UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number | 811-05447 | |||||
AMERICAN CENTURY QUANTITATIVE EQUITY FUNDS, INC. | ||||||
(Exact name of registrant as specified in charter) | ||||||
4500 MAIN STREET, KANSAS CITY, MISSOURI | 64111 | |||||
(Address of principal executive offices) | (Zip Code) | |||||
CHARLES A. ETHERINGTON 4500 MAIN STREET, KANSAS CITY, MISSOURI 64111 | ||||||
(Name and address of agent for service) | ||||||
Registrant’s telephone number, including area code: | 816-531-5575 | |||||
Date of fiscal year end: | 06-30 | |||||
Date of reporting period: | 12-31-2019 |
ITEM 1. REPORTS TO STOCKHOLDERS.
SEMIANNUAL REPORT | |
DECEMBER 31, 2019 | |
AC Alternatives® Disciplined Long Short Fund |
Investor Class (ACDJX) |
I Class (ACDKX) |
A Class (ACDQX) |
C Class (ACDHX) |
R Class (ACDWX) |
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the fund’s shareholder reports like this one will no longer be sent by mail, unless you specifically request paper copies of the reports from the fund or from your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the fund or your financial intermediary electronically by calling or sending an email request to your appropriate contacts as listed on the back cover of this report.
You may elect to receive all future reports in paper free of charge. You can inform the fund or your financial intermediary that you wish to continue receiving paper copies of your shareholder reports by calling or sending an email request to your appropriate contacts as listed on the back cover of this report. Your election to receive reports in paper will apply to all funds held with the fund complex/your financial intermediary.
Table of Contents |
Any opinions expressed in this report reflect those of the author as of the date of the report, and do not necessarily represent the opinions of American Century Investments® or any other person in the American Century Investments organization. Any such opinions are subject to change at any time based upon market or other conditions and American Century Investments disclaims any responsibility to update such opinions. These opinions may not be relied upon as investment advice and, because investment decisions made by American Century Investments funds are based on numerous factors, may not be relied upon as an indication of trading intent on behalf of any American Century Investments fund. Security examples are used for representational purposes only and are not intended as recommendations to purchase or sell securities. Performance information for comparative indices and securities is provided to American Century Investments by third party vendors. To the best of American Century Investments’ knowledge, such information is accurate at the time of printing.
President’s Letter |
Jonathan Thomas
Dear Investor:
Thank you for reviewing this semiannual report for the period ended December 31, 2019. It provides a market overview (below), followed by a schedule of fund investments and other financial information. For additional commentary and information on fund performance, plus other investment insights, please visit our website, americancentury.com.
All Asset Classes Advanced
From higher-quality government bonds to higher-risk stocks and commodities, all major U.S. and global asset classes posted gains for the six-month period. U.S. stocks, as measured by the S&P 500 Index, advanced almost 11% for the period, outpacing the nearly 9% return for global stocks (MSCI ACWI). Income-oriented assets, including U.S. and global bonds and dividend-paying stocks, generally posted more-modest gains.
A key policy pivot from the Federal Reserve (Fed) helped set the stage for the rally. After abruptly ending its three-year rate-hike campaign in early 2019, the Fed cut rates in July. Ongoing concerns about global economic risks, including trade policy uncertainty, prompted this first Fed easing move in 10 years. And with global risks still looming, the Fed cut rates again in September and October before pausing. Similarly, the European Central Bank cut a key deposit rate and relaunched quantitative easing in a move to spark growth. These efforts helped push global yields lower, which aided performance among interest rate-sensitive assets.
Accommodative central bank policy and a lower interest rate backdrop also aided performance in equity markets. Additionally, modestly improving economic and earnings data calmed investors’ earlier worries and nudged stock returns higher. In December, a series of upbeat data helped stocks end the period on a high note. U.K. Prime Minister Boris Johnson and his Conservative Party won a decisive election victory, which resolved some lingering Brexit uncertainty. On the trade front, the U.S. House of Representatives approved the U.S.-Mexico-Canada Agreement, and the U.S. and China reached a phase 1 deal, further fueling investor optimism.
Looking ahead, we expect volatility to remain a factor as investors react to global growth trends, ongoing U.S.-China trade negotiations, central bank policy and geopolitical forces. We believe this scenario underscores the importance of using professionally managed portfolios in pursuit of investment goals. We appreciate your continued trust and confidence in us.
Sincerely,
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
2
Fund Characteristics |
DECEMBER 31, 2019 | |
Top Ten Long Holdings | % of net assets |
Apple, Inc. | 2.12% |
CDW Corp. | 2.05% |
Microsoft Corp. | 2.01% |
Facebook, Inc., Class A | 1.97% |
Royal Gold, Inc. | 1.95% |
Verizon Communications, Inc. | 1.95% |
Intuit, Inc. | 1.95% |
EMCOR Group, Inc. | 1.95% |
Oracle Corp. (New York) | 1.93% |
Progressive Corp. (The) | 1.92% |
Top Five Short Holdings | % of net assets |
LivePerson, Inc. | (1.95)% |
Pinnacle Financial Partners, Inc. | (1.84)% |
8x8, Inc. | (1.69)% |
IPG Photonics Corp. | (1.21)% |
Independent Bank Corp. (Massachusetts) | (1.18)% |
Types of Investments in Portfolio | % of net assets |
Common Stocks | 108.6% |
Rights | —* |
Common Stocks Sold Short | (36.2)% |
Other Assets and Liabilities | 27.6%** |
*Category is less than 0.05% of total net assets.
**Amount relates primarily to deposits for securities sold short at period end.
3
Shareholder Fee Example |
Fund shareholders may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption/exchange fees; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in your fund and to compare these costs with the ongoing cost of investing in other mutual funds.
The example is based on an investment of $1,000 made at the beginning of the period and held for the entire period from July 1, 2019 to December 31, 2019.
Actual Expenses
The table provides information about actual account values and actual expenses for each class. You may use the information, together with the amount you invested, to estimate the expenses that you paid over the period. First, identify the share class you own. Then simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
If you hold Investor Class shares of any American Century Investments fund, or I Class shares of the American Century Diversified Bond Fund, in an American Century Investments account (i.e., not a financial intermediary or retirement plan account), American Century Investments may charge you a $12.50 semiannual account maintenance fee if the value of those shares is less than $10,000. We will redeem shares automatically in one of your accounts to pay the $12.50 fee. In determining your total eligible investment amount, we will include your investments in all personal accounts (including American Century Investments Brokerage accounts) registered under your Social Security number. Personal accounts include individual accounts, joint accounts, UGMA/UTMA accounts, personal trusts, Coverdell Education Savings Accounts and IRAs (including traditional, Roth, Rollover, SEP-, SARSEP- and SIMPLE-IRAs), and certain other retirement accounts. If you have only business, business retirement, employer-sponsored or American Century Investments Brokerage accounts, you are currently not subject to this fee. If you are subject to the Account Maintenance Fee, your account value could be reduced by the fee amount.
Hypothetical Example for Comparison Purposes
The table also provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio of each class of your fund and an assumed rate of return of 5% per year before expenses, which is not the actual return of a fund’s share class. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) or redemption/exchange fees. Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
4
Beginning Account Value 7/1/19 | Ending Account Value 12/31/19 | Expenses Paid During Period(1) 7/1/19 - 12/31/19 | Annualized Expense Ratio(1) | |
Actual | ||||
Investor Class | $1,000 | $1,012.00 | $10.17 | 2.01% |
I Class | $1,000 | $1,012.70 | $9.16 | 1.81% |
A Class | $1,000 | $1,010.80 | $11.42 | 2.26% |
C Class | $1,000 | $1,006.90 | $15.18 | 3.01% |
R Class | $1,000 | $1,009.00 | $12.68 | 2.51% |
Hypothetical | ||||
Investor Class | $1,000 | $1,015.03 | $10.18 | 2.01% |
I Class | $1,000 | $1,016.04 | $9.17 | 1.81% |
A Class | $1,000 | $1,013.78 | $11.44 | 2.26% |
C Class | $1,000 | $1,010.00 | $15.21 | 3.01% |
R Class | $1,000 | $1,012.52 | $12.70 | 2.51% |
(1) | Expenses are equal to the class's annualized expense ratio listed in the table above, multiplied by the average account value over the period, multiplied by 184, the number of days in the most recent fiscal half-year, divided by 366, to reflect the one-half year period. Annualized expense ratio reflects actual expenses, including any applicable fee waivers or expense reimbursements and excluding any acquired fund fees and expenses. |
5
Schedule of Investments |
DECEMBER 31, 2019 (UNAUDITED)
Shares | Value | |||
COMMON STOCKS — 108.6% | ||||
Aerospace and Defense — 0.9% | ||||
Curtiss-Wright Corp. | 449 | $ | 63,260 | |
L3Harris Technologies, Inc. | 712 | 140,883 | ||
Mercury Systems, Inc.(1) | 914 | 63,167 | ||
267,310 | ||||
Air Freight and Logistics — 1.0% | ||||
CH Robinson Worldwide, Inc. | 3,064 | 239,605 | ||
United Parcel Service, Inc., Class B | 423 | 49,516 | ||
289,121 | ||||
Auto Components — 0.3% | ||||
Gentex Corp. | 3,288 | 95,286 | ||
Banks — 11.7% | ||||
Bank of America Corp. | 10,014 | 352,693 | ||
Comerica, Inc. | 7,801 | 559,722 | ||
East West Bancorp, Inc.(2) | 8,500 | 413,950 | ||
Fifth Third Bancorp | 15,615 | 480,005 | ||
JPMorgan Chase & Co. | 2,190 | 305,286 | ||
Popular, Inc. | 1,799 | 105,691 | ||
SVB Financial Group(1)(2) | 900 | 225,936 | ||
United Community Banks, Inc. | 13,075 | 403,756 | ||
Wells Fargo & Co.(2) | 9,744 | 524,227 | ||
Zions Bancorp N.A.(2) | 2,145 | 111,369 | ||
3,482,635 | ||||
Beverages — 3.9% | ||||
Coca-Cola Co. (The)(2) | 9,939 | 550,124 | ||
Monster Beverage Corp.(1) | 1,482 | 94,181 | ||
PepsiCo, Inc.(2) | 3,708 | 506,772 | ||
1,151,077 | ||||
Biotechnology — 3.4% | ||||
AbbVie, Inc. | 2,573 | 227,813 | ||
Amgen, Inc. | 954 | 229,981 | ||
Biogen, Inc.(1) | 659 | 195,545 | ||
Gilead Sciences, Inc. | 2,351 | 152,768 | ||
Incyte Corp.(1) | 2,393 | 208,957 | ||
1,015,064 | ||||
Building Products — 1.5% | ||||
Builders FirstSource, Inc.(1) | 9,641 | 244,978 | ||
Johnson Controls International plc | 1,634 | 66,520 | ||
Masco Corp. | 2,673 | 128,277 | ||
439,775 | ||||
Capital Markets — 1.9% | ||||
Evercore, Inc., Class A | 2,906 | 217,253 |
6
Shares | Value | |||
MarketAxess Holdings, Inc. | 308 | $ | 116,766 | |
MSCI, Inc. | 929 | 239,849 | ||
573,868 | ||||
Chemicals — 1.5% | ||||
Axalta Coating Systems Ltd.(1) | 952 | 28,941 | ||
NewMarket Corp. | 297 | 144,496 | ||
Valvoline, Inc. | 12,163 | 260,410 | ||
433,847 | ||||
Commercial Services and Supplies — 3.7% | ||||
Cimpress plc(1) | 124 | 15,595 | ||
Republic Services, Inc.(2) | 6,030 | 540,469 | ||
Ritchie Bros Auctioneers, Inc. | 3,927 | 168,665 | ||
Tetra Tech, Inc. | 2,459 | 211,867 | ||
Waste Management, Inc. | 1,433 | 163,305 | ||
1,099,901 | ||||
Communications Equipment — 1.4% | ||||
Cisco Systems, Inc. | 3,316 | 159,035 | ||
Motorola Solutions, Inc. | 1,550 | 249,767 | ||
408,802 | ||||
Construction and Engineering — 2.4% | ||||
EMCOR Group, Inc. | 6,683 | 576,743 | ||
MasTec, Inc.(1) | 2,208 | 141,665 | ||
718,408 | ||||
Consumer Finance — 2.0% | ||||
Discover Financial Services | 4,068 | 345,048 | ||
Synchrony Financial | 7,111 | 256,067 | ||
601,115 | ||||
Containers and Packaging — 1.2% | ||||
Ardagh Group SA | 12,162 | 238,132 | ||
Berry Global Group, Inc.(1) | 926 | 43,976 | ||
Packaging Corp. of America | 664 | 74,361 | ||
356,469 | ||||
Diversified Telecommunication Services — 2.6% | ||||
CenturyLink, Inc. | 14,313 | 189,075 | ||
Verizon Communications, Inc.(2) | 9,411 | 577,835 | ||
766,910 | ||||
Electric Utilities — 0.3% | ||||
IDACORP, Inc. | 700 | 74,760 | ||
NextEra Energy, Inc. | 76 | 18,404 | ||
93,164 | ||||
Electronic Equipment, Instruments and Components — 4.8% | ||||
CDW Corp.(2) | 4,252 | 607,355 | ||
FLIR Systems, Inc. | 3,268 | 170,165 | ||
Keysight Technologies, Inc.(1) | 2,514 | 258,012 | ||
National Instruments Corp. | 4,756 | 201,369 | ||
Zebra Technologies Corp., Class A(1)(2) | 736 | 188,004 | ||
1,424,905 |
7
Shares | Value | |||
Entertainment — 0.7% | ||||
Electronic Arts, Inc.(1) | 1,950 | $ | 209,645 | |
Equity Real Estate Investment Trusts (REITs) — 4.7% | ||||
American Tower Corp. | 1,125 | 258,548 | ||
Equity Lifestyle Properties, Inc. | 2,482 | 174,708 | ||
Extra Space Storage, Inc. | 1,987 | 209,867 | ||
GEO Group, Inc. (The) | 6,157 | 102,268 | ||
National Storage Affiliates Trust | 544 | 18,289 | ||
PS Business Parks, Inc.(2) | 2,693 | 443,995 | ||
SBA Communications Corp. | 270 | 65,067 | ||
Weingarten Realty Investors | 3,624 | 113,214 | ||
1,385,956 | ||||
Food and Staples Retailing — 0.1% | ||||
Performance Food Group Co.(1) | 794 | 40,875 | ||
Food Products — 2.5% | ||||
Flowers Foods, Inc. | 820 | 17,827 | ||
General Mills, Inc. | 2,921 | 156,449 | ||
Hershey Co. (The) | 3,739 | 549,558 | ||
Simply Good Foods Co. (The)(1) | 552 | 15,754 | ||
739,588 | ||||
Health Care Equipment and Supplies — 1.5% | ||||
Align Technology, Inc.(1) | 393 | 109,663 | ||
Hologic, Inc.(1) | 3,815 | 199,181 | ||
NuVasive, Inc.(1) | 1,708 | 132,097 | ||
440,941 | ||||
Health Care Technology — 0.5% | ||||
Veeva Systems, Inc., Class A(1) | 1,129 | 158,805 | ||
Hotels, Restaurants and Leisure — 0.2% | ||||
Texas Roadhouse, Inc. | 988 | 55,644 | ||
Household Products — 0.7% | ||||
Colgate-Palmolive Co. | 2,109 | 145,184 | ||
Procter & Gamble Co. (The) | 537 | 67,071 | ||
212,255 | ||||
Insurance — 1.9% | ||||
Progressive Corp. (The)(2) | 7,877 | 570,216 | ||
Interactive Media and Services — 3.4% | ||||
Alphabet, Inc., Class A(1)(2) | 321 | 429,944 | ||
Facebook, Inc., Class A(1)(2) | 2,848 | 584,552 | ||
1,014,496 | ||||
Internet and Direct Marketing Retail — 2.7% | ||||
Amazon.com, Inc.(1) | 302 | 558,048 | ||
eBay, Inc. | 6,403 | 231,212 | ||
789,260 | ||||
IT Services — 7.8% | ||||
Akamai Technologies, Inc.(1) | 1,248 | 107,802 | ||
Amdocs Ltd. | 876 | 63,238 | ||
Booz Allen Hamilton Holding Corp.(2) | 6,019 | 428,131 |
8
Shares | Value | |||
EVERTEC, Inc. | 2,867 | $ | 97,593 | |
Mastercard, Inc., Class A(2) | 1,827 | 545,524 | ||
PayPal Holdings, Inc.(1)(2) | 4,875 | 527,329 | ||
Visa, Inc., Class A | 2,915 | 547,729 | ||
2,317,346 | ||||
Life Sciences Tools and Services — 2.0% | ||||
Bio-Rad Laboratories, Inc., Class A(1) | 196 | 72,526 | ||
Thermo Fisher Scientific, Inc.(2) | 1,592 | 517,193 | ||
589,719 | ||||
Machinery — 0.7% | ||||
Allison Transmission Holdings, Inc. | 4,179 | 201,929 | ||
Metals and Mining — 2.3% | ||||
Kinross Gold Corp. (New York)(1) | 18,855 | 89,373 | ||
Royal Gold, Inc.(2) | 4,730 | 578,242 | ||
667,615 | ||||
Oil, Gas and Consumable Fuels — 1.3% | ||||
Continental Resources, Inc. | 3,683 | 126,327 | ||
EOG Resources, Inc. | 742 | 62,150 | ||
HollyFrontier Corp. | 3,715 | 188,388 | ||
376,865 | ||||
Pharmaceuticals — 1.7% | ||||
Bristol-Myers Squibb Co. | 2,098 | 134,671 | ||
Horizon Therapeutics plc(1) | 6,271 | 227,010 | ||
Jazz Pharmaceuticals plc(1) | 837 | 124,947 | ||
Zoetis, Inc. | 242 | 32,029 | ||
518,657 | ||||
Professional Services — 3.6% | ||||
CoStar Group, Inc.(1) | 698 | 417,613 | ||
IHS Markit Ltd.(1) | 5,865 | 441,928 | ||
Verisk Analytics, Inc. | 1,365 | 203,849 | ||
1,063,390 | ||||
Semiconductors and Semiconductor Equipment — 5.9% | ||||
Analog Devices, Inc. | 515 | 61,203 | ||
Cirrus Logic, Inc.(1) | 2,305 | 189,955 | ||
Inphi Corp.(1) | 3,093 | 228,944 | ||
Intel Corp. | 3,272 | 195,829 | ||
KLA Corp. | 2,695 | 480,168 | ||
Qorvo, Inc.(1)(2) | 3,565 | 414,360 | ||
Texas Instruments, Inc. | 1,396 | 179,093 | ||
1,749,552 | ||||
Software — 11.2% | ||||
Adobe, Inc.(1) | 619 | 204,152 | ||
ANSYS, Inc.(1) | 1,403 | 361,146 | ||
Cadence Design Systems, Inc.(1)(2) | 5,914 | 410,195 | ||
Fortinet, Inc.(1) | 469 | 50,071 | ||
Intuit, Inc.(2) | 2,204 | 577,294 | ||
LogMeIn, Inc. | 857 | 73,479 |
9
Shares | Value | |||
Microsoft Corp.(2) | 3,786 | $ | 597,052 | |
Open Text Corp. | 4,007 | 176,589 | ||
Oracle Corp. (New York)(2) | 10,781 | 571,177 | ||
Proofpoint, Inc.(1) | 936 | 107,434 | ||
ServiceNow, Inc.(1) | 284 | 80,179 | ||
Synopsys, Inc.(1) | 365 | 50,808 | ||
Verint Systems, Inc.(1) | 1,049 | 58,073 | ||
3,317,649 | ||||
Specialty Retail — 2.6% | ||||
AutoZone, Inc.(1) | 443 | 527,750 | ||
Murphy USA, Inc.(1) | 701 | 82,017 | ||
O'Reilly Automotive, Inc.(1) | 335 | 146,817 | ||
756,584 | ||||
Technology Hardware, Storage and Peripherals — 2.1% | ||||
Apple, Inc.(2) | 2,139 | 628,117 | ||
Textiles, Apparel and Luxury Goods — 0.3% | ||||
NIKE, Inc., Class B | 999 | 101,209 | ||
Thrifts and Mortgage Finance — 3.0% | ||||
Essent Group Ltd.(2) | 8,739 | 454,341 | ||
Flagstar Bancorp, Inc. | 7,584 | 290,088 | ||
Radian Group, Inc. | 5,178 | 130,278 | ||
874,707 | ||||
Trading Companies and Distributors — 0.7% | ||||
HD Supply Holdings, Inc.(1) | 4,947 | 198,968 | ||
TOTAL COMMON STOCKS (Cost $25,644,392) | 32,197,645 | |||
RIGHTS† | ||||
Pharmaceuticals† | ||||
Bristol-Myers Squibb Co.(1) (Cost $4,469) | 2,098 | 6,315 | ||
TOTAL INVESTMENT SECURITIES BEFORE SECURITIES SOLD SHORT — 108.6% (Cost $25,648,861) | 32,203,960 | |||
COMMON STOCKS SOLD SHORT — (36.2)% | ||||
Aerospace and Defense — (0.9)% | ||||
Arconic, Inc. | (4,465) | (137,388 | ) | |
Axon Enterprise, Inc. | (1,137) | (83,319 | ) | |
BWX Technologies, Inc. | (682) | (42,339 | ) | |
(263,046 | ) | |||
Auto Components — (0.1)% | ||||
Dorman Products, Inc. | (239) | (18,097 | ) | |
Banks — (5.3)% | ||||
BOK Financial Corp. | (1,237) | (108,114 | ) | |
First Financial Bancorp | (3,659) | (93,085 | ) | |
Fulton Financial Corp. | (2,168) | (37,788 | ) | |
Independent Bank Corp. (Massachusetts) | (4,189) | (348,734 | ) | |
Old National Bancorp | (2,772) | (50,700 | ) | |
People's United Financial, Inc. | (11,628) | (196,513 | ) | |
Pinnacle Financial Partners, Inc. | (8,523) | (545,472 | ) |
10
Shares | Value | |||
United Bankshares, Inc. | (4,944) | $ | (191,135 | ) |
(1,571,541 | ) | |||
Biotechnology — (2.0)% | ||||
Exact Sciences Corp. | (613) | (56,690 | ) | |
Global Blood Therapeutics, Inc. | (1,104) | (87,757 | ) | |
Immunomedics, Inc. | (4,122) | (87,222 | ) | |
Madrigal Pharmaceuticals, Inc. | (418) | (38,084 | ) | |
Mirati Therapeutics, Inc. | (702) | (90,460 | ) | |
PTC Therapeutics, Inc. | (491) | (23,583 | ) | |
Sage Therapeutics, Inc. | (621) | (44,830 | ) | |
Sarepta Therapeutics, Inc. | (705) | (90,973 | ) | |
Ultragenyx Pharmaceutical, Inc. | (1,795) | (76,664 | ) | |
(596,263 | ) | |||
Capital Markets — (1.0)% | ||||
Ares Management Corp., Class A | (2,330) | (83,158 | ) | |
Brookfield Asset Management, Inc., Class A | (1,692) | (97,798 | ) | |
KKR & Co., Inc., Class A | (3,484) | (101,628 | ) | |
(282,584 | ) | |||
Chemicals — (0.4)% | ||||
International Flavors & Fragrances, Inc. | (875) | (112,892 | ) | |
Construction and Engineering — (0.4)% | ||||
Fluor Corp. | (1,720) | (32,473 | ) | |
Granite Construction, Inc. | (3,328) | (92,086 | ) | |
(124,559 | ) | |||
Diversified Consumer Services — (0.4)% | ||||
Laureate Education, Inc., Class A | (6,839) | (120,435 | ) | |
Diversified Telecommunication Services — (0.2)% | ||||
Iridium Communications, Inc. | (2,798) | (68,943 | ) | |
Electric Utilities — (0.6)% | ||||
Eversource Energy | (2,105) | (179,072 | ) | |
Electronic Equipment, Instruments and Components — (1.2)% | ||||
IPG Photonics Corp. | (2,483) | (359,836 | ) | |
Entertainment — (1.1)% | ||||
Walt Disney Co. (The) | (2,164) | (312,979 | ) | |
Equity Real Estate Investment Trusts (REITs) — (1.1)% | ||||
Alexandria Real Estate Equities, Inc. | (1,132) | (182,909 | ) | |
Omega Healthcare Investors, Inc. | (1,035) | (43,832 | ) | |
PotlatchDeltic Corp. | (2,004) | (86,713 | ) | |
(313,454 | ) | |||
Health Care Equipment and Supplies — (1.8)% | ||||
Avanos Medical, Inc. | (1,916) | (64,569 | ) | |
Cantel Medical Corp. | (1,380) | (97,842 | ) | |
Merit Medical Systems, Inc. | (6,119) | (191,035 | ) | |
Neogen Corp. | (2,446) | (159,626 | ) | |
Wright Medical Group NV | (598) | (18,227 | ) | |
(531,299 | ) | |||
Health Care Technology — (0.6)% | ||||
Teladoc Health, Inc. | (2,266) | (189,710 | ) |
11
Shares | Value | |||
Hotels, Restaurants and Leisure — (3.0)% | ||||
Hyatt Hotels Corp., Class A | (2,599) | $ | (233,156 | ) |
Marriott International, Inc., Class A | (158) | (23,926 | ) | |
Marriott Vacations Worldwide Corp. | (1,741) | (224,171 | ) | |
Shake Shack, Inc., Class A | (2,037) | (121,344 | ) | |
Wendy's Co. (The) | (2,823) | (62,699 | ) | |
Wyndham Hotels & Resorts, Inc. | (2,645) | (166,133 | ) | |
Wynn Resorts Ltd. | (363) | (50,410 | ) | |
(881,839 | ) | |||
Interactive Media and Services — (0.8)% | ||||
Zillow Group, Inc., Class C | (4,947) | (227,265 | ) | |
Internet and Direct Marketing Retail — (0.4)% | ||||
Wayfair, Inc., Class A | (1,323) | (119,560 | ) | |
IT Services — (1.3)% | ||||
Fiserv, Inc. | (323) | (37,348 | ) | |
LiveRamp Holdings, Inc. | (1,295) | (62,251 | ) | |
Twilio, Inc., Class A | (2,341) | (230,073 | ) | |
Verra Mobility Corp. | (4,750) | (66,453 | ) | |
(396,125 | ) | |||
Machinery — (0.9)% | ||||
Deere & Co. | (376) | (65,146 | ) | |
Donaldson Co., Inc. | (642) | (36,992 | ) | |
Welbilt, Inc. | (10,058) | (157,005 | ) | |
(259,143 | ) | |||
Media — (0.6)% | ||||
New York Times Co. (The), Class A | (5,895) | (189,642 | ) | |
Multi-Utilities — (0.5)% | ||||
Ameren Corp. | (1,860) | (142,848 | ) | |
Oil, Gas and Consumable Fuels — (0.4)% | ||||
Cheniere Energy, Inc. | (681) | (41,589 | ) | |
Diamondback Energy, Inc. | (708) | (65,745 | ) | |
(107,334 | ) | |||
Pharmaceuticals — (0.8)% | ||||
Catalent, Inc. | (1,742) | (98,075 | ) | |
MyoKardia, Inc. | (1,004) | (73,176 | ) | |
Zogenix, Inc. | (1,485) | (77,413 | ) | |
(248,664 | ) | |||
Semiconductors and Semiconductor Equipment — (1.8)% | ||||
Advanced Micro Devices, Inc. | (889) | (40,770 | ) | |
Brooks Automation, Inc. | (2,035) | (85,389 | ) | |
Cabot Microelectronics Corp. | (1,429) | (206,233 | ) | |
First Solar, Inc. | (3,672) | (205,485 | ) | |
(537,877 | ) | |||
Software — (6.6)% | ||||
2U, Inc. | (9,398) | (225,458 | ) | |
8x8, Inc. | (27,302) | (499,627 | ) | |
Alteryx, Inc., Class A | (596) | (59,642 | ) |
12
Shares | Value | |||
Envestnet, Inc. | (3,602) | $ | (250,807 | ) |
LivePerson, Inc. | (15,608) | (577,496 | ) | |
Pluralsight, Inc., Class A | (12,814) | (220,529 | ) | |
Q2 Holdings, Inc. | (496) | (40,216 | ) | |
Smartsheet, Inc., Class A | (2,019) | (90,693 | ) | |
(1,964,468 | ) | |||
Specialty Retail — (0.3)% | ||||
Gap, Inc. (The) | (5,719) | (101,112 | ) | |
Textiles, Apparel and Luxury Goods — (0.8)% | ||||
Canada Goose Holdings, Inc. | (5,267) | (190,876 | ) | |
PVH Corp. | (544) | (57,202 | ) | |
(248,078 | ) | |||
Trading Companies and Distributors — (0.9)% | ||||
Air Lease Corp. | (5,297) | (251,713 | ) | |
TOTAL COMMON STOCKS SOLD SHORT (Proceeds $10,560,820) | (10,720,378 | ) | ||
OTHER ASSETS AND LIABILITIES(3) — 27.6% | 8,167,851 | |||
TOTAL NET ASSETS — 100.0% | $ | 29,651,433 |
NOTES TO SCHEDULE OF INVESTMENTS |
† | Category is less than 0.05% of total net assets. |
(1) | Non-income producing. |
(2) | Security, or a portion thereof, has been pledged at the custodian bank or with a broker for collateral requirements on securities sold short. At the period end, the aggregate value of securities pledged was $5,243,742. |
(3) | Amount relates primarily to deposits for securities sold short at period end. |
See Notes to Financial Statements.
13
Statement of Assets and Liabilities |
DECEMBER 31, 2019 (UNAUDITED) | |||
Assets | |||
Investment securities, at value (cost of $25,648,861) | $ | 32,203,960 | |
Foreign currency holdings, at value (cost of $25) | 26 | ||
Deposits for securities sold short | 8,241,841 | ||
Receivable for capital shares sold | 2,584 | ||
Dividends and interest receivable | 33,062 | ||
40,481,473 | |||
Liabilities | |||
Securities sold short, at value (proceeds of $10,560,820) | 10,720,378 | ||
Disbursements in excess of demand deposit cash | 5,267 | ||
Payable for capital shares redeemed | 52,289 | ||
Accrued management fees | 38,726 | ||
Distribution and service fees payable | 1,698 | ||
Dividend expense payable on securities sold short | 11,682 | ||
10,830,040 | |||
Net Assets | $ | 29,651,433 | |
Net Assets Consist of: | |||
Capital (par value and paid-in surplus) | $ | 24,715,226 | |
Distributable earnings | 4,936,207 | ||
$ | 29,651,433 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | ||||
Investor Class, $0.01 Par Value | $24,529,165 | 1,406,362 | $17.44 | |||
I Class, $0.01 Par Value | $1,706,568 | 97,445 | $17.51 | |||
A Class, $0.01 Par Value | $1,219,989 | 71,021 | $17.18* | |||
C Class, $0.01 Par Value | $1,171,086 | 72,819 | $16.08 | |||
R Class, $0.01 Par Value | $1,024,625 | 60,829 | $16.84 |
*Maximum offering price $18.23 (net asset value divided by 0.9425).
See Notes to Financial Statements.
14
Statement of Operations |
FOR THE SIX MONTHS ENDED DECEMBER 31, 2019 (UNAUDITED) | |||
Investment Income (Loss) | |||
Income: | |||
Dividends (net of foreign taxes withheld of $10,256) | $ | 374,695 | |
Interest | 156,576 | ||
531,271 | |||
Expenses: | |||
Dividend expense on securities sold short | 128,702 | ||
Management fees | 322,256 | ||
Distribution and service fees: | |||
A Class | 1,748 | ||
C Class | 6,627 | ||
R Class | 2,531 | ||
Directors' fees and expenses | 1,866 | ||
463,730 | |||
Net investment income (loss) | 67,541 | ||
Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investment transactions | 1,761,010 | ||
Securities sold short transactions | (1,246,616 | ) | |
Foreign currency translation transactions | (9,957 | ) | |
504,437 | |||
Change in net unrealized appreciation (depreciation) on: | |||
Investments | (810,170 | ) | |
Securities sold short | 505,296 | ||
Translation of assets and liabilities in foreign currencies | (236 | ) | |
(305,110 | ) | ||
Net realized and unrealized gain (loss) | 199,327 | ||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 266,868 |
See Notes to Financial Statements.
15
Statement of Changes in Net Assets |
SIX MONTHS ENDED DECEMBER 31, 2019 (UNAUDITED) AND YEAR ENDED JUNE 30, 2019 | ||||||
Increase (Decrease) in Net Assets | December 31, 2019 | June 30, 2019 | ||||
Operations | ||||||
Net investment income (loss) | $ | 67,541 | $ | 168,447 | ||
Net realized gain (loss) | 504,437 | (282,377 | ) | |||
Change in net unrealized appreciation (depreciation) | (305,110 | ) | 1,042,361 | |||
Net increase (decrease) in net assets resulting from operations | 266,868 | 928,431 | ||||
Distributions to Shareholders | ||||||
From earnings: | ||||||
Investor Class | (66,791 | ) | (2,086,696 | ) | ||
I Class | (7,991 | ) | (493,394 | ) | ||
A Class | (227 | ) | (92,518 | ) | ||
C Class | — | (97,278 | ) | |||
R Class | — | (56,435 | ) | |||
Decrease in net assets from distributions | (75,009 | ) | (2,826,321 | ) | ||
Capital Share Transactions | ||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | (21,714,888 | ) | 4,147,559 | |||
Net increase (decrease) in net assets | (21,523,029 | ) | 2,249,669 | |||
Net Assets | ||||||
Beginning of period | 51,174,462 | 48,924,793 | ||||
End of period | $ | 29,651,433 | $ | 51,174,462 |
See Notes to Financial Statements.
16
Notes to Financial Statements |
DECEMBER 31, 2019 (UNAUDITED)
1. Organization
American Century Quantitative Equity Funds, Inc. (the corporation) is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company and is organized as a Maryland corporation. AC Alternatives Disciplined Long Short Fund (the fund) is one fund in a series issued by the corporation. The fund’s investment objective is to seek long-term capital growth.
The fund offers the Investor Class, I Class, A Class, C Class and R Class. The A Class may incur an initial sales charge. The A Class and C Class may be subject to a contingent deferred sales charge.
2. Significant Accounting Policies
The following is a summary of significant accounting policies consistently followed by the fund in preparation of its financial statements. The fund is an investment company and follows accounting and reporting guidance in accordance with accounting principles generally accepted in the United States of America. This may require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from these estimates. Management evaluated the impact of events or transactions occurring through the date the financial statements were issued that would merit recognition or disclosure.
Investment Valuations — The fund determines the fair value of its investments and computes its net asset value per share at the close of regular trading (usually 4 p.m. Eastern time) on the New York Stock Exchange (NYSE) on each day the NYSE is open. The Board of Directors has adopted valuation policies and procedures to guide the investment advisor in the fund’s investment valuation process and to provide methodologies for the oversight of the fund’s pricing function.
Equity securities that are listed or traded on a domestic securities exchange are valued at the last reported sales price or at the official closing price as provided by the exchange. Equity securities traded on foreign securities exchanges are generally valued at the closing price of such securities on the exchange where primarily traded or at the close of the NYSE, if that is earlier. If no last sales price is reported, or if local convention or regulation so provides, the mean of the latest bid and asked prices may be used. Securities traded over-the-counter are valued at the mean of the latest bid and asked prices, the last sales price, or the official closing price. Equity securities initially expressed in local currencies are translated into U.S. dollars at the mean of the appropriate currency exchange rate at the close of the NYSE as provided by an independent pricing service.
Open-end management investment companies are valued at the reported net asset value per share. Repurchase agreements are valued at cost, which approximates fair value.
If the fund determines that the market price for an investment is not readily available or the valuation methods mentioned above do not reflect an investment’s fair value, such investment is valued as determined in good faith by the Board of Directors or its delegate, in accordance with policies and procedures adopted by the Board of Directors. In its determination of fair value, the fund may review several factors including, but not limited to, market information regarding the specific investment or comparable investments and correlation with other investment types, futures indices or general market indicators. Circumstances that may cause the fund to use these procedures to value an investment include, but are not limited to: an investment has been declared in default or is distressed; trading in a security has been suspended during the trading day or a security is not actively trading on its principal exchange; prices received from a regular pricing source are deemed unreliable; or there is a foreign market holiday and no trading occurred.
17
The fund monitors for significant events occurring after the close of an investment’s primary exchange but before the fund’s net asset value per share is determined. Significant events may include, but are not limited to: corporate announcements and transactions; governmental action and political unrest that could impact a specific investment or an investment sector; or armed conflicts, natural disasters and similar events that could affect investments in a specific country or region. The fund also monitors for significant fluctuations between domestic and foreign markets, as evidenced by the U.S. market or such other indicators that the Board of Directors, or its delegate, deems appropriate. The fund may apply a model-derived factor to the closing price of equity securities traded on foreign securities exchanges. The factor is based on observable market data as provided by an independent pricing service.
Security Transactions — Security transactions are accounted for as of the trade date. Net realized gains and losses are determined on the identified cost basis, which is also used for federal income tax purposes.
Investment Income — Dividend income less foreign taxes withheld, if any, is recorded as of the ex-dividend date. Distributions received on securities that represent a return of capital or long-term capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The fund may estimate the components of distributions received that may be considered nontaxable distributions or long-term capital gain distributions for income tax purposes. Interest income is recorded on the accrual basis and includes accretion of discounts and amortization of premiums.
Securities Sold Short — The fund enters into short sales, which is selling securities it does not own, as part of its normal investment activities. Upon selling a security short, the fund will segregate cash, cash equivalents or other appropriate liquid securities in at least an amount equal to the current market value of the securities sold short until the fund replaces the borrowed security. Interest earned on segregated cash for securities sold short, if any, is reflected as interest income. The fund is required to pay any dividends or interest due on securities sold short. Such dividends and interest are recorded as an expense. The fund may pay fees or charges on the assets borrowed for securities sold short. These fees are calculated daily based upon the value of each security sold short and a rate that is dependent on the availability of such security. Liabilities for securities sold short are valued daily and changes in value are recorded as change in net unrealized appreciation (depreciation) on securities sold short. The fund records realized gain (loss) on a security sold short when it is terminated by the fund and includes as a component of net realized gain (loss) on securities sold short transactions.
Foreign Currency Translations — All assets and liabilities initially expressed in foreign currencies are translated into U.S. dollars at prevailing exchange rates at period end. The fund may enter into spot foreign currency exchange contracts to facilitate transactions denominated in a foreign currency. Purchases and sales of investment securities, dividend and interest income, spot foreign currency exchange contracts, and expenses are translated at the rates of exchange prevailing on the respective dates of such transactions. Net realized and unrealized foreign currency exchange gains or losses related to investment securities are a component of net realized gain (loss) on investment transactions and change in net unrealized appreciation (depreciation) on investments, respectively. Net realized and unrealized foreign currency exchange gains or losses related to securities sold short are a component of net realized gain (loss) on securities sold short transactions and change in net unrealized appreciation (depreciation) on securities sold short, respectively.
Repurchase Agreements — The fund may enter into repurchase agreements with institutions that American Century Investment Management, Inc. (ACIM) (the investment advisor) has determined are creditworthy pursuant to criteria adopted by the Board of Directors. The fund requires that the collateral, represented by securities, received in a repurchase transaction be transferred to the custodian in a manner sufficient to enable the fund to obtain those securities in the event of a default under the repurchase agreement. ACIM monitors, on a daily basis, the securities transferred to ensure the value, including accrued interest, of the securities under each repurchase agreement is equal to or greater than amounts owed to the fund under each repurchase agreement.
Joint Trading Account — Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the fund, along with certain other funds in the American Century Investments family of funds, may transfer uninvested cash balances into a joint trading account. These balances are invested in one or more repurchase agreements that are collateralized by U.S. Treasury or Agency obligations.
Segregated Assets — In accordance with the 1940 Act, the fund segregates assets on its books and records to cover certain types of investment securities and other financial instruments. ACIM monitors, on a daily basis, the securities segregated to ensure the fund designates a sufficient amount of liquid assets, marked-to-market daily. The fund may also receive assets or be required to pledge assets at the custodian bank or with a broker for collateral requirements.
18
Income Tax Status — It is the fund’s policy to distribute substantially all net investment income and net realized gains to shareholders and to otherwise qualify as a regulated investment company under provisions of the Internal Revenue Code. Accordingly, no provision has been made for income taxes. The fund files U.S. federal, state, local and non-U.S. tax returns as applicable. The fund's tax returns are subject to examination by the relevant taxing authority until expiration of the applicable statute of limitations, which is generally three years from the date of filing but can be longer in certain jurisdictions. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination and for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Multiple Class — All shares of the fund represent an equal pro rata interest in the net assets of the class to which such shares belong, and have identical voting, dividend, liquidation and other rights and the same terms and conditions, except for class specific expenses and exclusive rights to vote on matters affecting only individual classes. Income, non-class specific expenses, and realized and unrealized capital gains and losses of the fund are allocated to each class of shares based on their relative net assets.
Distributions to Shareholders — Distributions from net investment income, if any, are generally declared and paid semiannually. Distributions from net realized gains, if any, are generally declared and paid annually.
Indemnifications — Under the corporation’s organizational documents, its officers and directors are indemnified against certain liabilities arising out of the performance of their duties to the fund. In addition, in the normal course of business, the fund enters into contracts that provide general indemnifications. The maximum exposure under these arrangements is unknown as this would involve future claims that may be made against a fund. The risk of material loss from such claims is considered by management to be remote.
3. Fees and Transactions with Related Parties
Certain officers and directors of the corporation are also officers and/or directors of American Century Companies, Inc. (ACC). The corporation’s investment advisor, ACIM, the corporation's distributor, American Century Investment Services, Inc. (ACIS), and the corporation’s transfer agent, American Century Services, LLC, are wholly owned, directly or indirectly, by ACC.
Management Fees — The corporation has entered into a management agreement with ACIM, under which ACIM provides the fund with investment advisory and management services in exchange for a single, unified management fee (the fee) per class. The agreement provides that all expenses of managing and operating the fund, except distribution and service fees, expenses on securities sold short, brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), and extraordinary expenses, will be paid by ACIM. The fee is computed and accrued daily based on each class's daily net assets and paid monthly in arrears. The difference in the fee among the classes is a result of their separate arrangements for non-Rule 12b-1 shareholder services. It is not the result of any difference in advisory or custodial fees or other expenses related to the management of the fund’s assets, which do not vary by class. The fee consists of (1) an Investment Category Fee based on the daily net assets of the fund and certain other accounts managed by the investment advisor that are in the same broad investment category as the fund and (2) a Complex Fee based on the assets of all the funds in the American Century Investments family of funds.
The Investment Category Fee range, the Complex Fee range and the effective annual management fee for each class for the period ended December 31, 2019 are as follows:
Investment Category Fee Range | Complex Fee Range | Effective Annual Management Fee | |
Investor Class | 1.1180% to 1.3000% | 0.2500% to 0.3100% | 1.44% |
I Class | 0.0500% to 0.1100% | 1.24% | |
A Class | 0.2500% to 0.3100% | 1.44% | |
C Class | 0.2500% to 0.3100% | 1.44% | |
R Class | 0.2500% to 0.3100% | 1.44% |
19
Distribution and Service Fees — The Board of Directors has adopted a separate Master Distribution and Individual Shareholder Services Plan for each of the A Class, C Class and R Class (collectively the plans), pursuant to Rule 12b-1 of the 1940 Act. The plans provide that the A Class will pay ACIS an annual distribution and service fee of 0.25%. The plans provide that the C Class will pay ACIS an annual distribution and service fee of 1.00%, of which 0.25% is paid for individual shareholder services and 0.75% is paid for distribution services. The plans provide that the R Class will pay ACIS an annual distribution and service fee of 0.50%. The fees are computed and accrued daily based on each class’s daily net assets and paid monthly in arrears. The fees are used to pay financial intermediaries for distribution and individual shareholder services. Fees incurred under the plans during the period ended December 31, 2019 are detailed in the Statement of Operations.
Directors' Fees and Expenses — The Board of Directors is responsible for overseeing the investment advisor’s management and operations of the fund. The directors receive detailed information about the fund and its investment advisor regularly throughout the year, and meet at least quarterly with management of the investment advisor to review reports about fund operations. The fund’s officers do not receive compensation from the fund.
Interfund Transactions — The fund may enter into security transactions with other American Century Investments funds and other client accounts of the investment advisor, in accordance with the 1940 Act rules and procedures adopted by the Board of Directors. The rules and procedures require, among other things, that these transactions be effected at the independent current market price of the security. During the period, the interfund purchases and sales were $264,084 and $219,411, respectively. The effect of interfund transactions on the Statement of Operations was $28,090 in net realized gain (loss) on investment transactions.
4. Investment Transactions
Purchases and sales of investment securities and securities sold short, excluding short-term investments, for the period ended December 31, 2019 were $63,376,923 and $68,415,133, respectively.
20
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended December 31, 2019 | Year ended June 30, 2019 | |||||||||
Shares | Amount | Shares | Amount | |||||||
Investor Class/Shares Authorized | 50,000,000 | 50,000,000 | ||||||||
Sold | 127,989 | $ | 2,197,026 | 576,438 | $ | 10,187,762 | ||||
Issued in reinvestment of distributions | 3,559 | 62,031 | 121,131 | 2,036,209 | ||||||
Redeemed | (644,353 | ) | (11,081,756 | ) | (968,570 | ) | (17,294,663 | ) | ||
(512,805 | ) | (8,822,699 | ) | (271,001 | ) | (5,070,692 | ) | |||
I Class/Shares Authorized | 25,000,000 | 25,000,000 | ||||||||
Sold | 318,823 | 5,500,357 | 651,397 | 11,306,451 | ||||||
Issued in reinvestment of distributions | 457 | 7,991 | 29,229 | 493,394 | ||||||
Redeemed | (1,030,895 | ) | (17,832,892 | ) | (149,632 | ) | (2,578,090 | ) | ||
(711,615 | ) | (12,324,544 | ) | 530,994 | 9,221,755 | |||||
A Class/Shares Authorized | 20,000,000 | 20,000,000 | ||||||||
Sold | 370 | 6,239 | 9,950 | 178,246 | ||||||
Issued in reinvestment of distributions | 13 | 222 | 5,471 | 90,602 | ||||||
Redeemed | (15,538 | ) | (261,452 | ) | (17,732 | ) | (311,966 | ) | ||
(15,155 | ) | (254,991 | ) | (2,311 | ) | (43,118 | ) | |||
C Class/Shares Authorized | 15,000,000 | 15,000,000 | ||||||||
Sold | 3,714 | 58,364 | 5,841 | 95,016 | ||||||
Issued in reinvestment of distributions | — | — | 6,228 | 97,278 | ||||||
Redeemed | (25,117 | ) | (399,733 | ) | (24,739 | ) | (419,519 | ) | ||
(21,403 | ) | (341,369 | ) | (12,670 | ) | (227,225 | ) | |||
R Class/Shares Authorized | 15,000,000 | 15,000,000 | ||||||||
Sold | 7,855 | 130,415 | 21,465 | 369,272 | ||||||
Issued in reinvestment of distributions | — | — | 3,467 | 56,435 | ||||||
Redeemed | (6,150 | ) | (101,700 | ) | (9,316 | ) | (158,868 | ) | ||
1,705 | 28,715 | 15,616 | 266,839 | |||||||
Net increase (decrease) | (1,259,273 | ) | $ | (21,714,888 | ) | 260,628 | $ | 4,147,559 |
6. Fair Value Measurements
The fund’s investments valuation process is based on several considerations and may use multiple inputs to determine the fair value of the investments held by the fund. In conformity with accounting principles generally accepted in the United States of America, the inputs used to determine a valuation are classified into three broad levels.
• | Level 1 valuation inputs consist of unadjusted quoted prices in an active market for identical investments. |
• | Level 2 valuation inputs consist of direct or indirect observable market data (including quoted prices for comparable investments, evaluations of subsequent market events, interest rates, prepayment speeds, credit risk, etc.). These inputs also consist of quoted prices for identical investments initially expressed in local currencies that are adjusted through translation into U.S. dollars. |
• | Level 3 valuation inputs consist of unobservable data (including a fund’s own assumptions). |
The level classification is based on the lowest level input that is significant to the fair valuation measurement. The valuation inputs are not necessarily an indication of the risks associated with investing in these securities or other financial instruments.
21
As of period end, the fund's investment securities and securities sold short were classified as Level 1. The Schedule of Investments provides additional information on the fund’s portfolio holdings.
7. Risk Factors
The fund is subject to short sales risk. If the market price of a security increases after the fund borrows the security, the fund may suffer a loss when it replaces the borrowed security at the higher price. Any loss will be increased by the amount of compensation, interest or dividends, and transaction costs the fund must pay to the lender of the borrowed security.
The fund's investment strategy utilizes leverage, which can increase market exposure and subject the fund to greater risk and higher volatility.
If the fund is overweighted in a stock or sector, any negative development related to that stock or sector will have a greater impact on the fund than other funds that are not overweighted in that stock or sector.
The fund’s investment process may result in high portfolio turnover, which could mean high transaction costs, affecting both performance and capital gains tax liabilities to investors.
8. Federal Tax Information
The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
As of period end, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $ | 25,698,516 | |
Gross tax appreciation of investments | $ | 6,836,567 | |
Gross tax depreciation of investments | (331,123 | ) | |
Net tax appreciation (depreciation) of investments | 6,505,444 | ||
Gross tax appreciation on securities sold short | 862,723 | ||
Gross tax depreciation on securities sold short | (1,060,448 | ) | |
Net tax appreciation (depreciation) | $ | 6,307,719 |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales.
As of June 30, 2019, the fund had post-October capital loss deferrals of $(1,912,843), which represent certain qualified losses that the fund has elected to treat as having been incurred in the following fiscal year for federal income tax purposes.
9. Subsequent Event
On September 27, 2019, the Board of Directors approved a plan of liquidation for the fund. The liquidation was effective January 24, 2020.
22
Financial Highlights |
For a Share Outstanding Throughout the Years Ended June 30 (except as noted) | ||||||||||||||||
Per-Share Data | Ratios and Supplemental Data | |||||||||||||||
Income From Investment Operations: | Distributions From: | Ratio to Average Net Assets of: | ||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Operating Expenses (excluding expenses on securities sold short) | Net Investment Income (Loss) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
Investor Class | ||||||||||||||||
2019(3) | $17.28 | 0.02 | 0.19 | 0.21 | (0.05) | — | (0.05) | $17.44 | 1.20% | 2.01%(4) | 1.45%(4) | 0.28%(4) | 134% | $24,529 | ||
2019 | $18.13 | 0.06 | 0.18 | 0.24 | — | (1.09) | (1.09) | $17.28 | 1.49% | 2.06% | 1.45% | 0.36% | 220% | $33,165 | ||
2018 | $18.54 | (0.11) | 1.02 | 0.91 | — | (1.32) | (1.32) | $18.13 | 5.06% | 2.39% | 1.44% | (0.58)% | 243% | $39,702 | ||
2017 | $16.17 | —(5) | 2.38 | 2.38 | (0.01) | — | (0.01) | $18.54 | 14.65% | 2.05% | 1.45% | 0.00%(6) | 127% | $35,816 | ||
2016 | $16.67 | 0.02 | (0.25) | (0.23) | —(5) | (0.27) | (0.27) | $16.17 | (1.40)% | 1.91% | 1.47% | 0.14% | 121% | $34,885 | ||
2015 | $16.02 | 0.04 | 1.54 | 1.58 | (0.01) | (0.92) | (0.93) | $16.67 | 10.22% | 1.80% | 1.45% | 0.22% | 115% | $47,976 | ||
I Class | ||||||||||||||||
2019(3) | $17.37 | 0.05 | 0.17 | 0.22 | (0.08) | — | (0.08) | $17.51 | 1.27% | 1.81%(4) | 1.25%(4) | 0.48%(4) | 134% | $1,707 | ||
2019 | $18.18 | 0.12 | 0.16 | 0.28 | — | (1.09) | (1.09) | $17.37 | 1.71% | 1.86% | 1.25% | 0.56% | 220% | $14,052 | ||
2018 | $18.55 | (0.06) | 1.01 | 0.95 | — | (1.32) | (1.32) | $18.18 | 5.22% | 2.19% | 1.24% | (0.38)% | 243% | $5,055 | ||
2017 | $16.18 | 0.04 | 2.37 | 2.41 | (0.04) | — | (0.04) | $18.55 | 14.93% | 1.85% | 1.25% | 0.20% | 127% | $401 | ||
2016 | $16.69 | 0.04 | (0.24) | (0.20) | (0.04) | (0.27) | (0.31) | $16.18 | (1.26)% | 1.71% | 1.27% | 0.34% | 121% | $322 | ||
2015 | $16.03 | 0.06 | 1.57 | 1.63 | (0.05) | (0.92) | (0.97) | $16.69 | 10.49% | 1.60% | 1.25% | 0.42% | 115% | $1,027 |
For a Share Outstanding Throughout the Years Ended June 30 (except as noted) | ||||||||||||||||
Per-Share Data | Ratios and Supplemental Data | |||||||||||||||
Income From Investment Operations: | Distributions From: | Ratio to Average Net Assets of: | ||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Operating Expenses (excluding expenses on securities sold short) | Net Investment Income (Loss) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
A Class | ||||||||||||||||
2019(3) | $17.00 | —(5) | 0.18 | 0.18 | —(5) | — | —(5) | $17.18 | 1.08% | 2.26%(4) | 1.70%(4) | 0.03%(4) | 134% | $1,220 | ||
2019 | $17.89 | 0.02 | 0.18 | 0.20 | — | (1.09) | (1.09) | $17.00 | 1.28% | 2.31% | 1.70% | 0.11% | 220% | $1,465 | ||
2018 | $18.36 | (0.15) | 1.00 | 0.85 | — | (1.32) | (1.32) | $17.89 | 4.77% | 2.64% | 1.69% | (0.83)% | 243% | $1,583 | ||
2017 | $16.04 | (0.05) | 2.37 | 2.32 | — | — | — | $18.36 | 14.40% | 2.30% | 1.70% | (0.25)% | 127% | $1,956 | ||
2016 | $16.59 | (0.02) | (0.26) | (0.28) | — | (0.27) | (0.27) | $16.04 | (1.72)% | 2.16% | 1.72% | (0.11)% | 121% | $5,333 | ||
2015 | $15.97 | (0.01) | 1.55 | 1.54 | — | (0.92) | (0.92) | $16.59 | 9.97% | 2.05% | 1.70% | (0.03)% | 115% | $6,083 | ||
C Class | ||||||||||||||||
2019(3) | $15.97 | (0.06) | 0.17 | 0.11 | — | — | — | $16.08 | 0.69% | 3.01%(4) | 2.45%(4) | (0.72)%(4) | 134% | $1,171 | ||
2019 | $17.00 | (0.11) | 0.17 | 0.06 | — | (1.09) | (1.09) | $15.97 | 0.50% | 3.06% | 2.45% | (0.64)% | 220% | $1,505 | ||
2018 | $17.63 | (0.28) | 0.97 | 0.69 | — | (1.32) | (1.32) | $17.00 | 3.97% | 3.39% | 2.44% | (1.58)% | 243% | $1,817 | ||
2017 | $15.53 | (0.17) | 2.27 | 2.10 | — | — | — | $17.63 | 13.52% | 3.05% | 2.45% | (1.00)% | 127% | $2,199 | ||
2016 | $16.18 | (0.14) | (0.24) | (0.38) | — | (0.27) | (0.27) | $15.53 | (2.38)% | 2.91% | 2.47% | (0.86)% | 121% | $2,325 | ||
2015 | $15.71 | (0.13) | 1.52 | 1.39 | — | (0.92) | (0.92) | $16.18 | 9.16% | 2.80% | 2.45% | (0.78)% | 115% | $1,306 | ||
R Class | ||||||||||||||||
2019(3) | $16.69 | (0.02) | 0.17 | 0.15 | — | — | — | $16.84 | 0.90% | 2.51%(4) | 1.95%(4) | (0.22)%(4) | 134% | $1,025 | ||
2019 | $17.63 | (0.02) | 0.17 | 0.15 | — | (1.09) | (1.09) | $16.69 | 1.01% | 2.56% | 1.95% | (0.14)% | 220% | $987 | ||
2018 | $18.15 | (0.19) | 0.99 | 0.80 | — | (1.32) | (1.32) | $17.63 | 4.54% | 2.89% | 1.94% | (1.08)% | 243% | $767 | ||
2017 | $15.90 | (0.08) | 2.33 | 2.25 | — | — | — | $18.15 | 14.09% | 2.55% | 1.95% | (0.50)% | 127% | $473 | ||
2016 | $16.48 | (0.06) | (0.25) | (0.31) | — | (0.27) | (0.27) | $15.90 | (1.91)% | 2.41% | 1.97% | (0.36)% | 121% | $171 | ||
2015 | $15.91 | (0.04) | 1.53 | 1.49 | — | (0.92) | (0.92) | $16.48 | 9.69% | 2.30% | 1.95% | (0.28)% | 115% | $44 |
Notes to Financial Highlights |
(1) | Computed using average shares outstanding throughout the period. |
(2) | Total returns are calculated based on the net asset value of the last business day and do not reflect applicable sales charges, if any. Total returns for periods less than one year are not annualized. |
(3) | Six months ended December 31, 2019 (unaudited). |
(4) | Annualized. |
(5) | Per-share amount was less than $0.005. |
(6) | Ratio was less than 0.005%. |
See Notes to Financial Statements.
Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain retirement accounts are subject to federal income tax withholding, unless you elect not to have withholding apply*. Tax will be withheld on the total amount withdrawn even though you may be receiving amounts that are not subject to withholding, such as nondeductible contributions. In such case, excess amounts of withholding could occur. You may adjust your withholding election so that a greater or lesser amount will be withheld.
If you don’t want us to withhold on this amount, you must notify us to not withhold the federal income tax. You may notify us in writing or in certain situations by telephone or through other electronic means. For systematic withdrawals, your withholding election will remain in effect until revoked or changed by filing a new election. You have the right to revoke your election at any time and change your withholding percentage for future distributions.
Remember, even if you elect not to have income tax withheld, you are liable for paying income tax on the taxable portion of your withdrawal. If you elect not to have income tax withheld or you don’t have enough income tax withheld, you may be responsible for payment of estimated tax. You may incur penalties under the estimated tax rules if your withholding and estimated tax payments are not sufficient. You can reduce or defer the income tax on a distribution by directly or indirectly rolling such distribution over to another IRA or eligible plan. You should consult your tax advisor for additional information.
State tax will be withheld if, at the time of your distribution, your address is within one of the mandatory withholding states and you have federal income tax withheld (or as otherwise required by state law). State taxes will be withheld from your distribution in accordance with the respective state rules.
*Some 403(b), 457 and qualified retirement plan distributions may be subject to 20% mandatory withholding, as they are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
Descriptions of the principles and policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund are available without charge, upon request, by calling 1-800-345-2021 or visiting American Century Investments’ website at americancentury.com/proxy. A description of the policies is also available on the Securities and Exchange Commission’s website at sec.gov. Information regarding how the investment advisor voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on americancentury.com/proxy. It is also available at sec.gov.
Quarterly Portfolio Disclosure
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-Q or as an exhibit to its reports on Form N-PORT. The fund’s Forms N-Q and Form N-PORT reports are available on the SEC’s website at sec.gov. The fund also makes its complete schedule of portfolio holdings for the most recent quarter of its fiscal year available on its website at americancentury.com and, upon request, by calling 1-800-345-2021.
26
Notes |
27
Notes |
28
Notes |
29
Notes |
30
Notes |
31
Notes |
32
Contact Us | americancentury.com | |
Automated Information Line | 1-800-345-8765 | |
Investor Services Representative | 1-800-345-2021 or 816-531-5575 | |
Investors Using Advisors | 1-800-378-9878 | |
Business, Not-For-Profit, Employer-Sponsored Retirement Plans | 1-800-345-3533 | |
Banks and Trust Companies, Broker-Dealers, Financial Professionals, Insurance Companies | 1-800-345-6488 | |
Telecommunications Relay Service for the Deaf | 711 | |
American Century Quantitative Equity Funds, Inc. | ||
Investment Advisor: American Century Investment Management, Inc. Kansas City, Missouri | ||
This report and the statements it contains are submitted for the general information of our shareholders. The report is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus. | ||
©2020 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-91460 2002 |
SEMIANNUAL REPORT | |
DECEMBER 31, 2019 | |
AC Alternatives® Equity Market Neutral Fund |
Investor Class (ALHIX) |
I Class (ALISX) |
Y Class (ALYIX) |
A Class (ALIAX) |
C Class (ALICX) |
R Class (ALIRX) |
R5 Class (ALIGX) |
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the fund’s shareholder reports like this one will no longer be sent by mail, unless you specifically request paper copies of the reports from the fund or from your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the fund or your financial intermediary electronically by calling or sending an email request to your appropriate contacts as listed on the back cover of this report.
You may elect to receive all future reports in paper free of charge. You can inform the fund or your financial intermediary that you wish to continue receiving paper copies of your shareholder reports by calling or sending an email request to your appropriate contacts as listed on the back cover of this report. Your election to receive reports in paper will apply to all funds held with the fund complex/your financial intermediary.
Table of Contents |
Any opinions expressed in this report reflect those of the author as of the date of the report, and do not necessarily represent the opinions of American Century Investments® or any other person in the American Century Investments organization. Any such opinions are subject to change at any time based upon market or other conditions and American Century Investments disclaims any responsibility to update such opinions. These opinions may not be relied upon as investment advice and, because investment decisions made by American Century Investments funds are based on numerous factors, may not be relied upon as an indication of trading intent on behalf of any American Century Investments fund. Security examples are used for representational purposes only and are not intended as recommendations to purchase or sell securities. Performance information for comparative indices and securities is provided to American Century Investments by third party vendors. To the best of American Century Investments’ knowledge, such information is accurate at the time of printing.
President’s Letter |
Jonathan Thomas
Dear Investor:
Thank you for reviewing this semiannual report for the period ended December 31, 2019. It provides a market overview (below), followed by a schedule of fund investments and other financial information. For additional commentary and information on fund performance, plus other investment insights, please visit our website, americancentury.com.
All Asset Classes Advanced
From higher-quality government bonds to higher-risk stocks and commodities, all major U.S. and global asset classes posted gains for the six-month period. U.S. stocks, as measured by the S&P 500 Index, advanced almost 11% for the period, outpacing the nearly 9% return for global stocks (MSCI ACWI). Income-oriented assets, including U.S. and global bonds and dividend-paying stocks, generally posted more-modest gains.
A key policy pivot from the Federal Reserve (Fed) helped set the stage for the rally. After abruptly ending its three-year rate-hike campaign in early 2019, the Fed cut rates in July. Ongoing concerns about global economic risks, including trade policy uncertainty, prompted this first Fed easing move in 10 years. And with global risks still looming, the Fed cut rates again in September and October before pausing. Similarly, the European Central Bank cut a key deposit rate and relaunched quantitative easing in a move to spark growth. These efforts helped push global yields lower, which aided performance among interest rate-sensitive assets.
Accommodative central bank policy and a lower interest rate backdrop also aided performance in equity markets. Additionally, modestly improving economic and earnings data calmed investors’ earlier worries and nudged stock returns higher. In December, a series of upbeat data helped stocks end the period on a high note. U.K. Prime Minister Boris Johnson and his Conservative Party won a decisive election victory, which resolved some lingering Brexit uncertainty. On the trade front, the U.S. House of Representatives approved the U.S.-Mexico-Canada Agreement, and the U.S. and China reached a phase 1 deal, further fueling investor optimism.
Looking ahead, we expect volatility to remain a factor as investors react to global growth trends, ongoing U.S.-China trade negotiations, central bank policy and geopolitical forces. We believe this scenario underscores the importance of using professionally managed portfolios in pursuit of investment goals. We appreciate your continued trust and confidence in us.
Sincerely,
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
2
Fund Characteristics |
DECEMBER 31, 2019 | |
Top Ten Long Holdings | % of net assets |
Activision Blizzard, Inc. | 1.02% |
Performance Food Group Co. | 1.01% |
Hologic, Inc. | 1.00% |
Electronic Arts, Inc. | 0.99% |
Artisan Partners Asset Management, Inc., Class A | 0.98% |
NIKE, Inc., Class B | 0.97% |
Acuity Brands, Inc. | 0.97% |
NextEra Energy, Inc. | 0.96% |
Allison Transmission Holdings, Inc. | 0.96% |
JPMorgan Chase & Co. | 0.96% |
Top Ten Short Holdings | % of net assets |
Ares Management Corp., Class A | (1.00)% |
Diamondback Energy, Inc. | (0.98)% |
CyrusOne, Inc. | (0.98)% |
Boston Scientific Corp. | (0.97)% |
Churchill Downs, Inc. | (0.97)% |
VF Corp. | (0.97)% |
Aqua America, Inc. | (0.96)% |
Cigna Corp. | (0.96)% |
Hyatt Hotels Corp., Class A | (0.96)% |
EnerSys | (0.96)% |
Types of Investments in Portfolio | % of net assets |
Common Stocks | 83.5% |
Common Stocks Sold Short | (83.2)% |
Temporary Cash Investments | 16.3% |
Other Assets and Liabilities | 83.4%* |
*Amount relates primarily to deposits for securities sold short at period end.
3
Shareholder Fee Example |
Fund shareholders may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption/exchange fees; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in your fund and to compare these costs with the ongoing cost of investing in other mutual funds.
The example is based on an investment of $1,000 made at the beginning of the period and held for the entire period from July 1, 2019 to December 31, 2019.
Actual Expenses
The table provides information about actual account values and actual expenses for each class. You may use the information, together with the amount you invested, to estimate the expenses that you paid over the period. First, identify the share class you own. Then simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
If you hold Investor Class shares of any American Century Investments fund, or I Class shares of the American Century Diversified Bond Fund, in an American Century Investments account (i.e., not a financial intermediary or retirement plan account), American Century Investments may charge you a $12.50 semiannual account maintenance fee if the value of those shares is less than $10,000. We will redeem shares automatically in one of your accounts to pay the $12.50 fee. In determining your total eligible investment amount, we will include your investments in all personal accounts (including American Century Investments Brokerage accounts) registered under your Social Security number. Personal accounts include individual accounts, joint accounts, UGMA/UTMA accounts, personal trusts, Coverdell Education Savings Accounts and IRAs (including traditional, Roth, Rollover, SEP-, SARSEP- and SIMPLE-IRAs), and certain other retirement accounts. If you have only business, business retirement, employer-sponsored or American Century Investments Brokerage accounts, you are currently not subject to this fee. If you are subject to the Account Maintenance Fee, your account value could be reduced by the fee amount.
Hypothetical Example for Comparison Purposes
The table also provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio of each class of your fund and an assumed rate of return of 5% per year before expenses, which is not the actual return of a fund’s share class. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) or redemption/exchange fees. Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
4
Beginning Account Value 7/1/19 | Ending Account Value 12/31/19 | Expenses Paid During Period(1) 7/1/19 - 12/31/19 | Annualized Expense Ratio(1) | |
Actual | ||||
Investor Class | $1,000 | $962.90 | $15.00 | 3.04% |
I Class | $1,000 | $964.80 | $14.03 | 2.84% |
Y Class | $1,000 | $964.80 | $13.78 | 2.79% |
A Class | $1,000 | $962.70 | $16.23 | 3.29% |
C Class | $1,000 | $959.80 | $19.90 | 4.04% |
R Class | $1,000 | $960.40 | $17.44 | 3.54% |
R5 Class | $1,000 | $964.80 | $14.03 | 2.84% |
Hypothetical | ||||
Investor Class | $1,000 | $1,009.85 | $15.36 | 3.04% |
I Class | $1,000 | $1,010.86 | $14.36 | 2.84% |
Y Class | $1,000 | $1,011.11 | $14.10 | 2.79% |
A Class | $1,000 | $1,008.60 | $16.61 | 3.29% |
C Class | $1,000 | $1,004.83 | $20.36 | 4.04% |
R Class | $1,000 | $1,007.34 | $17.86 | 3.54% |
R5 Class | $1,000 | $1,010.86 | $14.36 | 2.84% |
(1) | Expenses are equal to the class's annualized expense ratio listed in the table above, multiplied by the average account value over the period, multiplied by 184, the number of days in the most recent fiscal half-year, divided by 366, to reflect the one-half year period. Annualized expense ratio reflects actual expenses, including any applicable fee waivers or expense reimbursements and excluding any acquired fund fees and expenses. |
5
Schedule of Investments |
DECEMBER 31, 2019 (UNAUDITED)
Shares | Value | |||
COMMON STOCKS — 83.5% | ||||
Aerospace and Defense — 2.1% | ||||
Curtiss-Wright Corp. | 2,060 | $ | 290,233 | |
L3Harris Technologies, Inc. | 512 | 101,310 | ||
Mercury Systems, Inc.(1)(2) | 4,025 | 278,168 | ||
669,711 | ||||
Air Freight and Logistics — 0.7% | ||||
CH Robinson Worldwide, Inc. | 2,998 | 234,444 | ||
Auto Components — 1.5% | ||||
Adient plc(1) | 9,193 | 195,351 | ||
Gentex Corp. | 10,014 | 290,206 | ||
485,557 | ||||
Banks — 8.0% | ||||
Bank of America Corp.(2) | 8,737 | 307,717 | ||
CIT Group, Inc. | 722 | 32,945 | ||
Comerica, Inc. | 4,048 | 290,444 | ||
East West Bancorp, Inc. | 6,398 | 311,583 | ||
First Citizens BancShares, Inc., Class A(2) | 506 | 269,298 | ||
JPMorgan Chase & Co.(2) | 2,238 | 311,977 | ||
Popular, Inc. | 5,189 | 304,854 | ||
SVB Financial Group(1) | 1,211 | 304,009 | ||
Wells Fargo & Co.(2) | 5,332 | 286,862 | ||
Zions Bancorp N.A. | 3,457 | 179,487 | ||
2,599,176 | ||||
Beverages — 0.8% | ||||
PepsiCo, Inc. | 1,890 | 258,306 | ||
Biotechnology — 1.8% | ||||
AbbVie, Inc. | 1,139 | 100,847 | ||
Alexion Pharmaceuticals, Inc.(1) | 899 | 97,227 | ||
Amgen, Inc. | 443 | 106,794 | ||
Biogen, Inc.(1) | 338 | 100,295 | ||
Halozyme Therapeutics, Inc.(1) | 5,530 | 98,047 | ||
Incyte Corp.(1) | 1,092 | 95,353 | ||
598,563 | ||||
Building Products — 1.8% | ||||
Builders FirstSource, Inc.(1)(2) | 11,681 | 296,814 | ||
Masco Corp.(2) | 6,199 | 297,490 | ||
594,304 | ||||
Capital Markets — 2.8% | ||||
Artisan Partners Asset Management, Inc., Class A | 9,830 | 317,706 | ||
Evercore, Inc., Class A | 3,747 | 280,126 | ||
MSCI, Inc. | 1,174 | 303,103 | ||
900,935 |
6
Shares | Value | |||
Chemicals — 1.9% | ||||
CF Industries Holdings, Inc. | 1,785 | $ | 85,216 | |
NewMarket Corp. | 572 | 278,289 | ||
Valvoline, Inc. | 12,467 | 266,919 | ||
630,424 | ||||
Commercial Services and Supplies — 2.6% | ||||
Cimpress plc(1) | 715 | 89,926 | ||
Clean Harbors, Inc.(1)(2) | 3,490 | 299,267 | ||
Tetra Tech, Inc. | 3,318 | 285,879 | ||
UniFirst Corp. | 903 | 182,388 | ||
857,460 | ||||
Communications Equipment — 2.0% | ||||
Ciena Corp.(1) | 6,597 | 281,626 | ||
Cisco Systems, Inc. | 5,977 | 286,657 | ||
Viavi Solutions, Inc.(1) | 6,462 | 96,930 | ||
665,213 | ||||
Construction and Engineering — 1.7% | ||||
EMCOR Group, Inc.(2) | 3,214 | 277,368 | ||
MasTec, Inc.(1)(2) | 4,110 | 263,698 | ||
541,066 | ||||
Consumer Finance — 3.6% | ||||
American Express Co. | 2,392 | 297,780 | ||
Discover Financial Services(2) | 3,423 | 290,339 | ||
OneMain Holdings, Inc. | 6,854 | 288,896 | ||
Synchrony Financial | 7,837 | 282,210 | ||
1,159,225 | ||||
Diversified Telecommunication Services — 0.9% | ||||
Verizon Communications, Inc. | 4,874 | 299,264 | ||
Electric Utilities — 1.9% | ||||
IDACORP, Inc. | 2,825 | 301,710 | ||
NextEra Energy, Inc. | 1,295 | 313,597 | ||
615,307 | ||||
Electrical Equipment — 1.0% | ||||
Acuity Brands, Inc. | 2,294 | 316,572 | ||
Electronic Equipment, Instruments and Components — 2.5% | ||||
CDW Corp. | 1,718 | 245,399 | ||
Keysight Technologies, Inc.(1)(2) | 2,700 | 277,101 | ||
National Instruments Corp. | 6,709 | 284,059 | ||
806,559 | ||||
Entertainment — 2.9% | ||||
Activision Blizzard, Inc. | 5,565 | 330,672 | ||
Electronic Arts, Inc.(1)(2) | 3,001 | 322,638 | ||
Take-Two Interactive Software, Inc.(1) | 2,430 | 297,505 | ||
950,815 | ||||
Equity Real Estate Investment Trusts (REITs) — 2.6% | ||||
Alexander & Baldwin, Inc. | 12,872 | 269,797 | ||
Outfront Media, Inc.(2) | 11,625 | 311,783 |
7
Shares | Value | |||
Sunstone Hotel Investors, Inc. | 10,894 | $ | 151,644 | |
Weingarten Realty Investors | 3,325 | 103,873 | ||
837,097 | ||||
Food and Staples Retailing — 1.0% | ||||
Performance Food Group Co.(1)(2) | 6,379 | 328,391 | ||
Food Products — 1.1% | ||||
General Mills, Inc. | 1,389 | 74,395 | ||
Hershey Co. (The) | 2,024 | 297,487 | ||
371,882 | ||||
Health Care Equipment and Supplies — 2.9% | ||||
Hologic, Inc.(1) | 6,265 | 327,096 | ||
Integer Holdings Corp.(1)(2) | 3,813 | 306,679 | ||
NuVasive, Inc.(1) | 2,044 | 158,083 | ||
Stryker Corp. | 738 | 154,936 | ||
946,794 | ||||
Health Care Technology — 1.6% | ||||
Omnicell, Inc.(1) | 3,173 | 259,297 | ||
Veeva Systems, Inc., Class A(1) | 1,971 | 277,241 | ||
536,538 | ||||
Hotels, Restaurants and Leisure — 2.5% | ||||
Darden Restaurants, Inc. | 2,206 | 240,476 | ||
Starbucks Corp. | 2,992 | 263,057 | ||
Texas Roadhouse, Inc. | 5,525 | 311,168 | ||
814,701 | ||||
Independent Power and Renewable Electricity Producers — 0.8% | ||||
NRG Energy, Inc.(2) | 6,657 | 264,616 | ||
Insurance — 3.4% | ||||
Arch Capital Group Ltd.(1) | 5,731 | 245,803 | ||
Mercury General Corp. | 5,906 | 287,800 | ||
National General Holdings Corp. | 13,293 | 293,775 | ||
Progressive Corp. (The)(2) | 3,883 | 281,090 | ||
1,108,468 | ||||
Interactive Media and Services — 0.9% | ||||
Alphabet, Inc., Class A(1) | 223 | 298,684 | ||
Internet and Direct Marketing Retail — 1.7% | ||||
Amazon.com, Inc.(1) | 163 | 301,198 | ||
eBay, Inc.(2) | 7,419 | 267,900 | ||
569,098 | ||||
IT Services — 1.8% | ||||
Akamai Technologies, Inc.(1) | 3,413 | 294,815 | ||
Mastercard, Inc., Class A | 679 | 202,743 | ||
PayPal Holdings, Inc.(1) | 429 | 46,405 | ||
Square, Inc., Class A(1) | 500 | 31,280 | ||
575,243 | ||||
Life Sciences Tools and Services — 1.6% | ||||
Agilent Technologies, Inc. | 1,597 | 136,240 | ||
Bio-Rad Laboratories, Inc., Class A(1) | 224 | 82,887 |
8
Shares | Value | |||
Bruker Corp. | 5,981 | $ | 304,851 | |
523,978 | ||||
Machinery — 2.1% | ||||
Allison Transmission Holdings, Inc. | 6,466 | 312,437 | ||
Snap-on, Inc.(2) | 1,711 | 289,844 | ||
Watts Water Technologies, Inc., Class A | 865 | 86,292 | ||
688,573 | ||||
Metals and Mining — 1.8% | ||||
Royal Gold, Inc. | 2,234 | 273,106 | ||
Steel Dynamics, Inc.(2) | 8,965 | 305,169 | ||
578,275 | ||||
Oil, Gas and Consumable Fuels — 1.5% | ||||
Cabot Oil & Gas Corp. | 12,391 | 215,727 | ||
HollyFrontier Corp. | 5,171 | 262,222 | ||
477,949 | ||||
Pharmaceuticals — 0.9% | ||||
Bristol-Myers Squibb Co. | 1,051 | 67,464 | ||
Horizon Therapeutics plc(1) | 3,213 | 116,310 | ||
Jazz Pharmaceuticals plc(1) | 700 | 104,496 | ||
288,270 | ||||
Professional Services — 0.8% | ||||
Verisk Analytics, Inc. | 1,765 | 263,585 | ||
Semiconductors and Semiconductor Equipment — 3.9% | ||||
Cirrus Logic, Inc.(1) | 3,414 | 281,348 | ||
Intel Corp. | 4,968 | 297,335 | ||
Qorvo, Inc.(1)(2) | 2,276 | 264,539 | ||
Semtech Corp.(1) | 5,002 | 264,606 | ||
Universal Display Corp. | 720 | 148,370 | ||
1,256,198 | ||||
Software — 4.8% | ||||
Cadence Design Systems, Inc.(1) | 4,278 | 296,722 | ||
CommVault Systems, Inc.(1) | 2,151 | 96,021 | ||
Cornerstone OnDemand, Inc.(1) | 4,912 | 287,597 | ||
Fair Isaac Corp.(1) | 657 | 246,165 | ||
LogMeIn, Inc. | 3,555 | 304,806 | ||
Oracle Corp. (New York)(2) | 1,343 | 71,152 | ||
Proofpoint, Inc.(1) | 2,293 | 263,190 | ||
1,565,653 | ||||
Specialty Retail — 2.0% | ||||
AutoZone, Inc.(1) | 248 | 295,445 | ||
Lithia Motors, Inc., Class A | 525 | 77,175 | ||
Murphy USA, Inc.(1)(2) | 2,480 | 290,160 | ||
662,780 | ||||
Textiles, Apparel and Luxury Goods — 1.0% | ||||
NIKE, Inc., Class B | 3,129 | 316,999 | ||
Thrifts and Mortgage Finance — 1.4% | ||||
Essent Group Ltd.(2) | 5,384 | 279,914 |
9
Shares | Value | |||
Radian Group, Inc. | 7,276 | $ | 183,064 | |
462,978 | ||||
Trading Companies and Distributors — 0.9% | ||||
HD Supply Holdings, Inc.(1) | 7,105 | 285,763 | ||
TOTAL COMMON STOCKS (Cost $23,656,981) | 27,205,414 | |||
TEMPORARY CASH INVESTMENTS — 16.3% | ||||
Repurchase Agreement, BMO Capital Markets Corp., (collateralized by various U.S. Treasury obligations, 2.75% - 3.75%, 9/15/21 - 11/15/43, valued at $4,434,655), in a joint trading account at 1.35%, dated 12/31/19, due 1/2/20 (Delivery value $4,341,457) | 4,341,131 | |||
Repurchase Agreement, Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 1.625%, 12/15/22, valued at $986,459), at 0.65%, dated 12/31/19, due 1/2/20 (Delivery value $966,035) | 966,000 | |||
State Street Institutional U.S. Government Money Market Fund, Premier Class | 2,767 | 2,767 | ||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $5,309,898) | 5,309,898 | |||
TOTAL INVESTMENT SECURITIES BEFORE SECURITIES SOLD SHORT — 99.8% (Cost $28,966,879) | 32,515,312 | |||
COMMON STOCKS SOLD SHORT — (83.2)% | ||||
Aerospace and Defense — (1.1)% | ||||
Arconic, Inc. | (1,954) | (60,124 | ) | |
BWX Technologies, Inc. | (4,759) | (295,439 | ) | |
(355,563 | ) | |||
Air Freight and Logistics — (0.7)% | ||||
FedEx Corp. | (1,590) | (240,424 | ) | |
Airlines — (0.2)% | ||||
American Airlines Group, Inc. | (2,268) | (65,046 | ) | |
Auto Components — (0.8)% | ||||
Dorman Products, Inc. | (3,502) | (265,171 | ) | |
Banks — (7.6)% | ||||
Atlantic Union Bankshares Corp. | (7,561) | (283,916 | ) | |
BancorpSouth Bank | (4,394) | (138,015 | ) | |
BOK Financial Corp. | (2,865) | (250,401 | ) | |
Cadence BanCorp | (4,193) | (76,019 | ) | |
First Financial Bancorp | (11,932) | (303,550 | ) | |
Fulton Financial Corp. | (16,521) | (287,961 | ) | |
Independent Bank Corp. (Massachusetts) | (3,099) | (257,992 | ) | |
Old National Bancorp | (15,687) | (286,915 | ) | |
Pinnacle Financial Partners, Inc. | (4,834) | (309,376 | ) | |
United Bankshares, Inc. | (7,201) | (278,391 | ) | |
(2,472,536 | ) | |||
Beverages — (0.9)% | ||||
Brown-Forman Corp., Class B | (4,496) | (303,930 | ) | |
Biotechnology — (1.7)% | ||||
Bluebird Bio, Inc. | (1,060) | (93,015 | ) | |
Exact Sciences Corp. | (1,107) | (102,375 | ) | |
Immunomedics, Inc. | (4,999) | (105,779 | ) | |
Madrigal Pharmaceuticals, Inc. | (906) | (82,546 | ) |
10
Shares | Value | |||
Sage Therapeutics, Inc. | (806) | $ | (58,185 | ) |
Sarepta Therapeutics, Inc. | (968) | (124,911 | ) | |
(566,811 | ) | |||
Capital Markets — (4.0)% | ||||
Ares Management Corp., Class A | (9,152) | (326,635 | ) | |
Bank of New York Mellon Corp. (The) | (2,721) | (136,948 | ) | |
CME Group, Inc. | (1,435) | (288,033 | ) | |
Goldman Sachs Group, Inc. (The) | (1,171) | (269,248 | ) | |
KKR & Co., Inc., Class A | (9,827) | (286,654 | ) | |
(1,307,518 | ) | |||
Chemicals — (0.9)% | ||||
International Flavors & Fragrances, Inc. | (2,214) | (285,650 | ) | |
Commercial Services and Supplies — (0.1)% | ||||
Healthcare Services Group, Inc. | (1,707) | (41,514 | ) | |
Construction and Engineering — (1.0)% | ||||
Fluor Corp. | (2,319) | (43,783 | ) | |
Granite Construction, Inc. | (10,548) | (291,863 | ) | |
(335,646 | ) | |||
Consumer Finance — (1.0)% | ||||
SLM Corp. | (34,637) | (308,616 | ) | |
Diversified Consumer Services — (0.9)% | ||||
Laureate Education, Inc., Class A | (17,219) | (303,227 | ) | |
Diversified Financial Services — (0.7)% | ||||
Berkshire Hathaway, Inc., Class B | (929) | (210,419 | ) | |
Electric Utilities — (2.3)% | ||||
Alliant Energy Corp. | (5,594) | (306,104 | ) | |
Entergy Corp. | (1,513) | (181,257 | ) | |
Eversource Energy | (3,185) | (270,948 | ) | |
(758,309 | ) | |||
Electrical Equipment — (1.0)% | ||||
EnerSys | (4,174) | (312,340 | ) | |
Electronic Equipment, Instruments and Components — (2.4)% | ||||
Amphenol Corp., Class A | (2,848) | (308,239 | ) | |
AVX Corp. | (9,078) | (185,827 | ) | |
IPG Photonics Corp. | (2,052) | (297,376 | ) | |
(791,442 | ) | |||
Entertainment — (2.0)% | ||||
Madison Square Garden Co. (The), Class A | (1,050) | (308,900 | ) | |
Netflix, Inc. | (790) | (255,620 | ) | |
Walt Disney Co. (The) | (556) | (80,414 | ) | |
(644,934 | ) | |||
Equity Real Estate Investment Trusts (REITs) — (3.4)% | ||||
Alexandria Real Estate Equities, Inc. | (1,869) | (301,993 | ) | |
Crown Castle International Corp. | (1,012) | (143,856 | ) | |
CyrusOne, Inc. | (4,864) | (318,251 | ) | |
Pebblebrook Hotel Trust | (2,117) | (56,757 | ) | |
PotlatchDeltic Corp. | (6,605) | (285,798 | ) | |
(1,106,655 | ) |
11
Shares | Value | |||
Food Products — (3.6)% | ||||
Archer-Daniels-Midland Co. | (6,686) | $ | (309,896 | ) |
Conagra Brands, Inc. | (9,049) | (309,838 | ) | |
Hain Celestial Group, Inc. (The) | (11,294) | (293,136 | ) | |
Seaboard Corp. | (62) | (263,534 | ) | |
(1,176,404 | ) | |||
Gas Utilities — (0.3)% | ||||
New Jersey Resources Corp. | (2,328) | (103,759 | ) | |
Health Care Equipment and Supplies — (3.8)% | ||||
Avanos Medical, Inc. | (9,136) | (307,883 | ) | |
Boston Scientific Corp. | (7,014) | (317,173 | ) | |
Cantel Medical Corp. | (3,969) | (281,402 | ) | |
Merit Medical Systems, Inc. | (1,275) | (39,806 | ) | |
Neogen Corp. | (4,503) | (293,866 | ) | |
(1,240,130 | ) | |||
Health Care Providers and Services — (1.9)% | ||||
Acadia Healthcare Co., Inc. | (8,793) | (292,103 | ) | |
Cigna Corp. | (1,530) | (312,870 | ) | |
(604,973 | ) | |||
Hotels, Restaurants and Leisure — (4.2)% | ||||
Churchill Downs, Inc. | (2,297) | (315,149 | ) | |
Domino's Pizza, Inc. | (544) | (159,816 | ) | |
Hyatt Hotels Corp., Class A | (3,486) | (312,729 | ) | |
Marriott International, Inc., Class A | (1,872) | (283,477 | ) | |
Marriott Vacations Worldwide Corp. | (2,204) | (283,787 | ) | |
(1,354,958 | ) | |||
Household Durables — (0.7)% | ||||
Mohawk Industries, Inc. | (1,775) | (242,075 | ) | |
Insurance — (0.9)% | ||||
Enstar Group Ltd. | (1,407) | (291,052 | ) | |
Interactive Media and Services — (0.9)% | ||||
Zillow Group, Inc., Class C | (6,062) | (278,488 | ) | |
Internet and Direct Marketing Retail — (0.9)% | ||||
Wayfair, Inc., Class A | (3,050) | (275,629 | ) | |
IT Services — (3.1)% | ||||
CoreLogic, Inc. | (3,312) | (144,768 | ) | |
Evo Payments, Inc., Class A | (9,662) | (255,173 | ) | |
Paychex, Inc. | (3,539) | (301,027 | ) | |
Twilio, Inc., Class A | (3,077) | (302,408 | ) | |
(1,003,376 | ) | |||
Life Sciences Tools and Services — (0.8)% | ||||
Charles River Laboratories International, Inc. | (1,772) | (270,691 | ) | |
Machinery — (2.4)% | ||||
Deere & Co. | (478) | (82,818 | ) | |
Donaldson Co., Inc. | (5,271) | (303,715 | ) | |
Kennametal, Inc. | (2,145) | (79,129 | ) | |
Westinghouse Air Brake Technologies Corp. | (3,963) | (308,322 | ) | |
(773,984 | ) |
12
Shares | Value | |||
Mortgage Real Estate Investment Trusts (REITs) — (2.4)% | ||||
AGNC Investment Corp. | (14,852) | $ | (262,583 | ) |
Annaly Capital Management, Inc. | (27,905) | (262,865 | ) | |
New Residential Investment Corp. | (15,935) | (256,713 | ) | |
(782,161 | ) | |||
Multi-Utilities — (2.4)% | ||||
Consolidated Edison, Inc. | (3,260) | (294,932 | ) | |
NiSource, Inc. | (10,130) | (282,019 | ) | |
Sempra Energy | (1,351) | (204,650 | ) | |
(781,601 | ) | |||
Multiline Retail — (0.3)% | ||||
Macy's, Inc. | (5,255) | (89,335 | ) | |
Oil, Gas and Consumable Fuels — (4.7)% | ||||
Cheniere Energy, Inc. | (4,142) | (252,952 | ) | |
Concho Resources, Inc. | (1,643) | (143,877 | ) | |
Diamondback Energy, Inc. | (3,444) | (319,810 | ) | |
Exxon Mobil Corp. | (4,168) | (290,843 | ) | |
Targa Resources Corp. | (6,630) | (270,703 | ) | |
Williams Cos., Inc. (The) | (11,172) | (265,000 | ) | |
(1,543,185 | ) | |||
Pharmaceuticals — (1.1)% | ||||
Catalent, Inc. | (1,986) | (111,812 | ) | |
MyoKardia, Inc. | (1,573) | (114,648 | ) | |
Zogenix, Inc. | (2,191) | (114,217 | ) | |
(340,677 | ) | |||
Professional Services — (0.8)% | ||||
ManpowerGroup, Inc. | (2,701) | (262,267 | ) | |
Real Estate Management and Development — (1.7)% | ||||
Howard Hughes Corp. (The) | (2,244) | (284,539 | ) | |
Kennedy-Wilson Holdings, Inc. | (12,653) | (282,162 | ) | |
(566,701 | ) | |||
Road and Rail — (1.3)% | ||||
JB Hunt Transport Services, Inc. | (2,247) | (262,405 | ) | |
Ryder System, Inc. | (2,997) | (162,767 | ) | |
(425,172 | ) | |||
Semiconductors and Semiconductor Equipment — (2.4)% | ||||
Brooks Automation, Inc. | (5,323) | (223,353 | ) | |
Cabot Microelectronics Corp. | (1,849) | (266,847 | ) | |
First Solar, Inc. | (5,458) | (305,430 | ) | |
(795,630 | ) | |||
Software — (3.5)% | ||||
2U, Inc. | (12,772) | (306,400 | ) | |
8x8, Inc. | (14,420) | (263,886 | ) | |
Envestnet, Inc. | (4,478) | (311,803 | ) | |
LivePerson, Inc. | (6,979) | (258,223 | ) | |
(1,140,312 | ) | |||
Specialty Retail — (2.5)% | ||||
Floor & Decor Holdings, Inc., Class A | (5,298) | (269,191 | ) |
13
Shares | Value | |||
Gap, Inc. (The) | (16,848) | $ | (297,873 | ) |
Penske Automotive Group, Inc. | (4,961) | (249,141 | ) | |
(816,205 | ) | |||
Textiles, Apparel and Luxury Goods — (1.0)% | ||||
VF Corp. | (3,161) | (315,025 | ) | |
Trading Companies and Distributors — (1.9)% | ||||
Air Lease Corp. | (5,557) | (264,069 | ) | |
GATX Corp. | (3,523) | (291,880 | ) | |
Univar Solutions, Inc. | (2,980) | (72,235 | ) | |
(628,184 | ) | |||
Water Utilities — (1.0)% | ||||
Aqua America, Inc. | (6,693) | (314,169 | ) | |
TOTAL COMMON STOCKS SOLD SHORT (Proceeds $25,150,189) | (27,091,894 | ) | ||
OTHER ASSETS AND LIABILITIES(3) — 83.4% | 27,149,928 | |||
TOTAL NET ASSETS — 100.0% | $ | 32,573,346 |
NOTES TO SCHEDULE OF INVESTMENTS |
(1) | Non-income producing. |
(2) | Security, or a portion thereof, has been pledged at the custodian bank or with a broker for collateral requirements on securities sold short. At the period end, the aggregate value of securities pledged was $6,160,905. |
(3) | Amount relates primarily to deposits for securities sold short at period end. |
See Notes to Financial Statements.
14
Statement of Assets and Liabilities |
DECEMBER 31, 2019 (UNAUDITED) | |||
Assets | |||
Investment securities, at value (cost of $28,966,879) | $ | 32,515,312 | |
Deposits for securities sold short | 27,734,357 | ||
Receivable for capital shares sold | 1,596 | ||
Dividends and interest receivable | 56,839 | ||
60,308,104 | |||
Liabilities | |||
Securities sold short, at value (proceeds of $25,150,189) | 27,091,894 | ||
Disbursements in excess of demand deposit cash | 1,621 | ||
Payable for investments purchased | 104,737 | ||
Payable for capital shares redeemed | 441,960 | ||
Accrued management fees | 37,642 | ||
Distribution and service fees payable | 2,323 | ||
Dividend expense payable on securities sold short | 54,581 | ||
27,734,758 | |||
Net Assets | $ | 32,573,346 | |
Net Assets Consist of: | |||
Capital (par value and paid-in surplus) | $ | 33,169,489 | |
Distributable earnings | (596,143 | ) | |
$ | 32,573,346 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | ||||
Investor Class, $0.01 Par Value | $15,749,815 | 1,554,003 | $10.13 | |||
I Class, $0.01 Par Value | $12,216,347 | 1,173,113 | $10.41 | |||
Y Class, $0.01 Par Value | $4,771 | 458 | $10.42 | |||
A Class, $0.01 Par Value | $1,542,459 | 157,273 | $9.81* | |||
C Class, $0.01 Par Value | $1,292,704 | 146,300 | $8.84 | |||
R Class, $0.01 Par Value | $1,762,484 | 186,020 | $9.47 | |||
R5 Class, $0.01 Par Value | $4,766 | 458 | $10.41 |
See Notes to Financial Statements.
15
Statement of Operations |
FOR THE SIX MONTHS ENDED DECEMBER 31, 2019 (UNAUDITED) | |||
Investment Income (Loss) | |||
Income: | |||
Dividends (net of foreign taxes withheld of $9,615) | $ | 440,633 | |
Interest | 416,587 | ||
857,220 | |||
Expenses: | |||
Dividend expense on securities sold short | 435,135 | ||
Management fees | 333,682 | ||
Distribution and service fees: | |||
A Class | 2,975 | ||
C Class | 9,094 | ||
R Class | 5,180 | ||
Directors' fees and expenses | 2,130 | ||
Other expenses | 167 | ||
788,363 | |||
Net investment income (loss) | 68,857 | ||
Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investment transactions | 2,736,096 | ||
Securities sold short transactions | (4,173,445 | ) | |
Foreign currency translation transactions | (6,094 | ) | |
(1,443,443 | ) | ||
Change in net unrealized appreciation (depreciation) on: | |||
Investments | (993,026 | ) | |
Securities sold short | 674,104 | ||
Translation of assets and liabilities in foreign currencies | (350 | ) | |
(319,272 | ) | ||
Net realized and unrealized gain (loss) | (1,762,715 | ) | |
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | (1,693,858 | ) |
See Notes to Financial Statements.
16
Statement of Changes in Net Assets |
SIX MONTHS ENDED DECEMBER 31, 2019 (UNAUDITED) AND YEAR ENDED JUNE 30, 2019 | ||||||
Increase (Decrease) in Net Assets | December 31, 2019 | June 30, 2019 | ||||
Operations | ||||||
Net investment income (loss) | $ | 68,857 | $ | 381,871 | ||
Net realized gain (loss) | (1,443,443 | ) | 1,176,509 | |||
Change in net unrealized appreciation (depreciation) | (319,272 | ) | (2,798,465 | ) | ||
Net increase (decrease) in net assets resulting from operations | (1,693,858 | ) | (1,240,085 | ) | ||
Distributions to Shareholders | ||||||
From earnings: | ||||||
Investor Class | — | (1,794,225 | ) | |||
I Class | — | (1,330,784 | ) | |||
Y Class | — | (145,291 | ) | |||
A Class | — | (169,123 | ) | |||
C Class | — | (242,745 | ) | |||
R Class | — | (122,773 | ) | |||
R5 Class | — | (247 | ) | |||
Decrease in net assets from distributions | — | (3,805,188 | ) | |||
Capital Share Transactions | ||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | (25,203,493 | ) | (13,231,865 | ) | ||
Net increase (decrease) in net assets | (26,897,351 | ) | (18,277,138 | ) | ||
Net Assets | ||||||
Beginning of period | 59,470,697 | 77,747,835 | ||||
End of period | $ | 32,573,346 | $ | 59,470,697 |
See Notes to Financial Statements.
17
Notes to Financial Statements |
DECEMBER 31, 2019 (UNAUDITED)
1. Organization
American Century Quantitative Equity Funds, Inc. (the corporation) is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company and is organized as a Maryland corporation. AC Alternatives Equity Market Neutral Fund (the fund) is one fund in a series issued by the corporation. The fund’s investment objective is to seek capital appreciation independent of equity market conditions.
The fund offers the Investor Class, I Class, Y Class, A Class, C Class, R Class and R5 Class. The A Class may incur an initial sales charge. The A Class and C Class may be subject to a contingent deferred sales charge.
2. Significant Accounting Policies
The following is a summary of significant accounting policies consistently followed by the fund in preparation of its financial statements. The fund is an investment company and follows accounting and reporting guidance in accordance with accounting principles generally accepted in the United States of America. This may require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from these estimates. Management evaluated the impact of events or transactions occurring through the date the financial statements were issued that would merit recognition or disclosure.
Investment Valuations — The fund determines the fair value of its investments and computes its net asset value per share at the close of regular trading (usually 4 p.m. Eastern time) on the New York Stock Exchange (NYSE) on each day the NYSE is open. The Board of Directors has adopted valuation policies and procedures to guide the investment advisor in the fund’s investment valuation process and to provide methodologies for the oversight of the fund’s pricing function.
Equity securities that are listed or traded on a domestic securities exchange are valued at the last reported sales price or at the official closing price as provided by the exchange. Equity securities traded on foreign securities exchanges are generally valued at the closing price of such securities on the exchange where primarily traded or at the close of the NYSE, if that is earlier. If no last sales price is reported, or if local convention or regulation so provides, the mean of the latest bid and asked prices may be used. Securities traded over-the-counter are valued at the mean of the latest bid and asked prices, the last sales price, or the official closing price. Equity securities initially expressed in local currencies are translated into U.S. dollars at the mean of the appropriate currency exchange rate at the close of the NYSE as provided by an independent pricing service.
Open-end management investment companies are valued at the reported net asset value per share. Repurchase agreements are valued at cost, which approximates fair value.
If the fund determines that the market price for an investment is not readily available or the valuation methods mentioned above do not reflect an investment’s fair value, such investment is valued as determined in good faith by the Board of Directors or its delegate, in accordance with policies and procedures adopted by the Board of Directors. In its determination of fair value, the fund may review several factors including, but not limited to, market information regarding the specific investment or comparable investments and correlation with other investment types, futures indices or general market indicators. Circumstances that may cause the fund to use these procedures to value an investment include, but are not limited to: an investment has been declared in default or is distressed; trading in a security has been suspended during the trading day or a security is not actively trading on its principal exchange; prices received from a regular pricing source are deemed unreliable; or there is a foreign market holiday and no trading occurred.
The fund monitors for significant events occurring after the close of an investment’s primary exchange but before the fund’s net asset value per share is determined. Significant events may include, but are not limited to: corporate announcements and transactions; governmental action and political unrest that could impact a specific investment or an investment sector; or armed conflicts, natural disasters and similar events that could affect investments in a specific country or region. The fund also monitors for significant fluctuations between domestic and foreign markets, as evidenced by the U.S. market or such other indicators that the Board of
18
Directors, or its delegate, deems appropriate. The fund may apply a model-derived factor to the closing price of equity securities traded on foreign securities exchanges. The factor is based on observable market data as provided by an independent pricing service.
Security Transactions — Security transactions are accounted for as of the trade date. Net realized gains and losses are determined on the identified cost basis, which is also used for federal income tax purposes.
Investment Income — Dividend income less foreign taxes withheld, if any, is recorded as of the ex-dividend date. Distributions received on securities that represent a return of capital or long-term capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The fund may estimate the components of distributions received that may be considered nontaxable distributions or long-term capital gain distributions for income tax purposes. Interest income is recorded on the accrual basis and includes accretion of discounts and amortization of premiums.
Securities Sold Short — The fund enters into short sales, which is selling securities it does not own, as part of its normal investment activities. Upon selling a security short, the fund will segregate cash, cash equivalents or other appropriate liquid securities in at least an amount equal to the current market value of the securities sold short until the fund replaces the borrowed security. Interest earned on segregated cash for securities sold short, if any, is reflected as interest income. The fund is required to pay any dividends or interest due on securities sold short. Such dividends and interest are recorded as an expense. The fund may pay fees or charges on the assets borrowed for securities sold short. These fees are calculated daily based upon the value of each security sold short and a rate that is dependent on the availability of such security. Liabilities for securities sold short are valued daily and changes in value are recorded as change in net unrealized appreciation (depreciation) on securities sold short. The fund records realized gain (loss) on a security sold short when it is terminated by the fund and includes as a component of net realized gain (loss) on securities sold short transactions.
Foreign Currency Translations — All assets and liabilities initially expressed in foreign currencies are translated into U.S. dollars at prevailing exchange rates at period end. The fund may enter into spot foreign currency exchange contracts to facilitate transactions denominated in a foreign currency. Purchases and sales of investment securities, dividend and interest income, spot foreign currency exchange contracts, and expenses are translated at the rates of exchange prevailing on the respective dates of such transactions. Net realized and unrealized foreign currency exchange gains or losses related to investment securities are a component of net realized gain (loss) on investment transactions and change in net unrealized appreciation (depreciation) on investments, respectively. Net realized and unrealized foreign currency exchange gains or losses related to securities sold short are a component of net realized gain (loss) on securities sold short transactions and change in net unrealized appreciation (depreciation) on securities sold short, respectively.
Repurchase Agreements — The fund may enter into repurchase agreements with institutions that American Century Investment Management, Inc. (ACIM) (the investment advisor) has determined are creditworthy pursuant to criteria adopted by the Board of Directors. The fund requires that the collateral, represented by securities, received in a repurchase transaction be transferred to the custodian in a manner sufficient to enable the fund to obtain those securities in the event of a default under the repurchase agreement. ACIM monitors, on a daily basis, the securities transferred to ensure the value, including accrued interest, of the securities under each repurchase agreement is equal to or greater than amounts owed to the fund under each repurchase agreement.
Joint Trading Account — Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the fund, along with certain other funds in the American Century Investments family of funds, may transfer uninvested cash balances into a joint trading account. These balances are invested in one or more repurchase agreements that are collateralized by U.S. Treasury or Agency obligations.
Segregated Assets — In accordance with the 1940 Act, the fund segregates assets on its books and records to cover certain types of investment securities and other financial instruments. ACIM monitors, on a daily basis, the securities segregated to ensure the fund designates a sufficient amount of liquid assets, marked-to-market daily. The fund may also receive assets or be required to pledge assets at the custodian bank or with a broker for collateral requirements.
Income Tax Status — It is the fund’s policy to distribute substantially all net investment income and net realized gains to shareholders and to otherwise qualify as a regulated investment company under provisions of the Internal Revenue Code. Accordingly, no provision has been made for income taxes. The fund files U.S. federal, state, local and non-U.S. tax returns as applicable. The fund's tax returns are subject to examination by the relevant taxing authority until expiration of the applicable statute of limitations, which is generally three
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years from the date of filing but can be longer in certain jurisdictions. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination and for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Multiple Class — All shares of the fund represent an equal pro rata interest in the net assets of the class to which such shares belong, and have identical voting, dividend, liquidation and other rights and the same terms and conditions, except for class specific expenses and exclusive rights to vote on matters affecting only individual classes. Income, non-class specific expenses, and realized and unrealized capital gains and losses of the fund are allocated to each class of shares based on their relative net assets.
Distributions to Shareholders — Distributions from net investment income, if any, are generally declared and paid semiannually. Distributions from net realized gains, if any, are generally declared and paid annually.
Indemnifications — Under the corporation’s organizational documents, its officers and directors are indemnified against certain liabilities arising out of the performance of their duties to the fund. In addition, in the normal course of business, the fund enters into contracts that provide general indemnifications. The maximum exposure under these arrangements is unknown as this would involve future claims that may be made against a fund. The risk of material loss from such claims is considered by management to be remote.
3. Fees and Transactions with Related Parties
Certain officers and directors of the corporation are also officers and/or directors of American Century Companies, Inc. (ACC). The corporation’s investment advisor, ACIM, the corporation's distributor, American Century Investment Services, Inc. (ACIS), and the corporation’s transfer agent, American Century Services, LLC, are wholly owned, directly or indirectly, by ACC.
Management Fees — The corporation has entered into a management agreement with ACIM, under which ACIM provides the fund with investment advisory and management services in exchange for a single, unified management fee (the fee) per class. The agreement provides that all expenses of managing and operating the fund, except distribution and service fees, expenses on securities sold short, brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), and extraordinary expenses, will be paid by ACIM. The fee is computed and accrued daily based on each class's daily net assets and paid monthly in arrears. The difference in the fee among the classes is a result of their separate arrangements for non-Rule 12b-1 shareholder services. It is not the result of any difference in advisory or custodial fees or other expenses related to the management of the fund's assets, which do not vary by class. The fee consists of (1) an Investment Category Fee based on the daily net assets of the fund and certain other accounts managed by the investment advisor that are in the same broad investment category as the fund and (2) a Complex Fee based on the assets of all the funds in the American Century Investments family of funds.
The Investment Category Fee range, the Complex Fee range and the effective annual management fee for each class for the period ended December 31, 2019 are as follows:
Investment Category Fee Range | Complex Fee Range | Effective Annual Management Fee | |
Investor Class | 1.0480% to 1.2300% | 0.2500% to 0.3100% | 1.37% |
I Class | 0.0500% to 0.1100% | 1.17% | |
Y Class | 0.0000% to 0.0600% | 1.12% | |
A Class | 0.2500% to 0.3100% | 1.37% | |
C Class | 0.2500% to 0.3100% | 1.37% | |
R Class | 0.2500% to 0.3100% | 1.37% | |
R5 Class | 0.0500% to 0.1100% | 1.17% |
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Distribution and Service Fees — The Board of Directors has adopted a separate Master Distribution and Individual Shareholder Services Plan for each of the A Class, C Class and R Class (collectively the plans), pursuant to Rule 12b-1 of the 1940 Act. The plans provide that the A Class will pay ACIS an annual distribution and service fee of 0.25%. The plans provide that the C Class will pay ACIS an annual distribution and service fee of 1.00%, of which 0.25% is paid for individual shareholder services and 0.75% is paid for distribution services. The plans provide that the R Class will pay ACIS an annual distribution and service fee of 0.50%. The fees are computed and accrued daily based on each class’s daily net assets and paid monthly in arrears. The fees are used to pay financial intermediaries for distribution and individual shareholder services. Fees incurred under the plans during the period ended December 31, 2019 are detailed in the Statement of Operations.
Directors' Fees and Expenses — The Board of Directors is responsible for overseeing the investment advisor’s management and operations of the fund. The directors receive detailed information about the fund and its investment advisor regularly throughout the year, and meet at least quarterly with management of the investment advisor to review reports about fund operations. The fund’s officers do not receive compensation from the fund.
4. Investment Transactions
Purchases and sales of investment securities and securities sold short, excluding short-term investments, for the period ended December 31, 2019 were $68,532,746 and $66,268,727, respectively.
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5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended December 31, 2019 | Year ended June 30, 2019 | |||||||||
Shares | Amount | Shares | Amount | |||||||
Investor Class/Shares Authorized | 70,000,000 | 70,000,000 | ||||||||
Sold | 83,250 | $ | 874,143 | 704,735 | $ | 7,814,316 | ||||
Issued in reinvestment of distributions | — | — | 166,521 | 1,788,434 | ||||||
Redeemed | (733,451 | ) | (7,601,313 | ) | (1,920,574 | ) | (20,976,407 | ) | ||
(650,201 | ) | (6,727,170 | ) | (1,049,318 | ) | (11,373,657 | ) | |||
I Class/Shares Authorized | 30,000,000 | 30,000,000 | ||||||||
Sold | 172,168 | 1,867,492 | 1,444,629 | 16,160,116 | ||||||
Issued in reinvestment of distributions | — | — | 120,860 | 1,330,671 | ||||||
Redeemed | (1,100,038 | ) | (11,690,781 | ) | (1,964,168 | ) | (21,951,558 | ) | ||
(927,870 | ) | (9,823,289 | ) | (398,679 | ) | (4,460,771 | ) | |||
Y Class/Shares Authorized | 50,000,000 | 50,000,000 | ||||||||
Sold | 202,500 | 2,197,389 | 531,068 | 5,973,794 | ||||||
Issued in reinvestment of distributions | — | — | 13,196 | 145,291 | ||||||
Redeemed | (798,438 | ) | (8,488,192 | ) | (13,755 | ) | (153,091 | ) | ||
(595,938 | ) | (6,290,803 | ) | 530,509 | 5,965,994 | |||||
A Class/Shares Authorized | 20,000,000 | 20,000,000 | ||||||||
Sold | 5,616 | 57,277 | 75,025 | 818,155 | ||||||
Issued in reinvestment of distributions | — | — | 15,992 | 166,638 | ||||||
Redeemed | (121,780 | ) | (1,217,292 | ) | (159,265 | ) | (1,713,766 | ) | ||
(116,164 | ) | (1,160,015 | ) | (68,248 | ) | (728,973 | ) | |||
C Class/Shares Authorized | 20,000,000 | 20,000,000 | ||||||||
Sold | 2,089 | 19,070 | 58,746 | 575,762 | ||||||
Issued in reinvestment of distributions | — | — | 25,091 | 237,364 | ||||||
Redeemed | (101,467 | ) | (927,099 | ) | (330,642 | ) | (3,193,876 | ) | ||
(99,378 | ) | (908,029 | ) | (246,805 | ) | (2,380,750 | ) | |||
R Class/Shares Authorized | 20,000,000 | 20,000,000 | ||||||||
Sold | 8,016 | 78,873 | 21,734 | 224,860 | ||||||
Issued in reinvestment of distributions | — | — | 12,166 | 122,762 | ||||||
Redeemed | (38,495 | ) | (372,549 | ) | (57,536 | ) | (596,445 | ) | ||
(30,479 | ) | (293,676 | ) | (23,636 | ) | (248,823 | ) | |||
R5 Class/Shares Authorized | 50,000,000 | 50,000,000 | ||||||||
Sold | 159 | 1,696 | 7,859 | 89,105 | ||||||
Issued in reinvestment of distributions | — | — | 22 | 247 | ||||||
Redeemed | (208 | ) | (2,207 | ) | (8,325 | ) | (94,237 | ) | ||
(49 | ) | (511 | ) | (444 | ) | (4,885 | ) | |||
Net increase (decrease) | (2,420,079 | ) | $ | (25,203,493 | ) | (1,256,621 | ) | $ | (13,231,865 | ) |
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6. Fair Value Measurements
The fund’s investments valuation process is based on several considerations and may use multiple inputs to determine the fair value of the investments held by the fund. In conformity with accounting principles generally accepted in the United States of America, the inputs used to determine a valuation are classified into three broad levels.
• | Level 1 valuation inputs consist of unadjusted quoted prices in an active market for identical investments. |
• | Level 2 valuation inputs consist of direct or indirect observable market data (including quoted prices for comparable investments, evaluations of subsequent market events, interest rates, prepayment speeds, credit risk, etc.). These inputs also consist of quoted prices for identical investments initially expressed in local currencies that are adjusted through translation into U.S. dollars. |
• | Level 3 valuation inputs consist of unobservable data (including a fund’s own assumptions). |
The level classification is based on the lowest level input that is significant to the fair valuation measurement. The valuation inputs are not necessarily an indication of the risks associated with investing in these securities or other financial instruments.
The following is a summary of the level classifications as of period end. The Schedule of Investments provides additional information on the fund’s portfolio holdings.
Level 1 | Level 2 | Level 3 | ||||||
Assets | ||||||||
Investment Securities | ||||||||
Common Stocks | $ | 27,205,414 | — | — | ||||
Temporary Cash Investments | 2,767 | $ | 5,307,131 | — | ||||
$ | 27,208,181 | $ | 5,307,131 | — | ||||
Liabilities | ||||||||
Securities Sold Short | ||||||||
Common Stocks | $ | 27,091,894 | — | — |
7. Risk Factors
The fund is subject to short sales risk. If the market price of a security increases after the fund borrows the security, the fund may suffer a loss when it replaces the borrowed security at the higher price. Any loss will be increased by the amount of compensation, interest or dividends, and transaction costs the fund must pay to the lender of the borrowed security.
The fund's investment strategy utilizes leverage, which can increase market exposure and subject the fund to greater risk and higher volatility.
If the fund is overweighted in a stock or sector, any negative development related to that stock or sector will have a greater impact on the fund than other funds that are not overweighted in that stock or sector.
The fund’s investment process may result in high portfolio turnover, which could mean high transaction costs, affecting both performance and capital gains tax liabilities to investors.
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8. Federal Tax Information
The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
As of period end, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $ | 29,041,060 | |
Gross tax appreciation of investments | $ | 4,007,509 | |
Gross tax depreciation of investments | (533,257 | ) | |
Net tax appreciation (depreciation) of investments | $ | 3,474,252 | |
Gross tax appreciation on securities sold short | 1,247,929 | ||
Gross tax depreciation on securities sold short | (3,189,634 | ) | |
Net tax appreciation (depreciation) | $ | 1,532,547 |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales.
As of June 30, 2019, the fund had post-October capital loss deferrals of $(183,233), which represent certain qualified losses that the fund has elected to treat as having been incurred in the following fiscal year for federal income tax purposes.
9. Subsequent Event
On September 27, 2019, the Board of Directors approved a plan of liquidation for the fund. The liquidation was effective January 24, 2020.
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Financial Highlights |
For a Share Outstanding Throughout the Years Ended June 30 (except as noted) | ||||||||||||||
Per-Share Data | Ratios and Supplemental Data | |||||||||||||
Income From Investment Operations: | Ratio to Average Net Assets of: | |||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Distributions From Net Realized Gains | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Operating Expenses (excluding expenses on securities sold short) | Net Investment Income (Loss) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
Investor Class | ||||||||||||||
2019(3) | $10.51 | 0.01 | (0.39) | (0.38) | — | $10.13 | (3.71)% | 3.04%(4) | 1.38%(4) | 0.23%(4) | 141% | $15,750 | ||
2019 | $11.30 | 0.06 | (0.30) | (0.24) | (0.55) | $10.51 | (2.17)% | 3.13% | 1.38% | 0.53% | 307% | $23,171 | ||
2018 | $11.11 | (0.08) | 0.27 | 0.19 | — | $11.30 | 1.71% | 3.07% | 1.38% | (0.69)% | 289% | $36,778 | ||
2017 | $11.01 | (0.13) | 0.23 | 0.10 | — | $11.11 | 0.91% | 2.92% | 1.38% | (1.17)% | 344% | $80,666 | ||
2016 | $11.12 | (0.14) | 0.03 | (0.11) | — | $11.01 | (0.99)% | 2.93% | 1.40% | (1.25)% | 235% | $84,899 | ||
2015 | $11.24 | (0.16) | 0.04 | (0.12) | — | $11.12 | (1.07)% | 2.91% | 1.38% | (1.42)% | 243% | $57,263 | ||
I Class | ||||||||||||||
2019(3) | $10.79 | 0.02 | (0.40) | (0.38) | — | $10.41 | (3.52)% | 2.84%(4) | 1.18%(4) | 0.43%(4) | 141% | $12,216 | ||
2019 | $11.57 | 0.08 | (0.31) | (0.23) | (0.55) | $10.79 | (2.12)% | 2.93% | 1.18% | 0.73% | 307% | $22,672 | ||
2018 | $11.34 | (0.05) | 0.28 | 0.23 | — | $11.57 | 2.03% | 2.87% | 1.18% | (0.49)% | 289% | $28,914 | ||
2017 | $11.22 | (0.11) | 0.23 | 0.12 | — | $11.34 | 1.07% | 2.72% | 1.18% | (0.97)% | 344% | $21,132 | ||
2016 | $11.30 | (0.12) | 0.04 | (0.08) | — | $11.22 | (0.71)% | 2.73% | 1.20% | (1.05)% | 235% | $14,129 | ||
2015 | $11.41 | (0.14) | 0.03 | (0.11) | — | $11.30 | (0.96)% | 2.71% | 1.18% | (1.22)% | 243% | $9,509 | ||
Y Class | ||||||||||||||
2019(3) | $10.80 | 0.04 | (0.42) | (0.38) | — | $10.42 | (3.52)% | 2.79%(4) | 1.13%(4) | 0.48%(4) | 141% | $5 | ||
2019 | $11.57 | 0.09 | (0.31) | (0.22) | (0.55) | $10.80 | (2.03)% | 2.88% | 1.13% | 0.78% | 307% | $6,441 | ||
2018 | $11.34 | (0.01) | 0.24 | 0.23 | — | $11.57 | 2.03% | 2.82% | 1.13% | (0.44)% | 289% | $762 | ||
2017(5) | $11.47 | (0.02) | (0.11) | (0.13) | — | $11.34 | (1.13)% | 2.67%(4) | 1.13%(4) | (0.64)%(4) | 344%(6) | $5 |
For a Share Outstanding Throughout the Years Ended June 30 (except as noted) | ||||||||||||||
Per-Share Data | Ratios and Supplemental Data | |||||||||||||
Income From Investment Operations: | Ratio to Average Net Assets of: | |||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Distributions From Net Realized Gains | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Operating Expenses (excluding expenses on securities sold short) | Net Investment Income (Loss) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
A Class | ||||||||||||||
2019(3) | $10.18 | —(7) | (0.37) | (0.37) | — | $9.81 | (3.73)% | 3.29%(4) | 1.63%(4) | (0.02)%(4) | 141% | $1,542 | ||
2019 | $11.00 | 0.03 | (0.30) | (0.27) | (0.55) | $10.18 | (2.42)% | 3.38% | 1.63% | 0.28% | 307% | $2,785 | ||
2018 | $10.83 | (0.10) | 0.27 | 0.17 | — | $11.00 | 1.48% | 3.32% | 1.63% | (0.94)% | 289% | $3,757 | ||
2017 | $10.76 | (0.16) | 0.23 | 0.07 | — | $10.83 | 0.65% | 3.17% | 1.63% | (1.42)% | 344% | $4,888 | ||
2016 | $10.90 | (0.17) | 0.03 | (0.14) | — | $10.76 | (1.28)% | 3.18% | 1.65% | (1.50)% | 235% | $11,113 | ||
2015 | $11.04 | (0.19) | 0.05 | (0.14) | — | $10.90 | (1.27)% | 3.16% | 1.63% | (1.67)% | 243% | $18,129 | ||
C Class | ||||||||||||||
2019(3) | $9.21 | (0.04) | (0.33) | (0.37) | — | $8.84 | (4.02)% | 4.04%(4) | 2.38%(4) | (0.77)%(4) | 141% | $1,293 | ||
2019 | $10.07 | (0.04) | (0.27) | (0.31) | (0.55) | $9.21 | (3.26)% | 4.13% | 2.38% | (0.47)% | 307% | $2,263 | ||
2018 | $10.00 | (0.17) | 0.24 | 0.07 | — | $10.07 | 0.70% | 4.07% | 2.38% | (1.69)% | 289% | $4,960 | ||
2017 | $10.01 | (0.22) | 0.21 | (0.01) | — | $10.00 | (0.10)% | 3.92% | 2.38% | (2.17)% | 344% | $5,207 | ||
2016 | $10.20 | (0.23) | 0.04 | (0.19) | — | $10.01 | (1.86)% | 3.93% | 2.40% | (2.25)% | 235% | $7,182 | ||
2015 | $10.42 | (0.25) | 0.03 | (0.22) | — | $10.20 | (2.11)% | 3.91% | 2.38% | (2.42)% | 243% | $6,413 | ||
R Class | ||||||||||||||
2019(3) | $9.85 | (0.02) | (0.36) | (0.38) | — | $9.47 | (3.96)% | 3.54%(4) | 1.88%(4) | (0.27)%(4) | 141% | $1,762 | ||
2019 | $10.68 | —(7) | (0.28) | (0.28) | (0.55) | $9.85 | (2.68)% | 3.63% | 1.88% | 0.03% | 307% | $2,133 | ||
2018 | $10.55 | (0.13) | 0.26 | 0.13 | — | $10.68 | 1.23% | 3.57% | 1.88% | (1.19)% | 289% | $2,565 | ||
2017 | $10.51 | (0.18) | 0.22 | 0.04 | — | $10.55 | 0.38% | 3.42% | 1.88% | (1.67)% | 344% | $3,416 | ||
2016 | $10.66 | (0.19) | 0.04 | (0.15) | — | $10.51 | (1.41)% | 3.43% | 1.90% | (1.75)% | 235% | $3,742 | ||
2015 | $10.83 | (0.21) | 0.04 | (0.17) | — | $10.66 | (1.57)% | 3.41% | 1.88% | (1.92)% | 243% | $2,187 |
For a Share Outstanding Throughout the Years Ended June 30 (except as noted) | ||||||||||||||
Per-Share Data | Ratios and Supplemental Data | |||||||||||||
Income From Investment Operations: | Ratio to Average Net Assets of: | |||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Distributions From Net Realized Gains | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Operating Expenses (excluding expenses on securities sold short) | Net Investment Income (Loss) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
R5 Class | ||||||||||||||
2019(3) | $10.79 | 0.02 | (0.40) | (0.38) | — | $10.41 | (3.52)% | 2.84%(4) | 1.18%(4) | 0.43%(4) | 141% | $5 | ||
2019 | $11.56 | 0.11 | (0.33) | (0.22) | (0.55) | $10.79 | (2.03)% | 2.93% | 1.18% | 0.73% | 307% | $5 | ||
2018 | $11.34 | (0.04) | 0.26 | 0.22 | — | $11.56 | 1.94% | 2.87% | 1.18% | (0.49)% | 289% | $11 | ||
2017(5) | $11.47 | (0.02) | (0.11) | (0.13) | — | $11.34 | (1.13)% | 2.72%(4) | 1.18%(4) | (0.69)%(4) | 344%(6) | $5 |
Notes to Financial Highlights |
(1) | Computed using average shares outstanding throughout the period. |
(2) | Total returns are calculated based on the net asset value of the last business day and do not reflect applicable sales charges, if any. Total returns for periods less than one year are not annualized. |
(3) | Six months ended December 31, 2019 (unaudited). |
(4) | Annualized. |
(5) | April 10, 2017 (commencement of sale) through June 30, 2017. |
(6) | Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended June 30, 2017. |
(7) | Per-share amount was less than $0.005. |
See Notes to Financial Statements.
Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain retirement accounts are subject to federal income tax withholding, unless you elect not to have withholding apply*. Tax will be withheld on the total amount withdrawn even though you may be receiving amounts that are not subject to withholding, such as nondeductible contributions. In such case, excess amounts of withholding could occur. You may adjust your withholding election so that a greater or lesser amount will be withheld.
If you don’t want us to withhold on this amount, you must notify us to not withhold the federal income tax. You may notify us in writing or in certain situations by telephone or through other electronic means. For systematic withdrawals, your withholding election will remain in effect until revoked or changed by filing a new election. You have the right to revoke your election at any time and change your withholding percentage for future distributions.
Remember, even if you elect not to have income tax withheld, you are liable for paying income tax on the taxable portion of your withdrawal. If you elect not to have income tax withheld or you don’t have enough income tax withheld, you may be responsible for payment of estimated tax. You may incur penalties under the estimated tax rules if your withholding and estimated tax payments are not sufficient. You can reduce or defer the income tax on a distribution by directly or indirectly rolling such distribution over to another IRA or eligible plan. You should consult your tax advisor for additional information.
State tax will be withheld if, at the time of your distribution, your address is within one of the mandatory withholding states and you have federal income tax withheld (or as otherwise required by state law). State taxes will be withheld from your distribution in accordance with the respective state rules.
*Some 403(b), 457 and qualified retirement plan distributions may be subject to 20% mandatory withholding, as they are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
Descriptions of the principles and policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund are available without charge, upon request, by calling 1-800-345-2021 or visiting American Century Investments’ website at americancentury.com/proxy. A description of the policies is also available on the Securities and Exchange Commission’s website at sec.gov. Information regarding how the investment advisor voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on americancentury.com/proxy. It is also available at sec.gov.
Quarterly Portfolio Disclosure
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-Q or as an exhibit to its reports on Form N-PORT. The fund’s Forms N-Q and Form N-PORT reports are available on the SEC’s website at sec.gov. The fund also makes its complete schedule of portfolio holdings for the most recent quarter of its fiscal year available on its website at americancentury.com and, upon request, by calling 1-800-345-2021.
28
Notes |
29
Notes |
30
Notes |
31
Notes |
32
Contact Us | americancentury.com | |
Automated Information Line | 1-800-345-8765 | |
Investor Services Representative | 1-800-345-2021 or 816-531-5575 | |
Investors Using Advisors | 1-800-378-9878 | |
Business, Not-For-Profit, Employer-Sponsored Retirement Plans | 1-800-345-3533 | |
Banks and Trust Companies, Broker-Dealers, Financial Professionals, Insurance Companies | 1-800-345-6488 | |
Telecommunications Relay Service for the Deaf | 711 | |
American Century Quantitative Equity Funds, Inc. | ||
Investment Advisor: American Century Investment Management, Inc. Kansas City, Missouri | ||
This report and the statements it contains are submitted for the general information of our shareholders. The report is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus. | ||
©2020 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-91452 2002 |
Semiannual Report | |
December 31, 2019 | |
Disciplined Growth Fund | |
Investor Class (ADSIX) | |
I Class (ADCIX) | |
Y Class (ADCYX) | |
A Class (ADCVX) | |
C Class (ADCCX) | |
R Class (ADRRX) | |
R5 Class (ADGGX) |
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the fund’s shareholder reports like this one will no longer be sent by mail, unless you specifically request paper copies of the reports from the fund or from your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the fund or your financial intermediary electronically by calling or sending an email request to your appropriate contacts as listed on the back cover of this report.
You may elect to receive all future reports in paper free of charge. You can inform the fund or your financial intermediary that you wish to continue receiving paper copies of your shareholder reports by calling or sending an email request to your appropriate contacts as listed on the back cover of this report. Your election to receive reports in paper will apply to all funds held with the fund complex/your financial intermediary.
Table of Contents |
Any opinions expressed in this report reflect those of the author as of the date of the report, and do not necessarily represent the opinions of American Century Investments® or any other person in the American Century Investments organization. Any such opinions are subject to change at any time based upon market or other conditions and American Century Investments disclaims any responsibility to update such opinions. These opinions may not be relied upon as investment advice and, because investment decisions made by American Century Investments funds are based on numerous factors, may not be relied upon as an indication of trading intent on behalf of any American Century Investments fund. Security examples are used for representational purposes only and are not intended as recommendations to purchase or sell securities. Performance information for comparative indices and securities is provided to American Century Investments by third party vendors. To the best of American Century Investments’ knowledge, such information is accurate at the time of printing.
President’s Letter |
Jonathan Thomas
Dear Investor:
Thank you for reviewing this semiannual report for the period ended December 31, 2019. It provides a market overview (below), followed by a schedule of fund investments and other financial information. For additional commentary and information on fund performance, plus other investment insights, please visit our website, americancentury.com.
All Asset Classes Advanced
From higher-quality government bonds to higher-risk stocks and commodities, all major U.S. and global asset classes posted gains for the six-month period. U.S. stocks, as measured by the S&P 500 Index, advanced almost 11% for the period, outpacing the nearly 9% return for global stocks (MSCI ACWI). Income-oriented assets, including U.S. and global bonds and dividend-paying stocks, generally posted more-modest gains.
A key policy pivot from the Federal Reserve (Fed) helped set the stage for the rally. After abruptly ending its three-year rate-hike campaign in early 2019, the Fed cut rates in July. Ongoing concerns about global economic risks, including trade policy uncertainty, prompted this first Fed easing move in 10 years. And with global risks still looming, the Fed cut rates again in September and October before pausing. Similarly, the European Central Bank cut a key deposit rate and relaunched quantitative easing in a move to spark growth. These efforts helped push global yields lower, which aided performance among interest rate-sensitive assets.
Accommodative central bank policy and a lower interest rate backdrop also aided performance in equity markets. Additionally, modestly improving economic and earnings data calmed investors’ earlier worries and nudged stock returns higher. In December, a series of upbeat data helped stocks end the period on a high note. U.K. Prime Minister Boris Johnson and his Conservative Party won a decisive election victory, which resolved some lingering Brexit uncertainty. On the trade front, the U.S. House of Representatives approved the U.S.-Mexico-Canada Agreement, and the U.S. and China reached a phase 1 deal, further fueling investor optimism.
Looking ahead, we expect volatility to remain a factor as investors react to global growth trends, ongoing U.S.-China trade negotiations, central bank policy and geopolitical forces. We believe this scenario underscores the importance of using professionally managed portfolios in pursuit of investment goals. We appreciate your continued trust and confidence in us.
Sincerely,
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
2
Fund Characteristics |
DECEMBER 31, 2019 | |
Top Ten Holdings | % of net assets |
Apple, Inc. | 9.0% |
Microsoft Corp. | 7.7% |
Amazon.com, Inc. | 6.0% |
Alphabet, Inc., Class A | 4.1% |
Facebook, Inc., Class A | 3.0% |
Visa, Inc., Class A | 1.9% |
Mastercard, Inc., Class A | 1.8% |
NIKE, Inc., Class B | 1.7% |
Zoetis, Inc. | 1.6% |
Vertex Pharmaceuticals, Inc. | 1.5% |
Top Five Industries | % of net assets |
Software | 17.6% |
Technology Hardware, Storage and Peripherals | 9.0% |
IT Services | 8.8% |
Interactive Media and Services | 8.1% |
Internet and Direct Marketing Retail | 6.8% |
Types of Investments in Portfolio | % of net assets |
Common Stocks | 97.5% |
Temporary Cash Investments | 2.5% |
Other Assets and Liabilities | —* |
*Category is less than 0.05% of total net assets. |
3
Shareholder Fee Example |
Fund shareholders may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption/exchange fees; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in your fund and to compare these costs with the ongoing cost of investing in other mutual funds.
The example is based on an investment of $1,000 made at the beginning of the period and held for the entire period from July 1, 2019 to December 31, 2019.
Actual Expenses
The table provides information about actual account values and actual expenses for each class. You may use the information, together with the amount you invested, to estimate the expenses that you paid over the period. First, identify the share class you own. Then simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
If you hold Investor Class shares of any American Century Investments fund, or I Class shares of the American Century Diversified Bond Fund, in an American Century Investments account (i.e., not a financial intermediary or retirement plan account), American Century Investments may charge you a $12.50 semiannual account maintenance fee if the value of those shares is less than $10,000. We will redeem shares automatically in one of your accounts to pay the $12.50 fee. In determining your total eligible investment amount, we will include your investments in all personal accounts (including American Century Investments Brokerage accounts) registered under your Social Security number. Personal accounts include individual accounts, joint accounts, UGMA/UTMA accounts, personal trusts, Coverdell Education Savings Accounts and IRAs (including traditional, Roth, Rollover, SEP-, SARSEP- and SIMPLE-IRAs), and certain other retirement accounts. If you have only business, business retirement, employer-sponsored or American Century Investments Brokerage accounts, you are currently not subject to this fee. If you are subject to the Account Maintenance Fee, your account value could be reduced by the fee amount.
Hypothetical Example for Comparison Purposes
The table also provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio of each class of your fund and an assumed rate of return of 5% per year before expenses, which is not the actual return of a fund’s share class. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) or redemption/exchange fees. Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
4
Beginning Account Value 7/1/19 | Ending Account Value 12/31/19 | Expenses Paid During Period(1) 7/1/19 - 12/31/19 | Annualized Expense Ratio(1) | |
Actual | ||||
Investor Class | $1,000 | $1,090.60 | $5.31 | 1.01% |
I Class | $1,000 | $1,091.70 | $4.26 | 0.81% |
Y Class | $1,000 | $1,092.10 | $4.00 | 0.76% |
A Class | $1,000 | $1,089.70 | $6.62 | 1.26% |
C Class | $1,000 | $1,085.10 | $10.53 | 2.01% |
R Class | $1,000 | $1,088.40 | $7.93 | 1.51% |
R5 Class | $1,000 | $1,092.10 | $4.26 | 0.81% |
Hypothetical | ||||
Investor Class | $1,000 | $1,020.06 | $5.13 | 1.01% |
I Class | $1,000 | $1,021.06 | $4.12 | 0.81% |
Y Class | $1,000 | $1,021.32 | $3.86 | 0.76% |
A Class | $1,000 | $1,018.80 | $6.39 | 1.26% |
C Class | $1,000 | $1,015.03 | $10.18 | 2.01% |
R Class | $1,000 | $1,017.55 | $7.66 | 1.51% |
R5 Class | $1,000 | $1,021.06 | $4.12 | 0.81% |
(1) | Expenses are equal to the class's annualized expense ratio listed in the table above, multiplied by the average account value over the period, multiplied by 184, the number of days in the most recent fiscal half-year, divided by 366, to reflect the one-half year period. Annualized expense ratio reflects actual expenses, including any applicable fee waivers or expense reimbursements and excluding any acquired fund fees and expenses. |
5
Schedule of Investments |
DECEMBER 31, 2019 (UNAUDITED)
Shares | Value | |||
COMMON STOCKS — 97.5% | ||||
Aerospace and Defense — 1.3% | ||||
Boeing Co. (The) | 2,977 | $ | 969,788 | |
HEICO Corp. | 37,207 | 4,247,179 | ||
Northrop Grumman Corp. | 3,364 | 1,157,115 | ||
6,374,082 | ||||
Banks — 0.5% | ||||
Comerica, Inc. | 14,812 | 1,062,761 | ||
SVB Financial Group(1) | 4,882 | 1,225,577 | ||
2,288,338 | ||||
Beverages† | ||||
Coca-Cola Co. (The) | 199 | 11,015 | ||
Biotechnology — 3.6% | ||||
AbbVie, Inc. | 30,324 | 2,684,887 | ||
Amgen, Inc. | 12,125 | 2,922,974 | ||
Biogen, Inc.(1) | 1,814 | 538,268 | ||
Incyte Corp.(1) | 48,866 | 4,266,979 | ||
Vertex Pharmaceuticals, Inc.(1) | 32,139 | 7,036,834 | ||
17,449,942 | ||||
Building Products — 2.0% | ||||
Builders FirstSource, Inc.(1) | 56,505 | 1,435,792 | ||
Lennox International, Inc. | 11,636 | 2,838,835 | ||
Masco Corp. | 37,026 | 1,776,878 | ||
Simpson Manufacturing Co., Inc. | 23,396 | 1,877,061 | ||
Universal Forest Products, Inc. | 36,953 | 1,762,658 | ||
9,691,224 | ||||
Capital Markets — 3.1% | ||||
Artisan Partners Asset Management, Inc., Class A | 64,099 | 2,071,680 | ||
MarketAxess Holdings, Inc. | 8,101 | 3,071,170 | ||
Moody's Corp. | 7,727 | 1,834,467 | ||
MSCI, Inc. | 24,571 | 6,343,741 | ||
Piper Jaffray Cos. | 8,749 | 699,395 | ||
PJT Partners, Inc., Class A | 15,399 | 694,957 | ||
14,715,410 | ||||
Chemicals — 0.7% | ||||
PPG Industries, Inc. | 12,403 | 1,655,677 | ||
Sherwin-Williams Co. (The) | 2,993 | 1,746,535 | ||
3,402,212 | ||||
Commercial Services and Supplies — 1.9% | ||||
Cimpress plc(1) | 14,741 | 1,853,976 | ||
Cintas Corp. | 6,227 | 1,675,561 | ||
MSA Safety, Inc. | 22,494 | 2,842,342 | ||
Republic Services, Inc. | 12,058 | 1,080,758 | ||
Tetra Tech, Inc. | 11,715 | 1,009,364 |
6
Shares | Value | |||
Waste Management, Inc. | 7,152 | $ | 815,042 | |
9,277,043 | ||||
Communications Equipment — 0.6% | ||||
Cisco Systems, Inc. | 27,103 | 1,299,860 | ||
Motorola Solutions, Inc. | 9,687 | 1,560,963 | ||
2,860,823 | ||||
Construction and Engineering — 0.3% | ||||
MasTec, Inc.(1) | 20,373 | 1,307,132 | ||
Consumer Finance — 0.2% | ||||
American Express Co. | 8,151 | 1,014,718 | ||
Containers and Packaging — 0.4% | ||||
Ball Corp. | 29,114 | 1,882,802 | ||
Distributors — 0.1% | ||||
Core-Mark Holding Co., Inc. | 20,996 | 570,881 | ||
Diversified Consumer Services — 0.3% | ||||
Bright Horizons Family Solutions, Inc.(1) | 9,841 | 1,479,004 | ||
Electronic Equipment, Instruments and Components — 1.9% | ||||
CDW Corp. | 28,719 | 4,102,222 | ||
Keysight Technologies, Inc.(1) | 33,017 | 3,388,535 | ||
National Instruments Corp. | 38,039 | 1,610,571 | ||
9,101,328 | ||||
Entertainment — 1.4% | ||||
Electronic Arts, Inc.(1) | 11,653 | 1,252,814 | ||
Netflix, Inc.(1) | 1,232 | 398,638 | ||
Take-Two Interactive Software, Inc.(1) | 31,879 | 3,902,946 | ||
Zynga, Inc., Class A(1) | 220,858 | 1,351,651 | ||
6,906,049 | ||||
Equity Real Estate Investment Trusts (REITs) — 1.4% | ||||
American Tower Corp. | 20,781 | 4,775,889 | ||
SBA Communications Corp. | 8,745 | 2,107,458 | ||
6,883,347 | ||||
Food and Staples Retailing — 0.3% | ||||
Costco Wholesale Corp. | 5,134 | 1,508,985 | ||
Food Products — 0.2% | ||||
Hershey Co. (The) | 1,501 | 220,617 | ||
John B Sanfilippo & Son, Inc. | 10,487 | 957,253 | ||
1,177,870 | ||||
Health Care Equipment and Supplies — 4.8% | ||||
Align Technology, Inc.(1) | 4,584 | 1,279,119 | ||
DexCom, Inc.(1) | 22,436 | 4,907,651 | ||
Hologic, Inc.(1) | 21,358 | 1,115,101 | ||
IDEXX Laboratories, Inc.(1) | 16,363 | 4,272,870 | ||
Masimo Corp.(1) | 19,187 | 3,032,697 | ||
Penumbra, Inc.(1) | 6,962 | 1,143,648 | ||
ResMed, Inc. | 20,855 | 3,231,899 | ||
Stryker Corp. | 10,983 | 2,305,771 | ||
West Pharmaceutical Services, Inc. | 10,774 | 1,619,656 | ||
22,908,412 |
7
Shares | Value | |||
Health Care Providers and Services — 2.1% | ||||
Chemed Corp. | 12,277 | $ | 5,392,795 | |
CorVel Corp.(1) | 15,013 | 1,311,536 | ||
UnitedHealth Group, Inc. | 10,672 | 3,137,354 | ||
9,841,685 | ||||
Health Care Technology — 1.7% | ||||
Cerner Corp. | 40,571 | 2,977,506 | ||
NextGen Healthcare, Inc.(1) | 21,458 | 344,830 | ||
Omnicell, Inc.(1) | 23,750 | 1,940,850 | ||
Veeva Systems, Inc., Class A(1) | 19,510 | 2,744,276 | ||
8,007,462 | ||||
Hotels, Restaurants and Leisure — 1.5% | ||||
Chipotle Mexican Grill, Inc.(1) | 1,427 | 1,194,556 | ||
Hilton Worldwide Holdings, Inc. | 13,677 | 1,516,916 | ||
Starbucks Corp. | 37,455 | 3,293,044 | ||
Yum! Brands, Inc. | 14,011 | 1,411,328 | ||
7,415,844 | ||||
Household Durables — 0.5% | ||||
NVR, Inc.(1) | 485 | 1,847,079 | ||
Sonos, Inc.(1) | 29,383 | 458,962 | ||
2,306,041 | ||||
Household Products — 0.4% | ||||
Colgate-Palmolive Co. | 12,396 | 853,341 | ||
Procter & Gamble Co. (The) | 6,808 | 850,319 | ||
1,703,660 | ||||
Insurance — 0.3% | ||||
Arch Capital Group Ltd.(1) | 32,561 | 1,396,541 | ||
Interactive Media and Services — 8.1% | ||||
Alphabet, Inc., Class A(1) | 14,562 | 19,504,197 | ||
Facebook, Inc., Class A(1) | 70,604 | 14,491,471 | ||
IAC/InterActiveCorp(1) | 6,489 | 1,616,475 | ||
Match Group, Inc.(1) | 38,799 | 3,185,786 | ||
38,797,929 | ||||
Internet and Direct Marketing Retail — 6.8% | ||||
Amazon.com, Inc.(1) | 15,476 | 28,597,172 | ||
eBay, Inc. | 70,236 | 2,536,222 | ||
Etsy, Inc.(1) | 29,904 | 1,324,747 | ||
32,458,141 | ||||
IT Services — 8.8% | ||||
Accenture plc, Class A | 22,291 | 4,693,816 | ||
Akamai Technologies, Inc.(1) | 9,755 | 842,637 | ||
Automatic Data Processing, Inc. | 7,400 | 1,261,700 | ||
Booz Allen Hamilton Holding Corp. | 20,767 | 1,477,157 | ||
CSG Systems International, Inc. | 14,863 | 769,606 | ||
EVERTEC, Inc. | 41,939 | 1,427,604 | ||
Jack Henry & Associates, Inc. | 19,618 | 2,857,754 | ||
Mastercard, Inc., Class A | 28,343 | 8,462,936 |
8
Shares | Value | |||
PayPal Holdings, Inc.(1) | 58,801 | $ | 6,360,504 | |
Square, Inc., Class A(1) | 18,955 | 1,185,825 | ||
VeriSign, Inc.(1) | 17,834 | 3,436,255 | ||
Visa, Inc., Class A | 49,020 | 9,210,858 | ||
41,986,652 | ||||
Life Sciences Tools and Services — 0.5% | ||||
Agilent Technologies, Inc. | 13,143 | 1,121,229 | ||
Illumina, Inc.(1) | 3,780 | 1,253,977 | ||
2,375,206 | ||||
Machinery — 1.0% | ||||
Allison Transmission Holdings, Inc. | 22,468 | 1,085,654 | ||
Graco, Inc. | 48,025 | 2,497,300 | ||
Toro Co. (The) | 16,282 | 1,297,187 | ||
4,880,141 | ||||
Media — 1.3% | ||||
Cable One, Inc. | 2,212 | 3,292,496 | ||
Sirius XM Holdings, Inc. | 425,666 | 3,043,512 | ||
6,336,008 | ||||
Metals and Mining — 0.6% | ||||
Royal Gold, Inc. | 22,495 | 2,750,014 | ||
Pharmaceuticals — 2.8% | ||||
Bristol-Myers Squibb Co. | 23,444 | 1,504,870 | ||
Horizon Therapeutics plc(1) | 57,955 | 2,097,971 | ||
Merck & Co., Inc. | 20,961 | 1,906,403 | ||
Zoetis, Inc. | 58,920 | 7,798,062 | ||
13,307,306 | ||||
Professional Services — 0.7% | ||||
Insperity, Inc. | 13,708 | 1,179,437 | ||
Robert Half International, Inc. | 32,642 | 2,061,342 | ||
3,240,779 | ||||
Road and Rail — 0.4% | ||||
Landstar System, Inc. | 14,753 | 1,679,924 | ||
Semiconductors and Semiconductor Equipment — 3.0% | ||||
Broadcom, Inc. | 16,830 | 5,318,617 | ||
Inphi Corp.(1) | 16,301 | 1,206,600 | ||
Lam Research Corp. | 10,316 | 3,016,398 | ||
Qorvo, Inc.(1) | 8,064 | 937,279 | ||
QUALCOMM, Inc. | 22,220 | 1,960,471 | ||
Texas Instruments, Inc. | 15,267 | 1,958,603 | ||
14,397,968 | ||||
Software — 17.6% | ||||
Adobe, Inc.(1) | 8,895 | 2,933,660 | ||
ANSYS, Inc.(1) | 12,252 | 3,153,787 | ||
Aspen Technology, Inc.(1) | 13,796 | 1,668,350 | ||
Atlassian Corp. plc, Class A(1) | 28,367 | 3,413,685 | ||
Cadence Design Systems, Inc.(1) | 61,623 | 4,274,171 | ||
Cornerstone OnDemand, Inc.(1) | 19,471 | 1,140,027 |
9
Shares | Value | |||
Fair Isaac Corp.(1) | 6,050 | $ | 2,266,814 | |
Fortinet, Inc.(1) | 24,336 | 2,598,112 | ||
Intuit, Inc. | 21,259 | 5,568,370 | ||
Manhattan Associates, Inc.(1) | 10,820 | 862,895 | ||
Microsoft Corp. | 234,838 | 37,033,953 | ||
Oracle Corp. (New York) | 25,459 | 1,348,818 | ||
Palo Alto Networks, Inc.(1) | 10,022 | 2,317,588 | ||
Proofpoint, Inc.(1) | 13,362 | 1,533,690 | ||
RingCentral, Inc., Class A(1) | 6,939 | 1,170,401 | ||
salesforce.com, Inc.(1) | 6,783 | 1,103,187 | ||
ServiceNow, Inc.(1) | 12,084 | 3,411,555 | ||
Synopsys, Inc.(1) | 28,875 | 4,019,400 | ||
VMware, Inc., Class A(1) | 22,105 | 3,355,318 | ||
Zendesk, Inc.(1) | 15,783 | 1,209,451 | ||
84,383,232 | ||||
Specialty Retail — 2.9% | ||||
AutoZone, Inc.(1) | 3,542 | 4,219,620 | ||
Home Depot, Inc. (The) | 11,512 | 2,513,991 | ||
Murphy USA, Inc.(1) | 12,897 | 1,508,949 | ||
O'Reilly Automotive, Inc.(1) | 3,672 | 1,609,291 | ||
Ross Stores, Inc. | 33,851 | 3,940,933 | ||
13,792,784 | ||||
Technology Hardware, Storage and Peripherals — 9.0% | ||||
Apple, Inc. | 147,742 | 43,384,438 | ||
Textiles, Apparel and Luxury Goods — 2.0% | ||||
lululemon athletica, Inc.(1) | 5,306 | 1,229,241 | ||
NIKE, Inc., Class B | 82,663 | 8,374,589 | ||
9,603,830 | ||||
Thrifts and Mortgage Finance — 0.3% | ||||
Essent Group Ltd. | 30,755 | 1,598,952 | ||
Trading Companies and Distributors — 0.2% | ||||
GMS, Inc.(1) | 41,888 | 1,134,327 | ||
TOTAL COMMON STOCKS (Cost $312,427,474) | 467,589,481 | |||
TEMPORARY CASH INVESTMENTS — 2.5% | ||||
Repurchase Agreement, BMO Capital Markets Corp., (collateralized by various U.S. Treasury obligations, 2.75% - 3.75%, 9/15/21 - 11/15/43, valued at $10,018,399), in a joint trading account at 1.35%, dated 12/31/19, due 1/2/20 (Delivery value $9,807,854) | 9,807,118 | |||
Repurchase Agreement, Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 1.625%, 12/15/22, valued at $2,228,295), at 0.65%, dated 12/31/19, due 1/2/20 (Delivery value $2,182,079) | 2,182,000 | |||
State Street Institutional U.S. Government Money Market Fund, Premier Class | 6,589 | 6,589 | ||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $11,995,707) | 11,995,707 | |||
TOTAL INVESTMENT SECURITIES — 100.0% (Cost $324,423,181) | 479,585,188 | |||
OTHER ASSETS AND LIABILITIES† | (194,175 | ) | ||
TOTAL NET ASSETS — 100.0% | $ | 479,391,013 |
10
FUTURES CONTRACTS PURCHASED | |||||||||||
Reference Entity | Contracts | Expiration Date | Notional Amount | Underlying Contract Value | Unrealized Appreciation (Depreciation) | ||||||
NASDAQ 100 E-Mini | 15 | March 2020 | $ | 300 | $ | 2,625,675 | $ | 78,186 | |||
S&P 500 E-Mini | 31 | March 2020 | $ | 1,550 | 5,008,205 | 93,183 | |||||
$ | 7,633,880 | $ | 171,369 |
NOTES TO SCHEDULE OF INVESTMENTS |
† | Category is less than 0.05% of total net assets. |
(1) | Non-income producing. |
See Notes to Financial Statements.
11
Statement of Assets and Liabilities |
DECEMBER 31, 2019 (UNAUDITED) | |||
Assets | |||
Investment securities, at value (cost of $324,423,181) | $ | 479,585,188 | |
Deposits with broker for futures contracts | 303,300 | ||
Receivable for investments sold | 70,621 | ||
Receivable for capital shares sold | 228,940 | ||
Receivable for variation margin on futures contracts | 17,485 | ||
Dividends and interest receivable | 124,449 | ||
480,329,983 | |||
Liabilities | |||
Payable for capital shares redeemed | 534,709 | ||
Accrued management fees | 374,175 | ||
Distribution and service fees payable | 30,086 | ||
938,970 | |||
Net Assets | $ | 479,391,013 | |
Net Assets Consist of: | |||
Capital (par value and paid-in surplus) | $ | 296,205,269 | |
Distributable earnings | 183,185,744 | ||
$ | 479,391,013 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | ||||
Investor Class, $0.01 Par Value | $238,910,569 | 10,966,741 | $21.79 | |||
I Class, $0.01 Par Value | $175,947,485 | 8,036,016 | $21.89 | |||
Y Class, $0.01 Par Value | $358,046 | 16,339 | $21.91 | |||
A Class, $0.01 Par Value | $31,056,923 | 1,444,002 | $21.51* | |||
C Class, $0.01 Par Value | $23,119,445 | 1,171,485 | $19.74 | |||
R Class, $0.01 Par Value | $9,193,191 | 438,387 | $20.97 | |||
R5 Class, $0.01 Par Value | $805,354 | 36,760 | $21.91 |
*Maximum offering price $22.82 (net asset value divided by 0.9425).
See Notes to Financial Statements.
12
Statement of Operations |
FOR THE SIX MONTHS ENDED DECEMBER 31, 2019 (UNAUDITED) | |||
Investment Income (Loss) | |||
Income: | |||
Dividends | $ | 2,429,846 | |
Interest | 71,719 | ||
2,501,565 | |||
Expenses: | |||
Management fees | 2,368,613 | ||
Distribution and service fees: | |||
A Class | 39,608 | ||
C Class | 119,322 | ||
R Class | 24,583 | ||
Directors' fees and expenses | 19,457 | ||
Other expenses | 916 | ||
2,572,499 | |||
Fees waived(1) | (20,833 | ) | |
2,551,666 | |||
Net investment income (loss) | (50,101 | ) | |
Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investment transactions | 57,758,935 | ||
Futures contract transactions | 763,926 | ||
58,522,861 | |||
Change in net unrealized appreciation (depreciation) on: | |||
Investments | (16,139,933 | ) | |
Futures contracts | 171,369 | ||
(15,968,564 | ) | ||
Net realized and unrealized gain (loss) | 42,554,297 | ||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 42,504,196 |
(1) | Amount consists of $10,103, $7,990, $22, $1,303, $977, $406 and $32 for Investor Class, I Class, Y Class, A Class, C Class, R Class and R5 Class, respectively. |
See Notes to Financial Statements.
13
Statement of Changes in Net Assets |
SIX MONTHS ENDED DECEMBER 31, 2019 (UNAUDITED) AND YEAR ENDED JUNE 30, 2019 | ||||||
Increase (Decrease) in Net Assets | December 31, 2019 | June 30, 2019 | ||||
Operations | ||||||
Net investment income (loss) | $ | (50,101 | ) | $ | 1,351,051 | |
Net realized gain (loss) | 58,522,861 | 45,932,096 | ||||
Change in net unrealized appreciation (depreciation) | (15,968,564 | ) | (14,402,286 | ) | ||
Net increase (decrease) in net assets resulting from operations | 42,504,196 | 32,880,861 | ||||
Distributions to Shareholders | ||||||
From earnings: | ||||||
Investor Class | (19,742,836 | ) | (45,161,834 | ) | ||
I Class | (14,515,555 | ) | (29,157,974 | ) | ||
Y Class | (29,840 | ) | (64,786 | ) | ||
A Class | (2,597,617 | ) | (4,846,907 | ) | ||
C Class | (2,101,210 | ) | (5,520,779 | ) | ||
R Class | (775,728 | ) | (1,329,846 | ) | ||
R5 Class | (64,578 | ) | (174,914 | ) | ||
Decrease in net assets from distributions | (39,827,364 | ) | (86,257,040 | ) | ||
Capital Share Transactions | ||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | (57,232,339 | ) | (96,661,652 | ) | ||
Net increase (decrease) in net assets | (54,555,507 | ) | (150,037,831 | ) | ||
Net Assets | ||||||
Beginning of period | 533,946,520 | 683,984,351 | ||||
End of period | $ | 479,391,013 | $ | 533,946,520 |
See Notes to Financial Statements.
14
Notes to Financial Statements |
DECEMBER 31, 2019 (UNAUDITED)
1. Organization
American Century Quantitative Equity Funds, Inc. (the corporation) is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company and is organized as a Maryland corporation. Disciplined Growth Fund (the fund) is one fund in a series issued by the corporation. The fund’s investment objective is to seek long-term capital growth.
The fund offers the Investor Class, I Class, Y Class, A Class, C Class, R Class and R5 Class. The A Class may incur an initial sales charge. The A Class and C Class may be subject to a contingent deferred sales charge.
2. Significant Accounting Policies
The following is a summary of significant accounting policies consistently followed by the fund in preparation of its financial statements. The fund is an investment company and follows accounting and reporting guidance in accordance with accounting principles generally accepted in the United States of America. This may require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from these estimates. Management evaluated the impact of events or transactions occurring through the date the financial statements were issued that would merit recognition or disclosure.
Investment Valuations — The fund determines the fair value of its investments and computes its net asset value per share at the close of regular trading (usually 4 p.m. Eastern time) on the New York Stock Exchange (NYSE) on each day the NYSE is open. The Board of Directors has adopted valuation policies and procedures to guide the investment advisor in the fund’s investment valuation process and to provide methodologies for the oversight of the fund’s pricing function.
Equity securities that are listed or traded on a domestic securities exchange are valued at the last reported sales price or at the official closing price as provided by the exchange. Equity securities traded on foreign securities exchanges are generally valued at the closing price of such securities on the exchange where primarily traded or at the close of the NYSE, if that is earlier. If no last sales price is reported, or if local convention or regulation so provides, the mean of the latest bid and asked prices may be used. Securities traded over-the-counter are valued at the mean of the latest bid and asked prices, the last sales price, or the official closing price.
Open-end management investment companies are valued at the reported net asset value per share. Repurchase agreements are valued at cost, which approximates fair value. Exchange-traded futures contracts are valued at the settlement price as provided by the appropriate exchange.
If the fund determines that the market price for an investment is not readily available or the valuation methods mentioned above do not reflect an investment’s fair value, such investment is valued as determined in good faith by the Board of Directors or its delegate, in accordance with policies and procedures adopted by the Board of Directors. In its determination of fair value, the fund may review several factors including, but not limited to, market information regarding the specific investment or comparable investments and correlation with other investment types, futures indices or general market indicators. Circumstances that may cause the fund to use these procedures to value an investment include, but are not limited to: an investment has been declared in default or is distressed; trading in a security has been suspended during the trading day or a security is not actively trading on its principal exchange; prices received from a regular pricing source are deemed unreliable; or there is a foreign market holiday and no trading occurred.
The fund monitors for significant events occurring after the close of an investment’s primary exchange but before the fund’s net asset value per share is determined. Significant events may include, but are not limited to: corporate announcements and transactions; governmental action and political unrest that could impact a specific investment or an investment sector; or armed conflicts, natural disasters and similar events that could affect investments in a specific country or region. The fund also monitors for significant fluctuations between domestic and foreign markets, as evidenced by the U.S. market or such other indicators that the Board of Directors, or its delegate, deems appropriate. The fund may apply a model-derived factor to the closing price of equity securities traded on foreign securities exchanges. The factor is based on observable market data as provided by an independent pricing service.
15
Security Transactions — Security transactions are accounted for as of the trade date. Net realized gains and losses are determined on the identified cost basis, which is also used for federal income tax purposes.
Investment Income — Dividend income less foreign taxes withheld, if any, is recorded as of the ex-dividend date. Distributions received on securities that represent a return of capital or long-term capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The fund may estimate the components of distributions received that may be considered nontaxable distributions or long-term capital gain distributions for income tax purposes. Interest income is recorded on the accrual basis and includes accretion of discounts and amortization of premiums.
Repurchase Agreements — The fund may enter into repurchase agreements with institutions that American Century Investment Management, Inc. (ACIM) (the investment advisor) has determined are creditworthy pursuant to criteria adopted by the Board of Directors. The fund requires that the collateral, represented by securities, received in a repurchase transaction be transferred to the custodian in a manner sufficient to enable the fund to obtain those securities in the event of a default under the repurchase agreement. ACIM monitors, on a daily basis, the securities transferred to ensure the value, including accrued interest, of the securities under each repurchase agreement is equal to or greater than amounts owed to the fund under each repurchase agreement.
Joint Trading Account — Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the fund, along with certain other funds in the American Century Investments family of funds, may transfer uninvested cash balances into a joint trading account. These balances are invested in one or more repurchase agreements that are collateralized by U.S. Treasury or Agency obligations.
Segregated Assets — In accordance with the 1940 Act, the fund segregates assets on its books and records to cover certain types of investment securities and other financial instruments. ACIM monitors, on a daily basis, the securities segregated to ensure the fund designates a sufficient amount of liquid assets, marked-to-market daily. The fund may also receive assets or be required to pledge assets at the custodian bank or with a broker for collateral requirements.
Income Tax Status — It is the fund’s policy to distribute substantially all net investment income and net realized gains to shareholders and to otherwise qualify as a regulated investment company under provisions of the Internal Revenue Code. Accordingly, no provision has been made for income taxes. The fund files U.S. federal, state, local and non-U.S. tax returns as applicable. The fund's tax returns are subject to examination by the relevant taxing authority until expiration of the applicable statute of limitations, which is generally three years from the date of filing but can be longer in certain jurisdictions. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination and for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Multiple Class — All shares of the fund represent an equal pro rata interest in the net assets of the class to which such shares belong, and have identical voting, dividend, liquidation and other rights and the same terms and conditions, except for class specific expenses and exclusive rights to vote on matters affecting only individual classes. Income, non-class specific expenses, and realized and unrealized capital gains and losses of the fund are allocated to each class of shares based on their relative net assets.
Distributions to Shareholders — Distributions from net investment income, if any, are generally declared and paid semiannually. Distributions from net realized gains, if any, are generally declared and paid annually. The fund may elect to treat a portion of its payment to a redeeming shareholder, which represents the pro rata share of undistributed net investment income and net realized gains, as a distribution for federal income tax purposes (tax equalization).
Indemnifications — Under the corporation’s organizational documents, its officers and directors are indemnified against certain liabilities arising out of the performance of their duties to the fund. In addition, in the normal course of business, the fund enters into contracts that provide general indemnifications. The maximum exposure under these arrangements is unknown as this would involve future claims that may be made against a fund. The risk of material loss from such claims is considered by management to be remote.
3. Fees and Transactions with Related Parties
Certain officers and directors of the corporation are also officers and/or directors of American Century Companies, Inc. (ACC). The corporation’s investment advisor, ACIM, the corporation's distributor, American Century Investment Services, Inc. (ACIS), and the corporation’s transfer agent, American Century Services, LLC, are wholly owned, directly or indirectly, by ACC.
16
Management Fees — The corporation has entered into a management agreement with ACIM, under which ACIM provides the fund with investment advisory and management services in exchange for a single, unified management fee (the fee) per class. The agreement provides that all expenses of managing and operating the fund, except distribution and service fees, brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), and extraordinary expenses, will be paid by ACIM. The fee is computed and accrued daily based on each class's daily net assets and paid monthly in arrears. The difference in the fee among the classes is a result of their separate arrangements for non-Rule 12b-1 shareholder services. It is not the result of any difference in advisory or custodial fees or other expenses related to the management of the fund’s assets, which do not vary by class. The fee consists of (1) an Investment Category Fee based on the daily net assets of the fund and certain other accounts managed by the investment advisor that are in the same broad investment category as the fund and (2) a Complex Fee based on the assets of all the funds in the American Century Investments family of funds. Effective August 1, 2019, the investment advisor agreed to waive 0.01% of the fund's management fee. The investment advisor expects this waiver to continue until October 31, 2020 and cannot terminate it prior to such date without the approval of the Board of Directors.
The Investment Category Fee range, the Complex Fee range and the effective annual management fee before and after waiver for each class for the period ended December 31, 2019 are as follows:
Investment Category Fee Range | Complex Fee Range | Effective Annual Management Fee | ||
Before Waiver | After Waiver | |||
Investor Class | 0.6880% to 0.8700% | 0.2500% to 0.3100% | 1.01% | 1.00% |
I Class | 0.0500% to 0.1100% | 0.81% | 0.80% | |
Y Class | 0.0000% to 0.0600% | 0.76% | 0.75% | |
A Class | 0.2500% to 0.3100% | 1.01% | 1.00% | |
C Class | 0.2500% to 0.3100% | 1.01% | 1.00% | |
R Class | 0.2500% to 0.3100% | 1.01% | 1.00% | |
R5 Class | 0.0500% to 0.1100% | 0.81% | 0.80% |
Distribution and Service Fees — The Board of Directors has adopted a separate Master Distribution and Individual Shareholder Services Plan for each of the A Class, C Class and R Class (collectively the plans), pursuant to Rule 12b-1 of the 1940 Act. The plans provide that the A Class will pay ACIS an annual distribution and service fee of 0.25%. The plans provide that the C Class will pay ACIS an annual distribution and service fee of 1.00%, of which 0.25% is paid for individual shareholder services and 0.75% is paid for distribution services. The plans provide that the R Class will pay ACIS an annual distribution and service fee of 0.50%. The fees are computed and accrued daily based on each class’s daily net assets and paid monthly in arrears. The fees are used to pay financial intermediaries for distribution and individual shareholder services. Fees incurred under the plans during the period ended December 31, 2019 are detailed in the Statement of Operations.
Directors' Fees and Expenses — The Board of Directors is responsible for overseeing the investment advisor’s management and operations of the fund. The directors receive detailed information about the fund and its investment advisor regularly throughout the year, and meet at least quarterly with management of the investment advisor to review reports about fund operations. The fund’s officers do not receive compensation from the fund.
Interfund Transactions — The fund may enter into security transactions with other American Century Investments funds and other client accounts of the investment advisor, in accordance with the 1940 Act rules and procedures adopted by the Board of Directors. The rules and procedures require, among other things, that these transactions be effected at the independent current market price of the security. During the period, the interfund purchases and sales were $11,804,906 and $12,641,754, respectively. The effect of interfund transactions on the Statement of Operations was $1,667,240 in net realized gain (loss) on investment transactions.
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the period ended December 31, 2019 were $295,118,725 and $400,444,459, respectively.
17
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended December 31, 2019 | Year ended June 30, 2019 | |||||||||
Shares | Amount | Shares | Amount | |||||||
Investor Class/Shares Authorized | 170,000,000 | 170,000,000 | ||||||||
Sold | 380,513 | $ | 8,455,068 | 1,724,795 | $ | 38,178,631 | ||||
Issued in reinvestment of distributions | 889,316 | 19,280,378 | 2,313,663 | 44,454,539 | ||||||
Redeemed | (1,836,039 | ) | (41,079,827 | ) | (7,593,146 | ) | (167,211,561 | ) | ||
(566,210 | ) | (13,344,381 | ) | (3,554,688 | ) | (84,578,391 | ) | |||
I Class/Shares Authorized | 100,000,000 | 100,000,000 | ||||||||
Sold | 479,448 | 10,645,237 | 3,351,906 | 73,682,578 | ||||||
Issued in reinvestment of distributions | 664,465 | 14,478,684 | 1,504,817 | 29,065,330 | ||||||
Redeemed | (2,899,421 | ) | (64,393,759 | ) | (4,650,312 | ) | (102,481,992 | ) | ||
(1,755,508 | ) | (39,269,838 | ) | 206,411 | 265,916 | |||||
Y Class/Shares Authorized | 50,000,000 | 50,000,000 | ||||||||
Sold | — | — | 23,311 | 576,397 | ||||||
Issued in reinvestment of distributions | 1,368 | 29,840 | 3,350 | 64,786 | ||||||
Redeemed | (11,523 | ) | (263,749 | ) | (421 | ) | (9,234 | ) | ||
(10,155 | ) | (233,909 | ) | 26,240 | 631,949 | |||||
A Class/Shares Authorized | 50,000,000 | 50,000,000 | ||||||||
Sold | 120,871 | 2,649,071 | 230,717 | 4,997,549 | ||||||
Issued in reinvestment of distributions | 111,662 | 2,390,694 | 228,295 | 4,338,081 | ||||||
Redeemed | (258,537 | ) | (5,691,079 | ) | (573,977 | ) | (12,456,674 | ) | ||
(26,004 | ) | (651,314 | ) | (114,965 | ) | (3,121,044 | ) | |||
C Class/Shares Authorized | 20,000,000 | 20,000,000 | ||||||||
Sold | 13,071 | 262,626 | 48,617 | 973,637 | ||||||
Issued in reinvestment of distributions | 102,058 | 2,005,435 | 300,837 | 5,318,801 | ||||||
Redeemed | (249,525 | ) | (5,084,511 | ) | (828,976 | ) | (16,048,707 | ) | ||
(134,396 | ) | (2,816,450 | ) | (479,522 | ) | (9,756,269 | ) | |||
R Class/Shares Authorized | 20,000,000 | 20,000,000 | ||||||||
Sold | 44,423 | 955,862 | 106,184 | 2,301,204 | ||||||
Issued in reinvestment of distributions | 37,170 | 775,728 | 71,536 | 1,329,846 | ||||||
Redeemed | (115,473 | ) | (2,493,779 | ) | (158,256 | ) | (3,624,503 | ) | ||
(33,880 | ) | (762,189 | ) | 19,464 | 6,547 | |||||
R5 Class/Shares Authorized | 50,000,000 | 50,000,000 | ||||||||
Sold | 7,615 | 171,120 | 30,933 | 631,619 | ||||||
Issued in reinvestment of distributions | 2,962 | 64,578 | 9,057 | 174,914 | ||||||
Redeemed | (17,638 | ) | (389,956 | ) | (43,479 | ) | (916,893 | ) | ||
(7,061 | ) | (154,258 | ) | (3,489 | ) | (110,360 | ) | |||
Net increase (decrease) | (2,533,214 | ) | $ | (57,232,339 | ) | (3,900,549 | ) | $ | (96,661,652 | ) |
18
6. Fair Value Measurements
The fund’s investments valuation process is based on several considerations and may use multiple inputs to determine the fair value of the investments held by the fund. In conformity with accounting principles generally accepted in the United States of America, the inputs used to determine a valuation are classified into three broad levels.
• | Level 1 valuation inputs consist of unadjusted quoted prices in an active market for identical investments. |
• | Level 2 valuation inputs consist of direct or indirect observable market data (including quoted prices for comparable investments, evaluations of subsequent market events, interest rates, prepayment speeds, credit risk, etc.). These inputs also consist of quoted prices for identical investments initially expressed in local currencies that are adjusted through translation into U.S. dollars. |
• | Level 3 valuation inputs consist of unobservable data (including a fund’s own assumptions). |
The level classification is based on the lowest level input that is significant to the fair valuation measurement. The valuation inputs are not necessarily an indication of the risks associated with investing in these securities or other financial instruments.
The following is a summary of the level classifications as of period end. The Schedule of Investments provides additional information on the fund’s portfolio holdings.
Level 1 | Level 2 | Level 3 | ||||||
Assets | ||||||||
Investment Securities | ||||||||
Common Stocks | $ | 467,589,481 | — | — | ||||
Temporary Cash Investments | 6,589 | $ | 11,989,118 | — | ||||
$ | 467,596,070 | $ | 11,989,118 | — | ||||
Other Financial Instruments | ||||||||
Futures Contracts | $ | 171,369 | — | — |
7. Derivative Instruments
Equity Price Risk — The fund is subject to equity price risk in the normal course of pursuing its investment objectives. A fund may enter into futures contracts based on an equity index in order to manage its exposure to changes in market conditions. A fund may purchase futures contracts to gain exposure to increases in market value or sell futures contracts to protect against a decline in market value. Upon entering into a futures contract, a fund is required to deposit either cash or securities in an amount equal to a certain percentage of the contract value (initial margin). Subsequent payments (variation margin) are made or received daily, in cash, by a fund. The variation margin is equal to the daily change in the contract value and is recorded as unrealized gains and losses. A fund recognizes a realized gain or loss when the contract is closed or expires. Net realized and unrealized gains or losses occurring during the holding period of futures contracts are a component of net realized gain (loss) on futures contract transactions and change in net unrealized appreciation (depreciation) on futures contracts, respectively. One of the risks of entering into futures contracts is the possibility that the change in value of the contract may not correlate with the changes in value of the underlying securities. The fund's average notional exposure to equity price risk derivative instruments held during the period was $2,102 futures contracts purchased.
The value of equity price risk derivative instruments as of December 31, 2019, is disclosed on the Statement of Assets and Liabilities as an asset of $17,485 in receivable for variation margin on futures contracts*. For the six months ended December 31, 2019, the effect of equity price risk derivative instruments on the Statement of Operations was $763,926 in net realized gain (loss) on futures contract transactions and $171,369 in change in net unrealized appreciation (depreciation) on futures contracts.
* Included in the unrealized appreciation (depreciation) on futures contracts as reported in the Schedule of Investments.
19
8. Risk Factors
The fund’s investment process may result in high portfolio turnover, which could mean high transaction costs, affecting both performance and capital gains tax liabilities to investors.
9. Federal Tax Information
The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
As of period end, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $ | 325,518,797 | |
Gross tax appreciation of investments | $ | 157,266,973 | |
Gross tax depreciation of investments | (3,200,582 | ) | |
Net tax appreciation (depreciation) of investments | $ | 154,066,391 |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales.
20
Financial Highlights |
For a Share Outstanding Throughout the Years Ended June 30 (except as noted) | |||||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||||
Income From Investment Operations: | Distributions From: | Ratio to Average Net Assets of: | |||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Operating Expenses (before expense waiver) | Net Investment Income (Loss) | Net Investment Income (Loss) (before expense waiver) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
Investor Class | |||||||||||||||||
2019(3) | $21.76 | —(4) | 1.97 | 1.97 | — | (1.94) | (1.94) | $21.79 | 9.06% | 1.01%(5) | 1.02%(5) | (0.02)%(5) | (0.03)%(5) | 60% | $238,911 | ||
2019 | $24.05 | 0.05 | 1.08 | 1.13 | (0.04) | (3.38) | (3.42) | $21.76 | 6.61% | 1.02% | 1.02% | 0.24% | 0.24% | 105% | $250,920 | ||
2018 | $22.10 | 0.05 | 3.97 | 4.02 | (0.03) | (2.04) | (2.07) | $24.05 | 18.80% | 1.02% | 1.02% | 0.21% | 0.21% | 97% | $362,865 | ||
2017 | $18.36 | 0.11 | 3.74 | 3.85 | (0.11) | — | (0.11) | $22.10 | 20.88% | 1.02% | 1.02% | 0.51% | 0.51% | 124% | $434,242 | ||
2016 | $19.15 | 0.12 | (0.53) | (0.41) | (0.12) | (0.26) | (0.38) | $18.36 | (2.08)% | 1.03% | 1.03% | 0.64% | 0.64% | 113% | $370,901 | ||
2015 | $18.82 | 0.14 | 1.09 | 1.23 | (0.11) | (0.79) | (0.90) | $19.15 | 6.59% | 1.02% | 1.02% | 0.75% | 0.75% | 108% | $502,389 | ||
I Class | |||||||||||||||||
2019(3) | $21.84 | 0.02 | 1.97 | 1.99 | — | (1.94) | (1.94) | $21.89 | 9.17% | 0.81%(5) | 0.82%(5) | 0.18%(5) | 0.17%(5) | 60% | $175,947 | ||
2019 | $24.13 | 0.10 | 1.08 | 1.18 | (0.09) | (3.38) | (3.47) | $21.84 | 6.82% | 0.82% | 0.82% | 0.44% | 0.44% | 105% | $213,805 | ||
2018 | $22.16 | 0.10 | 3.99 | 4.09 | (0.08) | (2.04) | (2.12) | $24.13 | 19.01% | 0.82% | 0.82% | 0.41% | 0.41% | 97% | $231,261 | ||
2017 | $18.41 | 0.15 | 3.75 | 3.90 | (0.15) | — | (0.15) | $22.16 | 21.18% | 0.82% | 0.82% | 0.71% | 0.71% | 124% | $238,480 | ||
2016 | $19.20 | 0.16 | (0.53) | (0.37) | (0.16) | (0.26) | (0.42) | $18.41 | (1.95)% | 0.83% | 0.83% | 0.84% | 0.84% | 113% | $318,576 | ||
2015 | $18.87 | 0.20 | 1.06 | 1.26 | (0.14) | (0.79) | (0.93) | $19.20 | 6.84% | 0.82% | 0.82% | 0.95% | 0.95% | 108% | $372,011 |
For a Share Outstanding Throughout the Years Ended June 30 (except as noted) | |||||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||||
Income From Investment Operations: | Distributions From: | Ratio to Average Net Assets of: | |||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Operating Expenses (before expense waiver) | Net Investment Income (Loss) | Net Investment Income (Loss) (before expense waiver) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
Y Class | |||||||||||||||||
2019(3) | $21.85 | 0.03 | 1.97 | 2.00 | — | (1.94) | (1.94) | $21.91 | 9.21% | 0.76%(5) | 0.77%(5) | 0.23%(5) | 0.22%(5) | 60% | $358 | ||
2019 | $24.14 | 0.12 | 1.07 | 1.19 | (0.10) | (3.38) | (3.48) | $21.85 | 6.87% | 0.77% | 0.77% | 0.49% | 0.49% | 105% | $579 | ||
2018 | $22.17 | 0.11 | 3.99 | 4.10 | (0.09) | (2.04) | (2.13) | $24.14 | 19.06% | 0.77% | 0.77% | 0.46% | 0.46% | 97% | $6 | ||
2017(6) | $21.62 | 0.04 | 0.63 | 0.67 | (0.12) | — | (0.12) | $22.17 | 3.07% | 0.77%(5) | 0.77%(5) | 0.74%(5) | 0.74%(5) | 124%(7) | $5 | ||
A Class | |||||||||||||||||
2019(3) | $21.53 | (0.03) | 1.95 | 1.92 | — | (1.94) | (1.94) | $21.51 | 8.97% | 1.26%(5) | 1.27%(5) | (0.27)%(5) | (0.28)%(5) | 60% | $31,057 | ||
2019 | $23.87 | —(4) | 1.06 | 1.06 | (0.02) | (3.38) | (3.40) | $21.53 | 6.32% | 1.27% | 1.27% | (0.01)% | (0.01)% | 105% | $31,650 | ||
2018 | $21.97 | (0.01) | 3.95 | 3.94 | — | (2.04) | (2.04) | $23.87 | 18.48% | 1.27% | 1.27% | (0.04)% | (0.04)% | 97% | $37,832 | ||
2017 | $18.28 | 0.05 | 3.72 | 3.77 | (0.08) | — | (0.08) | $21.97 | 20.61% | 1.27% | 1.27% | 0.26% | 0.26% | 124% | $58,469 | ||
2016 | $19.09 | 0.07 | (0.52) | (0.45) | (0.10) | (0.26) | (0.36) | $18.28 | (2.35)% | 1.28% | 1.28% | 0.39% | 0.39% | 113% | $133,042 | ||
2015 | $18.77 | 0.09 | 1.08 | 1.17 | (0.06) | (0.79) | (0.85) | $19.09 | 6.35% | 1.27% | 1.27% | 0.50% | 0.50% | 108% | $173,300 | ||
C Class | |||||||||||||||||
2019(3) | $19.98 | (0.11) | 1.81 | 1.70 | — | (1.94) | (1.94) | $19.74 | 8.51% | 2.01%(5) | 2.02%(5) | (1.02)%(5) | (1.03)%(5) | 60% | $23,119 | ||
2019 | $22.55 | (0.16) | 0.97 | 0.81 | — | (3.38) | (3.38) | $19.98 | 5.57% | 2.02% | 2.02% | (0.76)% | (0.76)% | 105% | $26,088 | ||
2018 | $21.00 | (0.17) | 3.76 | 3.59 | — | (2.04) | (2.04) | $22.55 | 17.57% | 2.02% | 2.02% | (0.79)% | (0.79)% | 97% | $40,253 | ||
2017 | $17.54 | (0.09) | 3.55 | 3.46 | — | — | — | $21.00 | 19.73% | 2.02% | 2.02% | (0.49)% | (0.49)% | 124% | $44,456 | ||
2016 | $18.41 | (0.06) | (0.51) | (0.57) | (0.04) | (0.26) | (0.30) | $17.54 | (3.11)% | 2.03% | 2.03% | (0.36)% | (0.36)% | 113% | $45,050 | ||
2015 | $18.21 | (0.05) | 1.04 | 0.99 | — | (0.79) | (0.79) | $18.41 | 5.56% | 2.02% | 2.02% | (0.25)% | (0.25)% | 108% | $50,355 |
For a Share Outstanding Throughout the Years Ended June 30 (except as noted) | |||||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||||
Income From Investment Operations: | Distributions From: | Ratio to Average Net Assets of: | |||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Operating Expenses (before expense waiver) | Net Investment Income (Loss) | Net Investment Income (Loss) (before expense waiver) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
R Class | |||||||||||||||||
2019(3) | $21.06 | (0.06) | 1.91 | 1.85 | — | (1.94) | (1.94) | $20.97 | 8.84% | 1.51%(5) | 1.52%(5) | (0.52)%(5) | (0.53)%(5) | 60% | $9,193 | ||
2019 | $23.47 | (0.06) | 1.03 | 0.97 | — | (3.38) | (3.38) | $21.06 | 6.03% | 1.52% | 1.52% | (0.26)% | (0.26)% | 105% | $9,948 | ||
2018 | $21.68 | (0.06) | 3.89 | 3.83 | — | (2.04) | (2.04) | $23.47 | 18.20% | 1.52% | 1.52% | (0.29)% | (0.29)% | 97% | $10,626 | ||
2017 | $18.06 | —(4) | 3.67 | 3.67 | (0.05) | — | (0.05) | $21.68 | 20.33% | 1.52% | 1.52% | 0.01% | 0.01% | 124% | $11,184 | ||
2016 | $18.89 | 0.03 | (0.52) | (0.49) | (0.08) | (0.26) | (0.34) | $18.06 | (2.60)% | 1.53% | 1.53% | 0.14% | 0.14% | 113% | $12,778 | ||
2015 | $18.60 | 0.04 | 1.06 | 1.10 | (0.02) | (0.79) | (0.81) | $18.89 | 6.06% | 1.52% | 1.52% | 0.25% | 0.25% | 108% | $14,449 | ||
R5 Class | |||||||||||||||||
2019(3) | $21.85 | 0.02 | 1.98 | 2.00 | — | (1.94) | (1.94) | $21.91 | 9.21% | 0.81%(5) | 0.82%(5) | 0.18%(5) | 0.17%(5) | 60% | $805 | ||
2019 | $24.14 | 0.10 | 1.08 | 1.18 | (0.09) | (3.38) | (3.47) | $21.85 | 6.82% | 0.82% | 0.82% | 0.44% | 0.44% | 105% | $957 | ||
2018 | $22.17 | 0.10 | 3.99 | 4.09 | (0.08) | (2.04) | (2.12) | $24.14 | 19.00% | 0.82% | 0.82% | 0.41% | 0.41% | 97% | $1,142 | ||
2017(6) | $21.62 | 0.03 | 0.63 | 0.66 | (0.11) | — | (0.11) | $22.17 | 3.06% | 0.82%(5) | 0.82%(5) | 0.69%(5) | 0.69%(5) | 124%(7) | $5 |
Notes to Financial Highlights |
(1) | Computed using average shares outstanding throughout the period. |
(2) | Total returns are calculated based on the net asset value of the last business day and do not reflect applicable sales charges, if any. Total returns for periods less than one year are not annualized. |
(3) | Six months ended December 31, 2019 (unaudited). |
(4) | Per-share amount was less than $0.005. |
(5) | Annualized. |
(6) | April 10, 2017 (commencement of sale) through June 30, 2017. |
(7) | Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended June 30, 2017. |
See Notes to Financial Statements.
Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain retirement accounts are subject to federal income tax withholding, unless you elect not to have withholding apply*. Tax will be withheld on the total amount withdrawn even though you may be receiving amounts that are not subject to withholding, such as nondeductible contributions. In such case, excess amounts of withholding could occur. You may adjust your withholding election so that a greater or lesser amount will be withheld.
If you don’t want us to withhold on this amount, you must notify us to not withhold the federal income tax. You may notify us in writing or in certain situations by telephone or through other electronic means. For systematic withdrawals, your withholding election will remain in effect until revoked or changed by filing a new election. You have the right to revoke your election at any time and change your withholding percentage for future distributions.
Remember, even if you elect not to have income tax withheld, you are liable for paying income tax on the taxable portion of your withdrawal. If you elect not to have income tax withheld or you don’t have enough income tax withheld, you may be responsible for payment of estimated tax. You may incur penalties under the estimated tax rules if your withholding and estimated tax payments are not sufficient. You can reduce or defer the income tax on a distribution by directly or indirectly rolling such distribution over to another IRA or eligible plan. You should consult your tax advisor for additional information.
State tax will be withheld if, at the time of your distribution, your address is within one of the mandatory withholding states and you have federal income tax withheld (or as otherwise required by state law). State taxes will be withheld from your distribution in accordance with the respective state rules.
*Some 403(b), 457 and qualified retirement plan distributions may be subject to 20% mandatory withholding, as they are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
Descriptions of the principles and policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund are available without charge, upon request, by calling 1-800-345-2021 or visiting American Century Investments’ website at americancentury.com/proxy. A description of the policies is also available on the Securities and Exchange Commission’s website at sec.gov. Information regarding how the investment advisor voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on americancentury.com/proxy. It is also available at sec.gov.
Quarterly Portfolio Disclosure
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-Q or as an exhibit to its reports on Form N-PORT. The fund’s Forms N-Q and Form N-PORT reports are available on the SEC’s website at sec.gov. The fund also makes its complete schedule of portfolio holdings for the most recent quarter of its fiscal year available on its website at americancentury.com and, upon request, by calling 1-800-345-2021.
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Notes |
26
Notes |
27
Notes |
28
Notes |
29
Notes |
30
Notes |
31
Notes |
32
Contact Us | americancentury.com | |
Automated Information Line | 1-800-345-8765 | |
Investor Services Representative | 1-800-345-2021 or 816-531-5575 | |
Investors Using Advisors | 1-800-378-9878 | |
Business, Not-For-Profit, Employer-Sponsored Retirement Plans | 1-800-345-3533 | |
Banks and Trust Companies, Broker-Dealers, Financial Professionals, Insurance Companies | 1-800-345-6488 | |
Telecommunications Relay Service for the Deaf | 711 | |
American Century Quantitative Equity Funds, Inc. | ||
Investment Advisor: American Century Investment Management, Inc. Kansas City, Missouri | ||
This report and the statements it contains are submitted for the general information of our shareholders. The report is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus. | ||
©2020 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-91454 2002 |
Semiannual Report | |
December 31, 2019 | |
Equity Growth Fund | |
Investor Class (BEQGX) | |
I Class (AMEIX) | |
A Class (BEQAX) | |
C Class (AEYCX) | |
R Class (AEYRX) | |
R5 Class (AEYGX) |
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the fund’s shareholder reports like this one will no longer be sent by mail, unless you specifically request paper copies of the reports from the fund or from your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the fund or your financial intermediary electronically by calling or sending an email request to your appropriate contacts as listed on the back cover of this report.
You may elect to receive all future reports in paper free of charge. You can inform the fund or your financial intermediary that you wish to continue receiving paper copies of your shareholder reports by calling or sending an email request to your appropriate contacts as listed on the back cover of this report. Your election to receive reports in paper will apply to all funds held with the fund complex/your financial intermediary.
Table of Contents |
Any opinions expressed in this report reflect those of the author as of the date of the report, and do not necessarily represent the opinions of American Century Investments® or any other person in the American Century Investments organization. Any such opinions are subject to change at any time based upon market or other conditions and American Century Investments disclaims any responsibility to update such opinions. These opinions may not be relied upon as investment advice and, because investment decisions made by American Century Investments funds are based on numerous factors, may not be relied upon as an indication of trading intent on behalf of any American Century Investments fund. Security examples are used for representational purposes only and are not intended as recommendations to purchase or sell securities. Performance information for comparative indices and securities is provided to American Century Investments by third party vendors. To the best of American Century Investments’ knowledge, such information is accurate at the time of printing.
President’s Letter |
Jonathan Thomas
Dear Investor:
Thank you for reviewing this semiannual report for the period ended December 31, 2019. It provides a market overview (below), followed by a schedule of fund investments and other financial information. For additional commentary and information on fund performance, plus other investment insights, please visit our website, americancentury.com.
All Asset Classes Advanced
From higher-quality government bonds to higher-risk stocks and commodities, all major U.S. and global asset classes posted gains for the six-month period. U.S. stocks, as measured by the S&P 500 Index, advanced almost 11% for the period, outpacing the nearly 9% return for global stocks (MSCI ACWI). Income-oriented assets, including U.S. and global bonds and dividend-paying stocks, generally posted more-modest gains.
A key policy pivot from the Federal Reserve (Fed) helped set the stage for the rally. After abruptly ending its three-year rate-hike campaign in early 2019, the Fed cut rates in July. Ongoing concerns about global economic risks, including trade policy uncertainty, prompted this first Fed easing move in 10 years. And with global risks still looming, the Fed cut rates again in September and October before pausing. Similarly, the European Central Bank cut a key deposit rate and relaunched quantitative easing in a move to spark growth. These efforts helped push global yields lower, which aided performance among interest rate-sensitive assets.
Accommodative central bank policy and a lower interest rate backdrop also aided performance in equity markets. Additionally, modestly improving economic and earnings data calmed investors’ earlier worries and nudged stock returns higher. In December, a series of upbeat data helped stocks end the period on a high note. U.K. Prime Minister Boris Johnson and his Conservative Party won a decisive election victory, which resolved some lingering Brexit uncertainty. On the trade front, the U.S. House of Representatives approved the U.S.-Mexico-Canada Agreement, and the U.S. and China reached a phase 1 deal, further fueling investor optimism.
Looking ahead, we expect volatility to remain a factor as investors react to global growth trends, ongoing U.S.-China trade negotiations, central bank policy and geopolitical forces. We believe this scenario underscores the importance of using professionally managed portfolios in pursuit of investment goals. We appreciate your continued trust and confidence in us.
Sincerely,
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
2
Fund Characteristics |
DECEMBER 31, 2019 | |
Top Ten Holdings | % of net assets |
Apple, Inc. | 5.7% |
Microsoft Corp. | 4.2% |
Amazon.com, Inc. | 3.3% |
Alphabet, Inc., Class A | 3.2% |
Facebook, Inc., Class A | 2.6% |
JPMorgan Chase & Co. | 1.8% |
Broadcom, Inc. | 1.5% |
Bank of America Corp. | 1.2% |
Visa, Inc., Class A | 1.2% |
Biogen, Inc. | 1.2% |
Top Five Industries | % of net assets |
Software | 8.2% |
Interactive Media and Services | 5.8% |
Technology Hardware, Storage and Peripherals | 5.7% |
Banks | 5.1% |
Internet and Direct Marketing Retail | 5.0% |
Types of Investments in Portfolio | % of net assets |
Common Stocks | 96.3% |
Temporary Cash Investments | 3.6% |
Other Assets and Liabilities | 0.1% |
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Shareholder Fee Example |
Fund shareholders may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption/exchange fees; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in your fund and to compare these costs with the ongoing cost of investing in other mutual funds.
The example is based on an investment of $1,000 made at the beginning of the period and held for the entire period from July 1, 2019 to December 31, 2019.
Actual Expenses
The table provides information about actual account values and actual expenses for each class. You may use the information, together with the amount you invested, to estimate the expenses that you paid over the period. First, identify the share class you own. Then simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
If you hold Investor Class shares of any American Century Investments fund, or I Class shares of the American Century Diversified Bond Fund, in an American Century Investments account (i.e., not a financial intermediary or retirement plan account), American Century Investments may charge you a $12.50 semiannual account maintenance fee if the value of those shares is less than $10,000. We will redeem shares automatically in one of your accounts to pay the $12.50 fee. In determining your total eligible investment amount, we will include your investments in all personal accounts (including American Century Investments Brokerage accounts) registered under your Social Security number. Personal accounts include individual accounts, joint accounts, UGMA/UTMA accounts, personal trusts, Coverdell Education Savings Accounts and IRAs (including traditional, Roth, Rollover, SEP-, SARSEP- and SIMPLE-IRAs), and certain other retirement accounts. If you have only business, business retirement, employer-sponsored or American Century Investments Brokerage accounts, you are currently not subject to this fee. If you are subject to the Account Maintenance Fee, your account value could be reduced by the fee amount.
Hypothetical Example for Comparison Purposes
The table also provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio of each class of your fund and an assumed rate of return of 5% per year before expenses, which is not the actual return of a fund’s share class. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) or redemption/exchange fees. Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
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Beginning Account Value 7/1/19 | Ending Account Value 12/31/19 | Expenses Paid During Period(1) 7/1/19 - 12/31/19 | Annualized Expense Ratio(1) | |
Actual | ||||
Investor Class | $1,000 | $1,085.20 | $3.51 | 0.67% |
I Class | $1,000 | $1,086.30 | $2.46 | 0.47% |
A Class | $1,000 | $1,083.50 | $4.82 | 0.92% |
C Class | $1,000 | $1,079.20 | $8.73 | 1.67% |
R Class | $1,000 | $1,082.00 | $6.12 | 1.17% |
R5 Class | $1,000 | $1,086.20 | $2.46 | 0.47% |
Hypothetical | ||||
Investor Class | $1,000 | $1,021.77 | $3.40 | 0.67% |
I Class | $1,000 | $1,022.77 | $2.39 | 0.47% |
A Class | $1,000 | $1,020.51 | $4.67 | 0.92% |
C Class | $1,000 | $1,016.74 | $8.47 | 1.67% |
R Class | $1,000 | $1,019.26 | $5.94 | 1.17% |
R5 Class | $1,000 | $1,022.77 | $2.39 | 0.47% |
(1) | Expenses are equal to the class's annualized expense ratio listed in the table above, multiplied by the average account value over the period, multiplied by 184, the number of days in the most recent fiscal half-year, divided by 366, to reflect the one-half year period. Annualized expense ratio reflects actual expenses, including any applicable fee waivers or expense reimbursements and excluding any acquired fund fees and expenses. |
5
Schedule of Investments |
DECEMBER 31, 2019 (UNAUDITED)
Shares | Value | |||
COMMON STOCKS — 96.3% | ||||
Aerospace and Defense — 1.5% | ||||
HEICO Corp. | 75,060 | $ | 8,568,099 | |
Hexcel Corp. | 76,525 | 5,610,048 | ||
Lockheed Martin Corp. | 28,727 | 11,185,719 | ||
Mercury Systems, Inc.(1) | 20,709 | 1,431,199 | ||
Northrop Grumman Corp. | 12,483 | 4,293,778 | ||
Raytheon Co. | 28,565 | 6,276,873 | ||
37,365,716 | ||||
Air Freight and Logistics — 0.3% | ||||
CH Robinson Worldwide, Inc. | 83,772 | 6,550,970 | ||
Airlines — 0.2% | ||||
Delta Air Lines, Inc. | 67,451 | 3,944,534 | ||
Auto Components — 0.8% | ||||
BorgWarner, Inc. | 266,959 | 11,580,681 | ||
Gentex Corp. | 341,473 | 9,895,888 | ||
21,476,569 | ||||
Banks — 5.1% | ||||
Bank of America Corp. | 893,504 | 31,469,211 | ||
Comerica, Inc. | 149,752 | 10,744,706 | ||
JPMorgan Chase & Co. | 332,267 | 46,318,020 | ||
M&T Bank Corp. | 55,264 | 9,381,064 | ||
Signature Bank | 50,375 | 6,881,729 | ||
SVB Financial Group(1) | 25,656 | 6,440,682 | ||
Wells Fargo & Co. | 361,498 | 19,448,592 | ||
130,684,004 | ||||
Beverages — 1.4% | ||||
Coca-Cola Co. (The) | 188,559 | 10,436,741 | ||
Monster Beverage Corp.(1) | 227,472 | 14,455,845 | ||
PepsiCo, Inc. | 78,970 | 10,792,830 | ||
35,685,416 | ||||
Biotechnology — 3.0% | ||||
AbbVie, Inc. | 96,850 | 8,575,099 | ||
Alexion Pharmaceuticals, Inc.(1) | 87,118 | 9,421,812 | ||
Amgen, Inc. | 52,117 | 12,563,845 | ||
Biogen, Inc.(1) | 100,869 | 29,930,858 | ||
Gilead Sciences, Inc. | 43,569 | 2,831,114 | ||
Incyte Corp.(1) | 159,731 | 13,947,711 | ||
77,270,439 | ||||
Building Products — 1.6% | ||||
Builders FirstSource, Inc.(1) | 318,624 | 8,096,236 | ||
Fortune Brands Home & Security, Inc. | 152,867 | 9,988,330 | ||
Johnson Controls International plc | 143,937 | 5,859,675 |
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Shares | Value | |||
Masco Corp. | 373,140 | $ | 17,906,988 | |
41,851,229 | ||||
Capital Markets — 1.5% | ||||
Artisan Partners Asset Management, Inc., Class A | 200,494 | 6,479,966 | ||
FactSet Research Systems, Inc. | 27,766 | 7,449,618 | ||
Moody's Corp. | 50,096 | 11,893,291 | ||
MSCI, Inc. | 44,078 | 11,380,058 | ||
37,202,933 | ||||
Chemicals — 1.1% | ||||
CF Industries Holdings, Inc. | 37,415 | 1,786,192 | ||
Ecolab, Inc. | 60,504 | 11,676,667 | ||
NewMarket Corp. | 18,994 | 9,240,961 | ||
Valvoline, Inc. | 266,021 | 5,695,510 | ||
28,399,330 | ||||
Commercial Services and Supplies — 1.6% | ||||
Republic Services, Inc. | 124,537 | 11,162,251 | ||
Tetra Tech, Inc. | 93,353 | 8,043,294 | ||
UniFirst Corp. | 17,307 | 3,495,668 | ||
Waste Management, Inc. | 156,685 | 17,855,823 | ||
40,557,036 | ||||
Communications Equipment — 1.1% | ||||
Cisco Systems, Inc. | 292,815 | 14,043,407 | ||
Juniper Networks, Inc. | 161,625 | 3,980,824 | ||
Motorola Solutions, Inc. | 63,928 | 10,301,358 | ||
28,325,589 | ||||
Construction and Engineering — 0.3% | ||||
MasTec, Inc.(1) | 137,458 | 8,819,305 | ||
Consumer Finance — 2.3% | ||||
American Express Co. | 89,658 | 11,161,525 | ||
Discover Financial Services | 264,799 | 22,460,251 | ||
Synchrony Financial | 666,595 | 24,004,086 | ||
57,625,862 | ||||
Diversified Financial Services — 0.9% | ||||
Berkshire Hathaway, Inc., Class B(1) | 106,032 | 24,016,248 | ||
Diversified Telecommunication Services — 1.9% | ||||
AT&T, Inc. | 410,912 | 16,058,441 | ||
CenturyLink, Inc. | 550,420 | 7,271,048 | ||
Verizon Communications, Inc. | 424,455 | 26,061,537 | ||
49,391,026 | ||||
Electric Utilities — 0.6% | ||||
IDACORP, Inc. | 66,229 | 7,073,257 | ||
NextEra Energy, Inc. | 35,534 | 8,604,914 | ||
15,678,171 | ||||
Electrical Equipment — 0.3% | ||||
Acuity Brands, Inc. | 50,165 | 6,922,770 | ||
Electronic Equipment, Instruments and Components — 0.9% | ||||
CDW Corp. | 80,285 | 11,467,909 |
7
Shares | Value | |||
Keysight Technologies, Inc.(1) | 123,395 | $ | 12,664,029 | |
24,131,938 | ||||
Entertainment — 2.7% | ||||
Activision Blizzard, Inc. | 412,911 | 24,535,172 | ||
Electronic Arts, Inc.(1) | 261,368 | 28,099,674 | ||
Take-Two Interactive Software, Inc.(1) | 94,857 | 11,613,342 | ||
Walt Disney Co. (The) | 38,971 | 5,636,376 | ||
69,884,564 | ||||
Equity Real Estate Investment Trusts (REITs) — 1.8% | ||||
Alexander & Baldwin, Inc. | 53,914 | 1,130,037 | ||
American Tower Corp. | 31,606 | 7,263,691 | ||
GEO Group, Inc. (The) | 84,526 | 1,403,977 | ||
Life Storage, Inc. | 89,038 | 9,641,035 | ||
PS Business Parks, Inc. | 27,460 | 4,527,330 | ||
Public Storage | 43,372 | 9,236,501 | ||
SBA Communications Corp. | 28,512 | 6,871,107 | ||
Weingarten Realty Investors | 220,252 | 6,880,673 | ||
46,954,351 | ||||
Food and Staples Retailing — 0.7% | ||||
Casey's General Stores, Inc. | 35,305 | 5,613,142 | ||
Walgreens Boots Alliance, Inc. | 195,126 | 11,504,629 | ||
17,117,771 | ||||
Food Products — 3.1% | ||||
Campbell Soup Co. | 541,173 | 26,744,770 | ||
General Mills, Inc. | 462,153 | 24,752,915 | ||
Hershey Co. (The) | 143,280 | 21,059,294 | ||
Kellogg Co. | 107,635 | 7,444,036 | ||
80,001,015 | ||||
Health Care Equipment and Supplies — 3.7% | ||||
Abbott Laboratories | 200,835 | 17,444,528 | ||
Baxter International, Inc. | 204,569 | 17,106,060 | ||
Danaher Corp. | 29,548 | 4,535,027 | ||
DENTSPLY SIRONA, Inc. | 139,533 | 7,896,172 | ||
Edwards Lifesciences Corp.(1) | 60,546 | 14,124,776 | ||
Hologic, Inc.(1) | 301,867 | 15,760,476 | ||
Integer Holdings Corp.(1) | 42,761 | 3,439,267 | ||
Stryker Corp. | 68,625 | 14,407,133 | ||
94,713,439 | ||||
Health Care Providers and Services — 1.3% | ||||
Amedisys, Inc.(1) | 69,747 | 11,642,169 | ||
Chemed Corp. | 7,515 | 3,301,039 | ||
McKesson Corp. | 47,410 | 6,557,751 | ||
UnitedHealth Group, Inc. | 37,952 | 11,157,129 | ||
32,658,088 | ||||
Health Care Technology — 0.7% | ||||
Cerner Corp. | 115,229 | 8,456,656 | ||
Veeva Systems, Inc., Class A(1) | 66,785 | 9,393,978 | ||
17,850,634 |
8
Shares | Value | |||
Hotels, Restaurants and Leisure — 1.3% | ||||
Darden Restaurants, Inc. | 64,955 | $ | 7,080,744 | |
Starbucks Corp. | 286,704 | 25,207,016 | ||
32,287,760 | ||||
Household Durables — 0.3% | ||||
PulteGroup, Inc. | 211,662 | 8,212,486 | ||
Household Products — 2.0% | ||||
Colgate-Palmolive Co. | 265,245 | 18,259,466 | ||
Kimberly-Clark Corp. | 107,033 | 14,722,389 | ||
Procter & Gamble Co. (The) | 134,943 | 16,854,381 | ||
49,836,236 | ||||
Industrial Conglomerates — 0.3% | ||||
Carlisle Cos., Inc. | 51,949 | 8,407,426 | ||
Insurance — 2.6% | ||||
American Financial Group, Inc. | 70,111 | 7,687,671 | ||
Arch Capital Group Ltd.(1) | 226,579 | 9,717,974 | ||
Marsh & McLennan Cos., Inc. | 84,612 | 9,426,623 | ||
Mercury General Corp. | 169,147 | 8,242,533 | ||
Progressive Corp. (The) | 342,285 | 24,778,011 | ||
RenaissanceRe Holdings Ltd. | 35,259 | 6,911,469 | ||
66,764,281 | ||||
Interactive Media and Services — 5.8% | ||||
Alphabet, Inc., Class A(1) | 61,798 | 82,771,623 | ||
Facebook, Inc., Class A(1) | 319,002 | 65,475,161 | ||
148,246,784 | ||||
Internet and Direct Marketing Retail — 5.0% | ||||
Amazon.com, Inc.(1) | 45,794 | 84,619,985 | ||
Booking Holdings, Inc.(1) | 5,655 | 11,613,843 | ||
eBay, Inc. | 605,632 | 21,869,372 | ||
Expedia Group, Inc. | 76,965 | 8,322,995 | ||
126,426,195 | ||||
IT Services — 4.6% | ||||
Accenture plc, Class A | 44,069 | 9,279,610 | ||
Akamai Technologies, Inc.(1) | 90,607 | 7,826,633 | ||
Amdocs Ltd. | 94,812 | 6,844,478 | ||
EVERTEC, Inc. | 119,151 | 4,055,900 | ||
International Business Machines Corp. | 124,719 | 16,717,335 | ||
Mastercard, Inc., Class A | 62,075 | 18,534,974 | ||
PayPal Holdings, Inc.(1) | 112,352 | 12,153,116 | ||
Visa, Inc., Class A | 162,998 | 30,627,324 | ||
Western Union Co. (The) | 376,199 | 10,074,609 | ||
116,113,979 | ||||
Life Sciences Tools and Services — 2.0% | ||||
Agilent Technologies, Inc. | 291,022 | 24,827,087 | ||
Bio-Rad Laboratories, Inc., Class A(1) | 28,549 | 10,563,987 | ||
Illumina, Inc.(1) | 18,829 | 6,246,332 | ||
Thermo Fisher Scientific, Inc. | 25,275 | 8,211,089 | ||
49,848,495 |
9
Shares | Value | |||
Machinery — 2.2% | ||||
Allison Transmission Holdings, Inc. | 438,253 | $ | 21,176,385 | |
Cummins, Inc. | 115,367 | 20,646,078 | ||
Snap-on, Inc. | 89,605 | 15,179,087 | ||
57,001,550 | ||||
Media — 0.6% | ||||
Discovery, Inc., Class C(1) | 221,932 | 6,766,707 | ||
Sirius XM Holdings, Inc. | 1,008,580 | 7,211,347 | ||
13,978,054 | ||||
Metals and Mining — 0.7% | ||||
Reliance Steel & Aluminum Co. | 52,461 | 6,282,730 | ||
Royal Gold, Inc. | 49,400 | 6,039,150 | ||
Steel Dynamics, Inc. | 127,607 | 4,343,742 | ||
16,665,622 | ||||
Multiline Retail — 0.8% | ||||
Target Corp. | 153,522 | 19,683,056 | ||
Oil, Gas and Consumable Fuels — 2.0% | ||||
Chevron Corp. | 178,195 | 21,474,279 | ||
Exxon Mobil Corp. | 149,593 | 10,438,600 | ||
HollyFrontier Corp. | 377,991 | 19,167,924 | ||
51,080,803 | ||||
Personal Products — 0.4% | ||||
Estee Lauder Cos., Inc. (The), Class A | 44,994 | 9,293,061 | ||
Pharmaceuticals — 3.3% | ||||
Bristol-Myers Squibb Co. | 261,882 | 16,810,205 | ||
Jazz Pharmaceuticals plc(1) | 47,815 | 7,137,823 | ||
Johnson & Johnson | 128,909 | 18,803,956 | ||
Merck & Co., Inc. | 288,205 | 26,212,245 | ||
Pfizer, Inc. | 57,294 | 2,244,779 | ||
Zoetis, Inc. | 103,871 | 13,747,327 | ||
84,956,335 | ||||
Professional Services — 0.5% | ||||
IHS Markit Ltd.(1) | 66,591 | 5,017,632 | ||
Verisk Analytics, Inc. | 57,533 | 8,591,978 | ||
13,609,610 | ||||
Semiconductors and Semiconductor Equipment — 4.6% | ||||
Applied Materials, Inc. | 347,445 | 21,208,043 | ||
Broadcom, Inc. | 123,673 | 39,083,141 | ||
Intel Corp. | 226,685 | 13,567,097 | ||
KLA Corp. | 72,634 | 12,941,200 | ||
Lam Research Corp. | 38,751 | 11,330,792 | ||
Micron Technology, Inc.(1) | 187,585 | 10,088,321 | ||
Texas Instruments, Inc. | 70,643 | 9,062,791 | ||
117,281,385 | ||||
Software — 8.2% | ||||
Adobe, Inc.(1) | 82,190 | 27,107,084 | ||
Cadence Design Systems, Inc.(1) | 202,790 | 14,065,514 | ||
Intuit, Inc. | 63,932 | 16,745,709 |
10
Shares | Value | |||
Microsoft Corp. | 680,950 | $ | 107,385,815 | |
Oracle Corp. (New York) | 410,982 | 21,773,826 | ||
salesforce.com, Inc.(1) | 90,980 | 14,796,987 | ||
VMware, Inc., Class A(1) | 44,082 | 6,691,207 | ||
208,566,142 | ||||
Specialty Retail — 2.0% | ||||
AutoZone, Inc.(1) | 22,042 | 26,258,855 | ||
Home Depot, Inc. (The) | 37,071 | 8,095,565 | ||
Murphy USA, Inc.(1) | 74,660 | 8,735,220 | ||
O'Reilly Automotive, Inc.(1) | 20,286 | 8,890,542 | ||
51,980,182 | ||||
Technology Hardware, Storage and Peripherals — 5.7% | ||||
Apple, Inc. | 495,747 | 145,576,107 | ||
Textiles, Apparel and Luxury Goods — 0.3% | ||||
NIKE, Inc., Class B | 71,938 | 7,288,039 | ||
Thrifts and Mortgage Finance — 0.4% | ||||
Essent Group Ltd. | 176,236 | 9,162,510 | ||
Trading Companies and Distributors — 0.3% | ||||
W.W. Grainger, Inc. | 21,370 | 7,234,172 | ||
TOTAL COMMON STOCKS (Cost $1,770,132,030) | 2,454,579,217 | |||
TEMPORARY CASH INVESTMENTS — 3.6% | ||||
Repurchase Agreement, BMO Capital Markets Corp., (collateralized by various U.S. Treasury obligations, 2.75% - 3.75%, 9/15/21 - 11/15/43, valued at $77,134,404), in a joint trading account at 1.35%, dated 12/31/19, due 1/2/20 (Delivery value $75,513,357) | 75,507,694 | |||
Repurchase Agreement, Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 1.625%, 12/15/22, valued at $17,145,355), at 0.65%, dated 12/31/19, due 1/2/20 (Delivery value $16,806,607) | 16,806,000 | |||
State Street Institutional U.S. Government Money Market Fund, Premier Class | 44,306 | 44,306 | ||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $92,358,000) | 92,358,000 | |||
TOTAL INVESTMENT SECURITIES — 99.9% (Cost $1,862,490,030) | 2,546,937,217 | |||
OTHER ASSETS AND LIABILITIES — 0.1% | 2,330,781 | |||
TOTAL NET ASSETS — 100.0% | $ | 2,549,267,998 |
FUTURES CONTRACTS PURCHASED | |||||||||
Reference Entity | Contracts | Expiration Date | Notional Amount | Underlying Contract Value | Unrealized Appreciation (Depreciation) | ||||
S&P 500 E-Mini | 543 | March 2020 | $27,150 | $ | 87,724,365 | $ | 1,632,209 |
NOTES TO SCHEDULE OF INVESTMENTS |
(1) | Non-income producing. |
See Notes to Financial Statements.
11
Statement of Assets and Liabilities |
DECEMBER 31, 2019 (UNAUDITED) | |||
Assets | |||
Investment securities, at value (cost of $1,862,490,030) | $ | 2,546,937,217 | |
Deposits with broker for futures contracts | 3,420,900 | ||
Receivable for capital shares sold | 5,009,721 | ||
Receivable for variation margin on futures contracts | 209,055 | ||
Dividends and interest receivable | 1,058,251 | ||
2,556,635,144 | |||
Liabilities | |||
Payable for capital shares redeemed | 5,975,153 | ||
Accrued management fees | 1,361,132 | ||
Distribution and service fees payable | 30,861 | ||
7,367,146 | |||
Net Assets | $ | 2,549,267,998 | |
Net Assets Consist of: | |||
Capital (par value and paid-in surplus) | $ | 1,747,203,774 | |
Distributable earnings | 802,064,224 | ||
$ | 2,549,267,998 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | ||||
Investor Class, $0.01 Par Value | $2,023,333,510 | 64,543,869 | $31.35 | |||
I Class, $0.01 Par Value | $420,496,513 | 13,400,010 | $31.38 | |||
A Class, $0.01 Par Value | $73,721,138 | 2,355,178 | $31.30* | |||
C Class, $0.01 Par Value | $6,779,628 | 219,299 | $30.91 | |||
R Class, $0.01 Par Value | $22,605,716 | 721,632 | $31.33 | |||
R5 Class, $0.01 Par Value | $2,331,493 | 74,284 | $31.39 |
*Maximum offering price $33.21 (net asset value divided by 0.9425).
See Notes to Financial Statements.
12
Statement of Operations |
FOR THE SIX MONTHS ENDED DECEMBER 31, 2019 (UNAUDITED) | |||
Investment Income (Loss) | |||
Income: | |||
Dividends | $ | 21,764,564 | |
Interest | 766,769 | ||
22,531,333 | |||
Expenses: | |||
Management fees | 8,600,348 | ||
Distribution and service fees: | |||
A Class | 95,143 | ||
C Class | 34,629 | ||
R Class | 54,140 | ||
Directors' fees and expenses | 105,090 | ||
Other expenses | 7,182 | ||
8,896,532 | |||
Net investment income (loss) | 13,634,801 | ||
Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investment transactions | 239,506,985 | ||
Futures contract transactions | 6,877,440 | ||
246,384,425 | |||
Change in net unrealized appreciation (depreciation) on: | |||
Investments | (45,538,529 | ) | |
Futures contracts | 1,204,005 | ||
(44,334,524 | ) | ||
Net realized and unrealized gain (loss) | 202,049,901 | ||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 215,684,702 |
See Notes to Financial Statements.
13
Statement of Changes in Net Assets |
SIX MONTHS ENDED DECEMBER 31, 2019 (UNAUDITED) AND YEAR ENDED JUNE 30, 2019 | ||||||
Increase (Decrease) in Net Assets | December 31, 2019 | June 30, 2019 | ||||
Operations | ||||||
Net investment income (loss) | $ | 13,634,801 | $ | 36,511,467 | ||
Net realized gain (loss) | 246,384,425 | 188,944,034 | ||||
Change in net unrealized appreciation (depreciation) | (44,334,524 | ) | (38,705,025 | ) | ||
Net increase (decrease) in net assets resulting from operations | 215,684,702 | 186,750,476 | ||||
Distributions to Shareholders | ||||||
From earnings: | ||||||
Investor Class | (183,224,747 | ) | (265,255,033 | ) | ||
I Class | (38,112,520 | ) | (46,413,839 | ) | ||
A Class | (6,583,566 | ) | (8,778,046 | ) | ||
C Class | (590,974 | ) | (838,751 | ) | ||
R Class | (1,978,349 | ) | (2,368,400 | ) | ||
R5 Class | (204,497 | ) | (213,507 | ) | ||
Decrease in net assets from distributions | (230,694,653 | ) | (323,867,576 | ) | ||
Capital Share Transactions | ||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | (283,134,097 | ) | (93,176,001 | ) | ||
Net increase (decrease) in net assets | (298,144,048 | ) | (230,293,101 | ) | ||
Net Assets | ||||||
Beginning of period | 2,847,412,046 | 3,077,705,147 | ||||
End of period | $ | 2,549,267,998 | $ | 2,847,412,046 |
See Notes to Financial Statements.
14
Notes to Financial Statements |
DECEMBER 31, 2019 (UNAUDITED)
1. Organization
American Century Quantitative Equity Funds, Inc. (the corporation) is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company and is organized as a Maryland corporation. Equity Growth Fund (the fund) is one fund in a series issued by the corporation. The fund’s investment objective is to seek long-term capital growth by investing in common stocks.
The fund offers the Investor Class, I Class, A Class, C Class, R Class and R5 Class. The A Class may incur an initial sales charge. The A Class and C Class may be subject to a contingent deferred sales charge.
2. Significant Accounting Policies
The following is a summary of significant accounting policies consistently followed by the fund in preparation of its financial statements. The fund is an investment company and follows accounting and reporting guidance in accordance with accounting principles generally accepted in the United States of America. This may require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from these estimates. Management evaluated the impact of events or transactions occurring through the date the financial statements were issued that would merit recognition or disclosure.
Investment Valuations — The fund determines the fair value of its investments and computes its net asset value per share at the close of regular trading (usually 4 p.m. Eastern time) on the New York Stock Exchange (NYSE) on each day the NYSE is open. The Board of Directors has adopted valuation policies and procedures to guide the investment advisor in the fund’s investment valuation process and to provide methodologies for the oversight of the fund’s pricing function.
Equity securities that are listed or traded on a domestic securities exchange are valued at the last reported sales price or at the official closing price as provided by the exchange. Equity securities traded on foreign securities exchanges are generally valued at the closing price of such securities on the exchange where primarily traded or at the close of the NYSE, if that is earlier. If no last sales price is reported, or if local convention or regulation so provides, the mean of the latest bid and asked prices may be used. Securities traded over-the-counter are valued at the mean of the latest bid and asked prices, the last sales price, or the official closing price.
Open-end management investment companies are valued at the reported net asset value per share. Repurchase agreements are valued at cost, which approximates fair value. Exchange-traded futures contracts are valued at the settlement price as provided by the appropriate exchange.
If the fund determines that the market price for an investment is not readily available or the valuation methods mentioned above do not reflect an investment’s fair value, such investment is valued as determined in good faith by the Board of Directors or its delegate, in accordance with policies and procedures adopted by the Board of Directors. In its determination of fair value, the fund may review several factors including, but not limited to, market information regarding the specific investment or comparable investments and correlation with other investment types, futures indices or general market indicators. Circumstances that may cause the fund to use these procedures to value an investment include, but are not limited to: an investment has been declared in default or is distressed; trading in a security has been suspended during the trading day or a security is not actively trading on its principal exchange; prices received from a regular pricing source are deemed unreliable; or there is a foreign market holiday and no trading occurred.
15
The fund monitors for significant events occurring after the close of an investment’s primary exchange but before the fund’s net asset value per share is determined. Significant events may include, but are not limited to: corporate announcements and transactions; governmental action and political unrest that could impact a specific investment or an investment sector; or armed conflicts, natural disasters and similar events that could affect investments in a specific country or region. The fund also monitors for significant fluctuations between domestic and foreign markets, as evidenced by the U.S. market or such other indicators that the Board of Directors, or its delegate, deems appropriate. The fund may apply a model-derived factor to the closing price of equity securities traded on foreign securities exchanges. The factor is based on observable market data as provided by an independent pricing service.
Security Transactions — Security transactions are accounted for as of the trade date. Net realized gains and losses are determined on the identified cost basis, which is also used for federal income tax purposes.
Investment Income — Dividend income less foreign taxes withheld, if any, is recorded as of the ex-dividend date. Distributions received on securities that represent a return of capital or long-term capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The fund may estimate the components of distributions received that may be considered nontaxable distributions or long-term capital gain distributions for income tax purposes. Interest income is recorded on the accrual basis and includes accretion of discounts and amortization of premiums.
Repurchase Agreements — The fund may enter into repurchase agreements with institutions that American Century Investment Management, Inc. (ACIM) (the investment advisor) has determined are creditworthy pursuant to criteria adopted by the Board of Directors. The fund requires that the collateral, represented by securities, received in a repurchase transaction be transferred to the custodian in a manner sufficient to enable the fund to obtain those securities in the event of a default under the repurchase agreement. ACIM monitors, on a daily basis, the securities transferred to ensure the value, including accrued interest, of the securities under each repurchase agreement is equal to or greater than amounts owed to the fund under each repurchase agreement.
Joint Trading Account — Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the fund, along with certain other funds in the American Century Investments family of funds, may transfer uninvested cash balances into a joint trading account. These balances are invested in one or more repurchase agreements that are collateralized by U.S. Treasury or Agency obligations.
Segregated Assets — In accordance with the 1940 Act, the fund segregates assets on its books and records to cover certain types of investment securities and other financial instruments. ACIM monitors, on a daily basis, the securities segregated to ensure the fund designates a sufficient amount of liquid assets, marked-to-market daily. The fund may also receive assets or be required to pledge assets at the custodian bank or with a broker for collateral requirements.
Income Tax Status — It is the fund’s policy to distribute substantially all net investment income and net realized gains to shareholders and to otherwise qualify as a regulated investment company under provisions of the Internal Revenue Code. Accordingly, no provision has been made for income taxes. The fund files U.S. federal, state, local and non-U.S. tax returns as applicable. The fund's tax returns are subject to examination by the relevant taxing authority until expiration of the applicable statute of limitations, which is generally three years from the date of filing but can be longer in certain jurisdictions. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination and for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Multiple Class — All shares of the fund represent an equal pro rata interest in the net assets of the class to which such shares belong, and have identical voting, dividend, liquidation and other rights and the same terms and conditions, except for class specific expenses and exclusive rights to vote on matters affecting only individual classes. Income, non-class specific expenses, and realized and unrealized capital gains and losses of the fund are allocated to each class of shares based on their relative net assets.
Distributions to Shareholders — Distributions from net investment income, if any, are generally declared and paid quarterly. Distributions from net realized gains, if any, are generally declared and paid annually. The fund may elect to treat a portion of its payment to a redeeming shareholder, which represents the pro rata share of undistributed net investment income and net realized gains, as a distribution for federal income tax purposes (tax equalization).
16
Indemnifications — Under the corporation’s organizational documents, its officers and directors are indemnified against certain liabilities arising out of the performance of their duties to the fund. In addition, in the normal course of business, the fund enters into contracts that provide general indemnifications. The maximum exposure under these arrangements is unknown as this would involve future claims that may be made against a fund. The risk of material loss from such claims is considered by management to be remote.
3. Fees and Transactions with Related Parties
Certain officers and directors of the corporation are also officers and/or directors of American Century Companies, Inc. (ACC). The corporation’s investment advisor, ACIM, the corporation's distributor, American Century Investment Services, Inc. (ACIS), and the corporation’s transfer agent, American Century Services, LLC, are wholly owned, directly or indirectly, by ACC. Various funds issued by American Century Asset Allocation Portfolios, Inc. own, in aggregate, 8% of the shares of the fund.
Management Fees — The corporation has entered into a management agreement with ACIM, under which ACIM provides the fund with investment advisory and management services in exchange for a single, unified management fee (the fee) per class. The agreement provides that all expenses of managing and operating the fund, except distribution and service fees, brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), and extraordinary expenses, will be paid by ACIM. The fee is computed and accrued daily based on each class's daily net assets and paid monthly in arrears. The difference in the fee among the classes is a result of their separate arrangements for non-Rule 12b-1 shareholder services. It is not the result of any difference in advisory or custodial fees or other expenses related to the management of the fund's assets, which do not vary by class. The fee consists of (1) an Investment Category Fee based on the daily net assets of the fund and certain other accounts managed by the investment advisor that are in the same broad investment category as the fund and (2) a Complex Fee based on the assets of all the funds in the American Century Investments family of funds.
The Investment Category Fee range, the Complex Fee range and the effective annual management fee for each class for the period ended December 31, 2019 are as follows:
Investment Category Fee Range | Complex Fee Range | Effective Annual Management Fee | |
Investor Class | 0.3380% to 0.5200% | 0.2500% to 0.3100% | 0.66% |
I Class | 0.0500% to 0.1100% | 0.46% | |
A Class | 0.2500% to 0.3100% | 0.66% | |
C Class | 0.2500% to 0.3100% | 0.66% | |
R Class | 0.2500% to 0.3100% | 0.66% | |
R5 Class | 0.0500% to 0.1100% | 0.46% |
Distribution and Service Fees — The Board of Directors has adopted a separate Master Distribution and Individual Shareholder Services Plan for each of the A Class, C Class and R Class (collectively the plans), pursuant to Rule 12b-1 of the 1940 Act. The plans provide that the A Class will pay ACIS an annual distribution and service fee of 0.25%. The plans provide that the C Class will pay ACIS an annual distribution and service fee of 1.00%, of which 0.25% is paid for individual shareholder services and 0.75% is paid for distribution services. The plans provide that the R Class will pay ACIS an annual distribution and service fee of 0.50%. The fees are computed and accrued daily based on each class’s daily net assets and paid monthly in arrears. The fees are used to pay financial intermediaries for distribution and individual shareholder services. Fees incurred under the plans during the period ended December 31, 2019 are detailed in the Statement of Operations.
Directors' Fees and Expenses — The Board of Directors is responsible for overseeing the investment advisor’s management and operations of the fund. The directors receive detailed information about the fund and its investment advisor regularly throughout the year, and meet at least quarterly with management of the investment advisor to review reports about fund operations. The fund’s officers do not receive compensation from the fund.
17
Interfund Transactions — The fund may enter into security transactions with other American Century Investments funds and other client accounts of the investment advisor, in accordance with the 1940 Act rules and procedures adopted by the Board of Directors. The rules and procedures require, among other things, that these transactions be effected at the independent current market price of the security. During the period, the interfund purchases and sales were $33,919,967 and $42,818,620, respectively. The effect of interfund transactions on the Statement of Operations was $1,362,061 in net realized gain (loss) on investment transactions.
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the period ended December 31, 2019 were $1,363,498,174 and $1,902,174,946, respectively.
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended December 31, 2019 | Year ended June 30, 2019 | |||||||||
Shares | Amount | Shares | Amount | |||||||
Investor Class/Shares Authorized | 680,000,000 | 680,000,000 | ||||||||
Sold | 1,214,684 | $ | 39,413,903 | 5,221,355 | $ | 166,954,910 | ||||
Issued in reinvestment of distributions | 5,709,778 | 178,914,971 | 9,151,538 | 260,741,084 | ||||||
Redeemed | (14,532,519 | ) | (475,079,236 | ) | (18,886,278 | ) | (581,731,249 | ) | ||
(7,608,057 | ) | (256,750,362 | ) | (4,513,385 | ) | (154,035,255 | ) | |||
I Class/Shares Authorized | 120,000,000 | 120,000,000 | ||||||||
Sold | 644,316 | 20,687,271 | 4,112,238 | 136,248,140 | ||||||
Issued in reinvestment of distributions | 1,197,393 | 37,556,980 | 1,610,269 | 46,027,392 | ||||||
Redeemed | (2,480,602 | ) | (79,133,508 | ) | (3,449,137 | ) | (111,171,558 | ) | ||
(638,893 | ) | (20,889,257 | ) | 2,273,370 | 71,103,974 | |||||
A Class/Shares Authorized | 45,000,000 | 45,000,000 | ||||||||
Sold | 115,884 | 3,704,402 | 452,590 | 14,223,425 | ||||||
Issued in reinvestment of distributions | 193,453 | 6,052,435 | 275,610 | 7,829,884 | ||||||
Redeemed | (513,176 | ) | (16,475,737 | ) | (922,614 | ) | (29,222,799 | ) | ||
(203,839 | ) | (6,718,900 | ) | (194,414 | ) | (7,169,490 | ) | |||
C Class/Shares Authorized | 20,000,000 | 20,000,000 | ||||||||
Sold | 8,356 | 264,325 | 24,278 | 771,743 | ||||||
Issued in reinvestment of distributions | 17,610 | 543,959 | 28,679 | 800,283 | ||||||
Redeemed | (42,123 | ) | (1,340,155 | ) | (156,576 | ) | (5,055,558 | ) | ||
(16,157 | ) | (531,871 | ) | (103,619 | ) | (3,483,532 | ) | |||
R Class/Shares Authorized | 20,000,000 | 20,000,000 | ||||||||
Sold | 75,900 | 2,452,110 | 158,901 | 5,028,068 | ||||||
Issued in reinvestment of distributions | 63,205 | 1,978,349 | 83,539 | 2,368,370 | ||||||
Redeemed | (92,842 | ) | (2,962,742 | ) | (244,147 | ) | (7,563,285 | ) | ||
46,263 | 1,467,717 | (1,707 | ) | (166,847 | ) | |||||
R5 Class/Shares Authorized | 50,000,000 | 50,000,000 | ||||||||
Sold | 6,009 | 193,071 | 41,111 | 1,351,155 | ||||||
Issued in reinvestment of distributions | 6,518 | 204,497 | 7,472 | 213,507 | ||||||
Redeemed | (3,384 | ) | (108,992 | ) | (30,051 | ) | (989,513 | ) | ||
9,143 | 288,576 | 18,532 | 575,149 | |||||||
Net increase (decrease) | (8,411,540 | ) | $ | (283,134,097 | ) | (2,521,223 | ) | $ | (93,176,001 | ) |
18
6. Fair Value Measurements
The fund’s investments valuation process is based on several considerations and may use multiple inputs to determine the fair value of the investments held by the fund. In conformity with accounting principles generally accepted in the United States of America, the inputs used to determine a valuation are classified into three broad levels.
• | Level 1 valuation inputs consist of unadjusted quoted prices in an active market for identical investments. |
• | Level 2 valuation inputs consist of direct or indirect observable market data (including quoted prices for comparable investments, evaluations of subsequent market events, interest rates, prepayment speeds, credit risk, etc.). These inputs also consist of quoted prices for identical investments initially expressed in local currencies that are adjusted through translation into U.S. dollars. |
• | Level 3 valuation inputs consist of unobservable data (including a fund’s own assumptions). |
The level classification is based on the lowest level input that is significant to the fair valuation measurement. The valuation inputs are not necessarily an indication of the risks associated with investing in these securities or other financial instruments.
The following is a summary of the level classifications as of period end. The Schedule of Investments provides additional information on the fund’s portfolio holdings.
Level 1 | Level 2 | Level 3 | ||||||
Assets | ||||||||
Investment Securities | ||||||||
Common Stocks | $ | 2,454,579,217 | — | — | ||||
Temporary Cash Investments | 44,306 | $ | 92,313,694 | — | ||||
$ | 2,454,623,523 | $ | 92,313,694 | — | ||||
Other Financial Instruments | ||||||||
Futures Contracts | $ | 1,632,209 | — | — |
7. Derivative Instruments
Equity Price Risk — The fund is subject to equity price risk in the normal course of pursuing its investment objectives. A fund may enter into futures contracts based on an equity index in order to manage its exposure to changes in market conditions. A fund may purchase futures contracts to gain exposure to increases in market value or sell futures contracts to protect against a decline in market value. Upon entering into a futures contract, a fund is required to deposit either cash or securities in an amount equal to a certain percentage of the contract value (initial margin). Subsequent payments (variation margin) are made or received daily, in cash, by a fund. The variation margin is equal to the daily change in the contract value and is recorded as unrealized gains and losses. A fund recognizes a realized gain or loss when the contract is closed or expires. Net realized and unrealized gains or losses occurring during the holding period of futures contracts are a component of net realized gain (loss) on futures contract transactions and change in net unrealized appreciation (depreciation) on futures contracts, respectively. One of the risks of entering into futures contracts is the possibility that the change in value of the contract may not correlate with the changes in value of the underlying securities. The fund's average notional exposure to equity price risk derivative instruments held during the period was $33,975 futures contracts purchased.
The value of equity price risk derivative instruments as of December 31, 2019, is disclosed on the Statement of Assets and Liabilities as an asset of $209,055 in receivable for variation margin on futures contracts*. For the six months ended December 31, 2019, the effect of equity price risk derivative instruments on the Statement of Operations was $6,877,440 in net realized gain (loss) on futures contract transactions and $1,204,005 in change in net unrealized appreciation (depreciation) on futures contracts.
* Included in the unrealized appreciation (depreciation) on futures contracts as reported in the Schedule of Investments.
19
8. Risk Factors
The fund’s investment process may result in high portfolio turnover, which could mean high transaction costs, affecting both performance and capital gains tax liabilities to investors.
9. Federal Tax Information
The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
As of period end, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $ | 1,865,141,678 | |
Gross tax appreciation of investments | $ | 691,913,715 | |
Gross tax depreciation of investments | (10,118,176 | ) | |
Net tax appreciation (depreciation) of investments | $ | 681,795,539 |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales.
As of June 30, 2019, the fund had post-October capital loss deferrals of $(44,618,509), which represent certain qualified losses that the fund has elected to treat as having been incurred in the following fiscal year for federal income tax purposes.
20
Financial Highlights |
For a Share Outstanding Throughout the Years Ended June 30 (except as noted) | |||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||
Income From Investment Operations: | Distributions From: | Ratio to Average Net Assets of: | |||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Net Investment Income (Loss) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
Investor Class | |||||||||||||||
2019(3) | $31.73 | 0.16 | 2.53 | 2.69 | (0.16) | (2.91) | (3.07) | $31.35 | 8.52% | 0.67%(4) | 0.98%(4) | 52% | $2,023,334 | ||
2019 | $33.36 | 0.39 | 1.56 | 1.95 | (0.37) | (3.21) | (3.58) | $31.73 | 7.21% | 0.67% | 1.23% | 80% | $2,289,532 | ||
2018 | $31.79 | 0.43 | 4.40 | 4.83 | (0.40) | (2.86) | (3.26) | $33.36 | 15.62% | 0.66% | 1.30% | 84% | $2,557,773 | ||
2017 | $27.44 | 0.40 | 4.50 | 4.90 | (0.40) | (0.15) | (0.55) | $31.79 | 17.99% | 0.67% | 1.34% | 85% | $2,542,710 | ||
2016 | $30.56 | 0.41 | (1.29) | (0.88) | (0.40) | (1.84) | (2.24) | $27.44 | (2.78)% | 0.67% | 1.45% | 91% | $2,488,951 | ||
2015 | $32.75 | 0.46 | 1.37 | 1.83 | (0.43) | (3.59) | (4.02) | $30.56 | 5.93% | 0.67% | 1.45% | 86% | $2,886,976 | ||
I Class | |||||||||||||||
2019(3) | $31.76 | 0.19 | 2.54 | 2.73 | (0.20) | (2.91) | (3.11) | $31.38 | 8.63% | 0.47%(4) | 1.18%(4) | 52% | $420,497 | ||
2019 | $33.39 | 0.45 | 1.56 | 2.01 | (0.43) | (3.21) | (3.64) | $31.76 | 7.41% | 0.47% | 1.43% | 80% | $445,933 | ||
2018 | $31.82 | 0.50 | 4.40 | 4.90 | (0.47) | (2.86) | (3.33) | $33.39 | 15.87% | 0.46% | 1.50% | 84% | $392,859 | ||
2017 | $27.46 | 0.46 | 4.51 | 4.97 | (0.46) | (0.15) | (0.61) | $31.82 | 18.21% | 0.47% | 1.54% | 85% | $471,260 | ||
2016 | $30.58 | 0.46 | (1.29) | (0.83) | (0.45) | (1.84) | (2.29) | $27.46 | (2.58)% | 0.47% | 1.65% | 91% | $453,858 | ||
2015 | $32.77 | 0.53 | 1.37 | 1.90 | (0.50) | (3.59) | (4.09) | $30.58 | 6.13% | 0.47% | 1.65% | 86% | $497,333 | ||
A Class | |||||||||||||||
2019(3) | $31.69 | 0.12 | 2.52 | 2.64 | (0.12) | (2.91) | (3.03) | $31.30 | 8.35% | 0.92%(4) | 0.73%(4) | 52% | $73,721 | ||
2019 | $33.32 | 0.31 | 1.57 | 1.88 | (0.30) | (3.21) | (3.51) | $31.69 | 6.96% | 0.92% | 0.98% | 80% | $81,086 | ||
2018 | $31.76 | 0.35 | 4.39 | 4.74 | (0.32) | (2.86) | (3.18) | $33.32 | 15.32% | 0.91% | 1.05% | 84% | $91,750 | ||
2017 | $27.41 | 0.32 | 4.50 | 4.82 | (0.32) | (0.15) | (0.47) | $31.76 | 17.71% | 0.92% | 1.09% | 85% | $116,980 | ||
2016 | $30.53 | 0.33 | (1.29) | (0.96) | (0.32) | (1.84) | (2.16) | $27.41 | (3.03)% | 0.92% | 1.20% | 91% | $144,365 | ||
2015 | $32.72 | 0.38 | 1.37 | 1.75 | (0.35) | (3.59) | (3.94) | $30.53 | 5.67% | 0.92% | 1.20% | 86% | $195,262 |
For a Share Outstanding Throughout the Years Ended June 30 (except as noted) | |||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||
Income From Investment Operations: | Distributions From: | Ratio to Average Net Assets of: | |||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Net Investment Income (Loss) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
C Class | |||||||||||||||
2019(3) | $31.34 | —(5) | 2.48 | 2.48 | — | (2.91) | (2.91) | $30.91 | 7.92% | 1.67%(4) | (0.02)%(4) | 52% | $6,780 | ||
2019 | $33.00 | 0.07 | 1.55 | 1.62 | (0.07) | (3.21) | (3.28) | $31.34 | 6.17% | 1.67% | 0.23% | 80% | $7,378 | ||
2018 | $31.50 | 0.10 | 4.34 | 4.44 | (0.08) | (2.86) | (2.94) | $33.00 | 14.48% | 1.66% | 0.30% | 84% | $11,191 | ||
2017 | $27.19 | 0.10 | 4.46 | 4.56 | (0.10) | (0.15) | (0.25) | $31.50 | 16.78% | 1.67% | 0.34% | 85% | $11,777 | ||
2016 | $30.29 | 0.12 | (1.27) | (1.15) | (0.11) | (1.84) | (1.95) | $27.19 | (3.73)% | 1.67% | 0.45% | 91% | $12,542 | ||
2015 | $32.50 | 0.15 | 1.35 | 1.50 | (0.12) | (3.59) | (3.71) | $30.29 | 4.87% | 1.67% | 0.45% | 86% | $16,342 | ||
R Class | |||||||||||||||
2019(3) | $31.71 | 0.08 | 2.52 | 2.60 | (0.07) | (2.91) | (2.98) | $31.33 | 8.20% | 1.17%(4) | 0.48%(4) | 52% | $22,606 | ||
2019 | $33.34 | 0.23 | 1.57 | 1.80 | (0.22) | (3.21) | (3.43) | $31.71 | 6.69% | 1.17% | 0.73% | 80% | $21,413 | ||
2018 | $31.78 | 0.28 | 4.37 | 4.65 | (0.23) | (2.86) | (3.09) | $33.34 | 15.06% | 1.16% | 0.80% | 84% | $22,576 | ||
2017 | $27.43 | 0.25 | 4.50 | 4.75 | (0.25) | (0.15) | (0.40) | $31.78 | 17.37% | 1.17% | 0.84% | 85% | $31,953 | ||
2016 | $30.54 | 0.27 | (1.29) | (1.02) | (0.25) | (1.84) | (2.09) | $27.43 | (3.24)% | 1.17% | 0.95% | 91% | $28,535 | ||
2015 | $32.74 | 0.32 | 1.35 | 1.67 | (0.28) | (3.59) | (3.87) | $30.54 | 5.38% | 1.17% | 0.95% | 86% | $30,271 | ||
R5 Class | |||||||||||||||
2019(3) | $31.77 | 0.19 | 2.54 | 2.73 | (0.20) | (2.91) | (3.11) | $31.39 | 8.62% | 0.47%(4) | 1.18%(4) | 52% | $2,331 | ||
2019 | $33.39 | 0.45 | 1.57 | 2.02 | (0.43) | (3.21) | (3.64) | $31.77 | 7.44% | 0.47% | 1.43% | 80% | $2,069 | ||
2018 | $31.82 | 0.43 | 4.47 | 4.90 | (0.47) | (2.86) | (3.33) | $33.39 | 15.83% | 0.46% | 1.50% | 84% | $1,556 | ||
2017(6) | $31.12 | 0.11 | 0.69 | 0.80 | (0.10) | — | (0.10) | $31.82 | 2.58% | 0.47%(4) | 1.60%(4) | 85%(7) | $5 |
Notes to Financial Highlights |
(1) | Computed using average shares outstanding throughout the period. |
(2) | Total returns are calculated based on the net asset value of the last business day and do not reflect applicable sales charges, if any. Total returns for periods less than one year are not annualized. |
(3) | Six months ended December 31, 2019 (unaudited). |
(4) | Annualized. |
(5) | Per-share amount was less than $0.005. |
(6) | April 10, 2017 (commencement of sale) through June 30, 2017. |
(7) | Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended June 30, 2017. |
See Notes to Financial Statements.
Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain retirement accounts are subject to federal income tax withholding, unless you elect not to have withholding apply*. Tax will be withheld on the total amount withdrawn even though you may be receiving amounts that are not subject to withholding, such as nondeductible contributions. In such case, excess amounts of withholding could occur. You may adjust your withholding election so that a greater or lesser amount will be withheld.
If you don’t want us to withhold on this amount, you must notify us to not withhold the federal income tax. You may notify us in writing or in certain situations by telephone or through other electronic means. For systematic withdrawals, your withholding election will remain in effect until revoked or changed by filing a new election. You have the right to revoke your election at any time and change your withholding percentage for future distributions.
Remember, even if you elect not to have income tax withheld, you are liable for paying income tax on the taxable portion of your withdrawal. If you elect not to have income tax withheld or you don’t have enough income tax withheld, you may be responsible for payment of estimated tax. You may incur penalties under the estimated tax rules if your withholding and estimated tax payments are not sufficient. You can reduce or defer the income tax on a distribution by directly or indirectly rolling such distribution over to another IRA or eligible plan. You should consult your tax advisor for additional information.
State tax will be withheld if, at the time of your distribution, your address is within one of the mandatory withholding states and you have federal income tax withheld (or as otherwise required by state law). State taxes will be withheld from your distribution in accordance with the respective state rules.
*Some 403(b), 457 and qualified retirement plan distributions may be subject to 20% mandatory withholding, as they are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
Descriptions of the principles and policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund are available without charge, upon request, by calling 1-800-345-2021 or visiting American Century Investments’ website at americancentury.com/proxy. A description of the policies is also available on the Securities and Exchange Commission’s website at sec.gov. Information regarding how the investment advisor voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on americancentury.com/proxy. It is also available at sec.gov.
Quarterly Portfolio Disclosure
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-Q or as an exhibit to its reports on Form N-PORT. The fund’s Forms N-Q and Form N-PORT reports are available on the SEC’s website at sec.gov. The fund also makes its complete schedule of portfolio holdings for the most recent quarter of its fiscal year available on its website at americancentury.com and, upon request, by calling 1-800-345-2021.
24
Contact Us | americancentury.com | |
Automated Information Line | 1-800-345-8765 | |
Investor Services Representative | 1-800-345-2021 or 816-531-5575 | |
Investors Using Advisors | 1-800-378-9878 | |
Business, Not-For-Profit, Employer-Sponsored Retirement Plans | 1-800-345-3533 | |
Banks and Trust Companies, Broker-Dealers, Financial Professionals, Insurance Companies | 1-800-345-6488 | |
Telecommunications Relay Service for the Deaf | 711 | |
American Century Quantitative Equity Funds, Inc. | ||
Investment Advisor: American Century Investment Management, Inc. Kansas City, Missouri | ||
This report and the statements it contains are submitted for the general information of our shareholders. The report is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus. | ||
©2020 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-91455 2002 |
Semiannual Report | |
December 31, 2019 | |
Global Gold Fund | |
Investor Class (BGEIX) | |
I Class (AGGNX) | |
A Class (ACGGX) | |
C Class (AGYCX) | |
R Class (AGGWX) |
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the fund’s shareholder reports like this one will no longer be sent by mail, unless you specifically request paper copies of the reports from the fund or from your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the fund or your financial intermediary electronically by calling or sending an email request to your appropriate contacts as listed on the back cover of this report.
You may elect to receive all future reports in paper free of charge. You can inform the fund or your financial intermediary that you wish to continue receiving paper copies of your shareholder reports by calling or sending an email request to your appropriate contacts as listed on the back cover of this report. Your election to receive reports in paper will apply to all funds held with the fund complex/your financial intermediary.
Table of Contents |
Any opinions expressed in this report reflect those of the author as of the date of the report, and do not necessarily represent the opinions of American Century Investments® or any other person in the American Century Investments organization. Any such opinions are subject to change at any time based upon market or other conditions and American Century Investments disclaims any responsibility to update such opinions. These opinions may not be relied upon as investment advice and, because investment decisions made by American Century Investments funds are based on numerous factors, may not be relied upon as an indication of trading intent on behalf of any American Century Investments fund. Security examples are used for representational purposes only and are not intended as recommendations to purchase or sell securities. Performance information for comparative indices and securities is provided to American Century Investments by third party vendors. To the best of American Century Investments’ knowledge, such information is accurate at the time of printing.
President’s Letter |
Jonathan Thomas
Dear Investor:
Thank you for reviewing this semiannual report for the period ended December 31, 2019. It provides a market overview (below), followed by a schedule of fund investments and other financial information. For additional commentary and information on fund performance, plus other investment insights, please visit our website, americancentury.com.
All Asset Classes Advanced
From higher-quality government bonds to higher-risk stocks and commodities, all major U.S. and global asset classes posted gains for the six-month period. U.S. stocks, as measured by the S&P 500 Index, advanced almost 11% for the period, outpacing the nearly 9% return for global stocks (MSCI ACWI). Income-oriented assets, including U.S. and global bonds and dividend-paying stocks, generally posted more-modest gains.
A key policy pivot from the Federal Reserve (Fed) helped set the stage for the rally. After abruptly ending its three-year rate-hike campaign in early 2019, the Fed cut rates in July. Ongoing concerns about global economic risks, including trade policy uncertainty, prompted this first Fed easing move in 10 years. And with global risks still looming, the Fed cut rates again in September and October before pausing. Similarly, the European Central Bank cut a key deposit rate and relaunched quantitative easing in a move to spark growth. These efforts helped push global yields lower, which aided performance among interest rate-sensitive assets.
Accommodative central bank policy and a lower interest rate backdrop also aided performance in equity markets. Additionally, modestly improving economic and earnings data calmed investors’ earlier worries and nudged stock returns higher. In December, a series of upbeat data helped stocks end the period on a high note. U.K. Prime Minister Boris Johnson and his Conservative Party won a decisive election victory, which resolved some lingering Brexit uncertainty. On the trade front, the U.S. House of Representatives approved the U.S.-Mexico-Canada Agreement, and the U.S. and China reached a phase 1 deal, further fueling investor optimism.
Looking ahead, we expect volatility to remain a factor as investors react to global growth trends, ongoing U.S.-China trade negotiations, central bank policy and geopolitical forces. We believe this scenario underscores the importance of using professionally managed portfolios in pursuit of investment goals. We appreciate your continued trust and confidence in us.
Sincerely,
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
2
Fund Characteristics |
DECEMBER 31, 2019 | |
Top Ten Holdings | % of net assets |
Newmont Goldcorp Corp. | 11.4% |
Barrick Gold Corp. | 10.9% |
Franco-Nevada Corp. (New York) | 6.0% |
Royal Gold, Inc. | 5.0% |
AngloGold Ashanti Ltd.* | 4.8% |
Kirkland Lake Gold Ltd. | 4.7% |
Agnico Eagle Mines Ltd.* | 4.7% |
Newcrest Mining Ltd. | 4.2% |
Wheaton Precious Metals Corp. | 4.1% |
Kinross Gold Corp. (New York) | 3.6% |
*Includes shares traded on all exchanges. | |
Geographic Composition | % of net assets |
Canada | 53.8% |
United States | 16.9% |
Australia | 12.9% |
South Africa | 9.4% |
United Kingdom | 2.3% |
China | 0.8% |
Peru | 0.6% |
Exchange-Traded Funds | 2.4% |
Cash and Equivalents* | 0.9% |
*Includes temporary cash investments, temporary cash investments - securities lending collateral and other assets and liabilities. | |
Types of Investments in Portfolio | % of net assets |
Foreign Common Stocks | 79.8% |
Domestic Common Stocks | 16.9% |
Exchange-Traded Funds | 2.4% |
Total Equity Exposure | 99.1% |
Temporary Cash Investments | 0.8% |
Temporary Cash Investments - Securities Lending Collateral | 4.7% |
Other Assets and Liabilities | (4.6)% |
3
Shareholder Fee Example |
Fund shareholders may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption/exchange fees; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in your fund and to compare these costs with the ongoing cost of investing in other mutual funds.
The example is based on an investment of $1,000 made at the beginning of the period and held for the entire period from July 1, 2019 to December 31, 2019.
Actual Expenses
The table provides information about actual account values and actual expenses for each class. You may use the information, together with the amount you invested, to estimate the expenses that you paid over the period. First, identify the share class you own. Then simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
If you hold Investor Class shares of any American Century Investments fund, or I Class shares of the American Century Diversified Bond Fund, in an American Century Investments account (i.e., not a financial intermediary or retirement plan account), American Century Investments may charge you a $12.50 semiannual account maintenance fee if the value of those shares is less than $10,000. We will redeem shares automatically in one of your accounts to pay the $12.50 fee. In determining your total eligible investment amount, we will include your investments in all personal accounts (including American Century Investments Brokerage accounts) registered under your Social Security number. Personal accounts include individual accounts, joint accounts, UGMA/UTMA accounts, personal trusts, Coverdell Education Savings Accounts and IRAs (including traditional, Roth, Rollover, SEP-, SARSEP- and SIMPLE-IRAs), and certain other retirement accounts. If you have only business, business retirement, employer-sponsored or American Century Investments Brokerage accounts, you are currently not subject to this fee. If you are subject to the Account Maintenance Fee, your account value could be reduced by the fee amount.
Hypothetical Example for Comparison Purposes
The table also provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio of each class of your fund and an assumed rate of return of 5% per year before expenses, which is not the actual return of a fund’s share class. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) or redemption/exchange fees. Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
4
Beginning Account Value 7/1/19 | Ending Account Value 12/31/19 | Expenses Paid During Period(1) 7/1/19 - 12/31/19 | Annualized Expense Ratio(1) | |
Actual | ||||
Investor Class | $1,000 | $1,144.00 | $3.61 | 0.67% |
I Class | $1,000 | $1,145.50 | $2.53 | 0.47% |
A Class | $1,000 | $1,143.30 | $4.96 | 0.92% |
C Class | $1,000 | $1,138.30 | $8.98 | 1.67% |
R Class | $1,000 | $1,142.10 | $6.30 | 1.17% |
Hypothetical | ||||
Investor Class | $1,000 | $1,021.77 | $3.40 | 0.67% |
I Class | $1,000 | $1,022.77 | $2.39 | 0.47% |
A Class | $1,000 | $1,020.51 | $4.67 | 0.92% |
C Class | $1,000 | $1,016.74 | $8.47 | 1.67% |
R Class | $1,000 | $1,019.26 | $5.94 | 1.17% |
(1) | Expenses are equal to the class's annualized expense ratio listed in the table above, multiplied by the average account value over the period, multiplied by 184, the number of days in the most recent fiscal half-year, divided by 366, to reflect the one-half year period. Annualized expense ratio reflects actual expenses, including any applicable fee waivers or expense reimbursements and excluding any acquired fund fees and expenses. |
5
Schedule of Investments |
DECEMBER 31, 2019 (UNAUDITED)
Shares | Value | |||
COMMON STOCKS — 96.7% | ||||
Australia — 12.9% | ||||
Evolution Mining Ltd. | 4,426,100 | $ | 11,763,791 | |
Gold Road Resources Ltd.(1) | 5,909,090 | 5,539,391 | ||
Newcrest Mining Ltd. | 1,100,713 | 23,300,464 | ||
Northern Star Resources Ltd. | 1,840,300 | 14,558,111 | ||
Perseus Mining Ltd.(1) | 925,500 | 753,924 | ||
Regis Resources Ltd. | 3,006,500 | 9,123,900 | ||
Saracen Mineral Holdings Ltd.(1) | 2,376,134 | 5,516,815 | ||
Silver Lake Resources Ltd.(1) | 699,300 | 657,172 | ||
St. Barbara Ltd. | 314,900 | 600,744 | ||
71,814,312 | ||||
Canada — 53.8% | ||||
Agnico Eagle Mines Ltd. | 3,896 | 239,961 | ||
Agnico Eagle Mines Ltd. (New York) | 418,600 | 25,789,946 | ||
Alacer Gold Corp.(1) | 830,000 | 4,410,304 | ||
Alamos Gold, Inc., Class A (New York) | 1,514,800 | 9,119,096 | ||
B2Gold Corp. (New York)(2) | 3,473,500 | 13,928,735 | ||
Barrick Gold Corp. | 3,251,720 | 60,449,475 | ||
Centerra Gold, Inc.(1) | 1,101,100 | 8,759,280 | ||
Continental Gold, Inc.(1) | 270,400 | 1,114,042 | ||
Detour Gold Corp.(1) | 739,301 | 14,312,908 | ||
Eldorado Gold Corp.(1) | 295,600 | 2,374,270 | ||
Endeavour Mining Corp.(1) | 80,000 | 1,511,224 | ||
First Majestic Silver Corp. (New York)(1) | 876,100 | 10,740,986 | ||
Franco-Nevada Corp. (New York)(2) | 324,000 | 33,469,200 | ||
GoGold Resources, Inc.(1)(2) | 5,526,925 | 2,638,861 | ||
Guyana Goldfields, Inc.(1)(2) | 892,621 | 481,179 | ||
Kinross Gold Corp. (New York)(1) | 4,214,357 | 19,976,052 | ||
Kirkland Lake Gold Ltd.(2) | 592,000 | 26,095,322 | ||
OceanaGold Corp. | 1,859,653 | 3,651,854 | ||
Orezone Gold Corp.(1) | 5,400,000 | 2,744,600 | ||
Pan American Silver Corp. (NASDAQ) | 375,700 | 8,900,333 | ||
Pretium Resources, Inc.(1)(2) | 517,900 | 5,764,227 | ||
Roxgold, Inc.(1) | 1,618,400 | 1,296,166 | ||
Sandstorm Gold Ltd.(1) | 345,000 | 2,574,448 | ||
Sandstorm Gold Ltd. (New York)(1) | 291,900 | 2,174,655 | ||
SEMAFO, Inc.(1) | 825,000 | 1,715,375 | ||
Torex Gold Resources, Inc.(1) | 204,000 | 3,223,657 | ||
Wesdome Gold Mines Ltd.(1) | 78,800 | 617,147 | ||
Wheaton Precious Metals Corp. | 774,700 | 23,047,325 | ||
Yamana Gold, Inc. (New York) | 1,980,381 | 7,822,505 | ||
298,943,133 |
6
Shares | Value | |||
China — 0.8% | ||||
Zijin Mining Group Co. Ltd., H Shares | 8,832,000 | $ | 4,403,970 | |
Peru — 0.6% | ||||
Cia de Minas Buenaventura SAA ADR | 212,500 | 3,208,750 | ||
South Africa — 9.4% | ||||
Anglo American Platinum Ltd. | 32,800 | 3,062,766 | ||
AngloGold Ashanti Ltd. | 149,802 | 3,357,386 | ||
AngloGold Ashanti Ltd. ADR | 1,052,476 | 23,512,314 | ||
Gold Fields Ltd. | 498,310 | 3,348,465 | ||
Gold Fields Ltd. ADR | 1,106,100 | 7,300,260 | ||
Harmony Gold Mining Co. Ltd. ADR(1) | 635,000 | 2,305,050 | ||
Impala Platinum Holdings Ltd.(1)(2) | 800,400 | 8,211,562 | ||
Sibanye Gold Ltd. ADR(1)(2) | 129,100 | 1,281,963 | ||
52,379,766 | ||||
United Kingdom — 2.3% | ||||
Centamin plc | 6,184,000 | 10,367,654 | ||
Highland Gold Mining Ltd. | 200,300 | 519,366 | ||
Hochschild Mining plc | 820,200 | 1,990,743 | ||
12,877,763 | ||||
United States — 16.9% | ||||
Coeur Mining, Inc.(1) | 232,900 | 1,881,832 | ||
Hecla Mining Co. | 300,000 | 1,017,000 | ||
Newmont Goldcorp Corp. | 1,461,980 | 63,523,031 | ||
Royal Gold, Inc. | 225,821 | 27,606,617 | ||
94,028,480 | ||||
TOTAL COMMON STOCKS (Cost $328,461,386) | 537,656,174 | |||
EXCHANGE-TRADED FUNDS — 2.4% | ||||
VanEck Vectors Gold Miners ETF | 250,000 | 7,320,000 | ||
VanEck Vectors Junior Gold Miners ETF(2) | 140,500 | 5,937,530 | ||
TOTAL EXCHANGE-TRADED FUNDS (Cost $10,512,221) | 13,257,530 | |||
TEMPORARY CASH INVESTMENTS — 0.8% | ||||
Repurchase Agreement, BMO Capital Markets Corp., (collateralized by various U.S. Treasury obligations, 2.75% - 3.75%, 9/15/21 - 11/15/43, valued at $3,871,492), in a joint trading account at 1.35%, dated 12/31/19, due 1/2/20 (Delivery value $3,790,129) | 3,789,845 | |||
Repurchase Agreement, Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 1.625%, 12/15/22, valued at $861,274), at 0.65%, dated 12/31/19, due 1/2/20 (Delivery value $843,030) | 843,000 | |||
State Street Institutional U.S. Government Money Market Fund, Premier Class | 2,782 | 2,782 | ||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $4,635,627) | 4,635,627 | |||
TEMPORARY CASH INVESTMENTS - SECURITIES LENDING COLLATERAL(3) — 4.7% | ||||
State Street Navigator Securities Lending Government Money Market Portfolio (Cost $26,237,686) | 26,237,686 | 26,237,686 | ||
TOTAL INVESTMENT SECURITIES — 104.6% (Cost $369,846,920) | 581,787,017 | |||
OTHER ASSETS AND LIABILITIES — (4.6)% | (25,612,808 | ) | ||
TOTAL NET ASSETS — 100.0% | $ | 556,174,209 |
7
NOTES TO SCHEDULE OF INVESTMENTS | ||
ADR | - | American Depositary Receipt |
(1) | Non-income producing. |
(2) | Security, or a portion thereof, is on loan. At the period end, the aggregate value of securities on loan was $27,623,294. The amount of securities on loan indicated may not correspond with the securities on loan identified because securities with pending sales are in the process of recall from the brokers. |
(3) | Investment of cash collateral from securities on loan. At the period end, the aggregate market value of the collateral held by the fund was $28,485,867, which includes securities collateral of $2,248,181. |
See Notes to Financial Statements.
8
Statement of Assets and Liabilities |
DECEMBER 31, 2019 (UNAUDITED) | |||
Assets | |||
Investment securities, at value (cost of $343,609,234) — including $27,623,294 of securities on loan | $ | 555,549,331 | |
Investment made with cash collateral received for securities on loan, at value (cost of $26,237,686) | 26,237,686 | ||
Total investment securities, at value (cost of $369,846,920) | 581,787,017 | ||
Receivable for capital shares sold | 1,827,866 | ||
Dividends and interest receivable | 60,475 | ||
Securities lending receivable | 7,582 | ||
583,682,940 | |||
Liabilities | |||
Payable for collateral received for securities on loan | 26,237,686 | ||
Payable for capital shares redeemed | 977,979 | ||
Accrued management fees | 285,145 | ||
Distribution and service fees payable | 7,921 | ||
27,508,731 | |||
Net Assets | $ | 556,174,209 | |
Net Assets Consist of: | |||
Capital (par value and paid-in surplus) | $ | 489,207,709 | |
Distributable earnings | 66,966,500 | ||
$ | 556,174,209 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | ||||
Investor Class, $0.01 Par Value | $487,327,147 | 44,042,760 | $11.06 | |||
I Class, $0.01 Par Value | $46,122,443 | 4,121,852 | $11.19 | |||
A Class, $0.01 Par Value | $12,781,842 | 1,180,618 | $10.83* | |||
C Class, $0.01 Par Value | $3,726,818 | 362,007 | $10.29 | |||
R Class, $0.01 Par Value | $6,215,959 | 580,529 | $10.71 |
*Maximum offering price $11.49 (net asset value divided by 0.9425).
See Notes to Financial Statements.
9
Statement of Operations |
FOR THE SIX MONTHS ENDED DECEMBER 31, 2019 (UNAUDITED) | |||
Investment Income (Loss) | |||
Income: | |||
Dividends (net of foreign taxes withheld of $153,202) | $ | 2,302,984 | |
Interest | 43,105 | ||
Securities lending, net | 26,561 | ||
2,372,650 | |||
Expenses: | |||
Management fees | 1,666,039 | ||
Distribution and service fees: | |||
A Class | 14,558 | ||
C Class | 16,356 | ||
R Class | 16,148 | ||
Directors' fees and expenses | 19,367 | ||
Other expenses | 1,099 | ||
1,733,567 | |||
Net investment income (loss) | 639,083 | ||
Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investment transactions | 10,647,999 | ||
Foreign currency translation transactions | (33,695 | ) | |
10,614,304 | |||
Change in net unrealized appreciation (depreciation) on: | |||
Investments | 53,917,825 | ||
Translation of assets and liabilities in foreign currencies | (5,921 | ) | |
53,911,904 | |||
Net realized and unrealized gain (loss) | 64,526,208 | ||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 65,165,291 |
See Notes to Financial Statements.
10
Statement of Changes in Net Assets |
SIX MONTHS ENDED DECEMBER 31, 2019 (UNAUDITED) AND YEAR ENDED JUNE 30, 2019 | ||||||
Increase (Decrease) in Net Assets | December 31, 2019 | June 30, 2019 | ||||
Operations | ||||||
Net investment income (loss) | $ | 639,083 | $ | 3,046,382 | ||
Net realized gain (loss) | 10,614,304 | (5,164,354 | ) | |||
Change in net unrealized appreciation (depreciation) | 53,911,904 | 62,975,001 | ||||
Net increase (decrease) in net assets resulting from operations | 65,165,291 | 60,857,029 | ||||
Distributions to Shareholders | ||||||
From earnings: | ||||||
Investor Class | (4,219,444 | ) | — | |||
I Class | (479,696 | ) | — | |||
A Class | (82,256 | ) | — | |||
R Class | (25,464 | ) | — | |||
Decrease in net assets from distributions | (4,806,860 | ) | — | |||
Capital Share Transactions | ||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | 47,526,866 | 11,193,212 | ||||
Net increase (decrease) in net assets | 107,885,297 | 72,050,241 | ||||
Net Assets | ||||||
Beginning of period | 448,288,912 | 376,238,671 | ||||
End of period | $ | 556,174,209 | $ | 448,288,912 |
See Notes to Financial Statements.
11
Notes to Financial Statements |
DECEMBER 31, 2019 (UNAUDITED)
1. Organization
American Century Quantitative Equity Funds, Inc. (the corporation) is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company and is organized as a Maryland corporation. Global Gold Fund (the fund) is one fund in a series issued by the corporation. The fund’s investment objective is to seek to realize a total return (capital growth and dividends) consistent with investment in securities of companies that are engaged in mining, processing, fabricating or distributing gold or other precious metals throughout the world.
The fund offers the Investor Class, I Class, A Class, C Class and R Class. The A Class may incur an initial sales charge. The A Class and C Class may be subject to a contingent deferred sales charge.
2. Significant Accounting Policies
The following is a summary of significant accounting policies consistently followed by the fund in preparation of its financial statements. The fund is an investment company and follows accounting and reporting guidance in accordance with accounting principles generally accepted in the United States of America. This may require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from these estimates. Management evaluated the impact of events or transactions occurring through the date the financial statements were issued that would merit recognition or disclosure.
Investment Valuations — The fund determines the fair value of its investments and computes its net asset value per share at the close of regular trading (usually 4 p.m. Eastern time) on the New York Stock Exchange (NYSE) on each day the NYSE is open. The Board of Directors has adopted valuation policies and procedures to guide the investment advisor in the fund’s investment valuation process and to provide methodologies for the oversight of the fund’s pricing function.
Equity securities that are listed or traded on a domestic securities exchange are valued at the last reported sales price or at the official closing price as provided by the exchange. Equity securities traded on foreign securities exchanges are generally valued at the closing price of such securities on the exchange where primarily traded or at the close of the NYSE, if that is earlier. If no last sales price is reported, or if local convention or regulation so provides, the mean of the latest bid and asked prices may be used. Securities traded over-the-counter are valued at the mean of the latest bid and asked prices, the last sales price, or the official closing price. Equity securities initially expressed in local currencies are translated into U.S. dollars at the mean of the appropriate currency exchange rate at the close of the NYSE as provided by an independent pricing service.
Open-end management investment companies are valued at the reported net asset value per share. Repurchase agreements are valued at cost, which approximates fair value.
If the fund determines that the market price for an investment is not readily available or the valuation methods mentioned above do not reflect an investment’s fair value, such investment is valued as determined in good faith by the Board of Directors or its delegate, in accordance with policies and procedures adopted by the Board of Directors. In its determination of fair value, the fund may review several factors including, but not limited to, market information regarding the specific investment or comparable investments and correlation with other investment types, futures indices or general market indicators. Circumstances that may cause the fund to use these procedures to value an investment include, but are not limited to: an investment has been declared in default or is distressed; trading in a security has been suspended during the trading day or a security is not actively trading on its principal exchange; prices received from a regular pricing source are deemed unreliable; or there is a foreign market holiday and no trading occurred.
12
The fund monitors for significant events occurring after the close of an investment’s primary exchange but before the fund’s net asset value per share is determined. Significant events may include, but are not limited to: corporate announcements and transactions; governmental action and political unrest that could impact a specific investment or an investment sector; or armed conflicts, natural disasters and similar events that could affect investments in a specific country or region. The fund also monitors for significant fluctuations between domestic and foreign markets, as evidenced by the U.S. market or such other indicators that the Board of Directors, or its delegate, deems appropriate. The fund may apply a model-derived factor to the closing price of equity securities traded on foreign securities exchanges. The factor is based on observable market data as provided by an independent pricing service.
Security Transactions — Security transactions are accounted for as of the trade date. Net realized gains and losses are determined on the identified cost basis, which is also used for federal income tax purposes.
Investment Income — Dividend income less foreign taxes withheld, if any, is recorded as of the ex-dividend date. Distributions received on securities that represent a return of capital or long-term capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The fund may estimate the components of distributions received that may be considered nontaxable distributions or long-term capital gain distributions for income tax purposes. Interest income is recorded on the accrual basis and includes accretion of discounts and amortization of premiums. Securities lending income is net of fees and rebates earned by the lending agent for its services.
Foreign Currency Translations — All assets and liabilities initially expressed in foreign currencies are translated into U.S. dollars at prevailing exchange rates at period end. The fund may enter into spot foreign currency exchange contracts to facilitate transactions denominated in a foreign currency. Purchases and sales of investment securities, dividend and interest income, spot foreign currency exchange contracts, and expenses are translated at the rates of exchange prevailing on the respective dates of such transactions. Net realized and unrealized foreign currency exchange gains or losses related to investment securities are a component of net realized gain (loss) on investment transactions and change in net unrealized appreciation (depreciation) on investments, respectively.
Repurchase Agreements — The fund may enter into repurchase agreements with institutions that American Century Investment Management, Inc. (ACIM) (the investment advisor) has determined are creditworthy pursuant to criteria adopted by the Board of Directors. The fund requires that the collateral, represented by securities, received in a repurchase transaction be transferred to the custodian in a manner sufficient to enable the fund to obtain those securities in the event of a default under the repurchase agreement. ACIM monitors, on a daily basis, the securities transferred to ensure the value, including accrued interest, of the securities under each repurchase agreement is equal to or greater than amounts owed to the fund under each repurchase agreement.
Joint Trading Account — Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the fund, along with certain other funds in the American Century Investments family of funds, may transfer uninvested cash balances into a joint trading account. These balances are invested in one or more repurchase agreements that are collateralized by U.S. Treasury or Agency obligations.
Segregated Assets — In accordance with the 1940 Act, the fund segregates assets on its books and records to cover certain types of investment securities and other financial instruments. ACIM monitors, on a daily basis, the securities segregated to ensure the fund designates a sufficient amount of liquid assets, marked-to-market daily. The fund may also receive assets or be required to pledge assets at the custodian bank or with a broker for collateral requirements.
Income Tax Status — It is the fund’s policy to distribute substantially all net investment income and net realized gains to shareholders and to otherwise qualify as a regulated investment company under provisions of the Internal Revenue Code. Accordingly, no provision has been made for income taxes. The fund files U.S. federal, state, local and non-U.S. tax returns as applicable. The fund's tax returns are subject to examination by the relevant taxing authority until expiration of the applicable statute of limitations, which is generally three years from the date of filing but can be longer in certain jurisdictions. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination and for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
13
Multiple Class — All shares of the fund represent an equal pro rata interest in the net assets of the class to which such shares belong, and have identical voting, dividend, liquidation and other rights and the same terms and conditions, except for class specific expenses and exclusive rights to vote on matters affecting only individual classes. Income, non-class specific expenses, and realized and unrealized capital gains and losses of the fund are allocated to each class of shares based on their relative net assets.
Distributions to Shareholders — Distributions from net investment income, if any, are generally declared and paid semiannually. Distributions from net realized gains, if any, are generally declared and paid annually.
Indemnifications — Under the corporation’s organizational documents, its officers and directors are indemnified against certain liabilities arising out of the performance of their duties to the fund. In addition, in the normal course of business, the fund enters into contracts that provide general indemnifications. The maximum exposure under these arrangements is unknown as this would involve future claims that may be made against a fund. The risk of material loss from such claims is considered by management to be remote.
Securities Lending — Securities are lent to qualified financial institutions and brokers. State Street Bank & Trust Co. serves as securities lending agent to the fund pursuant to a Securities Lending Agreement. The lending of securities exposes the fund to risks such as: the borrowers may fail to return the loaned securities, the borrowers may not be able to provide additional collateral, the fund may experience delays in recovery of the loaned securities or delays in access to collateral, or the fund may experience losses related to the investment collateral. To minimize certain risks, loan counterparties pledge collateral in the form of cash and/or securities. The lending agent has agreed to indemnify the fund in the case of default of any securities borrowed. Cash collateral received is invested in the State Street Navigator Securities Lending Government Money Market Portfolio, a money market mutual fund registered under the 1940 Act. The loans may also be secured by U.S. government securities in an amount at least equal to the market value of the securities loaned, plus accrued interest and dividends, determined on a daily basis and adjusted accordingly. By lending securities, the fund seeks to increase its net investment income through the receipt of interest and fees. Such income is reflected separately within the Statement of Operations. The value of loaned securities and related collateral outstanding at period end, if any, are shown on a gross basis within the Schedule of Investments and Statement of Assets and Liabilities.
The following table reflects a breakdown of transactions accounted for as secured borrowings, the gross obligation by the type of collateral pledged, and the remaining contractual maturity of those transactions as of December 31, 2019.
Remaining Contractual Maturity of Agreements | ||||||||||||
Overnight and Continuous | <30 days | Between 30 & 90 days | >90 days | Total | ||||||||
Securities Lending Transactions(1) | ||||||||||||
Common Stocks | $ | 23,623,329 | — | — | — | $ | 23,623,329 | |||||
Exchange-Traded Funds | 2,614,357 | — | — | — | 2,614,357 | |||||||
Total Borrowings | $ | 26,237,686 | — | — | — | $ | 26,237,686 | |||||
Gross amount of recognized liabilities for securities lending transactions | $ | 26,237,686 |
(1) | Amount represents the payable for cash collateral received for securities on loan. This will generally be in the Overnight and Continuous column as the securities are typically callable on demand. |
3. Fees and Transactions with Related Parties
Certain officers and directors of the corporation are also officers and/or directors of American Century Companies, Inc. (ACC). The corporation’s investment advisor, ACIM, the corporation's distributor, American Century Investment Services, Inc. (ACIS), and the corporation’s transfer agent, American Century Services, LLC, are wholly owned, directly or indirectly, by ACC.
14
Management Fees — The corporation has entered into a management agreement with ACIM, under which ACIM provides the fund with investment advisory and management services in exchange for a single, unified management fee (the fee) per class. The agreement provides that all expenses of managing and operating the fund, except distribution and service fees, brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), and extraordinary expenses, will be paid by ACIM. The fee is computed and accrued daily based on each class’s daily net assets and paid monthly in arrears. The difference in the fee among the classes is a result of their separate arrangements for non-Rule 12b-1 shareholder services. It is not the result of any difference in advisory or custodial fees or other expenses related to the management of the fund’s assets, which do not vary by class. The fee consists of (1) an Investment Category Fee based on the daily net assets of the fund and certain other accounts managed by the investment advisor that are in the same broad investment category as the fund and (2) a Complex Fee based on the assets of all the funds in the American Century Investments family of funds.
The Investment Category Fee range, the Complex Fee range and the effective annual management fee for each class for the period ended December 31, 2019 are as follows:
Investment Category Fee Range | Complex Fee Range | Effective Annual Management Fee | |
Investor Class | 0.3380% to 0.5200% | 0.2500% to 0.3100% | 0.66% |
I Class | 0.0500% to 0.1100% | 0.46% | |
A Class | 0.2500% to 0.3100% | 0.66% | |
C Class | 0.2500% to 0.3100% | 0.66% | |
R Class | 0.2500% to 0.3100% | 0.66% |
Distribution and Service Fees — The Board of Directors has adopted a separate Master Distribution and Individual Shareholder Services Plan for each of the A Class, C Class and R Class (collectively the plans), pursuant to Rule 12b-1 of the 1940 Act. The plans provide that the A Class will pay ACIS an annual distribution and service fee of 0.25%. The plans provide that the C Class will pay ACIS an annual distribution and service fee of 1.00%, of which 0.25% is paid for individual shareholder services and 0.75% is paid for distribution services. The plans provide that the R Class will pay ACIS an annual distribution and service fee of 0.50%. The fees are computed and accrued daily based on each class’s daily net assets and paid monthly in arrears. The fees are used to pay financial intermediaries for distribution and individual shareholder services. Fees incurred under the plans during the period ended December 31, 2019 are detailed in the Statement of Operations.
Directors' Fees and Expenses — The Board of Directors is responsible for overseeing the investment advisor’s management and operations of the fund. The directors receive detailed information about the fund and its investment advisor regularly throughout the year, and meet at least quarterly with management of the investment advisor to review reports about fund operations. The fund’s officers do not receive compensation from the fund.
Interfund Transactions — The fund may enter into security transactions with other American Century Investments funds and other client accounts of the investment advisor, in accordance with the 1940 Act rules and procedures adopted by the Board of Directors. The rules and procedures require, among other things, that these transactions be effected at the independent current market price of the security. There were no interfund transactions during the period.
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the period ended December 31, 2019 were $131,040,902 and $91,040,083, respectively.
15
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended December 31, 2019 | Year ended June 30, 2019 | |||||||||
Shares | Amount | Shares | Amount | |||||||
Investor Class/Shares Authorized | 360,000,000 | 360,000,000 | ||||||||
Sold | 10,553,240 | $ | 112,466,806 | 11,498,013 | $ | 91,760,087 | ||||
Issued in reinvestment of distributions | 390,824 | 3,970,769 | — | — | ||||||
Redeemed | (7,755,629 | ) | (81,456,096 | ) | (11,133,781 | ) | (91,058,012 | ) | ||
3,188,435 | 34,981,479 | 364,232 | 702,075 | |||||||
I Class/Shares Authorized | 30,000,000 | 30,000,000 | ||||||||
Sold | 1,953,092 | 20,900,846 | 5,463,516 | 43,020,050 | ||||||
Issued in reinvestment of distributions | 46,684 | 479,446 | — | — | ||||||
Redeemed | (975,730 | ) | (10,279,311 | ) | (3,919,422 | ) | (33,623,403 | ) | ||
1,024,046 | 11,100,981 | 1,544,094 | 9,396,647 | |||||||
A Class/Shares Authorized | 20,000,000 | 20,000,000 | ||||||||
Sold | 428,448 | 4,476,658 | 688,777 | 5,511,378 | ||||||
Issued in reinvestment of distributions | 8,049 | 80,010 | — | — | ||||||
Redeemed | (336,668 | ) | (3,447,353 | ) | (497,467 | ) | (3,985,567 | ) | ||
99,829 | 1,109,315 | 191,310 | 1,525,811 | |||||||
C Class/Shares Authorized | 15,000,000 | 15,000,000 | ||||||||
Sold | 78,894 | 786,671 | 123,257 | 914,110 | ||||||
Redeemed | (47,935 | ) | (455,628 | ) | (99,114 | ) | (753,262 | ) | ||
30,959 | 331,043 | 24,143 | 160,848 | |||||||
R Class/Shares Authorized | 20,000,000 | 20,000,000 | ||||||||
Sold | 238,441 | 2,485,179 | 266,925 | 2,079,551 | ||||||
Issued in reinvestment of distributions | 2,590 | 25,464 | — | — | ||||||
Redeemed | (251,895 | ) | (2,506,595 | ) | (339,420 | ) | (2,671,720 | ) | ||
(10,864 | ) | 4,048 | (72,495 | ) | (592,169 | ) | ||||
Net increase (decrease) | 4,332,405 | $ | 47,526,866 | 2,051,284 | $ | 11,193,212 |
6. Fair Value Measurements
The fund’s investments valuation process is based on several considerations and may use multiple inputs to determine the fair value of the investments held by the fund. In conformity with accounting principles generally accepted in the United States of America, the inputs used to determine a valuation are classified into three broad levels.
• | Level 1 valuation inputs consist of unadjusted quoted prices in an active market for identical investments. |
• | Level 2 valuation inputs consist of direct or indirect observable market data (including quoted prices for comparable investments, evaluations of subsequent market events, interest rates, prepayment speeds, credit risk, etc.). These inputs also consist of quoted prices for identical investments initially expressed in local currencies that are adjusted through translation into U.S. dollars. |
• | Level 3 valuation inputs consist of unobservable data (including a fund’s own assumptions). |
The level classification is based on the lowest level input that is significant to the fair valuation measurement. The valuation inputs are not necessarily an indication of the risks associated with investing in these securities or other financial instruments.
16
The following is a summary of the level classifications as of period end. The Schedule of Investments provides additional information on the fund’s portfolio holdings.
Level 1 | Level 2 | Level 3 | ||||||
Assets | ||||||||
Investment Securities | ||||||||
Common Stocks | ||||||||
Australia | — | $ | 71,814,312 | — | ||||
Canada | $ | 221,182,535 | 77,760,598 | — | ||||
China | — | 4,403,970 | — | |||||
South Africa | 34,399,587 | 17,980,179 | — | |||||
United Kingdom | — | 12,877,763 | — | |||||
Other Countries | 97,237,230 | — | — | |||||
Exchange-Traded Funds | 13,257,530 | — | — | |||||
Temporary Cash Investments | 2,782 | 4,632,845 | — | |||||
Temporary Cash Investments - Securities Lending Collateral | 26,237,686 | — | — | |||||
$ | 392,317,350 | $ | 189,469,667 | — |
7. Risk Factors
There are certain risks involved in investing in foreign securities. These risks include those resulting from political events (such as civil unrest, national elections and imposition of exchange controls), social and economic events (such as labor strikes and rising inflation), and natural disasters. Securities of foreign issuers may be less liquid and more volatile. Investing in emerging markets or a significant portion of assets in one country or region may accentuate these risks.
The fund concentrates its investments in a narrow segment of the total market. Because of this, the fund may be subject to greater risk and market fluctuations than a portfolio representing a broader range of industries. Gold stocks are generally considered speculative because of high share price volatility. The price of gold will likely impact the value of the companies in which the fund invests. The price of gold will fluctuate, sometimes considerably. Though many investors believe that gold investments hedge against inflation, currency devaluations and stock market declines, there is no guarantee that these historical inverse relationships will continue.
8. Federal Tax Information
The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
As of period end, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $ | 383,894,181 | |
Gross tax appreciation of investments | $ | 205,458,721 | |
Gross tax depreciation of investments | (7,565,885 | ) | |
Net tax appreciation (depreciation) of investments | $ | 197,892,836 |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the realization to ordinary income for tax purposes of unrealized gains on investments in passive foreign investment companies.
As of June 30, 2019, the fund had accumulated short-term capital losses of $(42,168,323) and accumulated long-term capital losses of $(98,769,573), which represent net capital loss carryovers that may be used to offset future realized capital gains for federal income tax purposes. The capital loss carryovers may be carried forward for an unlimited period. Future capital loss carryover utilization in any given year may be subject to Internal Revenue Code limitations.
17
Financial Highlights |
For a Share Outstanding Throughout the Years Ended June 30 (except as noted) | |||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||
Income From Investment Operations: | Ratio to Average Net Assets of: | ||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Distributions From Net Investment Income | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Net Investment Income (Loss) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
Investor Class | |||||||||||||
2019(3) | $9.76 | 0.01 | 1.39 | 1.40 | (0.10) | $11.06 | 14.40% | 0.67%(4) | 0.25%(4) | 18% | $487,327 | ||
2019 | $8.58 | 0.07 | 1.11 | 1.18 | — | $9.76 | 13.75% | 0.67% | 0.84% | 47% | $398,804 | ||
2018 | $8.25 | 0.04 | 0.29 | 0.33 | — | $8.58 | 4.00% | 0.66% | 0.47% | 37% | $347,311 | ||
2017 | $11.66 | —(5) | (2.57) | (2.57) | (0.84) | $8.25 | (21.33)% | 0.67% | 0.05% | 27% | $351,207 | ||
2016 | $7.21 | —(5) | 4.45 | 4.45 | — | $11.66 | 61.72% | 0.68% | 0.06% | 11% | $474,952 | ||
2015 | $11.08 | 0.02 | (3.64) | (3.62) | (0.25) | $7.21 | (32.61)% | 0.67% | 0.21% | 17% | $288,172 | ||
I Class | |||||||||||||
2019(3) | $9.88 | 0.02 | 1.41 | 1.43 | (0.12) | $11.19 | 14.55% | 0.47%(4) | 0.45%(4) | 18% | $46,122 | ||
2019 | $8.67 | 0.08 | 1.13 | 1.21 | — | $9.88 | 13.96% | 0.47% | 1.04% | 47% | $30,608 | ||
2018 | $8.32 | 0.06 | 0.29 | 0.35 | — | $8.67 | 4.21% | 0.46% | 0.67% | 37% | $13,464 | ||
2017 | $11.75 | 0.02 | (2.60) | (2.58) | (0.85) | $8.32 | (21.17)% | 0.47% | 0.25% | 27% | $14,717 | ||
2016 | $7.25 | 0.02 | 4.48 | 4.50 | — | $11.75 | 62.07% | 0.48% | 0.26% | 11% | $15,579 | ||
2015 | $11.14 | 0.04 | (3.67) | (3.63) | (0.26) | $7.25 | (32.48)% | 0.47% | 0.41% | 17% | $9,639 |
For a Share Outstanding Throughout the Years Ended June 30 (except as noted) | |||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||
Income From Investment Operations: | Ratio to Average Net Assets of: | ||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Distributions From Net Investment Income | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Net Investment Income (Loss) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
A Class | |||||||||||||
2019(3) | $9.54 | —(5) | 1.36 | 1.36 | (0.07) | $10.83 | 14.33% | 0.92%(4) | 0.00%(4)(6) | 18% | $12,782 | ||
2019 | $8.40 | 0.05 | 1.09 | 1.14 | — | $9.54 | 13.57% | 0.92% | 0.59% | 47% | $10,311 | ||
2018 | $8.11 | 0.02 | 0.27 | 0.29 | — | $8.40 | 3.58% | 0.91% | 0.22% | 37% | $7,475 | ||
2017 | $11.47 | (0.02) | (2.52) | (2.54) | (0.82) | $8.11 | (21.45)% | 0.92% | (0.20)% | 27% | $7,895 | ||
2016 | $7.11 | (0.01) | 4.37 | 4.36 | — | $11.47 | 61.32% | 0.93% | (0.19)% | 11% | $15,196 | ||
2015 | $10.94 | (0.01) | (3.59) | (3.60) | (0.23) | $7.11 | (32.84)% | 0.92% | (0.04)% | 17% | $7,732 | ||
C Class | |||||||||||||
2019(3) | $9.04 | (0.04) | 1.29 | 1.25 | — | $10.29 | 13.83% | 1.67%(4) | (0.75)%(4) | 18% | $3,727 | ||
2019 | $8.03 | (0.01) | 1.02 | 1.01 | — | $9.04 | 12.58% | 1.67% | (0.16)% | 47% | $2,994 | ||
2018 | $7.80 | (0.04) | 0.27 | 0.23 | — | $8.03 | 2.95% | 1.66% | (0.53)% | 37% | $2,463 | ||
2017 | $11.07 | (0.09) | (2.43) | (2.52) | (0.75) | $7.80 | (22.04)% | 1.67% | (0.95)% | 27% | $2,284 | ||
2016 | $6.91 | (0.06) | 4.22 | 4.16 | — | $11.07 | 60.20% | 1.68% | (0.94)% | 11% | $2,589 | ||
2015 | $10.64 | (0.07) | (3.48) | (3.55) | (0.18) | $6.91 | (33.36)% | 1.67% | (0.79)% | 17% | $2,024 |
For a Share Outstanding Throughout the Years Ended June 30 (except as noted) | |||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||
Income From Investment Operations: | Ratio to Average Net Assets of: | ||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Distributions From Net Investment Income | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Net Investment Income (Loss) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
R Class | |||||||||||||
2019(3) | $9.42 | (0.01) | 1.34 | 1.33 | (0.04) | $10.71 | 14.21% | 1.17%(4) | (0.25)%(4) | 18% | $6,216 | ||
2019 | $8.32 | 0.02 | 1.08 | 1.10 | — | $9.42 | 13.22% | 1.17% | 0.34% | 47% | $5,573 | ||
2018 | $8.05 | —(5) | 0.27 | 0.27 | — | $8.32 | 3.35% | 1.16% | (0.03)% | 37% | $5,524 | ||
2017 | $11.39 | (0.04) | (2.50) | (2.54) | (0.80) | $8.05 | (21.63)% | 1.17% | (0.45)% | 27% | $4,517 | ||
2016 | $7.08 | (0.03) | 4.34 | 4.31 | — | $11.39 | 60.88% | 1.18% | (0.44)% | 11% | $5,176 | ||
2015 | $10.89 | (0.02) | (3.58) | (3.60) | (0.21) | $7.08 | (32.98)% | 1.17% | (0.29)% | 17% | $2,534 |
Notes to Financial Highlights |
(1) | Computed using average shares outstanding throughout the period. |
(2) | Total returns are calculated based on the net asset value of the last business day and do not reflect applicable sales charges, if any. Total returns for periods less than one year are not annualized. |
(3) | Six months ended December 31, 2019 (unaudited). |
(4) | Annualized. |
(5) | Per-share amount was less than $0.005. |
(6) | Ratio was less than 0.005%. |
See Notes to Financial Statements.
Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain retirement accounts are subject to federal income tax withholding, unless you elect not to have withholding apply*. Tax will be withheld on the total amount withdrawn even though you may be receiving amounts that are not subject to withholding, such as nondeductible contributions. In such case, excess amounts of withholding could occur. You may adjust your withholding election so that a greater or lesser amount will be withheld.
If you don’t want us to withhold on this amount, you must notify us to not withhold the federal income tax. You may notify us in writing or in certain situations by telephone or through other electronic means. For systematic withdrawals, your withholding election will remain in effect until revoked or changed by filing a new election. You have the right to revoke your election at any time and change your withholding percentage for future distributions.
Remember, even if you elect not to have income tax withheld, you are liable for paying income tax on the taxable portion of your withdrawal. If you elect not to have income tax withheld or you don’t have enough income tax withheld, you may be responsible for payment of estimated tax. You may incur penalties under the estimated tax rules if your withholding and estimated tax payments are not sufficient. You can reduce or defer the income tax on a distribution by directly or indirectly rolling such distribution over to another IRA or eligible plan. You should consult your tax advisor for additional information.
State tax will be withheld if, at the time of your distribution, your address is within one of the mandatory withholding states and you have federal income tax withheld (or as otherwise required by state law). State taxes will be withheld from your distribution in accordance with the respective state rules.
*Some 403(b), 457 and qualified retirement plan distributions may be subject to 20% mandatory withholding, as they are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
Descriptions of the principles and policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund are available without charge, upon request, by calling 1-800-345-2021 or visiting American Century Investments’ website at americancentury.com/proxy. A description of the policies is also available on the Securities and Exchange Commission’s website at sec.gov. Information regarding how the investment advisor voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on americancentury.com/proxy. It is also available at sec.gov.
Quarterly Portfolio Disclosure
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-Q or as an exhibit to its reports on Form N-PORT. The fund’s Forms N-Q and Form N-PORT reports are available on the SEC’s website at sec.gov. The fund also makes its complete schedule of portfolio holdings for the most recent quarter of its fiscal year available on its website at americancentury.com and, upon request, by calling 1-800-345-2021.
21
Notes |
22
Notes |
23
Notes |
24
Contact Us | americancentury.com | |
Automated Information Line | 1-800-345-8765 | |
Investor Services Representative | 1-800-345-2021 or 816-531-5575 | |
Investors Using Advisors | 1-800-378-9878 | |
Business, Not-For-Profit, Employer-Sponsored Retirement Plans | 1-800-345-3533 | |
Banks and Trust Companies, Broker-Dealers, Financial Professionals, Insurance Companies | 1-800-345-6488 | |
Telecommunications Relay Service for the Deaf | 711 | |
American Century Quantitative Equity Funds, Inc. | ||
Investment Advisor: American Century Investment Management, Inc. Kansas City, Missouri | ||
This report and the statements it contains are submitted for the general information of our shareholders. The report is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus. | ||
©2020 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-91453 2002 |
Semiannual Report | |
December 31, 2019 | |
Income & Growth Fund | |
Investor Class (BIGRX) | |
I Class (AMGIX) | |
A Class (AMADX) | |
C Class (ACGCX) | |
R Class (AICRX) | |
R5 Class (AICGX) |
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the fund’s shareholder reports like this one will no longer be sent by mail, unless you specifically request paper copies of the reports from the fund or from your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the fund or your financial intermediary electronically by calling or sending an email request to your appropriate contacts as listed on the back cover of this report.
You may elect to receive all future reports in paper free of charge. You can inform the fund or your financial intermediary that you wish to continue receiving paper copies of your shareholder reports by calling or sending an email request to your appropriate contacts as listed on the back cover of this report. Your election to receive reports in paper will apply to all funds held with the fund complex/your financial intermediary.
Table of Contents |
Any opinions expressed in this report reflect those of the author as of the date of the report, and do not necessarily represent the opinions of American Century Investments® or any other person in the American Century Investments organization. Any such opinions are subject to change at any time based upon market or other conditions and American Century Investments disclaims any responsibility to update such opinions. These opinions may not be relied upon as investment advice and, because investment decisions made by American Century Investments funds are based on numerous factors, may not be relied upon as an indication of trading intent on behalf of any American Century Investments fund. Security examples are used for representational purposes only and are not intended as recommendations to purchase or sell securities. Performance information for comparative indices and securities is provided to American Century Investments by third party vendors. To the best of American Century Investments’ knowledge, such information is accurate at the time of printing.
President’s Letter |
Jonathan Thomas
Dear Investor:
Thank you for reviewing this semiannual report for the period ended December 31, 2019. It provides a market overview (below), followed by a schedule of fund investments and other financial information. For additional commentary and information on fund performance, plus other investment insights, please visit our website, americancentury.com.
All Asset Classes Advanced
From higher-quality government bonds to higher-risk stocks and commodities, all major U.S. and global asset classes posted gains for the six-month period. U.S. stocks, as measured by the S&P 500 Index, advanced almost 11% for the period, outpacing the nearly 9% return for global stocks (MSCI ACWI). Income-oriented assets, including U.S. and global bonds and dividend-paying stocks, generally posted more-modest gains.
A key policy pivot from the Federal Reserve (Fed) helped set the stage for the rally. After abruptly ending its three-year rate-hike campaign in early 2019, the Fed cut rates in July. Ongoing concerns about global economic risks, including trade policy uncertainty, prompted this first Fed easing move in 10 years. And with global risks still looming, the Fed cut rates again in September and October before pausing. Similarly, the European Central Bank cut a key deposit rate and relaunched quantitative easing in a move to spark growth. These efforts helped push global yields lower, which aided performance among interest rate-sensitive assets.
Accommodative central bank policy and a lower interest rate backdrop also aided performance in equity markets. Additionally, modestly improving economic and earnings data calmed investors’ earlier worries and nudged stock returns higher. In December, a series of upbeat data helped stocks end the period on a high note. U.K. Prime Minister Boris Johnson and his Conservative Party won a decisive election victory, which resolved some lingering Brexit uncertainty. On the trade front, the U.S. House of Representatives approved the U.S.-Mexico-Canada Agreement, and the U.S. and China reached a phase 1 deal, further fueling investor optimism.
Looking ahead, we expect volatility to remain a factor as investors react to global growth trends, ongoing U.S.-China trade negotiations, central bank policy and geopolitical forces. We believe this scenario underscores the importance of using professionally managed portfolios in pursuit of investment goals. We appreciate your continued trust and confidence in us.
Sincerely,
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
2
Fund Characteristics |
DECEMBER 31, 2019 | |
Top Ten Holdings | % of net assets |
Microsoft Corp. | 4.9% |
Apple, Inc. | 4.3% |
Alphabet, Inc., Class A | 3.7% |
Amazon.com, Inc. | 3.1% |
Johnson & Johnson | 1.8% |
Verizon Communications, Inc. | 1.8% |
AT&T, Inc. | 1.8% |
Chevron Corp. | 1.7% |
JPMorgan Chase & Co. | 1.6% |
Home Depot, Inc. (The) | 1.5% |
Top Five Industries | % of net assets |
Banks | 7.3% |
Software | 6.9% |
Technology Hardware, Storage and Peripherals | 6.2% |
Equity Real Estate Investment Trusts (REITs) | 6.0% |
Semiconductors and Semiconductor Equipment | 5.4% |
Types of Investments in Portfolio | % of net assets |
Common Stocks | 96.3% |
Temporary Cash Investments | 3.6% |
Other Assets and Liabilities | 0.1% |
3
Shareholder Fee Example |
Fund shareholders may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption/exchange fees; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in your fund and to compare these costs with the ongoing cost of investing in other mutual funds.
The example is based on an investment of $1,000 made at the beginning of the period and held for the entire period from July 1, 2019 to December 31, 2019.
Actual Expenses
The table provides information about actual account values and actual expenses for each class. You may use the information, together with the amount you invested, to estimate the expenses that you paid over the period. First, identify the share class you own. Then simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
If you hold Investor Class shares of any American Century Investments fund, or I Class shares of the American Century Diversified Bond Fund, in an American Century Investments account (i.e., not a financial intermediary or retirement plan account), American Century Investments may charge you a $12.50 semiannual account maintenance fee if the value of those shares is less than $10,000. We will redeem shares automatically in one of your accounts to pay the $12.50 fee. In determining your total eligible investment amount, we will include your investments in all personal accounts (including American Century Investments Brokerage accounts) registered under your Social Security number. Personal accounts include individual accounts, joint accounts, UGMA/UTMA accounts, personal trusts, Coverdell Education Savings Accounts and IRAs (including traditional, Roth, Rollover, SEP-, SARSEP- and SIMPLE-IRAs), and certain other retirement accounts. If you have only business, business retirement, employer-sponsored or American Century Investments Brokerage accounts, you are currently not subject to this fee. If you are subject to the Account Maintenance Fee, your account value could be reduced by the fee amount.
Hypothetical Example for Comparison Purposes
The table also provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio of each class of your fund and an assumed rate of return of 5% per year before expenses, which is not the actual return of a fund’s share class. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) or redemption/exchange fees. Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
4
Beginning Account Value 7/1/19 | Ending Account Value 12/31/19 | Expenses Paid During Period(1) 7/1/19 - 12/31/19 | Annualized Expense Ratio(1) | |
Actual | ||||
Investor Class | $1,000 | $1,088.50 | $3.52 | 0.67% |
I Class | $1,000 | $1,089.50 | $2.47 | 0.47% |
A Class | $1,000 | $1,087.20 | $4.83 | 0.92% |
C Class | $1,000 | $1,083.00 | $8.74 | 1.67% |
R Class | $1,000 | $1,085.60 | $6.13 | 1.17% |
R5 Class | $1,000 | $1,089.50 | $2.47 | 0.47% |
Hypothetical | ||||
Investor Class | $1,000 | $1,021.77 | $3.40 | 0.67% |
I Class | $1,000 | $1,022.77 | $2.39 | 0.47% |
A Class | $1,000 | $1,020.51 | $4.67 | 0.92% |
C Class | $1,000 | $1,016.74 | $8.47 | 1.67% |
R Class | $1,000 | $1,019.26 | $5.94 | 1.17% |
R5 Class | $1,000 | $1,022.77 | $2.39 | 0.47% |
(1) | Expenses are equal to the class's annualized expense ratio listed in the table above, multiplied by the average account value over the period, multiplied by 184, the number of days in the most recent fiscal half-year, divided by 366, to reflect the one-half year period. Annualized expense ratio reflects actual expenses, including any applicable fee waivers or expense reimbursements and excluding any acquired fund fees and expenses. |
5
Schedule of Investments |
DECEMBER 31, 2019 (UNAUDITED)
Shares | Value | |||
COMMON STOCKS — 96.3% | ||||
Aerospace and Defense — 0.1% | ||||
Lockheed Martin Corp. | 4,994 | $ | 1,944,564 | |
Air Freight and Logistics — 1.3% | ||||
CH Robinson Worldwide, Inc. | 39,711 | 3,105,400 | ||
United Parcel Service, Inc., Class B | 225,117 | 26,352,196 | ||
29,457,596 | ||||
Airlines — 0.4% | ||||
Delta Air Lines, Inc. | 175,597 | 10,268,913 | ||
Automobiles — 0.4% | ||||
Ford Motor Co. | 897,300 | 8,344,890 | ||
Banks — 7.3% | ||||
Bank of America Corp. | 367,380 | 12,939,124 | ||
Comerica, Inc. | 139,983 | 10,043,780 | ||
Fifth Third Bancorp | 399,115 | 12,268,795 | ||
JPMorgan Chase & Co. | 261,299 | 36,425,080 | ||
KeyCorp | 618,282 | 12,514,028 | ||
PNC Financial Services Group, Inc. (The) | 93,616 | 14,943,922 | ||
Regions Financial Corp. | 713,767 | 12,248,242 | ||
Truist Financial Corp. | 255,218 | 14,373,878 | ||
U.S. Bancorp | 221,322 | 13,122,181 | ||
Umpqua Holdings Corp. | 63,042 | 1,115,843 | ||
Wells Fargo & Co. | 512,017 | 27,546,515 | ||
167,541,388 | ||||
Beverages — 2.7% | ||||
Coca-Cola Co. (The) | 381,934 | 21,140,047 | ||
Molson Coors Brewing Co., Class B | 174,303 | 9,394,932 | ||
PepsiCo, Inc. | 236,462 | 32,317,261 | ||
62,852,240 | ||||
Biotechnology — 3.4% | ||||
AbbVie, Inc. | 230,393 | 20,398,996 | ||
Amgen, Inc. | 66,147 | 15,946,057 | ||
Biogen, Inc.(1) | 55,441 | 16,451,008 | ||
Gilead Sciences, Inc. | 375,859 | 24,423,318 | ||
77,219,379 | ||||
Building Products — 0.3% | ||||
Johnson Controls International plc | 149,038 | 6,067,337 | ||
Capital Markets — 1.6% | ||||
Ameriprise Financial, Inc. | 66,077 | 11,007,107 | ||
Cohen & Steers, Inc. | 62,278 | 3,908,567 | ||
Janus Henderson Group plc | 387,934 | 9,484,986 | ||
Northern Trust Corp. | 118,929 | 12,635,017 | ||
37,035,677 |
6
Shares | Value | |||
Chemicals — 0.9% | ||||
Dow, Inc. | 159,648 | $ | 8,737,535 | |
LyondellBasell Industries NV, Class A | 116,455 | 11,002,668 | ||
19,740,203 | ||||
Commercial Services and Supplies — 0.9% | ||||
Republic Services, Inc. | 131,504 | 11,786,704 | ||
Waste Management, Inc. | 83,117 | 9,472,013 | ||
21,258,717 | ||||
Communications Equipment — 1.3% | ||||
Cisco Systems, Inc. | 417,143 | 20,006,178 | ||
Juniper Networks, Inc. | 351,742 | 8,663,406 | ||
28,669,584 | ||||
Consumer Finance — 0.9% | ||||
Discover Financial Services | 110,803 | 9,398,311 | ||
Synchrony Financial | 318,307 | 11,462,235 | ||
20,860,546 | ||||
Containers and Packaging — 1.1% | ||||
Amcor Plc(1) | 1,232,320 | 13,358,349 | ||
International Paper Co. | 239,380 | 11,023,449 | ||
24,381,798 | ||||
Diversified Financial Services — 0.8% | ||||
Berkshire Hathaway, Inc., Class B(1) | 85,040 | 19,261,560 | ||
Diversified Telecommunication Services — 3.6% | ||||
AT&T, Inc. | 1,039,910 | 40,639,683 | ||
Verizon Communications, Inc. | 682,096 | 41,880,694 | ||
82,520,377 | ||||
Electric Utilities — 0.9% | ||||
IDACORP, Inc. | 71,802 | 7,668,454 | ||
NextEra Energy, Inc. | 51,952 | 12,580,696 | ||
20,249,150 | ||||
Electronic Equipment, Instruments and Components — 0.4% | ||||
National Instruments Corp. | 208,708 | 8,836,697 | ||
Entertainment — 0.4% | ||||
Take-Two Interactive Software, Inc.(1) | 31,281 | 3,829,733 | ||
Walt Disney Co. (The) | 32,445 | 4,692,520 | ||
8,522,253 | ||||
Equity Real Estate Investment Trusts (REITs) — 6.0% | ||||
Apple Hospitality REIT, Inc. | 149,127 | 2,423,314 | ||
Brandywine Realty Trust | 649,124 | 10,223,703 | ||
Corporate Office Properties Trust | 226,155 | 6,644,434 | ||
Digital Realty Trust, Inc. | 49,619 | 5,941,379 | ||
EPR Properties | 118,609 | 8,378,540 | ||
Extra Space Storage, Inc. | 83,278 | 8,795,822 | ||
Healthcare Trust of America, Inc., Class A | 92,874 | 2,812,225 | ||
Highwoods Properties, Inc. | 132,376 | 6,474,510 | ||
Industrial Logistics Properties Trust | 238,863 | 5,355,308 | ||
Lamar Advertising Co., Class A | 130,353 | 11,635,309 |
7
Shares | Value | |||
Life Storage, Inc. | 28,474 | $ | 3,083,164 | |
Mid-America Apartment Communities, Inc. | 28,571 | 3,767,372 | ||
Realty Income Corp. | 147,819 | 10,883,913 | ||
Retail Properties of America, Inc., Class A | 609,082 | 8,161,699 | ||
Simon Property Group, Inc. | 28,231 | 4,205,290 | ||
Tanger Factory Outlet Centers, Inc. | 401,601 | 5,915,583 | ||
VICI Properties, Inc. | 461,287 | 11,785,883 | ||
Weingarten Realty Investors | 304,762 | 9,520,765 | ||
WP Carey, Inc. | 136,366 | 10,914,734 | ||
136,922,947 | ||||
Food Products — 2.9% | ||||
Campbell Soup Co. | 418,146 | 20,664,775 | ||
General Mills, Inc. | 362,432 | 19,411,858 | ||
Hershey Co. (The) | 90,551 | 13,309,186 | ||
Kellogg Co. | 180,273 | 12,467,681 | ||
65,853,500 | ||||
Health Care Equipment and Supplies — 0.5% | ||||
Stryker Corp. | 57,714 | 12,116,477 | ||
Health Care Providers and Services — 0.7% | ||||
Cardinal Health, Inc. | 168,571 | 8,526,321 | ||
Chemed Corp. | 6,642 | 2,917,565 | ||
UnitedHealth Group, Inc. | 12,488 | 3,671,222 | ||
15,115,108 | ||||
Health Care Technology — 0.3% | ||||
Veeva Systems, Inc., Class A(1) | 54,582 | 7,677,504 | ||
Hotels, Restaurants and Leisure — 2.7% | ||||
Darden Restaurants, Inc. | 96,019 | 10,467,031 | ||
Las Vegas Sands Corp. | 226,879 | 15,663,726 | ||
McDonald's Corp. | 53,548 | 10,581,620 | ||
Starbucks Corp. | 163,914 | 14,411,319 | ||
Vail Resorts, Inc. | 41,663 | 9,992,038 | ||
61,115,734 | ||||
Household Durables — 0.3% | ||||
Garmin Ltd. | 65,495 | 6,389,692 | ||
Household Products — 3.1% | ||||
Clorox Co. (The) | 47,757 | 7,332,610 | ||
Colgate-Palmolive Co. | 222,016 | 15,283,582 | ||
Kimberly-Clark Corp. | 149,962 | 20,627,273 | ||
Procter & Gamble Co. (The) | 218,596 | 27,302,640 | ||
70,546,105 | ||||
Insurance — 2.2% | ||||
Fidelity National Financial, Inc. | 211,598 | 9,595,969 | ||
First American Financial Corp. | 138,612 | 8,083,852 | ||
MetLife, Inc. | 247,153 | 12,597,389 | ||
Prudential Financial, Inc. | 111,877 | 10,487,350 | ||
Unum Group | 293,807 | 8,567,412 | ||
49,331,972 |
8
Shares | Value | |||
Interactive Media and Services — 5.3% | ||||
Alphabet, Inc., Class A(1) | 63,655 | $ | 85,258,870 | |
Facebook, Inc., Class A(1) | 170,803 | 35,057,316 | ||
120,316,186 | ||||
Internet and Direct Marketing Retail — 3.7% | ||||
Amazon.com, Inc.(1) | 38,230 | 70,642,923 | ||
eBay, Inc. | 375,262 | 13,550,711 | ||
84,193,634 | ||||
IT Services — 3.7% | ||||
Amdocs Ltd. | 140,995 | 10,178,429 | ||
International Business Machines Corp. | 215,135 | 28,836,695 | ||
Mastercard, Inc., Class A | 10,672 | 3,186,552 | ||
MAXIMUS, Inc. | 44,009 | 3,273,830 | ||
Paychex, Inc. | 130,571 | 11,106,369 | ||
PayPal Holdings, Inc.(1) | 19,840 | 2,146,093 | ||
Visa, Inc., Class A | 65,512 | 12,309,705 | ||
Western Union Co. (The) | 467,987 | 12,532,692 | ||
83,570,365 | ||||
Machinery — 1.7% | ||||
Cummins, Inc. | 113,115 | 20,243,060 | ||
Snap-on, Inc. | 111,147 | 18,828,302 | ||
39,071,362 | ||||
Media — 1.5% | ||||
Comcast Corp., Class A | 31,668 | 1,424,110 | ||
Interpublic Group of Cos., Inc. (The) | 799,130 | 18,459,903 | ||
Omnicom Group, Inc. | 186,233 | 15,088,598 | ||
34,972,611 | ||||
Metals and Mining — 0.2% | ||||
Steel Dynamics, Inc. | 163,368 | 5,561,047 | ||
Multiline Retail — 0.7% | ||||
Target Corp. | 129,005 | 16,539,731 | ||
Oil, Gas and Consumable Fuels — 5.2% | ||||
Chevron Corp. | 329,164 | 39,667,554 | ||
Exxon Mobil Corp. | 381,088 | 26,592,321 | ||
HollyFrontier Corp. | 249,028 | 12,628,210 | ||
Kinder Morgan, Inc. | 642,014 | 13,591,436 | ||
Phillips 66 | 124,752 | 13,898,620 | ||
Valero Energy Corp. | 128,499 | 12,033,931 | ||
118,412,072 | ||||
Paper and Forest Products — 0.3% | ||||
Domtar Corp. | 200,393 | 7,663,028 | ||
Pharmaceuticals — 4.7% | ||||
Bristol-Myers Squibb Co. | 246,116 | 15,798,186 | ||
Eli Lilly & Co. | 16,933 | 2,225,504 | ||
Johnson & Johnson | 288,952 | 42,149,428 | ||
Merck & Co., Inc. | 249,349 | 22,678,292 | ||
Pfizer, Inc. | 613,413 | 24,033,521 | ||
106,884,931 |
9
Shares | Value | |||
Semiconductors and Semiconductor Equipment — 5.4% | ||||
Applied Materials, Inc. | 268,998 | $ | 16,419,638 | |
Broadcom, Inc. | 102,076 | 32,258,058 | ||
Intel Corp. | 410,163 | 24,548,256 | ||
Maxim Integrated Products, Inc. | 151,927 | 9,345,030 | ||
QUALCOMM, Inc. | 152,576 | 13,461,780 | ||
Texas Instruments, Inc. | 215,225 | 27,611,215 | ||
123,643,977 | ||||
Software — 6.9% | ||||
Adobe, Inc.(1) | 24,197 | 7,980,413 | ||
LogMeIn, Inc. | 135,487 | 11,616,655 | ||
Microsoft Corp. | 707,542 | 111,579,373 | ||
Oracle Corp. (New York) | 328,393 | 17,398,261 | ||
salesforce.com, Inc.(1) | 44,092 | 7,171,123 | ||
Zscaler, Inc.(1) | 33,685 | 1,566,353 | ||
157,312,178 | ||||
Specialty Retail — 1.9% | ||||
AutoZone, Inc.(1) | 7,463 | 8,890,746 | ||
Home Depot, Inc. (The) | 161,965 | 35,369,917 | ||
44,260,663 | ||||
Technology Hardware, Storage and Peripherals — 6.2% | ||||
Apple, Inc. | 331,051 | 97,213,126 | ||
HP, Inc. | 826,677 | 16,988,212 | ||
NetApp, Inc. | 141,225 | 8,791,256 | ||
Seagate Technology plc | 321,205 | 19,111,698 | ||
142,104,292 | ||||
Tobacco — 1.1% | ||||
Altria Group, Inc. | 169,673 | 8,468,379 | ||
Philip Morris International, Inc. | 205,363 | 17,474,338 | ||
�� | 25,942,717 | |||
Trading Companies and Distributors — 0.4% | ||||
Fastenal Co. | 279,768 | 10,337,428 | ||
TOTAL COMMON STOCKS (Cost $1,630,874,202) | 2,200,888,130 | |||
TEMPORARY CASH INVESTMENTS — 3.6% | ||||
Repurchase Agreement, BMO Capital Markets Corp., (collateralized by various U.S. Treasury obligations, 2.75% - 3.75%, 9/15/21 - 11/15/43, valued at $68,702,474), in a joint trading account at 1.35%, dated 12/31/19, due 1/2/20 (Delivery value $67,258,632) | 67,253,588 | |||
Repurchase Agreement, Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 1.625%, 12/15/22, valued at $15,272,585), at 0.65%, dated 12/31/19, due 1/2/20 (Delivery value $14,969,541) | 14,969,000 | |||
State Street Institutional U.S. Government Money Market Fund, Premier Class | 39,333 | 39,333 | ||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $82,261,921) | 82,261,921 | |||
TOTAL INVESTMENT SECURITIES — 99.9% (Cost $1,713,136,123) | 2,283,150,051 | |||
OTHER ASSETS AND LIABILITIES — 0.1% | 1,352,911 | |||
TOTAL NET ASSETS — 100.0% | $ | 2,284,502,962 |
10
FUTURES CONTRACTS PURCHASED | |||||||||||
Reference Entity | Contracts | Expiration Date | Notional Amount | Underlying Contract Value | Unrealized Appreciation (Depreciation) | ||||||
S&P 500 E-Mini | 381 | March 2020 | $ | 19,050 | $ | 61,552,455 | $ | 1,145,252 |
NOTES TO SCHEDULE OF INVESTMENTS |
(1) | Non-income producing. |
See Notes to Financial Statements.
11
Statement of Assets and Liabilities |
DECEMBER 31, 2019 (UNAUDITED) | |||
Assets | |||
Investment securities, at value (cost of $1,713,136,123) | $ | 2,283,150,051 | |
Deposits with broker for futures contracts | 2,400,300 | ||
Receivable for capital shares sold | 832,799 | ||
Receivable for variation margin on futures contracts | 146,685 | ||
Dividends and interest receivable | 2,864,318 | ||
2,289,394,153 | |||
Liabilities | |||
Payable for capital shares redeemed | 3,630,122 | ||
Accrued management fees | 1,213,407 | ||
Distribution and service fees payable | 47,662 | ||
4,891,191 | |||
Net Assets | $ | 2,284,502,962 | |
Net Assets Consist of: | |||
Capital (par value and paid-in surplus) | $ | 1,650,881,045 | |
Distributable earnings | 633,621,917 | ||
$ | 2,284,502,962 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | ||||
Investor Class, $0.01 Par Value | $1,782,444,705 | 45,838,820 | $38.89 | |||
I Class, $0.01 Par Value | $310,075,377 | 7,962,208 | $38.94 | |||
A Class, $0.01 Par Value | $149,810,813 | 3,859,060 | $38.82* | |||
C Class, $0.01 Par Value | $8,929,587 | 230,474 | $38.74 | |||
R Class, $0.01 Par Value | $18,590,816 | 478,256 | $38.87 | |||
R5 Class, $0.01 Par Value | $14,651,664 | 376,135 | $38.95 |
*Maximum offering price $41.19 (net asset value divided by 0.9425).
See Notes to Financial Statements.
12
Statement of Operations |
FOR THE SIX MONTHS ENDED DECEMBER 31, 2019 (UNAUDITED) | |||
Investment Income (Loss) | |||
Income: | |||
Dividends | $ | 30,297,850 | |
Interest | 395,973 | ||
30,693,823 | |||
Expenses: | |||
Management fees | 7,026,806 | ||
Distribution and service fees: | |||
A Class | 188,000 | ||
C Class | 44,386 | ||
R Class | 56,103 | ||
Directors' fees and expenses | 84,326 | ||
Other expenses | 1,372 | ||
7,400,993 | |||
Net investment income (loss) | 23,292,830 | ||
Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investment transactions | 72,934,076 | ||
Futures contract transactions | 3,847,840 | ||
76,781,916 | |||
Change in net unrealized appreciation (depreciation) on: | |||
Investments | 88,152,029 | ||
Futures contracts | 1,145,252 | ||
89,297,281 | |||
Net realized and unrealized gain (loss) | 166,079,197 | ||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 189,372,027 |
See Notes to Financial Statements.
13
Statement of Changes in Net Assets |
SIX MONTHS ENDED DECEMBER 31, 2019 (UNAUDITED) AND YEAR ENDED JUNE 30, 2019 | ||||||
Increase (Decrease) in Net Assets | December 31, 2019 | June 30, 2019 | ||||
Operations | ||||||
Net investment income (loss) | $ | 23,292,830 | $ | 45,547,410 | ||
Net realized gain (loss) | 76,781,916 | 78,603,188 | ||||
Change in net unrealized appreciation (depreciation) | 89,297,281 | (26,164,480 | ) | |||
Net increase (decrease) in net assets resulting from operations | 189,372,027 | 97,986,118 | ||||
Distributions to Shareholders | ||||||
From earnings: | ||||||
Investor Class | (53,236,145 | ) | (184,522,529 | ) | ||
I Class | (9,568,653 | ) | (29,223,053 | ) | ||
A Class | (4,335,960 | ) | (15,989,055 | ) | ||
C Class | (223,717 | ) | (863,598 | ) | ||
R Class | (558,271 | ) | (2,594,469 | ) | ||
R5 Class | (452,600 | ) | (1,482,829 | ) | ||
Decrease in net assets from distributions | (68,375,346 | ) | (234,675,533 | ) | ||
Capital Share Transactions | ||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | (50,323,474 | ) | 130,765,006 | |||
Net increase (decrease) in net assets | 70,673,207 | (5,924,409 | ) | |||
Net Assets | ||||||
Beginning of period | 2,213,829,755 | 2,219,754,164 | ||||
End of period | $ | 2,284,502,962 | $ | 2,213,829,755 |
See Notes to Financial Statements.
14
Notes to Financial Statements |
DECEMBER 31, 2019 (UNAUDITED)
1. Organization
American Century Quantitative Equity Funds, Inc. (the corporation) is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company and is organized as a Maryland corporation. Income & Growth Fund (the fund) is one fund in a series issued by the corporation. The fund’s investment objective is to seek long-term capital growth by investing in common stocks. Income is a secondary objective.
The fund offers the Investor Class, I Class, A Class, C Class, R Class and R5 Class. The A Class may incur an initial sales charge. The A Class and C Class may be subject to a contingent deferred sales charge.
2. Significant Accounting Policies
The following is a summary of significant accounting policies consistently followed by the fund in preparation of its financial statements. The fund is an investment company and follows accounting and reporting guidance in accordance with accounting principles generally accepted in the United States of America. This may require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from these estimates. Management evaluated the impact of events or transactions occurring through the date the financial statements were issued that would merit recognition or disclosure.
Investment Valuations — The fund determines the fair value of its investments and computes its net asset value per share at the close of regular trading (usually 4 p.m. Eastern time) on the New York Stock Exchange (NYSE) on each day the NYSE is open. The Board of Directors has adopted valuation policies and procedures to guide the investment advisor in the fund’s investment valuation process and to provide methodologies for the oversight of the fund’s pricing function.
Equity securities that are listed or traded on a domestic securities exchange are valued at the last reported sales price or at the official closing price as provided by the exchange. Equity securities traded on foreign securities exchanges are generally valued at the closing price of such securities on the exchange where primarily traded or at the close of the NYSE, if that is earlier. If no last sales price is reported, or if local convention or regulation so provides, the mean of the latest bid and asked prices may be used. Securities traded over-the-counter are valued at the mean of the latest bid and asked prices, the last sales price, or the official closing price.
Open-end management investment companies are valued at the reported net asset value per share. Repurchase agreements are valued at cost, which approximates fair value. Exchange-traded futures contracts are valued at the settlement price as provided by the appropriate exchange.
If the fund determines that the market price for an investment is not readily available or the valuation methods mentioned above do not reflect an investment’s fair value, such investment is valued as determined in good faith by the Board of Directors or its delegate, in accordance with policies and procedures adopted by the Board of Directors. In its determination of fair value, the fund may review several factors including, but not limited to, market information regarding the specific investment or comparable investments and correlation with other investment types, futures indices or general market indicators. Circumstances that may cause the fund to use these procedures to value an investment include, but are not limited to: an investment has been declared in default or is distressed; trading in a security has been suspended during the trading day or a security is not actively trading on its principal exchange; prices received from a regular pricing source are deemed unreliable; or there is a foreign market holiday and no trading occurred.
The fund monitors for significant events occurring after the close of an investment’s primary exchange but before the fund’s net asset value per share is determined. Significant events may include, but are not limited to: corporate announcements and transactions; governmental action and political unrest that could impact a specific investment or an investment sector; or armed conflicts, natural disasters and similar events that could affect investments in a specific country or region. The fund also monitors for significant fluctuations between domestic and foreign markets, as evidenced by the U.S. market or such other indicators that the Board of
15
Directors, or its delegate, deems appropriate. The fund may apply a model-derived factor to the closing price of equity securities traded on foreign securities exchanges. The factor is based on observable market data as provided by an independent pricing service.
Security Transactions — Security transactions are accounted for as of the trade date. Net realized gains and losses are determined on the identified cost basis, which is also used for federal income tax purposes.
Investment Income — Dividend income less foreign taxes withheld, if any, is recorded as of the ex-dividend date. Distributions received on securities that represent a return of capital or long-term capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The fund may estimate the components of distributions received that may be considered nontaxable distributions or long-term capital gain distributions for income tax purposes. Interest income is recorded on the accrual basis and includes accretion of discounts and amortization of premiums.
Repurchase Agreements — The fund may enter into repurchase agreements with institutions that American Century Investment Management, Inc. (ACIM) (the investment advisor) has determined are creditworthy pursuant to criteria adopted by the Board of Directors. The fund requires that the collateral, represented by securities, received in a repurchase transaction be transferred to the custodian in a manner sufficient to enable the fund to obtain those securities in the event of a default under the repurchase agreement. ACIM monitors, on a daily basis, the securities transferred to ensure the value, including accrued interest, of the securities under each repurchase agreement is equal to or greater than amounts owed to the fund under each repurchase agreement.
Joint Trading Account — Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the fund, along with certain other funds in the American Century Investments family of funds, may transfer uninvested cash balances into a joint trading account. These balances are invested in one or more repurchase agreements that are collateralized by U.S. Treasury or Agency obligations.
Segregated Assets — In accordance with the 1940 Act, the fund segregates assets on its books and records to cover certain types of investment securities and other financial instruments. ACIM monitors, on a daily basis, the securities segregated to ensure the fund designates a sufficient amount of liquid assets, marked-to-market daily. The fund may also receive assets or be required to pledge assets at the custodian bank or with a broker for collateral requirements.
Income Tax Status — It is the fund’s policy to distribute substantially all net investment income and net realized gains to shareholders and to otherwise qualify as a regulated investment company under provisions of the Internal Revenue Code. Accordingly, no provision has been made for income taxes. The fund files U.S. federal, state, local and non-U.S. tax returns as applicable. The fund's tax returns are subject to examination by the relevant taxing authority until expiration of the applicable statute of limitations, which is generally three years from the date of filing but can be longer in certain jurisdictions. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination and for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Multiple Class — All shares of the fund represent an equal pro rata interest in the net assets of the class to which such shares belong, and have identical voting, dividend, liquidation and other rights and the same terms and conditions, except for class specific expenses and exclusive rights to vote on matters affecting only individual classes. Income, non-class specific expenses, and realized and unrealized capital gains and losses of the fund are allocated to each class of shares based on their relative net assets.
Distributions to Shareholders — Distributions from net investment income, if any, are generally declared and paid quarterly. Distributions from net realized gains, if any, are generally declared and paid annually.
Indemnifications — Under the corporation’s organizational documents, its officers and directors are indemnified against certain liabilities arising out of the performance of their duties to the fund. In addition, in the normal course of business, the fund enters into contracts that provide general indemnifications. The maximum exposure under these arrangements is unknown as this would involve future claims that may be made against a fund. The risk of material loss from such claims is considered by management to be remote.
16
3. Fees and Transactions with Related Parties
Certain officers and directors of the corporation are also officers and/or directors of American Century Companies, Inc. (ACC). The corporation’s investment advisor, ACIM, the corporation's distributor, American Century Investment Services, Inc. (ACIS), and the corporation’s transfer agent, American Century Services, LLC, are wholly owned, directly or indirectly, by ACC.
Management Fees — The corporation has entered into a management agreement with ACIM, under which ACIM provides the fund with investment advisory and management services in exchange for a single, unified management fee (the fee) per class. The agreement provides that all expenses of managing and operating the fund, except distribution and service fees, brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), and extraordinary expenses, will be paid by ACIM. The fee is computed and accrued daily based on each class's daily net assets and paid monthly in arrears. The difference in the fee among the classes is a result of their separate arrangements for non-Rule 12b-1 shareholder services. It is not the result of any difference in advisory or custodial fees or other expenses related to the management of the fund's assets, which do not vary by class. The fee consists of (1) an Investment Category Fee based on the daily net assets of the fund and certain other accounts managed by the investment advisor that are in the same broad investment category as the fund and (2) a Complex Fee based on the assets of all the funds in the American Century Investments family of funds.
The Investment Category Fee range, the Complex Fee range and the effective annual management fee for each class for the period ended December 31, 2019 are as follows:
Investment Category Fee Range | Complex Fee Range | Effective Annual Management Fee | |
Investor Class | 0.3380% to 0.5200% | 0.2500% to 0.3100% | 0.66% |
I Class | 0.0500% to 0.1100% | 0.46% | |
A Class | 0.2500% to 0.3100% | 0.66% | |
C Class | 0.2500% to 0.3100% | 0.66% | |
R Class | 0.2500% to 0.3100% | 0.66% | |
R5 Class | 0.0500% to 0.1100% | 0.46% |
Distribution and Service Fees — The Board of Directors has adopted a separate Master Distribution and Individual Shareholder Services Plan for each of the A Class, C Class and R Class (collectively the plans), pursuant to Rule 12b-1 of the 1940 Act. The plans provide that the A Class will pay ACIS an annual distribution and service fee of 0.25%. The plans provide that the C Class will pay ACIS an annual distribution and service fee of 1.00%, of which 0.25% is paid for individual shareholder services and 0.75% is paid for distribution services. The plans provide that the R Class will pay ACIS an annual distribution and service fee of 0.50%. The fees are computed and accrued daily based on each class’s daily net assets and paid monthly in arrears. The fees are used to pay financial intermediaries for distribution and individual shareholder services. Fees incurred under the plans during the period ended December 31, 2019 are detailed in the Statement of Operations.
Directors' Fees and Expenses — The Board of Directors is responsible for overseeing the investment advisor’s management and operations of the fund. The directors receive detailed information about the fund and its investment advisor regularly throughout the year, and meet at least quarterly with management of the investment advisor to review reports about fund operations. The fund’s officers do not receive compensation from the fund.
Interfund Transactions — The fund may enter into security transactions with other American Century Investments funds and other client accounts of the investment advisor, in accordance with the 1940 Act rules and procedures adopted by the Board of Directors. The rules and procedures require, among other things, that these transactions be effected at the independent current market price of the security. During the period, the interfund purchases and sales were $12,331,139 and $10,306,988, respectively. The effect of interfund transactions on the Statement of Operations was $(731,593) in net realized gain (loss) on investment transactions.
17
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the period ended December 31, 2019 were $1,025,806,582 and $1,178,083,805, respectively.
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended December 31, 2019 | Year ended June 30, 2019 | |||||||||
Shares | Amount | Shares | Amount | |||||||
Investor Class/Shares Authorized | 370,000,000 | 370,000,000 | ||||||||
Sold | 1,025,794 | $ | 38,437,761 | 3,531,134 | $ | 132,444,830 | ||||
Issued in reinvestment of distributions | 1,316,274 | 50,752,346 | 5,087,471 | 176,541,937 | ||||||
Redeemed | (2,873,803 | ) | (108,251,877 | ) | (6,474,475 | ) | (243,095,222 | ) | ||
(531,735 | ) | (19,061,770 | ) | 2,144,130 | 65,891,545 | |||||
I Class/Shares Authorized | 40,000,000 | 40,000,000 | ||||||||
Sold | 634,966 | 23,664,477 | 2,716,347 | 98,765,501 | ||||||
Issued in reinvestment of distributions | 243,632 | 9,403,542 | 814,500 | 28,358,276 | ||||||
Redeemed | (1,229,404 | ) | (46,150,433 | ) | (2,143,883 | ) | (81,643,945 | ) | ||
(350,806 | ) | (13,082,414 | ) | 1,386,964 | 45,479,832 | |||||
A Class/Shares Authorized | 50,000,000 | 50,000,000 | ||||||||
Sold | 299,932 | 11,319,983 | 799,389 | 30,028,792 | ||||||
Issued in reinvestment of distributions | 102,451 | 3,944,406 | 422,928 | 14,629,031 | ||||||
Redeemed | (686,552 | ) | (25,810,046 | ) | (1,004,009 | ) | (37,933,837 | ) | ||
(284,169 | ) | (10,545,657 | ) | 218,308 | 6,723,986 | |||||
C Class/Shares Authorized | 15,000,000 | 15,000,000 | ||||||||
Sold | 15,740 | 598,063 | 94,306 | 3,495,190 | ||||||
Issued in reinvestment of distributions | 5,178 | 199,442 | 22,498 | 772,317 | ||||||
Redeemed | (38,723 | ) | (1,451,781 | ) | (85,258 | ) | (3,171,487 | ) | ||
(17,805 | ) | (654,276 | ) | 31,546 | 1,096,020 | |||||
R Class/Shares Authorized | 20,000,000 | 20,000,000 | ||||||||
Sold | 52,589 | 1,971,605 | 269,308 | 9,978,276 | ||||||
Issued in reinvestment of distributions | 9,113 | 351,658 | 31,358 | 1,083,316 | ||||||
Redeemed | (253,882 | ) | (9,584,568 | ) | (269,160 | ) | (10,039,390 | ) | ||
(192,180 | ) | (7,261,305 | ) | 31,506 | 1,022,202 | |||||
R5 Class/Shares Authorized | 50,000,000 | 50,000,000 | ||||||||
Sold | 33,012 | 1,239,292 | 336,733 | 13,331,436 | ||||||
Issued in reinvestment of distributions | 11,725 | 452,600 | 42,842 | 1,482,829 | ||||||
Redeemed | (37,681 | ) | (1,409,944 | ) | (117,421 | ) | (4,262,844 | ) | ||
7,056 | 281,948 | 262,154 | 10,551,421 | |||||||
Net increase (decrease) | (1,369,639 | ) | $ | (50,323,474 | ) | 4,074,608 | $ | 130,765,006 |
18
6. Fair Value Measurements
The fund’s investments valuation process is based on several considerations and may use multiple inputs to determine the fair value of the investments held by the fund. In conformity with accounting principles generally accepted in the United States of America, the inputs used to determine a valuation are classified into three broad levels.
• | Level 1 valuation inputs consist of unadjusted quoted prices in an active market for identical investments. |
• | Level 2 valuation inputs consist of direct or indirect observable market data (including quoted prices for comparable investments, evaluations of subsequent market events, interest rates, prepayment speeds, credit risk, etc.). These inputs also consist of quoted prices for identical investments initially expressed in local currencies that are adjusted through translation into U.S. dollars. |
• | Level 3 valuation inputs consist of unobservable data (including a fund’s own assumptions). |
The level classification is based on the lowest level input that is significant to the fair valuation measurement. The valuation inputs are not necessarily an indication of the risks associated with investing in these securities or other financial instruments.
The following is a summary of the level classifications as of period end. The Schedule of Investments provides additional information on the fund’s portfolio holdings.
Level 1 | Level 2 | Level 3 | ||||||
Assets | ||||||||
Investment Securities | ||||||||
Common Stocks | $ | 2,200,888,130 | — | — | ||||
Temporary Cash Investments | 39,333 | $ | 82,222,588 | — | ||||
$ | 2,200,927,463 | $ | 82,222,588 | — | ||||
Other Financial Instruments | ||||||||
Futures Contracts | $ | 1,145,252 | — | — |
7. Derivative Instruments
Equity Price Risk — The fund is subject to equity price risk in the normal course of pursuing its investment objectives. A fund may enter into futures contracts based on an equity index in order to manage its exposure to changes in market conditions. A fund may purchase futures contracts to gain exposure to increases in market value or sell futures contracts to protect against a decline in market value. Upon entering into a futures contract, a fund is required to deposit either cash or securities in an amount equal to a certain percentage of the contract value (initial margin). Subsequent payments (variation margin) are made or received daily, in cash, by a fund. The variation margin is equal to the daily change in the contract value and is recorded as unrealized gains and losses. A fund recognizes a realized gain or loss when the contract is closed or expires. Net realized and unrealized gains or losses occurring during the holding period of futures contracts are a component of net realized gain (loss) on futures contract transactions and change in net unrealized appreciation (depreciation) on futures contracts, respectively. One of the risks of entering into futures contracts is the possibility that the change in value of the contract may not correlate with the changes in value of the underlying securities. The fund's average notional exposure to equity price risk derivative instruments held during the period was $13,433 futures contracts purchased.
The value of equity price risk derivative instruments as of December 31, 2019, is disclosed on the Statement of Assets and Liabilities as an asset of $146,685 in receivable for variation margin on futures contracts*. For the six months ended December 31, 2019, the effect of equity price risk derivative instruments on the Statement of Operations was $3,847,840 in net realized gain (loss) on futures contract transactions and $1,145,252 in change in net unrealized appreciation (depreciation) on futures contracts.
* Included in the unrealized appreciation (depreciation) on futures contracts as reported in the Schedule of Investments.
19
8. Federal Tax Information
The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
As of period end, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $ | 1,713,984,339 | |
Gross tax appreciation of investments | $ | 585,851,367 | |
Gross tax depreciation of investments | (16,685,655 | ) | |
Net tax appreciation (depreciation) of investments | $ | 569,165,712 |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales.
As of June 30, 2019, the fund had post-October capital loss deferrals of $(10,275,541), which represent certain qualified losses that the fund has elected to treat as having been incurred in the following fiscal year for federal income tax purposes.
20
Financial Highlights |
For a Share Outstanding Throughout the Years Ended June 30 (except as noted) | |||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||
Income From Investment Operations: | Distributions From: | Ratio to Average Net Assets of: | |||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Net Investment Income (Loss) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
Investor Class | |||||||||||||||
2019(3) | $36.82 | 0.40 | 2.86 | 3.26 | (0.44) | (0.75) | (1.19) | $38.89 | 8.85% | 0.67%(4) | 2.09%(4) | 47% | $1,782,445 | ||
2019 | $39.61 | 0.78 | 0.63 | 1.41 | (0.73) | (3.47) | (4.20) | $36.82 | 4.43% | 0.67% | 2.07% | 72% | $1,707,536 | ||
2018 | $37.90 | 0.93 | 4.40 | 5.33 | (0.88) | (2.74) | (3.62) | $39.61 | 14.32% | 0.66% | 2.33% | 77% | $1,751,738 | ||
2017 | $33.91 | 0.79 | 4.55 | 5.34 | (0.76) | (0.59) | (1.35) | $37.90 | 15.95% | 0.67% | 2.16% | 81% | $1,691,048 | ||
2016 | $36.78 | 0.82 | (0.61) | 0.21 | (0.84) | (2.24) | (3.08) | $33.91 | 1.00% | 0.68% | 2.40% | 79% | $1,551,664 | ||
2015 | $38.52 | 0.81 | 0.29 | 1.10 | (0.79) | (2.05) | (2.84) | $36.78 | 2.87% | 0.67% | 2.11% | 79% | $1,655,693 | ||
I Class | |||||||||||||||
2019(3) | $36.88 | 0.43 | 2.86 | 3.29 | (0.48) | (0.75) | (1.23) | $38.94 | 8.95% | 0.47%(4) | 2.29%(4) | 47% | $310,075 | ||
2019 | $39.66 | 0.85 | 0.65 | 1.50 | (0.81) | (3.47) | (4.28) | $36.88 | 4.65% | 0.47% | 2.27% | 72% | $306,583 | ||
2018 | $37.94 | 0.99 | 4.43 | 5.42 | (0.96) | (2.74) | (3.70) | $39.66 | 14.55% | 0.46% | 2.53% | 77% | $274,687 | ||
2017 | $33.95 | 0.86 | 4.55 | 5.41 | (0.83) | (0.59) | (1.42) | $37.94 | 16.16% | 0.47% | 2.36% | 81% | $181,620 | ||
2016 | $36.82 | 0.88 | (0.60) | 0.28 | (0.91) | (2.24) | (3.15) | $33.95 | 1.21% | 0.48% | 2.60% | 79% | $127,626 | ||
2015 | $38.55 | 0.88 | 0.30 | 1.18 | (0.86) | (2.05) | (2.91) | $36.82 | 3.10% | 0.47% | 2.31% | 79% | $125,872 | ||
A Class | |||||||||||||||
2019(3) | $36.76 | 0.35 | 2.84 | 3.19 | (0.38) | (0.75) | (1.13) | $38.82 | 8.72% | 0.92%(4) | 1.84%(4) | 47% | $149,811 | ||
2019 | $39.55 | 0.69 | 0.63 | 1.32 | (0.64) | (3.47) | (4.11) | $36.76 | 4.18% | 0.92% | 1.82% | 72% | $152,312 | ||
2018 | $37.85 | 0.83 | 4.39 | 5.22 | (0.78) | (2.74) | (3.52) | $39.55 | 14.03% | 0.91% | 2.08% | 77% | $155,233 | ||
2017 | $33.87 | 0.69 | 4.55 | 5.24 | (0.67) | (0.59) | (1.26) | $37.85 | 15.65% | 0.92% | 1.91% | 81% | $156,863 | ||
2016 | $36.74 | 0.73 | (0.61) | 0.12 | (0.75) | (2.24) | (2.99) | $33.87 | 0.75% | 0.93% | 2.15% | 79% | $205,390 | ||
2015 | $38.48 | 0.71 | 0.29 | 1.00 | (0.69) | (2.05) | (2.74) | $36.74 | 2.62% | 0.92% | 1.86% | 79% | $239,515 |
For a Share Outstanding Throughout the Years Ended June 30 (except as noted) | |||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||
Income From Investment Operations: | Distributions From: | Ratio to Average Net Assets of: | |||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Net Investment Income (Loss) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
C Class | |||||||||||||||
2019(3) | $36.68 | 0.20 | 2.84 | 3.04 | (0.23) | (0.75) | (0.98) | $38.74 | 8.30% | 1.67%(4) | 1.09%(4) | 47% | $8,930 | ||
2019 | $39.48 | 0.41 | 0.63 | 1.04 | (0.37) | (3.47) | (3.84) | $36.68 | 3.40% | 1.67% | 1.07% | 72% | $9,107 | ||
2018 | $37.79 | 0.53 | 4.39 | 4.92 | (0.49) | (2.74) | (3.23) | $39.48 | 13.18% | 1.66% | 1.33% | 77% | $8,557 | ||
2017 | $33.82 | 0.42 | 4.53 | 4.95 | (0.39) | (0.59) | (0.98) | $37.79 | 14.77% | 1.67% | 1.16% | 81% | $7,368 | ||
2016 | $36.68 | 0.47 | (0.60) | (0.13) | (0.49) | (2.24) | (2.73) | $33.82 | 0.01% | 1.68% | 1.40% | 79% | $6,734 | ||
2015 | $38.42 | 0.42 | 0.29 | 0.71 | (0.40) | (2.05) | (2.45) | $36.68 | 1.86% | 1.67% | 1.11% | 79% | $8,195 | ||
R Class | |||||||||||||||
2019(3) | $36.81 | 0.30 | 2.84 | 3.14 | (0.33) | (0.75) | (1.08) | $38.87 | 8.56% | 1.17%(4) | 1.59%(4) | 47% | $18,591 | ||
2019 | $39.59 | 0.60 | 0.64 | 1.24 | (0.55) | (3.47) | (4.02) | $36.81 | 3.95% | 1.17% | 1.57% | 72% | $24,676 | ||
2018 | $37.89 | 0.73 | 4.40 | 5.13 | (0.69) | (2.74) | (3.43) | $39.59 | 13.73% | 1.16% | 1.83% | 77% | $25,298 | ||
2017 | $33.91 | 0.60 | 4.55 | 5.15 | (0.58) | (0.59) | (1.17) | $37.89 | 15.34% | 1.17% | 1.66% | 81% | $28,052 | ||
2016 | $36.77 | 0.65 | (0.60) | 0.05 | (0.67) | (2.24) | (2.91) | $33.91 | 0.52% | 1.18% | 1.90% | 79% | $23,290 | ||
2015 | $38.51 | 0.60 | 0.31 | 0.91 | (0.60) | (2.05) | (2.65) | $36.77 | 2.36% | 1.17% | 1.61% | 79% | $15,663 | ||
R5 Class | |||||||||||||||
2019(3) | $36.89 | 0.43 | 2.86 | 3.29 | (0.48) | (0.75) | (1.23) | $38.95 | 8.95% | 0.47%(4) | 2.29%(4) | 47% | $14,652 | ||
2019 | $39.66 | 0.88 | 0.63 | 1.51 | (0.81) | (3.47) | (4.28) | $36.89 | 4.68% | 0.47% | 2.27% | 72% | $13,615 | ||
2018 | $37.95 | 0.91 | 4.50 | 5.41 | (0.96) | (2.74) | (3.70) | $39.66 | 14.52% | 0.46% | 2.53% | 77% | $4,241 | ||
2017(5) | $37.51 | 0.20 | 0.43 | 0.63 | (0.19) | — | (0.19) | $37.95 | 1.68% | 0.47%(4) | 2.37%(4) | 81%(6) | $175 |
Notes to Financial Highlights |
(1) | Computed using average shares outstanding throughout the period. |
(2) | Total returns are calculated based on the net asset value of the last business day and do not reflect applicable sales charges, if any. Total returns for periods less than one year are not annualized. |
(3) | Six months ended December 31, 2019 (unaudited). |
(4) | Annualized. |
(5) | April 10, 2017 (commencement of sale) through June 30, 2017. |
(6) | Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended June 30, 2017. |
See Notes to Financial Statements.
Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain retirement accounts are subject to federal income tax withholding, unless you elect not to have withholding apply*. Tax will be withheld on the total amount withdrawn even though you may be receiving amounts that are not subject to withholding, such as nondeductible contributions. In such case, excess amounts of withholding could occur. You may adjust your withholding election so that a greater or lesser amount will be withheld.
If you don’t want us to withhold on this amount, you must notify us to not withhold the federal income tax. You may notify us in writing or in certain situations by telephone or through other electronic means. For systematic withdrawals, your withholding election will remain in effect until revoked or changed by filing a new election. You have the right to revoke your election at any time and change your withholding percentage for future distributions.
Remember, even if you elect not to have income tax withheld, you are liable for paying income tax on the taxable portion of your withdrawal. If you elect not to have income tax withheld or you don’t have enough income tax withheld, you may be responsible for payment of estimated tax. You may incur penalties under the estimated tax rules if your withholding and estimated tax payments are not sufficient. You can reduce or defer the income tax on a distribution by directly or indirectly rolling such distribution over to another IRA or eligible plan. You should consult your tax advisor for additional information.
State tax will be withheld if, at the time of your distribution, your address is within one of the mandatory withholding states and you have federal income tax withheld (or as otherwise required by state law). State taxes will be withheld from your distribution in accordance with the respective state rules.
*Some 403(b), 457 and qualified retirement plan distributions may be subject to 20% mandatory withholding, as they are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
Descriptions of the principles and policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund are available without charge, upon request, by calling 1-800-345-2021 or visiting American Century Investments’ website at americancentury.com/proxy. A description of the policies is also available on the Securities and Exchange Commission’s website at sec.gov. Information regarding how the investment advisor voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on americancentury.com/proxy. It is also available at sec.gov.
Quarterly Portfolio Disclosure
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-Q or as an exhibit to its reports on Form N-PORT. The fund’s Forms N-Q and Form N-PORT reports are available on the SEC’s website at sec.gov. The fund also makes its complete schedule of portfolio holdings for the most recent quarter of its fiscal year available on its website at americancentury.com and, upon request, by calling 1-800-345-2021.
24
Contact Us | americancentury.com | |
Automated Information Line | 1-800-345-8765 | |
Investor Services Representative | 1-800-345-2021 or 816-531-5575 | |
Investors Using Advisors | 1-800-378-9878 | |
Business, Not-For-Profit, Employer-Sponsored Retirement Plans | 1-800-345-3533 | |
Banks and Trust Companies, Broker-Dealers, Financial Professionals, Insurance Companies | 1-800-345-6488 | |
Telecommunications Relay Service for the Deaf | 711 | |
American Century Quantitative Equity Funds, Inc. | ||
Investment Advisor: American Century Investment Management, Inc. Kansas City, Missouri | ||
This report and the statements it contains are submitted for the general information of our shareholders. The report is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus. | ||
©2020 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-91456 2002 |
Semiannual Report | |
December 31, 2019 | |
International Core Equity Fund | |
Investor Class (ACIMX) | |
I Class (ACIUX) | |
A Class (ACIQX) | |
C Class (ACIKX) | |
R Class (ACIRX) |
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the fund’s shareholder reports like this one will no longer be sent by mail, unless you specifically request paper copies of the reports from the fund or from your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the fund or your financial intermediary electronically by calling or sending an email request to your appropriate contacts as listed on the back cover of this report.
You may elect to receive all future reports in paper free of charge. You can inform the fund or your financial intermediary that you wish to continue receiving paper copies of your shareholder reports by calling or sending an email request to your appropriate contacts as listed on the back cover of this report. Your election to receive reports in paper will apply to all funds held with the fund complex/your financial intermediary.
Table of Contents |
Any opinions expressed in this report reflect those of the author as of the date of the report, and do not necessarily represent the opinions of American Century Investments® or any other person in the American Century Investments organization. Any such opinions are subject to change at any time based upon market or other conditions and American Century Investments disclaims any responsibility to update such opinions. These opinions may not be relied upon as investment advice and, because investment decisions made by American Century Investments funds are based on numerous factors, may not be relied upon as an indication of trading intent on behalf of any American Century Investments fund. Security examples are used for representational purposes only and are not intended as recommendations to purchase or sell securities. Performance information for comparative indices and securities is provided to American Century Investments by third party vendors. To the best of American Century Investments’ knowledge, such information is accurate at the time of printing.
President’s Letter |
Jonathan Thomas
Dear Investor:
Thank you for reviewing this semiannual report for the period ended December 31, 2019. It provides a market overview (below), followed by a schedule of fund investments and other financial information. For additional commentary and information on fund performance, plus other investment insights, please visit our website, americancentury.com.
All Asset Classes Advanced
From higher-quality government bonds to higher-risk stocks and commodities, all major U.S. and global asset classes posted gains for the six-month period. U.S. stocks, as measured by the S&P 500 Index, advanced almost 11% for the period, outpacing the nearly 9% return for global stocks (MSCI ACWI). Income-oriented assets, including U.S. and global bonds and dividend-paying stocks, generally posted more-modest gains.
A key policy pivot from the Federal Reserve (Fed) helped set the stage for the rally. After abruptly ending its three-year rate-hike campaign in early 2019, the Fed cut rates in July. Ongoing concerns about global economic risks, including trade policy uncertainty, prompted this first Fed easing move in 10 years. And with global risks still looming, the Fed cut rates again in September and October before pausing. Similarly, the European Central Bank cut a key deposit rate and relaunched quantitative easing in a move to spark growth. These efforts helped push global yields lower, which aided performance among interest rate-sensitive assets.
Accommodative central bank policy and a lower interest rate backdrop also aided performance in equity markets. Additionally, modestly improving economic and earnings data calmed investors’ earlier worries and nudged stock returns higher. In December, a series of upbeat data helped stocks end the period on a high note. U.K. Prime Minister Boris Johnson and his Conservative Party won a decisive election victory, which resolved some lingering Brexit uncertainty. On the trade front, the U.S. House of Representatives approved the U.S.-Mexico-Canada Agreement, and the U.S. and China reached a phase 1 deal, further fueling investor optimism.
Looking ahead, we expect volatility to remain a factor as investors react to global growth trends, ongoing U.S.-China trade negotiations, central bank policy and geopolitical forces. We believe this scenario underscores the importance of using professionally managed portfolios in pursuit of investment goals. We appreciate your continued trust and confidence in us.
Sincerely,
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
2
Fund Characteristics |
DECEMBER 31, 2019 | |
Top Ten Holdings | % of net assets |
iShares MSCI EAFE ETF | 4.9% |
iShares MSCI Japan ETF | 4.3% |
Nestle SA | 3.2% |
Royal Dutch Shell plc, B Shares | 2.8% |
Roche Holding AG | 2.6% |
Allianz SE | 1.9% |
GlaxoSmithKline plc | 1.8% |
SAP SE | 1.8% |
L'Oreal SA | 1.6% |
BHP Group plc | 1.6% |
Investments by Country | % of net assets |
Japan | 21.6% |
United Kingdom | 14.3% |
Switzerland | 10.6% |
France | 9.4% |
Germany | 5.9% |
Spain | 4.6% |
Australia | 4.5% |
Sweden | 3.2% |
Singapore | 3.1% |
Denmark | 2.3% |
Hong Kong | 2.1% |
New Zealand | 2.0% |
Other Countries | 5.9% |
Exchange-Traded Funds* | 9.2% |
Cash and Equivalents** | 1.3% |
* Category may increase exposure to the countries indicated. The Schedule of Investments provides additional information on the fund's portfolio holdings. | |
** Includes temporary cash investments, temporary cash investments - securities lending collateral and other assets and liabilities. | |
Types of Investments in Portfolio | % of net assets |
Common Stocks | 89.5% |
Exchange-Traded Funds | 9.2% |
Total Equity Exposure | 98.7% |
Temporary Cash Investments | 1.0% |
Temporary Cash Investments - Securities Lending Collateral | 1.2% |
Other Assets and Liabilities | (0.9)% |
3
Shareholder Fee Example |
Fund shareholders may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption/exchange fees; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in your fund and to compare these costs with the ongoing cost of investing in other mutual funds.
The example is based on an investment of $1,000 made at the beginning of the period and held for the entire period from July 1, 2019 to December 31, 2019.
Actual Expenses
The table provides information about actual account values and actual expenses for each class. You may use the information, together with the amount you invested, to estimate the expenses that you paid over the period. First, identify the share class you own. Then simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
If you hold Investor Class shares of any American Century Investments fund, or I Class shares of the American Century Diversified Bond Fund, in an American Century Investments account (i.e., not a financial intermediary or retirement plan account), American Century Investments may charge you a $12.50 semiannual account maintenance fee if the value of those shares is less than $10,000. We will redeem shares automatically in one of your accounts to pay the $12.50 fee. In determining your total eligible investment amount, we will include your investments in all personal accounts (including American Century Investments Brokerage accounts) registered under your Social Security number. Personal accounts include individual accounts, joint accounts, UGMA/UTMA accounts, personal trusts, Coverdell Education Savings Accounts and IRAs (including traditional, Roth, Rollover, SEP-, SARSEP- and SIMPLE-IRAs), and certain other retirement accounts. If you have only business, business retirement, employer-sponsored or American Century Investments Brokerage accounts, you are currently not subject to this fee. If you are subject to the Account Maintenance Fee, your account value could be reduced by the fee amount.
Hypothetical Example for Comparison Purposes
The table also provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio of each class of your fund and an assumed rate of return of 5% per year before expenses, which is not the actual return of a fund’s share class. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) or redemption/exchange fees. Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
4
Beginning Account Value 7/1/19 | Ending Account Value 12/31/19 | Expenses Paid During Period(1) 7/1/19 - 12/31/19 | Annualized Expense Ratio(1) | |
Actual | ||||
Investor Class | $1,000 | $1,038.30 | $5.89 | 1.15% |
I Class | $1,000 | $1,039.10 | $4.87 | 0.95% |
A Class | $1,000 | $1,036.80 | $7.17 | 1.40% |
C Class | $1,000 | $1,033.80 | $10.99 | 2.15% |
R Class | $1,000 | $1,035.50 | $8.44 | 1.65% |
Hypothetical | ||||
Investor Class | $1,000 | $1,019.36 | $5.84 | 1.15% |
I Class | $1,000 | $1,020.36 | $4.82 | 0.95% |
A Class | $1,000 | $1,018.10 | $7.10 | 1.40% |
C Class | $1,000 | $1,014.33 | $10.89 | 2.15% |
R Class | $1,000 | $1,016.84 | $8.36 | 1.65% |
(1) | Expenses are equal to the class's annualized expense ratio listed in the table above, multiplied by the average account value over the period, multiplied by 184, the number of days in the most recent fiscal half-year, divided by 366, to reflect the one-half year period. Annualized expense ratio reflects actual expenses, including any applicable fee waivers or expense reimbursements and excluding any acquired fund fees and expenses. |
5
Schedule of Investments |
DECEMBER 31, 2019 (UNAUDITED)
Shares | Value | |||
COMMON STOCKS — 89.5% | ||||
Australia — 4.5% | ||||
Aristocrat Leisure Ltd. | 3,009 | $ | 71,363 | |
Aurizon Holdings Ltd. | 60,091 | 221,064 | ||
Australia & New Zealand Banking Group Ltd. | 15,241 | 264,044 | ||
Coca-Cola Amatil Ltd. | 10,394 | 80,819 | ||
Fortescue Metals Group Ltd. | 21,831 | 164,542 | ||
Telstra Corp. Ltd. | 74,650 | 185,975 | ||
987,807 | ||||
Austria — 0.7% | ||||
OMV AG | 2,807 | 157,690 | ||
Denmark — 2.3% | ||||
Carlsberg A/S, B Shares | 627 | 93,533 | ||
Novo Nordisk A/S, B Shares | 5,702 | 330,714 | ||
Pandora A/S | 1,884 | 81,954 | ||
506,201 | ||||
Finland — 1.3% | ||||
Kone Oyj, B Shares | 4,285 | 280,138 | ||
France — 9.4% | ||||
Dassault Systemes SE | 493 | 81,318 | ||
Eiffage SA | 495 | 56,722 | ||
Hermes International | 376 | 281,377 | ||
Kering SA | 483 | 318,187 | ||
L'Oreal SA | 1,208 | 358,745 | ||
Peugeot SA | 8,816 | 211,137 | ||
Safran SA | 1,876 | 290,807 | ||
Schneider Electric SE | 1,908 | 196,272 | ||
TOTAL SA | 4,562 | 252,106 | ||
2,046,671 | ||||
Germany — 5.9% | ||||
adidas AG | 1,029 | 334,432 | ||
Allianz SE | 1,661 | 407,295 | ||
Carl Zeiss Meditec AG | 1,247 | 159,042 | ||
SAP SE | 2,905 | 391,506 | ||
1,292,275 | ||||
Hong Kong — 2.1% | ||||
Hang Seng Bank Ltd. | 10,000 | 206,938 | ||
Hong Kong Exchanges & Clearing Ltd. | 3,800 | 123,164 | ||
Sands China Ltd. | 22,800 | 122,267 | ||
452,369 | ||||
Israel — 1.4% | ||||
CyberArk Software Ltd.(1) | 1,600 | 186,528 | ||
Wix.com Ltd.(1) | 1,000 | 122,380 | ||
308,908 |
6
Shares | Value | |||
Italy — 0.8% | ||||
Ferrari NV | 1,107 | $ | 183,614 | |
Japan — 21.6% | ||||
Advantest Corp. | 1,300 | 73,552 | ||
Amada Holdings Co. Ltd. | 20,900 | 237,357 | ||
Astellas Pharma, Inc. | 16,100 | 275,019 | ||
Bandai Namco Holdings, Inc. | 1,200 | 72,816 | ||
Brother Industries Ltd. | 10,900 | 224,437 | ||
Chugai Pharmaceutical Co. Ltd. | 2,700 | 248,681 | ||
FANUC Corp. | 200 | 36,938 | ||
Hitachi Ltd. | 1,500 | 63,183 | ||
Hoya Corp. | 1,000 | 95,480 | ||
KDDI Corp. | 4,300 | 127,924 | ||
Keyence Corp. | 200 | 70,791 | ||
Mitsubishi UFJ Financial Group, Inc. | 15,800 | 85,393 | ||
Nexon Co. Ltd.(1) | 9,900 | 130,947 | ||
Nintendo Co. Ltd. | 500 | 201,823 | ||
Nippon Telegraph & Telephone Corp. | 2,000 | 50,660 | ||
Nitori Holdings Co. Ltd. | 600 | 94,807 | ||
NTT DOCOMO, Inc. | 9,900 | 276,659 | ||
Recruit Holdings Co. Ltd. | 4,200 | 158,047 | ||
Santen Pharmaceutical Co. Ltd. | 2,400 | 45,761 | ||
Sekisui House Ltd. | 6,100 | 130,272 | ||
Shin-Etsu Chemical Co. Ltd. | 2,500 | 274,089 | ||
Shionogi & Co. Ltd. | 4,000 | 247,133 | ||
Softbank Corp. | 11,000 | 147,412 | ||
SoftBank Group Corp. | 400 | 17,415 | ||
Sony Corp. | 3,600 | 245,040 | ||
Tokyo Electron Ltd. | 1,200 | 263,703 | ||
Toyota Motor Corp. | 3,000 | 211,229 | ||
Trend Micro, Inc. | 2,700 | 138,168 | ||
Tsuruha Holdings, Inc. | 1,900 | 243,765 | ||
Welcia Holdings Co. Ltd. | 3,700 | 235,683 | ||
4,724,184 | ||||
Netherlands — 0.6% | ||||
Coca-Cola European Partners plc | 1,700 | 86,496 | ||
NN Group NV | 1,078 | 40,991 | ||
127,487 | ||||
New Zealand — 2.0% | ||||
a2 Milk Co. Ltd.(1) | 20,716 | 209,687 | ||
Meridian Energy Ltd. | 70,663 | 237,960 | ||
447,647 | ||||
Norway — 1.1% | ||||
Aker BP ASA | 6,981 | 229,033 | ||
Singapore — 3.1% | ||||
Oversea-Chinese Banking Corp. Ltd. | 33,300 | 272,285 | ||
Singapore Telecommunications Ltd. | 110,200 | 276,350 |
7
Shares | Value | |||
United Overseas Bank Ltd. | 6,800 | $ | 133,755 | |
682,390 | ||||
Spain — 4.6% | ||||
Banco Bilbao Vizcaya Argentaria SA | 45,668 | 257,360 | ||
Iberdrola SA | 30,208 | 311,113 | ||
Industria de Diseno Textil SA | 6,894 | 244,206 | ||
Telefonica SA | 27,367 | 191,275 | ||
1,003,954 | ||||
Sweden — 3.2% | ||||
Hennes & Mauritz AB, B Shares(2) | 12,470 | 253,487 | ||
Kinnevik AB, B Shares | 6,787 | 166,084 | ||
Sandvik AB | 11,666 | 228,008 | ||
Telefonaktiebolaget LM Ericsson, B Shares | 6,832 | 59,864 | ||
707,443 | ||||
Switzerland — 10.6% | ||||
Geberit AG | 451 | 253,185 | ||
Nestle SA | 6,426 | 696,171 | ||
Novartis AG | 2,957 | 280,153 | ||
Partners Group Holding AG | 241 | 220,869 | ||
Roche Holding AG | 1,759 | 570,370 | ||
Zurich Insurance Group AG | 745 | 305,554 | ||
2,326,302 | ||||
United Kingdom — 14.3% | ||||
BHP Group plc | 15,053 | 355,551 | ||
BP plc | 4,287 | 26,911 | ||
Burberry Group plc | 7,400 | 216,566 | ||
Compass Group plc | 5,903 | 147,875 | ||
GlaxoSmithKline plc | 17,106 | 402,432 | ||
HSBC Holdings plc | 26,172 | 205,533 | ||
Intertek Group plc | 2,235 | 173,464 | ||
Legal & General Group plc | 66,619 | 268,393 | ||
RELX plc | 12,234 | 308,629 | ||
Royal Dutch Shell plc, B Shares | 20,278 | 604,235 | ||
Sage Group plc (The) | 20,480 | 203,498 | ||
Unilever plc | 691 | 39,559 | ||
Vodafone Group plc | 90,404 | 175,508 | ||
3,128,154 | ||||
TOTAL COMMON STOCKS (Cost $17,573,107) | 19,592,267 | |||
EXCHANGE-TRADED FUNDS — 9.2% | ||||
iShares MSCI EAFE ETF | 15,600 | 1,083,264 | ||
iShares MSCI Japan ETF | 15,900 | 941,916 | ||
TOTAL EXCHANGE-TRADED FUNDS (Cost $1,988,905) | 2,025,180 | |||
TEMPORARY CASH INVESTMENTS — 1.0% | ||||
Repurchase Agreement, BMO Capital Markets Corp., (collateralized by various U.S. Treasury obligations, 2.75% - 3.75%, 9/15/21 - 11/15/43, valued at $190,256), in a joint trading account at 1.35%, dated 12/31/19, due 1/2/20 (Delivery value $186,257) | 186,243 |
8
Shares | Value | |||
State Street Institutional U.S. Government Money Market Fund, Premier Class | 40,563 | $ | 40,563 | |
TOTAL TEMPORARY CASH INVESTMENTS (Cost $226,806) | 226,806 | |||
TEMPORARY CASH INVESTMENTS - SECURITIES LENDING COLLATERAL(3) — 1.2% | ||||
State Street Navigator Securities Lending Government Money Market Portfolio (Cost $260,897) | 260,897 | 260,897 | ||
TOTAL INVESTMENT SECURITIES — 100.9% (Cost $20,049,715) | 22,105,150 | |||
OTHER ASSETS AND LIABILITIES — (0.9)% | (205,788 | ) | ||
TOTAL NET ASSETS — 100.0% | $ | 21,899,362 |
MARKET SECTOR DIVERSIFICATION | ||
(as a % of net assets) | ||
Consumer Discretionary | 14.7 | % |
Financials | 13.6 | % |
Health Care | 12.1 | % |
Industrials | 11.1 | % |
Consumer Staples | 9.3 | % |
Information Technology | 8.5 | % |
Communication Services | 8.2 | % |
Energy | 5.8 | % |
Materials | 3.7 | % |
Utilities | 2.5 | % |
Exchange-Traded Funds | 9.2 | % |
Cash and Equivalents* | 1.3 | % |
* Includes temporary cash investments, temporary cash investments - securities lending collateral and other assets and liabilities.
(1) | Non-income producing. |
(2) | Security, or a portion thereof, is on loan. At the period end, the aggregate value of securities on loan was $248,405. The amount of securities on loan indicated may not correspond with the securities on loan identified because securities with pending sales are in the process of recall from the brokers. |
(3) | Investment of cash collateral from securities on loan. At the period end, the aggregate market value of the collateral held by the fund was $260,897. |
See Notes to Financial Statements.
9
Statement of Assets and Liabilities |
DECEMBER 31, 2019 (UNAUDITED) | |||
Assets | |||
Investment securities, at value (cost of $19,788,818) — including $248,405 of securities on loan | $ | 21,844,253 | |
Investment made with cash collateral received for securities on loan, at value (cost of $260,897) | 260,897 | ||
Total investment securities, at value (cost of $20,049,715) | 22,105,150 | ||
Foreign currency holdings, at value (cost of $59) | 60 | ||
Receivable for capital shares sold | 26,851 | ||
Dividends and interest receivable | 91,309 | ||
Securities lending receivable | 180 | ||
Other assets | 895 | ||
22,224,445 | |||
Liabilities | |||
Payable for collateral received for securities on loan | 260,897 | ||
Payable for capital shares redeemed | 42,449 | ||
Accrued management fees | 20,552 | ||
Distribution and service fees payable | 1,185 | ||
325,083 | |||
Net Assets | $ | 21,899,362 | |
Net Assets Consist of: | |||
Capital (par value and paid-in surplus) | $ | 22,631,236 | |
Distributable earnings | (731,874 | ) | |
$ | 21,899,362 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | ||||
Investor Class, $0.01 Par Value | $13,882,518 | 1,587,830 | $8.74 | |||
I Class, $0.01 Par Value | $3,422,183 | 390,877 | $8.76 | |||
A Class, $0.01 Par Value | $3,953,159 | 451,018 | $8.76* | |||
C Class, $0.01 Par Value | $250,991 | 28,706 | $8.74 | |||
R Class, $0.01 Par Value | $390,511 | 44,654 | $8.75 |
*Maximum offering price $9.29 (net asset value divided by 0.9425).
See Notes to Financial Statements.
10
Statement of Operations |
FOR THE SIX MONTHS ENDED DECEMBER 31, 2019 (UNAUDITED) | |||
Investment Income (Loss) | |||
Income: | |||
Dividends (net of foreign taxes withheld of $18,648) | $ | 362,319 | |
Interest | 2,417 | ||
Securities lending, net | 1,238 | ||
365,974 | |||
Expenses: | |||
Management fees | 140,408 | ||
Distribution and service fees: | |||
A Class | 4,712 | ||
C Class | 1,369 | ||
R Class | 1,009 | ||
Directors' fees and expenses | 988 | ||
Other expenses | 655 | ||
149,141 | |||
Net investment income (loss) | 216,833 | ||
Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investment transactions (net of foreign tax expenses paid (refunded) of $(895)) | (143,969 | ) | |
Foreign currency translation transactions | 1,394 | ||
(142,575 | ) | ||
Change in net unrealized appreciation (depreciation) on: | |||
Investments | 698,708 | ||
Translation of assets and liabilities in foreign currencies | 220 | ||
698,928 | |||
Net realized and unrealized gain (loss) | 556,353 | ||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 773,186 |
See Notes to Financial Statements.
11
Statement of Changes in Net Assets |
SIX MONTHS ENDED DECEMBER 31, 2019 (UNAUDITED) AND YEAR ENDED JUNE 30, 2019 | ||||||
Increase (Decrease) in Net Assets | December 31, 2019 | June 30, 2019 | ||||
Operations | ||||||
Net investment income (loss) | $ | 216,833 | $ | 608,065 | ||
Net realized gain (loss) | (142,575 | ) | (2,421,895 | ) | ||
Change in net unrealized appreciation (depreciation) | 698,928 | 824,049 | ||||
Net increase (decrease) in net assets resulting from operations | 773,186 | (989,781 | ) | |||
Distributions to Shareholders | ||||||
From earnings: | ||||||
Investor Class | (442,252 | ) | (395,026 | ) | ||
I Class | (116,242 | ) | (139,331 | ) | ||
A Class | (113,060 | ) | (75,200 | ) | ||
C Class | (5,369 | ) | (8,304 | ) | ||
R Class | (10,120 | ) | (10,254 | ) | ||
Decrease in net assets from distributions | (687,043 | ) | (628,115 | ) | ||
Capital Share Transactions | ||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | (5,821,933 | ) | (2,860,420 | ) | ||
Net increase (decrease) in net assets | (5,735,790 | ) | (4,478,316 | ) | ||
Net Assets | ||||||
Beginning of period | 27,635,152 | 32,113,468 | ||||
End of period | $ | 21,899,362 | $ | 27,635,152 |
See Notes to Financial Statements.
12
Notes to Financial Statements |
DECEMBER 31, 2019 (UNAUDITED)
1. Organization
American Century Quantitative Equity Funds, Inc. (the corporation) is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company and is organized as a Maryland corporation. International Core Equity Fund (the fund) is one fund in a series issued by the corporation. The fund’s investment objective is to seek long-term capital growth.
The fund offers the Investor Class, I Class, A Class, C Class and R Class. The A Class may incur an initial sales charge. The A Class and C Class may be subject to a contingent deferred sales charge.
2. Significant Accounting Policies
The following is a summary of significant accounting policies consistently followed by the fund in preparation of its financial statements. The fund is an investment company and follows accounting and reporting guidance in accordance with accounting principles generally accepted in the United States of America. This may require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from these estimates. Management evaluated the impact of events or transactions occurring through the date the financial statements were issued that would merit recognition or disclosure.
Investment Valuations — The fund determines the fair value of its investments and computes its net asset value per share at the close of regular trading (usually 4 p.m. Eastern time) on the New York Stock Exchange (NYSE) on each day the NYSE is open. The Board of Directors has adopted valuation policies and procedures to guide the investment advisor in the fund’s investment valuation process and to provide methodologies for the oversight of the fund’s pricing function.
Equity securities that are listed or traded on a domestic securities exchange are valued at the last reported sales price or at the official closing price as provided by the exchange. Equity securities traded on foreign securities exchanges are generally valued at the closing price of such securities on the exchange where primarily traded or at the close of the NYSE, if that is earlier. If no last sales price is reported, or if local convention or regulation so provides, the mean of the latest bid and asked prices may be used. Securities traded over-the-counter are valued at the mean of the latest bid and asked prices, the last sales price, or the official closing price. Equity securities initially expressed in local currencies are translated into U.S. dollars at the mean of the appropriate currency exchange rate at the close of the NYSE as provided by an independent pricing service.
Open-end management investment companies are valued at the reported net asset value per share. Repurchase agreements are valued at cost, which approximates fair value.
If the fund determines that the market price for an investment is not readily available or the valuation methods mentioned above do not reflect an investment’s fair value, such investment is valued as determined in good faith by the Board of Directors or its delegate, in accordance with policies and procedures adopted by the Board of Directors. In its determination of fair value, the fund may review several factors including, but not limited to, market information regarding the specific investment or comparable investments and correlation with other investment types, futures indices or general market indicators. Circumstances that may cause the fund to use these procedures to value an investment include, but are not limited to: an investment has been declared in default or is distressed; trading in a security has been suspended during the trading day or a security is not actively trading on its principal exchange; prices received from a regular pricing source are deemed unreliable; or there is a foreign market holiday and no trading occurred.
13
The fund monitors for significant events occurring after the close of an investment’s primary exchange but before the fund’s net asset value per share is determined. Significant events may include, but are not limited to: corporate announcements and transactions; governmental action and political unrest that could impact a specific investment or an investment sector; or armed conflicts, natural disasters and similar events that could affect investments in a specific country or region. The fund also monitors for significant fluctuations between domestic and foreign markets, as evidenced by the U.S. market or such other indicators that the Board of Directors, or its delegate, deems appropriate. The fund may apply a model-derived factor to the closing price of equity securities traded on foreign securities exchanges. The factor is based on observable market data as provided by an independent pricing service.
Security Transactions — Security transactions are accounted for as of the trade date. Net realized gains and losses are determined on the identified cost basis, which is also used for federal income tax purposes. Certain countries impose taxes on realized gains on the sale of securities registered in their country. The fund records the foreign tax expense, if any, on an accrual basis. The foreign tax expense on realized gains and unrealized appreciation reduces the net realized gain (loss) on investment transactions and net unrealized appreciation (depreciation) on investments, respectively.
Investment Income — Dividend income less foreign taxes withheld, if any, is recorded as of the ex-dividend date. Distributions received on securities that represent a return of capital or long-term capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The fund may estimate the components of distributions received that may be considered nontaxable distributions or long-term capital gain distributions for income tax purposes. Interest income is recorded on the accrual basis and includes accretion of discounts and amortization of premiums. Securities lending income is net of fees and rebates earned by the lending agent for its services.
Foreign Currency Translations — All assets and liabilities initially expressed in foreign currencies are translated into U.S. dollars at prevailing exchange rates at period end. The fund may enter into spot foreign currency exchange contracts to facilitate transactions denominated in a foreign currency. Purchases and sales of investment securities, dividend and interest income, spot foreign currency exchange contracts, and expenses are translated at the rates of exchange prevailing on the respective dates of such transactions. Net realized and unrealized foreign currency exchange gains or losses related to investment securities are a component of net realized gain (loss) on investment transactions and change in net unrealized appreciation (depreciation) on investments, respectively.
Repurchase Agreements — The fund may enter into repurchase agreements with institutions that American Century Investment Management, Inc. (ACIM) (the investment advisor) has determined are creditworthy pursuant to criteria adopted by the Board of Directors. The fund requires that the collateral, represented by securities, received in a repurchase transaction be transferred to the custodian in a manner sufficient to enable the fund to obtain those securities in the event of a default under the repurchase agreement. ACIM monitors, on a daily basis, the securities transferred to ensure the value, including accrued interest, of the securities under each repurchase agreement is equal to or greater than amounts owed to the fund under each repurchase agreement.
Joint Trading Account — Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the fund, along with certain other funds in the American Century Investments family of funds, may transfer uninvested cash balances into a joint trading account. These balances are invested in one or more repurchase agreements that are collateralized by U.S. Treasury or Agency obligations.
Segregated Assets — In accordance with the 1940 Act, the fund segregates assets on its books and records to cover certain types of investment securities and other financial instruments. ACIM monitors, on a daily basis, the securities segregated to ensure the fund designates a sufficient amount of liquid assets, marked-to-market daily. The fund may also receive assets or be required to pledge assets at the custodian bank or with a broker for collateral requirements.
Income Tax Status — It is the fund’s policy to distribute substantially all net investment income and net realized gains to shareholders and to otherwise qualify as a regulated investment company under provisions of the Internal Revenue Code. Accordingly, no provision has been made for income taxes. The fund files U.S. federal, state, local and non-U.S. tax returns as applicable. The fund's tax returns are subject to examination by the relevant taxing authority until expiration of the applicable statute of limitations, which is generally three years from the date of filing but can be longer in certain jurisdictions. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination and for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
14
Multiple Class — All shares of the fund represent an equal pro rata interest in the net assets of the class to which such shares belong, and have identical voting, dividend, liquidation and other rights and the same terms and conditions, except for class specific expenses and exclusive rights to vote on matters affecting only individual classes. Income, non-class specific expenses, and realized and unrealized capital gains and losses of the fund are allocated to each class of shares based on their relative net assets.
Distributions to Shareholders — Distributions from net investment income and net realized gains, if any, are generally declared and paid annually.
Indemnifications — Under the corporation’s organizational documents, its officers and directors are indemnified against certain liabilities arising out of the performance of their duties to the fund. In addition, in the normal course of business, the fund enters into contracts that provide general indemnifications. The maximum exposure under these arrangements is unknown as this would involve future claims that may be made against a fund. The risk of material loss from such claims is considered by management to be remote.
Securities Lending — Securities are lent to qualified financial institutions and brokers. State Street Bank & Trust Co. serves as securities lending agent to the fund pursuant to a Securities Lending Agreement. The lending of securities exposes the fund to risks such as: the borrowers may fail to return the loaned securities, the borrowers may not be able to provide additional collateral, the fund may experience delays in recovery of the loaned securities or delays in access to collateral, or the fund may experience losses related to the investment collateral. To minimize certain risks, loan counterparties pledge collateral in the form of cash and/or securities. The lending agent has agreed to indemnify the fund in the case of default of any securities borrowed. Cash collateral received is invested in the State Street Navigator Securities Lending Government Money Market Portfolio, a money market mutual fund registered under the 1940 Act. The loans may also be secured by U.S. government securities in an amount at least equal to the market value of the securities loaned, plus accrued interest and dividends, determined on a daily basis and adjusted accordingly. By lending securities, the fund seeks to increase its net investment income through the receipt of interest and fees. Such income is reflected separately within the Statement of Operations. The value of loaned securities and related collateral outstanding at period end, if any, are shown on a gross basis within the Schedule of Investments and Statement of Assets and Liabilities.
The following table reflects a breakdown of transactions accounted for as secured borrowings, the gross obligation by the type of collateral pledged, and the remaining contractual maturity of those transactions as of December 31, 2019.
Remaining Contractual Maturity of Agreements | ||||||||||||
Overnight and Continuous | <30 days | Between 30 & 90 days | >90 days | Total | ||||||||
Securities Lending Transactions(1) | ||||||||||||
Common Stocks | $ | 260,897 | — | — | — | $ | 260,897 | |||||
Gross amount of recognized liabilities for securities lending transactions | $ | 260,897 |
(1) | Amount represents the payable for cash collateral received for securities on loan. This will generally be in the Overnight and Continuous column as the securities are typically callable on demand. |
3. Fees and Transactions with Related Parties
Certain officers and directors of the corporation are also officers and/or directors of American Century Companies, Inc. (ACC). The corporation’s investment advisor, ACIM, the corporation's distributor, American Century Investment Services, Inc. (ACIS), and the corporation’s transfer agent, American Century Services, LLC, are wholly owned, directly or indirectly, by ACC.
15
Management Fees — The corporation has entered into a management agreement with ACIM, under which ACIM provides the fund with investment advisory and management services in exchange for a single, unified management fee (the fee) per class. The agreement provides that all expenses of managing and operating the fund, except distribution and service fees, brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), and extraordinary expenses, will be paid by ACIM. The fee is computed and accrued daily based on each class's daily net assets and paid monthly in arrears. The difference in the fee among the classes is a result of their separate arrangements for non-Rule 12b-1 shareholder services. It is not the result of any difference in advisory or custodial fees or other expenses related to the management of the fund’s assets, which do not vary by class. The fee consists of (1) an Investment Category Fee based on the daily net assets of the fund and certain other accounts managed by the investment advisor that are in the same broad investment category as the fund and (2) a Complex Fee based on the assets of all the funds in the American Century Investments family of funds.
The Investment Category Fee range, the Complex Fee range and the effective annual management fee for each class for the period ended December 31, 2019 are as follows:
Investment Category Fee Range | Complex Fee Range | Effective Annual Management Fee | |
Investor Class | 0.8180% to 1.0000% | 0.2500% to 0.3100% | 1.14% |
I Class | 0.0500% to 0.1100% | 0.94% | |
A Class | 0.2500% to 0.3100% | 1.14% | |
C Class | 0.2500% to 0.3100% | 1.14% | |
R Class | 0.2500% to 0.3100% | 1.14% |
Distribution and Service Fees — The Board of Directors has adopted a separate Master Distribution and Individual Shareholder Services Plan for each of the A Class, C Class and R Class (collectively the plans), pursuant to Rule 12b-1 of the 1940 Act. The plans provide that the A Class will pay ACIS an annual distribution and service fee of 0.25%. The plans provide that the C Class will pay ACIS an annual distribution and service fee of 1.00%, of which 0.25% is paid for individual shareholder services and 0.75% is paid for distribution services. The plans provide that the R Class will pay ACIS an annual distribution and service fee of 0.50%. The fees are computed and accrued daily based on each class’s daily net assets and paid monthly in arrears. The fees are used to pay financial intermediaries for distribution and individual shareholder services. Fees incurred under the plans during the period ended December 31, 2019 are detailed in the Statement of Operations.
Directors' Fees and Expenses — The Board of Directors is responsible for overseeing the investment advisor’s management and operations of the fund. The directors receive detailed information about the fund and its investment advisor regularly throughout the year, and meet at least quarterly with management of the investment advisor to review reports about fund operations. The fund’s officers do not receive compensation from the fund.
Interfund Transactions — The fund may enter into security transactions with other American Century Investments funds and other client accounts of the investment advisor, in accordance with the 1940 Act rules and procedures adopted by the Board of Directors. The rules and procedures require, among other things, that these transactions be effected at the independent current market price of the security. There were no interfund transactions during the period.
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the period ended December 31, 2019 were $12,697,218 and $18,757,482, respectively.
16
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended December 31, 2019 | Year ended June 30, 2019 | |||||||||
Shares | Amount | Shares | Amount | |||||||
Investor Class/Shares Authorized | 40,000,000 | 40,000,000 | ||||||||
Sold | 245,306 | $ | 2,088,557 | 780,503 | $ | 6,681,327 | ||||
Issued in reinvestment of distributions | 49,595 | 430,981 | 49,907 | 388,273 | ||||||
Redeemed | (920,141 | ) | (7,909,734 | ) | (838,502 | ) | (7,294,153 | ) | ||
(625,240 | ) | (5,390,196 | ) | (8,092 | ) | (224,553 | ) | |||
I Class/Shares Authorized | 25,000,000 | 25,000,000 | ||||||||
Sold | 79,097 | 680,879 | 306,787 | 2,527,494 | ||||||
Issued in reinvestment of distributions | 13,361 | 116,242 | 17,886 | 139,331 | ||||||
Redeemed | (113,336 | ) | (981,883 | ) | (536,468 | ) | (4,537,339 | ) | ||
(20,878 | ) | (184,762 | ) | (211,795 | ) | (1,870,514 | ) | |||
A Class/Shares Authorized | 20,000,000 | 20,000,000 | ||||||||
Sold | 57,457 | 497,650 | 110,201 | 945,268 | ||||||
Issued in reinvestment of distributions | 12,970 | 112,972 | 9,608 | 74,944 | ||||||
Redeemed | (66,450 | ) | (566,579 | ) | (136,080 | ) | (1,187,226 | ) | ||
3,977 | 44,043 | (16,271 | ) | (167,014 | ) | |||||
C Class/Shares Authorized | 15,000,000 | 15,000,000 | ||||||||
Sold | 260 | 2,189 | 2,052 | 17,590 | ||||||
Issued in reinvestment of distributions | 618 | 5,369 | 924 | 7,199 | ||||||
Redeemed | (10,738 | ) | (89,362 | ) | (72,125 | ) | (617,982 | ) | ||
(9,860 | ) | (81,804 | ) | (69,149 | ) | (593,193 | ) | |||
R Class/Shares Authorized | 15,000,000 | 15,000,000 | ||||||||
Sold | 7,848 | 67,077 | 15,088 | 131,849 | ||||||
Issued in reinvestment of distributions | 1,165 | 10,120 | 1,316 | 10,254 | ||||||
Redeemed | (34,021 | ) | (286,411 | ) | (16,373 | ) | (147,249 | ) | ||
(25,008 | ) | (209,214 | ) | 31 | (5,146 | ) | ||||
Net increase (decrease) | (677,009 | ) | $ | (5,821,933 | ) | (305,276 | ) | $ | (2,860,420 | ) |
6. Fair Value Measurements
The fund’s investments valuation process is based on several considerations and may use multiple inputs to determine the fair value of the investments held by the fund. In conformity with accounting principles generally accepted in the United States of America, the inputs used to determine a valuation are classified into three broad levels.
• | Level 1 valuation inputs consist of unadjusted quoted prices in an active market for identical investments. |
• | Level 2 valuation inputs consist of direct or indirect observable market data (including quoted prices for comparable investments, evaluations of subsequent market events, interest rates, prepayment speeds, credit risk, etc.). These inputs also consist of quoted prices for identical investments initially expressed in local currencies that are adjusted through translation into U.S. dollars. |
• | Level 3 valuation inputs consist of unobservable data (including a fund’s own assumptions). |
The level classification is based on the lowest level input that is significant to the fair valuation measurement. The valuation inputs are not necessarily an indication of the risks associated with investing in these securities or other financial instruments.
17
The following is a summary of the level classifications as of period end. The Schedule of Investments provides additional information on the fund’s portfolio holdings.
Level 1 | Level 2 | Level 3 | ||||||
Assets | ||||||||
Investment Securities | ||||||||
Common Stocks | $ | 395,404 | $ | 19,196,863 | — | |||
Exchange-Traded Funds | 2,025,180 | — | — | |||||
Temporary Cash Investments | 40,563 | 186,243 | — | |||||
Temporary Cash Investments - Securities Lending Collateral | 260,897 | — | — | |||||
$ | 2,722,044 | $ | 19,383,106 | — |
7. Risk Factors
There are certain risks involved in investing in foreign securities. These risks include those resulting from political events (such as civil unrest, national elections and imposition of exchange controls), social and economic events (such as labor strikes and rising inflation), and natural disasters. Securities of foreign issuers may be less liquid and more volatile. Investing in emerging markets or a significant portion of assets in one country or region may accentuate these risks.
The fund’s investment process may result in high portfolio turnover, which could mean high transaction costs, affecting both performance and capital gains tax liabilities to investors.
8. Federal Tax Information
The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
As of period end, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $ | 20,063,189 | |
Gross tax appreciation of investments | $ | 2,463,646 | |
Gross tax depreciation of investments | (421,685 | ) | |
Net tax appreciation (depreciation) of investments | $ | 2,041,961 |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales.
As of June 30, 2019, the fund had accumulated short-term capital losses of $(2,511,762), which represent net capital loss carryovers that may be used to offset future realized capital gains for federal income tax purposes. The capital loss carryovers may be carried forward for an unlimited period. Future capital loss carryover utilization in any given year may be subject to Internal Revenue Code limitations.
9. Subsequent Event
On September 27, 2019, the Board of Directors approved a plan of liquidation for the fund. The liquidation was effective January 24, 2020.
18
Financial Highlights |
For a Share Outstanding Throughout the Years Ended June 30 (except as noted) | |||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||
Income From Investment Operations: | Ratio to Average Net Assets of: | ||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Distributions From Net Investment Income | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Net Investment Income (Loss) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
Investor Class | |||||||||||||
2019(3) | $8.69 | 0.07 | 0.26 | 0.33 | (0.28) | $8.74 | 3.83% | 1.15%(4) | 1.75%(4) | 51% | $13,883 | ||
2019 | $9.21 | 0.20 | (0.52) | (0.32) | (0.20) | $8.69 | (3.18)% | 1.15% | 2.24% | 93% | $19,225 | ||
2018 | $9.01 | 0.19 | 0.23 | 0.42 | (0.22) | $9.21 | 4.69% | 1.15% | 1.97% | 99% | $20,459 | ||
2017 | $7.71 | 0.18 | 1.33 | 1.51 | (0.21) | $9.01 | 19.92% | 1.15% | 2.19% | 113% | $20,938 | ||
2016 | $8.89 | 0.16 | (1.18) | (1.02) | (0.16) | $7.71 | (11.53)% | 1.17% | 1.94% | 117% | $19,646 | ||
2015 | $9.68 | 0.24 | (0.75) | (0.51) | (0.28) | $8.89 | (5.11)% | 1.15% | 2.67% | 96% | $22,366 | ||
I Class | |||||||||||||
2019(3) | $8.71 | 0.08 | 0.27 | 0.35 | (0.30) | $8.76 | 3.91% | 0.95%(4) | 1.95%(4) | 51% | $3,422 | ||
2019 | $9.23 | 0.20 | (0.50) | (0.30) | (0.22) | $8.71 | (2.98)% | 0.95% | 2.44% | 93% | $3,585 | ||
2018 | $9.02 | 0.22 | 0.23 | 0.45 | (0.24) | $9.23 | 4.89% | 0.95% | 2.17% | 99% | $5,756 | ||
2017 | $7.72 | 0.20 | 1.33 | 1.53 | (0.23) | $9.02 | 20.26% | 0.95% | 2.39% | 113% | $4,117 | ||
2016 | $8.90 | 0.17 | (1.17) | (1.00) | (0.18) | $7.72 | (11.34)% | 0.97% | 2.14% | 117% | $1,183 | ||
2015 | $9.69 | 0.26 | (0.75) | (0.49) | (0.30) | $8.90 | (4.91)% | 0.95% | 2.87% | 96% | $1,621 | ||
A Class | |||||||||||||
2019(3) | $8.70 | 0.06 | 0.26 | 0.32 | (0.26) | $8.76 | 3.68% | 1.40%(4) | 1.50%(4) | 51% | $3,953 | ||
2019 | $9.22 | 0.18 | (0.52) | (0.34) | (0.18) | $8.70 | (3.42)% | 1.40% | 1.99% | 93% | $3,888 | ||
2018 | $9.01 | 0.17 | 0.23 | 0.40 | (0.19) | $9.22 | 4.41% | 1.40% | 1.72% | 99% | $4,272 | ||
2017 | $7.71 | 0.15 | 1.34 | 1.49 | (0.19) | $9.01 | 19.74% | 1.40% | 1.94% | 113% | $3,307 | ||
2016 | $8.89 | 0.13 | (1.17) | (1.04) | (0.14) | $7.71 | (11.75)% | 1.42% | 1.69% | 117% | $6,441 | ||
2015 | $9.67 | 0.24 | (0.76) | (0.52) | (0.26) | $8.89 | (5.25)% | 1.40% | 2.42% | 96% | $8,196 |
For a Share Outstanding Throughout the Years Ended June 30 (except as noted) | |||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||
Income From Investment Operations: | Ratio to Average Net Assets of: | ||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Distributions From Net Investment Income | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Net Investment Income (Loss) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
C Class | |||||||||||||
2019(3) | $8.64 | 0.03 | 0.26 | 0.29 | (0.19) | $8.74 | 3.38% | 2.15%(4) | 0.75%(4) | 51% | $251 | ||
2019 | $9.16 | 0.08 | (0.48) | (0.40) | (0.12) | $8.64 | (4.19)% | 2.15% | 1.24% | 93% | $333 | ||
2018 | $8.96 | 0.08 | 0.24 | 0.32 | (0.12) | $9.16 | 3.54% | 2.15% | 0.97% | 99% | $987 | ||
2017 | $7.66 | 0.10 | 1.33 | 1.43 | (0.13) | $8.96 | 18.96% | 2.15% | 1.19% | 113% | $1,139 | ||
2016 | $8.84 | 0.08 | (1.18) | (1.10) | (0.08) | $7.66 | (12.48)% | 2.17% | 0.94% | 117% | $1,134 | ||
2015 | $9.62 | 0.13 | (0.72) | (0.59) | (0.19) | $8.84 | (6.02)% | 2.15% | 1.67% | 96% | $1,141 | ||
R Class | |||||||||||||
2019(3) | $8.67 | 0.05 | 0.27 | 0.32 | (0.24) | $8.75 | 3.55% | 1.65%(4) | 1.25%(4) | 51% | $391 | ||
2019 | $9.19 | 0.16 | (0.52) | (0.36) | (0.16) | $8.67 | (3.68)% | 1.65% | 1.74% | 93% | $604 | ||
2018 | $8.98 | 0.13 | 0.25 | 0.38 | (0.17) | $9.19 | 4.17% | 1.65% | 1.47% | 99% | $640 | ||
2017 | $7.69 | 0.14 | 1.32 | 1.46 | (0.17) | $8.98 | 19.36% | 1.65% | 1.69% | 113% | $709 | ||
2016 | $8.86 | 0.12 | (1.17) | (1.05) | (0.12) | $7.69 | (11.90)% | 1.67% | 1.44% | 117% | $583 | ||
2015 | $9.65 | 0.16 | (0.72) | (0.56) | (0.23) | $8.86 | (5.61)% | 1.65% | 2.17% | 96% | $538 |
Notes to Financial Highlights |
(1) | Computed using average shares outstanding throughout the period. |
(2) | Total returns are calculated based on the net asset value of the last business day and do not reflect applicable sales charges, if any. Total returns for periods less than one year are not annualized. |
(3) | Six months ended December 31, 2019 (unaudited). |
(4) | Annualized. |
See Notes to Financial Statements.
Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain retirement accounts are subject to federal income tax withholding, unless you elect not to have withholding apply*. Tax will be withheld on the total amount withdrawn even though you may be receiving amounts that are not subject to withholding, such as nondeductible contributions. In such case, excess amounts of withholding could occur. You may adjust your withholding election so that a greater or lesser amount will be withheld.
If you don’t want us to withhold on this amount, you must notify us to not withhold the federal income tax. You may notify us in writing or in certain situations by telephone or through other electronic means. For systematic withdrawals, your withholding election will remain in effect until revoked or changed by filing a new election. You have the right to revoke your election at any time and change your withholding percentage for future distributions.
Remember, even if you elect not to have income tax withheld, you are liable for paying income tax on the taxable portion of your withdrawal. If you elect not to have income tax withheld or you don’t have enough income tax withheld, you may be responsible for payment of estimated tax. You may incur penalties under the estimated tax rules if your withholding and estimated tax payments are not sufficient. You can reduce or defer the income tax on a distribution by directly or indirectly rolling such distribution over to another IRA or eligible plan. You should consult your tax advisor for additional information.
State tax will be withheld if, at the time of your distribution, your address is within one of the mandatory withholding states and you have federal income tax withheld (or as otherwise required by state law). State taxes will be withheld from your distribution in accordance with the respective state rules.
*Some 403(b), 457 and qualified retirement plan distributions may be subject to 20% mandatory withholding, as they are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
Descriptions of the principles and policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund are available without charge, upon request, by calling 1-800-345-2021 or visiting American Century Investments’ website at americancentury.com/proxy. A description of the policies is also available on the Securities and Exchange Commission’s website at sec.gov. Information regarding how the investment advisor voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on americancentury.com/proxy. It is also available at sec.gov.
Quarterly Portfolio Disclosure
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-Q or as an exhibit to its reports on Form N-PORT. The fund’s Forms N-Q and Form N-PORT reports are available on the SEC’s website at sec.gov. The fund also makes its complete schedule of portfolio holdings for the most recent quarter of its fiscal year available on its website at americancentury.com and, upon request, by calling 1-800-345-2021.
21
Notes |
22
Notes |
23
Notes |
24
Contact Us | americancentury.com | |
Automated Information Line | 1-800-345-8765 | |
Investor Services Representative | 1-800-345-2021 or 816-531-5575 | |
Investors Using Advisors | 1-800-378-9878 | |
Business, Not-For-Profit, Employer-Sponsored Retirement Plans | 1-800-345-3533 | |
Banks and Trust Companies, Broker-Dealers, Financial Professionals, Insurance Companies | 1-800-345-6488 | |
Telecommunications Relay Service for the Deaf | 711 | |
American Century Quantitative Equity Funds, Inc. | ||
Investment Advisor: American Century Investment Management, Inc. Kansas City, Missouri | ||
This report and the statements it contains are submitted for the general information of our shareholders. The report is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus. | ||
©2020 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-91450 2002 |
Semiannual Report | |
December 31, 2019 | |
Multi-Asset Real Return Fund | |
Investor Class (ASIOX) | |
I Class (ASINX) | |
A Class (ASIDX) | |
C Class (ASIZX) | |
R Class (ASIUX) | |
R5 Class (AMRUX) |
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the fund’s shareholder reports like this one will no longer be sent by mail, unless you specifically request paper copies of the reports from the fund or from your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the fund or your financial intermediary electronically by calling or sending an email request to your appropriate contacts as listed on the back cover of this report.
You may elect to receive all future reports in paper free of charge. You can inform the fund or your financial intermediary that you wish to continue receiving paper copies of your shareholder reports by calling or sending an email request to your appropriate contacts as listed on the back cover of this report. Your election to receive reports in paper will apply to all funds held with the fund complex/your financial intermediary.
Table of Contents |
Any opinions expressed in this report reflect those of the author as of the date of the report, and do not necessarily represent the opinions of American Century Investments® or any other person in the American Century Investments organization. Any such opinions are subject to change at any time based upon market or other conditions and American Century Investments disclaims any responsibility to update such opinions. These opinions may not be relied upon as investment advice and, because investment decisions made by American Century Investments funds are based on numerous factors, may not be relied upon as an indication of trading intent on behalf of any American Century Investments fund. Security examples are used for representational purposes only and are not intended as recommendations to purchase or sell securities. Performance information for comparative indices and securities is provided to American Century Investments by third party vendors. To the best of American Century Investments’ knowledge, such information is accurate at the time of printing.
President’s Letter |
Jonathan Thomas
Dear Investor:
Thank you for reviewing this semiannual report for the period ended December 31, 2019. It provides a market overview (below), followed by a schedule of fund investments and other financial information. For additional commentary and information on fund performance, plus other investment insights, please visit our website, americancentury.com.
All Asset Classes Advanced
From higher-quality government bonds to higher-risk stocks and commodities, all major U.S. and global asset classes posted gains for the six-month period. U.S. stocks, as measured by the S&P 500 Index, advanced almost 11% for the period, outpacing the nearly 9% return for global stocks (MSCI ACWI). Income-oriented assets, including U.S. and global bonds and dividend-paying stocks, generally posted more-modest gains.
A key policy pivot from the Federal Reserve (Fed) helped set the stage for the rally. After abruptly ending its three-year rate-hike campaign in early 2019, the Fed cut rates in July. Ongoing concerns about global economic risks, including trade policy uncertainty, prompted this first Fed easing move in 10 years. And with global risks still looming, the Fed cut rates again in September and October before pausing. Similarly, the European Central Bank cut a key deposit rate and relaunched quantitative easing in a move to spark growth. These efforts helped push global yields lower, which aided performance among interest rate-sensitive assets.
Accommodative central bank policy and a lower interest rate backdrop also aided performance in equity markets. Additionally, modestly improving economic and earnings data calmed investors’ earlier worries and nudged stock returns higher. In December, a series of upbeat data helped stocks end the period on a high note. U.K. Prime Minister Boris Johnson and his Conservative Party won a decisive election victory, which resolved some lingering Brexit uncertainty. On the trade front, the U.S. House of Representatives approved the U.S.-Mexico-Canada Agreement, and the U.S. and China reached a phase 1 deal, further fueling investor optimism.
Looking ahead, we expect volatility to remain a factor as investors react to global growth trends, ongoing U.S.-China trade negotiations, central bank policy and geopolitical forces. We believe this scenario underscores the importance of using professionally managed portfolios in pursuit of investment goals. We appreciate your continued trust and confidence in us.
Sincerely,
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
2
Fund Characteristics |
DECEMBER 31, 2019 | |
Types of Investments in Portfolio | % of net assets |
Domestic Common Stocks | 44.7% |
Foreign Common Stocks* | 10.8% |
U.S. Treasury Securities | 19.1% |
Corporate Bonds | 3.4% |
Commercial Mortgage-Backed Securities | 3.4% |
Collateralized Mortgage Obligations | 3.3% |
Asset-Backed Securities | 3.1% |
Collateralized Loan Obligations | 3.0% |
Exchange-Traded Funds | 2.7% |
Temporary Cash Investments | 6.1% |
Temporary Cash Investments - Securities Lending Collateral | 0.2% |
Other Assets and Liabilities | 0.2% |
*Includes depositary shares, dual listed securities and foreign ordinary shares.
3
Shareholder Fee Example |
Fund shareholders may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption/exchange fees; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in your fund and to compare these costs with the ongoing cost of investing in other mutual funds.
The example is based on an investment of $1,000 made at the beginning of the period and held for the entire period from July 1, 2019 to December 31, 2019.
Actual Expenses
The table provides information about actual account values and actual expenses for each class. You may use the information, together with the amount you invested, to estimate the expenses that you paid over the period. First, identify the share class you own. Then simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
If you hold Investor Class shares of any American Century Investments fund, or I Class shares of the American Century Diversified Bond Fund, in an American Century Investments account (i.e., not a financial intermediary or retirement plan account), American Century Investments may charge you a $12.50 semiannual account maintenance fee if the value of those shares is less than $10,000. We will redeem shares automatically in one of your accounts to pay the $12.50 fee. In determining your total eligible investment amount, we will include your investments in all personal accounts (including American Century Investments Brokerage accounts) registered under your Social Security number. Personal accounts include individual accounts, joint accounts, UGMA/UTMA accounts, personal trusts, Coverdell Education Savings Accounts and IRAs (including traditional, Roth, Rollover, SEP-, SARSEP- and SIMPLE-IRAs), and certain other retirement accounts. If you have only business, business retirement, employer-sponsored or American Century Investments Brokerage accounts, you are currently not subject to this fee. If you are subject to the Account Maintenance Fee, your account value could be reduced by the fee amount.
Hypothetical Example for Comparison Purposes
The table also provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio of each class of your fund and an assumed rate of return of 5% per year before expenses, which is not the actual return of a fund’s share class. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) or redemption/exchange fees. Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
4
Beginning Account Value 7/1/19 | Ending Account Value 12/31/19 | Expenses Paid During Period(1) 7/1/19 - 12/31/19 | Annualized Expense Ratio(1) | |
Actual | ||||
Investor Class | $1,000 | $1,035.80 | $4.55 | 0.89% |
I Class | $1,000 | $1,036.60 | $3.53 | 0.69% |
A Class | $1,000 | $1,034.80 | $5.83 | 1.14% |
C Class | $1,000 | $1,031.20 | $9.65 | 1.89% |
R Class | $1,000 | $1,033.00 | $7.10 | 1.39% |
R5 Class | $1,000 | $1,037.60 | $3.53 | 0.69% |
Hypothetical | ||||
Investor Class | $1,000 | $1,020.66 | $4.52 | 0.89% |
I Class | $1,000 | $1,021.67 | $3.51 | 0.69% |
A Class | $1,000 | $1,019.41 | $5.79 | 1.14% |
C Class | $1,000 | $1,015.64 | $9.58 | 1.89% |
R Class | $1,000 | $1,018.15 | $7.05 | 1.39% |
R5 Class | $1,000 | $1,021.67 | $3.51 | 0.69% |
(1) | Expenses are equal to the class's annualized expense ratio listed in the table above, multiplied by the average account value over the period, multiplied by 184, the number of days in the most recent fiscal half-year, divided by 366, to reflect the one-half year period. Annualized expense ratio reflects actual expenses, including any applicable fee waivers or expense reimbursements and excluding any acquired fund fees and expenses. |
5
Schedule of Investments |
DECEMBER 31, 2019 (UNAUDITED)
Shares/ Principal Amount | Value | |||||
COMMON STOCKS — 55.5% | ||||||
Aerospace and Defense — 2.8% | ||||||
Airbus SE | 263 | $ | 38,587 | |||
Arconic, Inc. | 1,049 | 32,278 | ||||
Boeing Co. (The) | 90 | 29,318 | ||||
Curtiss-Wright Corp. | 230 | 32,405 | ||||
HEICO Corp. | 219 | 24,999 | ||||
L3Harris Technologies, Inc. | 146 | 28,889 | ||||
Raytheon Co. | 157 | 34,499 | ||||
Teledyne Technologies, Inc.(1) | 95 | 32,921 | ||||
TransDigm Group, Inc. | 56 | 31,360 | ||||
United Technologies Corp. | 203 | 30,401 | ||||
315,657 | ||||||
Airlines — 0.6% | ||||||
Alaska Air Group, Inc. | 503 | 34,078 | ||||
Delta Air Lines, Inc. | 499 | 29,182 | ||||
63,260 | ||||||
Banks — 1.0% | ||||||
Bank of America Corp. | 876 | 30,853 | ||||
Citizens Financial Group, Inc. | 509 | 20,670 | ||||
KeyCorp | 1,554 | 31,453 | ||||
U.S. Bancorp | 610 | 36,167 | ||||
119,143 | ||||||
Beverages — 0.4% | ||||||
Coca-Cola Co. (The) | 396 | 21,919 | ||||
PepsiCo, Inc. | 211 | 28,837 | ||||
50,756 | ||||||
Biotechnology — 1.0% | ||||||
Alexion Pharmaceuticals, Inc.(1) | 185 | 20,008 | ||||
Amgen, Inc. | 171 | 41,223 | ||||
Gilead Sciences, Inc. | 426 | 27,681 | ||||
Vertex Pharmaceuticals, Inc.(1) | 96 | 21,019 | ||||
109,931 | ||||||
Capital Markets — 0.8% | ||||||
Intercontinental Exchange, Inc. | 336 | 31,097 | ||||
MarketAxess Holdings, Inc. | 52 | 19,714 | ||||
S&P Global, Inc. | 132 | 36,042 | ||||
86,853 | ||||||
Chemicals — 1.6% | ||||||
Air Liquide SA | 99 | 14,071 | ||||
Air Products & Chemicals, Inc. | 77 | 18,094 | ||||
Axalta Coating Systems Ltd.(1) | 625 | 19,000 | ||||
Celanese Corp. | 80 | 9,850 |
6
Shares/ Principal Amount | Value | |||||
FMC Corp. | 171 | $ | 17,069 | |||
Linde plc | 91 | 19,374 | ||||
NewMarket Corp. | 26 | 12,649 | ||||
Orica Ltd. | 1,014 | 15,672 | ||||
PPG Industries, Inc. | 106 | 14,150 | ||||
RPM International, Inc. | 175 | 13,433 | ||||
Scotts Miracle-Gro Co. (The) | 140 | 14,865 | ||||
Sherwin-Williams Co. (The) | 23 | 13,421 | ||||
181,648 | ||||||
Commercial Services and Supplies — 1.0% | ||||||
Cintas Corp. | 106 | 28,523 | ||||
Republic Services, Inc. | 323 | 28,951 | ||||
Tetra Tech, Inc. | 314 | 27,054 | ||||
Times Neighborhood Holdings Ltd.(1) | 3,461 | 2,154 | ||||
Waste Management, Inc. | 267 | 30,427 | ||||
117,109 | ||||||
Communications Equipment — 0.3% | ||||||
Lumentum Holdings, Inc.(1) | 479 | 37,985 | ||||
Construction and Engineering — 0.3% | ||||||
Jacobs Engineering Group, Inc. | 334 | 30,003 | ||||
Construction Materials — 0.3% | ||||||
Martin Marietta Materials, Inc. | 59 | 16,499 | ||||
Vulcan Materials Co. | 131 | 18,862 | ||||
35,361 | ||||||
Consumer Finance — 0.2% | ||||||
Ally Financial, Inc. | 848 | 25,915 | ||||
Containers and Packaging — 0.3% | ||||||
Avery Dennison Corp. | 101 | 13,213 | ||||
Crown Holdings, Inc.(1) | 184 | 13,347 | ||||
Graphic Packaging Holding Co. | 724 | 12,055 | ||||
38,615 | ||||||
Diversified Consumer Services — 0.2% | ||||||
Service Corp. International | 606 | 27,894 | ||||
Diversified Telecommunication Services — 0.5% | ||||||
Cellnex Telecom SA | 674 | 29,049 | ||||
Verizon Communications, Inc. | 468 | 28,735 | ||||
57,784 | ||||||
Electric Utilities — 0.6% | ||||||
FirstEnergy Corp. | 749 | 36,401 | ||||
NextEra Energy, Inc. | 130 | 31,481 | ||||
67,882 | ||||||
Electrical Equipment — 0.7% | ||||||
AMETEK, Inc. | 318 | 31,717 | ||||
Hubbell, Inc. | 285 | 42,129 | ||||
73,846 | ||||||
Electronic Equipment, Instruments and Components — 0.6% | ||||||
Keysight Technologies, Inc.(1) | 372 | 38,178 |
7
Shares/ Principal Amount | Value | |||||
SYNNEX Corp. | 257 | $ | 33,102 | |||
71,280 | ||||||
Energy Equipment and Services — 0.1% | ||||||
Schlumberger Ltd. | 297 | 11,939 | ||||
Equity Real Estate Investment Trusts (REITs) — 11.1% | ||||||
Agree Realty Corp. | 477 | 33,471 | ||||
Alexandria Real Estate Equities, Inc. | 233 | 37,648 | ||||
Allied Properties Real Estate Investment Trust | 407 | 16,320 | ||||
American Tower Corp. | 50 | 11,491 | ||||
Americold Realty Trust | 1,170 | 41,020 | ||||
Boston Properties, Inc. | 205 | 28,261 | ||||
Brixmor Property Group, Inc. | 887 | 19,168 | ||||
Camden Property Trust | 412 | 43,713 | ||||
CapitaLand Commercial Trust(1) | 5,700 | 8,439 | ||||
Charter Hall Group | 3,031 | 23,604 | ||||
Comforia Residential REIT, Inc. | 7 | 22,157 | ||||
Cousins Properties, Inc. | 358 | 14,750 | ||||
Derwent London plc | 273 | 14,582 | ||||
DiamondRock Hospitality Co. | 952 | 10,548 | ||||
Embassy Office Parks REIT | 800 | 4,749 | ||||
Equinix, Inc. | 55 | 32,104 | ||||
Equity Residential | 442 | 35,767 | ||||
Essential Properties Realty Trust, Inc. | 806 | 19,997 | ||||
Gaming and Leisure Properties, Inc. | 488 | 21,008 | ||||
Gecina SA | 101 | 18,104 | ||||
Goodman Group | 3,652 | 34,330 | ||||
Granite Real Estate Investment Trust | 230 | 11,686 | ||||
Healthpeak Properties, Inc. | 1,705 | 58,771 | ||||
Hudson Pacific Properties, Inc. | 752 | 28,313 | ||||
Inmobiliaria Colonial Socimi SA | 891 | 11,369 | ||||
Invesco Office J-Reit, Inc. | 136 | 28,197 | ||||
Invitation Homes, Inc. | 1,991 | 59,670 | ||||
Kilroy Realty Corp. | 353 | 29,617 | ||||
Link REIT | 1,500 | 15,925 | ||||
Mapletree Commercial Trust | 11,589 | 20,596 | ||||
Mitsui Fudosan Logistics Park, Inc. | 5 | 22,203 | ||||
Northview Apartment Real Estate Investment Trust | 577 | 13,170 | ||||
Orix JREIT, Inc. | 16 | 34,693 | ||||
Prologis, Inc. | 830 | 73,986 | ||||
Rexford Industrial Realty, Inc. | 1,073 | 49,004 | ||||
Ryman Hospitality Properties, Inc. | 359 | 31,111 | ||||
Safestore Holdings plc | 2,071 | 22,122 | ||||
SBA Communications Corp. | 46 | 11,086 | ||||
Segro plc | 3,068 | 36,622 | ||||
Spirit Realty Capital, Inc. | 622 | 30,590 | ||||
Summit Industrial Income REIT | 988 | 9,176 | ||||
Sun Communities, Inc. | 212 | 31,821 |
8
Shares/ Principal Amount | Value | |||||
UDR, Inc. | 632 | $ | 29,514 | |||
UNITE Group plc (The) | 1,267 | 21,188 | ||||
VICI Properties, Inc. | 1,516 | 38,734 | ||||
Welltower, Inc. | 166 | 13,576 | ||||
Weyerhaeuser Co. | 1,317 | 39,773 | ||||
1,263,744 | ||||||
Food and Staples Retailing — 1.2% | ||||||
Costco Wholesale Corp. | 97 | 28,510 | ||||
George Weston Ltd. | 381 | 30,227 | ||||
US Foods Holding Corp.(1) | 934 | 39,125 | ||||
Walmart, Inc. | 314 | 37,316 | ||||
135,178 | ||||||
Food Products — 0.6% | ||||||
Lamb Weston Holdings, Inc. | 361 | 31,057 | ||||
Mondelez International, Inc., Class A | 592 | 32,607 | ||||
63,664 | ||||||
Health Care Equipment and Supplies — 3.0% | ||||||
Becton Dickinson and Co. | 109 | 29,645 | ||||
Boston Scientific Corp.(1) | 947 | 42,823 | ||||
Cooper Cos., Inc. (The) | 102 | 32,772 | ||||
Edwards Lifesciences Corp.(1) | 145 | 33,827 | ||||
Masimo Corp.(1) | 188 | 29,715 | ||||
Medtronic plc | 360 | 40,842 | ||||
STERIS plc | 250 | 38,105 | ||||
Teleflex, Inc. | 80 | 30,115 | ||||
West Pharmaceutical Services, Inc. | 198 | 29,765 | ||||
Zimmer Biomet Holdings, Inc. | 261 | 39,067 | ||||
346,676 | ||||||
Health Care Providers and Services — 1.2% | ||||||
Anthem, Inc. | 114 | 34,431 | ||||
Chemed Corp. | 68 | 29,870 | ||||
HCA Healthcare, Inc. | 253 | 37,396 | ||||
Laboratory Corp. of America Holdings(1) | 184 | 31,127 | ||||
132,824 | ||||||
Hotels, Restaurants and Leisure — 0.8% | ||||||
Darden Restaurants, Inc. | 262 | 28,560 | ||||
Dunkin' Brands Group, Inc. | 259 | 19,565 | ||||
Hilton Worldwide Holdings, Inc. | 380 | 42,146 | ||||
90,271 | ||||||
Household Durables — 0.1% | ||||||
Cyrela Brazil Realty SA Empreendimentos e Participacoes | 2,000 | 14,789 | ||||
Household Products — 0.3% | ||||||
Procter & Gamble Co. (The) | 266 | 33,223 | ||||
Industrial Conglomerates — 0.3% | ||||||
Honeywell International, Inc. | 214 | 37,878 |
9
Shares/ Principal Amount | Value | |||||
Insurance — 0.4% | ||||||
Allstate Corp. (The) | 172 | $ | 19,342 | |||
Fidelity National Financial, Inc. | 623 | 28,253 | ||||
47,595 | ||||||
Interactive Media and Services — 0.5% | ||||||
Alphabet, Inc., Class A(1) | 29 | 38,842 | ||||
Facebook, Inc., Class A(1) | 99 | 20,320 | ||||
59,162 | ||||||
Internet and Direct Marketing Retail — 0.6% | ||||||
Alibaba Group Holding Ltd. ADR(1) | 159 | 33,724 | ||||
Amazon.com, Inc.(1) | 20 | 36,957 | ||||
70,681 | ||||||
IT Services — 3.2% | ||||||
Booz Allen Hamilton Holding Corp. | 439 | 31,226 | ||||
EPAM Systems, Inc.(1) | 149 | 31,612 | ||||
Euronet Worldwide, Inc.(1) | 203 | 31,985 | ||||
Fidelity National Information Services, Inc. | 259 | 36,024 | ||||
Fiserv, Inc.(1) | 263 | 30,411 | ||||
FleetCor Technologies, Inc.(1) | 132 | 37,979 | ||||
GDS Holdings Ltd. ADR(1) | 551 | 28,420 | ||||
Global Payments, Inc. | 186 | 33,956 | ||||
Mastercard, Inc., Class A | 105 | 31,352 | ||||
NEXTDC Ltd.(1)(2) | 1,911 | 8,854 | ||||
PayPal Holdings, Inc.(1) | 265 | 28,665 | ||||
Visa, Inc., Class A | 163 | 30,628 | ||||
361,112 | ||||||
Life Sciences Tools and Services — 1.1% | ||||||
Agilent Technologies, Inc. | 467 | 39,840 | ||||
Illumina, Inc.(1) | 92 | 30,520 | ||||
IQVIA Holdings, Inc.(1) | 128 | 19,777 | ||||
Thermo Fisher Scientific, Inc. | 104 | 33,787 | ||||
123,924 | ||||||
Machinery — 1.2% | ||||||
Dover Corp. | 295 | 34,002 | ||||
Ingersoll-Rand plc | 277 | 36,819 | ||||
ITT, Inc. | 444 | 32,816 | ||||
Sandvik AB | 1,785 | 34,887 | ||||
138,524 | ||||||
Media — 0.9% | ||||||
Altice USA, Inc., Class A(1) | 1,556 | 42,541 | ||||
Comcast Corp., Class A | 735 | 33,053 | ||||
Quebecor, Inc., Class B | 1,233 | 31,467 | ||||
107,061 | ||||||
Metals and Mining — 0.4% | ||||||
Anglo American plc | 386 | 11,141 | ||||
BHP Group Ltd. | 598 | 16,379 | ||||
Rio Tinto Ltd. | 119 | 8,416 |
10
Shares/ Principal Amount | Value | |||||
Rio Tinto plc ADR | 195 | $ | 11,575 | |||
47,511 | ||||||
Multi-Utilities — 0.3% | ||||||
Brookfield Infrastructure Partners LP | 711 | 35,543 | ||||
Multiline Retail — 0.3% | ||||||
Target Corp. | 266 | 34,104 | ||||
Oil, Gas and Consumable Fuels — 1.3% | ||||||
Aker BP ASA | 434 | 14,239 | ||||
BP plc | 1,560 | 9,793 | ||||
Chevron Corp. | 122 | 14,702 | ||||
CNOOC Ltd. ADR | 64 | 10,667 | ||||
Enbridge, Inc. | 299 | 11,888 | ||||
Magellan Midstream Partners LP | 230 | 14,460 | ||||
ONEOK, Inc. | 213 | 16,118 | ||||
Phillips 66 | 120 | 13,369 | ||||
TC Energy Corp. | 304 | 16,191 | ||||
TOTAL SA | 307 | 16,965 | ||||
Valero Energy Corp. | 143 | 13,392 | ||||
151,784 | ||||||
Pharmaceuticals — 2.6% | ||||||
Bristol-Myers Squibb Co. | 654 | 41,980 | ||||
Catalent, Inc.(1) | 562 | 31,641 | ||||
Eli Lilly & Co. | 219 | 28,783 | ||||
Johnson & Johnson | 218 | 31,800 | ||||
Merck & Co., Inc. | 454 | 41,291 | ||||
Novartis AG | 304 | 28,802 | ||||
Novo Nordisk A/S, B Shares | 550 | 31,900 | ||||
Pfizer, Inc. | 740 | 28,993 | ||||
Zoetis, Inc. | 223 | 29,514 | ||||
294,704 | ||||||
Professional Services — 0.3% | ||||||
TransUnion | 350 | 29,964 | ||||
Real Estate Management and Development — 3.2% | ||||||
Aroundtown SA | 2,036 | 18,233 | ||||
Ayala Land, Inc. | 15,780 | 14,152 | ||||
CapitaLand Ltd. | 5,700 | 15,898 | ||||
CBRE Group, Inc., Class A(1) | 146 | 8,948 | ||||
China Resources Land Ltd. | 4,000 | 19,931 | ||||
Corp. Inmobiliaria Vesta SAB de CV | 8,480 | 15,303 | ||||
Fabege AB | 1,328 | 22,086 | ||||
Longfor Group Holdings Ltd. | 5,500 | 25,831 | ||||
Mitsubishi Estate Co. Ltd. | 2,400 | 45,881 | ||||
Mitsui Fudosan Co. Ltd. | 1,800 | 43,963 | ||||
New World Development Co. Ltd. | 6,000 | 8,229 | ||||
Shimao Property Holdings Ltd. | 5,500 | 21,358 | ||||
Shurgard Self Storage SA | 243 | 9,273 |
11
Shares/ Principal Amount | Value | |||||
Sun Hung Kai Properties Ltd. | 2,000 | $ | 30,678 | |||
Times China Holdings Ltd. | 9,000 | 18,003 | ||||
VGP NV | 96 | 9,459 | ||||
Vonovia SE | 769 | 41,400 | ||||
368,626 | ||||||
Road and Rail — 0.3% | ||||||
Kansas City Southern | 224 | 34,308 | ||||
Semiconductors and Semiconductor Equipment — 1.7% | ||||||
Applied Materials, Inc. | 546 | 33,328 | ||||
ASM International NV | 290 | 32,776 | ||||
Entegris, Inc. | 674 | 33,761 | ||||
MKS Instruments, Inc. | 342 | 37,623 | ||||
NVIDIA Corp. | 102 | 24,001 | ||||
QUALCOMM, Inc. | 358 | 31,586 | ||||
193,075 | ||||||
Software — 3.3% | ||||||
Adobe, Inc.(1) | 131 | 43,205 | ||||
Alteryx, Inc., Class A(1) | 222 | 22,215 | ||||
ANSYS, Inc.(1) | 87 | 22,395 | ||||
Cadence Design Systems, Inc.(1) | 337 | 23,374 | ||||
DocuSign, Inc.(1) | 416 | 30,830 | ||||
Fortinet, Inc.(1) | 297 | 31,708 | ||||
j2 Global, Inc. | 310 | 29,050 | ||||
Microsoft Corp. | 264 | 41,633 | ||||
Palo Alto Networks, Inc.(1) | 169 | 39,081 | ||||
RingCentral, Inc., Class A(1) | 196 | 33,059 | ||||
salesforce.com, Inc.(1) | 195 | 31,715 | ||||
Splunk, Inc.(1) | 157 | 23,514 | ||||
371,779 | ||||||
Specialty Retail — 1.1% | ||||||
Aaron's, Inc. | 595 | 33,980 | ||||
Burlington Stores, Inc.(1) | 138 | 31,468 | ||||
O'Reilly Automotive, Inc.(1) | 71 | 31,117 | ||||
TJX Cos., Inc. (The) | 552 | 33,705 | ||||
130,270 | ||||||
Textiles, Apparel and Luxury Goods — 0.6% | ||||||
lululemon athletica, Inc.(1) | 144 | 33,361 | ||||
NIKE, Inc., Class B | 356 | 36,066 | ||||
69,427 | ||||||
Trading Companies and Distributors — 0.3% | ||||||
United Rentals, Inc.(1) | 197 | 32,854 | ||||
TOTAL COMMON STOCKS (Cost $5,432,684) | 6,343,116 | |||||
U.S. TREASURY SECURITIES — 19.1% | ||||||
U.S. Treasury Inflation Indexed Bonds, 2.375%, 1/15/25(3) | $ | 81,914 | 91,308 | |||
U.S. Treasury Inflation Indexed Bonds, 2.00%, 1/15/26 | 162,073 | 180,190 | ||||
U.S. Treasury Inflation Indexed Notes, 0.50%, 4/15/24 | 204,070 | 207,402 |
12
Shares/ Principal Amount | Value | |||||
U.S. Treasury Inflation Indexed Notes, 0.375%, 1/15/27 | $ | 319,602 | $ | 324,536 | ||
U.S. Treasury Inflation Indexed Notes, 0.50%, 1/15/28 | 260,820 | 267,639 | ||||
U.S. Treasury Inflation Indexed Notes, 0.25%, 7/15/29 | 553,328 | 558,899 | ||||
U.S. Treasury Notes, 2.50%, 2/28/21 | 450,000 | 454,393 | ||||
U.S. Treasury Notes, 1.625%, 8/15/29 | 100,000 | 97,362 | ||||
TOTAL U.S. TREASURY SECURITIES (Cost $2,176,686) | 2,181,729 | |||||
CORPORATE BONDS — 3.4% | ||||||
Banks — 0.3% | ||||||
Bank of America Corp., MTN, 3.25%, 10/21/27 | 15,000 | 15,632 | ||||
CIT Group, Inc., 5.00%, 8/15/22 | 20,000 | 21,250 | ||||
36,882 | ||||||
Containers and Packaging — 0.5% | ||||||
Berry Global, Inc., 5.50%, 5/15/22 | 25,000 | 25,343 | ||||
Reynolds Group Issuer, Inc. / Reynolds Group Issuer LLC / Reynolds Group Issuer Lu, 5.125%, 7/15/23(4) | 25,000 | 25,646 | ||||
50,989 | ||||||
Electric Utilities — 0.4% | ||||||
Duke Energy Progress LLC, 3.70%, 10/15/46 | 10,000 | 10,689 | ||||
Exelon Generation Co. LLC, 5.60%, 6/15/42 | 5,000 | 5,724 | ||||
IPALCO Enterprises, Inc., 3.45%, 7/15/20 | 30,000 | 30,136 | ||||
46,549 | ||||||
Equity Real Estate Investment Trusts (REITs) — 0.7% | ||||||
Crown Castle International Corp., 5.25%, 1/15/23 | 75,000 | 81,483 | ||||
Hotels, Restaurants and Leisure — 0.2% | ||||||
1011778 BC ULC / New Red Finance, Inc., 5.00%, 10/15/25(4) | 20,000 | 20,692 | ||||
Media — 0.2% | ||||||
CCO Holdings LLC / CCO Holdings Capital Corp., 5.125%, 5/1/27(4) | 10,000 | 10,568 | ||||
Charter Communications Operating LLC / Charter Communications Operating Capital, 6.48%, 10/23/45 | 10,000 | 12,489 | ||||
23,057 | ||||||
Metals and Mining — 0.2% | ||||||
Freeport-McMoRan, Inc., 3.55%, 3/1/22 | 25,000 | 25,357 | ||||
Oil, Gas and Consumable Fuels — 0.7% | ||||||
Carrizo Oil & Gas, Inc., 6.25%, 4/15/23(2) | 25,000 | 25,433 | ||||
MPLX LP, 6.25%, 10/15/22(4) | 19,000 | 19,376 | ||||
MPLX LP, 4.875%, 6/1/25 | 10,000 | 10,922 | ||||
Oasis Petroleum, Inc., 6.875%, 3/15/22 | 25,000 | 24,125 | ||||
79,856 | ||||||
Specialty Retail — 0.2% | ||||||
Suburban Propane Partners LP / Suburban Energy Finance Corp., 5.50%, 6/1/24 | 25,000 | 25,750 | ||||
TOTAL CORPORATE BONDS (Cost $379,453) | 390,615 | |||||
COMMERCIAL MORTGAGE-BACKED SECURITIES — 3.4% | ||||||
Commercial Mortgage Trust, Series 2016-CD1, Class AM, 2.93%, 8/10/49 | 25,000 | 25,164 | ||||
Commercial Mortgage Trust, Series 2016-CD2, Class A4 SEQ, VRN, 3.53%, 11/10/49 | 50,000 | 53,246 |
13
Shares/ Principal Amount | Value | |||||
GS Mortgage Securities Trust, Series 2016-GS2, Class B, VRN, 3.76%, 5/10/49 | $ | 75,000 | $ | 78,160 | ||
Hudson Yards Mortgage Trust, Series 2016-10HY, Class B, VRN, 2.98%, 8/10/38(4) | 50,000 | 50,400 | ||||
JPMorgan Chase Commercial Mortgage Securities Trust, Series 2016-JP2, Class B, 3.46%, 8/15/49 | 50,000 | 51,029 | ||||
JPMorgan Chase Commercial Mortgage Securities Trust, Series 2016-JP3, Class AS, 3.14%, 8/15/49 | 50,000 | 50,842 | ||||
Morgan Stanley Capital I Trust, Series 2016-UB11, Class A4 SEQ, 2.78%, 8/15/49 | 75,000 | 76,170 | ||||
TOTAL COMMERCIAL MORTGAGE-BACKED SECURITIES (Cost $385,317) | 385,011 | |||||
COLLATERALIZED MORTGAGE OBLIGATIONS — 3.3% | ||||||
ABN Amro Mortgage Corp., Series 2003-6, Class 1A4, 5.50%, 5/25/33 | 1,918 | 1,973 | ||||
Bear Stearns Adjustable Rate Mortgage Trust, Series 2004-12, Class 2A1, VRN, 3.99%, 2/25/35 | 22,272 | 22,730 | ||||
Citigroup Mortgage Loan Trust, Inc., Series 2004-UST1, Class A4, VRN, 4.15%, 8/25/34 | 9,734 | 9,536 | ||||
Citigroup Mortgage Loan Trust, Inc., Series 2005-4, Class A, VRN, 4.61%, 8/25/35 | 16,392 | 16,858 | ||||
Countrywide Home Loan Mortgage Pass-Through Trust, Series 2004-4, Class A19, 5.25%, 5/25/34 | 20,785 | 21,304 | ||||
Countrywide Home Loan Mortgage Pass-Through Trust, Series 2004-5, Class 2A4, 5.50%, 5/25/34 | 3,773 | 3,870 | ||||
First Horizon Mortgage Pass-Through Trust, Series 2005-AR3, Class 4A1, VRN, 5.01%, 8/25/35 | 11,081 | 11,593 | ||||
GSR Mortgage Loan Trust, Series 2005-AR6, Class 2A1, VRN, 4.27%, 9/25/35 | 16,988 | 17,487 | ||||
JPMorgan Mortgage Trust, Series 2005-A6, Class 7A1, VRN, 4.21%, 8/25/35 | 18,667 | 18,461 | ||||
JPMorgan Mortgage Trust, Series 2006-A3, Class 7A1, VRN, 4.45%, 4/25/35 | 4,149 | 4,251 | ||||
JPMorgan Mortgage Trust, Series 2016-1, Class A7 SEQ, VRN, 3.50%, 5/25/46(4) | 100,000 | 102,605 | ||||
Thornburg Mortgage Securities Trust, Series 2004-3, Class A, VRN, 2.53%, (1-month LIBOR plus 0.74%), 9/25/34 | 7,634 | 7,564 | ||||
Thornburg Mortgage Securities Trust, Series 2006-4, Class A2B, VRN, 4.27%, 7/25/36 | 55,521 | 53,765 | ||||
WaMu Mortgage Pass-Through Certificates, Series 2003-S11, Class 3A5, 5.95%, 11/25/33 | 3,500 | 3,585 | ||||
Wells Fargo Mortgage-Backed Securities Trust, Series 2005-AR7, Class 1A1, VRN, 5.08%, 5/25/35 | 7,026 | 7,036 | ||||
Wells Fargo Mortgage-Backed Securities Trust, Series 2006-AR1, Class 2A5 SEQ, VRN, 5.15%, 3/25/36 | 23,278 | 23,334 | ||||
Wells Fargo Mortgage-Backed Securities Trust, Series 2006-AR12, Class 1A1, VRN, 4.72%, 9/25/36 | 43,867 | 44,389 | ||||
Wells Fargo Mortgage-Backed Securities Trust, Series 2006-AR15, Class A1, VRN, 4.64%, 10/25/36 | 8,607 | 8,617 | ||||
Wells Fargo Mortgage-Backed Securities Trust, Series 2007-AR10, Class 1A1, VRN, 4.26%, 1/25/38 | 2,628 | 2,587 | ||||
WinWater Mortgage Loan Trust, Series 2014-1, Class A4 SEQ, VRN, 3.50%, 6/20/44(4) | 1,865 | 1,868 | ||||
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (Cost $374,329) | 383,413 |
14
Shares/ Principal Amount | Value | |||||
ASSET-BACKED SECURITIES — 3.1% | ||||||
Goodgreen, Series 2018-1A, Class A, VRN, 3.93%, 10/15/53(4) | $ | 73,514 | $ | 76,759 | ||
Hilton Grand Vacations Trust, Series 2014-AA, Class A SEQ, 1.77%, 11/25/26(4) | 9,809 | 9,784 | ||||
Invitation Homes Trust, Series 2018-SFR2, Class C, VRN, 3.02%, (1-month LIBOR plus 1.28%), 6/17/37(4) | 100,000 | 100,049 | ||||
MVW Owner Trust, Series 2014-1A, Class B, 2.70%, 9/22/31(4) | 37,267 | 37,331 | ||||
MVW Owner Trust, Series 2016-1A, Class A SEQ, 2.25%, 12/20/33(4) | 7,315 | 7,270 | ||||
MVW Owner Trust, Series 2017-1A, Class B, 2.75%, 12/20/34(4) | 22,297 | 22,297 | ||||
Progress Residential Trust, Series 2018-SFR3, Class C, 4.18%, 10/17/35(4) | 50,000 | 50,762 | ||||
Sierra Timeshare Receivables Funding LLC, Series 2015-2A, Class A SEQ, 2.43%, 6/20/32(4) | 11,021 | 11,017 | ||||
Sierra Timeshare Receivables Funding LLC, Series 2016-2A, Class A SEQ, 2.33%, 7/20/33(4) | 8,254 | 8,236 | ||||
Sierra Timeshare Receivables Funding LLC, Series 2018-3A, Class C, 4.17%, 9/20/35(4) | 26,101 | 26,669 | ||||
TOTAL ASSET-BACKED SECURITIES (Cost $345,583) | 350,174 | |||||
COLLATERALIZED LOAN OBLIGATIONS — 3.0% | ||||||
Ares XLI CLO Ltd., Series 2016-41A, Class AR, VRN, 3.20%, (3-month LIBOR plus 1.20%), 1/15/29(4) | 75,000 | 74,969 | ||||
Bean Creek CLO Ltd., Series 2015-1A, Class BR, VRN, 3.42%, (3-month LIBOR plus 1.45%), 4/20/31(4) | 200,000 | 195,673 | ||||
Symphony CLO XIX Ltd., Series 2018-19A, Class A, VRN, 2.96%, (3-month LIBOR plus 0.96%), 4/16/31(4) | 75,000 | 74,377 | ||||
TOTAL COLLATERALIZED LOAN OBLIGATIONS (Cost $349,219) | 345,019 | |||||
EXCHANGE-TRADED FUNDS — 2.7% | ||||||
Invesco DB Base Metals Fund | 6,416 | 95,855 | ||||
Invesco DB Energy Fund | 11,699 | 171,156 | ||||
SPDR Gold Shares(1) | 274 | 39,155 | ||||
TOTAL EXCHANGE-TRADED FUNDS (Cost $280,045) | 306,166 | |||||
TEMPORARY CASH INVESTMENTS — 6.1% | ||||||
State Street Institutional U.S. Government Money Market Fund, Premier Class (Cost $691,159) | 691,159 | 691,159 | ||||
TEMPORARY CASH INVESTMENTS - SECURITIES LENDING COLLATERAL(5) — 0.2% | ||||||
State Street Navigator Securities Lending Government Money Market Portfolio (Cost $26,250) | 26,250 | 26,250 | ||||
TOTAL INVESTMENT SECURITIES — 99.8% (Cost $10,440,725) | 11,402,652 | |||||
OTHER ASSETS AND LIABILITIES — 0.2% | 24,282 | |||||
TOTAL NET ASSETS — 100.0% | $ | 11,426,934 |
15
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
Currency Purchased | Currency Sold | Counterparty | Settlement Date | Unrealized Appreciation (Depreciation) | |||||
AUD | 197,371 | USD | 136,439 | UBS AG | 3/18/20 | $ | 2,323 | ||
AUD | 387,729 | USD | 268,037 | UBS AG | 3/18/20 | 4,556 | |||
USD | 68,710 | AUD | 99,556 | UBS AG | 3/18/20 | (1,283 | ) | ||
USD | 201,088 | AUD | 291,327 | UBS AG | 3/18/20 | (3,729 | ) | ||
BRL | 902,539 | USD | 219,318 | Goldman Sachs & Co. | 3/18/20 | 4,356 | |||
USD | 219,971 | BRL | 902,539 | Goldman Sachs & Co. | 3/18/20 | (3,704 | ) | ||
CAD | 177,964 | USD | 135,023 | UBS AG | 3/18/20 | 2,062 | |||
CLP | 128,988,105 | USD | 168,008 | Goldman Sachs & Co. | 3/18/20 | 3,677 | |||
USD | 170,450 | CLP | 128,988,105 | Goldman Sachs & Co. | 3/18/20 | (1,235 | ) | ||
GBP | 1,938 | USD | 2,544 | JPMorgan Chase Bank N.A. | 3/31/20 | 30 | |||
GBP | 6,290 | USD | 8,215 | JPMorgan Chase Bank N.A. | 3/31/20 | 138 | |||
USD | 87,486 | GBP | 66,415 | JPMorgan Chase Bank N.A. | 3/31/20 | (699 | ) | ||
USD | 30,521 | GBP | 23,170 | JPMorgan Chase Bank N.A. | 3/31/20 | (244 | ) | ||
USD | 946 | GBP | 721 | JPMorgan Chase Bank N.A. | 3/31/20 | (11 | ) | ||
USD | 2,854 | GBP | 2,185 | JPMorgan Chase Bank N.A. | 3/31/20 | (48 | ) | ||
USD | 2,274 | GBP | 1,727 | JPMorgan Chase Bank N.A. | 3/31/20 | (19 | ) | ||
HKD | 233,051 | USD | 29,861 | Bank of America N.A. | 3/31/20 | 27 | |||
HKD | 31,538 | USD | 4,042 | Bank of America N.A. | 3/31/20 | 3 | |||
USD | 152,414 | HKD | 1,189,016 | Bank of America N.A. | 3/31/20 | (74 | ) | ||
IDR | 1,430,975,713 | USD | 101,596 | Goldman Sachs & Co. | 3/18/20 | 1,217 | |||
USD | 200,460 | IDR | 2,831,495,967 | Goldman Sachs & Co. | 3/18/20 | (2,977 | ) | ||
USD | 138,110 | ILS | 478,360 | UBS AG | 3/18/20 | (974 | ) | ||
INR | 14,399,431 | USD | 202,097 | Goldman Sachs & Co. | 3/18/20 | (1,479 | ) | ||
USD | 101,798 | INR | 7,298,388 | Goldman Sachs & Co. | 3/18/20 | 114 | |||
JPY | 1,319,938 | USD | 12,143 | Bank of America N.A. | 3/31/20 | 63 | |||
USD | 182,970 | JPY | 19,904,913 | Bank of America N.A. | 3/31/20 | (1,094 | ) | ||
KZT | 63,248,852 | USD | 160,327 | Goldman Sachs & Co. | 3/18/20 | 2,595 | |||
KZT | 69,961,474 | USD | 178,405 | Goldman Sachs & Co. | 3/18/20 | 1,808 | |||
MXN | 1,272,496 | USD | 66,337 | Morgan Stanley | 3/18/20 | 219 | |||
MYR | 1,153,552 | USD | 277,964 | Goldman Sachs & Co. | 3/18/20 | 4,486 | |||
MYR | 514,157 | USD | 124,523 | Goldman Sachs & Co. | 3/18/20 | 1,369 | |||
NOK | 2,581,839 | USD | 283,778 | Goldman Sachs & Co. | 3/18/20 | 10,371 | |||
NOK | 1,216,251 | USD | 135,076 | Goldman Sachs & Co. | 3/18/20 | 3,491 | |||
USD | 283,859 | NOK | 2,581,839 | Goldman Sachs & Co. | 3/18/20 | (10,290 | ) | ||
PEN | 1,029,027 | USD | 306,623 | Goldman Sachs & Co. | 3/18/20 | 3,174 | |||
USD | 759,859 | PEN | 2,587,471 | Goldman Sachs & Co. | 3/18/20 | (19,120 | ) | ||
PHP | 3,508,581 | USD | 69,175 | Goldman Sachs & Co. | 3/18/20 | (136 | ) | ||
USD | 135,753 | PHP | 6,889,176 | Goldman Sachs & Co. | 3/18/20 | 192 | |||
USD | 135,187 | PLN | 520,899 | UBS AG | 3/18/20 | (2,137 | ) | ||
SEK | 3,402,501 | USD | 363,577 | Goldman Sachs & Co. | 3/18/20 | 1,002 | |||
USD | 149,896 | SEK | 1,396,222 | Goldman Sachs & Co. | 3/18/20 | 290 | |||
SGD | 6,915 | USD | 5,108 | Bank of America N.A. | 3/31/20 | 38 | |||
USD | 43,017 | SGD | 58,226 | Bank of America N.A. | 3/31/20 | (315 | ) | ||
USD | 206,949 | THB | 6,245,711 | Goldman Sachs & Co. | 3/18/20 | (1,934 | ) | ||
$ | (3,901 | ) |
16
FUTURES CONTRACTS PURCHASED | ||||||||||||
Reference Entity | Contracts | Expiration Date | Notional Amount | Underlying Contract Value | Unrealized Appreciation (Depreciation) | |||||||
MSCI Emerging Markets Index | 2 | March 2020 | $ | 100 | $ | 112,020 | $ | 1,477 | ||||
U.S. Treasury 10-Year Notes | 1 | March 2020 | $ | 100,000 | 128,422 | (1,174 | ) | |||||
U.S. Treasury 10-Year Ultra Notes | 2 | March 2020 | $ | 200,000 | 281,406 | (3,630 | ) | |||||
$ | 521,848 | $ | (3,327 | ) |
TOTAL RETURN SWAP AGREEMENTS | ||||||||||
Counterparty | Floating Rate Index | Pay/Receive Floating Rate Index at Termination | Fixed Rate | Termination Date | Notional Amount | Value* | ||||
Bank of America N.A. | CPURNSA | Receive | 1.41% | 8/27/20 | $ | 700,000 | $ | 14,929 |
* Amount represents value and unrealized appreciation (depreciation).
NOTES TO SCHEDULE OF INVESTMENTS | |||||
ADR | - | American Depositary Receipt | MTN | - | Medium Term Note |
AUD | - | Australian Dollar | MXN | - | Mexican Peso |
BRL | - | Brazilian Real | MYR | - | Malaysian Ringgit |
CAD | - | Canadian Dollar | NOK | - | Norwegian Krone |
CLP | - | Chilean Peso | PEN | - | Peruvian Sol |
CPURNSA | - | U.S. Consumer Price Index Urban Consumers Not Seasonally Adjusted Index | PHP | - | Philippine Peso |
PLN | - | Polish Zloty | |||
GBP | - | British Pound | SEK | - | Swedish Krona |
HKD | - | Hong Kong Dollar | SEQ | - | Sequential Payer |
IDR | - | Indonesian Rupiah | SGD | - | Singapore Dollar |
ILS | - | Israeli Shekel | THB | - | Thai Baht |
INR | - | Indian Rupee | USD | - | United States Dollar |
JPY | - | Japanese Yen | VRN | - | Variable Rate Note. The rate adjusts periodically based upon the terms set forth in the security’s offering documents. The rate shown is effective at the period end and the reference rate and spread, if any, is indicated. |
KZT | - | Kazakhstani Tenge | |||
LIBOR | - | London Interbank Offered Rate | |||
(1) | Non-income producing. |
(2) | Security, or a portion thereof, is on loan. At the period end, the aggregate value of securities on loan was $34,336. The amount of securities on loan indicated may not correspond with the securities on loan identified because securities with pending sales are in the process of recall from the brokers. |
(3) | Security, or a portion thereof, has been pledged at the custodian bank or with a broker for collateral requirements on forward foreign currency exchange contracts, futures contracts and/or swap agreements. At the period end, the aggregate value of securities pledged was $24,577. |
(4) | Security was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration, normally to qualified institutional investors. The aggregate value of these securities at the period end was $926,348, which represented 8.1% of total net assets. |
(5) | Investment of cash collateral from securities on loan. At the period end, the aggregate market value of the collateral held by the fund was $35,323, which includes securities collateral of $9,073. |
See Notes to Financial Statements.
17
Statement of Assets and Liabilities |
DECEMBER 31, 2019 (UNAUDITED) | |||
Assets | |||
Investment securities, at value (cost of $10,414,475) — including $34,336 of securities on loan | $ | 11,376,402 | |
Investment made with cash collateral received for securities on loan, at value (cost of $26,250) | 26,250 | ||
Total investment securities, at value (cost of $10,440,725) | 11,402,652 | ||
Cash | 357 | ||
Foreign currency holdings, at value (cost of $55) | 56 | ||
Deposits with broker for futures contracts | 5,200 | ||
Receivable for investments sold | 27,553 | ||
Receivable for capital shares sold | 152 | ||
Receivable for variation margin on futures contracts | 310 | ||
Unrealized appreciation on forward foreign currency exchange contracts | 47,601 | ||
Swap agreements, at value | 14,929 | ||
Interest and dividends receivable | 31,223 | ||
Securities lending receivable | 46 | ||
Other assets | 176 | ||
11,530,255 | |||
Liabilities | |||
Payable for collateral received for securities on loan | 26,250 | ||
Payable for capital shares redeemed | 15,430 | ||
Payable for variation margin on futures contracts | 453 | ||
Unrealized depreciation on forward foreign currency exchange contracts | 51,502 | ||
Accrued management fees | 8,333 | ||
Distribution and service fees payable | 1,353 | ||
103,321 | |||
Net Assets | $ | 11,426,934 | |
Net Assets Consist of: | |||
Capital (par value and paid-in surplus) | $ | 15,866,775 | |
Distributable earnings | (4,439,841 | ) | |
$ | 11,426,934 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | ||||
Investor Class, $0.01 Par Value | $7,696,288 | 712,217 | $10.81 | |||
I Class, $0.01 Par Value | $725,085 | 66,709 | $10.87 | |||
A Class, $0.01 Par Value | $1,681,204 | 157,025 | $10.71* | |||
C Class, $0.01 Par Value | $1,151,701 | 112,292 | $10.26 | |||
R Class, $0.01 Par Value | $24,521 | 2,321 | $10.56 | |||
R5 Class, $0.01 Par Value | $148,135 | 13,634 | $10.87 |
*Maximum offering price $11.36 (net asset value divided by 0.9425).
See Notes to Financial Statements.
18
Statement of Operations |
FOR THE SIX MONTHS ENDED DECEMBER 31, 2019 (UNAUDITED) | |||
Investment Income (Loss) | |||
Income: | |||
Interest | $ | 64,377 | |
Dividends (net of foreign taxes withheld of $908) | 54,277 | ||
Securities lending, net | 295 | ||
118,949 | |||
Expenses: | |||
Management fees | 50,551 | ||
Distribution and service fees: | |||
A Class | 2,193 | ||
C Class | 5,951 | ||
R Class | 56 | ||
Directors' fees and expenses | 448 | ||
Other expenses | 143 | ||
59,342 | |||
Net investment income (loss) | 59,607 | ||
Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investment transactions | 350,935 | ||
Forward foreign currency exchange contract transactions | (11,890 | ) | |
Futures contract transactions | (4,097 | ) | |
Swap agreement transactions | (21,351 | ) | |
Foreign currency translation transactions | (457 | ) | |
313,140 | |||
Change in net unrealized appreciation (depreciation) on: | |||
Investments | 22,649 | ||
Forward foreign currency exchange contracts | (9,352 | ) | |
Futures contracts | (10,822 | ) | |
Swap agreements | 23,015 | ||
Translation of assets and liabilities in foreign currencies | (5 | ) | |
25,485 | |||
Net realized and unrealized gain (loss) | 338,625 | ||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 398,232 |
See Notes to Financial Statements.
19
Statement of Changes in Net Assets |
SIX MONTHS ENDED DECEMBER 31, 2019 (UNAUDITED) AND YEAR ENDED JUNE 30, 2019 | ||||||
Increase (Decrease) in Net Assets | December 31, 2019 | June 30, 2019 | ||||
Operations | ||||||
Net investment income (loss) | $ | 59,607 | $ | 220,684 | ||
Net realized gain (loss) | 313,140 | (71,743 | ) | |||
Change in net unrealized appreciation (depreciation) | 25,485 | 387,462 | ||||
Net increase (decrease) in net assets resulting from operations | 398,232 | 536,403 | ||||
Distributions to Shareholders | ||||||
From earnings: | ||||||
Investor Class | (143,280 | ) | (217,230 | ) | ||
I Class | (14,493 | ) | (81,827 | ) | ||
A Class | (29,756 | ) | (44,517 | ) | ||
C Class | (16,689 | ) | (23,878 | ) | ||
R Class | (357 | ) | (357 | ) | ||
R5 Class | (2,686 | ) | (3,410 | ) | ||
Decrease in net assets from distributions | (207,261 | ) | (371,219 | ) | ||
Capital Share Transactions | ||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | (569,194 | ) | (3,552,653 | ) | ||
Net increase (decrease) in net assets | (378,223 | ) | (3,387,469 | ) | ||
Net Assets | ||||||
Beginning of period | 11,805,157 | 15,192,626 | ||||
End of period | $ | 11,426,934 | $ | 11,805,157 |
See Notes to Financial Statements.
20
Notes to Financial Statements |
DECEMBER 31, 2019 (UNAUDITED)
1. Organization
American Century Quantitative Equity Funds, Inc. (the corporation) is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company and is organized as a Maryland corporation. Multi-Asset Real Return Fund (the fund) is one fund in a series issued by the corporation. The fund’s investment objective is to seek total real return.
The fund offers the Investor Class, I Class, A Class, C Class, R Class and R5 Class. The A Class may incur an initial sales charge. The A Class and C Class may be subject to a contingent deferred sales charge.
2. Significant Accounting Policies
The following is a summary of significant accounting policies consistently followed by the fund in preparation of its financial statements. The fund is an investment company and follows accounting and reporting guidance in accordance with accounting principles generally accepted in the United States of America. This may require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from these estimates. Management evaluated the impact of events or transactions occurring through the date the financial statements were issued that would merit recognition or disclosure.
Investment Valuations — The fund determines the fair value of its investments and computes its net asset value per share at the close of regular trading (usually 4 p.m. Eastern time) on the New York Stock Exchange (NYSE) on each day the NYSE is open. The Board of Directors has adopted valuation policies and procedures to guide the investment advisor in the fund’s investment valuation process and to provide methodologies for the oversight of the fund’s pricing function.
Equity securities that are listed or traded on a domestic securities exchange are valued at the last reported sales price or at the official closing price as provided by the exchange. Equity securities traded on foreign securities exchanges are generally valued at the closing price of such securities on the exchange where primarily traded or at the close of the NYSE, if that is earlier. If no last sales price is reported, or if local convention or regulation so provides, the mean of the latest bid and asked prices may be used. Securities traded over-the-counter are valued at the mean of the latest bid and asked prices, the last sales price, or the official closing price. Equity securities initially expressed in local currencies are translated into U.S. dollars at the mean of the appropriate currency exchange rate at the close of the NYSE as provided by an independent pricing service.
Fixed income securities are valued at the evaluated mean as provided by independent pricing services or at the mean of the most recent bid and asked prices as provided by investment dealers. Corporate bonds, U.S. Treasury and Government Agency securities, convertible bonds, municipal securities, and sovereign governments and agencies are valued using market models that consider trade data, quotations from dealers and active market makers, relevant yield curve and spread data, creditworthiness, trade data or market information on comparable securities, and other relevant security specific information. Mortgage-related and asset-backed securities are valued based on models that consider trade data, prepayment and default projections, benchmark yield and spread data and estimated cash flows of each tranche of the issuer. Collateralized loan obligations are valued based on discounted cash flow models that consider trade and economic data, prepayment assumptions and default projections.
Open-end management investment companies are valued at the reported net asset value per share. Exchange-traded futures contracts are valued at the settlement price as provided by the appropriate exchange. Swap agreements are valued at an evaluated mean as provided by independent pricing services or independent brokers. Forward foreign currency exchange contracts are valued at the mean of the appropriate forward exchange rate at the close of the NYSE as provided by an independent pricing service.
21
If the fund determines that the market price for an investment is not readily available or the valuation methods mentioned above do not reflect an investment’s fair value, such investment is valued as determined in good faith by the Board of Directors or its delegate, in accordance with policies and procedures adopted by the Board of Directors. In its determination of fair value, the fund may review several factors including, but not limited to, market information regarding the specific investment or comparable investments and correlation with other investment types, futures indices or general market indicators. Circumstances that may cause the fund to use these procedures to value an investment include, but are not limited to: an investment has been declared in default or is distressed; trading in a security has been suspended during the trading day or a security is not actively trading on its principal exchange; prices received from a regular pricing source are deemed unreliable; or there is a foreign market holiday and no trading occurred.
The fund monitors for significant events occurring after the close of an investment’s primary exchange but before the fund’s net asset value per share is determined. Significant events may include, but are not limited to: corporate announcements and transactions; governmental action and political unrest that could impact a specific investment or an investment sector; or armed conflicts, natural disasters and similar events that could affect investments in a specific country or region. The fund also monitors for significant fluctuations between domestic and foreign markets, as evidenced by the U.S. market or such other indicators that the Board of Directors, or its delegate, deems appropriate. The fund may apply a model-derived factor to the closing price of equity securities traded on foreign securities exchanges. The factor is based on observable market data as provided by an independent pricing service.
Security Transactions — Security transactions are accounted for as of the trade date. Net realized gains and losses are determined on the identified cost basis, which is also used for federal income tax purposes.
Investment Income — Dividend income less foreign taxes withheld, if any, is recorded as of the ex-dividend date. Distributions received on securities that represent a return of capital or long-term capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The fund may estimate the components of distributions received that may be considered nontaxable distributions or long-term capital gain distributions for income tax purposes. Interest income is recorded on the accrual basis and includes paydown gain (loss) and accretion of discounts and amortization of premiums. Inflation adjustments related to inflation-linked debt securities are reflected as interest income. Securities lending income is net of fees and rebates earned by the lending agent for its services.
Foreign Currency Translations — All assets and liabilities initially expressed in foreign currencies are translated into U.S. dollars at prevailing exchange rates at period end. The fund may enter into spot foreign currency exchange contracts to facilitate transactions denominated in a foreign currency. Purchases and sales of investment securities, dividend and interest income, spot foreign currency exchange contracts, and expenses are translated at the rates of exchange prevailing on the respective dates of such transactions. Net realized and unrealized foreign currency exchange gains or losses related to investment securities are a component of net realized gain (loss) on investment transactions and change in net unrealized appreciation (depreciation) on investments, respectively.
Income Tax Status — It is the fund’s policy to distribute substantially all net investment income and net realized gains to shareholders and to otherwise qualify as a regulated investment company under provisions of the Internal Revenue Code. Accordingly, no provision has been made for income taxes. The fund files U.S. federal, state, local and non-U.S. tax returns as applicable. The fund's tax returns are subject to examination by the relevant taxing authority until expiration of the applicable statute of limitations, which is generally three years from the date of filing but can be longer in certain jurisdictions. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination and for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Segregated Assets — In accordance with the 1940 Act, the fund segregates assets on its books and records to cover certain types of investment securities and other financial instruments. American Century Investment Management, Inc. (ACIM) (the investment advisor) monitors, on a daily basis, the securities segregated to ensure the fund designates a sufficient amount of liquid assets, marked-to-market daily. The fund may also receive assets or be required to pledge assets at the custodian bank or with a broker for collateral requirements.
22
Multiple Class — All shares of the fund represent an equal pro rata interest in the net assets of the class to which such shares belong, and have identical voting, dividend, liquidation and other rights and the same terms and conditions, except for class specific expenses and exclusive rights to vote on matters affecting only individual classes. Income, non-class specific expenses, and realized and unrealized capital gains and losses of the fund are allocated to each class of shares based on their relative net assets.
Distributions to Shareholders — Distributions from net investment income, if any, are generally declared and paid quarterly. Distributions from net realized gains, if any, are generally declared and paid annually.
Indemnifications — Under the corporation’s organizational documents, its officers and directors are indemnified against certain liabilities arising out of the performance of their duties to the fund. In addition, in the normal course of business, the fund enters into contracts that provide general indemnifications. The maximum exposure under these arrangements is unknown as this would involve future claims that may be made against a fund. The risk of material loss from such claims is considered by management to be remote.
Securities Lending — Securities are lent to qualified financial institutions and brokers. State Street Bank & Trust Co. serves as securities lending agent to the fund pursuant to a Securities Lending Agreement. The lending of securities exposes the fund to risks such as: the borrowers may fail to return the loaned securities, the borrowers may not be able to provide additional collateral, the fund may experience delays in recovery of the loaned securities or delays in access to collateral, or the fund may experience losses related to the investment collateral. To minimize certain risks, loan counterparties pledge collateral in the form of cash and/or securities. The lending agent has agreed to indemnify the fund in the case of default of any securities borrowed. Cash collateral received is invested in the State Street Navigator Securities Lending Government Money Market Portfolio, a money market mutual fund registered under the 1940 Act. The loans may also be secured by U.S. government securities in an amount at least equal to the market value of the securities loaned, plus accrued interest and dividends, determined on a daily basis and adjusted accordingly. By lending securities, the fund seeks to increase its net investment income through the receipt of interest and fees. Such income is reflected separately within the Statement of Operations. The value of loaned securities and related collateral outstanding at period end, if any, are shown on a gross basis within the Schedule of Investments and Statement of Assets and Liabilities.
The following table reflects a breakdown of transactions accounted for as secured borrowings, the gross obligation by the type of collateral pledged, and the remaining contractual maturity of those transactions as of December 31, 2019.
Remaining Contractual Maturity of Agreements | ||||||||||||
Overnight and Continuous | <30 days | Between 30 & 90 days | >90 days | Total | ||||||||
Securities Lending Transactions(1) | ||||||||||||
Corporate Bonds | $ | 26,250 | — | — | — | $ | 26,250 | |||||
Gross amount of recognized liabilities for securities lending transactions | $ | 26,250 |
(1) | Amount represents the payable for cash collateral received for securities on loan. This will generally be in the Overnight and Continuous column as the securities are typically callable on demand. |
3. Fees and Transactions with Related Parties
Certain officers and directors of the corporation are also officers and/or directors of American Century Companies, Inc. (ACC). The corporation’s investment advisor, ACIM, the corporation's distributor, American Century Investment Services, Inc. (ACIS), and the corporation’s transfer agent, American Century Services, LLC, are wholly owned, directly or indirectly, by ACC.
23
Management Fees — The corporation has entered into a management agreement with ACIM, under which ACIM provides the fund with investment advisory and management services in exchange for a single, unified management fee (the fee) per class. The agreement provides that all expenses of managing and operating the fund, except distribution and service fees, brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), and extraordinary expenses, will be paid by ACIM. The fee is computed and accrued daily based on each class's daily net assets and paid monthly in arrears. The difference in the fee among the classes is a result of their separate arrangements for non-Rule 12b-1 shareholder services. It is not the result of any difference in advisory or custodial fees or other expenses related to the management of the fund’s assets, which do not vary by class. The fee consists of (1) an Investment Category Fee based on the daily net assets of the fund and certain other accounts managed by the investment advisor that are in the same broad investment category as the fund and (2) a Complex Fee based on the assets of all the funds in the American Century Investments family of funds.
The Investment Category Fee range, the Complex Fee range and the effective annual management fee for each class for the period ended December 31, 2019 are as follows:
Investment Category Fee Range | Complex Fee Range | Effective Annual Management Fee | |
Investor Class | 0.5754% to 0.6929% | 0.2500% to 0.3100% | 0.88% |
I Class | 0.0500% to 0.1100% | 0.68% | |
A Class | 0.2500% to 0.3100% | 0.88% | |
C Class | 0.2500% to 0.3100% | 0.88% | |
R Class | 0.2500% to 0.3100% | 0.88% | |
R5 Class | 0.0500% to 0.1100% | 0.68% |
Distribution and Service Fees — The Board of Directors has adopted a separate Master Distribution and Individual Shareholder Services Plan for each of the A Class, C Class and R Class (collectively the plans), pursuant to Rule 12b-1 of the 1940 Act. The plans provide that the A Class will pay ACIS an annual distribution and service fee of 0.25%. The plans provide that the C Class will pay ACIS an annual distribution and service fee of 1.00%, of which 0.25% is paid for individual shareholder services and 0.75% is paid for distribution services. The plans provide that the R Class will pay ACIS an annual distribution and service fee of 0.50%. The fees are computed and accrued daily based on each class’s daily net assets and paid monthly in arrears. The fees are used to pay financial intermediaries for distribution and individual shareholder services. Fees incurred under the plans during the period ended December 31, 2019 are detailed in the Statement of Operations.
Directors' Fees and Expenses — The Board of Directors is responsible for overseeing the investment advisor’s management and operations of the fund. The directors receive detailed information about the fund and its investment advisor regularly throughout the year, and meet at least quarterly with management of the investment advisor to review reports about fund operations. The fund’s officers do not receive compensation from the fund.
Interfund Transactions — The fund may enter into security transactions with other American Century Investments funds and other client accounts of the investment advisor, in accordance with the 1940 Act rules and procedures adopted by the Board of Directors. The rules and procedures require, among other things, that these transactions be effected at the independent current market price of the security. During the period, the interfund purchases and sales were $28,347 and $106,594, respectively. The effect of interfund transactions on the Statement of Operations was $3,274 in net realized gain (loss) on investment transactions.
4. Investment Transactions
Purchases of investment securities, excluding short-term investments, for the period ended December 31, 2019 totaled $9,050,136, of which $1,732,333 represented U.S. Treasury and Government Agency obligations.
Sales of investment securities, excluding short-term investments, for the period ended December 31, 2019 totaled $9,070,835, of which $97,246 represented U.S. Treasury and Government Agency obligations.
24
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended December 31, 2019 | Year ended June 30, 2019 | |||||||||
Shares | Amount | Shares | Amount | |||||||
Investor Class/Shares Authorized | 50,000,000 | 50,000,000 | ||||||||
Sold | 22,142 | $ | 235,900 | 35,868 | $ | 369,261 | ||||
Issued in reinvestment of distributions | 12,460 | 131,206 | 18,871 | 196,512 | ||||||
Redeemed | (66,444 | ) | (705,964 | ) | (186,972 | ) | (1,931,702 | ) | ||
(31,842 | ) | (338,858 | ) | (132,233 | ) | (1,365,929 | ) | |||
I Class/Shares Authorized | 25,000,000 | 25,000,000 | ||||||||
Sold | 1,566 | 16,855 | 213,456 | 2,211,956 | ||||||
Issued in reinvestment of distributions | 1,272 | 13,462 | 7,669 | 80,421 | ||||||
Redeemed | (7,076 | ) | (75,277 | ) | (420,741 | ) | (4,234,360 | ) | ||
(4,238 | ) | (44,960 | ) | (199,616 | ) | (1,941,983 | ) | |||
A Class/Shares Authorized | 30,000,000 | 30,000,000 | ||||||||
Sold | 25 | 255 | 5,005 | 50,760 | ||||||
Issued in reinvestment of distributions | 2,837 | 29,623 | 4,289 | 44,337 | ||||||
Redeemed | (15,572 | ) | (164,035 | ) | (23,915 | ) | (243,421 | ) | ||
(12,710 | ) | (134,157 | ) | (14,621 | ) | (148,324 | ) | |||
C Class/Shares Authorized | 20,000,000 | 20,000,000 | ||||||||
Sold | — | — | 297 | 3,000 | ||||||
Issued in reinvestment of distributions | 1,588 | 15,913 | 2,288 | 22,754 | ||||||
Redeemed | (7,940 | ) | (80,120 | ) | (14,147 | ) | (137,649 | ) | ||
(6,352 | ) | (64,207 | ) | (11,562 | ) | (111,895 | ) | |||
R Class/Shares Authorized | 15,000,000 | 15,000,000 | ||||||||
Sold | 489 | 5,083 | 700 | 7,033 | ||||||
Issued in reinvestment of distributions | 35 | 357 | 35 | 357 | ||||||
Redeemed | (157 | ) | (1,621 | ) | (234 | ) | (2,400 | ) | ||
367 | 3,819 | 501 | 4,990 | |||||||
R5 Class/Shares Authorized | 50,000,000 | 50,000,000 | ||||||||
Sold | 617 | 6,571 | 704 | 7,268 | ||||||
Issued in reinvestment of distributions | 254 | 2,686 | 326 | 3,410 | ||||||
Redeemed | (8 | ) | (88 | ) | (18 | ) | (190 | ) | ||
863 | 9,169 | 1,012 | 10,488 | |||||||
Net increase (decrease) | (53,912 | ) | $ | (569,194 | ) | (356,519 | ) | $ | (3,552,653 | ) |
6. Fair Value Measurements
The fund’s investments valuation process is based on several considerations and may use multiple inputs to determine the fair value of the investments held by the fund. In conformity with accounting principles generally accepted in the United States of America, the inputs used to determine a valuation are classified into three broad levels.
• | Level 1 valuation inputs consist of unadjusted quoted prices in an active market for identical investments. |
• | Level 2 valuation inputs consist of direct or indirect observable market data (including quoted prices for comparable investments, evaluations of subsequent market events, interest rates, prepayment speeds, credit risk, etc.). These inputs also consist of quoted prices for identical investments initially expressed in local currencies that are adjusted through translation into U.S. dollars. |
• | Level 3 valuation inputs consist of unobservable data (including a fund’s own assumptions). |
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The level classification is based on the lowest level input that is significant to the fair valuation measurement. The valuation inputs are not necessarily an indication of the risks associated with investing in these securities or other financial instruments.
The following is a summary of the level classifications as of period end. The Schedule of Investments provides additional information on the fund’s portfolio holdings.
Level 1 | Level 2 | Level 3 | ||||||
Assets | ||||||||
Investment Securities | ||||||||
Common Stocks | ||||||||
Aerospace and Defense | $ | 277,070 | $ | 38,587 | — | |||
Chemicals | 151,905 | 29,743 | — | |||||
Commercial Services and Supplies | 114,955 | 2,154 | — | |||||
Diversified Telecommunication Services | 28,735 | 29,049 | — | |||||
Equity Real Estate Investment Trusts (REITs) | 874,512 | 389,232 | — | |||||
Food and Staples Retailing | 104,951 | 30,227 | — | |||||
Household Durables | — | 14,789 | — | |||||
IT Services | 352,258 | 8,854 | — | |||||
Machinery | 103,637 | 34,887 | — | |||||
Media | 75,594 | 31,467 | — | |||||
Metals and Mining | 11,575 | 35,936 | — | |||||
Oil, Gas and Consumable Fuels | 82,708 | 69,076 | — | |||||
Pharmaceuticals | 234,002 | 60,702 | — | |||||
Real Estate Management and Development | 8,948 | 359,678 | — | |||||
Semiconductors and Semiconductor Equipment | 160,299 | 32,776 | — | |||||
Other Industries | 2,594,810 | — | — | |||||
U.S. Treasury Securities | — | 2,181,729 | — | |||||
Corporate Bonds | — | 390,615 | — | |||||
Commercial Mortgage-Backed Securities | — | 385,011 | — | |||||
Collateralized Mortgage Obligations | — | 383,413 | — | |||||
Asset-Backed Securities | — | 350,174 | — | |||||
Collateralized Loan Obligations | — | 345,019 | — | |||||
Exchange-Traded Funds | 306,166 | — | — | |||||
Temporary Cash Investments | 691,159 | — | — | |||||
Temporary Cash Investments - Securities Lending Collateral | 26,250 | — | — | |||||
$ | 6,199,534 | $ | 5,203,118 | — | ||||
Other Financial Instruments | ||||||||
Futures Contracts | $ | 1,477 | — | — | ||||
Swap Agreements | — | $ | 14,929 | — | ||||
Forward Foreign Currency Exchange Contracts | — | 47,601 | — | |||||
$ | 1,477 | $ | 62,530 | — | ||||
Liabilities | ||||||||
Other Financial Instruments | ||||||||
Futures Contracts | $ | 4,804 | — | — | ||||
Forward Foreign Currency Exchange Contracts | — | $ | 51,502 | — | ||||
$ | 4,804 | $ | 51,502 | — |
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7. Derivative Instruments
Equity Price Risk — The fund is subject to equity price risk in the normal course of pursuing its investment objectives. A fund may enter into futures contracts based on an equity index in order to manage its exposure to changes in market conditions. A fund may purchase futures contracts to gain exposure to increases in market value or sell futures contracts to protect against a decline in market value. Upon entering into a futures contract, a fund is required to deposit either cash or securities in an amount equal to a certain percentage of the contract value (initial margin). Subsequent payments (variation margin) are made or received daily, in cash, by a fund. The variation margin is equal to the daily change in the contract value and is recorded as unrealized gains and losses. A fund recognizes a realized gain or loss when the contract is closed or expires. Net realized and unrealized gains or losses occurring during the holding period of futures contracts are a component of net realized gain (loss) on futures contract transactions and change in net unrealized appreciation (depreciation) on futures contracts, respectively. One of the risks of entering into futures contracts is the possibility that the change in value of the contract may not correlate with the changes in value of the underlying securities. During the period, the fund participated in equity price risk derivative instruments for temporary investment purposes.
Foreign Currency Risk — The fund is subject to foreign currency exchange rate risk in the normal course of pursuing its investment objectives. The value of foreign investments held by a fund may be significantly affected by changes in foreign currency exchange rates. The dollar value of a foreign security generally decreases when the value of the dollar rises against the foreign currency in which the security is denominated and tends to increase when the value of the dollar declines against such foreign currency. A fund may enter into forward foreign currency exchange contracts to reduce a fund's exposure to foreign currency exchange rate fluctuations or to gain exposure to the fluctuations in the value of foreign currencies. The net U.S. dollar value of foreign currency underlying all contractual commitments held by a fund and the resulting unrealized appreciation or depreciation are determined daily. Realized gain or loss is recorded upon the termination of the contract. Net realized and unrealized gains or losses occurring during the holding period of forward foreign currency exchange contracts are a component of net realized gain (loss) on forward foreign currency exchange contract transactions and change in net unrealized appreciation (depreciation) on forward foreign currency exchange contracts, respectively. A fund bears the risk of an unfavorable change in the foreign currency exchange rate underlying the forward contract. Additionally, losses, up to the fair value, may arise if the counterparties do not perform under the contract terms. The fund's average U.S. dollar exposure to foreign currency risk derivative instruments held during the period was $18,474,188.
Interest Rate Risk — The fund is subject to interest rate risk in the normal course of pursuing its investment objectives. The value of bonds generally declines as interest rates rise. A fund may enter into futures contracts based on a bond index or a specific underlying security. A fund may purchase futures contracts to gain exposure to increases in market value or sell futures contracts to protect against a decline in market value. Upon entering into a futures contract, a fund will segregate cash, cash equivalents or other appropriate liquid securities on its records in amounts sufficient to meet requirements. Subsequent payments (variation margin) are made or received daily, in cash, by a fund. The variation margin is equal to the daily change in the contract value and is recorded as unrealized gains and losses. A fund recognizes a realized gain or loss when the futures contract is closed or expires. Net realized and unrealized gains or losses occurring during the holding period of futures contracts are a component of net realized gain (loss) on futures contract transactions and change in net unrealized appreciation (depreciation) on futures contracts, respectively. One of the risks of entering into futures contracts is the possibility that the change in value of the contract may not correlate with the changes in value of the underlying securities. The fund's average notional exposure to interest rate risk derivative instruments held during the period was $300,000 futures contracts purchased.
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Other Contracts — A fund may enter into total return swap agreements in order to attempt to obtain or preserve a particular return or spread at a lower cost than obtaining a return or spread through purchases and/or sales of instruments in other markets or gain exposure to certain markets in the most economical way possible. A fund will segregate cash, cash equivalents or other appropriate liquid securities on its records in amounts sufficient to meet requirements. Changes in value, including the periodic amounts of interest to be paid or received on swap agreements, are recorded as unrealized appreciation (depreciation) on swap agreements. Upon entering into a centrally cleared swap, a fund is required to deposit cash or securities (initial margin) with a financial intermediary in an amount equal to a certain percentage of the notional amount. Subsequent payments (variation margin) are made or received daily, in cash, by a fund. The variation margin is equal to the daily change in the value and is a component of unrealized gains and losses. Realized gain or loss is recorded upon receipt or payment of a periodic settlement or termination of swap agreements. Net realized and unrealized gains or losses occurring during the holding period of swap agreements are a component of net realized gain (loss) on swap agreement transactions and change in net unrealized appreciation (depreciation) on swap agreements, respectively. The risks of entering into swap agreements include the possible lack of liquidity, failure of the counterparty to meet its obligations, and that there may be unfavorable changes in the underlying investments or instruments, including inflationary risk. The fund's average notional amount held during the period was $783,333.
Value of Derivative Instruments as of December 31, 2019
Asset Derivatives | Liability Derivatives | |||||||
Type of Risk Exposure | Location on Statement of Assets and Liabilities | Value | Location on Statement of Assets and Liabilities | Value | ||||
Equity Price Risk | Receivable for variation margin on futures contracts* | $ | 310 | Payable for variation margin on futures contracts* | — | |||
Foreign Currency Risk | Unrealized appreciation on forward foreign currency exchange contracts | 47,601 | Unrealized depreciation on forward foreign currency exchange contracts | $ | 51,502 | |||
Interest Rate Risk | Receivable for variation margin on futures contracts* | — | Payable for variation margin on futures contracts* | 453 | ||||
Other Contracts | Swap agreements | 14,929 | Swap agreements | — | ||||
$ | 62,840 | $ | 51,955 |
* | Included in the unrealized appreciation (depreciation) on futures contracts as reported in the Schedule of Investments. |
Effect of Derivative Instruments on the Statement of Operations for the Six Months Ended December 31, 2019
Net Realized Gain (Loss) | Change in Net Unrealized Appreciation (Depreciation) | |||||||
Type of Risk Exposure | Location on Statement of Operations | Value | Location on Statement of Operations | Value | ||||
Equity Price Risk | Net realized gain (loss) on futures contract transactions | $ | (17,135 | ) | Change in net unrealized appreciation (depreciation) on futures contracts | $ | 1,477 | |
Foreign Currency Risk | Net realized gain (loss) on forward foreign currency exchange contract transactions | (11,890 | ) | Change in net unrealized appreciation (depreciation) on forward foreign currency exchange contracts | (9,352 | ) | ||
Interest Rate Risk | Net realized gain (loss) on futures contract transactions | 13,038 | Change in net unrealized appreciation (depreciation) on futures contracts | (12,299 | ) | |||
Other Contracts | Net realized gain (loss) on swap agreement transactions | (21,351 | ) | Change in net unrealized appreciation (depreciation) on swap agreements | 23,015 | |||
$ | (37,338 | ) | $ | 2,841 |
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8. Risk Factors
There are certain risks involved in investing in foreign securities. These risks include those resulting from political events (such as civil unrest, national elections and imposition of exchange controls), social and economic events (such as labor strikes and rising inflation), and natural disasters. Securities of foreign issuers may be less liquid and more volatile. Investing in emerging markets or a significant portion of assets in one country or region may accentuate these risks.
The fund’s investment process may result in high portfolio turnover, which could mean high transaction costs, affecting both performance and capital gains tax liabilities to investors.
9. Federal Tax Information
The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
As of period end, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $ | 10,584,413 | |
Gross tax appreciation of investments | $ | 853,051 | |
Gross tax depreciation of investments | (34,812 | ) | |
Net tax appreciation (depreciation) of investments | $ | 818,239 |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the realization to ordinary income for tax purposes of unrealized gains on investments in passive foreign investment companies.
As of June 30, 2019, the fund had accumulated short-term capital losses of $(1,117,386) and accumulated long-term capital losses of $(4,452,249), which represent net capital loss carryovers that may be used to offset future realized capital gains for federal income tax purposes. The capital loss carryovers may be carried forward for an unlimited period. Future capital loss carryover utilization in any given year may be subject to Internal Revenue Code limitations.
10. Recently Issued Accounting Standards
In March 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2017-08, “Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20), Premium Amortization on Purchased Callable Debt Securities” (ASU 2017-08). ASU 2017-08 amends the amortization period for certain purchased callable debt securities held at a premium, shortening such period to the earliest call date. The amendments are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The adoption of ASU 2017-08 did not materially impact the financial statements.
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Financial Highlights |
For a Share Outstanding Throughout the Years Ended June 30 (except as noted) | |||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||
Income From Investment Operations: | Ratio to Average Net Assets of: | ||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Distributions From Net Investment Income | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Operating Expenses (before expense waiver) | Net Investment Income (Loss) | Net Investment Income (Loss) (before expense waiver) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
Investor Class | |||||||||||||||
2019(3) | $10.63 | 0.06 | 0.31 | 0.37 | (0.19) | $10.81 | 3.58% | 0.89%(4) | 0.89%(4) | 1.14%(4) | 1.14%(4) | 84% | $7,696 | ||
2019 | $10.35 | 0.17 | 0.37 | 0.54 | (0.26) | $10.63 | 5.33% | 0.89% | 0.91% | 1.68% | 1.66% | 241% | $7,906 | ||
2018 | $9.80 | 0.16 | 0.58 | 0.74 | (0.19) | $10.35 | 7.57% | 0.89% | 1.09% | 1.61% | 1.41% | 160% | $9,067 | ||
2017 | $9.43 | 0.16 | 0.21 | 0.37 | — | $9.80 | 3.92% | 0.89% | 1.09% | 1.68% | 1.48% | 173% | $13,250 | ||
2016 | $9.54 | 0.04 | (0.15) | (0.11) | — | $9.43 | (1.15)% | 0.90% | 1.10% | 0.47% | 0.27% | 152% | $14,230 | ||
2015 | $10.50 | 0.02 | (0.89) | (0.87) | (0.09) | $9.54 | (8.35)% | 0.89% | 1.09% | 0.24% | 0.04% | 93% | $24,054 | ||
I Class | |||||||||||||||
2019(3) | $10.69 | 0.07 | 0.32 | 0.39 | (0.21) | $10.87 | 3.66% | 0.69%(4) | 0.69%(4) | 1.34%(4) | 1.34%(4) | 84% | $725 | ||
2019 | $10.40 | 0.18 | 0.39 | 0.57 | (0.28) | $10.69 | 5.56% | 0.69% | 0.71% | 1.88% | 1.86% | 241% | $758 | ||
2018 | $9.85 | 0.19 | 0.57 | 0.76 | (0.21) | $10.40 | 7.74% | 0.69% | 0.89% | 1.81% | 1.61% | 160% | $2,813 | ||
2017 | $9.46 | 0.18 | 0.21 | 0.39 | — | $9.85 | 4.12% | 0.69% | 0.89% | 1.88% | 1.68% | 173% | $1,608 | ||
2016 | $9.55 | 0.08 | (0.17) | (0.09) | — | $9.46 | (0.94)% | 0.70% | 0.90% | 0.67% | 0.47% | 152% | $1,384 | ||
2015 | $10.53 | 0.04 | (0.89) | (0.85) | (0.13) | $9.55 | (8.15)% | 0.69% | 0.89% | 0.44% | 0.24% | 93% | $1,102 |
For a Share Outstanding Throughout the Years Ended June 30 (except as noted) | |||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||
Income From Investment Operations: | Ratio to Average Net Assets of: | ||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Distributions From Net Investment Income | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Operating Expenses (before expense waiver) | Net Investment Income (Loss) | Net Investment Income (Loss) (before expense waiver) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
A Class | |||||||||||||||
2019(3) | $10.53 | 0.05 | 0.31 | 0.36 | (0.18) | $10.71 | 3.48% | 1.14%(4) | 1.14%(4) | 0.89%(4) | 0.89%(4) | 84% | $1,681 | ||
2019 | $10.26 | 0.15 | 0.36 | 0.51 | (0.24) | $10.53 | 5.07% | 1.14% | 1.16% | 1.43% | 1.41% | 241% | $1,787 | ||
2018 | $9.73 | 0.14 | 0.56 | 0.70 | (0.17) | $10.26 | 7.15% | 1.14% | 1.34% | 1.36% | 1.16% | 160% | $1,892 | ||
2017 | $9.38 | 0.13 | 0.22 | 0.35 | — | $9.73 | 3.73% | 1.14% | 1.34% | 1.43% | 1.23% | 173% | $1,964 | ||
2016 | $9.51 | 0.03 | (0.16) | (0.13) | — | $9.38 | (1.37)% | 1.15% | 1.35% | 0.22% | 0.02% | 152% | $4,587 | ||
2015 | $10.45 | —(5) | (0.89) | (0.89) | (0.05) | $9.51 | (8.59)% | 1.14% | 1.34% | (0.01)% | (0.21)% | 93% | $8,385 | ||
C Class | |||||||||||||||
2019(3) | $10.09 | 0.01 | 0.30 | 0.31 | (0.14) | $10.26 | 3.12% | 1.89%(4) | 1.89%(4) | 0.14%(4) | 0.14%(4) | 84% | $1,152 | ||
2019 | $9.86 | 0.07 | 0.35 | 0.42 | (0.19) | $10.09 | 4.25% | 1.89% | 1.91% | 0.68% | 0.66% | 241% | $1,197 | ||
2018 | $9.35 | 0.06 | 0.54 | 0.60 | (0.09) | $9.86 | 6.42% | 1.89% | 2.09% | 0.61% | 0.41% | 160% | $1,284 | ||
2017 | $9.09 | 0.06 | 0.20 | 0.26 | — | $9.35 | 2.86% | 1.89% | 2.09% | 0.68% | 0.48% | 173% | $1,655 | ||
2016 | $9.28 | (0.05) | (0.14) | (0.19) | — | $9.09 | (2.05)% | 1.90% | 2.10% | (0.53)% | (0.73)% | 152% | $2,310 | ||
2015 | $10.23 | (0.08) | (0.87) | (0.95) | — | $9.28 | (9.29)% | 1.89% | 2.09% | (0.76)% | (0.96)% | 93% | $5,479 |
For a Share Outstanding Throughout the Years Ended June 30 (except as noted) | |||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||
Income From Investment Operations: | Ratio to Average Net Assets of: | ||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Distributions From Net Investment Income | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Operating Expenses (before expense waiver) | Net Investment Income (Loss) | Net Investment Income (Loss) (before expense waiver) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
R Class | |||||||||||||||
2019(3) | $10.39 | 0.03 | 0.31 | 0.34 | (0.17) | $10.56 | 3.30% | 1.39%(4) | 1.39%(4) | 0.64%(4) | 0.64%(4) | 84% | $25 | ||
2019 | $10.14 | 0.12 | 0.36 | 0.48 | (0.23) | $10.39 | 4.73% | 1.39% | 1.41% | 1.18% | 1.16% | 241% | $20 | ||
2018 | $9.61 | 0.11 | 0.56 | 0.67 | (0.14) | $10.14 | 6.98% | 1.39% | 1.59% | 1.11% | 0.91% | 160% | $15 | ||
2017 | $9.29 | 0.11 | 0.21 | 0.32 | — | $9.61 | 3.44% | 1.39% | 1.59% | 1.18% | 0.98% | 173% | $113 | ||
2016 | $9.44 | 0.01 | (0.16) | (0.15) | — | $9.29 | (1.59)% | 1.40% | 1.60% | (0.03)% | (0.23)% | 152% | $105 | ||
2015 | $10.38 | (0.03) | (0.89) | (0.92) | (0.02) | $9.44 | (8.88)% | 1.39% | 1.59% | (0.26)% | (0.46)% | 93% | $106 | ||
R5 Class | |||||||||||||||
2019(3) | $10.68 | 0.07 | 0.33 | 0.40 | (0.21) | $10.87 | 3.76% | 0.69%(4) | 0.69%(4) | 1.34%(4) | 1.34%(4) | 84% | $148 | ||
2019 | $10.40 | 0.20 | 0.36 | 0.56 | (0.28) | $10.68 | 5.46% | 0.69% | 0.71% | 1.88% | 1.86% | 241% | $136 | ||
2018 | $9.85 | 0.19 | 0.57 | 0.76 | (0.21) | $10.40 | 7.74% | 0.69% | 0.89% | 1.81% | 1.61% | 160% | $122 | ||
2017(6) | $9.77 | 0.05 | 0.03 | 0.08 | — | $9.85 | 0.82% | 0.69%(4) | 0.89%(4) | 2.42%(4) | 2.22%(4) | 173%(7) | $5 |
Notes to Financial Highlights |
(1) | Computed using average shares outstanding throughout the period. |
(2) | Total returns are calculated based on the net asset value of the last business day and do not reflect applicable sales charges, if any. Total returns for periods less than one year are not annualized. |
(3) | Six months ended December 31, 2019 (unaudited). |
(4) | Annualized. |
(5) | Per-share amount was less than $0.005. |
(6) | April 10, 2017 (commencement of sale) through June 30, 2017. |
(7) | Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended June 30, 2017. |
See Notes to Financial Statements.
Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain retirement accounts are subject to federal income tax withholding, unless you elect not to have withholding apply*. Tax will be withheld on the total amount withdrawn even though you may be receiving amounts that are not subject to withholding, such as nondeductible contributions. In such case, excess amounts of withholding could occur. You may adjust your withholding election so that a greater or lesser amount will be withheld.
If you don’t want us to withhold on this amount, you must notify us to not withhold the federal income tax. You may notify us in writing or in certain situations by telephone or through other electronic means. For systematic withdrawals, your withholding election will remain in effect until revoked or changed by filing a new election. You have the right to revoke your election at any time and change your withholding percentage for future distributions.
Remember, even if you elect not to have income tax withheld, you are liable for paying income tax on the taxable portion of your withdrawal. If you elect not to have income tax withheld or you don’t have enough income tax withheld, you may be responsible for payment of estimated tax. You may incur penalties under the estimated tax rules if your withholding and estimated tax payments are not sufficient. You can reduce or defer the income tax on a distribution by directly or indirectly rolling such distribution over to another IRA or eligible plan. You should consult your tax advisor for additional information.
State tax will be withheld if, at the time of your distribution, your address is within one of the mandatory withholding states and you have federal income tax withheld (or as otherwise required by state law). State taxes will be withheld from your distribution in accordance with the respective state rules.
*Some 403(b), 457 and qualified retirement plan distributions may be subject to 20% mandatory withholding, as they are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
Descriptions of the principles and policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund are available without charge, upon request, by calling 1-800-345-2021 or visiting American Century Investments’ website at americancentury.com/proxy. A description of the policies is also available on the Securities and Exchange Commission’s website at sec.gov. Information regarding how the investment advisor voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on americancentury.com/proxy. It is also available at sec.gov.
Quarterly Portfolio Disclosure
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-Q or as an exhibit to its reports on Form N-PORT. The fund’s Forms N-Q and Form N-PORT reports are available on the SEC’s website at sec.gov. The fund also makes its complete schedule of portfolio holdings for the most recent quarter of its fiscal year available on its website at americancentury.com and, upon request, by calling 1-800-345-2021.
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Contact Us | americancentury.com | |
Automated Information Line | 1-800-345-8765 | |
Investor Services Representative | 1-800-345-2021 or 816-531-5575 | |
Investors Using Advisors | 1-800-378-9878 | |
Business, Not-For-Profit, Employer-Sponsored Retirement Plans | 1-800-345-3533 | |
Banks and Trust Companies, Broker-Dealers, Financial Professionals, Insurance Companies | 1-800-345-6488 | |
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American Century Quantitative Equity Funds, Inc. | ||
Investment Advisor: American Century Investment Management, Inc. Kansas City, Missouri | ||
This report and the statements it contains are submitted for the general information of our shareholders. The report is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus. | ||
©2020 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-91458 2002 |
Semiannual Report | |
December 31, 2019 | |
NT Disciplined Growth Fund | |
Investor Class (ANTDX) | |
G Class (ANDGX) |
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the fund’s shareholder reports like this one will no longer be sent by mail, unless you specifically request paper copies of the reports from the fund or from your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the fund or your financial intermediary electronically by calling or sending an email request to your appropriate contacts as listed on the back cover of this report.
You may elect to receive all future reports in paper free of charge. You can inform the fund or your financial intermediary that you wish to continue receiving paper copies of your shareholder reports by calling or sending an email request to your appropriate contacts as listed on the back cover of this report. Your election to receive reports in paper will apply to all funds held with the fund complex/your financial intermediary.
Table of Contents |
Any opinions expressed in this report reflect those of the author as of the date of the report, and do not necessarily represent the opinions of American Century Investments® or any other person in the American Century Investments organization. Any such opinions are subject to change at any time based upon market or other conditions and American Century Investments disclaims any responsibility to update such opinions. These opinions may not be relied upon as investment advice and, because investment decisions made by American Century Investments funds are based on numerous factors, may not be relied upon as an indication of trading intent on behalf of any American Century Investments fund. Security examples are used for representational purposes only and are not intended as recommendations to purchase or sell securities. Performance information for comparative indices and securities is provided to American Century Investments by third party vendors. To the best of American Century Investments’ knowledge, such information is accurate at the time of printing.
Fund Characteristics |
DECEMBER 31, 2019 | |
Top Ten Holdings | % of net assets |
Apple, Inc. | 9.0% |
Microsoft Corp. | 7.7% |
Amazon.com, Inc. | 5.9% |
Alphabet, Inc., Class A | 4.1% |
Facebook, Inc., Class A | 3.0% |
Visa, Inc., Class A | 2.0% |
Mastercard, Inc., Class A | 1.9% |
NIKE, Inc., Class B | 1.6% |
Zoetis, Inc. | 1.6% |
Vertex Pharmaceuticals, Inc. | 1.4% |
Top Five Industries | % of net assets |
Software | 17.8% |
Technology Hardware, Storage and Peripherals | 9.0% |
IT Services | 8.3% |
Interactive Media and Services | 8.0% |
Internet and Direct Marketing Retail | 6.7% |
Types of Investments in Portfolio | % of net assets |
Common Stocks | 96.2% |
Temporary Cash Investments | 2.9% |
Other Assets and Liabilities | 0.9% |
2
Shareholder Fee Example |
Fund shareholders may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption/exchange fees; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in your fund and to compare these costs with the ongoing cost of investing in other mutual funds.
The example is based on an investment of $1,000 made at the beginning of the period and held for the entire period from July 1, 2019 to December 31, 2019.
Actual Expenses
The table provides information about actual account values and actual expenses for each class. You may use the information, together with the amount you invested, to estimate the expenses that you paid over the period. First, identify the share class you own. Then simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The table also provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio of each class of your fund and an assumed rate of return of 5% per year before expenses, which is not the actual return of a fund’s share class. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) or redemption/exchange fees. Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Beginning Account Value 7/1/19 | Ending Account Value 12/31/19 | Expenses Paid During Period(1) 7/1/19 - 12/31/19 | Annualized Expense Ratio(1) | |
Actual | ||||
Investor Class | $1,000 | $1,090.90 | $5.31 | 1.01% |
G Class | $1,000 | $1,097.30 | $0.05 | 0.01% |
Hypothetical | ||||
Investor Class | $1,000 | $1,020.06 | $5.13 | 1.01% |
G Class | $1,000 | $1,025.09 | $0.05 | 0.01% |
(1) | Expenses are equal to the class's annualized expense ratio listed in the table above, multiplied by the average account value over the period, multiplied by 184, the number of days in the most recent fiscal half-year, divided by 366, to reflect the one-half year period. Annualized expense ratio reflects actual expenses, including any applicable fee waivers or expense reimbursements and excluding any acquired fund fees and expenses. |
3
Schedule of Investments |
DECEMBER 31, 2019 (UNAUDITED)
Shares | Value | |||
COMMON STOCKS — 96.2% | ||||
Aerospace and Defense — 1.4% | ||||
Boeing Co. (The) | 2,990 | $ | 974,022 | |
HEICO Corp. | 28,743 | 3,281,014 | ||
Northrop Grumman Corp. | 3,796 | 1,305,710 | ||
5,560,746 | ||||
Banks — 0.6% | ||||
Comerica, Inc. | 15,073 | 1,081,488 | ||
SVB Financial Group(1) | 5,570 | 1,398,293 | ||
2,479,781 | ||||
Beverages† | ||||
Coca-Cola Co. (The) | 446 | 24,686 | ||
Biotechnology — 3.7% | ||||
AbbVie, Inc. | 24,921 | 2,206,505 | ||
Amgen, Inc. | 10,661 | 2,570,047 | ||
Biogen, Inc.(1) | 1,709 | 507,112 | ||
Incyte Corp.(1) | 41,385 | 3,613,738 | ||
Vertex Pharmaceuticals, Inc.(1) | 26,282 | 5,754,444 | ||
14,651,846 | ||||
Building Products — 2.0% | ||||
Builders FirstSource, Inc.(1) | 56,948 | 1,447,049 | ||
Lennox International, Inc. | 7,014 | 1,711,205 | ||
Masco Corp. | 42,281 | 2,029,065 | ||
Simpson Manufacturing Co., Inc. | 15,910 | 1,276,459 | ||
Universal Forest Products, Inc. | 34,758 | 1,657,957 | ||
8,121,735 | ||||
Capital Markets — 2.8% | ||||
Artisan Partners Asset Management, Inc., Class A | 58,370 | 1,886,518 | ||
MarketAxess Holdings, Inc. | 5,982 | 2,267,836 | ||
Moody's Corp. | 3,702 | 878,892 | ||
MSCI, Inc. | 20,237 | 5,224,789 | ||
Piper Jaffray Cos. | 7,125 | 569,572 | ||
PJT Partners, Inc., Class A | 12,445 | 561,643 | ||
11,389,250 | ||||
Chemicals — 0.7% | ||||
PPG Industries, Inc. | 16,681 | 2,226,747 | ||
Sherwin-Williams Co. (The) | 864 | 504,178 | ||
2,730,925 | ||||
Commercial Services and Supplies — 1.9% | ||||
Cimpress plc(1) | 10,754 | 1,352,531 | ||
Cintas Corp. | 2,378 | 639,872 | ||
MSA Safety, Inc. | 14,484 | 1,830,198 | ||
Republic Services, Inc. | 16,819 | 1,507,487 | ||
Tetra Tech, Inc. | 12,511 | 1,077,948 |
4
Shares | Value | |||
Waste Management, Inc. | 10,273 | $ | 1,170,711 | |
7,578,747 | ||||
Communications Equipment — 0.7% | ||||
Cisco Systems, Inc. | 27,831 | 1,334,775 | ||
Motorola Solutions, Inc. | 8,833 | 1,423,349 | ||
2,758,124 | ||||
Construction and Engineering — 0.3% | ||||
MasTec, Inc.(1) | 20,740 | 1,330,678 | ||
Consumer Finance — 0.2% | ||||
American Express Co. | 7,665 | 954,216 | ||
Containers and Packaging — 0.4% | ||||
Ball Corp. | 26,774 | 1,731,475 | ||
Distributors — 0.1% | ||||
Core-Mark Holding Co., Inc. | 18,846 | 512,423 | ||
Diversified Consumer Services — 0.4% | ||||
Bright Horizons Family Solutions, Inc.(1) | 11,986 | 1,801,376 | ||
Electronic Equipment, Instruments and Components — 2.0% | ||||
CDW Corp. | 25,677 | 3,667,703 | ||
Keysight Technologies, Inc.(1) | 28,802 | 2,955,949 | ||
National Instruments Corp. | 35,409 | 1,499,217 | ||
8,122,869 | ||||
Entertainment — 1.5% | ||||
Electronic Arts, Inc.(1) | 10,585 | 1,137,993 | ||
Netflix, Inc.(1) | 1,121 | 362,722 | ||
Take-Two Interactive Software, Inc.(1) | 26,725 | 3,271,942 | ||
Zynga, Inc., Class A(1) | 208,238 | 1,274,417 | ||
6,047,074 | ||||
Equity Real Estate Investment Trusts (REITs) — 1.6% | ||||
American Tower Corp. | 19,498 | 4,481,030 | ||
SBA Communications Corp. | 7,790 | 1,877,312 | ||
6,358,342 | ||||
Food and Staples Retailing — 0.4% | ||||
Costco Wholesale Corp. | 4,825 | 1,418,164 | ||
Food Products — 0.2% | ||||
Hershey Co. (The) | 1,188 | 174,612 | ||
John B Sanfilippo & Son, Inc. | 8,678 | 792,128 | ||
966,740 | ||||
Health Care Equipment and Supplies — 4.8% | ||||
Align Technology, Inc.(1) | 4,416 | 1,232,241 | ||
DexCom, Inc.(1) | 18,653 | 4,080,157 | ||
Hologic, Inc.(1) | 19,833 | 1,035,481 | ||
IDEXX Laboratories, Inc.(1) | 12,974 | 3,387,901 | ||
Masimo Corp.(1) | 13,919 | 2,200,037 | ||
Penumbra, Inc.(1) | 6,656 | 1,093,381 | ||
ResMed, Inc. | 15,066 | 2,334,778 | ||
Stryker Corp. | 10,382 | 2,179,597 | ||
West Pharmaceutical Services, Inc. | 10,980 | 1,650,623 | ||
19,194,196 |
5
Shares | Value | |||
Health Care Providers and Services — 2.0% | ||||
Chemed Corp. | 9,262 | $ | 4,068,426 | |
CorVel Corp.(1) | 12,815 | 1,119,519 | ||
UnitedHealth Group, Inc. | 9,435 | 2,773,701 | ||
7,961,646 | ||||
Health Care Technology — 1.3% | ||||
Cerner Corp. | 21,188 | 1,554,987 | ||
NextGen Healthcare, Inc.(1) | 17,597 | 282,784 | ||
Omnicell, Inc.(1) | 15,792 | 1,290,522 | ||
Veeva Systems, Inc., Class A(1) | 16,252 | 2,286,007 | ||
5,414,300 | ||||
Hotels, Restaurants and Leisure — 1.3% | ||||
Chipotle Mexican Grill, Inc.(1) | 1,428 | 1,195,393 | ||
Hilton Worldwide Holdings, Inc. | 5,075 | 562,868 | ||
Starbucks Corp. | 33,710 | 2,963,783 | ||
Yum! Brands, Inc. | 5,499 | 553,915 | ||
5,275,959 | ||||
Household Durables — 0.2% | ||||
NVR, Inc.(1) | 92 | 350,374 | ||
Sonos, Inc.(1) | 27,391 | 427,847 | ||
778,221 | ||||
Household Products — 0.6% | ||||
Colgate-Palmolive Co. | 15,408 | 1,060,687 | ||
Procter & Gamble Co. (The) | 10,038 | 1,253,746 | ||
2,314,433 | ||||
Insurance — 0.4% | ||||
Arch Capital Group Ltd.(1) | 38,400 | 1,646,976 | ||
Interactive Media and Services — 8.0% | ||||
Alphabet, Inc., Class A(1) | 12,198 | 16,337,879 | ||
Facebook, Inc., Class A(1) | 58,925 | 12,094,356 | ||
IAC/InterActiveCorp(1) | 3,976 | 990,462 | ||
Match Group, Inc.(1) | 31,018 | 2,546,888 | ||
31,969,585 | ||||
Internet and Direct Marketing Retail — 6.7% | ||||
Amazon.com, Inc.(1) | 12,830 | 23,707,787 | ||
eBay, Inc. | 61,202 | 2,210,005 | ||
Etsy, Inc.(1) | 24,214 | 1,072,680 | ||
26,990,472 | ||||
IT Services — 8.3% | ||||
Accenture plc, Class A | 10,380 | 2,185,717 | ||
Akamai Technologies, Inc.(1) | 10,630 | 918,219 | ||
Booz Allen Hamilton Holding Corp. | 22,978 | 1,634,425 | ||
CSG Systems International, Inc. | 12,311 | 637,463 | ||
EVERTEC, Inc. | 42,741 | 1,454,904 | ||
Jack Henry & Associates, Inc. | 11,758 | 1,712,788 | ||
Mastercard, Inc., Class A | 24,930 | 7,443,849 | ||
PayPal Holdings, Inc.(1) | 53,105 | 5,744,368 | ||
Square, Inc., Class A(1) | 18,094 | 1,131,961 |
6
Shares | Value | |||
VeriSign, Inc.(1) | 12,509 | $ | 2,410,234 | |
Visa, Inc., Class A | 43,005 | 8,080,639 | ||
33,354,567 | ||||
Life Sciences Tools and Services — 0.6% | ||||
Agilent Technologies, Inc. | 11,840 | 1,010,070 | ||
Illumina, Inc.(1) | 3,616 | 1,199,572 | ||
2,209,642 | ||||
Machinery — 0.8% | ||||
Allison Transmission Holdings, Inc. | 30,425 | 1,470,136 | ||
Graco, Inc. | 24,136 | 1,255,072 | ||
Toro Co. (The) | 5,700 | 454,119 | ||
3,179,327 | ||||
Media — 1.1% | ||||
Cable One, Inc. | 1,629 | 2,424,718 | ||
Sirius XM Holdings, Inc. | 283,042 | 2,023,750 | ||
4,448,468 | ||||
Metals and Mining — 0.5% | ||||
Royal Gold, Inc. | 17,148 | 2,096,343 | ||
Pharmaceuticals — 2.7% | ||||
Bristol-Myers Squibb Co. | 19,529 | 1,253,566 | ||
Horizon Therapeutics plc(1) | 45,273 | 1,638,883 | ||
Merck & Co., Inc. | 19,764 | 1,797,536 | ||
Zoetis, Inc. | 47,779 | 6,323,551 | ||
11,013,536 | ||||
Professional Services — 0.6% | ||||
Insperity, Inc. | 12,862 | 1,106,646 | ||
Robert Half International, Inc. | 18,400 | 1,161,960 | ||
2,268,606 | ||||
Road and Rail — 0.2% | ||||
Landstar System, Inc. | 6,286 | 715,787 | ||
Semiconductors and Semiconductor Equipment — 2.9% | ||||
Broadcom, Inc. | 14,525 | 4,590,191 | ||
Inphi Corp.(1) | 15,712 | 1,163,002 | ||
Lam Research Corp. | 7,336 | 2,145,046 | ||
Qorvo, Inc.(1) | 8,131 | 945,066 | ||
QUALCOMM, Inc. | 13,965 | 1,232,132 | ||
Texas Instruments, Inc. | 13,130 | 1,684,448 | ||
11,759,885 | ||||
Software — 17.8% | ||||
Adobe, Inc.(1) | 8,486 | 2,798,768 | ||
ANSYS, Inc.(1) | 7,946 | 2,045,380 | ||
Aspen Technology, Inc.(1) | 11,944 | 1,444,388 | ||
Atlassian Corp. plc, Class A(1) | 22,655 | 2,726,303 | ||
Cadence Design Systems, Inc.(1) | 55,019 | 3,816,118 | ||
Cornerstone OnDemand, Inc.(1) | 18,633 | 1,090,962 | ||
Fair Isaac Corp.(1) | 4,149 | 1,554,547 | ||
Fortinet, Inc.(1) | 21,396 | 2,284,237 | ||
Intuit, Inc. | 18,673 | 4,891,019 |
7
Shares | Value | |||
Manhattan Associates, Inc.(1) | 10,688 | $ | 852,368 | |
Microsoft Corp. | 195,426 | 30,818,680 | ||
Oracle Corp. (New York) | 24,989 | 1,323,917 | ||
Palo Alto Networks, Inc.(1) | 8,745 | 2,022,281 | ||
Proofpoint, Inc.(1) | 11,192 | 1,284,618 | ||
RingCentral, Inc., Class A(1) | 6,567 | 1,107,656 | ||
salesforce.com, Inc.(1) | 6,040 | 982,345 | ||
ServiceNow, Inc.(1) | 10,060 | 2,840,139 | ||
Synopsys, Inc.(1) | 25,870 | 3,601,104 | ||
VMware, Inc., Class A(1) | 17,257 | 2,619,440 | ||
Zendesk, Inc.(1) | 15,027 | 1,151,519 | ||
71,255,789 | ||||
Specialty Retail — 2.9% | ||||
AutoZone, Inc.(1) | 3,255 | 3,877,714 | ||
Home Depot, Inc. (The) | 10,921 | 2,384,928 | ||
Murphy USA, Inc.(1) | 10,964 | 1,282,788 | ||
O'Reilly Automotive, Inc.(1) | 2,000 | 876,520 | ||
Ross Stores, Inc. | 27,229 | 3,170,000 | ||
11,591,950 | ||||
Technology Hardware, Storage and Peripherals — 9.0% | ||||
Apple, Inc. | 122,585 | 35,997,085 | ||
Textiles, Apparel and Luxury Goods — 1.9% | ||||
lululemon athletica, Inc.(1) | 5,049 | 1,169,702 | ||
NIKE, Inc., Class B | 64,484 | 6,532,874 | ||
7,702,576 | ||||
Thrifts and Mortgage Finance — 0.4% | ||||
Essent Group Ltd. | 28,096 | 1,460,711 | ||
Trading Companies and Distributors — 0.3% | ||||
GMS, Inc.(1) | 39,621 | 1,072,937 | ||
TOTAL COMMON STOCKS (Cost $271,694,327) | 386,212,194 | |||
TEMPORARY CASH INVESTMENTS — 2.9% | ||||
Repurchase Agreement, BMO Capital Markets Corp., (collateralized by various U.S. Treasury obligations, 2.75% - 3.75%, 9/15/21 - 11/15/43, valued at $9,574,006), in a joint trading account at 1.35%, dated 12/31/19, due 1/2/20 (Delivery value $9,372,800) | 9,372,097 | |||
Repurchase Agreement, Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 1.625%, 12/15/22, valued at $2,128,147), at 0.65%, dated 12/31/19, due 1/2/20 (Delivery value $2,086,075) | 2,086,000 | |||
State Street Institutional U.S. Government Money Market Fund, Premier Class | 5,477 | 5,477 | ||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $11,463,574) | 11,463,574 | |||
TOTAL INVESTMENT SECURITIES — 99.1% (Cost $283,157,901) | 397,675,768 | |||
OTHER ASSETS AND LIABILITIES — 0.9% | 3,795,110 | |||
TOTAL NET ASSETS — 100.0% | $ | 401,470,878 |
8
FUTURES CONTRACTS PURCHASED | |||||||||||
Reference Entity | Contracts | Expiration Date | Notional Amount | Underlying Contract Value | Unrealized Appreciation (Depreciation) | ||||||
NASDAQ 100 E-Mini | 26 | March 2020 | $ | 520 | $ | 4,551,170 | $ | 4,484 | |||
S&P 500 E-Mini | 56 | March 2020 | $ | 2,800 | 9,047,080 | 8,075 | |||||
$ | 13,598,250 | $ | 12,559 |
NOTES TO SCHEDULE OF INVESTMENTS |
† | Category is less than 0.05% of total net assets. |
(1) | Non-income producing. |
See Notes to Financial Statements.
9
Statement of Assets and Liabilities |
DECEMBER 31, 2019 (UNAUDITED) | |||
Assets | |||
Investment securities, at value (cost of $283,157,901) | $ | 397,675,768 | |
Deposits with broker for futures contracts | 540,000 | ||
Receivable for investments sold | 13,973,762 | ||
Receivable for variation margin on futures contracts | 428,384 | ||
Dividends and interest receivable | 104,000 | ||
412,721,914 | |||
Liabilities | |||
Payable for capital shares redeemed | 11,185,857 | ||
Accrued management fees | 65,179 | ||
11,251,036 | |||
Net Assets | $ | 401,470,878 | |
Net Assets Consist of: | |||
Capital (par value and paid-in surplus) | $ | 251,726,135 | |
Distributable earnings | 149,744,743 | ||
$ | 401,470,878 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | ||||
Investor Class, $0.01 Par Value | $73,395,372 | 5,774,181 | $12.71 | |||
G Class, $0.01 Par Value | $328,075,506 | 25,761,746 | $12.73 |
See Notes to Financial Statements.
10
Statement of Operations |
FOR THE SIX MONTHS ENDED DECEMBER 31, 2019 (UNAUDITED) | |||
Investment Income (Loss) | |||
Income: | |||
Dividends | $ | 2,208,876 | |
Interest | 80,316 | ||
2,289,192 | |||
Expenses: | |||
Management fees | 1,974,453 | ||
Directors' fees and expenses | 17,912 | ||
Other expenses | 1,480 | ||
1,993,845 | |||
Fees waived(1) | (1,475,556 | ) | |
518,289 | |||
Net investment income (loss) | 1,770,903 | ||
Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investment transactions | 49,959,648 | ||
Futures contract transactions | 444,037 | ||
50,403,685 | |||
Change in net unrealized appreciation (depreciation) on: | |||
Investments | (11,652,117 | ) | |
Futures contracts | 12,559 | ||
(11,639,558 | ) | ||
Net realized and unrealized gain (loss) | 38,764,127 | ||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 40,535,030 |
(1) | Amount consists of $3,993 and $1,471,563 for Investor Class and G Class, respectively. |
See Notes to Financial Statements.
11
Statement of Changes in Net Assets |
SIX MONTHS ENDED DECEMBER 31, 2019 (UNAUDITED) AND YEAR ENDED JUNE 30, 2019 | ||||||
Increase (Decrease) in Net Assets | December 31, 2019 | June 30, 2019 | ||||
Operations | ||||||
Net investment income (loss) | $ | 1,770,903 | $ | 5,127,445 | ||
Net realized gain (loss) | 50,403,685 | 27,327,955 | ||||
Change in net unrealized appreciation (depreciation) | (11,639,558 | ) | 4,676,422 | |||
Net increase (decrease) in net assets resulting from operations | 40,535,030 | 37,131,822 | ||||
Distributions to Shareholders | ||||||
From earnings: | ||||||
Investor Class | (3,798,350 | ) | (12,696,691 | ) | ||
G Class | (19,254,258 | ) | (48,148,677 | ) | ||
Decrease in net assets from distributions | (23,052,608 | ) | (60,845,368 | ) | ||
Capital Share Transactions | ||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | (99,151,571 | ) | (44,155,811 | ) | ||
Net increase (decrease) in net assets | (81,669,149 | ) | (67,869,357 | ) | ||
Net Assets | ||||||
Beginning of period | 483,140,027 | 551,009,384 | ||||
End of period | $ | 401,470,878 | $ | 483,140,027 |
See Notes to Financial Statements.
12
Notes to Financial Statements |
DECEMBER 31, 2019 (UNAUDITED)
1. Organization
American Century Quantitative Equity Funds, Inc. (the corporation) is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company and is organized as a Maryland corporation. NT Disciplined Growth Fund (the fund) is one fund in a series issued by the corporation. The fund’s investment objective is to seek long-term capital growth. The fund is not permitted to invest in securities issued by companies assigned the Global Industry Classification Standard or the Bloomberg Industry Classification Standard for the tobacco industry. The fund offers the Investor Class and G Class.
2. Significant Accounting Policies
The following is a summary of significant accounting policies consistently followed by the fund in preparation of its financial statements. The fund is an investment company and follows accounting and reporting guidance in accordance with accounting principles generally accepted in the United States of America. This may require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from these estimates. Management evaluated the impact of events or transactions occurring through the date the financial statements were issued that would merit recognition or disclosure.
Investment Valuations — The fund determines the fair value of its investments and computes its net asset value per share at the close of regular trading (usually 4 p.m. Eastern time) on the New York Stock Exchange (NYSE) on each day the NYSE is open. The Board of Directors has adopted valuation policies and procedures to guide the investment advisor in the fund’s investment valuation process and to provide methodologies for the oversight of the fund’s pricing function.
Equity securities that are listed or traded on a domestic securities exchange are valued at the last reported sales price or at the official closing price as provided by the exchange. Equity securities traded on foreign securities exchanges are generally valued at the closing price of such securities on the exchange where primarily traded or at the close of the NYSE, if that is earlier. If no last sales price is reported, or if local convention or regulation so provides, the mean of the latest bid and asked prices may be used. Securities traded over-the-counter are valued at the mean of the latest bid and asked prices, the last sales price, or the official closing price.
Open-end management investment companies are valued at the reported net asset value per share. Repurchase agreements are valued at cost, which approximates fair value. Exchange-traded futures contracts are valued at the settlement price as provided by the appropriate exchange.
If the fund determines that the market price for an investment is not readily available or the valuation methods mentioned above do not reflect an investment’s fair value, such investment is valued as determined in good faith by the Board of Directors or its delegate, in accordance with policies and procedures adopted by the Board of Directors. In its determination of fair value, the fund may review several factors including, but not limited to, market information regarding the specific investment or comparable investments and correlation with other investment types, futures indices or general market indicators. Circumstances that may cause the fund to use these procedures to value an investment include, but are not limited to: an investment has been declared in default or is distressed; trading in a security has been suspended during the trading day or a security is not actively trading on its principal exchange; prices received from a regular pricing source are deemed unreliable; or there is a foreign market holiday and no trading occurred.
The fund monitors for significant events occurring after the close of an investment’s primary exchange but before the fund’s net asset value per share is determined. Significant events may include, but are not limited to: corporate announcements and transactions; governmental action and political unrest that could impact a specific investment or an investment sector; or armed conflicts, natural disasters and similar events that could affect investments in a specific country or region. The fund also monitors for significant fluctuations between domestic and foreign markets, as evidenced by the U.S. market or such other indicators that the Board of Directors, or its delegate, deems appropriate. The fund may apply a model-derived factor to the closing price of equity securities traded on foreign securities exchanges. The factor is based on observable market data as provided by an independent pricing service.
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Security Transactions — Security transactions are accounted for as of the trade date. Net realized gains and losses are determined on the identified cost basis, which is also used for federal income tax purposes.
Investment Income — Dividend income less foreign taxes withheld, if any, is recorded as of the ex-dividend date. Distributions received on securities that represent a return of capital or long-term capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The fund may estimate the components of distributions received that may be considered nontaxable distributions or long-term capital gain distributions for income tax purposes. Interest income is recorded on the accrual basis and includes accretion of discounts and amortization of premiums.
Repurchase Agreements — The fund may enter into repurchase agreements with institutions that American Century Investment Management, Inc. (ACIM) (the investment advisor) has determined are creditworthy pursuant to criteria adopted by the Board of Directors. The fund requires that the collateral, represented by securities, received in a repurchase transaction be transferred to the custodian in a manner sufficient to enable the fund to obtain those securities in the event of a default under the repurchase agreement. ACIM monitors, on a daily basis, the securities transferred to ensure the value, including accrued interest, of the securities under each repurchase agreement is equal to or greater than amounts owed to the fund under each repurchase agreement.
Joint Trading Account — Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the fund, along with certain other funds in the American Century Investments family of funds, may transfer uninvested cash balances into a joint trading account. These balances are invested in one or more repurchase agreements that are collateralized by U.S. Treasury or Agency obligations.
Segregated Assets — In accordance with the 1940 Act, the fund segregates assets on its books and records to cover certain types of investment securities and other financial instruments. ACIM monitors, on a daily basis, the securities segregated to ensure the fund designates a sufficient amount of liquid assets, marked-to-market daily. The fund may also receive assets or be required to pledge assets at the custodian bank or with a broker for collateral requirements.
Income Tax Status — It is the fund’s policy to distribute substantially all net investment income and net realized gains to shareholders and to otherwise qualify as a regulated investment company under provisions of the Internal Revenue Code. Accordingly, no provision has been made for income taxes. The fund files U.S. federal, state, local and non-U.S. tax returns as applicable. The fund's tax returns are subject to examination by the relevant taxing authority until expiration of the applicable statute of limitations, which is generally three years from the date of filing but can be longer in certain jurisdictions. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination and for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Multiple Class — All shares of the fund represent an equal pro rata interest in the net assets of the class to which such shares belong, and have identical voting, dividend, liquidation and other rights and the same terms and conditions, except for class specific expenses and exclusive rights to vote on matters affecting only individual classes. Income, non-class specific expenses, and realized and unrealized capital gains and losses of the fund are allocated to each class of shares based on their relative net assets.
Distributions to Shareholders — Distributions from net investment income, if any, are generally declared and paid semiannually. Distributions from net realized gains, if any, are generally declared and paid annually. The fund may elect to treat a portion of its payment to a redeeming shareholder, which represents the pro rata share of undistributed net investment income and net realized gains, as a distribution for federal income tax purposes (tax equalization).
Indemnifications — Under the corporation’s organizational documents, its officers and directors are indemnified against certain liabilities arising out of the performance of their duties to the fund. In addition, in the normal course of business, the fund enters into contracts that provide general indemnifications. The maximum exposure under these arrangements is unknown as this would involve future claims that may be made against a fund. The risk of material loss from such claims is considered by management to be remote.
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3. Fees and Transactions with Related Parties
Certain officers and directors of the corporation are also officers and/or directors of American Century Companies, Inc. (ACC). The corporation’s investment advisor, ACIM, the corporation's distributor, American Century Investment Services, Inc., and the corporation’s transfer agent, American Century Services, LLC, are wholly owned, directly or indirectly, by ACC. Various funds issued by American Century Asset Allocation Portfolios, Inc. own, in aggregate, 100% of the shares of the fund. Related parties do not invest in the fund for the purpose of exercising management or control.
Management Fees — The corporation has entered into a management agreement with ACIM, under which ACIM provides the fund with investment advisory and management services in exchange for a single, unified management fee (the fee) per class. The agreement provides that all expenses of managing and operating the fund, except brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), and extraordinary expenses, will be paid by ACIM. The fee is computed and accrued daily based on each class's daily net assets and paid monthly in arrears. The difference in the fee among the classes is a result of their separate arrangements for non-Rule 12b-1 shareholder services, which may be provided indirectly through another American Century Investments mutual fund. It is not the result of any difference in advisory or custodial fees or other expenses related to the management of the fund’s assets, which do not vary by class. The fee consists of (1) an Investment Category Fee based on the daily net assets of the fund and certain other accounts managed by the investment advisor that are in the same broad investment category as the fund and (2) a Complex Fee based on the assets of all the funds in the American Century Investments family of funds. Effective August 1, 2019, the investment advisor agreed to waive 0.01% of the fund's management fee. The investment advisor expects this waiver to continue until October 31, 2020 and cannot terminate it prior to such date without the approval of the Board of Directors. The investment advisor agreed to waive the G Class’s management fee in its entirety. The investment advisor expects this waiver to remain in effect permanently and cannot terminate it without the approval of the Board of Directors.
The Investment Category Fee range, the Complex Fee range and the effective annual management fee before and after waiver for each class for the period ended December 31, 2019 are as follows:
Investment Category Fee Range | Complex Fee Range | Effective Annual Management Fee | ||
Before Waiver | After Waiver | |||
Investor Class | 0.6880% to 0.8700% | 0.2500% to 0.3100% | 1.01% | 1.00% |
G Class | 0.0500% to 0.1100% | 0.81% | 0.00% |
Directors' Fees and Expenses — The Board of Directors is responsible for overseeing the investment advisor’s management and operations of the fund. The directors receive detailed information about the fund and its investment advisor regularly throughout the year, and meet at least quarterly with management of the investment advisor to review reports about fund operations. The fund’s officers do not receive compensation from the fund.
Interfund Transactions — The fund may enter into security transactions with other American Century Investments funds and other client accounts of the investment advisor, in accordance with the 1940 Act rules and procedures adopted by the Board of Directors. The rules and procedures require, among other things, that these transactions be effected at the independent current market price of the security. During the period, the interfund purchases and sales were $7,452,878 and $8,733,776, respectively. The effect of interfund transactions on the Statement of Operations was $1,242,887 in net realized gain (loss) on investment transactions.
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the period ended December 31, 2019 were $246,445,959 and $379,099,212, respectively.
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5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended December 31, 2019 | Year ended June 30, 2019 | |||||||||
Shares | Amount | Shares | Amount | |||||||
Investor Class/Shares Authorized | 80,000,000 | 80,000,000 | ||||||||
Sold | 1,026,323 | $ | 13,281,162 | 116,272 | $ | 1,236,821 | ||||
Issued in reinvestment of distributions | 300,265 | 3,798,350 | 1,169,815 | 12,696,691 | ||||||
Redeemed | (4,876,856 | ) | (62,104,137 | ) | (1,171,841 | ) | (14,832,929 | ) | ||
(3,550,268 | ) | (45,024,625 | ) | 114,246 | (899,417 | ) | ||||
G Class/Shares Authorized | 330,000,000 | 330,000,000 | ||||||||
Sold | 5,241,123 | 68,152,946 | 2,221,257 | 27,299,692 | ||||||
Issued in reinvestment of distributions | 1,519,673 | 19,254,258 | 4,404,423 | 48,148,677 | ||||||
Redeemed | (10,925,668 | ) | (141,534,150 | ) | (9,437,095 | ) | (118,704,763 | ) | ||
(4,164,872 | ) | (54,126,946 | ) | (2,811,415 | ) | (43,256,394 | ) | |||
Net increase (decrease) | (7,715,140 | ) | $ | (99,151,571 | ) | (2,697,169 | ) | $ | (44,155,811 | ) |
6. Fair Value Measurements
The fund’s investments valuation process is based on several considerations and may use multiple inputs to determine the fair value of the investments held by the fund. In conformity with accounting principles generally accepted in the United States of America, the inputs used to determine a valuation are classified into three broad levels.
• | Level 1 valuation inputs consist of unadjusted quoted prices in an active market for identical investments. |
• | Level 2 valuation inputs consist of direct or indirect observable market data (including quoted prices for comparable investments, evaluations of subsequent market events, interest rates, prepayment speeds, credit risk, etc.). These inputs also consist of quoted prices for identical investments initially expressed in local currencies that are adjusted through translation into U.S. dollars. |
• | Level 3 valuation inputs consist of unobservable data (including a fund’s own assumptions). |
The level classification is based on the lowest level input that is significant to the fair valuation measurement. The valuation inputs are not necessarily an indication of the risks associated with investing in these securities or other financial instruments.
The following is a summary of the level classifications as of period end. The Schedule of Investments provides additional information on the fund’s portfolio holdings.
Level 1 | Level 2 | Level 3 | ||||||
Assets | ||||||||
Investment Securities | ||||||||
Common Stocks | $ | 386,212,194 | — | — | ||||
Temporary Cash Investments | 5,477 | $ | 11,458,097 | — | ||||
$ | 386,217,671 | $ | 11,458,097 | — | ||||
Other Financial Instruments | ||||||||
Futures Contracts | $ | 12,559 | — | — |
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7. Derivative Instruments
Equity Price Risk — The fund is subject to equity price risk in the normal course of pursuing its investment objectives. A fund may enter into futures contracts based on an equity index in order to manage its exposure to changes in market conditions. A fund may purchase futures contracts to gain exposure to increases in market value or sell futures contracts to protect against a decline in market value. Upon entering into a futures contract, a fund is required to deposit either cash or securities in an amount equal to a certain percentage of the contract value (initial margin). Subsequent payments (variation margin) are made or received daily, in cash, by a fund. The variation margin is equal to the daily change in the contract value and is recorded as unrealized gains and losses. A fund recognizes a realized gain or loss when the contract is closed or expires. Net realized and unrealized gains or losses occurring during the holding period of futures contracts are a component of net realized gain (loss) on futures contract transactions and change in net unrealized appreciation (depreciation) on futures contracts, respectively. One of the risks of entering into futures contracts is the possibility that the change in value of the contract may not correlate with the changes in value of the underlying securities. The fund's average notional exposure to equity price risk derivative instruments held during the period was $2,687 futures contracts purchased.
The value of equity price risk derivative instruments as of December 31, 2019, is disclosed on the Statement of Assets and Liabilities as an asset of $428,384 in receivable for variation margin on futures contracts*. For the six months ended December 31, 2019, the effect of equity price risk derivative instruments on the Statement of Operations was $444,037 in net realized gain (loss) on futures contract transactions and $12,559 in change in net unrealized appreciation (depreciation) on futures contracts.
* Included in the unrealized appreciation (depreciation) on futures contracts as reported in the Schedule of Investments.
8. Risk Factors
The fund is owned by a relatively small number of shareholders, and in the event such shareholders redeem, the ongoing operations of the fund may be at risk.
The fund’s investment process may result in high portfolio turnover, which could mean high transaction costs, affecting both performance and capital gains tax liabilities to investors.
9. Federal Tax Information
The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
As of period end, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $ | 284,562,007 | |
Gross tax appreciation of investments | $ | 115,761,323 | |
Gross tax depreciation of investments | (2,647,562 | ) | |
Net tax appreciation (depreciation) of investments | $ | 113,113,761 |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales.
As of June 30, 2019, the fund had post-October capital loss deferrals of $(10,555,342), which represent certain qualified losses that the fund has elected to treat as having been incurred in the following fiscal year for federal income tax purposes.
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Financial Highlights |
For a Share Outstanding Throughout the Years Ended June 30 (except as noted) | |||||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||||
Income From Investment Operations: | Distributions From: | Ratio to Average Net Assets of: | |||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Operating Expenses (before expense waiver) | Net Investment Income (Loss) | Net Investment Income (Loss) (before expense waiver) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
Investor Class | |||||||||||||||||
2019(3) | $12.29 | —(4) | 1.11 | 1.11 | — | (0.69) | (0.69) | $12.71 | 9.09% | 1.01%(5) | 1.02%(5) | (0.02)%(5) | (0.03)%(5) | 55% | $73,395 | ||
2019 | $13.13 | 0.03 | 0.65 | 0.68 | (0.04) | (1.48) | (1.52) | $12.29 | 6.76% | 1.02% | 1.02% | 0.23% | 0.23% | 115% | $114,600 | ||
2018 | $11.41 | 0.03 | 2.10 | 2.13 | (0.03) | (0.38) | (0.41) | $13.13 | 18.85% | 1.01% | 1.01% | 0.22% | 0.22% | 105% | $120,907 | ||
2017 | $9.49 | 0.05 | 1.92 | 1.97 | (0.05) | — | (0.05) | $11.41 | 20.83% | 1.02% | 1.02% | 0.51% | 0.51% | 131% | $106,476 | ||
2016 | $9.77 | 0.06 | (0.27) | (0.21) | (0.07) | — | (0.07) | $9.49 | (2.18)% | 1.02% | 1.02% | 0.62% | 0.62% | 118% | $92,560 | ||
2015(6) | $10.00 | 0.02 | (0.25) | (0.23) | — | — | — | $9.77 | (2.30)% | 1.01%(5) | 1.01%(5) | 0.55%(5) | 0.55%(5) | 29% | $94,459 | ||
G Class | |||||||||||||||||
2019(3) | $12.31 | 0.06 | 1.12 | 1.18 | (0.07) | (0.69) | (0.76) | $12.73 | 9.73% | 0.01%(5) | 0.82%(5) | 0.98%(5) | 0.17%(5) | 55% | $328,076 | ||
2019 | $13.14 | 0.15 | 0.65 | 0.80 | (0.15) | (1.48) | (1.63) | $12.31 | 7.80% | 0.01% | 0.82% | 1.24% | 0.43% | 115% | $368,540 | ||
2018 | $11.41 | 0.15 | 2.10 | 2.25 | (0.14) | (0.38) | (0.52) | $13.14 | 19.98% | 0.07% | 0.81% | 1.16% | 0.42% | 105% | $430,102 | ||
2017 | $9.49 | 0.08 | 1.92 | 2.00 | (0.08) | — | (0.08) | $11.41 | 21.08% | 0.82% | 0.82% | 0.71% | 0.71% | 131% | $449,768 | ||
2016 | $9.78 | 0.08 | (0.28) | (0.20) | (0.09) | — | (0.09) | $9.49 | (2.03)% | 0.82% | 0.82% | 0.82% | 0.82% | 118% | $397,955 | ||
2015(6) | $10.00 | 0.02 | (0.24) | (0.22) | — | — | — | $9.78 | (2.20)% | 0.81%(5) | 0.81%(5) | 0.75%(5) | 0.75%(5) | 29% | $357,113 |
Notes to Financial Highlights |
(1) | Computed using average shares outstanding throughout the period. |
(2) | Total returns are calculated based on the net asset value of the last business day. Total returns for periods less than one year are not annualized. |
(3) | Six months ended December 31, 2019 (unaudited). |
(4) | Per-share amount was less than $0.005. |
(5) | Annualized. |
(6) | March 19, 2015 (fund inception) through June 30, 2015. |
See Notes to Financial Statements.
Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain retirement accounts are subject to federal income tax withholding, unless you elect not to have withholding apply*. Tax will be withheld on the total amount withdrawn even though you may be receiving amounts that are not subject to withholding, such as nondeductible contributions. In such case, excess amounts of withholding could occur. You may adjust your withholding election so that a greater or lesser amount will be withheld.
If you don’t want us to withhold on this amount, you must notify us to not withhold the federal income tax. You may notify us in writing or in certain situations by telephone or through other electronic means. For systematic withdrawals, your withholding election will remain in effect until revoked or changed by filing a new election. You have the right to revoke your election at any time and change your withholding percentage for future distributions.
Remember, even if you elect not to have income tax withheld, you are liable for paying income tax on the taxable portion of your withdrawal. If you elect not to have income tax withheld or you don’t have enough income tax withheld, you may be responsible for payment of estimated tax. You may incur penalties under the estimated tax rules if your withholding and estimated tax payments are not sufficient. You can reduce or defer the income tax on a distribution by directly or indirectly rolling such distribution over to another IRA or eligible plan. You should consult your tax advisor for additional information.
State tax will be withheld if, at the time of your distribution, your address is within one of the mandatory withholding states and you have federal income tax withheld (or as otherwise required by state law). State taxes will be withheld from your distribution in accordance with the respective state rules.
*Some 403(b), 457 and qualified retirement plan distributions may be subject to 20% mandatory withholding, as they are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
Descriptions of the principles and policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund are available without charge, upon request, by calling 1-800-345-2021 or visiting American Century Investments’ website at americancentury.com/proxy. A description of the policies is also available on the Securities and Exchange Commission’s website at sec.gov. Information regarding how the investment advisor voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on americancentury.com/proxy. It is also available at sec.gov.
Quarterly Portfolio Disclosure
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-Q or as an exhibit to its reports on Form N-PORT. The fund’s Forms N-Q and Form N-PORT reports are available on the SEC’s website at sec.gov. The fund also makes its complete schedule of portfolio holdings for the most recent quarter of its fiscal year available on its website at americancentury.com and, upon request, by calling 1-800-345-2021.
20
Notes |
21
Notes |
22
Notes |
23
Notes |
24
Contact Us | americancentury.com | |
Automated Information Line | 1-800-345-8765 | |
Investor Services Representative | 1-800-345-2021 or 816-531-5575 | |
Investors Using Advisors | 1-800-378-9878 | |
Business, Not-For-Profit, Employer-Sponsored Retirement Plans | 1-800-345-3533 | |
Banks and Trust Companies, Broker-Dealers, Financial Professionals, Insurance Companies | 1-800-345-6488 | |
Telecommunications Relay Service for the Deaf | 711 | |
American Century Quantitative Equity Funds, Inc. | ||
Investment Advisor: American Century Investment Management, Inc. Kansas City, Missouri | ||
This report and the statements it contains are submitted for the general information of our shareholders. The report is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus. | ||
©2020 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-91465 2002 |
Semiannual Report | |
December 31, 2019 | |
NT Equity Growth Fund | |
G Class (ACLEX) |
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the fund’s shareholder reports like this one will no longer be sent by mail, unless you specifically request paper copies of the reports from the fund or from your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the fund or your financial intermediary electronically by calling or sending an email request to your appropriate contacts as listed on the back cover of this report.
You may elect to receive all future reports in paper free of charge. You can inform the fund or your financial intermediary that you wish to continue receiving paper copies of your shareholder reports by calling or sending an email request to your appropriate contacts as listed on the back cover of this report. Your election to receive reports in paper will apply to all funds held with the fund complex/your financial intermediary.
Table of Contents |
Any opinions expressed in this report reflect those of the author as of the date of the report, and do not necessarily represent the opinions of American Century Investments® or any other person in the American Century Investments organization. Any such opinions are subject to change at any time based upon market or other conditions and American Century Investments disclaims any responsibility to update such opinions. These opinions may not be relied upon as investment advice and, because investment decisions made by American Century Investments funds are based on numerous factors, may not be relied upon as an indication of trading intent on behalf of any American Century Investments fund. Security examples are used for representational purposes only and are not intended as recommendations to purchase or sell securities. Performance information for comparative indices and securities is provided to American Century Investments by third party vendors. To the best of American Century Investments’ knowledge, such information is accurate at the time of printing.
Fund Characteristics |
DECEMBER 31, 2019 | |
Top Ten Holdings | % of net assets |
Apple, Inc. | 5.7% |
Microsoft Corp. | 4.2% |
Amazon.com, Inc. | 3.3% |
Alphabet, Inc., Class A | 3.2% |
Facebook, Inc., Class A | 2.6% |
JPMorgan Chase & Co. | 1.8% |
Broadcom, Inc. | 1.5% |
Bank of America Corp. | 1.2% |
Biogen, Inc. | 1.2% |
Visa, Inc., Class A | 1.2% |
Top Five Industries | % of net assets |
Software | 8.2% |
Interactive Media and Services | 5.8% |
Technology Hardware, Storage and Peripherals | 5.7% |
Banks | 5.1% |
Internet and Direct Marketing Retail | 5.0% |
Types of Investments in Portfolio | % of net assets |
Common Stocks | 96.3% |
Temporary Cash Investments | 4.9% |
Other Assets and Liabilities | (1.2)% |
2
Shareholder Fee Example |
Fund shareholders may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption/exchange fees; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in your fund and to compare these costs with the ongoing cost of investing in other mutual funds.
The example is based on an investment of $1,000 made at the beginning of the period and held for the entire period from July 1, 2019 to December 31, 2019.
Actual Expenses
The table provides information about actual account values and actual expenses for each class. You may use the information, together with the amount you invested, to estimate the expenses that you paid over the period. First, identify the share class you own. Then simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The table also provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio of each class of your fund and an assumed rate of return of 5% per year before expenses, which is not the actual return of a fund’s share class. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) or redemption/exchange fees. Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Beginning Account Value 7/1/19 | Ending Account Value 12/31/19 | Expenses Paid During Period(1) 7/1/19 - 12/31/19 | Annualized Expense Ratio(1) | |
Actual | ||||
G Class | $1,000 | $1,087.60 | $0.05 | 0.01% |
Hypothetical | ||||
G Class | $1,000 | $1,025.09 | $0.05 | 0.01% |
(1) | Expenses are equal to the class's annualized expense ratio listed in the table above, multiplied by the average account value over the period, multiplied by 184, the number of days in the most recent fiscal half-year, divided by 366, to reflect the one-half year period. Annualized expense ratio reflects actual expenses, including any applicable fee waivers or expense reimbursements and excluding any acquired fund fees and expenses. |
3
Schedule of Investments |
DECEMBER 31, 2019 (UNAUDITED)
Shares | Value | |||
COMMON STOCKS — 96.3% | ||||
Aerospace and Defense — 1.4% | ||||
HEICO Corp. | 19,085 | $ | 2,178,553 | |
Hexcel Corp. | 20,206 | 1,481,302 | ||
Lockheed Martin Corp. | 7,261 | 2,827,288 | ||
Mercury Systems, Inc.(1) | 3,120 | 215,623 | ||
Northrop Grumman Corp. | 3,431 | 1,180,161 | ||
Raytheon Co. | 6,416 | 1,409,852 | ||
9,292,779 | ||||
Air Freight and Logistics — 0.3% | ||||
CH Robinson Worldwide, Inc. | 22,042 | 1,723,684 | ||
Airlines — 0.1% | ||||
Delta Air Lines, Inc. | 16,378 | 957,785 | ||
Auto Components — 0.9% | ||||
BorgWarner, Inc. | 70,780 | 3,070,437 | ||
Gentex Corp. | 87,730 | 2,542,415 | ||
5,612,852 | ||||
Banks — 5.1% | ||||
Bank of America Corp. | 225,779 | 7,951,936 | ||
Comerica, Inc. | 36,149 | 2,593,691 | ||
JPMorgan Chase & Co. | 83,013 | 11,572,012 | ||
M&T Bank Corp. | 13,494 | 2,290,607 | ||
Signature Bank | 12,208 | 1,667,735 | ||
SVB Financial Group(1) | 6,635 | 1,665,650 | ||
Wells Fargo & Co. | 93,732 | 5,042,782 | ||
32,784,413 | ||||
Beverages — 1.4% | ||||
Coca-Cola Co. (The) | 48,107 | 2,662,722 | ||
Monster Beverage Corp.(1) | 59,044 | 3,752,246 | ||
PepsiCo, Inc. | 20,141 | 2,752,671 | ||
9,167,639 | ||||
Biotechnology — 3.1% | ||||
AbbVie, Inc. | 22,539 | 1,995,603 | ||
Alexion Pharmaceuticals, Inc.(1) | 21,663 | 2,342,853 | ||
Amgen, Inc. | 12,998 | 3,133,428 | ||
Biogen, Inc.(1) | 25,933 | 7,695,099 | ||
Gilead Sciences, Inc. | 13,045 | 847,664 | ||
Incyte Corp.(1) | 41,562 | 3,629,194 | ||
19,643,841 | ||||
Building Products — 1.6% | ||||
Builders FirstSource, Inc.(1) | 79,952 | 2,031,580 | ||
Fortune Brands Home & Security, Inc. | 35,974 | 2,350,541 | ||
Johnson Controls International plc | 37,029 | 1,507,451 |
4
Shares | Value | |||
Masco Corp. | 95,393 | $ | 4,577,910 | |
10,467,482 | ||||
Capital Markets — 1.5% | ||||
Artisan Partners Asset Management, Inc., Class A | 51,989 | 1,680,284 | ||
FactSet Research Systems, Inc. | 7,539 | 2,022,714 | ||
Moody's Corp. | 13,010 | 3,088,704 | ||
MSCI, Inc. | 11,073 | 2,858,827 | ||
9,650,529 | ||||
Chemicals — 1.1% | ||||
CF Industries Holdings, Inc. | 8,579 | 409,561 | ||
Ecolab, Inc. | 15,327 | 2,957,958 | ||
NewMarket Corp. | 4,898 | 2,382,975 | ||
Valvoline, Inc. | 68,492 | 1,466,414 | ||
7,216,908 | ||||
Commercial Services and Supplies — 1.6% | ||||
Republic Services, Inc. | 29,259 | 2,622,484 | ||
Tetra Tech, Inc. | 23,864 | 2,056,122 | ||
UniFirst Corp. | 4,568 | 922,645 | ||
Waste Management, Inc. | 40,305 | 4,593,158 | ||
10,194,409 | ||||
Communications Equipment — 1.1% | ||||
Cisco Systems, Inc. | 73,121 | 3,506,883 | ||
Juniper Networks, Inc. | 42,401 | 1,044,337 | ||
Motorola Solutions, Inc. | 16,009 | 2,579,690 | ||
7,130,910 | ||||
Construction and Engineering — 0.4% | ||||
MasTec, Inc.(1) | 35,170 | 2,256,507 | ||
Consumer Finance — 2.2% | ||||
American Express Co. | 23,284 | 2,898,625 | ||
Discover Financial Services | 66,012 | 5,599,138 | ||
Synchrony Financial | 165,623 | 5,964,084 | ||
14,461,847 | ||||
Diversified Financial Services — 0.9% | ||||
Berkshire Hathaway, Inc., Class B(1) | 26,989 | 6,113,009 | ||
Diversified Telecommunication Services — 1.9% | ||||
AT&T, Inc. | 106,023 | 4,143,379 | ||
CenturyLink, Inc. | 131,878 | 1,742,108 | ||
Verizon Communications, Inc. | 107,197 | 6,581,896 | ||
12,467,383 | ||||
Electric Utilities — 0.6% | ||||
IDACORP, Inc. | 14,351 | 1,532,687 | ||
NextEra Energy, Inc. | 8,836 | 2,139,726 | ||
3,672,413 | ||||
Electrical Equipment — 0.3% | ||||
Acuity Brands, Inc. | 12,971 | 1,789,998 | ||
Electronic Equipment, Instruments and Components — 0.9% | ||||
CDW Corp. | 20,149 | 2,878,083 |
5
Shares | Value | |||
Keysight Technologies, Inc.(1) | 30,670 | $ | 3,147,662 | |
6,025,745 | ||||
Entertainment — 2.7% | ||||
Activision Blizzard, Inc. | 102,424 | 6,086,034 | ||
Electronic Arts, Inc.(1) | 64,793 | 6,965,896 | ||
Take-Two Interactive Software, Inc.(1) | 23,649 | 2,895,347 | ||
Walt Disney Co. (The) | 9,856 | 1,425,473 | ||
17,372,750 | ||||
Equity Real Estate Investment Trusts (REITs) — 1.9% | ||||
Alexander & Baldwin, Inc. | 14,220 | 298,051 | ||
American Tower Corp. | 8,170 | 1,877,630 | ||
GEO Group, Inc. (The) | 26,960 | 447,806 | ||
Life Storage, Inc. | 22,989 | 2,489,249 | ||
PS Business Parks, Inc. | 7,005 | 1,154,914 | ||
Public Storage | 11,009 | 2,344,477 | ||
SBA Communications Corp. | 7,177 | 1,729,585 | ||
Weingarten Realty Investors | 57,438 | 1,794,363 | ||
12,136,075 | ||||
Food and Staples Retailing — 0.7% | ||||
Casey's General Stores, Inc. | 8,921 | 1,418,350 | ||
Walgreens Boots Alliance, Inc. | 47,015 | 2,772,004 | ||
4,190,354 | ||||
Food Products — 3.1% | ||||
Campbell Soup Co. | 134,240 | 6,634,141 | ||
General Mills, Inc. | 114,992 | 6,158,971 | ||
Hershey Co. (The) | 35,654 | 5,240,425 | ||
Kellogg Co. | 28,749 | 1,988,281 | ||
20,021,818 | ||||
Health Care Equipment and Supplies — 3.8% | ||||
Abbott Laboratories | 52,156 | 4,530,270 | ||
Baxter International, Inc. | 52,946 | 4,427,345 | ||
Danaher Corp. | 7,779 | 1,193,921 | ||
DENTSPLY SIRONA, Inc. | 37,496 | 2,121,899 | ||
Edwards Lifesciences Corp.(1) | 15,008 | 3,501,216 | ||
Hologic, Inc.(1) | 75,118 | 3,921,911 | ||
Integer Holdings Corp.(1) | 12,574 | 1,011,327 | ||
Stryker Corp. | 17,178 | 3,606,349 | ||
24,314,238 | ||||
Health Care Providers and Services — 1.2% | ||||
Amedisys, Inc.(1) | 17,344 | 2,895,061 | ||
Chemed Corp. | 1,659 | 728,732 | ||
McKesson Corp. | 11,137 | 1,540,470 | ||
UnitedHealth Group, Inc. | 9,739 | 2,863,071 | ||
8,027,334 | ||||
Health Care Technology — 0.7% | ||||
Cerner Corp. | 29,860 | 2,191,425 | ||
Veeva Systems, Inc., Class A(1) | 16,600 | 2,334,956 | ||
4,526,381 |
6
Shares | Value | |||
Hotels, Restaurants and Leisure — 1.3% | ||||
Darden Restaurants, Inc. | 17,684 | $ | 1,927,733 | |
Starbucks Corp. | 71,261 | 6,265,267 | ||
8,193,000 | ||||
Household Durables — 0.3% | ||||
PulteGroup, Inc. | 57,186 | 2,218,817 | ||
Household Products — 2.0% | ||||
Colgate-Palmolive Co. | 66,461 | 4,575,175 | ||
Kimberly-Clark Corp. | 27,564 | 3,791,428 | ||
Procter & Gamble Co. (The) | 34,201 | 4,271,705 | ||
12,638,308 | ||||
Industrial Conglomerates — 0.3% | ||||
Carlisle Cos., Inc. | 13,555 | 2,193,741 | ||
Insurance — 2.6% | ||||
American Financial Group, Inc. | 17,160 | 1,881,594 | ||
Arch Capital Group Ltd.(1) | 58,091 | 2,491,523 | ||
Marsh & McLennan Cos., Inc. | 21,726 | 2,420,494 | ||
Mercury General Corp. | 43,426 | 2,116,149 | ||
Progressive Corp. (The) | 85,592 | 6,196,005 | ||
RenaissanceRe Holdings Ltd. | 9,321 | 1,827,102 | ||
16,932,867 | ||||
Interactive Media and Services — 5.8% | ||||
Alphabet, Inc., Class A(1) | 15,632 | 20,937,345 | ||
Facebook, Inc., Class A(1) | 80,469 | 16,516,262 | ||
37,453,607 | ||||
Internet and Direct Marketing Retail — 5.0% | ||||
Amazon.com, Inc.(1) | 11,599 | 21,433,096 | ||
Booking Holdings, Inc.(1) | 1,490 | 3,060,058 | ||
eBay, Inc. | 150,312 | 5,427,766 | ||
Expedia Group, Inc. | 18,561 | 2,007,187 | ||
31,928,107 | ||||
IT Services — 4.6% | ||||
Accenture plc, Class A | 11,409 | 2,402,393 | ||
Akamai Technologies, Inc.(1) | 21,318 | 1,841,449 | ||
Amdocs Ltd. | 25,678 | 1,853,695 | ||
EVERTEC, Inc. | 31,199 | 1,062,014 | ||
International Business Machines Corp. | 31,926 | 4,279,361 | ||
Mastercard, Inc., Class A | 15,637 | 4,669,052 | ||
PayPal Holdings, Inc.(1) | 28,498 | 3,082,629 | ||
Visa, Inc., Class A | 40,783 | 7,663,126 | ||
Western Union Co. (The) | 99,552 | 2,666,002 | ||
29,519,721 | ||||
Life Sciences Tools and Services — 1.9% | ||||
Agilent Technologies, Inc. | 72,465 | 6,181,989 | ||
Bio-Rad Laboratories, Inc., Class A(1) | 7,177 | 2,655,705 | ||
Illumina, Inc.(1) | 4,411 | 1,463,305 | ||
Thermo Fisher Scientific, Inc. | 6,427 | 2,087,940 | ||
12,388,939 |
7
Shares | Value | |||
Machinery — 2.2% | ||||
Allison Transmission Holdings, Inc. | 109,989 | $ | 5,314,669 | |
Cummins, Inc. | 29,242 | 5,233,148 | ||
Snap-on, Inc. | 22,926 | 3,883,664 | ||
14,431,481 | ||||
Media — 0.6% | ||||
Discovery, Inc., Class C(1) | 52,868 | 1,611,945 | ||
Sirius XM Holdings, Inc. | 277,152 | 1,981,637 | ||
3,593,582 | ||||
Metals and Mining — 0.6% | ||||
Reliance Steel & Aluminum Co. | 12,390 | 1,483,826 | ||
Royal Gold, Inc. | 12,312 | 1,505,142 | ||
Steel Dynamics, Inc. | 33,489 | 1,139,966 | ||
4,128,934 | ||||
Multiline Retail — 0.8% | ||||
Target Corp. | 39,497 | 5,063,910 | ||
Oil, Gas and Consumable Fuels — 2.0% | ||||
Chevron Corp. | 45,799 | 5,519,238 | ||
Exxon Mobil Corp. | 36,673 | 2,559,042 | ||
HollyFrontier Corp. | 93,640 | 4,748,484 | ||
12,826,764 | ||||
Personal Products — 0.4% | ||||
Estee Lauder Cos., Inc. (The), Class A | 11,790 | 2,435,107 | ||
Pharmaceuticals — 3.3% | ||||
Bristol-Myers Squibb Co. | 67,421 | 4,327,754 | ||
Jazz Pharmaceuticals plc(1) | 11,960 | 1,785,389 | ||
Johnson & Johnson | 32,696 | 4,769,366 | ||
Merck & Co., Inc. | 71,465 | 6,499,742 | ||
Pfizer, Inc. | 17,269 | 676,599 | ||
Zoetis, Inc. | 25,689 | 3,399,939 | ||
21,458,789 | ||||
Professional Services — 0.6% | ||||
IHS Markit Ltd.(1) | 17,507 | 1,319,152 | ||
Verisk Analytics, Inc. | 14,864 | 2,219,790 | ||
3,538,942 | ||||
Semiconductors and Semiconductor Equipment — 4.6% | ||||
Applied Materials, Inc. | 86,591 | 5,285,515 | ||
Broadcom, Inc. | 30,729 | 9,710,979 | ||
Intel Corp. | 57,724 | 3,454,781 | ||
KLA Corp. | 19,062 | 3,396,276 | ||
Lam Research Corp. | 10,270 | 3,002,948 | ||
Micron Technology, Inc.(1) | 45,072 | 2,423,972 | ||
Texas Instruments, Inc. | 17,910 | 2,297,674 | ||
29,572,145 | ||||
Software — 8.2% | ||||
Adobe, Inc.(1) | 20,521 | 6,768,031 | ||
Cadence Design Systems, Inc.(1) | 50,713 | 3,517,454 | ||
Intuit, Inc. | 16,007 | 4,192,714 |
8
Shares | Value | |||
Microsoft Corp. | 173,032 | $ | 27,287,146 | |
Oracle Corp. (New York) | 102,961 | 5,454,874 | ||
salesforce.com, Inc.(1) | 23,605 | 3,839,117 | ||
VMware, Inc., Class A(1) | 10,372 | 1,574,366 | ||
52,633,702 | ||||
Specialty Retail — 2.0% | ||||
AutoZone, Inc.(1) | 5,478 | 6,525,996 | ||
Home Depot, Inc. (The) | 9,451 | 2,063,909 | ||
Murphy USA, Inc.(1) | 18,694 | 2,187,198 | ||
O'Reilly Automotive, Inc.(1) | 5,160 | 2,261,422 | ||
13,038,525 | ||||
Technology Hardware, Storage and Peripherals — 5.7% | ||||
Apple, Inc. | 125,535 | 36,863,353 | ||
Textiles, Apparel and Luxury Goods — 0.3% | ||||
NIKE, Inc., Class B | 18,703 | 1,894,801 | ||
Thrifts and Mortgage Finance — 0.4% | ||||
Essent Group Ltd. | 44,360 | 2,306,276 | ||
Trading Companies and Distributors — 0.3% | ||||
W.W. Grainger, Inc. | 4,873 | 1,649,608 | ||
TOTAL COMMON STOCKS (Cost $439,237,380) | 620,122,109 | |||
TEMPORARY CASH INVESTMENTS — 4.9% | ||||
Repurchase Agreement, BMO Capital Markets Corp., (collateralized by various U.S. Treasury obligations, 2.75% - 3.75%, 9/15/21 - 11/15/43, valued at $26,328,195), in a joint trading account at 1.35%, dated 12/31/19, due 1/2/20 (Delivery value $25,774,885) | 25,772,952 | |||
Repurchase Agreement, Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 1.625%, 12/15/22, valued at $5,853,656), at 0.65%, dated 12/31/19, due 1/2/20 (Delivery value $5,736,207) | 5,736,000 | |||
State Street Institutional U.S. Government Money Market Fund, Premier Class | 15,492 | 15,492 | ||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $31,524,444) | 31,524,444 | |||
TOTAL INVESTMENT SECURITIES — 101.2% (Cost $470,761,824) | 651,646,553 | |||
OTHER ASSETS AND LIABILITIES — (1.2)% | (7,713,010 | ) | ||
TOTAL NET ASSETS — 100.0% | $ | 643,933,543 |
FUTURES CONTRACTS PURCHASED | |||||||||
Reference Entity | Contracts | Expiration Date | Notional Amount | Underlying Contract Value | Unrealized Appreciation (Depreciation) | ||||
S&P 500 E-Mini | 145 | March 2020 | $7,250 | $ | 23,425,475 | $ | 435,857 |
NOTES TO SCHEDULE OF INVESTMENTS |
(1) | Non-income producing. |
See Notes to Financial Statements.
9
Statement of Assets and Liabilities |
DECEMBER 31, 2019 (UNAUDITED) | |||
Assets | |||
Investment securities, at value (cost of $470,761,824) | $ | 651,646,553 | |
Deposits with broker for futures contracts | 913,500 | ||
Receivable for investments sold | 10,263,453 | ||
Receivable for variation margin on futures contracts | 182,993 | ||
Dividends and interest receivable | 275,911 | ||
663,282,410 | |||
Liabilities | |||
Payable for capital shares redeemed | 19,348,867 | ||
Net Assets | $ | 643,933,543 | |
G Class Capital Shares, $0.01 Par Value | |||
Shares authorized | 985,000,000 | ||
Shares outstanding | 58,571,284 | ||
Net Asset Value Per Share | $ | 10.99 | |
Net Assets Consist of: | |||
Capital (par value and paid-in surplus) | $ | 303,012,482 | |
Distributable earnings | 340,921,061 | ||
$ | 643,933,543 |
See Notes to Financial Statements.
10
Statement of Operations |
FOR THE SIX MONTHS ENDED DECEMBER 31, 2019 (UNAUDITED) | |||
Investment Income (Loss) | |||
Income: | |||
Dividends | $ | 9,925,262 | |
Interest | 610,187 | ||
10,535,449 | |||
Expenses: | |||
Management fees | 2,913,741 | ||
Directors' fees and expenses | 51,633 | ||
Other expenses | 3,105 | ||
2,968,479 | |||
Fees waived | (2,913,741 | ) | |
54,738 | |||
Net investment income (loss) | 10,480,711 | ||
Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investment transactions | 248,724,666 | ||
Futures contract transactions | 11,845,544 | ||
260,570,210 | |||
Change in net unrealized appreciation (depreciation) on: | |||
Investments | (177,295,585 | ) | |
Futures contracts | 270,974 | ||
(177,024,611 | ) | ||
Net realized and unrealized gain (loss) | 83,545,599 | ||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 94,026,310 |
See Notes to Financial Statements.
11
Statement of Changes in Net Assets |
SIX MONTHS ENDED DECEMBER 31, 2019 (UNAUDITED) AND YEAR ENDED JUNE 30, 2019 | ||||||
Increase (Decrease) in Net Assets | December 31, 2019 | June 30, 2019 | ||||
Operations | ||||||
Net investment income (loss) | $ | 10,480,711 | $ | 28,640,627 | ||
Net realized gain (loss) | 260,570,210 | 102,727,641 | ||||
Change in net unrealized appreciation (depreciation) | (177,024,611 | ) | (17,300,566 | ) | ||
Net increase (decrease) in net assets resulting from operations | 94,026,310 | 114,067,702 | ||||
Distributions to Shareholders | ||||||
From earnings | (154,738,601 | ) | (194,396,133 | ) | ||
Capital Share Transactions | ||||||
Proceeds from shares sold | 6,823,827 | 133,221,176 | ||||
Proceeds from reinvestment of distributions | 154,738,601 | 194,396,133 | ||||
Payments for shares redeemed | (878,279,379 | ) | (498,765,868 | ) | ||
Net increase (decrease) in net assets from capital share transactions | (716,716,951 | ) | (171,148,559 | ) | ||
Net increase (decrease) in net assets | (777,429,242 | ) | (251,476,990 | ) | ||
Net Assets | ||||||
Beginning of period | 1,421,362,785 | 1,672,839,775 | ||||
End of period | $ | 643,933,543 | $ | 1,421,362,785 | ||
Transactions in Shares of the Fund | ||||||
Sold | 520,250 | 10,292,977 | ||||
Issued in reinvestment of distributions | 14,010,147 | 16,453,755 | ||||
Redeemed | (64,509,618 | ) | (37,479,042 | ) | ||
Net increase (decrease) in shares of the fund | (49,979,221 | ) | (10,732,310 | ) |
See Notes to Financial Statements.
12
Notes to Financial Statements |
DECEMBER 31, 2019 (UNAUDITED)
1. Organization
American Century Quantitative Equity Funds, Inc. (the corporation) is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company and is organized as a Maryland corporation. NT Equity Growth Fund (the fund) is one fund in a series issued by the corporation. The fund’s investment objective is to seek long-term capital growth. The fund is not permitted to invest in securities issued by companies assigned the Global Industry Classification Standard or the Bloomberg Industry Classification Standard for the tobacco industry. The fund offers the G Class.
2. Significant Accounting Policies
The following is a summary of significant accounting policies consistently followed by the fund in preparation of its financial statements. The fund is an investment company and follows accounting and reporting guidance in accordance with accounting principles generally accepted in the United States of America. This may require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from these estimates. Management evaluated the impact of events or transactions occurring through the date the financial statements were issued that would merit recognition or disclosure.
Investment Valuations — The fund determines the fair value of its investments and computes its net asset value per share at the close of regular trading (usually 4 p.m. Eastern time) on the New York Stock Exchange (NYSE) on each day the NYSE is open. The Board of Directors has adopted valuation policies and procedures to guide the investment advisor in the fund’s investment valuation process and to provide methodologies for the oversight of the fund’s pricing function.
Equity securities that are listed or traded on a domestic securities exchange are valued at the last reported sales price or at the official closing price as provided by the exchange. Equity securities traded on foreign securities exchanges are generally valued at the closing price of such securities on the exchange where primarily traded or at the close of the NYSE, if that is earlier. If no last sales price is reported, or if local convention or regulation so provides, the mean of the latest bid and asked prices may be used. Securities traded over-the-counter are valued at the mean of the latest bid and asked prices, the last sales price, or the official closing price.
Open-end management investment companies are valued at the reported net asset value per share. Repurchase agreements are valued at cost, which approximates fair value. Exchange-traded futures contracts are valued at the settlement price as provided by the appropriate exchange.
If the fund determines that the market price for an investment is not readily available or the valuation methods mentioned above do not reflect an investment’s fair value, such investment is valued as determined in good faith by the Board of Directors or its delegate, in accordance with policies and procedures adopted by the Board of Directors. In its determination of fair value, the fund may review several factors including, but not limited to, market information regarding the specific investment or comparable investments and correlation with other investment types, futures indices or general market indicators. Circumstances that may cause the fund to use these procedures to value an investment include, but are not limited to: an investment has been declared in default or is distressed; trading in a security has been suspended during the trading day or a security is not actively trading on its principal exchange; prices received from a regular pricing source are deemed unreliable; or there is a foreign market holiday and no trading occurred.
The fund monitors for significant events occurring after the close of an investment’s primary exchange but before the fund’s net asset value per share is determined. Significant events may include, but are not limited to: corporate announcements and transactions; governmental action and political unrest that could impact a specific investment or an investment sector; or armed conflicts, natural disasters and similar events that could affect investments in a specific country or region. The fund also monitors for significant fluctuations between domestic and foreign markets, as evidenced by the U.S. market or such other indicators that the Board of Directors, or its delegate, deems appropriate. The fund may apply a model-derived factor to the closing price of equity securities traded on foreign securities exchanges. The factor is based on observable market data as provided by an independent pricing service.
13
Security Transactions — Security transactions are accounted for as of the trade date. Net realized gains and losses are determined on the identified cost basis, which is also used for federal income tax purposes.
Investment Income — Dividend income less foreign taxes withheld, if any, is recorded as of the ex-dividend date. Distributions received on securities that represent a return of capital or long-term capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The fund may estimate the components of distributions received that may be considered nontaxable distributions or long-term capital gain distributions for income tax purposes. Interest income is recorded on the accrual basis and includes accretion of discounts and amortization of premiums.
Repurchase Agreements — The fund may enter into repurchase agreements with institutions that American Century Investment Management, Inc. (ACIM) (the investment advisor) has determined are creditworthy pursuant to criteria adopted by the Board of Directors. The fund requires that the collateral, represented by securities, received in a repurchase transaction be transferred to the custodian in a manner sufficient to enable the fund to obtain those securities in the event of a default under the repurchase agreement. ACIM monitors, on a daily basis, the securities transferred to ensure the value, including accrued interest, of the securities under each repurchase agreement is equal to or greater than amounts owed to the fund under each repurchase agreement.
Joint Trading Account — Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the fund, along with certain other funds in the American Century Investments family of funds, may transfer uninvested cash balances into a joint trading account. These balances are invested in one or more repurchase agreements that are collateralized by U.S. Treasury or Agency obligations.
Segregated Assets — In accordance with the 1940 Act, the fund segregates assets on its books and records to cover certain types of investment securities and other financial instruments. ACIM monitors, on a daily basis, the securities segregated to ensure the fund designates a sufficient amount of liquid assets, marked-to-market daily. The fund may also receive assets or be required to pledge assets at the custodian bank or with a broker for collateral requirements.
Income Tax Status — It is the fund’s policy to distribute substantially all net investment income and net realized gains to shareholders and to otherwise qualify as a regulated investment company under provisions of the Internal Revenue Code. Accordingly, no provision has been made for income taxes. The fund files U.S. federal, state, local and non-U.S. tax returns as applicable. The fund's tax returns are subject to examination by the relevant taxing authority until expiration of the applicable statute of limitations, which is generally three years from the date of filing but can be longer in certain jurisdictions. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination and for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Distributions to Shareholders — Distributions from net investment income, if any, are generally declared and paid quarterly. Distributions from net realized gains, if any, are generally declared and paid annually. The fund may elect to treat a portion of its payment to a redeeming shareholder, which represents the pro rata share of undistributed net investment income and net realized gains, as a distribution for federal income tax purposes (tax equalization).
Indemnifications — Under the corporation’s organizational documents, its officers and directors are indemnified against certain liabilities arising out of the performance of their duties to the fund. In addition, in the normal course of business, the fund enters into contracts that provide general indemnifications. The maximum exposure under these arrangements is unknown as this would involve future claims that may be made against a fund. The risk of material loss from such claims is considered by management to be remote.
3. Fees and Transactions with Related Parties
Certain officers and directors of the corporation are also officers and/or directors of American Century Companies, Inc. (ACC). The corporation’s investment advisor, ACIM, the corporation's distributor, American Century Investment Services, Inc., and the corporation’s transfer agent, American Century Services, LLC, are wholly owned, directly or indirectly, by ACC. Various funds issued by American Century Asset Allocation Portfolios, Inc. own, in aggregate, 100% of the shares of the fund. Related parties do not invest in the fund for the purpose of exercising management or control.
14
Management Fees — The corporation has entered into a management agreement with ACIM, under which ACIM provides the fund with investment advisory and management services in exchange for a single, unified management fee (the fee). The agreement provides that all expenses of managing and operating the fund, except brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), and extraordinary expenses, will be paid by ACIM. The fee is computed and accrued daily based on the daily net assets of the fund and paid monthly in arrears. The fee consists of (1) an Investment Category Fee based on the daily net assets of the fund and certain other accounts managed by the investment advisor that are in the same broad investment category as the fund and (2) a Complex Fee based on the assets of all the funds in the American Century Investments family of funds. The rates for the Investment Category Fee range from 0.3380% to 0.5200%. The rates for the Complex Fee range from 0.0500% to 0.1100%. The investment advisor agreed to waive the fund's management fee in its entirety. The investment advisor expects this waiver to remain in effect permanently and cannot terminate it without the approval of the Board of Directors. The effective annual management fee for the period ended December 31, 2019 was 0.46% before waiver and 0.00% after waiver.
Directors' Fees and Expenses — The Board of Directors is responsible for overseeing the investment advisor’s management and operations of the fund. The directors receive detailed information about the fund and its investment advisor regularly throughout the year, and meet at least quarterly with management of the investment advisor to review reports about fund operations. The fund’s officers do not receive compensation from the fund.
Interfund Transactions — The fund may enter into security transactions with other American Century Investments funds and other client accounts of the investment advisor, in accordance with the 1940 Act rules and procedures adopted by the Board of Directors. The rules and procedures require, among other things, that these transactions be effected at the independent current market price of the security. During the period, the interfund purchases and sales were $13,199,567 and $53,886,430, respectively. The effect of interfund transactions on the Statement of Operations was $4,882,757 in net realized gain (loss) on investment transactions.
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the period ended December 31, 2019 were $588,469,199 and $1,451,068,060, respectively.
5. Fair Value Measurements
The fund’s investments valuation process is based on several considerations and may use multiple inputs to determine the fair value of the investments held by the fund. In conformity with accounting principles generally accepted in the United States of America, the inputs used to determine a valuation are classified into three broad levels.
• | Level 1 valuation inputs consist of unadjusted quoted prices in an active market for identical investments. |
• | Level 2 valuation inputs consist of direct or indirect observable market data (including quoted prices for comparable investments, evaluations of subsequent market events, interest rates, prepayment speeds, credit risk, etc.). These inputs also consist of quoted prices for identical investments initially expressed in local currencies that are adjusted through translation into U.S. dollars. |
• | Level 3 valuation inputs consist of unobservable data (including a fund’s own assumptions). |
The level classification is based on the lowest level input that is significant to the fair valuation measurement. The valuation inputs are not necessarily an indication of the risks associated with investing in these securities or other financial instruments.
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The following is a summary of the level classifications as of period end. The Schedule of Investments provides additional information on the fund’s portfolio holdings.
Level 1 | Level 2 | Level 3 | ||||||
Assets | ||||||||
Investment Securities | ||||||||
Common Stocks | $ | 620,122,109 | — | — | ||||
Temporary Cash Investments | 15,492 | $ | 31,508,952 | — | ||||
$ | 620,137,601 | $ | 31,508,952 | — | ||||
Other Financial Instruments | ||||||||
Futures Contracts | $ | 435,857 | — | — |
6. Derivative Instruments
Equity Price Risk — The fund is subject to equity price risk in the normal course of pursuing its investment objectives. A fund may enter into futures contracts based on an equity index in order to manage its exposure to changes in market conditions. A fund may purchase futures contracts to gain exposure to increases in market value or sell futures contracts to protect against a decline in market value. Upon entering into a futures contract, a fund is required to deposit either cash or securities in an amount equal to a certain percentage of the contract value (initial margin). Subsequent payments (variation margin) are made or received daily, in cash, by a fund. The variation margin is equal to the daily change in the contract value and is recorded as unrealized gains and losses. A fund recognizes a realized gain or loss when the contract is closed or expires. Net realized and unrealized gains or losses occurring during the holding period of futures contracts are a component of net realized gain (loss) on futures contract transactions and change in net unrealized appreciation (depreciation) on futures contracts, respectively. One of the risks of entering into futures contracts is the possibility that the change in value of the contract may not correlate with the changes in value of the underlying securities. The fund's average notional exposure to equity price risk derivative instruments held during the period was $32,208 futures contracts purchased.
The value of equity price risk derivative instruments as of December 31, 2019, is disclosed on the Statement of Assets and Liabilities as an asset of $182,993 in receivable for variation margin on futures contracts*. For the six months ended December 31, 2019, the effect of equity price risk derivative instruments on the Statement of Operations was $11,845,544 in net realized gain (loss) on futures contract transactions and $270,974 in change in net unrealized appreciation (depreciation) on futures contracts.
* Included in the unrealized appreciation (depreciation) on futures contracts as reported in the Schedule of Investments.
7. Risk Factors
The fund’s investment process may result in high portfolio turnover, which could mean high transaction costs, affecting both performance and capital gains tax liabilities to investors.
The fund is owned by a relatively small number of shareholders, and in the event such shareholders redeem, the ongoing operations of the fund may be at risk.
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8. Federal Tax Information
The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
As of period end, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $ | 473,290,138 | |
Gross tax appreciation of investments | $ | 180,253,059 | |
Gross tax depreciation of investments | (1,896,644 | ) | |
Net tax appreciation (depreciation) of investments | $ | 178,356,415 |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales.
As of June 30, 2019, the fund had post-October capital loss deferrals of $(18,206,855), which represent certain qualified losses that the fund has elected to treat as having been incurred in the following fiscal year for federal income tax purposes.
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Financial Highlights |
For a Share Outstanding Throughout the Years Ended June 30 (except as noted) | |||||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||||
Income From Investment Operations: | Distributions From: | Ratio to Average Net Assets of: | |||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Operating Expenses (before expense waiver) | Net Investment Income (Loss) | Net Investment Income (Loss) (before expense waiver) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
G Class | |||||||||||||||||
2019(3) | $13.09 | 0.11 | 1.03 | 1.14 | (0.16) | (3.08) | (3.24) | $10.99 | 8.76% | 0.01%(4) | 0.47%(4) | 1.66%(4) | 1.20%(4) | 51% | $643,934 | ||
2019 | $14.02 | 0.25 | 0.64 | 0.89 | (0.24) | (1.58) | (1.82) | $13.09 | 8.05% | 0.01% | 0.47% | 1.89% | 1.43% | 84% | $1,421,363 | ||
2018 | $13.03 | 0.27 | 1.79 | 2.06 | (0.26) | (0.81) | (1.07) | $14.02 | 16.11% | 0.04% | 0.46% | 1.93% | 1.51% | 83% | $1,672,840 | ||
2017 | $11.20 | 0.19 | 1.83 | 2.02 | (0.19) | — | (0.19) | $13.03 | 18.09% | 0.47% | 0.47% | 1.54% | 1.54% | 88% | $1,771,561 | ||
2016 | $12.30 | 0.19 | (0.53) | (0.34) | (0.19) | (0.57) | (0.76) | $11.20 | (2.65)% | 0.47% | 0.47% | 1.65% | 1.65% | 94% | $1,563,685 | ||
2015 | $13.04 | 0.21 | 0.53 | 0.74 | (0.20) | (1.28) | (1.48) | $12.30 | 5.97% | 0.47% | 0.47% | 1.66% | 1.66% | 84% | $1,381,049 |
Notes to Financial Highlights |
(1) | Computed using average shares outstanding throughout the period. |
(2) | Total returns are calculated based on the net asset value of the last business day. Total returns for periods less than one year are not annualized. |
(3) | Six months ended December 31, 2019 (unaudited). |
(4) | Annualized. |
See Notes to Financial Statements.
Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain retirement accounts are subject to federal income tax withholding, unless you elect not to have withholding apply*. Tax will be withheld on the total amount withdrawn even though you may be receiving amounts that are not subject to withholding, such as nondeductible contributions. In such case, excess amounts of withholding could occur. You may adjust your withholding election so that a greater or lesser amount will be withheld.
If you don’t want us to withhold on this amount, you must notify us to not withhold the federal income tax. You may notify us in writing or in certain situations by telephone or through other electronic means. For systematic withdrawals, your withholding election will remain in effect until revoked or changed by filing a new election. You have the right to revoke your election at any time and change your withholding percentage for future distributions.
Remember, even if you elect not to have income tax withheld, you are liable for paying income tax on the taxable portion of your withdrawal. If you elect not to have income tax withheld or you don’t have enough income tax withheld, you may be responsible for payment of estimated tax. You may incur penalties under the estimated tax rules if your withholding and estimated tax payments are not sufficient. You can reduce or defer the income tax on a distribution by directly or indirectly rolling such distribution over to another IRA or eligible plan. You should consult your tax advisor for additional information.
State tax will be withheld if, at the time of your distribution, your address is within one of the mandatory withholding states and you have federal income tax withheld (or as otherwise required by state law). State taxes will be withheld from your distribution in accordance with the respective state rules.
*Some 403(b), 457 and qualified retirement plan distributions may be subject to 20% mandatory withholding, as they are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
Descriptions of the principles and policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund are available without charge, upon request, by calling 1-800-345-2021 or visiting American Century Investments’ website at americancentury.com/proxy. A description of the policies is also available on the Securities and Exchange Commission’s website at sec.gov. Information regarding how the investment advisor voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on americancentury.com/proxy. It is also available at sec.gov.
Quarterly Portfolio Disclosure
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-Q or as an exhibit to its reports on Form N-PORT. The fund’s Forms N-Q and Form N-PORT reports are available on the SEC’s website at sec.gov. The fund also makes its complete schedule of portfolio holdings for the most recent quarter of its fiscal year available on its website at americancentury.com and, upon request, by calling 1-800-345-2021.
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Notes |
20
Notes |
21
Notes |
22
Notes |
23
Notes |
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Contact Us | americancentury.com | |
Automated Information Line | 1-800-345-8765 | |
Investor Services Representative | 1-800-345-2021 or 816-531-5575 | |
Investors Using Advisors | 1-800-378-9878 | |
Business, Not-For-Profit, Employer-Sponsored Retirement Plans | 1-800-345-3533 | |
Banks and Trust Companies, Broker-Dealers, Financial Professionals, Insurance Companies | 1-800-345-6488 | |
Telecommunications Relay Service for the Deaf | 711 | |
American Century Quantitative Equity Funds, Inc. | ||
Investment Advisor: American Century Investment Management, Inc. Kansas City, Missouri | ||
This report and the statements it contains are submitted for the general information of our shareholders. The report is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus. | ||
©2020 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-91462 2002 |
Semiannual Report | |
December 31, 2019 | |
Small Company Fund | |
Investor Class (ASQIX) | |
I Class (ASCQX) | |
A Class (ASQAX) | |
C Class (ASQCX) | |
R Class (ASCRX) | |
R5 Class (ASQGX) |
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the fund’s shareholder reports like this one will no longer be sent by mail, unless you specifically request paper copies of the reports from the fund or from your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the fund or your financial intermediary electronically by calling or sending an email request to your appropriate contacts as listed on the back cover of this report.
You may elect to receive all future reports in paper free of charge. You can inform the fund or your financial intermediary that you wish to continue receiving paper copies of your shareholder reports by calling or sending an email request to your appropriate contacts as listed on the back cover of this report. Your election to receive reports in paper will apply to all funds held with the fund complex/your financial intermediary.
Table of Contents |
Any opinions expressed in this report reflect those of the author as of the date of the report, and do not necessarily represent the opinions of American Century Investments® or any other person in the American Century Investments organization. Any such opinions are subject to change at any time based upon market or other conditions and American Century Investments disclaims any responsibility to update such opinions. These opinions may not be relied upon as investment advice and, because investment decisions made by American Century Investments funds are based on numerous factors, may not be relied upon as an indication of trading intent on behalf of any American Century Investments fund. Security examples are used for representational purposes only and are not intended as recommendations to purchase or sell securities. Performance information for comparative indices and securities is provided to American Century Investments by third party vendors. To the best of American Century Investments’ knowledge, such information is accurate at the time of printing.
President’s Letter |
Jonathan Thomas
Dear Investor:
Thank you for reviewing this semiannual report for the period ended December 31, 2019. It provides a market overview (below), followed by a schedule of fund investments and other financial information. For additional commentary and information on fund performance, plus other investment insights, please visit our website, americancentury.com.
All Asset Classes Advanced
From higher-quality government bonds to higher-risk stocks and commodities, all major U.S. and global asset classes posted gains for the six-month period. U.S. stocks, as measured by the S&P 500 Index, advanced almost 11% for the period, outpacing the nearly 9% return for global stocks (MSCI ACWI). Income-oriented assets, including U.S. and global bonds and dividend-paying stocks, generally posted more-modest gains.
A key policy pivot from the Federal Reserve (Fed) helped set the stage for the rally. After abruptly ending its three-year rate-hike campaign in early 2019, the Fed cut rates in July. Ongoing concerns about global economic risks, including trade policy uncertainty, prompted this first Fed easing move in 10 years. And with global risks still looming, the Fed cut rates again in September and October before pausing. Similarly, the European Central Bank cut a key deposit rate and relaunched quantitative easing in a move to spark growth. These efforts helped push global yields lower, which aided performance among interest rate-sensitive assets.
Accommodative central bank policy and a lower interest rate backdrop also aided performance in equity markets. Additionally, modestly improving economic and earnings data calmed investors’ earlier worries and nudged stock returns higher. In December, a series of upbeat data helped stocks end the period on a high note. U.K. Prime Minister Boris Johnson and his Conservative Party won a decisive election victory, which resolved some lingering Brexit uncertainty. On the trade front, the U.S. House of Representatives approved the U.S.-Mexico-Canada Agreement, and the U.S. and China reached a phase 1 deal, further fueling investor optimism.
Looking ahead, we expect volatility to remain a factor as investors react to global growth trends, ongoing U.S.-China trade negotiations, central bank policy and geopolitical forces. We believe this scenario underscores the importance of using professionally managed portfolios in pursuit of investment goals. We appreciate your continued trust and confidence in us.
Sincerely,
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
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Fund Characteristics |
DECEMBER 31, 2019 | |
Top Ten Holdings | % of net assets |
Essent Group Ltd. | 1.1% |
American States Water Co. | 1.1% |
Cirrus Logic, Inc. | 1.0% |
Amedisys, Inc. | 1.0% |
BMC Stock Holdings, Inc. | 0.9% |
Inphi Corp. | 0.9% |
United Community Banks, Inc. | 0.8% |
Tech Data Corp. | 0.8% |
Aspen Technology, Inc. | 0.8% |
Cornerstone OnDemand, Inc. | 0.8% |
Top Five Industries | % of net assets |
Banks | 9.9% |
Equity Real Estate Investment Trusts (REITs) | 6.4% |
Software | 5.9% |
Biotechnology | 5.7% |
Semiconductors and Semiconductor Equipment | 4.0% |
Types of Investments in Portfolio | % of net assets |
Common Stocks | 97.1% |
Temporary Cash Investments | 2.9% |
Temporary Cash Investments - Securities Lending Collateral | 0.5% |
Other Assets and Liabilities | (0.5)% |
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Shareholder Fee Example |
Fund shareholders may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption/exchange fees; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in your fund and to compare these costs with the ongoing cost of investing in other mutual funds.
The example is based on an investment of $1,000 made at the beginning of the period and held for the entire period from July 1, 2019 to December 31, 2019.
Actual Expenses
The table provides information about actual account values and actual expenses for each class. You may use the information, together with the amount you invested, to estimate the expenses that you paid over the period. First, identify the share class you own. Then simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
If you hold Investor Class shares of any American Century Investments fund, or I Class shares of the American Century Diversified Bond Fund, in an American Century Investments account (i.e., not a financial intermediary or retirement plan account), American Century Investments may charge you a $12.50 semiannual account maintenance fee if the value of those shares is less than $10,000. We will redeem shares automatically in one of your accounts to pay the $12.50 fee. In determining your total eligible investment amount, we will include your investments in all personal accounts (including American Century Investments Brokerage accounts) registered under your Social Security number. Personal accounts include individual accounts, joint accounts, UGMA/UTMA accounts, personal trusts, Coverdell Education Savings Accounts and IRAs (including traditional, Roth, Rollover, SEP-, SARSEP- and SIMPLE-IRAs), and certain other retirement accounts. If you have only business, business retirement, employer-sponsored or American Century Investments Brokerage accounts, you are currently not subject to this fee. If you are subject to the Account Maintenance Fee, your account value could be reduced by the fee amount.
Hypothetical Example for Comparison Purposes
The table also provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio of each class of your fund and an assumed rate of return of 5% per year before expenses, which is not the actual return of a fund’s share class. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) or redemption/exchange fees. Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
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Beginning Account Value 7/1/19 | Ending Account Value 12/31/19 | Expenses Paid During Period(1) 7/1/19 - 12/31/19 | Annualized Expense Ratio(1) | |
Actual | ||||
Investor Class | $1,000 | $1,056.50 | $4.50 | 0.87% |
I Class | $1,000 | $1,057.30 | $3.46 | 0.67% |
A Class | $1,000 | $1,055.50 | $5.79 | 1.12% |
C Class | $1,000 | $1,051.60 | $9.64 | 1.87% |
R Class | $1,000 | $1,054.20 | $7.07 | 1.37% |
R5 Class | $1,000 | $1,058.10 | $3.47 | 0.67% |
Hypothetical | ||||
Investor Class | $1,000 | $1,020.76 | $4.42 | 0.87% |
I Class | $1,000 | $1,021.77 | $3.40 | 0.67% |
A Class | $1,000 | $1,019.51 | $5.69 | 1.12% |
C Class | $1,000 | $1,015.74 | $9.48 | 1.87% |
R Class | $1,000 | $1,018.25 | $6.95 | 1.37% |
R5 Class | $1,000 | $1,021.77 | $3.40 | 0.67% |
(1) | Expenses are equal to the class's annualized expense ratio listed in the table above, multiplied by the average account value over the period, multiplied by 184, the number of days in the most recent fiscal half-year, divided by 366, to reflect the one-half year period. Annualized expense ratio reflects actual expenses, including any applicable fee waivers or expense reimbursements and excluding any acquired fund fees and expenses. |
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Schedule of Investments |
DECEMBER 31, 2019 (UNAUDITED)
Shares | Value | |||
COMMON STOCKS — 97.1% | ||||
Aerospace and Defense — 0.5% | ||||
Curtiss-Wright Corp. | 12,256 | $ | 1,726,748 | |
Vectrus, Inc.(1) | 10,591 | 542,895 | ||
2,269,643 | ||||
Air Freight and Logistics — 0.6% | ||||
Forward Air Corp. | 15,734 | 1,100,593 | ||
Hub Group, Inc., Class A(1) | 34,143 | 1,751,195 | ||
2,851,788 | ||||
Auto Components — 0.5% | ||||
Gentherm, Inc.(1) | 10,878 | 482,874 | ||
LCI Industries | 19,735 | 2,114,211 | ||
2,597,085 | ||||
Banks — 9.9% | ||||
Bancorp, Inc. (The)(1) | 139,944 | 1,815,074 | ||
Bank of NT Butterfield & Son Ltd. (The) | 52,754 | 1,952,953 | ||
Banner Corp. | 29,337 | 1,660,181 | ||
Boston Private Financial Holdings, Inc. | 124,710 | 1,500,261 | ||
Camden National Corp. | 14,469 | 666,442 | ||
Cathay General Bancorp. | 57,156 | 2,174,786 | ||
Central Pacific Financial Corp. | 64,625 | 1,911,608 | ||
Enterprise Financial Services Corp. | 30,866 | 1,488,050 | ||
Financial Institutions, Inc. | 48,377 | 1,552,902 | ||
First Citizens BancShares, Inc., Class A | 6,540 | 3,480,653 | ||
First Commonwealth Financial Corp. | 190,246 | 2,760,469 | ||
First Financial Bancorp | 83,891 | 2,134,187 | ||
First Merchants Corp. | 43,698 | 1,817,400 | ||
Heritage Commerce Corp. | 70,862 | 909,159 | ||
IBERIABANK Corp. | 16,284 | 1,218,532 | ||
Independent Bank Corp. (Michigan) | 53,622 | 1,214,538 | ||
Independent Bank Group, Inc. | 33,392 | 1,851,252 | ||
International Bancshares Corp. | 51,777 | 2,230,035 | ||
Lakeland Bancorp, Inc. | 21,941 | 381,335 | ||
OFG Bancorp | 84,114 | 1,985,932 | ||
Peoples Bancorp, Inc. | 11,633 | 403,200 | ||
Renasant Corp. | 37,828 | 1,339,868 | ||
S&T Bancorp, Inc. | 38,494 | 1,550,923 | ||
Umpqua Holdings Corp. | 75,798 | 1,341,625 | ||
United Community Banks, Inc. | 136,692 | 4,221,049 | ||
Valley National Bancorp | 192,672 | 2,206,094 | ||
Veritex Holdings, Inc. | 48,847 | 1,422,913 | ||
WesBanco, Inc. | 26,151 | 988,246 | ||
Western Alliance Bancorp | 20,608 | 1,174,656 | ||
49,354,323 |
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Shares | Value | |||
Beverages — 0.8% | ||||
Boston Beer Co., Inc. (The), Class A(1) | 7,002 | $ | 2,645,705 | |
Coca-Cola Consolidated, Inc. | 5,275 | 1,498,364 | ||
4,144,069 | ||||
Biotechnology — 5.7% | ||||
Anika Therapeutics, Inc.(1) | 17,848 | 925,419 | ||
Arena Pharmaceuticals, Inc.(1) | 35,256 | 1,601,327 | ||
Arrowhead Pharmaceuticals, Inc.(1) | 28,011 | 1,776,738 | ||
CareDx, Inc.(1) | 62,439 | 1,346,809 | ||
CytomX Therapeutics, Inc.(1) | 43,642 | 362,665 | ||
Denali Therapeutics, Inc.(1)(2) | 15,391 | 268,111 | ||
Dicerna Pharmaceuticals, Inc.(1) | 16,618 | 366,095 | ||
Eagle Pharmaceuticals, Inc.(1) | 21,413 | 1,286,493 | ||
Emergent BioSolutions, Inc.(1) | 37,960 | 2,047,942 | ||
Enanta Pharmaceuticals, Inc.(1) | 18,118 | 1,119,330 | ||
Esperion Therapeutics, Inc.(1)(2) | 30,712 | 1,831,357 | ||
Exelixis, Inc.(1) | 60,296 | 1,062,415 | ||
Halozyme Therapeutics, Inc.(1) | 97,519 | 1,729,012 | ||
Ironwood Pharmaceuticals, Inc.(1) | 140,480 | 1,869,789 | ||
Myriad Genetics, Inc.(1) | 55,260 | 1,504,730 | ||
Natera, Inc.(1) | 35,943 | 1,210,920 | ||
Principia Biopharma, Inc.(1) | 35,098 | 1,922,668 | ||
Radius Health, Inc.(1) | 53,410 | 1,076,746 | ||
Vanda Pharmaceuticals, Inc.(1) | 76,749 | 1,259,451 | ||
Veracyte, Inc.(1) | 47,712 | 1,332,119 | ||
Vericel Corp.(1) | 67,266 | 1,170,428 | ||
Voyager Therapeutics, Inc.(1) | 87,061 | 1,214,501 | ||
28,285,065 | ||||
Building Products — 2.0% | ||||
Advanced Drainage Systems, Inc. | 53,595 | 2,081,630 | ||
Builders FirstSource, Inc.(1) | 138,704 | 3,524,469 | ||
Quanex Building Products Corp. | 74,466 | 1,271,879 | ||
Trex Co., Inc.(1) | 15,738 | 1,414,532 | ||
Universal Forest Products, Inc. | 34,322 | 1,637,159 | ||
9,929,669 | ||||
Capital Markets — 2.8% | ||||
Artisan Partners Asset Management, Inc., Class A | 54,542 | 1,762,797 | ||
Blucora, Inc.(1) | 59,942 | 1,566,884 | ||
Cohen & Steers, Inc. | 45,422 | 2,850,685 | ||
Diamond Hill Investment Group, Inc. | 8,095 | 1,137,024 | ||
Evercore, Inc., Class A | 17,202 | 1,286,021 | ||
Hercules Capital, Inc. | 138,358 | 1,939,779 | ||
Piper Jaffray Cos. | 19,981 | 1,597,281 | ||
PJT Partners, Inc., Class A | 16,945 | 764,728 | ||
Waddell & Reed Financial, Inc., Class A(2) | 62,944 | 1,052,424 | ||
13,957,623 | ||||
Chemicals — 1.0% | ||||
Hawkins, Inc. | 7,228 | 331,115 |
7
Shares | Value | |||
Innophos Holdings, Inc. | 13,007 | $ | 415,964 | |
Minerals Technologies, Inc. | 26,033 | 1,500,282 | ||
Stepan Co. | 15,384 | 1,575,937 | ||
Tredegar Corp. | 49,856 | 1,114,281 | ||
4,937,579 | ||||
Commercial Services and Supplies — 2.8% | ||||
Herman Miller, Inc. | 36,663 | 1,527,014 | ||
HNI Corp. | 27,959 | 1,047,344 | ||
Kimball International, Inc., Class B | 67,210 | 1,389,231 | ||
Knoll, Inc. | 154,633 | 3,906,029 | ||
Steelcase, Inc., Class A | 197,208 | 4,034,876 | ||
Tetra Tech, Inc. | 22,833 | 1,967,291 | ||
13,871,785 | ||||
Communications Equipment — 0.8% | ||||
Ciena Corp.(1) | 76,544 | 3,267,664 | ||
Comtech Telecommunications Corp. | 17,927 | 636,229 | ||
3,903,893 | ||||
Construction and Engineering — 1.6% | ||||
Comfort Systems USA, Inc. | 33,554 | 1,672,667 | ||
EMCOR Group, Inc. | 27,915 | 2,409,064 | ||
Great Lakes Dredge & Dock Corp.(1) | 123,345 | 1,397,499 | ||
MasTec, Inc.(1) | 39,972 | 2,564,604 | ||
8,043,834 | ||||
Consumer Finance — 0.9% | ||||
Enova International, Inc.(1) | 138,555 | 3,333,634 | ||
Green Dot Corp., Class A(1) | 57,211 | 1,333,016 | ||
4,666,650 | ||||
Containers and Packaging — 0.2% | ||||
Greif, Inc., Class A | 24,606 | 1,087,585 | ||
Distributors — 0.1% | ||||
Core-Mark Holding Co., Inc. | 19,395 | 527,350 | ||
Diversified Consumer Services — 0.6% | ||||
K12, Inc.(1) | 93,815 | 1,909,135 | ||
Perdoceo Education Corp.(1) | 61,937 | 1,139,022 | ||
3,048,157 | ||||
Diversified Financial Services — 0.4% | ||||
Compass Diversified Holdings | 83,540 | 2,076,804 | ||
Diversified Telecommunication Services — 0.3% | ||||
Cogent Communications Holdings, Inc. | 25,120 | 1,653,147 | ||
Electric Utilities — 0.8% | ||||
ALLETE, Inc. | 18,977 | 1,540,363 | ||
IDACORP, Inc. | 7,388 | 789,038 | ||
Otter Tail Corp. | 29,302 | 1,502,900 | ||
3,832,301 | ||||
Electrical Equipment — 1.2% | ||||
Atkore International Group, Inc.(1) | 48,691 | 1,970,038 |
8
Shares | Value | |||
Encore Wire Corp. | 26,983 | $ | 1,548,824 | |
Generac Holdings, Inc.(1) | 23,127 | 2,326,345 | ||
5,845,207 | ||||
Electronic Equipment, Instruments and Components — 2.6% | ||||
Fabrinet(1) | 22,748 | 1,474,980 | ||
Insight Enterprises, Inc.(1) | 29,182 | 2,051,203 | ||
Knowles Corp.(1) | 76,558 | 1,619,202 | ||
PC Connection, Inc. | 13,357 | 663,309 | ||
Sanmina Corp.(1) | 51,189 | 1,752,711 | ||
Tech Data Corp.(1) | 29,369 | 4,217,388 | ||
Vishay Precision Group, Inc.(1) | 36,382 | 1,236,988 | ||
13,015,781 | ||||
Energy Equipment and Services — 2.1% | ||||
Dril-Quip, Inc.(1) | 32,036 | 1,502,809 | ||
Liberty Oilfield Services, Inc., Class A | 153,599 | 1,708,021 | ||
Matrix Service Co.(1) | 70,917 | 1,622,581 | ||
NexTier Oilfield Solutions, Inc.(1) | 296,838 | 1,988,814 | ||
Oil States International, Inc.(1) | 115,190 | 1,878,749 | ||
ProPetro Holding Corp.(1) | 36,283 | 408,184 | ||
SEACOR Holdings, Inc.(1) | 27,086 | 1,168,761 | ||
10,277,919 | ||||
Entertainment — 0.9% | ||||
Glu Mobile, Inc.(1) | 277,334 | 1,677,871 | ||
IMAX Corp.(1) | 129,843 | 2,652,692 | ||
4,330,563 | ||||
Equity Real Estate Investment Trusts (REITs) — 6.4% | ||||
Alexander & Baldwin, Inc. | 134,187 | 2,812,559 | ||
Alexander's, Inc. | 4,845 | 1,600,546 | ||
American Assets Trust, Inc. | 34,610 | 1,588,599 | ||
CareTrust REIT, Inc. | 41,881 | 864,005 | ||
CoreCivic, Inc. | 64,534 | 1,121,601 | ||
CorEnergy Infrastructure Trust, Inc. | 30,049 | 1,343,491 | ||
DiamondRock Hospitality Co. | 154,697 | 1,714,043 | ||
Diversified Healthcare Trust REIT | 181,953 | 1,535,683 | ||
EastGroup Properties, Inc. | 14,959 | 1,984,610 | ||
GEO Group, Inc. (The) | 104,919 | 1,742,704 | ||
LTC Properties, Inc. | 40,799 | 1,826,571 | ||
New Senior Investment Group, Inc. | 140,309 | 1,073,364 | ||
Physicians Realty Trust | 118,685 | 2,247,894 | ||
PS Business Parks, Inc. | 9,479 | 1,562,803 | ||
Retail Opportunity Investments Corp. | 108,857 | 1,922,415 | ||
Ryman Hospitality Properties, Inc. | 35,791 | 3,101,648 | ||
Saul Centers, Inc. | 25,156 | 1,327,734 | ||
Sunstone Hotel Investors, Inc. | 76,289 | 1,061,943 | ||
Tanger Factory Outlet Centers, Inc.(2) | 85,797 | 1,263,790 | ||
31,696,003 | ||||
Food and Staples Retailing — 0.4% | ||||
Performance Food Group Co.(1) | 42,376 | 2,181,516 |
9
Shares | Value | |||
Food Products — 0.7% | ||||
Freshpet, Inc.(1) | 38,670 | $ | 2,285,010 | |
John B Sanfilippo & Son, Inc. | 13,945 | 1,272,900 | ||
3,557,910 | ||||
Health Care Equipment and Supplies — 3.4% | ||||
Cardiovascular Systems, Inc.(1) | 33,340 | 1,619,990 | ||
Lantheus Holdings, Inc.(1) | 38,425 | 788,097 | ||
Masimo Corp.(1) | 8,277 | 1,308,263 | ||
Natus Medical, Inc.(1) | 91,094 | 3,005,191 | ||
NuVasive, Inc.(1) | 50,977 | 3,942,561 | ||
OraSure Technologies, Inc.(1) | 72,902 | 585,403 | ||
Orthofix Medical, Inc.(1) | 30,716 | 1,418,465 | ||
STAAR Surgical Co.(1) | 55,125 | 1,938,746 | ||
Surmodics, Inc.(1) | 30,739 | 1,273,517 | ||
Tandem Diabetes Care, Inc.(1) | 16,638 | 991,791 | ||
16,872,024 | ||||
Health Care Providers and Services — 3.0% | ||||
Amedisys, Inc.(1) | 29,774 | 4,969,876 | ||
AMN Healthcare Services, Inc.(1) | 21,839 | 1,360,788 | ||
Chemed Corp. | 3,158 | 1,387,183 | ||
CorVel Corp.(1) | 17,095 | 1,493,419 | ||
Ensign Group, Inc. (The) | 39,882 | 1,809,446 | ||
National HealthCare Corp. | 9,529 | 823,592 | ||
Pennant Group, Inc. (The)(1) | 45,105 | 1,491,622 | ||
WellCare Health Plans, Inc.(1) | 5,489 | 1,812,523 | ||
15,148,449 | ||||
Health Care Technology — 1.8% | ||||
HealthStream, Inc.(1) | 49,876 | 1,356,627 | ||
NextGen Healthcare, Inc.(1) | 109,657 | 1,762,188 | ||
Omnicell, Inc.(1) | 23,618 | 1,930,063 | ||
Simulations Plus, Inc. | 43,645 | 1,268,760 | ||
Teladoc Health, Inc.(1)(2) | 30,455 | 2,549,693 | ||
8,867,331 | ||||
Hotels, Restaurants and Leisure — 2.6% | ||||
BJ's Restaurants, Inc. | 31,318 | 1,188,831 | ||
Bloomin' Brands, Inc. | 87,880 | 1,939,512 | ||
Cheesecake Factory, Inc. (The) | 5,806 | 225,621 | ||
Chuy's Holdings, Inc.(1) | 30,209 | 783,017 | ||
Cracker Barrel Old Country Store, Inc. | 11,885 | 1,827,200 | ||
Dave & Buster's Entertainment, Inc. | 32,718 | 1,314,282 | ||
Denny's Corp.(1) | 52,620 | 1,046,086 | ||
Jack in the Box, Inc. | 14,054 | 1,096,634 | ||
Ruth's Hospitality Group, Inc. | 67,293 | 1,464,632 | ||
Texas Roadhouse, Inc. | 35,934 | 2,023,803 | ||
12,909,618 | ||||
Household Durables — 1.3% | ||||
Installed Building Products, Inc.(1) | 43,750 | 3,013,063 |
10
Shares | Value | |||
Skyline Champion Corp.(1) | 6,796 | $ | 215,433 | |
Sonos, Inc.(1) | 120,212 | 1,877,711 | ||
Universal Electronics, Inc.(1) | 28,099 | 1,468,454 | ||
6,574,661 | ||||
Household Products — 0.3% | ||||
Central Garden & Pet Co., Class A(1) | 51,312 | 1,506,520 | ||
Insurance — 2.3% | ||||
Horace Mann Educators Corp. | 35,973 | 1,570,581 | ||
National General Holdings Corp. | 133,292 | 2,945,753 | ||
National Western Life Group, Inc., Class A | 3,068 | 892,420 | ||
Safety Insurance Group, Inc. | 13,900 | 1,286,167 | ||
Stewart Information Services Corp. | 66,567 | 2,715,268 | ||
Third Point Reinsurance Ltd.(1) | 196,440 | 2,066,549 | ||
11,476,738 | ||||
Interactive Media and Services — 0.3% | ||||
Yelp, Inc.(1) | 45,159 | 1,572,888 | ||
Internet and Direct Marketing Retail — 0.4% | ||||
1-800-Flowers.com, Inc., Class A(1) | 136,266 | 1,975,857 | ||
IT Services — 1.6% | ||||
CACI International, Inc., Class A(1) | 5,411 | 1,352,696 | ||
CSG Systems International, Inc. | 18,852 | 976,157 | ||
EVERTEC, Inc. | 82,933 | 2,823,039 | ||
NIC, Inc. | 56,978 | 1,273,458 | ||
TTEC Holdings, Inc. | 41,042 | 1,626,084 | ||
8,051,434 | ||||
Leisure Products — 0.3% | ||||
Malibu Boats, Inc., Class A(1) | 37,076 | 1,518,262 | ||
Life Sciences Tools and Services — 1.0% | ||||
Medpace Holdings, Inc.(1) | 24,159 | 2,030,805 | ||
PRA Health Sciences, Inc.(1) | 24,637 | 2,738,403 | ||
4,769,208 | ||||
Machinery — 3.1% | ||||
EnPro Industries, Inc. | 45,590 | 3,049,059 | ||
Franklin Electric Co., Inc. | 21,916 | 1,256,225 | ||
John Bean Technologies Corp. | 16,857 | 1,899,110 | ||
Mueller Industries, Inc. | 47,623 | 1,512,030 | ||
Rexnord Corp.(1) | 62,051 | 2,024,103 | ||
SPX Corp.(1) | 31,793 | 1,617,628 | ||
TriMas Corp.(1) | 67,461 | 2,118,950 | ||
Watts Water Technologies, Inc., Class A | 21,797 | 2,174,469 | ||
15,651,574 | ||||
Media — 0.1% | ||||
National CineMedia, Inc. | 44,769 | 326,366 | ||
Metals and Mining — 0.7% | ||||
Kaiser Aluminum Corp. | 18,267 | 2,025,628 | ||
Materion Corp. | 24,567 | 1,460,508 | ||
3,486,136 |
11
Shares | Value | |||
Mortgage Real Estate Investment Trusts (REITs) — 0.6% | ||||
Apollo Commercial Real Estate Finance, Inc. | 110,141 | $ | 2,014,479 | |
Capstead Mortgage Corp. | 139,156 | 1,102,115 | ||
3,116,594 | ||||
Multi-Utilities† | ||||
Black Hills Corp. | 3,168 | 248,815 | ||
Oil, Gas and Consumable Fuels — 1.3% | ||||
Arch Coal, Inc., Class A | 19,014 | 1,364,065 | ||
CVR Energy, Inc. | 38,575 | 1,559,587 | ||
Delek US Holdings, Inc. | 45,323 | 1,519,680 | ||
W&T Offshore, Inc.(1) | 369,205 | 2,052,780 | ||
6,496,112 | ||||
Paper and Forest Products — 0.4% | ||||
Boise Cascade Co. | 48,479 | 1,770,938 | ||
Personal Products — 0.3% | ||||
elf Beauty, Inc.(1) | 81,671 | 1,317,353 | ||
Pharmaceuticals — 1.0% | ||||
Corcept Therapeutics, Inc.(1) | 58,670 | 709,907 | ||
Horizon Therapeutics plc(1) | 36,586 | 1,324,413 | ||
Pacira BioSciences, Inc.(1) | 36,696 | 1,662,329 | ||
Phibro Animal Health Corp., Class A | 44,278 | 1,099,423 | ||
4,796,072 | ||||
Professional Services — 2.2% | ||||
ASGN, Inc.(1) | 41,529 | 2,947,313 | ||
Barrett Business Services, Inc. | 23,682 | 2,142,274 | ||
Heidrick & Struggles International, Inc. | 46,428 | 1,508,910 | ||
Insperity, Inc. | 12,332 | 1,061,045 | ||
Kforce, Inc. | 38,256 | 1,518,763 | ||
Resources Connection, Inc. | 32,706 | 534,089 | ||
TrueBlue, Inc.(1) | 61,136 | 1,470,932 | ||
11,183,326 | ||||
Real Estate Management and Development — 0.5% | ||||
Newmark Group, Inc., Class A | 102,881 | 1,384,264 | ||
RMR Group, Inc. (The), Class A | 29,354 | 1,339,716 | ||
2,723,980 | ||||
Road and Rail — 0.5% | ||||
ArcBest Corp. | 48,117 | 1,328,029 | ||
Marten Transport Ltd. | 58,574 | 1,258,755 | ||
2,586,784 | ||||
Semiconductors and Semiconductor Equipment — 4.0% | ||||
Cirrus Logic, Inc.(1) | 61,037 | 5,030,059 | ||
Diodes, Inc.(1) | 43,923 | 2,475,940 | ||
Inphi Corp.(1) | 59,371 | 4,394,641 | ||
Lattice Semiconductor Corp.(1) | 61,389 | 1,174,985 | ||
Monolithic Power Systems, Inc. | 6,625 | 1,179,383 | ||
Onto Innovation, Inc.(1) | 41,626 | 1,521,014 | ||
Semtech Corp.(1) | 35,873 | 1,897,682 |
12
Shares | Value | |||
Synaptics, Inc.(1) | 35,131 | $ | 2,310,566 | |
19,984,270 | ||||
Software — 5.9% | ||||
Agilysys, Inc.(1) | 55,992 | 1,422,757 | ||
American Software, Inc., Class A | 19,409 | 288,806 | ||
Aspen Technology, Inc.(1) | 33,748 | 4,081,146 | ||
Box, Inc., Class A(1) | 97,050 | 1,628,499 | ||
CommVault Systems, Inc.(1) | 33,292 | 1,486,155 | ||
Cornerstone OnDemand, Inc.(1) | 69,123 | 4,047,152 | ||
Fair Isaac Corp.(1) | 5,110 | 1,914,615 | ||
MobileIron, Inc.(1) | 131,310 | 638,167 | ||
Model N, Inc.(1) | 102,377 | 3,590,361 | ||
Paylocity Holding Corp.(1) | 7,410 | 895,276 | ||
Progress Software Corp. | 45,647 | 1,896,633 | ||
Proofpoint, Inc.(1) | 9,770 | 1,121,401 | ||
Q2 Holdings, Inc.(1) | 15,644 | 1,268,415 | ||
QAD, Inc., Class A | 8,854 | 450,934 | ||
Qualys, Inc.(1) | 16,479 | 1,373,854 | ||
RingCentral, Inc., Class A(1) | 7,856 | 1,325,071 | ||
SPS Commerce, Inc.(1) | 37,302 | 2,067,277 | ||
29,496,519 | ||||
Specialty Retail — 2.9% | ||||
American Eagle Outfitters, Inc. | 88,259 | 1,297,407 | ||
Group 1 Automotive, Inc. | 18,534 | 1,853,400 | ||
Lithia Motors, Inc., Class A | 19,950 | 2,932,650 | ||
Murphy USA, Inc.(1) | 14,808 | 1,732,536 | ||
Rent-A-Center, Inc. | 117,978 | 3,402,486 | ||
Sleep Number Corp.(1) | 64,857 | 3,193,559 | ||
14,412,038 | ||||
Technology Hardware, Storage and Peripherals — 0.1% | ||||
Pure Storage, Inc., Class A(1) | 29,491 | 504,591 | ||
Textiles, Apparel and Luxury Goods — 0.8% | ||||
Crocs, Inc.(1) | 46,305 | 1,939,717 | ||
Deckers Outdoor Corp.(1) | 11,734 | 1,981,403 | ||
3,921,120 | ||||
Thrifts and Mortgage Finance — 3.9% | ||||
Essent Group Ltd. | 109,530 | 5,694,465 | ||
Flagstar Bancorp, Inc. | 39,394 | 1,506,820 | ||
LendingTree, Inc.(1)(2) | 2,511 | 761,938 | ||
MGIC Investment Corp. | 271,695 | 3,849,918 | ||
NMI Holdings, Inc., Class A(1) | 66,298 | 2,199,768 | ||
Radian Group, Inc. | 98,224 | 2,471,316 | ||
TrustCo Bank Corp. NY | 40,431 | 350,537 | ||
Walker & Dunlop, Inc. | 37,814 | 2,445,809 | ||
19,280,571 | ||||
Trading Companies and Distributors — 2.8% | ||||
Applied Industrial Technologies, Inc. | 30,586 | 2,039,780 |
13
Shares | Value | |||
BMC Stock Holdings, Inc.(1) | 156,228 | $ | 4,482,181 | |
Foundation Building Materials, Inc.(1) | 44,902 | 868,854 | ||
GMS, Inc.(1) | 100,294 | 2,715,962 | ||
Rush Enterprises, Inc., Class A | 27,829 | 1,294,048 | ||
Watsco, Inc. | 14,886 | 2,681,713 | ||
14,082,538 | ||||
Water Utilities — 1.1% | ||||
American States Water Co. | 64,170 | 5,559,689 | ||
TOTAL COMMON STOCKS (Cost $429,865,909) | 484,131,625 | |||
TEMPORARY CASH INVESTMENTS — 2.9% | ||||
Repurchase Agreement, BMO Capital Markets Corp., (collateralized by various U.S. Treasury obligations, 2.75% - 3.75%, 9/15/21 - 11/15/43, valued at $11,894,535), in a joint trading account at 1.35%, dated 12/31/19, due 1/2/20 (Delivery value $11,644,560) | 11,643,687 | |||
Repurchase Agreement, Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 1.625%, 12/15/22, valued at $2,643,910), at 0.65%, dated 12/31/19, due 1/2/20 (Delivery value $2,591,094) | 2,591,000 | |||
State Street Institutional U.S. Government Money Market Fund, Premier Class | 7,407 | 7,407 | ||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $14,242,094) | 14,242,094 | |||
TEMPORARY CASH INVESTMENTS - SECURITIES LENDING COLLATERAL(3) — 0.5% | ||||
State Street Navigator Securities Lending Government Money Market Portfolio (Cost $2,560,346) | 2,560,346 | 2,560,346 | ||
TOTAL INVESTMENT SECURITIES — 100.5% (Cost $446,668,349) | 500,934,065 | |||
OTHER ASSETS AND LIABILITIES — (0.5)% | (2,283,361 | ) | ||
TOTAL NET ASSETS — 100.0% | $ | 498,650,704 |
FUTURES CONTRACTS PURCHASED | |||||||||||
Reference Entity | Contracts | Expiration Date | Notional Amount | Underlying Contract Value | Unrealized Appreciation (Depreciation) | ||||||
Russell 2000 E-Mini Index | 90 | March 2020 | $ | 4,500 | $ | 7,517,700 | $ | 97,957 |
NOTES TO SCHEDULE OF INVESTMENTS |
† | Category is less than 0.05% of total net assets. |
(1) | Non-income producing. |
(2) | Security, or a portion thereof, is on loan. At the period end, the aggregate value of securities on loan was $5,349,066. The amount of securities on loan indicated may not correspond with the securities on loan identified because securities with pending sales are in the process of recall from the brokers. |
(3) | Investment of cash collateral from securities on loan. At the period end, the aggregate market value of the collateral held by the fund was $5,486,820, which includes securities collateral of $2,926,474. |
See Notes to Financial Statements.
14
Statement of Assets and Liabilities |
DECEMBER 31, 2019 (UNAUDITED) | |||
Assets | |||
Investment securities, at value (cost of $444,108,003) — including $5,349,066 of securities on loan | $ | 498,373,719 | |
Investment made with cash collateral received for securities on loan, at value (cost of $2,560,346) | 2,560,346 | ||
Total investment securities, at value (cost of $446,668,349) | 500,934,065 | ||
Deposits with broker for futures contracts | 270,000 | ||
Receivable for capital shares sold | 293,392 | ||
Receivable for variation margin on futures contracts | 9,900 | ||
Dividends and interest receivable | 385,331 | ||
Securities lending receivable | 2,826 | ||
501,895,514 | |||
Liabilities | |||
Payable for collateral received for securities on loan | 2,560,346 | ||
Payable for capital shares redeemed | 305,221 | ||
Accrued management fees | 371,521 | ||
Distribution and service fees payable | 7,722 | ||
3,244,810 | |||
Net Assets | $ | 498,650,704 | |
Net Assets Consist of: | |||
Capital (par value and paid-in surplus) | $ | 457,516,951 | |
Distributable earnings | 41,133,753 | ||
$ | 498,650,704 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | ||||
Investor Class, $0.01 Par Value | $462,706,989 | 33,098,484 | $13.98 | |||
I Class, $0.01 Par Value | $11,958,967 | 851,608 | $14.04 | |||
A Class, $0.01 Par Value | $13,047,193 | 959,298 | $13.60* | |||
C Class, $0.01 Par Value | $1,017,815 | 79,225 | $12.85 | |||
R Class, $0.01 Par Value | $9,683,995 | 731,838 | $13.23 | |||
R5 Class, $0.01 Par Value | $235,745 | 16,772 | $14.06 |
*Maximum offering price $14.43 (net asset value divided by 0.9425).
See Notes to Financial Statements.
15
Statement of Operations |
FOR THE SIX MONTHS ENDED DECEMBER 31, 2019 (UNAUDITED) | |||
Investment Income (Loss) | |||
Income: | |||
Dividends (net of foreign taxes withheld of $1,178) | $ | 3,800,034 | |
Interest | 185,341 | ||
Securities lending, net | 32,820 | ||
4,018,195 | |||
Expenses: | |||
Management fees | 2,473,703 | ||
Distribution and service fees: | |||
A Class | 16,712 | ||
C Class | 5,901 | ||
R Class | 24,514 | ||
Directors' fees and expenses | 22,562 | ||
Other expenses | 529 | ||
2,543,921 | |||
Net investment income (loss) | 1,474,274 | ||
Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investment transactions | 6,127,491 | ||
Futures contract transactions | (3,109 | ) | |
6,124,382 | |||
Change in net unrealized appreciation (depreciation) on: | |||
Investments | 22,803,320 | ||
Futures contracts | 97,957 | ||
22,901,277 | |||
Net realized and unrealized gain (loss) | 29,025,659 | ||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 30,499,933 |
See Notes to Financial Statements.
16
Statement of Changes in Net Assets |
SIX MONTHS ENDED DECEMBER 31, 2019 (UNAUDITED) AND YEAR ENDED JUNE 30, 2019 | ||||||
Increase (Decrease) in Net Assets | December 31, 2019 | June 30, 2019 | ||||
Operations | ||||||
Net investment income (loss) | $ | 1,474,274 | $ | 1,822,732 | ||
Net realized gain (loss) | 6,124,382 | 8,709,828 | ||||
Change in net unrealized appreciation (depreciation) | 22,901,277 | (55,593,892 | ) | |||
Net increase (decrease) in net assets resulting from operations | 30,499,933 | (45,061,332 | ) | |||
Distributions to Shareholders | ||||||
From earnings: | ||||||
Investor Class | (1,901,110 | ) | (60,872,390 | ) | ||
I Class | (114,473 | ) | (2,151,580 | ) | ||
A Class | (4,698 | ) | (1,924,288 | ) | ||
C Class | — | (194,670 | ) | |||
R Class | — | (1,385,413 | ) | |||
R5 Class | (1,696 | ) | (23,818 | ) | ||
Decrease in net assets from distributions | (2,021,977 | ) | (66,552,159 | ) | ||
Capital Share Transactions | ||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | (141,421,238 | ) | 62,169,196 | |||
Net increase (decrease) in net assets | (112,943,282 | ) | (49,444,295 | ) | ||
Net Assets | ||||||
Beginning of period | 611,593,986 | 661,038,281 | ||||
End of period | $ | 498,650,704 | $ | 611,593,986 |
See Notes to Financial Statements.
17
Notes to Financial Statements |
DECEMBER 31, 2019 (UNAUDITED)
1. Organization
American Century Quantitative Equity Funds, Inc. (the corporation) is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company and is organized as a Maryland corporation. Small Company Fund (the fund) is one fund in a series issued by the corporation. The fund’s investment objective is to seek long-term capital growth by investing primarily in common stocks of small companies.
The fund offers the Investor Class, I Class, A Class, C Class, R Class and R5 Class. The A Class may incur an initial sales charge. The A Class and C Class may be subject to a contingent deferred sales charge.
2. Significant Accounting Policies
The following is a summary of significant accounting policies consistently followed by the fund in preparation of its financial statements. The fund is an investment company and follows accounting and reporting guidance in accordance with accounting principles generally accepted in the United States of America. This may require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from these estimates. Management evaluated the impact of events or transactions occurring through the date the financial statements were issued that would merit recognition or disclosure.
Investment Valuations — The fund determines the fair value of its investments and computes its net asset value per share at the close of regular trading (usually 4 p.m. Eastern time) on the New York Stock Exchange (NYSE) on each day the NYSE is open. The Board of Directors has adopted valuation policies and procedures to guide the investment advisor in the fund’s investment valuation process and to provide methodologies for the oversight of the fund’s pricing function.
Equity securities that are listed or traded on a domestic securities exchange are valued at the last reported sales price or at the official closing price as provided by the exchange. Equity securities traded on foreign securities exchanges are generally valued at the closing price of such securities on the exchange where primarily traded or at the close of the NYSE, if that is earlier. If no last sales price is reported, or if local convention or regulation so provides, the mean of the latest bid and asked prices may be used. Securities traded over-the-counter are valued at the mean of the latest bid and asked prices, the last sales price, or the official closing price.
Open-end management investment companies are valued at the reported net asset value per share. Repurchase agreements are valued at cost, which approximates fair value. Exchange-traded futures contracts are valued at the settlement price as provided by the appropriate exchange.
If the fund determines that the market price for an investment is not readily available or the valuation methods mentioned above do not reflect an investment’s fair value, such investment is valued as determined in good faith by the Board of Directors or its delegate, in accordance with policies and procedures adopted by the Board of Directors. In its determination of fair value, the fund may review several factors including, but not limited to, market information regarding the specific investment or comparable investments and correlation with other investment types, futures indices or general market indicators. Circumstances that may cause the fund to use these procedures to value an investment include, but are not limited to: an investment has been declared in default or is distressed; trading in a security has been suspended during the trading day or a security is not actively trading on its principal exchange; prices received from a regular pricing source are deemed unreliable; or there is a foreign market holiday and no trading occurred.
The fund monitors for significant events occurring after the close of an investment’s primary exchange but before the fund’s net asset value per share is determined. Significant events may include, but are not limited to: corporate announcements and transactions; governmental action and political unrest that could impact a specific investment or an investment sector; or armed conflicts, natural disasters and similar events that could affect investments in a specific country or region. The fund also monitors for significant fluctuations between domestic and foreign markets, as evidenced by the U.S. market or such other indicators that the Board of
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Directors, or its delegate, deems appropriate. The fund may apply a model-derived factor to the closing price of equity securities traded on foreign securities exchanges. The factor is based on observable market data as provided by an independent pricing service.
Security Transactions — Security transactions are accounted for as of the trade date. Net realized gains and losses are determined on the identified cost basis, which is also used for federal income tax purposes.
Investment Income — Dividend income less foreign taxes withheld, if any, is recorded as of the ex-dividend date. Distributions received on securities that represent a return of capital or long-term capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The fund may estimate the components of distributions received that may be considered nontaxable distributions or long-term capital gain distributions for income tax purposes. Interest income is recorded on the accrual basis and includes accretion of discounts and amortization of premiums. Securities lending income is net of fees and rebates earned by the lending agent for its services.
Repurchase Agreements — The fund may enter into repurchase agreements with institutions that American Century Investment Management, Inc. (ACIM) (the investment advisor) has determined are creditworthy pursuant to criteria adopted by the Board of Directors. The fund requires that the collateral, represented by securities, received in a repurchase transaction be transferred to the custodian in a manner sufficient to enable the fund to obtain those securities in the event of a default under the repurchase agreement. ACIM monitors, on a daily basis, the securities transferred to ensure the value, including accrued interest, of the securities under each repurchase agreement is equal to or greater than amounts owed to the fund under each repurchase agreement.
Joint Trading Account — Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the fund, along with certain other funds in the American Century Investments family of funds, may transfer uninvested cash balances into a joint trading account. These balances are invested in one or more repurchase agreements that are collateralized by U.S. Treasury or Agency obligations.
Segregated Assets — In accordance with the 1940 Act, the fund segregates assets on its books and records to cover certain types of investment securities and other financial instruments. ACIM monitors, on a daily basis, the securities segregated to ensure the fund designates a sufficient amount of liquid assets, marked-to-market daily. The fund may also receive assets or be required to pledge assets at the custodian bank or with a broker for collateral requirements.
Income Tax Status — It is the fund’s policy to distribute substantially all net investment income and net realized gains to shareholders and to otherwise qualify as a regulated investment company under provisions of the Internal Revenue Code. Accordingly, no provision has been made for income taxes. The fund files U.S. federal, state, local and non-U.S. tax returns as applicable. The fund's tax returns are subject to examination by the relevant taxing authority until expiration of the applicable statute of limitations, which is generally three years from the date of filing but can be longer in certain jurisdictions. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination and for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Multiple Class — All shares of the fund represent an equal pro rata interest in the net assets of the class to which such shares belong, and have identical voting, dividend, liquidation and other rights and the same terms and conditions, except for class specific expenses and exclusive rights to vote on matters affecting only individual classes. Income, non-class specific expenses, and realized and unrealized capital gains and losses of the fund are allocated to each class of shares based on their relative net assets.
Distributions to Shareholders — Distributions from net investment income, if any, are generally declared and paid quarterly. Distributions from net realized gains, if any, are generally declared and paid annually.
Indemnifications — Under the corporation’s organizational documents, its officers and directors are indemnified against certain liabilities arising out of the performance of their duties to the fund. In addition, in the normal course of business, the fund enters into contracts that provide general indemnifications. The maximum exposure under these arrangements is unknown as this would involve future claims that may be made against a fund. The risk of material loss from such claims is considered by management to be remote.
Securities Lending — Securities are lent to qualified financial institutions and brokers. State Street Bank & Trust Co. serves as securities lending agent to the fund pursuant to a Securities Lending Agreement. The lending of securities exposes the fund to risks such as: the borrowers may fail to return the loaned securities,
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the borrowers may not be able to provide additional collateral, the fund may experience delays in recovery of the loaned securities or delays in access to collateral, or the fund may experience losses related to the investment collateral. To minimize certain risks, loan counterparties pledge collateral in the form of cash and/or securities. The lending agent has agreed to indemnify the fund in the case of default of any securities borrowed. Cash collateral received is invested in the State Street Navigator Securities Lending Government Money Market Portfolio, a money market mutual fund registered under the 1940 Act. The loans may also be secured by U.S. government securities in an amount at least equal to the market value of the securities loaned, plus accrued interest and dividends, determined on a daily basis and adjusted accordingly. By lending securities, the fund seeks to increase its net investment income through the receipt of interest and fees. Such income is reflected separately within the Statement of Operations. The value of loaned securities and related collateral outstanding at period end, if any, are shown on a gross basis within the Schedule of Investments and Statement of Assets and Liabilities.
The following table reflects a breakdown of transactions accounted for as secured borrowings, the gross obligation by the type of collateral pledged, and the remaining contractual maturity of those transactions as of December 31, 2019.
Remaining Contractual Maturity of Agreements | ||||||||||||
Overnight and Continuous | <30 days | Between 30 & 90 days | >90 days | Total | ||||||||
Securities Lending Transactions(1) | ||||||||||||
Common Stocks | $ | 2,560,346 | — | — | — | $ | 2,560,346 | |||||
Gross amount of recognized liabilities for securities lending transactions | $ | 2,560,346 |
(1) | Amount represents the payable for cash collateral received for securities on loan. This will generally be in the Overnight and Continuous column as the securities are typically callable on demand. |
3. Fees and Transactions with Related Parties
Certain officers and directors of the corporation are also officers and/or directors of American Century Companies, Inc. (ACC). The corporation’s investment advisor, ACIM, the corporation's distributor, American Century Investment Services, Inc. (ACIS), and the corporation’s transfer agent, American Century Services, LLC, are wholly owned, directly or indirectly, by ACC.
Management Fees — The corporation has entered into a management agreement with ACIM, under which ACIM provides the fund with investment advisory and management services in exchange for a single, unified management fee (the fee) per class. The agreement provides that all expenses of managing and operating the fund, except distribution and service fees, brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), and extraordinary expenses, will be paid by ACIM. The fee is computed and accrued daily based on each class's daily net assets and paid monthly in arrears. The difference in the fee among the classes is a result of their separate arrangements for non-Rule 12b-1 shareholder services. It is not the result of any difference in advisory or custodial fees or other expenses related to the management of the fund’s assets, which do not vary by class. The fee consists of (1) an Investment Category Fee based on the daily net assets of the fund and certain other accounts managed by the investment advisor that are in the same broad investment category as the fund and (2) a Complex Fee based on the assets of all the funds in the American Century Investments family of funds.
The Investment Category Fee range, the Complex Fee range and the effective annual management fee for each class for the period ended December 31, 2019 are as follows:
Investment Category Fee Range | Complex Fee Range | Effective Annual Management Fee | |
Investor Class | 0.5380% to 0.7200% | 0.2500% to 0.3100% | 0.86% |
I Class | 0.0500% to 0.1100% | 0.66% | |
A Class | 0.2500% to 0.3100% | 0.86% | |
C Class | 0.2500% to 0.3100% | 0.86% | |
R Class | 0.2500% to 0.3100% | 0.86% | |
R5 Class | 0.0500% to 0.1100% | 0.66% |
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Distribution and Service Fees — The Board of Directors has adopted a separate Master Distribution and Individual Shareholder Services Plan for each of the A Class, C Class and R Class (collectively the plans), pursuant to Rule 12b-1 of the 1940 Act. The plans provide that the A Class will pay ACIS an annual distribution and service fee of 0.25%. The plans provide that the C Class will pay ACIS an annual distribution and service fee of 1.00%, of which 0.25% is paid for individual shareholder services and 0.75% is paid for distribution services. The plans provide that the R Class will pay ACIS an annual distribution and service fee of 0.50%. The fees are computed and accrued daily based on each class’s daily net assets and paid monthly in arrears. The fees are used to pay financial intermediaries for distribution and individual shareholder services. Fees incurred under the plans during the period ended December 31, 2019 are detailed in the Statement of Operations.
Directors' Fees and Expenses — The Board of Directors is responsible for overseeing the investment advisor’s management and operations of the fund. The directors receive detailed information about the fund and its investment advisor regularly throughout the year, and meet at least quarterly with management of the investment advisor to review reports about fund operations. The fund’s officers do not receive compensation from the fund.
Interfund Transactions — The fund may enter into security transactions with other American Century Investments funds and other client accounts of the investment advisor, in accordance with the 1940 Act rules and procedures adopted by the Board of Directors. The rules and procedures require, among other things, that these transactions be effected at the independent current market price of the security. During the period, the interfund purchases and sales were $10,028,765 and $5,605,228, respectively. The effect of interfund transactions on the Statement of Operations was $723,022 in net realized gain (loss) on investment transactions.
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the period ended December 31, 2019 were $300,705,731 and $447,784,654, respectively.
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5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended December 31, 2019 | Year ended June 30, 2019 | |||||||||
Shares | Amount | Shares | Amount | |||||||
Investor Class/Shares Authorized | 340,000,000 | 340,000,000 | ||||||||
Sold | 1,428,297 | $ | 18,712,046 | 8,566,116 | $ | 120,535,946 | ||||
Issued in reinvestment of distributions | 139,045 | 1,867,669 | 4,843,836 | 59,918,460 | ||||||
Redeemed | (11,103,981 | ) | (150,300,338 | ) | (7,430,997 | ) | (105,877,692 | ) | ||
(9,536,639 | ) | (129,720,623 | ) | 5,978,955 | 74,576,714 | |||||
I Class/Shares Authorized | 35,000,000 | 35,000,000 | ||||||||
Sold | 353,014 | 4,610,155 | 681,560 | 9,730,626 | ||||||
Issued in reinvestment of distributions | 8,508 | 114,417 | 171,734 | 2,150,512 | ||||||
Redeemed | (879,347 | ) | (11,957,662 | ) | (1,157,692 | ) | (16,981,008 | ) | ||
(517,825 | ) | (7,233,090 | ) | (304,398 | ) | (5,099,870 | ) | |||
A Class/Shares Authorized | 35,000,000 | 35,000,000 | ||||||||
Sold | 58,798 | 756,749 | 219,970 | 3,035,504 | ||||||
Issued in reinvestment of distributions | 323 | 4,287 | 134,925 | 1,621,800 | ||||||
Redeemed | (260,381 | ) | (3,338,699 | ) | (713,257 | ) | (10,045,216 | ) | ||
(201,260 | ) | (2,577,663 | ) | (358,362 | ) | (5,387,912 | ) | |||
C Class/Shares Authorized | 15,000,000 | 15,000,000 | ||||||||
Sold | 326 | 3,940 | 17,797 | 249,506 | ||||||
Issued in reinvestment of distributions | — | — | 15,968 | 182,677 | ||||||
Redeemed | (44,535 | ) | (527,580 | ) | (41,538 | ) | (530,641 | ) | ||
(44,209 | ) | (523,640 | ) | (7,773 | ) | (98,458 | ) | |||
R Class/Shares Authorized | 20,000,000 | 20,000,000 | ||||||||
Sold | 76,181 | 952,763 | 207,467 | 2,748,218 | ||||||
Issued in reinvestment of distributions | — | — | 104,398 | 1,223,547 | ||||||
Redeemed | (182,799 | ) | (2,263,916 | ) | (446,703 | ) | (5,902,157 | ) | ||
(106,618 | ) | (1,311,153 | ) | (134,838 | ) | (1,930,392 | ) | |||
R5 Class/Shares Authorized | 50,000,000 | 50,000,000 | ||||||||
Sold | 2,003 | 26,907 | 6,511 | 91,514 | ||||||
Issued in reinvestment of distributions | 126 | 1,696 | 1,904 | 23,818 | ||||||
Redeemed | (6,416 | ) | (83,672 | ) | (455 | ) | (6,218 | ) | ||
(4,287 | ) | (55,069 | ) | 7,960 | 109,114 | |||||
Net increase (decrease) | (10,410,838 | ) | $ | (141,421,238 | ) | 5,181,544 | $ | 62,169,196 |
6. Fair Value Measurements
The fund’s investments valuation process is based on several considerations and may use multiple inputs to determine the fair value of the investments held by the fund. In conformity with accounting principles generally accepted in the United States of America, the inputs used to determine a valuation are classified into three broad levels.
• | Level 1 valuation inputs consist of unadjusted quoted prices in an active market for identical investments. |
• | Level 2 valuation inputs consist of direct or indirect observable market data (including quoted prices for comparable investments, evaluations of subsequent market events, interest rates, prepayment speeds, credit risk, etc.). These inputs also consist of quoted prices for identical investments initially expressed in local currencies that are adjusted through translation into U.S. dollars. |
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• | Level 3 valuation inputs consist of unobservable data (including a fund’s own assumptions). |
The level classification is based on the lowest level input that is significant to the fair valuation measurement. The valuation inputs are not necessarily an indication of the risks associated with investing in these securities or other financial instruments.
The following is a summary of the level classifications as of period end. The Schedule of Investments provides additional information on the fund’s portfolio holdings.
Level 1 | Level 2 | Level 3 | ||||||
Assets | ||||||||
Investment Securities | ||||||||
Common Stocks | $ | 484,131,625 | — | — | ||||
Temporary Cash Investments | 7,407 | $ | 14,234,687 | — | ||||
Temporary Cash Investments - Securities Lending Collateral | 2,560,346 | — | — | |||||
$ | 486,699,378 | $ | 14,234,687 | — | ||||
Other Financial Instruments | ||||||||
Futures Contracts | $ | 97,957 | — | — |
7. Derivative Instruments
Equity Price Risk — The fund is subject to equity price risk in the normal course of pursuing its investment objectives. A fund may enter into futures contracts based on an equity index in order to manage its exposure to changes in market conditions. A fund may purchase futures contracts to gain exposure to increases in market value or sell futures contracts to protect against a decline in market value. Upon entering into a futures contract, a fund is required to deposit either cash or securities in an amount equal to a certain percentage of the contract value (initial margin). Subsequent payments (variation margin) are made or received daily, in cash, by a fund. The variation margin is equal to the daily change in the contract value and is recorded as unrealized gains and losses. A fund recognizes a realized gain or loss when the contract is closed or expires. Net realized and unrealized gains or losses occurring during the holding period of futures contracts are a component of net realized gain (loss) on futures contract transactions and change in net unrealized appreciation (depreciation) on futures contracts, respectively. One of the risks of entering into futures contracts is the possibility that the change in value of the contract may not correlate with the changes in value of the underlying securities. The fund's average notional exposure to equity price risk derivative instruments held during the period was $13,725 futures contracts purchased.
The value of equity price risk derivative instruments as of December 31, 2019, is disclosed on the Statement of Assets and Liabilities as an asset of $9,900 in receivable for variation margin on futures contracts*. For the six months ended December 31, 2019, the effect of equity price risk derivative instruments on the Statement of Operations was $(3,109) in net realized gain (loss) on futures contract transactions and $97,957 in change in net unrealized appreciation (depreciation) on futures contracts.
* Included in the unrealized appreciation (depreciation) on futures contracts as reported in the Schedule of Investments.
8. Risk Factors
The fund invests in common stocks of small companies. Because of this, the fund may be subject to greater risk and market fluctuations than a fund investing in larger, more established companies.
The fund’s investment process may result in high portfolio turnover, which could mean high transaction costs, affecting both performance and capital gains tax liabilities to investors.
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9. Federal Tax Information
The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
As of period end, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $ | 447,433,871 | |
Gross tax appreciation of investments | $ | 67,794,471 | |
Gross tax depreciation of investments | (14,294,277 | ) | |
Net tax appreciation (depreciation) of investments | $ | 53,500,194 |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales.
As of June 30, 2019, the fund had post-October capital loss deferrals of $(20,384,844), which represent certain qualified losses that the fund has elected to treat as having been incurred in the following fiscal year for federal income tax purposes.
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Financial Highlights |
For a Share Outstanding Throughout the Years Ended June 30 (except as noted) | |||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||
Income From Investment Operations: | Distributions From: | Ratio to Average Net Assets of: | |||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Net Investment Income (Loss) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
Investor Class | |||||||||||||||
2019(3) | $13.28 | 0.03 | 0.72 | 0.75 | (0.05) | — | (0.05) | $13.98 | 5.65% | 0.87%(4) | 0.52%(4) | 55% | $462,707 | ||
2019 | $16.17 | 0.04 | (1.39) | (1.35) | (0.01) | (1.53) | (1.54) | $13.28 | (7.66)% | 0.87% | 0.30% | 99% | $566,025 | ||
2018 | $15.04 | 0.02 | 1.91 | 1.93 | (0.02) | (0.78) | (0.80) | $16.17 | 13.18% | 0.86% | 0.11% | 92% | $592,615 | ||
2017 | $12.46 | 0.05 | 2.58 | 2.63 | (0.05) | — | (0.05) | $15.04 | 21.19% | 0.87% | 0.37% | 90% | $594,198 | ||
2016 | $13.68 | 0.04 | (1.22) | (1.18) | (0.04) | — | (0.04) | $12.46 | (8.63)% | 0.88% | 0.36% | 93% | $654,517 | ||
2015 | $13.10 | 0.03 | 0.56 | 0.59 | (0.01) | — | (0.01) | $13.68 | 4.51% | 0.87% | 0.25% | 100% | $464,592 | ||
I Class | |||||||||||||||
2019(3) | $13.36 | 0.05 | 0.71 | 0.76 | (0.08) | — | (0.08) | $14.04 | 5.73% | 0.67%(4) | 0.72%(4) | 55% | $11,959 | ||
2019 | $16.26 | 0.07 | (1.40) | (1.33) | (0.04) | (1.53) | (1.57) | $13.36 | (7.50)% | 0.67% | 0.50% | 99% | $18,293 | ||
2018 | $15.11 | 0.05 | 1.92 | 1.97 | (0.04) | (0.78) | (0.82) | $16.26 | 13.42% | 0.66% | 0.31% | 92% | $27,213 | ||
2017 | $12.52 | 0.08 | 2.59 | 2.67 | (0.08) | — | (0.08) | $15.11 | 21.41% | 0.67% | 0.57% | 90% | $25,863 | ||
2016 | $13.76 | 0.07 | (1.24) | (1.17) | (0.07) | — | (0.07) | $12.52 | (8.50)% | 0.68% | 0.56% | 93% | $34,094 | ||
2015 | $13.15 | 0.06 | 0.57 | 0.63 | (0.02) | — | (0.02) | $13.76 | 4.77% | 0.67% | 0.45% | 100% | $39,483 |
For a Share Outstanding Throughout the Years Ended June 30 (except as noted) | |||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||
Income From Investment Operations: | Distributions From: | Ratio to Average Net Assets of: | |||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Net Investment Income (Loss) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
A Class | |||||||||||||||
2019(3) | $12.89 | 0.02 | 0.69 | 0.71 | —(5) | — | —(5) | $13.60 | 5.55% | 1.12%(4) | 0.27%(4) | 55% | $13,047 | ||
2019 | $15.78 | —(5) | (1.36) | (1.36) | — | (1.53) | (1.53) | $12.89 | (7.90)% | 1.12% | 0.05% | 99% | $14,960 | ||
2018 | $14.72 | (0.02) | 1.86 | 1.84 | — | (0.78) | (0.78) | $15.78 | 12.90% | 1.11% | (0.14)% | 92% | $23,970 | ||
2017 | $12.19 | 0.02 | 2.53 | 2.55 | (0.02) | — | (0.02) | $14.72 | 20.85% | 1.12% | 0.12% | 90% | $31,600 | ||
2016 | $13.39 | 0.01 | (1.20) | (1.19) | (0.01) | — | (0.01) | $12.19 | (8.89)% | 1.13% | 0.11% | 93% | $35,153 | ||
2015 | $12.84 | —(5) | 0.55 | 0.55 | —(5) | — | —(5) | $13.39 | 4.30% | 1.12% | 0.00%(6) | 100% | $47,471 | ||
C Class | |||||||||||||||
2019(3) | $12.22 | (0.03) | 0.66 | 0.63 | — | — | — | $12.85 | 5.16% | 1.87%(4) | (0.48)%(4) | 55% | $1,018 | ||
2019 | $15.16 | (0.10) | (1.31) | (1.41) | — | (1.53) | (1.53) | $12.22 | (8.60)% | 1.87% | (0.70)% | 99% | $1,508 | ||
2018 | $14.27 | (0.13) | 1.80 | 1.67 | — | (0.78) | (0.78) | $15.16 | 12.01% | 1.86% | (0.89)% | 92% | $1,989 | ||
2017 | $11.89 | (0.08) | 2.46 | 2.38 | — | — | — | $14.27 | 20.02% | 1.87% | (0.63)% | 90% | $1,703 | ||
2016 | $13.15 | (0.07) | (1.19) | (1.26) | — | — | — | $11.89 | (9.58)% | 1.88% | (0.64)% | 93% | $1,631 | ||
2015 | $12.70 | (0.09) | 0.54 | 0.45 | — | — | — | $13.15 | 3.54% | 1.87% | (0.75)% | 100% | $1,212 |
For a Share Outstanding Throughout the Years Ended June 30 (except as noted) | |||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||
Income From Investment Operations: | Distributions From: | Ratio to Average Net Assets of: | |||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Net Investment Income (Loss) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
R Class | |||||||||||||||
2019(3) | $12.55 | —(5) | 0.68 | 0.68 | — | — | — | $13.23 | 5.42% | 1.37%(4) | 0.02%(4) | 55% | $9,684 | ||
2019 | $15.45 | (0.03) | (1.34) | (1.37) | — | (1.53) | (1.53) | $12.55 | (8.15)% | 1.37% | (0.20)% | 99% | $10,525 | ||
2018 | $14.46 | (0.06) | 1.83 | 1.77 | — | (0.78) | (0.78) | $15.45 | 12.56% | 1.36% | (0.39)% | 92% | $15,038 | ||
2017 | $11.99 | (0.02) | 2.49 | 2.47 | — | — | — | $14.46 | 20.60% | 1.37% | (0.13)% | 90% | $17,067 | ||
2016 | $13.19 | (0.01) | (1.19) | (1.20) | — | — | — | $11.99 | (9.10)% | 1.38% | (0.14)% | 93% | $14,847 | ||
2015 | $12.68 | (0.03) | 0.54 | 0.51 | — | — | — | $13.19 | 4.02% | 1.37% | (0.25)% | 100% | $5,185 | ||
R5 Class | |||||||||||||||
2019(3) | $13.37 | 0.05 | 0.72 | 0.77 | (0.08) | — | (0.08) | $14.06 | 5.81% | 0.67%(4) | 0.72%(4) | 55% | $236 | ||
2019 | $16.27 | 0.07 | (1.40) | (1.33) | (0.04) | (1.53) | (1.57) | $13.37 | (7.49)% | 0.67% | 0.50% | 99% | $282 | ||
2018 | $15.12 | 0.06 | 1.90 | 1.96 | (0.03) | (0.78) | (0.81) | $16.27 | 13.34% | 0.66% | 0.31% | 92% | $213 | ||
2017(7) | $14.90 | 0.02 | 0.20 | 0.22 | — | — | — | $15.12 | 1.48% | 0.67%(4) | 0.51%(4) | 90%(8) | $5 |
Notes to Financial Highlights |
(1) | Computed using average shares outstanding throughout the period. |
(2) | Total returns are calculated based on the net asset value of the last business day and do not reflect applicable sales charges, if any. Total returns for periods less than one year are not annualized. |
(3) | Six months ended December 31, 2019 (unaudited). |
(4) | Annualized. |
(5) | Per-share amount was less than $0.005. |
(6) | Ratio was less than 0.005%. |
(7) | April 10, 2017 (commencement of sale) through June 30, 2017. |
(8) | Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended June 30, 2017. |
See Notes to Financial Statements.
Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain retirement accounts are subject to federal income tax withholding, unless you elect not to have withholding apply*. Tax will be withheld on the total amount withdrawn even though you may be receiving amounts that are not subject to withholding, such as nondeductible contributions. In such case, excess amounts of withholding could occur. You may adjust your withholding election so that a greater or lesser amount will be withheld.
If you don’t want us to withhold on this amount, you must notify us to not withhold the federal income tax. You may notify us in writing or in certain situations by telephone or through other electronic means. For systematic withdrawals, your withholding election will remain in effect until revoked or changed by filing a new election. You have the right to revoke your election at any time and change your withholding percentage for future distributions.
Remember, even if you elect not to have income tax withheld, you are liable for paying income tax on the taxable portion of your withdrawal. If you elect not to have income tax withheld or you don’t have enough income tax withheld, you may be responsible for payment of estimated tax. You may incur penalties under the estimated tax rules if your withholding and estimated tax payments are not sufficient. You can reduce or defer the income tax on a distribution by directly or indirectly rolling such distribution over to another IRA or eligible plan. You should consult your tax advisor for additional information.
State tax will be withheld if, at the time of your distribution, your address is within one of the mandatory withholding states and you have federal income tax withheld (or as otherwise required by state law). State taxes will be withheld from your distribution in accordance with the respective state rules.
*Some 403(b), 457 and qualified retirement plan distributions may be subject to 20% mandatory withholding, as they are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
Descriptions of the principles and policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund are available without charge, upon request, by calling 1-800-345-2021 or visiting American Century Investments’ website at americancentury.com/proxy. A description of the policies is also available on the Securities and Exchange Commission’s website at sec.gov. Information regarding how the investment advisor voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on americancentury.com/proxy. It is also available at sec.gov.
Quarterly Portfolio Disclosure
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-Q or as an exhibit to its reports on Form N-PORT. The fund’s Forms N-Q and Form N-PORT reports are available on the SEC’s website at sec.gov. The fund also makes its complete schedule of portfolio holdings for the most recent quarter of its fiscal year available on its website at americancentury.com and, upon request, by calling 1-800-345-2021.
29
Notes |
30
Notes |
31
Notes |
32
Contact Us | americancentury.com | |
Automated Information Line | 1-800-345-8765 | |
Investor Services Representative | 1-800-345-2021 or 816-531-5575 | |
Investors Using Advisors | 1-800-378-9878 | |
Business, Not-For-Profit, Employer-Sponsored Retirement Plans | 1-800-345-3533 | |
Banks and Trust Companies, Broker-Dealers, Financial Professionals, Insurance Companies | 1-800-345-6488 | |
Telecommunications Relay Service for the Deaf | 711 | |
American Century Quantitative Equity Funds, Inc. | ||
Investment Advisor: American Century Investment Management, Inc. Kansas City, Missouri | ||
This report and the statements it contains are submitted for the general information of our shareholders. The report is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus. | ||
©2020 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-91457 2002 |
Semiannual Report | |
December 31, 2019 | |
Utilities Fund | |
Investor Class (BULIX) |
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the fund’s shareholder reports like this one will no longer be sent by mail, unless you specifically request paper copies of the reports from the fund or from your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the fund or your financial intermediary electronically by calling or sending an email request to your appropriate contacts as listed on the back cover of this report.
You may elect to receive all future reports in paper free of charge. You can inform the fund or your financial intermediary that you wish to continue receiving paper copies of your shareholder reports by calling or sending an email request to your appropriate contacts as listed on the back cover of this report. Your election to receive reports in paper will apply to all funds held with the fund complex/your financial intermediary.
Table of Contents |
Any opinions expressed in this report reflect those of the author as of the date of the report, and do not necessarily represent the opinions of American Century Investments® or any other person in the American Century Investments organization. Any such opinions are subject to change at any time based upon market or other conditions and American Century Investments disclaims any responsibility to update such opinions. These opinions may not be relied upon as investment advice and, because investment decisions made by American Century Investments funds are based on numerous factors, may not be relied upon as an indication of trading intent on behalf of any American Century Investments fund. Security examples are used for representational purposes only and are not intended as recommendations to purchase or sell securities. Performance information for comparative indices and securities is provided to American Century Investments by third party vendors. To the best of American Century Investments’ knowledge, such information is accurate at the time of printing.
President’s Letter |
Jonathan Thomas
Dear Investor:
Thank you for reviewing this semiannual report for the period ended December 31, 2019. It provides a market overview (below), followed by a schedule of fund investments and other financial information. For additional commentary and information on fund performance, plus other investment insights, please visit our website, americancentury.com.
All Asset Classes Advanced
From higher-quality government bonds to higher-risk stocks and commodities, all major U.S. and global asset classes posted gains for the six-month period. U.S. stocks, as measured by the S&P 500 Index, advanced almost 11% for the period, outpacing the nearly 9% return for global stocks (MSCI ACWI). Income-oriented assets, including U.S. and global bonds and dividend-paying stocks, generally posted more-modest gains.
A key policy pivot from the Federal Reserve (Fed) helped set the stage for the rally. After abruptly ending its three-year rate-hike campaign in early 2019, the Fed cut rates in July. Ongoing concerns about global economic risks, including trade policy uncertainty, prompted this first Fed easing move in 10 years. And with global risks still looming, the Fed cut rates again in September and October before pausing. Similarly, the European Central Bank cut a key deposit rate and relaunched quantitative easing in a move to spark growth. These efforts helped push global yields lower, which aided performance among interest rate-sensitive assets.
Accommodative central bank policy and a lower interest rate backdrop also aided performance in equity markets. Additionally, modestly improving economic and earnings data calmed investors’ earlier worries and nudged stock returns higher. In December, a series of upbeat data helped stocks end the period on a high note. U.K. Prime Minister Boris Johnson and his Conservative Party won a decisive election victory, which resolved some lingering Brexit uncertainty. On the trade front, the U.S. House of Representatives approved the U.S.-Mexico-Canada Agreement, and the U.S. and China reached a phase 1 deal, further fueling investor optimism.
Looking ahead, we expect volatility to remain a factor as investors react to global growth trends, ongoing U.S.-China trade negotiations, central bank policy and geopolitical forces. We believe this scenario underscores the importance of using professionally managed portfolios in pursuit of investment goals. We appreciate your continued trust and confidence in us.
Sincerely,
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
2
Fund Characteristics |
DECEMBER 31, 2019 | |
Top Ten Holdings | % of net assets |
AT&T, Inc. | 12.6% |
Verizon Communications, Inc. | 11.5% |
Southern Co. (The) | 5.0% |
Entergy Corp. | 5.0% |
PPL Corp. | 4.9% |
FirstEnergy Corp. | 4.8% |
American Electric Power Co., Inc. | 4.7% |
NextEra Energy, Inc. | 4.5% |
Sempra Energy | 3.7% |
Public Service Enterprise Group, Inc. | 3.4% |
Sub-Industry Allocation | % of net assets |
Electric Utilities | 43.8% |
Integrated Telecommunication Services | 24.1% |
Multi-Utilities | 22.5% |
Independent Power Producers and Energy Traders | 3.7% |
Water Utilities | 2.7% |
Alternative Carriers | 0.7% |
Semiconductors | 0.6% |
Application Software | 0.4% |
Renewable Electricity | 0.2% |
Industrial Machinery | 0.2% |
Electronic Equipment and Instruments | 0.2% |
Wireless Telecommunication Services | 0.1% |
Cash and Equivalents* | 0.8% |
*Includes temporary cash investments and other assets and liabilities. | |
Types of Investments in Portfolio | % of net assets |
Common Stocks | 99.2% |
Temporary Cash Investments | 0.7% |
Other Assets and Liabilities | 0.1% |
3
Shareholder Fee Example |
Fund shareholders may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption/exchange fees; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in your fund and to compare these costs with the ongoing cost of investing in other mutual funds.
The example is based on an investment of $1,000 made at the beginning of the period and held for the entire period from July 1, 2019 to December 31, 2019.
Actual Expenses
The table provides information about actual account values and actual expenses for each class. You may use the information, together with the amount you invested, to estimate the expenses that you paid over the period. First, identify the share class you own. Then simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
If you hold Investor Class shares of any American Century Investments fund, or I Class shares of the American Century Diversified Bond Fund, in an American Century Investments account (i.e., not a financial intermediary or retirement plan account), American Century Investments may charge you a $12.50 semiannual account maintenance fee if the value of those shares is less than $10,000. We will redeem shares automatically in one of your accounts to pay the $12.50 fee. In determining your total eligible investment amount, we will include your investments in all personal accounts (including American Century Investments Brokerage accounts) registered under your Social Security number. Personal accounts include individual accounts, joint accounts, UGMA/UTMA accounts, personal trusts, Coverdell Education Savings Accounts and IRAs (including traditional, Roth, Rollover, SEP-, SARSEP- and SIMPLE-IRAs), and certain other retirement accounts. If you have only business, business retirement, employer-sponsored or American Century Investments Brokerage accounts, you are currently not subject to this fee. If you are subject to the Account Maintenance Fee, your account value could be reduced by the fee amount.
Hypothetical Example for Comparison Purposes
The table also provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio of each class of your fund and an assumed rate of return of 5% per year before expenses, which is not the actual return of a fund’s share class. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) or redemption/exchange fees. Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
4
Beginning Account Value 7/1/19 | Ending Account Value 12/31/19 | Expenses Paid During Period(1) 7/1/19 - 12/31/19 | Annualized Expense Ratio(1) | |
Actual | ||||
Investor Class | $1,000 | $1,082.60 | $3.51 | 0.67% |
Hypothetical | ||||
Investor Class | $1,000 | $1,021.77 | $3.40 | 0.67% |
(1) | Expenses are equal to the class's annualized expense ratio listed in the table above, multiplied by the average account value over the period, multiplied by 184, the number of days in the most recent fiscal half-year, divided by 366, to reflect the one-half year period. Annualized expense ratio reflects actual expenses, including any applicable fee waivers or expense reimbursements and excluding any acquired fund fees and expenses. |
5
Schedule of Investments |
DECEMBER 31, 2019 (UNAUDITED)
Shares | Value | |||
COMMON STOCKS — 99.2% | ||||
Alternative Carriers — 0.7% | ||||
CenturyLink, Inc. | 131,015 | $ | 1,730,708 | |
Cogent Communications Holdings, Inc. | 19,063 | 1,254,536 | ||
2,985,244 | ||||
Application Software — 0.4% | ||||
j2 Global, Inc. | 19,352 | 1,813,476 | ||
Electric Utilities — 43.8% | ||||
American Electric Power Co., Inc. | 206,519 | 19,518,111 | ||
Duke Energy Corp. | 132,623 | 12,096,544 | ||
Edison International | 131,000 | 9,878,710 | ||
Entergy Corp. | 172,414 | 20,655,197 | ||
Evergy, Inc. | 19,597 | 1,275,569 | ||
Eversource Energy | 24,221 | 2,060,480 | ||
Exelon Corp. | 292,023 | 13,313,328 | ||
FirstEnergy Corp. | 415,378 | 20,187,371 | ||
Hawaiian Electric Industries, Inc. | 62,566 | 2,931,843 | ||
NextEra Energy, Inc. | 77,682 | 18,811,473 | ||
OGE Energy Corp. | 123,072 | 5,473,012 | ||
Pinnacle West Capital Corp. | 23,706 | 2,131,880 | ||
Portland General Electric Co. | 216,259 | 12,065,090 | ||
PPL Corp. | 566,551 | 20,327,850 | ||
Southern Co. (The) | 324,804 | 20,690,015 | ||
Spark Energy, Inc., Class A(1) | 41,130 | 379,630 | ||
Xcel Energy, Inc. | 16,171 | 1,026,697 | ||
182,822,800 | ||||
Electronic Equipment and Instruments — 0.2% | ||||
Keysight Technologies, Inc.(2) | 7,898 | 810,572 | ||
Independent Power Producers and Energy Traders — 3.7% | ||||
AES Corp. | 557,038 | 11,085,056 | ||
NRG Energy, Inc. | 65,326 | 2,596,709 | ||
Vistra Energy Corp. | 78,671 | 1,808,646 | ||
15,490,411 | ||||
Industrial Machinery — 0.2% | ||||
Evoqua Water Technologies Corp.(2) | 44,189 | 837,381 | ||
Integrated Telecommunication Services — 24.1% | ||||
AT&T, Inc. | 1,338,146 | 52,294,746 | ||
Verizon Communications, Inc. | 784,024 | 48,139,073 | ||
100,433,819 | ||||
Multi-Utilities — 22.5% | ||||
Ameren Corp. | 86,130 | 6,614,784 | ||
Black Hills Corp. | 49,487 | 3,886,709 | ||
Consolidated Edison, Inc. | 71,158 | 6,437,664 | ||
Dominion Energy, Inc. | 155,750 | 12,899,215 |
6
Shares | Value | |||
DTE Energy Co. | 42,799 | $ | 5,558,306 | |
MDU Resources Group, Inc. | 348,956 | 10,367,483 | ||
NorthWestern Corp. | 104,360 | 7,479,481 | ||
Public Service Enterprise Group, Inc. | 241,161 | 14,240,557 | ||
Sempra Energy | 100,771 | 15,264,791 | ||
Unitil Corp. | 20,002 | 1,236,524 | ||
WEC Energy Group, Inc. | 104,924 | 9,677,141 | ||
93,662,655 | ||||
Renewable Electricity — 0.2% | ||||
Ormat Technologies, Inc. | 13,426 | 1,000,505 | ||
Semiconductors — 0.6% | ||||
QUALCOMM, Inc. | 27,416 | 2,418,914 | ||
Water Utilities — 2.7% | ||||
American States Water Co. | 19,486 | 1,688,267 | ||
American Water Works Co., Inc. | 42,668 | 5,241,764 | ||
Aqua America, Inc. | 77,844 | 3,653,997 | ||
AquaVenture Holdings Ltd.(2) | 7,685 | 208,417 | ||
York Water Co. (The) | 8,740 | 403,002 | ||
11,195,447 | ||||
Wireless Telecommunication Services — 0.1% | ||||
Spok Holdings, Inc. | 30,650 | 374,849 | ||
TOTAL COMMON STOCKS (Cost $304,895,269) | 413,846,073 | |||
TEMPORARY CASH INVESTMENTS — 0.7% | ||||
Repurchase Agreement, BMO Capital Markets Corp., (collateralized by various U.S. Treasury obligations, 2.75% - 3.75%, 9/15/21 - 11/15/43, valued at $2,240,344), in a joint trading account at 1.35%, dated 12/31/19, due 1/2/20 (Delivery value $2,193,261) | 2,193,097 | |||
Repurchase Agreement, Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 1.625%, 12/15/22, valued at $500,741), at 0.65%, dated 12/31/19, due 1/2/20 (Delivery value $488,018) | 488,000 | |||
State Street Institutional U.S. Government Money Market Fund, Premier Class | 1,411 | 1,411 | ||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $2,682,508) | 2,682,508 | |||
TOTAL INVESTMENT SECURITIES — 99.9% (Cost $307,577,777) | 416,528,581 | |||
OTHER ASSETS AND LIABILITIES — 0.1% | 519,926 | |||
TOTAL NET ASSETS — 100.0% | $ | 417,048,507 |
NOTES TO SCHEDULE OF INVESTMENTS |
(1) | Security, or a portion thereof, is on loan. At the period end, the aggregate value of securities on loan was $131,426. The amount of securities on loan indicated may not correspond with the securities on loan identified because securities with pending sales are in the process of recall from the brokers. At period end, the aggregate market value of the collateral held by the fund was $141,209, all of which is securities collateral. |
(2) | Non-income producing. |
See Notes to Financial Statements.
7
Statement of Assets and Liabilities |
DECEMBER 31, 2019 (UNAUDITED) | |||
Assets | |||
Investment securities, at value (cost of $307,577,777) — including $131,426 of securities on loan | $ | 416,528,581 | |
Receivable for investments sold | 2,952,958 | ||
Receivable for capital shares sold | 63,302 | ||
Dividends and interest receivable | 636,453 | ||
Securities lending receivable | 30 | ||
420,181,324 | |||
Liabilities | |||
Payable for investments purchased | 2,729,992 | ||
Payable for capital shares redeemed | 171,980 | ||
Accrued management fees | 230,845 | ||
3,132,817 | |||
Net Assets | $ | 417,048,507 | |
Investor Class Capital Shares, $0.01 Par Value | |||
Shares authorized | 260,000,000 | ||
Shares outstanding | 21,891,348 | ||
Net Asset Value Per Share | $ | 19.05 | |
Net Assets Consist of: | |||
Capital (par value and paid-in surplus) | $ | 313,189,348 | |
Distributable earnings | 103,859,159 | ||
$ | 417,048,507 |
See Notes to Financial Statements.
8
Statement of Operations |
FOR THE SIX MONTHS ENDED DECEMBER 31, 2019 (UNAUDITED) | |||
Investment Income (Loss) | |||
Income: | |||
Dividends | $ | 7,734,301 | |
Interest | 24,495 | ||
Securities lending, net | 206 | ||
7,759,002 | |||
Expenses: | |||
Management fees | 1,367,431 | ||
Directors' fees and expenses | 15,695 | ||
Other expenses | 216 | ||
1,383,342 | |||
Net investment income (loss) | 6,375,660 | ||
Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on investment transactions | 1,069,923 | ||
Change in net unrealized appreciation (depreciation) on: | |||
Investments | 25,185,024 | ||
Translation of assets and liabilities in foreign currencies | (69 | ) | |
25,184,955 | |||
Net realized and unrealized gain (loss) | 26,254,878 | ||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 32,630,538 |
See Notes to Financial Statements.
9
Statement of Changes in Net Assets |
SIX MONTHS ENDED DECEMBER 31, 2019 (UNAUDITED) AND YEAR ENDED JUNE 30, 2019 | ||||||
Increase (Decrease) in Net Assets | December 31, 2019 | June 30, 2019 | ||||
Operations | ||||||
Net investment income (loss) | $ | 6,375,660 | $ | 13,031,196 | ||
Net realized gain (loss) | 1,069,923 | 5,319,519 | ||||
Change in net unrealized appreciation (depreciation) | 25,184,955 | 28,451,216 | ||||
Net increase (decrease) in net assets resulting from operations | 32,630,538 | 46,801,931 | ||||
Distributions to Shareholders | ||||||
From earnings | (6,664,934 | ) | (22,923,015 | ) | ||
Capital Share Transactions | ||||||
Proceeds from shares sold | 18,969,782 | 54,018,722 | ||||
Proceeds from reinvestment of distributions | 6,280,633 | 21,790,113 | ||||
Payments for shares redeemed | (41,115,704 | ) | (98,583,216 | ) | ||
Net increase (decrease) in net assets from capital share transactions | (15,865,289 | ) | (22,774,381 | ) | ||
Net increase (decrease) in net assets | 10,100,315 | 1,104,535 | ||||
Net Assets | ||||||
Beginning of period | 406,948,192 | 405,843,657 | ||||
End of period | $ | 417,048,507 | $ | 406,948,192 | ||
Transactions in Shares of the Fund | ||||||
Sold | 1,025,831 | 3,095,555 | ||||
Issued in reinvestment of distributions | 333,291 | 1,249,905 | ||||
Redeemed | (2,229,455 | ) | (5,669,320 | ) | ||
Net increase (decrease) in shares of the fund | (870,333 | ) | (1,323,860 | ) |
See Notes to Financial Statements.
10
Notes to Financial Statements |
DECEMBER 31, 2019 (UNAUDITED)
1. Organization
American Century Quantitative Equity Funds, Inc. (the corporation) is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company and is organized as a Maryland corporation. Utilities Fund (the fund) is one fund in a series issued by the corporation. The fund’s investment objectives are to seek current income and long-term growth of capital and income. The fund invests at least 80% of its assets in equity securities of companies engaged in the utilities industry. The fund offers the Investor Class.
2. Significant Accounting Policies
The following is a summary of significant accounting policies consistently followed by the fund in preparation of its financial statements. The fund is an investment company and follows accounting and reporting guidance in accordance with accounting principles generally accepted in the United States of America. This may require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from these estimates. Management evaluated the impact of events or transactions occurring through the date the financial statements were issued that would merit recognition or disclosure.
Investment Valuations — The fund determines the fair value of its investments and computes its net asset value per share at the close of regular trading (usually 4 p.m. Eastern time) on the New York Stock Exchange (NYSE) on each day the NYSE is open. The Board of Directors has adopted valuation policies and procedures to guide the investment advisor in the fund’s investment valuation process and to provide methodologies for the oversight of the fund’s pricing function.
Equity securities that are listed or traded on a domestic securities exchange are valued at the last reported sales price or at the official closing price as provided by the exchange. Equity securities traded on foreign securities exchanges are generally valued at the closing price of such securities on the exchange where primarily traded or at the close of the NYSE, if that is earlier. If no last sales price is reported, or if local convention or regulation so provides, the mean of the latest bid and asked prices may be used. Securities traded over-the-counter are valued at the mean of the latest bid and asked prices, the last sales price, or the official closing price. Equity securities initially expressed in local currencies are translated into U.S. dollars at the mean of the appropriate currency exchange rate at the close of the NYSE as provided by an independent pricing service.
Open-end management investment companies are valued at the reported net asset value per share. Repurchase agreements are valued at cost, which approximates fair value.
If the fund determines that the market price for an investment is not readily available or the valuation methods mentioned above do not reflect an investment’s fair value, such investment is valued as determined in good faith by the Board of Directors or its delegate, in accordance with policies and procedures adopted by the Board of Directors. In its determination of fair value, the fund may review several factors including, but not limited to, market information regarding the specific investment or comparable investments and correlation with other investment types, futures indices or general market indicators. Circumstances that may cause the fund to use these procedures to value an investment include, but are not limited to: an investment has been declared in default or is distressed; trading in a security has been suspended during the trading day or a security is not actively trading on its principal exchange; prices received from a regular pricing source are deemed unreliable; or there is a foreign market holiday and no trading occurred.
The fund monitors for significant events occurring after the close of an investment’s primary exchange but before the fund’s net asset value per share is determined. Significant events may include, but are not limited to: corporate announcements and transactions; governmental action and political unrest that could impact a specific investment or an investment sector; or armed conflicts, natural disasters and similar events that could affect investments in a specific country or region. The fund also monitors for significant fluctuations between domestic and foreign markets, as evidenced by the U.S. market or such other indicators that the Board of Directors, or its delegate, deems appropriate. The fund may apply a model-derived factor to the closing price of equity securities traded on foreign securities exchanges. The factor is based on observable market data as provided by an independent pricing service.
11
Security Transactions — Security transactions are accounted for as of the trade date. Net realized gains and losses are determined on the identified cost basis, which is also used for federal income tax purposes.
Investment Income — Dividend income less foreign taxes withheld, if any, is recorded as of the ex-dividend date. Distributions received on securities that represent a return of capital or long-term capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The fund may estimate the components of distributions received that may be considered nontaxable distributions or long-term capital gain distributions for income tax purposes. Interest income is recorded on the accrual basis and includes accretion of discounts and amortization of premiums. Securities lending income is net of fees and rebates earned by the lending agent for its services.
Foreign Currency Translations — All assets and liabilities initially expressed in foreign currencies are translated into U.S. dollars at prevailing exchange rates at period end. The fund may enter into spot foreign currency exchange contracts to facilitate transactions denominated in a foreign currency. Purchases and sales of investment securities, dividend and interest income, spot foreign currency exchange contracts, and expenses are translated at the rates of exchange prevailing on the respective dates of such transactions. Net realized and unrealized foreign currency exchange gains or losses related to investment securities are a component of net realized gain (loss) on investment transactions and change in net unrealized appreciation (depreciation) on investments, respectively.
Repurchase Agreements — The fund may enter into repurchase agreements with institutions that American Century Investment Management, Inc. (ACIM) (the investment advisor) has determined are creditworthy pursuant to criteria adopted by the Board of Directors. The fund requires that the collateral, represented by securities, received in a repurchase transaction be transferred to the custodian in a manner sufficient to enable the fund to obtain those securities in the event of a default under the repurchase agreement. ACIM monitors, on a daily basis, the securities transferred to ensure the value, including accrued interest, of the securities under each repurchase agreement is equal to or greater than amounts owed to the fund under each repurchase agreement.
Joint Trading Account — Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the fund, along with certain other funds in the American Century Investments family of funds, may transfer uninvested cash balances into a joint trading account. These balances are invested in one or more repurchase agreements that are collateralized by U.S. Treasury or Agency obligations.
Segregated Assets — In accordance with the 1940 Act, the fund segregates assets on its books and records to cover certain types of investment securities and other financial instruments. ACIM monitors, on a daily basis, the securities segregated to ensure the fund designates a sufficient amount of liquid assets, marked-to-market daily. The fund may also receive assets or be required to pledge assets at the custodian bank or with a broker for collateral requirements.
Income Tax Status — It is the fund’s policy to distribute substantially all net investment income and net realized gains to shareholders and to otherwise qualify as a regulated investment company under provisions of the Internal Revenue Code. Accordingly, no provision has been made for income taxes. The fund files U.S. federal, state, local and non-U.S. tax returns as applicable. The fund's tax returns are subject to examination by the relevant taxing authority until expiration of the applicable statute of limitations, which is generally three years from the date of filing but can be longer in certain jurisdictions. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination and for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Distributions to Shareholders — Distributions from net investment income, if any, are generally declared and paid quarterly. Distributions from net realized gains, if any, are generally declared and paid annually.
Indemnifications — Under the corporation’s organizational documents, its officers and directors are indemnified against certain liabilities arising out of the performance of their duties to the fund. In addition, in the normal course of business, the fund enters into contracts that provide general indemnifications. The maximum exposure under these arrangements is unknown as this would involve future claims that may be made against a fund. The risk of material loss from such claims is considered by management to be remote.
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Securities Lending — Securities are lent to qualified financial institutions and brokers. State Street Bank & Trust Co. serves as securities lending agent to the fund pursuant to a Securities Lending Agreement. The lending of securities exposes the fund to risks such as: the borrowers may fail to return the loaned securities, the borrowers may not be able to provide additional collateral, the fund may experience delays in recovery of the loaned securities or delays in access to collateral, or the fund may experience losses related to the investment collateral. To minimize certain risks, loan counterparties pledge collateral in the form of cash and/or securities. The lending agent has agreed to indemnify the fund in the case of default of any securities borrowed. Cash collateral received is invested in the State Street Navigator Securities Lending Government Money Market Portfolio, a money market mutual fund registered under the 1940 Act. The loans may also be secured by U.S. government securities in an amount at least equal to the market value of the securities loaned, plus accrued interest and dividends, determined on a daily basis and adjusted accordingly. By lending securities, the fund seeks to increase its net investment income through the receipt of interest and fees. Such income is reflected separately within the Statement of Operations. The value of loaned securities and related collateral outstanding at period end, if any, are shown on a gross basis within the Schedule of Investments and Statement of Assets and Liabilities.
3. Fees and Transactions with Related Parties
Certain officers and directors of the corporation are also officers and/or directors of American Century Companies, Inc. (ACC). The corporation’s investment advisor, ACIM, the corporation's distributor, American Century Investment Services, Inc., and the corporation’s transfer agent, American Century Services, LLC, are wholly owned, directly or indirectly, by ACC.
Management Fees — The corporation has entered into a management agreement with ACIM, under which ACIM provides the fund with investment advisory and management services in exchange for a single, unified management fee (the fee). The agreement provides that all expenses of managing and operating the fund, except brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), and extraordinary expenses, will be paid by ACIM. The fee is computed and accrued daily based on the daily net assets of the fund and paid monthly in arrears. The fee consists of (1) an Investment Category Fee based on the daily net assets of the fund and certain other accounts managed by the investment advisor that are in the same broad investment category as the fund and (2) a Complex Fee based on the assets of all the funds in the American Century Investments family of funds. The rates for the Investment Category Fee range from 0.3380% to 0.5200% and the rates for the Complex Fee range from 0.2500% to 0.3100%. The effective annual management fee for the period ended December 31, 2019 was 0.66%.
Directors' Fees and Expenses — The Board of Directors is responsible for overseeing the investment advisor’s management and operations of the fund. The directors receive detailed information about the fund and its investment advisor regularly throughout the year, and meet at least quarterly with management of the investment advisor to review reports about fund operations. The fund’s officers do not receive compensation from the fund.
Interfund Transactions — The fund may enter into security transactions with other American Century Investments funds and other client accounts of the investment advisor, in accordance with the 1940 Act rules and procedures adopted by the Board of Directors. The rules and procedures require, among other things, that these transactions be effected at the independent current market price of the security. During the period, the interfund purchases were $10,975 and there were no interfund sales.
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the period ended December 31, 2019 were $102,354,308 and $117,575,448, respectively.
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5. Fair Value Measurements
The fund’s investments valuation process is based on several considerations and may use multiple inputs to determine the fair value of the investments held by the fund. In conformity with accounting principles generally accepted in the United States of America, the inputs used to determine a valuation are classified into three broad levels.
• | Level 1 valuation inputs consist of unadjusted quoted prices in an active market for identical investments. |
• | Level 2 valuation inputs consist of direct or indirect observable market data (including quoted prices for comparable investments, evaluations of subsequent market events, interest rates, prepayment speeds, credit risk, etc.). These inputs also consist of quoted prices for identical investments initially expressed in local currencies that are adjusted through translation into U.S. dollars. |
• | Level 3 valuation inputs consist of unobservable data (including a fund’s own assumptions). |
The level classification is based on the lowest level input that is significant to the fair valuation measurement. The valuation inputs are not necessarily an indication of the risks associated with investing in these securities or other financial instruments.
The following is a summary of the level classifications as of period end. The Schedule of Investments provides additional information on the fund’s portfolio holdings.
Level 1 | Level 2 | Level 3 | ||||||
Assets | ||||||||
Investment Securities | ||||||||
Common Stocks | $ | 413,846,073 | — | — | ||||
Temporary Cash Investments | 1,411 | $ | 2,681,097 | — | ||||
$ | 413,847,484 | $ | 2,681,097 | — |
6. Risk Factors
The fund concentrates its investments in a narrow segment of the total market. Because of this, the fund may be subject to greater risk and market fluctuations than a portfolio representing a broader range of industries.
7. Federal Tax Information
The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
As of period end, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $ | 310,966,654 | |
Gross tax appreciation of investments | $ | 106,027,229 | |
Gross tax depreciation of investments | (465,302 | ) | |
Net tax appreciation (depreciation) of investments | $ | 105,561,927 |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales.
As of June 30, 2019, the fund had post-October capital loss deferrals of $(3,184,328), which represent certain qualified losses that the fund has elected to treat as having been incurred in the following fiscal year for federal income tax purposes.
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Financial Highlights |
For a Share Outstanding Throughout the Years Ended June 30 (except as noted) | |||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||
Income From Investment Operations: | Distributions From: | Ratio to Average Net Assets of: | |||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Net Investment Income (Loss) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
Investor Class | |||||||||||||||
2019(3) | $17.88 | 0.29 | 1.18 | 1.47 | (0.30) | — | (0.30) | $19.05 | 8.26% | 0.67%(4) | 3.08%(4) | 25% | $417,049 | ||
2019 | $16.85 | 0.56 | 1.46 | 2.02 | (0.56) | (0.43) | (0.99) | $17.88 | 12.26% | 0.67% | 3.20% | 64% | $406,948 | ||
2018 | $18.14 | 0.58 | (0.58) | —(5) | (0.56) | (0.73) | (1.29) | $16.85 | (0.06)% | 0.67% | 3.31% | 48% | $405,844 | ||
2017 | $19.35 | 0.59 | (0.48) | 0.11 | (0.58) | (0.74) | (1.32) | $18.14 | 0.61% | 0.67% | 3.17% | 39% | $540,880 | ||
2016 | $16.28 | 0.57 | 3.44 | 4.01 | (0.54) | (0.40) | (0.94) | $19.35 | 25.76% | 0.68% | 3.35% | 36% | $640,342 | ||
2015 | $18.03 | 0.55 | (0.98) | (0.43) | (0.58) | (0.74) | (1.32) | $16.28 | (2.73)% | 0.67% | 3.14% | 40% | $348,382 |
Notes to Financial Highlights |
(1) | Computed using average shares outstanding throughout the period. |
(2) | Total returns are calculated based on the net asset value of the last business day. Total returns for periods less than one year are not annualized. |
(3) | Six months ended December 31, 2019 (unaudited). |
(4) | Annualized. |
(5) | Per-share amount was less than $0.005. |
See Notes to Financial Statements.
Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain retirement accounts are subject to federal income tax withholding, unless you elect not to have withholding apply*. Tax will be withheld on the total amount withdrawn even though you may be receiving amounts that are not subject to withholding, such as nondeductible contributions. In such case, excess amounts of withholding could occur. You may adjust your withholding election so that a greater or lesser amount will be withheld.
If you don’t want us to withhold on this amount, you must notify us to not withhold the federal income tax. You may notify us in writing or in certain situations by telephone or through other electronic means. For systematic withdrawals, your withholding election will remain in effect until revoked or changed by filing a new election. You have the right to revoke your election at any time and change your withholding percentage for future distributions.
Remember, even if you elect not to have income tax withheld, you are liable for paying income tax on the taxable portion of your withdrawal. If you elect not to have income tax withheld or you don’t have enough income tax withheld, you may be responsible for payment of estimated tax. You may incur penalties under the estimated tax rules if your withholding and estimated tax payments are not sufficient. You can reduce or defer the income tax on a distribution by directly or indirectly rolling such distribution over to another IRA or eligible plan. You should consult your tax advisor for additional information.
State tax will be withheld if, at the time of your distribution, your address is within one of the mandatory withholding states and you have federal income tax withheld (or as otherwise required by state law). State taxes will be withheld from your distribution in accordance with the respective state rules.
*Some 403(b), 457 and qualified retirement plan distributions may be subject to 20% mandatory withholding, as they are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
Descriptions of the principles and policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund are available without charge, upon request, by calling 1-800-345-2021 or visiting American Century Investments’ website at americancentury.com/proxy. A description of the policies is also available on the Securities and Exchange Commission’s website at sec.gov. Information regarding how the investment advisor voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on americancentury.com/proxy. It is also available at sec.gov.
Quarterly Portfolio Disclosure
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-Q or as an exhibit to its reports on Form N-PORT. The fund’s Forms N-Q and Form N-PORT reports are available on the SEC’s website at sec.gov. The fund also makes its complete schedule of portfolio holdings for the most recent quarter of its fiscal year available on its website at americancentury.com and, upon request, by calling 1-800-345-2021.
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Contact Us | americancentury.com | |
Automated Information Line | 1-800-345-8765 | |
Investor Services Representative | 1-800-345-2021 or 816-531-5575 | |
Investors Using Advisors | 1-800-378-9878 | |
Business, Not-For-Profit, Employer-Sponsored Retirement Plans | 1-800-345-3533 | |
Banks and Trust Companies, Broker-Dealers, Financial Professionals, Insurance Companies | 1-800-345-6488 | |
Telecommunications Relay Service for the Deaf | 711 | |
American Century Quantitative Equity Funds, Inc. | ||
Investment Advisor: American Century Investment Management, Inc. Kansas City, Missouri | ||
This report and the statements it contains are submitted for the general information of our shareholders. The report is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus. | ||
©2020 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-91451 2002 |
ITEM 2. CODE OF ETHICS.
Not applicable for semiannual report filings.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable for semiannual report filings.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable for semiannual report filings.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable for semiannual report filings.
ITEM 6. INVESTMENTS.
(a) | The schedule of investments is included as part of the report to stockholders filed under Item 1 of this Form. |
(b) | Not applicable. |
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
During the reporting period, there were no material changes to the procedures by which shareholders may recommend nominees to the registrant’s board.
ITEM 11. CONTROLS AND PROCEDURES.
(a) | The registrant's principal executive officer and principal financial officer have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) are effective based on their evaluation of these controls and procedures as of a date within 90 days of the filing date of this report. |
(b) | There were no changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant's internal control over financial reporting. |
ITEM 12. DISCLOSURE OF SECURITIES LENDING ACTIVITIES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 13. EXHIBITS.
(a)(1) | Not applicable for semiannual report filings. |
(a)(2) | Separate certifications by the registrant’s principal executive officer and principal financial officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 and Rule 30a-2(a) under the Investment Company Act of 1940, are filed and attached hereto as EX-99.CERT. |
(a)(3) | Not applicable. |
(a)(4) | Not applicable. |
(b) | A certification by the registrant’s chief executive officer and chief financial officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, is furnished and attached hereto as EX- 99.906CERT. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Registrant: | American Century Quantitative Equity Funds, Inc. | |||
By: | /s/ Patrick Bannigan | |||
Name: | Patrick Bannigan | |||
Title: | President | |||
Date: | February 25, 2020 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By: | /s/ Patrick Bannigan | ||
Name: | Patrick Bannigan | ||
Title: | President | ||
(principal executive officer) | |||
Date: | February 25, 2020 |
By: | /s/ R. Wes Campbell | ||
Name: | R. Wes Campbell | ||
Title: | Treasurer and | ||
Chief Financial Officer | |||
(principal financial officer) | |||
Date: | February 25, 2020 |