[front cover]
AUGUST 31, 1999
SEMIANNUAL REPORT
- ------------------
AMERICAN CENTURY
[graphic of stairs]
PRIME MONEY MARKET
[american century logo(reg. sm)]
American
Century
[inside front cover]
Y2K TESTING EFFORTS PAY DIVIDENDS IN PREPAREDNESS
- --------------------------------------------------------------------------------
Y2K, short for the Year 2000, refers more specifically to the date change from
December 31, 1999 to January 1, 2000. This date change is significant for
computers because many were originally programmed to process dates with
two-character years--99 instead of 1999.
When the calendar rolls to 2000, this can create problems for computers
programmed this way because they will read the date as "00," and may interpret
it as 1900. Most companies have been working to reprogram their computer systems
with four-digit years. Reprogramming is very labor-intensive and requires
testing to ensure that there are no errors and that all lines of code were
successfully changed.
Recognizing the possible impact of the Y2K issue, our senior-level Steering
Committee, programmers, business partners and Y2K team have been working
diligently to make January 1, 2000 a non-event for American Century investors.
Currently, our systems have been modified, tested and returned to production,
and we have tested our systems with our vendors and business partners.
In March and April of this year, we participated in the Security Industry
Association's (SIA) industry-wide test and successfully processed transactions
for dates up to and beyond 2000. American Century transactions with our partner
firms were processed free of Y2K bugs. We also participated in the Market Data
Test conducted by the SIA and Financial Information Forum in May. Again, the
computer scripts were executed successfully with no Y2K-related errors.
In addition, our Y2K team has developed contingency plans. These plans are
designed to minimize the impact on our investors and help us maintain operations
in the event of any Y2K-related incidents. We have conducted practice drills of
contingency scenarios and will continue to refine our plans during the rest of
1999 to respond quickly and effectively so that the date change is as seamless
as possible for investors. We expect the Year 2000 to be business as usual at
American Century.
Year 2000 Readiness Disclosure
[left margin]
PRIME MONEY MARKET
(BPRXX)
- -------------------
TURN TO THE INSIDE BACK COVER OF THIS REPORT TO SEE A LIST OF AMERICAN CENTURY
FUNDS CLASSIFIED BY OBJECTIVE AND RISK.
RECEIVE YOUR ANNUAL REPORTS ONLINE
CHOOSE OUR ELECTRONIC COMMUNICATION PROGRAM
Access annual reports, newsletters and prospectuses electronically.
All you need is your OnePIN. Don't have a OnePIN? Visit
www.americancentury.com and set up your OnePIN by following two easy steps
using your automated phone line personal access code.
OnePIN opens the door to services that help you stay in control of your
money:
* MONITOR YOUR INVESTMENTS on your Personal Homepage any time, any day
* STAY INFORMED and set up a watch list of securities -- or even a test
portfolio
* REDUCE CLUTTER IN YOUR MAILBOX by selecting the electronic communication
link from your Personal Homepage
Set up your OnePIN and choose the electronic communication program today.
Questions? Call 1-800-345-2021 or go to www.americancentury.com.
Our Message to You
- --------------------------------------------------------------------------------
[photo of James E. Stowers III, seated, with James E. Stowers, Jr.]
Strong economic growth and increasing inflation anxiety resulted in higher
money market yields during the six months ended August 31, 1999. The recovery of
overseas economies and unabated U.S. growth led the Federal Reserve (the U.S.
central bank) to raise short-term interest rates twice during the summer of
1999.
In this environment, Prime Money Market continued to shine, providing
above-average yields and returns. Fund investors have benefited from our
commitment to build and maintain a talented fund management group. American
Century's entire investment management team has doubled in size over the past
three years.
In addition to strengthening our portfolio and research staff, we've
recently made strategic investments in several other financial companies,
including Archipelago, Tradepoint Financial Networks, W.R. Hambrecht, and
WorldStreet Corporation. These investments demonstrate our determination to
actively support the development and use of technologies that improve the
efficiencies of capital markets, lower trading costs, and ultimately offer
better returns for shareholders.
Our commitment to delivering superior service to investors is reflected in
our redesigned quarterly statements, which have garnered some noteworthy
attention recently. American Century is the first mutual fund company to receive
the Communications Seal for a mutual fund statement from DALBAR Inc., an
independent mutual fund research firm. The seal recognizes communications
excellence that is exceptional for the industry and commends American Century
for meeting its customers' needs in an attractive, easy-to-read document.
This isn't American Century's first nod of approval from DALBAR. In June,
DALBAR recognized our statement's individual rate of return feature--part of the
personalized performance section--as the key reason it ranked our statement
second out of 88 mutual fund company statements in the nation.
One final note--in the spirit of our ongoing Year 2000 readiness
disclosures, we've provided a complete update on our preparations for Y2K on the
inside front cover of this report. We understand that our continued diligence in
this area is very important to you.
As always, we appreciate your continued confidence in American Century.
Sincerely,
/s/James E. Stowers, Jr. /s/James E. Stowers III
James E. Stowers, Jr. James E. Stowers III
Chairman of the Board and Founder Vice Chairman of the Board and
Chief Executive Officer
[right margin]
Table of Contents
Frequently Asked
Questions ............................................................ 2
PRIME MONEY MARKET
Performance Information ................................................ 3
Portfolio at a Glance .................................................. 3
Yields ................................................................. 3
Management Q&A ......................................................... 4
Types of Investments ................................................... 4
Portfolio Composition
by Credit Rating .................................................... 5
Schedule of Investments ................................................ 6
FINANCIAL STATEMENTS
Statement of Assets and
Liabilities ......................................................... 10
Statement of Operations ................................................ 11
Statements of Changes
in Net Assets ....................................................... 12
Notes to Financial
Statements .......................................................... 13
Financial Highlights ................................................... 15
OTHER INFORMATION
Share Class and Retirement
Account Information ................................................. 17
Background Information
Investment Philosophy
and Policies ...................................................... 18
Comparative Indices ................................................. 18
Lipper Rankings ..................................................... 18
Credit Rating
Guidelines ........................................................ 18
Investment Team
Leaders ........................................................... 18
Glossary ............................................................... 19
www.americancentury.com 1
Money Market Funds--Frequently Asked Questions
- --------------------------------------------------------------------------------
[left margin]
A FASTER AND EASIER WAY TO DEPOSIT MUTUAL FUND DISTRIBUTIONS
If you prefer to have your fund dividend or capital gains distributions sent to
you instead of reinvesting them, there are a couple of ways to get access to
this money faster than waiting for a check in the mail:
* YOU CAN HAVE DISTRIBUTIONS DEPOSITED DIRECTLY INTO YOUR MONEY MARKET
ACCOUNT. The money will be deposited the same day that the distributions
are paid.
* DISTRIBUTIONS CAN BE SENT ELECTRONICALLY TO YOUR BANK ACCOUNT. The money
will be available in your bank account within three days.
Contact our Investor Relations Representatives to set up either of these
options.
CAN I MAKE DIRECT DEPOSITS INTO MY MONEY MARKET FUND ACCOUNT?
Yes. You can arrange for direct deposit of your paycheck, Social Security
check, Treasury Direct interest payment, military allotment, or payments from
other government agencies. Give us a call, and we will send you the necessary
information to set it up.
WHAT IS THE HOLDING PERIOD ON NEW DEPOSITS INTO MY ACCOUNT?
Generally, there is an eight-business-day holding period for deposited
funds (initial investments in a new account are held for 15 calendar days).
There is a one-business-day holding period for U.S. Treasury checks, money
orders, and travelers' checks.
IS THERE A LIMIT ON THE NUMBER OF CHECKS I CAN WRITE ON MY MONEY MARKET ACCOUNT?
No. You can write as many checks as you like at no charge, as long as each
check is for $100 or more.
IS THERE AN EASY WAY TO MOVE MONEY FROM MY MONEY MARKET FUND INTO A STOCK OR
BOND FUND?
Yes. Moving money between funds is called an exchange, and there is no
limit on the number of exchanges you can make out of a money market fund
account. However, there is a limit of six exchanges per calendar year out of
stock and bond fund accounts.
Exchanges can be made by:
* visiting our Web site at
www.americancentury.com*
* using our Automated Information Line (1-800-345-8765)*
* calling an Investor Relations Representative at 1-800-345-2021*
* writing us a letter
HOW DO I DECIDE WHETHER A TAXABLE MONEY MARKET FUND OR A TAX-FREE MONEY MARKET
FUND IS RIGHT FOR ME?
The most important factor to consider is your tax bracket. Tax-free money
market funds typically offer lower yields than taxable funds, but you pay no
federal income taxes on the income from a tax-free fund.
If you are in one of the higher federal income tax brackets, taxes will eat
up a big part of your income from a taxable money market fund, so a tax-free
investment may be better for you. If you're in a lower tax bracket, then you can
usually earn more in a taxable fund even after taxes are deducted.
We can help you figure it out. If you give us a call and tell us what tax
bracket you're in, we can tell you whether you're likely to earn more after-tax
income in a tax-free or a taxable money market fund.
IF YOU HAVE ANY QUESTIONS ABOUT OUR MONEY MARKET FUNDS, CALL US TOLL FREE AT
1-800-345-2021 OR E-MAIL US AT OUR WEB SITE, WWW.AMERICANCENTURY.COM.
* Before you can make an exchange by calling an Investor Relations
Representative, using our Automated Information Line, or visiting our Web
site, you first must have provided us with written authorization to do so.
2 1-800-345-2021
Prime Money Market--Performance
- --------------------------------------------------------------------------------
<TABLE>
TOTAL RETURNS AS OF AUGUST 31, 1999
INVESTOR CLASS (INCEPTION 11/17/93) ADVISOR CLASS (INCEPTION 8/28/98)
PRIME 90-DAY TREASURY MONEY MARKET INSTRUMENT FUNDS(2) PRIME 90-DAY TREASURY
MONEY MARKET BILL INDEX AVERAGE RETURN FUND'S RANKING MONEY MARKET BILL INDEX
====================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
6 MONTHS(1) 2.27% 2.28% 2.13% -- 2.15% 2.28%
1 YEAR 4.73% 4.53% 4.43% 67 OUT OF 321 4.47% 4.53%
====================================================================================================================
AVERAGE ANNUAL RETURNS
3 YEARS 5.05% 4.94% 4.76% 46 OUT OF 273 -- --
5 YEARS 5.21% 5.12% 4.92% 34 OUT OF 218 -- --
LIFE OF FUND 5.04% 4.94%(3) 4.72%(3) 18 OUT OF 194(3) 4.47% 4.53%(4)
</TABLE>
(1) Returns for periods less than one year are not annualized.
(2) According to Lipper Inc., an independent mutual fund ranking service.
(3) Since 11/30/93, the date nearest the class's inception for which data are
available.
(4) Since 8/31/98, the date nearest the class's inception for which data are
available.
See pages 17-19 for more information about share classes, returns, the
comparative index, and Lipper fund rankings.
PORTFOLIO AT A GLANCE
AS OF 8/31/99
NET ASSETS $2.9 BILLION
8/31/99 2/28/99
NUMBER OF ISSUERS 75 67
WEIGHTED AVERAGE
MATURITY 68 DAYS 82 DAYS
EXPENSE RATIO (FOR
INVESTOR CLASS) 0.60%(1) 0.58%(2)
(1) Annualized.
(2) Includes a fee waiver. Absent the waiver, the ratio would have been 0.60%.
Investment terms are defined in the Glossary on pages 19-20.
YIELDS AS OF AUGUST 31, 1999
INVESTOR CLASS
7-DAY CURRENT YIELD 4.70%
7-DAY EFFECTIVE YIELD 4.81%
Past performance does not guarantee future results.
Money market funds are neither insured nor guaranteed by the FDIC or any other
government agency.
Yields will fluctuate, and although the fund seeks to preserve the value of your
investment at $1 per share, it is possible to lose money by investing in the
fund. The 7-day yield more closely reflects earnings of the fund than the total
return.
www.americancentury.com 3
Prime Money Market--Q&A
- --------------------------------------------------------------------------------
[photo of Denise Tabacco]
An interview with Denise Tabacco, portfolio manager on the Prime Money
Market fund investment team.
HOW DID PRIME MONEY MARKET PERFORM DURING THE SIX MONTHS ENDED AUGUST 31, 1999?
The fund's six-month return* ranked in the top quarter of the 347 "Money
Market Funds" tracked by Lipper Inc. Prime Money Market's longer-term returns
are equally strong. (See the previous page for fund returns and performance
comparisons.)
WHY DID THE FUND'S SEVEN-DAY CURRENT YIELD INCREASE DURING THE PERIOD (FROM
4.49% TO 4.70%)?
The Federal Reserve raised short-term interest rates twice in the past six
months--once at the end of June and again in late August. These rate hikes
pushed the federal funds rate target (an influential overnight lending rate for
banks) from 4.75% to 5.25%. When the Fed adjusts this rate target, money market
yields typically follow suit.
The two rate increases were a reversal of the rate cuts the Fed made in the
fall of 1998 to stabilize the markets during a period of global economic
turmoil. Since that time, foreign economies and markets have improved, so the
financial strain from overseas has become less of a concern.
HOW DID YOU POSITION THE FUND IN THIS ENVIRONMENT?
Back in March, we felt that the Fed was on hold and wouldn't raise interest
rates until it saw more definitive evidence of economic strength. As a result,
we maintained a longer weighted average maturity of around 80 days.
Stronger economic data in the second quarter and a surge in April's
consumer price index led us to change our expectations, so we shortened Prime
Money Market's average maturity gradually throughout June. A shorter average
maturity allows the fund to more quickly reflect higher interest rates.
By the end of June, the fund's average maturity was down to 70 days, and
for the most part we kept it right around there through the end of August.
PRIME MONEY MARKET'S HOLDINGS OF CDS HAVE INCREASED QUITE A BIT OVER THE PAST
YEAR. WHAT'S THE ATTRACTION?
From time to time, CDs offer significantly better yields than commercial
paper and other potential fund investments. This happens because the dealers
that sell CDs enhance the interest rate paid by the issuing banks. It's a
marketing gimmick, kind of like the occasional sale at a department store.
We've taken advantage of these opportunities over the past year to add more
CDs to the portfolio. That's had a positive impact on the fund's yield.
[left margin]
"THE FEDERAL RESERVE RAISED SHORT-TERM INTEREST RATES TWICE IN THE PAST SIX
MONTHS--ONCE AT THE END OF JUNE AND AGAIN IN LATE AUGUST."
[pie charts - data below]
TYPES OF INVESTMENTS
IN THE PORTFOLIO
AS OF AUGUST 31, 1999
Commercial Paper 58%
Variable-Rate Notes 21%
CDs 15%
Asset-Backed Securities 1%
Other 5%
AS OF FEBRUARY 28, 1999
Commercial Paper 62%
Variable-Rate Notes 19%
CDs 11%
Asset-Backed Securities 4%
Other 4%
Investment terms are defined in the Glossary on pages 19-20.
* All fund returns and yields referenced in this interview are for Investor
Class shares.
4 1-800-345-2021
Prime Money Market--Q&A
- --------------------------------------------------------------------------------
(Continued)
WERE THERE ANY CREDIT QUALITY ISSUES OVER THE PAST SIX MONTHS?
The overall credit quality of the fund didn't really change, but one issuer
whose securities were held by the fund did suffer liquidity problems.
General American Life Insurance, an issuer of short-term investment
contracts, had difficulty making timely principal payments. The company ran into
trouble when many of its institutional investors--including us--asked for early
repayment of their investment after the insurer's credit rating was downgraded.
The situation was resolved in a matter of weeks. Metropolitan Life
Insurance acquired General American and assumed repayment responsibility. Prime
Money Market's investment, which represented 3% of the portfolio, was returned
on October 1, 1999.
The event had no effect on the fund's yield or share price.
LOOKING AHEAD, WHAT'S YOUR OUTLOOK FOR SHORT-TERM INTEREST RATES?
We don't see any clear-cut reasons for the Fed to raise interest rates
further, so we expect short-term rates to be relatively stable in the coming
months.
Inflation, as measured by the consumer price index, has risen at a slightly
faster rate than in 1998--mainly because of surging oil prices--but it remains
historically low. In addition, economic activity in areas like construction and
home sales has shown signs of a slowdown.
That said, there is certainly no guarantee that the Fed is out of the
picture, so we'll be carefully monitoring the situation over the next few
months.
WHAT ARE YOUR PLANS FOR PRIME MONEY MARKET GOING FORWARD?
Right now, securities maturing in four to six months are offering
substantially higher yields than three-month securities. We recently purchased
more securities in this maturity sector to take advantage of their higher
yields, and we offset these holdings with very short-term securities to maintain
an average maturity of 70-80 days. We expect to keep the average maturity in
this range for the time being.
[right margin]
"WE DON'T SEE ANY CLEAR-CUT REASONS FOR THE FED TO RAISE INTEREST RATES FURTHER,
SO WE EXPECT SHORT-TERM RATES TO BE RELATIVELY STABLE IN THE COMING MONTHS."
PORTFOLIO COMPOSITION BY
CREDIT RATING
% OF FUND INVESTMENTS
AS OF AS OF
8/31/99 2/28/99
A-1+ 68% 96%
A-1 31% 4%
A-2 1% --
Ratings provided by Standard & Poor's. See Credit Rating Guidelines on page 18
for more information.
www.americancentury.com 5
Prime Money Market--Schedule of Investments
- --------------------------------------------------------------------------------
This schedule lists all investments owned by the fund, as well as each
security's amortized cost, as of the last day of the reporting period. The
securities are grouped by asset class (such as common stocks, corporate bonds,
temporary cash investments, as applicable), and some asset classes are further
broken down by industry or country.
AUGUST 31, 1999 (UNAUDITED)
Principal Amount Value
- --------------------------------------------------------------------------------
COMMERCIAL PAPER(1) -- 58.3%
BANKING -- 5.2%
$ 15,000,000 Banca Serfin S.A., 5.35%,
10/25/99 (LOC: Barclays
Bank PLC) (Acquired 8/25/99,
Cost $14,866,250)(2) $ 14,879,624
25,000,000 Banco Brasesco SA, Grand
Cayman Branch, 5.35%,
3/20/00 (LOC: Barclays
Bank PLC) 24,253,229
1,500,000 Banque National de Paris, 4.81%,
9/30/99 1,494,188
22,000,000 National Australia Bank Ltd. SA,
4.92%, 2/7/00 21,521,940
57,000,000 Spintab-Swedmortgage AB,
4.81%-4.82%,
9/10/99-11/29/99 56,484,187
25,000,000 Toronto-Dominion Bank (The),
4.90%, 11/22/99 24,720,972
9,000,000 Unibanco-Uniao de Bancos
Brasileiros S.A. Grand Cayman,
4.80%, 10/21/99 (LOC:
Barclays Bank PLC) 8,940,000
---------------
152,294,140
---------------
CREDIT CARD & TRADE RECEIVABLES -- 4.6%
15,000,000 Corporate Receivables Corp.,
5.17%, 10/20/99 (Acquired
7/27/99, Cost $14,816,896)(2) 14,894,446
99,500,000 Dakota Certificates (Citibank),
5.13%-5.18%,
9/2/99-10/19/99 (Acquired
7/7/99-7/21/99, Cost
$98,498,187)(2) 99,218,087
21,000,000 WCP Funding Inc., 5.07%,
9/2/99 (AMBAC) (Acquired
6/16/99, Cost $20,769,315)(2) 20,997,042
---------------
135,109,575
---------------
ENERGY (PRODUCTION & MARKETING) -- 9.4%
44,000,000 Chevron Transport Corp.,
4.80%-5.18%,
9/7/99-10/13/99 (Acquired
4/7/99-7/2/99, Cost
$43,177,037)(2) 43,868,937
10,000,000 Chevron U.K. Investment PLC,
4.80%, 10/21/99 9,933,333
24,000,000 Equilon Enterprises LLC, 5.20%,
10/18/99 23,837,067
57,000,000 Motiva Enterprises LLC,
5.22%-5.76%,
10/5/99-1/21/00 56,060,410
Principal Amount Value
- --------------------------------------------------------------------------------
$ 39,000,000 Petrobras International Finance
Co., 4.82%, 9/8/99-9/9/99
(LOC: Barclays Bank PLC) $ 38,960,771
103,590,000 Sand Dollar Funding LLC,
5.12%-5.30%,
9/16/99-9/21/99 (Acquired
7/9/99-8/23/99, Cost
$102,665,022)(2) 103,336,281
---------------
275,996,799
---------------
FINANCIAL SERVICES -- 29.2%
25,000,000 Associates First Capital Corp.,
5.21%, 10/29/99 24,790,153
53,500,000 Credit Suisse First Boston Inc.,
4.92%-5.68%,
9/3/99-2/3/00 (Acquired
5/27/99-8/9/99, Cost
$52,478,620)(2) 52,926,127
32,000,000 ED & F Man Finance, 5.20%,
9/7/99 (LOC: Rabobank
Nederland N.V.) 31,972,267
114,085,000 Falcon Asset Securities Corp.,
4.83%-5.17%,
9/8/99-10/29/99 (AMBAC)
(Acquired 5/4/99-8/6/99,
Cost $112,864,901)(2) 113,736,247
20,000,000 Ford Motor Credit Co. Puerto
Rico, Inc., 5.19%, 10/6/99 19,899,083
23,000,000 General Electric Capital Services,
Inc., 5.11%, 9/22/99 22,931,441
51,300,000 General Electric Financial
Assurance Holdings,
4.84%-5.19%,
9/1/99-10/7/99 51,117,034
25,000,000 Generale Funding LLC, 5.14%,
9/30/99 (Acquired 7/7/99,
Cost $24,696,597)(2) 24,896,486
91,000,000 GMAC Mortgage Corp.,
5.19%-5.38%,
9/1/99-10/1/99 90,796,144
48,000,000 Goldman Sachs Group Inc.,
4.82%-4.94%,
10/27/99-2/4/00 47,402,075
37,000,000 Park Avenue Receivables Corp.,
5.28%-5.37%,
9/10/99-10/7/99 (LOC:
Chase Manhattan Corp.)
(Acquired 8/20/99-8/31/99,
Cost $36,842,135)(2) 36,878,260
14,300,000 PNC Funding, 5.09%, 9/14/99 14,273,716
74,741,000 Quincy Capital Corp.,
5.16%-5.28%,
9/13/99-10/14/99 (LOC:
Bank of America N.T. & S.A.)
(Acquired 7/2/99-8/23/99,
Cost $73,961,089)(2) 74,383,594
6 1-800-345-2021 See Notes to Financial Statements
Prime Money Market--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)
AUGUST 31, 1999 (UNAUDITED)
Principal Amount Value
- --------------------------------------------------------------------------------
$108,129,000 Receivables Capital Corp.,
5.12%-5.22%,
9/1/99-10/8/99 (LOC: Bank
of America N.T. & S.A.)
(Acquired 7/6/99-8/4/99,
Cost $107,115,086)(2) $ 107,796,899
24,000,000 Siemens Capital Corp., 5.07%,
9/29/99 23,905,360
40,000,000 Transamerica Asset Funding Corp.,
5.20%-5.77%,
10/25/99-1/31/00 (Acquired
8/4/99-8/27/99, Cost
$39,311,081)(2) 39,415,605
35,000,000 UBS Finance (Delaware) Inc.,
4.92%-5.24%,
10/12/99-12/6/99 34,594,634
48,000,000 Windmill Funding Corp.,
5.12%-5.86%,
9/3/99-1/5/00 (LOC: ABN
Amro Bank N.V.) (Acquired
7/6/99-8/26/99, Cost
$47,314,440)(2) 47,534,339
---------------
859,249,464
---------------
FOOD & BEVERAGE -- 2.1%
15,000,000 Campbell Soup Co., 4.82%,
12/10/99 14,799,166
47,500,000 Diageo plc, 5.16%-5.54%,
11/18/99-1/27/00
(Acquired 7/2/99-8/2/99,
Cost $46,404,264)(2) 46,737,039
---------------
61,536,205
---------------
INSURANCE -- 4.0%
20,100,000 American Family Financial
Services, Inc., 4.95%-5.18%,
9/7/99-10/25/99 20,068,833
25,000,000 Marsh USA Inc., 5.53%,
2/14/00 24,362,514
20,000,000 Prudential Funding Corp., 4.80%,
9/23/99 19,941,334
20,000,000 SAFECO Corp., 5.17%, 9/20/99
(Acquired 7/12/99-7/13/99,
Cost $19,799,375)(2) 19,945,428
32,900,000 Teachers Insurance, 5.10%,
9/14/99-9/27/99 32,824,860
---------------
117,142,969
---------------
METALS & MINING -- 2.1%
62,500,000 Rio Tinto America Inc.,
4.93%-5.15%,
9/17/99-1/24/00 (Acquired
5/4/99-7/19/99, Cost
$61,122,649)(2) 61,820,725
---------------
PRINTING & PUBLISHING -- 0.7%
21,000,000 Reed Elsevier Inc., 5.25%,
9/29/99 (Acquired 8/23/99,
Cost $20,886,688)(2) 20,914,250
---------------
Principal Amount Value
- --------------------------------------------------------------------------------
RUBBER & PLASTICS -- 1.0%
$ 28,500,000 Formosa Plastics Corp. USA,
5.43%, 1/25/00-1/28/00
(LOC: Bank of America N.T.
& S.A.) $ 27,868,536
---------------
TOTAL COMMERCIAL PAPER 1,711,932,663
---------------
U.S. GOVERNMENT AGENCY DISCOUNT NOTES(3) -- 0.8%
25,000,000 FFCB Discount Notes, 4.75%,
12/27/99 24,614,062
---------------
U.S. GOVERNMENT AGENCY SECURITIES(3) -- 2.2%
25,000,000 FHLB, VRN, 5.59%, 9/1/99,
resets weekly off the 3-month
T-Bill plus 0.60% with no caps 24,987,207
25,000,000 SLMA MTN, 5.05%, 1/19/00 25,000,000
15,000,000 SLMA VRN, 5.65%, 9/7/99,
resets weekly off the 3-month
T-Bill plus 0.63% with no caps 15,000,000
---------------
TOTAL U.S. GOVERNMENT
AGENCY SECURITIES 64,987,207
---------------
CORPORATE DEBT -- 14.9%
CREDIT CARD & TRADE RECEIVABLES -- 0.9%
27,000,000 Corporate Receivables Corp., VRN, 5.30%,
9/15/99, resets monthly
off the 1-month LIBOR
plus 0.02% with no
caps (LOC: Citibank, N.A.) 27,000,000
---------------
FINANCIAL SERVICES -- 5.1%
25,000,000 Abbey National Treasury Services PLC, VRN,
5.24%, 10/22/99, resets
quarterly off the
3-month LIBOR minus 0.07% with no
caps 24,990,225
15,000,000 Chrysler Financial Co. LLC,
9.50%, 12/15/99 15,170,076
25,000,000 General Electric Capital Corp.
MTN, Series A, VRN, 5.26%,
10/13/99, resets quarterly off
the 3-month LIBOR minus 0.05% with
no caps 25,000,000
25,000,000 General Electric Capital Corp.
MTN, Series A, VRN, 5.39%,
11/12/99, resets quarterly off
the 3-month LIBOR minus
0.05% with no caps 25,000,000
14,820,000 General Motors Acceptance Corp.,
8.40%, 10/15/99 14,878,433
46,000,000 Park Avenue Receivables Corp.,
VRN, 5.04%, 9/13/99, resets
monthly off the 1-month LIBOR
plus 0.05% with no caps
(LOC: Chase Manhattan Corp.) 46,000,000
---------------
151,038,734
---------------
See Notes to Financial Statements www.americancentury.com 7
Prime Money Market--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)
AUGUST 31, 1999 (UNAUDITED)
Principal Amount Value
- --------------------------------------------------------------------------------
INSURANCE -- 8.9%
$ 90,000,000 General American Life Insurance
Company, VRN, 5.37%,
9/1/99, resets monthly off the
1-month LIBOR plus 0.20%
with no caps (Acquired
1/3/97-7/7/97,
Cost $90,000,000)(2)(4) $ 90,000,000
45,000,000 Jackson National Life Insurance
Co., VRN, 5.43%, 9/10/99,
resets monthly off the 1-month
LIBOR plus 0.19% with no
caps (Acquired 6/8/99, Cost
$45,000,000)(2) 45,000,000
55,000,000 Transamerica Occidental Life Insurance
Co., VRN, 5.31%, 9/1/99,
resets monthly off the 1-month
LIBOR plus 0.13% with no caps (Acquired
11/4/98, Cost $55,000,000)(2) 55,000,000
23,400,000 Travelers Insurance Company
(The), VRN, 5.25%, 9/9/99,
resets monthly off the 1-month
LIBOR plus 0.04% with no
caps (Acquired 6/4/99,
Cost $23,400,000)(2) 23,400,000
47,000,000 Travelers Insurance Company
(The), VRN, 5.37%, 9/20/99,
resets monthly off the
1-month LIBOR plus 0.04% with
no caps (Acquired 5/19/99,
Cost $47,000,000)(2) 47,000,000
---------------
260,400,000
---------------
TOTAL CORPORATE DEBT 438,438,734
---------------
ASSET-BACKED SECURITIES -- 0.8%
4,025,909 Americredit Automobile
Receivables Trust, Series
1999 A, Class A1 SEQ,
4.98%, 3/12/00 (FSA) 4,025,909
18,000,000 Americredit Automobile
Receivables Trust, Series
1999 C, Class A1A SEQ,
5.67%, 9/5/00 (FSA) 18,000,000
1,469,566 WFS Financial Owner Trust,
Series 1999 A, Class A1 SEQ,
5.01%, 2/20/00 (FSA) 1,469,566
---------------
TOTAL ASSET-BACKED SECURITIES 23,495,475
---------------
CERTIFICATES OF DEPOSIT -- 15.3%
66,500,000 Abbey National Treasury Services
PLC MTN, 5.04%-5.97%,
2/8/00-8/14/00 66,485,240
18,500,000 Bayerische Landesbank
Girozentrale (New York),
4.94%, 11/19/99 18,499,973
45,000,000 Chase Manhattan Bank N.A.,
5.00%-5.61%,
9/8/99-2/3/00 45,000,172
Principal Amount Value
- --------------------------------------------------------------------------------
$ 28,000,000 Commerzbank AG (New York),
5.08%, 9/28/99 $ 28,000,723
75,000,000 National Westminster Bank PLC
(New York), 4.98%-5.06%,
1/10/00-2/9/00 74,992,654
76,000,000 Royal Bank of Canada (New
York), 5.07%-6.01%,
2/10/00-8/14/00 75,985,467
13,000,000 U.S. Bank, NA, 5.35%,
12/13/99 13,000,000
73,500,000 UBS AG, 5.29%-5.46%,
5/19/00-6/5/00 73,476,236
15,000,000 Union Bank of California N.A.,
5.00%, 11/29/99 15,000,000
38,600,000 Westdeutsche Landesbank,
4.90%-5.13%,
9/15/99-10/12/99 38,600,702
---------------
TOTAL CERTIFICATES OF DEPOSIT 449,041,167
---------------
BANK NOTES -- 7.7%
42,000,000 American Express Centurion Bank, VRN, 5.23%,
9/14/99, resets monthly
off the 1-month LIBOR
minus 0.04% with
no caps 42,000,000
25,000,000 Bank of America N.A., 5.08%,
1/28/00 25,000,000
25,000,000 Bank One Corp. MTN, Series B,
VRN, 5.45%, 11/9/99, resets
quarterly off the 3-month
LIBOR plus 0.02% with
no caps 25,000,000
22,000,000 First Union National Bank, VRN,
5.54%, 9/1/99, resets daily off
the Federal Funds rate plus
0.17% with no caps 21,997,057
25,000,000 KeyBank N.A., VRN, 5.27%, 9/23/99, resets
monthly off the 1-month LIBOR minus
0.045% with no caps 24,999,777
30,000,000 U.S. Bank, NA Minnesota, VRN,
5.15%, 9/8/99, resets monthly
off the 1-month LIBOR minus
0.06% with no caps 29,999,403
30,000,000 U.S. Bank, NA Minnesota, VRN, 5.16%,
9/15/99, resets monthly off the
1-month LIBOR minus 0.12% with
no caps 29,987,187
27,500,000 U.S. Bank, NA Minnesota, VRN,
5.23%, 9/15/99, resets
monthly off the 1-month
LIBOR minus 0.05% with
no caps 27,487,028
---------------
TOTAL BANK NOTES 226,470,452
---------------
TOTAL INVESTMENT SECURITIES -- 100.0% $2,938,979,760
===============
8 1-800-345-2021 See Notes to Financial Statements
Prime Money Market--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)
AUGUST 31, 1999 (UNAUDITED)
NOTES TO SCHEDULE OF INVESTMENTS
AMBAC = AMBAC Assurance Corporation
FFCB = Federal Farm Credit Bank
FHLB = Federal Home Loan Bank
FSA = Financial Security Assurance
LIBOR = London Interbank Offered Rate
LOC = Letter of Credit
MTN = Medium Term Note
SLMA = Student Loan Marketing Association
resets = The frequency with which a security's coupon changes, based on current
market conditions or an underlying index. The more frequently a security resets,
the less risk the investor is taking that the coupon will vary significantly
from current market rates.
VRN = Variable Rate Note. Interest reset date is indicated and used in
calculating the weighted average portfolio maturity. Rate shown is effective
August 31, 1999.
(1) The rates for commercial paper are the yield to maturity at purchase.
(2) Security was purchased under Rule 144A or section 4(2) of the Securities Act
of 1933 or is a private placement and, unless registered under the Act or
exempted from registration, may only be sold to qualified institutional
investors. The aggregate value of restricted securities at August 31, 1999,
was $1,204,579,416 which represented 41.6% of net assets. Restricted
securities considered illiquid represent 6.6% of net assets.
(3) The rates for U.S. Government Agency Discount Notes are the yield to
maturity at purchase. The rates for U.S. Government Agency Securities are
the stated coupon rates.
(4) Security was in default at the report date. According to the Securities and
Exchange Commission Regulations, this security is no longer considered an
eligible security without Board of Trustees approval. On August 11, 1999,
the Board of Trustees determined that it was not in the best interest of the
fund to dispose of this security. See Note 2 in the Notes to Financial
Statements.
See Notes to Financial Statements www.americancentury.com 9
Statement of Assets and Liabilities
- --------------------------------------------------------------------------------
This statement breaks down the fund's ASSETS (such as securities, cash, and
other receivables) and LIABILITIES (money owed for securities purchased,
management fees and other liabilities) as of the last day of the reporting
period. Subtracting the liabilities from the assets results in the fund's NET
ASSETS. For each class of shares, the net assets divided by shares outstanding
is the share price, or NET ASSET VALUE PER SHARE. This statement also breaks
down the fund's net assets into capital (shareholder investments) and
performance (investment income and gains/losses).
AUGUST 31, 1999 (UNAUDITED)
ASSETS
Investment securities, at value (amortized cost
and cost for federal income tax purposes) .............. $ 2,938,979,760
Interest receivable ...................................... 15,261,708
---------------
2,954,241,468
---------------
LIABILITIES
Disbursements in excess of demand deposit cash ........... 9,100,905
Payable for investments purchased ........................ 45,296,144
Accrued management fees (Note 2) ......................... 1,468,599
Distribution and service fee payable (Note 2) ............ 1,584
Payable for trustees' fees and expenses .................. 5,483
---------------
55,872,715
---------------
Net Assets ............................................... $ 2,898,368,753
===============
NET ASSETS CONSIST OF:
Capital paid in .......................................... $ 2,898,725,928
Accumulated net realized loss
on investment transactions ............................. (357,175)
---------------
$ 2,898,368,753
===============
Investor Class
Net assets ............................................... $ 2,894,573,642
Shares outstanding ....................................... 2,894,930,799
Net asset value per share ................................ $ 1.00
Advisor Class
Net assets ............................................... $ 3,795,111
Shares outstanding ....................................... 3,795,129
Net asset value per share ................................ $ 1.00
10 1-800-345-2021 See Notes to Financial Statements
Statement of Operations
- --------------------------------------------------------------------------------
This statement shows how the fund's net assets changed during the reporting
period as a result of the fund's operations. In other words, it shows how much
money the fund made or lost as a result of dividend and interest income, fees
and expenses, and investment gains or losses.
FOR THE SIX MONTHS ENDED AUGUST 31, 1999 (UNAUDITED)
INVESTMENT INCOME
Income:
Interest ................................................ $ 73,767,673
------------
Expenses (Note 2):
Management fees ......................................... 8,619,433
Distribution fees -- Advisor Class ...................... 4,575
Service fees -- Advisor Class ........................... 4,575
Trustees' fees and expenses ............................. 51,030
------------
Total expenses ........................................ 8,679,613
------------
Net investment income ................................... 65,088,060
------------
REALIZED LOSS ON INVESTMENTS
Net realized loss on investments ........................ (489)
------------
Net Increase in Net Assets
Resulting from Operations ............................. $ 65,087,571
============
See Notes to Financial Statements www.americancentury.com 11
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
This statement shows how the fund's net assets changed over the past two
reporting periods. It details how much a fund grew or shrank as a result of
operations (as detailed on the previous page for the most recent period), income
and capital gain distributions, and shareholder investments and redemptions.
SIX MONTHS ENDED AUGUST 31, 1999 (UNAUDITED) AND YEAR ENDED FEBRUARY 28, 1999
AUGUST 31, FEBRUARY 28,
Increase in Net Assets 1999 1999
OPERATIONS
Net investment income ...................... $ 65,088,060 $ 106,360,493
Net realized loss on investments ........... (489) (18,522)
--------------- ---------------
Net increase in net assets resulting
from operations .......................... 65,087,571 106,341,971
--------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income:
Investor Class ........................... (65,010,832) (106,293,927)
Advisor Class ............................ (77,228) (66,566)
--------------- ---------------
Decrease in net assets from distributions .. (65,088,060) (106,360,493)
--------------- ---------------
CAPITAL SHARE TRANSACTIONS (NOTE 3)
Net increase in net assets
from capital share transactions .......... 43,274,075 1,437,803,002
--------------- ---------------
Net increase in net assets ................. 43,273,586 1,437,784,480
NET ASSETS
Beginning of period ........................ 2,855,095,167 1,417,310,687
--------------- ---------------
End of period .............................. $ 2,898,368,753 $ 2,855,095,167
=============== ===============
12 1-800-345-2021 See Notes to Financial Statements
Notes to Financial Statements
- --------------------------------------------------------------------------------
AUGUST 31, 1999 (UNAUDITED)
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION -- American Century Investment Trust (the trust) is registered
under the Investment Company Act of 1940 as an open-end management investment
company. Prime Money Market Fund (the fund) is the only fund issued by the
trust. The fund seeks the highest level of current income consistent with
preservation of capital. The fund buys high quality (first tier), U.S. dollar
denominated money market instruments and other short-term obligations of banks,
governments, and corporations. The fund is authorized to issue two classes of
shares: the Investor Class and the Advisor Class. The two classes of shares
differ principally in their respective shareholder servicing and distribution
expenses and arrangements. All shares of the fund represent an equal pro rata
interest in the assets of the class to which such shares belong, and have
identical voting, dividend, liquidation and other rights and the same terms and
conditions, except for class specific expenses and exclusive rights to vote on
matters affecting only individual classes. The following significant accounting
policies are in accordance with generally accepted accounting principles; these
principles may require the use of estimates by fund management.
SECURITY VALUATIONS -- Securities are valued at amortized cost, which
approximates current market value. When valuations are not readily available,
securities are valued at fair value as determined in accordance with procedures
adopted by the Board of Trustees.
SECURITY TRANSACTIONS -- Security transactions are accounted for as of the
trade date. Net realized gains and losses are determined on the identified cost
basis, which is also used for federal income tax purposes.
INVESTMENT INCOME -- Interest income is recorded on the accrual basis and
includes accretion of discounts and amortization of premiums. Discounts and
premiums are accreted/amortized daily on a straight-line basis.
INCOME TAX STATUS -- It is the fund's policy to distribute all taxable
income and to otherwise qualify as a regulated investment company under the
provisions of the Internal Revenue Code. Accordingly, no provision has been made
for federal or state income taxes.
DISTRIBUTIONS -- Distributions from net investment income are declared and
credited daily and distributed monthly. The fund does not expect to realize any
long-term capital gains, and accordingly, does not expect to pay any capital
gains distributions.
At February 28, 1999, the fund had accumulated net realized capital loss
carryovers of $356,686 (expiring 2001 through 2007) which may be used to offset
future taxable gains.
ADDITIONAL INFORMATION -- Funds Distributor, Inc. (FDI) is the trust's
distributor. Certain officers of FDI are also officers of the trust.
- --------------------------------------------------------------------------------
2. TRANSACTIONS WITH RELATED PARTIES
The trust has entered into a Management Agreement with American Century
Investment Management, Inc. (ACIM), under which ACIM provides the fund with
investment advisory and management services in exchange for a single, unified
management fee per class. The Agreement provides that all expenses of the fund,
except brokerage, taxes, portfolio insurance, interest, fees and expenses of the
Trustees who are not considered "interested persons" as defined in the
Investment Company Act of 1940 (including counsel fees) and extraordinary
expenses, will be paid by ACIM. The fee is calculated daily and paid monthly. It
consists of an Investment Category Fee based on the average net assets of the
funds in a specific fund's investment category and a Complex Fee based on the
average net assets of all the funds managed by ACIM. The rates for the
Investment Category Fee range from 0.2570% to 0.3700% and the rates for the
Complex Fee (Investor Class) range from 0.2900% to 0.3100%. The Advisor Class is
0.2500% less at each point within the Complex Fee range. For the six months
ended August 31, 1999, the effective annual Investor Class management fee was
0.60%.
The Board of Trustees has adopted the Advisor Class Master Distribution and
Shareholder Services Plan (the plan), pursuant to Rule 12b-1 of the Investment
Company Act of 1940. The plan provides that the fund will pay ACIM an annual
distribution fee equal to 0.25% and annual service fee equal to 0.25%. The fees
are computed daily and paid monthly based on the Advisor Class's average daily
closing net assets during the previous month. The distribution fee provides
compensation for distribution expenses incurred by financial intermediaries in
connection with distributing shares of the Advisor Class including, but not
limited to, payments to brokers, dealers, and financial institutions that have
entered into sales agreements with respect to shares of the fund. The service
fee provides compensation for shareholder and administrative services rendered
by ACIM, its affiliates or independent third party providers. Fees incurred
under the plan during the six months ended August 31, 1999 were $9,150.
Certain officers and Trustees of the trust are also officers and/or
directors, and, as a group, controlling stockholders of American Century
Companies, Inc., the parent of the trust's investment manager, ACIM, and the
trust's transfer agent, American Century Services Corporation.
On August 23, 1999, the fund and American Century Companies (ACC) entered
into an agreement allowing the fund to sell to ACC or ACC to acquire from the
fund the General American Life Insurance Company security (the security), at
par, at each parties discretion. On September 15, 1999, Metropolitan Life
Insurance Company (MetLife) acquired General American Life Insurance. Upon
recommendation from the Board of Trustees, the fund entered into an agreement
with MetLife in which the security was exchanged for substantially similar
securities issued by MetLife. Full payment of all principal plus accrued
interest through September 30, 1999, was received by the fund from MetLife on
October 1, 1999.
www.americancentury.com 13
Notes to Financial Statements
- --------------------------------------------------------------------------------
(Continued)
AUGUST 31, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
3. CAPITAL SHARE TRANSACTIONS
Transactions in shares of the fund were as follows (unlimited number of shares
authorized):
SHARES AMOUNT
INVESTOR CLASS
Six months ended August 31, 1999
Sold ....................................... 2,149,189,422 $ 2,149,189,422
Issued in reinvestment of distributions .... 63,410,039 63,410,039
Redeemed ................................... (2,169,905,635) (2,169,905,635)
--------------- ---------------
Net increase ............................... 42,693,826 $ 42,693,826
=============== ===============
Year ended February 28, 1999
Sold ....................................... 4,559,290,594 $ 4,559,290,594
Issued in connection with acquisition
(Note 4) ................................ 1,201,153,326 1,201,069,659
Issued in reinvestment of distributions .... 100,856,205 100,856,205
Redeemed ................................... (4,426,628,336) (4,426,628,336)
--------------- ---------------
Net increase ............................... 1,434,671,789 $ 1,434,588,122
=============== ===============
ADVISOR CLASS
Six months ended August 31, 1999
Sold ....................................... 1,825,659 $ 1,825,659
Issued in reinvestment of distributions .... 77,968 77,968
Redeemed ................................... (1,323,378) (1,323,378)
--------------- ---------------
Net increase ............................... 580,249 $ 580,249
=============== ===============
Period ended February 28, 1999(1)
Sold ....................................... 1,319,681 $ 1,319,681
Issued in connection with acquisition
(Note 4) ................................ 2,242,355 2,242,355
Issued in reinvestment of distributions .... 65,984 65,984
Redeemed ................................... (413,140) (413,140)
--------------- ---------------
Net increase ............................... 3,214,880 $ 3,214,880
=============== ===============
(1) August 28, 1998 (acquisition date --see Note 4) through February 28, 1999.
- --------------------------------------------------------------------------------
4. REORGANIZATION PLAN
On August 28, 1998, Prime Money Market Fund (Prime) acquired all of the net
assets of the American Century - Benham Cash Reserve Fund (Cash Reserve),
pursuant to a plan of reorganization approved by the acquired fund's
shareholders on August 7, 1998. Prime is the surviving fund for the purposes of
maintaining the financial statements and performance history in the
post-reorganization.
The acquisition was accomplished by a tax-free exchange of 1,201,153,326
shares of Prime Investor Class for 1,201,153,326 shares of Cash Reserve Investor
Class outstanding on August 28, 1998 and 2,242,355 shares of Prime Advisor Class
for 2,242,355 shares of Cash Reserve Advisor Class outstanding on August 28,
1998. Immediately before the acquisition, the net assets of Prime were
$1,641,758,871, consisting only of the Investor Class. The net assets of Cash
Reserve immediately before the acquisition were $1,203,312,014, consisting of
$1,201,069,659 Investor Class net assets and $2,242,355 Advisor Class net
assets. Immediately after the acquisition, the combined net assets of the fund
were $2,845,070,885, which consisted of $2,842,828,530 Investor Class net assets
and $2,242,355 Advisor Class net assets.
Prime acquired capital loss carryforwards of $83,667. These acquired capital
loss carryforwards are subject to limitations on their use under the Internal
Revenue Code, as amended.
14 1-800-345-2021
Prime Money Market--Financial Highlights
- --------------------------------------------------------------------------------
This table itemizes investment results and distributions on a per-share basis to
illustrate share price changes for each of the last five fiscal years (or less,
if the share class is not five years old). It also includes several key
statistics for each reporting period, including TOTAL RETURN, INCOME RATIO (net
income as a percentage of average net assets), EXPENSE RATIO (operating expenses
as a percentage of average net assets), and PORTFOLIO TURNOVER (a gauge of the
fund's trading activity).
<TABLE>
<CAPTION>
FOR A SHARE OUTSTANDING THROUGHOUT THE YEARS ENDED FEBRUARY 28 (EXCEPT AS NOTED)
Investor Class
1999(1) 1999 1998 1997 1996(2) 1995
PER-SHARE DATA
Net Asset Value,
<S> <C> <C> <C> <C> <C> <C>
Beginning of Period ...........$ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------------- ------------- ------------- ------------- ------------- -------------
Income From Investment Operations
Net Investment Income ......... 0.02 0.05 0.05 0.05 0.06 0.05
------------- ------------- ------------- ------------- ------------- -------------
Distributions
From Net Investment Income .... (0.02) (0.05) (0.05) (0.05) (0.06) (0.05)
------------- ------------- ------------- ------------- ------------- -------------
Net Asset Value, End of Period ..$ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
============= ============= ============= ============= ============= =============
Total Return(3) ............... 2.27% 5.07% 5.29% 5.04% 5.60% 4.93%
RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses
to Average Net Assets ......... 0.60%(4) 0.58% 0.50% 0.50% 0.48% 0.04%
Ratio of Operating Expenses
to Average Net Assets
(Before Expense Waiver) ....... 0.60%(4) 0.60% 0.63% 0.63% 0.62% 0.71%
Ratio of Net Investment Income
to Average Net Assets ......... 4.47%(4) 4.91% 5.17% 4.92% 5.43% 5.28%
Ratio of Net Investment Income
to Average Net Assets
(Before Expense Waiver) ....... 4.47%(4) 4.89% 5.04% 4.79% 5.29% 4.61%
Net Assets, End of Period
(in thousands) ................$ 2,894,574 $ 2,851,880 $ 1,417,311 $ 1,211,990 $ 1,270,653 $ 1,509,863
</TABLE>
(1) Six months ended August 31, 1999 (unaudited).
(2) Year ended February 29, 1996.
(3) Total return assumes reinvestment of dividends and capital gains
distributions, if any. Total returns for periods less than one year are not
annualized.
(4) Annualized.
See Notes to Financial Statements www.americancentury.com 15
Prime Money Market--Financial Highlights
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD INDICATED
Advisor Class
1999(1) 1999(2)
PER-SHARE DATA
Net Asset Value, Beginning of Period ......... $ 1.00 $ 1.00
--------- ---------
Income From Investment Operations
Net Investment Income ...................... 0.02 0.02
--------- ---------
Distributions
From Net Investment Income ................. (0.02) (0.02)
--------- ---------
Net Asset Value, End of Period ............... $ 1.00 $ 1.00
========= =========
Total Return(3) ............................ 2.15% 2.31%
RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses
to Average Net Assets ...................... 0.85%(4) 0.85%(4)
Ratio of Net Investment Income
to Average Net Assets ...................... 4.22%(4) 4.53%(4)
Net Assets, End of Period
(in thousands) ............................. $ 3,795 $ 3,215
(1) Six months ended August 31, 1999 (unaudited).
(2) August 28, 1998 (acquisition date -- see Note 4) through February 28, 1999.
(3) Total return assumes reinvestment of dividends and capital gains
distributions, if any. Total returns for periods less than one year are not
annualized.
(4) Annualized.
16 1-800-345-2021 See Notes to Financial Statements
Share Class and Retirement Account Information
- --------------------------------------------------------------------------------
SHARE CLASSES
Two classes of shares are authorized for sale by the fund: Investor Class
and Advisor Class.
INVESTOR CLASS shareholders do not pay any commissions or other fees for
purchase of fund shares directly from American Century. Investors who buy
Investor Class shares through a broker-dealer may be required to pay the
broker-dealer a transaction fee.
ADVISOR CLASS shares are sold through banks, broker-dealers, insurance
companies and financial advisors. Advisor Class shares are subject to a 0.50%
Rule 12b-1 service and distribution fee. Half of that fee is available to pay
for recordkeeping and administrative services, and half is available to pay for
distribution services provided by the financial intermediary through which the
Advisor Class shares are purchased. The total expense ratio of the Advisor Class
shares is 0.25% higher than the total expense ratio of the Investor Class
shares.
Both classes of shares represent a pro rata interest in the funds and
generally have the same rights and preferences.
RETIREMENT ACCOUNT INFORMATION
As required by law, any distributions you receive from an IRA and certain
403(b) distributions [not eligible for rollover to an IRA or to another 403(b)
account] are subject to federal income tax withholding at the rate of 10% of the
total amount withdrawn, unless you elect not to have withholding apply. If you
don't want us to withhold on this amount, you may send us a written notice not
to have the federal income tax withheld. Your written notice is valid from the
date of receipt at American Century. Even if you plan to roll over the amount
you withdraw to another tax-deferred account, the withholding rate still applies
to the withdrawn amount unless we have received a written notice not to withhold
federal income prior to the withdrawal.
When you plan to withdraw, you may make your election by completing our
Exchange/Redemption form or an IRS Form W-4P. Call American Century for either
form. Your written election is valid from the date of receipt at American
Century. You may revoke your election at any time by sending a written notice to
us.
Remember, even if you elect not to have income tax withheld, you are liable
for paying income tax on the taxable portion of your withdrawal. If you elect
not to have income tax withheld or you don't have enough income tax withheld,
you may be responsible for payment of estimated tax. You may incur penalties
under the estimated tax rules if your withholding and estimated tax payments are
not sufficient.
www.americancentury.com 17
Background Information
- --------------------------------------------------------------------------------
INVESTMENT PHILOSOPHY AND POLICIES
American Century offers 38 fixed-income funds, ranging from money market
funds to long-term bond funds and including both taxable and tax-exempt funds.
Each fund is managed to provide a "pure play" on a specific sector of the
fixed-income market.
To ensure adherence to this principle, the basic structure of each fund's
portfolio is tied to a specific market index. Fund managers attempt to add value
by making modest portfolio adjustments based on their analysis of prevailing
market conditions.
Investment decisions are made by management teams, which meet regularly to
discuss market analysis and investment strategies.
In addition to these principles, each fund has its own investment policies
PRIME MONEY MARKET seeks to provide interest income by investing in a
diversified portfolio of short-term money market securities. The fund must
maintain a weighted average maturity of 90 days or less.
An investment in Prime Money Market is neither insured nor guaranteed by
the FDIC or any other government agency. Yields will fluctuate, and although the
fund seeks to preserve the value of your investment at $1 per share, it is
possible to lose money by investing in the fund.
COMPARATIVE INDICES
The following index is used in the report for fund performance comparisons.
It is not an investment product available for purchase.
The 90-DAY TREASURY BILL INDEX is derived from secondary market interest
rates as published by the Federal Reserve Bank.
LIPPER RANKINGS
LIPPER INC. is an independent mutual fund ranking service that groups funds
according to their investment objectives. Rankings are based on average annual
returns for each fund in a given category for the periods indicated. Rankings
are not included for periods less than one year.
The funds in Lipper's MONEY MARKET INSTRUMENT FUNDS category intend to
maintain a stable net asset value and invest in high-quality financial
instruments rated in the top two grades with dollar-weighted average maturities
of less than 90 days.
CREDIT RATING GUIDELINES
Credit ratings are issued by independent research companies such as
Standard & Poor's and Moody's. They are based on an issuer's financial strength
and ability to pay interest and principal in a timely manner.
A-1 (which includes A-1+) is Standard & Poor's highest credit rating for
short-term securities. Here are the most common short-term credit ratings and
their definitions:
* A-1+: extremely strong ability to meet financial obligations.
* A-1: strong ability to meet financial obligations.
* A-2: satisfactory ability to meet financial obligations.
It's important to note that credit ratings are subjective, reflecting the
opinions of the rating agencies; they are not absolute standards of quality.
[left margin]
INVESTMENT TEAM LEADERS
Portfolio Managers
DENISE TABACCO
JOHN WALSH
Credit Research Manager
GREG AFIESH
18 1-800-345-2021
Glossary
- --------------------------------------------------------------------------------
RETURNS
* TOTAL RETURN figures show the overall percentage change in the value of a
hypothetical investment in the fund and assume that all of the fund's
distributions are reinvested.
* AVERAGE ANNUAL RETURNS illustrate the annually compounded returns that would
have produced the fund's cumulative total returns if the fund's performance had
been constant over the entire period. Average annual returns smooth out
variations in a fund's return; they are not the same as fiscal year-by-year
results. For fiscal year-by-year returns, please refer to the "Financial
Highlights" on pages 15-16.
YIELDS
* 7-DAY CURRENT YIELD is calculated based on the income generated by an
investment in the fund over a seven-day period and is expressed as an annual
percentage rate.
* 7-DAY EFFECTIVE YIELD is calculated similarly, although this figure is
slightly higher than the fund's 7-Day Current Yield because of the effects of
compounding. The 7-Day Effective Yield assumes that income earned from the
fund's investments is reinvested and generating additional income.
PORTFOLIO STATISTICS
* NUMBER OF ISSUERS -- the number of entities that issued securities held by the
fund on a given date.
* WEIGHTED AVERAGE MATURITY (WAM) -- a measure of the sensitivity of a
fixed-income portfolio to interest rate changes. WAM indicates the average time
until the securities in the portfolio mature, weighted by dollar amount. The
longer the WAM, the more interest rate exposure and sensitivity the portfolio
has.
* EXPENSE RATIO -- the operating expenses of the fund, expressed as a percentage
of average net assets. Shareholders pay an annual fee to the investment manager
for investment advisory and management services. The expenses and fees are
deducted from fund income, not from each shareholder account. (See Note 2 in the
Notes to Financial Statements.)
TYPES OF MONEY MARKET SECURITIES
* ASSET-BACKED SECURITIES -- debt securities that represent ownership in a pool
of receivables, such as credit card debt, auto loans, or mortgages.
* CERTIFICATES OF DEPOSIT (CDS) -- CDs represent a bank's obligation to repay
money deposited with it for a specified period of time. Different types of CDs
have different issuers. For example, Yankee CDs are issued by U.S. branches of
foreign banks, and Eurodollar CDs are issued in London by Canadian, European,
and Japanese banks.
* COMMERCIAL PAPER (CP) -- short-term debt issued by large corporations to raise
cash and to cover current expenses in anticipation of future revenues. The
maximum maturity for CP is 270 days, although most CP is issued in a one- to
50-day maturity range. CP rates generally track those of other widely traded
money market instruments, such as Treasury bills and certificates of deposit,
but they are also influenced by the maturity date and the size and credit rating
of the issuer.
* VARIABLE-RATE NOTES (VRNS) -- debt securities whose interest rates change when
a designated base rate changes. The base rate is often the federal funds rate,
the 90-day Treasury bill rate, or the London Interbank Offered Rate (LIBOR).
VRNs are considered derivatives because they "derive" their interest rates from
their designated base rates. However, VRNs are not "risky" derivatives--their
behavior is similar to that of their designated base rates. The SEC has
recognized this similarity and does not consider VRNs to be inappropriate
investments for money market funds.
* U.S. GOVERNMENT AGENCY SECURITIES -- debt securities issued by U.S. government
agencies (such as the Federal Farm Credit Bank and the Federal Home Loan Bank).
Some agency securities are backed by the full faith and credit of the U.S.
government, while most are guaranteed only by the issuing agency. These
securities are issued with maturities ranging from three months to 30 years.
Money market funds invest in these securities when they have remaining
maturities of 13 months or less.
www.americancentury.com 19
Glossary
- --------------------------------------------------------------------------------
(Continued)
FUND CLASSIFICATIONS
INVESTMENT OBJECTIVE
The investment objective may be based on the fund's objective as stated in
its prospectus or fund profile, or the fund's categorization by independent
rating organizations based on its management style.
* CAPITAL PRESERVATION -- offers taxable and tax-free money market funds for
relative stability of principal and liquidity.
* INCOME -- offers funds that can provide current income and competitive yields,
as well as a strong and stable foundation and generally lower volatility levels
than stock funds.
* GROWTH & INCOME -- offers funds that emphasize both growth and income provided
by either dividend-paying equities or a combination of equity and fixed-income
securities.
* GROWTH -- offers funds with a focus on capital appreciation and long-term
growth, generally providing high return potential with corresponding high price
fluctuation risk.
RISK
The classification of funds by risk category is based on quantitative
historical measures as well as qualitative prospective measures. It is not
intended to be a precise indicator of future risk or return levels. The degree
of risk within each category can vary significantly, and some fund returns have
historically been higher than more aggressive funds or lower than more
conservative funds. Please be aware that the fund's category may change over
time. Therefore, it is important that you read a fund's prospectus or fund
profile carefully before investing to ensure its objectives, policies and risk
potential are consistent with your needs.
* CONSERVATIVE -- these funds generally provide lower return potential with
either low or minimal price fluctuation risk.
* MODERATE -- these funds generally provide moderate return potential with
moderate price fluctuation risk.
* AGGRESSIVE -- these funds generally provide high return potential with
corresponding high price fluctuation risk.
20 1-800-345-2021
[inside back cover]
===============================================================================
INVESTMENT OBJECTIVE - CAPITAL PRESERVATION
===============================================================================
RISK LEVEL - CONSERVATIVE
TAXABLE MONEY MARKETS TAX-FREE MONEY MARKETS
Premium Capital Reserve FL Municipal Money Market
Prime Money Market CA Municipal Money Market
Premium Government Reserve CA Tax-Free Money Market
Government Agency Tax-Free Money Market
Money Market
Capital Preservation
===============================================================================
INVESTMENT OBJECTIVE - INCOME
===============================================================================
RISK LEVEL - AGGRESSIVE
TAXABLE BONDS TAX-FREE BONDS
Target 2025* CA High-Yield Municipal
Target 2020* High-Yield Municipal
Target 2015*
Target 2010*
High-Yield
International Bond
RISK LEVEL - MODERATE
TAXABLE BONDS TAX-FREE BONDS
Long-Term Treasury CA Long-Term Tax-Free
Target 2005* Long-Term Tax-Free
Bond CA Insured Tax-Free
Premium Bond
RISK LEVEL - CONSERVATIVE
TAXABLE BONDS TAX-FREE BONDS
Intermediate-Term Bond CA Intermediate-Term Tax-Free
Intermediate-Term Treasury AZ Intermediate-Term Municipal
GNMA FL Intermediate-Term Municipal
Inflation-Adjusted Treasury Intermediate-Term Tax-Free
Limited-Term Bond CA Limited-Term Tax-Free
Target 2000* Limited-Term Tax-Free
Short-Term Government
Short-Term Treasury
===============================================================================
INVESTMENT OBJECTIVE - GROWTH AND INCOME
===============================================================================
RISK LEVEL - AGGRESSIVE
DOMESTIC EQUITY
Small Cap Quantitative
Small Cap Value
RISK LEVEL - MODERATE
ASSET ALLOCATION/BALANCED DOMESTIC EQUITY SPECIALTY
Strategic Allocation -- Equity Growth Utilities
Aggressive Equity Index Real Estate
Balanced Tax-Managed Value
Strategic Allocation -- Income & Growth
Moderate Value
Strategic Allocation -- Large Cap Value
Conservative Equity Income
===============================================================================
INVESTMENT OBJECTIVE - GROWTH
===============================================================================
RISK LEVEL - AGGRESSIVE
DOMESTIC EQUITY SPECIALTY INTERNATIONAL
New Opportunities Global Gold Emerging Markets
Giftrust(reg.tm) International Discovery
Vista International Growth
Heritage Global Growth
Growth
Ultra(reg.tm)
Select
RISK LEVEL - MODERATE
SPECIALTY
Global Natural Resources
The investment objective may be based on the fund's objective as stated in its
prospectus or fund profile, or the fund's categorization by independent rating
organizations based on its management style.
The classification of funds by risk category is based on quantitative historical
measures as well as qualitative prospective measures. It is not intended to be a
precise indicator of future risk or return levels. The degree of risk within
each category can vary significantly, and some fund returns have historically
been higher than more aggressive funds or lower than more conservative funds.
Please be aware that a fund's category may change over time. Therefore, it is
important that you read a fund's prospectus or fund profile carefully before
investing to ensure its objectives, policies and risk potential are consistent
with your needs.For a definition of fund categories, see the Glossary.
* While listed within the Income investment objective, the Target funds do not
pay current dividend income. Income dividends are distributed once a year in
December. The Target funds are listed in all three risk categories due to the
dramatic price volatility investors may experience during certain market
conditions. If held to their target dates, however, they can offer a
conservative, dependable way to invest for a specific time horizon.
Please call 1-800-345-2021 for a prospectus or profile on any American Century
fund. These documents contain important information including charges and
expenses, and you should read them carefully before you invest or send money.
[back cover]
[american century logo(reg.sm)]
American
Century
P.O. BOX 419200
KANSAS CITY, MISSOURI 64141-6200
WWW.AMERICANCENTURY.COM
INVESTOR RELATIONS
1-800-345-2021 OR 816-531-5575
AUTOMATED INFORMATION LINE
1-800-345-8765
FAX: 816-340-7962
TELECOMMUNICATIONS DEVICE FOR THE DEAF
1-800-634-4113 OR 816-444-3485
BUSINESS, NOT-FOR-PROFIT, EMPLOYER-SPONSORED RETIREMENT PLANS
1-800-345-3533
BANKS AND TRUST COMPANIES, BROKER-DEALERS,
FINANCIAL ADVISORS, INSURANCE COMPANIES
1-800-345-6488
AMERICAN CENTURY INVESTMENT TRUST
INVESTMENT MANAGER AMERICAN CENTURY INVESTMENT MANAGEMENT, INC.
KANSAS CITY, MISSOURI
THIS REPORT AND THE STATEMENTS IT CONTAINS ARE SUBMITTED FOR THE GENERAL
INFORMATION OF OUR SHAREHOLDERS. THE REPORT IS NOT AUTHORIZED FOR DISTRIBUTION
TO PROSPECTIVE INVESTORS UNLESS PRECEDED OR ACCOMPANIED BY AN EFFECTIVE
PROSPECTUS.
- --------------------------------------------------------------------------------
American Century Investments BULK RATE
P.O. Box 419200 U.S. POSTAGE PAID
Kansas City, MO 64141-6200 AMERICAN CENTURY
www.americancentury.com COMPANIES
Funds Distributor, Inc. is
9910 the distributor of American Century funds
SH-SAN-18086 (c)1999 American Century Services Corporation
