2021 Qualified Dividend Income

Qualified dividends are dividends received by a fund from a stock, provided that the fund has held the stock for a required holding period. Mutual funds may pass through to investors any qualified dividends it receives. At the fund level, these may be applied to ordinary income and/or short-term capital gains distributions.

Qualified dividends are taxed at the long-term capital gain rates. To qualify for these reduced rates, you must own the mutual fund's shares for a period of 61 days or longer. That period must include the date the fund distributed the dividends.

The table below reflects the percentage of each fund's distributions that are considered qualified.

Mutual Funds

Fund Name Percentage to Apply to Ordinary Dividends*
AC Alternatives® Market Neutral Value Fund 0.00%
Balanced Fund 7.88%
Disciplined Core Value Fund 12.91%
Disciplined Growth Fund 9.87%
Emerging Markets Debt Fund 0.00%
Emerging Markets Fund 84.32%
Emerging Markets Small Cap Fund 100.00%
Equity Growth Fund 14.04%
Equity Income Fund 71.91%
Focused Dynamic Growth Fund 18.37%
Focused Global Growth 85.42%
Focused International Growth Fund 100.00%
Focused Large Cap Value Fund 33.78%
Global Bond Fund 0.00%
Global Gold Fund 100.00%
Global Real Estate Fund 10.84%
Global Small Cap Fund 8.65%
Growth Fund 89.78%
Heritage Fund 14.80%
High Income Fund 0.00%
High-Yield Fund 0.00%
International Bond 0.00%
International Growth Fund 100.00%
International Opportunities Fund 27.60%
International Value Fund 79.17%
Mid Cap Value Fund 53.74%
Non-U.S. Intrinsic Value Fund 46.76%
NT Disciplined Growth Fund 6.96%
NT Emerging Markets Fund 49.36%
NT Equity Growth Fund 8.98%
NT Focused Large Cap Value Fund 25.14%
NT Global Real Estate Fund 10.41%
NT Growth Fund 16.51%
NT Heritage Fund 7.34%
NT International Growth Fund 59.24%
NT International Small-Mid Cap Fund 10.97%
NT International Value Fund 33.22%
NT Mid Cap Value Fund 26.65%
One Choice® 2025 Portfolio 18.10%
One Choice® 2030 Portfolio 19.13%
One Choice® 2035 Portfolio 20.15%
One Choice® 2040 Portfolio 21.60%
One Choice® 2045 Portfolio 22.76%
One Choice® 2050 Portfolio 23.94%
One Choice® 2055 Portfolio 24.46%
One Choice® 2060 Portfolio 25.33%
One Choice® 2065 Portfolio 25.06%
One Choice® Blend Plus 2015 Portfolio 21.99%
One Choice® Blend Plus 2020 Portfolio 22.47%
One Choice® Blend Plus 2025 Portfolio 21.43%
One Choice® Blend Plus 2030 Portfolio 26.18%
One Choice® Blend Plus 2035 Portfolio 27.84%
One Choice® Blend Plus 2040 Portfolio 28.26%
One Choice® Blend Plus 2045 Portfolio 31.05%
One Choice® Blend Plus 2050 Portfolio 33.09%
One Choice® Blend Plus 2055 Portfolio 33.39%
One Choice® Blend Plus 2060 Portfolio 33.31%
One Choice® Blend Plus 2065 Portfolio 32.54%
One Choice® In Retirement Portfolio 16.81%
One Choice® Portfolio: Aggressive 24.06%
One Choice® Portfolio: Conservative 18.02%
One Choice® Portfolio: Moderate 19.84%
One Choice® Portfolio: Very Aggressive 29.39%
One Choice® Portfolio: Very Conservative 11.02%
Real Estate Fund 0.00%
Select Fund 0.00%
Small Cap Growth Fund 2.19%
Small Cap Value Fund 26.57%
Small Company Fund 100.00%
Strategic Allocation: Aggressive Fund 27.68%
Strategic Allocation: Conservative Fund 16.54%
Strategic Allocation: Moderate Fund 23.93%
Sustainable Equity Fund 100.00%
Ultra® Fund 0.00%
Utilities Fund 76.79%
Value Fund 59.07%


Exchange Traded Funds (ETFs)

Fund Name Percentage to Apply to Ordinary Dividends*
American Century® Diversified Corporate Bond ETF - KORP2 0.00%
American Century® Diversified Municipal Bond ETF - TAXF2 0.00%
American Century® Emerging Markets Bond ETF - AEMB2 0.00%
American Century® Focused Dynamic Growth ETF - FDGA, D 0.00%
American Century® Focused Large Cap Value ETF - FLVA, D 59.00%
American Century® Low Volatility ETF - LVOL2 100.00%
American Century® Mid Cap Growth Impact ETF - MIDA, C, E 0.00%
American Century® Multisector Income ETF - MUSI2 0.00%
American Century® Quality Convertible Securities ETF - QCON2 64.30%
American Century® Quality Diversified International ETF - QINT3 100.00%
American Century® Quality Preferred ETF - QPFF2 80.85%
American Century® Select High Yield ETF - AHYB2 0.00%
American Century® STOXX® U.S. Quality Growth ETF - QGRO3, 4, 5 100.00%
American Century® STOXX® U.S. Quality Value ETF - VALQ3, 4, 5 100.00%
American Century® Sustainable Equity ETF - ESGAA, C 100.00%
American Century® Sustainable Growth ETF - ESGYA, C, E 100.00%

 

AFDG, FLV, MID, ESGY, ESGA: These ETFs are different from traditional ETFs. Traditional ETFs tell the public what assets they hold each day. This ETF will not. This may create additional risks for your investment.

SPECIFICALLY:

 

Exchange Traded Funds (ETFs) are bought and sold through exchange trading at market price (not NAV), and are not individually redeemed from the fund. Shares may trade at a premium or discount to their NAV in the secondary market. Brokerage commissions will reduce returns.

Exchange Traded Funds (ETFs): Foreside Fund Services, LLC - Distributor, not affiliated with American Century Investments Services, Inc.

Mutual Funds: American Century Investment Services, Inc., Distributor.


* Ordinary dividends includes net investment income distributions and short-term capital gain distributions.

2

This fund is an actively managed ETF that does not seek to replicate the performance of a specified index. To determine whether to buy or sell a security, the portfolio managers consider, among other things, various fund requirements and standards, along with economic conditions, alternative investments, interest rates and various credit metrics. If the portfolio manager considerations are inaccurate or misapplied, the fund's performance may suffer.

3

This fund is not actively managed and the portfolio managers do not attempt to take defensive positions under any market conditions, including declining markets. The portfolio managers also do not generally add or remove a security from the fund until such security is similarly added or removed from the underlying index. Therefore, the fund may hold an underperforming security or not hold an outperforming security until the underlying index reacts. This may result in underperformance compared to the market generally. In addition, there is no assurance that the underlying index will be determined, composed or calculated accurately. While the index provider provides descriptions of what the underlying index is designed to achieve, the index provider does not guarantee the quality, accuracy or completeness of data in respect of its indices, and does not guarantee that the underlying index will be in line with the described index methodology. Gains, losses or costs to the fund caused by errors in the underlying index may therefore be borne by the fund and its shareholders.

4

STOXX® is a registered trademark of STOXX Ltd.

5

The STOXX® Index is the intellectual property (including registered trademarks) of STOXX Limited, Zurich, Switzerland ("STOXX"), Deutsche Börse Group or their licensors, which is used under license. The fund is neither sponsored nor promoted, distributed or in any other manner supported by STOXX, Deutsche Börse Group or their licensors, research partners or data providers and STOXX, Deutsche Börse Group and their licensors, research partners or data providers do not give any warranty, and exclude any liability (whether in negligence or otherwise) with respect thereto generally or specifically in relation to any errors, omissions or interruptions in the STOXX® Index or its data.

Lowered rates for qualified dividends are a result of the 2003 Tax Act and have been made permanent by the American Taxpayer Relief Act of 2012.

Investment return and principal value of security investments will fluctuate. The value at the time of redemption may be more or less than the original cost. Past performance is no guarantee of future results.

C

The fund is an actively managed ETF that does not seek to replicate the performance of a specified index.

Proxy Portfolio Risk:
The goal of the Proxy Portfolio is to track closely the daily performance of the Actual Portfolio. The Proxy Portfolio is designed to reflect the economic exposures and the risk characteristics of the Actual Portfolio on any given trading day.

  • ETFs trading on the basis of a published Proxy Portfolio may exhibit wider premiums and discounts, bid/ask spreads, and tracking error than other ETFs using the same investment strategies that publish their portfolios on a daily basis, especially during periods of market disruption or volatility. Therefore, shares of the fund may cost investors more to trade than shares of a traditional ETF.
  • Each day the fund calculates the overlap between the holdings of the prior Business Day's Proxy Portfolio compared to the Actual Portfolio (Proxy Overlap) and the difference, in percentage terms, between the Proxy Portfolio per share NAV and that of the Actual Portfolio (Tracking Error).
  • Although the fund seeks to benefit from keeping its portfolio information secret, market participants may attempt to use the Proxy Portfolio to identify a fund's trading strategy, which if successful, could result in such market participants engaging in certain predatory trading practices that may have the potential to harm the fund and its shareholders.

Premium/Discount Risk: Although the Proxy Portfolio is intended to provide investors with enough information to allow for an effective arbitrage mechanism that will keep the market price of the fund at or close to the underlying net asset value (NAV) per share of the fund, there is a risk (which may increase during periods of market disruption or volatility) that market prices will vary significantly from the underlying NAV of the fund.

Trading Issues Risk:
 Trading halts may have a greater impact on this fund compared to other ETFs due to the fund's nontransparent structure.

Authorized Participant Concentration Risk:
Only an authorized participant may engage in creation or redemption transactions directly with the fund. The fund may have a limited number of institutions that act as authorized participants. The fact that the fund is offering a novel and unique structure may affect the number of entities willing to act as Authorized Participants. During times of market stress, Authorized Participants may be more likely to step away from this type of ETF than a traditional ETF.

D

The fund is an actively managed ETF that does not seek to replicate the performance of a specified index.

This fund may invest in a limited number of companies, which carries more risk because changes in the value of a single company may have a more significant effect, either negative or positive on the fund's value.

Because the shares are traded in the secondary market, a broker may charge a commission to execute a transaction in shares, and an investor also may incur the cost of the spread between the price at which a dealer will buy shares and the somewhat higher price at which a dealer will sell shares.

The Verified Intraday Indicative Value: Unlike traditional ETFs, the fund does not tell the public what assets it holds each day. Instead, the fund provides a verified intraday indicative value (VIIV), calculated and disseminated every second throughout the trading day by the Cboe BZX Exchange, Inc. (Listing Exchange) or by market data vendors or other information providers. It is available on websites that publish updated market quotations during the trading day, by searching for the fund's ticker plus the extension .IV, though some websites require more unique extensions. For example, the VIIV can be found on Yahoo Finance (https://finance.yahoo.com) by typing "^FLV-IV" (for Focused Large Cap Value ETF) or "^FDG-IV" (for Focused Dynamic Growth ETF) in the search box labeled "Quote Lookup." The VIIV is based on the current market value of the securities in the fund's portfolio on that day. The VIIV is intended to provide investors and other market participants with a highly correlated per share value of the underlying portfolio that can be compared to the current market price. The specific methodology for calculating the fund's VIIV is available on the fund's website.

Portfolio Transparency Risk: The VIIV is intended to provide investors with enough information to allow for an effective arbitrage mechanism that will keep the market price of the fund's shares trading at or close to the underlying net asset value (NAV) per share of the fund. There is, however, a risk, which may increase during periods of market disruption or volatility, that market prices will vary significantly from the underlying NAV of the fund. Similarly, because the fund's shares trade on the basis of a published VIIV, they may trade at a wider bid/ask spread than shares of ETFs that publish their portfolios on a daily basis, especially during periods of market disruption or volatility, and therefore, may cost investors more to trade. Although the fund seeks to benefit from keeping its portfolio information secret, some market participants may attempt to use the VIIV to identify the fund's trading strategy, which if successful, could result in such market participants engaging in certain predatory trading practices that may have the potential to harm the fund and its shareholders.

Early Close / Trading Halt Risk: Trading in fund shares on the Listing Exchange may be halted in certain circumstances. Trading halts may have a greater impact on the fund than traditional ETFs because of its lack of transparency. An extended trading halt in a portfolio security could exacerbate discrepancies between the VIIV and the fund's NAV.

Authorized Participant / Authorized Participant Representative Concentration Risk: The fund issues and redeems shares in Creation Units to Authorized Participants. The creation and redemption process for the fund occurs through a confidential brokerage account (Confidential Account) with an agent, called an AP Representative. The fund may have a limited number of institutions that act as Authorized Participants and AP Representatives, none of which are obligated to engage in creation or redemption transactions. The fact that the fund is offering a novel and unique structure may affect the number of entities willing to act as Authorized Participants and AP Representatives. During times of market stress, Authorized Participants may be more likely to step away from this type of ETF than a traditional ETF.

E

ESGY, MID: The fund is classified as non-diversified. Because it is non-diversified, it may hold large positions in a small number of securities. To the extent it maintains such positions; a price change in any one of those securities may have a greater impact on the fund’s share price than if it were diversified.

IRS Circular 230 Disclosure: American Century Companies, Inc. and its affiliates do not provide tax advice. Accordingly, any discussion of U.S. tax matters contained herein (including any attachments) is not intended or written to be used, and cannot be used, in connection with the promotion, marketing or recommendation by anyone unaffiliated with American Century Companies, Inc. of any of the matters addressed herein or for the purpose of avoiding U.S. tax-related penalties.

This information is for educational purposes only and is not intended as tax advice. Please consult your tax advisor for more detailed information or for advice regarding your individual situation.