Zero coupon investments

One of the biggest risks of zero coupon bonds is their sensitivity to swings in interest rates. In a rising interest rate environment, their value is likely to fall more than other bonds. For individuals, zero coupon bonds may serve several investment purposes. By placing funds in a U. Treasury zero, a parent can be assured that the funds will be fully intact to meet this liability. The content is developed from sources believed to be providing accurate information.

  1. The ABCs of Zero Coupon Bonds!
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The information in this material is not intended as tax or legal advice. Each Zero Coupon fund invests in different maturities of these debt securities and has different interest rate risks. The fund can only offer a relatively predictable return if held to maturity. Investment in zero-coupon securities is subject to greater price risk than interest-paying securities of similar maturity.

Although you can potentially earn a dependable return if you hold your shares to maturity, you should be prepared for dramatic price fluctuations which may result in significant gains or losses if sold prior to maturity.

The ABCs of Zero Coupon Bonds | Tax & Wealth Management, LLP

Net expense ratio is the total annual operating expense ratio for the fund, net of any fee waivers or expense reimbursements. Gross expense ratio is the total annual operating expense ratio for the fund, gross of any fee waivers or expense reimbursements. Expense ratios are as of the funds' most current prospectus. This is the actual ratio that investors paid during the fund's most recent fiscal year. W2 If your account falls below the minimum balance, you will be notified and given 90 days to meet the minimum.

Zero Coupon Bonds

If the deadline is not met, American Century Investments may redeem the shares in the account and send the proceeds to the address of record. Lipper rankings are based on average annual total returns.


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  • Performance data is preliminary and subject to revision. Rankings are based on all classes available within the classification as of the date shown.

    Zero-coupon bond

    Rankings are based only on the universe shown. All Rights Reserved. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. For intended recipient only. For detailed descriptions of indices or investing terms referenced above, refer to our glossary.

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    JavaScript is required to view this data. Expenses and Dividends Loading Expenses and Dividends data Morningstar ratings are based upon Investor class of shares, unless otherwise indicated. Each share class is counted as a fraction of one fund within this scale and rated separately, which may cause slight variations in the distribution percentages.

    Past performance is no guarantee of future results. For the equity holdings in the fund's portfolio, the vertical axis shows the market capitalization of the stocks owned and the horizontal axis shows investment style value, blend or growth. Loading Morningstar data Lipper Rankings Loading Lipper data Investment Objective Seeks the highest return consistent with investment in U.

    Price Swings

    Treasury securities. A Note about Risk The fund invests primarily in zero-coupon U. Characteristics Invests in zero-coupon bonds, providing a dependable rate of return if held to maturity. Average annual total returns illustrate the annual compounded returns that would have produced the cumulative total return if the fund's performance had remained constant throughout the period indicated. Returns for periods less than one year are not annualized. Loading Cumulative Performance data Yields Loading Yields data ICE Limitations.

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