-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VSe88nMyiBGBwPJ9MKcqakIifYfKeioiJ7xQrZHVo24QFKOopQWgVcmsgLUvAyCV O8BTQBOTtSHObd0yrn+ung== 0000717316-99-000003.txt : 19990204 0000717316-99-000003.hdr.sgml : 19990204 ACCESSION NUMBER: 0000717316-99-000003 CONFORMED SUBMISSION TYPE: 497K2 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19990203 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN CENTURY CALIFORNIA TAX FREE & MUNICIPAL FUNDS CENTRAL INDEX KEY: 0000717316 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 946562826 STATE OF INCORPORATION: MA FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: 497K2 SEC ACT: SEC FILE NUMBER: 002-82734 FILM NUMBER: 99519884 BUSINESS ADDRESS: STREET 1: 1665 CHARLESTON RD CITY: MOUNTAIN VIEW STATE: CA ZIP: 94043 BUSINESS PHONE: 8003218321 MAIL ADDRESS: STREET 1: 1665 CHARLESTON RD CITY: MOUNTAIN VIEW STATE: CA ZIP: 94043 FORMER COMPANY: FORMER CONFORMED NAME: BENHAM CALIFORNIA TAX FREE TRUST / DATE OF NAME CHANGE: 19960815 FORMER COMPANY: FORMER CONFORMED NAME: BENHAM CALIFORNIA TAX FREE & MUNICIPAL FUNDS DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: BENHAM CALIFORNIA TAX FREE TRUST DATE OF NAME CHANGE: 19910218 497K2 1 PROFILES FUND PROFILE California Tax-Free Money Market INVESTOR CLASS January 31, 1999 [american century logo(reg.sm)] American Century - -------------------------------------------------------------------------------- This profile summarizes key information about the fund that is included in the fund's Prospectus. The fund's Prospectus has additional information about the fund, including a more detailed description of the risks associated with investing in the fund, that you may want to consider before you invest. You may obtain the Prospectus and other information about the fund at no cost by calling us at 1-800-345-2021, accessing our Web site or visiting one of our Investor Centers. See the back cover for additional telephone numbers and our address. BENHAM GROUP AMERICAN CENTURY INVESTMENTS CALIFORNIA TAX-FREE MONEY MARKET 1. WHAT IS THE FUND'S INVESTMENT OBJECTIVE? California Tax-Free Money Market seeks safety of principal and high current income that is exempt from federal and California income taxes. 2. WHAT IS THE FUND'S INVESTMENT STRATEGY? The fund managers buy high-quality, cash-equivalent securities with income payments exempt from federal and California income taxes. Cities, counties and other municipalities in California usually issue these securities for public projects. The fund managers also may buy some high-quality, cash-equivalent securities whose payments are exempt from federal and California income taxes, but not the federal alternative minimum tax. Cities, counties and other municipalities in California usually issue these securities (called private activity bonds) to fund for-profit private projects, such as hospitals and athletic stadiums. No more than 20% of the fund's total assets may be invested in these securities. Additional information about California Tax-Free Money Market's investments is available in its annual and semiannual reports. In these reports you will find a discussion of the market conditions and investment strategies that significantly affected the fund's performance during the most recent fiscal period. You may get these reports at no cost by calling us. 3. WHAT ARE THE SIGNIFICANT RISKS OF INVESTING IN THE FUND? *An investment in the fund is not a bank deposit, and it is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. *Because cash-equivalent securities are among the safest securities available, the interest they pay is among the lowest for income-paying securities. Accordingly, the yield on this fund will likely be lower than funds that invest in longer-term or lower-quality securities. *Some of the fund's income may be subject to the federal alternative minimum tax. *Because the fund invests primarily in California municipal securities, it will be sensitive to events that affect California's economy. California Tax-Free Money Market may have a higher level of risk than funds that invest in a larger universe of securities. FUND PERFORMANCE The following bar chart shows the actual performance of California Tax-Free Money Market's shares for each of the last 10 calendar years. The bar chart indicates the volatility of the fund's historical returns from year to year. Neither the bar chart nor the performance information below it is intended to indicate how the fund will perform in the future. [bar chart] CALENDAR YEAR-BY-YEAR RETURNS 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 California Tax-Free Money Market 5.71 5.16 3.81 2.49 2.03 2.42 3.41 3.07 3.19 2.95
CALIFORNIA TAX-FREE MONEY MARKET AMERICAN CENTURY INVESTMENTS The highest and lowest returns of the fund's shares for a calendar quarter during the period reflected by the preceding bar chart are provided in the following chart to indicate the fund's historical short-term volatility. [bar chart] HIGHEST AND LOWEST QUARTERLY RETURNS Quarter Ended 6/30/89 1.52% Quarter Ended 3/31/94 0.44% The following table shows the average annual returns of the fund's shares for the periods indicated. The Lipper California Tax-Exempt Money Market Average, an unmanaged index that reflects no operating costs, is included as a benchmark for performance comparisons. 1 YEAR 5 YEARS 10 YEARS LIFE OF FUND AVERAGE ANNUAL TOTAL RETURNS (PERIOD ENDED DECEMBER 31, 1998) California Tax-Free Money Market 2.95% 3.01% 3.42% 3.79% Lipper California Tax-Exempt Money Market Average 2.72% 2.89% 3.39% 3.91% For current performance information, including yields, please call us or access our Web site. 4. WHAT ARE THE FUND'S FEES AND EXPENSES? There are no sales loads, fees or other charges to buy fund shares directly from American Century, to reinvest dividends in additional shares, to exchange into the Investor Class shares of other American Century funds, or to redeem your shares. The following table describes the fees and expenses that you may pay if you buy and hold shares of the fund. ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS) Management Fee 0.50%(1) Distribution and Service (12b-1) Fees None Other Expenses(2) 0.00% Total Annual Fund Operating Expenses 0.50% (1)Based on expenses incurred during the fund's most recent fiscal year. The fund has a stepped fee schedule. As a result, the fund's management fee generally decreases as fund assets increase. (2)Other expenses, which include the fees and expenses of the fund's independent directors, their legal counsel, interest and extraordinary expenses, were less than 0.005% for the most recent fiscal year. EXAMPLE Assuming you . . . * invest $10,000 in the fund * redeem your shares at the end of the periods shown below * earn a 5% return each year * incur the same fund operating expenses shown above . . . your cost of investing in the fund would be: 1 year 3 years 5 years 10 years ------------------------------------------------ $51 $160 $279 $627 Of course, actual costs may be higher or lower. Use this example to compare the costs of investing in other funds. 5. WHO ARE THE FUND'S INVESTMENT ADVISOR AND PORTFOLIO MANAGER? American Century Investment Management, Inc. provides investment advisory and management services for the fund. American Century uses teams of portfolio managers, assistant portfolio managers and analysts working together to manage its mutual funds. The portfolio manager on the California Tax-Free Money Market team is identified below: TODD PARDULA, Portfolio Manager, has been a member of the California Tax-Free Money Market team since May 1994. He joined American Century in 1990. He has a bachelor's degree in finance from Santa Clara University and is a Chartered Financial Analyst. 6. HOW DO I BUY FUND SHARES? * Complete and return the enclosed application * Call us and exchange shares from another American Century fund * Call us and send your investment by bank wire transfer Your initial investment must be at least $2,500. If the value of your account falls below this account minimum, your shares may be redeemed involuntarily. FUND PROFILE CALIFORNIA TAX-FREE MONEY MARKET 7. HOW DO I SELL FUND SHARES? You may sell all or part of your fund shares on any business day by writing or calling us. You also may exchange your shares in California Tax-Free Money Market for shares in nearly 70 other mutual funds offered by American Century. Depending on the options you select when you open your account, some restrictions may apply. For your protection, some redemption requests require a signature guarantee. 8. HOW ARE FUND DISTRIBUTIONS MADE AND TAXED? Dividends are declared and available for redemption daily. Distributions will generally be exempt from federal and California income taxes. Some of the fund's income may, however, be subject to the federal alternative minimum tax. Consult your tax advisor for information about whether you are subject to the federal alternative minimum tax. Distributions are reinvested automatically in additional shares unless you choose another option. 9. WHAT SERVICES ARE AVAILABLE? American Century offers several ways to make it easier for you to manage your account, such as: * telephone transactions * wire and electronic funds transfers * 24-hour Automated Information Line transactions * 24-hour online Internet account access and transactions You will find more information about these choices in our Investor Services Guide, which you may request by calling us, accessing our Web site or visiting one of our Investor Centers. Information contained in our Investor Services Guide pertains to shareholders who invest directly with American Century rather than through an employer-sponsored retirement plan or through a financial intermediary. If you own or are considering purchasing fund shares through an employer-sponsored retirement plan or financial intermediary, your ability to purchase shares of the fund, exchange them for shares of other American Century funds, and redeem them will depend on the terms of your plan or financial intermediary. If you have questions about investing in an employer-sponsored retirement plan or through a financial intermediary, call a Service Representative at 1-800-345-3533. - -------------------------------------------------------------------------------- [american century logo(reg.sm)] American Century AMERICAN CENTURY INVESTMENTS P.O. BOX 419200 KANSAS CITY, MISSOURI 64141-6200 WWW.AMERICANcentury.coM INVESTOR SERVICES 1-800-345-2021 or 816-531-5575 AUTOMATED INFORMATION LINE 1-800-345-8765 CORPORATE; NOT-FOR-PROFIT; FOUNDATIONS; ENDOWMENTS; KEOGH; SEP-, SARSEP- AND SIMPLE-IRA; AND 403(B) SERVICES 1-800-345-3533 TELECOMMUNICATIONS DEVICE FOR THE DEAF 1-800-634-4113 or 816-444-3485 FAX 816-340-7962 Funds Distributor, Inc. SH-PRF-14145 9901 FUND PROFILE California Municipal Money Market INVESTOR CLASS January 31, 1999 [american century logo(reg.sm)] American Century - -------------------------------------------------------------------------------- This profile summarizes key information about the fund that is included in the fund's Prospectus. The fund's Prospectus has additional information about the fund, including a more detailed description of the risks associated with investing in the fund, that you may want to consider before you invest. You may obtain the Prospectus and other information about the fund at no cost by calling us at 1-800-345-2021, accessing our Web site or visiting one of our Investor Centers. See the back cover for additional telephone numbers and our address. BENHAM GROUP AMERICAN CENTURY INVESTMENTS CALIFORNIA MUNICIPAL MONEY MARKET 1. WHAT IS THE FUND'S INVESTMENT OBJECTIVE? California Municipal Money Market seeks safety of principal and high current income that is exempt from federal and California income taxes. 2. WHAT IS THE FUND'S INVESTMENT STRATEGY? The fund managers buy high-quality, cash-equivalent securities with income payments exempt from federal and California income taxes. Cities, counties and other municipalities in California usually issue these securities for public projects. The fund managers also may buy high-quality, cash- equivalent securities whose payments are exempt from federal and California income taxes, but not the federal alternative minimum tax. Cities, counties and other municipalities in California usually issue these securities (called private activity bonds) to fund for-profit private projects, such as hospitals and athletic stadiums. Additional information about California Municipal Money Market's investments is available in its annual and semiannual reports. In these reports you will find a discussion of the market conditions and investment strategies that significantly affected the fund's performance during the most recent fiscal period. You may get these reports at no cost by calling us. 3. WHAT ARE THE SIGNIFICANT RISKS OF INVESTING IN THE FUND? *An investment in the fund is not a bank deposit, and it is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. *Because cash-equivalent securities are among the safest securities available, the interest they pay is among the lowest for income-paying securities. Accordingly, the yield on this fund will likely be lower than funds that invest in longer-term or lower-quality securities. *Some or all of the fund's income may be subject to the federal alternative minimum tax. *Because the fund invests primarily in California municipal securities, it will be sensitive to events that affect California's economy. California Municipal Money Market may have a higher level of risk than funds that invest in a larger universe of securities. FUND PERFORMANCE The following bar chart shows the actual performance of California Municipal Money Market's shares for each calendar year since the fund's inception on December 31, 1990. The bar chart indicates the volatility of the fund's historical returns from year to year. Neither the bar chart nor the performance information below it is intended to indicate how the fund will perform in the future. [bar chart] CALENDAR YEAR-BY-YEAR RETURNS 1991 1992 1993 1994 1995 1996 1997 1998 California Municipal Money Market 4.61 2.95 2.09 2.47 3.49 3.10 3.23 3.05
California Municipal Money Market American Century Investments The highest and lowest returns of the fund's shares for a calendar quarter during the period reflected by the preceding bar chart are provided in the following chart to indicate the fund's historical short-term volatility. [bar chart] HIGHEST AND LOWEST QUARTERLY RETURNS Quarter Ended 9/30/91 1.18% Quarter Ended 3/31/94 0.47% The following table shows the average annual returns of the fund's shares for the periods indicated. The Lipper California Tax-Exempt Money Market Average, an unmanaged index that reflects no operating costs, is included as a benchmark for performance comparisons. 1 YEAR 5 YEARS LIFE OF FUND AVERAGE ANNUAL TOTAL RETURNS (PERIOD ENDED DECEMBER 31, 1998) California Municipal Money Market 3.05% 3.07% 3.12% Lipper California Tax-Exempt Money Market Average 2.72% 2.89% 2.89% For current performance information, including yields, please call us or access our Web site. 4. WHAT ARE THE FUND'S FEES AND EXPENSES? There are no sales loads, fees or other charges to buy fund shares directly from American Century, to reinvest dividends in additional shares, to exchange into the Investor Class shares of other American Century funds, or to redeem your shares. The following table describes the fees and expenses that you may pay if you buy and hold shares of the fund. ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS) Management Fee 0.50%(1) Distribution and Service (12b-1) Fees None Other Expenses(2) 0.00% Total Annual Fund Operating Expenses 0.50% (1)Based on expenses incurred during the fund's most recent fiscal year. The fund has a stepped fee schedule. As a result, the fund's management fee generally decreases as fund assets increase. (2)Other expenses, which include the fees and expenses of the fund's independent directors, their legal counsel, interest and extraordinary expenses, were less than 0.005% for the most recent fiscal year. EXAMPLE Assuming you . . . * invest $10,000 in the fund * redeem all of your shares at the end of the periods shown below * earn 5% return each year * incur the same operating expenses shown above . . . your cost of investing in the fund would be: 1 year 3 years 5 years 10 years ----------------------------------------------- $51 $160 $279 $627 Of course, actual costs may be higher or lower. Use this example to compare the costs of investing in other funds. 5. WHO ARE THE FUND'S INVESTMENT ADVISOR AND PORTFOLIO MANAGER? American Century Investment Management, Inc. provides investment advisory and management services for the fund. American Century uses teams of portfolio managers, assistant portfolio managers and analysts working together to manage its mutual funds. The portfolio manager on the California Municipal Money Market team is identified below: TODD PARDULA, Portfolio Manager, has been a member of the California Municipal Money Market team since May 1994. He joined American Century in 1990. He has a bachelor's degree in finance from Santa Clara University and is a Chartered Financial Analyst. 6. HOW DO I BUY FUND SHARES? * Complete and return the enclosed application * Call us and exchange shares from another American Century fund * Call us and send your investment by bank wire transfer Your initial investment must be at least $2,500. If the value of your account falls below this account minimum, your shares may be redeemed involuntarily. Fund Profile California Municipal Money Market 7. HOW DO I SELL FUND SHARES? You may sell all or part of your fund shares on any business day by writing or calling us. You also may exchange your shares in California Municipal Money Market for shares in nearly 70 other mutual funds offered by American Century. Depending on the options you select when you open your account, some restrictions may apply. For your protection, some redemption requests require a signature guarantee. 8. HOW ARE FUND DISTRIBUTIONS MADE AND TAXED? Dividends are declared and available for redemption daily. Distributions will generally be exempt from federal and California income taxes. Some or all of the fund's income may, however, be subject to the federal alternative minimum tax. Consult your tax advisor for information about whether you are subject to the federal alternative minimum tax. Distributions are reinvested automatically in additional shares unless you choose another option. 9. WHAT SERVICES ARE AVAILABLE? American Century offers several ways to make it easier for you to manage your account, such as: * telephone transactions * wire and electronic funds transfers * 24-hour Automated Information Line transactions * 24-hour online Internet account access and transactions You will find more information about these choices in our Investor Services Guide, which you may request by calling us, accessing our Web site or visiting one of our Investor Centers. Information contained in our Investor Services Guide pertains to shareholders who invest directly with American Century rather than through an employer-sponsored retirement plan or through a financial intermediary. If you own or are considering purchasing fund shares through an employer-sponsored retirement plan or financial intermediary, your ability to purchase shares of the fund, exchange them for shares of other American Century funds, and redeem them will depend on the terms of your plan or financial intermediary. If you have questions about investing in an employer-sponsored retirement plan or through a financial intermediary, call a Service Representative at 1-800-345-3533. - -------------------------------------------------------------------------------- [american century logo(reg.sm)] American Century AMERICAN CENTURY INVESTMENTS P.O. BOX 419200 KANSAS CITY, MISSOURI 64141-6200 WWW.AMERICANCENTURY.COM INVESTOR SERVICES 1-800-345-2021 or 816-531-5575 AUTOMATED INFORMATION LINE 1-800-345-8765 CORPORATE; NOT-FOR-PROFIT; FOUNDATIONS; ENDOWMENTS; KEOGH; SEP-, SARSEP- AND SIMPLE-IRA; AND 403(B) SERVICES 1-800-345-3533 TELECOMMUNICATIONS DEVICE FOR THE DEAF 1-800-634-4113 or 816-444-3485 FAX 816-340-7962 Funds Distributor, Inc. SH-PRF-14146 9901 FUND PROFILE California Limited-Term Tax-Free INVESTOR CLASS January 31, 1999 [american century logo(reg.sm)] American Century - -------------------------------------------------------------------------------- This profile summarizes key information about the fund that is included in the fund's Prospectus. The fund's Prospectus has additional information about the fund, including a more detailed description of the risks associated with investing in the fund, that you may want to consider before you invest. You may obtain the Prospectus and other information about the fund at no cost by calling us at 1-800-345-2021, accessing our Web site or visiting one of our Investor Centers. See the back cover for additional telephone numbers and our address. BENHAM GROUP AMERICAN CENTURY INVESTMENTS CALIFORNIA LIMITED-TERM TAX-FREE 1. WHAT IS THE FUND'S INVESTMENT OBJECTIVE? California Limited-Term Tax-Free seeks safety of principal and high current income that is exempt from federal and California income taxes. 2. WHAT IS THE FUND'S INVESTMENT STRATEGY? The fund managers buy quality, short-term debt securities with income payments exempt from federal and California income taxes. Cities, counties and other municipalities in California usually issue these securities for public projects. The fund managers also may buy some quality, short-term debt securities whose payments are exempt from federal and California income taxes, but not the federal alternative minimum tax. Cities, counties and other municipalities in California usually issue these securities (called private activity bonds) to fund for-profit private projects, such as hospitals and athletic stadiums. No more than 20% of the fund's total assets may be invested in these securities. The fund may also use futures contracts and options to pursue its investment objective. During unusual market conditions, the fund is permitted to keep a significant amount of its assets in cash or cash-equivalents. If it does, it may not achieve its investment objective and may generate taxable income. The weighted average maturity of the fund is expected to be five years or less. Additional information about California Limited-Term Tax-Free's investments is available in its annual and semiannual reports. In these reports you will find a discussion of the market conditions and investment strategies that significantly affected the fund's performance during the most recent fiscal period. You may get these reports at no cost by calling us. 3. WHAT ARE THE SIGNIFICANT RISKS OF INVESTING IN THE FUND? *When interest rates change, the fund's share value will be affected. Generally, when interest rates rise, the fund's share value will decline. The opposite is true when interest rates decline. The interest rate risk for California Limited-Term Tax-Free is higher than for funds that have shorter weighted average maturities, such as money market funds. *The fund may invest in securities rated in the lowest investment grade category (e.g., Baa or BBB). The issuers of these securities are more likely to have problems making interest and principal payments. *Some of the fund's income may be subject to the federal alternative minimum tax. *Because the fund invests primarily in California municipal securities, it will be sensitive to events that affect California's economy. California Limited-Term Tax-Free may have a higher level of risk than funds that invest in a larger universe of securities. *As with all funds, at any given time the value of your shares of California Limited-Term Tax-Free may be worth more or less than the price you paid. If you sell your shares when the value is less than the price you paid, you will lose money. *An investment in the fund is not a bank deposit, and it is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency. In summary, California Limited-Term Tax-Free is intended for investors who seek safety of principal and high current income that is exempt from federal and California income taxes through a municipal securities fund, and who are willing to accept the risks associated with the fund's investment strategy. California Limited-Term Tax-Free American Century Investments FUND PERFORMANCE The following bar chart shows the actual performance of California Limited-Term Tax-Free's shares for each calendar year since the fund's inception on June 1, 1992. The bar chart indicates the volatility of the fund's historical returns from year to year. Neither the bar chart nor the performance information below it is intended to indicate how the fund will perform in the future. [bar chart] CALENDAR YEAR-BY-YEAR RETURNS 1993 1994 1995 1996 1997 1998 California Limited-Term Tax-Free 5.92 -0.61 8.32 3.93 5.34 4.91 The highest and lowest returns of the fund's shares for a calendar quarter during the period reflected by the preceding bar chart are provided in the following chart to indicate the fund's historical short-term volatility. [bar chart] HIGHEST AND LOWEST QUARTERLY RETURNS Quarter Ended 3/31/95 2.99% Quarter Ended 3/31/94 -1.35% The following table shows the average annual returns of the fund's shares for the periods indicated. The Lehman 3-Year Municipal Bond Index, an unmanaged index that reflects no operating costs, is included as a benchmark for performance comparisons. 1 YEAR 5 YEARS LIFE OF FUND AVERAGE ANNUAL TOTAL RETURNS (PERIOD ENDED DECEMBER 31, 1998) California Limited-Term Tax-Free 4.91% 4.34% 4.83% Lehman 3-Year Municipal Bond Index 4.70% 4.80% 5.28% 4. WHAT ARE THE FUND'S FEES AND EXPENSES? There are no sales loads, fees or other charges to buy fund shares directly from American Century, to reinvest dividends in additional shares, to exchange into the Investor Class shares of other American Century funds, or to redeem your shares. The following table describes the fees and expenses that you may pay if you buy and hold shares of the fund. ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS) Management Fee 0.51%(1) Distribution and Service (12b-1) Fees None Other Expenses(2) 0.01% Total Annual Fund Operating Expenses 0.52% (1)Based on expenses incurred during the fund's most recent fiscal year. The fund has a stepped fee schedule. As a result, the fund's management fee generally decreases as fund assets increase. (2)Other expenses include the fees and expenses of the fund's independent trustees, their legal counsel, interest and extraordinary expenses. EXAMPLE Assuming you . . . * invest $10,000 in the fund * redeem all of your shares at the end of the periods shown below * earn 5% return each year * incur the same operating expenses shown above . . . your cost of investing in the fund would be: 1 year 3 years 5 years 10 years ------------------------------------------------ $53 $167 $290 $652 Of course, actual costs may be higher or lower. Use this example to compare the costs of investing in other funds. 5. WHO ARE THE FUND'S INVESTMENT ADVISOR AND PORTFOLIO MANAGER? American Century Investment Management, Inc. provides investment advisory and management services for the fund. American Century uses teams of portfolio managers, assistant portfolio managers and analysts working together to manage its mutual funds. The portfolio manager on the California Limited-Term Tax-Free team is identified as follows: Fund Profile California Limited-Term Tax-Free JOEL SILVA, Senior Portfolio Manager, has been a member of the California Limited-Term Tax-Free team since June 1993. He joined American Century in 1989. He has a bachelor's degree from California Polytechnic University and an MBA from California State University, Hayward. 6. HOW DO I BUY FUND SHARES? * Complete and return the enclosed application * Call us and exchange shares from another American Century fund * Call us and send your investment by bank wire transfer Your initial investment must be at least $5,000. If the value of your account falls below this account minimum, your shares may be redeemed involuntarily. 7. HOW DO I SELL FUND SHARES? You may sell all or part of your fund shares on any business day by writing or calling us. You also may exchange your shares in California Limited-Term Tax-Free for shares in nearly 70 other mutual funds offered by American Century. Depending on the options you select when you open your account, some restrictions may apply. For your protection, some redemption requests require a signature guarantee. 8. HOW ARE FUND DISTRIBUTIONS MADE AND TAXED? California Limited-Term Tax-Free pays distributions of substantially all of its income monthly. Distributions will generally be exempt from federal and California income taxes. Some of the fund's income may, however, be subject to the federal alternative minimum tax. Consult your tax advisor for information about whether you are subject to the federal alternative minimum tax. Distributions are reinvested automatically in additional shares unless you choose another option. 9. WHAT SERVICES ARE AVAILABLE? American Century offers several ways to make it easier for you to manage your account, such as: * telephone transactions * wire and electronic funds transfers * 24-hour Automated Information Line transactions * 24-hour online Internet account access and transactions You will find more information about these choices in our Investor Services Guide, which you may request by calling us, accessing our Web site or visiting one of our Investor Centers. Information contained in our Investor Services Guide pertains to shareholders who invest directly with American Century rather than through an employer-sponsored retirement plan or through a financial intermediary. If you own or are considering purchasing fund shares through an employer-sponsored retirement plan or financial intermediary, your ability to purchase shares of the fund, exchange them for shares of other American Century funds, and redeem them will depend on the terms of your plan or financial intermediary. If you have questions about investing in an employer-sponsored retirement plan or through a financial intermediary, call a Service Representative at 1-800-345-3533. - -------------------------------------------------------------------------------- [american century logo(reg.sm)] American Century AMERICAN CENTURY INVESTMENTS P.O. BOX 419200 KANSAS CITY, MISSOURI 64141-6200 WWW.AMERICANCENTURY.COM INVESTOR SERVICES 1-800-345-2021 or 816-531-5575 AUTOMATED INFORMATION LINE 1-800-345-8765 CORPORATE; NOT-FOR-PROFIT; FOUNDATIONS; ENDOWMENTS; KEOGH; SEP-, SARSEP- AND SIMPLE-IRA; AND 403(B) SERVICES 1-800-345-3533 TELECOMMUNICATIONS DEVICE FOR THE DEAF 1-800-634-4113 or 816-444-3485 FAX 816-340-7962 Funds Distributor, Inc. SH-PRF-14147 9901 FUND PROFILE California Intermediate-Term Tax-Free INVESTOR CLASS January 31, 1999 [american century logo(reg.sm)] American Century - -------------------------------------------------------------------------------- This profile summarizes key information about the fund that is included in the fund's Prospectus. The fund's Prospectus has additional information about the fund, including a more detailed description of the risks associated with investing in the fund, that you may want to consider before you invest. You may obtain the Prospectus and other information about the fund at no cost by calling us at 1-800-345-2021, accessing our Web site or visiting one of our Investor Centers. See the back cover for additional telephone numbers and our address. BENHAM GROUP AMERICAN CENTURY INVESTMENTS CALIFORNIA INTERMEDIATE-TERM TAX-FREE 1. WHAT IS THE FUND'S INVESTMENT OBJECTIVE? California Intermediate-Term Tax-Free seeks safety of principal and high current income that is exempt from federal and California income taxes. 2. WHAT IS THE FUND'S INVESTMENT STRATEGY? The fund managers buy quality, intermediate-term debt securities with income payments exempt from federal and California income taxes. Cities, counties and other municipalities in California usually issue these securities for public projects. The fund managers also may buy some quality, intermediate-term debt securities whose payments are exempt from federal and California income taxes, but not the federal alternative minimum tax. Cities, counties and other municipalities in California usually issue these securities (called private activity bonds) to fund for-profit private projects, such as hospitals and athletic stadiums. No more than 20% of the fund's total assets may be invested in these securities. The fund may also use futures contracts and options to pursue its investment objective. During unusual market conditions, the fund is permitted to keep a significant amount of its assets in cash or cash- equivalents. If it does, it may not achieve its investment objective and may generate taxable income. The weighted average maturity of the fund is expected to be between five and 10 years. Additional information about California Intermediate-Term Tax-Free's investments is available in its annual and semiannual reports. In these reports you will find a discussion of the market conditions and investment strategies that significantly affected the fund's performance during the most recent fiscal period. You may get these reports at no cost by calling us. 3. WHAT ARE THE SIGNIFICANT RISKS OF INVESTING IN THE FUND? *When interest rates change, the fund's share value will be affected. Generally, when interest rates rise, the fund's share value will decline. The opposite is true when interest rates decline. The interest rate risk for California Intermediate-Term Tax-Free is higher than for funds that have shorter weighted average maturities, such as money market and short-term bond funds. *The fund may invest in securities rated in the lowest investment grade category (e.g., Baa or BBB). The issuers of these securities are more likely to have problems making interest and principal payments. *Some of the fund's income may be subject to the federal alternative minimum tax. *Because the fund invests primarily in California municipal securities, it will be sensitive to events that affect California's economy. California Intermediate-Term Tax-Free may have a higher level of risk than funds that invest in a larger universe of securities. *As with all funds, at any given time the value of your shares of California Intermediate-Term Tax-Free may be worth more or less than the price you paid. If you sell your shares when the value is less than the price you paid, you will lose money. *An investment in the fund is not a bank deposit, and it is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency. In summary, California Intermediate-Term Tax-Free is intended for investors who seek safety of principal and high current income that is exempt from federal and California income taxes through a municipal securities fund, and who are willing to accept the risks associated with the fund's investment strategy. California Intermediate-Term Tax-Free American Century Investments FUND PERFORMANCE The following bar chart shows the actual performance of California Intermediate-Term Tax-Free's shares for each of the last 10 calendar years. The bar chart indicates the volatility of the fund's historical returns from year to year. Neither the bar chart nor the performance information below it is intended to indicate how the fund will perform in the future. [bar chart] CALENDAR YEAR-BY-YEAR RETURNS 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 California Intermediate-Term Tax-Free 7.94 6.99 10.38 7.09 10.69 -3.72 13.52 4.25 7.45 5.59
The highest and lowest returns of the fund's shares for a calendar quarter during the period reflected by the preceding bar chart are provided in the following chart to indicate the fund's historical short-term volatility. Shareholders should be aware, however, that California Intermediate-Term Tax-Free is intended for investors with a long-term investment horizon and is not managed for short-term results. [bar chart] HIGHEST AND LOWEST QUARTERLY RETURNS Quarter Ended 3/31/95 5.25% Quarter Ended 3/31/94 -3.98% The following table shows the average annual returns of the fund's shares for the periods indicated. The Lehman 5-Year General Obligation Bond Index, an unmanaged index that reflects no operating costs, is included as a benchmark for performance comparisons. 1 YEAR 5 YEARS 10 YEARS LIFE OF FUND AVERAGE ANNUAL TOTAL RETURNS (PERIOD ENDED DECEMBER 31, 1998) California Intermediate-Term Tax-Free 5.59% 5.27% 6.92% 6.91% Lehman 5-Year General Obligation Bond Index 5.84% 5.35% 6.98% 7.53% 4. WHAT ARE THE FUND'S FEES AND EXPENSES? There are no sales loads, fees or other charges to buy fund shares directly from American Century, to reinvest dividends in additional shares, to exchange into the Investor Class shares of other American Century funds, or to redeem your shares. The following table describes the fees and expenses that you may pay if you buy and hold shares of the fund. ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS) Management Fee 0.51%(1) Distribution and Service (12b-1) Fees None Other Expenses(2) 0.00% Total Annual Fund Operating Expenses 0.51% (1)Based on expenses incurred during the fund's most recent fiscal year. The fund has a stepped fee schedule. As a result, the fund's management fee generally decreases as fund assets increase. (2)Other expenses, which include the fees and expenses of the fund's independent directors, their legal counsel, interest and extraordinary expenses, were less than 0.005% for the most recent fiscal year. EXAMPLE Assuming you . . . * invest $10,000 in the fund * redeem all of your shares at the end of the periods shown below * earn 5% return each year * incur the same operating expenses shown above . . . your cost of investing in the fund would be: 1 year 3 years 5 years 10 years ---------------------------------------------- $52 $163 $285 $640 Of course, actual costs may be higher or lower. Use this example to compare the costs of investing in other funds. Fund Profile California Intermediate-Term Tax-Free 5. WHO ARE THE FUND'S INVESTMENT ADVISOR AND PORTFOLIO MANAGER? American Century Investment Management, Inc. provides investment advisory and management services for the fund. American Century uses teams of portfolio managers, assistant portfolio managers and analysts working together to manage its mutual funds. The portfolio manager on the California Intermediate-Term Tax-Free team is identified below: COLLEEN M. DENZLER, Senior Portfolio Manager, has been a member of the California Intermediate-Term Tax-Free team since January 1996. Prior to joining American Century, she was a Portfolio Manager with Calvert Group for 10 years, specializing in state tax-exempt portfolios. She has a bachelor's degree in finance from Radford University and is a Chartered Financial Analyst. 6. HOW DO I BUY FUND SHARES? * Complete and return the enclosed application * Call us and exchange shares from another American Century fund * Call us and send your investment by bank wire transfer Your initial investment must be at least $5,000. If the value of your account falls below this account minimum, your shares may be redeemed involuntarily. 7. HOW DO I SELL FUND SHARES? You may sell all or part of your fund shares on any business day by writing or calling us. You also may exchange your shares in California Intermediate-Term Tax-Free for shares in nearly 70 other mutual funds offered by American Century. Depending on the options you select when you open your account, some restrictions may apply. For your protection, some redemption requests require a signature guarantee. 8. HOW ARE FUND DISTRIBUTIONS MADE AND TAXED? California Intermediate-Term Tax-Free pays distributions of substantially all of its income monthly. Distributions will generally be exempt from federal and California income taxes. Some of the fund's income may, however, be subject to the federal alternative minimum tax. Consult your tax advisor for information about whether you are subject to the federal alternative minimum tax. Distributions are reinvested automatically in additional shares unless you choose another option. 9. WHAT SERVICES ARE AVAILABLE? American Century offers several ways to make it easier for you to manage your account, such as: * telephone transactions * wire and electronic funds transfers * 24-hour Automated Information Line transactions * 24-hour online Internet account access and transactions You will find more information about these choices in our Investor Services Guide, which you may request by calling us, accessing our Web site or visiting one of our Investor Centers. Information contained in our Investor Services Guide pertains to shareholders who invest directly with American Century rather than through an employer-sponsored retirement plan or through a financial intermediary. If you own or are considering purchasing fund shares through an employer-sponsored retirement plan or financial intermediary, your ability to purchase shares of the fund, exchange them for shares of other American Century funds, and redeem them will depend on the terms of your plan or financial intermediary. If you have questions about investing in an employer-sponsored retirement plan or through a financial intermediary, call a Service Representative at 1-800-345-3533. - -------------------------------------------------------------------------------- [american century logo(reg.sm)] American Century AMERICAN CENTURY INVESTMENTS P.O. BOX 419200 KANSAS CITY, MISSOURI 64141-6200 WWW.AMERICANCENTURY.COM INVESTOR SERVICES 1-800-345-2021 or 816-531-5575 AUTOMATED INFORMATION LINE 1-800-345-8765 CORPORATE; NOT-FOR-PROFIT; FOUNDATIONS; ENDOWMENTS; KEOGH; SEP-, SARSEP- AND SIMPLE-IRA; AND 403(B) SERVICES 1-800-345-3533 TELECOMMUNICATIONS DEVICE FOR THE DEAF 1-800-634-4113 or 816-444-3485 FAX 816-340-7962 Funds Distributor, Inc. SH-PRF-14152 9901 FUND PROFILE California Long-Term Tax-Free INVESTOR CLASS January 31, 1999 [american century logo(reg.sm)] American Century - -------------------------------------------------------------------------------- This profile summarizes key information about the fund that is included in the fund's Prospectus. The fund's Prospectus has additional information about the fund, including a more detailed description of the risks associated with investing in the fund, that you may want to consider before you invest. You may obtain the Prospectus and other information about the fund at no cost by calling us at 1-800-345-2021, accessing our Web site or visiting one of our Investor Centers. See the back cover for additional telephone numbers and our address. BENHAM GROUP AMERICAN CENTURY INVESTMENTS CALIFORNIA LONG-TERM TAX-FREE 1. WHAT IS THE FUND'S INVESTMENT OBJECTIVE? California Long-Term Tax-Free seeks safety of principal and high current income that is exempt from federal and California income taxes. 2. WHAT IS THE FUND'S INVESTMENT STRATEGY? The fund managers buy quality, long-term debt securities with income payments exempt from federal and California income taxes. Cities, counties and other municipalities in California usually issue these securities for public projects. The fund managers also may buy some quality, long-term debt securities whose payments are exempt from federal and California income taxes, but not the federal alternative minimum tax. Cities, counties and other municipalities in California usually issue these securities (called private activity bonds) to fund for-profit private projects, such as hospitals and athletic stadiums. No more than 20% of the fund's total assets may be invested in these securities. The fund may also use futures contracts and options to pursue its investment objective. During unusual market conditions, the fund is permitted to keep a significant amount of its assets in cash or cash- equivalents. If it does, it may not achieve its investment objective and may generate taxable income. The weighted average maturity of the fund is expected to be 10 years or longer. Additional information about California Long-Term Tax-Free's investments is available in its annual and semiannual reports. In these reports you will find a discussion of the market conditions and investment strategies that significantly affected the fund's performance during the most recent fiscal period. You may get these reports at no cost by calling us. 3. WHAT ARE THE SIGNIFICANT RISKS OF INVESTING IN THE FUND? *When interest rates change, the fund's share value will be affected. Generally, when interest rates rise, the fund's share value will decline. The opposite is true when interest rates decline. The interest rate risk for California Long-Term Tax-Free is higher than for funds that have shorter weighted average maturities, such as money market and short-term and intermediate-term bond funds. *The fund may invest in securities rated in the lowest investment grade category (e.g., Baa or BBB). The issuers of these securities are more likely to have problems making interest and principal payments. *Some of the fund's income may be subject to the federal alternative minimum tax. *Because the fund invests primarily in California municipal securities, it will be sensitive to events that affect California's economy. California Long-Term Tax-Free may have a higher level of risk than funds that invest in a larger universe of securities. *As with all funds, at any given time the value of your shares of California Long-Term Tax-Free may be worth more or less than the price you paid. If you sell your shares when the value is less than the price you paid, you will lose money. *An investment in the fund is not a bank deposit, and it is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency. In summary, California Long-Term Tax-Free is intended for investors who seek safety of principal and high current income that is exempt from federal and California income taxes through a municipal securities fund, and who are willing to accept the risks associated with the fund's investment strategy. California Long-Term Tax-Free American Century Investments FUND PERFORMANCE The following bar chart shows the actual performance of California Long-Term Tax-Free's shares for each of the last 10 calendar years. The bar chart indicates the volatility of the fund's historical returns from year to year. Neither the bar chart nor the performance information below it is intended to indicate how the fund will perform in the future. [bar chart] CALENDAR YEAR-BY-YEAR RETURNS 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 California Long-Term Tax-Free 9.76 6.60 11.80 8.15 13.74 -6.51 19.80 3.59 9.74 6.31
The highest and lowest returns of the fund's shares for a calendar quarter during the period reflected by the preceding bar chart are provided in the following chart to indicate the fund's historical short-term volatility. Shareholders should be aware, however, that California Long-Term Tax-Free is intended for investors with a long-term investment horizon and is not managed for short-term results. [bar chart] HIGHEST AND LOWEST QUARTERLY RETURNS Quarter Ended 3/31/95 7.13% Quarter Ended 3/31/94 -5.71% The following table shows the average annual returns of the fund's shares for the periods indicated. The Lehman Long-Term Municipal Bond Index, an unmanaged index that reflects no operating costs, is included as a benchmark for performance comparisons. 1 YEAR 5 YEARS 10 YEARS LIFE OF FUND AVERAGE ANNUAL TOTAL RETURNS (PERIOD ENDED DECEMBER 31, 1998) California Long-Term Tax-Free 6.31% 6.24% 8.05% 8.44% Lehman Long-Term Municipal Bond Index 6.89% 6.84% 9.15% 10.51% 4. WHAT ARE THE FUND'S FEES AND EXPENSES? There are no sales loads, fees or other charges to buy fund shares directly from American Century, to reinvest dividends in additional shares, to exchange into the Investor Class shares of other American Century funds, or to redeem your shares. The following table describes the fees and expenses that you may pay if you buy and hold shares of the fund. ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS) Management Fee 0.51%(1) Distribution and Service (12b-1) Fees None Other Expenses(2) 0.00% Total Annual Fund Operating Expenses 0.51% (1)Based on expenses incurred during the fund's most recent fiscal year. The fund has a stepped fee schedule. As a result, the fund's management fee generally decreases as fund assets increase. (2)Other expenses, which include the fees and expenses of the fund's independent directors, their legal counsel, interest and extraordinary expenses, were less than 0.005% for the most recent fiscal year. EXAMPLE Assuming you . . . * invest $10,000 in the fund * redeem all of your shares at the end of the periods shown below * earn 5% return each year * incur the same operating expenses shown above . . . your cost of investing in the fund would be: 1 year 3 years 5 years 10 years ------------------------------------------- $52 $163 $285 $640 Of course, actual costs may be higher or lower. Use this example to compare the costs of investing in other funds. Fund Profile California Long-Term Tax-Free 5. WHO ARE THE FUND'S INVESTMENT ADVISOR AND PORTFOLIO MANAGER? American Century Investment Management, Inc. provides investment advisory and management services for the fund. American Century uses teams of portfolio managers, assistant portfolio managers and analysts working together to manage its mutual funds. The portfolio manager on the California Long-Term Tax-Free team is identified below: G. DAVID MACEWEN, Vice President and Senior Portfolio Manager, supervises the American Century California Tax-Free and Municipal Funds team and has been a member of the California Long-Term Tax-Free team since May 1991. He joined American Century in 1991. He has a bachelor's degree in economics from Boston University and an MBA in finance from the University of Delaware. 6. HOW DO I BUY FUND SHARES? * Complete and return the enclosed application * Call us and exchange shares from another American Century fund * Call us and send your investment by bank wire transfer Your initial investment must be at least $5,000. If the value of your account falls below this account minimum, your shares may be redeemed involuntarily. 7. HOW DO I SELL FUND SHARES? You may sell all or part of your fund shares on any business day by writing or calling us. You also may exchange your shares in California Long-Term Tax-Free for shares in nearly 70 other mutual funds offered by American Century. Depending on the options you select when you open your account, some restrictions may apply. For your protection, some redemption requests require a signature guarantee. 8. HOW ARE FUND DISTRIBUTIONS MADE AND TAXED? California Long-Term Tax-Free pays distributions of substantially all of its income monthly. Distributions will generally be exempt from federal and California income taxes. Some of the fund's income may, however, be subject to the federal alternative minimum tax. Consult your tax advisor for information about whether you are subject to the federal alternative minimum tax. Distributions are reinvested automatically in additional shares unless you choose another option. 9. WHAT SERVICES ARE AVAILABLE? American Century offers several ways to make it easier for you to manage your account, such as: * telephone transactions * wire and electronic funds transfers * 24-hour Automated Information Line transactions * 24-hour online Internet account access and transactions You will find more information about these choices in our Investor Services Guide, which you may request by calling us, accessing our Web site or visiting one of our Investor Centers. Information contained in our Investor Services Guide pertains to shareholders who invest directly with American Century rather than through an employer-sponsored retirement plan or through a financial intermediary. If you own or are considering purchasing fund shares through an employer-sponsored retirement plan or financial intermediary, your ability to purchase shares of the fund, exchange them for shares of other American Century funds, and redeem them will depend on the terms of your plan or financial intermediary. If you have questions about investing in an employer-sponsored retirement plan or through a financial intermediary, call a Service Representative at 1-800-345-3533. - -------------------------------------------------------------------------------- [american century logo(reg.sm)] American Century AMERICAN CENTURY INVESTMENTS P.O. BOX 419200 KANSAS CITY, MISSOURI 64141-6200 WWW.AMERICANCENTURY.COM INVESTOR SERVICES 1-800-345-2021 or 816-531-5575 AUTOMATED INFORMATION LINE 1-800-345-8765 CORPORATE; NOT-FOR-PROFIT; FOUNDATIONS; ENDOWMENTS; KEOGH; SEP-, SARSEP- AND SIMPLE-IRA; AND 403(B) SERVICES 1-800-345-3533 TELECOMMUNICATIONS DEVICE FOR THE DEAF 1-800-634-4113 or 816-444-3485 FAX 816-340-7962 Funds Distributor, Inc. SH-PRF-14148 9901 FUND PROFILE California High-Yield Municipal INVESTOR CLASS January 31, 1999 [american century logo(reg.sm)] American Century - -------------------------------------------------------------------------------- This profile summarizes key information about the fund that is included in the fund's Prospectus. The fund's Prospectus has additional information about the fund, including a more detailed description of the risks associated with investing in the fund, that you may want to consider before you invest. You may obtain the Prospectus and other information about the fund at no cost by calling us at 1-800-345-2021, accessing our Web site or visiting one of our Investor Centers. See the back cover for additional telephone numbers and our address. BENHAM GROUP AMERICAN CENTURY INVESTMENTS CALIFORNIA HIGH-YIELD MUNICIPAL 1. WHAT IS THE FUND'S INVESTMENT OBJECTIVE? California High-Yield Municipal seeks high current income that is exempt from federal and California income taxes. 2. WHAT IS THE FUND'S INVESTMENT STRATEGY? The fund managers buy long- and intermediate-term debt securities with income payments exempt from federal and California income taxes. Cities, counties and other municipalities in California usually issue these securities for public projects. The fund managers also may buy long- and intermediate-term debt securities whose payments are exempt from federal and California income taxes, but not the federal alternative minimum tax. Cities, counties and other municipalities in California usually issue these securities (called private activity bonds) to fund for-profit private projects, such as hospitals and athletic stadiums. Between 10% and 30% of the fund's total assets may be invested in these securities. The fund buys securities that are considered below investment-grade, including so-called "junk bonds." Issuers of these securities often have short financial histories or have questionable credit. The fund also may use futures contracts and options to pursue its investment objective. During unusual market conditions, the fund is permitted to keep a significant amount of its assets in cash or cash- equivalents. If it does, it may not achieve its investment objective and may generate taxable income. The weighted average maturity of the fund is expected to be 10 years or longer. Additional information about California High-Yield Municipal's investments is available in its annual and semi-annual reports. In these reports you will find a discussion of the market conditions and investment strategies that significantly affected the fund's performance during the most recent fiscal period. You may get these reports at no cost by calling us. 3. WHAT ARE THE SIGNIFICANT RISKS OF INVESTING IN THE FUND? *When interest rates change, the fund's share value will be affected. Generally, when interest rates rise, the fund's share value will decline. The opposite is true when interest rates decline. The interest rate risk for California High-Yield Municipal is higher than for funds that have shorter weighted average maturities, such as money market and short-term and intermediate-term bond funds. *The fund may invest in securities rated below investment grade, including bonds that are in technical or monetary default. By definition, the issuers of many of these securities have had, and may continue to have, problems making interest and principal payments. *The fund's investments often have high credit risk. The fund's share value may fluctuate significantly more than other bond funds because the fund invests in lower-rated debt securities. *Some or all of the fund's income may be subject to the federal alternative minimum tax. *Because the fund invests primarily in California municipal securities, it will be sensitive to events that affect California's economy. California High-Yield Municipal may have a higher level of risk than funds that invest in a larger universe of securities. *As with all funds, at any given time the value of your shares of California High-Yield Municipal may be worth more or less than the price you paid. If you sell your shares when the value is less than the price you paid, you will lose money. *An investment in the fund is not a bank deposit, and it is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency. In summary, California High-Yield Municipal is intended for investors who seek high current income that is exempt from federal and California income taxes through a municipal securities fund, and who are willing to accept the risks associated with the fund's investment strategy. California High-Yield Municipal American Century Investments FUND PERFORMANCE The following bar chart shows the actual performance of California High-Yield Municipal's shares for each of the last 10 calendar years. The bar chart indicates the volatility of the fund's historical returns from year to year. Neither the bar chart nor the performance information below it is intended to indicate how the fund will perform in the future. [bar chart] CALENDAR YEAR-BY-YEAR RETURNS 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 California High-Yield Municipal 9.68 5.65 10.91 9.17 13.18 -5.36 18.29 5.89 10.50 6.73
The highest and lowest returns of the fund's shares for a calendar quarter during the period reflected by the preceding bar chart are provided in the following chart to indicate the fund's historical short-term volatility. Shareholders should be aware, however, that California High-Yield Municipal is intended for investors with a long-term investment horizon and is not managed for short-term results. [bar chart] HIGHEST AND LOWEST QUARTERLY RETURNS Quarter Ended 3/31/95 7.18% Quarter Ended 3/31/94 -4.54% The following table shows the average annual returns of the fund's shares for the periods indicated. The Lehman Long-Term Municipal Bond Index, an unmanaged index that reflects no operating costs, is included as a benchmark for performance comparisons. 1 YEAR 5 YEARS 10 YEARS LIFE OF FUND AVERAGE ANNUAL TOTAL RETURNS (PERIOD ENDED DECEMBER 31, 1998) California High-Yield Municipal 6.73% 6.93% 8.30% 6.87% Lehman Long-Term Municipal Bond Index 6.89% 6.84% 9.15% 8.71% 4. WHAT ARE THE FUND'S FEES AND EXPENSES? There are no sales loads, fees or other charges to buy fund shares directly from American Century, to reinvest dividends in additional shares, to exchange into the Investor Class shares of other American Century funds, or to redeem your shares. The following table describes the fees and expenses that you may pay if you buy and hold shares of the fund. ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS) Management Fee 0.54%(1) Distribution and Service (12b-1) Fees None Other Expenses(2) 0.00% Total Annual Fund Operating Expenses 0.54% (1)Based on expenses incurred during the fund's most recent fiscal year. The fund has a stepped fee schedule. As a result, the fund's management fee generally decreases as fund assets increase. (2)Other expenses, which include the fees and expenses of the fund's independent directors, their legal counsel, interest and extraordinary expenses, were less than 0.005% for the most recent fiscal year. EXAMPLE Assuming you . . . * invest $10,000 in the fund * redeem all of your shares at the end of the periods shown below * earn 5% return each year * incur the same operating expenses shown above . . . your cost of investing in the fund would be: 1 year 3 years 5 years 10 years ---------------------------------------------- $55 $173 $301 $676 Of course, actual costs may be higher or lower. Use this example to compare the costs of investing in other funds. Fund Profile California High-Yield Municipal 5. WHO ARE THE FUND'S INVESTMENT ADVISOR AND PORTFOLIO MANAGER? American Century Investment Management, Inc. provides investment advisory and management services for the fund. American Century uses teams of portfolio managers, assistant portfolio managers and analysts working together to manage its mutual funds. The portfolio manager on the California High-Yield Municipal team is identified as follows: STEVEN M. PERMUT, Senior Portfolio Manager and Director of Municipal Research, has been a member of the California High-Yield Municipal team since December 1987. Mr. Permut joined American Century in 1987. He has a bachelor's degree in business from State University of New York, Oneonta and an MBA in Finance from Golden Gate University, San Francisco. 6. HOW DO I BUY FUND SHARES? * Complete and return the enclosed application * Call us and exchange shares from another American Century fund * Call us and send your investment by bank wire transfer Your initial investment must be at least $5,000. If the value of your account falls below this account minimum, your shares may be redeemed involuntarily. 7. HOW DO I SELL FUND SHARES? You may sell all or part of your fund shares on any business day by writing or calling us. You also may exchange your shares in California High-Yield Municipal for shares in nearly 70 other mutual funds offered by American Century. Depending on the options you select when you open your account, some restrictions may apply. For your protection, some redemption requests require a signature guarantee. 8. HOW ARE FUND DISTRIBUTIONS MADE AND TAXED? California High-Yield Municipal pays distributions of substantially all of its income monthly. Distributions will generally be exempt from federal and California income taxes. Some or all of the fund's income may, however, be subject to the federal alternative minimum tax. Consult your tax advisor for information about whether you are subject to the federal alternative minimum tax. Distributions are reinvested automatically in additional shares unless you choose another option. 9. WHAT SERVICES ARE AVAILABLE? American Century offers several ways to make it easier for you to manage your account, such as: * telephone transactions * wire and electronic funds transfers * 24-hour Automated Information Line transactions * 24-hour online Internet account access and transactions You will find more information about these choices in our Investor Services Guide, which you may request by calling us, accessing our Web site or visiting one of our Investor Centers. Information contained in our Investor Services Guide pertains to shareholders who invest directly with American Century rather than through an employer-sponsored retirement plan or through a financial intermediary. If you own or are considering purchasing fund shares through an employer-sponsored retirement plan or financial intermediary, your ability to purchase shares of the fund, exchange them for shares of other American Century funds, and redeem them will depend on the terms of your plan or financial intermediary. If you have questions about investing in an employer-sponsored retirement plan or through a financial intermediary, call a Service Representative at 1-800-345-3533. - -------------------------------------------------------------------------------- [american century logo(reg.sm)] American Century AMERICAN CENTURY INVESTMENTS P.O. BOX 419200 KANSAS CITY, MISSOURI 64141-6200 WWW.AMERICANCENTURY.COM INVESTOR SERVICES 1-800-345-2021 or 816-531-5575 AUTOMATED INFORMATION LINE 1-800-345-8765 CORPORATE; NOT-FOR-PROFIT; FOUNDATIONS; ENDOWMENTS; KEOGH; SEP-, SARSEP- AND SIMPLE-IRA; AND 403(B) SERVICES 1-800-345-3533 TELECOMMUNICATIONS DEVICE FOR THE DEAF 1-800-634-4113 or 816-444-3485 FAX 816-340-7962 Funds Distributor, Inc. SH-PRF-14149 9901 FUND PROFILE California Insured Tax-Free INVESTOR CLASS January 31, 1999 [american century logo(reg.sm)] American Century - -------------------------------------------------------------------------------- This profile summarizes key information about the fund that is included in the fund's Prospectus. The fund's Prospectus has additional information about the fund, including a more detailed description of the risks associated with investing in the fund, that you may want to consider before you invest. You may obtain the Prospectus and other information about the fund at no cost by calling us at 1-800-345-2021, accessing our Web site or visiting one of our Investor Centers. See the back cover for additional telephone numbers and our address. BENHAM GROUP AMERICAN CENTURY INVESTMENTS CALIFORNIA INSURED TAX-FREE 1. WHAT IS THE FUND'S INVESTMENT OBJECTIVE? California Insured Tax-Free seeks safety of principal and high current income that is exempt from federal and California income taxes through investment in insured California municipal securities. 2. WHAT IS THE FUND'S INVESTMENT STRATEGY? The fund managers buy quality, long-term insured debt securities with income payments exempt from federal and California income taxes. Cities, counties and other municipalities in California usually issue these securities for public projects. The fund managers also may buy some quality, long-term insured debt securities whose payments are exempt from federal and California income taxes, but not the federal alternative minimum tax. Cities, counties and other municipalities in California usually issue these securities (called private activity bonds) to fund for-profit private projects, such as hospitals and athletic stadiums. No more than 20% of the fund's total assets may be invested in these securities. The fund's investments are insured. This is significant because *the credit risk is less than for funds that invest in long-term debt securities without insurance *potential income is lower than for funds that invest in long-term debt securities without insurance A debt security's insurance cannot be cancelled and guarantees that interest and other payments will be made as scheduled. The weighted average maturity of the fund is expected to be 10 years or longer. The fund also may use futures contracts and options to pursue its investment objective. During unusual market conditions, the fund is permitted to keep a significant amount of its assets in cash or cash- equivalents. If it does, it may not achieve its investment objective and may generate taxable income. Additional information about California Insured Tax-Free's investments is available in its annual and semiannual reports. In these reports you will find a discussion of the market conditions and investment strategies that significantly affected the fund's performance during the most recent fiscal period. You may get these reports at no cost by calling us. 3. WHAT ARE THE SIGNIFICANT RISKS OF INVESTING IN THE FUND? *When interest rates change, the fund's share value will be affected. Generally, when interest rates rise, the fund's share value will decline. The opposite is true when interest rates decline. The interest rate risk for California Insured Tax-Free is higher than for funds that have shorter weighted average maturities, such as money market and short-term and intermediate-term bond funds. *Some of the fund's income may be subject to the federal alternative minimum tax. *Because the fund invests primarily in California municipal securities, it will be sensitive to events that affect California's economy. California Insured Tax-Free may have a higher level of risk than funds that invest in a larger universe of securities. *As with all funds, at any given time the value of your shares of California Insured Tax-Free may be worth more or less than the price you paid. If you sell your shares when the value is less than the price you paid, you will lose money. *An investment in the fund is not a bank deposit, and it is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency. In summary, California Insured Tax-Free is intended for investors who seek safety of principal and high current income that is exempt from federal and California income taxes through a municipal securities fund, and who are willing to accept the risks associated with the fund's investment strategy. California Insured Tax-Free American Century Investments FUND PERFORMANCE The following bar chart shows the actual performance of California Insured Tax-Free's shares for each of the last 10 calendar years. The bar chart indicates the volatility of the fund's historical returns from year to year. Neither the bar chart nor the performance information below it is intended to indicate how the fund will perform in the future. [bar chart] CALENDAR YEAR-BY-YEAR RETURNS 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 California Insured Tax-Free 10.31 6.76 11.27 9.19 13.45 -6.55 19.03 3.70 9.34 6.09
The highest and lowest returns of the fund's shares for a calendar quarter during the period reflected by the preceding bar chart are provided in the following chart to indicate the fund's historical short-term volatility. Shareholders should be aware, however, that California Insured Tax-Free is intended for investors with a long-term investment horizon and is not managed for short-term results. [bar chart] HIGHEST AND LOWEST QUARTERLY RETURNS Quarter Ended 3/31/95 7.00% Quarter Ended 3/31/94 -6.68% The following table shows the average annual returns of the fund's shares for the periods indicated. The Lehman Long-Term Municipal Bond Index, an unmanaged index that reflects no operating costs, is included as a benchmark for performance comparisons. 1 YEAR 5 YEARS 10 YEARS LIFE OF FUND AVERAGE ANNUAL TOTAL RETURNS (PERIOD ENDED DECEMBER 31, 1998) California Insured Tax-Free 6.09% 6.00% 8.05% 6.98% Lehman Long-Term Municipal Bond Index 6.89% 6.84% 9.15% 8.71% 4. WHAT ARE THE FUND'S FEES AND EXPENSES? There are no sales loads, fees or other charges to buy fund shares directly from American Century, to reinvest dividends in additional shares, to exchange into the Investor Class shares of other American Century funds, or to redeem your shares. The following table describes the fees and expenses that you may pay if you buy and hold shares of the fund. ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS) Management Fee 0.51%(1) Distribution and Service (12b-1) Fees None Other Expenses(2) 0.00% Total Annual Fund Operating Expenses 0.51% (1)Based on expenses incurred during the fund's most recent fiscal year. The fund has a stepped fee schedule. As a result, the fund's management fee generally decreases as fund assets increase. (2)Other expenses, which include the fees and expenses of the fund's independent directors, their legal counsel, interest and extraordinary expenses, were less than 0.005% for the most recent fiscal year. EXAMPLE Assuming you . . . * invest $10,000 in the fund * redeem all of your shares at the end of the periods shown below * earn 5% return each year * incur the same operating expenses shown above . . . your cost of investing in the fund would be: 1 year 3 years 5 years 10 years ------------------------------------------- $52 $163 $285 $640 Of course, actual costs may be higher or lower. Use this example to compare the costs of investing in other funds. Fund Profile California Insured Tax-Free 5. WHO ARE THE FUND'S INVESTMENT ADVISOR AND PORTFOLIO MANAGER? American Century Investment Management, Inc. provides investment advisory and management services for the fund. American Century uses teams of portfolio managers, assistant portfolio managers and analysts working together to manage its mutual funds. The portfolio manager on the California Insured Tax-Free team is identified below: G. DAVID MACEWEN, Vice President and Senior Portfolio Manager, supervises the American Century California Tax-Free and Municipal Funds team, and has been a member of the California Insured Tax-Free team since May 1991. He joined American Century in 1991. He has a bachelor's degree in economics from Boston University and an MBA in finance from the University of Delaware. 6. HOW DO I BUY FUND SHARES? * Complete and return the enclosed application * Call us and exchange shares from another American Century fund * Call us and send your investment by bank wire transfer Your initial investment must be at least $5,000. If the value of your account falls below this account minimum, your shares may be redeemed involuntarily. 7. HOW DO I SELL FUND SHARES? You may sell all or part of your fund shares on any business day by writing or calling us. You also may exchange your shares in California Insured Tax-Free for shares in nearly 70 other mutual funds offered by American Century. Depending on the options you select when you open your account, some restrictions may apply. For your protection, some redemption requests require a signature guarantee. 8. HOW ARE FUND DISTRIBUTIONS MADE AND TAXED? California Insured Tax-Free pays distributions of substantially all of its income monthly. Distributions will generally be exempt from federal and California income taxes. Some of the fund's income may, however, be subject to the federal alternative minimum tax. Consult your tax advisor for information about whether you are subject to the federal alternative minimum tax. Distributions are reinvested automatically in additional shares unless you choose another option. 9. WHAT SERVICES ARE AVAILABLE? American Century offers several ways to make it easier for you to manage your account, such as: * telephone transactions * wire and electronic funds transfers * 24-hour Automated Information Line transactions * 24-hour online Internet account access and transactions You will find more information about these choices in our Investor Services Guide, which you may request by calling us, accessing our Web site or visiting one of our Investor Centers. Information contained in our Investor Services Guide pertains to shareholders who invest directly with American Century rather than through an employer-sponsored retirement plan or through a financial intermediary. If you own or are considering purchasing fund shares through an employer-sponsored retirement plan or financial intermediary, your ability to purchase shares of the fund, exchange them for shares of other American Century funds, and redeem them will depend on the terms of your plan or financial intermediary. If you have questions about investing in an employer-sponsored retirement plan or through a financial intermediary, call a Service Representative at 1-800-345-3533. - -------------------------------------------------------------------------------- [american century logo(reg.sm)] American Century AMERICAN CENTURY INVESTMENTS P.O. BOX 419200 KANSAS CITY, MISSOURI 64141-6200 WWW.AMERICANCENTURY.COM INVESTOR SERVICES 1-800-345-2021 or 816-531-5575 AUTOMATED INFORMATION LINE 1-800-345-8765 CORPORATE; NOT-FOR-PROFIT; FOUNDATIONS; ENDOWMENTS; KEOGH; SEP-, SARSEP- AND SIMPLE-IRA; AND 403(B) SERVICES 1-800-345-3533 TELECOMMUNICATIONS DEVICE FOR THE DEAF 1-800-634-4113 or 816-444-3485 FAX 816-340-7962 Funds Distributor, Inc. SH-PRF-14150 9901 -----END PRIVACY-ENHANCED MESSAGE-----