N-CSRS 1 accp93017n-csr.htm N-CSRS Document
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
811-07820
 
 
AMERICAN CENTURY CAPITAL PORTFOLIOS, 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:
03-31
 
 
Date of reporting period:
09-30-2017



ITEM 1. REPORTS TO STOCKHOLDERS.






acihorizblkb99.jpg
                  

 
 
 
Semiannual Report
 
 
 
September 30, 2017
 
 
 
Equity Income Fund

 






Table of Contents
 
President’s Letter
2

Fund Characteristics

Shareholder Fee Example

Schedule of Investments

Statement of Assets and Liabilities

Statement of Operations

Statement of Changes in Net Assets

Notes to Financial Statements

Financial Highlights

Approval of Management Agreement

Additional Information



























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

jthomasrev0514.jpg Jonathan Thomas

Dear Investor:

Thank you for reviewing this semiannual report for the period ended September 30, 2017. 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, we encourage you to visit our website, americancentury.com.

All Major Asset Classes Provided Positive Performance

From large-cap stocks to short-maturity Treasuries, the U.S. financial markets delivered across-the-board gains for the six-month period. Stock investors responded enthusiastically to two consecutive quarters of double-digit earnings growth for S&P 500 companies, the first such back-to-back performance since 2011. In addition, gross domestic product growth accelerated to an annualized rate of 3.1% in the April-June quarter, up from 1.2% in the first quarter and the fastest pace in two years. Meanwhile, despite setbacks and delays for some components of President Trump’s pro-growth agenda, equity investors generally remained optimistic regarding future U.S. economic gains.

Against this backdrop, the S&P 500 Index reached several milestones and returned 7.71% for the six-month period. In terms of equity styles, riskier and economically sensitive stocks generally remained in favor. For example, small-cap stocks outperformed their mid- and large-cap peers, while growth stocks largely outperformed value stocks across the capitalization spectrum.

Investor preferences for risk also extended to the fixed-income market, where spread (non-Treasury) sectors were top performers and drove the Bloomberg Barclays U.S. Aggregate Bond Index to a 2.31% gain for the six-month period. The Federal Reserve (the Fed) remained relatively supportive, raising rates only once (by 25 basis points in June) amid a low-inflation backdrop and announcing a gradual approach to balance sheet normalization. Meanwhile, upbeat corporate earnings, a rallying stock market, robust investor demand for yield, and favorable supply/demand dynamics in the corporate credit markets led to outperformance among corporate bonds.

As Congress considers corporate tax cuts and other growth-oriented reforms, and the Fed continues to pursue policy normalization, new opportunities and challenges likely will emerge. We continue to believe in a disciplined, diversified, and risk-aware approach, using professionally managed portfolios in pursuit of investment goals. We appreciate your continued trust in us.


Sincerely,
image48a01.jpg
Jonathan Thomas
President and Chief Executive Officer
American Century Investments

2

Fund Characteristics 
SEPTEMBER 30, 2017
Top Ten Holdings
% of net assets
Johnson & Johnson
4.5%
Procter & Gamble Co. (The)
4.5%
iShares Russell 1000 Value ETF
3.0%
TOTAL SA
3.0%
General Electric Co.
2.9%
PNC Financial Services Group, Inc. (The)
2.8%
Medtronic plc
2.7%
Microchip Technology, Inc. (Convertible)
2.7%
Schlumberger Ltd.
2.7%
Republic Services, Inc.
2.6%
 
 
Top Five Industries
% of net assets
Banks
12.8%
Oil, Gas and Consumable Fuels
11.1%
Pharmaceuticals
8.9%
Semiconductors and Semiconductor Equipment
7.1%
Industrial Conglomerates
5.3%
 
 
Types of Investments in Portfolio
% of net assets
Domestic Common Stocks
70.4%
Foreign Common Stocks*
7.5%
Convertible Bonds
6.5%
Preferred Stocks
6.2%
Convertible Preferred Stocks
3.2%
Exchange-Traded Funds
3.0%
Total Equity Exposure
96.8%
Temporary Cash Investments
2.7%
Other Assets and Liabilities
0.5%
*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 April 1, 2017 to September 30, 2017 (except as noted).

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
4/1/17
Ending
Account Value
9/30/17
Expenses Paid
During Period(1) 
4/1/17 - 9/30/17
 
Annualized
Expense Ratio(1)
Actual
 
 
 
 
Investor Class
$1,000
$1,051.70
$4.68
0.91%
I Class
$1,000
$1,051.60
$3.65
0.71%
Y Class
$1,000
$1,050.90(2)
$2.74(3)
0.56%
A Class
$1,000
$1,049.20
$5.96
1.16%
C Class
$1,000
$1,045.30
$9.79
1.91%
R Class
$1,000
$1,048.10
$7.24
1.41%
R5 Class
$1,000
$1,050.30(2)
$3.47(3)
0.71%
R6 Class
$1,000
$1,052.30
$2.88
0.56%
Hypothetical
 
 
 
 
Investor Class
$1,000
$1,020.51
$4.61
0.91%
I Class
$1,000
$1,021.51
$3.60
0.71%
Y Class
$1,000
$1,022.26(4)
$2.84(4)
0.56%
A Class
$1,000
$1,019.25
$5.87
1.16%
C Class
$1,000
$1,015.49
$9.65
1.91%
R Class
$1,000
$1,018.00
$7.13
1.41%
R5 Class
$1,000
$1,021.51(4)
$3.60(4)
0.71%
R6 Class
$1,000
$1,022.26
$2.84
0.56%
(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 183, the number of days in the most recent fiscal half-year, divided by 365, 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.
(2)
Ending account value based on actual return from April 10, 2017 (commencement of sale) through September 30, 2017.
(3)
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 174, the number of days in the period from April 10, 2017 (commencement of sale) through September 30, 2017, divided by 365, to reflect the period. Had the class been available for the full period, the expenses paid during the period would have been higher.
(4)
Ending account value and expenses paid during the period assumes the class had been available throughout the entire period and are calculated using the class’s annualized expense ratio listed in the table above.

5

Schedule of Investments

SEPTEMBER 30, 2017 (UNAUDITED)
 
Shares/
Principal Amount
Value
COMMON STOCKS — 77.9%
 
 
Air Freight and Logistics — 0.9%
 
 
United Parcel Service, Inc., Class B
898,318

$
107,879,009

Auto Components — 0.2%
 
 
Delphi Automotive plc
234,998

23,123,803

Automobiles — 0.1%
 
 
Honda Motor Co. Ltd.
599,900

17,763,757

Banks — 8.1%
 
 
Comerica, Inc.
289,800

22,100,148

Commerce Bancshares, Inc.
1,179,750

68,154,158

JPMorgan Chase & Co.
3,295,597

314,762,469

PNC Financial Services Group, Inc. (The)
2,574,752

346,999,327

SunTrust Banks, Inc.
3,285,230

196,358,197

U.S. Bancorp
895,400

47,984,486

Wells Fargo & Co.
287,800

15,872,170

 
 
1,012,230,955

Capital Markets — 2.9%
 
 
AllianceBernstein Holding LP
1,994,278

48,460,956

Bank of New York Mellon Corp. (The)
3,425,200

181,604,104

BlackRock, Inc.
74,900

33,487,041

Northern Trust Corp.
783,440

72,021,639

T. Rowe Price Group, Inc.
245,400

22,245,510

 
 
357,819,250

Chemicals — 1.7%
 
 
Air Products & Chemicals, Inc.
1,399,800

211,677,756

Commercial Services and Supplies — 2.6%
 
 
Republic Services, Inc.
4,899,061

323,631,970

Communications Equipment — 0.8%
 
 
Cisco Systems, Inc.
2,996,791

100,782,081

Containers and Packaging — 0.9%
 
 
Bemis Co., Inc.
1,999,302

91,108,192

International Paper Co.
299,200

17,000,544

 
 
108,108,736

Distributors — 0.2%
 
 
Genuine Parts Co.
271,400

25,959,410

Diversified Telecommunication Services — 1.5%
 
 
AT&T, Inc.
999,500

39,150,415

Verizon Communications, Inc.
3,097,337

153,287,208

 
 
192,437,623

Electric Utilities — 3.7%
 
 
Edison International
288,899

22,294,336

Eversource Energy
1,288,800

77,895,072

PG&E Corp.
2,626,737

178,854,522


6

 
Shares/
Principal Amount
Value
Pinnacle West Capital Corp.
1,169,717

$
98,911,270

Westar Energy, Inc., Class A
1,679,000

83,278,400

 
 
461,233,600

Electrical Equipment — 0.5%
 
 
Emerson Electric Co.
589,300

37,031,612

Rockwell Automation, Inc.
151,300

26,963,173

 
 
63,994,785

Energy Equipment and Services — 2.7%
 
 
Schlumberger Ltd.
4,779,431

333,413,107

Equity Real Estate Investment Trusts (REITs) — 2.6%
 
 
American Tower Corp.
396,900

54,248,292

Boston Properties, Inc.
488,400

60,014,592

Weyerhaeuser Co.
6,198,700

210,941,761

 
 
325,204,645

Food and Staples Retailing — 2.0%
 
 
CVS Health Corp.
1,199,194

97,518,456

Wal-Mart Stores, Inc.
1,897,983

148,308,392

 
 
245,826,848

Food Products — 2.3%
 
 
Campbell Soup Co.
396,000

18,540,720

General Mills, Inc.
5,199,398

269,120,840

 
 
287,661,560

Gas Utilities — 3.4%
 
 
Atmos Energy Corp.
1,219,420

102,236,173

ONE Gas, Inc.(1) 
2,937,696

216,331,934

Spire, Inc.
1,479,782

110,465,726

 
 
429,033,833

Health Care Equipment and Supplies — 2.7%
 
 
Medtronic plc
4,399,336

342,136,361

      
 
 
Health Care Providers and Services — 0.3%
 
 
Cardinal Health, Inc.
216,500

14,488,180

Quest Diagnostics, Inc.
229,558

21,495,811

 
 
35,983,991

Household Products — 4.5%
 
 
Procter & Gamble Co. (The)
6,131,459

557,840,140

Industrial Conglomerates — 2.4%
 
 
3M Co.
1,210,800

254,146,920

General Electric Co.
1,699,000

41,081,820

 
 
295,228,740

Insurance — 2.8%
 
 
Allstate Corp. (The)
197,500

18,152,225

Chubb Ltd.
1,398,128

199,303,146

Marsh & McLennan Cos., Inc.
1,098,505

92,065,704

MetLife, Inc.
798,423

41,478,075

 
 
350,999,150


7

 
Shares/
Principal Amount
Value
IT Services — 1.0%
 
 
Automatic Data Processing, Inc.
998,251

$
109,128,799

International Business Machines Corp.
99,500

14,435,460

 
 
123,564,259

Leisure Products — 0.1%
 
 
Mattel, Inc.
798,200

12,356,136

Media — 0.4%
 
 
Time Warner, Inc.
490,400

50,241,480

Oil, Gas and Consumable Fuels — 11.0%
 
 
Chevron Corp.
2,467,216

289,897,880

Enterprise Products Partners LP
7,999,900

208,557,393

EQT Midstream Partners LP
799,118

59,909,877

Exxon Mobil Corp.
698,715

57,280,656

Occidental Petroleum Corp.
1,122,677

72,087,090

Phillips 66 Partners LP
726,498

38,184,735

Royal Dutch Shell plc, A Shares
3,676,700

111,114,259

Shell Midstream Partners LP
1,999,136

55,655,946

Spectra Energy Partners LP
2,498,069

110,864,302

TOTAL SA
6,898,219

370,513,432

 
 
1,374,065,570

Personal Products — 0.9%
 
 
Unilever NV CVA
1,987,800

117,563,054

Pharmaceuticals — 8.9%
 
 
Bristol-Myers Squibb Co.
441,900

28,166,706

Eli Lilly & Co.
875,400

74,881,716

Johnson & Johnson
4,337,341

563,897,703

Merck & Co., Inc.
1,797,022

115,063,319

Roche Holding AG
1,263,400

322,520,246

 
 
1,104,529,690

Road and Rail — 0.1%
 
 
Norfolk Southern Corp.
137,723

18,212,489

Semiconductors and Semiconductor Equipment — 2.3%
 
 
Applied Materials, Inc.
1,578,503

82,224,221

Maxim Integrated Products, Inc.
4,197,100

200,243,641

 
 
282,467,862

Software — 2.2%
 
 
Microsoft Corp.
889,036

66,224,292

Oracle Corp. (New York)
4,199,552

203,048,339

 
 
269,272,631

Specialty Retail — 0.1%
 
 
L Brands, Inc.
249,298

10,373,290

Thrifts and Mortgage Finance — 1.1%
 
 
Capitol Federal Financial, Inc.(1) 
9,355,779

137,529,951

TOTAL COMMON STOCKS
(Cost $7,992,765,737)
 
9,710,147,522

 
 
 

8

 
Shares/
Principal Amount
Value
CONVERTIBLE BONDS — 6.5%
 
 
Air Freight and Logistics — 0.6%
 
 
Canadian Imperial Bank of Commerce, (convertible into United Parcel Service), 2.65%, 3/29/18(2)(3)
$
183,800

$
21,879,001

Credit Suisse AG, (convertible into United Parcel Service, Inc., Class B), 2.90%, 1/30/18(2)(3)
403,000

46,016,051

 
 
67,895,052

Banks — 0.3%
 
 
Canadian Imperial Bank of Commerce, (convertible into Berkshire Hathaway, Inc., Class B), 1.13%, 3/15/18(2)(3)
230,000

41,047,882

Food Products — 0.3%
 
 
Credit Suisse AG, (convertible into Mondelez International, Inc., Class A), 3.85%, 1/9/18(2)(3)
456,500

18,808,314

UBS AG, (convertible into Mondelez International, Inc., Class A), 3.35%, 3/9/18(2)(3)
449,000

18,482,833

 
 
37,291,147

Health Care Providers and Services — 0.2%
 
 
Merrill Lynch International & Co. C.V., (convertible into Express Scripts Holding Co.), 3.35%, 11/1/17(2)(3)
476,400

29,631,334

Oil, Gas and Consumable Fuels — 0.1%
 
 
Goldman Sachs International, (convertible into EQT Corp.), 3.43%, 12/11/17(2)(3)
250,000

14,551,945

Semiconductors and Semiconductor Equipment — 4.8%
 
 
Intel Corp., 3.49%, 12/15/35
51,263,000

73,049,775

Microchip Technology, Inc., 1.625%, 2/15/27(2)
274,003,000

334,112,408

Teradyne, Inc., 1.25%, 12/15/23(2)
139,465,000

186,272,941

 
 
593,435,124

Specialty Retail — 0.2%
 
 
Goldman Sachs International, (convertible into L Brands, Inc.), 12.93%, 1/16/18(2)(3)
508,900

21,704,941

TOTAL CONVERTIBLE BONDS
(Cost $703,466,260)
 
805,557,425

PREFERRED STOCKS — 6.2%
 
 
Banks — 2.5%
 
 
Citigroup, Inc., 5.95%
155,226,000

167,256,015

U.S. Bancorp, 5.30%
103,955,000

113,570,837

Wells Fargo & Co., 7.98%
28,390,000

29,277,187

 
 
310,104,039

Capital Markets — 0.8%
 
 
Goldman Sachs Group, Inc. (The), 5.30%
93,974,000

100,904,583

Industrial Conglomerates — 2.9%
 
 
General Electric Co., 5.00%
340,956,000

361,055,356

TOTAL PREFERRED STOCKS
(Cost $723,149,201)
 
772,063,978

CONVERTIBLE PREFERRED STOCKS — 3.2%
 
 
Banks — 1.9%
 
 
Bank of America Corp., 7.25%
169,905

221,126,261

Wells Fargo & Co., 7.50%
17,575

23,111,125

 
 
244,237,386

 
 
 

9

 
Shares/
Principal Amount
Value
Equity Real Estate Investment Trusts (REITs) — 0.4%
 
 
Welltower, Inc., 6.50%
785,000

$
49,792,550

Machinery — 0.9%
 
 
Stanley Black & Decker, Inc., 5.375%, 5/15/20
958,819

109,928,598

TOTAL CONVERTIBLE PREFERRED STOCKS
(Cost $345,654,694)
 
403,958,534

EXCHANGE-TRADED FUNDS — 3.0%
 
 
iShares Russell 1000 Value ETF
(Cost $322,173,396)
3,141,994

372,357,709

TEMPORARY CASH INVESTMENTS — 2.7%
 
 
Federal Home Loan Bank Discount Notes, 0.61%, 10/2/17(4)
$
318,505,000

318,505,000

Repurchase Agreement, BMO Capital Markets Corp., (collateralized by various U.S. Treasury obligations, 0.125% - 3.875%, 6/30/18 - 11/15/46, valued at $10,405,121), in a joint trading account at 0.95%, dated 9/29/17, due 10/2/17 (Delivery value $10,203,547)
 
10,202,739

State Street Institutional U.S. Government Money Market Fund, Premier Class
2,753,325

2,753,325

TOTAL TEMPORARY CASH INVESTMENTS
(Cost $331,455,724)
 
331,461,064

TOTAL INVESTMENT SECURITIES — 99.5%
(Cost $10,418,665,012)
 
12,395,546,232

OTHER ASSETS AND LIABILITIES — 0.5%
 
61,790,836

TOTAL NET ASSETS — 100.0%
 
$
12,457,337,068

FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
Currency Purchased
Currency Sold
Counterparty
Settlement Date
Unrealized Appreciation
(Depreciation)
USD
293,129,519

CHF
283,127,940

Credit Suisse AG
12/29/17
$
(1,016,137
)
USD
537,327,370

EUR
453,337,527

UBS AG
12/29/17
(1,126,417
)
USD
8,451,335

JPY
924,068,925

Credit Suisse AG
12/29/17
203,093

USD
1,668,436

JPY
180,854,775

Credit Suisse AG
12/29/17
54,126

USD
386,018

JPY
42,469,380

Credit Suisse AG
12/29/17
6,936

USD
2,817,423

JPY
312,564,870

Credit Suisse AG
12/29/17
27,468

USD
347,109

JPY
38,692,260

Credit Suisse AG
12/29/17
1,742

USD
2,781,412

JPY
312,207,930

Credit Suisse AG
12/29/17
(5,357
)
 
 
 
 
 
 
$
(1,854,546
)



10

NOTES TO SCHEDULE OF INVESTMENTS
CHF
-
Swiss Franc
CVA
-
Certificaten Van Aandelen
EUR
-
Euro
JPY
-
Japanese Yen
USD
-
United States Dollar
(1)
Affiliated Company: the fund’s holding represents ownership of 5% or more of the voting securities of the company; therefore, the company is affiliated as defined in the Investment Company Act of 1940.
(2)
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 $732,507,650, which represented 5.9% of total net assets.
(3)
Equity-linked debt security. The aggregated value of these securities at the period end was $212,122,301, which represented 1.7% of total net assets.
(4)
The rate indicated is the yield to maturity at purchase.

See Notes to Financial Statements.

11

Statement of Assets and Liabilities
SEPTEMBER 30, 2017 (UNAUDITED)
 
Assets
 
Investment securities - unaffiliated, at value (cost of $10,210,964,971)
$
12,041,684,347

Investment securities - affiliated, at value (cost of $207,700,041)
353,861,885

Total investment securities, at value (cost of $10,418,665,012)
12,395,546,232

Cash
13,606,000

Receivable for investments sold
112,052,524

Receivable for capital shares sold
6,101,790

Unrealized appreciation on forward foreign currency exchange contracts
293,365

Dividends and interest receivable
37,507,037

 
12,565,106,948

 
 
Liabilities
 
Payable for investments purchased
88,016,781

Payable for capital shares redeemed
8,260,443

Unrealized depreciation on forward foreign currency exchange contracts
2,147,911

Accrued management fees
8,528,889

Distribution and service fees payable
815,856

 
107,769,880

 
 
Net Assets
$
12,457,337,068

 
 
Net Assets Consist of:
 
Capital (par value and paid-in surplus)
$
9,554,457,764

Distributions in excess of net investment income
(23,908,864
)
Undistributed net realized gain
951,763,946

Net unrealized appreciation
1,975,024,222

 
$
12,457,337,068


 
Net Assets
Shares Outstanding
Net Asset Value
Per Share
Investor Class, $0.01 Par Value

$7,201,809,539

757,677,150

$9.51
I Class, $0.01 Par Value

$2,625,043,754

275,957,891

$9.51
Y Class, $0.01 Par Value

$238,802,455

25,083,150

$9.52
A Class, $0.01 Par Value

$1,032,388,839

108,625,391

$9.50*
C Class, $0.01 Par Value

$684,634,869

72,037,422

$9.50
R Class, $0.01 Par Value

$107,097,571

11,304,575

$9.47
R5 Class, $0.01 Par Value

$13,767

1,448

$9.51
R6 Class, $0.01 Par Value

$567,546,274

59,611,680

$9.52
*Maximum offering price $10.08 (net asset value divided by 0.9425).


See Notes to Financial Statements.

12

Statement of Operations
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2017 (UNAUDITED)
Investment Income (Loss)
 
Income:
 
Dividends (including $7,033,540 from affiliates and net of foreign taxes withheld of $1,911,057)
$
144,408,998

Interest
21,010,226

 
165,419,224

 
 
Expenses:
 
Management fees
52,635,918

Distribution and service fees:
 
A Class
1,599,424

C Class
3,482,431

R Class
273,417

Directors' fees and expenses
206,230

Other expenses
4,663

 
58,202,083

 
 
Net investment income (loss)
107,217,141

 
 
Realized and Unrealized Gain (Loss)
 
Net realized gain (loss) on:
 
Investment transactions (including $16,358,853 from affiliates)
491,178,762

Forward foreign currency exchange contract transactions
(30,214,960
)
Foreign currency translation transactions
(53,123
)
 
460,910,679

 
 
Change in net unrealized appreciation (depreciation) on:
 
Investments (including $4,527,622 from affiliates)
51,592,081

Forward foreign currency exchange contracts
(10,059,676
)
Translation of assets and liabilities in foreign currencies
69,691

 
41,602,096

 
 
Net realized and unrealized gain (loss)
502,512,775

 
 
Net Increase (Decrease) in Net Assets Resulting from Operations
$
609,729,916



See Notes to Financial Statements.


13

Statement of Changes in Net Assets
SIX MONTHS ENDED SEPTEMBER 30, 2017 (UNAUDITED) AND YEAR ENDED MARCH 31, 2017
Increase (Decrease) in Net Assets
September 30, 2017
March 31, 2017
Operations
 
 
Net investment income (loss)
$
107,217,141

$
208,006,955

Net realized gain (loss)
460,910,679

1,106,969,093

Change in net unrealized appreciation (depreciation)
41,602,096

451,113,676

Net increase (decrease) in net assets resulting from operations
609,729,916

1,766,089,724

 
 
 
Distributions to Shareholders
 
 
From net investment income:
 
 
Investor Class
(71,821,409
)
(129,563,399
)
I Class
(25,680,485
)
(30,618,392
)
Y Class
(1,159,924
)
—

A Class
(8,867,956
)
(34,939,594
)
C Class
(3,197,021
)
(5,979,666
)
R Class
(769,246
)
(1,626,120
)
R5 Class
(92
)
—

R6 Class
(6,011,149
)
(8,068,622
)
From net realized gains:
 
 
Investor Class
—

(400,934,887
)
I Class
—

(85,575,588
)
A Class
—

(122,509,721
)
C Class
—

(39,374,591
)
R Class
—

(6,728,931
)
R6 Class
—

(22,997,300
)
Decrease in net assets from distributions
(117,507,282
)
(888,916,811
)
 
 
 
Capital Share Transactions
 
 
Net increase (decrease) in net assets from capital share transactions (Note 5)
(336,061,637
)
1,945,344,324

 
 
 
Net increase (decrease) in net assets
156,160,997

2,822,517,237

 
 
 
Net Assets
 
 
Beginning of period
12,301,176,071

9,478,658,834

End of period
$
12,457,337,068

$
12,301,176,071

 
 
 
Distributions in excess of net investment income
$
(23,908,864
)
$
(13,618,723
)


See Notes to Financial Statements.


14

Notes to Financial Statements

SEPTEMBER 30, 2017 (UNAUDITED)

1. Organization

American Century Capital Portfolios, 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 Income Fund (the fund) is one fund in a series issued by the corporation. The fund’s investment objective is to seek current income. Capital appreciation is a secondary objective.

The fund offers the Investor Class, I Class (formerly Institutional Class), Y Class, A Class, C Class, R Class, R5 Class and R6 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. Sale of the Y Class and R5 Class commenced on April 10, 2017.

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 and convertible bonds 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.

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. 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.
 
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

15

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. If significant fluctuations in foreign markets are identified, 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.

Equity-Linked Debt and Linked-Equity Securities — The fund may invest in hybrid equity securities, which usually convert into common stock at a date predetermined by the issuer. These securities generally offer a higher dividend yield than that of the common stock to which the security is linked. These instruments are issued by a company other than the one to which the security is linked and carry the credit of the issuer, not that of the underlying common stock. The securities’ appreciation is limited based on a predetermined final cap price at the date of the conversion. Risks of investing in these securities include, but are not limited to, a set time to capture the yield advantage, limited appreciation potential, decline in value of the underlying stock, and failure of the issuer to pay dividends or to deliver common stock at maturity.

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.

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

16

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).
 
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, 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 rate of the fee is determined by applying a fee rate calculation formula. This formula takes into account the fund’s assets as well as certain assets, if any, of other clients of the investment advisor outside the American Century Investments family of funds (such as subadvised funds and separate accounts) that use very similar investment teams and strategies (strategy assets).

The management fee schedule range and the effective annual management fee for each class for the period ended September 30, 2017 are as follows:
 
Management Fee
Schedule Range
Effective Annual
Management Fee
Investor Class
0.80% to 1.00%
0.91%
I Class
0.60% to 0.80%
0.71%
Y Class
0.45% to 0.65%
0.56%
A Class
0.80% to 1.00%
0.91%
C Class
0.80% to 1.00%
0.91%
R Class
0.80% to 1.00%
0.91%
R5 Class
0.60% to 0.80%
0.71%
R6 Class
0.45% to 0.65%
0.56%


17

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 September 30, 2017 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.
 
Acquired Fund Fees and Expenses — The fund may invest in mutual funds, exchange-traded funds, and business development companies (the acquired funds). The fund will indirectly realize its pro rata share of the fees and expenses of the acquired funds in which it invests. These indirect fees and expenses are not paid out of the fund's assets but are reflected in the return realized by the fund on its investment in the acquired funds.

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 $37,157,312 and $58,018,619, respectively. The effect of interfund transactions on the Statement of Operations was $5,830,079 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 September 30, 2017 were $4,424,972,074 and $4,752,158,704, respectively.


18

5. Capital Share Transactions

Transactions in shares of the fund were as follows:
 
Six months ended
September 30, 2017(1)
Year ended
March 31, 2017
 
Shares
Amount
Shares
Amount
Investor Class/Shares Authorized
4,650,000,000

 
3,690,000,000

 
Sold
171,658,369

$
1,582,907,310

293,507,890

$
2,609,195,025

Issued in reinvestment of distributions
7,375,954

69,027,986

56,671,757

504,632,303

Redeemed
(223,736,267
)
(2,071,726,799
)
(189,696,984
)
(1,695,503,573
)
 
(44,701,944
)
(419,791,503
)
160,482,663

1,418,323,755

I Class/Shares Authorized
1,525,000,000

 
900,000,000

 
Sold
132,828,571

1,230,129,157

56,832,314

505,772,022

Issued in reinvestment of distributions
2,495,964

23,397,794

12,014,795

107,079,509

Redeemed
(25,237,219
)
(234,834,066
)
(49,101,577
)
(441,160,610
)
 
110,087,316

1,018,692,885

19,745,532

171,690,921

Y Class/Shares Authorized
120,000,000

 
N/A

 
Sold
26,020,942

242,552,811

 
 
Issued in reinvestment of distributions
97,773

928,838

 
 
Redeemed
(1,035,565
)
(9,728,173
)
 
 
 
25,083,150

233,753,476

 
 
A Class/Shares Authorized
700,000,000

 
1,450,000,000

 
Sold
8,812,228

80,999,146

67,317,393

599,764,310

Issued in reinvestment of distributions
895,246

8,375,284

17,235,247

153,324,817

Redeemed
(135,376,567
)
(1,245,728,721
)
(80,261,080
)
(716,879,699
)
 
(125,669,093
)
(1,156,354,291
)
4,291,560

36,209,428

C Class/Shares Authorized
485,000,000

 
380,000,000

 
Sold
3,875,262

35,877,385

23,508,729

208,356,587

Issued in reinvestment of distributions
304,115

2,840,405

4,410,142

39,190,445

Redeemed
(10,024,069
)
(92,878,865
)
(16,945,928
)
(151,129,533
)
 
(5,844,692
)
(54,161,075
)
10,972,943

96,417,499

R Class/Shares Authorized
90,000,000

 
70,000,000

 
Sold
723,917

6,703,498

3,878,786

34,434,508

Issued in reinvestment of distributions
81,177

756,807

926,459

8,213,953

Redeemed
(2,108,354
)
(19,457,032
)
(4,772,983
)
(42,240,369
)
 
(1,303,260
)
(11,996,727
)
32,262

408,092

R5 Class/Shares Authorized
50,000,000

 
N/A

 
Sold
1,440

13,310

 
 
Issued in reinvestment of distributions
10

92

 
 
Redeemed
(2
)
(16
)
 
 
 
1,448

13,386

 
 
R6 Class/Shares Authorized
400,000,000

 
180,000,000

 
Sold
11,862,410

110,203,903

37,017,253

333,067,159

Issued in reinvestment of distributions
640,907

6,011,149

3,426,134

30,585,564

Redeemed
(6,748,352
)
(62,432,840
)
(15,805,023
)
(141,358,094
)
 
5,754,965

53,782,212

24,638,364

222,294,629

Net increase (decrease)
(36,592,110
)
$
(336,061,637
)
220,163,324

$
1,945,344,324


(1)
April 10, 2017 (commencement of sale) through September 30, 2017 for the Y Class and R5 Class.


19

6. Affiliated Company Transactions

If a fund's holding represents ownership of 5% or more of the voting securities of a company, the company is affiliated as defined in the 1940 Act. A summary of transactions for each company which is or was an affiliate at or during the period ended September 30, 2017 follows (amounts in thousands):
Company
Beginning Value
Purchase
Cost
Sales
Cost
Change in Net Unrealized Appreciation (Depreciation)
Ending
Value
Ending
Shares
Net Realized
Gain (Loss)
Income
Capitol Federal Financial, Inc.
$
148,922

$
1,823

$
11,852

$
(1,363
)
$
137,530

9,356

$
1,935

$
4,290

ONE Gas, Inc.
235,879

—

25,437

5,890

216,332

2,938

14,424

2,744

 
$
384,801

$
1,823

$
37,289

$
4,527

$
353,862

12,294

$
16,359

$
7,034


7. 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. There were no significant transfers between levels during the period.


20

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
 
 
 
Automobiles
—

$
17,763,757

—

Oil, Gas and Consumable Fuels
$
892,437,879

481,627,691

—

Personal Products
—

117,563,054

—

Pharmaceuticals
782,009,444

322,520,246

—

Other Industries
7,096,225,451

—

—

Convertible Bonds
—

805,557,425

—

Preferred Stocks
—

772,063,978

—

Convertible Preferred Stocks
—

403,958,534

—

Exchange-Traded Funds
372,357,709

—

—

Temporary Cash Investments
2,753,325

328,707,739

—

 
$
9,145,783,808

$
3,249,762,424

—

Other Financial Instruments
 
 
 
Forward Foreign Currency Exchange Contracts
—

$
293,365

—

 
 
 
 
Liabilities
 
 
 
Other Financial Instruments
 
 
 
Forward Foreign Currency Exchange Contracts
—

$
2,147,911

—


8. Derivative Instruments

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. 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 $693,624,732.

The value of foreign currency risk derivative instruments as of September 30, 2017, is disclosed on the Statement of Assets and Liabilities as an asset of $293,365 in unrealized appreciation on forward foreign currency exchange contracts and a liability of $2,147,911 in unrealized depreciation on forward foreign currency exchange contracts. For the six months ended September 30, 2017, the effect of foreign currency risk derivative instruments on the Statement of Operations was $(30,214,960) in net realized gain (loss) on forward foreign currency exchange contract transactions and $(10,059,676) in change in net unrealized appreciation (depreciation) on forward foreign currency exchange contracts.


21

9. Risk Factors

There are certain risks involved in investing in foreign securities. These risks include those resulting from future adverse political, social and economic developments, fluctuations in currency exchange rates, the possible imposition of exchange controls, and other foreign laws or restrictions.

10. 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
$
10,564,120,447

Gross tax appreciation of investments
$
1,912,459,185

Gross tax depreciation of investments
(81,033,400
)
Net tax appreciation (depreciation) of investments
$
1,831,425,785


The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales.

11. 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. Management is currently evaluating the impact that adopting ASU 2017-08 will have on the financial statements.



22

Financial Highlights
For a Share Outstanding Throughout the Years Ended March 31 (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(10)
Net
Investment
Income
(Loss)
Portfolio
Turnover
Rate
Net
Assets,
End of
Period
(in thousands)
Investor Class
 
 
 
 
 
 
 
 
 
 
 
 
2017(3)
$9.13
0.08
0.39
0.47
(0.09)
—
(0.09)
$9.51
5.17%
0.91%(4)
1.77%(4)
38%

$7,201,810

2017
$8.41
0.17
1.24
1.41
(0.17)
(0.52)
(0.69)
$9.13
17.14%
0.91%
1.91%
93%

$7,327,473

2016
$8.71
0.21
0.32
0.53
(0.20)
(0.63)
(0.83)
$8.41
6.78%
0.94%
2.44%
88%

$5,399,702

2015
$8.84
0.21
0.54
0.75
(0.22)
(0.66)
(0.88)
$8.71
8.54%
0.93%
2.30%
56%

$5,463,566

2014
$8.47
0.20
0.92
1.12
(0.20)
(0.55)
(0.75)
$8.84
13.64%
0.93%
2.31%
57%

$5,406,362

2013
$7.69
0.21
0.86
1.07
(0.21)
(0.08)
(0.29)
$8.47
14.33%
0.93%
2.63%
83%

$5,504,359

I Class(5)
 
 
 
 
 
 
 
 
 
 
 
 
2017(3)
$9.14
0.09
0.38
0.47
(0.10)
—
(0.10)
$9.51
5.16%
0.71%(4)
1.97%(4)
38%

$2,625,044

2017
$8.42
0.19
1.24
1.43
(0.19)
(0.52)
(0.71)
$9.14
17.36%
0.71%
2.11%
93%

$1,515,758

2016
$8.71
0.22
0.34
0.56
(0.22)
(0.63)
(0.85)
$8.42
7.11%
0.74%
2.64%
88%

$1,229,940

2015
$8.85
0.22
0.54
0.76
(0.24)
(0.66)
(0.90)
$8.71
8.63%
0.73%
2.50%
56%

$1,318,193

2014
$8.47
0.22
0.92
1.14
(0.21)
(0.55)
(0.76)
$8.85
13.85%
0.73%
2.51%
57%

$1,422,725

2013
$7.69
0.22
0.87
1.09
(0.23)
(0.08)
(0.31)
$8.47
14.69%
0.73%
2.83%
83%

$1,527,723

Y Class
 
 
 
 
 
 
 
 
 
 
 
 
 
2017(6)
$9.16
0.09
0.37
0.46
(0.10)
—
(0.10)
$9.52
5.09%
0.56%(4)
2.09%(4)
38%(7)

$238,802



For a Share Outstanding Throughout the Years Ended March 31 (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(10)
Net
Investment
Income
(Loss)
Portfolio
Turnover
Rate
Net
Assets,
End of
Period
(in thousands)
A Class
 
 
 
 
 
 
 
 
 
 
 
 
 
2017(3)
$9.13
0.07
0.38
0.45
(0.08)
—
(0.08)
$9.50
4.92%
1.16%(4)
1.52%(4)
38%

$1,032,389

2017
$8.41
0.15
1.24
1.39
(0.15)
(0.52)
(0.67)
$9.13
16.85%
1.16%
1.66%
93%

$2,139,411

2016
$8.71
0.18
0.33
0.51
(0.18)
(0.63)
(0.81)
$8.41
6.51%
1.19%
2.19%
88%

$1,934,681

2015
$8.84
0.18
0.55
0.73
(0.20)
(0.66)
(0.86)
$8.71
8.27%
1.18%
2.05%
56%

$2,172,105

2014
$8.47
0.18
0.91
1.09
(0.17)
(0.55)
(0.72)
$8.84
13.36%
1.18%
2.06%
57%

$2,722,731

2013
$7.69
0.19
0.86
1.05
(0.19)
(0.08)
(0.27)
$8.47
14.05%
1.18%
2.38%
83%

$2,631,737

C Class
 
 
 
 
 
 
 
 
 
 
 
 
 
2017(3)
$9.13
0.04
0.37
0.41
(0.04)
—
(0.04)
$9.50
4.53%
1.91%(4)
0.77%(4)
38%

$684,635

2017
$8.41
0.08
1.24
1.32
(0.08)
(0.52)
(0.60)
$9.13
15.97%
1.91%
0.91%
93%

$711,149

2016
$8.71
0.12
0.33
0.45
(0.12)
(0.63)
(0.75)
$8.41
5.72%
1.94%
1.44%
88%

$562,723

2015
$8.84
0.12
0.54
0.66
(0.13)
(0.66)
(0.79)
$8.71
7.47%
1.93%
1.30%
56%

$549,088

2014
$8.47
0.12
0.91
1.03
(0.11)
(0.55)
(0.66)
$8.84
12.53%
1.93%
1.31%
57%

$521,688

2013
$7.69
0.13
0.86
0.99
(0.13)
(0.08)
(0.21)
$8.47
13.21%
1.93%
1.63%
83%

$467,913

R Class
 
 
 
 
 
 
 
 
 
 
 
 
 
2017(3)
$9.10
0.06
0.38
0.44
(0.07)
—
(0.07)
$9.47
4.81%
1.41%(4)
1.27%(4)
38%

$107,098

2017
$8.39
0.13
1.22
1.35
(0.12)
(0.52)
(0.64)
$9.10
16.48%
1.41%
1.41%
93%

$114,762

2016
$8.69
0.16
0.33
0.49
(0.16)
(0.63)
(0.79)
$8.39
6.27%
1.44%
1.94%
88%

$105,462

2015
$8.82
0.16
0.54
0.70
(0.17)
(0.66)
(0.83)
$8.69
8.03%
1.43%
1.80%
56%

$127,897

2014
$8.45
0.16
0.91
1.07
(0.15)
(0.55)
(0.70)
$8.82
13.12%
1.43%
1.81%
57%

$169,852

2013
$7.67
0.17
0.86
1.03
(0.17)
(0.08)
(0.25)
$8.45
13.81%
1.43%
2.13%
83%

$179,855



For a Share Outstanding Throughout the Years Ended March 31 (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(10)
Net
Investment
Income
(Loss)
Portfolio
Turnover
Rate
Net
Assets,
End of
Period
(in thousands)
R5 Class
 
 
 
 
 
 
 
 
 
 
 
 
 
2017(6)
$9.15
0.09
0.37
0.46
(0.10)
—
(0.10)
$9.51
5.03%
0.71%(4)
2.00%(4)
38%(7)

$14

R6 Class
 
 
 
 
 
 
 
 
 
 
 
 
 
2017(3)
$9.15
0.10
0.38
0.48
(0.11)
—
(0.11)
$9.52
5.23%
0.56%(4)
2.12%(4)
38%

$567,546

2017
$8.42
0.20
1.25
1.45
(0.20)
(0.52)
(0.72)
$9.15
17.66%
0.56%
2.26%
93%

$492,622

2016
$8.72
0.24
0.32
0.56
(0.23)
(0.63)
(0.86)
$8.42
7.14%
0.59%
2.79%
88%

$246,151

2015
$8.85
0.25
0.53
0.78
(0.25)
(0.66)
(0.91)
$8.72
8.90%
0.58%
2.65%
56%

$117,620

2014(8)
$8.94
0.17
0.46
0.63
(0.17)
(0.55)
(0.72)
$8.85
7.41%
0.58%(4)
2.93%(4)
57%(9)

$26,550

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 September 30, 2017 (unaudited).
(4)
Annualized.
(5)
Prior to April 10, 2017, the I Class was referred to as the Institutional Class.
(6)
April 10, 2017 (commencement of sale) through September 30, 2017 (unaudited).
(7)
Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the six months ended September 30, 2017.
(8)
July 26, 2013 (commencement of sale) through March 31, 2014.
(9)
Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended March 31, 2014.
(10)
Ratio of operating expenses to average net assets does not include any fees and expenses of the acquired funds.

See Notes to Financial Statements.


Approval of Management Agreement


At a meeting held on June 29, 2017, the Fund’s Board of Directors (the "Board") unanimously approved the renewal of the management agreement pursuant to which American Century Investment Management, Inc. (the “Advisor”) acts as the investment advisor for the Fund. Under Section 15(c) of the Investment Company Act, contracts for investment advisory services are required to be reviewed, evaluated, and approved by a majority of a fund’s directors (the “Directors”), including a majority of the independent Directors, each year.
    
Prior to its consideration of the renewal of the management agreement, the Directors requested and reviewed extensive data and information compiled by the Advisor and certain independent providers of evaluation data concerning the Fund and the services provided to the Fund by the Advisor. This review was in addition to the oversight and evaluation undertaken by the Board and its committees on a continual basis and the information received was supplemental to the extensive information that the Board and its committees receive and consider throughout the year.

In connection with its consideration of the renewal of the management agreement, the Board’s review and evaluation of the services provided by the Advisor included, but was not limited to, the following:

•
the nature, extent, and quality of investment management, shareholder services, and other services provided and to be provided to the Fund;
•
the wide range of other programs and services provided and to be provided to the Fund and its shareholders on a routine and non-routine basis;
•
the investment performance of the Fund, including data comparing the Fund's performance to appropriate benchmarks and/or a peer group of other mutual funds with similar investment objectives and strategies;
•
the cost of owning the Fund compared to the cost of owning similar funds;
•
the compliance policies, procedures, and regulatory experience of the Advisor and the Fund's service providers;
•
financial data showing the cost of services provided to the Fund, the profitability of the Fund to the Advisor, and the overall profitability of the Advisor;
•
strategic plans of the Advisor
•
possible economies of scale associated with the Advisor’s management of the Fund and other accounts under its management;
•
data comparing services provided and charges to the Advisor's other investment management clients;
•
acquired fund fees and expenses;
•
payments and practices by the Fund and the Advisor regarding financial intermediaries, the nature of services provided by intermediaries, and the terms of share classes utilized; and
•
any collateral benefits derived by the Advisor from the management of the Fund.

The Directors held three in-person meetings and one telephonic meeting to review and discuss the information provided. The independent Directors also reviewed responses to supplemental information requests and held active discussions with the Advisor regarding the renewal of the management agreement. The independent Directors had the benefit of the advice of their independent counsel throughout the process.

Factors Considered

The Directors considered all of the information provided by the Advisor, the independent data providers, and independent counsel in connection with the approval. They determined that the

26

information was sufficient for them to evaluate the management agreement for the Fund. In connection with their review, the Directors did not identify any single factor as being all-important or controlling, and each Director may have attributed different levels of importance to different factors. In deciding to renew the management agreement, the Board based its decision on a number of factors, including without limitation the following:

Nature, Extent and Quality of Services - Generally. Under the management agreement, the Advisor is responsible for providing or arranging for all services necessary for the operation of the Fund. The Board noted that the Advisor provides or arranges at its own expense a wide variety of services including without limitation the following:

•
portfolio research and security selection
•
securities trading
•
Fund administration
•
custody of Fund assets
•
daily valuation of the Fund’s portfolio
•
shareholder servicing and transfer agency, including shareholder confirmations, recordkeeping, and communications
•
legal services (except the independent Directors’ counsel)
•
regulatory and portfolio compliance
•
financial reporting
•
marketing and distribution (except amounts paid by the Fund under Rule 12b-1 plans)

The Board noted that many of these services have expanded over time in terms of both quantity and complexity in response to shareholder demands, competition in the industry, changing distribution channels, and the changing regulatory environment. The Board noted specifically the resources the Advisor has committed during the year to compliance with the Department of Labor fiduciary rule and share class modernization.

Investment Management Services. The nature of the investment management services provided to the Fund is quite complex and allows Fund shareholders access to professional money management, instant diversification of their investments within an asset class, the opportunity to easily diversify among asset classes by investing in or exchanging among various American Century Investments funds, and liquidity. In evaluating investment performance, the Board expects the Advisor to manage the Fund in accordance with its investment objectives and approved strategies. Further, the Directors recognize that the Advisor has an obligation to monitor trading activities, and in particular to seek the best execution of fund trades, and to evaluate the use of and payment for research. In providing these services, the Advisor utilizes teams of investment professionals (portfolio managers, analysts, research assistants, and securities traders) who require extensive information technology, research, training, compliance, and other systems to conduct their business. The Board, directly and through its Fund Performance Review Committee, provides oversight of the investment performance process. It regularly reviews investment performance information for the Fund, together with comparative information for appropriate benchmarks and/or peer groups of similarly-managed funds, over different time horizons. The Directors also review detailed performance information provided by the Advisor during the management agreement renewal process. If performance concerns are identified, the Fund receives special reviews until performance improves, during which the Board receives a report from the Advisor regarding the reasons for such results (e.g., market conditions, security selection) and any efforts being undertaken to improve performance. The Fund’s performance was above its benchmark for the one-, three-, and ten-year periods and below its benchmark for the five-year period reviewed by the Board. The Board found the investment management services provided by the Advisor to the Fund to be satisfactory and consistent with the management agreement.

Shareholder and Other Services. Under the management agreement, the Advisor provides the Fund with a comprehensive package of transfer agency, shareholder, and other services. The Board, directly and through various committees of the Board, regularly reviews reports and

27

evaluations of such services at its regular meetings. These reports include, but are not limited to, information regarding the operational efficiency and accuracy of the shareholder and transfer agency services provided, staffing levels, shareholder satisfaction (as measured by external as well as internal sources), technology support, new products and services offered to Fund shareholders, securities trading activities, portfolio valuation services, auditing services, and legal and operational compliance activities. Certain aspects of shareholder and transfer agency service level efficiency and the quality of securities trading activities are measured by independent third party providers and are presented in comparison to other fund groups not managed by the Advisor. The Board found the services provided by the Advisor to the Fund under the management agreement to be competitive and of high quality.

Costs of Services and Profitability. The Advisor provides detailed information concerning its cost of providing various services to the Fund, its profitability in managing the Fund (pre- and post-distribution), its overall profitability, and its financial condition. The Directors have reviewed with the Advisor the methodology used to prepare this financial information. This information is considered in evaluating the Advisor’s financial condition, its ability to continue to provide services under the management agreement, and the reasonableness of the current management fee. The Board concluded that the Advisor’s profits were reasonable in light of the services provided to the Fund.

Ethics. The Board generally considers the Advisor’s commitment to providing quality services to shareholders and to conducting its business ethically. They noted that the Advisor’s practices generally meet or exceed industry best practices.

Economies of Scale. The Board also reviewed information provided by the Advisor regarding the possible existence of economies of scale in connection with the management of the Fund. The Board concluded that economies of scale are difficult to measure and predict with precision, especially on a fund-by-fund basis. The Board concluded that the Advisor is appropriately sharing economies of scale through its competitive fee structure, offering competitive fees from fund inception, and through reinvestment in its business to provide shareholders additional content and services. The Board also noted that economies of scale are shared with the Fund and its shareholders through management fee breakpoints that serve to reduce the effective management fee as the assets of the Fund grow.

Comparison to Other Funds’ Fees. The management agreement provides that the Fund pays the Advisor a single, all-inclusive (or unified) management fee for providing all services necessary for the management and operation of the Fund, other than brokerage expenses, expenses attributable to short sales, taxes, interest, extraordinary expenses, and the fees and expenses of the Fund’s independent Directors (including their independent legal counsel) and expenses incurred in connection with the provision of shareholder services and distribution services under a plan adopted pursuant to Rule 12b-1 under the 1940 Act. Under the unified fee structure, the Advisor is responsible for providing all investment advisory, custody, audit, administrative, compliance, recordkeeping, marketing and shareholder services, or arranging and supervising third parties to provide such services. By contrast, most other funds are charged a variety of fees, including an investment advisory fee, a transfer agency fee, an administrative fee, distribution charges, and other expenses. Other than their investment advisory fees and any applicable Rule 12b-1 distribution fees, all other components of the total fees charged by these other funds may be increased without shareholder approval. The Board believes the unified fee structure is a benefit to Fund shareholders because it clearly discloses to shareholders the cost of owning Fund shares, and, since the unified fee cannot be increased without a vote of Fund shareholders, it shifts to the Advisor the risk of increased costs of operating the Fund and provides a direct incentive to minimize administrative inefficiencies. Part of the Board’s analysis of fee levels involves reviewing certain evaluative data compiled by an independent provider comparing the Fund’s unified fee to the total expense ratios of its peers. The unified fee charged to shareholders of the Fund was below the median of the total expense ratios of the Fund’s peer expense universe and was within the range of its peer expense group. The Board discussed with the Advisor the factors that impacted the level of the fee in relation to its peers. The Board concluded that the management fee

28

paid by the Fund to the Advisor under the management agreement is reasonable in light of the services provided to the Fund.

Comparison to Fees and Services Provided to Other Clients of the Advisor. The Directors also requested and received information from the Advisor concerning the nature of the services, fees, costs, and profitability of its advisory services to advisory clients other than the Fund. They observed that these varying types of client accounts require different services and involve different regulatory and entrepreneurial risks than the management of the Fund. The Board analyzed this information and concluded that the fees charged and services provided to the Fund were reasonable by comparison.

Payments to Intermediaries. The Directors also requested and received a description of payments made to intermediaries by the Fund and the Advisor and services provided in response thereto. These payments include various payments made by the Fund or the Advisor to different types of intermediaries and recordkeepers for distribution and service activities provided for the Fund. The Board reviewed such information and received representations from the Advisor that all such payments by the Fund were made pursuant to the Fund's Rule 12b-1 Plan and that all such payments by the Advisor were made from the Advisor's resources and reasonable profits. The Board found the payments to be reasonable in scope and purpose.

Collateral or “Fall-Out” Benefits Derived by the Advisor. The Board considered the existence of collateral benefits the Advisor may receive as a result of its relationship with the Fund. They concluded that the Advisor’s primary business is managing mutual funds and it generally does not use fund or shareholder information to generate profits in other lines of business, and therefore does not derive any significant collateral benefits from them. The Board noted that additional assets from other clients may offer the Advisor some benefit from increased leverage with service providers and counterparties. Additionally, the Advisor receives proprietary research from broker-dealers that execute fund portfolio transactions, which the Board concluded is likely to benefit other clients of the Advisor, as well as Fund shareholders. The Board also determined that the Advisor is able to provide investment management services to certain clients other than the Fund, at least in part, due to its existing infrastructure built to serve the fund complex. The Board concluded that appropriate allocation methodologies had been employed to assign resources and the cost of those resources to these other clients and, where expressly provided, these other client assets may be included with the assets of the Fund to determine breakpoints in the management fee schedule.

Existing Relationship. The Board also considered whether there was any reason for not continuing the existing arrangement with the Advisor. In this regard, the Board was mindful of the potential disruptions of the Fund’s operations and various risks, uncertainties, and other effects that could occur as a result of a decision not to continue such relationship. In particular, the Board recognized that most shareholders have invested in the Fund on the strength of the Advisor’s industry standing and reputation and in the expectation that the Advisor will have a continuing role in providing advisory services to the Fund.

Conclusion of the Directors. As a result of this process, the Board, including all of the independent Directors, taking into account all of the factors discussed above and the information provided by the Advisor and others in connection with its review and throughout the year, determined that the management fee is fair and reasonable in light of the services provided and that the investment management agreement between the Fund and the Advisor should be renewed.

29

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

A description of the policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund is available without charge, upon request, by calling 1-800-345-2021. It is also available on the "About Us" page of American Century Investments’ website at americancentury.com and 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 the "About Us" page at americancentury.com. 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. The fund’s Forms N-Q are available on the SEC’s website at sec.gov, and may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. 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.

30

Notes

31

Notes



32




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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.
 
 
 
 
©2017 American Century Proprietary Holdings, Inc. All rights reserved.
CL-SAN-90802  1711
 





acihorizblkb99.jpg
                  

 
 
 
Semiannual Report
 
 
 
September 30, 2017
 
 
 
Large Company Value Fund







Table of Contents
President’s Letter
2
Fund Characteristics
Shareholder Fee Example
Schedule of Investments
Statement of Assets and Liabilities
Statement of Operations
Statement of Changes in Net Assets
Notes to Financial Statements
Financial Highlights
Approval of Management Agreement
Additional Information


























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

jthomasrev0514.jpg Jonathan Thomas

Dear Investor:

Thank you for reviewing this semiannual report for the period ended September 30, 2017. 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, we encourage you to visit our website, americancentury.com.

All Major Asset Classes Provided Positive Performance

From large-cap stocks to short-maturity Treasuries, the U.S. financial markets delivered across-the-board gains for the six-month period. Stock investors responded enthusiastically to two consecutive quarters of double-digit earnings growth for S&P 500 companies, the first such back-to-back performance since 2011. In addition, gross domestic product growth accelerated to an annualized rate of 3.1% in the April-June quarter, up from 1.2% in the first quarter and the fastest pace in two years. Meanwhile, despite setbacks and delays for some components of President Trump’s pro-growth agenda, equity investors generally remained optimistic regarding future U.S. economic gains.

Against this backdrop, the S&P 500 Index reached several milestones and returned 7.71% for the six-month period. In terms of equity styles, riskier and economically sensitive stocks generally remained in favor. For example, small-cap stocks outperformed their mid- and large-cap peers, while growth stocks largely outperformed value stocks across the capitalization spectrum.

Investor preferences for risk also extended to the fixed-income market, where spread (non-Treasury) sectors were top performers and drove the Bloomberg Barclays U.S. Aggregate Bond Index to a 2.31% gain for the six-month period. The Federal Reserve (the Fed) remained relatively supportive, raising rates only once (by 25 basis points in June) amid a low-inflation backdrop and announcing a gradual approach to balance sheet normalization. Meanwhile, upbeat corporate earnings, a rallying stock market, robust investor demand for yield, and favorable supply/demand dynamics in the corporate credit markets led to outperformance among corporate bonds.

As Congress considers corporate tax cuts and other growth-oriented reforms, and the Fed continues to pursue policy normalization, new opportunities and challenges likely will emerge. We continue to believe in a disciplined, diversified, and risk-aware approach, using professionally managed portfolios in pursuit of investment goals. We appreciate your continued trust in us.


Sincerely,
image48a01.jpg
Jonathan Thomas
President and Chief Executive Officer
American Century Investments

2

Fund Characteristics
SEPTEMBER 30, 2017
Top Ten Holdings
% of net assets
Schlumberger Ltd.
3.7%
Pfizer, Inc.
3.4%
Johnson Controls International plc
3.2%
General Electric Co.
3.0%
Procter & Gamble Co. (The)
2.8%
Verizon Communications, Inc.
2.6%
U.S. Bancorp
2.6%
Bank of New York Mellon Corp. (The)
2.5%
Cisco Systems, Inc.
2.5%
Chevron Corp.
2.5%
 
 
Top Five Industries
% of net assets
Banks
14.6%
Oil, Gas and Consumable Fuels
11.1%
Pharmaceuticals
10.4%
Capital Markets
5.3%
Health Care Equipment and Supplies
5.1%
 
 
Types of Investments in Portfolio
% of net assets
Domestic Common Stocks
90.9%
Foreign Common Stocks*
7.7%
Exchange-Traded Funds
0.5%
Total Equity Exposure
99.1%
Temporary Cash Investments
0.4%
Other Assets and Liabilities
0.5%
*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 April 1, 2017 to September 30, 2017 (except as noted).

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
4/1/17
Ending
Account Value
9/30/17
Expenses Paid
During Period(1)
4/1/17 - 9/30/17
Annualized
Expense Ratio(1)
Actual
 
 
 
 
Investor Class
$1,000
$1,031.70
$4.23
0.83%
I Class
$1,000
$1,032.70
$3.21
0.63%
A Class
$1,000
$1,030.40
$5.50
1.08%
C Class
$1,000
$1,026.50
$9.30
1.83%
R Class
$1,000
$1,029.10
$6.77
1.33%
R5 Class
$1,000
$1,034.60(2)
$3.06(3)
0.63%
R6 Class
$1,000
$1,033.50
$2.45
0.48%
Hypothetical
 
 
 
 
Investor Class
$1,000
$1,020.91
$4.20
0.83%
I Class
$1,000
$1,021.91
$3.19
0.63%
A Class
$1,000
$1,019.65
$5.47
1.08%
C Class
$1,000
$1,015.89
$9.25
1.83%
R Class
$1,000
$1,018.40
$6.73
1.33%
R5 Class
$1,000
$1,021.91(4)
$3.19(4)
0.63%
R6 Class
$1,000
$1,022.66
$2.43
0.48%
(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 183, the number of days in the most recent fiscal half-year, divided by 365, 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.
(2)
Ending account value based on actual return from April 10, 2017 (commencement of sale) through September 30, 2017.
(3)
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 174, the number of days in the period from April 10, 2017 (commencement of sale) through September 30, 2017, divided by 365, to reflect the period. Had the class been available for the full period, the expenses paid during the period would have been higher.
(4)
Ending account value and expenses paid during the period assumes the class had been available throughout the entire period and are calculated using the class’s annualized expense ratio listed in the table above.


5

Schedule of Investments
 
SEPTEMBER 30, 2017 (UNAUDITED)
 
Shares
Value
COMMON STOCKS — 98.6%
 
 
Aerospace and Defense — 2.2%
 
 
Textron, Inc.
128,100

$
6,902,028

United Technologies Corp.
103,400

12,002,672

 
 
18,904,700

Auto Components — 0.5%
 
 
Delphi Automotive plc
40,900

4,024,560

Automobiles — 0.6%
 
 
Honda Motor Co. Ltd. ADR
171,000

5,054,760

Banks — 14.6%
 
 
Bank of America Corp.
780,300

19,772,802

BB&T Corp.
437,700

20,545,638

JPMorgan Chase & Co.
154,500

14,756,295

M&T Bank Corp.
73,800

11,884,752

PNC Financial Services Group, Inc. (The)
127,800

17,223,606

U.S. Bancorp
404,900

21,698,591

Wells Fargo & Co.
322,500

17,785,875

 
 
123,667,559

Building Products — 3.2%
 
 
Johnson Controls International plc
682,700

27,505,983

Capital Markets — 5.3%
 
 
Ameriprise Financial, Inc.
53,700

7,974,987

Bank of New York Mellon Corp. (The)
399,200

21,165,584

BlackRock, Inc.
4,700

2,101,323

Invesco Ltd.
390,300

13,676,112

 
 
44,918,006

Chemicals — 1.0%
 
 
DowDuPont, Inc.
120,100

8,314,523

Communications Equipment — 2.5%
 
 
Cisco Systems, Inc.
628,800

21,146,544

Containers and Packaging — 0.5%
 
 
WestRock Co.
80,300

4,555,419

Diversified Telecommunication Services — 2.6%
 
 
Verizon Communications, Inc.
449,900

22,265,551

Electric Utilities — 3.2%
 
 
Edison International
105,900

8,172,303

PG&E Corp.
88,500

6,025,965

PPL Corp.
147,300

5,590,035

Xcel Energy, Inc.
151,700

7,178,444

 
 
26,966,747

Electrical Equipment — 0.9%
 
 
Eaton Corp. plc
94,000

7,218,260

Electronic Equipment, Instruments and Components — 1.3%
 
 
TE Connectivity Ltd.
130,900

10,872,554

Energy Equipment and Services — 4.7%
 
 
Baker Hughes a GE Co.
213,300

7,811,046


6

 
Shares
Value
Schlumberger Ltd.
454,100

$
31,678,016

 
 
39,489,062

Equity Real Estate Investment Trusts (REITs) — 0.7%
 
 
Boston Properties, Inc.
48,000

5,898,240

Food and Staples Retailing — 4.0%
 
 
CVS Health Corp.
140,500

11,425,460

Sysco Corp.
119,200

6,430,840

Wal-Mart Stores, Inc.
209,500

16,370,330

 
 
34,226,630

Food Products — 3.2%
 
 
Conagra Brands, Inc.
173,200

5,843,768

General Mills, Inc.
131,300

6,796,088

Mondelez International, Inc., Class A
364,500

14,820,570

 
 
27,460,426

Health Care Equipment and Supplies — 5.1%
 
 
Abbott Laboratories
202,800

10,821,408

Medtronic plc
245,200

19,069,204

Zimmer Biomet Holdings, Inc.
110,800

12,973,572

 
 
42,864,184

Health Care Providers and Services — 1.8%
 
 
HCA Healthcare, Inc.(1) 
111,200

8,850,408

McKesson Corp.
39,000

5,990,790

 
 
14,841,198

Hotels, Restaurants and Leisure — 0.4%
 
 
Carnival Corp.
48,600

3,138,102

Household Products — 2.8%
 
 
Procter & Gamble Co. (The)
259,900

23,645,702

Industrial Conglomerates — 3.0%
 
 
General Electric Co.
1,038,000

25,098,840

Insurance — 3.5%
 
 
Aflac, Inc.
88,100

7,170,459

Chubb Ltd.
118,700

16,920,685

MetLife, Inc.
109,000

5,662,550

 
 
29,753,694

Leisure Products — 0.6%
 
 
Mattel, Inc.
337,100

5,218,308

Machinery — 0.3%
 
 
Ingersoll-Rand plc
32,800

2,924,776

Media — 0.8%
 
 
Time Warner, Inc.
66,800

6,843,660

Multiline Retail — 0.5%
 
 
Target Corp.
69,600

4,107,096

Oil, Gas and Consumable Fuels — 11.1%
 
 
Anadarko Petroleum Corp.
194,900

9,520,865

Chevron Corp.
177,900

20,903,250

Exxon Mobil Corp.
75,900

6,222,282

Imperial Oil Ltd.
454,300

14,512,841

Occidental Petroleum Corp.
263,300

16,906,493

Royal Dutch Shell plc ADR
101,200

6,329,048

TOTAL SA ADR
372,000

19,909,440

 
 
94,304,219


7

 
Shares
Value
Personal Products — 0.5%
 
 
Unilever NV CVA
69,100

$
4,086,732

Pharmaceuticals — 10.4%
 
 
Allergan plc
55,400

11,354,230

Johnson & Johnson
145,100

18,864,451

Merck & Co., Inc.
227,100

14,541,213

Pfizer, Inc.
797,800

28,481,460

Roche Holding AG
58,100

14,831,745

 
 
88,073,099

Road and Rail — 0.3%
 
 
Union Pacific Corp.
21,700

2,516,549

Semiconductors and Semiconductor Equipment — 3.0%
 
 
Applied Materials, Inc.
124,600

6,490,414

Intel Corp.
176,400

6,717,312

Lam Research Corp.
23,100

4,274,424

QUALCOMM, Inc.
148,400

7,693,056

 
 
25,175,206

Software — 1.7%
 
 
Oracle Corp. (New York)
299,200

14,466,320

Specialty Retail — 1.5%
 
 
Advance Auto Parts, Inc.
98,903

9,811,178

L Brands, Inc.
70,800

2,945,988

 
 
12,757,166

Technology Hardware, Storage and Peripherals — 0.3%
 
 
Apple, Inc.
16,800

2,589,216

TOTAL COMMON STOCKS
(Cost $746,347,791)
 
834,893,591

EXCHANGE-TRADED FUNDS — 0.5%
 
 
iShares Russell 1000 Value ETF
(Cost $4,040,654)
35,600

4,218,956

TEMPORARY CASH INVESTMENTS — 0.4%
 
 
Repurchase Agreement, BMO Capital Markets Corp., (collateralized by various U.S. Treasury obligations, 0.125% - 3.875%, 6/30/18 - 11/15/46, valued at $2,622,015), in a joint trading account at 0.95%, dated 9/29/17, due 10/2/17 (Delivery value $2,571,220)
 
2,571,016

Repurchase Agreement, Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 2.00%, 11/15/26, valued at $1,150,276), at 0.34%, dated 9/29/17, due 10/2/17 (Delivery value $1,126,032)
 
1,126,000

TOTAL TEMPORARY CASH INVESTMENTS
(Cost $3,697,016)
 
3,697,016

TOTAL INVESTMENT SECURITIES — 99.5%
(Cost $754,085,461)
 
842,809,563

OTHER ASSETS AND LIABILITIES — 0.5%
 
3,912,797

TOTAL NET ASSETS — 100.0%
 
$
846,722,360



8

FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
Currency Purchased
Currency Sold
Counterparty
Settlement Date
Unrealized Appreciation
(Depreciation)
USD
12,187,860

CAD
15,071,630

Morgan Stanley
12/29/17
$
101,994

USD
12,665,517

CHF
12,233,370

Credit Suisse AG
12/29/17
(43,905
)
USD
731,135

EUR
616,971

JPMorgan Chase Bank N.A.
12/29/17
(1,676
)
USD
20,109,658

EUR
16,966,310

UBS AG
12/29/17
(42,157
)
USD
5,293,591

GBP
3,919,117

Morgan Stanley
12/29/17
27,653

USD
129,360

GBP
95,897

Morgan Stanley
12/29/17
507

USD
4,375,618

JPY
486,422,125

Credit Suisse AG
12/29/17
33,813

 
 
 
 
 
 
$
76,229


NOTES TO SCHEDULE OF INVESTMENTS
ADR
-
American Depositary Receipt
CAD
-
Canadian Dollar
CHF
-
Swiss Franc
CVA
-
Certificaten Van Aandelen
EUR
-
Euro
GBP
-
British Pound
JPY
-
Japanese Yen
USD
-
United States Dollar
(1)
Non-income producing.

See Notes to Financial Statements.


9

Statement of Assets and Liabilities
SEPTEMBER 30, 2017 (UNAUDITED)
 
Assets
 
Investment securities, at value (cost of $754,085,461)
$
842,809,563

Receivable for investments sold
3,529,585

Receivable for capital shares sold
61,760

Unrealized appreciation on forward foreign currency exchange contracts
163,967

Dividends and interest receivable
2,035,171

 
848,600,046

 
 
Liabilities
 
Disbursements in excess of demand deposit cash
2,817

Payable for investments purchased
508,444

Payable for capital shares redeemed
731,267

Unrealized depreciation on forward foreign currency exchange contracts
87,738

Accrued management fees
530,834

Distribution and service fees payable
16,586

 
1,877,686

 
 
Net Assets
$
846,722,360

 
 
Net Assets Consist of:
 
Capital (par value and paid-in surplus)
$
737,549,356

Undistributed net investment income
850,316

Undistributed net realized gain
19,521,817

Net unrealized appreciation
88,800,871

 
$
846,722,360


 
Net Assets
Shares Outstanding
Net Asset Value
Per Share
Investor Class, $0.01 Par Value

$648,466,018

63,239,475

$10.25
I Class, $0.01 Par Value

$19,214,593

1,872,854

$10.26
A Class, $0.01 Par Value

$45,945,703

4,482,673

$10.25*
C Class, $0.01 Par Value

$6,326,641

617,239

$10.25
R Class, $0.01 Par Value

$5,198,533

506,759

$10.26
R5 Class, $0.01 Par Value

$5,173

504

$10.26
R6 Class, $0.01 Par Value

$121,565,699

11,851,369

$10.26
*Maximum offering price $10.88 (net asset value divided by 0.9425).


See Notes to Financial Statements.

10

Statement of Operations
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2017 (UNAUDITED)
 
Investment Income (Loss)
 
Income:
 
Dividends (net of foreign taxes withheld of $123,625)
$
14,442,154

Interest
20,791

 
14,462,945

 
 
Expenses:
 
Management fees
3,399,234

Distribution and service fees:
 
A Class
60,558

C Class
35,534

R Class
13,557

Directors' fees and expenses
14,852

Other expenses
1,670

 
3,525,405

 
 
Net investment income (loss)
10,937,540

 
 
Realized and Unrealized Gain (Loss)
 
Net realized gain (loss) on:
 
Investment transactions
25,330,093

Forward foreign currency exchange contract transactions
(3,283,965
)
Foreign currency translation transactions
10,399

 
22,056,527

 
 
Change in net unrealized appreciation (depreciation) on:
 
Investments
(5,186,005
)
Forward foreign currency exchange contracts
(305,241
)
Translation of assets and liabilities in foreign currencies
455

 
(5,490,791
)
 
 
Net realized and unrealized gain (loss)
16,565,736

 
 
Net Increase (Decrease) in Net Assets Resulting from Operations
$
27,503,276



See Notes to Financial Statements.



11

Statement of Changes in Net Assets
SIX MONTHS ENDED SEPTEMBER 30, 2017 (UNAUDITED) AND YEAR ENDED MARCH 31, 2017
Increase (Decrease) in Net Assets
September 30, 2017
March 31, 2017
Operations
 
 
Net investment income (loss)
$
10,937,540

$
17,377,360

Net realized gain (loss)
22,056,527

169,367,496

Change in net unrealized appreciation (depreciation)
(5,490,791
)
(34,461,174
)
Net increase (decrease) in net assets resulting from operations
27,503,276

152,283,682

 
 
 
Distributions to Shareholders
 
 
From net investment income:
 
 
Investor Class
(7,519,907
)
(12,419,761
)
I Class
(231,556
)
(910,606
)
A Class
(472,329
)
(970,082
)
C Class
(40,650
)
(85,151
)
R Class
(46,431
)
(78,762
)
R5 Class
(63
)
—

R6 Class
(1,776,288
)
(2,733,954
)
Decrease in net assets from distributions
(10,087,224
)
(17,198,316
)
 
 
 
Capital Share Transactions
 
 
Net increase (decrease) in net assets from capital share transactions (Note 5)
(74,054,356
)
(102,207,905
)
 
 
 
Net increase (decrease) in net assets
(56,638,304
)
32,877,461

 
 
 
Net Assets
 
 
Beginning of period
903,360,664

870,483,203

End of period
$
846,722,360

$
903,360,664

 
 
 
Undistributed net investment income
$
850,316

—



See Notes to Financial Statements.





12

Notes to Financial Statements

SEPTEMBER 30, 2017 (UNAUDITED)

1. Organization

American Century Capital Portfolios, 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. Large Company Value 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. Income is a secondary objective.

The fund offers the Investor Class, I Class (formerly Institutional Class), A Class, C Class, R Class, R5 Class and R6 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. Sale of the R5 Class commenced on April 10, 2017.

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. 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.
 
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

13

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. If significant fluctuations in foreign markets are identified, 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.
 
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.

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).
 
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

14

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. and American Century Strategic Asset Allocations, Inc. own, in aggregate, 48% 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 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 rate of the fee is determined by applying a fee rate calculation formula. This formula takes into account the fund’s assets as well as certain assets, if any, of other clients of the investment advisor outside the American Century Investments family of funds (such as subadvised funds and separate accounts) that use very similar investment teams and strategies (strategy assets). The strategy assets of the fund also include the assets of NT Large Company Value Fund, one fund in a series issued by the corporation.
The management fee schedule range and the effective annual management fee for each class for the period ended September 30, 2017 are as follows:
 
Management Fee
Schedule Range
Effective Annual Management Fee
Investor Class
0.70% to 0.90%
0.83%
I Class
0.50% to 0.70%
0.63%
A Class
0.70% to 0.90%
0.83%
C Class
0.70% to 0.90%
0.83%
R Class
0.70% to 0.90%
0.83%
R5 Class
0.50% to 0.70%
0.63%
R6 Class
0.35% to 0.55%
0.48%

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 September 30, 2017 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,

15

the interfund purchases and sales were $4,502,815 and $3,542,325, respectively. The effect of interfund transactions on the Statement of Operations was $444,038 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 September 30, 2017 were $223,688,920 and $296,969,091, respectively.

5. Capital Share Transactions

Transactions in shares of the fund were as follows:
 
Six months ended
September 30, 2017(1)
Year ended
March 31, 2017
 
Shares
Amount
Shares
Amount
Investor Class/Shares Authorized
490,000,000

 
500,000,000

 
Sold
3,543,966

$
35,611,263

8,949,727

$
87,363,174

Issued in reinvestment of distributions
734,704

7,445,032

1,299,238

12,244,541

Redeemed
(6,501,904
)
(65,632,275
)
(19,717,686
)
(183,481,206
)
 
(2,223,234
)
(22,575,980
)
(9,468,721
)
(83,873,491
)
I Class/Shares Authorized
50,000,000

 
50,000,000

 
Sold
688,462

6,901,044

1,229,209

12,075,330

Issued in reinvestment of distributions
20,582

208,698

96,436

903,949

Redeemed
(2,987,272
)
(30,117,504
)
(2,825,311
)
(25,938,025
)
 
(2,278,228
)
(23,007,762
)
(1,499,666
)
(12,958,746
)
A Class/Shares Authorized
50,000,000

 
60,000,000

 
Sold
384,452

3,861,796

639,700

6,049,501

Issued in reinvestment of distributions
42,637

431,944

98,918

933,061

Redeemed
(1,540,413
)
(15,534,041
)
(2,335,654
)
(21,555,910
)
 
(1,113,324
)
(11,240,301
)
(1,597,036
)
(14,573,348
)
C Class/Shares Authorized
15,000,000

 
15,000,000

 
Sold
41,930

420,538

64,787

596,206

Issued in reinvestment of distributions
3,210

32,537

5,090

48,282

Redeemed
(318,468
)
(3,191,106
)
(242,903
)
(2,265,111
)
 
(273,328
)
(2,738,031
)
(173,026
)
(1,620,623
)
R Class/Shares Authorized
10,000,000

 
10,000,000

 
Sold
58,873

593,999

122,854

1,157,017

Issued in reinvestment of distributions
4,350

44,113

8,051

76,287

Redeemed
(133,802
)
(1,348,384
)
(115,363
)
(1,095,600
)
 
(70,579
)
(710,272
)
15,542

137,704

R5 Class/Shares Authorized
50,000,000

 
N/A

 
Sold
498

5,000

 
 
Issued in reinvestment of distributions
6

63

 
 
 
504

5,063

 
 
R6 Class/Shares Authorized
85,000,000

 
80,000,000

 
Sold
4,714,654

47,490,292

3,198,808

30,074,204

Issued in reinvestment of distributions
175,220

1,776,288

288,808

2,733,954

Redeemed
(6,225,229
)
(63,053,653
)
(2,378,584
)
(22,127,559
)
 
(1,335,355
)
(13,787,073
)
1,109,032

10,680,599

Net increase (decrease)
(7,293,544
)
$
(74,054,356
)
(11,613,875
)
$
(102,207,905
)

(1)
April 10, 2017 (commencement of sale) through September 30, 2017 for the R5 Class.

16

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. There were no significant transfers between levels during the period.

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
$
801,462,273

$
33,431,318

—

Exchange-Traded Funds
4,218,956

—

—

Temporary Cash Investments
—

3,697,016

—

 
$
805,681,229

$
37,128,334

—

Other Financial Instruments
 
 
 
Forward Foreign Currency Exchange Contracts
—

$
163,967

—

      
 
 
 
Liabilities
 
 
 
Other Financial Instruments
 
 
 
Forward Foreign Currency Exchange Contracts
—

$
87,738

—


7. Derivative Instruments

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. 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 $60,311,351.

The value of foreign currency risk derivative instruments as of September 30, 2017, is disclosed on the Statement of Assets and Liabilities as an asset of $163,967 in unrealized appreciation on forward foreign

17

currency exchange contracts and a liability of $87,738 in unrealized depreciation on forward foreign currency exchange contracts. For the six months ended September 30, 2017, the effect of foreign currency risk derivative instruments on the Statement of Operations was $(3,283,965) in net realized gain (loss) on forward foreign currency exchange contract transactions and $(305,241) in change in net unrealized appreciation (depreciation) on forward foreign currency exchange contracts.

8. Risk Factors

There are certain risks involved in investing in foreign securities. These risks include those resulting from future adverse political, social and economic developments, fluctuations in currency exchange rates, the possible imposition of exchange controls, and other foreign laws or restrictions.

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
$
760,244,106

Gross tax appreciation of investments
$
111,021,480

Gross tax depreciation of investments
(28,456,023
)
Net tax appreciation (depreciation) of investments
$
82,565,457


The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales.


18

Financial Highlights
For a Share Outstanding Throughout the Years Ended March 31 (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
 
 
 
 
 
 
 
 
 
2017(3)
$10.05
0.12
0.20
0.32
(0.12)
$10.25
3.17%
0.83%(4)
2.43%(4)
26%

$648,466

2017
$8.58
0.18
1.48
1.66
(0.19)
$10.05
19.44%
0.83%
1.96%
68%

$658,031

2016
$9.07
0.12
(0.49)
(0.37)
(0.12)
$8.58
(4.06)%
0.84%
1.41%
56%

$642,746

2015
$8.28
0.12
0.78
0.90
(0.11)
$9.07
10.92%
0.84%
1.36%
56%

$588,608

2014
$6.92
0.12
1.36
1.48
(0.12)
$8.28
21.57%
0.85%
1.64%
35%

$574,367

2013
$6.09
0.12
0.83
0.95
(0.12)
$6.92
15.85%
0.87%
1.87%
33%

$487,161

I Class(5)
 
 
 
 
 
 
 
 
 
2017(3)
$10.06
0.12
0.21
0.33
(0.13)
$10.26
3.27%
0.63%(4)
2.63%(4)
26%

$19,215

2017
$8.58
0.19
1.49
1.68
(0.20)
$10.06
19.80%
0.63%
2.16%
68%

$41,746

2016
$9.08
0.14
(0.50)
(0.36)
(0.14)
$8.58
(3.97)%
0.64%
1.61%
56%

$48,495

2015
$8.29
0.13
0.79
0.92
(0.13)
$9.08
11.14%
0.64%
1.56%
56%

$47,616

2014
$6.93
0.14
1.36
1.50
(0.14)
$8.29
21.78%
0.65%
1.84%
35%

$81,195

2013
$6.10
0.13
0.83
0.96
(0.13)
$6.93
16.05%
0.67%
2.07%
33%

$57,325



For a Share Outstanding Throughout the Years Ended March 31 (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
 
 
 
 
 
 
 
 
 
2017(3)
$10.05
0.11
0.19
0.30
(0.10)
$10.25
3.04%
1.08%(4)
2.18%(4)
26%

$45,946

2017
$8.57
0.16
1.48
1.64
(0.16)
$10.05
19.28%
1.08%
1.71%
68%

$56,222

2016
$9.07
0.10
(0.50)
(0.40)
(0.10)
$8.57
(4.41)%
1.09%
1.16%
56%

$61,663

2015
$8.28
0.10
0.78
0.88
(0.09)
$9.07
10.65%
1.09%
1.11%
56%

$70,462

2014
$6.92
0.11
1.35
1.46
(0.10)
$8.28
21.27%
1.10%
1.39%
35%

$74,863

2013
$6.09
0.10
0.84
0.94
(0.11)
$6.92
15.57%
1.12%
1.62%
33%

$69,270

C Class
 
 
 
 
 
 
 
 
 
2017(3)
$10.05
0.07
0.20
0.27
(0.07)
$10.25
2.65%
1.83%(4)
1.43%(4)
26%

$6,327

2017
$8.57
0.09
1.48
1.57
(0.09)
$10.05
18.36%
1.83%
0.96%
68%

$8,948

2016
$9.06
0.03
(0.49)
(0.46)
(0.03)
$8.57
(5.03)%
1.84%
0.41%
56%

$9,116

2015
$8.28
0.03
0.78
0.81
(0.03)
$9.06
9.77%
1.84%
0.36%
56%

$11,505

2014
$6.92
0.05
1.35
1.40
(0.04)
$8.28
20.36%
1.85%
0.64%
35%

$10,101

2013
$6.09
0.05
0.84
0.89
(0.06)
$6.92
14.72%
1.87%
0.87%
33%

$8,961

R Class
 
 
 
 
 
 
 
 
 
2017(3)
$10.06
0.10
0.19
0.29
(0.09)
$10.26
2.91%
1.33%(4)
1.93%(4)
26%

$5,199

2017
$8.58
0.14
1.48
1.62
(0.14)
$10.06
18.95%
1.33%
1.46%
68%

$5,806

2016
$9.07
0.08
(0.49)
(0.41)
(0.08)
$8.58
(4.55)%
1.34%
0.91%
56%

$4,820

2015
$8.28
0.07
0.79
0.86
(0.07)
$9.07
10.37%
1.34%
0.86%
56%

$5,842

2014
$6.92
0.09
1.35
1.44
(0.08)
$8.28
20.96%
1.35%
1.14%
35%

$6,135

2013
$6.10
0.08
0.83
0.91
(0.09)
$6.92
15.10%
1.37%
1.37%
33%

$5,792



For a Share Outstanding Throughout the Years Ended March 31 (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)
R5 Class
 
 
 
 
 
 
 
 
 
2017(6)
$10.04
0.13
0.22
0.35
(0.13)
$10.26
3.46%
0.63%(4)
2.67%(4)
26%(7)

$5

R6 Class
 
 
 
 
 
 
 
 
 
2017(3)
$10.06
0.14
0.19
0.33
(0.13)
$10.26
3.35%
0.48%(4)
2.78%(4)
26%

$121,566

2017
$8.58
0.22
1.48
1.70
(0.22)
$10.06
19.98%
0.48%
2.31%
68%

$132,608

2016
$9.08
0.16
(0.51)
(0.35)
(0.15)
$8.58
(3.83)%
0.49%
1.76%
56%

$103,643

2015
$8.29
0.17
0.76
0.93
(0.14)
$9.08
11.30%
0.49%
1.71%
56%

$38,170

2014(8)
$7.65
0.10
0.65
0.75
(0.11)
$8.29
9.90%
0.50%(4)
1.98%(4)
35%(9)

$27

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 September 30, 2017 (unaudited).
(4)
Annualized.
(5)
Prior to April 10, 2017, the I Class was referred to as the Institutional Class.
(6)
April 10, 2017 (commencement of sale) through September 30, 2017 (unaudited).
(7)
Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the six months ended September 30, 2017.
(8)
July 26, 2013 (commencement of sale) through March 31, 2014.
(9)
Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended March 31, 2014.

See Notes to Financial Statements.



Approval of Management Agreement


At a meeting held on June 29, 2017, the Fund’s Board of Directors (the "Board") unanimously approved the renewal of the management agreement pursuant to which American Century Investment Management, Inc. (the “Advisor”) acts as the investment advisor for the Fund. Under Section 15(c) of the Investment Company Act, contracts for investment advisory services are required to be reviewed, evaluated, and approved by a majority of a fund’s directors (the “Directors”), including a majority of the independent Directors, each year.
    
Prior to its consideration of the renewal of the management agreement, the Directors requested and reviewed extensive data and information compiled by the Advisor and certain independent providers of evaluation data concerning the Fund and the services provided to the Fund by the Advisor. This review was in addition to the oversight and evaluation undertaken by the Board and its committees on a continual basis and the information received was supplemental to the extensive information that the Board and its committees receive and consider throughout the year.

In connection with its consideration of the renewal of the management agreement, the Board’s review and evaluation of the services provided by the Advisor included, but was not limited to, the following:

•
the nature, extent, and quality of investment management, shareholder services, and other services provided and to be provided to the Fund;
•
the wide range of other programs and services provided and to be provided to the Fund and its shareholders on a routine and non-routine basis;
•
the investment performance of the Fund, including data comparing the Fund's performance to appropriate benchmarks and/or a peer group of other mutual funds with similar investment objectives and strategies;
•
the cost of owning the Fund compared to the cost of owning similar funds;
•
the compliance policies, procedures, and regulatory experience of the Advisor and the Fund's service providers;
•
financial data showing the cost of services provided to the Fund, the profitability of the Fund to the Advisor, and the overall profitability of the Advisor;
•
strategic plans of the Advisor
•
possible economies of scale associated with the Advisor’s management of the Fund and other accounts under its management;
•
data comparing services provided and charges to the Advisor's other investment management clients;
•
acquired fund fees and expenses;
•
payments and practices by the Fund and the Advisor regarding financial intermediaries, the nature of services provided by intermediaries, and the terms of share classes utilized; and
•
any collateral benefits derived by the Advisor from the management of the Fund.

The Directors held three in-person meetings and one telephonic meeting to review and discuss the information provided. The independent Directors also reviewed responses to supplemental information requests and held active discussions with the Advisor regarding the renewal of the management agreement. The independent Directors had the benefit of the advice of their independent counsel throughout the process.

Factors Considered

The Directors considered all of the information provided by the Advisor, the independent data providers, and independent counsel in connection with the approval. They determined that the

22

information was sufficient for them to evaluate the management agreement for the Fund. In connection with their review, the Directors did not identify any single factor as being all-important or controlling, and each Director may have attributed different levels of importance to different factors. In deciding to renew the management agreement, the Board based its decision on a number of factors, including without limitation the following:

Nature, Extent and Quality of Services - Generally. Under the management agreement, the Advisor is responsible for providing or arranging for all services necessary for the operation of the Fund. The Board noted that the Advisor provides or arranges at its own expense a wide variety of services including without limitation the following:

•
portfolio research and security selection
•
securities trading
•
Fund administration
•
custody of Fund assets
•
daily valuation of the Fund’s portfolio
•
shareholder servicing and transfer agency, including shareholder confirmations, recordkeeping, and communications
•
legal services (except the independent Directors’ counsel)
•
regulatory and portfolio compliance
•
financial reporting
•
marketing and distribution (except amounts paid by the Fund under Rule 12b-1 plans)

The Board noted that many of these services have expanded over time in terms of both quantity and complexity in response to shareholder demands, competition in the industry, changing distribution channels, and the changing regulatory environment. The Board noted specifically the resources the Advisor has committed during the year to compliance with the Department of Labor fiduciary rule and share class modernization.

Investment Management Services. The nature of the investment management services provided to the Fund is quite complex and allows Fund shareholders access to professional money management, instant diversification of their investments within an asset class, the opportunity to easily diversify among asset classes by investing in or exchanging among various American Century Investments funds, and liquidity. In evaluating investment performance, the Board expects the Advisor to manage the Fund in accordance with its investment objectives and approved strategies. Further, the Directors recognize that the Advisor has an obligation to monitor trading activities, and in particular to seek the best execution of fund trades, and to evaluate the use of and payment for research. In providing these services, the Advisor utilizes teams of investment professionals (portfolio managers, analysts, research assistants, and securities traders) who require extensive information technology, research, training, compliance, and other systems to conduct their business. The Board, directly and through its Fund Performance Review Committee, provides oversight of the investment performance process. It regularly reviews investment performance information for the Fund, together with comparative information for appropriate benchmarks and/or peer groups of similarly-managed funds, over different time horizons. The Directors also review detailed performance information provided by the Advisor during the management agreement renewal process. If performance concerns are identified, the Fund receives special reviews until performance improves, during which the Board receives a report from the Advisor regarding the reasons for such results (e.g., market conditions, security selection) and any efforts being undertaken to improve performance. The Fund’s performance was above its benchmark for the three-, five-, and ten-year periods and below its benchmark for the one-year period reviewed by the Board. The Board discussed the Fund's performance with the Advisor and was satisfied with the efforts being undertaken by the Advisor. The Board found the investment management services provided by the Advisor to the Fund to be satisfactory and consistent with the management agreement.


23

Shareholder and Other Services. Under the management agreement, the Advisor provides the Fund with a comprehensive package of transfer agency, shareholder, and other services. The Board, directly and through various committees of the Board, regularly reviews reports and evaluations of such services at its regular meetings. These reports include, but are not limited to, information regarding the operational efficiency and accuracy of the shareholder and transfer agency services provided, staffing levels, shareholder satisfaction (as measured by external as well as internal sources), technology support, new products and services offered to Fund shareholders, securities trading activities, portfolio valuation services, auditing services, and legal and operational compliance activities. Certain aspects of shareholder and transfer agency service level efficiency and the quality of securities trading activities are measured by independent third party providers and are presented in comparison to other fund groups not managed by the Advisor. The Board found the services provided by the Advisor to the Fund under the management agreement to be competitive and of high quality.

Costs of Services and Profitability. The Advisor provides detailed information concerning its cost of providing various services to the Fund, its profitability in managing the Fund (pre- and post-distribution), its overall profitability, and its financial condition. The Directors have reviewed with the Advisor the methodology used to prepare this financial information. This information is considered in evaluating the Advisor’s financial condition, its ability to continue to provide services under the management agreement, and the reasonableness of the current management fee. The Board concluded that the Advisor’s profits were reasonable in light of the services provided to the Fund.

Ethics. The Board generally considers the Advisor’s commitment to providing quality services to shareholders and to conducting its business ethically. They noted that the Advisor’s practices generally meet or exceed industry best practices.

Economies of Scale. The Board also reviewed information provided by the Advisor regarding the possible existence of economies of scale in connection with the management of the Fund. The Board concluded that economies of scale are difficult to measure and predict with precision, especially on a fund-by-fund basis. The Board concluded that the Advisor is appropriately sharing economies of scale through its competitive fee structure, offering competitive fees from fund inception, and through reinvestment in its business to provide shareholders additional content and services. The Board also noted that economies of scale are shared with the Fund and its shareholders through management fee breakpoints that serve to reduce the effective management fee as the assets of the Fund grow.

Comparison to Other Funds’ Fees. The management agreement provides that the Fund pays the Advisor a single, all-inclusive (or unified) management fee for providing all services necessary for the management and operation of the Fund, other than brokerage expenses, expenses attributable to short sales, taxes, interest, extraordinary expenses, and the fees and expenses of the Fund’s independent Directors (including their independent legal counsel) and expenses incurred in connection with the provision of shareholder services and distribution services under a plan adopted pursuant to Rule 12b-1 under the 1940 Act. Under the unified fee structure, the Advisor is responsible for providing all investment advisory, custody, audit, administrative, compliance, recordkeeping, marketing and shareholder services, or arranging and supervising third parties to provide such services. By contrast, most other funds are charged a variety of fees, including an investment advisory fee, a transfer agency fee, an administrative fee, distribution charges, and other expenses. Other than their investment advisory fees and any applicable Rule 12b-1 distribution fees, all other components of the total fees charged by these other funds may be increased without shareholder approval. The Board believes the unified fee structure is a benefit to Fund shareholders because it clearly discloses to shareholders the cost of owning Fund shares, and, since the unified fee cannot be increased without a vote of Fund shareholders, it shifts to the Advisor the risk of increased costs of operating the Fund and provides a direct incentive to minimize administrative inefficiencies. Part of the Board’s analysis of fee levels involves reviewing certain evaluative data compiled by an independent provider comparing the Fund’s unified fee to the total expense ratios of its peers. The unified fee charged to shareholders of the Fund was

24

below the median of the total expense ratios of the Fund’s peer expense universe and was within the range of its peer expense group. The Board discussed with the Advisor the factors that impacted the level of the fee in relation to its peers. The Board concluded that the management fee paid by the Fund to the Advisor under the management agreement is reasonable in light of the services provided to the Fund.

Comparison to Fees and Services Provided to Other Clients of the Advisor. The Directors also requested and received information from the Advisor concerning the nature of the services, fees, costs, and profitability of its advisory services to advisory clients other than the Fund. They observed that these varying types of client accounts require different services and involve different regulatory and entrepreneurial risks than the management of the Fund. The Board analyzed this information and concluded that the fees charged and services provided to the Fund were reasonable by comparison.

Payments to Intermediaries. The Directors also requested and received a description of payments made to intermediaries by the Fund and the Advisor and services provided in response thereto. These payments include various payments made by the Fund or the Advisor to different types of intermediaries and recordkeepers for distribution and service activities provided for the Fund. The Board reviewed such information and received representations from the Advisor that all such payments by the Fund were made pursuant to the Fund's Rule 12b-1 Plan and that all such payments by the Advisor were made from the Advisor's resources and reasonable profits. The Board found the payments to be reasonable in scope and purpose.

Collateral or “Fall-Out” Benefits Derived by the Advisor. The Board considered the existence of collateral benefits the Advisor may receive as a result of its relationship with the Fund. They concluded that the Advisor’s primary business is managing mutual funds and it generally does not use fund or shareholder information to generate profits in other lines of business, and therefore does not derive any significant collateral benefits from them. The Board noted that additional assets from other clients may offer the Advisor some benefit from increased leverage with service providers and counterparties. Additionally, the Advisor receives proprietary research from broker-dealers that execute fund portfolio transactions, which the Board concluded is likely to benefit other clients of the Advisor, as well as Fund shareholders. The Board also determined that the Advisor is able to provide investment management services to certain clients other than the Fund, at least in part, due to its existing infrastructure built to serve the fund complex. The Board concluded that appropriate allocation methodologies had been employed to assign resources and the cost of those resources to these other clients and, where expressly provided, these other client assets may be included with the assets of the Fund to determine breakpoints in the management fee schedule.

Existing Relationship. The Board also considered whether there was any reason for not continuing the existing arrangement with the Advisor. In this regard, the Board was mindful of the potential disruptions of the Fund’s operations and various risks, uncertainties, and other effects that could occur as a result of a decision not to continue such relationship. In particular, the Board recognized that most shareholders have invested in the Fund on the strength of the Advisor’s industry standing and reputation and in the expectation that the Advisor will have a continuing role in providing advisory services to the Fund.

Conclusion of the Directors. As a result of this process, the Board, including all of the independent Directors, taking into account all of the factors discussed above and the information provided by the Advisor and others in connection with its review and throughout the year, determined that the management fee is fair and reasonable in light of the services provided and that the investment management agreement between the Fund and the Advisor should be renewed.

25

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

A description of the policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund is available without charge, upon request, by calling 1-800-345-2021. It is also available on the "About Us" page of American Century Investments’ website at americancentury.com and 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 the "About Us" page at americancentury.com. 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. The fund’s Forms N-Q are available on the SEC’s website at sec.gov, and may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. 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




acihorizblkb99.jpg
 
 
 
 
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
 
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1-800-345-6488
 
Telecommunications Relay Service for the Deaf
711
 
 
 
 
American Century Capital Portfolios, 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.
 
 
 
 
©2017 American Century Proprietary Holdings, Inc. All rights reserved.
CL-SAN-90803  1711
 




SEMIANNUAL REPORT
acaltslogoblacka01.jpg
SEPTEMBER 30, 2017
 


 AC Alternatives® Market Neutral Value Fund



acaltscarrotblacknobleeda01.jpg





Table of Contents
President’s Letter
2

Fund Characteristics

Shareholder Fee Example

Schedule of Investments

Statement of Assets and Liabilities

Statement of Operations

Statement of Changes in Net Assets

Notes to Financial Statements

Financial Highlights

Approval of Management Agreement

Additional Information




























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

jthomasrev0514.jpg Jonathan Thomas

Dear Investor:

Thank you for reviewing this semiannual report for the period ended September 30, 2017. 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, we encourage you to visit our website, americancentury.com.

All Major Asset Classes Provided Positive Performance

From large-cap stocks to short-maturity Treasuries, the U.S. financial markets delivered across-the-board gains for the six-month period. Stock investors responded enthusiastically to two consecutive quarters of double-digit earnings growth for S&P 500 companies, the first such back-to-back performance since 2011. In addition, gross domestic product growth accelerated to an annualized rate of 3.1% in the April-June quarter, up from 1.2% in the first quarter and the fastest pace in two years. Meanwhile, despite setbacks and delays for some components of President Trump’s pro-growth agenda, equity investors generally remained optimistic regarding future U.S. economic gains.

Against this backdrop, the S&P 500 Index reached several milestones and returned 7.71% for the six-month period. In terms of equity styles, riskier and economically sensitive stocks generally remained in favor. For example, small-cap stocks outperformed their mid- and large-cap peers, while growth stocks largely outperformed value stocks across the capitalization spectrum.

Investor preferences for risk also extended to the fixed-income market, where spread (non-Treasury) sectors were top performers and drove the Bloomberg Barclays U.S. Aggregate Bond Index to a 2.31% gain for the six-month period. The Federal Reserve (the Fed) remained relatively supportive, raising rates only once (by 25 basis points in June) amid a low-inflation backdrop and announcing a gradual approach to balance sheet normalization. Meanwhile, upbeat corporate earnings, a rallying stock market, robust investor demand for yield, and favorable supply/demand dynamics in the corporate credit markets led to outperformance among corporate bonds.

As Congress considers corporate tax cuts and other growth-oriented reforms, and the Fed continues to pursue policy normalization, new opportunities and challenges likely will emerge. We continue to believe in a disciplined, diversified, and risk-aware approach, using professionally managed portfolios in pursuit of investment goals. We appreciate your continued trust in us.


Sincerely,
image48a01.jpg
Jonathan Thomas
President and Chief Executive Officer
American Century Investments

2

Fund Characteristics 
SEPTEMBER 30, 2017
 
Top Ten Long Holdings
% of net assets
Royal Dutch Shell plc, Class A ADR
8.17%
Intel Corp. (Convertible)
4.09%
iShares Russell 1000 Value ETF
3.49%
Consumer Discretionary Select Sector SPDR Fund
3.14%
Wal-Mart Stores, Inc.
2.83%
iShares U.S. Real Estate ETF
2.61%
Microchip Technology, Inc. (Convertible)
2.37%
HEICO Corp., Class A
2.25%
General Mills, Inc.
1.87%
Discover Financial Services
1.77%
 
 
Top Ten Short Holdings
% of net assets
Royal Dutch Shell plc, Class B ADR
(5.75)%
Intel Corp.
(3.83)%
iShares Russell 1000 Growth ETF
(3.05)%
Costco Wholesale Corp.
(2.87)%
Utilities Select Sector SPDR Fund
(2.74)%
Avis Budget Group, Inc.
(2.73)%
Kraft Heinz Co. (The)
(2.61)%
Halliburton Co.
(2.38)%
Microchip Technology, Inc.
(2.36)%
HEICO Corp.
(2.28)%
 
 
Types of Investments in Portfolio
% of net assets
Domestic Common Stocks
71.1%
Foreign Common Stocks*
9.5%
Exchange-Traded Funds
9.2%
Convertible Bonds
6.5%
Domestic Common Stocks Sold Short
(77.7)%
Foreign Common Stocks Sold Short*
(9.2)%
Exchange-Traded Funds Sold Short
(9.5)%
Temporary Cash Investments
2.0%
Other Assets and Liabilities
98.1%**
*Includes depositary shares, dual listed securities and foreign ordinary shares.
**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 April 1, 2017 to September 30, 2017.

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
4/1/17
Ending
Account Value
9/30/17
Expenses Paid
During Period(1) 
4/1/17 - 9/30/17
 
Annualized
Expense Ratio(1)
Actual
 
 
 
 
Investor Class
$1,000
$987.00
$19.63
3.94%
I Class
$1,000
$988.10
$18.64
3.74%
A Class
$1,000
$985.90
$20.86
4.19%
C Class
$1,000
$982.30
$24.55
4.94%
R Class
$1,000
$984.70
$22.09
4.44%
Hypothetical
 
 
 
 
Investor Class
$1,000
$1,005.32
$19.81
3.94%
I Class
$1,000
$1,006.32
$18.81
3.74%
A Class
$1,000
$1,004.06
$21.05
4.19%
C Class
$1,000
$1,000.30
$24.77
4.94%
R Class
$1,000
$1,002.81
$22.29
4.44%
(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 183, the number of days in the most recent fiscal half-year, divided by 365, 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

SEPTEMBER 30, 2017 (UNAUDITED)
 
Shares/
Principal Amount
Value
COMMON STOCKS — 80.6%
 
 
Aerospace and Defense — 5.8%
 
 
Boeing Co. (The)
34,292

$
8,717,369

HEICO Corp., Class A(1) 
190,863

14,543,761

L3 Technologies, Inc.(1) 
39,290

7,403,415

Textron, Inc.(1) 
126,674

6,825,195

 
 
37,489,740

Air Freight and Logistics — 0.9%
 
 
United Parcel Service, Inc., Class B
48,520

5,826,767

Airlines — 2.2%
 
 
Alaska Air Group, Inc.
77,090

5,879,654

Southwest Airlines Co.(1) 
148,120

8,291,758

 
 
14,171,412

Auto Components — 1.0%
 
 
Lear Corp.(1) 
38,690

6,696,465

Automobiles — 0.8%
 
 
Ford Motor Co.
308,290

3,690,231

Honda Motor Co. Ltd. ADR
61,740

1,825,035

 
 
5,515,266

Banks — 3.8%
 
 
Bank of the Ozarks, Inc.(1) 
158,180

7,600,549

BB&T Corp.
113,990

5,350,691

PNC Financial Services Group, Inc. (The)
21,500

2,897,555

SunTrust Banks, Inc.
62,870

3,757,740

U.S. Bancorp
57,260

3,068,563

Wells Fargo & Co.
36,460

2,010,769

 
 
24,685,867

Beverages — 1.5%
 
 
Boston Beer Co., Inc. (The), Class A(2) 
31,370

4,899,994

Brown-Forman Corp., Class B
89,628

4,866,800

 
 
9,766,794

Biotechnology — 0.3%
 
 
Gilead Sciences, Inc.
27,702

2,244,416

Building Products — 0.2%
 
 
Johnson Controls International plc
24,760

997,580

Capital Markets — 0.5%
 
 
AllianceBernstein Holding LP
142,550

3,463,965

Commercial Services and Supplies — 0.7%
 
 
UniFirst Corp.
29,390

4,452,585

Consumer Finance — 1.8%
 
 
Discover Financial Services(1) 
177,220

11,427,146

Containers and Packaging — 2.1%
 
 
Bemis Co., Inc.
51,250

2,335,462

Crown Holdings, Inc.(2) 
42,830

2,557,808

Graphic Packaging Holding Co.(1) 
604,460

8,432,217

 
 
13,325,487


6

 
Shares/
Principal Amount
Value
Electric Utilities — 4.1%
 
 
Edison International
81,808

$
6,313,123

Eversource Energy
53,180

3,214,199

PG&E Corp.(1) 
159,396

10,853,274

Pinnacle West Capital Corp.
34,720

2,935,923

Westar Energy, Inc.
63,130

3,131,248

 
 
26,447,767

Electrical Equipment — 1.4%
 
 
Eaton Corp. plc
54,400

4,177,376

Hubbell, Inc.
43,685

5,068,334

 
 
9,245,710

Electronic Equipment, Instruments and Components — 1.2%
 
 
Keysight Technologies, Inc.(2) 
47,408

1,975,017

TE Connectivity Ltd.
70,690

5,871,512

 
 
7,846,529

Energy Equipment and Services — 2.4%
 
 
National Oilwell Varco, Inc.
117,290

4,190,772

Schlumberger Ltd.(1) 
159,387

11,118,837

 
 
15,309,609

Equity Real Estate Investment Trusts (REITs) — 1.1%
 
 
American Tower Corp.(1) 
51,070

6,980,248

Food and Staples Retailing — 4.1%
 
 
CVS Health Corp.
99,050

8,054,746

Wal-Mart Stores, Inc.(1) 
234,430

18,318,360

 
 
26,373,106

Food Products — 2.6%
 
 
Conagra Brands, Inc.
95,740

3,230,267

General Mills, Inc.(1) 
233,350

12,078,196

Mondelez International, Inc., Class A
43,210

1,756,919

 
 
17,065,382

Gas Utilities — 0.9%
 
 
Atmos Energy Corp.
30,980

2,597,363

Spire, Inc.
42,115

3,143,885

 
 
5,741,248

Health Care Equipment and Supplies — 3.5%
 
 
Medtronic plc
130,070

10,115,544

STERIS plc
63,720

5,632,848

Zimmer Biomet Holdings, Inc.
58,707

6,874,002

 
 
22,622,394

Health Care Providers and Services — 1.6%
 
 
Express Scripts Holding Co.(2) 
88,700

5,616,484

McKesson Corp.
16,710

2,566,823

Universal Health Services, Inc., Class B
16,930

1,878,214

 
 
10,061,521

Hotels, Restaurants and Leisure — 0.4%
 
 
McDonald's Corp.
14,950

2,342,366

Household Durables — 1.0%
 
 
PulteGroup, Inc.(1) 
234,123

6,398,581

Household Products — 0.5%
 
 
Procter & Gamble Co. (The)
32,340

2,942,293


7

 
Shares/
Principal Amount
Value
Insurance — 4.7%
 
 
Chubb Ltd.
73,232

$
10,439,222

EMC Insurance Group, Inc.
40,637

1,143,931

Marsh & McLennan Cos., Inc.
67,552

5,661,533

MetLife, Inc.(1) 
163,883

8,513,722

ProAssurance Corp.
81,969

4,479,606

 
 
30,238,014

Internet Software and Services — 0.6%
 
 
Alphabet, Inc., Class C(2) 
3,900

3,740,529

Machinery — 5.7%
 
 
Crane Co.(1) 
121,360

9,707,586

Cummins, Inc.
66,420

11,160,553

Dover Corp.
87,189

7,968,203

Parker-Hannifin Corp.
16,040

2,807,321

Timken Co. (The)
113,453

5,508,143

 
 
37,151,806

Multiline Retail — 0.6%
 
 
Dollar General Corp.
48,680

3,945,514

Oil, Gas and Consumable Fuels — 10.2%
 
 
Anadarko Petroleum Corp.
54,850

2,679,422

Enterprise Products Partners LP
126,930

3,309,065

EQT Corp.
43,036

2,807,669

EQT Midstream Partners LP
31,640

2,372,051

Hess Midstream Partners LP
35,930

789,382

Imperial Oil Ltd.
30,830

984,710

Royal Dutch Shell plc, Class A ADR
872,401

52,850,053

 
 
65,792,352

Pharmaceuticals — 0.8%
 
 
Pfizer, Inc.
151,629

5,413,155

Road and Rail — 1.6%
 
 
Norfolk Southern Corp.
24,720

3,268,973

Union Pacific Corp.
59,540

6,904,854

 
 
10,173,827

Semiconductors and Semiconductor Equipment — 2.4%
 
 
Applied Materials, Inc.
70,060

3,649,425

Lam Research Corp.
20,720

3,834,029

Maxim Integrated Products, Inc.(1) 
99,970

4,769,569

QUALCOMM, Inc.
69,700

3,613,248

 
 
15,866,271

Software — 0.5%
 
 
Microsoft Corp.
47,306

3,523,824

Specialty Retail — 1.7%
 
 
AutoZone, Inc.(2) 
7,800

4,641,858

L Brands, Inc.
155,400

6,466,194

 
 
11,108,052

Technology Hardware, Storage and Peripherals — 0.4%
 
 
Apple, Inc.
16,930

2,609,252

Textiles, Apparel and Luxury Goods — 3.0%
 
 
Burberry Group plc
210,490

4,964,194

Hanesbrands, Inc.
138,060

3,401,798


8

 
Shares/
Principal Amount
Value
Michael Kors Holdings Ltd.(2) 
60,440

$
2,892,054

Wolverine World Wide, Inc.
277,460

8,004,721

 
 
19,262,767

Trading Companies and Distributors — 2.0%
 
 
MSC Industrial Direct Co., Inc., Class A
46,930

3,546,500

W.W. Grainger, Inc.(1) 
50,920

9,152,870

 
 
12,699,370

TOTAL COMMON STOCKS
(Cost $446,457,441)
 
520,964,977

EXCHANGE-TRADED FUNDS — 9.2%
 
 
Consumer Discretionary Select Sector SPDR Fund
225,723

20,333,128

iShares Russell 1000 Value ETF
190,270

22,548,898

iShares U.S. Real Estate ETF
211,030

16,857,076

TOTAL EXCHANGE-TRADED FUNDS
(Cost $56,975,065)
 
59,739,102

CONVERTIBLE BONDS — 6.5%
 
 
Semiconductors and Semiconductor Equipment — 6.5%
 
 
Intel Corp., 3.49%, 12/15/35(2)
$
18,562,000

26,450,850

Microchip Technology, Inc., 1.625%, 2/15/25(2)
8,752,000

15,316,000

TOTAL CONVERTIBLE BONDS
(Cost $32,754,459)
 
41,766,850

TEMPORARY CASH INVESTMENTS — 2.0%
 
 
Repurchase Agreement, BMO Capital Markets Corp., (collateralized by various U.S. Treasury obligations, 0.125% - 3.875%, 6/30/18 - 11/15/46, valued at $7,080,087), in a joint trading account at 0.95%, dated 9/29/17, due 10/2/17 (Delivery value $6,942,928)
 
6,942,378

Repurchase Agreement, Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 2.00%, 11/15/26, valued at $6,223,289), at 0.34%, dated 9/29/17, due 10/2/17 (Delivery value $6,098,173)
 
6,098,000

TOTAL TEMPORARY CASH INVESTMENTS
(Cost $13,040,378)
 
13,040,378

TOTAL INVESTMENT SECURITIES BEFORE SECURITIES SOLD SHORT — 98.3%
(Cost $549,227,343)
635,511,307

SECURITIES SOLD SHORT — (96.4)%
 
 
COMMON STOCKS SOLD SHORT — (86.9)%
 
 
Aerospace and Defense — (5.8)%
 
 
General Dynamics Corp.
(33,330
)
(6,851,981
)
HEICO Corp.
(163,936
)
(14,723,092
)
Lockheed Martin Corp.
(8,830
)
(2,739,861
)
Northrop Grumman Corp.
(15,117
)
(4,349,463
)
Raytheon Co.
(28,160
)
(5,254,093
)
Rolls-Royce Holdings plc
(324,610
)
(3,858,248
)
 
 
(37,776,738
)
Air Freight and Logistics — (0.9)%
 
 
FedEx Corp.
(25,750
)
(5,808,685
)
Airlines — (2.2)%
 
 
American Airlines Group, Inc.
(297,070
)
(14,107,854
)
Automobiles — (0.9)%
 
 
General Motors Co.
(137,467
)
(5,550,917
)
Banks — (3.8)%
 
 
KeyCorp
(391,928
)
(7,376,085
)
 
 
 

9

 
Shares/
Principal Amount
Value
M&T Bank Corp.
(19,690
)
$
(3,170,878
)
People's United Financial, Inc.
(202,756
)
(3,677,994
)
Regions Financial Corp.
(247,540
)
(3,770,034
)
Zions BanCorp.
(142,350
)
(6,716,073
)
 
 
(24,711,064
)
Beverages — (1.5)%
 
 
Brown-Forman Corp., Class A
(85,930
)
(4,785,442
)
Constellation Brands, Inc., Class A
(24,960
)
(4,978,272
)
 
 
(9,763,714
)
Biotechnology — (0.4)%
 
 
Celgene Corp.
(15,920
)
(2,321,454
)
Capital Markets — (1.0)%
 
 
Eaton Vance Corp.
(72,600
)
(3,584,262
)
FactSet Research Systems, Inc.
(16,090
)
(2,897,970
)
 
 
(6,482,232
)
Commercial Services and Supplies — (0.7)%
 
 
Cintas Corp.
(31,745
)
(4,580,168
)
Consumer Finance — (1.8)%
 
 
Capital One Financial Corp.
(134,950
)
(11,424,867
)
Containers and Packaging — (2.0)%
 
 
Ball Corp.
(321,320
)
(13,270,516
)
Diversified Financial Services — (0.7)%
 
 
Berkshire Hathaway, Inc., Class B
(24,194
)
(4,435,244
)
Electric Utilities — (1.3)%
 
 
American Electric Power Co., Inc.
(73,960
)
(5,194,950
)
Southern Co. (The)
(64,913
)
(3,189,825
)
 
 
(8,384,775
)
Electrical Equipment — (1.0)%
 
 
Sensata Technologies Holding NV
(138,080
)
(6,637,506
)
Electronic Equipment, Instruments and Components — (1.2)%
 
 
Amphenol Corp., Class A
(70,390
)
(5,957,810
)
National Instruments Corp.
(47,700
)
(2,011,509
)
 
 
(7,969,319
)
Energy Equipment and Services — (2.4)%
 
 
Halliburton Co.
(334,221
)
(15,384,193
)
Equity Real Estate Investment Trusts (REITs) — (3.7)%
 
 
AvalonBay Communities, Inc.
(25,350
)
(4,522,947
)
Crown Castle International Corp.
(70,268
)
(7,025,394
)
Equity Residential
(57,990
)
(3,823,281
)
Essex Property Trust, Inc.
(17,440
)
(4,430,283
)
Simon Property Group, Inc.
(25,270
)
(4,068,723
)
 
 
(23,870,628
)
Food and Staples Retailing — (4.1)%
 
 
Costco Wholesale Corp.
(112,960
)
(18,558,198
)
Walgreens Boots Alliance, Inc.
(101,980
)
(7,874,896
)
 
 
(26,433,094
)
Food Products — (2.6)%
 
 
Kraft Heinz Co. (The)
(217,923
)
(16,899,929
)
Health Care Equipment and Supplies — (3.5)%
 
 
Becton Dickinson and Co.
(20,290
)
(3,975,825
)

10

 
Shares/
Principal Amount
Value
Boston Scientific Corp.
(191,800
)
$
(5,594,806
)
Stryker Corp.
(92,840
)
(13,185,137
)
 
 
(22,755,768
)
Health Care Providers and Services — (1.6)%
 
 
Acadia Healthcare Co., Inc.
(39,970
)
(1,908,967
)
AmerisourceBergen Corp., Class A
(58,800
)
(4,865,700
)
Centene Corp.
(34,940
)
(3,381,144
)
 
 
(10,155,811
)
Hotels, Restaurants and Leisure — (0.8)%
 
 
Chipotle Mexican Grill, Inc.
(8,220
)
(2,530,363
)
Wendy's Co. (The)
(154,280
)
(2,395,968
)
 
 
(4,926,331
)
Household Durables — (1.0)%
 
 
Toll Brothers, Inc.
(154,940
)
(6,425,362
)
Household Products — (0.5)%
 
 
Reckitt Benckiser Group plc
(32,760
)
(2,990,797
)
Industrial Conglomerates — (0.9)%
 
 
General Electric Co.
(244,760
)
(5,918,297
)
Insurance — (3.9)%
 
 
Aon plc
(38,340
)
(5,601,474
)
Prudential Financial, Inc.
(78,913
)
(8,390,030
)
Travelers Cos., Inc. (The)
(93,420
)
(11,445,818
)
 
 
(25,437,322
)
Internet and Direct Marketing Retail — (1.1)%
 
 
Amazon.com, Inc.
(7,340
)
(7,056,309
)
Machinery — (6.4)%
 
 
Caterpillar, Inc.
(63,770
)
(7,952,757
)
CNH Industrial NV
(531,430
)
(6,382,474
)
Deere & Co.
(71,550
)
(8,985,964
)
Illinois Tool Works, Inc.
(18,630
)
(2,756,495
)
RBC Bearings, Inc.
(44,990
)
(5,630,498
)
Xylem, Inc.
(153,950
)
(9,641,889
)
 
 
(41,350,077
)
Multi-Utilities — (1.0)%
 
 
Consolidated Edison, Inc.
(37,950
)
(3,061,806
)
Dominion Energy, Inc.
(40,930
)
(3,148,745
)
 
 
(6,210,551
)
Multiline Retail — (0.6)%
 
 
Dollar Tree, Inc.
(44,950
)
(3,902,559
)
Oil, Gas and Consumable Fuels — (8.4)%
 
 
Chevron Corp.
(8,740
)
(1,026,950
)
Exxon Mobil Corp.
(137,550
)
(11,276,349
)
Royal Dutch Shell plc, Class B ADR
(594,980
)
(37,210,049
)
Valero Energy Corp.
(61,130
)
(4,702,731
)
 
 
(54,216,079
)
Pharmaceuticals — (0.8)%
 
 
AstraZeneca plc ADR
(108,662
)
(3,681,469
)
Merck & Co., Inc.
(26,610
)
(1,703,838
)
 
 
(5,385,307
)

11

 
Shares/
Principal Amount
Value
Road and Rail — (4.3)%
 
 
Avis Budget Group, Inc.
(463,234
)
$
(17,630,686
)
CSX Corp.
(188,040
)
(10,203,050
)
 
 
(27,833,736
)
Semiconductors and Semiconductor Equipment — (7.2)%
 
 
Broadcom Ltd.
(26,050
)
(6,318,167
)
Intel Corp.
(651,010
)
(24,790,461
)
Microchip Technology, Inc.
(169,900
)
(15,253,622
)
 
 
(46,362,250
)
Specialty Retail — (1.1)%
 
 
Murphy USA, Inc.
(65,560
)
(4,523,640
)
Tiffany & Co.
(31,079
)
(2,852,431
)
 
 
(7,376,071
)
Technology Hardware, Storage and Peripherals — (0.3)%
 
 
HP, Inc.
(109,580
)
(2,187,217
)
Textiles, Apparel and Luxury Goods — (3.5)%
 
 
lululemon athletica, Inc.
(172,482
)
(10,737,004
)
LVMH Moet Hennessy Louis Vuitton SE
(17,740
)
(4,894,726
)
NIKE, Inc., Class B
(136,856
)
(7,095,984
)
 
 
(22,727,714
)
Trading Companies and Distributors — (2.0)%
 
 
Fastenal Co.
(281,840
)
(12,846,267
)
TOTAL COMMON STOCKS SOLD SHORT
(Proceeds $509,893,727)
 
(561,876,722
)
EXCHANGE-TRADED FUNDS SOLD SHORT — (9.5)%
 
 
Alerian MLP ETF
(574,226
)
(6,442,816
)
iShares Russell 1000 Growth ETF
(157,690
)
(19,720,711
)
iShares U.S. Oil & Gas Exploration & Production ETF
(46,470
)
(2,730,113
)
SPDR S&P Oil & Gas Exploration & Production ETF
(79,260
)
(2,701,973
)
Technology Select Sector SPDR Fund
(201,270
)
(11,895,057
)
Utilities Select Sector SPDR Fund
(334,400
)
(17,739,920
)
TOTAL EXCHANGE-TRADED FUNDS SOLD SHORT
(Proceeds $60,040,822)
 
(61,230,590
)
TOTAL SECURITIES SOLD SHORT — (96.4)%
(Proceeds $569,934,549)
 
(623,107,312
)
OTHER ASSETS AND LIABILITIES(3) — 98.1%
 
634,174,508

TOTAL NET ASSETS — 100.0%
 
$
646,578,503


NOTES TO SCHEDULE OF INVESTMENTS
ADR
-
American Depositary Receipt
(1)
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 $142,383,832.
(2)
Non-income producing.
(3)
Amount relates primarily to deposits for securities sold short at period end.

See Notes to Financial Statements.


12

Statement of Assets and Liabilities
SEPTEMBER 30, 2017 (UNAUDITED)
 
Assets
 
Investment securities, at value (cost of $549,227,343)
$
635,511,307

Cash
20,484

Deposits for securities sold short
638,202,768

Receivable for investments sold
9,166,296

Receivable for capital shares sold
1,011,498

Dividends and interest receivable
1,182,222

 
1,285,094,575

 
 
Liabilities
 
Securities sold short, at value (proceeds of $569,934,549)
623,107,312

Payable for investments purchased
9,986,451

Payable for capital shares redeemed
4,183,947

Accrued management fees
854,374

Distribution and service fees payable
27,793

Dividend expense payable on securities sold short
356,195

 
638,516,072

 
 
Net Assets
$
646,578,503

 
 
Net Assets Consist of:
 
Capital (par value and paid-in surplus)
$
648,297,955

Accumulated net investment loss
(4,558,427
)
Accumulated net realized loss
(30,273,074
)
Net unrealized appreciation
33,112,049

 
$
646,578,503


 
Net Assets
Shares Outstanding
Net Asset Value
Per Share
Investor Class, $0.01 Par Value

$328,899,929

30,966,976

$10.62
I Class, $0.01 Par Value

$272,193,876

25,291,264

$10.76
A Class, $0.01 Par Value

$15,878,184

1,517,669

$10.46*
C Class, $0.01 Par Value

$29,535,254

2,960,582

$9.98
R Class, $0.01 Par Value

$71,260

6,919

$10.30
*Maximum offering price $11.10 (net asset value divided by 0.9425).


See Notes to Financial Statements.


13

Statement of Operations
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2017 (UNAUDITED)
 
Investment Income (Loss)
 
Income:
 
Dividends (net of foreign taxes withheld of $105,009)
$
7,179,816

Interest
2,038,869

 
9,218,685

 
 
Expenses:
 
Dividend expense on securities sold short
7,903,786

Management fees
6,313,007

Distribution and service fees:
 
A Class
41,084

C Class
162,747

R Class
200

Directors' fees and expenses
11,639

Other expenses
522

 
14,432,985

Fees waived(1)
(862,512
)
 
13,570,473

 
 
Net investment income (loss)
(4,351,788
)
 
 
Realized and Unrealized Gain (Loss)
 
Net realized gain (loss) on:
 
Investment transactions
28,968,341

Securities sold short transactions
(34,144,983
)
Forward foreign currency exchange contract transactions
(67,115
)
Foreign currency translation transactions
(10,351
)
 
(5,254,108
)
 
 
Change in net unrealized appreciation (depreciation) on:
 
Investments
16,190,582

Securities sold short
(16,341,504
)
Forward foreign currency exchange contracts
(129,692
)
Translation of assets and liabilities in foreign currencies
1,347

 
(279,267
)
 
 
Net realized and unrealized gain (loss)
(5,533,375
)
 
 
Net Increase (Decrease) in Net Assets Resulting from Operations
$
(9,885,163
)

(1)
Amount consists of $478,034, $302,607, $41,084, $40,687 and $100 for Investor Class, I Class, A Class, C Class and R Class, respectively.


See Notes to Financial Statements.


14

Statement of Changes in Net Assets
SIX MONTHS ENDED SEPTEMBER 30, 2017 (UNAUDITED) AND YEAR ENDED MARCH 31, 2017
Increase (Decrease) in Net Assets
September 30, 2017
March 31, 2017
Operations
 
 
Net investment income (loss)
$
(4,351,788
)
$
(11,700,373
)
Net realized gain (loss)
(5,254,108
)
12,486,197

Change in net unrealized appreciation (depreciation)
(279,267
)
18,412,884

Net increase (decrease) in net assets resulting from operations
(9,885,163
)
19,198,708

 
 
 
Distributions to Shareholders
 
 
From net realized gains:
 
 
Investor Class
—

(10,130,104
)
I Class
—

(4,651,007
)
A Class
—

(3,199,654
)
C Class
—

(920,441
)
R Class
—

(3,174
)
Decrease in net assets from distributions
—

(18,904,380
)
 
 
 
Capital Share Transactions
 
 
Net increase (decrease) in net assets from capital share transactions (Note 5)
(89,921,642
)
270,349,369

 
 
 
Net increase (decrease) in net assets
(99,806,805
)
270,643,697

 
 
 
Net Assets
 
 
Beginning of period
746,385,308

475,741,611

End of period
$
646,578,503

$
746,385,308

 
 
 
Accumulated net investment loss
$
(4,558,427
)
$
(206,639
)


See Notes to Financial Statements.


15

Notes to Financial Statements

SEPTEMBER 30, 2017 (UNAUDITED)

1. Organization

American Century Capital Portfolios, 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 Market Neutral Value 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, independent of equity market conditions.

The fund offers the Investor Class, I Class (formerly Institutional 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.
 
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 and convertible bonds 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.

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. 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.
 
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

16

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. If significant fluctuations in foreign markets are identified, 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 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.

Segregated Assets — In accordance with the 1940 Act, the fund segregates assets on its books and records to cover certain types of investments, including, but not limited to, futures contracts and short sales. 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 margin requirements on futures contracts and short sales.

Repurchase Agreements — The fund may enter into repurchase agreements with institutions that ACIM 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.


17

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.

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.

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. During the period ended September 30, 2017, the investment advisor agreed to waive 0.25% of the fund's management fee. The investment advisor expects this waiver to continue until July 31, 2018 and cannot terminate it prior to such date without the approval of the Board of Directors.

The annual management fee and the effective annual management fee after waiver for each class for the period ended September 30, 2017 are as follows:
 
Annual
Management Fee
Effective Annual Management Fee
After Waiver
Investor Class
1.90%
1.65%
I Class
1.70%
1.45%
A Class
1.90%
1.65%
C Class
1.90%
1.65%
R Class
1.90%
1.65%


18

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 September 30, 2017 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.
 
Acquired Fund Fees and Expenses — The fund may invest in mutual funds, exchange-traded funds, and business development companies (the acquired funds). The fund will indirectly realize its pro rata share of the fees and expenses of the acquired funds in which it invests. These indirect fees and expenses are not paid out of the fund's assets but are reflected in the return realized by the fund on its investment in the acquired funds.

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 $8,958,080 and $11,960,638, respectively. The effect of interfund transactions on the Statement of Operations was $731,531 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 September 30, 2017 were $901,319,296 and $898,984,098, respectively.


19

5. Capital Share Transactions

Transactions in shares of the fund were as follows:
 
Six months ended
September 30, 2017
Year ended
March 31, 2017
 
Shares
Amount
Shares
Amount
Investor Class/Shares Authorized
240,000,000

 
160,000,000

 
Sold
12,264,802

$
130,464,918

38,163,480

$
409,848,107

Issued in reinvestment of distributions
—

—

953,814

10,053,201

Redeemed
(20,316,593
)
(214,831,317
)
(23,759,846
)
(254,452,883
)
 
(8,051,791
)
(84,366,399
)
15,357,448

165,448,425

I Class/Shares Authorized
150,000,000

 
60,000,000

 
Sold
13,627,120

145,639,248

12,817,012

139,407,265

Issued in reinvestment of distributions
—

—

369,477

3,938,624

Redeemed
(5,293,575
)
(56,766,886
)
(7,696,378
)
(83,354,520
)
 
8,333,545

88,872,362

5,490,111

59,991,369

A Class/Shares Authorized
70,000,000

 
50,000,000

 
Sold
532,601

5,563,045

7,205,999

76,907,509

Issued in reinvestment of distributions
—

—

307,598

3,199,016

Redeemed
(9,065,043
)
(95,168,621
)
(4,685,220
)
(49,611,414
)
 
(8,532,442
)
(89,605,576
)
2,828,377

30,495,111

C Class/Shares Authorized
25,000,000

 
15,000,000

 
Sold
193,679

1,948,184

2,091,153

21,387,959

Issued in reinvestment of distributions
—

—

91,952

917,682

Redeemed
(674,191
)
(6,720,348
)
(782,225
)
(7,938,502
)
 
(480,512
)
(4,772,164
)
1,400,880

14,367,139

R Class/Shares Authorized
10,000,000

 
10,000,000

 
Sold
2,066

21,226

6,544

68,556

Issued in reinvestment of distributions
—

—

309

3,174

Redeemed
(6,898
)
(71,091
)
(2,337
)
(24,405
)
 
(4,832
)
(49,865
)
4,516

47,325

Net increase (decrease)
(8,736,032
)
$
(89,921,642
)
25,081,332

$
270,349,369


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. There were no significant transfers between levels during the period.


20

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
$
516,000,783

$
4,964,194

—

Exchange-Traded Funds
59,739,102

—

—

Convertible Bonds
—

41,766,850

—

Temporary Cash Investments
—

13,040,378

—

 
$
575,739,885

$
59,771,422

—

      
 
 
 
Liabilities
 
 
 
Securities Sold Short
 
 
 
Common Stocks
$
550,132,951

$
11,743,771

—

Exchange-Traded Funds
61,230,590

—

—

 
$
611,363,541

$
11,743,771

—

 
7. Derivative Instruments

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. 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 $31,568,943.

At period end, the fund did not have any derivative instruments disclosed on the Statement of Assets and Liabilities. For the six months ended September 30, 2017, the effect of foreign currency risk derivative instruments on the Statement of Operations was $(67,115) in net realized gain (loss) on forward foreign currency exchange contract transactions and $(129,692) in change in net unrealized appreciation (depreciation) on forward foreign currency exchange contracts.

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.

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.

There are certain risks involved in investing in foreign securities. These risks include those resulting from future adverse political, social and economic developments, fluctuations in currency exchange rates, the possible imposition of exchange controls, and other foreign laws or restrictions.


21

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
$
559,574,079

Gross tax appreciation of investments
$
79,647,681

Gross tax depreciation of investments
(3,710,453
)
Net tax appreciation (depreciation) of investments
75,937,228

Gross tax appreciation on securities sold short
10,187,077

Gross tax depreciation on securities sold short
(80,587,007
)
Net tax appreciation (depreciation)
$
5,537,298


The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales.

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. Management is currently evaluating the impact that adopting ASU 2017-08 will have on the financial statements.


22

Financial Highlights
For a Share Outstanding Throughout the Years Ended March 31 (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(3)
Operating
Expenses
(before
expense
waiver)(3)
Operating
Expenses
(excluding
expenses on
securities
sold short)(3)
Net
Investment
Income
(Loss)
Net
Investment
Income
(Loss)
(before
expense
waiver)
Portfolio
Turnover
Rate
Net
Assets,
End of
Period
(in thousands)
Investor Class
 
 
 
 
 
 
 
 
 
 
 
 
 
2017(4)
$10.76
(0.07)
(0.07)
(0.14)
—
$10.62
(1.30)%
3.94%(5)
4.19%(5)
1.65%(5)
(1.27)%(5)
(1.52)%(5)
135%

$328,900

2017
$10.73
(0.18)
0.49
0.31
(0.28)
$10.76
2.97%
3.68%
3.94%
1.64%
(1.65)%
(1.91)%
374%

$419,925

2016
$10.44
(0.19)
0.65
0.46
(0.17)
$10.73
4.42%
3.78%
4.08%
1.61%
(1.82)%
(2.12)%
679%

$253,885

2015
$10.22
(0.20)
0.62
0.42
(0.20)
$10.44
4.10%
3.88%
4.18%
1.60%
(1.95)%
(2.25)%
447%

$49,465

2014
$10.25
(0.04)
0.21
0.17
(0.20)
$10.22
1.69%
4.09%
4.39%
1.60%
(0.35)%
(0.65)%
521%

$49,665

2013
$10.32
(0.25)
0.52
0.27
(0.34)
$10.25
2.61%
4.74%
5.04%
1.60%
(2.46)%
(2.76)%
588%

$8,214

I Class(6)
 
 
 
 
 
 
 
 
 
 
 
 
 
2017(4)
$10.89
(0.05)
(0.08)
(0.13)
—
$10.76
(1.19)%
3.74%(5)
3.99%(5)
1.45%(5)
(1.07)%(5)
(1.32)%(5)
135%

$272,194

2017
$10.83
(0.16)
0.50
0.34
(0.28)
$10.89
3.23%
3.48%
3.74%
1.44%
(1.45)%
(1.71)%
374%

$184,717

2016
$10.52
(0.16)
0.64
0.48
(0.17)
$10.83
4.58%
3.58%
3.88%
1.41%
(1.62)%
(1.92)%
679%

$124,249

2015
$10.28
(0.18)
0.62
0.44
(0.20)
$10.52
4.28%
3.68%
3.98%
1.40%
(1.75)%
(2.05)%
447%

$6,013

2014
$10.28
0.11
0.09
0.20
(0.20)
$10.28
1.98%
3.89%
4.19%
1.40%
(0.15)%
(0.45)%
521%

$5,714

2013
$10.33
(0.24)
0.53
0.29
(0.34)
$10.28
2.81%
4.54%
4.84%
1.40%
(2.26)%
(2.56)%
588%

$425



For a Share Outstanding Throughout the Years Ended March 31 (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(3)
Operating
Expenses
(before
expense
waiver)(3)
Operating
Expenses
(excluding
expenses on
securities
sold short)(3)
Net
Investment
Income
(Loss)
Net
Investment
Income
(Loss)
(before
expense
waiver)
Portfolio
Turnover
Rate
Net
Assets,
End of
Period
(in thousands)
A Class
 
 
 
 
 
 
 
 
 
 
 
 
 
2017(4)
$10.61
(0.08)
(0.07)
(0.15)
—
$10.46
(1.41)%
4.19%(5)
4.44%(5)
1.90%(5)
(1.52)%(5)
(1.77)%(5)
135%

$15,878

2017
$10.61
(0.20)
0.48
0.28
(0.28)
$10.61
2.72%
3.93%
4.19%
1.89%
(1.90)%
(2.16)%
374%

$106,662

2016
$10.36
(0.22)
0.64
0.42
(0.17)
$10.61
4.07%
4.03%
4.33%
1.86%
(2.07)%
(2.37)%
679%

$76,630

2015
$10.16
(0.23)
0.63
0.40
(0.20)
$10.36
3.93%
4.13%
4.43%
1.85%
(2.20)%
(2.50)%
447%

$9,311

2014
$10.21
(0.07)
0.22
0.15
(0.20)
$10.16
1.50%
4.34%
4.64%
1.85%
(0.60)%
(0.90)%
521%

$13,640

2013
$10.31
(0.28)
0.52
0.24
(0.34)
$10.21
2.32%
4.99%
5.29%
1.85%
(2.71)%
(3.01)%
588%

$2,265

C Class
 
 
 
 
 
 
 
 
 
 
 
 
 
2017(4)
$10.16
(0.11)
(0.07)
(0.18)
—
$9.98
(1.77)%
4.94%(5)
5.19%(5)
2.65%(5)
(2.27)%(5)
(2.52)%(5)
135%

$29,535

2017
$10.24
(0.27)
0.47
0.20
(0.28)
$10.16
2.03%
4.68%
4.94%
2.64%
(2.65)%
(2.91)%
374%

$34,958

2016
$10.08
(0.29)
0.62
0.33
(0.17)
$10.24
3.28%
4.78%
5.08%
2.61%
(2.82)%
(3.12)%
679%

$20,902

2015
$9.97
(0.30)
0.61
0.31
(0.20)
$10.08
3.10%
4.88%
5.18%
2.60%
(2.95)%
(3.25)%
447%

$7,948

2014
$10.10
(0.14)
0.21
0.07
(0.20)
$9.97
0.72%
5.09%
5.39%
2.60%
(1.35)%
(1.65)%
521%

$6,844

2013
$10.28
(0.35)
0.51
0.16
(0.34)
$10.10
1.54%
5.74%
6.04%
2.60%
(3.46)%
(3.76)%
588%

$1,111



For a Share Outstanding Throughout the Years Ended March 31 (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(3)
Operating
Expenses
(before
expense
waiver)(3)
Operating
Expenses
(excluding
expenses on
securities
sold short)(3)
Net
Investment
Income
(Loss)
Net
Investment
Income
(Loss)
(before
expense
waiver)
Portfolio
Turnover
Rate
Net
Assets,
End of
Period
(in thousands)
R Class
 
 
 
 
 
 
 
 
 
 
 
 
 
2017(4)
$10.46
(0.10)
(0.06)
(0.16)
—
$10.30
(1.53)%
4.44%(5)
4.69%(5)
2.15%(5)
(1.77)%(5)
(2.02)%(5)
135%

$71

2017
$10.49
(0.22)
0.47
0.25
(0.28)
$10.46
2.47%
4.18%
4.44%
2.14%
(2.15)%
(2.41)%
374%

$123

2016
$10.26
(0.21)
0.61
0.40
(0.17)
$10.49
3.91%
4.28%
4.58%
2.11%
(2.32)%
(2.62)%
679%

$76

2015
$10.10
(0.25)
0.61
0.36
(0.20)
$10.26
3.56%
4.38%
4.68%
2.10%
(2.45)%
(2.75)%
447%

$447

2014
$10.17
(0.18)
0.31
0.13
(0.20)
$10.10
1.21%
4.59%
4.89%
2.10%
(0.85)%
(1.15)%
521%

$427

2013
$10.30
(0.31)
0.52
0.21
(0.34)
$10.17
2.13%
5.24%
5.54%
2.10%
(2.96)%
(3.26)%
588%

$421

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)
Ratio of operating expenses to average net assets does not include any fees and expenses of the acquired funds.
(4)
Six months ended September 30, 2017 (unaudited).
(5)
Annualized.
(6)
Prior to April 10, 2017, the I Class was referred to as the Institutional Class.

See Notes to Financial Statements.


Approval of Management Agreement


At a meeting held on June 29, 2017, the Fund’s Board of Directors (the "Board") unanimously approved the renewal of the management agreement pursuant to which American Century Investment Management, Inc. (the “Advisor”) acts as the investment advisor for the Fund. Under Section 15(c) of the Investment Company Act, contracts for investment advisory services are required to be reviewed, evaluated, and approved by a majority of a fund’s directors (the “Directors”), including a majority of the independent Directors, each year.
    
Prior to its consideration of the renewal of the management agreement, the Directors requested and reviewed extensive data and information compiled by the Advisor and certain independent providers of evaluation data concerning the Fund and the services provided to the Fund by the Advisor. This review was in addition to the oversight and evaluation undertaken by the Board and its committees on a continual basis and the information received was supplemental to the extensive information that the Board and its committees receive and consider throughout the year.

In connection with its consideration of the renewal of the management agreement, the Board’s review and evaluation of the services provided by the Advisor included, but was not limited to, the following:

•
the nature, extent, and quality of investment management, shareholder services, and other services provided and to be provided to the Fund;
•
the wide range of other programs and services provided and to be provided to the Fund and its shareholders on a routine and non-routine basis;
•
the investment performance of the Fund, including data comparing the Fund's performance to appropriate benchmarks and/or a peer group of other mutual funds with similar investment objectives and strategies;
•
the cost of owning the Fund compared to the cost of owning similar funds;
•
the compliance policies, procedures, and regulatory experience of the Advisor and the Fund's service providers;
•
financial data showing the cost of services provided to the Fund, the profitability of the Fund to the Advisor, and the overall profitability of the Advisor;
•
strategic plans of the Advisor
•
possible economies of scale associated with the Advisor’s management of the Fund and other accounts under its management;
•
data comparing services provided and charges to the Advisor's other investment management clients;
•
acquired fund fees and expenses;
•
payments and practices by the Fund and the Advisor regarding financial intermediaries, the nature of services provided by intermediaries, and the terms of share classes utilized; and
•
any collateral benefits derived by the Advisor from the management of the Fund.

The Directors held three in-person meetings and one telephonic meeting to review and discuss the information provided. The independent Directors also reviewed responses to supplemental information requests and held active discussions with the Advisor regarding the renewal of the management agreement. The independent Directors had the benefit of the advice of their independent counsel throughout the process.

Factors Considered

The Directors considered all of the information provided by the Advisor, the independent data providers, and independent counsel in connection with the approval. They determined that the

26

information was sufficient for them to evaluate the management agreement for the Fund. In connection with their review, the Directors did not identify any single factor as being all-important or controlling, and each Director may have attributed different levels of importance to different factors. In deciding to renew the management agreement, the Board based its decision on a number of factors, including without limitation the following:

Nature, Extent and Quality of Services - Generally. Under the management agreement, the Advisor is responsible for providing or arranging for all services necessary for the operation of the Fund. The Board noted that the Advisor provides or arranges at its own expense a wide variety of services including without limitation the following:

•
portfolio research and security selection
•
securities trading
•
Fund administration
•
custody of Fund assets
•
daily valuation of the Fund’s portfolio
•
shareholder servicing and transfer agency, including shareholder confirmations, recordkeeping, and communications
•
legal services (except the independent Directors’ counsel)
•
regulatory and portfolio compliance
•
financial reporting
•
marketing and distribution (except amounts paid by the Fund under Rule 12b-1 plans)

The Board noted that many of these services have expanded over time in terms of both quantity and complexity in response to shareholder demands, competition in the industry, changing distribution channels, and the changing regulatory environment. The Board noted specifically the resources the Advisor has committed during the year to compliance with the Department of Labor fiduciary rule and share class modernization.

Investment Management Services. The nature of the investment management services provided to the Fund is quite complex and allows Fund shareholders access to professional money management, instant diversification of their investments within an asset class, the opportunity to easily diversify among asset classes by investing in or exchanging among various American Century Investments funds, and liquidity. In evaluating investment performance, the Board expects the Advisor to manage the Fund in accordance with its investment objectives and approved strategies. Further, the Directors recognize that the Advisor has an obligation to monitor trading activities, and in particular to seek the best execution of fund trades, and to evaluate the use of and payment for research. In providing these services, the Advisor utilizes teams of investment professionals (portfolio managers, analysts, research assistants, and securities traders) who require extensive information technology, research, training, compliance, and other systems to conduct their business. The Board, directly and through its Fund Performance Review Committee, provides oversight of the investment performance process. It regularly reviews investment performance information for the Fund, together with comparative information for appropriate benchmarks and/or peer groups of similarly-managed funds, over different time horizons. The Directors also review detailed performance information provided by the Advisor during the management agreement renewal process. If performance concerns are identified, the Fund receives special reviews until performance improves, during which the Board receives a report from the Advisor regarding the reasons for such results (e.g., market conditions, security selection) and any efforts being undertaken to improve performance. The Fund’s performance was above its benchmark for the one-, three-, and five-year periods reviewed by the Board. The Board found the investment management services provided by the Advisor to the Fund to be satisfactory and consistent with the management agreement.

Shareholder and Other Services. Under the management agreement, the Advisor provides the Fund with a comprehensive package of transfer agency, shareholder, and other services. The Board, directly and through various committees of the Board, regularly reviews reports and

27

evaluations of such services at its regular meetings. These reports include, but are not limited to, information regarding the operational efficiency and accuracy of the shareholder and transfer agency services provided, staffing levels, shareholder satisfaction (as measured by external as well as internal sources), technology support, new products and services offered to Fund shareholders, securities trading activities, portfolio valuation services, auditing services, and legal and operational compliance activities. Certain aspects of shareholder and transfer agency service level efficiency and the quality of securities trading activities are measured by independent third party providers and are presented in comparison to other fund groups not managed by the Advisor. The Board found the services provided by the Advisor to the Fund under the management agreement to be competitive and of high quality.

Costs of Services and Profitability. The Advisor provides detailed information concerning its cost of providing various services to the Fund, its profitability in managing the Fund (pre- and post-distribution), its overall profitability, and its financial condition. The Directors have reviewed with the Advisor the methodology used to prepare this financial information. This information is considered in evaluating the Advisor’s financial condition, its ability to continue to provide services under the management agreement, and the reasonableness of the current management fee. The Board concluded that the Advisor’s profits were reasonable in light of the services provided to the Fund.

Ethics. The Board generally considers the Advisor’s commitment to providing quality services to shareholders and to conducting its business ethically. They noted that the Advisor’s practices generally meet or exceed industry best practices.

Economies of Scale. The Board also reviewed information provided by the Advisor regarding the possible existence of economies of scale in connection with the management of the Fund. The Board concluded that economies of scale are difficult to measure and predict with precision, especially on a fund-by-fund basis. The Board concluded that the Advisor is appropriately sharing economies of scale through its competitive fee structure, offering competitive fees from fund inception, and through reinvestment in its business to provide shareholders additional content and services.

Comparison to Other Funds’ Fees. The management agreement provides that the Fund pays the Advisor a single, all-inclusive (or unified) management fee for providing all services necessary for the management and operation of the Fund, other than brokerage expenses, expenses attributable to short sales, taxes, interest, extraordinary expenses, and the fees and expenses of the Fund’s independent Directors (including their independent legal counsel) and expenses incurred in connection with the provision of shareholder services and distribution services under a plan adopted pursuant to Rule 12b-1 under the 1940 Act. Under the unified fee structure, the Advisor is responsible for providing all investment advisory, custody, audit, administrative, compliance, recordkeeping, marketing and shareholder services, or arranging and supervising third parties to provide such services. By contrast, most other funds are charged a variety of fees, including an investment advisory fee, a transfer agency fee, an administrative fee, distribution charges, and other expenses. Other than their investment advisory fees and any applicable Rule 12b-1 distribution fees, all other components of the total fees charged by these other funds may be increased without shareholder approval. The Board believes the unified fee structure is a benefit to Fund shareholders because it clearly discloses to shareholders the cost of owning Fund shares, and, since the unified fee cannot be increased without a vote of Fund shareholders, it shifts to the Advisor the risk of increased costs of operating the Fund and provides a direct incentive to minimize administrative inefficiencies. Part of the Board’s analysis of fee levels involves reviewing certain evaluative data compiled by an independent provider comparing the Fund’s unified fee to the total expense ratios of its peers. The unified fee charged to shareholders of the Fund was above the median of the total expense ratios of the Fund’s peer expense universe and was within the range of its peer expense group. The Board discussed with the Advisor the factors that impacted the level of the fee in relation to its peers and accepted the Advisor's explanation of such factors. The Board and the Advisor agreed to a temporary reduction of the Fund's annual unified management fee of 0.25% (e.g., the Investor Class unified fee will be reduced from 1.90% to

28

1.65%) for at least one year, beginning August 1, 2017. The Board concluded that the management fee paid by the Fund to the Advisor under the management agreement is reasonable in light of the services provided to the Fund.

Comparison to Fees and Services Provided to Other Clients of the Advisor. The Directors also requested and received information from the Advisor concerning the nature of the services, fees, costs, and profitability of its advisory services to advisory clients other than the Fund. They observed that these varying types of client accounts require different services and involve different regulatory and entrepreneurial risks than the management of the Fund. The Board analyzed this information and concluded that the fees charged and services provided to the Fund were reasonable by comparison.

Payments to Intermediaries. The Directors also requested and received a description of payments made to intermediaries by the Fund and the Advisor and services provided in response thereto. These payments include various payments made by the Fund or the Advisor to different types of intermediaries and recordkeepers for distribution and service activities provided for the Fund. The Board reviewed such information and received representations from the Advisor that all such payments by the Fund were made pursuant to the Fund's Rule 12b-1 Plan and that all such payments by the Advisor were made from the Advisor's resources and reasonable profits. The Board found the payments to be reasonable in scope and purpose.

Collateral or “Fall-Out” Benefits Derived by the Advisor. The Board considered the existence of collateral benefits the Advisor may receive as a result of its relationship with the Fund. They concluded that the Advisor’s primary business is managing mutual funds and it generally does not use fund or shareholder information to generate profits in other lines of business, and therefore does not derive any significant collateral benefits from them. The Board noted that additional assets from other clients may offer the Advisor some benefit from increased leverage with service providers and counterparties. Additionally, the Advisor receives proprietary research from broker-dealers that execute fund portfolio transactions, which the Board concluded is likely to benefit other clients of the Advisor, as well as Fund shareholders. The Board also determined that the Advisor is able to provide investment management services to certain clients other than the Fund, at least in part, due to its existing infrastructure built to serve the fund complex. The Board concluded that appropriate allocation methodologies had been employed to assign resources and the cost of those resources to these other clients and, where expressly provided, these other client assets may be included with the assets of the Fund to determine breakpoints in the management fee schedule.

Existing Relationship. The Board also considered whether there was any reason for not continuing the existing arrangement with the Advisor. In this regard, the Board was mindful of the potential disruptions of the Fund’s operations and various risks, uncertainties, and other effects that could occur as a result of a decision not to continue such relationship. In particular, the Board recognized that most shareholders have invested in the Fund on the strength of the Advisor’s industry standing and reputation and in the expectation that the Advisor will have a continuing role in providing advisory services to the Fund.

Conclusion of the Directors. As a result of this process, the Board, including all of the independent Directors, taking into account all of the factors discussed above and the information provided by the Advisor and others in connection with its review and throughout the year, determined that the management fee is fair and reasonable in light of the services provided and that the investment management agreement between the Fund and the Advisor should be renewed.

29

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

A description of the policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund is available without charge, upon request, by calling 1-800-345-2021. It is also available on the "About Us" page of American Century Investments’ website at americancentury.com and 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 the "About Us" page at americancentury.com. 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. The fund’s Forms N-Q are available on the SEC’s website at sec.gov, and may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. 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.

30

Notes

31

Notes


32




acihorizblkb99.jpg
 
 
 
 
Contact Us
americancentury.com
 
Automated Information Line
1-800-345-8765
 
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1-800-345-2021
or 816-531-5575
 
Investors Using Advisors
1-800-378-9878
 
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1-800-345-3533
 
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1-800-345-6488
 
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711
 
 
 
 
American Century Capital Portfolios, 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.
 
 
 
 
©2017 American Century Proprietary Holdings, Inc. All rights reserved.
CL-SAN-90804  1711
 





acihorizblkb99.jpg
                  

 
 
 
Semiannual Report
 
 
 
September 30, 2017
 
 
 
Mid Cap Value Fund







Table of Contents
President’s Letter
2
Fund Characteristics
Shareholder Fee Example
Schedule of Investments
Statement of Assets and Liabilities
Statement of Operations
Statement of Changes in Net Assets
Notes to Financial Statements
Financial Highlights
Approval of Management Agreement
Additional Information


























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

jthomasrev0514.jpg Jonathan Thomas

Dear Investor:

Thank you for reviewing this semiannual report for the period ended September 30, 2017. 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, we encourage you to visit our website, americancentury.com.

All Major Asset Classes Provided Positive Performance

From large-cap stocks to short-maturity Treasuries, the U.S. financial markets delivered across-the-board gains for the six-month period. Stock investors responded enthusiastically to two consecutive quarters of double-digit earnings growth for S&P 500 companies, the first such back-to-back performance since 2011. In addition, gross domestic product growth accelerated to an annualized rate of 3.1% in the April-June quarter, up from 1.2% in the first quarter and the fastest pace in two years. Meanwhile, despite setbacks and delays for some components of President Trump’s pro-growth agenda, equity investors generally remained optimistic regarding future U.S. economic gains.

Against this backdrop, the S&P 500 Index reached several milestones and returned 7.71% for the six-month period. In terms of equity styles, riskier and economically sensitive stocks generally remained in favor. For example, small-cap stocks outperformed their mid- and large-cap peers, while growth stocks largely outperformed value stocks across the capitalization spectrum.

Investor preferences for risk also extended to the fixed-income market, where spread (non-Treasury) sectors were top performers and drove the Bloomberg Barclays U.S. Aggregate Bond Index to a 2.31% gain for the six-month period. The Federal Reserve (the Fed) remained relatively supportive, raising rates only once (by 25 basis points in June) amid a low-inflation backdrop and announcing a gradual approach to balance sheet normalization. Meanwhile, upbeat corporate earnings, a rallying stock market, robust investor demand for yield, and favorable supply/demand dynamics in the corporate credit markets led to outperformance among corporate bonds.

As Congress considers corporate tax cuts and other growth-oriented reforms, and the Fed continues to pursue policy normalization, new opportunities and challenges likely will emerge. We continue to believe in a disciplined, diversified, and risk-aware approach, using professionally managed portfolios in pursuit of investment goals. We appreciate your continued trust in us.


Sincerely,
image48a01.jpg
Jonathan Thomas
President and Chief Executive Officer
American Century Investments

2

Fund Characteristics
SEPTEMBER 30, 2017
Top Ten Holdings
% of net assets
Northern Trust Corp.
2.9%
Johnson Controls International plc
2.9%
iShares Russell Mid-Cap Value ETF
2.7%
Zimmer Biomet Holdings, Inc.
2.2%
Weyerhaeuser Co.
2.2%
Imperial Oil Ltd.
1.9%
Conagra Brands, Inc.
1.8%
Invesco Ltd.
1.7%
Mondelez International, Inc., Class A
1.5%
PG&E Corp.
1.5%
 
 
Top Five Industries
% of net assets
Oil, Gas and Consumable Fuels
9.1%
Food Products
7.4%
Banks
7.1%
Capital Markets
6.7%
Electric Utilities
5.9%
 
 
Types of Investments in Portfolio
% of net assets
Common Stocks
94.5%
Exchange-Traded Funds
2.7%
Total Equity Exposure
97.2%
Temporary Cash Investments
2.5%
Other Assets and Liabilities
0.3%


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 April 1, 2017 to September 30, 2017 (except as noted).

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
4/1/17
Ending
Account Value
9/30/17
Expenses Paid
During Period(1)
4/1/17 - 9/30/17
 Annualized
Expense Ratio(1)
Actual
 
 
 
 
Investor Class
$1,000
$1,031.90
$4.94
0.97%
I Class
$1,000
$1,032.90
$3.92
0.77%
Y Class
$1,000
$1,034.10(2)
$3.01(3)
0.62%
A Class
$1,000
$1,030.60
$6.21
1.22%
C Class
$1,000
$1,026.40
$10.01
1.97%
R Class
$1,000
$1,029.40
$7.48
1.47%
R5 Class
$1,000
$1,033.40(2)
$3.73(3)
0.77%
R6 Class
$1,000
$1,033.70
$3.16
0.62%
Hypothetical
 
 
 
 
Investor Class
$1,000
$1,020.21
$4.91
0.97%
I Class
$1,000
$1,021.21
$3.90
0.77%
Y Class
$1,000
$1,021.96(4)
$3.14(4)
0.62%
A Class
$1,000
$1,018.95
$6.17
1.22%
C Class
$1,000
$1,015.19
$9.95
1.97%
R Class
$1,000
$1,017.70
$7.44
1.47%
R5 Class
$1,000
$1,021.21(4)
$3.90(4)
0.77%
R6 Class
$1,000
$1,021.96
$3.14
0.62%
(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 183, the number of days in the most recent fiscal half-year, divided by 365, 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.
(2)
Ending account value based on actual return from April 10, 2017 (commencement of sale) through September 30, 2017.
(3)
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 174, the number of days in the period from April 10, 2017 (commencement of sale) through September 30, 2017, divided by 365, to reflect the period. Had the class been available for the full period, the expenses paid during the period would have been higher.
(4)
Ending account value and expenses paid during the period assumes the class had been available throughout the entire period and are calculated using the class’s annualized expense ratio listed in the table above.


5

Schedule of Investments

SEPTEMBER 30, 2017 (UNAUDITED)
 
Shares
Value
COMMON STOCKS — 94.5%
 
 
Aerospace and Defense — 1.1%
 
 
Textron, Inc.
1,810,065

$
97,526,302

Auto Components — 0.5%
 
 
Delphi Automotive plc
408,522

40,198,565

Automobiles — 1.0%
 
 
Honda Motor Co. Ltd. ADR
2,916,529

86,212,597

Banks — 7.1%
 
 
Bank of Hawaii Corp.
669,748

55,830,193

BB&T Corp.
2,854,223

133,977,228

Comerica, Inc.
205,221

15,650,154

Commerce Bancshares, Inc.
1,241,394

71,715,331

M&T Bank Corp.
640,427

103,134,364

PNC Financial Services Group, Inc. (The)
433,521

58,425,625

SunTrust Banks, Inc.
1,150,951

68,792,341

UMB Financial Corp.
389,232

28,993,892

Westamerica Bancorporation(1) 
1,472,948

87,699,324

 
 
624,218,452

Building Products — 2.9%
 
 
Johnson Controls International plc
6,315,435

254,448,876

Capital Markets — 6.7%
 
 
Ameriprise Financial, Inc.
801,031

118,961,114

Invesco Ltd.
4,341,473

152,125,214

Northern Trust Corp.
2,804,432

257,811,434

State Street Corp.
180,995

17,292,262

T. Rowe Price Group, Inc.
464,220

42,081,543

 
 
588,271,567

Commercial Services and Supplies — 0.7%
 
 
Republic Services, Inc.
993,363

65,621,560

Containers and Packaging — 4.1%
 
 
Bemis Co., Inc.
1,313,294

59,846,808

Graphic Packaging Holding Co.
7,652,492

106,752,263

Sonoco Products Co.
1,683,831

84,949,274

WestRock Co.
1,871,692

106,181,087

 
 
357,729,432

Diversified Telecommunication Services — 1.3%
 
 
Level 3 Communications, Inc.(2) 
2,110,830

112,486,131

Electric Utilities — 5.9%
 
 
Edison International
1,607,220

124,029,167

Eversource Energy
656,517

39,679,887

PG&E Corp.
1,976,973

134,612,092

Pinnacle West Capital Corp.
752,892

63,664,548

Westar Energy, Inc., Class A
494,977

24,550,859

Xcel Energy, Inc.
2,762,588

130,725,664

 
 
517,262,217

Electrical Equipment — 3.5%
 
 
Eaton Corp. plc
853,867

65,568,447


6

 
Shares
Value
Emerson Electric Co.
1,781,491

$
111,948,895

Hubbell, Inc.
1,001,700

116,217,234

Rockwell Automation, Inc.
81,701

14,559,935

 
 
308,294,511

Electronic Equipment, Instruments and Components — 2.2%
 
 
Keysight Technologies, Inc.(2) 
2,599,848

108,309,668

TE Connectivity Ltd.
1,061,640

88,179,818

 
 
196,489,486

Energy Equipment and Services — 3.6%
 
 
Baker Hughes a GE Co.
2,781,237

101,848,899

Halliburton Co.
1,072,365

49,360,961

Helmerich & Payne, Inc.
1,072,355

55,880,419

National Oilwell Varco, Inc.
3,122,284

111,559,207

 
 
318,649,486

Equity Real Estate Investment Trusts (REITs) — 5.4%
 
 
American Tower Corp.
603,145

82,437,859

Boston Properties, Inc.
398,846

49,010,197

Empire State Realty Trust, Inc.
1,431,484

29,402,681

MGM Growth Properties LLC, Class A
1,755,244

53,025,921

Piedmont Office Realty Trust, Inc., Class A
3,386,290

68,267,606

Weyerhaeuser Co.
5,728,407

194,937,690

 
 
477,081,954

Food and Staples Retailing — 1.2%
 
 
Sysco Corp.
1,918,750

103,516,563

Food Products — 7.4%
 
 
Conagra Brands, Inc.
4,619,222

155,852,550

General Mills, Inc.
2,297,167

118,901,364

J.M. Smucker Co. (The)
651,800

68,393,374

Kellogg Co.
1,642,178

102,422,642

Lamb Weston Holdings, Inc.
622,498

29,188,931

Mondelez International, Inc., Class A
3,323,353

135,127,533

Orkla ASA
3,879,947

39,800,574

 
 
649,686,968

Gas Utilities — 1.5%
 
 
Atmos Energy Corp.
679,081

56,934,151

Spire, Inc.
976,201

72,873,405

 
 
129,807,556

Health Care Equipment and Supplies — 3.3%
 
 
Koninklijke Philips NV
1,069,126

44,137,563

STERIS plc
638,056

56,404,150

Zimmer Biomet Holdings, Inc.
1,667,848

195,288,322

 
 
295,830,035

Health Care Providers and Services — 5.7%
 
 
Cardinal Health, Inc.
1,449,173

96,978,657

Express Scripts Holding Co.(2) 
1,223,547

77,474,996

HCA Healthcare, Inc.(2) 
1,101,238

87,647,532

LifePoint Health, Inc.(2) 
1,857,537

107,551,392

McKesson Corp.
477,301

73,318,207

Quest Diagnostics, Inc.
605,884

56,734,978

 
 
499,705,762


7

 
Shares
Value
Hotels, Restaurants and Leisure — 0.4%
 
 
Carnival Corp.
503,548

$
32,514,094

Household Durables — 0.9%
 
 
PulteGroup, Inc.
2,966,406

81,071,876

Insurance — 5.3%
 
 
Aflac, Inc.
612,423

49,845,108

Arthur J. Gallagher & Co.
973,261

59,904,214

Brown & Brown, Inc.
861,428

41,512,215

Chubb Ltd.
818,760

116,714,238

ProAssurance Corp.
706,227

38,595,306

Reinsurance Group of America, Inc.
503,740

70,286,842

Torchmark Corp.
342,310

27,415,608

Travelers Cos., Inc. (The)
182,700

22,384,404

Unum Group
850,489

43,485,503

 
 
470,143,438

Leisure Products — 0.5%
 
 
Mattel, Inc.
2,995,345

46,367,941

Machinery — 2.4%
 
 
Cummins, Inc.
372,705

62,625,621

Ingersoll-Rand plc
981,996

87,564,583

PACCAR, Inc.
469,628

33,972,890

Parker-Hannifin Corp.
170,075

29,766,526

 
 
213,929,620

Multi-Utilities — 1.4%
 
 
Ameren Corp.
1,140,925

65,991,102

NorthWestern Corp.
991,267

56,442,743

 
 
122,433,845

Multiline Retail — 0.7%
 
 
Target Corp.
1,094,937

64,612,232

Oil, Gas and Consumable Fuels — 9.1%
 
 
Anadarko Petroleum Corp.
1,820,729

88,942,612

Devon Energy Corp.
2,051,134

75,297,129

EQT Corp.
1,849,466

120,659,162

Imperial Oil Ltd.
5,239,711

167,385,198

Marathon Petroleum Corp.
1,405,750

78,834,460

Noble Energy, Inc.
3,923,314

111,265,185

Occidental Petroleum Corp.
1,835,679

117,868,948

Spectra Energy Partners LP
946,899

42,023,378

 
 
802,276,072

Road and Rail — 1.1%
 
 
Heartland Express, Inc.
3,810,444

95,565,936

Semiconductors and Semiconductor Equipment — 4.8%
 
 
Applied Materials, Inc.
2,373,798

123,651,138

Lam Research Corp.
470,426

87,047,627

Maxim Integrated Products, Inc.
2,669,123

127,343,858

Teradyne, Inc.
2,379,589

88,734,874

 
 
426,777,497

Specialty Retail — 1.1%
 
 
Advance Auto Parts, Inc.
985,373

97,749,002

Thrifts and Mortgage Finance — 0.9%
 
 
Capitol Federal Financial, Inc.
5,623,283

82,662,260


8

 
Shares/Principal Amount
Value
Trading Companies and Distributors — 0.8%
 
 
MSC Industrial Direct Co., Inc., Class A
987,932

$
74,658,021

TOTAL COMMON STOCKS
(Cost $6,895,087,034)
 
8,333,799,854

EXCHANGE-TRADED FUNDS — 2.7%
 
 
iShares Russell Mid-Cap Value ETF
(Cost $197,277,737)
2,817,714

239,308,450

TEMPORARY CASH INVESTMENTS — 2.5%
 
 
Federal Home Loan Bank Discount Notes, 0.68%, 10/2/17(3)
$
217,000,000

217,000,000

Repurchase Agreement, BMO Capital Markets Corp., (collateralized by various U.S. Treasury obligations, 0.125% - 3.875%, 6/30/18 - 11/15/46, valued at $902,777), in a joint trading account at 0.95%, dated 9/29/17, due 10/2/17 (Delivery value $885,288)
 
885,218

Repurchase Agreement, Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 2.00%, 11/15/26, valued at $422,751), at 0.34%, dated 9/29/17, due 10/2/17 (Delivery value $410,012)
 
410,000

TOTAL TEMPORARY CASH INVESTMENTS
(Cost $218,292,301)
 
218,295,218

TOTAL INVESTMENT SECURITIES — 99.7%
(Cost $7,310,657,072)
 
8,791,403,522

OTHER ASSETS AND LIABILITIES — 0.3%
 
27,705,552

TOTAL NET ASSETS — 100.0%
 
$
8,819,109,074



FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
Currency Purchased
Currency Sold
  Counterparty
Settlement Date
Unrealized Appreciation
(Depreciation)
USD
140,821,920
CAD
174,141,795
Morgan Stanley
12/29/17
$
1,178,464

EUR
2,000,024
USD
2,371,948
UBS AG
12/29/17
3,589

USD
39,267,401
EUR
33,129,498
UBS AG
12/29/17
(82,317
)
USD
52,765,420
JPY
5,865,747,103
Credit Suisse AG
12/29/17
407,747

USD
3,662,450
NOK
28,873,656
JPMorgan Chase Bank N.A.
12/29/17
29,749

USD
1,890,255
NOK
14,867,060
JPMorgan Chase Bank N.A.
12/29/17
19,775

USD
2,603,344
NOK
20,402,421
JPMorgan Chase Bank N.A.
12/29/17
36,440

USD
2,878,200
NOK
22,513,015
JPMorgan Chase Bank N.A.
12/29/17
45,754

USD
2,799,144
NOK
21,806,493
JPMorgan Chase Bank N.A.
12/29/17
55,588

USD
2,110,187
NOK
16,428,981
JPMorgan Chase Bank N.A.
12/29/17
43,196

USD
1,849,933
NOK
14,435,451
JPMorgan Chase Bank N.A.
12/29/17
33,756

USD
2,478,209
NOK
19,288,745
JPMorgan Chase Bank N.A.
12/29/17
51,420

USD
1,354,336
NOK
10,573,713
JPMorgan Chase Bank N.A.
12/29/17
24,018

USD
3,641,208
NOK
28,672,824
JPMorgan Chase Bank N.A.
12/29/17
33,774

USD
1,800,080
NOK
14,267,516
JPMorgan Chase Bank N.A.
12/29/17
5,031

USD
3,196,271
NOK
25,324,533
JPMorgan Chase Bank N.A.
12/29/17
10,098

USD
3,482,321
NOK
27,701,171
JPMorgan Chase Bank N.A.
12/29/17
(2,866
)
 
 
 
 
 
 
$
1,893,216



9

NOTES TO SCHEDULE OF INVESTMENTS
ADR
-
American Depositary Receipt
CAD
-
Canadian Dollar
EUR
-
Euro
JPY
-
Japanese Yen
NOK
-
Norwegian Krone
USD
-
United States Dollar
(1)
Affiliated Company: the fund’s holding represents ownership of 5% or more of the voting securities of the company; therefore, the company is affiliated as defined in the Investment Company Act of 1940.
(2)
Non-income producing.
(3)
The rate indicated is the yield to maturity at purchase.

See Notes to Financial Statements.

10

Statement of Assets and Liabilities
SEPTEMBER 30, 2017 (UNAUDITED)
 
Assets
 
Investment securities - unaffiliated, at value (cost of $7,243,343,264)
$
8,703,704,198

Investment securities - affiliated, at value (cost of $67,313,808)
87,699,324

Total investment securities, at value (cost of $7,310,657,072)
8,791,403,522

Receivable for investments sold
48,069,850

Receivable for capital shares sold
30,949,633

Unrealized appreciation on forward foreign currency exchange contracts
1,978,399

Dividends and interest receivable
14,378,401

 
8,886,779,805

 
 
Liabilities
 
Disbursements in excess of demand deposit cash
5,346

Payable for investments purchased
27,787,427

Payable for capital shares redeemed
33,424,025

Unrealized depreciation on forward foreign currency exchange contracts
85,183

Accrued management fees
6,060,809

Distribution and service fees payable
307,941

 
67,670,731

 
 
Net Assets
$
8,819,109,074

 
 
Net Assets Consist of:
 
Capital (par value and paid-in surplus)
$
6,825,977,022

Undistributed net investment income
4,064,305

Undistributed net realized gain
506,425,262

Net unrealized appreciation
1,482,642,485

 
$
8,819,109,074


 
Net Assets
Shares Outstanding
Net Asset Value
Per Share
Investor Class, $0.01 Par Value

$4,552,621,187

250,826,623
$18.15
I Class, $0.01 Par Value

$1,936,709,060

106,652,956
$18.16
Y Class, $0.01 Par Value

$5,175

285
$18.16
A Class, $0.01 Par Value

$645,511,015

35,622,075
$18.12*
C Class, $0.01 Par Value

$148,088,440

8,245,033
$17.96
R Class, $0.01 Par Value

$137,498,434

7,606,512
$18.08
R5 Class, $0.01 Par Value

$46,173

2,542
$18.16
R6 Class, $0.01 Par Value

$1,398,629,590

77,029,000
$18.16
* Maximum offering price $19.23 (net asset value divided by 0.9425).


See Notes to Financial Statements.


11

Statement of Operations
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2017 (UNAUDITED)
 
Investment Income (Loss)
 
Income:
 
Dividends (including $1,195,701 from affiliates and net of foreign taxes withheld of $702,241)
$
128,397,260

Interest
869,369

 
129,266,629

 
 
Expenses:
 
Management fees
39,825,969

Distribution and service fees:
 
A Class
909,495

C Class
771,260

R Class
357,143

Directors' fees and expenses
147,031

Other expenses
462

 
42,011,360

Fees waived(1)
(1,606,377
)
 
40,404,983

 
 
Net investment income (loss)
88,861,646

 
 
Realized and Unrealized Gain (Loss)
 
Net realized gain (loss) on:
 
Investment transactions (including $(1,062,421) from affiliates)
421,333,122

Forward foreign currency exchange contract transactions
(14,555,436
)
Foreign currency translation transactions
(68,265
)
 
406,709,421

 
 
Change in net unrealized appreciation (depreciation) on:
 
Investments (including $28,463,367 from affiliates)
(220,830,181
)
Forward foreign currency exchange contracts
661,441

Translation of assets and liabilities in foreign currencies
97,899

 
(220,070,841
)
 
 
Net realized and unrealized gain (loss)
186,638,580

 
 
Net Increase (Decrease) in Net Assets Resulting from Operations
$
275,500,226


(1)
Amount consists of $847,771, $330,417, $1, $130,553, $28,071, $25,975, $3, and $243,586 for Investor Class, I Class, Y Class, A Class, C Class, R Class, R5 Class and R6 Class, respectively.


See Notes to Financial Statements.


12

Statement of Changes in Net Assets
SIX MONTHS ENDED SEPTEMBER 30, 2017 (UNAUDITED) AND YEAR ENDED MARCH 31, 2017
Increase (Decrease) in Net Assets
September 30, 2017
March 31, 2017
Operations
 
 
Net investment income (loss)
$
88,861,646

$
108,570,769

Net realized gain (loss)
406,709,421

484,517,537

Change in net unrealized appreciation (depreciation)
(220,070,841
)
928,217,893

Net increase (decrease) in net assets resulting from operations
275,500,226

1,521,306,199

 
 
 
Distributions to Shareholders
 
 
From net investment income:
 
 
Investor Class
(43,820,379
)
(56,846,450
)
I Class
(20,259,415
)
(22,574,513
)
Y Class
(57
)
—

A Class
(5,462,544
)
(16,809,081
)
C Class
(688,336
)
(628,329
)
R Class
(985,853
)
(1,302,759
)
R5 Class
(355
)
—

R6 Class
(15,355,423
)
(18,334,282
)
From net realized gains:
 
 
Investor Class
—

(112,493,225
)
I Class
—

(39,861,571
)
A Class
—

(43,015,675
)
C Class
—

(4,186,150
)
R Class
—

(4,206,839
)
R6 Class
—

(32,038,469
)
Decrease in net assets from distributions
(86,572,362
)
(352,297,343
)
 
 
 
Capital Share Transactions
 
 
Net increase (decrease) in net assets from capital share transactions (Note 5)
(308,269,602
)
925,856,847

 
 
 
Net increase (decrease) in net assets
(119,341,738
)
2,094,865,703

 
 
 
Net Assets
 
 
Beginning of period
8,938,450,812

6,843,585,109

End of period
$
8,819,109,074

$
8,938,450,812

 
 
 
Undistributed net investment income
$
4,064,305

$
1,775,021



See Notes to Financial Statements.


13

Notes to Financial Statements 

SEPTEMBER 30, 2017 (UNAUDITED)

1. Organization

American Century Capital Portfolios, 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. Mid Cap Value 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. Income is a secondary objective.

The fund offers the Investor Class, I Class (formerly Institutional Class), Y Class, A Class, C Class, R Class, R5 Class and R6 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. Sale of the Y Class and R5 Class commenced on April 10, 2017.

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. U.S. Treasury and Government Agency securities 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.
 
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. 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.
 
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.

14

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. If significant fluctuations in foreign markets are identified, 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.

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.

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).
 

15

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, 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. From April 1, 2017 through July 31, 2017, the investment advisor agreed to waive 0.03% of the fund's management fee. Effective August 1, 2017, the investment advisor agreed to waive 0.05% of the fund's management fee. The investment advisor expects this waiver to continue until July 31, 2018 and cannot terminate it prior to such date without the approval of the Board of Directors.

The annual management fee and the effective annual management fee after waiver for each class for the period ended September 30, 2017 are as follows:
 
Annual
Management Fee
Effective Annual Management Fee After Waiver
Investor Class
1.00%
0.96%
I Class
0.80%
0.76%
Y Class
0.65%
0.61%
A Class
1.00%
0.96%
C Class
1.00%
0.96%
R Class
1.00%
0.96%
R5 Class
0.80%
0.76%
R6 Class
0.65%
0.61%
 
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 September 30, 2017 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 $10,856,794 and $19,663,304, respectively. The effect of interfund transactions on the Statement of Operations was $6,002,426 in net realized gain (loss) on investment transactions.

16

4. Investment Transactions

Purchases and sales of investment securities, excluding short-term investments, for the period ended September 30, 2017 were $1,817,756,241 and $2,093,686,401, respectively.

5. Capital Share Transactions

Transactions in shares of the fund were as follows:
 
Six months ended
September 30, 2017(1)
Year ended
March 31, 2017
 
Shares
Amount
Shares
Amount
Investor Class/Shares Authorized
1,500,000,000

 
1,355,000,000

 
Sold
32,342,012

$
575,247,994

95,524,450

$
1,617,072,204

Issued in reinvestment of distributions
2,415,652

43,110,954

9,444,752

163,834,567

Redeemed
(48,898,502
)
(868,281,452
)
(71,970,011
)
(1,207,753,225
)
 
(14,140,838
)
(249,922,504
)
32,999,191

573,153,546

I Class/Shares Authorized
800,000,000

 
500,000,000

 
Sold
29,594,799

525,551,804

36,780,861

617,210,853

Issued in reinvestment of distributions
929,864

16,605,299

2,941,214

51,025,611

Redeemed
(15,481,169
)
(275,815,195
)
(23,385,985
)
(392,518,202
)
 
15,043,494

266,341,908

16,336,090

275,718,262

Y Class/Shares Authorized
50,000,000

 
N/A

 
Sold
282

5,000

 
 
Issued in reinvestment of distributions
3

57

 
 
 
285

5,057

 
 
A Class/Shares Authorized
300,000,000

 
575,000,000

 
Sold
3,469,931

61,579,461

33,099,394

545,878,543

Issued in reinvestment of distributions
287,029

5,113,387

3,352,353

58,165,063

Redeemed
(23,906,772
)
(424,792,775
)
(69,649,804
)
(1,193,566,164
)
 
(20,149,812
)
(358,099,927
)
(33,198,057
)
(589,522,558
)
C Class/Shares Authorized
60,000,000

 
50,000,000

 
Sold
230,331

4,046,940

3,740,032

60,859,992

Issued in reinvestment of distributions
36,668

647,238

253,069

4,388,322

Redeemed
(1,174,787
)
(20,699,090
)
(1,622,243
)
(27,028,636
)
 
(907,788
)
(16,004,912
)
2,370,858

38,219,678

R Class/Shares Authorized
60,000,000

 
70,000,000

 
Sold
503,333

8,898,980

3,141,933

51,925,449

Issued in reinvestment of distributions
54,978

977,068

314,643

5,459,393

Redeemed
(1,526,938
)
(27,061,741
)
(3,241,664
)
(53,879,242
)
 
(968,627
)
(17,185,693
)
214,912

3,505,600

R5 Class/Shares Authorized
50,000,000

 
N/A

 
Sold
2,522

44,301

 
 
Issued in reinvestment of distributions
20

355

 
 
 
2,542

44,656

 
 
R6 Class/Shares Authorized
440,000,000

 
200,000,000

 
Sold
17,213,131

306,589,954

54,083,268

899,809,329

Issued in reinvestment of distributions
859,869

15,355,423

2,900,453

50,372,751

Redeemed
(14,321,738
)
(255,393,564
)
(19,208,133
)
(325,399,761
)
 
3,751,262

66,551,813

37,775,588

624,782,319

Net increase (decrease)
(17,369,482
)
$
(308,269,602
)
56,498,582

$
925,856,847


(1)
April 10, 2017 (commencement of sale) through September 30, 2017 for the Y Class and R5 Class.


17

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. There were no significant transfers between levels during the period.

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
$
8,082,476,519

$
251,323,335

—

Exchange-Traded Funds
239,308,450

—

—

Temporary Cash Investments
—

218,295,218

—

 
$
8,321,784,969

$
469,618,553

—

Other Financial Instruments
 
 
 
Forward Foreign Currency Exchange Contracts
—

$
1,978,399

—

      
 
 
 
Liabilities
 
 
 
Other Financial Instruments
 
 
 
Forward Foreign Currency Exchange Contracts
—

$
85,183

—


7. Affiliated Company Transactions

If a fund's holding represents ownership of 5% or more of the voting securities of a company, the company is affiliated as defined in the 1940 Act. A summary of transactions for each company which is or was an affiliate at or during the period ended September 30, 2017 follows (amounts in thousands):
Company
Beginning
Value
Purchase
Cost
Sales Cost
Change in Net
Unrealized
Appreciation
(Depreciation)
Ending
Value
Ending
Shares
Net Realized
Gain (Loss)
Income
Westamerica Bancorporation
$
73,085

$
8,656

—

$
5,958

$
87,699

1,473

—

$
1,021

Heartland Express, Inc.(1)
95,196

—

$
22,135

22,505

(1 
) 
(1 
) 
$
(1,062
)
175

 
$
168,281

$
8,656

$
22,135

$
28,463

$
87,699

1,473

$
(1,062
)
$
1,196


(1) Company was not an affiliate at September 30, 2017.

18

8. Derivative Instruments

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. 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 $286,339,473.

The value of foreign currency risk derivative instruments as of September 30, 2017, is disclosed on the Statement of Assets and Liabilities as an asset of $1,978,399 in unrealized appreciation on forward foreign currency exchange contracts and a liability of $85,183 in unrealized depreciation on forward foreign currency exchange contracts. For the six months ended September 30, 2017, the effect of foreign currency risk derivative instruments on the Statement of Operations was $(14,555,436) in net realized gain (loss) on forward foreign currency exchange contract transactions and $661,441 in change in net unrealized appreciation (depreciation) on forward foreign currency exchange contracts.

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
$
7,395,846,692

Gross tax appreciation of investments
$
1,625,373,355

Gross tax depreciation of investments
(229,816,525
)
Net tax appreciation (depreciation) of investments
$
1,395,556,830


The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales.


19

Financial Highlights
For a Share Outstanding Throughout the Years Ended March 31 (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
2017(3)
$17.76
0.18
0.38
0.56
(0.17)
—
(0.17)
$18.15
3.19%
0.97%(4)
1.01%(4)
1.97%(4)
1.93%(4)
21%

$4,552,621

2017
$15.32
0.22
2.93
3.15
(0.23)
(0.48)
(0.71)
$17.76
20.71%
0.98%
1.00%
1.32%
1.30%
49%

$4,706,704

2016
$16.70
0.19
0.06
0.25
(0.19)
(1.44)
(1.63)
$15.32
1.94%
1.00%
1.01%
1.19%
1.18%
66%

$3,554,131

2015
$16.35
0.20
1.98
2.18
(0.18)
(1.65)
(1.83)
$16.70
13.62%
1.00%
1.00%
1.16%
1.16%
66%

$3,771,117

2014
$14.53
0.21
2.77
2.98
(0.20)
(0.96)
(1.16)
$16.35
21.02%
1.00%
1.00%
1.34%
1.34%
67%

$3,252,177

2013
$12.86
0.22
2.02
2.24
(0.25)
(0.32)
(0.57)
$14.53
18.11%
1.00%
1.00%
1.69%
1.69%
61%

$2,459,353

I Class(5)
2017(3)
$17.77
0.20
0.38
0.58
(0.19)
—
(0.19)
$18.16
3.29%
0.77%(4)
0.81%(4)
2.17%(4)
2.13%(4)
21%

$1,936,709

2017
$15.33
0.26
2.93
3.19
(0.27)
(0.48)
(0.75)
$17.77
20.95%
0.78%
0.80%
1.52%
1.50%
49%

$1,628,060

2016
$16.71
0.22
0.06
0.28
(0.22)
(1.44)
(1.66)
$15.33
2.14%
0.80%
0.81%
1.39%
1.38%
66%

$1,153,899

2015
$16.36
0.23
1.99
2.22
(0.22)
(1.65)
(1.87)
$16.71
13.83%
0.80%
0.80%
1.36%
1.36%
66%

$1,017,915

2014
$14.53
0.24
2.78
3.02
(0.23)
(0.96)
(1.19)
$16.36
21.33%
0.80%
0.80%
1.54%
1.54%
67%

$812,521

2013
$12.86
0.25
2.02
2.27
(0.28)
(0.32)
(0.60)
$14.53
18.34%
0.80%
0.80%
1.89%
1.89%
61%

$421,877

Y Class
2017(6)
$17.76
0.21
0.39
0.60
(0.20)
—
(0.20)
$18.16
3.41%
0.62%(4)
0.66%(4)
2.44%(4)
2.40%(4)
21%(7)

$5



For a Share Outstanding Throughout the Years Ended March 31 (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)
A Class
2017(3)
$17.73
0.14
0.40
0.54
(0.15)
—
(0.15)
$18.12
3.06%
1.22%(4)
1.26%(4)
1.72%(4)
1.68%(4)
21%

$645,511

2017
$15.30
0.18
2.92
3.10
(0.19)
(0.48)
(0.67)
$17.73
20.37%
1.23%
1.25%
1.07%
1.05%
49%

$989,014

2016
$16.68
0.15
0.06
0.21
(0.15)
(1.44)
(1.59)
$15.30
1.69%
1.25%
1.26%
0.94%
0.93%
66%

$1,360,886

2015
$16.33
0.15
2.00
2.15
(0.15)
(1.65)
(1.80)
$16.68
13.40%
1.25%
1.25%
0.91%
0.91%
66%

$1,464,424

2014
$14.52
0.17
2.76
2.93
(0.16)
(0.96)
(1.12)
$16.33
20.71%
1.25%
1.25%
1.09%
1.09%
67%

$802,480

2013
$12.86
0.19
2.01
2.20
(0.22)
(0.32)
(0.54)
$14.52
17.83%
1.25%
1.25%
1.44%
1.44%
61%

$488,491

C Class
2017(3)
$17.58
0.09
0.37
0.46
(0.08)
—
(0.08)
$17.96
2.64%
1.97%(4)
2.01%(4)
0.97%(4)
0.93%(4)
21%

$148,088

2017
$15.17
0.06
2.90
2.96
(0.07)
(0.48)
(0.55)
$17.58
19.56%
1.98%
2.00%
0.32%
0.30%
49%

$160,893

2016
$16.57
0.03
0.06
0.09
(0.05)
(1.44)
(1.49)
$15.17
0.90%
2.00%
2.01%
0.19%
0.18%
66%

$102,906

2015
$16.26
0.03
1.97
2.00
(0.04)
(1.65)
(1.69)
$16.57
12.53%
2.00%
2.00%
0.16%
0.16%
66%

$79,490

2014
$14.49
0.05
2.75
2.80
(0.07)
(0.96)
(1.03)
$16.26
19.75%
2.00%
2.00%
0.34%
0.34%
67%

$60,443

2013
$12.84
0.09
2.02
2.11
(0.14)
(0.32)
(0.46)
$14.49
16.96%
2.00%
2.00%
0.69%
0.69%
61%

$31,407



For a Share Outstanding Throughout the Years Ended March 31 (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
2017(3)
$17.69
0.13
0.39
0.52
(0.13)
—
(0.13)
$18.08
2.94%
1.47%(4)
1.51%(4)
1.47%(4)
1.43%(4)
21%

$137,498

2017
$15.26
0.14
2.92
3.06
(0.15)
(0.48)
(0.63)
$17.69
20.12%
1.48%
1.50%
0.82%
0.80%
49%

$151,705

2016
$16.64
0.11
0.06
0.17
(0.11)
(1.44)
(1.55)
$15.26
1.43%
1.50%
1.51%
0.69%
0.68%
66%

$127,581

2015
$16.31
0.11
1.98
2.09
(0.11)
(1.65)
(1.76)
$16.64
13.07%
1.50%
1.50%
0.66%
0.66%
66%

$130,669

2014
$14.51
0.13
2.76
2.89
(0.13)
(0.96)
(1.09)
$16.31
20.41%
1.50%
1.50%
0.84%
0.84%
67%

$110,440

2013
$12.85
0.15
2.02
2.17
(0.19)
(0.32)
(0.51)
$14.51
17.49%
1.50%
1.50%
1.19%
1.19%
61%

$73,023

R5 Class
2017(6)
$17.76
0.19
0.40
0.59
(0.19)
—
(0.19)
$18.16
3.34%
0.77%(4)
0.81%(4)
2.20%(4)
2.16%(4)
21%(7)

$46

R6 Class
2017(3)
$17.77
0.21
0.38
0.59
(0.20)
—
(0.20)
$18.16
3.37%
0.62%(4)
0.66%(4)
2.32%(4)
2.28%(4)
21%

$1,398,630

2017
$15.33
0.29
2.92
3.21
(0.29)
(0.48)
(0.77)
$17.77
21.13%
0.63%
0.65%
1.67%
1.65%
49%

$1,302,074

2016
$16.71
0.25
0.05
0.30
(0.24)
(1.44)
(1.68)
$15.33
2.29%
0.65%
0.66%
1.54%
1.53%
66%

$544,182

2015
$16.35
0.26
1.99
2.25
(0.24)
(1.65)
(1.89)
$16.71
14.07%
0.65%
0.65%
1.51%
1.51%
66%

$219,661

2014(8)
$15.66
0.20
1.61
1.81
(0.16)
(0.96)
(1.12)
$16.35
12.01%
0.65%(4)
0.65%(4)
1.83%(4)
1.83%(4)
67%(9)

$74,570



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 September 30, 2017 (unaudited).
(4)
Annualized.
(5)
Prior to April 10, 2017, the I Class was referred to as the Institutional Class.
(6)
April 10, 2017 (commencement of sale) through September 30, 2017 (unaudited).
(7)
Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the six months ended September 30, 2017.
(8)
July 26, 2013 (commencement of sale) through March 31, 2014.
(9)
Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended March 31, 2014.
See Notes to Financial Statements.


Approval of Management Agreement


At a meeting held on June 29, 2017, the Fund’s Board of Directors (the "Board") unanimously approved the renewal of the management agreement pursuant to which American Century Investment Management, Inc. (the “Advisor”) acts as the investment advisor for the Fund. Under Section 15(c) of the Investment Company Act, contracts for investment advisory services are required to be reviewed, evaluated, and approved by a majority of a fund’s directors (the “Directors”), including a majority of the independent Directors, each year.
    
Prior to its consideration of the renewal of the management agreement, the Directors requested and reviewed extensive data and information compiled by the Advisor and certain independent providers of evaluation data concerning the Fund and the services provided to the Fund by the Advisor. This review was in addition to the oversight and evaluation undertaken by the Board and its committees on a continual basis and the information received was supplemental to the extensive information that the Board and its committees receive and consider throughout the year.

In connection with its consideration of the renewal of the management agreement, the Board’s review and evaluation of the services provided by the Advisor included, but was not limited to, the following:

•
the nature, extent, and quality of investment management, shareholder services, and other services provided and to be provided to the Fund;
•
the wide range of other programs and services provided and to be provided to the Fund and its shareholders on a routine and non-routine basis;
•
the investment performance of the Fund, including data comparing the Fund's performance to appropriate benchmarks and/or a peer group of other mutual funds with similar investment objectives and strategies;
•
the cost of owning the Fund compared to the cost of owning similar funds;
•
the compliance policies, procedures, and regulatory experience of the Advisor and the Fund's service providers;
•
financial data showing the cost of services provided to the Fund, the profitability of the Fund to the Advisor, and the overall profitability of the Advisor;
•
strategic plans of the Advisor
•
possible economies of scale associated with the Advisor’s management of the Fund and other accounts under its management;
•
data comparing services provided and charges to the Advisor's other investment management clients;
•
acquired fund fees and expenses;
•
payments and practices by the Fund and the Advisor regarding financial intermediaries, the nature of services provided by intermediaries, and the terms of share classes utilized; and
•
any collateral benefits derived by the Advisor from the management of the Fund.

The Directors held three in-person meetings and one telephonic meeting to review and discuss the information provided. The independent Directors also reviewed responses to supplemental information requests and held active discussions with the Advisor regarding the renewal of the management agreement. The independent Directors had the benefit of the advice of their independent counsel throughout the process.

Factors Considered

The Directors considered all of the information provided by the Advisor, the independent data providers, and independent counsel in connection with the approval. They determined that the

24

information was sufficient for them to evaluate the management agreement for the Fund. In connection with their review, the Directors did not identify any single factor as being all-important or controlling, and each Director may have attributed different levels of importance to different factors. In deciding to renew the management agreement, the Board based its decision on a number of factors, including without limitation the following:

Nature, Extent and Quality of Services - Generally. Under the management agreement, the Advisor is responsible for providing or arranging for all services necessary for the operation of the Fund. The Board noted that the Advisor provides or arranges at its own expense a wide variety of services including without limitation the following:

•
portfolio research and security selection
•
securities trading
•
Fund administration
•
custody of Fund assets
•
daily valuation of the Fund’s portfolio
•
shareholder servicing and transfer agency, including shareholder confirmations, recordkeeping, and communications
•
legal services (except the independent Directors’ counsel)
•
regulatory and portfolio compliance
•
financial reporting
•
marketing and distribution (except amounts paid by the Fund under Rule 12b-1 plans)

The Board noted that many of these services have expanded over time in terms of both quantity and complexity in response to shareholder demands, competition in the industry, changing distribution channels, and the changing regulatory environment. The Board noted specifically the resources the Advisor has committed during the year to compliance with the Department of Labor fiduciary rule and share class modernization.

Investment Management Services. The nature of the investment management services provided to the Fund is quite complex and allows Fund shareholders access to professional money management, instant diversification of their investments within an asset class, the opportunity to easily diversify among asset classes by investing in or exchanging among various American Century Investments funds, and liquidity. In evaluating investment performance, the Board expects the Advisor to manage the Fund in accordance with its investment objectives and approved strategies. Further, the Directors recognize that the Advisor has an obligation to monitor trading activities, and in particular to seek the best execution of fund trades, and to evaluate the use of and payment for research. In providing these services, the Advisor utilizes teams of investment professionals (portfolio managers, analysts, research assistants, and securities traders) who require extensive information technology, research, training, compliance, and other systems to conduct their business. The Board, directly and through its Fund Performance Review Committee, provides oversight of the investment performance process. It regularly reviews investment performance information for the Fund, together with comparative information for appropriate benchmarks and/or peer groups of similarly-managed funds, over different time horizons. The Directors also review detailed performance information provided by the Advisor during the management agreement renewal process. If performance concerns are identified, the Fund receives special reviews until performance improves, during which the Board receives a report from the Advisor regarding the reasons for such results (e.g., market conditions, security selection) and any efforts being undertaken to improve performance. The Fund’s performance was above its benchmark for the one-, three-, five-, and ten-year periods reviewed by the Board. The Board found the investment management services provided by the Advisor to the Fund to be satisfactory and consistent with the management agreement.

Shareholder and Other Services. Under the management agreement, the Advisor provides the Fund with a comprehensive package of transfer agency, shareholder, and other services. The Board, directly and through various committees of the Board, regularly reviews reports and

25

evaluations of such services at its regular meetings. These reports include, but are not limited to, information regarding the operational efficiency and accuracy of the shareholder and transfer agency services provided, staffing levels, shareholder satisfaction (as measured by external as well as internal sources), technology support, new products and services offered to Fund shareholders, securities trading activities, portfolio valuation services, auditing services, and legal and operational compliance activities. Certain aspects of shareholder and transfer agency service level efficiency and the quality of securities trading activities are measured by independent third party providers and are presented in comparison to other fund groups not managed by the Advisor. The Board found the services provided by the Advisor to the Fund under the management agreement to be competitive and of high quality.

Costs of Services and Profitability. The Advisor provides detailed information concerning its cost of providing various services to the Fund, its profitability in managing the Fund (pre- and post-distribution), its overall profitability, and its financial condition. The Directors have reviewed with the Advisor the methodology used to prepare this financial information. This information is considered in evaluating the Advisor’s financial condition, its ability to continue to provide services under the management agreement, and the reasonableness of the current management fee. The Board concluded that the Advisor’s profits were reasonable in light of the services provided to the Fund.

Ethics. The Board generally considers the Advisor’s commitment to providing quality services to shareholders and to conducting its business ethically. They noted that the Advisor’s practices generally meet or exceed industry best practices.

Economies of Scale. The Board also reviewed information provided by the Advisor regarding the possible existence of economies of scale in connection with the management of the Fund. The Board concluded that economies of scale are difficult to measure and predict with precision, especially on a fund-by-fund basis. The Board concluded that the Advisor is appropriately sharing economies of scale through its competitive fee structure, offering competitive fees from fund inception, and through reinvestment in its business to provide shareholders additional content and services.

Comparison to Other Funds’ Fees. The management agreement provides that the Fund pays the Advisor a single, all-inclusive (or unified) management fee for providing all services necessary for the management and operation of the Fund, other than brokerage expenses, expenses attributable to short sales, taxes, interest, extraordinary expenses, and the fees and expenses of the Fund’s independent Directors (including their independent legal counsel) and expenses incurred in connection with the provision of shareholder services and distribution services under a plan adopted pursuant to Rule 12b-1 under the 1940 Act. Under the unified fee structure, the Advisor is responsible for providing all investment advisory, custody, audit, administrative, compliance, recordkeeping, marketing and shareholder services, or arranging and supervising third parties to provide such services. By contrast, most other funds are charged a variety of fees, including an investment advisory fee, a transfer agency fee, an administrative fee, distribution charges, and other expenses. Other than their investment advisory fees and any applicable Rule 12b-1 distribution fees, all other components of the total fees charged by these other funds may be increased without shareholder approval. The Board believes the unified fee structure is a benefit to Fund shareholders because it clearly discloses to shareholders the cost of owning Fund shares, and, since the unified fee cannot be increased without a vote of Fund shareholders, it shifts to the Advisor the risk of increased costs of operating the Fund and provides a direct incentive to minimize administrative inefficiencies. Part of the Board’s analysis of fee levels involves reviewing certain evaluative data compiled by an independent provider comparing the Fund’s unified fee to the total expense ratios of its peers. The unified fee charged to shareholders of the Fund was at the median of the total expense ratios of the Fund’s peer expense universe and was within the range of its peer expense group. The Board discussed with the Advisor the factors that impacted the level of the fee in relation to its peers. The Board and the Advisor agreed to a temporary reduction of the Fund's annual unified management fee of 0.05% (e.g., the Investor Class unified fee will be reduced from 1.00% to 0.95%) for at least one year, beginning August 1, 2017. The

26

Board concluded that the management fee paid by the Fund to the Advisor under the management agreement is reasonable in light of the services provided to the Fund.

Comparison to Fees and Services Provided to Other Clients of the Advisor. The Directors also requested and received information from the Advisor concerning the nature of the services, fees, costs, and profitability of its advisory services to advisory clients other than the Fund. They observed that these varying types of client accounts require different services and involve different regulatory and entrepreneurial risks than the management of the Fund. The Board analyzed this information and concluded that the fees charged and services provided to the Fund were reasonable by comparison.

Payments to Intermediaries. The Directors also requested and received a description of payments made to intermediaries by the Fund and the Advisor and services provided in response thereto. These payments include various payments made by the Fund or the Advisor to different types of intermediaries and recordkeepers for distribution and service activities provided for the Fund. The Board reviewed such information and received representations from the Advisor that all such payments by the Fund were made pursuant to the Fund's Rule 12b-1 Plan and that all such payments by the Advisor were made from the Advisor's resources and reasonable profits. The Board found the payments to be reasonable in scope and purpose.

Collateral or “Fall-Out” Benefits Derived by the Advisor. The Board considered the existence of collateral benefits the Advisor may receive as a result of its relationship with the Fund. They concluded that the Advisor’s primary business is managing mutual funds and it generally does not use fund or shareholder information to generate profits in other lines of business, and therefore does not derive any significant collateral benefits from them. The Board noted that additional assets from other clients may offer the Advisor some benefit from increased leverage with service providers and counterparties. Additionally, the Advisor receives proprietary research from broker-dealers that execute fund portfolio transactions, which the Board concluded is likely to benefit other clients of the Advisor, as well as Fund shareholders. The Board also determined that the Advisor is able to provide investment management services to certain clients other than the Fund, at least in part, due to its existing infrastructure built to serve the fund complex. The Board concluded that appropriate allocation methodologies had been employed to assign resources and the cost of those resources to these other clients and, where expressly provided, these other client assets may be included with the assets of the Fund to determine breakpoints in the management fee schedule.

Existing Relationship. The Board also considered whether there was any reason for not continuing the existing arrangement with the Advisor. In this regard, the Board was mindful of the potential disruptions of the Fund’s operations and various risks, uncertainties, and other effects that could occur as a result of a decision not to continue such relationship. In particular, the Board recognized that most shareholders have invested in the Fund on the strength of the Advisor’s industry standing and reputation and in the expectation that the Advisor will have a continuing role in providing advisory services to the Fund.

Conclusion of the Directors. As a result of this process, the Board, including all of the independent Directors, taking into account all of the factors discussed above and the information provided by the Advisor and others in connection with its review and throughout the year, determined that the management fee is fair and reasonable in light of the services provided and that the investment management agreement between the Fund and the Advisor should be renewed.

27

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

A description of the policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund is available without charge, upon request, by calling 1-800-345-2021. It is also available on the "About Us" page of American Century Investments’ website at americancentury.com and 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 the "About Us" page at americancentury.com. 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. The fund’s Forms N-Q are available on the SEC’s website at sec.gov, and may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. 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




acihorizblkb99.jpg
 
 
 
 
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 Capital Portfolios, 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.
 
 
 
 
©2017 American Century Proprietary Holdings, Inc. All rights reserved.
CL-SAN-90805  1711
 





acihorizblkb99.jpg
                  

 
 
 
Semiannual Report
 
 
 
September 30, 2017
 
 
 
NT Large Company Value Fund






Table of Contents
Fund Characteristics
Shareholder Fee Example
Schedule of Investments
Statement of Assets and Liabilities
Statement of Operations
Statement of Changes in Net Assets
Notes to Financial Statements
Financial Highlights
Approval of Management Agreement
Additional Information



























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 
SEPTEMBER 30, 2017
Top Ten Holdings
% of net assets
Schlumberger Ltd.
3.8%
Pfizer, Inc.
3.4%
Johnson Controls International plc
3.3%
General Electric Co.
3.0%
Procter & Gamble Co. (The)
2.8%
Verizon Communications, Inc.
2.6%
U.S. Bancorp
2.6%
Bank of New York Mellon Corp. (The)
2.5%
Cisco Systems, Inc.
2.5%
Chevron Corp.
2.5%
 
 
Top Five Industries
% of net assets
Banks
14.7%
Oil, Gas and Consumable Fuels
11.2%
Pharmaceuticals
10.5%
Capital Markets
5.3%
Health Care Equipment and Supplies
5.1%
 
 
Types of Investments in Portfolio
% of net assets
Domestic Common Stocks
91.5%
Foreign Common Stocks*
7.8%
Exchange-Traded Funds
0.5%
Total Equity Exposure
99.8%
Other Assets and Liabilities
0.2%
*Includes depositary shares, dual listed securities and foreign ordinary shares.



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 April 1, 2017 to September 30, 2017.

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
4/1/17
Ending
Account Value
9/30/17
Expenses Paid
During Period(1)
4/1/17 - 9/30/17
Annualized
Expense Ratio(1)
Actual
 
 
 
 
G Class
$1,000
$1,033.20
$2.04
0.40%
Hypothetical
 
 
 
 
G Class
$1,000
$1,023.06
$2.03
0.40%
(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 183, the number of days in the most recent fiscal half-year, divided by 365, 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

SEPTEMBER 30, 2017 (UNAUDITED)
 
Shares
Value
COMMON STOCKS — 99.3%
 
 
Aerospace and Defense — 2.2%
 
 
Textron, Inc.
300,700

$
16,201,716

United Technologies Corp.
241,100

27,986,888

 
 
44,188,604

Auto Components — 0.5%
 
 
Delphi Automotive plc
95,400

9,387,360

Automobiles — 0.6%
 
 
Honda Motor Co. Ltd. ADR
402,600

11,900,856

Banks — 14.7%
 
 
Bank of America Corp.
1,819,400

46,103,596

BB&T Corp.
1,020,600

47,906,964

JPMorgan Chase & Co.
360,200

34,402,702

M&T Bank Corp.
172,100

27,714,984

PNC Financial Services Group, Inc. (The)
298,000

40,161,460

U.S. Bancorp
944,100

50,594,319

Wells Fargo & Co.
749,200

41,318,380

 
 
288,202,405

Building Products — 3.3%
 
 
Johnson Controls International plc
1,591,900

64,137,651

Capital Markets — 5.3%
 
 
Ameriprise Financial, Inc.
123,600

18,355,836

Bank of New York Mellon Corp. (The)
930,800

49,351,016

BlackRock, Inc.
11,400

5,096,826

Invesco Ltd.
910,100

31,889,904

 
 
104,693,582

Chemicals — 1.0%
 
 
DowDuPont, Inc.
280,000

19,384,400

Communications Equipment — 2.5%
 
 
Cisco Systems, Inc.
1,466,200

49,308,306

Containers and Packaging — 0.5%
 
 
WestRock Co.
188,800

10,710,624

Diversified Telecommunication Services — 2.6%
 
 
Verizon Communications, Inc.
1,049,000

51,915,010

Electric Utilities — 3.2%
 
 
Edison International
249,300

19,238,481

PG&E Corp.
208,300

14,183,147

PPL Corp.
346,400

13,145,880

Xcel Energy, Inc.
357,200

16,902,704

 
 
63,470,212

Electrical Equipment — 0.9%
 
 
Eaton Corp. plc
219,200

16,832,368

Electronic Equipment, Instruments and Components — 1.3%
 
 
TE Connectivity Ltd.
305,200

25,349,912

Energy Equipment and Services — 4.7%
 
 
Baker Hughes a GE Co.
501,600

18,368,592


4

 
Shares
Value
Schlumberger Ltd.
1,058,800

$
73,861,888

 
 
92,230,480

Equity Real Estate Investment Trusts (REITs) — 0.7%
 
 
Boston Properties, Inc.
112,900

13,873,152

Food and Staples Retailing — 4.1%
 
 
CVS Health Corp.
327,600

26,640,432

Sysco Corp.
278,000

14,998,100

Wal-Mart Stores, Inc.
488,500

38,171,390

 
 
79,809,922

Food Products — 3.3%
 
 
Conagra Brands, Inc.
403,900

13,627,586

General Mills, Inc.
309,200

16,004,192

Mondelez International, Inc., Class A
849,900

34,556,934

 
 
64,188,712

Health Care Equipment and Supplies — 5.1%
 
 
Abbott Laboratories
476,200

25,410,032

Medtronic plc
577,300

44,896,621

Zimmer Biomet Holdings, Inc.
261,000

30,560,490

 
 
100,867,143

Health Care Providers and Services — 1.8%
 
 
HCA Healthcare, Inc.(1) 
261,300

20,796,867

McKesson Corp.
91,800

14,101,398

 
 
34,898,265

Hotels, Restaurants and Leisure — 0.4%
 
 
Carnival Corp.
114,900

7,419,093

Household Products — 2.8%
 
 
Procter & Gamble Co. (The)
606,000

55,133,880

Industrial Conglomerates — 3.0%
 
 
General Electric Co.
2,426,500

58,672,770

Insurance — 3.5%
 
 
Aflac, Inc.
199,700

16,253,583

Chubb Ltd.
276,800

39,457,840

MetLife, Inc.
256,300

13,314,785

 
 
69,026,208

Leisure Products — 0.6%
 
 
Mattel, Inc.
792,800

12,272,544

Machinery — 0.4%
 
 
Ingersoll-Rand plc
77,200

6,883,924

Media — 0.8%
 
 
Time Warner, Inc.
156,900

16,074,405

Multiline Retail — 0.5%
 
 
Target Corp.
164,000

9,677,640

Oil, Gas and Consumable Fuels — 11.2%
 
 
Anadarko Petroleum Corp.
457,900

22,368,415

Chevron Corp.
414,800

48,739,000

Exxon Mobil Corp.
178,500

14,633,430

Imperial Oil Ltd.
1,044,700

33,373,466

Occidental Petroleum Corp.
618,000

39,681,780

Royal Dutch Shell plc ADR
236,000

14,759,440

TOTAL SA ADR
867,400

46,423,248

 
 
219,978,779


5

 
Shares
Value
Personal Products — 0.5%
 
 
Unilever NV CVA
162,800

$
9,628,366

Pharmaceuticals — 10.5%
 
 
Allergan plc
130,500

26,745,975

Johnson & Johnson
338,300

43,982,383

Merck & Co., Inc.
532,200

34,076,766

Pfizer, Inc.
1,860,200

66,409,140

Roche Holding AG
136,100

34,743,553

 
 
205,957,817

Road and Rail — 0.3%
 
 
Union Pacific Corp.
50,600

5,868,082

Semiconductors and Semiconductor Equipment — 3.0%
 
 
Applied Materials, Inc.
290,500

15,132,145

Intel Corp.
414,800

15,795,584

Lam Research Corp.
53,900

9,973,656

QUALCOMM, Inc.
349,000

18,092,160

 
 
58,993,545

Software — 1.7%
 
 
Oracle Corp. (New York)
704,500

34,062,575

Specialty Retail — 1.5%
 
 
Advance Auto Parts, Inc.
230,600

22,875,520

L Brands, Inc.
161,500

6,720,015

 
 
29,595,535

Technology Hardware, Storage and Peripherals — 0.3%
 
 
Apple, Inc.
39,600

6,103,152

TOTAL COMMON STOCKS
(Cost $1,653,388,813)
 
1,950,697,279

EXCHANGE-TRADED FUNDS — 0.5%
 
 
iShares Russell 1000 Value ETF
(Cost $9,502,738)
84,100

9,966,691

TOTAL INVESTMENT SECURITIES — 99.8%
(Cost $1,662,891,551)
 
1,960,663,970

OTHER ASSETS AND LIABILITIES — 0.2%
 
4,178,586

TOTAL NET ASSETS — 100.0%
 
$
1,964,842,556


FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
Currency Purchased
Currency Sold
Counterparty
Settlement Date
Unrealized Appreciation
(Depreciation)
USD
28,026,981

CAD
34,658,445

Morgan Stanley
12/29/17
$
234,543

USD
29,823,130

CHF
28,805,565

Credit Suisse AG
12/29/17
(103,382
)
EUR
1,117,633

USD
1,323,502

UBS AG
12/29/17
3,972

USD
49,081,099

EUR
41,409,214

UBS AG
12/29/17
(102,890
)
USD
12,480,699

GBP
9,240,102

Morgan Stanley
12/29/17
65,196

USD
304,991

GBP
226,096

Morgan Stanley
12/29/17
1,196

USD
10,301,893

JPY
1,145,225,426

Credit Suisse AG
12/29/17
79,608

 
 
 
 
 
 
$
178,243



6

NOTES TO SCHEDULE OF INVESTMENTS
ADR
-
American Depositary Receipt
CAD
-
Canadian Dollar
CHF
-
Swiss Franc
CVA
-
Certificaten Van Aandelen
EUR
-
Euro
GBP
-
British Pound
JPY
-
Japanese Yen
USD
-
United States Dollar
(1)
Non-income producing.
See Notes to Financial Statements.


7

Statement of Assets and Liabilities
SEPTEMBER 30, 2017 (UNAUDITED)
 
Assets
 
Investment securities, at value (cost of $1,662,891,551)
$
1,960,663,970

Receivable for investments sold
20,445,284

Receivable for capital shares sold
4,083,371

Unrealized appreciation on forward foreign currency exchange contracts
384,515

Dividends and interest receivable
4,772,997

 
1,990,350,137

 
 
Liabilities
 
Disbursements in excess of demand deposit cash
8,880,492

Payable for investments purchased
996,299

Payable for capital shares redeemed
15,424,518

Unrealized depreciation on forward foreign currency exchange contracts
206,272

 
25,507,581

 
 
Net Assets
$
1,964,842,556

 
 
G Class Capital Shares, $0.01 Par Value
 
Shares authorized
920,000,000

Shares outstanding
162,380,675

 
 
Net Asset Value Per Share
$
12.10

 
 
Net Assets Consist of:
 
Capital (par value and paid-in surplus)
$
1,554,858,133

Undistributed net investment income
2,541,021

Undistributed net realized gain
109,491,499

Net unrealized appreciation
297,951,903

 
$
1,964,842,556



See Notes to Financial Statements.


8

Statement of Operations
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2017 (UNAUDITED)
 
Investment Income (Loss)
 
Income:
 
Dividends (net of foreign taxes withheld of $277,300)
$
31,622,299

Interest
80,944

 
31,703,243

 
 
Expenses:
 
Management fees
5,534,583

Directors' fees and expenses
32,758

Other expenses
3,652

 
5,570,993

Fees waived - G Class
(1,590,905
)
 
3,980,088

 
 
Net investment income (loss)
27,723,155

 
 
Realized and Unrealized Gain (Loss)
 
Net realized gain (loss) on:
 
Investment transactions
77,009,052

Forward foreign currency exchange contract transactions
(7,008,728
)
Foreign currency translation transactions
24,441

 
70,024,765

 
 
Change in net unrealized appreciation (depreciation) on:
 
Investments
(31,303,227
)
Forward foreign currency exchange contracts
(622,486
)
Translation of assets and liabilities in foreign currencies
2,382

 
(31,923,331
)
 
 
Net realized and unrealized gain (loss)
38,101,434

 
 
Net Increase (Decrease) in Net Assets Resulting from Operations
$
65,824,589



See Notes to Financial Statements.


9

Statement of Changes in Net Assets
SIX MONTHS ENDED SEPTEMBER 30, 2017 (UNAUDITED) AND YEAR ENDED MARCH 31, 2017
Increase (Decrease) in Net Assets
September 30, 2017
March 31, 2017
Operations
 
 
Net investment income (loss)
$
27,723,155

$
38,974,306

Net realized gain (loss)
70,024,765

141,155,638

Change in net unrealized appreciation (depreciation)
(31,923,331
)
142,242,655

Net increase (decrease) in net assets resulting from operations
65,824,589

322,372,599

 
 
 
Distributions to Shareholders
 
 
From net investment income:
 
 
G Class
(25,673,562
)
(34,615,462
)
R6 Class
(1,038,414
)
(3,794,678
)
From net realized gains:
 
 
G Class
—

(70,093,076
)
R6 Class
—

(7,482,182
)
Decrease in net assets from distributions
(26,711,976
)
(115,985,398
)
 
 
 
Capital Share Transactions
 
 
Net increase (decrease) in net assets from capital share transactions (Note 5)
19,222,555

59,914,703

 
 
 
Net increase (decrease) in net assets
58,335,168

266,301,904

 
 
 
Net Assets
 
 
Beginning of period
1,906,507,388

1,640,205,484

End of period
$
1,964,842,556

$
1,906,507,388

 
 
 
Undistributed net investment income
$
2,541,021

$
1,529,842



See Notes to Financial Statements.


10

Notes to Financial Statements

SEPTEMBER 30, 2017 (UNAUDITED)

1. Organization

American Century Capital Portfolios, 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 Large Company Value 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. Income is a secondary objective. 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 (formerly Institutional Class). On July 31, 2017, all outstanding R6 Class shares were converted to G Class shares and the fund discontinued offering the R6 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. 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.
 
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

11

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. If significant fluctuations in foreign markets are identified, 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.

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.

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.


12

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 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 rate of the fee is determined by applying a fee rate calculation formula. This formula takes into account the fund’s assets as well as certain assets, if any, of other clients of the investment advisor outside the American Century Investments family of funds (such as subadvised funds and separate accounts) that use very similar investment teams and strategies (strategy assets). The strategy assets of the fund also include the assets of Large Company Value Fund, one fund in a series issued by the corporation. The management fee schedule ranges from 0.35% to 0.55% for the G Class. Prior to July 31, 2017, the management fee schedule ranged from 0.50% to 0.70% for the G Class and 0.35% to 0.55% for the R6 Class. Effective July 31, 2017, 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 effective annual management fee for the period ended September 30, 2017 was 0.57% before waiver and 0.40% after waiver for the G Class.

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 $10,669,781 and $5,745,652, respectively. The effect of interfund transactions on the Statement of Operations was $954,021 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 September 30, 2017 were $552,441,639 and $518,750,633, respectively.

















13

5. Capital Share Transactions

Transactions in shares of the fund were as follows:
 
Six months ended
September 30, 2017
Year ended
March 31, 2017
 
Shares
Amount
Shares
Amount
G Class/Shares Authorized
920,000,000

 
825,000,000

 
Sold
28,144,155

$
335,622,827

15,821,549

$
178,636,197

Issued in reinvestment of distributions
2,147,244

25,673,562

9,020,530

104,708,538

Redeemed
(11,417,910
)
(136,667,142
)
(26,032,560
)
(301,671,984
)
 
18,873,489

224,629,247

(1,190,481
)
(18,327,249
)
R6 Class/Shares Authorized
N/A

 
70,000,000

 
Sold
2,076,788

24,637,192

8,331,107

95,411,193

Issued in reinvestment of distributions
87,042

1,038,414

969,886

11,276,860

Redeemed
(19,287,096
)
(231,082,298
)
(2,466,464
)
(28,446,101
)
 
(17,123,266
)
(205,406,692
)
6,834,529

78,241,952

Net increase (decrease)
1,750,223

$
19,222,555

5,644,048

$
59,914,703


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. There were no significant transfers between levels during the period.

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
$
1,872,951,894

$
77,745,385

—

Exchange-Traded Funds
9,966,691

—

—

 
$
1,882,918,585

$
77,745,385

—

Other Financial Instruments
 
 
 
Forward Foreign Currency Exchange Contracts
—

$
384,515

—

      
 
 
 
Liabilities
 
 
 
Other Financial Instruments
 
 
 
Forward Foreign Currency Exchange Contracts
—

$
206,272

—




14

7. Derivative Instruments

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. 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 $130,619,617.

The value of foreign currency risk derivative instruments as of September 30, 2017, is disclosed on the Statement of Assets and Liabilities as an asset of $384,515 in unrealized appreciation on forward foreign currency exchange contracts and a liability of $206,272 in unrealized depreciation on forward foreign currency exchange contracts. For the six months ended September 30, 2017, the effect of foreign currency risk derivative instruments on the Statement of Operations was $(7,008,728) in net realized gain (loss) on forward foreign currency exchange contract transactions and $(622,486) in change in net unrealized appreciation (depreciation) on forward foreign currency exchange contracts.

8. Risk Factors

There are certain risks involved in investing in foreign securities. These risks include those resulting from future adverse political, social and economic developments, fluctuations in currency exchange rates, the possible imposition of exchange controls, and other foreign laws or restrictions.

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
$
1,689,494,899

Gross tax appreciation of investments
$
324,420,426

Gross tax depreciation of investments
(53,251,355
)
Net tax appreciation (depreciation) of investments
$
271,169,071


The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales.


15

Financial Highlights
For a Share Outstanding Throughout the Years Ended March 31 (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)
G Class(3)
 
 
 
 
 
 
 
 
 
 
 
2017(4)
$11.87
0.17
0.22
0.39
(0.16)
—
(0.16)
$12.10
3.32%
0.40%(5)(6)
2.83%(5)(6)
27%

$1,964,843

2017
$10.58
0.25
1.80
2.05
(0.24)
(0.52)
(0.76)
$11.87
19.67%
0.63%
2.17%
79%

$1,703,216

2016
$12.38
0.18
(0.78)
(0.60)
(0.18)
(1.02)
(1.20)
$10.58
(4.92)%
0.64%
1.57%
61%

$1,531,294

2015
$12.18
0.19
1.14
1.33
(0.18)
(0.95)
(1.13)
$12.38
11.01%
0.64%
1.52%
68%

$1,391,730

2014
$10.45
0.21
2.03
2.24
(0.20)
(0.31)
(0.51)
$12.18
21.75%
0.65%
1.81%
35%

$1,324,951

2013
$9.31
0.19
1.25
1.44
(0.19)
(0.11)
(0.30)
$10.45
15.87%
0.67%
2.03%
37%

$941,901

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)
Prior to July 31, 2017, the G Class was referred to as the Institutional Class.
(4)
Six months ended September 30, 2017 (unaudited).
(5)
Annualized.
(6)
The annualized ratio of operating expenses to average net assets before expense waiver and the annualized ratio of net investment income (loss) to average net assets before expense waiver was 0.57% and 2.66%, respectively.
See Notes to Financial Statements.


Approval of Management Agreement


At a meeting held on June 29, 2017, the Fund’s Board of Directors (the "Board") unanimously approved the renewal of the management agreement pursuant to which American Century Investment Management, Inc. (the “Advisor”) acts as the investment advisor for the Fund. Under Section 15(c) of the Investment Company Act, contracts for investment advisory services are required to be reviewed, evaluated, and approved by a majority of a fund’s directors (the “Directors”), including a majority of the independent Directors, each year.
    
Prior to its consideration of the renewal of the management agreement, the Directors requested and reviewed extensive data and information compiled by the Advisor and certain independent providers of evaluation data concerning the Fund and the services provided to the Fund by the Advisor. This review was in addition to the oversight and evaluation undertaken by the Board and its committees on a continual basis and the information received was supplemental to the extensive information that the Board and its committees receive and consider throughout the year.

In connection with its consideration of the renewal of the management agreement, the Board’s review and evaluation of the services provided by the Advisor included, but was not limited to, the following:

•
the nature, extent, and quality of investment management, shareholder services, and other services provided and to be provided to the Fund;
•
the wide range of other programs and services provided and to be provided to the Fund and its shareholders on a routine and non-routine basis;
•
the investment performance of the Fund, including data comparing the Fund's performance to appropriate benchmarks and/or a peer group of other mutual funds with similar investment objectives and strategies;
•
the cost of owning the Fund compared to the cost of owning similar funds;
•
the compliance policies, procedures, and regulatory experience of the Advisor and the Fund's service providers;
•
financial data showing the cost of services provided to the Fund, the profitability of the Fund to the Advisor, and the overall profitability of the Advisor;
•
strategic plans of the Advisor
•
possible economies of scale associated with the Advisor’s management of the Fund and other accounts under its management;
•
data comparing services provided and charges to the Advisor's other investment management clients;
•
acquired fund fees and expenses;
•
payments and practices by the Fund and the Advisor regarding financial intermediaries, the nature of services provided by intermediaries, and the terms of share classes utilized; and
•
any collateral benefits derived by the Advisor from the management of the Fund.

The Directors held three in-person meetings and one telephonic meeting to review and discuss the information provided. The independent Directors also reviewed responses to supplemental information requests and held active discussions with the Advisor regarding the renewal of the management agreement. The independent Directors had the benefit of the advice of their independent counsel throughout the process.

Factors Considered

The Directors considered all of the information provided by the Advisor, the independent data providers, and independent counsel in connection with the approval. They determined that the

17

information was sufficient for them to evaluate the management agreement for the Fund. In connection with their review, the Directors did not identify any single factor as being all-important or controlling, and each Director may have attributed different levels of importance to different factors. In deciding to renew the management agreement, the Board based its decision on a number of factors, including without limitation the following:

Nature, Extent and Quality of Services - Generally. Under the management agreement, the Advisor is responsible for providing or arranging for all services necessary for the operation of the Fund. The Board noted that the Advisor provides or arranges at its own expense a wide variety of services including without limitation the following:

•
portfolio research and security selection
•
securities trading
•
Fund administration
•
custody of Fund assets
•
daily valuation of the Fund’s portfolio
•
shareholder servicing and transfer agency, including shareholder confirmations, recordkeeping, and communications
•
legal services (except the independent Directors’ counsel)
•
regulatory and portfolio compliance
•
financial reporting
•
marketing and distribution (except amounts paid by the Fund under Rule 12b-1 plans)

The Board noted that many of these services have expanded over time in terms of both quantity and complexity in response to shareholder demands, competition in the industry, changing distribution channels, and the changing regulatory environment. The Board noted specifically the resources the Advisor has committed during the year to compliance with the Department of Labor fiduciary rule and share class modernization.

Investment Management Services. The nature of the investment management services provided to the Fund is quite complex and allows Fund shareholders access to professional money management, instant diversification of their investments within an asset class, the opportunity to easily diversify among asset classes by investing in or exchanging among various American Century Investments funds, and liquidity. In evaluating investment performance, the Board expects the Advisor to manage the Fund in accordance with its investment objectives and approved strategies. Further, the Directors recognize that the Advisor has an obligation to monitor trading activities, and in particular to seek the best execution of fund trades, and to evaluate the use of and payment for research. In providing these services, the Advisor utilizes teams of investment professionals (portfolio managers, analysts, research assistants, and securities traders) who require extensive information technology, research, training, compliance, and other systems to conduct their business. The Board, directly and through its Fund Performance Review Committee, provides oversight of the investment performance process. It regularly reviews investment performance information for the Fund, together with comparative information for appropriate benchmarks and/or peer groups of similarly-managed funds, over different time horizons. The Directors also review detailed performance information provided by the Advisor during the management agreement renewal process. If performance concerns are identified, the Fund receives special reviews until performance improves, during which the Board receives a report from the Advisor regarding the reasons for such results (e.g., market conditions, security selection) and any efforts being undertaken to improve performance. The Fund’s performance was below its benchmark for the one-, three-, five-, and ten-year periods reviewed by the Board. The Board discussed the Fund's performance with the Advisor and was satisfied with the efforts being undertaken by the Advisor. The Board found the investment management services provided by the Advisor to the Fund to be satisfactory and consistent with the management agreement.

Shareholder and Other Services. Under the management agreement, the Advisor provides the Fund with a comprehensive package of transfer agency, shareholder, and other services. The

18

Board, directly and through various committees of the Board, regularly reviews reports and evaluations of such services at its regular meetings. These reports include, but are not limited to, information regarding the operational efficiency and accuracy of the shareholder and transfer agency services provided, staffing levels, shareholder satisfaction (as measured by external as well as internal sources), technology support, new products and services offered to Fund shareholders, securities trading activities, portfolio valuation services, auditing services, and legal and operational compliance activities. Certain aspects of shareholder and transfer agency service level efficiency and the quality of securities trading activities are measured by independent third party providers and are presented in comparison to other fund groups not managed by the Advisor. The Board found the services provided by the Advisor to the Fund under the management agreement to be competitive and of high quality.

Costs of Services and Profitability. The Advisor provides detailed information concerning its cost of providing various services to the Fund, its profitability in managing the Fund (pre- and post-distribution), its overall profitability, and its financial condition. The Directors have reviewed with the Advisor the methodology used to prepare this financial information. This information is considered in evaluating the Advisor’s financial condition, its ability to continue to provide services under the management agreement, and the reasonableness of the current management fee. The Board concluded that the Advisor’s profits were reasonable in light of the services provided to the Fund.

Ethics. The Board generally considers the Advisor’s commitment to providing quality services to shareholders and to conducting its business ethically. They noted that the Advisor’s practices generally meet or exceed industry best practices.

Economies of Scale. The Board also reviewed information provided by the Advisor regarding the possible existence of economies of scale in connection with the management of the Fund. The Board concluded that economies of scale are difficult to measure and predict with precision, especially on a fund-by-fund basis. The Board concluded that the Advisor is appropriately sharing economies of scale through its competitive fee structure, offering competitive fees from fund inception, and through reinvestment in its business to provide shareholders additional content and services. The Board also noted that economies of scale are shared with the Fund and its shareholders through management fee breakpoints that serve to reduce the effective management fee as the assets of the Fund grow.

Comparison to Other Funds’ Fees. The management agreement provides that the Fund pays the Advisor a single, all-inclusive (or unified) management fee for providing all services necessary for the management and operation of the Fund, other than brokerage expenses, expenses attributable to short sales, taxes, interest, extraordinary expenses, and the fees and expenses of the Fund’s independent Directors (including their independent legal counsel) and expenses incurred in connection with the provision of shareholder services and distribution services under a plan adopted pursuant to Rule 12b-1 under the 1940 Act. Under the unified fee structure, the Advisor is responsible for providing all investment advisory, custody, audit, administrative, compliance, recordkeeping, marketing and shareholder services, or arranging and supervising third parties to provide such services. By contrast, most other funds are charged a variety of fees, including an investment advisory fee, a transfer agency fee, an administrative fee, distribution charges, and other expenses. Other than their investment advisory fees and any applicable Rule 12b-1 distribution fees, all other components of the total fees charged by these other funds may be increased without shareholder approval. The Board believes the unified fee structure is a benefit to Fund shareholders because it clearly discloses to shareholders the cost of owning Fund shares, and, since the unified fee cannot be increased without a vote of Fund shareholders, it shifts to the Advisor the risk of increased costs of operating the Fund and provides a direct incentive to minimize administrative inefficiencies. Part of the Board’s analysis of fee levels involves reviewing certain evaluative data compiled by an independent provider comparing the Fund’s unified fee to the total expense ratios of its peers. The unified fee charged to shareholders of the Fund was below the median of the total expense ratios of the Fund’s peer expense universe and was within the range of its peer expense group. The Board discussed with the Advisor the factors that

19

impacted the level of the fee in relation to its peers. The Board concluded that the management fee paid by the Fund to the Advisor under the management agreement is reasonable in light of the services provided to the Fund.

Comparison to Fees and Services Provided to Other Clients of the Advisor. The Directors also requested and received information from the Advisor concerning the nature of the services, fees, costs, and profitability of its advisory services to advisory clients other than the Fund. They observed that these varying types of client accounts require different services and involve different regulatory and entrepreneurial risks than the management of the Fund. The Board analyzed this information and concluded that the fees charged and services provided to the Fund were reasonable by comparison.

Payments to Intermediaries. The Directors also requested and received a description of payments made to intermediaries by the Fund and the Advisor and services provided in response thereto. These payments include various payments made by the Fund or the Advisor to different types of intermediaries and recordkeepers for distribution and service activities provided for the Fund. The Board reviewed such information and received representations from the Advisor that all such payments by the Fund were made pursuant to the Fund's Rule 12b-1 Plan and that all such payments by the Advisor were made from the Advisor's resources and reasonable profits. The Board found the payments to be reasonable in scope and purpose.

Collateral or “Fall-Out” Benefits Derived by the Advisor. The Board considered the existence of collateral benefits the Advisor may receive as a result of its relationship with the Fund. They concluded that the Advisor’s primary business is managing mutual funds and it generally does not use fund or shareholder information to generate profits in other lines of business, and therefore does not derive any significant collateral benefits from them. The Board noted that additional assets from other clients may offer the Advisor some benefit from increased leverage with service providers and counterparties. Additionally, the Advisor receives proprietary research from broker-dealers that execute fund portfolio transactions, which the Board concluded is likely to benefit other clients of the Advisor, as well as Fund shareholders. The Board also determined that the Advisor is able to provide investment management services to certain clients other than the Fund, at least in part, due to its existing infrastructure built to serve the fund complex. The Board concluded that appropriate allocation methodologies had been employed to assign resources and the cost of those resources to these other clients and, where expressly provided, these other client assets may be included with the assets of the Fund to determine breakpoints in the management fee schedule.

Existing Relationship. The Board also considered whether there was any reason for not continuing the existing arrangement with the Advisor. In this regard, the Board was mindful of the potential disruptions of the Fund’s operations and various risks, uncertainties, and other effects that could occur as a result of a decision not to continue such relationship. In particular, the Board recognized that most shareholders have invested in the Fund on the strength of the Advisor’s industry standing and reputation and in the expectation that the Advisor will have a continuing role in providing advisory services to the Fund.

Conclusion of the Directors. As a result of this process, the Board, including all of the independent Directors, taking into account all of the factors discussed above and the information provided by the Advisor and others in connection with its review and throughout the year, determined that the management fee is fair and reasonable in light of the services provided and that the investment management agreement between the Fund and the Advisor should be renewed.

20

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

A description of the policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund is available without charge, upon request, by calling 1-800-345-2021. It is also available on the "About Us" page of American Century Investments’ website at americancentury.com and 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 the "About Us" page at americancentury.com. 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. The fund’s Forms N-Q are available on the SEC’s website at sec.gov, and may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. 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




acihorizblkb99.jpg
 
 
 
 
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 Capital Portfolios, 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.
 
 
 
 
©2017 American Century Proprietary Holdings, Inc. All rights reserved.
CL-SAN-90824  1711
 





acihorizblkb99.jpg
                  

 
 
 
Semiannual Report
 
 
 
September 30, 2017
 
 
 
NT Mid Cap Value Fund







Table of Contents
Fund Characteristics
Shareholder Fee Example
Schedule of Investments
Statement of Assets and Liabilities
Statement of Operations
Statement of Changes in Net Assets
Notes to Financial Statements
Financial Highlights
Approval of Management Agreement
Additional Information



























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 
 
SEPTEMBER 30, 2017
Top Ten Holdings
% of net assets
Northern Trust Corp.
3.0%
Johnson Controls International plc
2.9%
iShares Russell Mid-Cap Value ETF
2.7%
Zimmer Biomet Holdings, Inc.
2.3%
Weyerhaeuser Co.
2.2%
Imperial Oil Ltd.
1.9%
Conagra Brands, Inc.
1.8%
Invesco Ltd.
1.8%
Mondelez International, Inc., Class A
1.6%
PG&E Corp.
1.6%
 
 
Top Five Industries
% of net assets
Oil, Gas and Consumable Fuels
9.3%
Food Products
7.5%
Banks
7.2%
Capital Markets
6.8%
Electric Utilities
6.0%
 
 
Types of Investments in Portfolio
% of net assets
Common Stocks
96.4%
Exchange-Traded Funds
2.7%
Total Equity Exposure
99.1%
Temporary Cash Investments
1.5%
Other Assets and Liabilities
(0.6)%


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 April 1, 2017 to September 30, 2017.

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
4/1/17
Ending
Account Value
9/30/17
Expenses Paid
During Period(1) 
4/1/17 - 9/30/17
Annualized
Expense Ratio(1)
Actual
 
 
 
 
G Class
$1,000
$1,034.30
$2.50
0.49%
Hypothetical
 
 
 
 
G Class
$1,000
$1,022.61
$2.48
0.49%
(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 183, the number of days in the most recent fiscal half-year, divided by 365, 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

SEPTEMBER 30, 2017 (UNAUDITED)
 
Shares
Value
COMMON STOCKS — 96.4%
 
 
Aerospace and Defense — 1.1%
 
 
Textron, Inc.
229,263

$
12,352,690

Auto Components — 0.5%
 
 
Delphi Automotive plc
50,674

4,986,322

Automobiles — 1.0%
 
 
Honda Motor Co. Ltd. ADR
369,466

10,921,415

Banks — 7.2%
 
 
Bank of Hawaii Corp.
83,994

7,001,740

BB&T Corp.
357,141

16,764,198

Comerica, Inc.
25,623

1,954,010

Commerce Bancshares, Inc.
153,986

8,895,771

M&T Bank Corp.
80,265

12,925,875

PNC Financial Services Group, Inc. (The)
53,775

7,247,257

SunTrust Banks, Inc.
144,293

8,624,393

UMB Financial Corp.
48,769

3,632,803

Westamerica Bancorporation
182,953

10,893,022

 
 
77,939,069

Building Products — 2.9%
 
 
Johnson Controls International plc
792,418

31,926,521

Capital Markets — 6.8%
 
 
Ameriprise Financial, Inc.
100,231

14,885,306

Invesco Ltd.
540,649

18,944,341

Northern Trust Corp.
351,881

32,348,420

State Street Corp.
22,451

2,144,969

T. Rowe Price Group, Inc.
58,242

5,279,637

 
 
73,602,673

Commercial Services and Supplies — 0.7%
 
 
Republic Services, Inc.
123,219

8,139,847

Containers and Packaging — 4.2%
 
 
Bemis Co., Inc.
164,328

7,488,427

Graphic Packaging Holding Co.
963,608

13,442,332

Sonoco Products Co.
211,258

10,657,966

WestRock Co.
235,022

13,332,798

 
 
44,921,523

Diversified Telecommunication Services — 1.3%
 
 
Level 3 Communications, Inc.(1) 
263,549

14,044,526

Electric Utilities — 6.0%
 
 
Edison International
200,670

15,485,704

Eversource Energy
81,970

4,954,267

PG&E Corp.
246,836

16,807,063

Pinnacle West Capital Corp.
94,003

7,948,894

Westar Energy, Inc.
61,801

3,065,329

Xcel Energy, Inc.
344,924

16,321,804

 
 
64,583,061

Electrical Equipment — 3.6%
 
 
Eaton Corp. plc
105,916

8,133,290


4

 
Shares
Value
Emerson Electric Co.
223,617

$
14,052,092

Hubbell, Inc.
125,456

14,555,405

Rockwell Automation, Inc.
10,255

1,827,544

 
 
38,568,331

Electronic Equipment, Instruments and Components — 2.3%
 
 
Keysight Technologies, Inc.(1) 
325,483

13,559,622

TE Connectivity Ltd.
133,772

11,111,102

 
 
24,670,724

Energy Equipment and Services — 3.7%
 
 
Baker Hughes a GE Co.
347,528

12,726,475

Halliburton Co.
134,204

6,177,410

Helmerich & Payne, Inc.
133,889

6,976,956

National Oilwell Varco, Inc.
389,834

13,928,769

 
 
39,809,610

Equity Real Estate Investment Trusts (REITs) — 5.5%
 
 
American Tower Corp.
75,672

10,342,849

Boston Properties, Inc.
49,998

6,143,754

Empire State Realty Trust, Inc.
183,913

3,777,573

MGM Growth Properties LLC, Class A
216,842

6,550,797

Piedmont Office Realty Trust, Inc., Class A
422,797

8,523,587

Weyerhaeuser Co.
714,351

24,309,365

 
 
59,647,925

Food and Staples Retailing — 1.2%
 
 
Sysco Corp.
240,311

12,964,778

Food Products — 7.5%
 
 
Conagra Brands, Inc.
577,611

19,488,595

General Mills, Inc.
286,317

14,819,768

J.M. Smucker Co. (The)
81,824

8,585,792

Kellogg Co.
202,511

12,630,611

Lamb Weston Holdings, Inc.
77,722

3,644,385

Mondelez International, Inc., Class A
416,229

16,923,871

Orkla ASA
486,829

4,993,902

 
 
81,086,924

Gas Utilities — 1.5%
 
 
Atmos Energy Corp.
84,787

7,108,542

Spire, Inc.
121,177

9,045,863

 
 
16,154,405

Health Care Equipment and Supplies — 3.4%
 
 
Koninklijke Philips NV
132,617

5,474,931

STERIS plc
80,838

7,146,079

Zimmer Biomet Holdings, Inc.
209,270

24,503,425

 
 
37,124,435

Health Care Providers and Services — 5.8%
 
 
Cardinal Health, Inc.
178,500

11,945,220

Express Scripts Holding Co.(1) 
152,767

9,673,206

HCA Healthcare, Inc.(1) 
139,349

11,090,787

LifePoint Health, Inc.(1) 
228,928

13,254,931

McKesson Corp.
59,888

9,199,396

Quest Diagnostics, Inc.
76,079

7,124,038

 
 
62,287,578


5

 
Shares
Value
Hotels, Restaurants and Leisure — 0.4%
 
 
Carnival Corp.
63,182

$
4,079,662

Household Durables — 0.9%
 
 
PulteGroup, Inc.
371,762

10,160,255

Insurance — 5.5%
 
 
Aflac, Inc.
76,464

6,223,405

Arthur J. Gallagher & Co.
122,181

7,520,241

Brown & Brown, Inc.
108,077

5,208,231

Chubb Ltd.
102,732

14,644,447

ProAssurance Corp.
88,497

4,836,361

Reinsurance Group of America, Inc.
63,734

8,892,805

Torchmark Corp.
42,903

3,436,101

Travelers Cos., Inc. (The)
22,899

2,805,585

Unum Group
106,793

5,460,326

 
 
59,027,502

Leisure Products — 0.5%
 
 
Mattel, Inc.
373,985

5,789,288

Machinery — 2.5%
 
 
Cummins, Inc.
47,183

7,928,159

Ingersoll-Rand plc
121,809

10,861,709

PACCAR, Inc.
58,636

4,241,728

Parker-Hannifin Corp.
21,097

3,692,397

 
 
26,723,993

Multi-Utilities — 1.4%
 
 
Ameren Corp.
141,523

8,185,690

NorthWestern Corp.
121,049

6,892,530

 
 
15,078,220

Multiline Retail — 0.8%
 
 
Target Corp.
139,032

8,204,278

Oil, Gas and Consumable Fuels — 9.3%
 
 
Anadarko Petroleum Corp.
227,803

11,128,177

Devon Energy Corp.
256,095

9,401,247

EQT Corp.
232,058

15,139,464

Imperial Oil Ltd.
654,207

20,898,971

Marathon Petroleum Corp.
174,373

9,778,838

Noble Energy, Inc.
489,847

13,892,061

Occidental Petroleum Corp.
229,195

14,716,611

Spectra Energy Partners LP
118,483

5,258,275

 
 
100,213,644

Road and Rail — 1.1%
 
 
Heartland Express, Inc.
472,657

11,854,238

Semiconductors and Semiconductor Equipment — 4.9%
 
 
Applied Materials, Inc.
297,848

15,514,903

Lam Research Corp.
58,353

10,797,639

Maxim Integrated Products, Inc.
333,255

15,899,596

Teradyne, Inc.
295,170

11,006,889

 
 
53,219,027

Specialty Retail — 1.1%
 
 
Advance Auto Parts, Inc.
123,381

12,239,395

Thrifts and Mortgage Finance — 0.9%
 
 
Capitol Federal Financial, Inc.
685,985

10,083,979


6

 
Shares
Value
Trading Companies and Distributors — 0.9%
 
 
MSC Industrial Direct Co., Inc., Class A
123,898

$
9,362,972

TOTAL COMMON STOCKS
(Cost $858,035,629)
 
1,041,768,810

EXCHANGE-TRADED FUNDS — 2.7%
 
 
iShares Russell Mid-Cap Value ETF
(Cost $24,342,872)
349,516

29,684,394

TEMPORARY CASH INVESTMENTS — 1.5%
 
 
Repurchase Agreement, BMO Capital Markets Corp., (collateralized by various U.S. Treasury obligations, 0.125% - 3.875%, 6/30/18 - 11/15/46, valued at $9,877,618), in a joint trading account at 0.95%, dated 9/29/17, due 10/2/17 (Delivery value $9,686,263)
 
9,685,496

Repurchase Agreement, Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 2.00%, 11/15/26, valued at $6,503,484), at 0.34%, dated 9/29/17, due 10/2/17 (Delivery value $6,375,181)
 
6,375,000

TOTAL TEMPORARY CASH INVESTMENTS
(Cost $16,060,496)
 
16,060,496

TOTAL INVESTMENT SECURITIES — 100.6%
(Cost $898,438,997)
 
1,087,513,700

OTHER ASSETS AND LIABILITIES — (0.6)%
 
(6,380,195
)
TOTAL NET ASSETS — 100.0%
 
$
1,081,133,505


FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
Currency Purchased
Currency Sold
Counterparty
Settlement Date
Unrealized Appreciation
(Depreciation)
USD
17,582,398
CAD
21,742,570
Morgan Stanley
12/29/17
$
147,138

EUR
295,125
USD
350,006
UBS AG
12/29/17
529

USD
4,926,576
EUR
4,156,501
UBS AG
12/29/17
(10,328)

USD
6,684,325
JPY
743,073,057
Credit Suisse AG
12/29/17
51,653

USD
458,794
NOK
3,616,992
JPMorgan Chase Bank N.A.
12/29/17
3,727

USD
236,892
NOK
1,863,185
JPMorgan Chase Bank N.A.
12/29/17
2,478

USD
326,832
NOK
2,561,383
JPMorgan Chase Bank N.A.
12/29/17
4,575

USD
360,226
NOK
2,817,658
JPMorgan Chase Bank N.A.
12/29/17
5,726

USD
351,563
NOK
2,738,818
JPMorgan Chase Bank N.A.
12/29/17
6,982

USD
265,800
NOK
2,069,403
JPMorgan Chase Bank N.A.
12/29/17
5,441

USD
233,290
NOK
1,820,416
JPMorgan Chase Bank N.A.
12/29/17
4,257

USD
311,391
NOK
2,423,663
JPMorgan Chase Bank N.A.
12/29/17
6,461

USD
170,191
NOK
1,328,731
JPMorgan Chase Bank N.A.
12/29/17
3,018

USD
455,879
NOK
3,589,836
JPMorgan Chase Bank N.A.
12/29/17
4,229

USD
221,848
NOK
1,758,378
JPMorgan Chase Bank N.A.
12/29/17
620

USD
395,592
NOK
3,134,332
JPMorgan Chase Bank N.A.
12/29/17
1,250

USD
445,907
NOK
3,547,098
JPMorgan Chase Bank N.A.
12/29/17
(367)

 
 
 
 
 
 
$
237,389



7

NOTES TO SCHEDULE OF INVESTMENTS
ADR
-
American Depositary Receipt
CAD
-
Canadian Dollar
EUR
-
Euro
JPY
-
Japanese Yen
NOK
-
Norwegian Krone
USD
-
United States Dollar
(1)
Non-income producing.


See Notes to Financial Statements.

8

Statement of Assets and Liabilities
SEPTEMBER 30, 2017 (UNAUDITED)
 
Assets
 
Investment securities, at value (cost of $898,438,997)
$
1,087,513,700

Cash
21,035

Receivable for investments sold
7,674,788

Receivable for capital shares sold
1,342,358

Unrealized appreciation on forward foreign currency exchange contracts
248,084

Dividends and interest receivable
1,798,291

 
1,098,598,256

 
 
Liabilities
 
Payable for investments purchased
2,940,070

Payable for capital shares redeemed
14,513,986

Unrealized depreciation on forward foreign currency exchange contracts
10,695

 
17,464,751

 
 
Net Assets
$
1,081,133,505

 
 
G Class Capital Shares, $0.01 Par Value
 
Shares authorized
550,000,000

Shares outstanding
76,722,023

 
 
Net Asset Value Per Share
$
14.09

 
 
Net Assets Consist of:
 
Capital (par value and paid-in surplus)
$
830,299,705

Undistributed net investment income
813,156

Undistributed net realized gain
60,708,263

Net unrealized appreciation
189,312,381

 
$
1,081,133,505



See Notes to Financial Statements.


9

Statement of Operations
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2017 (UNAUDITED)
 
Investment Income (Loss)
 
Income:
 
Dividends (net of foreign taxes withheld of $85,023)
$
15,686,307

Interest
80,647

 
15,766,954

 
 
Expenses:
 
Management fees
3,957,472

Directors' fees and expenses
17,907

Other expenses
41

 
3,975,420

Fees waived(1)
(1,294,202
)
 
2,681,218

 
 
Net investment income (loss)
13,085,736

 
 
Realized and Unrealized Gain (Loss)
 
Net realized gain (loss) on:
 
Investment transactions
46,861,215

Forward foreign currency exchange contract transactions
(1,787,050
)
Foreign currency translation transactions
1,355

 
45,075,520

 
 
Change in net unrealized appreciation (depreciation) on:
 
Investments
(21,450,202
)
Forward foreign currency exchange contracts
94,236

Translation of assets and liabilities in foreign currencies
4,211

 
(21,351,755
)
 
 
Net realized and unrealized gain (loss)
23,723,765

 
 
Net Increase (Decrease) in Net Assets Resulting from Operations
$
36,809,501


(1)
Amount consists of $1,282,994 and $11,208 for G Class and R6 Class, respectively.


See Notes to Financial Statements.


10

Statement of Changes in Net Assets
SIX MONTHS ENDED SEPTEMBER 30, 2017 (UNAUDITED) AND YEAR ENDED MARCH 31, 2017
Increase (Decrease) in Net Assets
September 30, 2017
March 31, 2017
Operations
 
 
Net investment income (loss)
$
13,085,736

$
15,338,407

Net realized gain (loss)
45,075,520

67,792,609

Change in net unrealized appreciation (depreciation)
(21,351,755)

104,625,026

Net increase (decrease) in net assets resulting from operations
36,809,501

187,756,042

 
 
 
Distributions to Shareholders
 
 
From net investment income:
 
 
G Class
(12,050,144)

(14,789,427)

R6 Class
(365,288)

(1,637,258)

From net realized gains:
 
 
G Class
—

(29,600,703)

R6 Class
—

(3,155,941)

Decrease in net assets from distributions
(12,415,432)

(49,183,329)

 
 
 
Capital Share Transactions
 
 
Net increase (decrease) in net assets from capital share transactions (Note 5)
9,051,148

6,724,385

 
 
 
Net increase (decrease) in net assets
33,445,217

145,297,098

 
 
 
Net Assets
 
 
Beginning of period
1,047,688,288

902,391,190

End of period
$
1,081,133,505

$
1,047,688,288

 
 
 
Undistributed net investment income
$
813,156

$
142,852


See Notes to Financial Statements.


11

Notes to Financial Statements

SEPTEMBER 30, 2017 (UNAUDITED)

1. Organization

American Century Capital Portfolios, 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 Mid Cap Value 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. Income is a secondary objective. 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 (formerly Institutional Class). On July 31, 2017, all outstanding R6 Class shares were converted to G Class shares and the fund discontinued offering the R6 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. 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.
 
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

12

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. If significant fluctuations in foreign markets are identified, 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.

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.

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.


13

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 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 annual management fee is 0.65% for the G Class. Prior to July 31, 2017, the annual management fee was 0.80% for the G Class and 0.65% for the R6 Class. From April 1, 2017 through July 30, 2017, the investment advisor agreed to waive 0.03% of the fund's management fee. Effective July 31, 2017, 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 effective annual management fee for the period ended September 30, 2017 was 0.75% before waiver and 0.49% after waiver for the G Class.

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 $2,586,641 and $2,510,726, respectively. The effect of interfund transactions on the Statement of Operations was $771,173 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 September 30, 2017 were $275,496,817 and $238,818,930, respectively.


14

5. Capital Share Transactions

Transactions in shares of the fund were as follows:
 
Six months ended
September 30, 2017
Year ended
March 31, 2017
 
Shares
Amount
Shares
Amount
G Class/Shares Authorized
550,000,000

 
525,000,000

 
Sold
12,414,149

$
172,356,767

4,361,165

$
57,191,676

Issued in reinvestment of distributions
870,072

12,050,144

3,292,025

44,390,130

Redeemed
(4,446,392
)
(62,027,542
)
(10,151,164
)
(135,939,215
)
 
8,837,829

122,379,369

(2,497,974
)
(34,357,409
)
R6 Class/Shares Authorized
N/A

 
50,000,000

 
Sold
855,387

11,802,674

3,702,300

48,692,735

Issued in reinvestment of distributions
26,318

365,288

355,086

4,793,199

Redeemed
(8,999,664
)
(125,496,183
)
(928,328
)
(12,404,140
)
 
(8,117,959
)
(113,328,221
)
3,129,058

41,081,794

Net increase (decrease)
719,870

$
9,051,148

631,084

$
6,724,385


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. There were no significant transfers between levels during the period.

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
$
1,010,401,006

$
31,367,804

—

Exchange-Traded Funds
29,684,394

—

—

Temporary Cash Investments
—

16,060,496

—

 
$
1,040,085,400

$
47,428,300

—

Other Financial Instruments
 
 
 
Forward Foreign Currency Exchange Contracts
—

$
248,084

—

      
 
 
 
Liabilities
 
 
 
Other Financial Instruments
 
 
 
Forward Foreign Currency Exchange Contracts
—

$
10,695

—



15

7. Derivative Instruments

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. 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 $35,102,324.

The value of foreign currency risk derivative instruments as of September 30, 2017, is disclosed on the Statement of Assets and Liabilities as an asset of $248,084 in unrealized appreciation on forward foreign currency exchange contracts and a liability of $10,695 in unrealized depreciation on forward foreign currency exchange contracts. For the six months ended September 30, 2017, the effect of foreign currency risk derivative instruments on the Statement of Operations was $(1,787,050) in net realized gain (loss) on forward foreign currency exchange contract transactions and $94,236 in change in net unrealized appreciation (depreciation) on forward foreign currency exchange contracts.

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
$
911,783,685

Gross tax appreciation of investments
$
200,632,128

Gross tax depreciation of investments
(24,902,113
)
Net tax appreciation (depreciation) of investments
$
175,730,015


The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales.


16

Financial Highlights
For a Share Outstanding Throughout the Years Ended March 31 (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(3)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2017(4)
$13.79
0.17
0.29
0.46
(0.16)
—
(0.16)
$14.09
3.43%
0.49%(5)
0.75%(5)
2.43%(5)
2.17%(5)
23%

$1,081,134

2017
$11.97
0.20
2.30
2.50
(0.22)
(0.46)
(0.68)
$13.79
20.98%
0.78%
0.80%
1.55%
1.53%
60%

$935,804

2016
$12.82
0.17
0.05
0.22
(0.17)
(0.90)
(1.07)
$11.97
2.13%
0.80%
0.81%
1.39%
1.38%
67%

$842,671

2015
$12.62
0.18
1.56
1.74
(0.17)
(1.37)
(1.54)
$12.82
14.05%
0.80%
0.80%
1.37%
1.37%
67%

$762,209

2014
$11.41
0.19
2.15
2.34
(0.18)
(0.95)
(1.13)
$12.62
21.19%
0.80%
0.80%
1.55%
1.55%
69%

$596,655

2013
$10.16
0.19
1.59
1.78
(0.22)
(0.31)
(0.53)
$11.41
18.32%
0.80%
0.80%
1.89%
1.89%
71%

$423,477

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)
Prior to July 31, 2017, the G Class was referred to as the Institutional Class.
(4)
Six months ended September 30, 2017 (unaudited).
(5)
Annualized.

See Notes to Financial Statements.


Approval of Management Agreement


At a meeting held on June 29, 2017, the Fund’s Board of Directors (the "Board") unanimously approved the renewal of the management agreement pursuant to which American Century Investment Management, Inc. (the “Advisor”) acts as the investment advisor for the Fund. Under Section 15(c) of the Investment Company Act, contracts for investment advisory services are required to be reviewed, evaluated, and approved by a majority of a fund’s directors (the “Directors”), including a majority of the independent Directors, each year.
    
Prior to its consideration of the renewal of the management agreement, the Directors requested and reviewed extensive data and information compiled by the Advisor and certain independent providers of evaluation data concerning the Fund and the services provided to the Fund by the Advisor. This review was in addition to the oversight and evaluation undertaken by the Board and its committees on a continual basis and the information received was supplemental to the extensive information that the Board and its committees receive and consider throughout the year.

In connection with its consideration of the renewal of the management agreement, the Board’s review and evaluation of the services provided by the Advisor included, but was not limited to, the following:

•
the nature, extent, and quality of investment management, shareholder services, and other services provided and to be provided to the Fund;
•
the wide range of other programs and services provided and to be provided to the Fund and its shareholders on a routine and non-routine basis;
•
the investment performance of the Fund, including data comparing the Fund's performance to appropriate benchmarks and/or a peer group of other mutual funds with similar investment objectives and strategies;
•
the cost of owning the Fund compared to the cost of owning similar funds;
•
the compliance policies, procedures, and regulatory experience of the Advisor and the Fund's service providers;
•
financial data showing the cost of services provided to the Fund, the profitability of the Fund to the Advisor, and the overall profitability of the Advisor;
•
strategic plans of the Advisor
•
possible economies of scale associated with the Advisor’s management of the Fund and other accounts under its management;
•
data comparing services provided and charges to the Advisor's other investment management clients;
•
acquired fund fees and expenses;
•
payments and practices by the Fund and the Advisor regarding financial intermediaries, the nature of services provided by intermediaries, and the terms of share classes utilized; and
•
any collateral benefits derived by the Advisor from the management of the Fund.

The Directors held three in-person meetings and one telephonic meeting to review and discuss the information provided. The independent Directors also reviewed responses to supplemental information requests and held active discussions with the Advisor regarding the renewal of the management agreement. The independent Directors had the benefit of the advice of their independent counsel throughout the process.

Factors Considered

The Directors considered all of the information provided by the Advisor, the independent data providers, and independent counsel in connection with the approval. They determined that the

18

information was sufficient for them to evaluate the management agreement for the Fund. In connection with their review, the Directors did not identify any single factor as being all-important or controlling, and each Director may have attributed different levels of importance to different factors. In deciding to renew the management agreement, the Board based its decision on a number of factors, including without limitation the following:

Nature, Extent and Quality of Services - Generally. Under the management agreement, the Advisor is responsible for providing or arranging for all services necessary for the operation of the Fund. The Board noted that the Advisor provides or arranges at its own expense a wide variety of services including without limitation the following:

•
portfolio research and security selection
•
securities trading
•
Fund administration
•
custody of Fund assets
•
daily valuation of the Fund’s portfolio
•
shareholder servicing and transfer agency, including shareholder confirmations, recordkeeping, and communications
•
legal services (except the independent Directors’ counsel)
•
regulatory and portfolio compliance
•
financial reporting
•
marketing and distribution (except amounts paid by the Fund under Rule 12b-1 plans)

The Board noted that many of these services have expanded over time in terms of both quantity and complexity in response to shareholder demands, competition in the industry, changing distribution channels, and the changing regulatory environment. The Board noted specifically the resources the Advisor has committed during the year to compliance with the Department of Labor fiduciary rule and share class modernization.

Investment Management Services. The nature of the investment management services provided to the Fund is quite complex and allows Fund shareholders access to professional money management, instant diversification of their investments within an asset class, the opportunity to easily diversify among asset classes by investing in or exchanging among various American Century Investments funds, and liquidity. In evaluating investment performance, the Board expects the Advisor to manage the Fund in accordance with its investment objectives and approved strategies. Further, the Directors recognize that the Advisor has an obligation to monitor trading activities, and in particular to seek the best execution of fund trades, and to evaluate the use of and payment for research. In providing these services, the Advisor utilizes teams of investment professionals (portfolio managers, analysts, research assistants, and securities traders) who require extensive information technology, research, training, compliance, and other systems to conduct their business. The Board, directly and through its Fund Performance Review Committee, provides oversight of the investment performance process. It regularly reviews investment performance information for the Fund, together with comparative information for appropriate benchmarks and/or peer groups of similarly-managed funds, over different time horizons. The Directors also review detailed performance information provided by the Advisor during the management agreement renewal process. If performance concerns are identified, the Fund receives special reviews until performance improves, during which the Board receives a report from the Advisor regarding the reasons for such results (e.g., market conditions, security selection) and any efforts being undertaken to improve performance. The Fund’s performance was above its benchmark for the one-, three-, five-, and ten-year periods reviewed by the Board. The Board found the investment management services provided by the Advisor to the Fund to be satisfactory and consistent with the management agreement.

Shareholder and Other Services. Under the management agreement, the Advisor provides the Fund with a comprehensive package of transfer agency, shareholder, and other services. The Board, directly and through various committees of the Board, regularly reviews reports and

19

evaluations of such services at its regular meetings. These reports include, but are not limited to, information regarding the operational efficiency and accuracy of the shareholder and transfer agency services provided, staffing levels, shareholder satisfaction (as measured by external as well as internal sources), technology support, new products and services offered to Fund shareholders, securities trading activities, portfolio valuation services, auditing services, and legal and operational compliance activities. Certain aspects of shareholder and transfer agency service level efficiency and the quality of securities trading activities are measured by independent third party providers and are presented in comparison to other fund groups not managed by the Advisor. The Board found the services provided by the Advisor to the Fund under the management agreement to be competitive and of high quality.

Costs of Services and Profitability. The Advisor provides detailed information concerning its cost of providing various services to the Fund, its profitability in managing the Fund (pre- and post-distribution), its overall profitability, and its financial condition. The Directors have reviewed with the Advisor the methodology used to prepare this financial information. This information is considered in evaluating the Advisor’s financial condition, its ability to continue to provide services under the management agreement, and the reasonableness of the current management fee. The Board concluded that the Advisor’s profits were reasonable in light of the services provided to the Fund.

Ethics. The Board generally considers the Advisor’s commitment to providing quality services to shareholders and to conducting its business ethically. They noted that the Advisor’s practices generally meet or exceed industry best practices.

Economies of Scale. The Board also reviewed information provided by the Advisor regarding the possible existence of economies of scale in connection with the management of the Fund. The Board concluded that economies of scale are difficult to measure and predict with precision, especially on a fund-by-fund basis. The Board concluded that the Advisor is appropriately sharing economies of scale through its competitive fee structure, offering competitive fees from fund inception, and through reinvestment in its business to provide shareholders additional content and services.

Comparison to Other Funds’ Fees. The management agreement provides that the Fund pays the Advisor a single, all-inclusive (or unified) management fee for providing all services necessary for the management and operation of the Fund, other than brokerage expenses, expenses attributable to short sales, taxes, interest, extraordinary expenses, and the fees and expenses of the Fund’s independent Directors (including their independent legal counsel) and expenses incurred in connection with the provision of shareholder services and distribution services under a plan adopted pursuant to Rule 12b-1 under the 1940 Act. Under the unified fee structure, the Advisor is responsible for providing all investment advisory, custody, audit, administrative, compliance, recordkeeping, marketing and shareholder services, or arranging and supervising third parties to provide such services. By contrast, most other funds are charged a variety of fees, including an investment advisory fee, a transfer agency fee, an administrative fee, distribution charges, and other expenses. Other than their investment advisory fees and any applicable Rule 12b-1 distribution fees, all other components of the total fees charged by these other funds may be increased without shareholder approval. The Board believes the unified fee structure is a benefit to Fund shareholders because it clearly discloses to shareholders the cost of owning Fund shares, and, since the unified fee cannot be increased without a vote of Fund shareholders, it shifts to the Advisor the risk of increased costs of operating the Fund and provides a direct incentive to minimize administrative inefficiencies. Part of the Board’s analysis of fee levels involves reviewing certain evaluative data compiled by an independent provider comparing the Fund’s unified fee to the total expense ratios of its peers. The unified fee charged to shareholders of the Fund was at the median of the total expense ratios of the Fund’s peer expense universe and was within the range of its peer expense group. The Board discussed with the Advisor the factors that impacted the level of the fee in relation to its peers. The Board concluded that the management fee paid by the Fund to the Advisor under the management agreement is reasonable in light of the services provided to the Fund.

20


Comparison to Fees and Services Provided to Other Clients of the Advisor. The Directors also requested and received information from the Advisor concerning the nature of the services, fees, costs, and profitability of its advisory services to advisory clients other than the Fund. They observed that these varying types of client accounts require different services and involve different regulatory and entrepreneurial risks than the management of the Fund. The Board analyzed this information and concluded that the fees charged and services provided to the Fund were reasonable by comparison.

Payments to Intermediaries. The Directors also requested and received a description of payments made to intermediaries by the Fund and the Advisor and services provided in response thereto. These payments include various payments made by the Fund or the Advisor to different types of intermediaries and recordkeepers for distribution and service activities provided for the Fund. The Board reviewed such information and received representations from the Advisor that all such payments by the Fund were made pursuant to the Fund's Rule 12b-1 Plan and that all such payments by the Advisor were made from the Advisor's resources and reasonable profits. The Board found the payments to be reasonable in scope and purpose.

Collateral or “Fall-Out” Benefits Derived by the Advisor. The Board considered the existence of collateral benefits the Advisor may receive as a result of its relationship with the Fund. They concluded that the Advisor’s primary business is managing mutual funds and it generally does not use fund or shareholder information to generate profits in other lines of business, and therefore does not derive any significant collateral benefits from them. The Board noted that additional assets from other clients may offer the Advisor some benefit from increased leverage with service providers and counterparties. Additionally, the Advisor receives proprietary research from broker-dealers that execute fund portfolio transactions, which the Board concluded is likely to benefit other clients of the Advisor, as well as Fund shareholders. The Board also determined that the Advisor is able to provide investment management services to certain clients other than the Fund, at least in part, due to its existing infrastructure built to serve the fund complex. The Board concluded that appropriate allocation methodologies had been employed to assign resources and the cost of those resources to these other clients and, where expressly provided, these other client assets may be included with the assets of the Fund to determine breakpoints in the management fee schedule.

Existing Relationship. The Board also considered whether there was any reason for not continuing the existing arrangement with the Advisor. In this regard, the Board was mindful of the potential disruptions of the Fund’s operations and various risks, uncertainties, and other effects that could occur as a result of a decision not to continue such relationship. In particular, the Board recognized that most shareholders have invested in the Fund on the strength of the Advisor’s industry standing and reputation and in the expectation that the Advisor will have a continuing role in providing advisory services to the Fund.

Conclusion of the Directors. As a result of this process, the Board, including all of the independent Directors, taking into account all of the factors discussed above and the information provided by the Advisor and others in connection with its review and throughout the year, determined that the management fee is fair and reasonable in light of the services provided and that the investment management agreement between the Fund and the Advisor should be renewed.

21

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

A description of the policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund is available without charge, upon request, by calling 1-800-345-2021. It is also available on the "About Us" page of American Century Investments’ website at americancentury.com and 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 the "About Us" page at americancentury.com. 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. The fund’s Forms N-Q are available on the SEC’s website at sec.gov, and may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. 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.

22

Notes

23

Notes


24




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Contact Us
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or 816-531-5575
 
Investors Using Advisors
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1-800-345-6488
 
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American Century Capital Portfolios, 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.
 
 
 
 
©2017 American Century Proprietary Holdings, Inc. All rights reserved.
CL-SAN-90825  1711
 





acihorizblkb99.jpg
                  

 
 
 
Semiannual Report
 
 
 
September 30, 2017
 
 
 
Small Cap Value Fund






Table of Contents
President’s Letter
2

Fund Characteristics

Shareholder Fee Example

Schedule of Investments

Statement of Assets and Liabilities

Statement of Operations

Statement of Changes in Net Assets

Notes to Financial Statements

Financial Highlights

Approval of Management Agreement

Additional Information



























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

jthomasrev0514.jpg Jonathan Thomas

Dear Investor:

Thank you for reviewing this semiannual report for the period ended September 30, 2017. 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, we encourage you to visit our website, americancentury.com.

All Major Asset Classes Provided Positive Performance

From large-cap stocks to short-maturity Treasuries, the U.S. financial markets delivered across-the-board gains for the six-month period. Stock investors responded enthusiastically to two consecutive quarters of double-digit earnings growth for S&P 500 companies, the first such back-to-back performance since 2011. In addition, gross domestic product growth accelerated to an annualized rate of 3.1% in the April-June quarter, up from 1.2% in the first quarter and the fastest pace in two years. Meanwhile, despite setbacks and delays for some components of President Trump’s pro-growth agenda, equity investors generally remained optimistic regarding future U.S. economic gains.

Against this backdrop, the S&P 500 Index reached several milestones and returned 7.71% for the six-month period. In terms of equity styles, riskier and economically sensitive stocks generally remained in favor. For example, small-cap stocks outperformed their mid- and large-cap peers, while growth stocks largely outperformed value stocks across the capitalization spectrum.

Investor preferences for risk also extended to the fixed-income market, where spread (non-Treasury) sectors were top performers and drove the Bloomberg Barclays U.S. Aggregate Bond Index to a 2.31% gain for the six-month period. The Federal Reserve (the Fed) remained relatively supportive, raising rates only once (by 25 basis points in June) amid a low-inflation backdrop and announcing a gradual approach to balance sheet normalization. Meanwhile, upbeat corporate earnings, a rallying stock market, robust investor demand for yield, and favorable supply/demand dynamics in the corporate credit markets led to outperformance among corporate bonds.

As Congress considers corporate tax cuts and other growth-oriented reforms, and the Fed continues to pursue policy normalization, new opportunities and challenges likely will emerge. We continue to believe in a disciplined, diversified, and risk-aware approach, using professionally managed portfolios in pursuit of investment goals. We appreciate your continued trust in us.


Sincerely,
image48a01.jpg
Jonathan Thomas
President and Chief Executive Officer
American Century Investments

2

Fund Characteristics 
SEPTEMBER 30, 2017
Top Ten Holdings
% of net assets
Graphic Packaging Holding Co.
2.3%
BankUnited, Inc.
2.2%
Valley National Bancorp
2.1%
Bank of the Ozarks, Inc.
2.1%
Silgan Holdings, Inc.
2.0%
Compass Diversified Holdings
1.9%
CSW Industrials, Inc.
1.8%
Validus Holdings Ltd.
1.8%
Teradata Corp.
1.7%
FNB Corp.
1.7%
 
 
Top Five Industries
% of net assets
Banks
18.8%
Equity Real Estate Investment Trusts (REITs)
7.8%
Insurance
7.4%
Chemicals
5.6%
IT Services
5.1%
 
 
Types of Investments in Portfolio
% of net assets
Common Stocks
96.4%
Convertible Preferred Stocks
0.7%
Total Equity Exposure
97.1%
Temporary Cash Investments
2.4%
Other Assets and Liabilities
0.5%





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 April 1, 2017 to September 30, 2017 (except as noted).

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
4/1/17
Ending
Account Value
9/30/17
Expenses Paid
During Period(1)
4/1/17 - 9/30/17
Annualized
Expense Ratio(1)
Actual
 
 
 
 
Investor Class
$1,000
$1,037.10
$6.38
1.25%
I Class
$1,000
$1,038.20
$5.36
1.05%
Y Class
$1,000
$1,055.10(2)
$4.41(3)
0.90%
A Class
$1,000
$1,034.90
$7.65
1.50%
C Class
$1,000
$1,032.20
$11.46
2.25%
R Class
$1,000
$1,034.50
$8.93
1.75%
R5 Class
$1,000
$1,054.40(2)
$5.14(3)
1.05%
R6 Class
$1,000
$1,039.40
$4.60
0.90%
Hypothetical
 
 
 
 
Investor Class
$1,000
$1,018.80
$6.33
1.25%
I Class
$1,000
$1,019.80
$5.32
1.05%
Y Class
$1,000
$1,020.56(4)
$4.56(4)
0.90%
A Class
$1,000
$1,017.55
$7.59
1.50%
C Class
$1,000
$1,013.79
$11.36
2.25%
R Class
$1,000
$1,016.30
$8.85
1.75%
R5 Class
$1,000
$1,019.80(4)
$5.32(4)
1.05%
R6 Class
$1,000
$1,020.56
$4.56
0.90%
(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 183, the number of days in the most recent fiscal half-year, divided by 365, 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.
(2)
Ending account value based on actual return from April 10, 2017 (commencement of sale) through September 30, 2017.
(3)
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 174, the number of days in the period from April 10, 2017 (commencement of sale) through September 30, 2017, divided by 365, to reflect the period. Had the class been available for the full period, the expenses paid during the period would have been higher.
(4)
Ending account value and expenses paid during the period assumes the class had been available throughout the entire period and are calculated using the class's annualized expense ratio listed in the table above.


5

Schedule of Investments

SEPTEMBER 30, 2017 (UNAUDITED)
 
Shares
Value
COMMON STOCKS — 96.4%
 
 
Auto Components — 0.6%
 
 
Cooper Tire & Rubber Co.
240,000

$
8,976,000

Banks — 18.8%
 
 
Bank of the Ozarks, Inc.
715,000

34,355,750

BankUnited, Inc.
1,015,000

36,103,550

Boston Private Financial Holdings, Inc.
1,000,000

16,550,000

FCB Financial Holdings, Inc., Class A(1) 
520,000

25,116,000

First Financial Bankshares, Inc.
140,000

6,328,000

First Hawaiian, Inc.
710,000

21,505,900

FNB Corp.
1,980,000

27,779,400

LegacyTexas Financial Group, Inc.
540,000

21,556,800

Popular, Inc.
200,000

7,188,000

Southside Bancshares, Inc.
347,625

12,639,645

Texas Capital Bancshares, Inc.(1) 
240,000

20,592,000

UMB Financial Corp.
320,000

23,836,800

Valley National Bancorp
2,854,997

34,402,714

Western Alliance Bancorp(1) 
255,000

13,535,400

 
 
301,489,959

Building Products — 3.0%
 
 
Apogee Enterprises, Inc.
280,000

13,512,800

Continental Building Products, Inc.(1) 
65,000

1,690,000

CSW Industrials, Inc.(1) 
664,663

29,477,804

NCI Building Systems, Inc.(1) 
275,000

4,290,000

 
 
48,970,604

Capital Markets — 1.5%
 
 
Ares Management LP
916,229

17,087,671

Donnelley Financial Solutions, Inc.(1) 
305,000

6,575,800

 
 
23,663,471

Chemicals — 5.6%
 
 
Innophos Holdings, Inc.
470,000

23,119,300

Innospec, Inc.
340,000

20,961,000

Minerals Technologies, Inc.
340,000

24,021,000

PolyOne Corp.
550,000

22,016,500

 
 
90,117,800

Commercial Services and Supplies — 2.6%
 
 
Ceco Environmental Corp.
386,198

3,267,235

Deluxe Corp.
185,000

13,497,600

InnerWorkings, Inc.(1) 
1,045,000

11,756,250

Interface, Inc.
250,000

5,475,000

LSC Communications, Inc.
294,857

4,868,089

Multi-Color Corp.
30,000

2,458,500

 
 
41,322,674

Construction and Engineering — 1.9%
 
 
Dycom Industries, Inc.(1) 
205,000

17,605,400

Valmont Industries, Inc.
85,000

13,438,500

 
 
31,043,900


6

 
Shares
Value
Containers and Packaging — 5.1%
 
 
Bemis Co., Inc.
265,000

$
12,076,050

Graphic Packaging Holding Co.
2,655,000

37,037,250

Silgan Holdings, Inc.
1,095,000

32,225,850

 
 
81,339,150

Diversified Financial Services — 1.9%
 
 
Compass Diversified Holdings
1,738,995

30,867,161

Electrical Equipment — 1.4%
 
 
AZZ, Inc.
264,745

12,893,081

Thermon Group Holdings, Inc.(1) 
510,000

9,174,900

 
 
22,067,981

Electronic Equipment, Instruments and Components — 3.7%
 
 
AVX Corp.
100,000

1,823,000

Belden, Inc.
135,000

10,871,550

OSI Systems, Inc.(1) 
165,000

15,076,050

Tech Data Corp.(1) 
100,000

8,885,000

TTM Technologies, Inc.(1) 
535,000

8,222,950

VeriFone Systems, Inc.(1) 
700,000

14,196,000

 
 
59,074,550

Energy Equipment and Services — 1.3%
 
 
Dril-Quip, Inc.(1) 
110,000

4,856,500

Helix Energy Solutions Group, Inc.(1) 
410,000

3,029,900

Keane Group, Inc.(1) 
200,000

3,336,000

Mammoth Energy Services, Inc.(1) 
565,000

9,525,900

 
 
20,748,300

Equity Real Estate Investment Trusts (REITs) — 7.8%
 
 
Armada Hoffler Properties, Inc.
680,000

9,390,800

CareTrust REIT, Inc.
435,025

8,282,876

Chatham Lodging Trust
160,000

3,411,200

Community Healthcare Trust, Inc.
346,464

9,340,670

DiamondRock Hospitality Co.
382,915

4,192,919

EPR Properties
65,000

4,533,100

Four Corners Property Trust, Inc.
125,000

3,115,000

Kite Realty Group Trust
1,140,000

23,085,000

Lexington Realty Trust
560,000

5,723,200

MedEquities Realty Trust, Inc.
1,130,000

13,277,500

Medical Properties Trust, Inc.
720,000

9,453,600

RLJ Lodging Trust
270,000

5,940,000

Sabra Health Care REIT, Inc.
430,000

9,434,200

Summit Hotel Properties, Inc.
420,000

6,715,800

Sunstone Hotel Investors, Inc.
200,000

3,214,000

Urstadt Biddle Properties, Inc., Class A
330,000

7,161,000

 
 
126,270,865

Food Products — 1.8%
 
 
John B Sanfilippo & Son, Inc.
120,000

8,077,200

TreeHouse Foods, Inc.(1) 
315,000

21,334,950

 
 
29,412,150

Health Care Equipment and Supplies — 0.2%
 
 
Utah Medical Products, Inc.
50,710

3,729,721

Health Care Providers and Services — 2.5%
 
 
AMN Healthcare Services, Inc.(1) 
410,000

18,737,000


7

 
Shares
Value
Owens & Minor, Inc.
410,000

$
11,972,000

Providence Service Corp. (The)(1) 
180,000

9,734,400

 
 
40,443,400

Hotels, Restaurants and Leisure — 1.0%
 
 
Red Robin Gourmet Burgers, Inc.(1) 
240,000

16,080,000

Household Durables — 1.1%
 
 
Helen of Troy Ltd.(1) 
180,000

17,442,000

Household Products — 1.4%
 
 
Energizer Holdings, Inc.
485,000

22,334,250

Insurance — 7.4%
 
 
AMERISAFE, Inc.
280,000

16,296,000

Hanover Insurance Group, Inc. (The)
265,000

25,686,450

James River Group Holdings Ltd.
275,000

11,407,000

Kinsale Capital Group, Inc.
328,491

14,180,956

RLI Corp.
400,000

22,944,000

Validus Holdings Ltd.
575,000

28,295,750

 
 
118,810,156

IT Services — 5.1%
 
 
Cardtronics plc(1) 
358,377

8,246,255

CSRA, Inc.
445,000

14,360,150

EVERTEC, Inc.
1,340,000

21,239,000

Presidio, Inc.(1) 
725,000

10,258,750

Teradata Corp.(1) 
830,000

28,045,700

 
 
82,149,855

Leisure Products — 0.6%
 
 
Malibu Boats, Inc., Class A(1) 
180,000

5,695,200

MCBC Holdings, Inc.(1) 
210,000

4,279,800

 
 
9,975,000

Machinery — 3.4%
 
 
EnPro Industries, Inc.
230,000

18,521,900

Gardner Denver Holdings, Inc.(1) 
195,000

5,366,400

Global Brass & Copper Holdings, Inc.
580,000

19,604,000

Graham Corp.
455,000

9,477,650

Rexnord Corp.(1) 
95,000

2,413,950

 
 
55,383,900

Media — 1.9%
 
 
Entravision Communications Corp., Class A(2) 
4,851,115

27,651,355

Townsquare Media, Inc., Class A(1) 
280,000

2,800,000

 
 
30,451,355

Mortgage Real Estate Investment Trusts (REITs) — 0.9%
 
 
Granite Point Mortgage Trust, Inc.
185,000

3,465,050

Two Harbors Investment Corp.
1,060,000

10,684,800

 
 
14,149,850

Oil, Gas and Consumable Fuels — 2.2%
 
 
Aegean Marine Petroleum Network, Inc.
405,005

2,004,775

Ardmore Shipping Corp.
950,000

7,837,500

Callon Petroleum Co.(1) 
355,000

3,990,200

Contango Oil & Gas Co.(1) 
655,000

3,294,650

Extraction Oil & Gas, Inc.(1) 
460,000

7,079,400

Scorpio Tankers, Inc.
1,735,000

5,951,050


8

 
Shares
Value
WildHorse Resource Development Corp.(1) 
440,000

$
5,860,800

 
 
36,018,375

Personal Products — 1.0%
 
 
Edgewell Personal Care Co.(1) 
220,000

16,009,400

Professional Services — 0.8%
 
 
Huron Consulting Group, Inc.(1) 
390,000

13,377,000

Semiconductors and Semiconductor Equipment — 1.7%
 
 
Cypress Semiconductor Corp.
855,000

12,842,100

Kulicke & Soffa Industries, Inc.(1) 
690,000

14,883,300

 
 
27,725,400

Software — 1.2%
 
 
BroadSoft, Inc.(1) 
375,000

18,862,500

Specialty Retail — 3.1%
 
 
Camping World Holdings, Inc., Class A
310,000

12,629,400

MarineMax, Inc.(1) 
915,000

15,143,250

Monro Muffler Brake, Inc.
125,000

7,006,250

Penske Automotive Group, Inc.
305,000

14,508,850

 
 
49,287,750

Technology Hardware, Storage and Peripherals — 0.9%
 
 
Cray, Inc.(1) 
750,000

14,587,500

Textiles, Apparel and Luxury Goods — 0.1%
 
 
Culp, Inc.
50,000

1,637,500

Trading Companies and Distributors — 2.9%
 
 
DXP Enterprises, Inc.(1) 
425,000

13,383,250

Foundation Building Materials, Inc.(1) 
951,202

13,449,996

GMS, Inc.(1) 
160,000

5,664,000

MSC Industrial Direct Co., Inc., Class A
185,000

13,980,450

 
 
46,477,696

TOTAL COMMON STOCKS
(Cost $1,325,887,990)
 
1,550,297,173

CONVERTIBLE PREFERRED STOCKS — 0.7%
 
 
Machinery — 0.7%
 
 
Rexnord Corp., 5.75%, 11/15/19
(Cost $9,336,363)
185,000

10,768,850

TEMPORARY CASH INVESTMENTS — 2.4%
 
 
Repurchase Agreement, BMO Capital Markets Corp., (collateralized by various U.S. Treasury obligations, 0.125% - 3.875%, 6/30/18 - 11/15/46, valued at $27,451,120), in a joint trading account at 0.95%, dated 9/29/17, due 10/2/17 (Delivery value $26,919,321)
 
26,917,190

Repurchase Agreement, Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 2.00%, 11/15/26, valued at $11,532,256), at 0.34%, dated 9/29/17, due 10/2/17 (Delivery value $11,303,320)
 
11,303,000

TOTAL TEMPORARY CASH INVESTMENTS
(Cost $38,220,190)
 
38,220,190

TOTAL INVESTMENT SECURITIES — 99.5%
(Cost $1,373,444,543)
 
1,599,286,213

OTHER ASSETS AND LIABILITIES — 0.5%
 
8,020,495

TOTAL NET ASSETS — 100.0%
 
$
1,607,306,708



9

NOTES TO SCHEDULE OF INVESTMENTS
(1)
Non-income producing.
(2)
Affiliated Company: the fund’s holding represents ownership of 5% or more of the voting securities of the company; therefore, the company is affiliated as defined in the Investment Company Act of 1940.


See Notes to Financial Statements.

10

Statement of Assets and Liabilities
SEPTEMBER 30, 2017 (UNAUDITED)
 
Assets
 
Investment securities - unaffiliated, at value (cost of $1,356,652,937)
$
1,571,634,858

Investment securities - affiliated, at value (cost of $16,791,606)
27,651,355

Total investment securities, at value (cost of $1,373,444,543)
1,599,286,213

Cash
10,041,229

Receivable for investments sold
15,501,836

Receivable for capital shares sold
1,414,954

Dividends and interest receivable
1,969,822

 
1,628,214,054

 
 
Liabilities
 
Payable for investments purchased
16,984,811

Payable for capital shares redeemed
2,448,263

Accrued management fees
1,445,988

Distribution and service fees payable
28,284

 
20,907,346

 
 
Net Assets
$
1,607,306,708

 
 
Net Assets Consist of:
 
Capital (par value and paid-in surplus)
$
1,213,985,780

Undistributed net investment income
1,357,474

Undistributed net realized gain
166,121,784

Net unrealized appreciation
225,841,670

 
$
1,607,306,708


 
Net Assets
Shares Outstanding
Net Asset Value
Per Share
Investor Class, $0.01 Par Value
$732,817,565
75,406,458

$9.72
I Class, $0.01 Par Value
$498,580,927
50,895,562

$9.80
Y Class, $0.01 Par Value
$5,275
538

$9.80
A Class, $0.01 Par Value
$126,907,790
13,176,245

$9.63*
C Class, $0.01 Par Value
$2,320,986
249,589

$9.30
R Class, $0.01 Par Value
$3,102,415
323,244

$9.60
R5 Class, $0.01 Par Value
$5,274
538

$9.80
R6 Class, $0.01 Par Value
$243,566,476
24,863,391

$9.80
*Maximum offering price $10.22 (net asset value divided by 0.9425).


See Notes to Financial Statements.


11

Statement of Operations
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2017 (UNAUDITED)
 
Investment Income (Loss)
 
Income:
 
Dividends (including $389,567 from affiliates)
$
11,960,286

Interest
109,339

 
12,069,625

 
 
Expenses:
 
Management fees
8,855,785

Distribution and service fees:
 
A Class
161,095

C Class
8,853

R Class
7,631

Directors' fees and expenses
25,976

Other expenses
217

 
9,059,557

 
 
Net investment income (loss)
3,010,068

 
 
Realized and Unrealized Gain (Loss)
 
Net realized gain (loss) on:
 
Investment transactions (including $427,469 from affiliates)
94,733,319

Forward foreign currency exchange contract transactions
5,621

 
94,738,940

 
 
Change in net unrealized appreciation (depreciation) on:
 
Investments (including $3,447,938 from affiliates)
(40,637,306
)
Forward foreign currency exchange contracts
(37,841
)
 
(40,675,147
)
 
 
Net realized and unrealized gain (loss)
54,063,793

 
 
Net Increase (Decrease) in Net Assets Resulting from Operations
$
57,073,861



See Notes to Financial Statements.


12

Statement of Changes in Net Assets
SIX MONTHS ENDED SEPTEMBER 30, 2017 (UNAUDITED) AND YEAR ENDED MARCH 31, 2017
Increase (Decrease) in Net Assets
September 30, 2017
March 31, 2017
Operations
 
 
Net investment income (loss)
$
3,010,068

$
7,822,819

Net realized gain (loss)
94,738,940

203,481,708

Change in net unrealized appreciation (depreciation)
(40,675,147
)
178,137,336

Net increase (decrease) in net assets resulting from operations
57,073,861

389,441,863

 
 
 
Distributions to Shareholders
 
 
From net investment income:
 
 
Investor Class
(1,359,283
)
(4,647,788
)
I Class
(1,575,788
)
(4,114,600
)
Y Class
(17
)
—

A Class
(62,357
)
(651,385
)
C Class
—

(285
)
R Class
—

(7,918
)
R5 Class
(14
)
—

R6 Class
(908,625
)
(1,402,136
)
From net realized gains:
 
 
Investor Class
—

(33,783,589
)
I Class
—

(22,113,072
)
A Class
—

(6,659,384
)
C Class
—

(26,597
)
R Class
—

(143,466
)
R6 Class
—

(5,577,060
)
Decrease in net assets from distributions
(3,906,084
)
(79,127,280
)
 
 
 
Capital Share Transactions
 
 
Net increase (decrease) in net assets from capital share transactions (Note 5)
(1,424,156
)
(141,324,571
)
 
 
 
Net increase (decrease) in net assets
51,743,621

168,990,012

 
 
 
Net Assets
 
 
Beginning of period
1,555,563,087

1,386,573,075

End of period
$
1,607,306,708

$
1,555,563,087

 
 
 
Undistributed net investment income
$
1,357,474

$
2,253,490



See Notes to Financial Statements.


13

Notes to Financial Statements

SEPTEMBER 30, 2017 (UNAUDITED)

1. Organization

American Century Capital Portfolios, 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 Cap Value 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. Income is a secondary objective.

The fund offers the Investor Class, I Class (formerly Institutional Class), Y Class, A Class, C Class, R Class, R5 Class and R6 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. Sale of the Y Class and R5 Class commenced on April 10, 2017.
 
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. 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.
 
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

14

Directors, or its delegate, deems appropriate. If significant fluctuations in foreign markets are identified, 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.
 
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.

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).

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

15

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, 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 rate of the fee is determined by applying a fee rate calculation formula. This formula takes into account the fund’s assets as well as certain assets, if any, of other clients of the investment advisor outside the American Century Investments family of funds (such as subadvised funds and separate accounts) that use very similar investment teams and strategies (strategy assets).

The management fee schedule range and the effective annual management fee for each class for the period ended September 30, 2017 are as follows:
 
Management Fee
Schedule Range
Effective Annual Management Fee
Investor Class
1.00% to 1.25%
1.25%
I Class
0.80% to 1.05%
1.05%
Y Class
0.65% to 0.90%
0.90%
A Class
1.00% to 1.25%
1.25%
C Class
1.00% to 1.25%
1.25%
R Class
1.00% to 1.25%
1.25%
R5 Class
0.80% to 1.05%
1.05%
R6 Class
0.65% to 0.90%
0.90%

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 September 30, 2017 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 $3,178,531 and $4,682,559, respectively. The effect of interfund transactions on the Statement of Operations was $1,589,058 in net realized gain (loss) on investment transactions.
 

16

4. Investment Transactions

Purchases and sales of investment securities, excluding short-term investments, for the period ended September 30, 2017 were $678,721,695 and $657,447,355, respectively.

5. Capital Share Transactions

Transactions in shares of the fund were as follows:
 
Six months ended
September 30, 2017(1)
Year ended
March 31, 2017
 
Shares
Amount
Shares
Amount
Investor Class/Shares Authorized
530,000,000

 
575,000,000

 
Sold
8,618,988

$
79,642,300

16,894,263

$
148,292,430

Issued in reinvestment of distributions
139,960

1,288,385

4,182,615

37,023,384

Redeemed
(15,383,488
)
(141,174,117
)
(26,036,632
)
(221,392,102
)
 
(6,624,540
)
(60,243,432
)
(4,959,754
)
(36,076,288
)
I Class/Shares Authorized
380,000,000

 
400,000,000

 
Sold
12,242,692

113,474,979

10,400,947

90,289,454

Issued in reinvestment of distributions
147,369

1,369,319

2,659,311

23,663,986

Redeemed
(10,393,178
)
(97,286,985
)
(32,110,870
)
(269,634,819
)
 
1,996,883

17,557,313

(19,050,612
)
(155,681,379
)
Y Class/Shares Authorized
50,000,000

 
N/A

 
Sold
536

5,000

 
 
Issued in reinvestment of distributions
2

17

 
 
 
538

5,017

 
 
A Class/Shares Authorized
90,000,000

 
160,000,000

 
Sold
1,160,987

10,669,724

2,738,285

23,466,773

Issued in reinvestment of distributions
6,792

61,874

824,305

7,259,487

Redeemed
(3,195,260
)
(29,323,629
)
(7,396,839
)
(62,304,032
)
 
(2,027,481
)
(18,592,031
)
(3,834,249
)
(31,577,772
)
C Class/Shares Authorized
10,000,000

 
10,000,000

 
Sold
136,985

1,205,875

106,330

925,018

Issued in reinvestment of distributions
—

—

3,109

26,882

Redeemed
(24,339
)
(214,329
)
(8,849
)
(74,470
)
 
112,646

991,546

100,590

877,430

R Class/Shares Authorized
10,000,000

 
10,000,000

 
Sold
40,772

371,921

136,632

1,175,294

Issued in reinvestment of distributions
—

—

17,131

151,384

Redeemed
(70,336
)
(638,358
)
(114,803
)
(981,752
)
 
(29,564
)
(266,437
)
38,960

344,926

R5 Class/Shares Authorized
50,000,000

 
N/A

 
Sold
537

5,000

 
 
Issued in reinvestment of distributions
1

14

 
 
 
538

5,014

 
 
R6 Class/Shares Authorized
150,000,000

 
50,000,000

 
Sold
8,398,289

78,790,189

19,432,466

162,082,591

Issued in reinvestment of distributions
97,676

908,625

788,291

6,979,196

Redeemed
(2,211,440
)
(20,579,960
)
(10,461,852
)
(88,273,275
)
 
6,284,525

59,118,854

9,758,905

80,788,512

Net increase (decrease)
(286,455
)
$
(1,424,156
)
(17,946,160
)
$
(141,324,571
)

(1)
April 10, 2017 (commencement of sale) through September 30, 2017 for the Y Class and R5 Class.


17

6. Affiliated Company Transactions

If a fund's holding represents ownership of 5% or more of the voting securities of a company, the company is affiliated as defined in the 1940 Act. A summary of transactions for each company which is or was an affiliate at or during the period ended September 30, 2017 follows (amounts in thousands):
Company
Beginning Value
Purchase
Cost
Sales
Cost
Change in Net Unrealized Appreciation (Depreciation)
Ending
Value
Ending
Shares
Net Realized
Gain (Loss)
Income
Entravision Communications Corp., Class A
$
29,109

$
7,653

$
7,522

$
(1,589
)
$
27,651

4,851

$
(479
)
$
390

CSW Industrials, Inc.(1)(2)
26,124

4,811

6,494

5,037

(2 
) 
(2 
) 
906

—

 
$
55,233

$
12,464

$
14,016

$
3,448

$
27,651

4,851

$
427

$
390


(1) Non-income producing.
(2) Company was not an affiliate at September 30, 2017.

7. 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. There were no significant transfers between levels during the period.

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
$
1,550,297,173

—

—

Convertible Preferred Stocks
—

$
10,768,850

—

Temporary Cash Investments
—

38,220,190

—

 
$
1,550,297,173

$
48,989,040

—


8. Derivative Instruments

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

18

rate fluctuations. 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 $4,199,566.

At period end, the fund did not have any derivative instruments disclosed on the Statement of Assets and Liabilities. For the six months ended September 30, 2017, the effect of foreign currency risk derivative instruments on the Statement of Operations was $5,621 in net realized gain (loss) on forward foreign currency exchange contract transactions and $(37,841) in change in net unrealized appreciation (depreciation) on forward foreign currency exchange contracts.
 
9. 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.

10. 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
$
1,401,659,035

Gross tax appreciation of investments
$
226,149,042

Gross tax depreciation of investments
(28,521,864
)
Net tax appreciation (depreciation) of investments
$
197,627,178


The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales.
 


19

Financial Highlights
For a Share Outstanding Throughout the Years Ended March 31 (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
 
 
 
 
 
 
 
 
 
 
 
2017(3)
$9.39
0.01
0.34
0.35
(0.02)
—
(0.02)
$9.72
3.71%
1.25%(4)
0.31%(4)
43%

$732,818

2017
$7.55
0.04
2.28
2.32
(0.06)
(0.42)
(0.48)
$9.39
31.15%
1.25%
0.47%
90%

$770,415

2016
$9.16
0.04
(0.59)
(0.55)
(0.03)
(1.03)
(1.06)
$7.55
(6.25)%
1.26%
0.43%
95%

$656,974

2015
$9.88
0.06
0.48
0.54
(0.05)
(1.21)
(1.26)
$9.16
6.18%
1.24%
0.66%
78%

$815,048

2014
$9.45
0.06
2.04
2.10
(0.08)
(1.59)
(1.67)
$9.88
23.27%
1.22%
0.62%
111%

$948,338

2013
$8.61
0.10
1.25
1.35
(0.12)
(0.39)
(0.51)
$9.45
16.58%
1.25%
1.17%
126%

$894,194

I Class(5)
 
 
 
 
 
 
 
 
 
 
 
2017(3)
$9.47
0.02
0.34
0.36
(0.03)
—
(0.03)
$9.80
3.82%
1.05%(4)
0.51%(4)
43%

$498,581

2017
$7.61
0.06
2.29
2.35
(0.07)
(0.42)
(0.49)
$9.47
31.43%
1.05%
0.67%
90%

$463,119

2016
$9.22
0.05
(0.58)
(0.53)
(0.05)
(1.03)
(1.08)
$7.61
(6.02)%
1.06%
0.63%
95%

$517,247

2015
$9.94
0.08
0.48
0.56
(0.07)
(1.21)
(1.28)
$9.22
6.35%
1.04%
0.86%
78%

$599,932

2014
$9.50
0.08
2.05
2.13
(0.10)
(1.59)
(1.69)
$9.94
23.45%
1.02%
0.82%
111%

$874,415

2013
$8.65
0.12
1.26
1.38
(0.14)
(0.39)
(0.53)
$9.50
16.89%
1.05%
1.37%
126%

$721,572

Y Class
 
 
 
 
 
 
 
 
 
 
 
 
2017(6)
$9.32
0.03
0.48
0.51
(0.03)
—
(0.03)
$9.80
5.51%
0.90%(4)
0.68%(4)
43%(8)

$5



For a Share Outstanding Throughout the Years Ended March 31 (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
 
 
 
 
 
 
 
 
 
 
 
 
2017(3)
$9.31
—(7)
0.32
0.32
—(7)
—
—(7)
$9.63
3.49%
1.50%(4)
0.06%(4)
43%

$126,908

2017
$7.49
0.02
2.26
2.28
(0.04)
(0.42)
(0.46)
$9.31
30.82%
1.50%
0.22%
90%

$141,505

2016
$9.09
0.01
(0.57)
(0.56)
(0.01)
(1.03)
(1.04)
$7.49
(6.41)%
1.51%
0.18%
95%

$142,568

2015
$9.81
0.04
0.48
0.52
(0.03)
(1.21)
(1.24)
$9.09
5.96%
1.49%
0.41%
78%

$384,891

2014
$9.40
0.04
2.02
2.06
(0.06)
(1.59)
(1.65)
$9.81
22.92%
1.47%
0.37%
111%

$433,905

2013
$8.57
0.08
1.24
1.32
(0.10)
(0.39)
(0.49)
$9.40
16.19%
1.50%
0.92%
126%

$401,510

C Class
2017(3)
$9.01
(0.03)
0.32
0.29
—
—
—
$9.30
3.22%
2.25%(4)
(0.69)%(4)
43%

$2,321

2017
$7.29
(0.05)
2.20
2.15
(0.01)
(0.42)
(0.43)
$9.01
29.78%
2.25%
(0.53)%
90%

$1,234

2016
$8.93
(0.04)
(0.57)
(0.61)
—
(1.03)
(1.03)
$7.29
(7.13)%
2.26%
(0.57)%
95%

$265

2015
$9.71
(0.03)
0.47
0.44
(0.01)
(1.21)
(1.22)
$8.93
5.14%
2.24%
(0.34)%
78%

$138

2014
$9.35
(0.04)
2.01
1.97
(0.02)
(1.59)
(1.61)
$9.71
21.94%
2.22%
(0.38)%
111%

$114

2013
$8.53
0.01
1.24
1.25
(0.04)
(0.39)
(0.43)
$9.35
15.35%
2.25%
0.17%
126%

$80

R Class
2017(3)
$9.28
(0.01)
0.33
0.32
—
—
—
$9.60
3.45%
1.75%(4)
(0.19)%(4)
43%

$3,102

2017
$7.48
—(7)
2.25
2.25
(0.03)
(0.42)
(0.45)
$9.28
30.41%
1.75%
(0.03)%
90%

$3,275

2016
$9.09
—(7)
(0.58)
(0.58)
—
(1.03)
(1.03)
$7.48
(6.65)%
1.76%
(0.07)%
95%

$2,346

2015
$9.83
0.02
0.47
0.49
(0.02)
(1.21)
(1.23)
$9.09
5.65%
1.74%
0.16%
78%

$2,138

2014
$9.42
0.01
2.03
2.04
(0.04)
(1.59)
(1.63)
$9.83
22.64%
1.72%
0.12%
111%

$4,517

2013
$8.58
0.06
1.25
1.31
(0.08)
(0.39)
(0.47)
$9.42
15.98%
1.75%
0.67%
126%

$3,516



For a Share Outstanding Throughout the Years Ended March 31 (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)
R5 Class
2017(6)
$9.32
0.02
0.49
0.51
(0.03)
—
(0.03)
$9.80
5.44%
1.05%(4)
0.53%(4)
43%(8)

$5

R6 Class
2017(3)
$9.47
0.03
0.34
0.37
(0.04)
—
(0.04)
$9.80
3.94%
0.90%(4)
0.66%(4)
43%

$243,566

2017
$7.62
0.07
2.28
2.35
(0.08)
(0.42)
(0.50)
$9.47
31.45%
0.90%
0.82%
90%

$176,015

2016
$9.23
0.07
(0.59)
(0.52)
(0.06)
(1.03)
(1.09)
$7.62
(5.86)%
0.91%
0.78%
95%

$67,173

2015
$9.94
0.11
0.48
0.59
(0.09)
(1.21)
(1.30)
$9.23
6.62%
0.89%
1.01%
78%

$39,898

2014(9)
$10.38
0.07
1.14
1.21
(0.06)
(1.59)
(1.65)
$9.94
12.46%
0.87%(4)
1.06%(4)
111%(10)

$13,430

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 September 30, 2017 (unaudited).
(4)
Annualized.
(5)
Prior to April 10, 2017, the I Class was referred to as the Institutional Class.
(6)
April 10, 2017 (commencement of sale) through September 30, 2017 (unaudited).
(7)
Per share amount was less than $0.005.
(8)
Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the six months ended September 30, 2017.
(9)
July 26, 2013 (commencement of sale) through March 31, 2014.
(10)
Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended March 31, 2014.

See Notes to Financial Statements.


Approval of Management Agreement


At a meeting held on June 29, 2017, the Fund’s Board of Directors (the "Board") unanimously approved the renewal of the management agreement pursuant to which American Century Investment Management, Inc. (the “Advisor”) acts as the investment advisor for the Fund. Under Section 15(c) of the Investment Company Act, contracts for investment advisory services are required to be reviewed, evaluated, and approved by a majority of a fund’s directors (the “Directors”), including a majority of the independent Directors, each year.
    
Prior to its consideration of the renewal of the management agreement, the Directors requested and reviewed extensive data and information compiled by the Advisor and certain independent providers of evaluation data concerning the Fund and the services provided to the Fund by the Advisor. This review was in addition to the oversight and evaluation undertaken by the Board and its committees on a continual basis and the information received was supplemental to the extensive information that the Board and its committees receive and consider throughout the year.

In connection with its consideration of the renewal of the management agreement, the Board’s review and evaluation of the services provided by the Advisor included, but was not limited to, the following:

•
the nature, extent, and quality of investment management, shareholder services, and other services provided and to be provided to the Fund;
•
the wide range of other programs and services provided and to be provided to the Fund and its shareholders on a routine and non-routine basis;
•
the investment performance of the Fund, including data comparing the Fund's performance to appropriate benchmarks and/or a peer group of other mutual funds with similar investment objectives and strategies;
•
the cost of owning the Fund compared to the cost of owning similar funds;
•
the compliance policies, procedures, and regulatory experience of the Advisor and the Fund's service providers;
•
financial data showing the cost of services provided to the Fund, the profitability of the Fund to the Advisor, and the overall profitability of the Advisor;
•
strategic plans of the Advisor
•
possible economies of scale associated with the Advisor’s management of the Fund and other accounts under its management;
•
data comparing services provided and charges to the Advisor's other investment management clients;
•
acquired fund fees and expenses;
•
payments and practices by the Fund and the Advisor regarding financial intermediaries, the nature of services provided by intermediaries, and the terms of share classes utilized; and
•
any collateral benefits derived by the Advisor from the management of the Fund.

The Directors held three in-person meetings and one telephonic meeting to review and discuss the information provided. The independent Directors also reviewed responses to supplemental information requests and held active discussions with the Advisor regarding the renewal of the management agreement. The independent Directors had the benefit of the advice of their independent counsel throughout the process.

Factors Considered

The Directors considered all of the information provided by the Advisor, the independent data providers, and independent counsel in connection with the approval. They determined that the

23

information was sufficient for them to evaluate the management agreement for the Fund. In connection with their review, the Directors did not identify any single factor as being all-important or controlling, and each Director may have attributed different levels of importance to different factors. In deciding to renew the management agreement, the Board based its decision on a number of factors, including without limitation the following:

Nature, Extent and Quality of Services - Generally. Under the management agreement, the Advisor is responsible for providing or arranging for all services necessary for the operation of the Fund. The Board noted that the Advisor provides or arranges at its own expense a wide variety of services including without limitation the following:

•
portfolio research and security selection
•
securities trading
•
Fund administration
•
custody of Fund assets
•
daily valuation of the Fund’s portfolio
•
shareholder servicing and transfer agency, including shareholder confirmations, recordkeeping, and communications
•
legal services (except the independent Directors’ counsel)
•
regulatory and portfolio compliance
•
financial reporting
•
marketing and distribution (except amounts paid by the Fund under Rule 12b-1 plans)

The Board noted that many of these services have expanded over time in terms of both quantity and complexity in response to shareholder demands, competition in the industry, changing distribution channels, and the changing regulatory environment. The Board noted specifically the resources the Advisor has committed during the year to compliance with the Department of Labor fiduciary rule and share class modernization.

Investment Management Services. The nature of the investment management services provided to the Fund is quite complex and allows Fund shareholders access to professional money management, instant diversification of their investments within an asset class, the opportunity to easily diversify among asset classes by investing in or exchanging among various American Century Investments funds, and liquidity. In evaluating investment performance, the Board expects the Advisor to manage the Fund in accordance with its investment objectives and approved strategies. Further, the Directors recognize that the Advisor has an obligation to monitor trading activities, and in particular to seek the best execution of fund trades, and to evaluate the use of and payment for research. In providing these services, the Advisor utilizes teams of investment professionals (portfolio managers, analysts, research assistants, and securities traders) who require extensive information technology, research, training, compliance, and other systems to conduct their business. The Board, directly and through its Fund Performance Review Committee, provides oversight of the investment performance process. It regularly reviews investment performance information for the Fund, together with comparative information for appropriate benchmarks and/or peer groups of similarly-managed funds, over different time horizons. The Directors also review detailed performance information provided by the Advisor during the management agreement renewal process. If performance concerns are identified, the Fund receives special reviews until performance improves, during which the Board receives a report from the Advisor regarding the reasons for such results (e.g., market conditions, security selection) and any efforts being undertaken to improve performance. The Fund’s performance was above its benchmark for the three-, five-, and ten-year periods and below its benchmark for the one-year period reviewed by the Board. The Board discussed the Fund's performance with the Advisor and was satisfied with the efforts being undertaken by the Advisor. The Board found the investment management services provided by the Advisor to the Fund to be satisfactory and consistent with the management agreement.


24

Shareholder and Other Services. Under the management agreement, the Advisor provides the Fund with a comprehensive package of transfer agency, shareholder, and other services. The Board, directly and through various committees of the Board, regularly reviews reports and evaluations of such services at its regular meetings. These reports include, but are not limited to, information regarding the operational efficiency and accuracy of the shareholder and transfer agency services provided, staffing levels, shareholder satisfaction (as measured by external as well as internal sources), technology support, new products and services offered to Fund shareholders, securities trading activities, portfolio valuation services, auditing services, and legal and operational compliance activities. Certain aspects of shareholder and transfer agency service level efficiency and the quality of securities trading activities are measured by independent third party providers and are presented in comparison to other fund groups not managed by the Advisor. The Board found the services provided by the Advisor to the Fund under the management agreement to be competitive and of high quality.

Costs of Services and Profitability. The Advisor provides detailed information concerning its cost of providing various services to the Fund, its profitability in managing the Fund (pre- and post-distribution), its overall profitability, and its financial condition. The Directors have reviewed with the Advisor the methodology used to prepare this financial information. This information is considered in evaluating the Advisor’s financial condition, its ability to continue to provide services under the management agreement, and the reasonableness of the current management fee. The Board concluded that the Advisor’s profits were reasonable in light of the services provided to the Fund.

Ethics. The Board generally considers the Advisor’s commitment to providing quality services to shareholders and to conducting its business ethically. They noted that the Advisor’s practices generally meet or exceed industry best practices.

Economies of Scale. The Board also reviewed information provided by the Advisor regarding the possible existence of economies of scale in connection with the management of the Fund. The Board concluded that economies of scale are difficult to measure and predict with precision, especially on a fund-by-fund basis. The Board concluded that the Advisor is appropriately sharing economies of scale through its competitive fee structure, offering competitive fees from fund inception, and through reinvestment in its business to provide shareholders additional content and services. The Board also noted that economies of scale are shared with the Fund and its shareholders through management fee breakpoints that serve to reduce the effective management fee as the assets of the Fund grow.

Comparison to Other Funds’ Fees. The management agreement provides that the Fund pays the Advisor a single, all-inclusive (or unified) management fee for providing all services necessary for the management and operation of the Fund, other than brokerage expenses, expenses attributable to short sales, taxes, interest, extraordinary expenses, and the fees and expenses of the Fund’s independent Directors (including their independent legal counsel) and expenses incurred in connection with the provision of shareholder services and distribution services under a plan adopted pursuant to Rule 12b-1 under the 1940 Act. Under the unified fee structure, the Advisor is responsible for providing all investment advisory, custody, audit, administrative, compliance, recordkeeping, marketing and shareholder services, or arranging and supervising third parties to provide such services. By contrast, most other funds are charged a variety of fees, including an investment advisory fee, a transfer agency fee, an administrative fee, distribution charges, and other expenses. Other than their investment advisory fees and any applicable Rule 12b-1 distribution fees, all other components of the total fees charged by these other funds may be increased without shareholder approval. The Board believes the unified fee structure is a benefit to Fund shareholders because it clearly discloses to shareholders the cost of owning Fund shares, and, since the unified fee cannot be increased without a vote of Fund shareholders, it shifts to the Advisor the risk of increased costs of operating the Fund and provides a direct incentive to minimize administrative inefficiencies. Part of the Board’s analysis of fee levels involves reviewing certain evaluative data compiled by an independent provider comparing the Fund’s unified fee to the total expense ratios of its peers. The unified fee charged to shareholders of the Fund was at

25

the median of the total expense ratios of the Fund’s peer expense universe and was within the range of its peer expense group. The Board discussed with the Advisor the factors that impacted the level of the fee in relation to its peers. The Board concluded that the management fee paid by the Fund to the Advisor under the management agreement is reasonable in light of the services provided to the Fund.

Comparison to Fees and Services Provided to Other Clients of the Advisor. The Directors also requested and received information from the Advisor concerning the nature of the services, fees, costs, and profitability of its advisory services to advisory clients other than the Fund. They observed that these varying types of client accounts require different services and involve different regulatory and entrepreneurial risks than the management of the Fund. The Board analyzed this information and concluded that the fees charged and services provided to the Fund were reasonable by comparison.

Payments to Intermediaries. The Directors also requested and received a description of payments made to intermediaries by the Fund and the Advisor and services provided in response thereto. These payments include various payments made by the Fund or the Advisor to different types of intermediaries and recordkeepers for distribution and service activities provided for the Fund. The Board reviewed such information and received representations from the Advisor that all such payments by the Fund were made pursuant to the Fund's Rule 12b-1 Plan and that all such payments by the Advisor were made from the Advisor's resources and reasonable profits. The Board found the payments to be reasonable in scope and purpose.

Collateral or “Fall-Out” Benefits Derived by the Advisor. The Board considered the existence of collateral benefits the Advisor may receive as a result of its relationship with the Fund. They concluded that the Advisor’s primary business is managing mutual funds and it generally does not use fund or shareholder information to generate profits in other lines of business, and therefore does not derive any significant collateral benefits from them. The Board noted that additional assets from other clients may offer the Advisor some benefit from increased leverage with service providers and counterparties. Additionally, the Advisor receives proprietary research from broker-dealers that execute fund portfolio transactions, which the Board concluded is likely to benefit other clients of the Advisor, as well as Fund shareholders. The Board also determined that the Advisor is able to provide investment management services to certain clients other than the Fund, at least in part, due to its existing infrastructure built to serve the fund complex. The Board concluded that appropriate allocation methodologies had been employed to assign resources and the cost of those resources to these other clients and, where expressly provided, these other client assets may be included with the assets of the Fund to determine breakpoints in the management fee schedule.

Existing Relationship. The Board also considered whether there was any reason for not continuing the existing arrangement with the Advisor. In this regard, the Board was mindful of the potential disruptions of the Fund’s operations and various risks, uncertainties, and other effects that could occur as a result of a decision not to continue such relationship. In particular, the Board recognized that most shareholders have invested in the Fund on the strength of the Advisor’s industry standing and reputation and in the expectation that the Advisor will have a continuing role in providing advisory services to the Fund.

Conclusion of the Directors. As a result of this process, the Board, including all of the independent Directors, taking into account all of the factors discussed above and the information provided by the Advisor and others in connection with its review and throughout the year, determined that the management fee is fair and reasonable in light of the services provided and that the investment management agreement between the Fund and the Advisor should be renewed.

26

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

A description of the policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund is available without charge, upon request, by calling 1-800-345-2021. It is also available on the "About Us" page of American Century Investments’ website at americancentury.com and 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 the "About Us" page at americancentury.com. 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. The fund’s Forms N-Q are available on the SEC’s website at sec.gov, and may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. 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.

27

Notes



28




acihorizblkb99.jpg
 
 
 
 
Contact Us
americancentury.com
 
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1-800-345-8765
 
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1-800-345-2021
or 816-531-5575
 
Investors Using Advisors
1-800-378-9878
 
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1-800-345-3533
 
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1-800-345-6488
 
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711
 
 
 
 
American Century Capital Portfolios, 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.
 
 
 
 
©2017 American Century Proprietary Holdings, Inc. All rights reserved.
CL-SAN-90806  1711
 





acihorizblkb99.jpg
                  

 
 
 
Semiannual Report
 
 
 
September 30, 2017
 
 
 
Value Fund






Table of Contents
President’s Letter
2

Fund Characteristics

Shareholder Fee Example

Schedule of Investments

Statement of Assets and Liabilities

Statement of Operations

Statement of Changes in Net Assets

Notes to Financial Statements

Financial Highlights

Approval of Management Agreement

Additional Information



























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

jthomasrev0514.jpg Jonathan Thomas

Dear Investor:

Thank you for reviewing this semiannual report for the period ended September 30, 2017. 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, we encourage you to visit our website, americancentury.com.

All Major Asset Classes Provided Positive Performance

From large-cap stocks to short-maturity Treasuries, the U.S. financial markets delivered across-the-board gains for the six-month period. Stock investors responded enthusiastically to two consecutive quarters of double-digit earnings growth for S&P 500 companies, the first such back-to-back performance since 2011. In addition, gross domestic product growth accelerated to an annualized rate of 3.1% in the April-June quarter, up from 1.2% in the first quarter and the fastest pace in two years. Meanwhile, despite setbacks and delays for some components of President Trump’s pro-growth agenda, equity investors generally remained optimistic regarding future U.S. economic gains.

Against this backdrop, the S&P 500 Index reached several milestones and returned 7.71% for the six-month period. In terms of equity styles, riskier and economically sensitive stocks generally remained in favor. For example, small-cap stocks outperformed their mid- and large-cap peers, while growth stocks largely outperformed value stocks across the capitalization spectrum.

Investor preferences for risk also extended to the fixed-income market, where spread (non-Treasury) sectors were top performers and drove the Bloomberg Barclays U.S. Aggregate Bond Index to a 2.31% gain for the six-month period. The Federal Reserve (the Fed) remained relatively supportive, raising rates only once (by 25 basis points in June) amid a low-inflation backdrop and announcing a gradual approach to balance sheet normalization. Meanwhile, upbeat corporate earnings, a rallying stock market, robust investor demand for yield, and favorable supply/demand dynamics in the corporate credit markets led to outperformance among corporate bonds.

As Congress considers corporate tax cuts and other growth-oriented reforms, and the Fed continues to pursue policy normalization, new opportunities and challenges likely will emerge. We continue to believe in a disciplined, diversified, and risk-aware approach, using professionally managed portfolios in pursuit of investment goals. We appreciate your continued trust in us.


Sincerely,
image48a01.jpg
Jonathan Thomas
President and Chief Executive Officer
American Century Investments

2

Fund Characteristics 
SEPTEMBER 30, 2017
Top Ten Holdings
% of net assets
JPMorgan Chase & Co.
3.2%
General Electric Co.
3.2%
Pfizer, Inc.
2.9%
Wells Fargo & Co.
2.8%
Procter & Gamble Co. (The)
2.8%
Bank of America Corp.
2.3%
Merck & Co., Inc.
2.2%
Chevron Corp.
2.2%
Johnson & Johnson
2.2%
AT&T, Inc.
2.2%
 
 
Top Five Industries
% of net assets
Banks
14.1%
Oil, Gas and Consumable Fuels
13.7%
Pharmaceuticals
9.5%
Capital Markets
4.2%
Energy Equipment and Services
4.0%
 
 
Types of Investments in Portfolio
% of net assets
Common Stocks
97.1%
Temporary Cash Investments
2.6%
Other Assets and Liabilities
0.3%





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 April 1, 2017 to September 30, 2017 (except as noted).

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
4/1/17
Ending
Account Value
9/30/17
Expenses Paid
During Period(1)
4/1/17 - 9/30/17
Annualized
Expense Ratio(1)
Actual
 
 
 
 
Investor Class
$1,000
$1,020.50
$4.91
0.97%
I Class
$1,000
$1,021.50
$3.90
0.77%
Y Class
$1,000
$1,025.40(2)
$2.99(3)
0.62%
A Class
$1,000
$1,019.20
$6.18
1.22%
C Class
$1,000
$1,016.80
$9.96
1.97%
R Class
$1,000
$1,017.90
$7.44
1.47%
R5 Class
$1,000
$1,023.60(2)
$3.71(3)
0.77%
R6 Class
$1,000
$1,022.20
$3.14
0.62%
Hypothetical
 
 
 
 
Investor Class
$1,000
$1,020.21
$4.91
0.97%
I Class
$1,000
$1,021.21
$3.90
0.77%
Y Class
$1,000
$1,021.96(4)
$3.14(4)
0.62%
A Class
$1,000
$1,018.95
$6.17
1.22%
C Class
$1,000
$1,015.19
$9.95
1.97%
R Class
$1,000
$1,017.70
$7.44
1.47%
R5 Class
$1,000
$1,021.21(4)
$3.90(4)
0.77%
R6 Class
$1,000
$1,021.96
$3.14
0.62%
(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 183, the number of days in the most recent fiscal half-year, divided by 365, 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.
(2)
Ending account value based on actual return from April 10, 2017 (commencement of sale) through September 30, 2017.
(3)
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 174, the number of days in the period from April 10, 2017 (commencement of sale) through September 30, 2017, divided by 365, to reflect the period. Had the class been available for the full period, the expenses paid during the period would have been higher.
(4)
Ending account value and expenses paid during the period assumes the class had been available throughout the entire period and are calculated using the class’s annualized expense ratio listed in the table above.


5

Schedule of Investments

SEPTEMBER 30, 2017 (UNAUDITED)
 
Shares
Value
COMMON STOCKS — 97.1%
 
 
Aerospace and Defense — 1.2%
 
 
Textron, Inc.
379,361

$
20,439,971

United Technologies Corp.
171,910

19,955,313

 
 
40,395,284

Automobiles — 1.1%
 
 
General Motors Co.
453,799

18,324,404

Honda Motor Co. Ltd.
568,100

16,822,121

 
 
35,146,525

Banks — 14.1%
 
 
Bank of America Corp.
3,044,080

77,136,987

BB&T Corp.
633,100

29,717,714

BOK Financial Corp.
117,730

10,487,388

Comerica, Inc.
199,315

15,199,762

Cullen/Frost Bankers, Inc.
69,840

6,629,213

JPMorgan Chase & Co.
1,114,651

106,460,317

M&T Bank Corp.
124,860

20,107,454

PNC Financial Services Group, Inc. (The)
340,053

45,828,943

U.S. Bancorp
1,192,362

63,898,680

Wells Fargo & Co.
1,722,788

95,011,758

 
 
470,478,216

Beverages — 0.2%
 
 
PepsiCo, Inc.
75,330

8,394,022

Biotechnology — 0.1%
 
 
AbbVie, Inc.
55,990

4,975,271

Building Products — 1.1%
 
 
Johnson Controls International plc
905,179

36,469,662

Capital Markets — 4.2%
 
 
Ameriprise Financial, Inc.
67,710

10,055,612

Franklin Resources, Inc.
235,950

10,502,135

Goldman Sachs Group, Inc. (The)
156,614

37,147,275

Invesco Ltd.
590,281

20,683,446

Northern Trust Corp.
390,837

35,929,645

State Street Corp.
235,365

22,486,772

T. Rowe Price Group, Inc.
55,420

5,023,823

 
 
141,828,708

Communications Equipment — 2.1%
 
 
Cisco Systems, Inc.
2,068,599

69,566,984

Diversified Financial Services — 1.9%
 
 
Berkshire Hathaway, Inc., Class A(1) 
159

43,683,660

Berkshire Hathaway, Inc., Class B(1) 
115,620

21,195,458

 
 
64,879,118

Diversified Telecommunication Services — 3.7%
 
 
AT&T, Inc.
1,834,560

71,859,715

CenturyLink, Inc.
356,349

6,734,996

Level 3 Communications, Inc.(1) 
191,260

10,192,246


6

 
Shares
Value
Verizon Communications, Inc.
701,380

$
34,711,296

 
 
123,498,253

Electric Utilities — 1.3%
 
 
Edison International
262,403

20,249,639

PG&E Corp.
345,186

23,503,715

 
 
43,753,354

Electrical Equipment — 1.4%
 
 
Emerson Electric Co.
548,940

34,495,390

Hubbell, Inc.
118,721

13,774,010

 
 
48,269,400

Electronic Equipment, Instruments and Components — 1.8%
 
 
Keysight Technologies, Inc.(1) 
586,447

24,431,382

TE Connectivity Ltd.
413,639

34,356,855

 
 
58,788,237

Energy Equipment and Services — 4.0%
 
 
Baker Hughes a GE Co.
313,529

11,481,432

Halliburton Co.
419,023

19,287,629

Helmerich & Payne, Inc.
212,123

11,053,729

National Oilwell Varco, Inc.
743,620

26,569,543

Schlumberger Ltd.
914,910

63,824,122

 
 
132,216,455

Equity Real Estate Investment Trusts (REITs) — 0.5%
 
 
Weyerhaeuser Co.
489,200

16,647,476

Food and Staples Retailing — 3.0%
 
 
CVS Health Corp.
464,380

37,763,382

Sysco Corp.
245,842

13,263,176

Wal-Mart Stores, Inc.
618,561

48,334,356

 
 
99,360,914

Food Products — 3.5%
 
 
Conagra Brands, Inc.
937,575

31,633,780

General Mills, Inc.
388,480

20,107,725

Kellogg Co.
323,194

20,157,610

Mondelez International, Inc., Class A
1,118,456

45,476,421

 
 
117,375,536

Health Care Equipment and Supplies — 3.6%
 
 
Abbott Laboratories
582,820

31,099,275

Koninklijke Philips NV
156,333

6,454,017

Medtronic plc
645,490

50,199,757

Zimmer Biomet Holdings, Inc.
269,963

31,609,968

 
 
119,363,017

Health Care Providers and Services — 3.1%
 
 
Cardinal Health, Inc.
276,990

18,536,171

Express Scripts Holding Co.(1) 
368,229

23,316,260

HCA Healthcare, Inc.(1) 
185,050

14,728,130

LifePoint Health, Inc.(1) 
481,116

27,856,616

McKesson Corp.
130,720

20,079,899

 
 
104,517,076

Hotels, Restaurants and Leisure — 0.3%
 
 
Carnival Corp.
140,927

9,099,656

Household Products — 2.8%
 
 
Procter & Gamble Co. (The)
1,031,884

93,880,806


7

 
Shares
Value
Industrial Conglomerates — 3.2%
 
 
General Electric Co.
4,371,004

$
105,690,877

Insurance — 3.5%
 
 
Aflac, Inc.
191,303

15,570,151

Chubb Ltd.
225,923

32,205,324

MetLife, Inc.
585,238

30,403,114

Reinsurance Group of America, Inc.
197,349

27,536,106

Unum Group
230,890

11,805,406

 
 
117,520,101

Leisure Products — 0.7%
 
 
Mattel, Inc.
1,522,852

23,573,749

Metals and Mining — 0.5%
 
 
BHP Billiton Ltd.
752,100

15,208,837

Multiline Retail — 0.8%
 
 
Target Corp.
459,794

27,132,444

Oil, Gas and Consumable Fuels — 13.7%
 
 
Anadarko Petroleum Corp.
593,180

28,976,843

Apache Corp.
289,825

13,273,985

Chevron Corp.
629,047

73,913,023

Cimarex Energy Co.
160,247

18,215,276

ConocoPhillips
858,043

42,945,052

Devon Energy Corp.
791,975

29,073,402

EOG Resources, Inc.
227,360

21,994,806

EQT Corp.
384,061

25,056,140

Exxon Mobil Corp.
451,769

37,036,023

Imperial Oil Ltd.
297,726

9,511,007

Noble Energy, Inc.
1,437,310

40,762,112

Occidental Petroleum Corp.
847,673

54,429,083

Royal Dutch Shell plc, B Shares
444,190

13,657,193

TOTAL SA
886,740

47,628,102

 
 
456,472,047

Pharmaceuticals — 9.5%
 
 
Allergan plc
151,990

31,150,351

Bristol-Myers Squibb Co.
107,640

6,860,974

Johnson & Johnson
564,329

73,368,413

Merck & Co., Inc.
1,162,677

74,446,208

Pfizer, Inc.
2,703,693

96,521,840

Roche Holding AG
71,860

18,344,392

Teva Pharmaceutical Industries Ltd. ADR
980,847

17,262,907

 
 
317,955,085

Road and Rail — 1.0%
 
 
Heartland Express, Inc.
1,288,325

32,311,191

Semiconductors and Semiconductor Equipment — 3.6%
 
 
Applied Materials, Inc.
254,874

13,276,387

Intel Corp.
1,671,147

63,637,278

QUALCOMM, Inc.
582,980

30,221,683

Teradyne, Inc.
313,909

11,705,666

 
 
118,841,014

Software — 2.3%
 
 
Microsoft Corp.
282,362

21,033,145


8

 
Shares/Principal Amount
Value
Oracle Corp. (New York)
1,144,419

$
55,332,659

 
 
76,365,804

Specialty Retail — 1.4%
 
 
Advance Auto Parts, Inc.
332,930

33,026,656

Lowe's Cos., Inc.
184,734

14,767,636

 
 
47,794,292

Technology Hardware, Storage and Peripherals — 0.6%
 
 
Apple, Inc.
33,660

5,187,679

Hewlett Packard Enterprise Co.
451,225

6,637,520

HP, Inc.
451,225

9,006,451

 
 
20,831,650

Textiles, Apparel and Luxury Goods — 0.9%
 
 
Coach, Inc.
379,098

15,270,068

Ralph Lauren Corp.
158,390

13,984,253

 
 
29,254,321

Trading Companies and Distributors — 0.4%
 
 
MSC Industrial Direct Co., Inc., Class A
177,410

13,406,874

TOTAL COMMON STOCKS
(Cost $2,465,714,646)
 
3,241,262,256

TEMPORARY CASH INVESTMENTS — 2.6%
 
 
Federal Home Loan Bank Discount Notes, 0.71%, 10/2/17(2)
$
50,000,000

50,000,000

Repurchase Agreement, BMO Capital Markets Corp., (collateralized by various U.S. Treasury obligations, 0.125% - 3.875%, 6/30/18 - 11/15/46, valued at $26,275,111), in a joint trading account at 0.95%, dated 9/29/17, due 10/2/17 (Delivery value $25,766,095)
 
25,764,055

Repurchase Agreement, Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 2.00%, 11/15/26, valued at $9,256,282), at 0.34%, dated 9/29/17, due 10/2/17 (Delivery value $9,074,257)
 
9,074,000

TOTAL TEMPORARY CASH INVESTMENTS
(Cost $84,837,082)
 
84,838,055

TOTAL INVESTMENT SECURITIES — 99.7%
(Cost $2,550,551,728)
 
3,326,100,311

OTHER ASSETS AND LIABILITIES — 0.3%
 
11,053,015

TOTAL NET ASSETS — 100.0%
 
$
3,337,153,326



FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
Currency Purchased
  Currency Sold
Counterparty
Settlement Date
Unrealized Appreciation
(Depreciation)
USD
11,618,901

AUD
14,637,746

JPMorgan Chase Bank N.A.
12/29/17
$
148,496

USD
7,060,282

CAD
8,730,815

Morgan Stanley
12/29/17
59,084

USD
13,838,117

CHF
13,365,960

Credit Suisse AG
12/29/17
(47,970
)
USD
41,080,161

EUR
34,658,905

UBS AG
12/29/17
(86,118
)
USD
10,086,277

GBP
7,467,389

Morgan Stanley
12/29/17
52,689

USD
12,847,426

JPY
1,428,203,400

Credit Suisse AG
12/29/17
99,279

 
 
 
 
 
 
$
225,460



9

NOTES TO SCHEDULE OF INVESTMENTS
ADR
-
American Depositary Receipt
AUD
-
Australian Dollar
CAD
-
Canadian Dollar
CHF
-
Swiss Franc
EUR
-
Euro
GBP
-
British Pound
JPY
-
Japanese Yen
USD
-
United States Dollar
(1)
Non-income producing.
(2)
The rate indicated is the yield to maturity at purchase.
    

See Notes to Financial Statements.


10

Statement of Assets and Liabilities
SEPTEMBER 30, 2017 (UNAUDITED)
 
Assets
 
Investment securities, at value (cost of $2,550,551,728)
$
3,326,100,311

Cash
10,022,684

Foreign currency holdings, at value (cost of $346,386)
344,647

Receivable for investments sold
11,104,759

Receivable for capital shares sold
1,188,084

Unrealized appreciation on forward foreign currency exchange contracts
359,548

Dividends and interest receivable
5,946,005

 
3,355,066,038

 
 
Liabilities
 
Payable for investments purchased
11,002,133

Payable for capital shares redeemed
4,207,228

Unrealized depreciation on forward foreign currency exchange contracts
134,088

Accrued management fees
2,460,473

Distribution and service fees payable
108,790

 
17,912,712

 
 
Net Assets
$
3,337,153,326

 
 
Net Assets Consist of:
 
Capital (par value and paid-in surplus)
$
2,501,442,000

Undistributed net investment income
2,418,059

Undistributed net realized gain
57,522,694

Net unrealized appreciation
775,770,573

 
$
3,337,153,326

 
Net Assets
Shares Outstanding
Net Asset Value
Per Share
Investor Class, $0.01 Par Value

$2,243,523,050

246,695,879

$9.09
I Class, $0.01 Par Value

$575,263,116

63,134,963

$9.11
Y Class, $0.01 Par Value

$5,125

562

$9.12
A Class, $0.01 Par Value

$129,067,932

14,201,629

$9.09*
C Class, $0.01 Par Value

$32,518,002

3,631,009

$8.96
R Class, $0.01 Par Value

$142,661,621

15,687,524

$9.09
R5 Class, $0.01 Par Value

$5,118

562

$9.11
R6 Class, $0.01 Par Value

$214,109,362

23,501,768

$9.11
*Maximum offering price $9.64 (net asset value divided by 0.9425).


See Notes to Financial Statements.


11

Statement of Operations
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2017 (UNAUDITED)
Investment Income (Loss)
 
Income:
 
Dividends (net of foreign taxes withheld of $342,806)
$
45,163,144

Interest
281,271

 
45,444,415

 
 
Expenses:
 
Management fees
15,268,159

Distribution and service fees:
 
A Class
165,182

C Class
167,821

R Class
323,045

Directors' fees and expenses
55,583

Other expenses
232

 
15,980,022

 
 
Net investment income (loss)
29,464,393

 
 
Realized and Unrealized Gain (Loss)
 
Net realized gain (loss) on:
 
Investment transactions
97,651,195

Forward foreign currency exchange contract transactions
(4,525,940
)
Foreign currency translation transactions
(29,556
)
 
93,095,699

 
 
Change in net unrealized appreciation (depreciation) on:
 
Investments
(54,836,733
)
Forward foreign currency exchange contracts
(533,332
)
Translation of assets and liabilities in foreign currencies
(3,370
)
 
(55,373,435
)
 
 
Net realized and unrealized gain (loss)
37,722,264

 
 
Net Increase (Decrease) in Net Assets Resulting from Operations
$
67,186,657



See Notes to Financial Statements.


12

Statement of Changes in Net Assets
SIX MONTHS ENDED SEPTEMBER 30, 2017 (UNAUDITED) AND YEAR ENDED MARCH 31, 2017
Increase (Decrease) in Net Assets
September 30, 2017
March 31, 2017
Operations
 
 
Net investment income (loss)
$
29,464,393

$
46,977,544

Net realized gain (loss)
93,095,699

156,585,284

Change in net unrealized appreciation (depreciation)
(55,373,435
)
350,875,020

Net increase (decrease) in net assets resulting from operations
67,186,657

554,437,848

 
 
 
Distributions to Shareholders
 
 
From net investment income:
 
 
Investor Class
(18,248,503
)
(32,451,256
)
I Class
(5,122,005
)
(8,999,573
)
Y Class
(48
)
—

A Class
(877,230
)
(1,686,305
)
C Class
(102,388
)
(124,530
)
R Class
(755,552
)
(863,803
)
R5 Class
(45
)
—

R6 Class
(1,940,563
)
(1,637,770
)
From net realized gains:
 
 
Investor Class
—

(39,808,812
)
I Class
—

(8,710,810
)
A Class
—

(2,478,897
)
C Class
—

(522,862
)
R Class
—

(1,703,290
)
R6 Class
—

(1,805,048
)
Decrease in net assets from distributions
(27,046,334
)
(100,792,956
)
 
 
 
Capital Share Transactions
 
 
Net increase (decrease) in net assets from capital share transactions (Note 5)
(88,854,410
)
96,621,471

 
 
 
Net increase (decrease) in net assets
(48,714,087
)
550,266,363

 
 
 
Net Assets
 
 
Beginning of period
3,385,867,413

2,835,601,050

End of period
$
3,337,153,326

$
3,385,867,413

 
 
 
Undistributed net investment income
$
2,418,059

—



See Notes to Financial Statements.


13

Notes to Financial Statements

SEPTEMBER 30, 2017 (UNAUDITED)

1. Organization

American Century Capital Portfolios, 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. Value 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. Income is a secondary objective.

The fund offers the Investor Class, I Class (formerly Institutional Class), Y Class, A Class, C Class, R Class, R5 Class and R6 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. Sale of the Y Class and R5 Class commenced on April 10, 2017.

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. U.S. Treasury and Government Agency securities 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.
 
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. 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.
 
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.
 

14

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. If significant fluctuations in foreign markets are identified, 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.

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.

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).


15

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, 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 rate of the fee is determined by applying a fee rate calculation formula. This formula takes into account the fund’s assets as well as certain assets, if any, of other clients of the investment advisor outside the American Century Investments family of funds (such as subadvised funds and separate accounts) that use very similar investment teams and strategies (strategy assets).

The management fee schedule range and the effective annual management fee for each class for the period ended September 30, 2017 are as follows:
 
Management Fee Schedule Range
Effective Annual Management Fee
Investor Class
0.85% to 1.00%
0.97%
I Class
0.65% to 0.80%
0.77%
Y Class
0.50% to 0.65%
0.62%
A Class
0.85% to 1.00%
0.97%
C Class
0.85% to 1.00%
0.97%
R Class
0.85% to 1.00%
0.97%
R5 Class
0.65% to 0.80%
0.77%
R6 Class
0.50% to 0.65%
0.62%

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 September 30, 2017 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 $8,081,418 and $6,959,453, respectively. The effect of interfund transactions on the Statement of Operations was $1,191,209 in net realized gain (loss) on investment transactions.

16

4. Investment Transactions

Purchases and sales of investment securities, excluding short-term investments, for the period ended September 30, 2017 were $528,887,641 and $587,077,370, respectively.

5. Capital Share Transactions

Transactions in shares of the fund were as follows:
 
Six months ended
September 30, 2017(1)
Year ended
March 31, 2017
 
Shares
Amount
Shares
Amount
Investor Class/Shares Authorized
1,520,000,000

 
1,640,000,000

 
Sold
26,181,406

$
233,335,279

56,251,252

$
483,211,934

Issued in reinvestment of distributions
2,006,356

17,917,419

8,061,133

70,925,680

Redeemed
(46,583,058
)
(413,954,533
)
(59,036,495
)
(508,891,695
)
 
(18,395,296
)
(162,701,835
)
5,275,890

45,245,919

I Class/Shares Authorized
500,000,000

 
575,000,000

 
Sold
11,270,237

100,127,009

15,028,430

129,001,523

Issued in reinvestment of distributions
565,842

5,064,415

2,016,980

17,685,960

Redeemed
(6,987,457
)
(62,241,880
)
(29,337,402
)
(247,996,653
)
 
4,848,622

42,949,544

(12,291,992
)
(101,309,170
)
Y Class/Shares Authorized
50,000,000

 
N/A

 
Sold
557

5,000

 
 
Issued in reinvestment of distributions
5

48

 
 
 
562

5,048

 
 
A Class/Shares Authorized
90,000,000

 
160,000,000

 
Sold
2,222,153

19,735,403

5,774,791

49,728,772

Issued in reinvestment of distributions
85,626

764,308

425,838

3,753,179

Redeemed
(5,731,696
)
(51,103,330
)
(6,535,938
)
(55,226,915
)
 
(3,423,917
)
(30,603,619
)
(335,309
)
(1,744,964
)
C Class/Shares Authorized
30,000,000

 
30,000,000

 
Sold
351,092

3,072,281

1,135,830

9,766,081

Issued in reinvestment of distributions
10,879

95,769

65,993

579,208

Redeemed
(702,249
)
(6,136,863
)
(715,498
)
(6,017,956
)
 
(340,278
)
(2,968,813
)
486,325

4,327,333

R Class/Shares Authorized
100,000,000

 
70,000,000

 
Sold
3,186,984

28,322,200

4,960,151

42,461,865

Issued in reinvestment of distributions
84,562

755,552

289,845

2,567,093

Redeemed
(602,905
)
(5,303,031
)
(1,088,087
)
(9,353,854
)
 
2,668,641

23,774,721

4,161,909

35,675,104

R5 Class/Shares Authorized
50,000,000

 
N/A

 
Sold
557

5,000

 
 
Issued in reinvestment of distributions
5

45

 
 
 
562

5,045

 
 
R6 Class/Shares Authorized
130,000,000

 
50,000,000

 
Sold
6,324,160

56,426,302

14,828,872

130,218,397

Issued in reinvestment of distributions
216,925

1,940,563

387,795

3,442,818

Redeemed
(1,983,594
)
(17,681,366
)
(2,204,604
)
(19,233,966
)
 
4,557,491

40,685,499

13,012,063

114,427,249

Net increase (decrease)
(10,083,613
)
$
(88,854,410
)
10,308,886

$
96,621,471


(1)
April 10, 2017 (commencement of sale) through September 30, 2017 for the Y Class and R5 Class.



17

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. There were no significant transfers between levels during the period.

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
$
3,113,636,587

$
127,625,669

—

Temporary Cash Investments
—

84,838,055

—

 
$
3,113,636,587

$
212,463,724

—

Other Financial Instruments
 
 
 
Forward Foreign Currency Exchange Contracts
—

$
359,548

—

      
 
 
 
Liabilities
 
 
 
Other Financial Instruments
 
 
 
Forward Foreign Currency Exchange Contracts
—

$
134,088

—


7. Derivative Instruments

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. 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 $96,350,576.

The value of foreign currency risk derivative instruments as of September 30, 2017, is disclosed on the Statement of Assets and Liabilities as an asset of $359,548 in unrealized appreciation on forward foreign currency exchange contracts and a liability of $134,088 in unrealized depreciation on forward foreign currency exchange contracts. For the six months ended September 30, 2017, the effect of foreign currency risk derivative instruments on the Statement of Operations was $(4,525,940) in net realized gain (loss) on forward foreign currency exchange contract transactions and $(533,332) in change in net unrealized appreciation (depreciation) on forward foreign currency exchange contracts.

18

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
$
2,648,039,965

Gross tax appreciation of investments
$
768,031,106

Gross tax depreciation of investments
(89,970,760
)
Net tax appreciation (depreciation) of investments
$
678,060,346


The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales.

19

Financial Highlights
For a Share Outstanding Throughout the Years Ended March 31 (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
 
 
 
 
 
 
 
 
 
 
 
 
2017(3)
$8.98
0.08
0.10
0.18
(0.07)
—
(0.07)
$9.09
2.05%
0.97%(4)
1.76%(4)
16%

$2,243,523

2017
$7.73
0.13
1.39
1.52
(0.12)
(0.15)
(0.27)
$8.98
19.79%
0.98%
1.48%
46%

$2,380,747

2016
$8.55
0.13
(0.28)
(0.15)
(0.15)
(0.52)
(0.67)
$7.73
(1.53)%
0.98%
1.65%
48%

$2,009,044

2015
$8.46
0.13
0.62
0.75
(0.13)
(0.53)
(0.66)
$8.55
8.91%
0.97%
1.54%
45%

$2,003,967

2014
$7.11
0.13
1.34
1.47
(0.12)
—
(0.12)
$8.46
20.82%
0.98%
1.60%
49%

$2,406,139

2013
$6.23
0.10
0.89
0.99
(0.11)
—
(0.11)
$7.11
16.08%
1.00%
1.65%
48%

$1,955,536

I Class(5)
 
 
 
 
 
 
 
 
 
 
 
 
2017(3)
$9.00
0.09
0.10
0.19
(0.08)
—
(0.08)
$9.11
2.15%
0.77%(4)
1.96%(4)
16%

$575,263

2017
$7.75
0.14
1.40
1.54
(0.14)
(0.15)
(0.29)
$9.00
19.98%
0.78%
1.68%
46%

$524,448

2016
$8.56
0.15
(0.27)
(0.12)
(0.17)
(0.52)
(0.69)
$7.75
(1.21)%
0.78%
1.85%
48%

$546,782

2015
$8.47
0.15
0.62
0.77
(0.15)
(0.53)
(0.68)
$8.56
9.10%
0.77%
1.74%
45%

$1,215,076

2014
$7.12
0.14
1.34
1.48
(0.13)
—
(0.13)
$8.47
21.03%
0.78%
1.80%
49%

$749,868

2013
$6.24
0.12
0.88
1.00
(0.12)
—
(0.12)
$7.12
16.29%
0.80%
1.85%
48%

$172,891

Y Class
 
 
 
 
 
 
 
 
 
 
 
 
 
2017(6)
$8.98
0.09
0.14
0.23
(0.09)
—
(0.09)
$9.12
2.54%
0.62%(4)
2.11%(4)
16%(7)

$5



For a Share Outstanding Throughout the Years Ended March 31 (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
 
 
 
 
 
 
 
 
 
 
 
 
 
2017(3)
$8.98
0.07
0.10
0.17
(0.06)
—
(0.06)
$9.09
1.92%
1.22%(4)
1.51%(4)
16%

$129,068

2017
$7.73
0.11
1.39
1.50
(0.10)
(0.15)
(0.25)
$8.98
19.49%
1.23%
1.23%
46%

$158,200

2016
$8.54
0.11
(0.27)
(0.16)
(0.13)
(0.52)
(0.65)
$7.73
(1.65)%
1.23%
1.40%
48%

$138,798

2015
$8.45
0.11
0.62
0.73
(0.11)
(0.53)
(0.64)
$8.54
8.64%
1.22%
1.29%
45%

$365,063

2014
$7.10
0.11
1.34
1.45
(0.10)
—
(0.10)
$8.45
20.55%
1.23%
1.35%
49%

$362,439

2013
$6.23
0.09
0.87
0.96
(0.09)
—
(0.09)
$7.10
15.64%
1.25%
1.40%
48%

$295,085

C Class
 
 
 
 
 
 
 
 
 
 
 
 
2017(3)
$8.84
0.03
0.12
0.15
(0.03)
—
(0.03)
$8.96
1.68%
1.97%(4)
0.76%(4)
16%

$32,518

2017
$7.62
0.04
1.36
1.40
(0.03)
(0.15)
(0.18)
$8.84
18.45%
1.98%
0.48%
46%

$35,124

2016
$8.43
0.05
(0.27)
(0.22)
(0.07)
(0.52)
(0.59)
$7.62
(2.42)%
1.98%
0.65%
48%

$26,542

2015
$8.36
0.05
0.60
0.65
(0.05)
(0.53)
(0.58)
$8.43
7.77%
1.97%
0.54%
45%

$29,473

2014
$7.03
0.05
1.33
1.38
(0.05)
—
(0.05)
$8.36
19.64%
1.98%
0.60%
49%

$25,869

2013
$6.16
0.04
0.88
0.92
(0.05)
—
(0.05)
$7.03
14.98%
2.00%
0.65%
48%

$16,761

R Class
 
 
 
 
 
 
 
 
 
 
 
 
 
2017(3)
$8.98
0.06
0.10
0.16
(0.05)
—
(0.05)
$9.09
1.79%
1.47%(4)
1.26%(4)
16%

$142,662

2017
$7.73
0.08
1.40
1.48
(0.08)
(0.15)
(0.23)
$8.98
19.18%
1.48%
0.98%
46%

$116,917

2016
$8.55
0.09
(0.28)
(0.19)
(0.11)
(0.52)
(0.63)
$7.73
(2.02)%
1.48%
1.15%
48%

$68,477

2015
$8.46
0.09
0.62
0.71
(0.09)
(0.53)
(0.62)
$8.55
8.37%
1.47%
1.04%
45%

$52,623

2014
$7.10
0.09
1.35
1.44
(0.08)
—
(0.08)
$8.46
20.39%
1.48%
1.10%
49%

$37,076

2013
$6.23
0.07
0.88
0.95
(0.08)
—
(0.08)
$7.10
15.35%
1.50%
1.15%
48%

$30,293



For a Share Outstanding Throughout the Years Ended March 31 (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)
R5 Class
 
 
 
 
 
 
 
 
 
 
 
 
 
2017(6)
$8.98
0.08
0.13
0.21
(0.08)
—
(0.08)
$9.11
2.36%
0.77%(4)
1.96%(4)
16%(7)

$5

R6 Class
 
 
 
 
 
 
 
 
 
 
 
 
 
2017(3)
$9.00
0.09
0.11
0.20
(0.09)
—
(0.09)
$9.11
2.22%
0.62%(4)
2.11%(4)
16%

$214,109

2017
$7.75
0.16
1.39
1.55
(0.15)
(0.15)
(0.30)
$9.00
20.16%
0.63%
1.83%
46%

$170,432

2016
$8.56
0.16
(0.27)
(0.11)
(0.18)
(0.52)
(0.70)
$7.75
(1.06)%
0.63%
2.00%
48%

$45,959

2015
$8.47
0.17
0.61
0.78
(0.16)
(0.53)
(0.69)
$8.56
9.27%
0.62%
1.89%
45%

$34,116

2014(8)
$7.77
0.14
0.66
0.80
(0.10)
—
(0.10)
$8.47
10.41%
0.62%(4)
2.58%(4)
49%(9)

$3,140

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 September 30, 2017 (unaudited).
(4)
Annualized.
(5)
Prior to April 10, 2017, the I Class was referred to as the Institutional Class.
(6)
April 10, 2017 (commencement of sale) through September 30, 2017 (unaudited).
(7)
Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the six months ended September 30, 2017.
(8)
July 26, 2013 (commencement of sale) through March 31, 2014.
(9)
Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended March 31, 2014.

See Notes to Financial Statements.


Approval of Management Agreement


At a meeting held on June 29, 2017, the Fund’s Board of Directors (the "Board") unanimously approved the renewal of the management agreement pursuant to which American Century Investment Management, Inc. (the “Advisor”) acts as the investment advisor for the Fund. Under Section 15(c) of the Investment Company Act, contracts for investment advisory services are required to be reviewed, evaluated, and approved by a majority of a fund’s directors (the “Directors”), including a majority of the independent Directors, each year.
    
Prior to its consideration of the renewal of the management agreement, the Directors requested and reviewed extensive data and information compiled by the Advisor and certain independent providers of evaluation data concerning the Fund and the services provided to the Fund by the Advisor. This review was in addition to the oversight and evaluation undertaken by the Board and its committees on a continual basis and the information received was supplemental to the extensive information that the Board and its committees receive and consider throughout the year.

In connection with its consideration of the renewal of the management agreement, the Board’s review and evaluation of the services provided by the Advisor included, but was not limited to, the following:

•
the nature, extent, and quality of investment management, shareholder services, and other services provided and to be provided to the Fund;
•
the wide range of other programs and services provided and to be provided to the Fund and its shareholders on a routine and non-routine basis;
•
the investment performance of the Fund, including data comparing the Fund's performance to appropriate benchmarks and/or a peer group of other mutual funds with similar investment objectives and strategies;
•
the cost of owning the Fund compared to the cost of owning similar funds;
•
the compliance policies, procedures, and regulatory experience of the Advisor and the Fund's service providers;
•
financial data showing the cost of services provided to the Fund, the profitability of the Fund to the Advisor, and the overall profitability of the Advisor;
•
strategic plans of the Advisor
•
possible economies of scale associated with the Advisor’s management of the Fund and other accounts under its management;
•
data comparing services provided and charges to the Advisor's other investment management clients;
•
acquired fund fees and expenses;
•
payments and practices by the Fund and the Advisor regarding financial intermediaries, the nature of services provided by intermediaries, and the terms of share classes utilized; and
•
any collateral benefits derived by the Advisor from the management of the Fund.

The Directors held three in-person meetings and one telephonic meeting to review and discuss the information provided. The independent Directors also reviewed responses to supplemental information requests and held active discussions with the Advisor regarding the renewal of the management agreement. The independent Directors had the benefit of the advice of their independent counsel throughout the process.

Factors Considered

The Directors considered all of the information provided by the Advisor, the independent data providers, and independent counsel in connection with the approval. They determined that the

23

information was sufficient for them to evaluate the management agreement for the Fund. In connection with their review, the Directors did not identify any single factor as being all-important or controlling, and each Director may have attributed different levels of importance to different factors. In deciding to renew the management agreement, the Board based its decision on a number of factors, including without limitation the following:

Nature, Extent and Quality of Services - Generally. Under the management agreement, the Advisor is responsible for providing or arranging for all services necessary for the operation of the Fund. The Board noted that the Advisor provides or arranges at its own expense a wide variety of services including without limitation the following:

•
portfolio research and security selection
•
securities trading
•
Fund administration
•
custody of Fund assets
•
daily valuation of the Fund’s portfolio
•
shareholder servicing and transfer agency, including shareholder confirmations, recordkeeping, and communications
•
legal services (except the independent Directors’ counsel)
•
regulatory and portfolio compliance
•
financial reporting
•
marketing and distribution (except amounts paid by the Fund under Rule 12b-1 plans)

The Board noted that many of these services have expanded over time in terms of both quantity and complexity in response to shareholder demands, competition in the industry, changing distribution channels, and the changing regulatory environment. The Board noted specifically the resources the Advisor has committed during the year to compliance with the Department of Labor fiduciary rule and share class modernization.

Investment Management Services. The nature of the investment management services provided to the Fund is quite complex and allows Fund shareholders access to professional money management, instant diversification of their investments within an asset class, the opportunity to easily diversify among asset classes by investing in or exchanging among various American Century Investments funds, and liquidity. In evaluating investment performance, the Board expects the Advisor to manage the Fund in accordance with its investment objectives and approved strategies. Further, the Directors recognize that the Advisor has an obligation to monitor trading activities, and in particular to seek the best execution of fund trades, and to evaluate the use of and payment for research. In providing these services, the Advisor utilizes teams of investment professionals (portfolio managers, analysts, research assistants, and securities traders) who require extensive information technology, research, training, compliance, and other systems to conduct their business. The Board, directly and through its Fund Performance Review Committee, provides oversight of the investment performance process. It regularly reviews investment performance information for the Fund, together with comparative information for appropriate benchmarks and/or peer groups of similarly-managed funds, over different time horizons. The Directors also review detailed performance information provided by the Advisor during the management agreement renewal process. If performance concerns are identified, the Fund receives special reviews until performance improves, during which the Board receives a report from the Advisor regarding the reasons for such results (e.g., market conditions, security selection) and any efforts being undertaken to improve performance. The Fund’s performance was above its benchmark for the one-, three-, five-, and ten-year periods reviewed by the Board. The Board found the investment management services provided by the Advisor to the Fund to be satisfactory and consistent with the management agreement.

Shareholder and Other Services. Under the management agreement, the Advisor provides the Fund with a comprehensive package of transfer agency, shareholder, and other services. The Board, directly and through various committees of the Board, regularly reviews reports and

24

evaluations of such services at its regular meetings. These reports include, but are not limited to, information regarding the operational efficiency and accuracy of the shareholder and transfer agency services provided, staffing levels, shareholder satisfaction (as measured by external as well as internal sources), technology support, new products and services offered to Fund shareholders, securities trading activities, portfolio valuation services, auditing services, and legal and operational compliance activities. Certain aspects of shareholder and transfer agency service level efficiency and the quality of securities trading activities are measured by independent third party providers and are presented in comparison to other fund groups not managed by the Advisor. The Board found the services provided by the Advisor to the Fund under the management agreement to be competitive and of high quality.

Costs of Services and Profitability. The Advisor provides detailed information concerning its cost of providing various services to the Fund, its profitability in managing the Fund (pre- and post-distribution), its overall profitability, and its financial condition. The Directors have reviewed with the Advisor the methodology used to prepare this financial information. This information is considered in evaluating the Advisor’s financial condition, its ability to continue to provide services under the management agreement, and the reasonableness of the current management fee. The Board concluded that the Advisor’s profits were reasonable in light of the services provided to the Fund.

Ethics. The Board generally considers the Advisor’s commitment to providing quality services to shareholders and to conducting its business ethically. They noted that the Advisor’s practices generally meet or exceed industry best practices.

Economies of Scale. The Board also reviewed information provided by the Advisor regarding the possible existence of economies of scale in connection with the management of the Fund. The Board concluded that economies of scale are difficult to measure and predict with precision, especially on a fund-by-fund basis. The Board concluded that the Advisor is appropriately sharing economies of scale through its competitive fee structure, offering competitive fees from fund inception, and through reinvestment in its business to provide shareholders additional content and services. The Board also noted that economies of scale are shared with the Fund and its shareholders through management fee breakpoints that serve to reduce the effective management fee as the assets of the Fund grow.

Comparison to Other Funds’ Fees. The management agreement provides that the Fund pays the Advisor a single, all-inclusive (or unified) management fee for providing all services necessary for the management and operation of the Fund, other than brokerage expenses, expenses attributable to short sales, taxes, interest, extraordinary expenses, and the fees and expenses of the Fund’s independent Directors (including their independent legal counsel) and expenses incurred in connection with the provision of shareholder services and distribution services under a plan adopted pursuant to Rule 12b-1 under the 1940 Act. Under the unified fee structure, the Advisor is responsible for providing all investment advisory, custody, audit, administrative, compliance, recordkeeping, marketing and shareholder services, or arranging and supervising third parties to provide such services. By contrast, most other funds are charged a variety of fees, including an investment advisory fee, a transfer agency fee, an administrative fee, distribution charges, and other expenses. Other than their investment advisory fees and any applicable Rule 12b-1 distribution fees, all other components of the total fees charged by these other funds may be increased without shareholder approval. The Board believes the unified fee structure is a benefit to Fund shareholders because it clearly discloses to shareholders the cost of owning Fund shares, and, since the unified fee cannot be increased without a vote of Fund shareholders, it shifts to the Advisor the risk of increased costs of operating the Fund and provides a direct incentive to minimize administrative inefficiencies. Part of the Board’s analysis of fee levels involves reviewing certain evaluative data compiled by an independent provider comparing the Fund’s unified fee to the total expense ratios of its peers. The unified fee charged to shareholders of the Fund was below the median of the total expense ratios of the Fund’s peer expense universe and was within the range of its peer expense group. The Board discussed with the Advisor the factors that impacted the level of the fee in relation to its peers. The Board concluded that the management fee

25

paid by the Fund to the Advisor under the management agreement is reasonable in light of the services provided to the Fund.

Comparison to Fees and Services Provided to Other Clients of the Advisor. The Directors also requested and received information from the Advisor concerning the nature of the services, fees, costs, and profitability of its advisory services to advisory clients other than the Fund. They observed that these varying types of client accounts require different services and involve different regulatory and entrepreneurial risks than the management of the Fund. The Board analyzed this information and concluded that the fees charged and services provided to the Fund were reasonable by comparison.

Payments to Intermediaries. The Directors also requested and received a description of payments made to intermediaries by the Fund and the Advisor and services provided in response thereto. These payments include various payments made by the Fund or the Advisor to different types of intermediaries and recordkeepers for distribution and service activities provided for the Fund. The Board reviewed such information and received representations from the Advisor that all such payments by the Fund were made pursuant to the Fund's Rule 12b-1 Plan and that all such payments by the Advisor were made from the Advisor's resources and reasonable profits. The Board found the payments to be reasonable in scope and purpose.

Collateral or “Fall-Out” Benefits Derived by the Advisor. The Board considered the existence of collateral benefits the Advisor may receive as a result of its relationship with the Fund. They concluded that the Advisor’s primary business is managing mutual funds and it generally does not use fund or shareholder information to generate profits in other lines of business, and therefore does not derive any significant collateral benefits from them. The Board noted that additional assets from other clients may offer the Advisor some benefit from increased leverage with service providers and counterparties. Additionally, the Advisor receives proprietary research from broker-dealers that execute fund portfolio transactions, which the Board concluded is likely to benefit other clients of the Advisor, as well as Fund shareholders. The Board also determined that the Advisor is able to provide investment management services to certain clients other than the Fund, at least in part, due to its existing infrastructure built to serve the fund complex. The Board concluded that appropriate allocation methodologies had been employed to assign resources and the cost of those resources to these other clients and, where expressly provided, these other client assets may be included with the assets of the Fund to determine breakpoints in the management fee schedule.

Existing Relationship. The Board also considered whether there was any reason for not continuing the existing arrangement with the Advisor. In this regard, the Board was mindful of the potential disruptions of the Fund’s operations and various risks, uncertainties, and other effects that could occur as a result of a decision not to continue such relationship. In particular, the Board recognized that most shareholders have invested in the Fund on the strength of the Advisor’s industry standing and reputation and in the expectation that the Advisor will have a continuing role in providing advisory services to the Fund.

Conclusion of the Directors. As a result of this process, the Board, including all of the independent Directors, taking into account all of the factors discussed above and the information provided by the Advisor and others in connection with its review and throughout the year, determined that the management fee is fair and reasonable in light of the services provided and that the investment management agreement between the Fund and the Advisor should be renewed.

26

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

A description of the policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund is available without charge, upon request, by calling 1-800-345-2021. It is also available on the "About Us" page of American Century Investments’ website at americancentury.com and 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 the "About Us" page at americancentury.com. 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. The fund’s Forms N-Q are available on the SEC’s website at sec.gov, and may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. 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.

27

Notes


28




acihorizblkb99.jpg
 
 
 
 
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 Capital Portfolios, 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.
 
 
 
 
©2017 American Century Proprietary Holdings, Inc. All rights reserved.
CL-SAN-90807  1711
 


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.


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 registrant's second fiscal quarter of 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. 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.

(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 Capital Portfolios, Inc.
 
 
 
By:
/s/ Jonathan S. Thomas
 
Name:
Jonathan S. Thomas
 
Title:
President
 
 
 
Date:
November 27, 2017

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/ Jonathan S. Thomas
 
Name:
Jonathan S. Thomas
 
Title:
President
 
 
(principal executive officer)
 
 
 
Date:
November 27, 2017

By:
/s/ C. Jean Wade
 
Name:
C. Jean Wade
 
Title:
Vice President, Treasurer, and
 
 
Chief Financial Officer
 
 
(principal financial officer)
 
 
 
Date:
November 27, 2017