AMERICAN CENTURY MUTUAL FUNDS INC, N-30D, 1999-06-24

AMERICAN CENTURY MUTUAL FUNDS INC
N-30D, 1999-06-24

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[front cover]

APRIL 30, 1999

SEMIANNUAL REPORT

AMERICAN CENTURY

[graphic of stairs]

SELECT

HERITAGE

GROWTH

[american century logo(reg.sm)]
American
Century

[inside front cover]

- --------------------------------------------------------------------------------
Y2K TESTING EFFORTS PAY DIVIDENDS IN PREPAREDNESS

Y2K, short for the year 2000, refers more specifically to the date change from
December 31, 1999 to January 1, 2000. This date change is significant for
computers because many were originally programmed to process dates with
two-character years -- 99 instead of 1999.

When the calendar rolls to 2000, this can create problems for computers
programmed this way because they will read the date as "00," and may interpret
it as 1900. Most companies have been working to reprogram their computer systems
with four-digit years. Reprogramming is very labor-intensive and requires
testing to ensure that there are no errors and that all lines of code were
successfully changed.

Recognizing the possible impact of the Y2K issue, our senior-level Steering
Committee, programmers, business partners and Y2K team have been working
diligently to make January 1, 2000 a non-event for American Century investors.

Currently, all of our computer systems have been modified, tested and returned
to production. We have an ongoing commitment to testing our systems with our
vendors and business partners and within the industry throughout the rest of the
year.

In March and April of this year, we participated in the Security Industry
Association's (SIA) industry-wide test and successfully processed transactions
for dates up to and beyond 2000. American Century transactions with our partner
firms were processed free of Y2K bugs. We also participated in the Market Data
Test conducted by the SIA and Financial Information Forum in May. Again, the
computer scripts were executed successfully with no Y2K-related errors.

In addition to our testing schedule, our Y2K team has developed contingency
plans. These plans will minimize the impact on our investors and help us
maintain operations in the event of any Y2K-related incidents. We will conduct
practice drills of contingency scenarios during the rest of 1999 and refine
those plans to respond quickly and effectively so that the date change is as
seamless as possible for investors. We expect the year 2000 to be business as
usual at American Century.

Year 2000 Readiness Disclosure

MINIMIZE YOUR MUTUAL FUND TAX HIT

American Century's newest equity fund, Tax-Managed Value, is designed for
long-term growth and to minimize the tax hit you take on your mutual fund
investments each year. The fund is managed to keep taxable distributions to
a minimum by using the following strategies:

* BUY AND HOLD --Low portfolio turnover helps limit realized capital gains
and takes advantage of long-term capital gains tax rates.

* OFFSET GAINS --When gains are realized in the portfolio, they are offset
with capital losses from securities sold in that tax year or losses
carried over from previous years.

* SELL HIGHER-COST SHARES FIRST --Selling shares that cost the most first
helps minimize the taxable gains incurred from a sale.

[left margin]

SELECT
(TWCIX)

HERITAGE
(TWHIX)

GROWTH
(TWCGX)

TURN TO THE INSIDE BACK COVER OF THIS REPORT TO SEE A LIST OF THE FUNDS
CLASSIFIED BY OBJECTIVE AND RISK.

Our Message to You
- --------------------------------------------------------------------------------

[photo of James E. Stowers III, and James E. Stowers, Jr.]
James E. Stowers III, seated, with James E. Stowers, Jr.

The six-month period ended April 30, 1999, was marked by dramatic shifts in
stock market sentiment. Much of the time, a few large, popular growth stocks
continued to flourish, while smaller firms--unless they were
Internet-related--were caught in the market's crosscurrents. The performance of
small and midsize stocks came in bursts, one as the period began, and another as
it ended. Against this backdrop, Growth and Select continued to distinguish
themselves by generating better returns than both their peer groups and
benchmarks. Heritage's results also improved, even though it had to contend with
continuing investor pessimism about mid-cap stocks.

In June, Select portfolio managers Jean Ledford and Richard Welsh resigned
after accepting positions at another fund company. Chief Executive Officer James
Stowers III and newly appointed portfolio manager Kenneth Crawford now focus on
Select. Crawford has been with American Century for four years and was
previously an analyst on the team assigned to American Century Growth Fund. He
spent his first two-and-a-half years in the same capacity on Select. In
addition, he has been a primary manager on two large-company funds that American
Century manages for institutional investors. Stowers is responsible for the
overall execution of the seven American Century domestic growth funds that
follow our long-held approach of identifying companies experiencing accelerating
growth. Thanks to our team management approach, the company has depth, with
experienced managers and analysts able to step into new assignments in cases
like this.

On the corporate front, we recently consolidated all our funds under the
American Century name. We have also reclassified our entire family of 71 funds,
based on investment goals and risk levels, so that you can more easily choose
the funds that are right for you. You'll find the complete fund listing on the
inside back cover of this report.

Finally, we redesigned and enhanced our Web site, www.americancentury.com.
Here you'll find daily fund information, including performance and price data,
market and national news, and a Forms Center with access to the most-requested
investor forms and applications. You can also sign up to receive fund
prospectuses and shareholder reports electronically.

As always, we appreciate your continued confidence in American Century.

Sincerely,

/s/James E. Stowers, Jr. /s/James E. Stowers III
James E. Stowers, Jr. James E. Stowers III
Chairman of the Board and Founder Vice Chairman of the Board
and Chief Executive Officer

[right margin]

Table of Contents

Report Highlights ...................................................... 2
Market Perspective ..................................................... 3
SELECT
Performance ............................................................ 4
Management Q&A ......................................................... 5
Schedule of Investments ................................................ 8
Financial Highlights ................................................... 32
HERITAGE
Performance ............................................................ 11
Management Q&A ......................................................... 12
Schedule of Investments ................................................ 15
Financial Highlights ................................................... 35
GROWTH
Performance ............................................................ 18
Management Q&A ......................................................... 19
Schedule of Investments ................................................ 22
Financial Highlights ................................................... 38
FINANCIAL STATEMENTS
Statements of Assets and
Liabilities ......................................................... 24
Statements of Operations ............................................... 25
Statements of Changes
in Net Assets ....................................................... 26
Notes to Financial
Statements .......................................................... 27
OTHER INFORMATION
Share Class and Retirement
Account Information ................................................. 41
Background Information
Investment Philosophy
and Policies ..................................................... 42
Comparative Indices ................................................. 42
Portfolio Managers .................................................. 42
Glossary ............................................................... 43

www.americancentury.com 1

Report Highlights
- --------------------------------------------------------------------------------

MARKET PERSPECTIVE

* The six-month period was marked by dramatic shifts in market sentiment.
Much of the time, the market was led by a small group of large, popular
growth stocks, as investors, uncertain about the strength of the economy
moving forward, sought firms with predictable earnings. Meanwhile, the
performance of small stocks came in short bursts, one as the period began,
another as it ended.

* The Federal Reserve's lowering of short-term interest rates last fall
sparked rallies in both large and small stocks, but the move was
short-lived for smaller stocks. In April, value stocks and those of large
industrial companies shot up, as the Dow Jones Industrial Average gained
more than 10% during the month, compared to a 3.79% increase in the S&P 500
Index. The Russell 2000, a small-cap index, was up almost 9% during April,
as investors recognized the attractive valuations of small and midsized
firms.

SELECT

* Select posted a healthy 27.01% return for the first half of its fiscal
year. It outperformed its benchmark, the S&P 500 Index, which gained
22.31%, and many of its peers.

* Several factors that helped performance in the past continued to work in
Select's favor. Investors maintained and perhaps even intensified their
preference for the large-capitalization stocks that also make up the bulk
of Select's portfolio. Select also benefited from the large positions
maintained in a number of the top-performing companies.

* Four large industry groups performed particularly well during the six
months--technology, financial services, pharmaceuticals and
telecommunications--which together represented a substantial percentage of
fund investments at April 30.

HERITAGE

* Heritage gained a healthy 22.28% during the first half of its fiscal year,
beating its benchmark, the S&P MidCap 400 Index, which returned 18.86%.

* Telecommunications companies and biotechnology companies contributed
significantly to returns.

* Several holdings within the pharmaceutical sector were disappointing, as
was Heritage's stake in a company that provides consulting services to
energy and utility companies.

* The management team increased the fund's stake in telecommunications
companies, which now represent 11% of investments. Management also
increased holdings in the energy and global cable TV industries.

GROWTH

* Growth posted a strong 24.79% return for the six months ended April 30,
nearly matching the 24.93% gain posted by its benchmark, the Russell 1000
Growth Index.

* Growth's performance was helped by the concentrated nature of its
portfolio. Growth's 10 largest positions accounted for approximately 35% of
investments.

* The fund's stake in media, telecommunications, healthcare and technology
companies contributed significantly to performance. Tobacco companies and
holdings in the food and beverage industry dampened returns.

[left margin]

SELECT(1)
(TWCIX)
TOTAL RETURNS: AS OF 4/30/99
6 Months 27.01%(2)
1 Year 28.41%
INCEPTION DATE: 6/30/71(3)
NET ASSETS: $7.2 billion(4)

HERITAGE(1)
(TWHIX)
TOTAL RETURNS: AS OF 4/30/99
6 Months 22.28%(2)
1 Year -6.05%
INCEPTION DATE: 11/10/87
NET ASSETS: $964.8 million(4)

GROWTH(1)
(TWCGX)
TOTAL RETURNS: AS OF 4/30/99
6 Months 24.79%(2)
1 Year 24.48%
INCEPTION DATE: 6/30/71(3)
NET ASSETS: $7.7 billion(4)

(1) Investor Class.
(2) Not annualized.
(3) Although the original inception date was 10/31/58, this inception date
corresponds with the management company's implementation of its
current investment practices.
(4) Includes Investor, Advisor, and Institutional classes.

Investment terms are defined in the Glossary on pages 43-44.

2 1-800-345-2021

Market Perspective from James E. Stowers III
- --------------------------------------------------------------------------------

[photo of James E. Stowers III]
James E. Stowers III, Chief Executive Officer of American Century

MARKET PERFORMANCE WAS BROADER

The chart in the lower right corner of this page, Market Performance, will
show you at a glance how stocks behaved over the six-month period ended April
30, 1999. The returns of all three stock categories--small, midsize, and
large--were squarely in double digits. That in itself is impressive. Over the
past several years it has been far more typical for the stocks of midsize and
small companies to lag, often by substantial margins, those of larger companies,
and especially those of the very largest multinational companies.

THE FEDERAL RESERVE STEPS IN

As you may recall, in September 1998, the financial markets were less
tranquil. Many were in crisis until the Federal Reserve Board (the U.S. central
bank) stepped in and stabilized the situation by lowering short-term interest
rates. The strategy worked and smaller stocks rallied. Large stocks moved higher
too, led by technology and Internet-related companies, but smaller stocks
appeared to fall back into familiar patterns--greater volatility and lower
returns. In early spring, however, this changed noticeably.

THE S&P 500 SLOWS

In April, value stocks and the stocks of large manufacturers such as Dow
Chemical and Caterpillar shot up. The Dow Jones Industrial Average jumped 10.25%
in April, trouncing the S&P 500's 3.79% gain. The S&P 400, the midsize stock
benchmark, also came out slightly ahead, up 7.88% for the month, while the
Russell 2000, a small-cap index, rose 8.96%. The S&P 500/BARRA Value Index, a
popular measure of value stocks, leapt 8.62%, posting one of its best
performances in years.

Several factors contributed to the change in market dynamics. For one,
market leadership had remained unusually narrow, with size the chief
differential in performance.

Second, big growth companies became increasingly expensive, and the fear
grew that any reversion to normal performance could be costly. The Federal
Reserve's rate reductions also energized stocks. A perception also arose, as the
economy continued to grow, that perhaps the economic cycle wasn't ending but
instead was beginning anew, kicking off another growth cycle. Given that
forecast, economically sensitive industrial companies were the likely
beneficiaries.

It's too early to tell whether this scenario will prove true, but the
perception sparked an unusually robust short-term reaction.

GOOD BUSINESSES, GOOD STOCKS

At American Century, we try hard not to overreact to short-term market
developments. Our focus is on helping shareholders build their capital over
time. We do that by owning the best businesses available, particularly those
with accelerating rates of earnings growth, no matter which sector of the
economy they represent.

[right margin]

"AT AMERICAN CENTURY, WE TRY HARD NOT TO OVERREACT TO SHORT-TERM MARKET
DEVELOPMENTS. OUR FOCUS IS ON HELPING SHAREHOLDERS BUILD THEIR CAPITAL OVER
TIME."

MARKET RETURNS
FOR THE SIX MONTHS ENDED APRIL 30, 1999

S&P 500 22.31%
S&P MIDCAP 400 18.86%
RUSSELL 2000 15.16%

Source: Lipper Inc.

These indices represent the performance of large-, medium-, and
small-capitalization stocks.

[mountain chart - data below]

MARKET PERFORMANCE (GROWTH OF $1.00)
FOR THE SIX MONTHS ENDED APRIL 30, 1999

Date S&P 500 S&P MidCap 400 Russell 2000

10/31/98 $1.00 $1.00 $1.00
11/30/98 $1.06 $1.05 $1.05
12/31/98 $1.12 $1.18 $1.12
1/31/99 $1.17 $1.13 $1.13
2/28/99 $1.13 $1.07 $1.04
3/31/99 $1.18 $1.10 $1.06
4/30/99 $1.22 $1.19 $1.15

Value on 4/30/99
S&P 500 $1.22
S&P MidCap 400 $1.19
Russell 2000 $1.15

www.americancentury.com 3

Select--Performance
- --------------------------------------------------------------------------------

<TABLE>
TOTAL RETURNS AS OF APRIL 30, 1999

INVESTOR CLASS ADVISOR CLASS INSTITUTIONAL CLASS
(INCEPTION 6/30/71)(1) (INCEPTION 8/8/97) (INCEPTION 3/13/97)
SELECT S&P 500 SELECT S&P 500 SELECT S&P 500

<S> <C> <C> <C> <C> <C> <C>
6 MONTHS(2) 27.01% 22.31% 26.83% 22.31% 27.16% 22.31%
1 YEAR 28.41% 21.80% 28.07% 21.80% 28.69% 21.80%
============================================================================================
AVERAGE ANNUAL RETURNS
============================================================================================
3 YEARS 29.46% 29.04% -- -- -- --
5 YEARS 22.74% 26.82% -- -- -- --
10 YEARS 16.44% 18.77% -- -- -- --
LIFE OF FUND 17.88% 13.85% 27.25% 24.89% 33.92% 30.07%
</TABLE>
(1) Although the fund's actual inception date was 10/31/58, this inception date
corresponds with the management company's implementation of its current
investment philosophy and practices.

(2) Returns for periods less than one year are not annualized.

See pages 41-44 for information about share classes, the S&P 500 Index, and
returns.

[mountain chart - data below]

GROWTH OF $10,000 OVER 10 YEARS

$10,000 investment made 4/30/89

Date Select Value S&P 500 Value
4/30/89 $10,000 $10,000
4/30/90 $11,592 $11,044
4/30/91 $13,459 $12,983
4/30/92 $14,883 $14,807
4/30/93 $15,838 $16,173
4/30/94 $16,458 $17,035
4/30/95 $17,632 $20,002
4/30/96 $21,139 $26,029
4/30/97 $25,481 $32,562
4/30/98 $35,721 $45,916
4/30/99 $45,863 $55,922

Value on 4/30/99
S&P 500 $55,922
Select $45,863

The graph at left shows the growth of a $10,000 investment in the fund over 10
years, while the chart below shows the fund's year-by-year performance. The S&P
500 Index is provided for comparison in each graph. Select's total returns
include operating expenses (such as transaction costs and management fees) that
reduce returns, while the total returns of the S&P 500 Index do not. The graphs
are based on Investor Class shares only; performance for other classes will vary
due to differences in fee structures (see the Total Returns table above). Past
performance does not guarantee future results. Investment return and principal
value will fluctuate, and redemption value may be more or less than original
cost.

[bar chart - data below]

ONE-YEAR RETURNS OVER 10 YEARS (PERIODS ENDING APRIL 30)

Date. Select S&P 500
4/30/90 15.92% 10.44%
4/30/91 16.11% 17.56%
4/30/92 10.58% 14.05%
4/30/93 6.41% 9.22%
4/30/94 3.92% 5.33%
4/30/95 7.13% 17.42%
4/30/96 19.89% 30.13%
4/30/97 20.54% 25.10%
4/30/98 40.19% 41.01%
4/30/99 28.41% 21.80%

4 1-800-345-2021

Select--Q&A
- --------------------------------------------------------------------------------

[photo of Jean Ledford and Richard Welsh]

Jean Ledford and Richard Welsh, portfolio managers on the Select investment
team

An interview with Jean Ledford and Richard Welsh, portfolio managers on the
Select investment team.

HOW DID SELECT PERFORM FOR THE SIX MONTHS ENDED APRIL 30, 1999?*

Select posted a healthy 27.01% return for the first half of its fiscal
year. It outperformed its benchmark, the S&P 500 Index, which gained 22.31%, and
also dramatically outpaced many of its peers. For the six months, the Lipper
Growth and Income Fund Index returned 17.85%.

Select's longer-term performance has also been impressive.(+) For the year,
it ranked 15th out of 815 growth and income funds tracked by Lipper and 16th out
of 501 growth and income funds for the three-year period.

WHAT FACTORS CONTRIBUTED TO SELECT'S STRONG PERFORMANCE?

Several things that have helped performance in the past continued to work
in our favor. Importantly, investors maintained--and perhaps even
intensified--their preference for the large-capitalization stocks that also make
up the bulk of Select's portfolio. In addition to being the market's darlings
for an extended run, these stocks benefited from a "flight to quality" in late
1998 amid ongoing concern about economic instability abroad. Select also
benefited from its large positions in a number of the top-performing companies.

WHICH INDUSTRIES OR COMPANIES CONTRIBUTED THE MOST TO PERFORMANCE?

Four large industry groups performed particularly well --technology,
financial services, pharmaceuticals, and telecommunications--and Select held a
significant stake in each.

Select's largest industry stake throughout the period was pharmaceuticals.
Big, household-name drug companies, such as Pfizer, Bristol-Myers Squibb, Merck,
and Eli Lilly, sported some of the highest growth rates in the large-cap
universe. In nearly every case, the company's profits were driven by robust
sales of newer or extremely popular products, such as Merck's Celebrex for
treating arthritis, and Pfizer's much-touted Viagra for treating impotence.

Continued robust growth in the Internet boosted earnings for Select's
technology-related holdings. America Online, the nation's leading Internet
provider, gained a stunning 344% during the period, making it the fund's top
contributor. Other technology holdings that posted strong gains

*All fund returns referenced in this interview are for Investor Class shares.

(+)For the 5-year period ending 4/30/99, Select ranked 92 out of 319 growth and
income funds ranked by Lipper. Select ranked 41 out of 148 growth and income
funds ranked by Lipper for the 10-year period ended 4/30/99.

[right margin]

"FOUR LARGE INDUSTRY GROUPS PERFORMED PARTICULARLY WELL -- TECHNOLOGY,
FINANCIAL SERVICES, PHARMACEUTICALS, AND TELECOMMUNICATIONS. . ."

PORTFOLIO AT A GLANCE
4/30/99 10/31/98
NO. OF COMPANIES 100 96
MEDIAN P/E RATIO 33.9 32.0
MEDIAN MARKET $42.5 $31.6
CAPITALIZATION BILLION BILLION
PORTFOLIO TURNOVER 86%(1) 165%(2)
EXPENSE RATIO (FOR
INVESTOR CLASS) 1.00%(3) 1.00%

(1) Six months ended 4/30/99.
(2) Year ended 10/31/98.
(3) Annualized.

Investment terms are defined in the Glossary on pages 43-44.

www.americancentury.com 5

Select--Q&A
- --------------------------------------------------------------------------------
(Continued)

included Cisco Systems, which makes Internet routers and related equipment,
software and services giant Microsoft, and Dell Computers and Sun Microsystems,
industry-leading computer systems manufacturers. Intel and Texas Instruments,
which make semiconductors and other computer-related gear, also benefited from
the technology boom and added to performance.

Telecommunications companies, the major carriers of electronic commerce,
also demonstrated robust growth, thanks to rapidly increasing Internet traffic.
AT&T, Sprint, and MCI WorldCom, which together accounted for nearly 5% of
investments at April 30, were among Select's top performers. Not only have these
companies continued to post strong gains, but their earnings tend to remain
consistent in periods of economic uncertainty, making them especially attractive
in the recent period.

We saw excellent growth in the financial services arena as well. Although
this sector stumbled somewhat in late 1998 due to ongoing anxiety about the
economic turmoil in Asia and Latin America, we took advantage of weaker prices
and significantly increased Select's holdings, nearly doubling our stake. We
focused primarily on big-name money center banks, such as Citigroup, Chase
Manhattan, and Bank of America, and also on several smaller regional banks, all
of which were benefiting from strong consumer spending. This move proved
prudent, as these holdings quickly climbed to the top of Select's list of best
performers.

WHICH INDUSTRIES OR COMPANIES DAMPENED PERFORMANCE?

Select's worst-performing holding was tobacco giant Philip Morris. Ongoing
lawsuits against tobacco manufacturers and recent costly, precedent-setting
rulings against them have increased investor concern and pressured their stocks
down across the board. Philip Morris was no exception.

Warner Lambert was also disappointing after the Federal Drug Administration
relabeled the company's successful diabetes drug, Rezulin, in response to
increased evidence of its negative side effects. Rezulin, along with Lipitor, a
drug for cholesterol reduction, were the company's primary earnings drivers.

Although most banks and financial services companies were great
contributors during the six months, one holding, First Union Corp., stumbled.
The company's ability to sustain earnings growth while integrating myriad
businesses remains unclear, and the company's stock has struggled.

WHAT SIGNIFICANT CHANGES DID YOU MAKE TO THE PORTFOLIO IN THE LAST SIX MONTHS?

We closed out Select's stake in tobacco companies, given the industry's
negative near-term outlook. We also trimmed our position in food and beverage
companies as growth tapered in that industry. We lightened our

[left margin]

TOP TEN HOLDINGS

% OF FUND INVESTMENTS
AS OF AS OF
4/30/99 10/31/98
MICROSOFT CORP. 4.5% 3.6%
GENERAL ELECTRIC CO.
(U.S.) 3.5% 3.7%
CITIGROUP INC. 3.3% 1.1%
INTERNATIONAL BUSINESS
MACHINES CORP. 3.3% 3.4%
WAL-MART STORES, INC. 2.5% 2.7%
LUCENT TECHNOLOGIES
INC. 2.5% 1.2%
BANKAMERICA CORP. 2.4% --
MCI WORLDCOM, INC. 2.4% 2.6%
CISCO SYSTEMS INC. 2.4% 1.8%
AMERICAN INTERNATIONAL
GROUP, INC. 2.4% 1.0%

TOP FIVE INDUSTRIES
% OF FUND INVESTMENTS
AS OF AS OF
4/30/99 10/31/98
PHARMACEUTICALS 10.6% 18.0%
BANKING 10.1% 4.2%
COMPUTER SOFTWARE
& SERVICES 7.5% 6.2%
FINANCIAL SERVICES 6.8% 2.6%
TELEPHONE
COMMUNICATIONS 6.6% 9.4%*

* Percentage has been adjusted to reflect security industry reclassification.

6 1-800-345-2021

Select--Q&A
- --------------------------------------------------------------------------------
(Continued)

position somewhat in telecommunications services firms, and beefed up our stake
in communications equipment providers, where earnings growth remains impressive.

Also on the buy side, we nearly tripled Select's position in financial
services companies and banks, where acquisition and merger activity continue to
boost earnings and revenues. We also added to holdings in property insurance
providers and auto and auto parts companies that demonstrated the earnings
growth we look for.

WHAT IS YOUR OUTLOOK FOR SELECT GOING FORWARD?

It's impossible to predict whether investors will continue to place a
premium on the high-growth, large-cap stocks that have driven Select's recent
performance. However, we are confident that long-term investors who focus on
successful businesses--ones that demonstrate consistent growth, high earnings
visibility, and an ability to ride out a period of slowing economic
activity--will be rewarded over time. We will continue to seek firms that meet
our disciplined investment criteria.

[right margin]

". . . WE ARE CONFIDENT THAT LONG-TERM INVESTORS WHO FOCUS ON SUCCESSFUL
BUSINESSES--ONES THAT DEMONSTRATE CONSISTENT GROWTH, HIGH EARNINGS VISIBILITY,
AND AN ABILITY TO RIDE OUT A PERIOD OF SLOWING ECONOMIC ACTIVITY--WILL BE
REWARDED OVER TIME."

[pie charts - data below]

TYPES OF INVESTMENTS IN THE PORTFOLIO

AS OF APRIL 30, 1999
Temporary Cash Investments 1%
Common Stocks 99%

AS OF OCTOBER 31, 1998
Temporary Cash Investments 6%
Common Stocks 94%

www.americancentury.com 7

Select--Schedule of Investments
- --------------------------------------------------------------------------------

APRIL 30, 1999 (UNAUDITED)

Shares ($ in Thousands) Value
- --------------------------------------------------------------------------------
COMMON STOCKS--99.0%

AEROSPACE & DEFENSE -- 1.7%
325,000 AlliedSignal Inc. $ 19,094
650,000 Boeing Co. 26,406
311,500 Textron Inc. 28,697
300,000 United Technologies Corp. 43,463
--------------
117,660
--------------

AUTOMOBILES & AUTO PARTS -- 2.8%
1,700,000 Ford Motor Co. 108,694
1,050,000 General Motors Corp. 93,384
--------------
202,078
--------------
BANKING -- 10.1%
980,000 Banc One Corp. 57,820
1,000,000 Bank of New York Co., Inc. (The) 40,000
2,425,000 BankAmerica Corp. 174,600
765,000 Chase Manhattan Corp. 63,304
3,150,000 Citigroup Inc. 237,037
405,000 Fifth Third Bancorp 29,021
495,000 Mellon Bank Corp. 36,785
1,910,000 Wells Fargo & Co. 82,488
--------------
721,055
--------------
BIOTECHNOLOGY -- 0.6%
690,000 Amgen Inc.(1) 42,370
--------------
BROADCASTING & MEDIA -- 2.3%
1,170,000 CBS Corporation(1) 53,308
350,000 Cox Communications, Inc. Cl A(1) 27,781
1,210,000 Time Warner Inc. 84,700
--------------
165,789
--------------
CHEMICALS & RESINS -- 1.8%
400,000 Air Products and Chemicals, Inc. 18,800
150,000 Dow Chemical Co. 19,678
1,300,000 du Pont (E.I.) de Nemours & Co. 91,812
--------------
130,290
--------------
COMMUNICATIONS EQUIPMENT -- 3.4%
2,920,000 Lucent Technologies Inc. 175,565
860,000 Motorola, Inc. 68,908
--------------
244,473
--------------
COMPUTER PERIPHERALS -- 3.6%
1,505,000 Cisco Systems Inc.(1) 171,711
815,000 EMC Corp. (Mass.)(1) 88,784
--------------
260,495
--------------

Shares ($ in Thousands) Value
- --------------------------------------------------------------------------------
COMPUTER SOFTWARE & SERVICES -- 7.5%
1,105,000 America Online Inc. 157,739
700,000 Compuware Corp.(1) 17,041
910,000 First Data Corp. 38,618
3,968,800 Microsoft Corp.(1) 322,589
--------------
535,987
--------------
COMPUTER SYSTEMS -- 5.4%
1,725,000 Dell Computer Corp.(1) 70,994
1,115,000 International Business
Machines Corp. 233,244
1,320,000 Sun Microsystems, Inc.(1) 78,994
--------------
383,232
--------------
CONSUMER PRODUCTS -- 4.3%
650,000 Avon Products, Inc. 35,303
310,000 Colgate-Palmolive Co. 31,756
1,480,000 Gillette Company 77,238
1,734,000 Procter & Gamble Co. (The) 162,671
--------------
306,968
--------------
DIVERSIFIED COMPANIES -- 5.5%
300 Berkshire Hathaway Inc. Cl A(1 22,920
2,360,000 General Electric Co. (U.S.) 248,980
300,000 Honeywell Inc. 28,425
1,110,800 Tyco International Ltd. 90,253
--------------
390,578
--------------
ELECTRICAL & ELECTRONIC
COMPONENTS -- 3.5%
2,150,000 Intel Corp. 131,486
870,000 Solectron Corp.(1) 42,195
475,000 Texas Instruments Inc. 48,509
650,000 Xilinx, Inc.(1) 29,738
--------------
251,928
--------------
ENERGY (PRODUCTION & MARKETING) -- 1.2%
550,000 Atlantic Richfield Co. 46,166
370,000 Phillips Petroleum Co. 18,731
575,000 Unocal Corp. 23,898
--------------
88,795
--------------
ENERGY (SERVICES) -- 1.0%
600,000 Halliburton Co. 25,575
725,000 Schlumberger Ltd. 46,309
--------------
71,884
--------------

See Notes to Financial Statements

8 1-800-345-2021

Select--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)

APRIL 30, 1999 (UNAUDITED)

Shares ($ in Thousands) Value
- --------------------------------------------------------------------------------
FINANCIAL SERVICES -- 6.8%
405,600 American Express Co. $ 53,007
750,000 Associates First Capital Corp. 33,234
300,000 Equitable Companies Inc. 20,194
1,350,000 Fannie Mae 95,766
920,000 Federal Home Loan Mortgage
Corporation 57,730
650,000 Household International, Inc. 32,703
400,000 Merrill Lynch & Co., Inc. 33,575
860,000 Morgan Stanley Dean Witter,
Discover & Co. 85,301
680,000 Schwab (Charles) Corp. 74,630
--------------
486,140
--------------
FOOD & BEVERAGE -- 3.6%
700,000 Anheuser-Busch Companies, Inc. 51,187
1,850,000 Coca-Cola Company (The) 125,800
1,108,900 PepsiCo, Inc. 40,960
700,000 Seagram Co. Ltd. (The) 40,162
--------------
258,109
--------------
HEALTHCARE -- 0.2%
200,000 Aetna Inc. 17,537
--------------
INSURANCE -- 3.0%
790,900 Allstate Corp. 28,769
1,435,000 American International Group, Inc. 168,523
445,300 Travelers Property Casualty
Corp. Cl A 15,363
--------------
212,655
--------------
LEISURE -- 1.5%
800,000 Carnival Corp. Cl A 33,000
2,230,000 Disney (Walt) Co. 70,802
--------------
103,802
--------------
MACHINERY & EQUIPMENT -- 0.5%
675,000 Applied Materials, Inc.(1) 36,176
--------------
MEDICAL EQUIPMENT & SUPPLIES -- 1.5%
830,000 Boston Scientific Corp.(1) 35,327
290,000 Guidant Corp. 15,569
770,300 Medtronic, Inc. 55,413
--------------
106,309
--------------
PAPER & FOREST PRODUCTS -- 0.6%
700,000 Kimberly-Clark Corp. 42,919
--------------

Shares ($ in Thousands) Value
- --------------------------------------------------------------------------------
PHARMACEUTICALS -- 10.6%
1,950,000 Abbott Laboratories $ 94,453
900,000 American Home Products Corp. 54,900
1,780,000 Bristol-Myers Squibb Co. 113,141
1,650,000 Johnson & Johnson 160,875
1,540,000 Merck & Co., Inc. 108,185
1,000,000 Pfizer, Inc. 115,063
570,000 Pharmacia & Upjohn Inc. 31,920
940,000 Schering-Plough Corp. 45,414
540,000 Warner-Lambert Co. 36,686
--------------
760,637
--------------
RAILROAD -- 0.3%
375,000 Union Pacific Corp. 22,500
--------------
RESTAURANTS -- 1.0%
1,610,000 McDonald's Corp. 68,224
--------------
RETAIL (APPAREL) -- 0.7%
735,000 Gap, Inc. (The) 48,923
--------------
RETAIL (FOOD & DRUG) -- 0.4%
650,000 CVS Corp. 30,956
--------------
RETAIL (GENERAL MERCHANDISE) -- 3.0%
580,000 Dayton Hudson Corp. 39,041
3,880,000 Wal-Mart Stores, Inc. 178,480
--------------
217,521
--------------
RETAIL (SPECIALTY) -- 2.7%
1,000,000 Bed Bath & Beyond Inc.(1) 35,750
2,100,000 Home Depot, Inc. 125,869
1,080,000 Staples, Inc.(1) 32,434
--------------
194,053
--------------
TELEPHONE COMMUNICATIONS -- 6.6%
500,000 Ameritech Corp. 34,219
2,580,000 AT&T Corp. 130,290
720,000 Bell Atlantic Corp. 41,490
2,100,000 MCI WorldCom, Inc.(1) 172,528
455,000 Qwest Communications
International Inc.(1) 38,860
520,000 Sprint Corp. 53,333
--------------
470,720
--------------
TEXTILES & APPAREL -- 0.4%
400,000 NIKE, Inc. 24,875
--------------
WIRELESS COMMUNICATIONS -- 0.9%
449,900 Nextel Communications, Inc.(1) 18,404
590,000 Nokia Corp. ADR Cl A 43,771
--------------
62,175
--------------

TOTAL COMMON STOCKS 7,077,813
--------------
(Cost $5,196,753)

See Notes to Financial Statements

www.americancentury.com 9

Select--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)

APRIL 30, 1998 (UNAUDITED)

Principal Amount ($ in Thousands) Value
- --------------------------------------------------------------------------------

TEMPORARY CASH INVESTMENTS--1.0%
$500 FHLB Discount Notes,
4.90%, 5/3/99(2) $ 500

Repurchase Agreement, Goldman Sachs & Co.,
Inc., (U.S. Treasury obligations), in a joint trading
account at 4.84%, dated 4/30/99, due
5/3/99 (Delivery value $73,129) 73,100
--------------
TOTAL TEMPORARY CASH INVESTMENTS 73,600
--------------
(Cost $73,600)

TOTAL INVESTMENT SECURITIES--100.0% $ 7,151,413
==============
(Cost $5,270,353)

NOTES TO SCHEDULE OF INVESTMENTS

ADR = American Depositary Receipt

FHLB = Federal Home Loan Bank

(1) Non-income producing.

(2) Rate indicated is the yield to maturity at purchase.

- ------------------------------------------------------------------------------
UNDERSTANDING THE SCHEDULE OF INVESTMENTS--This schedule shows you which
investments your fund owned on the last day of the reporting period.

The schedule includes:
* a list of each investment
* the number of shares of each stock
* the market value of each investment
* the percentage of total investments in each industry
* the percent and dollar breakdown of each investment category

See Notes to Financial Statements

10 1-800-345-2021

Heritage--Performance
- --------------------------------------------------------------------------------

<TABLE>
TOTAL RETURNS AS OF APRIL 30, 1999

INVESTOR CLASS ADVISOR CLASS INSTITUTIONAL CLASS
(INCEPTION 11/10/87) (INCEPTION 7/11/97) (INCEPTION 6/16/97)
HERITAGE S&P MIDCAP 400 HERITAGE S&P MIDCAP 400 HERITAGE S&P MIDCAP 400
<S> <C> <C> <C> <C> <C> <C>
6 MONTHS(1) 22.28% 18.86% 22.13% 18.86% 22.39% 18.86%
1 YEAR -6.05% 6.43% -6.21% 6.43% -5.86% 6.43%
===============================================================================================
AVERAGE ANNUAL RETURNS
===============================================================================================
3 YEARS 10.47% 20.13% -- -- -- --
5 YEARS 12.28% 19.83% -- -- -- --
10 YEARS 12.76% 17.71% -- -- -- --
LIFE OF FUND 14.83% 19.54%(2) 3.84% 18.57%(3) 6.67% 19.11%(4)
</TABLE>
(1) Returns for periods less than one year are not annualized.

(2) Since 11/30/87, the date nearest the class's inception for which data are
available.

(3) Since 7/10/97, the date nearest the class's inception for which data are
available.

(4) Since 6/19/97, the date nearest the class's inception for which data are
available.

See pages 41-44 for information about share classes, the S&P MidCap 400 Index,
and returns.

(mountain chart - data below]

GROWTH OF $10,000 OVER 10 YEARS

Heritage S&P MidCap 400 Index
Date Value Value
4/30/89 $10,000 $10,000
4/30/90 $10,904 $10,930
4/30/91 $12,327 $13,690
4/30/92 $14,220 $16,433
4/30/93 $16,470 $18,816
4/30/94 $18,634 $20,662
4/30/95 $19,734 $22,685
4/30/96 $24,675 $29,447
4/30/97 $26,158 $32,430
4/30/98 $35,410 $47,971
4/30/99 $33,263 $51,055

Value on 4/30/99
S&P MidCap 400 Index $51,055
Heritage $33,263

The graph at left shows the growth of a $10,000 investment in the fund over 10
years, while the chart below shows the fund's year-by-year performance. The S&P
MidCap 400 Index is provided for comparison in each graph. Heritage's total
returns include operating expenses (such as transaction costs and management
fees) that reduce returns, while the total returns of the S&P MidCap 400 Index
do not. The graphs are based on Investor Class shares only; performance for
other classes will vary due to differences in fee structures (see the Total
Returns table above). Past performance does not guarantee future results.
Investment return and principal value will fluctuate, and redemption value may
be more or less than original cost.

[bar chart - data below]

ONE-YEAR RETURNS OVER 10 YEARS (PERIODS ENDING APRIL 30)

Heritage S&P MidCap 400 Index
Date Return Return
4/30/90 9.04% 9.30%
4/30/91 13.05% 25.25%
4/30/92 15.36% 20.04%
4/30/93 15.82% 14.50%
4/30/94 13.14% 9.81%
4/30/95 5.90% 9.79%
4/30/96 25.04% 29.81%
4/30/97 6.01% 10.13%
4/30/98 35.37% 47.92%
4/30/99 -6.05% 6.43%

www.americancentury.com 11

Heritage--Q&A
- --------------------------------------------------------------------------------

[picture of Harold Bradley and Linda Peterson]
Harold Bradley and Linda Peterson, portfolio managers on the Heritage investment
team

An interview with Harold Bradley and Linda Peterson, portfolio managers on
the Heritage investment team.

HOW DID THE FUND PERFORM FOR THE SIX-MONTH PERIOD ENDED APRIL 30, 1999?*

Heritage turned in strong results. It gained 22.28%, well above the 18.86%
increase posted by its benchmark, the Standard & Poor's MidCap 400 Index.

Heritage's investment approach centers on owning companies in the middle of
the capitalization range whose earnings and revenues are growing at an
accelerating rate. At least 60% of the portfolio must be invested in firms that
pay dividends. Carrying large positions in successful companies is a hallmark of
our earnings-based investment approach. Heritage's 10 largest investments
accounted for more than a third of the fund, and five of its best contributors
were on that list.

WHICH COMPANIES CONTRIBUTED TO PERFORMANCE?

Gemstar International Group, our largest holding, gained 90% over the
period. This company is known for the simple VCR technology called
VCRPLUS+(reg.tm). Its flagship product enables a consumer to record shows simply
by punching in the show's numerical code found in TV listings. Gemstar's
technology is built into every major VCR brand. More importantly, the company
owns patents for on-screen-interactive program guides that will be a viewer's
best friend in a digital world with more than 100 channels. We believe the
program guide could well become a major source of advertising revenue for
Gemstar.

Immunex Corp., a biotechnology company, was another strong contributor--up
more than 170% for the period. The company is marketing a new drug called
Enbrel, for the treatment of rheumatoid arthritis. The drug is quickly gaining
market share after being approved by the FDA last November.

Montana Power Co. is a position we opened during the period and is now one
of our largest holdings. Though you wouldn't suspect it from its name, Montana
Power's key asset is a rapidly expanding 6,000-mile fiber optic
telecommunications network that stretches across seven states. It is an advanced
telecommunications company that is taking advantage of regulatory changes that
are opening up competition. Montana Power will be divesting itself of its
energy-generating assets later this year. The stock has risen 70% since we
bought it.

WHICH STOCKS DID NOT LIVE UP TO YOUR EXPECTATIONS?

We were disappointed by the experience of one of our larger holdings, Mylan
Laboratories. A stock that was performing well going into the period, Mylan is a
generic drug manufacturer whose shares fell significantly after the Federal
Trade Commission unexpectedly charged the company with illegally raising the
prices of two drugs. Its stock fell more than 30% over the period. The

*All fund returns referenced in this interview are for Investor Class shares.

[left margin]

"HERITAGE'S INVESTMENT APPROACH CENTERS ON OWNING COMPANIES IN THE MIDDLE OF
THE CAPITALIZATION RANGE WHOSE EARNINGS AND REVENUES ARE GROWING AT AN
ACCELERATING RATE."

PORTFOLIO AT A GLANCE
4/30/99 10/31/98
NO. OF COMPANIES 83 82
MEDIAN P/E RATIO 29.9 25.3
MEDIAN MARKET $5.00 $2.97
CAPITALIZATION BILLION BILLION
PORTFOLIO TURNOVER 69%(1) 148%(2)
EXPENSE RATIO (FOR
INVESTOR CLASS) 1.00%(3) 1.00%

(1) Six months ended 4/30/99.
(2) Year ended 10/31/98.
(3) Annualized.

Investment terms are defined in the Glossary on pages 43-44.

12 1-800-345-2021

Heritage--Q&A
- --------------------------------------------------------------------------------
(Continued)

irony is that as a generic drug maker, Mylan's products cost half as much as
their branded equivalents.

The Metzler Group was another disappointment. A leading supplier of
consulting services to energy and utility companies that has built itself
primarily through acquisitions, Metzler fell victim to investor perceptions that
proposed changes in accounting standards would impede future growth and
acquisition strategies. We still own the stock because the company's internally
generated growth exceeds 20% and its earnings and revenues continue to
accelerate.

Finally, we didn't get the boost we'd hoped for from Omnicare, which
provides pharmacy management services and drug therapy to nursing homes.
Investors avoided the stock beginning in January in the wake of a new nursing
home payment plan that restricts Medicare reimbursements to a fixed payment per
patient. We sold Omnicare and deployed the money in companies we think are in a
better position to sustain their growth.

WHAT MAJOR CHANGES DID YOU MAKE IN THE PORTFOLIO'S STRUCTURE?

We added to our investments in telecommunications companies. Two firms
we're optimistic about are ADC Telecommunications and Global TeleSystems Group.
As telecommunications and cable firms race to expand the capacity of their huge
networks to offer Internet access, high-speed data, video and other services,
ADC concentrates on "the last mile"--the local network that connects to the
user's home or business. The need is acute. The company estimates that while
long-distance carriers' networks have the capacity to send the entire Library of
Congress--17 million books--across the country in one minute, it would take 70
years for the same information to travel that last mile.

Global TeleSystems Group is a U.S. telecom company that is providing a
broad range of services to businesses, other communications providers, and
consumers in Russia and Central Europe. Through subsidiaries and joint ventures
abroad, the company is at work on a high-capacity fiber optic network that will
transport voice, data, and video traffic throughout western and central Europe.

WHICH OTHER INDUSTRIES LOOKED ATTRACTIVE?

We increased our exposure to the global cable TV industry, investing in
companies involved in both infrastructure and program content. Three firms we
own that deserve mention are USA Networks, Adelphia Communications, and United
International Holdings. USA Networks is in the content end of the business. It
owns the USA Network and the Sci-Fi Channel cable networks, the Home Shopping
Network, and Ticketmaster, the automated ticketing service. We expanded our
stake in USA over the period; it's now among our 10 largest positions.
Pennsylvania-based Adelphia Communications is a large cable television operator
in the United States, primarily serving cities in the eastern and southeastern
parts of the country. Adelphia has invested heavily in expanding the capacity of
its network. United International Holdings is an international cable company
based in Denver that is introducing cable service (along with Internet and
telephone service) in Europe, Australia, and Latin America.

Energy also is an area we focused on during the period. This sector became
desirable in the last quarter of 1998 when crude oil prices had reached a
trough. As oil prices began to rise, supply could not immediately

{right margin]

TOP TEN HOLDINGS

% OF FUND INVESTMENTS
AS OF AS OF
4/30/99 10/31/98
GEMSTAR INTERNATIONAL
GROUP LTD. 6.3% 2.2%
MONTANA POWER CO. 4.5% --
GLOBAL TELESYSTEMS
GROUP, INC.
(CONVERTIBLE
PREFERRED) 3.4% 0.9%
USA NETWORKS INC. 3.3% 1.8%
CRH PLC ORD 3.0% 2.8%
UNITED INTERNATIONAL
HOLDINGS, INC. CL A 2.8% --
BIOMATRIX, INC. 2.8% 2.6%
ALBERTA ENERGY CO.
LTD. ORD 2.4% 1.7%
PREMIER PARKS INC.
(CONV. PREF.) 2.3% --
ADC
TELECOMMUNICATIONS,
INC. 2.2% 1.0%

TOP FIVE INDUSTRIES

% OF FUND INVESTMENTS
AS OF AS OF
4/30/99 10/31/98

BROADCASTING & MEDIA 12.8% 4.4%*
LEISURE 11.4% 5.5%
BIOTECHNOLOGY 6.4% 5.6%
COMPUTER SOFTWARE
& SERVICES 5.7% 11.3%
BANKING 5.6% 1.9%

* Percentage has been adjusted to reflect security industry reclassification.

www.americancentury.com 13

Heritage--Q&A
- --------------------------------------------------------------------------------
(Continued)

be increased, which boosted oil stocks. In addition to owning well-known
Schlumberger, we also purchased Alberta Energy Company, a Canadian oil and gas
exploration and production company.

Other new holdings we're optimistic about are Bausch & Lomb, and Premier
Parks. These are two good growth stories. Bausch & Lomb, the eye-care company,
is buying businesses involved in the explosive growth of laser eye surgery.
Premier Parks runs the Six Flags theme parks. The company has improved its
margins, thanks to cost-cutting efforts, and has struck a deal with Warner
Brothers to use WB's cartoon characters at its parks.

WHAT IS YOUR OUTLOOK FOR HERITAGE?

Heritage gained 15.05% during November and December 1998 as investors
suddenly turned to two areas of the market they had been ignoring, cyclical
stocks and small and medium-sized growth companies. The positive environment for
mid-cap stocks has continued in 1999, a sign that growth investors may be
finding it harder and harder to overlook the tremendously attractive prices in
the mid-cap space. We hope the pendulum will continue to move toward smaller and
midsized companies. In any event, one thing we can control is the type of
companies we want Heritage invested in: growing, successful companies with good
products and services.

[left margin]

"THE POSITIVE ENVIRONMENT FOR MID-CAP STOCKS HAS CONTINUED IN 1999, A SIGN THAT
GROWTH INVESTORS MAY BE FINDING IT HARDER AND HARDER TO OVERLOOK THE
TREMENDOUSLY ATTRACTIVE PRICES IN THE MID-CAP SPACE. WE HOPE THE PENDULUM
WILL CONTINUE TO MOVE TOWARD SMALLER AND MIDSIZED COMPANIES."

[pie charts - data below]

TYPES OF INVESTMENTS IN THE PORTFOLIO

AS OF APRIL 30, 1999
Temporary Cash Investments 1%
Convertible Bonds 6%
Convertible Preferred Stock 4%
Common Stocks 89%

AS OF OCTOBER 31, 1998
Temporary Cash Investments 3%
Convertible Bonds 1%
Common Stocks 96%

14 1-800-345-2021

Heritage--Schedule of Investments
- --------------------------------------------------------------------------------

APRIL 30, 1999 (UNAUDITED)

Shares ($ in Thousands) Value
- --------------------------------------------------------------------------------

COMMON STOCKS -- 88.3%

AEROSPACE & DEFENSE--1.6%
959,900 Bombardier Inc. Cl B ORD $ 14,854
--------------
BANKING -- 5.6%
47,100 Dexia France ORD 6,600
192,500 First Tennessee National Corp. 8,332
129,000 HUBCO, Inc. 4,571
134,600 Huntington Bancshares Inc. 4,761
164,100 Old Kent Financial Corp. 7,754
210,400 Toronto-Dominion Bank (The) ORD 11,215
157,100 Zions Bancorporation 10,482
--------------
53,715
--------------
BIOTECHNOLOGY -- 4.5%
821,900 Biomatrix, Inc.(1) 27,071
168,100 Immunex Corp.(1) 16,033
--------------
43,104
--------------
BROADCASTING & MEDIA -- 11.7%
145,100 Adelphia Communications
Corp. Cl A(1) 9,894
281,700 Comcast Corp. Cl A 17,721
148,800 Cox Communications, Inc. Cl A(1) 11,811
329,200 TV Guide, Inc. Cl A(1) 13,929
455,300 United International
Holdings, Inc. Cl A(1) 27,176
844,100 USA Networks Inc.(1) 31,548
--------------
112,079
--------------
BUSINESS SERVICES & SUPPLIES -- 3.0%
414,100 Metzler Group, Inc. (The)(1) 11,621
617,500 National Computer Systems, Inc. 17,348
--------------
28,969
--------------
CHEMICALS & RESINS -- 0.5%
61,500 Rohm and Haas Co. 2,756
40,000 Union Carbide Corp. 2,075
--------------
4,831
--------------
COMMUNICATIONS EQUIPMENT -- 2.8%
438,300 ADC Telecommunications, Inc.(1) 21,011
91,200 General Instrument Corp.(1) 3,329
11,700 QUALCOMM Inc.(1) 2,336
--------------
26,676
--------------

Shares ($ in Thousands) Value
- --------------------------------------------------------------------------------

COMPUTER SOFTWARE & SERVICES -- 4.5%
165,800 Adobe Systems Inc. $ 10,513
122,000 Comdisco, Inc. 3,210
219,400 Intuit Inc.(1) 18,882
331,900 Novell, Inc.(1) 7,374
101,000 PeopleSoft, Inc. 1,379
70,400 USWeb Corp.(1) 1,586
--------------
42,944
--------------
CONSTRUCTION & PROPERTY
DEVELOPMENT -- 5.0%
1,461,980 CRH plc ORD 28,673
310,500 Martin Marietta Materials, Inc. 19,193
--------------
47,866
--------------
CONSUMER PRODUCTS -- 0.3%
235,400 Stride Rite Corp. (The) 2,751
--------------
CONTROL & MEASUREMENT -- 1.3%
419,200 Millipore Corp. 12,864
--------------
ELECTRICAL & ELECTRONIC
COMPONENTS -- 4.1%
110,200 Altera Corp.(1) 7,976
191,900 Analog Devices, Inc.(1) 6,740
55,400 Flextronics International Ltd. ADR(1) 2,576
80,700 PMC-Sierra, Inc.(1) 7,742
134,000 Vitesse Semiconductor Corp.(1) 6,235
173,200 Xilinx, Inc.(1) 7,924
--------------
39,193
--------------
ENERGY (PRODUCTION & MARKETING) -- 4.2%
796,000 Alberta Energy Co. Ltd. ORD 23,436
210,600 Burlington Resources Inc. 9,701
199,000 Sunoco, Inc. 7,114
--------------
40,251
--------------
ENERGY (SERVICES) -- 2.0%
299,700 Schlumberger Ltd. 19,143
--------------
FINANCIAL SERVICES -- 5.1%
147,000 Donaldson, Lufkin & Jenrette, Inc. 10,281
4,425 Julius Baer Holding AG ORD 14,411
228,900 Kansas City Southern Industries, Inc. 13,634
395,500 MBNA Corp. 11,148
--------------
49,474
--------------
FOOD & BEVERAGE -- 0.3%
181,600 Whitman Corp. 2,974
--------------
HEALTHCARE -- 1.7%
220,300 Bausch & Lomb Inc. Cl A 16,523
--------------
HOTELS -- 0.5%
116,800 Four Seasons Hotels Inc.(1) 4,876
--------------

See Notes to Financial Statements

www.americancentury.com 15

Heritage--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)

APRIL 30, 1999 (UNAUDITED)

Shares ($ in Thousands) Value
- --------------------------------------------------------------------------------

INSURANCE -- 2.4%

294,300 AFLAC Inc. $ 15,966

248,450 Reinsurance Group of
America, Inc. Cl A(2) 7,516
--------------
23,482
--------------
LEISURE -- 9.1%

525,700 Callaway Golf Co. 7,918
576,000 Gemstar International Group Ltd.(1) 60,604
324,000 Harley-Davidson, Inc. 19,319
--------------
87,841
--------------
MACHINERY & EQUIPMENT -- 0.4%
40,300 Cooper Industries, Inc. 1,950
61,800 Snap-on Inc. 2,012
--------------
3,962
--------------
METALS & MINING -- 1.3%
437,100 Stillwater Mining Co.(1) 12,375
--------------
OFFICE EQUIPMENT & SUPPLIES -- 0.6%
83,700 Avery Dennison Corp. 5,713
--------------
PHARMACEUTICALS -- 1.9%
252,083 ALPHARMA INC. 7,436
225,100 Forest Laboratories, Inc.(1) 10,017
40,800 Mylan Laboratories Inc. 926
--------------
18,379
--------------
PRINTING & PUBLISHING -- 0.6%
125,000 Hollinger International Inc. 1,758
121,200 Ziff-Davis Inc. -- ZDNet(1) 4,272
--------------
6,030
--------------
RAILROAD -- 1.9%
296,700 Union Pacific Corp. 17,802
--------------
RETAIL (APPAREL) -- 1.2%
56,000 Abercrombie & Fitch Co. Cl A(1) 5,327
119,000 Intimate Brands, Inc. 5,950
--------------
11,277
--------------
RETAIL (FOOD & DRUG) -- 0.6%

519,600 Food Lion, Inc. Cl A 5,342
--------------
RETAIL (GENERAL MERCHANDISE) -- 0.7%

278,300 Family Dollar Stores, Inc. 6,714
--------------
RETAIL (SPECIALTY) -- 2.5%
167,200 Best Buy Co., Inc.(1) 7,984
60,000 Circuit City Stores--Circuit
City Group 3,690
355,350 Hasbro, Inc. 12,126
--------------
23,800
--------------
STEEL -- 0.6%
97,000 Nucor Corp. 5,693
--------------

Shares/Principal Amount ($ in Thousands) Value
- --------------------------------------------------------------------------------

TELEPHONE COMMUNICATIONS -- 0.8%
113,100 Global TeleSystems Group, Inc.(1) $ 7,472
--------------
UTILITIES -- 4.5%
575,600 Montana Power Co. 42,918
--------------
WIRELESS COMMUNICATIONS -- 0.5%
119,900 Sprint PCS(1) 5,081
--------------
TOTAL COMMON STOCKS 846,968
--------------
(Cost $629,456)

PREFERRED STOCK-0.2%

COMPUTER SOFTWARE & SERVICES
48,000 SAP AG ADR 1,506
--------------
(Cost $1,480)

CONVERTIBLE PREFERRED STOCKS-4.1%

BROADCASTING & MEDIA -- 1.0%
50,000 Adelphia Communications
Corp., Series D, 5.50% 10,188
--------------
COMMUNICATIONS EQUIPMENT -- 0.5%
33,000 QUALCOMM Inc., 5.75% 4,719
--------------
LEISURE -- 2.3%
343,000 Premier Parks Inc., 7.50% 21,781
--------------
TELEPHONE COMMUNICATIONS -- 0.3%
55,800 Globalstar Telecommunications
Limited, 8.00% 2,853
--------------
TOTAL CONVERTIBLE PREFERRED STOCKS 39,541
--------------
(Cost $35,129)

CONVERTIBLE BONDS-6.3%

BIOTECHNOLOGY -- 1.9%
$17,665 Centocor, Inc., 4.75%, 2/15/05 18,879
--------------
COMPUTER SOFTWARE & SERVICES -- 1.0%
24,600 Citrix Systems, Inc., 5.17%,
3/22/19 (Acquired 3/16/99-
4/26/99, Cost $8,902)(3)(4) 9,410
--------------
TELEPHONE COMMUNICATIONS -- 3.4%
24,300 Global Telesystems
Group, Inc., 5.75%, 7/1/10 32,258
--------------
TOTAL CONVERTIBLE BONDS 60,547
--------------
(Cost $58,129)

See Notes to Financial Statements

16 1-800-345-2021

Heritage--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)

APRIL 30, 1998 (UNAUDITED)

($ in Thousands) Value
- --------------------------------------------------------------------------------

TEMPORARY CASH INVESTMENTS-1.1%

Repurchase Agreement, Morgan Stanley
Group, Inc., (U.S. Treasury obligations), in
a joint trading account at 4.84%, dated
4/30/99, due 5/3/99 (Delivery value
$10,504) $ 10,500
--------------
(Cost $10,500)

TOTAL INVESTMENT SECURITIES-100.0% $ 959,062
==============
(Cost $734,694)

FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS

Contracts Settlement Unrealized
to Sell Date Value Gain
- ----------------------------------------------------------------
10,732,837 CHF 5/28/99 $ 7,059 $ 22
3,559,137 EURO 5/28/99 3,770 82
--------- ------
$10,829 $104
========= ======
(Value on Settlement Date $10,933)

NOTES TO SCHEDULE OF INVESTMENTS

ADR = American Depositary Receipt
CHF = Swiss Franc
ORD = Foreign Ordinary Share

(1) Non-income producing.

(2) Affiliated Company: represents ownership of at least 5% of the voting
securities of the issuer and is, therefore, an affiliate as defined in the
Investment Company Act of 1940. (See Note 5 in Notes to Financial Statements for
a summary of transactions for each issuer which is or was an affiliate at or
during the six months ended April 30, 1999.)

(3) Security was purchased under Rule 144A of the Securities Act of 1933 or is a
private placement and, unless registered under the Act or exempted from
registration, may only be sold to qualified institutional investors. The
aggregate value of restricted securities at April 30, 1999 was $9,410, which
represented 1.0% of net assets.

(4) Zero-coupon bond. The yield to maturity at purchase is indicated.
Zero-coupon bonds are purchased at a substantial discount from their value at
maturity.

- --------------------------------------------------------------------------------
UNDERSTANDING THE SCHEDULE OF INVESTMENTS--This schedule shows you which
investments your fund owned on the last day of the reporting period.

The schedule includes:

* a list of each investment
* the number of shares of each stock or principal amount of each bond
* the market value of each investment
* the percentage of total investments in each industry
* the percent and dollar breakdown of each investment category

See Notes to Financial Statements

www.americancentury.com 17

Growth--Performance
- --------------------------------------------------------------------------------

<TABLE>
TOTAL RETURNS AS OF APRIL 30, 1999

INVESTOR CLASS ADVISOR CLASS INSTITUTIONAL CLASS
(INCEPTION 6/30/71)(1) (INCEPTION 6/4/97) (INCEPTION 6/16/97)

RUSSELL 1000 RUSSELL 1000 RUSSELL 1000
GROWTH GROWTH S&P 500 GROWTH GROWTH S&P 500 GROWTH GROWTH S&P 500
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
6 MONTHS(2) 24.79% 24.93% 22.31% 24.63% 24.93% 22.31% 24.97% 24.93% 22.31%
1 YEAR 24.48% 26.52% 21.80% 24.14% 26.52% 21.80% 24.79% 26.52% 21.80%
=========================================================================================================
AVERAGE ANNUAL RETURNS
=========================================================================================================
3 YEARS 26.78% 29.95% 29.04% -- -- -- -- -- --
5 YEARS 20.34% 28.32% 26.82% -- -- -- -- -- --
10 YEARS 17.30% 19.81% 18.77% -- -- -- -- -- --
LIFE OF FUND 19.08% N/A(3) 13.85% 31.48% 29.76(4) 29.59% 28.85% 29.76%(4) 25.93%
</TABLE>

(1) Although the fund's actual inception date was 10/31/58, this inception date
corresponds with the management company's implementation of its current
investment philosophy and practices.

(2) Returns for periods less than one year are not annualized.

(3) Benchmark began 1/1/79.

(4) Since 6/30/97, the date nearest the class's inception for which data are
available.

See pages 41-44 for information about share classes, the Russell 1000 Growth
Index, the S&P 500 Index, and returns.

[mountain chart - data below]

GROWTH OF $10,000 OVER 10 YEARS

Russell 1000
Growth Growth S&P 500
Date Value Value Value
4/30/89 $10,000 $10,000 $10,000
4/30/90 $11,499 $11,394 $11,044
4/30/91 $14,475 $14,036 $12,983
4/30/92 $17,383 $16,161 $14,807
4/30/93 $17,147 $16,872 $16,172
4/30/94 $19,554 $17,517 $17,034
4/30/95 $20,831 $20,954 $20,002
4/30/96 $24,228 $27,776 $26,028
4/30/97 $27,451 $33,904 $32,562
4/30/98 $39,666 $48,174 $45,915
4/30/99 $49,375 $60,950 $55,922

The graph at left shows the growth of a $10,000 investment in the fund over 10
years, while the chart below shows the fund's year-by-year performance. The
Russell 1000 Growth Index and the S&P 500 Index are provided for comparison in
each graph. Growth's total returns include operating expenses (such as
transaction costs and management fees) that reduce returns, while the total
returns of the indexes do not. The graphs are based on Investor Class shares
only; performance for other classes will vary due to differences in fee
structures (see the Total Returns table above). Past performance does not
guarantee future results. Investment return and principal value will fluctuate,
and redemption value may be more or less than original cost.

[bar chart - data below]

ONE-YEAR RETURNS OVER 10 YEARS (PERIODS ENDING APRIL 30)

Growth Russell 1000 Growth S&P 500
Date Return Return Return
4/30/90 14.99% 13.94% 10.44%
4/30/91 25.88% 23.19% 17.56%
4/30/92 20.09% 15.14% 14.05%
4/30/93 -1.36% 4.40% 9.22%
4/30/94 14.04% 3.82% 5.33%
4/30/95 6.53% 19.62% 17.42%
4/30/96 16.31% 32.56% 30.13%
4/30/97 13.30% 22.06% 25.10%
4/30/98 44.50% 42.09% 41.01%
4/30/99 24.48% 26.52% 21.80%

18 1-800-345-2021

Growth--Q&A
- --------------------------------------------------------------------------------

[picture of Greg Woodhams and C. Kim Goodwin]

Greg Woodhams and C. Kim Goodwin, portfolio managers on the Growth investment
team

An interview with C. Kim Goodwin and Greg Woodhams, portfolio managers on
the Growth investment team.

HOW DID GROWTH PERFORM DURING THE FIRST HALF OF ITS FISCAL YEAR?*

Growth posted a healthy 24.79% return during the six months ended April 30,
1999, nearly matching the 24.93% gain of its benchmark, the Russell 1000 Growth
Index. These returns reflect the continued strong performance of larger growth
stocks, nurtured by strong domestic economy, low inflation, low interest rates,
and healthy consumer spending patterns.

While Growth's performance was noteworthy, it becomes more pronounced when
viewed in the context of the overall stock market results for the period. The
Standard & Poor's 500 Index, considered representative of the broad market, has
experienced very strong gains over the past several years. The S&P 500 was up
22.31% for the six-month period.

According to Lipper Inc., Growth continued to outpace most of its peers for
the six months and finished in the top 25% of growth funds for the 12-month
period ending April 30.(+)

WHAT FACTORS HELPED THE FUND ACHIEVE THESE RESULTS?

Growth's performance was enhanced by the concentrated nature of the
portfolio. We adhered closely to our core investment strategy of searching for
large-cap stocks that have demonstrated an ability to sustain accelerating
earnings and revenue growth. As part of this strategy, we devote a considerable
amount of research and analysis to developing a list of high-confidence stocks
we think will demonstrate the best earnings acceleration and sustainability.
Growth establishes substantial positions in companies that we know and
understand very well--the key to our earnings-growth investment strategy. Our
largest holdings are those in which we have the highest confidence. During the
first half of the fiscal year, the portfolio was heavily weighted toward these
ideas. Growth's 10 largest positions accounted for approximately 31% of the
portfolio.

Among the portfolio's holdings were some of the most successful stocks
among media, telecommunications, healthcare, and technology companies. In
general, the fund's focused positions in these sectors helped it outperform the
broad market and its benchmark index. In other words, we owned the best-
performing stocks in the right sectors of the market and the level of
concentration in these sectors contributed significantly to the fund's success.

WHICH INDUSTRIES OR SECTORS CONTRIBUTED THE MOST TO RETURNS?

Many of the high-confidence positions we have identified over the past
several months were among the best performing in the Growth portfolio.

* All fund returns referenced in this interview are for Investor Class shares.

(+) For the one-year ending 4/30/99, Growth ranked 212 out of 1035 growth funds
ranked by Lipper. For the five- and 10-years ending 4/30/99, Lipper ranked
Growth 248 out of 391 funds and 65 out of 171 funds, respectively.

[right margin]

"GROWTH ESTABLISHES SUBSTANTIAL POSITIONS IN COMPANIES THAT WE KNOW AND
UNDERSTAND VERY WELL--THE KEY TO OUR EARNINGS-GROWTH INVESTMENT STRATEGY."

PORTFOLIO AT A GLANCE
4/30/99 10/31/98
NO. OF COMPANIES 61 53
MEDIAN P/E RATIO 39.1 34.9
MEDIAN MARKET $44.6 $32.2
CAPITALIZATION BILLION BILLION
PORTFOLIO TURNOVER 48%(1) 126%(2)
EXPENSE RATIO (FOR
INVESTOR CLASS) 1.00%(3) 1.00%

(1) Six months ended 4/30/99.
(2) Year ended 10/31/98.
(3) Annualized.

Investment terms are defined in the Glossary on pages 43-44.

www.americancentury.com 19

Growth--Q&A
- --------------------------------------------------------------------------------
(Continued)

Technology-oriented stocks, including computer software, communications
equipment, and electronic components, were among the top contributors. Core
holding Microsoft was one of the best- performing stocks in the portfolio once
again. The world's largest software company is a leader in its industry and has
demonstrated solid performance and earnings power across its diverse product
lines. Demand is strong for its Office Suite software even as the company
prepares to issue an upgrade. Migration to its Windows NT Workstation is
advancing and Microsoft is benefiting from strength in its server applications.

Telecommunications and communications equipment also were among the
best-performing industries in the portfolio. We focused on companies with strong
data and wireless capabilities and limited exposure to regulatory risks. We
established significant positions in telecommunications companies like MCI
WorldCom, Sprint Corp., and AirTouch Communications.

In addition to its telephone operations, MCI WorldCom is gaining
recognition as a major force in the data communications business. The nation's
second-largest long distance telephone company has seamlessly integrated its
1998 acquisition of MCI to become a fully integrated communications company. MCI
WorldCom continues to focus on enhancing its core telephone, Internet,
information technology, and international business services.

Sprint reported record earnings and revenues in 1998, and is building on
its strategy of offering expanded broadband services, high-speed Internet
access, and video conferencing. In addition to its core wireline
telecommunications operations, Sprint continues to develop its advanced Sprint
ION service (Integrated On-Demand Network) and other communications ventures.

The world's largest Internet service provider, America Online (AOL) was
also one of Growth's largest holdings and top contributors to performance during
the period. AOL, with a 60% market share, is making progress in developing
additional revenue sources, including advertising and E-commerce. In addition,
AOL has acquired a Web-enhanced TV company and plans to launch AOL TV, which
allows users to bookmark their favorite channels, access information and
merchandise, and chat with other users. During the one-year period ended in
April, the price of AOL stock increased more than 400%.

Other large holdings that performed well include Tyco International,
Wal-Mart Stores Inc., Cisco Systems, and Clear Channel Communications.

WHICH INDUSTRIES OR STOCKS DID NOT DO AS WELL AS YOU HAD EXPECTED?

Although the Growth portfolio was very well-positioned and owned many of
the "right" stocks in the "right" industry groups, there were some
disappointments.

Tobacco stocks and companies in the food and beverage industry failed to
keep pace with many of the rapidly growing companies in the portfolio. We had
been reducing holdings in tobacco stocks, and sold our remaining interest in
Philip Morris after a period of lackluster performance. A series of legal
setbacks and precedent-setting unfavorable rulings resulted in a loss of
earnings power for the tobacco industry.

The revenue trend in some food and beverage stocks was below expectations
as well. The growth rates for companies such as Hershey Foods and ConAgra have
been slowing. Consequently, we have avoided or reduced exposure to food and
beverage stocks.

[left margin]

TOP TEN HOLDINGS
% OF FUND INVESTMENTS
AS OF AS OF
4/30/99 10/31/98
MICROSOFT CORP. 4.4% 3.3%
CISCO SYSTEMS INC. 3.6% 1.9%
WAL-MART STORES, INC. 3.4% 3.5%
TYCO INTERNATIONAL LTD. 3.4% 3.9%
AIRTOUCH
COMMUNICATIONS,
INC. 3.1% 3.0%
SCHERING-PLOUGH CORP. 2.9% 3.5%
EMC CORP. (MASS.) 2.7% 2.9%
GENERAL ELECTRIC CO.
(U.S.) 2.6% 3.1%
AMERICA ONLINE INC. 2.5% --
CITIGROUP INC. 2.5% --

TOP FIVE INDUSTRIES
% OF FUND INVESTMENTS
AS OF AS OF
4/30/99 10/31/98
PHARMACEUTICALS 11.8% 17.7%
COMPUTER SOFTWARE
& SERVICES 10.9% 6.3%
ELECTRICAL & ELECTRONIC
COMPONENTS 6.6% 3.2%
COMPUTER PERIPHERALS 6.3% 2.9%
DIVERSIFIED COMPANIES 6.0% 7.1%

20 1-800-345-2021

Growth--Q&A
- --------------------------------------------------------------------------------
(Continued)

Hershey Foods, for example, experienced sluggish sales growth and its
earnings have suffered. However, Hershey continues to gain market share in the
confectionery category and its underlying fundamentals remain favorable.

We also reduced our weighting in pharmaceutical company stocks, which had
previously been one area of concentration in the portfolio. The industry's
overall growth lost momentum after strong advances last year when there were
significant new product introductions. Thus, the fund's pharmaceutical weighting
has been reduced to 12% from 18% six months ago. Only Schering-Plough Corp.
remains among the fund's 10 largest holdings. We will continue to own drug
companies with healthy product pipelines and limited exposure to generic
competition.

DID YOU MAKE ANY OTHER SIGNIFICANT CHANGES IN THE PORTFOLIO DURING THE SIX
MONTHS?

We enlarged our investments in the financial services industry. The global
economy is starting to show improvement, especially in Japan and Latin America,
following the economic and financial crises that started nearly two years ago.
Earnings growth among financial services companies is regaining vitality in view
of global economic recovery and the constructive interest rate environment. The
financial services sector is now one of the most heavily emphasized in the
portfolio.

We have built a position in Citigroup, a leader in the global financial
services industry. The stronger economic climate and ample available cash and
liquid assets within the financial system should prove beneficial to earnings.
Citigroup's fundamentals and credit quality have improved in recent months. We
feel the interest rate environment and improving economic conditions are
favorable to financial services companies with a global franchise.

LOOKING AHEAD, WHAT ARE YOUR PLANS FOR GROWTH?

Our research-intensive bottom-up approach has worked well for our
shareholders. Strengthening global economic growth has prompted considerable
discussion about a possible rotation in the equity markets toward more cyclical
and undervalued stocks. In recent months, the market has elevated some stocks
that have been out of favor. Some of these stocks may have favorable long-term
prospects, but many of them do not. We will continue to focus on those companies
with the best earnings acceleration and sustainability.

Investment trends come and go. We believe that our investment style is
well-suited for most market conditions and we will stick to our discipline
regardless of short-term market trends. Our investors expect as much, and we
believe this is the best approach for generating long-term investment success.

[right margin]

"INVESTMENT TRENDS COME AND GO. WE BELIEVE THAT OUR INVESTMENT STYLE IS
WELL-SUITED FOR MOST MARKET CONDITIONS AND WE WILL STICK TO OUR DISCIPLINE
REGARDLESS OF SHORT-TERM MARKET TRENDS."

[pie charts - data below]

TYPES OF INVESTMENTS IN THE PORTFOLIO

AS OF APRIL 30, 1999
Temporary Cash Investments 8%
Common Stocks 92%

AS OF OCTOBER 31, 1998
Preferred Stocks 2%
Temporary Cash Investments 6%
Common Stocks 92%

www.americancentury.com 21

Growth--Schedule of Investments
- --------------------------------------------------------------------------------

APRIL 30, 1999 (UNAUDITED)

Shares ($ in Thousands) Value
- --------------------------------------------------------------------------------

COMMON STOCKS -- 92.5%

AEROSPACE & DEFENSE--1.6%
898,000 United Technologies Corp. $ 130,098
--------------
BANKING -- 5.3%
1,430,500 Chase Manhattan Corp. 118,374
2,638,000 Citigroup Inc. 198,509
795,300 Fifth Third Bancorp 56,988
412,000 Northern Trust Corp. 38,290
211,900 SouthTrust Corp. 8,443
--------------
420,604
--------------
BIOTECHNOLOGY -- 1.2%
1,043,000 Biogen, Inc.(1) 99,183
--------------
BROADCASTING & MEDIA -- 5.5%

2,696,000 CBS Corporation(1) 122,836
2,817,800 Clear Channel Communications, Inc.(1) 195,837
2,396,000 Fox Entertainment Group, Inc. Cl A(1) 61,398
2,074,000 Infinity Broadcasting Corp. Cl A(1) 57,424
--------------
437,495
--------------
BUSINESS SERVICES & SUPPLIES -- 0.3%
583,100 Ceridian Corp.(1) 21,356
--------------
COMMUNICATIONS EQUIPMENT -- 2.1%
2,802,000 Lucent Technologies Inc. 168,470
--------------
COMPUTER PERIPHERALS -- 6.3%
2,535,250 Cisco Systems Inc.(1) 289,256
1,972,000 EMC Corp. (Mass.)(1) 214,825
--------------
504,081
--------------
COMPUTER SOFTWARE & SERVICES -- 10.9%
1,420,000 America Online Inc. 202,705
612,900 At Home Corp. Series A(1) 88,238
2,696,000 First Data Corp. 114,412
4,360,000 Microsoft Corp.(1) 354,386
3,409,400 Unisys Corp.(1) 107,183
--------------
866,924
--------------
COMPUTER SYSTEMS -- 1.1%
433,000 International Business Machines Corp. 90,578
--------------
CONSUMER PRODUCTS -- 2.4%
652,000 Gillette Company 34,026
1,681,000 Procter & Gamble Co. (The) 157,699
--------------
191,725
--------------
DIVERSIFIED COMPANIES -- 6.0%
2,003,000 General Electric Co. (U.S.) 211,317
3,294,724 Tyco International Ltd. 267,696
--------------
479,013
--------------

Shares ($ in Thousands) Value
- --------------------------------------------------------------------------------

ELECTRICAL & ELECTRONIC
COMPONENTS -- 6.6%
1,995,000 Intel Corp. $ 122,007
1,232,000 Solectron Corp.(1) 59,752
1,441,000 Texas Instruments Inc. 147,162
874,000 Uniphase Corp.(1) 105,918
2,044,600 Xilinx, Inc.(1) 93,540
--------------
528,379
--------------
ENERGY (PRODUCTION & MARKETING) -- 1.1%
413,580 BP Amoco Plc ADR 46,812
525,000 Exxon Corp. 43,608
--------------
90,420
--------------
FINANCIAL SERVICES -- 5.7%
829,000 Capital One Financial Corp. 143,987
721,000 Fannie Mae 51,146
1,160,000 Providian Financial Corp. 149,713
1,004,000 Schwab (Charles) Corp. 110,189
--------------
455,035
--------------
FOOD & BEVERAGE -- 3.3%
3,745,700 Coca-Cola Enterprises, Inc. 129,227
258,000 Groupe Danone ORD 69,034
1,672,500 PepsiCo, Inc. 61,778
--------------
260,039
--------------
INDUSTRIAL EQUIPMENT & MACHINERY -- 1.2%
720,060 Mannesmann AG ORD 94,887
--------------
INSURANCE -- 1.7%
1,178,500 American International Group, Inc. 138,400
--------------
MACHINERY & EQUIPMENT -- 0.7%
1,018,400 Applied Materials, Inc.(1) 54,580
--------------
MEDICAL EQUIPMENT & SUPPLIES -- 2.0%
2,208,000 Guidant Corp. 118,542
598,000 Medtronic, Inc. 43,019
--------------
161,561
--------------
PHARMACEUTICALS -- 11.8%
1,316,000 American Home Products Corp. 80,276
1,421,000 Bristol-Myers Squibb Co. 90,322
3,150,000 Glaxo Wellcome plc ORD 93,113
1,422,200 Pfizer, Inc. 163,642
2,472,000 Pharmacia & Upjohn Inc. 138,432
4,794,000 Schering-Plough Corp. 231,610
2,128,000 Warner-Lambert Co. 144,571
--------------
941,966
--------------
RESTAURANTS -- 0.5%
870,000 McDonald's Corp. 36,866
--------------

See Notes to Financial Statements

22 1-800-345-2021

Growth--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)

APRIL 30, 1999 (UNAUDITED)

Shares ($ in Thousands) Value
- --------------------------------------------------------------------------------

RETAIL (FOOD & DRUG) -- 1.8%
899,800 CVS Corp. $ 42,853
1,906,000 Safeway Inc.(1) 102,805
--------------
145,658
--------------
RETAIL (GENERAL MERCHANDISE) -- 3.4%
5,931,000 Wal-Mart Stores, Inc. 272,826
--------------
RETAIL (INTERNET) -- 0.4%
150,100 eBay Inc.(1) 31,230
--------------
RETAIL (SPECIALTY) -- 1.9%
2,455,000 Home Depot, Inc. 147,147
--------------
TELEPHONE COMMUNICATIONS -- 4.6%
1,570,000 ALLTEL Corp. 105,877
1,415,000 MCI WorldCom, Inc.(1) 116,251
1,379,000 Sprint Corp. 141,434
--------------
363,562
--------------
WIRELESS COMMUNICATIONS -- 3.1%
2,689,000 AirTouch Communications, Inc.(1) 251,085
--------------
TOTAL COMMON STOCKS 7,383,168
--------------
(Cost $5,135,991)

Principal Amount ($ in Thousands) Value
- -------------------------------------------------------------------------------

TEMPORARY CASH INVESTMENTS - 7.5%

$186,000 FHLB Discount Notes,
4.80%, 5/3/99(2) $ 186,000
Repurchase Agreement, Goldman Sachs & Co.,
Inc., (U.S. Treasury obligations), in a joint trading
account at 4.84%, dated 4/30/99, due 5/3/99
(Delivery value $16,807) 16,800

Repurchase Agreement, Merrill Lynch & Co., Inc.,
(U.S. Treasury obligations), in a joint trading
account at 4.80%, dated 4/30/99, due 5/3/99
(Delivery value $99,140) 99,100

Repurchase Agreement, State Street Boston
Corp., (U.S. Treasury obligations), in a joint
trading account at 4.82%, dated 4/30/99,
due 5/3/99 (Delivery value $300,120) 300,000
--------------
TOTAL TEMPORARY CASH INVESTMENTS 601,900
--------------
(Cost $601,851)

TOTAL INVESTMENT SECURITIES-100.0% $7,985,068
==============
(Cost $5,737,842)

FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS

($ in Thousands)

Contracts Settlement Unrealized
to Sell Date Value Gain
- -------------------------------------------------------------------------------
66,404,500 EURO 5/28/99 $70,341 $418
========== =========
(Value on Settlement Date $70,759)

FUTURES CONTRACTS

($ in Thousands)

Expiration Underlying Face Unrealized
Purchased Date Amount at Value Gain
- -------------------------------------------------------------------------------

575 S&P 500 Futures June 1999 $192,122 $5,805
========== =========

NOTES TO SCHEDULE OF INVESTMENTS

ADR = American Depositary Receipt
FHLB = Federal Home Loan Bank
ORD = Foreign Ordinary Share
(1) Non-income producing.
(2) Rate indicated is the yield to maturity at purchase.

See Notes to Financial Statements

www.americancentury.com 23

Statements of Assets and Liabilities
- --------------------------------------------------------------------------------

<TABLE>
APRIL 30, 1999 (UNAUDITED)

SELECT HERITAGE GROWTH

ASSETS (In Thousands, Except Per-Share Amounts)
Investment securities --
unaffiliated, at value
(identified cost of
$5,270,353, $726,923 and
$5,737,842, respectively)
<S> <C> <C> <C>
(Note 3) .......................... $ 7,151,413 $ 951,546 $ 7,985,068
Investment securities --
affiliated, at value
(identified cost of
$7,771) (Note 5) .................. -- 7,516 --
Cash ................................. 2,536 1,925 --
Receivable for investments sold ...... 231,738 20,320 57,928
Receivable for forward
foreign currency exchange contracts -- 104 418
Dividends and interest receivable .... 5,735 1,156 3,207
Receivable for variation
margin on futures contracts ....... -- -- 10,385
--------------- ------------ ---------------
7,391,422 982,567 8,057,006
--------------- ------------ ---------------

LIABILITIES
Disbursements in excess
of demand deposit cash ............ -- -- 198,582
Payable for investments purchased .... 202,728 17,004 120,699
Payable for capital shares redeemed .. -- -- 11
Accrued management fees (Note 2) ..... 6,015 794 6,499
Distribution and service
fees payable (Note 2) ............. 2 1 4
Payable for directors'
fees and expenses (Note 2) ........ 6 1 7
Other liabilities .................... 2 1 6
--------------- ------------ ---------------
208,753 17,801 325,808
--------------- ------------ ---------------
Net Assets ........................... $ 7,182,669 $ 964,766 $ 7,731,198
=============== ============ ===============

NET ASSETS CONSIST OF:
Capital (par value
and paid in surplus) .............. $ 4,700,646 $ 691,835 $ 4,985,149
Undistributed net
investment income (loss) .......... (324) 169 (9,707)
Accumulated undistributed
net realized gain on investments
and foreign currency transactions . 601,336 48,291 502,332

Net unrealized appreciation
on investments and translation
of assets and liabilities
in foreign currencies (Note 3) .... 1,881,011 224,471 2,253,424
--------------- ------------ ---------------
$ 7,182,669 $ 964,766 $ 7,731,198
=============== ============ ===============

Investor Class, $0.01 Par Value
($ and shares in full)
Net assets ........................... $ 7,176,871,652 $963,734,746 $ 7,719,895,615
Shares outstanding ................... 139,061,235 79,146,527 266,851,927
Net asset value per share ............ $ 51.61 $ 12.18 $ 28.93

Advisor Class, $0.01 Par Value
($ and shares in full)
Net assets ........................... $ 5,474,795 $ 942,171 $ 9,864,142
Shares outstanding ................... 106,194 77,513 341,335
Net asset value per share ............ $ 51.55 $ 12.16 $ 28.90

Institutional Class, $0.01 Par
Value ($ and shares in full)
Net assets ........................... $ 322,232 $ 88,706 $ 1,437,817
Shares outstanding ................... 6,238 7,277 49,650
Net asset value per share ............ $ 51.66 $ 12.19 $ 28.96
</TABLE>

- --------------------------------------------------------------------------------
UNDERSTANDING THE STATEMENTS OF ASSETS AND LIABILITIES--This statement details
what the fund owns (assets), what it owes (liabilities), and its net assets as
of the last day of the period. If you subtract what the fund owes from what it
owns, you get the fund's net assets. For each class of shares, the net assets
divided by the total number of shares outstanding gives you the price of an
individual share, or the net asset value per share.

NET ASSETS are also broken down by capital (money invested by shareholders); net
investment income not yet paid to shareholders or net investment losses; net
gains earned on investments but not yet paid to shareholders or net losses on
investments (known as realized gains or losses); and finally, gains or losses on
securities still owned by the fund (known as unrealized appreciation or
depreciation). This breakdown tells you the value of net assets that are
performance-related, such as investment gains or losses, and the value of net
assets that are not related to performance, such as shareholder investments and
redemptions.

See Notes to Financial Statements

24 1-800-345-2021

Statements of Operations
- --------------------------------------------------------------------------------

<TABLE>
FOR THE SIX MONTHS ENDED APRIL 30, 1999 (UNAUDITED)

SELECT HERITAGE GROWTH

INVESTMENT INCOME (LOSS) (In Thousands)

Income:
Dividends (net of foreign
taxes withheld of
$14, $9, and $97,
respectively)
(includes $37 from
<S> <C> <C> <C>
affiliates for Heritage) ............. $ 32,147 $ 3,872 $ 20,878
Interest ................................ 3,729 1,205 8,111
----------- -------- -----------
35,876 5,077 28,989
----------- -------- -----------
Expenses: (Note 2)
Management fees ......................... 32,923 4,909 35,747
Distribution fees -- Advisor Class ...... 4 2 9
Service fees -- Advisor Class ........... 4 2 9
Directors' fees and expenses ............ 36 5 39
----------- -------- -----------
32,967 4,918 35,804
----------- -------- -----------
Net investment income (loss) ............ 2,909 159 (6,815)
----------- -------- -----------

REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCY (NOTE 3)
Net realized gain on:
Investments (includes $(367)
from affiliates for Heritage) ........ 692,738 55,766 523,548
Foreign currency transactions ........... -- 2,189 5,315
----------- -------- -----------
692,738 57,955 528,863
----------- -------- -----------
Change in net unrealized
appreciation on:
Investments ............................. 814,034 142,229 986,569
Translation of assets
and liabilities in
foreign currencies ................... (28) 48 366
----------- -------- -----------
814,006 142,277 986,935
----------- -------- -----------
Net realized and
unrealized gain on investments .......... 1,506,744 200,232 1,515,798
----------- -------- -----------
Net Increase in Net Assets
Resulting from Operations ............... $ 1,509,653 $200,391 $ 1,508,983
=========== ======== ===========
</TABLE>

- --------------------------------------------------------------------------------
UNDERSTANDING THE STATEMENT OF OPERATIONS--This statement breaks down how each
fund's net assets changed during the period as a result of the fund's
operations. It tells you how much money the fund made or lost after taking into
account income, fees and expenses, and investment gains or losses. It does not
include shareholder transactions and distributions.

Fund OPERATIONS include:
* income earned from investments (dividend and interest)
* management fees and other expenses
* gains or losses from selling investments (known as realized gains or losses)
* gains or losses on current fund holdings (known as unrealized appreciation or
depreciation)

See Notes to Financial Statements

www.americancentury.com 25

Statements of Changes in Net Assets
- --------------------------------------------------------------------------------

<TABLE>
SIX MONTHS ENDED APRIL 30, 1999 (UNAUDITED) AND YEAR ENDED OCTOBER 31, 1998

SELECT HERITAGE GROWTH
Increase (Decrease) in Net Assets
1999 1998 1999 1998 1999 1998

OPERATIONS (In Thousands)
<S> <C> <C> <C> <C> <C> <C>
Net investment income (loss) ................... $ 2,909 $ 13,526 $ 159 $ 3,622 $ (6,815) $ (1,257)
Net realized gain (loss)
on investments and
foreign currency
transactions .................................. 692,738 1,121,814 57,955 (10,562) 528,863 1,170,010
Change in net unrealized
appreciation on
investments and
translation of assets
and liabilities in
foreign currencies ........................... 814,006 (62,308) 142,277 (186,843) 986,935 (252,884)
----------- ----------- --------- ----------- ----------- -----------
Net increase (decrease) in
net assets resulting
from operations .............................. 1,509,653 1,073,032 200,391 (193,783) 1,508,983 915,869
----------- ----------- --------- ----------- ----------- -----------

DISTRIBUTIONS TO SHAREHOLDERS
From net investment income:
Investor Class ............................... (19,062) (19,490) (1,948) (6,440) -- --
Advisor Class ................................ (1) (4) (1) (1) -- --
Institutional Class .......................... (1) (65) (1) (1) -- --
From net realized gains
on investment transactions:
Investor Class ............................... (1,107,757) (783,150) -- (241,135) (1,171,235) (763,692)
Advisor Class ................................ (328) (208) -- (22) (1,110) (362)
Institutional Class .......................... (34) (1,889) -- (23) (36) (26)
----------- ----------- --------- ----------- ----------- -----------
Decrease in net assets
from distributions ........................... (1,127,183) (804,806) (1,950) (247,622) (1,172,381) (764,080)
----------- ----------- --------- ----------- ----------- -----------

CAPITAL SHARE TRANSACTIONS
(NOTE 4)
Net increase (decrease)
in net assets from
capital share transactions ................... 1,207,094 542,668 (212,935) 99,150 1,291,403 836,256
----------- ----------- --------- ----------- ----------- -----------
Net increase (decrease)
in net assets ................................ 1,589,564 810,894 (14,494) (342,255) 1,628,005 988,045

NET ASSETS
Beginning of period ............................ 5,593,105 4,782,211 979,260 1,321,515 6,103,193 5,115,148
----------- ----------- --------- ----------- ----------- -----------
End of period .................................. $ 7,182,669 $ 5,593,105 $ 964,766 $ 979,260 $ 7,731,198 $ 6,103,193
=========== =========== ========= =========== =========== ===========
Undistributed net
investment income (loss) ..................... $ (324) $ 15,831 $ 169 $ 1,960 $ (9,707) $ (27)
=========== =========== ========= =========== =========== ===========
</TABLE>

- --------------------------------------------------------------------------------
UNDERSTANDING THE STATEMENTS OF CHANGES IN NET ASSETS--These statements show how
each fund's net assets changed over the past two reporting periods. It details
how much a fund grew or shrank as a result of:

* operations -- a summary of the Statement of Operations from the previous page
for the most recent period

* distributions -- income and gains distributed to shareholders

* share transactions -- shareholders' purchases, reinvestments, and redemptions

Net assets at the beginning of the period plus the sum of operations,
distributions to shareholders and capital share transactions result in net
assets at the end of the period.

See Notes to Financial Statements

26 1-800-345-2021

Notes to Financial Statements
- --------------------------------------------------------------------------------

APRIL 30, 1999 (UNAUDITED)

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION -- American Century Mutual Funds, Inc. (the corporation) is
registered under the Investment Company Act of 1940 as an open-end diversified
management investment company. Select Fund (Select), Heritage Fund (Heritage),
and Growth Fund (Growth) (the funds) are three of the thirteen series of funds
issued by the corporation. The funds' investment objective is to seek capital
growth by investing primarily in equity securities. The funds are authorized to
issue three classes of shares: the Investor Class, the Advisor Class and the
Institutional Class. The three classes of shares differ principally in their
respective shareholder servicing and distribution expenses and arrangements. All
shares of each fund represent an equal pro rata interest in the assets of the
class to which such shares belong, and have identical voting, dividend,
liquidation and other rights and the same terms and conditions, except for class
specific expenses and exclusive rights to vote on matters affecting only
individual classes. The following significant accounting policies are in
accordance with generally accepted accounting principles; these principles may
require the use of estimates by fund management.

SECURITY VALUATIONS -- Portfolio securities traded primarily on a principal
securities exchange are valued at the last reported sales price, or the mean of
the latest bid and asked prices where no last sales price is available.
Securities traded over-the-counter are valued at the mean of the latest bid and
asked prices or, in the case of certain foreign securities, at the last reported
sales price, depending on local convention or regulation. Debt securities not
traded on a principal securities exchange are valued through a commercial
pricing service or at the mean of the most recent bid and asked prices. When
valuations are not readily available, securities are valued at fair value as
determined in accordance with procedures adopted by the Board of Directors.

SECURITY TRANSACTIONS -- Security transactions are accounted for as of the
trade date. Net realized gains and losses are determined on the identified cost
basis, which is also used for federal income tax purposes.

INVESTMENT INCOME -- Dividend income less foreign taxes withheld (if any)
is recorded as of the ex-dividend date. Interest income is recorded on the
accrual basis and includes accretion of discounts and amortization of premiums.

FUTURES CONTRACTS -- The funds may enter into stock index futures contracts
in order to manage the funds' exposure to changes in market conditions. One of
the risks of entering into futures contracts includes the possibility that the
change in value of the contract may not correlate with the changes in value of
the underlying securities. Upon entering into a futures contract, the fund is
required to deposit either cash or securities in an amount equal to a certain
percentage of the contract value (initial margin). Subsequent payments
(variation margin) are made or received daily, in cash, by the fund. The
variation margin is equal to the daily change in the contract value and is
recorded as unrealized gains and losses. The fund recognizes a realized gain or
loss when the contract is closed or expires. Net realized and unrealized gains
or losses occurring during the holding period of futures contracts are a
component of realized gain (loss) on investments and unrealized appreciation
(depreciation) on investments, respectively.

FOREIGN CURRENCY TRANSACTIONS -- All assets and liabilities initially
expressed in foreign currencies are translated into U.S. dollars at prevailing
exchange rates at period end. Purchases and sales of investment securities,
dividend and interest income, and certain expenses are translated at the rates
of exchange prevailing on the respective dates of such transactions. For assets
and liabilities, other than investments in securities, net realized and
unrealized gains and losses from foreign currency translations arise from
changes in currency exchange rates.

Net realized and unrealized foreign currency exchange gains or losses
occurring during the holding period of investment securities are a component of
realized gain (loss) on investments and unrealized appreciation (depreciation)
on investments, respectively.

FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS -- The funds may enter into
forward foreign currency exchange contracts to facilitate transactions of
securities denominated in a foreign currency or to hedge the Fund's exposure to
foreign currency exchange rate fluctuations. The net U.S. dollar value of
foreign currency underlying all contractual commitments held by the funds and
the resulting unrealized appreciation or depreciation are determined daily using
prevailing exchange rates. The funds bear the risk of an unfavorable change in
the foreign currency exchange rate underlying the forward contract.
Additionally, losses may arise if the counterparties do not perform under the
contract terms.

REPURCHASE AGREEMENTS -- The funds may enter into repurchase agreements
with institutions that the funds' investment manager, American Century
Investment Management, Inc. (ACIM), has determined are creditworthy pursuant to
criteria adopted by the Board of Directors. Each repurchase agreement is
recorded at cost. Each fund requires that the collateral,

www.americancentury.com 27

Notes to Financial Statements
- --------------------------------------------------------------------------------
(Continued)

APRIL 30, 1998 (UNAUDITED)

represented by securities, received in a repurchase transaction be transferred
to the custodian in a manner sufficient to enable each fund to obtain those
securities in the event of a default under the repurchase agreement. ACIM
monitors, on a daily basis, the securities transferred to ensure the value,
including accrued interest, of the securities under each repurchase agreement is
equal to or greater than amounts owed to each fund under each repurchase
agreement.

JOINT TRADING ACCOUNT -- Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, each fund, along with other registered
investment companies having management agreements with ACIM, may transfer
uninvested cash balances into a joint trading account. These balances are
invested in one or more repurchase agreements that are collateralized by U.S.
Treasury or Agency obligations.

INCOME TAX STATUS -- It is the funds' policy to distribute all net
investment income and net realized gains to shareholders and to otherwise
qualify as a regulated investment company under provisions of the Internal
Revenue Code. Accordingly, no provision has been made for federal or state
income taxes.

DISTRIBUTIONS TO SHAREHOLDERS -- Distributions to shareholders are recorded
on the ex-dividend date. Distributions from net investment income and net
realized gains are declared and paid annually.

The character of distributions made during the year from net investment
income or net realized gains may differ from their ultimate characterization for
federal income tax purposes. The differences reflect the differing character of
certain income items and net gains and losses for financial statement and tax
purposes and may result in reclassification among certain capital accounts.

ADDITIONAL INFORMATION -- Funds Distributor, Inc. (FDI) is the corporation's
distributor. Certain officers of FDI are also officers of the corporation.

- --------------------------------------------------------------------------------
2. TRANSACTIONS WITH RELATED PARTIES

The corporation has entered into a Management Agreement with ACIM that
provides the funds with investment advisory and management services in exchange
for a single, unified management fee per class. The Agreement provides that all
expenses of the funds, except brokerage commissions, taxes, interest, expenses
of those directors who are not considered "interested persons" as defined in the
Investment Company Act of 1940 (including counsel fees) and extraordinary
expenses, will be paid by ACIM. The fee is computed daily and paid monthly based
on each fund's class average daily closing net assets during the previous month.
The annual management fee for the Investor Class, Advisor Class and
Institutional Class is 1.00%, 0.75% and 0.80%, respectively, for each of the
funds.

The Board of Directors has adopted the Advisor Class Master Distribution
and Shareholder Services Plan (the plan), pursuant to Rule 12b-1 of the
Investment Company Act of 1940. The plan provides that the funds will pay ACIM
an annual distribution fee equal to 0.25% and service fee equal to 0.25%. The
fees are computed daily and paid monthly based on the Advisor Class's average
daily closing net assets during the previous month. The distribution fee
provides compensation for distribution expenses incurred by financial
intermediaries in connection with distributing shares of the Advisor Class
including, but not limited to, payments to brokers, dealers, and financial
institutions that have entered into sales agreements with respect to shares of
the funds. The service fee provides compensation for shareholder and
administrative services rendered by ACIM, its affiliates or independent third
party providers. Fees incurred under the plan for the six months ended April 30,
1999 were $8,961, $2,865 and $18,942 for Select, Heritage and Growth,
respectively.

Certain officers and directors of the corporation are also officers and/or
directors, and, as a group, controlling stockholders of American Century
Companies, Inc., the parent of the corporation's investment manager, ACIM, and
the corporation's transfer agent, American Century Services Corporation.

28 1-800-345-2021

Notes to Financial Statements
- --------------------------------------------------------------------------------
(Continued)

APRIL 30, 1999 (UNAUDITED)

3. INVESTMENT TRANSACTIONS

Investment transactions, excluding short-term investments, for the six months
ended April 30, 1999, were as follows:

SELECT HERITAGE GROWTH

(In Thousands)

Purchases ............................... $5,767,547 $667,957 $3,428,533

(In Thousands)
Proceeds from sales ..................... $5,499,115 $887,496 $3,303,815

On April 30, 1999, the composition of unrealized appreciation and
depreciation of investment securities based on the aggregate cost of investments
for federal income tax purposes was as follows:

SELECT HERITAGE GROWTH

(In Thousands)

Appreciation ............................ $1,867,833 $ 231,305 $2,280,190
Depreciation ............................ (63,969) (13,154) (52,417)
------------ ---------- -----------
Net ..................................... $ 1,803,864 $ 218,151 $2,227,773
============ ========== ===========
Federal Tax Cost ........................ $ 5,347,549 $ 740,911 $5,757,295
============ ========== ===========

- --------------------------------------------------------------------------------
4. CAPITAL SHARE TRANSACTIONS

<TABLE>
Transactions in shares of the funds were as follows:

SELECT HERITAGE GROWTH
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT

INVESTOR CLASS (In Thousands)
<S> <C> <C> <C> <C> <C> <C>
Shares authorized .......... 354,000 354,000 710,000
============ =========== ===========
Six months ended
April 30, 1999
Sold ....................... 15,741 $ 793,648 17,244 $189,815 34,523 $ 981,673
Issued in reinvestment
of distributions ......... 23,863 1,081,578 179 1,912 43,993 1,134,193

Redeemed ................... (13,399) (671,862) (36,319) (404,672) (29,193) (829,291)
------------ ---------- ----------- ---------- ----------- -----------
Net increase (decrease) .... 26,205 $1,203,364 (18,896) $(212,945) 49,323 $1,286,575
============ ========== =========== ========== =========== ===========

Year ended October 31, 1998

Sold ....................... 19,809 $ 946,893 31,645 $368,862 52,968 $1,467,285
Issued in reinvestment
of distributions ......... 18,613 773,188 21,904 240,789 31,652 740,696
Redeemed ................... (24,553) (1,165,999) (44,408) (511,235) (50,604) (1,375,210)
------------ ---------- ----------- ---------- ----------- -----------
Net increase .............. 13,869 $ 554,082 9,141 $ 98,416 34,016 $ 832,771
============ ========== =========== ========== =========== ===========

www.americancentury.com 29

Notes to Financial Statements
- --------------------------------------------------------------------------------
(Continued)

APRIL 30, 1999 (UNAUDITED)

- --------------------------------------------------------------------------------
4. CAPITAL SHARE TRANSACTIONS (CONTINUED)

SELECT HERITAGE GROWTH
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT

ADVISOR CLASS (In Thousands)

Shares authorized ......... 105,000 105,000 210,000
============ =========== ===========
Six months ended
April 30, 1999
Sold ...................... 80 $3,978 82 $926 119 $3,380
Issued in reinvestment
of distributions ........ 7 314 -- -- 42 1,088
Redeemed .................. (14) (708) (79) (920) (19) (537)
------------ ---------- ----------- ---------- ----------- -----------
Net increase .............. 73 $3,584 3 $ 6 142 $3,931
============ ========== =========== ========== =========== ===========
Year ended
October 31, 1998
Sold ...................... 17 $786 84 $950 120 $3,371
Issued in reinvestment
of distributions ........ 5 213 2 22 15 346
Redeemed .................. (16) (745) (19) (217) (16) (447)
------------ ---------- ----------- ---------- ----------- -----------
Net increase .............. 6 $254 67 $755 119 $3,270
============ ========== =========== ========== =========== ===========

INSTITUTIONAL CLASS (In Thousands)

Shares authorized ......... 41,000 41,000 80,000
============ =========== ===========
Six months ended
April 30, 1999
Sold ...................... 39 $1,833 2 $26 115 $3,110
Issued in reinvestment
of distributions ........ 1 35 -- -- 1 36
Redeemed .................. (37) (1,722) (2) (22) (83) (2,249)
------------ ---------- ----------- ---------- ----------- -----------
Net increase .............. 3 $ 146 0 $ 4 33 $ 897
============ ========== =========== ========== =========== ===========
Year ended
October 31, 1998
Sold ...................... 245 $12,081 -- -- 202 $5,257
Issued in reinvestment
of distributions ........ 47 1,953 2 $24 1 26
Redeemed .................. (527) (25,702) (4) (45) (192) (5,068)
------------ ---------- ----------- ---------- ----------- -----------
Net increase (decrease) ... (235) $(11,668) (2) $(21) 11 $ 215
============ ========== =========== ========== =========== ===========

- --------------------------------------------------------------------------------
5. AFFILIATED COMPANY TRANSACTIONS

A summary of transactions for each issuer which is or was an affiliate at or
during the six months ended April 30, 1999, follows:

April 30, 1999
Share
Balance Purchase Sales Realized Share Market
Fund/Issuer 10-31-98 Cost Cost Loss Income Balance Value

HERITAGE ($ In Thousands)

Reinsurance Group of
America, Inc. Cl A ...... 257,500 -- $4,608 $(367) $37 248,450 $7,516
========== ======== ========= ======== ========= ========= =========
</TABLE>

30 1-800-345-2021

Notes to Financial Statements
- --------------------------------------------------------------------------------
(Continued)

- --------------------------------------------------------------------------------
6. BANK LOANS

Effective December 18, 1998, the funds, along with certain other funds
managed by ACIM, entered into an unsecured $570,000,000 bank line of credit
agreement with Chase Manhattan Bank. Borrowings under the agreement bear
interest at the Federal Funds rate plus 0.40%. The funds may borrow money for
temporary or emergency purposes to fund shareholder redemptions. The funds did
not borrow from the line during the period December 18, 1998 through April 30,
1999.

- --------------------------------------------------------------------------------
7. FUND EVENTS

The following name changes became effective March, 1, 1999.

NEW NAME FORMER NAME

FUND: Select Fund American Century - Twentieth Century
Select Fund
FUND: Heritage Fund American Century - Twentieth Century
Heritage Fund
FUND: Growth Fund American Century - Twentieth Century
Growth Fund

www.americancentury.com 31

Select--Financial Highlights
- --------------------------------------------------------------------------------

<TABLE>
FOR A SHARE OUTSTANDING THROUGHOUT THE YEARS ENDED OCTOBER 31 (EXCEPT AS NOTED)

Investor Class
1999(1) 1998 1997 1996 1995 1994
PER-SHARE DATA
Net Asset Value,
<S> <C> <C> <C> <C> <C> <C>
Beginning of Period ...... $49.54 $48.18 $41.52 $39.52 $37.67 $45.76
------------ ---------- ----------- ---------- ----------- -----------
Income From
Investment Operations
Net Investment Income .... 0.02(2) 0.12(2) 0.15(2) 0.20(2) 0.33(2) 0.40
Net Realized and
Unrealized Gain
(Loss) on Investment
Transactions ........... 12.01 9.37 10.51 6.73 4.68 (3.59)
------------ ---------- ----------- ---------- ----------- -----------
Total From
Investment Operations .... 12.03 9.49 10.66 6.93 5.01 (3.19)
------------ ---------- ----------- ---------- ----------- -----------
Distributions
From Net
Investment Income ...... (0.17) (0.20) (0.32) (0.27) (0.28) (0.43)
From Net Realized
Gains on Investment
Transactions ........... (9.79) (7.93) (3.68) (4.66) (2.75) (4.47)
In Excess of Net
Realized Gains ......... -- -- -- -- (0.13) --
------------ ---------- ----------- ---------- ----------- -----------
Total Distributions ...... (9.96) (8.13) (4.00) (4.93) (3.16) (4.90)
------------ ---------- ----------- ---------- ----------- -----------
Net Asset Value,
End of Period ............ $51.61 $49.54 $48.18 $41.52 $39.52 $37.67
============ ========== =========== ========== =========== ===========
Total Return(3) ............ 27.01% 22.96% 27.89% 19.76% 15.02% (7.37)%

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating
Expenses to Average
Net Assets ................. 1.00%(4) 1.00% 1.00% 1.00% 1.00% 1.00%
Ratio of Net
Investment Income
to Average
Net Assets ................. 0.09%(4) 0.25% 0.33% 0.50% 0.90% 1.00%
Portfolio Turnover Rate .... 86% 165% 94% 105% 106% 126%
Net Assets,
End of Period
(in millions) ............ $7,177 $5,591 $4,769 $4,039 $4,008 $4,278
</TABLE>

(1) Six months ended April 30, 1999 (unaudited).

(2) Computed using average shares outstanding throughout the period.

(3) Total return assumes reinvestment of dividends and capital gains
distributions, if any. Total returns for periods less than one year are not
annualized.

(4) Annualized.

- --------------------------------------------------------------------------------
UNDERSTANDING THE FINANCIAL HIGHLIGHTS--These statements itemize current period
activity and statistics and provide comparison data for the last five fiscal
years (or less, if the class is not five years old).

On a per-share basis, it includes:

* share price at the beginning of the period

* investment income and capital gains or losses

* income and capital gains distributions paid to shareholders

* share price at the end of the period

It also includes some key statistics for the period:

* total return--the overall percentage return of the fund, assuming reinvestment
of all distributions

* expense ratio--operating expenses as a percentage of average net assets

* net income ratio--net investment income as a percentage of average net assets

* portfolio turnover--the percentage of the portfolio that was replaced during
the period

See Notes to Financial Statements

32 1-800-345-2021

Select--Financial Highlights
- --------------------------------------------------------------------------------

<TABLE>
FOR A SHARE OUTSTANDING THROUGHOUT THE YEARS ENDED OCTOBER 31 (EXCEPT AS NOTED)

Advisor Class

1999(1) 1998 1997(2)

PER-SHARE DATA
Net Asset Value,
<S> <C> <C> <C>
Beginning of Period ................ $ 49.44 $ 48.16 $ 49.43
--------- --------- ---------
Income From Investment Operations
Net Investment Loss(3) ............. (0.05) -- (0.02)
Net Realized and Unrealized
Gain (Loss) on
Investment Transactions .......... 11.99 9.37 (1.25)
--------- --------- ---------
Total From Investment Operations ... 11.94 9.37 (1.27)
--------- --------- ---------
Distributions
From Net Investment Income ......... (0.04) (0.16) --
From Net Realized Gains
on Investment Transactions ....... (9.79) (7.93) --
--------- --------- ---------
Total Distributions ................ (9.83) (8.09) --
--------- --------- ---------
Net Asset Value,
End of Period ...................... $ 51.55 $ 49.44 $ 48.16
========= ========= =========
Total Return(4) .................... 26.83% 22.67% (2.57)%

RATIOS/SUPPLEMENTAL DATA
Ratio of Operating
Expenses to Average Net Assets ..... 1.25%(5) 1.25% 1.25%(5)
Ratio of Net Investment
Loss to Average Net Assets ......... (0.16)%(5) -- (0.17)%(5)
Portfolio Turnover Rate .............. 86% 165% 94%
Net Assets, End of Period
(in thousands) ..................... $ 5,475 $ 1,617 $ 1,289
</TABLE>

(1) Six months ended April 30, 1999 (unaudited).

(2) August 8, 1997 (commencement of sale) through October 31, 1997.

(3) Computed using average shares outstanding throughout the period.

(4) Total return assumes reinvestment of dividends and capital gains
distributions, if any. Total returns for periods less than one year are not
annualized.

(5) Annualized.

See Notes to Financial Statements

www.americancentury.com 33

Select--Financial Highlights
- --------------------------------------------------------------------------------

<TABLE>
FOR A SHARE OUTSTANDING THROUGHOUT THE YEARS ENDED OCTOBER 31 (EXCEPT AS NOTED)

Institutional Class

1999(1) 1998 1997(2)

PER-SHARE DATA
Net Asset Value,
<S> <C> <C> <C>
Beginning of Period ............ $ 49.63 $ 48.24 $ 40.56
---------- ---------- ----------
Income From
Investment Operations
Net Investment Income(3) ....... 0.11 0.22 0.13
Net Realized and
Unrealized Gain on
Investment Transactions ...... 11.99 9.37 7.55
---------- ---------- ----------
Total From Investment
Operations ................... 12.10 9.59 7.68
---------- ---------- ----------
Distributions
From Net Investment Income ..... (0.28) (0.27) --
From Net Realized Gains
on Investment Transactions ... (9.79) (7.93) --
---------- ---------- ----------
Total Distributions ............ (10.07) (8.20) --
---------- ---------- ----------
Net Asset Value, End of Period ... $ 51.66 $ 49.63 $ 48.24
========== ========== ==========
Total Return(4) ................ 27.16% 23.22% 18.93%

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses
to Average Net Assets .......... 0.80%(5) 0.80% 0.80%(5)
Ratio of Net Investment
Income to Average Net Assets ... 0.29%(5) 0.45% 0.45%(5)
Portfolio Turnover Rate .......... 86% 165% 94%
Net Assets, End of Period
(in thousands) ................. $ 322 $ 173 $ 11,486
</TABLE>

(1) Six months ended April 30, 1999 (unaudited).

(2) March 13, 1997 (commencement of sale) through October 31, 1997.

(3) Computed using average shares outstanding throughout the period.

(4) Total return assumes reinvestment of dividends and capital gains
distributions, if any. Total returns for periods less than one year are not
annualized.

(5) Annualized.

See Notes to Financial Statements

34 1-800-345-2021

Heritage--Financial Highlights
- --------------------------------------------------------------------------------

<TABLE>
FOR A SHARE OUTSTANDING THROUGHOUT THE YEARS ENDED OCTOBER 31 (EXCEPT AS NOTED)

Investor Class

1999(1) 1998 1997 1996 1995 1994
PER-SHARE DATA
Net Asset Value,
<S> <C> <C> <C> <C> <C> <C>
Beginning of Period ........... $ 9.98 $ 14.86 $ 12.24 $ 11.75 $ 10.32 $ 11.03
--------- --------- --------- --------- --------- ---------
Income From
Investment Operations
Net Investment Income ......... --(2) 0.03(2) 0.01(2) --(2) 0.05(2) 0.07

Net Realized and
Unrealized Gain (Loss)
on Investment Transactions .... 2.22 (2.14) 3.41 1.15 1.96 (0.21)
--------- --------- --------- --------- --------- ---------
Total From
Investment Operations ....... 2.22 (2.11) 3.42 1.15 2.01 (0.14)
--------- --------- --------- --------- --------- ---------
Distributions
From Net Investment
Income ...................... (0.02) (0.07) (0.09) (0.05) (0.03) (0.06)
From Net Realized Gains
on Investment Transactions .. -- (2.70) (0.71) (0.61) (0.52) (0.50)
In Excess of Net
Realized Gains .............. -- -- -- -- (0.03) (0.01)
--------- --------- --------- --------- --------- ---------
Total Distributions ........... (0.02) (2.77) (0.80) (0.66) (0.58) (0.57)
--------- --------- --------- --------- --------- ---------
Net Asset Value,
End of Period ................. $ 12.18 $ 9.98 $ 14.86 $ 12.24 $ 11.75 $ 10.32
========= ========= ========= ========= ========= =========
Total Return(3) ............... 22.28% (15.87)% 29.56% 10.44% 21.04% (1.13)%

RATIOS/SUPPLEMENTAL DATA
Ratio of Operating
Expenses to Average
Net Assets .................... 1.00%(4) 1.00% 1.00% 0.99% 0.99% 1.00%
Ratio of Net Investment
Income to Average
Net Assets .................... 0.03%(4) 0.29% 0.05% -- 0.50% 0.70%
Portfolio Turnover Rate ......... 69% 148% 69% 122% 121% 136%
Net Assets,
End of Period
(in millions) ................. $ 964 $ 978 $ 1,321 $ 1,083 $ 1,008 $ 897
</TABLE>

(1) Six months ended April 30, 1999 (unaudited).

(2) Computed using average shares outstanding throughout the period.

(3) Total return assumes reinvestment of dividends and capital gains
distributions, if any. Total returns for periods less than one year are not
annualized.

(4) Annualized.

On a per-share basis, it includes:

* share price at the beginning of the period

* investment income and capital gains or losses

* income and capital gains distributions paid to shareholders

* share price at the end of the period

It also includes some key statistics for the period:

* total return--the overall percentage return of the fund, assuming reinvestment
of all distributions

* expense ratio--operating expenses as a percentage of average net assets

* net income ratio--net investment income as a percentage of average net assets

* portfolio turnover--the percentage of the portfolio that was replaced during
the period

See Notes to Financial Statements

www.americancentury.com 35

Heritage--Financial Highlights
- --------------------------------------------------------------------------------

FOR A SHARE OUTSTANDING THROUGHOUT THE YEARS ENDED OCTOBER 31 (EXCEPT AS NOTED)

Advisor Class

1999(1) 1998 1997(2)

PER-SHARE DATA
Net Asset Value,
Beginning of Period ........... $ 9.96 $ 14.85 $ 14.23
------- ------- -------
Income From Investment
Operations
Net Investment Income
(Loss)(3) ................... (0.01) 0.02 (0.01)
Net Realized and Unrealized
Gain (Loss) on Investment
Transactions ................ 2.22 (2.14) 0.63
------- ------- -------
Total From Investment
Operations .................. 2.21 (2.12) 0.62
------- ------- -------
Distributions
From Net Investment Income .... (0.01) (0.07) --
From Net Realized Gains
on Investment Transactions .. -- (2.70) --
------- ------- -------
Total Distributions ........... (0.01) (2.77) --
------- ------- -------
Net Asset Value,
End of Period ................. $ 12.16 $ 9.96 $ 14.85
======= ======= =======
Total Return(4) ............... 22.13% (16.03)% 4.36%

RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses
to Average Net Assets ......... 1.25%(5) 1.25% 1.25%(5)
Ratio of Net Investment
Income (Loss) to Average
Net Assets .................... (0.22)%(5) 0.04% (0.23)%(5)
Portfolio Turnover Rate ......... 69% 148% 69%
Net Assets, End of Period
(in thousands) ................ $ 942 $ 748 $ 120

(1) Six months ended April 30, 1999 (unaudited).

(2) July 11, 1997 (commencement of sale) through October 31, 1997.

(3) Computed using average shares outstanding throughout the period.

(4) Total return assumes reinvestment of dividends and capital gains
distributions, if any. Total returns for periods less than one year are not
annualized.

(5) Annualized.

See Notes to Financial Statements

36 1-800-345-2021

Heritage--Financial Highlights
- --------------------------------------------------------------------------------

FOR A SHARE OUTSTANDING THROUGHOUT THE YEARS ENDED OCTOBER 31 (EXCEPT AS NOTED)

Institutional Class

1999(1) 1998 1997(2)

PER-SHARE DATA

Net Asset Value,
Beginning of Period ................ $ 10.00 $ 14.87 $ 13.60
------- ------- -------
Income From Investment Operations
Net Investment Income(3) ........... 0.01 0.06 0.01
Net Realized and Unrealized
Gain (Loss) on Investment
Transactions ..................... 2.22 (2.14) 1.26
------- ------- -------
Total From Investment Operations ... 2.23 (2.08) 1.27
------- ------- -------
Distributions
From Net Investment Income ......... (0.04) (0.09) --

From Net Realized Gains
on Investment Transactions ....... -- (2.70) --
------- ------- -------
Total Distributions ................ (0.04) (2.79) --
------- ------- -------
Net Asset Value,
End of Period ...................... $ 12.19 $ 10.00 $ 14.87
======= ======= =======
Total Return(4) .................... 22.39% (15.67)% 9.34%

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses
to Average Net Assets .............. 0.80%(5) 0.80% 0.80%(5)
Ratio of Net Investment
Income to Average Net Assets ....... 0.23%(5) 0.49% 0.21%(5)
Portfolio Turnover Rate .............. 69% 148% 69%
Net Assets, End of Period
(in thousands) ..................... $ 89 $ 70 $ 129

(1) Six months ended April 30, 1999 (unaudited).

(2) June 16, 1997 (commencement of sale) through October 31, 1997.

(3) Computed using average shares outstanding throughout the period.

(4) Total return assumes reinvestment of dividends and capital gains
distributions, if any. Total returns for periods less than one year are not
annualized.

(5) Annualized.

See Notes to Financial Statements

www.americancentury.com 37

Growth--Financial Highlights
- --------------------------------------------------------------------------------

<TABLE>
FOR A SHARE OUTSTANDING THROUGHOUT THE YEARS ENDED OCTOBER 31 (EXCEPT AS NOTED)

Investor Class

1999(1) 1998 1997 1996 1995 1994

PER-SHARE DATA
Net Asset Value,
<S> <C> <C> <C> <C> <C> <C>
Beginning of Period ........... $ 28.03 $ 27.86 $ 22.21 $ 23.88 $ 22.99 $ 25.27
--------- --------- --------- --------- --------- ---------
Income From Investment
Operations
Net Investment
Income (Loss) ............... (0.03)(2) (0.01)(2) 0.01(2) (0.01)(2) 0.08(2) 0.06
Net Realized and
Unrealized Gain
on Investment Transactions .... 6.32 4.35 6.07 1.47 4.08 0.48
--------- --------- --------- --------- --------- ---------
Total From Investment
Operations .................. 6.29 4.34 6.08 1.46 4.16 0.54
--------- --------- --------- --------- --------- ---------
Distributions
From Net
Investment Income ........... -- -- (0.18) (0.07) (0.05) (0.06)
From Net Realized
Gains on Investment
Transactions ................ (5.39) (4.17) (0.25) (2.98) (3.18) (2.76)
In Excess of Net
Realized Gains .............. -- -- -- (0.08) (0.04) --
--------- --------- --------- --------- --------- ---------
Total Distributions ........... (5.39) (4.17) (0.43) (3.13) (3.27) (2.82)
--------- --------- --------- --------- --------- ---------
Net Asset Value,
End of Period ................. $ 28.93 $ 28.03 $ 27.86 $ 22.21 $ 23.88 $ 22.99
========= ========= ========= ========= ========= =========
Total Return(3) ............... 24.79% 18.53% 27.85% 8.18% 22.31% 2.66%

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating
Expenses to Average
Net Assets ...................... 1.00%(4) 1.00% 1.00% 1.00% 1.00% 1.00%
Ratio of Net Investment
Income to Average
Net Assets ...................... (0.20)%(4) (0.02)% 0.02% (0.10)% 0.40% 0.30%
Portfolio Turnover Rate ......... 48% 126% 75% 122% 141% 100%
Net Assets,
End of Period
(in millions) ................. $ 7,720 $ 6,097 $ 5,113 $ 4,765 $ 5,130 $ 4,363
</TABLE>

(1) Six months ended April 30, 1999 (unaudited).

(2) Computed using average shares outstanding throughout the period.

(3) Total return assumes reinvestment of dividends and capital gains
distributions, if any. Total returns for periods less than one year are not
annualized.

(4) Annualized.

On a per-share basis, it includes:
* share price at the beginning of the period
* investment income and capital gains or losses
* income and capital gains distributions paid to shareholders
* share price at the end of the period It

also includes some key statistics for the period:
* total return--the overall percentage return of the fund, assuming reinvestment
of all distributions
* expense ratio--operating expenses as a percentage of average net assets
* net income ratio--net investment income as a percentage of average net assets
* portfolio turnover--the percentage of the portfolio that was replaced during
the period

See Notes to Financial Statements
38 1-800-345-2021

Growth--Financial Highlights
- --------------------------------------------------------------------------------

<TABLE>
FOR A SHARE OUTSTANDING THROUGHOUT THE YEARS ENDED OCTOBER 31 (EXCEPT AS NOTED)

Advisor Class

1999(1) 1998 1997(2)
PER-SHARE DATA

Net Asset Value,
<S> <C> <C> <C>
Beginning of Period ................ $ 27.97 $ 27.84 $ 24.36
--------- --------- ---------
Income From Investment

Net Investment Loss(3) ............. (0.07) (0.08) (0.06)
Net Realized and Unrealized
Gain on Investment
Transactions ..................... 6.32 4.35 3.54
--------- --------- ---------
Total From Investment Operations ... 6.25 4.27 3.48
--------- --------- ---------
Distributions
From Net Realized Gains
on Investment Transactions ....... (5.32) (4.14) --
--------- --------- ---------
Net Asset Value, End of Period ....... $ 28.90 $ 27.97 $ 27.84
========= ========= =========

Total Return(4) .................... 24.63% 18.23% 14.29%

RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses
to Average Net Assets .............. 1.25%(5) 1.25% 1.25%(5)
Ratio of Net Investment
Loss to Average Net Assets ......... (0.45)%(5) (0.27)% (0.47)%(5)
Portfolio Turnover Rate .............. 48% 126% 75%
Net Assets, End of Period
(in thousands) ..................... $ 9,864 $ 5,520 $ 2,200
</TABLE>

(1) Six months ended April 30, 1999 (unaudited).

(2) June 4, 1997 (commencement of sale) through October 31, 1997.

(3) Computed using average shares outstanding throughout the period.

(4) Total return assumes reinvestment of dividends and capital gains
distributions, if any. Total returns for periods less than one year are not
annualized.

(5) Annualized.

See Notes to Financial Statements

www.americancentury.com 39

Growth--Financial Highlights
- --------------------------------------------------------------------------------

FOR A SHARE OUTSTANDING THROUGHOUT THE YEARS ENDED OCTOBER 31 (EXCEPT AS NOTED)

Institutional Class

1999(1) 1998 1997(2)
PER-SHARE DATA

Net Asset Value,
Beginning of Period ........... $ 28.08 $ 27.88 $ 25.75
--------- --------- ---------
Income From Investment Operations
Net Investment Income
(Loss)(3) ................... (0.01) 0.05 0.01
Net Realized and Unrealized
Gain on Investment
Transactions ................ 6.35 4.34 2.12
--------- --------- ---------
Total From Investment
Operations .................. 6.34 4.39 2.13
--------- --------- ---------
Distributions
From Net Realized Gains
on Investment
Transactions ................ (5.46) (4.19) --
--------- --------- ---------
Net Asset Value, End of Period .. $ 28.96 $ 28.08 $ 27.88
========= ========= =========
Total Return(4) ............... 24.97% 18.77% 8.27%

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses
to Average Net Assets ......... 0.80%(5) 0.80% 0.80%(5)
Ratio of Net Investment
Income to Average Net Assets .. --(6) 0.18% 0.07%(5)
Portfolio Turnover Rate ......... 48% 126% 75%
Net Assets, End of Period
(in thousands) ................ $ 1,438 $ 465 $ 171

(1) Six months ended April 30, 1999 (unaudited).

(2) June 16, 1997 (commencement of sale) through October 31, 1997.

(3) Computed using average shares outstanding throughout the period.

(4) Total return assumes reinvestment of dividends and capital gains
distributions, if any. Total returns for periods less than one year are not
annualized.

(5) Annualized.

(6) Annualized ratio is less than 0.005%.

See Notes to Financial Statements

40 1-800-345-2021

Share Class and Retirement Account Information
- --------------------------------------------------------------------------------

SHARE CLASSES

Three classes of shares are authorized for sale by the funds: Investor
Class, Advisor Class and Institutional Class.

INVESTOR CLASS shareholders do not pay any commissions or other fees for
purchase of fund shares directly from American Century. Investors who buy
Investor Class shares through a broker-dealer may be required to pay the
broker-dealer a transaction fee.

ADVISOR CLASS shares are sold through banks, broker-dealers, insurance
companies, and financial advisors. Advisor Class shares are subject to a 0.50%
Rule 12b-1 service and distribution fee. Half of that fee is available to pay
for recordkeeping and administrative services, and half is available to pay for
distribution services provided by the financial intermediary through which the
Advisor Class shares are purchased. The total expense ratio of the Advisor Class
shares is 0.25% higher than the total expense ratio of the Investor Class
shares.

INSTITUTIONAL CLASS shares are available to endowments, foundations,
defined benefit pension plans, or financial intermediaries serving these
investors. This class recognizes the relatively lower cost of serving
institutional customers and others who invest at least $5 million in an American
Century fund or at least $10 million in multiple funds. In recognition of the
larger investments and account balances and comparatively lower transaction
costs, the total expense ratio of the Institutional Class shares is 0.20% less
than the total expense ratio of the Investor Class shares.

All classes of shares represent a pro rata interest in the funds and
generally have the same rights and preferences.

RETIREMENT ACCOUNT INFORMATION

As required by law, any distributions you receive from an IRA and certain
403(b) distributions [not eligible for rollover to an IRA or to another 403(b)
account] are subject to federal income tax withholding at the rate of 10% of the
total amount withdrawn, unless you elect not to have withholding apply. If you
don't want us to withhold on this amount, you may send us a written notice not
to have the federal income tax withheld. Your written notice is valid from the
date of receipt at American Century. Even if you plan to roll over the amount
you withdraw to another tax-deferred account, the withholding rate still applies
to the withdrawn amount unless we have received a written notice not to withhold
federal income tax prior to the withdrawal.

When you plan to withdraw, you may make your election by completing our
Exchange/Redemption form or an IRS Form W-4P. Call American Century for either
form. Your written election is valid from the date of receipt at American
Century. You may revoke your election at any time by sending a written notice to
us.

Remember, even if you elect not to have income tax withheld, you are liable
for paying income tax on the taxable portion of your withdrawal. If you elect
not to have income tax withheld or you don't have enough income tax withheld,
you may be responsible for payment of estimated tax. You may incur penalties
under the estimated tax rules if your withholding and estimated tax payments are
not sufficient.

www.americancentury.com 41

Background Information
- --------------------------------------------------------------------------------

INVESTMENT PHILOSOPHY AND POLICIES

American Century offers 13 growth funds including domestic equity, specialty,
international, and global. The philosophy behind these growth funds focuses on
three important principles. First, the funds seek to own successful companies,
which we define as those with growing earnings and revenues. Second, we attempt
to keep the funds fully invested, regardless of short-term market activity.
Experience has shown that market gains can occur in unpredictable spurts and
that missing those opportunities can significantly limit the potential for gain.
Third, the funds are managed by teams, rather than by one "star." We believe
this allows us to make better, more consistent management decisions. In addition
to these principles, each fund has its own investment policies:

AMERICAN CENTURY SELECT seeks large, established companies that show
accelerating growth rates. Also, at least 80% of the fund's assets must be
invested in stocks or securities that pay regular dividends or otherwise produce
income. These dividends, and the established nature of the companies in which
Select invests, help lessen the fund's short-term price fluctuations.

AMERICAN CENTURY HERITAGE seeks smaller and midsized firms showing accelerating
growth rates, and at least 60% of its assets must be in stocks or securities
paying regular dividends or otherwise producing income. While Heritage's
dividend requirement should make the fund less volatile than funds without
dividends, it should also display somewhat more price variability -- and greater
long-term growth potential -- than Select. Historically, small-cap stocks have
been more volatile than the stocks of larger, more established companies.

AMERICAN CENTURY GROWTH invests in larger, more established firms that exhibit
accelerating growth. Because the value of established firms tends to change
relatively slowly, Growth can ordinarily be expected to show more moderate price
fluctuations than growth funds that invest in smaller or midsized firms.

COMPARATIVE INDICES

The following indices are used in the report to serve as fund performance
comparisons. They are not investment products available for purchase.

DOW JONES INDUSTRIAL AVERAGE (DJIA) is a price-weighted average of 30 actively
traded Blue Chip stocks, primarily industrials but including service-oriented
firms. Prepared and published by Dow Jones & Co., it is the oldest and most
widely quoted of all the market indicators.

The S&P 500 is a capitalization-weighted index of the stocks of 500 publicly
traded U.S. companies that are considered to be leading firms in dominant
industries. Created by Standard & Poor's Corporation, it is considered to be a
broad measure of U.S. stock market performance.

The S&P MIDCAP 400 is a capitalization-weighted index of the stocks of the 400
largest leading U.S. companies not included in the S&P 500. Created by Standard
& Poor's Corporation, it is considered to represent the performance of mid-cap
stocks generally.

The RUSSELL 1000 INDEX, created by Frank Russell Company, measures the
performance of the 1,000 largest companies in the Russell 3000 Index (the 3,000
largest publicly traded U.S. companies, based on total market capitalization).

The RUSSELL 1000 GROWTH INDEX measures the performance of those Russell 1000
companies with higher price-to-book ratios and higher forecasted growth rates.

[left margin]

PORTFOLIO MANAGERS

SELECT
JEAN LEDFORD, CFA
RICHARD WELSH

HERITAGE
HAROLD BRADLEY
LINDA PETERSON, CFA

GROWTH
C. KIM GOODWIN
GREG WOODHAMS, CFA

42 1-800-345-2021

Glossary
- --------------------------------------------------------------------------------

RETURNS

* TOTAL RETURN figures show the overall percentage change in the value of a
hypothetical investment in the fund and assume that all of the fund's
distributions are reinvested.

* AVERAGE ANNUAL RETURNS illustrate the annually compounded returns that would
have produced the fund's cumulative total returns if the fund's performance had
been constant over the entire period. Average annual returns smooth out
variations in a fund's return; they are not the same as fiscal year-by-year
results. For fiscal year-by-year total returns, please refer to the "Financial
Highlights" on pages 32-40.

INVESTMENT TERMS

* EXPENSE RATIO -- the operating expenses of the fund, expressed as a percentage
of average net assets. Shareholders pay an annual fee to the investment manager
for investment advisory and management services. The expenses and fees are
deducted from fund income, not from each shareholder account. (See Note 2 in the
Notes to Financial Statements.)

* MEDIAN MARKET CAPITALIZATION -- Market capitalization (market cap) is the
total value of a company's stock and is calculated by multiplying the number of
outstanding common shares by the current share price. The company whose market
cap is in the middle of the portfolio is the median market cap. Half the
companies in the portfolio have values greater than the median, and half have
values that are less. If there is an even number of companies, then the median
is the average of the two companies in the middle.

* NUMBER OF COMPANIES -- the number of different companies held by a fund on a
given date.

* PORTFOLIO TURNOVER -- the percentage of a fund's investment portfolio that is
replaced during a given time period, usually a year. Actively managed portfolios
tend to have higher turnover than passively managed portfolios such as index
funds.

* PRICE/BOOK RATIO -- a stock value measurement calculated by dividing a
company's stock price by its book value per share, with the result expressed as
a multiple instead of as a percentage. (Book value per share is calculated by
subtracting a company's liabilities from its assets, then dividing that value by
the number of outstanding shares.)

* PRICE/EARNINGS (P/E) RATIO -- a stock value measurement calculated by dividing
a company's stock price by its earnings per share, with the result expressed as
a multiple instead of as a percentage. (Earnings per share is calculated by
dividing the after-tax earnings of a corporation by its outstanding shares.)

TYPES OF STOCKS

* BLUE CHIP STOCKS -- stocks of the most established companies in American
industry. They are generally large, fairly stable companies that have
demonstrated consistent earnings and usually have long-term growth potential.
Examples include General Electric and Coca-Cola.

* CYCLICAL STOCKS -- generally considered to be stocks whose price and earnings
fluctuations tend to follow the ups and downs of the business cycle. Examples
include the stocks of automobile manufacturers, steel producers and textile
operators.

www.americancentury.com 43

Glossary
- --------------------------------------------------------------------------------
(Continued)

* GROWTH STOCKS -- stocks of companies that have experienced above-average
earnings growth and are expected to continue such growth. These stocks often
sell at high P/E ratios. Examples can include the stocks of high-tech,
healthcare, and consumer staples companies.

* LARGE-CAPITALIZATION ("LARGE-CAP") STOCKS -- generally considered to be stocks
of companies with a market capitalization (the total value of a company's
outstanding stock) of more than $5 billion. These tend to be the stocks that
make up the Dow Jones Industrial Average and the S&P 500.

* MEDIUM-CAPITALIZATION ("MID-CAP") STOCKS --generally considered to be stocks
of companies with a market capitalization (the total value of a company's
outstanding stock) of between $1 billion and $5 billion. These tend to be the
stocks that make up the S&P 400.

* SMALL-CAPITALIZATION ("SMALL-CAP") STOCKS -- generally considered to be stocks
of companies with a market capitalization (the total value of a company's
outstanding stock) of less than $1 billion. These tend to be the stocks that
make up the Russell 2000 Index.

* VALUE STOCKS -- generally considered to be stocks that are purchased because
they are relatively inexpensive. These stocks are typically characterized by low
P/E ratios.

FUND CLASSIFICATIONS

INVESTMENT OBJECTIVE

The investment objective may be based on the fund's objective as stated in its
prospectus or fund profile, or the fund's categorization by independent rating
organizations based on its management style.

* CAPITAL PRESERVATION -- offers taxable and tax-free money market funds for
relative stability of principal and liquidity.

* INCOME -- offers funds that can provide current income and competitive yields,
as well as a strong and stable foundation and lower volatility levels than stock
funds.

* GROWTH & INCOME -- offers funds that emphasize both growth and income,
diversification, varying capitalization sizes, and different investment styles
and strategies.

* GROWTH -- offers funds with a focus on capital appreciation and long-term
growth, generally providing high return potential with corresponding high price
fluctuation risk.

RISK

The classification of funds by risk category is based on quantitative
historical measures as well as qualitative prospective measures. It is not
intended to be a precise indicator of future risk or return levels. The degree
of risk within each category can vary significantly, and some fund returns have
historically been higher than more aggressive funds or lower than more
conservative funds. Please be aware that the fund's category may change over
time. Therefore, it is important that you read a fund's prospectus or fund
profile carefully before investing to ensure its objectives, policies, and risk
potential are consistent with your needs.

* CONSERVATIVE -- these funds generally provide lower return potential with
either low or minimal price fluctuation risk.

* MODERATE -- these funds generally provide moderate return potential with
moderate price fluctuation risk.

* AGGRESSIVE -- these funds generally provide high return potential with
corresponding high price fluctuation risk.

44 1-800-345-2021

[inside back cover]

- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE - CAPITAL PRESERVATION
- --------------------------------------------------------------------------------

RISK LEVEL - CONSERVATIVE

TAXABLE MONEY MARKETS TAX-FREE MONEY MARKETS
Premium Capital Reserve FL Municipal Money Market
Prime Money Market CA Municipal Money Market
Premium Government Reserve CA Tax-Free Money Market
Government Agency Tax-Free Money Market
Money Market
Capital Preservation

- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE - INCOME
- --------------------------------------------------------------------------------

RISK LEVEL - AGGRESSIVE

TAXABLE BONDS TAX-FREE BONDS
Target 2025* CA High-Yield Municipal
Target 2020* High-Yield Municipal
Target 2015*
Target 2010*
High-Yield
International Bond

RISK LEVEL - MODERATE

TAXABLE BONDS TAX-FREE BONDS
Long-Term Treasury CA Long-Term Tax-Free
Target 2005* Long-Term Tax-Free
Bond CA Insured Tax-Free
Premium Bond

RISK LEVEL - CONSERVATIVE

TAXABLE BONDS TAX-FREE BONDS
Intermediate-Term Bond CA Intermediate-Term Tax-Free
Intermediate-Term Treasury AZ Intermediate-Term Municipal
GNMA FL Intermediate-Term Municipal
Inflation-Adjusted Treasury Intermediate-Term Tax-Free
Limited-Term Bond CA Limited-Term Tax-Free
Target 2000* Limited-Term Tax-Free
Short-Term Government
Short-Term Treasury

- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE - GROWTH AND INCOME
- --------------------------------------------------------------------------------

RISK LEVEL - AGGRESSIVE

DOMESTIC EQUITY
Small Cap Quantitative
Small Cap Value

RISK LEVEL - MODERATE

ASSET ALLOCATION/BALANCED DOMESTIC EQUITY SPECIALTY
Strategic Allocation: Equity Growth Utilities
Aggressive Equity Index Real Estate
Balanced Tax-Managed Value
Strategic Allocation: Income & Growth
Moderate Value
Strategic Allocation: Equity Income
Conservative

- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE - GROWTH
- --------------------------------------------------------------------------------

RISK LEVEL - AGGRESSIVE

DOMESTIC EQUITY SPECIALTY INTERNATIONAL
New Opportunities Global Gold Emerging Markets
Giftrust(reg.tm) International Discovery
Vista International Growth
Heritage Global Growth
Growth
Ultra(reg.tm)
Select

RISK LEVEL - MODERATE

SPECIALTY
Global Natural Resources

The classification of funds by risk category is based on quantitative historical
measures as well as qualitative prospective measures. It is not intended to be a
precise indicator of future risk or return levels. The degree of risk within
each category can vary significantly, and some fund returns have historically
been higher than more aggressive funds or lower than more conservative funds.
Please be aware that a fund's category may change over time. Therefore, it is
important that you read a fund's prospectus or fund profile carefully before
investing to ensure its objectives, policies and risk potential are consistent
with your needs.

For a definition of fund categories, see the Glossary.

* While listed within the Income investment objective, the Target funds do not
pay current dividend income. Income dividends are distributed once a year in
December. The Target funds are listed in all three risk categories due to the
dramatic price volatility investors may experience during certain market
conditions. If held to their target dates, however, they can offer a
conservative, dependable way to invest for a specific time horizon.

Please call 1-800-345-2021 for a prospectus or profile on any American Century
fund. These documents contain important information including charges and
expenses, and you should read them carefully before you invest or send money.

[back cover]

[american century logo(reg.sm)]
American
Century

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

www.americancentury.com

INVESTOR RELATIONS
1-800-345-2021 or 816-531-5575

AUTOMATED INFORMATION LINE
1-800-345-8765

FAX: 816-340-7962

TELECOMMUNICATIONS DEVICE FOR THE DEAF
1-800-634-4113 or 816-444-3485

BUSINESS, NOT-FOR-PROFIT, EMPLOYER-SPONSORED RETIREMENT PLANS
1-800-345-3533

AMERICAN CENTURY MUTUAL FUNDS INC.

INVESTMENT MANAGER
American Century Investment Management, Inc.
Kansas City, Missouri

This report and the statements it contains are submitted for the general
information of our shareholders. The report is not authorized for distribution
to prospective investors unless preceded or accompanied by an effective
prospectus.

- --------------------------------------------------------------------------------
American Century Investments BULK RATE
P.O. Box 419200 U.S. POSTAGE PAID
Kansas City, MO 64141-6200 AMERICAN CENTURY
www.americancentury.com COMPANIES

9906 Funds Distributor, Inc.
SH-BKT-16618 (c)1999 American Century Services Corporation
<PAGE>
[front cover]
April 30, 1999

SEMIANNUAL REPORT
- -----------------
AMERICAN CENTURY

[graphic of stairs]

GIFTRUST(reg.sm)

[american century logo(reg.sm)]
American
Century

[inside front cover]

Y2K TESTING EFFORTS PAY DIVIDENDS IN PREPAREDNESS
- --------------------------------------------------------------------------------

Year 2000 Readiness Disclosure

MINIMIZE YOUR MUTUAL FUND TAX HIT

* BUY AND HOLD --Low portfolio turnover helps limit realized capital gains
and takes advantage of long-term capital gains tax rates.

* OFFSET GAINS --When gains are realized in the portfolio, they are offset
with capital losses from securities sold in that tax year or losses
carried over from previous years.

* SELL HIGHER-COST SHARES FIRST --Selling shares that cost the most first
helps minimize the taxable gains incurred from a sale.

Giftrust is a registered service mark of American Century Services Corporation.

[left margin]

GIFTRUST
(TWGTX)

TURN TO THE INSIDE BACK COVER OF THIS REPORT TO SEE A LIST OF THE FUNDS
CLASSIFIED BY OBJECTIVE AND RISK.

Our Message to You
- --------------------------------------------------------------------------------
/photo of James E. Stowers III and James E. Stowers, Jr./
James E. Stowers III, seated, with James E. Stowers, Jr.

These are unusual times in the equity markets. The first half of Giftrust's
fiscal year, which ended April 30, 1999, was marked by dramatic shifts in market
sentiment. Much of the time a few large, popular growth stocks continued to
flourish, while almost anything smaller--unless it was an Internet-related
company--was caught in the market's crosscurrents. The performance of small
stocks came in bursts, one as the period began and another as it ended.

Giftrust's results improved, although its performance failed to match that
of its benchmark index, and its returns remain below our expectations. The fund
has continued to fight the negative psychology that has impeded the performance
of small and midsized companies for several years. Although the shares of
smaller firms fared better in the first half of the year, pessimism about
small-cap investing is still alive and well. However, we remain confident that
the growth and earning power of well-managed smaller businesses will eventually
be translated into improved stock market returns.

At American Century, our focus continues to be on making it easier to do
business with us and on helping investors reach their financial goals. In March,
we consolidated all our funds under the American Century name. We believe the
American Century nameplate makes it simpler for you to identify your funds.

We have also reclassified our entire family of 71 funds, based on
investment goals and risk levels, so you can more easily choose the funds that
are right for you. A complete list of American Century funds, arranged by their
new classifications, is on the inside back cover of this report.

We also continued to expand the American Century investment team, which has
doubled over the last three years. Our portfolio teams have excellent depth,
with an array of experienced managers and analysts, and we remain committed to
building and maintaining a talented management group.

Finally, we redesigned and enhanced our Web site, www.americancentury.com.
There you'll find daily fund information, including performance and price data,
market and national news, and a Forms Center with access to the most-requested
investor forms and applications. You can also sign up to receive fund
prospectuses and shareholder reports electronically.

As always, we appreciate your continued confidence in American Century.

Sincerely,
/s/James E. Stowers, Jr.
James E. Stowers, Jr.
Chairman of the Board and Founder

/s/James E. Stowers III
James E. Stowers III
Vice Chairman of the Board and Chief Executive Officer

Table of Contents
Report Highlights ....................................................... 2
Market Perspective ...................................................... 3

GIFTRUST
Performance ............................................................. 4
Management Q&A .......................................................... 5
Portfolio at a Glance ................................................... 5
Top Ten Holdings ........................................................ 6
Top Five Industries ..................................................... 6
Types of Investments .................................................... 7
Schedule of Investments ................................................. 8
Financial Highlights .................................................... 15

FINANCIAL STATEMENTS
Statement of Assets and
Liabilities ............................................................. 10
Statement of Operations ................................................. 11
Statements of Changes
in Net Assets ........................................................... 12
Notes to Financial
Statements .............................................................. 13

OTHER INFORMATION
Background Information
Investment Philosophy
and Policies ............................................................ 16
Comparative Indices .................................................. 16
Portfolio Managers ................................................... 16
Glossary ................................................................ 17

www.americancentury.com 1

Report Highlights
- -------------------------------------------------------------------------------

MARKET PERSPECTIVE

* All three growth stock categories--small, midsize and large-- posted
double-digit returns during the six-month period.

* The Federal Reserve's lowering of short-term interest rates last fall
sparked rallies in both ends of the market, but the move was short-lived
for smaller stocks. In April, value stocks and those of large industrial
companies shot up, as the Dow Jones Industrial Average gained more than 10%
during the month, compared to a 3.79% increase in the S&P 500 Index. The
Russell 2000, a small-cap index, was up almost 9% during April, as
investors recognized the attractive valuations of small and midsized firms.

GIFTRUST

* Giftrust's gain over the period, while strong, lagged that of its
benchmark. Still, the fund significantly outperformed the majority of its
peers for the six months.

* The fund's top 10 investments accounted for more than a quarter of the
fund, and six of its best contributors were on that list.

* Giftrust's weighting in firms making semiconductors -- computer chips that
store and send information -- was doubled over the period. The explosion in
Internet traffic has triggered the need for high-capacity communications
pipelines and the fund owns firms that are working on the next generation
of semiconductors.

* The fund's progress was slowed by a steep decline in the share price of one
of its largest positions, PathoGenesis, a biotechnology company. The firm
came out with a promising new drug to treat cystic fibrosis. Sales turned
out to be well below what investors expected, however, and the stock
tumbled.

[left margin]

"THE FUND'S TOP 10 INVESTMENTS ACCOUNTED FOR MORE THAN A QUARTER OF THE FUND,
AND SIX OF ITS BEST CONTRIBUTORS WERE ON THAT LIST."

GIFTRUST
(TWGTX)
TOTAL RETURNS AS OF 4/30/99
6 Months 17.09%*
1 Year -21.02%
INCEPTION DATE: 11/25/83
NET ASSETS: $909.6 million

* Not annualized.

Investment terms are defined in the Glossary on pages 17-18.

2 1-800-345-2021

Market Perspective from James E. Stowers III
- --------------------------------------------------------------------------------
/photo James E. Stowers III/
James E. Stowers III, Chief Executive Officer of American Century

MARKET PERFORMANCE WAS BROADER

THE FEDERAL RESERVE STEPS IN

As you may recall, in September 1998, the financial markets were less
tranquil. Many were in crisis until the Federal Reserve Board (the U.S. central
bank) stepped in and stabilized the situation by lowering short-term interest
rates. The strategy worked and smaller stocks rallied. Large stocks moved higher
too, led by technology and Internet-related companies, but smaller stocks
appeared to fall back into familiar patterns--greater volatility, and lower
returns. In early spring, however, this changed noticeably.

THE S&P 500 SLOWS

In April, value stocks and those of large manufacturers such as Dow
Chemical and Caterpillar shot up. The Dow Jones Industrial Average jumped 10.25%
in April, trouncing the S&P 500's 3.79% gain. The S&P 400, the midsize
benchmark, also came out slightly ahead, up 7.88% for the month, while the
Russell 2000, a small-cap index, rose 8.96%. The S&P 500/BARRA Value Index, a
popular measure of value stocks, leapt 8.62%, posting one of its best
performances in years.

Several factors contributed to the change in market dynamics. For one,
market leadership had remained unusually narrow, with size the chief
differential in performance.

As a result, big growth companies became increasingly expensive, and the
fear grew that any reversion to normal performance could be costly. A perception
arose, as the economy continued to grow, that perhaps the economic cycle wasn't
ending but instead was beginning anew, kicking off another growth cycle. Given
that forecast, economically sensitive companies (the industrials) were the
likely beneficiaries.

It's too early to tell whether this scenario will prove true, but the
perception sparked an unusually robust short-term reaction.

GOOD BUSINESSES, GOOD STOCKS

At American Century, we try not to overreact to short-term market
developments. Our focus is on helping shareholders build their capital over
time. We do that by searching for the best small and midsized businesses
available, particularly those with accelerating rates of earnings growth, no
matter which sector of the economy they represent.

[right margin]

"THE RETURNS OF ALL THREE STOCK CATEGORIES -- SMALL, MIDSIZE, AND LARGE -- WERE
SQUARELY IN DOUBLE DIGITS."

MARKET RETURNS
FOR THE SIX MONTHS ENDED APRIL 30, 1999
S&P 500 22.31%
S&P MIDCAP 400 18.86%
RUSSELL 2000 15.16%

Source: Lipper Inc.

These indices represent the performance of large-, medium-, and
small-capitalization stocks.

[chart data below]

MARKET PERFORMANCE (GROWTH OF $1.00)
FOR THE SIX MONTHS ENDED APRIL 30, 1999

S&P 500 S&P Mid-Cap 400 Russell 2000
10/31/98 $1.00 $1.00 $1.00
11/30/98 $1.06 $1.05 $1.05
12/31/98 $1.12 $1.18 $1.12
1/31/99 $1.17 $1.13 $1.13
2/28/99 $1.13 $1.07 $1.04
3/31/99 $1.18 $1.10 $1.06
4/30/99 $1.22 $1.19 $1.15

Value on 4/30/99
S&P 500 $1.22
S&P MidCap 400 $1.19
Russell 2000 $1.15

www.americancentury.com 3

Giftrust--Performance
- -------------------------------------------------------------------------------

TOTAL RETURNS AS OF APRIL 30, 1999
GIFTRUST RUSSELL 2000 GROWTH
6 MONTHS(1) 17.09% 25.74%
1 YEAR -21.02% -3.77%
===================================================================
AVERAGE ANNUAL RETURNS
3 YEARS -7.65% 6.13%
5 YEARS 7.86% 12.62%
10 YEARS 15.06% 10.96%
LIFE OF FUND(2) 16.00% 9.04%(3)

(1) Returns for periods less than one year are not annualized.

(2) Inception was 11/25/83.

(3) Since 11/30/83, the date nearest the fund's inception for which data are
available.

See pages 16-18 for information about the Russell 2000 Growth Index and returns.

[chart data below]

PERFORMANCE OF $10,000 OVER 10 YEARS

Date Giftrust Russell 2000 Growth
4/30/89 $10,000 $10,000
4/30/90 $11,321 $10,064
4/30/91 $13,146 $11,351
4/30/92 $17,062 $12,875
4/30/93 $21,464 $13,634
4/30/94 $27,869 $15,617
4/30/95 $36,854 $16,980
4/30/96 $51,655 $23,661
4/30/97 $37,667 $20,458
4/30/98 $51,513 $29,398
4/30/99 $40,694 $28,289

Value on 4/30/99
Giftrust $40,694
Russell 2000 Growth $28,289

The graph at left shows the growth of a $10,000 investment in the fund over 10
years, while the chart below shows the fund's year-by-year performance. The
Russell 2000 Growth Index is provided for comparison in each graph. Giftrust's
total returns include operating expenses (such as transaction costs and
management fees) that reduce returns, while the total returns of the Russell
2000 Growth Index do not. Past performance does not guarantee future results.
Investment return and principal value will fluctuate, and redemption value may
be more or less than original cost.

[chart data below]

ONE-YEAR RETURNS OVER 10 YEARS (PERIODS ENDED APRIL 30)

Date Giftrust Russell 2000 Growth
4/30/90 13.21% 0.64%
4/30/91 16.12% 12.79%
4/30/92 29.79% 13.42%
4/30/93 25.80% 5.90%
4/30/94 29.84% 14.54%
4/30/95 32.24% 8.73%
4/30/96 40.16% 39.35%
4/30/97 -27.08% -13.54%
4/30/98 36.76% 43.70%
4/30/99 -21.02% -3.77%

4 1-800-345-2021

Giftrust--Q&A
- --------------------------------------------------------------------------------
/photo Chris Boyd and John Seitzer/
Chris Boyd and John Seitzer, portfolio managers on the Giftrust investment team

An interview with Chris Boyd and John Seitzer, portfolio managers on the
Giftrust investment team.

HOW DID GIFTRUST PERFORM FOR THE SIX MONTHS ENDED APRIL 30, 1999?

Giftrust gained 17.09% during the period, versus a 25.74% return for its
benchmark, the Russell 2000 Growth Index. Although it lagged the Russell,
Giftrust significantly outperformed the majority of its peers. The average
small-cap fund tracked by Lipper Inc., gained 14.68%, evidence that the period
represented an uphill climb for most funds investing in smaller companies.
Giftrust's experience placed it in the top 30% of its peers.*

We've been working earnestly to improve our day-to-day effectiveness, and
we're heartened by Giftrust's improved returns. We understand and appreciate the
faith people put in American Century when they make this unique investment.

WHICH STOCKS CONTRIBUTED TO RETURNS OVER THE SIX MONTHS?

Giftrust's top 10 investments accounted for more than a quarter of the fund
and six of its best contributors were on that short list.

Gemstar International Group, our largest holding, gained 90% over the
period. This company has invented new technology for videocassette recorders
that makes it possible for consumers to record shows with greater ease. "Why
should taping TV shows with a VCR be any more difficult than dialing a
telephone?" the company asks. Its flagship product enables a consumer to record
shows simply by punching in a show's numerical code found in TV listings.
Gemstar's technology is built into every major VCR brand. The company also has
patents on VCR functions that quickly and easily find and play back recorded
shows, as well as patents for on-screen-interactive programming guides.

CSG Systems International, our second-largest holding, also performed well,
up over 40% for the six months. This firm is the leading provider of billing
services for cable TV companies. Its client list includes Tele-Communications,
Inc., the national cable system recently acquired by AT&T. Industry observers
expect additional marriages between cable companies and other businesses seeking
direct access to millions of U.S. households, and that could bode well for CSG.

Uniphase Corporation turned in a triple-digit performance, gaining 145%
over the six months. This company serves the telecommunication industry by
making special amplifiers that enable fiber optic communications systems to
carry more information over greater distances.

Express Scripts, our third-largest holding, was also a strong contributor,
up 50%. This company is involved in what is known as "pharmacy benefit
management." Electronically linked to

*The one-, five-, and 10-year rankings for Giftrust among Lipper small-cap funds
are 546 out of 676, 216 out of 234, and 22 out of 72, respectively. Lipper
rankings are based on average annual total returns. Past performance is no
guarantee of future results.

[right margin]

"WE'VE BEEN WORKING EARNESTLY TO IMPROVE OUR DAY-TO-DAY EFFECTIVENESS, AND
WE'RE HEARTENED BY GIFTRUST'S IMPROVED RETURNS."

PORTFOLIO AT A GLANCE
4/30/99 10/31/98
NO. OF COMPANIES 92 105
MEDIAN P/E RATIO 36.1 26.4
MEDIAN MARKET $1.74 $1.16
CAPITALIZATION BILLION BILLION
PORTFOLIO TURNOVER 69%(1) 147%(2)
EXPENSE RATIO 1.00%(3) 1.00%

(1) Six months ended 4/30/99.
(2) Year ended 10/31/98.
(3) Annualized.

Investment terms are defined in the Glossary on pages 17-18.

www.americancentury.com 5

Giftrust--Q&A
- --------------------------------------------------------------------------------
(Continued)

more than 50,000 pharmacies around the country, Express Scripts manages
prescription benefits for corporations and other clients, providing services
such as online claims processing and mail order processing. It is the leader in
this specialized field.

OVER THE PERIOD, YOU DOUBLED YOUR WEIGHTING IN COMPANIES THAT MAKE ELECTRONIC
COMPONENTS TO 16% OF THE FUND, MAKING IT YOUR LARGEST SECTOR. WHAT KIND OF
COMPANIES ARE THESE AND WHAT'S THEIR ATTRACTION?

Many of the companies in the electronic components segment of the portfolio
manufacture semiconductors--computer chips that store and send information. The
explosion in Internet traffic, the huge increase in corporate Internet sites,
and the rise of "intracompany" web sites have triggered the need for
higher-capacity communications pipelines. Put simply, more people want to move
more data with greater speed. We own a number of companies that are at work on
the next generation of semiconductors to make that possible. Two of them are
Vitesse Semiconductor Corp. and PMC-Sierra. Vitesse is a dominant supplier of
semiconductors used in fiber optic communications systems. It is one of the few
companies with the technology to make very complex chips using a substance
called gallium arsenide. PMC-Sierra focuses on high-speed semiconductors used in
communications networks. Networks once primarily designed for voice traffic must
now shoulder data and video communications as well.

WHICH STOCKS DIDN'T WORK OUT AS YOU EXPECTED?

Unfortunately, our greatest disappointment was one of our largest
positions, a biotechnology company called PathoGenesis. In 1998, the company
came out with a promising new drug to treat cystic fibrosis. Early indications
from PathoGenesis suggested that the drug was selling well. But, as sometimes
happens when new drugs are brought to market, written prescriptions told one
story, while distribution numbers told another. Sales turned out to be well
below what investors expected and the stock tumbled. We closed out our
investment.

Tekelec is another stock that performed below expectations. This company is
a leading supplier of diagnostic systems used by telecommunications companies to
test their networks. A product we thought would boost Tekelec's revenues is its
advanced switching equipment that enables telephone companies to provide and
monitor value-added services like caller ID, call-forwarding, and "local number
portability" (the ability to keep your old phone number if you change phone
companies). Unfortunately, products like Tekelec's fall under the heading of
"discretionary spending" for telephone companies and demand was much less than
we anticipated.

[left margin]

TOP TEN HOLDINGS
% OF FUND INVESTMENTS
AS OF AS OF
4/30/99 10/31/98
GEMSTAR INTERNATIONAL
GROUP LTD. 4.9% 1.1%
CSG SYSTEMS
INTERNATIONAL, INC. 2.7% 2.2%
EXPRESS SCRIPTS,
INC. CL A 2.7% 2.4%
FAMILY DOLLAR
STORES, INC. 2.4% 2.4%
JABIL CIRCUIT, INC. 2.3% -
UNIPHASE CORP. 2.3% 1.8%
VITESSE SEMICONDUCTOR
CORP. 2.3% 2.5%
FISERV, INC. 2.0% 1.3%
COMVERSE
TECHNOLOGY, INC. 1.9% -
ANTEC CORP. 1.8% 0.9%

TOP FIVE INDUSTRIES
% OF FUND INVESTMENTS
AS OF AS OF
4/30/99 10/31/98*
ELECTRICAL & ELECTRONIC
COMPONENTS 15.7% 7.7%
BUSINESS SERVICES
& SUPPLIES 14.2% 16.6%
COMMUNICATIONS
EQUIPMENT 9.9% 3.6%
COMPUTER SOFTWARE
& SERVICES 9.0% 9.0%
LEISURE 8.0% 3.2%

* Percentages have been adjusted to reflect security industry reclassification.

6 1-800-345-2021

Giftrust--Q&A
- --------------------------------------------------------------------------------
(Continued)

from a new part of its business, telemarketing services, came in below
expectations. Anytime a company's accelerating growth begins to wane, we
consider it a candidate for sale. Thus, HA-LO was sold with the proceeds
redeployed in new positions we think are in a better position to sustain their
growth.

WHAT ARE SOME OF THOSE NEW POSITIONS, AND WHY DID YOU CHOOSE THEM?

Jabil Circuit is one. This firm is a contract manufacturer of circuit
boards for personal computers and telecommunications equipment. To continue to
reduce costs, computer manufacturers like Dell or equipment makers like
Hewlett-Packard are outsourcing manufacturing and assembly functions to firms
like Jabil that specialize in doing so inexpensively and efficiently.

A new Internet stock in the portfolio is Inktomi Corp., which develops
software used by Internet service providers to increase the capacity of their
networks. Its applications include the world's largest Internet search engines.
The stock has appreciated more than 180% since we purchased it.

Comverse Technology is another holding we've added. Comverse serves the
telecommunications industry with a number of products, including large-capacity
messaging systems and systems for archiving large volumes of recorded
information that are used by inbound and outbound call centers, 911 emergency
service providers, and financial institutions. The stock has doubled in value
since we've owned it.

WHAT IS YOUR OUTLOOK FOR THE REST OF THE YEAR?

In our last report to you, which covered a dismal 12-month period for
shares of small and midsized companies, we said it would be hard for investors
to keep ignoring the attractive valuations in those parts of the market. It has
been our view that many well-managed, successful smaller firms were being
completely ignored by investors. In fact, the disparity in returns between the
largest and smallest companies in calendar year 1998 alone was more than 40%
(large-cap up 28%; small-cap down 15%)--the greatest gap in more than 25 years

That trend continued in early 1999 as investors focused their enthusiasm
and cash flow on a narrow list of America's largest and most rapidly growing
businesses. In April, however, market sentiment began to shift in favor of both
smaller firms and those with more economic sensitivity. This short period of
improved performance pales against the underperformance these stocks have
experienced since 1995, but it is a welcome and favorable turn for the better.

[right margin]

"THIS SHORT PERIOD OF IMPROVED PERFORMANCE PALES AGAINST THE UNDERPERFORMANCE
THESE STOCKS HAVE EXPERIENCED SINCE 1995, BUT IT IS A WELCOME AND FAVORABLE TURN
FOR THE BETTER."

[chart data below]

TYPES OF INVESTMENTS IN THE PORTFOLIO

AS OF APRIL 30, 1999
Common Stocks 99.0%
Temporary Cash Investments 1%

AS OF OCTOBER 31, 1998
Common Stocks 98.00%
Temporary Cash Investments 2%

www.americancentury.com 7

Giftrust--Schedule of Investments
- --------------------------------------------------------------------------------

APRIL 30, 1999 (UNAUDITED)

Shares ($ in Thousands) Value
- --------------------------------------------------------------------------------
COMMON STOCKS-99.3%

AEROSPACE & DEFENSE--3.3%
150,000 Avondale Industries, Inc.(1) $ 4,636
140,800 General Dynamics Corp. 9,891
200,000 L-3 Communications
Holdings, Inc.(1) 9,763
172,800 Newport News Shipbuilding Inc. 4,525
----------
28,815
----------
AUTOMOBILES & AUTO PARTS--1.0%
305,000 Gentex Corp.(1) 9,179
----------

BANKING--4.7%
180,000 First Tennessee National Corp. 7,791
275,000 Huntington Bancshares Inc. 9,728
155,000 Marshall & Ilsley Corp. 10,855
150,000 Mercantile Bancorporation Inc. 8,550
135,000 UnionBanCal Corp. 4,632
----------
41,556
----------
BIOTECHNOLOGY--2.6%
210,000 Centocor, Inc.(1) 9,298
138,600 IDEC Pharmaceuticals Corp.(1) 7,017
127,000 MedImmune, Inc.(1) 7,005
----------
23,320
----------
BROADCASTING & MEDIA--2.8%
130,000 Emmis Communications
Corp. Cl A(1) 5,858
215,000 Entercom Communications
Corp.(1) 7,982
200,000 Heftel Broadcasting Corp.(1) 10,825
----------
24,665
----------
BUSINESS SERVICES & SUPPLIES--14.2%
485,500 Acxiom Corp.(1) 12,229
615,800 CSG Systems International, Inc.(1) 23,901
107,900 Corporate Executive
Board Co. (The)(1) 3,014
320,900 Express Scripts, Inc. Cl A(1) 23,646
301,900 Fiserv, Inc.(1) 17,680
357,000 NCO Group, Inc(1) 11,669
369,365 Nova Corp.(1) 9,603
450,400 Pharmaceutical Product
Development, Inc.(1) 13,090
130,000 Profit Recovery Group International,
Inc. (The)(1) 4,753
29,800 Sykes Enterprises, Inc.(1) 613
200,000 Tetra Tech, Inc.(1) 4,856
----------
125,054
----------

Shares ($ in Thousands) Value
- ---------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT--9.9%
260,000 ADC Telecommunications, Inc.(1) $ 12,464
573,500 ANTEC Corp.(1) 15,610
62,000 Carrier Access Corp.(1) 3,222
180,000 Com21, Inc.(1) 5,625
425,000 CommScope, Inc.(1) 10,359
255,000 Comverse Technology, Inc.(1) 16,447
195,738 JDS Fitel Inc. ORD(1) 11,794
275,000 Polycom, Inc.(1) 6,729
127,300 Terayon Communication
Systems, Inc.(1) 5,132
----------
87,382
----------
COMPUTER SOFTWARE & SERVICES--9.0%
55,000 CNET, Inc.(1) 7,052
40,000 Excite, Inc.(1) 5,853
117,700 Inktomi Corp.(1) 14,116
293,000 Mercury Interactive Corp.(1) 8,268
374,800 Rational Software Corp.(1) 11,127
188,100 Sapient Corp.(1) 11,827
502,100 USWeb Corp.(1) 11,313
66,000 Veritas Software Corp.(1) 4,703
140,000 Verity, Inc.(1) 4,939
----------
79,198
----------
CONSTRUCTION & PROPERTY
DEVELOPMENT--0.6%
113,700 Dycom Industries, Inc.(1) 5,195
----------
CONTROL & MEASUREMENT--0.5%
100,000 Orbotech Ltd.(1) 4,838
----------
ELECTRICAL & ELECTRONIC
COMPONENTS--15.7%
200,000 ATMI, Inc.(1) 4,638
100,000 Conexant Systems, Inc.(1) 4,066
166,000 Flextronics International Ltd. ADR(1) 7,719
431,500 Jabil Circuit, Inc.(1) 20,091
163,300 Lattice Semiconductor Corp.(1) 6,695
134,400 PMC--Sierra, Inc.(1) 12,894
244,800 Power Integrations, Inc.(1) 9,578
102,000 Qlogic Corp.(1) 7,140
80,000 RF Micro Devices, Inc.(1) 4,475
243,400 Teradyne, Inc.(1) 11,485
170,200 Uniphase Corp.(1) 20,626
500,400 Unitrode Corp.(1) 8,851
443,000 Vitesse Semiconductor Corp.(1) 20,613
----------
138,871
----------

See Notes to Financial Statements

8 1-800-345-2021

Giftrust--Schedule of Investments
- ----------------------------------------------------------------------------
(Continued)
APRIL 30, 1999 (UNAUDITED)

Shares ($ in Thousands) Value
- ---------------------------------------------------------------------------
FOOD & BEVERAGE--2.0%
128,400 Suiza Foods Corp.(1) $ 4,823
295,000 U.S. Foodservice, Inc.(1) 12,408
------------
17,231
------------
INDUSTRIAL EQUIPMENT &
MACHINERY--0.3%
140,000 Asyst Technologies, Inc.(1) 2,559
------------
LEISURE--8.0%
413,700 Gemstar International Group Ltd.(1) 43,529
94,700 International Speedway Corp. Cl A 4,913
190,000 Premier Parks Inc.(1) 6,567
154,200 SFX Entertainment, Inc. Cl A(1) 9,492
132,600 Speedway Motorsports, Inc.(1) 5,752
------------
70,253
------------
MACHINERY & EQUIPMENT--0.9%
304,700 PRI Automation, Inc.(1) 7,579
------------
MEDICAL EQUIPMENT & SUPPLIES--5.3%
212,400 Biomet, Inc. 8,708
373,800 IDEXX Laboratories, Inc.(1) 8,469
161,600 Ocular Sciences, Inc.(1) 4,944
139,200 Priority Healthcare Corp. Cl B(1) 7,056
452,000 Sybron International Corp.(1) 12,515
165,800 Wesley Jessen VisionCare, Inc.(1) 5,088
------------
46,780
------------
OFFICE EQUIPMENT--1.6%
294,900 Electronics for Imaging, Inc.(1) 13,943
------------
PHARMACEUTICALS--1.0%
398,600 IVAX Corp.(1) 5,232
75,100 QLT PhotoTherapeutics Inc.(1) 3,433
------------
8,665
------------
RESTAURANTS--0.7%
149,300 Papa John's International, Inc.(1) 6,000
------------

Shares ($ in Thousands) Value
- ---------------------------------------------------------------------------
RETAIL (GENERAL MERCHANDISE)--6.9%
400,000 Bed Bath & Beyond Inc.(1) $ 14,300
364,000 Consolidated Stores Corp.(1) 12,513
895,000 Family Dollar Stores, Inc. 21,591
198,900 Lands' End, Inc.(1) 7,608
111,250 99 Cents Only Stores(1) 5,243
------------
61,255
------------
RETAIL (SPECIALTY)--3.3%
330,000 Action Performance Cos. Inc.(1) 11,199
180,000 O'Reilly Automotive, Inc.(1) 8,325
766,800 Sunglass Hut International, Inc.(1) 9,681
------------
29,205
------------
TRANSPORTATION--2.4%
397,500 Atlas Air, Inc.(1) 11,528
230,000 CNF Transportation Inc. 10,048
------------
21,576
------------
UTILITIES--0.8%
174,300 Calpine Corp.(1) 7,430
------------
WIRELESS COMMUNICATIONS--1.8%
627,800 American Tower Corp. Cl A(1) 13,302
123,700 Crown Castle International Corp.(1) 2,358
------------
15,660
------------
TOTAL COMMON STOCKS 876,209
------------
(Cost $653,015)

TEMPORARY CASH INVESTMENTS--0.7%
Repurchase Agreement, Morgan Stanley Group,
Inc., (U.S. Treasury obligations), in a joint
trading account at 4.84%, dated 4/30/99,
due 5/3/99 (Delivery value $6,102) 6,100
------------
(Cost $6,100)

TOTAL INVESTMENT SECURITIES--100.0% $882,309
============
(Cost $659,115)

NOTES TO SCHEDULE OF INVESTMENTS
ADR = American Depositary Receipt
ORD = Foreign Ordinary Share
(1) Non-income producing.

See Notes to Financial Statements

www.americancentury.com 9

Statement of Assets and Liabilities
- ------------------------------------------------------------------------------
APRIL 30, 1999 (UNAUDITED)

ASSETS (In Thousands Except Per Share Amounts)
Investment securities, at value
(identified cost of $659,115) (Note 3)
$ 882,309
Receivable for investments sold ................................. 36,417
Dividends and interest receivable ............................... 35
---------
918,761
---------
LIABILITIES
Disbursements in excess of demand deposit cash .................. 848
Payable for investments purchased ............................... 7,565
Payable for capital shares redeemed ............................. 22
Accrued management fees (Note 2) ............................... 742
---------
9,177
---------
Net Assets ...................................................... $ 909,584
=========
CAPITAL SHARES, $0.01 PAR VALUE
Authorized ...................................................... 200,000
=========
Outstanding ..................................................... 46,105
=========
Net Asset Value Per Share ....................................... $ 19.73
=========
NET ASSETS CONSIST OF:
Capital (par value and paid in surplus) ......................... $ 914,784
Net investment loss ............................................. (2,613)
Accumulated net realized loss on investment transactions ........ (225,781)
Net unrealized appreciation on investments (Note 3) ............. 223,194
---------
$ 909,584
=========

- --------------------------------------------------------------------------------
UNDERSTANDING THE STATEMENT OF ASSETS AND LIABILITIES--This statement details
what the fund owns (assets), what it owes (liabilities), and its net assets as
of the last day of the period. If you subtract what the fund owes from what it
owns, you get the fund's net assets. The net assets divided by the total number
of shares outstanding gives you the price of an individual share, or the net
asset value per share.

NET ASSETS are also broken down by capital (money invested by shareholders); net
investment income not yet paid to shareholders or net investment losses; net
gains earned on investments but not yet paid to shareholders or net losses on
investments (known as realized gains or losses); and finally, gains or losses on
securities still owned by the fund (known as unrealized appreciation or
depreciation). This breakdown tells you the value of net assets that are
performance--related, such as investment gains or losses, and the value of net
assets that are not related to performance, such as shareholder investments and
redemptions.

See Notes to Financial Statements

10 1-800-345-2021

Statement of Operations
- -----------------------------------------------------------------------------
FOR THE SIX MONTHS ENDED APRIL 30, 1999 (UNAUDITED)

INVESTMENT LOSS (In Thousands)
Income:
Interest ......................................................... $ 884
Dividends ........................................................ 807
---------
1,691
---------
Expenses (Note 2):
Management fees .................................................. 4,301
Directors' fees and expenses ..................................... 3
---------
4,304
---------
Net investment loss .............................................. (2,613)
---------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 3)
Net realized loss on investments ................................. (77,080)
Change in net unrealized appreciation on investments ............. 210,166
---------
Net realized and unrealized gain on investments .................. 133,086
---------
Net Increase in Net Assets Resulting from Operations ............. $ 130,473
=========

- --------------------------------------------------------------------------------
UNDERSTANDING THE STATEMENT OF OPERATIONS--This statement breaks down how the
fund's net assets changed during the period as a result of the fund's
operations. It tells you how much money the fund made or lost after taking into
account income, fees and expenses, and investment gains or losses. It does not
include shareholder transactions and distributions.

See Notes to Financial Statements

www.americancentury.com 11

Statements of Changes in Net Assets

- --------------------------------------------------------------------------------

SIX MONTHS ENDED APRIL 30, 1999 (UNAUDITED) AND YEAR ENDED OCTOBER 31, 1998

<TABLE>
Increase (Decrease) in Net Assets
1999 1998
OPERATIONS (In Thousands)

<S> <C> <C>
Net investment loss ..............................................$ (2,613) $ (5,129)
Net realized loss on investments ................................. (77,080) (147,006)
Change in net unrealized appreciation on investments ............. 210,166 (188,500)
----------- -----------
Net increase (decrease) in net assets resulting from operations .. 130,473 (340,635)
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS
From net realized gains on investment transactions ............... -- (29,001)
In excess of net realized gains on investment transactions ....... -- (1,705)
----------- -----------
Decrease in net assets from distributions ........................ -- (30,706)
----------- -----------
CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold ........................................ 28,212 91,178
Proceeds from reinvestment of distributions ...................... -- 30,700
Payments for shares redeemed ..................................... (6,505) (16,773)
----------- -----------
Net increase in net assets from capital share transactions ....... 21,707 105,105
----------- -----------
Net increase (decrease) in net assets ............................ 152,180 (266,236)
NET ASSETS
Beginning of period .............................................. 757,404 1,023,640
----------- -----------
End of period ....................................................$ 909,584 $ 757,404
=========== ===========
Net investment loss ..............................................$ (2,613) --
=========== ===========
TRANSACTIONS IN SHARES OF THE FUND
Sold ............................................................. 1,479 4,100
Issued in reinvestment of distributions .......................... -- 1,395
Redeemed ......................................................... (335) (740)
----------- -----------

Net increase ..................................................... 1,144 4,755
=========== ===========
</TABLE>

- --------------------------------------------------------------------------------
UNDERSTANDING THE STATEMENTS OF CHANGES IN NET ASSETS--These statements show how
the fund's net assets changed over the past two reporting periods. It details
how much a fund grew or shrank as a result of:

* operations--a summary of the Statement of Operations from the previous page
for the most recent period
* distributions--income and gains distributed to shareholders
* share transactions--shareholders' purchases, reinvestments, and redemptions

Net assets at the beginning of the period plus the sum of operations,
distributions to shareholders and capital share transactions result in net
assets at the end of the period.

See Notes to Financial Statements

12 1-800-345-2021

Notes to Financial Statements
- --------------------------------------------------------------------------------
APRIL 30, 1999 (UNAUDITED)

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SECURITY VALUATIONS -- Portfolio securities traded primarily on a principal
securities exchange are valued at the last reported sales price, or the mean of
the latest bid and asked prices where no last sales price is available.
Securities traded over-the-counter are valued at the mean of the latest bid and
asked prices or, in the case of certain foreign securities, at the last reported
sales price, depending on local convention or regulation. When valuations are
not readily available, securities are valued at fair value as determined in
accordance with procedures adopted by the Board of Directors.

FUTURES CONTRACTS -- The fund may enter into stock index futures contracts
in order to manage the fund's exposure to changes in market conditions. One of
the risks of entering into futures contracts includes the possibility that the
change in value of the contract may not correlate with the changes in value of
the underlying securities. Upon entering into a futures contract, the fund is
required to deposit either cash or securities in an amount equal to a certain
percentage of the contract value (initial margin). Subsequent payments
(variation margin) are made or received daily, in cash, by the fund. The
variation margin is equal to the daily change in the contract value and is
recorded as unrealized gains and losses. The fund recognizes a realized gain or
loss when the contract is closed or expires. Net realized and unrealized gains
or losses occurring during the holding period of futures contracts are a
component of realized gain (loss) on investments and unrealized appreciation
(depreciation) on investments, respectively. There were no open futures
contracts at April 30, 1999.

REPURCHASE AGREEMENTS -- The fund may enter into repurchase agreements with
institutions that the fund's investment manager, American Century Investment
Management, Inc. (ACIM), has determined are creditworthy pursuant to criteria
adopted by the Board of Directors. Each repurchase agreement is recorded at
cost. The fund requires that the collateral, represented by securities, received
in a repurchase transaction be transferred to the custodian in a manner
sufficient to enable the fund to obtain those securities in the event of a
default under the repurchase agreement. ACIM monitors, on a daily basis, the
securities transferred to ensure the value, including accrued interest, of the
securities under each repurchase agreement is equal to or greater than amounts
owed to the fund under each repurchase agreement.

JOINT TRADING ACCOUNT -- Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the fund, along with other registered
investment companies having management agreements with ACIM, may transfer
uninvested cash balances into a joint trading account. These balances are
invested in one or more repurchase agreements that are collateralized by U.S.
Treasury or Agency obligations.

INCOME TAX STATUS -- It is the fund's policy to distribute all net
investment income and realized gains to shareholders and to otherwise qualify as
a regulated investment company under provisions of the Internal Revenue Code.
Accordingly, no provision has been made for federal or state income taxes.

DISTRIBUTIONS TO SHAREHOLDERS -- Distributions to shareholders are recorded
on the ex-dividend date. Distributions from net investment income and net
realized gains are declared and paid annually.

The character of distributions made during the year from net investment
income or net realized gains may differ from their ultimate characterization for
federal income tax purposes. These differences reflect the differing character
of certain income items and net realized gains and losses for financial
statement and tax purposes and may result in reclassification among certain
capital accounts.

www.americancentury.com 13

Notes to Financial Statements
- --------------------------------------------------------------------------------
(Continued)

APRIL 30, 1999 (UNAUDITED)

At October 31, 1998, accumulated net realized capital loss carryovers of
$141,675,075 (expiring in 2006) may be used to offset future taxable gains.

ADDITIONAL INFORMATION -- Funds Distributor, Inc. (FDI) is the
corporation's distributor. Certain officers of FDI are also officers of the
corporation.

- --------------------------------------------------------------------------------
2. TRANSACTIONS WITH RELATED PARTIES

The corporation has entered into a Management Agreement with ACIM that
provides the fund with investment advisory and management services in exchange
for a single, unified management fee. The Agreement provides that all expenses
of the fund, except brokerage commissions, taxes, interest, expenses of those
directors who are not considered "interested persons" as defined in the
Investment Company Act of 1940 (including counsel fees) and extraordinary
expenses, will be paid by ACIM. The fee is computed daily and paid monthly based
on the fund's average daily closing net assets during the previous month. The
annual management fee for the fund is 1.00%.

- --------------------------------------------------------------------------------
3. INVESTMENT TRANSACTIONS

Purchases and sales of investment securities, excluding short-term
investments, were $636,903,745 and $571,107,554, respectively.

As of April 30, 1999, accumulated net unrealized appreciation on
investments was $217,840,605, based on the aggregate cost of investments for
federal income tax purposes of $664,468,856 which consisted of unrealized
appreciation of $227,822,892 and unrealized depreciation of $9,982,287.

- --------------------------------------------------------------------------------
4. BANK LOANS

Effective December 18, 1998, the fund, along with certain other funds
managed by ACIM, entered into an unsecured $570,000,000 bank line of credit
agreement with Chase Manhattan Bank. Borrowings under the agreement bear
interest at the Federal Funds rate plus 0.40%. The fund may borrow money for
temporary or emergency purposes to fund shareholder redemptions. The fund did
not borrow from the line during the period December 18, 1998 through April 30,
1999.

- --------------------------------------------------------------------------------
5. FUND EVENTS

The following name change became effective March 1, 1999:

NEW NAME FORMER NAME
==================================================================
FUND: Giftrust Fund American Century - Twentieth Century Giftrust

14 1-800-345-2021

Giftrust--Financial Highlights
- --------------------------------------------------------------------------------

<TABLE>
FOR A SHARE OUTSTANDING THROUGHOUT THE YEARS ENDED OCTOBER 31 (EXCEPT AS NOTED)
1999(1) 1998 1997 1996 1995 1994

PER-SHARE DATA
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period .....$ 16.85 $ 25.46 $ 25.79 $ 25.63 $ 20.50 $ 19.23
--------- --------- --------- --------- --------- ---------
Income From Investment Operations
Net Investment Loss .................... (0.06)(2) (0.12)(2) (0.18)(2) (0.20)(2) (0.16)(2) (0.10)
Net Realized and Unrealized Gain
(Loss) on Investment Transactions ...... 2.94 (7.74) 0.63 2.46 6.37 3.28
--------- --------- --------- --------- --------- ---------
Total From Investment Operations ....... 2.88 (7.86) 0.45 2.26 6.21 3.18
--------- --------- --------- --------- --------- ---------
Distributions
From Net Realized Gains on
Investment Transactions ................ -- (0.75) (0.78) (2.10) (1.08) (1.91)
In Excess of Net Realized Gains ........ -- --(3) -- -- -- --
--------- --------- --------- --------- --------- ---------
Total Distributions .................... -- (0.75) (0.78) (2.10) (1.08) (1.91)
--------- --------- --------- --------- --------- ---------
Net Asset Value, End of Period ...........$ 19.73 $ 16.85 $ 25.46 $ 25.79 $ 25.63 $ 20.50
========= ========= ========= ========= ========= =========
Total Return(4) ........................ 17.09% (31.55)% 1.95% 9.72% 32.52% 18.75%

RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses
to Average Net Assets .................... 1.00%(5) 1.00% 1.00% 0.98% 0.98% 1.00%
Ratio of Net Investment Loss
to Average Net Assets ....................(0.61)%(5) (0.54)% (0.74)% (0.80)% (0.70)% (0.70)%
Portfolio Turnover Rate .................. 69% 147% 118% 121% 105% 115%
Net Assets, End of Period (in millions) ..$ 910 $ 757 $ 1,024 $ 866 $ 561 $ 266
</TABLE>

(1) Six months ended April 30, 1999 (unaudited).

(2) Computed using average shares outstanding throughout the period.

(3) Per share amount was less than $0.005.

(4) Total return assumes reinvestment of dividends and capital gains
distributions, if any. Total returns for periods less than one year are not
annualized.

(5) Annualized.

- --------------------------------------------------------------------------------
UNDERSTANDNG THE FINANCIAL HIGHLIGHTS--This statement itemizes current period
activity and statistics and provides comparison data for the last five fiscal
years (or less, if the class is not five years old).

It also includes some key statistics for the period:
* total return--the overall percentage return of the fund, assuming reinvestment
of all distributions
* expense ratio--operating expenses as a percentage of average net assets
* net income ratio--net investment income as a percentage of average net assets
* portfolio turnover--the percentage of the portfolio that was replaced during
the period

See Notes to Financial Statements

www.americancentury.com 15

Background Information
- --------------------------------------------------------------------------------

INVESTMENT PHILOSOPHY AND POLICIES

American Century offers 13 growth funds including domestic equity,
specialty, international, and global. The philosophy behind these growth funds
focuses on three important principles. First, the funds seek to invest in
successful companies, which we define as those with growing earnings and
revenues. Second, we attempt to keep the funds fully invested, regardless of
short-term market activity. Experience has shown that market gains can occur in
unpredictable spurts and that missing those opportunities can significantly
limit the potential for gain. Third, the funds are managed by teams, rather than
by one "star." We believe this allows us to make better, more consistent
management decisions.

In addition to these principles, each fund has its own policies.

AMERICAN CENTURY GIFTRUST generally invests in the securities of small- and
medium-sized companies that exhibit accelerating growth. Shares of Giftrust can
be given only as a gift to someone other than yourself or spouse, and all
investments must remain in the fund for a minimum of 10 years or until the
recipient reaches the age of majority, whichever is later. Historically,
small-cap stocks have been more volatile than the stocks of larger,
more-established companies. Therefore, the fund is subject to significant price
volatility but offers high long-term growth potential.

COMPARATIVE INDICES

The following indices are used in the report to serve as fund performance
comparisons. They are not investment products available for purchase.

DOW JONES INDUSTRIAL AVERAGE (DJIA) is a price-weighted average of 30
actively traded Blue Chip stocks, primarily industrials but including
service-oriented firms. Prepared and published by Dow Jones & Co., it is the
oldest and most widely quoted of all the market indicators.

The S&P 500 is a capitalization-weighted index of the stocks of 500
publicly traded U.S. companies that are considered to be leading firms in
dominant industries. Created by Standard & Poor's Corporation, it is considered
to be a broad measure of U.S. stock market performance.

The S&P 500/BARRA VALUE INDEX is a capitalization-weighted index consisting
of S&P 500 stocks that have lower price-to-book ratios, and, in general, share
other characteristics with value-style stocks.

The S&P MIDCAP 400 is a capitalization-weighted index of the stocks of the
400 largest leading U.S. companies not included in the S&P 500. Created by
Standard & Poor's Corporation, it is considered to represent the performance of
mid-cap stocks generally.

The RUSSELL 2000 INDEX was created by the Frank Russell Company. It
measures the performance of the 2,000 smallest of the 3,000 largest publicly
traded U.S. companies, based on total market capitalization. The Russell 2000
represents approximately 10% of the total market capitalization of the top 3,000
companies. The index is further broken down into two mutually exclusive value
and growth indices. The RUSSELL 2000 GROWTH INDEX, used in this report, measures
the performance of those Russell 2000 companies with higher price-to-book ratios
and higher forecasted growth rates.

[right margin]

PORTFOLIO MANAGERS
GIFTRUST
CHRIS BOYD, CFA
JOHN SEITZER, CFA

16 1-800-345-2021

Glossary
- --------------------------------------------------------------------------------

RETURNS

* TOTAL RETURN figures show the overall percentage change in the value of a
hypothetical investment in the fund and assume that all of the fund's
distributions are reinvested.

INVESTMENT TERMS

* MEDIAN MARKET CAPITALIZATION -- market capitalization (market cap) is the
total value of a company's stock and is calculated by multiplying the number of
outstanding common shares by the current share price. The company whose market
cap is in the middle of the portfolio is the median market cap. Half the
companies in the portfolio have values greater than the median, and half have
values that are less. If there is an even number of companies, then the median
is the average of the two companies in the middle.

* NUMBER OF COMPANIES -- the number of different companies held by a fund on a
given date.

TYPES OF STOCKS

* GROWTH STOCKS -- stocks of companies that have experienced above-average
earnings growth and are expected to continue such growth.

www.americancentury.com 17

Glossary
- --------------------------------------------------------------------------------
(Continued)

These stocks often sell at high P/E ratios. Examples can include the stocks of
high-tech, healthcare, and consumer staples companies.

* VALUE STOCKS -- generally considered to be stocks that are purchased because
they are relatively inexpensive. These stocks are typically characterized by low
P/E ratios.

FUND CLASSIFICATIONS
INVESTMENT OBJECTIVE

* CAPITAL PRESERVATION -- offers taxable and tax-free money market funds for
relative stability of principal and liquidity, allowing maximum portfolio
diversification.

* INCOME -- offers funds that can provide current income and competitive yields,
as well as a strong and stable foundation and lower volatility levels than stock
funds.

* GROWTH & INCOME -- offers funds that emphasize both growth and income,
diversification, varying capitalization sizes, and different investment styles
and strategies.

* GROWTH -- offers funds with a focus on capital appreciation and long-term
growth, generally providing high return potential with corresponding high price
fluctuation risk.

RISK

The classification of funds by risk category is based on quantitative historical
measures as well as qualitative prospective measures. It is not intended to be a
precise indicator of future risk or return levels. The degree of risk within
each category can vary significantly, and some fund returns have historically
been higher than more aggressive funds or lower than more conservative funds.
Please be aware that the fund's category may change over time. Therefore, it is
important that you read a fund's prospectus or fund profile carefully before
investing to ensure its objectives, policies, and risk potential are consistent
with your needs.

* CONSERVATIVE -- these funds generally provide lower return potential with
either low or minimal price fluctuation risk.

* MODERATE -- these funds generally provide moderate return potential with
moderate price fluctuation risk.

* AGGRESSIVE -- these funds generally provide high return potential with
corresponding high price fluctuation risk.

18 1-800-345-2021

Notes
- --------------------------------------------------------------------------------

www.americancentury.com 19

Notes
- --------------------------------------------------------------------------------

20 1-800-345-2021

[inside back cover]

RISK LEVEL - CONSERVATIVE

- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE - INCOME
- --------------------------------------------------------------------------------

RISK LEVEL - AGGRESSIVE

TAXABLE BONDS TAX-FREE BONDS
Target 2025* CA High-Yield Municipal
Target 2020* High-Yield Municipal
Target 2015*
Target 2010*
High-Yield
International Bond

RISK LEVEL - MODERATE

TAXABLE BONDS TAX-FREE BONDS
Long-Term Treasury CA Long-Term Tax-Free
Target 2005* Long-Term Tax-Free
Bond CA Insured Tax-Free
Premium Bond

RISK LEVEL - CONSERVATIVE

RISK LEVEL - AGGRESSIVE

DOMESTIC EQUITY
Small Cap Quantitative
Small Cap Value

RISK LEVEL - MODERATE

- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE - GROWTH
- --------------------------------------------------------------------------------

RISK LEVEL - AGGRESSIVE

RISK LEVEL - MODERATE

SPECIALTY
Global Natural Resources

The classification of funds by risk category is based on quantitative historical
measures as well as qualitative prospective measures. It is not intended to be a
precise indicator of future risk or return levels. The degree of risk within
each category can vary significantly, and some fund returns have historically
been higher than more aggressive funds or lower than more conservative funds.
Please be aware that a fund's category may change over time. Therefore, it is
important that you read a fund's prospectus or fund profile carefully before
investing to ensure its objectives, policies and risk potential are consistent
with your needs.

For a definition of fund categories, see the Glossary.

[back cover]

[american century logo(reg.sm)]
American
Century

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

www.americancentury.com

INVESTOR RELATIONS
1-800-345-2021 or 816-531-5575

AUTOMATED INFORMATION LINE
1-800-345-8765

FAX: 816-340-7962

TELECOMMUNICATIONS DEVICE FOR THE DEAF
1-800-634-4113 or 816-444-3485

BUSINESS, NOT-FOR-PROFIT, EMPLOYER-SPONSORED RETIREMENT PLANS
1-800-345-3533

AMERICAN CENTURY MUTUAL FUNDS INC.

INVESTMENT MANAGER
American Century Investment Management, Inc.
Kansas City, Missouri

9906 Funds Distributor, Inc.
SH-BKT-16619 (c)1999 American Century Services Corporation
<PAGE>
[front cover]

APRIL 30, 1999

SEMIANNUAL REPORT
- -----------------
AMERICAN CENTURY

[graphic of stairs]

NEW OPPORTUNITIES

[american century logo(reg.sm)]
American
Century

[inside front cover]

Y2K TESTING EFFORTS PAY DIVIDENDS IN PREPAREDNESS
- --------------------------------------------------------------------------------

Year 2000 Readiness Disclosure

MINIMIZE YOUR MUTUAL FUND TAX HIT

* BUY AND HOLD --Low portfolio turnover helps limit realized capital gains
and takes advantage of long-term capital gains tax rates.

* OFFSET GAINS --When gains are realized in the portfolio, they are offset
with capital losses from securities sold in that tax year or losses
carried over from previous years.

* SELL HIGHER-COST SHARES FIRST --Selling shares that cost the most first
helps minimize the taxable gains incurred from a sale.

[left margin]

NEW OPPORTUNITIES
(TWNOX)
- -----------------

Turn to the inside back cover of this report to see a list of the funds
classified by objective and risk.

Our Message to You
- --------------------------------------------------------------------------------

[photo of James E. Stowers III and James E. Stowers, Jr.]
James E. Stowers III, seated, with James E. Stowers, Jr.

These are unusual times in the equity markets. The first half of New
Opportunities' fiscal year, which ended April 30, 1999, was marked by dramatic
shifts in market sentiment. Much of the time a few large, popular growth stocks
continued to flourish, while almost anything smaller--unless it was an
Internet-related company--was caught in the market's crosscurrents. The
performance of small stocks came in bursts, one as the period began and another
as it ended.

New Opportunities posted robust returns, even in the face of a negative
psychology that has impeded the performance of small stocks for several years.
Small stocks fared better in the first half of the year, but pessimism about
small-cap investing is still alive and well. However, we remain firm believers
that small stocks will return to favor.

As always, we appreciate your continued confidence in American Century.

Sincerely,

/s/James E. Stowers, Jr. /s/James E. Stowers III
James E. Stowers, Jr. James E. Stowers III
Chairman of the Board and Founder Vice Chairman of the Board and
Chief Executive Officer

[right margin]

Table of Contents
Report Highlights ...................................................... 2
Market Perspective ..................................................... 3
NEW OPPORTUNITIES
Performance Information ................................................ 4
Management Q&A ......................................................... 5
Portfolio at a Glance .................................................. 5
Top Ten Holdings ....................................................... 6
Top Five Industries .................................................... 6
Types of Investments ................................................... 7
Schedule of Investments ................................................ 8
Financial Highlights ................................................... 15
FINANCIAL STATEMENTS
Statement of Assets and
Liabilities ......................................................... 10
Statement of Operations ................................................ 11
Statements of Changes
in Net Assets ....................................................... 12
Notes to Financial
Statements .......................................................... 13
OTHER INFORMATION
Retirement Account
Information ......................................................... 16
Background Information
Investment Philosophy
and Policies ..................................................... 17
Comparative Indices ................................................. 17
Portfolio Managers .................................................. 17
Glossary ............................................................... 18

www.americancentury.com 1

Report Highlights
- --------------------------------------------------------------------------------

MARKET PERSPECTIVE

* All three growth stock categories--small, midsize, and large--posted
double-digit returns during the six-month period.

* The Federal Reserve's lowering of short-term interest rates last fall
sparked rallies in both ends of the market, but the move was short-lived
for smaller stocks. Later, in April, value stocks and those of large
industrial companies shot up, as the Dow Jones Industrial Average gained
more than 10% during the month, compared to a 3.79% increase in the S&P 500
Index. At the other end of the market, the Russell 2000, a small-cap index,
was up almost 9% for the month.

NEW OPPORTUNITIES

* New Opportunities rode a rally in small and midsize stocks to one of its
best six-month runs ever, significantly outperforming its benchmark. The
fund's larger positions fared particularly well over the period.

* New Opportunities was drawn to computer software companies over the period
whose products help companies in all parts of the economy work more
efficiently. Pinnacle Systems, its largest holding, makes computer-based
editing systems for broadcasters. Gemstar International Group, its
second-largest holding, has invented new technology for videocassette
recorders.

[left margin]

"THE FUND'S LARGER POSITIONS FARED PARTICULARLY WELL OVER THE PERIOD."

NEW OPPORTUNITIES
(TWNOX)
TOTAL RETURNS: AS OF 4/30/99
6 Months 32.70%*
1 Year 5.15%
INCEPTION DATE: 12/26/96
NET ASSETS: $259.9 million

*Not annualized.

Investment terms are defined in the Glossary on pages 18-19.

2 1-800-345-2021

Market Perspective from James E. Stowers III
- --------------------------------------------------------------------------------

[photo of James E. Stowers III]
James E. Stowers III, Chief Executive Officer of American Century

MARKET PERFORMANCE WAS BROADER

THE FEDERAL RESERVE STEPS IN

As you may recall, back in September 1998, the financial markets were less
tranquil. Many were in crisis until the Federal Reserve Board (the U.S. central
bank) stepped in and stabilized the situation by lowering short-term interest
rates. The strategy worked and smaller stocks rallied. Large stocks moved higher
too, led by technology and Internet-related companies, but smaller stocks
appeared to fall back into familiar patterns--greater volatility, and lower
returns. In early spring, however, this changed noticeably.

THE S&P 500 SLOWS

In April, value stocks and those of large manufacturers such as Dow
Chemical and Caterpillar shot up. The Dow Jones Industrial Average jumped 10.25%
in April, trouncing the S&P 500's 3.79% gain. The S&P 400, the midsize
benchmark, also came out slightly ahead as well, up 7.88% for the month, while
the Russell 2000, a small-cap index, rose 8.96%. The S&P 500/BARRA Value Index,
a popular measure of value stocks, leapt 8.62%, posting one of its best
performances in years.

Several factors contributed to the change in market dynamics. For one,
market leadership had remained unusually narrow, with size the chief
differential in performance.

It's too early to tell whether this scenario will prove true, but the
perception sparked an unusually robust short-term reaction.

GOOD BUSINESSES, GOOD STOCKS

At American Century, we try not to overreact to short-term market
developments. Our focus is on helping share-holders build their capital over
time. We do that by searching for the best smaller businesses available,
particularly those with accelerating rates of earnings growth, no matter which
sector of the economy they represent.

[right margin]

"THE RETURNS OF ALL THREE STOCK CATEGORIES-- SMALL, MIDSIZE, AND LARGE--WERE
SQUARELY IN DOUBLE DIGITS."

MARKET RETURNS
FOR THE SIX MONTHS ENDED APRIL 30, 1999

S&P 500 22.31%
S&P MIDCAP 400 18.86%
RUSSELL 2000 15.16%

Source: Lipper Inc.

These indices represent the performance of large-, medium-, and
small-capitalization stocks.

[mountain chart - data below]

MARKET PERFORMANCE (GROWTH OF $1.00)
FOR THE SIX MONTHS ENDED APRIL 30, 1999

Date S&P 500 S&P Mid-Cap 400 Russell 2000
10/31/98 1.00 1.00 1.00
11/30/98 1.06 1.05 1.05
12/31/98 1.12 1.18 1.12
1/31/99 1.17 1.13 1.13
2/28/99 1.13 1.07 1.04
3/31/99 1.18 1.10 1.06
4/30/99 1.22 1.19 1.15

Value on S&P 500 S&P MidCap 400 Russell 2000
4/30/99 $1.22 $1.19 $1.15

www.americancentury.com 3

New Opportunities--Performance
- --------------------------------------------------------------------------------

TOTAL RETURNS AS OF APRIL 30, 1999

NEW OPPORTUNITIES RUSSELL 2000
GROWTH INDEX

6 MONTHS(1) ..................... 32.70% 25.74%
1 YEAR .......................... 5.15% -3.77%
AVERAGE ANNUAL RETURNS
LIFE OF FUND(2) ................. 10.59% 9.03%(3)

(1) Returns for periods less than one year are not annualized.

(2) Inception was 12/26/96.

(3) Since 12/31/96, the date nearest the fund's inception for which data are
available.

See pages 17-19 for information about the Russell 2000 Growth Index and returns.

[mountiain chart - data below]

GROWTH OF $10,000 OVER LIFE OF FUND

Value on 4/30/99
New Opportunities $12,436
Russell 2000 Growth Index $12,233

Date New Opportunities Russell 2000 Growth Index
12/31/96 10000 10000
1/31/97 9745 10250
2/28/97 8763 9631
3/31/97 7957 8951
4/30/97 7860 8847
5/31/97 9294 10177
6/30/97 9962 10522
7/31/97 10847 11061
8/31/97 10945 11392
9/30/97 11712 12301
10/31/97 10434 11562
11/30/97 10060 11287
12/31/97 10316 11294
1/31/98 10001 11144
2/28/98 10826 12128
3/31/98 11455 12636
4/30/98 11829 12713
5/31/98 11043 11789
6/30/98 11633 11909
7/31/98 11024 10914
8/31/98 8784 8395
9/30/98 9117 9247
10/31/98 9373 9729
11/30/98 10198 10484
12/31/98 11691 11433
1/31/99 11848 11948
2/28/99 10885 10854
3/31/99 11769 11241
4/30/99 12436 12233

The graph at left shows the growth of a $10,000 investment over the life of the
fund, while the chart below shows the fund's year-by-year performance. The
Russell 2000 Growth Index is provided for comparison in each graph. New
Opportunities' total returns include operating expenses (such as transaction
costs and management fees) that reduce returns, while the total returns of the
Russell 2000 Growth Index do not. Past performance does not guarantee future
results. Investment return and principal value will fluctuate, and redemption
value may be more or less than original cost.

[bar chart - data below]

ONE-YEAR RETURNS OVER LIFE OF FUND (PERIODS ENDING APRIL 30)

New Opportunities Russell 2000 Growth Index
Date Return Return
4/30/97 -21.41% -11.52%
4/30/98 50.50% 43.70%
4/30/99 5.15% -3.77%

*Fund performance from 12/26/96 to 4/30/97; index performance from 12/31/96 to
4/30/97.

4 1-800-345-2021

New Opportunities--Q&A
- --------------------------------------------------------------------------------

[photo of Chris Boyd and John Seitzer]
Chris Boyd and John Seitzer, portfolio managers on the New Opportunities
investment team

An interview with Chris Boyd and John Seitzer, portfolio managers on the
New Opportunities investment team.

WHAT WAS NEW OPPORTUNITIES' RETURN FOR THE SIX MONTHS ENDED APRIL 30, 1999?

New Opportunities rode a rally in small and midsize stocks to a 32.70%
return, one of its best six-month runs ever. Its benchmark, the Russell 2000
Growth Index, was up 25.74% for the period.

WHICH STOCKS CONTRIBUTED TO RETURNS OVER THE SIX MONTHS?

New Opportunities found itself in the enviable position of having some of
its largest positions turn in the best results.

Pinnacle Systems, our largest holding at 5% of the fund, makes
computer-based video editing systems. Broadcasters use its software to produce
graphics, animation, and other special effects (such as titles and graphics for
sporting events like the Super Bowl or the Olympics). In 1998 alone, the company
introduced 12 new products, including video software tools for desktop computers
and software for editing and enhancing home videos. Pinnacle's stock rose 60%
over the period.

Gemstar International Group, our second-largest holding, was our
best-performing stock, gaining 90%. This company has invented new technology for
videocassette recorders that makes it possible for consumers to record shows
with greater ease. "Why should taping TV shows with a VCR be any more difficult
than dialing a telephone?" the company asks. Its flagship product enables a
consumer to record shows simply by punching in a show's numerical code found in
TV listings. Gemstar's technology is built into every major VCR brand. The
company also has patents on VCR functions that quickly and easily find and play
back recorded shows, as well as patents for on-screen interactive programming
guides.

Harmonic Lightwaves is a relative newcomer to the portfolio. This
communications equipment company is a high-tech provider to the cable industry.
AT&T's recent acquisition of the cable giant Tele-Communications is another sign
that cable networks may well be the communications pipelines of the future,
through which local phone, Internet access, and long-distance services will be
provided. Companies like AT&T and Microsoft are investing billions to make that
possible, and firms like Harmonic are benefiting from the tremendous capital
spending going on in the cable industry. The stock has risen more than 300%
since we purchased it.

COMPUTER SOFTWARE AND SERVICES COMPANIES COMPRISE ONE OF THE PORTFOLIO'S LARGEST
INDUSTRY WEIGHTINGS. WHAT'S THE ATTRACTION OF THESE COMPANIES?

The first thing we're attracted by is their earnings acceleration.
Secondly, in addition to its growth prospects, the software industry is much
more diversified than one might think. Some investors hear the word "software"
and think Internet, but that's just the tip of

[right margin]

"NEW OPPORTUNITIES FOUND ITSELF IN THE ENVIABLE POSITION OF HAVING SOME OF ITS
LARGEST POSITIONS TURN IN THE BEST RESULTS."

PORTFOLIO AT A GLANCE
4/30/99 10/31/98
NO. OF COMPANIES 99 95
MEDIAN P/E RATIO 25.5 23.7
MEDIAN MARKET $597 $446
CAPITALIZATION MILLION MILLION
PORTFOLIO TURNOVER 83%(1) 147%(2)
EXPENSE RATIO (FOR
INVESTOR CLASS) 1.50%(3) 1.50%

(1) Six months ended 4/30/99.

(2) Year ended 10/31/98.

(3) Annualized.

Investment terms are defined in the Glossary on pages 18-19.

www.americancentury.com 5

New Opportunities--Q&A
- --------------------------------------------------------------------------------
(Continued)

the iceberg. There's a huge demand for computer software to help companies in
all walks of life solve problems and work more efficiently. Two good-performing
examples from our portfolio are Project Software & Development and New Dimension
Software.

Project Software & Development is a leading producer of what is known as
"maintenance management" software, used primarily by manufacturing companies to
find ways to reduce downtime, control expenses, and effectively deploy equipment
and personnel. New Dimension Software centers on "application service assurance"
- --keeping critical computer systems up and running. Its typical customers
include credit card companies that process millions of transactions a day and
airlines who rely on timely data to book reservations and schedule flights,
maintenance, and traffic.

WHICH STOCKS DIDN'T WORK OUT AS YOU EXPECTED?

Unfortunately, our greatest disappointment was one of our larger positions,
a biotechnology company called PathoGenesis. In 1998, the company came out with
a promising new drug to treat cystic fibrosis. Early indications from
PathoGenesis suggested that the drug was selling well. But, as is sometimes the
case with new drugs, written prescriptions told one story, while distribution
numbers told another. Sales turned out to be well below what investors expected
and the stock crashed literally overnight. We closed out our investment.

In our last report, we discussed our confidence in business services firms,
companies that help other businesses solve problems outside their expertise,
known in the field as "outsourcing." We expected one of our largest holdings in
that field, Administaff, to have a good 1999 after posting a 40% increase in
revenues in 1998. The company's main business is serving as a full-service human
resources department for small and medium-sized businesses. Unfortunately, a
marketing alliance forged with American Express has not provided the expected
boost and earnings have slowed.

HA-LO Industries, a company that provides branded promotional products
(corporate names on clothing, watches, golf bags, etc.) and specializes in
corporate promotional events, was our best-performing stock in the fourth
quarter of 1998. This year, revenues from a new part of its business,
telemarketing services, came in below expectations. Anytime a company's
accelerating growth begins to wane, we consider it a candidate for sale. Thus,
HA-LO was sold and the proceeds redeployed in new positions we think are in a
better position to sustain their earnings and revenue growth.

WHAT ARE SOME OF THOSE NEW POSITIONS, AND WHY DID YOU CHOOSE THEM?

[left margin]

TOP TEN HOLDINGS
% OF FUND INVESTMENTS
AS OF AS OF
4/30/99 10/31/98
PINNACLE SYSTEMS, INC. 5.0% 4.7%
GEMSTAR INTERNATIONAL
GROUP LTD. 4.6% 1.1%
CSG SYSTEMS
INTERNATIONAL, INC. 2.7% 1.6%
HARMONIC
LIGHTWAVES, INC. 2.6% --
VITESSE
SEMICONDUCTOR CORP. 2.3% 1.6%
CONMED CORP. 2.3% 2.4%
DII GROUP, INC. 1.9% 0.6%
CHIREX INC. 1.7% --
INKTOMI CORP. 1.6% --
C-COR ELECTRONICS 1.6% --

TOP FIVE INDUSTRIES
% OF FUND INVESTMENTS
AS OF AS OF
4/30/99 10/31/98
ELECTRICAL & ELECTRONIC
COMPONENTS 16.2% 7.5%
COMPUTER SOFTWARE
& SERVICES 12.9% 8.3%
BUSINESS SERVICES
& SUPPLIES 10.3% 17.7%
COMMUNICATIONS
EQUIPMENT 8.6% 4.9%
MEDICAL EQUIPMENT
& SUPPLIES 5.9% 4.6%

6 1-800-345-2021

New Opportunities--Q&A
- --------------------------------------------------------------------------------
(Continued)

Hewlett-Packard are outsourcing manufacturing and assembly functions to firms
like Jabil that specialize in doing so inexpensively and efficiently. Advanced
Energy Industries is another good growth story in the outsourcing area. The
company makes the specialized power supplies that are a critical component in
equipment used to manufacture computer chips.

U.S. Foodservice, the nation's second-largest distributor of food and
related products to restaurants, hotels, cafeterias and sporting events, has
been the fastest-growing distributor in its industry. Since the company went
public in 1994, it has increased its sales at a compound annual growth rate of
52%. This firm not only does the basics of its business well, it has proven to
be expert at acquiring smaller regional distributors and integrating them
smoothly into its operations.

ChiRex, Inc. is another firm we're optimistic about. This is an outsourcing
company that provides an extensive range of services to pharmaceutical
companies, including research and development, and chemical manufacturing.
Larger drug firms turn to ChiRex to reduce the cost and time associated with
bringing new drugs to market.

One of our new Internet stocks is Inktomi Corp., which develops software
used by Internet service providers to increase the capacity of their networks.
Its applications include the world's largest Internet search engines.

WHAT IS YOUR OUTLOOK FOR THE REST OF THE YEAR?

In our last report to you, which covered a dismal 12-month period for
shares of small and midsized companies, we said it would be hard for investors
to keep ignoring the attractive valuations in those parts of the market. It has
been our view that many well-managed, successful smaller firms were being
completely ignored by investors. In fact, the disparity in returns between the
largest and smallest companies in calendar year 1998 alone was more than 40%
(large-cap up 28%, small-cap down 15%) -- the greatest gap in more than 25
years.

That trend continued in early 1999 as investors focused their enthusiasm
and cash flow on a narrow list of America's largest and most rapidly growing
businesses. In April, however, market sentiment began to shift in favor of both
smaller firms and those with more economic sensitivity. This short period of
improved performance pales against the underperformance these issues have
experienced since 1995, but it is a welcome and favorable turn for the better.

[right margin]

"THIS SHORT PERIOD OF IMPROVED PERFORMANCE PALES AGAINST THE UNDERPERFORMANCE
THESE ISSUES HAVE EXPERIENCED SINCE 1995, BUT IT IS A WELCOME AND FAVORABLE TURN
FOR THE BETTER."

[pie charts - data below]

TYPES OF INVESTMENTS IN THE PORTFOLIO

AS OF APRIL 30, 1999
Common Stocks 99%
Temporary Cash Investments 1%

AS OF OCTOBER 31, 1998
Common Stocks 93%
Temporary Cash Investments 7%

www.americancentury.com 7

New Opportunities--Schedule of Investments
- --------------------------------------------------------------------------------

APRIL 30, 1999 (UNAUDITED)

Shares ($ in Thousands) Value
- --------------------------------------------------------------------------------
================================================================================

COMMON STOCKS--99.0%

AEROSPACE & DEFENSE--3.1%
32,300 Alliant Techsystems Inc.(1) $ 2,645
64,700 Aviation Sales Co.(1) 2,588
47,400 Avondale Industries, Inc.(1) 1,465
49,200 Newport News Shipbuilding Inc. 1,288
-------------
7,986
-------------
AUTOMOBILES & AUTO PARTS--1.8%
110,200 Coachmen Industries, Inc. 2,080
97,900 National R.V. Holdings, Inc.(1) 2,533
-------------
4,613
-------------
BIOTECHNOLOGY--2.1%
153,600 Duramed Pharmaceuticals, Inc.(1) 1,387
38,200 IDEC Pharmaceuticals Corp.(1) 1,934
28,000 QIAGEN N.V. New York Shares(1) 2,041
-------------
5,362
-------------
BROADCASTING & MEDIA--1.4%
61,600 Metro Networks, Inc.(1) 2,787
22,600 Westwood One, Inc.(1) 774
-------------
3,561
-------------
BUILDING & HOME IMPROVEMENTS--1.1%
71,100 Elcor Corp. 2,746
-------------
BUSINESS SERVICES & SUPPLIES--10.3%
67,800 ABM Industries Inc. 2,059
103,000 ABR Information Services, Inc.(1) 1,809
136,200 Acxiom Corp.(1) 3,431
176,500 CSG Systems International, Inc.(1) 6,850
37,500 Express Scripts, Inc. Cl A(1) 2,763
51,700 Kroll--O'Gara Company(1) 1,239
48,100 MAXIMUS, Inc.(1) 1,251
47,100 Modem Media . Poppe Tyson, Inc.(1) 1,654
98,595 Nova Corp.(1) 2,563
95,500 Professional Detailing, Inc.(1) 2,793
8,300 Sykes Enterprises, Inc.(1) 171
-------------
26,583
-------------
COMMUNICATIONS EQUIPMENT--8.5%
165,500 C-COR Electronics, Inc.(1) 4,003
43,100 Extreme Networks, Inc.(1) 2,393
45,000 Gilat Satellite Networks Ltd.(1) 2,334
146,500 Harmonic Lightwaves, Inc.(1) 6,666
90,000 Polycom, Inc.(1) 2,202
76,200 Powerwave Technologies, Inc.(1) 2,317
52,300 Terayon Communication Systems, Inc.(1) 2,108
-------------
22,023
-------------

Shares ($ in Thousands) Value
- -------------------------------------------------------------------------------

COMPUTER SOFTWARE & SERVICES--12.9%
91,100 Advantage Learning Systems, Inc.(1) $ 2,408
108,000 AnswerThink Consulting Group, Inc.(1) 2,400
84,900 Excalibur Technologies Corp.(1) 1,329
34,000 Inktomi Corp.(1) 4,078
49,800 Intraware, Inc.(1) 1,520
21,700 Marimba, Inc.(1) 1,320
23,100 MarketWatch.com, Inc.(1) 1,650
26,000 MiningCo.com, Inc.(1) 1,707
90,000 National Instruments Corp.(1) 3,063
25,800 pcOrder.com, Inc.(1) 1,584
136,200 Proxicom, Inc.(1) 3,035
44,500 QRS Corp.(1) 2,439
107,600 Rational Software Corp.(1) 3,194
54,200 Sapient Corp.(1) 3,408
-------------
33,135
-------------

CONSTRUCTION & PROPERTY
DEVELOPMENT--1.1%
148,300 Insituform Technologies, Inc. Cl A(1) 2,869
-------------
CONSUMER PRODUCTS--1.3%
35,700 Chattem, Inc.(1) 1,393
139,200 Helen of Troy Ltd.(1) 1,944
-------------
3,337
-------------
DIVERSIFIED COMPANIES--0.5%
82,600 GP Strategies Corp.(1) 1,270
-------------
ELECTRICAL & ELECTRONIC
COMPONENTS--16.1%
143,600 Advanced Energy Industries, Inc.(1) 3,998
192,400 Aeroflex Inc.(1) 2,814
156,900 DII Group, Inc.(1) 4,874
28,900 Hi/fn, Inc.(1) 1,563
75,400 Jabil Circuit, Inc.(1) 3,511
51,000 Optical Coating Laboratory, Inc. 3,127
238,100 Pinnacle Systems, Inc.(1) 12,948
22,000 Uniphase Corp.(1) 2,666
128,000 Vitesse Semiconductor Corp.(1) 5,956
-------------
41,457
-------------
FINANCIAL SERVICES--0.2%
41,400 Actrade International, Ltd.(1) 524
-------------
FOOD & BEVERAGE--3.8%
95,400 American Italian Pasta Co. Cl A(1) 2,564
89,300 Performance Food Group Co.(1) 2,378
35,700 Suiza Foods Corp.(1) 1,341
86,000 U.S. Foodservice, Inc.(1) 3,617
-------------
9,900
-------------

See Notes to Financial Statements

8 1-800-345-2021

New Opportunities--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)

APRIL 30, 1999 (UNAUDITED)

Shares ($ in Thousands) Value
- --------------------------------------------------------------------------------

HEALTHCARE--1.4%
123,100 Hooper Holmes, Inc. $ 1,962
69,400 Province Healthcare Co.(1) 1,538
-------------
3,500
-------------
INSURANCE--0.6%
25,000 Blanch (E.W.) Holdings, Inc. 1,472
-------------
LEISURE--5.7%
112,200 Gemstar International Group Ltd.(1) 11,806
26,300 International Speedway Corp. Cl A 1,364
36,800 Speedway Motorsports, Inc.(1) 1,596
-------------
14,766
-------------
MACHINERY & EQUIPMENT--2.9%
166,100 Brooks Automation, Inc.(1) 3,582
43,600 Electro Scientific Industries, Inc.(1) 1,666
87,900 PRI Automation, Inc.(1) 2,187
-------------
7,435
-------------
MEDICAL EQUIPMENT & SUPPLIES--5.9%
42,800 Closure Medical Corp.(1) 1,372
204,300 CONMED Corp.(1) 5,906
104,000 KeraVision, Inc.(1) 960
53,500 Novoste Corp.(1) 1,184
71,100 Ocular Sciences, Inc.(1) 2,175
32,900 Techne Corp.(1) 905
66,800 Xomed Surgical Products, Inc.(1) 2,783
-------------
15,285
-------------
PHARMACEUTICALS--1.7%
168,400 ChiRex Inc.(1) 4,368
-------------
RESTAURANTS--1.1%
116,200 PJ America, Inc.(1) 2,709
-------------
RETAIL (APPAREL)--2.6%
66,300 Chico's FAS, Inc.(1) 1,670
45,200 Children's Place Retail
Stores, Inc. (The)(1) 1,636
145,700 DM Management Co.(1) 3,483
-------------
6,789
-------------

Shares ($ in Thousands) Value
- -------------------------------------------------------------------------------

RETAIL (GENERAL MERCHANDISE)--2.9%
88,000 Casey's General Stores, Inc. $ 1,174
110,000 Family Dollar Stores, Inc. 2,654
63,600 Fred's, Inc. 739
153,700 Tuesday Morning Corp.(1) 3,007
-------------
7,574
-------------
RETAIL (SPECIALTY)--2.9%
54,800 Action Performance Cos. Inc.(1) 1,860
218,500 Sunglass Hut International, Inc.(1) 2,759
101,000 Tractor Supply Co.(1) 2,784
-------------
7,403
-------------
TELEPHONE COMMUNICATIONS--1.2%
35,000 Exodus Communications, Inc.(1) 3,153
-------------
TEXTILES & APPAREL--1.5%
111,300 Polymer Group, Inc.(1) 1,155
43,650 Quiksilver, Inc.(1) 1,159
30,700 Tarrant Apparel Group(1) 1,454
-------------
3,768
-------------
TRANSPORTATION--2.2%
73,600 Eagle USA Airfreight, Inc.(1) 2,698
131,200 Forward Air Corp.(1) 2,911
-------------
5,609
-------------
WIRELESS COMMUNICATIONS--2.2%
149,600 American Tower Corp. Cl A(1) 3,170
34,500 Crown Castle International Corp.(1) 658
93,500 Pinnacle Holdings Inc.(1) 1,914
-------------
5,742
-------------
TOTAL COMMON STOCKS 254,939
-------------
(Cost $191,113)

TEMPORARY CASH INVESTMENTS--1.0%
Repurchase Agreement, Morgan Stanley Group,
Inc., (U.S. Treasury obligations), in a joint
trading account at 4.84%, dated 4/30/99,
due 5/3/99 (Delivery value $2,701) 2,700
-------------
(Cost $2,700)

TOTAL INVESTMENT SECURITIES--100.0% $ 257,639
=============
(Cost $193,813)

NOTES TO SCHEDULE OF INVESTMENTS

(1) Non-income producing.

See Notes to Financial Statements

www.americancentury.com 9

Statement of Assets and Liabilities
- --------------------------------------------------------------------------------

APRIL 30, 1999 (UNAUDITED)

ASSETS (In Thousands Except Per Share Amounts)

Investment securities, at value
(identified cost of $193,813) (Note 3) ........................ $ 257,639
Cash .......................................................... 678
Receivable for investments sold ............................... 9,934
Dividends and interest receivable ............................. 19
---------
268,270
---------
LIABILITIES
Payable for investments purchased ............................. 8,040

Accrued management fees (Note 2) .............................. 317
---------
8,357
---------

Net Assets .................................................... $ 259,913
=========

CAPITAL SHARES, $0.01 PAR VALUE
Authorized .................................................... 100,000
=========
Outstanding ................................................... 41,048
=========

Net Asset Value Per Share ..................................... $ 6.33
=========

NET ASSETS CONSIST OF:
Capital (par value and paid in surplus) ....................... $ 191,828
Net investment loss ........................................... (1,533)
Accumulated undistributed net realized gain on
investment transactions .................................... 5,792
Net unrealized appreciation on investments (Note 3) ........... 63,826
---------
$ 259,913
=========

- --------------------------------------------------------------------------------
UNDERSTANDING THE STATEMENTS OF ASSETS AND LIABILITIES--This statement details
what the fund owns (assets), what it owes (liabilities), and its net assets as
of the last day of the period. If you subtract what the fund owes from what it
owns, you get the fund's net assets. The net assets divided by the total number
of shares outstanding gives you the price of an individual share, or the net
asset value per share.

See Notes to Financial Statements

10 1-800-345-2021

Statement of Operations
- --------------------------------------------------------------------------------

FOR THE SIX MONTHS ENDED APRIL 30, 1999 (UNAUDITED)

INVESTMENT LOSS (In Thousands)
Income:
Interest ....................................................... $ 203
Dividends ...................................................... 82
--------
285
--------
Expenses (Note 2):
Management fees ................................................ 1,817
Directors' fees and expenses ................................... 1
--------
1,818
--------

Net investment loss ............................................ (1,533)
--------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS (NOTE 3)
Net realized gain on investments ............................... 19,500
Change in net unrealized appreciation on investments ........... 49,453
--------

Net realized and unrealized gain on investments ................ 68,953
--------

Net Increase in Net Assets Resulting from Operations ........... $ 67,420
========

See Notes to Financial Statements

www.americancentury.com 11

Statements of Changes in Net Assets
- --------------------------------------------------------------------------------

SIX MONTHS ENDED APRIL 30, 1999 (UNAUDITED) AND YEAR ENDED OCTOBER 31, 1998

Increase (Decrease) in Net Assets 1999 1998

OPERATIONS (In Thousands)
Net investment loss ............................ $ (1,533) $ (2,780)
Net realized gain (loss) on investments ........ 19,500 (9,957)
Change in net unrealized appreciation
on investments .............................. 49,453 (12,322)
--------- ---------
Net increase (decrease) in net assets
resulting from operations ................... 67,420 (25,059)
--------- ---------

CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold ...................... 14,578 45,749
Payments for shares redeemed ................... (35,576) (38,465)
--------- ---------
Net increase (decrease) in net assets
from capital share transactions ............. (20,998) 7,284
--------- ---------

Net increase (decrease) in net assets .......... 46,422 (17,775)

NET ASSETS
Beginning of period ............................ 213,491 231,266
--------- ---------
End of period .................................. $ 259,913 $ 213,491
========= =========
Net investment loss ............................ $ (1,533) --
========= =========

TRANSACTIONS IN SHARES OF THE FUND
Sold ........................................... 2,602 8,852
Redeemed ....................................... (6,351) (7,584)
--------- ---------
Net increase (decrease) ........................ (3,749) 1,268
========= =========

- --------------------------------------------------------------------------------
UNDERSTANDING THE STATEMENTS OF CHANGES IN NET ASSETS--These statements show how
the fund's net assets changed over the past two reporting periods. It details
how much a fund grew or shrank as a result of:

* operations--a summary of the Statement of Operations from the previous page
for the most recent period

* distributions--income and gains distributed to shareholders

* share transactions--shareholders' purchases, reinvestments, and redemptions

Net assets at the beginning of the period plus the sum of operations,
distributions to shareholders and capital share transactions result in net
assets at the end of the period.

See Notes to Financial Statements

12 1-800-345-2021

Notes to Financial Statements
- --------------------------------------------------------------------------------

APRIL 30, 1999 (UNAUDITED)

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SECURITY VALUATIONS -- Portfolio securities traded primarily on a principal
securities exchange are valued at the last reported sales price, or the mean of
the latest bid and asked prices where no last sales price is available.
Securities traded over-the-counter are valued at the mean of the latest bid and
asked prices or, in the case of certain foreign securities, at the last reported
sales price, depending on local convention or regulation. When valuations are
not readily available, securities are valued at fair value as determined in
accordance with procedures adopted by the Board of Directors.

REPURCHASE AGREEMENTS -- The fund may enter into repurchase agreements with
institutions that the fund's investment manager, American Century Investment
Management, Inc. (ACIM), has determined are creditworthy pursuant to criteria
adopted by the Board of Directors. Each repurchase agreement is recorded at
cost. The fund requires that the collateral, represented by securities, received
in a repurchase transaction be transferred to the custodian in a manner
sufficient to enable the fund to obtain those securities in the event of a
default under the repurchase agreement. ACIM monitors, on a daily basis, the
securities transferred to ensure that the value, including accrued interest, of
the securities under each repurchase agreement is equal to or greater than
amounts owed to the fund under each repurchase agreement.

JOINT TRADING ACCOUNT -- Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the fund, along with other registered
investment companies having management agreements with ACIM may transfer
uninvested cash balances into a joint trading account. These balances are
invested in one or more repurchase agreements that are collateralized by U.S.
Treasury or Agency obligations.

DISTRIBUTIONS TO SHAREHOLDERS -- Distributions to shareholders are recorded
on the ex-dividend date. Distributions from net investment income and net
realized gains are declared and paid annually.

The character of distributions made during the year from net investment
income or net realized gains may differ from their ultimate characterization for
federal income tax purposes. These differences reflect the differing character
of certain income items and net realized gains and losses for financial
statement and tax purposes and may result in reclassification among certain
capital accounts.

At October 31, 1998, accumulated net realized capital loss carryovers of
$12,821,908 (expiring 2005 through 2006) may be used to offset future taxable
gains.

ADDITIONAL INFORMATION -- Funds Distributor, Inc. (FDI) is the
corporation's distributor. Certain officers of FDI are also officers of the
corporation.

www.americancentury.com 13

Notes to Financial Statements
- --------------------------------------------------------------------------------
(Continued)

APRIL 30, 1999 (UNAUDITED)

- --------------------------------------------------------------------------------
2. TRANSACTIONS WITH RELATED PARTIES

- --------------------------------------------------------------------------------
3. INVESTMENT TRANSACTIONS

Purchases and sales of investment securities, excluding short-term
investments, totaled $195,885,434 and $205,805,595, respectively.

As of April 30, 1999, accumulated net unrealized appreciation was
$63,402,475, based on the aggregate cost of investments for federal income tax
purposes of $194,236,098, which consisted of unrealized appreciation of
$67,490,116 and unrealized depreciation of $4,087,641.

- --------------------------------------------------------------------------------
4. BANK LOANS

- --------------------------------------------------------------------------------
5. FUND EVENTS

The following name change became effective March 1, 1999.
NEW NAME FORMER NAME
FUND: New Opportunities Fund American Century -- Twentieth
Century New Opportunities Fund

14 1-800-345-2021

New Opportunities--Financial Highlights
- --------------------------------------------------------------------------------

<TABLE>
FOR A SHARE OUTSTANDING THROUGHOUT THE YEARS ENDED OCTOBER 31 (EXCEPT AS NOTED)

1999(1) 1998 1997(2)

PER-SHARE DATA
<S> <C> <C> <C>
Net Asset Value, Beginning of Period ................$ 4.77 $ 5.31 $ 5.00
----------- ----------- -----------
Income From Investment Operations
Net Investment Loss ............................... (0.04) (0.06) (0.04)
Net Realized and Unrealized Gain (Loss)
on Investment Transactions ....................... 1.60 (0.48) 0.35
----------- ----------- -----------
Total From Investment Operations .................. 1.56 (0.54) 0.31
----------- ----------- -----------
Net Asset Value, End of Period ......................$ 6.33 $ 4.77 $ 5.31
=========== =========== ===========
Total Return(3) ................................... 32.70% (10.17)% 6.20%

RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses to Average Net Assets ... 1.50%(4) 1.50% 1.49%(4)
Ratio of Net Investment Loss to Average Net Assets .. (1.27)%(4) (1.16)% (1.09)%(4)
Portfolio Turnover Rate ............................. 83% 147% 118%
Net Assets, End of Period (in thousands) ............$ 259,913 $ 213,491 $ 231,266
</TABLE>

(1) Six months ended April 30, 1999 (unaudited).

(2) December 26, 1996 (inception) through October 31, 1997.

(3) Total return assumes reinvestment of dividends and capital gains
distributions, if any. Total returns for periods less than one year are not
annualized.

(4) Annualized.

- --------------------------------------------------------------------------------
UNDERSTANDING THE FINANCIAL HIGHLIGHTS--This statement itemizes current period
activity and statistics and provides comparison data for the last five fiscal
years (or less, if the fund is not five years old).

See Notes to Financial Statements

www.americancentury.com 15

Retirement Account Information
- --------------------------------------------------------------------------------

16 1-800-345-2021

Background Information
- --------------------------------------------------------------------------------

INVESTMENT PHILOSOPHY AND POLICIES

American Century offers 13 growth funds including domestic equity,
specialty, international, and global. The philosophy behind these growth funds
focuses on three important principles. First, the funds seek to invest in
successful companies, which we define as those with growing earnings and
revenues. Second, we attempt to keep the funds fully invested, regardless of
short-term market activity. Experience has shown that market gains can occur in
unpredictable spurts and that missing those opportunities can significantly
limit the potential for gain. Third, the funds are managed by teams rather than
by one "star." We believe this allows us to make better, more consistent
management decisions.

In addition to these principles, each fund has its own investment policies.

AMERICAN CENTURY NEW OPPORTUNITIES generally invests in the securities of
small companies that exhibit accelerating growth. Historically, small-cap stocks
have been more volatile than the stocks of larger, more-established companies.
Therefore, the fund is subject to significant price volatility, but offers
long-term growth potential.

COMPARATIVE INDICES

The following indices are used in the report to serve as fund performance
comparisons. They are not investment products available for purchase.

The DOW JONES INDUSTRIAL AVERAGE (DJIA) is a price-weighted average of 30
actively traded Blue Chip stocks, primarily industrials but including
service-oriented firms. Prepared and published by Dow Jones & Co., it is the
oldest and most widely quoted of all the market indicators.

The S&P 500 is a capitalization-weighted index of the stocks of 500
publicly traded U.S. companies that are considered to be leading firms in
dominant industries. Created by Standard & Poor's Corporation, it is considered
to be a broad measure of U.S. stock market performance.

The S&P MIDCAP 400 is a capitalization-weighted index of the stocks of the
400 largest leading U.S. companies not included in the S&P 500. Created by
Standard & Poor's Corporation, it is considered to represent the performance of
mid-cap stocks generally.

The RUSSELL 2000 INDEX was created by the Frank Russell Company. It
measures the performance of the 2,000 smallest of the 3,000 largest publicly
traded U.S. companies based on total market capitalization. The Russell 2000
represents approximately 10% of the total market capitalization of the top 3,000
companies. The index is further broken down into two mutually exclusive value
and growth indices. The RUSSELL 2000 GROWTH INDEX, used in this report, measures
the performance of those Russell 2000 companies with higher price-to-book ratios
and higher forecasted growth rates.

[right margin]

PORTFOLIO MANAGERS
NEW OPPORTUNITIES
CHRIS BOYD, CFA
JOHN SEITZER, CFA

www.americancentury.com 17

Glossary
- --------------------------------------------------------------------------------

RETURNS

* TOTAL RETURN figures show the overall percentage change in the value of a
hypothetical investment in the fund and assume that all of the fund's
distributions are reinvested.

INVESTMENT TERMS

* EXPENSE RATIO-- the operating expenses of the fund, expressed as a percentage
of average net assets. Shareholders pay an annual fee to the investment manager
for investment advisory and management services. The expenses and fees are
deducted from fund income, not from each shareholder account. (See Note 2 in the
Notes to Financial Statements.)

* MEDIAN MARKET CAPITALIZATION-- market capitalization (market cap) is the total
value of a company's stock and is calculated by multiplying the number of
outstanding common shares by the current share price. The company whose market
cap is in the middle of the portfolio is the median market cap. Half the
companies in the portfolio have values greater than the median, and half have
values that are less. If there is an even number of companies, then the median
is the average of the two companies in the middle.

* NUMBER OF COMPANIES-- the number of different companies held by a fund on a
given date.

* PORTFOLIO TURNOVER-- the percentage of a fund's investment portfolio that is
replaced during a given time period, usually a year. Actively managed portfolios
tend to have higher turnover than passively managed portfolios such as index
funds.

* PRICE/BOOK RATIO-- a stock value measurement calculated by dividing a
company's stock price by its book value per share, with the result expressed as
a multiple instead of as a percentage. (Book value per share is calculated by
subtracting a company's liabilities from its assets, then dividing that value by
the number of outstanding shares.)

* PRICE/EARNINGS (P/E) RATIO-- a stock value measurement calculated by dividing
a company's stock price by its earnings per share, with the result expressed as
a multiple instead of as a percentage. (Earnings per share is calculated by
dividing the after-tax earnings of a corporation by its outstanding shares.)

TYPES OF STOCKS

* BLUE CHIP STOCKS-- stocks of the most established companies in American
industry. They are generally large, fairly stable companies that have
demonstrated consistent earnings and usually have long-term growth potential.
Examples include General Electric and Coca-Cola.

* CYCLICAL STOCKS-- generally considered to be stocks whose price and earnings
fluctuations tend to follow the ups and downs of the business cycle. Examples
include the stocks of automobile manufacturers, steel producers, and textile
operators.

* GROWTH STOCKS-- stocks of companies that have experienced above-average
earnings growth and are expected to continue such growth. These stocks often
sell at high P/E ratios. Examples can include the stocks

18 1-800-345-2021

Glossary
- --------------------------------------------------------------------------------
(Continued)

of high-tech, healthcare, and consumer staples companies.

* LARGE-CAPITALIZATION ("LARGE-CAP") STOCKS-- generally considered to be stocks
of companies with a market capitalization (the total value of a company's
outstanding stock) of more than $5 billion. These tend to be the stocks that
make up the Dow Jones Industrial Average and the S&P 500.

* MEDIUM-CAPITALIZATION ("MID-CAP") STOCKS-- generally considered to be stocks
of companies with a market capitalization (the total value of a company's
outstanding stock) of between $1 billion and $5 billion. These tend to be the
stocks that make up the S&P 400.

* SMALL-CAPITALIZATION ("SMALL-CAP") STOCKS-- generally considered to be stocks
of companies with a market capitalization (the total value of a company's
outstanding stock) of less than $1 billion. These tend to be the stocks that
make up the Russell 2000 Index.

* VALUE STOCKS-- generally considered to be stocks that are purchased because
they are relatively inexpensive. These stocks are typically characterized by low
P/E ratios.

FUND CLASSIFICATIONS

INVESTMENT OBJECTIVE

The investment objective may be based on the fund's objective as stated in
its prospectus or fund profile, or the fund's categorization by independent
rating organizations based on its management style.

* CAPITAL PRESERVATION -- offers taxable and tax-free money market funds for
relative stability of principal and liquidity.

* INCOME -- offers funds that can provide current income and competitive yields,
as well as a strong and stable foundation and generally lower volatility levels
than stock funds.

* GROWTH & INCOME -- offers funds that emphasize both growth and income,
diversification, varying capitalization sizes, and different investment styles
and strategies.

* GROWTH -- offers funds with a focus on capital appreciation and long-term
growth, generally providing high return potential with corresponding high price
fluctuation risk.

RISK

* CONSERVATIVE -- these funds generally provide lower return potential with
either low or minimal price fluctuation risk.

* MODERATE -- these funds generally provide moderate return potential with
moderate price fluctuation risk.

* AGGRESSIVE -- these funds generally provide high return potential with
corresponding high price fluctuation risk.

www.americancentury.com 19

Notes
- --------------------------------------------------------------------------------

20 1-800-345-2021

[inside back cover]

RISK LEVEL - CONSERVATIVE

- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE - INCOME
- --------------------------------------------------------------------------------

RISK LEVEL - AGGRESSIVE

TAXABLE BONDS TAX-FREE BONDS
Target 2025* CA High-Yield Municipal
Target 2020* High-Yield Municipal
Target 2015*
Target 2010*
High-Yield
International Bond

RISK LEVEL - MODERATE

TAXABLE BONDS TAX-FREE BONDS
Long-Term Treasury CA Long-Term Tax-Free
Target 2005* Long-Term Tax-Free
Bond CA Insured Tax-Free
Premium Bond

RISK LEVEL - CONSERVATIVE

RISK LEVEL - AGGRESSIVE

DOMESTIC EQUITY
Small Cap Quantitative
Small Cap Value

RISK LEVEL - MODERATE

- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE - GROWTH
- --------------------------------------------------------------------------------

RISK LEVEL - AGGRESSIVE

RISK LEVEL - MODERATE

SPECIALTY
Global Natural Resources

The classification of funds by risk category is based on quantitative historical
measures as well as qualitative prospective measures. It is not intended to be a
precise indicator of future risk or return levels. The degree of risk within
each category can vary significantly, and some fund returns have historically
been higher than more aggressive funds or lower than more conservative funds.
Please be aware that a fund's category may change over time. Therefore, it is
important that you read a fund's prospectus or fund profile carefully before
investing to ensure its objectives, policies and risk potential are consistent
with your needs.

For a definition of fund categories, see the Glossary.

[back cover]

[american century logo(reg.sm)]
American
Century

P.O. BOX 419200
KANSAS CITY, MISSOURI 64141-6200

WWW.AMERICANCENTURY.COM

INVESTOR RELATIONS
1-800-345-2021 OR 816-531-5575

AUTOMATED INFORMATION LINE
1-800-345-8765

FAX: 816-340-7962

TELECOMMUNICATIONS DEVICE FOR THE DEAF
1-800-634-4113 OR 816-444-3485

BUSINESS, NOT-FOR-PROFIT, EMPLOYER-SPONSORED RETIREMENT PLANS
1-800-345-3533

AMERICAN CENTURY MUTUAL FUNDS INC.

INVESTMENT MANAGER
AMERICAN CENTURY INVESTMENT MANAGEMENT, INC.
KANSAS CITY, MISSOURI

THIS REPORT AND THE STATEMENTS IT CONTAINS ARE SUBMITTED FOR THE GENERAL
INFORMATION OF OUR SHAREHOLDERS. THE REPORT IS NOT AUTHORIZED FOR DISTRIBUTION
TO PROSPECTIVE INVESTORS UNLESS PRECEDED OR ACCOMPANIED BY AN EFFECTIVE
PROSPECTUS.

9906 Funds Distributor, Inc.
SH-BKT-16620 (c)1999 American Century Services Corporation
<PAGE>
[front cover]

APRIL 30, 1999

SEMIANNUAL REPORT
AMERICAN CENTURY

[graphic of stairs]

TAX-MANAGED VALUE

[american century logo(reg.sm)]
American
Century

[inside front cover]

Y2K TESTING EFFORTS PAY DIVIDENDS IN PREPAREDNESS
- --------------------------------------------------------------------------------

Year 2000 Readiness Disclosure

WHAT'S NEW...

Our new fund guide, INVESTING WITH AMERICAN CENTURY, will help you navigate
through our selection of funds. This helpful booklet includes information
about risk levels, objectives, investment styles and strategies.

AMERICAN CENTURY CATALOG OF TOOLS & SERVICES lists all the free educational
materials available to investors.

FUND PROFILES are now available for many American Century funds when you
request information about a fund. Profiles are short pamphlets that follow a
standard SEC format and are intended to help you easily compare our funds
with other companies' funds. When you invest you will receive a full
prospectus, which contains more detailed information about your new fund.

To order any of these materials, please call 1-800-345-2021.

[left margin]

TAX-MANAGED VALUE
(ACTIX)
- -------------------

TURN TO THE INSIDE BACK COVER OF THIS REPORT TO SEE A LIST OF AMERICAN CENTURY
FUNDS CLASSIFIED BY OBJECTIVE AND RISK.

Our Message to You
- --------------------------------------------------------------------------------

[photo of James E. Stowers III and James E. Stowers, Jr.]
James E. Stowers III, seated, with James E. Stowers, Jr.

We would like to begin by welcoming new investors to American Century
Tax-Managed Value Fund. Tax-Managed Value opened on March 31, 1999, and so had
only one month of performance on record when the first half of its fiscal year
ended on April 30. But what a month it was. Earlier in the year, the difference
between the performance of value and growth stocks had widened to historic
proportions: Value stocks had never been cheaper relative to growth. But during
April, value stocks raced ahead, along with the stocks of large, economically
sensitive industrial companies, while growth stocks floundered.

Given the popular pessimism about value investing and the bargains our
portfolio team is finding, we remain firm believers that the value discipline
will perform competitively over time. In the case of Tax-Managed Value, the fund
will be helped along by its strategy of carefully managing the tax consequences
of investments.

At American Century, our focus continues to be on making it easier to do
business with us and on helping our investors reach their financial goals.
Recently, we consolidated all our funds under the American Century name. We
believe the American Century nameplate makes it simpler for you to identify your
funds.

We have also continued to expand the American Century investment team,
which has doubled in the last three years. Our portfolio teams have excellent
depth, with an array of experienced managers and analysts, and we remain
committed to building and maintaining a talented management group.

Finally, we've redesigned and enhanced our Web site,
www.americancentury.com. There you'll find daily fund information, including
performance and price data, market and national news, and a Forms Center with
access to the most-requested investor forms and applications. You can also sign
up to receive fund prospectuses and shareholder reports electronically.

As always, we appreciate your continued confidence in American Century.

Sincerely,

/s/James E. Stowers, Jr.
James E. Stowers, Jr.
Chairman of the Board and Founder

/s/James E. Stowers III
James E. Stowers III
Vice Chairman of the Board and Chief Executive Officer

[right margin]

Table of Contents

Report Highlights ...................................................... 2
Market Perspective ..................................................... 3

TAX-MANAGED VALUE
Performance Information ................................................ 4
Management Q&A ......................................................... 5
Portfolio at a Glance .................................................. 5
Top Ten Holdings ....................................................... 6
Top Five Industries .................................................... 6
Types of Investments ................................................... 7
Schedule of Investments ................................................ 8
Financial Highlights ................................................... 15

FINANCIAL STATEMENTS
Statement of Assets and
Liabilities .......................................................... 10
Statement of Operations ................................................ 11
Statement of Changes
in Net Assets ........................................................ 12
Notes to Financial
Statements ........................................................... 13

OTHER INFORMATION
Share Class and Retirement
Account Information .................................................. 16
Background Information
Investment Philosophy
and Policies ....................................................... 17
Comparative Indices .................................................. 17
Portfolio Managers ................................................... 17
Glossary ............................................................... 18

[end right margin]

www.americancentury.com 1

Report Highlights
- --------------------------------------------------------------------------------

MARKET PERSPECTIVE

* Tax-Managed Value opened on March 31, 1999. April proved to be one of the
strongest we've seen for the value discipline.

* Stocks drew support from an extraordinary economy. The United States is
experiencing the longest economic expansion in 50 years. Unemployment,
inflation, and interest rates are as low as they have been in decades.

* The Dow Jones Industrial Average, the S&P 500 Index, and the NASDAQ Composite
all reached record highs. However, their performance masked a mid-year 1998
market correction, which ended when the Federal Reserve lowered interest
rates three times to stabilize global markets.

* Until April, value stocks were lagging growth stocks and were as cheap as
they had ever been compared to growth stocks. Our investment teams found many
"must own" opportunities, especially among small- and mid-cap companies.

TAX-MANAGED VALUE

* For its first four weeks in operation, Tax-Managed Value posted a 10.20%
return. It outperformed its benchmark, the S&P 500/BARRA Value Index, which
gained 8.62% in the same time frame. The S&P 500 Index returned 3.79%.

* Strong individual stock selection helped boost performance. A marked shift in
investor preference from growth stocks to value stocks occurred in early
April, which also added to returns.

* Tax-Managed Value's substantial stake in integrated energy companies was
beneficial, as this sector benefited from a strong rebound in oil and gas
prices. Financial services firms and banks, which also represented a
significant fund stake, also performed well in April.

* Selected holdings in the computer and telecommunications industries dampened
performance.

[left margin]

TAX-MANAGED VALUE
(ACTIX)

TOTAL RETURN: AS OF 4/30/99
Since Inception 10.20%*
INCEPTION DATE: 3/31/99

NET ASSETS: $39.9 million

"STRONG INDIVIDUAL STOCK SELECTION HELPED BOOST PERFORMANCE. A MARKED SHIFT IN
INVESTOR PREFERENCE FROM GROWTH STOCKS TO VALUE STOCKS OCCURRED IN EARLY APRIL,
WHICH ALSO ADDED TO RETURNS."

*Not annualized.

Investment terms are defined in the Glossary on pages 18-19.

[end left margin]

2 1-800-345-2021

Market Perspective from Mark Mallon
- --------------------------------------------------------------------------------

[photo of Mark Mallon]

Mark Mallon, head of growth and income equity, specialty, and asset allocation
funds at American Century

BEHIND THE NUMBERS

American Century Tax-Managed Value Fund opened on March 31, 1999, and had
only one month under its belt when the first half of its fiscal year ended on
April 30. Even so, that month proved to be one of the strongest we've seen for
the value discipline. The Standard & Poor's 500/BARRA Value Index, which is the
fund's benchmark, gained just 2.85% in the first three months of 1999, then
jumped 8.62% in April. This set the stage for an impressive debut for
Tax-Managed Value.

Until the beginning of April, value stocks were lagging growth stocks. If
you look at the most popular stock averages over the previous six months,
however, the market was robust. The Standard & Poor's 500 Index was up 22.31%,
the NASDAQ Composite, powered by technology and Internet stocks, gained a
whopping 43.54%, and the Dow Jones 30 Industrials rose 26.62%. All three scored
record highs, and the Dow Jones Industrials crossed 10,000 for the first time
ever.

Not in the numbers was the sharp correction in mid-1998, which ended only
when the Federal Reserve Board lowered interest rates three times in rapid
succession and successfully stabilized global markets that were reeling from
economic crises in Asia, Latin America, and Russia. Also hidden in the numbers
was the market's narrow leadership, which was confined much of the time to a
relative handful of large growth stocks.

A POWERFUL ECONOMY

Stocks drew support from an extraordinary economy.

We are experiencing the longest economic expansion in fifty years.
Unemployment, inflation, and interest rates are as low as they have been in a
generation. U.S. consumers, who drive two-thirds of the growth in domestic goods
and services, remain confident. Our gross domestic product grew at an average
annual rate of 6.1% in the fourth calendar quarter of 1998 and an estimated 4.1%
during the first quarter of 1999. This pace would have been considered much too
fast before technology revolutionized the workplace, and expanded global
competition and manufacturing capacity reined in prices. Our powerful economy
goes a long way toward explaining our robust markets.

VALUE INVESTORS TAKE NOTE

Until April, conservative investors had not been well-paid for several
years. Earlier in the year, value stocks were as cheap as they had ever been
relative to growth stocks. We were finding many compelling value opportunities,
especially among small and midsize companies. Historically, the value investment
style has held its own against growth. We believe returns on value stocks would
prove very competitive, and April may be the first step in confirming that
conviction.

[right margin]

"WE ARE EXPERIENCING THE LONGEST ECONOMIC EXPANSION IN 50 YEARS. UNEMPLOYMENT,
INFLATION, AND INTEREST RATES ARE AS LOW AS THEY HAVE BEEN IN A GENERATION."

MARKET RETURNS
FOR THE SIX MONTHS ENDED APRIL 30, 1999

S&P 500/BARRA VALUE 21.15%
S&P MIDCAP 400/BARRA VALUE 7.80%
S&P SMALLCAP 600/BARRA VALUE 6.55%

Sources: Lipper Inc. and Russell/Mellon Analytical

These indices represent the performance of large-, medium- , and
small-capitalization value stocks.

MARKET PERFORMANCE (GROWTH OF $1.00)
FOR THE SIX MONTHS ENDED APRIL 30, 1999

[data for line chart]
S&P 500/ S&P MidCap 400/ S&P SmallCap 600/
BARRA Value BARRA Value BARRA Value
10/31/98 $1.00 $1.00 $1.00
11/30/98 $1.05 $1.02 $1.04
12/31/98 $1.09 $1.07 $1.08
1/31/99 $1.11 $1.01 $1.07
2/28/99 $1.09 $0.96 $0.98
3/31/99 $1.12 $0.98 $0.98
4/30/99 $1.21 $1.08 $1.07

Value on 4/30/99
S&P 500/BARRA Value $1.21
S&P MidCap 400/BARRA Value $1.08
S&P SmallCap 600/BARRA Value $1.07

[end right margin]

www.americancentury.com 3

Tax-Managed Value--Performance
- --------------------------------------------------------------------------------

TOTAL RETURNS AS OF APRIL 30, 1999

INVESTOR CLASS (INCEPTION 3/31/99)
TAX-MANAGED VALUE S&P 500/BARRA VALUE
LIFE OF FUND(*) 10.20% 8.62%

* Returns for periods less than one year are not annualized.
See pages 17-19 for information about the S&P 500/BARRA Value Index and returns.

[line chart - data below]
GROWTH OF $10,000 OVER LIFE OF FUND

Value on 4/30/99
Tax-Managed Value $11,020
S&P 500/BARRA Value $10,862

$10,000 investment made 3/31/99

[data for mountain chart]

Tax-Managed Value S&P 500/BARRA Value
3/31/99 $10,000 $10,000
4/30/99 $11,020 $10,816

The graph at left shows the growth of a $10,000 investment over the life of the
fund. The S&P 500/BARRA Value Index is provided for comparison. Tax-Managed
Value's total returns include operating expenses (such as transaction costs and
management fees) that reduce returns, while the total returns of the S&P
500/BARRA Value Index do not. Past performance does not guarantee future
results. Investment return and principal value will fluctuate, and redemption
value may be more or less than original cost.

4 1-800-345-2021

Tax-Managed Value--Q&A
- --------------------------------------------------------------------------------

[photo of Mark Mallon and Charles Ritter]
Mark Mallon and Charles Ritter, portfolio managers on the Tax-Managed Value
investment team

An interview with Mark Mallon and Charles Ritter, portfolio managers on the
Tax-Managed Value investment team.

TAX-MANAGED VALUE OPENED ON MARCH 31, 1999. BECAUSE THIS IS THE FIRST REPORT TO
INVESTORS, WILL YOU TELL US ABOUT TAX-MANAGED VALUE'S OBJECTIVES AND HOW IT IS
MANAGED?

Yes, but first, we'd like to welcome investors to Tax-Managed Value.

As anyone who has invested in the stock market in recent years knows, its
growth has been nothing short of phenomenal. That's good for investors, of
course, but unfortunately, the downside of strong equity gains is the taxes
investors have to pay on them.

Tax-Managed Value pursues long-term growth, but as its name implies, it
attempts to minimize taxable distributions--which are largely based on the gains
realized by selling stocks that have appreciated in price. We use several
strategies in an effort to keep taxes at a minimum.

Like other value-oriented managers, we look for well-managed companies
whose stocks we believe are undervalued due to temporary factors. However, we
look specifically for medium to large-sized companies we believe we can hold for
long periods of time. Holding investments for longer periods keeps portfolio
turnover low, which helps us minimize realized capital gains. When we do sell a
portion of a particular holding, we typically sell those shares that were bought
at the highest price.

We may also try to minimize net realized capital gains by selling
securities to realize capital losses (realized capital losses offset realized
capital gains, which reduces distributions to shareholders). Finally, whenever
we can, we try to minimize taxable dividend income by investing in stocks with
lower dividend yields.

HOW HAS TAX-MANAGED VALUE PERFORMED SINCE ITS INCEPTION?

The fund is off to an outstanding start. Tax-Managed Value's life-of-fund
return as of April 30, 1999, was 10.20%. It outperformed its benchmark, the S&P
500/BARRA Value Index, which posted an 8.62% gain for the same period, and also
performed better than the broader market; the S&P 500 returned 3.79%.

WHAT MARKET FACTORS CONTRIBUTED TO PERFORMANCE?

As mentioned earlier, the market has been exceptionally strong for some
time. The growth investment style also has performed better than the value style
in recent years. Until very recently, market leadership has been concentrated in
a handful of large, rapidly

[right margin]

"LIKE OTHER VALUE-ORIENTED MANAGERS, WE LOOK FOR WELL-MANAGED COMPANIES WHOSE
STOCKS WE BELIEVE ARE UNDERVALUED DUE TO TEMPORARY FACTORS. HOWEVER, WE LOOK
SPECIFICALLY FOR MEDIUM TO LARGE-SIZED COMPANIES WE BELIEVE WE CAN HOLD FOR LONG
PERIODS OF TIME."

PORTFOLIO AT A GLANCE

4/30/99
NO. OF COMPANIES 84
MEDIAN P/E RATIO 18.9
MEDIAN MARKET CAPITALIZATION $23.4
BILLION
PORTFOLIO TURNOVER 1%(1)
EXPENSE RATIO 1.10%(2)

(1) From 3/31/99 to 4/30/99.
(2) Annualized.

Investment terms are defined in the Glossary on pages 18-19.

[end right margin]

www.americancentury.com
5

Tax-Managed Value--Q&A
- --------------------------------------------------------------------------------
(Continued)

growing companies. However, the markets are cyclical, and a marked rotation to
value began in April, which coincided with Tax-Managed Value's launch and helped
its performance right out of the gate.

Strong individual stock selection also played a role. We'd like to stress
that we're not just looking for inexpensive stocks--we're looking for companies
with good fundamental prospects that are trading below their fair value. A
stock's fair value depends upon various factors--its balance sheet, growth
prospects, and earnings stability, among others. We are not trying to buy the
lowest-priced stocks. Instead, we are looking for companies that are
attractively priced relative to their fair value. In other words, we want
Cadillacs--but at Buick prices--as well as Pontiacs at Chevy prices.

WHICH INDUSTRIES OR COMPANIES ADDED THE MOST TO RETURNS?

We benefited from excellent growth in integrated energy companies and our
holdings in the banking and financial services sector, all of which were among
Tax-Managed Value's largest industry weightings.

Energy companies fared well, thanks to both a strong rebound in oil and gas
prices that began in February and a wave of mergers within the energy industry.
Exxon, Royal Dutch Petroleum, and a slightly smaller holding, Mobil, at 1.7% of
investments, were three energy names that contributed to returns. Tax-Managed
Value's stake in energy companies represented nearly 12% of investments at April
30.

The financial services and banking industries also performed well in April.
Although this sector struggled in late 1998 due to ongoing anxiety about
economic turmoil in Asia and Latin America, we built a significant position,
focusing primarily on big-name money centers, such as Citigroup, and also on
smaller regional banks. All of these benefited from strong consumer loan growth
in early 1999. Financial services companies and banks together represented
nearly 20% of holdings at April 30.

We also fared well in chemical companies. Air Products & Chemicals and
Minnesota Mining & Manufacturing (3M), which together represented nearly 3% of
investments, were great performers in April. These companies make products where
demand is economically sensitive. Chemical stocks in general had been under
pressure due to investor concerns about the sustainability of global economic
growth, and we obtained both companies at attractive prices. In April, investors
became increasingly confident that the worst of the economic turmoil in Asia and
Latin America was over, and that economic growth was stronger in the cyclical
sectors than previously anticipated.

WHICH HOLDINGS DAMPENED RETURNS?

Our worst-performing holding was Compaq Computer Corp. It's a leading maker
of personal computers that has recently acquired computer systems makers.
However, its stock price dropped following a disappointing earnings report and
the company's announcement that it was looking for a new chief executive
officer. We sold this stock in early May for tax purposes.

[left margin]

". . .WE'RE NOT JUST LOOKING FOR INEXPENSIVE STOCKS--WE'RE LOOKING FOR COMPANIES
WITH GOOD FUNDAMENTAL PROSPECTS THAT ARE TRADING BELOW THEIR FAIR VALUE."

TOP TEN HOLDINGS
% OF FUND INVESTMENTS
AS OF
4/30/99
EXXON CORP. 3.6%
AT&T CORP. 3.3%
CITIGROUP INC. 3.2%
FORD MOTOR CO. 2.5%
BANKAMERICA CORP. 2.3%
ROYAL DUTCH PETROLEUM CO. 2.2%
BELL ATLANTIC CORP. 2.2%
BANC ONE CORP. 2.1%
GTE CORP. 1.9%
FIRST UNION CORP. 1.8%

TOP FIVE INDUSTRIES
% OF FUND INVESTMENTS
AS OF
4/30/99
BANKING 14.2%
ENERGY
(PRODUCTION & MARKETING) 12.0%
TELEPHONE COMMUNICATIONS 9.2%
UTILITIES 6.0%
INSURANCE 5.3%

[end left margin]

6 1-800-345-2021

Tax-Managed Value--Q&A
- --------------------------------------------------------------------------------
(Continued)

Another stock that stumbled a bit was AT&T. As the major carriers of
electronic commerce, telecommunications companies have benefited enormously from
continued robust growth in the Internet. However, in April, AT&T announced a
complex bid to buy MediaOne Group, a cable and media concern. While the overall
strategy of AT&T made sense, the market initially reacted negatively due to
fears that AT&T would enter a bidding war for MediaOne. Such fears proved
unfounded, however, and AT&T appears better positioned to prosper going forward.

WHAT'S YOUR OUTLOOK FOR VALUE INVESTING?

It's too early to determine if the recent rotation to value is a temporary
shift or, as we hope, a true "changing of the guard." Certainly, we are due for
a change in leadership. In any case, we will continue to focus on finding
companies that are financially and fundamentally sound--but whose stock prices
are temporarily depressed. The good news is that we are finding an abundance of
well-established, high-quality companies that are available at attractive
prices, which has enabled us to build a portfolio that should provide good
prospects for appreciation.

[right margin]

"THE GOOD NEWS IS THAT WE ARE FINDING AN ABUNDANCE OF WELL-ESTABLISHED,
HIGH-QUALITY COMPANIES THAT ARE AVAILABLE AT ATTRACTIVE PRICES, WHICH HAS
ENABLED US TO BUILD A PORTFOLIO THAT SHOULD PROVIDE GOOD PROSPECTS FOR
APPRECIATION."

TYPES OF INVESTMENTS IN THE PORTFOLIO

AS OF APRIL 30, 1999

[data for pie chart]

Temporary Cash Investments - 3%
Common Stocks - 97%

[end right margin]

www.americancentury.com 7

Tax-Managed Value--Schedule of Investments
- --------------------------------------------------------------------------------

APRIL 30, 1999 (UNAUDITED)

Shares Value
- --------------------------------------------------------------------------------
COMMON STOCKS-97.2%

AEROSPACE & DEFENSE--2.4%

13,600 Boeing Co. $ 552,500
9,500 Lockheed Martin Corp. 409,094
------------------
961,594
------------------

AIRLINES--0.6%
4,500 US Airways Group Inc.(1) 244,969
------------------

AUTOMOBILES & AUTO PARTS--3.1%
15,600 Ford Motor Co. 997,425
2,500 General Motors Corp. 222,344
------------------
1,219,769
------------------

BANKING--14.2%
14,000 Banc One Corp. 826,000
13,000 BankAmerica Corp. 936,000
4,500 Chase Manhattan Corp. 372,375
17,000 Citigroup Inc. 1,279,250
13,100 First Union Corp. 725,413
13,400 Fleet Financial Group, Inc. 577,038
7,400 National City Corp. 530,950
9,500 Summit Bancorp. 402,563
------------------
5,649,589
------------------

BROADCASTING & MEDIA--2.1%
2,700 MediaOne Group Inc.(1) 220,219
8,800 Time Warner Inc. 616,000
------------------
836,219
------------------

CHEMICALS & RESINS--5.0%

10,300 Air Products and Chemicals, Inc. 484,100
2,800 du Pont (E.I.) de Nemours & Co. 197,750
3,300 FMC Corp.(1) 214,500
5,500 International Flavors & Fragrances Inc. 217,250
7,200 PPG Industries, Inc. 467,550
13,500 Sherwin-Williams Co. 420,188
------------------
2,001,338
------------------

COMMUNICATIONS EQUIPMENT--2.3%
11,500 Harris Corp. 397,469
2,400 Motorola, Inc. 192,300
5,000 Northern Telecom Ltd. 340,938
------------------
930,707
------------------

COMPUTER SOFTWARE & SERVICES--1.8%
8,000 Computer Associates International, Inc. 341,500
7,200 Electronic Data Systems Corp. 387,000
------------------
728,500
------------------

COMPUTER SYSTEMS--3.0%
22,000 Compaq Computer Corp. 490,875
9,100 Hewlett-Packard Co. 717,763
------------------
1,208,638
------------------

Shares Value
- --------------------------------------------------------------------------------

CONSUMER PRODUCTS--1.9%
11,500 American Greetings Corp. Cl A $ 301,156
6,800 Whirlpool Corp. 451,350
------------------
752,506
------------------

CONTROL & MEASUREMENT--1.6%
10,000 Emerson Electric Co. 645,000
------------------

DIVERSIFIED COMPANIES--2.5%
10,500 ITT Industries, Inc. 378,000
7,000 Minnesota Mining & Manufacturing Co. 623,000
------------------
1,001,000
------------------

ELECTRICAL & ELECTRONIC COMPONENTS--0.5%
1,800 Texas Instruments Inc. 183,825
------------------

ENERGY (PRODUCTION & MARKETING)--12.0%
4,000 Chevron Corp. 399,000
17,100 Exxon Corp. 1,420,360
6,300 Mobil Corp. 659,925
8,500 Phillips Petroleum Co. 430,313
15,100 Royal Dutch Petroleum Co. 886,181
11,000 Sunoco, Inc. 393,250
3,700 Texaco Inc. 232,175
12,100 USX-Marathon Group 378,125
------------------
4,799,329
------------------

ENVIRONMENTAL SERVICES--1.1%
7,600 Waste Management, Inc. 429,400
------------------

FINANCIAL SERVICES--4.8%
6,000 Bear Stearns Companies Inc. 279,750
9,100 Countrywide Credit Industries, Inc. 412,344
6,400 Fannie Mae 454,000
6,300 Franklin Resources, Inc. 252,000
10,400 Household International, Inc. 523,250
------------------
1,921,344
------------------

HEALTHCARE--2.9%
17,600 Columbia/HCA Healthcare Corp. 434,500
22,000 Healthsouth Rehabilitation Corp.(1) 295,625
7,500 United HealthCare Corp. 420,938
------------------
1,151,063
------------------

INSURANCE--5.3%
16,000 Allstate Corp. 582,000
6,400 MBIA Inc. 430,400
8,300 MGIC Investment Corp. 403,069
8,000 SAFECO Corp. 318,250
11,300 Torchmark Corp. 386,319
------------------
2,120,038
------------------

LEISURE--3.0%
16,100 Disney (Walt) Co. 511,175
9,000 Eastman Kodak Co. 671,625
------------------
1,182,800
------------------

See Notes to Financial Statements

8 1-800-345-2021

Tax-Managed Value--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)

APRIL 30, 1999 (UNAUDITED)

Shares Value
- --------------------------------------------------------------------------------

MACHINERY & EQUIPMENT--1.8%
8,100 Cooper Industries, Inc. $ 391,838
7,000 Parker-Hannifin Corp. 328,563
------------------
720,401
------------------

OFFICE EQUIPMENT & SUPPLIES--0.5%
3,500 Xerox Corp. 205,625
------------------

PACKAGING & CONTAINERS--0.8%
10,000 Crown Cork & Seal Co., Inc. 325,000
------------------

PHARMACEUTICALS--1.0%
8,500 Schering-Plough Corp. 410,656
------------------

PRINTING & PUBLISHING--2.9%
9,000 Deluxe Corp. 311,625
7,500 Knight-Ridder, Inc. 403,594
12,200 New York Times Co. (The) Cl A 420,900
------------------
1,136,119
------------------

RESTAURANTS--0.5%
4,500 McDonald's Corp. 190,688
------------------

RETAIL (APPAREL)--0.7%
9,000 Liz Claiborne, Inc. 297,563
------------------

RETAIL (FOOD & DRUG)--1.0%
19,000 Supervalu Inc. 396,625
------------------

RETAIL (GENERAL MERCHANDISE)--2.2%
12,000 Dillard's Inc. Cl A 332,250
12,000 Sears, Roebuck & Co. 552,000
------------------
884,250
------------------

TELEPHONE COMMUNICATIONS--9.2%
26,000 AT&T Corp. 1,313,000
15,100 Bell Atlantic Corp. 870,138
5,800 BellSouth Corp. 259,550
11,100 GTE Corp. 743,006
1,600 Sprint Corp. 164,100
6,000 U S WEST Communications Group 313,875
------------------
3,663,669
------------------

Shares Value
- --------------------------------------------------------------------------------

TOBACCO--0.5%
5,800 Philip Morris Companies Inc. $ 203,363
------------------

UTILITIES--6.0%
14,200 Baltimore Gas & Electric Co. 399,375
9,600 Dominion Resources, Inc. (Va.) 394,800
17,000 Edison International 416,500
7,000 FPL Group, Inc. 394,625
10,500 NICOR Inc. 381,938
15,000 Southern Co. 405,938
------------------
2,393,176
------------------

TOTAL COMMON STOCKS 38,794,763
(Cost $35,318,279) ------------------

TEMPORARY CASH INVESTMENTS-2.8%
Repurchase Agreement, Morgan Stanley Group,
Inc., (U.S. Treasury obligations), in a joint
trading account at 4.84%, dated 4/30/99,
due 5/3/99 (Delivery value $1,100,444) 1,100,000
------------------
(Cost $1,100,000)

TOTAL INVESTMENT SECURITIES-100.0% $39,894,763
==================
(Cost $36,418,279)

NOTES TO SCHEDULE OF INVESTMENTS
(1) Non-income producing.

See Notes to Financial Statements

www.americancentury.com 9

Statement of Assets and Liabilities
- --------------------------------------------------------------------------------

APRIL 30, 1999 (UNAUDITED)

ASSETS
Investment securities, at value
(identified cost of $36,418,279) (Note 3) ................. $ 39,894,763
Cash ......................................................... 294,234
Receivable for investments sold .............................. 189,213
Dividends and interest receivable ............................ 40,720
-------------
40,418,930
-------------

LIABILITIES
Payable for investments purchased ............................ 535,056
Payable for management fees (Note 2) ......................... 32,621
Payable for directors' fees and expenses ..................... 32
-------------
567,709
-------------
NET ASSETS ................................................... $ 39,851,221
=============

CAPITAL SHARES, $0.01 PAR VALUE
Authorized--Investor Class ................................... 134,000,000
=============
Outstanding--Investor Class .................................. 7,229,205
=============
NET ASSET VALUE PER SHARE .................................... $ 5.51
=============

NET ASSETS CONSIST OF:
Capital (par value and paid in surplus) ...................... $ 36,364,792
Undistributed net investment income .......................... 43,970
Accumulated net realized loss on investment transactions ..... (34,025)
Net unrealized appreciation on investments (Note 3) .......... 3,476,484
-------------
$ 39,851,221
=============

See Notes to Financial Statements

10 1-800-345-2021

Statement of Operations
- --------------------------------------------------------------------------------

MARCH 31, 1999 (INCEPTION) THROUGH APRIL 30, 1999 (UNAUDITED)

INVESTMENT INCOME
INCOME:
Dividends ...................................................... $ 46,006
Interest ....................................................... 30,617
-----------
76,623
-----------
EXPENSES (Note 2):
Management fees ................................................ 32,621
Directors' fees and expenses ................................... 32
-----------
32,653
-----------

NET INVESTMENT INCOME .......................................... 43,970
-----------

REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 3)
Net realized loss on investments ............................... (34,025)
Change in net unrealized appreciation on investments ........... 3,476,484
-----------

NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS ................ 3,442,459
-----------

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ........... $ 3,486,429
===========

See Notes to Financial Statements

www.americancentury.com 11

Statement of Changes in Net Assets
- --------------------------------------------------------------------------------

MARCH 31, 1999 (INCEPTION) THROUGH APRIL 30, 1999 (UNAUDITED)

INCREASE IN NET ASSETS

OPERATIONS
Net investment income ......................................... $ 43,970
Net realized loss on investment transactions .................. (34,025)
Change in net unrealized appreciation on investments .......... 3,476,484
------------
Net increase in net assets resulting from operations .......... 3,486,429
------------

CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold ..................................... 36,665,059
Payments for shares redeemed .................................. (300,267)
------------
Net increase in net assets from capital share transactions .... 36,364,792
------------

NET INCREASE IN NET ASSETS .................................... 39,851,221

NET ASSETS
Beginning of period ........................................... --
------------
End of period ................................................. $ 39,851,221
============
Undistributed net investment income ........................... $ 43,970
============

TRANSACTIONS IN SHARES OF THE FUND
Sold .......................................................... 7,285,892
Redeemed ...................................................... (56,687)
------------
Net increase .................................................. 7,229,205
============

- --------------------------------------------------------------------------------
UNDERSTANDING THE STATEMENTS OF CHANGES IN NET ASSETS--These statements show how
the fund's net assets changed over the past two reporting periods. It details
how much a fund grew or shrank as a result of:

Net assets at the beginning of the period plus the sum of operations,
distributions to shareholders and capital share transactions result in net
assets at the end of the period.

See Notes to Financial Statements

12 1-800-345-2021

Notes to Financial Statements
- --------------------------------------------------------------------------------

APRIL 30, 1999 (UNAUDITED)

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION -- American Century Mutual Funds, Inc. (the corporation) is
registered under the Investment Company Act of 1940 as an open-end diversified
management investment company. Tax-Managed Value Fund (the fund) is one of the
thirteen series of funds issued by the corporation. The fund's investment
objective is to seek long-term capital growth by investing primarily in common
stocks that management believes to be undervalued at the time of purchase while
attempting to minimize the impact of federal taxes on shareholder returns. The
fund is authorized to issue three classes of shares: the Investor Class, the
Advisor Class, and the Institutional Class. The three classes of shares differ
principally in their respective shareholder servicing and distribution expenses
and arrangements. All shares of the fund represent an equal pro rata interest in
the assets of the class to which such shares belong, and have identical voting,
dividend, liquidation and other rights and the same terms and conditions, except
for class specific expenses and exclusive rights to vote on matters affecting
only individual classes. Sale of the Investor Class commenced on March 31, 1999.
The following significant accounting policies are in accordance with generally
accepted accounting principles; these principles may require the use of
estimates by fund management.

REPURCHASE AGREEMENTS -- The fund may enter into repurchase agreements with
institutions the fund's investment manager, American Century Investment
Management, Inc. (ACIM), has determined are creditworthy pursuant to criteria
adopted by the Board of Directors. Each repurchase agreement is recorded at
cost. The fund requires that collateral, represented by securities, received in
a repurchase transaction be transferred to the custodian in a manner sufficient
to enable the fund to obtain those securities in the event of a default under
the repurchase agreement. ACIM monitors, on a daily basis, the securities
transferred to ensure the value, including accrued interest, of the securities
under each repurchase agreement is equal to or greater than amounts owed to the
fund under each repurchase agreement.

INCOME TAX STATUS -- It is the fund's policy to distribute all net
investment income and net realized gains to shareholders and to otherwise
qualify as a regulated investment company under provisions of the Internal
Revenue Code. Accordingly, no provision has been made for federal or state
income taxes.

DISTRIBUTIONS TO SHAREHOLDERS -- Distributions to shareholders are recorded
on the ex-dividend date. Distributions from net investment income and net
realized gains are generally declared and paid annually.

The character of distributions made during the year from net investment
income or net realized gains may differ from their ultimate characterization for
federal income tax purposes. These differences reflect the differing character
of certain income items and net realized gains and losses for financial
statement and tax purposes and may result in reclassification among certain
capital accounts.

ADDITIONAL INFORMATION -- Funds Distributor, Inc. (FDI) is the
corporation's distributor. Certain officers of FDI are also officers of the
corporation.

www.americancentury.com 13

Notes to Financial Statements
- --------------------------------------------------------------------------------
(Continued)

APRIL 30, 1999 (UNAUDITED)

- --------------------------------------------------------------------------------
2. TRANSACTIONS WITH RELATED PARTIES

The corporation has entered into a Management Agreement with ACIM that
provides the fund with investment advisory and management services in exchange
for a single, unified management fee per class. The Agreement provides that all
expenses of the fund, except brokerage commissions, taxes, interest, expenses of
those directors who are not considered "interested persons" as defined in the
Investment Company Act of 1940 (including counsel fees) and extraordinary
expenses, will be paid by ACIM. The fee is computed daily and paid monthly based
on the fund's class average daily closing net assets during the previous month.
The annual management fee is 1.10% for the Investor Class.

The Board of Directors has adopted the Advisor Class Master Distribution
and Shareholder Services Plan (the plan), pursuant to Rule 12b-1 of the
Investment Company Act of 1940. The plan provides that the fund will pay ACIM an
annual distribution fee equal to 0.25% and annual service fee equal to 0.25%.
The fees are computed daily and paid monthly based on the Advisor Class's
average daily closing net assets during the previous month. The distribution fee
provides compensation for distribution expenses incurred by financial
intermediaries in connection with distributing shares of the Advisor Class
including, but not limited to, payments to brokers, dealers, and financial
institutions that have entered into sales agreements with respect to shares of
the fund. The service fee provides compensation for shareholder and
administrative services rendered by ACIM, its affiliates or independent third
party providers.

- --------------------------------------------------------------------------------
3. INVESTMENT TRANSACTIONS

Purchases of investment securities, excluding short-term investments, for
the period March 31, 1999 through April 30, 1999, totaled $35,713,636. Sales of
investment securities, excluding short-term investments, totaled $361,332.

As of April 30, 1999, accumulated net unrealized appreciation was
$3,476,484, which consisted of unrealized appreciation of $3,814,687 and
unrealized depreciation of $338,203. The aggregate cost of investments for
federal income tax purposes was the same as the cost for financial reporting
purposes.

- --------------------------------------------------------------------------------
4. BANK LOAN

The fund, along with certain other funds managed by ACIM, has entered into
an unsecured $570,000,000 bank line of credit agreement with Chase Manhattan
Bank. Borrowings under the agreement bear interest at the Federal Funds rate
plus 0.40%. The fund may borrow money for temporary or emergency purposes to
fund shareholder redemptions. The fund did not borrow from the line during the
period March 31, 1999 through April 30, 1999.

14 1-800-345-2021

Tax-Managed Value--Financial Highlights
- --------------------------------------------------------------------------------

FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD INDICATED

Investor
1999(1)

PER-SHARE DATA

Net Asset Value, Beginning of Period .......................... $ 5.00
----------
Income From Investment Operations
Net Investment Income ....................................... 0.01
Net Realized and Unrealized Gain on Investment Transactions . 0.50
----------
Total From Investment Operations ............................ 0.51
----------
Net Asset Value, End of Period ................................ $ 5.51
==========
TOTAL RETURN(2) ............................................. 10.20%

RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses to Average Net Assets ............. 1.10%(3)
Ratio of Net Investment Income to Average Net Assets .......... 1.43%(3)
Portfolio Turnover Rate ....................................... 1%
Net Assets, End of Period (in thousands) ...................... $ 39,851

(1) March 31, 1999 (inception) through April 30, 1999 (unaudited).

(2) Total return assumes reinvestment of dividends and capital gains
distributions, if any. Total returns for periods less than one year are not
annualized.

(3) Annualized.

- --------------------------------------------------------------------------------
UNDERSTANDING THE FINANCIAL HIGHLIGHTS--This page itemizes current period
activity and statistics and provides comparison data for the last five fiscal
years (or less, if the class is not five years old).

On a per-share basis, it includes:

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

It also includes some key statistics for the period:

* total return--the overall percentage return of the fund, assuming reinvestment
of all distributions
* expense ratio--operating expenses as a percentage of average net assets
* net income ratio--net investment income as a percentage of average net assets
* portfolio turnover--the percentage of the portfolio that was replaced during
the period

See Notes to Financial Statements

www.americancentury.com 15

Share Class and Retirement Account Information
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SHARE CLASSES

Three classes of shares are authorized for sale by the fund: Investor
Class, Advisor Class and Institutional Class.

All classes of shares represent a pro rata interest in the funds and
generally have the same rights and preferences.

RETIREMENT ACCOUNT INFORMATION

16 1-800-345-2021

Background Information
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INVESTMENT PHILOSOPHY AND POLICIES

American Century offers 14 growth and income funds including domestic
equity, balanced, asset allocation, and specialty. Tax-Managed Value is a
general equity fund managed to provide growth over time with less volatility
than more aggressive growth funds. The fund invests primarily in common stocks
while attempting to minimize the impact of federal taxes on shareholder returns.
Stock purchases are based on a company-by-company analysis to determine whether
a stock is trading below what the fund management team considers fair value.
Once the management team understands why the stock's price is depressed, if the
team believes the undervaluation is temporary, the stock may be purchased. Broad
diversification across many industries is stressed to prevent the performance of
one sector from dominating fund returns.

AMERICAN CENTURY TAX-MANAGED VALUE invests in the equity securities of
medium to large companies that the management team believes are temporarily
undervalued. This is determined by comparing a stock's share price with key
financial measures, including earnings, book value, cash flow, and dividends. If
the stock's price relative to these measures is low relative to where it
typically has traded, it is a candidate for purchase. The managers also will
attempt to minimize the impact of federal income taxes on shareholder returns by
attempting to minimize taxable distributions to shareholders.

COMPARATIVE INDICES

The following indices are used in the report to serve as fund performance
comparisons. They are not investment products available for purchase.

DOW JONES INDUSTRIAL AVERAGE (DJIA) is a price-weighted average of 30
actively traded Blue Chip stocks, primarily industrials but including
service-oriented firms. Prepared and published by Dow Jones & Co., it is the
oldest and most widely quoted of all the market indicators.

The S&P 500 is a capitalization-weighted index of the stocks of 500
publicly traded U.S. companies that are considered to be leading firms in
leading industries. Created by Standard & Poor's Corporation, it is intended to
be a broad measure of U.S. stock market performance.

The S&P 500/BARRA VALUE INDEX is a capitalization-weighted index consisting
of S&P 500 stocks that have lower price- to-book ratios, and in general, share
other characteristics associated with value-style stocks.

The S&P MIDCAP 400/BARRA VALUE INDEX is a capitalization-weighted index
consisting of S&P 400 stocks that have lower price-to-book ratios and, in
general, share other characteristics associated with "value" stocks.

The S&P SMALLCAP 600/BARRA VALUE INDEX is a capitalization-weighted index
consisting of S&P SmallCap 600 stocks that have lower price-to-book ratios. The
S&P SmallCap 600 Index consists of 600 domestic stocks chosen for market size,
liquidity, and industry group representation.

[right margin]

PORTFOLIO MANAGERS

TAX-MANAGED VALUE
MARK MALLON, CFA
CHARLES RITTER, CFA

[end right margin]

www.americancentury.com 17

Glossary
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RETURNS

* TOTAL RETURN figures show the overall percentage change in the value of a
hypothetical investment in the fund and assume that all of the fund's
distributions are reinvested.

INVESTMENT TERMS

* EXPENSE RATIO-- the operating expenses of the fund, expressed as a percentage
of average net assets. Shareholders pay an annual fee to the investment manager
for investment advisory and management services. The expenses and fees are
deducted from fund income, not from each shareholder account. (See Note 2 in the
Notes to Financial Statements.)

* MEDIAN MARKET CAPITALIZATION-- market capitalization (market cap) is the total
value of a company's stock and is calculated by multiplying the number of
outstanding common shares by the current share price. The company whose market
cap is in the middle of the portfolio is the median market cap. Half the
companies in the portfolio have values greater than the median, and half have
values that are less. If there is an even number of companies, then the median
is the average of the two companies in the middle.

* NUMBER OF COMPANIES-- the number of different companies held by a fund on a
given date.

* PORTFOLIO TURNOVER-- the percentage of a fund's investment portfolio that is
replaced during a given time period, usually a year. Actively managed portfolios
tend to have higher turnover than passively managed portfolios such as index
funds.

* PRICE/BOOK RATIO-- a stock value measurement calculated by dividing a
company's stock price by its book value per share, with the result expressed as
a multiple instead of as a percentage. (Book value per share is calculated by
subtracting a company's liabilities from its assets, then dividing that value by
the number of outstanding shares.)

* PRICE/EARNINGS (P/E) RATIO-- a stock value measurement calculated by dividing
a company's stock price by its earnings per share, with the result expressed as
a multiple instead of as a percentage. (Earnings per share is calculated by
dividing the after-tax earnings of a corporation by its outstanding shares.)

TYPES OF STOCKS

* BLUE CHIP STOCKS-- stocks of the most established companies in American
industry. They are generally large, fairly stable companies that have
demonstrated consistent earnings and usually have long-term growth potential.
Examples include General Electric and Coca-Cola.

* CYCLICAL STOCKS-- generally considered to be stocks whose price and earnings
fluctuations tend to follow the ups and downs of the business cycle. Examples
include the stocks of automobile manufacturers, steel producers and textile
operators.

* GROWTH STOCKS-- stocks of companies that have experienced above-average
earnings growth and are expected to continue such growth. These stocks often
sell at high P/E

18 1-800-345-2021

Glossary
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(Continued)

ratios. Examples can include the stocks of high-tech, healthcare, and consumer
staples companies.

* LARGE-CAPITALIZATION ("LARGE-CAP") STOCKS-- generally considered to be stocks
of companies with a market capitalization (the total value of a company's
outstanding stock) of more than $5 billion. These tend to be the stocks that
make up the Dow Jones Industrial Average and the S&P 500.

* MEDIUM-CAPITALIZATION ("MID-CAP") STOCKS-- generally considered to be stocks
of companies with a market capitalization (the total value of a company's
outstanding stock) of between $1 billion and $5 billion. These tend to be the
stocks that make up the S&P 400.

* SMALL-CAPITALIZATION ("SMALL-CAP") STOCKS-- generally considered to be stocks
of companies with a market capitalization (the total value of a company's
outstanding stock) of less than $1 billion. These tend to be the stocks that
make up the Russell 2000 Index.

* VALUE STOCKS-- generally considered to be stocks that are purchased because
they are relatively inexpensive. These stocks are typically characterized by low
P/E ratios.

FUND CLASSIFICATIONS

INVESTMENT OBJECTIVE

The investment objective may be based on the fund's objective as stated in
its prospectus or fund profile, or the fund's categorization by independent
rating organizations based on its management style.

* CAPITAL PRESERVATION -- offers taxable and tax-free money market funds for
relative stability of principal and liquidity.

* INCOME -- offers funds that can provide current income and competitive yields,
as well as a strong and stable foundation and generally lower volatility levels
than stock funds.

* GROWTH & INCOME -- offers funds that emphasize both growth and income.

* GROWTH -- offers funds with a focus on capital appreciation and long-term
growth, generally providing high return potential with corresponding high price
fluctuation risk.

RISK

* CONSERVATIVE -- these funds generally provide lower return potential with
either low or minimal price fluctuation risk.

* MODERATE -- these funds generally provide moderate return potential with
moderate price fluctuation risk.

* AGGRESSIVE -- these funds generally provide high return potential with
corresponding high price fluctuation risk.

www.americancentury.com 19

Notes
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20 1-800-345-2021

[inside back cover]

RISK LEVEL - CONSERVATIVE

- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE - INCOME
- --------------------------------------------------------------------------------

RISK LEVEL - AGGRESSIVE

TAXABLE BONDS TAX-FREE BONDS
Target 2025* CA High-Yield Municipal
Target 2020* High-Yield Municipal
Target 2015*
Target 2010*
High-Yield
International Bond

RISK LEVEL - MODERATE

TAXABLE BONDS TAX-FREE BONDS
Long-Term Treasury CA Long-Term Tax-Free
Target 2005* Long-Term Tax-Free
Bond CA Insured Tax-Free
Premium Bond

RISK LEVEL - CONSERVATIVE

RISK LEVEL - AGGRESSIVE

DOMESTIC EQUITY
Small Cap Quantitative
Small Cap Value

RISK LEVEL - MODERATE

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INVESTMENT OBJECTIVE - GROWTH
- --------------------------------------------------------------------------------

RISK LEVEL - AGGRESSIVE

RISK LEVEL - MODERATE

SPECIALTY
Global Natural Resources

The classification of funds by risk category is based on quantitative historical
measures as well as qualitative prospective measures. It is not intended to be a
precise indicator of future risk or return levels. The degree of risk within
each category can vary significantly, and some fund returns have historically
been higher than more aggressive funds or lower than more conservative funds.
Please be aware that a fund's category may change over time. Therefore, it is
important that you read a fund's prospectus or fund profile carefully before
investing to ensure its objectives, policies and risk potential are consistent
with your needs.

For a definition of fund categories, see the Glossary.

[back cover]

[american century logo(reg.sm)]
American
Century

P.O. BOX 419200
KANSAS CITY, MISSOURI 64141-6200

www.americancentury.com

INVESTOR RELATIONS
1-800-345-2021 OR 816-531-5575

AUTOMATED INFORMATION LINE
1-800-345-8765

FAX: 816-340-7962

TELECOMMUNICATIONS DEVICE FOR THE DEAF
1-800-634-4113 OR 816-444-3485

BUSINESS, NOT-FOR-PROFIT, EMPLOYER-SPONSORED RETIREMENT PLANS
1-800-345-3533

AMERICAN CENTURY MUTUAL FUNDS

INVESTMENT MANAGER
AMERICAN CENTURY INVESTMENT MANAGEMENT, INC.
KANSAS CITY, MISSOURI

9906 Funds Distributor, Inc.
SH-BKT-16621 (c)1999 American Century Services Corporation