STATEMENT OF ADDITIONAL INFORMATION
[company logo]
American
Century(sm)
SEPTEMBER 3, 1996
REVISED JANUARY 1, 1997
AMERICAN
CENTURY
GROUP
Capital Manager
[front cover]
STATEMENT OF ADDITIONAL INFORMATION
SEPTEMBER 3, 1996
REVISED JANUARY 1, 1997
AMERICAN CENTURY MANAGER FUNDS
This Statement is not a prospectus but should be read in conjunction with the
Fund's current Prospectus dated September 3, 1996, revised January 1, 1997. The
Fund's annual report for the fiscal year ended November 30, 1995, 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 ....................................12
Portfolio Transactions .....................................14
Valuation of Portfolio Securities ..........................14
Performance ................................................14
Taxes ......................................................16
About American Century Manager Funds .......................18
Trustees and Officers ......................................18
Investment Advisory Services ...............................20
Transfer and Administrative Services .......................21
Distribution of Fund Shares ................................21
Direct Fund Expenses .......................................21
Expense Limitation Agreement ...............................21
Additional Purchase and Redemption Information .............21
Other Information ..........................................22
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.
U.S. GOVERNMENT SECURITIES
U.S. government securities include bills, notes, and bonds issued by the
U.S. Treasury and securities issued or guaranteed by agencies or
instrumentalities of the U.S. government. Some U.S. government securities are
supported by the direct full faith and credit pledge of the U.S. government;
others are supported by the right of the issuer to borrow from the U.S.
Treasury; others, such as securities issued by the Federal National Mortgage
Association, are supported by the discretionary authority of the U.S.
government to purchase the agencies' obligations; and others are supported
only by the credit of the issuing or guaranteeing instrumentality. There is no
assurance that the U.S. government will provide financial support to an
instrumentality it sponsors when it is not obligated by law to do so.
REPURCHASE AGREEMENTS
In a repurchase agreement (or "repo"), the Fund buys a security at one
price and simultaneously agrees to resell it 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.
The advisor attempts to minimize the risks associated with repurchase
agreements by adhering to the following criteria:
(1) Limiting the securities acquired and held by the Fund under repurchase
agreements to U.S. government securities;
(2) Entering into repurchase agreements only with primary dealers in U.S.
government securities (including bank affiliates) who are deemed to be
creditworthy under guidelines established by a nationally recognized
statistical rating organization (a "rating agency") and approved by the
Fund's Board of Trustees;
(3) Monitoring the creditworthiness of all firms involved in repurchase
agreement transactions;
(4) Requiring the seller to establish and maintain collateral equal to 102% of
the agreed-upon resale price, provided, however, that the Board of Trustees
may determine that a broker-dealer's credit standing is sufficient to allow
collateral to fall to as low as 101% of the agreed-upon resale price before
the broker-dealer deposits additional securities with the Fund's custodian
or subcustodian;
(5) Investing no more than 15% of the Fund's net assets in repurchase
agreements that mature in more than seven days (together with any other
illiquid security the Fund holds); and
(6) Taking delivery of all securities subject to repurchase agreement and
holding them in an account at the Fund's custodian bank.
The Fund has received permission from the Securities and Exchange
Commission ("SEC") to participate in pooled repurchase agreements collateralized
by U.S. government securities with other mutual funds advised by the Fund's
investment advisor, Benham Management Corporation (the "Manager"). Pooled repos
are expected to increase the income the Fund can earn from repo transactions
without increasing the risks associated with these transactions.
WHEN-ISSUED AND FORWARD COMMITMENT AGREEMENTS
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 15 to 45 days later).
When purchasing securities on a when-issued or forward commitment basis,
the Fund assumes the rights and risks of ownership, including the risks of price
and yield fluctuations. While the Fund will make commitments to purchase or sell
securities on a when-issued or forward commitment basis with the intention of
actually receiving or delivering them, it may nevertheless sell the securities
before the settle-
2 American Century Investments
ment date if it is deemed advisable as a matter of investment strategy.
In purchasing securities on a when-issued or forward commitment basis, the
Fund will establish and maintain until the settlement date a segregated account
consisting of cash, U.S. government securities, and other liquid high-quality
debt securities in an amount sufficient to meet the purchase price. When the
time comes to pay for when-issued securities, the Fund will meet its obligations
with available cash, through the sale of securities, or, although it would not
normally expect to do so, through sales of 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 gains or losses.
These types of transactions are executed simultaneously in what are known
as "dollar-roll" or "cash-and-carry" transactions. For example, a broker-dealer
may seek to purchase a particular security that the Fund owns. The Fund will
sell that security to the broker-dealer and simultaneously enter into a forward
commitment agreement to buy it back at a future date. This type of transaction
generates income for the Fund if the dealer is willing to execute the
transaction at a favorable price in order to acquire a specific security.
As an operating policy, the Fund will not commit more than 35% of its total
assets to when-issued or forward commitment agreements. If fluctuations in the
value of securities held cause more than 35% of the Fund's total assets to be
committed under when-issued or forward commitment agreements, the Manager need
not sell such commitment, but it will be restricted from entering into further
agreements on behalf of the Fund until the percentage of assets committed to
such agreements is reduced to 35%. In addition, as an operating policy, the Fund
will not enter into when-issued or forward commitment transactions with
settlement dates exceeding 120 days.
MORTGAGE-BACKED SECURITIES
GENERAL. A mortgage-backed security represents an ownership interest in a
pool of mortgage loans. The loans are made by financial institutions to finance
home and other real estate purchases. As the loans are repaid, investors receive
payments of both interest and principal.
Like fixed-income securities, such as U.S. Treasury bonds, mortgage-backed
securities pay a stated rate of interest over the life of the security. However,
unlike a bond, which returns principal to the investor in one lump sum at
maturity, mortgage-backed securities return principal to the investor in
increments over the life of the security.
Because the timing and speed of principal repayments vary, the cash flow on
mortgage securities is irregular. If mortgage holders sell their homes,
refinance their loans, prepay their mortgages, or default on their loans, the
principal is distributed pro rata to investors.
As with other fixed-income securities, the prices of mortgage securities
fluctuate in response to changing interest rates; when interest rates fall, the
prices of mortgage securities rise, and vice versa. Changing interest rates have
additional significance for mortgage-backed securities investors, however,
because they influence prepayment rates (the rates at which mortgage holders
prepay their mortgages), which in turn affect the yields on mortgage-backed
securities. When interest rates decline, prepayment rates generally increase.
Mortgage holders take advantage of the opportunity to refinance their mortgages
at lower rates with lower monthly payments. When interest rates rise, mortgage
holders are less inclined to refinance their mortgages. The effect of prepayment
activity on yield depends on whether the mortgage-backed security was purchased
at a premium or at a discount.
The Fund may get back principal sooner than it expected because of
accelerated prepayments. Under these circumstances, the Fund might have to
reinvest returned principal at rates lower than it would have earned if
principal payments were made on schedule. Conversely, a mortgage-backed security
may exceed its anticipated life if prepayment rates decelerate unexpectedly.
Under these circumstances, the Fund might miss an opportunity to earn interest
at higher prevailing rates.
GINNIE MAE CERTIFICATES. The Government National Mortgage Association
("GNMA" or "Ginnie Mae") is a wholly owned corporate instrumentality of the
United States within the Department of Housing and Urban Development. The
National Housing Act
Statement of Additional Information 3
of 1934 ("Housing Act"), as amended, authorizes Ginnie Mae to guarantee the
timely payment of interest and repayment of principal on certificates that are
backed by a pool of mortgage loans insured by the Federal Housing Administration
under the Housing Act, or by Title V of the Housing Act of 1949 (FHA Loans), or
guaranteed by the Veterans' Administration under the Servicemen's Readjustment
Act of 1944 (VA Loans), as amended, or by pools of other eligible mortgage
loans. The Housing Act provides that the full faith and credit of the U.S.
government is pledged to the payment of all amounts that may be required to be
paid under any guarantee. Ginnie Mae has unlimited authority to borrow from the
U.S. Treasury in order to meet its obligations under this guarantee.
Ginnie Mae certificates represent a pro rata interest in one or more pools
of the following types of mortgage loans: (i) fixed-rate level payment mortgage
loans; (ii) fixed-rate graduated payment mortgage loans ("GPM"s); (iii)
fixed-rate growing equity mortgage loans ("GEM"s); (iv) fixed-rate mortgage
loans secured by manufactured (mobile) homes ("MH"s); (v) mortgage loans on
multifamily residential properties under construction ("CLC"s); (vi) mortgage
loans on completed multifamily projects ("PLC"s); (vii) fixed-rate mortgage
loans that use escrowed funds to reduce the borrower's monthly payments during
the early years of the mortgage loans (buydown mortgage loans); and (viii)
mortgage loans that provide for payment adjustments based on periodic changes in
interest rates or in other payment terms of the mortgage loans.
FANNIE MAE CERTIFICATES. The Federal National Mortgage Association ("FNMA"
or "Fannie Mae") is a federally chartered and privately owned corporation
organized and existing under the Federal National Mortgage Association Charter
Act. Fannie Mae was originally established in 1938 as a U.S. government agency
to provide supplemental liquidity to the mortgage market and was reorganized as
a stockholder-owned and privately managed corporation by legislation enacted in
1968. Fannie Mae acquires capital from investors who would not ordinarily invest
in mortgage loans directly and thereby expands the total amount of funds
available for housing. This money is used to buy home mortgage loans from local
lenders, which replenishes the supply of capital for additional mortgage
lending.
Fannie Mae certificates represent a pro rata interest in one or more pools
of FHA Loans, VA Loans, or, most commonly, conventional mortgage loans (i.e.,
mortgage loans that are not insured or guaranteed by a governmental agency) of
the following types: (i) fixed-rate level payment mortgage loans; (ii)
fixed-rate growing equity mortgage loans; (iii) fixed-rate graduated-payment
mortgage loans; (iv) adjustable-rate mortgage loans; and (v) fixed-rate mortgage
loans secured by multifamily projects.
Fannie Mae certificates entitle the registered holder to receive amounts
representing a pro rata interest in scheduled principal and interest payments
(at the certificate's pass-through rate, which is net of any servicing and
guarantee fees on the underlying mortgage loans), any principal prepayments, and
a proportionate interest in the full principal amount of any foreclosed or
otherwise liquidated mortgage loan. The full and timely payment of interest and
repayment of principal on each Fannie Mae certificate is guaranteed by Fannie
Mae; this guarantee is not backed by the full faith and credit of the U.S.
government.
FREDDIE MAC CERTIFICATES. The Federal Home Loan Mortgage Corporation
("FHLMC" or "Freddie Mac") is a corporate instrumentality of the United States
created pursuant to the Emergency Home Finance Act of 1970 ("FHLMC Act"), as
amended. Freddie Mac was established primarily for the purpose of increasing the
availability of mortgage credit. Its principal activity consists of purchasing
first-lien conventional residential mortgage loans (and participation interest
in such mortgage loans) and reselling these loans in the form of mortgage-backed
securities, primarily Freddie Mac certificates.
Freddie Mac certificates represent a pro rata interest in a group of
mortgage loans (a Freddie Mac certificate group) purchased by Freddie Mac. The
mortgage loans underlying Freddie Mac certificates consist of fixed- or
adjustable-rate mortgage loans with original terms to maturity of 10 to 30
years, substantially all of which are secured by first liens on one- to
four-family residential properties or multifamily projects. Each mortgage loan
must meet standards
4 American Century Investments
set forth in the FHLMC Act. A Freddie Mac certificate group may include whole
loans, participation interests in whole loans, undivided interests in whole
loans, and participations constituting another Freddie Mac certificate group.
Freddie Mac guarantees to each registered holder of a Freddie Mac
certificate the timely payment of interest at the rate provided for by the
certificate. Freddie Mac also guarantees ultimate collection of all principal on
the related mortgage loans, without any offset or deduction, but generally does
not guarantee the timely repayment of principal. Freddie Mac may remit principal
at any time after default on any underlying mortgage loan, but no later than 30
days following: (i) foreclosure sale, (ii) payment of a claim by any mortgage
insurer, or (iii) the expiration of any right of redemption, whichever occurs
later, and in any event no later than one year after demand has been made upon
the mortgager for accelerated payment of principal. Obligations guaranteed by
Freddie Mac are not backed by the full faith and credit of the U.S. government.
COLLATERALIZED MORTGAGE OBLIGATIONS ("CMO"S). A CMO is a multiclass bond
backed by a pool of mortgage pass-through certificates or mortgage loans. CMO's
may be collateralized by (i) Ginnie Mae, Fannie Mae, or Freddie Mac pass-through
certificates, (ii) unsecuritized mortgage loans insured by the Federal Housing
Administration or guaranteed by the Department of Veterans' Affairs, (iii)
unsecuritized conventional mortgages, or (iv) any combination thereof.
In structuring a CMO, an issuer distributes cash flow from the underlying
collateral over a series of classes called "tranches." Each CMO is a set of two
or more tranches with average lives and cash flow patterns designed to meet
specific investment objectives. The average life expectancies of the different
tranches in a four-part deal, for example, might be two, five, seven, and 20
years.
As payments on the underlying mortgage loans are collected, the CMO issuer
pays the coupon rate of interest to the bondholders in each tranche. At the
outset, scheduled and unscheduled principal payments go to investors in the
first tranches. Investors in later tranches do not begin receiving principal
payments until the prior tranches are paid off. This basic type of CMO is known
as a "sequential pay" or "plain vanilla" CMO.
Some CMOs are structured so that the prepayment or market risks are
transferred from one tranche to another. Prepayment stability is improved in
some tranches if other tranches absorb more prepayment variability.
The final tranches of a CMO often take the form of a Z-bond, also known as
an "accrual bond" or "accretion bond." Holders of these securities receive no
cash until the earlier tranches are paid in full. During the period that the
other tranches are outstanding, periodic interest payments are added to the
initial face amount of the Z-bond but are not paid to investors. When the prior
tranches are retired, the Z-bond receives coupon payments on its higher
principal balance, plus any principal prepayments from the underlying mortgage
loans. The existence of a Z-bond tranche helps stabilize cash flow patterns in
the other tranches. In a changing interest rate environment, however, the value
of the Z-bond tends to be more volatile.
As CMOs have evolved, some classes of CMO bonds have become more prevalent.
The planned amortization class ("PAC") and targeted amortization class ("TAC"),
for example, were designed to reduce prepayment risk by establishing a
sinking-fund structure. PAC and TAC bonds assure to varying degrees that
investors will receive payments over a predetermined period under various
prepayment scenarios. Although PAC and TAC bonds are similar, PAC bonds are
better able to provide stable cash flows under various prepayment scenarios than
TAC bonds because of the order in which these tranches are paid.
The existence of a PAC or TAC tranche can create higher levels of risk for
other tranches in the CMO because the stability of the PAC or TAC tranche is
achieved by creating at least one other tranche known as a companion bond,
support, or non-PAC bond that absorbs the variability of principal cash flows.
Because companion bonds have a high degree of average life variability, they
generally pay a higher yield. A TAC bond can have some of the prepayment
variability of a companion bond if there is also a PAC bond in the CMO issue.
Floating-rate CMO tranches ("floaters") pay a vari-
Statement of Additional Information 5
able rate of interest that is usually tied to the London Interbank Offered Rate
("LIBOR"). Institutional investors with short-term liabilities, such as
commercial banks, often find floating-rate CMOs attractive investments. "Super
floaters" (which float a certain percentage above LIBOR) and "inverse floaters"
(which float inversely to LIBOR) are variations on the floater structure with
highly variable cash flows.
CONVERTIBLE SECURITIES
The Fund may buy securities that are convertible into common stock. Listed
below are brief descriptions of the various types of convertible securities the
Fund may buy.
Convertible bonds are issued with lower coupons than nonconvertible bonds
of the same quality and maturity, but they give holders the option to exchange
their bonds for a specific number of shares of the company's common stock at a
predetermined price. This structure allows the convertible bond holder to
participate in share price movements in the company's common stock. The actual
return on a convertible bond may exceed its stated yield if the company's common
stock appreciates in value, and the option to convert to common shares becomes
more valuable.
Convertible preferred stocks are nonvoting equity securities that pay a
fixed dividend. These securities have a convertible feature similar to
convertible bonds; however, they do not have a maturity date. Due to their
fixed-income features, convertible issues typically are more sensitive to
interest rate changes than the underlying common stock. In the event of
liquidation, bondholders would have claims on company assets senior to those of
stockholders; preferred stockholders would have claims senior to those of common
stockholders.
Warrants entitle the holder to buy the issuer's stock at a specific price
for a specific period of time. The price of a warrant tends to be more volatile
than, and does not always track, the price of its underlying stock. Warrants are
issued with expiration dates. Once a warrant expires, it has no value in the
market.
FOREIGN SECURITIES
The Fund's investments in securities of foreign issuers may subject the
Fund to additional investment risks.
Investing in foreign companies may involve risks not typically associated
with investing in U.S. companies. The value of securities denominated in foreign
currencies, and of dividends from such securities, can change significantly when
foreign currencies strengthen or weaken relative to the U.S. dollar. Foreign
securities markets generally have less trading volume and less liquidity than
U.S. markets, and prices in some foreign markets can be very volatile.
Many foreign countries lack uniform accounting and disclosure standards
comparable to those that apply to U.S. companies, and it may be more difficult
to obtain reliable information regarding a foreign issuer's financial condition
and operations. In addition, the costs of foreign investing, including
withholding or other taxes, brokerage commissions, and custodial fees, are
generally higher than for U.S. investments.
Foreign markets may offer less protection to investors than U.S. markets.
Foreign issuers, brokers, and securities markets may be subject to less
governmental supervision. Foreign security trading practices, including those
involving the release of assets in advance of payment, may involve increased
risks in the event of a failed trade or the insolvency of a broker-dealer and
may involve substantial delays. It may also be difficult to enforce legal rights
in foreign countries.
Investing abroad carries political and economic risks distinct from those
associated with investing in the U.S. Foreign investments may be affected by
actions of foreign governments adverse to the interests of U.S. investors,
including the possibility of expropriation or nationalization of assets,
confiscatory taxation, restrictions on U.S. investment, or restrictions on the
ability to repatriate assets or to convert currency into U.S. dollars. There may
be a greater possibility of default by foreign governments or
foreign-government-sponsored enterprises. Investments in foreign countries also
involve a risk of local political, economic, or social instability, military
action or unrest, or adverse diplomatic developments.
To offset the currency risks associated with investing in securities of
foreign issuers, the Fund may hold foreign currency deposits and may convert
dollars and foreign currencies in the foreign exchange markets. Currency
conversion involves dealer spreads and other costs, although commissions usually
are not
6 American Century Investments
charged.
Currencies may be exchanged on a spot (i.,e., cash) basis or by entering
into forward contracts to purchase or sell foreign currencies at future date and
price. By entering into a forward contract to buy or sell the amount of foreign
currency involved in a security transaction for a fixed amount of U.S. dollars,
the Manager can protect the Fund against losses resulting from adverse changes
in the relationship between the U.S. dollar and the foreign currency during the
period between the date the security is purchased or sold and the date on which
payment is made or received. However, it should be noted that using forward
contracts to protect the Fund's foreign investments from currency fluctuations
does not eliminate fluctuations in the prices of the underlying securities
themselves. Forward contracts simply establish a rate of exchange that can be
achieved at some future point in time. Additionally, although forward contracts
tend to minimize the risk of loss due to a decline in the value of the hedged
currency, they also limit any gain that might result if the hedged currency's
value were to increase.
Foreign exchange dealers do not charge fees for currency conversions.
Instead, they realize a profit based on the difference (the spread) between the
prices at which they are buying and selling various currencies. A dealer may
offer to sell a foreign currency at one rate while simultaneously offering a
lesser rate of exchange on the purchase of that currency.
DEPOSITARY RECEIPTS
American Depositary Receipts and European Depositary Receipts ("ADR"s and
"EDR"s) are receipts representing ownership of shares of a foreign-based issuer
held in trust by a bank or similar financial institution. These are designed for
U.S. and European securities markets as alternatives to purchasing underlying
securities in their corresponding national markets and currencies. ADRs and EDRs
can be sponsored or unsponsored.
Sponsored ADRs and EDRs are certificates in which a bank or financial
institution participates with a custodian. Issuers of unsponsored ADRs and EDRs
are not contractually obligated to disclose material information in the United
States. Therefore, there may not be a correlation between such information and
the market value of the unsponsored ADR or EDR.
RESTRICTED SECURITIES
Restricted securities held by the Fund generally can be sold in privately
negotiated transactions, pursuant to an exemption from registration under the
Securities Act of 1933, or in a registered public offering. Where registration
is required, the Fund may be required to pay all or a part of the registration
expense, and a considerable period may elapse between the time it decides to
seek registration of the securities and the time it is permitted to sell them
under an effective registration statement. If, during this period, adverse
market conditions were to develop, the Fund might obtain a less favorable price
than prevailed when it decided to try to register the securities initially.
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 the securities it loaned; if the value of the loaned securities
increased in the meantime, the Fund could suffer a loss.
To minimize the risk of default on securities loans, the Manager adheres to
the following guidelines prescribed by the Board of Trustees:
(1) TYPE AND AMOUNT OF COLLATERAL. At the time a loan is made, the Fund must
receive, from or on behalf of the borrower, collateral consisting of any
combination of cash and full faith and credit U.S. government securities
equal to not less than 102% of the market value of the securities loaned.
Cash collateral received by the Fund in connection with loans of portfolio
securities may be commingled by the Fund's custodian with other cash and
marketable securities, provided that the loan agreement expressly allows
such commingling. The loan must not reduce the risk of loss or opportunity
for gain in the securities loaned.
(2) ADDITIONS TO COLLATERAL. Collateral must be marked to market daily, and the
borrower must agree to add collateral to the extent necessary to maintain
the 102% level specified in guideline (1). The borrower must deposit
additional col-
Statement of Additional Information 7
lateral no later than the business day following the business day on which
a collateral deficiency occurs or collateral appears to be inadequate.
(3) TERMINATION OF LOAN. The Fund must have the option to terminate any loan of
portfolio securities at any time. The borrower must be obligated to
redeliver the borrowed securities within the normal settlement period
following receipt of the termination notice.
(4) REASONABLE RETURN ON LOAN. The borrower must agree that the Fund (a) will
receive all dividends, interest, or other distributions on loaned
securities and (b) will be paid a reasonable return on such loans either in
the form of a loan fee or premium or from the retention by the Fund of part
or all of the earnings and profits realized from the investment of cash
collateral in full faith and credit U.S government securities.
(5) LIMITATIONS ON PERCENTAGE OF PORTFOLIO SECURITIES ON LOAN. The Fund's loans
may not exceed 33 1/3% of its total assets.
(6) CREDIT ANALYSIS. As part of the regular monitoring procedures set forth by
the Board of Trustees that the Manager follows to evaluate banks and
broker-dealers in connection with, for example, repurchase agreements and
municipal securities credit issues, the Manager will analyze and monitor
the creditworthiness of all borrowers with whom portfolio lending
arrangements are proposed or made.
If a borrower fails financially, there may be delays in recovering loaned
securities and a loss in the value of collateral. However, loans will only be
made to parties that meet the guidelines prescribed by the Board of Trustees.
FOREIGN CURRENCY EXCHANGE TRANSACTIONS
The Manager may engage in foreign currency exchange transactions on behalf
of the Fund to manage currency risk. Foreign currencies may be purchased and
sold regularly, either in the spot (i.e., cash) market or in the forward market
(through forward foreign currency exchange contracts, or "forward contracts").
Foreign exchange dealers do not charge fees for currency conversions. Instead,
they realize a profit based on the difference (the spread) between the prices at
which they are buying and selling various currencies. A dealer may offer to sell
a foreign currency at one rate while simultaneously offering a lesser rate of
exchange on the purchase of that currency.
When the Fund agrees to buy or sell a security denominated in a foreign
currency, it may enter into a forward contract to "lock in" the U.S. dollar
price of the security. By entering into a forward contract to buy or sell the
amount of foreign currency involved in the underlying securities transaction for
a fixed amount of U.S. dollars, the Manager can protect the Fund against a
possible loss resulting from an adverse change in the relationship between the
U.S. dollar and the foreign currency between the security's purchase or sale
date and its payment date. This type of transaction is sometimes referred to as
a "position hedge."
In addition to position hedges, the Manager may engage in "cross-hedging"
transactions on behalf of the Fund. Cross hedging involves entering into a
forward contract to sell one foreign currency and buy another. The Manager may
employ a cross-hedging strategy on behalf of the Fund if it believes that one
foreign currency (in which a portion of the Fund's foreign currency holdings are
denominated) will change in value relative to the U.S. dollar differently than
another foreign currency.
Successful use of forward contracts depends on the Manager's skill in
analyzing and predicting currency values. Forward contracts could result in
losses to the Fund if currencies do not perform as anticipated. The advisor uses
forward contracts for currency hedging purposes only. The adviser does not use
forward contracts for speculative purposes. The Fund is not required to enter
into forward contracts with regard to its foreign holdings and will not do so
unless it is deemed appropriate by the advisor.
The Fund's assets are valued daily in U.S. dollars, although foreign
currency holdings are not physically converted into U.S. dollars on a daily
basis.
The currency management techniques discussed above are limited by various
constraints, including the intention to protect the U.S. tax status of the Fund
as a regulated investment company.
SHORT SALES AND PUT OPTIONS ON INDIVIDUAL SECURITIES
The Fund may buy puts and enter into short sales with respect to stocks
underlying its convertible security holdings. For example, if the Manager
anticipates
8 American Century Investments
a decline in the price of the stock underlying a convertible security the Fund
holds, it may purchase a put option on the stock or sell the stock short. If the
stock price subsequently declines, the proceeds of the short sale or an increase
in the value of the put option could be expected to offset all or a portion of
the effect of the stock's decline on the value of the convertible security.
When a Fund enters into a short sale, it will be required to set aside cash
or appropriate liquid assets in kind and amount to those sold short (or
securities convertible or exchangeable into such securities) and will be
required to continue to hold them while the short sale is outstanding. The Fund
will incur transaction costs, including interest expenses, in connection with
opening, maintaining, and closing short sales.
FUTURES AND OPTIONS TRANSACTIONS
Futures contracts provide for the sale by one party and purchase by another
party of a specific security at a specified future time and price. Futures
contracts are traded on national futures exchanges. Futures exchanges and
trading are regulated under the Commodity Exchange Act by the Commodity Futures
Trading Commission ("CFTC"), a U.S. government agency.
Although futures contracts, by their terms, call for actual delivery or
acceptance of the underlying securities, in most cases the contracts are closed
out before the settlement date. Closing out a futures position is done by taking
an opposite position in an identical contract (i.e., buying a contract that has
previously been sold, or selling a contract that has previously been bought).
To initiate and maintain open positions in futures contracts, the Fund is
required to make a good faith margin deposit in cash or government securities
with a broker or custodian. A margin deposit is intended to assure completion of
the contract (delivery or acceptance of the underlying security) if it is not
terminated prior to the specified delivery date. Minimum initial margin
requirements are established by the futures exchanges and may be revised. In
addition, brokers may establish deposit requirements that are higher than the
exchange minimums.
After a futures contract position is opened, the value of the contract is
marked to market daily. If the futures contract price changes to the extent that
the margin on deposit does not satisfy margin requirements, the contract holder
is required to pay additional "variation" margin. Conversely, changes in the
contract value may reduce the required margin, resulting in a repayment of
excess margin to the contract holder. Variation margin payments are made to or
from the futures broker as long as the contract remains open and do not
constitute margin transactions for purposes of the Fund's investment
restrictions.
Those who trade futures contracts may be broadly classifed as either
"hedgers" or "speculators." Hedgers, such as the Fund, use the futures markets
primarily to offset unfavorable changes in the value of securities they hold or
expect to acquire for investment purposes. Speculators are less likely to own
the securities underlying the futures contracts they trade and are more likely
to use futures contracts with the expectation of realizing profits from
fluctuations in the prices of the underlying securities. The Fund will not
utilize futures contracts for speculative purposes.
Although techniques other than trading futures contracts can be used to
control the Fund's exposure to market fluctuations, the use of futures contracts
may be a more effective means of hedging this exposure. While the Fund pays
brokerage commissions in connection with opening and closing out futures
positions, these costs are lower than the transaction costs incurred in the
purchase and sale of the underlying securities.
PURCHASING PUT AND CALL OPTIONS. By purchasing a put option, the Fund
obtains the right (but not the obligation) to sell the option's underlying
instrument at a fixed strike price. In return for this right, the Fund pays the
current market price for the option (known as the option premium). Options have
various types of underlying instruments, including specific securities, indexes
of securities prices, and futures contracts. The Fund may terminate its position
in a put option it has purchased by allowing it to expire or by exercising the
option. If the option is allowed to expire, the Fund will lose the entire
premium it paid. If the Fund exercises the option, it completes the sale of the
underlying instrument at the strike price. The Fund may also terminate a put
option position by closing it out in the secondary market at its current price
if a liquid secondary market exists.
Statement of Additional Information 9
The buyer of a typical put option can expect to realize a gain if security
prices fall substantially. However, if the underlying instrument's price does
not fall enough to offset the cost of purchasing the option, a put buyer can
expect to suffer a loss (limited to the amount of the premium paid, plus related
transaction costs).
The features of call options are essentially the same as those of put
options, except that the purchaser of a call option obtains the right to
purchase, rather than sell, the underlying instrument at the option's strike
price. A call buyer typically attempts to participate in potential price
increases of the underlying instrument with risk limited to the cost of the
option if security prices fall. At the same time, the buyer can expect to suffer
a loss if security prices do not rise sufficiently to offset the cost of the
option.
WRITING PUT AND CALL OPTIONS. If the Fund writes a put option, it takes the
opposite side of the transaction from the option's purchaser. In return for
receipt of the premium, the Fund assumes the obligation to pay the strike price
for the option's underlying instrument if the other party chooses to exercise
the option. When writing an option on a futures contract, the Fund will be
required to make margin payments to a broker or custodian as described above for
futures contracts. The Fund may seek to terminate its position in a put option
it writes before exercise by closing out the option in the secondary market at
its current price. If the secondary market is not liquid for a put option the
Fund has written, however, the Fund must continue to be prepared to pay the
strike price while the option is outstanding, regardless of price changes, and
must continue to set aside assets to cover its position.
If security prices were to rise, a put writer would generally expect to
profit, although the gain would be limited to the amount of the premium
received. If security prices were to remain the same over time, the writer would
likely also profit by being able to close out the option at a lower price. If
security prices were to fall, the put writer would expect to suffer a loss. This
loss should be less than the loss from purchasing the underlying instrument
directly, however, because the premium received for writing the option should
mitigate the effects of the decline.
Writing a call option obligates the Fund to sell or deliver the option's
underlying instrument in return for the strike price upon exercise of the
option. The characteristics of writing call options are similar to those of
writing put options, except that writing calls generally is a profitable
strategy if prices remain the same or fall. Through receipt of the option
premium, a call writer mitigates the effects of a price decline. At the same
time, because a call writer must be prepared to deliver the underlying
instrument in return for the strike price even if its current value is greater,
a call writer gives up some ability to participate in security price increases.
COMBINED POSITIONS. The Fund may purchase and write options in combination
with other options or in combination with futures or forward contracts in order
to adjust the risk and return characteristics of the overall position. For
example, the Fund may purchase a put option and write a call option on the same
underlying instrument in order to construct a combined position whose risk and
return characteristics are similar to selling a futures contract. Another
possible combined position would involve writing a call option at one strike
price and buying a call option at a lower price in order to reduce the risk of
the written call option in the event of a substantial price increase. Because
combined options positions involve multiple trades, they result in higher
transaction costs and may be more difficult to open and close out.
OTC OPTIONS. Unlike exchange-traded options, which are standardized with
respect to the underlying instrument, expiration date, contract size, and strike
price, the terms of over-the-counter options (not traded on exchanges) generally
are established through negotiation with the other party to the option contract.
While this type of arrangement allows the Fund greater flexibility to tailor an
option to its needs, OTC options generally involve greater credit risk than
exchange-traded options, which are guaranteed by the clearing organizations of
the exchanges where they are traded. The risk of illiquidity is also greater
with OTC options because these options generally can be closed out only by
negotiation with the other party to the option.
OPTIONS ON FUTURES. By purchasing an option on a futures contract, the
Fund obtains the right, but not the obligation, to sell the futures contract
(a put option) or to buy the contract (a call option) at a fixed "strike"
price. The Fund can terminate its position in
10 American Century Investments
a put option by allowing it to expire or by exercising the option. If the option
is exercised, the Fund completes the sale of the underlying security at the
strike price. Purchasing an option on a futures contract does not require the
Fund to make margin payments unless the option is exercised.
CORRELATION OF PRICE CHANGES. Because there are a limited number of types
of exchange-traded futures and options contracts, it is likely that the
standardized contracts available will not match the Fund's current or
anticipated investments exactly. The Fund may invest in futures and options
contracts based on securities with different issuers, maturities, or other
characteristics than the securities in which they typically invest (for example,
by hedging intermediate-term securities with a futures contract based on an
index of long-term bond prices); this involves a risk that the futures position
will not track the performance of the Fund's other investments.
Options and futures prices can diverge from the prices of their underlying
instruments even if the underlying instruments correlate well with the Fund's
investments. Options and futures prices are affected by factors such as current
and anticipated short-term interest rates, changes in volatility of the
underlying instrument, and the time remaining until expiration of the contract,
which may not affect security prices the same way. Imperfect correlation may
also result from differing levels of demand in the options and futures markets
and the securities markets, from structural differences in how options and
futures and securities are traded, or from the imposition of daily price
fluctuation limits or trading halts. The Fund may purchase or sell options and
futures contracts with a greater or lesser value than the securities it wishes
to hedge or intends to purchase in an effort to compensate for differences in
volatility between the contract and the securities, although this may not be
successful in all cases. If price changes in the Fund's options or futures
positions are poorly correlated with its other investments, the positions may
fail to produce anticipated gains or result in losses that are not offset by
gains in other investments.
FUTURES AND OPTIONS CONTRACTS RELATING TO FOREIGN CURRENCIES. The Fund may
purchase and sell currency futures and purchase and write currency options to
increase or decrease its exposure to different foreign currencies. The Fund may
also purchase and write currency options in conjunction with currency futures or
forward contracts.
Currency futures contracts are similar to forward currency exchange
contracts, except that they are traded on exchanges and have standard contract
sizes and delivery dates. Most currency futures contracts call for payment or
delivery in U.S. dollars.
The uses and risks of currency futures are similar to those of futures and
options relating to securities or indexes, as described above. Currency futures
and options values can be expected to correlate with exchange rates but may not
reflect other factors that affect the value of the Fund's investments. A
currency hedge, for example, should protect a German-mark-denominated security
from a decline in the German mark, but it will not protect the Fund against a
price decline resulting from a deterioration in the issuer's creditworthiness.
LIQUIDITY OF FUTURES CONTRACTS AND OPTIONS. There is no assurance a liquid
secondary market will exist for any particular futures contract or option at any
particular time. Options may have relatively low trading volume and liquidity if
their strike prices are not close to the underlying instrument's current price.
In addition, exchanges may establish daily price fluctuation limits for futures
contracts and options and may halt trading if a contract's price moves upward or
downward more than the limit on a given day. On volatile trading days when the
price fluctuation limit is reached or a trading halt is imposed, it may be
impossible for the Fund to enter into new positions or close out existing
positions. If the secondary market for a contract were not liquid, because of
price fluctuation limits or otherwise, prompt liquidation of unfavorable
positions could be difficult or impossible, and the Fund could be required to
continue holding a position until delivery or expiration regardless of changes
in its value. Under these circumstances, the Fund's access to assets held to
cover its future positions could also be impaired.
Futures and options trading on foreign exchanges may not be regulated as
effectively as similar transactions in the U.S. and may not involve clearing
mechanisms or guarantees similar to those available in the U.S. The value of a
futures contract or option traded on a foreign exchange may be adversely
affected by
Statement of Additional Information 11
the imposition of different exercise and settlement terms, trading procedures,
and margin requirements, and lesser trading volume.
RESTRICTIONS ON THE USE OF FUTURES CONTRACTS AND OPTIONS
The Fund has filed a notice of eligibility for exclusion as a "commodity
pool operator" with the CFTC and the National Futures Association, which
regulates trading in the futures markets. The Fund intends to comply with
Section 4.5 of the regulations under the Commodity Exchange Act, which limits
the extent to which the Fund can commit assets to initial margin deposits and
options premiums.
The Fund may enter into futures transactions (including related options)
for hedging purposes without regard to the percentage of assets committed to
initial margin and for other than hedging purposes provided that assets
committed to initial margin deposits on such instruments, plus premiums paid for
open futures options positions, less the amount by which any such positions are
"in-the-money," do not exceed 5% of the Fund's total assets. To the extent
required by law, the Fund will set aside cash and appropriate liquid assets in a
segregated account to cover its obligations related to futures contracts and
options. Financial futures or options purchased or sold by the Fund will be
standardized and traded through the facilities of a U.S. or foreign securities
association or listed on a U.S. or foreign securities or commodities exchange,
board of trade, or similar entity, or quoted on an automatic quotation system,
except that the Fund may effect transactions in over-the-counter options with
primary U.S. government securities dealers recognized by the Federal Reserve
Bank of New York. In addition, the Fund has undertaken to limit aggregate
premiums paid on all options purchased by the Fund to no more than 20% of the
Fund's total net asset value.
The Fund intends to comply with tax rules applicable to regulated
investment companies, including a requirement that gains from the sale of
securities and certain other assets held less than three months constitute less
than 30% of the Fund's gross income for each fiscal year. Gains on some futures
contracts and options are included in this 30% calculation, which may limit the
Fund's investments in these instruments.
INVESTMENT RESTRICTIONS
The Fund's investment restrictions set forth below are fundamental and may
not be changed without approval of a majority of the outstanding voting
securities of the Fund, as defined in the Investment Company Act of 1940.
THE FUND MAY NOT:
(1) Purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. government, its agencies or instrumentalities) if,
as a result, at the time of such investment, (a) more than 5% of its total
assets would be invested in the securities of that issuer, or (b) the Fund
would hold more than 10% of the outstanding voting securities of that
issuer.
(2) Borrow money except from a bank as a temporary measure to satisfy
redemption requests or for extraordinary or emergency purposes provided
that the Fund maintains asset coverage of at least 300% for all such
borrowings. The Fund will not purchase any security while borrowings
representing more than 5% of its total assets are outstanding. The Fund may
borrow money for temporary or emergency purposes from other funds or
portfolios for which the Manager is the investment advisor, or from a joint
account of such funds or portfolios, as permitted by federal regulatory
agencies, and provided it has received any necessary exemptive order from
the Securities and Exchange Commission.
(3) 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.
(4) Purchase or sell real estate or real estate limited partnerships, unless
acquired as a result of ownership of securities or other instruments (but
this shall not prevent the Fund from investing in securities or other
instruments backed by real estate or readily marketable securities of
issuers engaged in the real estate business); physical commodities;
contracts relating to physical commodities; or interests in oil, gas and/or
mineral exploration development pro-
12 American Century Investments
grams or leases. This restriction shall not be deemed to prohibit the Fund
from purchasing or selling currencies; entering into futures contracts on
securities, currencies, or on indexes of such securities or currencies, or
any other financial instruments; and purchasing and selling options on such
futures contracts.
(5) Make loans to others, except for the lending of portfolio securities
pursuant to guidelines established by the Board of Trustees and except as
otherwise in accordance with the Fund's investment objective and policies.
(6) Issue senior securities, except as permitted under the Investment Company
Act of 1940.
(7) Purchase any security if, as a result, 25% or more of the Fund's total
assets would be invested in the securities of issuers having their
principal business activities in the same industry. However, this
limitation does not apply to securities issued or guaranteed by the U.S.
government or any of its agencies or instrumentalities.
The Fund is also subject to the following restrictions that are not
fundamental and may, therefore, be changed by the Board of Trustees without
shareholder approval.
THE FUND MAY NOT:
(a) 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 options and futures contracts are not deemed to
constitute short sales of securities.
(b) Purchase warrants, valued at the lower of cost or market, in excess of 10%
of the Fund's net assets. Included within that amount, but not to exceed 2%
of the Fund's net assets, are warrants whose underlying securities are not
traded on principal domestic or foreign exchanges. Warrants acquired by the
Fund in units or attached to securities are not subject to these
restrictions.
(c) Purchase securities on margin, except that the Fund may obtain such
short-term credits as are necessary for the clearance of transactions, and
provided that margin payments in connection with futures contracts and
options on futures contracts shall not constitute the purchase of
securities on margin.
(d) Invest in securities that are not readily marketable, or that are illiquid
because they are subject to legal or contractual restrictions on resale
(collectively, "illiquid securities") if, as a result, more than 15% of the
Fund's net assets would be invested in illiquid securities.
(e) Acquire or retain the securities of any other investment company if, as a
result, more than 3% of such investment company's outstanding shares would
be held by the Fund, more than 5% of the value of the Fund's assets would
be invested in shares of such investment company, or more than 10% of the
value of the Fund's assets would be invested in shares of investment
companies in the aggregate, except in connection with a merger,
consolidation, acquisition, or reorganization or as otherwise permitted by
applicable law.
(f) Invest in securities of an issuer that, together with any predecessor or
unconditional guarantor, has been in operation for less than three years
if, as a result, more than 5% of the total assets of the Fund would then be
invested in such securities, except obligations issued or guaranteed by the
U.S. government or its agencies.
Unless otherwise indicated, percentage limitations included in the
restrictions apply at the time transactions are entered into. Accordingly, any
later increase or decrease beyond the specified limitation resulting from a
change in the Fund's net assets will not be considered in determining whether it
has complied with its investment restrictions.
For purposes of the Fund's investment restrictions, the party identified as
the "issuer" of a municipal security depends on the form and conditions of the
security. When the assets and revenues of a political subdivision are separate
from those of the government that created the subdivision and the security is
backed only by the assets and revenues of the subdivision, the subdivision is
deemed the sole issuer. Similarly, in the case of an Industrial Development Bond
("IDB"), if the bond were backed only by the assets and revenues of a
non-governmental user, the non-governmental user would be deemed the sole
Statement of Additional Information 13
issuer. If, in either case, the creating government or some other entity were to
guarantee the security, the guarantee would be considered a separate security
and treated as an issue of the guaranteeing entity.
PORTFOLIO TRANSACTIONS
The Fund's assets are invested by the Manager in a manner consistent with
the Fund's investment objectives, 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.
The Fund's annual portfolio turnover rate for the fixed-income portion of
its portfolio is not expected to exceed 250%; the equity portion of its
portfolio is not expected to exceed 150%. These turnover rates may vary from
year to year. Because a higher turnover rate increases transaction costs and may
increase taxable gains, the advisor carefully weighs the potential benefits of
short-term investing against these considerations.
VALUATION OF PORTFOLIO SECURITIES
The Fund's net asset value per share ("NAV") is calculated as of the close
of business of the New York Stock Exchange (the "Exchange") usually at 3:00 p.m.
Central time each day the Exchange is open for business. The Exchange has
designated the following holiday closings for 1997: New Year's Day (observed),
Presidents` Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day, and Christmas Day (observed). Although the Fund expects the
same holiday schedule to be observed in the future, the Exchange may modify its
holiday schedule at any time.
The Manager typically completes its trading on behalf of the Fund in
various markets before the Exchange closes for the day. Securities are valued at
market, depending upon the market or exchange on which they trade. Price
quotations for exchange-listed securities are taken from the primary exchanges
on which these securities trade. Securities traded on exchanges will be valued
at their last sale prices. If no sale is reported, the mean between the latest
bid and asked prices is used. Securities traded over-the-counter will be valued
at the mean between the latest bid and asked prices. Fixed-income securities are
priced at market value on the basis of market quotations supplied by independent
pricing services. Trading of securities in foreign markets may not take place on
every day the Exchange is open, and trading takes place in various foreign
markets on days on which the Exchange and the Fund's offices are not open and
the Fund's net asset value is not calculated. The Fund's net asset value may be
significantly affected on days when shareholders have no access to the Fund.
Securities for which market quotations are not readily available, or which may
change in value due to events occuring after their primary exchange has closed
for the day, are valued at fair market value as determined in good faith under
the direction of the Board of Trustees.
If no sale is reported, the mean between the latest bid and asked prices is
used. Securities traded over-the-counter will be valued at the mean between the
latest bid and asked prices.
PERFORMANCE
The Fund`s yields and total returns may be quoted in advertising and sales
literature. These figures, as well as the Fund's share price will vary. Past
performance should not be considered as indicative of future results.
Yield quotations are based on the investment income per share earned during
a particular 30-day period, less expenses accrued during the period (net
investment income), and are computed by dividing the Fund's net investment
income by its share price on the last day of the period, according to the
following formula:
YIELD = 2 [(a - b + 1)6 - 1]
------
cd
where a = dividends and interest earned during the period, b = expenses
accrued for the period (net of
14 American Century Investments
reimbursements), c = the average daily number of shares outstanding during the
period that were entitled to receive dividends, and d = the maximum offering
price per share on the last day of the period.
Average annual total returns are calculated by determining the growth or
decline in value of a hypothetical historical investment in a Fund over 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 result in 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 a 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.
The Fund's average annual total returns for the one-year and life-of-fund
periods ended May 31, 1996, are indicated in the following table.
Average Annual Total Return
- -----------------------------------------------------------------------------
One Year 13.04%
Life-of-Fund* 17.61%
- -----------------------------------------------------------------------------
* Since Fund inception on December 1, 1994.
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. Total returns may be broken down into their components of income
and capital (including capital gains and changes in share price) to illustrate
the relationship of these factors and their contributions to total return.
The Fund's performance may be compared with the performance of other mutual
funds tracked by mutual fund rating services or with other indexes of market
performance. This may include comparisons with funds that, unlike American
Century funds, are sold with a sales charge or deferred sales charge. Sources of
economic data that may be used for such comparisons may include, but are not
limited to, U.S. Treasury bill, note, and bond yields, money market fund yields,
U.S. government debt and percentage held by foreigners, the U.S. money supply,
net free reserves, and yields on current-coupon GNMAs (source: Board of
Governors of the Federal Reserve System); the federal funds and discount rates
(source: Federal Reserve Bank of New York); yield curves for U.S. Treasury
securities and AA/AAA-rated corporate securities (source: Bloomberg Financial
Markets); yield curves for AAA-rated tax-free municipal securities (source:
Telerate); yield curves for foreign government securities (sources: Bloomberg
Financial Markets and Data Resources, Inc.); total returns on foreign bonds
(source: J.P. Morgan Securities Inc.); various U.S. and foreign government
reports; the junk bond market (source: Data Resources, Inc.); the CRB Futures
Index (source: Commodity Index Report); the price of gold (sources: London
a.m./p.m. fixing and New York Comex Spot Price); rankings of any mutual fund or
mutual fund category tracked by Lipper Analytical Services, Inc. or Morningstar,
Inc.; mutual fund rankings published in major nationally distributed
periodicals; data provided by the Investment Company Institute; Ibbotson
Associates, Stocks, Bonds, Bills, and Inflation; major indexes of stock market
performance; and indexes and historical data supplied by major securities
brokerage or investment advisory firms. The Fund may also utilize reprints from
newspapers and magazines furnished by third parties to illustrate historical
performance.
Indexes may assume reinvestment of dividends, but, generally, they do not
reflect administrative and management costs such as those incurred by a mutual
fund.
Occasionally statistics may be used to illustrate Fund volatility or risk.
Measures of volatility or risk generally are used to compare the Fund's net
asset value or performance to a market index. One measure of volatility is
"beta." Beta expresses Fund volatility relative to the total market as
represented by the S&P 500. A beta of more than 1.00 indicates volatility
greater than that of the market, and a beta of less than 1.00 indicates
volatility less than that of the market.
Statement of Additional Information 15
Another measure of volatility or risk is "standard deviation." Standard
deviation is used to measure variability of net asset value or total return
relative to an average over a specified period of time. The premise is that
greater volatility connotes greater risk undertaken to achieve desired
performance.
The Fund's shares are sold without a sales charge (load). No-load funds
offer an advantage to investors when compared to load funds with comparable
investment objectives and strategies.
TAXES
The Fund intends to qualify annually as a "regulated investment company"
under Subchapter M of the Internal Revenue Code of 1986, as amended (the
"Code"). By so qualifying, the Fund will not incur federal income or state taxes
on its net investment income and net realized capital gains distributed to
shareholders.
The Fund may be subject to a 4% excise tax on a portion of its
undistributed income. To avoid the tax, the Fund must timely distribute annually
at least 98% of its ordinary income (not taking into account any capital gains
or losses) for the calendar year and at least 98% of its capital gain net income
for the 12-month period ending, as a general rule, on October 31st of the
calendar year. Any dividend declared by the Fund in October, November or
December of any year and payable to shareholders of record on a specified date
in such a month shall be deemed to have been received by each shareholder on
December 31st of such year provided that such dividend is actually paid by the
Fund during January of the following year.
The Fund's transactions in foreign currencies, forward contracts, options
and futures contracts (including options and futures contracts on foreign
currencies) will be subject to special provisions of the Code that, among other
things, may affect the character of gains and losses realized by the Fund (i.e.,
may affect whether gains or losses are ordinary or capital), accelerate
recognition of income to the Fund, defer Fund losses, and affect the
determination of whether capital gains and losses are characterized as long-term
or short-term capital gains or losses. These rules could therefore affect the
character, amount and timing of distributions to shareholders. These provisions
also may require a Fund to mark to market certain types of the positions in its
portfolio (i.e., treat them as if they were closed out), which may cause the
Fund to recognize income without receiving cash with which to make distributions
in amounts necessary to satisfy the 90% and 98% distribution requirements for
relief from income and excise taxes. The Fund will monitor its transactions and
may make such tax elections as Fund management deems appropriate with respect to
foreign currency, options, futures contracts, forward contracts, or hedged
investments. The Fund's status as a regulated investment company may limit its
transactions involving foreign currency, futures, options, and forward
contracts.
Under the Code, gains or losses attributable to fluctuations in exchange
rates that occur between the time the Fund accrues income or other receivables
or accrues expenses or other liabilities denominated in a foreign currency and
the time the Fund actually collects such receivables or pays such liabilities
generally are treated as ordinary income or loss. Similarly, in disposing of
debt securities denominated in foreign currencies and certain forward currency
contracts, gains or losses attributable to fluctuations in the value of a
foreign currency between the date the security or contract is acquired and the
date it is disposed of are also usually treated as ordinary income or loss.
Under Section 988 of the Code, these gains or losses may increase or decrease
the amount of the Fund's investment company taxable income to be distributed to
shareholders as ordinary income and correspondingly decrease or increase
distributions of capital gains.
The Fund may invest in shares of foreign corporations that may be
classified under the Code as passive foreign investment companies ("PFIC"s). In
general, a foreign corporation is classified as a PFIC is at least one-half of
its assets constitute passive investment-type assets or 75% or more of its gross
income is passive investment-type income. Certain distributions from a PFIC and
gains from the sale of PFIC shares are treated as excess distributions. These
excess distributions and gains may subject the Fund to non-deductible federal
income tax.
The Fund will monitor its transactions and may make such tax elections as
Fund management deems appropriate with respect to its holdings in PFICs. The
16 American Century Investments
Fund's intention to qualify annually as a regulated investment company may limit
its elections with respect to PFIC shares.
Because the application of the PFIC rules may affect, among other things,
the character of gains, the amount of gain or loss, and the timing of the
recognition of income with respect to PFIC shares, as well as subject the Fund
itself to tax on excess distributions from PFIC shares, the amount that must be
distributed to shareholders, which will be taxed to shareholders as ordinary
income or long-term capital gain, may be increased or decreased substantially
compared to a fund that did not invest in PFIC shares.
Earnings derived by the Fund from sources outside the U.S. may be subject
to non-U.S. withholding and possibly other taxes. Such taxes may be reduced or
eliminated under the terms of a U.S. income tax treaty, and the Fund generally
intends to undertake any procedural steps required to claim the benefits of such
a treaty. Generally, such taxes will reduce the Fund's income distributable to
shareholders. This Fund will not qualify to pass through any such foreign taxes
to the Fund's shareholders.
Some of the debt securities that may be acquired by the Fund may be treated
as debt securities that are originally issued at a discount. Generally, the
amount of the original issue discount ("OID") is treated as interest income and
is included in income over the term of the debt security, even though payment of
that amount is not received until a later time, usually when the debt security
matures. Therefore, distribution of this income may be required even though the
Fund would not have received the cash with which to make the distribution.
Some of the debt securities may be purchased in the secondary market by the
Fund at a discount that exceeds the original issue discount on such debt
securities, if any. This additional discount represents market discount for
federal income tax purposes. The gain realized on the disposition of any taxable
debt security having market discount will be treated as ordinary income to the
extent it does not exceed the accrued market discount on such debt security
previously included in the fund's investment company taxable income. At the
election of the Fund, market discount accrues for tax purposes on a daily basis
for each day the debt security is held by the Fund at a constant rate over the
time remaining to the debt security's maturity or, at the election of the Fund,
at a constant yield to maturity that takes into account the semiannual
compounding of interest.
Generally, the Fund will be required to distribute to shareholders
dividends representing the accretion of discounts on debt securities that are
currently includable in income, even if cash representing such income has not
been received by the Fund. Cash to pay such dividends may be obtained from
proceeds of sales of securities held by the Fund.
Exchange control regulations that may restrict repatriation of investment
income, capital, or the proceeds of securities sales by foreign investors may
limit the Fund's ability to make sufficient distributions to satisfy the 90%
income tax and 98% excise tax distribution requirements.
Ordinarily, the Fund will declare and pay dividends of net investment
income quarterly and make distributions of net realized capital gains, if any,
at least annually.
Upon redeeming, selling, or exchanging shares of the Fund, a shareholder
will realize a taxable gain or loss depending upon his or her basis in the
shares liquidated. The gain or loss generally will be a capital gain or loss if
the shares are capital assets in the shareholder's hands and will be long-term
or short-term depending on the length of time the shares were held. However, a
loss recognized by a shareholder in the disposition of shares on which capital
gain dividends were paid (or deemed paid) before the shareholder had held his or
her shares for more than six months would be treated as a long-term capital loss
for tax purposes.
A gain realized on the redemption, sale, or exchange of shares would not be
affected by the reacquisition of shares. The deduction of a loss realized on a
redemption, sale, or exchange of shares would be disallowed to the extent that
the shares disposed of were replaced (whether through reinvestment of
distributions or otherwise) within a period of 61 days beginning 30 days before
and ending 30 days after the disposal date. Under such circumstances, the basis
of the shares acquired would be adjusted to reflect the disallowed loss.
The information above is only a summary of some of the tax considerations
generally affecting the Fund
Statement of Additional Information 17
and its shareholders. No attempt has been made to discuss individual tax
consequences. The Fund's distributions may also be subject to state, local, or
foreign taxes. U.S. tax rules applicable to foreign investors may differ
significantly from those outlined above. To determine whether the Fund is a
suitable investment based on his or her tax situation prospective investor may
wish to consult a tax advisor.
ABOUT AMERICAN CENTURY MANAGER FUNDS
American Century Manager Funds (the "Trust") is a registered open-end
management investment company that was organized as a Massachusetts business
trust on July 12, 1994. The Trust was formerly known as "Benham Manager Funds."
American Century Capital Manager Fund (formerly know as "Benham Capital Manager
Fund") is currently the sole series of the Trust. The Board of Trustees may
create additional series from time to time.
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 (funds). Shares issued are fully paid
and nonassessable and have no preemptive, conversion, or similar rights.
If additional series were created by the Board of Trustees, each series
would vote separately on matters affecting that series exclusively. Voting
rights are not cumulative so that investors holding more than 50% of the Trust's
outstanding shares may 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 series has equal 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 itself is unable to meet its obligations.
CUSTODIAN BANK: Chase Manhattan Bank, 4 Chase Metrotech Center, Brooklyn,
NY 11245 and Commerce Bank, N.A., 1000 Walnut, Kansas City, Missouri 64106 serve
as custodians of the Fund's assets. Services provided by the custodian bank
include (a) settling portfolio purchases and sales, (b) reporting failed trades,
(c) identifying and collecting portfolio income, and (d) providing safekeeping
of securities. The custodian takes no part in determining the Fund's investment
policies or in determining which securities are sold or purchased by the Fund.
INDEPENDENT AUDITORS: KPMG Peat Marwick LLP, 1000 Walnut, Suite 1600,
Kansas City, Missouri 64106, serves as the Trust's independent auditors and
provides services including (a) audit of annual financial statements and (b)
preparation of annual federal income tax returns filed on behalf of the Fund.
TRUSTEES AND OFFICERS
The Trust's activities are overseen by a Board of Trustees, including six
independent Trustees. The individuals listed below whose names are marked by an
asterisk (*) are "interested persons" of the Trust (as defined in the Investment
Company Act of 1940) by virtue of, among other considerations, their affiliation
with either the Trust; the Trust's investment advisor, Benham Management
Corporation; the Trust's agent for transfer and administrative services,
American Century Services Corporation (ACS); the Trust's distribution agent,
American Century Investment
18 American Century Investments
Services, Inc. (ACIS); their parent corporation, American Century Companies,
Inc. (ACC) or ACC's subsidiaries; or other funds advised by the Manager. Each
Trustee listed below also serves as a Trustee or Director of other funds advised
by the Manager. Unless otherwise noted, dates in parentheses indicate the date
the Trustee or officer began his or her service in a particular capacity. The
Trustees' and officers' address, with the exception of Mr. Stowers III and Ms.
Roepke, is 1665 Charleston Road, Mountain View, California 94043. The address of
Mr. Stowers III and Ms. Roepke is 4500 Main Street, Kansas City, Missouri 64111.
TRUSTEES
*JAMES M. BENHAM, Chairman of the Board of Trustees (1994); President and
Chief Executive Officer (1996). Mr. Benham is also President and Chairman of
the Board of the Manager (1971); and a member of the Board of Governors of the
Investment Company Institute (1988). Mr. Benham has been in the securities
business since 1963, and he frequently comments through the media on economic
conditions, investment strategies, and the securities markets.
ALBERT A. EISENSTAT, independent Trustee (1995). Mr. Eisenstat is an
independent Director of each of Commercial Metals Co. (1982), Sungard Data
Systems (1991) and Business Objects S/A (1994). Previously, he served as Vice
President of Corporate Development and Corporate Secretary of Apple Computer
and served on its Board of Directors (1985 to 1993).
RONALD J. GILSON, independent Trustee (1995). Mr. Gilson is Charles J.
Meyers Professor of Law and Business at Stanford Law School (1979) and the
Mark and Eva Stern Professor of Law and Business at Columbia University School
of Law (1992); counsel to Marron, Reid & Sheehy (a San Francisco law firm,
1984).
MYRON S. SCHOLES, independent Trustee (1994). Mr. Scholes is a principal
of Long-Term Capital Management (1993). He is also Frank E. Buck Professor of
Finance at the Stanford Graduate School of Business (1983), a Director of
Dimensional Fund Advisors (1982) and the Smith Breeden Family of Funds (1992).
From August 1991 to June 1993, Mr. Scholes was a Managing Director of Salomon
Brothers Inc. (securities brokerage).
KENNETH E. SCOTT, independent Trustee (1994). Mr. Scott is Ralph M.
Parsons Professor of Law and Business at Stanford Law School (1972) and a
Director of RCM Capital Management (June 1994).
ISAAC STEIN, independent Trustee (1994). 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 STOWERS III, Trustee (1995). Mr. Stowers III is President, Chief
Executive Officer and Director of ACC, ACS and ACIS.
JEANNE D. WOHLERS, independent Trustee (1994). Ms. Wohlers is a private
investor, and an independent Director and Partner of Windy Hill Productions,
LP.. Previously, she served as Vice President and Chief Financial Officer of
Sybase, Inc. (software company, 1988 to 1992).
OFFICERS
*JAMES M. BENHAM, President and Chief Executive Officer (1996).
*WILLIAM M. LYONS, Executive Vice President (1996); Executive Vice
President, Chief Operating Officer, General Counsel and Secretary of the
Manager, ACS, and ACIS.
*DOUGLAS A. PAUL, Secretary (1994), Vice President (1994), and General
Counsel (1994), Secretary, and Vice President of the funds advised by the
Manager.
*ROBERT J. LEACH, Controller (1996).
*MARYANNE ROEPKE, CPA, Chief Financial Officer and Treasurer (1995), Vice
President and Assistant Treasurer of ACS.
As of July 31, 1996, the Trust's officers and Trustees, as a group, owned
less than 1% of the Fund's total shares outstanding.
The table on page 20 summarizes the compensation that the Trustees of the
Fund received for the Fund's fiscal year ended November 30, 1995, as well as the
compensation received for serving as Director or Trustee of all other funds
advised by the Manager.
Statement of Additional Information 19
INVESTMENT ADVISORY SERVICES
The Fund has an investment advisory agreement with Benham Management
Corporation, dated June 1, 1995, that was approved by shareholders on May 31,
1995.
The Manager is a California corporation and became a wholly owned
subsidiary of ACC on June 1, 1995. The Manager has served as investment advisor
to the Fund since the Fund's inception. ACC is a holding company that owns all
of the stock of the operating companies that provide the investment management,
transfer agency, shareholder service, and other services for the American
Century funds. James E. Stowers, Jr., controls ACC by virtue of his ownership of
a majority of its common stock. The Manager has been a registered investment
advisor since 1971.
The Fund's agreement with the Manager continues for an initial period of
two years and thereafter from year to year provided that, after the initial two
year period, it is approved at least annually by vote of either a majority of
the Fund's outstanding voting securities or by vote of a majority of the Fund's
Trustees, including a majority of those Trustees who are neither parties to the
agreement nor interested persons of any such party, cast in person at a meeting
called for the purpose of voting on such approval.
The investment advisory agreement is terminable on 60 days' written notice,
either by the Fund or by the Manager, to the other party, and terminates
automatically in the event of its assignment.
Pursuant to the investment advisory agreement, the Manager provides the
Fund with investment advice and portfolio management services in accordance with
the Fund's investment objective, policies, and restrictions. The Manager
determines what securities will be purchased and sold by the Fund and assists
the Trust's officers in carrying out decisions made by the Board of Trustees.
For these services, the Fund pays the Manager a monthly investment advisory
fee based on its pro rata share of the dollar amount derived from applying the
Trust's average daily net assets to the following investment advisory fee rate
schedule:
0.65% of the first $100 million;
0.60% of the next $100 million;
0.55% of the next $100 million;
0.50% of the next $100 million;
0.45% of the next $100 million;
0.37% of the next $1 billion;
0.34% of the next $1 billion;
0.31% of the next $1 billion;
0.30% of the next $1 billion;
0.29% of the next $1 billion;
0.28% of the next $1 billion; and
0.27% of the average daily net assets over $6.5 billion
Investment advisory fee paid by the Fund for the fiscal period ended
November 30, 1995, is $22,524. Fee amounts are net of reimbursements.
<TABLE>
<CAPTION>
TRUSTEE COMPENSATION FOR THE FISCAL YEAR ENDED NOVEMBER 30, 1995
Aggregate Pension or Retirement Estimated Total Compensation
Name of Compensation Benefits Accrued As Part Annual Benefits From Fund and Fund
Trustee* From The Fund of Fund Expenses Upon Retirement Complex** Paid to Trustees
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Albert A. Eisenstat $0 Not Applicable Not Applicable $0
Ronald J. Gilson $1,273 Not Applicable Not Applicable $48,583
Myron S. Scholes $2,787 Not Applicable Not Applicable $65,375
Kenneth E. Scott $2,845 Not Applicable Not Applicable $64,875
Ezra Solomon $2,784 Not Applicable Not Applicable $58,542
Isaac Stein $2,845 Not Applicable Not Applicable $63,375
Jeanne D. Wohlers $2,782 Not Applicable Not Applicable $67,173
- --------------------------------------------------------------------------------------------------------------------------------
* Interested Trustees receive no compensation for their services as such.
** American Century family of funds includes nearly 70 no-load mutual funds.
</TABLE>
20 American Century Investments
TRANSFER AND ADMINISTRATIVE SERVICES
American Century Services Corporation, 4500 Main Street, Kansas City,
Missouri, 64111, (ACS) acts as transfer, administrative services and dividend
paying agent for the Fund. ACS provides facilities, equipment and personnel to
the Fund and is paid for such services by the Fund. For administrative services,
the Fund pays ACS a monthly fee equal to its pro rata share of the dollar amount
derived from applying the average daily net assets of all of the Funds advised
by the Manager to the following administrative fee rate schedule:
Group Assets Administrative Fee Rate
- -----------------------------------------------------------------------------
up to $4.5 billion .11%
up to $6 billion .10
up to $9 billion .09
over $9 billion .08
- -----------------------------------------------------------------------------
For transfer agent services, the Fund pays ACS a monthly fee of $1.1875 for
each shareholder account maintained and $1.35 for each shareholder transaction
executed during that month.
The Fund paid $29,031 in administrative service fees and $59,873 in
transfer agent fees net of reimbursements for the fiscal period ended November
30, 1995.
DISTRIBUTION OF FUND SHARES
The Fund's shares are distributed by American Century Investment Services,
Inc. (the "Distributor"), a registered broker-dealer and an affiliate of the
Manager. The Manager pays all expenses for promoting and distributing the Fund's
shares offered by this Prospectus. The Fund does not pay any commissions or
other fees to the Distributor or to any other broker-dealers or financial
intermediaries in connection with the distribution of Fund shares.
DIRECT FUND EXPENSES
The Fund pays certain operating expenses that are not assumed by the
Manager or ACS. These include fees and expenses of the independent Trustees;
custodian, audit, tax preparation, and pricing fees; fees of outside counsel and
counsel employed directly by the Trust; costs of printing and mailing
prospectuses, statements of additional information, notices, proxy statements,
confirmations, and reports to shareholders; fees for registering the Fund's
shares under federal and state securities laws; brokerage fees and commissions;
trade association dues; costs of fidelity and liability insurance policies
covering the Fund; costs for incoming WATS lines maintained to receive and
handle shareholder inquiries; and organizational costs.
EXPENSE LIMITATION AGREEMENT
The Manager may recover amounts absorbed on behalf of the Fund during the
preceeding 11 months if, and to the extent that, for any given month, the Fund's
expense limit in effect at that time. The Manager has agreed to limit the Fund's
expenses to 1.00% of the Fund's average daily net assets until May 31, 1997.
The expense limit is subject to annual renewal.
Net amounts absorbed or recouped for the fiscal year ended November 30,
1995, is indicated below.
Fiscal Year Net Reimbursements (Recoupments)
- -----------------------------------------------------------------------------
1995 $183,426
- -----------------------------------------------------------------------------
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION
The Fund's shares are continuously offered at NAV. 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.
American Century may reject or limit the amount of an investment to prevent
any one shareholder or affiliated group from controlling the Trust or one of its
series; to avoid jeopardizing a portfolio's tax status; or whenever, in
management's opinion, such rejection 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.
Share purchases and redemptions are governed by California law.
As of July 31, 1996, to the knowledge of the Trust, no other shareholder
was the record holder or benefi-
Statement of Additional Information 21
cial owner of 5% or more of the Fund's total shares outstanding.
Fund Capital Manager
- -----------------------------------------------------------------------------
Shareholder Name and American Century Money
Address Purchase Plan
4500 Main Street
Kansas City, MO 64111
- -----------------------------------------------------------------------------
# of Shares Held 401,595.226
- -----------------------------------------------------------------------------
% of Total Shares
Outstanding 6.1%
- -----------------------------------------------------------------------------
OTHER INFORMATION
The Fund's investment advisor has been continuously registered with the SEC
under the Investment Advisers Act of 1940 since December 14, 1971. The Trust has
filed a registration statement under the Securities Act of 1933 and the
Investment Company Act of 1940 with respect to the shares offered. Such
registrations do not imply approval or supervision of the Trust or the advisor
by the SEC.
For further information, please refer to the registration statement and
exhibits on file with the SEC in Washington, D.C. 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.
22 American Century Investments
NOTES
Statement of Additional Information Notes 23
NOTES
24 Notes American Century Investments
NOTES
Statement of Additional Information Notes 25
P.O. Box 419200
Kansas City, Missouri
64141-6200
Person-to-person assistance:
1-800-345-2021 or 816-531-5575
Automated Information Line:
1-800-345-8765
Telecommunications Device for the Deaf:
1-800-634-4113 or 816-753-1865
Fax: 816-340-7962
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