AMERICAN CENTURY QUANTITATIVE EQUITY FUNDS, N-30D, 1998-02-24

AMERICAN CENTURY QUANTITATIVE EQUITY FUNDS
N-30D, 1998-02-24

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ANNUAL
REPORT

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

DECEMBER 31, 1997

AMERICAN
CENTURY
GROUP

Equity Growth
Income & Growth

TABLE OF CONTENTS

Report Highlights ......................................................... 1
Our Message to You ........................................................ 2
Market Perspective ........................................................ 3
Equity Growth
Performance & Portfolio Information ............................ 4
Management Q & A ............................................... 5
Schedule of Investments ........................................ 9
Financial Highlights ........................................... 29
Income & Growth
Performance & Portfolio Information ............................ 13
Management Q & A ............................................... 14
Schedule of Investments ........................................ 17
Financial Highlights ........................................... 30
Statements of Assets and Liabilities ...................................... 22
Statements of Operations .................................................. 23
Statements of Changes in Net Assets ....................................... 24
Notes to Financial Statements ............................................. 25
Report of Independent Accountants ......................................... 31
Share Class and Retirement
Account Information ....................................................... 32
Background Information
Investment Philosophy & Policies ............................... 36
Comparative Indices ............................................ 36
Lipper Rankings ................................................ 36
Investment Team Leaders ........................................ 36
Glossary .................................................................. 37

American Century Investments offers you nearly 70 fund choices covering
stocks, bonds, money markets, specialty investments and blended portfolios.
We've organized our funds into three distinct groups, based on investment style
and objectives, to help simplify your fund decisions. These groups appear below.

AMERICAN CENTURY INVESTMENTS--FAMILY OF FUNDS
- -------------------------------------------------------------------------------
Benham American Century Twentieth Century(reg. tm)
Group(reg. tm) Group Group
- -------------------------------------------------------------------------------
MONEY MARKET FUNDS ASSET ALLOCATION & GROWTH FUNDS
GOVERNMENT BOND FUNDS BALANCED FUNDS INTERNATIONAL FUNDS
DIVERSIFIED BOND FUNDS CONSERVATIVE EQUITY FUNDS
MUNICIPAL BOND FUNDS SPECIALTY FUNDS
- -------------------------------------------------------------------------------
Equity Growth
Income & Growth

We welcome your comments or questions about this report.

See the back cover for ways to contact us by mail, phone or e-mail.

American Century and Benham Group are registered marks of American Century
Services Corporation.

AMERICAN CENTURY INVESTMENTS

REPORT HIGHLIGHTS

MARKET PERSPECTIVE

* Reflecting continued strong economic growth, U.S. stocks produced healthy
returns for the third straight year.

* The S&P 500 (a large-cap stock index) returned more than 33% in 1997, while
the Russell 2000 (a small-cap stock index) returned about 22%.

* Large-cap stocks dominated the market in the first half of the year as
investors flocked to a handful of large multinational companies that have
traditionally provided predictable earnings.

* The last half of 1997 was characterized by increased market volatility
resulting from a financial crisis in Asia and earnings disappointments from
large multinationals.

* Financial stocks were the top performers for the year, while precious metals
stocks posted the biggest losses.

EQUITY GROWTH

* The fund was among the 10% of all stock funds that outperformed the S&P 500
in 1997. It also beat the average growth fund (according to Lipper
Analytical Services).

* Remaining fully invested in stocks and diversifying across a variety of
industries contributed to the fund's strong performance.

* Our stock-ranking model emphasized financial and energy stocks, which
performed well throughout the year.

* The model steered us away from the large multinationals that drove the
market early in the year, a strategy that paid off when these stocks later
declined.

* Looking ahead, the Southeast Asian crisis will probably slow U.S. corporate
earnings growth modestly, but economic conditions remain favorable for U.S.
stocks.

* We plan to focus on financial and manufacturing stocks while avoiding
healthcare and consumer services.

INCOME & GROWTH

* The fund was among the 10% of all stock funds that outperformed the S&P 500
in 1997. It also beat the average growth and income fund (according to
Lipper Analytical Services).

* Remaining fully invested in stocks and diversifying across a variety of
industries contributed to the fund's strong performance.

* Our stock-ranking model emphasized financial and telecommunications stocks,
which performed well throughout the year and provided attractive yields.

* The model steered us away from the large multinationals that drove the
market early in the year, a strategy that paid off when these stocks later
declined.

* Looking ahead, the Southeast Asian crisis will probably slow U.S. corporate
earnings growth modestly, but economic conditions remain favorable for U.S.
stocks.

* We plan to maintain our focus on financial and telecommunications stocks
while avoiding pharmaceuticals and consumer services.

EQUITY GROWTH
INVESTOR CLASS(1)

TOTAL RETURNS: AS OF 12/31/97
6 Months 16.40%(2)
1 Year 36.06%

NET ASSETS: $773.4 million
(AS OF 12/31/97)

INCEPTION DATE: 5/9/91

TICKER SYMBOL: BEQGX

INCOME & GROWTH
INVESTOR CLASS(1)

TOTAL RETURNS: AS OF 12/31/97
6 Months 14.15%(2)
1 Year 34.52%

NET ASSETS: $1.8 billion
(AS OF 12/31/97)

INCEPTION DATE: 12/17/90

TICKER SYMBOL: BIGRX

(1) See Share Classes, page 32.

(2) Not annualized.

Many of the investment terms in this report are defined in the Glossary on page
37.

ANNUAL REPORT REPORT HIGHLIGHTS 1

OUR MESSAGE TO YOU

[photo of James E. Stowers III and James M. Benham]

In 1997, American Century Equity Growth and Income & Growth funds provided
high returns for their investors. Both funds outperformed the S&P 500 and the
majority of their mutual fund peers for the year. The funds' strong performance
earned them high marks in U.S. News & World Report's 1998 Mutual Funds
Guide--Income & Growth made the guide's "honor roll of equity funds" in the
equity income category, and both Equity Growth and Income & Growth were listed
among the guide's "Best Mutual Funds."

The funds, and the stock market as a whole, performed well despite an
unusually volatile year. A strong economy, low interest rates, benign inflation
and a continuing stream of assets flowing into stocks helped produce the U.S.
stock market's third year of exceptional returns. In fact, 1995-1997 marked one
of the best three-year performance records in the history of the S&P 500.

Although we believe a fourth year of similar returns is unlikely, the U.S.
economy is very healthy, and that should continue to benefit stocks.

On the corporate front, the past year was an eventful one for American
Century. A major focus during the latter half of the year was the negotiation of
a business partnership with J.P. Morgan & Co., which became a significant
minority shareholder in American Century on January 15, 1998.

On a more personal note, 1997 was the year we said farewell to James M.
Benham, founder of the Benham Group of mutual funds. Mr. Benham, who announced
his retirement in December, was a pioneer in the no-load mutual fund industry
and the father of Capital Preservation Fund, the first money market fund for
individual investors. With the integration of Benham and Twentieth Century
successfully completed, Mr. Benham felt it was time to step back from the
business and enjoy a well-earned retirement, confident that he leaves the funds
he founded in very capable hands. Much of the Benham culture has become a part
of American Century, including the educational investor seminar program Mr.
Benham created. Two of his sons, Jim A. Benham and Tim Benham, remain with the
company to carry on the Benham tradition.

Looking forward, 1998 marks the 40th year since American Century launched
its first mutual funds. Not many fund companies can claim a 40-year track
record, or a fund family that includes nearly 70 stock, bond, money market and
combination funds that provide investors with such a wide range of choice and
flexibility.

Whatever your financial goals, we believe American Century has an
outstanding lineup of funds to help you reach them.

Sincerely,

/s/James E. Stowers III /s/James M. Benham
James E. Stowers III James M. Benham
Chief Executive Officer Vice Chairman
American Century Investment American Century Investment
Management, Inc. Management, Inc.

2 OUR MESSAGE TO YOU AMERICAN CENTURY INVESTMENTS

MARKET PERSPECTIVE

U.S. STOCKS POST STRONG RETURNS

U.S. stocks produced healthy returns in 1997, reflecting continued robust
economic growth. The latest U.S. economic expansion reached 82 months at the end
of the year, making it the third longest since World War II. The combination of
a healthy economy and low inflation helped the S&P 500, a broad index of
large-company stocks, post a return of more than 20% for the third straight
year. Though it trailed the S&P 500, the Russell 2000 Index, which is dominated
by small-company stocks, also returned more than 20% for the year (see the
accompanying chart).

A TALE OF TWO MARKETS

In the first seven months of the year, the major U.S. stock indexes surged
ahead thanks to a select group of large-company stocks that dominated the market
in 1996. Investors flocked to a handful of large multinational companies with
traditionally predictable earnings and a high degree of liquidity (meaning
they're easy to buy and sell), such as Coca-Cola, Microsoft, Procter & Gamble,
and IBM.

The strong performance of these stocks propelled the S&P 500 to a 30% gain
in the first seven months of 1997. With all the attention on the large-cap
sector of the market, small-cap stocks didn't fare as well. Despite favorable
earnings growth, small-company stocks--represented by the Russell 2000--returned
only half as much as the S&P 500.

GREATER VOLATILITY

The last five months of 1997 saw a completely different market from the
first half of the year. In August, earnings disappointments from Coca-Cola and
Gillette caused investors to begin questioning the high valuations of the large
multinational stocks that had been so popular. As other large companies followed
with similar announcements, investor confidence waned, sending the S&P 500 down
nearly 6% in August.

Stock prices resumed their upward move in September, but the gains of
small-cap stocks exceeded those of large-company stocks as investors found more
value in smaller companies.

October saw yet another reversal as the market reacted to news of currency
devaluations across Southeast Asia. Stock markets plummeted throughout the
region, and investor concerns in the U.S. grew when panic selling spread to Hong
Kong and affected European markets. The S&P 500 dropped 3.5% in October, and the
Russell 2000 fell 4.4%. The decline was driven by fears that the sell-off
overseas would translate into reduced corporate profits in 1998 for U.S.
multinational companies and for technology companies dependent upon economic
expansion in Asia.

By the end of 1997, day-to-day market volatility had increased dramatically
compared with the beginning of the year. As a result, investors began to revisit
large-company stocks as a potential "safe haven" from wide market fluctuations.

INDUSTRY PERFORMANCE

Financial stocks, including insurance, banking and financial services
companies, were the top performers in 1997. Heavy merger-and-acquisition
activity and strong bond market performance in the latter half of the year
boosted these stocks. Precious metals stocks were the biggest losers as the
price of gold fell to an 18-year low.

[line graph - data below]

S&P 500 vs RUSSELL 2000 (Growth of $1.00)
Value on 12/31/97

S&P 500 Russell 2000
12/31/96 $1.00 $1.00
1/31/97 $1.06 $1.02
2/28/97 $1.07 $1.00
3/31/97 $1.03 $0.95
4/30/97 $1.09 $0.95
5/31/97 $1.15 $1.06
6/30/97 $1.21 $1.10
7/31/97 $1.30 $1.15
8/31/97 $1.23 $1.18
9/30/97 $1.30 $1.27
10/31/97 $1.25 $1.21
11/30/97 $1.31 $1.20
12/31/97 $1.33 $1.22

S&P 500 33.36%
Russell 2000 22.24%

Source: Bloomberg Financial Markets

ANNUAL REPORT MARKET PERSPECTIVE 3

<TABLE>
<CAPTION>
EQUITY GROWTH

- ------------------------------------------------------------------------------------------------------------------------
ADVISOR CLASS (inception 10/9/97)
Equity Growth ....................................................................................... -0.50%
S&P 500 ............................................................................................. 0.39%
</TABLE>

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

(2) According to Lipper Analytical Services.

See pages 32, 36 and 37 for more information about returns, share classes, the
comparative index and Lipper fund rankings.

[mountain grpah - data below]

GROWTH OF $10,000 OVER LIFE OF FUND (Investor Class)
$10,000 investment made 5/9/91

Value on 12/31/97
Equity Growth S & P 500
5/9/91 (INCEP) $10,000 $10,000
06/30/91 $9,640 $9,769
09/30/91 $10,379 $10,291
12/31/91 $11,748 $11,147
03/31/92 $11,129 $10,867
06/30/92 $10,923 $11,074
09/30/92 $11,291 $11,423
12/31/92 $12,233 $11,995
03/31/93 $12,774 $12,518
06/30/93 $12,999 $12,577
09/30/93 $13,698 $12,901
12/31/93 $13,630 $13,199
03/31/94 $12,997 $12,703
06/30/94 $13,178 $12,757
09/30/94 $13,680 $13,380
12/31/94 $13,599 $13,378
03/31/95 $14,866 $14,677
06/30/95 $16,299 $16,073
09/30/95 $17,322 $17,347
12/31/95 $18,299 $18,388
03/31/96 $19,448 $19,374
06/30/96 $20,248 $20,239
09/30/96 $21,170 $20,861
12/31/96 $23,302 $22,603
03/31/97 $23,618 $23,213
06/30/97 $27,239 $27,261
09/30/97 $30,938 $29,289
12/31/97 $31,705 $30,127

Past performance does not guarantee future results. Investment return and
principal value will fluctuate, and redemption value may be more or less than
original cost.

Data quoted is for Investor Class only; performance for the other class will
vary due to differences in fee structures (see the Total Returns table above).

The line representing the fund's total return includes operating expenses (such
as transaction costs and management fees) that reduce returns, while the index's
total return line does not.

PORTFOLIO AT A GLANCE
12/31/97 12/31/96
Number of Companies 165 151
Dividend Yield 1.87% 1.92%
Price/Earnings Ratio 16.8 16.1
Portfolio Turnover 161% 131%
Expense Ratio (Investor Class) 0.67% 0.63%

4 EQUITY GROWTH AMERICAN CENTURY INVESTMENTS

EQUITY GROWTH

MANAGEMENT Q & A

An interview with Jeff Tyler and Bill Martin, portfolio managers on the
Equity Growth fund investment team.

NOTE: All fund performance figures referenced in this interview are for
Investor Class shares.

HOW DID THE FUND PERFORM IN 1997?

The fund posted a total return of 36.06%, outperforming the 33.36% return of
the S&P 500 and the 25.17% average return of the 834 "Growth Funds" tracked by
Lipper Analytical Services. The fund's 1997 return ranked it in the top 6% of
Lipper's growth funds category, and it was among the 10% of all domestic stock
funds that beat the S&P 500 for the year, according to Lipper. (See the Total
Returns table on the previous page for other performance comparisons.)

WHY WAS THE FUND'S PERFORMANCE SO STRONG COMPARED WITH THE S&P 500 AND THE
AVERAGE GROWTH FUND?

We adhere to a couple of basic principles that were especially beneficial in
1997. First, we keep the fund fully invested in U.S. stocks--always a good
policy when the overall market rises. Second, we diversify the portfolio across
a variety of industries. This gives the fund balance and stability, which are
favorable characteristics during periods of increased market volatility.

But the main reason was our stock-ranking model, which put us in the right
places at the right times. It also helped us avoid sectors of the market that
struggled in the last half of the year.

[bar graph - data below]

EQUITY GROWTH'S ONE-YEAR RETURNS SINCE INCEPTION(1)
(Periods ended December 31)

Equity Growth S&P 500
12/91(2) 17.48% 11.47%
12/92 4.13% 7.61%
12/93 11.42% 10.03%
12/94 -0.23% 1.36%
12/95 34.56% 37.44%
12/96 27.34% 22.93%
12/97 36.06% 33.36%

This graph illustrates the fund's returns since its inception and compares them
with the index's returns. The fund's total returns include operating expenses,
while the index's returns do not. See page 36 for a description of the index.

Past performance is no guarantee of future results. Investment return and
principal value will fluctuate, and redemption value may be more or less than
original cost.

(1) Investor Class.

(2) Return from the fund's 5/9/91 inception date to 12/31/91.

ANNUAL REPORT EQUITY GROWTH 5

EQUITY GROWTH

CAN YOU GIVE SOME EXAMPLES OF AREAS YOU AVOIDED?

One of the many factors our stock-ranking model takes into consideration is
a stock's value--whether it appears underpriced based on the company's earnings
growth, business fundamentals or intrinsic value. It was this component of the
model that led us to avoid most of the large multinational stocks that drove the
market in 1996 and early 1997. Although these stocks had attractive earnings
growth, their prices were far from reasonable--some were trading at more than 40
times their earnings, compared to a market average of around 20.

This strategy was a drag on performance in the first half of 1997 because
these stocks remained popular with investors. But we stuck with our discipline
and were rewarded when large multinationals slid during the last six months of
the year.

We also moved away from the technology sector. Many technology stocks had
risen to the point where we felt they were overvalued and vulnerable to a
decline if their earnings growth slowed. Sure enough, the Southeast Asian crisis
hurt earnings in this sector, and many tech stocks suffered steep declines.

We sold many of our technology stocks at mid-year. For example, Intel, a
semiconductor manufacturer, was listed as our biggest holding in the fund's
semiannual report in June. By the end of 1997, we no longer held any Intel
stock.

WHERE DID YOU INVEST THESE ASSETS INSTEAD?

We shifted into telecommunications stocks, which were trading at undervalued
prices. At mid-year, the market had yet to recognize the substantial growth
potential of these companies. In addition, mergers and acquisitions helped put
many telecommunications companies in a better competitive position.

In the last half of the year, telephone stocks like Ameritech, Bell Atlantic
and BellSouth (a top ten holding) returned more than 20%.

WHAT OTHER "RIGHT PLACES" DID YOUR STOCK-PICKING MODEL IDENTIFY?

We emphasized financial stocks, which had the best returns of any sector of
the market in 1997. Banking, insurance and financial services were among the
fund's largest industry holdings all year. Economic conditions--solid growth and
low inflation--were ideal for financial companies, and lower interest rates
boosted their earnings. The financial sector finished the year with a 44% return
despite fading at year-end because of concerns about its exposure to Southeast
Asia.

We also held energy stocks, including both large oil producers and smaller
service companies that provide equipment and supplies for oil drilling rigs. The
strong expansion of the global economy during much of 1997 led to increased
demand for oil and gasoline. We've cut back on our holdings since the end of the
year because the Asian crisis has weakened global demand and hurt oil prices.

TOP TEN HOLDINGS % of fund investments

As of As of
12/31/97 6/30/97

Ford Motor Co. 4.2% 2.7%
Morgan Stanley, Dean Witter,
Discover & Co. 4.0% 0.7%
Unilever N.V. 3.8% --
Chevron Corp. 3.4% 0.9%
First Union Corp. 2.7% 1.5%
Microsoft Corp. 2.7% 0.9%
United Technologies Corp. 2.6% --
BellSouth Corp. 2.5% 0.4%
Lucent Technologies Inc. 2.3% --
Schlumberger Ltd. 2.1% 2.0%

6 EQUITY GROWTH AMERICAN CENTURY INVESTMENTS

EQUITY GROWTH

WERE THERE ANY INVESTMENT DECISIONS THAT HURT FUND PERFORMANCE DURING THE YEAR?

In a fairly large, diversified portfolio of stocks, there are going to be
winners and losers. A good example of the latter is United Technologies, one of
the fund's top ten holdings. This company is a conglomerate that, among other
things, manufactures and installs elevators, air-conditioning systems and
aircraft engines. We began purchasing shares of United Technologies in July
because it had steady and consistent earnings growth, and its shares were
trading at an undervalued price--about 15 times their earnings.

However, the company does a large proportion of its business in Asia, and
after that crisis developed, the market punished stocks that rely on Asia for a
significant portion of their revenues. Our model still likes the company's
prospects, but we have reduced our holdings.

We also stayed away from some industries that ended up producing strong
returns. Our model's value component kept us out of beverage and media stocks,
which we felt were too expensive. Both of these industries performed very well
in 1997.

THE FUND'S TURNOVER RATE (THE PERCENTAGE OF THE FUND'S PORTFOLIO THAT CHANGES
DURING THE YEAR) WAS UNUSUALLY HIGH IN 1997--ABOUT 160%, COMPARED TO AN AVERAGE
OF AROUND 125% IN THE PAST FEW YEARS. WHY?

The high turnover rate was an unfortunate byproduct of the tremendous asset
growth the fund experienced in 1997. The fund tripled its size, adding $500
million in assets. As money came in, we rebalanced the portfolio to retain its
diversification, and that led to the higher turnover rate.

We're sensitive to high turnover because we prefer to limit transaction
costs and taxable distributions for our shareholders. As a result, we plan to
focus on lowering fund turnover in 1998. However, continued asset growth would
make that goal more challenging.

LOOKING AHEAD, WHAT EFFECTS DO YOU THINK THE SOUTHEAST ASIAN FINANCIAL MELTDOWN
WILL HAVE IN THE U.S.?

The situation is pretty uncertain. I don't mean to be evasive; it's just a
reflection of the complicated web of global business.

The problems in Asia will probably have a slight negative effect on the U.S.
economy. Our trade deficit with Asia is likely to widen--exports to the region
will diminish or be postponed, while imports from Southeast Asia will increase.
These imports will also be cheaper, partly because of weak Asian currencies and
partly because of heavy volume from Asia's overbuilt manufacturing facilities.
On the plus side, cheaper imports should help keep U.S. inflation low in 1998.

But it's important not to overstate the economic impact. If you exclude
China and Japan, Asia accounts for a small part of the global economy, so we
think the effects of no growth in this region will not be huge. In addition, if
Japan is successful in reviving its economy, it could balance out the lack of
growth in the rest of Asia.

For U.S. businesses, the Asian crisis will likely depress earnings modestly,
though some companies will be hurt more than others. Companies that depend on
Asia for sales growth will get the worst of it, while those that get their raw
materials or source products from the region will actually benefit from lower
prices. But it will probably take the first half of

TOP FIVE INDUSTRIES % of fund investments

As of As of
12/31/97 6/30/97

Financial Services 9.6% 4.4%
Energy (Production & Marketing) 7.9% 5.3%
Banking 7.8% 8.9%
Automobiles & Auto Parts 6.2% 5.6%
Communications Services 5.7% 5.1%

ANNUAL REPORT EQUITY GROWTH 7

EQUITY GROWTH

1998 to sort out the full impact of the Asian crisis, so we're likely to see
continued volatility in the U.S. stock market.

DOES THIS MEAN A TOUGH YEAR AHEAD FOR U.S. STOCKS?

Not necessarily. While we certainly can't count on the 20-plus% returns
we've seen the last three years, the outlook for stocks is still fairly good. We
expect U.S. corporate earnings to continue to grow, though at a slower pace than
in 1997.

In addition, economic conditions should remain favorable for stocks. The
U.S. economy is likely to slow slightly in 1998, but it should continue to grow
at a moderate level that will be positive for U.S. businesses. Slowing economic
growth will also help keep a lid on inflation, which rose at its slowest pace in
a dozen years in 1997.

WITH THIS IN MIND, WHAT ARE YOUR PLANS FOR THE FUND OVER THE NEXT SIX MONTHS?

In general, we plan to continue following our basic principles--remaining
fully invested in a diversified portfolio of U.S. stocks, and using our
stock-ranking model to find what we believe to be the most attractive companies.

The fund is currently positioned to take advantage of favorable U.S.
economic conditions. We still like financial services, as well as automobile
manufacturers and other industrial companies that benefit from economic
upswings.

We're underweighted in healthcare, which is seeing weaker earnings because
of fraud allegations and costly acquisitions. We're also staying away from
consumer services--such as restaurants, hotels and media companies--because we
feel they are overvalued.

HAVE YOU MADE ANY ENHANCEMENTS TO THE FUND'S STOCK-RANKING MODEL FOR 1998?

We've expanded the model's universe of U.S. stocks from 1,500 to more than
2,500. The new additions are mostly small- and mid-cap stocks.

Although the fund's portfolio will still focus on large-cap stocks, we think
that selective investments in the small-cap area of the market can enhance
returns. In fact, our stock selection among small-cap issues contributed
positively to performance in 1997, even though small-cap stocks lagged
large-caps in general.

8 EQUITY GROWTH AMERICAN CENTURY INVESTMENTS

<TABLE>
<CAPTION>
SCHEDULE OF INVESTMENTS
EQUITY GROWTH

DECEMBER 31, 1997

Shares Value
- -------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS

AEROSPACE & DEFENSE--3.4%

78,200 General Dynamics Corp. $ 6,759,412

278,000 United Technologies Corp. 20,241,875
---------------------

27,001,287
---------------------

AIRLINES--0.4%

12,900 AMR Corp.(1) 1,657,650

9,100 Continental Airlines, Inc. Cl B(1) 437,937

17,100 US Airways Group Inc.(1) 1,068,750
---------------------

3,164,337
---------------------

AUTOMOBILES & AUTO PARTS--6.2%

675,200 Ford Motor Co. 32,873,800

255,800 General Motors Corp. 15,507,875
---------------------

48,381,675
---------------------

BANKING--7.8%

42,800 BankAmerica Corp. 3,124,400

58,900 Bankers Trust New York Corp. 6,622,569

117,000 Chase Manhattan Corp.(2) 12,811,500

80,200 Citicorp 10,140,288

415,400 First Union Corp.(2) 21,289,250

34,500 GreenPoint Financial Corp. 2,503,406

84,900 NationsBank Corp. 5,162,981
---------------------

61,654,394
---------------------

BASIC MATERIALS--0.1%

16,000 Aluminum Co. of America 1,126,000
---------------------

BROADCASTING & MEDIA--0.1%

19,600 United Video Satellite
Group Inc. Cl A(1) 565,950
---------------------

BUILDING & HOME IMPROVEMENTS--1.1%

22,500 Jacobs Engineering Group Inc.(1) 570,937

270,600 Premark International, Inc. 7,847,400
---------------------

8,418,337
---------------------

BUSINESS SERVICES & SUPPLIES--0.7%

33,600 Kelly Services, Inc. Cl A 1,010,100

124,000 Valassis Communications, Inc.(1) 4,588,000
---------------------

5,598,100
---------------------

CHEMICALS & RESINS--2.6%

139,500 Dow Chemical Co. 14,159,250

110,700 du Pont (E.I.) de Nemours & Co. 6,648,919
---------------------

20,808,169
---------------------

Shares Value
- -------------------------------------------------------------------------------------

COMMUNICATIONS EQUIPMENT--2.3%

227,100 Lucent Technologies Inc. $ 18,139,612
---------------------

COMMUNICATIONS SERVICES--5.7%

189,500 Ameritech Corp. 15,254,750

347,200 BellSouth Corp.(2) 19,551,700

191,600 GTE Corp. 10,011,100
---------------------

44,817,550
---------------------

COMPUTER PERIPHERALS--0.7%

21,600 Adaptec, Inc.(1) 803,250

89,500 Lexmark International
Group, Inc. Cl A(1) 3,401,000

54,100 Quantum Corp.(1) 1,087,072
---------------------

5,291,322
---------------------

COMPUTER SOFTWARE & SERVICES--4.7%

60,400 Adobe Systems Inc. 2,487,725

47,300 Autodesk, Inc. 1,744,187

26,300 CDW Computer Centers, Inc.(1) 1,370,887

163,200 Microsoft Corp.(1) 21,088,500

118,400 Network Associates Inc.(1) 6,249,300

50,100 Sterling Software, Inc.(1) 2,054,100

106,400 Symantec Corp.(1) 2,350,775
---------------------

37,345,474
---------------------

COMPUTER SYSTEMS--2.1%

146,100 Compaq Computer Corp. 8,245,519

15,400 Dell Computer Corp.(1) 1,294,081

56,700 Digital Equipment Corp.(1) 2,097,900

39,400 Stratus Computer, Inc.(1) 1,489,813

89,100 Sun Microsystems, Inc.(1) 3,558,431
---------------------

16,685,744
---------------------

CONSTRUCTION & PROPERTY
DEVELOPMENT--0.4%

17,800 Centex Corp. 1,120,288

27,700 Clayton Homes, Inc. 498,600

34,100 Fluor Corp. 1,274,487
---------------------

2,893,375
---------------------

CONSUMER PRODUCTS--2.0%

102,200 Helen of Troy Ltd.(1) 1,647,975

253,400 National Service Industries 12,559,137

21,600 Russ Berrie and Co., Inc. 567,000

82,500 Stride Rite Corp. (The) 990,000
---------------------

15,764,112
---------------------

See Notes to Financial Statements

ANNUAL REPORT EQUITY GROWTH 9

SCHEDULE OF INVESTMENTS
EQUITY GROWTH

DECEMBER 31, 1997

Shares Value
- -------------------------------------------------------------------------------------

CONTROL & MEASUREMENT--0.2%

14,900 Beckman Instruments, Inc. $ 596,000

25,000 Cognex Corp.(1) 682,813
---------------------

1,278,813
---------------------

DIVERSIFIED COMPANIES--4.0%

28,800 Tyco International Ltd. 1,297,800

479,000 Unilever N.V. 29,907,563
---------------------

31,205,363
---------------------

ELECTRICAL & ELECTRONIC
COMPONENTS--2.2%

50,900 KLA-Tencor Corporation(1) 1,964,422

169,200 Raychem Corp. 7,286,175

23,000 Solectron Corp.(1) 955,937

110,600 Texas Instruments Inc. 4,977,000

14,300 Unitrode Corp.(1) 307,450

46,400 Vitesse Semiconductor Corp.(1) 1,766,100
---------------------

17,257,084
---------------------

ENERGY (PRODUCTION & MARKETING)--7.9%

174,400 Atlantic Richfield Co. 13,973,800

24,700 Burlington Resources Inc. 1,106,869

345,600 Chevron Corp. 26,611,200

116,800 Exxon Corp. 7,146,700

6,800 NICOR Inc. 286,875

28,000 Occidental Petroleum Corp. 820,750

97,700 Phillips Petroleum Co. 4,750,662

69,200 Sun Company, Inc. 2,910,725

134,800 USX-Marathon Group 4,549,500
---------------------

62,157,081
---------------------

ENERGY (SERVICES)--3.2%

202,000 Schlumberger Ltd. 16,261,000

160,000 Tidewater Inc. 8,820,000
---------------------

25,081,000
---------------------

FINANCIAL SERVICES--9.6%

36,000 Bear Stearns Companies Inc. 1,710,000

118,000 Equitable Companies Inc. 5,870,500

10,000 Green Tree Financial Corp. 261,875

56,400 Lehman Brothers Holdings, Inc. 2,876,400

181,500 Merrill Lynch & Co., Inc. 13,238,156

144,300 Money Store Inc. (The) 3,030,300

531,100 Morgan Stanley, Dean Witter,
Discover & Co. 31,401,287

Shares Value
- -------------------------------------------------------------------------------------

10,800 Paine Webber Group, Inc. $ 373,275

63,800 SLM Holding Corp. 8,876,175

64,600 State Street Corp. 3,758,913

74,500 Travelers Group, Inc. 4,013,688
---------------------

75,410,569
---------------------

FOOD & BEVERAGE--0.6%

24,200 Ben & Jerry's Homemade, Inc. Cl A(1) 376,613

54,100 Lance, Inc. 1,433,650

93,200 Smithfield Foods, Inc.(1) 3,055,212
---------------------

4,865,475
---------------------

HEALTHCARE--1.8%

20,200 Curative Health Services, Inc.(1) 614,838

33,300 FPA Medical Management, Inc.(1) 624,375

14,515 Integrated Health Services, Inc. 452,687

55,300 NovaCare, Inc.(1) 722,356

38,200 RehabCare Group, Inc.(1) 1,021,850

30,700 United HealthCare Corp. 1,525,406

221,100 Wellpoint Health
Networks Inc. Cl A(1) 9,341,475
---------------------

14,302,987
---------------------

INDUSTRIAL EQUIPMENT & MACHINERY--4.0%

321,100 Caterpillar Inc.(2) 15,593,419

68,600 Dover Corp. 2,478,175

126,300 Dresser Industries, Inc. 5,296,706

182,500 Ingersoll-Rand Co. 7,391,250

32,300 Watts Industries, Inc. Cl A 914,494
---------------------

31,674,044
---------------------

INSURANCE--5.0%

16,500 AEGON N.V. 1,478,813

65,600 Aetna Inc. 4,628,900

27,700 CIGNA Corp. 4,793,831

48,900 Conseco Inc. 2,221,894

84,000 Everest Reinsurance Holdings, Inc. 3,465,000

20,300 Gallagher (Arthur J.) & Co. 699,081

47,500 General Re Corp.(2) 10,070,000

19,700 Horace Mann Educators Corp. 560,219

67,500 Hartford Financial Services 6,315,469

12,100 John Alden Financial Corp. 290,400

97,000 Orion Capital Corp. 4,504,437
---------------------

39,028,044
---------------------

See Notes to Financial Statements

10 EQUITY GROWTH AMERICAN CENTURY INVESTMENTS

SCHEDULE OF INVESTMENTS
EQUITY GROWTH

DECEMBER 31, 1997

Shares Value
- -------------------------------------------------------------------------------------

LEISURE--0.2%

10,600 Anchor Gaming(1) $ 590,950

84,400 Jackpot Enterprises, Inc.(1) 954,775
---------------------

1,545,725
---------------------

MACHINERY & EQUIPMENT--1.4%

29,200 Applied Materials, Inc.(1) 878,738

40,100 Cincinnati Milacron Inc. 1,040,094

142,300 Sundstrand Corp. 7,168,362

55,000 Timken Co. 1,890,625
---------------------

10,977,819
---------------------

MEDICAL EQUIPMENT & SUPPLIES--1.6%

205,200 Hillenbrand Industries, Inc. 10,503,675

9,500 Maxxim Medical Inc.(1) 206,625

35,000 Patterson Dental Co.(1) 1,592,500
---------------------

12,302,800
---------------------

METALS & MINING--0.7%

27,200 Aeroquip-Vickers, Inc. 1,334,500

80,750 Parker-Hannifin Corp. 3,704,406

5,000 Phelps Dodge Corp. 311,250
---------------------

5,350,156
---------------------

OFFICE EQUIPMENT & SUPPLIES--1.0%

103,400 Xerox Corp. 7,632,212
---------------------

PAPER & FOREST PRODUCTS--0.2%

7,200 Fort James Corporation 275,400

60,700 Pope & Talbot, Inc. 914,294

15,900 TJ International, Inc. 390,544
---------------------

1,580,238
---------------------

PHARMACEUTICALS--2.7%

41,500 Bristol-Myers Squibb Co. 3,926,938

64,900 Johnson & Johnson 4,275,287

34,600 Merck & Co., Inc. 3,676,250

237,300 Mylan Laboratories Inc. 4,968,469

26,000 Nature's Sunshine Products, Inc. 682,500

55,900 Schering-Plough Corp. 3,472,787
---------------------

21,002,231
---------------------

PRINTING & PUBLISHING--0.7%

5,000 Central Newspapers, Inc. Cl A 369,688

152,300 Deluxe Corp. 5,254,350
---------------------

5,624,038
---------------------

Shares Value
- -------------------------------------------------------------------------------------

REAL ESTATE--0.3%

97,200 Lennar Corp. $ 2,095,875
---------------------

RETAIL (APPAREL)--1.0%

22,900 Burlington Coat Factory
Warehouse Corp. 376,419

27,000 Cato Corp. Cl A 241,313

178,600 Liz Claiborne, Inc. 7,467,712
---------------------

8,085,444
---------------------

RETAIL (FOOD & DRUG)--0.8%

148,400 Universal Corp. 6,102,950
---------------------

RETAIL (GENERAL MERCHANDISE)--0.5%

6,400 Bon-Ton Stores, Inc.(1) 93,200

86,600 Federated Department
Stores, Inc.(1) 3,729,213
---------------------

3,822,413
---------------------

RETAIL (SPECIALTY)--0.3%

50,000 CompUSA Inc.(1) 1,550,000

20,000 Micro Warehouse, Inc.(1) 279,375

35,900 U.S. Office Products Co.(1) 700,050
---------------------

2,529,425
---------------------

RUBBER & PLASTICS(3)

2,500 Tredegar Industries, Inc. 164,687
---------------------

STEEL--0.2%

10,500 Bethlehem Steel Corporation(1) 90,563

39,600 USX-U.S. Steel Group 1,237,500
---------------------

1,328,063
---------------------

TEXTILES & APPAREL--1.1%

98,200 Dexter Corp. (The) 4,241,013

13,900 Kellwood Co. 417,000

40,000 Nautica Enterprises, Inc.(1) 940,000

10,600 Tommy Hilfiger Corp.(1) 372,325

52,000 VF Corp. 2,388,750
---------------------

8,359,088
---------------------

TOBACCO--0.8%

133,200 Philip Morris Companies Inc. 6,035,625
---------------------

TRANSPORTATION--0.4%

7,000 CNF Transportation Inc. 268,625

94,800 Laidlaw Inc. 1,291,650

50,000 Laidlaw Inc. ORD 682,176

41,700 Polaris Industries Inc. 1,274,456
---------------------

3,516,907
---------------------

See Notes to Financial Statements

ANNUAL REPORT EQUITY GROWTH 11

SCHEDULE OF INVESTMENTS
EQUITY GROWTH

DECEMBER 31, 1997

Shares Value
- -------------------------------------------------------------------------------------

UTILITIES--3.4%

21,300 CalEnergy Co. Inc.(1) $ 612,375

17,300 Central Hudson Gas & Electric
Corp. 759,038

19,500 CTG Resources, Inc. 508,219

22,100 Dominion Resources, Inc. (Va.) 940,631

39,800 Enova Corp. 1,077,088

187,700 FPL Group, Inc. 11,109,494

13,800 Indiana Energy Inc. 454,538

79,000 Minnesota Power & Light Co. 3,441,437

83,900 NUI Corp. 2,406,881

58,900 Rochester Gas & Electric Corp. 2,002,600

70,000 UGI Corp. 2,051,875

36,200 Utilicorp United Inc. 1,405,012

8,300 Washington Gas Light Co. 256,781
---------------------

27,025,969
---------------------

TOTAL COMMON STOCKS--96.1% 754,997,563
---------------------
(Cost $676,760,567)

TEMPORARY CASH INVESTMENTS--3.9%

Repurchase Agreement, BA Security Services,
Inc., (U.S. Treasury obligations), in a joint
trading account at 6.50%, dated 12/31/97,
due 1/2/98 (Delivery value $30,711,086) 30,700,000
---------------------
(Cost $30,700,000)

TOTAL INVESTMENT SECURITIES--100.0% $785,697,563
=====================
(Cost $707,460,567)

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

51 S&P 500 March
Futures 1998 $12,483,525 $75,624
================== ===================
</TABLE>

NOTES TO SCHEDULE OF INVESTMENTS

ORD = Foreign Ordinary Share

(1) Non-income producing.

(2) Security, or a portion thereof, has been segregated at the custodian bank
for futures contracts.

(3) Investment in industry is less than 0.05% of total investment securities.

See Notes to Financial Statements

12 EQUITY GROWTH AMERICAN CENTURY INVESTMENTS

<TABLE>
<CAPTION>
INCOME & GROWTH

TOTAL RETURNS AS OF DECEMBER 31, 1997(1)
AVERAGE ANNUAL RETURNS
6 MONTHS 1 YEAR 3 YEARS 5 YEARS LIFE OF
FUND
- -------------------------------------------------------------------------------------------------------------------------
INVESTOR CLASS (inception 12/17/90)
<S> <C> <C> <C> <C> <C>
Income & Growth .................... 14.15% 34.52% 31.67% 20.39% 21.07%
S&P 500 ............................ 10.51% 33.36% 31.04% 20.22% 19.97%
Average Growth & Income Fund(2) .... 9.87% 26.99% 26.48% 17.53% 17.76%(3)
Fund's Ranking Among
Growth & Income Funds(2) ........ -- 37 out of 624 15 out of 402 23 out of 241 12 out of 170(3)
- -------------------------------------------------------------------------------------------------------------------------
ADVISOR CLASS (inception 12/15/97)
Income & Growth ........................................................................................ 1.28%
S&P 500 ................................................................................................ 1.14%
</TABLE>

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

(2) According to Lipper Analytical Services.

(3) Since 12/20/90, the date nearest the fund's inception for which data are
available.

See pages 32, 36 and 37, for more information about returns, share classes, the
comparative index and Lipper fund rankings.

[mountain grpah - data below]

GROWTH OF $10,000 OVER LIFE OF FUND (Investor Class)
$10,000 investment made 12/17/90

Value on 12/31/97
Income & Growth S & P 500
12/17/90 (INCEP) $10,000 $10,000
03/31/91 $11,820 $11,704
06/30/91 $11,784 $11,679
09/30/91 $12,689 $12,303
12/31/91 $14,084 $13,326
03/31/92 $13,598 $12,991
06/30/92 $13,603 $13,239
09/30/92 $13,999 $13,656
12/31/92 $15,192 $14,340
03/31/93 $15,933 $14,964
06/30/93 $16,298 $15,035
09/30/93 $16,983 $15,422
12/31/93 $16,911 $15,779
03/31/94 $16,150 $15,186
06/30/94 $16,234 $15,251
09/30/94 $16,853 $15,996
12/31/94 $16,817 $15,993
03/31/95 $18,288 $17,564
06/30/95 $20,013 $19,215
09/30/95 $21,676 $20,737
12/31/95 $23,017 $21,982
03/31/96 $24,304 $23,161
06/30/96 $25,287 $24,196
09/30/96 $26,149 $24,939
12/31/96 $28,575 $27,022
03/31/97 $29,083 $27,751
06/30/97 $33,657 $32,590
09/30/97 $37,446 $35,014
12/31/97 $38,419 $36,016

Past performance does not guarantee future results. Investment return and
principal value will fluctuate, and redemption value may be more or less than
original cost.

Data quoted is for Investor Class only; performance for the other class will
vary due to differences in fee structures (see the Total Returns table above).

The line representing the fund's total return includes operating expenses (such
as transaction costs and management fees) that reduce returns, while the index's
total return line does not.

PORTFOLIO AT A GLANCE
12/31/97 12/31/96
Number of Companies 239 193
Dividend Yield 2.17% 2.55%
Price/Earnings Ratio 17.5 15.7
Portfolio Turnover 102% 92%
Expense Ratio (Investor Class) 0.65% 0.62%

ANNUAL REPORT INCOME & GROWTH 13

INCOME & GROWTH

MANAGEMENT Q & A

An interview with John Schniedwind and Kurt Borgwardt, portfolio managers on
the Income & Growth fund investment team.

NOTE: All fund performance figures referenced in this interview are for
Investor Class shares.

HOW DID THE FUND PERFORM IN 1997?

The fund posted a total return of 34.52%, outperforming the 33.36% return of
the S&P 500 and the 26.99% average return of the 624 "Growth & Income Funds"
tracked by Lipper Analytical Services. The fund's 1997 return ranked it in the
top 6% of Lipper's growth and income funds category, and it was among the 10% of
all domestic stock funds that beat the S&P 500 for the year, according to
Lipper. (See the Total Returns table on the previous page for other performance
comparisons.)

WHY WAS THE FUND'S PERFORMANCE SO STRONG COMPARED WITH THE S&P 500 AND THE
AVERAGE GROWTH & INCOME FUND?

As always, the fund was fully invested in U.S. stocks, which helped it take
full advantage of the rising market. In addition, the fund's broad
diversification across a variety of industries gave its portfolio balance and
stability despite increased market volatility.

But the main reason was our stock-ranking model, which put us in the right
places at the right times. It also helped us avoid sectors of the market that
struggled in the last half of the year.

[bar graph - data below]

INCOME & GROWTH'S ONE-YEAR RETURNS SINCE INCEPTION(1)
(Periods ended December 31)

Income & Growth S&P 500
12/90(2) 1.29% 2.25%
12/91 39.05% 30.33%
12/92 7.87% 7.61%
12/93 11.31% 10.03%
12/94 -0.56% 1.36%
12/95 36.87% 37.44%
12/96 24.15% 22.93%
12/97 34.52% 33.36%

Past performance is no guarantee of future results. Investment return and
principal value will fluctuate, and redemption value may be more or less than
original cost.

(1) Investor Class.

(2) Return from the fund's 12/17/90 inception date to 12/31/90.

14 INCOME & GROWTH AMERICAN CENTURY INVESTMENTS

INCOME & GROWTH

CAN YOU GIVE SOME EXAMPLES OF THE "RIGHT PLACES?"

One of our biggest industry weightings was communications services,
especially telecommunications stocks. The Federal Communications Act of 1996
created a lot of opportunities for telephone companies to expand their services.
In 1997, mergers and acquisitions helped put many of these companies in a better
competitive position.

Telecommunications stocks also offered attractive yields, which helped
enhance the fund's income stream. In the last half of the year, telephone stocks
like Ameritech (a top ten holding), Bell Atlantic and BellSouth returned more
than 20%.

We also emphasized financial stocks, which had the best returns of any
sector of the market in 1997. Banking, insurance and financial services were
among the fund's largest industry holdings all year. Economic conditions--solid
growth and low inflation--were ideal for financial companies, and lower interest
rates boosted their earnings.

WHAT AREAS OF THE MARKET DID YOU AVOID?

WERE THERE ANY INVESTMENT DECISIONS THAT HURT FUND PERFORMANCE DURING THE YEAR?

However, the company does a large proportion of its business in Asia, and
after that crisis developed, the market punished stocks that rely on Asia for a
significant portion of their revenues. In addition, earnings estimates for
United Technologies have been falling recently.

LOOKING AHEAD, WHAT EFFECTS DO YOU THINK THE SOUTHEAST ASIAN FINANCIAL MELTDOWN
WILL HAVE IN THE U.S.?

The situation is pretty uncertain. I don't mean to be evasive; it's just a
reflection of the complicated web of global business.

The problems in Asia will probably have a slight negative effect on the U.S.
economy. Our trade deficit with Asia is likely to widen--exports to the region

TOP TEN HOLDINGS % of fund investments

As of As of
12/31/97 6/30/97

Ford Motor Co. 3.2% 1.9%
Unilever N.V. 3.2% --
United Technologies Corp. 2.6% 0.5%
Microsoft Corp. 2.5% 1.5%
Merck & Co., Inc. 2.5% 2.5%
Ameritech Corp. 2.2% 1.0%
Atlantic Richfield Co. 2.0% 1.1%
Morgan Stanley, Dean Witter,
Discover & Co. 1.9% 0.7%
First Union Corp. 1.9% 1.0%
Chevron Corp. 1.9% 0.7%

ANNUAL REPORT INCOME & GROWTH 15

INCOME & GROWTH

will diminish or be postponed, while imports from Southeast Asia will increase.
These imports will also be cheaper, partly because of weak Asian currencies and
partly because of heavy volume from Asia's overbuilt manufacturing facilities.
On the plus side, cheaper imports should help keep U.S. inflation low in 1998.

DOES THIS MEAN A TOUGH YEAR AHEAD FOR U.S. STOCKS?

WITH THIS IN MIND, WHAT ARE YOUR PLANS FOR THE FUND OVER THE NEXT SIX MONTHS?

We still favor financial services and telecommunications, while we're
underweighted in pharmaceutical and consumer services stocks, such as
restaurants, hotels and media companies.

We'll continue to emphasize certain sectors that were beaten up during the
fourth quarter of 1997 and now offer better relative values. An example is
technology stocks, many of which plummeted in the fourth quarter because they
were expected to suffer the most damage from the Southeast Asian crisis. But we
now see value in many larger technology companies, such as Microsoft.

We're also selectively looking at consumer growth stocks--drug companies
like Merck and home products manufacturers like Procter & Gamble. These stocks
dominated the market in 1996 and early 1997 before sliding late last year.
Procter & Gamble and Unilever (a top ten holding) are two companies that we
currently like.

HAVE YOU MADE ANY ENHANCEMENTS TO THE FUND'S STOCK-RANKING MODEL FOR 1998?

We've expanded the model's universe of U.S. stocks from 1,500 to more than
2,500. The new additions are mostly small- and mid-cap stocks. Although the
fund's portfolio will still focus on large-cap stocks, we think that selective
investments in the small-cap area of the market can enhance returns.

TOP FIVE INDUSTRIES % of fund investments

As of As of
12/31/97 6/30/97

Banking 8.4% 8.2%
Energy (Production & Marketing) 8.2% 6.3%
Communications Services 7.4% 5.4%
Financial Services 6.5% 4.1%
Pharmaceuticals 6.5% 7.2%

16 INCOME & GROWTH AMERICAN CENTURY INVESTMENTS

<TABLE>
<CAPTION>
SCHEDULE OF INVESTMENTS
INCOME & GROWTH

DECEMBER 31, 1997

Shares Value
- -------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS

AEROSPACE & DEFENSE--3.4%

85,000 AlliedSignal Inc. $ 3,309,688

127,100 General Dynamics Corp. 10,986,206

651,700 United Technologies Corp. 47,451,906
-----------------------

61,747,800
-----------------------

AIRLINES--0.1%

20,700 AMR Corp.(1) 2,659,950
-----------------------

AUTOMOBILES & AUTO PARTS--4.9%

40,800 Excel Industries, Inc. 736,950

1,185,700 Ford Motor Co.(2) 57,728,769

474,400 General Motors Corp. 28,760,500

30,600 Volvo AB ADR 826,200
-----------------------

88,052,419
-----------------------

BANKING--8.4%

343,900 BankAmerica Corp. 25,104,700

233,300 Bankers Trust New York Corp. 26,231,669

241,400 Chase Manhattan Corp. 26,433,300

169,800 Citicorp 21,469,087

667,100 First Union Corp. 34,188,875

300,000 NationsBank Corp. 18,243,750
-----------------------

151,671,381
-----------------------

BASIC MATERIALS--0.1%

38,200 Aluminum Co. of America 2,688,325
-----------------------

BIOTECHNOLOGY(3)

6,300 Genzyme Corp.(1) 174,431
-----------------------

BUILDING & HOME IMPROVEMENTS--0.4%

21,900 Johns Manville Corp. 220,369

229,900 Premark International, Inc. 6,667,100
-----------------------

6,887,469
-----------------------

BUSINESS SERVICES & SUPPLIES--0.8%

134,100 Kelly Services, Inc. Cl A 4,031,381

1,600 National Data Corp. 57,800

239,300 Ogden Corp. 6,745,269

147,000 Olsten Corp. 2,205,000

12,500 Quintiles Transnational Corp.(1) 479,687

33,400 Valassis Communications, Inc.(1) 1,235,800
-----------------------

14,754,937
-----------------------

Shares Value
- -------------------------------------------------------------------------------------

CHEMICALS & RESINS--2.7%

12,200 Chemed Corp. $ 505,537

40,000 Church & Dwight Co., Inc. 1,122,500

259,400 Dow Chemical Co. 26,329,100

262,100 du Pont (E.I.) de Nemours & Co. 15,742,381

2,400 Ecolab Inc. 133,050

88,000 Lubrizol Corp. 3,245,000

7,900 Morton International, Inc. 271,563

49,800 Schulman (A.), Inc. 1,257,450

2,400 Union Carbide Corp. 103,050
-----------------------

48,709,631
-----------------------

COMMUNICATIONS EQUIPMENT--1.8%

372,000 Lucent Technologies Inc. 29,713,500

37,300 QUALCOMM Inc.(1) 1,884,816
-----------------------

31,598,316
-----------------------

COMMUNICATIONS SERVICES--7.4%

490,400 Ameritech Corp. 39,477,200

187,700 Bell Atlantic Corp. 17,080,700

478,200 BellSouth Corp. 26,928,637

431,600 GTE Corp. 22,551,100

608,400 U S WEST Communications Group 27,454,050
-----------------------

133,491,687
-----------------------

COMPUTER PERIPHERALS--0.7%

109,700 Adaptec, Inc.(1) 4,079,469

134,200 EMC Corp. (Mass.)(1) 3,682,112

104,000 Lexmark International
Group, Inc. Cl A(1) 3,952,000

70,000 Quantum Corp.(1) 1,406,563
-----------------------

13,120,144
-----------------------

COMPUTER SOFTWARE & SERVICES--4.2%

118,500 Adobe Systems Inc. 4,880,719

101,900 Autodesk, Inc. 3,757,562

10,700 CDW Computer Centers, Inc.(1) 557,738

3,300 Cadence Design Systems, Inc.(1) 80,850

87,900 HBO & Co. 4,216,453

347,200 Microsoft Corp.(1) 44,864,750

115,800 Network Associates Inc.(1) 6,112,069

39,900 Parametric Technology Corp.(1) 1,887,769

39,400 PeopleSoft, Inc.(1) 1,531,675

54,400 Shared Medical Systems Corp. 3,590,400

49,200 Sterling Software, Inc.(1) 2,017,200

132,400 Symantec Corp.(1) 2,925,212
-----------------------

76,422,397
-----------------------

See Notes to Financial Statements

ANNUAL REPORT INCOME & GROWTH 17

SCHEDULE OF INVESTMENTS
INCOME & GROWTH

DECEMBER 31, 1997

Shares Value
- -------------------------------------------------------------------------------------

COMPUTER SYSTEMS--2.7%

285,700 Compaq Computer Corp. $ 16,124,194

27,300 Data General Corp.(1) 476,044

69,400 Dell Computer Corp.(1) 5,831,769

86,500 Digital Equipment Corp.(1) 3,200,500

59,900 Hewlett-Packard Co. 3,743,750

100,900 International Business
Machines Corp. 10,550,356

32,800 Stratus Computer, Inc.(1) 1,240,250

194,300 Sun Microsystems, Inc.(1) 7,759,856
-----------------------

48,926,719
-----------------------

CONSTRUCTION & PROPERTY
DEVELOPMENT--0.4%

188,000 Fluor Corp. 7,026,500
-----------------------

CONSUMER PRODUCTS--2.9%

57,700 Helen of Troy Ltd.(1) 930,412

340,400 National Service Industries 16,871,075

375,300 Procter & Gamble Co. (The) 29,953,631

26,900 Russ Berrie and Co., Inc. 706,125

38,900 Stanhome Inc. 999,244

174,200 Stride Rite Corp. (The) 2,090,400

6,300 Whirlpool Corp. 346,500
-----------------------

51,897,387
-----------------------

CONTROL & MEASUREMENT--0.6%

91,400 Beckman Instruments, Inc. 3,656,000

31,900 Emerson Electric Co. 1,800,356

51,400 Fluke Corp. 1,339,612

37,100 Perkin-Elmer Corp. 2,636,419

23,700 Tektronix, Inc. 940,594
-----------------------

10,372,981
-----------------------

DIVERSIFIED COMPANIES--4.8%

202,500 General Electric Co. (U.S.)(2) 14,858,437

107,500 Honeywell Inc. 7,363,750

56,600 Johnson Controls, Inc. 2,702,650

103,800 Tyco International Ltd. 4,677,488

920,600 Unilever N.V. 57,479,963
-----------------------

87,082,288
-----------------------

ELECTRICAL & ELECTRONIC
COMPONENTS--2.5%

35,800 Eaton Corp. 3,195,150

237,800 Intel Corp.(2) 16,698,019

86,100 KLA-Tencor Corporation(1) 3,322,922

Shares Value
- -------------------------------------------------------------------------------------

8,000 Linear Technology Corp. $ 460,500

180,000 Raychem Corp. 7,751,250

10,100 Solectron Corp.(1) 419,781

232,200 Texas Instruments Inc. 10,449,000

74,200 Vitesse Semiconductor Corp.(1) 2,824,237
-----------------------

45,120,859
-----------------------

ENERGY (PRODUCTION & MARKETING)--8.2%

16,000 Ashland Inc. 859,000

447,000 Atlantic Richfield Co. 35,815,875

435,700 Chevron Corp. 33,548,900

535,000 Exxon Corp. 32,735,312

123,000 Imperial Oil Ltd. 7,864,312

93,600 Mobil Corp. 6,756,750

133,500 NICOR Inc. 5,632,031

65,900 Occidental Petroleum Corp. 1,931,694

62,400 Phillips Petroleum Co. 3,034,200

6,600 Royal Dutch Petroleum Co. 357,638

69,400 Sun Company, Inc. 2,919,138

164,800 Texaco Inc. 8,961,000

221,600 USX-Marathon Group 7,479,000
-----------------------

147,894,850
-----------------------

ENERGY (SERVICES)--1.8%

272,100 Schlumberger Ltd. 21,904,050

173,600 Tidewater Inc. 9,569,700
-----------------------

31,473,750
-----------------------

ENVIRONMENTAL SERVICES--0.2%

76,900 Browning-Ferris Industries, Inc. 2,845,300
-----------------------

FINANCIAL SERVICES--6.5%

125,100 Bear Stearns Companies Inc. 5,942,250

49,500 Edwards (A.G.), Inc. 1,967,625

140,600 Equitable Companies Inc. 6,994,850

125,200 Green Tree Financial Corp. 3,278,675

13,866 Legg Mason, Inc. 775,629

100,000 Lehman Brothers Holdings, Inc. 5,100,000

283,200 Merrill Lynch & Co., Inc. 20,655,900

143,700 Money Store Inc. (The) 3,017,700

589,200 Morgan Stanley, Dean Witter,
Discover & Co. 34,836,450

53,850 Paine Webber Group, Inc. 1,861,191

5,800 Raymond James Financial, Inc. 230,188

85,900 SLM Holding Corp. 11,950,837

375,450 Travelers Group, Inc. 20,227,369
-----------------------

116,838,664
-----------------------

See Notes to Financial Statements

18 INCOME & GROWTH AMERICAN CENTURY INVESTMENTS

SCHEDULE OF INVESTMENTS
INCOME & GROWTH

DECEMBER 31, 1997

Shares Value
- -------------------------------------------------------------------------------------

FOOD & BEVERAGE--0.9%

115,300 Coca-Cola Company (The) $ 7,681,862

12,900 Coors (Adolph) Co. Cl B 428,119

97,500 Lance, Inc. 2,583,750

39,400 Quaker Oats Co. (The) 2,078,350

99,600 Smithfield Foods, Inc.(1) 3,265,013
-----------------------

16,037,094
-----------------------

HEALTHCARE--1.2%

13,100 Bausch & Lomb Inc. 519,088

120,300 FPA Medical Management, Inc.(1) 2,255,625

57,400 NovaCare, Inc.(1) 749,788

105,700 Tenet Healthcare Corp.(1) 3,501,312

87,500 United HealthCare Corp. 4,347,656

238,600 Wellpoint Health
Networks Inc. Cl A(1) 10,080,850
-----------------------

21,454,319
-----------------------

INDUSTRIAL EQUIPMENT & MACHINERY--3.3%

445,400 Caterpillar Inc. 21,629,737

390,000 Dover Corp. 14,088,750

302,600 Dresser Industries, Inc. 12,690,288

259,700 Ingersoll-Rand Co. 10,517,850

16,200 Watts Industries, Inc. Cl A 458,663
-----------------------

59,385,288
-----------------------

INSURANCE--3.1%

10,200 AEGON N.V. 914,175

70,500 Aetna Inc. 4,974,656

26,100 Allstate Corp. 2,371,837

46,400 CIGNA Corp. 8,030,100

89,300 Conseco Inc. 4,057,569

27,000 Everest Reinsurance Holdings, Inc. 1,113,750

65,400 Gallagher (Arthur J.) & Co. 2,252,213

55,200 General Re Corp. 11,702,400

110,400 Hartford Financial Services 10,329,300

86,500 Lincoln National Corp. 6,757,812

1,700 Ohio Casualty Corp. 76,713

50,000 Orion Capital Corp. 2,321,875

31,000 Reliance Group Holdings, Inc. 437,875
-----------------------

55,340,275
-----------------------

LEISURE(3)

3,000 Anchor Gaming(1) 167,250
-----------------------

Shares Value
- -------------------------------------------------------------------------------------

MACHINERY & EQUIPMENT--1.0%

106,600 Applied Materials, Inc.(1) $ 3,207,994

14,900 Barnes Group Inc. 338,975

3,000 Case Corp. 181,312

34,700 Flowserve Corp. 969,431

68,000 Helix Technology Corp. 1,334,500

18,600 Kulicke & Soffa Industries, Inc.(1) 347,587

113,000 Sundstrand Corp. 5,692,375

155,600 Timken Co. 5,348,750
-----------------------

17,420,924
-----------------------

MEDICAL EQUIPMENT & SUPPLIES--1.0%

40,800 Becton, Dickinson and Co. 2,040,000

315,200 Hillenbrand Industries, Inc. 16,134,300

7,100 Patterson Dental Co.(1) 323,050
-----------------------

18,497,350
-----------------------

METALS & MINING--0.6%

8,800 ASARCO Inc. 197,450

151,250 Parker-Hannifin Corp. 6,938,594

15,100 Phelps Dodge Corp. 939,975

18,700 Vulcan Materials Co. 1,909,737
-----------------------

9,985,756
-----------------------

OFFICE EQUIPMENT & SUPPLIES--0.7%

172,700 Xerox Corp. 12,747,419
-----------------------

PACKAGING & CONTAINERS(3)

2,900 Crown Cork & Seal Co., Inc. 145,363
-----------------------

PAPER & FOREST PRODUCTS--0.3%

38,400 Fort James Corporation 1,468,800

107,300 Pope & Talbot, Inc. 1,616,206

18,700 TJ International, Inc. 459,319

31,400 Weyerhaeuser Co. 1,540,563
-----------------------

5,084,888
-----------------------

PHARMACEUTICALS--6.5%

61,100 Bergen Brunswig Corp. Cl A 2,573,837

319,600 Bristol-Myers Squibb Co.(2) 30,242,150

54,300 Dura Pharmaceuticals, Inc.(1) 2,504,588

303,300 Johnson & Johnson 19,979,887

416,100 Merck & Co., Inc. 44,210,625

276,100 Mylan Laboratories Inc. 5,780,844

12,500 Nature's Sunshine Products, Inc. 328,125

182,200 Schering-Plough Corp. 11,319,175
-----------------------

116,939,231
-----------------------

See Notes to Financial Statements

ANNUAL REPORT INCOME & GROWTH 19

SCHEDULE OF INVESTMENTS
INCOME & GROWTH

DECEMBER 31, 1997

Shares Value
- -------------------------------------------------------------------------------------

PRINTING & PUBLISHING--1.2%

37,500 Central Newspapers, Inc. Cl A $ 2,772,656

364,000 Deluxe Corp. 12,558,000

338,600 Moore Corporation Ltd. 5,121,325

39,900 Moore Corporation Ltd. ORD 600,210

17,500 New England Business Service, Inc. 590,625
-----------------------

21,642,816
-----------------------

REAL ESTATE--0.2%

79,600 Capstead Mortgage Corp. 1,587,025

68,600 Lennar Corp. 1,479,188
-----------------------

3,066,213
-----------------------

RETAIL (APPAREL)--1.0%

234,600 Burlington Coat Factory
Warehouse Corp. 3,856,237

26,800 Cato Corp. Cl A 239,525

180,700 Liz Claiborne, Inc. 7,555,519

90,000 Ross Stores, Inc. 3,279,375

95,600 TJX Companies, Inc. (The) 3,286,250
-----------------------

18,216,906
-----------------------

RETAIL (FOOD & DRUG)--0.1%

21,600 Universal Corp. 888,300
-----------------------

RETAIL (GENERAL MERCHANDISE)--1.0%

6,900 Bon-Ton Stores, Inc.(1) 100,481

33,000 Dayton Hudson Corp. 2,227,500

149,100 Federated Department
Stores, Inc.(1) 6,420,619

30,500 Office Depot, Inc.(1) 730,094

174,000 Sears, Roebuck & Co. 7,873,500

61,200 ShopKo Stores, Inc.(1) 1,331,100
-----------------------

18,683,294
-----------------------

RETAIL (SPECIALTY)--0.6%

80,500 CompUSA Inc.(1) 2,495,500

62,100 Home Depot, Inc. 3,656,137

67,800 Micro Warehouse, Inc.(1) 947,081

18,200 Tiffany & Co. 656,338

125,800 U.S. Office Products Co.(1) 2,453,100
-----------------------

10,208,156
-----------------------

Shares Value
- -------------------------------------------------------------------------------------

STEEL--0.2%

68,400 AK Steel Holding Corp. $ 1,209,825

24,800 Bethlehem Steel Corporation(1) 213,900

44,300 USX-U.S. Steel Group 1,384,375
-----------------------

2,808,100
-----------------------

TEXTILES & APPAREL--0.7%

153,300 Dexter Corp. (The) 6,620,644

28,300 Kellwood Co. 849,000

27,300 Nautica Enterprises, Inc.(1) 641,550

22,100 Tommy Hilfiger Corp.(1) 776,262

72,800 VF Corp. 3,344,250
-----------------------

12,231,706
-----------------------

TOBACCO--1.5%

547,600 Philip Morris Companies Inc. 24,813,125

71,100 RJR Nabisco Holdings Corp. 2,666,250
-----------------------

27,479,375
-----------------------

TRANSPORTATION--0.3%

57,400 CNF Transportation Inc. 2,202,725

85,500 Laidlaw Inc. 1,164,937

19,000 Laidlaw Inc. ORD 259,227

45,500 Polaris Industries Inc. 1,390,594

27,800 Roadway Express, Inc. 622,025
-----------------------

5,639,508
-----------------------

UTILITIES--5.9%

332,500 Atlantic Energy, Inc. 7,044,844

62,300 Baltimore Gas & Electric Co. 2,122,094

18,800 Central Hudson Gas &
Electric Corp. 824,850

8,800 Central Vermont Public
Service Corp. 134,200

28,700 CTG Resources, Inc. 747,994

270,400 Dominion Resources, Inc. (Va.) 11,508,900

90,000 Enova Corp. 2,435,625

294,200 Entergy Corp. 8,807,612

341,600 FPL Group, Inc. 20,218,450

24,100 GPU Inc. 1,015,212

40,400 MDU Resources Group, Inc. 1,277,650

151,400 Minnesota Power & Light Co. 6,595,362

2,900 NIPSCO Industries, Inc. 143,369

41,500 NUI Corp. 1,190,531

136,900 Pacific Enterprises 5,150,862

268,200 PP&L Resources, Inc. 6,420,038

See Notes to Financial Statements

20 INCOME & GROWTH AMERICAN CENTURY INVESTMENTS

SCHEDULE OF INVESTMENTS
INCOME & GROWTH

DECEMBER 31, 1997

Shares Value
- -------------------------------------------------------------------------------------

102,000 People's Energy Corp. $ 4,016,250

32,000 Piedmont Natural Gas Co., Inc. 1,150,000

95,600 Public Service Enterprise
Group Inc. 3,029,325

162,000 Rochester Gas & Electric Corp. 5,508,000

108,600 UGI Corp. 3,183,338

316,300 Utilicorp United Inc. 12,276,394

64,800 Washington Gas Light Co. 2,004,750

100 WPS Resources Corp. 3,381
-----------------------

106,809,031
-----------------------

TOTAL COMMON STOCKS--96.8% 1,742,336,747
-----------------------
(Cost $1,459,004,388)

TEMPORARY CASH INVESTMENTS

Repurchase Agreement, Morgan Stanley Group,
Inc., (U.S. Treasury obligations), in a joint
trading account at 6.20%, dated 12/31/97,
due 1/2/98 (Delivery value $17,806,131) 17,800,000

Repurchase Agreement, State Street Corp.,
(U.S. Treasury obligations), in a joint trading
account at 5.50%, dated 12/31/97, due
1/2/98 (Delivery value $40,112,253) 40,100,000
-----------------------

TOTAL TEMPORARY CASH
INVESTMENTS--3.2% 57,900,000
-----------------------
(Cost $57,900,000)

TOTAL INVESTMENT SECURITIES--100.0% $1,800,236,747
=======================
(Cost $1,516,904,388)

FUTURES CONTRACTS

Expiration Underlying Face Unrealized
Purchased Date Amount at Value Gain
- -------------------------------------------------------------------------------------
152 S&P 500 March
Futures 1998 $37,205,800 $71,280
================== =====================

</TABLE>

NOTES TO SCHEDULE OF INVESTMENTS

ADR = American Depositary Receipt

ORD = Foreign Ordinary Share

(1) Non-income producing.

(2) Security, or a portion thereof, has been segregated at the custodian bank
for futures contracts.

(3) Investment in industry is less than 0.05% of total investment securities.

See Notes to Financial Statements

ANNUAL REPORT INCOME & GROWTH 21

STATEMENTS OF ASSETS AND LIABILITIES

DECEMBER 31, 1997 EQUITY INCOME &
GROWTH GROWTH
ASSETS

Investment securities, at value
(identified cost of $707,460,567
and $1,516,904,388, respectively)
(Note 3) ................................ $ 785,697,563 $1,800,236,747

Cash ....................................... 4,202,442 4,800,059

Receivable for investments sold ............ 15,967,562 37,184,317
Receivable for capital shares sold ......... 84,145 1,264,323

Dividends and interest receivable .......... 946,878 2,970,930

Receivable for variation margin on
futures contracts (Note 1) ............... 512,873 1,527,600
-------------- --------------
807,411,463 1,847,983,976
-------------- --------------
LIABILITIES

Disbursements in excess of
demand deposit cash ...................... 447,405 1,865,984

Payable for investments purchased .......... 31,152,570 44,230,615

Payable for capital shares redeemed ........ 1,396,189 1,949,007

Accrued management fees (Note 2) ........... 431,341 1,026,907

Distribution fees payable (Note 2) ......... 108 430

Service fees payable (Note 2) .............. 108 430

Dividends payable .......................... -- 55,875

Other liabilities .......................... 5,205 11,417
-------------- --------------
33,432,926 49,140,665
-------------- --------------
Net Assets ................................. $ 773,978,537 $1,798,843,311
============== ==============
NET ASSETS CONSIST OF:

Capital (par value and paid-in surplus) .... $ 668,822,997 $1,490,964,147

Undistributed net investment income ........ 291,999 2,534,900

Accumulated undistributed net
realized gain from investments ........... 26,550,921 21,940,625

Net unrealized appreciation
on investments ........................... 78,312,620 283,403,639
-------------- --------------
$ 773,978,537 $1,798,843,311
============== ==============
Investor Class, $10.00 Par Value

Net assets ................................. $ 773,425,089 $1,795,123,621

Shares outstanding ......................... 40,612,482 73,856,494

Net asset value per share .................. $ 19.04 $ 24.31

Advisor Class, $10.00 Par Value

Net assets ................................. $ 553,448 $ 3,719,690

Shares outstanding ......................... 29,063 153,049

Net asset value per share .................. $ 19.04 $ 24.30

See Notes to Financial Statements

22 STATEMENTS OF ASSETS AND LIABILITIES AMERICAN CENTURY INVESTMENTS

STATEMENTS OF OPERATIONS

YEAR ENDED DECEMBER 31, 1997 EQUITY INCOME &
GROWTH GROWTH
INVESTMENT INCOME

Income:

Dividends (net of foreign taxes withheld
of $75,993 and $374,967, respectively) ..... $ 9,073,157 $ 27,444,322

Interest ..................................... 1,357,015 3,236,625
------------ ------------
10,430,172 30,680,947
------------ ------------
Expenses (Note 2):

Investment advisory fees ..................... 2,555,456 6,274,304

Transfer agency fees ......................... 347,736 732,727

Administrative fees .......................... 216,774 548,851

Printing and postage ......................... 110,756 263,979

Registration and filing fees ................. 75,692 160,663

Custodian fees ............................... 24,843 42,750

Directors' fees and expenses ................. 17,753 32,670

Auditing and legal fees ...................... 11,519 28,173

Telephone expenses ........................... 9,054 24,952

Other operating expenses ..................... 7,441 14,685

Distribution fees - Advisor Class ............ 246 430

Shareholder service fees - Advisor Class ..... 246 430
------------ ------------
Total expenses ............................. 3,377,516 8,124,614
------------ ------------
Net investment income ........................ 7,052,656 22,556,333
------------ ------------
REALIZED AND UNREALIZED
GAIN ON INVESTMENTS (NOTE 3)

Net realized gain on investments ............. 95,280,432 154,430,003

Change in net unrealized
appreciation on investments ................ 44,869,649 178,014,272
------------ ------------

Net realized and unrealized
gain on investments ........................ 140,150,081 332,444,275
------------ ------------

Net Increase in Net Assets
Resulting from Operations .................. $147,202,737 $355,000,608
============ ============
See Notes to Financial Statements

ANNUAL REPORT STATEMENTS OF OPERATIONS 23

<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS

YEARS ENDED DECEMBER 31, 1997 EQUITY GROWTH INCOME & GROWTH
AND DECEMBER 31, 1996

Increase in Net Assets 1997 1996 1997 1996

OPERATIONS

<S> <C> <C> <C> <C>
Net investment income ........... $ 7,052,656 $ 3,532,172 $ 22,556,333 $ 12,380,402

Net realized gain on investments 95,280,432 33,547,625 154,430,003 57,275,039

Change in net unrealized
appreciation on investments ... 44,869,649 11,808,699 178,014,272 47,583,106
--------------- --------------- --------------- ---------------
Net increase in net assets
resulting from operations .... 147,202,737 48,888,496 355,000,608 117,238,547
--------------- --------------- --------------- ---------------
DISTRIBUTIONS TO
SHAREHOLDERS

From net investment income:

Investor Class ................ (6,915,205) (3,440,245) (20,589,829) (12,129,058)

Advisor Class ................. (1,492) -- (5,232) --

From net realized gains on
investment transactions:

Investor Class ................ (79,748,875) (27,164,820) (152,216,029) (47,219,967)

Advisor Class ................. (55,620) -- (326,667) --
--------------- --------------- --------------- ---------------
Decrease in net assets
from distributions ............ (86,721,192) (30,605,065) (173,137,757) (59,349,025)
--------------- --------------- --------------- ---------------
CAPITAL SHARE
TRANSACTIONS (NOTE 4)

Net increase in net assets
from capital share transactions 439,064,411 96,698,856 899,285,703 286,104,092
--------------- --------------- --------------- ---------------
Net increase in net assets ...... 499,545,956 114,982,287 1,081,148,554 343,993,614

NET ASSETS

Beginning of year ............... 274,432,581 159,450,294 717,694,757 373,701,143
--------------- --------------- --------------- ---------------
End of year ..................... $ 773,978,537 $ 274,432,581 $ 1,798,843,311 $ 717,694,757
=============== =============== =============== ===============
Undistributed net
investment income ............. $ 291,999 $ 155,931 $ 2,534,900 $ 573,606
=============== =============== =============== ===============
</TABLE>

See Notes to Financial Statements

24 STATEMENTS OF CHANGES IN NET ASSETS AMERICAN CENTURY INVESTMENTS

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 1997

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION--American Century Quantitative Equity Funds (the Corporation)
is registered under the Investment Company Act of 1940 as an open-end
diversified management investment company. American Century Equity Growth Fund
(Equity Growth) and American Century Income & Growth Fund (Income & Growth) (the
Funds) are two of the five funds issued by the Corporation. Equity Growth seeks
capital appreciation by investing in common stocks. Income & Growth seeks
dividend growth, current income and capital appreciation by investing in common
stocks. Each Fund is authorized to issue three classes of shares: the Investor
Class, the Advisor Class and the Institutional Class. The three classes of
shares differ principally in their respective shareholder servicing and
distribution expenses and arrangements. All shares of each Fund represent an
equal pro rata interest in the net assets of the class to which such shares
belong, and have identical voting, dividend, liquidation and other rights and
the same terms and conditions, except for class specific expenses and exclusive
rights to vote on matters affecting only individual classes. Sale of the Advisor
Class for Equity Growth and Income & Growth commenced on October 9, 1997 and
December 15, 1997, respectively. Sale of the Institutional Class for the Funds
had not commenced at December 31, 1997. The following significant accounting
policies, related to all classes of the Funds, are in accordance with accounting
policies generally accepted in the investment company industry.

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

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

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

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

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

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

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

ANNUAL REPORT NOTES TO FINANCIAL STATEMENTS 25

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 1997

DISTRIBUTIONS TO SHAREHOLDERS--Distributions to shareholders are recorded on
the ex-dividend date. Distributions from net investment income are declared and
paid quarterly for Equity Growth. Distributions from net investment income for
Income & Growth are declared daily and distributed monthly. Distributions from
net realized gains for the Funds are declared and paid annually.

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

USE OF ESTIMATES --The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of increases and decreases in
net assets from operations during the period. Actual results could differ from
these estimates.

ADDITIONAL INFORMATION--Effective January 15, 1998, Funds Distributor, Inc.
(FDI) became the Corporation's distributor. Certain officers of FDI are also
officers of the Corporation.

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

The shareholders of the Funds approved a new management agreement with ACIM
on July 30, 1997, effective August 1, 1997, which replaced the previously
existing contracts between the Funds and Benham Management Corporation and
American Century Services Corporation (ACSC) for advisory, administrative and
transfer agency services. Under the agreement, ACIM provides all services
required by the Funds in exchange for one "unified" management fee. Expenses
excluded from this agreement are brokerage, taxes, portfolio insurance,
interest, fees and expenses of the Directors who are not considered "interested
persons" as defined in the Investment Company Act of 1940 (including counsel
fees) and extraordinary expenses. The annual rate at which this fee is assessed
is determined monthly in a two-step process: First, a fee rate schedule is
applied to the assets of all of the funds in the Fund's investment category
which are managed by ACIM (the "Investment Category Fee"). The overall
investment objective of each Fund determines its Investment Category. The three
investment categories are: the Money Market Fund Category, the Bond Fund
Category and the Equity Fund Category. The Funds are included in the Equity Fund
Category. Second, a separate fee rate schedule is applied to the assets of all
of the funds managed by ACIM (the "Complex Fee"). The Investment Category Fee
and the Complex Fee are then added to determine the unified management fee rate.
The management fee is paid monthly by each Fund based on each Fund's class
average daily closing net assets during the previous month multiplied by the
monthly management fee rate.

The annualized Investment Category Fee schedule for the Funds is as follows

0.5200% of the first $1 billion
0.4600% of the next $5 billion
0.4160% of the next $15 billion
0.3690% of the next $25 billion
0.3420% of the next $50 billion
0.3390% of the next $150 billion
0.3380% of the average daily net assets over $246 billion

The annualized Complex Fee schedule (Investor Class) is as follows:

0.3100% of the first $2.5 billion
0.3000% of the next $7.5 billion
0.2985% of the next $15 billion
0.2970% of the next $25 billion
0.2960% of the next $50 billion
0.2950% of the next $100 billion
0.2940% of the next $100 billion
0.2930% of the next $200 billion
0.2920% of the next $250 billion
0.2910% of the next $500 billion
0.2900% of the average daily net assets over $1,250 billion

The Complex Fee schedule for the Advisor Class is lower by 0.2500% at each
graduated step. For example, if the Investor Class Complex Fee is 0.3100% for
the first $2.5 billion, the Advisor Class Complex Fee is 0.0600% (0.3100% minus
0.2500%) for the first $2.5 billion.

26 NOTES TO FINANCIAL STATEMENTS AMERICAN CENTURY INVESTMENTS

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 1997

The Board of Directors has adopted the Advisor Class Master Distribution and
Shareholder Services Plan (the Plan), pursuant to Rule 12b-1 of the Investment
Company Act of 1940. The Plan provides that the Funds will pay ACIM an annual
distribution fee equal to 0.25% and annual service fee equal to 0.25%. The fees
are computed daily and paid monthly based on the Advisor Class's average daily
closing net assets during the previous month. The distribution fee provides
compensation for distribution expenses incurred by financial intermediaries in
connection with distributing shares of the Advisor Class including, but not
limited to, payments to brokers, dealers, and financial institutions that have
entered into sales agreements with respect to shares of the Funds. The service
fee provides compensation for shareholder and administrative services rendered
by ACIM, its affiliates or independent third party providers. Fees incurred
under the Plan during the year ended December 31, 1997, were $492 and $860 for
Equity Growth and Income & Growth, respectively.

Management fees of $1,904,594 and $4,621,006 were incurred under the new
management agreement and were included in Investment Advisory Fees in the
Statements of Operations for Equity Growth and Income & Growth, respectively.
Total expenses for the seven months ended July 31, 1997 were $1,472,430 and
$3,502,748 for Equity Growth and Income & Growth, respectively. The annualized
ratios of operating expenses to average net assets for the seven months ended
July 31, 1997 were 0.63% and 0.60% for Equity Growth and Income & Growth,
respectively.

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

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

Purchases of investment securities, excluding short-term investments, for
the year ended December 31, 1997, for Equity Growth and Income & Growth totaled
$1,130,016,531 and $1,954,521,758, respectively. Sales of investment securities,
excluding short-term investments, totaled $774,883,045 and $1,214,769,007,
respectively.

As of December 31, 1997, accumulated net unrealized appreciation for Equity
Growth and Income & Growth was $77,420,982 and $282,415,239, respectively, based
on the aggregate cost of investments for federal income tax purposes of
$708,276,581 and $1,517,821,508, respectively. Accumulated net unrealized
appreciation consisted of unrealized appreciation of $89,114,760 and
$302,020,941 for Equity Growth and Income & Growth and unrealized depreciation
of $11,693,778 and $19,605,702, respectively.

ANNUAL REPORT NOTES TO FINANCIAL STATEMENTS 27

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 1997

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

The Corporation is authorized to issue 2,000,000,000 shares to each Fund. Of
these 2,000,000,000 shares, each Fund has been designated 1,000,000,000 Investor
Class shares and 250,000,000 Advisor Class shares.

Transactions in shares of the Funds were as follows:
<TABLE>
<CAPTION>
EQUITY GROWTH INCOME & GROWTH
Shares Amount Shares Amount
INVESTOR CLASS

Year ended December 31, 1997

<S> <C> <C> <C> <C>
Sold .................................. 31,535,897 $ 591,260,618 49,806,519 $ 1,175,643,093

Issued in reinvestment of distributions 4,612,659 84,728,570 7,089,192 167,281,193

Redeemed .............................. (12,731,963) (237,525,884) (18,631,102) (447,642,533)
--------------- --------------- --------------- ---------------
Net increase .......................... 23,416,593 $ 438,463,304 38,264,609 $ 895,281,753
=============== =============== =============== ===============

Year ended December 31, 1996

Sold .................................. 11,280,491 $ 180,750,520 23,349,240 $ 459,487,007

Issued in reinvestment of distributions 1,878,880 29,552,500 2,834,991 56,254,702

Redeemed .............................. (7,156,611) (113,604,164) (11,577,062) (229,637,617)
--------------- --------------- --------------- ---------------
Net increase .......................... 6,002,760 $ 96,698,856 14,607,169 $ 286,104,092
=============== =============== =============== ===============
ADVISOR CLASS

Period ended December 31, 1997(1)

Sold .................................. 29,050 $ 607,045 188,979 $ 4,885,920

Issued in reinvestment of distributions 3,111 57,112 14,057 331,899

Redeemed .............................. (3,098) (63,050) (49,987) (1,213,869)
--------------- --------------- --------------- ---------------
Net increase .......................... 29,063 $ 601,107 153,049 $ 4,003,950
=============== =============== =============== ===============
</TABLE>

(1) October 9, 1997 (commencement of sale) through December 31, 1997 for Equity
Growth and December 15, 1997 (commencement of sale) through December 31,
1997 for Income & Growth.

28 NOTES TO FINANCIAL STATEMENTS AMERICAN CENTURY INVESTMENTS

<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
EQUITY GROWTH

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

Investor Advisor
Class Class

1997 1996 1995 1994 1993 1997(1)
PER-SHARE DATA

Net Asset Value,
<S> <C> <C> <C> <C> <C> <C>
Beginning of Period ..................... $15.96 $14.25 $11.53 $12.12 $11.68 $21.61
---------- ---------- ---------- ------------ ---------- -----------
Income From Investment Operations

Net Investment Income ................. 0.27(2) 0.27 0.26 0.30 0.23 0.05(2)

Net Realized and
Unrealized Gain (Loss)
on Investment Transactions ............ 5.36 3.55 3.70 (0.33) 1.10 (0.25)
---------- ---------- ---------- ------------ ---------- -----------
Total From Investment Operations ...... 5.63 3.82 3.96 (0.03) 1.33 (0.20)
---------- ---------- ---------- ------------ ---------- -----------
Distributions

From Net Investment Income ............ (0.24) (0.26) (0.23) (0.30) (0.23) (0.06)

From Net Realized Gains on
Investment Transactions ............... (2.31) (1.85) (1.01) (0.26) (0.66) (2.31)
---------- ---------- ---------- ------------ ---------- -----------
Total Distributions ................... (2.55) (2.11) (1.24) (0.56) (0.89) (2.37)
---------- ---------- ---------- ------------ ---------- -----------
Net Asset Value, End of Period .......... $19.04 $15.96 $14.25 $11.53 $12.12 $19.04
========== ========== ========== ============ ========== ===========
Total Return(3) ....................... 36.06% 27.34% 34.56% (0.23)% 11.42% (0.50)%

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses
to Average Net Assets ................... 0.67% 0.63% 0.71% 0.75% 0.75% 0.94%(4)

Ratio of Net Investment Income
to Average Net Assets ................... 1.39% 1.74% 1.96% 2.26% 2.04% 1.14%(4)

Portfolio Turnover Rate ................. 161% 131% 126% 94% 97% 161%

Average Commission Paid per
Share of Equity Security Traded ......... $0.0441 $0.0385 $0.0320 --(5) --(5) $0.0441

Net Assets, End
of Period (in thousands) ................ $773,425 $274,433 $159,450 $97,437 $96,284 $553
</TABLE>

(1) October 9, 1997 (commencement of sale) through December 31, 1997.

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

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

(4) Annualized.

(5) Disclosure of average commission paid per share of equity security traded
was not required prior to the year ended December 31, 1995.

See Notes to Financial Statements

ANNUAL REPORT FINANCIAL HIGHLIGHTS 29

<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
INCOME & GROWTH

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

Investor
Advisor
Class Class

1997 1996 1995 1994 1993 1997(1)
PER-SHARE DATA

Net Asset Value,
<S> <C> <C> <C> <C> <C> <C>
Beginning of Period ..................... $20.16 $17.81 $13.92 $15.08 $14.11 $26.36
---------- ---------- ---------- ------------ ---------- -----------
Income From Investment Operations

Net Investment Income ................. 0.43(2) 0.44 0.42 0.44 0.43 0.01(2)

Net Realized and
Unrealized Gain (Loss)
on Investment Transactions ............ 6.40 3.79 4.64 (0.53) 1.15 0.25
---------- ---------- ---------- ------------ ---------- -----------
Total From Investment Operations ...... 6.83 4.23 5.06 (0.09) 1.58 0.26
---------- ---------- ---------- ------------ ---------- -----------
Distributions

From Net Investment Income ............ (0.39) (0.44) (0.42) (0.43) (0.43) (0.03)

From Net Realized Gains
on Investment Transactions ............ (2.29) (1.44) (0.75) (0.64) (0.18) (2.29)
---------- ---------- ---------- ------------ ---------- -----------
Total Distributions ................... (2.68) (1.88) (1.17) (1.07) (0.61) (2.32)
---------- ---------- ---------- ------------ ---------- -----------
Net Asset Value, End of Period .......... $24.31 $20.16 $17.81 $13.92 $15.08 $24.30
========== ========== ========== ============ ========== ===========
Total Return(3) ....................... 34.52% 24.15% 36.88% (0.55)% 11.31% 1.28%

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses
to Average Net Assets ................... 0.65% 0.62% 0.67% 0.73% 0.75% 0.94%(4)

Ratio of Net Investment Income
to Average Net Assets ................... 1.81% 2.32% 2.61% 2.96% 2.90% 1.22%(4)

Portfolio Turnover Rate ................. 102% 92% 70% 68% 31% 102%

Average Commission Paid per
Share of Equity Security Traded ......... $0.0443 $0.0389 $0.0300 --(5) --(5) $0.0443

Net Assets, End
of Period (in thousands) ................ $1,795,124 $717,695 $373,701 $224,939 $230,191 $3,720
</TABLE>

(1) December 15, 1997 (commencement of sale) through December 31, 1997.

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

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

(4) Annualized.

(5) Disclosure of average commission paid per share of equity security traded
was not required prior to the year ended December 31, 1995.

See Notes to Financial Statements

30 FINANCIAL HIGHLIGHTS AMERICAN CENTURY INVESTMENTS

REPORT OF INDEPENDENT ACCOUNTANTS

To the Directors of the American Century Quantitative Equity Funds and
Shareholders of the American Century Equity Growth Fund and American Century
Income & Growth Fund:

We have audited the accompanying statements of assets and liabilities,
including the schedules of investments, of American Century Equity Growth Fund
and American Century Income & Growth Fund (two of the five Funds comprising
American Century Quantitative Equity Funds) (the Funds) as of December 31, 1997,
and the related statements of operations, statements of changes in net assets,
and the financial highlights for the year then ended. These financial statements
and financial highlights are the responsibility of the Funds' management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audit. The statements of changes in net assets
as of December 31, 1996 and related financial highlights for the four years in
the period ended December 31, 1996, were audited by other auditors, whose
report, dated February 7, 1997, expressed an unqualified opinion on those
statements.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1997, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.

In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Funds as of December 31, 1997, the results of their operations, the changes in
their net assets and the financial highlights for the year then ended, in
conformity with generally accepted accounting principles.

Coopers & Lybrand L.L.P.

Kansas City, Missouri
February 10, 1998

ANNUAL REPORT REPORT OF INDEPENDENT ACCOUNTANTS 31

SHARE CLASS AND RETIREMENT ACCOUNT
INFORMATION

SHARE CLASSES

Until September 2, 1997, Equity Growth and Income & Growth funds issued one
class of fund shares, reflecting the fact that most investors bought their
shares directly from American Century. All investors paid the same annual
management fee and did not pay any commissions or other fees.

Now more shares are purchased through financial intermediaries (who
ordinarily are compensated for the services they provide). In September 1997,
American Century began to offer three classes of shares for Equity Growth and
Income & Growth funds. One class is for investors buying directly from American
Century, one is for investors buying through financial intermediaries, and the
third is for large institutional customers.

The original class of shares is called the INVESTOR CLASS. All shares issued
and outstanding before September 2, 1997, have been designated as Investor Class
shares. Investor Class shares may also be purchased after September 2, 1997.
Investor Class shareholders pay no commissions or other fees for purchase of
fund shares directly from American Century. Investors who buy Investor Class
shares through a broker-dealer may be required to pay the broker-dealer a
transaction fee. THE PRICE AND PERFORMANCE OF THE INVESTOR CLASS SHARES ARE
LISTED IN NEWSPAPERS. NO OTHER CLASS IS CURRENTLY LISTED.

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

There is also an INSTITUTIONAL CLASS, available to endowments, foundations,
defined-benefit pension plans or financial intermediaries serving these
investors. This class recognizes the relatively lower cost of serving
institutional customers and others who invest at least $5 million in an American
Century fund or at least $10 million in multiple funds. The total expense ratio
of the Institutional Class is 0.20% less than the total expense ratio of the
Investor Class shares. The Institutional Class had not commenced as of December
31, 1997, for Equity Growth or Income & Growth.

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

IMPORTANT NOTICE FOR ALL IRA AND 403(B) SHAREHOLDERS

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

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

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

SHARE CLASS AND RETIREMENT
32 ACCOUNT INFORMATION AMERICAN CENTURY INVESTMENTS

NOTES

ANNUAL REPORT NOTES 33

NOTES

34 NOTES AMERICAN CENTURY INVESTMENTS

NOTES

ANNUAL REPORT NOTES 35

BACKGROUND INFORMATION

INVESTMENT PHILOSOPHY & POLICIES

American Century's quantitative equity funds are managed to provide returns
that are representative of the U.S. stock market as a whole. The funds'
investment management team employs a computer model as a key tool in making
investment decisions. A stock-ranking model analyzes more than 2,500 U.S.
stocks, giving each a score based on growth and value measures such as cash
flow, earnings growth, and price/book ratio. Once the stocks are ranked, a
computer program helps create a portfolio that balances high-scoring stocks with
an overall risk level that is comparable to the broader stock market.

EQUITY GROWTH seeks capital appreciation by investing in a diversified
portfolio of common stocks. Its goal is to achieve a total return that exceeds
the total return of the S&P 500.

INCOME & GROWTH seeks current income and capital appreciation by investing
in a diversified portfolio of common stocks. Its goal is to achieve a total
return that exceeds the total return of the S&P 500. The fund's management team
also targets a yield that is 30% higher than the yield of the S&P 500.

COMPARATIVE INDICES

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

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

The RUSSELL 2000 is an index created by the Frank Russell Company that is
considered to be a broad measure of the stock price performance of small
companies. It is composed primarily of small-capitalization U.S. stocks.

LIPPER RANKINGS

LIPPER ANALYTICAL SERVICES, INC. is an independent mutual fund ranking
service that groups funds according to their investment objectives. Rankings are
based on average annual returns for each fund in a given category for the
periods indicated. Ratings are not included for periods of less than one year.

The Lipper categories for Equity Growth and Income & Growth are:

GROWTH FUNDS (Equity Growth)--funds that normally invest in companies whose
long-term earnings are expected to grow significantly faster than the earnings
of the stocks represented in the major unmanaged stock indices.

GROWTH & INCOME FUNDS (Income & Growth)--funds that combine a
growth-of-earnings orientation and an income requirement for level and/or rising
dividends.

INVESTMENT TEAM LEADERS

EQUITY GROWTH:
Portfolio Managers Jeff Tyler
Bill Martin

INCOME & GROWTH:
Portfolio Managers John Schniedwind
Kurt Borgwardt

36 BACKGROUND INFORMATION AMERICAN CENTURY INVESTMENTS

GLOSSARY

RETURNS

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

* AVERAGE ANNUAL RETURNS illustrate the annually compounded returns that would
have produced the fund's cumulative total returns if the fund's performance had
been constant over the entire period. Average annual returns smooth out
variations in a fund's return; they are not the same as fiscal year-by-year
results. For fiscal year-by-year returns, please refer to the "Financial
Highlights" on pages 29-30.

PORTFOLIO STATISTICS

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

* DIVIDEND YIELD--a percentage return calculated by dividing the fund's dividend
distributions over the past year by its current share price.

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

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

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

TYPES OF STOCKS

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

* GROWTH STOCKS--generally considered to be stocks of companies that have
experienced above-average earnings growth and appear likely to continue such
growth. These stocks often sell at high P/E ratios. Examples can include the
stocks of technology, healthcare and consumer goods companies.

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

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

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

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

STATISTICAL TERMINOLOGY

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

ANNUAL REPORT GLOSSARY 37

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

P.O. BOX 419200
KANSAS CITY, MISSOURI
64141-6200

INVESTOR SERVICES:
1-800-345-2021 OR 816-531-5575

AUTOMATED INFORMATION LINE:
1-800-345-8765

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

FAX: 816-340-7962

INTERNET: WWW.AMERICANCENTURY.COM

AMERICAN CENTURY QUANTITATIVE EQUITY FUNDS

INVESTMENT MANAGER
AMERICAN CENTURY INVESTMENT MANAGEMENT, INC.
KANSAS CITY, MISSOURI

THIS REPORT AND THE STATEMENTS IT CONTAINS ARE SUBMITTED FOR THE GENERAL
INFORMATION OF OUR SHAREHOLDERS. THE REPORT IS NOT AUTHORIZED FOR DISTRIBUTION
TO PROSPECTIVE INVESTORS UNLESS PRECEDED OR ACCOMPANIED BY AN EFFECTIVE
PROSPECTUS.

9802 [recycled logo]
SH-BKT-11218 Recycled
<PAGE>
ANNUAL
REPORT

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

DECEMBER 31, 1997

AMERICAN
CENTURY
GROUP

Global Gold
Global Natural Resources

TABLE OF CONTENTS

Report Highlights .......................................................... 1
Our Message to You ......................................................... 2
Market Perspective ......................................................... 3
Global Gold
Performance & Portfolio Information ............................. 5
Management Q & A ................................................ 6
Schedule of Investments ......................................... 9
Financial Highlights ............................................ 23
Global Natural Resources
Performance & Portfolio Information ............................. 11
Management Q & A ................................................ 12
Schedule of Investments ......................................... 15
Financial Highlights ............................................ 24
Statements of Assets and Liabilities ....................................... 17
Statements of Operations ................................................... 18
Statements of Changes in Net Assets ........................................ 19
Notes to Financial Statements .............................................. 20
Report of Independent Accountants .......................................... 25
Retirement Account Information ............................................. 26
Background Information
Investment Philosophy & Policies ................................ 28
Comparative Indices ............................................. 28
Lipper Rankings ................................................. 28
Investment Team Leaders ......................................... 28
Glossary ................................................................... 29

We welcome your comments or questions about this report.

See the back cover for ways to contact us by mail, phone or e-mail.

American Century and Benham Group are registered marks of American Century
Services Corporation.

AMERICAN CENTURY INVESTMENTS

REPORT HIGHLIGHTS

GOLD

* Despite brief rallies, the price of gold bullion tumbled to its lowest level
in 18 years.

* One of the most influential factors driving gold prices lower was excess
above-ground supply as central banks unloaded excess reserves.

* A mid-year announcement of gold reserve sales by Australia's central bank
and a year-end statement of similar intentions by the Swiss caused gold
prices to crumble.

* The lower costs and more diversified hedging strategies of North American
mining companies allowed them to fare better than mining companies
elsewhere.

NATURAL RESOURCES

* An overabundance of supply, unusually warm winters and, most significantly,
turbulence in Asian economies, combined to send commodity prices lower in
1997.

* Crude oil futures fell by 32%, to $17.64 a barrel. Heating oil and gasoline,
which are derived from crude oil, also fell.

* Nonferrous metals performed well early in the year, but the currency crisis
in Asia sent prices sharply lower by year's end because of slackening demand
for resources.

* Energy stocks outperformed basic materials stocks for the period thanks to
more stable demand for energy.

GLOBAL GOLD

* Due to falling gold prices, the fund posted sharp losses for 1997, but
managed to surpass the average return of other gold-oriented funds and its
benchmark's return.

* We maintained a focus on large-cap North-American gold companies like
Barrick Gold and Newmont Mining because their more effective hedging
strategies and lower production costs allowed them to weather the turbulent
market conditions better than the average small-cap gold company.

* Going forward, we will continue to monitor Asian developments, while
focusing on large-cap gold stocks. We may also look to selectively add
intermediate-cap gold production stocks, particularly from Australia.

GLOBAL NATURAL RESOURCES

* The fund outperformed the average natural resources fund, but its returns
were limited by falling commodity prices.

* Holding few gold and basic materials stocks contributed to the fund's
above-average performance.

* Going forward, we will probably maintain a bias toward energy stocks, which
we feel should perform well compared with other natural resource sectors
even if Asian economic turmoil continues in the near future.

GLOBAL GOLD

TOTAL RETURNS: AS OF 12/31/97
6 Months -25.70%*
1 Year -41.47%

NET ASSETS: $246.0 million
(AS OF 12/31/97)

INCEPTION DATE: 8/17/88

TICKER SYMBOL: BGEIX

GLOBAL
NATURAL RESOURCES

TOTAL RETURNS: AS OF 12/31/97
6 Months -5.37%*
1 Year 2.50%

NET ASSETS: $46.6 million
(AS OF 12/31/97)

INCEPTION DATE: 9/15/94

TICKER SYMBOL: BGRIX

* Not annualized.

Many of the investment terms in this report are defined in the Glossary on page
29.

ANNUAL REPORT REPORT HIGHLIGHTS 1

OUR MESSAGE TO YOU

[photo of James E. Stowers III and James M. Benham]

American Century Global Gold experienced negative returns in 1997,
reflecting a dramatic decline in the price of gold and gold stocks. The price of
gold plunged by more than 21% during the year as a number of central banks sold
gold reserves, the dollar gained in strength, and Asia's economic woes deepened.

Returns for Global Natural Resources were modestly positive for the
year--though the fund significantly outperformed many of its peers. Natural
resources stocks were hurt by concerns that Asia's troubles will significantly
lessen overall demand for many raw materials. On the following pages, our
investment management team provides further details on the markets and how your
fund was managed.

On a more personal note, 1997 was the year we said farewell to James M.
Benham, founder of the Benham Group of mutual funds. Mr. Benham, who announced
his retirement in December, was a pioneer in the no-load mutual fund industry
and the father of the first money market fund for individual investors. With the
integration of Benham and Twentieth Century successfully completed, Mr. Benham
felt it was time to step back from the business and enjoy a well-earned
retirement, confident that he leaves the funds he founded in very capable hands.
Much of the Benham culture has become a part of American Century, including the
educational investor seminar program Mr. Benham created. Two of his sons, Jim A.
Benham and Tim Benham, remain with the company to carry on the Benham tradition.

Looking forward, 1998 marks the 40th year since American Century launched
its first mutual funds. Not many fund companies can claim a 40-year track
record, or a fund family that includes nearly 70 stock, bond, money and
combination funds that provide investors with such a wide range of choice and
flexibility.

Whatever your financial goals, we believe American Century has an
outstanding lineup of funds to help you reach them.

Sincerely,

2 OUR MESSAGE TO YOU AMERICAN CENTURY INVESTMENTS

MARKET PERSPECTIVE

GOLD BULLION

The year was a difficult one for gold investors, with many more factors
depressing prices in 1997 than supporting them. Despite brief rallies in
February and early October, the price of gold tumbled from $369 per troy ounce
in January to as low as $283 per troy ounce--its lowest level in 18 years.

Increased Production

Adding to excess gold supplies was an unexpected increase in mine
production, which rose an estimated 2.3% during 1997. Overall output increased
in Australia, China, Indonesia, the U.S. and several other countries, while
tapering off in Canada, Chile and South Africa.

Two factors supporting prices during the period were a 47% jump in jewelry
consumption by India, and greater jewelry demand from the Middle East, where the
quantity of gold absorbed surpassed all previous records.

Excess Supply

One of the most influential factors driving gold prices lower for 1997 was
excess above-ground supply. The continued sentiment shift by central
banks--which hold a quarter of the world's gold reserves--away from gold as a
store of value had the greatest impact on supply and cast a pall on investor
confidence.

Sales of excess gold reserves by the Australians and Swiss had the most
detrimental impact on prices. In early July, gold prices fell sharply after
Australian central bankers announced that they had sold two-thirds of the
country's gold reserves earlier in the year. An admission that the reserves were
sold in favor of higher returns elsewhere came as an even more unwelcome shock
to the market. Within a week of the announcement, gold prices tumbled by $15.

Switzerland's impact on the market began in March, when central bankers
revealed a plan to sell reserves to fund humanitarian aid. In October, the
market was further traumatized when the Swiss Finance Ministry stated that the
country's gold reserves might be too high. Switzerland is well known for its
currency stability and staunch defense of gold, so the potential sale lent
credence to the notion that world central banks were holding too much of the
precious metal. Concerned that other European countries might follow suit,
especially to help balance their budgets before the start of European Economic
and Monetary Union, investors pushed gold prices lower.

The Asian economic crisis that began in July also had a pronounced impact on
the price of gold, but an even more dire impact on other commodities prices (see
next page). With the U.S. dollar strengthening and Southeast Asian currencies
weakening, demand for gold jewelry in Southeast Asia largely evaporated as
economic hardships grew.

The U.S. economy's steady, non-inflationary growth also tarnished gold's
allure as an inflation hedge. Instead, many overseas investors turned to
shorter-term U.S. Treasury securities, which benefited from the strengthening
U.S. dollar and high "real" interest rates (nominal rates minus inflation).

GOLD RETURNS AT A GLANCE
Total Returns for the
Year Ended 12/31/97
Gold Stocks
FT-SE(reg.tm) Gold Mines Index -41.97%
African Region -47.90%
North American Region -38.30%
Australian Region -47.90%
Average Gold-Oriented Fund(1) -42.33%

Gold Bullion
Spot Price of Gold -21.40%

U.S. Inflation
Consumer Price Index (CPI) 1.70%

(1) According to Lipper Analytical Services.

Sources: Financial Times, Dow Jones, Bloomberg Financial Markets

ANNUAL REPORT MARKET PERSPECTIVE 3

MARKET PERSPECTIVE

GOLD STOCKS

Gold stocks were hurt by the downward spiral of gold prices (see the chart
on page 3). Throughout the year, the lower costs and more-diversified hedging
strategies of large-cap gold mining stocks allowed them to weather the tempest
better than smaller-cap issues. Along those lines, North American gold stocks
performed notably better than any others during 1997. In contrast, the high
production costs faced by South African mining companies caused that area's gold
stocks to be some of 1997's worst performers. Australian mining stocks tied for
last place, partly because of the depreciation of the Australian dollar relative
to the U.S. dollar.

COMMODITIES

In general, commodities provided disappointing returns in 1997. Prices were
hurt by a barrage of factors that included an overabundance of supply, unusually
warm winters, and--most significantly--turbulence in Asian economies. The
Journal of Commerce Industrial Commodities Index fell 8.48% for the year, while
the Commodity Research Bureau Commodities Index fell 5.64% to finish at its
lowest level in three years.

Unusually warm winters in both the U.S. and Europe took a toll on crude oil
and natural gas markets, sending the energy-weighted Goldman Sachs Commodities
Index tumbling 17.25% for the year. Crude oil prices rose to a post-Persian Gulf
War high in January, but fell during the rest of the year as a result of
oversupply. Behind the increased supply were the Iraq "oil-for-aid" sales and
the continued over-supply from OPEC.

As 1997 wound to a close, OPEC announced its intention to increase
production by nearly 10%, driving prices down even further. Starting the year at
$25.92 a barrel, crude oil prices finished at $17.64-- a 32% drop. Heating oil
and gasoline, which are derived from crude oil, also fell in 1997.

Nonferrous metal prices rose during the first half of the year as the warm
winter led to an early building season. However, the economic crisis in Asia
took a heavy toll on copper (used in wires, pipes and electronics), which fell
25% in price for the year. Copper prices crumbled amid investor concern that the
turbulence in Asia--where economies collapsed and their currencies were
devalued--would quickly spread to Europe, thus eliminating two major sources of
demand. (Asia and Europe are the world's second- and third-largest copper
consumers.) In addition, news of increased copper production in late 1997 and
early 1998 came at time when prices were already falling. After a summer peak of
over $1.23 a pound, the price of copper ended the year at a meager 76 cents.

In contrast, zinc prices held up fairly well during 1997, thanks to
faster-than-expected growth in both Europe and Japan. Aluminum prices also
remained fairly stable, primarily due to the strict monitoring of supply and
demand levels by industry leaders like Alcoa, Alcan and RJ Reynolds.

NATURAL RESOURCES STOCKS

Energy

Energy stocks produced better returns than basic materials stocks returns
during 1997, but they fell overall because of declining oil and gas prices. The
best performers were international oil companies that were diversified among all
three aspects of crude oil--chemical, production and refining. The worst
performers in this sector were shares of small exploration and production
companies, which are more vulnerable than larger companies to declines in oil
prices.

Basic Materials

Basic materials stocks performed well during the second quarter, fueled in
part by the Federal Reserve's decision to hold interest rates steady after
raising them once in March.

After rising nearly 15% in the second quarter, paper stocks fell throughout
the rest of the year as an overabundance of supply and declining demand from
Asia led to lower prices overall. Problems in Asia also translated into weakened
demand for base metals, sending stocks lower as a result.

4 MARKET PERSPECTIVE AMERICAN CENTURY INVESTMENTS

<TABLE>
<CAPTION>
GLOBAL GOLD
AVERAGE ANNUAL RETURNS
6 MONTHS 1 YEAR 3 YEARS 5 YEARS LIFE OF
FUND(1)
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURNS AS OF DECEMBER 31, 1997(2)
<S> <C> <C> <C> <C> <C>
Global Gold ........................... -25.70% -41.47% -14.63% -1.27% -3.49%
Fund Benchmark(+) ..................... -24.02% -41.97% -15.91% -2.08% -3.13%(3)
Average Gold-Oriented Fund(4) ......... -29.20% -42.33% -14.54% 0.27% -3.31%(5)
Fund's Ranking Among
Gold-Oriented Funds(4) ............. -- 22 out of 41 18 out of 32 18 out of 26 13 out of 20(5)
</TABLE>

(1) Inception date was August 17, 1988.

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

(3) Since 8/31/88, the date nearest the fund's inception for which benchmark
return data are available.

(4) According to Lipper Analytical Services.

(5) Since 8/18/88, the date nearest the fund's inception for which Lipper return
data are available.

See pages 28-29 for more information about returns, the comparative indices and
Lipper fund rankings.

[mountain graph - data below]

GROWTH OF $10,000 OVER LIFE OF FUND
$10,000 investment made 8/31/88*

Value on 12/31/97
Fund Benchmark+ Global Gold MSCI World Stock Index
8/31/88 $10,000 $10,000 $10,000
9/30/88 $9,348 $9,406 $10,426
10/31/88 $9,436 $9,417 $11,122
11/30/88 $9,657 $9,608 $11,511
12/31/88 $9,187 $9,137 $11,617
1/31/89 $9,305 $9,207 $12,039
2/28/89 $10,102 $9,985 $11,966
3/31/89 $9,680 $9,540 $11,891
4/30/89 $9,086 $8,955 $12,167
5/31/89 $8,661 $8,541 $11,871
6/30/89 $9,344 $9,167 $11,739
7/31/89 $9,497 $9,278 $13,068
8/31/89 $9,974 $9,722 $12,753
9/30/89 $10,393 $10,086 $13,115
10/31/89 $10,774 $10,439 $12,680
11/30/89 $12,430 $11,963 $13,189
12/31/89 $12,323 $11,871 $13,615
1/31/90 $13,113 $12,580 $12,981
2/28/90 $12,401 $11,891 $12,427
3/31/90 $11,610 $11,131 $11,678
4/30/90 $10,196 $9,762 $11,512
5/31/90 $11,189 $10,715 $12,726
6/30/90 $10,530 $10,066 $12,638
7/31/90 $11,513 $10,999 $12,755
8/31/90 $11,249 $10,756 $11,563
9/30/90 $11,319 $10,816 $10,347
10/31/90 $9,287 $8,860 $11,314
11/30/90 $8,910 $8,515 $11,130
12/31/90 $10,001 $9,564 $11,365
1/31/91 $8,259 $7,897 $11,784
2/28/91 $8,998 $8,592 $12,876
3/31/91 $8,840 $8,429 $12,499
4/30/91 $8,529 $8,122 $12,598
5/31/91 $8,867 $8,429 $12,886
6/30/91 $9,585 $9,094 $12,092
7/31/91 $9,392 $8,909 $12,666
8/31/91 $8,402 $7,979 $12,628
9/30/91 $8,503 $8,030 $12,962
10/31/91 $9,031 $8,541 $13,174
11/30/91 $9,192 $8,684 $12,602
12/31/91 $8,987 $8,490 $13,522
1/31/92 $9,146 $8,654 $13,274
2/29/92 $8,825 $8,316 $13,047
3/31/92 $8,016 $7,567 $12,435
4/30/92 $7,673 $7,239 $12,610
5/31/92 $8,299 $7,813 $13,113
6/30/92 $8,855 $8,316 $12,676
7/31/92 $9,409 $8,808 $12,711
8/31/92 $9,236 $8,592 $13,023
9/30/92 $9,344 $8,510 $12,906
10/31/92 $8,864 $8,151 $12,558
11/30/92 $7,752 $7,321 $12,785
12/31/92 $8,254 $7,755 $12,891
1/31/93 $8,013 $7,519 $12,937
2/28/93 $8,873 $8,330 $13,245
3/31/93 $10,002 $9,440 $14,016
4/30/93 $11,510 $10,703 $14,668
5/31/93 $12,803 $11,915 $15,008
6/30/93 $13,641 $12,675 $14,885
7/31/93 $14,909 $13,651 $15,194
8/31/93 $13,703 $12,593 $15,893
9/30/93 $11,945 $11,011 $15,602
10/31/93 $13,971 $12,891 $16,034
11/30/93 $13,754 $12,901 $15,130
12/31/93 $15,017 $14,054 $15,873
1/31/94 $15,002 $14,085 $16,922
2/28/94 $14,264 $13,375 $16,706
3/31/94 $14,753 $13,643 $15,989
4/30/94 $12,941 $12,059 $16,486
5/31/94 $13,729 $12,800 $16,531
6/30/94 $13,049 $12,101 $16,488
7/31/94 $12,886 $11,977 $16,804
8/31/94 $13,666 $12,697 $17,313
9/30/94 $15,259 $14,198 $16,861
10/31/94 $13,677 $12,810 $17,344
11/30/94 $11,943 $11,124 $16,595
12/31/94 $12,494 $11,700 $16,759
1/31/95 $10,965 $10,306 $16,510
2/28/95 $11,647 $10,967 $16,754
3/31/95 $13,535 $12,630 $17,565
4/30/95 $13,271 $12,454 $18,181
5/31/95 $13,729 $12,836 $18,340
6/30/95 $13,744 $12,846 $18,338
7/31/95 $13,836 $12,929 $19,259
8/31/95 $13,911 $13,063 $18,833
9/30/95 $14,043 $13,198 $19,385
10/31/95 $12,139 $11,411 $19,084
11/30/95 $13,628 $12,681 $19,750
12/31/95 $13,641 $12,783 $20,331
1/31/96 $16,091 $15,036 $20,703
2/29/96 $16,345 $15,315 $20,832
3/31/96 $16,388 $15,211 $21,183
4/30/96 $16,336 $15,160 $21,685
5/31/96 $16,689 $15,780 $21,707
6/30/96 $14,160 $13,351 $21,821
7/31/96 $14,013 $13,134 $21,054
8/31/96 $14,263 $13,660 $21,300
9/30/96 $13,002 $12,771 $22,138
10/31/96 $13,184 $12,771 $22,296
11/30/96 $13,167 $12,606 $23,550
12/31/96 $12,804 $12,430 $23,177
1/31/97 $11,924 $11,662 $23,460
2/28/97 $13,393 $13,263 $23,734
3/31/97 $11,493 $11,167 $23,268
4/30/97 $10,311 $10,212 $24,033
5/31/97 $11,023 $10,837 $25,521
6/30/97 $9,780 $9,789 $26,798
7/31/97 $9,929 $9,767 $28,036
8/31/97 $9,914 $9,844 $26,165
9/30/97 $10,708 $10,594 $27,590
10/31/97 $8,718 $8,718 $26,142
11/30/97 $6,864 $6,809 $26,609
12/31/97 $7,430 $7,276 $26,937

Past performance does not guarantee future results. Investment return and
principal value will fluctuate, and redemption value may be more or less than
original cost.

The line representing the fund's total return includes operating expenses (such
as transaction costs and management fees) that reduce returns, while the
indices' total return lines do not.

* 8/31/88 is the date nearest the fund's inception for which comparable
performance data exist. The fund's actual inception date was 8/17/88.

PORTFOLIO AT A GLANCE
12/31/97 12/31/96
Number of Companies 54 55
Portfolio Turnover 28% 45%
Expense Ratio 0.67% 0.62%

(+) From the fund's inception through February 1996, the fund's benchmark was
the Benham North American Gold Equities Index. From March 1996 to the
present, the fund's benchmark has been the FT-SE(reg.tm) Gold Mines Index.

ANNUAL REPORT GLOBAL GOLD 5

GLOBAL GOLD

MANAGEMENT Q & A

An interview with Bill Martin, a portfolio manager on the Global Gold
investment team.

HOW DID THE FUND PERFORM IN 1997?

Due to falling gold prices, the fund posted sharp losses, but managed to
surpass the average return of other gold-oriented funds and the return of its
benchmark. For the year ended December 31, 1997, the fund returned -41.47%,
compared with the -42.33% average return of the 41 "Gold-Oriented Funds" tracked
by Lipper Analytical Services. The fund's return was also slightly above the
- -41.97% return of its benchmark, the FT-SE(reg.tm) Gold Mines Index. (See the
Total Returns table on the previous page for other fund performance
comparisons.)

The fund's overweighting in North American stocks, which performed well
compared with those in other gold-producing regions, likely helped to mitigate
the fund's losses. An underweighting in Australian and South African stocks,
which were the year's two worst performers, also helped returns.

WERE THERE ANY BRIGHT SPOTS AMONG THE FUND'S HOLDINGS?

A few stocks we held fared very well compared with the general performance
of gold stocks. One was Stillwater Mining, which finished the year down only 7%
last year. We liked Stillwater, which is the only North American platinum mining
stock available, because they were expected to increase production, and the
company's shares were available

[bar graph - data below]

GLOBAL GOLD'S ONE-YEAR RETURNS SINCE INCEPTION
(Periods ended December 31)

Global Gold Fund Benchmark+
12/88* -8.63% -8.13%
12/89 29.93% 34.13%
12/90 -19.43% -18.84%
12/91 -11.23% -10.14%
12/92 -8.65% -8.16%
12/93 81.22% 81.94%
12/94 -16.75% -16.80%
12/95 9.25% 9.18%
12/96 -2.76% -6.63%
12/97 -41.47% -41.97%

This graph illustrates the fund's returns since its inception and compares them
with the benchmark's returns. The fund's total returns include operating
expenses, while the benchmark's returns do not.

Past performance does not guarantee future results. Investment return and
principal value will fluctuate, and redemption value may be more or less than
original cost.

* Return from 8/31/88 (the date nearest the fund's inception for which
benchmark return data are available) to 12/31/88.

(+) From inception through February 1996, the fund's benchmark was the Benham
North American Gold Equities Index. From March 1996 to December 1997, the
fund's benchmark was the FT-SE(reg.tm) Gold Mines Index. For more
information about the fund's benchmark, see the Background Information on
page 28.

6 GLOBAL GOLD AMERICAN CENTURY INVESTMENTS

GLOBAL GOLD

at attractive prices. Supply disruptions with Russian output kept platinum
supplies limited, allowing prices to remain fairly flat for 1997. Since gold
prices fell sharply, while platinum prices were stable, our choice proved a good
one.

We held Euro-Nevada Mining, which fell only 5% in 1997, and we also held
Franco-Nevada Mining, which fell only 9%. These two companies stake gold claims
and then receive royalties from large companies like Barrick Gold, which are
allowed to mine the sites for a fee. Since companies like these are revenue
based and receive a steady income stream, they held their value better than
traditional gold stocks, which were hurt by falling gold prices.

BARRICK GOLD AND NEWMONT MINING REMAINED THE FUND'S TOP TWO HOLDINGS. WHY ARE
THEY ATTRACTIVE?

Barrick and Newmont are the two largest gold mining companies in the world,
based on market capitalization. Their better hedging strategies and lower
production costs allow them to weather turbulent market conditions better than
the average small-cap gold company. The two are also well positioned should
merger activity in the industry gain momentum. If gold prices turn around,
there's also the potential for these shares to be snapped up by fund managers
looking to diversify a small part of their portfolios.

SPEAKING OF PRICES TURNING AROUND, DOES IT STILL MAKE SENSE TO INVEST IN GOLD?

Absolutely. Keep in mind that gold tends to perform well when other
financial assets, like stocks and bonds, are performing poorly. With the broader
U.S. stock market having just completed a third year of record gains and U.S.
Treasury yields ending 1997 below the psychologically important 6% level, it's
not surprising that the fund's returns suffered.

However, it seems unlikely that our Goldilocks economy and impressive stock
gains will last forever. That's where diversification becomes an important part
of the picture. From a fundamental perspective, allocating a small portion of
your assets in an inflation hedge like gold may help to smooth out long-term
returns.

AS OF DECEMBER 31, 1997, THE FUND'S BENCHMARK CHANGED BACK TO A PROPRIETARY
INDEX. WHY?

Through both geographic location and company size, we want to offer
shareholders a broad-based exposure to the gold market. To achieve this, we need
the ability to purchase small-company mining stocks that we feel have the
potential to increase returns. The new benchmark will allow greater flexibility
than was offered by the previous benchmark, the FT-SE(reg.tm) Gold Mines Index.

WHAT'S YOUR OUTLOOK FOR GOLD PRICES GOING FORWARD?

Developments in Asia are likely to be a significant factor. Jewelry demand
for gold is primarily driven by Southeast Asia, China and India.

In a worst-case scenario, Asian economic turmoil could turn from bad to
disastrous. Currency devaluations in countries like Indonesia, Thailand and
Korea could potentially place too much pressure on the growth of neighboring
countries and cause further devaluations in the region. If China had to devalue
its currency in order to keep the prices of its goods competitive, Hong Kong
would likely be forced to follow suit. This

TOP TEN HOLDINGS % of fund investments

As of As of
12/31/97 6/30/97

Barrick Gold Corp. 16.0% 15.3%
Newmont Mining Corp. 13.7% 16.2%
Placer Dome Inc. 11.4% 8.9%
Normandy Mining Limited 4.5% 3.2%
Homestake Mining Co. 3.6% 3.7%
Driefontein Consolidated Ltd. 3.3% 2.8%
Battle Mountain Gold Co. 2.8% 1.1%
Euro-Nevada Mining Corporation 2.5% 2.0%
Ashanti Goldfields Company Ltd. 2.4% 2.6%
Franco Nevada Mining Corp. Ltd. 2.2% 2.1%

ANNUAL REPORT GLOBAL GOLD 7

GLOBAL GOLD

combination could in turn place enough pressure on Japan to devalue its currency
as well.

If this scenario played out, demand for gold in the area could evaporate,
causing prices to head lower until the region stabilized.

In a best-case scenario, Indonesia, Korea and Thailand would receive the
financial aid they need to stabilize their economies. China would not be forced
to devalue its currency, Japan would finally start to see its economy improve,
and growth in Europe and the U.S. would continue at a moderate pace. This could
lead to a rally in gold prices.

Any announcements of further gold reserve sales by central banks also could
play a big part in the future movement of gold prices.

WILL THE APPROACH OF EUROPEAN ECONOMIC AND MONETARY UNION (EMU) HAVE A
SIGNIFICANT IMPACT ON GOLD PRICES IN THE COMING YEAR?

Yes. During the first week of April, central bankers from EMU-member
countries will meet to set exchange-rate policies. They will also discuss the
amount of gold reserves necessary to back the new unified European currency.

If bankers decide that gold should play a strong role in the new currency,
this could give a significant lift to gold prices. This is certainly a
possibility given that Germany and France dominate the EMU, and these countries
have previously been strong defenders of gold reserves. However, there is also a
chance that the committee will decide that gold's role in backing the unified
currency will be insignificant, which could further depress prices.

WITH THIS OUTLOOK IN MIND, WHAT ARE YOUR PLANS FOR THE FUND GOING FORWARD?

We will continue to monitor developments in Asia. We are also likely to
maintain our focus on large-cap gold stocks in the near term, but may
selectively add intermediate-cap gold production stocks from Australia.

These stocks have fallen to particularly attractive levels in the wake of
last year's sharp decline in gold prices. The strength of the U.S. dollar
relative to the Australian dollar also makes these companies attractive--they
sell U.S. dollar-based gold, but pay costs in Australian dollars. That means the
companies make even larger profits since they also benefit from the difference
in exchange rates. We intend to make sure the companies we choose have skilled
management teams and plenty of cash on hand to weather the current market
environment. Another important criteria will be the company's ability to produce
gold at a very low cost.

[pie charts]

GEOGRAPHIC COMPOSITION (as of 12/31/97)
Canada 48%
U.S. 25%
South Africa 15%
Australia 10%
Ghana 2%

GEOGRAPHIC COMPOSITION (as of 6/30/97)
Canada 46%
U.S. 29%
South Africa 14%
Australia 8%
Ghana 3%

8 GLOBAL GOLD AMERICAN CENTURY INVESTMENTS

<TABLE>
<CAPTION>
SCHEDULE OF INVESTMENTS
GLOBAL GOLD

DECEMBER 31, 1997

Shares Value
- ------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS

AUSTRALIA--9.4%

1,411,000 Acacia Resources Limited(1) $ 1,286,973

300,000 Goldfields Limited 230,631

1,500,000 Great Central Mines Limited 1,612,463

1,150,000 Lihir Gold Limited(1) 1,198,760

1,716,578 Newcrest Mining Limited(1) 1,867,645

11,399,500 Normandy Mining Limited 11,065,893

1,525,000 Plutonic Resources Ltd. 4,252,341

725,000 Sons of Gwalia Limited 1,653,181
---------------------

23,167,887
---------------------

CANADA--48.3%

250,000 Arizona Star Resource Corp.(1) 398,811

159,500 Banro Resource Corporation(1) 585,884

2,111,066 Barrick Gold Corp. 39,318,603

1,189,000 Battle Mountain Gold Co. 6,985,375

275,000 Bema Gold Corp.(1) 654,189

350,000 Boliden Limited Installment
Receipts (Acquired 6/11/97,
Cost $2,019,401)(1)(2) 893,825

649,400 Cambior, Inc. 3,839,319

834,800 Echo Bay Mines Ltd.(1) 2,034,825

457,500 Euro-Nevada Mining Corporation 6,194,085

105,000 Francisco Gold Corp.(1) 771,384

279,400 Franco Nevada Mining Corp. Ltd. 5,493,189

300,000 Goldcorp, Inc. Cl A(1) 1,185,937

400,000 Golden Knight Resources, Inc.(1) 945,951

350,000 Greenstone Resources Ltd.(1) 1,665,209

175,000 Indochina Goldfields Ltd.(1) 356,306

1,148,800 Kinross Gold Corp.(1) 3,898,150

927,000 Meridian Gold Inc.(1) 2,660,589

566,300 Miramar Mining Corp.(1) 1,129,218

450,000 Nevsun Resources Ltd.(1) 1,146,056

2,217,600 Placer Dome Inc. 28,135,800

395,000 Romarco Minerals, Inc.(1) 842,925

869,500 Royal Oak Mines Inc.(1) 1,358,594

107,000 Sutton Resources Ltd.(1) 722,442

160,000 Teck Corporation Cl B 2,412,454

1,482,200 TVX Gold, Inc.(1) 5,029,153

608,500 Yamana Resources, Inc.(1) 327,826
---------------------

118,986,099
---------------------

Shares Value
- ------------------------------------------------------------------------------------

GHANA--2.4%

788,273 Ashanti Goldfields Company
Ltd. GDR $ 5,912,048
---------------------

SOUTH AFRICA--14.7%

1,342,892 Avgold Ltd.(1) 1,048,595

705,000 Beatrix Mines Limited 2,426,539

40,000 De Beers Centenary AG ADR 821,250

1,200,000 Driefontein Consolidated Ltd. 8,137,265

760,000 Elandsrand Gold Mining
Company Ltd. 1,897,462

475,000 Free State Consolidated Gold
Mines Limited 2,161,975

920,000 Kloof Gold Mining Company Ltd. 3,081,475

475,000 Randfontein Estates Gold Mining
Company, Witwaterstrand, Ltd.(1) 717,405

190,000 Southvaal Holdings Limited 2,928,182

135,000 Vaal Reefs Exploration & Mining
Company Ltd. 5,409,432

825,000 Western Areas Gold Mining
Company Ltd.(1) 4,543,306

165,000 Western Deep Levels Limited 3,051,474
---------------------

36,224,360
---------------------

UNITED STATES--23.7%

400,000 Amax Gold Inc.(1) 925,000

418,100 Crown Resources Corp.(1) 1,750,794

316,400 Freeport-McMoRan Copper &
Gold, Inc. Cl A 4,844,875

177,100 Getchell Gold Corp.(1) 4,250,400

996,276 Homestake Mining Co. 8,841,950

1,148,875 Newmont Mining Corp. 33,748,203

250,000 Stillwater Mining Co. (Acquired
8/18/95, Cost $5,375,000)(1)(2) 4,187,500
---------------------

58,548,722
---------------------

TOTAL COMMON STOCKS--98.5% 242,839,116
---------------------
(Cost $375,107,510)

See Notes to Financial Statements

ANNUAL REPORT GLOBAL GOLD 9

SCHEDULE OF INVESTMENTS
GLOBAL GOLD

DECEMBER 31, 1997

Principal Amount Value
- -------------------------------------------------------------------------------------

TEMPORARY CASH INVESTMENTS--1.5%

Repurchase Agreement, BA Security Services,
Inc., (U.S. Treasury obligations), in a joint
trading account at 6.50%, dated 12/31/97,
due 1/2/98 (Delivery value $3,601,300) $ 3,600,000
---------------------
(Cost $3,600,000)

TOTAL INVESTMENT SECURITIES--100.0% $246,439,116
=====================
(Cost $378,707,510)
</TABLE>

NOTES TO SCHEDULE OF INVESTMENTS

ADR = American Depositary Receipt

GDR = Global Depositary Receipt

(1) Non-income producing.

(2) Security was purchased under Rule 144A of the Securities Act of 1933 and,
unless registered under the Act or exempted from registration, may only be
sold to qualified institutional investors. The aggregate value of
restricted securities at December 31, 1997, was $5,081,325, which
represented 2.1% of net assets.

See Notes to Financial Statements

10 GLOBAL GOLD AMERICAN CENTURY INVESTMENTS

<TABLE>
<CAPTION>
GLOBAL NATURAL RESOURCES
AVERAGE ANNUAL RETURNS
6 MONTHS 1 YEAR 3 YEARS LIFE OF
FUND(1)
- ---------------------------------------------------------------------------------------------------------------
TOTAL RETURNS AS OF DECEMBER 31, 1997(2)
<S> <C> <C> <C> <C>
Global Natural Resources ............... -5.37% 2.50% 10.61% 8.46%
Fund Benchmark ......................... -6.35% 4.67% 11.77% 9.57%(3)
Average Natural Resources Fund(4) ...... -3.83% 0.06% 15.75% 13.53%
Fund's Ranking Among Natural
Resources Funds(4) ................... -- 17 out of 44 23 out of 34 20 out of 28
</TABLE>

(1) Inception date was September 15, 1994.

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

(3) Since 9/30/94, the date nearest the fund's inception for which benchmark
returns are available.

(4) According to Lipper Analytical Services.

See pages 28-29 for more information about returns, the fund's benchmark and
Lipper fund rankings.

[mountain graph - data below]

GROWTH OF $10,000 OVER LIFE OF FUND
$10,000 investment made 9/30/94*

Value on 12/31/97
Fund Global DJ World
Benchmark Natural Resources Stock Index
Sep-94 $10,000 $10,000 $10,000
Oct-94 $10,398 $10,355 $10,274
Nov-94 $9,743 $9,737 $9,790
Dec-94 $9,711 $9,789 $9,854
Jan-95 $9,524 $9,616 $9,660
Feb-95 $9,700 $9,789 $9,785
Mar-95 $10,157 $10,227 $10,242
Apr-95 $10,535 $10,644 $10,601
May-95 $10,584 $10,675 $10,711
Jun-95 $10,409 $10,471 $10,711
Jul-95 $10,892 $10,975 $11,223
Aug-95 $10,575 $10,625 $11,022
Sep-95 $10,673 $10,728 $11,277
Oct-95 $10,441 $10,532 $11,121
Nov-95 $10,834 $10,913 $11,483
Dec-95 $11,173 $11,199 $11,818
Jan-96 $11,402 $11,335 $12,046
Feb-96 $11,378 $11,429 $12,088
Mar-96 $11,818 $11,870 $12,283
Apr-96 $12,217 $12,228 $12,592
May-96 $12,183 $12,143 $12,617
Jun-96 $12,086 $11,996 $12,654
Jul-96 $11,670 $11,636 $12,163
Aug-96 $11,921 $11,869 $12,312
Sep-96 $12,283 $12,113 $12,821
Oct-96 $12,553 $12,526 $12,857
Nov-96 $13,039 $12,970 $13,558
Dec-96 $12,956 $12,929 $13,336
Jan-97 $13,076 $13,168 $13,455
Feb-97 $12,933 $12,658 $13,606
Mar-97 $13,200 $12,952 $13,315
Apr-97 $13,198 $12,876 $13,695
May-97 $14,057 $13,745 $14,594
Jun-97 $14,480 $14,006 $15,284
Jul-97 $15,042 $14,566 $15,999
Aug-97 $14,469 $14,237 $14,941
Sep-97 $15,308 $15,016 $15,769
Oct-97 $14,273 $14,193 $14,845
Nov-97 $13,775 $13,479 $15,076
Dec-97 $13,561 $13,252 $15,232

Past performance does not guarantee future results. Investment return and
principal value will fluctuate, and redemption value may be more or less than
original cost.

The line representing the fund's total return includes operating expenses (such
as transaction costs and management fees) that reduce returns, while the
indices' total return lines do not.

* 9/30/94 is the date nearest the fund's inception for which comparable
performance data exist. The fund's actual inception date was 9/15/94.

PORTFOLIO AT A GLANCE
12/31/97 12/31/96
Number of Companies 77 93
Portfolio Turnover 41% 53%
Expense Ratio 0.73% 0.76%

ANNUAL REPORT GLOBAL NATURAL RESOURCES 11

GLOBAL NATURAL RESOURCES

MANAGEMENT Q & A

An interview with Joe Sterling, a portfolio manager on the Global Natural
Resources investment team.

HOW DID THE FUND PERFORM IN 1997?

The fund outperformed the average natural resources fund, but its returns
were limited by the general decline in commodity prices. The fund returned
2.50%, compared with the 0.06% average return of the 44 "Natural Resources
Funds" tracked by Lipper Analytical Services. Despite this outperformance, the
fund's return lagged the 4.67% return of its benchmark, a composite of the basic
materials and energy sectors of the Dow Jones World Stock Index. (See the Total
Returns table on the previous page for other fund performance comparisons.)

WHAT'S YOUR EXPLANATION FOR THE FUND'S OUTPERFORMANCE RELATIVE TO THE AVERAGE
NATURAL RESOURCES FUND?

Holding few gold and basic materials stocks probably contributed to the
fund's outperformance. Gold stocks were hammered as gold prices plummeted over
21% in 1997. Basic materials also performed poorly for most of the year because
of Asian economic turmoil.

[bar graph - data below]

GLOBAL NATURAL RESOURCES' ONE-YEAR RETURNS
SINCE INCEPTION (Periods ended December 31)

Global Fund
Natural Resources Benchmark
12/94* -2.11% -2.89%
12/95 14.41% 15.06%
12/96 15.45% 15.95%
12/97 2.50% 4.67%

Past performance does not guarantee future results. Investment return and
principal value will fluctuate, and redemption value may be more or less than
original cost.

* Return from 9/30/94 (the date nearest the fund's inception for which benchmark
return data are available) to 12/31/94.

12 GLOBAL NATURAL RESOURCES AMERICAN CENTURY INVESTMENTS

GLOBAL NATURAL RESOURCES

Our emphasis on well-diversified international oil companies like Exxon and
Royal Dutch Petroleum also helped the fund's returns. We maintained fairly large
holdings in these industry giants because they tend to weather declines in the
price of crude oil better than oil production and exploration companies, which
are usually smaller and less diversified. As a group, oil production and
exploration companies performed poorly in 1997.

WHAT CAUSED THE FUND'S RETURN TO LAG ITS BENCHMARK?

One reason was our concentration in oil services stocks. These shares helped
the fund's returns during most of the year, but they took a hit in February,
November and December. The winter was unusually warm and crude oil prices
crumbled from $26 per barrel to around $22 in a matter of weeks. In February we
were also underweighted in basic materials, which performed surprisingly well
during that month.

The fund's returns also suffered relative to those of its benchmark in
October. Around this time, OPEC announced plans to increase production and there
was talk about raising Iraqui "oil-for-aid" supplies, which caused investors to
focus on an overabundance of crude oil. This sent prices lower and caused our
overweighting in energy stocks to dampen fund returns.

CAN YOU CITE AN OIL-SERVICES STOCK YOU HELD IN THE FUND THAT PERFORMED WELL?

A good example is Schlumberger Ltd., an international oil services company.
These types of stocks were hit by falling oil prices during the last quarter of
1997. However, Schlumberger managed to sustain its value fairly well, posting an
impressive 63.10% gain for the year.

Part of what attracted us to the company was its well-established reputation
as an industry leader that has weathered the ups and downs of market movements
fairly well. Since the industry as a whole was slightly undervalued based on
expected earnings, it made sense to hold such a high-quality stock in this area
of the market.

WHAT'S YOUR OUTLOOK FOR NATURAL RESOURCES STOCKS GOING FORWARD?

The outlook is uncertain, since it depends mainly upon how the financial
crisis in Asia plays out. Of three possible scenarios, we feel the most unlikely
is that we continue with things neither improving nor worsening.

In a worst-case scenario, however, Asian economic turmoil could turn from
bad to disastrous. Currency devaluations in countries like Indonesia, Thailand
and Korea could potentially place too much pressure on the currencies of
neighboring countries. If China had to devalue its currency

TOP TEN HOLDINGS % of fund investments

As of As of
12/31/97 6/30/97

Exxon Corp. 10.7% 9.4%
Royal Dutch Petroleum Company 7.8% 6.9%
British Petroleum Co. plc 5.7% 4.9%
Chevron Corp. 4.1% 4.0%
Mobil Corp. 3.9% 4.3%
Schlumberger Ltd. 3.5% 2.3%
ENI S.p.A. 3.3% 3.1%
Amoco Corp. 2.9% 3.4%
Elf Aquitaine SA 2.5% 1.9%
Total SA CI B 2.4% 1.8%

ANNUAL REPORT GLOBAL NATURAL RESOURCES 13

GLOBAL NATURAL RESOURCES

in order to keep the prices of its goods competitive, Hong Kong would likely be
forced to lower its peg against the U.S. dollar. This combination could in turn
place pressure on Japan to devalue its currency as well. If this scenario played
out, economic turmoil could spread to the U.S. and Europe, severely limiting
commodity prices.

WITH THIS OUTLOOK IN MIND, WHAT ARE YOUR PLANS FOR THE FUND GOING FORWARD?

We will probably maintain a bias toward energy stocks. These stocks should
perform well compared with other sectors even if Asian economic turmoil
continues in the near future. Renewed instability in the Middle East would lead
to higher crude oil prices overall, enhancing the returns of these stocks.

Specifically, we may look to pick up some oil production and exploration
stocks, which look more attractive after being pummeled late in 1997.

We will also maintain our underweighting in basic materials stocks until the
Asian situation is resolved. Until then, these stocks generally offer more risks
than we believe their potential returns merit.

[pie charts]

INDUSTRY WEIGHTINGS (as of 12/31/97)
Energy 79%
Basic Materials 21%

INDUSTRY WEIGHTINGS (as of 6/30/97)
Energy 69%
Basic Materials 31%

GEOGRAPHIC COMPOSITION (as of 12/31/97)
U.S. 51%
Europe 33%
Asia/Pacific 5%
Americas
(excluding U.S.) 7%
South Africa 4%

GEOGRAPHIC COMPOSITION (as of 6/30/97)
U.S. 44%
Europe 34%
Asia/Pacific 10%
Americas
(excluding U.S.) 8%
South Africa 4%

14 GLOBAL NATURAL RESOURCES AMERICAN CENTURY INVESTMENTS

<TABLE>
<CAPTION>
SCHEDULE OF INVESTMENTS
GLOBAL NATURAL RESOURCES

DECEMBER 31, 1997

Shares Value
- ------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS

AUSTRALIA--1.6%

Basic Materials

200,000 Normandy Mining Limited $ 194,147

179,300 Pasminco Limited 205,593

Energy

50,000 Woodside Petroleum Limited 352,461
---------------------

752,201
---------------------

AUSTRIA--1.4%

Basic Materials

10,000 Voest-Alpine Stahl AG 385,544

Energy

2,000 OMV AG 277,085
---------------------

662,629
---------------------

CANADA--6.3%

Basic Materials

27,000 Abitibi-Consolidated Inc. 378,000

9,000 Domtar, Inc. 62,655

20,000 Placer Dome Inc. 253,750

14,000 Rio Algom Ltd. 238,000

Energy

20,000 Canadian Natural Resources Ltd.(1) 428,197

17,000 Crestar Energy, Inc.(1) 261,676

35,500 Petro-Canada 645,793

12,000 Precision Drilling Corp. 292,601

15,000 Westcoast Energy Inc. 346,335
---------------------

2,907,007
---------------------

FRANCE--4.8%

Energy

9,700 Elf Aquitaine SA 1,128,563

10,000 Total SA CI B 1,088,673
---------------------

2,217,236
---------------------

GERMANY--1.2%

Basic Materials

5,000 Degussa AG 250,243

3,000 KM Europa Metal AG 316,141
---------------------

566,384
---------------------

Shares Value
- ------------------------------------------------------------------------------------

ITALY--3.3%

Energy

270,000 ENI S.p.A. $ 1,530,822
---------------------

JAPAN--2.7%

Basic Materials

30,000 Nippon Paper Industries Co. 117,778

150,000 Nippon Steel Corporation 221,984

34,000 Oji Paper Co. Ltd. 135,307

110,000 Sumitomo Metal Industries 140,858

Energy

50,000 Cosmo Oil Company 75,911

50,000 Mitsubishi Oil Company 73,995

35,000 Nippon Oil Company 90,442

50,000 Showa Shell Sekiyu 251,121

21,000 Tonen Corporation 113,361
---------------------

1,220,757
---------------------

MEXICO--1.2%

Basic Materials

25,000 Tubos de Acero de Mexico,
SA ADR(1) 540,625
---------------------

NETHERLANDS--7.8%

Energy

65,000 Royal Dutch Petroleum Company 3,569,948
---------------------

NEW ZEALAND--0.4%

Basic Materials

135,000 Fletcher Challenge Paper 176,327
---------------------

NORWAY--1.0%

Energy

26,200 Saga Petroleum ASA Cl A 451,424
---------------------

SOUTH AFRICA--3.9%

Basic Materials

7,000 Anglo American Corp. of
South Africa 282,503

105,000 Billiton Plc(1) 269,701

12,550 De Beers Centenary AG 255,307

23,000 Driefontein Consolidated Ltd. 155,964

12,000 Gold Fields of South Africa 183,705

45,000 Sasol Ltd. 470,667

4,000 Vaal Reefs Exploration & Mining
Company Ltd. 160,279
---------------------

1,778,126
---------------------

See Notes to Financial Statements

ANNUAL REPORT GLOBAL NATURAL RESOURCES 15

SCHEDULE OF INVESTMENTS
GLOBAL NATURAL RESOURCES

DECEMBER 31, 1997

Shares Value
- ------------------------------------------------------------------------------------

SPAIN--1.6%

Energy

17,000 Respol SA $ 725,280
---------------------

SWEDEN--1.9%

Basic Materials

20,000 Assidoman 506,674

30,000 Stora Kopparbergs Bergslags
Aktiebolag Cl A 378,115
---------------------

884,789
---------------------

UNITED KINGDOM--10.0%

Basic Materials

120,000 British Steel 258,546

41,416 Rio Tinto plc 512,150

Energy

40,000 BG plc 180,950

197,565 British Petroleum Co. plc 2,609,438

28,000 Burmah Castrol plc 490,017

30,000 Enterprise Oil plc 287,274

50,000 Lasmo 227,838
---------------------

4,566,213
---------------------

UNITED STATES--50.9%

Basic Materials

10,000 Allegheny Teledyne Inc. 258,750

10,700 Aluminum Co. of America 753,012

999 Freeport-McMoRan Copper & Gold,
Inc. Cl B 15,734

15,000 Mead Corp. (The) 420,000

10,100 Newmont Mining Corp. 296,687

3,000 Nucor Corp. 144,938

5,000 Rayonier, Inc. 212,813

8,200 Willamette Industries, Inc. 263,938

12,000 Worthington Industries, Inc. 197,250

Energy

15,800 Amoco Corp. 1,344,975

13,000 Anadarko Petroleum Corp. 788,937

7,500 Atlantic Richfield Co. 600,938

24,400 Chevron Corp. 1,878,800

16,000 Diamond Offshore Drilling, Inc. 770,000

15,000 El Paso Natural Gas Co. 997,500

12,000 Enron Corp. 498,750

Shares Value
- ------------------------------------------------------------------------------------

25,600 Ensco International Inc. $ 857,600

80,600 Exxon Corp. 4,931,712

14,000 Halliburton Co. 727,125

25,000 Mobil Corp. 1,804,687

9,700 Phillips Petroleum Co. 471,663

20,000 Schlumberger Ltd. 1,610,000

7,700 Sun Company, Inc. 323,881

19,400 Texaco Inc. 1,054,875

12,000 Tosco Corp. 453,750

10,000 Transocean Offshore Inc. 481,875

23,000 United Meridian Corp.(1) 646,875

13,500 Unocal Corp. 523,969
---------------------

23,331,034
---------------------

TOTAL INVESTMENT SECURITIES--100.0% $45,880,802
=====================
(Cost $40,733,684)
</TABLE>

NOTES TO SCHEDULE OF INVESTMENTS

ADR = American Depositary Receipt

(1) Non-income producing.

See Notes to Financial Statements

16 GLOBAL NATURAL RESOURCES AMERICAN CENTURY INVESTMENTS

<TABLE>
<CAPTION>
STATEMENTS OF ASSETS AND LIABILITIES

DECEMBER 31, 1997 GLOBAL GLOBAL
GOLD NATURAL RESOURCES
<S> <C> <C>
ASSETS

Investment securities, at value
(identified cost of $378,707,510
and $40,733,684, respectively) (Note 3) .... $ 246,439,116 $ 45,880,802

Foreign currency holdings, at value
(identified cost of $64,858) ............... -- 64,858

Cash ......................................... -- 227,278

Receivable for investments sold .............. 3,058,004 690,827

Receivable for capital shares sold ........... 3,114,473 --

Dividends and interest receivable ............ 68,902 81,428
--------------- ---------------
252,680,495 46,945,193
--------------- ---------------
LIABILITIES

Disbursements in excess of
demand deposit cash ........................ 1,396,524 119,968

Payable for investments purchased ............ 2,854,644 184,675

Payable for capital shares redeemed .......... 2,274,187 55,415

Accrued management fees (Note 2) ............. 136,034 27,987

Accrued expenses and other liabilities ....... 3,794 941
--------------- ---------------
6,665,183 388,986
--------------- ---------------
Net Assets ................................... $ 246,015,312 $ 46,556,207
=============== ===============
CAPITAL SHARES,
$10.00 PAR VALUE

Authorized ................................... 2,000,000,000 2,000,000,000
=============== ===============
Outstanding .................................. 38,831,961 4,056,841
=============== ===============
Net Asset Value Per Share .................... $ 6.34 $ 11.48
=============== ===============
NET ASSETS CONSIST OF:

Capital (par value and paid-in surplus) ...... $ 414,463,059 $ 41,884,648

Undistributed net investment income (loss) ... 1,568 (5,062)

Accumulated net realized loss on
investment and foreign currency transactions (36,176,413) (469,273)

Net unrealized appreciation (depreciation)
on investments and translation
of assets and liabilities in foreign
currencies (Note 3) ........................ (132,272,902) 5,145,894
--------------- ---------------
$ 246,015,312 $ 46,556,207
=============== ===============
See Notes to Financial Statements
</TABLE>

ANNUAL REPORT STATEMENTS OF ASSETS AND LIABILITIES 17

STATEMENTS OF OPERATIONS

YEAR ENDED DECEMBER 31, 1997 GLOBAL GLOBAL
GOLD NATURAL RESOURCES
INVESTMENT INCOME

Income:

Dividends (net of foreign taxes withheld of
$256,930 and $91,803, respectively) ..... $ 5,074,520 $ 1,291,158

Interest .................................. 526,720 70,491
------------- -----------
5,601,240 1,361,649
------------- -----------
Expenses (Note 2):

Investment advisory fees .................. 1,534,300 281,767

Transfer agency fees ...................... 320,161 63,879

Administrative fees ....................... 210,125 34,367

Printing and postage ...................... 123,897 21,071

Custodian fees ............................ 61,027 18,992

Registration and filing fees .............. 24,690 13,646

Directors' fees and expenses .............. 14,963 8,367

Auditing and legal fees ................... 12,593 2,585

Telephone expenses ........................ 11,074 1,702

Organizational expense .................... -- 4,958

Other operating expenses .................. 34,740 7,069
------------- -----------
Total expenses .......................... 2,347,570 458,403

Amount waived (Note 2) .................... -- (20,559)
------------- -----------
Net expenses ............................ 2,347,570 437,844
------------- -----------
Net investment income ..................... 3,253,670 923,805
------------- -----------
REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY (NOTE 3)

Net realized gain (loss) on:

Investments ............................... (32,067,470) 1,066,161

Foreign currency transactions ............. (57,962) (24,455)
------------- -----------
(32,125,432) 1,041,706
------------- -----------
Change in net unrealized appreciation
(depreciation) on:

Investments ............................... (153,555,973) 83,777

Translation of assets and
liabilities in foreign currencies ....... (1,556) (2,220)
------------- -----------
(153,557,529) 81,557
------------- -----------
Net realized and unrealized gain (loss)
on investments and foreign currency ..... (185,682,961) 1,123,263
------------- -----------
Net Increase (Decrease) in Net Assets
Resulting from Operations ................. $(182,429,291) $ 2,047,068
============= ===========
See Notes to Financial Statements

18 STATEMENTS OF OPERATIONS AMERICAN CENTURY INVESTMENTS

<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS

YEARS ENDED DECEMBER 31, 1997 GLOBAL GOLD GLOBAL NATURAL RESOURCES
AND DECEMBER 31, 1996

Increase (Decrease) in Net Assets 1997 1996 1997 1996

OPERATIONS

<S> <C> <C> <C> <C>
Net investment income ..................... $ 3,253,670 $ 2,534,641 $ 923,805 $ 850,340

Net realized gain (loss) on investments and
foreign currency transactions ........... (32,125,432) 65,194,511 1,041,706 1,509,916

Change in net unrealized appreciation
(depreciation) on investments and
translation of assets and liabilities
in foreign currencies ................... (153,557,529) (75,033,176) 81,557 3,425,997
------------- ------------- ------------ ------------
Net increase (decrease) in net assets
resulting from operations ............... (182,429,291) (7,304,024) 2,047,068 5,786,253
------------- ------------- ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS

From net investment income ................ (3,534,937) (2,133,106) (938,125) (823,849)

From net realized gains on
investment transactions ................. (7,324,988) (23,423,049) (1,946,841) (1,137,854)
------------- ------------- ------------ ------------
Decrease in net assets from distributions . (10,859,925) (25,556,155) (2,884,966) (1,961,703)
------------- ------------- ------------ ------------
CAPITAL SHARE TRANSACTIONS

Proceeds from shares sold ................. 498,502,780 591,451,544 68,396,071 82,201,900

Proceeds from reinvestment of distributions 10,054,826 22,848,730 2,772,120 1,095,990

Payments for shares redeemed .............. (501,839,627) (686,546,686) (89,795,472) (51,258,512)
------------- ------------- ------------ ------------
Net increase (decrease) in net assets
from capital share transactions ......... 6,717,979 (72,246,412) (18,627,281) 32,039,378
------------- ------------- ------------ ------------
Net increase (decrease) in net assets ..... (186,571,237) (105,106,591) (19,465,179) 35,863,928

NET ASSETS

Beginning of year ......................... 432,586,549 537,693,140 66,021,386 30,157,458
------------- ------------- ------------ ------------
End of year ............................... $ 246,015,312 $ 432,586,549 $ 46,556,207 $ 66,021,386
============= ============= ============ ============
Undistributed net investment income (loss) $ 1,568 $ 345,530 $ (5,062) $ 31,595
============= ============= ============ ============
TRANSACTIONS IN SHARES
OF THE FUNDS

Sold ...................................... 56,650,525 43,103,702 5,448,117 7,111,409

Issued in reinvestment of distributions ... 1,572,865 2,023,411 241,208 93,973

Redeemed .................................. (57,572,936) (50,429,618) (7,174,926) (4,492,484)
------------- ------------- ------------ ------------
Net increase (decrease) ................... 650,454 (5,302,505) (1,485,601) 2,712,898
============= ============= ============ ============
</TABLE>

See Notes to Financial Statements

ANNUAL REPORT STATEMENTS OF CHANGES IN NET ASSETS 19

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 1997

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION--American Century Quantitative Equity Funds (the Corporation)
is registered under the Investment Company Act of 1940 as an open-end management
investment company. American Century Global Gold Fund (Global Gold) and American
Century Global Natural Resources Fund (Global Natural Resources) (the Funds) are
two of the five funds issued by the Corporation. The Funds are non-diversified
under the 1940 Act. Global Gold's investment objective is to seek to realize a
total return (capital growth and dividends) consistent with investment in
securities of companies that are engaged in mining, processing, fabricating or
distributing gold or other precious metals throughout the world. Global Natural
Resources' investment objective is to seek to realize a total return consistent
with investment in companies that are engaged in the natural resources industry.
The Funds invest primarily in equity securities. The following significant
accounting policies, related to the Funds, are in accordance with accounting
policies generally accepted in the investment company industry.

FOREIGN CURRENCY TRANSACTIONS--The accounting records of the Funds are
maintained in U.S. dollars. All assets and liabilities initially expressed in
foreign currencies are converted into U.S. dollars at prevailing exchange rates.
Purchases and sales of investment securities, dividend and interest income, and
certain expenses are translated at the rates of exchange prevailing on the
respective dates of such transactions.

Net realized foreign currency exchange gains or losses arise from sales of
foreign currencies and the difference between asset and liability amounts
initially stated in foreign currencies and the U.S. dollar value of the amounts
actually received or paid. Net unrealized foreign currency exchange gains or
losses arise from changes in the value of assets and liabilities, other than
portfolio securities, resulting from changes in the exchange rates.

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

FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS--The Funds may enter into
forward foreign currency exchange contracts for the purpose of settling specific
purchases or sales of securities denominated in a foreign currency or to hedge
the Fund's exposure to foreign currency exchange rate fluctuations. When
required, the Funds will segregate assets in an amount sufficient to cover their
obligations under the hedge contracts. The net U.S. dollar value of foreign
currency underlying all contractual commitments held by the Funds and the
resulting unrealized appreciation or depreciation are determined daily using
prevailing exchange rates. Forward contracts involve elements of market risk in
excess of the amount reflected in the Statements of Assets and Liabilities. The
Funds bear the risk of an unfavorable change in the foreign currency exchange
rate underlying the forward contract. Additionally, losses may arise if the
counterparties do not perform under the contract terms.

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

20 NOTES TO FINANCIAL STATEMENTS AMERICAN CENTURY INVESTMENTS

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 1997

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

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

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

As of December 31, 1997, Global Gold had an accumulated net realized loss
carryover for federal income tax purposes of approximately $13,960,000 (expiring
2005) which may be used to offset future taxable gains.

USE OF ESTIMATES--The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of increases and decreases in net assets
from operations during the period. Actual results could differ from these
estimates.

ORGANIZATIONAL COSTS--Costs incurred by Global Natural Resources in
connection with the organization, initial registration, and public offering of
shares are being amortized on a straight-line basis over a five-year period
ending September 1999.

ADDITIONAL INFORMATION--Effective January 15, 1998, Funds Distributor, Inc.
(FDI) became the Corporation's distributor. Certain officers of FDI are also
officers of the Corporation.

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

The shareholders of the Funds approved a new management agreement with ACIM
on July 30, 1997, effective August 1, 1997, which replaced the previously
existing contracts between the Funds and Benham Management Corporation and
American Century Services Corporation (ACSC) for advisory, administrative and
transfer agency services. Under the agreement, ACIM will provide all services
required by the Funds in exchange for one unified management fee. Expenses
excluded from this agreement are brokerage, taxes, portfolio insurance,
interest, fees and expenses of the Directors who are not considered "interested
persons" as defined in the Investment Company Act of 1940 (including counsel
fees) and extraordinary expenses. The annual rate at which this fee is assessed
is determined monthly in a two-step process: First, a fee rate schedule is
applied to the net assets of all of the funds in the Fund's investment category
which are managed by ACIM (the "Investment Category Fee"). The overall
investment objective of each Fund determines its Investment Category. The three
investment categories are: the Money Market Fund Category, the Bond Fund
Category, and the Equity Fund Category. The Funds are included in the Equity
Fund Category. Second, a separate fee rate schedule is applied to the net assets
of all of the funds managed by ACIM (the "Complex Fee"). The Investment Category
Fee and the Complex Fee are then added to determine the unified management fee
rate. The management fee is paid monthly by each Fund based on each Fund's
aggregate average daily net assets during the previous month multiplied by the
monthly management fee rate.

The annualized Investment Category Fee schedule for each Fund is as follows

ANNUAL REPORT NOTES TO FINANCIAL STATEMENTS 21

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 1997

The annualized Complex Fee schedule (for all Funds) is as follows:

Management fees of $900,609 and $161,611 were incurred under the new
management agreement and included in Investment Advisory Fees in the Statements
of Operations for the Global Gold and Global Natural Resources, respectively.
Total expenses (net of amount waived), under the previous agreement for the
seven months ended July 31, 1997 were $1,446,961 and $276,233 for Global Gold
and Global Natural Resources, respectively. The annualized ratio of operating
expenses to average net assets for the seven months ended July 31, 1997 were
0.64% and 0.75% for Global Gold and Global Natural Resources, respectively.

Certain officers and directors of the Corporation are also officers and/or
directors, and, as a group, controlling stockholders of American Century
Companies, Inc. (ACC), the parent of the Corporation's investment manager, ACIM,
the Corporation's transfer agent, ACSC, and the registered broker-dealer,
American Century Investment Services, Inc.

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

Purchases of securities, excluding short-term investments, for Global Gold
and Global Natural Resources totaled $96,081,286 and $23,975,548, respectively.
Sales of securities, excluding short-term investments, for Global Gold and
Global Natural Resources totaled $99,692,450 and $43,833,573, respectively. As
of December 31, 1997, accumulated net unrealized appreciation (depreciation) for
Global Gold and Global Natural Resources was $(139,422,719) and $5,083,409,
respectively, based on the aggregate cost of investments for federal income tax
purposes of $385,861,835 and $40,797,393, respectively. Accumulated net
unrealized appreciation (depreciation) consisted of unrealized appreciation of
$15,950,352 and $9,638,131 for Global Gold and Global Natural Resources and
unrealized depreciation of $155,373,071 and $4,554,722, respectively.

22 NOTES TO FINANCIAL STATEMENTS AMERICAN CENTURY INVESTMENTS

<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
GLOBAL GOLD

For a Share Outstanding Throughout the Years Ended December 31

1997 1996 1995 1994 1993
PER-SHARE DATA

Net Asset Value,
<S> <C> <C> <C> <C> <C>
Beginning of Year ........................... $11.33 $12.37 $11.33 $13.67 $7.55
------------ ------------ ------------- ------------ -----------
Income From Investment Operations

Net Investment Income ..................... 0.09 0.06 0.02 0.03 0.01

Net Realized and Unrealized Gain (Loss)
on Investment Transactions ................ (4.79) (0.40) 1.03 (2.32) 6.12
------------ ------------ ------------- ------------ -----------
Total From Investment Operations .......... (4.70) (0.34) 1.05 (2.29) 6.13
------------ ------------ ------------- ------------ -----------
Distributions

From Net Investment Income ................ (0.09) (0.06) (0.01) (0.02) (0.01)

From Net Realized Gains
on Investment Transactions ................ (0.20) (0.64) -- -- --

In Excess of Net Realized Gains ........... -- -- -- (0.03) --
------------ ------------ ------------- ------------ -----------
Total Distributions ....................... (0.29) (0.70) (0.01) (0.05) (0.01)
------------ ------------ ------------- ------------ -----------
Net Asset Value, End of Year ................ $6.34 $11.33 $12.37 $11.33 $13.67
============ ============ ============= ============ ===========
Total Return(1) ........................... (41.47)% (2.76)% 9.25% (16.75)% 81.22%

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses
to Average Net Assets ....................... 0.67% 0.62% 0.61% 0.61% 0.72%

Ratio of Net Investment Income
to Average Net Assets ....................... 0.92% 0.46% 0.17% 0.20% 0.23%

Portfolio Turnover Rate ..................... 28% 45% 28% 42% 28%

Average Commission Paid per
Share of Equity Security Traded ............. $0.0201 $0.0290 $0.0350 --(2) --(2)

Net Assets, End
of Year (in thousands) ...................... $246,015 $432,587 $537,693 $568,030 $616,347
</TABLE>

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

(2) Disclosure of average commission paid per share of equity security traded
was not required prior to the year ended December 31, 1995.

See Notes to Financial Statements

ANNUAL REPORT FINANCIAL HIGHLIGHTS 23

<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
GLOBAL NATURAL RESOURCES

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

1997 1996 1995 1994(1)
PER-SHARE DATA

Net Asset Value,
<S> <C> <C> <C> <C>
Beginning of Period ......................... $11.91 $10.66 $9.61 $10.00
------------ ------------ ------------- ------------
Income From Investment Operations

Net Investment Income ..................... 0.22 0.17 0.16 0.07

Net Realized and Unrealized Gain (Loss)
on Investment Transactions ................ 0.08 1.46 1.22 (0.42)
------------ ------------ ------------- ------------
Total From Investment Operations .......... 0.30 1.63 1.38 (0.35)
------------ ------------ ------------- ------------
Distributions

From Net Investment Income ................ (0.23) (0.17) (0.16) (0.04)

From Net Realized Gains
on Investment Transactions ................ (0.50) (0.21) (0.17) --
------------ ------------ ------------- ------------
Total Distributions ....................... (0.73) (0.38) (0.33) (0.04)
------------ ------------ ------------- ------------
Net Asset Value, End of Period .............. $11.48 $11.91 $10.66 $9.61
============ ============ ============= ============
Total Return(2) ........................... 2.50% 15.45% 14.41% (3.48)%

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses
to Average Net Assets ....................... 0.73%(3) 0.76% 0.76% --

Ratio of Net Investment Income
to Average Net Assets ....................... 1.55%(3) 1.78% 2.02% 2.74% (4)

Portfolio Turnover Rate ..................... 41% 53% 39% --

Average Commission Paid per
Share of Equity Security Traded ............. $0.0254 $0.0305 $0.0280 -- (5)

Net Assets, End
of Period (in thousands) .................... $46,556 $66,021 $30,157 $18,972
</TABLE>

(1) September 15, 1994 (inception) through December 31, 1994.

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

(3) A portion of the management fee was waived during the year ended December
31, 1997. In absence of the fee waiver, the ratio of operating expenses to
average net assets would have been 0.77% and the ratio of net investment
income to average net assets would have been 1.51%.

(4) Annualized.

(5) Disclosure of average commission paid per share of equity security traded
was not required prior to the year ended December 31, 1995.

See Notes to Financial Statements

24 FINANCIAL HIGHLIGHTS AMERICAN CENTURY INVESTMENTS

REPORT OF INDEPENDENT ACCOUNTANTS

To the Directors of the American Century Quantitative Equity Funds and
Shareholders of the American Century Global Gold Fund and American Century
Global Natural Resources Fund:

We have audited the accompanying statements of assets and liabilities,
including the schedules of investments, of American Century Global Gold Fund and
American Century Global Natural Resources Fund (two of the five Funds comprising
American Century Quantitative Equity Funds) (the Funds) as of December 31, 1997,
and the related statements of operations, statements of changes in net assets,
and the financial highlights for the year then ended. These financial statements
and financial highlights are the responsibility of the Funds' management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audit. The statements of changes in net assets
as of December 31, 1996 and the financial highlights for each of the periods
presented therein, were audited by other auditors, whose report, dated February
7, 1997, expressed an unqualified opinion on those statements.

In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the Funds as of December 31, 1997, the results of their operations, the
changes in their net assets and the financial highlights for the year then
ended, in conformity with generally accepted accounting principles.

Coopers & Lybrand L.L.P.

Kansas City, Missouri
February 10, 1998

ANNUAL REPORT REPORT OF INDEPENDENT ACCOUNTANTS 25

RETIREMENT ACCOUNT INFORMATION

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

26 RETIREMENT ACCOUNT INFORMATION AMERICAN CENTURY INVESTMENTS

NOTES

ANNUAL REPORT NOTES 27

BACKGROUND INFORMATION

INVESTMENT PHILOSOPHY & POLICIES

The American Century group offers eight equity funds, including three
"specialty" equity funds that concentrate their holdings in specific industries
or sectors of the stock market. These funds typically respond differently than
general equity funds to changing market or economic conditions. The funds are
managed to provide a broad representation of the respective industries. Due to
the limited focus of these funds, they may experience greater volatility than
funds with a broader investment strategy. They are not intended to serve as a
complete investment program.

GLOBAL GOLD seeks to realize a total return consistent with investment in
securities of companies that are engaged in mining, processing, fabricating or
distributing gold or other precious metals throughout the world.

The fund attempts to match the risk characteristics of the market for gold
and gold-related equity securities, and to produce returns indicative of
performance in the worldwide gold equities market.

GLOBAL NATURAL RESOURCES seeks to realize a total return consistent with
investment in companies that are engaged in the natural resources industries.

The fund invests primarily in the stocks of foreign and U.S. companies
included in the Energy and Basic Materials sectors of the Dow Jones World Stock
Index(1) (DJWSI), excluding chemical companies.

COMPARATIVE INDICES

The indices listed below are used in the report to serve as a comparison for
the performance of a fund. They are not investment products available for
purchase.

The FT-SE(reg.tm) GOLD MINES INDEX(2) consists of 31 gold mining companies
in five countries and is considered a broad measure of the worldwide gold
equities market.

The DOW JONES WORLD STOCK INDEX (DJWSI), created by the editors of The Wall
Street Journal, consists of 2,800 stocks in 29 countries and is divided into
nine broad market sectors. We created the Global Natural Resources fund's
benchmark index using the companies represented in two of these sectors--Basic
Materials and Energy. We altered the Basic Materials sector to exclude chemical
companies because they do not stockpile natural resources.

The MORGAN STANLEY WORLD STOCK INDEX is a widely followed group of stocks
from 22 different countries including the U.S. and Canada.

LIPPER RANKINGS

LIPPER ANALYTICAL SERVICES, INC. is an independent mutual fund ranking
service that groups funds according to their investment objectives. Rankings are
based on average annual returns for each fund in a given category for the
periods indicated. Rankings are not included for periods less than one year.

The Lipper categories for Global Gold and Global Natural Resources are:

GOLD-ORIENTED FUNDS (Global Gold)--funds that invest at least 65% of their
assets in shares of gold mines, gold-oriented mining finance houses, gold coins
or bullion.

NATURAL RESOURCES FUNDS (Global Natural Resources)--funds that invest at
least 65% of their assets in natural resources stocks.

INVESTMENT TEAM LEADERS

Portfolio Managers Bill Martin
Joe Sterling

(1) The DJWSI is the property of Dow Jones & Company, Inc., which is not
affiliated with American Century.

(2) The FT-SE Gold Mines Index is calculated by FT-SE International Limited in
conjunction with the Institute of Actuaries. The FT-SE Gold Mines Index is a
trademark of the London Stock Exchange Limited and the Financial Times Ltd. and
is used by FT-SE International Limited under license. FT-SE International
Limited does not sponsor, endorse or promote the fund.

28 BACKGROUND INFORMATION AMERICAN CENTURY INVESTMENTS

GLOSSARY

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

PORTFOLIO STATISTICS

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

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

TYPES OF STOCKS

ANNUAL REPORT GLOSSARY 29

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

P.O. BOX 419200
KANSAS CITY, MISSOURI
64141-6200

INVESTOR SERVICES:
1-800-345-2021 OR 816-531-5575

AUTOMATED INFORMATION LINE:
1-800-345-8765

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

FAX: 816-340-7962

INTERNET: WWW.AMERICANCENTURY.COM

AMERICAN CENTURY QUANTITATIVE EQUITY FUNDS

INVESTMENT MANAGER
AMERICAN CENTURY INVESTMENT MANAGEMENT, INC.
KANSAS CITY, MISSOURI

9802 [recycled logo]
SH-BKT-11219 Recycled
<PAGE>
ANNUAL
REPORT

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

DECEMBER 31, 1997

AMERICAN
CENTURY
GROUP

Utilities

TABLE OF CONTENTS

Report Highlights ......................................................... 1
Our Message to You ........................................................ 2
Market Perspective ........................................................ 3
Performance & Portfolio Information ....................................... 4
Management Q & A .......................................................... 5
Schedule of Investments ................................................... 8
Statement of Assets and Liabilities ....................................... 10
Statement of Operations ................................................... 11
Statements of Changes in Net Assets ....................................... 12
Notes to Financial Statements ............................................. 13
Financial Highlights ...................................................... 15
Report of Independent Accountants ......................................... 16
Retirement Account Information ............................................ 17
Background Information
Investment Philosophy & Policies ............................... 20
Comparative Indices ............................................ 20
Lipper Rankings ................................................ 20
Investment Team Leaders ........................................ 20
Glossary .................................................................. 21

We welcome your comments or questions about this report.

See the back cover for ways to contact us by mail, phone or e-mail.

American Century and Benham Group are registered marks of American Century
Services Corporation.

AMERICAN CENTURY INVESTMENTS

REPORT HIGHLIGHTS

MARKET PERSPECTIVE

* Utilities stocks produced excellent returns during 1997. The New York Stock
Exchange (NYSE) Utilities Index returned 34.05% for the year, exceeding the
33.36% return of the Standard & Poor's 500 stock index.

* The fourth quarter of 1997 was utilities' best quarter in five years--the
NYSE Utilities Index returned almost 18%.

* Utilities stocks benefited during the fourth quarter from strong demand from
investors looking for stocks with little exposure to Southeast Asia.

* Declining interest rates throughout the year also helped utilities.

* Telecommunications stocks outperformed other utility sectors. Electric
utilities also performed well, though they significantly trailed telecom
stocks.

UTILITIES

* The fund's 35.82% total return for 1997 ranked #1 out of 94 utilities funds
tracked by Lipper Analytical Services.

* In addition to producing a superior total return, the fund also yielded more
current income than the average utilities fund.

* Half the fund was in telecommunications stocks. That's because we manage the
fund relative to a benchmark that's about 50% telecom. We felt these stocks
offered attractive earnings growth at reasonable prices.

* Though we have a generally optimistic outlook for the utilities group, we
caution investors not to expect a repeat of last year's 30%-plus returns.

* Going forward, we'll continue to use the same disciplined, quantitative
management strategy that has helped the fund achieve solid long-term
returns.

UTILITIES

TOTAL RETURNS: AS OF 12/31/97
6 Months 24.60%*
1 Year 35.82%

NET ASSETS: $210 million
(AS OF 12/31/97)

INCEPTION DATE: 3/1/93

TICKER SYMBOL: BULIX

* Not annualized.

Many of the investment terms in this report are defined in the Glossary on page
21.

ANNUAL REPORT REPORT HIGHLIGHTS 1

OUR MESSAGE TO YOU

[photo of James E. Stowers III and James M. Benham]

The American Century Utilities fund provided exceptional returns for its
investors in 1997. The fund outperformed not only the S&P 500 and the NYSE
Utilities Index, but also all of its peers in the utilities category. Its
impressive performance earned it a place as one of the "Best Mutual Funds" in
U.S. News & World Report's 1998 Mutual Funds Guide. Of course, past performance
is no guarantee of future results.

Utilities stocks overall had a very strong run near the end of the year.
When the crisis developed in Asian financial markets, many U.S. investors turned
to domestic utilities stocks because of their stable cash flow and limited
exposure to Asia. Tame inflation and declining interest rates also boosted
utilities stocks, whose dividend payments increase in value when inflation and
interest rates are low. On the following pages, our investment team provides
further details on the market and how the fund was managed.

On a more personal note, 1997 was the year we said farewell to James M.
Benham, founder of the Benham Group of mutual funds. Mr. Benham, who announced
his retirement in December, was a pioneer in the no-load mutual fund industry
and the father of the first money market fund for individual investors. With the
integration of Benham and Twentieth Century successfully completed, Mr. Benham
felt it was time to step back from the business and enjoy a well-earned
retirement, confident that he leaves the funds he founded in very capable hands.
Much of the Benham culture has become a part of American Century, including the
educational investor seminar program Mr. Benham created. Two of his sons, Jim A.
Benham and Tim Benham, remain with the company to carry on the Benham tradition.

Whatever your financial goals, we believe American Century has an
outstanding lineup of funds to help you reach them.

Sincerely,

2 OUR MESSAGE TO YOU AMERICAN CENTURY INVESTMENTS

MARKET PERSPECTIVE

EXCEPTIONAL PERFORMANCE

Utilities stocks produced outstanding investment results-- the New York
Stock Exchange Utilities Index returned 34.05% in 1997. By comparison, the
Standard & Poor's 500 stock index returned 33.36% (see the accompanying graph).

FOURTH-QUARTER RALLY

After underperforming the broader market early in the year, utilities stocks
produced their best performance in five years during the fourth quarter of 1997.
For the quarter, the NYSE Utilities Index rose almost 18%, while the S&P 500 was
up only about 3%.

Turmoil in Asian financial markets in late 1997 caused many non-utilities
stocks to slump. Investors worried that a slowdown in Asia could hurt the
profits of U.S. companies doing business overseas. But investor demand for
utilities stocks rose sharply in the fourth quarter because few domestic
utilities have exposure to Asia. In addition, utilities continue to be viewed as
defensive stocks because of their relatively stable cash flow and dividend
yield.

Declining interest rates also helped utilities stocks, particularly in the
fourth quarter. Utilities often track the bond market because the high dividends
paid by many utility companies tend to mimic a bond's coupon payments.

Interest rates fell sharply because inflation rose at the slowest pace in a
dozen years during 1997, and because there was strong demand for bonds from
investors looking for a safe haven from volatile equity markets.

Utilities also benefited from being attractively valued relative to the
broader market, which they lagged in 1996 and much of 1997. Mergers also
contributed to utilities' gains. Stockholders generally like mergers because
they eliminate inefficiencies and increase the diversity and cash flow of the
acquiring company's business.

PERFORMANCE BY SECTOR

Telecommunications was the top-performing utility group. For the year, the
Standard & Poor's Telephone Index rose 40.12%. Telecom performed so well in part
because of progress toward deregulation. Deregulation increased competition and
sparked a number of mergers, promoting efficiency.

Electric utilities also performed well, with the S&P Electric Companies
Index up 26.33% for the year. Electric companies that performed well pursued
growth through mergers or alliances with natural gas companies. Duke Energy is a
good example of an electric company that expects to increase earnings using this
strategy.

Natural gas stocks lagged the performance of telecom and electric companies
but still produced solid returns. For the year, the S&P Natural Gas Index rose
18%.

[line graph - data below]

S&P 500 vs. NYSE UTILITIES INDEX (Growth of $1.00)

Value on 12/31/97
NYSE
S&P 500 Utilities Index
12/31/96 1.00 1.00
1/31/97 1.06 1.04
2/28/97 1.07 1.05
3/31/97 1.03 1.00
4/30/97 1.09 1.02
5/31/97 1.15 1.07
6/30/97 1.21 1.12
7/31/97 1.30 1.15
8/31/97 1.23 1.11
9/30/97 1.30 1.18
10/31/97 1.25 1.18
11/30/97 1.31 1.28
12/31/97 1.33 1.34

NYSE Utilities Index 34.05%
S&P 500 33.36%

Source: Bloomberg Financial Markets

ANNUAL REPORT MARKET PERSPECTIVE 3

<TABLE>
<CAPTION>
PERFORMANCE & PORTFOLIO INFORMATION

AVERAGE ANNUAL RETURNS
6 MONTHS 1 YEAR 3 YEARS LIFE OF
FUND(1)
- ---------------------------------------------------------------------------------------------------------
TOTAL RETURNS AS OF DECEMBER 31, 1997(2)
<S> <C> <C> <C> <C>
Utilities .............................. 24.60% 35.82% 24.52% 13.60%
NYSE Utilities Index ................... 20.00% 34.05% 24.36% 13.57%
Average Utility Fund(3) ................ 16.83% 25.69% 20.45% 11.91%(4)
Fund's Ranking Among Utility Funds(3) .. -- 1 out of 94 6 out of 73 10 out of 35(4)
</TABLE>

(1) Inception date was March 1, 1993.

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

(3) According to Lipper Analytical Services.

(4) Since 3/4/93, the date nearest the fund's inception for which data are
available.

See pages 20-21 for more information about returns, the comparative index and
Lipper fund rankings.

[mountain graph - data below]

GROWTH OF $10,000 OVER LIFE OF FUND
$10,000 investment made 3/1/93

Value on 12/31/97
Utilities S&P 500 NYSE Utilities Index
2/28/93 $10,000 $10,000 $10,000
3/31/93 $10,223 $10,287 $10,258
4/30/93 $10,126 $10,026 $10,060
5/31/93 $10,161 $10,253 $10,069
6/30/93 $10,590 $10,335 $10,455
7/31/93 $10,787 $10,281 $10,645
8/31/93 $11,249 $10,634 $11,112
9/30/93 $11,264 $10,601 $11,078
10/31/93 $11,187 $10,807 $11,073
11/30/93 $10,596 $10,667 $10,493
12/31/93 $10,659 $10,847 $10,614
1/31/94 $10,706 $11,199 $10,680
2/28/94 $10,167 $10,863 $10,107
3/31/94 $9,732 $10,440 $9,699
4/30/94 $9,979 $10,560 $9,984
5/31/94 $9,804 $10,691 $9,710
6/30/94 $9,639 $10,484 $9,562
7/31/94 $9,995 $10,814 $9,946
8/31/94 $10,064 $11,221 $10,038
9/30/94 $9,801 $10,997 $9,812
10/31/94 $9,838 $11,227 $9,818
11/30/94 $9,681 $10,783 $9,640
12/31/94 $9,590 $10,996 $9,618
1/31/95 $10,151 $11,263 $10,133
2/28/95 $10,211 $11,669 $10,117
3/31/95 $10,161 $12,064 $10,071
4/30/95 $10,420 $12,401 $10,378
5/31/95 $10,790 $12,852 $10,696
6/30/95 $10,862 $13,212 $10,795
7/31/95 $11,068 $13,632 $11,037
8/31/95 $11,274 $13,604 $11,272
9/30/95 $11,897 $14,234 $11,822
10/31/95 $12,127 $14,163 $12,004
11/30/95 $12,358 $14,745 $12,223
12/31/95 $13,013 $15,089 $12,877
1/31/96 $13,212 $15,581 $13,135
2/29/96 $12,909 $15,690 $12,753
3/31/96 $12,698 $15,898 $12,637
4/30/96 $12,739 $16,111 $12,825
5/31/96 $12,688 $16,480 $12,896
6/30/96 $13,133 $16,609 $13,237
7/31/96 $12,422 $15,850 $12,567
8/31/96 $12,393 $16,148 $12,595
9/30/96 $12,505 $17,118 $12,841
10/31/96 $12,956 $17,567 $13,302
11/30/96 $13,408 $18,854 $13,856
12/31/96 $13,640 $18,547 $13,805
1/31/97 $13,872 $19,680 $14,286
2/28/97 $14,136 $19,797 $14,442
3/31/97 $13,351 $19,048 $13,802
4/30/97 $13,575 $20,155 $14,054
5/31/97 $14,364 $21,338 $14,787
6/30/97 $14,870 $22,371 $15,416
7/31/97 $15,117 $24,109 $15,923
8/31/97 $14,659 $22,723 $15,288
9/30/97 $15,696 $24,034 $16,272
10/31/97 $15,765 $23,205 $16,245
11/30/97 $17,407 $24,240 $17,659
12/31/97 $18,528 $24,758 $18,499

Past performance does not guarantee future results. Investment return and
principal value will fluctuate, and redemption value may be more or less than
original cost.

The line representing the fund's total return includes operating expenses (such
as transaction costs and management fees) that reduce returns, while the
indices' total return lines do not.

PORTFOLIO AT A GLANCE
12/31/97 12/31/96
Number of Companies 77 91
30-Day SEC Yield 2.93% 3.66%
Price/Earnings Ratio 17.2 16.0
Portfolio Turnover 92% 93%
Expense Ratio 0.72% 0.71%

PERFORMANCE & PORTFOLIO INFORMATION AMERICAN CENTURY INVESTMENTS 4

MANAGEMENT Q&A

An interview with John Schniedwind, Kurt Borgwardt and Joe Sterling,
portfolio managers on the Utilities fund investment team.

HOW DID THE FUND PERFORM IN 1997?

The fund produced excellent returns relative to the average utilities fund.
The fund returned 35.82%, compared with the 25.69% average return of the 94
utilities funds tracked by Lipper Analytical Services. For the year, the fund
ranked #1 in its Lipper category. The fund's longer-term returns are also very
strong. (See the Total Returns table on the previous page for other fund
performance comparisons.)

WHY DID THE FUND DO SO WELL COMPARED WITH THE AVERAGE UTILITIES FUND?

We manage the fund to deliver a "pure play" on utilities (primarily phone,
electric and natural gas companies). That means we were fully invested in
utilities stocks at all times. We don't try to time the market or to boost
returns and yields by straying outside of the utilities sector. According to
Morningstar, the average utilities fund holds a little over 14% of its assets in
cash, bonds and other securities.

Our commitment to utilities stocks helped us outperform our peers because
utilities shares beat the broader market in 1997. But that also means we may
underperform when utilities lag the market. In addition, being concentrated in
utilities can make the fund more volatile than some of its peers because it is
less diversified.

[bar graph - data below]

UTILITIES' ONE-YEAR RETURNS SINCE INCEPTION
(Periods ended December 31)

NYSE
Utilities Utilities Index
12/93* 6.60% 6.14%
12/94 -10.04% -9.39%
12/95 35.70% 33.89%
12/96 4.82% 7.20%
12/97 35.82% 34.01%

Past performance is no guarantee of future results. Investment return and
principal value will fluctuate, and redemption value may be more or less than
original cost.

* Return from the fund's 3/1/93 inception date to 12/31/93.

ANNUAL REPORT MANAGEMENT Q & A 5

MANAGEMENT Q&A

WHY DOES THE FUND'S SCHEDULE OF INVESTMENTS SHOW A 5% POSITION IN SHORT-TERM
CASH INVESTMENTS?

We are committed to maintaining a cash balance of 1% or less. The reason for
the apparent discrepancy is that the 5% figure doesn't reflect stock purchases
we had outstanding on December 31. When you deduct the outstanding purchases,
you get a net of 1% true cash in the portfolio.

It's not unusual for a fund with net cash inflows to invest a percentage of
its assets in high-quality, short-term securities, rather than leave that cash
uninvested while awaiting settlement of stock purchases.

WHY DID THE FUND'S DIVIDEND YIELD DECLINE FROM 3.66% TO 2.93% DURING THE YEAR?

One reason is the way fund dividend yields are calculated. The fund's yield
is a function of the amount of income the fund earns relative to its share price
(for a complete definition of the fund's 30-day SEC yield, see the Glossary on
page 21). Other things being equal, the higher the value of each fund share, the
lower its yield. Because the fund's share price rose by more than a third last
year, its yield was lower at the end of the year.

Another factor limiting the fund's yield is that many utilities companies
are simply paying smaller dividends than in the past. Deregulation is forcing
many of them to reinvest money that used to be paid out to shareholders to
increase competitiveness and grow the business.

But it's important to point out that while the fund's yield did decline, its
yield was still higher than that of the average utilities fund, according to
Lipper Analytical Services.

THE CHART ON PAGE 7 SHOWS A LARGE WEIGHTING IN COMMUNICATIONS STOCKS. WHY SUCH A
LARGE CONCENTRATION?

Because the fund's internal benchmark (described in detail in the fund's
December 31, 1996 annual report) is about 50% telecommunications companies. We
manage the fund to match the performance and risk characteristics of the
benchmark, so a concentration in telecom is natural.

The other reason is that the stock-ranking model we use to manage the fund
rated telecom stocks very highly. We select securities using a stock-ranking
model that evaluates utility stocks according to growth and value measures. One
effect of the deregulation of the telecommunications industry was more rapid
earnings growth for many companies. Stronger earnings growth coupled with
relatively reasonable share prices made many telecom stocks very attractive last
year.

TOP TEN HOLDINGS % of fund investments

As of As of
12/31/97 6/30/97

BellSouth Corp. 5.6% 5.0%
GTE Corp. 5.1% 4.8%
Ameritech Corp. 5.0% 5.1%
AirTouch Communications, Inc. 4.3% 1.0%
Bell Atlantic Corp. 4.0% 5.3%
Dominion Resources, Inc. 3.8% --
WorldCom, Inc. 3.6% 3.6%
Telefonos de Mexico, S.A. ADR 3.4% 2.0%
U S WEST Communications Group 3.3% 2.1%
SBC Communications Inc. 3.2% 5.1%

6 MANAGEMENT Q & A AMERICAN CENTURY INVESTMENTS

MANAGEMENT Q&A

WAS THERE A SECTOR THAT YOU UNDERWEIGHTED LAST YEAR?

We modestly underweighted electric utilities relative to the benchmark. Our
stock-ranking model found telecom and gas shares more attractive than electric
companies. Electrics were among the last utilities to be deregulated, so they
hadn't yet experienced the same degree of competition and consolidation as
telecom and gas. However, we believe electrics still offer relatively high
dividends and attractive values. And it's important to note that we're only
talking about modest adjustments to the fund's sector weightings--electric
utilities still made up about a third of the fund.

WHAT'S YOUR OUTLOOK FOR THE INDUSTRY OVER THE NEXT SIX MONTHS?

While we have a generally optimistic outlook for utilities shares, investors
should not expect a repeat of the 30%-plus returns of 1997. To the extent that
inflation remains low and interest rates are stable or declining, economic
conditions should be positive for utilities stocks. In addition, financial
turmoil in Asia should slow U.S. economic growth and reduce the profits of
economically sensitive companies. Because utilities have very little exposure to
Asia and typically produce relatively stable earnings and dividends, we would
expect generally strong demand for utility stocks to continue.

In particular, we think electric companies and natural gas stocks look
reasonably attractive going forward. These companies didn't run up as fast as
telecom stocks, so many of them still seem to be attractively valued. We also
see the potential for some positive earnings surprises. However, we'll exercise
caution, because not all companies are positioned to benefit equally from
deregulation.

WHAT ARE YOUR PLANS FOR THE FUND GOING FORWARD?

We'll continue to use the same disciplined, quantitative investment approach
that has helped the fund achieve solid long-term performance. We also intend to
remain fully invested in utilities at all times.

More specifically, we may continue to overweight the fund in telecom stocks
as long as these companies look attractive from a valuation and earnings growth
standpoint. We will also selectively add electric and natural gas stocks when we
think we see good relative value and earnings growth.

[bar chart - data below]

INDUSTRY BREAKDOWN FOR THE PORTFOLIO

12/31/97 6/30/97
Communications
Services 50% 52%
Electric 34% 36%
Natural Gas 10% 8%
Other 6% 4%

ANNUAL REPORT MANAGEMENT Q & A 7

<TABLE>
<CAPTION>
SCHEDULE OF INVESTMENTS

DECEMBER 31, 1997

Shares Value
- ------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS

COMMUNICATIONS EQUIPMENT--0.4%

9,400 Telefonica de Espana ADR $ 855,987
---------------------

COMMUNICATIONS SERVICES--49.8%

222,500 AirTouch Communications, Inc.(1) 9,247,656

13,700 Aliant Communications, Inc. 434,119

69,100 ALLTEL Corp. 2,837,419

132,500 Ameritech Corp. 10,666,250

93,600 AT&T Corp. 5,733,000

70,100 BCE, Inc. 2,335,206

94,000 Bell Atlantic Corp. 8,554,000

213,500 BellSouth Corp. 12,022,719

42,100 British Telecommunications plc
ADR 3,381,156

10,300 Cable & Wireless plc ADR 280,031

131,200 Cincinnati Bell Inc. 4,067,200

77,400 EXCEL Communications, Inc.(1) 1,122,300

208,900 GTE Corp. 10,915,025

43,500 Hong Kong Telecommunications
Ltd. ADR 897,188

71,800 MCI Communications Corp. 3,076,181

800 Mobile Telecommunication
Technologies Corp.(1) 17,700

93,100 SBC Communications Inc. 6,819,575

41,300 Telecom Corporation of New
Zealand Ltd. ADR 1,600,375

129,300 Telefonos de Mexico, S.A. CI L ADR 7,248,881

23,300 Transaction Network Services, Inc.(1) 396,100

158,100 U S WEST Communications Group 7,134,263

255,800 WorldCom, Inc.(1) 7,745,944

10,200 Xpedite Systems, Inc.(1) 309,825
---------------------

106,842,113
---------------------

ENERGY (PRODUCTION & MARKETING)--0.7%

37,300 Enron Corp. 1,550,281

10,000 Kaneb Services, Inc.(1) 51,875
---------------------

1,602,156
---------------------

Shares Value
- ------------------------------------------------------------------------------------

NATURAL GAS--10.4%

39,000 Columbia Gas System, Inc. (The) $ 3,063,937

19,100 Connecticut Energy Corp. 575,388

43,100 CTG Resources, Inc. 1,123,294

5,700 Consolidated Natural Gas Co. 344,850

33,300 Eastern Enterprises 1,498,500

41,300 Energen Corp. 1,641,675

26,200 Equitable Resources Inc. 926,825

30,100 Indiana Energy Inc. 991,419

48,900 NICOR Inc. 2,062,969

54,800 NUI Corp. 1,572,075

13,900 National Fuel Gas Co. 676,756

15,700 New Jersey Resources Corp. 628,981

51,100 Pacific Enterprises 1,922,638

63,900 People's Energy Corp. 2,516,062

2,700 Piedmont Natural Gas Co., Inc. 97,031

14,800 Southwestern Energy Co. 190,550

20,000 TransCanada Pipelines Ltd. 447,500

69,300 Washington Gas Light Co. 2,143,969
---------------------

22,424,419
---------------------

UTILITIES (ELECTRIC)--33.6%

52,000 Atlantic Energy, Inc. 1,101,750

172,800 Baltimore Gas & Electric Co. 5,886,000

46,000 Black Hills Corp. 1,621,500

27,100 Carolina Power & Light Co. 1,150,056

55,400 Central & South West Corp. 1,499,262

30,700 Central Hudson Gas & Electric
Corp. 1,346,962

47,100 Central Vermont Public Service
Corp. 718,275

190,600 Dominion Resources, Inc. (Va.) 8,112,412

141,300 El Paso Electric Co.(1) 1,033,256

62,600 Empresa Nacional de Electricidad
S.A. (Chile) ADR 1,107,238

171,000 Enova Corp. 4,627,687

159,700 Entergy Corp. 4,781,019

58,800 FPL Group, Inc. 3,480,225

37,900 GPU Inc. 1,596,538

See Notes to Financial Statements

8 SCHEDULE OF INVESTMENTS AMERICAN CENTURY INVESTMENTS

SCHEDULE OF INVESTMENTS

DECEMBER 31, 1997

Shares Value
- ------------------------------------------------------------------------------------

29,100 Kansas City Power & Light Co. $ 860,269

54,500 Korea Electric Power Corp. ADR 548,406

69,000 LG&E Energy Corp. 1,707,750

30,500 MDU Resources Group, Inc. 964,563

71,800 Minnesota Power & Light Co. 3,127,787

19,000 New Century Energies, Inc. 910,813

154,800 Niagara Mohawk Power Corp.(1) 1,625,400

26,000 NIPSCO Industries, Inc. 1,285,375

15,900 Otter Tail Power Co. 606,188

98,600 PP&L Resources, Inc. 2,360,237

64,300 Public Service Co. of New Mexico 1,523,106

18,800 Public Service Enterprise Group Inc. 595,725

101,500 Rochester Gas & Electric Corp. 3,451,000

233,300 Southern Co. 6,036,638

23,000 TECO Energy, Inc. 646,875

35,700 Texas Utilities Co. 1,483,781

60,600 UGI Corp. 1,776,338

119,400 Utilicorp United Inc. 4,634,213
---------------------

72,206,644
---------------------

UTILITIES (WATER)--0.1%

1,900 California Water Service Co. 112,219
---------------------

TOTAL COMMON STOCKS--95.0% 204,043,538
---------------------
(Cost $161,412,041)

SHORT-TERM CASH INVESTMENTS

$1,300,000 par value FHLB Discount Notes,
5.40%, 1/2/98(2) 1,300,000

Repurchase Agreement, State Street Boston
Corp., (U.S. Treasury obligations), in a joint
trading account at 5.50%, dated 12/31/97,
due 1/2/98 (Delivery value $9,402,872) 9,400,000
---------------------

TOTAL SHORT-TERM
CASH INVESTMENTS--5.0% 10,700,000
---------------------
(Cost $10,699,805)

TOTAL INVESTMENT SECURITIES--100.0% $214,743,538
=====================
(Cost $172,111,846)
</TABLE>

NOTES TO SCHEDULE OF INVESTMENTS

ADR = American Depositary Receipt

FHLB = Federal Home Loan Bank

(1) Non-income producing.

(2) The rates for U.S. Government Agency discount notes are the yield to
maturity at purchase.

See Notes to Financial Statements

ANNUAL REPORT SCHEDULE OF INVESTMENTS 9

STATEMENT OF ASSETS AND LIABILITIES

DECEMBER 31, 1997

ASSETS

Investment securities, at value (identified
cost of $172,111,846) (Note 3) ......................... $ 214,743,538

Cash ..................................................... 1,471,744

Receivable for investments sold .......................... 630,390

Receivable for capital shares sold ....................... 3,632,130

Dividend and interest receivable ......................... 664,552
--------------
221,142,354
--------------
LIABILITIES

Disbursements in excess of
demand deposit cash .................................... 381,097

Payable for investments purchased ........................ 10,009,329

Payable for capital shares redeemed ...................... 662,186

Dividends payable ........................................ 18,424

Accrued management fees (Note 2) ......................... 107,807

Accrued expenses and other liabilities ................... 1,791
--------------
11,180,634
--------------
Net Assets ............................................... $ 209,961,720
==============
CAPITAL SHARES,
$10.00 PAR VALUE

Authorized
2,000,000,000
==============
Outstanding .............................................. 14,746,680
==============
Net Asset Value Per Share ................................ $ 14.24
==============
NET ASSETS CONSIST OF:

Capital (par value and paid in surplus) .................. $164,273,04

Undistributed net investment income ...................... 249,655

Accumulated undistributed net
realized
gain from investment transactions ...................... 2,807,296

Net unrealized appreciation
on investments (Note 3) ................................ 42,631,720
--------------
$ 209,961,720
==============
See Notes to Financial Statements

10 STATEMENT OF ASSETS AND LIABILITIES AMERICAN CENTURY INVESTMENTS

STATEMENT OF OPERATIONS

YEAR ENDED DECEMBER 31, 1997

INVESTMENT INCOME

Income:

Dividends (net of foreign tax
withheld of $73,522) ................................... $ 5,686,31

Interest ................................................. 104,901
--------------
5,791,213
--------------

Expenses (Note 2):

Investment advisory fees ................................. 631,134

Transfer agency fees ..................................... 158,168

Administrative fees ...................................... 70,612

Printing and postage ..................................... 56,122

Registration and filing fees ............................. 19,774

Custodian fees ........................................... 14,026

Directors' fees and expenses ............................. 10,263

Auditing and legal fees .................................. 4,566

Telephone expenses ....................................... 3,942

Organizational expense ................................... 3,898

Other operating expenses ................................. 5,306
--------------
Total expenses ......................................... 977,811
--------------
Net investment income .................................... 4,813,402
--------------
REALIZED AND UNREALIZED
GAIN ON INVESTMENTS (NOTE 3)

Net realized gain ........................................ 14,150,655

Change in net unrealized appreciation .................... 25,220,795
--------------

Net realized and unrealized
gain on investments ...................................... 39,371,450
--------------

Net Increase in Net Assets
Resulting from Operations ................................ $44,184,852
==============
See Notes to Financial Statements

ANNUAL REPORT STATEMENT OF OPERATIONS 11

STATEMENTS OF CHANGES IN NET ASSETS

YEARS ENDED DECEMBER 31, 1997
AND DECEMBER 31, 1996

Increase (Decrease) in Net Assets 1997 1996

OPERATIONS

Net investment income ...................... $ 4,813,402 $ 6,584,313

Net realized gain on
investment transactions .................. 14,150,655 10,723,315

Change in net unrealized
appreciation (depreciation)
on investments ........................... 25,220,795 (12,484,403)
------------- -------------
Net increase in net assets
resulting from operations ............... 44,184,852 4,823,225
------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS

From net investment income ................. (4,602,845) (6,770,031)

From net realized gains from
investment transactions .................. (10,451,945) --
------------- -------------
Decrease in net assets
from distributions ....................... (15,054,790) (6,770,031)
------------- -------------
CAPITAL SHARE TRANSACTIONS

Proceeds from shares sold .................. 108,091,075 89,292,404

Proceeds from reinvestment
of distributions ......................... 13,016,905 5,798,940

Payments for shares redeemed ............... (85,409,985) (166,805,336)
------------- -------------
Net increase (decrease) in net assets
from capital share transactions .......... 35,697,995 (71,713,992)
------------- -------------
Net increase (decrease) in net assets ...... 64,828,057 (73,660,798)

NET ASSETS

Beginning of year .......................... 145,133,663 218,794,461
------------- -------------
End of year ................................ $ 209,961,720 $ 145,133,663
============= =============

Undistributed net investment income ........ $ 249,655 $ 39,218
============= =============
TRANSACTIONS IN
SHARES OF THE FUND

Sold ....................................... 8,043,039 7,945,349

Issued in reinvestment of distributions .... 973,561 521,583

Redeemed ................................... (6,883,378) (14,983,850)
------------- -------------
Net increase (decrease) .................... 2,133,222 (6,516,918)
============= =============
See Notes to Financial Statements

12 STATEMENTS OF CHANGES IN NET ASSETS AMERICAN CENTURY INVESTMENTS

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 1997

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION--American Century Quantitative Equity Funds (the Corporation)
is registered under the Investment Company Act of 1940 as an open-end management
investment company. American Century Utilities Fund (the Fund) is one of the
five funds issued by the Corporation. The Fund is non-diversified under the 1940
Act. The Fund seeks current income and long-term growth of capital and income.
The Fund invests primarily in equity securities of companies engaged in the
utilities industry. The following significant accounting policies, related to
the Fund, are in accordance with accounting policies generally accepted in the
investment company industry.

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

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

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

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

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

USE OF ESTIMATES--The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of increases and decreases in net assets
from operations during the period. Actual results could differ from these
estimates.

ORGANIZATION COSTS--Costs incurred by the Fund in connection with the
organization, initial registration, and public offering of shares are being
amortized on a straight-line basis over a five-year period ending February 1998.

ADDITIONAL INFORMATION--Effective January 15, 1998, Funds Distributor, Inc.
(FDI) became the Corporation's distributor. Certain officers of FDI are also
officers of the Corporation.

ANNUAL REPORT NOTES TO FINANCIAL STATEMENTS 13

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 1997

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

The shareholders of the Fund approved a new management agreement with ACIM
on July 30, 1997, effective August 1, 1997, which replaced the previously
existing contracts between the Fund and Benham Management Corporation and
American Century Services Corporation (ACSC) for advisory, administrative and
transfer agency services. Under the agreement, ACIM will provide all services
required by the Fund in exchange for one unified management fee. Expenses
excluded from this agreement are brokerage, taxes, portfolio insurance,
interest, fees and expenses of the Directors who are not considered "interested
persons" as defined in the Investment Company Act of 1940 (including counsel
fees) and extraordinary expenses. The annual rate at which this fee is assessed
is determined monthly in a two-step process: First, a fee rate schedule is
applied to the net assets of all of the funds in the Fund's investment category
which are managed by ACIM (the "Investment Category Fee"). The overall
investment objective of each Fund determines its Investment Category. The three
investment categories are: the Money Market Fund Category, the Bond Fund
Category, and the Equity Fund Category. The Fund is included in the Equity Fund
Category. Second, a separate fee rate schedule is applied to the net assets of
all of the funds managed by ACIM (the "Complex Fee"). The Investment Category
Fee and the Complex Fee are then added to determine the unified management fee
rate. The management fee is paid monthly by the Fund based on its aggregate
average daily net assets during the previous month multiplied by the monthly
management fee rate.

The annualized Investment Category Fee schedule for the Fund is as follows:

The annualized Complex Fee schedule is as follows:

Management fees of $423,153 were incurred under the new management agreement
and included in Investment Advisory Fees in the Statement of Operations. Total
expenses and the annualized ratio of operating expenses to average net assets,
under the previous agreement, for the seven months ended July 31, 1997 were
$554,658 and 0.73%, respectively.

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

Purchases and sales of securities, excluding short-term securities,
aggregated $148,936,393 and $125,476,737, respectively. On December 31, 1997,
accumulated net unrealized appreciation on investments was $42,020,906, based on
the aggregate cost of investments for federal income tax purposes of
$172,722,632, which consisted of unrealized appreciation of $42,236,301 and
unrealized depreciation of $215,395.

14 NOTES TO FINANCIAL STATEMENTS AMERICAN CENTURY INVESTMENTS

<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS

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

1997 1996 1995 1994 1993(1)
PER-SHARE DATA

Net Asset Value,
<S> <C> <C> <C> <C> <C>
Beginning of Period ............. $ 11.51 $ 11.44 $ 8.79 $ 10.24 $ 10.00
------------- ------------- ------------- ------------- -------------
Income From Investment Operations

Net Investment Income ......... 0.43 0.45 0.42 0.44 0.36

Net Realized and Unrealized
Gain (Loss)
on Investment Transactions .... 3.57 0.08 2.65 (1.45) 0.30
------------- ------------- ------------- ------------- -------------
Total From
Investment Operations ......... 4.00 0.53 3.07 (1.01) 0.66
------------- ------------- ------------- ------------- -------------
Distributions

From Net Investment Income .... (0.42) (0.46) (0.42) (0.44) (0.36)

From Net Realized Gains on
Investment Transactions ....... (0.85) -- -- -- (0.06)
------------- ------------- ------------- ------------- -------------
Total Distributions ........... (1.27) (0.46) (0.42) (0.44) (0.42)
------------- ------------- ------------- ------------- -------------
Net Asset Value, End of Period .. $ 14.24 $ 11.51 $ 11.44 $ 8.79 $ 10.24
============= ============= ============= ============= =============
Total Return(2) ............... 35.82% 4.82% 35.70% (10.03)% 6.60%

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses
to Average Net Assets ........... 0.72% 0.71% 0.75% 0.75% 0.50%(3)

Ratio of Net Investment Income
to Average Net Assets ........... 3.56% 3.88% 4.31% 4.67% 4.23%(3)

Portfolio Turnover Rate ......... 92% 93% 68% 61% 39%

Average Commission Paid per
Share of Equity Security Traded . $ 0.0376 $ 0.0380 $ 0.0300 --(4) --(4)

Net Assets, End
of Period (in thousands) ........ $ 209,962 $ 145,134 $ 218,794 $ 152,570 $ 194,314
</TABLE>

(1) March 1, 1993 (inception) through December 31, 1993.

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

(3) Annualized.

(4) Disclosure of average commission paid per share of equity security traded
was not required prior to the year ended December 31, 1995.

See Notes to Financial Statements

ANNUAL REPORT FINANCIAL HIGHLIGHTS 15

REPORT OF INDEPENDENT ACCOUNTANTS

To the Directors of the American Century Quantitative Equity Funds and
Shareholders of the American Century Utilities Fund:

We have audited the accompanying statement of assets and liabilities,
including the schedule of investments, of American Century Utilities Fund (one
of five funds comprising American Century Quantitative Equity Funds) as of
December 31, 1997, and the related statement of operations, statement of changes
in net assets, and the financial highlights for the year then ended. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audit. The statement
of changes in net assets as of December 31, 1996 and the financial highlights
for the four years in the period ended December 31, 1996, were audited by other
auditors, whose report, dated February 7, 1997, expressed an unqualified opinion
on those statements.

In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
American Century Utilities Fund as of December 31, 1997, the results of its
operations, the changes in its net assets and the financial highlights for the
year then ended, in conformity with generally accepted accounting principles.

Coopers & Lybrand L.L.P.

Kansas City, Missouri
February 10, 1998

16 REPORT OF INDEPENDENT ACCOUNTANTS AMERICAN CENTURY INVESTMENTS

RETIREMENT ACCOUNT INFORMATION

ANNUAL REPORT RETIREMENT ACCOUNT INFORMATION 17

NOTES

18 NOTES AMERICAN CENTURY INVESTMENTS

NOTES

ANNUAL REPORT NOTES 19

BACKGROUND INFORMATION

INVESTMENT PHILOSOPHY & POLICIES

The American Century group offers eight equity funds, including three
"specialty" equity funds* that concentrate their holdings in specific industries
or sectors of the stock market. These funds typically respond differently than
general equity funds to changing market or economic conditions. The funds are
managed to provide a broad representation of their respective industries.

UTILITIES seeks current income and long-term growth of capital and income.
The fund invests primarily in the stocks of companies engaged in the utilities
industry, including electricity, natural gas, telecommunications services, cable
television, water or sanitary services. To enhance fund income and increase
diversification, the fund may invest up to 25% of its assets in fixed-income
securities.

COMPARATIVE INDICES

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

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

The NEW YORK STOCK EXCHANGE (NYSE) UTILITIES INDEX is composed of 269
utilities and related equipment stocks traded on the NYSE.

The S&P ELECTRIC COMPANIES INDEX is composed of 26 electric power companies
in the S&P 500.

The S&P NATURAL GAS INDEX is composed of 11 natural gas distributors and
pipe line companies in the S&P 500.

The S&P TELEPHONE INDEX is composed of eight telephone companies in the S&P
500.

LIPPER RANKINGS

LIPPER ANALYTICAL SERVICES, INC. is an independent mutual fund ranking
service that groups funds according to their investment objective. Rankings are
based on average annual returns for each fund in a given category for the
periods indicated. Rankings are not included for periods less than one year.

The Lipper category for Utilities is:

UTILITY FUNDS--funds that invest at least 65% of their portfolios in utility
stocks.

INVESTMENT TEAM LEADERS

Portfolio Managers John Schniedwind
Kurt Borgwardt
Joe Sterling

* Investing in these funds involves special risks resulting from their
concentrated investment objectives. An investment in any one of these funds
does not constitute a balanced investment plan.

20 BACKGROUND INFORMATION AMERICAN CENTURY INVESTMENTS

GLOSSARY

RETURNS

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

* AVERAGE ANNUAL RETURNS illustrate the annually compounded returns that would
have produced the fund's cumulative total returns if the fund's performance had
been constant over the entire period. Average annual returns smooth out
variations in a fund's return; they are not the same as fiscal year-by-year
results. For fiscal year-by-year total returns, please refer to the "Financial
Highlights" on page 15.

PORTFOLIO STATISTICS

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

* 30-DAY SEC YIELD--net investment income earned by the fund over a 30-day
period, expressed as an annual percentage rate based on the fund's share price
at the end of the 30-day period. The SEC yield should be regarded as an estimate
of the fund's dividend income, and it may not equal the fund's actual income
distribution rate, the income paid to a shareholder's account, or the income
reported in the fund's financial statements.

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

TYPES OF STOCKS

ANNUAL REPORT GLOSSARY 21

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

P.O. BOX 419200
KANSAS CITY, MISSOURI
64141-6200

INVESTOR SERVICES:
1-800-345-2021 OR 816-531-5575

AUTOMATED INFORMATION LINE:
1-800-345-8765

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

FAX: 816-340-7962

INTERNET: WWW.AMERICANCENTURY.COM

AMERICAN CENTURY QUANTITATIVE EQUITY FUNDS

INVESTMENT MANAGER
AMERICAN CENTURY INVESTMENT MANAGEMENT, INC.
KANSAS CITY, MISSOURI

9802 [recycled logo]
SH-BKT-11220 Recycled