records
The accounting books and records and minutes of proceedings of the shareholders
and the Board of Trustees and any committee or committees of the Board of
Trustees shall be kept at such place or places designated by the Board of
Trustees or in the absence of such designation, at the principal executive
office of the Trust. The minutes shall be kept in written form and the
accounting books and records shall be kept either in written form or in any
other form capable of being converted into written form. The minutes and
accounting books and records shall be open to inspection upon the written demand
of any shareholder or holder of a voting trust certificate at any reasonable
time during usual business hours for a purpose reasonably related to the
holder's interests as a shareholder or as the holder of a voting trust
certificate. The inspection may be made in person or by an agent or attorney and
shall include the right to copy and make extracts.
Section 4. Inspection by Trustees
Every trustee shall have the absolute right at any reasonable time to inspect
all books, records, and documents of every kind and the physical properties of
the Trust. This inspection by a trustee may be made in person or by an agent or
attorney and the right of inspection includes the right to copy and make
extracts of documents.
Section 5. Financial Statements
A copy of any financial statements and any income statement of the Trust for
each quarterly period of each fiscal year and accompanying balance sheet of the
Trust as of the end of each such period that has been prepared by the Trust
shall be kept on file in the principal executive office of the Trust for at
least twelve (12) months and each such statement shall be exhibited at all
reasonable times to any shareholder demanding an examination of any such
statement or a copy shall be mailed to any such shareholder.
The quarterly income statements and balance sheets referred to in this section
shall be accompanied by the report, if any, of any independent accountants
engaged by the Trust or the certificate of an authorized officer of the Trust
that the financial statements were prepared without audit from the books and
records of the Trust.
ARTICLE VIII
General Matters
Section 1. Checks, Drafts, Evidence of Indebtedness
All checks, drafts, or other orders for payment of money, notes or other
evidences of indebtedness issued in the name of or payable to the Trust shall be
signed or endorsed by such person or persons and in such manner as from time to
time shall be determined by resolution of the Board of Trustees.
Section 2. Contracts and Instruments; How Executed
The Board of Trustees, except as otherwise provided in these Bylaws, may
authorize any officer or officers, agent or agents, to enter into any contract
or execute any instrument in the name of and on behalf of the Trust and this
authority may be general or confined to specific instances; and unless so
authorized or ratified by the Board of Trustees or within the agency power of an
officer, no officer, agent, or employee shall have any power or authority to
bind the Trust by any contract or engagement or to pledge its credit or to
render it liable for any purpose or for any amount.
Section 3. Certificates for Shares
A certificate or certificates for shares of beneficial interest in any series of
the trust shall be issued to each shareholder when any of these shares are fully
paid. All certificates shall be signed in the name of the Trust by the chairman
of the board or the president or vice president and by the chief financial
officer or an assistant treasurer or the secretary or any assistant secretary,
certifying the number of shares and the series of shares owned by the
shareholders. Any or all of the signatures on the certificate may be facsimile.
In case any officer, transfer agent, or registrar who has signed or whose
facsimile signature has been place on a certificate shall have ceased to be that
officer, transfer agent, or registrar before that certificate is issued, it may
be issued by the Trust with the same effect as if that person were an officer,
transfer agent or registrar at the date of issue. Notwithstanding the foregoing,
the Trust may adopt and use a system of issuance, recordation and transfer of
its shares by electronic or other means.
Section 4. Lost Certificates
Except as provided in this Section 4, no new certificates for shares shall be
issued to replace an old certificate unless the latter is surrendered to the
Trust and cancelled at the same time. The Board of Trustees may in case any
share certificate or certificate for any other security is lost, stolen, or
destroyed, authorize the issuance of a replacement certificate on such terms and
conditions as the Board of Trustees may require, including a provision for
indemnification of the Trust secured by a bond or other adequate security
sufficient to protest the Trust against any claim that may be made against it,
including any expense or liability on account of the alleged loss, theft, or
destruction of the certificate or the issuance of the replacement certificate.
Section 5. Representation of Shares of Other Entities
The chairman of the board, the president or any vice president or any other
person authorized by resolution of the Board of Trustees or by any of the
foregoing designated officers, is authorized to vote on behalf of the Trust any
and all shares of any corporation or corporations, partnerships, trusts, or
other entities, foreign or domestic, standing in the name of the Trust. The
authority granted to these officers to vote or represent on behalf of the Trust
any and all shares held by the Trust in any form of entity may be exercised by
any of these officers in person or by any person authorized to do so by a proxy
duly executed by these officers.
ARTICLE IX
Amendments
Section 1. Amendment by Shareholders
New Bylaws may be amended or repealed by the affirmative vote or written consent
of a majority of the outstanding shares entitled to vote, except as otherwise
provided by applicable law or by the Declaration of Trust or these Bylaws.
Section 2. Amendment By Trustees
Subject to the right of shareholders as provided in Section 1 of this Article to
adopt, amend or repeal Bylaws, and except as otherwise provided by applicable
law or by the Declaration of Trust, these Bylaws may be adopted, amended, or
repealed by the Board of Trustees.
AMERICAN CENTURY INVESTMENT MANAGEMENT, INC.
MANAGEMENT AGREEMENT
Advisor Class
This MANAGEMENT AGREEMENT is made and entered into by and between the
registered investment companies listed on Exhibit A to this Agreement (the
"Companies"), as of the dates noted on such Exhibit A, and American Century
Investment Management, Inc., a Delaware corporation (the "Investment Manager").
WHEREAS, the Companies have adopted a Multiple Class Plan dated as of
August 1, 1997, (as the same may be amended from time to time, the "Multiple
Class Plan"), pursuant to Rule 18f-3 of the Investment Company Act of 1940, as
amended (the "Investment Company Act"); and
WHEREAS, the Multiple Class Plan establishes three classes of shares of
certain series of shares of the Companies: the Investor Class, the Institutional
Class and the Advisor Class; and
WHEREAS, the sole class of shares issued by each series of shares of
the Companies prior to the adoption of the Multiple Class Plan has been
designated as the Investor Class, the investment management services for which
are provided by the Investment Manager pursuant to that certain Management
Agreement dated as of August 1, 1997 and its predecessors; and
IN CONSIDERATION of the mutual promises and agreements herein
contained, the parties agree as follows:
1. Investment Management Services. The Investment Manager shall supervise
the investments of the Advisor Class of each series of shares of the
Companies contemplated as of the date hereof, and the Advisor Class of
such subsequent series of shares as the Companies shall select the
Investment Manager to manage. In such capacity, the Investment Manager
shall maintain a continuous investment program for the Advisor Class of
each such series, determine what securities shall be purchased or sold
by each series, secure and evaluate such information as it deems proper
and take whatever action is necessary or convenient to perform its
functions, including the placing of purchase and sale orders. In
performing its duties hereunder, the Investment Manager will manage the
portfolio of all classes of a particular series as a single portfolio.
2. Compliance With Laws. All functions undertaken by the Investment
Manager hereunder shall at all times conform to, and be in accordance
with, any requirements imposed by:
(a) the Investment Company Act and any rules and regulations
promulgated thereunder;
(b) any other applicable provisions of law;
(c) the Declaration of Trust or Articles of Incorporation
applicable to each of the Companies as amended from time to
time;
(d) the By-Laws of the Companies as amended from time to time; and
(e) The Multiple Class Plan; and
(f) the registration statement of the Companies, as amended from
time to time, filed under the Securities Act of 1933 and the
Investment Company Act.
3. Board Supervision. All of the functions undertaken by the Investment
Manager hereunder shall at all times be subject to the direction of the
Board of Trustees or Board of Directors (collectively, the "Board of
Directors") of the Companies, its executive committee, or any committee
or officers of the Companies acting under the authority of the Board of
Directors.
4. Payment Of Expenses. The Investment Manager will pay all of the
expenses of the Advisor Class of each series of the Companies' shares
that it shall manage, other than interest, taxes, brokerage
commissions, portfolio insurance, extraordinary expenses and the fees
and expenses of those Directors who are not "interested persons" as
defined in 1940 Act (hereinafter referred to as the "Independent
Directors") (including counsel fees) and expenses incurred in
connection with the provision of shareholder services and distribution
services under the Master Distribution and Shareholder Services Plan
dated as of August 1, 1997. The Investment Manager will provide the
Companies with all physical facilities and personnel required to carry
on the business of the Advisor Class of each series that the Investment
Manager shall manage, including but not limited to office space, office
furniture, fixtures and equipment, office supplies, computer hardware
and software and salaried and hourly paid personnel. The Investment
Manager may at its expense employ others to provide all or any part of
such facilities and personnel.
5. Account Fees. The Board of Directors may impose fees for various
account services, proceeds of which may be remitted to the appropriate
Fund or the Investment Manager at the discretion of the Board. At least
60 days' prior written notice of the intent to impose such fee must be
given to the shareholders of the affected series.
6. Management Fees.
(a) In consideration of the services provided by the Investment
Manager, the Advisor Class of each series of shares of the
Companies managed by the Investment Manager shall pay to the
Investment Manager a per annum management fee (hereinafter,
the "Applicable Fee"). The calculation of the Applicable Fee
for the Advisor Class of a series is performed as follows:
(i) Each series is assigned to one of three categories
based on its overall investment objective
("Investment Category"). The Investment Category
assignments appear in Exhibit B to this Agreement.
(ii) Each series is assigned a fee schedule within its
Investment Category in Exhibit C to this Agreement.
The Investment Category assets managed by the
Investment Manager determines the first component of
a series' fee. This fee is referred to as the
"Investment Category Fee". The determination of the
Investment Category assets is as follows:
a) Money Market Fund Category. The assets which
are used to determine the fee for this
Investment Category is the sum of the assets
of all of the open-end investment company
series which invest primarily in debt
securities, are subject to Rule 2a-7 under
the 1940 Act, managed by the Investment
Manager and distributed to the public by
American Century Investment Services, Inc.
b) Bond Fund Category. The assets which are
used to determine the fee for this
Investment Category is the sum the assets of
all of the open-end investment company
series which invest primarily in debt
securities, are not subject to Rule 2a-7
under the 1940 Act, are managed by the
Investment Manager and are distributed to
the public by American Century Investment
Services, Inc.
c) Equity Fund Category. The assets which are
used to determine the fee for this
Investment Category is the sum the assets of
all of the open-end investment company
series which invest primarily in equity
securities, are managed by the Investment
Manager and are distributed to the public by
American Century Investment Services, Inc.
(iii) A fee which is based on the total assets in all of
the Investment Categories is determined by the
schedule which appears in Exhibit D. This fee is
referred to as the series' "Complex Fee".
(iv) The Applicable Fee for a series is the sum of the
Investment Category Fee and the Complex Fee.
(v) The assets which are used to compute the Applicable
Fee shall be the assets of all of the open-end
investment companies managed by the Investment
Manager. Any exceptions to this requirement shall be
approved by the Board of Directors of the Companies.
(b) On the first business day of each month, the Advisor Class of
each series of shares shall pay the management fee at the rate
specified by subparagraph (a) of this paragraph 6 to the
Investment Manager for the previous month. The fee for the
previous month shall be calculated by multiplying the
Applicable Fee for such series by the aggregate average daily
closing value of the series' net assets during the previous
month, and further multiplying that product by a fraction, the
numerator of which shall be the number of days in the previous
month, and the denominator of which shall be 365 (366 in leap
years).
(c) In the event that the Board of Directors of a Company shall
determine to issue an Advisor Class of any additional series
of shares for which it is proposed that the Investment Manager
serve as investment manager, the Company and the Investment
Manager shall enter into an Addendum to this Agreement setting
forth the name of the series, the Applicable Fee and such
other terms and conditions as are applicable to the management
of such series of shares.
7. Continuation Of Agreement. This Agreement shall continue in effect,
unless sooner terminated as hereinafter provided, for a period of two
years from the execution hereof, and for as long thereafter as its
continuance is specifically approved, as to each series of the
Companies, at least annually (i) by the Board of Directors of the
Companies or by the vote of a majority of the outstanding Advisor Class
voting securities of the Companies, and (ii) by the vote of a majority
of the Directors of the Companies, who are not parties to the agreement
or interested persons of any such party, cast in person at a meeting
called for the purpose of voting on such approval.
8. Termination. This Agreement may be terminated, with respect to any
series, by the Investment Manager at any time without penalty upon
giving the appropriate Company 60 days' written notice, and may be
terminated, with respect to any series, at any time without penalty by
the Board of Directors of a Company or by vote of a majority of the
outstanding Advisor Class voting securities of such series on 60 days'
written notice to the Investment Manager.
9. Effect Of Assignment. This Agreement shall automatically terminate in
the event of assignment by the Investment Manager, the term
"assignment" for this purpose having the meaning defined in Section
2(a)(4) of the 1940 Act.
10. Other Activities. Nothing herein shall be deemed to limit or restrict
the right of the Investment Manager, or the right of any of its
officers, directors or employees (who may also be a trustee, officer or
employee of a Company), to engage in any other business or to devote
time and attention to the management or other aspects of any other
business, whether of a similar or dissimilar nature, or to render
services of any kind to any other corporation, firm, individual or
association.
11. Standard Of Care. In the absence of willful misfeasance, bad faith,
gross negligence, or reckless disregard of its obligations or duties
hereunder on the part of the Investment Manager, it, as an inducement
to it to enter into this Agreement, shall not be subject to liability
to the Companies or to any shareholder of the Companies for any act or
omission in the course of, or connected with, rendering services
hereunder or for any losses that may be sustained in the purchase,
holding or sale of any security.
12. Separate Agreement. The parties hereto acknowledge that certain
provisions of the 1940 Act, in effect, treat each series of shares of a
registered investment company as a separate investment company.
Accordingly, the parties hereto hereby acknowledge and agree that, to
the extent deemed appropriate and consistent with the 1940 Act, this
Agreement shall be deemed to constitute a separate agreement between
the Investment Manager and each series of shares of the Companies
managed by the Investment Manager.
13. Use of the Names "American Century" and "Benham." The name "American
Century" and all rights to the use of the names "American Century" and
"Benham" are the exclusive property of American Century Services
Corporation ("ACSC"), an affiliate of the Investment Manager. ACSC has
consented to, and granted a non-exclusive license for, the use by the
Companies and their respective series of the names "American Century"
and "Benham" in the name of the Companies and any series of shares
thereof. Such consent and non-exclusive license may be revoked by ACSC
in its discretion if ACSC, the Investment Manager, or a subsidiary or
affiliate of either of them is not employed as the investment manager
of each series of shares of the Companies. In the event of such
revocation, the Companies and each series of shares thereof using the
name "American Century" or "Benham" shall cease using the name
"American Century" or "Benham", unless otherwise consented to by ACSC
or any successor to its interest in such names.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective duly authorized officers as of the day and year
indicated on Exhibit A.
AMERICAN CENTURY GOVERNMENT INCOME TRUST
AMERICAN CENTURY INTERNATIONAL BOND FUNDS
AMERICAN CENTURY QUANTITATIVE EQUITY FUNDS
Attest: AMERICAN CENTURY TARGET MATURITIES TRUST
/*/Douglas A. Paul /*/James M. Benham
Douglas A. Paul James M. Benham
Secretary President and Chief Executive Officer
Attest: AMERICAN CENTURY INVESTMENT MANAGEMENT, INC.
/*/William M. Lyons /*/Robert C. Puff
William M. Lyons Robert C. Puff
Secretary President
<PAGE>
Exhibit A
Registered Investment Companies Subject to Management Agreement
- --------------------------------------------------------------- --------------
Registered Investment Company and Advisor Class Funds Date
- --------------------------------------------------------------- --------------
American Century Government Income Trust
Benham GNMA Fund August 1, 1997
Benham Government Agency Money Market Fund August 1, 1997
Benham Intermediate-Term Treasury Fund August 1, 1997
Benham Long-Term Treasury Fund August 1, 1997
Benham Short-Term Government Fund August 1, 1997
Benham Short-Term Treasury Fund August 1, 1997
American Century International Bond Funds
Benham International Bond Fund August 1, 1997
American Century Investment Trust
Benham Prime Money Market Fund June 1, 1998
American Century Quantitative Equity Funds
American Century Equity Growth Fund August 1, 1997
American Century Global Gold Fund August 1, 1997
American Century Global Natural Resources Fund August 1, 1997
American Century Income & Growth Fund August 1, 1997
American Century Small Capitalization Quantitative Fund July 1, 1998
American Century Utilities Fund August 1, 1997
American Century Target Maturities Trust
Benham Target Maturities Trust: 2000 August 1, 1997
Benham Target Maturities Trust: 2005 August 1, 1997
Benham Target Maturities Trust: 2010 August 1, 1997
Benham Target Maturities Trust: 2015 August 1, 1997
Benham Target Maturities Trust: 2020 August 1, 1997
Benham Target Maturities Trust: 2025 August 1, 1997
- --------------------------------------------------------------- --------------
By executing this Exhibit A, each Fund executes the Management Agreement to
which it is attached and all of its Exhibits and amendments as of the date
specified above.
AMERICAN CENTURY GOVERNMENT INCOME TRUST
AMERICAN CENTURY INTERNATIONAL BOND FUNDS
AMERICAN CENTURY INVESTMENT AMERICAN CENTURY QUANTITATIVE EQUITY FUNDS
MANAGEMENT, INC. AMERICAN CENTURY TARGET MATURITIES TRUST
/*/Robert C. Puff /*/Douglas A. Paul
Robert C. Puff Douglas A. Paul
President Secretary
<PAGE>
<TABLE>
Exhibit B
Series Investment Categories
- ----------------------------------------- ---------------------------------------------------------
<S> <C>
Investment Category Series
- ----------------------------------------- ---------------------------------------------------------
Money Market Funds Benham Government Agency Money Market Fund
Benham Prime Money Market Fund
Bond Funds Benham GNMA Fund
Benham Intermediate-Term Treasury Fund
Benham International Bond Fund
Benham Long-Term Treasury Fund
Benham Short-Term Government Fund
Benham Short-Term Treasury Fund
Benham Target Maturities Trust: 2000
Benham Target Maturities Trust: 2005
Benham Target Maturities Trust: 2010
Benham Target Maturities Trust: 2015
Benham Target Maturities Trust: 2020
Benham Target Maturities Trust: 2025
Equity Funds American Century Equity Growth Fund
American Century Global Gold Fund
American Century Global Natural Resources Fund
American Century Income & Growth Fund
American Century Small Capitalization Quantitative Fund
American Century Utilities Fund
- ----------------------------------------- ---------------------------------------------------------
Dated: June 1, 1998
AMERICAN CENTURY GOVERNMENT INCOME TRUST
AMERICAN CENTURY INTERNATIONAL BOND FUNDS
AMERICAN CENTURY INVESTMENT
MANAGEMENT, INC. AMERICAN CENTURY QUANTITATIVE EQUITY FUNDS
AMERICAN CENTURY TARGET MATURITIES TRUST
As executed on behalf of the above in As executed on behalf of the above in
Exhibit A by Exhibit A by
Robert C. Puff James M. Benham
President President and Chief Executive Officer
</TABLE>
<PAGE>
<TABLE>
Exhibit C
Investment Category Fee Schedules: Money Market Funds
Schedule 1
------------------------------------------------------------------
<S> <C> <C>
Category Assets Fee Rate Schedule 1 Funds:
First $1 billion 0.2500% Benham Government Agency Money Market Fund
- -------------------------- -------- ------------------------------------------------------------------
Next $1 billion 0.2070%
Next $3 billion 0.1660%
Next $5 billion 0.1490%
Next $15 billion 0.1380%
Next $25 billion 0.1375%
Thereafter 0.1370%
Schedule 2
------------------------------------------------------------------
Category Assets Fee Rate Schedule 2 Funds:
First $1 billion 0.2700% NONE
- -------------------------- -------- ------------------------------------------------------------------
Next $1 billion 0.2270%
Next $3 billion 0.1860%
Next $5 billion 0.1690%
Next $15 billion 0.1580%
Next $25 billion 0.1575%
Thereafter 0.1570%
Schedule 3
------------------------------------------------------------------
Category Assets Fee Rate Schedule 3 Funds:
First $1 billion 0.3700% Benham Prime Money Market Fund
- -------------------------- -------- ------------------------------------------------------------------
Next $1 billion 0.3270%
Next $3 billion 0.2860%
Next $5 billion 0.2690%
Next $15 billion 0.2580%
Next $25 billion 0.2575%
Thereafter 0.2570%
<PAGE>
Category Fee Schedules: Bond Funds
Schedule 1
------------------------------------------------------------------
Category Assets Fee Rate Schedule 1 Funds:
First $1 billion 0.2800% Benham Short-Term Treasury Fund
Next $1 billion 0.2280% Benham Intermediate-Term Treasury Fund
Next $3 billion 0.1980% Benham Long-Term Treasury Fund
------------------------------------------------------------------
Next $5 billion 0.1780%
Next $15 billion 0.1650%
Next $25 billion 0.1630%
Thereafter 0.1625%
Schedule 2
------------------------------------------------------------------
Category Assets Fee Rate Schedule 2 Funds:
First $1 billion 0.3100% NONE
- -------------------------- -------- ------------------------------------------------------------------
Next $1 billion 0.2580%
Next $3 billion 0.2280%
Next $5 billion 0.2080%
Next $15 billion 0.1950%
Next $25 billion 0.1930%
Thereafter 0.1925%
Schedule 3
------------------------------------------------------------------
Category Assets Fee Rate Schedule 3 Funds:
First $1 billion 0.3600% Benham GNMA Fund
Next $1 billion 0.3080% Benham Short-Term Government Fund
Next $3 billion 0.2780% Benham Target Maturities Trust: 2000
Next $5 billion 0.2580% Benham Target Maturities Trust: 2005
Next $15 billion 0.2450% Benham Target Maturities Trust: 2010
Next $25 billion 0.2430% Benham Target Maturities Trust: 2015
Thereafter 0.2425% Benham Target Maturities Trust: 2020
Benham Target Maturities Trust: 2025
------------------------------------------------------------------
Category Fee Schedules: Bond Funds
(continued)
Schedule 4
------------------------------------------------------------------
Category Assets Fee Rate Schedule 4 Funds:
First $1 billion 0.6100% Benham International Bond Fund
- -------------------------- ------------------------------------------------------------------
Next $1 billion 0.5580%
Next $3 billion 0.5280%
Next $5 billion 0.5080%
Next $15 billion 0.4950%
Next $25 billion 0.4930%
Thereafter 0.4925%
Category Fee Schedules: Equity Funds
Schedule 1
------------------------------------------------------------------
Category Assets Fee Rate Schedule 1 Funds:
First $1 billion 0.5200% American Century Equity Growth Fund
Next $5 billion 0.4600% American Century Global Gold Fund
Next $15 billion 0.4160% American Century Global Natural Resources Fund
Next $25 billion 0.3690% American Century Income & Growth Fund
Next $50 billion 0.3420% American Century Utilities Fund
Next $150 billion 0.3390%
------------------------------------------------------------------
Thereafter 0.3380%
Schedule 2
------------------------------------------------------------------
Category Assets Fee Rate Schedule 2 Funds:
First $1 billion 0.7200% American Century Small Capitalization
Next $5 billion 0.6600% Quantitative Fund
------------------------------------------------------------------
Next $15 billion 0.6160%
Next $25 billion 0.5690%
Next $50 billion 0.5420%
Next $150 billion 0.5390%
Thereafter 0.5380%
Dated: June 1, 1998
AMERICAN CENTURY GOVERNMENT INCOME TRUST
AMERICAN CENTURY INTERNATIONAL BOND FUNDS
AMERICAN CENTURY INVESTMENT MANAGEMENT, INC. AMERICAN CENTURY QUANTITATIVE EQUITY FUNDS
AMERICAN CENTURY TARGET MATURITIES TRUST
As executed on behalf of the above in As executed on behalf of the above in
Exhibit A by Exhibit A by
Robert C. Puff Douglas A. Paul
President Secretary
</TABLE>
<PAGE>
Exhibit D
Complex Fee Schedule
Complex Assets Fee Rate
-------------- --------
First $2.5 billion 0.0600%
Next $7.5 billion 0.0500%
Next $15.0 billion 0.0485%
Next $25.0 billion 0.0470%
Next $50.0 billion 0.0460%
Next $100.0 billion 0.0450%
Next $100.0 billion 0.0440%
Next $200.0 billion 0.0430%
Next $250.0 billion 0.0420%
Next $500.0 billion 0.0410%
Thereafter 0.0400%
Dated: June 1, 1998
AMERICAN CENTURY GOVERNMENT INCOME TRUST
AMERICAN CENTURY INTERNATIONAL BOND FUNDS
AMERICAN CENTURY INVESTMENT
MANAGEMENT, INC. AMERICAN CENTURY QUANTITATIVE EQUITY FUNDS
AMERICAN CENTURY TARGET MATURITIES TRUST
As executed on behalf As executed on behalf
of the above in of the above in
Exhibit A by Exhibit A by
Robert C. Puff Douglas A. Paul
President Secretary
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in Post-Effective Amendment No. 6
to the Registration Statement of American Century-Benham Prime Money Market Fund
(the only fund comprising the American Century Investment Trust ) on Form N-1A
of our report dated April 7, 1998 on our audit of the financial statements and
financial highlights of the American Century-Benham Prime Money Market Fund,
which report is included in the Annual Report to Shareholders for the year ended
February 28, 1998 which is incorporated by reference in the Post-Effective
Amendment to the Registration Statement. We also consent to the reference in the
Statement of Additional Information to our Firm under the caption "Independent
Accountants."
Coopers & Lybrand L.L.P
Kansas City, Missouri
May 11, 1998
INDEPENDENT AUDITORS' CONSENT
The Board of Trustees
American Century Investment Trust:
We consent to the use of our report dated April 4, 1997 in your registration
statement.
/s/KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Kansas City, Missouri
May 13, 1998
BENHAM PRIME FUND
YIELD CALCULATION
2/28/98
Effective Yield: [(Base Period Return)+1)^365/7]-1
Base Period Return = 0.00099153
7 Day Effective Yield = 5.30%
Yield: = I/B X 365/7
Y = Yield
I = total income of hypothetical account
over the seven day period
B = beginning account value
I = 0.00099153
B = $1.00
7 Day Yield = 5.17%
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 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 15th day of January, 1998.
AMERICAN CENTURY INVESTMENT TRUST
(A Massachusetts Business Trust)
By: /s/ Richard W. Ingram
Richard W. Ingram, President
SIGNATURE AND TITLE
/s/ James E. Stowers /s/ Isaac Stein
James E. Stowers, III 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/ William M. Lyons
Ronald J. Gilson William M. Lyons
Director Director
/s/ Myron S. Scholes /s/ Maryanne Roepke
Myron S. Scholes Maryanne Roepke
Director Treasurer
Attest:
/s/ Kenneth E. Scott
Kenneth E. Scott By:/s/ Douglas A. Paul
Director Douglas A. Paul, Secretary
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF AMERICAN CENTURY INVESTMENT TRUST AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH REPORT.
</LEGEND>
<CIK> 0000908406
<NAME> AMERICAN CENTURY INVESTMENT TRUST
<SERIES>
<NUMBER> 1
<NAME> AMERICAN CENTURY-BENHAM PRIME MONEY MARKET FUND
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> FEB-28-1998
<PERIOD-END> FEB-28-1998
<INVESTMENTS-AT-COST> 1,409,239,662
<INVESTMENTS-AT-VALUE> 1,409,239,662
<RECEIVABLES> 1,906,726
<ASSETS-OTHER> 12,464,116
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,423,610,504
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 6,299,817
<TOTAL-LIABILITIES> 6,299,817
<SENIOR-EQUITY> 1,417,565,184
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 1,417,565,184
<SHARES-COMMON-PRIOR> 1,212,268,858
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (254,497)
<NET-ASSETS> 1,417,310,687
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 6,503,720
<NET-INVESTMENT-INCOME> 67,224,070
<REALIZED-GAINS-CURRENT> 24,038
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 67,248,108
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 67,224,070
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,330,994,339
<NUMBER-OF-SHARES-REDEEMED> 2,189,600,577
<SHARES-REINVESTED> 63,902,564
<NET-CHANGE-IN-ASSETS> 205,320,364
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 6,282,235
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 8,094,449
<AVERAGE-NET-ASSETS> 1,299,729,372
<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
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> 0.50
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
