AMERICAN CENTURY MUTUAL FUNDS INC, 485APOS, 1998-11-30

AMERICAN CENTURY MUTUAL FUNDS INC
485APOS, 1998-11-30

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]

File No. 2-14213

Pre-Effective Amendment No. [ ]

Post-Effective Amendment No. 79 [X]

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]

File No. 811-0816

Amendment No. 79 [X]

(Check appropriate box or boxes.)

AMERICAN CENTURY MUTUAL FUNDS, INC.
_________________________________________________________________
(Exact Name of Registrant as Specified in Charter)

4500 Main Street, Kansas City, MO 64111
_________________________________________________________________
(Address of Principal Executive Offices) (Zip Code)

Registrant's Telephone Number, including Area Code: (816) 531-5575

William M. Lyons, 4500 Main Street, Kansas City, MO 64111
_________________________________________________________________
(Name and Address of Agent for Service)

Approximate Date of Proposed Public Offering: January 29, 1999

It is proposed that this filing will become effective (check
appropriate box)

[ ] immediately upon filing pursuant to paragraph (b)
[ ] on (date) pursuant to paragraph (b)
[X] 60 days after filing pursuant to paragraph (a)(1)
[ ] on (date) pursuant to paragraph (a)(1)
[ ] 75 days after filing pursuant to paragraph (a)(2)
[ ] on (date) pursuant to paragraph (a)(2) of rule 485.

If appropriate, check the following box:

[ ] This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
<PAGE>
[american century logo(reg.sm)]
American
Century

Prospectus

January 29, 1999
- --------------------------------------------------------------------------------

AMERICAN CENTURY

Growth
Ultra
Select
Vista
Heritage

Investor Class

The Securities and Exchange Commission has not approved or disapproved these
securities or determined if this Prospectus is accurate or complete. Anyone who
tells you otherwise is committing a crime.

Distributed by Funds Distributor, Inc.

Reading a prospectus doesn't have to be a chore. We've done the hard work so you
can focus on what's important--learning about the fund. Take a look inside and
you'll see this prospectus is different from others. It takes a clear-cut
approach to fund information.

Here's what you'll find:

o The fund's primary investments and risks

o A description of who may or may not want to invest in the fund

o Fund performance, including returns for each year, best and worst quarters
and average annual returns compared to the fund's benchmarks

o An overview of ways to best manage your accounts

o Helpful tips and definitions of key investment terms

Whether you're a current investor or investing in mutual funds for the first
time, this prospectus will give you a clear understanding of the fund. If you
have questions, our Investor Services Representatives are available weekdays, 7
a.m. to 7 p.m. Central time. Our toll-free number is 1-800-345-2021. We look
forward to helping you achieve your financial goals.

Sincerely,

Mark Killen
Senior Vice President
American Century Investment Services, Inc.

Table of Contents

An Overview of the Funds......................................2

Fees and Expenses.............................................3

Detailed Information about the Funds..........................4

Growth
Ultra
Select
Vista
Heritage

Management....................................................7

Investing with American Century..............................XX

Share Price and Distributions................................XX

Taxes........................................................XX

Multiple Class Information...................................XX

Financial Highlights.........................................XX

At Your Service..............................................XX

Fund Reference
Fund Code Ticker Newspaper Listing
- --------------------------------------------------------------------------
Growth 020 TWCGX Growth
Ultra 022 TWCUX Ultra
Select 021 TWCIX Select
Vista 024 TWCVX Vista
Heritage 030 TWHIX Heritage
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**********LEFT MARGIN CALLOUTS

Throughout this book you'll find definitions of key investment terms and
phrases. When you see a word printed in green italics, look for its definition
in the left margin.

*........This symbol highlights special information and helpful tips.

**********END LEFT MARGIN CALLOUTS

An Overview of the Funds

What are the funds' investment goals?

These funds seek long-term capital growth.

What are the funds' primary investment strategies and principal risks?

The funds look for common stocks of growing companies. The basis of the strategy
used by these funds is that, over the long term, stocks of companies with
earnings and revenue growth have a greater than average chance to increase in
value over time. A more detailed description of American Century's "growth"
investment style begins on page xx.

The funds' principal risks include:

o Market Risk The value of a fund's shares will go up
and down based on the performance of the companies
whose securities it owns and other factors affecting
the securities market generally.

o Price Volatility The value of the funds' shares may fluctuate
significantly in the short term.

o Principal Loss As with all mutual funds, if you sell your
shares when their value is less than the price you
paid, you will lose money.

Who may want to invest in the funds?

The funds may be a good investment if you are

0 seeking long-term capital growth from your investment

0 comfortable with the funds' short-term price volatility

0 comfortable with the risks associated with the funds' investment strategy

0 investing through an IRA or other tax-advantaged retirement plan

Who may not want to invest in the funds?

The funds may not be a good investment if you are

0 seeking current income from your investment

0 investing for a short period of time

0 uncomfortable with short-term volatility in the value of your investment

**********LEFT MARGIN CALLOUTS

* An investment in the funds is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
government agency.

**********END LEFT MARGIN CALLOUTS

Fees and Expenses

There are no sales loads or fees or other charges

0 to buy fund shares directly from American Century

0 to reinvest dividends in additional shares

0 to exchange into the Investor Class shares of other American Century funds.

The following tables describe the fees and expenses that you may pay if you buy
and hold shares of the funds.

Annual Operating Expenses (expenses that are deducted from fund assets)
Management Fee1 Distribution and Other Total Annual Fund
Service (12b-1) Fees Expenses2 Operating Expenses
Growth 1.00% None 0.00% 1.00%
Ultra 1.00% None 0.00% 1.00%
Select 1.00% None 0.00% 1.00%
Vista 1.00% None 0.00% 1.00%
Heritage 1.00% None 0.00% 1.00%

1 A portion of the management fee may be paid by the funds' advisor to
unaffiliated third parties who provide recordkeeping and administrative
services that would otherwise be performed by an affiliate of the manager.

2 Other expenses, which include the fees and expenses of the funds'
independent directors, their legal counsel, interest and extraordinary
expenses, were less than 0.005% for the most recent fiscal year.

Example of Hypothetical Fund Costs

The examples in the table below are intended to help you compare the costs of
investing in a fund with those of other mutual funds. Assuming you ...

o invest $10,000 in the fund

o redeem all of your shares at the end of the periods shown below

o earn a 5% return each year and

o incur the same operating expenses shown above

... your cost of investing in the fund would be:
1 Year 3 Years 5 Years 10 Years
Growth $102 $318 $551 $1,219
Ultra $102 $318 $551 $1,219
Select $102 $318 $551 $1,219
Vista $102 $318 $551 $1,219
Heritage $102 $318 $551 $1,219

**********LEFT MARGIN CALLOUTS

* Use this example to compare the costs of investing in other funds. Of
course, your actual costs may be higher or lower.

**********END LEFT MARGIN CALLOUTS

Detailed Information about the Funds

Growth
Ultra
Select
Vista
Heritage

What are the funds' investment objectives?

These funds seek long-term capital growth. This is a fundamental policy and
cannot be changed without shareholder approval.

How do the funds pursue their investment objectives?

The fund managers look for stocks of companies that they believe will increase
in value over time, using a growth investment strategy developed by American
Century. This strategy looks for companies with earnings and revenues that are
not only growing, but growing at a successively faster, or accelerating, pace.
This strategy is based on the premise that, over the long term, the stocks of
companies with accelerating earnings and revenues have a greater-than-average
chance to increase in value.

The managers use a bottom-up approach to select stocks to buy for the funds.
That means they first look for strong, growing companies to invest in, rather
than simply buying any company in a growing industry or sector. Using American
Century's extensive computer database, the managers track financial information
for thousands of companies to identify trends in the companies' earnings and
revenues. This information is used to help the fund managers select or decide to
continue to hold the stocks of companies they believe will be able to sustain
accelerating growth, and to sell stocks of companies whose growth begins to slow
down.

Although most of the funds' assets will be invested in U.S. companies, there is
no limit on the amount of assets the funds can invest in foreign companies. Most
of the funds' foreign investments are in companies located and doing business in
developed countries. Investments in foreign securities present some unique risks
that are more fully described in the funds' Statement of Additional Information.

**********LEFT MARGIN CALLOUT

* Accelerating growth is shown, for example, by growth that is faster this
quarter than last or faster this year than the year before.

**********END LEFT MARGIN CALLOUT

The fund managers do not attempt to time the market. Instead, they intend to
keep the funds essentially fully invested in stocks regardless of the movement
of stock prices generally. When the managers believe that it is prudent, the
funds may invest a portion of their assets in convertible securities, foreign
securities, short-term instruments, non-leveraged stock index futures contracts
and other similar securities. Stock index futures contracts, a type of
derivative security, can help the funds' cash assets remain liquid while
performing more like stocks. The funds have a policy governing stock index
futures and similar derivative securities to help manage the risk of these types
of investments. For example, the managers cannot leverage the funds' assets by
investing in a derivative security. A complete description of the derivatives
policy is included in the Statement of Additional Information.

Additional information about the funds' investments is available in their annual
and semiannual reports. In these reports you will find a discussion of the
market conditions and investment strategies that significantly affected the
funds' performance during the most recent six-month period. You may get these
reports at no cost by calling us.

What kinds of securities do the funds buy?

The funds will usually purchase common stocks of U.S. and foreign companies, but
they can purchase other types of securities, as well, such as domestic and
foreign preferred stocks, convertible securities, equity equivalent securities,
notes, bonds and other debt securities. The funds limit their purchase of debt
securities to investment-grade obligations.

What is the difference between the funds?

0 Growth, Ultra and Select generally invest in larger companies, although
they may purchase companies of any size. Companies considered to be large
generally have a market capitalization in excess of $5 billion.
0 Vista and Heritage generally invest in medium-sized and smaller companies,
although they may purchase companies of any size. Companies considered to
be medium sized generally have a market capitalization between $1 billion
and $5 billion, and smaller companies generally have a market
capitalization below $1 billion.
0 Eighty percent (80%) of Select's and 60% of Heritage's assets must be
invested in securities of companies that pay regular dividends, or have
committed to pay dividends, or otherwise produce income. This reflects the
funds' strategy to invest most of their assets in stocks of companies that
are successful enough to pay dividends. The amount of dividends may not be
significant, however, since stocks are not picked based upon the amount of
income they produce. The remaining 20% of Select's and 40% of Heritage's
assets may be invested in any other permissible securities that the fund
managers believe will help the funds achieve their objectives.

**********LEFT MARGIN CALLOUT

Market capitalization means the value of a company, as determined by
multiplying the number of shares of its stock outstanding by its current market
price per share.

**********END LEFT MARGIN CALLOUT

What are the primary risks of investing in the funds?

o The value of a fund's shares depends on the value of the stocks and other
securities it owns. The value of the individual securities a fund owns will
go up and down depending on the performance of the companies that issued
them, general market and economic conditions, and investor confidence.
o The fund managers may buy a large amount of a company's stock quickly, and
often will dispose of it quickly if the company's earnings or revenues
decline. While the managers believe this strategy provides substantial
appreciation potential over the long term, in the short term it can create
a significant amount of share price volatility. This volatility can be
greater than that of the average stock fund.
o As with all funds, at any given time, the value of your shares 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.
o Market performance tends to be cyclical, and in the various cycles, certain
investment styles may fall in and out of favor. If the market is not
favoring the funds' style, the funds' gains may not be as big as, or their
losses may be bigger than, other equity funds using different investment
styles.
o Foreign securities can have certain unique risks, including fluctuations in
currency exchange rates, unstable political and economic structures,
reduced availability of public information and lack of uniform financial
reporting and regulatory practices similar to those that apply to U.S.
issuers. These factors make investing in foreign securities generally
riskier than investing in U.S. stocks. To the extent the fund invests in
foreign securities, the overall risk of the fund could be affected.

These funds are intended for investors who seek long-term capital growth through
an aggressive equity fund and who are willing to accept the risks associated
with the funds' investment strategies.

Fund Performance History

The performance information on this page is designed to help you see how fund
returns can vary. Keep in mind that past performance does not predict how the
funds will perform in the future.

Annual Total Returns

The following bar chart shows the performance of the funds' Investor Class
shares for each of the last 10 calendar years (or for each full year in the life
of the fund if less than 10 years). It indicates the volatility of the funds'
historical returns from year to year.

[GRAPH DEPICTING 10 YEAR ANNUAL TOTAL RETURNS FOR GROWTH, ULTRA, SELECT, VISTA
AND HERITAGE; UPDATED FIGURES NOT AVAILABLE]

Highest and Lowest Quarterly Returns
The highest and lowest returns of the funds' Investor Class shares for a
calendar quarter during the last 10 calendar years (or during the life of the
fund if less than 10 years) are provided below to indicate the funds' historical
short-term volatility. Shareholders should be aware, however, that these funds
are intended for investors with a long-term investment horizon and are not
managed for short-term results.

[GRAPH DEPICTING HIGHEST AND LOWEST RETURNS FOR GROWTH, ULTRA, SELECT, VISTA AND
HERITAGE; UPDATED FIGURES NOT AVAILABLE]

Average Annual Returns

The following table shows the average annual returns of the funds' Investor
Class shares for the periods indicated during the last 10 calendar years. The
benchmarks are included for long-term performance comparison. The benchmarks are
unmanaged indices that have no operating costs.

1 year 5 years 10 years
- --------------------------------------------------------------------------------
Growth XXX% XXX% XXX%
Russell 1000 Growth Index XXX% XXX% XXX%
- --------------------------------------------------------------------------------
Ultra XXX% XXX% XXX%
S&P 500 Index XXX% XXX% XXX%
- --------------------------------------------------------------------------------
Select XXX% XXX% XXX%
S&P 500 Index XXX% XXX% XXX%
- --------------------------------------------------------------------------------
Vista XXX% XXX% XXX%
Russell 2500 Growth Index XXX% XXX% XXX%
- --------------------------------------------------------------------------------
Heritage XXX% XXX% XXX%
S&P Mid Cap 400 Index XXX% XXX% XXX%
- --------------------------------------------------------------------------------

**********LEFT MARGIN CALLOUTS

The funds' total returns for the period from January 1, 1998, to September 30,
1998, are:

Growth XXX%
Ultra XXX%
Select XXX%
Vista XXX%
Heritage XXX%

* For current performance information, please call us at 1-800-345-2021 or
visit American Century's Web site at www.americancentury.com.

**********END LEFT MARGIN CALLOUTS

Management

Who manages the funds?

The Board of Directors, investment advisor and fund management team play key
roles in the management of the funds.

The Board of Directors

The Board of Directors oversees the management of the funds and meets at least
quarterly to review reports about fund operations. Although the Board of
Directors does not manage the funds, it has hired an investment advisor to do
so. More than half of the Directors are independent of the funds' advisor, that
is, they are not employed by and have no financial interest in the advisor.

The Investment Advisor

The funds' investment advisor is American Century Investment Management, Inc.
The advisor has been managing mutual funds since 1958. American Century is
headquartered at 4500 Main Street, Kansas City, Missouri 64111.

The advisor is responsible for managing the investment portfolios of the funds
and directing the purchase and sale of their investment securities. The advisor
also arranges for transfer agency, custody and all other services necessary for
the funds to operate.

For the services it provided to the funds during their most recent fiscal year,
the advisor received a unified management fee of 1.0% of the average net assets
of each fund. The amount of the management fee is calculated daily and paid
monthly. Out of that fee, the advisor paid all expenses of managing and
operating the fund except brokerage expenses, taxes, interest, fees and expenses
of the independent Directors (including legal counsel fees) and extraordinary
expenses.

The Fund Management Teams

The advisor uses teams of portfolio managers, assistant portfolio managers and
analysts to manage the funds. Teams meet regularly to review portfolio holdings
and to discuss purchase and sale activity. Team members buy and sell securities
for a fund as they see fit, guided by the fund's investment objective and
strategy.

Portfolio Manager members of the investment teams are identified below:

Growth
C. Kim Goodwin
Ms. Goodwin, Vice President and Portfolio Manager, has been a member of the team
that manages Growth since joining American Century in October 1997. Before
joining American Century, she served as Senior Vice President and Portfolio
Manager at Putnam Investments from May 1996 to September 1997 and Vice President
and Portfolio Manager at Prudential Investments from February 1993 to April
1996. She has a bachelor of arts from Princeton University and an MBA in finance
from the University of Texas.

Gregory J. Woodhams
Mr. Woodhams, Portfolio Manager, has been a member of the team that manages
Growth since he joined American Century in September 1997 as an Investment
Analyst. Mr. Woodhams was promoted to Portfolio Manager for the Growth team in
May 1998. Before joining American Century, he served as Vice President and
Director of Equity Research for Texas Commerce Bank, a subsidiary of Chase
Manhattan Bank. He has a bachelor's degree in economics from Rice University and
an MBA in economics from the University of Wisconsin. He is a Chartered
Financial Analyst.

Ultra
James E. Stowers III
Mr. Stowers, Chief Executive Officer and Portfolio Manager, joined American
Century as a portfolio manager of Ultra and other American Century
growth-oriented funds in 1981. He has a bachelor's degree in finance from
Arizona State University.

John R. Sykora
Mr. Sykora, Vice President and Portfolio Manager, has been a member of the team
that manages Ultra since August 1997. He joined American Century in May 1994 as
an Investment Analyst. Before joining American Century, he served as a Financial
Analyst for Business Men's Assurance Company of America, Kansas City, Missouri
from August 1993 to April 1994. He has a bachelor's degree in accounting finance
and an MBA in finance from Michigan State University. He is a Chartered
Financial Analyst.

Bruce A. Wimberly
Mr. Wimberly, Vice President and Portfolio Manager, has been a member of the
team that manages Ultra since July 1996. He joined American Century in September
1994 as an Investment Analyst. Before joining American Century, he attended
Kellogg Graduate School of Management, Northwestern University from August 1992
to August 1994, where he obtained his MBA. He has a bachelor of arts from
Middlebury College and an MBA in finance from Kellogg Graduate School of
Management.

Select
Jean C. Ledford
Ms. Ledford, Vice President and Portfolio Manager, has been a member of the team
that manages Select since joining American Century in January 1997. Prior to
joining American Century, she worked for the State of Wisconsin Investment Board
as an Investment Director from 1994 to 1996, and as an Assistant Investment
Director from 1983 to 1994. She has a bachelor of arts and an MBA in finance
from the University of Wisconsin. She is a Chartered Financial Analyst.

Richard S. Welsh
Mr. Welsh, Portfolio Manager, has been a member of the team that manages Select
since May 1998. He joined American Century in August 1994 as an Equity Research
Analyst and was promoted to Investment Analyst in January 1997. Prior to joining
American Century, he served as Equity Research Analyst for Brown Brothers
Harriman & Company. He has a bachelor's degree in economics from Boston
University and an MBA in finance and accounting from New York University.

Vista
Arnold K. Douville
Mr. Douville, Vice President and Portfolio Manager, has been a member of the
team that manages Vista since joining American Century in November 1997. Before
joining American Century, he served as Senior Portfolio Manager for Munder
Capital Management from September 1989 to October 1997. He has a bachelor's
degree in economics from the U.S. Air Force Academy and an MBA in finance,
statistics and economics from the University of Chicago.

Glenn A. Fogle
Mr. Fogle, Vice President and Portfolio Manager, has been a member of the team
that manages Vista since March 1993. He joined American Century in September
1990 as an Investment Analyst. He has a bachelor of arts and an MBA in finance
from Texas Christian University. He is a Chartered Financial Analyst.

Heritage
Harold S. Bradley
Mr. Bradley, Vice President and Portfolio Manager, has been a member of the team
that manages Heritage since March 1998. He joined American Century in 1988 and
for the past 10 years, has managed the global equity, futures and foreign
exchange trading activities for American Century. He has a bachelor of arts from
Marquette University.

Linda K. Peterson
Ms. Peterson, Portfolio Manager, has been a member of the team that manages
Heritage since March 1998. She joined American Century in 1986. She served as an
Investment Analyst for American Century's growth-oriented equity funds,
including Heritage, from April 1994 until February 1998. She has a bachelor's
degree in finance from the University of Northern Iowa and an MBA from the
University of Missouri-Kansas City. She is a Chartered Financial Analyst.

**********LEFT MARGIN CALLOUTS

* Code of Ethics
American Century has a Code of Ethics designed to ensure that the interests
of fund shareholders come before the interests of the people who manage the
funds. Among other provisions, the Code of Ethics prohibits portfolio
managers and other investment personnel from buying securities in an
initial public offering or from profiting from the purchase and sale of the
same security within 60 calendar days. In addition, the Code of Ethics
requires portfolio managers and other employees with access to information
about the purchase or sale of securities by the funds to obtain approval
before executing permitted personal trades.

**********END LEFT MARGIN CALLOUTS

Fundamental Investment Policies

Fundamental investment policies contained in the Statement of Additional
Information and the investment objectives of the funds may not be changed
without a shareholder vote. The Board of Directors may change any other policies
and investment strategies.

Year 2000 Issues

Many of the world's computer systems currently cannot properly recognize or
process date-sensitive information relating to the Year 2000 and beyond. Because
this may impact the computer systems of various American Century-affiliated and
external service providers for the funds, American Century formally initiated a
Year 2000 readiness project in July 1997. It involves a team of information
technology professionals assisted by outside consultants and guided by a
senior-level steering committee. The team's goal is to assess the impact of the
Year 2000 on American Century's systems, renovate or replace noncompliant
critical systems and test those systems. In addition, the team has been working
to gather information about the Year 2000 efforts of the funds' other major
service providers. Although American Century believes its critical systems will
function properly in the Year 2000, this is not guaranteed. If the efforts of
American Century or its external service providers are not successful, the
funds' business, particularly the provision of shareholder services, may be
hampered.

In addition, the issuers of securities the funds own could have Year 2000
computer problems. These problems could negatively affect the value of their
securities, which, in turn, could impact the funds' performance. The advisor has
established a process to gather publicly available information about the Year
2000 readiness of these issuers. However, this process may not uncover all
relevant information, and the information gathered may not be complete and
accurate. Moreover, an issuer's Year 2000 readiness is only one of many factors
the fund managers may consider when making investment decisions, and other
factors may receive greater weight.

Investing With American Century

Services Automatically Available to You

You automatically will have access to the services listed below when you open
your account. If you do not want these services, see "Conducting Business in
Writing" below.

Conducting Business in Writing

If you prefer to conduct business in writing only, you can indicate this on the
account application. If you choose to do business in writing only, you must
provide written instructions to invest, exchange and redeem. All account owners
must sign transaction instructions (with signatures guaranteed for redemptions
in excess of $100,000). If you want to add services later, you can complete an
Investor Service Options form.

<TABLE>
Ways to Manage Your Account
- -------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------- ---------------------------------------------- -----------------------------------------------
<S> <C> <C>
By telephone Open an account Make additional investments
Investor Services If you are a current investor, you Call us or use our Automated Information Line
1-800-345-2021 can open an account by exchanging if you have authorized us to invest from your
7 a.m. to 7 p.m. Central time shares from another American Century bank account.
account. (This service is not
Automated Information Line available if you have chosen to do Sell shares
1-800-345-8765 business in writing only.) Call an Investor Services Representative.
24 hours a day
seven days a week Exchange shares
Call us or use our Automated Information Line
if you have authorized us to accept telephone
instructions.
- ---------------------------------- ---------------------------------------------- -----------------------------------------------
- ---------------------------------- ---------------------------------------------- -----------------------------------------------
By mail or fax Open an account Make additional investments
PO Box 419200 Send a signed and completed Send us your check or money order for at
Kansas City, MO 64141-6200 application and check or money order least $50 with an investment slip or $250
payable to American Century without an investment slip. If you don't have
Fax 816-340-7962 Investments. an investment slip, include your name,
address and account number on your check or
Exchange shares money order.
Send us written instructions to
exchange your shares from one Sell shares
American Century account to another. Send us written instructions to sell shares
or send us a redemption form. Call an
Investor Services Representative to request a
form.
- ---------------------------------- ---------------------------------------------- -----------------------------------------------
- ---------------------------------- ---------------------------------------------- -----------------------------------------------
Online Open an account Make additional investments
www.americancentury.com If you are a current investor, you Follow the instructions online if you have
can open an account by exchanging authorized us to invest from your bank
shares from another American Century account.
account online. (This service is not
available if you have chosen to do Sell shares
business in writing only.) Not available.

Exchange shares
Exchange shares from another American Century
account.

A Note About Mailings to Shareholders

To reduce expenses and demonstrate respect for our environment, we will deliver
most financial reports, prospectuses and account statements to households in a
single envelope, even if the accounts are registered under different names. If
you would like additional copies of financial reports and prospectuses or
separate mailing of account statements, please call us.

Your Guide to Services and Policies

When you open an account, you will receive an Investor Services Guide, which
explains the services available to you and the policies of the fund and the
transfer agent.

4500 Main Street 4917 Town Center Dr.
Kansas City, Missouri Leawood, Kansas

1665 Charleston Road 2000 S. Colorado Blvd.
Mountain View, California Denver, Colorado
</TABLE>

Minimum Initial Investment Amounts

To open an account the minimum investments are as follows for:
- ----------------------------------------------------------------------
Individual or Joint $2,500
Traditional IRA $1,000
Roth IRA $1,000
Education IRA $500
UGMA/UTMA $1,000
403(b) No minimum

Redemption of shares in low-balance accounts

If your account falls below the minimum balance we will notify you and give you
90 days to meet the minimum or, for most types of equity accounts, to establish
an automatic monthly investment. If you do not meet the deadline, American
Century will redeem the shares in the account and send the proceeds to your
address of record.

Special requirements for large redemptions

The funds have elected to be governed by Rule 18f-1 under the Investment Company
Act, which obligates each fund to make certain redemptions in cash. This
requirement applies when a shareholder redeems, during any 90-day period, up to
the lesser of $250,000 or 1% of the assets of the fund. Although we normally
will pay redemptions in excess of this limitation in cash, American Century
reserves the right under unusual circumstances to honor these redemptions in
kind by making payment in whole or in part in readily marketable securities.

If we make payment in securities, we will value the securities, selected by the
fund, in the same manner as we do in computing the fund's net asset value. We
will provide these securities to the redeeming plan participant or financial
intermediary in lieu of cash without prior notice. If your redemption would
exceed this limit and you would like to avoid being paid in securities, please
provide us with an unconditional instruction to redeem at least 15 days prior to
the date on which the redemption transaction is to occur. The instruction must
specify the dollar amount or number of shares to be redeemed and the date of the
transaction. This minimizes the effect of the redemption on the fund and its
remaining shareholders.

While each fund reserves the right to redeem fund shares through a
redemption-in-kind, we do not expect to exercise this option unless a fund has
an unusually low level of cash to meet redemptions and/or is experiencing
unusually strong demands for its cash. Such a demand might be caused, for
example, by extreme market conditions that result in an abnormally high level of
redemption requests concentrated in a short period of time. Absent these or
similar circumstances, we expect redemptions in excess of $250,000 to be paid in
cash in any fund with assets of more than $50 million if total redemptions from
any one account in any 90-day period do not exceed one-half of 1% of the total
assets of the fund.

Investing Through Financial Intermediaries

If you do business with us through a financial intermediary or a retirement
plan, your ability to purchase, exchange and redeem shares will depend on the
policies of that entity. Some policy differences may include

o minimum investment requirements
o exchange policies
o fund choices
o cut-off time for investments

Please contact your financial intermediary or plan sponsor for a complete
description of its policies. Copies of the funds' annual reports, semiannual
reports and Statements of Additional Information are available from your
intermediary or plan sponsor.

Certain financial intermediaries perform recordkeeping and administrative
services for their clients that would otherwise be performed by American
Century's transfer agent. In some circumstances, American Century will pay the
service provider a fee for performing those services.

Although transactions in fund shares may be made directly with American Century
at no charge, you also may purchase, redeem and exchange fund shares through
financial intermediaries that charge a transaction-based or other fee for their
services. Those charges are retained by the intermediary and are not shared with
American Century or the funds.

American Century has contracts with certain financial intermediaries in which
they represent that they will track the time investment orders are received. The
funds have authorized those intermediaries to accept orders on each fund's
behalf up to the time net asset value is determined. Such orders will be priced
at the net asset value next determined after acceptance of the order on a fund's
behalf.

**********LEFT MARGIN CALLOUTS

* Financial intermediaries include banks, broker-dealers, insurance companies
and investment advisors.

**********END LEFT MARGIN CALLOUTS

Share Price and Distributions

Share Price

We determine the net asset value of the funds as of the close of regular trading
on the New York Stock Exchange (usually 4 p.m. Eastern time) on each day the
Exchange is open. On days when the Exchange is not open, we do not calculate the
net asset value. The net asset value of a fund share is the current value of its
investments, minus any liabilities, divided by the number of fund shares
outstanding.

If current prices of securities owned by a fund are not readily available from
an independent pricing service, the advisor may determine their fair value in
accordance with procedures adopted by the fund's Board of Directors. Trading of
securities in foreign markets may not take place on every day the Exchange is
open. Also, trading in some foreign markets may take place on weekends or
holidays when a fund's net asset value is not calculated. So, the value of a
fund's portfolio may be affected on days when you can't purchase or redeem
shares of the fund.

We will price your purchase, exchange or redemption at the net asset value next
determined after we receive your transaction request in good order.

Distributions

Federal tax laws require each fund to make distributions to its shareholders in
order to qualify as a "regulated investment company." Qualification as a
regulated investment company means that the funds will not be subject to state
or federal income tax on amounts distributed. The distributions generally
consist of dividends and interest received, as well as capital gains realized on
the sale of investment securities. Each fund pays distributions from net income
monthly. Each fund generally pays distributions of capital gains, if any, once a
year in December. A fund may make more frequent distributions if necessary to
comply with Internal Revenue Code provisions.

Participants in employer-sponsored retirement or savings plans must reinvest all
distributions. For shareholders investing through taxable accounts, we will
reinvest distributions unless you elect to receive them in cash. Please consult
our Investor Services Guide for further information regarding distributions and
your distribution options.

**********LEFT MARGIN CALLOUTS

The net asset value of a fund is the price of the fund's shares.

Capital gains is the increase in value of a capital asset, such as stock, from
the time it is purchased. Tax becomes due on capital gains once the asset is
sold.

**********END LEFT MARGIN CALLOUTS

Taxes

The tax consequences of owning shares of the funds will vary depending on
whether you own them through a taxable or tax-deferred account. Tax consequences
result from distributions by the funds of dividend and interest income it has
received and capital gains it has generated through its investment activities,
and by sales of fund shares by investors after the net asset value has increased
or decreased.

Tax-Deferred Accounts

If you purchase fund shares through a tax-deferred account, such as an IRA or a
qualified employer-sponsored retirement or savings plan, income and capital
gains distributions usually will not be subject to current taxation, but will
accumulate in your account under the plan on a tax-deferred basis. Likewise,
moving from one fund to another fund within a plan or tax-deferred account
generally will not cause you to be taxed. For information about the tax
consequences of making purchases or withdrawals through an employer sponsored
retirement or savings plan, or through an IRA, please consult your plan
administrator, your summary plan description or a professional tax advisor.

Taxable Accounts

If you own fund shares through a taxable account, distributions by the fund and
sales by you of fund shares may cause you to be taxed.

Taxability of Distributions

Fund distributions may consist of income earned by the fund from sources such as
dividends and interest, or capital gains generated from the sale of fund
investments. Distributions of income are taxed as ordinary income. Distribution
of capital gains are classified either as short term or long term and are taxed
as follows:

<TABLE>
Type of Distribution Tax rate for 15% Bracket Tax rate for 28% Bracket or above
- ------------------------ ------------------------ ---------------------------------
<S> <C> <C>
Short-term capital gains Ordinary income rate Ordinary income rate
Long-term capital gains 10% 20%
</TABLE>

The tax status of any distribution of capital gains is determined by how long
the fund held the underlying security that was sold, not by how long you have
been invested in the fund or whether you reinvest your distributions in
additional shares or take them as income. American Century will detail the tax
status of fund distributions for each calendar year in an annual tax statement
from the fund.

Distributions also may be subject to state and local taxes. Because everyone's
tax situation is unique, always consult your tax professional about federal,
state and local tax consequences.

Taxes on Transactions

Your redemptions -- including exchanges to other American Century funds -- are
subject to capital gains tax. The table above can provide a general guide for
your potential tax liability when selling or exchanging fund shares. "Short-term
capital gains" are gains on fund shares held for 12 months or less. "Long-term
capital gains" are gains on fund shares held for more than 12 months. If your
shares decrease in value, their sale or exchange will result in a long-term or
short-term capital loss.

**********LEFT MARGIN CALLOUTS

* Buying a Dividend
Purchasing fund shares in a taxable account shortly before a distribution
is sometimes known as "buying a dividend." In taxable accounts, you must
pay income taxes on the distribution whether you take the distribution in
cash or reinvest it. In addition, you will have to pay taxes on the
distribution whether the value of your investment decreased, increased or
remained the same after you bought the fund shares. The risk in buying a
dividend is that a fund's portfolio may build up taxable gains throughout
the period covered by a distribution, as securities are sold at a profit.
We distribute those gains to you, after subtracting any losses, even if you
did not own the shares when the gains occurred. Thus if you buy a dividend,
you incur the full tax liability of the distribution period, but you may
not enjoy the full benefit of the gains realized in the fund's portfolio.

**********END LEFT MARGIN CALLOUTS

Multiple Class Information

American Century offers three classes of the funds: Investor Class,
Institutional Class and Advisor Class. The shares offered by this Prospectus are
Investor Class shares and have no up-front or deferred charges, commissions, or
12b-1 fees.

American Century offers the other classes of shares primarily to institutional
investors, through institutional distribution channels, such as
employer-sponsored retirement plans, or through banks, broker-dealers and
insurance companies. The other classes have different fees, expenses, and/or
minimum investment requirements than the Investor Class. The difference in the
fee structures among the classes is the result of their separate arrangements
for shareholder and distribution services and not the result of any difference
in amounts charged by the advisor for core investment advisory services.
Accordingly, the core investment advisory expenses do not vary by class.
Different fees and expenses will affect performance. For additional information
concerning the other classes of shares not offered by this Prospectus, call us
at 1-800-345-3533 or contact a sales representative or financial intermediary
who offers those classes of shares.

Except as described below, all classes of shares of a fund have identical
voting, dividend, liquidation and other rights, preferences, terms and
conditions. The only differences among the various classes are (a) each class
may be subject to different expenses specific to that class, (b) each class has
a different identifying designation or name, (c) each class has exclusive voting
rights with respect to matters solely affecting such class, (d) each class may
have different exchange privileges, and (e) the Institutional Class may provide
for automatic conversion from that class into shares of the Investor Class of
the same fund.

Financial Highlights

Understanding the Financial Highlights

This table itemizes what contributed to the changes in share price during the
period, and compares this to changes over the last five fiscal years (or less,
if the share class is not five years old).

On a per-share basis, it includes:

o share price at the beginning of the period
o investment income and capital gains or losses
o distributions of income and capital gains paid to shareholders
o share price at the end of the period

It also includes some key statistics for the period:

o Total Return--the overall percentage of return of the fund, assuming the
reinvestment of all distributions
o Expense Ratio--operating expenses as a percentage of average net assets
o Net Income Ratio--net investment income as a percentage of average net
assets
o Portfolio Turnover--the percentage of the fund's buying and selling activity

The Financial Highlights for the fiscal years ended October 31, 1997 and 1998
have been audited by Deloitte & Touche LLP, independent auditors. Their report
is in the funds' annual report, which is incorporated by reference into the
Statement of Additional Information, and is available upon request. Prior years'
information was audited by other independent auditors, whose report thereon also
is incorporated by reference into the Statement of Additional Information.

<TABLE>
<CAPTION>
Growth

1998 1997 1996 1995 1994
PER-SHARE DATA
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year.........
------------- -------------- ------------- ------------- --------------
Income from Investment Operations
Net Investment Income (dividends).......
Net Realized and Unrealized Gain (Loss) on
Investment Transactions.................
------------- -------------- ------------- ------------- --------------
Total From Investment Operations........
------------- -------------- ------------- ------------- --------------
Less Distributions
From Net Investment Income (dividends)..
------------- -------------- ------------- ------------- --------------
------------- -------------- ------------- ------------- --------------
Net Asset Value, End of Year...............
------------- -------------- ------------- ------------- --------------
Total Return(1)............................

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses to
Average Net Assets .....................
Ratio of Net Investment Income to
Average Net Assets .....................
Net Assets, End of Year (in thousands).....

(1) Total return assumes reinvestment of dividends and capital gains, if any.
</TABLE>

<TABLE>
<CAPTION>
Ultra
1998 1997 1996 1995 1994
PER-SHARE DATA
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year.........
------------- -------------- ------------- ------------- --------------
Income from Investment Operations
Net Investment Income (dividends).......
Net Realized and Unrealized Gain (Loss) on
Investment Transactions.................
------------- -------------- ------------- ------------- --------------
Total From Investment Operations........
------------- -------------- ------------- ------------- --------------
Less Distributions
From Net Investment Income (dividends)..
------------- -------------- ------------- ------------- --------------
------------- -------------- ------------- ------------- --------------
Net Asset Value, End of Year...............
------------- -------------- ------------- ------------- --------------
Total Return(1)............................

RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses to
Average Net Assets .....................
Ratio of Net Investment Income to
Average Net Assets .....................
Net Assets, End of Year (in thousands).....

(1) Total return assumes reinvestment of dividends and capital gains, if any.
</TABLE>

<TABLE>
<CAPTION>
Select

(1) Total return assumes reinvestment of dividends and capital gains, if any.
</TABLE>

<TABLE>
<CAPTION>
Vista

(1) Total return assumes reinvestment of dividends and capital gains, if any.
</TABLE>

<TABLE>
<CAPTION>
Heritage

(1) Total return assumes reinvestment of dividends and capital gains, if any.
</TABLE>

At Your Service

Make virtually any transaction online

The next time you're surfing the Net, stop by American Century's Web site at
www.americancentury.com. Current shareholders can open new accounts by
exchanging shares (provided the account registration does not change). In
addition, you can view transactions and check your account balances. You can
also sign up to receive annual updates to your prospectuses and financial
reports via the Net instead of through the mail.

Expand your investment options with American Century Brokerage

If you're looking for a wide range of investment options - from trading
individual securities to purchasing mutual funds offered by hundreds of
companies - look to American Century Brokerage. With this new investment
service, you can take advantage of 24-hour trading on our Web site or TeleSelect
automated telephone service. Or, if you prefer, you can do business directly
with a Brokerage Associate.

With service features including a Gold MasterCard(R) ATM/Debit Card, unlimited
CheckWriting and cost basis reporting (all available with the American Century
Brokerage Access AccountSM), our brokerage service can simplify your life now
while you prepare financially for the years to come. For information about
opening a brokerage account, please call an American Century Brokerage Associate
at 1-888-345-2071.

Send your distributions straight to the bank

If you opt to have your dividend and capital gain distributions paid to you in
cash rather than reinvesting them into your account, consider an electronic
transfer to your bank account. It will save you time and a trip to the bank.
Call an Investor Services Representative for more information.

Check out our library

Are you looking for additional information on bond basics? Or, are you trying to
decide if municipal bonds have a place in your portfolio? Perhaps you would like
to test your knowledge of bonds and how they work. These are subjects covered in
our Financial FYI library that are available to you. Financial FYI, a growing
library of one-page resources, clearly and quickly explains various financial
subjects to help you make informed decisions. To request one of these articles,
call an Investor Services Representative.

More information about the funds is contained in these documents:

Annual and Semiannual Reports. These reports contain more information about the
fund's investments and the market conditions and investment strategies that
significantly affected the fund's performance during the most recent six-month
fiscal period.

Statement of Additional Information. The SAI contains a more detailed, legal
description of the funds' operations, investment restrictions, policies and
practices. The SAI is incorporated by reference into this Prospectus. This means
that it is legally part of this Prospectus, even if you don't request a copy.

You also can get information about the funds (including the SAI) from the SEC.

v In person. SEC Public Reference Room
Washington, D.C.
Call 1-800-SEC-0330 for location and hours.

v On the internet. www.sec.gov.

v By mail. Public Reference Section
Washington, D.C.
20549-6009
The SEC will charge a fee for copying the documents
you request.

American Century Investments
P.O. Box 419200
Kansas City, Missouri 64141-6200

Investor Services
1-800-345-2021 or 816-531-5575

Automated Information Line
1-800-345-8765

Fax
816-340-7962

www.americancentury.com

Telecommunications Device for the Deaf
1-800-634-4113 or 816-444-3485

Corporate, Not-for-Profit, Keogh,
SEP-, SARSEP-, SIMPLE-IRA and 403(b) Services
1-800-345-3533

Investment Company Act File No. 811-0816
<PAGE>
[american century logo(reg.sm)]
American
Century

Prospectus

January 29, 1999
- --------------------------------------------------------------------------------

AMERICAN CENTURY

Limited-Term Bond
Intermediate-Term Bond
Bond

Investor Class

The Securities and Exchange Commission has not approved or disapproved these
securities or determined if this Prospectus is accurate or complete. Anyone who
tells you otherwise is committing a crime.

Distributed by Funds Distributor, Inc.

Reading a prospectus doesn't have to be a chore. We've done the hard work so you
can focus on what's important--learning about the funds. Take a look inside and
you'll see this prospectus is different from others. It takes a clear-cut
approach to fund information.

Here's what you'll find:

o The funds' primary investments and risks

o A description of who may or may not want to invest in the funds

o Fund performance, including returns for each year, best and worst quarters
and average annual returns compared to the funds' benchmarks

o An overview of ways to best manage your accounts

o Helpful tips and definitions of key investment terms

Whether you're a current investor or investing in mutual funds for the first
time, this prospectus will give you a clear understanding of the funds. If you
have questions, our Investor Services Representatives are available weekdays, 7
a.m. to 7 p.m. Central time. Our toll-free number is 1-800-345-2021. We look
forward to helping you achieve your financial goals.

Sincerely,

Mark Killen
Senior Vice President
American Century Investment Services, Inc.

Table of Contents

An Overview of the Funds...............................................2

Fees and Expenses......................................................3

Detailed Information about the Funds...................................4

Limited-Term Bond
Intermediate-Term Bond
Bond

Basics of Fixed Income Investing......................................12

Management............................................................15

Investing with American Century.......................................18

Share Price and Distributions.........................................21

Taxes.................................................................22

Multiple Class Information............................................22

Financial Highlights..................................................23

At Your Service.......................................................22

Fund Reference
Fund Code Ticker Newspaper Listing
- --------------------------------------------------------------------------------
Limited-Term Bond 033 N/A LtdBnd
Intermediate-Term Bond 034 TWITX IntTrBd
Bond 027 TWLBX Bond
- --------------------------------------------------------------------------------

**********LEFT MARGIN CALLOUTS

Throughout this book you'll find definitions to key investment terms and
phrases. When you see a word printed in green italics, look for its definition
in the left margin.

*........This symbol highlights special information and helpful tips.

**********END LEFT MARGIN CALLOUTS

An Overview of the Funds

What are the funds' investment goals?

These funds seek income from investments in corporate bonds and other debt
obligations.

What are the funds' primary investments and risks?

The funds invest most of their assets in quality debt securities issued by
corporations. The chart below shows the primary differences among the funds.
Additional important information about the funds' investment strategies and
risks begins on page 4.

<TABLE>
Fund Primary Investments Primary Risks
- ------------------------ -------------------------------------------- ------------------------
<S> <C> <C>
Limited-Term Bond Quality short-term debt securities Liquidity risk
Some credit risk
Some interest rate risk
Intermediate-Term Bond Quality intermediate-term debt securities Liquidity risk
Some credit risk
Interest rate risk
Bond Quality intermediate- and longer-term debt Liquidity risk
securities Some credit risk
High interest rate risk
- ------------------------ -------------------------------------------- ------------------------
</TABLE>

**********LEFT MARGIN CALLOUT

Debt securities means bonds, notes and debentures. Debt securities also are
sometimes called fixed income securities.

**********END LEFT MARGIN CALLOUT

Who may want to invest in the funds?

The funds may be a good investment if you are

0 seeking current income

0 comfortable with the funds' other investment risks

Who may not want to invest in the funds?

The funds may not be a good investment if you are

0 investing for long-term growth

0 looking for the added security of FDIC insurance

**********LEFT MARGIN CALLOUTS

An investment in the funds is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.

**********END LEFT MARGIN CALLOUTS

Fees and Expenses

There are no sales loads or fees or other charges

0 to buy fund shares directly from American Century

0 to reinvest dividends in additional shares

0 to exchange into the Investor Class shares of other American Century funds

The following tables describe the fees and expenses that you may pay if you buy
and hold shares of the funds.

<TABLE>
<CAPTION>
Annual Operating Expenses (expenses that are deducted from fund assets)
Management Fee Distribution and Other Total Annual Fund Operating
Service (12b-1) Fees Expenses1 Expenses
- ---------------------------- ------------------- ------------------------- ----------- ------------------------------
<S> <C> <C> <C>
Limited-Term Bond 0.70% None 0.00% 0.70%
- ---------------------------- ------------------- ------------------------- ----------- ------------------------------
Intermediate-Term Bond 0.75% None 0.00% 0.75%
- ---------------------------- ------------------- ------------------------- ----------- ------------------------------
Bond 0.80% None 0.00% 0.80%
</TABLE>

1 Other expenses, which include the fees and expenses of the funds'
independent trustees, their legal counsel, interest and extraordinary
expenses, were less than 0.005% for the most recent fiscal year.

Examples of Hypothetical Fund Costs

The examples in the table below are intended to help you compare the costs of
investing in a fund with those of other mutual funds. Assuming you ...

o invest $10,000 in the fund

o redeem all of your shares at the end of the periods shown below

o earn a 5% return each year and

o incur the same operating expenses shown above,

... your cost of investing in the fund would be:

1 Year 3 Years 5 Years 10 Years
- ---------------------------- ---------- ---------- ---------- -----------
Limited-Term Bond $71 $224 $389 $868
- ---------------------------- ---------- ---------- ---------- -----------
Intermediate-Term Bond $76 $239 $416 $928
- ---------------------------- ---------- ---------- ---------- -----------
Bond $82 $255 $443 $987

**********LEFT MARGIN CALLOUTS

* Use this example to compare the costs of investing in other funds. Of
course, your actual costs may be higher or lower.

**********END LEFT MARGIN CALLOUTS

Detailed Information About the Funds

Limited-Term Bond
Intermediate-Term Bond
Bond

What are the funds' investment objectives?

These funds seek income from investments in corporate bonds and other debt
obligations.

How do the funds implement their investment objectives?

The funds invest most of their assets in quality debt securities of differing
maturities. However, up to 15% of the funds' assets may be invested in
securities rated in the fifth highest category by an independent ratings agency,
or determined to be of comparable quality by the advisor. Corporations usually
issue these securities to finance existing operations or to expand their
business. The remainder will be invested in short-term money market instruments.
For more information about the funds' credit quality standards and about credit
risk, please see "BASICS OF FIXED INCOME INVESTING" beginning on page XX.

**********LEFT MARGIN CALLOUTS

A quality debt security is one that has been determined to be investment grade.
This can be established in a number of ways. For example, independent rating
agencies may rate the security in one of their four higher rating categories.
The funds' advisor also can analyze an unrated security to determine if its
credit quality is high enough for investment.

**********END LEFT MARGIN CALLOUTS

What is the difference between the three funds?

The funds differ in the maturity of the debt securities they purchase. This
difference is shown on the chart below.

Expected Weighted Average
Maturity Range
- --------------------------------------------------------
Limited-Term Bond 1-5 years
Intermediate-Term Bond 3-10 years
Bond 8-20 years

What are the primary risks of investing in the funds?

The funds have different weighted average maturities. Because of this, the funds
will respond differently to changes in interest rates. Funds with longer
weighted average maturities are more sensitive to interest rate changes. When
interest rates rise, the values of the funds usually fall, but the values of
funds with longer weighted average maturities generally will fall farther.

The funds' share values will fluctuate. In general, the funds that have higher
potential income have a higher potential loss. If you sell your shares when
their value is less than the price you paid, you will lose money.

Potential Income Potential Loss
- ----------------------------------------------------------------------
Limited-Term Bond Lower Lower
Intermediate-Term Bond Moderate Moderate
Bond Higher Higher

Although most of the securities purchased by the funds are quality debt
securities at the time of purchase, the funds may invest part of their assets in
securities rated in the lowest investment grade category (e.g., BBB) and up to
15% of their assets in securities rated in the fifth category (e.g., BB). As a
result, the funds have some credit risk. Although they are considered investment
grade, issuers of BBB rated securities (and securities of similar quality) are
more likely to have problems making interest and principal payments than issuers
of higher-rated securities. Issuers of BB rated securities (and securities of
similar quality) are considered to force major uncertainties or exposure to
adverse business, financial or economic conditions that could lead to
difficulties in making timely payments of principal and interest.

Fund Performance History

The performance information on this page is designed to help you understand how
fund returns can vary. Keep in mind that past performance does not predict how
the funds will perform in the future.

Annual Total Returns

[GRAPH DEPICTING 10 YEAR ANNUAL TOTAL RETURNS (OR SINCE INCEPTION) FOR
LIMITED-TERM BOND, INTERMEDIATE-TERM BOND AND BOND; UPDATED FIGURES NOT
AVAILABLE]

Highest and Lowest Quarterly Returns
The highest and lowest returns of the funds' Investor Class shares for a quarter
during the last 10 calendar years (or the life of the fund if less than 10
years) are provided below to indicate the funds' historical short-term
volatility.

[GRAPH DEPICTING HIGHEST AND LOWEST QUARTERLY RETURNS FOR LIMITED-TERM BOND,
INTERMEDIATE-TERM BOND AND BOND; UPDATED FIGURES NOT AVAILABLE]

Average Annual Returns

The following table shows the average annual returns of the funds' Investor
Class Shares for the periods indicated during the last 10 calendar years. The
benchmarks are included for long-term performance comparison. The benchmarks are
unmanaged indices that have no operating costs.

<TABLE>
<CAPTION>
1 year 5 years 10 years Life of Fund*
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Limited-Term Bond 3.17% N/A N/A 3.33%
Merrill Lynch 1- to 5-year Govt./Corp. Index X.XX% X.XX% X.XX% X.XX%
- --------------------------------------------------------------------------------------------------------------------
Intermediate-Term Bond 3.17% N/A N/A 3.33%
Lehman Intermediate Govt./Corp. Index X.XX% X.XX% X.XX% X.XX%
- --------------------------------------------------------------------------------------------------------------------
Bond 3.17% 3.12% 3.31% 3.33%
Lehman Aggregate Bond Index X.XX% X.XX% X.XX% X.XX%
</TABLE>

* The inception dates for the funds are: Limited-Term Bond and
Intermediate-Term Bond, March 1, 1994; Bond, March 2, 1987.

**********LEFT MARGIN CALLOUTS

The funds' total returns for the period from January 1, 1998, to September 30,
1998, are

Limited-Term Bond X.XX%
Intermediate-Term Bond X.XX%
Bond X.XX%

* For current performance information, including yields, please call us at
1-800-345-2021 or visit American Century's Web site at
www.americancentury.com

**********END LEFT MARGIN CALLOUTS

Basics of Fixed Income Investing

Debt Securities

When a fund buys a debt security, which is also called a fixed income security,
it is essentially lending money to the issuer of the security. Notes, bonds,
commercial paper and Treasury bills are examples of debt securities. After the
issuer first sells the debt security, it may be bought and sold by other
investors. The price of the security may rise or fall based on many factors,
including changes in interest rates, inflation and liquidity.

The fund managers decide which debt securities to buy and sell by

0 determining which securities help a fund meet its maturity requirements

0 identifying securities that satisfy a fund's credit quality requirements

0 evaluating the current economic conditions and assessing the risk of
inflation

0 evaluating special features of the securities that may make them more or
less attractive

Weighted Average Maturity

Like most loans, debt securities eventually must be repaid (or refinanced) at
some date. This date is called the maturity date. The number of days left to a
debt security's maturity date is called the remaining maturity. The longer a
debt security's remaining maturity, the more sensitive it is to changes in
interest rates.

Because a bond fund will own many debt securities, the advisor calculates the
average of the remaining maturities of all of the debt securities the fund owns
to evaluate the interest rate sensitivity of the entire portfolio. This average
is weighted according to the size of the fund's individual holdings and is
called weighted average maturity. The following chart shows how an advisor would
calculate the weighted average maturity for a fund that owned only two debt
securities.

<TABLE>
Amount of Security Owned Percent of Portfolio Remaining Maturity Weighted Maturity
- ---------------------- ------------------------------ ---------------------- ----------------------- ----------------------
<S> <C> <C> <C> <C>
Debt Security A $100,000 25% 1,000 days 250 days
Debt Security B $300,000 75% 10,000 days 7500 days
Weighted Average Maturity 7750 days
</TABLE>

Types of Risk

The basic types of risk that the funds face are described below.

Interest Rate Risk

Generally, interest rates and the prices of debt securities move in opposite
directions. So when interest rates fall, the prices of most debt securities
rise; when interest rates rise, prices fall. Because the funds invest primarily
in debt securities, changes in interest rates will affect the funds'
performance.

The degree to which interest rate changes affect the funds' performance varies
and is related to the weighted average maturity of the fund. For example, when
interest rates rise, you can expect the share value of a long-term bond fund to
fall more than that of a short-term bond fund. When rates fall, the opposite is
true. This sensitivity to interest rate changes is called interest rate risk.

***********LEFT MARGIN CALLOUTS

* Weighted average maturity is a tool that the advisor uses to approximate
the remaining maturity of a fund's investment portfolio.

* The longer a fund's weighted average maturity, the more sensitive it is to
changes in interest rates.

***********END LEFT MARGIN CALLOUTS

The following table shows the effect of a 1% increase in interest rates on the
price of 7% coupon bonds of differing maturities:

Remaining Maturity Current Price Price after 1% Change in price
increase
- ------------------- ------------------ ------------------- ---------------------
1 year $100.00 $99.06 -0.94%
3 years 100.00 97.38 -2.62%
10 years 100.00 93.20 -6.80%
30 years 100.00 88.69 -11.31%

Credit Risk

Credit risk is the risk that an obligation won't be paid and a loss will result.
A high credit rating indicates a high degree of confidence by the ratings
organization that the issuer will be able to withstand adverse business,
financial or economic conditions and be able to make interest and principal
payments on time. Generally, a lower credit rating indicates a greater risk of
nonpayment. A lower rating may also indicate that the issuer has a more senior
series of debt securities, which means that if the issuer has difficulties
making its payments, the more senior series of debt is first in line for
payment.

It's not as simple as buying the highest rated debt securities, though. Higher
credit ratings usually mean lower interest rates, so investors often purchase
securities that aren't the highest-rated to increase return. If a fund purchases
lower-rated securities, it assumes additional credit risk.

The following chart shows the authorized credit quality ranges for the funds
offered by this Prospectus.

<TABLE>
- -------------------------------------------------- -----------------------------------------------------------------------
INVESTMENT GRADE NON-INVESTMENT GRADE
- -------------------------------------------------- -----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
A-1 A-2 A-3
P-1 P-2 P-3
MIG-1 MIG-2 MIG-3
SP-1 SP-2 SP-3
AAA AA A BBB BB B CCC CC C D
- -------------------------------------------------- -----------------------------------------------------------------------
Limited-Term Bond
- --------------------------------------------------------------
Intermediate-Term Bond
- --------------------------------------------------------------
Bond
- -------------------------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
</TABLE>

Securities rated in one of the highest four categories by a nationally
recognized securities rating organization (e.g., Moody's or Standard & Poor's)
are considered "investment grade." Although they are considered investment
grade, an investment in these securities still involves some credit risk since a
AAA rating is not a guarantee of payment. For a complete description of the
ratings system, see "EXPLANATION OF FIXED INCOME SECURITIES RATINGS" in the
Statement of Additional Information.

Liquidity Risk

Debt securities can become difficult to sell for a variety of reasons, such as
lack of an active trading market. When a fund's investments become difficult to
sell, it is said to have a problem with liquidity. The chance that a fund will
have liquidity issues is called liquidity risk.

Inflation Risk

The safest investments usually have the lowest potential income and performance.
There is a risk, then, that returns from the investment may fail to
significantly outpace inflation. Even if the value of your investment has not
gone down, your money will not be worth as much as if there had been no
inflation. Your after-inflation return may be quite small. This risk is called
inflation risk.

**********LEFT MARGIN CALLOUTS

* Credit quality may be lower when the issuer has
o a high debt level
o a short operating history
o a senior level of debt
o a difficult competitive environment

* The Statement of Additional Information provides a detailed description of
these securities ratings.

**********END LEFT MARGIN CALLOUTS

A Comparison of Basic Risk Factors

The following chart depicts the basic risks of investing in the funds. It is
designed to help you compare these funds with each other; it shouldn't be used
to compare these funds with other mutual funds.

<TABLE>
Interest Rate Risk Credit Risk Liquidity Risk Inflation Risk
- ------------------------------ -------------------- -------------- ---------------- -----------------
<S> <C> <C> <C> <C>
Limited-Term Bond Low Similar Similar High
Intermediate-Term Bond Medium Similar Similar Medium
Bond High Similar Similar Low
</TABLE>

The funds engage in a variety of investment techniques as they pursue their
investment objectives. Each technique has its own characteristics, and may pose
some level of risk to the funds. If you would like to learn more about these
techniques, you should review the Statement of Additional Information before
making an investment.

Management

Who manages the funds?

The Board of Directors, investment advisor and fund management team play key
roles in the management of the funds.

The Board of Directors

The Board of Directors oversees the management of the funds and meets at least
quarterly to review reports about fund operations. Although the Board of
Directors does not manage the funds, it has hired an investment advisor to do
so. More than half of the directors are independent of the funds' advisor, that
is, they are not employed by and have no financial interest in the advisor.

The Investment Advisor

For the services it provided to the funds during their most recent fiscal year,
the advisor received a unified management fee based on a percentage of the
average net assets of each fund. The of the management fee for a fund is
calculated daily and paid monthly. Out of that fee, the advisor paid all
expenses of managing and operating the fund except brokerage expenses, taxes,
interest, fees and expenses of the independent directors (including legal
counsel fees) and extraordinary expenses.

Fees Paid by the Funds to the Advisor for the Most Recent Fiscal Year Ended
October 31, 1998
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------ -----------
Limited-Term Bond 0.70%
Intermediate-Term Bond 0.75%
Bond 0.80%

The Fund Management Team

Portfolio Manager members of the investment team are identified below:

Norman E. Hoops
Mr. Hoops, Senior Vice President and Portfolio Manager, has been a member of the
team that manages the funds since the fund's inception in March 1994. He joined
American Century as Vice President and Portfolio Manager in November 1989. In
April 1993, he became Senior Vice President. He has a bachelor of arts from
Indiana University and an MBA from Butler University.

Jeffrey L. Houston
Mr. Houston, Portfolio Manager, has been a member of the team that manages the
funds since June 1995. He joined American Century as an Investment Analyst in
1990 and was promoted to Portfolio Manager in 1994. He has a bachelor of arts
from the University of Delaware and an MPA from Syracuse University. He is a
Chartered Financial Analyst.

**********LEFT MARGIN CALLOUTS

* Code of Ethics

American Century has a Code of Ethics designed to ensure that the interests
of fund shareholders come before the interests of the people who manage the
funds. Among other provisions, the Code of Ethics prohibits portfolio
managers and other investment personnel from buying securities in an
initial public offering or from profiting from the purchase and sale of the
same security within 60 calendar days. In addition, the Code of Ethics
requires portfolio managers and other employees with access to information
about the purchase or sale of securities by the funds to obtain approval
before executing permitted personal trades.

**********END LEFT MARGIN CALLOUTS

Fundamental Investment Policies

Fundamental investment policies contained in the Statement of Additional
Information and the investment objectives of the funds may not be changed
without a shareholder vote. The Board of Trustees may change any other policies
and investment strategies.

Year 2000 Issues

How to Invest in American Century

Services Automatically Available to You

You automatically will have access to the services listed below when you open
your account. If you do not want these services, see "Conducting Business in
Writing" below.

Conducting Business in Writing

Exchange shares
Exchange shares from another American Century
account.

A Note About Mailings to Shareholders

Your Guide to Services and Policies

When you open an account, you will receive an Investor Services Guide, which
explains the services available to you and the policies of the fund and the
transfer agent.

4500 Main Street 4917 Town Center Dr.
Kansas City, Missouri Leawood, Kansas

1665 Charleston Road 2000 S. Colorado Blvd.
Mountain View, California Denver, Colorado
</TABLE>

Minimum Initial Investment Amounts

To open an account the minimum investments are as follows for:
- --------------------------------------------------------------------------------
Individual or Joint $5,000
Traditional IRA $1,000
Roth IRA $1,000
Education IRA $500
UGMA/UTMA $1,000
403(b) No minimum

Redemption of shares in low-balance accounts

Investing Through Financial Intermediaries

o minimum investment requirements
o exchange policies
o fund choices
o cut-off time for investments

**********LEFT MARGIN CALLOUTS

* Financial intermediaries include banks, broker-dealers, insurance companies
and investment advisors.

**********END LEFT MARGIN CALLOUTS

Share Price and Distributions

Share Price

If current prices of securities owned by a fund are not readily available from
an independent pricing service, the advisor may determine their fair value in
accordance with procedures adopted by the fund's Board of Trustees. Trading of
securities in foreign markets may not take place on every day the Exchange is
open. Also, trading in some foreign markets may take place on weekends or
holidays when a fund's net asset value is not calculated. So, the value of a
fund's portfolio may be affected on days when you can't purchase or redeem
shares of the fund.

We will price your purchase, exchange or redemption at the net asset value next
determined after we receive your transaction request in good order.

Distributions

You will begin to participate in fund distributions the day after your purchase
is effective. If you redeem shares, you will receive the distribution declared
for the day you redeem. If you redeem all shares, we will include the
distribution on the redeemed with your redemption proceeds.

**********LEFT MARGIN CALLOUTS

The net asset value of a fund is the price of the fund's shares.

Capital gains is the increase in value of a capital asset, such as stock, from
the time it is purchased. Tax becomes due on capital gains once the asset is
sold.

**********END LEFT MARGIN CALLOUTS

Taxes

Tax-Deferred Accounts

Taxable Accounts

If you own fund shares through a taxable account, distributions by the fund and
sales by you of fund shares may cause you to be taxed.

Taxability of Distributions

<TABLE>
Type of distribution Tax rate for 15% bracket Tax rate for 28% bracket or above
- ----------------------------- ------------------------------------ ---------------------------------------
<S> <C> <C>
Short-term capital gains Ordinary income rate Ordinary income rate
Long-term capital gains 10% 20%
</TABLE>

Distributions may also be subject to state and local taxes. Because everyone's
tax situation is unique, always consult your tax professional about federal,
state and local tax consequences.

Taxes on transactions

**********LEFT MARGIN CALLOUTS

* Buying a Dividend

Purchasing fund shares in a taxable account shortly before a distribution
is sometimes known as "buying a dividend." In taxable accounts, you must
pay income taxes on the distribution whether you take the distribution in
cash or reinvest it. In addition, you will have to pay taxes on the
distribution whether the value of your investment decreased, increased or
remained the same after you bought the fund shares. The risk in buying a
dividend is that a fund's portfolio may build up taxable gains throughout
the period covered by a distribution, as securities are sold at a profit.
We distribute those gains to you, after subtracting any losses, even if you
did not own the shares when the gains occurred. Thus if you buy a dividend,
you incur the full tax liability of the distribution period, but you may
not enjoy the full benefit of the gains realized in the fund's portfolio.

**********END LEFT MARGIN CALLOUTS

Financial Highlights

Understanding the Financial Highlights

This table itemizes what contributed to the changes in share price during the
period, and compares this to changes over the last five fiscal years (or less,
if the share class is not five years old).

On a per-share basis, it includes:

o share price at the beginning of the period
o investment income and capital gains or losses
o distributions of income and capital gains paid to shareholders
o share price at the end of the period

It also includes some key statistics for the period:

o Total Return--the overall percentage of return of the fund, assuming the
reinvestment of all distributions

o Expense Ratio--operating expenses as a percentage of average net assets

o Net Income Ratio--net investment income as a percentage of average net
assets

o Portfolio Turnover--the percentage of the fund's buying and selling
activity

<TABLE>
<CAPTION>
Limited-Term Bond
1998 1997 1996 1995 1994
PER-SHARE DATA
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year.........
------------- -------------- ------------- ------------- --------------
Income from Investment Operations
Net Investment Income (dividends).......
Net Realized and Unrealized Gain (Loss) on
Investment Transactions.................
------------- -------------- ------------- ------------- --------------
Total From Investment Operations........
------------- -------------- ------------- ------------- --------------
Less Distributions
From Net Investment Income (dividends)..
------------- -------------- ------------- ------------- --------------
------------- -------------- ------------- ------------- --------------
Net Asset Value, End of Year...............
------------- -------------- ------------- ------------- --------------
Total Return(1)............................

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses to
Average Net Assets .....................
Ratio of Net Investment Income to
Average Net Assets .....................
Net Assets, End of Year (in thousands).....

(1) Total return assumes reinvestment of dividends and capital gains, if any.
</TABLE>

<TABLE>
<CAPTION>
Intermediate-Term Bond

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses to
Average Net Assets .....................
Ratio of Net Investment Income to
Average Net Assets .....................
Net Assets, End of Year (in thousands).....

(1) Total return assumes reinvestment of dividends and capital gains, if any.
</TABLE>

<TABLE>
<CAPTION>
American Century Bond

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses to
Average Net Assets .....................
Ratio of Net Investment Income to
Average Net Assets .....................
Net Assets, End of Year (in thousands).....

(1) Total return assumes reinvestment of dividends and capital gains, if any.
</TABLE>

At Your Service

Make virtually any transaction online

Expand your investment options with American Century Brokerage

Send your distributions straight to the bank

Check out our library

More information about the funds is contained in these documents:

You also can get information about the funds (including the SAI) from the SEC.

v In person. SEC Public Reference Room
Washington, D.C.
Call 1-800-SEC-0330 for location and hours.

v On the internet. www.sec.gov.

v By mail. Public Reference Section
Washington, D.C.
20549-6009
The SEC will charge a fee for copying the documents
you request.

American Century Investments
P.O. Box 419200
Kansas City, Missouri 64141-6200

Investor Services
1-800-345-2021 or 816-531-5575

Automated Information Line
1-800-345-8765

Fax
816-340-7962

www.americancentury.com

Telecommunications Device for the Deaf
1-800-634-4113 or 816-444-3485

Corporate, Not-for-Profit, Keogh,
SEP-, SARSEP-, SIMPLE-IRA and 403(b) Services
1-800-345-3533

Investment Company Act File No. 811-0816
<PAGE>
[american century logo(reg.sm)]
American
Century

Prospectus

January 29, 1999
- --------------------------------------------------------------------------------

AMERICAN CENTURY

Balanced

Investor Class

The Securities and Exchange Commission has not approved or disapproved these
securities or determined if this Prospectus is accurate or complete. Anyone who
tells you otherwise is committing a crime.

Distributed by Funds Distributor, Inc.

Here's what you'll find:

o The fund's primary investments and risks

o A description of who may or may not want to invest in the fund

o Fund performance, including returns for each year, best and worst quarters
and average annual returns compared to the fund's benchmarks

o An overview of ways to best manage your accounts

o Helpful tips and definitions of key investment terms

Sincerely,

Mark Killen
Senior Vice President
American Century Investment Services, Inc.

Table of Contents

An Overview of the Fund.............................................2

Fees and Expenses...................................................3

Detailed Information about the Fund.................................4

Management.........................................................15

Investing with American Century....................................18

Share Price and Distributions......................................21

Taxes..............................................................22

Multiple Class Information.........................................22

Financial Highlights...............................................23

At Your Service....................................................XX

Fund Reference

Fund Code Ticker Newspaper Listing
- -------------------------------------------------------------------------------
Balanced 031 TWBIX Balanced
- -------------------------------------------------------------------------------

**********LEFT MARGIN CALLOUTS

Throughout this book you'll find definitions of key investment terms and
phrases. When you see a word printed in green italics, look for its definition
in the left margin.

*........This symbol highlights special information and helpful tips.

**********END LEFT MARGIN CALLOUTS

An Overview of the Fund

What is the fund's investment goal?

This fund seeks long-term capital growth and current income by investing
approximately 60% of the fund's assets in equity securities, while the remainder
is invested in bonds and other fixed income securities.

What is the fund's primary investment strategy?

In selecting stocks for the equity portion of Balanced, the advisor selects
primarily from the largest 1500 publicly traded U.S. companies. The fixed-income
portion of the fund is invested in a diversified portfolio of high-grade
securities. A more detailed description of the fund's investment strategy begins
on page XX

What are the fund's principal risks?

o Market Risk the value of the fund's shares will go up and down based on
the performance of the companies whose securities it owns
and other factors affecting the securities market generally.

oInterest Rate Risk when interest rates change, the value of the fund's
fixed-income securities will be affected.

o Principal Loss as with all mutual funds, if you sell your shares when their
value is less than the price you paid, you will lose money.

Who may want to invest in the fund?

The fund may be a good investment if you are

0 seeking a fund that combines the potential for long-term capital growth
with income

0 seeking the convenience of a fund that invests in both equity and
fixed-income securities

0 comfortable with the risks associated with the fund's investment strategy

0 investing through an IRA or other tax-advantaged retirement plan

Who may not want to invest in the fund?

The fund may not be a good investment if you

0 do not want current income from your investment

0 investing for a short period of time

0 uncomfortable with volatility in the value of your investment

**********LEFT MARGIN CALLOUTS

* An investment in the fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
government agency.

**********END LEFT MARGIN CALLOUTS

Fees and Expenses

There are no sales loads or fees or other charges

0 to buy fund shares directly from American Century

0 to reinvest dividends in additional shares

0 to exchange into the Investor Class shares of other American Century funds.

The following tables describe the fees and expenses that you may pay if you buy
and hold shares of the fund.

<TABLE>
Annual Operating Expenses (expenses that are deducted from fund assets)
Management Fee Distribution and Other Total Annual Fund
Service (12b-1) Fees Expenses1 Operating Expenses
- ---------- ---------------- ------------------------ -------------- -----------------------
<S> <C> <C> <C> <C>
Balanced 1.00% None 0.00% 1.00%
- ---------- ---------------- ------------------------ -------------- -----------------------
1 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.
</TABLE>

Example of Hypothetical Fund Costs

The examples in the table below are intended to help you compare the costs of
investing in a fund with those of other mutual funds. Assuming you ...

o invest $10,000 in the fund

o redeem all of your shares at the end of the periods shown below

o earn a 5% return each year and

o incur the same operating expenses shown above

... your cost of investing in the fund would be:
1 Year 3 Years 5 Years 10 Years
- ----------- --------------- ---------------- ---------------- ----------------
Balanced $102 $318 $551 $1,219
- ----------- --------------- ---------------- ---------------- ----------------

**********LEFT MARGIN CALLOUTS

* Use this example to compare the costs of investing in other funds. Of course,
your actual costs may be higher or lower.

**********END LEFT MARGIN CALLOUTS

Detailed Information about the Fund

Balanced

What is the fund's investment objective?

The fund seeks long-term capital growth and current income by investing
approximately 60% of the fund's assets in equity securities, while the remainder
is invested in bonds and other fixed income securities. This is a fundamental
policy and cannot be changed without shareholder approval.

How does the fund pursue its investment objective?

With the equity portion of the Balanced portfolio, the fund managers utilize
quantitative management techniques in a two-step process that draws heavily on
computer technology. In the first step, the fund managers rank stocks, primarily
the 1,500 largest publicly traded companies in the United States (measured by
the value of their stock). These rankings are determined by using a computer
model that combines measures of a stock's value, as well as measures of its
growth potential. To measure value, the manager uses ratios of stock price to
book value and stock price to cash flow, among others. To measure growth, the
managers use, among others, the rate of growth of a company's earnings and
changes in its earnings estimates.

In the second step, the managers use a technique called portfolio optimization.
In portfolio optimization, the manager uses a computer to build a portfolio of
stocks from the ranking described earlier that it thinks will provide the
optimal balance between risk and expected return. The goal is to create an
equity portfolio that provides better returns than the S&P 500 without taking on
significant additional risk.

The fixed-income portion of the fund's portfolio is invested primarily in a
diversified portfolio of high-grade government, corporate, asset-backed and
similar securities payable in U.S. currency, with a minimum of 25% of the fund's
assets in fixed-income senior securities. At least 80% of the fixed-income
assets will be invested in securities that, at the time of purchase, are rated
within the three highest categories by a nationally recognized statistical
rating organization. Up to 20% of the fixed income portion may be invested in
the fourth category rated securities, and up to 15% may be invested in the fifth
category. Under normal market conditions the weighted average maturity for the
fixed-income portfolio will be in the three- to 10-year range.

The fund managers do not attempt to time the market. Instead, they intend to
keep the fund essentially fully invested in stocks regardless of the movement of
stock prices generally. When the fund managers believe that it is prudent, the
fund may invest a portion of its assets in convertible securities, foreign
securities, short-term securities, non-leveraged stock index futures contracts
and other similar securities. Stock index futures contracts, a type of
derivative security, can help the fund's cash assets remain liquid while
performing more like stocks. The fund has a policy governing stock index futures
and similar derivative securities to help manage the risk of these types of
investments. For example, the fund managers cannot leverage the fund's assets by
investing in a derivative security. A complete description of the derivatives
policy is included in the Statement of Additional Information.

**********LEFT MARGIN CALLOUTS

Senior Securities is a term that refers to the bonds of a company that are first
in line for payment if it has difficulties meeting its payment obligations. As
long as a series of a company's bonds is not subordinated to another series of
the company's bonds, it is considered "senior" debt.

Weighted average maturity is a tool that the advisor uses to approximate the
remaining maturity of a fund's investment portfolio. Generally, the longer a
fund's weighted average maturity, the more sensitive it is to changes in
interest rates.

**********END LEFT MARGIN CALLOUTS

Additional information about Balanced'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 six-month period. You may get these
reports at no cost by calling us.

**********LEFT MARGIN CALLOUTS

* Fixed-income securities are rated by nationally recognized securities
ratings organizations (SROs), such as Moody's and Standard & Poor's. Each
SRO has its own system for classifying securities, but each tries to
indicate a company's ability to make timely payments of interest and
principal. A detailed description of SROs, their ratings system and what we
do if a security isn't rated is included in the Statement of Additional
Information.

**********END LEFT MARGIN CALLOUTS

What are the primary risks of investing in the fund?

The value of Balanced's shares depends on the value of the stocks, bonds and
other securities it owns.

o The value of the individual equity securities Balanced owns will go up and
down depending on the performance of the companies that issued them,
general market and economic conditions, and investor confidence.

o The value of the fund's fixed-income securities will be affected primarily
by rising or falling interest rates and the continued ability of the
issuers of these securities to make payments of interest and principal as
they become due.

Generally, when interest rates rise, the value of the fund's fixed-income
securities will decline. The opposite is true when interest rates decline. The
interest rate risk for Balanced is higher than for funds that have a shorter
weighted average maturity, such as money market and short-term bond funds.

The lowest rated bonds in which the fund may invest, BBB- and BB-rated bonds,
contain some speculative characteristics. Having these bonds in the fund's
portfolio means the fund's value may go down more if interest rates or other
economic conditions change than if the fund contained only higher rated bonds.

As with all funds, at any given time, the value of your shares of Balanced 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.

Fund Performance History

The performance information on this page is designed to help you see how fund
returns can vary. Keep in mind that past performance does not predict how the
funds will perform in the future.

Annual Total Returns

The following bar chart shows the performance of the fund's shares for each of
the last 10 calendar years (or for each full year in the life of the fund if
less than 10 years). It indicates the volatility of the fund's historical
returns from year to year.

[GRAPH DEPICTING ANNUAL TOTAL RETURNS FOR BALANCED SINCE INCEPTION; UPDATED
FIGURES NOT AVAILABLE]

Highest and Lowest Quarterly Returns

The highest and lowest returns of the fund's shares for a calendar quarter
during the life of the fund are provided below to indicate the fund's historical
short-term volatility. Shareholders should be aware, however, that the fund is
intended for investors with a long-term investment horizon and are not managed
for short-term results.

[GRAPH DEPICTING HIGHEST AND LOWEST RETURNS FOR BALANCED SINCE INCEPTION;
UPDATED FIGURES NOT AVAILABLE]

Average Annual Returns

The following table shows the average annual returns of the fund's shares for
the periods indicated during the last 10 calendar years. The Blended Index is
included as a benchmark for performance comparison. The benchmark is an
unmanaged index that has no operating costs.

1 year 5 years 10 years
- -------------------------------------------------------------------------------
Balanced XXX% XXX% XX.X%
Blended Index* XXX% XXX% XX.X%
- -------------------------------------------------------------------------------

* The Blended Index is a combination of two widely known indices in proportion
to the approximate asset mix of the fund. Accordingly, 60% of the Blended
Index consists of the performance of the S&P 500, which represents the equity
portion of the fund, and 40% of the Blended Index consists of the Lehman
Intermediate Government/Corporate Index, which represents the fixed income
portion.

**********LEFT MARGIN CALLOUTS

The fund's total return for the period from January 1, 1998, to September 30,
1998, is:

Balanced X.XX%

* For current performance information, please call us at 1-800-345-2021 or
visit American Century's Web site at www.americancentury.com.

**********END LEFT MARGIN CALLOUTS

Management

Who manages the fund?

The Board of Directors, investment advisor and portfolio management team play
key roles in the management of the fund.

The Board of Directors

The Board of Directors oversees the management of the fund and meets at least
quarterly to review reports about fund operations. Although the Board of
Directors does not manage the fund, it has hired an investment advisor to do so.
More than half of the Directors are independent of the fund's advisor, that is,
they are not employed by and have no financial interest in the advisor.

The Investment Advisor

The fund's investment advisor is American Century Investment Management, Inc.
The advisor has been managing mutual funds since 1958. American Century is
headquartered at 4500 Main Street, Kansas City, Missouri 64111.

The advisor is responsible for managing the investment portfolios of the fund
and directing the purchase and sale of its investment securities. The advisor
also arranges for transfer agency, custody and all other services necessary for
the fund to operate.

For the services it provided to the fund during its most recent fiscal year, the
advisor received a unified management fee of 1.0% the average net assets of the
fund. The amount of the management fee is calculated daily and paid monthly. Out
of that fee, the advisor pays all expenses of managing and operating the fund
except brokerage expenses, taxes, interest, fees and expenses of the independent
Directors (including legal fees) and extraordinary expenses.

The Fund Management Team

The advisor uses teams of portfolio managers, assistant portfolio managers and
analysts to manage the fund. Teams meet regularly to review portfolio holdings
and to discuss purchase and sale activity. Team members buy and sell securities
for a fund as they see fit, guided by the fund's investment objective and
strategy.

Portfolio manager members of the investment team are identified below:

Norman E. Hoops

Norman E. Hoops, Senior Vice President and Portfolio Manager, has been a member
of the team that manages Balanced since November 1989. He joined American
Century as Vice President and Portfolio Manager in November 1989. In April 1993,
he became Senior Vice President. He has a bachelor of arts degree from Indiana
University and an MBA from Butler University.

John Schniedwind

John Schniedwind, Senior Vice President and Group Leader-Quantitative Equity,
has been a member of the team that manages Balanced since November 1998. He
joined American Century in 1982 and also supervises other portfolio management
teams. He has a bachelor of science degree from Purdue University and an MBA in
finance from University of California. He is a Chartered Financial Analyst.

Jeffrey R. Tyler

Jeffrey R. Tyler, Senior Vice President and Portfolio Manager, has been a member
of the team that manages Balanced since November 1998. He has been with American
Century as a portfolio manager since January 1988. He has a bachelor's degree in
business economics from the University of California and an MBA in finance and
economics from Northwestern University. He is a Chartered Financial Analyst.

Jeffrey L. Houston

Jeffrey L. Houston, Portfolio Manager, has been a member of the team that
manages Balanced since June 1995. He joined American Century as an Investment
Analyst in November 1990 and was promoted to Portfolio Manager in 1994. He has a
bachelor of arts degree from the University of Delaware and an MPA from Syracuse
University. He is a Chartered Financial Analyst.

**********LEFT MARGIN CALLOUTS

* Code of Ethics

American Century has a Code of Ethics designed to ensure that the interests
of fund shareholders come before the interests of the people who manage the
fund. Among other provisions, the Code of Ethics prohibits portfolio
managers and other investment personnel from buying securities in an
initial public offering or from profiting from the purchase and sale of the
same security within 60 calendar days. In addition, the Code of Ethics
requires portfolio managers and other employees with access to information
about the purchase or sale of securities by the funds to obtain approval
before executing permitted personal trades.

**********END LEFT MARGIN CALLOUTS

Fundamental Investment Policies

Fundamental investment policies contained in the Statement of Additional
Information and the investment objectives of the fund may not be changed without
a shareholder vote. The Board of Directors may change any other policies and
investment strategies.

Year 2000 Issues

Many of the world's computer systems currently cannot properly recognize or
process date-sensitive information relating to the Year 2000 and beyond. Because
this may impact the computer systems of various American Century-affiliated and
external service providers for the fund, American Century formally initiated a
Year 2000 readiness project in July 1997. It involves a team of information
technology professionals assisted by outside consultants and guided by a
senior-level steering committee. The team's goal is to assess the impact of the
Year 2000 on American Century's systems, renovate or replace noncompliant
critical systems and test those systems. In addition, the team has been working
to gather information about the Year 2000 efforts of the fund's other major
service providers. Although American Century believes its critical systems will
function properly in the Year 2000, this is not guaranteed. If the efforts of
American Century or its external service providers are not successful, the
fund's business, particularly the provision of shareholder services, may be
hampered.

In addition, the issuers of securities the fund owns could have Year 2000
computer problems. These problems could negatively affect the value of their
securities, which, in turn, could impact the fund's performance. The advisor has
established a process to gather publicly available information about the Year
2000 readiness of these issuers. However, this process may not uncover all
relevant information, and the information gathered may not be complete and
accurate. Moreover, an issuer's Year 2000 readiness is only one of many factors
the fund managers may consider when making investment decisions, and other
factors may receive greater weight.

How to Invest in American Century

Services Automatically Available to You

You automatically will have access to the services listed below when you open
your account. If you do not want these services, see "Conducting Business in
Writing" below.

Conducting Business in Writing

Exchange shares
Exchange shares from another American Century
account.

A Note About Mailings to Shareholders

Your Guide to Services and Policies

When you open an account, you will receive an Investor Services Guide, which
explains the services available to you and the policies of the fund and the
transfer agent.

4500 Main Street 4917 Town Center Dr.
Kansas City, Missouri Leawood, Kansas

1665 Charleston Road 2000 S. Colorado Blvd.
Mountain View, California Denver, Colorado
</TABLE>

Minimum Initial Investment Amounts

To open an account the minimum investments are as follows for:
- --------------------------------------------------------------------------------
Individual or Joint $2,500
Traditional IRA $1,000
Roth IRA $1,000
Education IRA $500
UGMA/UTMA $1,000
403(b) No minimum

Redemption of shares in low-balance accounts

Special requirements for large redemptions

The fund has elected to be governed by Rule 18f-1 under the Investment Company
Act, which obligates each fund to make certain redemptions in cash. This
requirement applies when a shareholder redeems, during any 90-day period, up to
the lesser of $250,000 or 1% of the assets of the fund. Although we normally
will pay redemptions in excess of this limitation in cash, American Century
reserves the right under unusual circumstances to honor these redemptions in
kind by making payment in whole or in part in readily marketable securities.

Investing Through Financial Intermediaries

o minimum investment requirements
o exchange policies
o fund choices
o cut-off time for investments

Share Price and Distributions

Share Price

We determine the net asset value of the fund as of the close of regular trading
on the New York Stock Exchange (usually 4 p.m. Eastern time) on each day the
Exchange is open. On days when the Exchange is not open, we do not calculate the
net asset value. The net asset value of the fund share is the current value of
its investments, minus any liabilities, divided by the number of fund shares
outstanding.

If current prices of securities owned by a fund are not readily available from
an independent pricing service, the advisor may determine their fair value in
accordance with procedures adopted by the fund's Board of Directors. Trading of
securities in foreign markets may not take place on every day the Exchange is
open. Also, trading in some foreign markets may take place on weekends or
holidays when the fund's net asset value is not calculated. So, the value of the
fund's portfolio may be affected on days when you can't purchase or redeem its
shares.

We will price your purchase, exchange or redemption at the net asset value next
determined after we receive your transaction request in good order.

Distributions

Federal tax laws require the fund make distributions to its shareholders in
order to qualify as a "regulated investment company." Qualification as a
regulated investment company means that the fund will not be subject to state or
federal income tax on amounts distributed. The distributions generally consist
of dividends and interest received, as well as capital gains realized on the
sale of investment securities. The fund pays distributions from net income
monthly. The fund generally pays distributions of capital gains, if any, once a
year in December. The fund may make more frequent distributions if necessary to
comply with Internal Revenue Code provisions.

**********LEFT MARGIN CALLOUTS

The "net asset value" of the fund is the price of its shares.

"Capital gains" is the increase in value of a capital asset, such as stock, from
the time it is purchased. Tax becomes due on capital gains once the asset is
sold.

**********END LEFT MARGIN CALLOUTS

Taxes

The tax consequences of owning shares of the fund will vary depending on whether
you own them through a taxable or tax-deferred account. Tax consequences result
from distributions by the fund of dividend and interest income it has received
and capital gains it has generated through its investment activities, and by
sales of fund shares by investors after the net asset value has increased or
decreased.

Tax-Deferred Accounts

Taxable Accounts

If you own fund shares through a taxable account, distributions by the fund and
sales by you of fund shares may cause you to be taxed.

Taxability of Distributions

Distributions may consist of income earned by the fund from sources such as
dividends and interest, or capital gains generated from the sale of fund
investments. Distributions of income are taxed as ordinary income. Distribution
of capital gains are classified either as short-term or long-term and are taxed
as follows:

<TABLE>
Type of distribution Tax rate for 15% bracket Tax rate for 28% bracket or above
- ------------------------- --------------------------- -----------------------------------------
<S> <C> <C>
Short-term capital gains Ordinary income rate Ordinary income rate
Long-term capital gains 10% 20%
</TABLE>

The tax status of any distribution of capital gains is determined by how long
the fund held the underlying security that was sold, not by how long you have
been invested in the fund or whether you reinvest your distributions in
additional shares or take them as income. American Century will send you a
detail of the tax status of fund distributions for each calendar year in an
annual tax statement from the fund.

Distributions may also be subject to state and local taxes. Because everyone's
tax situation is unique, always consult your tax professional about federal,
state and local tax consequences.

Taxes on Transactions

Your redemptions -- including exchanges to other American Century funds -- are
subject to capital gains tax. The table above can provide a general guide for
your potential tax liability when selling or exchanging fund shares. "Short-term
capital gains" are gains on fund shares held less than or equal to 12 months.
"Long-term capital gains" are gains on fund shares held for more than 12 months.
If your shares decrease in value, their sale or exchange will result in a
long-term or short-term capital loss.

**********LEFT MARGIN CALLOUTS

* Buying a Dividend

**********END LEFT MARGIN CALLOUTS

Multiple Class Information

American Century offers three classes of the fund: Investor Class, Institutional
Class and Advisor Class. The shares offered by this Prospectus are Investor
Class shares and have no up-front or deferred charges, commissions, or 12b-1
fees.

Financial Highlights

Understanding the Financial Highlights

This table itemizes what contributed to the changes in share price during the
period, and compares this to changes over the last five fiscal years (or less,
if the share class is not five years old).

On a per-share basis, it includes:

o share price at the beginning of the period
o investment income and capital gains or losses
o distributions of income and capital gains paid to shareholders
o share price at the end of the period

It also includes some key statistics for the period:

o Total Return--the overall percentage of return of the fund, assuming the
reinvestment of all distributions

o Expense Ratio--operating expenses as a percentage of average net assets

o Net Income Ratio--net investment income as a percentage of average net
assets

o Portfolio Turnover--the percentage of the fund's buying and selling
activity

The Financial Highlights for the fiscal years ended October 31, 1997 and 1998,
have been audited by Deloitte & Touche LLP, independent auditors. Their report
is in the fund's annual report, which is incorporated by reference into the
Statement of Additional Information, and is available upon request. Prior years'
information was audited by other independent auditors whose report thereon also
is incorporated by reference into the Statement of Additional Information.

<TABLE>
<CAPTION>
Balanced

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses to
Average Net Assets .....................
Ratio of Net Investment Income to
Average Net Assets .....................
Net Assets, End of Year (in thousands).....

(1) Total return assumes reinvestment of dividends and capital gains, if any.
</TABLE>

At Your Service

Make virtually any transaction online

Expand your investment options with American Century Brokerage

Send your distributions straight to the bank

Check out our library

More information about the funds is contained in these documents:

You also can get information about the funds (including the SAI) from the SEC.

v In person. SEC Public Reference Room
Washington, D.C.
Call 1-800-SEC-0330 for location and hours.

v On the internet. www.sec.gov.

v By mail. Public Reference Section
Washington, D.C.
20549-6009
The SEC will charge a fee for copying the documents
you request.

American Century Investments
P.O. Box 419200
Kansas City, Missouri 64141-6200

Investor Services
1-800-345-2021 or 816-531-5575

Automated Information Line
1-800-345-8765

Fax
816-340-7962

www.americancentury.com

Telecommunications Device for the Deaf
1-800-634-4113 or 816-444-3485

Corporate, Not-for-Profit, Keogh,
SEP-, SARSEP-, SIMPLE-IRA and 403(b) Services
1-800-345-3533

Investment Company Act File No. 811-0816
<PAGE>
[american century logo(reg.sm)]
American
Century

Prospectus

January 29, 1999
- --------------------------------------------------------------------------------

AMERICAN CENTURY

Giftrust

Investor Class

The Securities and Exchange Commission has not approved or disapproved these
securities or determined if this Prospectus is accurate or complete. Anyone who
tells you otherwise is committing a crime.

Distributed by Funds Distributor, Inc.

Here's what you'll find:

o The fund's primary investments and risks

o A description of who may or may not want to invest in the fund

o Fund performance, including returns for each year, best and worst quarters
and average annual returns compared to the fund's benchmarks

o An overview of ways to best manage your accounts

o Helpful tips and definitions of key investment terms

Sincerely,

Mark Killen
Senior Vice President
American Century Investment Services, Inc.

Table of Contents

An Overview of the Fund......................................................2

Fees and Expenses............................................................3

Detailed Information about the Fund..........................................4

Management..................................................................15

How to Open and Make Additional Investments in a Giftrust Account...........18

Managing the Account of a Matured Giftrust..................................19

Share Price and Distributions...............................................21

Taxes.......................................................................22

Financial Highlights........................................................XX

At Your Service.............................................................XX

Fund Reference
Fund Code Ticker Newspaper Listing
- --------------------------------------------------------------------------------
Giftrust 025 TWGTX Gift
- --------------------------------------------------------------------------------

**********LEFT MARGIN CALLOUTS

Throughout this book you'll find definitions of key investment terms and
phrases. When you see a word printed in green italics, look for its definition
in the left margin.

*........This symbol highlights special information and helpful tips.

**********END LEFT MARGIN CALLOUTS

An Overview of the Fund

What is the fund's investment goal?

This fund seeks long-term capital growth.

What are the fund's primary investment strategies and principal risks?

The fund looks for common stocks of growing, small- to medium-sized companies.
The basis of the strategy used by this fund is that, over the long term, stocks
of companies with earnings and revenue growth have a greater than average chance
to increase in value over time. A more detailed description of American
Century's "growth" investment style begins on page XX.

The fund's principal risks include:

o Market Risk The value of the fund's shares will go up and down based on
the performance of the companies whose securities it owns
and other factors affecting the securities market generally.

o Price Volatility The value of the fund's shares may fluctuate significantly
in the short term.

o Principal Loss As with all mutual funds, if you sell your shares when their
value is less than the price you paid, you will lose money.

Who may want to invest in the fund?

The fund may be a good investment if you are looking for a unique way to give a
gift to a child or another individual. You cannot establish or make investments
in a Giftrust for yourself, your spouse or an entity other than an individual
(such as a corporation, partnership or other profit or nonprofit organization)
as a beneficiary. Instead, you must establish an irrevocable trust using the
Giftrust Agreement that is part of the Giftrust Kit from American Century.

The Giftrust trustee invests your gift in the fund for the benefit of the
beneficiary you name under the Agreement. The shares in a Giftrust are held in
trust until the maturity date you specify. The duration of the trust may be as
long as you wish, but must be at least 10 years from the time you make the first
gift in the Giftrust or until the recipient reaches the age of majority,
whichever is later. The Giftrust is irrevocable. Before the maturity date you
specify, neither you nor the beneficiary may amend the terms of the trust in any
way.

After the maturity of the Giftrust, the beneficiary may continue to own the
Giftrust shares, but may not make additional Giftrust investments, except for
reinvestment of distributions.

Who may not want to invest in the fund?

The fund is not be a good investment if you are

0 uncomfortable giving up control over your gift

0 uncomfortable with the risks associated with the fund's investment
strategy and its short-term volatility

0 seeking an investment that qualifies for the annual Gift Tax
exclusion. See "Taxes" on page XX.

**********LEFT MARGIN CALLOUTS

* An investment in the fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
government agency.

**********END LEFT MARGIN CALLOUTS

Fees and Expenses

There are no sales loads or fees or other charges

0 to establish a Giftrust account

0 to reinvest dividends in additional shares

0 for the beneficiary to exchange into the Investor Class shares of
other American Century funds once the Giftrust has matured

The following tables describe the fees and expenses that a Giftrust may pay
during the life of the trust.

<TABLE>
Annual Fund Operating Expenses (expenses that are deducted from fund assets)
Management Fee Distribution and Service Other Expenses1 Total Annual Fund
(12b-1) Fees Operating Expenses
- -------- ----------------- ------------------------ ------------------- ------------------------
<S> <C> <C> <C> <C>
Giftrust 1.00% None 0.00% 1.00%
- -------- ----------------- ------------------------ ------------------- ------------------------

1 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.
</TABLE>

Example of Hypothetical Fund Costs

The examples in the table below are intended to help you compare the costs of
investing in a fund with those of other mutual funds. Assuming ...

o you establish a $10,000 Giftrust account

o the account earns a 5% return each year and

o the same operating expenses shown above apply each year

... the cost of investing in the fund would be:

1 Year 3 Years 5 Years 10 Years
- --------------- ---------- ----------- ----------- ------------
Giftrust $102 $318 $551 $1,219
- --------------- ---------- ----------- ----------- ------------

Trust Expenses

Each Giftrust account for which the trustee files a tax return will be charged a
$10 fee to help offset a portion of the cost of preparing the return. See
"Taxes" on page XX.

Additionally, each maturing Giftrust account established after March 31, 1996
will be charged a $100 administrative fee to help cover the costs incurred by
the trustee as a result of the Giftrust reaching maturity.

**********LEFT MARGIN CALLOUTS

* Use this example to compare the costs of investing in other funds. Of
course, your actual costs may be higher or lower.

**********END LEFT MARGIN CALLOUTS

Detailed Information about the Fund

Giftrust

What is the fund's investment objective?

The fund seeks long-term capital growth. This is a fundamental policy and cannot
be changed without shareholder approval.

How does the fund pursue its investment objective?

The fund managers look for stocks of small- to medium-sized companies that they
believe will increase in value over time, using a growth investment strategy
developed by American Century. This strategy looks for companies with earnings
and revenues that are not only growing, but growing at a successively faster, or
accelerating, pace. This strategy is based on the premise that, over the long
term, the stocks of companies with accelerating earnings and revenues have a
greater-than-average chance to increase in value.

**********LEFT MARGIN CALLOUTS

* Accelerating growth is shown, for example, by growth that is faster this
quarter than last or faster this year than the year before.

**********END LEFT MARGIN CALLOUTS

The managers use a bottom-up approach to select stocks to buy for the fund. That
means they first look for strong, growing companies to invest in, rather than
simply buying any company in a growing industry or sector. Using American
Century's extensive computer database, the managers track financial information
for thousands of companies to identify trends in the companies' earnings and
revenues. This information is used to help the fund managers select or decide to
continue to hold the stocks of companies they believe will be able to sustain
accelerating growth, and to sell stocks of companies whose growth begins to slow
down.

Although most of the fund's assets will be invested in U.S. companies, there is
no limit on the amount of assets the fund can invest in foreign companies. Most
of the fund's foreign investments are in companies located and doing business in
developed countries. Investments in foreign securities present some unique risks
that are more fully described in the fund's Statement of Additional Information.

The fund managers do not attempt to time the market. Instead, they intend to
keep the fund essentially fully invested in stocks regardless of the movement of
stock prices generally. When the managers believe that it is prudent, the fund
may invest a portion of its assets in convertible securities, foreign
securities, short-term instruments, non-leveraged stock index futures contracts
and other similar securities. Stock index futures contracts, a type of
derivative security, can help the fund's cash assets remain liquid while
performing more like stocks. The fund has a policy governing stock index futures
and similar derivative securities to help manage the risk of these types of
investments. For example, the managers cannot leverage the fund's assets by
investing in a derivative security. A complete description of the derivatives
policy is included in the Statement of Additional Information.

Additional information about the fund'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 six-month period. You may get these
reports at no cost by calling us.

What kinds of securities does the fund buy?

Giftrust will usually purchase common stocks of small- to medium-sized U.S. and
foreign companies, but it can purchase other types of securities, as well.
Companies considered to be small generally have a market capitalization of less
than $1 billion, and medium-sized companies generally have a market
capitalization between $1 billion and $5 billion. The fund also may invest in
domestic and foreign preferred stocks, convertible securities, equity equivalent
securities, notes, bonds and other debt securities. The fund limits its purchase
of debt securities to investment-grade obligations.

**********LEFT MARGIN CALLOUTS

* Market capitalization means the value of a company, as determined by
multiplying the number of shares of stock it has outstanding by the stock's
current market price per share.

**********END LEFT MARGIN CALLOUTS

What are the primary risks of investing in the fund?

o The minimum term of a Giftrust is 10 years. Neither the person establishing
the Giftrust nor the beneficiary of the trust may elect to withdraw the
gift before the expiration of the term of the trust.

o The value of a Giftrust's shares depends on the value of the stocks and
other securities it owns. The value of the individual securities Giftrust
owns will go up and down depending on the performance of the companies that
issued them, general market and economic conditions, and investor
confidence.

o The fund manager may buy a large amount of a company's stock quickly, and
often will dispose of it quickly if the company's earnings or revenues
decline. While the managers believe this strategy provides substantial
appreciation potential over the long term, in the short term it can create
a significant amount of share price volatility. This volatility can be
greater than that of the average stock fund.

o Because Giftrust generally invests in smaller companies than American
Century's similarly managed growth equity funds (such as Growth, Ultra and
Select), it may be more volatile, and subject to greater short-term risk,
than those funds. Smaller companies may have limited financial resources,
product lines and markets, and their securities may trade less frequently
and in more limited volumes than the securities of larger companies. In
addition, smaller companies may have less publicly available information
and, when available, it may be inaccurate or incomplete.

o As with all funds, at any given time, the value of your shares of Giftrust
may be worth more or less than the price you paid.

o Market performance tends to be cyclical, and in the various cycles, certain
investment styles may fall in and out of favor. If the market is not
favoring the fund's style, the fund's gains may not be as big as, or its
losses may be bigger than, other equity funds using different investment
styles.

o Although the fund managers invest the fund's assets primarily in U.S.
stocks, Giftrust can invest in securities of foreign companies. Foreign
securities can have certain unique risks, including fluctuations in
currency exchange rates, unstable political and economic structures,
reduced availability of public information and lack of uniform financial
reporting and regulatory practices similar to those that apply to U.S.
issuers. These factors make investing in foreign securities generally
riskier than investing in U.S. stocks. To the extent the fund invests in
foreign securities, the overall risk of the fund could be affected.

In summary, Giftrust is intended for investors who want to give a gift to
another individual, but want that gift to have the potential to grow over time
(at least 10 years) in a fund that seeks long-term capital growth through an
aggressive equity fund. Investors wanting to make such a gift must be willing to
give up control over the gift forever and accept the risks associated with the
fund's investment strategy.

Fund Performance History

The performance information on this page is designed to help you see how fund
returns can vary. Keep in mind that past performance does not predict how the
fund will perform in the future.

Annual Total Returns

The following bar chart shows the performance of the fund's shares for each of
the last 10 calendar years. It indicates the volatility of the fund's historical
returns from year to year.

[GRAPH DEPICTING ANNUAL TOTAL RETURNS FOR GIFTRUST DURING THE LAST TEN YEARS;
UPDATED FIGURES NOT AVAILABLE]

Highest and Lowest Quarterly Returns

The highest and lowest returns of the fund's shares for a calendar quarter
during the last 10 calendar years are provided below to indicate the fund's
historical short-term volatility. Shareholders should be aware, however, that
trusts investing in Giftrust have a long-term investment horizon and the fund is
not managed for short-term results.

[GRAPH DEPICTING HIGHEST AND LOWEST RETURNS FOR GIFTRUST DURING THE LAST TEN
YEARS; UPDATED FIGURES NOT AVAILABLE]

Average Annual Returns

The following table shows the average annual returns of the fund's shares for
the periods indicated during the last 10 calendar years. The Russell 2000 Growth
Index is included as a benchmark for performance comparison. The benchmark is an
unmanaged index that has no operating costs.

1 year 5 years 10 years
- ------------------------------------------------------------------------
Giftrust XXX% XXX% XXX%
Russell 2000 Growth Index XXX% XXX% XXX%
- ------------------------------------------------------------------------

**********LEFT MARGIN CALLOUTS

The fund's total return for the period from January 1, 1998, to September 30,
1998, is:

Giftrust X.XX%

* For current performance information, please call us at 1-800-345-2021 or
visit American Century's Web site at www.americancentury.com.

**********END LEFT MARGIN CALLOUTS

Management

Who manages the fund?

The Board of Directors, investment advisor and fund management team play key
roles in the management of the fund.

The Board of Directors

The Board of Directors oversees the management of the fund and meets at least
quarterly to review reports about fund operations. Although the Board of
Directors does not manage the fund, it has hired an investment advisor to do so.
More than half of the directors are independent of the fund's advisor, that is,
they are not employed by and have no financial interest in the advisor.

The Investment Advisor

For the services it provided to the fund during its most recent fiscal year, the
advisor received a unified management fee of 1.0% the average net assets of the
fund. The amount of the management fee is calculated daily and paid monthly. Out
of that fee, the advisor paid all expenses of managing and operating the fund
except brokerage expenses, taxes, interest, fees and expenses of the independent
directors (including legal counsel fees) and extraordinary expenses.

The Fund Management Team

Portfolio Manager members of the investment team are identified below:

Christopher K. Boyd

Mr. Boyd, Vice President and Portfolio Manager, has been a member of the team
that manages Giftrust since rejoining American Century in January 1998. With the
exception of 1997, he has been with American Century since March 1988 and served
as a Portfolio Manager since December 1992. During 1997, he was in private
practice as an investment advisor. He has a bachelor of science from the
University of Kansas and an MBA from Dartmouth College. He is a Chartered
Financial Analyst.

John D. Seitzer

Mr. Seitzer, Vice President and Portfolio Manager, has been a member of the team
that manages Giftrust since the fund's inception. He joined American Century in
June 1993 as an Investment Analyst and was promoted to Portfolio Manager in July
1996. He has a B.S. in accounting and finance from Kansas State University and
an MBA in finance from Indiana University. He is a Chartered Financial Analyst
and a Certified Public Accountant.

**********LEFT MARGIN CALLOUTS

* Code of Ethics

**********END LEFT MARGIN CALLOUTS

Fundamental Investment Policies

Year 2000 Issues

Many of the world's computer systems currently cannot properly recognize or
process date-sensitive information relating to the Year 2000 and beyond. Because
this may impact the computer systems of various American Century-affiliated and
external service providers for the fund, American Century formally initiated a
Year 2000 readiness project in July 1997. It involves a team of information
technology professionals assisted by outside consultants and guided by a
senior-level steering committee. The team's goal is to assess the impact of the
Year 2000 on American Century's systems, renovate or replace noncompliant
critical systems and test those systems. In addition, the team has been working
to gather information about the Year 2000 efforts of the fund's other major
service providers. Although American Century believes its critical systems will
function properly in the Year 2000, this is not guaranteed. If the efforts of
American Century or its external service providers are not successful, the
fund's business, particularly the provision of shareholder services, may be
hampered.

In addition, the issuers of securities the funds own could have Year 2000
computer problems. These problems could negatively affect the value of their
securities, which, in turn, could impact the fund's performance. The advisor has
established a process to gather publicly available information about the Year
2000 readiness of these issuers. However, this process may not uncover all
relevant information, and the information gathered may not be complete and
accurate. Moreover, an issuer's Year 2000 readiness is only one of many factors
the fund managers may consider when making investment decisions, and other
factors may receive greater weight.

How to Open and Make Additional Investments in a Giftrust Account

Conducting Business in Writing

You must conduct business in writing on a Giftrust account unless you establish
telephone services. Please remember that the person establishing a Giftrust
account may make additional gifts before it matures, but gives up the right to
sell or exchange shares. If you choose to do business in writing only, you must
provide written instructions to make additional gifts into the Giftrust account.
All account owners must sign transaction instructions (with signatures
guaranteed for redemptions in excess of $100,000). If you want to add services
later, you can complete an Investor Service Options form.

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------- -------------------------------------------- -------------------------------------------------
<S> <C> <C>
By telephone Open an account Make additional gifts
Investor Services The initial Giftrust account must Call us or use our Automated Information Line
1-800-345-2021 be established in writing. Call us if you have authorized us to invest from your
7 a.m. to 7 p.m., Central time for a Giftrust Kit. bank account.

Automated Information Line
1-800-345-8765
24 hours a day
seven days a week
- ---------------------------------- -------------------------------------------- -------------------------------------------------
- ---------------------------------- -------------------------------------------- -------------------------------------------------
By mail or fax Open an account Make additional gifts
PO Box 419200 Send a signed and completed Send your check or money order for at least $50
Kansas City, MO 64141-6200 application, Giftrust Agreement and with an investment slip or $250 without an
check or money order payable to investment slip. If you don't have an
Fax 816-340-7962 American Century Investments. investment slip, include your name, address and
account number on your check or money order.
Exchange shares Send us written instructions
to exchange your shares from another American
Century account into the Giftrust account

o Our bank information
Commerce Bank N.A.
Routing No. 101000019
ACMF Account No. 2804918
o The fund name
o Your American Century account number
o Your name
- ---------------------------------- -------------------------------------------- -------------------------------------------------
- ---------------------------------- -------------------------------------------- -------------------------------------------------
Automatically Open an account Make additional investments
Not available. Select "Establish Automatic Investments" on
your application to make automatic gifts of
Exchange shares shares on a regular basis. You must invest at
Send us written instructions to set least $600 per year per account.
up an automatic exchange of shares
from another American Century
account to the Giftrust account.

4500 Main Street 4917 Town Center Dr.
Kansas City, Missouri Leawood, Kansas

1665 Charleston Road 2000 S. Colorado Blvd.
Mountain View, California Denver, Colorado
- ---------------------------------- ----------------------------------------------------------------------------------------------
- ---------------------------------- ----------------------------------------------------------------------------------------------

Managing the Account of a Matured Giftrust

The beneficiary will be notified when the Giftrust reaches maturity. At that
time, the Giftrust shares will be transferred to a Giftrust account established
in the sole name and Social Security number of the beneficiary. The beneficiary
will decide to do business either in writing only or with telephone services by
phone, online and wire. The beneficiary cannot make additional investments into
the Giftrust account.

If in writing only service is established once the Giftrust matures, the
beneficiary will need to provide written instructions in order to exchange and
redeem Giftrust shares. If the beneficiary wants to add services later, you can
complete an Investor Service Options form.

- -------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------- ----------------------------------------------- ----------------------------------------------
By telephone Exchange shares Sell shares
Investor Services Call us or use our Automated Call an Investor Services Representative.
1-800-345-2021 Information Line if you have
7 a.m. to 7 p.m., Central time authorized us to accept telephone
instructions.
Automated Information Line
1-800-345-8765
24 hours a day
seven days a week
- ---------------------------------- ----------------------------------------------- ----------------------------------------------
- ---------------------------------- ----------------------------------------------- ----------------------------------------------
By mail or fax Exchange shares Sell shares
PO Box 419200 Send us written instructions to Send us written instructions to sell shares
Kansas City, MO 64141-6200 exchange shares from the Giftrust or send us a redemption form. Call an
account to another American Century Investor Services Representative to request
Fax 816-340-7962 fund. a form.
- ---------------------------------- ----------------------------------------------- ----------------------------------------------
- ---------------------------------- ----------------------------------------------- ----------------------------------------------
Online Exchange shares Sell shares
www.americancentury.com Exchange shares into another American Not available.
Century account.

* Please remember that if you request redemptions by wire, $10 will be
deducted from the amount wired. Your bank also may charge a fee.

4500 Main Street 4917 Town Center Dr.
Kansas City, Missouri Leawood, Kansas

1665 Charleston Road 2000 S. Colorado Blvd.
Mountain View, California Denver, Colorado
- ---------------------------------- ----------------------------------------------- ----------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>

Minimum Investment Amounts

Your initial gift to a Giftrust account must be at least $500. All additional
gifts must be at least $50 or more.

A Note About Mailings to Shareholders

To reduce expenses and demonstrate respect for our environment, we will deliver
most financial reports, prospectuses and account statements to households in a
single envelope, even if the accounts are registered under different names.
These will be sent to the beneficiary's address. If you would like additional
copies of financial reports and prospectuses or separate mailing of account
statements, please call us.

Share Price and Distributions

Share Price

If current prices of securities owned by a fund are not readily available from
an independent pricing service, the advisor may determine their fair value in
accordance with procedures adopted by the fund's Board of Directors. Trading of
securities in foreign markets may not take place on every day the Exchange is
open. Also, trading in some foreign markets may take place on weekends or
holidays when the fund's net asset value is not calculated. So, the value of the
fund's portfolio may be affected on days when shares of the fund can't be
purchased or redeemed.

We will price your gift, or an exchange or redemption by the beneficiary, at the
net asset value next determined after we receive the transaction request in good
order.

Distributions

Federal tax laws require the fund to make distributions to its shareholders in
order to quality as a "regulated investment company." Qualification as a
regulated investment company means that the fund will not be subject to state or
federal income tax on amounts distributed. The distributions generally consist
of dividends and interest received, as well as capital gains realized on the
sale of investment securities. Giftrust generally pays distributions of capital
gains, if any, once a year, in December. The fund may make more frequent
distributions if necessary to comply with Internal Revenue Code provisions.
Distributions are required to be reinvested automatically in additional shares.

**********LEFT MARGIN CALLOUTS

The net asset value of the fund is the price of its shares.

Capital gains is the increase in value of a capital asset, such as stock, from
the time it is purchased. Tax becomes due on capital gains once the asset is
sold.

**********END LEFT MARGIN CALLOUTS

Taxes

The following is only a summary of the tax law effects of establishing a
Giftrust account. The tax laws applicable to trusts in general are quite
complex. You should consider consulting your tax advisor or attorney before
opening a Giftrust account. Distributions, which may consist of dividend and
interest income the fund has received or capital gains it has generated, or
both, and by sales of fund shares by beneficiaries after the net asset value has
increased or decreased will cause a tax to be owed by the Trust.

Taxability of Distributions

Distributions of income are taxable to the trust as ordinary income.
Distribution of capital gains are classified either as short term or long term
and are taxed as follows:

<TABLE>
Type of Distribution Tax rate for 15% Bracket Tax rate for 28% Bracket or above
- ------------------------------- ------------------------------------ -------------------------------------
<S> <C> <C>
Short-term capital gains Ordinary income rate Ordinary income rate
Long-term capital gains 10% 20%
</TABLE>

The tax status of any distribution of capital gains is determined by how long
the fund held the underlying security that was sold, not by how long the
Giftrust has been in existence. No federal income tax is due from the trust
unless its income exceeds $100 in a year. Distributions also may be subject to
state and local taxes. The trustee files all state and federal tax returns and
pays the taxes out of the assets of the trust. A $10 fee is charged to the trust
in each year a tax return is filed.

Taxes on Transactions

Redemptions by beneficiaries once the Giftrust has matured -- including
exchanges to other American Century funds -- are subject to capital gains tax.
Based on current tax law, which is subject to change, gains or losses would be
treated as long-term capital gains or losses and taxed at either the 10% or 20%
tax rate.

Gift Taxes

Establishing a Giftrust (and making future contributions) is considered a gift
of a future interest under the federal income tax code. That means the gift does
not quality for the annual gift tax exclusion of $10,000 (indexed for inflation
after 1998). If you give a Giftrust, you must file a United States Gift Tax
Return (Form 709). If you make additional investments in subsequent years, a
Gift Tax Return must be filed for each year's gift. No gift tax is payable until
your cumulative lifetime gifts exceed the exemption equivalent of $625,000
(beginning in 1998 and increasing to $1 million in 2006). Each gift is applied
against the exemption equivalent that would otherwise be available in the
future.

**********LEFT MARGIN CALLOUTS

* Buying a Dividend

**********END LEFT MARGIN CALLOUTS

Financial Highlights

Understanding the Financial Highlights

This table itemizes what contributed to the changes in share price during the
period, and compares this to changes over the last five fiscal years (or less,
if the share class is not five years old).

On a per-share basis, it includes:

o share price at the beginning of the period
o investment income and capital gains or losses
o distributions of income and capital gains paid to shareholders
o share price at the end of the period

It also includes some key statistics for the period:

o Total Return--the overall percentage of return of the fund, assuming the
reinvestment of all distributions

o Expense Ratio--operating expenses as a percentage of average net assets

o Net Income Ratio--net investment income as a percentage of average net
assets

o Portfolio Turnover--the percentage of the fund's buying and selling
activity

The Financial Highlights for the fiscal years ended October 31, 1997 and 1998,
have been audited by Deloitte & Touche LLP, independent auditors. Their report
is in the fund's annual report, which is incorporated by reference into the
Statement of Additional Information, and is available upon request. Prior years'
information was audited by other independent auditors, whose report thereon also
is incorporated by reference into the Statement of Additional Information.

<TABLE>
<CAPTION>
Giftrust

1998 1997 1996 1995 1994
PER-SHARE DATA
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year $XX.XX $XX.XX $XX.XX $XX.XX $XX.XX
------------- -------------- ------------- ------------- --------------
Income from Investment Operations
Net Investment Income (dividends)
Net Realized and Unrealized Gain (Loss) on
Investment Transactions
------------- -------------- ------------- ------------- --------------
Total From Investment Operations
------------- -------------- ------------- ------------- --------------
Less Distributions
From Net Investment Income (dividends)
============= ============== ============= ============= ==============
Net Asset Value, End of Year
------------- -------------- ------------- ------------- --------------
Total Return(1)

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses to Average Net Assets

Ratio of Net Investment Income to Average Net Assets

Net Assets, End of Year (in thousands)
</TABLE>

24 American Century Investments 1-800-345-2021

At Your Service

Surf the Net

The next time you're surfing the Net, stop by American Century's Web site at
www.americancentury.com. You can view transactions and check your account
balances. You can also sign up to receive annual updates to your prospectuses
and financial reports via the Net instead of through the mail.

Expand your investment options with American Century Brokerage

Check out our library

More information about the funds is contained in these documents:

You also can get information about the funds (including the SAI) from the SEC.

v In person. SEC Public Reference Room
Washington, D.C.
Call 1-800-SEC-0330 for location and hours.

v On the internet. www.sec.gov.

v By mail. Public Reference Section
Washington, D.C.
20549-6009
The SEC will charge a fee for copying the documents
you request.

American Century Investments
P.O. Box 419200
Kansas City, Missouri 64141-6200

Investor Services
1-800-345-2021 or 816-531-5575

Automated Information Line
1-800-345-8765

Fax
816-340-7962

www.americancentury.com

Telecommunications Device for the Deaf
1-800-634-4113 or 816-444-3485

Corporate, Not-for-Profit, Keogh,
SEP-, SARSEP-, SIMPLE-IRA and 403(b) Services
1-800-345-3533

Investment Company Act File No. 811-0816
<PAGE>
[american century logo(reg.sm)]
American
Century

Prospectus

January 29, 1999
- --------------------------------------------------------------------------------

AMERICAN CENTURY

High-Yield

Investor Class

The Securities and Exchange Commission has not approved or disapproved these
securities or determined if this Prospectus is accurate or complete. Anyone who
tells you otherwise is committing a crime.

Distributed by Funds Distributor, Inc.

Here's what you'll find:

o The fund's primary investments and risks

o A description of who may or may not want to invest in the fund

o Fund performance, including returns for each year, best and worst quarters
and average annual returns compared to the fund's benchmarks

o An overview of ways to best manage your accounts

o Helpful tips and definitions of key investment terms

Sincerely,

Mark Killen
Senior Vice President
American Century Investment Services, Inc.

Table of Contents

An Overview of the Fund................................................2

Fees and Expenses......................................................3

Detailed Information about the Fund....................................4

Basics of Fixed Income Investing.......................................6

Management.............................................................8

Investing with American Century.......................................12

Share Price and Distributions.........................................15

Taxes.................................................................16

Multiple Class Information............................................17

Financial Highlights..................................................18

At Your Service.......................................................18

Fund Reference
Fund Code Ticker Newspaper Listing
- --------------------------------------------------------------------------------
High-Yield 101 ABHIX HighYld
- --------------------------------------------------------------------------------

**********LEFT MARGIN CALLOUTS

Throughout this book you'll find definitions of key investment terms and
phrases. When you see a word printed in green italics, look for its definition
in the left margin.

*........This symbol highlights special information and helpful tips.

**********END LEFT MARGIN CALLOUTS

An Overview of the Fund

What is the fund's investment goals?

This fund seeks high current income. As a secondary objective, the fund seeks
capital appreciation, but only when consistent with its primary objective of
maximizing current income.

What are the fund's primary investment strategies and principal risks?

The fund invests primarily in a diversified portfolio of lower-rated corporate
debt securities, which are subject to greater credit risk and consequently pay
higher yields. Securities of this type are subject to substantial risks,
including

o credit risk
o liquidity risk
o interest rate risk

Additional important information about the fund's investment strategies and
risks begin on page 4.

**********LEFT MARGIN CALLOUT

Debt securities means bonds, notes and debentures. Debt securities also are
sometimes called fixed income securities.

**********END LEFT MARGIN CALLOUT

Who may want to invest in the fund?

The funds may be a good investment if you are

0 seeking high current income with the potential for capital gains

0 investing through an IRA or other tax-advantaged retirement plan

Who may not want to invest in the fund?

The fund may not be a good investment if you are

0 uncomfortable with the risk of investing in lower-rated debt securities

0 looking for the added security of FDIC insurance

**********LEFT MARGIN CALLOUTS

* An investment in the fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
government agency.

**********END LEFT MARGIN CALLOUTS

Fees and Expenses

There are no sales loads or fees or other charges

0 to buy fund shares directly from American Century

0 to reinvest dividends in additional shares

0 to exchange into the Investor Class shares of other American Century funds

The following tables describe the fees and expenses that you may pay if you buy
and hold shares of the fund.

Examples of Hypothetical Fund Costs

The examples in the table below are intended to help you compare the costs of
investing in the fund with those of other mutual funds. Assuming you. . .

o invest $10,000 in the fund

o redeem all of your shares at the end of the periods shown below

o earn a 5% return each year and

o incur the same operating expenses shown above

. . . your cost of investing in the fund would be:
1 Year 3 Years 5 Years 10 Years
- --------------- ------------ ------------- ------------ ------------
High-Yield $92 $286 $497 $1,104
- --------------- ------------ ------------- ------------ ------------

**********LEFT MARGIN CALLOUTS

* Use this example to compare the costs of investing in other funds. Of
course, your actual costs may be higher or lower.

**********END LEFT MARGIN CALLOUTS

Detailed Information About the Fund

High-Yield

What is the fund's investment objective?

The fund seeks high current income by investing in a diversified portfolio of
high-yielding corporate bonds and other debt securities.

How does the fund pursue its investment objective?

The fund invests primarily in high-yield corporate debt securities, with an
emphasis on securities that are rated below investment grade.

**********LEFT MARTIN CALLOUT

* A high-yield security is one that has been rated below one of the four
highest categories by a nationally recognized statistical rating
organization, or determined by the investment advisor to be of similar
quality. A discussion of the authorized credit quality range of the fund
and credit risk starts on page XX.

**********END LEFT MARTIN CALLOUT

Under normal market conditions, the fund managers will maintain at least 80% of
the fund's total assets in high-yielding corporate bonds and other debt
instruments (including income producing convertible and preferred securities).
The remaining assets may be invested in common stocks or other equity-related
securities. The fund buys securities that are below investment grade, including
so-called junk bonds. Issuers of these securities often have short financial
histories or have questionable credit.

Up to 40% of the fund's total assets may be invested in fixed-income obligations
of foreign issuers. Under normal market conditions, the fund may invest up to
20% of its assets, and for temporary defensive purposes, up to 100% of its
assets, in short-term money market instruments and U.S. government securities.

The fund has no average maturity limitations, but it typically invests in
intermediate- and long-term bonds.

What are the primary risks of investing in the fund?

The fund's investments often have high credit risk, which helps it pursue a
higher yield than more conservatively managed bond funds. Issuers of high-yield
securities are more vulnerable to real or perceived economic changes (such as an
economic downturn or a prolonged period of rising interest rates), political
changes or adverse developments specific to the issuer. Adverse economic,
political and other developments may be more likely to cause an issuer of
low-quality bonds to default on its obligation to pay the interest and principal
due under its securities.

The market for lower-quality debt securities is generally less liquid than the
market for higher-quality securities. Adverse publicity and investor
perceptions, as well as new and proposed laws, also may have a greater negative
impact on the market for lower-quality securities.

Because the fund typically invests in intermediate-term bonds, the interest rate
risk for High-Yield is higher than for funds with shorter weighted average
maturities, such as money market and short-term bond funds. See the discussion
on page [xx] for more information about the affects of changing interest rates
on the fund's portfolio.

High-Yield can invest up to 40% of its assets in securities of foreign
companies. Foreign securities can have certain unique risks, including
fluctuations in currency exchange rates, unstable political and economic
structures, reduced availability of public information and the lack of uniform
financial reporting and regulatory practices similar to those that apply to U.S.
issuers.

The fund's share value will fluctuate. In general, funds that have higher
potential income have a higher potential loss. If you sell your shares when
their value is less than the price you paid, you will lose money.

Fund Performance History

The performance information on this page is designed to help you see how fund
returns can vary. Keep in mind that past performance does not predict how the
fund will perform in the future.

Annual Total Returns

The following bar chart shows the performance of the fund's Investor Class
shares for each full year in the life of the fund. It indicates the volatility
of the fund's historical returns from year to year.

[GRAPH DEPICTING ANNUAL TOTAL RETURNS FOR HIGH-YIELD SINCE INCEPTION; UPDATED
FIGURES NOT AVAILABLE]

Highest and Lowest Quarterly Returns

The highest and lowest returns of the fund's Investor Class shares for a quarter
during the life of the fund are provided below to indicate the fund's historical
short-term volatility.

[GRAPH DEPICTING HIGHEST AND LOWEST QUARTERLY RETURNS FOR HIGH-YIELD; UPDATED
FIGURES NOT AVAILABLE]

Average Annual Returns

The following table shows the average annual returns of the fund's Investor
Class shares for the periods indicated during the last 10 calendar years. The
DLJ High Yield Index is included as a benchmark for long-term performance
comparison.
The benchmark is an unmanaged index that has no operating costs.

1 year Life of Fund*
- -------------------------------------------------------------
High Yield ____% ____%
DLJ High Yield Index X.XX% X.XX%

* The inception date for the fund is September 30, 1997.

**********LEFT MARGIN CALLOUTS

The fund's total returns for the period from January 1, 1998, to September 30,
1998, are

High-Yield X.XX%

* For current performance information, including yields, please call us at
1-800-345-2021 or visit American Century's Web site at
www.americancentury.com.

**********END LEFT MARGIN CALLOUTS

Basics of Fixed Income Investing

Debt Securities

The fund managers decide which debt securities to buy and sell by

0 identifying securities that satisfy the fund's credit quality requirements

0 evaluating the current economic conditions and assessing the risk of
inflation

0 evaluating special features of the securities that may make them more or
less attractive

Weighted Average Maturity

Types of Risk

The basic types of risk that fixed income securities face are described below.

Interest Rate Risk

Generally, interest rates and the prices of debt securities move in opposite
directions. So when interest rates fall, the prices of most debt securities
rise; when interest rates rise, prices fall. Because the fund invests in debt
securities, changes in interest rates will affect the fund's performance.

The degree to which interest rate changes affect the fund's performance varies
and is related to the weighted average maturity of the fund. For example, when
interest rates rise, you can expect the share value of a long-term bond fund to
fall more than that of a short-term bond fund. When rates fall, the opposite is
true. This sensitivity to interest rate changes is called interest rate risk.

***********LEFT MARGIN CALLOUTS

* Weighted average maturity is a tool that the advisor uses to approximate
the remaining maturity of a fund's investment portfolio.

* The longer a fund's weighted average maturity, the more sensitive it is to
changes in interest rates.

***********END LEFT MARGIN CALLOUTS

When interest rates change, longer maturity bonds experience a greater change in
price. The following table shows the effect of a 1% increase in interest rates
on the price of 7% coupon bonds of differing maturities:

Remaining Maturity Current Price Price after 1% Change in price
increase
- ------------------- ---------------- --------------------- ---------------------
1 year $100.00 $99.06 -0.94%
3 years 100.00 97.38 -2.62%
10 years 100.00 93.20 -6.80%
30 years 100.00 88.69 -11.31%

Credit Risk

Credit risk is the risk that an obligation won't be paid and a loss will result.
A high credit rating indicates a high degree of confidence by the ratings
organization that the issuer will be able to withstand adverse business,
financial or economic conditions and be able to make interest and principal
payments on time. Conversely, a lower credit rating indicates a greater risk of
nonpayment. A lower rating may also indicate that the issuer has a more senior
series of debt securities, which means that if the issuer has difficulties
making its payments, the more senior series of debt is first in line for
payment.

It's not as simple as buying the highest rated debt securities, though. Higher
credit ratings usually mean lower interest rates, so investors often purchase
securities that aren't the highest-rated to increase return. If a fund, such as
High-Yield, purchases lower-rated securities in an effort to achieve higher
yields, it assumes additional credit risk.

The following chart shows the authorized credit quality ranges for the fund
offered by this Prospectus.

- ------ ---------- ----- --------- --------- ----- ------- ------- ------ -------
A-1 A-2 A-3
P-1 P-2 P-3
MIG-1 MIG-2 MIG-3
SP-1 SP-2 SP-3
AAA AA A BBB BB B CCC CC C D
- ----------------------- --------------------------------- ----------------------
XX YY XX
- ----------------------- --------------------------------- ----------------------

XX Denotes authorized quality

YY Denotes expected quality range of at least 80% of total assets of the fund

Liquidity Risk

Inflation Risk

**********LEFT MARGIN CALLOUTS

* Credit quality may be lower when the issuer has

o a high debt level
o a short operating history
o a senior level of debt
o a difficult competitive environment

* The Statement of Additional Information provides a detailed description of
these securities ratings.

**********END LEFT MARGIN CALLOUTS

Management

Who manages the funds?

The Board of Directors, investment advisor and fund management team play key
roles in the management of the funds.

The Board of Directors

The Investment Advisor

For the services it provided to the fund during its most recent fiscal year, the
advisor received a unified management fee of 0.90% percentage of the average net
assets of the fund. The amount of the management fee for the fund is calculated
daily and paid monthly. Out of that fee, the advisor paid all expenses of
managing and operating the fund except brokerage expenses, taxes, interest, fees
and expenses of the independent Directors (including legal counsel fees) and
extraordinary expenses.

The Fund Management Team

Portfolio Manager members of the investment team are identified below:

Norman E. Hoops
Mr. Hoops, Senior Vice President and Portfolio Manager, has been a member of the
team that manages High-Yield since its inception. He joined American Century as
Vice President and Portfolio Manager in November 1989. In April 1993, he became
Senior Vice President. . He has a bachelor of arts from Indiana University and
an MBA from Butler University.

Theresa C. Fennell
Ms. Fennell, Portfolio Manager, has been a member of the team that manages
High-Yield since its inception. She joined American Century in June 1997. Prior
to joining American Century, she was an Associate Portfolio Manager with Smith
Barney Mutual Funds Management, Inc. She has a bachelor of arts in economics
from the University of Virginia. Ms. Fennell is a Chartered Financial Analyst.

**********LEFT MARGIN CALLOUTS

* Code of Ethics

**********END LEFT MARGIN CALLOUTS

Fundamental Investment Policies

Year 2000 Issues

Many of the world's computer systems currently cannot properly recognize or
process date-sensitive information relating to the Year 2000 and beyond. Because
this may impact the computer systems of various American Century-affiliated and
external service providers for the fund, American Century formally initiated a
Year 2000 readiness project in July 1997. It involves a team of information
technology professionals assisted by outside consultants and guided by a
senior-level steering committee. The team's goal is to assess the impact of the
Year 2000 on American Century's systems, renovate or replace noncompliant
critical systems and test those systems. In addition, the team has been working
to gather information about the Year 2000 efforts of the fund's other major
service providers. Although American Century believes its critical systems will
function properly in the Year 2000, this is not guaranteed. If the efforts of
American Century or its external service providers are not successful, the
fund's business, particularly the provision of shareholder services, may be
hampered.

Investing with American Century

Services Automatically Available to You

You automatically will have access to the services listed below when you open
your account. If you do not want these services, see "Conducting Business in
Writing" below.

Conducting Business in Writing

Exchange shares
Exchange shares from another American Century
account.

A Note About Mailings to Shareholders

Your Guide to Services and Policies

When you open an account, you will receive an Investor Services Guide, which
explains the services available to you and the policies of the fund and the
transfer agent.

4500 Main Street 4917 Town Center Dr.
Kansas City, Missouri Leawood, Kansas

1665 Charleston Road 2000 S. Colorado Blvd.
Mountain View, California Denver, Colorado
</TABLE>

Minimum Initial Investment Amounts

To open an account the minimum investments are as follows for:
- ----------------------------------------------------------------------------
Individual or Joint $5,000
Traditional IRA $1,000
Roth IRA $1,000
Education IRA $500
UGMA/UTMA $1,000
403(b) No minimum

Redemption of shares in low-balance accounts

Investing Through Financial Intermediaries

o minimum investment requirements
o exchange policies
o fund choices
o cut-off time for investments

**********LEFT MARGIN CALLOUTS

* Financial intermediaries include banks, broker-dealers, insurance companies
and investment advisors.

**********END LEFT MARGIN CALLOUTS

Share Price and Distributions

Share Price

We determine the net asset value of the fund as of the close of regular trading
on the New York Stock Exchange (usually 4 p.m. Eastern time) on each day the
Exchange is open. On days when the Exchange is not open, we do not calculate the
net asset value. The net asset value of a fund share is the current value of its
investments, minus any liabilities, divided by the number of fund shares
outstanding.

We will price your purchase, exchange or redemption at the net asset value next
determined after we receive your transaction request in good order.

Distributions

Federal tax laws require the fund to make distributions to its shareholders in
order to qualify as a "regulated investment company." Qualification as a
regulated investment company means that the fund will not be subject to state or
federal income tax in amounts distributed. The distributions generally consist
of dividends and interest received, as well as capital gains realized on the
sale of investment securities. The fund pays distributions from net income
monthly and generally pays distributions of capital gains, if any, once a year
in December. It may make more frequent distributions if necessary to comply with
Internal Revenue Code provisions.

**********LEFT MARGIN CALLOUTS

The net asset value of a fund is the price of the fund's shares.

Capital gains is the increase in value of a capital asset, such as stock, from
the time it is purchased. Tax becomes due on capital gains once the asset is
sold.

**********END LEFT MARGIN CALLOUTS

Taxes

Tax-Deferred Accounts

Taxable Accounts

If you own fund shares through a taxable account, distributions by the fund and
sales by you of fund shares may cause you to be taxed.

Taxability of Distributions

<TABLE>
Type of Distribution Tax rate for 15% Bracket Tax rate for 28% Bracket or above
- ---------------------------- ---------------------------- --------------------------------------
<S> <C> <C>
Short-term capital gains Ordinary income rate Ordinary income rate
Long-term capital gains 10% 20%
</TABLE>

Distributions also may be subject to state and local taxes. Because everyone's
tax situation is unique, always consult your tax professional about federal,
state and local tax consequences.

Taxes on Transactions

**********LEFT MARGIN CALLOUTS

* Buying a Dividend

**********END LEFT MARGIN CALLOUTS

Multiple Class Information

Financial Highlights

Understanding the Financial Highlights

This table itemizes what contributed to the changes in share price during the
period, and compares this to changes over the last five fiscal years (or less,
if the share class is not five years old).

On a per-share basis, it includes:

o share price at the beginning of the period
o investment income and capital gains or losses
o distributions of income and capital gains paid to shareholders
o share price at the end of the period

It also includes some key statistics for the period:

o Total Return--the overall percentage of return of the fund, assuming the
reinvestment of all distributions

o Expense Ratio--operating expenses as a percentage of average net assets

o Net Income Ratio--net investment income as a percentage of average net
assets

o Portfolio Turnover--the percentage of the fund's buying and selling
activity

The Financial Highlights for the fiscal years ended October 31, 1997 and 1998,
have been audited by Deloitte & Touche LLP, independent auditors. Their report
is in the fund's annual report, which is incorporated by reference into the
Statement of Additional Information, and is available upon request. Prior years'
information was audited by other independent auditors, whose report thereon also
is incorporated by reference into the Statement of Additional Information.

High-Yield

PER SHARE DATA 1998 1997
Net Asset Value, Beginning of Year
------------- --------------
Income from Investment Operations
Net Investment Income (dividends)
Net Realized and Unrealized Gain (Loss) on
Investment Transactions
------------- --------------
Total From Investment Operations
------------- --------------
Less Distributions
From Net Investment Income (dividends)
In Excess of Net Realized Gains
------------- --------------
------------- --------------
Total Distributions
------------- --------------
Net Asset Value, End of Year
------------- --------------
Total Return(1)
RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses to Average Net Assets
Ratio of Net Investment Income to Average Net Assets
Portfolio Turnover Rate
Net Assets, End of Year (in thousands)

(1) Total return assumes reinvestment of dividends and capital gains, if any.

At Your Service

Make virtually any transaction online

Expand your investment options with American Century Brokerage

Send your distributions straight to the bank

Check out our library

More information about the funds is contained in these documents:

You also can get information about the funds (including the SAI) from the SEC.

v In person. SEC Public Reference Room
Washington, D.C.
Call 1-800-SEC-0330 for location and hours.

v On the internet. www.sec.gov.

v By mail. Public Reference Section
Washington, D.C.
20549-6009
The SEC will charge a fee for copying the documents
you request.

American Century Investments
P.O. Box 419200
Kansas City, Missouri 64141-6200

Investor Services
1-800-345-2021 or 816-531-5575

Automated Information Line
1-800-345-8765

Fax
816-340-7962

www.americancentury.com

Telecommunications Device for the Deaf
1-800-634-4113 or 816-444-3485

Corporate, Not-for-Profit, Keogh,
SEP-, SARSEP-, SIMPLE-IRA and 403(b) Services
1-800-345-3533

Investment Company Act File No. 811-0816
<PAGE>
[american century logo(reg.sm)]
American
Century

Prospectus

January 29, 1999
- --------------------------------------------------------------------------------

AMERICAN CENTURY

New Opportunities

Investor Class

The Securities and Exchange Commission has not approved or disapproved these
securities or determined if this Prospectus is accurate or complete. Anyone who
tells you otherwise is committing a crime.

Distributed by Funds Distributor, Inc.

Here's what you'll find:

o The fund's primary investments and risks

o A description of who may or may not want to invest in the fund

o Fund performance, including returns for each year, best and worst quarters
and average annual returns compared to the fund's benchmarks

o An overview of ways to best manage your accounts

o Helpful tips and definitions of key investment terms

Sincerely,

Mark Killen
Senior Vice President
American Century Investment Services, Inc.

Table of Contents

An Overview of the Fund....................................................2

Fees and Expenses..........................................................3

Detailed Information about the Fund........................................4

Management................................................................15

Investing With American Century...........................................18

Share Price and Distributions.............................................21

Taxes.....................................................................22

Financial Highlights......................................................23

At Your Service...........................................................22

Fund Reference
Fund Code Ticker Newspaper Listing
- ------------------------------------------------------------------------------
New Opportunities 036 TWNOX New Opp
- ------------------------------------------------------------------------------

**********LEFT MARGIN CALLOUTS

Throughout this book you'll find definitions of key investment terms and
phrases. When you see a word printed in green italics, look for its definition
in the left margin.

*........This symbol highlights special information and helpful tips.

**********END LEFT MARGIN CALLOUTS

An Overview of the Fund

What is the fund's investment goal?

This fund seeks long-term capital growth.

What are the fund's primary investment strategies and principal risks?

The fund looks for common stocks of growing companies. The basis of the strategy
used by these fund is that, over the long term, stocks of companies with
earnings and revenue growth have a greater than average chance to increase in
value over time. A more detailed description of American Century's "growth"
investment style begins on page XX

The fund's principal risks include:

o Market Risk The value of the fund's shares will go up and down based on
the performance of the companies whose securities it owns
and other factors affecting the securities market generally.

o Price Volatility The value of the fund's shares may fluctuate significantly
in the short term.

o Principal Loss As with all mutual funds, if you sell your shares when their
value is less than the price you paid, will lose money.

Who may want to invest in the fund?

New Opportunities is only available for purchase by participants in American
Century's Priority Investors Program and employees of American Century. The fund
may be a good investment if you are

0 seeking long-term capital growth from your investment

0 comfortable with the fund's short-term price volatility

0 comfortable with the risks associated with the fund's investment strategy

0 investing through an IRA or other tax-advantaged retirement plan

Who may not want to invest in the fund?

The fund may not be a good investment if you are

0 seeking current income from your investment

0 investing for a short period of time

0 uncomfortable with short-term volatility in the value of your investment

**********LEFT MARGIN CALLOUTS

* An investment in the fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
government agency.

**********END LEFT MARGIN CALLOUTS

Fees and Expenses

There are no sales loads or fees or other charges

0 to buy fund shares directly from American Century

0 to reinvest dividends in additional shares

0 to exchange into the Investor Class shares of other American Century funds.

The following tables describe the fees and expenses that you may pay if you buy
and hold shares of the fund.

Shareholder Fees (fees paid directly from your investment)

- ---------------------- -------------------------------------------------------
New Opportunities Redemption Fee(as a percentage of amount redeemed)
- ---------------------- -------------------------------------------------------
Shares held less than 2.0%
5 years
Shares held 5 years
or more None

<TABLE>
Annual Operating Expenses (expenses that are deducted from fund assets)
Management Fee Distribution and Other Expenses1 Total Annual Fund
Service (12b-1) Fees Operating Expenses
- --------------------- ------------------ ------------------------- ------------------ --------------------
<S> <C> <C> <C> <C>
New Opportunities 1.50% None 0.00% 1.50%
- --------------------- ------------------ ------------------------- ------------------ --------------------
</TABLE>
1 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 of Hypothetical Fund Costs

The examples in the table below are intended to help you compare the costs of
investing in a fund with those of other mutual funds. Assuming you ...

o invest $10,000 in the fund

o redeem all of your shares at the end of the periods shown below

o earn a 5% return each year and

o incur the same operating expenses shown above

... your cost of investing in the fund would be:

1 Year 3 Years 5 Years 10 Years
- ---------------------- --------- ---------- ---------- -----------
New Opportunities $359 $693 $814 $1,778
- ---------------------- --------- ---------- ---------- -----------

You would pay the following expenses if you did not redeem your shares:

1 Year 3 Years 5 Years 10 Years
- ---------------------- --------- ---------- ---------- -----------
New Opportunities $152 $472 $814 $1,778
- ---------------------- --------- ---------- ---------- -----------

**********LEFT MARGIN CALLOUTS

* Use this example to compare the costs of investing in other funds. Of
course, your actual costs may be higher or lower.

**********END LEFT MARGIN CALLOUTS

Detailed Information about the Fund

New Opportunities

What is the fund's investment objective?

The fund seeks long-term capital growth. This is a fundamental policy and cannot
be changed without shareholder approval.

How does the fund pursue its investment objective?

The fund managers look for stocks of smaller-sized companies that they believe
will increase in value over time, using a growth investment strategy developed
by American Century. This strategy looks for companies with earnings and
revenues that are not only growing, but growing at a successively faster, or
accelerating, pace. This strategy is based on the premise that, over the long
term, the stocks of companies with accelerating earnings and revenues have a
greater-than-average chance to increase in value.

**********LEFT MARGIN CALLOUTS

* Accelerating growth is shown, for example, by growth that is faster this
quarter than last or faster this year than the year before.

**********END LEFT MARGIN CALLOUTS

The fund managers do not attempt to time the market. Instead, they intend to
keep the fund essentially fully invested in stocks regardless of the movement of
stock prices generally. When the managers believe that it is prudent, the fund
may invest a portion of its assets in convertible securities, foreign
securities, short-term instruments, non-leveraged stock index futures contracts
and other similar securities. Stock index futures contracts, a type of
derivative security, can help the fund's cash assets remain liquid while
performing more like stocks. The fund has a policy governing stock index futures
and similar derivative securities to help manage the risk of these types of
investments. For example, the managers cannot leverage the fund's assets by
investing in a derivative security. A complete description of the derivatives
policy is included in the Statement of Additional Information.

What kinds of securities does the fund buy?

New Opportunities will usually purchase common stocks of smaller U.S. and
foreign companies, but it can purchase other types of securities, as well.
Companies considered to be small generally have a market capitalization of less
than $1 billion. The fund also may invest in domestic and foreign preferred
stocks, convertible securities, equity equivalent securities, notes, bonds and
other debt securities. The fund limits its purchase of debt securities to
investment-grade obligations.

**********LEFT MARGIN CALLOUTS

* Market capitalization means the value of a company, as determined by
multiplying the number of shares of stock it has outstanding by the stock's
current market price per share.

**********END LEFT MARGIN CALLOUTS

What are the primary risks of investing in the fund?

o The value of a fund's shares depends on the value of the stocks and other
securities it owns. The value of the individual securities a fund owns will
go up and down depending on the performance of the companies that issued
them, general market and economic conditions, and investor confidence.
o The fund managers may buy a large amount of a company's stock quickly, and
often will dispose of it quickly if the company's earnings or revenues
decline. While the managers believe this strategy provides substantial
appreciation potential over the long term, in the short term it can create
a significant amount of share price volatility. This volatility can be
greater than that of the average stock fund.
o Because New Opportunities generally invests in smaller companies than
American Century's similarly managed growth equity funds (such as Growth,
Ultra and Select), it may be more volatile, and subject to greater
short-term risk, than those funds. Smaller companies may have limited
financial resources, product lines and markets, and their securities may
trade less frequently and in more limited volumes than the securities of
larger companies. In addition, smaller companies may have less publicly
available information and, when available, it may be inaccurate or
incomplete.
o As with all funds, at any given time, the value of your shares of New
Opportunities 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.
o Market performance tends to be cyclical, and in the various cycles, certain
investment styles may fall in and out of favor. If the market is not
favoring the fund's style, the fund's gains may not be as big as, or its
losses may be bigger than, other equity funds using different investment
styles.
o Foreign securities can have certain unique risks, including fluctuations in
currency exchange rates, unstable political and economic structures,
reduced availability of public information and lack of uniform financial
reporting and regulatory practices similar to those that apply to U.S.
issuers. These factors make investing in foreign securities generally
riskier than investing in U.S. stocks. To the extent the fund invests in
foreign securities, the overall risk of the fund could be affected.

As a result of their investment strategy, the fund is intended for investors who
seek long-term capital growth through an aggressive equity fund and who are
willing to accept the risks associated with the fund's investment strategy.

Fund Performance History

The performance information on this page is designed to help you see how fund
returns can vary. Keep in mind that past performance does not predict how the
fund will perform in the future.

Annual Total Returns

[GRAPH DEPICTING ANNUAL TOTAL RETURNS FOR NEW OPPORTUNITIES SINCE INCEPTION;
UPDATED FIGURES NOT AVAILABLE]

Highest and Lowest Quarterly Returns
The highest and lowest returns of the fund's shares for a calendar quarter
during the life of the fund are provided below to indicate the fund's historical
short-term volatility. Shareholders should be aware, however, that the fund is
intended for investors with a long-term investment horizon and are not managed
for short-term results.

[GRAPH DEPICTING HIGHEST AND LOWEST RETURNS FOR NEW OPPORTUNITIES SINCE
INCEPTION; UPDATED FIGURES NOT AVAILABLE]

Average Annual Returns

1 year Life of Fund*
- -------------------------------------------------------------------------
New Opportunities XXX% XXX%
Russell 2000 Growth Index XXX% XXX%
- -------------------------------------------------------------------------

* The inception date for the fund is December 26, 1996.

**********LEFT MARGIN CALLOUTS

The fund's total return for the period from January 1, 1998, to September 30,
1998, is:

New Opportunities X.XX%

* For current performance information, please call us at 1-800-345-2021 or
visit American Century's Web site at www.americancentury.com.

**********END LEFT MARGIN CALLOUTS

Management

Who manages the fund?

The Board of Directors, investment advisor and fund management team play key
roles in the management of the fund.

The Board of Directors

The Investment Advisor

For the services it provided to the fund during its most recent fiscal year, the
advisor received a unified management fee of 1.50% the average net assets of the
fund. The amount of the management fee is calculated daily and paid monthly. Out
of that fee, the advisor paid all expenses of managing and operating the fund
except brokerage expenses, taxes, interest, fees and expenses of the independent
Directors (including legal counsel fees) and extraordinary expenses.

The Fund Management Team

Portfolio Manager members of the investment team are identified below:

Christopher K. Boyd
Mr. Boyd, Vice President and Portfolio Manager, has been a member of the team
that manages New Opportunities since rejoining American Century in January 1998.
With the exception of 1997, he has been with American Century since March 1988
and served as a Portfolio Manager since December 1992. During 1997, he was in
private practice as an investment advisor. He has a bachelor of science from the
University of Kansas and an MBA from Dartmouth College. He is a Chartered
Financial Analyst.

John D. Seitzer
Mr. Seitzer, Vice President and Portfolio Manager, has been a member of the team
that manages New Opportunities since the fund's inception. He joined American
Century in June 1993 as an Investment Analyst and was promoted to Portfolio
Manager in July 1996. He has a B.S. in accounting and finance from Kansas State
University and an MBA in finance from Indiana University. He is a Chartered
Financial Analyst and a Certified Public Accountant.

**********LEFT MARGIN CALLOUTS

* Code of Ethics

**********END LEFT MARGIN CALLOUTS

Fundamental Investment Policies

Year 2000 Issues

Many of the world's computer systems currently cannot properly recognize or
process date-sensitive information relating to the Year 2000 and beyond. Because
this may impact the computer systems of various American Century-affiliated and
external service providers for the fund, American Century formally initiated a
Year 2000 readiness project in July 1997. It involves a team of information
technology professionals assisted by outside consultants and guided by a
senior-level steering committee. The team's goal is to assess the impact of the
Year 2000 on American Century's systems, renovate or replace noncompliant
critical systems and test those systems. In addition, the team has been working
to gather information about the Year 2000 efforts of the fund's other major
service providers. Although American Century believes its critical systems will
function properly in the Year 2000, this is not guaranteed. If the efforts of
American Century or its external service providers are not successful, the
fund's business, particularly the provision of shareholder services, may be
hampered.

In addition, the issuers of securities the funds own could have Year 2000
computer problems. These problems could negatively affect the value of their
securities, which, in turn, could impact the fund's performance. The advisor has
established a process to gather publicly available information about the Year
2000 readiness of these issuers. However, this process may not uncover all
relevant information, and the information gathered may not be complete and
accurate. Moreover, an issuer's Year 2000 readiness is only one of many factors
the fund managers may consider when making investment decisions, and other
factors may receive greater weight.

Investing with American Century

Services Automatically Available to You

You automatically will have access to the services listed below when you open
your account. If you do not want these services, see "Conducting Business in
Writing" below.

Conducting Business in Writing

Exchange shares
Exchange shares from another American Century
account.

A Note About Mailings to Shareholders

Your Guide to Services and Policies

When you open an account, you will receive an Investor Services Guide, which
explains the services available to you and the policies of the fund and the
transfer agent.

4500 Main Street 4917 Town Center Dr.
Kansas City, Missouri Leawood, Kansas

1665 Charleston Road 2000 S. Colorado Blvd.
Mountain View, California Denver, Colorado
</TABLE>

Minimum Initial Investment Amounts

To open an account the minimum investments are as follows for:
- --------------------------------------------------------------------------------
Individual or Joint $2,500
Traditional IRA $1,000
Roth IRA $1,000
Education IRA $500
UGMA/UTMA $1,000
403(b) No minimum

Redemption of shares in low-balance accounts

Special requirements for large redemptions

The fund has elected to be governed by Rule 18f-1 under the Investment Company
Act, which obligates the fund to make certain redemptions in cash. This
requirement applies when a shareholder redeems, during any 90-day period, up to
the lesser of $250,000 or 1% of the assets of the fund. Although we normally
will pay redemptions in excess of this limitation in cash, American Century
reserves the right under unusual circumstances to honor these redemptions in
kind by making payment in whole or in part in readily marketable securities.

If we make payment in securities, we will value the securities, selected by the
fund managers, in the same manner as we do in computing the fund's net asset
value. We will provide these securities to the redeeming plan participant or
financial intermediary in lieu of cash without prior notice. If your redemption
would exceed this limit and you would like to avoid being paid in securities,
please provide us with an unconditional instruction to redeem at least 15 days
prior to the date on which the redemption transaction is to occur. The
instruction must specify the dollar amount or number of shares to be redeemed
and the date of the transaction. This minimizes the effect of the redemption on
the fund and its remaining shareholders.

While the fund reserves the right to redeem shares through a redemption-in-kind,
we do not expect to exercise this option unless it has an unusually low level of
cash to meet redemptions and/or is experiencing unusually strong demands for its
cash. Such a demand might be caused, for example, by extreme market conditions
that result in an abnormally high level of redemption requests concentrated in a
short period of time. Absent these or similar circumstances, we expect
redemptions in excess of $250,000 to be paid in cash in any fund with assets of
more than $50 million if total redemptions from any one account in any 90-day
period do not exceed one-half of 1% of the total assets of the fund.

Share Price and Distributions

Share Price

If current prices of securities owned by a fund are not readily available from
an independent pricing service, the advisor may determine their fair value in
accordance with procedures adopted by the fund's Board of Directors. Trading of
securities in foreign markets may not take place on every day the Exchange is
open. Also, trading in some foreign markets may take place on weekends or
holidays when the fund's net asset value is not calculated. So, the value of the
fund's portfolio may be affected on days when you can't purchase or redeem its
shares.

We will price your purchase, exchange or redemption at the net asset value next
determined after we receive your transaction request in good order.

Distributions

**********LEFT MARGIN CALLOUTS

The net asset value of the fund is the price of its shares.

Capital gains is the increase in value of a capital asset, such as stock, from
the time it is purchased. Tax becomes due on capital gains once the asset is
sold.

**********END LEFT MARGIN CALLOUTS

Taxes

Tax-Deferred Accounts

Taxable Accounts

If you own fund shares through a taxable account, distributions by the fund and
sales by you of fund shares may cause you to be taxed.

Taxability of Distributions

Type of Distribution Tax rate for 15% Bracket Tax rate for 28% Bracket or
above
- ------------------------ -------------------------- ----------------------------
Short-term capital gains Ordinary income rate Ordinary income rate
Long-term capital gains 10% 20%

The tax status of any distribution of capital gains is determined by how long
the fund held the underlying security that was sold, not by how long you have
been invested in the fund or whether you reinvest your distributions in
additional shares or take them as income. American Century will send you a
detail of the tax status of fund distributions for each calendar year in an
annual tax statement from the fund.

Distributions also may be subject to state and local taxes. Because everyone's
tax situation is unique, always consult your tax professional about federal,
state and local tax consequences.

Taxes on Transactions

Your redemptions -- including exchanges to other American Century funds -- are
subject to capital gains tax. The table above can provide a general guide for
your potential tax liability when selling or exchanging fund shares. "Short-term
capital gains" are gains on fund shares held less than or equal to 12 months.
"Long-term capital gains" are gains on fund shares held for more than 12 months.
If your shares decrease in value, their sale or exchange will result in a
long-term or short-term capital loss.

**********LEFT MARGIN CALLOUTS

* Buying a Dividend

**********END LEFT MARGIN CALLOUTS

Financial Highlights

Understanding the Financial Highlights

This table itemizes what contributed to the changes in share price during the
period, and compares this to changes over the last five fiscal years (or less,
if the share class is not five years old).

On a per-share basis, it includes:

o share price at the beginning of the period
o investment income and capital gains or losses
o distributions of income and capital gains paid to shareholders
o share price at the end of the period

It also includes some key statistics for the period:

o Total Return--the overall percentage of return of the fund, assuming the
reinvestment of all distributions

o Expense Ratio--operating expenses as a percentage of average net assets

o Net Income Ratio--net investment income as a percentage of average net
assets

o Portfolio Turnover--the percentage of the fund's buying and selling
activity

The Financial Highlights for the fiscal years ended October 31, 1997 and 1998
have been audited by Deloitte & Touche LLP, independent auditors. Their report
is in the fund's annual report, which is incorporated by reference into the
Statement of Additional Information, and is available upon request.

<TABLE>
<CAPTION>
New Opportunities
1998 1997
PER-SHARE DATA
<S> <C> <C>
Net Asset Value, Beginning of Year.........
------------- --------------
Income from Investment Operations
Net Investment Income (dividends).......
Net Realized and Unrealized Gain (Loss) on
Investment Transactions.................
------------- --------------
Total From Investment Operations........
------------- --------------
Less Distributions
From Net Investment Income (dividends)..
------------- --------------
------------- --------------
Net Asset Value, End of Year...............
------------- --------------
Total Return(1)............................

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses to
Average Net Assets .....................
Ratio of Net Investment Income to
Average Net Assets .....................
Net Assets, End of Year (in thousands).....

(1) Total return assumes reinvestment of dividends and capital gains, if any.
</TABLE>

At Your Service

Make virtually any transaction online

Expand your investment options with American Century Brokerage

Send your distributions straight to the bank

Check out our library

More information about the funds is contained in these documents:

You also can get information about the funds (including the SAI) from the SEC.

v In person. SEC Public Reference Room
Washington, D.C.
Call 1-800-SEC-0330 for location and hours.

v On the internet. www.sec.gov.

v By mail. Public Reference Section
Washington, D.C.
20549-6009
The SEC will charge a fee for copying the documents
you request.

American Century Investments
P.O. Box 419200
Kansas City, Missouri 64141-6200

Investor Services
1-800-345-2021 or 816-531-5575

Automated Information Line
1-800-345-8765

Fax
816-340-7962

www.americancentury.com

Telecommunications Device for the Deaf
1-800-634-4113 or 816-444-3485

Corporate, Not-for-Profit, Keogh,
SEP-, SARSEP-, SIMPLE-IRA and 403(b) Services
1-800-345-3533

Investment Company Act File No. 811-0816
<PAGE>
[american century logo(reg.sm)]
American
Century

PROSPECTUS

January 29, 1999
- --------------------------------------------------------------------------------

AMERICAN CENTURY

Growth
Ultra
Select
Vista
Heritage

Advisor Class

The Securities and Exchange Commission has not approved or disapproved these
securities or determined if this Prospectus is accurate or complete. Anyone who
tells you otherwise is committing a crime.

Distributed by Funds Distributor, Inc.

Here's what you'll find:

o The funds' primary investments and risks

o A description of who may or may not want to invest in the funds

o Fund performance, including returns for each year, best and worst quarters
and average annual returns compared to the funds' benchmarks

o An overview of ways to best manage your accounts

o Helpful tips and definitions of key investment terms

Sincerely,

Mark Killen
Senior Vice President
American Century Investment Services, Inc.

Table of Contents

An Overview of the Funds.........................................2

Fees and Expenses................................................3

Detailed Information about the Funds.............................4

Growth
Ultra
Select
Vista
Heritage

Management.......................................................7

Investing with American Century.................................XX

Share Price and Distributions...................................XX

Taxes...........................................................XX

Multiple Class Information......................................XX

Financial Highlights............................................XX

Performance Information of Other Class..........................XX

Fund Reference
Fund Code Ticker
- -------------------------------------------------
Growth 020 TWRAX
Ultra 022 TWUAX
Select 021 TWCAX
Vista 024 TWVAX
Heritage 030 ATHAX
- -------------------------------------------------

**********LEFT MARGIN CALLOUTS

Throughout this book you'll find definitions of key investment terms and
phrases. When you see a word printed in green italics, look for its definition
in the left margin.

*........This symbol highlights special information and helpful tips.

**********END LEFT MARGIN CALLOUTS

An Overview of the Funds

What are the funds' investment goals?

These funds seek long-term capital growth.

What are the funds' primary investment strategies and principal risks?

The funds' principal risks include:

o Market Risk The value of a fund's shares will go up and down based on
the performance of the companies whose securities it owns
and other factors affecting the securities market generally.

o Price Volatility The value of the funds' shares may fluctuate significantly
in the short term.

o Principal Loss As with all mutual funds, if you sell your shares when their
value is less than the price you paid, you will lose money.

Who may want to invest in the funds?

The funds may be a good investment if you are

0 seeking long-term capital growth from your investment

0 comfortable with the funds' short-term price volatility

0 comfortable with the risks associated with the funds' investment strategy

0 investing through an IRA or other tax-advantaged retirement plan

Who may not want to invest in the funds?

The funds may not be a good investment if you are

0 seeking current income from your investment

0 investing for a short period of time

0 uncomfortable with short-term volatility in the value of your investment

**********LEFT MARGIN CALLOUTS

* An investment in the funds is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
government agency.

**********END LEFT MARGIN CALLOUTS

Fees and Expenses

There are no sales loads or fees or other charges

0 to buy fund shares directly from American Century

0 to reinvest dividends in additional shares

0 to exchange into the Advisor Class shares of other American Century funds.

The following tables describe the fees and expenses that you may pay if you buy
and hold shares of the funds.

<TABLE>
Annual Operating Expenses (expenses that are deducted from fund assets)
Management Fee Distribution and Service Other Expenses2 Total Annual Fund
(12b-1) Fees1 Operating Expenses
<S> <C> <C> <C> <C>
Growth 0.75% 0.50% 0.00% 1.25%
Ultra 0.75% 0.50% 0.00% 1.25%
Select 0.75% 0.50% 0.00% 1.25%
Vista 0.75% 0.50% 0.00% 1.25%
Heritage 0.75% 0.50% 0.00% 1.25%
</TABLE>

1 The 12b-1 fee is designed to permit investors to purchase Advisor Class
shares through broker-dealers, banks, insurance companies and other
financial intermediaries. A portion of the fee is used to compensate them
for ongoing recordkeeping and administrative services that would otherwise
be performed by an affiliate of the manager, and a portion is used to
compensate them for distribution and other shareholder services. See
"Service and Distribution Fees," page xx.

Example of Hypothetical Fund Costs

The examples in the table below are intended to help you compare the costs of
investing in a fund with those of other mutual funds. Assuming you ...

o invest $10,000 in the fund

o redeem all of your shares at the end of the periods shown below

o earn a 5% return each year and

o incur the same operating expenses shown above

... your cost of investing in the fund would be:

1 Year 3 Years 5 Years 10 Years
Growth $13 $40 $68 $150
Ultra $13 $40 $68 $150
Select $13 $40 $68 $150
Vista $13 $40 $68 $150
Heritage $13 $40 $68 $150

**********LEFT MARGIN CALLOUTS

* Use this example to compare the costs of investing in other funds. Of
course, your actual costs may be higher or lower.

**********END LEFT MARGIN CALLOUTS

Detailed Information about the Funds

Growth
Ultra
Select
Vista
Heritage

What are the funds' investment objectives?

These funds seek long-term capital growth. This is a fundamental policy and
cannot be changed without shareholder approval.

How do the funds pursue their investment objectives?

**********LEFT MARGIN CALLOUT

* Accelerating growth is shown, for example, by growth that is faster this
quarter than last or faster this year than the year before.

**********END LEFT MARGIN CALLOUT

What kinds of securities do the funds buy?

What is the difference between the funds?

0 Vista and Heritage generally invest in medium-sized and smaller companies,
although they may purchase companies of any size. Companies considered to
be medium sized generally have a market capitalization between $1 billion
and $5 billion, and smaller companies generally have a market
capitalization below $1 billion.

0 Eighty percent (80%) of Select's and 60% of Heritage's assets must be
invested in securities of companies that pay regular dividends, or have
committed to pay dividends, or otherwise produce income. This reflects the
funds' strategy to invest most of their assets in stocks of companies that
are successful enough to pay dividends. The amount of dividends may not be
significant, however, since stocks are not picked based upon the amount of
income they produce. The remaining 20% of Select's and 40% of Heritage's
assets may be invested in any other permissible securities that the fund
managers believe will help the funds achieve their objectives.

**********LEFT MARGIN CALLOUT

Market capitalization means the value of a company, as determined by
multiplying the number of shares of its stock outstanding by its current market
price per share.

**********END LEFT MARGIN CALLOUT

What are the primary risks of investing in the funds?

o The fund managers may buy a large amount of a company's stock quickly, and
often will dispose of it quickly if the company's earnings or revenues
decline. While the managers believe this strategy provides substantial
appreciation potential over the long term, in the short term it can create
a significant amount of share price volatility. This volatility can be
greater than that of the average stock fund.

o As with all funds, at any given time, the value of your shares 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.

o Market performance tends to be cyclical, and in the various cycles, certain
investment styles may fall in and out of favor. If the market is not
favoring the funds' style, the funds' gains may not be as big as, or their
losses may be bigger than, other equity funds using different investment
styles.

o Foreign securities can have certain unique risks, including fluctuations in
currency exchange rates, unstable political and economic structures,
reduced availability of public information and lack of uniform financial
reporting and regulatory practices similar to those that apply to U.S.
issuers. These factors make investing in foreign securities generally
riskier than investing in U.S. stocks. To the extent the fund invests in
foreign securities, the overall risk of the fund could be affected.

These funds are intended for investors who seek long-term capital growth through
an aggressive equity fund and who are willing to accept the risks associated
with the funds' investment strategies.

Fund Performance History

The performance information on this page is designed to help you see how fund
returns can vary. Keep in mind that past performance does not predict how the
funds will perform in the future.

Annual Total Returns

The following bar chart shows the performance of the funds' Advisor Class shares
for each full year in the life of the class if less than 10 years. It indicates
the volatility of the historical returns from year to year.

[GRAPH DEPICTING 10 YEAR ANNUAL TOTAL RETURNS FOR GROWTH, ULTRA, SELECT, VISTA
AND HERITAGE SINCE INCEPTION; UPDATED FIGURES NOT AVAILABLE]

Highest and Lowest Quarterly Returns
The highest and lowest returns of the funds' Advisor Class shares for a calendar
quarter during the life of the class if less than 10 years are provided below to
indicate the historical short-term volatility. Shareholders should be aware,
however, that these funds are intended for investors with a long-term investment
horizon and are not managed for short-term results.

[GRAPH DEPICTING HIGHEST AND LOWEST RETURNS FOR GROWTH, ULTRA, SELECT, VISTA AND
HERITAGE SINCE INCEPTION; UPDATED FIGURES NOT AVAILABLE]

Average Annual Returns

The following table shows the average annual returns of the funds' Advisor Class
shares for the periods indicated during the life of the class. The benchmarks
are included for long-term performance comparison. The benchmarks are unmanaged
indices that have no operating costs.

1 year Since Inception*
- ------------------------------------------------------------------
Growth XXX% XXX%
Russell 1000 Growth Index XXX% XXX%
- ------------------------------------------------------------------
Ultra XXX% XXX%
S&P 500 Index XXX% XXX%
- ------------------------------------------------------------------
Select XXX% XXX%
S&P 500 Index XXX% XXX%
- ------------------------------------------------------------------
Vista XXX% XXX%
Russell 2500 Growth Index XXX% XXX%
- ------------------------------------------------------------------
Heritage XXX% XXX%
S&P Mid Cap 400 Index XXX% XXX%
- ------------------------------------------------------------------
*The inception dates for the Advisor Class of the funds are Growth, June 4,
1997; Select, August 7, 1997; Ultra and Vista, October 1, 1996; and Heritage,
July 11, 1997.

**********LEFT MARGIN CALLOUTS

The funds' total returns for the period from January 1, 1998, to September 30,
1998, are:

Growth XXX%
Ultra XXX%
Select XXX%
Vista XXX%
Heritage XXX%

* For current performance information, please call us at 1-800-345-2021 or
visit American Century's Web site at www.americancentury.com.

**********END LEFT MARGIN CALLOUTS

Performance Information of Other Class
The original class of shares of the fund was the Investor Class of shares. The
Advisor Class was not established until 1996. For information about the
historical performance of the original class of shares, see page xx.

Management

Who manages the funds?

The Board of Directors, investment advisor and fund management team play key
roles in the management of the funds.

The Board of Directors

The Investment Advisor

For the services it provided to the funds during their most recent fiscal year,
the advisor received a unified management fee of 1.25% of the average net assets
of the Advisor Class of shares of the fund. The amount of the management fee is
calculated on a class-by-class basis daily and paid monthly. Out of that fee,
the advisor paid all expenses of managing and operating the fund except
brokerage expenses, taxes, interest, fees and expenses of the independent
Directors (including legal counsel fees) and extraordinary expenses.

The Fund Management Teams

Portfolio Manager members of the investment teams are identified below:

**********LEFT MARGIN CALLOUTS

* Code of Ethics

**********END LEFT MARGIN CALLOUTS

Fundamental Investment Policies

Year 2000 Issues

Investing With American Century
Eligibility for Advisor Class Shares
The Advisor Class shares are intended for purchase by participants in
employer-sponsored retirement or savings plans and for persons purchasing shares
through broker-dealers, banks, insurance companies and other financial
intermediaries that provide various administrative and distribution services.

Investing Through Financial Intermediaries

o minimum investment requirements
o exchange policies
o fund choices
o cut-off time for investments

Special requirements for large redemptions

**********LEFT MARGIN CALLOUTS

* Financial intermediaries include banks, broker-dealers, insurance companies
and investment advisors.

**********END LEFT MARGIN CALLOUTS

Share Price and Distributions

Share Price

We will price your purchase, exchange or redemption at the net asset value next
determined after we receive your transaction request in good order.

It is the responsibility of your plan recordkeeper or financial intermediary to
transmit your purchase, exchange and redemption requests to the funds transfer
agent prior to the applicable cut-off time for receiving orders and to make
payment for any purchase transactions in accordance with the funds' procedures
or any contractual arrangements with the funds or the funds' distributor in
order for you to receive that day's price.

We have contractual relationships with certain financial intermediaries in which
such intermediaries represent that they have systems to track the time at which
investment orders are received and to segregate orders received at different
times. Based on these representations, the funds have authorized such
intermediaries and their designees to accept purchase and redemption orders on
the funds' behalf up to the applicable cut-off time. The funds will be deemed to
have received such orders upon acceptance by the duly authorized intermediary,
and such orders will be priced at the funds' net asset value next determined
after acceptance on the funds' behalf by such intermediary.

Distributions

Federal tax laws require each fund to make distributions to its shareholders in
order to qualify as a "regulated investment company." Qualification as a
regulated investment company means that the funds will not be subject to state
or federal income tax on amounts distributed. The distributions generally
consist of dividends and interest received, as well as capital gains realized on
the sale of investment securities. Each fund generally pays distributions of
capital gains, if any, once a year in December. They may make more frequent
distributions if necessary to comply with Internal Revenue Code provisions.

**********LEFT MARGIN CALLOUTS

The net asset value of a fund is the price of the fund's shares.

Capital gains is the increase in value of a capital asset, such as stock, from
the time it is purchased. Tax becomes due on capital gains once the asset is
sold.

**********END LEFT MARGIN CALLOUTS

Taxes

Tax-Deferred Accounts

Taxable Accounts

If you own fund shares through a taxable account, distributions by the fund and
sales by you of fund shares may cause you to be taxed.

Taxability of Distributions

<TABLE>
Type of Distribution Tax rate for 15% Bracket Tax rate for 28% Bracket or above
- ------------------------------ ----------------------------- -------------------------------------
<S> <C> <C>
Short-term capital gains Ordinary income rate Ordinary income rate
Long-term capital gains 10% 20%
</TABLE>

Distributions also may be subject to state and local taxes. Because everyone's
tax situation is unique, always consult your tax professional about federal,
state and local tax consequences.

Taxes on Transactions

**********LEFT MARGIN CALLOUTS

* Buying a Dividend

**********END LEFT MARGIN CALLOUTS

Multiple Class Information

American Century offers three classes of the funds: Investor Class,
Institutional Class and Advisor Class. The shares offered by this Prospectus are
Advisor Class shares and are offered primarily to institutional investors,
through institutional distribution channels, such as employer-sponsored
retirement plans, or through banks, broker-dealers and insurance companies.

American Century offers another class of shares that has no up-front or deferred
charges, commissions or 12b-1 fees. The funds may offer a different class of
shares primarily to institutional investors, through institutional distribution
channels, such as employer-sponsored retirement plans, or through banks,
broker-dealers and insurance companies. The other classes have different fees,
expenses, and/or minimum investment requirements than the Advisor Class. The
difference in the fee structures among the classes is the result of their
separate arrangements for shareholder and distribution services and not the
result of any difference in amounts charged by the advisor for core investment
advisory services. Accordingly, the core investment advisory expenses do not
vary by class. Different fees and expenses will affect performance. For
additional information concerning the other classes of shares not offered by
this Prospectus, call us at 1-800-345-3533 or contact a sales representative or
financial intermediary who offers those classes of shares.

Service and Distribution Fees
Investment Company Act Rule 12b-1 permits mutual funds that adopt a written plan
to pay out of fund assets certain expenses associated with the distribution of
their shares. The funds' Advisor Class shares have a 12b-1 Plan. Under the Plan,
the fund pays an annual fee of 0.50% of fund assets, half for certain
shareholder and administrative services and half for distribution services. The
advisor, as paying agent for the funds, pays all or a portion of such fees to
the banks, broker-dealers and insurance companies that make such shares
available. Because these fees are paid out of the fund's assets on an on-going
basis, over time these fees will increase the cost of your investment and may
cost you more than paying other types of sales charges. For additional
information about the Plan and its terms, see "Multiple Class Structure - Master
Distribution and Shareholder Services Plan" in the Statement of Additional
Information.

Financial Highlights
Understanding the Financial Highlights

This table itemizes what contributed to the changes in share price during the
period, and compares this to changes over the last five fiscal years (or less,
if the share class is not five years old).

On a per-share basis, it includes:

o share price at the beginning of the period
o investment income and capital gains or losses
o distributions of income and capital gains paid to shareholders
o share price at the end of the period

It also includes some key statistics for the period:

Growth

1998 1997
PER-SHARE DATA
Net Asset Value, Beginning of Year
------------- --------------
Income from Investment Operations
Net Investment Income (dividends)
Net Realized and Unrealized Gain (Loss) on
Investment Transactions
------------- --------------
Total From Investment Operations
------------- --------------
Less Distributions
From Net Investment Income (dividends)
------------- --------------
------------- --------------
Net Asset Value, End of Year
------------- --------------
Total Return(1)
RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses to Average Net Assets
Ratio of Net Investment Income to Average Net Assets
Net Assets, End of Year (in thousands)

(1) Total return assumes reinvestment of dividends and capital gains, if any.

<TABLE>
<CAPTION>
Ultra

1998 1997 1996
PER-SHARE DATA
<S> <C> <C> <C>
Net Asset Value, Beginning of Year
------------- -------------- -------------
Income from Investment Operations
Net Investment Income (dividends)
------------- -------------- -------------
Less Distributions
From Net Investment Income (dividends)
------------- -------------- -------------
Net Asset Value, End of Year
------------- -------------- -------------
Total Return(1)
RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses to Average Net Assets
Ratio of Net Investment Income to Average Net Assets
Net Assets, End of Year (in thousands)
</TABLE>

(1) Total return assumes reinvestment of dividends and capital gains, if any.

Select

(1) Total return assumes reinvestment of dividends and capital gains, if any.

<TABLE>
<CAPTION>
Vista

(1) Total return assumes reinvestment of dividends and capital gains, if any.

Heritage

(1) Total return assumes reinvestment of dividends and capital gains, if any.

Performance Information of the Other Class
The Advisor Class of the funds was established in 1996. As a result, the
following financial information is provided to show the performance of the
funds' original class of shares. This class, the Investor Class, has a total
expense ratio that is 0.25% lower than the Advisor Class. If the Advisor Class
existed during the periods presented, its performance would have been lower
because of the additional expense.

This table itemizes what contributed to the changes in share price during the
period, and compares this to changes over the last five fiscal years (or less,
if the share class is not five years old).

On a per-share basis, it includes:

o share price at the beginning of the period
o investment income and capital gains or losses
o distributions of income and capital gains paid to shareholders
o share price at the end of the period

It also includes some key statistics for the period:

o total return--the overall percentage of return of the fund, assuming the
reinvestment of all distributions

o expense ratio--operating expenses as a percentage of average net assets

o net income ratio--net investment income as a percentage of average net
assets

o portfolio turnover--the percentage of the fund's buying and selling
activity

The following Financial Highlights for the fiscal years ended October 31, 1997
and 1998 have been audited by Deloitte & Touche, independent auditors. Their
report is in the funds' annual report, which is incorporated by reference into
the Statement of Additional Information, and is available upon request. Prior
years' information was audited by other independent auditors, whose report
thereon also is incorporated by reference into the Statement of Additional
Information.

<TABLE>
<CAPTION>
Growth

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses to
Average Net Assets .....................
Ratio of Net Investment Income to
Average Net Assets .....................
Net Assets, End of Year (in thousands).....

(1) Total return assumes reinvestment of dividends and capital gains, if any.
</TABLE>

<TABLE>
<CAPTION>
Select

(1) Total return assumes reinvestment of dividends and capital gains, if any.
</TABLE>

<TABLE>
<CAPTION>
Vista

(1) Total return assumes reinvestment of dividends and capital gains, if any.
</TABLE>

<TABLE>
<CAPTION>
Heritage

(1) Total return assumes reinvestment of dividends and capital gains, if any.
</TABLE>

More information about the funds is contained in these documents:

You also can get information about the funds (including the SAI) from the SEC.

v In person. SEC Public Reference Room
Washington, D.C.
Call 1-800-SEC-0330 for location and hours.
v On the internet. www.sec.gov.
v By mail. Public Reference Section
Washington, D.C.
20549-6009
The SEC will charge a fee for copying the documents
you request.

American Century Investments
P.O. Box 419385
Kansas City, Missouri 64141-6385

Institutional Services
1-800-345-3533 or 816-531-5575

Automated Information Line
1-800-345-8765

Fax
816-340-4655

www.americancentury.com

Telecommunications Device for the Deaf
1-800-345-1833 or 816-444-3038

Corporate, Not-for-Profit, Keogh,
SEP-, SARSEP-, SIMPLE-IRA and 403(b) Services
1-800-345-3533

Investment Company Act File No. 811-0816
<PAGE>
[american century logo(reg.sm)]
American
Century

Prospectus

- --------------------------------------------------------------------------------
January 29, 1999

AMERICAN CENTURY

Limited-Term Bond
Intermediate-Term Bond
Bond

Advisor Class

The Securities and Exchange Commission has not approved or disapproved these
securities or determined if this Prospectus is accurate or complete. Anyone who
tells you otherwise is committing a crime.

Distributed by Funds Distributor, Inc.

Here's what you'll find:

o The funds' primary investments and risks

o A description of who may or may not want to invest in the funds

o Fund performance, including returns for each year, best and worst quarters
and average annual returns compared to the funds' benchmarks

o An overview of ways to best manage your accounts

o Helpful tips and definitions of key investment terms

Sincerely,

Mark Killen
Senior Vice President
American Century Investment Services, Inc.

Table of Contents

An Overview of the Funds.............................................2

Fees and Expenses....................................................3

Detailed Information about the Funds.................................4

Limited-Term Bond
Intermediate-Term Bond
Bond

Basics of Fixed Income Investing....................................12

Management..........................................................15

Investing with American Century.....................................18

Share Price and Distributions.......................................21

Taxes...............................................................22

Multiple Class Information..........................................22

Financial Highlights................................................23

Performance Information of the Other Class..........................22

Fund Reference
Fund Code Ticker
- ---------------------------------------------------------
Limited-Term Bond 033 ABLAX
Intermediate-Term Bond 034 TWTAX
Bond 027 ABBAX
- ---------------------------------------------------------

**********LEFT MARGIN CALLOUTS

Throughout this book you'll find definitions to key investment terms and
phrases. When you see a word printed in green italics, look for its definition
in the left margin.

*.......This symbol highlights special information and helpful tips.

**********END LEFT MARGIN CALLOUTS

An Overview of the Funds

What are the funds' investment goals?

These funds seek income from investments in corporate bonds and other debt
obligations.

What are the funds' primary investments and risks?

<TABLE>
Fund Primary Investments Primary Risks
- ---------------------------- ------------------------------------------- -------------------------
<S> <C> <C>
Limited-Term Bond Quality short-term debt securities Liquidity risk
Some credit risk
Some interest rate risk
Intermediate-Term Bond Quality intermediate-term debt securities Liquidity risk
Some credit risk
Interest rate risk
Bond Quality intermediate- and longer-term Liquidity risk
debt securities Some credit risk
High interest rate risk
- ---------------------------- ------------------------------------------- -------------------------
</TABLE>

**********LEFT MARGIN CALLOUT

Debt securities means bonds, notes and debentures. Debt securities also are
sometimes called fixed income securities.

**********END LEFT MARGIN CALLOUT

Who may want to invest in the funds?

The funds may be a good investment if you are

0 seeking current income

0 comfortable with the funds' other investment risks

Who may not want to invest in the funds?

The funds may not be a good investment if you are

0 investing for long-term growth

0 looking for the added security of FDIC insurance

**********LEFT MARGIN CALLOUTS

An investment in the funds is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.

**********END LEFT MARGIN CALLOUTS

Fees and Expenses

There are no sales loads or fees or other charges

0 to buy fund shares directly from American Century

0 to reinvest dividends in additional shares

0 to exchange into the Advisor Class shares of other American Century funds

The following tables describe the fees and expenses that you may pay if you buy
and hold shares of the funds.

<TABLE>
Annual Operating Expenses (expenses that are deducted from fund assets)

Management Fee Distribution and Other Total Annual
Service (12b-1) Fees1 Expenses2 Fund Operating
Expenses
- ---------------------- --------------- ----------------------- ---------- ------------------
<S> <C> <C> <C> <C>
Limited-Term Bond 0.45% 0.50% 0.00% 0.95%
- ---------------------- --------------- ----------------------- ---------- ------------------
Intermediate-Term Bond 0.50% 0.50% 0.00% 1.00%
- ---------------------- --------------- ----------------------- ---------- ------------------
Bond 0.55% 0.50% 0.00% 1.05%
</TABLE>

2 Other expenses, which include the fees and expenses of the funds'
independent trustees, their legal counsel, interest and extraordinary
expenses, were less than 0.005% for the most recent fiscal year.

Examples of Hypothetical Fund Costs

The examples in the table below are intended to help you compare the costs of
investing in a fund with those of other mutual funds. Assuming you ...

o invest $10,000 in the fund

o redeem all of your shares at the end of the periods shown below

o earn a 5% return each year and

o incur the same operating expenses shown above,

... your cost of investing in the fund would be:

1 Year 3 Years 5 Years 10 Years
- ---------------------------- ---------- ---------- ---------- -----------
Limited-Term Bond $10 $30 $53 $117
- ---------------------------- ---------- ---------- ---------- -----------
Intermediate-Term Bond $10 $32 $55 $122
- ---------------------------- ---------- ---------- ---------- -----------
Bond $11 $33 $58 $128

**********LEFT MARGIN CALLOUTS

* Use this example to compare the costs of investing in other funds. Of
course, your actual costs may be higher or lower.

**********END LEFT MARGIN CALLOUTS

Detailed Information About the Funds

Limited-Term Bond
Intermediate-Term Bond
Bond

What are the funds' investment objectives?

These funds seek income from investments in corporate bonds and other debt
obligations.

How do the funds implement their investment objectives?

The funds invest most of their assets in quality debt securities of differing
maturities. However, up to 15% of the funds' assets may be invested in
securities rated in the fifth highest category by an independent rating agency,
or determined to be of comparable quality by the advisor. Corporations usually
issue these securities to finance existing operations or to expand their
business. The remainder will be invested in short-term money market instruments.
For more information about the funds' credit quality standards and about credit
risk, please see "Basics of Fixed Income Investing" beginning on page XX.

**********LEFT MARGIN CALLOUTS

**********END LEFT MARGIN CALLOUTS

What is the difference between the three funds?

The funds differ in the maturity of the debt securities they purchase. This
difference is shown on the chart below.

Expected Weighted Average Maturity Range
- -----------------------------------------------------------------------
Limited-Term Bond 1-5 years
Intermediate-Term Bond 3-10 years
Bond 8-20 years

What are the primary risks of investing in the funds?

Potential Income Potential Loss
- --------------------------------------------------------------------------
Limited-Term Bond Lower Lower
Intermediate-Term Bond Moderate Moderate
Bond Higher Higher

Although most of the securities purchased by the funds are quality debt
securities at the time of purchase, the funds may invest part of their assets in
securities rated in the lowest investment grade category (e.g., BBB) and up to
15% of their assets in securities rated in the fifth category (e.g., BB). As a
result, the funds have some credit risk. Although they are considered investment
grade, issuers of BBB rated securities (and securities of similar quality) are
more likely to have problems making interest and principal payments than issuers
of higher-rated securities. Issuers of BB rated securities (and securities of
similar quality) are considered to face major uncertainties or exposure to
adverse business, financial or economic conditions that could lead to
difficulties in making timely payments of principal and interest.

Fund Performance History

The performance information on this page is designed to help you understand how
fund returns can vary. Keep in mind that past performance does not predict how
the funds will perform in the future.

Annual Total Returns

[GRAPH DEPICTING 10 YEAR ANNUAL TOTAL RETURNS (OR SINCE INCEPTION) FOR
LIMITED-TERM BOND, INTERMEDIATE-TERM BOND AND BOND; UPDATED FIGURES NOT
AVAILABLE]

Highest and Lowest Quarterly Returns
The highest and lowest returns of the funds' Advisor Class shares for a quarter
during the life of the class if less than 10 years are provided below to
indicate the funds' historical short-term volatility.

[GRAPH DEPICTING HIGHEST AND LOWEST QUARTERLY RETURNS FOR LIMITED-TERM BOND,
INTERMEDIATE-TERM BOND AND BOND SINCE INCEPTION; UPDATED FIGURES NOT AVAILABLE]

Average Annual Returns

<TABLE>
1 year 5 years 10 years Life of Fund*
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Limited-Term Bond 3.17% N/A N/A 3.33%
Merrill Lynch 1- to 5-year Govt./Corp. Index X.XX% X.XX% X.XX% X.XX%
- --------------------------------------------------------------------------------------------------------------------
Intermediate-Term Bond 3.17% N/A N/A 3.33%
Lehman Intermediate Govt./Corp. Index X.XX% X.XX% X.XX% X.XX%
- --------------------------------------------------------------------------------------------------------------------
Bond 3.17% 3.12% 3.31% 3.33%
Lehman Aggregate Bond Index X.XX% X.XX% X.XX% X.XX%
</TABLE>

* The inception dates for the Advisor Class of the funds are: Limited-Term
Bond, November 12, 1997; Intermediate-Term Bond, August 14, 1997; and Bond,
August 8, 1997.

**********LEFT MARGIN CALLOUTS

The funds' total returns for the period from January 1, 1998, to September 30,
1998, are

Limited-Term Bond X.XX%
Intermediate-Term Bond X.XX%
Bond X.XX%

* For current performance information, including yields, please call us at
1-800-345-2021 or visit American Century's Web site at
www.americancentury.com

**********END LEFT MARGIN CALLOUTS
Performance Information of Other Class
The original class of shares of the fund was the Investor Class of shares. The
Advisor Class was not established until 1996. For information about the
historical performance of the original class of shares, see page xx.

Basics of Fixed Income Investing

Debt Securities

The fund managers decide which debt securities to buy and sell by

0 determining which securities help a fund meet its maturity requirements

0 identifying securities that satisfy a fund's credit quality requirements

0 evaluating the current economic conditions and assessing the risk of
inflation

0 evaluating special features of the securities that may make them more or
less attractive

Weighted Average Maturity

Types of Risk

The basic types of risk that the funds face are described below.

Interest Rate Risk

***********LEFT MARGIN CALLOUTS

* Weighted average maturity is a tool that the advisor uses to approximate
the remaining maturity of a fund's investment portfolio.

* The longer a fund's weighted average maturity, the more sensitive it is to
changes in interest rates.

***********END LEFT MARGIN CALLOUTS

The following table shows the effect of a 1% increase in interest rates on the
price of 7% coupon bonds of differing maturities:

<TABLE>
Remaining Maturity Current Price Price after 1% increase Change in price
- -------------------------- ------------------ -------------------------- ---------------------
<S> <C> <C> <C>
1 year $100.00 $99.06 -0.94%
3 years 100.00 97.38 -2.62%
10 years 100.00 93.20 -6.80%
30 years 100.00 88.69 -11.31%
</TABLE>

Credit Risk

Credit risk is the risk that an obligation won't be paid and a loss will result.
A high credit rating indicates a high degree of confidence by the rating
organization that the issuer will be able to withstand adverse business,
financial or economic conditions and be able to make interest and principal
payments on time. Currently, a lower credit rating indicates a greater risk of
nonpayment. A lower rating may also indicate that the issuer has a more senior
series of debt securities, which means that if the issuer has difficulties
making its payments, the more senior series of debt is first in line for
payment.

The following chart shows the authorized credit quality ranges for the funds
offered by this Prospectus.

- -------------------------------- -----------------------------------------------
INVESTMENT GRADE NON-INVESTMENT GRADE
- -------------------------------- -----------------------------------------------
A-1 A-2 A-3
P-1 P-2 P-3
MIG-1 MIG-2 MIG-3
SP-1 SP-2 SP-3
AAA AA A BBB BB B CCC CC C D
- ------ --------- ------- ------- ------- ------- -------- ------- ------- ------
Limited-Term Bond
- ----------------------------------------
Intermediate-Term Bond
- ----------------------------------------
Bond
- ---------------------------------------- ------- -------- ------- ------- ------

Securities rated in one of the highest four categories by a nationally
recognized securities rating organization (e.g., Moody's or Standard & Poor's)
are considered "investment grade." Although they are considered investment
grade, an investment in these securities still involves some credit risk since a
AAA rating is not a guarantee of payment. For a complete description of the
ratings system, see "Explanation of Fixed Income Securities Ratings" in the
Statement of Additional Information.

Liquidity Risk

Inflation Risk

**********LEFT MARGIN CALLOUTS

* Credit quality may be lower when the issuer has

o a high debt level
o a short operating history
o a senior level of debt
o a difficult competitive environment

* The Statement of Additional Information provides a detailed description of
these securities ratings.

**********END LEFT MARGIN CALLOUTS

A Comparison of Basic Risk Factors

<TABLE>
Interest Rate Risk Credit Risk Liquidity Risk Inflation Risk
- ----------------------------- -------------------- ------------- ---------------- ---------------
<S> <C> <C> <C> <C>
Limited-Term Bond Low Similar Similar High
Intermediate-Term Bond Medium Similar Similar Medium
Bond High Similar Similar Low
</TABLE>

Management

Who manages the funds?

The Board of Directors, investment advisor and fund management team play key
roles in the management of the funds.

The Board of Directors

The Board of Directors oversees the management of the funds and meets at least
quarterly to review reports about fund operations. Although the Board of
Directors does not manage the funds, it has hired an investment advisor to do
so. More than half of the directors are independent of the funds' advisor, that
is, they are not employed by and have no financial interest in the advisor.

The Investment Advisor

For the services it provided to the funds during their most recent fiscal year,
the advisor received a unified management fee based on a percentage of the
average net assets of the Advisor Class of shares of the fund. The amount of the
management fee for a fund is calculated on a class-by-class basis daily and paid
monthly. Out of that fee, the advisor paid all expenses of managing and
operating the fund except brokerage expenses, taxes, interest, fees and expenses
of the independent directors (including legal counsel fees) and extraordinary
expenses.

Fees Paid by the Funds to the Advisor for the Most Recent Fiscal
Year Ended October 31, 1998
- --------------------------------------------------------------------
Limited-Term Bond 0.95%
Intermediate-Term Bond 1.00%
Bond 1.05%

The Fund Management Team

Portfolio Manager members of the investment team are identified below:

**********LEFT MARGIN CALLOUTS

* Code of Ethics

**********END LEFT MARGIN CALLOUTS

Fundamental Investment Policies

Fundamental investment policies contained in the Statement of Additional
Information and the investment objectives of the funds may not be changed
without a shareholder vote. The Board of Trustees may change any other policies
and investment strategies.

Year 2000 Issues

Investing with American Century
Eligibility for Advisor Class Shares
The Advisor Class shares are intended for purchase by participants in
employer-sponsored retirement or savings plans and for persons purchasing shares
through broker-dealers, banks, insurance companies and other financial
intermediaries that provide various administrative and distribution services.

Investing Through Financial Intermediaries

o minimum investment requirements
o exchange policies
o fund choices
o cut-off time for investments

**********LEFT MARGIN CALLOUTS

* Financial intermediaries include banks, broker-dealers, insurance companies
and investment advisors.

**********END LEFT MARGIN CALLOUTS

Share Price and Distributions

Share Price

If current prices of securities owned by a fund are not readily available from
an independent pricing service, the advisor may determine their fair value in
accordance with procedures adopted by the fund's Board of Trustees. Trading of
securities in foreign markets may not take place on every day the Exchange is
open. Also, trading in some foreign markets may take place on weekends or
holidays when a fund's net asset value is not calculated. So, the value of a
fund's portfolio may be affected on days when you can't purchase or redeem
shares of the fund.

We will price your purchase, exchange or redemption at the net asset value next
determined after we receive your transaction request in good order.

It is the responsibility of your plan recordkeeper or financial intermediary to
transmit your purchase, exchange and redemption requests to the funds' transfer
agent prior to the applicable cut-off time for receiving orders and to make
payment for any purchase transactions in accordance with the funds' procedures
or any contractual arrangements with the funds or the funds' distributor in
order for you to receive that day's price.

Distributions

**********LEFT MARGIN CALLOUTS

The net asset value of a fund is the price of the fund's shares.

Capital gains is the increase in value of a capital asset, such as stock, from
the time it is purchased. Tax becomes due on capital gains once the asset is
sold.

**********END LEFT MARGIN CALLOUTS

Taxes

Tax-Deferred Accounts

Taxable Accounts

If you own fund shares through a taxable account, distributions by the fund and
sales by you of fund shares may cause you to be taxed.

Taxability of Distributions

<TABLE>
Type of distribution Tax rate for 15% bracket Tax rate for 28% bracket or above
- ---------------------------- ------------------------------ -------------------------------------
<S> <C> <C>
Short-term capital gains Ordinary income rate Ordinary income rate
Long-term capital gains 10% 20%
</TABLE>

Distributions may also be subject to state and local taxes. Because everyone's
tax situation is unique, always consult your tax professional about federal,
state and local tax consequences.

Taxes on transactions

**********LEFT MARGIN CALLOUTS

* Buying a Dividend

**********END LEFT MARGIN CALLOUTS

Multiple Class Information

Service and Distribution Fees

Investment Company Act Rule 12b-1 permits mutual funds that adopt a written plan
to pay out of fund assets certain expenses associated with the distribution of
their shares. The funds' Advisor Class shares have a 12b-1 Plan. Under the Plan,
the fund pays an annual fee of 0.50% of fund assets, half for certain
shareholder and administrative services and half for distribution services. The
advisor, as paying agent for the funds, pays all or a portion of such fees to
the banks, broker-dealers and insurance companies that make such shares
available. Because these fees are paid out of the fund's assets on an on-going
basis, over time these fees will increase the cost of your investment and may
cost you more than paying other types of sales charges. For additional
information about the Plan and its terms, see "Multiple Class Structure - Master
Distribution and Shareholder Services Plan" in the Statement of Additional
Information.

Financial Highlights

Understanding the Financial Highlights

This table itemizes what contributed to the changes in share price during the
period, and compares this to changes over the last five fiscal years (or less,
if the share class is not five years old).

On a per-share basis, it includes:

o share price at the beginning of the period
o investment income and capital gains or losses
o distributions of income and capital gains paid to shareholders
o share price at the end of the period

It also includes some key statistics for the period:

Limited-Term Bond

1998 1997
PER-SHARE DATA
Net Asset Value, Beginning of Year
------------- --------------
Income from Investment Operations
Net Investment Income (dividends)
Net Realized and Unrealized Gain (Loss) on
Investment Transactions
------------- --------------
Total From Investment Operations
------------- --------------
Less Distributions
From Net Investment Income (dividends)
In Excess of Net Realized Gains
------------- --------------
------------- --------------
Total Distributions
------------- --------------
Net Asset Value, End of Year
------------- --------------
Total Return(1)
RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses to Average Net Assets
Ratio of Net Investment Income to Average Net Assets
Portfolio Turnover Rate
Net Assets, End of Year (in thousands)

(1) Total return assumes reinvestment of dividends and capital gains, if any.

Intermediate-Term Bond

1998 1997
PER-SHARE DATA
Net Asset Value, Beginning of Year
------------- --------------
Income from Investment Operations
Net Investment Income (dividends)
Net Realized and Unrealized Gain (Loss) on
Investment Transactions
------------- --------------
Total From Investment Operations
------------- --------------
Less Distributions
From Net Investment Income (dividends)
In Excess of Net Realized Gains
------------- --------------
------------- --------------
Total Distributions
------------- --------------
Net Asset Value, End of Year
------------- --------------
Total Return(1)
RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses to Average Net Assets
Ratio of Net Investment Income to Average Net Assets
Portfolio Turnover Rate
Net Assets, End of Year (in thousands)

(1) Total return assumes reinvestment of dividends and capital gains, if any.

Bond

1998 1997
PER-SHARE DATA
Net Asset Value, Beginning of Year
------------- --------------
Income from Investment Operations
Net Investment Income (dividends)
Net Realized and Unrealized Gain (Loss) on
Investment Transactions
------------- --------------
Total From Investment Operations
------------- --------------
Less Distributions
From Net Investment Income (dividends)
In Excess of Net Realized Gains
------------- --------------
------------- --------------
Total Distributions
------------- --------------
Net Asset Value, End of Year
------------- --------------
Total Return(1)
RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses to Average Net Assets
Ratio of Net Investment Income to Average Net Assets
Portfolio Turnover Rate
Net Assets, End of Year (in thousands)

(1) Total return assumes reinvestment of dividends and capital gains, if any.

This table itemizes what contributed to the changes in share price during the
period, and compares this to changes over the last five fiscal years (or less,
if the share class is not five years old).

On a per-share basis, it includes:

o share price at the beginning of the period
o investment income and capital gains or losses
o distributions of income and capital gains paid to shareholders
o share price at the end of the period

It also includes some key statistics for the period:

o total return--the overall percentage of return of the fund, assuming the
reinvestment of all distributions
o expense ratio--operating expenses as a percentage of average net assets
o net income ratio--net investment income as a percentage of average net
assets
o portfolio turnover--the percentage of the fund's buying and selling
activity

The following Financial Highlights have been audited by Deloitte & Touche,
independent auditors. Their report is in the funds' annual report, which is
incorporated by reference into the Statement of Additional Information, and is
available upon request. Prior years' information was audited by other
independent auditors, whose report thereon also is incorporated by reference
into the Statement of Additional Information.

<TABLE>
<CAPTION>
Limited-Term Bond

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses to
Average Net Assets .....................
Ratio of Net Investment Income to
Average Net Assets .....................
Net Assets, End of Year (in thousands).....

(1) Total return assumes reinvestment of dividends and capital gains, if any.
</TABLE>

<TABLE>
<CAPTION>
Intermediate-Term Bond

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses to
Average Net Assets .....................
Ratio of Net Investment Income to
Average Net Assets .....................
Net Assets, End of Year (in thousands).....

(1) Total return assumes reinvestment of dividends and capital gains, if any.
</TABLE>

<TABLE>
<CAPTION>
Bond

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses to
Average Net Assets .....................
Ratio of Net Investment Income to
Average Net Assets .....................
Net Assets, End of Year (in thousands).....

(1) Total return assumes reinvestment of dividends and capital gains, if any.
</TABLE>

More information about the funds is contained in these documents:

You also can get information about the funds (including the SAI) from the SEC.

American Century Investments
P.O. Box 419385
Kansas City, Missouri 64141-6385

Institutional Services
1-800-345-3533 or 816-531-5575

Automated Information Line
1-800-345-8765

Fax
816-340-4655

www.americancentury.com

Telecommunications Device for the Deaf
1-800-345-1833 or 816-444-3038

Corporate, Not-for-Profit, Keogh,
SEP-, SARSEP-, SIMPLE-IRA and 403(b) Services
1-800-345-3533

Investment Company Act File No. 811-0816
<PAGE>
[american century logo(reg.sm)]
American
Century

Prospectus

January 29, 1999
- --------------------------------------------------------------------------------

AMERICAN CENTURY

Balanced

Advisor Class

The Securities and Exchange Commission has not approved or disapproved these
securities or determined if this Prospectus is accurate or complete. Anyone who
tells you otherwise is committing a crime.

Distributed by Funds Distributor, Inc.

Here's what you'll find:

o The funds' primary investments and risks

o A description of who may or may not want to invest in the funds

o Fund performance, including returns for each year, best and worst quarters
and average annual returns compared to the funds' benchmarks

o An overview of ways to best manage your accounts

o Helpful tips and definitions of key investment terms

Sincerely,

Mark Killen
Senior Vice President
American Century Investment Services, Inc.

Table of Contents

An Overview of the Fund.....................................2

Fees and Expenses...........................................3

Detailed Information about the Fund.........................4

Management.................................................15

Investing with American Century............................18

Share Price and Distributions..............................21

Taxes......................................................22

Multiple Class Information.................................22

Financial Highlights.......................................23

Performance Information of Other Class.....................XX

Fund Reference
Fund Code Ticker
- -------------------------------------------------
Balanced 031 TWBAX
- -------------------------------------------------

**********LEFT MARGIN CALLOUTS

Throughout this book you'll find definitions of key investment terms and
phrases. When you see a word printed in green italics, look for its definition
in the left margin.

*.......This symbol highlights special information and helpful tips.

**********END LEFT MARGIN CALLOUTS

An Overview of the Fund

What is the fund's investment goal?

What is the fund's primary investment strategy?

What are the fund's principal risks?

o Market Risk the value of the fund's shares will go up and down based on
the performance of the companies whose securities it owns
and other factors affecting the securities market generally.

o Interest Rate Risk when interest rates change, the value of the fund's
fixed-income securities will be affected.

o Principal Loss as with all mutual funds, if you sell your shares when their
value is less than the price you paid, you will lose money.

Who may want to invest in the fund?

The fund may be a good investment if you are

0 seeking a fund that combines the potential for long-term capital growth
with income

0 seeking the convenience of a fund that invests in both equity and
fixed-income securities

0 comfortable with the risks associated with the fund's investment strategy

0 investing through an IRA or other tax-advantaged retirement plan

Who may not want to invest in the fund?

The fund may not be a good investment if you

0 do not want current income from your investment

0 investing for a short period of time

0 uncomfortable with volatility in the value of your investment

**********LEFT MARGIN CALLOUTS

* An investment in the fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
government agency.

**********END LEFT MARGIN CALLOUTS

Fees and Expenses

There are no sales loads or fees or other charges

0 to buy fund shares directly from American Century

0 to reinvest dividends in additional shares

0 to exchange into the Advisor Class shares of other American Century funds.

The following tables describe the fees and expenses that you may pay if you buy
and hold shares of the fund.

<TABLE>
Annual Operating Expenses (expenses that are deducted from fund assets)

Management Fee Distribution and Other Expenses2 Total Annual Fund
Service (12b-1) Fees1 Operating Expenses
- -------------- ------------------ ------------------------- ------------------- ---------------------
<S> <C> <C> <C> <C>
Balanced 0.75% 0.50% 0.00% 1.25%
- -------------- ------------------ ------------------------- ------------------- ---------------------
</TABLE>

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 of Hypothetical Fund Costs

The examples in the table below are intended to help you compare the costs of
investing in a fund with those of other mutual funds. Assuming you ...

o invest $10,000 in the fund

o redeem all of your shares at the end of the periods shown below

o earn a 5% return each year and

o incur the same operating expenses shown above

... your cost of investing in the fund would be:

1 Year 3 Years 5 Years 10 Years
- ------------ ---------- ---------- ---------- -----------
Balanced $13 $40 $68 $150
- ------------ ---------- ---------- ---------- -----------

**********LEFT MARGIN CALLOUTS

* Use this example to compare the costs of investing in other funds. Of
course, your actual costs may be higher or lower.

**********END LEFT MARGIN CALLOUTS

Detailed Information about the Fund

Balanced

What is the fund's investment objective?

How does the fund pursue its investment objective?

**********LEFT MARGIN CALLOUTS

**********END LEFT MARGIN CALLOUTS

**********LEFT MARGIN CALLOUTS

**********END LEFT MARGIN CALLOUTS

What are the primary risks of investing in the fund?

The value of Balanced's shares depends on the value of the stocks, bonds and
other securities it owns.

Fund Performance History

The performance information on this page is designed to help you see how fund
returns can vary. Keep in mind that past performance does not predict how the
funds will perform in the future.

Annual Total Returns

The following bar chart shows the performance of the fund's Advisor Class shares
for each full year in the life of the class if less than 10 years. It indicates
the volatility of the historical returns from year to year.

[GRAPH DEPICTING ANNUAL TOTAL RETURNS FOR BALANCED SINCE INCEPTION; UPDATED
FIGURES NOT AVAILABLE]

Highest and Lowest Quarterly Returns
The highest and lowest returns of the fund's Advisor Class shares for a calendar
quarter during the life of the class are provided below to indicate the
historical short-term volatility. Shareholders should be aware, however, that
the fund is intended for investors with a long-term investment horizon and are
not managed for short-term results.

[GRAPH DEPICTING HIGHEST AND LOWEST RETURNS FOR BALANCED SINCE INCEPTION;
UPDATED FIGURES NOT AVAILABLE]

Average Annual Returns

The following table shows the average annual returns of the fund's Advisor Class
shares for the periods indicated during the life of the class. The Blended Index
is included as a benchmark for performance comparison. The benchmark is an
unmanaged index that has no operating costs.

1 year 5 years 10 years
- ---------------------------------------------------------
Balanced XXX% XXX% XX.X%
Blended Index* XXX% XXX% XX.X%
- ---------------------------------------------------------

The inception date for the Advisor Class of the fund is January 6, 1997.

**********LEFT MARGIN CALLOUTS

The fund's total return for the period from January 1, 1998, to September 30,
1998, is:

Balanced X.XX%

* For current performance information, please call us at 1-800-345-2021 or
visit American Century's Web site at www.americancentury.com.

**********END LEFT MARGIN CALLOUTS

Management

Who manages the fund?

The Board of Directors, investment advisor and portfolio management team play
key roles in the management of the fund.

The Board of Directors

The Investment Advisor

For the services it provided to the fund during its most recent fiscal year, the
advisor received a unified management fee of 1.25% the average net assets of the
Advisor Class of shares of the fund. The amount of the management fee is
calculated on a class-by-class basis daily and paid monthly. Out of that fee,
the advisor pays all expenses of managing and operating the fund except
brokerage expenses, taxes, interest, fees and expenses of the independent
Directors (including legal fees) and extraordinary expenses.

The Fund Management Team

Portfolio manager members of the investment team are identified below:

Norman E. Hoops
Norman E. Hoops, Senior Vice President and Portfolio Manager, has been a member
of the team that manages Balanced since November 1989. He joined American
Century as Vice President and Portfolio Manager in November 1989. In April 1993,
he became Senior Vice President. He has a bachelor of arts degree from Indiana
University and an MBA from Butler University.

John Schniedwind
John Schniedwind, Senior Vice President and Group Leader-Quantitative Equity,
has been a member of the team that manages Balanced since November 1998. He
joined American Century in 1982 and also supervises other portfolio management
teams. He has a bachelor of science degree from Purdue University and an MBA in
finance from University of California. He is a Chartered Financial Analyst.

Jeffrey R. Tyler
Jeffrey R. Tyler, Senior Vice President and Portfolio Manager, has been a member
of the team that manages Balanced since November 1998. He has been with American
Century as a portfolio manager since January 1988. He has a bachelor's degree in
business economics from the University of California and an MBA in finance and
economics from Northwestern University. He is a Chartered Financial Analyst.

Jeffrey L. Houston
Jeffrey L. Houston, Portfolio Manager, has been a member of the team that
manages Balanced since June 1995. He joined American Century as an Investment
Analyst in November 1990 and was promoted to Portfolio Manager in 1994. He has a
bachelor of arts degree from the University of Delaware and an MPA from Syracuse
University. He is a Chartered Financial Analyst.

**********LEFT MARGIN CALLOUTS

* Code of Ethics

**********END LEFT MARGIN CALLOUTS

Fundamental Investment Policies

Year 2000 Issues

Many of the world's computer systems currently cannot properly recognize or
process date-sensitive information relating to the Year 2000 and beyond. Because
this may impact the computer systems of various American Century-affiliated and
external service providers for the fund, American Century formally initiated a
Year 2000 readiness project in July 1997. It involves a team of information
technology professionals assisted by outside consultants and guided by a
senior-level steering committee. The team's goal is to assess the impact of the
Year 2000 on American Century's systems, renovate or replace noncompliant
critical systems and test those systems. In addition, the team has been working
to gather information about the Year 2000 efforts of the fund's other major
service providers. Although American Century believes its critical systems will
function properly in the Year 2000, this is not guaranteed. If the efforts of
American Century or its external service providers are not successful, the
fund's business, particularly the provision of shareholder services, may be
hampered.

Investing Through Financial Intermediaries

o minimum investment requirements
o exchange policies
o fund choices
o cut-off time for investments

American Century has contracts with certain financial intermediaries in which
they represent that they will track the time investment orders are received. The
fund has authorized those intermediaries to accept orders on each fund's behalf
up to the time net asset value is determined. Such orders will be priced at the
net asset value next determined after acceptance of the order on a fund's
behalf.

Special requirements for large redemptions

**********LEFT MARGIN CALLOUTS

* Financial intermediaries include banks, broker-dealers, insurance companies
and investment advisors.

**********END LEFT MARGIN CALLOUTS

Share Price and Distributions

Share Price

If current prices of securities owned by a fund are not readily available from
an independent pricing service, the advisor may determine their fair value in
accordance with procedures adopted by the fund's Board of Directors. Trading of
securities in foreign markets may not take place on every day the Exchange is
open. Also, trading in some foreign markets may take place on weekends or
holidays when the fund's net asset value is not calculated. So, the value of the
fund's portfolio may be affected on days when you can't purchase or redeem its
shares.

We will price your purchase, exchange or redemption at the net asset value next
determined after we receive your transaction request in good order.

It is the responsibility of your plan recordkeeper or financial intermediary to
transmit your purchase, exchange and redemption requests to the fund's transfer
agent prior to the applicable cut-off time for receiving orders and to make
payment for any purchase transactions in accordance with the fund's procedures
or any contractual arrangements with the fund or the fund's distributor in order
for you to receive that day's price.

We have contractual relationships with certain financial intermediaries in which
such intermediaries represent that they have systems to track the time at which
investment orders are received and to segregate orders received at different
times. Based on these representations, the fund has authorized such
intermediaries and their designees to accept purchase and redemption orders on
the fund's behalf up to the applicable cut-off time. The fund will be deemed to
have received such orders upon acceptance by the duly authorized intermediary,
and such orders will be priced at the fund's net asset value next determined
after acceptance on the fund's behalf by such intermediary.

Distributions

Federal tax laws require the fund to make distributions to its shareholders in
order to qualify as a "regulated investment company." Qualification as a
regulated investment company means that the fund will not be subject to state or
federal income tax on amounts distributed. The distributions generally consist
of dividends and interest received by the fund, as well as capital gains
realized on the sale of investment securities. Balanced generally pays
distributions of capital gains, if any, once a year in December. The fund may
make more frequent distributions if necessary to comply with Internal Revenue
Code provisions.

**********LEFT MARGIN CALLOUTS

The net asset value of the fund is the price of its shares.

Capital gains is the increase in value of a capital asset, such as stock, from
the time it is purchased. Tax becomes due on capital gains once the asset is
sold.

**********END LEFT MARGIN CALLOUTS

Taxes

Tax-Deferred Accounts

Taxable Accounts

If you own fund shares through a taxable account, distributions by the fund and
sales by you of fund shares may cause you to be taxed.

Taxability of Distributions

<TABLE>
Type of distribution Tax rate for 15% bracket Tax rate for 28% bracket or above
- ---------------------------- --------------------------- ----------------------------------
<S> <C> <C>
Short-term capital gains Ordinary income rate Ordinary income rate
Long-term capital gains 10% 20%
</TABLE>

The tax status of any distribution of capital gains is determined by how long
the fund held the underlying security that was sold, not by how long you have
been invested in the fund or whether you reinvest your distributions in
additional shares or take them as income. American Century will send you a
detail of the tax status of fund distributions for each calendar year in an
annual tax statement from the fund.

Distributions may also be subject to state and local taxes. Because everyone's
tax situation is unique, always consult your tax professional about federal,
state and local tax consequences.

Taxes on Transactions

Your redemptions -- including exchanges to other American Century funds -- are
subject to capital gains tax. The table above can provide a general guide for
your potential tax liability when selling or exchanging fund shares. "Short-term
capital gains" are gains on fund shares held less than or equal to 12 months.
"Long-term capital gains" are gains on fund shares held for more than 12 months.
If your shares decrease in value, their sale or exchange will result in a
long-term or short-term capital loss.

**********LEFT MARGIN CALLOUTS

* Buying a Dividend

**********END LEFT MARGIN CALLOUTS

Multiple Class Information

American Century offers another class of shares that has no up-front or deferred
charges, commissions or 12b-1 fees. The fund may offer a different class of
shares primarily to institutional investors, through institutional distribution
channels, such as employer-sponsored retirement plans, or through banks,
broker-dealers and insurance companies. The other classes have different fees,
expenses, and/or minimum investment requirements than the Advisor Class. The
difference in the fee structures among the classes is the result of their
separate arrangements for shareholder and distribution services and not the
result of any difference in amounts charged by the advisor for core investment
advisory services. Accordingly, the core investment advisory expenses do not
vary by class. Different fees and expenses will affect performance. For
additional information concerning the other classes of shares not offered by
this Prospectus, call us at 1-800-345-3533 or contact a sales representative or
financial intermediary who offers those classes of shares.

Service and Distribution Fees
Investment Company Act Rule 12b-1 permits mutual funds that adopt a written plan
to pay out of fund assets certain expenses associated with the distribution of
their shares. The fund's Advisor Class shares have a 12b-1 Plan. Under the Plan,
the fund pays an annual fee of 0.50% of fund assets, half for certain
shareholder and administrative services and half for distribution services. The
advisor, as paying agent for the funds, pays all or a portion of such fees to
the banks, broker-dealers and insurance companies that make such shares
available. Because these fees are paid out of the fund's assets on an on-going
basis, over time these fees will increase the cost of your investment and may
cost you more than paying other types of sales charges. For additional
information about the Plan and its terms, see "Multiple Class Structure - Master
Distribution and Shareholder Services Plan" in the Statement of Additional
Information.

Financial Highlights

Understanding the Financial Highlights

This table itemizes what contributed to the changes in share price during the
period, and compares this to changes over the last five fiscal years (or less,
if the share class is not five years old).

On a per-share basis, it includes:

o share price at the beginning of the period
o investment income and capital gains or losses
o distributions of income and capital gains paid to shareholders
o share price at the end of the period

It also includes some key statistics for the period:

Balanced

(1) Total return assumes reinvestment of dividends and capital gains, if any.

Performance Information of the Other Class

The Advisor Class of the funds was established in 1996. As a result, the
following financial information is provided to show the performance of the
funds' original class of shares. This class, the Investor Class, has a total
expense ratio that is 0.25% lower than the Advisor Class. If the Advisor Class
existed during the periods presented, its performance would have been lower
because of the additional expense.

This table itemizes what contributed to the changes in share price during the
period, and compares this to changes over the last five fiscal years (or less,
if the share class is not five years old).

On a per-share basis, it includes:

o share price at the beginning of the period
o investment income and capital gains or losses
o distributions of income and capital gains paid to shareholders
o share price at the end of the period

It also includes some key statistics for the period:

The following Financial Highlights for the fiscal years ended October 31, 1997
and 1998 have been audited by Deloitte & Touche, independent auditors. Their
report is in the funds' annual report, which is incorporated by reference into
the Statement of Additional Information, and is available upon request. Prior
years' information was audited by other independent auditors whose report
thereon also is incorporated by reference into the Statement of Additional
Information.

<TABLE>
<CAPTION>
Balanced

1998 1997 1996 1995 1994
PER-SHARE DATA
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year
------------- -------------- ------------- ------------- --------------
Income from Investment Operations
Net Investment Income (dividends)
Net Realized and Unrealized Gain (Loss) on
Investment Transactions
------------- -------------- ------------- ------------- --------------
Total From Investment Operations
------------- -------------- ------------- ------------- --------------
Less Distributions
From Net Investment Income (dividends)
------------- -------------- ------------- ------------- --------------
------------- -------------- ------------- ------------- --------------
Net Asset Value, End of Year
------------- -------------- ------------- ------------- --------------
Total Return(1)
RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses to Average Net Assets
Ratio of Net Investment Income to Average Net Assets
Net Assets, End of Year (in thousands)
</TABLE>

(1) Total return assumes reinvestment of dividends and capital gains, if any.

More information about the funds is contained in these documents:

You also can get information about the funds (including the SAI) from the SEC.

American Century Investments
P.O. Box 419385
Kansas City, Missouri 64141-6385

Institutional Services
1-800-345-3533 or 816-531-5575

Automated Information Line
1-800-345-8765

Fax
816-340-4655

www.americancentury.com

Telecommunications Device for the Deaf
1-800-345-1833 or 816-444-3038

Corporate, Not-for-Profit, Keogh,
SEP-, SARSEP-, SIMPLE-IRA and 403(b) Services
1-800-345-3533

Investment Company Act File No. 811-0816
<PAGE>
[american century logo(reg.sm)]
American
Century

Prospectus

January 29, 1999
- --------------------------------------------------------------------------------

AMERICAN CENTURY

High-Yield

Advisor Class

The Securities and Exchange Commission has not approved or disapproved these
securities or determined if this Prospectus is accurate or complete. Anyone who
tells you otherwise is committing a crime.

Distributed by Funds Distributor, Inc.

Here's what you'll find:

o The fund's primary investments and risks

o A description of who may or may not want to invest in the fund

o Fund performance, including returns for each year, best and worst quarters
and average annual returns compared to the fund's benchmarks

o An overview of ways to best manage your accounts

o Helpful tips and definitions of key investment terms

Sincerely,

Mark Killen
Senior Vice President
American Century Investment Services, Inc.

Table of Contents

An Overview of the Fund.....................................2

Fees and Expenses...........................................3

Detailed Information about the Fund.........................4

Basics of Fixed Income Investing............................6

Management..................................................8

Investing with American Century............................12

Share Price and Distributions..............................15

Taxes......................................................16

Multiple Class Information.................................17

Financial Highlights.......................................18

Performance Information of Other Class.....................18

Fund Reference
Fund Code Ticker
- -------------------------------------------------
High-Yield 101 ABHIX
- -------------------------------------------------

**********LEFT MARGIN CALLOUTS

Throughout this book you'll find definitions of key investment terms and
phrases. When you see a word printed in green italics, look for its definition
in the left margin.

*........This symbol highlights special information and helpful tips.

**********END LEFT MARGIN CALLOUTS

An Overview of the Fund

What is the fund's investment goals?

This fund seeks high current income. As a secondary objective, the fund seeks
capital appreciation, but only when consistent with its primary objective of
maximizing current income.

What are the fund's primary investment strategies and principal risks?

o credit risk
o liquidity risk
o interest rate risk

Additional important information about the fund's investment strategies and
risks begin on page 4.

**********LEFT MARGIN CALLOUT

Debt securities means bonds, notes and debentures. Debt securities also are
sometimes called fixed income securities.

**********END LEFT MARGIN CALLOUT

Who may want to invest in the fund?

The funds may be a good investment if you are

0 seeking high current income with the potential for capital gains

0 investing through an IRA or other tax-advantaged retirement plan

Who may not want to invest in the fund?

The fund may not be a good investment if you are

0 uncomfortable with the risk of investing in lower-rated debt securities

0 looking for the added security of FDIC insurance

**********LEFT MARGIN CALLOUTS

* An investment in the fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
government agency.

**********END LEFT MARGIN CALLOUTS

Fees and Expenses

There are no sales loads or fees or other charges

0 to buy fund shares directly from American Century

0 to reinvest dividends in additional shares

0 to exchange into the Advisor Class shares of other American Century funds

The following tables describe the fees and expenses that you may pay if you buy
and hold shares of the fund.

<TABLE>
Annual Operating Expenses (expenses that are deducted from fund assets)

Management Fee Distribution and Service Other Expenses2 Total Annual Fund
(12b-1) Fee1 Operating Expenses
- --------------- ------------------ ---------------------------- ------------------ ----------------------
<S> <C> <C> <C> <C>
High-Yield 0.65% 0.50% 0.00% 1.15%
- --------------- ------------------ ---------------------------- ------------------ ----------------------
</TABLE>

Examples of Hypothetical Fund Costs

The examples in the table below are intended to help you compare the costs of
investing in the fund with those of other mutual funds. Assuming you. . .

o invest $10,000 in the fund

o redeem all of your shares at the end of the periods shown below

o earn a 5% return each year and

o incur the same operating expenses shown above

. . . your cost of investing in the fund would be:

1 Year 3 Years 5 Years 10 Years
- ---------------- ---------- ---------- ---------- ------------
High-Yield $12 $37 $63 $140
- ---------------- ---------- ---------- ---------- ------------

**********LEFT MARGIN CALLOUTS

* Use this example to compare the costs of investing in other funds. Of
course, your actual costs may be higher or lower.

**********END LEFT MARGIN CALLOUTS

Detailed Information About the Fund

High-Yield

What is the fund's investment objective?

The fund seeks high current income by investing in a diversified portfolio of
high-yielding corporate bonds and other debt securities.

How does the fund pursue its investment objective?

The fund invests primarily in high-yield corporate debt securities, with an
emphasis on securities that are rated below investment grade.

**********LEFT MARTIN CALLOUT

**********END LEFT MARTIN CALLOUT

The fund has no average maturity limitations, but it typically invests in
intermediate- and long-term bonds.

What are the primary risks of investing in the fund?

Fund Performance History
The Advisor Class of shares was established in 1997, however, no shares had been
issued prior to the fund's fiscal year end. The original class of shares was the
Investor Class of shares. For information about the historical performance of
the original class of shares, see page xx.

Basics of Fixed Income Investing

Debt Securities

The fund managers decide which debt securities to buy and sell by

0 identifying securities that satisfy the fund's credit quality requirements

0 evaluating the current economic conditions and assessing the risk of
inflation

0 evaluating special features of the securities that may make them more or
less attractive

Weighted Average Maturity

Types of Risk

The basic types of risk that fixed income securities face are described below.

Interest Rate Risk

Generally, interest rates and the prices of debt securities move in opposite
directions. So when interest rates fall, the prices of most debt securities
rise; when interest rates rise, prices fall. Because the fund invests in debt
securities, changes in interest rates will affect the fund's performance.

***********LEFT MARGIN CALLOUTS

* Weighted average maturity is a tool that the advisor uses to approximate
the remaining maturity of a fund's investment portfolio.

* The longer a fund's weighted average maturity, the more sensitive it is to
changes in interest rates.

***********END LEFT MARGIN CALLOUTS

Remaining Maturity Current Price Price after 1% increase Change in price
- ------------------ ----------------- ------------------------- -----------------
1 year $100.00 $99.06 -0.94%
3 years 100.00 97.38 -2.62%
10 years 100.00 93.20 -6.80%
30 years 100.00 88.69 -11.31%

Credit Risk

Credit risk is the risk that an obligation won't be paid and a loss will result.
A high credit rating indicates a high degree of confidence by the ratings
organization that the issuer will be able to withstand adverse business,
financial or economic conditions and be able to make interest and principal
payments on time. Conversely, a lower credit rating indicates a greater risk of
nonpayment. A lower rating may also indicate that the issuer has a more senior
series of debt securities, which means that if the issuer has difficulties
making its payments, the more senior series of debt is first in line for
payment.

It's not as simple as buying the highest rated debt securities, though. Higher
credit ratings usually mean lower interest rates, so investors often purchase
securities that aren't the highest-rated to increase return. If a fund, such as
High-Yield, purchases lower-rated securities in an effort to achieve higher
yields, it assumes additional credit risk.

The following chart shows the authorized credit quality ranges for the fund
offered by this Prospectus.

- ------- --------- ------ ------- -------- ------ -------- ------- ------ -------
A-1 A-2 A-3
P-1 P-2 P-3
MIG-1 MIG-2 MIG-3
SP-1 SP-2 SP-3
AAA AA A BBB BB B CCC CC C D
- ------------------------ -------------------------------- ----------------------
XX YY XX
- ------------------------ -------------------------------- ----------------------

XX Denotes authorized quality

YY Denotes expected quality range of at least 80% of total assets of the fund

Liquidity Risk

Inflation Risk

**********LEFT MARGIN CALLOUTS

* Credit quality may be reduced when

o a high debt level
o a short operating history
o a senior level of debt
o a difficult competitive environment

* The Statement of Additional Information provides a detailed description of
these securities ratings.

**********END LEFT MARGIN CALLOUTS

Management

Who manages the funds?

The Board of Directors, investment advisor and fund management team play key
roles in the management of the funds.

The Board of Directors

The Investment Advisor

For the services it provided to the fund during its most recent fiscal year, the
advisor received a unified management fee of 1.15% percentage of the average net
assets of the Advisor Class of shares of the fund. The amount of the management
fee for the fund is calculated on a class-by-class basis daily and paid monthly.
Out of that fee, the advisor paid all expenses of managing and operating the
fund except brokerage expenses, taxes, interest, fees and expenses of the
independent Directors (including legal counsel fees) and extraordinary expenses.

The Fund Management Team

Portfolio Manager members of the investment team are identified below:

**********LEFT MARGIN CALLOUTS

* Code of Ethics

**********END LEFT MARGIN CALLOUTS

Fundamental Investment Policies

Year 2000 Issues

Many of the world's computer systems currently cannot properly recognize or
process date-sensitive information relating to the Year 2000 and beyond. Because
this may impact the computer systems of various American Century-affiliated and
external service providers for the fund, American Century formally initiated a
Year 2000 readiness project in July 1997. It involves a team of information
technology professionals assisted by outside consultants and guided by a
senior-level steering committee. The team's goal is to assess the impact of the
Year 2000 on American Century's systems, renovate or replace noncompliant
critical systems and test those systems. In addition, the team has been working
to gather information about the Year 2000 efforts of the fund's other major
service providers. Although American Century believes its critical systems will
function properly in the Year 2000, this is not guaranteed. If the efforts of
American Century or its external service providers are not successful, the
fund's business, particularly the provision of shareholder services, may be
hampered.

Investing Through Financial Intermediaries

o minimum investment requirements
o exchange policies
o fund choices
o cut-off time for investments

**********LEFT MARGIN CALLOUTS

* Financial intermediaries include banks, broker-dealers, insurance companies
and investment advisors.

**********END LEFT MARGIN CALLOUTS

Share Price and Distributions

Share Price

We determine the net asset value of the fund as of the close of regular trading
on the New York Stock Exchange (usually 4 p.m. Eastern time) on each day the
Exchange is open. On days when the Exchange is not open, we do not calculate the
net asset value. The net asset value of a fund share is the current value of its
investments, minus any liabilities, divided by the number of fund shares
outstanding.

We will price your purchase, exchange or redemption at the net asset value next
determined after we receive your transaction request in good order.

It is the responsibility of your plan recordkeeper or financial intermediary to
transmit your purchase, exchange and redemption requests to the fund's transfer
agent prior to the applicable cut-off time for receiving orders and to make
payment for any purchase transactions in accordance with the fund's procedures
or any contractual arrangements with the fund's or the fund's distributor in
order for you to receive that day's price.

We have contractual relationships with certain financial intermediaries in which
such intermediaries represent that they have systems to track the time at which
investment orders are received and to segregate orders received at different
times. Based on these representations, the fund has authorized such
intermediaries and their designees to accept purchase and redemption orders on
the fund's behalf up to the applicable cut-off time. The fund will be deemed to
have received such orders upon acceptance by the duly authorized intermediary,
and such orders will be priced at the fund's net asset value next determined
after acceptance on the fund's behalf by such intermediary.

Distributions

**********LEFT MARGIN CALLOUTS

The net asset value of a fund is the price of the fund's shares.

Capital gains is the increase in value of a capital asset, such as stock, from
the time it is purchased. Tax becomes due on capital gains once the asset is
sold.

**********END LEFT MARGIN CALLOUTS

Taxes

Tax-Deferred Accounts

Taxable Accounts

If you own fund shares through a taxable account, distributions by the fund and
sales by you of fund shares may cause you to be taxed.

Taxability of Distributions

Type of Distribution Tax rate for 15% Bracket Tax rate for 28% Bracket
or above
- ------------------------- ---------------------------- -------------------------
Short-term capital gains Ordinary income rate Ordinary income rate
Long-term capital gains 10% 20%

Distributions also may be subject to state and local taxes. Because everyone's
tax situation is unique, always consult your tax professional about federal,
state and local tax consequences.

Taxes on Transactions

**********LEFT MARGIN CALLOUTS

* Buying a Dividend

**********END LEFT MARGIN CALLOUTS

Multiple Class Information

Service and Distribution Fees
Investment Company Act Rule 12b-1 permits mutual funds that adopt a written plan
to pay out of fund assets certain expenses associated with the distribution of
their shares. The fund's Advisor Class shares have a 12b-1 Plan. Under the Plan,
the fund pays an annual fee of 0.50% of fund assets, half for certain
shareholder and administrative services and half for distribution services. The
advisor, as paying agent for the fund, pays all or a portion of such fees to the
banks, broker-dealers and insurance companies that make such shares available.
Because these fees are paid out of the fund's assets on an on-going basis, over
time these fees will increase the cost of your investment and may cost you more
than paying other types of sales charges. For additional information about the
Plan and its terms, see "Multiple Class Structure - Master Distribution and
Shareholder Services Plan" in the Statement of Additional Information.

Performance Information of the Other Class
The Advisor Class of the fund was established in 1997. As a result, the
following financial information is provided to show the performance of the
fund's original class of shares. This class, the Investor Class, has a total
expense ratio that is 0.25% lower than the Advisor Class. If the Advisor Class
existed during the periods presented, its performance would have been lower
because of the additional expense.

This table itemizes what contributed to the changes in share price during the
period, and compares this to changes over the last five fiscal years (or less,
if the share class is not five years old).

On a per-share basis, it includes:

o share price at the beginning of the period
o investment income and capital gains or losses
o distributions of income and capital gains paid to shareholders
o share price at the end of the period

It also includes some key statistics for the period:

The following Financial Highlights have been audited by Deloitte & Touche,
independent auditors. Their report is in the fund's annual report, which is
incorporated by reference into the Statement of Additional Information, and is
available upon request.

High-Yield

(1) Total return assumes reinvestment of dividends and capital gains, if any.

More information about the funds is contained in these documents:

You also can get information about the funds (including the SAI) from the SEC.

American Century Investments
P.O. Box 419385
Kansas City, Missouri 64141-6385

Institutional Services
1-800-345-3533 or 816-531-5575

Automated Information Line
1-800-345-8765

Fax
816-340-4655

www.americancentury.com

Telecommunications Device for the Deaf
1-800-345-1833 or 816-444-3038

Corporate, Not-for-Profit, Keogh,
SEP-, SARSEP-, SIMPLE-IRA and 403(b) Services
1-800-345-3533

Investment Company Act File No. 811-0816
<PAGE>
[american century logo(reg.sm)]
American
Century

Prospectus

January 29, 1999
- --------------------------------------------------------------------------------

AMERICAN CENTURY

Growth
Ultra
Select
Vista
Heritage

Institutional Class

The Securities and Exchange Commission has not approved or disapproved these
securities or determined if this Prospectus is accurate or complete. Anyone who
tells you otherwise is committing a crime.

Distributed by Funds Distributor, Inc.

Here's what you'll find:

o The fund's primary investments and risks

o A description of who may or may not want to invest in the fund

o Fund performance, including returns for each year, best and worst quarters
and average annual returns compared to the fund's benchmarks

o An overview of ways to best manage your accounts

o Helpful tips and definitions of key investment terms

Sincerely,

Mark Killen
Senior Vice President
American Century Investment Services, Inc.

Table of Contents

An Overview of the Funds..................................2

Fees and Expenses.........................................3

Detailed Information about the Funds......................4

Growth
Ultra
Select
Vista
Heritage

Management................................................7

Investing with American Century..........................XX

Share Price and Distributions............................XX

Taxes....................................................XX

Multiple Class Information...............................XX

Financial Highlights.....................................XX

Performance Information of Other Class...................XX

Fund Reference
Fund Code Ticker
- ----------------------------------------------------
Growth 020 TWGIX
Ultra 022 TWUIX
Select 021 TWSIX
Vista 024 TWVIX
Heritage 030 ATHIX
- ----------------------------------------------------

**********LEFT MARGIN CALLOUTS

Throughout this book you'll find definitions of key investment terms and
phrases. When you see a word printed in green italics, look for its definition
in the left margin.

*........This symbol highlights special information and helpful tips.

**********END LEFT MARGIN CALLOUTS

An Overview of the Funds

What are the funds' investment goals?

These funds seek long-term capital growth.

What are the funds' primary investment strategies and principal risks?

The funds' principal risks include:

o Market Risk The value of a fund's shares will go up and down based on
the performance of the companies whose securities it owns
and other factors affecting the securities market generally.

o Price Volatility The value of the funds' shares may fluctuate significantly
in the short term.

o Principal Loss As with all mutual funds, if you sell your shares when their
value is less than the price you paid, you will lose money.

Who may want to invest in the funds?

The funds may be a good investment if you are

0 seeking long-term capital growth from your investment

0 comfortable with the funds' short-term price volatility

0 comfortable with the risks associated with the funds' investment strategy

0 investing through an IRA or other tax-advantaged retirement plan

Who may not want to invest in the funds?

The funds may not be a good investment if you are

0 seeking current income from your investment

0 investing for a short period of time

0 uncomfortable with short-term volatility in the value of your investment

**********LEFT MARGIN CALLOUTS

* An investment in the funds is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
government agency.

**********END LEFT MARGIN CALLOUTS

Fees and Expenses

There are no sales loads or fees or other charges

0 to buy fund shares directly from American Century

0 to reinvest dividends in additional shares

0 to exchange into the Institutional Class shares of other American Century
funds.

The following tables describe the fees and expenses that you may pay if you buy
and hold shares of the funds.

<TABLE>
Annual Operating Expenses (expenses that are deducted from fund assets)

Management Fee Distribution and Other Expenses1 Total Annual Fund
Service (12b-1) Fees Operating Expenses
<S> <C> <C> <C>
Growth 0.80% None 0.00% 0.80%
Ultra 0.80% None 0.00% 0.80%
Select 0.80% None 0.00% 0.80%
Vista 0.80% None 0.00% 0.80%
Heritage 0.80% None 0.00% 0.80%
</TABLE>

1 Other expenses, which include the fees and expenses of the funds'
independent directors, their legal counsel, interest and extraordinary
expenses, were less than 0.005% for the most recent fiscal year.

Example of Hypothetical Fund Costs

The examples in the table below are intended to help you compare the costs of
investing in a fund with those of other mutual funds. Assuming you ...

o invest $10,000 in the fund

o redeem all of your shares at the end of the periods shown below

o earn a 5% return each year and

o incur the same operating expenses shown above

... your cost of investing in the fund would be:

1 Year 3 Years 5 Years 10 Years
Growth $82 $255 $443 $987
Ultra $82 $255 $443 $987
Select $82 $255 $443 $987
Vista $82 $255 $443 $987
Heritage $82 $255 $443 $987

**********LEFT MARGIN CALLOUTS

* Use this example to compare the costs of investing in other funds. Of
course, your actual costs may be higher or lower.

**********END LEFT MARGIN CALLOUTS

Detailed Information about the Funds

Growth
Ultra
Select
Vista
Heritage

What are the funds' investment objectives?

These funds seek long-term capital growth. This is a fundamental policy and
cannot be changed without shareholder approval.

How do the funds pursue their investment objectives?

**********LEFT MARGIN CALLOUT

* Accelerating growth is shown, for example, by growth that is faster this
quarter than last or faster this year than the year before.

**********END LEFT MARGIN CALLOUT

What kinds of securities do the funds buy?

What is the difference between the funds?

**********LEFT MARGIN CALLOUT

Market capitalization means the value of a company, as determined by
multiplying the number of shares of its stock outstanding by its current market
price per share.

**********END LEFT MARGIN CALLOUT

What are the primary risks of investing in the funds?

These funds are intended for investors who seek long-term capital growth through
an aggressive equity fund and who are willing to accept the risks associated
with the funds' investment strategies.

Fund Performance History

The performance information on this page is designed to help you see how fund
returns can vary. Keep in mind that past performance does not predict how the
funds will perform in the future.

Annual Total Returns

The following bar chart shows the performance of the funds' Institutional Class
shares for each full year in the life of the class. It indicates the volatility
of the historical returns from year to year.

[GRAPH DEPICTING 10 YEAR ANNUAL TOTAL RETURNS FOR GROWTH, ULTRA, SELECT, VISTA
AND HERITAGE SINCE INCEPTION; UPDATED FIGURES NOT AVAILABLE]

Highest and Lowest Quarterly Returns
The highest and lowest returns of the funds' Institutional Class shares for a
calendar quarter during the life of the class are provided below to indicate the
historical short-term volatility. Shareholders should be aware, however, that
these funds are intended for investors with a long-term investment horizon and
are not managed for short-term results.

[GRAPH DEPICTING HIGHEST AND LOWEST RETURNS FOR GROWTH, ULTRA, SELECT, VISTA AND
HERITAGE SINCE INCEPTION; UPDATED FIGURES NOT AVAILABLE]

Average Annual Returns

The following table shows the average annual returns of the funds' Institutional
Class shares for the periods indicated during the life of the class. The
benchmarks are included for long-term performance comparison. The benchmarks are
unmanaged indices that have no operating costs.

1 year Life of fund1
- --------------------------------------------------------------
Growth XXX% XXX%
Russell 1000 Growth Index XXX% XXX%
- --------------------------------------------------------------
Ultra XXX% XXX%
S&P 500 Index XXX% XXX%
- --------------------------------------------------------------
Select XXX% XXX%
S&P 500 Index XXX% XXX%
- --------------------------------------------------------------
Vista XXX% XXX%
Russell 2500 Growth Index XXX% XXX%
- --------------------------------------------------------------
Heritage XXX% XXX%
S&P Mid Cap 400 Index XXX% XXX%
- --------------------------------------------------------------

1 The inception dates for the Institutional Class of the funds are Growth
and Heritage, June 16, 1997; Select, March 13, 1997; and Ultra and
Vista, November 14, 1996.

**********LEFT MARGIN CALLOUTS

The funds' total returns for the period from January 1, 1998, to September 30,
1998, are:

Growth XXX%
Ultra XXX%
Select XXX%
Vista XXX%
Heritage XXX%

* For current performance information, please call us at 1-800-345-2021 or
visit American Century's Web site at www.americancentury.com.

**********END LEFT MARGIN CALLOUTS

Performance Information of Other Class
The original class of shares of the fund was the Investor Class of shares. The
Institutional Class was not established until 1996. For information about the
historical performance of the original class of shares, see page xx.

Management

Who manages the funds?

The Board of Directors, investment advisor and fund management team play key
roles in the management of the funds.

The Board of Directors

The Investment Advisor

For the services it provided to the funds during their most recent fiscal year,
the advisor received a unified management fee of 0.80% of the average net assets
of the Institutional Class of shares of the fund. The amount of the management
fee is calculated on a class-by-class basis daily and paid monthly. Out of that
fee, the advisor paid all expenses of managing and operating the fund except
brokerage expenses, taxes, interest, fees and expenses of the independent
Directors (including legal counsel fees) and extraordinary expenses.

The Fund Management Teams

Portfolio Manager members of the investment teams are identified below:

**********LEFT MARGIN CALLOUTS

* Code of Ethics

**********END LEFT MARGIN CALLOUTS

Fundamental Investment Policies

Year 2000 Issues

Investing With American Century

Eligibility for Institutional Class Shares

The Institutional Class shares are made available for purchase by large
institutional shareholders, such as bank trust departments, corporations,
retirement plans, endowments, foundations and financial advisors that meet the
fund's minimum investment requirements. Institutional Class shares are not
available for purchase by insurance companies for variable annuity and variable
life products.

Minimum Initial Investment Amounts

The minimum investment is $5 million ($3 million for endowments and foundations)
per fund. If you invest with us through a financial intermediary, the minimum
investment requirement may be met by aggregating the investments of various
clients of your financial intermediary. The minimum investment requirement may
be waived if you or your financial intermediary, if applicable, has an aggregate
investment in our family of funds of $10 million or more ($5 million for
endowments and foundations). Retirement plans may also be required to meet
certain other requirements, such as plan size or a minimum level of assets per
participant, in order to be eligible to purchase Institutional Class shares.

Redemption of shares in below-minimum accounts

If your balance or the balance of your financial intermediary, if applicable,
falls below the minimum investment requirements due to redemptions or exchanges,
we reserve the right to convert your shares to Investor Class shares of the same
fund. The Investor Class shares have a unified management fee that is 0.20%
higher than the Institutional Class.

Services Automatically Available to You

You automatically will have access to the services listed below when you open
your account. If you do not want these services, see "Conducting Business in
Writing" below.

Conducting Business in Writing

Exchange shares
Call us if you have authorized us to accept
telephone instructions.
- ---------------------------------- ---------------------------------------------- -----------------------------------------------
- ---------------------------------- ---------------------------------------------- -----------------------------------------------
By mail or fax Open an account Make additional investments
PO Box 419385 Send a signed and completed Send us your check or money order for at
Kansas City, MO 64141-6385 application and check or money order least $50 with an investment slip or $250
payable to American Century without an investment slip. If you don't have
Fax 816-340-4655 Investments. an investment slip, include your name,
address and account number on your check or
Exchange shares money order.
Send us written instructions to
exchange your shares from one Sell shares
American Century account to another. Send us written instructions to sell shares or
send us a redemption form. Call an Institutional
Service Representative to request a form.

A Note About Mailings to Shareholders

Your Guide to Services and Policies

When you open an account, you will receive an Investor Services Guide, which
explains the services available to you and the policies of the fund and the
transfer agent.

- -------------------------------- ------------------------------------------------ -----------------------------------------------
By wire Open an account Make additional investments
Call us to set up your account or mail Follow the wire instructions provided in the
a completed application to the address "Open an account" section
provided in the "By Mail" section and
give your bank: Sell shares
o Our bank information: You can receive redemption proceeds by
- Commerce Bank N.A. wire or electronic transfer. (This
- Routing No. 101000019 service is not available if you have
- ACMF Account No. 2804918 chosen to do business in writing only.)
o The fund name
o Your American Century account number
o Your name
o The contribution year (for IRAs only)
Exchange shares
Not available.
- -------------------------------- ------------------------------------------------ -----------------------------------------------
Automatically Open an account Make additional investments
Not available. Select "Establish Automatic Investments" on
your application to make automatic purchases
Sell shares of shares on a regular basis. You must invest
If you have at least $10,000 in your at least $600 per year per account.
account, sell shares automatically by
establishing Check-A-Month or Exchange shares
Automatic Redemption. Send us written instructions to set up an
automatic exchange of your shares from one
American Century account to another.
</TABLE>

Special requirements for large redemptions

**********LEFT MARGIN CALLOUTS

* Financial intermediaries include banks, broker-dealers, insurance companies
and investment advisors.

**********END LEFT MARGIN CALLOUTS

Share Price and Distributions

Share Price

We will price your purchase, exchange or redemption at the net asset value next
determined after we receive your transaction request in good order.

Distributions

Federal tax laws require each fund to make distributions to its shareholders in
order to qualify as a "regulated investment company." Qualification as a
regulated investment company means that the funds will not be subject to state
or federal income tax on amounts distributed. The distributions generally
consist of dividends and interest received, as well as capital gains realized on
the sale of investment securities. Each fund generally pays distributions of
capital gains, if any, once a year in December. They may make more frequent
distributions if necessary to comply with Internal Revenue Code provisions.

**********LEFT MARGIN CALLOUTS

The net asset value of a fund is the price of the fund's shares.

Capital gains is the increase in value of a capital asset, such as stock, from
the time it is purchased. Tax becomes due on capital gains once the asset is
sold.

**********END LEFT MARGIN CALLOUTS

Taxes

Tax-Deferred Accounts

Taxable Accounts

If you own fund shares through a taxable account, distributions by the fund and
sales by you of fund shares may cause you to be taxed.

Taxability of Distributions

<TABLE>
Type of Distribution Tax rate for 15% Bracket Tax rate for 28% Bracket or
above
- ----------------------------- ------------------------------ ---------------------------------
<S> <C> <C>
Short-term capital gains Ordinary income rate Ordinary income rate
Long-term capital gains 10% 20%
</TABLE>

Distributions also may be subject to state and local taxes. Because everyone's
tax situation is unique, always consult your tax professional about federal,
state and local tax consequences.

Taxes on Transactions

**********LEFT MARGIN CALLOUTS

* Buying a Dividend

**********END LEFT MARGIN CALLOUTS

Multiple Class Information

American Century offers three classes of the funds: Investor Class,
Institutional Class and Advisor Class. The shares offered by this Prospectus are
Institutional Class shares and are offered primarily to institutional investors,
through institutional distribution channels, such as employer-sponsored
retirement plans, or through banks, broker-dealers and insurance companies.

American Century offers another class of shares that has no up-front or deferred
charges, commissions or 12b-1 fees. The funds may offer a different class of
shares primarily to institutional investors, through institutional distribution
channels, such as employer-sponsored retirement plans, or through banks,
broker-dealers and insurance companies. The other classes have different fees,
expenses, and/or minimum investment requirements than the Institutional Class.
The difference in the fee structures among the classes is the result of their
separate arrangements for shareholder and distribution services and not the
result of any difference in amounts charged by the advisor for core investment
advisory services. Accordingly, the core investment advisory expenses do not
vary by class. Different fees and expenses will affect performance. For
additional information concerning the other classes of shares not offered by
this Prospectus, call us at 1-800-345-3533 or contact a sales representative or
financial intermediary who offers those classes of shares.

Financial Highlights
Understanding the Financial Highlights

This table itemizes what contributed to the changes in share price during the
period, and compares this to changes over the last five fiscal years (or less,
if the share class is not five years old).

On a per-share basis, it includes:

o share price at the beginning of the period
o investment income and capital gains or losses
o distributions of income and capital gains paid to shareholders
o share price at the end of the period

It also includes some key statistics for the period:

o Total Return--the overall percentage of return of the fund, assuming the
reinvestment of all distributions

o Expense Ratio--operating expenses as a percentage of average net assets

o Net Income Ratio--net investment income as a percentage of average net
assets

o Portfolio Turnover--the percentage of the fund's buying and selling
activity

<TABLE>
<CAPTION>
Growth

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses to
Average Net Assets .....................
Ratio of Net Investment Income to
Average Net Assets .....................
Net Assets, End of Year (in thousands).....

(1) Total return assumes reinvestment of dividends and capital gains, if any.
</TABLE>

<TABLE>
<CAPTION>
Select

(1) Total return assumes reinvestment of dividends and capital gains, if any.
</TABLE>

<TABLE>
<CAPTION>
Vista

(1) Total return assumes reinvestment of dividends and capital gains, if any.
</TABLE>

<TABLE>
<CAPTION>
Heritage

(1) Total return assumes reinvestment of dividends and capital gains, if any.
</TABLE>

Performance Information of the Other Class
The Institutional Class of the funds was established in 1996. As a result, the
following financial information is provided to show the performance of the
funds' original class of shares. This class, the Investor Class, has a total
expense ratio that is 0.20% higher than the Institutional Class. If the
Institutional Class existed during the periods presented, its performance would
have been higher because of the lower expense.

This table itemizes what contributed to the changes in share price during the
period, and compares this to changes over the last five fiscal years (or less,
if the share class is not five years old).

On a per-share basis, it includes:

o share price at the beginning of the period
o investment income and capital gains or losses
o distributions of income and capital gains paid to shareholders
o share price at the end of the period

It also includes some key statistics for the period:

o total return--the overall percentage of return of the fund, assuming the
reinvestment of all distributions

o expense ratio--operating expenses as a percentage of average net assets

o net income ratio--net investment income as a percentage of average net
assets

o portfolio turnover--the percentage of the fund's buying and selling
activity

The following Financial Highlights for the fiscal years ended October 31, 1997
and 1998, have been audited by Deloitte & Touche, independent auditors. Their
report is in the funds' annual report, which is incorporated by reference into
the Statement of Additional Information, and is available upon request. Prior
years' information was audited by other independent auditors, whose report
thereon also is incorporated by reference into the Statement of Additional
Information.

Growth

(1) Total return assumes reinvestment of dividends and capital gains, if any.

<TABLE>
<CAPTION>
Ultra

(1) Total return assumes reinvestment of dividends and capital gains, if any.

Select

(1) Total return assumes reinvestment of dividends and capital gains, if any.

<TABLE>
<CAPTION>
Vista

(1) Total return assumes reinvestment of dividends and capital gains, if any.

Heritage

(1) Total return assumes reinvestment of dividends and capital gains, if any.

More information about the funds is contained in these documents:

You also can get information about the funds (including the SAI) from the SEC.

American Century Investments
P.O. Box 419385
Kansas City, Missouri 64141-6385

Institutional Services
1-800-345-3533 or 816-531-5575

Automated Information Line
1-800-345-8765

Fax
816-340-4655

www.americancentury.com

Telecommunications Device for the Deaf
1-800-345-1833 or 816-444-3038

Corporate, Not-for-Profit, Keogh,
SEP-, SARSEP-, SIMPLE-IRA and 403(b) Services
1-800-345-3533

Investment Company Act File No. 811-0816
<PAGE>
[american century logo(reg.sm)]
American
Century

Prospectus

January 29, 1999
- --------------------------------------------------------------------------------

AMERICAN CENTURY

Balanced

INSTITUTIONAL Class

The Securities and Exchange Commission has not approved or disapproved these
securities or determined if this Prospectus is accurate or complete. Anyone who
tells you otherwise is committing a crime.

Distributed by Funds Distributor, Inc.

Here's what you'll find:

o The fund's primary investments and risks

o A description of who may or may not want to invest in the fund

o Fund performance, including returns for each year, best and worst quarters
and average annual returns compared to the fund's benchmarks

o An overview of ways to best manage your accounts

o Helpful tips and definitions of key investment terms

Sincerely,

Mark Killen
Senior Vice President
American Century Investment Services, Inc.

Table of Contents

An Overview of the Fund....................................2

Fees and Expenses..........................................3

Detailed Information about the Fund........................4

Management................................................15

Investing with American Century...........................18

Share Price and Distributions.............................21

Taxes.....................................................22

Multiple Class Information................................22

Financial Highlights......................................23

Performance Information of the Other Class................XX

Fund Reference
Fund Code
- --------------------------------------
Balanced 031
- --------------------------------------

**********LEFT MARGIN CALLOUTS

Throughout this book you'll find definitions of key investment terms and
phrases. When you see a word printed in green italics, look for its definition
in the left margin.

*........This symbol highlights special information and helpful tips.

**********END LEFT MARGIN CALLOUTS

An Overview of the Fund

What is the fund's investment goal?

What is the fund's primary investment strategy?

What are the fund's principal risks?

o Market Risk the value of the fund's shares will go up and down based on
the performance of the companies whose securities it owns
and other factors affecting the securities market generally.

oInterest Rate Risk when interest rates change, the value of the fund's
fixed-income securities will be affected.

o Principal Loss as with all mutual funds, if you sell your shares when their
value is less than the price you paid, you will lose money.

Who may want to invest in the fund?

The fund may be a good investment if you are

0 seeking a fund that combines the potential for long-term capital growth
with income

0 seeking the convenience of a fund that invests in both equity and
fixed-income securities

0 comfortable with the risks associated with the fund's investment strategy

0 investing through an IRA or other tax-advantaged retirement plan

Who may not want to invest in the fund?

The fund may not be a good investment if you

0 do not want current income from your investment

0 investing for a short period of time

0 uncomfortable with volatility in the value of your investment

**********LEFT MARGIN CALLOUTS

* An investment in the fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
government agency.

**********END LEFT MARGIN CALLOUTS

Fees and Expenses

There are no sales loads or fees or other charges

0 to buy fund shares directly from American Century

0 to reinvest dividends in additional shares

0 to exchange into the Institutional Class shares of other American Century
funds.

The following tables describe the fees and expenses that you may pay if you buy
and hold shares of the fund.

<TABLE>
Annual Operating Expenses (expenses that are deducted from fund assets)

Management Fee Distribution and Other Expenses1 Total Annual Fund
Service (12b-1) Fees Operating Expenses
- --------------- -------------------- ----------------------- ------------------ ---------------------
<S> <C> <C> <C>
Balanced 0.80% None 0.00% 0.80%
- --------------- -------------------- ----------------------- ------------------ ---------------------
</TABLE>

Example of Hypothetical Fund Costs

The examples in the table below are intended to help you compare the costs of
investing in a fund with those of other mutual funds. Assuming you ...

o invest $10,000 in the fund

o redeem all of your shares at the end of the periods shown below

o earn a 5% return each year and

o incur the same operating expenses shown above

... your cost of investing in the fund would be:

1 Year 3 Years 5 Years 10 Years
- --------------- ---------- ----------- ----------- -----------
Balanced $82 $255 $443 $987
- --------------- ---------- ----------- ----------- -----------

**********LEFT MARGIN CALLOUTS

* Use this example to compare the costs of investing in other funds. Of
course, your actual costs may be higher or lower.

**********END LEFT MARGIN CALLOUTS

Detailed Information about the Fund

Balanced

What is the fund's investment objective?

How does the fund pursue its investment objective?

**********LEFT MARGIN CALLOUTS

**********END LEFT MARGIN CALLOUTS

**********LEFT MARGIN CALLOUTS

**********END LEFT MARGIN CALLOUTS

What are the primary risks of investing in the fund?

The value of Balanced's shares depends on the value of the stocks, bonds and
other securities it owns.

Fund Performance History

The Institutional Class of shares was established in 1996, however, no shares
had been issued prior to the fund's fiscal year end. The original class of
shares was the Investor Class of shares. For information about the historical
performance of the original class of shares, see page xx

Management

Who manages the fund?

The Board of Directors, investment advisor and portfolio management team play
key roles in the management of the fund.

The Board of Directors

The Investment Advisor

For the services it provided to the fund during its most recent fiscal year, the
advisor received a unified management fee of 0.80% the average net assets of the
Institutional Class of shares of the fund. The amount of the management fee is
calculated on a class by class basis daily and paid monthly. Out of that fee,
the advisor pays all expenses of managing and operating the fund except
brokerage expenses, taxes, interest, fees and expenses of the independent
Directors (including legal fees) and extraordinary expenses.

The Fund Management Team

Portfolio manager members of the investment team are identified below:

**********LEFT MARGIN CALLOUTS

* Code of Ethics

**********END LEFT MARGIN CALLOUTS

Fundamental Investment Policies

Year 2000 Issues

Many of the world's computer systems currently cannot properly recognize or
process date-sensitive information relating to the Year 2000 and beyond. Because
this may impact the computer systems of various American Century-affiliated and
external service providers for the fund, American Century formally initiated a
Year 2000 readiness project in July 1997. It involves a team of information
technology professionals assisted by outside consultants and guided by a
senior-level steering committee. The team's goal is to assess the impact of the
Year 2000 on American Century's systems, renovate or replace noncompliant
critical systems and test those systems. In addition, the team has been working
to gather information about the Year 2000 efforts of the fund's other major
service providers. Although American Century believes its critical systems will
function properly in the Year 2000, this is not guaranteed. If the efforts of
American Century or its external service providers are not successful, the
fund's business, particularly the provision of shareholder services, may be
hampered.

Investing with American Century

Eligibility for Institutional Class Shares

Minimum Initial Investment Amounts

The minimum investment is $5 million ($3 million for endowments and foundations)
for the fund. If you invest with us through a financial intermediary, the
minimum investment requirement may be met by aggregating the investments of
various clients of your financial intermediary. The minimum investment
requirement may be waived if you or your financial intermediary, if applicable,
has an aggregate investment in our family of funds of $10 million or more ($5
million for endowments and foundations). Retirement plans may also be required
to meet certain other requirements, such as plan size or a minimum level of
assets per participant, in order to be eligible to purchase Institutional Class
shares.

Redemption of shares in below-minimum accounts

Services Automatically Available to You

You automatically will have access to the services listed below when you open
your account. If you do not want these services, see "Conducting Business in
Writing" below.

Conducting Business in Writing

A Note About Mailings to Shareholders

Your Guide to Services and Policies

When you open an account, you will receive an Investor Services Guide, which
explains the services available to you and the policies of the fund and the
transfer agent.

Special requirements for large redemptions

Investing Through Financial Intermediaries

If you own or are considering purchasing fund shares through a financial
intermediary or a retirement plan, your ability to purchase, exchange and redeem
shares will depend on the policies of that entity. Some policy differences may
include

o minimum investment requirements
o exchange policies
o fund choices
o cut-off time for investments

Please contact your financial intermediary or plan sponsor for a complete
description of its policies. Copies of the fund's' annual reports, semiannual
reports and Statements of Additional Information are available from your
intermediary or plan sponsor.

American Century has contracts with certain financial intermediaries in which
they represent that they will track the time

**********LEFT MARGIN CALLOUTS

* Financial intermediaries include banks, broker-dealers, insurance companies
and investment advisors.

**********END LEFT MARGIN CALLOUTS

Share Price and Distributions

Share Price

If current prices of securities owned by a fund are not readily available from
an independent pricing service, the advisor may determine their fair value in
accordance with procedures adopted by the fund's Board of Directors. Trading of
securities in foreign markets may not take place on every day the Exchange is
open. Also, trading in some foreign markets may take place on weekends or
holidays when the fund's net asset value is not calculated. So, the value of the
fund's portfolio may be affected on days when you can't purchase or redeem its
shares.

We will price your purchase, exchange or redemption at the net asset value next
determined after we receive your transaction request in good order.

If you invest in fund shares through a bank, financial advisor or other
financial intermediary, it is the responsibility of your financial intermediary
to transmit your purchase, exchange and redemption requests to the fund's'
transfer agent prior to the applicable cut-off time for receiving orders and to
make payment for any purchase transaction in accordance with the fund's'
procedures or any contractual arrangements with the fund or the fund's'
distributor in order for you to receive that day's price.

We have contractual relationships with certain financial intermediaries in which
such intermediaries represent that they have systems to track the time at which
investment orders are received and to segregate orders received at different
times. Based on these representations, the funds have authorized such
intermediaries and their designees to accept purchase and redemption orders on
the funds behalf up to the applicable cut-off time. The funds will be deemed to
have received such orders upon acceptance by the duly authorized intermediary,
and such orders will be priced at the funds net asset value next determined
after acceptance on the funds behalf by such intermediary.

Distributions

Federal tax laws require the fund to make distributions to its shareholders in
order to qualify as a "regulated investment company." Qualification as a
regulated investment company means that the fund will not be subject to state or
federal income tax on amounts distributed. The distributions generally consist
of dividends and interest received by the fund, as well as capital gains
realized on the sale of investment securities. Balanced generally pays
distributions of capital gains, if any, once a year in December. The fund may
make more frequent distributions if necessary to comply with Internal Revenue
Code provisions.

**********LEFT MARGIN CALLOUTS

The "net asset value" of the fund is the price of its shares.

"Capital gains" is the increase in value of a capital asset, such as stock, from
the time it is purchased. Tax becomes due on capital gains once the asset is
sold.

**********END LEFT MARGIN CALLOUTS

Taxes

Tax-Deferred Accounts

Taxable Accounts

If you own fund shares through a taxable account, distributions by the fund and
sales by you of fund shares may cause you to be taxed.

Taxability of Distributions

<TABLE>
Type of distribution Tax rate for 15% bracket Tax rate for 28% bracket or
above
- ---------------------------- ------------------------------- -----------------------------
<S> <C> <C>
Short-term capital gains Ordinary income rate Ordinary income rate
Long-term capital gains 10% 20%
</TABLE>

The tax status of any distribution of capital gains is determined by how long
the fund held the underlying security that was sold, not by how long you have
been invested in the fund or whether you reinvest your distributions in
additional shares or take them as income. American Century will send you a
detail of the tax status of fund distributions for each calendar year in an
annual tax statement from the fund.

Distributions may also be subject to state and local taxes. Because everyone's
tax situation is unique, always consult your tax professional about federal,
state and local tax consequences.

Taxes on Transactions

Your redemptions -- including exchanges to other American Century funds -- are
subject to capital gains tax. The table above can provide a general guide for
your potential tax liability when selling or exchanging fund shares. "Short-term
capital gains" are gains on fund shares held less than or equal to 12 months.
"Long-term capital gains" are gains on fund shares held for more than 12 months.
If your shares decrease in value, their sale or exchange will result in a
long-term or short-term capital loss.

**********LEFT MARGIN CALLOUTS

* Buying a Dividend

**********END LEFT MARGIN CALLOUTS

Multiple Class Information

American Century offers three classes of the fund: Investor Class, Institutional
Class and Advisor Class. The shares offered by this Prospectus are Institutional
Class shares and are offered primarily to institutional investors, through
institutional distribution channels, such as employer-sponsored retirement
plans, or through banks, broker-dealers and insurance companies.

American Century offers another class of shares that has no up-front or deferred
charges, commissions or 12b-1 fees. The fund may offer a different class of
shares primarily to institutional investors, through institutional distribution
channels, such as employer-sponsored retirement plans, or through banks,
broker-dealers and insurance companies. The other classes have different fees,
expenses, and/or minimum investment requirements than the Institutional Class.
The difference in the fee structures among the classes is the result of their
separate arrangements for shareholder and distribution services and not the
result of any difference in amounts charged by the advisor for core investment
advisory services. Accordingly, the core investment advisory expenses do not
vary by class. Different fees and expenses will affect performance. For
additional information concerning the other classes of shares not offered by
this Prospectus, call us at 1-800-345-3533 or contact a sales representative or
financial intermediary who offers those classes of shares.

Performance Information of the Other Class

The Institutional Class of the fund was established in 1996. As a result, the
following financial information is provided to show the performance of the
fund's' original class of shares. This class, the Investor Class, has a total
expense ratio that is 0.20% higher than the Institutional Class. If the
Institutional Class existed during the periods presented, its performance would
have been higher because of the lower expense.

This table itemizes what contributed to the changes in share price during the
period, and compares this to changes over the last five fiscal years (or less,
if the share class is not five years old).

On a per-share basis, it includes:

o share price at the beginning of the period
o investment income and capital gains or losses
o distributions of income and capital gains paid to shareholders
o share price at the end of the period

It also includes some key statistics for the period:

o total return--the overall percentage of return of the fund, assuming the
reinvestment of all distributions

o expense ratio--operating expenses as a percentage of average net assets

o net income ratio--net investment income as a percentage of average net
assets

o portfolio turnover--the percentage of the fund's buying and selling
activity

The following Financial Highlights for the fiscal years ended October 31, 1997
and 1998, have been audited by Deloitte & Touche, independent auditors. Their
report is in the fund's' annual report, which is incorporated by reference into
the Statement of Additional Information, and is available upon request. Prior
years' information was audited by other independent auditors, whose report
thereon also is incorporated by reference into the Statement of Additional
Information.

<TABLE>
<CAPTION>
Balanced

(1) Total return assumes reinvestment of dividends and capital gains, if any.

More information about the funds is contained in these documents:

You also can get information about the funds (including the SAI) from the SEC.

v In person. SEC Public Reference Room
Washington, D.C.
Call 1-800-SEC-0330 for location and hours.

v On the internet. www.sec.gov.

v By mail. Public Reference Section
Washington, D.C.
20549-6009
The SEC will charge a fee for copying the documents
you request.

American Century Investments
P.O. Box 419200
Kansas City, Missouri 64141-6200

Investor Services
1-800-345-2021 or 816-531-5575

Automated Information Line
1-800-345-8765

Fax
816-340-7962

www.americancentury.com

Telecommunications Device for the Deaf
1-800-634-4113 or 816-444-3485

Corporate, Not-for-Profit, Keogh,
SEP-, SARSEP-, SIMPLE-IRA and 403(b) Services
1-800-345-3533

Investment Company Act File No. 811-0816
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION

February 26, 1999

AMERICAN CENTURY MUTUAL FUNDS, INC.

Growth
Ultra
Select
Vista
Heritage
Balanced
Tax-Managed Value
Giftrust
New Opportunities
Limited-Term Bond
Intermediate-Term Bond
Bond
High-Yield

This Statement of Additional Information adds to the discussion in the funds'
Prospectuses, dated February 26, 1999, but is not a prospectus. If you would
like a copy of one or more of the Prospectuses, please contact us at one of the
addresses or phone numbers listed on the back cover or visit American Century's
Web site at www.americancentury.com.

This Statement of Additional Information incorporates by reference certain
information that appears in the funds' annual and semiannual reports, which are
delivered to all shareholders. You may obtain a free copy of the funds' annual
or semiannual reports by calling 1-800-345-2021.

[american century logo(reg.sm)]
American
Century

Distributed by Funds Distributor, Inc.

Table of Contents
THE FUNDS' HISTORY 1
FUND INVESTMENT GUIDELINES

DETAILED INFORMATION ABOUT THE FUNDS 3
Investment Strategies and Risks 3
Investment Policies 13
Portfolio Turnover 14

MANAGEMENT 15
The Board of Directors XX
Officer XX
THE FUNDS' BIGGEST SHAREHOLDERS 18
SERVICE PROVIDERS 18
Investment Advisor 18
Distributor 20
Transfer Agent and Administrator 21
Other Service Providers 21

BROKERAGE ALLOCATION 21
INFORMATION ABOUT FUND SHARES 22
MULTIPLE CLASS STRUCTURE
BUYING AND SELLING FUND SHARES 22
VALUATION OF A FUND'S SECURITIES 22
MULTIPLE CLASS PERFORMANCE INFORMATION
TAXES 23
HOW FUND PERFORMANCE INFORMATION IS CALCULATED 26
FINANCIAL STATEMENTS 27
EXPLANATION OF FIXED INCOME SECURITIES RATINGS 27
Bond Ratings 27
Commercial Paper Ratings 28
Note Ratings 28

THE FUNDS' HISTORY

American Century Mutual Funds, Inc. ("ACMF" or the "registrant") is a registered
open-end management investment company that was organized in 1957 as a Delaware
corporation under the name Twentieth Century Investors, Inc. In 1990, the
company reorganized as a Maryland corporation, and in January 1997 it changed
its name to American Century Mutual Funds.
Inc.

Each fund described in this Statement of Additional Information is a separate
series of ACMF and operates for many purposes as if it were an independent
company. Each fund has its own investment objective, strategy, management team,
assets, tax identification and stock registration number. A fund's inception
date is the first date its initial class of shares was offered to the public.

- ------------------------ --------------------------- ----------------------
FUND-CLASS TICKER SYMBOL INCEPTION DATE
- ------------------------ --------------------------- ----------------------
Growth TWCGX 10/31/58
Ultra TWCUX 11/2/81
Select TWCIX 10/31/58
Vista TWCVX 11/25/83
Heritage TWHIX 11/10/87
Balanced TWBIX 11/20/88
Tax-Managed Value N/A 02/26/99 (est.)
Giftrust TWGTX 11/25/83
New Opportunities TWNOX 12/26/96
Limited-Term Bond N/A 3/1/94
Intermediate-Term Bond TWITX 3/1/94
Bond TWLBX 3/2/87
High-Yield ABHIX 9/30/97
- ------------------------ --------------------------- ----------------------

FUND INVESTMENT GUIDELINES

This section explains the extent to which American Century Investment
Management, Inc. (the "advisor") can use various investment vehicles and
strategies in managing a fund's assets. Descriptions of the investment
techniques and risks associated with each appear in the section, "Investment
Strategies and Risks," which begins on page XX. In the case of the funds'
principal investment strategies, these descriptions elaborate upon discussions
contained in the Prospectuses.

Each fund is a diversified open-end investment company as defined in the
Investment Company Act of 1940 (the Investment Company Act). "Diversified" means
that, with respect to 75% of its total assets, each fund will not invest more
than 5% of its total assets in the securities of a single issuer.

To meet federal tax requirements for qualification as a regulated investment
company, each fund must limit its investments so that at the close of each
quarter of its taxable year (1) no more than 25% of its total assets are
invested in the securities of a single issuer (other than the U.S government or
a regulated investment company), and (2) with respect to at least 50% of its
total assets, no more than 5% of its total assets are invested in the securities
of a single issuer.

*GROWTH, ULTRA, SELECT, VISTA, HERITAGE, GIFTRUST AND NEW OPPORTUNITIES

In general, within the restrictions outlined here and in the funds'
Prospectuses, the advisor has broad powers to decide how to invest fund assets,
including the power to hold them uninvested.

Investments are varied according to what is judged advantageous under changing
economic conditions. It is the advisor's policy to retain maximum flexibility in
management without restrictive provisions as to the proportion of one or another
class of securities that may be held, subject to the investment restrictions
described below. It is the advisor's intention that each fund will generally
consist of domestic and foreign common stocks and equity equivalent securities.
However, subject to the specific limitations applicable to a fund, the funds'
management teams may invest the assets of each fund in varying amounts in other
instruments, such as those reflected in Table 1 below, when such a course is
deemed appropriate in order to attempt to attain its investment objective.
Senior securities that, in the opinion of the manager, are high-grade issues may
also be purchased for defensive purposes. [Note: The above statement of
fundamental policy gives the advisor authority to invest in securities other
than common stocks and traditional debt and convertible issues. Though the funds
have not made such investments in the past, the manager may invest in master
limited partnerships (other than real estate partnerships) and royalty trusts,
which are traded on domestic stock exchanges when such investments are deemed
appropriate for the attainment of the funds' investment objectives.]

So long as a sufficient number of such securities are available, the manager
intends to keep the funds fully invested in stocks that demonstrate accelerating
growth, regardless of the movement of stock prices, generally. In most
circumstances, the funds' actual level of cash and cash equivalents will be less
than 10%. The manager may use S&P 500 Index futures as a way to expose the
funds' cash assets to the market, while maintaining liquidity. As mentioned in
the Prospectuses, the managers may not leverage the funds' portfolios, so there
is no greater market risk to the funds than if they purchase stocks. See
"SHORT-TERM INVESTMENTS," page XX, "FUTURES AND OPTIONS," page XX, and
"DERIVATIVE SECURITIES," page XX.

*BALANCED

In general, within the restrictions outlined here and in the fund's Prospectus,
the advisor has broad powers to decide how to invest fund assets, including the
power to hold them uninvested. As a matter of fundamental policy, the manager
will invest approximately 60% of the Balanced portfolio in equity securities and
the remainder in bonds and other fixed income securities. The equity portion of
the fund generally will be invested in equity securities of companies comprising
the 1500 largest publicly traded companies in the United States. The fund's
investment approach may cause its equity portion to be more heavily invested in
some industries than in others. However, it may not invest more than 25% of its
total assets in companies whose principal business activities are in the same
industry. In addition, as a "diversified" investment company, its investments in
a single issue are limited, as described under "Fund Investment Guidelines"
above. The fund managers may also purchase foreign securities, convertible
securities, stock index futures contracts and similar securities, and short-term
securities. See Table 1, below.

The fixed income portion of the fund generally will be invested in a diversified
portfolio of high-grade government, corporate, asset backed and similar
securities. There are no maturity restrictions on the fixed income securities in
which the fund invests, but under normal conditions the weighted average
maturity for the fixed income portion of the fund will be in the 3-10 year
range. The manager will actively manage the portfolio, adjusting the weighted
average portfolio maturity in response to expected changes in interest rates.
During periods of rising interest rates, a shorter weighted average maturity may
be adopted in order to reduce the effect of bond price declines on the fund's
net asset value. When interest rates are falling and bond prices rising, a
longer weighted average portfolio maturity may be adopted. The restrictions on
the quality of the fixed income securities the fund may purchase are described
in the Prospectus. For a description of the fixed income securities rating
system, see "AN EXPLANATION OF FIXED INCOME SECURITIES RATINGS," beginning on
page XX of this SAI.

*TAX-MANAGED VALUE FUND

The fund managers of Tax Managed Value will invest primarily in stocks of medium
to large companies that the managers believe are undervalued at the time of
purchase. The fund will usually purchase common stocks of U.S. and foreign
companies, but they can purchase other types of securities, as well, such as
domestic and foreign preferred stocks, convertible securities, equity equivalent
securities, notes, bonds and other debt securities.

*LIMITED-TERM BOND, INTERMEDIATE-TERM BOND AND BOND

To achieve their objectives, the funds may invest in diversified portfolios of
high- and medium-grade debt securities payable in U.S. currency. Under normal
market conditions, each fund will maintain at least 65% of the value of its
total assets in investment-grade bonds and other debt instruments. Under normal
market conditions, each of the funds may invest up to 35% of its assets, and for
temporary defensive purposes, up to 100% of its assets, in short-term
securities.

The funds may invest in securities that at the time of purchase are rated by a
nationally recognized statistical rating organization or, if not rated, are of
equivalent investment quality as determined by the manager, as follows:
short-term notes within the two highest categories, e.g., at least MIG-2 by
Moody's Investor Services ("Moody's") or SP-2 by Standard and Poor's Corporation
("S&P"); corporate, sovereign government, and municipal bonds within the four
highest categories (for example, at least Baa by Moody's or BBB by S&P);
securities of the United States government and its agencies and
instrumentalities (described below); other types of securities rated at least
P-2 by Moody's or A-2 by S&P.

The manager will actively manage the portfolios, adjusting the weighted average
portfolio maturities as necessary in response to expected changes in interest
rates. During periods of rising interest rates, the weighted average maturity of
a fund may be moved to the shorter end of its maturity range in order to reduce
the effect of bond price declines on the fund's net asset value. When interest
rates are falling and bond prices are rising, the weighted average portfolio
maturity may be moved toward the longer end of its maturity range.

The government securities in which the funds may invest include: (1) direct
obligations of the United States, such as Treasury bills, notes and bonds, which
are supported by the full faith and credit of the United States, and (2)
obligations (including mortgage-related securities) issued or guaranteed by
agencies and instrumentalities of the United States government that are
established under an act of Congress. The securities of some of these agencies
and instrumentalities, such as the Government National Mortgage Association, are
guaranteed as to principal and interest by the U.S. Treasury, and other
securities are supported by the right of the issuer, such as the Federal Home
Loan Banks, to borrow from the Treasury. Other obligations, including those
issued by the Federal National Mortgage Association and the Federal Home Loan
Mortgage Corporation, are supported only by the credit of the instrumentality.

Mortgage-related securities in which the funds may invest include collateralized
mortgage obligations ("CMOs") issued by a United States agency or
instrumentality. A CMO is a debt security that is collateralized by a portfolio
or pool of mortgages or mortgage-backed securities. The issuer's obligation to
make interest and principal payments is secured by the underlying pool or
portfolio of mortgages or securities.

The market value of mortgage-related securities, even those in which the
underlying pool of mortgage loans is guaranteed as to the payment of principal
and interest by the United States government, is not insured. When interest
rates rise, the market value of those securities may decrease in the same manner
as other debt, but when interest rates decline, their market value may not
increase as much as other debt instruments because of the prepayment feature
inherent in the underlying mortgages. If such securities are purchased at a
premium, the fund will suffer a loss if the obligation is prepaid. Prepayments
will be reinvested at prevailing rates, which may be less than the rate paid by
the prepaid obligation.

For the purpose of determining the weighted average portfolio maturity of the
funds, the manager shall consider the maturity of a mortgage-related security to
be the remaining expected average life of the security. The average life of such
securities is likely to be substantially less than the original maturity as a
result of prepayments of principal on the underlying mortgages, especially in a
declining interest rate environment. In determining the remaining expected
average life, the manager makes assumptions regarding repayments on underlying
mortgages. In a rising interest rate environment, those prepayments generally
decrease, and may decrease below the rate of prepayment assumed by the manager
when purchasing those securities. Such slowdown may cause the remaining maturity
of those securities to lengthen, which will increase the relative volatility of
those securities and, hence, the fund holding the securities. See "FUNDAMENTALS
OF FIXED INCOME INVESTING," in the funds' Prospectus.

As noted, each fund may invest up to 35% of its assets, and for temporary
defensive purposes as determined by the manager, up to 100% of its assets in
short-term securities. See "SHORT-TERM SECURITIES" beginning at page XX. These
investments must meet the rating standards for the funds. To the extent a fund
assumes a defensive position, the weighted average maturity of its portfolio may
not fall within the ranges stated for the fund. The funds may buy and sell
interest rate futures contracts relating to debt securities and bond indexes and
may write and buy put and call options relating to interest rate futures
contracts for the purpose of achieving their investment objectives. See "FUTURES
AND OPTIONS" beginning on page XX.

*HIGH-YIELD

The fund invests primarily in lower-rated, higher yielding corporate bonds,
debentures and notes, which are subject to greater credit risk and consequently
offer higher yield. The fund may also purchase

* government securities,
* zero-coupon, step-coupon and pay-in-kind securities,
* convertible securities,
* loan interests
* common stock or other equity-related securities (limited to 20% of fund
assets),
* short-term securities

Up to 40% of the fund's assets may be invested in foreign securities. The fund
may also purchase and sell interest rate futures contracts and related options.
See "FUTURES AND OPTIONS."

The securities purchased by the fund generally will be rated in the lower rating
categories of recognized rating agencies, as low as Caa by Moody's Investors
Services, Inc. ("Moody's") or D by Standard & Poor's Ratings Group ("S&P"), or
in unrated securities that the manager deems of comparable quality. The fund may
hold securities with higher ratings when the yield differential between
low-rated and higher-rated securities narrows and the risk of loss may be
reduced substantially with only a relatively small reduction in yield.

Issuers of high-yield securities are more vulnerable to real or perceived
economic changes (such as an economic downturn or a prolonged period of rising
interest rates), political changes or adverse developments specific to the
issuer. Adverse economic, political or other developments may impair the
issuer's ability to service principal and interest obligations, to meet
projected business goals and to obtain additional financing. In the event of a
default, the fund would experience a reduction of its income and could expect a
decline in the market value of the defaulted securities.

The market for lower quality securities is generally less liquid than the market
for higher quality securities. Adverse publicity and investor perceptions as
well as new or proposed laws may also have a greater negative impact on the
market for lower quality securities. Sovereign debt of foreign governments is
generally rated by country. Because these ratings do not take into account
individual factors relevant to each issue and may not be updated regularly, the
manager may elect to treat such securities as unrated debt.

The fund will not purchase securities rated lower than B by both Moody's and S&P
unless, immediately after such purchase, no more than 10% of its total assets
are invested in such securities.

ZERO-COUPON, STEP-COUPON AND PAY-IN-KIND SECURITIES

Zero-coupon, step-coupon and pay-in-kind securities are debt securities that do
not make regular cash interest payments. Zero-coupon and step-coupon securities
are sold at a deep discount to their face value. Pay-in-kind securities pay
interest through the issuance of additional securities. Because such securities
do not pay current cash income, the price of these securities can be volatile
when interest rates fluctuate. While these securities do not pay current cash
income, federal income tax law requires the holders of zero-coupon, step-coupon
and pay-in-kind securities to include in income each year the portion of the
original issue discount and other noncash income on such securities accrued
during that year. In order to continue to qualify for treatment as a "regulated
investment company" under the Internal Revenue Code and avoid certain excise
tax, the fund may be required to dispose of other portfolio securities, which
may occur in periods of adverse market prices, in order to generate cash to meet
these distribution requirements.

LOAN INTERESTS

Loan interests are interests in amounts owed by a corporate, governmental or
other borrower to lenders or lending syndicates. Loan interests purchased by the
fund may have a maturity of any number of days or years, and may be acquired
from U.S. and foreign banks, insurance companies, finance companies or other
financial institutions that have made loans or are members of a lending
syndicate or from the holders of loan interests. Loan interests involve the risk
of loss in case of default or bankruptcy of the borrower and, in the case of
participation interests, involve a risk of insolvency of the agent lending bank
or other financial intermediary. Loan interests are not rated by any nationally
recognized securities ratings organization and are, at present, not readily
marketable and may be subject to contractual restrictions on resale.

<TABLE>
Table 1
- --------------------------- ----------- ----------- --------- ---------------- --------------- ---------- ------------ ------------
Limited-Term
Bond,
Growth Intermediate-Term Tax-Managed
Ultra Vista High Bond, Bond New Value
Select Heritage Yield Opportunities Giftrust Balanced
- --------------------------- ----------- ----------- --------- ---------------- --------------- ---------- ------------ ------------
- --------------------------- ----------- ----------- --------- ---------------- --------------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Foreign Securities X X X X X X X X
- --------------------------- ----------- ----------- --------- ---------------- --------------- ---------- ------------ ------------
- --------------------------- ----------- ----------- --------- ---------------- --------------- ---------- ------------ ------------
Forward Currency Exchange X X X ??? X X X X
Contracts
- --------------------------- ----------- ----------- --------- ---------------- --------------- ---------- ------------ ------------
- --------------------------- ----------- ----------- --------- ---------------- --------------- ---------- ------------ ------------
Convertible Securities X X X
- --------------------------- ----------- ----------- --------- ---------------- --------------- ---------- ------------ ------------
- --------------------------- ----------- ----------- --------- ---------------- --------------- ---------- ------------ ------------
Futures & Options X X X X X X X X
- --------------------------- ----------- ----------- --------- ---------------- --------------- ---------- ------------ ------------
- --------------------------- ----------- ----------- --------- ---------------- --------------- ---------- ------------ ------------
Derivative Securities X X X X X X X X
- --------------------------- ----------- ----------- --------- ---------------- --------------- ---------- ------------ ------------
- --------------------------- ----------- ----------- --------- ---------------- --------------- ---------- ------------ ------------
Repurchase Agreement ??? X X X X X
- --------------------------- ----------- ----------- --------- ---------------- --------------- ---------- ------------ ------------
- --------------------------- ----------- ----------- --------- ---------------- --------------- ---------- ------------ ------------
Municipal Notes X
- --------------------------- ----------- ----------- --------- ---------------- --------------- ---------- ------------ ------------
- --------------------------- ----------- ----------- --------- ---------------- --------------- ---------- ------------ ------------
Municipal Bonds X
- --------------------------- ----------- ----------- --------- ---------------- --------------- ---------- ------------ ------------
- --------------------------- ----------- ----------- --------- ---------------- --------------- ---------- ------------ ------------
Variable- and Floating-Rate X
Obligations
- --------------------------- ----------- ----------- --------- ---------------- --------------- ---------- ------------ ------------
- --------------------------- ----------- ----------- --------- ---------------- --------------- ---------- ------------ ------------
Obligations with Term Puts X
Attached
- --------------------------- ----------- ----------- --------- ---------------- --------------- ---------- ------------ ------------
- --------------------------- ----------- ----------- --------- ---------------- --------------- ---------- ------------ ------------
Tender Option Bonds X
- --------------------------- ----------- ----------- --------- ---------------- --------------- ---------- ------------ ------------
- --------------------------- ----------- ----------- --------- ---------------- --------------- ---------- ------------ ------------
When-Issued and Forward X X X X X X X X
Commitment Agreements
- --------------------------- ----------- ----------- --------- ---------------- --------------- ---------- ------------ ------------
- --------------------------- ----------- ----------- --------- ---------------- --------------- ---------- ------------ ------------
Inverse Floaters ??? X
- --------------------------- ----------- ----------- --------- ---------------- --------------- ---------- ------------ ------------
- --------------------------- ----------- ----------- --------- ---------------- --------------- ---------- ------------ ------------
Restricted and Illiquid X X X 15% 15% X 15% X
Securities
- --------------------------- ----------- ----------- --------- ---------------- --------------- ---------- ------------ ------------
- --------------------------- ----------- ----------- --------- ---------------- --------------- ---------- ------------ ------------
Other Investment Companies ??? X
- --------------------------- ----------- ----------- --------- ---------------- --------------- ---------- ------------ ------------
- --------------------------- ----------- ----------- --------- ---------------- --------------- ---------- ------------ ------------
Short Sales X X ??? X X X X
- --------------------------- ----------- ----------- --------- ---------------- --------------- ---------- ------------ ------------
- --------------------------- ----------- ----------- --------- ---------------- --------------- ---------- ------------ ------------
Portfolio Lending ??? X
- --------------------------- ----------- ----------- --------- ---------------- --------------- ---------- ------------ ------------
- --------------------------- ----------- ----------- --------- ---------------- --------------- ---------- ------------ ------------
Investments in Companies 5% 10% 15% 5% 10% 10% 5% X
with Limited Operating
History
- --------------------------- ----------- ----------- --------- ---------------- --------------- ---------- ------------ ------------
- --------------------------- ----------- ----------- --------- ---------------- --------------- ---------- ------------ ------------
Short-Term Securities X X X X X X X X
- --------------------------- ----------- ----------- --------- ---------------- --------------- ---------- ------------ ------------
</TABLE>

DETAILED INFORMATION ABOUT THE FUNDS
INVESTMENT STRATEGIES AND RISKS

This section describes various investment vehicles and techniques that the
advisor can use in managing a fund's assets. It also details the risks
associated with each, because each technique contributes to a fund's overall
risk profile.

FOREIGN SECURITIES

Each fund may invest in the securities of foreign issuers, including foreign
governments, when these securities meet its standards of selection. Securities
of foreign issuers may trade in the U.S. or foreign securities markets.

The chart below shows the portion of each fund's total assets that may be
invested in the securities of foreign issuers.

- --------------------------------------- ----------------------------------------

FUND PERCENTAGE PERMITTED IN
FOREIGN SECURITIES
- --------------------------------------- ----------------------------------------
- --------------------------------------- ----------------------------------------
Growth Unlimited
- --------------------------------------- ----------------------------------------
- --------------------------------------- ----------------------------------------
Ultra Unlimited
- --------------------------------------- ----------------------------------------
- --------------------------------------- ----------------------------------------
Select Unlimited
- --------------------------------------- ----------------------------------------
- --------------------------------------- ----------------------------------------
Vista Unlimited
- --------------------------------------- ----------------------------------------
- --------------------------------------- ----------------------------------------
Heritage Unlimited
- --------------------------------------- ----------------------------------------
- --------------------------------------- ----------------------------------------
Balanced Unlimited
- --------------------------------------- ----------------------------------------
- --------------------------------------- ----------------------------------------
Tax-Managed Value Unlimited
- --------------------------------------- ----------------------------------------
- --------------------------------------- ----------------------------------------
Giftrust Unlimited
- --------------------------------------- ----------------------------------------
- --------------------------------------- ----------------------------------------
New Opportunities Unlimited
- --------------------------------------- ----------------------------------------
- --------------------------------------- ----------------------------------------
Limited-Term Bond Unlimited
- --------------------------------------- ----------------------------------------
- --------------------------------------- ----------------------------------------
Intermediate-Term Bond Unlimited
- --------------------------------------- ----------------------------------------
- --------------------------------------- ----------------------------------------
Bond Unlimited
- --------------------------------------- ----------------------------------------
- --------------------------------------- ----------------------------------------
High Yield 40%
- --------------------------------------- ----------------------------------------

Investments in foreign securities may present certain risks, including those
resulting from fluctuations in currency exchange rates, future political and
economic developments, clearance and settlement risk, reduced availability of
public information concerning issuers, and the fact that foreign issuers are not
generally subject to uniform accounting, auditing and financial reporting
standards or to other regulatory practices and requirements comparable to those
applicable to domestic issuers.

Because most foreign securities are denominated in non-U.S. currencies, the
investment performance of the fund could be affected by changes in foreign
currency exchange rates. The value of a fund's assets denominated in foreign
currencies will increase or decrease in response to fluctuations in the value of
those foreign currencies relative to the U.S. dollar. Currency exchange rates
can be volatile at times in response to supply and demand in the currency
exchange markets, international balances of payments, governmental intervention,
speculation, and other political and economic conditions.

Each fund may purchase and sell foreign currency on a spot basis and may engage
in forward currency contracts, currency options and futures transactions for
hedging or any other lawful purpose. (See ""Derivative Securities" on page XX.)

FORWARD CURRENCY EXCHANGE CONTRACTS

The funds conduct their foreign currency exchange transactions either on a spot
(i.e., cash) basis at the spot rate prevailing in the foreign currency exchange
market, or through entering into forward foreign currency exchange contracts to
purchase or sell foreign currencies.

The funds expect to use forward contracts under two circumstances:

(1) When the advisor wishes to "lock in" the U.S. dollar price of a
security when a fund is purchasing or selling a security denominated in
a foreign currency, the fund would be able to enter into a forward
contract to do so; or
(2) When the advisor believes that the currency of a particular foreign
country may suffer a substantial decline against the U.S. dollar, a
fund would be able to enter into a forward contract to sell foreign
currency for a fixed U.S. dollar amount approximating the value of some
or all of its portfolio securities either denominated in, or whose
value is tied to, such foreign currency.

As to the first circumstance, when a fund enters into a trade for the purchase
or sale of a security denominated in a foreign currency, it may be desirable to
establish (lock in) the U.S. dollar cost or proceeds. By entering into forward
contracts in U.S. dollars for the purchase or sale of a foreign currency
involved in an underlying security transaction, the fund will be able to protect
itself against a possible loss between trade and settlement dates resulting from
the adverse change in the relationship between the U.S. dollar at the subject
foreign currency.

Under the second circumstance, when the advisor believes that the currency of a
particular country may suffer a substantial decline relative to the U.S. dollar,
a fund could enter into a foreign contract to sell for a fixed dollar amount the
amount in foreign currencies approximating the value of some or all of its
portfolio securities either denominated in, or whose value is tied to, such
foreign currency. The fund will place cash or high-grade liquid securities in a
separate account with its custodian in an amount equal to the value of the
forward contracts entered into under the second circumstance. If the value of
the securities placed in the separate account declines, additional cash or
securities will be placed in the account on a daily basis so that the value of
the account equals the amount of the fund's commitments with respect to such
contracts.

The precise matching of forward contracts in the amounts and values of
securities involved generally would not be possible since the future values of
such foreign currencies will change as a consequence of market movements in the
values of those securities between the date the forward contract is entered into
and the date it matures. Predicting short-term currency market movements is
extremely difficult, and the successful execution of short-term hedging strategy
is highly uncertain. The advisor does not intend to enter into such contracts on
a regular basis. Normally, consideration of the prospect for currency parties
will be incorporated into the long-term investment decisions made with respect
to overall diversification strategies. However, the advisor believes that it is
important to have flexibility to enter into such forward contracts when it
determines that a fund's best interests may be served.

Generally, a fund will not enter into a forward contract with a term of greater
than one year. At the maturity of the forward contract, the fund may either sell
the portfolio security and make delivery of the foreign currency, or it may
retain the security and terminate the obligation to deliver the foreign currency
by purchasing an "offsetting" forward contract with the same currency trader
obligating the fund to purchase, on the same maturity date, the same amount of
the foreign currency.

It is impossible to forecast with absolute precision the market value of
portfolio securities at the expiration of the forward contract. Accordingly, it
may be necessary for a fund to purchase additional foreign currency on the spot
market (and bear the expense of such purchase) if the market value of the
security is less than the amount of foreign currency the fund is obligated to
deliver and if a decision is made to sell the security and make delivery of the
foreign currency the fund is obligated to deliver.

CONVERTIBLE SECURITIES

A convertible security is a fixed-income security that offers the potential for
capital appreciation through a conversion feature that enables the holder to
convert the fixed-income security into a stated number of shares of common
stock. As fixed income securities, convertible securities provide a stable
stream of income, with generally higher yields than common stocks. Because
convertible securities offer the potential to benefit from increases in the
market price of the underlying common stock, however, they generally offer lower
yields than non-convertible securities of similar quality. Of course, like all
fixed income securities, there can be no assurance of current income because the
issuers of the convertible securities may default on their obligations. In
addition, there can be no assurance of capital appreciation because the value of
the underlying common stock will fluctuate.

Convertible securities generally are subordinated to other similar but
non-convertible securities of the same issuer, although convertible bonds, as
corporate debt obligations, enjoys seniority in right of payment to all equity
securities, and convertible preferred stock is senior to common stock of the
same issuer. Because of the subordination feature, however, convertible
securities typically have lower ratings than similar non-convertible securities.

Unlike a convertible security that is a single security, a synthetic convertible
security is comprised of two distinct securities that together resemble
convertible securities in certain respects. Synthetic convertible securities are
created by combining non-convertible bonds or preferred stocks with warrants or
stock call options. The options that will form elements of synthetic convertible
securities will be listed on a securities exchange or on the National
Association of Securities Dealers Automated Quotation Systems. The two
components of a synthetic convertible security, which will be issued with
respect to the same entity, generally are not offered as a unit, and may be
purchased and sold by the fund at different times. Synthetic convertible
securities differ from convertible securities in certain respects, including
that each component of a synthetic convertible security has a separate market
value and responds differently to market fluctuations. Investing in synthetic
convertible securities involves the risk normally involved in holding the
securities comprising the synthetic convertible security.

SHORT SALES

A fund may engage in short sales if, at the time of the short sale, the fund
owns or has the right to acquire securities equivalent in kind and amount to the
securities being sold short.

In a short sale, the seller does not immediately deliver the securities sold and
is said to have a short position in those securities until delivery occurs. To
make delivery to the purchaser, the executing broker borrows the securities
being sold short on behalf of the seller. While the short position is
maintained, the seller collateralizes its obligation to deliver the securities
sold short in an amount equal to the proceeds of the short sale plus an
additional margin amount established by the Board of Governors of the Federal
Reserve. If a fund engages in a short sale, the collateral account will be
maintained by the fund's custodian. While the short sale is open, the fund will
maintain in a segregated custodial account an amount of securities convertible
into, or exchangeable for, such equivalent securities at no additional cost.
These securities would constitute the fund's long position.

A fund may make a short sale, as described above, when it wants to sell the
security it owns at a current attractive price, but also wishes to defer
recognition of gain or loss for federal income tax purposes. There will be
certain additional transaction costs associated with short sales, but the fund
will endeavor to offset these costs with income from the investment of the cash
proceeds of short sales.

PORTFOLIO LENDING

In order to realize additional income, a fund may lend its portfolio securities.
Such loans may not exceed one-third of the fund's net assets valued at market
except (i) through the purchase of debt securities in accordance with its
investment objective, policies and limitations, or (ii) by engaging in
repurchase agreements with respect to portfolio securities.

DERIVATIVE SECURITIES

To the extent permitted by its investment objectives and policies, each of the
funds may invest in securities that are commonly referred to as "derivative"
securities. Generally, a derivative is a financial arrangement the value of
which is based on, or "derived" from, a traditional security, asset, or market
index. Certain derivative securities are more accurately described as
"index/structured" securities. Index/structured securities are derivative
securities whose value or performance is linked to other equity securities (such
as depositary receipts), currencies, interest rates, indices or other financial
indicators ("reference indices").

Some "derivatives" such as mortgage-related and other asset-backed securities
are in many respects like any other investment, although they may be more
volatile or less liquid than more traditional debt securities.

There are many different types of derivatives and many different ways to use
them. Futures and options are commonly used for traditional hedging purposes to
attempt to protect a fund from exposure to changing interest rates, securities
prices, or currency exchange rates and for cash management purposes as a
low-cost method of gaining exposure to a particular securities market without
investing directly in those securities.

No fund may invest in a derivative security unless the reference index or the
instrument to which it relates is an eligible investment for the fund. For
example, a security whose underlying value is linked to the price of oil would
not be a permissible investment since the funds may not invest in oil and gas
leases or futures.

The return on a derivative security may increase or decrease, depending upon
changes in the reference index or instrument to which it relates.

There are a range of risks associated with derivative investments, including:

* the risk that the underlying security, interest rate, market index or other
financial asset will not move in the direction the portfolio manager
anticipates;
* the possibility that there may be no liquid secondary market, or the
possibility that price fluctuation limits may be imposed by the exchange,
either of which may make it difficult or impossible to close out a position
when desired;
* the risk that adverse price movements in an instrument can result in a loss
substantially greater than a fund's initial investment; and
* the risk that the counterparty will fail to perform its obligations.

The Board of Directors has approved the manager's policy regarding investments
in derivative securities. That policy specifies factors that must be considered
in connection with a purchase of derivative securities. The policy also
establishes a committee that must review certain proposed purchases before the
purchases can be made. The manager will report on fund activity in derivative
securities to the Board of Directors as necessary. In addition, the Board will
review the manager's policy for investments in the derivative securities
annually.

INVESTMENTS IN COMPANIES WITH LIMITED OPERATING HISTORY

As indicated in Table 1, the funds may invest a portion of their assets in the
securities of issuers with limited operating history. The manger considers an
issuer to have a limited operating history if that issuer has a record of less
than three years of continuous operation. The manager will consider periods of
capital formation, incubation, consolidations, and research and development in
determining whether a particular issuer has a record of three years of
continuous operation.

Investments in securities of issuers with limited operating history may involve
greater risks than investments in securities of more mature issuers. By their
nature, such issuers present limited operating history and financial information
upon which the manager may base its investment decision on behalf of the funds.
In additon, financial and other information regarding such issuers, when
available, may be incomplete or inaccurate.

REPURCHASE AGREEMENTS

Each fund may invest in repurchase agreements when such transactions present an
attractive short-term return on cash that is not otherwise committed to the
purchase of securities pursuant to the investment policies of that fund.

A repurchase agreement occurs when, at the time the fund purchases an
interest-bearing obligation, the seller (a bank or a broker-dealer registered
under the Securities Exchange Act of 1934) agrees to purchase it on a specified
date in the future at an agreed-upon price. The repurchase price reflects an
agreed-upon interest rate during the time the fund's money is invested in the
security.

Since the security purchased constitutes security for the repurchase obligation,
a repurchase agreement can be considered a loan collateralized by the security
purchased. The fund's risk is the ability of the seller to pay the agreed-upon
repurchase price on the repurchase date. If the seller defaults, the fund may
incur costs in disposing of the collateral, which would reduce the amount
realized thereon. If the seller seeks relief under the bankruptcy laws, the
disposition of the collateral may be delayed or limited. To the extent the value
of the security decreases, the fund could experience a loss.

The funds will limit repurchase agreement transactions to securities issued by
the U.S. government, its agencies and instrumentalities, and will enter into
such transactions with those banks and securities dealers who are deemed
creditworthy pursuant to criteria adopted by the funds' Board of Directors.

No fund will invest more than 15% of its assets in repurchase agreements
maturing in more than seven days. MUNICIPAL NOTES Municipal notes are issued by
state and local governments or government entities to provide short-term capital
or to meet
cash flow needs.

Tax Anticipation Notes (TANs) are issued in anticipation of seasonal tax
revenues, such as ad valorem property, income, sales, use and business taxes,
and are payable from these future taxes. Tax anticipation notes usually are
general obligations of the issuer. General obligations are secured by the
issuer's pledge of its full faith and credit (i.e., taxing power) for the
payment of principal and interest.

Revenue Anticipation Notes (RANs) are issued with the expectation that receipt
of future revenues, such as federal revenue sharing or state aid payments, will
be used to repay the notes. Typically, these notes also constitute general
obligations of the issuer.

Bond Anticipation Notes (BANs) are issued to provide interim financing until
long-term financing can be arranged. In most cases, the long-term bonds provide
the money for repayment of the notes.

Tax-Exempt Commercial Paper is an obligation with a stated maturity of 365 days
or less issued to finance seasonal cash flow needs or to provide short-term
financing in anticipation of longer-term financing.

Revenue Anticipation Warrants, or reimbursement warrants, are issued to meet the
cash flow needs of the State of California at the end of a fiscal year and in
the early weeks of the following fiscal year. These warrants are payable from
unapplied money in the state's General Fund, including the proceeds of revenue
anticipation notes issued following enactment of a state budget or the proceeds
of refunding warrants issued by the state.

MUNICIPAL BONDS

Municipal bonds, which generally have maturities of more than one year when
issued, are designed to meet longer-term capital needs. These securities have
two principal classifications: general obligation bonds and revenue bonds.

General Obligation (GO) Bonds are issued by states, counties, cities, towns and
regional districts to fund a variety of public projects, including construction
of and improvements to schools, highways, and water and sewer systems. General
obligation bonds are backed by the issuer's full faith and credit based on its
ability to levy taxes for the timely payment of interest and repayment of
principal, although such levies may be constitutionally or statutorily limited
as to rate or amount.

Revenue Bonds are not backed by an issuer's taxing authority; rather, interest
and principal are secured by the net revenues from a project or facility.
Revenue bonds are issued to finance a variety of capital projects, including
construction or refurbishment of utility and waste disposal systems, highways,
bridges, tunnels, air and sea port facilities, schools and hospitals. Many
revenue bond issuers provide additional security in the form of a debt-service
reserve fund that may be used to make payments of interest and repayments of
principal on the issuer's obligations. Some revenue bond financings are further
protected by a state's assurance (without obligation) that it will make up
deficiencies in the debt-service reserve fund.

Industrial Development Bonds (IDBs), a type of revenue bond, are issued by or on
behalf of public authorities to finance privately operated facilities. These
bonds are used to finance business, manufacturing, housing, athletic and
pollution control projects, as well as public facilities such as mass transit
systems, air and sea port facilities and parking garages. Payment of interest
and repayment of principal on an IDB depend solely on the ability of the
facility's user to meet financial obligations, and on the pledge, if any, of the
real or personal property financed. The interest earned on IDBs may be subject
to the federal alternative minimum tax.

VARIABLE- AND FLOATING-RATE OBLIGATIONS

The funds may buy variable- and floating-rate demand obligations (VRDOs and
FRDOs). These obligations carry rights that permit holders to demand payment of
the unpaid principal plus accrued interest, from the issuers or from financial
intermediaries. Floating-rate securities, or floaters, have interest rates that
change whenever there is a change in a designated base rate; variable-rate
instruments provide for a specified, periodic adjustment in the interest rate,
which typically is based on an index. These rate formulas are designed to result
in a market value for the VRDO or FRDO that approximates par value.

OBLIGATIONS WITH TERM PUTS ATTACHED

Each fund may invest in fixed-rate bonds subject to third-party puts and in
participation interests in such bonds held by a bank in trust or otherwise.
These bonds and participation interests have tender options or demand features
that permit the funds to tender (or put) their bonds to an institution at
periodic intervals and to receive the principal amount thereof.

The advisor expects that the funds will pay more for securities with puts
attached than for securities without these liquidity features. The advisor may
buy securities with puts attached to keep a fund fully invested in municipal
securities while maintaining sufficient portfolio liquidity to meet redemption
requests or to facilitate management of the fund's investments.

To ensure that the interest on municipal securities subject to puts is
tax-exempt to the funds, the advisor limits the funds' use of puts in accordance
with applicable interpretations and rulings of the Internal Revenue Service
(IRS).

Because it is difficult to evaluate the likelihood of exercise or the potential
benefit of a put, puts normally will be determined to have a value of zero,
regardless of whether any direct or indirect consideration is paid. Accordingly,
puts as separate securities are not expected to affect the funds' weighted
average maturities. When a fund has paid for a put, the cost will be reflected
as unrealized depreciation on the underlying security for the period the put is
held. Any gain on the sale of the underlying security will be reduced by the
cost of the put.

There is a risk that the seller of a put will not be able to repurchase the
underlying obligation when (or if) a fund attempts to exercise the put. To
minimize such risks, the funds will purchase obligations with puts attached only
from sellers deemed creditworthy by the advisor under the direction of the Board
of Directors.

TENDER OPTION BONDS

Tender option bonds (TOBs) were created to increase the supply of high-quality,
short-term tax-exempt obligations, and thus they are of particular interest to
the money market funds. However, any of the funds may purchase these
instruments.

TOBs are created by municipal bond dealers who purchase long-term tax-exempt
bonds in the secondary market, place the certificates in trusts, and sell
interests in the trusts with puts or other liquidity guarantees attached. The
credit quality of the resulting synthetic short-term instrument is based on the
guarantor's short-term rating and the underlying bond's long-term rating.

There is some risk that a remarketing agent will renege on a tender option
agreement if the underlying bond is downgraded or defaults. Because of this, the
advisor monitors the credit quality of bonds underlying the funds' TOB holdings
and intends to sell or put back any TOB if the rating on its underlying bond
falls below the second-highest rating category designated by a rating agency.

The advisor also takes steps to minimize the risk that the fund may realize
taxable income as a result of holding TOBs. These steps may include
consideration of (a) legal opinions relating to the tax-exempt status of the
underlying municipal bonds, (b) legal opinions relating to the tax ownership of
the underlying bonds, and (c) other elements of the structure that could result
in taxable income or other adverse tax consequences. After purchase, the advisor
monitors factors related to the tax-exempt status of the fund's TOB holdings in
order to minimize the risk of generating taxable income.

WHEN-ISSUED AND FORWARD COMMITMENT AGREEMENTS

The funds may sometimes purchase new issues of securities on a when-issued or
forward commitment basis in which the transaction price and yield are each fixed
at the time the commitment is made, but payment and delivery occur at a future
date (typically 15 to 45 days later).

When purchasing securities on a when-issued or forward commitment basis, a fund
assumes the rights and risks of ownership, including the risks of price and
yield fluctuations. Market rates of interest on debt securities at the time of
delivery may be higher or lower than those contracted for on the when-issued
security. Accordingly, the value of such security may decline prior to delivery,
which could result in a loss to the fund. While the fund will make commitments
to purchase or sell securities with the intention of actually receiving or
delivering them, it may sell the securities before the settlement date if doing
so is deemed advisable as a matter of investment strategy.

In purchasing securities on a when-issued or forward commitment basis, a fund
will establish and maintain until the settlement date a segregated account
consisting of cash, cash equivalents or other appropriate liquid securities in
an amount sufficient to meet the purchase price. When the time comes to pay for
the when-issued securities, the fund will meet its obligations with available
cash, through the sale of securities, or, although it would not normally expect
to do so, by selling the when-issued securities themselves (which may have a
market value greater or less than the fund's payment obligation). Selling
securities to meet when-issued or forward commitment obligations may generate
taxable capital gains or losses.

INVERSE FLOATERS

An inverse floater is a type of derivative security that bears an interest rate
that moves inversely to market interest rates. As market interest rates rise,
the interest rate on inverse floaters goes down, and vice versa. Generally, this
is accomplished by expressing the interest rate on the inverse floater as an
above-market fixed rate of interest, reduced by an amount determined by
reference to a market-based or bond-specific floating interest rate (as well as
by any fees associated with administering the inverse floater program).

Inverse floaters may be issued in conjunction with an equal amount of Dutch
Auction floating-rate bonds (floaters), or a market-based index may be used to
set the interest rate on these securities. A Dutch Auction is an auction system
in which the price of the security is gradually lowered until it meets a
responsive bid and is sold. Floaters and inverse floaters may be brought to
market by a broker-dealer who purchases fixed-rate bonds and places them in a
trust or by an issuer seeking to reduce interest expenses by using a
floater/inverse floater structure in lieu of fixed-rate bonds.

In the case of a broker-dealer structured offering (where underlying fixed-rate
bonds have been placed in a trust), distributions from the underlying bonds are
allocated to floater and inverse floater holders in the following manner:

(i) Floater holders receive interest based on rates set at a six month
interval or at a Dutch Auction, which is typically held every 28 to 35
days. Current and prospective floater holders bid the minimum interest
rate that they are willing to accept on the floaters, and the interest
rate is set just high enough to ensure that all of the floaters are
sold.
(ii) Inverse floater holders receive all of the interest that remains on the
underlying bonds after floater interest and auction fees are paid.

Procedures for determining the interest payment on floaters and inverse floaters
brought to market directly by the issuer are comparable, although the interest
paid on the inverse floaters is based on a presumed coupon rate that would have
been required to bring fixed-rate bonds to market at the time the floaters and
inverse floaters were issued.

Where inverse floaters are issued in conjunction with floaters, inverse floater
holders may be given the right to acquire the underlying security (or to create
a fixed-rate bond) by calling an equal amount of corresponding floaters. The
underlying security may then be held or sold. However, typically, there are time
constraints and other limitations associated with any right to combine interests
and claim the underlying security.

Floater holders subject to a Dutch Auction procedure generally do not have the
right to "put back" their interests to the issuer or to a third party. If a
Dutch Auction fails, the floater holder may be required to hold its position
until the underlying bond matures, during which time interest on the floater is
capped at a predetermined rate.

The secondary market for floaters and inverse floaters may be limited. The
market value of inverse floaters tends to be significantly more volatile than
fixed-rate bonds. The interest rates on inverse floaters may be significantly
reduced, even to zero, if interest rates rise.

SHORT-TERM SECURITIES

In order to meet anticipated redemptions, to hold pending the purchase of
additional securities for a fund's portfolio, or, in some cases, for temporary
defensive purposes, the funds may invest a portion of their assets in money
market and other short-term securities.

Examples of those securities include

* Securities issued or guaranteed by the U.S. government and its agencies and
instrumentalities;

* Commercial Paper;

* Certificates of Deposit and Euro Dollar Certificates of Deposit;

* Bankers' Acceptances;

* Short-term notes, bonds, debentures, or other debt instruments; and

* Repurchase agreements.

Each of the funds may invest up to 5% of its total assets in any other mutual
fund, including those advised by the manager, provided that the investment is
consistent with the fund's investment policies and restrictions. Under the
Investment Company Act of 1940 (the "Investment Company Act"), the fund's
investment in such securities, subject to certain exceptions, currently is
limited to (a) 3% of the total voting stock of any one investment company, (b)
5% of the fund's total assets with respect to any one investment company and (c)
10% of the fund's total assets in the aggregate. Such purchases will be made in
the open market where no commission or profit to a sponsor or dealer results
from the purchase other than the customary brokers' commissions. As a
shareholder of another investment company, a fund would bear, along with other
shareholders, its pro rata portion of the other investment company's expenses,
including advisory fees. These expenses would be in addition to the management
fee that each fund bears directly in connection with its own operations.

FUTURES AND OPTIONS

Each fund may enter into futures contracts, options or options on futures
contracts. Funds may not, however, enter into a futures transaction for
speculative purposes. Generally, futures transactions will be used to

* protect against a decline in market value of the funds' securities (taking
a SHORT futures position), or

* protect against the risk of an increase in market value for securities in
which the fund generally invests at a time when the fund is not
fully-invested (taking a LONG futures position), or

* provide a temporary substitute for the purchase of an individual security
that may be purchased in an orderly fashion.

Some futures and options strategies, such as SELLING futures, buying puts and
writing calls, hedge a fund's investments against price fluctuations. Other
strategies, such as BUYING futures, writing puts and buying calls, tend to
increase market exposure. Although other techniques may be used to control a
fund's exposure to market fluctuations, the use of futures contracts may be a
more effective means of hedging this exposure. While a fund pays brokerage
commissions in connection with opening and closing out futures positions, these
costs are lower than the transaction costs incurred in the purchase and sale of
the underlying securities.

For example, the "sale" of a future by a fund means the fund becomes obligated
to deliver the security (or securities, in the case of an "index" future) at a
specified price on a specified date. The "purchase" of a future means the fund
becomes obligated to buy the security (or securities) at a specified price on a
specified date. Futures contracts provide for the sale by one party and purchase
by another party of a specific security at a specified future time and price.
The funds may engage in futures and options transactions based on securities
indexes that are consistent with the fund's investment objectives. Examples of
indexes that may be used include the Bond Buyer Index of Municipal Bonds, for
fixed income funds, or the S&P 500 Index, for equity funds. The fund also may
engage in futures and options transactions based on specific securities, such as
U.S. Treasury bonds or notes. Futures contracts are traded on national futures
exchanges. Futures exchanges and trading are regulated under the Commodity
Exchange Act by the Commodity Futures Trading Commission (CFTC), a U.S.
government agency.

Index futures contracts differ from traditional futures contracts in that when
delivery takes place, no stocks or bonds change hands. Instead, these contracts
settle in cash at the spot market value of the Index. Although other types of
futures contracts by their terms call for actual delivery or acceptance of the
underlying securities, in most cases the contracts are closed out before the
settlement date. A futures position may be closed by taking an opposite position
in an identical contract (i.e., buying a contract that has previously been sold
or selling a contract that has previously been bought).

Unlike when the fund purchases or sells a bond, no price is paid or received by
the fund upon the purchase or sale of the future. Initially, the fund will be
required to deposit an amount of cash or securities equal to a varying specified
percentage of the contract amount. This amount is known as initial margin. The
margin deposit is intended to assure completion of the contract (delivery or
acceptance of the underlying security) if it is not terminated prior to the
specified delivery date. They do not constitute "margin transactions" for
purposes of the funds' investment restrictions. Minimum initial margin
requirements are established by the futures exchanges and may be revised. In
addition, brokers may establish margin deposit requirements that are higher than
the exchange minimums. Cash held in the margin account is not income producing.
Subsequent payments, called variation margin, to and from the broker, will be
made on a daily basis as the price of the underlying debt securities or index
fluctuates, making the future more or less valuable , a process known as marking
the contract to market. Changes in variation margin are recorded by the fund as
unrealized gains or losses. At any time prior to expiration of the future, the
fund may elect to close the position by taking an opposite position that will
operate to terminate its position in the future. A final determination of
variation margin is then made; additional cash is required to be paid by or
released to the fund and the fund realizes a loss or gain.

*RISKS RELATED TO FUTURES AND OPTIONS TRANSACTIONS

Futures and options prices can be volatile, and trading in these markets
involves certain risks. If the advisor applies a hedge at an inappropriate time
or judges interest rate or equity market trends incorrectly, futures and options
strategies may lower a fund's return.

A fund could suffer losses if it were unable to close out its position because
of an illiquid secondary market. Futures contracts may be closed out only on an
exchange that provides a secondary market for these contracts, and there is no
assurance that a liquid secondary market will exist for any particular futures
contract at any particular time. Consequently, it may not be possible to close a
futures position when the advisor considers it appropriate or desirable to do
so. In the event of adverse price movements, a fund would be required to
continue making daily cash payments to maintain its required margin. If the fund
had insufficient cash, it might have to sell portfolio securities to meet daily
margin requirements at a time when the advisor would not otherwise elect to do
so. In addition, a fund may be required to deliver or take delivery of
instruments underlying futures contracts it holds. The advisor will seek to
minimize these risks by limiting the contracts entered into on behalf of the
funds to those traded on national futures exchanges and for which there appears
to be a liquid secondary market.

A fund could suffer losses if the prices of its futures and options positions
were poorly correlated with its other investments, or if securities underlying
futures contracts purchased by a fund had different maturities than those of the
portfolio securities being hedged. Such imperfect correlation may give rise to
circumstances in which a fund loses money on a futures contract at the same time
that it experiences a decline in the value of its "hedged" portfolio securities.
A fund also could lose margin payments it has deposited with a margin broker,
if, for example, the broker became bankrupt.

Most futures exchanges limit the amount of fluctuation permitted in futures
contract prices during a single trading day. The daily limit establishes the
maximum amount that the price of a futures contract may vary either up or down
from the previous day's settlement price at the end of the trading session. Once
the daily limit has been reached in a particular type of contract, no trades may
be made on that day at a price beyond the limit. However, the daily limit
governs only price movement during a particular trading day and, therefore, does
not limit potential losses. In addition, the daily limit may prevent liquidation
of unfavorable positions. Futures contract prices have occasionally moved to the
daily limit for several consecutive trading days with little or no trading,
thereby preventing prompt liquidation of futures positions and subjecting some
futures traders to substantial losses.

*OPTIONS ON FUTURES

By purchasing an option on a futures contract, a fund obtains the right, but not
the obligation, to sell the futures contract (a put option) or to buy the
contract (a call option) at a fixed strike price. A fund can terminate its
position in a put option by allowing it to expire or by exercising the option.
If the option is exercised, the fund completes the sale of the underlying
security at the strike price. Purchasing an option on a futures contract does
not require a fund to make margin payments unless the option is exercised.

Although they do not currently intend to do so, the funds may write (or sell)
call options that obligate it to sell (or deliver) the option's underlying
instrument upon exercise of the option. While the receipt of option premiums
would mitigate the effects of price declines, the funds would give up some
ability to participate in a price increase on the underlying security. If a fund
were to engage in options transactions, it would own the futures contract at the
time a call were written and would keep the contract open until the obligation
to deliver it pursuant to the call expired.

*RESTRICTIONS ON THE USE OF FUTURES CONTRACTS AND OPTIONS

Each fund may enter into futures contracts, options or options on futures
contracts.

Under the Commodity Exchange Act, a fund may enter into futures and options
transactions (a) for hedging purposes without regard to the percentage of assets
committed to initial margin and option premiums or (b) for other than hedging
purposes, provided that assets committed to initial margin and option premiums
do not exceed 5% of the fund's total assets. To the extent required by law, each
fund will set aside cash and appropriate liquid assets in a segregated account
to cover its obligations related to futures contracts and options.

RESTRICTED AND ILLIQUID SECURITIES

The funds may, from time to time, purchase restricted or illiquid securities,
including Rule 144A securities, when they present attractive investment
opportunities that otherwise meet the funds' criteria for selection. Rule 144A
securities are securities that are privately placed with and traded among
qualified institutional investors rather than the general public. Although Rule
144A securities are considered "restricted securities," they are not necessarily
illiquid.

With respect to securities eligible for resale under Rule 144A, the staff of the
SEC has taken the position that the liquidity of such securities in the
portfolio of a fund offering redeemable securities is a question of fact for the
Board of Directors to determine, such determination to be based upon a
consideration of the readily available trading markets and the review of any
contractual restrictions. Accordingly, the Board of Directors is responsible for
developing and establishing the guidelines and procedures for determining the
liquidity of Rule 144A securities. As allowed by Rule 144A, the Board of
Directors of the funds has delegated the day-to-day function of determining the
liquidity of Rule 144A securities to the advisor. The board retains the
responsibility to monitor the implementation of the guidelines and procedures it
has adopted.

Since the secondary market for such securities is limited to certain qualified
institutional investors, the liquidity of such securities may be limited
accordingly and a fund may, from time to time, hold a Rule 144A or other
security that is illiquid. In such an event, the advisor will consider
appropriate remedies to minimize the effect on such fund's liquidity.

INVESTMENT POLICIES

Unless otherwise indicated, with the exception of the percentage limitations on
borrowing, the restrictions apply at the time transactions are entered into.
Accordingly, any later increase or decrease beyond the specified limitation
resulting from a change in a fund's net assets will not be considered in
determining whether it has complied with its investment restrictions.

*FUNDAMENTAL INVESTMENT POLICIES

The funds' investment restrictions are set forth below. These investment
restrictions are fundamental and may not be changed without approval of a
majority of the outstanding votes of shareholders of a fund, as determined in
accordance with the Investment Company Act.

- ------------------------- ------------------------------------------------------
SUBJECT POLICIES
- ------------------------- ------------------------------------------------------
Senior Securities A fund may not issue senior securities,
except as permitted under the Investment Company Act.
Borrowing A fund may not borrow money, except that the fund may
borrow money for temporary or emergency purposes (not
for leveraging or investment) in an amount not
exceeding 33-1/3% of the fund's total assets
(including the amount borrowed) less liabilities
(other than borrowings).
Lending A fund may not lend any security or make any other
loan if, as a result, more than 33-1/3% of the fund's
total assets would be lent to other parties, except,
(i) through the purchase of debt securities in
accordance with its investment objective, policies and
limitations or (ii) by engaging in repurchase
agreements with respect to portfolio securities.
Real Estate A fund may not purchase or sell real estate
unless acquired as a result of ownership of securities
or other instruments. This policy shall not prevent
the fund from investment in securities or other
instruments backed by real estate or securities of
companies that deal in real estate or are engaged in
the real estate business.
Concentration A fund may not concentrate its investments in
securities of issuers in a particular industry (other
than securities issued or guaranteed by the U.S.
government or any of its agencies or
instrumentalities).
Underwriting A fund may not act as an underwriter of securities
issued by others, except to the extent that the fund
may be considered an underwriter within the meaning of
the Securities Act of 1933 in the disposition of
restricted securities.
Commodities A fund may not purchase or sell physical commodities
unless acquired as a result of ownership of securities
or other instruments; provided that this limitation
shall not prohibit the fund from purchasing or selling
options and futures contracts or from investing in
securities or other instruments backed by physical
commodities.
Control A fund may not invest for purposes of exercising
control over management.
- ------------------------- ------------------------------------------------------

For purposes of the investment restriction relating to concentration, a fund
shall not purchase any securities that would cause 25% or more of the value of
the fund's total assets at the time of purchase to be invested in the securities
of one or more issuers conducting their principal business activities in the
same industry, provided that (a) there is no limitation with respect to
obligations issued or guaranteed by the U.S. government, any state, territory or
possession of the United States, the District of Columbia or any of their
authorities, agencies, instrumentalities or political subdivisions and
repurchase agreements secured by such instruments, (b) wholly owned finance
companies will be considered to be in the industries of their parents if their
activities are primarily related to financing the activities of the parents, (c)
utilities will be divided according to their services, for example, gas, gas
transmission, electric and gas, electric and telephone will each be considered a
separate industry, and (d) personal credit and business credit businesses will
be considered separate industries.

*NONFUNDAMENTAL INVESTMENT POLICIES

In addition, the funds are subject to the following additional investment
restrictions that are not fundamental and may be changed by the Board of
Directors.

- --------------------------- ----------------------------------------------------
SUBJECT POLICIES
- --------------------------- ----------------------------------------------------
Diversification A fund may not purchase additional investment
securities at any time during which outstanding
borrowings exceed 5% of the total assets of the
fund.
Liquidity A fund may not purchase any security or enter into a
repurchase agreement if, as a result, more than 15%
of its net assets (10% for the money market funds)
would be invested in repurchase agreements not
entitling the holder to payment of principal and
interest within seven days and in securities that
are illiquid by virtue of legal or contractual
restrictions on resale or the absence of a readily
available market.
Short Sales A fund may not sell securities short, unless
it owns or has the right to obtain securities
equivalent in kind and amount to the securities sold
short, and provided that transactions in futures
contracts and options are not deemed to constitute
selling securities short.
Margin A fund may not purchase securities on margin, except
that the fund may obtain such
short-term credits as are necessary for the
clearance of transactions, and provided that
margin payments in connection with futures contracts
and options on futures contracts shall not
constitute purchasing securities on margin.
- --------------------------- ----------------------------------------------------

The Investment Company Act imposes certain additional restrictions upon
acquisition by the corporation of securities issued by insurance companies,
broker-dealers, underwriters or investment advisors, and upon transactions with
affiliated persons as therein defined. It also defines and forbids the creation
of cross and circular ownership. Neither the Securities and Exchange Commission
nor any other agency of the federal or state agency participates in or
supervises the management of the funds or their investment practices or
policies.

The Investment Company Act also provides that the funds may not invest more than
25% of their assets in the securities of issuers engaged in a single industry.
In determining industry groups for purposes of this restriction, the SEC
ordinarily uses the Standard Industry Classification codes developed by the
United States Office of Management and Budget. In the interest of ensuring
adequate diversification, the funds monitor industry concentration using a more
restrictive list of industry groups than that recommended by the SEC. The funds
believe that these classifications are reasonable and are not so broad that the
primary economic characteristics of the companies in a single class are
materially different. The use of these restrictive industry classifications may,
however, cause the funds to forego investment possibilities that may otherwise
be available to them under the Investment Company Act.

PORTFOLIO TURNOVER

*TAX-MANAGED VALUE FUND

The managers of the Tax-Managed Value fund seek to minimize realized capital
gains by keeping portfolio turnover low and generally holding its investments
for long periods. Because a higher turnover rate would increase transaction
costs and may increase taxable capital gains, the manager carefully weighs the
potential benefits of short-term investing against the tax impact such investing
would have on the fund's shareholders.

*OTHER FUNDS

The portfolio turnover rates of the funds (other than the Tax-Managed Value) are
shown in the Financial Highlights table in the prospectuses.

With respect to each other fund, the manager will purchase and sell securities
without regard to the length of time the security has been held. Accordingly,
the fund's rate of portfolio turnover may be substantial.

The funds intend to purchase a given security whenever the manager believes it
will contribute to the stated objective of the fund. In order to achieve each
fund's investment objective, the manager will sell a given security, no matter
for how long or for how short a period it has been held in the portfolio, and no
matter whether the sale is at a gain or at a loss, if the manger believes that
the security is not fulfilling its purpose, either because, among other things,
it did not live up to the manager's expectations, or because it may be replaced
with another security holding greater promise, or because it has reached its
optimum potential, or because of a change in the circumstances of a particular
company or industry or in general economic conditions, or because of some
combination of such reasons.

When a general decline in security prices is anticipated, the equity funds may
decrease or eliminate entirely their equity positions and increase their cash
positions, and when a rise in price levels is anticipated, the equity funds may
increase their equity positions and increase their cash positions. However, it
should be expected that the funds will, under most circumstances, be essentially
fully invested in equity securities.

Since investment decisions are based on the anticipated contribution of the
security in question to the fund's objectives, the manager believes that the
rate of portfolio turnover is irrelevant when it believes a change is in order
to achieve those objectives. As a result, the fund's annual portfolio turnover
rate cannot be anticipated and may be higher than other mutual funds with
similar investment objectives. Higher turnover would generate correspondingly
greater brokerage commissions, which is a cost the funds pay directly. Portfolio
turnover may also affect the character of capital gains realized and distributed
by the fund, if any, since short-term capital gains are taxable as ordinary
income. This disclosure regarding portfolio turnover is a statement of
fundamental policy and may be changed only by a vote of the shareholders.

Since the manager does not take portfolio turnover rate into account in making
investment decisions, (1) the manager has no intention of accomplishing any
particular rate of portfolio turnover, whether high or low, and (2) the
portfolio turnover rates in the past should not be considered as a
representation of the rates that will be attained in the future.

MANAGEMENT

*THE BOARD OF DIRECTORS

The Board of Directors oversees the management of the funds and meets at least
quarterly to review reports about fund operations. Although the Board of
Directors does not manage the funds, it has hired the advisor to do so. More
than half of the directors are "independent" of the funds' advisor, that is,
they are not employed by and have no financial interest in the advisor.

The individuals listed in the table below whose names are marked by an asterisk
(*) are interested persons of the funds (as defined in the Investment Company
Act) by virtue of, among other considerations, their affiliation with either the
funds; the advisor, American Century Investment Management, Inc. (ACIM); the
funds' agent for transfer and administrative services, American Century Services
Corporation (ACSC); the funds' distribution agent and co-administrator, Funds
Distributor, Inc. (FDI); the parent corporation, American Century Companies,
Inc. (ACC) or ACC's subsidiaries; or other funds advised by the advisor. Each
director listed below serves as a director of six registered investment
companies in the American Century family of funds, which are also advised by the
advisor. The address at which each director listed below is American Century
Tower I, 4500 Main Street, Kansas City, Missouri 64111.

<TABLE>
- -------------------------------------- ------------------------- -----------------------------------------------------------
NAME (AGE) POSITION(S) HELD WITH PRINCIPAL OCCUPATION(S)
ADDRESS FUND DURING PAST 5 YEARS
- -------------------------------------- ------------------------- -----------------------------------------------------------
<S> <C> <C>
James E. Stowers, Jr.* (74) Director, Chairman of Chairman, Director and controlling shareholder, ACC,
the Board Chairman and Director, ACIM and ACIS
James E. Stowers III* (39) Director Director and Chief Executive Officer, ACC, ACIM and ACIS
Thomas A. Brown (58) Director Director of Plains States Development, Applied Industrial
Technologies, Inc., a corporation engaged in the sale of
bearings and power transmission products
Robert W. Doering, M.D. (65) Director Retired, formerly a general surgeon
Andrea C. Hall, Ph.D. (54) Director Senior Vice President and Associate Director, Midwest
Research Institute
D.D. (Del) Hock (63) Director Retired, formerly Chairman, Public Service Company of
Colorado; Director, Service Tech, Inc., Hathaway
Corporation, and J.D. Edwards & Company
Donald H. Pratt (60) Director, Vice Chairman President and Director, Butler Manufacturing Company
of the Board
Lloyd T. Silver, Jr. (70) Director President, LSC, Inc., manufacturer's representative
M. Jeannine Strandjord (52) Director Senior Vice President, Finance, Sprint Corporation;
Director, DST Systems, Inc.
- -------------------------------------- ------------------------- -----------------------------------------------------------

*COMMITTEES

The Board has four standing committees to oversee specific functions of the
funds' operations. Other than the Nominating Committee, only independent
directors serve on these committees. Information about these committees appears
in the table below. The Director first named acts as chairman of the committee.

- ------------------- ----------------------------- ---------------------------------------------------------------------
COMMITTEE MEMBERS FUNCTION OF COMMITTEE
- ------------------- ----------------------------- ---------------------------------------------------------------------
Executive James E. Stowers III The Executive Committee performs the functions of the Board of
Donald H. Pratt Directors between Board meetings, subject to the limitations on its
power set out in the Maryland General Corporation Law, and except
for matters required by the Investment Company Act to be acted upon
by the whole Board.
- ------------------- ----------------------------- ---------------------------------------------------------------------
Compliance Donald H. Pratt The Compliance Committee reviews the results of the funds'
Lloyd T. Silver, Jr. compliance testing program, reviews quarterly reports from the
Andrea C. Hall, Ph.D. advisor to the Board regarding various compliance matters and
monitors the implementation of the funds' Code of Ethics, including
any violations thereof.
- ------------------- ----------------------------- ---------------------------------------------------------------------
Audit M. Jeannine Strandjord The Audit Committee recommends the engagement of the funds'
Robert W. Doering, M.D. independent auditor and oversees its activities. The Committee
D.D. (Del) Hock receives reports from the advisor's Internal Audit Department,
which is accountable solely to the Committee. The Committee
also receives reporting about compliance matters affecting
the funds.
- ------------------- ----------------------------- ---------------------------------------------------------------------
Nominating Donald H. Pratt The Nominating Committee primarily considers and recommends
D.D. (Del) Hock individuals for nomination as directors. The names of potential
James E. Stowers III director candidates are drawn from a number of sources, including
recommendations from members of the Board, management and
shareholders. This committee also reviews and makes recommendations
to the Board with respect to the composition of Board committees and
other Board-related matters, including its organization, size,
composition, responsibilities, functions and compensation.
- ------------------- ----------------------------- ---------------------------------------------------------------------
</TABLE>

*COMPENSATION OF DIRECTORS

The directors also serve as directors for five American Century investment
companies other than American Century Mutual Funds, Inc. Each director who is
not an "interested person" as defined in the Investment Company Act receives
compensation for service as a member of the Board of all six such companies
based on a schedule that takes into account the number of meetings held and the
assets of the funds for which the meetings are held. These fees and expenses are
divided among the six investment companies based, in part, upon their relative
net assets. Under the terms of the management agreement with the advisor, the
funds are responsible for paying such fees and expenses.

The table presented shows the aggregate compensation paid by ACMF for the
periods indicated and by the American Century family of funds as a whole to each
trustee who is not an "interested person" as defined in the Investment Company
Act.

Aggregate Director Compensation for Fiscal Year Ended October 31, 1998
- -------------------------- -------------------------- -------------------------
TOTAL COMPENSATION FROM
THE
TOTAL COMPENSATION FROM AMERICAN CENTURY FAMILY
ACIM2 OF FUNDS3

NAME OF DIRECTOR1
- -------------------------- -------------------------- -------------------------
James E. Stowers, Jr. [INFORMATION NOT YET AVAILABLE]
James E. Stowers III
Thomas A. Brown
Robert W. Doering, M.D.
Andrea C. Hall, Ph.D.
D.D. (Del) Hock
Donald H. Pratt
Lloyd T. Silver, Jr.
M. Jeannine Strandjord
- -------------------------- -------------------------- -------------------------

1 Interested directors receive no compensation for their services as such.

2 Includes compensation paid to the directors during the fiscal year ended
October 31, 1998, and also includes amounts deferred at the election of the
directors under the American Century Mutual Funds Deferred Compensation
Plan for Non-Interested Directors and Trustees. The total amount of
deferred compensation included in the preceding table is as follows:
[INFORMATION NOT YET AVAILABLE].

3 Includes compensation paid by the 13 investment company members of the
American Century family of funds.

The funds have adopted the American Century Deferred Compensation Plan for
Non-Interested Directors and Trustees. Under the plan, the independent directors
may defer receipt of all or any part of the fees to be paid to them for serving
as directors of the funds.

Under the plan, all deferred fees are credited to an account established in the
name of the directors. The amounts credited to the account then increase or
decrease, as the case may be, in accordance with the performance of one or more
of the American Century funds that are selected by the director. The account
balance continues to fluctuate in accordance with the performance of the
selected fund or funds until final payment of all amounts credited to the
account. Directors are allowed to change their designation of mutual funds from
time to time.

No deferred fees are payable until such time as a director resigns, retires or
otherwise ceases to be a member of the Board of Directors. Directors may receive
deferred fee account balances either in a lump sum payment or in substantially
equal installment payments to be made over a period not to exceed 10 years. Upon
the death of a director, all remaining deferred fee account balances are paid to
the director's beneficiary or, if none, to the director's estate.

The plan is an unfunded plan and, accordingly, the funds have no obligation to
segregate assets to secure or fund the deferred fees. The rights of directors to
receive their deferred fee account balances are the same as the rights of a
general unsecured creditor of the funds. The plan may be terminated at any time
by the administrative committee of the plan. If terminated, all deferred fee
account balances will be paid in a lump sum.

[No deferred fees were paid to any director under the plan during the fiscal
year ended October 31, 1998]

*OFFICERS

Background for the officers of the funds is provided below. All persons named as
officers of the funds also serve in similar capacities for the 12 other
investment companies advised by American Century. Not all officers of the funds
are listed; only those officers with policy-making functions are listed. No
officer is compensated for his or her service as an officer of the funds. The
individuals listed in the table below are interested persons of the funds (as
defined in the Investment Company Act) by virtue of, among other considerations,
their affiliation with either the funds, the holding company of the funds'
investment advisor and transfer agent (ACC), ACC's subsidiaries (including ACIM
and ACSC), or the funds' distributor (FDI), as specified in the following table.

<TABLE>
<CAPTION>
- -------------------------------------- ---------------- ----------------------------------------------------------------
POSITION(S)
NAME (AGE) HELD WITH FUND PRINCIPAL OCCUPATION(S)
ADDRESS DURING PAST 5 YEARS
- -------------------------------------- ---------------- ----------------------------------------------------------------
<S> <C> <C>
[Richard W. Ingram (43) President Executive Vice President and Director of Client Services and
Treasury Administration of FDI. Mr. Ingram joined FDI in
1995. Prior to joining FDI, Mr. Ingram served as Vice
President].

Christopher J. Kelley (34) Vice President Vice President and Associate General Counsel of FDI. Prior to
joining FDI, Mr. Kelley served as Assistant Counsel at Forum
Financial Group (from April 1994 to July 1996) and before that
as a compliance officer for Putnam Investments (from 1992 to
1994).

Mary A. Nelson (34) Vice President Vice President and Manager of Treasury Services and
Administration of FDI. Prior to joining FDI, Ms. Nelson
served as Assistant Vice President and Client Manager for The
Boston Company, Inc. (from 1989 to 1994).

Maryanne Roepke, CPA (43) Vice President Senior Vice President, Treasurer and Principal Accounting
and Treasurer Officer, ACSC

Patrick A. Looby (40) Vice President Vice President and Associate General Counsel, ACSC

Douglas A. Paul (52) Secretary and Vice President and Associate General Counsel, ACSC
Vice President

C. Jean Wade (35) Controller Controller-Fund Accounting, ACSC

Jon Zindel (32) Tax Officer Director of Taxation, ACSC (since 1996)
Tax Manager, Price Waterhouse LLPC (1989)
- -------------------------------------- ---------------- ----------------------------------------------------------------
</TABLE>

*THE FUNDS' BIGGEST SHAREHOLDERS

As of December 31, 1998, the following companies were the record owners of more
than 5% of a fund's outstanding shares:

% OF SHARES
# OF SHARES OUTSTANDING
HELD
FUND SHAREHOLDER
Growth
Ultra
Select [INFORMATION NOT YET AVAILABLE]
Vista
Heritage
Balanced
Tax-Managed Value
Giftrust
New Opportunities
Limited-Term Bond
Intermediate-Term Bond
Bond
High-Yield

The funds are unaware of any other shareholders, beneficial or of record, who
own more than 5% of a fund's outstanding shares. As of December 31, 1998, the
officers and directors of the funds, as a group, own less than 1% of any fund's
outstanding shares.

SERVICE PROVIDERS

The funds have no employees. To conduct the funds' day-to-day activities, the
funds have hired a number of service providers. Each service provider has a
specific function to fill on behalf of the funds and is described below.

The advisor and the transfer agent, ACSC, are both wholly owned by ACC. James E.
Stowers Jr., Chairman of ACC, controls ACC by virtue of his ownership of a
majority of its common stock.

*INVESTMENT ADVISOR

Each fund has an investment management agreement with the advisor, American
Century Investment Management, Inc., dated [August 1, 1997]. This agreement was
approved by the shareholders of each of the funds on [July 30, 1997].

A description of the responsibilities of the advisor appears in the Prospectus
under the caption "Management."

For the services provided to the funds, the advisor receives a monthly fee based
on a percentage of the average net assets of the fund.

On the first business day of each month, the funds pay a management fee to the
advisor for the previous month at the specified rate. The fee for the previous
month is calculated by multiplying the applicable fee for the fund by the
aggregate average daily closing value of a fund's net assets during the previous
month, and further multiplying that product by a fraction, the numerator of
which is the number of days in the previous month and the denominator of which
is 365 (366 in leap years).

The management agreement shall continue in effect until the earlier of the
expiration of two years from the date of its execution or until the first
meeting of shareholders following such execution and for as long thereafter as
its continuance is specifically approved at least annually by (1) the funds'
Board of Directors, or by the vote of a majority of outstanding votes (as
defined in the Investment Company Act) and (2) by the vote of a majority of the
directors of the funds who are not parties to the agreement or interested
persons of the advisor, cast in person at a meeting called for the purpose of
voting on such approval.

The management agreement provides that it may be terminated at any time without
payment of any penalty by the funds' Board of Directors, or by a vote of a
majority of outstanding votes, on 60 days' written notice to the advisor, and
that it shall be automatically terminated if it is assigned.

The management agreement provides that the advisor shall not be liable to the
funds or its shareholders for anything other than willful misfeasance, bad
faith, gross negligence or reckless disregard of its obligations and duties.

The management agreement also provides that the advisor and its officers,
directors and employees may engage in other business, devote time and attention
to any other business whether of a similar or dissimilar nature, and render
services to others.

Certain investments may be appropriate for the funds and also for other clients
advised by the advisor. Investment decisions for the funds and other clients are
made with a view to achieving their respective investment objectives after
consideration of such factors as their current holdings, availability of cash
for investment and the size of their investment generally. A particular security
may be bought or sold for only one client or fund, or in different amounts and
at different times for more than one but less than all clients or fund. In
addition, purchases or sales of the same security may be made for two or more
clients or fund on the same date. Such transactions will be allocated among
clients in a manner believed by the advisor to be equitable to each. In some
cases this procedure could have an adverse effect on the price or amount of the
securities purchased or sold by a fund.

The advisor may aggregate purchase and sale orders of the funds with purchase
and sale orders of its other clients when the advisor believes that such
aggregation provides the best execution for the funds. The funds' Board of
Directors has approved the policy of the advisor with respect to the aggregation
of portfolio transactions. Where portfolio transactions have been aggregated,
the funds participate at the average share price for all transactions in that
security on a given day and share transaction costs on a pro rata basis. The
advisor will not aggregate portfolio transactions of the funds unless it
believes such aggregation is consistent with its duty to seek best execution on
behalf of the funds and the terms of the management agreement. The advisor
receives no additional compensation or remuneration as a result of such
aggregation.

Investment management fees paid by each fund for the fiscal periods ended
October 31, 1998, 1997 and 1996, are indicated in the following table.

UNIFIED MANAGEMENT FEES
- ----------------------- ------------------- ------------------- ----------------
FUND 1998 1997 1996
- ----------------------- ------------------- ------------------- ----------------
Growth $48,473,362 $47,632,557
Ultra 204,740,370 162,207,777
Select DATA 44,667,241 39,305,054
Vista NOT 19,603,205 20,199,050
Heritage YET 11,959,662 10,572,605
Balanced AVAILABLE 9,021,923 8,345,585
Tax-Managed Value N/A N/A
Giftrust 9,052,939 7,161,935
New Opportunities 2,150,593
Limited-Term Bond 78,059 52,116
Intermediate-Term Bond 131,721 108,870
Bond 1,057,852 1,148,428
High-Yield 8,462
- ----------------------- ------------------- ------------------- ----------------

**CALLOUT BOX********

Other Advisory Relationships

In addition to managing the funds, the advisor also acts as an investment
advisor to 12 institutional accounts and to the following registered investment
companies:
American Century World Mutual Funds, Inc.
American Century Premium Reserves, Inc.
American Century Variable Portfolios, Inc.
American Century Capital Portfolios, Inc.
American Century Strategic Asset Allocations, Inc.
American Century Municipal Trust
American Century Government Income Trust
American Century Investment Trust
American Century Target Maturities Trust
American Century Quantitative Equity Funds
American Century International Bond Funds.
American Century California Tax-Free and Municipal Funds
**END CALLOUT BOX******

*TRANSFER AGENT AND ADMINISTRATOR

American Century Services Corporation, 4500 Main Street, Kansas City, Missouri
64111, acts as transfer agent and dividend paying agent for the funds. It
provides physical facilities, computer hardware and software and personnel, for
the day-to-day administration of the funds and of the advisor. The advisor pays
American Century Services Corporation for such services.

From time to time, special services may be offered to shareholders who maintain
higher share balances in our family of funds. These services may include the
waiver of minimum investment requirements, expedited confirmation of shareholder
transactions, newsletters and a team of personal representatives. Any expenses
associated with these special services will be paid by the manager.

Pursuant to a Sub-Administration Agreement with the manager, Funds Distributor,
Inc. (FDI) serves as the Co-Administrator for the fund. FDI is responsible for
(i) providing certain officers of the fund and (ii) reviewing and filing
marketing and sales literature on behalf of the fund. The fees and expenses of
FDI are paid by the manager out of its unified fee.

*DISTRIBUTOR

The funds' shares are distributed by Funds Distributors, Inc., a registered
broker-dealer. The distributor is a wholly owned indirect subsidiary of Boston
Institutional Group, Inc. The distributor's principal business address is 60
State Street, Suite 1300, Boston, Massachusetts 02109.

The distributor is the principal underwriter of the funds' shares. The
distributor makes a continuous, best efforts underwriting of the funds' shares.
This means that the distributor has no liability for unsold shares.

OTHER SERVICE PROVIDERS

*CUSTODIAN BANKS

Chase Manhattan Bank, 770 Broadway, 10th Floor, New York, New York 10003-9598,
and Commerce Bank, N.A., 1000 Walnut, Kansas City, Missouri 64105, each serves
as custodian of the assets of the funds. The custodians take no part in
determining the investment policies of the funds or in deciding which securities
are purchased or sold by the funds. The funds, however, may invest in certain
obligations of the custodians and may purchase or sell certain securities from
or to the custodians.

*INDEPENDENT AUDITORS

Deloitte & Touche LLP is the independent auditor of the funds. The address of
Deloitte & Touche LLP is 1010 Grand Avenue, Kansas City, Missouri 64106. As the
independent auditor of the funds, Deloitte & Touche provides services including
(1) audit of the annual financial statements, (2) assistance and consultation in
connection with SEC filings and (3) review of the annual federal income tax
return filed for each fund.

Baird, Kurtz & Dobson, 1100 Main Street, Kansas City, Missouri 64105, served as
independent auditors for the funds for the period ended October 31, 1996 and for
all prior periods.

BROKERAGE ALLOCATION

*SELECT, HERITAGE, GROWTH, ULTRA, VISTA, TAX-MANAGED VALUE, GIFTRUST AND THE
EQUITY PORTION OF BALANCED

Under the management agreement between the funds and the manager, the manager
has the responsibility of selecting brokers to execute portfolio transactions.
The funds' policy is to secure the most favorable prices and execution of orders
on its portfolio transactions. So long as that policy is met, the manager may
take into consideration the factors discussed below when selecting brokers.

The manager receives statistical and other information and services, including
research, without cost from brokers and dealers. The manager evaluates such
information and services, together with all other information that it may have,
in supervising and managing the investments of the funds. Because such
information and services may vary in amount, quality and reliability, their
influence in selecting brokers varies from none to very substantial. The manager
proposes to continue to place some of the funds' brokerage business with one or
more brokers who provide information and services. Such information and services
will be in addition to and not in lieu of services required to be performed by
the manager. The manager does not utilize brokers that provide such information
and services for the purpose of reducing the expense of providing required
services to the funds.

In the years ended October 31, 1998, 1997 and 1996, the brokerage commissions of
each fund were as follows:

<TABLE>
- --------------------- ----------------------------- ----------------------------- -----------------------------
FUND 1998 1997 1996
- --------------------- ----------------------------- ----------------------------- -----------------------------
<S> <C> <C>
Select $ 6,524,088 $ 8,157,658
Heritage 1,649,678 3,093,265
Growth 5,774,694 13,577,767
Ultra 33,165,434 22,985,927
Vista 2,569,051 2,246,175
Tax-Managed Value N/A N/A
Giftrust 1,329,818 886,460
Balanced 957,506 1,038,530
New Opportunities 264,078 N/A
</TABLE>

The brokerage commissions paid by the funds may exceed those which another
broker might have charged for effecting the same transactions, because of the
value of the brokerage and research services provided by the broker. Research
services furnished by brokers through whom the funds effect securities
transactions may be used by the manager in servicing all of its accounts, and
not all such services may be used by the manager in managing the portfolios of
the funds.

The staff of the SEC has expressed the view that the best price and execution of
over-the-counter transactions in portfolio securities may be secured by dealing
directly with principal market makers, thereby avoiding the payment of
compensation to another broker. In certain situations, the officers of the funds
and the manager believe that the facilities, expert personnel and technological
systems of a broker often enable the funds to secure as good a net price by
dealing with a broker instead of a principal market maker, even after payment of
the compensation to the broker. The funds regularly place its over-the-counter
transactions with principal market makers, but may also deal on a brokerage
basis when utilizing electronic trading networks or as circumstances warrant.

*LIMITED-TERM BOND, INTERMEDIATE-TERM BOND, BOND, HIGH-YIELD AND THE
FIXED-INCOME PORTION OF BALANCED

Under the management agreement between the funds and the advisor, the advisor
has the responsibility of selecting brokers and dealers to execute portfolio
transactions. In many transactions, the selection of the broker or dealer is
determined by the availability of the desired security and its offering price.
In other transactions, the selection of broker or dealer is a function of the
selection of market and the negotiation of price, as well as the broker's
general execution and operational and financial capabilities in the type of
transaction involved. The advisor will seek to obtain prompt execution of orders
at the most favorable prices or yields. The advisor may choose to purchase and
sell portfolio securities to and from dealers who provide services or research,
statistical and other information to the funds and to the advisor. Such
information or services will be in addition to and not in lieu of the services
required to be performed by the advisor, and the expenses of the advisor will
not necessarily be reduced as a result of the receipt of such supplemental
information.

INFORMATION ABOUT FUND SHARES

Each of the 13 funds named on the front of this Statement of Additional
Information is a series of shares issued by the registrant, ACMF. In addition,
each series (or fund) may be divided into separate classes. See "MULTIPLE CLASS
STRUCTURE" that follows. Additional funds and classes may be added without a
shareholder vote.

Each fund votes separately on matters affecting that fund exclusively. Voting
rights are not cumulative, so that investors holding more than 50% of ACMF's
(i.e., all funds') outstanding shares may be able to elect a Board of Directors.
ACMF instituted dollar-based voting, meaning that the number of votes you are
entitled to is based upon the dollar amount of your investment. The election of
directors is determined by the votes received from all ACMF shareholders without
regard to whether a majority of shares of any one fund voted in favor of a
particular nominee or all nominees as a group.

The assets belonging to each series or class of shares are held separately by
the custodian and the shares of each series or class represent a beneficial
interest in the principal, earnings and profit (or losses) of investment and
other assets held for each series or class. Your rights as a shareholder are the
same for all series or class of securities unless otherwise stated. Within their
respective series or class, all shares have equal redemption rights. Each share,
when issued, is fully paid and non-assessable.

In the event of complete liquidation or dissolution of the funds, shareholders
of each series or class of shares shall be entitled to receive, pro rata, all of
the assets less the liabilities of that series or class.

Each shareholder has rights to dividends and distributions declared by the fund
he or she owns and to the net assets of such fund upon its liquidation or
dissolution proportionate to his or her share ownership interest in the fund.
Shares of each fund have equal voting rights, although each fund votes
separately on matters affecting that fund exclusively.

MULTIPLE CLASS STRUCTURE

The funds' Board of Directors has adopted a multiple class plan (the "Multiclass
Plan") pursuant to Rule 18f-3 adopted by the SEC. Pursuant to such plan, the
funds may issue up to four classes of shares: an Investor Class, an
Institutional Class, a Service Class and an Advisor Class. Not all funds offer
all four classes.

The Investor Class is made available to investors directly without any load or
commission, for a single unified management fee. The Institutional, Service and
Advisor Classes are made available to institutional shareholders or through
financial intermediaries that do not require the same level of shareholder and
administrative services from the manager as Investor Class shareholders. As a
result, the manager is able to charge these classes a lower management fee. In
addition to the management fee, however, Service Class shares are subject to a
Shareholder Services Plan (described beginning on page XX), and the Advisor
Class shares are subject to a Master Distribution and Shareholder Services Plan
(described beginning on page XX). Both plans have been adopted by the funds'
Board of Directors and initial shareholder in accordance with Rule 12b-1 adopted
by the SEC under the Investment Company Act.

*RULE 12B-1

Rule 12-1 permits an investment company to pay expenses associated with the
distribution of its shares in accordance with a plan adopted by the investment
company's Board of Directors and approved by its shareholders. Pursuant to such
rule, the Board of Directors and initial shareholder of the funds' Service Class
and Advisor Class have approved and entered into a Shareholder Services Plan,
with respect to the Service Class, and a Master Distribution and Shareholder
Services Plan, with respect to the Advisor Class (collectively, the "Plans").
Both Plans are described below.

In adopting the Plans, the Board of Directors (including a majority of directors
who are not "interested persons" of the funds [as defined in the Investment
Company Act], hereafter referred to as the "independent directors") determined
that there was a reasonable likelihood that the Plans would benefit the funds
and the shareholders of the affected classes. Pursuant to Rule 12b-1,
information with respect to revenues and expenses under the Plans is presented
to the Board of Directors quarterly for its consideration in connection with its
deliberations as to the continuance of the Plans. Continuance of the Plans must
be approved by the Board of Directors (including a majority of the independent
directors) annually. The Plans may be amended by a vote of the Board of
Directors (including a majority of the independent directors), except that the
Plans may not be amended to materially increase the amount to be spent for
distribution without majority approval of the shareholders of the affected
class. The Plans terminate automatically in the event of an assignment and may
be terminated upon a vote of a majority of the independent directors or by vote
of a majority of the outstanding voting securities of the affected class.

All fees paid under the plans will be made in accordance with Section 26 of the
Rules of Fair Practice of the National Association of Securities Dealers.

*SHAREHOLDER SERVICES PLAN

As described in the Prospectuses, the funds' Service Class of shares is made
available to participants in employer-sponsored retirement or savings plans and
to persons purchasing through financial intermediaries, such as banks,
broker-dealers and insurance companies. In such circumstances, certain
recordkeeping and administrative services that are provided by the funds'
transfer agent for the Investor Class shareholders may be performed by a plan
sponsor (or its agents) or by a financial intermediary. To enable the funds'
shares to be made available through such plans and financial intermediaries, and
to compensate them for such services, the funds' manager has reduced its
management fee by 0.25% per annum with respect to the Service Class shares and
the funds' Board of Directors has adopted a Shareholder Services Plan. Pursuant
to the Shareholder Services Plan, the Service Class shares pay a shareholder
services fee of 0.25% annually of the aggregate average daily assets of the
funds' Service Class shares.

The manager and the funds' distributor, Funds Distributor, Inc. (the
"Distributor") enter into contracts with each financial intermediary for the
provision of certain shareholder services and utilizes the shareholder services
fees received under the Shareholder Services Plan to pay for such services.
Payments may be made for a variety of shareholder services, including, but are
not limited to, (a) receiving, aggregating and processing purchase, exchange and
redemption requests from beneficial owners (including contract owners of
insurance products that utilize the funds as underlying investment media) of
shares and placing purchase, exchange and redemption orders with the
Distributor; (b) providing shareholders with a service that invests the assets
of their accounts in shares pursuant to specific or pre-authorized instructions;
(c) processing dividend payments from a fund on behalf of shareholders and
assisting shareholders in changing dividend options, account designations and
addresses; (d) providing and maintaining elective services such as check writing
and wire transfer services; (e) acting as shareholder of record and nominee for
beneficial owners; (f) maintaining account records for shareholders and/or other
beneficial owners; (g) issuing confirmations of transactions; (h) providing
subaccoutning with respect to shares beneficially owned by customers of third
parties or providing the information to a fund as necessary for such
subaccounting; (i) preparing and forwarding shareholder communications from the
funds (such as proxies, shareholder reports, annual and semi-annual financial
statements and dividend, distribution and tax notices) to shareholders and/or
other beneficial owners; (j) providing other similar administrative and
sub-transfer agency services; and (k) paying "service fees" for the provision of
personal, continuing services to investors, as contemplated by the Rules of Fair
Practice of the NASD (collectively referred to as "Shareholder Services").
Shareholder Services do not include those activities and expenses that are
primarily intended to result in the sale of additional shares of the funds.

*MASTER DISTRIBUTION AND SHAREHOLDER SERVICES PLAN

As described in the Prospectuses, the funds' Advisor Class of shares are also
made available to participants in employer-sponsored retirement or savings plans
and to persons purchasing through financial intermediaries, such as banks,
broker-dealers and insurance companies. The Distributor enters into contracts
with various banks, broker-dealers, insurance companies and other financial
intermediaries with respect to the sale of the funds' shares and/or the use of
the funds' shares in various investment products or in connection with various
financial services.

As with the Service Class, certain recordkeeping and administrative services
that are provided by the funds' transfer agent for the Investor Class
shareholders may be performed by a plan sponsor (or its agents) or by a
financial intermediary for shareholders in the Advisor Class. In addition to
such services, the financial intermediaries provide various distribution
services.

To enable the funds' shares to be made available through such plans and
financial intermediaries, and to compensate them for such services, the funds'
manager has reduced its management fee by 0.25% per annum with respect to the
Advisor Class shares and the funds' Board of Directors has adopted a Master
Distribution and Shareholder Services Plan (the "Distribution Plan"). Pursuant
to such Plan, the Advisor Class shares pay a fee of 0.50% annually of the
aggregate average daily assets of the funds' Advisor Class shares, 0.25% of
which is paid for Shareholder Services (as described above) and 0.25% of which
is paid for distribution services.

Distribution services include any activity undertaken or expense incurred that
is primarily intended to result in the sale of Advisor Class shares, which
services may include but are not limited to, (a) the payment of sales
commissions, on going commissions and other payments to brokers, dealers,
financial institutions or others who sell Advisor Class shares pursuant to
Selling Agreements; (b) compensation to registered representatives or other
employees of Distributor who engage in or support distribution of the funds'
Advisor Class shares; (c) compensation to, and expenses (including overhead and
telephone expenses) of, Distributor; (d) the printing of prospectuses,
statements of additional information and reports for other than existing
shareholders; (e) the preparation, printing and distribution of sales literature
and advertising materials provided to the funds' shareholders and prospective
shareholders; (f) receiving and answering correspondence from prospective
shareholders, including distributing prospectuses, statements of additional
information, and shareholder reports; (g) the providing of facilities to answer
questions from prospective investors about fund shares; (h) complying with
federal and state securities laws pertaining to the sale of fund shares; (i)
assisting investors in completing application forms and selecting dividend and
other account options; (j) the providing of other reasonable assistance in
connection with the distribution of fund shares; (k) the organizing and
conducting of sales seminars and payments in the form of transactional and
compensation or promotional incentives; (l) profit on the foregoing; (m) the
payment of "service fees" for the provision of personal, continuing services to
investors, as contemplated by the Rules of Fair Practice of the NASD and (n)
such other distribution and services activities as the manager determines may be
paid for by the funds pursuant to the terms of this Agreement and in accordance
with Rule 12b-1 of the Investment Company Act.

BUYING AND SELLING FUND SHARES

Information about buying, selling and exchanging fund shares is contained in the
American Century Investor Services Guide. The guide is available to investors
without charge and may be obtained by calling us.

VALUATION OF A FUND'S SECURITIES

Each fund's share price, also referred to as its net asset value (NAV), is
calculated as of the close of business of the New York Stock Exchange (the
Exchange), usually at 3 p.m. Central time each day the Exchange is open for
business. The Exchange has designated the following holiday closings for 1999:
New Year's Day (observed), Martin Luther King Jr. Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day (observed). Although the funds expect the same holiday schedule to
be observed in the future, the Exchange may modify its holiday schedule at any
time.

The advisor typically completes its trading on behalf of each fund in various
markets before the Exchange closes for the day. Each fund's NAV is calculated by
adding the value of all portfolio securities and other assets, deducting
liabilities and dividing the result by the number of shares outstanding.
Expenses and interest earned on portfolio securities are accrued daily.

The portfolio securities of the fund, except as otherwise noted, listed or
traded on a domestic securities exchange are valued at the last sale price on
that exchange. Portfolio securities primarily traded on foreign securities
exchanges are generally valued at the preceding closing values of such
securities on the exchange where primarily traded. If no sale is reported, or if
local convention or regulation so provides, the mean of the latest bid and asked
prices is used. Depending on local convention or regulation, securities traded
over-the-counter are priced at the mean of the latest bid and asked prices, or
at the last sale price. When market quotations are not readily available,
securities and other assets are valued at fair value as determined in accordance
with procedures adopted by the Board of Directors.

Debt securities not traded on a principal securities exchange are valued through
valuations obtained from a commercial pricing service or at the most recent mean
of the bid and asked prices provided by investment dealers in accordance with
procedures established by the Board of Directors.

Because there are hundreds of thousands of municipal issues outstanding, and the
majority of them do not trade daily, the prices provided by pricing services for
these types of securities are generally determined without regard to bid or last
sale prices. In valuing securities, the pricing services generally take into
account institutional trading activity, trading in similar groups of securities,
and any developments related to specific securities. The methods used by the
pricing service and the valuations so established are reviewed by the advisor
under the general supervision of the Board of Directors. There are a number of
pricing services available, and the advisor, on the basis of ongoing evaluation
of these services, may use other pricing services or discontinue the use of any
pricing service in whole or in part.

Securities maturing within 60 days of the valuation date may be valued at cost,
plus or minus any amortized discount or premium, unless the trustees determine
that this would not result in fair valuation of a given security. Other assets
and securities for which quotations are not readily available are valued in good
faith at their fair value using methods approved by the Board of Directors.

The value of an exchange-traded foreign security is determined in its national
currency as of the close of trading on the foreign exchange on which it is
traded or as of the close of business on the New York Stock Exchange, if that is
earlier. That value is then exchanged to dollars at the prevailing foreign
exchange rate.

Trading in securities on European and Far Eastern securities exchanges and
over-the-counter markets is normally completed at various times before the close
of business on each day that the New York Stock Exchange is open. If an event
were to occur after the value of a security was established but before the net
asset value per share was determined that was likely to materially change the
net asset value, then that security would be valued at fair value as determined
in accordance with procedures adopted by the Board of Directors.

Trading of these securities in foreign markets may not take place on every New
York Stock Exchange business day. In addition, trading may take place in various
foreign markets on Saturdays or on other days when the New York Stock Exchange
is not open and on which the fund's net asset value is not calculated.
Therefore, such calculation does not take place contemporaneously with the
determination of the prices of many of the portfolio securities used in such
calculation and the value of the fund's portfolio may be affected on days when
shares of the fund may not be purchased or redeemed.

MULTIPLE CLASS PERFORMANCE ADVERTISING

Pursuant to the Multiple Class Plan, the funds may issue additional classes of
existing funds or introduce new funds with multiple classes available for
purchase. To the extent a new class is added to an existing fund, the manager
may, in compliance with SEC and NASD rules, regulations and guidelines, market
the new class of shares using the historical performance information of the
original class of shares. When quoting performance information for the new class
of shares for periods prior to the first full quarter after inception, the
original class' performance will be restated to reflect the expenses of the new
class and for periods after the first full quarter after inception, actual
performance of the new class will be used.

TAXES

*FEDERAL INCOME TAXES

Each fund intends to qualify annually as a "regulated investment company" under
Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"). By
so qualifying, a fund will be exempt from federal income taxes to the extent
that it distributes substantially all of its net investment income and net
realized capital gains (if any) to shareholders. If a fund fails to qualify as a
regulated investment company, it will be liable for taxes, significantly
reducing its distributions to shareholders and eliminating shareholders' ability
to treat distributions of the funds in the manner they were realized by the
funds.

If fund shares are purchased through taxable accounts, distributions of net
investment income and net short-term capital gains are taxable to you as
ordinary income. The dividends from net income may quality for the 70% dividends
received deduction for corporations to the extent that the fund held shares
receiving the dividend for more than 45 days. Distributions from gains on assets
held greater than 12 months but not more than 18 months (28% rate gain) and/or
assets held greater than 18 months (20% rate gain) are taxable as long-term
gains regardless of the length of time you have held the shares. However, you
should note that any loss realized upon the sale or redemption of shares held
for six months or less will be treated as a long-term capital loss to the extent
of any distributions of long-term capital gain (28% or 20% rate gain) to you
with respect to such shares.

Dividends and interest received by a fund on foreign securities may give rise to
withholding and other taxes imposed by foreign countries. Tax conventions
between certain countries and the United States may reduce or eliminate such
taxes. Foreign countries generally do not impose taxes on capital gains in
respect of investments by non-resident investors.
The foreign taxes paid by a fund will reduce its dividends.

If more than 50% of the value of a fund's total assets at the end of each
quarter of its fiscal year consists of securities of foreign corporations, the
fund may qualify for and make an election with the Internal Revenue Service with
respect to such fiscal year so that fund shareholders may be able to claim a
foreign tax credit in lieu of a deduction for foreign income taxes paid by the
fund. If such an election is made, the foreign taxes paid by the fund will be
treated as income received by you. In order for the shareholder to utilize the
foreign tax credit, the mutual fund shares must have been held for 16 days or
more during the 30-day period, beginning 15 days prior to the ex-dividend date
for the mutual fund shares. The mutual fund must meet a similar holding period
requirement with respect to foreign securities to which a dividend is
attributable. Any portion of the foreign tax credit which is ineligible as a
result of the fund not meeting the holding period requirement will be separately
disclosed and may be eligible as an itemized deduction.

If a fund purchases the securities of certain foreign investment funds or trusts
called passive foreign investment companies (PFIC), capital gains on the sale of
such holdings will be deemed to be ordinary income regardless of how long the
fund holds its investment. The fund may also be subject to corporate income tax
and an interest charge on certain dividends and capital gains earned from these
investments, regardless of whether such income and gains are distributed to
shareholders. In the alternative, the fund may elect to recognize cumulative
gains on such investments as of the last day of its fiscal year and distribute
it to shareholders. Any distribution attributable to a PFIC is characterized as
ordinary income.

Distributions are taxable to you regardless of whether they are taken in cash or
reinvested, even if the value of your shares is below your cost. If you purchase
shares shortly before a distribution, you must pay income taxes on the
distribution, even though the value of your investment (plus cash received, if
any) will not have increased. In addition, the share price at the time you
purchase shares may include unrealized gains in the securities held in the
investment portfolio of the fund. If these portfolio securities are subsequently
sold and the gains are realized, they will, to the extent not offset by capital
losses, be paid to you as a distribution of capital gains and will be taxable to
you as short-term or long-term capital gains (28% and/or 20% rate gain).

In January of the year following the distribution, if you own shares in a
taxable account, you will receive a Form 1099-DIV notifying you of the status of
your distributions for federal income tax purposes.

If you have not complied with certain provisions of the Internal Revenue Code
and Regulations, either we or your financial intermediary is required by federal
law to withhold and remit to the IRS 31% of reportable payments (which may
include dividends, capital gains distributions and redemptions). Those
regulations require you to certify that the Social Security number or tax
identification number you provide is correct and that you are not subject to 31%
withholding for previous under-reporting to the IRS. You will be asked to make
the appropriate certification on your application. Payments reported by us that
omit your Social Security number or tax identification number will subject us to
a penalty of $50, which will be charged against your account if you fail to
provide the certification by the time the report is filed, and is not
refundable.

Redemption of shares of a fund (including redemption made in an exchange
transaction) will be a taxable transaction for federal income tax purposes and
shareholders will generally recognize gain or loss in an amount equal to the
difference between the basis of the shares and the amount received. Assuming
that shareholders hold such shares as a capital asset, the gain or loss will be
a capital gain or loss and will generally be considered long term subject to tax
at a maximum rate of 28% (28% rate gain/loss) if shareholders have held such
shares for a period of more than 12 months but no more than 18 months and long
term subject to tax at a maximum rate of 20%, minimum of 10% (20% rate
gain/loss) if shareholders have held such shares for a period of more than 18
months. If a loss is realized on the redemption of fund shares, the reinvestment
in additional fund shares within 30 days before or after the redemption may be
subject to the "wash sale" rules of the Code, resulting in a postponement of the
recognition of such loss for federal income tax purposes.

*STATE AND LOCAL TAXES

Distributions may also be subject to state and local taxes, even if all or a
substantial part of such distributions are derived from interest on U.S.
government obligations which, if you received them directly, would be exempt
from state income tax. However, most but not all states allow this tax exemption
to pass through to fund shareholders when a fund pays distributions to its
shareholders. You should consult your tax advisor about the tax status of such
distributions in your own state.

HOW FUND PERFORMANCE INFORMATION IS CALCULATED

The funds may quote performance in various ways. Fund performance may be shown
by presenting one or more performance measurements, including cumulative total
return, average annual total return or yield.

All performance information advertised by the funds is historical in nature and
is not intended to represent or guarantee future results. The value of fund
shares when redeemed may be more or less than their original cost.

*EQUITY FUNDS

Total returns quoted in advertising and sales literature reflect all aspects of
a fund's return, including the effect of reinvesting dividends and capital gain
distributions (if any) and any change in the fund's NAV during the period.

Average annual total returns are calculated by determining the growth or decline
in value of a hypothetical historical investment in a fund during a stated
period and then calculating the annually compounded percentage rate that would
have produced the same result if the rate of growth or decline in value had been
constant throughout the period. For example, a cumulative total return of 100%
over 10 years would produce an average annual return of 7.18%, which is the
steady annual rate that would equal 100% growth on a compounded basis in 10
years. While average annual total returns are a convenient means of comparing
investment alternatives, investors should realize that the funds' performance is
not constant over time, but changes from year-to-year, and that average annual
total returns represent averaged figures as opposed to actual year-to-year
performance.

The following tables set forth the average annual total return for the various
classes of the equity funds and Balanced for the one-, five- and 10-year periods
(or the period since inception) ended October 31, 1998, the last day of the
funds' fiscal year.

<TABLE>
AVERAGE ANNUAL TOTAL RETURNS - INVESTOR CLASS
- ------------------------------------------------------ ---------------- ---------------- ---------------- ----------------
FROM INCEPTION
FUND 1 YEAR 5 YEARS 10 YEARS
- ------------------------------------------------------ ---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Growth1
Ultra2
Select3
Vista4
Heritage5
Balanced6
Giftrust7
New Opportunities8
- ------------------------------------------------------ ---------------- ---------------- ---------------- ----------------
(1) Commenced operations on October 31, 1958.
(2) Commenced operations on November 2, 1981.
(3) Commenced operations on October 31, 1958.
(4) Commenced operations on November 25, 1983.
(5) Commenced operations on November 10, 1987.
(6) Commenced operations on October 20, 1988.
(7) Commenced operations on November 25, 1983.
(8) Commenced operations on December 26, 1996.

AVERAGE ANNUAL TOTAL RETURNS - INSTITUTIONAL CLASS
- ------------------------------------------------------ ---------------- ---------------- ---------------- ----------------
FROM INCEPTION
FUND 1 YEAR 5 YEARS 10 YEARS
- ------------------------------------------------------ ---------------- ---------------- ---------------- ----------------
Growth1
Ultra2
Select3
Vista4
Heritage5
(1) Commenced operations on June 16, 1997.
(2) Commenced operations on November 14, 1996.
(3) Commenced operations on March 13, 1997.
(4) Commenced operations on November 14, 1996.
(5) Commenced operations on June 16, 1997.

AVERAGE ANNUAL TOTAL RETURNS - ADVISOR CLASS
- ------------------------------------------------------ ---------------- ---------------- ---------------- ----------------
FROM INCEPTION
FUND 1 YEAR 5 YEARS 10 YEARS
- ------------------------------------------------------ ---------------- ---------------- ---------------- ----------------
Growth1
Ultra2
Select3
Vista4
Heritage5
Balanced6
(1) Commenced operations on June 4, 1997.
(2) Commenced operations on October 1, 1996.
(3) Commenced operations on August 7, 1997.
(4) Commenced operations on October 1, 1996.
(5) Commenced operations on July 11, 1997.
(6) Commenced operations on January 6, 1997.
</TABLE>

In addition to average annual total returns, each fund may quote unaveraged or
cumulative total returns reflecting the simple change in value of an investment
over a stated period, including periods other than one, five and 10 years.
Average annual and cumulative total returns may be quoted as percentages or as
dollar amounts and may be calculated for a single investment, a series of
investments, or a series of redemptions over any time period. Total returns may
be broken down into their components of income and capital (including capital
gains and changes in share price) to illustrate the relationship of these
factors and their contributions to total return.

*FIXED INCOME FUNDS AND BALANCED

Yield is calculated by adding over a 30-day (or one-month) period all interest
and dividend income (net of fund expenses) calculated on each day's market
values, dividing this sum by the average number of fund shares outstanding
during the period, and expressing the result as a percentage of the fund's share
price on the last day of the 30-day (or one-month) period. The percentage is
then annualized. Capital gains and losses are not included in the calculation.

The following table sets forth yield quotations for the various classes of the
fixed income funds and Balanced for the 30-day period ended October 31, 1998,
the last day of the fiscal year pursuant to computation methods prescribed by
the SEC.

<TABLE>
- ---------------------------- --------------------------------------- ---------------------------------------
FUND INVESTOR CLASS ADVISOR CLASS
- ---------------------------- --------------------------------------- ---------------------------------------
- ---------------------------- --------------------------------------- ---------------------------------------
<S> <C> <C>
Limited-Term Bond
- ---------------------------- --------------------------------------- ---------------------------------------
- ---------------------------- --------------------------------------- ---------------------------------------
Intermediate-Term Bond
- ---------------------------- --------------------------------------- ---------------------------------------
- ---------------------------- --------------------------------------- ---------------------------------------
Bond
- ---------------------------- --------------------------------------- ---------------------------------------
- ---------------------------- --------------------------------------- ---------------------------------------
Balanced
- ---------------------------- --------------------------------------- ---------------------------------------
- ---------------------------- --------------------------------------- ---------------------------------------
High-Yield
- ---------------------------- --------------------------------------- ---------------------------------------

The fixed income funds may also elect to advertise cumulative total return and
average annual total return, computed as described above.

The following table shows the cumulative total return and the average annual
total return of the Investor Class of the fixed income funds since their
respective dates of inception (as noted) through October 31, 1998.

- ----------------------------------- ---------------------------- ----------------------------- --------------------------
FUND CUMULATIVE TOTAL RETURN AVERAGE ANNUAL TOTAL RETURN DATE OF INCEPTION
SINCE INCEPTION
- ----------------------------------- ---------------------------- ----------------------------- --------------------------
- ----------------------------------- ---------------------------- ----------------------------- --------------------------
Limited-Term Bond
- ----------------------------------- ---------------------------- ----------------------------- --------------------------
- ----------------------------------- ---------------------------- ----------------------------- --------------------------
Intermediate-Term Bond
- ----------------------------------- ---------------------------- ----------------------------- --------------------------
- ----------------------------------- ---------------------------- ----------------------------- --------------------------
Bond
- ----------------------------------- ---------------------------- ----------------------------- --------------------------
- ----------------------------------- ---------------------------- ----------------------------- --------------------------
Balanced
- ----------------------------------- ---------------------------- ----------------------------- --------------------------
- ----------------------------------- ---------------------------- ----------------------------- --------------------------
High-Yield
- ----------------------------------- ---------------------------- ----------------------------- --------------------------
</TABLE>

*ADDITIONAL PERFORMANCE COMPARISONS

The funds' performance may be compared with the performance of other mutual
funds tracked by mutual fund rating services or with other indexes of market
performance. This may include comparisons with funds that, unlike the American
Century funds, are sold with a sales charge or deferred sales charge. Sources of
economic data that may be used for such comparisons may include, but are not
limited to, U.S. Treasury bill, note and bond yields, money market fund yields,
U.S. government debt and percentage held by foreigners, the U.S. money supply,
net free reserves, and yields on current-coupon GNMAs (source: Board of
Governors of the Federal Reserve System); the federal funds and discount rates
(source: Federal Reserve Bank of New York); yield curves for U.S. Treasury
securities and AA/AAA-rated corporate securities (source: Bloomberg Financial
Markets); yield curves for AAA-rated tax-free municipal securities (source:
Telerate); yield curves for foreign government securities (sources: Bloomberg
Financial Markets and Data Resources, Inc.); total returns on foreign bonds
(source: J.P. Morgan Securities Inc.); various U.S. and foreign government
reports; the junk bond market (source: Data Resources, Inc.); the CRB Futures
Index (source: Commodity Index Report); the price of gold (sources: London
a.m./p.m. fixing and New York Comex Spot Price); rankings of any mutual fund or
mutual fund category tracked by Lipper Analytical Services, Inc. or Morningstar,
Inc.; mutual fund rankings published in major, nationally distributed
periodicals; data provided by the Investment Company Institute; Ibbotson
Associates, Stocks, Bonds, Bills, and Inflation; major indexes of stock market
performance; and indexes and historical data supplied by major securities
brokerage or investment advisory firms. The funds also may utilize reprints from
newspapers and magazines furnished by third parties to illustrate historical
performance or to provide general information about the funds.

*PERMISSIBLE ADVERTISING INFORMATION

From time to time, the funds may, in addition to any other permissible
information, include the following types of information in advertisements,
supplemental sales literature and reports to shareholders: (1) discussions of
general economic or financial principles (such as the effects of compounding and
the benefits of dollar-cost averaging); (2) discussions of general economic
trends; (3) presentations of statistical data to supplement such discussions;
(4) descriptions of past or anticipated portfolio holdings for one or more of
the funds; (5) descriptions of investment strategies for one or more of the
funds; (6) descriptions or comparisons of various savings and investment
products (including, but not limited to, qualified retirement plans and
individual stocks and bonds), which may or may not include the funds; (7)
comparisons of investment products (including the funds) with relevant market or
industry indices or other appropriate benchmarks; (8) discussions of fund
rankings or ratings by recognized rating organizations; and (9) testimonials
describing the experience of persons that have invested in one or more of the
funds. The funds may also include calculations, such as hypothetical compounding
examples, which describe hypothetical investment results in such communications.
Such performance examples will be based on an express set of assumptions and are
not indicative of the performance of any of the funds.

*MULTIPLE CLASS PERFORMANCE ADVERTISING

FINANCIAL STATEMENTS

The financial statements of the funds (other than Tax-Managed Value), including
the Statements of Assets and Liabilities and the Statements of Operations for
the fiscal year ended October 31, 1998, and the Statements of Changes in Net
Assets for the fiscal years ended October 31, 1997 and 1998, are included in the
Annual Reports to shareholders for the fiscal year ended August 31, 1998. The
report on the financial highlights for the fiscal years 1994, 1995, 1996 and
1997 are included in the Annual Reports to shareholders for the fiscal year
ended August 31, 1997, Each such Annual Report is incorporated herein by
reference. You may receive copies of the reports without charge upon request to
American Century at the address and phone number shown on the back cover of this
Statement of Additional Information.

EXPLANATION OF FIXED INCOME SECURITIES RATINGS

As described in the Prospectus, the funds may invest in fixed income securities.
Those investments, however, are subject to certain credit quality restrictions,
as noted in the Prospectus. The following is a summary of the rating categories
referenced in the prospectus disclosure.

<TABLE>
BOND RATINGS
- ------------- ------------- ---------------------------------------------------------------------------------------------
S&P MOODY'S DESCRIPTION
- ------------- ------------- ---------------------------------------------------------------------------------------------
<S> <C> <C>
AAA Aaa These are the highest ratings assigned by S&P
and Moody's to a debt obligation and indicates an
extremely strong capacity to pay interest and repay
principal.
AA Aa Debt rated in this category is considered to have
a very strong capacity to pay interest and repay
principal and differs from AAA/Aaa issues only in a
small degree.
A A Debt rated A has a strong capacity to pay interest
and repay principal although it is somewhat more
susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in
higher-rated categories.
BBB Baa Debt rated BBB/Baa is regarded as having an
adequate capacity to pay interest and repay
principal. Whereas it normally exhibits adequate
protection parameters, adverse economic conditions
or changing circumstances are more likely to lead to
a weakened capacity to pay interest and repay
principal for debt in this category than in
higher-rated categories.
BB Ba Debt rated BB/Ba has less near-term vulnerability to
default than other speculative issues.
However, it faces major ongoing uncertainties or
exposure to adverse business, financial or
economic conditions that could lead to inadequate
capacity to meet timely interest and
principal payments. The BB rating category also
is used for debt subordinated to senior
debt that is assigned an actual or implied BBB- rating.
B B Debt rated B has a greater vulnerability to default
but currently has the capacity to meet
interest payments and principal repayments.
Adverse business, financial or economic
conditions will likely impair capacity or
willingness to pay interest and repay principal.
The B rating category is also used for debt
subordinated to senior debt that is assigned an
actual or implied BB/Ba or BB-/Ba3 rating.
CCC Caa Debt rated CCC/Caa has a currently identifiable
vulnerability to default and is dependent
upon favorable business, financial and
economic conditions to meet timely payment of
interest and repayment of principal. In the
event of adverse business, financial or
economic conditions, it is not likely to have
the capacity to pay interest and repay
principal. The CCC/Caa rating category is
also used for debt subordinated to senior debt
that is assigned an actual or implied B or B-/B3 rating.
CC Ca The rating CC/Ca typically is applied to debt
subordinated to senior debt that is assigned
an actual or implied CCC/Caa rating.
C C The rating C typically is applied to debt
subordinated to senior debt, which is assigned an
actual or implied CCC-/Caa3 debt rating. The C
rating may be used to cover a situation where a
bankruptcy petition has been filed, but debt service
payments are continued.
CI - The rating CI is reserved for income bonds on which
no interest is being paid.
D D Debt rated D is in payment default. The D rating
category is used when interest payments or
principal payments are not made on the date due
even if the applicable grace period
has not expired, unless S&P believes
that such payments will be made during such grace
period. The D rating also will be used upon the
filing of a bankruptcy petition if debt service
payments are jeopardized.
- ------------- ------------- ---------------------------------------------------------------------------------------------

To provide more detailed indications of credit quality, the Standard & Poor's
ratings from AA to CCC may be modified by the addition of a plus or minus sign
to show relative standing within these major rating categories. Similarly,
Moody's adds numerical modifiers (1,2,3) to designate relative standing within
its major bond rating categories. Fitch Investors Service, Inc. also rates bonds
and uses a ratings system that is substantially similar to that used by Standard
& Poor's.

Commercial Paper Ratings
- ------------- --------------- -------------------------------------------------------------------------------------------
S&P MOODY'S DESCRIPTION
- ------------- --------------- -------------------------------------------------------------------------------------------
A-1 Prime-1 This indicates that the degree of safety regarding timely payment is strong. Standard &
(P-1) Poor's rates those issues determined to possess extremely strong safety characteristics
as A-1+.
A-2 Prime-2 Capacity for timely payment on commercial paper is satisfactory, but the relative degree
(P-2) of safety is not as high as for issues designated A-1. Earnings trends and coverage
ratios, while sound, will be more subject to variation. Capitalization characteristics, while
still appropriated, may be more affected by external conditions. Ample alternate liquidity is
maintained.
A-3 Prime-3 Satisfactory capacity for timely repayment. Issues that carry this rating are somewhat
(P-3) more vulnerable to the adverse changes in circumstances than obligations carrying the
higher designations.
- ------------- --------------- -------------------------------------------------------------------------------------------

Note Ratings
- ------------- --------------- -------------------------------------------------------------------------------------------
S&P MOODY'S DESCRIPTION
- ------------- --------------- -------------------------------------------------------------------------------------------
SP-1 MIG-1; VMIG-1 Notes are of the highest quality enjoying strong protection from established cash
flows of funds for their servicing or from established and broad-based access to the market
for refinancing, or both.
SP-2 MIG-2; VMIG-2 Notes are of high quality, with margins of protection ample, although not so large as in
the preceding group.
SP-3 MIG-3; VMIG-3 Notes are of favorable quality, with all security elements accounted for, but lacking
the undeniable strength of the preceding grades. Market access for refinancing, in particular, is
likely to be less well established.
SP-4 MIG-4; VMIG-4 Notes are of adequate quality, carrying specific risk but having protection and
not distinctly or predominantly speculative.
- ------------- --------------- -------------------------------------------------------------------------------------------
</TABLE>

More information about the funds is contained in the funds' annual and
semiannual reports. These contain more information about the funds' investments
and the market conditions and investment strategies that significantly affected
the funds' performance during the most recent six-month fiscal period. The
annual and semiannual reports are incorporated by reference into this SAI. This
means that it is legally part of this SAI.

* You can get the annual and semiannual reports for free and ask any questions
about the funds by contacting us at one of the addresses or phone numbers listed
below.

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, Keogh, SEP-, SARSEP-, SIMPLE -IRA and 403(b) Services
1-800-345-3533

Telecommunications Device for Deaf
1-800-634-4113 or 816-444-3485

Fax
816-340-7962

* If you own or are considering purchasing fund shares through

* an employer-sponsored retirement plan
* a bank
* a broker-dealer
* an insurance company
* another financial intermediary you can get the annual and semiannual
reports directly from them.

* You can also get information about the funds from the SEC.

* In person. Go to the SEC's Public Reference Room in Washington, D.C. Call
1-800-SEC-0330 for information about location and hours of operation.

* On the internet. Go to www.sec.gov.

* By mail. Write to Public Reference Section of the Securities and Exchange
Commission, Washington, D.C. 20549-6009. The SEC will charge a fee for
copying the documents you request.

Investment Company Act File No. 811-0816
<PAGE>
PART C. OTHER INFORMATION.

ITEM 23. Exhibits (all exhibits not filed herewith are being incorporated
herein by reference)

(a) (1) Articles of Incorporation of Twentieth Century Investors, Inc.,
dated July 2, 1990 (filed electronically as an Exhibit to
Post-Effective Amendment No. 73 on Form N-1A on February 29,
1996).

(2) Articles of Amendment of Twentieth Century Investors, Inc., dated
November 20, 1990 (filed electronically as an Exhibit to
Post-Effective Amendment No. 73 on Form N-1A on February 29,
1996).

(3) Articles of Merger of Twentieth Century Investors, Inc., a
Maryland corporation and Twentieth Century Investors, Inc., a
Delaware corporation, dated February 22, 1991 (filed
electronically as an Exhibit to Post-Effective Amendment No. 73
on Form N-1A on February 29, 1996).

(4) Articles of Amendment of Twentieth Century Investors, Inc., dated
August 11, 1993 (filed electronically as an Exhibit to
Post-Effective Amendment No. 73 on Form N-1A on February 29,
1996).

(5) Articles Supplementary of Twentieth Century Investors, Inc.,
dated September 3, 1993 (filed electronically as an Exhibit to
Post-Effective Amendment No. 73 on Form N-1A on February 29,
1996).

(6) Articles Supplementary of Twentieth Century Investors, Inc.,
dated April 28, 1995 (filed electronically as an Exhibit to
Post-Effective Amendment No. 73 on Form N-1A on February 29,
1996).

(7) Articles Supplementary of Twentieth Century Investors, Inc.,
dated November 17, 1995 (filed electronically as an Exhibit to
Post-Effective Amendment No. 73 on Form N-1A on February 29,
1996).

(8) Articles Supplementary of Twentieth Century Investors, Inc.,
dated January 30, 1996 (filed electronically as an Exhibit to
Post-Effective Amendment No. 73 on Form N-1A on February 29,
1996).

(9) Articles Supplementary of Twentieth Century Investors, Inc.,
dated March 11, 1996 (filed electronically as an Exhibit to
Post-Effective Amendment No. 75 on Form N-1A on June 14, 1996).

(10) Articles of Amendment of Twentieth Century Investors, Inc., dated
December 2, 1996 (filed electronically as an Exhibit to
Post-Effective Amendment No. 76 on Form N-1A on February 28,
1997).

(11) Articles Supplementary of American Century Mutual Funds, Inc.,
dated December 2, 1996 (filed electronically as an Exhibit to
Post-Effective Amendment No. 76 on Form N-1A on February 28,
1997).

(12) Articles Supplementary of American Century Mutual Funds, Inc.,
dated July 28, 1997 (filed electronically as an Exhibit to
Post-Effective Amendment No. 78 on Form N-1A on February 26,
1998).

(13) Articles Supplementary of American Century Mutual Funds, Inc.,
dated December 18, 1997 (filed electronically as an Exhibit to
Post-Effective Amendment No. 78 on Form N-1A on February 26,
1998).

(b) (1) By-laws of Twentieth Century Investors, Inc. (filed
electronically as an Exhibit to Post-Effective Amendment No. 73
on Form N-1A on February 29, 1996).

(2) Amendment to Bylaws of American Century Mutual Funds, Inc. (filed
electronically as an Exhibit to Post-Effective Amendment No. 9 on
Form N-1A of American Century Capital Portfolios, Inc., File No.
33-64872, on February 17, 1998).

(d) Management Agreement between American Century Mutual Funds, Inc. and
American Century Investment Management, Inc. dated August 1, 1997
(filed electronically as an Exhibit to Post-Effective Amendment No. 78
on Form N-1A on February 26, 1998).

(e) (1) Distribution Agreement between American Century Mutual Funds,
Inc. and Funds Distributor, Inc. dated January 15, 1998 (filed
electronically as an Exhibit to Post-Effectivement Amendment No.
28 on Form N-1A of American Century Target Maturities Trust,
File No. 2-94608, on January 30, 1998).

(2) Amendment No. 1 to the Distribution Agreement between American
Century Mutual Funds, Inc. and Funds Distributor, Inc. dated June
1, 1998 (filed electronically as an Exhibit to Post-Effective
Amendment No. 11 to the Registration Statement of American
Century Capital Portfolios, Inc., File No. 33-64872, on June 26,
1998).

(3) Amendment No. 2 to the Distribution Agreement between American
Century Mutual Funds, Inc. and Funds Distributor, Inc. dated
December 1, 1998 (filed electronically as an Exhibit to
Post-Effective Amendment No. 12 to the Registration Statement of
American Century World Mutual Funds, Inc., File No. 33-39242, on
November 13, 1998).

(4) Amendment No. 3 to the Distribution Agreement between American
Century Mutual Funds, Inc. and Funds Distributor, Inc. dated
January 29, 1999 (filed electronically as an Exhibit to
Post-Effective Amendment No. 13 to the Registration Statement of
American Century Capital Portfolios, Inc., File No. 33-64872, on
November 25, 1998).

(f) Not Applicable.

(g) (1) Global Custody Agreement between The Chase Manhattan Bank and the
Twentieth Century and Benham funds, dated August 9, 1996 (filed
electronically as an Exhibit to Post-Effective Amendment No. 31
on Form N-1A of American Century Government Income Trust, File
No. 2-99222, on February 7, 1997).

(2) Master Agreement between Commerce Bank, N.A. and Twentieth
Century Services, Inc. dated January 22, 1997 (filed
electronically as an Exhibit to Post-Effective Amendment No. 76
on Form N-1A on February 28, 1997).

(h) Transfer Agency Agreement between Twentieth Century Investors, Inc.
and Twentieth Century Services, Inc. dated March 1, 1991 (filed
electronically as an Exhibit to Post-Effective Amendment No. 76 on
Form N-1A on February 28, 1997).

(i) Opinion and Consent of Counsel is included herein.

(j) (1) Consent of Deloitte & Touche LLP to be filed by amendment.

(2) Consent of Baird, Kurtz & Dobson to be filed by amendment.

(3) Power of Attorney is included herein.

(k) Not applicable.

(l) Not applicable.

(m) (1) Master Distribution and Shareholder Services Plan of Twentieth
Century Capital Portfolios, Inc., Twentieth Century Investors,
Inc., Twentieth Century Strategic Asset Allocations, Inc. and
Twentieth Century World Investors, Inc. (Advisor Class) dated
September 3, 1996 (filed electronically as an Exhibit to
Post-Effective Amendment No. 9 on Form N-1A of American Century
Capital Portfolios, Inc., File No. 33-64872, on February 17,
1998).

(2) Amendment No. 1 to Master Distribution and Shareholder Services
Plan of American Century Capital Portfolios, Inc., American
Century Mutual Funds, Inc., American Century Strategic Asset
Allocations, Inc. and American Century World Mutual Funds,
Inc.(Advisor Class) dated June 13, 1997 (filed electronically as
an exhibit to Post-Effective Amendment No. 77 on Form N-1A on
July 17, 1997).

(3) Amendment No. 2 to Master Distribution and Shareholder Services
Plan of American Century Capital Portfolios, Inc., American
Century Mutual Funds, Inc., American Century Strategic Asset
Allocations, Inc. and American Century World Mutual Funds, Inc.
(Advisor Class) dated September 30, 1997 (filed electronically as
an Exhibit to Post-Effective Amendment No. 78 on Form N-1A on
February 26, 1998).

(4) Amendment No. 3 to Master Distribution and Shareholder Services
Plan of American Century Capital Portfolios, Inc., American
Century Mutual Funds, Inc., American Century Strategic Asset
Allocations, Inc. and American Century World Mutual Funds, Inc.
(Advisor Class) dated June 30, 1998 (filed electronically as an
Exhibit to Post-Effective Amendment No. 11 on Form N-1A of
American Century Capital Portfolios, Inc., File No. 33-64872, on
June 26, 1998).

(5) Amendment No. 4 to Master Distribution and Shareholder Services
Plan of American Century Capital Portfolios, Inc., American
Century Mutual Funds, Inc., American Century Strategic Asset
Allocations, Inc. and American Century World Mutual Funds, Inc.
(Advisor Class) dated November 13, 1998 (filed electronically as
an Exhibit to Post-Effective Amendment No. 12 on Form N-1A of
American Century World Mutual Funds, Inc., File No. 33-39242, on
November 13, 1998).

(6) Shareholder Services Plan of Twentieth Century Capital
Portfolios, Inc., Twentieth Century Investors, Inc., Twentieth
Century Strategic Asset Allocations, Inc. and Twentieth Century
World Investors, Inc. (Service Class) dated September 3, 1996
(filed electronically as an Exhibit to Post-Effective Amendment
No. 9 on Form N-1A of American Century Capital Portfolios, Inc.,
File No. 33-64872, on February 17, 1998).

(n) (1) Financial Data Schedule for Growth Fund is included herein.

(2) Financial Data Schedule for Select Fund is included herein.

(3) Financial Data Schedule for Ultra Fund is included herein.

(4) Financial Data Schedule for Vista Fund is included herein.

(5) Financial Data Schedule for Giftrust is included herein.

(6) Financial Data Schedule for Benham Bond Fund is included herein.

(7) Financial Data Schedule for Heritage Fund is included herein.

(8) Financial Data Schedule for Balanced Fund is included herein.

(9) Financial Data Schedule for Limited-Term Bond Fund is included
herein.

(10) Financial Data Schedule for Intermediate-Term Bond Fund is
included herein.

(l1) Financial Data Schedule for New Opportunities Fund is included
herein.

(12) Financial Data Schedule For Benham High-Yield Fund is included
herein.

(o) (1) Multiple Class Plan of Twentieth Century Capital Portfolios,
Inc., Twentieth Century Investors, Inc., Twentieth Century
Strategic Asset Allocations, Inc. and Twentieth Century World
Investors, Inc. dated September 3, 1996 (filed electronically as
an Exhibit to Post-Effective Amendment 9 on Form N-1A of American
Century Capital Portfolios, Inc., File No. 33-64872, on February
17, 1998).

(2) Amendment No. 1 to Multiple Class Plan of American Century
Capital Portfolios, Inc., American Century Mutual Funds, Inc.,
American Century Strategic Asset Allocations, Inc. and American
Century World Mutual Funds, Inc. dated June 13, 1997 (filed
electronically as an Exhibit to Post-Effective Amendment No. 77
on Form N-1A on July 17, 1997).

(3) Amendment No. 2 to Multiple Class Plan of American Century
Capital Portfolios, Inc., American Century Mutual Funds, Inc.,
American Century Strategic Asset Allocations, Inc. and American
Century World Mutual Funds, Inc. dated September 30, 1997 (filed
electronically as an Exhibit to Post-Effective Amendment No. 78
on Form N-1A on February 26, 1998).

(4) Amendment No. 3 to Multiple Class Plan of American Century
Capital Portfolios, Inc., American Century Mutual Funds, Inc.,
American Century Strategic Asset Allocations, Inc. and American
Century World Mutual Funds, Inc. dated June 30, 1998 (filed
electronically as an Exhibit to Post-Effective Amendment No. 11
on Form N-1A of American Century Capital Portfolios, Inc., File
No. 33-64872, on June 26, 1998).

(5) Amendment No. 4 to Multiple Class Plan of American Century
Capital Portfolios, Inc., American Century Mutual Funds, Inc.,
American Century Strategic Asset Allocations, Inc. and American
Century World Mutual Funds, Inc. dated November 13, 1998 (filed
electronically as an Exhibit to Post-Effective Amendment No. 12
on Form N-1A of American Century World Mutual Funds, Inc., File
No. 33-39242, on November 13, 1998).

(6) Amendment No. 5 to Multiple Class Plan of American Century
Capital Portfolios, Inc., American Century Mutual Funds, Inc.,
American Century Strategic Asset Allocations, Inc. and American
Century World Mutual Funds, Inc. dated January 29, 1999 (filed
electronically as an Exhibit to Post-Effective Amendment No. 13
on Form N-1A of American Century Capital Portfolios, Inc., File
No. 33-64872, on November 25, 1998).

ITEM 24. Persons Controlled by or Under Common Control with Registrant.

Not Applicable.

ITEM 25. Indemnification.

The Corporation is a Maryland corporation. Section 2-418 of the General
Corporation Law of Maryland allows a Maryland corporation to indemnify its
directors, officers, employees and agents to the extent provided in such
statute.

Article Eighth of the Articles of Incorporation requires the
indemnification of the corporation's directors and officers to the extent
permitted by the General Corporation Law of Maryland, the Investment
Company Act and all other applicable laws.

The registrant has purchased an insurance policy insuring its officers and
directors against certain liabilities which such officers and directors may
incur while acting in such capacities and providing reimbursement to the
registrant for sums which it may be permitted or required to pay to its
officers and directors by way of indemnification against such liabilities,
subject in either case to clauses respecting deductibility and
participation.

ITEM 26. Business and Other Connections of Investment Advisor.

American Century Investment Management, Inc., the investment advisor, is
engaged in the business of managing investments for registered investment
companies, deferred compensation plans and other institutional investors.

ITEM 27. Principal Underwriters.

(a) Funds Distributor, Inc. (the "Distributor") acts as principal underwriter
for the following investment companies.

American Century California Tax-Free and Municipal Funds
American Century Capital Portfolios, Inc.
American Century Government Income Trust
American Century International Bond Funds
American Century Investment Trust
American Century Municipal Trust
American Century Mutual Funds, Inc.
American Century Premium Reserves, Inc.
American Century Quantitative Equity Funds
American Century Strategic Asset Allocations, Inc.
American Century Target Maturities Trust
American Century Variable Portfolios, Inc.
American Century World Mutual Funds, Inc.
BJB Investment Funds
The Brinson Funds
Dresdner RCM Capital Funds, Inc.
Dresdner RCM Equity Funds, Inc.
Founders Funds, Inc.
Harris Insight Funds Trust
HT Insight Funds, Inc. d/b/a Harris Insight Funds
J.P. Morgan Institutional Funds
J.P. Morgan Funds
JPM Series Trust
JPM Series Trust II
LaSalle Partners Funds, Inc.
Kobrick-Cendant Investment Trust
Merrimac Series
Monetta Fund, Inc.
Monetta Trust
The Montgomery Funds I
The Montgomery Funds II
The Munder Framlington Funds Trust
The Munder Funds Trust
The Munder Funds, Inc.
National Investors Cash Management Fund, Inc.
Orbitex Group of Funds
SG Cowen Funds, Inc.
SG Cowen Income + Growth Fund, Inc.
SG Cowen Standby Reserve Fund, Inc.
SG Cowen Standby Tax-Exempt Reserve Fund, Inc.
SG Cowen Series Funds, Inc.
St. Clair Funds, Inc.
The Skyline Funds
Waterhouse Investors Family of Funds, Inc.
WEBS Index Fund, Inc.

The Distributor is registered with the Securities and Exchange Commission
as a broker-dealer and is a member of the National Association of Securities
Dealers. The Distributor is located at 60 State Street, Suite 1300, Boston,
Massachusetts 02109. The Distributor is an indirect wholly-owned subsidiary of
Boston Institutional Group, Inc., a holding company all of whose outstanding
shares are owned by key employees.

(b) The following is a list of the executive officers, directors and partners of
the Distributor:

<TABLE>
<CAPTION>
Name and Principal Business Address* Positions and Offices with Positions and Offices with
Underwriter Registrant

<S> <C> <C>
Marie E. Connolly Director, President and Chief none
Executive Officer

George A. Rio Executive Vice President President, Principal Executive
and Principal Financial Officer

Donald R. Roberson Executive Vice President none

William S. Nichols Executive Vice President none

Margaret W. Chambers Senior Vice President, General None
Counsel, Chief Compliance
Officer, Secretary and Clerk
Michael S. Petrucelli Senior Vice President None

Joseph F. Tower, III Director, Senior Vice President, None
Treasurer and Chief Financial
Officer

Paula R. David Senior Vice President None

Allen B. Closser Senior Vice President None

Bernard A. Whalen Senior Vice President None

William J. Nutt Chairman and Director None
- --------------------
* All addresses are 60 State Street, Suite 1300, Boston, Massachusetts 02109
</TABLE>

ITEM 28. Location of Accounts and Records.

All accounts, books and other documents required to be maintained by
Section 31(a) of the 1940 Act, and the rules promulgated thereunder, are in
the possession of American Century Mutual Funds, Inc., American Century
Services Corporation and American Century Investment Management, Inc., all
located at American Century Tower, 4500 Main Street, Kansas City, Missouri
64111.

ITEM 29. Management Services

Not Applicable.

ITEM 30. Undertakings.

Not Applicable.
<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it has duly caused
this Post-Effective Amendment No. 79 to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Kansas City, State of
Missouri on the 30th day of November, 1998.

American Century Mutual Funds, Inc.
(Registrant)

By: /s/Charles A. Etherington
Charles A. Etherington, Vice President

Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 79 has been signed below by the following persons
in the capacities and on the dates indicated.

Signature Title Date

*George A. Rio President, Principal Executive November 30, 1998
George A. Rio and Principal Financial Officer

*Maryanne Roepke Vice President and Treasurer November 30, 1998
Maryanne Roepke

*James E. Stowers, Jr. Chairman of the Board and November 30, 1998
James E. Stowers, Jr. Director

*James E. Stowers III Director November 30, 1998
James E. Stowers III

*Thomas A. Brown Director November 30, 1998
Thomas A. Brown

*Robert W. Doering, M.D. Director November 30, 1998
Robert W. Doering, M.D.

*Andrea C. Hall, Ph.D. Director November 30, 1998
Andrea C. Hall, Ph.D.

*Donald H. Pratt Director November 30, 1998
Donald H. Pratt

*Lloyd T. Silver, Jr. Director November 30, 1998
Lloyd T. Silver, Jr.

*M. Jeannine Strandjord Director November 30, 1998
M. Jeannine Strandjord

*D. D. (Del) Hock Director November 30, 1998
D. D. (Del) Hock

*By /s/Charles A. Etherington
Charles A. Etherington
Attorney-in-Fact

EXHIBIT INDEX

EXHIBIT DESCRIPTION OF DOCUMENT
NUMBER

EX-99.a1 Articles of Incorporation of Twentieth Century Investors, Inc.,
dated July 2, 1990 (filed as a part of Post-Effective Amendment No.
73 to the Registration Statement on Form N-1A of the Registrant,
File No. 2-14213, filed on February 29, 1996, and incorporated
herein by reference).

EX-99.a2 Articles of Amendment of Twentieth Century Investors, Inc., dated
November 20, 1990 (filed as a part of Post-Effective Amendment No.
73 to the Registration Statement on Form N-1A of the Registrant,
File No. 2-14213, filed on February 29, 1996, and incorporated
herein by reference).

EX-99.a3 Articles of Merger of Twentieth Century Investors, Inc., a Maryland
corporation and Twentieth Century Investors, Inc., a Delaware
corporation, dated February 22, 1991 (filed as a part of
Post-Effective Amendment No. 73 to the Registration Statement on
Form N-1A of the Registrant, File No. 2-14213, filed on February
29, 1996, and incorporated herein by reference).

EX-99.a4 Articles of Amendment of Twentieth Century Investors, Inc., dated
August 11, 1993 (filed as a part of Post-Effective Amendment No. 73
to the Registration Statement on Form N-1A of the Registrant, File
No. 2-14213, filed on February 29, 1996, and incorporated herein by
reference).

EX-99.a5 Articles Supplementary of Twentieth Century Investors, Inc., dated
September 3, 1993 (filed as a part of Post-Effective Amendment No.
73 to the Registration Statement on Form N-1A of the Registrant,
File No. 2-14213, filed on February 29, 1996, and incorporated
herein by reference).

EX-99.a6 Articles Supplementary of Twentieth Century Investors, Inc., dated
April 28, 1995 (filed as a part of Post-Effective Amendment No. 73
to the Registration Statement on Form N-1A of the Registrant, File
No. 2-14213, filed on February 29, 1996, and incorporated herein by
reference).

EX-99.a7 Articles Supplementary of Twentieth Century Investors, dated
November 17, 1995 (filed as a part of Post-Effective Amendment No.
73 to the Registration Statement on Form N-1A of the Registrant,
File No. 2-14213, filed on February 29, 1996, and incorporated
herein by reference).

EX-99.a8 Articles Supplementary of Twentieth Century Investors, Inc., dated
January 30, 1996 (filed as a part of Post-Effective Amendment No.
73 to the Registration Statement on Form N-1A of the Registrant,
File No. 2-14213, filed on February 29, 1996, and incorporated
herein by reference).

EX-99.a9 Articles Supplementary of Twentieth Century Investors, Inc., dated
March 11, 1996 (filed as a part of Post-Effective Amendment No. 75
to the Registration Statement on Form N-1A of the Registrant, File
No. 2-14213, filed on June 14, 1996, and incorporated herein by
reference).

EX-99.a10 Articles of Amendment of Twentieth Century Investors, Inc. dated
December 2, 1996 (filed as a part of Post-Effective Amendment No.
76 to the Registration Statement on Form N-1A of the Registrant,
File No. 2-14213, filed on February 28, 1997, and incorporated
herein by reference).

EX-99.a11 Articles Supplementary of American Century Mutual Funds, Inc. dated
December 2, 1996 (filed as a part of Post-Effective Amendment No.
76 to the Registration Statement on Form N-1A of the Registrant,
File No. 2-14213, filed on February 28, 1997, and incorporated
herein by reference).

EX-99.a12 Articles Supplementary of American Century Mutual Funds, Inc. dated
July 28, 1997 (filed as a part of Post-Effective Amendment No. 78
to the Registration Statement on Form N-1A of the Registrant, File
No. 2-14213, filed on February 26, 1998, and incorporated herein by
reference).

EX-99.a13 Articles Supplementary of American Century Mutual Funds, Ind. dated
December 18, 1997 (filed as a part of Post-Effective Amendment No.
78 to the Registration Statement on Form N-1A of the Registrant,
File No. 2-14213, (filed on February 26, 1998, and incorporated
herein by reference).

EX-99.b1 Bylaws of Twentieth Century Investors, Inc. (filed as a part of
Post-Effective Amendment No. 73 to the Registration Statement on
Form N-1A of the Registrant, File No. 2-14213, filed on February
29, 1996, and incorporated herein by reference).

EX-99.b2 Amendment of Bylaws of American Century Mutual Funds, Inc. (filed
as a part of Post-Effective Amendment No. 9 to the Registration
Statement on Form N-1A of American Century Capital Portfolios,
Inc., File No. 33-64872, filed on February 17, 1998, and
incorporated herein by reference).

EX-99.d Management Agreement between American Century Mutual Funds, Inc.
and American Century Investment Management, Inc. dated August 1,
1997 (filed as a part of Post-Effective Amendment No. 78 to the
Registration Statement on Form N-1A of the Registrant, File No.
2-14213, filed on February 26, 1998, and incorporated herein by
reference).

EX-99.e1 Distribution Agreement between American Century Mutual Funds, Inc.
and Funds Distributor, dated January 15, 1998 (filed as a part of
Post-Effective Amendment No. 30 to the Registration Statement on
Form N-1A of American Century Target Maturities Trust, File No.
2-94608, filed on January 30, 1998, and incorporated herein by
reference).

EX-99.e2 Amendment No. 1 to the Distribution Agreement between American
Century Mutual Funds, Inc. and Funds Distributor, dated June 1,
1998 (filed as a part of Post-Effective Amendment No. 11 to the
Registration Statement on Form N-1A of American Century Capital
Portfolios, Inc., File No. 33-64872, filed on June 26, 1998, and
incorporated herein by reference).

EX-99.e3 Amendment No. 2 to the Distribution Agreement between American
Century Mutual Funds, Inc. and Funds Distributor, dated December 1,
1998 (filed as a part of Post-Effective Amendment No. 12 to the
Registration Statement on Form N-1A of American Century World
Mutual Funds, Inc., File No. 33-39242, filed on November 13, 1998,
and incorporated herein by reference).

EX-99.e4 Amendment No. 3 to the Distribution Agreement between American
Century Mutual Funds, Inc. and Funds Distributor, dated January 29,
1999 (filed as a part of Post-Effective Amendment No. 13 to the
Registration Statement on Form N-1A of American Century Capital
Portfolios, Inc., File No. 33-64872, filed on November 25, 1998,
and incorporated herein by reference).

EX-99.g1 Global Custody Agreement between The Chase Manhattan Bank and the
Twentieth Century and Benham funds, dated August 9, 1996 (filed as
a part of Post-Effective Amendment No. 31 to the Registration
Statement on Form N-1A of American Century Government Income Trust,
File No. 2-99222, filed on February 7, 1997, and incorporated
herein by reference).

EX-99.g2 Master Agreement between Commerce Bank, N.A. and Twentieth Century
Services, Inc. dated January 22, 1997 (filed as a part of
Post-Effective Amendment No. 76 to the Registration Statement on
Form N-1A of the Registrant, File No. 2-14213, filed on February
28, 1997, and incorporated herein by reference).

EX-99.h Transfer Agency Agreement dated as of March 1, 1991, by and between
Twentieth Century Investors, Inc. and Twentieth Century Services,
Inc. (filed as a part of Post-Effective Amendment No. 76 to the
Registration Statement on Form N-1A of the Registrant, File No.
2-14213, filed on February 28, 1997, and incorporated herein by
reference).

EX-99.i Opinion and Consent of Counsel.

EX-99.j1 Consent of Deloitte & Touche LLP to be filed by amendment.

EX-99.j2 Consent of Baird, Kurtz & Dobson to be filed by amendment.

EX-99.j3 Power of Attorney dated July 25, 1998.

EX-99.m1 Master Distribution and Shareholder Services Plan of Twentieth
Century Capital Portfolios, Inc., Twentieth Century Investors,
Inc., Twentieth Century Strategic Asset Allocations, Inc. and
Twentieth Century World Investors, Inc. (Advisor Class) dated
September 3, 1996 (filed as a part of Post-Effective Amendment No.
9 to the Registration Statement on Form N-1A of American Century
Capital Portfolios, Inc., File No. 33-64872, filed on February 17,
1998, and incorporated herein by reference).

EX-99.m2 Amendment No. 1 to Master Distribution and Shareholder Services
Plan of American Century Capital Portfolios, Inc., American Century
Mutual Funds, Inc., American Century Strategic Asset Allocations,
Inc. and American Century World Mutual Funds, Inc. (Advisor Class)
dated June 13, 1997 (filed as a part of Post-Effective Amendment
No. 77 to the Registration Statement on Form N-1A of the
Registrant, File No. 2-14213, filed on July 17, 1997, and
incorporated herein by reference).

EX-99.m3 Amendment No. 2 to Master Distribution and Shareholder Services
Plan of American Century Capital Portfolios, Inc., American Century
Mutual Funds, Inc., American Century Strategic Asset Allocations,
Inc. and American Century World Mutual Funds, Inc. (Advisor Class)
dated September 30, 1997 (filed as a part of Post-Effective
Amendment No. 78 to the Registration Statement on Form N-1A of the
Registrant, File No. 2-14213, filed on February 26, 1998, and
incorporated herein by reference).

EX-99.m4 Amendment No. 3 to Master Distribution and Shareholder Services
Plan of American Century Capital Portfolios, Inc., American Century
Mutual Funds, Inc., American Century Strategic Asset Allocations,
Inc. and American Century World Mutual Funds, Inc. (Advisor Class)
dated June 30, 1998 (filed as a part of Post-Effective Amendment
No. 11 to the Registration Statement on Form N-1A of American
Century Capital Portfolios, Inc., File No. 33-64872, filed on June
26, 1998, and incorporated herein by reference).

EX-99.m5 Amendment No. 4 to Master Distribution and Shareholder Services
Plan of American Century Capital Portfolios, Inc., American Century
Mutual Funds, Inc., American Century Strategic Asset Allocations,
Inc. and American Century World Mutual Funds, Inc. (Advisor Class)
dated November 13, 1998 (filed as a part of Post-Effective
Amendment No. 12 to the Registration Statement on Form N-1A of
American Century World Mutual Funds, Inc., File No. 33-39242, filed
on November 13, 1998, and incorporated herein by reference).

EX-99.m6 Shareholder Services Plan of Twentieth Century Capital Portfolios,
Inc., Twentieth Century Investors, Inc., Twentieth Century
Strategic Asset Allocations, Inc. and Twentieth Century World
Investors, Inc. (Service Class) dated September 3, 1996 (filed as a
part of Post-Effective Amendment No. 9 to the Registration
Statement on Form N-1A of American Century Capital Portfolios,
Inc., File No. 33-64872, filed on February 17, 1998, and
incorporated herein by reference).

EX-99.o1 Multiple Class Plan of Twentieth Century Capital Portfolios, Inc.,
Twentieth Century Investors, Inc., Twentieth Century Strategic
Asset Allocations, Inc. and Twentieth Century World Investors, Inc.
dated September 3, 1996 (filed as a part of Post-Effective
Amendment No. 9 to the Registration Statement on Form N-1A of
American Century Capital Portfolios, Inc., File No. 33-64872, filed
on February 17, 1998, and incorporated herein by reference).

EX-99.o2 Amendment No. 1 to Multiple Class Plan of American Century Capital
Portfolios, Inc., American Century Mutual Funds, Inc., American
Century Strategic Asset Allocations, Inc. and American Century
World Mutual Funds, Inc. dated June 13, 1997 (filed as a part of
Post-Effective Amendment No. 77 to the Registration Statement on
Form N-1A of the Registrant, File No. 2-14213, filed on July 17,
1997, and incorporated herein by reference).

EX-99.o3 Amendment No. 2 to Multiple Class Plan of American Century Capital
Portfolios, Inc., American Century Mutual Funds, Inc., American
Century Strategic Asset Allocations, Inc. and American Century
World Mutual Funds, Inc. dated September 30, 1997 (filed as a part
of Post-Effective Amendment No. 78 to the Registration Statement on
Form N-1A of the Registrant, File No. 2-14213, filed on February
26, 1998, and incorporated herein by reference).

EX-99.o4 Amendment No. 3 to Multiple Class Plan of American Century Capital
Portfolios, Inc., American Century Mutual Funds, Inc., American
Century Strategic Asset Allocations, Inc. and American Century
World Mutual Funds, Inc. dated June 30, 1998 (filed as a part of
Post-Effective Amendment No. 11 to the Registration Statement on
Form N-1A of American Century Capital Portfolios, Inc., File No.
33-64872, filed on June 26, 1998, and incorporated herein by
reference).

EX-99.o5 Amendment No. 4 to Multiple Class Plan of American Century Capital
Portfolios, Inc., American Century Mutual Funds, Inc., American
Century Strategic Asset Allocations, Inc. and American Century
World Mutual Funds, Inc. dated November 13, 1998 (filed as a part
of Post-Effective Amendment No. 12 to the Registration Statement on
Form N-1A of American Century World Mutual Funds, Inc., File No.
33-39242, filed on November 13, 1998, and incorporated herein by
reference).

EX-99.o6 Amendment No. 5 to Multiple Class Plan of American Century Capital
Portfolios, Inc., American Century Mutual Funds, Inc., American
Century Strategic Asset Allocations, Inc. and American Century
World Mutual Funds, Inc. dated January 29, 1999 (filed as a part of
Post-Effective Amendment No. 13 to the Registration Statement on
Form N-1A of the Registrant, File No. 33-64872, filed on November
25, 1998, and incorporated herein by reference).

EX-27.1.1 Financial Data Schedule for Growth Fund.

EX-27.1.2 Financial Data Schedule for Select Fund.

EX-27.1.3 Financial Data Schedule for Ultra Fund.

EX-27.1.4 Financial Data Schedule for Vista Fund.

EX-27.1.5 Financial Data Schedule for Giftrust.

EX-27.5.6 Financial Data Schedule for Benham Bond Fund.

EX-27.1.7 Financial Data Schedule for Heritage Fund.

EX-27.7.8 Financial Data Schedule for Balanced Fund.

EX-27.5.9 Financial Data Schedule for Limited-Term Bond Fund.

EX-27.5.10 Financial Data Schedule for Intermediate-Term Bond Fund.

EX-27.1.11 Financial Data Schedule for New Opportunities Fund.

EX-27.5.12 Financial Data Schedule for Benham High-Yield Fund.

Charles A. Etherington
Attorney at Law
4500 Main Street P.O. Box 418210
Kansas City, Missouri 64141-9210
Telephone (816) 340-4051
Telecopier (816) 340-4964
--------------------------

November 30, 1998

American Century Mutual Funds, Inc.
American Century Tower
4500 Main Street
Kansas City, Missouri 64111

Ladies and Gentlemen:

As counsel to American Century Mutual Funds, Inc., I am generally
familiar with its affairs. Based upon this familiarity, and upon the examination
of such documents as I have deemed relevant, it is my opinion that the shares of
the Corporation described in Post-Effective Amendment No. 79 to its Registration
Statement on Form N-1A, to be filed with the Securities and Exchange Commission
on November 30, 1998, will, when issued, be validly issued, fully paid and
nonassessable.

For the record, it should be noted that I am an officer of American
Century Services Corporation, an affiliated corporation of American Century
Investment Management, Inc., the investment adviser of American Century Mutual
Funds, Inc.

I hereby consent to the use of this opinion as an exhibit to
Post-Effective Amendment No. 79.

Very truly yours,

/s/Charles A. Etherington
Charles A. Etherington

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that the undersigned, American Century
Mutual Funds, Inc., hereinafter called the "Corporation", and certain directors
and officers of the Corporation, do hereby constitute and appoint George A. Rio,
Patrick A. Looby, Charles A. Etherington, David H. Reinmiller, and Charles C.S.
Park, and each of them individually, their true and lawful attorneys and agents
to take any and all action and execute any and all instruments which said
attorneys and agents may deem necessary or advisable to enable the Corporation
to comply with the Securities Act of 1933 and/or the Investment Company Act of
1940, as amended, and any rules, regulations, orders, or other requirements of
the United States Securities and Exchange Commission thereunder, in connection
with the registration under the Securities Act of 1933 and/or the Investment
Company Act of 1940, as amended, including specifically, but without limitation
of the foregoing, power and authority to sign the name of the Corporation in its
behalf and to affix its corporate seal, and to sign the names of each of such
directors and officers in their capacities as indicated, to any amendment or
supplement to the Registration Statement filed with the Securities and Exchange
Commission under the Securities Act of 1933 and/or the Investment Company Act of
1940, as amended, and to any instruments or documents filed or to be filed as a
part of or in connection with such Registration Statement; and each of the
undersigned hereby ratifies and confirms all that said attorneys and agents
shall do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, the Corporation has caused this Power to be
executed by its duly authorized officers on this the 25th day of July, 1998.

AMERICAN CENTURY MUTUAL FUNDS, INC.

By:/s/ George A. Rio
George A. Rio, President

SIGNATURE AND TITLE

/s/ George A. Rio /s/ Robert W. Doering, M.D.
George A. Rio Robert W. Doering, M.D.
President, Principal Executive and Director
Principal Financial Officer

/s/ Maryanne Roepke /s/ Andrea C. Hall
Maryanne Roepke Andrea C. Hall, Ph.D.
Vice President and Treasurer Director

/s/ James E. Stowers /s/ Donald H. Pratt
James E. Stowers, Jr. Donald H. Pratt
Director Director

/s/ James E. Stowers III /s/ Lloyd T. Silver
James E. Stowers III Lloyd T. Silver
Director Director

/s/ Thomas A. Brown /s/ M. Jeannine Strandjord
Thomas A. Brown M. Jeannine Strandjord
Director Director

Attest: /s/ D. D. Hock
D.D. ("Del") Hock
By:/s/ Patrick A. Looby Director
Patrick A. Looby, Secretary

<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF AMERICAN CENTURY MUTUAL FUNDS, INC. AND IS QUALIFIED IS ITS ENTIRETY
BY REFERENCE TO SUCH REPORT. INFORMATION PRESENTED IS A TOTAL OF ALL CLASSES,
EXCEPT WHERE SUCH PRESENTATION IS NOT POSSIBLE(SUCH AS PER SHARE DATA). IN THOSE
CASES, ONLY THE INVESTOR CLASS IS PRESENTED.
</LEGEND>
<CIK> 0000100334
<NAME> AMERICAN CENTURY MUTUAL FUNDS, INC.
<SERIES>
<NUMBER> 1
<NAME> AMERICAN CENTURY-TWENTIETH CENTURY GROWTH FUND
<MULTIPLIER> 1000

<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1998
<PERIOD-END> APR-30-1998 <F1>
<INVESTMENTS-AT-COST> 4,415,988
<INVESTMENTS-AT-VALUE> 5,991,038
<RECEIVABLES> 108,884
<ASSETS-OTHER> 6,408
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 6,106,330
<PAYABLE-FOR-SECURITIES> 131,451
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 13,677
<TOTAL-LIABILITIES> 145,128
<SENIOR-EQUITY> 2,121
<PAID-IN-CAPITAL-COMMON> 3,504,539
<SHARES-COMMON-STOCK> 212,130
<SHARES-COMMON-PRIOR> 183,598
<ACCUMULATED-NII-CURRENT> 3,075
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 873,337
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1,578,130
<NET-ASSETS> 5,961,202
<DIVIDEND-INCOME> 24,881
<INTEREST-INCOME> 5,086
<OTHER-INCOME> 0
<EXPENSES-NET> 26,890
<NET-INVESTMENT-INCOME> 3,077
<REALIZED-GAINS-CURRENT> 887,903
<APPREC-INCREASE-CURRENT> 58,757
<NET-CHANGE-FROM-OPS> 949,737
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 2
<DISTRIBUTIONS-OF-GAINS> 764,080
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 20,159
<NUMBER-OF-SHARES-REDEEMED> 23,295
<SHARES-REINVESTED> 31,668
<NET-CHANGE-IN-ASSETS> 846,054
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 749,514
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 26,854
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 26,890
<AVERAGE-NET-ASSETS> 5,431,935
<PER-SHARE-NAV-BEGIN> 27.86 <F2>
<PER-SHARE-NII> 0.02 <F2>
<PER-SHARE-GAIN-APPREC> 4.39 <F2>
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 4.17 <F2>
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 28.10 <F2>
<EXPENSE-RATIO> 1.00 <F2>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
<FN>
<F1>SCHEDULE REFLECTS THE TOTAL FOR ALL CLASSES, EXCEPT WHERE INDICATED.
<F2>INVESTOR CLASS INFORMATION ONLY.
</FN>

</TABLE>

<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF AMERICAN CENTURY MUTUAL FUNDS, INC. AND IS QUALIFIED IS ITS ENTIRETY
BY REFERENCE TO SUCH REPORT. INFORMATION PRESENTED IS A TOTAL OF ALL CLASSES,
EXCEPT WHERE SUCH PRESENTATION IS NOT POSSIBLE(SUCH AS PER SHARE DATA). IN THOSE
CASES, ONLY THE INVESTOR CLASS IS PRESENTED.
</LEGEND>
<CIK> 0000100334
<NAME> AMERICAN CENTURY MUTUAL FUNDS, INC.
<SERIES>
<NUMBER> 2
<NAME> AMERICAN CENTURY-TWENTIETH CENTURY SELECT FUND
<MULTIPLIER> 1000

<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1998
<PERIOD-END> APR-30-1998 <F1>
<INVESTMENTS-AT-COST> 4,178,332
<INVESTMENTS-AT-VALUE> 5,686,707
<RECEIVABLES> 22,249
<ASSETS-OTHER> 1,883
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 5,710,839
<PAYABLE-FOR-SECURITIES> 48,864
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 13,342
<TOTAL-LIABILITIES> 62,206
<SENIOR-EQUITY> 1,152
<PAID-IN-CAPITAL-COMMON> 3,508,002
<SHARES-COMMON-STOCK> 115,272
<SHARES-COMMON-PRIOR> 99,252
<ACCUMULATED-NII-CURRENT> 6,107
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 625,044
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1,508,328
<NET-ASSETS> 5,648,633
<DIVIDEND-INCOME> 27,943
<INTEREST-INCOME> 4,555
<OTHER-INCOME> 0
<EXPENSES-NET> 25,774
<NET-INVESTMENT-INCOME> 6,724
<REALIZED-GAINS-CURRENT> 630,701
<APPREC-INCREASE-CURRENT> 379,015
<NET-CHANGE-FROM-OPS> 1,016,440
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 19,559
<DISTRIBUTIONS-OF-GAINS> 785,248
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 9,541
<NUMBER-OF-SHARES-REDEEMED> 12,185
<SHARES-REINVESTED> 18,665
<NET-CHANGE-IN-ASSETS> 866,422
<ACCUMULATED-NII-PRIOR> 18,942
<ACCUMULATED-GAINS-PRIOR> 779,591
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 25,742
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 25,774
<AVERAGE-NET-ASSETS> 5,208,810
<PER-SHARE-NAV-BEGIN> 48.18 <F2>
<PER-SHARE-NII> 0.06 <F2>
<PER-SHARE-GAIN-APPREC> 8.89 <F2>
<PER-SHARE-DIVIDEND> 0.20 <F2>
<PER-SHARE-DISTRIBUTIONS> 7.93 <F2>
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 49.00 <F2>
<EXPENSE-RATIO> 1.00 <F2>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
<FN>
<F1>SCHEDULE REFLECTS THE TOTAL FOR ALL CLASSES, EXCEPT WHERE INDICATED.
<F2>INVESTOR CLASS INFORMATION ONLY.
</FN>

</TABLE>

<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF AMERICAN CENTURY MUTUAL FUNDS, INC. AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH REPORT. INFORMATION PRESENTED IS A TOTAL OF ALL CLASSES,
EXCEPT WHERE SUCH PRESENTATION IS NOT POSSIBLE(SUCH AS PER SHARE DATA). IN THOSE
CASES, ONLY THE INVESTOR CLASS INFORMATION IS PRESENTED.
</LEGEND>
<CIK> 0000100334
<NAME> AMERICAN CENTURY MUTUAL FUNDS, INC.
<SERIES>
<NUMBER> 3
<NAME> TWENTIETH CENTURY ULTRA FUND
<MULTIPLIER> 1000

<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1998
<PERIOD-END> APR-30-1998
<INVESTMENTS-AT-COST> 18,652,423 <F1>
<INVESTMENTS-AT-VALUE> 24,858,235
<RECEIVABLES> 211,615
<ASSETS-OTHER> 1,241,291
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 26,311,141
<PAYABLE-FOR-SECURITIES> 194,246
<SENIOR-LONG-TERM-DEBT> 70,669
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 264,915
<SENIOR-EQUITY> 8,111
<PAID-IN-CAPITAL-COMMON> 16,511,777
<SHARES-COMMON-STOCK> 811,128
<SHARES-COMMON-PRIOR> 649,251
<ACCUMULATED-NII-CURRENT> 5,152
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 2,512,915
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 7,008,271
<NET-ASSETS> 26,046,226
<DIVIDEND-INCOME> 108,411
<INTEREST-INCOME> 9,685
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 1,613
<REALIZED-GAINS-CURRENT> 2,545,336
<APPREC-INCREASE-CURRENT> 2,079,166
<NET-CHANGE-FROM-OPS> 4,626,115
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 8,663
<DISTRIBUTIONS-OF-GAINS> 4,600,571
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 113,738
<NUMBER-OF-SHARES-REDEEMED> 122,632
<SHARES-REINVESTED> 170,770
<NET-CHANGE-IN-ASSETS> 4,320,310
<ACCUMULATED-NII-PRIOR> 12,202
<ACCUMULATED-GAINS-PRIOR> 4,658,150
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 116,237
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 116,483
<AVERAGE-NET-ASSETS> 23,528,982
<PER-SHARE-NAV-BEGIN> 33.46 <F2>
<PER-SHARE-NII> 0.00
<PER-SHARE-GAIN-APPREC> 5.73 <F2>
<PER-SHARE-DIVIDEND> 0.01 <F2>
<PER-SHARE-DISTRIBUTIONS> 7.07 <F2>
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 32.11 <F2>
<EXPENSE-RATIO> 1.00 <F2>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
<FN>
<F1>SCHEDULE REFLECTS THE TOTAL FOR ALL CLASSES, EXCEPT WHERE INDICATED.
<F2>INVESTOR CLASS INFORMATION ONLY.
</FN>

</TABLE>

<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
SEMI-ANNUAL REPORT OF AMERICAN CENTURY MUTUAL FUNDS, INC. AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH REPORT. INFORMATION PRESENTED IS A TOTAL OF
ALL CLASSES, EXCEPT WHERE SUCH PRESENTATION IS NOT POSSIBLE(SUCH AS PER SHARE
DATA). IN THOSE CASES, ONLY THE INVESTOR CLASS INFORMATION IS PRESENTED.
</LEGEND>
<CIK> 0000100334
<NAME> AMERICAN CENTURY MUTUAL FUNDS, INC.
<SERIES>
<NUMBER> 4
<NAME> TWENTIETH CENTURY VISTA FUND
<MULTIPLIER> 1000

<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1998
<PERIOD-END> APR-30-1998
<INVESTMENTS-AT-COST> 1,233,226
<INVESTMENTS-AT-VALUE> 1,437,639
<RECEIVABLES> 65,039
<ASSETS-OTHER> 115,129
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,617,807
<PAYABLE-FOR-SECURITIES> 93,466
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 6,261
<TOTAL-LIABILITIES> 99,727
<SENIOR-EQUITY> 1,120
<PAID-IN-CAPITAL-COMMON> 1,093,246
<SHARES-COMMON-STOCK> 111,989
<SHARES-COMMON-PRIOR> 127,209
<ACCUMULATED-NII-CURRENT> (3,567)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 192,261
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 235,020
<NET-ASSETS> 1,518,080
<DIVIDEND-INCOME> 1,625
<INTEREST-INCOME> 2,907
<OTHER-INCOME> 0
<EXPENSES-NET> 8,099
<NET-INVESTMENT-INCOME> (3,567)
<REALIZED-GAINS-CURRENT> 196,322
<APPREC-INCREASE-CURRENT> (213,552)
<NET-CHANGE-FROM-OPS> (20,797)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 99,553
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 53,328
<NUMBER-OF-SHARES-REDEEMED> 76,568
<SHARES-REINVESTED> 8,020
<NET-CHANGE-IN-ASSETS> (330,142)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 95,492
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 8,074
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 8,099
<AVERAGE-NET-ASSETS> 1,632,368
<PER-SHARE-NAV-BEGIN> 14.53 <F2>
<PER-SHARE-NII> (0.03) <F2>
<PER-SHARE-GAIN-APPREC> (0.14) <F2>
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0.80 <F2>
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 13.56 <F2>
<EXPENSE-RATIO> 1.00 <F2>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
<FN>
<F1>SCHEDULE RELFECTS THE TOTAL FOR ALL CLASSES, EXCEPT WHERE INDICATED.
<F2>INVESTOR CLASS INFORMATION ONLY.
</FN>

</TABLE>

<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
SEMI-ANNUAL REPORT OF AMERICAN CENTURY MUTUAL FUNDS, INC. AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH REPORT. INFORMATION PRESENTED IS A TOTAL OF
ALL CLASSES, EXCEPT WHERE SUCH PRESENTATION IS NOT POSSIBLE(SUCH AS PER SHARE
DATA). IN THOSE CASES, ONLY THE INVESTOR CLASS INFORMATION IS PRESENTED.
</LEGEND>
<CIK> 0000100334
<NAME> AMERICAN CENTURY MUTUAL FUNDS, INC.
<SERIES>
<NUMBER> 5
<NAME> TWENTIETH CENTURY GIFTRUST FUND
<MULTIPLIER> 1000

<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1998
<PERIOD-END> APR-30-1998 <F1>
<INVESTMENTS-AT-COST> 872,155
<INVESTMENTS-AT-VALUE> 1,090,380
<RECEIVABLES> 28,309
<ASSETS-OTHER> 355
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,119,044
<PAYABLE-FOR-SECURITIES> 30,557
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,034
<TOTAL-LIABILITIES> 31,591
<SENIOR-EQUITY> 435
<PAID-IN-CAPITAL-COMMON> 869,373
<SHARES-COMMON-STOCK> 43,539
<SHARES-COMMON-PRIOR> 40,206
<ACCUMULATED-NII-CURRENT> (2,572)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 1,992
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 218,225
<NET-ASSETS> 1,087,453
<DIVIDEND-INCOME> 518
<INTEREST-INCOME> 1,938
<OTHER-INCOME> 0
<EXPENSES-NET> 5,028
<NET-INVESTMENT-INCOME> (2,572)
<REALIZED-GAINS-CURRENT> 3,696
<APPREC-INCREASE-CURRENT> 16,697
<NET-CHANGE-FROM-OPS> 17,821
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 30,705
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,385
<NUMBER-OF-SHARES-REDEEMED> 447
<SHARES-REINVESTED> 1,395
<NET-CHANGE-IN-ASSETS> 63,813
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 29,001
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 5,023
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 5,028
<AVERAGE-NET-ASSETS> 830,211
<PER-SHARE-NAV-BEGIN> 25.46
<PER-SHARE-NII> (0.12)
<PER-SHARE-GAIN-APPREC> 0.39
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0.75
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 24.98
<EXPENSE-RATIO> 1.00
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
<FN>
<F1> SCHEDULE REFLECTS THE TOTAL FOR ALL CLASSES, EXCEPT WHERE INDICATED.
<F2> INVESTOR CLASS INFORMATION ONLY.
</FN>

</TABLE>

<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1998
<PERIOD-END> APR-30-1998 <F1>
<INVESTMENTS-AT-COST> 128,473
<INVESTMENTS-AT-VALUE> 132,333
<RECEIVABLES> 2,458
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 50
<TOTAL-ASSETS> 134,841
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 739
<TOTAL-LIABILITIES> 739
<SENIOR-EQUITY> 138
<PAID-IN-CAPITAL-COMMON> 130,197
<SHARES-COMMON-STOCK> 13,842
<SHARES-COMMON-PRIOR> 13,058
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (93)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 3,860
<NET-ASSETS> 134,102
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 4,471
<OTHER-INCOME> 0
<EXPENSES-NET> 529
<NET-INVESTMENT-INCOME> 3,942
<REALIZED-GAINS-CURRENT> (68)
<APPREC-INCREASE-CURRENT> (196)
<NET-CHANGE-FROM-OPS> 3,678
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 3,942
<DISTRIBUTIONS-OF-GAINS> 369
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3,728
<NUMBER-OF-SHARES-REDEEMED> 3,347
<SHARES-REINVESTED> 403
<NET-CHANGE-IN-ASSETS> 7,059
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 524
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 529
<AVERAGE-NET-ASSETS> 132,441
<PER-SHARE-NAV-BEGIN> 9.73 <F2>
<PER-SHARE-NII> 0.29 <F2>
<PER-SHARE-GAIN-APPREC> (0.01) <F2>
<PER-SHARE-DIVIDEND> 0.29 <F2>
<PER-SHARE-DISTRIBUTIONS> 0.03 <F2>
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 9.69 <F2>
<EXPENSE-RATIO> 0.80 <F2>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
<FN>
<F1> SCHEDULE REFLECTS THE TOTAL FOR ALL CLASSES, EXCEPT WHERE INDICATED.
<F2> INVESTOR CLASS INFORMATION ONLY.
</FN>

</TABLE>

<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF AMERICAN CENTURY MUTUAL FUNDS, INC. AND IS QUALIFIED IS ITS ENTIRETY
BY REFERENCE TO SUCH REPORT. INFORMATION PRESENTED IS A TOTAL OF ALL CLASSES,
EXCEPT WHERE SUCH PRESENTATION IS NOT POSSIBLE(SUCH AS PER SHARE DATA). IN THOSE
CASES, ONLY THE INVESTOR CLASS IS PRESENTED.
</LEGEND>
<CIK> 0000100334
<NAME> AMERICAN CENTURY MUTUAL FUNDS, INC.
<SERIES>
<NUMBER> 11
<NAME> AMERICAN CENTURY-TWENTIETH CENTURY HERITAGE FUND
<MULTIPLIER> 1000

<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1998
<PERIOD-END> APR-30-1998 <F1>
<INVESTMENTS-AT-COST> 1,181,496
<INVESTMENTS-AT-VALUE> 1,450,907
<RECEIVABLES> 53,738
<ASSETS-OTHER> 6,510
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,511,155
<PAYABLE-FOR-SECURITIES> 77,697
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 3,795
<TOTAL-LIABILITIES> 81,492
<SENIOR-EQUITY> 1,100
<PAID-IN-CAPITAL-COMMON> 1,038,582
<SHARES-COMMON-STOCK> 110,043
<SHARES-COMMON-PRIOR> 88,918
<ACCUMULATED-NII-CURRENT> 1,055
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 118,557
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 270,369
<NET-ASSETS> 1,429,663
<DIVIDEND-INCOME> 5,439
<INTEREST-INCOME> 2,396
<OTHER-INCOME> 0
<EXPENSES-NET> 6,585
<NET-INVESTMENT-INCOME> 1,250
<REALIZED-GAINS-CURRENT> 119,317
<APPREC-INCREASE-CURRENT> 1,332
<NET-CHANGE-FROM-OPS> 121,899
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 6,634
<DISTRIBUTIONS-OF-GAINS> 241,179
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 14,298
<NUMBER-OF-SHARES-REDEEMED> 32,180
<SHARES-REINVESTED> 5,797
<NET-CHANGE-IN-ASSETS> 108,148
<ACCUMULATED-NII-PRIOR> 6,439
<ACCUMULATED-GAINS-PRIOR> 240,419
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 6,576
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 6,585
<AVERAGE-NET-ASSETS> 1,329,392
<PER-SHARE-NAV-BEGIN> 14.86 <F2>
<PER-SHARE-NII> 0.01 <F2>
<PER-SHARE-GAIN-APPREC> 0.89 <F2>
<PER-SHARE-DIVIDEND> 0.07 <F2>
<PER-SHARE-DISTRIBUTIONS> 2.70 <F2>
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 12.99 <F2>
<EXPENSE-RATIO> 1.00 <F2>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
<FN>
<F1>SCHEDULE REFLECTS THE TOTAL FOR ALL CLASSES, EXCEPT WHERE INDICATED.
<F2>INVESTOR CLASS INFORMATION ONLY.
</FN>

</TABLE>

<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF AMERICAN CENTURY MUTUAL FUNDS, INC. AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH REPORT. INFORMATION PRESENTED IS A TOTAL OF ALL CLASSES,
EXCEPT WHERE SUCH PRESENTATION IS NOT POSSIBLE(SUCH AS PER SHARE DATA). IN THOSE
CASES, ONLY THE INVESTOR CLASS IS PRESENTED.
</LEGEND>
<CIK> 0000100334
<NAME> AMERICAN CENTURY MUTUAL FUNDS, INC.
<SERIES>
<NUMBER> 12
<NAME> AMERICAN CENTURY BALANCED FUND
<MULTIPLIER> 1000

<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1998
<PERIOD-END> APR-30-1998 <F1>
<INVESTMENTS-AT-COST> 822,807
<INVESTMENTS-AT-VALUE> 979,129
<RECEIVABLES> 19,287
<ASSETS-OTHER> 1,600
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,000,016
<PAYABLE-FOR-SECURITIES> 23,283
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2,492
<TOTAL-LIABILITIES> 25,775
<SENIOR-EQUITY> 49,913
<PAID-IN-CAPITAL-COMMON> 679,321
<SHARES-COMMON-STOCK> 49,913
<SHARES-COMMON-PRIOR> 47,654
<ACCUMULATED-NII-CURRENT> 2,294
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 86,391
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 156,322
<NET-ASSETS> 974,241
<DIVIDEND-INCOME> 2,240
<INTEREST-INCOME> 12,969
<OTHER-INCOME> 0
<EXPENSES-NET> 4,724
<NET-INVESTMENT-INCOME> 10,485
<REALIZED-GAINS-CURRENT> 87,335
<APPREC-INCREASE-CURRENT> (6,479)
<NET-CHANGE-FROM-OPS> 91,341
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 10,753
<DISTRIBUTIONS-OF-GAINS> 76,004
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 4,611
<NUMBER-OF-SHARES-REDEEMED> 7,094
<SHARES-REINVESTED> 4,742
<NET-CHANGE-IN-ASSETS> 42,380
<ACCUMULATED-NII-PRIOR> 2,562
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 75,060
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 4,703
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 4,724
<AVERAGE-NET-ASSETS> 951,287
<PER-SHARE-NAV-BEGIN> 19.55 <F2>
<PER-SHARE-NII> 0.21 <F2>
<PER-SHARE-GAIN-APPREC> 1.58 <F2>
<PER-SHARE-DIVIDEND> 0.22 <F2>
<PER-SHARE-DISTRIBUTIONS> 1.60 <F2>
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 19.52 <F2>
<EXPENSE-RATIO> 1.00 <F2>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
<FN>
<F1>SCHEDULE REFLECTS THE TOTAL FOR ALL CLASSES, EXCEPT WHERE INDICATED.
<F2>INVESTOR CLASS INFORMATION ONLY.
</FN>

</TABLE>

<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
SEMI-ANNUAL REPORT OF AMERICAN CENTURY MUTUAL FUNDS, INC. AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH REPORT. INFORMATION PRESENTED IS A TOTAL OF
ALL CLASSES, EXCEPT WHERE SUCH PRESENTATION IS NOT POSSIBLE(SUCH AS PER SHARE
DATA). IN THOSE CASES, ONLY THE INVESTOR CLASS INFORMATION IS PRESENTED.
</LEGEND>
<CIK> 0000100334
<NAME> AMERICAN CENTURY MUTUAL FUNDS, INC.
<SERIES>
<NUMBER> 14
<NAME> BENHAM LIMITED-TERM BOND
<MULTIPLIER> 1000

<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1998
<PERIOD-END> APR-30-1998 <F1>
<INVESTMENTS-AT-COST> 18,644
<INVESTMENTS-AT-VALUE> 18,728
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 230
<TOTAL-ASSETS> 18,958
<PAYABLE-FOR-SECURITIES> 887
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 567
<TOTAL-LIABILITIES> 1,454
<SENIOR-EQUITY> 18
<PAID-IN-CAPITAL-COMMON> 17,327
<SHARES-COMMON-STOCK> 1,759
<SHARES-COMMON-PRIOR> 1,530
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 75
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 84
<NET-ASSETS> 17,504
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 602
<OTHER-INCOME> 0
<EXPENSES-NET> 67
<NET-INVESTMENT-INCOME> 535
<REALIZED-GAINS-CURRENT> 76
<APPREC-INCREASE-CURRENT> (44)
<NET-CHANGE-FROM-OPS> 567
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 535
<DISTRIBUTIONS-OF-GAINS> 29
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,410
<NUMBER-OF-SHARES-REDEEMED> 1,233
<SHARES-REINVESTED> 52
<NET-CHANGE-IN-ASSETS> 2,235
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 67
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 67
<AVERAGE-NET-ASSETS> 19,307
<PER-SHARE-NAV-BEGIN> 9.98 <F2>
<PER-SHARE-NII> 0.28 <F2>
<PER-SHARE-GAIN-APPREC> (0.02) <F2>
<PER-SHARE-DIVIDEND> 0.28 <F2>
<PER-SHARE-DISTRIBUTIONS> 0.01 <F2>
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 9.95 <F2>
<EXPENSE-RATIO> 0.70 <F2>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
<FN>
<F1> SCHEDULE REFLECTS THE TOTAL FOR ALL CLASSES, EXCEPT WHERE INDICATED.
<F2> INVESTOR CLASS INFORMATION ONLY.
</FN>

</TABLE>

<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
SEMI-ANNUAL REPORT OF AMERICAN CENTURY MUTUAL FUNDS, INC. AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH REPORT. INFORMATION PRESENTED IS A TOTAL OF
ALL CLASSES, EXCEPT WHERE SUCH PRESENTATION IS NOT POSSIBLE(SUCH AS PER SHARE
DATA). IN THOSE CASES, ONLY THE INVESTOR CLASS INFORMATION IS PRESENTED.
</LEGEND>
<CIK> 0000100334
<NAME> AMERICAN CENTURY MUTUAL FUNDS, INC.
<SERIES>
<NUMBER> 15
<NAME> BENHAM INTERMEDIATE-TERM BOND
<MULTIPLIER> 1000

<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1998
<PERIOD-END> APR-30-1998 <F1>
<INVESTMENTS-AT-COST> 24,763
<INVESTMENTS-AT-VALUE> 25,001
<RECEIVABLES> 336
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 2
<TOTAL-ASSETS> 25,339
<PAYABLE-FOR-SECURITIES> 501
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,512
<TOTAL-LIABILITIES> 2,013
<SENIOR-EQUITY> 23
<PAID-IN-CAPITAL-COMMON> 22,939
<SHARES-COMMON-STOCK> 2,319
<SHARES-COMMON-PRIOR> 1,999
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 126
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 238
<NET-ASSETS> 23,326
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 719
<OTHER-INCOME> 0
<EXPENSES-NET> 84
<NET-INVESTMENT-INCOME> 635
<REALIZED-GAINS-CURRENT> 112
<APPREC-INCREASE-CURRENT> (154)
<NET-CHANGE-FROM-OPS> 593
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 635
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 798
<NUMBER-OF-SHARES-REDEEMED> 533
<SHARES-REINVESTED> 55
<NET-CHANGE-IN-ASSETS> 3,183
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 14
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 78
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 84
<AVERAGE-NET-ASSETS> 21,717
<PER-SHARE-NAV-BEGIN> 10.07 <F2>
<PER-SHARE-NII> 0.30 <F2>
<PER-SHARE-GAIN-APPREC> (0.01) <F2>
<PER-SHARE-DIVIDEND> 0.30 <F2>
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 10.06 <F2>
<EXPENSE-RATIO> 0.75 <F2>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
<FN>
<F1> SCHEDULE REFLECTS THE TOTAL FOR ALL CLASSES, EXCEPT WHERE INDICATED.
<F2> INVESTOR CLASS INFORMATION ONLY.
</FN>

</TABLE>

<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF AMERICAN CENTURY MUTUAL FUNDS, INC. AND IS QUALIFIED IS ITS ENTIRETY
BY REFERENCE TO SUCH REPORT. INFORMATION PRESENTED IS A TOTAL OF ALL CLASSES,
EXCEPT WHERE SUCH PRESENTATION IS NOT POSSIBLE(SUCH AS PER SHARE DATA). IN THOSE
CASES, ONLY THE INVESTOR CLASS IS PRESENTED.
</LEGEND>
<CIK> 0000100334
<NAME> AMERICAN CENTURY MUTUAL FUNDS, INC.
<SERIES>
<NUMBER> 17
<NAME> TWENTIETH CENTURY NEW OPPORTUNITIES
<MULTIPLIER> 1000

<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1998
<PERIOD-END> APR-30-1998
<INVESTMENTS-AT-COST> 222,757
<INVESTMENTS-AT-VALUE> 276,447
<RECEIVABLES> 5,225
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 281,672
<PAYABLE-FOR-SECURITIES> 8,128
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 599
<TOTAL-LIABILITIES> 8,727
<SENIOR-EQUITY> 453
<PAID-IN-CAPITAL-COMMON> 217,231
<SHARES-COMMON-STOCK> 45,336
<SHARES-COMMON-PRIOR> 43,529
<ACCUMULATED-NII-CURRENT> (1,455)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 3,026
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 53,690
<NET-ASSETS> 272,945
<DIVIDEND-INCOME> 79
<INTEREST-INCOME> 255
<OTHER-INCOME> 0
<EXPENSES-NET> 1,789
<NET-INVESTMENT-INCOME> (1,455)
<REALIZED-GAINS-CURRENT> 6,777
<APPREC-INCREASE-CURRENT> 26,995
<NET-CHANGE-FROM-OPS> 32,317
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 5,227
<NUMBER-OF-SHARES-REDEEMED> 3,420
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 272,945
<ACCUMULATED-NII-PRIOR> 208,322
<ACCUMULATED-GAINS-PRIOR> (3,751)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,788
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,789
<AVERAGE-NET-ASSETS> 240,862
<PER-SHARE-NAV-BEGIN> 5.31
<PER-SHARE-NII> (0.03)
<PER-SHARE-GAIN-APPREC> 0.74
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 6.02
<EXPENSE-RATIO> 1.50
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
<FN>
<F1>SCHEDULE REFLECTS THE TOTAL FOR ALL CLASSES, EXCEPT WHERE INDICATED.
<F2>INVESTOR CLASS INFORMATION ONLY.
</FN>

</TABLE>

<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1998
<PERIOD-END> APR-30-1998 <F1>
<INVESTMENTS-AT-COST> 30,366,709
<INVESTMENTS-AT-VALUE> 30,768,588
<RECEIVABLES> 1,067,292
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 31,835,880
<PAYABLE-FOR-SECURITIES> 1,309,086
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,046,478
<TOTAL-LIABILITIES> 2,355,564
<SENIOR-EQUITY> 28,781
<PAID-IN-CAPITAL-COMMON> 28,929,367
<SHARES-COMMON-STOCK> 2,878,065
<SHARES-COMMON-PRIOR> 1,117,810
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 120,289
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 401,879
<NET-ASSETS> 29,480,316
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 943,495
<OTHER-INCOME> 0
<EXPENSES-NET> 94,867
<NET-INVESTMENT-INCOME> 848,628
<REALIZED-GAINS-CURRENT> 120,289
<APPREC-INCREASE-CURRENT> 513,551
<NET-CHANGE-FROM-OPS> 1,482,468
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 848,628
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3,251,674
<NUMBER-OF-SHARES-REDEEMED> 1,563,364
<SHARES-REINVESTED> 71,945
<NET-CHANGE-IN-ASSETS> 29,480,316
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 94,768
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 94,867
<AVERAGE-NET-ASSETS> 21,233,909
<PER-SHARE-NAV-BEGIN> 9.91
<PER-SHARE-NII> 0.41
<PER-SHARE-GAIN-APPREC> 0.33
<PER-SHARE-DIVIDEND> 0.41
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 10.24
<EXPENSE-RATIO> 0.90
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
<FN>
<F1> SCHEDULE REFLECTS THE TOTAL FOR ALL CLASSES, EXCEPT WHERE INDICATED.
<F2> INVESTOR CLASS INFORMATION ONLY.
</FN>

</TABLE>