Strategy. The fund invests in corporate bonds and notes, government securities, collateralized loan obligations, collateralized mortgage obligations and securities backed by mortgages or other assets. The fund may invest in both investment-grade and high-yield, non-money market debt securities. Investment grade securities are those that have been rated in one of the top four credit quality categories by an independent rating agency or determined by the advisor to be of comparable credit quality. High-yield securities, which are also known as junk bonds, are those that have been rated by an independent rating agency below the highest four categories or determined by the advisor to be of similar quality. The debt securities in which the fund invests may be payable in U.S. or … Show more… The fund invests in corporate bonds and notes, government securities, collateralized loan obligations, collateralized mortgage obligations and securities backed by mortgages or other assets. The fund may invest in both investment-grade and high-yield, non-money market debt securities. Investment grade securities are those that have been rated in one of the top four credit quality categories by an independent rating agency or determined by the advisor to be of comparable credit quality. High-yield securities, which are also known as junk bonds, are those that have been rated by an independent rating agency below the highest four categories or determined by the advisor to be of similar quality. The debt securities in which the fund invests may be payable in U.S. or foreign currencies. The fund may also invest in certain equity securities such as preferred stock, convertible securities or equity equivalents provided that such investments are consistent with the funds investment objectives. Convertible securities in which the fund may invest include contingent convertible securities (sometimes referred to as CoCos or Additional Tier 1 Instruments). A CoCo is a fixed-income instrument that may be converted into or exchanged for a prescribed amount of common stock or other security of the same or a different issuer or cash within a particular period of time at a specified price or formula. The value of CoCos tends to decline as interest rates rise and, because of the conversion feature, tends to vary with fluctuations in the market value of the underlying securities. The fund may invest in securities issued or guaranteed by the U.S. Treasury and certain U.S. government agencies or instrumentalities such as the Government National Mortgage Association (Ginnie Mae). Ginnie Mae is supported by the full faith and credit of the U.S. government. Securities issued or guaranteed by other U.S. government agencies or instrumentalities, such as the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac), and the Federal Home Loan Bank (FHLB) are not guaranteed by the U.S. Treasury or supported by the full faith and credit of the U.S. government. However, they are authorized to borrow from the U.S. Treasury to meet their obligations. In addition to the securities listed above, the fund may also invest in bank loans. The fund may also utilize derivative instruments provided that such investments are in keeping with the funds investment objectives. Such derivative instruments may include options, futures contracts, options on futures contracts, and swaps (such as credit default swaps either on a single issuer or a securities index). The fund may use foreign currency exchange contracts to shift investment exposure from one currency into another for hedging purposes or to enhance returns. The weighted average duration of the funds portfolio must be three years or shorter. Duration is an indication of the relative sensitivity of a securitys market value to changes in interest rates. The longer the weighted average duration of the funds portfolio, the more sensitive its market value is to interest rate fluctuations. Duration is different from maturity in that it attempts to measure the interest rate sensitivity of a security, as opposed to its expected final maturity. For example, if the weighted average duration of the funds portfolio is two years, a 2% change in the value of the funds portfolio would be expected for every 1% change in interest rates. The portfolio managers select securities using an approach that integrates macroeconomic inputs, technical analysis of the relative value among various sectors, and fundamental research on individual securities. The macroeconomic framework provides interest rate and duration guidelines for the fund by analyzing economic activity, inflation, and monetary policy. Portfolio managers select individual securities using in-depth fundamental analysis designed to provide a detailed understanding of the credit worthiness of a security and its related market. As the market environment and investment opportunities change, portfolio managers buy and sell securities to meet the funds evolving sector allocations and credit quality standards. The portfolio managers may engage in hedging of portfolio positions, which usually involves entering into a derivative transaction that has the opposite characteristic of the position being hedged. The net effect of the two positions is intended to reduce or eliminate the exposure created by the first position. To gain exposure to certain segments of the fixed-income market, the fund may invest in other American Century funds (affiliated funds), unaffiliated funds, securities and other financial instruments. Show less