AMERICAN CENTURY VARIABLE PORTFOLIOS INC, 485APOS, 1999-01-15

AMERICAN CENTURY VARIABLE PORTFOLIOS INC
485APOS, 1999-01-15

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]

File No. 33-14567

Pre-Effective Amendment No. [ ]

Post-Effective Amendment No. 24 [X]

and/or

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

File No. 811-5188

Amendment No. 24 [X]

(Check appropriate box or boxes.)

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

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

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

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

Approximate Date of Proposed Public Offering: March 17, 1999

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

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

If appropriate, check the following box:

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

Prospectus

MARCH 17, 1999
- --------------------------------------------------------------------------------

VP Value

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

Distributed by Funds Distributor, Inc.

Table of Contents

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

Information about the Fund..........................................

Management..........................................................

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

Taxes...............................................................

Financial Highlights................................................

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

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

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

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

An Overview of the Fund

What is the fund's investment goal?

This fund seeks long-term capital growth. Income is a secondary objective.

What is the fund's primary investment strategy and principal risks?

In selecting stocks for VP Value, the advisor looks for stocks of medium to
large companies that it believes are undervalued at the time of purchase. A more
detailed description of the fund's value investment strategy begins on page xx.

The fund's principal risks include

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

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

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

Who may want to invest in the fund?

The fund may be a good investment if you are

0 seeking long-term capital growth through an equity fund

0 seeking an equity fund that utilizes a value style of investing

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

Who may not want to invest in the fund?

The fund may not be a good investment if you are

0 investing for a short period of time

0 uncomfortable with volatility in the value of your investment

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

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

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

Information about the Fund

VP Value

What is the fund's investment objective?

The fund seeks long-term capital growth by investing primarily in common stocks.
Income is a secondary objective.

How does the fund pursue its investment objective?

The fund managers look for stocks of medium to large companies that they believe
are undervalued at the time of purchase. The managers use a value investment
strategy that looks for companies that are temporarily out of favor in the
market. The managers attempt to purchase the stock of these undervalued
companies and hold them until they have returned to favor in the market and
their stock prices have gone up. Companies may be undervalued due to market
declines, poor economic conditions, actual or anticipated bad news regarding the
issuer or its industry, or because they have been overlooked by the market. To
identify these companies, the fund managers look for companies with earnings,
cash flows and/or assets that may not be reflected accurately in the companies'
stock prices, or companies whose dividend payments appear high when compared to
the stock prices.

The fund managers do not attempt to time the market. Instead, under normal
market conditions, they intend to keep at least 80% of the fund's assets
invested in stocks regardless of the movement of stock prices generally. When
the fund managers believe that it is prudent, the fund may invest a portion of
its assets in convertible securities, foreign securities, short-term securities,
bonds, notes and debt securities of companies, debt obligations of governments
and their agencies, non-leveraged stock index futures contracts and other
similar securities. Stock index futures contracts, a type of derivative
security, can help the fund's cash assets remain liquid while performing more
like stocks. The fund has a policy governing stock index futures and leverage
the fund's assets by investing in a derivative security. For example, the fund
managers cannot leverage the fund's assets by investing in a derivative
security. A complete description of the derivatives policy is included in the
Statement of Additional Information.

In the event of exceptional market or economic conditions, the fund may, as a
temporary defensive measure, invest all or a substantial portion of its assets
in cash or high quality short-term debt securities. To the extent the fund
assumes a defensive position, it will not be pursuing its objective of capital
growth.

Additional information about VP Value's investments is available in its annual
and semiannual reports. In these reports you will find a discussion of the
market conditions and investment strategies that significantly affected the
fund's performance during the most recent fiscal period. You may get these
reports at no cost by calling the insurance company from which you purchased the
fund or by calling us.

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

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

Non-leveraged means that the fund may not invest in futures contracts where it
would be possible to lose more than the fund invested.

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

What are the primary risks of investing in the fund?

As with all funds, at any given time the value of your shares of VP Value may be
worth more or less than the price you paid. If you sell your shares when the
value is less than the price you paid, you will lose money.

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

If the market does not consider the individual stocks purchased by VP Value to
be undervalued, the value of the fund's shares may not rise as high as other
funds and may in fact decline, even if stock prices are generally increasing.

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

The fund is offered only to insurance companies for the purpose of funding
variable annuity or variable life insurance contracts. Although Variable
Portfolios does not foresee any disadvantages to contract owners due to the fact
that it offers its shares as an investment medium for both variable annuity and
variable life products, the interests of various contract owners participating
in the funds of Variable Portfolios might, at some time, be in conflict due to
future differences in tax treatment of variable products or other
considerations. Consequently, Variable Portfolios' Board of Directors will
monitor events in order to identify any material irreconcilable conflicts that
may possibly arise and to determine what action, if any, should be taken in
response to such conflicts. If a conflict were to occur, an insurance company
separate account might be required to withdraw its investments in the fund and
the fund might be forced to sell securities at disadvantageous prices to fund
such withdrawal.

Fund Performance History

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

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

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

Annual Total Returns

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

1998 4.81%
1997 26.08%

Highest and Lowest Quarterly Returns

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

Highest 13.07% 2Q1997
Lowest -10.88% 3Q1998

Average Annual Returns

The following table shows the average annual returns of the fund's shares for
the periods indicated for the life of the fund. The benchmarks are unmanaged
indices that have no operating costs and are included in the table for
performance comparison.

For the calendar year ended December 31, 1998 1 year Life of fund*
- --------------------------------------------------------------------------------
VP Value 4.81% 15.94%
S & P 500/BARRA Value Index 14.68% 21.80%
S & P 500 Index 28.68% 29.01%
- --------------------------------------------------------------------------------

* The inception date for VP Value is May 1, 1996.

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

* For current performance of information, please call us at 1-800-345-3533 or
visit American Century's Web site at www.americancentury.com.

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

Management

Who manages the fund?

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

The Board of Directors

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

The Investment Advisor

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

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

For the services it provided to the fund during its most recent fiscal year, the
advisor received a unified management fee of ___% the average net assets of the
fund. In November 1998, the fund's shareholders approved a new management
agreement with lower fees. Under the new agreement, the advisor will receive a
unified management fee of 1.00% of the first $500 million of the average net
assets of the fund, 0.95% of the next $500 million and 0.90% thereafter. The
amount of the management fee is calculated daily and paid monthly. Out of that
fee, the advisor paid all expenses of managing and operating the fund except
brokerage expenses, taxes, interest, fees and expenses of the independent
directors (including legal counsel fees) and extraordinary expenses.

The Fund Management Team

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

The portfolio manager on the investment team is identified below:

Phillip N. Davidson
Phillip N. Davidson, Vice President and Portfolio Manager, has been a member of
the team that manages VP Value since May 1996. He joined American Century in
September 1993. He has a bachelor's degree in finance and an MBA from Illinois
State University.

R. Todd Vingers
R. Todd Vingers, Portfolio Manager, has been a member of the team that manages
VP Value since February 1998. He joined American Century in August 1994 as an
Investment Analyst. Prior to joining American Century, he attended the
University of Chicago Graduate School of Business from October 1992 to June
1994, where he obtained his MBA degree. He also has a bachelor's in business
administration from the University of St. Thomas in St. Paul, Minnesota.

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

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

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

Fund Performance

VP Value has the same management team and investment policies as another fund in
the American Century family of funds. The fees and expenses of the funds are
expected to be similar, and they will be managed with substantially the same
investment objective and strategies. Notwithstanding these general similarities,
this fund and the retail fund are separate mutual funds that will have different
investment performance. Differences in cash flows into the two funds, the size
of their portfolios, specific investments held by the two funds, as well as the
additional expenses of the insurance product, will cause performance to differ.

Please consult the separate account prospectus for a description of the
insurance product through which the fund is offered and the associated fees.

Fundamental Investment Policies

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

Year 2000 Issues

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

Although American Century believes its critical systems will function properly
in the Year 2000, this is not guaranteed. If the efforts of American Century or
its external service providers are not successful, the fund's business,
particularly the provision of shareholder services, may be hampered.

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

Share Price and Distributions

Purchase and Redemption of Shares

For instructions on how to purchase and redeem shares, read the prospectus of
your insurance company separate account. Shares of the fund are sold and
redeemed by the fund at their net asset value next determined after receipt by
the insurance company separate account of the request in good order from the
variable annuity or variable life insurance contract owner. There are no sales
commissions or redemption charges. However, certain sales or deferred sales
charges and other charges may apply to the variable annuity or life insurance
contracts. Those charges are disclosed in the separate account prospectus.

Share Price

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

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

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

Distributions

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

Taxes

Consult the prospectus of your insurance company separate account for a
discussion of the tax status of your variable contract.

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

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

Capital gains are increases in the values of capital assets, such as stock, from
the time the assets are purchased. Tax becomes due on capital gains once an
asset is sold.

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

Financial Highlights

Understanding the Financial Highlights

The table on the next pages itemizes what contributed to the changes in share
price during the period. It also shows the changes in share price for this
period in comparison to changes over the last three fiscal periods.

On a per-share basis, the table includes

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

The table also includes some key statistics for the period

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

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

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

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

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

<TABLE>
<CAPTION>
VP Value

For a Share Outstanding Throughout the Years Ended December 31, except as noted

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

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses to Average Net
Assets.....................................

Ratio of Net Investment Income to Average Net
Assets.....................................

Net Assets, End of Year (in thousands).....

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

[UPDATED FIGURES NOT AVAILABLE]

More information about the funds is contained in these documents:

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

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

You also can get information about the fund (including the SAI) from the
Securities and Exchange Commission (SEC).

v In person SEC Public Reference Room
Washington, D.C.
Call 1-800-SEC-0330 for location and hours.
v On the Internet www.sec.gov.
v By mail SEC Public Reference Section
Washington, D.C.
20549-6009
(The SEC will charge a fee for copying the
documents.)

American Century Investments
P.O. Box 419385
Kansas City, Missouri 64141-6385

Investment Professional Service Representative
1-800-345-3533 or 816-531-5575

Fax
816-340-4360

www.americancentury.com

Telecommunications Device for the Deaf
1-800-345-1833 or 816-444-3038

Investment Company Act File No. 811-5188
<PAGE>
[american century logo(reg.sm)]
American
Century

Prospectus

MARCH 17, 1999
- --------------------------------------------------------------------------------

VP International

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

Distributed by Funds Distributor, Inc.

Table of Contents

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

Information about the Fund...................................................

Management...................................................................

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

Taxes........................................................................

Financial Highlights.........................................................

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

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

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

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

An Overview of the Fund

What is the fund's investment goal?

This fund seeks capital growth.

What is the fund's primary investment strategy and principal risks?

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

The fund's principal risks include

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

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

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

oForeign Risk The fund invests primarily in foreign securities, which are
generally riskier than U.S. stocks.

Who may want to invest in the fund?

The fund may be a good investment if you are

0 seeking long-term capital growth from your investment

0 seeking diversification of your investment portfolio through investment in
foreign securities

0 comfortable with the risks associated with investing in U.S. and foreign
growth securities

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

Who may not want to invest in the fund?

The fund may not be a good investment if you are

0 investing for a short period of time

0 uncomfortable with the risks associated with foreign investing

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

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

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

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

Information about the Fund

VP International

What is the fund's investment objective?

The fund seeks capital growth.

How does the fund pursue its investment objective?

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

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

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

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

Non-leveraged means that the fund may not invest in futures contracts where it
would be possible to lose more than the fund invested.

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

In addition to locating strong companies with earnings growth, the fund managers
believe that the diversification of the fund's holdings across different
countries and geographical regions is important in trying to manage the risks of
an international portfolio. For this reason, the fund managers also consider the
prospects for relative economic growth among countries or regions, economic and
political conditions, expected inflation rates, currency exchange fluctuations,
and tax considerations when making investments.

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

Additional information about VP International's investments is available in its
annual and semiannual reports. In these reports you will find a discussion of
the market conditions and investment strategies that significantly affected the
fund's performance during the most recent six-month period. You may get these
reports at no cost by calling the insurance company from which you purchased the
fund or by calling us.

What kinds of securities does the fund buy?

The fund generally will purchase equity securities of foreign companies. At
least 65% of the fund's assets will be invested at all times in equity
securities of issuers from at least three countries outside of the United
States. The fund can purchase other types of securities as well, such as
domestic and foreign preferred stocks, convertible securities, equity equivalent
securities, notes, bonds and other debt securities.

In the event of exceptional market or economic conditions, the fund may, as a
temporary defensive measure, invest all or a substantial portion of its assets
in cash or high quality short term debt securities. To the extent the fund
assumes a defensive position, it will not be pursuing its objective of capital
growth.

The fund considers foreign companies to include companies (i) domiciled outside
the United States, (ii) deriving at least half of their revenue from sales or
production outside the United States, or (iii) for which the principal trading
market of their securities is outside the United States. The fund does not have
limits on the countries in which it can invest, and the fund managers expect to
invest in companies in both developed countries and emerging markets. The fund
considers developed countries to include Australia, Austria, Belgium, Canada,
Denmark, Finland, France, Germany, Ireland, Italy, Japan, the Netherlands, New
Zealand, Norway, Spain, Sweden, Switzerland, the United Kingdom and the United
States. Emerging market countries are considered to be those countries not
listed as developed countries above.

What are the primary risks of investing in the fund?

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

As with all funds, at any given time the value of your shares may be worth more
or less than the price you paid. If you sell your shares when the value is less
than the price you paid, you will lose money.

The value of the securities in which the funds invest are affected by many
factors, including the performance of the companies that issued them, general
market and economic conditions, and investor confidence.

Investing in foreign securities has certain unique risks that make it generally
riskier than investing in U.S. stocks. These risks include exposure to political
and economic events in world markets, limited availability of public
information, less developed trading markets, and lack of uniform financial
reporting and regulatory practices similar to those that apply in the U.S. In
addition, foreign securities are subject to currency risk, meaning that since
the fund's investments are generally held in foreign currency, the fund could
experience a gain or loss based solely upon a change in the exchange rate
between the foreign currency and the U.S. dollar.

Fund Performance History

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

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

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

Annual Total Returns

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

1998 18.76%
1997 18.63%
1996 14.41%
1995 12.21%

Highest and Lowest Quarterly Returns

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

Highest 17.82% 1Q1998
Lowest -18.28% 3Q1998

Average Annual Returns

For the calendar year ended December 31, 1998 1 year Life of fund*
- --------------------------------------------------------------------------------
VP International 18.76% 12.30%
S & P 500 Index 28.68% 26.65%
Morgan Stanley Capital International EAFE Index 20.00% 8.11%
- --------------------------------------------------------------------------------

* The inception date for VP International is May 1, 1994.

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

* For current performance of information, please call us at 1-800-345-3533 or
visit American Century's Web site at www.americancentury.com.

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

Management

Who manages the fund?

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

The Board of Directors

The Investment Advisor

For the services it provided to the fund during its most recent fiscal year, the
advisor received a unified management fee of ___% the average net assets of the
fund. In November 1998, the fund's shareholders approved a new management
agreement with lower fees. Under the new agreement, the advisor will receive a
unified management fee of 1.50% of the first $250 million of the average net
assets of the fund, 1.20% of the next $250 million and 1.10% thereafter. The
amount of the management fee is calculated daily and paid monthly. Out of that
fee, the advisor paid all expenses of managing and operating the fund except
brokerage expenses, taxes, interest, fees and expenses of the independent
directors (including legal counsel fees) and extraordinary expenses.

The Fund Management Team

The portfolio managers on the investment team are identified below:

Henrik Strabo
Mr. Strabo, Senior Vice President and Portfolio Manager, has been a member of
the team that manages VP International since the fund's inception on May 1,
1994. He joined American Century in 1993 as an Investment Analyst and was
promoted to Portfolio Manager in April 1994. He has a bachelor's degree in
business from the University of Washington.

Mark S. Kopinski
Mr. Kopinski , Vice President and Portfolio Manager, has been a member of the
team that manages VP International since rejoining American Century in April
1997. Before rejoining American Century, he served as Vice President and
Portfolio Manager at Federated Investors, Inc. from June 1995 to March 1997.
Prior to 1995, he served as Vice President and Portfolio Manager of American
Century. He has a bachelor's degree in business administration from the
University of Illinois.

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

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

Fund Performance

VP International has the same management team and investment policies as another
fund in the American Century family of funds. The fees and expenses of the funds
are expected to be similar, and they will be managed with substantially the same
investment objective and strategies. Notwithstanding these general similarities,
this fund and the retail fund are separate mutual funds that will have different
investment performance. Differences in cash flows into the two funds, the size
of their portfolios, specific investments held by the two funds, as well as the
additional expenses of the insurance product, will cause performance to differ.

Please consult the separate account prospectus for a description of the
insurance product through which the fund is offered and the associated fees.

Fundamental Investment Policies

Year 2000 Issues

Share Price and Distributions

Purchase and Redemption of Shares

Share Price

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

Distributions

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

Taxes

Consult the prospectus of your insurance company separate account for a
discussion of the tax status of your variable contract.

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

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

Capital gains are increases in the values of capital assets, such as stock, from
the time the assets are purchased. Tax becomes due on capital gains once an
asset is sold.

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

Financial Highlights

Understanding the Financial Highlights

On a per-share basis, the table includes

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

The table also includes some key statistics for the period

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

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

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

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

<TABLE>
<CAPTION>
VP International

For a Share Outstanding Throughout the Years Ended December 31, except as noted

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

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses to Average Net
Assets.....................................

Ratio of Net Investment Income to Average Net
Assets.....................................

Net Assets, End of Year (in thousands).....

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

[UPDATED FIGURES NOT AVAILABLE]

More information about the funds is contained in these documents:

You also can get information about the fund (including the SAI) from the
Securities and Exchange Commission (SEC).

American Century Investments
P.O. Box 419385
Kansas City, Missouri 64141-6385

Investment Professional Service Representative
1-800-345-3533 or 816-531-5575

Fax
816-340-4360

www.americancentury.com

Telecommunications Device for the Deaf
1-800-345-1833 or 816-444-3038

Investment Company Act File No. 811-5188
<PAGE>
[american century logo(reg.sm)]
American
Century

Prospectus

MARCH 17, 1999
- --------------------------------------------------------------------------------

VP Capital Appreciation

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

Distributed by Funds Distributor, Inc.

Table of Contents

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

Information about the Fund................................................

Management................................................................

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

Taxes.....................................................................

Financial Highlights......................................................

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

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

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

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

An Overview of the Fund

What is the fund's investment goal?

This fund seeks capital growth.

What is the fund's primary investment strategy and principal risks?

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

The fund's principal risks include

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

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

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

Who may want to invest in the fund?

The fund may be a good investment if you are

0 seeking long-term capital growth from your investment

0 comfortable with the funds' short-term price volatility

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

Who may not want to invest in the fund?

The fund may not be a good investment if you are

0 investing for a short period of time

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

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

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

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

Information about the Fund

VP Capital Appreciation

What is the fund's investment objective?

The fund seeks capital growth.

How does the fund pursue its investment objective?

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

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

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

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

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

Non-leveraged means that the fund may not invest in futures contracts where it
would be possible to lose more than the fund invested.

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

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

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

What kinds of securities does the fund buy?

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

What are the primary risks of investing in the fund?

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

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

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

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

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

Fund Performance History

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

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

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

Annual Total Returns

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

1998 -2.16%
1997 -3.26%
1996 -4.32%
1995 31.10%
1994 -1.17%
1993 10.31%
1992 -1.34%
1991 41.88%
1990 -1.25%
1989 28.72%

Highest and Lowest Quarterly Returns

Highest 22.33% 1Q1991
Lowest -19.03% 3Q1998

Average Annual Returns

The following table shows the average annual returns of the fund's shares for
the periods indicated during the last 10 calendar years. The benchmarks are
unmanaged indices that have no operating costs and are included in the table for
performance comparison.

<TABLE>
For the calendar year ended December 31, 1998 1 year 5 years 10 years Life of fund*
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
VP Capital Appreciation -2.16% 3.25% 8.70% 8.25%
S & P MidCap 400 Index 18.25% 18.67% 19.21% 20.00%
S & P 500 Index 28.68% 24.05% 19.17% 19.04%
S & P/BARRA Mid Cap 400 Growth Index 34.86% 19.77% N/A N/A
- ---------------------------------------------------------------------------------------------------------------------------
* The inception date for VP Capital Appreciation is November 20, 1987.
</TABLE>

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

* For current performance of information, please call us at 1-800-345-3533 or
visit American Century's Web site at www.americancentury.com.

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

Management

Who manages the fund?

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

The Board of Directors

The Investment Advisor

The Fund Management Team

The portfolio managers on the investment team are identified below:

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

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

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

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

Fundamental Investment Policies

Year 2000 Issues

Share Price and Distributions

Purchase and Redemption of Shares

Share Price

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

Distributions

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

Taxes

Consult the prospectus of your insurance company separate account for a
discussion of the tax status of your variable contract.

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

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

Capital gains are increases in the values of capital assets, such as stock, from
the time the assets are purchased. Tax becomes due on capital gains once an
asset is sold.

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

Financial Highlights

Understanding the Financial Highlights

On a per-share basis, the table includes

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

The table also includes some key statistics for the period

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

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

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

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

<TABLE>
<CAPTION>
VP Capital Appreciation

For a Share Outstanding Throughout the Years Ended December 31

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses to Average Net
Assets.....................................

Ratio of Net Investment Income to Average Net
Assets.....................................

Net Assets, End of Year (in thousands).....

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

[UPDATED FIGURES NOT AVAILABLE]

More information about the funds is contained in these documents:

You also can get information about the fund (including the SAI) from the
Securities and Exchange Commission (SEC).

American Century Investments
P.O. Box 419385
Kansas City, Missouri 64141-6385

Investment Professional Service Representative
1-800-345-3533 or 816-531-5575

Fax
816-340-4360

www.americancentury.com

Telecommunications Device for the Deaf
1-800-345-1833 or 816-444-3038

Investment Company Act File No. 811-5188
<PAGE>
[american century logo(reg.sm)]
American
Century

Prospectus

MARCH 17, 1999
- --------------------------------------------------------------------------------

VP Balanced

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

Distributed by Funds Distributor, Inc.

Table of Contents

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

Information about the Fund......................................................

Management......................................................................

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

Taxes...........................................................................

Financial Highlights............................................................

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

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

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

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

An Overview of the Fund

What is the fund's investment goal?

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

What is the fund's primary investment strategy and principal risks?

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

The fund's principal risks include

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

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

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

Who may want to invest in the fund?

The fund may be a good investment if you are

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

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

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

Who may not want to invest in the fund?

The fund may not be a good investment if you are

0 investing for a short period of time

0 uncomfortable with volatility in the value of your investment

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

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

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

Information about the Fund

VP Balanced

What is the fund's investment objective?

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

How does the fund pursue its investment objective?

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

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

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

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

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

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

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

Non-leveraged means that the fund may not invest in futures contracts where it
would be possible to lose more than the fund invested.

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

Additional information about VP Balanced's investments is available in its
annual and semiannual reports. In these reports you will find a discussion of
the market conditions and investment strategies that significantly affected the
fund's performance during the most recent fiscal period. You may get these
reports at no cost by calling the insurance company from which you purchased the
fund or by calling us.

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

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

What are the primary risks of investing in the fund?

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

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

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

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

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

As with all funds, at any given time the value of your shares of VP Balanced may
be worth more or less than the price you paid. If you sell your shares when the
value is less than the price you paid, you will lose money.

Fund Performance History

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

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

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

Annual Total Returns

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

1998 15.77%
1997 15.81%
1996 12.21%
1995 21.12%
1994 0.61%
1993 7.69%
1992 -6.04%

Highest and Lowest Quarterly Returns

Highest 12.16% 2Q1997
Lowest -7.28% 3Q1998

Average Annual Returns

<TABLE>
For the calendar year ended December 31, 1998 1 year 5 years Life of fund*
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
VP Balanced 15.77% 12.89% 11.65%
S&P 500 28.68% 24.05% 19.45%
Lehman Aggregate Bond Index 8.69% 7.27% 8.50%
Blended Index** 20.71% 17.36% 15.20%
- -------------------------------------------------------------------------------------------------------------------
</TABLE>

* The inception date for VP Balanced is May 1, 1991.

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

**********LEFT MARGIN CALLOUTS
* For current performance of information, please call us at 1-800-345-3533 or
visit American Century's Web site at www.americancentury.com.

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

Management

Who manages the fund?

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

The Board of Directors

The Investment Advisor

For the services it provided to the fund during its most recent fiscal year, the
advisor received a unified management fee of ____% the average net assets of the
fund. In November 1998, the fund's shareholders approved a new management
agreement with lower fees. Under the new agreement, the advisor will receive a
unified management fee of 0.90% of the first $250 million of the average net
assets of the fund, 0.85% of the next $250 million and 0.80% thereafter. The
amount of the management fee is calculated daily and paid monthly. Out of that
fee, the advisor paid all expenses of managing and operating the fund except
brokerage expenses, taxes, interest, fees and expenses of the independent
directors (including legal counsel fees) and extraordinary expenses.

The Fund Management Team

The portfolio managers on the investment team are identified below:

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

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

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

John F. Walsh
John F. Walsh, Portfolio Manager, has been a member of the team that manages the
fixed income portion of VP Balanced since January 1999. He joined American
Century in February 1996 as an Investment Analyst, a position he held until May
1997. At that time he was promoted to Portfolio Manager. Prior to joining
American Century, he served as an Assistant Vice President and Analyst at First
Interstate Bank, Los Angeles, California. He has a bachelor's degree in
marketing from Loyola Marymount University and an MBA in finance from Creighton
University.

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

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

Fund Performance

VP Balanced has the same management team and investment policies as another fund
in the American Century family of funds. The fees and expenses of the funds are
expected to be similar, and they will be managed with substantially the same
investment objective and strategies. Notwithstanding these general similarities,
this fund and the retail fund are separate mutual funds that will have different
investment performance. Differences in cash flows into the two funds, the size
of their portfolios, specific investments held by the two funds, as well as the
additional expenses of the insurance product, will cause performance to differ.

Please consult the separate account prospectus for a description of the
insurance product through which the fund is offered and the associated fees.

Fundamental Investment Policies

Year 2000 Issues

Share Price and Distributions

Purchase and Redemption of Shares

Share Price

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

Distributions

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

Taxes

Consult the prospectus of your insurance company separate account for a
discussion of the tax status of your variable contract.

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

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

Capital gains are increases in the values of capital assets, such as stock, from
the time the assets are purchased. Tax becomes due on capital gains once an
asset is sold.

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

Financial Highlights

Understanding the Financial Highlights

On a per-share basis, the table includes

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

The table also includes some key statistics for the period

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

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

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

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

<TABLE>
<CAPTION>
VP Balanced

For a Share Outstanding Throughout the Years Ended December 31

<S> <C> <C> <C> <C> <C>
1998 1997 1996 1995 1994

PER-SHARE DATA
Net Asset Value, Beginning of Year.........
------------- -------------- ------------- ------------- --------------
Income from Investment Operations
Net Investment Income (dividends).......
Net Realized and Unrealized Gain (Loss) on
Investment Transactions.................
------------- -------------- ------------- ------------- --------------
Total From Investment Operations........
------------- -------------- ------------- ------------- --------------
Less Distributions
From Net Investment Income (dividends)..
------------- -------------- ------------- ------------- --------------
------------- -------------- ------------- ------------- --------------
Net Asset Value, End of Year...............
------------- -------------- ------------- ------------- --------------
Total Return(1)............................

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses to Average Net
Assets.....................................

Ratio of Net Investment Income to Average Net
Assets.....................................

Net Assets, End of Year (in thousands).....

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

[UPDATED FIGURES NOT AVAILABLE]

More information about the funds is contained in these documents:

You also can get information about the fund (including the SAI) from the
Securities and Exchange Commission (SEC).

American Century Investments
P.O. Box 419385
Kansas City, Missouri 64141-6385

Investment Professional Service Representative
1-800-345-3533 or 816-531-5575

Fax
816-340-4360

www.americancentury.com

Telecommunications Device for the Deaf
1-800-345-1833 or 816-444-3038

Investment Company Act File No. 811-5188
<PAGE>
[american century logo(reg.sm)]
American
Century

Prospectus

MARCH 17, 1999
- --------------------------------------------------------------------------------

VP Advantage

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

Distributed by Funds Distributor, Inc.

Table of Contents

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

Information about the Fund............................................

Management............................................................

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

Taxes.................................................................

Financial Highlights..................................................

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

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

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

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

An Overview of the Fund

What is the fund's investment goal?

This fund seeks long-term capital growth and current income by investing
approximately 40% of the fund's assets in equity securities, 40% in fixed income
securities and the remaining 20% in cash and cash equivalents.

What is the fund's primary investment strategy and principal risks?

In selecting stocks for the equity portion of VP Advantage, the fund managers
look for common stocks of growing companies. The basis of the equity strategy is
that, over the long term, stocks of companies with earnings and revenue growth
have a greater than average chance to increase in value over time. The
fixed-income and cash portions of the fund are invested in fixed-income
securities of the United States government and its agencies and
instrumentalities. A more detailed description of the fund's investment strategy
begins on page xx.

The fund's principal risks include

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

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

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

Who may want to invest in the fund?

The fund may be a good investment if you are

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

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

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

Who may not want to invest in the fund?

The fund may not be a good investment if you are

0 investing for a short period of time

0 uncomfortable with volatility in the value of your investment

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

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

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

Information about the Fund

VP Advantage

What is the fund's investment objective?

How does the fund pursue its investment objective?

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

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

The fixed-income and cash portions of the fund will be invested only in
obligations of the U.S. government, its agencies and instrumentalities. The
fixed income securities in which the fund may invest include (1) direct
obligations of the United States, such as Treasury bonds, notes and bonds, and
(2) obligations (including mortgage-backed and other asset-backed securities)
issued or guaranteed by agencies and instrumentalities of the U.S. government
that are established under an act of Congress. Under normal market conditions,
the fixed-income portion is expected to have a weighted average maturity of
three to 10 years, and the cash portion is expected to have a weighted average
maturity of six months or less. Securities will be chosen based on their income
level and price stability.

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

In the event of exceptional market or economic conditions, or if the fund is
unable to find securities meeting its criteria of selection, the fund may, as a
temporary defensive measure, invest all or a portion of its assets in cash or
cash equivalents. To the extent the fund assumes a defensive position, it will
not be pursuing its objective of capital growth.

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

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

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

Non-leveraged means that the fund may not invest in futures contracts where
it would be possible to lose more than the fund invested.

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

Additional information about VP Advantage's investments is available in its
annual and semiannual reports. In these reports you will find a discussion of
the market conditions and investment strategies that significantly affected the
fund's performance during the most recent fiscal period. You may get these
reports at no cost by calling the insurance company from which you purchased the
fund or by calling us.

What are the primary risks of investing in the fund?

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

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

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

As with all funds, at any given time the value of your shares of VP Advantage
may be worth more or less than the price you paid. If you sell your shares when
the value is less than the price you paid, you will lose money.

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

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

Fund Performance History

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

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

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

Annual Total Returns

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

1998 17.19%
1997 12.83%
1996 9.25%
1995 16.75%
1994 1.03%
1993 6.84%
1992 -3.76%

Highest and Lowest Quarterly Returns

Highest 9.98% 4Q1998
Lowest -5.07% 1Q1992

Average Annual Returns

<TABLE>
For the calendar year ended December 31, 1998 1 year 5 years Life of fund*
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C>
VP Advantage 17.19% 11.25% 9.75%
Lehman Intermediate-Government Bond Index 8.49% 6.45% 7.57%
S&P 500 Index 28.68% 24.05% 19.74%
90-Day Treasury Bill Index 4.50% 4.95% 4.49%
Blended Index** 15.78% 13.21% 11.82%
- -----------------------------------------------------------------------------------------
</TABLE>

* The inception date for VP Advantage is August 1, 1991.

** The Blended Index is a combination of three widely known indices in
proportion to the approximate asset mix of the fund. Accordingly, 40% of the
Blended Index consists of the performance of the Lehman
Intermediate-Government Bond Index, another 40% of the Blended Index
consists of the S&P 500 Index, and the remaining 20% consists of the 90-Day
Treasury Bill Index.

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

* For current performance of information, please call us at 1-800-345-3533 or
visit American Century's Web site at www.americancentury.com.

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

Management

Who manages the fund?

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

The Board of Directors

The Investment Advisor

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

The Fund Management Team

The portfolio managers on the investment team are identified below:

James E. Stowers III
Mr. Stowers, Chief Executive Officer and Portfolio Manager, joined American
Century as a portfolio manager in 1981. He has been a member of the team that
manages the equity portion of VP Advantage since the fund's inception. He has a
bachelor's degree in finance from Arizona State University.

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

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

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

John F. Walsh
John F. Walsh, Portfolio Manager, has been a member of the team that manages the
fixed income portion of VP Advantage since January 1999. He joined American
Century in February 1996 as an Investment Analyst, a position he held until May
1997. At that time he was promoted to Portfolio Manager. Prior to joining
American Century, he served as an Assistant Vice President and Analyst at First
Interstate Bank, Los Angeles, California. He has a bachelor's degree in
marketing from Loyola Marymount University and an MBA in finance from Creighton
University.

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

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

Fundamental Investment Policies

Year 2000 Issues

Share Price and Distributions

Purchase and Redemption of Shares

Share Price

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

Distributions

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

Taxes

Consult the prospectus of your insurance company separate account for a
discussion of the tax status of your variable contract.

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

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

Capital gains are increases in the values of capital assets, such as stock, from
the time the assets are purchased. Tax becomes due on capital gains once an
asset is sold.

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

Financial Highlights

Understanding the Financial Highlights

On a per-share basis, the table includes

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

The table also includes some key statistics for the period

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

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

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

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

<TABLE>
<CAPTION>
VP Advantage

For a Share Outstanding Throughout the Years Ended December 31

<S> <C> <C> <C> <C> <C>
1998 1997 1996 1995 1994

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses to Average Net
Assets.....................................

Ratio of Net Investment Income to Average Net
Assets.....................................

Net Assets, End of Year (in thousands).....

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

[UPDATED FIGURES NOT AVAILABLE]

More information about the funds is contained in these documents:

You also can get information about the fund (including the SAI) from the
Securities and Exchange Commission (SEC).

American Century Investments
P.O. Box 419385
Kansas City, Missouri 64141-6385

Investment Professional Service Representative
1-800-345-3533 or 816-531-5575

Fax
816-340-4360

www.americancentury.com

Telecommunications Device for the Deaf
1-800-345-1833 or 816-444-3038

Investment Company Act File No. 811-5188
<PAGE>
[american century logo(reg.sm)]
American
Century

Prospectus

MARCH 17, 1999
- --------------------------------------------------------------------------------

VP Income & Growth

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

Distributed by Funds Distributor, Inc.

Table of Contents

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

Information about the Fund.............................................

Management.............................................................

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

Taxes..................................................................

Financial Highlights...................................................

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

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

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

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

An Overview of the Fund

What is the fund's investment goal?

This fund seeks dividend growth, current income and capital appreciation.

What is the fund's primary investment strategy and principal risks?

In selecting stocks for Income & Growth, the fund managers select primarily from
the largest 1500 publicly traded U.S. companies. The managers use quantitative,
computer-driven models to construct the portfolios of stocks.

The fund's principal risks include:

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

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

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

Who may want to invest in the fund?

The fund may be a good investment if you are

0 seeking long-term capital growth from your investment

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

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

Who may not want to invest in the fund?

The fund may not be a good investment if you are

0 investing for a short period of time

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

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

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

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

Information about the Fund

VP Income & Growth

What is the fund's investment objective?

This fund seeks dividend growth, current income and capital appreciation by
investing in common stocks.

How does the fund pursue its investment objective?

The fund's investment strategy utilizes quantitative management techniques in a
two-step process that draws heavily on computer technology. In the first step,
the fund managers rank stocks, primarily the 1,500 largest publicly traded
companies in the United States (measured by the value of their stock) from most
attractive to least attractive. This is determined by using a computer model
that combines measures of a stock's value, as well as measures of its growth
potential. To measure value, the managers use ratios of stock price to book
value and stock price to cash flow, among others. To measure growth, the
managers use, among others, the rate of growth of a company's earnings and
changes in the earnings estimates for a company.

In the second step, the managers use a technique called portfolio optimization.
In portfolio optimization, the managers use a computer to build a portfolio of
stocks from the ranking described earlier that they believe will provide the
optimal balance between risk and expected return. The goal is to create a fund
that provides better returns than the S&P 500 without taking on significant
additional risk. The managers also attempt to create a dividend yield for the
fund that will be greater than that of the S&P 500.

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

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

Non-leveraged means that the fund may not invest in futures contracts where it
would be possible to lose more than the fund invested.

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

Additional information about VP Income & Growth's investments is available in
its annual and semiannual reports. In these reports you will find a discussion
of the market conditions and investment strategies that significantly affected
the fund's performance during the most recent fiscal period. You may get these
reports at no cost by calling the insurance company from which you purchased the
fund or by calling us.

What are the primary risks of investing in the fund?

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

Fund Performance History

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

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

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

Annual Total Returns

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

1998 26.87%

Highest and Lowest Quarterly Returns

Highest 21.69% 1Q1998
Lowest -11.25% 3Q1998

Average Annual Returns

The following table shows the average annual returns of the fund's shares for
the periods indicated for the life of the fund. The benchmark is an unmanaged
index that has no operating costs and is included in the table for performance
comparison.

For the calendar year ended December 31, 1998 1 year Life of fund*
- -------------------------------------------------------------------------------
VP Income & Growth 26.87% 30.68%
S & P 500 Index 28.68% 32.30%
- -------------------------------------------------------------------------------

* The inception date for VP Income & Growth is October 30, 1997.

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

* For current performance of information, please call us at 1-800-345-3533 or
visit American Century's Web site at www.americancentury.com.

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

Management

Who manages the fund?

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

The Board of Directors

The Investment Advisor

For the services it provided to the fund during its most recent fiscal year, the
advisor received a unified management fee of 0.70% the average net assets of the
fund. The amount of the management fee is calculated daily and paid monthly. Out
of that fee, the advisor paid all expenses of managing and operating the fund
except brokerage expenses, taxes, interest, fees and expenses of the independent
directors (including legal counsel fees) and extraordinary expenses.

The Fund Management Team

The portfolio manager members of the investment team for the funds are
identified below:

John Schniedwind, Senior Vice President and Group Leader--Quantitative Equity,
has been a member of the team since the fund's inception. He joined American
Century in 1982 and also supervises other portfolio management teams. He has
degrees from Purdue University and an MBA in finance from University of
California. He is a Chartered Financial Analyst.

Kurt Borgwardt, Vice President, Portfolio Manager and Director of Quantitative
Equity Research, joined American Century in 1990, has managed the quantitative
equity research effort since then and has been a member of the team since the
fund's inception. He has a degree from Stanford University and an MBA with a
specialization in finance from the University of Chicago. He is a Chartered
Financial Analyst.

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

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

Fund Performance

VP Income & Growth has the same management team and investment policies as
another fund in the American Century family of funds. The fees and expenses of
the funds are expected to be similar, and they will be managed with
substantially the same investment objective and strategies. Notwithstanding
these general similarities, this fund and the retail fund are separate mutual
funds that will have different investment performance. Differences in cash flows
into the two funds, the size of their portfolios, specific investments held by
the two funds, as well as the additional expenses of the insurance product, will
cause performance to differ.

Please consult the separate account prospectus for a description of the
insurance product through which the fund is offered and the associated fees.

Fundamental Investment Policies

Year 2000 Issues

Share Price and Distributions

Purchase and Redemption of Shares

Share Price

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

Distributions

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

Taxes

Consult the prospectus of your insurance company separate account for a
discussion of the tax status of your variable contract.

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

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

Capital gains are increases in the values of capital assets, such as stock, from
the time the assets are purchased. Tax becomes due on capital gains once an
asset is sold.

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

Financial Highlights

Understanding the Financial Highlights

On a per-share basis, the table includes

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

The table also includes some key statistics for the period

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

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

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

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

<TABLE>
<CAPTION>
VP Income & Growth

For a Share Outstanding Throughout the Years Ended December 31, except as noted

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

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses to Average Net
Assets.....................................

Ratio of Net Investment Income to Average Net
Assets.....................................

Net Assets, End of Year (in thousands).....

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

[UPDATED FIGURES NOT AVAILABLE]

More information about the funds is contained in these documents:

You also can get information about the fund (including the SAI) from the
Securities and Exchange Commission (SEC).

American Century Investments
P.O. Box 419385
Kansas City, Missouri 64141-6385

Investment Professional Service Representative
1-800-345-3533 or 816-531-5575

Fax
816-340-4360

www.americancentury.com

Telecommunications Device for the Deaf
1-800-345-1833 or 816-444-3038

Investment Company Act File No. 811-5188
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION

March 17, 1999

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

VP Advantage
VP Balanced
VP Capital Appreciation
VP Income & Growth
VP International
VP Value

AMERICAN CENTURY VARIABLE PORTFOLIOS, INC.

This Statement of Additional Information adds to the discussion in the funds'
Prospectuses, dated March 17, 1999, but is not a prospectus. If you would like a
copy of one or more of the Prospectuses, please contact us at one of the
addresses or telephone numbers listed on the back cover or visit American
Century's Web site at www.americancentury.com.

This Statement of Additional Information incorporates by reference certain
information that appears in the funds' annual and semiannual reports, which are
delivered to all shareholders. You may obtain a free copy of the funds' annual
or semiannual reports by calling 1-800-345-3533.

Distributed by Funds Distributor, Inc.

STATEMENT OF ADDITIONAL INFORMATION
MARCH 17, 1999

Table of Contents
THE FUNDS' HISTORY
FUND INVESTMENT GUIDELINES

DETAILED INFORMATION ABOUT THE FUNDS
Investment Strategies and Risks
Investment Policies
Portfolio Turnover

MANAGEMENT
The Board of Directors
Officers

THE FUNDS' BIGGEST SHAREHOLDERS
SERVICE PROVIDERS
Investment Advisor
Distributor
Transfer Agent and Administrator
Other Service Providers

BROKERAGE ALLOCATION
INFORMATION ABOUT FUND SHARES
MULTIPLE CLASS STRUCTURE
BUYING AND SELLING FUND SHARES
VALUATION OF A FUND'S SECURITIES
MULTIPLE CLASS PERFORMANCE INFORMATION
TAXES
HOW FUND PERFORMANCE INFORMATION IS CALCULATED
FINANCIAL STATEMENTS
EXPLANATION OF FIXED INCOME SECURITIES RATINGS
Bond Ratings
Commercial Paper Ratings
Note Ratings

THE FUNDS' HISTORY

American Century Variable Portfolios, Inc. is a registered open-end management
investment company that was organized as a Maryland corporation on June 4, 1987.
The corporation was known as TCI Portfolios, Inc. until May 1997. Throughout
this Statement of Additional Information we refer to American Century Variable
Portfolios, Inc. as the corporation.

Each fund described in this Statement of Additional Information is a separate
series of ACVP and operates for many purposes as if it were an independent
company. Each fund has its own investment objective, strategy, management team,
assets, tax identification and stock registration number. A fund's inception
date is the first date its shares were offered to the public.

- --------------------------------- ----------------------------------------------
FUND INCEPTION DATE
- --------------------------------- ----------------------------------------------
VP Advantage 8/1/91
VP Balanced 5/1/91
VP Capital Appreciation 11/20/87
VP Income & Growth 10/30/97
VP International 5/1/94
VP Value 5/1/96

FUND INVESTMENT GUIDELINES

This section explains the extent to which the funds' advisor, American Century
Investment Management, Inc., can use various investment vehicles and strategies
in managing a fund's assets. Descriptions of the investment techniques and risks
associated with each appear in the section, "Investment Strategies and Risks,"
which begins on page XX. In the case of the funds' principal investment
strategies, these descriptions elaborate upon discussions contained in the
Prospectuses.

Each fund is a diversified open-end investment company as defined in the
Investment Company Act of 1940 (the Investment Company Act). "Diversified" means
that, with respect to 75% of its total assets, each fund will not invest more
than 5% of its total assets in the securities of a single issuer.

To meet federal tax requirements for qualification as a regulated investment
company, each fund must limit its investments so that at the close of each
quarter of its taxable year (1) no more than 25% of its total assets are
invested in the securities of a single issuer (other than the U.S government or
a regulated investment company), and (2) with respect to at least 50% of its
total assets, no more than 5% of its total assets are invested in the securities
of a single issuer.

In general, within the restrictions outlined here and in the fund's
Prospectuses, the fund managers have broad powers to decide how to invest fund
assets, including the power to hold them uninvested.

VP CAPITAL APPRECIATION, VP INCOME & GROWTH, VP INTERNATIONAL AND THE EQUITY
PORTION OF VP ADVANTAGE

Investments are varied according to what is judged advantageous under changing
economic conditions. It is the advisor's policy to retain maximum flexibility in
management without restrictive provisions as to the proportion of one or another
class of securities that may be held, subject to the investment restrictions
described below. It is the advisor's intention that each fund will generally
consist of domestic and foreign common stocks and equity equivalent securities.
However, subject to the specific limitations applicable to a fund, the funds'
management teams may invest the assets of each fund in varying amounts in other
instruments, such as those discussed under "Investment Strateges and Risks,"
below, when such a course is deemed appropriate in order to attempt to attain
its investment objective. Senior securities that, in the opinion of the manager,
are high-grade issues may also be purchased for defensive purposes. [Note: The
above statement of fundamental policy gives the advisor authority to invest in
securities other than common stocks and traditional debt and convertible issues.
Though the funds have not made such investments in the past, the fund managers
may invest in master limited partnerships (other than real estate partnerships)
and royalty trusts, which are traded on domestic stock exchanges when such
investments are deemed appropriate for the attainment of the funds' investment
objectives.]

So long as a sufficient number of such securities are available, the manager
intends to keep the funds fully invested in stocks that demonstrate accelerating
growth, regardless of the movement of stock prices, generally. In most
circumstances, the funds' actual level of cash and cash equivalents will be less
than 10%. The fund managers may use S&P 500 Index futures as a way to expose the
funds' cash assets to the market, while maintaining liquidity. As mentioned in
the Prospectuses, the fund managers may not leverage the funds' portfolios, so
there is no greater market risk to the funds than if they purchase stocks. See
"Short Term Investments," page XX, "Futures and Options," page XX, and
"Derivative Securities," page XX.

VP BALANCED

As a matter of fundamental policy, the fund managers will invest approximately
60% of the Balanced portfolio in equity securities and the remainder in bonds
and other fixed income securities. The equity portion of the fund generally will
be invested in equity securities of companies comprising the 1500 largest
publicly traded companies in the United States. The fund's investment approach
may cause its equity portion to be more heavily invested in some industries than
in others. However, it may not invest more than 25% of its total assets in
companies whose principal business activities are in the same industry. In
addition, as a "diversified" investment company, its investments in a single
issue are limited, as described under "Fund Investment Guidelines" above. The
fund managers may also purchase foreign securities, convertible securities,
stock index futures contracts and similar securities, and short-term securities.

The fixed income portion of the fund generally will be invested in a diversified
portfolio of high-grade government, corporate, asset backed and similar
securities. There are no maturity restrictions on the fixed income securities in
which the fund invests, but under normal conditions the weighted average
maturity for the fixed income portion of the fund will be in the 3-10 year
range. The fund managers will actively manage the portfolio, adjusting the
weighted average portfolio maturity in response to expected changes in interest
rates. During periods of rising interest rates, a shorter weighted average
maturity may be adopted in order to reduce the effect of bond price declines on
the fund's net asset value. When interest rates are falling and bond prices
rising, a longer weighted average portfolio maturity may be adopted. The
restrictions on the quality of the fixed income securities the fund may purchase
are described in the Prospectus. For a description of the fixed income
securities rating system, see "An Explanation of Fixed Income Securities
Ratings," beginning on page XX of this SAI.

VP VALUE

The fund managers of VP Value will invest primarily in stocks of medium to large
companies that the managers believe are undervalued at the time of purchase. The
fund will usually purchase common stocks of U.S. and foreign companies, but they
can purchase other types of securities, as well, such as domestic and foreign
preferred stocks, convertible securities, equity equivalent securities, notes,
bonds and other debt securities.

THE FIXED INCOME PORTION OF VP ADVANTAGE

The government securities in which VP Advantage may invest include: (1) direct
obligations of the United States, such as Treasury bills, notes and bonds, which
are supported by the full faith and credit of the United States, and (2)
obligations (including mortgage-related securities) issued or guaranteed by
agencies and instrumentalities of the United States government that are
established under an act of Congress. The securities of some of these agencies
and instrumentalities, such as the Government National Mortgage Association, are
guaranteed as to principal and interest by the U.S. Treasury, and other
securities are supported by the right of the issuer, such as the Federal Home
Loan Banks, to borrow from the Treasury. Other obligations, including those
issued by the Federal National Mortgage Association and the Federal Home Loan
Mortgage Corporation, are supported only by the credit of the instrumentality.

Mortgage-related securities in which the funds may invest include collateralized
mortgage obligations (CMOs) issued by a United States agency or instrumentality.
A CMO is a debt security that is collateralized by a portfolio or pool of
mortgages or mortgage-backed securities. The issuer's obligation to make
interest and principal payments is secured by the underlying pool or portfolio
of mortgages or securities.

The market value of mortgage-related securities, even those in which the
underlying pool of mortgage loans is guaranteed as to the payment of principal
and interest by the United States government, is not insured. When interest
rates rise, the market value of those securities may decrease in the same manner
as other debt, but when interest rates decline, their market value may not
increase as much as other debt instruments because of the prepayment feature
inherent in the underlying mortgages. If such securities are purchased at a
premium, the fund will suffer a loss if the obligation is prepaid. Prepayments
will be reinvested at prevailing rates, which may be less than the rate paid by
the prepaid obligation.

For the purpose of determining the weighted average portfolio maturity of the
funds, the manager shall consider the maturity of a mortgage-related security to
be the remaining expected average life of the security. The average life of such
securities is likely to be substantially less than the original maturity as a
result of prepayments of principal on the underlying mortgages, especially in a
declining interest rate environment. In determining the remaining expected
average life, the manager makes assumptions regarding repayments on underlying
mortgages. In a rising interest rate environment, those prepayments generally
decrease, and may decrease below the rate of prepayment assumed by the manager
when purchasing those securities. Such slowdown may cause the remaining maturity
of those securities to lengthen, which will increase the relative volatility of
those securities and, hence, the fund holding the securities.

DETAILED INFORMATION ABOUT THE FUNDS
INVESTMENT STRATEGIES AND RISKS

This section describes various investment vehicles and techniques that the
advisor can use in managing a fund's assets. It also details the risks
associated with each, because each technique contributes to a fund's overall
risk profile.

Foreign Securities

Each fund may invest in the securities of foreign issuers, including foreign
governments, when these securities meet its standards of selection. Securities
of foreign issuers may trade in the U.S. or foreign securities markets.

The chart below shows the portion of each fund's total assets that may be
invested in the securities of foreign issuers.

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

FUND PERCENTAGE PERMITTED IN
FOREIGN SECURITIES
- ------------------------------------- ----------------------------------------
- ------------------------------------- ----------------------------------------
VP Advantage Unlimited
- ------------------------------------- ----------------------------------------
- ------------------------------------- ----------------------------------------
VP Balanced Unlimited
- ------------------------------------- ----------------------------------------
- ------------------------------------- ----------------------------------------
VP Capital Appreciation Unlimited
- ------------------------------------- ----------------------------------------
- ------------------------------------- ----------------------------------------
VP Income & Growth Unlimited
- ------------------------------------- ----------------------------------------
- ------------------------------------- ----------------------------------------
VP International Unlimited
- ------------------------------------- ----------------------------------------
- ------------------------------------- ----------------------------------------
VP Value Unlimited
- ------------------------------------- ----------------------------------------

Investments in foreign securities may present certain risks, including those
resulting from fluctuations in currency exchange rates, future political and
economic developments, clearance and settlement risk, reduced availability of
public information concerning issuers, and the fact that foreign issuers are not
generally subject to uniform accounting, auditing and financial reporting
standards or to other regulatory practices and requirements comparable to those
applicable to domestic issuers.

Because most foreign securities are denominated in non-U.S. currencies, the
investment performance of the fund could be affected by changes in foreign
currency exchange rates. The value of a fund's assets denominated in foreign
currencies will increase or decrease in response to fluctuations in the value of
those foreign currencies relative to the U.S. dollar. Currency exchange rates
can be volatile at times in response to supply and demand in the currency
exchange markets, international balances of payments, governmental intervention,
speculation, and other political and economic conditions.

Each fund may purchase and sell foreign currency on a spot basis and may engage
in forward currency contracts, currency options and futures transactions for
hedging or any other lawful purpose. See "Derivative Securities" on page XX.

Forward Currency Exchange Contracts

The funds conduct their foreign currency exchange transactions either on a spot
(i.e., cash) basis at the spot rate prevailing in the foreign currency exchange
market, or through entering into forward foreign currency exchange contracts to
purchase or sell foreign currencies.

The funds expect to use forward contracts under two circumstances:

(1) When the advisor wishes to "lock in" the U.S. dollar price of a
security when a fund is purchasing or selling a security denominated in
a foreign currency, the fund would be able to enter into a forward
contract to do so; or

(2) When the advisor believes that the currency of a particular foreign
country may suffer a substantial decline against the U.S. dollar, a
fund would be able to enter into a forward contract to sell foreign
currency for a fixed U.S. dollar amount approximating the value of some
or all of its portfolio securities either denominated in, or whose
value is tied to, such foreign currency.

As to the first circumstance, when a fund enters into a trade for the purchase
or sale of a security denominated in a foreign currency, it may be desirable to
establish (lock in) the U.S. dollar cost or proceeds. By entering into forward
contracts in U.S. dollars for the purchase or sale of a foreign currency
involved in an underlying security transaction, the fund will be able to protect
itself against a possible loss between trade and settlement dates resulting from
the adverse change in the relationship between the U.S. dollar at the subject
foreign currency.

Under the second circumstance, when the advisor believes that the currency of a
particular country may suffer a substantial decline relative to the U.S. dollar,
a fund could enter into a foreign contract to sell for a fixed dollar amount the
amount in foreign currencies approximating the value of some or all of its
portfolio securities either denominated in, or whose value is tied to, such
foreign currency. The fund will place cash or high-grade liquid securities in a
separate account with its custodian in an amount equal to the value of the
forward contracts entered into under the second circumstance. If the value of
the securities placed in the separate account declines, additional cash or
securities will be placed in the account on a daily basis so that the value of
the account equals the amount of the fund's commitments with respect to such
contracts.

The precise matching of forward contracts in the amounts and values of
securities involved generally would not be possible since the future values of
such foreign currencies will change as a consequence of market movements in the
values of those securities between the date the forward contract is entered into
and the date it matures. Predicting short-term currency market movements is
extremely difficult, and the successful execution of short-term hedging strategy
is highly uncertain. The advisor does not intend to enter into such contracts on
a regular basis. Normally, consideration of the prospect for currency parties
will be incorporated into the long-term investment decisions made with respect
to overall diversification strategies. However, the advisor believes that it is
important to have flexibility to enter into such forward contracts when it
determines that a fund's best interests may be served.

Generally, a fund will not enter into a forward contract with a term of greater
than one year. At the maturity of the forward contract, the fund may either sell
the portfolio security and make delivery of the foreign currency, or it may
retain the security and terminate the obligation to deliver the foreign currency
by purchasing an "offsetting" forward contract with the same currency trader
obligating the fund to purchase, on the same maturity date, the same amount of
the foreign currency.

It is impossible to forecast with absolute precision the market value of
portfolio securities at the expiration of the forward contract. Accordingly, it
may be necessary for a fund to purchase additional foreign currency on the spot
market (and bear the expense of such purchase) if the market value of the
security is less than the amount of foreign currency the fund is obligated to
deliver and if a decision is made to sell the security and make delivery of the
foreign currency the fund is obligated to deliver.

Convertible Securities

A convertible security is a fixed-income security that offers the potential for
capital appreciation through a conversion feature that enables the holder to
convert the fixed-income security into a stated number of shares of common
stock. As fixed income securities, convertible securities provide a stable
stream of income, with generally higher yields than common stocks. Because
convertible securities offer the potential to benefit from increases in the
market price of the underlying common stock, however, they generally offer lower
yields than non-convertible securities of similar quality. Of course, like all
fixed income securities, there can be no assurance of current income because the
issuers of the convertible securities may default on their obligations. In
addition, there can be no assurance of capital appreciation because the value of
the underlying common stock will fluctuate.

Convertible securities generally are subordinated to other similar but
non-convertible securities of the same issuer, although convertible bonds, as
corporate debt obligations, enjoys seniority in right of payment to all equity
securities, and convertible preferred stock is senior to common stock of the
same issuer. Because of the subordination feature, however, convertible
securities typically have lower ratings than similar non-convertible securities.

Unlike a convertible security that is a single security, a synthetic convertible
security is comprised of two distinct securities that together resemble
convertible securities in certain respects. Synthetic convertible securities are
created by combining non-convertible bonds or preferred stocks with warrants or
stock call options. The options that will form elements of synthetic convertible
securities will be listed on a securities exchange or on the National
Association of Securities Dealers Automated Quotation Systems. The two
components of a synthetic convertible security, which will be issued with
respect to the same entity, generally are not offered as a unit, and may be
purchased and sold by the fund at different times. Synthetic convertible
securities differ from convertible securities in certain respects, including
that each component of a synthetic convertible security has a separate market
value and responds differently to market fluctuations. Investing in synthetic
convertible securities involves the risk normally involved in holding the
securities comprising the synthetic convertible security.

Short Sales

A fund may engage in short sales if, at the time of the short sale, the fund
owns or has the right to acquire securities equivalent in kind and amount to the
securities being sold short.

In a short sale, the seller does not immediately deliver the securities sold and
is said to have a short position in those securities until delivery occurs. To
make delivery to the purchaser, the executing broker borrows the securities
being sold short on behalf of the seller. While the short position is
maintained, the seller collateralizes its obligation to deliver the securities
sold short in an amount equal to the proceeds of the short sale plus an
additional margin amount established by the Board of Governors of the Federal
Reserve. If a fund engages in a short sale, the collateral account will be
maintained by the fund's custodian. While the short sale is open, the fund will
maintain in a segregated custodial account an amount of securities convertible
into, or exchangeable for, such equivalent securities at no additional cost.
These securities would constitute the fund's long position.

A fund may make a short sale, as described above, when it wants to sell the
security it owns at a current attractive price, but also wishes to defer
recognition of gain or loss for federal income tax purposes. There will be
certain additional transaction costs associated with short sales, but the fund
will endeavor to offset these costs with income from the investment of the cash
proceeds of short sales.

Portfolio Lending

In order to realize additional income, a fund may lend its portfolio securities.
Such loans may not exceed one-third of the fund's net assets valued at market
except (i) through the purchase of debt securities in accordance with its
investment objective, policies and limitations, or (ii) by engaging in
repurchase agreements with respect to portfolio securities.

Derivative Securities

To the extent permitted by its investment objectives and policies, each of the
funds may invest in securities that are commonly referred to as "derivative"
securities. Generally, a derivative is a financial arrangement the value of
which is based on, or "derived" from, a traditional security, asset, or market
index. Certain derivative securities are more accurately described as
"index/structured" securities. Index/structured securities are derivative
securities whose value or performance is linked to other equity securities (such
as depositary receipts), currencies, interest rates, indices or other financial
indicators ("reference indices").

Some "derivatives" such as mortgage-related and other asset-backed securities
are in many respects like any other investment, although they may be more
volatile or less liquid than more traditional debt securities.

There are many different types of derivatives and many different ways to use
them. Futures and options are commonly used for traditional hedging purposes to
attempt to protect a fund from exposure to changing interest rates, securities
prices, or currency exchange rates and for cash management purposes as a
low-cost method of gaining exposure to a particular securities market without
investing directly in those securities.

No fund may invest in a derivative security unless the reference index or the
instrument to which it relates is an eligible investment for the fund. For
example, a security whose underlying value is linked to the price of oil would
not be a permissible investment since the funds may not invest in oil and gas
leases or futures.

The return on a derivative security may increase or decrease, depending upon
changes in the reference index or instrument to which it relates.

There are a range of risks associated with derivative investments, including

* the risk that the underlying security, interest rate, market index or other
financial asset will not move in the direction the portfolio manager
anticipates;

* the possibility that there may be no liquid secondary market, or the
possibility that price fluctuation limits may be imposed by the exchange,
either of which may make it difficult or impossible to close out a position
when desired;

* the risk that adverse price movements in an instrument can result in a loss
substantially greater than a fund's initial investment; and

* the risk that the counterparty will fail to perform its obligations.

The Board of Directors has approved the advisor's policy regarding investments
in derivative securities. That policy specifies factors that must be considered
in connection with a purchase of derivative securities. The policy also
establishes a committee that must review certain proposed purchases before the
purchases can be made. The advisor will report on fund activity in derivative
securities to the Board of Directors as necessary. In addition, the Board will
review the advisor's policy for investments in the derivative securities
annually.

Investments In Companies With Limited Operating History

The funds may invest a portion of their assets in the securities of issuers with
limited operating history. The advisor considers an issuer to have a limited
operating history if that issuer has a record of less than three years of
continuous operation. The advisor will consider periods of capital formation,
incubation, consolidations, and research and development in determining whether
a particular issuer has a record of three years of continuous operation.

Investments in securities of issuers with limited operating history may involve
greater risks than investments in securities of more mature issuers. By their
nature, such issuers present limited operating history and financial information
upon which the manager may base its investment decision on behalf of the funds.
In additon, financial and other information regarding such issuers, when
available, may be incomplete or inaccurate.

Repurchase Agreements

Each fund may invest in repurchase agreements when such transactions present an
attractive short-term return on cash that is not otherwise committed to the
purchase of securities pursuant to the investment policies of that fund.

A repurchase agreement occurs when, at the time the fund purchases an
interest-bearing obligation, the seller (a bank or a broker-dealer registered
under the Securities Exchange Act of 1934) agrees to purchase it on a specified
date in the future at an agreed-upon price. The repurchase price reflects an
agreed-upon interest rate during the time the fund's money is invested in the
security.

Since the security purchased constitutes security for the repurchase obligation,
a repurchase agreement can be considered a loan collateralized by the security
purchased. The fund's risk is the ability of the seller to pay the agreed-upon
repurchase price on the repurchase date. If the seller defaults, the fund may
incur costs in disposing of the collateral, which would reduce the amount
realized thereon. If the seller seeks relief under the bankruptcy laws, the
disposition of the collateral may be delayed or limited. To the extent the value
of the security decreases, the fund could experience a loss.

The funds will limit repurchase agreement transactions to securities issued by
the U.S. government, its agencies and instrumentalities, and will enter into
such transactions with those banks and securities dealers who are deemed
creditworthy pursuant to criteria adopted by the funds' Board of Directors.

No fund will invest more than 15% of its assets in repurchase agreements
maturing in more than seven days.

Municipal Notes

Municipal notes are issued by state and local governments or government entities
to provide short-term capital or to meet cash flow needs.

Tax Anticipation Notes (TANs) are issued in anticipation of seasonal tax
revenues, such as ad valorem property, income, sales, use and business taxes,
and are payable from these future taxes. Tax anticipation notes usually are
general obligations of the issuer. General obligations are secured by the
issuer's pledge of its full faith and credit (i.e., taxing power) for the
payment of principal and interest.

Revenue Anticipation Notes (RANs) are issued with the expectation that receipt
of future revenues, such as federal revenue sharing or state aid payments, will
be used to repay the notes. Typically, these notes also constitute general
obligations of the issuer.

Bond Anticipation Notes (BANs) are issued to provide interim financing until
long-term financing can be arranged. In most cases, the long-term bonds provide
the money for repayment of the notes.

Tax-Exempt Commercial Paper is an obligation with a stated maturity of 365 days
or less issued to finance seasonal cash flow needs or to provide short-term
financing in anticipation of longer-term financing.

Revenue Anticipation Warrants, or reimbursement warrants, are issued to meet the
cash flow needs of the State of California at the end of a fiscal year and in
the early weeks of the following fiscal year. These warrants are payable from
unapplied money in the state's General Fund, including the proceeds of revenue
anticipation notes issued following enactment of a state budget or the proceeds
of refunding warrants issued by the state.

Municipal Bonds

Municipal bonds, which generally have maturities of more than one year when
issued, are designed to meet longer-term capital needs. These securities have
two principal classifications: general obligation bonds and revenue bonds.

General Obligation (GO) Bonds are issued by states, counties, cities, towns and
regional districts to fund a variety of public projects, including construction
of and improvements to schools, highways, and water and sewer systems. General
obligation bonds are backed by the issuer's full faith and credit based on its
ability to levy taxes for the timely payment of interest and repayment of
principal, although such levies may be constitutionally or statutorily limited
as to rate or amount.

Revenue Bonds are not backed by an issuer's taxing authority; rather, interest
and principal are secured by the net revenues from a project or facility.
Revenue bonds are issued to finance a variety of capital projects, including
construction or refurbishment of utility and waste disposal systems, highways,
bridges, tunnels, air and sea port facilities, schools and hospitals. Many
revenue bond issuers provide additional security in the form of a debt-service
reserve fund that may be used to make payments of interest and repayments of
principal on the issuer's obligations. Some revenue bond financings are further
protected by a state's assurance (without obligation) that it will make up
deficiencies in the debt-service reserve fund.

Industrial Development Bonds (IDBs), a type of revenue bond, are issued by or on
behalf of public authorities to finance privately operated facilities. These
bonds are used to finance business, manufacturing, housing, athletic and
pollution control projects, as well as public facilities such as mass transit
systems, air and sea port facilities and parking garages. Payment of interest
and repayment of principal on an IDB depend solely on the ability of the
facility's user to meet financial obligations, and on the pledge, if any, of the
real or personal property financed. The interest earned on IDBs may be subject
to the federal alternative minimum tax.

Variable- And Floating-Rate Obligations

The funds may buy variable- and floating-rate demand obligations (VRDOs and
FRDOs). These obligations carry rights that permit holders to demand payment of
the unpaid principal plus accrued interest, from the issuers or from financial
intermediaries. Floating-rate securities, or floaters, have interest rates that
change whenever there is a change in a designated base rate; variable-rate
instruments provide for a specified, periodic adjustment in the interest rate,
which typically is based on an index. These rate formulas are designed to result
in a market value for the VRDO or FRDO that approximates par value.

Obligations With Term Puts Attached

Each fund may invest in fixed-rate bonds subject to third-party puts and in
participation interests in such bonds held by a bank in trust or otherwise.
These bonds and participation interests have tender options or demand features
that permit the funds to tender (or put) their bonds to an institution at
periodic intervals and to receive the principal amount thereof.

The advisor expects that the funds will pay more for securities with puts
attached than for securities without these liquidity features. The advisor may
buy securities with puts attached to keep a fund fully invested in municipal
securities while maintaining sufficient portfolio liquidity to meet redemption
requests or to facilitate management of the fund's investments.

To ensure that the interest on municipal securities subject to puts is
tax-exempt to the funds, the advisor limits the funds' use of puts in accordance
with applicable interpretations and rulings of the Internal Revenue Service
(IRS).

Because it is difficult to evaluate the likelihood of exercise or the potential
benefit of a put, puts normally will be determined to have a value of zero,
regardless of whether any direct or indirect consideration is paid. Accordingly,
puts as separate securities are not expected to affect the funds' weighted
average maturities. When a fund has paid for a put, the cost will be reflected
as unrealized depreciation on the underlying security for the period the put is
held. Any gain on the sale of the underlying security will be reduced by the
cost of the put.

There is a risk that the seller of a put will not be able to repurchase the
underlying obligation when (or if) a fund attempts to exercise the put. To
minimize such risks, the funds will purchase obligations with puts attached only
from sellers deemed creditworthy by the advisor under the direction of the Board
of Directors.

Tender Option Bonds

Tender option bonds (TOBs) were created to increase the supply of high-quality,
short-term tax-exempt obligations, and thus they are of particular interest to
the money market funds. However, any of the funds may purchase these
instruments.

TOBs are created by municipal bond dealers who purchase long-term tax-exempt
bonds in the secondary market, place the certificates in trusts, and sell
interests in the trusts with puts or other liquidity guarantees attached. The
credit quality of the resulting synthetic short-term instrument is based on the
guarantor's short-term rating and the underlying bond's long-term rating.

There is some risk that a remarketing agent will renege on a tender option
agreement if the underlying bond is downgraded or defaults. Because of this, the
advisor monitors the credit quality of bonds underlying the funds' TOB holdings
and intends to sell or put back any TOB if the rating on its underlying bond
falls below the second-highest rating category designated by a rating agency.

The advisor also takes steps to minimize the risk that the fund may realize
taxable income as a result of holding TOBs. These steps may include
consideration of (a) legal opinions relating to the tax-exempt status of the
underlying municipal bonds, (b) legal opinions relating to the tax ownership of
the underlying bonds, and (c) other elements of the structure that could result
in taxable income or other adverse tax consequences. After purchase, the advisor
monitors factors related to the tax-exempt status of the fund's TOB holdings in
order to minimize the risk of generating taxable income.

When-Issued And Forward Commitment Agreements

The funds may sometimes purchase new issues of securities on a when-issued or
forward commitment basis in which the transaction price and yield are each fixed
at the time the commitment is made, but payment and delivery occur at a future
date (typically 15 to 45 days later).

When purchasing securities on a when-issued or forward commitment basis, a fund
assumes the rights and risks of ownership, including the risks of price and
yield fluctuations. Market rates of interest on debt securities at the time of
delivery may be higher or lower than those contracted for on the when-issued
security. Accordingly, the value of such security may decline prior to delivery,
which could result in a loss to the fund. While the fund will make commitments
to purchase or sell securities with the intention of actually receiving or
delivering them, it may sell the securities before the settlement date if doing
so is deemed advisable as a matter of investment strategy.

In purchasing securities on a when-issued or forward commitment basis, a fund
will establish and maintain until the settlement date a segregated account
consisting of cash, cash equivalents or other appropriate liquid securities in
an amount sufficient to meet the purchase price. When the time comes to pay for
the when-issued securities, the fund will meet its obligations with available
cash, through the sale of securities, or, although it would not normally expect
to do so, by selling the when-issued securities themselves (which may have a
market value greater or less than the fund's payment obligation). Selling
securities to meet when-issued or forward commitment obligations may generate
taxable capital gains or losses.

Inverse Floaters

An inverse floater is a type of derivative security that bears an interest rate
that moves inversely to market interest rates. As market interest rates rise,
the interest rate on inverse floaters goes down, and vice versa. Generally, this
is accomplished by expressing the interest rate on the inverse floater as an
above-market fixed rate of interest, reduced by an amount determined by
reference to a market-based or bond-specific floating interest rate (as well as
by any fees associated with administering the inverse floater program).

Inverse floaters may be issued in conjunction with an equal amount of Dutch
Auction floating-rate bonds (floaters), or a market-based index may be used to
set the interest rate on these securities. A Dutch Auction is an auction system
in which the price of the security is gradually lowered until it meets a
responsive bid and is sold. Floaters and inverse floaters may be brought to
market by a broker-dealer who purchases fixed-rate bonds and places them in a
trust or by an issuer seeking to reduce interest expenses by using a
floater/inverse floater structure in lieu of fixed-rate bonds.

In the case of a broker-dealer structured offering (where underlying fixed-rate
bonds have been placed in a trust), distributions from the underlying bonds are
allocated to floater and inverse floater holders in the following manner:

(i) Floater holders receive interest based on rates set at a six month
interval or at a Dutch Auction, which is typically held every 28 to 35
days. Current and prospective floater holders bid the minimum interest
rate that they are willing to accept on the floaters, and the interest
rate is set just high enough to ensure that all of the floaters are
sold.

(ii) Inverse floater holders receive all of the interest that remains on the
underlying bonds after floater interest and auction fees are paid.

Procedures for determining the interest payment on floaters and inverse floaters
brought to market directly by the issuer are comparable, although the interest
paid on the inverse floaters is based on a presumed coupon rate that would have
been required to bring fixed-rate bonds to market at the time the floaters and
inverse floaters were issued.

Where inverse floaters are issued in conjunction with floaters, inverse floater
holders may be given the right to acquire the underlying security (or to create
a fixed-rate bond) by calling an equal amount of corresponding floaters. The
underlying security may then be held or sold. However, typically, there are time
constraints and other limitations associated with any right to combine interests
and claim the underlying security.

Floater holders subject to a Dutch Auction procedure generally do not have the
right to "put back" their interests to the issuer or to a third party. If a
Dutch Auction fails, the floater holder may be required to hold its position
until the underlying bond matures, during which time interest on the floater is
capped at a predetermined rate.

The secondary market for floaters and inverse floaters may be limited. The
market value of inverse floaters tends to be significantly more volatile than
fixed-rate bonds. The interest rates on inverse floaters may be significantly
reduced, even to zero, if interest rates rise.

Short-Term Securities

In order to meet anticipated redemptions, to hold pending the purchase of
additional securities for a fund's portfolio, or, in some cases, for temporary
defensive purposes, the funds may invest a portion of their assets in money
market and other short-term securities.

Examples of those securities include

* Securities issued or guaranteed by the U.S. government and its agencies and
instrumentalities;

* Commercial Paper;

* Certificates of Deposit and Euro Dollar Certificates of Deposit;

* Bankers' Acceptances;

* Short-term notes, bonds, debentures, or other debt instruments; and

* Repurchase agreements.

Each of the funds may invest up to 5% of its total assets in any other mutual
fund, including those advised by the manager, provided that the investment is
consistent with the fund's investment policies and restrictions. Under the
Investment Company Act of 1940 (the "Investment Company Act"), the fund's
investment in such securities, subject to certain exceptions, currently is
limited to (a) 3% of the total voting stock of any one investment company, (b)
5% of the fund's total assets with respect to any one investment company and (c)
10% of the fund's total assets in the aggregate. Such purchases will be made in
the open market where no commission or profit to a sponsor or dealer results
from the purchase other than the customary brokers' commissions. As a
shareholder of another investment company, a fund would bear, along with other
shareholders, its pro rata portion of the other investment company's expenses,
including advisory fees. These expenses would be in addition to the management
fee that each fund bears directly in connection with its own operations.

Futures And Options

Each fund may enter into futures contracts, options or options on futures
contracts. Funds may not, however, enter into a futures transaction for
speculative purposes. Generally, futures transactions will be used to

* protect against a decline in market value of the funds' securities (taking
a SHORT futures position), or

* protect against the risk of an increase in market value for securities in
which the fund generally invests at a time when the fund is not
fully-invested (taking a LONG futures position), or

* provide a temporary substitute for the purchase of an individual security
that may be purchased in an orderly fashion.

Some futures and options strategies, such as SELLING futures, buying puts and
writing calls, hedge a fund's investments against price fluctuations. Other
strategies, such as BUYING futures, writing puts and buying calls, tend to
increase market exposure.

Although other techniques may be used to control a fund's exposure to market
fluctuations, the use of futures contracts may be a more effective means of
hedging this exposure. While a fund pays brokerage commissions in connection
with opening and closing out futures positions, these costs are lower than the
transaction costs incurred in the purchase and sale of the underlying
securities.

For example, the "sale" of a future by a fund means the fund becomes obligated
to deliver the security (or securities, in the case of an "index" future) at a
specified price on a specified date. The "purchase" of a future means the fund
becomes obligated to buy the security (or securities) at a specified price on a
specified date. Futures contracts provide for the sale by one party and purchase
by another party of a specific security at a specified future time and price.
The funds may engage in futures and options transactions based on securities
indexes that are consistent with the fund's investment objectives. Examples of
indexes that may be used include the Bond Buyer Index of Municipal Bonds, for
fixed income funds, or the S&P 500 Index, for equity funds. The fund also may
engage in futures and options transactions based on specific securities, such as
U.S. Treasury bonds or notes. Futures contracts are traded on national futures
exchanges. Futures exchanges and trading are regulated under the Commodity
Exchange Act by the Commodity Futures Trading Commission (CFTC), a U.S.
government agency.

Index futures contracts differ from traditional futures contracts in that when
delivery takes place, no stocks or bonds change hands. Instead, these contracts
settle in cash at the spot market value of the Index. Although other types of
futures contracts by their terms call for actual delivery or acceptance of the
underlying securities, in most cases the contracts are closed out before the
settlement date. A futures position may be closed by taking an opposite position
in an identical contract (i.e., buying a contract that has previously been sold
or selling a contract that has previously been bought).

Unlike when the fund purchases or sells a bond, no price is paid or received by
the fund upon the purchase or sale of the future. Initially, the fund will be
required to deposit an amount of cash or securities equal to a varying specified
percentage of the contract amount. This amount is known as initial margin. The
margin deposit is intended to assure completion of the contract (delivery or
acceptance of the underlying security) if it is not terminated prior to the
specified delivery date. They do not constitute "margin transactions" for
purposes of the funds' investment restrictions. Minimum initial margin
requirements are established by the futures exchanges and may be revised. In
addition, brokers may establish margin deposit requirements that are higher than
the exchange minimums. Cash held in the margin account is not income producing.
Subsequent payments, called variation margin, to and from the broker, will be
made on a daily basis as the price of the underlying debt securities or index
fluctuates, making the future more or less valuable , a process known as marking
the contract to market. Changes in variation margin are recorded by the fund as
unrealized gains or losses. At any time prior to expiration of the future, the
fund may elect to close the position by taking an opposite position that will
operate to terminate its position in the future. A final determination of
variation margin is then made; additional cash is required to be paid by or
released to the fund and the fund realizes a loss or gain.

Risks Related To Futures And Options Transactions

Futures and options prices can be volatile, and trading in these markets
involves certain risks. If the advisor applies a hedge at an inappropriate time
or judges interest rate or equity market trends incorrectly, futures and options
strategies may lower a fund's return.

A fund could suffer losses if it were unable to close out its position because
of an illiquid secondary market. Futures contracts may be closed out only on an
exchange that provides a secondary market for these contracts, and there is no
assurance that a liquid secondary market will exist for any particular futures
contract at any particular time. Consequently, it may not be possible to close a
futures position when the advisor considers it appropriate or desirable to do
so. In the event of adverse price movements, a fund would be required to
continue making daily cash payments to maintain its required margin. If the fund
had insufficient cash, it might have to sell portfolio securities to meet daily
margin requirements at a time when the advisor would not otherwise elect to do
so. In addition, a fund may be required to deliver or take delivery of
instruments underlying futures contracts it holds. The advisor will seek to
minimize these risks by limiting the contracts entered into on behalf of the
funds to those traded on national futures exchanges and for which there appears
to be a liquid secondary market.

A fund could suffer losses if the prices of its futures and options positions
were poorly correlated with its other investments, or if securities underlying
futures contracts purchased by a fund had different maturities than those of the
portfolio securities being hedged. Such imperfect correlation may give rise to
circumstances in which a fund loses money on a futures contract at the same time
that it experiences a decline in the value of its "hedged" portfolio securities.
A fund also could lose margin payments it has deposited with a margin broker,
if, for example, the broker became bankrupt.

Most futures exchanges limit the amount of fluctuation permitted in futures
contract prices during a single trading day. The daily limit establishes the
maximum amount that the price of a futures contract may vary either up or down
from the previous day's settlement price at the end of the trading session. Once
the daily limit has been reached in a particular type of contract, no trades may
be made on that day at a price beyond the limit. However, the daily limit
governs only price movement during a particular trading day and, therefore, does
not limit potential losses. In addition, the daily limit may prevent liquidation
of unfavorable positions. Futures contract prices have occasionally moved to the
daily limit for several consecutive trading days with little or no trading,
thereby preventing prompt liquidation of futures positions and subjecting some
futures traders to substantial losses.

Options On Futures

By purchasing an option on a futures contract, a fund obtains the right, but not
the obligation, to sell the futures contract (a put option) or to buy the
contract (a call option) at a fixed strike price. A fund can terminate its
position in a put option by allowing it to expire or by exercising the option.
If the option is exercised, the fund completes the sale of the underlying
security at the strike price. Purchasing an option on a futures contract does
not require a fund to make margin payments unless the option is exercised.

Although they do not currently intend to do so, the funds may write (or sell)
call options that obligate it to sell (or deliver) the option's underlying
instrument upon exercise of the option. While the receipt of option premiums
would mitigate the effects of price declines, the funds would give up some
ability to participate in a price increase on the underlying security. If a fund
were to engage in options transactions, it would own the futures contract at the
time a call were written and would keep the contract open until the obligation
to deliver it pursuant to the call expired.

Restrictions On The Use Of Futures Contracts And Options

Each fund may enter into futures contracts, options or options on futures
contracts.

Under the Commodity Exchange Act, a fund may enter into futures and options
transactions (a) for hedging purposes without regard to the percentage of assets
committed to initial margin and option premiums or (b) for other than hedging
purposes, provided that assets committed to initial margin and option premiums
do not exceed 5% of the fund's total assets. To the extent required by law, each
fund will set aside cash and appropriate liquid assets in a segregated account
to cover its obligations related to futures contracts and options.

Restricted And Illiquid Securities

The funds may, from time to time, purchase restricted or illiquid securities,
including Rule 144A securities, when they present attractive investment
opportunities that otherwise meet the funds' criteria for selection. Rule 144A
securities are securities that are privately placed with and traded among
qualified institutional investors rather than the general public. Although Rule
144A securities are considered "restricted securities," they are not necessarily
illiquid.

With respect to securities eligible for resale under Rule 144A, the staff of the
SEC has taken the position that the liquidity of such securities in the
portfolio of a fund offering redeemable securities is a question of fact for the
Board of Directors to determine, such determination to be based upon a
consideration of the readily available trading markets and the review of any
contractual restrictions. Accordingly, the Board of Directors is responsible for
developing and establishing the guidelines and procedures for determining the
liquidity of Rule 144A securities. As allowed by Rule 144A, the Board of
Directors of the funds has delegated the day-to-day function of determining the
liquidity of Rule 144A securities to the advisor. The board retains the
responsibility to monitor the implementation of the guidelines and procedures it
has adopted.

Since the secondary market for such securities is limited to certain qualified
institutional investors, the liquidity of such securities may be limited
accordingly and a fund may, from time to time, hold a Rule 144A or other
security that is illiquid. In such an event, the advisor will consider
appropriate remedies to minimize the effect on such fund's liquidity.

INVESTMENT POLICIES

Unless otherwise indicated, with the exception of the percentage limitations on
borrowing, the restrictions apply at the time transactions are entered into.
Accordingly, any later increase or decrease beyond the specified limitation
resulting from a change in a fund's net assets will not be considered in
determining whether it has complied with its investment restrictions.

Fundamental Investment Policies

The funds' investment restrictions are set forth below. These investment
restrictions are fundamental and may not be changed without approval of a
majority of the outstanding votes of shareholders of a fund, as determined in
accordance with the Investment Company Act.

- ------------------- ------------------------------------------------------------
SUBJECT POLICIES
- ------------------- ------------------------------------------------------------
Senior Securities A fund may not issue senior securities, except as permitted
under the Investment Company Act.

Borrowing A fund may not borrow money, except for temporary or
emergency purposes (not for leveraging or investment) in an
amount not exceeding 33-1/3% of the fund's total assets
(including the amount borrowed) less liabilities (other than
borrowings).

Lending A fund may not lend any security or make any other loan if,
as a result, more than 33-1/3% of the fund's total assets
would be lent to other parties, except, (i) through the
purchase of debt securities in accordance with its
investment objective, policies and limitations or (ii) by
engaging in repurchase agreements with respect to portfolio
securities.

Real Estate A fund may not purchase or sell real estate unless acquired
as a result of ownership of securities or other instruments.
This policy shall not prevent fund from investing in
securities or other instruments backed by real estate or
securities of companies that deal in real estate or are
engaged in the real estate business.

Concentration A fund may not concentrate its investments in securities of
issuers in a particular industry (other than securities
issued or guaranteed by the U.S. government or any of its
agencies or instrumentalities).

Underwriting A fund may not act as an underwriter of securities issued by
others, except to the extent that the fund may be considered
an underwriter within the meaning of the Securities Act of
1933 in the disposition of restricted securities.

Commodities A fund may not purchase or sell physical commodities unless
acquired as a result of ownership of securities or other
instruments; provided that this limitation shall not
prohibit the fund from purchasing or selling options and
futures contracts or from investing in securities or other
instruments backed by physical commodities.

Control A fund may not invest for purposes of exercising control
over management.
- ------------------- ------------------------------------------------------------

For purposes of the investment restriction relating to concentration, a fund
shall not purchase any securities that would cause 25% or more of the value of
the fund's total assets at the time of purchase to be invested in the securities
of one or more issuers conducting their principal business activities in the
same industry, provided that (a) there is no limitation with respect to
obligations issued or guaranteed by the U.S. government, any state, territory or
possession of the United States, the District of Columbia or any of their
authorities, agencies, instrumentalities or political subdivisions and
repurchase agreements secured by such instruments, (b) wholly owned finance
companies will be considered to be in the industries of their parents if their
activities are primarily related to financing the activities of the parents, (c)
utilities will be divided according to their services, for example, gas, gas
transmission, electric and gas, electric and telephone will each be considered a
separate industry, and (d) personal credit and business credit businesses will
be considered separate industries.

Nonfundamental Investment Policies

In addition, the funds are subject to the following additional investment
restrictions that are not fundamental and may be changed by the Board of
Directors.

- ------------------- ------------------------------------------------------------
SUBJECT POLICIES
- ------------------- ------------------------------------------------------------
Diversification A fund may not purchase additional investment securities at
any time during which outstanding borrowings exceed 5% of
the total assets of the fund.

Liquidity A fund may not purchase any security or enter into a
repurchase agreement if, as a result, more than 15% of its
net assets would be invested in repurchase agreements not
entitling the holder to payment of principal and interest
within seven days and in securities that are illiquid by
virtue of legal or contractual restrictions on resale or the
absence of a readily available market.

Short sales A fund may not sell securities short, unless it owns or has
the right to obtain securities equivalent in kind and amount
to the securities sold short, and provided that transactions
in futures contracts and options are not deemed to
constitute selling securities short.

Margin A fund may not purchase securities on margin, except to
obtain such short-term credits as are necessary for the
clearance of transactions, and provided that margin payments
in connection with futures contracts and options on futures
contracts shall not constitute purchasing securities on
margin.
- ------------------- ------------------------------------------------------------

The Investment Company Act imposes certain additional restrictions upon
acquisition by the corporation of securities issued by insurance companies,
broker-dealers, underwriters or investment advisors, and upon transactions with
affiliated persons as therein defined. It also defines and forbids the creation
of cross and circular ownership. Neither the Securities and Exchange Commission
nor any other agency of the federal or state agency participates in or
supervises the management of the funds or their investment practices or
policies.

The Investment Company Act also provides that the funds may not invest more than
25% of their assets in the securities of issuers engaged in a single industry.
In determining industry groups for purposes of this restriction, the SEC
ordinarily uses the Standard Industry Classification codes developed by the
United States Office of Management and Budget. In the interest of ensuring
adequate diversification, the funds monitor industry concentration using a more
restrictive list of industry groups than that recommended by the SEC. The funds
believe that these classifications are reasonable and are not so broad that the
primary economic characteristics of the companies in a single class are
materially different. The use of these restrictive industry classifications may,
however, cause the funds to forego investment possibilities that may otherwise
be available to them under the Investment Company Act.

PORTFOLIO TURNOVER

The portfolio turnover rates of the funds are shown in the Financial Highlights
tables in the Prospectuses.

VP Income & Growth

The fund managers will consider the length of time a security has been held in
determining whether to sell it. Accordingly, VP Income & Growth's rate of
portfolio turnover is not expected to exceed 150%.

Other Funds

With respect to each other fund, the fund managers will purchase and sell
securities without regard to the length of time the security has been held.
Accordingly, the fund's rate of portfolio turnover may be substantial.

The funds intend to purchase a given security whenever the fund managers believe
it will contribute to the stated objective of the fund. In order to achieve each
fund's investment objective, the fund managers will sell a given security, no
matter for how long or for how short a period it has been held in the portfolio,
and no matter whether the sale is at a gain or at a loss, if the fund managers
believe that the security is not fulfilling its purpose, either because, among
other things, it did not live up to the manager's expectations, or because it
may be replaced with another security holding greater promise, or because it has
reached its optimum potential, or because of a change in the circumstances of a
particular company or industry or in general economic conditions, or because of
some combination of such reasons.

When a general decline in security prices is anticipated, the equity funds may
decrease or eliminate entirely their equity positions and increase their cash
positions, and when a rise in price levels is anticipated, the equity funds may
increase their equity positions and increase their cash positions. However, it
should be expected that VP Capital Appreciation, VP International, VP Value and
the equity portions of VP Advantage and VP Balanced will, under most
circumstances, be essentially fully invested in equity securities.

Because investment decisions are based on the anticipated contribution of the
security in question to the fund's objectives, the advisor believes that the
rate of portfolio turnover is irrelevant when it believes a change is in order
to achieve those objectives. As a result, the fund's annual portfolio turnover
rate cannot be anticipated and may be higher than other mutual funds with
similar investment objectives. Higher turnover would generate correspondingly
greater brokerage commissions, which is a cost the funds pay directly. Portfolio
turnover may also affect the character of capital gains realized and distributed
by the fund, if any, since short-term capital gains are taxable as ordinary
income. This disclosure regarding portfolio turnover is a statement of
fundamental policy and may be changed only by a vote of the shareholders.

Because the fund managers do not take portfolio turnover rate into account in
making investment decisions, (1) the managers have no intention of accomplishing
any particular rate of portfolio turnover, whether high or low, and (2) the
portfolio turnover rates in the past should not be considered as a
representation of the rates that will be attained in the future.

MANAGEMENT

THE BOARD OF DIRECTORS

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

The individuals listed in the table below whose names are marked by an asterisk
(*) are interested persons of the funds (as defined in the Investment Company
Act) by virtue of, among other considerations, their affiliation with either the
advisor, American Century Investment Management, Inc. (ACIM); the funds' agent
for transfer and administrative services, American Century Services Corporation
(ACSC); the parent corporation of ACIM and ACSC, American Century Companies,
Inc. (ACC) or ACC's subsidiaries; the funds' distribution agent and
co-administrator, Funds Distributor, Inc. (FDI); the funds or other funds
advised by the advisor. Each director listed below serves as a director of six
registered investment companies in the American Century family of funds, which
are also advised by the advisor. The address at which each director listed below
may be contacted is 4500 Main Street, Kansas City, Missouri 64111.

<TABLE>
- -------------------------------------- ------------------------- -----------------------------------------------------------
NAME (AGE) POSITION(S) HELD WITH PRINCIPAL OCCUPATION(S)
ADDRESS FUND DURING PAST 5 YEARS
- -------------------------------------- ------------------------- -----------------------------------------------------------
<S> <C> <C>
James E. Stowers, Jr.* (74) Director, Chairman of Chairman, Director and controlling shareholder, ACC,
the Board Chairman and Director, ACIM and ACIS

James E. Stowers III* (39) Director Director and Chief Executive Officer, ACC, ACIM and ACIS

Thomas A. Brown (58) Director Director of Plains States Development, Applied Industrial
Technologies, Inc., a corporation engaged in the sale of
bearings and power transmission products

Robert W. Doering, M.D. (65) Director Retired, formerly a general surgeon

Andrea C. Hall, Ph.D. (54) Director Senior Vice President and Associate Director, Midwest
Research Institute

D.D. (Del) Hock (63) Director Retired, formerly Chairman, Public Service Company of
Colorado; Director, Service Tech, Inc., Hathaway
Corporation, and J.D. Edwards & Company

Donald H. Pratt (60) Director, Vice Chairman President and Director, Butler Manufacturing Company
of the Board

Lloyd T. Silver, Jr. (70) Director President, LSC, Inc., manufacturer's representative

M. Jeannine Strandjord (52) Director Senior Vice President, Finance, Sprint Corporation;
Director, DST Systems, Inc.
- -------------------------------------- ------------------------- -----------------------------------------------------------

Committees

The Board has four standing committees to oversee specific functions of the
funds' operations. Other than the Nominating Committee, only independent
directors serve on these committees. Information about these committees appears
in the table below.
The Director first named acts as chairman of the committee.

- ------------------- ----------------------------- ---------------------------------------------------------------------
COMMITTEE MEMBERS FUNCTION OF COMMITTEE
- ------------------- ----------------------------- ---------------------------------------------------------------------
Executive James E. Stowers III The Executive Committee performs the functions of the Board of
Donald H. Pratt Directors between Board meetings, subject to the limitations on its
power set out in the Maryland General Corporation Law, and except
for matters required by the Investment Company Act to be acted upon
by the whole Board.
- ------------------- ----------------------------- ---------------------------------------------------------------------
Compliance Donald H. Pratt The Compliance Committee reviews the results of the funds'
Lloyd T. Silver, Jr. compliance testing program, reviews quarterly reports from the
Andrea C. Hall, Ph.D. advisor to the Board regarding various compliance matters and
monitors the implementation of the funds' Code of Ethics, including
any violations thereof.
- ------------------- ----------------------------- ---------------------------------------------------------------------
Audit M. Jeannine Strandjord The Audit Committee recommends the engagement of the funds'
Robert W. Doering, M.D. independent auditor and oversees its activities. The Committee
D.D. (Del) Hock receives reports from the advisor's Internal Audit Department,
which is accountable solely to the Committee. The Committee
also receives reporting about compliance matters affecting the funds.
- ------------------- ----------------------------- ---------------------------------------------------------------------
Nominating Donald H. Pratt The Nominating Committee primarily considers and recommends
D.D. (Del) Hock individuals for nomination as directors. The names of potential
James E. Stowers III director candidates are drawn from a number of sources, including
recommendations from members of the Board, management and shareholders.
This committee also reviews and makes recommendations to the Board
with respect to the composition of Board committees and other
Board-related matters, including its organization, size, composition,
responsibilities, functions and compensation.
- ------------------- ----------------------------- ---------------------------------------------------------------------
</TABLE>

Compensation Of Directors

The directors also serve as directors for five American Century investment
companies other than American CenturyVariable Portfolios, Inc. Each director who
is not an "interested person" as defined in the Investment Company Act receives
compensation for service as a member of the Board of all six such companies
based on a schedule that takes into account the number of meetings held and the
assets of the funds for which the meetings are held. These fees and expenses are
divided among the six investment companies based, in part, upon their relative
net assets. Under the terms of the management agreement with the advisor, the
funds are responsible for paying such fees and expenses.

The table presented shows the aggregate compensation paid by the corporation for
the periods indicated and by the American Century family of funds as a whole to
each trustee who is not an "interested person" as defined in the Investment
Company Act.

Aggregate Director Compensation for Fiscal Year Ended December 31, 1998
- --------------------------- -------------------------- -------------------------
Total Compensation From
The
Total Compensation From American Century Family
Name Of Director1 the Funds2 Of Funds3
- --------------------------- -------------------------- -------------------------
James E. Stowers, Jr. [INFORMATION NOT YET AVAILABLE]
James E. Stowers III
Thomas A. Brown
Robert W. Doering, M.D.
Andrea C. Hall, Ph.D.
D.D. (Del) Hock
Donald H. Pratt
Lloyd T. Silver, Jr.
M. Jeannine Strandjord
- --------------------------- -------------------------- -------------------------

1 Interested directors receive no compensation for their services as such.

2 Includes compensation paid to the directors during the fiscal year ended
December 31, 1998, and also includes amounts deferred at the election of
the directors under the American Century Mutual Funds Deferred Compensation
Plan for Non-Interested Directors and Trustees. The total amount of
deferred compensation included in the preceding table is as follows:
[INFORMATION NOT YET AVAILABLE].

3 Includes compensation paid by the 13 investment company members of the
American Century family of funds.

The funds have adopted the American Century Deferred Compensation Plan for
Non-Interested Directors and Trustees. Under the plan, the independent directors
may defer receipt of all or any part of the fees to be paid to them for serving
as directors of the funds.

Under the plan, all deferred fees are credited to an account established in the
name of the directors. The amounts credited to the account then increase or
decrease, as the case may be, in accordance with the performance of one or more
of the American Century funds that are selected by the director. The account
balance continues to fluctuate in accordance with the performance of the
selected fund or funds until final payment of all amounts credited to the
account. Directors are allowed to change their designation of mutual funds from
time to time.

No deferred fees are payable until such time as a director resigns, retires or
otherwise ceases to be a member of the Board of Directors. Directors may receive
deferred fee account balances either in a lump sum payment or in substantially
equal installment payments to be made over a period not to exceed 10 years. Upon
the death of a director, all remaining deferred fee account balances are paid to
the director's beneficiary or, if none, to the director's estate.

The plan is an unfunded plan and, accordingly, the funds have no obligation to
segregate assets to secure or fund the deferred fees. The rights of directors to
receive their deferred fee account balances are the same as the rights of a
general unsecured creditor of the funds. The plan may be terminated at any time
by the administrative committee of the plan. If terminated, all deferred fee
account balances will be paid in a lump sum. [No deferred fees were paid to any
director under the plan during the fiscal year ended December 31, 1998]

OFFICERS

Background for the officers of the funds is provided below. All persons named as
officers of the funds also serve in similar capacities for the 12 other
investment companies advised by American Century. Not all officers of the funds
are listed; only those officers with policy-making functions are listed. No
officer is compensated for his or her service as an officer of the funds. The
individuals listed in the table below are interested persons of the funds (as
defined in the Investment Company Act) by virtue of, among other considerations,
their affiliation with either the funds, ACIM, ACSC, FDI, ACC or ACC's
subsidiaries as specified in the following table. The address at which each
officer may be contacted is 4500 Main Street, Kansas City, Missouri 64111.

<TABLE>
- -------------------------------------- ---------------- ----------------------------------------------------------------
POSITION(S)
NAME (AGE) HELD WITH FUND PRINCIPAL OCCUPATION(S)
ADDRESS DURING PAST 5 YEARS
- -------------------------------------- ---------------- ----------------------------------------------------------------
<S> <C> <C>
George A. Rio (44) President Executive Vice President and Director of Client Services, FDI
(March 1998 to present)
Senior Vice President and Senior Key Account Manager, Putnam
Mutual Funds (June 1995 to March 1998)
Director Business Development, First Data Corporation (May
1994 to June 1995)
Senior Vice President and Manager of Client Services and
Director of Internal Audit, The Boston Company, Inc.
(September 1983 to May 1994)

Christopher J. Kelley (34) Vice President Vice President and Associate General Counsel of FDI (since
July 1996)
Assistant Counsel. Forum Financial Group (April 1994 to July
1996)
Compliance Officer for Putnam Investments (1992 to April 1994).

Mary A. Nelson (34) Vice President Vice President and Manager of Treasury Services and
Administration, FDI (1994 to present)
Assistant Vice President and Client Manager for The Boston
Company, Inc. (1989 to 1994).

Maryanne Roepke, CPA (43) Vice President Senior Vice President, Treasurer and Principal Accounting
and Treasurer Officer, ACSC

David C. Tucker (40) Vice President Senior Vice President and General Counsel, ACSC and ACIM (June
and Treasurer 1998 to present)
General Counsel, ACC (June 1998 to present)
Consultant (May 1997 to April 1998)
Vice President and General Counsel, Janus Companies (1990 to
May 1997)

Paul J. Carrigan, Jr. (49) Secretary Secretary, ACC (December 1998 to present)
Director of Legal Operations, ACSC (February 1996 to present)
Board Communications Manager, The Benham Company (April 1994
to January 1996)
Legal Coordinator, State of California Health & Welfare Agency
(February 1992 to March 1994)

Merele A. May (36) Controller Vice President, ACSC
Controller-Fund Accounting

Robert J. Leach (32) Controller Controller-Fund Accounting, ACSC

C. Jean Wade (35) Controller Controller-Fund Accounting, ACSC

Jon Zindel (32) Tax Officer Director of Taxation, ACSC (since 1996)
Tax Manager, Price Waterhouse LLPC (1989)
- -------------------------------------- ---------------- ----------------------------------------------------------------
</TABLE>

THE FUNDS' PRINCIPAL SHAREHOLDERS

As of April 1, 1999, the following companies were the record owners of more than
5% of a fund's outstanding shares:

NAME OF FUND SHAREHOLDER AND PERCENTAGE

VP Capital Appreciation Nationwide Life Insurance Company
Columbus, Ohio - ____%

Penn Mutual Life Insurance
Philadelphia, Pennsylvania - ____%

Mutual of America
New York, New York - ____%

Great-West Life and Annuity Company
Englewood, Colorado - ____%

VP Advantage Nationwide Life Insurance Company
Columbus, Ohio - ____%

VP Balanced Nationwide Life Insurance Company
Columbus, Ohio - ____%

Lincoln National Life Insurance Company
Ft. Wayne, Indiana - ____%

VP International Nationwide Life Insurance Company
Columbus, Ohio - ____%

VP Value IDS Life Insurance company
Minneapolis, Minnesota - ____%

Nationwide Life Insurance Company
Columbus, Ohio - ____%

The funds are unaware of any other shareholders, beneficial or of record, who
own more than 5% of a fund's outstanding shares. As of April 1, 1999, the
officers and directors of the funds, as a group, own less than 1% of any fund's
outstanding shares.

SERVICE PROVIDERS

The funds have no employees. To conduct the funds' day-to-day activities, the
funds have hired a number of service providers. Each service provider has a
specific function to fill on behalf of the funds and is described below.

The advisor and ACSC are both wholly owned by ACC. James E. Stowers Jr.,
Chairman of ACC, controls ACC by virtue of his ownership of a majority of its
common stock.

*INVESTMENT ADVISOR

Each fund has an investment management agreement with the advisor, American
Century Investment Management, Inc., dated November 16, 1998. This agreement was
approved by the shareholders of each of the funds on November 16, 1998.

A description of the responsibilities of the advisor appears in the Prospectus
under the heading "Management."

For the services provided to the funds, the advisor receives a monthly fee based
on a percentage of the average net assets of each fund as follows:

VP Capital Appreciation 1.00% on first $500 million
0.95% on next $500 million
0.90% thereafter

VP International 1.50% on first $250 million
1.20% on next $250 million
1.10% thereafter

VP Value 1.00% on first $500 million
0.95% on next $500 million
0.90% thereafter

VP Balanced 0.90% on first $250 million
0.85% on next $250 million
0.80% thereafter

VP Income & Growth 0.70%

VP Advantage 1.00%

On the first business day of each month, the funds pay a management fee to the
advisor for the previous month at the specified rate. The fee for the previous
month is calculated by multiplying the applicable fee for the fund by the
aggregate average daily closing value of a fund's net assets during the previous
month, and further multiplying that product by a fraction, the numerator of
which is the number of days in the previous month and the denominator of which
is 365 (366 in leap years).

The management agreement shall continue in effect until the earlier of the
expiration of two years from the date of its execution or until the first
meeting of shareholders following such execution and for as long thereafter as
its continuance is specifically approved at least annually by (1) the funds'
Board of Directors, or by the vote of a majority of outstanding votes (as
defined in the Investment Company Act) and (2) by the vote of a majority of the
directors of the funds who are not parties to the agreement or interested
persons of the advisor, cast in person at a meeting called for the purpose of
voting on such approval.

The management agreement provides that it may be terminated at any time without
payment of any penalty by the funds' Board of Directors, or by a vote of a
majority of outstanding votes, on 60 days' written notice to the advisor, and
that it shall be automatically terminated if it is assigned.

The management agreement provides that the advisor shall not be liable to the
funds or its shareholders for anything other than willful misfeasance, bad
faith, gross negligence or reckless disregard of its obligations and duties.

The management agreement also provides that the advisor and its officers,
directors and employees may engage in other business, devote time and attention
to any other business whether of a similar or dissimilar nature, and render
services to others.

Certain investments may be appropriate for the funds and also for other clients
advised by the advisor. Investment decisions for the funds and other clients are
made with a view to achieving their respective investment objectives after
consideration of such factors as their current holdings, availability of cash
for investment and the size of their investment generally. A particular security
may be bought or sold for only one client or fund, or in different amounts and
at different times for more than one but less than all clients or fund. In
addition, purchases or sales of the same security may be made for two or more
clients or fund on the same date. Such transactions will be allocated among
clients in a manner believed by the advisor to be equitable to each. In some
cases this procedure could have an adverse effect on the price or amount of the
securities purchased or sold by a fund.

The advisor may aggregate purchase and sale orders of the funds with purchase
and sale orders of its other clients when the advisor believes that such
aggregation provides the best execution for the funds. The funds' Board of
Directors has approved the policy of the advisor with respect to the aggregation
of portfolio transactions. Where portfolio transactions have been aggregated,
the funds participate at the average share price for all transactions in that
security on a given day and share transaction costs on a pro rata basis. The
advisor will not aggregate portfolio transactions of the funds unless it
believes such aggregation is consistent with its duty to seek best execution on
behalf of the funds and the terms of the management agreement. The advisor
receives no additional compensation or remuneration as a result of such
aggregation.

Investment management fees paid by each fund for the fiscal periods ended
December 31, 1998, 1997 and 1996, are indicated in the following table.

UNIFIED MANAGEMENT FEES
- --------------------------- -------------- ------------------ ------------------
FUND 1998 1997 1996
- --------------------------- -------------- ------------------ ------------------
VP Advantage $249,359 $238,392
VP Balanced $2,346,313 $1,832,133
VP Capital Appreciation DATA $10,378,643 $14,401,981
VP Income & Growth NOT $1,290 ----
VP International YET $2,659,954 $1,170,843
VP Value AVAILABLE $985,657 $62,187
- --------------------------- -------------- ------------------ ------------------

Other Advisory Relationships

In addition to managing the funds, the advisor also acts as an investment
advisor to 12 institutional accounts and to the following registered investment
companies:

American Century World Mutual Funds, Inc.
American Century Premium Reserves, Inc.
American Century Mutual Funds, Inc.
American Century Capital Portfolios, Inc.
American Century Strategic Asset Allocations, Inc.
American Century Municipal Trust
American Century Government Income Trust
American Century Investment Trust
American Century Target Maturities Trust
American Century Quantitative Equity Funds
American Century International Bond Funds.
American Century California Tax-Free and Municipal Funds

DISTRIBUTOR

The funds' shares are distributed by Funds Distributor, Inc., a registered
broker-dealer. The distributor is a wholly owned indirect subsidiary of Boston
Institutional Group, Inc. The distributor's principal business address is 60
State Street, Suite 1300, Boston, Massachusetts 02109.

The distributor is the principal underwriter of the funds' shares. The
distributor makes a continuous, best efforts underwriting of the funds' shares.
This means that the distributor has no liability for unsold shares.

TRANSFER AGENT AND ADMINISTRATOR

American Century Services Corporation, 4500 Main Street, Kansas City, Missouri
64111, acts as transfer agent and dividend-paying agent for the funds. It
provides physical facilities, computer hardware and software and personnel, for
the day-to-day administration of the funds and of the advisor. The advisor pays
American Century Services Corporation for such services.

From time to time, special services may be offered to shareholders who maintain
higher share balances in our family of funds. These services may include the
waiver of minimum investment requirements, expedited confirmation of shareholder
transactions, newsletters and a team of personal representatives. Any expenses
associated with these special services will be paid by the advisor.

Pursuant to a Sub-Administration Agreement with the advisor, Funds Distributor,
Inc. (FDI) serves as the Co-Administrator for the fund. FDI is responsible for
(i) providing certain officers of the fund and (ii) reviewing and filing
marketing and sales literature on behalf of the fund. The fees and expenses of
FDI are paid by the advisor out of its unified fee.

OTHER SERVICE PROVIDERS

CUSTODIAN BANKS

Chase Manhattan Bank, 770 Broadway, 10th Floor, New York, New York 10003-9598,
and Commerce Bank, N.A., 1000 Walnut, Kansas City, Missouri 64105, each serves
as custodian of the assets of the funds, except for VP Internaitonal, for which
UMB Bank, N.A., 10th and Grand, Kansas City, Missouri 64105, serves as
custodian. The custodians take no part in determining the investment policies of
the funds or in deciding which securities are purchased or sold by the funds.
The funds, however, may invest in certain obligations of the custodians and may
purchase or sell certain securities from or to the custodians.

INDEPENDENT AUDITORS

Deloitte & Touche LLP is the independent auditor of the funds. The address of
Deloitte & Touche LLP is 1010 Grand Avenue, Kansas City, Missouri 64106. As the
independent auditor of the funds, Deloitte & Touche provides services including
(1) audit of the annual financial statements, (2) assistance and consultation in
connection with SEC filings and (3) review of the annual federal income tax
return filed for each fund.

BROKERAGE ALLOCATION

VP CAPITAL APPRECIATION, VP INCOME & GROWTH, VP INTERNATIONAL, VP VALUE AND THE
EQUITY PORTIONS OF VP ADVANTAGE AND VP BALANCED

Under the management agreement between the funds and the advisor, the advisor
has the responsibility of selecting brokers to execute portfolio transactions.
The funds' policy is to secure the most favorable prices and execution of orders
on its portfolio transactions. So long as that policy is met, the advisor may
take into consideration the factors discussed below when selecting brokers.

The advisor receives statistical and other information and services, including
research, without cost from brokers and dealers. The advisor evaluates such
information and services, together with all other information that it may have,
in supervising and managing the investments of the funds. Because such
information and services may vary in amount, quality and reliability, their
influence in selecting brokers varies from none to very substantial. The advisor
proposes to continue to place some of the funds' brokerage business with one or
more brokers who provide information and services. Such information and services
will be in addition to and not in lieu of services required to be performed by
the advisor. The advisor does not utilize brokers that provide such information
and services for the purpose of reducing the expense of providing required
services to the funds.

In the years ended December 31, 1998, 1997 and 1996, the brokerage commissions
of each fund were as follows:

- ------------------------- ---------------- ----------------- -----------------
FUND 1998 1997 1996
- ------------------------- ---------------- ----------------- -----------------
VP Advantage $20,302 $19,734
VP Balanced $294,313 $235,149
VP Capital Appreciation DATA $1,573,432 $3,879,230
VP Income & Growth NOT ---- ----
VP International YET $1,329,778 $630,547
VP Value AVAILABLE $466,557 $25,821

The brokerage commissions paid by the funds may exceed those which another
broker might have charged for effecting the same transactions, because of the
value of the brokerage and research services provided by the broker. Research
services furnished by brokers through whom the funds effect securities
transactions may be used by the manager in servicing all of its accounts, and
not all such services may be used by the advisor in managing the portfolios of
the funds.

The staff of the SEC has expressed the view that the best price and execution of
over-the-counter transactions in portfolio securities may be secured by dealing
directly with principal market makers, thereby avoiding the payment of
compensation to another broker. In certain situations, the officers of the funds
and the advisor believe that the facilities, expert personnel and technological
systems of a broker often enable the funds to secure as good a net price by
dealing with a broker instead of a principal market maker, even after payment of
the compensation to the broker. The funds regularly place its over-the-counter
transactions with principal market makers, but may also deal on a brokerage
basis when utilizing electronic trading networks or as circumstances warrant.

THE FIXED-INCOME PORTIONS OF VP ADVANTAGE AND VP BALANCED

Under the management agreement between the funds and the advisor, the advisor
has the responsibility of selecting brokers and dealers to execute portfolio
transactions. In many transactions, the selection of the broker or dealer is
determined by the availability of the desired security and its offering price.
In other transactions, the selection of broker or dealer is a function of the
selection of market and the negotiation of price, as well as the broker's
general execution and operational and financial capabilities in the type of
transaction involved. The advisor will seek to obtain prompt execution of orders
at the most favorable prices or yields. The advisor may choose to purchase and
sell portfolio securities to and from dealers who provide services or research,
statistical and other information to the funds and to the advisor. Such
information or services will be in addition to and not in lieu of the services
required to be performed by the advisor, and the expenses of the advisor will
not necessarily be reduced as a result of the receipt of such supplemental
information.

INFORMATION ABOUT FUND SHARES

Each of the 6 funds named on the front of this Statement of Additional
Information is a series of shares issued by the registrant, ACVP. Additional
funds may be added without a shareholder vote.

Each fund votes separately on matters affecting that fund exclusively. Voting
rights are not cumulative, so that investors holding more than 50% of ACVP's
(i.e., all funds') outstanding shares may be able to elect a Board of Directors.
ACVP instituted dollar-based voting, meaning that the number of votes you are
entitled to is based upon the dollar amount of your investment. The election of
directors is determined by the votes received from all ACVP shareholders without
regard to whether a majority of shares of any one fund voted in favor of a
particular nominee or all nominees as a group.

The assets belonging to each series or class of shares are held separately by
the custodian and the shares of each series or class represent a beneficial
interest in the principal, earnings and profit (or losses) of investment and
other assets held for each series or class. Your rights as a shareholder are the
same for all series or class of securities unless otherwise stated. Within their
respective series or class, all shares have equal redemption rights. Each share,
when issued, is fully paid and non-assessable.

In the event of complete liquidation or dissolution of the funds, shareholders
of each series or class of shares shall be entitled to receive, pro rata, all of
the assets less the liabilities of that series or class.

Each shareholder has rights to dividends and distributions declared by the fund
he or she owns and to the net assets of such fund upon its liquidation or
dissolution proportionate to his or her share ownership interest in the fund.
Shares of each fund have equal voting rights, although each fund votes
separately on matters affecting that fund exclusively.

VALUATION OF A FUND'S SECURITIES

Each fund's net asset value per share (NAV), is calculated as of the close of
business of the New York Stock Exchange (the Exchange), usually at 3 p.m.
Central time each day the Exchange is open for business. The Exchange has
designated the following holiday closings for 1999: New Year's Day, Martin
Luther King Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving Day and Christmas Day. Although the funds expect
the same holiday schedule to be observed in the future, the Exchange may modify
its holiday schedule at any time.

The advisor typically completes its trading on behalf of each fund in various
markets before the Exchange closes for the day. Each fund's NAV is calculated by
adding the value of all portfolio securities and other assets, deducting
liabilities and dividing the result by the number of shares outstanding.
Expenses and interest earned on portfolio securities are accrued daily.

The portfolio securities of the fund, except as otherwise noted, listed or
traded on a domestic securities exchange are valued at the last sale price on
that exchange. Portfolio securities primarily traded on foreign securities
exchanges are generally valued at the preceding closing values of such
securities on the exchange where primarily traded. If no sale is reported, or if
local convention or regulation so provides, the mean of the latest bid and asked
prices is used. Depending on local convention or regulation, securities traded
over-the-counter are priced at the mean of the latest bid and asked prices, or
at the last sale price. When market quotations are not readily available,
securities and other assets are valued at fair value as determined in accordance
with procedures adopted by the Board of Directors.

Debt securities not traded on a principal securities exchange are valued through
valuations obtained from a commercial pricing service or at the most recent mean
of the bid and asked prices provided by investment dealers in accordance with
procedures established by the Board of Directors.

Because there are hundreds of thousands of municipal issues outstanding, and the
majority of them do not trade daily, the prices provided by pricing services for
these types of securities are generally determined without regard to bid or last
sale prices. In valuing securities, the pricing services generally take into
account institutional trading activity, trading in similar groups of securities,
and any developments related to specific securities. The methods used by the
pricing service and the valuations so established are reviewed by the advisor
under the general supervision of the Board of Directors. There are a number of
pricing services available, and the advisor, on the basis of ongoing evaluation
of these services, may use other pricing services or discontinue the use of any
pricing service in whole or in part.

Securities maturing within 60 days of the valuation date may be valued at cost,
plus or minus any amortized discount or premium, unless the trustees determine
that this would not result in fair valuation of a given security. Other assets
and securities for which quotations are not readily available are valued in good
faith at their fair value using methods approved by the Board of Directors.

The value of an exchange-traded foreign security is determined in its national
currency as of the close of trading on the foreign exchange on which it is
traded or as of the close of business on the New York Stock Exchange, if that is
earlier. That value is then exchanged to dollars at the prevailing foreign
exchange rate.

Trading in securities on European and Far Eastern securities exchanges and
over-the-counter markets is normally completed at various times before the close
of business on each day that the New York Stock Exchange is open. If an event
were to occur after the value of a security was established but before the net
asset value per share was determined that was likely to materially change the
net asset value, then that security would be valued at fair value as determined
in accordance with procedures adopted by the Board of Directors.

Trading of these securities in foreign markets may not take place on every New
York Stock Exchange business day. In addition, trading may take place in various
foreign markets on Saturdays or on other days when the New York Stock Exchange
is not open and on which the fund's net asset value is not calculated.
Therefore, such calculation does not take place contemporaneously with the
determination of the prices of many of the portfolio securities used in such
calculation and the value of the fund's portfolio may be affected on days when
shares of the fund may not be purchased or redeemed.

TAXES

FEDERAL INCOME TAXES

Each fund intends to qualify annually as a "regulated investment company" under
Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"). By
so qualifying, a fund will be exempt from federal income taxes to the extent
that it distributes substantially all of its net investment income and net
realized capital gains (if any) to shareholders. If a fund fails to qualify as a
regulated investment company, it will be liable for taxes, significantly
reducing its distributions to shareholders and eliminating shareholders' ability
to treat distributions of the funds in the manner they were realized by the
funds.

Dividends and interest received by a fund on foreign securities may give rise to
withholding and other taxes imposed by foreign countries. Tax conventions
between certain countries and the United States may reduce or eliminate such
taxes. Foreign countries generally do not impose taxes on capital gains in
respect of investments by non-resident investors. The foreign taxes paid by a
fund will reduce its dividends.

If more than 50% of the value of a fund's total assets at the end of each
quarter of its fiscal year consists of securities of foreign corporations, the
fund may qualify for and make an election with the Internal Revenue Service with
respect to such fiscal year so that fund shareholders may be able to claim a
foreign tax credit in lieu of a deduction for foreign income taxes paid by the
fund. If such an election is made, the foreign taxes paid by the fund will be
treated as income received by you. In order for the shareholder to utilize the
foreign tax credit, the mutual fund shares must have been held for 16 days or
more during the 30-day period, beginning 15 days prior to the ex-dividend date
for the mutual fund shares. The mutual fund must meet a similar holding period
requirement with respect to foreign securities to which a dividend is
attributable. Any portion of the foreign tax credit which is ineligible as a
result of the fund not meeting the holding period requirement will be separately
disclosed and may be eligible as an itemized deduction.

If a fund purchases the securities of certain foreign investment funds or trusts
called passive foreign investment companies (PFIC), capital gains on the sale of
such holdings will be deemed to be ordinary income regardless of how long the
fund holds its investment. The fund may also be subject to corporate income tax
and an interest charge on certain dividends and capital gains earned from these
investments, regardless of whether such income and gains are distributed to
shareholders. In the alternative, the fund may elect to recognize cumulative
gains on such investments as of the last day of its fiscal year and distribute
it to shareholders. Any distribution attributable to a PFIC is characterized as
ordinary income.

HOW FUND PERFORMANCE INFORMATION IS CALCULATED

The funds may quote performance in various ways. Fund performance may be shown
by presenting one or more performance measurements, including cumulative total
return, average annual total return or yield.

All performance information advertised by the funds is historical in nature and
is not intended to represent or guarantee future results. The value of fund
shares when redeemed may be more or less than their original cost.

THE EQUITY PORTION OF ALL FUNDS

Total returns quoted in advertising and sales literature reflect all aspects of
a fund's return, including the effect of reinvesting dividends and capital gain
distributions (if any) and any change in the fund's NAV during the period.

Average annual total returns are calculated by determining the growth or decline
in value of a hypothetical historical investment in a fund during a stated
period and then calculating the annually compounded percentage rate that would
have produced the same result if the rate of growth or decline in value had been
constant throughout the period. For example, a cumulative total return of 100%
over 10 years would produce an average annual return of 7.18%, which is the
steady annual rate that would equal 100% growth on a compounded basis in 10
years. While average annual total returns are a convenient means of comparing
investment alternatives, investors should realize that the funds' performance is
not constant over time, but changes from year-to-year, and that average annual
total returns represent averaged figures as opposed to actual year-to-year
performance.

The following tables set forth the average annual total return of the funds for
the periods indicated as of December 31, 1998.

<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
- --------------------------- ---------------- ---------------- ---------------- ----------------
FUND 1 YEAR 5 YEARS 10 YEARS LIFE OF FUND1
- --------------------------- ---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
VP Advantage 17.19% 11.25% N/A 9.75%
VP Balanced 15.77% 12.89% N/A 11.65%
VP Capital Appreciation -2.16% 3.25% 8.70% 8.25%
VP Income & Growth 26.87% N/A N/A 30.68%
VP International 18.76% N/A N/A 12.30%
VP Value 4.81% N/A N/A 15.94%
</TABLE>
(1) The inception dates are: VP Advantage: August 1, 1991; VP Balanced: May 1,
1991; VP Capital Appreciation: November 20, 1987; VP Income & Growth:
October 30, 1997; VP International: May 1, 1994; VP Value: May 1, 1996

In addition to average annual total returns, each fund may quote unaveraged or
cumulative total returns reflecting the simple change in value of an investment
over a stated period, including periods other than one, five and 10 years.
Average annual and cumulative total returns may be quoted as percentages or as
dollar amounts and may be calculated for a single investment, a series of
investments, or a series of redemptions over any time period. Total returns may
be broken down into their components of income and capital (including capital
gains and changes in share price) to illustrate the relationship of these
factors and their contributions to total return.

THE FIXED INCOME PORTIONS OF VP ADVANTAGE AND VP BALANCED; VP INCOME & GROWTH
AND VALUE

Yield is calculated by adding over a 30-day (or one-month) period all interest
and dividend income (net of fund expenses) calculated on each day's market
values, dividing this sum by the average number of fund shares outstanding
during the period, and expressing the result as a percentage of the fund's share
price on the last day of the 30-day (or one-month) period. The percentage is
then annualized. Capital gains and losses are not included in the calculation.

The following table sets forth yield quotations for the fixed income portions of
VP Advantage and VP Balanced, and for VP Income & Growth and VP Value, for the
30-day period ended December 31, 1998, the last day of the fiscal year pursuant
to computation methods prescribed by the SEC.

- ----------------------------------------- --------------------
FUND 30-DAY YIELD
- ----------------------------------------- --------------------
- ----------------------------------------- --------------------
VP Advantage 2.15%
- ----------------------------------------- --------------------
- ----------------------------------------- --------------------
VP Balanced 2.25%
- ----------------------------------------- --------------------
- ----------------------------------------- --------------------
VP Income & Growth
- ----------------------------------------- --------------------
- ----------------------------------------- --------------------
VP Value
- ----------------------------------------- --------------------

The fixed income funds may also elect to advertise cumulative total return and
average annual total return, computed as described above.

The following table shows the cumulative total return and the average annual
total return of the fixed income portion of VP Advantage and VP Balanced since
their respective dates of inception (as noted) through December 31, 1998.

<TABLE>
<CAPTION>
- ----------------------------------- ---------------------------- ----------------------------- --------------------------
FUND CUMULATIVE TOTAL RETURN AVERAGE ANNUAL TOTAL RETURN DATE OF INCEPTION
SINCE INCEPTION
- ----------------------------------- ---------------------------- ----------------------------- --------------------------
- ----------------------------------- ---------------------------- ----------------------------- --------------------------
<S> <C> <C> <C>
VP Advantage 99.38% 9.75% 8-1-91
- ----------------------------------- ---------------------------- ----------------------------- --------------------------
- ----------------------------------- ---------------------------- ----------------------------- --------------------------
VP Balanced 132.86% 11.65% 5-1-91
- ----------------------------------- ---------------------------- ----------------------------- --------------------------
</TABLE>

ADDITIONAL PERFORMANCE COMPARISONS

The funds' performance may be compared with the performance of other mutual
funds tracked by mutual fund rating services or with other indexes of market
performance. This may include comparisons with funds that, unlike the American
Century funds, are sold with a sales charge or deferred sales charge. Sources of
economic data that may be used for such comparisons may include, but are not
limited to, U.S. Treasury bill, note and bond yields, money market fund yields,
U.S. government debt and percentage held by foreigners, the U.S. money supply,
net free reserves, and yields on current-coupon GNMAs (source: Board of
Governors of the Federal Reserve System); the federal funds and discount rates
(source: Federal Reserve Bank of New York); yield curves for U.S. Treasury
securities and AA/AAA-rated corporate securities (source: Bloomberg Financial
Markets); yield curves for AAA-rated tax-free municipal securities (source:
Telerate); yield curves for foreign government securities (sources: Bloomberg
Financial Markets and Data Resources, Inc.); total returns on foreign bonds
(source: J.P. Morgan Securities Inc.); various U.S. and foreign government
reports; the junk bond market (source: Data Resources, Inc.); the CRB Futures
Index (source: Commodity Index Report); the price of gold (sources: London
a.m./p.m. fixing and New York Comex Spot Price); rankings of any mutual fund or
mutual fund category tracked by Lipper Analytical Services, Inc. or Morningstar,
Inc.; mutual fund rankings published in major, nationally distributed
periodicals; data provided by the Investment Company Institute; Ibbotson
Associates, Stocks, Bonds, Bills, and Inflation; major indexes of stock market
performance; and indexes and historical data supplied by major securities
brokerage or investment advisory firms. The funds also may utilize reprints from
newspapers and magazines furnished by third parties to illustrate historical
performance or to provide general information about the funds.

PERMISSIBLE ADVERTISING INFORMATION

From time to time, the funds may, in addition to any other permissible
information, include the following types of information in advertisements,
supplemental sales literature and reports to shareholders: (1) discussions of
general economic or financial principles (such as the effects of compounding and
the benefits of dollar-cost averaging); (2) discussions of general economic
trends; (3) presentations of statistical data to supplement such discussions;
(4) descriptions of past or anticipated portfolio holdings for one or more of
the funds; (5) descriptions of investment strategies for one or more of the
funds; (6) descriptions or comparisons of various savings and investment
products (including, but not limited to, qualified retirement plans and
individual stocks and bonds), which may or may not include the funds; (7)
comparisons of investment products (including the funds) with relevant market or
industry indices or other appropriate benchmarks; (8) discussions of fund
rankings or ratings by recognized rating organizations; and (9) testimonials
describing the experience of persons that have invested in one or more of the
funds. The funds may also include calculations, such as hypothetical compounding
examples, which describe hypothetical investment results in such communications.
Such performance examples will be based on an express set of assumptions and are
not indicative of the performance of any of the funds.

FINANCIAL STATEMENTS

The financial statements of the funds, including the Statements of Assets and
Liabilities and the Statements of Operations for the fiscal year ended December
31, 1998, and the Statements of Changes in Net Assets for the fiscal years ended
December 31, 1997 and 1998, are included in the Annual Reports to shareholders
for the fiscal year ended December 31, 1998. The report on the financial
highlights for the fiscal years 1994, 1995, 1996 and 1997 are included in the
Annual Reports to shareholders for the fiscal year ended December 31, 1997. Each
such Annual Report is incorporated herein by reference. You may receive copies
of the reports without charge upon request to American Century at the address
and telephone number shown on the back cover of this Statement of Additional
Information.

EXPLANATION OF FIXED INCOME SECURITIES RATINGS

As described in the Prospectuses, the funds may invest in fixed income
securities. Those investments, however, are subject to certain credit quality
restrictions, as noted in the Prospectuses. The following is a summary of the
rating categories referenced in the prospectus disclosure.

<TABLE>
<CAPTION>
BOND RATINGS
- ------------- ------------- ---------------------------------------------------------------------------------
S&P MOODY'S DESCRIPTION
- ------------- ------------- ---------------------------------------------------------------------------------
<S> <C> <C>
AAA Aaa These are the highest ratings assigned by S&P and Moody's to a debt obligation
and indicates an extremely strong capacity to pay interest and repay principal.

AA Aa Debt rated in this category is considered to have a very strong capacity to pay
interest and repay principal and differs from AAA/Aaa issues only in a small
degree.

A A Debt rated A has a strong capacity to pay interest and repay principal although
it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher-rated categories.

BBB Baa Debt rated BBB/Baa is regarded as having an adequate capacity to pay interest
and repay principal. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category than in higher-rated categories.

BB Ba Debt rated BB/Ba has less near-term vulnerability to default than other
speculative issues. However, it faces major ongoing uncertainties or exposure to
adverse business, financial or economic conditions that could lead to inadequate
capacity to meet timely interest and principal payments. The BB rating category
also is used for debt subordinated to senior debt that is assigned an actual or
implied BBB- rating.

B B Debt rated B has a greater vulnerability to default but currently has the
capacity to meet interest payments and principal repayments. Adverse business,
financial or economic conditions will likely impair capacity or willingness to
pay interest and repay principal. The B rating category is also used for debt
subordinated to senior debt that is assigned an actual or implied BB/Ba or
BB-/Ba3 rating.

CCC Caa Debt rated CCC/Caa has a currently identifiable vulnerability to default and is
dependent upon favorable business, financial and economic conditions to meet
timely payment of interest and repayment of principal. In the event of adverse
business, financial or economic conditions, it is not likely to have the
capacity to pay interest and repay principal. The CCC/Caa rating category is
also used for debt subordinated to senior debt that is assigned an actual or
implied B or B-/B3 rating.

CC Ca The rating CC/Ca typically is applied to debt subordinated to senior debt that
is assigned an actual or implied CCC/Caa rating.

C C The rating C typically is applied to debt subordinated to senior debt, which is
assigned an actual or implied CCC-/Caa3 debt rating. The C rating may be used to
cover a situation where a bankruptcy petition has been filed, but debt service
payments are continued.

CI - The rating CI is reserved for income bonds on which no interest is being paid.

D D Debt rated D is in payment default. The D rating category is used when interest
payments or principal payments are not made on the date due even if the
applicable grace period has not expired, unless S&P believes that such payments
will be made during such grace period. The D rating also will be used upon the
filing of a bankruptcy petition if debt service payments are jeopardized.
- ------------ ------------- ----------------------------------------------------------------------------------

To provide more detailed indications of credit quality, the Standard & Poor's
ratings from AA to CCC may be modified by the addition of a plus or minus sign
to show relative standing within these major rating categories. Similarly,
Moody's adds numerical modifiers (1,2,3) to designate relative standing within
its major bond rating categories. Fitch Investors Service, Inc. also rates bonds
and uses a ratings system that is substantially similar to that used by Standard
& Poor's.

Commercial Paper Ratings
- ------------- --------------- -------------------------------------------------------------------------------------------
S&P MOODY'S DESCRIPTION
- ------------- --------------- -------------------------------------------------------------------------------------------
A-1 Prime-1 This indicates that the degree of safety regarding timely payment is strong. Standard &
(P-1) Poor's rates those issues determined to possess extremely strong safety characteristics
as A-1+.
A-2 Prime-2 Capacity for timely payment on commercial paper is satisfactory, but the relative degree
(P-2) of safety is not as high as for issues designated A-1. Earnings trends and coverage
ratios, while sound, will be more subject to variation. Capitalization characteristics,
while still appropriated, may be more affected by external conditions. Ample alternate
liquidity is maintained.
A-3 Prime-3 Satisfactory capacity for timely repayment. Issues that carry this rating are somewhat
(P-3) more vulnerable to the adverse changes in circumstances than obligations carrying the
higher designations.
- ------------- --------------- -------------------------------------------------------------------------------------------

Note Ratings
- ------------- --------------- -------------------------------------------------------------------------------------------
S&P MOODY'S DESCRIPTION
- ------------- --------------- -------------------------------------------------------------------------------------------
SP-1 MIG-1; VMIG-1 Notes are of the highest quality enjoying strong protection from established
cash flows of funds for their servicing or from established and broad-based
access to the market for refinancing, or both.

SP-2 MIG-2; VMIG-2 Notes are of high quality, with margins of protection ample, although not so
large as in the preceding group.

SP-3 MIG-3; VMIG-3 Notes are of favorable quality, with all security elements accounted for, but
lacking the undeniable strength of the preceding grades. Market access for
refinancing, in particular, is likely to be less well established.

SP-4 MIG-4; VMIG-4 Notes are of adequate quality, carrying specific risk but having protection and
not distinctly or predominantly speculative.
- ------------- --------------- -------------------------------------------------------------------------------------------
</TABLE>

MORE INFORMATION ABOUT THE FUNDS IS CONTAINED:

Annual and Semiannual Reports. These contain more information about the funds'
investments and the market conditions and investment strategies that
significantly affected the funds' performance during the most recent fiscal
period. The annual and semiannual reports are incorporated by reference into
this SAI. This means that it is legally part of this SAI.

You can get the annual and semiannual reports for free and ask any questions
about the funds by contacting us at one of the addresses or phone numbers listed
below.

If you own or are considering purchasing fund shares through * an
employer-sponsored retirement plan * a bank * a broker-dealer * an insurance
company * another financial intermediary you can get the annual and semiannual
reports directly from them.

American Century Investments
Kansas City, Missouri 64141-6200

www.americancentury.com

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

Automated Information Line
1-800-345-8765

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

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

Fax
816-340-7962

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

Investment Company Act File No. 811-5188
<PAGE>
AMERICAN CENTURY VARIABLE PORTFOLIOS, INC.

PART C OTHER INFORMATION

ITEM 23 EXHIBITS (all exhibits not filed herewith are being incorporated
herein by reference).

(a) (1)Articles of Incorporation of TCI Portfolios, Inc. dated June 3,
1987 (filed electronically as Exhibit 1.1 to Post-Effective Amendment
No. 17 to the Registration Statement on January 16, 1996, File No.
33-14567).

(2) Articles of Amendment of TCI Portfolios, Inc. dated July 22, 1988
(filed electronically as Exhibit 1.2 to Post-Effective Amendment No.
17 to the Registration Statement on January 16, 1996, File No.
33-14567).

(3) Articles of Amendment of TCI Portfolios, Inc. dated August 11,
1993 (filed electronically as Exhibit 1.3 to Post-Effective Amendment
No. 17 to the Registration Statement on January 16, 1996, File No.
33-14567).

(4) Articles Supplementary of TCI Portfolios, Inc., dated November 30,
1992 (filed electronically as Exhibit 1.4 to Post-Effective Amendment
No. 18 to the Registration Statement on March 20, 1996, File No.
33-14567).

(5) Articles Supplementary of TCI Portfolios, Inc., dated April 24,
1995 (filed electronically as Exhibit 1.5 to Post-Effective Amendment
No. 18 to the Registration Statement on March 20, 1996, File No.
33-14567).

(6) Articles Supplementary of TCI Portfolios, Inc., dated March 11,
1996 (filed electronically as Exhibit 1.6 to Post-Effective Amendment
No. 17 to the Registration Statement on January 16, 1996, File No.
33-14567).

(7) Articles of Amendment of TCI Portfolios, Inc., dated April 1, 1997
(filed electronically as Exhibit 1.7 to Post-Effective Amendment No.
20 to the Registration Statement on April 28, 1997, File No.
33-14567).

(8) Articles Supplementary of American Century Variable Portfolios,
Inc., dated May 1, 1997 (filed electronically as Exhibit 1.8 to
Post-Effective Amendment No. 20 to the Registration Statement on April
28, 1997, File No. 33-14567).

(9) Articles Supplementary of American Century Variable Portfolios,
Inc. dated July 28, 1997 (filed electronically as Exhibit 1.9 to
Post-Effective Amendment No. 23 to the Registration Statement on April
27, 1998, File No. 33-14567).

(b) (1)Amended and Restated By-Laws of TCI Portfolios, Inc. (filed
electronically as Exhibit 2 to Post-Effective Amendment No. 17 to the
Registration Statement on January 16, 1996, File No. 33-14567).

(2) Amendment to Amended and Restated By-Laws of American Century
Variable Portfolios, Inc. is included herein.

(c) Registrant hereby incorporates by reference, as though set forth fully
herein, Article Fifth, Article Seventh and Article Eighth of
Registrants Articles of Incorporation, appearing as Exhibit 1.1 to
Post-Effective Amendment No. 17 on Form N-1A of the Registrant, and
Article Fifth of Registrants Articles of Amendment, apearing as
Exhibit 1.3 to Post-Effective Amendment No. 17 on Form N-1A of the
Registrant; and Sections 3, 4, 5, 6, 7, 8, 9, 10, 11, 22, 25, 30, 31,
33, 39, ,40, 45 and 46 of Registrants Amendment to By-Laws appearing
as Exhibit 2 to Post-Effective Amendment No. 17 on Form N-1A of the
Registrant, and Sections 25, 32 & 32 of Registrants By-Laws appearing
as Exhibit 2.2 to Post-Effective Amendment No. 23 on Form N-1A of the
Registrant.

(d) Management Agreement between American Century Variable Portfolios,
Inc. and American Century Investment Management, Inc. dated November
16, 1998 is included herein.

(e) (1) Distribution Agreement between American Century Variable
Portfolios, Inc. and Funds Distributor, Inc. dated January 15, 1998
(filed electronically as Exhibit 6 to Post-Effective Amendment No. 28
to the Registration Statement of American Century Target Maturities
Trust on January 30, 1998, File No. 2-94608).

(2) Amendment No. 1 to the Distribution Agreement between American
Century Variable Portfolios, Inc. and Funds Distributor, Inc. dated
June 1, 1998 (filed electronically as Exhibit 6b to Post-Effective
Amendment No. 11 to the Registration Statment of American Century
Capital Portfolios, Inc. on June 26, 1998, File No. 33-64872).

(3) Amendment No. 2 to the Distribution Agreement between American
Century Variable Portfolios, Inc. and Funds Distributor, Inc. dated
December 1, 1998 (filed electronically as Exhibit 6c to Post-Effective
Amendment No. 12 to the Registration Statement of American Century
World Mutual Funds, Inc. on November 13, 1998, File No. 33-39242).

(4) Amendment No. 3 to the Distribution Agreement between American
Century World Mutual Funds, Inc. and Funds Distributor, Inc. dated
January 29, 1999 is included herein.

(g) (1) Custody Agreement with UMB Bank, N.A. dated September 12, 1995
(filed electronically as Exhibit 8.2 to Post-Effective Amendment No.
17 to the Registration Statement on January 16, 1996, File No.
33-14567).

(2) Amendment No. 1 to Custody Agreement with UMB Bank, N.A., dated
January 25, 1996 (filed electronically as Exhibit 8b to Post-Effective
Amendment No. 6 to the Registration Statement of American Century
World Mutual Funds, Inc., on March 29, 1996, File No. 33-39242).

(3) Global Custody Agreement between The Chase Manhattan Bank and the
Twentieth Century and Benham Funds, dated August 9, 1996 (filed
electronically as Exhibit 8 to Post-Effective Amendment No. 31 to the
Registration Statement of American Century Government Income Trust, on
February 7, 1997, File No. 2-99222).

(h) Transfer Agency Agreement with Twentieth Century Services, Inc.
(formerly J.E. Stowers & Company) dated October 15, 1987 (filed
electronically as Exhibit 9 to Post-Effective Amendment No. 19 to the
Registration Statement on September 27, 1996, File No. 33-14567).

(i) Opinion and Consent of Counsel is included herein.

(j) (1) Consent of Deloitte & Touche LLP to be filed by amendment.

(2) Consent of Baird, Kurtz & Dobson to be filed by amendment.

(3) Power of Attorney dated July 25, 1998 is included herein.

(k) Not applicable.

(l) Not applicable.

(m) Not applicable.

(n) (1) Financial Data Schedule for VP Capital Appreciation is included
herein.

(2) Financial Data Schedule for VP Balanced is included herein.

(3) Financial Data Schedule for VP Advantage is included herein.

(4) Financial Data Schedule for VP International is included herein.

(5) Financial Data Schedule for VP Value is included herein.

(6) Financial Data Schedule for VP Income & Growth is included herein.

(o) Not applicable.

ITEM 24. Persons Controlled by or Under Common Control with Registrant - Not
applicable.

ITEM 25. Indemnification.

The Registrant is a Maryland corporation. Section 2- 418 of the
Maryland General Corporation Law allows a Maryland corporation to
indemnify its officers, directors, employees and agents to the extent
provided in such statute.

Article XIII of the Registrant's Amended Articles of Incorporation,
Exhibits 1(a) and 1(b), requires the indemnification of the
Registrant's directors and officers to the extent permitted by
Section 2-418 of the Maryland General Corporation Law, the Investment
Company Act of 1940 and all other applicable laws.

The Registrant has purchased an insurance policy insuring its
officers and directors against certain liabilities which such
officers and directors may incur while acting in such capacities and
providing reimbursement to the Registrant for sums which it may be
permitted or required to pay to its officers and directors by way of
indemnification against such liabilities, subject in either case to
clauses respecting deductibility and participation.

ITEM 26. Business and Other Connections of Investment Advisor.

American Century Investment Management, Inc., the investment advisor,
is engaged in the business of managing investments for registered
investment companies, deferred compensation plans and other
institutional investors.

ITEM 27. Principal Underwriters.

(a) Funds Distributor, Inc. (the "Distributor") acts as principal
underwriter for the following investment companies.

American Century California Tax-Free and Municipal Funds
American Century Capital Portfolios, Inc.
American Century Government Income Trust
American Century International Bond Funds
American Century Investment Trust
American Century Municipal Trust
American Century Mutual Funds, Inc.
American Century Premium Reserves, Inc.
American Century Quantitative Equity Funds
American Century Strategic Asset Allocations, Inc.
American Century Target Maturities Trust
American Century Variable Portfolios, Inc.
American Century World Mutual Funds, Inc.
The Brinson Funds
Dresdner RCM Capital Funds, Inc.
Dresdner RCM Equity Funds, Inc.
Founders Funds, Inc.
Harris Insight Funds Trust
HT Insight Funds, Inc. d/b/a Harris Insight Funds
J.P. Morgan Institutional Funds
J.P. Morgan Funds
The JPM Series Trust
The JPM Series Trust II
LaSalle Partners Funds, Inc.
Kobrick-Cendant Investment Trust
Merrimac Series
Monetta Fund, Inc.
Monetta Trust
The Montgomery Funds I
The Montgomery Funds II
The Munder Framlington Funds Trust
The Munder Funds Trust
The Munder Funds, Inc.
National Investors Cash Management Fund, Inc.
Orbitex Group of Funds
SG Cowen Funds, Inc.
SG Cowen Income + Growth Fund, Inc.
SG Cowen Standby Reserve Fund, Inc.
SG Cowen Standby Tax-Exempt Reserve Fund, Inc.
SG Cowen Series Funds, Inc.
St. Clair Funds, Inc.
The Skyline Funds
Waterhouse Investors Family of Funds, Inc.
WEBS Index Fund, Inc.

The Distributor is registered with the Securities and Exchange
Commission as a broker-dealer and is a member of the National
Association of Securities Dealers. The Distributor is located at
60 State Street, Suite 1300, Boston, Massachusetts 02109. The
Distributor is an indirect wholly-owned subsidiary of Boston
Institutional Group, Inc., a holding company all of whose
outstanding shares are owned by key employees.

(b) The following is a list of the executive officers, directors
and partners of the Distributor:

<TABLE>
Name and Principal Business Positions and Offices with Positions and Offices with
Address* Underwriter Registrant

<S> <C> <C>
Marie E. Connolly Director, President and Chief none
Executive Officer

George A. Rio Executive Vice President President, Principal Executive
and Principal Financial Officer

Donald R. Roberson Executive Vice President none

William S. Nichols Executive Vice President none

Margaret W. Chambers Senior Vice President, General none
Counsel, Chief Compliance
Officer, Secretary and Clerk

Michael S. Petrucelli Senior Vice President none

Joseph F. Tower, III Director, Senior Vice President, none
Treasurer and Chief Financial
Officer

Paula R. David Senior Vice President none

Gary S. MacDonald Senior Vice President none

Judith K. Benson Senior Vice President none

Bernard A. Whalen Senior Vice President none

William J. Nutt Chairman and Director none
- --------------------
* All addresses are 60 State Street, Suite 1300, Boston, Massachusetts 02109
</TABLE>

ITEM 28. Location of Accounts and Records.

All accounts, books and other documents required to be maintained by
Section 31(a) of the 1940 Act, and the rules promulgated thereunder,
are in the possession of Registrant, American Century Services
Corporation and American Century Investment Management, Inc., all
located at American Century Tower, 4500 Main Street, Kansas City,
Missouri 64111.

ITEM 29. Management Services - Not applicable.

ITEM 30. Undertakings - Not applicable.
<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, American Century Variable Portfolios, Inc., the
Registrant, certifies that it has duly caused this Post-Effective Amendment No.
24 to its Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Kansas City, State of Missouri on the
15th day of January, 1999.

American Century Variable Portfolios, Inc.
(Registrant)

By:/*/George A. Rio
George A. Rio, President, Principal Executive
and Principal Financial Officer

Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 24 has been signed below by the following persons
in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
*George A. Rio President, Principal Executive January 15, 1999
- ------------------------- and Principal Financial Officer
George A. Rio

*Maryanne Roepke Vice President and Treasurer January 15, 1999
- -------------------------
Maryanne Roepke

*James E. Stowers, Jr. Director January 15, 1999
- -------------------------
James E. Stowers, Jr.

*James E. Stowers III Director January 15, 1999
- -------------------------
James E. Stowers, III

*Thomas A. Brown Director January 15, 1999
- -------------------------
Thomas A. Brown

*Robert W. Doering, M.D. Director January 15, 1999
- -------------------------
Robert W. Doering, M.D.

*Andrea C. Hall, Ph.D. Director January 15, 1999
- -------------------------
Andrea C. Hall, Ph.D.

*D. D. (Del) Hock Director January 15, 1999
- -------------------------
D. D. (Del) Hock

*Donald H. Pratt Director January 15, 1999
- -------------------------
Donald H. Pratt

*Lloyd T. Silver, Jr. Director January 15, 1999
- -------------------------
Lloyd T. Silver, Jr.

*M. Jeannine Strandjord Director January 15, 1999
- -------------------------
M. Jeannine Strandjord

*By /s/Charles A. Etherington
Charles A. Etherington
Attorney-in-Fact
</TABLE>

EXHIBIT INDEX

Exhibit Description of Document
Number

EX-99.a1 Articles of Incorporation of TCI Portfolios, Inc. dated June 3, 1987
(filed as Exhibit 1.1 to Post-Effective Amendment No. 17 to the
Registration Statement on Form N-1A of the Registrant, File No.
33-14567, filed on January 16, 1996, and incorporated herein by
reference).

EX-99.a2 Articles of Amendment of TCI Portfolios, Inc. dated July 22, 1988
(filed as Exhibit 1.2 to Post-Effective Amendment No. 17 to the
Registration Statement on Form N-1A of the Registrant, File No.
33-14567, filed on January 16, 1996, and incorporated herein by
reference).

EX-99.a3 Articles of Amendment of TCI Portfolios, Inc. dated August 11, 1993
(filed as Exhibit 1.3 to Post-Effective Amendment No. 17 to the
Registration Statement on Form N-1A of the Registrant, File No.
33-14567, filed on January 16, 1996, and incorporated herein by
reference).

EX-99.a4 Articles Supplementary of TCI Portfolios, Inc., dated November 30,
1992 (filed as Exhibit 1.4 to Post-Effective Amendment No. 18 to the
Registration Statement on Form N-1A of the Registrant, File No.
33-14567, filed on March 20, 1996, and incorporated herein by
reference).

EX-99.a5 Articles Supplementary of TCI Portfolios, Inc., dated April 24, 1995
(filed as Exhibit 1.5 to Post-Effective Amendment No. 18 to the
Registration Statement on Form N-1A of the Registrant, File No.
33-14567, filed on March 20, 1996, and incorporated herein by
reference).

EX-99.a6 Articles Supplementary of TCI Portfolios, Inc., dated March 11, 1996
(filed as Exhibit 1.6 to Post-Effective Amendment No. 19 to the
Registration Statement on Form N-1A of the Registrant, File No.
33-14567, filed on September 27, 1996, and incorporated herein by
reference).

EX-99.a7 Articles of Amendment of TCI Portfolios, Inc., dated April 1, 1997
(filed as Exhibit 1.7 to Post-Effective Amendment No. 20 to the
Registration Statement on Form N-1A of the Registrant, File No.
33-14567, filed on April 28, 1997, and incorporated herein by
reference).

EX-99.a8 Articles Supplementary of American Century Variable Portfolios, Inc.
dated May 1, 1997 (filed as Exhibit 1.8 to Post-Effective Amendment
No. 20 to the Registration Statement on Form N-1A of the Registrant,
File No. 33-14567, filed on April 28, 1997, and incorporated herein
by reference).

EX-99.a9 Articles Supplementary of American Century Variable Portfolios, Inc.
dated July 28, 1997 (filed as Exhibit 1.9 to Post-Effective
Amendment No. 23 to the Registration Statement on Form N-1A of the
Registrant, File No. 33-14567, filed on April 27, 1998, and
incorporated herein by reference).

EX-99.b1 Amended and Restated By-Laws of TCI Portfolios, Inc.(filed as
Exhibit 2 to Post-Effective Amendment No. 17 to the Registration
Statement on Form N-1A of the Registrant, File No. 33-14567, filed
on January 16, 1996, and incorporated herein by reference).

EX-99.b2 Amendment to Amended and Restated By-Laws of American Century
Variable Portfolios, Inc., is included herein.

EX-99.d Management Agreement between American Century Variable Portfolios,
Inc. and American Century Investment Management, Inc. dated November
16, 1998 is included herein.

EX-99.e1 Distribution Agreement between American Century Variable Portfolios,
Inc. and Funds Distributor, Inc., dated January 15, 1998 (filed as
Exhibit 6.1 to Post-Effective Amendment No. 28 to the Registration
Statement on Form N-1A of the American Century Target Maturities
Trust, File No. 2-94608, filed on January 30, 1998, and incorporated
herein by reference).

EX-99.e2 Amendment No. 1 to the Distribution Agreement between American
Century Variable Portfolios, Inc. and Funds Distributor, Inc. dated
June 1, 1998 (filed as Exhibit 6b to Post-Effective Amendment No. 11
to the Registration Statement on Form N-1A of American Century
Capital Portfolios, Inc., File No. 33-64872, filed on June 26, 1998,
and incorporated herein by reference).

EX-99.e3 Amendment No. 2 to the Distribution Agreement between American
Century Variable Portfolios, Inc. and Funds Distributor, Inc. dated
December 1, 1998 (filed as Exhibit 6c to Post-Effective Amendment
No. 12 to the Registration Statement of American Century World
Mutual Funds, Inc. , File No. 33-39242, filed on November 13, 1998
and incorporated herein by reference).

EX-99.e4 Amendment No. 3 to Distribution Agreement between American Century
Variable Portfolios, Inc. and Funds Distributor, Inc. dated January
29, 1999 is included herein.

EX-99.g1 Custody Agreement dated September 12, 1995, with UMB Bank,
N.A.(filed as Exhibit 8.2 to Post-Effective Amendment No. 17 to the
Registration Statement on Form N-1A of the Registrant, File No.
33-14567, filed on January 16, 1996, and incorporated herein by
reference).

EX-99.g2 Amendment No. 1 to Custody Agreement with UMB Bank, N.A. dated
January 25, 1996 (filed as Exhibit 8b to Post-Effective Amendment
No. 6 to the Registration Statement on Form N-1A of American Century
World Mutual Funds, Inc., File No. 33-39242, filed on March 29,
1996, and incorporated herein by reference).

EX-99.g3 Global Custody Agreement between The Chase Manhattan Bank and the
Twentieth Century and Benham Funds, dated August 9, 1996 (filed as
Exhibit 8 to Post-Effective Amendment No. 31 to the Registration
Statement on Form N-1A of American Century Government Income Trust,
File No. 2-99222, filed on February 7, 1997, and incorporated herein
by reference).

EX-99.h Transfer Agency Agreement with Twentieth Century Services, Inc.
(formerly J. E. Stowers & Company) dated October 15, 1987 (filed as
Exhibit 9 to Post-Effective Amendment No. 19 to the Registration
Statement on Form N-1A of the Registrant, File No. 33-14567, filed
on September 27, 1996, and incorporated herein by reference).

EX-99.i Opinion and Consent of Counsel is included herein.

EX-99.j1 Consent of Deloitte & Touche LLP to be filed by amendment.

EX-99.j2 Consent of Baird, Kurtz & Dobson to be filed by amendment.

EX-99.j3 Power of Attorney dated July 25, 1998 is included herein.

EX-27.1.1 Financial Data Schedule for American Century VP Capital Appreciation
is included herein.

EX-27.7.2 Financial Data Schedule for American Century VP Balanced is included
herein.

EX-27.7.3 Financial Data Schedule for American Century VP Advantage is
included herein.

EX-27.1.4 Financial Data Schedule for American Century VP International is
included herein.

EX-27.1.5 Financial Data Schedule for American Century VP Value is included
herein.

EX-27.1.6 Financial Data Schedule for American Century VP Income & Growth is
included herein.

AMERICAN CENTURY VARIABLE PORTFOLIOS, INC.

RESOLVED, that the By-laws of this Corporation are hereby amended by
deleting Section 25 in its entirety and replacing it with the following:

OFFICERS

Section 25. The officers of the Corporation shall be chosen by the
Board of Directors and shall include a President, a Vice President, a
Secretary and a Treasurer. The Board of Directors may also choose a
Chairman of the Board, a Vice Chairman of the Board, additional Vice
Presidents, one or more Assistant Vice Presidents, Assistant
Secretaries and Assistant Treasurers. If chosen, the Chairman and Vice
Chairman of the Board shall be selected from among the Directors but
shall not be considered officers of the Corporation. Officers of the
Corporation shall be elected by the Board of Directors at its first
meeting after each annual meeting of stockholders. If no annual meeting
of stockholders shall be held in any year, such election of officers
may be held at any regular or special meeting of the Board of Directors
as shall be determined by the Board of Directors.

RESOLVED, that the By-laws of this Corporation are hereby amended by
deleting Section 32 in its entirety and replacing it with the following, adding
Section 33 and renumbering the Sections following thereafter:

VICE PRESIDENTS AND ASSISTANT VICE PRESIDENTS

Section 32. The Vice President, or if there shall be more than one, the
Vice Presidents in the order determined by the Board of Directors,
shall, in the absence or disability of the President, perform the
duties and exercise the powers of the President, and shall perform such
other duties and have such other powers as the Board of Directors may
from time to time prescribe.

Section 33. The Assistant Vice President, if any, or if there be more
than one, the Assistant Vice Presidents in the order determined by the
Board of Directors, shall, in the absence or disability of the Vice
President, perform the duties and exercise the powers of the Vice
President and shall perform such other duties and have such other
powers as the Board of Directors may from time to time prescribe.

RESOLVED, that the By-laws of this Corporation are hereby amended by
adding the following Sections 40 and 41, and renumbering the Sections following
thereafter:

CHAIRMAN AND VICE CHAIRMAN OF THE BOARD

Section 40. If a Chairman of the Board be elected, he shall preside at
all meetings of the stockholders and Directors at which he may be
present and shall have such other duties, powers and authority as may
be prescribed elsewhere in these By-laws. The Board of Directors may
delegate such other authority and assign such additional duties to the
Chairman of the Board, other than those conferred by law exclusively
upon the President.

Section 41. If a Vice Chairman of the Board be elected, he shall
preside at all meetings of the stockholders and Directors at which the
Chairman is absent and shall have such other duties, powers and
authority as may be prescribed elsewhere in these By-laws. The Board of
Directors may delegate such other authority and assign such additional
duties to the Vice Chairman of the Board, other than those conferred by
law exclusively upon the President.

* * * * * *

I, the undersigned, being the Secretary of the Corporation, do hereby
certify that the foregoing amendments to the By-laws were adopted by the Board
of Directors of the Corporation on November 22, 1997, to be effective January
15, 1998.

/s/ Patrick A. Looby
Patrick A. Looby, Secretary

MANAGEMENT AGREEMENT

THIS MANAGEMENT AGREEMENT (the "Agreement"), is made as of the 16th day
of November, 1998, by and between AMERICAN CENTURY VARIABLE PORTFOLIOS, INC., a
Maryland corporation (hereinafter called the "Corporation"), and AMERICAN
CENTURY INVESTMENT MANAGEMENT, INC., a Delaware corporation (hereinafter called
the "Investment Manager"). In consideration of the mutual promises and
agreements herein contained, the parties agree as follows:

1. Investment Management Services. The Investment Manager shall
supervise the investments of each series of shares of the Corporation
contemplated as of the date hereof, and such subsequent series of shares as the
Corporation shall select the Investment Manager to manage. In such capacity, the
Investment Manager shall either directly, or through the utilization of others
as contemplated by Section 7 below, maintain a continuous investment program for
each such series, determine what securities shall be purchased or sold by each
series, secure and evaluate such information as it deems proper and take
whatever action is necessary or convenient to perform its functions, including
the placing of purchase and sale orders.

2. Compliance With Laws. All functions undertaken by the Investment
Manager hereunder shall at all times conform to, and be in accordance with, any
requirements imposed by:

(1) the Investment Company Act of 1940, as amended (the
"Investment Company Act"), and any rules and regulations promulgated
thereunder;

(2) any other applicable provisions of law;

(3) the Articles of Incorporation of the Corporation as
amended from time to time;

(4) the Bylaws of the Corporation as amended from time to
time; and

(5) the registration statement(s) of the Corporation, as
amended from time to time, filed under the Securities Act of 1933 and
the Investment Company Act.

3. Board Supervision. All of the functions undertaken by the Investment
Manager hereunder shall at all times be subject to the direction of the Board of
Directors of the Corporation, its Executive Committee, or any committee or
officers of the Corporation acting under the authority of the Board of
Directors.

4. Payment of Expenses. The Investment Manager will pay all of the
expenses of each series of the Corporation's shares that it shall manage, other
than interest, taxes, brokerage commissions, extraordinary expenses and the fees
and expenses (including counsel fees) of those directors who are not "interested
persons" as defined in the Investment Company Act (hereinafter referred to as
the "Independent Directors"). The Investment Manager will provide the
Corporation with all physical facilities and personnel required to carry on the
business of each series of the Corporation's shares that it shall manage,
including but not limited to office space, office furniture, fixtures and
equipment, office supplies, computer hardware and software and salaried and
hourly paid personnel. The Investment Manager may at its expense employ others
to provide all or any part of such facilities and personnel.

5. Account Fees. The Corporation, by resolution of the Board of
Directors, including a majority of the Independent Directors, may from time to
time authorize the imposition of a fee as a direct charge against shareholder
accounts of one or more of the series, such fee to be retained by the
Corporation or to be paid to the Investment Manager to defray expenses which
would otherwise be paid by the Investment Manager in accordance with the
provisions of paragraph 4 of this Agreement. At least sixty (60) days' prior
written notice of the intent to impose such fee must be given to the
shareholders of the affected series.

6. Management Fees.

(a) In consideration of the services provided by the
Investment Manager, each series of shares of the Corporation managed by
the Investment Manager shall pay to the Investment Manager a per annum
management fee (hereinafter, the "Applicable Fee"), as follows:

Name of Series Applicable Fee

VP Capital Appreciation 1.00% on first $500 million
0.95% on next $500 million
0.90% thereafter

VP International 1.50% on first $250 million
1.20% on next $250 million
1.10% thereafter

VP Value 1.00% on first $500 million
0.95% on next $500 million
0.90% thereafter

VP Balanced 0.90% on first $250 million
0.85% on next $250 million
0.80% thereafter

VP Income & Growth 0.70%

VP Advantage 1.00%

(b) On the first business day of each month, each series of
shares shall pay the management fee at the rate specified by
subparagraph (a) of this paragraph 6 to the Investment Manager for the
previous month. The fee for the previous month shall be calculated by
multiplying the Applicable Fee for such series by the aggregate average
daily closing value of the series' net assets during the previous
month, and further multiplying that product by a fraction, the
numerator of which shall be the number of days in the previous month,
and the denominator of which shall be 365 (366 in leap years).

(c) In the event that the Board of Directors of the
Corporation shall determine to issue any additional series of shares
for which it is proposed that the Investment Manager serve as
investment manager, the Corporation and the Investment Manager shall
enter into an Addendum to this Agreement setting forth the name of the
series, the Applicable Fee and such other terms and conditions as are
applicable to the management of such series of shares.

7. Subcontracts. In rendering the services to be provided pursuant to
this Agreement, the Investment Manager may, from time to time, engage or
associate itself with such persons or entities as it determines is necessary or
convenient in its sole discretion and may contract with such persons or entities
to obtain information, investment advisory and management services, or such
other services as the Investment Manager deems appropriate. Any fees,
compensation or expenses to be paid to any such person or entity shall be paid
by the Investment Manager, and no obligation to such person or entity shall be
incurred on behalf of the Corporation. Any arrangement entered into pursuant to
this paragraph shall, to the extent required by law, be subject to the approval
of the Board of Directors of the Corporation, including a majority of the
Independent Directors, and the shareholders of the Corporation.

8. Continuation of Agreement. This Agreement shall continue in effect,
unless sooner terminated as hereinafter provided, for a period of two years from
the execution hereof, and for as long thereafter as its continuance is
specifically approved at least annually (i) by the Board of Directors of the
Corporation or by the vote of a majority of the outstanding voting securities of
the Corporation, and (ii) by the vote of a majority of the directors of the
Corporation, who are not parties to the agreement or interested persons of any
such party, cast in person at a meeting called for the purpose of voting on such
approval.

9. Termination. This Agreement may be terminated by the Investment
Manager at any time without penalty upon giving the Corporation 60 days' written
notice, and may be terminated at any time without penalty by the Board of
Directors of the Corporation or by vote of a majority of the outstanding voting
securities of the Corporation on 60 days' written notice to the Investment
Manager.

10. Effect of Assignment. This Agreement shall automatically terminate
in the event of assignment by the Investment Manager, the term "assignment" for
this purpose having the meaning defined in Section 2(a)(4) of the Investment
Company Act.

11. Other Activities. Nothing herein shall be deemed to limit or
restrict the right of the Investment Manager, or the right of any of its
officers, directors or employees (who may also be a director, officer or
employee of the Corporation), to engage in any other business or to devote time
and attention to the management or other aspects of any other business, whether
of a similar or dissimilar nature, or to render services of any kind to any
other corporation, firm, individual or association.

12. Standard of Care. In the absence of willful misfeasance, bad faith,
gross negligence, or reckless disregard of its obligations or duties hereunder
on the part of the Investment Manager, it, as an inducement to it to enter into
this Agreement, shall not be subject to liability to the Corporation or to any
shareholder of the Corporation for any act or omission in the course of, or
connected with, rendering services hereunder or for any losses that may be
sustained in the purchase, holding or sale of any security.

13. Separate Agreement. The parties hereto acknowledge that certain
provisions of the Investment Company Act, in effect, treat each series of shares
of an investment company as a separate investment company. Accordingly, the
parties hereto hereby acknowledge and agree that, to the extent deemed
appropriate and consistent with the Investment Company Act, this Agreement shall
be deemed to constitute a separate agreement between the Investment Manager and
each series of shares of the Corporation managed by the Investment Manager.

14. Use of the Names "American Century," "Twentieth Century," and
"Benham." The names "American Century," "Twentieth Century," and "Benham" and
all rights to the use of the names "American Century," "Twentieth Century," and
"Benham" are the exclusive property of American Century Services Corporation
("ACSC"). ACSC has consented to, and granted a non-exclusive license for, the
use by the Corporation of the names "American Century," "Twentieth Century," and
"Benham" in the name of the Corporation and any series of shares thereof. Such
consent and non-exclusive license may be revoked by ACSC in its discretion if
ACSC, the Investment Manager, or a subsidiary or affiliate of either of them is
not employed as the investment adviser of each series of shares of the
Corporation. In the event of such revocation, the Corporation and each series of
shares thereof using the names "American Century," "Twentieth Century," or
"Benham" shall cease using the names "American Century," "Twentieth Century," or
"Benham," unless otherwise consented to by ACSC or any successor to its interest
in such names.

IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective duly authorized officers as of the day and year
first above written.

Attest: AMERICAN CENTURY VARIABLE
PORTFOLIOS, INC.

/s/ Brian L. Brogan /s/ Patrick A. Looby
Brian L. Brogan Patrick A. Looby
Assistant Secretary Vice President

Attest: AMERICAN CENTURY INVESTMENT
MANAGEMENT, INC.

/s/ Patrick A. Looby /s/ Robert C. Puff, Jr.
Patrick A. Looby Robert C. Puff, Jr.
Assistant Secretary President

AMENDMENT NO. 3 TO DISTRIBUTION AGREEMENT

THIS AMENDMENT NO. 3 TO DISTRIBUTION AGREEMENT is made as of the 29th
of January, 1999, by and between each of the open end management investment
companies listed on Schedule A, attached hereto, as of the dates noted on such
Schedule A, together with all other open end management investment companies
subsequently established and made subject to this Agreement in accordance with
Section 16 (the "Issuers") and Funds Distributor, Inc. ("Distributor").
Capitalized terms not otherwise defined herein shall have the meaning ascribed
to them in the Distribution Agreement.

RECITALS

WHEREAS, the Issuers and Distributor are parties to a certain
Distribution Agreement dated January 15, 1998, amended June 1, 1998 and December
1, 1998 (the "Distribution Agreement"); and

WHEREAS, American Century Capital Portfolios, Inc. has added a series,
American Century Equity Index Fund; and

WHEREAS, American Century Mutual Funds, Inc. has added a series,
American Century Tax-Managed Value Fund; and

WHEREAS, the parties desire to amend the Distribution Agreement to add
the new series, and multiple classes; and

WHEREAS, the parties desire to amend the language regarding the renewal
of the Distribution Agreement.

NOW, THEREFORE, in consideration of the mutual promises set forth
herein, the parties hereto agree as follows:

1. The new series are hereby added as parties to the Distribution
Agreement.

2. Schedules A, B, C, D and E to Distribution Agreement are hereby
amended by deleting the text thereof in their entirety and inserting in lieu
therefor the Schedules A, B, C, D and E attached hereto.

3. Section 13(a) of the Distribution Agreement is hereby amended by
deleting the penultimate sentence thereof.

4. After the date hereof, all references to the Distribution Agreement
shall be deemed to mean the Distribution Agreement, as amended by Amendment No.
1, Amendment 2 and this Amendment No. 3.

5. In the event of a conflict between the terms of this Amendment No.
3, Amendment No. 2, Amendment No. 1 and the Distribution Agreement, it is the
intention of the parties that the terms of this Amendment No. 3 shall control
and the Distribution Agreement shall be interpreted on that basis. To the extent
the provisions of the Distribution Agreement, Amendment No. 1 and Amendment No.
2 have not been amended by this Amendment No. 3, the parties hereby confirm and
ratify the Distribution Agreement.

6. This Amendment No. 3 may be executed in two or more counterparts,
each of which shall be an original and all of which together shall constitute
one instrument.

IN WITNESS WHEREOF, the undersigned have executed this Amendment No. 3
as of the date first above written.

FUNDS DISTRIBUTOR, INC.

By: /s/ Marie E. Connolly
Name: Marie E. Connolly
Title: President and CEO

AMERICAN CENTURY CALIFORNIA TAX-FREE AND MUNICIPAL FUNDS
AMERICAN CENTURY CAPITAL PORTFOLIOS, INC.
AMERICAN CENTURY GOVERNMENT INCOME TRUST
AMERICAN CENTURY INTERNATIONAL BOND FUNDS
AMERICAN CENTURY INVESTMENT TRUST
AMERICAN CENTURY MUNICIPAL TRUST
AMERICAN CENTURY MUTUAL FUNDS, INC.
AMERICAN CENTURY PREMIUM RESERVES, INC.
AMERICAN CENTURY QUANTITATIVE EQUITY FUNDS
AMERICAN CENTURY STRATEGIC ASSET ALLOCATIONS, INC.
AMERICAN CENTURY TARGET MATURITIES TRUST
AMERICAN CENTURY VARIABLE PORTFOLIOS, INC.
AMERICAN CENTURY WORLD MUTUAL FUNDS, INC.

By: /s/ David C. Tucker
David C. Tucker
Vice President of each of the Issuers
<PAGE>
SCHEDULE A

<TABLE>
Companies and Funds Covered by this Distribution Agreement
Fund Date of Agreement

<S> <C> <C>
AMERICAN CENTURY CALIFORNIA TAX-FREE AND MUNICIPAL FUNDS
0 Benham California Municipal Money Market Fund January 15, 1998
0 Benham California High-Yield Municipal Fund January 15, 1998
0 Benham California Tax-Free Money Market Fund January 15, 1998
0 Benham California Limited Term Tax-Free Fund January 15, 1998
0 Benham California Intermediate-Term Tax-Free Fund January 15, 1998
0 Benham California Long-Term Tax-Free Fund January 15, 1998
0 Benham California Insured Tax-Free Fund January 15, 1998

AMERICAN CENTURY CAPITAL PORTFOLIOS, INC.
0 American Century Equity Income Fund January 15, 1998
0 American Century Real Estate Fund January 15, 1998
0 American Century Value Fund January 15, 1998
0 American Century Small Cap Value Fund July 30, 1998
0 American Century Equity Index Fund January 29, 1999

AMERICAN CENTURY GOVERNMENT INCOME TRUST
0 Benham Short-Term Treasury Fund January 15, 1998
0 Benham Intermediate-Term Treasury Fund January 15, 1998
0 Benham Long-Term Treasury Fund January 15, 1998
0 Benham Government Agency Money Market Fund January 15, 1998
0 Benham Short-Term Government Fund January 15, 1998
0 Benham GNMA Fund January 15, 1998
0 Benham Inflation-Adjusted Treasury Fund January 15, 1998
0 Benham Capital Preservation Fund January 15, 1998

AMERICAN CENTURY INTERNATIONAL BOND FUNDS
0 Benham International Bond Fund January 15, 1998

AMERICAN CENTURY INVESTMENT TRUST
0 Benham Prime Money Market Fund January 15, 1998

AMERICAN CENTURY MUNICIPAL TRUST
0 Benham Arizona Intermediate-Term Municipal Fund January 15, 1998
0 Benham Florida Municipal Money Market Fund January 15, 1998
0 Benham Florida Intermediate-Term Municipal Fund January 15, 1998
0 Benham Tax-Free Money Market Fund January 15, 1998
0 Benham Intermediate-Term Tax-Free Fund January 15, 1998
0 Benham Long-Term Tax-Free Fund January 15, 1998
0 Benham Limited-Term Tax-Free Fund January 15, 1998
0 Benham High-Yield Municipal Fund March 31, 1998

AMERICAN CENTURY MUTUAL FUNDS, INC.
0 American Century Balanced Fund January 15, 1998
0 Twentieth Century Growth Fund January 15, 1998
0 Twentieth Century Heritage Fund January 15, 1998
0 Benham Intermediate-Term Bond Fund January 15, 1998
0 Benham Limited-Term Bond Fund January 15, 1998
0 Benham Bond Fund January 15, 1998
0 Twentieth Century Select Fund January 15, 1998
0 Twentieth Century Ultra Fund January 15, 1998
0 Twentieth Century Vista Fund January 15, 1998
0 Twentieth Century Giftrust January 15, 1998
0 Twentieth Century New Opportunities Fund January 15, 1998
0 Benham High Yield Fund January 15, 1998
0 American Century Tax-Managed Value Fund February 15, 1999

AMERICAN CENTURY PREMIUM RESERVES, INC.
0 Benham Premium Government Reserve Fund January 15, 1998
0 Benham Premium Capital Reserve Fund January 15, 1998
0 Benham Premium Managed Bond Fund January 15, 1998

AMERICAN CENTURY QUANTITATIVE EQUITY FUNDS
0 American Century Equity Growth Fund January 15, 1998
0 American Century Income & Growth Fund January 15, 1998
0 American Century Global Gold Fund January 15, 1998
0 American Century Global Natural Resources Fund January 15, 1998
0 American Century Utilities Fund January 15, 1998
0 American Century Small Cap Quantitative Fund July 30, 1998

AMERICAN CENTURY STRATEGIC ASSET ALLOCATIONS, INC.
0 American Century Strategic Allocation: Aggressive January 15, 1998
0 American Century Strategic Allocation: Conservative January 15, 1998
0 American Century Strategic Allocation: Moderate January 15, 1998

AMERICAN CENTURY TARGET MATURITIES TRUST
0 Benham Target Maturities Trust: 2000 January 15, 1998
0 Benham Target Maturities Trust: 2005 January 15, 1998
0 Benham Target Maturities Trust: 2010 January 15, 1998
0 Benham Target Maturities Trust: 2015 January 15, 1998
0 Benham Target Maturities Trust: 2020 January 15, 1998
0 Benham Target Maturities Trust: 2025 January 15, 1998

AMERICAN CENTURY VARIABLE PORTFOLIOS, INC.
0 American Century VP Advantage January 15, 1998
0 American Century VP Balanced January 15, 1998
0 American Century VP Capital Appreciation January 15, 1998
0 American Century VP International January 15, 1998
0 American Century VP Income & Growth January 15, 1998
0 American Century VP Value January 15, 1998

AMERICAN CENTURY WORLD MUTUAL FUNDS, INC.
0 Twentieth Century Emerging Markets Fund January 15, 1998
0 Twentieth Century International Growth Fund January 15, 1998
0 Twentieth Century International Discovery Fund January 15, 1998
0 Twentieth Century Global Growth Fund December 1, 1998
<PAGE>
SCHEDULE B

Investor Class Funds
Fund Date of Agreement

AMERICAN CENTURY CALIFORNIA TAX-FREE AND MUNICIPAL FUNDS
0 Benham California Municipal Money Market Fund January 15, 1998
0 Benham California High-Yield Municipal Fund January 15, 1998
0 Benham California Tax-Free Money Market Fund January 15, 1998
0 Benham California Limited Term Tax-Free Fund January 15, 1998
0 Benham California Intermediate-Term Tax-Free Fund January 15, 1998
0 Benham California Long-Term Tax-Free Fund January 15, 1998
0 Benham California Insured Tax-Free Fund January 15, 1998

AMERICAN CENTURY CAPITAL PORTFOLIOS, INC.
0 American Century Equity Income Fund1 January 15, 1998
0 American Century Real Estate Fund1 January 15, 1998
0 American Century Value Fund1 January 15, 1998
0 American Century Small Cap Value Fund July 30, 1998
0 American Century Equity Index Fund1 January 29, 1999

AMERICAN CENTURY GOVERNMENT INCOME TRUST
0 Benham Short-Term Treasury Fund1 January 15, 1998
0 Benham Intermediate-Term Treasury Fund1 January 15, 1998
0 Benham Long-Term Treasury Fund1 January 15, 1998
0 Benham Government Agency Money Market Fund1 January 15, 1998
0 Benham Short-Term Government Fund1 January 15, 1998
0 Benham GNMA Fund1 January 15, 1998
0 Benham Inflation-Adjusted Treasury Fund1 January 15, 1998
0 Benham Capital Preservation Fund January 15, 1998

AMERICAN CENTURY INTERNATIONAL BOND FUNDS
0 Benham International Bond Fund1 January 15, 1998

AMERICAN CENTURY INVESTMENT TRUST
0 Benham Prime Money Market Fund1 June 1, 1998

0 AMERICAN CENTURY MUTUAL FUNDS, INC.

0 American Century Balanced Fund1 January 15, 1998
0 Twentieth Century Growth Fund1 January 15, 1998
0 Twentieth Century Heritage Fund1 January 15, 1998
0 Benham Intermediate-Term Bond Fund1 January 15, 1998
0 Benham Limited-Term Bond Fund1 January 15, 1998
0 Benham Bond Fund1 January 15, 1998
0 Twentieth Century Select Fund1 January 15, 1998
0 Twentieth Century Ultra Fund1 January 15, 1998
0 Twentieth Century Vista Fund1 January 15, 1998
0 Twentieth Century Giftrust January 15, 1998
0 Twentieth Century New Opportunities Fund January 15, 1998
0 Benham High Yield Fund January 15, 1998
0 American Century Tax-Managed Value Fund February 15, 1999

AMERICAN CENTURY PREMIUM RESERVES, INC.
0 Benham Premium Government Reserve Fund January 15, 1998
0 Benham Premium Capital Reserve Fund January 15, 1998
0 Benham Premium Bond Fund January 15, 1998

AMERICAN CENTURY QUANTITATIVE EQUITY FUNDS
0 American Century Equity Growth Fund1 January 15, 1998
0 American Century Income & Growth Fund1 January 15, 1998
0 American Century Global Gold Fund1 January 15, 1998
0 American Century Global Natural Resources Fund1 January 15, 1998
0 American Century Utilities Fund1 January 15, 1998
0 American Century Small Cap Quantitative Fund1 July 30, 1998

AMERICAN CENTURY STRATEGIC ASSET ALLOCATIONS, INC.
0 American Century Strategic Allocation: Aggressive1 January 15, 1998
0 American Century Strategic Allocation: Conservative1 January 15, 1998
0 American Century Strategic Allocation: Moderate1 January 15, 1998

AMERICAN CENTURY TARGET MATURITIES TRUST
0 Benham Target Maturities Trust: 20001 January 15, 1998
0 Benham Target Maturities Trust: 20051 January 15, 1998
0 Benham Target Maturities Trust: 20101 January 15, 1998
0 Benham Target Maturities Trust: 20151 January 15, 1998
0 Benham Target Maturities Trust: 20201 January 15, 1998
0 Benham Target Maturities Trust: 20251 January 15, 1998

AMERICAN CENTURY WORLD MUTUAL FUNDS, INC.
0 Twentieth Century Emerging Markets Fund1 January 15, 1998
0 Twentieth Century International Growth Fund1 January 15, 1998
0 Twentieth Century International Discovery Fund1 January 15, 1998
0 Twentieth Century Global Growth Fund1 December 1, 1998

- --------
1 Multiple Classes of Shares
<PAGE>

SCHEDULE C

Institutional Class Funds

Fund Date of Agreement

AMERICAN CENTURY MUTUAL FUNDS, INC.
0 American Century Balanced Fund January 15, 1998
0 Twentieth Century Growth Fund January 15, 1998
0 Twentieth Century Heritage Fund January 15, 1998
0 Twentieth Century Select Fund January 15, 1998
0 Twentieth Century Ultra Fund January 15, 1998
0 Twentieth Century Vista Fund January 15, 1998
0 American Century Tax-Managed Value Fund February 15, 1999

AMERICAN CENTURY QUANTITATIVE EQUITY FUNDS
0 American Century Equity Growth Fund January 15, 1998
0 American Century Income & Growth Fund January 15, 1998
0 American Century Small Cap Quantitative Fund July 30, 1998

Service Class Funds
Fund Date of Agreement

AMERICAN CENTURY CAPITAL PORTFOLIOS, INC.
0 American Century Equity Income Fund January 15, 1998
0 American Century Real Estate Fund January 15, 1998
0 American Century Value Fund January 15, 1998

Advisor Class Funds

Fund Date of Agreement

AMERICAN CENTURY CAPITAL PORTFOLIOS, INC.
0 American Century Equity Income Fund January 15, 1998
0 American Century Value Fund January 15, 1998
0 American Century Real Estate Fund January 15, 1998
0 American Century Small Cap Value Fund July 30, 1998

AMERICAN CENTURY INTERNATIONAL BOND FUNDS
0 Benham International Bond Fund January 15, 1998

AMERICAN CENTURY MUTUAL FUNDS, INC.
0 American Century Balanced Fund January 15, 1998
0 Twentieth Century Growth Fund January 15, 1998
0 Twentieth Century Heritage Fund January 15, 1998
0 Benham Intermediate-Term Bond Fund January 15, 1998
0 Benham Limited-Term Bond Fund January 15, 1998
0 Benham Bond Fund January 15, 1998
0 Twentieth Century Select Fund January 15, 1998
0 Twentieth Century Ultra Fund January 15, 1998
0 Twentieth Century Vista Fund January 15, 1998
0 Benham High Yield Fund January 15, 1998
0 American Century Tax-Managed Value Fund February 15, 1999

AMERICAN CENTURY INVESTMENT TRUST
0 Benham Prime Money Market Fund June 1, 1998
</TABLE>

Charles A. Etherington
Attorney at Law
4500 Main Street * P.O. Box 418210
Kansas City, Missouri 64141-9210

January 15, 1999

American Century Variable Portfolios, Inc.
American Century Tower
4500 Main Street
Kansas City, Missouri 64111

Ladies and Gentlemen:

As counsel to American Century Variable Portfolios, Inc. (the
"Corporation"), I am generally familiar with its affairs. Based upon this
familiarity, and upon the examination of such documents as I deemed relevant, it
is my opinion that the shares of the Corporation described in Post-Effective
Amendment No. 24 to its Registration Statement on Form N-1A, to be filed with
the Securities and Exchange Commission on January 15, 1999, will, when issued,
be validly issued, fully paid and nonassessable.

For the record, it should be stated that I am an officer of American
Century Services Corporation, an affiliated corporation of American Century
Investment Management, Inc., the investment advisor of the Corporation.

I hereby consent to the use of this opinion as an exhibit to Post-
Effective Amendment No. 24.

Very truly yours,

/s/Charles A. Etherington
Charles A. Etherington

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that the undersigned, American Century
Variable Portfolios, Inc., hereinafter called the "Corporation", and certain
directors and officers of the Corporation, do hereby constitute and appoint
George A. Rio, Patrick A. Looby, Charles A. Etherington, David H. Reinmiller,
and Charles C.S. Park, and each of them individually, their true and lawful
attorneys and agents to take any and all action and execute any and all
instruments which said attorneys and agents may deem necessary or advisable to
enable the Corporation to comply with the Securities Act of 1933 and/or the
Investment Company Act of 1940, as amended, and any rules, regulations, orders,
or other requirements of the United States Securities and Exchange Commission
thereunder, in connection with the registration under the Securities Act of 1933
and/or the Investment Company Act of 1940, as amended, including specifically,
but without limitation of the foregoing, power and authority to sign the name of
the Corporation in its behalf and to affix its corporate seal, and to sign the
names of each of such directors and officers in their capacities as indicated,
to any amendment or supplement to the Registration Statement filed with the
Securities and Exchange Commission under the Securities Act of 1933 and/or the
Investment Company Act of 1940, as amended, and to any instruments or documents
filed or to be filed as a part of or in connection with such Registration
Statement; and each of the undersigned hereby ratifies and confirms all that
said attorneys and agents shall do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, the Corporation has caused this Power to be
executed by its duly authorized officers on this the 25th day of July, 1998.

AMERICAN CENTURY VARIABLE PORTFOLIOS, INC.

By:/s/ George A. Rio
George A. Rio, President

SIGNATURE AND TITLE

/s/ George A. Rio /s/ Robert W. Doering
George A. Rio Robert W. Doering, M.D.
President, Principal Executive and Principal Director
Financial Officer

/s/ Maryanne Roepke /s/ Andrea C. Hall
Maryanne Roepke Andrea C. Hall, Ph.D.
Vice President and Treasurer Director

/s/ James E. Stowers, Jr. /s/ Donald H. Pratt
James E. Stowers, Jr. Donald H. Pratt
Director Director

/s/ James E. Stowers III /s/ Lloyd T. Silver
James E. Stowers III Lloyd T. Silver
Director Director

/s/ Thomas A. Brown /s/ M. Jeannine Strandjord
Thomas A. Brown M. Jeannine Strandjord
Director Director

Attest: /s/ D. D. Hock
D.D. ("Del") Hock
By: /s/ Patrick A. Looby Director
Patrick A. Looby, Secretary

<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
SEMI-ANNUAL REPORT OF AMERICAN CENTURY VARIABLE PORTFOLIOS, INC. AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH REPORT.
</LEGEND>
<CIK> 0000814680
<NAME> AMERICAN CENTURY VARIABLE PORTFOLIOS, INC.
<SERIES>
<NUMBER> 1
<NAME> AMERICAN CENTURY VP CAPITAL APPRECIATION

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