American Century is a large, well- respected family of mutual funds with its headquarters in Kansas City, Missouri. This company was founded in 1958 and currently controls $85 billion in assets. American century used to be called "Twentieth Century" mutual funds. It changed its name in the 1990's, since the end of the twentieth century was near and the name would no longer be relevant.

Fund Offerings:

American Century has a fund to fit most any investment goal. Here's a breakdown of the groups of funds that American Century offers:

Stock Funds: American Century has several stock funds to choose from, ranging from low to moderate to high risk. On the risky end of the spectrum, you will find funds like American Century Ultra, Vista, Growth, and a few others. On the lower end, you will find funds like American Century Select. There are a total of 18 growth- oriented stock funds to choose from.

Growth and Income Funds: These are funds which are balanced between stock and bonds, and/or high- dividend stock., offering more growth than you would normally get from an income fund, with more price stability. American Century offers such funds as Equity Income, Large Cap Value, Small Cap Value, Utilities, etc. There are a total of 15 funds in this category.

Income Funds: If you’re looking for a steady stream of income without much chance for loss of principal, then an income fund might be exactly what you should buy. American Century offers U.S. Treasury bond funds, corporate bond funds, and municipal tax- free bond funds. In this group, there are 24 different mutual funds to choose from.

Money Market Funds: These types of funds offer the lowest overall returns, but the greatest amount of safety and preservation of capital. American Century offers both taxable and non- taxable funds in this group, which has a total of 8 funds to select from.

Specialty Funds: These funds target their money into specific assets and they can often fluctuate widely in price, so they tend to be more risky. Here, you will find mutual funds that specialize in purchasing gold, real estate, natural resources, and a few others. There are a total of 6 funds in this group.

International Funds: The past year hasn’t been very good for international funds, but in the previous years (2000 and earlier), international investments performed well. American Century offers 5 funds in this group, investing in emerging markets, international growth, and others.

Services Offered by American Century:

American Century’s web site has several useful services, although it isn’t laid out in a very user- friendly way. You can find advice on financial planning topics like retirement, saving for education, making gifts to minors, giving to charity, and other specific financial topics.

Fund advisor is another handy tool. You answer some questions regarding your investment habits and your financial goals. American Century will then advise you on the proper allocation of your money, among the various American Century Funds, to reach your financial goals. There is also a wealth calculator and tracking system that will indicate whether or not you are on pace, to meet your goals. You can also access time value of money calculators, asset allocation calculators, and several more helpful investment tools. American Century even offers its own brokerage service, too, with competitive rates like $24.95 for a market order.

The education center includes a glossary of financial terms, to help you better understand the financial terminology that’s used in the site. There’s also an estate planning section; tax advice; retirement advice; and other basic tips for investing.

Investment Minimums:

To open up an account with American Century, you need to start with at least $2,500 for an individual or joint account, gift to a minor, or gift trust. If you want to open an IRA, then minimum is $1,000. For a 403b account, there is no minimum at all. Some specific funds carry higher minimum balances, to open the account. You need to consult the site, for more information.

Future investments require a minimum of $50. You can also setup an automatic monthly transfer, whereby American Century will draw money directly from your bank account each month, on the day of your choosing, with a minimum investment of $50.

Charges/Fees:

All American Century funds are no- load, so you won’t have to pay any up-front fees (there are no 12b-1 fees, either). However, American Century will charge you a small annual fee if your balance is below $10,000 (it’s about .5% of your total balance). American Century management just implemented this rule last year. They will not charge you directly by sending you a bill. Instead, they will redeem some of your shares, to cover the fee.

Final Thoughts:

American Century is the first mutual fund company that I ever invested my money in. Back in 1993, I started up a new account by purchasing shares of American Century Ultra (one of its riskiest funds). I didn’t have the $1,000 minimum needed to open an account (the minimum at that time was lower than it is now) at the time, but they said that I could start the automatic investor plan, and allow American Century to draw money from my bank account. I signed up for this, investing $50 per month. I have been doing this ever since.

Today, part of my 401K plan is invested in American Century. I have large holdings in American Century Growth Fund, and American Century Heritage. The past two years have not been very good to these funds, but they haven’t been good for any stock investments, so I don’t blame American Century. In fact, American Century funds have performed better during this time (and in most other time periods, too) than other mutual funds with comparable investment strategies.

I have always received good customer service from American Century, and that’s one of the primary reasons why I have continued to invest in this company, rather than moving my holdings elsewhere. The people that I have spoken with directly have always been helpful and friendly.

The only small complaint that I have with American Century is the new annual fee that it charges, if your account falls below $10,000. This doesn’t apply to my 401K holdings, but it does apply to my individual account holding, in American Century Ultra Fund. It’s not a very large amount, but it still annoys me.

With the web site, American Century does offer some helpful advice and some useful investment tools and calculators, but the layout of the site could use a little improvement. For a newcomer, you might get frustrated to the point where you have to just run a general search, to find your desired topic, because of the somewhat confusing navigation.

Overall, American Century is a solid family of mutual funds. All totaled, I have a pretty large chunk of change in American Century funds and I am confident that the management of this company will continue to overachieve, when it comes to overall performance of its funds.



Recommended: Yes